S-4

As filed with the Securities and Exchange Commission on July 11, 2003

333-             

Registration No. 333            

333-            

333-            

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM S-4

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

LYONDELL CHEMICAL COMPANY

LYONDELL CHEMICAL NEDERLAND, LTD.

ARCO CHEMICAL TECHNOLOGY, INC.

ARCO CHEMICAL TECHNOLOGY, L.P.

(Exact name of co-registrant as specified in its charter)

Delaware Delaware Delaware Delaware (State or other jurisdiction of incorporation or organization) 2869 2869 2869 2869 (Primary Standard Industrial Classification Code Number) 95-4160558 51-0110124 94-2400836 54-1613415 (I.R.S. Employer Identification No.)

1221 McKinney Street, Suite 700 Houston, Texas 77010 (713) 652-7200 (Address, including zip code, and telephone number, including area code, of each co-registrant’s principal executive offices) Kerry A. Galvin Senior Vice President, General Counsel & Secretary Lyondell Chemical Company 1221 McKinney Street, Suite 700 Houston, Texas 77010 (713) 652-7200 (Name, address, including zip code, and telephone number, including area code, of agent for service for each co-registrant)

Copy to:

Stephen A. Massad

Baker Botts L.L.P.

One Shell Plaza

910 Louisiana

Houston, Texas 77002

(713) 229-1234

Approximate date of commencement of proposed sale of the securities to the public: As soon as practicable following the effectiveness of this Registration Statement.

If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box. ¨

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act of 1933, as amended (the “Securities Act”), check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

CALCULATION OF REGISTRATION FEE

Title of each class of securities to be registered	Amount to be registered	Proposed maximum offering price per note(1)	Proposed maximum aggregate offering price(1)	Amount of registration fee
10 1/2% Senior Secured Notes due 2013	$325,000,000	100%	$325,000,000	$26,292.50
Guarantees of 10 1/2% Senior Secured Notes due 2013	—	—	—	(2)

(1) Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(f) under the Securities Act of 1933, as amended.

(2) Pursuant to Rule 457(n) of the Securities Act, no separate registration fee is payable for the guarantees.

The co-registrants hereby amend this registration statement on such date or dates as may be necessary to delay its effective date until the co-registrants shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with section 8(a) of the Securities Act or until the registration statement shall become effective on such date as the Commission, acting pursuant to said section 8(a), may determine.

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED JULY 11, 2003

PROSPECTUS

  

Lyondell Chemical Company

Offer to Exchange

$325,000,000

Registered

10 ¹/2% Senior Secured Notes due 2013

for

Outstanding Unregistered

10 ¹/2% Senior Secured Notes due 2013

The new notes:

• will be freely tradeable;

• are otherwise substantially identical to the outstanding unregistered notes issued on May 20, 2003;

• will accrue interest at 10 ¹/2% per annum, payable semiannually in arrears on each June 1 and December 1, beginning December 1, 2003;

• will be secured and will rank equally with outstanding unregistered notes that are not exchanged;

• will not be listed on any securities exchange or on any automated dealer quotation system, but may be sold in the over-the-counter market, in negotiated transactions or through a combination of those methods; and

• will be guaranteed by our subsidiaries Lyondell Chemical Nederland, Ltd., ARCO Chemical Technology, Inc. and ARCO Chemical Technology, L.P.

The exchange offer:

• expires at 5:00 p.m., New York City time, on                     , 2003, unless extended; and

• is not conditioned on any minimum aggregate principal amount of notes being tendered.

In addition, you should note that:

• all outstanding unregistered notes issued on May 20, 2003 that are validly tendered and not validly withdrawn will be exchanged for an equal principal amount of new notes that are registered under the Securities Act of 1933;

• tenders may be withdrawn any time before the expiration of the exchange offer;

• the exchange of notes in the exchange offer will not be a taxable event for U.S. federal income tax purposes; and

• the exchange offer is subject to customary conditions, which we may waive in our sole discretion.

You should consider carefully the risk factors beginning on page 12 of this prospectus before participating in the exchange offer.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the new notes or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The date of this prospectus is                     , 2003.

TABLE OF CONTENTS

	Page
WHERE YOU CAN FIND MORE INFORMATION	1
PROSPECTUS SUMMARY	2
SUMMARY CONSOLIDATED FINANCIAL DATA	10
RISK FACTORS	12
FORWARD-LOOKING STATEMENTS	28
USE OF PROCEEDS	29
CAPITALIZATION	30
THE EXCHANGE OFFER	31
DESCRIPTION OF OTHER INDEBTEDNESS	41
DESCRIPTION OF NEW NOTES	45
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS FOR NON-U.S. HOLDERS OF NOTES	91
PLAN OF DISTRIBUTION	94
LEGAL MATTERS	95
EXPERTS	95

This prospectus incorporates important business and financial information about us from documents that are not included in or delivered with this prospectus. This information is available to holders of the outstanding notes and new notes without charge upon written or oral request. You can obtain documents described in this prospectus or incorporated by reference in this prospectus by requesting them in writing or by telephone from us at the following address and telephone number:

Lyondell Chemical Company

1221 McKinney, Suite 700

Houston, Texas 77010

Telephone: (713) 652-4590

Attention: Investor Relations

To obtain timely delivery of any of our filings, agreements or other documents, you must make your request to us no later than                     , 2003. The exchange offer will expire at 5:00 p.m., New York City time, on                     , 2003. The exchange offer can be extended by us in our sole discretion, but we currently do not intend to extend the expiration date. See the caption “The Exchange Offer” for more detailed information.

MARKET, RANKING AND INDUSTRY DATA

The data included or incorporated by reference in this prospectus regarding markets and ranking, including the size of certain markets and our position and the position of our competitors within these markets, are based on independent industry publications, reports from government agencies or other published industry sources and our estimates. Our estimates are based on information obtained from our customers, distributors, suppliers, trade and business organizations and other contacts in the markets in which we operate and our management’s knowledge and experience. We believe these estimates to be accurate as of the date of the document in which the estimates were made or as of the date specified in such document. However, this information may prove to be inaccurate because of the methods by which we obtained some of the data for our estimates or because this information cannot always be verified with complete certainty due to the limits on availability and reliability of raw data, the voluntary nature of the data gathering process and other limitations and uncertainties inherent in a survey of market size.

i

NON-GAAP FINANCIAL MEASURES

The body of generally accepted accounting principles is commonly referred to as “GAAP.” For this purpose, a non-GAAP financial measure is generally defined by the SEC as one that purports to measure historical or future financial performance, financial position or cash flows but excludes or includes amounts that would not be so adjusted in the most comparable U.S. GAAP measure. From time to time we disclose so-called non-GAAP financial measures, primarily EBITDA, or earnings before interest, taxes and depreciation and amortization of long-lived assets, as well as proportionate share data for us and our joint ventures. The non-GAAP financial measures described herein are not a substitute for the GAAP measures of earnings, for which management has responsibility.

EBITDA is a key measure used by the banking and high-yield investing communities in their evaluation of economic performance. Accordingly, management believes that disclosure of EBITDA provides useful information to investors because it is frequently cited by financial analysts in evaluating companies’ performance and it is a key measure in the calculation of financial covenants contained in our credit facility and the indentures governing our senior debt. Management believes that inclusion of EBITDA in certain disclosures is useful because it increases the visibility of this component of the covenant analysis to an investor. Additionally, multiples of EBITDA are one measure of the indicated fair value of certain long-lived assets. For example, we used the multiples-of-EBITDA approach in evaluating our goodwill for impairment.

We also report proportionate share data for us and our joint ventures. The joint ventures are not consolidated, but accounted for by the equity method of accounting. Accordingly, in our financial statements investors only see a single line item – investments – for the joint ventures in the balance sheet and one line item – equity income from joint venture investments – in the income statement. As such, investors may not get a true appreciation of the magnitude of certain operating and financial data for us and our joint ventures and the scope of their business activities. Management believes that reporting proportionate share data may give investors a more complete picture of the size and scope of the operating activities of us and our joint ventures.

We also periodically report adjusted net income (loss) or adjusted EBITDA, excluding specified items that are unusual in nature or not comparable from period to period and that are included in GAAP measures of earnings. Management believes that excluding these items generally helps investors compare operating performance between two periods. Such adjusted data is not reported without an explanation of the items that are excluded.

ii

WHERE YOU CAN FIND MORE INFORMATION

We file annual, quarterly and special reports, proxy statements and other information with the SEC. Our SEC filings are available to the public over the Internet at the SEC’s web site at www.sec.gov. You may read and copy any document we file at the SEC’s public reference rooms in Washington, D.C., New York, New York and Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further information on the public reference rooms. In addition, because our common stock is listed on the New York Stock Exchange, reports and other information concerning us can also be inspected at the office of the New York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005. Our SEC filings are also available free of charge from our web site at www.lyondell.com. Information contained on our web site or any other web site is not incorporated into this prospectus and does not constitute a part of this prospectus.

We are incorporating by reference into this prospectus information we file with the SEC, which means that it is disclosing important information to you by referring you to those documents. The information incorporated by reference is an important part of this prospectus, and information that we file later with the SEC will automatically update and supersede the information in this prospectus.

We are incorporating by reference the documents listed below and any future filings made with the SEC (file no. 1-10145) under Section 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934, as amended (other than Current Reports furnished under Item 9 or Item 12 of Form 8-K) until the exchange offer expires or is terminated.

(1) Annual Report on Form 10-K	Year ended December 31, 2002
(2) Current Reports on Form 8-K	Filed on March 14, 2003, April 1, 2003, May 14, 2003 and May 16, 2003
(3) Quarterly Report on Form 10-Q	Filed on May 9, 2003

You may request a copy of these filings (excluding exhibits), at no cost, by writing or telephoning us at the following address:

Lyondell Chemical Company

1221 McKinney, Suite 700

Houston, Texas 77010

Telephone: (713) 652-4590

Attention: Investor Relations

Whether or not required by the rules and regulations of the SEC, as long as any notes are outstanding, we have agreed to furnish to the Trustee and to the holders of the notes:

(1) all quarterly and annual financial information that would be required to be contained in a filing with the SEC on Forms 10-Q and 10-K if Lyondell were required to file such Forms, including a “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and, with respect to the annual information only, a report thereon by our certified independent accountants; and

(2) all current reports that would be required to be filed with the SEC on Form 8-K if we were required to file such reports.

In addition, whether or not required by the rules and regulations of the SEC, we will file a copy of all such information and reports with the SEC for public availability.

In addition, whether or not required by the rules and regulations of the SEC, Lyondell will file a copy of all such information and reports with the SEC for public availability and make such information available to securities analysts and prospective investors upon request.

In addition, Lyondell has agreed that, for so long as any unregistered notes remain outstanding, it will furnish to the holders and to securities analysts and prospective investors, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act. Any such request and requests for the agreements summarized herein should be directed to the address referred to above.

1

PROSPECTUS SUMMARY

This summary highlights information contained elsewhere in this prospectus or incorporated by reference into this prospectus. You should read the entire prospectus, including “Risk Factors” and the information incorporated by reference into this prospectus, before deciding whether to participate in the exchange offer.

Our Business

We are a global chemical company. We manufacture and market a variety of intermediate and performance chemicals, including propylene oxide and its derivatives, propylene glycol, propylene glycol ethers and butanediol, co-products styrene monomer and tertiary butyl alcohol and its derivative, methyl tertiary butyl ether (MTBE), as well as toluene diisocyanate and methanol, which are collectively known as our intermediate chemicals and derivatives business.

We own 70.5 percent of Equistar Chemicals, LP, a Delaware limited partnership (Equistar), which operates petrochemicals and polymers businesses. Millenium Chemicals Inc. owns the remaining 29.5 percent of Equistar. Equistar’s petrochemicals business manufactures and markets olefins, oxygenated products, aromatics and specialty products. Equistar’s olefins include ethylene, propylene and butadiene, and its oxygenated products include ethylene oxide and its derivatives, ethylene glycol, ethanol and MTBE. Equistar’s aromatics include benzene and toluene. Equistar’s polymers business manufactures and markets polyolefins, including high density polyethylene, low density polyethylene, linear low density polyethylene, polypropylene and performance polymers. Equistar’s performance polymers include enhanced grades of polyethylene, such as wire and cable insulating resins, and polymeric powders.

We also own 58.75 percent of LYONDELL-CITGO Refining LP, a Delaware limited partnership (LCR), which produces refined petroleum products, including gasoline, low sulfur diesel, jet fuel, aromatics and lubricants. LCR sells its principal refined products primarily to CITGO Petroleum Corporation, which owns the remaining 41.25 percent of LCR.

In this prospectus, we refer to Lyondell, its wholly owned and majority owned subsidiaries, and its ownership interest in equity affiliates as “we” or “us,” unless we specifically state otherwise or the context indicates otherwise.  

Lyondell is a Delaware corporation with principal executive offices located at 1221 McKinney Street, Suite 700, Houston, Texas 77010 (Telephone: (713) 652-7200).

Lyondell Chemical Nederland, Ltd., ARCO Chemical Technology, Inc. and ARCO Chemical Technology, L.P. will jointly and severally and unconditionally guarantee our payment of obligations under the new notes offered by this prospectus. Lyondell Chemical Nederland, Ltd. and ARCO Chemical Technology, Inc. are both Delaware corporations and ARCO Chemical Technology, L.P. is a Delaware limited partnership. The subsidiary guarantors have principal executive offices located at c/o Lyondell Chemical Company, 1221 McKinney Street, Suite 700, Houston, Texas 77010 (Telephone: (713) 652-7200).

2

Summary of the Exchange Offer

On May 20, 2003, we completed a private offering of $325 million of 10 ¹/2% senior secured notes due 2013, which we refer to as the “outstanding notes” or the “outstanding unregistered notes” in this prospectus. We are now offering to exchange registered and freely tradeable notes with substantially identical terms as your outstanding notes, which we refer to as the “new notes” in this prospectus, in exchange for properly tendered outstanding notes.

This prospectus and the accompanying documents contain detailed information about us, the new notes and the exchange offer. You should read the discussion under the heading “The Exchange Offer” for further information regarding the exchange offer and resale of the new notes. You should read the discussion under the headings “—Summary of the Terms of the New Notes” and “Description of New Notes” for further information regarding the new notes.

The Exchange Offer We are offering to issue to you new registered 10 ¹/2% senior secured notes due 2013 without transfer restrictions or registration rights in exchange for your outstanding unregistered 10 ¹/2% senior secured notes due 2013.

Expiration Date Unless sooner terminated, the exchange offer will expire at 5:00 p.m., New York City time, on                 , 2003, or at a later date and time to which we extend it. We do not currently intend to extend the expiration date.

Conditions to the Exchange Offer We will not be required to accept outstanding notes for exchange if the exchange offer would violate applicable law or if any legal action has been instituted or threatened that would impair our ability to proceed with the exchange offer. The exchange offer is not conditioned on any minimum aggregate principal amount of outstanding notes being tendered. The exchange offer is subject to customary conditions, which we may waive in our sole discretion. Please read the section “The Exchange Offer—Conditions to the Exchange Offer” for more information regarding the conditions to the exchange offer.

Procedures for Tendering Outstanding Notes. If you wish to participate in the exchange offer, you must complete, sign and date the letter of transmittal and mail or deliver the letter of transmittal, together with your outstanding notes, to the exchange agent prior to the expiration date. If your outstanding notes are held through The Depository Trust Company, or DTC, you may deliver your outstanding notes by book-entry transfer.

In the alternative, if your outstanding notes are held through DTC and you wish to participate in the exchange offer, you may do so through the automated tender offer program of DTC. If you tender under this program, you will agree to be bound by the letter of transmittal that we are providing with this prospectus as though you had signed the letter of transmittal.

3

By signing or agreeing to be bound by the letter of transmittal, you will represent to us, among other things, that:

• you are not our “affiliate,” as defined in Rule 405 of the Securities Act of 1933, or a broker-dealer tendering outstanding notes acquired directly from us for your own account;

• if you are not a broker-dealer or are a broker-dealer but will not receive new notes for your own account, you are not engaged in and do not intend to participate in a distribution of the new notes;

• you have no arrangement or understanding with any person to participate in the distribution of the new notes or the outstanding notes within the meaning of the Securities Act;

• any new notes you receive will be acquired in the ordinary course of your business; and

• if you are a broker-dealer that will receive new notes for your own account in exchange for outstanding notes, those outstanding notes were acquired as a result of market-making activities or other trading activities, and you will deliver a prospectus, as required by law, in connection with any resale of those new notes.

Please see “The Exchange Offer—Purpose and Effect of the Exchange Offer” and “The Exchange Offer—Your Representations to Us.”

Withdrawal Rights You may withdraw outstanding notes that have been tendered at any time prior to the expiration date by delivering a written or facsimile withdrawal notice to the exchange agent.

Procedures for Beneficial Owners Only a registered holder of the outstanding notes may tender in the exchange offer. If you beneficially own outstanding notes registered in the name of a broker, dealer, commercial bank, trust company or other nominee and you wish to tender your outstanding notes in the exchange offer, you should promptly contact the registered holder and instruct it to tender the outstanding notes on your behalf.

If you wish to tender your outstanding notes on your own behalf, you must either arrange to have your outstanding notes registered in your name or obtain a properly completed bond power from the registered holder before completing and executing the letter of transmittal and delivering your outstanding notes. The transfer of registered ownership may take considerable time.

Guaranteed Delivery Procedures If you wish to tender your outstanding notes and cannot comply before the expiration date with the requirement to deliver the letter of transmittal and notes or use the applicable procedures under the automated tender offer program of DTC, you must tender your outstanding notes according to the guaranteed delivery procedures described in “The Exchange Offer—Guaranteed Delivery Procedures”. If you tender using the guaranteed delivery procedures, the exchange agent must receive the properly completed and executed

4

letter of transmittal or facsimile thereof, together with your outstanding notes or a book-entry confirmation and any other documents required by the letter of transmittal, within three New York Stock Exchange trading days after the expiration date.

Consequences of Failure to Exchange Your Notes If you do not exchange your outstanding notes in the exchange offer, you will no longer be entitled to registration rights. You will not be able to offer or sell the outstanding notes unless they are later registered, sold pursuant to an exemption from registration or sold in a transaction not subject to the Securities Act or applicable state securities laws. Other than in connection with the exchange offer or as specified in the registration rights agreement, we are not obligated to, nor do we currently anticipate that we will, register the outstanding notes under the Securities Act. See “The Exchange Offer—Consequences of Failure to Exchange.”

U.S. Federal Income Tax Considerations The exchange of new notes for outstanding notes in the exchange offer will not be a taxable event for U.S. federal income tax purposes. For a discussion of additional U.S. federal income tax considerations to non-U.S. persons, please read “Certain United States Federal Income Tax Considerations for Non-U.S. Holders of Notes”.

Use of Proceeds We will not receive any cash proceeds from the issuance of the new notes.

Plan of Distribution All broker-dealers who receive new notes in the exchange offer have a prospectus delivery obligation.

Based on SEC no-action letters, broker-dealers who acquired their outstanding notes as a result of market-making or other trading activities may use this exchange offer prospectus, as supplemented or amended, in connection with the resales of the new notes. We have agreed to make this prospectus available to any broker-dealer delivering a prospectus as required by law in connection with resales of the notes for up to 180 days from the closing of the exchange offer.

Broker-dealers who acquired their outstanding notes from us may not rely on SEC staff interpretations in no-action letters. Broker-dealers who acquired the outstanding notes from us must comply with the registration and prospectus delivery requirements of the Securities Act, including being named as selling noteholders, in order to resell the outstanding notes or the new notes.

5

The Exchange Agent

We have appointed The Bank of New York as exchange agent for the exchange offer. You should direct questions and requests for assistance, requests for additional copies of this prospectus or of the letter of transmittal and requests for the notice of guaranteed delivery to the exchange agent addressed as follows:

For Delivery by Mail, Overnight Delivery or by Hand:

The Bank of New York

101 Barclay Street

Floor 7 East

New York, NY 10286

Attn: Carolle Montreuil—Reorganization Unit

By Facsimile Transmission (for eligible institutions only):

(212) 298-1915

Attn: Carolle Montreuil

To Confirm Receipt:

(212) 815-5920

6

Summary of the Terms of the New Notes

The new notes will be freely tradeable and otherwise substantially identical to the outstanding notes, except that the new notes will not have registration rights. The new notes will evidence the same debt as the outstanding notes, and the outstanding notes and the new notes will be governed by the same indenture.

Issuer Lyondell Chemical Company.

New Notes Offered $325,000,000 principal amount of registered 10 ¹/2% Senior Secured Notes due 2013.

Maturity Date The new notes will mature on June 1, 2013.

Interest Payment Dates The new notes bear interest at an annual rate equal to 10 ¹/2%. Interest payments will be made semi-annually on each June 1 and December 1, beginning December 1, 2003.

Guarantees The new notes will be unconditionally guaranteed by our subsidiaries Lyondell Chemical Nederland, Ltd., ARCO Chemical Technology, Inc. and ARCO Chemical Technology, L.P. The guarantees of the new notes will be general obligations of each guarantor and will rank equally with all existing and future unsubordinated debt of each guarantor. These subsidiaries are also guarantors of our obligations under our credit facility and under our existing senior secured notes and senior subordinated notes. You should read “Description of New Notes—Subsidiary Guarantees” for a description of the guarantees.

Collateral The new notes will be secured by a lien equally and ratably with all secured debt outstanding under our credit facility and our existing senior secured notes and, with respect to certain of our manufacturing plants, the debentures that we assumed when we acquired ARCO Chemical Company, which we call the Lyondell debentures. The liens will constitute first-priority liens, subject to certain exceptions and permitted liens, on:

• our personal property;

• substantially all the equity interests of domestic subsidiaries directly owned by us and 65% of the stock of foreign subsidiaries directly owned by us;

• the rights of certain of our subsidiaries to receive distributions from certain of our existing joint ventures in which they own equity interests and all the equity interests in such subsidiaries; and

• mortgages on our facilities located in Pasadena (Bayport), Texas, Channelview, Texas and Lake Charles, Louisiana.

If and when the liens no longer secure our credit facility, the new notes, as well as the existing senior secured notes and the Lyondell debentures, will automatically cease to be secured by the liens. The liens would automatically terminate if the revolving loans and term

7

loans under our credit facility were repaid in full and the related commitments terminated thereunder without being replaced with another secured facility. The liens that secure our credit facility would be released if such a release were approved by the requisite lenders under the credit facility, and the consent of the holders of the new notes would not be required for such a release. In addition, the collateral agent and Lyondell may amend the provisions of the security documents with the consent of the requisite lenders and without the consent of the holders of the new notes. The lenders under our credit facility will have the sole ability to control remedies (including any sale or liquidation after acceleration of the new notes or the debt under the credit facility) with respect to the collateral. See “Risk Factors—Risk Factors Relating to Our Debt and the New Notes—You may not be able to fully realize the value of your liens—The security for your benefit can be released without your consent.” You should read “Description of New Notes—Security” for a more complete description of the security granted to the holders of the new notes.

Ranking The new notes will rank equally with the outstanding notes and all our existing and future unsecured senior debt and prior to all such debt to the extent of the value of the collateral available to the holders of the new notes, which collateral is shared by such holders on a ratable basis with the holders of our other senior secured debt, including the debt under the credit facility, debt under our existing senior secured notes and, with respect to the mortgages, the Lyondell debentures.

The new notes will also effectively rank junior to all liabilities of our subsidiaries that have not guaranteed the new notes and all liabilities of our joint ventures.

At March 31, 2003, after giving effect to the sale of the outstanding notes and the application of the net proceeds therefrom:

• We and the guarantors would have had outstanding approximately $3.6 billion of unsubordinated debt that was secured by the same assets, including the new notes;

• Our joint ventures, which have not guaranteed the new notes, would have had approximately $4.5 billion of outstanding total liabilities, excluding intercompany liabilities but including $2.9 billion of long-term debt, including current maturities, that are effectively senior to the new notes with respect to the assets of our joint ventures; and

• Our subsidiaries that have not guaranteed the new notes would have had approximately $255 million of outstanding total liabilities, excluding intercompany liabilities but including $2 million of long-term debt, including current maturities, that are effectively senior to the new notes.

Optional Redemption We may redeem any of the new notes at any time on or after June 1, 2008 at the redemption prices described in “Description of New Notes—Optional Redemption.”

8

Change of Control Upon the occurrence of certain change of control events described in “Description of New Notes—Repurchase at the Option of Holders— Change of Control” you may require us to repurchase some or all of your notes at 101% of their principal amount, plus accrued interest. The occurrence of those events will impose similar repurchase requirements for our other senior secured notes and our senior subordinated notes and may also be an event of default under our credit facility. We cannot assure you that we will have sufficient resources to satisfy our repurchase obligation in such circumstances. You should read carefully the sections called “Risk Factors—Risk Factors Relating to Our Debt and the New Notes—We may not be able to repurchase your new notes upon a change of control” and “Description of New Notes.”

Covenants The new notes will be issued under the same indenture as the outstanding notes. The indenture contains certain covenants limiting or prohibiting our ability and our subsidiaries’ ability to:

• incur additional debt or issue subsidiary preferred stock;

• increase dividends on our capital stock;

• redeem or repurchase capital stock or repurchase subordinated debt;

• engage in transactions with affiliates, except on an arm’s-length basis;

• create liens or engage in sale and leaseback transactions;

• make some types of investments and sell assets; and

• consolidate or merge with, or sell substantially all our assets to, another person.

Certain of these covenants will no longer apply if the new notes are rated “BBB-” by Standard & Poor’s or “Baa3” by Moody’s, even if the new notes are subsequently downgraded to a lower rating. You should read “Description of New Notes—Certain Covenants” for a description of these covenants.

Risk Factors

You should carefully consider all the information set forth in this prospectus and, in particular, the specific factors in the section of this prospectus entitled “Risk Factors” for an explanation of certain risks of investing in the new notes.

9

SUMMARY CONSOLIDATED FINANCIAL DATA

The following table presents our summary consolidated financial data. The historical financial data has been derived from our audited consolidated financial statements for the years ended December 31, 2000, 2001 and 2002 and from our unaudited consolidated financial statements for the three months ended March 31, 2002 and 2003. You should read this summary consolidated financial data in connection with the business and financial information contained in our Annual Report on Form 10-K and our Quarterly Report on Form 10-Q that are incorporated by reference in this prospectus, including “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes thereto.

	For the year ended December 31,								For the three months ended March 31,
	2000		2001			2002			2002			2003
	(in millions)
Income statement data:
Sales and other operating revenues	$	4,003	$	3,193		$	3,262		$	674		$	989
Cost of sales		3,403		2,862			2,898			589			956
Selling, general and administrative and research and development		229		189			190			47			51
Income from equity investments		199		40			14			(21	)		(83	)
Net income (loss) (a)		437		(150	)		(148	)		(55	)		(113	)
Balance sheet data (at end of period):
Property, plant and equipment, net		2,429		2,293			2,369			2,265			2,364
Total assets		7,047		6,703			7,448			6,375			7,368
Total debt (b)		3,854		3,853			3,927			3,840			3,927
Total stockholders’ equity		1,145		749			1,179			654			1,094
Other financial data:
Depreciation and amortization		261		254			244			56			57
Capital expenditures (c)		104		68			22			11			9
Ratio of earnings to fixed charges (d)		2.0x		—			—			—			—

10

Notes to Summary Consolidated Financial Data

(a)    As a result of implementing Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets, effective January 1, 2002, Lyondell’s pretax income in 2002 and subsequent years is favorably affected by $30 million annually because of the elimination of Lyondell’s goodwill amortization. The following table presents Lyondell’s results of operations for all periods presented as adjusted to eliminate goodwill amortization.

	For the year ended December 31,								For the three months ended March 31,
	2000		2001			2002			2002			2003
	Millions of dollars, except per share data
Reported net income (loss)	$	437	$	(150	)	$	(148	)	$	(55	)	$	(113	)
Add back: goodwill amortization, net of tax		23		22			—			—			—
Adjusted net income (loss)	$	460	$	(128	)	$	(148	)	$	(55	)	$	(113	)
Diluted earnings per share: (1)
Reported net income (loss)	$	3.71	$	(1.28	)	$	(1.10	)	$	(.47	)	$	(.70	)
Add back: goodwill amortization, net of tax		.20		.19			—			—			—
Adjusted net income (loss)	$	3.91	$	(1.09	)	$	(1.10	)	$	(.47	)	$	(.70	)

(1) Basic and diluted earnings (loss) per share are the same in all years except that basic earnings per share in 2000 are higher by $0.01.

(b)    Does not include $2.9 billion in joint venture debt as of March 31, 2003, $300 million of which is Equistar debt for which Lyondell is a guarantor and $30 million for which Lyondell is a co-obligor.

(c)    In addition, Lyondell made contributions to the PO-11 joint venture to fund capital projects of $110 million for 2001, $55 million for 2002, $12 million for the three months ended March 31, 2002 and $27 million for the three months ended March 31, 2003.

(d)    The ratio of earnings to fixed charges is computed by dividing earnings available for fixed charges by fixed charges. Earnings available for fixed charges consist of earnings before income taxes plus fixed charges, less capitalized interest. Fixed charges consist of interest, whether expensed or capitalized, and the portion of operating lease rental expense that represents the interest factor. In 2001 and 2002, earnings were insufficient to cover fixed charges by $224 million and $201 million, respectively. In the first quarters of 2002 and 2003, earnings were insufficient to cover fixed charges by $75 million and $170 million, respectively.

11

RISK FACTORS

There are many risks that may affect your investment in the new notes. Some of these risks, but not all of them, are listed below. You should carefully consider these risks as well as the other information included or incorporated by reference in this prospectus before exchanging your outstanding notes.

Risk Factors Relating to the Exchange Offer

If you fail to exchange your outstanding notes, the existing transfer restrictions will remain in effect and the market value of your outstanding notes may be adversely affected because they may be more difficult to sell.

If you do not exchange your outstanding notes for new notes under the exchange offer, then you will continue to be subject to the existing transfer restrictions on the outstanding notes. In general, the outstanding notes may not be offered or sold unless they are registered or exempt from registration under the Securities Act and applicable state securities laws. Except in connection with this exchange offer or as required by the registration rights agreement, we do not intend to register resales of the outstanding notes under the Securities Act.

Tenders of outstanding notes under the exchange offer will reduce the aggregate principal amount of the unregistered notes outstanding. This may have an adverse effect upon, and increase the volatility of, the market price of any outstanding notes that you continue to hold following completion of the exchange offer due to a reduction in liquidity.

Risk Factors Relating to Our Debt and the New Notes

The risks described in this section that apply to the new notes also apply to any outstanding notes not tendered for new notes in the exchange offer.

Our balance sheet is highly leveraged.

As of March 31, 2003, after giving effect to the sale of the outstanding notes and the application of the net proceeds therefrom, we would have had outstanding debt of approximately $4.1 billion. This debt would have represented approximately 77% of our total capitalization. Our debt amounts do not include approximately $2.9 billion in joint venture debt at March 31, 2003, which includes $300 million of Equistar debt for which Lyondell is a guarantor and $30 million for which Lyondell is a co-obligor (although as between Lyondell and Equistar with respect to this debt, Equistar is primarily liable). In addition, as of March 31, 2003 we had $300 million of available capacity (net of $50 million of outstanding letters of credit) under our revolving credit facility and we may continue to borrow thereunder to fund working capital or other needs in the near term. We also have additional contractual commitments described under “Management’s Discussion and Analysis of Financial Conditions and Results of Operations” incorporated by reference herein.

In addition to our debt and other contractual obligations, we and our joint ventures have substantial unfunded post-retirement benefit liabilities. At December 31, 2002, the projected benefit obligation for Lyondell’s post-retirement plans exceeded the fair value of plan assets by $302 million. Subject to future actuarial gains and losses, as well as actual asset earnings, Lyondell will be required to fund the $302 million, with interest, in future years. The minimum required contribution may reach an annual rate of approximately $60 million by 2006, due to past investment losses and relatively low current contribution levels. Equistar and LCR also have unfunded post-retirement benefit liabilities.

We will require a significant amount of cash to service our indebtedness, including the new notes, and our ability to generate cash depends on many factors beyond our control.

Our ability to make payments on and to refinance our indebtedness, including the new notes, will depend on our ability to generate cash in the future. Our ability to fund working capital and planned capital expenditures will also depend on our ability to generate cash in the future. We cannot assure you that:

• our business will generate sufficient cash flow from operations;

12

• future borrowings will be available under our current or future revolving credit facilities in an amount sufficient to enable us to pay our indebtedness on or before maturity; or

• we will be able to refinance any of our indebtedness on commercially reasonable terms, if at all.

Factors beyond our control will affect our ability to make these payments and refinancings. These factors include those discussed elsewhere in these risk factors and those listed in the “Forward-Looking Statements” section of this prospectus.

If, in the future, we cannot generate sufficient cash from our operations to meet our debt service obligations, we may need to reduce or delay capital expenditures or curtail research and development efforts. In addition, we may need to refinance our debt, obtain additional financing or sell assets, which we may not be able to do on commercially reasonable terms, if at all. We cannot assure you that our business will generate sufficient cash flow, or that we will be able to obtain funding sufficient to satisfy our debt service obligations.

Our debt agreements may restrict our ability to take certain actions.

Our indentures.    The indenture governing the new notes contains, and our other indentures contain, various covenants that limit our ability to engage in certain transactions. These covenants limit our ability to:

• incur additional debt or issue subsidiary preferred stock;

• increase dividends on our capital stock;

• redeem or repurchase capital stock or repurchase subordinated debt;

• engage in transactions with affiliates, except on an arm’s-length basis;

• create liens or engage in sale and leaseback transactions;

• make some types of investments and sell assets; and

• consolidate or merge with, or sell substantially all our assets to, another person.

Our credit facility.    Our credit facility also contains restrictive covenants and limits our ability to optionally prepay other debt (including the new notes) until our senior unsecured debt is rated investment grade. The credit facility also requires us to maintain specified financial ratios and to satisfy certain other financial condition tests. Our ability to meet those financial ratios and tests can be affected by events beyond our control, and we cannot assure you that we will be able to satisfy those covenants. As a result of continuing adverse conditions in the industry, in March 2003, we obtained amendments to our credit facility to provide additional financial flexibility by easing certain financial ratio requirements. The financial ratio requirements under our credit facility, however, become increasingly restrictive over time. Our ability to comply with these financial ratios will be dependent on there being an improvement in our results of operations in the second half of 2003 and thereafter compared to 2002.

Our credit facility covenants also limit our ability to:

• increase dividends with respect to our capital stock;

• make some types of investments; and

• allow our subsidiaries to incur some types and amounts of debt.

A breach of any of these provisions would permit the lenders to declare all amounts outstanding under the credit facility to be immediately due and payable and to terminate all commitments to extend further credit. If we were unable to repay those amounts, the lenders could proceed against the collateral granted to them to secure

13

that debt. Under the terms of the new notes, we will pledge the same assets pledged under the credit facility and our existing senior secured notes as security for obligations under the new notes. Some of these assets are also pledged to secure Lyondell’s debentures. If the lenders under our credit facility were to accelerate the repayment of borrowings thereunder, we cannot assure you that we would have sufficient assets to repay the new notes. For more information concerning our debt agreements, see “Description of Other Indebtedness.”

We have risks resulting from significant amounts of debt.

As of March 31, 2003, after giving effect to the sale of the outstanding notes and the application of net proceeds therefrom, Lyondell would have had outstanding long-term debt, including current maturities, of approximately $4.1 billion. This debt would have represented approximately 77% of Lyondell’s total capitalization. Our level of debt and the limitations imposed on us by our existing or future debt agreements could have significant consequences on our business and future prospects, including the following:

• we may not be able to obtain necessary financing in the future for working capital, capital expenditures, research and development efforts, acquisitions, debt service requirements or other purposes;

• less leveraged competitors could have a competitive advantage because they have greater flexibility to utilize their cash flow to improve their operations; and

• we could be more vulnerable in the event of continued poor business conditions that would leave us less able to take advantage of significant business opportunities and to react to changes in market or industry conditions.

Equistar has risks resulting from significant amounts of debt and its debt agreements may restrict its ability to take certain actions.

As of March 31, 2003, after giving effect to the sale on April 22, 2003 of $450 million of 10.625% senior notes due 2011 and the application of the proceeds therefrom, Equistar would have had outstanding long-term debt, including current maturities, of approximately $2.3 billion. This debt would have represented approximately 54% of Equistar’s total capitalization. Also, beginning in third quarter 2003, Equistar expects to consolidate an entity from which it leases certain railcars. The consolidation of this entity as of March 31, 2003 would have increased debt by $103 million. In addition, as of March 31, 2003, Equistar has $338 million of available capacity (net of $16 million in outstanding letters of credit) under its revolving credit facility and may borrow thereunder to fund working capital or other needs in the near term. Equistar’s level of debt and the limitations imposed on it by its existing or future debt agreements could have significant consequences on Equistar’s business and future prospects, including the following:

• Equistar may not be able to obtain necessary financing in the future for working capital, capital expenditures, research and development efforts, acquisitions, debt service requirements or other purposes;

• less leveraged competitors could have a competitive advantage because they have greater flexibility to utilize their cash flow to improve their operations;

• Equistar could be more vulnerable in the event of continued poor business conditions that would leave it less able to take advantage of significant business opportunities and to react to changes in market or industry conditions; and

• Equistar is exposed to risks inherent in interest rate fluctuations because some of its borrowings are at variable rates of interest, which could result in higher interest expense in the event of increases in interest rates.

14

Further, Equistar’s credit facility and indentures relating to its senior debt securities contain customary covenants that, subject to exceptions, restrict the ability of Equistar to incur additional debt or liens, dispose of assets, make restricted payments (as defined in the agreements) or merge or consolidate with other entities. In addition, the credit facility requires the maintenance of specified financial ratios as provided in the agreement. Equistar’s ability to comply with the financial ratios required by its credit facility will be dependent on there being an improvement in Equistar’s results of operations in the second half of 2003 and thereafter compared to 2002. The current financial ratio requirements under Equistar’s credit facility generally become increasingly restrictive over time. The breach of these covenants would permit the lenders to declare the loans immediately payable and would permit the lenders under the credit facility to terminate future lending commitments.

Our joint ventures are not subject to most of the covenants under the new notes.

Neither Equistar nor LCR is a “subsidiary” or a “restricted subsidiary” of Lyondell, as those terms are defined in the indenture governing the new notes and are defined in our other indentures. Therefore, these and our other joint ventures are not subject to the covenants described above. As a result, holders of the new notes will have no recourse if Equistar or LCR substantially increases its debt leverage. The indenture obligates us to use our best efforts, consistent with our contractual obligations and fiduciary duties, to ensure that our joint ventures do not agree to restrictions on their ability to make distributions to us, but that obligation is subject to significant exceptions. You should read the section called “Description of New Notes—Certain Covenants—Dividend and Other Payment Restrictions Affecting Subsidiaries and Joint Ventures.” Subject to the restriction summarized above, Equistar, LCR and our other joint ventures could enter into agreements that would restrict their ability to pay dividends or make other distributions to us. In addition, under applicable state law, our joint ventures may be limited in amounts that they are permitted to pay as distributions on their equity interests. Any such restriction on distributions by Equistar or LCR could have a material adverse effect on us.

Moreover, a default by a joint venture under any of its debt instruments generally would not, so long as that joint venture is not a “restricted subsidiary” as defined in the indenture, give rise to a default under the indenture governing the new notes, even though the creditors of the defaulting joint venture would have remedies against the joint venture. As a result, you will have no recourse if any of these joint ventures defaults on any of its debt. A default by a joint venture under any of its material debt instruments which results in the acceleration of such debt, or enables the holder to accelerate such debt, would, however, give rise to a default under our credit facility, which if accelerated would cause an event of default under the indenture governing the new notes. A default by any joint venture on its debt could also impose a contractual limit on the joint venture’s ability to make distributions to us.

The new notes are subordinated to debt of our joint ventures and non-guarantor subsidiaries.

None of our joint ventures will guarantee the new notes. Our subsidiaries Lyondell Chemical Nederland, Ltd., ARCO Chemical Technology, Inc. and ARCO Chemical Technology, L.P. are guarantors under the credit facility and of our existing senior secured and senior subordinated notes and will be guarantors of the new notes. None of our other subsidiaries will initially guarantee the new notes. As a result, the new notes are not debt of our joint ventures or subsidiaries, other than Lyondell Chemical Nederland, Ltd., ARCO Chemical Technology, Inc. and ARCO Chemical Technology, L.P., and holders of the debt and other liabilities, including trade payables, of these joint ventures and other subsidiaries will effectively be senior to claims against those entities by you. At March 31, 2003, these other subsidiaries had approximately $255 million of outstanding total liabilities, excluding intercompany liabilities but including $2 million of long-term debt (including current maturities), and these joint ventures had approximately $4.5 billion of outstanding total liabilities, excluding intercompany liabilities but including $2.9 billion of long-term debt (including current maturities). The indenture does not limit the amount of indebtedness that our joint ventures can incur and does not limit the amount of liabilities that do not constitute “Indebtedness” that our non-guarantor subsidiaries can incur.

15

We may not be able to repurchase your new notes upon a change of control.

Upon the occurrence of certain change of control events as described in “Description of New Notes,” you may require us to purchase the notes at 101% of their principal amount, plus accrued interest. We cannot assure you that we will have the financial resources to purchase your new notes, particularly if a change of control event triggers a similar repurchase requirement for, or results in the acceleration of, other debt. Our credit facility provides that certain change of control events will constitute a default under the credit facility and could result in the acceleration of the maturity of all debt under the credit facility. Our outstanding senior secured notes and senior subordinated notes have similar repurchase requirements to those applicable to the new notes. Future debt might contain similar provisions.

You may not be able to fully realize the value of your liens.

The security for your benefit may be released without your consent.    The liens for the benefit of the new notes may be released without your vote or consent, as summarized below:

Ÿ The security documents generally provide for an automatic release of all liens on any asset that is disposed of in compliance with the provisions of the security documents.

Ÿ Any lien can be released if approved by the requisite number of lenders under our credit facility.

Ÿ The collateral agent and Lyondell may amend the provisions of the security documents with the consent of the requisite number of lenders under our credit facility and without your consent.

Ÿ The lenders under our credit facility will have the sole ability to control remedies (including upon sale or liquidation of the collateral after acceleration of the new notes or the debt under the credit facility) with respect to the collateral.

Ÿ The new notes, as well as our other senior secured notes and the Lyondell debentures, will automatically cease to be secured by those liens if and when we terminate our credit facility without replacing it with another secured credit facility or those liens no longer secure our credit facility for other reasons.

As a result, we cannot assure you that the new notes will continue to be secured by a substantial portion of our assets. You will have no recourse if we terminate our credit facility without replacing it with another secured credit facility or if the lenders under our credit facility approve the release of any or all of the collateral, even if that action adversely affects any rating of the new notes.

The collateral may not be valuable enough to satisfy all the obligations secured by the collateral.    We will secure our obligations under the new notes by the pledge of certain of our assets. This pledge is also for the benefit of the lenders under the credit facility and the holders of our other outstanding senior secured notes. The pledge of some of those assets also benefits the holders of the outstanding Lyondell debentures.

The security documents and the indenture provide that we may apply the proceeds of any sale of assets, including collateral (other than sales by the collateral agent after acceleration of the debt under the credit facility), to repay debt under our credit facility prior to repaying amounts owed under the new notes.

The value of the pledged assets in the event of a liquidation will depend upon market and economic conditions, the availability of buyers and similar factors. No independent appraisals of any of the pledged property have been prepared by or on behalf of us in connection with this offering of new notes. Accordingly, we cannot assure you that the proceeds of any sale of the pledged assets following an acceleration to maturity with respect to the new notes would be sufficient to satisfy, or would not be substantially less than, amounts due on the new notes and the other debt secured thereby.

If the proceeds of any sale of the pledged assets were not sufficient to repay all amounts due on any new notes, you (to the extent your new notes were not repaid from the proceeds of the sale of the pledged assets) would have only an unsecured claim against our remaining assets. By their nature, some or all of the pledged assets may be illiquid and may have no readily ascertainable market value. Likewise, we cannot assure you that

16

the pledged assets will be saleable or, if saleable, that there will not be substantial delays in their liquidation. To the extent that liens, rights and easements granted to third parties encumber assets located on property owned by us or constitute subordinate liens on the pledged assets, those third parties have or may exercise rights and remedies with respect to the property subject to such encumbrances (including rights to require marshalling of assets) that could adversely affect the value of the pledged assets located at that site and the ability of the collateral agent to realize or foreclose on the pledged assets at that site.

In addition, the indenture permits us to issue additional secured debt, including debt secured equally and ratably by the same assets pledged to you. This would reduce amounts payable to you from the proceeds of any sale of the collateral.

Bankruptcy laws may limit your ability to realize value from the collateral.    The right of the collateral agent to repossess and dispose of the pledged assets upon the occurrence of an event of default under the indenture is likely to be significantly impaired by applicable bankruptcy law if a bankruptcy case were to be commenced by or against us before the collateral agent repossessed and disposed of the pledged assets. Under Title 11 of the United States Code (the bankruptcy code), a secured creditor is prohibited from repossessing its security from a debtor in a bankruptcy case, or from disposing of security repossessed from such debtor, without bankruptcy court approval. Moreover, the bankruptcy code permits the debtor to continue to retain and to use collateral even though the debtor is in default under the applicable debt instruments, provided that the secured creditor is given “adequate protection.” The meaning of the term “adequate protection” may vary according to circumstances, but it is intended in general to protect the value of the secured creditor’s interest in the collateral and may include cash payments or the granting of additional security, if and at such times as the court in its discretion determines, for any diminution in the value of the collateral as a result of the stay of repossession or disposition or any use of the collateral by the debtor during the pendency of the bankruptcy case. Generally, adequate protection payments, in the form of interest or otherwise, are not required to be paid by a debtor to a secured creditor unless the bankruptcy court determines that the value of the secured creditor’s interest in the collateral is declining during the pendency of the bankruptcy case. In view of the lack of a precise definition of the term “adequate protection” and the broad discretionary powers of a bankruptcy court, it is impossible to predict (1) how long payments under the new notes could be delayed following commencement of a bankruptcy case, (2) whether or when the collateral agent could repossess or dispose of the pledged assets or (3) whether or to what extent holders of the new notes would be compensated for any delay in payment or loss of value of the pledged assets through the requirement of “adequate protection.”

The collateral is subject to casualty risks and no mortgage title insurance has been obtained.    We are obligated under the security documents to at all times cause all the pledged assets to be properly insured and kept insured against loss or damage by fire or other hazards to the extent that such properties are usually insured by corporations operating properties of a similar nature in the same or similar localities. There are, however, some losses, including losses resulting from terrorist acts, that may be either uninsurable or not economically insurable, in whole or in part. As a result, we cannot assure you that the insurance proceeds will compensate us fully for our losses. If there is a total or partial loss of any of the pledged assets, we cannot assure you that the proceeds received by us in respect thereof will be sufficient to satisfy all the secured obligations, including the new notes.

In the event of a total or partial loss to any of the mortgaged facilities, certain items of equipment may not be easily replaced because they are sufficiently large or customized that replacement units generally are not readily available. Accordingly, even though there may be insurance coverage, the large size of some of the equipment and the extended period needed to manufacture replacement units could cause significant delays in replacement.

Additionally, we are not required under the security documents to purchase any title insurance insuring the collateral agent’s lien on the respective mortgaged properties. If a loss occurs arising from a title defect with

17

respect to any mortgaged property, we cannot assure you that we could replace such property with collateral of equal value.

Fraudulent transfer statutes may limit your rights under the guarantees.

Our obligations under the new notes are guaranteed by Lyondell Chemical Nederland, Ltd., ARCO Chemical Technology, Inc. and ARCO Chemical Technology, L.P., three of our subsidiaries. The guarantees may be subject to review under various laws for the protection of creditors. It is possible that the creditors of a guarantor may challenge a guarantee as a fraudulent transfer under relevant federal and state laws, by claiming, for example, that, since the guarantee was incurred for the benefit of Lyondell (and only indirectly, if at all, for the benefit of the guarantor), the obligations of the guarantor were incurred for less than reasonably equivalent value or fair consideration. Under certain circumstances, including a finding that a guarantor was insolvent at the time its guarantee was issued, a court could hold that the obligations of the guarantor under the guarantee may be voided or are subordinate to other obligations of the guarantor or that the amount for which a guarantor is liable under a guarantee may be limited. Different jurisdictions define “insolvency” differently. However, a guarantor generally would be considered insolvent at the time it guaranteed the new notes if (1) the fair market value (or fair saleable value) of its assets is less than the amount required to pay its total existing debts and liabilities (including the probable liability on contingent liabilities) as they become absolute or matured or (2) the guarantor were incurring debts beyond its ability to pay as such debts mature. We cannot assure you as to what standard a court would apply in order to determine whether a guarantor was “insolvent” as of the date the new notes were guaranteed, and we cannot assure you that, regardless of the method of valuation, a court would not determine that a guarantor were insolvent on that date. Nor can we assure you that a court would not determine, regardless of whether the guarantor were insolvent on the date the guarantees were issued, that the guarantees constituted fraudulent transfers on another ground.

In an attempt to limit the applicability of fraudulent transfer laws, the indenture limits the amount of the guarantees of Lyondell Chemical Nederland, Ltd., ARCO Chemical Technology, Inc. and ARCO Chemical Technology, L.P. to the amount that will result in the guarantees’ not constituting fraudulent transfers or improper corporate distributions, but we cannot be certain which standard a court would apply in making a determination regarding the maximum liability of a guarantor.

The debt ratings of Lyondell and Equistar are subject to negative outlook and may be lowered, which could increase their borrowing costs and reduce their access to capital.

In January 2003, Standard & Poor’s (“S&P”) rating service placed Lyondell’s debt on “CreditWatch” with negative implications, while Moody’s Investors Service (“Moody’s”) changed the rating outlook on Lyondell’s debt to negative from stable. Both agencies cited concern over the financial performance of LCR, while Moody’s also cited continuing weak financial performance at Lyondell and Equistar. In February 2003, S&P took Lyondell off “CreditWatch,” following indications that the business disruptions related to reduced crude oil deliveries to LCR from Venezuela would be limited. At that time S&P also affirmed Lyondell’s ratings and changed the rating outlook to negative. In 2002, Equistar’s debt rating was lowered by Moody’s and S&P, and S&P placed its ratings on “Credit Watch” with negative implications. In January 2003, Moody’s changed the rating outlook for Equistar to negative from stable. Lyondell’s and Equistar’s ratings may be further reduced in the future, whether as a result of adverse developments affecting their business or events beyond their control. A downgrade in Lyondell’s debt rating could affect Lyondell’s borrowing costs and its ability to refinance debt in the future. If Lyondell does not maintain its current Moody’s debt rating, or the current S&P rating is lowered two levels, Lyondell’s receivable sales agreement (which currently permits the sale of up to $85 million of domestic accounts receivable) may be terminated. The lowering of Equistar’s debt rating could affect its borrowing costs and its ability to refinance debt in the future, and could result in termination of its $100 million receivables sales agreement and a railcar lease.

18

There is no trading market for the new notes and there may never be one.

The new notes will be new securities for which currently there is no established trading market. We cannot assure you that a trading market will develop for the new notes. Even if a market for the new notes does develop, we cannot assure you that there will be liquidity in that market, or that the new notes might not trade for less than their original value or face amount. If a liquid market for the new notes does not develop, you may be unable to resell the new notes for a long period of time, if at all. This means you may not be able to readily convert the new notes into cash, and the new notes may not be accepted as collateral for a loan.

Even if a market for the new notes develops, trading prices could be higher or lower than the initial offering prices. The prices of the new notes will depend on many factors, including prevailing interest rates, our operating results and the market for similar securities. Declines in the market prices for debt securities generally may also materially and adversely affect the liquidity of the new notes, independent of our financial performance.

Risk Factors Relating to Our Business

The cyclicality of the chemical and refining industries may cause significant fluctuation in our income and cash flow.

The historical operating results of Lyondell and its joint ventures reflect the cyclical and volatile nature of the supply-demand balance in both the chemical and refining industries. These industries historically have experienced alternating periods of inadequate capacity and tight supply, causing prices and profit margins to increase, followed by periods when substantial capacity is added, resulting in oversupply, declining capacity utilization rates and declining prices and profit margins. The cyclicality of these industries results in volatile profits and cash flow over the business cycle.

Currently, there is overcapacity in the chemical industry, as a number of participants in the industry have added capacity, and additional capacity, including our new PO-11 plant in Europe, is expected to start up in the second half of 2003. There can be no assurance that future growth in product demand will be sufficient to utilize this additional, or even current, capacity. Excess industry capacity has depressed and may continue to depress our and/or our joint ventures’ volumes and margins. The global economic and political environment continues to be uncertain, contributing to low industry operating rates, adding to the volatility of raw material and energy costs, and forestalling the industry’s recovery from trough conditions, all of which is placing, and may continue to place, pressure on our and our joint ventures’ results of operations. As a result of excess industry capacity and weak demand for products, as well as rising energy costs and raw materials prices, our operating income has declined and may remain volatile.

We and Equistar sell commodity products in highly competitive markets and face significant price pressure.

We and Equistar sell our products in highly competitive markets. Due to the commodity nature of certain of our and Equistar’s products, competition in the markets is based primarily on price and to a lesser extent on product performance, product quality, product deliverability and customer service. As a result, we and Equistar generally are not able to protect our market position for these products by product differentiation and may not be able to pass on cost increases to our customers. Accordingly, increases in raw material and other costs may not necessarily correlate with changes in prices for these products, either in the direction of the price change or in magnitude. Specifically, timing differences in pricing between raw material prices, which may change daily, and contract product prices, which in many cases are negotiated only monthly or less often, sometimes with an additional lag in effective dates for increases, have had and may continue to have a negative effect on profitability. Significant volatility in raw material cost tends to put pressure on product margins, as sales price increases generally tend to lag behind raw material cost increases. Conversely, when raw material costs decrease, customers tend to demand immediate relief in the form of lower sales prices.

19

Costs of raw materials and energy may result in increased operating expenses and reduced results of operations.

We and our joint ventures purchase large amounts of raw materials and energy for our businesses. The cost of these raw materials and energy, in the aggregate, represents a substantial portion of our and our joint ventures’ operating expenses. The prices of raw materials and energy generally follow price trends of, and vary with market conditions for, crude oil and natural gas, which may be highly volatile and cyclical. For example, the benchmark price of crude oil trended upward from a low of $27.10 per barrel in January 2000 to a high of $34.30 per barrel in November 2000, a 27% increase. Benchmark crude oil prices then trended downward to a low of $19.30 per barrel in December 2001, a 44% decrease from the November 2000 high. During 2002, benchmark crude oil prices trended upward to $29.50 per barrel in December 2002, a 53% increase from the December 2001 low. Benchmark natural gas prices rose from $2.34 per million BTUs in January 2000 to a historical high of $9.84 per million BTUs in January 2001, a 320% increase. Benchmark natural gas prices then trended downward to a low of $1.82 per million BTUs in October 2001, an 81% decrease from the January 2001 spike. During 2002, benchmark natural gas prices resumed an upward trend, increasing to $4.05 per million BTUs in December 2002, a 123% increase from the October 2001 low. Prices also experienced increases and volatility in the first quarter 2003. Results of operations for us and our joint ventures have been and could be in the future significantly affected by increases in these costs. Price increases increase working capital needs for us and our joint ventures, and can therefore also adversely affect liquidity and cash flow for us and our joint ventures.

In addition, higher natural gas prices adversely affect the ability of many domestic chemicals producers to compete internationally since U.S. producers are disproportionately reliant on natural gas and natural gas liquids as an energy source and as a raw material. In addition to the impact that this has had on Equistar’s exports, reduced competitiveness of U.S. producers also has in the past increased the availability of chemicals in North America, as U.S. production that would otherwise have been sold overseas was instead offered for sale domestically, resulting in excess supply and lower prices in North America.

LCR’s crude oil supply agreement with PDVSA Petróleo, S.A. (PDVSA Oil) is important to LCR’s operations because it reduces the volatility of earnings and cash flow. The agreement is currently subject to litigation and subject to the risk of enforcing judgments against non-United States affiliates of a sovereign nation and force majeure risks.

Most of the crude oil used by LCR as a raw material for its refinery is purchased under the crude supply agreement with PDVSA Oil, an affiliate of Petróleos de Venezuela, S.A. (PDVSA), which was entered into in 1993. The crude supply agreement incorporates formula prices to be paid by LCR for the crude oil supplied based on the market value of a slate of refined products deemed to be produced from each particular crude oil or feedstock, less (1) certain deemed refining costs, adjustable for inflation and energy costs, (2) certain actual costs and (3) a deemed margin, which varies according to the grade of crude oil or other feedstock delivered. The actual refining margin earned by LCR may vary from the formula amount depending on, among other things, timing differences in incorporating changes in refined product market values and energy costs into the crude supply agreement’s deemed margin calculations and the efficiency with which LCR conducts its operations. Although LCR believes that the crude supply agreement reduces the volatility of its earnings and cash flows over the long term, the crude supply agreement also limits LCR’s ability to enjoy higher margins during periods when the market price of crude oil is low relative to the then-current market prices for refined products. In addition, if the actual yields, costs or volumes of the LCR refinery differ substantially from those contemplated by the crude supply agreement, the benefits of this agreement to LCR could be substantially diminished and could result in lower earnings and cash flow for LCR. Furthermore, there may be periods during which LCR’s costs for crude oil under the crude supply agreement may be higher than might otherwise be available to LCR from other sources. A disparate increase in the price of heavy crude oil relative to the prices for its products has the tendency to make continued performance of its obligations under the crude supply agreement less attractive to PDVSA Oil.

The crude supply agreement provides that Lyondell controls all of LCR’s decisions and enforcement rights in connection with the crude supply agreement so long as PDVSA has a direct or indirect ownership interest in

20

LCR. However, there are risks associated with enforcing the provisions of contracts with companies such as PDVSA Oil that are non-United States affiliates of a sovereign nation. All of the crude oil supplied by PDVSA Oil under the crude supply agreement is produced in the Republic of Venezuela, which has experienced economic difficulties and attendant social and political changes and unrest in recent years, including a national strike which disrupted crude oil deliveries to LCR. The Republic of Venezuela may continue to experience these difficulties and changes. It is impossible to predict how governmental policies may change under the current or any subsequent Venezuelan government. In addition, there are risks associated with enforcing judgments of United States courts against entities whose assets are located outside of the United States and whose management does not reside in the United States. Although the parties have negotiated alternative arrangements in the event of certain force majeure conditions, including Venezuelan governmental or other actions restricting or otherwise limiting PDVSA Oil’s ability to perform its obligations, any such alternative arrangements may not be as beneficial to LCR as the crude supply agreement. From time to time, Lyondell and PDVSA have had discussions covering both a restructuring of the crude supply agreement and a broader restructuring of the LCR partnership. We are unable to predict whether changes in either arrangement will occur.

If the crude supply agreement is modified or terminated or this source of crude oil is otherwise interrupted, due to production difficulties, political or economic events in Venezuela or other factors, LCR could experience significantly lower earnings and cash flows. Subject to the consent of the other partner and rights of first offer and first refusal, the partners each have a right to transfer their interests in LCR to unaffiliated third parties in certain circumstances. In the event that CITGO were to transfer its interest in LCR to an unaffiliated third party, PDVSA Oil would have an option to terminate the crude supply agreement. Depending on then-current market conditions, any breach or termination of the crude supply agreement, or reduction in supply thereunder, would require LCR to purchase all or a portion of its crude oil in the merchant market, could subject LCR to significant volatility and price fluctuations and could adversely affect LCR and, therefore, Lyondell. There can be no assurance that alternative crude oil supplies with similar margins would be available for purchase by LCR.

Under the crude supply agreement, PDVSA Oil is required to sell, and LCR is required to purchase, 230,000 barrels per day of extra heavy crude oil, which constitutes approximately 86% of the LCR refinery’s refining capacity of 268,000 barrels per day of crude oil. Since April 1998, PDVSA Oil has, from time to time, declared itself in a force majeure situation and subsequently reduced deliveries of crude oil. Such reductions in deliveries were purportedly based on announced OPEC production cuts. PDVSA Oil informed LCR that the Venezuelan government, through the Ministry of Energy and Mines, had instructed that production of certain grades of crude oil be reduced. In certain circumstances, PDVSA Oil made payments under a different provision of the crude supply agreement in partial compensation for such reductions.

In January 2002, PDVSA Oil again declared itself in a force majeure situation and stated that crude oil deliveries could be reduced by up to 20.3% beginning March 1, 2002. Beginning in March 2002, deliveries of crude oil to LCR were reduced to approximately 198,000 barrels per day, reaching a level of 190,000 barrels per day during the second quarter 2002. Crude oil deliveries to LCR under the crude supply agreement increased to the contract level of 230,000 barrels per day during the third quarter 2002, averaging 212,000 barrels per day for the third quarter. Although deliveries increased to contract levels during the third quarter 2002, PDVSA Oil did not revoke its January 2002 force majeure declaration during 2002.

A national strike in Venezuela began in early December 2002 and disrupted deliveries of crude oil to LCR under the crude supply agreement. PDVSA Oil again declared a force majeure and reduced deliveries of crude oil to LCR. In March 2003, PDVSA Oil notified LCR that the force majeure had been lifted with respect to crude supply agreement crude oil.

LCR has consistently contested the validity of PDVSA Oil’s and PDVSA’s reductions in deliveries under the crude supply agreement. The parties have different interpretations of the provisions of the contracts concerning the delivery of crude oil. The contracts do not contain dispute resolution procedures, and the parties have been unable to resolve their commercial dispute. As a result, on February 1, 2002, LCR filed a lawsuit against PDVSA and PDVSA Oil in connection with the force majeure declarations.

21

External factors beyond our and our joint ventures’ control can cause fluctuations in demand for our products and in our prices and margins, which may negatively affect income and cash flow.

External factors beyond our or our joint ventures’ control can cause volatility in the price of raw materials and other operating costs, as well as significant fluctuations in demand for our and our joint ventures’ products, and can magnify the impact of economic cycles on our and our joint ventures’ businesses. Examples of external factors include:

• general economic conditions, which can be affected by various factors, including reduced economic activity in Asia due to the Severe Acute Respiratory Syndrome (SARS) epidemic;

• international events and circumstances;

• competitor actions; and

• governmental regulation in the United States and abroad.

We believe that events in the Middle East have had a particular influence in recent months and may continue to do so until tensions subside. In addition, a number of our products and our joint ventures’ products are highly dependent on durable goods markets, such as the housing and automotive markets, that are themselves particularly cyclical. Many of our and our joint ventures’ products are components of other chemical products that, in turn, are subject to the supply-demand balance of both the chemical and refining industries and general economic conditions. For example, MTBE is used as a blending component in gasoline, and therefore a substantial decline in gasoline prices could result in decreased profitability from MTBE sales. If the global economy does not improve, demand for our and our joint ventures’ products and our and our joint ventures’ income and cash flow would continue to be adversely affected.

We and our joint ventures may reduce production at or idle a facility for an extended period of time or exit a business because of high raw material prices, an oversupply of a particular product and/or a lack of demand for that particular product, which makes production uneconomical. These temporary outages sometimes last for several quarters or, in certain cases, longer and cause us or our joint ventures to incur costs, including the expenses of maintaining and restarting these facilities. It is possible that factors like increases in raw material costs or lower demand in the future will cause us or our joint ventures to further reduce operating rates or idle facilities or exit uncompetitive businesses.

In particular, events and conditions in the Middle East and/or the occurrence or threat of occurrence of future terrorist attacks such as those against the United States on September 11, 2001 could adversely affect the economies of the United States and other developed countries. A lower level of economic activity could result in a decline in demand for our and our joint ventures’ products, which could adversely affect our and our joint ventures’ revenues and margins and limit our and our joint ventures’ future growth prospects. In addition, these risks have and may continue to increase volatility in prices for crude oil and natural gas and could result in increased raw material costs. Further, these risks could cause increased instability in the financial and insurance markets and adversely affect our ability to access capital and to obtain insurance coverages that we consider adequate or are otherwise required by our contracts with third parties.

Our international operations are subject to exchange rate fluctuations, exchange controls, political risks and other risks relating to non-U.S. operations.

International operations and exports are subject to a number of risks, including currency exchange rate fluctuations, trade barriers, exchange controls, national and regional labor strikes, political risks and risks of increases in duties and taxes, as well as changes in laws and policies governing operations of companies in other countries. In addition, earnings of non-U.S. subsidiaries and intercompany payments may be subject to income tax rules of countries other than the United States, which may reduce cash flow available to meet required debt service and other obligations of Lyondell.

22

Developments affecting MTBE, as a result of pending or future legislative initiatives or litigation, may adversely affect Lyondell’s MTBE sales.

In the United States, the Clean Air Act Amendments of 1990 set minimum levels for oxygenates, such as MTBE, in gasoline sold in areas not meeting specified air quality standards. However, the presence of MTBE in some water supplies in California and other states due to gasoline leaking from underground storage tanks and in surface water from recreational water craft has led to public concern about the use of MTBE. Certain U.S. federal and state governmental initiatives have sought either to rescind the oxygen requirement for reformulated gasoline or to restrict or ban the use of MTBE. Lyondell’s North American MTBE sales represented approximately 26% of its total 2002 revenues.

The U.S. House of Representatives and the U.S. Senate each passed versions of an omnibus energy bill during 2001 and 2002, respectively. The Senate version of the energy bill would have resulted in a ban on the use of MTBE. The two energy bills were not reconciled during the conference process and an omnibus energy bill was not passed during 2002. Both the U.S. House of Representatives and the U.S. Senate are pursuing an energy bill during the 2003/2004 legislative cycle. Fuel content, including MTBE use, is a subject of legislative debate. Factors considered in this debate include renewable fuel usage, the impact on gasoline price and supply and the potential for degradation of air and water quality.

At the state level, a number of states have legislated future MTBE bans. Of these, several are mid-West states that use ethanol as the oxygenate of choice. Bans in these states should not have an impact on MTBE demand. However, Connecticut, California and New York have bans of MTBE in place effective October 1, 2003, January 1, 2004, and January 1, 2004, respectively. Lyondell estimates that California represents 34% of the U.S. MTBE industry demand and 20% of the worldwide MTBE industry demand, while Connecticut and New York combined represent 12% of the U.S. MTBE industry demand and 7% of the worldwide MTBE industry demand.

At this time, Lyondell cannot predict the impact that these initiatives will have on MTBE margins or volumes during 2003. However, several major oil companies have announced plans, beginning in 2003, to discontinue the use of MTBE in gasoline produced for California markets. Lyondell estimates that the California market MTBE volumes of these companies currently account for an estimated 23% of U.S. MTBE industry demand and 13% of worldwide MTBE industry demand. Lyondell intends to continue marketing MTBE in the U.S. However, should it become necessary or desirable to significantly reduce MTBE production, Lyondell would need to make capital expenditures to add the flexibility to produce alternative gasoline blending components, such as iso-octane or ethyl tertiary butyl ether (ETBE), at its U.S.-based MTBE plant. The current cost estimates for converting Lyondell’s U.S.-based MTBE plant to iso-octane production range from $65 million to $75 million. The profit contribution for iso-octane is likely to be lower than that historically realized on MTBE. Alternatively, Lyondell is pursuing ETBE viability through legislative efforts. One key hurdle is equal access to the federal subsidy provided for ethanol blended into gasoline for the ethanol component of ETBE. Lyondell’s U.S.-based MTBE plant could be converted to ETBE production with minimal capital expenditures.

During 2002 and prior years, Lyondell sold MTBE pursuant to a take-or-pay MTBE sales contract with a subsidiary of BP p.l.c. Sales pursuant to this contract represented approximately 14% of Lyondell’s 2002 worldwide MTBE sales volumes. The contract provided for formula-based prices, which have been significantly higher than market prices, and expired December 31, 2002. We anticipate that the MTBE production previously sold under the expired MTBE sales contract with BP referenced above will be sold under market-based annual sales contracts and in the spot market, and that the termination of the MTBE contract will adversely affect our margins on MTBE compared to 2002 and prior years.

Operating problems in our business may adversely affect our income and cash flow.

The occurrence of material operating problems at our facilities or any of our joint ventures’ facilities, including, but not limited to, the events described below, may have a material adverse effect on the productivity and profitability of a particular manufacturing facility, or on us as a whole, during and after the period of such

23

operational difficulties. Our income and cash flow are dependent on the continued operation of our various production facilities, our joint ventures’ production facilities and the ability to complete construction projects on schedule.

Although we and our joint ventures take precautions to enhance the safety of operations and minimize the risk of disruptions, our operations and our joint ventures’ operations, along with the operations of other members of the chemical and refining industries, are subject to hazards inherent in chemical manufacturing and refining and the related storage and transportation of raw materials, products and wastes. These hazards include:

• pipeline leaks and ruptures;

• explosions;

• fires;

• severe weather and natural disasters;

• mechanical failure;

• unscheduled downtime;

• labor difficulties;

• transportation interruptions;

• remediation complications;

• chemical spills;

• discharges or releases of toxic or hazardous substances or gases;

• storage tank leaks;

• other environmental risks; and

• potential terrorist acts.

Some of these hazards can cause personal injury and loss of life, severe damage to or destruction of property and equipment and environmental damage, and may result in suspension of operations and the imposition of civil or criminal penalties.

Furthermore, we are also subject to present and future claims with respect to workplace exposure, workers’ compensation and other matters. We maintain property, business interruption and casualty insurance that we believe is in accordance with customary industry practices, but we are not fully insured against all potential hazards incident to our business, including losses resulting from war risks or terrorist acts. As a result of market conditions, premiums and deductibles for certain insurance policies can increase substantially, and in some instances, certain insurance may become unavailable or available only for reduced amounts of coverage. If we were to incur a significant liability for which we were not fully insured, it could have a material adverse effect on our financial position.

Shared control of joint ventures involving Lyondell may delay decisions or actions.

A substantial portion of our operations is conducted through joint ventures. We share control of these joint ventures with third parties.

Our forecasts and plans with respect to these joint ventures assume that our joint venture partners will observe their obligations with respect to the joint ventures. In the event that any of our joint venture partners do not observe their obligations, it is possible that the affected joint venture would not be able to operate in accordance with its business plans or that we would be required to increase our level of commitment in order to give effect to such plans.

24

As with any such joint venture arrangements, differences in views among the joint venture participants may result in delayed decisions or in failures to agree on major matters, potentially adversely affecting the business and operations of the joint ventures and in turn our business and operations.

Lyondell or any of the other owners of the joint ventures may transfer control of their joint venture interests or engage in mergers or other business combination transactions with a third party or the other owner that could result in a change of control of Lyondell or the joint venture or the other owner. In many instances, such a transfer would be subject to an obligation to first offer the other owner an opportunity to purchase the interest. Lyondell and the other joint venture owners have discussed, and from time to time may continue to discuss, in connection with their ordinary course dialog regarding the joint ventures or otherwise, transactions that could result in a transfer or modification, directly or indirectly, of their ownership in a joint venture. For example, in August 2002, Lyondell purchased Occidental Petroleum Corporation’s 29.5% ownership interest in Equistar.

We cannot be certain that any of the joint venture owners will not sell, transfer or otherwise modify their ownership interest in a joint venture, whether in a transaction involving third parties and/or the other owner. Upon a transfer of an interest in Equistar, the partnership agreement and key agreements between Equistar and its owners would remain in place and may not be modified without the consent of all of the owners, but the transfer could affect the governance of Equistar, particularly because Equistar’s partnership agreement requires unanimous approval for some decisions.

Equistar’s credit facility provides that an event of default occurs if Lyondell and/or Millennium cease to collectively hold at least a 50% interest in Equistar. LCR’s credit facility provides that an event of default occurs if Lyondell and CITGO cease to individually or collectively hold at least a 35% interest in LCR. In addition, LCR’s credit facility provides that an event of default occurs if (1) Lyondell transfers its interest as a member of LCR to a person other than an affiliate or (2) neither CITGO nor any of its affiliates is a member of LCR.

Distributions of cash from our joint ventures may be restricted.

We conduct a substantial amount of our operations through our joint ventures. Our ability to meet our debt service and other obligations is dependent, in part, upon the receipt of distributions from our joint ventures. LCR’s credit facility prohibits the payment of distributions to us during an event of default thereunder. Subject to the provisions of the applicable debt agreements, future borrowings by our joint ventures may contain other restrictions or prohibitions on the payment of distributions by such joint ventures to us. Dependent upon applicable state law, our joint ventures may be limited in amounts that they are permitted to pay as distributions on their equity interests. Our joint ventures’ ability to distribute cash to us is also dependent upon their economic performance, which is dependent on a variety of factors, including factors described elsewhere in the “Risk Factors” section of this prospectus. For example, Equistar made no distributions to its owners in the first quarter of 2003, or in 2002 or 2001 as a result of continuing adverse conditions in the industry and its debt service obligations. Furthermore, LCR deferred a portion of fourth quarter 2002 cash distributions as a result of uncertainties in cash flow stemming from the national strike in Venezuela. However, Lyondell received $88 million of cash distributions from LCR in the first quarter of 2003.

Lyondell and its joint ventures pursue acquisitions, dispositions and joint ventures.

Lyondell and its joint ventures seek opportunities to maximize efficiency or value through various transactions. These transactions may include various business combinations, purchases or sales of assets or contractual arrangements or joint ventures that are intended to result in the realization of synergies, the creation of efficiencies or the generation of cash to reduce debt. To the extent permitted under Lyondell’s and its joint ventures’ credit facilities and other debt agreements, some of these transactions may be financed with additional borrowings by Lyondell or its joint ventures or by the issuance of equity securities. Although these transactions are expected to yield longer-term benefits if the expected efficiencies and synergies of the transactions are realized, they could adversely affect the results of operations of Lyondell or its joint ventures in the short term

25

because of the costs associated with such transactions. Other transactions may advance future cash flows from some of our businesses, thereby yielding increased short-term liquidity, but consequently resulting in lower cash flows from these operations over the longer term.

Our operations and assets are subject to extensive environmental, health and safety laws and regulations.

We cannot predict with certainty the extent of our, our subsidiaries’ or our joint ventures’ future liabilities and costs under environmental, health and safety laws and regulations and we cannot assure you that they will not be material. In addition, we, our subsidiaries or our joint ventures may face liability for alleged personal injury or property damage due to exposure to chemicals or other hazardous substances at our facilities or chemicals that we otherwise manufacture, handle or own. Although these types of claims have not historically had a material impact on our, our subsidiaries’ or our joint ventures’ operations, a significant increase in the success of these types of claims could materially adversely affect our, our subsidiaries’ or our joint ventures’ business, financial condition, operating results or cash flow.

The production facilities of Lyondell, Equistar and LCR are generally required to have permits and licenses regulating air emissions, discharges to land or water and storage, treatment and disposal of hazardous wastes. Companies such as Lyondell and its joint ventures that are permitted to treat, store or dispose of hazardous waste and maintain underground storage tanks pursuant to the Resource Conservation and Recovery Act (RCRA) also are required to meet certain financial responsibility requirements. We believe that we and our joint ventures have all permits and licenses generally necessary to conduct our business or, where necessary, are applying for additional, amended or modified permits and that we and our joint ventures meet applicable financial responsibility requirements.

Our subsidiaries and joint ventures (together with the industries in which they operate) are subject to extensive national, state, local and foreign environmental laws and regulations concerning emissions to the air, discharges onto land or waters and the generation, handling, storage, transportation, treatment and disposal of waste materials. Many of these laws and regulations provide for substantial fines and potential criminal sanctions for violations. Some of these laws and regulations are subject to varying and conflicting interpretations. In addition, we cannot accurately predict future developments, such as increasingly strict environmental laws, and inspection and enforcement policies, as well as higher compliance costs therefrom, which might affect the handling, manufacture, use, emission or disposal of products, other materials or hazardous and non-hazardous waste. Some risk of environmental costs and liabilities is inherent in particular operations and products of us, and our joint ventures, as it is with other companies engaged in similar businesses, and there is no assurance that material costs and liabilities will not be incurred. In general, however, with respect to the capital expenditures and risks described above, we do not expect that we or our joint ventures will be affected differently than the rest of the chemicals and refining industry where our facilities or our joint ventures’ facilities are located.

Environmental laws may have a significant effect on the nature and scope of cleanup of contamination at current and former operating facilities, the costs of transportation and storage of raw materials and finished products and the costs of the storage and disposal of wastewater. Also, U.S. “Superfund” statutes may impose joint and several liability for the costs of remedial investigations and actions on the entities that generated waste, arranged for disposal of the wastes, transported to or selected the disposal sites and the past and present owners and operators of such sites. All such responsible parties (or any one of them, including us) may be required to bear all of such costs regardless of fault, legality of the original disposal or ownership of the disposal site.

The eight-county Houston/Galveston region has been designated a severe non-attainment area for ozone by the EPA. As a result, in December 2000, the Texas Natural Resource Conservation Commission, now known as the Texas Commission on Environmental Quality (TCEQ), submitted a plan to the EPA to reach and demonstrate compliance with the ozone standard by November 2007. Ozone is a product of the reaction between volatile organic compounds and nitrogen oxides (NOx) in the presence of sunlight, and is a principal component of smog. Emission reduction controls for NOx must be installed at the LCR refinery and each of Lyondell’s two facilities

26

and Equistar’s six facilities in the Houston/Galveston region during the next several years. Recently adopted revisions by the regulatory agencies changed the required NOx reduction levels from 90% to 80%. Compliance with the previously proposed 90% reduction standards would have resulted in increased aggregate capital investment, estimated at between $400 million and $500 million for Lyondell, Equistar and LCR before the 2007 deadline. Under the revised 80% standard, Lyondell estimates that the incremental capital expenditures would decrease to between $250 million and $300 million for Lyondell, Equistar and LCR. However, the savings from this revision could be offset by the costs of stricter proposed controls over highly reactive, volatile organic compounds, or HRVOCs. Additionally, the TCEQ plans to make a final review of these rules (which are also subject to federal approval), with final rule revisions to be adopted by May 2004. The timing and amount of NOx and HRVOC expenditures are subject to regulatory and other uncertainties, as well as obtaining necessary permits and approvals. Lyondell, Equistar and LCR are still assessing the impact of these revisions and there can be no guarantee as to the ultimate cost of implementing any final plan developed to ensure ozone attainment by the 2007 deadline.

The Clean Air Act specified certain emissions standards for vehicles and, in 1998, the EPA concluded that additional controls on gasoline and diesel fuel were necessary. New standards for gasoline were finalized in 1999 and will require refiners to produce a low sulfur gasoline by 2004, with final compliance by 2006. A new “on-road” diesel standard was adopted in January 2001 and will require refiners to produce ultra low sulfur diesel by June 2006, with some allowance for a conditional phase-in period that could extend final compliance until 2009. These standards will result in increased capital investment for LCR. In the first quarter 2003, LCR developed an alternative approach to complying with the low sulfur gasoline standard that will lead to a reduction in overall estimated capital expenditures for the project. As a result, LCR recognized impairment of value of $25 million of costs incurred to date for the project. The revised estimated incremental spending, excluding the $25 million charge, totaled between $100 million to $180 million for the new gasoline standards and remained between $250 million to $300 million for the new diesel standard, of which approximately $14 million, excluding the $25 million charge, has been incurred by LCR as of March 31, 2003. Lyondell’s 58.75% share of these incremental capital expenditures would be between $200 million and $280 million. In addition, these standards could result in higher operating costs for LCR. Equistar’s business may also be impacted if these standards increase the cost for processing fuel components.

27

FORWARD-LOOKING STATEMENTS

This prospectus, including the information we incorporate by reference, includes forward-looking statements. You can identify our forward-looking statements by words such as “estimate,” “believe,” “expect,” “anticipate,” “plan,” “budget,” or other words that convey the uncertainty of future events or outcomes. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements contained in this prospectus and the documents we have incorporated by reference.

The forward-looking statements are not guarantees of future performance, and we caution you not to rely unduly on them. We have based many of these forward-looking statements on expectations and assumptions about future events that may prove to be inaccurate. While our management considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond our control. These risks, contingencies and uncertainties relate to, among other matters, the following:

• the cyclical nature of the chemical and refining industries;

• the availability, cost and volatility of raw materials and utilities;

• uncertainties associated with the United States and worldwide economies, including those due to the war in Iraq and political tensions in the Middle East and elsewhere;

• current and potential governmental regulatory actions in the United States and regulatory actions and political unrest in other countries;

• industry production capacity and operating rates;

• the supply/demand balance for our products and our joint ventures’ products;

• competitive products and pricing pressures;

• access to capital markets;

• potential terrorist acts;

• operating interruptions (including leaks, explosions, fires, weather-related incidents, mechanical failure, unscheduled downtime, labor difficulties, transportation interruptions, spills and releases, and other environmental risks);

• technological developments; and

• our ability to implement our business strategies, including cost reductions.

We have discussed some of these factors in more detail in the “Risk Factors” section of this prospectus and in our filings with the SEC, including those filings incorporated by reference into this prospectus. These factors are not necessarily all the important factors that could affect us or our joint ventures. We advise you that you should (1) be aware that important factors we do not refer to above could affect the accuracy of our forward-looking statements and (2) use caution and common sense when considering our forward-looking statements. We do not intend to update these statements unless the securities laws require us to do so.

28

USE OF PROCEEDS

The exchange offer is intended to satisfy our obligations under the registration rights agreement that we entered into in connection with the private offering of the outstanding notes. We will not receive any cash proceeds from the issuance of the new notes. In consideration for issuing the new notes, we will receive in exchange a like principal amount of the outstanding notes. The outstanding notes surrendered in exchange for the new notes will be retired and canceled, and cannot be reissued. Accordingly, issuance of the new notes will not result in any change in our capitalization.

We used the net proceeds from the sale of the outstanding notes to (i) prepay in full the approximately $103 million of term loans outstanding under our credit facility and pay a 1% prepayment premium and (ii) repay with the remaining proceeds, the revolving credit loans we borrowed to fund the purchase, pursuant to a purchase option, of our new butanediol facility in The Netherlands that we leased pursuant to an operating lease.

29

CAPITALIZATION

The following table sets forth our capitalization as of March 31, 2003 on an historical basis.

	As of March 31, 2003
Cash and cash equivalents	$	331
Debt, including current maturities of long-term debt (a):
Secured debt:(b)
Credit facility (c)	$	103
Senior Secured Notes due 2007		1,900
Senior Secured Notes due 2008 (d)		723
Senior Secured Notes due 2012		276
Debentures due 2005-2020		424
Senior Subordinated Notes due 2009		500
Other debt		1
Total debt, including current maturities of long-term debt		3,927
Minority interest		145
Stockholders’ equity		1,094
Total capitalization	$	5,166

(a) Does not include approximately $2.9 billion in joint venture debt, which includes $300 million of Equistar debt for which Lyondell is a guarantor and $30 million for which Lyondell is a co-obligor (although as between Lyondell and Equistar with respect to this debt, Equistar is primarily liable).

(b) Does not include the outstanding notes and the application of proceeds therefrom. The proceeds from the sale of these notes were used to (1) prepay in full the $103 million of term loans outstanding under our credit facility and pay a 1% prepayment premium, if applicable, and (2) to fund the $218 million required to exercise the purchase option under the facility lease for our butanediol facility in The Netherlands.

(c) Total committed revolver capacity is $350 million, none of which was borrowed as of March 31, 2003. The revolver availability is reduced to the extent of certain outstanding letters of credit provided under the credit facility, which totaled $50 million as of March 31, 2003.

(d) Of the $723 million aggregate principal amount of 9 ¹/2% senior secured notes due 2008, $337 million of such notes were issued net of original issue discount of $7 million. As a result of this discount, the effective interest rate on those notes is approximately 10%.

30

THE EXCHANGE OFFER

Participation in the exchange offer is voluntary, and you should carefully consider whether to accept. You are urged to consult your financial and tax advisors in making your own decision on what action to take.

We are offering to issue new registered 10 ¹/2% senior secured notes due 2013 in exchange for a like principal amount of our outstanding unregistered 10 ¹/2% senior secured notes due 2013 issued on May 20, 2003. We may extend, delay or terminate the exchange offer. Holders of outstanding notes who wish to tender will need to complete and timely submit the exchange offer documentation related to the exchange.

Purpose and Effect of the Exchange Offer

We entered into a registration rights agreement with the initial purchasers of the outstanding notes in which we agreed to file a registration statement relating to an offer to exchange the outstanding notes for new notes within 100 days after the closing of the offering and to use our reasonable best efforts to have it declared effective within 210 days after issuing the outstanding notes. We are offering the new notes under this prospectus to satisfy those obligations under the registration rights agreement.

If the exchange offer is not permitted by applicable law or SEC policy or in general if any holder of the outstanding notes notifies us before the 20th business day following the consummation of the exchange offer that:

• it is prohibited by law or SEC policy from participating in the exchange offer;

• it cannot resell the new notes to the public without delivering a prospectus and this prospectus is not appropriate or available for those resales by it; or

• it is a broker-dealer that holds notes acquired directly from us or any of our affiliates,

we will file with the SEC a shelf registration statement to cover resales of outstanding notes.

If we fail to comply with the applicable deadlines for filing the registration statements or completion of the exchange offer, we may be required to pay liquidated damages to holders of the outstanding notes. Please read the section captioned “Description of New Notes—Registration Rights; Liquidated Damages” for more details regarding the registration rights agreement.

To receive transferable new notes in exchange for your outstanding notes in the exchange offer, you, as holder of the tendered outstanding notes, will be required to make the following representations to us:

• you are not an “affiliate,” as defined in Rule 405 of the Securities Act, of us or a broker-dealer tendering outstanding notes acquired directly from us for your own account;

• if you are not a broker-dealer or are a broker-dealer but will not receive new notes for your own account in exchange for outstanding notes, you are not engaged in and do not intend to participate in a distribution of the new notes;

• you have no arrangement or understanding with any person to participate in a distribution of the new notes or the outstanding notes within the meaning of the Securities Act;

• you are acquiring the new notes in the ordinary course of your business; and

• if you are a broker-dealer that will receive new notes for your own account in exchange for outstanding notes, you represent that the outstanding notes to be exchanged for new notes were acquired by you as a result of market-making activities or other trading activities and you acknowledge that you will deliver a prospectus meeting the requirements of the Securities Act in connection with the resale of any new notes. It is understood that you are not admitting that you are an “underwriter” within the meaning of the Securities Act by acknowledging that you will deliver, and by delivery of, a prospectus.

31

Based on interpretations of the SEC staff in “no action letters” issued to third parties, we believe that each new note issued to a holder tendering in the exchange offer may be offered for resale, resold and otherwise transferred by you, the holder of that new note, without compliance with the registration and prospectus delivery provisions of the Securities Act if:

• you are not our “affiliate” within the meaning of Rule 405 under the Securities Act;

• the new note is acquired in the ordinary course of your business; and

• you do not intend to participate in the distribution of new notes.

However, the SEC has not considered the legality of our exchange offer in the context of a “no action letter,” and there can be no assurance that the staff of the SEC would make a similar determination with respect to our exchange offer as in other circumstances.

If you tender outstanding notes in the exchange offer with the intention of participating in any manner in a distribution of the new notes, you:

• cannot rely on these interpretations by the SEC staff; and

• must comply with the registration and prospectus delivery requirements of the Securities Act in connection with a secondary resale transaction.

Unless an exemption from registration is otherwise available, any holder intending to distribute new notes should be covered by an effective registration statement under the Securities Act containing the holder’s information required by Item 507 or Item 508, as applicable, of Regulation S-K under the Securities Act. This prospectus may be used for an offer to resell, resale or other transfer of new notes only as specifically described in this prospectus. We have agreed to make this prospectus available in connection with resales of the new notes for up to 180 days from the consummation of the exchange offer. Failure to comply with the registration and prospectus delivery requirements by a holder subject to these requirements could result in that holder incurring liability for which it is not indemnified by us. Only broker-dealers that acquired the outstanding notes as a result of market-making activities or other trading activities may participate in the exchange offer. Please read the section captioned “Plan of Distribution” for more details regarding the transfer of new notes.

Terms of the Exchange Offer

Upon the terms and subject to the conditions described in this prospectus and in the accompanying letter of transmittal, we will accept for exchange any outstanding notes properly tendered and not withdrawn before the expiration date. We will issue $1,000 principal amount of new notes in exchange for each $1,000 principal amount of outstanding notes surrendered under the exchange offer. Outstanding notes may be tendered only in integral multiples of $1,000. The exchange offer is not conditioned upon any minimum aggregate principal amount of outstanding notes being tendered for exchange.

As of the date of this prospectus, $325 million aggregate principal amount of the outstanding notes are not yet registered. This prospectus and the letter of transmittal accompanying this prospectus are being sent to all registered holders of outstanding notes. There will be no fixed record date for determining registered holders of outstanding notes entitled to participate in the exchange offer.

We intend to conduct the exchange offer according to the provisions of the registration rights agreement, the applicable requirements of the Securities Act and the Securities Exchange Act of 1934, and the rules and regulations of the SEC. Outstanding notes that are not tendered for exchange in the exchange offer will remain outstanding and continue to accrue interest and will be entitled to the rights and benefits the holders have under the indenture. However, these outstanding notes will not be freely tradable. Other than in connection with the

32

exchange offer and as specified in the registration rights agreement, we are not obligated to, nor do we currently anticipate that we will, register the outstanding notes under the Securities Act. See “—Consequences of Failure to Exchange” below.

We will be deemed to have accepted for exchange properly tendered outstanding notes when we have given oral or written notice of the acceptance to the exchange agent and complied with the applicable provisions of the registration rights agreement.

Holders tendering outstanding notes in the exchange offer will not be required to pay brokerage commissions or fees or, subject to the instructions in the letter of transmittal, transfer taxes with respect to the exchange of outstanding notes. We will pay all charges and expenses, other than certain applicable taxes described below, in connection with the exchange offer. It is important for holders to read the section labeled “—Fees and Expenses” for more details regarding fees and expenses incurred in the exchange offer.

We will return any outstanding notes that we do not accept for exchange for any reason without expense to the tendering holder as promptly as practicable after the expiration or termination of the exchange offer.

Expiration Date

The exchange offer will expire at 5:00 p.m., New York City time on                 , 2003 unless, in our sole discretion, we extend the exchange offer.

Extensions, Delay in Acceptance, Termination or Amendment

We reserve the right, at any time or at various times, to extend the period of time during which the exchange offer is open. During any extensions, all outstanding notes previously tendered will remain subject to the exchange offer, and we may accept them for exchange. We do not currently intend to extend the expiration date.

To extend the exchange offer, we will notify the exchange agent orally or in writing of any extension. We will also make a public announcement of the extension no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled expiration date. Without limiting the manner in which we may choose to make public announcements of any delay in acceptance, extension, termination or amendment of the exchange offer, we will have no obligation to publish, advertise or otherwise communicate any public announcement, other than by making a timely release to the Dow Jones News Service.

If any of the conditions described below under “—Conditions to the Exchange Offer” have not been satisfied, we reserve the right, in our sole discretion:

• to delay accepting for exchange any outstanding notes;

• to extend the exchange offer; or

• to terminate the exchange offer

by giving oral or written notice of a delay, extension or termination to the exchange agent. Subject to the terms of the registration rights agreement, we also reserve the right to amend the terms of the exchange offer in any manner.

Any delay in acceptance, extension, termination or amendment will be followed as promptly as practicable by oral or written notice to the registered holders of the outstanding notes. If we amend the exchange offer in a manner we determine to constitute a material change, we will promptly disclose the amendment by means of a prospectus supplement. The supplement will be distributed to the registered holders of the outstanding notes. Depending upon the significance of the amendment and the manner of disclosure to the registered holders, we may extend the exchange offer if the exchange offer would otherwise expire during that period.

33

Conditions to the Exchange Offer

If in our reasonable judgment the exchange offer, or the making of any exchange by a holder of outstanding notes, would violate applicable law or any applicable interpretation of the staff of the SEC:

• we will not be required to accept for exchange, or exchange any new notes for, any outstanding notes; and

• we may terminate the exchange offer as provided in this prospectus before accepting any outstanding notes for exchange.

In addition, we will not be obligated to accept for exchange the outstanding notes of any holder that has not made to us the following representations:

• the representations described under “—Purpose and Effect of the Exchange Offer,” “—Procedures for Tendering” and “Plan of Distribution”; and

• other representations as may be reasonably necessary under applicable SEC rules, regulations or interpretations to make available to us an appropriate form for registration of the new notes under the Securities Act.

We reserve the right to amend or terminate the exchange offer, and to reject for exchange any outstanding notes not previously accepted for exchange, upon the occurrence of any of the conditions to the exchange offer specified above. We will give oral or written notice of any extension, amendment, nonacceptance or termination to the holders of the outstanding notes as promptly as practicable. These conditions are for our sole benefit, and we may assert them or waive them in whole or in part at any time or at various times in our sole discretion. If we fail at any time to exercise any of these rights, this failure will not mean that we have waived our rights. Each right will be deemed an ongoing right that we may assert at any time or at various times.

In addition, we will not accept for exchange any outstanding notes tendered and will not issue new notes in exchange for any outstanding notes, if at that time any stop order has been threatened or is in effect with respect to the registration statement of which this prospectus constitutes a part or the qualification of the indenture under the Trust Indenture Act of 1939.

Procedures for Tendering

How to Tender Generally

Only a registered holder of outstanding notes may tender its outstanding notes in the exchange offer. If you are a beneficial owner of outstanding notes and wish to have the registered owner tender on your behalf, please see “—How to Tender if You Are a Beneficial Owner” below. To tender in the exchange offer, you must either comply with the procedures for manual tender or comply with the automated tender offer program procedures of DTC described below under “—Tendering Through DTC’s Automated Tender Offer Program.”

To complete a manual tender, you must:

• complete, sign and date the letter of transmittal, or a facsimile of the letter of transmittal;

• have the signature on the letter of transmittal guaranteed if the letter of transmittal so requires;

• mail or deliver the letter of transmittal or a facsimile of the letter of transmittal to the exchange agent before the expiration date; and

• deliver, and the exchange agent must receive, before the expiration date:

- the outstanding notes along with the letter of transmittal; or

- a timely confirmation of book-entry transfer of the outstanding notes into the exchange agent’s account at DTC according to the procedure for book-entry transfer described below under “—Book-Entry Transfer.”

34

If you wish to tender your outstanding notes and cannot comply with the requirement to deliver the letter of transmittal and your outstanding notes or use the automated tender offer program of DTC before the expiration date, you must tender your outstanding notes according to the guaranteed delivery procedures described below.

For a tender to be effective, the exchange agent must receive any physical delivery of the letter of transmittal and other required documents at its address provided above under “Prospectus Summary—The Exchange Agent” before the expiration date. Any tender by a holder that is not withdrawn before the expiration date will constitute a legally binding agreement between the holder and us according to the terms and subject to the conditions described in this prospectus and in the letter of transmittal.

The method of delivery of outstanding notes, the letter of transmittal and all other required documents to the exchange agent is at your election and risk. Rather than mail these items, we recommend that you use an overnight or hand-delivery service. In all cases, you should allow sufficient time to ensure delivery to the exchange agent before the expiration date. You should not send the letter of transmittal or outstanding notes to Lyondell. You may request your broker, dealer, commercial bank, trust company or other nominee to perform the deliveries on your behalf.

Book-Entry Transfer

The exchange agent will make a request to establish an account with respect to the outstanding notes at DTC for purposes of the exchange offer promptly after the date of this prospectus. Any financial institution participating in DTC’s system may make book-entry delivery of outstanding notes by causing DTC to transfer the outstanding notes into the exchange agent’s account at DTC according to DTC’s procedures for transfer. Holders of outstanding notes who are unable to deliver confirmation of the book-entry tender of their outstanding notes into the exchange agent’s account at DTC or all other documents required by the letter of transmittal to the exchange agent on or before the expiration date must tender their outstanding notes according to the guaranteed delivery procedures described below.

Tendering Through DTC’s Automated Tender Offer Program

The exchange agent and DTC have confirmed that any financial institution that is a participant in DTC’s system may use DTC’s automated tender offer program to tender its outstanding notes. Participants in the program may transmit their acceptance of the exchange offer electronically instead of physically completing and signing the letter of transmittal and delivering it to the exchange agent. Tendering through the automated tender offer program causes DTC to transfer the outstanding notes to the exchange agent according to its procedures for transfer. DTC will then send an agent’s message to the exchange agent.

The term “agent’s message” means a message transmitted by DTC, received by the exchange agent and forming part of the book-entry confirmation, stating that:

• DTC has received an express acknowledgment from a participant in its automated tender offer program that is tendering outstanding notes that are the subject of book-entry confirmation;

• the participant has received and agrees to be bound by the terms of the letter of transmittal or, in the case of an agent’s message relating to guaranteed delivery, that the participant has received and agrees to be bound by the applicable notice of guaranteed delivery; and

• the agreement may be enforced against the participant.

How to Tender if You Are a Beneficial Owner

If you beneficially own outstanding notes that are registered in the name of a broker, dealer, commercial bank, trust company or other nominee and you wish to tender those notes, you should contact the registered holder promptly and instruct it to tender on your behalf. If you are a beneficial owner and wish to tender on your

35

own behalf, you must, before completing and executing the letter of transmittal and delivering your outstanding notes, either:

• make appropriate arrangements to register ownership of the outstanding notes in your name; or

• obtain a properly completed bond power from the registered holder of outstanding notes.

The transfer of registered ownership may take considerable time and may not be completed before the expiration date.

Signatures and Signature Guarantees

You must have signatures on a letter of transmittal or a notice of withdrawal described below guaranteed by:

• a member firm of a registered national securities exchange;

• a member of the National Association of Securities Dealers, Inc.;

• a commercial bank or trust company having an office or correspondent in the United States; or

• an “eligible guarantor institution” within the meaning of Rule 17Ad-15 under the Exchange Act.

The above must be a member of one of the recognized signature guarantee programs identified in the letter of transmittal, unless the outstanding notes are tendered:

• by a registered holder who has not completed the box entitled “Special Issuance Instructions” or “Special Delivery Instructions” on the letter of transmittal and the new notes are being issued directly to the registered holder of the outstanding notes tendered in the exchange for those new notes; or

• for the account of a member firm of a registered national securities exchange or of the National Association of Securities Dealers, Inc., a commercial bank or trust company having an office or correspondent in the United States, or an eligible guarantor institution.

When Endorsements or Bond Powers are Needed

If the letter of transmittal is signed by a person other than the registered holder of the outstanding notes, the outstanding notes to be tendered must be endorsed or accompanied by a properly completed bond power. The bond power must be signed by the registered holder as the registered holder’s name appears on the outstanding notes and a member firm of a registered national securities exchange or of the National Association of Securities Dealers, Inc., a commercial bank or trust company having an office or correspondent in the United States, or an eligible guarantor institution must guarantee the signature on the bond power.

If the letter of transmittal or any outstanding notes or bond powers are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, those persons should so indicate when signing. They should also submit evidence of their authority to deliver the letter of transmittal satisfactory to us unless we waive this requirement.

Determinations Under the Exchange Offer

We will determine in our sole discretion all questions as to the validity, form, eligibility, time of receipt, acceptance of tendered outstanding notes and withdrawal of tendered outstanding notes. Our determination will be final and binding. We reserve the absolute right to reject any outstanding notes not properly tendered or any outstanding notes our acceptance of which would, in the opinion of our counsel, be unlawful. We also reserve the right to waive any defects, irregularities or conditions of tender as to particular outstanding notes. Our interpretation of the terms and conditions of the exchange offer, including the instructions in the letter of transmittal, will be final and binding on all parties. Unless waived, any defects or irregularities in connection

36

with tenders of outstanding notes must be cured within the time we shall determine. Neither we, the exchange agent nor any other person will be under any duty to give notification of defects or irregularities with respect to tenders of outstanding notes, and none of the aforementioned will incur liability for failure to give notification. Tenders of outstanding notes will not be deemed made until any defects or irregularities have been cured or waived. Any outstanding notes received by the exchange agent that are not properly tendered and as to which the defects or irregularities have not been cured or waived will be returned to the tendering holder, unless otherwise provided in the letter of transmittal, as soon as practicable following the expiration date.

When We Will Issue New Notes

In all cases, we will issue new notes for outstanding notes that we have accepted for exchange under the exchange offer only after the exchange agent timely receives:

• delivery of the outstanding notes or a book-entry confirmation of the tender of the outstanding notes into the exchange agent’s account at DTC; and

• a properly completed and duly executed letter of transmittal and all other required documents or a properly transmitted agent’s message.

Return of Outstanding Notes Not Accepted or Exchanged

If we do not accept any tendered outstanding notes for exchange for any reason described in the terms and conditions of the exchange offer or if outstanding notes are submitted for a greater principal amount than the holder desires to exchange, the unaccepted or nonexchanged outstanding notes will be returned without expense to their tendering holder. In the case of outstanding notes tendered by book-entry transfer into the exchange agent’s account at DTC according to the procedures described below, the outstanding notes not accepted for exchange will be credited to an account maintained with DTC. These actions will occur as promptly as practicable after the expiration or termination of the exchange offer.

Your Representations to Us

By signing or agreeing to be bound by the letter of transmittal, you will represent that, among other things:

• you are not an “affiliate,” as defined in Rule 405 of the Securities Act, of us or a broker-dealer tendering outstanding notes acquired directly from us for your own account;

• if you are not a broker-dealer or are a broker-dealer but will not receive new notes for your own account in exchange for outstanding notes, you are not engaged in and do not intend to participate in a distribution of the new notes;

• you have no arrangement or understanding with any person to participate in a distribution of the outstanding notes or the new notes within the meaning of the Securities Act;

• you are acquiring the new notes in the ordinary course of your business; and

• if you are a broker-dealer that will receive new notes for your own account in exchange for outstanding notes, you represent that the outstanding notes to be exchanged for new notes were acquired by you as a result of market-making activities or other trading activities and you acknowledge that you will deliver a prospectus meeting the requirements of the Securities Act in connection with the resale of any new notes. It is understood that you are not admitting that you are an “underwriter” within the meaning of the Securities Act by acknowledging that you will deliver, and by delivery of, a prospectus.

37

If you tender in the exchange offer for the purpose of participating in a distribution of the new notes:

• you cannot rely on the applicable interpretations of the SEC; and

• you must comply with the registration and prospectus delivery requirements of the Securities Act in connection with a secondary resale transaction.

Guaranteed Delivery Procedures

If you wish to tender your outstanding notes but your outstanding notes are not immediately available or you cannot deliver your outstanding notes, the letter of transmittal or any other required documents to the exchange agent or comply with the applicable procedures under DTC’s automated tender offer program before the expiration date, you may tender if:

• the tender is made through a member firm of a registered national securities exchange or of the National Association of Securities Dealers, Inc., a commercial bank or trust company having an office or correspondent in the United States or an eligible guarantor institution; and

• before the expiration date, the exchange agent receives from the member firm of a registered national securities exchange or of the National Association of Securities Dealers, Inc., commercial bank or trust company having an office or correspondent in the United States, or eligible guarantor institution either a properly completed and duly executed notice of guaranteed delivery by facsimile transmission, mail or hand delivery or a properly transmitted agent’s message and notice of guaranteed delivery:

- stating your name and address, the registered number(s) of your outstanding notes and the principal amount of outstanding notes tendered;

- stating that the tender is being made; and

- guaranteeing that, within three business days after the expiration date, the letter of transmittal or facsimile thereof, together with the outstanding notes or a book-entry confirmation and any other documents required by the letter of transmittal will be deposited by the eligible guarantor institution with the exchange agent; and

• the exchange agent receives the properly completed and executed letter of transmittal or facsimile thereof, as well as all tendered outstanding notes in proper form for transfer or a book-entry confirmation and all other documents required by the letter of transmittal, within three New York Stock Exchange trading days after the expiration date.

Upon request to the exchange agent, the exchange agent will send you a notice of guaranteed delivery if you wish to tender your outstanding notes using the guaranteed delivery procedures described above.

Withdrawal of Tenders

Except as otherwise provided in this prospectus, you may withdraw your tender at any time before 5:00 p.m., New York City time, on the expiration date unless we have previously accepted your notes for exchange. For a withdrawal to be effective:

• the exchange agent must receive a written notice of withdrawal at one of the addresses listed above under “Prospectus Summary—The Exchange Agent”; or

• the withdrawing holder must comply with the appropriate procedures of DTC’s automated tender offer program system.

Any notice of withdrawal must:

• specify the name of the person (whom we refer to as the depositor) who tendered the outstanding notes to be withdrawn;

38

• identify the outstanding notes to be withdrawn, including the registration number or numbers and the principal amount of the outstanding notes;

• be signed by the depositor in the same manner as the original signature on the letter of transmittal used to deposit those outstanding notes or be accompanied by documents of transfer sufficient to permit the trustee for the outstanding notes to register the transfer into the name of the depositor withdrawing the tender; and

• specify the name in which the outstanding notes are to be registered, if different from that of the depositor.

If outstanding notes have been tendered under the procedure for book-entry transfer described above, any notice of withdrawal must specify the name and number of the account at DTC to be credited with the withdrawn outstanding notes and otherwise comply with the procedures of DTC.

We will determine, in our sole discretion, all questions as to the validity, form, eligibility and time of receipt of notice of withdrawal. Our determination shall be final and binding on all parties. We will deem any outstanding notes so withdrawn not to have been validly tendered for exchange for purposes of the exchange offer.

Any outstanding notes that have been tendered for exchange but that are not exchanged for any reason will be returned to their holder without cost to the holder or, in the case of outstanding notes tendered by book-entry transfer into the exchange agent’s account at DTC according to the procedures described above, the outstanding notes will be credited to an account maintained with DTC for the outstanding notes. This return or crediting will take place as soon as practicable after withdrawal, rejection of tender or termination of the exchange offer. At any time on or before the expiration date, holders may re-tender properly withdrawn outstanding notes by following one of the procedures described under “—Procedures for Tendering” above.

Fees and Expenses

We will bear the expenses of soliciting tenders. The principal solicitation is being made by mail, but we may make additional solicitation by telephone, electronically or in person by the exchange agent, our officers and regular employees and those of our affiliates.

We have not retained any dealer-manager in connection with the exchange offer and will not make any payments to broker-dealers or others soliciting acceptances of the exchange offer. We will, however, pay the exchange agent reasonable and customary fees for its services and reimburse it for its related reasonable out-of-pocket expenses. We may also pay brokerage houses and other custodians, nominees and fiduciaries the reasonable out-of-pocket expenses incurred by them in forwarding copies of this prospectus, letters of transmittal and related documents to the beneficial owners of the outstanding notes and in handling or forwarding tenders for exchange.

We will pay the cash expenses to be incurred in connection with the exchange offer, including:

• SEC registration fees;

• fees and expenses of the exchange agent and trustee;

• accounting and legal fees and printing costs; and

• related fees and expenses.

39

Transfer Taxes

We will pay all transfer taxes, if any, applicable to the exchange of outstanding notes under the exchange offer. A tendering holder, however, will be required to pay any transfer taxes, whether imposed on the registered holder or any other person, if:

• certificates representing outstanding notes for principal amounts not tendered or accepted for exchange are to be delivered to, or are to be issued in the name of, any person other than the registered holder of outstanding notes tendered;

• tendered outstanding notes are registered in the name of any person other than the person signing the letter of transmittal; or

• a transfer tax is imposed for any reason other than the exchange of outstanding notes under the exchange offer.

If satisfactory evidence of payment of any transfer taxes payable by a holder is not submitted with the letter of transmittal, the amount of the transfer taxes will be billed directly to that tendering holder.

Consequences of Failure to Exchange

If you do not exchange your outstanding notes for new notes in the exchange offer, your notes will remain subject to the existing restrictions on transfer. In general, you may not offer or sell the outstanding notes unless they are registered under the Securities Act or the offer or sale is exempt from registration under the Securities Act and applicable state securities laws. Except as required by the registration rights agreement, we do not intend to register resales of the outstanding notes under the Securities Act. Based on interpretations of the SEC staff, you may offer for resale, resell or otherwise transfer new notes issued in the exchange offer without compliance with the registration and prospectus delivery provisions of the Securities Act, if:

• you are not our “affiliate” within the meaning of Rule 405 under the Securities Act;

• you acquired the new notes in the ordinary course of your business; and

• you have no arrangement or understanding with respect to the distribution of the new notes to be acquired in the exchange offer.

We may, in the future, seek to acquire untendered outstanding notes in open-market or privately negotiated transactions, through subsequent exchange offers or otherwise. We have no present plans to acquire any outstanding notes that are not tendered in the exchange offer or to file a registration statement to permit resales of any untendered outstanding notes.

Accounting Treatment

We will not recognize a gain or loss for accounting purposes upon the consummation of the exchange offer. We will amortize expenses of the exchange offer over the term of the new notes under accounting principles generally accepted in the United States.

40

DESCRIPTION OF OTHER INDEBTEDNESS

Credit Facility

As of March 31, 2003, the principal amounts outstanding, then-current interest rates and maturity dates of the term loans and revolving credit facility were as follows:

Debt	Principal Amount Outstanding	Interest Rate	Maturity
Term Loan E(a)	$103 million	LIBOR plus 4.375%	May 17, 2006
Revolving loans(b)	—(c)	LIBOR plus 3.500%	June 30, 2005

(a) A portion of the net proceeds from the sale of the outstanding notes was used to prepay in full the $103 million of Term Loan E outstanding and to pay a 1% prepayment premium.

(b) Following completion of our March 2003 credit facility amendment, we are currently required to pay a commitment fee of 1.00% on the unused portion of the $350 million revolving credit facility. The applicable interest rate margin and commitment fee payable by us will vary depending on our senior secured debt rating.

(c) We borrowed $218 million under the revolving credit loans in connection with the offering of the outstanding notes to fund the purchase, pursuant to a purchase option, of our new butanediol facility in The Netherlands that we leased pursuant to an operating lease. We used a portion of the net proceeds from the offering of the outstanding notes to repay the revolving credit loans.

Security

Our obligations under the credit facility are secured by equal and ratable liens on the collateral that will secure the new notes and certain other outstanding debt.

Subsidiary Guarantees

Our obligations under the credit facility are guaranteed by the subsidiaries that will guarantee the new notes.

Covenants

Our credit facility contains covenants that, subject to exceptions, restrict sale and leaseback transactions, lien incurrence, debt incurrence, dividends and investments, non-regulatory capital expenditures, certain payments, sales of assets and mergers and consolidations, and require us to maintain certain ownership interests in certain of our existing joint ventures and to ensure that certain of our existing joint ventures limit capital expenditure and debt levels and maintain cash distribution policies. In addition, the credit facility requires us to maintain specified financial ratios and consolidated net worth. The breach of these covenants would permit the lenders under our credit facility to declare the loans immediately payable, which would result in an event of default under our indentures, and would permit the lenders under our credit facility to terminate future lending commitments. As a result of continuing adverse conditions in the industry, in March 2003, Lyondell obtained amendments to its credit facility to provide additional financial flexibility by easing certain financial ratio requirements. The financial ratio requirements, however, become increasingly restrictive over time. We were in compliance with all such covenants as of March 31, 2003. See “Risk Factors—Risk Factors Relating to Our Debt and the New Notes—Our debt agreements may restrict our ability to take certain actions.”

Events of Default

The credit facility includes customary events of default, including a change of control, as defined in the credit facility.

41

Existing Senior Secured Notes

As of March 31, 2003, we had outstanding the following senior secured notes:

• $900 million of 9.625% Senior Secured Notes, Series A, due 2007;

• $1 billion of 9.875% Senior Secured Notes, Series B, due 2007;

• $393 million of 9.500% Senior Secured Notes due 2008;

• $276 million of 11.125% Senior Secured Notes due 2012; and

• $330 million of 9.500% Senior Secured Notes due 2008.

In addition, on May 20, 2003 we issued $325 million of the outstanding notes. We used the net proceeds from that offering to (i) prepay in full the approximately $103 million of term loans outstanding under our credit facility and pay a 1% prepayment premium and (ii) repay with the remaining proceeds the revolving credit loans we borrowed to fund the purchase, pursuant to a purchase option, of our new butanediol facility in The Netherlands that we leased pursuant to an operating lease.

The existing senior secured notes are secured by equal and ratable liens on the same collateral that will secure the new notes offered hereby and debt under the credit facility, and these existing notes are guaranteed by the same subsidiaries that will guarantee the new notes offered hereby. The indentures for the existing senior secured notes contain covenant, asset sale, change of control and event of default provisions substantially similar to the covenant, asset sale, change of control and event of default provisions in the indenture governing the new notes offered hereby.

Senior Subordinated Notes

As of March 31, 2003, we had outstanding $500 million of 10.875% Senior Subordinated Notes due 2009. These senior subordinated notes are guaranteed by the same subsidiaries that will guarantee the new notes offered hereby. The indenture for the senior subordinated notes contains covenant, asset sale, change of control and event of default provisions substantially similar to the covenant, asset sale, change of control and event of default provisions in the indenture governing the existing senior secured notes.

Lyondell Debentures

As of March 31, 2003, we had the following outstanding debentures that were originally issued by ARCO Chemical Company, which was acquired by Lyondell in 1998 and merged into Lyondell in 1999:

• $100 million of 9.375% debentures due 2005;

• $100 million of 10.250% debentures due 2010; and

• $224 million of 9.800% debentures due 2020.

The debentures are secured by liens on Lyondell’s manufacturing plants located in Pasadena (Bayport), Texas, Channelview, Texas and Lake Charles, Louisiana. These liens are equal and ratable with the liens on those assets that secure the senior secured notes and the loans under the credit facility. The indentures for these debentures contain limitations on liens and sale and leaseback transactions.

Joint Venture Debt

Equistar Debt

As of March 31, 2003, the principal amounts outstanding, interest rates and maturity dates of the debt obligations of Equistar were as follows:

42

Debt	Principal Amount Outstanding		Interest Rate	Maturity
Credit Facility:
Revolving loans (a)	$	—	LIBOR plus 2.25%	August 2006
Term loans (b)	$	296 million	LIBOR plus 3.50%	August 2007
Notes due 2004 (b)	$	300 million	8.50%	February 2004
Notes due 2006 (c)	$	150 million	6.50%	February 2006
Notes due 2008	$	700 million	10.125%	August 2008
Notes due 2009	$	599 million	8.75%	February 2009
Debentures due 2026 (c)	$	150 million	7.55%	February 2026
Medium term notes due 2003 (c)	$	29 million	9.7% (average)	September 2003
Medium term notes due 2005 (c)	$	1 million	11.2%	March 2005

(a) Equistar currently also pays a facility fee of 0.750% per annum on the entire $354 million revolving credit facility. The applicable margin and facility fee for revolving credit facility borrowings will vary depending on Equistar’s leverage ratio and usage of the revolving credit facility.

(b) Equistar completed an offering of $450 million of 10.625% senior notes due 2011 on April 22, 2003. The proceeds, net of associated fees and expenses, were used to (1) redeem $300 million of 8.50% notes due February 2004, (2) prepay approximately $122 million of the $296 million of outstanding term loans under Equistar’s credit facility and (3) pay associated prepayment premiums of approximately $17 million.

(c) This debt was assumed by Equistar from Lyondell in connection with Equistar’s formation in 1997. Lyondell remains a guarantor of this debt (or, in the case of the medium-term notes, a co-obligor, although Equistar is primarily liable as between the two entities).

Equistar Covenants

Equistar’s credit facility and senior unsecured notes indenture contain covenants that, subject to exceptions, restrict sale and leaseback transactions, investments, non-regulatory capital expenditures, certain payments, lien incurrence, debt incurrence, sales of assets and mergers and consolidations and contain customary events of default, including a change of control. In addition, the Equistar credit facility requires Equistar to maintain specified financial ratios, in all cases as provided in the credit facility. The breach of these covenants would permit the lenders under Equistar’s credit facility to declare the loans immediately payable, which would result in an event of default under Equistar’s indentures, and would permit the lenders under Equistar’s credit facility to terminate future lending commitments.

As a result of continuing adverse conditions in the industry, in March 2003, Equistar obtained amendments to its credit facility to provide additional financial flexibility by making certain financial ratio requirements less restrictive, except that the maximum permitted debt ratios become more restrictive beginning September 30, 2004. The financial ratio requirements under Equistar’s credit facility become increasingly restrictive beginning in the fourth quarter of 2003. Equistar was in compliance with all covenants under its debt instruments as of March 31, 2003. See “Risk Factors—Risk Factors Relating to Our Debt and the New Notes—Our debt agreements may restrict our ability to take certain actions.” Subject to certain exceptions and permitted liens, the Equistar credit facility is secured by a lien on Equistar’s accounts receivable, inventory, other personal property and certain fixed assets. Equistar’s debt instruments do not prohibit the payment by it of distributions to its owners, except that its credit facility prohibits distributions in the event of a default thereunder. In addition, Equistar’s credit facility, senior notes due 2008 and senior notes due 2011 require the payment of additional interest if, at the time of, or as a result of, payment of any such dividend, Equistar’s interest coverage ratio, as defined therein, is less than 1.75 to 1.

LCR Debt

As of March 31, 2003, the principal amounts outstanding, then-current interest rates and maturity dates of the debt obligations of LCR were as follows:

43

Debt	Principal Amount Outstanding		Interest Rate	Maturity
Credit Facility:
Revolving loans (a)	$	—	LIBOR plus 3.000%(b)	June 2004
Term loans	$	450 million	LIBOR plus 3.000%(b)	June 2004
Loans payable to Lyondell	$	229 million	LIBOR plus basis	December 2004
			points consistent with a BBB+ issuer
Loans payable to CITGO	$	35 million	LIBOR plus basis points consistent with a BBB+ issuer	December 2004

(a) This facility is a $70 million revolving credit facility.

(b) The margin increases to 3.500% in December 2003.

LCR Covenants

Under the covenant provisions of its credit agreements, LCR has agreed to, among other things, maintain certain specified financial ratios (including a consolidated net worth, debt to total capitalization, interest coverage ratio and leverage ratio), not enter into certain transactions with affiliates, not make certain investments, not create certain liens, not incur certain debt, not make distributions (including distributions to its owners during an event of default or repurchases of its capital securities), not allow its subsidiaries to incur certain debt, not enter into certain asset sales and not take certain specified actions with respect to its crude supply agreement, products purchase agreement or certain of LCR’s formation documents. See “Risk Factors—Risk Factors Relating to Our Debt and the New Notes—Our debt agreements may restrict our ability to take certain actions.” The breach by LCR of any of the covenants or financial requirements in its credit agreement could result in a default, which would permit the lenders to declare the loans immediately payable and to terminate future lending commitments. In April 2003, LCR obtained an amendment to its debt facilities clarifying a definition in the agreements. LCR was in compliance with all covenants under its debt instruments as of March 31, 2003.

Subject to certain exceptions and permitted liens, the LCR credit facilities are secured by liens on substantially all of LCR’s assets.

44

DESCRIPTION OF NEW NOTES

As used in this “Description of New Notes,” (i) the term the “Company” refers to Lyondell Chemical Company and not to any of its subsidiaries and (ii) except as otherwise specified, the term “new note” and “new notes” means the new notes offered hereby together with any outstanding unregistered notes that are not validly tendered and exchanged in the exchange offer. All such notes will vote together as a single class for all purposes under the indenture. For definitions of certain terms used in the following summary, see “—Certain Definitions” below.

General

The form and the term of the new notes are the same as the form and term of the outstanding notes they will replace, except that:

• the new notes are registered under the Securities Act;

• the new notes will not bear legends restricting transfer; and

• holders of the new notes will not be entitled to some rights under the registration rights agreement, including our payment of liquidated damages for failure to meet specified deadlines that will terminate when the exchange offer is consummated.

The new notes will be issued solely in exchange for an equal principal amount of outstanding unregistered 10 ¹/2% senior secured notes validly tendered in the exchange offer. As of the date of this prospectus, there are $325 million aggregate principal amount of outstanding notes. See “The Exchange Offer”.

The new notes will be issued under the same indenture as the outstanding notes. The indenture was entered into on May 20, 2003 among the Company, the Subsidiary Guarantors party thereto and The Bank of New York, as trustee (the “Trustee”). The terms of the new notes include those stated in the indenture and those made part of the indenture by reference to the Trust Indenture Act of 1939, as amended (the “Trust Indenture Act”). The new notes are subject to all such terms, and holders of new notes are referred to the indenture and the Trust Indenture Act for a statement of all the terms. Because this is a summary, it does not contain all of the information that may be important to you. You should read the indenture in its entirety, including the definitions in the indenture of certain terms used below. Copies of the indenture, registration rights agreement and Security Documents are available as described under “Where You Can Find More Information.”

The new notes will be general secured obligations of the Company and will rank pari passu in right of payment with all other existing and future unsubordinated indebtedness of the Company, including indebtedness under the Existing Credit Facility and the Existing Senior Secured Notes. While unsecured and unsubordinated indebtedness ranks pari passu with the new notes in right of payment, the holders of the new notes, together with the holders of other outstanding secured indebtedness, may, to the exclusion of unsecured creditors, seek recourse against the pledged assets as security for the new notes and such other secured indebtedness until amounts owed under the new notes and the other secured indebtedness are satisfied in full. The Company’s obligations under the new notes will also be guaranteed on a senior basis by the Subsidiary Guarantors. See “Subsidiary Guarantees.” As of the Issue Date, ARCO Chemical Technology, Inc., ARCO Chemical Technology, L.P. and Lyondell Chemical Nederland, Ltd. will be the only Subsidiary Guarantors. The Subsidiary Guarantees will be general unsecured obligations of the Subsidiary Guarantors and will rank pari passu in right of payment to all existing and future unsubordinated indebtedness of the Subsidiary Guarantors. At March 31, 2003, on a pro forma basis after giving effect to the offering of the outstanding notes and exchange offer:

• approximately $3.6 billion in principal amount of outstanding unsubordinated Indebtedness of the Company and the Subsidiary Guarantors would have been secured, including the new notes, the Indebtedness under the Existing Credit Facility and the Existing Senior Secured Notes;

45

• approximately $58 million of outstanding Indebtedness of the Company and the Subsidiary Guarantors would have been pari passu with the new notes and unsecured and ranking effectively junior to the new notes to the extent of the value of the assets securing the new notes, consisting primarily of hedging obligations and undrawn letters of credit; and

• the $500 million in principal amount of Senior Subordinated Notes are, by their terms, subordinated to the new notes.

Structural Subordination. Many of the operations of the Company are conducted through its Subsidiaries and Joint Ventures and, therefore, the Company is dependent upon the cash flow of its Subsidiaries and Joint Ventures to meet its obligations, including its obligations under the new notes. The new notes will be effectively subordinated to all outstanding Indebtedness and other liabilities and commitments (including trade payables and operating lease obligations) of the Company’s Subsidiaries and Joint Ventures, except to the extent they are Subsidiary Guarantors. Any right of the Company to receive assets of any of its Subsidiaries or Joint Ventures that are not Subsidiary Guarantors upon the latter’s liquidation or reorganization or insolvency (and the consequent right of the holders of new notes to participate in those assets) will be effectively subordinated to the claims of that Subsidiary’s or Joint Venture’s creditors and preferred stockholders, except to the extent that the Company is itself recognized as a creditor of such Subsidiary or Joint Venture. In that case, the claims of the Company would still be subordinate to any lien or security interest in the assets of such Subsidiary or Joint Venture and any Indebtedness of such Subsidiary or Joint Venture senior to that held by the Company. At March 31, 2003, on a pro forma basis after giving effect to the offering of the outstanding notes and the exchange offer, the new notes would have been effectively subordinated to approximately $4.5 billion of outstanding total liabilities of the Company’s Joint Ventures, excluding intercompany liabilities but including $2.9 billion of long-term debt (including current maturities), and approximately $255 million of outstanding total liabilities, excluding intercompany liabilities but including $2 million of long-term debt (including current maturities) of the nonguarantor subsidiaries. See “Risk Factors—Risk Factors Relating to Our Debt and the New Notes—The new notes are subordinated to debt of our joint ventures and non-guarantor subsidiaries.”

Under certain circumstances, the Company will be able to designate current or future Subsidiaries as Unrestricted Subsidiaries. Unrestricted Subsidiaries and Joint Ventures, so long as they are not Subsidiaries of the Company (and, if they are Subsidiaries, at any time that they are designated as Unrestricted Subsidiaries), will not be subject to many of the restrictive covenants set forth in the indenture.

Principal, Maturity and Interest

The new notes will mature on June 1, 2013. Interest on the new notes will accrue at 10 ¹/2% per annum and will be payable semiannually in arrears on June 1 and December 1 of each year, commencing on December 1, 2003, to holders of record on the immediately preceding May 15 or November 15, respectively. Interest on the new notes will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from May 20, 2003.

Interest will be computed on the basis of a 360-day year comprised of twelve 30-day months. Principal of and premium, if any, and interest and liquidated damages, if any, on the new notes will be payable at the office or agency of the Company maintained for such purpose within the City and the State of New York or, at the option of the Company, payment of interest and liquidated damages, if any, may be made by check mailed to the holders of the new notes at their respective addresses set forth in the register of holders of new notes; provided that all payments with respect to Global Notes, the holders of which have given wire transfer instructions, on or prior to the relevant record date, to the paying agent, will be required to be made by wire transfer of immediately available funds to the accounts specified by such holders. Until otherwise designated by the Company, the Company’s office or agency in New York will be the office of the Trustee maintained for such purpose. The new notes will initially be issued in global form and, in the event they are subsequently certificated, in denominations of $1,000 and integral multiples thereof.

46

Subject to the covenants described below under “Certain Covenants,” the Company may issue additional notes under the indenture having the same terms in all respects as the new notes (or in all respects except for the payment of interest on the new notes (i) scheduled and paid prior to the date of issuance of such additional notes or (ii) payable on the first interest payment date following such date of issuance); provided that the aggregate principal amount of all notes outstanding under the indenture after giving effect to any such issuance shall not exceed the amount that may be equally and ratably secured with obligations under the Existing Credit Facility without causing a default under the Existing Credit Facility; provided further that prior to any such issuance, the Company shall have delivered to the Trustee an opinion of counsel confirming that the holders of the new notes then outstanding will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such additional notes were not issued. The new notes, any unregistered notes that remain outstanding following the closing of the exchange offer and any such additional notes will be treated as a single class of notes under the indenture.

Security

The new notes will be secured by a lien equally and ratably with all Senior Indebtedness owing under the Existing Credit Facility and the Existing Senior Secured Notes (and, with respect to certain of the Company’s manufacturing plants described below, with Existing ARCO Chemical Debt as well) pursuant to certain security agreements and pledge agreements, as amended from time to time (collectively, the “Security Documents”) between the Company or certain of its Restricted Subsidiaries and JPMorgan Chase Bank, as collateral agent.

The liens granted under the Security Documents constitute first-priority liens, subject to certain exceptions and permitted liens described therein, on:

• personal property of the Company;

• substantially all the Equity Interests directly owned by the Company of the Company’s domestic subsidiaries and 65% of the Equity Interests directly owned by the Company of the Company’s foreign subsidiaries (other than the stock of certain subsidiaries for which consent is required in order to permit a pledge to the extent such consent has not been obtained);

• the rights of certain of the Company’s Joint Venture Subsidiaries to receive distributions from Joint Ventures in which they hold Equity Interests and all the Equity Interests in such Joint Venture Subsidiaries; and

• mortgages on the Company’s facilities located in Pasadena (Bayport), Texas, Channelview, Texas and Lake Charles, Louisiana

(collectively and together with any other assets that may be pledged from time to time, the “Collateral”).

The indenture and the Security Documents will also require that holders of the new notes be granted a lien equally and ratably with any lien granted on additional assets to secure the holders of Senior Indebtedness under the Existing Credit Facility subsequent to the Issue Date.

The liens that will secure the new notes also secure the Existing Credit Facility, the Existing Senior Secured Notes and, in the case of the mortgages, the Existing ARCO Chemical Debt. The new notes, as well as the Existing Senior Secured Notes and the Existing ARCO Chemical Debt, will automatically cease to be secured by those liens if and when those liens no longer secure the Existing Credit Facility. The liens would automatically terminate if the revolving loans and term loans under the Existing Credit Facility were repaid in full and the related commitments terminated thereunder without being replaced with another secured facility. The liens that secure the Existing Credit Facility would be released if such a release were approved by the requisite lenders under the Existing Credit Facility, and the consent of the holders of the new notes would not be required for such a release. The Security Documents generally provide that liens will be automatically released if the assets subject to such lien are transferred or otherwise disposed of in compliance with the provisions of the Existing Credit

47

Facility. The Existing Credit Facility specifically provides that liens will be automatically released from assets that are the subject of a Major Asset Sale and that are transferred to a Subject Asset Transferee in accordance with the terms of the Existing Credit Facility. In addition, the collateral agent and the Company may amend the provisions of the Security Documents with the consent of the requisite lenders under the Existing Credit Facility and without the consent of the holders of the new notes. The requisite lenders under the Existing Credit Facility have the sole ability to control remedies (including upon sale or liquidation after acceleration of the notes or the debt under the Existing Credit Facility) with respect to the collateral. The indenture provides that the Company and its Restricted Subsidiaries that are parties to any Security Documents will comply with all covenants and agreements contained in such Security Documents the failure to comply with which would have a material adverse effect on the Liens purported to be created thereby, unless such failure to comply is waived by the requisite lenders under the Existing Credit Facility and, after that waiver, the Company is in compliance with the covenant described under “Security.” See “Risk Factors—Risk Factors Relating to Our Debt and the New Notes—You may not be able to fully realize the value of your liens—The security for your benefit can be released without your consent.”

From and after the date when all liens granted in favor of the holders of Senior Indebtedness under the Existing Credit Facility are released, the provisions regarding security described above will no longer apply. The provisions of the covenant described below under “Certain Covenants—Liens” will, however, continue to apply.

Subsidiary Guarantees

ARCO Chemical Technology, Inc., ARCO Chemical Technology, L.P. and Lyondell Chemical Nederland, Ltd. initially will be the only Subsidiary Guarantors of the new notes. In addition, the indenture provides that any Restricted Subsidiary that Guarantees or secures the payment of any other Indebtedness of the Company or any of its Restricted Subsidiaries must also guarantee the payment of the new notes, subject to certain exceptions described below under “Certain Covenants—Limitations on Issuances of Guarantees of Indebtedness by Subsidiaries.” The Subsidiary Guarantors will unconditionally guarantee the due and punctual payment of the principal of and premium, if any, and interest and liquidated damages, if any, on the new notes, when and as the same shall become due and payable, whether at maturity, upon redemption, by declaration or otherwise (the “Subsidiary Guarantees”). The terms of each Subsidiary Guarantee provide that the obligations of the Subsidiary Guarantor thereunder will be limited so as not to constitute a fraudulent conveyance under applicable law. The Subsidiary Guarantees will be general senior obligations of the Subsidiary Guarantors.

The indenture provides that no Subsidiary Guarantor may consolidate with or merge with or into (whether or not such Subsidiary Guarantor is the surviving person) another corporation, person or entity, whether or not affiliated with such Subsidiary Guarantor unless:

(i) subject to the provisions of the following paragraph, the person formed by or surviving any such consolidation or merger if other than the Company or such Subsidiary Guarantor assumes all the obligations of such Subsidiary Guarantor, pursuant to a supplemental indenture in form and substance reasonably satisfactory to the Trustee, under its Subsidiary Guarantee;

(ii) immediately after giving effect to such transaction, no Default or Event of Default exists; and

(iii) the Company would, at the time of such transaction and after giving pro forma effect thereto as if such transaction had occurred at the beginning of the applicable four-quarter period,

(A) have a Consolidated Net Worth immediately after the transaction equal to or greater than the Consolidated Net Worth of the Company immediately preceding the transaction, and

(B) except with respect to a consolidation or merger with a person that has no outstanding Indebtedness, be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the covenant described under the caption “Certain Covenants—Incurrence of Indebtedness and Issuance of Preferred Stock.”

48

The requirements of clauses (i) and (iii) of this paragraph will not apply in the case of a consolidation with or merger with or into the Company and the requirements of clause (iii) of this paragraph will not apply in the case of a consolidation with or merger with or into another Subsidiary Guarantor.

The indenture provides that:

(i) in the event of a sale or other disposition, by way of merger, consolidation or otherwise, of all the Capital Stock of any Subsidiary Guarantor to any person that is not an Affiliate of the Company, such Subsidiary Guarantor will be released and relieved of any obligations under its Subsidiary Guarantee; provided that the Net Proceeds of such sale or other disposition are applied in accordance with the applicable provisions of the indenture. See “Repurchase at the Option of Holders—Asset Sales;”

(ii) upon the release or discharge of the Guarantee that resulted in the creation of the Subsidiary Guarantee of such Subsidiary Guarantor (or, in the case of the Subsidiary Guarantee of ARCO Chemical Technology, Inc., ARCO Chemical Technology L.P. or Lyondell Chemical Nederland, Ltd. issued on the Issue Date, the release or discharge of its Guarantee of Indebtedness under the Existing Credit Facility and the Existing Senior Secured Notes), except a discharge or release by or as a result of payment under such Guarantee, such Subsidiary Guarantor will be released and relieved of any obligations under its Subsidiary Guarantee; and

(iii) upon the designation of any Subsidiary Guarantor as an Unrestricted Subsidiary in accordance with the terms of the indenture, such Subsidiary Guarantor will be released and relieved of any obligations under its Subsidiary Guarantee.

See “Certain Covenants—Limitations on Issuances of Guarantees of Indebtedness by Subsidiaries.”

Mandatory Redemption

Except as set forth below under “Repurchase at the Option of Holders,” the Company will not be required to make any mandatory redemption or sinking fund payments with respect to the new notes.

Optional Redemption

The new notes will not be redeemable at the option of the Company prior to June 1, 2008. Thereafter, the new notes will be subject to redemption at the option of the Company, in whole or from time to time in part, upon not less than 30 nor more than 60 days’ notice, at the redemption prices (expressed as percentages of principal amount) set forth below plus accrued and unpaid interest thereon to the applicable redemption date, if redeemed during the twelve-month period beginning on June 1 of the following years:

Year	Percentage
2008	105.250%
2009	103.500%
2010	101.750%
2011 and thereafter	100.000%

Selection and Notice

If less than all the new notes are to be redeemed at any time, selection of new notes for redemption will be made by the Trustee in compliance with the requirements of the principal national securities exchange, if any, on which the new notes are listed or, if the new notes are not so listed, on a pro rata basis, by lot or by such method as the Trustee shall deem fair and appropriate; provided that no new notes of $1,000 or less shall be redeemed in part. Notices of redemption shall be mailed by first class mail at least 30 but not more than 60 days before the redemption date to each holder of new notes to be redeemed at its registered address. Notices of redemption may not be conditional. If any new note is to be redeemed in part only, the notice of redemption that relates to such

49

new note shall state the portion of the principal amount thereof to be redeemed. A note in principal amount equal to the unredeemed portion thereof will be issued in the name of the holder thereof upon cancellation of the original new note. New notes called for redemption become due on the date fixed for redemption. On and after the redemption date, interest ceases to accrue on new notes or portions of them called for redemption.

Repurchase at the Option of Holders

Change of Control

Upon the occurrence of a Change of Control, each holder of new notes will have the right to require the Company to repurchase all or any part (equal to $1,000 or an integral multiple thereof) of such holder’s new notes pursuant to the offer described below (the “Change of Control Offer”) at an offer price in cash equal to 101% of the aggregate principal amount thereof plus accrued and unpaid interest thereon to the date of purchase (the Change of Control Payment) on a date that is not more than 90 days after the occurrence of such Change of Control (the “Change of Control Payment Date”). Within 30 days following any Change of Control, the Company will mail, or at the Company’s request the Trustee will mail, a notice to each holder offering to repurchase the new notes held by such holder pursuant to the procedures specified in such notice. The Company will comply with the requirements of Rule l4e-1 under the Securities Exchange Act of 1934 and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the repurchase of the new notes as a result of a Change of Control.

On the Change of Control Payment Date, the Company will, to the extent lawful,

(1) accept for payment all new notes or portions thereof properly tendered and not withdrawn pursuant to the Change of Control Offer,

(2) deposit with the paying agent an amount equal to the Change of Control Payment in respect of all new notes or portions thereof so tendered, and

(3) deliver or cause to be delivered to the Trustee the new notes so accepted, together with an officers’ certificate stating the aggregate principal amount of new notes or portions thereof being purchased by the Company.

The paying agent will promptly mail to each holder of new notes so tendered the Change of Control Payment for such new notes, and the Trustee will promptly authenticate and mail (or cause to be transferred by book entry) to each holder a note equal in principal amount to any unpurchased portion of the new notes surrendered, if any; provided that each such note will be in a principal amount of $1,000 or an integral multiple thereof.

A failure by the Company to comply with the provisions of the two preceding paragraphs will constitute an Event of Default under the indenture. Except as described above with respect to a Change of Control, the indenture will not contain provisions that permit the holders of the new notes to require that the Company purchase or redeem the new notes in the event of a takeover, recapitalization or similar transaction. See “Events of Default and Remedies.”

There can be no assurance that the Company will have the financial resources to purchase the new notes, particularly if a Change of Control triggers a similar repurchase requirement for, or results in the acceleration of, other Indebtedness. The Existing Senior Secured Notes and Senior Subordinated Notes contain a similar repurchase requirement. The Existing Credit Facility provides that certain events constituting a Change of Control will constitute a default under, and could result in the acceleration of the maturity of, the Existing Credit Facility. Future indebtedness might contain similar provisions. Accordingly, the Company might not be able to fulfill its obligation to repurchase any new notes if a Change of Control occurs. See “Risk Factors—Risk Factors Relating to Our Debt and the New Notes—We may not be able to repurchase your new notes upon a change of control.”

50

The Company will not be required to make a Change of Control Offer upon a Change of Control if a third party makes the Change of Control Offer at the same or a higher purchase price, at the same times and otherwise in substantial compliance with the requirements applicable to a Change of Control Offer made by the Company and purchases all new notes validly tendered and not withdrawn under such Change of Control Offer.

“Change of Control” means the occurrence of any of the following: (i) the sale, transfer, conveyance or other disposition, in one or a series of related transactions, of all or substantially all the assets of the Company and its Subsidiaries taken as a whole to any person or group (as such term is used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act) other than to a person or group who, prior to such transaction, held a majority of the voting power of the voting stock of the Company; (ii) the acquisition by any person or group (as defined above) of a direct or indirect interest in more than 50% of the voting power of the voting stock of the Company, by way of merger or consolidation or otherwise; or (iii) the first day on which a majority of the members of the Board of Directors of the Company are not Continuing Directors.

The phrase “all or substantially all” the assets of the Company will likely be interpreted under applicable state law and will be dependent upon particular facts and circumstances. As a result, there may be a degree of uncertainty in ascertaining whether a sale or transfer of “all or substantially all” the assets of the Company has occurred, in which case a holder’s ability to obtain the benefit of a Change of Control Offer may be impaired.

Asset Sales

The indenture provides that the Company will not, and will not permit any of its Restricted Subsidiaries to, consummate an Asset Sale unless:

(i) the Company and/or the Restricted Subsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the fair market value (as conclusively evidenced by a resolution of the Board of Directors of the Company set forth in an officers’ certificate delivered to the Trustee) of the assets or Equity Interests issued or sold or otherwise disposed of; and

(ii) at least 80% of the consideration therefor received by the Company and/or such Restricted Subsidiary is in the form of

(A) cash or Cash Equivalents or

(B) a controlling interest or a joint venture interest (to the extent otherwise permitted by the indenture) in a business engaged in a Permitted Business or long-term property or assets that are used or useful in a Permitted Business;

provided that the amount of (x) any liabilities (as shown on the Company’s or such Restricted Subsidiary’s most recent balance sheet) of the Company or any Restricted Subsidiary (other than contingent liabilities and liabilities that are by their terms subordinated to the new notes or any guarantee thereof) that are assumed by the transferee of any such assets pursuant to a customary novation agreement that releases the Company or such Restricted Subsidiary from further liability and (y) any securities, notes or other obligations received by the Company or any such Restricted Subsidiary from such transferee that are promptly converted by the Company or such Restricted Subsidiary into cash (to the extent of the cash received) shall be deemed to be cash for purposes of this provision.

Within 360 days after the receipt of any Net Proceeds from an Asset Sale, the Company may apply such Net Proceeds, at its option:

(a) to permanently repay Senior Indebtedness (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings) of the Company or a Subsidiary Guarantor or Indebtedness (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings) of any Restricted Subsidiary that is not a Subsidiary Guarantor; provided that so long as the new notes are secured, only (A) repayment of Senior Indebtedness incurred under the Existing Credit

51

Facility (but not any refinancing thereof other than a credit facility with commercial banks and other lenders) or (B) if a Restricted Subsidiary that is not a Subsidiary Guarantor has consummated the Asset Sale, repayment of Indebtedness of such Restricted Subsidiary with a corresponding reduction in commitments with respect thereto in the case of revolving borrowings shall constitute a repayment of Indebtedness permitted pursuant to this clause (a); or

(b) to acquire a controlling interest or a joint venture interest (to the extent otherwise permitted by the indenture) in another business or the making of a capital expenditure or the acquisition of other long-term assets, in each case, in a Permitted Business (or enter into a binding commitment for any such expenditure or acquisition); provided that such binding commitment shall be treated as a permitted application of Net Proceeds from the date of such commitment until and only until the earlier of (x) the date on which such expenditure or acquisition is consummated and (y) the 180th day following the expiration of the aforementioned 360-day period. If the expenditure or acquisition contemplated by such binding commitment is not consummated on or before such 180th day and the Company shall not have applied such Net Proceeds pursuant to clause (a) above on or before such 180th day, such commitment shall be deemed not to have been a permitted application of Net Proceeds at any time.

However, so long as the new notes are secured, the Company may not apply Net Proceeds of a Significant Asset Sale pursuant to clause (b) to satisfy its obligations under the first sentence of this paragraph except to the extent that the provisions of the Existing Credit Facility (but not any refinancing thereof other than a credit facility with commercial banks and other lenders) require a mandatory prepayment from such proceeds but the requisite lenders thereunder have waived such mandatory prepayment. Pending the final application of any such Net Proceeds, the Company may temporarily reduce the revolving Indebtedness under the Existing Credit Facility or otherwise invest such Net Proceeds in any manner that is not prohibited by the indenture. Any Net Proceeds from Asset Sales that are not applied or invested as provided in the first sentence of this paragraph will be deemed to constitute “Excess Proceeds.” When the aggregate amount of Excess Proceeds under the indenture exceeds $25 million, the Company will be required to make an offer to all holders of new notes (an “Asset Sale Offer”) to purchase the maximum principal amount of new notes and (i) if the Company is required to do so under the terms of any other Indebtedness ranking pari passu with such new notes, such other Indebtedness and (ii) if the Company elects to do so, any Existing ARCO Chemical Debt, on a pro rata basis with the new notes, that may be purchased out of the Excess Proceeds, at an offer price in cash in an amount equal to 100% of the principal amount thereof plus accrued and unpaid interest thereon to the date of purchase, in accordance with the procedures set forth in the indenture. To the extent that the aggregate amount of new notes (and any other pari passu Indebtedness subject to such Asset Sale Offer) tendered pursuant to such Asset Sale Offers is less than the Excess Proceeds, the Company may, subject to the other terms of the indenture, use any remaining Excess Proceeds for general corporate purposes. If the aggregate principal amount of new notes surrendered by holders thereof in connection with any Asset Sale Offer exceeds the amount of Excess Proceeds, the Trustee shall select the new notes to be purchased on a pro rata basis. Upon completion of the offer to purchase made under the indenture, the amount of Excess Proceeds under the indenture shall be reset at zero.

Certain Covenants

Restricted Payments

The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly:

(i) declare or pay any dividend or make any distribution on account of the Company’s or any of its Restricted Subsidiaries’ Equity Interests (other than (x) dividends or distributions payable in Qualified Equity Interests of the Company and (y) dividends or distributions payable to the Company or any Restricted Subsidiary of the Company);

(ii) purchase, redeem or otherwise acquire or retire for value any Equity Interests of the Company, any of its Restricted Subsidiaries or any Affiliate of the Company (other than any such Equity Interests owned by the Company or any of its Restricted Subsidiaries);

52

(iii) make any principal payment on, or purchase, redeem, defease or otherwise acquire or retire for value any Indebtedness (“Subordinated Debt”) of the Company or any Restricted Subsidiary that is subordinated by its terms to the new notes or the Subsidiary Guarantees, as applicable (other than Indebtedness owed to the Company or any Restricted Subsidiary), except, in each case, payment of interest or principal at Stated Maturity; or

(iv) make any Restricted Investment (all such payments and other actions set forth in clauses (i) through (iv) above being collectively referred to as Restricted Payments);

unless, at the time of and after giving effect to such Restricted Payment (the amount of any such Restricted Payment, if other than cash, shall be the fair market value (as conclusively evidenced by a resolution of the Board of Directors) of the asset(s) proposed to be transferred by the Company or such Restricted Subsidiary, as the case may be, pursuant to such Restricted Payment):

(a) no Default or Event of Default shall have occurred and be continuing after giving effect thereto;

(b) the Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the most recently ended four full fiscal quarters for which financial statements have been filed with the Commission pursuant to the covenant described below under the caption “Reports” immediately preceding the date of such Restricted Payment, have been permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of the covenant in the indenture described below under the caption “—Incurrence of Indebtedness and Issuance of Preferred Stock;” and

(c) such Restricted Payment, together with the aggregate of all other Restricted Payments made by the Company and its Restricted Subsidiaries on or after the Issue Date (excluding Restricted Payments permitted by clauses (b) (to the extent paid to the Company or any of its Restricted Subsidiaries or to the extent such distributions are deducted as a minority interest in calculating Consolidated Net Income), (c), (d), (e), (g), (j), (n) and (p) of the next succeeding paragraph and 50% of any Restricted Payments permitted by clause (h) of the next succeeding paragraph), is less than the sum, without duplication, of:

(i) 50% of the Consolidated Net Income of the Company for the period (taken as one accounting period) from the beginning of the first fiscal quarter commencing on April 1, 2003, to the end of the Company’s most recently ended fiscal quarter for which financial statements have been filed with the Commission pursuant to the covenant described below under the caption “Reports” at the time of such Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit), plus

(ii) 100% of the aggregate net cash proceeds received by the Company or any of its Restricted Subsidiaries from the issue or sale (other than to a Subsidiary or Joint Venture of the Company) after the Issue Date of Qualified Equity Interests of the Company or of debt securities of the Company or any of its Restricted Subsidiaries that have been converted into or exchanged for such Qualified Equity Interests of the Company, plus

(iii) to the extent that any Restricted Investment (other than a Restricted Investment permitted to be made pursuant to clause (g) or (h) below) that was made after the Issue Date is sold for cash or otherwise liquidated, repaid or otherwise reduced, including by way of dividend (to the extent not included in calculating Consolidated Net Income), for cash, the lesser of (A) the cash return with respect to such Restricted Investment (less the cost of disposition, if any) and (B) the initial amount of such Restricted Investment, plus

(iv) an amount equal to the sum of

(A) the net reduction in Investments in Unrestricted Subsidiaries resulting from dividends, repayments of loans or other transfers of assets (to the extent not included in calculating Consolidated Net Income), in each case to the Company or any Restricted Subsidiary from Unrestricted Subsidiaries, and

53

(B) the portion (proportionate to the Company’s equity interest in such Subsidiary) of the net market value of the net assets of an Unrestricted Subsidiary at the time such Unrestricted Subsidiary is designated a Restricted Subsidiary;

provided, however, that the foregoing sum shall not exceed, in the case of any Unrestricted Subsidiary, the amount of Restricted Investments (other than Restricted Investments permitted to be made pursuant to clause (g) or (h) below) previously made after the Issue Date by the Company or any Restricted Subsidiary in such Unrestricted Subsidiary.

If, other than with respect to payments made under clauses (a) and (n) below, no Default or Event of Default shall have occurred and be continuing after giving effect to such Restricted Payment, the foregoing provisions will not prohibit the following Restricted Payments:

(a) the payment of any dividend within 60 days after the date of declaration thereof, if at said date of declaration such payment would have complied with the provisions of the indenture;

(b) dividends or distributions by any Restricted Subsidiary of the Company payable

(x) to all holders of a class of Capital Stock of such Restricted Subsidiary on a pro rata basis or on a basis that is more favorable to the Company; provided that at least 50% of such class of Capital Stock is held by the Company and/or one or more of its Restricted Subsidiaries, or

(y) to all holders of a class of Preferred Stock of a Restricted Subsidiary that is not a Subsidiary Guarantor issued after the Issue Date in compliance with the covenant described below under the caption “—Incurrence of Indebtedness and Issuance of Preferred Stock;”

(c) the payment of cash dividends on any series of Disqualified Stock issued after the Issue Date in an aggregate amount not to exceed the cash received by the Company since the Issue Date upon issuance of such Disqualified Stock;

(d) the redemption, repurchase, retirement or other acquisition of any Equity Interests of the Company, any Restricted Subsidiary or any Joint Venture (or the acquisition of all the outstanding Equity Interests of any person that conducts no operations and has no assets or liabilities other than the ownership of Equity Interests in a Joint Venture) in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary or Joint Venture of the Company) of, Qualified Equity Interests of the Company; provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement or other acquisition shall be excluded from clause (c)(ii) of the preceding paragraph;

(e) the defeasance, redemption or repurchase of Subordinated Debt with the net cash proceeds from an incurrence of Permitted Refinancing or in exchange for or out of the net cash proceeds from the substantially concurrent sale (other than to a Subsidiary or Joint Venture of the Company) of Qualified Equity Interests of the Company; provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement or other acquisition shall be excluded from clause (c)(ii) of the preceding paragraph;

(f) the repurchase, redemption or other acquisition or retirement for value of (i) any Equity Interests of the Company or any Subsidiary of the Company held by any member of the Company’s (or any of its Subsidiaries’) management pursuant to any management equity subscription agreement or stock option agreement or (ii) any Equity Interests of the Company that are or are intended to be used to satisfy issuances of Equity Interests upon exercise of employee or director stock options or upon exercise or satisfaction of other similar instruments outstanding under employee or director benefit plans of the Company or any Subsidiary of the Company; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests shall not exceed $10 million in any fiscal year of the Company;

(g) Restricted Investments in any of the Specified Joint Ventures (including, without limitation, the purchase of Equity Interests of a Specified Joint Venture directly from another person or the purchase of all the outstanding Equity Interests of any person that conducts no operations and has no assets or liabilities

54

other than the ownership of Equity Interests of a Specified Joint Venture) to the extent that the proceeds thereof are used to purchase or redeem an interest of another person in such Specified Joint Venture (other than the Company, a Restricted Subsidiary or an Affiliate of the Company, except a person that is deemed to be an Affiliate solely by virtue of its ownership of Equity Interests of the Company acquired in exchange for Equity Interests in such Specified Joint Venture); provided that after giving pro forma effect thereto as if such Restricted Payment (and any related incurrence of Indebtedness) had been made at the beginning of the most recently ended four-full-fiscal-quarter period for which financial statements have been filed with the Commission pursuant to the covenant described below under the caption “Reports” immediately preceding the date of such Restricted Payment, the Company would have been permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of the covenant described below under the caption “—Incurrence of Indebtedness and Issuance of Preferred Stock;”

(h) Restricted Investments in any Joint Venture made during any fiscal year of the Company or within 45 days after the end of such fiscal year in amounts that, together with all other Restricted Investments made in such Joint Venture in respect of such fiscal year in reliance on this clause (h) during such fiscal year or within 45 days after the end of such fiscal year, do not exceed the amount of dividends or distributions previously paid in respect of such fiscal year to the Company or any Restricted Subsidiary by such Joint Venture;

(i) the payment of dividends on the Company’s common stock at a rate not to exceed $0.90 per share per annum (such $0.90 amount to be appropriately adjusted to reflect any stock split, reverse stock split, stock dividend or similar transactions made after the Issue Date so that the aggregate amount of dividends payable after such transaction is the same as the amount payable immediately prior to such transaction);

(j) distributions or payments of Receivables Fees;

(k) (i) Investments in any Joint Venture or Unrestricted Subsidiary organized to construct, own and/or operate a propylene oxide plant in the European Union in an aggregate amount that, together with all other Investments made pursuant to this clause (k), does not exceed $100.0 million and (ii) the pledge of the Capital Stock of such Joint Venture or Unrestricted Subsidiary or of a Joint Venture Subsidiary that has no assets and conducts no operations other than the holding directly or indirectly of Equity Interests of such Joint Venture to secure Non-Recourse Debt of such Joint Venture or Unrestricted Subsidiary;

(l) (i) (x) the transfer of the TDI Assets to a newly formed Joint Venture or Unrestricted Subsidiary or (y) the designation of any Restricted Subsidiary that has no assets or liabilities other than all or a portion of the TDI Assets as an Unrestricted Subsidiary, in each case, in connection with the incurrence of Indebtedness by such Joint Venture or Unrestricted Subsidiary or Rhodia or a wholly owned subsidiary of Rhodia to improve the Rhodia TDI Plant and (ii) the pledge of the Capital Stock of such Joint Venture or Unrestricted Subsidiary or of a Joint Venture Subsidiary that has no assets and conducts no operations other than the holding directly or indirectly of Equity Interests of such Joint Venture to secure Non-Recourse Debt of such Joint Venture or Unrestricted Subsidiary or Rhodia or a wholly owned subsidiary of Rhodia;

(m) the repurchase of any Subordinated Debt at a purchase price not greater than 101% of the principal amount thereof in the event of (x) a Change of Control pursuant to a provision no more favorable to the holders thereof than the provision of the indenture described under “Repurchase at the Option of Holders—Change of Control” or (y) an Asset Sale pursuant to a provision no more favorable to the holders thereof than the provision of the indenture described under “Repurchase at the Option of Holders—Asset Sales;” provided that, in each case, prior to such repurchase, the Company has made a Change of Control Offer or Asset Sale Offer, as applicable, and repurchased all notes issued under the indenture that were validly tendered for payment in connection with such Change of Control Offer or Asset Sale Offer;

(n) distributions by any Restricted Subsidiary or Joint Venture of chemicals to a holder of Capital Stock of such Restricted Subsidiary or Joint Venture if such distributions are made pursuant to a provision in a joint venture agreement or other arrangement entered into in connection with the establishment of such Joint Venture or Restricted Subsidiary that requires such holder to pay a price for such chemicals equal to

55

that which would be paid in a comparable transaction negotiated on an arm’s-length basis (or pursuant to a provision that imposes a substantially equivalent requirement);

(o) any other Restricted Payment that, together with all other Restricted Payments made pursuant to this clause (o) on or after the Issue Date, does not exceed $25 million (after giving effect to any subsequent reduction in the amount of any Investments made pursuant to this clause (o) as a result of the repayment or other disposition thereof for cash as set forth in clause (iii) of the first paragraph above, the amount of such reduction not to exceed the amount of such Investments previously made pursuant to this clause (o)); and

(p) dividends or distributions by any Joint Venture (other than a Specified Joint Venture) to all holders of a class of Capital Stock of such Joint Venture permitted by clause (b)(x) above; provided that after giving effect to such dividends or distributions and any related transactions, the Joint Venture making such dividends or distributions to such holders is contractually entitled to receive, and receives within 180 days before or after the date of such dividends or distributions, directly or indirectly, an equivalent or larger cash payment from each such holder (other than from a holder that is the Company or any Restricted Subsidiary) or from an Affiliate of such holder, which cash payment has not been previously applied pursuant to this clause (p) to offset any other dividend or distribution by such Joint Venture to such holder and (y) such dividends or distributions do not exceed such holders’ pro rata share of the Joint Venture’s cash flows from operating activities, minus any noncash charge to the extent that it represents an accrual of or reserve for cash expenditures in any future period or amortization of a prepaid cash expense in any future period.

The Board of Directors of the Company may designate any Restricted Subsidiary to be an Unrestricted Subsidiary if such designation would not cause a Default. For purposes of making such determination, all outstanding Investments by the Company and its Restricted Subsidiaries in the Subsidiary so designated will be deemed to be Restricted Payments at the time of such designation and will reduce the amount available for Restricted Payments under the first paragraph of this covenant (except to the extent such Investments were repaid in cash, and, in the case of a Joint Venture (and any Subsidiary of a Joint Venture) designated as an Unrestricted Subsidiary on the first day that it is a Subsidiary of the Company, except to the extent that (1) such Investments were made after the Issue Date or (2) in the case of a Specified Joint Venture, such Investments were made prior to the Issue Date). All such outstanding Investments (except as provided in the parenthetical included in the preceding sentence) will be deemed to constitute Investments in an amount equal to the fair market value of such Investments at the time of such designation (as conclusively determined by the Board of Directors). Such designation will only be permitted if any such Restricted Payment would be permitted at such time and if such Restricted Subsidiary otherwise meets the definition of an Unrestricted Subsidiary. In the case of any designation by the Company of a person as an Unrestricted Subsidiary on the first day that such person is a Subsidiary of the Company in accordance with the provisions of the indenture, such designation shall be deemed to have occurred for all purposes of the indenture simultaneously with, and automatically upon, such person becoming a Subsidiary.

Not later than the date of making any Restricted Payment, other than those permitted by clauses (b)(x), (f), (j) and (n) above, and not later than the 120th day after making any Restricted Payment permitted by clause (f) above, the Company shall deliver to the Trustee an officers’ certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by the covenant described under the caption “—Restricted Payments” were computed.

Incurrence of Indebtedness and Issuance of Preferred Stock

The indenture provides that, on or after the Issue Date:

• the Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt);

• the Company will not, and will not permit any of its Restricted Subsidiaries to, issue any Disqualified Stock (including Acquired Disqualified Stock); and

56

• the Company will not permit any of its Restricted Subsidiaries that are not Subsidiary Guarantors to issue any shares of Preferred Stock (including Acquired Preferred Stock);

provided, however, that the Company and the Subsidiary Guarantors may incur Indebtedness (including Acquired Debt) and the Company and the Subsidiary Guarantors may issue shares of Disqualified Stock (including Acquired Disqualified Stock) if the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements have been filed with the Commission pursuant to the covenant described below under the caption “Reports” immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock is issued would have been at least 2.0 to 1, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period. Letters of credit and bankers’ acceptances shall be deemed to have an aggregate principal amount of Indebtedness equal to the maximum amount available thereunder.

The foregoing provisions will not apply to:

(i) the incurrence by the Company of Indebtedness pursuant to the Existing Credit Facility (and by its Subsidiaries of Guarantees thereof) in an aggregate principal amount at any time outstanding not to exceed an amount equal to $2.537 billion less the aggregate amount of all mandatory repayments (other than mandatory prepayments triggered solely by the issuance of Indebtedness or Preferred Stock of a Finance Subsidiary to refinance the Existing Credit Facility) applied after May 17, 1999 to (i) repay loans (other than revolving credit loans) outstanding thereunder or (ii) permanently reduce the revolving credit commitments thereunder;

(ii) the incurrence by the Company and the Subsidiary Guarantors of Indebtedness represented by the new notes (other than additional notes) and the Subsidiary Guarantees thereof;

(iii) the incurrence by the Company and its Restricted Subsidiaries of Existing Indebtedness (other than Indebtedness of the type described in clause (i), (ii) or (v) through (xii) of this covenant);

(iv) the incurrence by the Company or any of its Restricted Subsidiaries of any Permitted Refinancing in exchange for, or the net proceeds of which are used to extend, refinance, renew, replace, defease or refund, Indebtedness that was permitted to be incurred under the Fixed Charge Coverage Ratio test set forth above or clause (ii) or (iii) above or (xiii) or (xiv) below or this clause (iv);

(v) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that (i) if the Company or any Subsidiary Guarantor is the obligor on such Indebtedness, such Indebtedness is expressly subordinated to the prior payment in full in cash of all Obligations with respect to the new notes or the Subsidiary Guarantee, as the case may be, and (ii)(A) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a person other than the Company or a Restricted Subsidiary and (B) any sale or other transfer of any such Indebtedness to a person that is not either the Company or a Restricted Subsidiary shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be;

(vi) the incurrence by the Company or any Restricted Subsidiary of Hedging Obligations that are incurred for the purpose of (A) fixing or hedging interest rate or currency risk with respect to any fixed or floating rate Indebtedness that is permitted by the indenture to be outstanding or any receivable or liability the payment of which is determined by reference to a foreign currency; provided that the notional principal amount of any such Hedging Obligation does not exceed the principal amount of the Indebtedness to which such Hedging Obligation relates or (B) managing fluctuations in the price or cost of raw materials, manufactured products or related commodities; provided that such obligations are entered into in the ordinary course of business to hedge or mitigate risks to which the Company or any Restricted Subsidiary is exposed in the conduct of its business or the management of its liabilities (as determined by the Company’s or such Restricted Subsidiary’s principal financial officer in the exercise of his or her good faith business judgment);

57

(vii) the issuance by any of the Company’s Restricted Subsidiaries of shares of Preferred Stock to the Company or a Wholly Owned Restricted Subsidiary; provided that (A) any subsequent issuance or transfer of Equity Interests that results in such Preferred Stock being held by a person other than the Company or a Wholly Owned Restricted Subsidiary or (B) the transfer or other disposition by the Company or a Wholly Owned Restricted Subsidiary of any such shares to a person other than the Company or a Wholly Owned Restricted Subsidiary shall be deemed, in each case, to constitute an issuance of such Preferred Stock by such Subsidiary on such date that is not permitted by this clause (vii);

(viii) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by tender, bid, performance, government contract, surety or appeal bonds, standby letters of credit and warranty and contractual service obligations of like nature, trade letters of credit or documentary letters of credit, in each case to the extent incurred in the ordinary course of business of the Company or such Restricted Subsidiary and the incurrence by the Company of Indebtedness represented by letters of credit incurred in connection with the PBGC Settlement;

(ix) the incurrence by any Restricted Subsidiary of the Company of Indebtedness or the issuance by any Restricted Subsidiary of Preferred Stock, the aggregate principal amount or liquidation preference of which, together with all other Indebtedness and Preferred Stock of the Company’s Restricted Subsidiaries at the time outstanding and incurred or issued in reliance upon this clause (ix), does not exceed $50.0 million;

(x) the issuance by any Finance Subsidiary of Preferred Stock with an aggregate liquidation preference not exceeding the amount of Indebtedness of the Company held by such Finance Subsidiary; provided that the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements have been filed with the Commission pursuant to the covenant described below under the caption “Reports” immediately preceding the date on which such Preferred Stock is issued would have been at least 2.0 to 1, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as if such Preferred Stock had been issued at the beginning of such four-quarter period;

(xi) the incurrence of Indebtedness by Foreign Subsidiaries in an aggregate principal amount (or accreted value, as applicable) at any time outstanding and incurred in reliance upon this clause (xi) not to exceed $100.0 million;

(xii) the Guarantee by any Restricted Subsidiary of Indebtedness of the Company or a Restricted Subsidiary that was permitted to be incurred by another provision of this covenant;

(xiii) Acquired Debt or Acquired Disqualified Stock; provided that such Indebtedness or Disqualified Stock was not incurred in connection with or in contemplation of such person’s becoming a Restricted Subsidiary; and provided further that immediately after giving effect to such incurrence, the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements have been filed with the Commission pursuant to the covenant described below under the caption “Reports” immediately preceding the date of such incurrence would have been at least 2.0 to 1, determined on a pro forma basis;

(xiv) Indebtedness or Disqualified Stock of a Specified Joint Venture or a Subsidiary thereof existing at the time such Specified Joint Venture first becomes a Restricted Subsidiary; provided that such Indebtedness or Disqualified Stock was not incurred in connection with or in contemplation of such Specified Joint Venture’s becoming a Restricted Subsidiary; and provided further that immediately after giving effect to such Specified Joint Venture’s becoming a Restricted Subsidiary, the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements have been filed with the Commission pursuant to the covenant described below under the caption “Reports” immediately preceding the date on which such Specified Joint Venture became a Restricted Subsidiary would have been, determined on a pro forma basis, (i) at least 2.0 to 1 or (ii) equal to or greater than it was immediately prior to such Specified Joint Venture’s becoming a Restricted Subsidiary;

(xv) with respect to any Specified Joint Venture that becomes a Restricted Subsidiary, the incurrence by such Specified Joint Venture of Indebtedness under any revolving credit facility in an aggregate principal

58

amount at any time outstanding not to exceed the aggregate principal amount of committed financing under all revolving credit facilities of such Specified Joint Venture as in effect on May 17, 1999; and

(xvi) the incurrence by the Company or any Subsidiary Guarantor of Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding and incurred in reliance on this clause (xvi) not to exceed $25.0 million.

For purposes of determining compliance with this covenant, in the event that an item of Indebtedness or Preferred Stock meets the criteria of more than one of the categories of permitted Indebtedness described in clauses (i) through (xvi) above or is entitled to be incurred pursuant to the first paragraph of this covenant, the Company shall, in its sole discretion, classify such item of Indebtedness or Preferred Stock in any manner that complies with this covenant, and such Indebtedness or Preferred Stock will be treated as having been incurred pursuant to the clauses or the first paragraph hereof, as the case may be, designated by the Company. The amount of Indebtedness issued at a price which is less than the principal amount thereof shall be equal to the amount of the liability in respect thereof determined in accordance with GAAP.

Liens

The indenture provides that the Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, assume or suffer to exist any Lien (except Permitted Liens) on any asset now owned or hereafter acquired, or any income or profits therefrom, unless all payments due under the indenture and the new notes or the Subsidiary Guarantees are secured on an equal and ratable basis with the obligations so secured (or, if such obligations are subordinated by their terms to the new notes or the Subsidiary Guarantees, prior to the obligations so secured) until such time as such obligations are no longer so secured.

Dividend and Other Payment Restrictions Affecting Subsidiaries and Joint Ventures

The indenture provides that the Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to exist or become effective any restriction on the ability of any Restricted Subsidiary to:

(i)    (a) pay dividends or make any other distributions to the Company or any of its Restricted Subsidiaries

(1) on its Capital Stock, or

(2) with respect to any other interest or participation in, or measured by, its profits, or

(b) pay any Indebtedness owed to the Company or any of its Restricted Subsidiaries;

(ii) make loans or advances to the Company or any of its Restricted Subsidiaries; or

(iii) transfer any of its properties or assets to the Company or any of its Restricted Subsidiaries;

except for such restrictions existing under or by reason of:

(a) existing agreements as in effect on the Issue Date;

(b) Indebtedness permitted by the indenture to be incurred containing restrictions on the ability of Restricted Subsidiaries to consummate transactions of the types described in clause (i), (ii) or (iii) above not materially more restrictive than those contained in the indenture;

(c) the indenture;

(d) applicable law;

(e) existing restrictions with respect to a person acquired by the Company or any of its Restricted Subsidiaries (except to the extent such restrictions were put in place in connection with or in contemplation

59

of such acquisition), which restrictions are not applicable to any person, or the properties or assets of any person, other than the person, or the property or assets of the person, so acquired;

(f) customary non-assignment provisions in leases and other agreements entered into in the ordinary course of business;

(g) construction loans and purchase money obligations (including Capital Lease Obligations) for property acquired in the ordinary course of business that impose restrictions of the nature described in clause (iii) above on the property so constructed or acquired;

(h) in the case of clause (iii) above, restrictions contained in security agreements or mortgages securing Indebtedness of a Restricted Subsidiary to the extent such restrictions restrict the transfer of the property subject to such security agreements or mortgages;

(i) a Permitted Refinancing, provided that the restrictions contained in the agreements governing such Permitted Refinancing are not materially more restrictive, taken as a whole, than those contained in the agreements governing the Indebtedness being refinanced (as conclusively evidenced by a resolution of the Board of Directors);

(j) customary restrictions on a Finance Subsidiary imposed in such Finance Subsidiary’s organizational documents or by the terms of its Preferred Stock;

(k) any restriction with respect to shares of Capital Stock of a Restricted Subsidiary imposed pursuant to an agreement entered into for the sale or disposition of such shares of Capital Stock or any restriction with respect to the assets of a Restricted Subsidiary imposed pursuant to an agreement entered into for the sale or disposition of such assets or all or substantially all the Capital Stock of such Restricted Subsidiary pending the closing of such sale or disposition;

(l) in the case of any Restricted Subsidiary that is a Joint Venture, customary restrictions on such Restricted Subsidiary contained in its joint venture agreement, which restrictions are consistent with the past practice of the Company and its Restricted Subsidiaries (as conclusively evidenced by a resolution of the Board of Directors);

(m) existing restrictions with respect to a Specified Joint Venture or the property or assets thereof or a Subsidiary of a Specified Joint Venture or the property or assets thereof, in each case, at the time such Specified Joint Venture first becomes a Restricted Subsidiary (except to the extent such restrictions were put in place in connection with or in contemplation of such Specified Joint Venture becoming a Restricted Subsidiary), which restrictions are not applicable to any person, or the properties or assets of any person, other than such Specified Joint Venture or the property or assets thereof or a Subsidiary of such Specified Joint Venture or the property or assets thereof; and

(n) the Existing Credit Facility and related documentation as the same is in effect on the Issue Date and as amended, modified, extended, renewed, refunded, refinanced, restated or replaced from time to time; provided that the Existing Credit Facility and related documentation as so amended, modified, extended, reviewed, refunded, refinanced, restated or replaced is not materially more restrictive, taken as a whole, as to the matters enumerated above than the Existing Credit Facility and related documentation as in effect on the Issue Date (as conclusively evidenced by a resolution of the Board of Directors).

For purposes of determining compliance with this covenant, in the event that a restriction meets the criteria of more than one of the categories of permitted restrictions described in clauses (a) through (n) above, the Company shall, in its sole discretion, classify such restriction in any manner that complies with this covenant, and such restriction will be treated as existing pursuant to the clauses designated by the Company.

In addition, the indenture provides that the Company will use best efforts (consistent with its contractual obligations and fiduciary duties to any Joint Venture, in each case, as in effect on the Issue Date) not to permit any of its Joint Ventures that are not Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to exist or become effective any restriction on the ability of such Joint Venture to:

60

(i) (a) pay dividends or make any other distributions to the Company or any of its Restricted Subsidiaries

(1) on its Capital Stock or

(2) with respect to any other interest or participation in, or measured by, its profits or

(b) pay any Indebtedness owed to the Company or any of its Restricted Subsidiaries;

(ii) make loans or advances to the Company or any of its Restricted Subsidiaries; or

(iii) transfer any of its properties or assets to the Company or any of its Restricted Subsidiaries;

except for such restrictions existing under or by reason of:

(a) such Joint Venture’s joint venture agreement or its credit facility (provided that in each case such restrictions are consistent with the past practice of the Company);

(b) in the case of any Joint Venture existing on the Issue Date, its existing agreements as in effect on the date of the indenture and as amended, modified, extended, restated or replaced from time to time;

provided that no such amendment, modification, extension, restatement or replacement results in agreements that are materially more restrictive, taken as a whole, as to the matters enumerated above than the existing agreements as in effect on the date of the indenture (as conclusively evidenced by a resolution of the Board of Directors);

(c) in the case of LCR, any instrument governing its Indebtedness; and

(d) the restrictions described in clauses (d), (e), (f), (g), (h), (j), (k) and (n) of the first sentence of this covenant (assuming that references in clauses (h) and (k) to Restricted Subsidiary were references to a Joint Venture).

Sale and Leaseback Transactions

The indenture provides that the Company will not, and will not permit any of its Restricted Subsidiaries to, enter into any Sale and Leaseback Transaction; provided that the Company or any Restricted Subsidiary may enter into a Sale and Leaseback Transaction if:

(a) the Company or such Restricted Subsidiary, as the case may be, could have

(i) incurred Indebtedness in an amount equal to the Attributable Debt relating to such Sale and Leaseback Transaction pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of the covenant described under the caption “—Incurrence of Indebtedness and Issuance of Preferred Stock” (whether or not such covenant has ceased to be otherwise in effect as described below under “Limitation on Applicability of Certain Covenants if New Notes Rated Investment Grade”) and

(ii) incurred a Lien to secure such Indebtedness pursuant to the covenant described under the caption “—Liens” without securing the new notes; and

(b) the gross cash proceeds of such Sale and Leaseback Transaction are at least equal to the fair market value (as conclusively determined by the Board of Directors) of the property that is the subject of such Sale and Leaseback Transaction.

Line of Business

The indenture provides that the Company will not, and will not permit any of its Restricted Subsidiaries to, engage in any business other than Permitted Businesses, except to such extent as would not be material to the Company and its Subsidiaries taken as a whole.

61

Merger, Consolidation or Sale of Assets

The indenture provides that the Company may not consolidate or merge with or into (whether or not the Company is the surviving corporation), or sell, assign, transfer, convey or otherwise dispose of all or substantially all its assets in one or more related transactions, to another corporation, person or entity unless: (i) the Company is the surviving corporation or the entity or the person formed by or surviving any such consolidation or merger (if other than the Company) or to which such sale, assignment, transfer, conveyance or other disposition shall have been made is a corporation organized or existing under the laws of the United States, any state thereof or the District of Columbia; (ii) the corporation formed by or surviving any such consolidation or merger (if other than the Company) or the corporation to which such sale, assignment, transfer, lease, conveyance or other disposition shall have been made assumes all the Obligations of the Company under the new notes, the indenture and the Security Documents pursuant to a supplemental indenture in form reasonably satisfactory to the Trustee; (iii) immediately after such transaction no Default or Event of Default exists; and (iv) the Company or the entity or person formed by or surviving any such consolidation or merger (if other than the Company), or to which such sale, assignment, transfer, lease, conveyance or other disposition shall have been made (A) will have a Consolidated Net Worth immediately after the transaction equal to or greater than the Consolidated Net Worth of the Company immediately preceding the transaction and (B) except with respect to a consolidation or merger of the Company with or into a person that has no outstanding Indebtedness, will, at the time of such transaction and after giving pro forma effect thereto as if such transaction had occurred at the beginning of the applicable four-quarter period, be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of the covenant in the indenture described above under the caption “—Incurrence of Indebtedness and Issuance of Preferred Stock.” The foregoing shall not prohibit the merger or consolidation of a Wholly Owned Restricted Subsidiary with the Company; provided that, in connection with any such merger or consolidation, no consideration (other than common stock in the surviving person or the Company) shall be issued or distributed to the stockholders of the Company.

The sale, assignment, transfer, lease, conveyance or other disposition by the Company of all or substantially all its property or assets taken as a whole to one or more of the Company’s Subsidiaries shall not relieve the Company from its obligations under the indenture and the new notes. In addition, the indenture provides that the Company will not lease all or substantially all its assets to another person.

Transactions With Affiliates

The indenture provides that the Company will not, and will not permit any of its Restricted Subsidiaries to, sell, lease, transfer or otherwise dispose of any of its properties or assets to, or purchase any property or assets from, or enter into or make any contract, agreement, understanding, loan, advance or Guarantee with, or for the benefit of, any Affiliate (each of the foregoing, an Affiliate Transaction), unless (i) such Affiliate Transaction is on an arm’s-length basis and (ii) the Company delivers to the Trustee (a) with respect to any Affiliate Transaction involving aggregate consideration in excess of $10 million, a resolution of the Board of Directors set forth in an officers’ certificate certifying that such Affiliate Transaction complies with clause (i) above and that such Affiliate Transaction has been approved by a majority of the disinterested members of the Board of Directors and (b) with respect to any Affiliate Transaction involving aggregate consideration in excess of $25 million, an opinion as to the fairness to the Company or such Restricted Subsidiary of such Affiliate Transaction from a financial point of view issued by an investment banking firm of national standing; provided that:

(i) transactions or payments pursuant to any employment arrangements or employee, officer or director benefit plans or arrangements entered into by the Company or any of its Restricted Subsidiaries in the ordinary course of business;

(ii) transactions between or among the Company and/or its Restricted Subsidiaries;

(iii) any Restricted Payment permitted by the provisions of the indenture described under the caption “—Restricted Payments,” of the type described in clause (i) or (ii) of the first paragraph thereof;

62

(iv) customary loans, advances, fees and compensation paid to, and indemnity provided on behalf of, officers, directors, employees or consultants of the Company or any of its Restricted Subsidiaries;

(v) transactions entered into on an arm’s-length basis in the ordinary course of business between the Company or any of its Restricted Subsidiaries and any Joint Venture;

(vi) sales (including a sale in exchange for a promissory note of or Equity Interest in such Accounts Receivable Subsidiary) of accounts receivable and the provision of billing, collection and other services in connection therewith, in each case, to an Accounts Receivable Subsidiary in connection with any Receivables Facility; and

(vii) transactions pursuant to any contract or agreement in effect on the date of the indenture as the same may be amended, modified or replaced from time to time so long as any such contract or agreement as so amended, modified or replaced is, taken as a whole, no less favorable to the Company and its Restricted Subsidiaries than the contract or agreement as in effect on the date of the indenture (as conclusively evidenced by a resolution of the Board of Directors);

in each case, shall not be deemed to be Affiliate Transactions and therefore not subject to the requirements of clauses (i) and (ii) of the initial paragraph above.

Limitations on Issuances of Guarantees of Indebtedness by Subsidiaries

The indenture provides that the Company will not permit any Restricted Subsidiary that is not a Subsidiary Guarantor, directly or indirectly, to Guarantee or secure the payment of any other Indebtedness of the Company or any of its Restricted Subsidiaries (except Indebtedness of such Restricted Subsidiary or a Restricted Subsidiary of such Restricted Subsidiary) unless (i) such Restricted Subsidiary simultaneously executes and delivers a supplemental indenture to the indenture providing for the Guarantee of the payment of the new notes by such Restricted Subsidiary and (ii) such Restricted Subsidiary waives and agrees not to in any manner whatsoever claim or take the benefit or advantage of, either (i) any right to receive payment by way of subrogation against the Company or against any direct or indirect security for such obligation, or any other right to be reimbursed, indemnified or exonerated by or for the account of the Company in respect thereof or (ii) any right to receive payment, in the nature of contribution or for any other reason, from any other Subsidiary Guarantor with respect to such payment, in each case so long as any amount payable by the Company under the indenture or under the new notes remains unpaid; provided that this paragraph shall not be applicable to (x) any Guarantee of any Restricted Subsidiary that existed at the time such person became a Restricted Subsidiary and was not incurred in connection with, or in contemplation of, such person’s becoming a Restricted Subsidiary, (y) Guarantees of Indebtedness of a Restricted Subsidiary that is a Foreign Subsidiary by a Restricted Subsidiary that is a Foreign Subsidiary or (z) the granting of Liens by a Joint Venture Subsidiary to secure Indebtedness under the Existing Credit Facility, the Existing Senior Secured Notes and the new notes. If the new notes are (A) pari passu with the Guaranteed Indebtedness, then the Subsidiary Guarantee shall be pari passu with, or senior to, the guarantee of such Guaranteed Indebtedness or (B) senior to the Guaranteed Indebtedness, then the Subsidiary Guarantee shall be senior to the guarantee of such Guaranteed Indebtedness at least to the extent that the new notes are senior to such Guaranteed Indebtedness.

Notwithstanding the foregoing, each Subsidiary Guarantee by a Restricted Subsidiary will provide by its terms that it shall be automatically and unconditionally released and discharged upon (i) any sale, exchange or transfer, to any person not an Affiliate of the Company, of all the Company’s and each Restricted Subsidiary’s Capital Stock in such Restricted Subsidiary (which sale, exchange or transfer is not prohibited by the indenture), (ii) the release or discharge of the Guarantee which resulted in the creation of such Subsidiary Guarantee (or, in the case of the Subsidiary Guarantee of ARCO Chemical Technology, Inc., ARCO Chemical Technology, L.P. or Lyondell Chemical Nederland, Ltd. issued on the Issue Date, the release or discharge of its respective Guarantee of Indebtedness under the Existing Credit Facility and the Existing Senior Secured Notes), except a discharge or release by or as a result of payment under such Guarantee and (iii) the designation of such Restricted Subsidiary as an Unrestricted Subsidiary in accordance with the terms of the indenture.

63

Accounts Receivable Facilities

The indenture provides that the Company may, and any of its Restricted Subsidiaries may, sell (including a sale in exchange for a promissory note of or an Equity Interest in such Accounts Receivable Subsidiary) at any time and from time to time, accounts receivable to any Accounts Receivable Subsidiary; provided that the aggregate consideration received in each such sale is at least equal to the aggregate fair market value of the receivables sold.

No Amendment to Subordination Provisions

The indenture provides that the Company will not amend, modify or alter the Senior Subordinated Note Indenture in any way that would amend the subordination provisions of the Senior Subordinated Note Indenture or any of the defined terms used therein in a manner that would be adverse to the holders of the new notes.

Limitation of Applicability of Certain Covenants if New Notes Rated Investment Grade

Notwithstanding the foregoing, the Company’s and its Restricted Subsidiaries’ obligations to comply with the provisions of the indenture described above under the captions “Certain Covenants—Restricted Payments,” “Certain Covenants—Incurrence of Indebtedness and Issuance of Preferred Stock,” “Certain Covenants—Dividend and Other Payment Restrictions Affecting Subsidiaries and Joint Ventures,” “Certain Covenants—Line of Business,” “Certain Covenants—Limitations on Issuances of Guarantees of Indebtedness by Subsidiaries,” “Certain Covenants—Transactions with Affiliates,” “Certain Covenants—Accounts Receivable Facilities” and “Repurchase at the Option of Holders—Asset Sales” will terminate and cease to have any further effect from and after the first date when the new notes are rated Investment Grade.

Reports

The indenture provides that, whether or not required by the rules and regulations of the Commission, so long as any new notes issued thereunder are outstanding, the Company will furnish to the Trustee and the holders of new notes (i) all quarterly and annual financial information that would be required to be contained in a filing with the Commission on Forms 10-Q and 10-K if the Company were required to file such Forms, including “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and, with respect to the annual information only, a report thereon by the Company’s certified independent accountants and (ii) all current reports that would be required to be filed with the Commission on Form 8-K if the Company were required to file such reports. In addition, whether or not required by the rules and regulations of the Commission, the Company will file a copy of all such information and reports with the Commission for public availability and make such information available to securities analysts and prospective investors upon request.

In addition, the Company has agreed that, for so long as any new notes remain outstanding, it will furnish to the holders and to securities analysts and prospective investors, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.

Events of Default and Remedies

The indenture provides that each of the following constitutes an Event of Default with respect to the new notes:

(i) default for 30 days in the payment when due of interest on the new notes;

(ii) default in payment when due of the principal of or premium, if any, on the new notes at maturity or otherwise;

(iii) failure by the Company to comply with the provisions described under the captions “Repurchase at the Option of Holders—Change of Control,” “Repurchase at the Option of Holders—Asset Sales” or “Certain Covenants—Merger, Consolidation or Sale of Assets”;

64

(iv) failure by the Company for 60 days after notice by the Trustee or holders of at least 25% in principal amount of the then outstanding new notes to comply with any of its other agreements in the indenture or the new notes;

(v) any default under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness for money borrowed by the Company or any of its Significant Subsidiaries (or any Indebtedness for money borrowed Guaranteed by the Company or any of its Significant Subsidiaries if the Company or a Significant Subsidiary does not perform its payment obligations under such Guarantee within any grace period provided for in the documentation governing such Guarantee) and, whether such Indebtedness or Guarantee exists on the date of the indenture or is thereafter created, which default (a) constitutes a Payment Default or (b) results in the acceleration of such Indebtedness prior to its Stated Maturity, and in each case, the principal amount of any such Indebtedness, together with the principal amount of any other such Indebtedness under which there has been a Payment Default or that has been so accelerated, aggregates $50 million or more;

(vi) failure by the Company or any of its Significant Subsidiaries to pay a final judgment or final judgments aggregating in excess of $50 million, which judgment or judgments are not paid, discharged or stayed for a period of 60 days;

(vii) certain events of bankruptcy or insolvency with respect to the Company or any of its Significant Subsidiaries;

(viii) except as permitted by the indenture, any Subsidiary Guarantee shall be held in any judicial proceeding to be unenforceable or invalid or shall cease for any reason to be in full force and effect or any Subsidiary Guarantor, or any person acting on behalf of any Subsidiary Guarantor, shall deny or disaffirm its obligations under the Subsidiary Guarantees; and

(ix) any of the Security Documents ceases to be in full force and effect, or any of the Security Documents ceases to give the holders of the new notes any of the Liens purported to be created thereby, or any of the Security Documents is declared null and void or the Company or any Restricted Subsidiary denies in writing that it has any further liability under any Security Document or gives written notice to such effect (in each case other than in accordance with the terms of the indenture or the terms of the Existing Credit Facility or the Security Documents (including the cessation of effectiveness of any Security Document in connection with the release of all collateral covered thereby in accordance with the terms of the indenture, the Existing Credit Facility, the Existing Senior Secured Note Indentures and such Security Document) or unless waived by the requisite lenders under the Existing Credit Facility if, after that waiver, the Company is in compliance with the covenant described under “Security”); provided that if a failure of the sort described in this clause (ix) is susceptible of cure, no Event of Default shall arise under this clause (ix) with respect thereto until 30 days after notice of such failure shall have been given to the Company by the Trustee or the holders of at least 25% in principal amount of the then outstanding new notes issued under the indenture.

If an Event of Default (other than an Event of Default specified in clause (vii) above that occurs with respect to the Company or any Subsidiary Guarantor) occurs and is continuing under the indenture, the Trustee or the holders of at least 25% in aggregate principal amount of the new notes then outstanding, by written notice to the Company (and to the Trustee if such notice is given by the holders (the Acceleration Notice)), may, and the Trustee at the request of such holders shall, declare the principal of and premium, if any, and accrued interest on such new notes to be immediately due and payable. Upon a declaration of acceleration, such principal, premium, if any, and accrued interest shall be immediately due and payable. If an Event of Default specified in clause (vii) above occurs with respect to the Company or any Subsidiary Guarantor, the principal of and premium, if any, and accrued interest and liquidated damages, if any, on the new notes then outstanding shall ipso facto become and be immediately due and payable without any declaration or other act on the part of the Trustee or any holder. The holders of at least a majority in principal amount of the outstanding new notes, by written notice to the Company and to the Trustee, may waive all past defaults and rescind and annul a declaration of acceleration and its consequences under the new notes if (i) all existing Events of Default, other than the nonpayment of the principal

65

of and premium, if any, and interest and liquidated damages, if any, on such new notes that have become due solely by such declaration of acceleration, have been cured or waived and (ii) the rescission would not conflict with any judgment or decree of a court of competent jurisdiction. For information as to the waiver of defaults, see “Modification and Waiver.”

The holders of at least a majority in aggregate principal amount of the outstanding new notes may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on the Trustee. However, the Trustee may refuse to follow any direction that conflicts with law or the indenture, that may involve the Trustee in personal liability, or that the Trustee determines in good faith may be unduly prejudicial to the rights of holders of the new notes not joining in the giving of such direction and may take any other action it deems proper that is not inconsistent with any such direction received from holders of the new notes. A holder may not pursue any remedy with respect to the indenture or the new notes unless: (i) the holder gives the Trustee written notice of a continuing Event of Default; (ii) the holders of at least 25% in aggregate principal amount of outstanding new notes make a written request to the Trustee to pursue the remedy; (iii) such holder or holders offer the Trustee indemnity satisfactory to the Trustee against any costs, liability or expense; (iv) the Trustee does not comply with the request within 60 days after receipt of the request and the offer of indemnity; and (v) during such 60-day period, the holders of at least a majority in aggregate principal amount of the outstanding new notes do not give the Trustee a direction that is inconsistent with the request. However, such limitations do not apply to the right of any holder of a new note to receive payment of the principal of or premium, if any, or interest on such new note or to bring suit for the enforcement of any such payment, on or after the due date expressed in such new notes, which right shall not be impaired or affected without the consent of the holder.

The indenture requires certain officers of the Company to certify, on or before a date not more than 120 days after the end of each fiscal year, that they have conducted or supervised a review of the activities of the Company and its Restricted Subsidiaries and the Company’s and its Restricted Subsidiaries’ performance under the indenture and that, to the best of such officers’ knowledge, based upon such review, the Company has fulfilled all obligations thereunder or, if there has been a default in the fulfillment of any such obligation, specifying each such default and the nature and status thereof. The Company will also be obligated to notify the Trustee promptly of any default or defaults in the performance of any covenants or agreements under the indenture.

Modification and Waiver

Modifications and amendments of the indenture may be made by the Company, the Subsidiary Guarantors and the Trustee with the consent of the holders of not less than a majority in aggregate principal amount of the outstanding new notes; provided that no such modification or amendment may, without the consent of each holder affected thereby, (i) change the Stated Maturity of the principal of, or any installment of interest on, any new note, (ii) reduce the principal amount of or premium, if any, or interest on any new note, (iii) reduce any amount payable on redemption of the new notes or upon the occurrence of an Event of Default or reduce the Change of Control Payment or the amount to be paid in connection with an Asset Sale Offer, (iv) change the place or currency of payment of principal of or premium, if any, or interest on any new note, (v) impair the right to institute suit for the enforcement of any payment on or after the Stated Maturity (or, in the case of a redemption, on or after the Redemption Date) of any new note, (vi) reduce the above-stated percentage of outstanding new notes the consent of whose holders is necessary to modify or amend the indenture, (vii) waive a default in the payment of principal of or premium, if any, or interest on the new notes (except as set forth in the penultimate sentence of the second paragraph under the caption “Events of Default and Remedies”), (viii) reduce the percentage or aggregate principal amount of outstanding new notes the consent of whose holders is necessary for waiver of compliance with certain provisions of the indenture or for waiver of certain defaults, (ix) modify or change any provision of the indenture affecting the ranking of the new notes or the Subsidiary Guarantees in a manner adverse to the holders of the new notes, (x) release any Subsidiary Guarantor from any of its obligations under its Subsidiary Guarantee or the indenture other than in accordance with the provisions of the indenture, or amend or modify any provision relating to such release or (xi) directly or indirectly release the Liens created by

66

the Security Documents on all or substantially all the Collateral (other than in accordance with the terms of the Existing Credit Facility or the Security Documents or with the consent of the requisite lenders under the Existing Credit Facility if, after such consent, the Company is in compliance with the covenant described under “Security”).

Neither the Company nor any of its Subsidiaries or Affiliates will, directly or indirectly, pay or cause to be paid any consideration, whether by way of interest, fee or otherwise, to any holder of any new notes for or as an inducement to any consent, waiver or amendment of any of the terms or provisions of the indenture or the new notes unless such consideration is offered to be paid or agreed to be paid to all holders of such new notes that consent, waive or agree to amend such term or provision in the time frame set forth in the solicitation documents relating to such consent, waiver or agreement.

Defeasance

Defeasance and Discharge

The indenture provides that the Company will be deemed to have paid and will be discharged from any and all obligations in respect of the new notes (and any Subsidiary Guarantor will be discharged from any and all obligations in respect of its Subsidiary Guarantee) on the 123rd day after the deposit referred to below, and the provisions of the indenture will no longer be in effect with respect to such new notes and such Subsidiary Guarantees (except for, among other matters, certain obligations to register the transfer or exchange of such new notes, to replace stolen, lost or mutilated new notes, to maintain paying agencies and to hold monies for payment in trust) if, among other things, (A) the Company has deposited with the Trustee, in trust, money and/or U.S. Government obligations that through the payment of interest and principal in respect thereof in accordance with their terms will provide money in an amount sufficient to pay the principal of and premium, if any, and accrued interest on such new notes on the Stated Maturity of such payments in accordance with the terms of the indenture and such new notes to redemption or maturity, as the case may be, (B) the Company has delivered to the Trustee (i) either (x) an opinion of counsel to the effect that holders will not recognize income, gain or loss for federal income tax purposes as a result of the Company’s exercise of its option under this “Defeasance” provision and will be subject to federal income tax on the same amount and in the same manner and at the same times as would have been the case if such deposit, defeasance and discharge had not occurred, which opinion of counsel must be based upon (and accompanied by a copy of) a ruling of the Internal Revenue Service to the same effect unless there has been a change in applicable federal income tax law after the Issue Date such that a ruling is no longer required or (y) a ruling directed to the Trustee or the Company received from the Internal Revenue Service to the same effect as the aforementioned opinion of counsel and (ii) an opinion of counsel to the effect that the creation of the defeasance trust does not violate the Investment Company Act of 1940 and after the passage of 123 days following the deposit, the trust fund will not be subject to the effect of Section 547 of the United States Bankruptcy Code or Section 15 of the New York Debtor and Creditor Law, or any comparable provision or applicable law, (C) immediately after giving effect to such deposit on a pro forma basis, no Event of Default, or event that after the giving of notice or lapse of time or both would become an Event of Default, shall have occurred and be continuing on the date of such deposit or during the period ending on the 123rd day after the date of such deposit, and such deposit shall not result in a breach or violation of, or constitute a default under, any other agreement or instrument to which the Company is a party or by which the Company is bound and (D) if at such time such new notes are listed on a national securities exchange, the Company has delivered to the Trustee an opinion of counsel to the effect that such new notes will not be delisted as a result of such deposit, defeasance and discharge.

Defeasance of Certain Covenants and Certain Events of Default

The indenture further provides that the provisions of the indenture will no longer be in effect with respect to the provision described under “Security,” clause (iv) under “Certain Covenants—Merger, Consolidation and Sale of Assets” and all the covenants described under “Certain Covenants,” and clauses (iii) and (iv) under “Events of

67

Default” with respect to such covenants and clause (iv) under “Certain Covenants—Merger, Consolidation or Sale of Assets,” and clauses (v), (vi) and (ix) under “Events of Default” shall be deemed not to be Events of Default, upon, among other things, the deposit with the Trustee, in trust, of money and/or U.S. Government obligations that through the payment of interest and principal in respect thereof in accordance with their terms will provide money in an amount sufficient to pay the principal of and premium, if any, and accrued interest on such new notes on the Stated Maturity of such payments in accordance with the terms of the indenture and such new notes, the satisfaction of the provisions described in clauses (B)(ii), (C) and (D) of the preceding paragraph and the delivery by the Company to the Trustee of an opinion of counsel to the effect that, among other things, the holders will not recognize income, gain or loss for federal income tax purposes as a result of such deposit and defeasance of certain covenants and Events of Default and will be subject to federal income tax on the same amount and in the same manner and at the same times as would have been the case if such deposit and defeasance had not occurred.

Defeasance and Certain Other Events of Default

In the event the Company exercises its option to omit compliance with certain covenants and provisions of the indenture with respect to the new notes issued thereunder as described in the immediately preceding paragraph and such new notes are declared due and payable because of the occurrence of an Event of Default that remains applicable, the amount of money and/or U.S. Government obligations on deposit with the Trustee will be sufficient to pay amounts due on such new notes at the time of their Stated Maturity but may not be sufficient to pay amounts due on such new notes at the time of the acceleration resulting from such Event of Default. However, the Company will remain liable for such payments.

No Personal Liability of Directors, Officers, Employees and Stockholders

No director, officer, employee, incorporator, stockholder or other holder of Equity Interests of the Company or the Subsidiary Guarantors, as such, shall have any liability for any obligations of the Company or the Subsidiary Guarantors under the new notes, the Subsidiary Guarantees, the indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each holder of new notes by accepting a new note waives and releases all such liability. The waiver and release are part of the consideration for the issuance of the new notes. Such waiver may not be effective to waive liabilities under the federal securities laws, and it is the view of the Commission that such a waiver is against public policy.

Transfer and Exchange

A holder may transfer or exchange new notes in accordance with the indenture. The Registrar and the Trustee may require a holder, among other things, to furnish appropriate endorsements and transfer documents, and the Company may require a holder to pay any taxes and fees required by law or permitted by the indenture.

The registered holder of a new note will be treated as the owner of it for all purposes.

Concerning the Trustee

The indenture contains certain limitations on the rights of the Trustee, should it become a creditor of Lyondell, to obtain payment of claims in certain cases, or to realize on certain property received in respect of any such claim as security or otherwise. The Trustee will be permitted to engage in other transactions; however, if it acquires any conflicting interest it must eliminate such conflict within 90 days, apply to the Commission for permission to continue or resign.

The holders of a majority in principal amount of the then outstanding new notes issued under the indenture will have the right to direct the time, method and place of conducting any proceeding for exercising any remedy available to the Trustee, subject to certain exceptions. The indenture provides that in case an Event of Default

68

shall occur (which shall not be cured), the Trustee will be required, in the exercise of its power, to use the degree of care of a prudent man in the conduct of his own affairs. Subject to such provisions, the Trustee will not be under any obligation to exercise any rights or powers under the indenture at the request of any holder of new notes, unless such holder shall have offered to the Trustee security and indemnity satisfactory to it against any loss, liability or expense.

The Bank of New York will act as Trustee for the new notes and is also the trustee for the Existing Senior Secured Notes and the Senior Subordinated Notes, the transfer agent for the Company’s stock and a lender under its credit facility.

Additional Information

Anyone who receives this prospectus may obtain a copy of the indenture, the Security Documents and the registration rights agreement without charge by writing to the Company at 1221 McKinney, Suite 700, Houston, Texas 77010, Attention: Investor Relations.

Book-Entry, Delivery and Form

The certificates representing the new notes will be issued in fully registered form without interest coupons. Ownership of beneficial interests in a Global Note will be limited to persons who have accounts with the Depository Trust Company (DTC) (participants) or persons who hold interests through participants. Ownership of beneficial interests in a Global Note will be shown on, and the transfer of that ownership will be effected only through, records maintained by DTC or its nominee (with respect to interests of participants) and the records of participants (with respect to interests of persons other than participants).

So long as DTC, or its nominee, is the registered owner or holder of a Global Note, DTC or such nominee, as the case may be, will be considered the sole owner or holder of the notes represented by such Global Note for all purposes under the indenture and the notes. No beneficial owner of an interest in a Global Note will be able to transfer that interest except in accordance with DTC’s applicable procedures, in addition to those provided for under the indenture.

Payments of the principal of, and interest on, a Global Note will be made to DTC or its nominee, as the case may be, as the registered owner thereof. None of the Company, the Subsidiary Guarantors, the Trustee or any paying agent will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests in a Global Note or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests.

The Company expects that DTC or its nominee, upon receipt of any payment of principal or interest in respect of a Global Note, will credit participants’ accounts with payments in amounts proportionate to their respective beneficial interests in the principal amount of such Global Note as shown on the records of DTC or its nominee. The Company also expects that payments by participants to owners of beneficial interests in such Global Note held through such participants will be governed by standing instructions and customary practices, as is now the case with securities held for the accounts of customers registered in the names of nominees for such customers. Such payments will be the responsibility of such participants.

Transfers between participants in DTC will be effected in the ordinary way in accordance with DTC rules and will be settled in same-day funds.

The Company expects that DTC will take any action permitted to be taken by a holder of new notes (including the presentation of new notes for exchange as described below) only at the direction of one or more participants to whose account the DTC interest in a Global Note is credited and only in respect of such portion of the aggregate principal amount of new notes as to which such participant or participants has or have given such

69

direction. However, if there is an Event of Default under the new notes, DTC will exchange the applicable Global Note for certificated notes, which it will distribute to its participants and which may be legended as set forth under the heading “Transfer Restrictions.”

The Company understands that DTC is:

• a limited purpose trust company organized under the laws of the State of New York;

• a “banking organization” within the meaning of New York Banking Law;

• a member of the Federal Reserve System;

• a “clearing corporation” within the meaning of the Uniform Commercial Code; and

• a “Clearing Agency” registered pursuant to the provisions of Section 17A of the Exchange Act.

DTC was created to hold securities for its participants and facilitate the clearance and settlement of securities transactions between participants through electronic book-entry changes in accounts of its participants, thereby eliminating the need for physical movement of certificates. Participants include:

• securities brokers and dealers;

• banks, trust companies; and

• clearing corporations and certain other organizations.

Indirect access to the DTC system is available to others such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a participant, either directly or indirectly (indirect participants).

Although DTC is expected to follow the foregoing procedures in order to facilitate transfers of interests in a Global Note among participants of DTC, it is under no obligation to perform or continue to perform such procedures, and such procedures may be discontinued at any time. None of the Company, the Subsidiary Guarantors or the Trustee will have any responsibility for the performance by DTC or its participants or indirect participants of their respective obligations under the rules and procedures governing their operations.

If DTC is at any time unwilling or unable to continue as a depository for the Global Notes and a successor depositary is not appointed by the Company within 90 days, the Company will issue certificated new notes, in exchange for the Global Notes. Holders of an interest in a Global Note may receive certificated new notes, at the option of the Company, in accordance with the DTC’s rules and procedures in addition to those provided for under the indenture. Beneficial interests in Global Notes held by any direct or indirect participant may also be exchanged for certificated new notes upon request to DTC, by such direct participant (for itself or on behalf of an indirect participant), to the Trustee in accordance with customary DTC procedures.

The information in this section concerning DTC and its book-entry systems has been obtained from sources that the Company believes to be reliable, but the Company takes no responsibility for the accuracy thereof.

Same Day Settlement and Payment

The indenture will require that payments in respect of the new notes represented by the Global Notes (including principal, premium, if any, interest and liquidated damages, if any) be made by wire transfer of immediately available same day funds to the accounts specified by the holder of interests in such Global Notes. With respect to certificated new notes, the Company will make all payments of principal, premium, if any, interest and liquidated damages, if any, at the agency or office of the Company maintained for such purpose in the City and the State of New York or, at the Company’s option, by mailing a check to each such holder’s registered address.

70

The new notes represented by the Global Notes are expected to be eligible to trade in the PORTAL market and to trade in DTC’s Same-Day Funds Settlement System, and any permitted secondary market trading activity in the new notes will, therefore, be required by DTC to be settled in immediately available funds. The Company expects that secondary trading in any certificated new notes will also be settled in immediately available funds.

Registration Rights; Liquidated Damages

The Company, the Subsidiary Guarantors and the initial purchasers entered into a registration rights agreement on the closing date for the outstanding notes. In the registration rights agreement, the Company and the Subsidiary Guarantors agreed to file an exchange offer registration statement with the SEC within 100 days of the closing of the offering of the outstanding notes and use their respective reasonable best efforts to have it declared effective at the earliest possible time, but in no event later than 210 days following the closing date of the outstanding notes. The Company and the Subsidiary Guarantors will also agree to use their reasonable best efforts to cause the exchange offer registration statement to be effective continuously, to keep the exchange offer for the notes open for a period of not less than 20 business days and to cause the exchange offer to be consummated no later than the 30th business day after the exchange offer registration statement is declared effective by the SEC.

The registration rights agreement also provides that:

• if the Company and the Subsidiary Guarantors fail to file any registration statement on or prior to the applicable deadline;

• if such registration statement is not declared effective by the SEC on or before the applicable deadline;

• if the exchange offer is not consummated on or before the 30th business day after the exchange offer registration statement is declared effective; and

• if any registration statement is declared effective but thereafter ceases to be effective or useable in connection with resales of the outstanding notes during the periods specified in the registration rights agreement, for such time of non-effectiveness or non-usability (each of the foregoing four bullet points, a “Registration Default”),

the Company and the Subsidiary Guarantors agree to pay each holder of outstanding notes affected thereby liquidated damages in an amount equal to $0.05 per week per $1,000 in principal amount of outstanding notes held by such holder for each week or portion thereof that the Registration Default continues for the first 90-day period immediately following the occurrence of such Registration Default. The amount of the liquidated damages shall increase by an additional $0.05 per week per $1,000 in principal amount of outstanding notes with respect to each subsequent 90-day period until all Registration Defaults have been cured, up to a maximum amount of liquidated damages of $0.25 per week per $1,000 in principal amount of outstanding notes. Following the cure of all Registration Defaults, the accrual of liquidated damages will cease. The Company shall not be required to pay liquidated damages for more than one Registration Default at any given time.

All accrued liquidated damages shall be paid by the Company to holders entitled thereto in the same manner and at the same time as interest on the new notes is paid. The outstanding notes and any registered new notes issued in exchange for the outstanding notes will constitute a single series of debt securities under the indenture. If an exchange offer is consummated, holders of outstanding notes who do not exchange their outstanding notes will vote together with the holders of the registered new notes for all relevant purposes under the indenture.

71

Certain Definitions

Set forth below are certain defined terms used in the indenture. Reference is made to the indenture for a full disclosure of all such terms, as well as any other capitalized terms used herein for which no definition is provided.

“Accounts Receivable Subsidiary” means any Wholly Owned Subsidiary of the Company (i) which is formed solely for the purpose of, and which engages in no activities other than activities in connection with, financing accounts receivable of the Company and/or its Restricted Subsidiaries, (ii) which is designated by the Company as an Accounts Receivables Subsidiary pursuant to an officers’ certificate delivered to the Trustee, (iii) no portion of Indebtedness or any other obligation (contingent or otherwise) of which is at any time recourse to or obligates the Company or any Restricted Subsidiary in any way, or subjects any property or asset of the Company or any Restricted Subsidiary, directly or indirectly, contingently or otherwise, to the satisfaction thereof, other than pursuant to (I) representations, warranties and covenants (or any indemnity with respect to such representations, warranties and covenants) entered into in the ordinary course of business in connection with the sale (including a sale in exchange for a promissory note of or Equity Interest in such Accounts Receivable Subsidiary) of accounts receivable to such Accounts Receivable Subsidiary or (II) any guarantee of any such accounts receivable financing by the Company or any Restricted Subsidiary that is permitted to be incurred pursuant to the covenant described under the caption entitled “Certain Covenants—Incurrence of Indebtedness and Issuance of Preferred Stock,” (iv) with which neither the Company nor any Restricted Subsidiary of the Company has any contract, agreement, arrangement or understanding other than contracts, agreements, arrangements and understandings entered into in the ordinary course of business in connection with the sale (including a sale in exchange for a promissory note of or Equity Interest in such Accounts Receivable Subsidiary) of accounts receivable in accordance with the covenant described under the caption “Certain Covenants—Accounts Receivable Facilities” and fees payable in the ordinary course of business in connection with servicing accounts receivable and (v) with respect to which neither the Company nor any Restricted Subsidiary of the Company has any obligation (a) to subscribe for additional shares of Capital Stock or other Equity Interests therein or make any additional capital contribution or similar payment or transfer thereto other than in connection with the sale (including a sale in exchange for a promissory note of or Equity Interest in such Accounts Receivable Subsidiary) of accounts receivable to such Accounts Receivable Subsidiary in accordance with the covenant described under “Certain Covenants—Accounts Receivable Facilities” or (b) to maintain or preserve the solvency, any balance sheet term, financial condition, level of income or results of operations thereof.

“Acquired Debt” means, with respect to any specified person, (i) Indebtedness of any other person existing at the time such other person is merged with or into or became a Subsidiary of such specified person, including, without limitation, Indebtedness incurred in connection with, or in contemplation of, such other person merging with or into or becoming a Subsidiary of such specified person and (ii) Indebtedness secured by a Lien encumbering any asset acquired by such specified person.

“Acquired Disqualified Stock” means, with respect to any specified person, Disqualified Stock of any other person existing at the time such other person is merged with or into or became a Subsidiary of such specified person, including, without limitation, Disqualified Stock incurred in connection with, or in contemplation of, such other person merging with or into or becoming a Subsidiary of such specified person.

“Acquired Preferred Stock” means, with respect to any specified person, Preferred Stock of any other person existing at the time such other person is merged with or into or became a Subsidiary of such specified person, including, without limitation, Preferred Stock incurred in connection with, or in contemplation of, such other person merging with or into or becoming a Subsidiary of such specified person.

“Acquiring Person” means a person other than a Subject Assets Transferee which acquires (i) all or a portion of the Subject Assets or (ii) an interest in a Subject Assets Transferee in connection with a Major Asset Sale.

“Adjusted Consolidated Cash Flow” means, for any period, the sum of Consolidated Cash Flow of the Company for such period plus the aggregate Distributable Joint Venture Cash Flow of the Company and its Restricted Subsidiaries, determined on a consolidated basis, for such period.

72

“Affiliate” of any specified person means any other person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified person. For purposes of this definition, “control” (including, with correlative meanings, the terms “controlling,” “controlled by” and “under common control with”), as used with respect to any person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such person, whether through the ownership of voting securities, by agreement or otherwise; provided that beneficial ownership of 10% or more of the voting securities of a person shall be deemed to be control; provided further that the foregoing proviso shall not apply for purposes of clauses (g) and (i) of the covenant described under “Certain Covenants—Restricted Payments” or clause (d) of the definition of “Unrestricted Subsidiaries.”

“Asset Sale” means (i) the sale, lease, conveyance or other disposition (other than the creation of a Lien) of any assets other than the disposition of inventory, equipment or Cash Equivalents in the ordinary course of business consistent with past practices (provided that the sale, conveyance or other disposition of all or substantially all the assets of the Company and its Restricted Subsidiaries taken as a whole will be governed by the provisions of the indenture described above under the caption “Repurchase at the Option of Holders—Change of Control” and/or the provisions described above under the caption “Certain Covenants—Merger, Consolidation or Sale of Assets” and not by the provisions of the Asset Sale covenant), (ii) the sale by the Company or any of its Restricted Subsidiaries of Equity Interests of any of the Company’s Restricted Subsidiaries, Unrestricted Subsidiaries or Joint Ventures and (iii) the issuance by any of the Company’s Restricted Subsidiaries of Equity Interests of such Restricted Subsidiary, in the case of clause (i), (ii) or (iii), whether in a single transaction or a series of related transactions (a) that have a fair market value in excess of $25 million or (b) for Net Proceeds in excess of $25 million. Notwithstanding the foregoing: (a) a transfer of assets by the Company to a Restricted Subsidiary or by a Restricted Subsidiary to the Company or to another Restricted Subsidiary; (b) an issuance of Equity Interests by a Restricted Subsidiary to the Company or to another Restricted Subsidiary; (c) a Restricted Payment that is permitted by the covenant described under the caption “Certain Covenants—Restricted Payments”; (d) an issuance of Preferred Stock by a Finance Subsidiary that is permitted by the covenant described under the caption “Certain Covenants—Incurrence of Indebtedness and Issuance of Preferred Stock”; (e) sales (including a sale in exchange for a promissory note of or Equity Interest in such Accounts Receivable Subsidiary) of accounts receivable to an Accounts Receivable Subsidiary, in connection with any Receivables Facility; and (f) Sale and Leaseback Transactions will not be deemed to be an Asset Sale.

“Asset Sale Lien” means a Lien on the Subject Assets (including as a Lien for this purpose contractual rights with respect to the operation of the Subject Assets) arising in connection with a Major Asset Sale in favor of the Acquiring Person (or an Affiliate thereof) which Lien does not secure any Indebtedness.

“Attributable Debt” in respect of a Sale and Leaseback Transaction that is treated as a capital lease in accordance with GAAP means, at the time of determination, the present value (discounted at the rate of interest implicit in such transaction, determined in accordance with GAAP) of the obligation of the lessee for net rental payments during the remaining term of the lease included in such Sale and Leaseback Transaction (including any period for which such lease has been extended or may, at the option of the lessor, be extended).

“Board of Directors” means the board of directors of the Company or any committee thereof duly authorized to act on behalf of such board of directors.

“Capital Lease Obligation” means, at the time any determination thereof is to be made, the amount of the liability in respect of a capital lease that would at such time be required to be capitalized on a balance sheet in accordance with GAAP.

“Capital Stock” means (i) in the case of a corporation, corporate stock, (ii) in the case of an association or a business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock, (iii) in the case of a partnership, partnership interests (whether general or limited) and (iv) any other interest or participation that confers on a person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing person.

73

“Cash Equivalents” means (a) United States dollars, (b) securities issued or directly and fully guaranteed or insured by the United States government or any agency or instrumentality thereof (provided that the full faith and credit of the United States is pledged in support thereof) having maturities of not more than one year from the date of acquisition, (c) demand deposits, time deposits and certificates of deposit with maturities of one year or less from the date of acquisition, bankers’ acceptances with maturities not exceeding one year from the date of acquisition and overnight bank deposits, in each case with any bank or trust company organized or licensed under the laws of the United States or any State thereof having capital, surplus and undivided profits in excess of $500 million, (d) repurchase obligations with a term of not more than seven days for underlying securities of the type described in clauses (b) and (c) above entered into with any financial institution meeting the qualifications specified in clause (c) above, (e) commercial paper rated at least P-1 or A-1 by Moody’s or S&P, respectively, and in each case maturing within six months after the date of acquisition, (f) any fund investing exclusively in investments of the type described in clauses (a) through (e) above and (g) in the case of a Foreign Subsidiary, substantially similar investments denominated in foreign currencies (including similarly capitalized foreign banks).

“Consolidated Cash Flow” means, with respect to any person for any period, the Consolidated Net Income of such person for such period (less the Net Income of any Joint Venture to the extent included therein pursuant to clause (i) of the definition of “Consolidated Net Income”), plus, in each case, without duplication

(i) provision for taxes based on income or profits of such person and its Restricted Subsidiaries for such period (including any provision for taxes on the Net Income of any Joint Venture that is a pass-through entity for federal income tax purposes, to the extent such taxes are paid or payable by such person or any of its Restricted Subsidiaries), to the extent that such provision for taxes was included in computing such Consolidated Net Income,

(ii) the Fixed Charges of such person and its Restricted Subsidiaries for such period, to the extent that such Fixed Charges were deducted in computing such Consolidated Net Income,

(iii) depreciation and amortization (including amortization of goodwill and other intangibles but excluding amortization of prepaid cash expenses that were paid in a prior period) of such person and its Restricted Subsidiaries for such period to the extent that such depreciation and amortization were deducted in computing such Consolidated Net Income and

(iv) any non-cash charges reducing Consolidated Net Income for such period (excluding any such non-cash charge to the extent that it represents an accrual of or a reserve for cash expenses in any future period or an amortization of a prepaid cash expense that was paid in a prior period); minus

(v) any noncash items increasing Consolidated Net Income for such period,

in each case, on a consolidated basis and determined in accordance with GAAP.

Notwithstanding the foregoing, the provision for taxes on the income or profits of, and the depreciation and amortization of, a Restricted Subsidiary of the referent person shall be added to Consolidated Net Income to compute Consolidated Cash Flow only to the extent (and in the same proportion) that the Net Income of such Restricted Subsidiary was included in calculating the Consolidated Net Income of such person.

“Consolidated Net Income” means, with respect to any person for any period, the aggregate of the Net Income of such person and its Restricted Subsidiaries for such period, on a consolidated basis, determined in accordance with GAAP; provided that

(i) the Net Income of any person that is not a Restricted Subsidiary shall be included only to the extent of the lesser of (x) the amount of dividends or distributions paid in cash (but not by means of a loan) to the referent person or a Restricted Subsidiary thereof or (y) the referent person’s (or a Restricted Subsidiary of the referent person’s) proportionate share of the Net Income of such other person,

(ii) the Net Income (but not loss) of any Restricted Subsidiary shall be excluded to the extent that the declaration or payment of dividends or similar distributions by that Restricted Subsidiary of that Net Income

74

is not at the date of determination permitted without any prior governmental approval (that has not been obtained) or, directly or indirectly, by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Subsidiary or its stockholders,

(iii) the Net Income of any person acquired in a pooling of interests transaction for any period prior to the date of such acquisition shall be excluded and

(iv) the cumulative effect of a change in accounting principles shall be excluded.

“Consolidated Net Worth” means, with respect to any person as of any date, the sum of (i) the consolidated equity of the common stockholders of such person and its Restricted Subsidiaries as of such date plus (ii) the respective amounts reported on such person’s balance sheet as of such date with respect to any series of Preferred Stock (other than Disqualified Stock), less all write-ups (other than write-ups resulting from foreign currency translations and write-ups of tangible assets of a going concern business made in accordance with GAAP as a result of the acquisition of such business) subsequent to the date of the indenture in the book value of any asset owned by such person or a Restricted Subsidiary of such person, and excluding the cumulative effect of a change in accounting principles, all as determined in accordance with GAAP.

“Continuing Directors” means, as of any date of determination, any member of the Board of Directors of the Company who (i) was a member of such Board of Directors on the date of the indenture or (ii) was nominated for election or elected to such Board of Directors with the approval of a majority of the Continuing Directors who were members of such Board at the time of such nomination or election or any successor Continuing Directors appointed by such Continuing Directors (or their successors).

“Default” means any event that is or with the passage of time or the giving of notice or both would be an Event of Default.

“Disqualified Stock” means any Capital Stock that, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable), or upon the happening of any event, matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at the option of the holder thereof, in whole or in part, on or prior to the date on which the notes mature; provided that any Capital Stock that would not constitute Disqualified Stock but for provisions thereof giving holders thereof the right to require such person to repurchase or redeem such Capital Stock upon the occurrence of an “asset sale” or a “change of control” occurring prior to the date on which the notes mature shall not constitute Disqualified Stock if the “asset sale” or “change of control” provisions applicable to such Capital Stock are no more favorable to the holders of such Capital Stock than the “asset sale” provision of the Senior Subordinated Indenture or the provision contained in the “Repurchase at the Option of Holders—Change of Control” covenant described above and such Capital Stock specifically provides that such person will not repurchase or redeem any such stock pursuant to such provision prior to the Company’s repurchase of such notes as are required pursuant to such covenants.

“Distributable Joint Venture Cash Flow” means, with respect to any person for any period, in the case of each Joint Venture that is not a Restricted Subsidiary of the referent person, the sum of

(I) the lesser of:

(x) the amount of dividends or distributions paid in cash (but not by means of a loan) by such Joint Venture to the referent person or a Restricted Subsidiary thereof or

(y) the referent person’s (or a Restricted Subsidiary of the referent person’s) proportionate share of:

(i) the Net Income of such Joint Venture for such period, plus

(ii) to the extent deducted therefrom, depreciation and amortization (including amortization of goodwill and other intangibles but excluding amortization of prepaid cash expenses that were paid in a prior period) of such Joint Venture for such period, plus

75

(iii) any non-cash charges reducing Net Income of such Joint Venture for such period (excluding any such non-cash charge to the extent that it represents an accrual of or a reserve for cash expenses in any future period or an amortization of a prepaid cash expense that was paid in a prior period), less

(iv) any non-cash items increasing Net Income of such Joint Venture for such period,

minus (II) the aggregate amount of all Investments made by the Company or any of its Restricted Subsidiaries in such Joint Venture during such period pursuant to clause (h) of the covenant described under “Certain Covenants—Restricted Payments,” in each case determined on a consolidated basis and in accordance with GAAP.

“Equistar Assumed Debt” means (i) the 6.5% Notes Due 2006 and the 7.55% Notes Due 2026, each issued by the Company pursuant to an Indenture dated as of January 29, 1996 between the Company and Texas Commerce Bank National Association, as Trustee, as supplemented by the First Supplemental Indenture dated as of February 15, 1996 and the Second Supplemental Indenture dated as of December 1, 1997; and (ii) Indebtedness under the medium term notes issued by the Company, maturing at various dates from 2002 to 2005; in each case outstanding as of the Issue Date and with respect to which either (x) the Company is a guarantor or (y) as between the Company and Equistar, Equistar is the primary obligor and the Company is an obligor; in each case, as may be amended from time to time, provided that any such amendment does not increase the principal amount thereof or interest rate applicable thereto or shorten the Weighted Average Life to Maturity or Stated Maturity thereof or add any Restricted Subsidiary as an obligor with respect thereto.

“Equity Interests” means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for, Capital Stock).

“Existing ARCO Chemical Debt” means the 9.375% Debentures Due 2005, the 10.25% Debentures Due 2010 and the 9.8% Debentures Due 2020, all issued pursuant to the Indenture dated June 15, 1988 between the Company (as successor to ARCO Chemical Company) and The Bank of New York, as Trustee.

“Existing Credit Facility” means that certain Credit Agreement dated as of July 23, 1998 and as amended through the date hereof by and among the Company and JPMorgan Chase Bank, as administrative agent, and the other agents and lenders that are parties thereto, including any related notes, instruments and agreements executed in connection therewith, as amended, restated, modified, extended, renewed, refunded, replaced or refinanced, in whole or in part, from time to time, after the Issue Date (other than with the proceeds of the outstanding notes issued on the Issue Date), whether or not with the same lenders or agents.

“Existing Indebtedness” means Indebtedness of the Company and its Restricted Subsidiaries in existence, and considered Indebtedness of the Company or any of its Restricted Subsidiaries, on the Issue Date, until such amounts are repaid, including all reimbursement obligations with respect to letters of credit outstanding as of the date of the indenture.

“Existing Senior Secured Note Indentures” means the indentures among the Company, the Subsidiary Guarantors party thereto and The Bank of New York, as trustee, pursuant to which the Company issued the Existing Senior Secured Notes.

“Existing Senior Secured Notes” means the Company’s 9.625% Senior Secured Notes, Series A, Due 2007, its 9.875% Senior Secured Notes, Series B, Due 2007, its 9.5% Senior Secured Notes due 2008 and its 11.125% Senior Secured Notes due 2012.

“Finance Subsidiary” means a Restricted Subsidiary of the Company, all the Capital Stock of which (other than Preferred Stock) is owned by the Company that does not engage in any activity other than:

(i) holding of Indebtedness of the Company;

76

(ii) the issuance of Capital Stock; and

(iii) any activity necessary, incidental or related to the foregoing.

“Fixed Charge Coverage Ratio” means with respect to any person for any period, the ratio of the Adjusted Consolidated Cash Flow of such person for such period to the Fixed Charges of such person for such period. In the event that the Company or any of its Restricted Subsidiaries incurs, assumes or redeems any Indebtedness (other than revolving credit borrowings) or issues or redeems Preferred Stock subsequent to the commencement of the period for which the Fixed Charge Coverage Ratio is being calculated but prior to the date on which the event for which the calculation of the Fixed Charge Coverage Ratio is made (the “Calculation Date”), then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect to such incurrence, assumption or redemption of Indebtedness, or such issuance or redemption of Preferred Stock, as if the same had occurred at the beginning of the applicable four-quarter reference period.

In addition, for purposes of making the computation referred to above,

(i) acquisitions that have been made by the Company or any of its Restricted Subsidiaries, including through mergers or consolidations and including any related financing transactions, during the four-quarter reference period or subsequent to such reference period and on or prior to the Calculation Date shall be deemed to have occurred on the first day of the four-quarter reference period,

(ii) the Adjusted Consolidated Cash Flow and Fixed Charges attributable to operations or businesses disposed of prior to the Calculation Date shall be excluded, but, in the case of such Fixed Charges, only to the extent that the obligations giving rise to such Fixed Charges will not be obligations of the referent person or any of its Restricted Subsidiaries following the Calculation Date and

(iii) if since the beginning of the four-quarter reference period any person was designated as an Unrestricted Subsidiary or redesignated as or otherwise became a Restricted Subsidiary, such event shall be deemed to have occurred on the first day of the four-quarter reference period.

“Fixed Charges” means, with respect to any person for any period, the sum, without duplication, of

(i) the consolidated interest expense of such person and its Restricted Subsidiaries for such period, whether paid or accrued (including, without limitation, amortization of original issue discount, non-cash interest payments, the interest component of any deferred payment obligations, the interest component of all payments associated with Capital Lease Obligations, commissions, discounts and other fees and charges incurred in respect of letters of credit or bankers’ acceptance financings and net payments or receipts (if any) pursuant to Hedging Obligations),

(ii) the consolidated interest expense of such person and its Restricted Subsidiaries that was capitalized during such period,

(iii) any interest expense on Indebtedness of another person (other than Non-Recourse Debt of a Joint Venture or an Unrestricted Subsidiary secured by a pledge by the Company or any Restricted Subsidiary of Capital Stock which pledge is permitted by clause (k) or (1) of the covenant described under the caption “Certain Covenants—Restricted Payments”) that is Guaranteed by such person or one of its Restricted Subsidiaries or secured by a Lien on assets of such person or one of its Restricted Subsidiaries (whether or not such Guarantee or Lien is called upon), and

(iv) the product of (a) all dividend payments (other than any payments to the referent person or any of its Restricted Subsidiaries) on any series of Preferred Stock of such person and its Restricted Subsidiaries, times (b) a fraction, the numerator of which is one and the denominator of which is one minus the then current combined federal, state and local statutory tax rate of such person, expressed as a decimal, in each case, on a consolidated basis and in accordance with GAAP;

provided that (i) interest payments by Equistar on the Equistar Assumed Debt and (ii) interest payments on Indebtedness of a Joint Venture shall, in each case, not be deemed Fixed Charges of the Company as of any

77

date of determination when such Indebtedness is not considered Indebtedness of the Company or any Restricted Subsidiary of the Company.

“Foreign Subsidiary” means any Restricted Subsidiary that has 50% or more of its assets located outside the United States or any territory thereof.

“GAAP” means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as have been approved by a significant segment of the accounting profession, as in effect on the Issue Date.

“General Partner” means a Restricted Subsidiary of the Company or any of its Restricted Subsidiaries that has no assets and conducts no operations other than its ownership of a general partnership interest in a Joint Venture.

“Guarantee” means any obligation, contingent or otherwise, of any person directly or indirectly guaranteeing any Indebtedness or Disqualified Stock of any other person and, without limiting the generality of the foregoing, any obligation, direct or indirect, contingent or otherwise, of such person (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or Disqualified Stock of such other person (including those arising by virtue of partnership arrangements (other than, in the case of the Company or a Restricted Subsidiary of the Company, with respect to the obligations of a Joint Venture, solely by virtue of a Restricted Subsidiary of the Company being the General Partner of such Joint Venture if, as of the date of determination, no payment on such Indebtedness or obligation has been made by such General Partner of such Joint Venture and such arrangement would not be classified and accounted for, in accordance with GAAP, as a liability on a consolidated balance sheet of the Company)) or (ii) entered into for the purpose of assuring in any other manner the obligee of such Indebtedness or Disqualified Stock of the payment thereof or to protect such obligee against loss in respect thereof in whole or in part (including by agreement to keep-well, to purchase assets, goods, securities or services, to take-or-pay, to maintain financial statement conditions or otherwise); provided that the term “Guarantee” shall not include endorsements for collection or deposit in the ordinary course of business. The term “Guarantee” used as a verb has a corresponding meaning.

“Hedging Obligations” means, with respect to any person, the obligations of such person under (i) interest rate swap agreements, interest rate cap agreements and interest rate collar agreements, (ii) forward foreign exchange contracts or currency swap agreements, (iii) other agreements or arrangements designed to protect such person against fluctuations in interest rates or currency values and (iv) commodity price protection agreements or commodity price hedging agreements designed to manage fluctuations in prices or costs in raw materials, manufactured products or related commodities.

“Indebtedness” means, with respect to any person, any indebtedness of such person, whether or not contingent, in respect of borrowed money or evidenced by bonds, notes, debentures or similar instruments or letters of credit (or reimbursement agreements in respect thereof) or banker’s acceptances or representing Capital Lease Obligations or the balance deferred and unpaid of the purchase price of any property or representing net Hedging Obligations, except any such balance that constitutes an accrued expense or a trade payable, if and to the extent any of the foregoing indebtedness (other than letters of credit and Hedging Obligations) would appear as a liability on a balance sheet of such person prepared in accordance with GAAP, as well as all indebtedness of others secured by a Lien on any asset of such person whether or not such indebtedness is assumed by such person (provided that, for purposes of determining the amount of any Indebtedness of the type described in this clause, if recourse with respect to such Indebtedness is limited to such asset, the amount of such Indebtedness shall be limited to the lesser of the fair market value of such asset or the amount of such Indebtedness) and, to the extent not otherwise included, the Guarantee by such person of any indebtedness of the types described above of any other person; provided that Indebtedness shall not include the pledge by the Company or any of its Restricted Subsidiaries of the Capital Stock of a Joint Venture Subsidiary, an Unrestricted Subsidiary or a Joint Venture

78

permitted by clause (k) or (1) of the covenant described above under the caption “Certain Covenants—Restricted Payments” to secure Non-Recourse Debt of such Unrestricted Subsidiary or Joint Venture.

The Equistar Assumed Debt shall not constitute Indebtedness of the Company as of any date of determination if the Company has not made any principal or interest payments on such Indebtedness after the Issue Date; provided that, the payment by the Company of any principal or interest thereon shall be deemed to be an incurrence of such Indebtedness on the day of such payment.

The amount of any Indebtedness outstanding as of any date shall be (i) the accreted value thereof, in the case of any Indebtedness that does not require current payments of interest and (ii) the principal amount thereof, together with any interest thereon that is more than 30 days past due, in the case of any other Indebtedness.

“Investment Grade” means a rating of BBB- or higher by S&P or Baa3 or higher by Moody’s or the equivalent of such ratings by S&P or Moody’s. In the event that the Company shall select any other Rating Agency pursuant to the provisions of the definition thereof, the equivalent of such ratings by such Rating Agency shall be used.

“Investments” means, with respect to any person, all investments by such person in another person (including an Affiliate of such person) in the form of direct or indirect loans, advances or extensions of credit to such other person (including any Guarantee by such person of the Indebtedness or Disqualified Stock of such other person) or capital contributions or purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities of such other person, together with all items that are or would be classified as investments of such investing person on a balance sheet prepared in accordance with GAAP; provided that (x) trade credit and accounts receivable in the ordinary course of business, (y) commissions, loans, advances, fees and compensation paid in the ordinary course of business to officers, directors and employees and (z) reimbursement obligations in respect of letters of credit and tender, bid, performance, government contract, surety and appeal bonds, in each case solely with respect to obligations of the Company or any of its Restricted Subsidiaries shall not be considered Investments. If the Company or any Restricted Subsidiary of the Company sells or otherwise disposes of any Equity Interests of any direct or indirect Restricted Subsidiary of the Company such that, after giving effect to any such sale or disposition, such person is no longer a Restricted Subsidiary of the Company, the Company shall be deemed to have made an Investment on the date of any such sale or disposition equal to the fair market value of the Equity Interests of such Restricted Subsidiary not sold or disposed of in an amount determined as provided in the first paragraph of the covenant described above under the caption “Certain Covenants—Restricted Payments.”

“Issue Date” means May 20, 2003.

“Joint Venture” means any joint venture between the Company or any Restricted Subsidiary and any other person, whether or not such joint venture is a Subsidiary of the Company or any Restricted Subsidiary.

“Joint Venture Subsidiary” means a Subsidiary of the Company or any of its Subsidiaries that has no assets and conducts no operations other than its ownership of Equity Interests of a Joint Venture.

“Lien” means, with respect to any asset, any mortgage, lien, pledge, charge, security interest (other than, in the case of Receivables Facilities, security interests under the Uniform Commercial Code arising solely by virtue of the application of Article 9 thereof to sales of accounts) or encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law (including any conditional sale or other title retention agreement, and any lease in the nature thereof) or the assignment or conveyance of any right to receive income therefrom.

“Lyondell TDI” means Lyondell Chimie France TDI, a French limited partnership and a wholly owned subsidiary of the Company.

79

“Major Asset Sale” means an Asset Sale designated by the Company by prior notice to the Trustee as a Major Asset Sale, so long as in connection therewith (i) the Company receives Net Proceeds in an aggregate amount not less than $1,000,000,000 (which shall be deemed Net Proceeds of such Major Asset Sale for purposes of the covenant described under the caption “Repurchase at the Option of Holders—Asset Sales”), (ii) at the time of such Major Asset Sale and after giving effect thereto, no Default shall exist, (iii) the sum of the gross cash proceeds received by the Company in respect of such Major Asset Sale plus the value of the interest of the Company in the Subject Assets Transferee (if any) after giving effect to such Major Asset Sale is not less than the value (as conclusively determined by the Board of Directors of the Company) of the portion of the Subject Assets transferred by the Company in connection with such Major Asset Sale, and (iv) the Company directly or indirectly is the operator of the Subject Assets in which it or a Subject Assets Transferee retains an interest. For purposes of clause (i) of this definition (1) a transaction that produces substantially the same economic result as a sale of a partial interest in an asset, as might be achieved, for instance, through contractual arrangements allocating future revenues and costs attributable to the asset, shall be deemed an Asset Sale even though there may be no change in title to the asset or in the ownership of the person that has title to the asset and (2) a subsequent related transaction with the same Acquiring person (or an Affiliate thereof) contemplated by the terms of the initial Major Asset Sale with such person shall, for purposes of determining the applicability of and compliance with this definition, be deemed a single cumulative transaction.

“Moody’s” means Moody’s Investors Service, Inc. and its successors.

“Net Income” means, with respect to any person, the net income (loss) of such person, determined in accordance with GAAP and before any reduction in respect of Preferred Stock dividends, excluding, however,

(i) any gain or loss, together with any related provision for taxes on such gain or loss, realized in connection with

(a) any Asset Sale or any disposition pursuant to a Sale and Leaseback Transaction or

(b) the disposition of any securities by such person or any of its Restricted Subsidiaries or the extinguishment of any Indebtedness of such person or any of its Restricted Subsidiaries and

(ii) any extraordinary gain or loss, together with any related provision for taxes on such extraordinary gain or loss.

“Net Proceeds” means the aggregate cash proceeds (excluding any proceeds deemed to be “cash” pursuant to the covenant described above under “Repurchase at the Option of Holders—Asset Sales”) received by the Company or any of its Restricted Subsidiaries in respect of any Asset Sale (including, without limitation, any cash received upon the sale or other disposition of any non-cash consideration received in any Asset Sale), net of the direct costs relating to such Asset Sale (including, without limitation, legal, accounting and investment banking fees and sales commissions) and any relocation expenses incurred as a result thereof, taxes paid or payable as a result thereof (after taking into account any available tax credits or deductions and any tax sharing arrangements), amounts required to be paid to holders of minority interests in Restricted Subsidiaries as a result of such Asset Sale, amounts required to be applied to the repayment of Indebtedness (other than Indebtedness under the Existing Credit Facility, the Existing Senior Secured Notes or the Existing ARCO Chemical Debt) secured by a Lien on any asset sold in such Asset Sale and any reserves for adjustment in respect of the sales price of such asset or assets established in accordance with GAAP and any reserve for future liabilities established in accordance with GAAP; provided that the reversal of any such reserve that reduced Net Proceeds when issued shall be deemed a receipt of Net Proceeds in the amount of such proceeds on such day.

“Non-Recourse Debt” means Indebtedness as to which the lenders have been notified in writing that they will not have any recourse to the stock or assets (in each case, other than the stock of a Joint Venture or an Unrestricted Subsidiary or of a Joint Venture Subsidiary that has no assets and conducts no operations other than the holding, directly or indirectly, of Equity Interests of such Joint Venture pledged by the Company or any of its Restricted Subsidiaries to secure debt of such Joint Venture or Unrestricted Subsidiary) of the Company or any of its Restricted Subsidiaries.

80

“Obligations” means any principal, interest, penalties, fees, indemnifications, reimbursements, damages and other liabilities payable under the documentation governing any Indebtedness and in all cases whether direct or indirect, absolute or contingent, now outstanding or hereafter created, assumed or incurred and including, without limitation, interest accruing subsequent to the filing of a petition in bankruptcy or the commencement of any insolvency, reorganization or similar proceedings at the rate provided in the relevant documentation, whether or not an allowed claim, and any obligation to redeem or defease any of the foregoing.

“Payment Default” means any failure to pay any scheduled installment of interest or principal on any Indebtedness within the grace period provided for such payment in the documentation governing such Indebtedness.

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

“Permitted Business” means the petrochemical, chemical and petroleum refining businesses and any business reasonably related, incidental, complementary or ancillary thereto.

“Permitted Investments” means:

(a) any Investment in the Company or in a Restricted Subsidiary of the Company that is engaged in a Permitted Business;

(b) any Investment in Cash Equivalents;

(c) any Investment by the Company or any Subsidiary of the Company in a person, if as a result of such Investment:

(i) such person becomes a Restricted Subsidiary of the Company engaged in a Permitted Business or

(ii) such person is merged, consolidated or amalgamated with or into, or transfers or conveys substantially all its assets to, or is liquidated into, the Company or a Restricted Subsidiary of the Company engaged in a Permitted Business;

(d) any non-cash consideration (other than a joint venture interest received in full or partial satisfaction of the 80% requirement in clause (ii) of the first paragraph of the covenant described above under the caption “Repurchase at the Option of Holders—Asset Sales”) received as consideration in an Asset Sale that was made pursuant to and in compliance with the covenant described above under the caption “Repurchase at the Option of Holders—Asset Sales”;

(e) any acquisition of assets or Equity Interests solely in exchange for the issuance of Equity Interests (other than Disqualified Stock) of the Company;

(f) Hedging Obligations entered into in the ordinary course of business and otherwise permitted under the indenture;

(g) Investments in an Accounts Receivable Subsidiary that, as conclusively determined by the Board of Directors, are necessary or advisable to effect a Receivables Facility;

(h) Investments in Unrestricted Subsidiaries and Joint Ventures in an aggregate amount, taken together with all other Investments made in reliance on this clause (h), not to exceed at any time outstanding $25 million (after giving effect to any reductions in the amount of any such Investments as a result of the repayment or other disposition thereof for cash, the amount of such reduction not to exceed the amount of such Investments previously made pursuant to this clause (h)); and

(i) any Investment received by the Company or any Restricted Subsidiary as consideration for the settlement of any litigation, arbitration or claim in bankruptcy or in partial or full satisfaction of accounts

81

receivable owned by a financially troubled person to the extent reasonably necessary in order to prevent or limit any loss by the Company or any of its Restricted Subsidiaries in connection with such accounts receivable.

“Permitted Liens” means:

(i) Liens in favor of the Company or any Subsidiary Guarantor;

(ii) Liens securing the new notes and the Subsidiary Guarantees;

(iii) Liens on property of a person existing at the time such person is merged into or consolidated with the Company or any Restricted Subsidiary of the Company or becomes a Subsidiary of the Company; provided that such Liens were in existence prior to the contemplation of such merger, consolidation or acquisition and do not extend to any assets of the Company or its Restricted Subsidiaries other than those of the person merged into or consolidated with the Company or that becomes a Restricted Subsidiary of the Company;

(iv) Liens on property existing at the time of acquisition thereof by the Company or any Restricted Subsidiary of the Company; provided that such Liens were in existence prior to the contemplation of such acquisition;

(v) Liens (including the interest of a lessor under a capital lease) on any asset existing at the time of acquisition thereof or incurred within 180 days of the time of acquisition or completion of construction thereof, whichever is later, to secure or provide for the payment of all or any part of the purchase price (or construction price) thereof;

(vi) Liens incurred or assumed in connection with the issuance of revenue bonds the interest on which is exempt from federal income taxation pursuant to Section 103(b) of the Internal Revenue Code;

(vii) Liens imposed by law, such as laborers’ or other employees’, carriers’, warehousemen’s, mechanics’, materialmen’s and vendors’ Liens and Liens imposed by law on pipelines or pipeline facilities;

(viii) Liens arising by reason of deposits necessary to qualify the Company or any Restricted Subsidiary to conduct business, maintain self insurance or comply with any law and Liens securing the PBGC Settlement;

(ix) Liens to secure the performance of statutory obligations, tender, bid, performance, government contract, surety or appeal bonds or other obligations of a like nature incurred in the ordinary course of business;

(x) Liens existing on the Issue Date other than Liens securing Indebtedness under the Existing Credit Facility, the Existing Senior Secured Notes or the Existing ARCO Chemical Debt;

(xi) Liens for taxes, assessments or governmental charges or claims that are not yet delinquent or that are being contested in good faith by appropriate proceedings, prejudgment Liens that are being contested in good faith by appropriate proceedings and Liens arising out of judgments or awards against the Company or any Restricted Subsidiary with respect to which the Company or such Restricted Subsidiary at the time shall be prosecuting an appeal or proceedings for review and with respect to which it shall have secured a stay of execution pending such appeal or proceedings for review; provided that in each case any reserve or other appropriate provision as shall be required in conformity with GAAP shall have been made therefor;

(xii) easements, rights-of-way, restrictions, irregularities of title and other similar charges or encumbrances, not interfering in any material respect with the ordinary conduct of the business of the Company or any of its Restricted Subsidiaries;

(xiii) Liens securing reimbursement obligations with respect to commercial letters of credit obtained in the ordinary course of business which encumber documents and other property or assets relating to such letters of credit and products and proceeds thereof;

82

(xiv) Liens securing assets under construction arising from progress or partial payments by a customer of the Company or its Restricted Subsidiaries relating to such property or assets;

(xv) licenses or leases by the Company or any of its Restricted Subsidiaries as licensor or lessor in the ordinary course of business and otherwise permitted by the indenture for patents, copyrights, trademarks, trade names and other intellectual property;

(xvi) leases or subleases by the Company or any of its Restricted Subsidiaries as lessor or sublessor in the ordinary course of business and otherwise permitted by the indenture;

(xvii) Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods;

(xviii) Liens resulting from the deposit of funds or evidences of Indebtedness in trust for the purpose of (A) defeasing Indebtedness of the Company or any of its Restricted Subsidiaries (which defeasance is otherwise permitted under the indenture) having an aggregate principal amount at any one time outstanding not to exceed $25 million or (B) defeasing Indebtedness ranking pari passu with the new notes issued under the indenture; provided that the new notes issued under the indenture are defeased concurrently with such Indebtedness;

(xiv) from and after the first date when the new notes are rated Investment Grade, Liens on any asset of the Company other than any of the Company’s or any of its Restricted Subsidiary’s manufacturing plants or Liens on any Equity Interests of any Restricted Subsidiary that owns a manufacturing plant;

(xx) the pledge of Equity Interests of an Unrestricted Subsidiary or a Joint Venture (or of a Joint Venture Subsidiary that has no assets and conducts no operations other than the holding, directly or indirectly, of Equity Interests of such Joint Venture) organized (or designated as an Unrestricted Subsidiary and holding no other assets and conducting no other operations) to construct, own and/or operate a propylene oxide plant in the European Union to secure Non-Recourse Debt of such Joint Venture or Unrestricted Subsidiary;

(xxi) the pledge of Equity Interests of an Unrestricted Subsidiary or a Joint Venture (or of a Joint Venture Subsidiary that has no assets and conducts no operations other than the holding, directly or indirectly, of Equity Interests of such Joint Venture) organized (or designated as an Unrestricted Subsidiary and holding no other assets and conducting no other operations) to participate in the improvement of the Rhodia TDI Plant to secure Non-Recourse Debt of such Joint Venture or Unrestricted Subsidiary or Rhodia or a wholly owned subsidiary of Rhodia;

(xxii) Liens on equipment of the Company or any Restricted Subsidiary arising as a result of a sale and leaseback with respect to such equipment; provided that the proceeds from such sale and leaseback are applied pursuant to the covenant described above under the caption “Repurchase at the Option of Holders—Asset Sales”;

(xxiii) Asset Sale Liens;

(xxiv) customary Liens for the fees, costs and expenses of trustees and escrow agents pursuant to any indenture, escrow agreement or similar agreement establishing a trust or an escrow arrangement, and Liens pursuant to merger agreements, stock purchase agreements, asset sale agreements, option agreements and similar agreements in respect of the disposition of property or assets of the Company or any Restricted Subsidiary, to the extent such dispositions are permitted hereunder;

(xxv) netting provisions and setoff rights in favor of counterparties to agreements creating Hedging Obligations;

(xxvi) other Liens on assets of the Company or any Restricted Subsidiary of the Company securing Indebtedness that is permitted by the terms of the indenture to be outstanding having an aggregate principal amount at any one time outstanding not to exceed $100 million; and

83

(xxvii) Liens to secure a Permitted Refinancing incurred to refinance Indebtedness that was secured by a Lien permitted under the indenture and that was incurred in accordance with the provisions of the indenture; provided that such Liens do not extend to or cover any property or assets of the Company or any Restricted Subsidiary other than assets or property securing the Indebtedness so refinanced.

“Permitted Refinancing” means any Indebtedness of the Company or any of its Subsidiaries or Preferred Stock of a Finance Subsidiary issued in exchange for, or the net proceeds of which are used solely to extend, refinance, renew, replace, defease or refund, other Indebtedness of the Company or any of its Restricted Subsidiaries; provided that:

(i) the principal amount (or liquidation preference in the case of Preferred Stock) of such Permitted Refinancing (or if such Permitted Refinancing is issued at a discount, the initial issuance price of such Permitted Refinancing) does not exceed the principal amount of the Indebtedness so extended, refinanced, renewed, replaced, defeased or refunded (plus the amount of any premiums paid and reasonable expenses incurred in connection therewith);

(ii) such Permitted Refinancing or, in the case of Preferred Stock of a Finance Subsidiary, the Indebtedness issued to such Finance Subsidiary, has a Stated Maturity date later than the Stated Maturity date of, and has a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of, the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded;

(iii) if the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded is subordinated by its terms in right of payment to the new notes or the Subsidiary Guarantees, such Permitted Refinancing, or, in the case of Preferred Stock, the Indebtedness issued to such Finance Subsidiary, has a Stated Maturity date later than the Stated Maturity date of, and is subordinated in right of payment to, the new notes on subordination terms at least as favorable to the holders of new notes as those contained in the documentation governing the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded;

(iv) such Indebtedness is incurred by the Company or a Subsidiary Guarantor (or such Preferred Stock is issued by a Finance Subsidiary) if the Company or a Subsidiary Guarantor is the obligor on the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded; and

(v) such Indebtedness is incurred by the Company or a Restricted Subsidiary (or such Preferred Stock is issued by a Finance Subsidiary) if a Restricted Subsidiary that is not a Subsidiary Guarantor is the obligor on the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded.

“Preferred Stock” means, with respect to any person, any and all shares, interests, participations or other equivalents (however designated, whether voting or non-voting) of preferred or preference stock of such person which is outstanding or issued on or after the date of the indenture.

“Qualified Equity Interests” shall mean all Equity Interests of a person other than Disqualified Stock of such person.

“Rating Agency” means (i) S&P or (ii) Moody’s or (iii) if neither S&P nor Moody’s shall exist, a nationally recognized securities rating agency or agencies, as the case may be, selected by the Company, which shall be substituted for S&P or Moody’s or both, as the case may be.

“Receivables Facility” means one or more receivables financing facilities or arrangements, as amended from time to time, pursuant to which the Company or any of its Restricted Subsidiaries sells (including a sale in exchange for a promissory note of or an Equity Interest in an Accounts Receivable Subsidiary) its accounts receivable to an Accounts Receivable Subsidiary.

“Receivables Fees” means distributions or payments made directly or by means of discounts with respect to any participation interests issued or sold in connection with, and other fees paid to a person that is not the Company or a Restricted Subsidiary in connection with, any Receivables Facility.

84

“Restricted Investment” means an Investment other than a Permitted Investment.

“Restricted Subsidiary” of a person means any Subsidiary of the referent person that is not an Unrestricted Subsidiary.

“Rhodia” means Rhodia S.A., a French company and the successor in interest to Rhone-Poulenc Chemie S.A. under the TDI Agreements.

“Rhodia TDI Plant” means the manufacturing facilities for the production of toluene diisocyanate, currently owned by Rhodia and located at Pont-de-Claix, France.

“Sale and Leaseback Transaction” means, with respect to any person, any arrangement with a lender or an investor providing for the leasing by such person of any property or asset of such person which has been or is being sold or transferred by such person to such lender or investor if such arrangement is accounted for as a capitalized lease by such person under GAAP.

“Senior Indebtedness” has the meaning assigned to such term in the Senior Subordinated Note Indenture.

“Senior Subordinated Note Indenture” means the indenture among the Company, the Subsidiary Guarantors party thereto and The Bank of New York, as trustee, pursuant to which the Company issued the Senior Subordinated Notes.

“Senior Subordinated Notes” means the 10.875% Senior Subordinated Notes Due 2009 issued by the Company pursuant to the Senior Subordinated Note Indenture.

“Significant Asset Sale” means an Asset Sale of (x) any of the Company’s or its Restricted Subsidiaries’ plants that (a) has a fair market value in excess of $50 million or (b) for Net Proceeds in excess of $50 million (a “Significant Asset”) or (y) a controlling interest in any Restricted Subsidiary that owns a Significant Asset (other than, in each case, an involuntary disposition, to the extent that the Existing Credit Facility (but not any refinancing thereof other than a credit facility with commercial banks and other lenders) permits the proceeds thereof to be reinvested prior to any mandatory prepayment of amounts outstanding thereunder).

“Significant Subsidiary” means any Restricted Subsidiary that would be a “significant subsidiary” as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the Act, as such Regulation is in effect on the Issue Date.

“Specified Joint Ventures” means (i) Equistar Chemicals, LP, (ii) LYONDELL-CITGO Refining LP and (iii) Lyondell Methanol Company, L.P.

“S&P” means Standard & Poor’s Corporation and its successors.

“Stated Maturity” means, with respect to any installment of interest or principal on any series of Indebtedness, the date on which such payment of interest or principal was scheduled to be paid in the original documentation governing such Indebtedness (or any later date established by any amendment to such original documentation) and shall not include any contingent obligations to repay, redeem or repurchase any such interest or principal prior to the date originally scheduled for the payment thereof.

“Subject Assets” means, with respect to any Major Asset Sale, the assets that are the subject of such Major Asset Sale.

“Subject Assets Transferee” means any Restricted Subsidiary or Joint Venture that becomes the owner of Subject Assets in connection with a Major Asset Sale.

85

“Subsidiary” means, with respect to any person, (i) any corporation, association or other business entity of which more than 50% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by such person or one or more of the other Subsidiaries of that person (or a combination thereof) or (ii) any partnership (a) the sole general partner or the managing general partner of which is such person or a Subsidiary of such person or (b) the only general partners of which are such person or one or more Subsidiaries of such person (or any combination thereof) or (c) that is a Specified Joint Venture and as to which (i) a general partner of which is such person or a Subsidiary of such person, (ii) such person owns, directly or indirectly, 50% or more of the partnership interests of such Specified Joint Venture and (iii) the Board of Directors of such person has designated such Specified Joint Venture to be a “Subsidiary” (which designation shall be irrevocable for so long as such Specified Joint Venture satisfies the foregoing requirements). As of the Issue Date, none of the Specified Joint Ventures, other than Lyondell Methanol Company, L.P., are Subsidiaries of the Company. No Specified Joint Venture that otherwise would be a “Subsidiary” under this definition shall be deemed to be or become a Subsidiary or a Restricted Subsidiary until such designation would not result in a Default under “Certain Covenants—Incurrence of Indebtedness and Issuance of Preferred Stock” (provided that, if (i) such Specified Joint Venture would otherwise be or become a “Subsidiary” as a result of an Investment by the Company or any Restricted Subsidiary made after June 12, 2002, and (ii) such Investment is not made in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary or Joint Venture of the Company) of, Qualified Equity Interests of the Company, then this sentence shall not apply); at such time as the designation of such Specified Joint Venture would not result in a Default under “Certain Covenants—Incurrence of Indebtedness and Issuance of Preferred Stock,” such Specified Joint Venture shall automatically be a Subsidiary and a Restricted Subsidiary (unless designated as an Unrestricted Subsidiary).

“Subsidiary Guarantor” means (i) ARCO Chemical Technology, Inc., ARCO Chemical Technology, L.P. and Lyondell Chemical Nederland, Ltd. and (ii) any other Subsidiary that executes a Subsidiary Guarantee in accordance with the provisions of the indenture, in each case, until the Subsidiary Guarantee of such person is released in accordance with the provisions of the indenture.

“TDI Agreements” means (i) the Share Purchase Agreement dated as of January 23, 1995 between ARCO Chemical Europe Inc. and Rhone-Poulenc Chemie S.A., as such agreement may be amended, supplemented or otherwise modified from time to time, (ii) the Processing Agreement dated as of January 23, 1995 between ARCO Chemical Chemie TDI and Rhone-Poulenc Chemie S.A., as such agreement may be amended, supplemented or otherwise modified from time to time, and (iii) the TDI License.

“TDI Assets” means (i) all rights of ARCO Chemical Europe Inc., ARCO Chemical Chemie TDI, ARCO Chemical Technology, L.P. and their respective successors under the TDI Agreements and (ii) all of Lyondell TDI’s customer lists relating to the Rhodia TDI Plant.

“TDI License” means the TDI Technology Agreement dated as of January 23, 1995 between ARCO Chemical Technology, L.P. and Rhone-Poulenc Chemie S.A., as such agreement may be amended, supplemented or otherwise modified from time to time.

“Unrestricted Subsidiary” means (i) any Subsidiary of the Company that is designated by the Board of Directors of the Company as an Unrestricted Subsidiary pursuant to a board resolution, (ii) any Subsidiary of an Unrestricted Subsidiary and (iii) any Accounts Receivable Subsidiary. The Board of Directors may designate any Subsidiary of the Company (including any newly acquired or newly formed Subsidiary) to be an Unrestricted Subsidiary unless such Subsidiary or any of its Subsidiaries owns any Equity Interest or Indebtedness of, or holds any Lien on any property of, the Company or any other Subsidiary of the Company that is not a Subsidiary of the Subsidiary to be so designated; provided that

(a) any Guarantee (other than as a co-obligor of the Equistar Assumed Debt so long as the Equistar Assumed Debt is not considered Indebtedness of the Company pursuant to the definition thereof) by the

86

Company or any Restricted Subsidiary of any Indebtedness of the Subsidiary being so designated shall be deemed an “Incurrence” of such Indebtedness and an “Investment” by the Company or such Restricted Subsidiary (or both, if applicable) at the time of such designation,

(b) either (i) the Subsidiary to be so designated has total assets of $1,000 or less or (ii) if such Subsidiary has assets greater than $1,000, such designation would be permitted under the covenant described above under the caption “Certain Covenants—Restricted Payments,”

(c) if applicable, the Investment and the incurrence of Indebtedness referred to in clause (a) of this proviso would be permitted under the covenants described above under the captions “Certain Covenants—Restricted Payments” and “Certain Covenants—Incurrence of Indebtedness and Issuance of Preferred Stock” and

(d) in the case of any Subsidiary that is a Joint Venture as of the date of its designation as an Unrestricted Subsidiary, such Subsidiary has an aggregate of 15% or more of its outstanding Capital Stock or other voting interests (other than directors’ qualifying shares) held by another person other than the Company or any Restricted Subsidiary or any Affiliate of the Company.

Any such designation by the Board of Directors of the Company pursuant to clause (i) above shall be evidenced to the Trustee by filing with the Trustee a certified copy of the Board Resolution giving effect to such designation and an officers’ certificate certifying that such designation complied with the foregoing conditions and was permitted by the covenants described above under the captions “Certain Covenants—Restricted Payments” and “Certain Covenants—Incurrence of Indebtedness and Issuance of Preferred Stock.”

If (i) at any time, any Unrestricted Subsidiary would fail to meet the foregoing requirements of clause (d) (because the Company has acquired more than 85% of the outstanding Capital Stock or other voting interests of any Subsidiary that was a Joint Venture on the date of its designation as an Unrestricted Subsidiary), or (ii) at any time the Company or any Restricted Subsidiary Guarantees any Indebtedness of such Unrestricted Subsidiary or makes any other Investment in such Unrestricted Subsidiary and such incurrence of Indebtedness or Investment would not be permitted under the covenants described above under the caption “Certain Covenants—Incurrence of Indebtedness and Issuance of Preferred Stock” or “Certain Covenants—Restricted Payments,” it shall thereafter cease to be an Unrestricted Subsidiary for purposes of the indenture and any Indebtedness of such Subsidiary shall be deemed to be incurred by a Restricted Subsidiary of the Company as of such date (and, if such Indebtedness is not permitted to be incurred as of such date under the covenant described above under the caption “Certain Covenants—Incurrence of Indebtedness and Issuance of Preferred Stock,” the Company shall be in default of such covenant). The Board of Directors of the Company may at any time designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided that such designation shall be deemed to be an incurrence of Indebtedness by a Restricted Subsidiary of the Company of any outstanding Indebtedness of such Unrestricted Subsidiary and such designation shall be permitted only if (i) such Indebtedness is permitted under the covenant described above under the caption “Certain Covenants—Incurrence of Indebtedness and Issuance of Preferred Stock” and (ii) no Default or Event of Default would be in existence following such designation.

“Weighted Average Life to Maturity” means, when applied to any Indebtedness at any date, the number of years obtained by dividing (i) the sum of the products obtained by multiplying (a) the amount of each then remaining installment, sinking fund, serial maturity or other required payments of principal, including payment at final maturity, in respect thereof, by (b) the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment, by (ii) the then outstanding principal amount of such Indebtedness.

“Wholly Owned Restricted Subsidiary” of any person means a Restricted Subsidiary of such person all the outstanding Equity Interests of which (other than directors’ qualifying shares) shall at the time be owned by such person or by one or more Wholly Owned Restricted Subsidiaries of such person or by such person and one or more Wholly Owned Restricted Subsidiaries of such person.

87

“Wholly Owned Subsidiary” of any person means a Subsidiary of such person all the outstanding Equity Interests of which (other than directors’ qualifying shares) shall at the time be owned by such person or by one or more Wholly Owned Subsidiaries of such person or by such person and one or more Wholly Owned Subsidiaries of such person.

Book-Entry, Delivery and Form

The following discussion regarding “Book-Entry, Delivery and Form” concerns only the new notes offered hereby.

The new notes will initially be represented by one or more permanent global notes in definitive, fully registered book-entry form (the “Global Notes”) and registered in the name of Cede & Co., as nominee of DTC. The Global Notes will be deposited on behalf of the acquirors of the new notes with a custodian for DTC for credit to the respective accounts of acquirors or such other accounts as they direct DTC. See “The Exchange Offer—Procedures for Tendering—Book-Entry Transfer.”

The Global Notes

We expect that under procedures established by DTC:

• upon deposit of the Global Notes with DTC or its custodian, DTC will credit on its internal system a portion of the Global Notes that shall be composed of the corresponding respective amounts of the Global Notes to the respective accounts of persons who have accounts with the depository, and

• ownership of the notes will be shown on, and the transfer or ownership will be effected only through records maintained by DTC or its nominee, with respect to interests and records of participants and with respect to interests of persons other than participants.

So long as DTC or its nominee is the registered owner of the Global Notes, DTC or its nominee, as the case may be, will be considered the sole owner or holder of the new notes represented by the Global Notes for all purposes under the indenture and under the new notes represented thereby. Except as provided below, owners of beneficial interest in Global Notes will not:

• be entitled to have new notes represented by Global Notes registered in their names,

• receive or be entitled to receive physical delivery of certificated new notes or

• be considered the owners or holders of the Global Notes under the indenture for any purpose, including with respect to the giving of any direction, instruction or approval to the trustee.

Payments of the principal of, and interest on, a Global Note will be made to DTC or its nominee, as the case may be, as the registered owner thereof. None of the Company, the Subsidiary Guarantors, the Trustee or any paying agent will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests in a Global Note or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests.

We expect that DTC or its nominee, upon receipt of any payment of principal or interest in respect of a Global Note, will credit participants’ accounts with payments in amounts proportionate to their respective beneficial interests in the principal amount of such Global Note as shown on the records of DTC or its nominee. We also expect that payments by participants to owners of beneficial interests in such Global Note held through such participants will be governed by standing instructions and customary practices, as is now the case with securities held for the accounts of customers registered in the names of nominees for such customers. Such payments will be the responsibility of such participants.

88

Transfers between participants in DTC will be effected in the ordinary way in accordance with DTC rules and will be settled in same-day funds. Transfers between participants in Euroclear and Clearstream will be effected in the ordinary way in accordance with their respective rules and operating procedures.

We expect that DTC will take any action permitted to be taken by a holder of new notes (including the presentation of new notes for exchange as described below) only at the direction of one or more participants to whose account the DTC interest in a Global Note is credited and only in respect of such portion of the aggregate principal amount of notes as to which such participant or participants has or have given such direction. However, if there is an Event of Default under the indenture or the new notes, DTC will exchange the applicable Global Note for Certificated Notes, which it will distribute to its participants.

Although DTC, Euroclear and Clearstream are expected to follow the foregoing procedures in order to facilitate transfers of interests in a Global Note among participants of DTC, Euroclear and Clearstream, they are under no obligation to perform or continue to perform such procedures, and such procedures may be discontinued at any time. None of the Company, the Subsidiary Guarantors or the Trustee will have any responsibility for the performance by DTC, Euroclear or Clearstream or their respective participants or indirect participants of their respective obligations under the rules and procedures governing their operations.

Description of DTC

The description of the operations of DTC set forth below is provided solely as a matter of convenience. These operations and procedures are solely within the control of DTC and are subject to change from time to time. We do not take any responsibility for these operations or procedures, and investors are urged to contact DTC or it participants directly to discuss these matters.

DTC has advised us that it is:

• a limited purpose trust company organized under the laws of the State of New York;

• a “banking organization” within the meaning of New York Banking Law;

• a member of the Federal Reserve System;

• a “clearing corporation” within the meaning of the Uniform Commercial Code; and

• a “Clearing Agency” registered pursuant to the provisions of Section 17A of the Exchange Act.

DTC was created to hold securities for its participants and facilitate the clearance and settlement of securities transactions between participants through electronic book-entry changes in accounts of its participants, thereby eliminating the need for physical movement of certificates. DTC is owned by a number of its participants and by the New York Stock Exchange, Inc., the American Stock Exchange, Inc. and the National Association of Securities Dealers, Inc. DTC’s direct Participants include:

• securities brokers and dealers;

• banks, trust companies; and

• clearing corporations and certain other organizations.

Indirect access to the DTC system is available to others such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a participant, either directly or indirectly (indirect participants). Investors who are not participants may beneficially own securities held by or on behalf of DTC only through participants or indirect participants.

The rules applicable to DTC and its participants are on file with the SEC.

89

Certificated Notes

Interest in the Global Notes may be exchanged for certificated securities if:

• we notify the Trustee in writing that DTC is no longer willing or able to at as a depositary or DTC ceases to be registered as a clearing agency under the Securities Exchange Act and a successor depositary is not appointed within 90 days of notice or cessation;

• we, at our option, notify the Trustee in writing that we elect to cause the issuance of notes in certificated form under the indenture; or

• other events occur as provided in the indenture.

Upon the occurrence of any of the events described in the preceding sentence, we will cause the appropriate certificated securities to be delivered.

None of the Company, any Subsidiary Guarantor or the Trustee shall be liable for any delay by DTC or any participant or indirect participant in identifying the beneficial owners of the related new notes, and each person may conclusively rely on, and shall be protected in relying on, instructions from DTC for all purposes, including with respect to the registration and delivery, and the respective principal amounts, of the new notes to be issued.

Same Day Settlement and Payment

The indenture requires that payments in respect of the new notes represented by the Global Notes (including principal, premium, if any, interest and liquidated damages, if any) be made by wire transfer of immediately available same day funds to the accounts specified by the holder of the Global Notes. With respect to new notes in certificated form, we will make all payments at the agency or office maintained for such purpose or, at our option, by mailing a check to each holder’s registered address.

Because of time zone differences, the securities account of a Euroclear or Clearstream participant purchasing an interest in a Global Note from a participant in DTC will be credited, and any such crediting will be reported to the relevant Euroclear or Clearstream participant, during the securities settlement processing day (which must be a business day for Euroclear and Clearstream) immediately following the settlement date of DTC. DTC has advised us that cash received in Euroclear or Clearstream as a result of sales of interests in a global note by or through a Euroclear or Clearstream participant to a participant in DTC will be received with value on the settlement date of DTC but will be available in the relevant Euroclear or Clearstream cash account only as of the business day for Euroclear or Clearstream following DTC’s settlement date.

As used below in this “Description of New Notes,” except as otherwise specified, the term “new note” and “new notes” means the new notes offered hereby together with any outstanding unregistered notes that are not validly tendered and exchanged in the exchange offer. All such notes will vote together as a single class for all purposes under the indenture.

90

CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS FOR

NON-U.S. HOLDERS OF NOTES

The following general discussion summarizes certain of the material United States federal income tax consequences of the exchange of the outstanding notes for the new notes and the ownership and disposition of the new notes applicable to Non-U.S. Holders. For purposes of this discussion, “Non-U.S. Holder” generally means any beneficial owner of notes other than (i) a citizen or resident of the United States, (ii) a corporation created or organized in the United States or under the laws of the United States or any political subdivision thereof, (iii) an estate the income of which is includible in its gross income for United States federal income tax purposes without regard to its source, or (iv) a trust if a court within the United States is able to exercise primary supervision over its administration and one or more United States persons have the authority to control all substantial decisions of the trust. If a partnership (including for this purpose an entity treated as a partnership for United States federal income tax purposes) is a beneficial owner of notes, the treatment of a partner in the partnership will generally depend upon the status of the partner and upon the activities of the partnership. Non-U.S. Holders should consult their tax advisors about the United States federal income tax consequences of holding notes through a partnership.

This discussion is a summary for general information only and does not consider all aspects of United States federal income taxation that may be relevant to a Non-U.S. Holder in light of that Non-U.S. Holder’s particular circumstances, nor does it address the federal income tax consequences to Non-U.S. Holders subject to special treatment under the federal income tax laws, such as brokers or dealers in securities or currencies, certain securities traders, tax-exempt entities, banks, thrifts, insurance companies, other financial institutions, persons that hold the notes as a position in a “straddle” or as part of a “synthetic security,” “hedging,” “conversion” or other integrated instrument, persons that acquire notes in connection with the performance of services, investors in pass-through entities and certain United States expatriates. Further, this summary does not address any state, local or foreign tax consequences of the exchange of outstanding notes for the new notes or the ownership or disposition of the new notes.

Non-U.S. Holders should consult their own tax advisors concerning the application of federal income tax laws, as well as the laws of any state, local, or foreign taxing jurisdiction to the exchange of outstanding notes for new notes and the ownership and disposition of new notes in their particular situations.

Exchange Offer

The exchange of any outstanding note for a new note in the exchange offer will not constitute a taxable exchange of the outstanding note. As a result, each Non-U.S. Holder will have the same adjusted tax basis and holding period in the new notes as it had in the outstanding notes immediately before the exchange. Accordingly, the discussion below makes no distinction between the outstanding notes and the new notes.

Payment of Interest

Interest paid by Lyondell to Non-U.S. Holders will generally not be subject to United States federal income or withholding tax provided that:

• the beneficial owner of the note does not actually or constructively own 10% or more of the total combined voting power of all classes of stock of Lyondell entitled to vote;

• the beneficial owner of the note is not a controlled foreign corporation that is related to Lyondell through stock ownership; and

• the requirements of section 871(h) or 881(c) of the United States Internal Revenue Code of 1986, as amended to the date hereof (the “Code”), are satisfied as described below under the heading “Owner Statement Requirement.”

91

Notwithstanding the above, unless the holder qualifies for an exemption from such tax or a lower tax rate under an applicable treaty, a Non-U.S. Holder that is engaged in the conduct of a United States trade or business will be subject to:

• United States federal income tax on interest that is effectively connected with the conduct of such trade or business; and

• if the Non-U.S. Holder is a corporation, a United States branch profits tax equal to 30% (or lower treaty rate, if applicable) of its “effectively connected earnings and profits” as adjusted for the taxable year.

Gain on Disposition

A Non-U.S. Holder will generally not be subject to United States federal income tax on gain recognized on a sale, redemption or other disposition of a note unless:

• the gain is effectively connected with the conduct of a trade or business within the United States by the Non-U.S. Holder; or

• in the case of a Non-U.S. Holder who is a nonresident alien individual, such holder is present in the United States for 183 or more days during the taxable year and certain other requirements are met.

However, to the extent that disposition proceeds represent interest accruing between interest payment dates, a Non-U.S. Holder may be required to establish an exemption from United States federal income tax. (See “Payment of Interest” above.)

Any gain recognized on a sale, redemption or other disposition of a note that is effectively connected with the conduct of a United States trade or business by a Non-U.S. Holder will be subject to United States federal income tax on a net income basis in the same manner as if such holder were a United States person and, if such Non-U.S. Holder is a corporation, such gain may also be subject to the 30% United States branch profits tax (or lower treaty rate, if applicable) described above.

Federal Estate Taxes

A note held by an individual who at the time of death is not a citizen or resident of the United States for United States federal estate tax purposes will not be subject to United States federal estate tax as a result of such individual’s death, provided that:

• the individual does not actually or constructively own 10% or more of the total combined voting power of all classes of stock of Lyondell entitled to vote; and

• the interest accrued on the note was not effectively connected with a United States trade or business of the individual at the individual’s death.

Owner Statement Requirement

In order to claim an exemption from United States federal withholding tax with respect to payments of interest on a note, sections 871(h) and 881(c) of the Code require that either the beneficial owner of the note or a securities clearing organization, bank or other financial institution that holds customers’ securities in the ordinary course of its trade or business and that holds a note on behalf of such owner file a statement with Lyondell or its agent representing that the beneficial owner is not a United States person. Under current regulations, this requirement will be satisfied if the Company or its agent receives:

• a statement from the beneficial owner certifying under penalty of perjury that such owner is not a United States person and that provides certain information required under the regulations; or

• a statement from the financial institution holding the note on behalf of the beneficial owner certifying, under penalties of perjury, that it has received Lyondell’s statement, together with a copy of the owner’s statement.

The beneficial owner must inform Lyondell or its agent, as applicable, or the financial institution, as applicable, within 30 days of any change in information on the owner’s statement.

92

The United States federal income tax discussion set forth above is included for general information only and may not be applicable to a Non-U.S. Holder’s particular situation. Non-U.S. Holders of the notes should consult tax advisors with respect to the tax consequences to them of the exchange of the outstanding notes for the new notes and the ownership and disposition of the new notes, including the tax consequences under state, local, foreign and other tax laws and the possible effects of changes in United States federal or other tax laws.

93

PLAN OF DISTRIBUTION

Based on interpretations by the staff of the SEC in no action letters issued to third parties, we believe that you may transfer new notes issued under the exchange offer in exchange for the outstanding notes if:

• you acquire the new notes in the ordinary course of your business; and

• you are not engaged in, and do not intend to engage in, and have no arrangement or understanding with any person to participate in, a distribution of new notes.

Broker-dealers receiving new notes in the exchange offer will be subject to a prospectus delivery requirement with respect to resales of the new notes.

We believe that you may not transfer new notes issued under the exchange offer in exchange for the outstanding notes if you are:

• our “affiliate” within the meaning of Rule 405 under the Securities Act;

• a broker-dealer that acquired outstanding notes directly from us; or

• a broker-dealer that acquired outstanding notes as a result of market-making or other trading activities without compliance with the registration and prospectus delivery provisions of the Securities Act.

To date, the staff of the SEC has taken the position that participating broker-dealers may fulfill their prospectus delivery requirements with respect to transactions involving an exchange of securities such as this exchange offer, other than a resale of an unsold allotment from the original sale of the outstanding notes, with the prospectus contained in the exchange offer registration statement. In the registration rights agreement, we have agreed to permit participating broker-dealers to use this prospectus in connection with the resale of new notes. We have agreed that, for a period of up to 180 days after the closing of the exchange offer, we will make this prospectus, and any amendment or supplement to this prospectus, available to any broker-dealer that requests these documents in the letter of transmittal. In addition, until                     , 2003 all dealers effecting transactions in the new notes may be required to deliver a prospectus.

If you wish to exchange your outstanding notes for new notes in the exchange offer, you will be required to make representations to us as described in “The Exchange Offer—Purpose and Effect of the Exchange Offer” and “The Exchange Offer—Your Representations to Us” of this prospectus and in the letter of transmittal. In addition, if you are a broker-dealer who receives new notes for your own account in exchange for outstanding notes that were acquired by you as a result of market-making activities or other trading activities, you will be required to acknowledge that you will deliver a prospectus in connection with any resale by you of new notes.

We will not receive any proceeds from sale of new notes by broker-dealers. Broker-dealers who receive new notes for their own account in the exchange offer may sell them from time to time in one or more transactions either:

• in the over-the-counter market;

• in negotiated transactions;

• through the writing of options on the new notes or a combination of methods of resale; or

• at market prices or negotiated prices.

Any resale may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any broker-dealer or the purchasers of any new notes. Any broker-dealer that resells new notes it received for its own account in the exchange offer and any broker or dealer that participates in a distribution of new notes may be deemed to be an “underwriter” within the

94

meaning of the Securities Act. Any profit on any resale of new notes and any commissions or concessions received by any persons may be deemed to be underwriting compensation under the Securities Act. The letter of transmittal states that, by acknowledging that it will deliver and by delivery a prospectus, a broker-dealer will not be deemed to admit that it is an “underwriter” within the meaning the Securities Act.

We have agreed to pay all expenses incidental to the exchange offer other than commissions and concessions of any broker or dealers. We will indemnify holders of the outstanding notes, including any broker-dealers, against some liabilities, including liabilities under the Securities Act, as provided in the registration rights agreement.

LEGAL MATTERS

Baker Botts L.L.P., Houston, Texas, counsel for Lyondell Chemical Company, has issued an opinion about the legality of the new notes.

EXPERTS

The consolidated financial statements of Lyondell Chemical Company as of December 31, 2002 and 2001 and for each of the three years in the period ended December 31, 2002, incorporated in this prospectus by reference to the Lyondell Chemical Company Annual Report on Form 10-K for the year ended December 31, 2002, have been so incorporated in reliance on the report of PricewaterhouseCoopers LLP, independent accountants, given on the authority of said firm as experts in accounting and auditing.

The consolidated financial statements of Equistar Chemicals, LP as of December 31, 2002 and 2001 and for each of the three years in the period ended December 31, 2002, incorporated in this prospectus by reference to the Lyondell Chemical Company Annual Report on Form 10-K for the year ended December 31, 2002, have been so incorporated in reliance on the report of PricewaterhouseCoopers LLP, independent accountants, given on the authority of said firm as experts in accounting and auditing.

The financial statements of LYONDELL-CITGO Refining LP as of December 31, 2002 and 2001 and for each of the three years in the period ended December 31, 2002, incorporated in this prospectus by reference to the Lyondell Chemical Company Annual Report on Form 10-K for the year ended December 31, 2002, have been so incorporated in reliance on the report of PricewaterhouseCoopers LLP, independent accountants, given on the authority of said firm as experts in accounting and auditing.

95

Lyondell Chemical Company

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 20.    Indemnification of Directors and Officers

Delaware General Corporation Law

Section 102(b)(7) of the Delaware General Corporation Law permits a corporation to provide in its certificate of incorporation that a director of the corporation shall not be personally liable to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability for any of the following:

• any breach of the director’s duty of loyalty to the corporation or its stockholders,

• acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law,

• payments of unlawful dividends or unlawful stock repurchases or redemptions, or

• any transaction from which the director derived an improper personal benefit.

Any repeal or modification of such provisions shall not adversely affect any right or protection of a director for or with respect to any acts or omissions of such director occurring prior to such amendment or repeal. Our Amended and Restated Certificate of Incorporation provides that no director shall be personally liable to us or any of our stockholders for monetary damages for breach of fiduciary duty as a director to the fullest extent permitted by Delaware law.

Under Section 145 of the Delaware General Corporation Law, a corporation may indemnify any individual made a party or threatened to be made a party to any type of proceeding, other than an action by or in the right of the corporation, because he or she is or was an officer, director, employee or agent of the corporation or was serving at the request of the corporation as an officer, director, employee or agent of another corporation or entity against expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred in connection with such proceeding: (1) if he or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the corporation; or (2) in the case of a criminal proceeding, he or she had no reasonable cause to believe that his or her conduct was unlawful. A corporation may indemnify any individual made a party or threatened to be made a party to any threatened, pending or completed action or suit brought by or in the right of the corporation because he or she was an officer, director, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation or other entity, against expenses actually and reasonably incurred in connection with such action or suit if he or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the corporation, provided that such indemnification will be denied if the individual is found liable to the corporation unless, in such a case, the court determines the person is nonetheless entitled to indemnification for such expenses. A corporation must indemnify a present or former director or officer who successfully defends himself or herself in a proceeding to which he or she was a party because he or she was a director or officer of the corporation against expenses actually and reasonably incurred by him or her. Expenses incurred by an officer or director, or any employees or agents as deemed appropriate by the board of directors, in defending civil or criminal proceedings may be paid by the corporation in advance of the final disposition of such proceedings upon receipt of an undertaking by or on behalf of such director, officer, employee or agent to repay such amount if it shall ultimately be determined that he or she is not entitled to be indemnified by the corporation. The Delaware law regarding indemnification and expense advancement is not exclusive of any other rights which may be granted by our certificate of incorporation or bylaws, a vote of stockholders or disinterested directors, agreement or otherwise.

Bylaws

Our Amended and Restated Bylaws (“Bylaws”) contain indemnification rights for our directors and our officers. Specifically, the Bylaws provide that we shall indemnify our officers and directors with respect to all

II-1

matters to which Section 145 of the Delaware General Corporation Law may in any way relate, to the fullest extent permitted or allowed by the laws of the State of Delaware. Further, we may maintain insurance to protect us and any of our directors and officers or directors or officers of another corporation, partnership, joint venture, trust or other enterprise against expense, liability or loss. We may also enter into indemnity agreements with persons who are members of our Board of Directors, our elected officers and with other persons as the Board of Directors may designate.

Indemnity Agreements

We have entered or will enter into indemnity agreements (“Indemnity Agreements”) with each of our present and future directors and officers (individually, the “Indemnitee” and collectively, the “Indemnitees”). Each provides for the indemnification of and the advancing of expenses to the Indemnitee to the fullest extent permitted by Delaware law. More specifically, each Indemnity Agreement provides (i) that an Indemnitee is automatically entitled to indemnification for expenses to the extent an Indemnitee (including the Indemnitee’s estate, heirs, executors, and administrators) is successful in defending any indemnifiable claim whether on the merits or otherwise, (ii) that an Indemnitee is entitled to the advancement of expenses during the pendency of a proceeding, (iii) that we have the burden of proving that an Indemnitee is not entitled to indemnification and negates certain presumptions that may otherwise be drawn against an Indemnitee, (iv) a mechanism through which an Indemnitee may seek court relief in the event the Reviewing Party (as defined in the Indemnity Agreements) determines that the Indemnitee would not be entitled to be indemnified, (v) that an Indemnitee is entitled to indemnification against all expenses (including attorneys’ fees) incurred in seeking to collect an indemnity claim or advancement of expenses from us and (vi) that after there has been a Change of Control (as defined in the Indemnity Agreements), all of our determinations regarding a right to indemnity, and the right to advancement of expenses, shall be made by independent legal counsel.

In the event of a Potential Change in Control (as defined in the Indemnity Agreements), the Indemnity Agreements require us, upon written request of the Indemnitee, to create a trust to indemnify the Indemnitee and to fund such trust in an amount sufficient to cover expenses reasonably anticipated. Upon a Change of Control, the trust would become irrevocable and the funds committed to such trust would not be available to us for use as working capital. All unexpended funds in the trust will revert to us upon a final court determination that an Indemnitee has been fully indemnified under the terms of the Indemnity Agreement.

Indemnitees’ rights under the Indemnity Agreements are not exclusive of any other rights they may have under Delaware Law, directors’ and officers’ liability insurance, our Bylaws or otherwise. However, the Indemnity Agreements do prevent double payment.

If, in the future, because of changes in Delaware Law or otherwise, we determine that the Indemnity Agreements do not provide indemnification to the fullest extent of the Delaware law, we intend to amend such agreements, or enter into new agreements with directors and officers, to provide, in our judgment, for full indemnification.

We believe that the Bylaws and the Indemnity Agreements are largely confirmatory of Delaware law. However, the provisions of the Bylaws and the Indemnity Agreements apply to proceedings arising from acts or omissions occurring before or after their respective adoption or execution. In addition, the contract right explicitly created in the Indemnity Agreements gives the Indemnitee protection against a subsequent, adverse change in the indemnification provisions of our Bylaws, such as might occur in the event of a Change of Control (as defined in the Indemnity Agreements). Upon a Change of Control, the establishment of a trust fund pursuant to the Indemnity Agreements might facilitate indemnification payments, but would not broaden the rights to indemnity thereunder. Furthermore, under the Delaware Law, the advance of litigation expenses is discretionary; under the Indemnity Agreements, such advance is mandatory absent a special determination to the contrary. Litigation expenses incurred by an Indemnitee in a proceeding to seek recovery of amounts due under the Indemnity Agreement are recoverable under the Indemnity Agreement if the Indemnitee is successful in whole or in part. In the absence of the Indemnity Agreement, such expenses might not have been recoverable.

II-2

Unlike Delaware law, which authorizes the payment of expenses (including legal fees) in a stockholders’ derivative suit, but not of any other amounts, such as fees or settlements, the Indemnity Agreements do not distinguish between indemnification for claims brought by or in the right of Lyondell Chemical Company and indemnification for claims brought by third parties. Accordingly, we would be permitted under an Indemnity Agreement to indemnify an Indemnitee within the limits established by law and public policy.

ITEM 21.    Exhibits

Exhibit No.	Exhibit
*3.1	Certificate of Incorporation of ARCO Chemical Technology, Inc., as amended (Filed as an exhibit to Lyondell’s Registration Statement on Form S-4 (No. 333-76536-01) and incorporated herein by reference)
*3.2	By-Laws of ARCO Chemical Technology, Inc. (Filed as an exhibit to Lyondell’s Registration Statement on Form S-4 (No. 333-76536-01) and incorporated herein by reference)
*3.3	Certificate of Incorporation of Lyondell Chemical Nederland, Ltd. (Filed as an exhibit to Lyondell’s Registration Statement on Form S-4 (No. 333-76536-01) and incorporated herein by reference)
*3.4	Amended and Restated By-Laws of Lyondell Chemical Nederland, Ltd. (Filed as an exhibit to Lyondell’s Registration Statement on Form S-4 (No. 333-76536-01) and incorporated herein by reference)
*3.5	Amended and Restated Certificate of Incorporation of Lyondell Chemical Company (Filed as an exhibit to Lyondell’s Current Report on Form 8-K filed on October 22, 2002 and incorporated herein by reference)
*3.6	Amended and Restated By-Laws of Lyondell Chemical Company (Filed as an exhibit to Lyondell’s Annual Report on Form 10-K for the year ended December 31, 2001 and incorporated herein by reference)
*3.7	Certificate of Limited Partnership of ARCO Chemical Technology, L.P. (Filed as an exhibit to Lyondell’s Registration Statement on Form S-4 (No. 333-76536-01) and incorporated herein by reference)
*3.8	Agreement of Limited Partnership of ARCO Chemical Technology, L.P. (Filed as an exhibit to Lyondell’s Registration Statement on Form S-4 (No. 333-76536-01) and incorporated herein by reference)
4.1	Registration Rights Agreement dated as of May 20, 2003 by and among Lyondell Chemical Company, ARCO Chemical Technology, Inc., ARCO Chemical Technology, L.P., Lyondell Chemical Nederland, Ltd. and Citigroup Global Markets Inc., Banc of America Securities LLC, Credit Suisse First Boston LLC and J.P. Morgan Securities Inc.
4.2	Indenture among Lyondell Chemical Company, the Subsidiary Guarantors party thereto and The Bank of New York, as Trustee, dated as of May 20, 2003, for 10 1/2% Senior Secured Notes due 2013
4.3	Form of Global Note (included as Exhibit A to Exhibit 4.2 above)
5	Opinion of Baker Botts L.L.P.
12	Statement setting forth detail for Computation of Ratio of Earnings to Fixed Charges
23.1	Consent of PricewaterhouseCoopers LLP
23.2	Consent of Baker Botts L.L.P. (included in Exhibit 5)
24.1	Powers of Attorney for Lyondell Chemical Company
24.2	Powers of Attorney for ARCO Chemical Technology, L.P.

II-3

Exhibit No.	Exhibit
24.3	Powers of Attorney for Lyondell Chemical Nederland, Ltd.
24.4	Powers of Attorney for ARCO Chemical Technology, Inc.
25	Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of the Trustee for the 10 1/2% Senior Secured Notes due 2013
99.1	Form of Letter to DTC Participants
99.2	Form of Letter to Clients
99.3	Form of Notice of Guaranteed Delivery
99.4	Form of Letter of Transmittal

* Incorporated by reference from the filing indicated.

ITEM 22.    Undertakings

1.    The undersigned registrants hereby undertake:

• to file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement to:

- include any prospectus required by section 10(a)(3) of the Securities Act of 1933;

- include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to information in the registration statement; and

- reflect in the prospectus any facts or events arising after the effective date of the registration statement or its most recent post-effective amendment which, individually or in the aggregate, represent a fundamental change in the information shown in the registration statement.

Any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the SEC under Rule 424(b) of the Securities Act if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price stated in the “Calculation of Registration Fee” table in the effective registration statement;

• that, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

• to remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

2.    The undersigned registrants hereby undertake that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrants’ annual report under section 13(a) or section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report

II-4

pursuant to section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering.

3.    Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrants pursuant to the foregoing provisions, or otherwise, the registrants have been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrants will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

4.    The undersigned registrants hereby undertake to respond to requests for information that is incorporated by reference into the prospectus under items 4, 10(b), 11, or 13 of this Form, within one business day of receipt of a request, and to send the incorporated documents by first-class mail or other equally prompt means. This undertaking includes information contained in documents filed after the effective date of the registration statement through the date of responding to the request.

5.    The undersigned registrants hereby undertake to supply by means of a posteffective amendment all information concerning a transaction, and the company being acquired therein, that was not the subject of and included in the registration statement when it became effective.

II-5

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, Lyondell Chemical Company has duly caused this Registration Statement or amendment thereto to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Houston, the State of Texas, on July 11, 2003.

LYONDELL CHEMICAL COMPANY
By:	/s/    KERRY A. GALVIN
	Kerry A. Galvin Senior Vice President, General Counsel and Secretary

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement or amendment thereto has been signed by the following persons in the capacities indicated and on July 11, 2003.

Signature	Title
* Dr. William T. Butler	Chairman of the Board
* Dan F. Smith	President, Chief Executive Officer and Director (Principal Executive Officer)
* Carol A. Anderson	Director
* Travis Engen	Director
* Stephen F. Hinchliffe, Jr.	Director
* David J. Lesar	Director
* Dudley C. Mecum II	Director
* Dr. William R. Spivey	Director
* Dr. Ray R. Irani	Director
* Stephen I. Chazen	Director
* T. Kevin DeNicola	Senior Vice President and Chief Financial Officer (Principal Financial Officer)
* Charles L. Hall	Vice President and Controller (Principal Accounting Officer)
*By:    /s/    KERRY A. GALVIN                 Kerry A. Galvin as Attorney-in-fact

II-6

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, ARCO Chemical Technology, Inc. has duly caused this Registration Statement or amendment thereto to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Greenville, the State of Delaware, on July 11, 2003.

ARCO CHEMICAL TECHNOLOGY, INC.
By:	/s/    FRANCIS P. MCGRAIL
	Francis P. McGrail President and Treasurer

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement or amendment thereto has been signed by the following persons in the capacities indicated and on July 11, 2003.

Signature	Title
/s/    FRANCIS P. MCGRAIL Francis P. McGrail	President and Treasurer (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)
* Eva Chu	Director
* Laura C. Fulton	Director
* Charles L. Hall	Director
* David J. Prilutski	Director
*By:    /s/    KERRY A. GALVIN Kerry A. Galvin, as Attorney-in-fact

II-7

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, ARCO Chemical Technology, L.P. has duly caused this Registration Statement or amendment thereto to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Greenville, the State of Delaware, on July 11, 2003.

ARCO CHEMICAL TECHNOLOGY, L.P.
By:	ARCO Chemical Technology Management, Inc., its general partner
By:	/s/    FRANCIS P. MCGRAIL Francis P. McGrail President and Treasurer, ARCO Chemical Technology Management, Inc.

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement or amendment thereto has been signed by the following persons in the capacities indicated and on July 11, 2003.

Signature	Title
/s/    FRANCIS P. MCGRAIL Francis P. McGrail	President, Treasurer and Director, ARCO Chemical Technology Management, Inc. (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer of ARCO Chemical Technology Management, Inc.)
* Eva Chu	Director, ARCO Chemical Technology Management, Inc.
* Laura C. Fulton	Director, ARCO Chemical Technology Management, Inc.
* Charles L. Hall	Director, ARCO Chemical Technology Management, Inc.
* David J. Prilutski	Director, ARCO Chemical Technology Management, Inc.
*By:    /s/    KERRY A. GALVIN Kerry A. Galvin as Attorney-in-fact

II-8

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, Lyondell Chemical Nederland, Ltd. has duly caused this Registration Statement or amendment thereto to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Houston, the State of Texas, on July 11, 2003.

LYONDELL CHEMICAL NEDERLAND, LTD.
By:	/s/    MORRIS GELB
	Morris Gelb, President

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement or amendment thereto has been signed by the following persons in the capacities indicated and on July 11, 2003.

Signature	Title
/s/    MORRIS GELB Morris Gelb	President (Principal Executive Officer)
* Laura C. Fulton	Director
* Charles L. Hall	Director
* Francis P. McGrail	Director
*   Karen A. Twitchell	Treasurer (Principal Financial Officer and Principal Accounting Officer)
*By:    /s/    KERRY A GALVIN                     Kerry A. Galvin, as Attorney-in-fact

II-9

INDEX TO EXHIBITS

Exhibit No.	Exhibit
*3.1	Certificate of Incorporation of ARCO Chemical Technology, Inc., as amended (Filed as an exhibit to Lyondell’s Registration Statement on Form S-4 (No. 333-76536-01) and incorporated herein by reference)
*3.2	By-Laws of ARCO Chemical Technology, Inc. (Filed as an exhibit to Lyondell’s Registration Statement on Form S-4 (No. 333-76536-01) and incorporated herein by reference)
*3.3	Certificate of Incorporation of Lyondell Chemical Nederland, Ltd. (Filed as an exhibit to Lyondell’s Registration Statement on Form S-4 (No. 333-76536-01) and incorporated herein by reference)
*3.4	Amended and Restated By-Laws of Lyondell Chemical Nederland, Ltd. (Filed as an exhibit to Lyondell’s Registration Statement on Form S-4 (No. 333-76536-01) and incorporated herein by reference)
*3.5	Amended and Restated Certificate of Incorporation of Lyondell Chemical Company (Filed as an exhibit to Lyondell’s Current Report on Form 8-K filed on October 22, 2002 and incorporated herein by reference)
*3.6	Amended and Restated By-Laws of Lyondell Chemical Company (Filed as an exhibit to Lyondell’s Annual Report on Form 10-K for the year ended December 31, 2001 and incorporated herein by reference)
*3.7	Certificate of Limited Partnership of ARCO Chemical Technology, L.P. (Filed as an exhibit to Lyondell’s Registration Statement on Form S-4 (No. 333-76536-01) and incorporated herein by reference)
*3.8	Agreement of Limited Partnership of ARCO Chemical Technology, L.P. (Filed as an exhibit to Lyondell’s Registration Statement on Form S-4 (No. 333-76536-01) and incorporated herein by reference)
4.1	Registration Rights Agreement dated as of May 20, 2003 by and among Lyondell Chemical Company, ARCO Chemical Technology, Inc., ARCO Chemical Technology, L.P., Lyondell Chemical Nederland, Ltd. and Citigroup Global Markets Inc., Banc of America Securities, LLC, Credit Suisse First Boston LLC and J.P. Morgan Securities Inc.
4.2	Indenture among Lyondell Chemical Company, the Subsidiary Guarantors party thereto and The Bank of New York, as Trustee, dated as of May 20, 2003, for 10 1/2% Senior Secured Notes due 2013
4.3	Form of Global Note (included as Exhibit A to Exhibit 4.2 above)
5	Opinion of Baker Botts L.L.P.
12	Statement setting forth detail for Computation of Ratio of Earnings to Fixed Charges
23.1	Consent of PricewaterhouseCoopers LLP
23.2	Consent of Baker Botts L.L.P. (included in Exhibit 5)
24.1	Powers of Attorney for Lyondell Chemical Company
24.2	Powers of Attorney for ARCO Chemical Technology, L.P.
24.3	Powers of Attorney for Lyondell Chemical Nederland, Ltd.
24.4	Powers of Attorney for ARCO Chemical Technology, Inc.
25	Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of the Trustee for 10 1/2% Senior Secured Notes due 2013
99.1	Form of Letter to DTC Participants
99.2	Form of Letter to Clients
99.3	Form of Notice of Guaranteed Delivery
99.4	Form of Letter of Transmittal

* Incorporated by reference from the filing indicated.

EX-4.1

                                                                     EXHIBIT 4.1


                          REGISTRATION RIGHTS AGREEMENT

                            Dated as of May 20, 2003
                                  by and among

                            Lyondell Chemical Company
                         ARCO Chemical Technology, Inc.
                         ARCO Chemical Technology, L.P.
                        Lyondell Chemical Nederland, Ltd.

                                       and

                          Citigroup Global Markets Inc.
                         Banc of America Securities LLC
                         Credit Suisse First Boston LLC
                           J.P. Morgan Securities Inc.


                                       1





     This Registration Rights Agreement (this "Agreement") is made and entered
into as of May 20, 2003, by and among Lyondell Chemical Company, a Delaware
corporation (the "Company"), 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"), and Citigroup
Global Markets Inc., Banc of America Securities LLC, Credit Suisse First Boston
LLC and J.P. Morgan Securities Inc., as representatives of the Initial
Purchasers listed on Schedule B to the Purchase Agreement referred to below
(each an "Initial Purchaser" and, collectively, the "Initial Purchasers"), each
of whom has agreed to purchase the Company's 10 1/2% Senior Secured Notes due
2013 (the "Initial Notes") pursuant to the Purchase Agreement (as defined
below).

     This Agreement is made pursuant to the Purchase Agreement, dated May 15,
2003, (the "Purchase Agreement"), by and among the Company, the Guarantors and
the Initial Purchasers. In order to induce the Initial Purchasers to purchase
the Initial Notes, the Company and the Guarantors have agreed to provide the
registration rights set forth in this Agreement. The execution and delivery of
this Agreement is a condition to the obligations of the Initial Purchasers set
forth in Section 2 of the Purchase Agreement. Capitalized terms used herein and
not otherwise defined shall have the meaning assigned to them in the Indenture
relating to the Initial Notes among the Company, the Guarantors and The Bank of
New York, as trustee (the "Indenture").

     The parties hereby agree as follows:

     Section 1. Definitions.

     As used in this Agreement, the following capitalized terms shall have the
following meanings:

     Act: The Securities Act of 1933, as amended.

     Affiliate: As defined in Rule 144 of the Act.

     Broker-Dealer: Any broker or dealer registered under the Exchange Act.

     Closing Date: The date hereof.

     Commission: The Securities and Exchange Commission.

     Consummate: The Exchange Offer shall be deemed "Consummated" for purposes
of this Agreement upon the occurrence of (a) the filing and effectiveness


                                       2





under the Act of the Exchange Offer Registration Statement relating to Exchange
Notes to be issued in the Exchange Offer, (b) the maintenance of such Exchange
Offer Registration Statement continuously effective and the keeping of the
Exchange Offer open for a period not less than the period required pursuant to
Section 3(b) hereof and (c) the delivery by the Company to the Trustee under the
Indenture of Exchange Notes in the same aggregate principal amount as the
aggregate principal amount of Initial Notes validly tendered and not withdrawn
by Holders thereof pursuant to the Exchange Offer.

     Consummation Deadline: As defined in Section 3(b) hereof.

     Effectiveness Deadline: As defined in Sections 3(a) and 4(a) hereof.

     Exchange Act: The Securities Exchange Act of 1934, as amended.

     Exchange Notes: The Company's 10 1/2% Senior Secured Exchange Notes, due
2013 to be issued pursuant to the Indenture: (i) in the Exchange Offer or (ii)
as contemplated by Section 6(b) hereof.

     Exchange Offer: The exchange and issuance by the Company of a principal
amount of Exchange Notes (which shall be registered pursuant to the Exchange
Offer Registration Statement) equal to the outstanding principal amount of the
Initial Notes that are validly tendered and not withdrawn by Holders in
connection with such exchange and issuance.

     Exchange Offer Registration Statement: The Registration Statement relating
to the Exchange Offer for the Initial Notes, including the related Prospectus.

     Filing Deadline: As defined in Sections 3(a) and 4(a) hereof.

     Holders: As defined in Section 2 hereof.

     Majority Holders: As defined in Section 6(c)(xi) hereof.

     Prospectus: The prospectus included in a Registration Statement at the time
such Registration Statement is declared effective, as amended or supplemented by
any prospectus supplement and by all other amendments thereto, including
post-effective amendments, and all material incorporated by reference into such
Prospectus.

     Recommencement Date: As defined in Section 6(d) hereof.

     Registration Default: As defined in Section 5 hereof.




                                       3



     Registration Statement: The Exchange Offer Registration Statement or the
Shelf Registration Statement, in each case, (i) that is filed pursuant to the
provisions of this Agreement and (ii) including the Prospectus included therein,
all amendments and supplements thereto (including post-effective amendments) and
all exhibits and material incorporated by reference therein.

     Rule 144: Rule 144 promulgated under the Act.

     Shelf Registration Statement: As defined in Section 4 hereof.

     Suspension Notice: As defined in Section 6(d) hereof.

     Suspension Period: As defined in Section 4(c) hereof.

     TIA: The Trust Indenture Act of 1939 (15 U.S.C. Section 77aaa-77bbbb) as in
effect on the Closing Date.

     Transfer Restricted Securities: (I) Each Initial Note, until the earliest
to occur of (a) the date on which such Initial Note is exchanged in an Exchange
Offer for an Exchange Note and entitled to be resold to the public without
complying with the prospectus delivery requirements of the Act, (b) the date on
which such Initial Note has been disposed of in accordance with a Shelf
Registration Statement (and, if an Exchange Offer has been Consummated prior to
such purchase, purchasers thereof have been issued Exchange Notes), or (c) the
date on which such Initial Note is distributed to the public pursuant to Rule
144 under the Act (and, if an Exchange Offer has been Consummated prior to such
purchase, purchasers thereof have been issued Exchange Notes) or is saleable
pursuant to Rule 144(k) under the Act and (II) each Exchange Note issued to a
Broker-Dealer in an Exchange Offer until the date on which such Exchange Note is
disposed of by a Broker-Dealer pursuant to the "Plan of Distribution"
contemplated by the Exchange Offer Registration Statement (including the
delivery of the Prospectus contained therein).

     Section 2. Holders.

     A Person is deemed to be a holder of Transfer Restricted Securities (each,
a "Holder") whenever such Person owns Transfer Restricted Securities.

     Section 3. Registered Exchange Offer.

     (a) Unless the Exchange Offer shall not be permitted by applicable law or
Commission policy (after the procedures set forth in Section 6(a)(i) below have
been complied with), the Company and the Guarantors shall (i) cause the Exchange
Offer Registration Statement to be filed with the Commission as soon as
practicable after the Closing Date, but in no event later than 100 days after
the Closing Date (such 100th day being the "Filing Deadline"), (ii) use their


                                       4



reasonable best efforts to cause the Exchange Offer Registration Statement to
become effective at the earliest possible time, but in no event later than 210
days after the Closing Date (such 210th day being the "Effectiveness Deadline"),
(iii) in connection with the foregoing, (A) file all pre-effective amendments to
the Exchange Offer Registration Statement as may be necessary in order to cause
it to become effective, (B) file, if applicable, a post-effective amendment to
the Exchange Offer Registration Statement pursuant to Rule 430A under the Act
and (C) cause all necessary filings, if any, in connection with the registration
and qualification of the Exchange Notes to be made under the Blue Sky laws of
such jurisdictions as are necessary to permit Consummation of the Exchange
Offer, subject to the proviso contained in Section 6(c)(xii) below, and (iv)
upon the effectiveness of such Exchange Offer Registration Statement and within
the time period contemplated by Section 3(b) hereof, commence and Consummate the
Exchange Offer. The Exchange Offer shall be on the appropriate form available to
the Company permitting (i) registration of the Exchange Notes to be offered in
exchange for the Initial Notes that are Transfer Restricted Securities and (ii)
resales of Exchange Notes by Broker-Dealers that tendered into the Exchange
Offer Initial Notes that such Broker-Dealer acquired for its own account as a
result of market making activities or other trading activities (other than
Initial Notes acquired directly from the Company or any of its Affiliates) as
contemplated by Section 3(c) below.

     (b) The Company and the Guarantors shall use their respective reasonable
best efforts to cause the Exchange Offer Registration Statement to be effective
continuously, and shall keep the Exchange Offer open for a period of not less
than the minimum period required under applicable federal and state securities
laws to Consummate such Exchange Offer; provided, however, that in no event
shall such period be less than 20 Business Days. The Company and the Guarantors
shall cause the Exchange Offer to comply with all applicable federal and state
securities laws. No securities other than the Exchange Notes shall be included
in the Exchange Offer Registration Statement. The Company and the Guarantors
shall use their respective reasonable best efforts to cause the Exchange Offer
to be Consummated on the earliest practicable date after the Exchange Offer
Registration Statement has become effective, but in no event later than 30
Business Days thereafter (such 30th Business Day being the "Consummation
Deadline").

     (c) The Company shall include a "Plan of Distribution" section in the
Prospectus contained in the Exchange Offer Registration Statement and indicate
therein that any Broker-Dealer who holds Transfer Restricted Securities that
were acquired for the account of such Broker-Dealer as a result of market-making
activities or other trading activities (other than Initial Notes acquired
directly from the Company or any Affiliate of the Company), may exchange such
Transfer Restricted Securities pursuant to the Exchange Offer. Such "Plan of
Distribution"


                                       5



section shall also contain all other information with respect to such sales by
such Broker-Dealers that the Commission may require in order to permit such
sales pursuant thereto, but such "Plan of Distribution" shall not name any such
Broker-Dealer or disclose the amount of Transfer Restricted Securities held by
any such Broker-Dealer, except to the extent required by the Commission as a
result of a change in policy, rules or regulations after the date of this
Agreement.

     Because such Broker-Dealer may be deemed to be an "underwriter" within the
meaning of the Act and must, therefore, deliver a prospectus meeting the
requirements of the Act in connection with its initial sale of any Exchange
Notes received by such Broker-Dealer in the Exchange Offer, the Company and
Guarantors shall permit the use of the Prospectus contained in the Exchange
Offer Registration Statement by such Broker-Dealer to satisfy such prospectus
delivery requirement. To the extent necessary to ensure that the Prospectus
contained in the Exchange Offer Registration Statement is available for sales of
Exchange Notes by Broker-Dealers, the Company and the Guarantors agree to use
their respective reasonable best efforts to keep the Exchange Offer Registration
Statement continuously effective, supplemented, amended and current as required
by and subject to the provisions of Sections 6(a) and 6(c) hereof and in
conformity with the requirements of this Agreement, the Act and the policies,
rules and regulations of the Commission as announced from time to time, for a
period of 180 days from the Consummation Deadline or such shorter period as will
terminate when all Transfer Restricted Securities covered by such Registration
Statement have been sold pursuant thereto or are no longer outstanding. The
Company and the Guarantors shall provide sufficient copies of the latest version
of such Prospectus to such Broker-Dealers, promptly upon request, and in no
event later than one day after such request, at any time during such period.

     Section 4. Shelf Registration.

     (a) Shelf Registration. If (i) the Exchange Offer is not permitted by
applicable law or Commission policy (after the Company and the Guarantors have
complied with the procedures set forth in Section 6(a)(i) below) or (ii) if any
Holder of Transfer Restricted Securities shall notify the Company within 20
Business Days following the Consummation of the Exchange Offer that (A) such
Holder was prohibited by law or Commission policy from participating in the
Exchange Offer or (B) such Holder may not resell the Exchange Notes acquired by
it in the Exchange Offer to the public without delivering a prospectus and the
Prospectus contained in the Exchange Offer Registration Statement is not
available for such resales by such Holder or (C) such Holder is a Broker-Dealer
and holds Initial Notes acquired directly from the Company or any of its
Affiliates, then the Company and the Guarantors shall:


                                       6




          (x) cause to be filed, on or prior to 100 days after the earlier of
     (i) the date on which the Company determines that the Exchange Offer
     Registration Statement cannot be filed as a result of clause 4(a)(i) above
     and (ii) the date on which the Company receives the notice specified in
     clause 4(a)(ii) above, (such date, the "Filing Deadline"), a shelf
     registration statement pursuant to Rule 415 under the Act (which may be an
     amendment to the Exchange Offer Registration Statement (the "Shelf
     Registration Statement")), relating to (1) all Transfer Restricted
     Securities with respect to which an Exchange Offer is not permitted in the
     case of clause 4(a)(i) above or (2) the Transfer Restricted Securities
     specified in any notice in the case of clause 4(a)(ii), and

          (y) shall use their respective reasonable best efforts to cause such
     Shelf Registration Statement to become effective on or prior to 110 days
     after the Filing Deadline for the Shelf Registration Statement (such 110th
     day the "Effectiveness Deadline").

     If, after the Company has filed an Exchange Offer Registration Statement
that satisfies the requirements of Section 3(a) above, the Company is required
to file and make effective a Shelf Registration Statement solely because the
Exchange Offer is not permitted under clause 4(a)(i), then the filing of the
Exchange Offer Registration Statement shall be deemed to satisfy the
requirements of clause (x) above; provided that, in such event, the Company
shall remain obligated to meet the Effectiveness Deadline set forth in clause
(y).

     To the extent necessary to ensure that the Shelf Registration Statement is
available for sales of Transfer Restricted Securities by the Holders thereof
entitled to the benefit of this Section 4(a) and the other securities required
to be registered therein pursuant to Section 6(b)(ii) hereof, the Company and
the Guarantors shall use their respective reasonable best efforts to keep any
Shelf Registration Statement required by this Section 4(a) continuously
effective, supplemented, amended and current as required by and subject to the
provisions of Sections 6(b) and 6(c) hereof and in conformity with the
requirements of this Agreement, the Act and the policies, rules and regulations
of the Commission as announced from time to time, for a period of at least two
years (as extended pursuant to Section 6(d)) following the Closing Date, or such
shorter period as will terminate on the earlier of the date when all Transfer
Restricted Securities covered by such Shelf Registration Statement have been
sold pursuant thereto, no longer constitute Transfer Restricted Securities or
are no longer outstanding.

     (b) Provision by Holders of Certain Information in Connection with the
Shelf Registration Statement. No Holder of Transfer Restricted Securities may
include any of its Transfer Restricted Securities in any Shelf Registration
Statement pursuant to this Agreement unless and until such Holder furnishes to
the Company in writing, within 20 days after receipt of a request therefor, the


                                       7



information specified in Item 507 or 508 of Regulation S-K, as applicable, of
the Act for use in connection with any Shelf Registration Statement or
Prospectus or preliminary Prospectus included therein. No Holder of Transfer
Restricted Securities shall be entitled to liquidated damages pursuant to
Section 5 hereof unless and until such Holder shall have provided all such
information which is required by rules of the Commission to be included in the
Shelf Registration Statement prior to the time it is declared effective. Each
selling Holder agrees to promptly furnish additional information required to be
disclosed in order to make the information previously furnished to the Company
by such Holder not materially misleading.

     (c) Suspension. The Company and the Guarantors will have the ability to
suspend the Shelf Registration Statement (a "Suspension Period"), if the Company
and the Guarantors determine, in their reasonable best judgment, upon advice of
counsel, that the continued effectiveness and use of the Shelf Registration
Statement would require the disclosure of confidential information or interfere
with any financing, acquisition, reorganization or other material transaction
involving the Company. A Suspension Period shall commence on and include the
date that the Company and the Guarantors give notice that the Shelf Registration
Statement is no longer effective or the Prospectus included therein is no longer
usable for offers and sales of Transfer Restricted Securities covered by such
Registration Statement and continue until holders of such Transfer Restricted
Securities either receive the copies of the supplemented or amended prospectus
contemplated by Section 6(c) hereof or are advised in writing by the Company and
the Guarantors that use of the Prospectus may be resumed. Any such suspensions
may not exceed (i) 60 days in the aggregate in the first twelve month period
after the Closing Date, (ii) 60 days in the aggregate in the twelve month period
immediately thereafter and (iii) 90 days in the aggregate during any subsequent
twelve month period.

     Section 5. Liquidated Damages.

     If (a) any Registration Statement required by this Agreement is not filed
with the Commission on or prior to the applicable Filing Deadline, (b) any such
Registration Statement has not been declared effective by the Commission on or
prior to the applicable Effectiveness Deadline, (c) the Exchange Offer (if
required) has not been Consummated on or prior to the Consummation Deadline or
(d) any Registration Statement required by this Agreement is filed and declared
effective but shall thereafter cease to be effective or fail to be usable
(provided that the unavailability of a Registration Statement for the use of a
Holder as a result of such Holder's failure to provide information pursuant to
Section 4(b) or make representations required by Section 6(a)(ii) shall not be
deemed to make the Registration Statement fail to be usable) for its intended
purpose as required herein (except as provided in, and during the time periods
specified in, Section 4(c)) without being succeeded within five days by a
post-effective amendment to


                                       8



such Registration Statement that cures such failure and that is itself declared
effective within 10 days of the filing of such post-effective amendment (each
such event referred to in clauses (a) through (d), a "Registration Default"),
then the Company and each of the Guarantors hereby jointly and severally agree
to pay to each Holder of Transfer Restricted Securities affected thereby
liquidated damages in an amount equal to $.05 per week per $1,000 in principal
amount of Transfer Restricted Securities held by such Holder for each week or
portion thereof that the Registration Default continues for the first 90-day
period immediately following the occurrence of such Registration Default. The
amount of the liquidated damages shall increase by an additional $.05 per week
per $1,000 in principal amount of Transfer Restricted Securities with respect to
each subsequent 90-day period until all Registration Defaults have been cured,
up to a maximum amount of liquidated damages of $.25 per week per $1,000 in
principal amount of Transfer Restricted Securities; provided that the Company
and the Guarantors shall in no event be required to pay liquidated damages for
more than one Registration Default at any given time. Notwithstanding anything
to the contrary set forth herein, (i) upon filing of the Exchange Offer
Registration Statement (and/or, if applicable, the Shelf Registration
Statement), in the case of clause (a) above, (ii) upon the effectiveness of the
Exchange Offer Registration Statement (and/or, if applicable, the Shelf
Registration Statement), in the case of clause (b) above, (iii) upon
Consummation of the Exchange Offer, in the case of clause (c) above, or (iv)
upon the filing of a post-effective amendment to the Registration Statement or
an additional Registration Statement that causes the Exchange Offer Registration
Statement (and/or, if applicable, the Shelf Registration Statement) to again be
declared effective or made usable in the case of clause (d) above, the
liquidated damages payable with respect to the Transfer Restricted Securities as
a result of such clause (a), (b), (c) or (d), as applicable, shall cease to
accrue.

     All accrued liquidated damages shall be paid to the record Holders entitled
thereto, in the manner provided for the payment of interest in the Indenture, on
each Interest Payment Date, as more fully set forth in the Indenture and the
Notes. Notwithstanding the fact that any securities for which liquidated damages
are due cease to be Transfer Restricted Securities, all obligations of the
Company and the Guarantors to pay liquidated damages with respect to securities
shall survive until such time as such obligations with respect to such
securities shall have been satisfied in full.

     Section 6. Registration Procedures.

     (a) Exchange Offer Registration Statement. In connection with the Exchange
Offer, the Company and the Guarantors shall (x) comply with all applicable
provisions of Section 6(c) below, (y) use their respective reasonable best
efforts to effect such exchange and to permit the resale of Exchange Notes by
Broker-Dealers that tendered in the Exchange Offer Initial Notes that such
Broker-Dealer acquired for its own account as a result of its market making


                                       9



activities or other trading activities (other than Initial Notes acquired
directly from the Company or any of its Affiliates) being sold in accordance
with the intended method or methods of distribution thereof, and (z) comply with
all of the following provisions:

          (i) If, following the date hereof there has been announced a change in
     Commission policy with respect to exchange offers such as the Exchange
     Offer, that in the reasonable opinion of counsel to the Company raises a
     substantial question as to whether the Exchange Offer is permitted by
     applicable federal law, the Company and the Guarantors hereby agree to seek
     a no-action letter or other favorable decision from the Commission allowing
     the Company and the Guarantors to Consummate an Exchange Offer for such
     Transfer Restricted Securities. The Company and the Guarantors hereby agree
     to pursue the issuance of such a decision to the Commission staff level but
     shall not be required to take commercially unreasonable action to effect a
     change of Commission policy. In connection with the foregoing, the Company
     and the Guarantors hereby agree to take all such other actions (other than
     such actions as may be commercially unreasonable) as may be requested by
     the Commission or otherwise required in connection with the issuance of
     such decision, including without limitation (A) participating in telephonic
     conferences with the Commission, (B) delivering to the Commission staff an
     analysis prepared by counsel to the Company setting forth the legal bases,
     if any, upon which such counsel has concluded that such an Exchange Offer
     should be permitted and (C) diligently pursuing a resolution (which need
     not be favorable) by the Commission staff.

          (ii) As a condition to its participation in the Exchange Offer, each
     Holder of Transfer Restricted Securities (including, without limitation,
     any Holder who is a Broker Dealer) shall furnish, upon the request of the
     Company, prior to the Consummation of the Exchange Offer, a written
     representation to the Company and the Guarantors (which may be contained in
     the letter of transmittal contemplated by the Exchange Offer Registration
     Statement) to the effect that (A) such Holder is not an Affiliate of the
     Company or a Broker-Dealer tendering Initial Notes acquired directly from
     the Company for its own account, (B) such Holder will have no arrangement
     or understanding with any person to participate in the distribution of the
     Initial Notes or the Exchange Notes within the meaning of the Act, (C) if
     the Holder is not a Broker-Dealer or is a Broker-Dealer but will not
     receive Exchange Notes for its own account in exchange for Initial Notes,
     neither the Holder nor any such other Person is engaged in or intends to
     participate in a distribution of the Exchange Notes, and (D) any Exchange
     Notes received by such Holder will be acquired in the ordinary course of
     its business. If the Holder is a


                                       10




     Broker-Dealer that will receive Exchange Notes for its own account in
     exchange for Initial Notes, it will represent that the Initial Notes to be
     exchanged for the Exchange Notes were acquired by it as a result of
     market-making activities or other trading activities, and will acknowledge
     that it will deliver a prospectus meeting the requirements of the Act in
     connection with any resale of such Exchange Notes. It is understood that,
     by acknowledging that it will deliver, and by delivering, a prospectus
     meeting the requirements of the Act in connection with any resale of such
     Exchange Notes, the Holder is not admitting that it is an "underwriter"
     within the meaning of the Act.

          (iii) Prior to effectiveness of the Exchange Offer Registration
     Statement, the Company and the Guarantors shall provide a supplemental
     letter to the Commission (A) stating that the Company and the Guarantors
     are registering the Exchange Offer in reliance on the position of the
     Commission enunciated in Exxon Capital Holdings Corporation (available May
     13, 1988), Morgan Stanley and Co., Inc. (available June 5, 1991) as
     interpreted in the Commission's letter to Shearman & Sterling dated July 2,
     1993, and, if applicable, any no-action letter obtained pursuant to Section
     6(a)(i) above, (B) including a representation that neither the Company nor
     any of the Guarantors has entered into any arrangement or understanding
     with any Person to distribute the Exchange Notes to be received in the
     Exchange Offer and that, to the best of the Company's and each Guarantor's
     information and belief, each Holder participating in the Exchange Offer is
     acquiring the Exchange Notes in its ordinary course of business and has no
     arrangement or understanding with any Person to participate in the
     distribution of the Exchange Notes received in the Exchange Offer and (C)
     any other undertaking or representation required by the Commission as set
     forth in any no-action letter obtained pursuant to Section 6(a)(i) above,
     if applicable.

     (b) Shelf Registration Statement. In connection with the Shelf Registration
Statement, the Company and the Guarantors shall

          (i) comply with all the provisions of Section 6(c) below and use their
     respective reasonable best efforts to effect such registration to permit
     the sale of the Transfer Restricted Securities being sold in accordance
     with the intended method or methods of distribution thereof (as indicated
     in the information furnished to the Company pursuant to Section 4(b)
     hereof), and pursuant thereto the Company and the Guarantors will prepare
     and file with the Commission a Registration Statement relating to the
     registration on any appropriate form under the Act, which form shall be
     available to the Company for the sale of the Transfer Restricted Securities
     in accordance with the intended method or


                                       11



     methods of distribution thereof within the time periods and otherwise in
     accordance with the provisions hereof, and

          (ii) issue, upon the request of any Holder or purchaser of Initial
     Notes covered by the Shelf Registration Statement, Exchange Notes having an
     aggregate principal amount equal to the aggregate principal amount of
     Initial Notes sold pursuant to the Shelf Registration Statement and
     surrendered to the Company for cancellation; the Company shall register
     Exchange Notes on the Shelf Registration Statement for this purpose and
     issue the Exchange Notes to the purchaser(s) of securities subject to the
     Shelf Registration Statement in the names as such purchaser(s) shall
     designate.

     (c) General Provisions. In connection with any Registration Statement and
any related Prospectus required by this Agreement, the Company and the
Guarantors shall:

          (i) use their respective reasonable best efforts to keep such
     Registration Statement continuously effective and provide all requisite
     financial statements for the period specified in Section 3 or 4 of this
     Agreement, as applicable. Upon the occurrence of any event that would cause
     any such Registration Statement or the Prospectus contained therein (A) to
     contain an untrue statement of material fact or omit to state any material
     fact necessary to make the statements therein not misleading or (B) not to
     be effective and usable for resale of Transfer Restricted Securities during
     the period required by this Agreement, the Company and the Guarantors
     shall, subject to Section 4(c), file promptly an appropriate amendment to
     such Registration Statement curing such defect, and, if Commission review
     is required, use their respective reasonable best efforts to cause such
     amendment to be declared effective as soon as practicable.

          (ii) prepare and file with the Commission such amendments and
     post-effective amendments to the applicable Registration Statement as may
     be necessary to keep such Registration Statement effective for the
     applicable period set forth in Section 3 or 4 hereof, as the case may be;
     cause the Prospectus to be supplemented by any required Prospectus
     supplement, and as so supplemented to be filed pursuant to Rule 424 under
     the Act, and to comply fully with Rules 424, 430A and 462, as applicable,
     under the Act in a timely manner; and comply with the provisions of the Act
     with respect to the disposition of all securities covered by such
     Registration Statement during the applicable period in accordance with the
     intended method or methods of distribution by the sellers thereof set forth
     in such Registration Statement or supplement to the Prospectus;


                                       12




          (iii) advise the Initial Purchasers and, in the case of a Shelf
     Registration Statement, each Holder of securities covered thereby, promptly
     and, if requested by such Holder, confirm such advice in writing, (A) when
     the Prospectus or any Prospectus supplement or post-effective amendment has
     been filed, and, with respect to any applicable Registration Statement or
     any post-effective amendment thereto, when the same has become effective,
     (B) of any request by the Commission for amendments to the Registration
     Statement or amendments or supplements to the Prospectus or for additional
     information relating thereto, (C) of the issuance by the Commission of any
     stop order suspending the effectiveness of the Registration Statement under
     the Act or of the suspension by any state securities commission of the
     qualification of the Transfer Restricted Securities for offering or sale in
     any jurisdiction, or the initiation of any proceeding for any of the
     preceding purposes, and (D) of the existence of any fact or the happening
     of any event that makes any statement of a material fact made in the
     Registration Statement, the Prospectus, any amendment or supplement thereto
     or any document incorporated by reference therein untrue, or that requires
     the making of any additions to or changes in the Registration Statement in
     order to make the statements therein not misleading, or that requires the
     making of any additions to or changes in the Prospectus in order to make
     the statements therein, in the light of the circumstances under which they
     were made, not misleading. If at any time the Commission shall issue any
     stop order suspending the effectiveness of the Registration Statement, or
     any state securities commission or other regulatory authority shall issue
     an order suspending the qualification or exemption from qualification of
     the Transfer Restricted Securities under state securities or Blue Sky laws,
     the Company and the Guarantors shall use their respective best efforts to
     obtain the withdrawal or lifting of such order at the earliest possible
     time;

          (iv) subject to Section 4(c), if any fact or event contemplated by
     Section 6(c)(iii)(D) above shall exist or have occurred, prepare a
     supplement or post-effective amendment to the Registration Statement or
     related Prospectus or any document incorporated therein by reference or
     file any other required document so that, as thereafter delivered to the
     purchasers of Transfer Restricted Securities, the Prospectus will not
     contain an untrue statement of a material fact or omit to state any
     material fact necessary to make the statements therein, in the light of the
     circumstances under which they were made, not misleading;

          (v) upon written request, furnish to the requesting Initial Purchasers
     and, in the case of a Shelf Registration Statement, each requesting Holder
     of securities covered thereby, in connection with such exchange or sale, if
     any, before filing with the Commission, copies of any


                                       13



     Registration Statement or any Prospectus included therein or any amendments
     or supplements to any such Registration Statement or Prospectus (including
     all documents incorporated by reference after the initial filing of such
     Registration Statement), which documents will be subject to the review and
     comment of such Holders in connection with such sale, if any, for a period
     of at least five Business Days, and the Company will not file any such
     Registration Statement or Prospectus or any amendment or supplement to any
     such Registration Statement or Prospectus (including all such documents
     incorporated by reference) to which such Holders shall reasonably object
     within five Business Days after the receipt thereof. A Holder shall be
     deemed to have reasonably objected to such filing if such Registration
     Statement, amendment, Prospectus or supplement, as applicable, as proposed
     to be filed, contains an untrue statement of a material fact or omit to
     state any material fact necessary to make the statements therein not
     misleading or fails to comply with the applicable requirements of the Act;

          (vi) upon written request, promptly prior to the filing of any
     document that is to be incorporated by reference into a Registration
     Statement or Prospectus, provide copies of such document to the requesting
     Initial Purchasers and in the case of a Shelf Registration Statement, each
     requesting Holder of securities covered thereby, in connection with such
     exchange or sale, if any, make the Company's and each Guarantor's
     representatives available for discussion of such document and other
     customary due diligence matters, and include such information in such
     document prior to the filing thereof as the Initial Purchasers or such
     Holders may reasonably request;

          (vii) make available, at reasonable times, for inspection by the
     Initial Purchasers and, in the case of a Shelf Registration Statement, each
     Holder of securities covered thereby, and the designated counsel or any
     accountant retained by such Holders, all financial and other records,
     pertinent corporate documents of the Company and each Guarantor and cause
     the Company's and each Guarantor's officers, directors and employees to
     supply all information reasonably requested by any such Initial Purchaser,
     Holder, attorney or accountant in connection with such Registration
     Statement or any post-effective amendment thereto subsequent to the filing
     thereof and prior to its effectiveness; provided, however, that such
     persons shall first agree in writing with the Company and the Guarantors
     that such information shall be kept confidential by such persons, unless
     (i) disclosure of such information is required by court or administrative
     order or is necessary to respond to inquiries of regulatory authorities,
     (ii) disclosure of such information is required by law (including any
     disclosure requirements pursuant to federal securities laws


                                       14







     in connection with the filing of such Registration Statement or the use of
     any Prospectus), (iii) such information becomes generally available to the
     public other than as a result of a disclosure or failure to safeguard such
     information by such person or (iv) such information becomes available to
     such person from a source other than the Company and its subsidiaries and
     such source is not known, after due inquiry, by such person to be bound by
     a confidentiality agreement; provided further, that the foregoing
     investigation shall be coordinated on behalf of such persons by one
     representative designated by and on behalf of such persons and any such
     confidential information shall be available from such representative to
     such persons so long as any person agrees to be bound by such
     confidentiality agreement;

          (viii) upon written request by the Initial Purchasers and, in the case
     of a Shelf Registration Statement, any Holders of securities covered
     thereby, in connection with such exchange or sale, promptly include in any
     Registration Statement or Prospectus, pursuant to a supplement or
     post-effective amendment if necessary, such information as such Persons may
     reasonably request to have included therein, including, without limitation,
     information relating to the "Plan of Distribution" of the Transfer
     Restricted Securities; and make all required filings of such Prospectus
     supplement or post-effective amendment as soon as practicable after the
     Company is notified of the matters to be included in such Prospectus
     supplement or post-effective amendment;

          (ix) upon written request, furnish to the requesting Initial
     Purchasers and, in the case of a Shelf Registration Statement, each
     requesting Holder of securities covered thereby, in connection with such
     exchange or sale, without charge, at least one copy of the Registration
     Statement, as first filed with the Commission, and of each amendment
     thereto, including all documents incorporated by reference therein and all
     exhibits (including exhibits incorporated therein by reference);

          (x) deliver to each Holder without charge, as many copies of the
     Prospectus (including each preliminary prospectus) and any amendment or
     supplement thereto as such Persons reasonably may request; the Company and
     the Guarantors hereby consent to the use (in accordance with law) of the
     Prospectus and any amendment or supplement thereto by each selling Holder
     in connection with the offering and the sale of the Transfer Restricted
     Securities covered by the Prospectus or any amendment or supplement
     thereto;

          (xi) in the case of a Shelf Registration Statement, enter into such
     agreements (including underwriting agreements) and, in the case of any
     Registration Statement contemplated by this Agreement, make such


                                       15



     customary representations and warranties similar to those contained in the
     Purchase Agreement and take all such other actions in connection therewith
     in order to expedite or facilitate the disposition of the Transfer
     Restricted Securities pursuant to any applicable Registration Statement
     contemplated by this Agreement as may be reasonably requested by any
     Initial Purchaser or, in the case of a Shelf Registration Statement, the
     Holders of a majority in aggregate principal amount of the Transfer
     Restricted Securities covered thereby (the "Majority Holders") in
     connection with any sale or resale pursuant to any applicable Registration
     Statement. In such connection, the Company shall:

               (A) upon request of the Majority Holders (in the case of a Shelf
          Registration Statement) or any Initial Purchaser (in the case of an
          Exchange Offer), furnish (or in the case of Sections 6(c)(xi)(A)(2)
          and 6(c)(xi)(A)(3), use its reasonable best efforts to cause to be
          furnished) to each Holder upon Consummation of the Exchange Offer or
          upon the effectiveness of the Shelf Registration Statement, as the
          case may be:

                    (1) a customary certificate, dated such date, signed on
               behalf of the Company and each Guarantor by (x) the President or
               any Vice President and (y) a principal financial or accounting
               officer of the Company and the Guarantor, confirming, as of the
               date thereof, matters similar to those set forth in Sections 6(d)
               and 9(a) of the Purchase Agreement and such other similar matters
               as may be reasonably requested;

                    (2) an opinion, dated the date of Consummation of the
               Exchange Offer or the date of effectiveness of the Shelf
               Registration Statement, as the case may be, of counsel for the
               Company and the Guarantors covering matters similar to those set
               forth in paragraphs (d), (e), (f) and (g) of Section 9 of the
               Purchase Agreement and such other matter as may be reasonably
               requested, and in any event including a statement to the effect
               that such counsel has participated in conferences with officers
               and other representatives of the Company and the Guarantors,
               representatives of the independent public accountants for the
               Company and the Guarantors and have considered the matters
               required to be stated therein and the statements contained
               therein, although such counsel has not independently verified the
               accuracy, completeness or fairness of such statements; and that
               such counsel advises that, on the basis of the


                                       16







               foregoing (relying as to materiality to the extent such counsel
               deems appropriate upon the statements of officers and other
               representatives of the Company and the Guarantors and without
               independent check or verification), no facts came to such
               counsel's attention that caused such counsel to believe that the
               applicable Registration Statement, at the time such Registration
               Statement or any post-effective amendment thereto became
               effective and, in the case of the Exchange Offer Registration
               Statement, as of the date of Consummation of the Exchange Offer,
               contained an untrue statement of a material fact or omitted to
               state a material fact required to be stated therein or necessary
               to make the statements therein not misleading, or that the
               Prospectus contained in such Registration Statement as of its
               date and, in the case of the opinion dated the date of
               Consummation of the Exchange Offer, as of the date of
               Consummation, contained an untrue statement of a material fact or
               omitted to state a material fact necessary in order to make the
               statements therein, in the light of the circumstances under which
               they were made, not misleading. Without limiting the foregoing,
               such counsel may state further that such counsel assumes no
               responsibility for, and has not independently verified, the
               accuracy, completeness or fairness of the financial statements,
               notes and schedules and other financial, statistical and
               accounting data included in any Registration Statement
               contemplated by this Agreement or the related Prospectus; and

                    (3) a customary comfort letter, dated the date of
               Consummation of the Exchange Offer, or as of the date of
               effectiveness of the Shelf Registration Statement, as the case
               may be, from the Company's independent accountants, in the
               customary form and covering matters of the type customarily
               covered in comfort letters to underwriters in connection with
               underwritten offerings; and

               (B) deliver such other documents and certificates as may be
          reasonably requested by any of the Initial Purchasers or, in the case
          of any Shelf Registration Statement, the Majority Holders, to evidence
          compliance with the matters covered in Section 6(c)(xi)(A) above and
          with any customary conditions


                                       17




          contained in any agreement entered into by the Company and the
          Guarantors pursuant to this Section 6(c)(xi);

          (xii) prior to any public offering of Transfer Restricted Securities,
     cooperate with the Holders named in the applicable Registration Statement
     (or any prospectus supplement thereto) and their counsel in connection with
     the registration and qualification of the Transfer Restricted Securities
     under the securities or Blue Sky laws of such jurisdictions as any such
     Holders may request and do any and all other acts or things necessary or
     advisable to enable the disposition in such jurisdictions of the Transfer
     Restricted Securities covered by the applicable Registration Statement;
     provided, however, that neither the Company nor any Guarantor shall be
     required to register or qualify as a foreign corporation where it is not
     now so qualified or to take any action that would subject it to the service
     of process in suits or to taxation, other than as to matters and
     transactions relating to the Registration Statement, in any jurisdiction
     where it is not now so subject;

          (xiii) in connection with any sale of Transfer Restricted Securities
     that will result in such securities no longer being Transfer Restricted
     Securities, cooperate with the Holders to facilitate the timely preparation
     and delivery of certificates representing Transfer Restricted Securities to
     be sold and not bearing any restrictive legends; and, subject to the
     provisions of the Indenture regarding global securities, to register such
     Transfer Restricted Securities in such denominations and such names as the
     selling Holders may request at least two Business Days prior to such sale
     of Transfer Restricted Securities;

          (xiv) use their respective reasonable best efforts to cause the
     disposition of the Transfer Restricted Securities covered by the
     Registration Statement to be registered with or approved by such other
     governmental agencies or authorities as may be necessary to enable the
     seller or sellers thereof to consummate the disposition of such Transfer
     Restricted Securities, subject to the proviso contained in Section
     6(c)(xii) above;

          (xv) provide a CUSIP number for all Exchange Notes or, in the case of
     a Shelf Registration, the securities being sold thereunder, not later than
     the effective date of a Registration Statement covering such Transfer
     Restricted Securities and provide the Trustee with printed certificates for
     such securities which are in a form eligible for deposit with the
     Depository Trust Company;

          (xvi) otherwise use their respective reasonable best efforts to comply
     with all applicable rules and regulations of the Commission, and


                                       18



     make generally available to its security holders with regard to any
     applicable Registration Statement, as soon as practicable, a consolidated
     earnings statement meeting the requirements of Rule 158 (which need not be
     audited) covering a twelve-month period beginning after the effective date
     of the Registration Statement (as such term is defined in paragraph (c) of
     Rule 158 under the Act); and

          (xvii) provide promptly to each Holder, upon request, each document
     filed with the Commission pursuant to the requirements of Section 13 or
     Section 15(d) of the Exchange Act. Such documents may be provided
     electronically at the Company's discretion.

     (d) Restrictions on Holders. Each Holder agrees by acquisition of a
Transfer Restricted Security that, upon receipt of the notice referred to in
Section 4(c) or Section 6(c)(iii)(C) or any notice from the Company of the
existence of any fact of the kind described in Section 6(c)(iii)(D) hereof (in
each case, a "Suspension Notice"), such Holder will forthwith discontinue
disposition of Transfer Restricted Securities pursuant to the applicable
Registration Statement until (i) such Holder has received copies of the
supplemented or amended Prospectus contemplated by Section 6(c)(iv) hereof, or
(ii) such Holder is advised in writing by the Company that the use of the
Prospectus may be resumed, and has received copies of any additional or
supplemental filings that are incorporated by reference in the Prospectus (in
each case, the "Recommencement Date"). Each Holder receiving a Suspension Notice
hereby agrees that it will either (i) destroy any Prospectuses, other than
permanent file copies, then in such Holder's possession which have been replaced
by the Company with more recently dated Prospectuses or (ii) deliver to the
Company (at the Company's expense) all copies, other than permanent file copies,
then in such Holder's possession of the Prospectus covering such Transfer
Restricted Securities that was current at the time of receipt of the Suspension
Notice. The time period regarding the effectiveness of such Registration
Statement set forth in Section 3 or 4 hereof, as applicable, shall be extended
by a number of days equal to the number of days in the period from and including
the date of delivery of the Suspension Notice to the date of delivery of the
Recommencement Date.

     No Holder may participate in any underwritten registration under the
Agreement unless such Holder (a) agrees to sell such Holder's Transfer
Restricted Securities on the basis provided in any underwriting arrangements
approved by the Persons entitled under this Agreement to approve such
arrangements and (b) completes and executes all reasonable questionnaires,
powers of attorneys, indemnities, underwriting agreements, lock-up letters and
other documents required under the terms of such underwriting arrangements.

     Section 7. Registration Expenses.


                                       19




     (a) All expenses incident to the Company's and the Guarantors' performance
of or compliance with this Agreement will be borne by the Company, regardless of
whether a Registration Statement becomes effective, including without
limitation: (i) all registration and filing fees and expenses; (ii) all fees and
expenses of compliance with federal securities and state Blue Sky or securities
laws; (iii) all expenses of printing (including printing certificates for the
Exchange Notes to be issued in the Exchange Offer and printing of Prospectuses),
messenger and delivery services and telephone; (iv) all fees and disbursements
of counsel for the Company, the Guarantors and, in accordance with Section 7(b)
below, the Holders of Transfer Restricted Securities; (v) all application and
filing fees in connection with listing the Exchange Notes on a national
securities exchange or automated quotation system pursuant to the requirements
hereof; and (vi) all fees and disbursements of independent certified public
accountants of the Company and the Guarantors (including the expenses of any
special audit and comfort letters required by or incident to such performance).

     The Company will, in any event, bear its and the Guarantors' internal
expenses (including, without limitation, all salaries and expenses of its
officers and employees performing legal or accounting duties), the expenses of
any annual audit and the fees and expenses of any Person, including special
experts, retained by the Company or any Guarantor.

     (b) In connection with any Registration Statement required by this
Agreement (including, without limitation, the Exchange Offer Registration
Statement and the Shelf Registration Statement), the Company and the Guarantors
will reimburse the Initial Purchasers and the Holders of Transfer Restricted
Securities who are tendering Initial Notes in the Exchange Offer and/or selling
or reselling Initial Notes or Exchange Notes pursuant to the "Plan of
Distribution" contained in the Exchange Offer Registration Statement or the
Shelf Registration Statement, as applicable, for the reasonable fees and
disbursements of not more than one counsel, who shall be Davis Polk & Wardwell,
unless another firm shall be chosen by the Holders of a majority in principal
amount of the Transfer Restricted Securities for whose benefit such Registration
Statement is being prepared.

     SECTION 8. INDEMNIFICATION.

     (a) The Company and each of the Guarantors agree, jointly and severally, to
indemnify and hold harmless each Holder, its directors, officers and each
Person, if any, who controls such Holder (within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act), from and against any and all losses,
claims, damages, liabilities, judgments, (including without limitation, any
legal or other expenses incurred in connection with investigating or defending
any matter, including any action that could give rise to any such losses,
claims, damages, liabilities or judgments) caused by any untrue statement or
alleged


                                       20



untrue statement of a material fact contained in any Registration Statement,
preliminary prospectus or Prospectus (or any amendment or supplement thereto)
provided by the Company to any Holder or any prospective purchaser of Exchange
Notes or registered Initial Notes, or caused by any omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, except insofar as such losses,
claims, damages, liabilities or judgments are caused by an untrue statement or
omission or alleged untrue statement or omission that is based upon information
relating to any of the Holders furnished in writing to the Company by any of the
Holders provided, however, that the foregoing indemnity agreement with respect
to the preliminary prospectus shall not inure to the benefit of any Holder who
failed to deliver the Prospectus, as then amended or supplemented (so long as
the Prospectus and any such amendment or supplement was provided by the Company
to the Holders in the requisite quantity and on a timely basis to permit proper
delivery) to the person asserting any losses, claims, damages, liabilities or
judgments caused by any untrue statement or alleged untrue statement of a
material fact contained in the preliminary prospectus, or caused by any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, if such
material misstatement or omission or alleged material misstatement or omission
was cured in the Prospectus, as so amended or supplemented.

     (b) Each Holder of Transfer Restricted Securities agrees, severally and not
jointly, to indemnify and hold harmless the Company and the Guarantors, and
their respective directors and officers, and each person, if any, who controls
(within the meaning of Section 15 of the Act or Section 20 of the Exchange Act)
the Company or the Guarantors to the same extent as the foregoing indemnity from
the Company and the Guarantors set forth in Section 8(a) above, but only with
reference to information relating to such Holder furnished in writing to the
Company by such Holder expressly for use in any Registration Statement,
preliminary prospectus or Prospectus (or any amendment or supplement thereto).
In no event shall any Holder, its directors, officers or any Person who controls
such Holder be liable or responsible for any amount in excess of the total
amount received by such Holder with respect to its sale of Transfer Restricted
Securities pursuant to a Registration Statement exceeds the amount of any
damages that such Holder, its directors, officers or any Person who controls
such Holder has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission.

     (c) In case any action shall be commenced involving any person in respect
of which indemnity may be sought pursuant to Section 8(a) or 8(b) (the
"indemnified party"), the indemnified party shall promptly notify the person
against whom such indemnity may be sought (the "indemnifying person") in writing
and the indemnifying party shall assume the defense of such action,


                                       21



including the employment of counsel reasonably satisfactory to the indemnified
party and the payment of all fees and expenses of such counsel, as incurred
(except that in the case of any action in respect of which indemnity may be
sought pursuant to both Sections 8(a) and 8(b), a Holder shall not be required
to assume the defense of such action pursuant to this Section 8(c), but may
employ separate counsel and participate in the defense thereof, but the fees and
expenses of such counsel, except as provided below, shall be at the expense of
the Holder). Any indemnified party shall have the right to employ separate
counsel in any such action and participate in the defense thereof, but the fees
and expenses of such counsel shall be at the expense of the indemnified party
unless (i) the employment of such counsel shall have been specifically
authorized in writing by the indemnifying party, (ii) the indemnifying party
shall have failed to assume the defense of such action or employ counsel
reasonably satisfactory to the indemnified party or (iii) the named parties to
any such action (including any impleaded parties) include both the indemnified
party and the indemnifying party, and the indemnified party shall have been
advised by such counsel that there may be one or more legal defenses available
to it which are different from or additional to those available to the
indemnifying party (in which case the indemnifying party shall not have the
right to assume the defense of such action on behalf of the indemnified party).
In any such case, the indemnifying party shall not, in connection with any one
action or separate but substantially similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the reasonable fees and expenses of more than one separate firm of
attorneys (in addition to any local counsel) for all indemnified parties and all
such fees and expenses shall be reimbursed as they are incurred. Such firm shall
be designated in writing by a majority of the Holders, in the case of the
parties indemnified pursuant to Section 8(a), and by the Company and the
Guarantors, in the case of parties indemnified pursuant to Section 8(b). The
indemnifying party shall indemnify and hold harmless the indemnified party from
and against any and all losses, claims, damages, liabilities and judgments by
reason of any settlement of any action (i) effected with its written consent or
(ii) effected without its written consent if the settlement is entered into more
than sixty days after the indemnifying party shall have received a request from
the indemnified party for reimbursement for the reasonable fees and expenses of
counsel (in any case where such fees and expenses are at the expense of the
indemnifying party) and more than twenty days after the indemnifying party shall
have received notice of the proposed settlement and, prior to the date of such
settlement, the indemnifying party shall have failed to comply with such
reimbursement request. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement or compromise of, or
consent to the entry of judgment with respect to, any pending or threatened
action in respect of which the indemnified party is or could have been a party
and indemnity or contribution may be or could have been sought hereunder by the
indemnified party, unless such settlement, compromise or judgment (i) includes


                                       22



an unconditional release of the indemnified party from all liability on claims
that are or could have been the subject matter of such action and (ii) does not
include a statement as to or an admission of fault, culpability or a failure to
act, by or on behalf of the indemnified party.

     (d) To the extent that the indemnification provided for in this Section 8
is unavailable to an indemnified party in respect of any losses, claims,
damages, liabilities or judgments referred to therein, then each indemnifying
party, in lieu of indemnifying such indemnified party, shall contribute to the
amount paid or payable by such indemnified party as a result of such losses,
claims, damages, liabilities or judgments in such proportion as is appropriate
to reflect the relative fault of the Company and the Guarantors, on the one
hand, and of the Holder, on the other hand, in connection with the statements or
omissions which resulted in such losses, claims, damages, liabilities or
judgments, as well as any other relevant equitable considerations. The relative
fault of the Company and the Guarantors, on the one hand, and of the Holder, on
the other hand, shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Company or the Guarantors, on the one hand, or by the Holder, on the other hand,
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.

     The Company, the Guarantors and each Holder agree that it would not be just
and equitable if contribution pursuant to this Section 8(d) were determined by
pro rata allocation (even if the Holders were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses incurred by such indemnified party in
connection with investigating or defending any matter, including any action,
that could have given rise to such losses, claims, damages, liabilities or
judgments. Notwithstanding the provisions of this Section 8, no Holder, its
directors, its officers or any Person, if any, who controls such Holder shall be
required to contribute, in the aggregate, any amount in excess of the amount by
which the total received by such Holder with respect to the sale of Transfer
Restricted Securities pursuant to a Registration Statement exceeds the amount of
any damages which such Holder has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Holders' obligations to
contribute pursuant to this Section 8(d) are several in


                                       23



proportion to the respective principal amount of Transfer Restricted Securities
held by each Holder hereunder and not joint.

     Section 9. Rule 144A And Rule 144.

     The Company and each Guarantor agrees with each Holder, for so long as any
Transfer Restricted Securities remain outstanding and during any period in which
the Company or any Guarantor (i) is not subject to Section 13 or 15(d) of the
Exchange Act, to make available, upon request of any Holder, to such Holder or
beneficial owner of Transfer Restricted Securities in connection with any sale
thereof and any prospective purchaser of such Transfer Restricted Securities
designated by such Holder or beneficial owner, the information required by Rule
144A(d)(4) under the Act in order to permit resales of such Transfer Restricted
Securities pursuant to Rule 144A, and (ii) is subject to Section 13 or 15 (d) of
the Exchange Act, to make all filings required thereby in a timely manner in
order to permit resales of such Transfer Restricted Securities pursuant to Rule
144.

     Section 10. Miscellaneous.

     (a) Remedies. The Company and the Guarantors acknowledge and agree that any
failure by the Company and/or any Guarantor to comply with their respective
obligations under Sections 3 and 4 hereof may result in material irreparable
injury to the Initial Purchasers or the Holders for which there is no adequate
remedy at law, that it will not be possible to measure damages for such injuries
precisely and that, in the event of any such failure, the Initial Purchasers or
any Holder may obtain such relief as may be required to specifically enforce the
Company's and the Guarantors' obligations under Sections 3 and 4 hereof. The
Company and the Guarantors further agree to waive the defense in any action for
specific performance that a remedy at law would be adequate.

     (b) No Inconsistent Agreements. Neither the Company nor any Guarantor will,
on or after the date of this Agreement, enter into any agreement with respect to
its securities that is inconsistent with the rights granted to the Holders in
this Agreement or otherwise conflicts with the provisions hereof. The rights
granted to the Holders hereunder do not in any way conflict with and are not
inconsistent with the rights granted to the holders of the Company's and the
Guarantors' securities under any agreement in effect on the date hereof.

     (c) Amendments and Waivers. The provisions of this Agreement may not be
amended, modified or supplemented, and waivers or consents to or departures from
the provisions hereof may not be given unless (i) in the case of Section 5
hereof and this clause 10(c)(i), the Company has obtained the written consent of
Holders of all outstanding Transfer Restricted Securities and (ii) in the case
of all other provisions hereof, the Company has obtained the written consent of
Holders of a majority of the outstanding principal amount of Transfer


                                       24




Restricted Securities (excluding Transfer Restricted Securities held by the
Company or its Affiliates). Notwithstanding the foregoing, a waiver or consent
to departure from the provisions hereof that relates exclusively to the rights
of Holders whose Transfer Restricted Securities are being tendered pursuant to
the Exchange Offer, and that does not affect directly or indirectly the rights
of other Holders whose Transfer Restricted Securities are not being tendered
pursuant to such Exchange Offer, may be given by the Holders of a majority of
the outstanding principal amount of Transfer Restricted Securities subject to
such Exchange Offer.

     (d) Third Party Beneficiary. The Holders shall be third party beneficiaries
to the agreements made hereunder between the Company and the Guarantors, on the
one hand, and the Initial Purchasers, on the other hand, and shall have the
right to enforce such agreements directly to the extent they may deem such
enforcement necessary or advisable to protect its rights or the rights of
Holders hereunder.

     (e) Notices. All notices and other communications provided for or permitted
hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested), telex, telecopier, or air
courier guaranteeing overnight delivery:

          (i) if to a Holder, at the address set forth on the records of the
     Registrar under the applicable Indenture, with a copy to the Registrar
     under such Indenture; and

          (ii) if to the Company or the Guarantors:

               c/o Lyondell Chemical Company
               One Houston Center, Suite 700
               1221 McKinney Street
               Houston, Texas 77010
               Telecopier No.: 713-309-2143
               Attention: General Counsel

               With a copy to:

               Baker Botts L.L.P.
               910 Louisiana
               Houston, Texas 77002
               Telecopier No.: 713-229-1522
               Attention: Stephen Massad, Esq.


                                       25




     All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five Business
Days after being deposited in the mail, postage prepaid, if mailed; when receipt
acknowledged, if telecopied; and on the next Business Day, if timely delivered
to an air courier guaranteeing overnight delivery.

     Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee at the
address specified in the Indenture.

     (f) Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the successors and assigns of each of the parties, including
without limitation and without the need for an express assignment, subsequent
Holders; provided, that nothing herein shall be deemed to permit any assignment,
transfer or other disposition of Transfer Restricted Securities in violation of
the terms hereof or of the Purchase Agreement or the Indenture. If any
transferee of any Holder shall acquire Transfer Restricted Securities in any
manner, whether by operation of law or otherwise, such Transfer Restricted
Securities shall be held subject to all of the terms of this Agreement, and by
taking and holding such Transfer Restricted Securities such Person shall be
conclusively deemed to have agreed to be bound by and to perform all of the
terms and provisions of this Agreement, including the restrictions on resale set
forth in this Agreement and, if applicable, the Purchase Agreement, and such
Person shall be entitled to receive the benefits hereof.

     (g) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.

     (h) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.

     (i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE
CONFLICT OF LAW RULES THEREOF.

     (j) Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.


                                       26



     (k) Entire Agreement. This Agreement is intended by the parties as a final
expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein
with respect to the registration rights granted with respect to the Transfer
Restricted Securities. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.


                                       27




     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.

                                LYONDELL CHEMICAL COMPANY

                                By:          /s/ KAREN A. TWITCHELL
                                      ------------------------------------------
                                      Name:  Karen A. Twitchell
                                      Title: Vice President and Treasurer

                                ARCO CHEMICAL TECHNOLOGY, INC.



                                By:          /s/ FRANCIS P. MCGRAIL
                                      ------------------------------------------
                                      Name:  Francis P. McGrail
                                      Title: President

                                ARCO CHEMICAL TECHNOLOGY, L.P.

                                By:   ARCO Chemical Technology Management, Inc.,
                                        its General Partner

                                By:           /s/ FRANCIS P. MCGRAIL
                                      ------------------------------------------
                                      Name:  Francis P. McGrail
                                      Title: President

                                LYONDELL CHEMICAL NEDERLAND, LTD.


                                By:           /s/ KAREN A. TWITCHELL
                                      ------------------------------------------
                                      Name:  Karen A. Twitchell
                                      Title: Vice President and Treasurer


                                       28




CITIGROUP GLOBAL MARKETS INC.
BANC OF AMERICA SECURITIES LLC
CREDIT SUISSE FIRST BOSTON LLC
J.P. MORGAN SECURITIES INC.
      As representatives of the Initial Purchasers referred to herein

By: CITIGROUP GLOBAL MARKETS INC.


By:      /s/ AARON DANNENBURG
    ---------------------------------
    Name:  Aaron Dannenberg
    Title: Directer

                                       29

EX-4.2

                                                                     Exhibit 4.2
                           LYONDELL CHEMICAL COMPANY,

                     the SUBSIDIARY GUARANTORS party hereto

                                       and

                              THE BANK OF NEW YORK,

                                   as Trustee

                                   ----------

                                    INDENTURE

                            Dated as of May 20, 2003

                                   ----------

                      10 1/2% Senior Secured Notes Due 2013



                                TABLE OF CONTENTS

ARTICLE 1         Definitions And Other Provisions Of
                  General Application....................................     1
   Section 1.01.  Definitions............................................     1
   Section 1.02.  Other Definitions......................................    22
   Section 1.03.  Rules of Construction..................................    23
   Section 1.04.  Incorporation by Reference of TIA......................    23
   Section 1.05.  Conflict with TIA......................................    24
   Section 1.06.  Compliance Certificates and Opinions...................    24
   Section 1.07.  Form of Documents Delivered to Trustee.................    24
   Section 1.08.  Acts of Noteholders; Record Dates......................    25
   Section 1.09.  Notices, Etc., to Trustee and Company..................    26
   Section 1.10.  Notices to Holders; Waivers............................    26
   Section 1.11.  Effect of Headings and Table of Contents...............    27
   Section 1.12.  Successors and Assigns.................................    27
   Section 1.13.  Separability Clause....................................    27
   Section 1.14.  Benefits of Indenture..................................    27
   Section 1.15.  Governing Law..........................................    27
   Section 1.16.  Legal Holidays.........................................    28
   Section 1.17.  No Personal Liability of Directors, Officers,
                  Employees, Incorporators and Stockholders .............    28
   Section 1.18.  Exhibits and Schedules.................................    28
   Section 1.19.  Counterparts...........................................    28

ARTICLE 2         Note Forms.............................................    28
   Section 2.01.  Forms Generally........................................    28
   Section 2.02.  Form of Trustee, Certificate of Authentication.........    29
   Section 2.03.  Restrictive Legends....................................    30

ARTICLE 3         The Notes..............................................    32
   Section 3.01.  Title and Terms........................................    32
   Section 3.02.  Denominations..........................................    32
   Section 3.03.  Execution, Authentication and Delivery and Dating......    33
   Section 3.04.  Temporary Notes........................................    33
   Section 3.05.  Registration, Registration of Transfer and Exchange....    33
   Section 3.06.  Mutilated, Destroyed, Lost and Stolen Notes............    34
   Section 3.07.  Payment of Interest Rights Preserved...................    35
   Section 3.08.  Persons Deemed Owners..................................    35
   Section 3.09.  Cancellation...........................................    36
   Section 3.10.  Computation of Interest................................    36
   Section 3.11.  Payment of Liquidated Damages..........................    36
   Section 3.12.  CUSIP Numbers..........................................    36
   Section 3.13.  Book-entry Provisions for Global Notes.................    36
   Section 3.14.  Transfer Provisions....................................    37

ARTICLE 4         Covenants..............................................    42
   Section 4.01.  Payment of Principal, Premium and Interest.............    42
   Section 4.02.  Maintenance of Office or Agency........................    42
   Section 4.03.  Money for Payments to Be Held in Trust.................    43
   Section 4.04.  SEC Reports............................................    44
   Section 4.05.  Certificates to Trustee................................    44
   Section 4.06.  Limitation on Indebtedness.............................    45
   Section 4.07.  Limitation on Restricted Payments......................    47
   Section 4.08.  Limitation on Dividend and other Payment Restrictions
                  Affecting Restricted Subsidiaries and Joint Ventures ..    51
   Section 4.09.  Limitation on Sales of Assets..........................    54

                                        i



   Section 4.10.  Limitation on Affiliate Transactions...................    56
   Section 4.11.  Limitation on Liens....................................    56
   Section 4.12.  Equal and Ratable Liens................................    57
   Section 4.13.  No Amendment to Subordination Provisions...............    57
   Section 4.14.  Repurchase of Notes upon a Change in Control...........    57
   Section 4.15.  Limitation on Sale and Leaseback Transactions..........    57
   Section 4.16.  Limitation on Line of Business.........................    58
   Section 4.17.  Limitation on Accounts Receivable Facilities...........    58
   Section 4.18.  Limited Applicability of Covenants when Notes are
                  Rated Investment-Grade............ ....................    58
   Section 4.19.  Existence..............................................    58
   Section 4.20.  Payment of Taxes and Other Claims......................    58
   Section 4.21.  Maintenance of Properties and insurance................    59
   Section 4.22.  Limitation on Issuance of Guarantees by
                  Restricted Subsidiaries.. .............................    59
   Section 4.23.  Payments for Consents..................................    60

ARTICLE 5         Consolidation, Merger or Sale of Assets................    60
   Section 5.01.  Consolidation, Merger or Sale of Assets
                  by the Company.... ....................................    60
   Section 5.02.  Successor Company Substituted..........................    60
   Section 5.03.  Consolidation, Merger or Sale of Assets by
                  a Subsidiary Guarantor ................................    61
   Section 5.04.  Opinion of Counsel to Trustee..........................    61

ARTICLE 6         Remedies...............................................    62
   Section 6.01.  Events of Default......................................    62
   Section 6.02.  Acceleration...........................................    63
   Section 6.03.  Other Remedies.........................................    63
   Section 6.04.  Waiver of Past Defaults................................    63
   Section 6.05.  Control by Majority....................................    64
   Section 6.06.  Limitation on Suits....................................    64
   Section 6.07.  Rights of Holders to Receive Payment...................    64
   Section 6.08.  Collection Suit by Trustee.............................    64
   Section 6.09.  Trustee May File Proofs of Claim.......................    64
   Section 6.10.  Priorities.............................................    65
   Section 6.11.  Undertaking for Costs..................................    65
   Section 6.12.  Restoration of Rights and Remedies.....................    65
   Section 6.13.  Rights and Remedies Cumulative.........................    66
   Section 6.14.  Waiver of Stay, Extension or Usury Laws................    66

ARTICLE 7         The Trustee............................................    66
   Section 7.01.  Certain Duties and Responsibilities....................    66
   Section 7.02.  Notice of Defaults.....................................    67
   Section 7.03.  Certain Rights of Trustee..............................    67
   Section 7.04.  Not Responsible for Recitals or Issuance of Notes......    68
   Section 7.05.  Trustee's Disclaimer...................................    68
   Section 7.06.  May Hold Notes.........................................    68
   Section 7.07.  Money Held in Trust....................................    68
   Section 7.08.  Compensation and Reimbursement.........................    68
   Section 7.09.  Conflicting Interests..................................    69
   Section 7.10.  Corporate Trustee Required; Eligibility................    69
   Section 7.11.  Resignation and Removal; Appointment of Successor......    69
   Section 7.12.  Acceptance of Appointment by Successor.................    70
   Section 7.13.  Merger, Conversion, Consolidation or
                  Succession to Business... .............................    71
   Section 7.14.  Preferential Collection of Claims Against
                  the Company... ........................................    71
   Section 7.15.  Appointment of Authenticating Agent....................    71

                                       ii



ARTICLE 8         Holders' List and Reports by Trustee and
                  the Company............................................    71
   Section 8.01.  The Company to Furnish Trustee Names and
                  Addresses of Holders; Stock Exchange Listing...........    71
   Section 8.02.  Preservation of Information; Communications
                  to Holders.............................................    72
   Section 8.03.  Reports by Trustee.....................................    72

ARTICLE 9         Amendment, Supplement or Waiver........................    72
   Section 9.01.  Without Consent of the Holders.........................    72
   Section 9.02.  With Consent of Holders................................    73
   Section 9.03.  Execution of Amendments, Supplements or Waivers........    74
   Section 9.04.  Revocation and Effect of Consents......................    74
   Section 9.05.  Conformity with TIA....................................    74
   Section 9.06.  Notation on or Exchange of Notes.......................    74

ARTICLE 10        Redemption of Notes....................................    75
   Section 10.01. Right of Redemption....................................    75
   Section 10.02. Applicability of Article...............................    75
   Section 10.03. Election to Redeem; Notice to Trustee..................    75
   Section 10.04. Selection by Trustee of Notes to Be Redeemed...........    75
   Section 10.05. Notice of Redemption...................................    76
   Section 10.06. Deposit of Redemption Price............................    76
   Section 10.07. Notes Payable on Redemption Date.......................    77
   Section 10.08. Notes Redeemed in Part.................................    77

ARTICLE 11        Satisfaction and Discharge.............................    77
   Section 11.01. Satisfaction and Discharges of Indenture...............    77
   Section 11.02. Application of Trust Money.............................    78

ARTICLE 12        Defeasance and Covenant Defeasance.....................    78
   Section 12.01. Option of the Company to Effect Defeasance
                  or Covenant Defeasance...... ..........................    78
   Section 12.02. Legal Defeasance and Discharge.........................    78
   Section 12.03. Covenant Defeasance....................................    79
   Section 12.04. Conditions to Legal or Covenant Defeasance.............    79
   Section 12.05. Deposited Money and Government Securities to
                  Be Held in Trust; Other Miscellaneous Provisions ......    80
   Section 12.06. Repayment to Company...................................    81
   Section 12.07. Reinstatement..........................................    81

ARTICLE 13        Subsidiary Guarantees..................................    81
   Section 13.01. The Guarantees.........................................    81
   Section 13.02. Guarantee Unconditional................................    82
   Section 13.03. Discharge; Reinstatement...............................    82
   Section 13.04. Waiver by the Subsidiary Guarantors....................    82
   Section 13.05. Subrogation and Contribution...........................    83
   Section 13.06. Stay of Acceleration...................................    83
   Section 13.07. Limits of Guarantees...................................    83
   Section 13.08. Execution and Delivery of Note Guarantee...............    83

ARTICLE 14        Security Arrangements..................................    83
   Section 14.01. Security...............................................    83
   Section 14.02. Notice of Payment, Discharge or Defeasance.............    84

EXHIBIT A - Form of Note
EXHIBIT B - Form of Supplemental Indenture
EXHIBIT C - Form of Certificate of Beneficial Ownership

                                      iii



EXHIBIT D - Form of Regulation S Certificate
EXHIBIT E - Form of Institutional Accredited Investor Certificate

                                       iv




INDENTURE, dated as of May 20, 2003 (as amended, supplemented or otherwise
modified from time to time, the "Indenture"), among LYONDELL CHEMICAL COMPANY, a
Delaware corporation (as further defined below, the "Company"), the Subsidiary
Guarantors party hereto and THE BANK OF NEW YORK, a New York banking
corporation, as trustee (the "Trustee").

                             RECITALS OF THE COMPANY

     The Company and the Subsidiary Guarantors have duly authorized the
execution and delivery of this Indenture to provide for the issuance of (i)
initially, $325,000,000 aggregate principal amount of 10 1/2% Senior Secured
Notes due 2013 of the Company (the "Initial Notes" and, together with any
Exchange Notes issued in respect thereof, the "Original Notes") and (ii) if and
when issued, additional 10 1/2% Senior Secured Notes due 2013 of the Company
(the "Initial Additional Notes" and, together with any Exchange Notes issued in
respect thereof, the "Additional Notes") issuable as provided in this Indenture,
in each case, guaranteed to the extent provided herein and in the Notes by the
Subsidiary Guarantors. All things necessary to make the Original Notes, when
duly issued, executed and delivered by the Company and authenticated and
delivered by the Trustee hereunder, the valid obligation of the Company, and to
make this Indenture a valid agreement of the Company and the Subsidiary
Guarantors as of the date hereof, in accordance with the terms of the Original
Notes and this Indenture, have been done.

                   NOW, THEREFORE, THIS INDENTURE WITNESSETH:

     For and in consideration of the premises and the purchase of the Notes (as
defined herein) by the Holders (as defined herein) thereof, it is mutually
agreed, for the equal and ratable benefit of all Holders, as follows:

                                   ARTICLE 1

             Definitions And Other Provisions Of General Application

Section 1.01.   Definitions.

     "Accounts Receivable Subsidiary" means any Wholly Owned Subsidiary of the
Company (i) which is formed solely for the purpose of, and which engages in no
activities other than activities in connection with, financing accounts
receivable of the Company and/or its Restricted Subsidiaries, (ii) which is
designated by the Company as an Accounts Receivables Subsidiary pursuant to an
Officer's Certificate delivered to the Trustee, (iii) no portion of Indebtedness
or any other obligation (contingent or otherwise) of which (a) is at any time
recourse to or obligates the Company or any Restricted Subsidiary in any way, or
subjects any property or asset of the Company or any Restricted Subsidiary,
directly or indirectly, contingently or otherwise, to the satisfaction thereof,
other than pursuant to (I) representations, warranties and covenants (or any
indemnity with respect to such representations, warranties and covenants)
entered into in the ordinary course of business in connection with the sale
(including a sale in exchange for a promissory note of or Equity Interest in
such Accounts Receivable Subsidiary) of accounts receivable to such Accounts
Receivable Subsidiary or (II) any guarantee of any such accounts receivable
financing by the Company or any Restricted Subsidiary that is permitted to be
incurred pursuant to Section 4.06, (iv) with which neither the Company nor any
Restricted Subsidiary of the Company has any contract, agreement, arrangement or
understanding other than contracts, agreements, arrangements and understandings
entered into in the ordinary course of business in connection with the sale
(including a sale in exchange for a promissory note of or Equity Interest in
such Accounts Receivable Subsidiary) of accounts receivable in accordance with
Section 4.17 and fees payable in the ordinary course of business in connection
with servicing accounts receivable and (v) with respect to which neither the
Company nor any Restricted Subsidiary of the Company has any obligation (a) to
subscribe for additional shares of Capital Stock or other Equity Interests
therein or make any additional capital contribution or similar payment or
transfer thereto other than in connection with the sale (including a sale in
exchange for a promissory note of or Equity Interest in such Accounts Receivable
Subsidiary) of accounts receivable to such Accounts

                                       1



Receivable Subsidiary in accordance with Section 4.17 or (b) to maintain or
preserve the solvency, any balance sheet term, financial condition, level of
income or results of operations thereof.

     "Acquired Debt" means, with respect to any specified Person, (i)
Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Subsidiary of such specified Person, including,
without limitation, Indebtedness incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Subsidiary of such specified Person and (ii) Indebtedness secured by a Lien
encumbering any asset acquired by such specified Person.

     "Acquired Disqualified Stock" means, with respect to any specified Person,
Disqualified Stock of any other Person existing at the time such other Person is
merged with or into or became a Subsidiary of such specified Person, including,
without limitation, Disqualified Stock incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Subsidiary of such specified Person.

     "Acquired Preferred Stock" means, with respect to any specified Person,
Preferred Stock of any other Person existing at the time such other Person is
merged with or into or became a Subsidiary of such specified Person, including,
without limitation, Preferred Stock incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Subsidiary of such specified Person.

     "Acquiring Person" means a Person other than a Subject Assets Transferee
which acquires (i) all or a portion of the Subject Assets or (ii) an interest in
a Subject Assets Transferee in connection with a Major Asset Sale.

     "Additional Notes" means any notes issued under this Indenture in addition
to the Original Notes, including any Exchange Notes issued in exchange therefor
having the same terms in all respects (or in all respects except payment of
interest (i) scheduled and paid prior to the date of issuance of such notes or
(ii) payable on the first Interest Payment Date following such date of
issuance).

     "Adjusted Consolidated Cash Flow" means, for any period, the sum of
Consolidated Cash Flow of the Company for such period plus the aggregate
Distributable Joint Venture Cash Flow of the Company and its Restricted
Subsidiaries, determined on a consolidated basis, for such period.

     "Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as used with respect to any Person, shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise; provided that
beneficial ownership of 10% or more of the voting securities of a Person shall
be deemed to be control; provided further that the foregoing proviso shall not
apply for purposes of Section 4.07(b)(vii) and Section 4.07(b)(ix) and clause
(d) of the definition of "Unrestricted Subsidiary".

     "Asset Sale" means (i) the sale, lease, conveyance or other disposition
(other than the creation of a Lien) of any assets other than the disposition of
inventory, equipment or Cash Equivalents in the ordinary course of business
consistent with past practices (provided that the sale, conveyance or other
disposition of all or substantially all the assets of the Company and its
Restricted Subsidiaries taken as a whole will be governed by the provisions of
Section 4.14 and/or the provisions of Section 5.01 and not by the provisions of
Section 4.09), (ii) the sale by the Company or any of its Restricted
Subsidiaries of Equity Interests of any of the Company's Restricted
Subsidiaries, Unrestricted Subsidiaries or Joint Ventures and (iii) the issuance
by any of the Company's Restricted Subsidiaries of Equity Interests of such
Restricted Subsidiary, in the case of clause (i), (ii) or (iii), whether in a
single transaction or a series of related transactions (a) that have a fair
market value in excess of $25 million or (b) for Net Proceeds in excess of $25
million. Notwithstanding the foregoing: (a) a transfer of assets by the Company
to a Restricted Subsidiary or by a Restricted Subsidiary to the Company or to
another Restricted Subsidiary; (b) an issuance of Equity

                                       2



Interests by a Restricted Subsidiary to the Company or to another Restricted
Subsidiary; (c) a Restricted Payment that is permitted by Section 4.07; (d) an
issuance of Preferred Stock by a Finance Subsidiary that is permitted by Section
4.06; (e) sales (including a sale in exchange for a promissory note of or Equity
Interest in such Accounts Receivable Subsidiary) of accounts receivable to an
Accounts Receivable Subsidiary in connection with any Receivables Facility
permitted by Section 4.17; and (f) Sale and Leaseback Transactions will not be
deemed to be an Asset Sale.

     "Asset Sale Lien" means a Lien on the Subject Assets (including as a Lien
for this purpose contractual rights with respect to the operation of the Subject
Assets) arising in connection with a Major Asset Sale in favor of the Acquiring
Person (or an Affiliate thereof) which Lien does not secure any Indebtedness.

     "Attributable Debt" in respect of a Sale and Leaseback Transaction that is
treated as a capital lease in accordance with GAAP means, at the time of
determination, the present value (discounted at the rate of interest implicit in
such transaction, determined in accordance with GAAP) of the obligation of the
lessee for net rental payments during the remaining term of the lease included
in such Sale and Leaseback Transaction (including any period for which such
lease has been extended or may, at the option of the lessor, be extended).

     "Authenticating Agent" means any Person authorized by the Trustee pursuant
to Section 7.15 to act on behalf of the Trustee to authenticate Notes of one or
more series.

     "Board of Directors" means the board of directors of the Company or any
committee thereof duly authorized to act on behalf of such board of directors.

     "Board Resolution" means, with respect to any Person, a copy of a
resolution certified by the Secretary or an Assistant Secretary of such Person
to have been duly adopted by the board of directors (or any committee thereof)
of such Person and to be in full force and effect on the date of such
certification, and delivered to the Trustee. Unless the context otherwise
requires, "Board Resolution" refers to a Board Resolution of the Company.

     "Business Day" means any day except a Saturday, Sunday or other day on
which commercial banks in The City of New York or Houston, Texas are authorized
by law to close.

     "Capital Lease Obligation" means, at the time any determination thereof is
to be made, the amount of the liability in respect of a capital lease that would
at such time be required to be capitalized on a balance sheet in accordance with
GAAP.

     "Capital Stock" means (i) in the case of a corporation, corporate stock,
(ii) in the case of an association or a business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
corporate stock, (iii) in the case of a partnership, partnership interests
(whether general or limited) and (iv) any other interest or participation that
confers on a Person the right to receive a share of the profits and losses of,
or distributions of assets of, the issuing Person.

     "Cash Equivalents" means (a) United States dollars, (b) securities issued
or directly and fully guaranteed or insured by the United States government or
any agency or instrumentality thereof (provided that the full faith and credit
of the United States is pledged in support thereof) having maturities of not
more than one year from the date of acquisition, (c) demand deposits, time
deposits and certificates of deposit with maturities of one year or less from
the date of acquisition, bankers' acceptances with maturities not exceeding one
year from the date of acquisition and overnight bank deposits, in each case with
any bank or trust company organized or licensed under the laws of the United
States or any State thereof having capital, surplus and undivided profits in
excess of $500 million, (d) repurchase obligations with a term of not more than
seven days for underlying securities of the type described in clauses (b) and
(c) above entered into with any financial institution meeting the qualifications
specified in clause (c) above, (e) commercial paper rated at least P-l or A-1 by
Moody's or S&P, respectively, and in each case maturing

                                       3



within six months after the date of acquisition, (f) any fund investing
exclusively in investments of the type described in clauses (a) through (e)
above and (g) in the case of a Foreign Subsidiary, substantially similar
investments denominated in foreign currencies (including similarly capitalized
foreign banks).

     "Change of Control" means the occurrence of any of the following: (i) the
sale, transfer, conveyance or other disposition, in one or a series of related
transactions, of all or substantially all the assets of the Company and its
Subsidiaries taken as a whole to any Person or group (as such term is used in
Sections 13(d)(3) and 14(d)(2) of the Exchange Act) other than to a Person or
group who, prior to such transaction, held a majority of the voting power of the
voting stock of the Company, (ii) the acquisition by any Person or group (as
defined above) of a direct or indirect interest in more than 50% of the voting
power of the voting stock of the Company, by way of merger or consolidation or
otherwise, or (iii) the first day on which a majority of the members of the
board of directors of the Company are not Continuing Directors.

     "Clearsteam" means Clearsteam Banking SA and its successors.

     "Code" means the Internal Revenue Code of 1986, as amended.

     "Collateral" means all assets of the Company and its Restricted
Subsidiaries which are subject to Liens pursuant to the terms and provisions of
the Security Documents in order to secure the Indenture Obligations equally and
ratably with the Existing Credit Facility Obligations.

     "Collateral Agent" means JPMorgan Chase Bank (as successor to Morgan
Guaranty Trust Company of New York), in its capacity as collateral agent or
administrative agent, or any other collateral agent under any or all of the
Security Documents.

     "Company" means Lyondell Chemical Company, a Delaware corporation, and any
successor in interest thereto.

     "Company Request," "Company Order" and "Company Consent" mean,
respectively, a written request, order or consent signed in the name of the
Company by an Officer of the Company.

     "Consolidated Cash Flow" means, with respect to any Person for any period,
the Consolidated Net Income of such Person for such period (less the Net Income
of any Joint Venture to the extent included therein pursuant to clause (i) of
the definition of "Consolidated Net Income"), plus in each case, without
duplication

          (i)    provision for taxes based on income or profits of such Person
     and its Restricted Subsidiaries for such period (including any provision
     for taxes on the Net Income of any Joint Venture that is a pass-through
     entity for federal income tax purposes, to the extent such taxes are paid
     or payable by such Person or any of its Restricted Subsidiaries), to the
     extent that such provision for taxes was included in computing such
     Consolidated Net Income,

          (ii)   the Fixed Charges of such Person and its Restricted
     Subsidiaries for such period, to the extent that such Fixed Charges were
     deducted in computing such Consolidated Net Income,

          (iii)  depreciation and amortization (including amortization of
     goodwill and other intangibles but excluding amortization of prepaid cash
     expenses that were paid in a prior period) of such Person and its
     Restricted Subsidiaries for such period to the extent that such
     depreciation and amortization were deducted in computing such Consolidated
     Net Income and

          (iv)   any non-cash charges reducing Consolidated Net Income for such
     period (excluding any such non-cash charge to the extent that it represents
     an accrual of or reserve for cash expenses in any future period or an
     amortization of a prepaid cash expense that was paid in a prior period);
     minus

                                       4



          (v)    any non-cash items increasing Consolidated Net Income for such
     period, in each case, on a consolidated basis and determined in accordance
     with GAAP.

     Notwithstanding the foregoing, the provision for taxes on the income or
profits of, and the depreciation and amortization of, a Restricted Subsidiary of
the referent Person shall be added to Consolidated Net Income to compute
Consolidated Cash Flow only to the extent (and in the same proportion) that the
Net Income of such Restricted Subsidiary was included in calculating the
Consolidated Net Income of such Person.

     "Consolidated Net Income" means, with respect to any Person for any period,
the aggregate of the Net Income of such Person and its Restricted Subsidiaries
for such period, on a consolidated basis, determined in accordance with GAAP;
provided that

          (i)    the Net Income of any Person that is not a Restricted
     Subsidiary shall be included only to the extent of the lesser of (x) the
     amount of dividends or distributions paid in cash (but not by means of a
     loan) to the referent Person or a Restricted Subsidiary thereof or (y) the
     referent Person's (or a Restricted Subsidiary of the referent Person's)
     proportionate share of the Net Income of such other Person,

          (ii)   the Net Income (but not loss) of any Restricted Subsidiary
     shall be excluded to the extent that the declaration or payment of
     dividends or similar distributions by that Restricted Subsidiary of that
     Net Income is not at the date of determination permitted without any prior
     governmental approval (that has not been obtained) or, directly or
     indirectly, by operation of the terms of its charter or any agreement,
     instrument, judgment, decree, order, statute, rule or governmental
     regulation applicable to that Subsidiary or its stockholders,

          (iii)  the Net Income of any Person acquired in a pooling of interests
     transaction for any period prior to the date of such acquisition shall be
     excluded and

          (iv)   the cumulative effect of a change in accounting principles
     shall be excluded.

     "Consolidated Net Worth" means, with respect to any Person as of any date,
the sum of (i) the consolidated equity of the common stockholders of such Person
and its Restricted Subsidiaries as of such date plus (ii) the respective amounts
reported on such Person's balance sheet as of such date with respect to any
series of Preferred Stock (other than Disqualified Stock), less all write-ups
(other than write-ups resulting from foreign currency translations and write-ups
of tangible assets of a going concern business made in accordance with GAAP as a
result of the acquisition of such business) subsequent to the date of the
Indenture in the book value of any asset owned by such Person or a Restricted
Subsidiary of such Person, and excluding the cumulative effect of a change in
accounting principles, all as determined in accordance with GAAP.

     "Continuing Directors" means, as of any date of determination, any member
of the Board of Directors of the Company who (i) was a member of such Board of
Directors on the date of the Indenture or (ii) was nominated for election or
elected to such Board of Directors with the approval of a majority of the
Continuing Directors who were members of such Board at the time of such
nomination or election or any successor Continuing Directors appointed by such
Continuing Directors (or their successors).

     "Corporate Trust Office" means the principal office of the Trustee, at
which at any particular time its corporate trust business shall be administered,
which office on the Issue Date is located at 101 Barclay Street, Floor 21 West,
New York, New York 10286.

     "Default" means any event that is or with the passage of time or the giving
of notice or both would be an Event of Default.

     "Depositary" means The Depository Trust Company, its nominees and
successors.

                                       5



     "Disqualified Stock" means any Capital Stock that, by its terms (or by the
terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at
the option of the holder thereof, in whole or in part, on or prior to the date
on which the Notes mature; provided that any Capital Stock that would not
constitute Disqualified Stock but for provisions thereof giving holders thereof
the right to require such Person to repurchase or redeem such Capital Stock upon
the occurrence of an "asset sale" or a "change of control" occurring prior to
the date on which the Notes mature shall not constitute Disqualified Stock if
the "asset sale" or "change of control" provisions applicable to such Capital
Stock are no more favorable to the holders of such Capital Stock than the
provisions contained in Section 4.09 of the Senior Subordinated Notes Indenture
and Section 4.14 hereof and such Capital Stock specifically provides that such
Person will not repurchase or redeem any such stock pursuant to such provision
prior to the Company's repurchase of such Notes as are required pursuant to such
covenants.

     "Distributable Joint Venture Cash Flow" means, with respect to any Person
for any period, in the case of each Joint Venture that is not a Restricted
Subsidiary of the referent Person, the sum of:

     (I)  the lesser of

          (x) the amount of dividends or distributions paid in cash (but not by
     means of a loan) by such Joint Venture to the referent Person or a
     Restricted Subsidiary thereof or

          (y) the referent Person's (or a Restricted Subsidiary of the referent
     Person's) proportionate share of

              (i)   the Net Income of such Joint Venture for such period, plus

              (ii)  to the extent deducted therefrom, depreciation and
          amortization (including amortization of goodwill and other intangibles
          but excluding amortization of prepaid cash expenses that were paid in
          a prior period) of such Joint Venture for such period, plus

              (iii) any non-cash charges reducing Net Income of such Joint
          Venture for such period (excluding any such non-cash charge to the
          extent that it represents an accrual of or reserve for cash expenses
          in any future period or an amortization of a prepaid cash expense that
          was paid in a prior period), less

              (iv)  any non-cash items increasing Net Income of such Joint
          Venture for such period, minus

     (II) the aggregate amount of all Investments made by the Company or any of
its Restricted Subsidiaries in such Joint Venture during such period pursuant to
Section 4.07(b)(viii), in each case determined on a consolidated basis and in
accordance with GAAP.

     "Equity Interests" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).

     "Equistar Assumed Debt" means (i) the 6.5% Notes Due 2006 and the 7.55%
Notes Due 2026, each issued by the Company pursuant to an Indenture dated as of
January 29, 1996 between the Company and Texas Commerce Bank National
Association, as Trustee, as supplemented by the First Supplemental Indenture
dated as of February 15, 1996 and the Second Supplemental Indenture dated as of
December 1, 1997; and (ii) Indebtedness under the medium term notes issued by
the Company, maturing at various dates from 2002 to 2005; in each case
outstanding as of the Issue Date, and with respect to which, either (x) the
Company is a guarantor or (y) as between the Company and Equistar, Equistar is
the primary obligor and the Company is an obligor; in each case, as may be
amended from time to time, provided that any such

                                       6



amendment does not increase the principal amount thereof or interest rate
applicable thereto or shorten the Weighted Average Life to Maturity or Stated
Maturity thereof or add any Restricted Subsidiary as an obligor with respect
thereto.

     "Euroclear" means Euroclear Bank S.A./N.V., and its successors or assigns,
as operator of the Euroclear System.

     "Exchange Act" means the Securities Exchange Act of 1934, as amended.

     "Exchange Notes" means the debt securities of the Company issued pursuant
to this Indenture in exchange for, and in an aggregate principal amount at
maturity equal to, the Initial Notes or any Initial Additional Notes, in
compliance with the terms of a Registration Rights Agreement and containing
terms substantially identical to the Initial Notes or any Initial Additional
Notes (except that (i) such Exchange Notes shall not contain terms with respect
to transfer restrictions and shall be registered under the Securities Act and
(ii) certain provisions relating to Liquidated Damages thereon shall be
eliminated).

     "Exchange Offer" means an offer by the Company to the Holders of the
Initial Notes to exchange Outstanding Notes for Exchange Notes, as provided for
in a Registration Rights Agreement.

     "Exchange Offer Registration Statement" means the Exchange Offer
Registration Statement as defined in a Registration Rights Agreement.

     "Existing ARCO Chemical Debt" means the 9.375% Debentures Due 2005, the
10.25% Debentures Due 2010 and the 9.8% Debentures Due 2020, all issued pursuant
to the Indenture dated June 15, 1988 between the Company (as successor to ARCO
Chemical Company) and The Bank of New York, as Trustee.

     "Existing Credit Facility" means that certain Credit Agreement dated as of
July 23, 1998 and as amended through the date hereof by and among the Company
and JPMorgan Chase Bank, as administrative agent, DLJ Capital Funding, Inc., as
syndication agent, and the other lenders that are parties thereto, including any
related notes, instruments and agreements executed in connection therewith, as
amended, restated, modified, extended, renewed, refunded, replaced or
refinanced, in whole or in part, from time to time, after the Issue Date (other
than with the proceeds of the Initial Notes issued on the Issue Date), whether
or not with the same lenders or agents.

     "Existing Credit Facility Obligations" means all Obligations of the Company
and its Subsidiaries outstanding under the Existing Credit Facility and all
Hedging Obligations payable to a lender or an Affiliate thereof or to a Person
that was a lender or an Affiliate thereof at the time the contract was entered
into under the Existing Credit Facility, including, without limitation, interest
accruing subsequent to the filing of, or which would have accrued but for the
filing of, a petition for bankruptcy, whether or not such interest is an
allowable claim in such bankruptcy proceeding.

     "Existing Indebtedness" means Indebtedness of the Company and its
Restricted Subsidiaries in existence, and considered Indebtedness of the Company
or any of its Restricted Subsidiaries, on the Issue Date, until such amounts are
repaid, including all reimbursement obligations with respect to letters of
credit outstanding as of the date of the Indenture.

     "Existing Security Documents" means each of the Security Documents referred
to in clause (i) of the definition thereof, in each case as amended, modified,
restated or supplemented from time to time.

     "Existing Senior Secured Note Indentures" means the indentures among the
Company, the Subsidiary Guarantors party thereto and The Bank of New York, as
Trustee, pursuant to which the Company issued the Existing Senior Secured Notes.

                                       7



     "Existing Senior Secured Notes" means the Company's 9.625% Senior Secured
Notes, Series A, Due 2007, its 9.875% Senior Secured Notes, Series B, Due 2007,
its 9.5% Senior Secured Notes due 2008 and its 11.125% Senior Secured Notes due
2012.

     "Finance Subsidiary" means a Restricted Subsidiary of the Company, all the
Capital Stock of which (other than Preferred Stock) is owned by the Company that
does not engage in any activity other than: (i) holding of Indebtedness of the
Company; (ii) the issuance of Capital Stock; and (iii) any activity necessary,
incidental or related to the foregoing.

     "Fixed Charge Coverage Ratio" means with respect to any Person for any
period, the ratio of the Adjusted Consolidated Cash Flow of such Person for such
period to the Fixed Charges of such Person for such period. In the event that
the Company or any of its Restricted Subsidiaries incurs, assumes or redeems any
Indebtedness (other than revolving credit borrowings) or issues or redeems
Preferred Stock subsequent to the commencement of the period for which the Fixed
Charge Coverage Ratio is being calculated but prior to the date on which the
event for which the calculation of the Fixed Charge Coverage Ratio is made (the
"Calculation Date"), then the Fixed Charge Coverage Ratio shall be calculated
giving pro forma effect to such incurrence, assumption or redemption of
Indebtedness, or such issuance or redemption of Preferred Stock, as if the same
had occurred at the beginning of the applicable four-quarter reference period.

     In addition, for purposes of making the computation referred to above, (i)
acquisitions that have been made by the Company or any of its Restricted
Subsidiaries, including through mergers or consolidations and including any
related financing transactions, during the four-quarter reference period or
subsequent to such reference period and on or prior to the Calculation Date
shall be deemed to have occurred on the first day of the four-quarter reference
period, (ii) the Adjusted Consolidated Cash Flow and Fixed Charges attributable
to operations or businesses disposed of prior to the Calculation Date shall be
excluded, but, in the case of such Fixed Charges, only to the extent that the
obligations giving rise to such Fixed Charges will not be obligations of the
referent Person or any of its Restricted Subsidiaries following the Calculation
Date and (iii) if since the beginning of the four-quarter reference period any
Person was designated as an Unrestricted Subsidiary or redesignated as or
otherwise became a Restricted Subsidiary, such event shall be deemed to have
occurred on the first day of the four-quarter reference period.

     "Fixed Charges" means, with respect to any Person for any period, the sum,
without duplication, of

          (i)    the consolidated interest expense of such Person and its
     Restricted Subsidiaries for such period, whether paid or accrued
     (including, without limitation, amortization of original issue discount,
     non-cash interest payments, the interest component of any deferred payment
     obligations, the interest component of all payments associated with Capital
     Lease Obligations, commissions, discounts and other fees and charges
     incurred in respect of letters of credit or bankers' acceptance financings
     and net payments or receipts (if any) pursuant to Hedging Obligations),

          (ii)   the consolidated interest expense of such Person and its
     Restricted Subsidiaries that was capitalized during such period,

          (iii)  any interest expense on Indebtedness of another Person (other
     than Non-Recourse Debt of a Joint Venture or an Unrestricted Subsidiary
     secured by a pledge by the Company or any Restricted Subsidiary of Capital
     Stock which pledge is permitted by Section 4.07(b)(xi) or Section
     4.07(b)(xii) that is Guaranteed by such Person or one of its Restricted
     Subsidiaries or secured by a Lien on assets of such Person or one of its
     Restricted Subsidiaries (whether or not such Guarantee or Lien is called
     upon) and

          (iv)   the product of (a) all dividend payments (other than any
     payments to the referent Person or any of its Restricted Subsidiaries) on
     any series of Preferred Stock of such Person and its Restricted
     Subsidiaries, times (b) a fraction, the numerator of which is one and the
     denominator

                                       8



     of which is one minus the then current combined federal, state and local
     statutory tax rate of such Person, expressed as a decimal, in each case, on
     a consolidated basis and in accordance with GAAP;

provided that (i) interest payments by Equistar on the Equistar Assumed Debt and
(ii) interest payments on Indebtedness of a Joint Venture shall, in each case,
not be deemed Fixed Charges of the Company as of any date of determination when
such Indebtedness is not considered Indebtedness of the Company or any
Restricted Subsidiary of the Company.

     "Foreign Subsidiary" means any Restricted Subsidiary that has 50% or more
of its assets located outside the United States or any territory thereof.

     "GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, as in effect on the Issue Date.

     "General Partner" means a Restricted Subsidiary of the Company or any of
its Restricted Subsidiaries that has no assets and conducts no operations other
than its ownership of a general partnership interest in a Joint Venture.

     "Guarantee" means any obligation, contingent or otherwise, of any Person
directly or indirectly guaranteeing any Indebtedness or Disqualified Stock of
any other Person and, without limiting the generality of the foregoing, any
obligation, direct or indirect, contingent or otherwise, of such Person (i) to
purchase or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or Disqualified Stock of such other Person (including those arising
by virtue of partnership arrangements (other than, in the case of the Company or
a Restricted Subsidiary of the Company, with respect to the obligations of a
Joint Venture, solely by virtue of a Restricted Subsidiary of the Company being
the General Partner of such Joint Venture if, as of the date of determination,
no payment on such Indebtedness or obligation has been made by such General
Partner of such Joint Venture and such arrangement would not be classified and
accounted for, in accordance with GAAP, as a liability on a consolidated balance
sheet of the Company)) or (ii) entered into for purposes of assuring in any
other manner the obligee of such Indebtedness or Disqualified Stock of the
payment thereof or to protect such obligee against loss in respect thereof in
whole or in part (including by agreement to keep-well, to purchase assets,
goods, securities or services, to take-or-pay, to maintain financial statement
conditions or otherwise); provided that the term "Guarantee" shall not include
endorsements for collection or deposit in the ordinary course of business. The
term "Guarantee" used as a verb has a corresponding meaning.

     "Hedging Obligations" means, with respect to any Person, the obligations of
such Person under (i) interest rate swap agreements, interest rate cap
agreements and interest rate collar agreements, (ii) forward foreign exchange
contracts or currency swap agreements, (iii) other agreements or arrangements
designed to protect such Person against fluctuations in interest rates or
currency values and (iv) commodity price protection agreements or commodity
price hedging agreements designed to manage fluctuations in prices or costs of
raw materials, manufactured products or related commodities.

     "Holder" or "Noteholder" means the Person in whose name a Note is
registered on the Registrar's books.

     "Indebtedness" means, with respect to any Person, any indebtedness of such
Person, whether or not contingent, in respect of borrowed money or evidenced by
bonds, notes, debentures or similar instruments or letters of credit (or
reimbursement agreements in respect thereof) or banker's acceptances or
representing Capital Lease Obligations or the balance deferred and unpaid of the
purchase price of any property or representing net Hedging Obligations, except
any such balance that constitutes an accrued expense or a trade payable, if and
to the extent any of the foregoing indebtedness (other than letters of credit
and Hedging Obligations) would appear as a liability on a balance sheet of such
Person prepared in

                                       9



accordance with GAAP, as well as all indebtedness of others secured by a Lien on
any asset of such Person whether or not such indebtedness is assumed by such
Person (provided that, for purposes of determining the amount of any
Indebtedness of the type described in this clause, if recourse with respect to
such Indebtedness is limited to such asset, the amount of such Indebtedness
shall be limited to the lesser of the fair market value of such asset or the
amount of such Indebtedness) and, to the extent not otherwise included, the
Guarantee by such Person of any indebtedness of the types described above of any
other Person; provided that Indebtedness shall not include the pledge by the
Company or any of its Restricted Subsidiaries of the Capital Stock of a Joint
Venture Subsidiary, an Unrestricted Subsidiary or a Joint Venture permitted by
Section 4.07(b)(xi) or Section 4.07(b)(xii) to secure Non-Recourse Debt of such
Unrestricted Subsidiary or Joint Venture.

     The Equistar Assumed Debt shall not constitute Indebtedness of the Company
as of any date of determination if the Company has not made any principal or
interest payments on such Indebtedness after the Issue Date; provided that, the
payment by the Company of any principal or interest thereon shall be deemed to
be an incurrence of such Indebtedness on the day of such payment. The amount of
any Indebtedness outstanding as of any date shall be (i) the accreted value
thereof, in the case of any Indebtedness that does not require current payments
of interest and (ii) the principal amount thereof, together with any interest
thereon that is more than 30 days past due, in the case of any other
Indebtedness.

     "Indenture Obligations" means (a) all principal of and interest (including,
without limitation, (i) any Liquidated Damages and (ii) any interest which
accrues after the commencement of any case, proceeding or other action relating
to the bankruptcy, insolvency or reorganization of the Company, whether or not
allowed or allowable as a claim in any such proceeding) on any Note issued
pursuant to the Indenture, (b) all other amounts payable by the Company or any
Subsidiary Guarantor under the Indenture and (c) any renewals or extensions of
any of the foregoing.

     "Initial Additional Notes" means Additional Notes issued in an offering not
registered under the Securities Act.

     "Initial Notes" means the Company's 10 1/2% Senior Secured Notes Due 2013,
issued on the Issue Date (and any Notes issued in respect thereof pursuant to
Section 3.04,3.05,3.06,3.13,3.14 or 10.08), but not including any Exchange Notes
issued in exchange therefor.

     "Institutional Accredited Investor" means an institution that is an
"accredited investor" as that term is defined in Rule 501 (a)( 1), (2), (3) or
(7) under the Securities Act.

     "Interest Payment Date" means, when used with respect to any Note and any
installment of interest thereon, the date specified in such Note as the fixed
date on which such installment of interest is due and payable, as set forth in
such Note.

     "Investment Grade" means a rating of BBB- or higher by S&P or Baa3 or
higher by Moody's or the equivalent of such ratings by S&P or Moody's. In the
event that the Company shall select any other Rating Agency pursuant to the
provisions of the definition thereof, the equivalent of such ratings by such
Rating Agency shall be used.

     "Investments" means, with respect to any Person, all investments by such
Person in another Person (including an Affiliate of such Person) in the form of
direct or indirect loans, advances or extensions of credit to such other Person
(including any Guarantee by such Person of the Indebtedness or Disqualified
Stock of such other Person) or capital contributions or purchases or other
acquisitions for consideration of Indebtedness, Equity Interests or other
securities of such other Person, together with all items that are or would be
classified as investments of such investing Person on a balance sheet prepared
in accordance with GAAP; provided that (x) trade credit and accounts receivable
in the ordinary course of business, (y) commissions, loans, advances, fees and
compensation paid in the ordinary course of business to officers, directors and
employees and (z) reimbursement obligations in respect of letters of credit and
tender, bid, performance, government contract, surety and appeal bonds, in each
case solely with respect to obligations of the Company or any of its Restricted
Subsidiaries shall not be considered Investments. If the Company

                                       10



or any Restricted Subsidiary of the Company sells or otherwise disposes of any
Equity Interests of any direct or indirect Restricted Subsidiary of the Company
such that, after giving effect to any such sale or disposition, such Person is
no longer a Restricted Subsidiary of the Company, the Company shall be deemed to
have made an Investment on the date of any such sale or disposition equal to the
fair market value of the Equity Interests of such Restricted Subsidiary not sold
or disposed of in an amount determined as provided in Section 4.07(a).

     "Issue Date" means the date on which the Initial Notes are originally
issued.

     "Joint Venture" means any joint venture between the Company or any
Restricted Subsidiary and any other Person, whether or not such joint venture is
a Subsidiary of the Company or any Restricted Subsidiary.

     "Joint Venture Subsidiary" means a Subsidiary of the Company or any of its
Subsidiaries that has no assets and conducts no operations other than its
ownership of Equity Interests of a Joint Venture.

     "Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest (other than, in the case of a Receivables Facilities,
security interests under the Uniform Commercial Code arising solely by virtue of
the application of Article 9 thereof to sales of accounts) or encumbrance of any
kind in respect of such asset, whether or not filed, recorded or otherwise
perfected under applicable law (including any conditional sale or other title
retention agreement, and any lease in the nature thereof) or the assignment or
conveyance of any right to receive income therefrom.

     "Liquidated Damages" means liquidated damages owed to the Holders pursuant
to a Registration Rights Agreement.

     "Lyondell TDI" means Lyondell Chimie France TDI, a French limited
partnership and a wholly-owned Subsidiary of the Company.

     "Major Asset Sale" means an Asset Sale designated by the Company by prior
notice to the Trustee as a Major Asset Sale, so long as in connection therewith

          (i)    the Company receives Net Proceeds in an aggregate amount not
     less than $1,000,000,000 (which shall be deemed Net Proceeds of such Major
     Asset Sale for purposes of Section 4.09),

          (ii)   at the time of such Major Asset Sale and after giving effect
     thereto, no Default shall exist,

          (iii)  the sum of the gross cash proceeds received by the Company in
     respect of such Major Asset Sale plus the value of the interest of the
     Company in the Subject Assets Transferee (if any) after giving effect to
     such Major Asset Sale is not less than the value (as conclusively
     determined by the Board of Directors of the Company) of the portion of the
     Subject Assets transferred by the Company in connection with such Major
     Asset Sale, and

          (iv)   the Company directly or indirectly is the operator of the
     Subject Assets in which it or a Subject Assets Transferee retains an
     interest. For purposes of clause (i) of this definition (l) a transaction
     that produces substantially the same economic result as a sale of a partial
     interest in an asset, as might be achieved, for instance, through
     contractual arrangements allocating future revenues and costs attributable
     to the asset, shall be deemed an Asset Sale even though there may be no
     change in title to the asset or in the ownership of the Person that has
     title to the asset and (2) a subsequent related transaction with the same
     Acquiring Person (or an Affiliate thereof) contemplated by the terms of the
     initial Major Asset Sale with such Person shall, for purposes of
     determining the applicability of and compliance with this definition, be
     deemed a single cumulative transaction.

                                       11



     "Moody's" means Moody's Investors Service, Inc., and its successors.

     "Net Income" means, with respect to any Person, the net income (loss) of
such Person, determined in accordance with GAAP and before any reduction in
respect of Preferred Stock dividends, excluding, however, (i) any gain or loss,
together with any related provision for taxes on such gain or loss, realized in
connection with (a) any Asset Sale or any disposition pursuant to a Sale and
Leaseback Transaction or (b) the disposition of any securities by such Person or
any of its Restricted Subsidiaries or the extinguishment of any Indebtedness of
such Person or any of its Restricted Subsidiaries and (ii) any extraordinary
gain or loss, together with any related provision for taxes on such
extraordinary gain or loss.

     "Net Proceeds" means the aggregate cash proceeds (excluding any proceeds
deemed to be "cash" pursuant to Section 4.09) received by the Company or any of
its Restricted Subsidiaries in respect of any Asset Sale (including, without
limitation, any cash received upon the sale or other disposition of any non-cash
consideration received in any Asset Sale), net of the direct costs relating to
such Asset Sale (including, without limitation, legal, accounting and investment
banking fees and sales commissions) and any relocation expenses incurred as a
result thereof, taxes paid or payable as a result thereof (after taking into
account any available tax credits or deductions and any tax sharing
arrangements), amounts required to be paid to holders of minority interests in
Restricted Subsidiaries as a result of such Asset Sale, amounts required to be
applied to the repayment of Indebtedness (other than Indebtedness under the
Existing Credit Facility, the Existing Senior Secured Notes or the Existing ARCO
Chemical Debt) secured by a Lien on any asset sold in such Asset Sale and any
reserves for adjustment in respect of the sale price of such asset or assets
established in accordance with GAAP and any reserve for future liabilities
established in accordance with GAAP; provided that the reversal of any such
reserve that reduced Net Proceeds when issued shall be deemed a receipt of Net
Proceeds in the amount of such proceeds on such day.

     "Non-Recourse Debt" means Indebtedness as to which the lenders have been
notified in writing that they will not have any recourse to the stock or assets
(in each case, other than the stock of a Joint Venture or an Unrestricted
Subsidiary or of a Joint Venture Subsidiary that has no assets and conducts no
operations other than the holding, directly or indirectly, of Equity Interests
of such Joint Venture pledged by the Company or any of its Restricted
Subsidiaries to secure debt of such Joint Venture or Unrestricted Subsidiary) of
the Company or any of its Restricted Subsidiaries.

     "Non-U.S. Person" means a Person who is not a U.S. person, as defined in
Regulation S.

     "Notes" means the Initial Notes, any Additional Notes and the Exchange
Notes.

     "Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness and in all cases whether direct or
indirect, absolute or contingent, now outstanding or hereafter created, assumed
or incurred and including, without limitation, interest accruing subsequent to
the filing of a petition in bankruptcy or the commencement of any insolvency,
reorganization or similar proceedings at the rate provided in the relevant
documentation, whether or not an allowed claim, and any obligation to redeem or
defease any of the foregoing.

     "Officer" means, with respect to the Company, any Subsidiary Guarantor or
any other obligor on the Notes, the Chairman of the Board, the President, the
Chief Executive Officer, the Chief Financial Officer, the Secretary, the
Treasurer, any Assistant Secretary or Assistant Treasurer or any Vice President
of such Person.

     "Officer's Certificate" means, with respect to the Company or any other
obligor on the Notes, a certificate signed by an Officer of such Person.

     "Opinion of Counsel" means a written opinion from legal counsel. The
counsel may be an employee of or counsel to the Company or the Trustee.

                                       12



     "Original Notes" means the Initial Notes and any Exchange Notes issued in
exchange therefor.

     "Outstanding" when used with respect to Notes means, as of the date of
determination, all Notes theretofore authenticated and delivered under this
Indenture, except:

          (i)    Notes theretofore canceled by the Trustee or delivered to the
     Trustee for cancellation;

          (ii)   Notes for whose payment or redemption money in the necessary
     amount has been theretofore deposited with the Trustee or any Paying Agent
     in trust for the Holders of such Notes, provided that, if such Notes are to
     be redeemed, notice of such redemption has been duly given pursuant to this
     Indenture or provision therefor reasonably satisfactory to the Trustee has
     been made;

          (iii)  Notes paid pursuant to Section 3.06; and

          (iv)   Notes in exchange for or in lieu of which other Notes have been
     authenticated and delivered pursuant to this Indenture.

     A Note does not cease to be Outstanding because the Company or any
Affiliate of the Company holds the Note, provided that in determining whether
the Holders of the requisite amount of Outstanding Notes have given any request,
demand, authorization, direction, notice, consent or waiver hereunder, Notes
owned by the Company or any Affiliate of the Company shall be disregarded and
deemed not to be Outstanding, except that, for the purpose of determining
whether the Trustee shall be protected in relying on any such request, demand,
authorization, direction, notice, consent or waiver, only Notes which a
Responsible Officer of the Trustee actually knows are so owned shall be so
disregarded. Notes so owned that have been pledged in good faith may be regarded
as Outstanding if the pledgee establishes to the reasonable satisfaction of the
Trustee the pledgee's right to act with respect to such Notes and that the
pledgee is not the Company or an Affiliate of such Company.

     "Paying Agent" means any Person authorized by the Company to pay the
principal of (and premium, if any) or interest and Liquidated Damages, if any,
on any Notes on behalf of the Company.

     "Payment Default" means any failure to pay any scheduled installment of
interest or principal on any Indebtedness within the grace period provided for
such payment in the documentation governing such Indebtedness.

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

     "Permitted Business" means the petrochemical, chemical and petroleum
refining businesses and any business reasonably related, incidental,
complementary or ancillary thereto.

     "Permitted Investments" means:

          (a)    any Investment in the Company or in a Restricted Subsidiary of
the Company that is engaged in a Permitted Business;

          (b)    any Investment in Cash Equivalents;

          (c)    any Investment by the Company or any Subsidiary of the Company
in a Person, if as a result of such Investment: (i) such Person becomes a
Restricted Subsidiary of the Company engaged in a Permitted Business or (ii)
such Person is merged, consolidated or amalgamated with or into, or

                                       13



transfers or conveys substantially all its assets to, or is liquidated into, the
Company or a Restricted Subsidiary of the Company engaged in a Permitted
Business;

          (d)    any non-cash consideration (other than a joint venture interest
received in full or partial satisfaction of the 80% requirement in clause (ii)
of Section 4.09(a)) received as consideration in an Asset Sale that was made
pursuant to and in compliance with Section 4.09;

          (e)    any acquisition of assets or Equity Interests solely in
exchange for the issuance of Equity Interests (other than Disqualified Stock) of
the Company;

          (f)    Hedging Obligations entered into in the ordinary course of
business and otherwise permitted under the Indenture;

          (g)    Investments in an Accounts Receivable Subsidiary that, as
conclusively determined by the Board of Directors, are necessary or advisable to
effect a Receivables Facility;

          (h)    Investments in Unrestricted Subsidiaries and Joint Ventures in
an aggregate amount, taken together with all other Investments made in reliance
on this clause (h), not to exceed at any time outstanding $25 million (after
giving effect to any reductions in the amount of any such Investments as a
result of the repayment or other disposition thereof for cash, the amount of
such reduction not to exceed the amount of such Investments previously made
pursuant to this clause (h)); and

          (i)    any Investment received by the Company or any Restricted
Subsidiary as consideration for the settlement of any litigation, arbitration or
claim in bankruptcy or in partial or full satisfaction of accounts receivable
owned by a financially troubled Person to the extent reasonably necessary in
order to prevent or limit any loss by the Company or any of its Restricted
Subsidiaries in connection with such accounts receivable.

     "Permitted Liens" means:

          (i)    Liens in favor of the Company or any Subsidiary Guarantor;

          (ii)   Liens securing the Notes and the Subsidiary Guarantees;

          (iii)  Liens on property of a Person existing at the time such Person
     is merged into or consolidated with the Company or any Restricted
     Subsidiary of the Company or becomes a Subsidiary of the Company; provided
     that such Liens were in existence prior to the contemplation of such
     merger, consolidation or acquisition and do not extend to any assets of the
     Company or its Restricted Subsidiaries other than those of the Person
     merged into or consolidated with the Company or that becomes a Restricted
     Subsidiary of the Company;

          (iv)   Liens on property existing at the time of acquisition thereof
     by the Company or any Restricted Subsidiary of the Company; provided that
     such Liens were in existence prior to the contemplation of such
     acquisition;

          (v)    Liens (including the interest of a lessor under a capital
     lease) on any asset existing at the time of acquisition thereof or incurred
     within 180 days of the time of acquisition or completion of construction
     thereof, whichever is later, to secure or provide for the payment of all or
     any part of the purchase price (or construction price) thereof;

          (vi)   Liens incurred or assumed in connection with the issuance of
     revenue bonds the interest on which is exempt from federal income taxation
     pursuant to Section 103(b) of the Internal Revenue Code;

                                       14



          (vii)  Liens imposed by law, such as laborers' or other employees',
     carriers', warehousemen's, mechanics', materialmen's and vendors' Liens and
     Liens imposed by law on pipelines or pipeline facilities;

          (viii) Liens arising by reason of deposits necessary to qualify the
     Company or any Restricted Subsidiary to conduct business, maintain self
     insurance or comply with any law and Liens securing the PBGC Settlement;

          (ix)   Liens to secure the performance of statutory obligations,
     tender, bid, performance, government contract, surety or appeal bonds or
     other obligations of a like nature incurred in the ordinary course of
     business;

          (x)    Liens existing on the Issue Date other than Liens securing
     Indebtedness under the Existing Credit Facility, the Existing Senior
     Secured Notes or the Existing ARCO Chemical Debt;

          (xi)   Liens for taxes, assessments or governmental charges or claims
     that are not yet delinquent or that are being contested in good faith by
     appropriate proceedings, prejudgment Liens that are being contested in good
     faith by appropriate proceedings and Liens arising out of judgments or
     awards against the Company or any Restricted Subsidiary with respect to
     which the Company or such Restricted Subsidiary at the time shall be
     prosecuting an appeal or proceedings for review and with respect to which
     it shall have secured a stay of execution pending such appeal or
     proceedings for review; provided that in each case any reserve or other
     appropriate provision as shall be required in conformity with GAAP shall
     have been made therefor;

          (xii)  easements, rights-of-way, restrictions, irregularities of title
     and other similar charges or encumbrances, not interfering in any material
     respect with the ordinary conduct of the business of the Company or any of
     its Restricted Subsidiaries;

          (xiii) Liens securing reimbursement obligations with respect to
     commercial letters of credit obtained in the ordinary course of business
     which encumber documents and other property or assets relating to such
     letters of credit and products and proceeds thereof;

          (xiv)  Liens securing assets under construction arising from progress
     or partial payments by a customer of the Company or its Restricted
     Subsidiaries relating to such property or assets;

          (xv)   licenses or leases by the Company or any of its Restricted
     Subsidiaries as licensor or lessor in the ordinary course of business and
     otherwise permitted by the Indenture for patents, copyrights, trademarks,
     tradenames and other intellectual property;

          (xvi)  leases or subleases by the Company or any of its Restricted
     Subsidiaries as lessor or sublessor in the ordinary course of business and
     otherwise permitted by the Indenture;

          (xvii) Liens in favor of customs and revenue authorities arising as
     a matter of law to secure payment of customs duties in connection with the
     importation of goods;

          (xviii) Liens resulting from the deposit of funds or evidences of
     Indebtedness in trust for the purpose of (A) defeasing Indebtedness of the
     Company or any of its Restricted Subsidiaries (which defeasance is
     otherwise permitted under the Indenture) having an aggregate principal
     amount at any one time outstanding not to exceed $25 million or (B)
     defeasing Indebtedness ranking pari passu with the Notes; provided that the
     Notes are defeased concurrently with such Indebtedness;

                                       15



          (xix)  from and after the first date when the Notes are rated
     Investment Grade, Liens on any asset of the Company other than any of the
     Company's or any of its Restricted Subsidiary's manufacturing plants or
     Liens on any Equity Interests of any Restricted Subsidiary that owns a
     manufacturing plant;

          (xx)   the pledge of Equity Interests of an Unrestricted Subsidiary or
     a Joint Venture (or of a Joint Venture Subsidiary that has no assets and
     conducts no operations other than the holding, directly or indirectly, of
     Equity Interests of such Joint Venture) organized (or designated as an
     Unrestricted Subsidiary and holding no other assets and conducting no other
     operations) to construct, own and/or operate a propylene oxide plant in the
     European Union to secure Non-Recourse Debt of such Joint Venture or
     Unrestricted Subsidiary;

          (xxi)  the pledge of Equity Interests of an Unrestricted Subsidiary
     or a Joint Venture (or of a Joint Venture Subsidiary that has no assets and
     conducts no operations other than the holding, directly or indirectly, of
     Equity Interests of such Joint Venture) organized (or designated as an
     Unrestricted Subsidiary and holding no other assets and conducting no other
     operations) to participate in the improvement of the Rhodia TDI Plant to
     secure Non-Recourse Debt of such Joint Venture or Unrestricted Subsidiary
     or Rhodia or a wholly-owned subsidiary of Rhodia;

          (xxii) Liens on equipment of the Company or any Restricted Subsidiary
     arising as a result of a sale and leaseback with respect to such equipment;
     provided that the proceeds from such sale and leaseback are applied
     pursuant to Section 4.09;

          (xxiii) Asset Sale Liens;

          (xxiv) customary Liens for the fees, costs and expenses of trustees
     and escrow agents pursuant to any indenture, escrow agreement or similar
     agreement establishing a trust or an escrow arrangement, and Liens pursuant
     to merger agreements, stock purchase agreements, asset sale agreements,
     option agreements and similar agreements in respect of the disposition of
     property or assets of the Company or any Restricted Subsidiary, to the
     extent such dispositions are permitted hereunder;

          (xxv)  netting provisions and setoff rights in favor of counterparties
     to agreements creating Hedging Obligations;

          (xxvi) other Liens on assets of the Company or any Restricted
     Subsidiary of the Company securing Indebtedness that is permitted by the
     terms of the Indenture to be outstanding having an aggregate principal
     amount at any one time outstanding not to exceed $100 million; and

          (xxvii) Liens to secure a Permitted Refinancing incurred to refinance
     Indebtedness that was secured by a Lien permitted under the Indenture and
     that was incurred in accordance with the provisions of the Indenture;
     provided that such Liens do not extend to or cover any property or assets
     of the Company or any Restricted Subsidiary other than assets or property
     securing the Indebtedness so refinanced.

     "Permitted Refinancing" means any Indebtedness of the Company or any of its
Subsidiaries or Preferred Stock of a Finance Subsidiary issued in exchange for,
or the net proceeds of which are used solely to extend, refinance, renew,
replace, defease or refund, other Indebtedness of the Company or any of its
Restricted Subsidiaries; provided that:

          (i)    the principal amount (or liquidation preference in the case of
     Preferred Stock) of such Permitted Refinancing (or if such Permitted
     Refinancing is issued at a discount, the initial issuance price of such
     Permitted Refinancing) does not exceed the principal amount of the
     Indebtedness so extended, refinanced, renewed, replaced, defeased or
     refunded (plus the amount of any premiums paid and reasonable expenses
     incurred in connection therewith);

                                       16



          (ii)   such Permitted Refinancing or, in the case of Preferred Stock
     of a Finance Subsidiary, the Indebtedness issued to such Finance
     Subsidiary, has a Stated Maturity date later than the Stated Maturity date
     of, and has a Weighted Average Life to Maturity equal to or greater than
     the Weighted Average Life to Maturity of, the Indebtedness being extended,
     refinanced, renewed, replaced, defeased or refunded;

          (iii)  if the Indebtedness being extended, refinanced, renewed,
     replaced, defeased or refunded is subordinated by its terms in right of
     payment to the Notes or the Subsidiary Guarantees, such Permitted
     Refinancing, or, in the case of Preferred Stock, the Indebtedness issued to
     such Finance Subsidiary, has a Stated Maturity date later than the Stated
     Maturity date of, and is subordinated in right of payment to, the Notes on
     subordination terms at least as favorable to the Holders of Notes as those
     contained in the documentation governing the Indebtedness being extended,
     refinanced, renewed, replaced, defeased or refunded;

          (iv)   such Indebtedness is incurred by the Company or a Subsidiary
     Guarantor (or such Preferred Stock is issued by a Finance Subsidiary) if
     the Company or a Subsidiary Guarantor is the obligor on the Indebtedness
     being extended, refinanced, renewed, replaced, defeased or refunded; and

          (v)    such Indebtedness is incurred by the Company or a Restricted
     Subsidiary (or such Preferred Stock is issued by a Finance Subsidiary) if a
     Restricted Subsidiary that is not a Subsidiary Guarantor is the obligor on
     the Indebtedness being extended, refinanced, renewed, replaced, defeased or
     refunded.

     "Person" means any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision thereof or any
other entity.

     "Place of Payment" means a city or any political subdivision thereof
referred to in Article 3 and initially designated under Section 4.02.

     "Predecessor Notes" of any particular Note means every previous Note
evidencing all or a portion of the same debt as that evidenced by such
particular Note; and, for the purposes of this definition, any Note
authenticated and delivered under Section 3.06 in lieu of a mutilated,
destroyed, lost or stolen Note shall be deemed to evidence the same debt as the
mutilated, destroyed, lost or stolen Note.

     "Preferred Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated, whether
voting or nonvoting) of preferred or preference stock of such Person which is
outstanding or issued on or after the date of the Indenture.

     "Principal" of a Note means the principal of the Note plus the premium, if
any, payable on the Note which is due or overdue or is to become due at the
relevant time.

     "QIB", or "Qualified Institutional Buyer" means a "qualified institutional
buyer," as the term is defined in Rule 144A under the Securities Act.

     "Qualified Equity Interests" shall mean all Equity Interests of a Person
other than Disqualified Stock of such Person.

     "Rating Agency" means (i) S&P or (ii) Moody's or (iii) if neither S&P nor
Moody's shall exist, a nationally recognized securities rating agency or
agencies, as the case may be, selected by the Company, which shall be
substituted for S&P or Moody's or both, as the case may be.

     "Receivables Facility" means one or more receivables financing facilities
or arrangements, as amended from time to time, pursuant to which the Company or
any of its Restricted Subsidiaries sells

                                       17



(including a sale in exchange for a promissory note of or an Equity Interest in
an Accounts Receivable Subsidiary) its accounts receivable to an Accounts
Receivable Subsidiary.

     "Receivables Fees" means distributions or payments made directly or by
means of discounts with respect to any participation interests issued or sold in
connection with, and other fees paid to a Person that is not the Company or a
Restricted Subsidiary in connection with, any Receivables Facility.

     "Redemption Date" when used with respect to any Note to be redeemed or
purchased means the date fixed or such redemption or purchase by or pursuant to
this Indenture and the Notes.

     "Redemption Price" when used with respect to any Note to be redeemed or
purchased means the price at which it is to be redeemed or purchased pursuant to
this Indenture and the Notes.

     "Registration Rights Agreement" means (i) the Registration Rights Agreement
dated as of May 20, 2003 among the Company, the Subsidiary Guarantors party
thereto and the Initial Purchasers party thereto, as such agreement may be
amended from time to time, and (ii) with respect to any Initial Additional
Notes, one or more registration rights agreements between the Company and the
other parties thereto, as such agreement(s) may be amended from time to time,
relating to rights given by the Company to the purchasers of Initial Additional
Notes to register or exchange such Initial Additional Notes under the Securities
Act.

     "Registration Statement" means the Registration Statement as defined in the
Registration Rights Agreement.

     "Regular Record Date" for the interest payable on any Interest Payment Date
means the date specified for that purpose in Section 3.01.

     "Regulation S" means Regulation S under the Securities Act.

     "Resale Restriction Termination Date" means, with respect to any Note, the
date that is two years (or such other period as may hereafter be provided under
Rule 144(k) under the Securities Act or any successor provision thereto as
permitting the resale by non-affiliates of Restricted Securities without
restriction) after the later of the original issue date in respect of such Note
and the last date on which the Company or any Affiliate of the Company was the
owner of such Note (or any Predecessor Note thereto).

     "Responsible Officer" when used with respect to the Trustee means any
officer in the corporate trust department of the Trustee, and also means, with
respect to a particular corporate trust matter, any other officer to whom such
matter is referred because of his or her knowledge of and familiarity with the
particular subject.

     "Restricted Investment" means an Investment other than a Permitted
Investment.

     "Restricted Period" means the 40-day distribution compliance period as
defined in Regulation S which, in the case of the Initial Notes, ends June 30,
2003.

     "Restricted Security" has the meaning assigned to such term in Rule
144(a)(3) under the Securities Act; provided, however, that the Trustee shall be
entitled to receive, at its request, and conclusively rely on an Opinion of
Counsel with respect to whether any Note constitutes a Restricted Security.

     "Restricted Subsidiary" of a Person means any Subsidiary of the referent
Person that is not an Unrestricted Subsidiary. Unless the context otherwise
requires, references to a "Restricted Subsidiary" refer to a Restricted
Subsidiary of the Company.

                                       18



     "Rhodia" means Rhodia S.A., a French company and the successor in interest
to Rhone-Poulenc Chemie S.A. under the TDI Agreements.

     "Rhodia TDI Plant" means the manufacturing facilities for the production of
toluene diisocyanate, currently owned by Rhodia and located at Pont-de-Claix,
France.

     "Sale and Leaseback Transaction" means, with respect to any Person, any
arrangement with a lender or an investor providing for the leasing by such
Person of any property or asset of such Person which has been or is being sold
or transferred by such Person to such lender or investor if such arrangement is
accounted for as a capitalized lease by such Person under GAAP.

     "SEC" means the Securities and Exchange Commission.

     "Securities Act" means the Securities Act of 1933, as amended.

     "Security Documents" means (i) the agreements and instruments listed on
Schedule A to the Purchase Agreement dated May 15, 2003 with respect to the
Initial Notes and (ii) any other pledge agreements, security agreements,
mortgages, deeds of trust or other agreements or instruments between the Company
and/or any of its Restricted Subsidiaries and the Collateral Agent granting
Liens on any asset of the Company or any of its Restricted Subsidiaries to
secure the Existing Credit Facility Obligations, in each case as amended,
modified, restated or supplemented from time to time.

     "Senior Indebtedness" has the meaning assigned to such term in the Senior
Subordinated Notes Indenture.

     "Senior Subordinated Notes" means the Company's 10 7/8% Senior Subordinated
Notes Due 2009 issued by the Company pursuant to the Senior Subordinated Notes
Indenture.

     "Senior Subordinated Notes Indenture" means the indenture among the
Company, the Subsidiary Guarantors party thereto and The Bank of New York, as
trustee, pursuant to which the Company issued the Senior Subordinated Notes.

     "Shelf Registration Statement" means the Shelf Registration Statement as
defined in a Registration Rights Agreement.

     "Significant Asset Sale" means an Asset Sale of (x) any of the Company's or
its Restricted Subsidiaries' plants that (a) has a fair market value in excess
of $50 million or (b) for Net Proceeds in excess of $50 million (a "Significant
Asset") or (y) a controlling interest in any Restricted Subsidiary that owns a
Significant Asset (other than, in each case, an involuntary disposition, to the
extent that the Existing Credit Facility (but not any refinancing thereof other
than a credit facility with commercial banks and other lenders) permits the
proceeds thereof to be reinvested prior to any mandatory prepayment of amounts
outstanding thereunder).

     "Significant Subsidiary" means any Restricted Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Act, as such Regulation is in effect on the Issue
Date.

     "Specified Joint Ventures" means (i) Equistar Chemicals, LP, (ii)
LYONDELL-CITGO Refining LP ("LCR") and (iii) Lyondell Methanol Company, L.P.

     "Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 3.07.

     "S&P" means Standard & Poor's Ratings Services, a division of The
McGraw-Hill Companies, Inc., and its successors.

                                       19



     "Stated Maturity" means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which such payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness (or any later date established by any amendment to
such original documentation) and shall not include any contingent obligations to
repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.

     "Subject Assets" means, with respect to any Major Asset Sale, the assets
that are the subject of such Major Asset Sale.

     "Subject Assets Transferee" means any Restricted Subsidiary or Joint
Venture that becomes the owner of Subject Assets in connection with a Major
Asset Sale.

     "Subsidiary" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of Capital Stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
Person or one or more of the other Subsidiaries of that Person (or a combination
thereof) and (ii) any partnership (a) the sole general partner or the managing
general partner of which is such Person or a Subsidiary of such Person or (b)
the only general partners of which are such Person or one or more Subsidiaries
of such Person (or any combination thereof) or (c) that is a Specified Joint
Venture and as to which (i) a general partner of which is such Person or a
Subsidiary of such Person, (ii) such Person owns, directly or indirectly, 50% or
more of the partnership interests of such Specified Joint Venture and (iii) the
Board of Directors of such Person has designated such Specified Joint Venture to
be a "Subsidiary" (which designation shall be irrevocable for so long as such
Specified Joint Venture satisfies the foregoing requirements). As of the Issue
Date, none of the Specified Joint Ventures, other than Lyondell Methanol
Company, L.P., are Subsidiaries of the Company. Unless the context otherwise
requires, references to a "Subsidiary" refer to a Subsidiary of the Company. No
Specified Joint Venture that otherwise would be a "Subsidiary" under this
definition shall be deemed to be or become a Subsidiary or Restricted Subsidiary
until such designation would not result in a Default under Section 4.06
(provided that, if (i) such Specified Joint Venture would otherwise be or become
a "Subsidiary" as a result of an Investment by the Company or any Restricted
Subsidiary made after June 12, 2002, and (ii) such Investment is not made in
exchange for, or out of the net cash proceeds of the substantially concurrent
sale (other than to a Subsidiary or Joint Venture of the Company) of, Qualified
Equity Interests of the Company, then this sentence shall not apply); at such
time as the designation of such Specified Joint Venture would not result in a
Default under Section 4.06, such Specified Joint Venture shall automatically be
a Subsidiary and a Restricted Subsidiary (unless designated as an Unrestricted
Subsidiary).

     "Subsidiary Guarantee" means a Guarantee by a Subsidiary Guarantor of the
Company' obligations with respect to the Notes.

     "Subsidiary Guarantor" means (i) ARCO Chemical Technology, Inc., ARCO
Chemical Technology, L.P. and Lyondell Chemical Nederland, Ltd. and (ii) each
Restricted Subsidiary that executes a supplemental indenture, in the form of
Exhibit B hereto, providing for the Guarantee of the payment of the Notes, in
each case until such time as such Subsidiary is released from its Subsidiary
Guarantee as permitted by this Indenture.

     "TDI Agreements" means (i) the Share Purchase Agreement dated as of January
23, 1995 between ARCO Chemical Europe Inc. and Rhone-Poulenc Chemie S.A., as
such agreement may be amended, supplemented or otherwise modified from time to
time, (ii) the Processing Agreement dated as of January 23, 1995 between ARCO
Chemical Chemie TDI and Rhone-Poulenc Chemie S.A., as such agreement may be
amended, supplemented or otherwise modified from time to time, and (iii) the TDI
License.

     "TDI Assets" means (i) all rights of ARCO Chemical Europe Inc., ARCO
Chemical Chemie TDI, ARCO Chemical Technology, LP and their respective
successors under the TDI Agreements and (ii) all of Lyondell TDI's customer
lists relating to the Rhodia TDI Plant.

                                       20



     "TDI License" means the TDI Technology Agreement dated as of January 23,
1995 between ARCO Chemical Technology LP and Rhone-Poulenc Chemie S.A., as such
agreement may be amended, supplemental or otherwise modified from time to time.

     "TIA" means the Trust Indenture Act of 1939 (15 U.S.C. sections
77aaa-77bbbb) as in effect on the date of this Indenture, except as provided by
Section 9.04.

     "Trustee" means the Person named as the "Trustee" in the first paragraph of
this Indenture until a successor Trustee shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Trustee" shall mean
such successor Trustee.

     "Unrestricted Subsidiary" means (i) any Subsidiary of the Company that is
designated by the Board of Directors of the Company as an Unrestricted
Subsidiary pursuant to a board resolution, (ii) any Subsidiary of an
Unrestricted Subsidiary and (iii) any Accounts Receivable Subsidiary. The Board
of Directors may designate any Subsidiary of the Company (including any newly
acquired or newly formed Subsidiary) to be an Unrestricted Subsidiary unless
such Subsidiary or any of its Subsidiaries owns any Equity Interest or
Indebtedness of, or holds any Lien on any property of, the Company or any other
Subsidiary of the Company that is not a Subsidiary of the Subsidiary to be so
designated; provided that

          (a)  any Guarantee (other than as a co-obligor of the Equistar Assumed
Debt so long as the Equistar Assumed Debt is not considered Indebtedness of the
Company pursuant to the definition thereof) by the Company or any Restricted
Subsidiary of any Indebtedness of the Subsidiary being so designated shall be
deemed an "Incurrence" of such Indebtedness and an "Investment" by the Company
or such Restricted Subsidiary (or both, if applicable) at the time of such
designation,

          (b)  either (i) the Subsidiary to be so designated has total assets of
$1,000 or less or (ii) if such Subsidiary has assets greater than $1,000, such
designation would be permitted under Section 4.07,

          (c)  if applicable, the Investment and the incurrence of Indebtedness
referred to in clause (a) of this proviso would be permitted under Section 4.06
and Section 4.07 and

          (d)  in the case of any Subsidiary that is a Joint Venture as of the
date of its designation as an Unrestricted Subsidiary, such Subsidiary has an
aggregate of 15% or more of its outstanding Capital Stock or other voting
interests (other than directors' qualifying shares) held by another Person other
than the Company or any Restricted Subsidiary or any Affiliate of the Company.

     Any such designation by the Board of Directors of the Company pursuant to
clause (i) above shall be evidenced to the Trustee by filing with the Trustee a
certified copy of the Board Resolution giving effect to such designation and an
Officer's Certificate certifying that such designation complied with the
foregoing conditions and was permitted by Section 4.06 and Section 4.07.

     If (i) at any time, any Unrestricted Subsidiary would fail to meet the
foregoing requirements of clause (d) (because the Company has acquired more than
85% of the outstanding Capital Stock or other voting interests of any Subsidiary
that was a Joint Venture on the date of its designation as an Unrestricted
Subsidiary), or (ii) at any time the Company or any Restricted Subsidiary
Guarantees any Indebtedness of such Unrestricted Subsidiary or makes any other
Investment in such Unrestricted Subsidiary and such incurrence of Indebtedness
or Investment would not be permitted under Section 4.06 and Section 4.07 it
shall thereafter cease to be an Unrestricted Subsidiary for purposes of the
Indenture and any Indebtedness of such Subsidiary shall be deemed to be incurred
by a Restricted Subsidiary of the Company as of such date (and, if such
Indebtedness is not permitted to be incurred as of such date under Section 4.06,
the Company shall be in default of such covenant). The Board of Directors of the
Company may at any time designate any Unrestricted Subsidiary to be a Restricted
Subsidiary; provided that such designation shall be deemed to be an incurrence
of Indebtedness by a Restricted Subsidiary of the Company of any outstanding
Indebtedness of such Unrestricted Subsidiary and such designation shall be
permitted only if (i) such

                                       21



Indebtedness is permitted under Section 4.06 and (ii) no Default or Event of
Default would be in existence following such designation.

     "U.S. Government Obligations" means direct obligations (or certificates
representing an ownership interest in such obligations) of the United States of
America (including any agency or instrumentality thereof) for the payment of
which the full faith and credit of the United States of America is pledged and
which are not callable at the issuer's option.

     "Weighted Average Life to Maturity" means, when applied to any Indebtedness
at any date, the number of years obtained by dividing (i) the sum of the
products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (b) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment, by (ii) the then outstanding principal
amount of such Indebtedness.

     "Wholly Owned Restricted Subsidiary" of any Person means a Restricted
Subsidiary of such Person all the outstanding Equity Interests of which (other
than directors' qualifying shares) shall at the time be owned by such Person or
by one or more Wholly Owned Restricted Subsidiaries of such Person or by such
Person and one or more Wholly Owned Restricted Subsidiaries of such Person.

     "Wholly Owned Subsidiary" of any Person means a Subsidiary of such Person
all the outstanding Equity Interests of which (other than directors' qualifying
shares) shall at the time be owned by such Person or by one or more Wholly Owned
Subsidiaries of such Person or by such Person and one or more Wholly Owned
Subsidiaries of such Person.

     Section 1.02.   Other Definitions.

                                                Defined
              Term                             in Section

Acceleration Notice                               6.02
Act                                               1.08
Affiliate Transaction                             4.10
Agent members                                     3.13
Asset Sale Offer                                  4.09
Authentication Order                              3.03
Change of Control Payment                         4.14
Change of Control Payment Date                    4.14
Covenant Defeasance                              12.03
Defaulted Interest                                3.07
DTC                                               2.03
Event of Default                                  6.01
Excess Proceeds                                   4.09
Expiration Date                                   1.08
Global Notes                                      2.01
Guaranteed Indebtedness                           4.13
incur                                             4.06
Legal Defeasance                                 12.02
Offshore Global Note                              2.01
Offshore Note Exchange Date                       2.01
Offshore Physical Note                            2.01
Permanent Offshore Global Note                    2.01
Physical Notes                                    2.01
Place of Payment                                  3.01
Plan Participants                                 4.07
Private Placement Legend                          2.03

                                       22



                                                Defined
              Term                             in Section

Redemption Amount                                10.01
redemption date                                  13.01
Regular Record Date                               3.01
Restricted Payment                                4.07
Successor Company                                 5.01
Subordinated Debt                                 4.07
Temporary Offshore Global Note                    2.01
U.S. Global Notes                                 2.01
U.S. Physical Notes                               2.01


     Section 1.03.   Rules of Construction. For all purposes of this Indenture,
except as otherwise expressly provided or unless the context otherwise requires:

          (a)  the terms defined in this Indenture have the meanings assigned to
them in this Indenture;

          (b)  "or" is not exclusive;

          (c)  all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with GAAP and, unless expressly provided
otherwise, all determinations and computations made pursuant to any provision
hereof shall be made in accordance with GAAP; provided that references to any
Person and its Restricted Subsidiaries on a consolidated basis, and any
calculations of amounts with respect to any Person and its Restricted
Subsidiaries on a consolidated basis, shall refer to such Person and all its
Restricted Subsidiaries, whether or not such Restricted Subsidiaries would be
accounted for as consolidated subsidiaries on such Person's financial statements
prepared in accordance with GAAP;

          (d)  the words "herein," "hereof' and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision;

          (e)  all references to "$" or "dollars" shall refer to the lawful
currency of the United States of America;

          (f)  the words "include," "included" and "including" as used herein
shall be deemed in each case to be followed by the phrase "without limitation,"
if not expressly followed by such phrase or the phrase "but not limited to";

          (g)  words in the singular include the plural, and words in the plural
include the singular; and

          (h)  any reference to a Section or Article refers to such Section or
Article of this Indenture unless otherwise indicated.

     Section 1.04.   Incorporation by Reference of TIA. Whenever this Indenture
refers to a provision of the TIA, the provision is incorporated by reference in
and made a part of this Indenture. This Indenture is subject to the mandatory
provisions of the TIA, which are incorporated by reference in and made a part of
this Indenture. Any terms incorporated by reference in this Indenture that are
defined by the TIA, defined by any TIA reference to another statute or defined
by SEC rule under the TIA, have the meanings so assigned to them therein. The
following TIA terms have the following meanings:

     "indenture securities" means the Notes.

                                       23



     "indenture security holder" means a Holder or Noteholders.

     "indenture to be qualified" means this Indenture.

     "indenture trustee" or "institutional trustee" means the Trustee.

     "obligor" on the indenture securities means the Company, any Subsidiary
Guarantor and any other obligor on the indenture securities.

     Section 1.05.    Conflict with TIA. If any provision hereof limits,
qualifies or conflicts with a provision of the TIA that is required under the
TIA to be a part of and govern this Indenture, the latter provision shall
control. If any provision of this Indenture modifies or excludes any provision
of the TIA that may be so modified or excluded, the latter provision shall be
deemed (a) to apply to this Indenture as so modified or (b) to be excluded, as
the case may be.

     Section 1.06.    Compliance Certificates and Opinions. Upon any application
or request by the Company or by any other obligor upon the Notes to the Trustee
to take any action under any provision of this Indenture, the Company or such
other obligor upon the Notes, as the case may be, shall furnish to the Trustee
such certificates and opinions as may be required under the TIA. Each such
certificate or opinion shall be given in the form of one or more Officer's
Certificates, if to be given by an Officer, or an Opinion of Counsel, if to be
given by counsel, and shall comply with the requirements of the TIA and any
other requirements set forth in this Indenture. Notwithstanding the foregoing,
in the case of any such request or application as to which the furnishing of any
Officer's Certificate or Opinion of Counsel is specifically required by any
provision of this Indenture relating to such particular request or application,
no additional certificate or opinion need be furnished.

     Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture (except for certificates provided for in
Section 4.05) shall include:

          (a)  a statement that the individual signing such certificate or
opinion has read such covenant or condition and the definitions herein relating
thereto;

          (b)  a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;

          (c)  a statement that, in the opinion of such individual, he or she
made such examination or investigation as is necessary to enable him or her to
express an informed opinion as to whether or not such covenant or condition has
been complied with; and

          (d)  a statement as to whether, in the opinion of such individual,
such condition or covenant has been complied with.

     Section 1.07.   Form of Documents Delivered to Trustee. In any case where
several matters are required to be certified by, or covered by an opinion of,
any specified Person, it is not necessary that all such matters be certified by,
or covered by the opinion of, only one such Person, or that they be so certified
or covered by only one document, but one such Person may certify or give an
opinion with respect to some matters and one or more other such Persons as to
other matters, and any such Person may certify or give an opinion as to such
matters in one or several documents.

     Any certificate or opinion of an Officer may be based, insofar as it
relates to legal matters, upon a certificate or opinion of, or representations
by, counsel, unless such Officer knows that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate or opinion of counsel may
be based, insofar as it relates to factual matters, upon a certificate or
opinion of, or representations by, an Officer or Officers to the effect that the

                                       24



information with respect to such factual matters is in the possession of the
Company, unless such counsel knows that the certificate or opinion or
representations with respect to such matters are erroneous.

     Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.

     Section 1.08.   Acts of Noteholders; Record Dates. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by Holders may be embodied in and evidenced
by one or more instruments of substantially similar tenor signed by such Holders
in person or by agent duly appointed in writing; and, except as herein otherwise
expressly provided, such action shall become effective when such instrument or
instruments are delivered to the Trustee, and, where it is hereby expressly
required, to the Company. Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as the
"Act" of the Holders signing such instrument or instruments. Proof of execution
of any such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Indenture and (subject to Section 7.01)
conclusive in favor of the Trustee, the Company and any other obligor upon the
Notes, if made in the manner provided in this Section 1.08.

          (b)  The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by the certificate of any notary public or other officer authorized
by law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by an officer of a corporation or a member of a partnership or
other entity, on behalf of such corporation or partnership or other entity, such
certificate or affidavit shall also constitute sufficient proof of such Person's
authority. The fact and date of the execution of any such instrument or writing,
or the authority of the person executing the same, may also be proved in any
other manner that the Trustee deems sufficient.

          (c)  The ownership of Notes shall be proved by the Register.

          (d)  Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Note shall bind the Holder of every
Note issued upon the transfer thereof or in exchange therefor or in lieu
thereof, in respect of anything done or suffered to be done by the Trustee, the
Company or any other obligor on the Notes in reliance thereon, whether or not
notation of such action is made upon such Note.

          (e)  (i)    The Company may set any day as a record date for the
purpose of determining the Holders of Outstanding Notes entitled to give, make
or take any request, demand, authorization, direction, notice, consent, waiver
or other action provided or permitted by this Indenture to be given, made or
taken by Holders, provided that the Company may not set a record date for, and
the provisions of this paragraph shall not apply with respect to, the giving or
making of any notice, declaration, request or direction referred to in Section
1.08(e)(ii). If any record date is set pursuant to this paragraph, the Holders
of Outstanding Notes on such record date (or their duly designated proxies), and
no other Holders, shall be entitled to take the relevant action, whether or not
such Persons remain Holders after such record date; provided that no such action
shall be effective hereunder unless taken on or prior to the applicable
Expiration Date by Holders of the requisite principal amount of Outstanding
Notes on such record date. Nothing in this paragraph shall be construed to
prevent the Company from setting a new record date for any action for which a
record date has previously been set pursuant to this paragraph (whereupon the
record date previously set shall automatically and with no action by any Person
be canceled and of no effect), and nothing in this paragraph shall be construed
to render ineffective any action taken by Holders of the requisite principal
amount of Outstanding Notes on the date such action is taken. Promptly after any
record date is set pursuant to this paragraph, the Company, at its own expense,
shall cause notice of such record date, the proposed action by Holders and the
applicable Expiration Date to be given to the Trustee in writing and to each
Holder in the manner set forth in Section 1.10.

                                       25



               (ii)   The Trustee may set any day as a record date for the
purpose of determining the Holders of Outstanding Notes entitled to join in the
giving or making of (w) any Notice of Default, (x) any declaration of
acceleration referred to in Section 6.02, (y) any request to institute
proceedings referred to in Section 6.06(b) or (z) any direction referred to in
Section 6.05, in each case with respect to Notes. If any record date is set
pursuant to this paragraph, the Holders of Outstanding Notes on such record
date, and no other Holders, shall be entitled to join in such notice,
declaration, request or direction, whether or not such Holders remain Holders
after such record date; provided that no such action shall be effective
hereunder unless taken on or prior to the applicable Expiration Date by Holders
of the requisite principal amount of Outstanding Notes on such record date.
Nothing in this paragraph shall be construed to prevent the Trustee from setting
a new record date for any action for which a record date has previously been set
pursuant to this paragraph (whereupon the record date previously set shall
automatically and with no action by any Person be canceled and of no effect),
and nothing in this paragraph shall be construed to render ineffective any
action taken by Holders of the requisite principal amount of Outstanding Notes
on the date such action is taken. Promptly after any record date is set pursuant
to this paragraph, the Trustee, at the expense of the Company, shall cause
notice of such record date, the proposed action by Holders and the applicable
Expiration Date to be given to the Company in writing and to each Holder in the
manner set forth in Section 1.10.

               (iii)  With respect to any record date set pursuant to this
Section 1.08, the party hereto that sets such record dates may designate any day
as the "Expiration Date" and from time to time may change the Expiration Date to
any earlier or later day; provided that no such change shall be effective unless
notice of the proposed new Expiration Date is given to the Company or the
Trustee, whichever such party is not setting a record date pursuant to this
Section l.08(e) in writing, and to each Holder in the manner set forth in
Section 1.10, on or prior to the existing Expiration Date. If an Expiration Date
is not designated with respect to any record date set pursuant to this Section,
the party hereto that set such record date shall be deemed to have initially
designated the 180th day after such record date as the Expiration Date with
respect thereto, subject to its right to change the Expiration Date as provided
in this paragraph. Notwithstanding the foregoing, no Expiration Date shall be
later than the 180th day after the applicable record date.

               (iv)   Without limiting the foregoing, a Holder entitled
hereunder to take any action hereunder with regard to any particular Note may do
so with regard to all or any part of the principal amount of such Note or by one
or more duly appointed agents each of which may do so pursuant to such
appointment with regard to all or any part of such principal amount.

     Section 1.09.   Notices, Etc., to Trustee and Company. Any request, demand,
authorization, direction, notice, consent, waiver or Act of Holders or other
document provided or permitted by this Indenture to be made upon, given or
furnished to, or filed with,

          (a)  the Trustee by any Holder or by the Company or any other obligor
upon the Notes shall be sufficient for every purpose hereunder if made, given,
furnished or filed in writing to or with the Trustee at the Corporate Trust
Office (telephone: (212) 815-6286; facsimile: (212) 815-5915), or at any other
address furnished in writing to the Company by the Trustee, or

          (b)  the Company by the Trustee or by any Holder shall be sufficient
for every purpose hereunder if in writing and delivered in person or mailed,
first-class postage prepaid, to the Company at One Houston Center, Suite 700,
1221 McKinney, Houston, Texas 77010, Attention: General Counsel (facsimile:
(713) 309-2143), with copies to Baker Botts LLP at 910 Louisiana, Houston, Texas
77002, Attention: Stephen A. Massad, Esq. (facsimile: (713) 229-1522), or at any
other address previously furnished in writing to the Trustee by the Company.

     Section 1.10.    Notices to Holders; Waivers. Where this Indenture provides
for notice to Holders of any event, such notice shall be deemed to have been
given upon the mailing by first class mail, postage prepaid, of such notices to
Holders at their registered addresses as recorded in the Register, not later
than the latest date, and not earlier than the earliest date, prescribed herein
for the giving of such notice. In any case where notice to Holders is given by
mail, neither the failure to mail such notice, nor any

                                       26



defect in any notice so mailed, to any particular Holder shall affect the
sufficiency of such notice with respect to other Holders.

     Where this Indenture provides for notice in any manner, such notice may be
waived in writing by the Person entitled to receive such notice, either before
or after the event, and such waiver shall be the equivalent of such notice.
Waivers of notice by Holders shall be filed with the Trustee, but such filing
shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.

     In case, by reason of the suspension of regular mail service, or by reason
of any other cause, it shall be impossible to mail notice of any event as
required by any provision of this Indenture, then such notification as shall be
made with the approval of the Trustee (such approval not to be unreasonably
withheld) shall constitute a sufficient notification for every purpose
hereunder.

     Section 1.11.   Effect of Headings and Table of Contents. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.

     Section 1.12.   Successors and Assigns. All covenants and agreements in
this Indenture by the Company shall bind its respective successors and assigns,
whether so expressed or not.

     Section 1.13.   Separability Clause. In case any provision in this
Indenture or in the Notes shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.

     Section 1.14.   Benefits of Indenture. Nothing in this Indenture or in the
Notes, express or implied, shall give to any Person, other than the parties
hereto and their successors hereunder, any Paying Agent and the Holders, any
benefit or any legal or equitable right, remedy or claim under this Indenture.

     Section 1.15.   Governing Law. THIS INDENTURE, THE NOTES AND THE SUBSIDIARY
GUARANTEES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ANY PRINCIPLES OF CONFLICT OF
LAWS TO THE EXTENT THAT THE APPLICATION OF THE LAW OF ANOTHER JURISDICTION WOULD
BE REQUIRED THEREBY. TO THE EXTENT PERMITTED BY LAW, THE TRUSTEE, THE COMPANY,
THE SUBSIDIARY GUARANTORS, ANY OTHER OBLIGORS IN RESPECT OF THE NOTES AND (BY
THEIR ACCEPTANCE OF THE NOTES) THE HOLDERS, AGREE TO SUBMIT TO THE NON-EXCLUSIVE
JURISDICTION OF ANY UNITED STATES FEDERAL OR STATE COURT LOCATED IN THE BOROUGH
OF MANHATTAN, IN THE CITY OF NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF
OR RELATING TO THIS INDENTURE OR THE NOTES.

     Section 1.16.   Legal Holidays. In any case where any Interest Payment
Date, Redemption Date or Stated Maturity of any Note shall not be a Business
Day, then (notwithstanding any other provision of this Indenture or of the
Notes) payment of interest and Liquidated Damages, if any, or principal and
premium (if any) need not be made on such date, but may be made on the next
succeeding Business Day with the same force and effect as if made on the
Interest Payment Date or Redemption Date, or at the Stated Maturity.

     Section 1.17.   No Personal Liability of Directors, Officers, Employees,
Incorporators and Stockholders. No director, officer, employee, incorporator,
shareholder or other holder of Equity Interests of the Company or the Subsidiary
Guarantors, as such, shall have any liability for any obligations of the Company
or the Subsidiary Guarantors under the Notes, the Subsidiary Guarantees, the
Indenture or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each Holder of Notes by accepting a Note waives
and releases all such liability. The waiver and release are part of the
consideration for the issuance of the Notes.

                                       27



     Section 1.18.   Exhibits and Schedules. All exhibits and schedules attached
hereto are by this reference made a part hereof with the same effect as if
herein set forth in full.

     Section 1.19.   Counterparts. This Indenture may be executed in any number
of counterparts, each of which shall be an original; but such counterparts shall
together constitute but one and the same instrument.

                                    ARTICLE 2

                                   Note Forms

     Section 2.01.   Forms Generally. The Notes and the Trustee's certificate of
authentication relating thereto shall be in substantially the forms set forth,
or referenced, in Exhibit A annexed hereto and in this Article 2. The Notes may
have such appropriate insertions, omissions, substitutions, notations, legends,
endorsements, identifications and other variations as are required or permitted
by law, stock exchange rule or depository rule or usage, the certificate of
incorporation, bylaws or other similar governing instruments of the Company,
agreements to which the Company is subject, if any, or other customary usage, or
as may consistently herewith be determined by the Officers of the Company
executing such Notes, as evidenced by such execution (provided always that any
such notation, legend, endorsement, identification or variation is in a form
acceptable to the Company). Each Note shall be dated the date of its
authentication.

     Initial Notes and any Additional Notes offered and sold in reliance on Rule
144A under the Securities Act shall be issued initially in the form of one or
more permanent global Notes in substantially the form set forth in Exhibit A and
shall contain the legends set forth in Section 2.03(a) and (b) (the "U.S. Global
Notes"), registered in the name of the nominee of the Depositary, deposited with
the Trustee, as custodian for the Depositary or its nominee, duly executed by
the Company and authenticated by the Trustee as hereinafter provided. The
aggregate principal amount of the U.S. Global Notes may from time to time be
increased or decreased by adjustments made on the records of the Trustee, as
custodian for the Depositary or its nominee, as provided in Sections 3.13 and
3.14.

     Initial Notes and any Initial Additional Notes offered and sold in offshore
transactions in reliance on Regulation S under the Securities Act shall be
issued initially in the form of one or more temporary global Notes in
substantially the form set forth in Exhibit A and containing each of the legends
set forth in Section 2.03 (the "Temporary Offshore Global Note"), registered in
the name of the nominee of the Depositary, deposited with the Trustee, as
custodian for the Depositary or its nominee, duly executed by the Company and
authenticated by the Trustee as hereinafter provided. At any time following
termination of the Restricted Period (the "Offshore Note Exchange Date"), upon
receipt by the Trustee and the Company of a certificate substantially in the
form set forth in Exhibit C hereto, one or more permanent global Notes
substantially in the form of Exhibit A hereto and containing the legend set
forth in Section 2.03(b) (the "Permanent Offshore Global Note," and together
with the Temporary Offshore Global Note, the "Offshore Global Note") duly
executed by the Company and authenticated by the Trustee as hereinafter provided
shall be deposited with the Trustee, as custodian for the Depositary, and the
Registrar shall reflect on its books and records the date and a decrease in the
principal amount of the Temporary Offshore Global Note in an amount equal to the
principal amount of the beneficial interest in the Temporary Offshore Global
Note transferred. Prior to the Offshore Note Exchange Date and receipt of the
certificate referred to above, beneficial interests in a Temporary Offshore
Global Note may be held only through Euroclear or Clearstream. The aggregate
principal amount of the Offshore Global Note may from time to time be increased
or decreased by adjustments made on the records of the Trustee, as custodian for
the nominee of the Depositary for the Offshore Global Note, as provided in
Sections 3.13 and 3.14.

     Initial Notes and any Initial Additional Notes issued pursuant to Section
3.05 and Section 3.13 in exchange for or upon transfer of beneficial interests
in the U.S. Global Note or Offshore Global Note shall be in the form of
permanent certificated Notes in substantially the form set forth in Exhibit A
containing the Private Placement Legend as set forth in Section 2.03 (the "U.S.
Physical Notes"), or in the form of permanent certificated Notes substantially
in the form set forth in Exhibit A (the "Offshore Physical

                                       28



Notes"), respectively, as hereinafter provided. No Offshore Physical Notes
may be issued until expiration of the applicable Restricted Period and receipt
by the Company and the Trustee from the (x) proposed transferor of a certificate
substantially in the form set forth in Exhibit D or (y) holder of a beneficial
interest being exchanged, of certification that such holder is a non-U.S. person
(within the meaning of Regulation S under the Securities Act) or a U.S. person
who acquired such interest in a transaction exempt from the registration
requirements of the Securities Act (in which case a U.S. Physical Note shall be
issued).

     The U.S. Physical Notes and the Offshore Physical Notes, together with any
other certificated notes in registered form, are sometimes collectively referred
to as the "Physical Notes." The U.S. Global Notes and the Offshore Global Notes,
together with any other global notes in registered form, are sometimes
collectively referred to as the "Global Notes."

     Initial Notes and Initial Additional Notes offered and sold in reliance on
any exemption under the Securities Act other than Regulation S and Rule 144A
thereunder shall be issued in the form of permanent certificated Notes
substantially in the form set forth in Exhibit A and shall contain the Private
Placement Legend as set forth in Section 2.03.

     Exchange Notes shall be issued substantially in the form set forth in
Exhibit A and, subject to Section 3.13, shall be in the form of one or more
Global Notes.

     Section 2.02.   Form of Trustee's Certificate of Authentication. The
Trustee's certificate of authentication shall be in substantially the following
form:

     This is one of the Notes referred to in the within-mentioned Indenture.

                                        THE BANK OF NEW YORK,
                                        As Trustee
Dated:
      -------------

                                        By:  /s/
                                           ------------------------------------
                                                   Authorized Signatory


     If an appointment of an Authenticating Agent is made pursuant to Section
7.15, the Notes may have endorsed thereon, in lieu of the Trustee's certificate
of authentication, an alternative certificate of authentication in the following
form:

     This is one of the Notes referred to in the within-mentioned Indenture.

                                        THE BANK OF NEW YORK,
                                        As Trustee


                                        By:  /s/
                                           ------------------------------------
                                                  As Authenticating Agent


                                        By:  /s/
                                           ------------------------------------
                                                   Authorized Signatory
     Dated:

     Section 2.03.   Restrictive Legends. (a) Except as set forth in Section
3.14(1), unless and until (i) an Initial Note or any Initial Additional Note is
sold pursuant to an effective registration statement, whether pursuant to the
Registration Rights Agreement or otherwise or (ii) an Initial Note or any
Initial Additional Note is exchanged for an Exchange Note in an Exchange Offer
pursuant to an effective Exchange Offer Registration Statement pursuant to the
Registration Rights Agreement, (A) each U.S. Global Note and U.S. Physical Note
shall bear the following legend set forth below (the "Private

                                       29



Placement Legend") on the face thereof and (B) each Temporary Offshore
Global Note shall bear the Private Placement Legend on the face thereof until
the Offshore Note Exchange Date and receipt by the Company and the Trustee of a
certificate substantially in the form provided in Exhibit C with respect to the
entire principal amount of such Temporary Offshore Global Note:

     THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE FOLLOWING SENTENCE. BY ITS
ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE ACQUIRER

     (1)  REPRESENTS THAT

          (A)  IT AND ANY ACCOUNT FOR WHICH IT IS ACTING IS A "QUALIFIED
     INSTITUTIONAL BUYER" (WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES
     ACT) AND THAT IT EXERCISES SOLE INVESTMENT DISCRETION WITH RESPECT TO EACH
     SUCH ACCOUNT,

          (B)  IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (WITHIN THE MEANING
     OF RULE 501(a) (1), (2), (3) OR (7) UNDER THE SECURITIES ACT) (AN
     "INSTITUTIONAL ACCREDITED INVESTOR") OR

          (C)  IT IS NOT A U.S. PERSON (WITHIN THE MEANING OF REGULATION S UNDER
     THE SECURITIES ACT) AND

     (2)  AGREES FOR THE BENEFIT OF THE COMPANY THAT IT WILL NOT OFFER, SELL,
PLEDGE OR OTHERWISE TRANSFER THIS NOTE OR ANY BENEFICIAL INTEREST HEREIN, EXCEPT
IN ACCORDANCE WITH THE SECURITIES ACT AND ANY APPLICABLE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES AND ONLY

          (A)  TO THE COMPANY,

          (B)  PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BECOME EFFECTIVE
     UNDER THE SECURITIES ACT,

          (C)  TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A
     UNDER THE SECURITIES ACT,

          (D)  IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 OF
     REGULATION S UNDER THE SECURITIES ACT,

          (E)  IN A PRINCIPAL AMOUNT OF NOT LESS THAN $100,000, TO AN
     INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, DELIVERS TO
     THE TRUSTEE A DULY COMPLETED AND SIGNED CERTIFICATE (THE FORM OF WHICH MAY
     BE OBTAINED FROM THE TRUSTEE) RELATING TO THE RESTRICTIONS ON TRANSFER OF
     THIS NOTE, OR

          (F)  PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144
     UNDER THE SECURITIES ACT OR ANY OTHER AVAILABLE EXEMPTION FROM THE
     REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.

PRIOR TO THE REGISTRATION OF ANY TRANSFER IN ACCORDANCE WITH (2)(C) ABOVE OR
(2)(D) ABOVE, A DULY COMPLETED AND SIGNED CERTIFICATE (THE FORM OF WHICH MAY BE
OBTAINED FROM THE TRUSTEE) MUST BE DELIVERED TO THE TRUSTEE. PRIOR TO THE
REGISTRATION OF ANY TRANSFER IN ACCORDANCE WITH (2)(E) OR (F) ABOVE, THE COMPANY
RESERVES THE RIGHT TO REQUIRE THE DELIVERY OF SUCH LEGAL OPINIONS,

                                       30



CERTIFICATIONS OR OTHER EVIDENCE AS MAY REASONABLY BE REQUIRED IN ORDER TO
DETERMINE THAT THE PROPOSED TRANSFER IS BEING MADE IN COMPLIANCE WITH THE
SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS. NO REPRESENTATION IS MADE
AS TO THE AVAILABILITY OF ANY RULE 144 EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT.

          (b)  Each Global Note, whether or not an Initial Note or Additional
Note, shall also bear the following legend on the face thereof:

     UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY OR
THEIR AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

     TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT
NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN
SECTIONS 3.13 AND 3.14 OF THE INDENTURE.

          (c)  Each Temporary Offshore Global Note shall bear the following
legend on the face thereof:

     THIS NOTE IS A TEMPORARY GLOBAL NOTE. PRIOR TO THE EXPIRATION OF THE
RESTRICTED PERIOD APPLICABLE HERETO, BENEFICIAL INTERESTS HEREIN MAY NOT BE HELD
BY ANY PERSON OTHER THAN (1) A NON-U.S. PERSON OR (2) A U.S. PERSON WHO
PURCHASED SUCH INTEREST IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") PURSUANT TO RULE 144A
THEREUNDER. BENEFICIAL INTERESTS HEREIN ARE NOT EXCHANGEABLE FOR PHYSICAL NOTES
OTHER THAN A PERMANENT GLOBAL NOTE IN ACCORDANCE WITH THE TERMS OF THE
INDENTURE. TERMS IN THIS LEGEND ARE USED AS USED IN REGULATION S UNDER THE
SECURITIES ACT.

                                    ARTICLE 3

                                    The Notes

     Section 3.01.   Title and Terms. The aggregate principal amount of Notes
that may be authenticated and delivered and Outstanding under this Indenture is
initially limited to $325,000,000, but may be increased, subject to compliance
with the covenants contained in Article 4 below and the conditions set forth in
Section 3.03, and except as may be limited by applicable law. The Initial Notes
will be issued in an aggregate principal amount of $325,000,000. All the
Original Notes shall vote and consent together on all matters as one class, and
none of the Original Notes will have the right to vote or consent as a class
separate from one another on any matter. Subject to the conditions set forth in
Section 3.03 and the covenants contained in Article 4 below, the Company may
issue Additional Notes hereunder. Additional Notes (including any Exchange Notes
issued in exchange therefor) shall vote (or consent) as a class with the other
Notes and otherwise be treated as Notes for all purposes of this Indenture.

     The Notes shall be known and designated as the "10 1/2% Senior Secured
Notes, Due 2013" of the Company. The final Stated Maturity of the Notes shall be
June 1, 2013. Interest on the Outstanding principal amount of Notes will accrue,
subject to Section 3.11, at the rate of 10 1/2% per annum and will be

                                       31



payable semiannually in arrears on June 1 and December 1 in each year,
commencing on December 1, 2003, to Holders of record at the close of business on
the immediately preceding May 15 and November 15, respectively (each such May 15
and November 15 a "Regular Record Date"). Interest on the Original Notes will
accrue from the most recent date to which interest has been paid or duly
provided for or, if no interest has been paid, from May 20, 2003, and interest
on any Additional Notes (and Exchange Notes issued in exchange therefor) will
accrue from the most recent date to which interest has been paid or duly
provided for or, if no interest has been paid on such Additional Notes, from the
date of issuance of such Additional Notes; provided that if any Note is
surrendered for exchange on or after a record date for an Interest Payment Date
that will occur on or after the date of such exchange, interest on the Note
received in exchange thereof will accrue from the date of such Interest Payment
Date. The Company will pay interest on overdue principal and, to the extent
lawful, on overdue installments of interest and Liquidated Damages, if any, at a
rate of 1% per annum in excess of the interest rate referred to above.

     The principal of, and premium, if any, and interest and Liquidated Damages,
if any, on the Notes shall be payable at the Corporate Trust Office or at the
office or agency of the Company maintained for that purpose in the Borough of
Manhattan, The City of New York (each, a "Place of Payment") in the manner
provided in Section 4.01(b); provided, however, that, under the circumstances
set forth in Section 4.01(b), payment of interest and Liquidated Damages on a
Note may be made by wire transfer of immediately available funds to the account
specified by the Holder of a Global Note or by check mailed to the address of
the Person entitled thereto as such address shall appear in the Register.

     Section 3.02.   Denominations. The Notes shall be issuable only in
registered form without coupons and only in denominations of $1,000 and any
integral multiple thereof.

     Section 3.03.   Execution, Authentication and Delivery and Dating. The
Notes shall be executed on behalf of the Company by an Officer of such Company.
The signature of such Officer on the Notes may be manual or facsimile.

     Notes bearing the manual or facsimile signature of an individual who was at
any time a proper Officer of the Company shall bind the Company, notwithstanding
that such individual has ceased to hold such office prior to the authentication
and delivery of such Notes or did not hold such office at the date of such
Notes.

     At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Notes executed by the Company to the Trustee
for authentication; and the Trustee shall authenticate and deliver (i) Initial
Notes for original issue in the aggregate principal amount not to exceed
$325,000,000 and (ii) Additional Notes from time to time for original issue in
aggregate principal amounts specified by the Company and (iii) Exchange Notes
from time to time for issue in exchange for a like principal amount of Initial
Notes or Initial Additional Notes, in each case specified in clauses (i) through
(iii) above, upon a written order of the Company in the form of an Officer's
Certificate (an "Authentication Order"), and in the case of clause (ii), upon
receipt by the Trustee of an Opinion of Counsel confirming that the Holders of
the Outstanding Notes will be subject to federal income tax in the same amounts,
in the same manner and at the same times as would have been the case if such
Additional Notes were not issued. Such Officer's Certificates shall specify the
amount of Notes to be authenticated and the date on which the Notes are to be
authenticated, whether the Notes are to be Initial Notes, Additional Notes or
Exchange Notes, that, in the case of Additional Notes, (x) the issuance of such
Notes does not contravene any provision of Article 4 of this Indenture and (y)
after giving effect to such issuance of Additional Notes and the application of
the use of proceeds therefrom, the aggregate principal amount of Notes
outstanding does not exceed the amount permitted to be equally and ratably
secured under the Existing Credit Facility without causing a default thereunder,
whether the Notes are to be issued as one or more Global Notes or Physical
Notes, the name or names of the Initial Holder or Holders and such other
information as the Company may include or the Trustee may reasonably request.

     All Notes shall be dated the date of their authentication.

                                       32



     No Note shall be entitled to any benefit under this Indenture or be valid
or obligatory for any purpose, unless there appears on such Note a certificate
of authentication substantially in the form provided for herein executed by the
Trustee by manual signature, and such certificate upon any Note shall be
conclusive evidence, and the only evidence, that such Note has been duly
authenticated and delivered hereunder.

     Section 3.04.   Temporary Notes. Until definitive Notes are ready for
delivery, the Company may prepare and upon receipt of an Authentication Order
the Trustee shall authenticate temporary Notes. Temporary Notes shall be
substantially in the form of definitive Notes but may have variations that the
Company considers appropriate for temporary Notes. If temporary Notes are
issued, the Company will cause definitive Notes to be prepared without
unreasonable delay. After the preparation of definitive Notes, the temporary
Notes shall be exchangeable for definitive Notes upon surrender of the temporary
Notes at the office or agency of the Company in a Place of Payment, without
charge to the Holder. Upon surrender for cancellation of any one or more
temporary Notes, the Company shall execute and upon receipt of an Authentication
Order the Trustee shall authenticate and deliver in exchange therefor a like
principal amount of definitive Notes of authorized denominations. Until so
exchanged the temporary Notes shall in all respects be entitled to the same
benefits under this Indenture as definitive Notes of the same series and tenor.

     Section 3.05.   Registration, Registration of Transfer and Exchange. The
Company shall cause to be kept at the Corporate Trust Office of the Trustee a
register (the register maintained in such office and in any other office or
agency of the Company in a Place of Payment being herein sometimes collectively
referred to as the "Register") in which, subject to such reasonable regulations
as it may prescribe, the Company shall provide for the registration of Notes and
of transfers of Notes. The Trustee is hereby appointed "Registrar" for the
purpose of registering Notes and transfers of Notes as herein provided.

     Upon surrender for transfer of any Note at the office or agency of the
Company in a Place of Payment, in compliance with all applicable requirements of
this Indenture and applicable law, the Company shall execute, and the Trustee
shall authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Notes, of any authorized denominations and of a
like aggregate principal amount.

     At the option of the Holder, Notes may be exchanged for other Notes, of any
authorized denominations and of a like tenor and aggregate principal amount,
upon surrender of the Notes to be exchanged at such office or agency. Whenever
any Notes are so surrendered for exchange, the Company shall execute, and the
Trustee shall authenticate and deliver, the Notes that the Holder making the
exchange is entitled to receive; provided that no exchange of Initial Notes or
Initial Additional Notes for Exchange Notes shall occur until an Exchange Offer
Registration Statement shall have been declared effective by the SEC and the
Trustee shall have received an Officer's Certificate confirming that the
Exchange Offer Registration Statement has been declared effective by the SEC and
an exchange offer thereunder has been consummated. The Initial Notes or
Additional Notes to be exchanged for the Exchange Notes shall be canceled by the
Trustee.

     All Notes issued upon any registration of transfer or exchange of Notes
shall be the valid obligations of the Company, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Notes surrendered
upon such registration of transfer or exchange.

     Every Note presented or surrendered for registration of transfer or
exchange shall (if so required by the Company or the Registrar) be duly
endorsed, or be accompanied by a written instrument of transfer, in form
satisfactory to the Company and the Registrar duly executed, by the Holder
thereof or such Holder's attorney duly authorized in writing.

     No service charge shall be made for any registration of transfer or
exchange or redemption of Notes, but the Company may require payment of a Sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Notes under this
Section 3.05.

                                       33



     Section 3.06.   Mutilated, Destroyed, Lost and Stolen Notes. If (a) any
mutilated Note is surrendered to the Trustee, or the Company and the Trustee
receive evidence to their satisfaction of the destruction, loss or theft of any
Note, and (b) there is delivered to the Company and the Trustee such security or
indemnity as may be required by them to save each of them harmless, then, in the
absence of notice to the Company or the Trustee that such Note has been acquired
by a bona fide purchaser, the Company shall execute and upon receipt of an
Authentication Order the Trustee shall authenticate and deliver, in exchange for
or in lieu of any such mutilated, destroyed, lost or stolen Note, a new Note of
like tenor and principal amount, bearing a number not contemporaneously
Outstanding.

     In case any such mutilated, destroyed, lost or stolen Note has become or is
about to become due and payable, the Company in its discretion may, instead of
issuing a new Note, pay such Note.

     Upon the issuance of any new Note under this Section 3.06, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee) connected therewith.

     Every new Note issued pursuant to this Section 3.06 in lieu of any
mutilated, destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of the Company, whether or not the mutilated,
destroyed, lost or stolen Note shall be at any time enforceable by anyone, and
shall be entitled to all the benefits of this Indenture equally and ratably with
any and all other Notes duly issued hereunder.

     The provisions of this Section 3.06 are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Notes.

     Section 3.07.   Payment of Interest Rights Preserved. Interest and
Liquidated Damages on any Note that is payable, and is punctually paid or duly
provided for, on any Interest Payment Date shall be paid to the Person in whose
name that Note (or one or more Predecessor Notes) is registered at the close of
business on the Regular Record Date for such interest and Liquidated Damages
specified in Section 3.01.

     Any interest and Liquidated Damages on any Note that is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the
registered Holder on the relevant Regular Record Date by virtue of having been
such Holder; and such Defaulted Interest shall be paid by the Company, as
provided in 3.07(a) or 3.07(b) below:

          (a)  The Company may elect to make payment of any Defaulted Interest
to the Persons in whose names the Notes (or their respective Predecessor Notes)
are registered at the close of business on a Special Record Date for the payment
of such Defaulted Interest, which shall be fixed in the following manner. The
Company shall notify the Trustee in writing of the amount of Defaulted Interest
proposed to be paid on each Note and the date of the proposed payment, and at
the same time the Company shall deposit with the Trustee an amount of money
equal to the aggregate amount proposed to be paid in respect of such Defaulted
Interest or shall make arrangements reasonably satisfactory to the Trustee for
such deposit prior to the date of the proposed payment, such money when
deposited to be held in trust for the benefit of the Persons entitled to such
Defaulted Interest as provided in this Section 3.07(a). Thereupon the Trustee
shall fix a Special Record Date for the payment of such Defaulted Interest which
shall be not more than 15 nor less than 10 days prior to the date of the
proposed payment and not less than 10 days after the receipt by the Trustee of
the notice of the proposed payment. The Trustee shall promptly notify the
Company of such Special Record Date and, in the name and at the expense of the
Company, shall cause notice of the proposed payment of such Defaulted Interest,
the amount thereof and the Special Record Date and payment date therefor to be
mailed, first class postage prepaid, to each Holder at such Holder's address as
it appears in the Register, not less than 10 days prior to such Special Record
Date. Notice of the proposed payment of such Defaulted Interest and the Special
Record Date therefor having been so mailed, such Defaulted Interest shall be
paid to the Persons in whose names the Notes (or their respective Predecessor
Notes) are registered on such Special Record Date and shall no longer be payable
pursuant to the following 3.07(b).

                                       34



          (b)  The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any securities
exchange on which the Notes may be listed, and upon such notice as may be
required by such exchange, if, after notice given by the Company to the Trustee
of the proposed payment pursuant to this clause (b), such payment shall be
deemed practicable by the Trustee.

     Subject to the foregoing provisions of this Section 3.07, each Note
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Note shall carry the lights to interest (including
any Liquidated Damages) accrued and unpaid, and to accrue, that were carried by
such other Note.

     Section 3.08.   Persons Deemed Owners. Prior to due presentment of a Note
for registration of transfer, the Company, the Trustee and any agent of the
Company or the Trustee may treat the Person in whose name such Note is
registered as the owner of such Note for the purpose of receiving payment of
principal of (and premium, if any, on) and (subject to Section 3.07) interest
and Liquidated Damages, if any, on such Note and for all other purposes
whatsoever, whether or not such Note be overdue, and none of the Company, the
Subsidiary Guarantors, the Trustee or any agent of the Company, the Subsidiary
Guarantors or the Trustee shall be affected by notice to the contrary.

     Section 3.09.   Cancellation. All Notes surrendered for payment,
redemption, registration of transfer or exchange shall, if surrendered to any
Person other than the Trustee, be delivered to the Trustee and, if not already
canceled, shall be promptly canceled by it. The Company may at any time deliver
to the Trustee for cancellation any Notes previously authenticated and delivered
hereunder that the Company may have acquired in any manner whatsoever, and all
Notes so delivered shall be promptly canceled by the Trustee. No Notes shall be
authenticated in lieu of or in exchange for any Notes canceled as provided in
this Section 3.09, except as expressly permitted by this Indenture. All canceled
Notes held by the Trustee shall be disposed of in accordance with the Trustee's
customary procedures.

     Section 3.10.   Computation of Interest. Interest on the Notes shall be
computed on the basis of a 360-day year of twelve 30-day months.

     Section 3.11.   Payment of Liquidated Damages. (a) Under certain
circumstances the Company will be obligated to pay certain Liquidated Damages to
the Holders of certain Initial Notes, as more particularly set forth in such
Initial Notes.

          (b)  Under certain circumstances the Company may be obligated to pay
certain Liquidated Damages to the Holders of certain Initial Additional Notes,
as may be more particularly set forth in such Initial Additional Notes.

     Section 3.12.   CUSIP Numbers. The Company in issuing the Notes may use
"CUSIP" or "CINS" numbers (if then generally in use) in addition to serial
numbers, and, if so, the Trustee shall use such "CUSIP" or "CINS" numbers in
addition to serial numbers in notices of redemption, repurchase or other notices
to Holders as a convenience to Holders; provided that any such notice may state
that no representation is made as to the correctness of such "CUSIP" or "CINS"
numbers either as printed on the Notes or as contained in any notice of a
redemption or repurchase and that reliance may be placed only on the serial or
other identification numbers printed on the Notes, and any such redemption or
repurchase shall not be affected by any defect in or omission of such numbers.
The Company will promptly notify the Trustee of any change in the "CUSIP" or
"CINS" numbers.

     Section 3.13.   Book-entry Provisions for Global Notes.

          (a)  Each Global Note initially shall (i) be registered in the name of
the Depositary for such Global Notes or the nominee of such Depositary, (ii) be
delivered to the Trustee as custodian for such Depositary and (iii) to the
extent relevant thereto, bear legends as set forth in Section 2.03. None of the
Company or the Subsidiary Guarantors, nor any of their agents shall have any
responsibility or liability

                                       35



for any aspect of the records relating to, or payments made on account of
beneficial ownership interests of, a Global Note, or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.

     Members of, or participants in, the Depositary ("Agent Members") shall have
no rights under this Indenture with respect to any Global Note, and the
Depositary may be treated by the Company, the Subsidiary Guarantors, the Trustee
and any agent of the Company, the Subsidiary Guarantors or the Trustee as the
absolute owner of such Global Note for all purposes whatsoever. Notwithstanding
the foregoing, nothing herein shall prevent the Company, the Subsidiary
Guarantors, the Trustee or any agent of the Company, the Subsidiary Guarantors
or the Trustee from giving effect to any written certification, proxy or other
authorization furnished by the Depositary or impair, as between the Depositary
and its Agent Members, the operation of customary practices governing the
exercise of the rights of a beneficial owner of any Note. The registered Holder
of a Global Note may grant proxies and otherwise authorize any person, including
Agent Members and persons that may hold interests through Agent Members, to take
any action which a Holder is entitled to take under this Indenture or the Notes.

          (b)  Interests of beneficial owners in a Global Note may be
transferred in accordance with the applicable rules and procedures of the
Depositary and the provisions of Section 3.14. Transfers of a Global Note shall
be limited to transfers of such Global Note in whole, but not in part, to the
Depositary, its successors or their respective nominees, except (i) as required
in connection with transfers of interests therein pursuant to Section 3.14(b) or
3.14(g) or as may be required by the Company or the Trustee in connection with
transfers pursuant to Section 3.14(i), and (ii) that U.S. Physical Notes or,
subject to Section 3.14(h), Offshore Physical Notes shall be transferred to all
beneficial owners in exchange for their beneficial interests in the U.S. Global
Note or the Offshore Global Note, respectively, in the event that (A) the
Depositary notifies the Company that it is unwilling or unable to continue as
Depositary for the applicable Global Note and a successor depositary is not
appointed by the Company within 90 days or (B) an Event of Default has occurred
and is continuing and the Registrar has received a request from the Depositary.
In addition, beneficial interests in a Global Note may be exchanged for Physical
Notes upon request but only upon at least 20 days' prior written notice given to
the Trustee by or on behalf of the Depository in accordance with customary
procedures. In connection with any transfer or exchange of a portion of the
beneficial interest in any Global Note to beneficial owners for Physical Notes
pursuant to this Section 3.13(b), the Registrar shall record on its books and
records (and make a notation on the Global Note of) the date and a decrease in
the principal amount of such Global Note in an amount equal to the beneficial
interest in the Global Note being transferred, and the Company shall execute,
and the Trustee shall authenticate and deliver, one or more Physical Notes of
like tenor and principal amount of authorized denominations. In connection with
a transfer of an entire Global Note to beneficial owners pursuant to this
paragraph (b), the applicable Global Note shall be deemed to be surrendered to
the Trustee for cancellation, and the Company shall execute, and the Trustee
shall authenticate and deliver, to each beneficial owner identified by the
Depositary in exchange for its beneficial interest in the applicable Global
Note, an equal aggregate principal amount at maturity of U.S. Physical Notes (in
the case of the U.S. Global Note) or Offshore Physical Notes (in the case of the
Offshore Global Note), as the case may be, of authorized denominations.

          (c)  Any beneficial interest in one of the Global Notes that is
transferred to a person who takes delivery in the form of an interest in another
Global Note will, upon transfer, cease to be an interest in such Global Note and
become an interest in the other Global Note and, accordingly, will thereafter be
subject to all transfer restrictions, if any, and other procedures applicable to
beneficial interests in such other Global Note for as long as it remains such an
interest.

          (d)  The Company, the Subsidiary Guarantors, any other obligor upon
the Notes or the Trustee, in the discretion of any of them, may treat as the Act
of a Holder any instrument or writing of any Person that is identified by the
Depositary as the owner of a beneficial interest in the Global Note, provided
that the fact and date of the execution of such instrument or writing is proved
in accordance with Section 1.08(b).

                                       36



          (e) Any U.S. Physical Note delivered in exchange for an interest in
the U.S. Global Note pursuant to paragraph (b) of this Section shall, except as
otherwise provided in Section 3.14, bear the Private Placement Legend.

     Section 3.14.   Transfer Provisions. Unless and until (i) an Initial Note
or any Initial Additional Note is sold pursuant to an effective registration
statement, whether pursuant to the Registration Rights Agreement or otherwise,
(ii) an Initial Note or any Initial Additional Note is exchanged for an Exchange
Note in the Exchange Offer pursuant to an effective Registration Statement, or
(iii) the Resale Restriction Termination Date has occurred with respect to an
Initial Note or any Initial Additional Note and such Note is not then held by an
Affiliate of the Company, the following provisions shall apply with respect to
such Initial Note or Initial Additional Note:

          (a)  General. The provisions of this Section 3.14 shall apply to all
transfers involving any Physical Note and any beneficial interest in any Global
Note. A Note that is a Restricted Security may not be transferred other than as
provided in this Section 3.14. A beneficial interest in a Global Note that is a
Restricted Security may not be exchanged for a beneficial interest in another
Global Note other than through a transfer in compliance with this Section 3.14.

          (b)  Transfers to Non-QIB Institutional Accredited Investors. With
respect to the registration of any proposed transfer of a Note that is a
Restricted Security to any Institutional Accredited Investor that is not a QIB,

          (I)  the Registrar shall register such transfer

               (i)    if it complies with all other applicable requirements of
          this Indenture (including Section 3.05 and Section 3.13); and

               (ii)   the proposed transferee has delivered to the Registrar a
          certificate substantially in the form of Exhibit E, and such transfer
          is in respect of an aggregate principal amount of Notes of not less
          than $100,000; and

               (iii)  if the proposed transferor is or is acting through an
          Agent Member holding a beneficial interest in a Global Note, upon
          receipt by the Registrar of written instructions given in accordance
          with the Depositary's and the Registrar's procedures; and

          (II) the Registrar shall (x) reflect on its books and records (and
     make a notation on the relevant Global Note of) the date and a decrease in
     the principal amount of the relevant Global Note in an amount equal to the
     principal amount of the beneficial interest in the relevant Global Note to
     be transferred or (y) cancel the Physical Note so transferred, and the
     Registrar shall deliver to the transferee one or more Physical Notes of
     like tenor and amount.

          Each of the Company and the Trustee may require additional opinions,
     certifications or other evidence as may be reasonably required to confirm
     that any such proposed transfer is being made in compliance with the
     Securities Act and applicable state securities laws.

          (c) Transfers to QIBs. With respect to the registration of any
proposed transfer of a Note that is a Restricted Security to a QIB,

          (I)  the Registrar shall register such transfer

               (i)    if it complies with all other applicable requirements of
          this Indenture (including Section 3.05 and Section 3.13); and

                                       37



               (ii)   the proposed transferor has checked the box provided for
          on the form of such Note stating, or has otherwise certified to the
          Company and the Registrar in writing, that the sale has been made in
          compliance with the provisions of Rule l44A to a transferee who has
          signed the certification provided for on the form of such Note
          stating, or has otherwise certified to the Company and the Registrar
          in writing, that it is purchasing such Note for its own account or an
          account with respect to which it exercises sole investment discretion
          and that it and any such account is a QIB within the meaning of Rule
          144A, and is aware that the sale to it is being made in reliance on
          Rule 144A and acknowledges that it has received such information
          regarding the Company as it has requested pursuant to Rule 144A or has
          determined not to request such information and that it is aware that
          the transferor is relying upon its foregoing representations in order
          to claim the exemption from registration provided by Rule 144A; and

               (iii)  if the proposed transferor or transferee is or is acting
          through an Agent Member, upon receipt by the Registrar of written
          instructions given in accordance with the Depositary's and the
          Registrar's procedures; and

          (II) the Registrar shall (a) cancel the Physical Note so transferred
     or (b) reflect on its books and records (and make a notation on the
     relevant Global Note of) the date and a decrease in the principal amount of
     such transferor Global Note, as the case may be, and the Registrar shall
     (x) reflect on its books and records (and make a notation on the relevant
     Global Note of) the date and an increase in the principal amount of the
     transferee Global Note or (y) deliver Physical Notes of like tenor and
     amount.

          (d)  Transfers of Interests in the Temporary Offshore Global Notes.
With respect to registration of any proposed transfer of interests in any
Temporary Offshore Global Note,

          (I)  the Registrar shall register the transfer of any interest in such
     Note only

               (i)    if the proposed transferee is a Non-U.S. Person and the
          proposed transferor has delivered to the Registrar a certificate
          substantially in the form of Exhibit D hereto and will take delivery
          in the form of an interest in the Temporary Offshore Global Note; or

               (ii)   if the proposed transferee is a QIB and the proposed
          transferor has checked the box provided for on the form of Note
          stating, or has otherwise certified to the Company and the Registrar
          in writing, that the sale has been made in compliance with provisions
          of Rule 144A to a transferee who has signed the certification provided
          for on the form of Note stating, or has otherwise advised the Company
          and the Registrar in writing, that it is purchasing the Note for its
          own account or an account with respect to which it exercises sole
          investment discretion and that it and any such account is a QIB within
          the meaning of Rule 144A, and is aware that the sale to it is being
          made in reliance on Rule 144A and acknowledges that it has received
          such information regarding the Company as it has requested pursuant to
          Rule 144A or has determined not to request such information and that
          it is aware that the transferor is relying upon its foregoing
          representations in order to claim the exemption from registration
          provided by Rule 144A; and

               (iii)  upon receipt by the Registrar of written instructions
          given in accordance with the Depositary's and the Registrar's
          procedures; and

          (II) the Registrar shall reflect on its books and records (and make a
     notation on the relevant Global Note of) the date and an increase in the
     principal amount of the transferee Global Note, in an amount equal to the
     principal amount of the Temporary Offshore Global Note to be transferred,
     and the Registrar shall reflect on its books and records (and make a
     notation on the

                                       38



     relevant Global Note of) the date and a decrease in the
     principal amount of the transferor Temporary Offshore Global Note.

          (e)  Transfers to Non-U.S. Persons. With respect to the registration
of any proposed transfer of a Note that is a Restricted Security to a Non-U.S.
Person (except for any transfer referred to in Section 3.14(d))

          (I)  the Registrar shall register such transfer:

               (i)    if it complies with all other applicable requirements of
          this Indenture (including Section 3.05 and Section 3.13); and

               (ii)   if the proposed transfer is to be made prior to the end of
          the Restricted Period, upon receipt of a certificate substantially in
          the form of Exhibit D hereto from the proposed transferor; and

               (iii)  if the proposed transfer is to be made after the end of
          the Restricted Period and the Note to be transferred is a U.S.
          Certificated Note or an interest in the U.S. Global Note, only upon
          receipt of a certificate substantially in the form of Exhibit D from
          the proposed transferor; and (iv) if the proposed transferor or
          transferee is or is acting through an Agent Member, upon receipt by
          the Registrar of written instructions in accordance with the
          Depositary's and the Registrar's procedures; and

          (II) the Registrar shall (a) reflect on its books and records (and
     make a notation on the relevant Global Note of) the date and a decrease in
     the principal amount of the transferor Global Note in an amount equal to
     the principal amount to be transferred or (b) cancel the Physical Notes so
     transferred, as the case may be, and the Registrar shall (x) reflect on its
     books and records (and make a notation on the relevant Global Note of) the
     date and an increase in the principal amount of the transferee Offshore
     Global Note or (y) deliver one or more Physical Notes of like tenor and
     amount.

          (f)  Transfers pursuant to Rule 144. With respect to the registration
of any proposed transfer of a Note that is a Restricted Security pursuant to the
exemption from registration under the Securities Act provided by Rule 144
thereunder,

          (I)  the Registrar shall register such transfer

               (A)  if it complies with all other requirements of this Indenture
          (including Section 3.05 and Section 3.13); and

               (B)  if such transfer is being made by a proposed transferor who
          has checked the box provided for on the form of such Note stating, or
          has otherwise certified to the Company and the Registrar in writing,
          that the sale has been made in compliance with the provisions of Rule
          144; and

               (C)  if the proposed transferor or transferee is or is acting
          through an Agent Member, upon receipt by the Registrar of written
          instructions given in accordance with the Depositary's and the
          Registrar's procedures; and

          (II) the Registrar shall (a) reflect on its books and records (and
     make a notation on the relevant Global Note of) the date and a decrease in
     the principal amount of such transferor Global Note in an amount equal to
     the principal amount to be transferred or (b) cancel the Physical Note so
     transferred and the Registrar shall (x) reflect on its books and records
     (and make a notation on the relevant Global Note of) the date and an
     increase in the principal amount of the transferee Global Note or (y) the
     Registrar shall deliver Physical Notes in like tenor and amount.

                                       39



     Each of the Company and the Trustee may require additional opinions,
certifications or other evidence as may be reasonably required to confirm that
any such proposed transfer is being made in compliance with the Securities Act
and applicable state securities laws.

          (g)  Transfers to the Company. With respect to the registration of any
proposed transfer of a Note to the Company,

          (I)  the Registrar shall register such transfer

               (A)  if it complies with all other requirements of this Indenture
          (including Section 3.05 and Section 3.13); and

               (B)  if such transfer is being made by a proposed transferor who
          has checked the box provided for on the form of such Note stating, or
          has otherwise certified to the Company and the Registrar in writing,
          that the sale has been made to the Company; and

               (C)  if the proposed transferor is or is acting through an Agent
          Member, upon receipt by the Registrar of written instructions given in
          accordance with the Depositary's and the Registrar's procedures; and

          (II) the Registrar shall (x) reflect on its books and records (and
     make a notation on the relevant Global Note of) the date and a decrease in
     the principal amount of such transferor Global Note in an amount equal to
     the principal amount to be transferred or (y) cancel the Physical Note so
     transferred, as the case may be and the Registrar shall deliver Physical
     Notes to the Company in like tenor and amount.

          (h)  Interests in the Offshore Global Note prior to the Offshore Note
Exchange Date. Notwithstanding anything to the contrary contained in this
Indenture, until the Offshore Note Exchange Date occurs and appropriate
certification substantially in the form of Exhibit C is made as provided in
Section 2.01, beneficial interests in the Offshore Global Note may be held only
in or through accounts maintained at the Depositary by Euroclear or Clearstream,
and no person shall be entitled to effect any transfer or exchange that would
result in any such interest being held otherwise than in or through such an
account, and no Physical Notes may be issued in exchange therefor.

          (i)  Other Transfers. The Registrar shall effect and register, upon
receipt of a written request from the Company to do so, a transfer not otherwise
permitted by this Section 3.14, such registration to be done in accordance with
the otherwise applicable provisions of this Section 3.14, upon the furnishing by
the proposed transferor or transferee of a written opinion of counsel (which
opinion and counsel are satisfactory to the Company and the Trustee) to the
effect that, and such other certifications or evidence as the Company may
require to confirm that, the proposed transfer is being made pursuant to an
exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act and otherwise in compliance with applicable
state securities laws.

          (j)  Limitation on Issuance of Physical Notes. No Physical Note shall
be exchanged for a beneficial interest in any Global Note, except in accordance
with Section 3.13 and this Section 3.14.

          (k)  Execution, Authentication and Delivery of Physical Notes. In any
case in which the Registrar is required to deliver a Physical Note to a
transferee or transferor, the Company shall execute, and the Trustee shall
authenticate and make available for delivery, such Physical Note.

          (l)  Private Placement Legend. Upon the transfer, exchange or
replacement of Notes not bearing the Private Placement Legend, the Registrar
shall deliver Notes that do not bear the Private Placement Legend. Upon the
transfer, exchange or replacement of Notes bearing the Private Placement Legend,
the Registrar shall deliver only Notes that bear the Private Placement Legend,
unless (i) the

                                       40



requested transfer is after the relevant Resale Restriction Termination
Date with respect to such Notes, (ii) upon written request of the Company after
there is delivered to the Registrar an opinion of counsel (which opinion and
counsel are satisfactory to the Company and the Trustee) to the effect that
neither such legend nor the related restrictions on transfer are required in
order to maintain compliance with the provisions of the Securities Act, (iii)
with respect to an Offshore Global Note, with the agreement of the Company on or
after the Offshore Note Exchange Date with respect to such Note, (iv) such Notes
are sold or exchanged pursuant to an effective registration statement under the
Securities Act or (v) such Notes are sold pursuant to Section 3.14(f).

          (m)  General. By its acceptance of any Note bearing the Private
Placement Legend, each Holder of such a Note acknowledges the restrictions on
transfer of such Note set forth in this Indenture and in the Private Placement
Legend and agrees that it will transfer such Note only as provided in this
Indenture.

     The Registrar shall retain copies of all letters, notices and other written
communications received pursuant to Section 3.13 or this Section 3.14 (including
all Notes received for transfer pursuant to this Section 3.14). The Company
shall have the right to require the Registrar to deliver to the Company, at the
Company's expense, copies of all such letters, notices or other written
communications at any reasonable time upon the giving of reasonable written
notice to the Registrar.

     In connection with any transfer of any Note, the Trustee, the Registrar and
the Company shall be entitled to receive, shall be under no duty to inquire
into, may conclusively presume the correctness of, and shall be fully protected
in relying upon the certificates, opinions and other information referred to
herein (or in the forms provided herein, attached hereto or to the Notes, or
otherwise) received from any Holder and any transferee of any Note regarding the
validity, legality and due authorization of any such transfer, the eligibility
of the transferee to receive such Note and any other facts and circumstances
related to such transfer.

          (n)  Certain Additional Terms Applicable to Physical Notes. Any
transferee entitled to receive a Physical Note may request that the principal
amount thereof be evidenced by one or more Physical Notes in any authorized
denomination or denominations and the Registrar shall comply with such request
if all other transfer restrictions are satisfied.

                                    ARTICLE 4

                                    Covenants

     Section 4.01.   Payment of Principal, Premium and Interest. (a) The Company
will duly and punctually pay the principal of (and premium, if any) and interest
and Liquidated Damages, if any, on the Notes in accordance with the terms of the
Notes and this Indenture. An installment of principal (and premium, if any) or
interest and Liquidated Damages shall be considered paid on the date it is due
if the Trustee or Paying Agent or Paying Agents hold on that date money
designated for and sufficient to pay the installment.

          (b)  Payments (including principal, premium, if any, interest and
Liquidated Damages, if any) in respect of the Notes represented by the Global
Notes, the Holder of which has given wire transfer instructions on or prior to
the relevant record date, shall be made by wire transfer of immediately
available funds to the accounts specified by the Global Note Holder. With
respect to Physical Notes, the Company will make all payments of principal,
premium, if any, interest and Liquidated Damages, if any, at the office or
agency maintained by the Company in The City of New York referred to in Section
4.02 or, at the option of the Company, by mailing a check to each such Holder's
registered address.

     Section 4.02.   Maintenance of Office or Agency. The Company will
maintain in the Borough of Manhattan, The City of New York an office or agency
where Notes may be presented or surrendered for payment, where Notes may be
surrendered for transfer or exchange and where notices and demands to or

                                       41



upon the Company in respect of the Notes and this Indenture may be served.
The Company will give prompt written notice to the Trustee of the location, and
of any change in the location, of such office or agency. If at any time the
Company shall fail to maintain such office or agency or shall fail to furnish
the Trustee with the address thereof, such presentations, surrenders, notices
and demands may be made or served at the Corporate Trust Office of the Trustee.
The Company hereby designates the Corporate Trust Office as an initial Place of
Payment and as such office of the Company in the Borough of Manhattan, The City
of New York, and appoints the Trustee as its agent to receive all such
presentations, surrenders, notices and demands so long as such Corporate Trust
Office remains a Place of Payment.

     Section 4.03.   Money for Payments to Be Held in Trust. If the Company
shall at any time act as its own Paying Agent, it will, on or before each due
date of the principal of (and premium, if any) or interest and Liquidated
Damages, if any, on, any of the Notes, segregate and hold in trust for the
benefit of the Persons entitled thereto a sum sufficient to pay the principal
(and premium, if any) or interest and Liquidated Damages, if any, so becoming
due until such sums shall be paid to such Persons or otherwise disposed of as
herein provided, and will promptly notify the Trustee of its action or failure
so to act.

     If the Company is not acting as its own Paying Agent, it will, prior to
each due date of the principal of (and premium, if any) or interest and
Liquidated Damages, if any, on, any Notes, deposit with a Paying Agent a sum
sufficient to pay the principal (and premium, if any) or interest and Liquidated
Damages, if any, so becoming due, such sum to be held in trust for the benefit
of the Persons entitled to such principal, premium or interest and Liquidated
Damages, and (unless such Paying Agent is the Trustee) the Company will promptly
notify the Trustee of its action or failure so to act.

     If the Company is not acting as its own Paying Agent, the Company will
cause any Paying Agent other than the Trustee to execute and deliver to the
Trustee an instrument in which such Paying Agent shall agree with the Trustee,
subject to the provisions of this Section 4.03, that such Paying Agent will:

          (a)  hold all sums held by it for the payment of principal of (and
premium, if any) or interest and Liquidated Damages, if any, on Notes in trust
for the benefit of the Persons entitled thereto until such sums shall be paid to
such Persons or otherwise disposed of as herein provided;

          (b)  give the Trustee notice of any default by the Company (or any
other obligor upon the Notes) in the making of any such payment of principal
(and premium, if any) or interest and Liquidated Damages, if any;

          (c)  at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so held in
trust by such Paying Agent; and

          (d)  acknowledge, accept and agree to comply in all respects with the
provisions of this Indenture and TIA relating to the duties, rights and
liabilities of such Paying Agent.

     The Company may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, pay, or by Company
Order direct any Paying Agent to pay, to the Trustee all sums held in trust by
the Company or such Paying Agent, such sums to be held by the Trustee upon the
same trusts as those upon which such sums were held by the Company or such
Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such
Paying Agent shall be released from all further liability with respect to such
money.

     Any money deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment of the principal of (and premium, if any)
or interest and Liquidated Damages, if any, on any Note and remaining unclaimed
for two years after such principal (and premium, if any) or interest and
Liquidated Damages, if any, has become due and payable shall be paid in the
appropriate proportion to the Company upon a Company Request, or (if then held
by the Company) shall be discharged from such trust; and the Holder of such Note
shall thereafter, as an unsecured general creditor, look only to the Company

                                       42



for payment thereof, and all liability of the Trustee or such Paying Agent
with respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease.

     Section 4.04.   SEC Reports. (a) Whether or not required by the rules and
regulations of the SEC, so long as any Notes issued hereunder are outstanding,
the Company will furnish to each Trustee and the Holders of Notes (i) all
quarterly and annual financial information that would be required to be
contained in a filing with the SEC on Forms 10-Q and 10-K if the Company were
required to file such Forms, including a "Management's Discussion and Analysis
of Financial Condition and Results of Operations" and, with respect to the
annual information only, a report thereon by the Company's certified independent
accountants and (ii) all current reports that would be required to be filed with
the SEC on Form 8-K if the Company were required to file such reports. In
addition, whether or not required by the rules and regulations of the SEC, the
Company will file a copy of all such information and reports with the SEC for
public availability and make such information available to securities analysts
and prospective investors upon request.

          (b)  For so long as any Notes remain outstanding, the Company will
furnish to the Holders and to securities analysts and prospective investors,
upon their request, the information required to be delivered pursuant to Rule
l44A(d)(4) under the Securities Act.

          (c)  All obligors on the Notes will comply with Section 314(a) of the
TIA.

          (d)  The Company shall promptly mail copies of all such annual
reports, information, documents and other reports provided to the Trustee
pursuant to clauses (a) and (c) hereof to the Holders at their addresses
appearing in the Register maintained by the Registrar.

          (e)  Delivery of such reports, information and documents to the
Trustee is for informational purposes only and the Trustee's receipt of such
shall not constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officer's Certificates).

     Section 4.05.   Certificates to Trustee. (a) The Company will deliver to
the Trustee within 120 days after the end of each fiscal year of the Company a
certificate from the principal executive, financial or accounting officer of the
Company stating that such officer has conducted or supervised a review of the
activities of the Company and its Restricted Subsidiaries and the Company's and
its Restricted Subsidiaries' performance under this Indenture and that, based
upon such review, to the best of such officer's knowledge, the Company has
fulfilled all obligations thereunder or, if there has been a default in the
fulfillment of any such obligation (determined without regard to any period of
grace or requirement of notice provided in this Indenture), specifying each such
default and the nature and status thereof.

          (b)  The Company will deliver to the Trustee, as soon as possible and
in any event within 30 days after the Company becomes aware of an Event of
Default or a Default, an Officer's Certificate setting forth the details of such
Event of Default or Default, and the action which the Company proposes to take
or has taken with respect thereto.

          (c)  The Company will deliver to the Trustee within 120 days after the
end of each fiscal year of the Company a written statement by the Company's
independent public accountants stating (i) that their audit examination has
included a review of the terms of this Indenture and the Notes as they relate to
accounting matters, and (ii) whether, in connection with their audit
examination, any Default has come to their attention and, if such a Default has
come to their attention, specifying the nature and period of the existence
thereof.

     Section 4.06.   Limitation on Indebtedness. (a) On or after the Issue Date:

                                       43



          (i)    the Company will not, and will not permit any of its Restricted
     Subsidiaries to, directly or indirectly, create, incur, issue, assume,
     Guarantee or otherwise become directly or indirectly liable, contingently
     or otherwise, with respect to (collectively, "incur") any Indebtedness
     (including Acquired Debt);

          (ii)   the Company will not, and will not permit any of its Restricted
     Subsidiaries to, issue any Disqualified Stock (including Acquired
     Disqualified Stock);

          (iii)  and the Company will not permit any of its Restricted
     Subsidiaries that are not Subsidiary Guarantors to issue any shares of
     Preferred Stock (including Acquired Preferred Stock);

provided, however, that the Company and the Subsidiary Guarantors may incur
Indebtedness (including Acquired Debt) and the Company and the Subsidiary
Guarantors may issue shares of Disqualified Stock (including Acquired
Disqualified Stock) if the Fixed Charge Coverage Ratio for the Company's most
recently ended four full fiscal quarters for which financial statements have
been filed with the SEC pursuant to Section 4.04 immediately preceding the date
on which such additional Indebtedness is incurred or such Disqualified Stock is
issued would have been at least 2.0 to 1, determined on a pro forma basis
(including a pro forma application of the net proceeds therefrom), as if the
additional Indebtedness had been incurred or the Disqualified Stock had been
issued, as the case may be, at the beginning of such four-quarter period.
Letters of credit and bankers' acceptances shall be deemed to have an aggregate
principal amount of Indebtedness equal to the maximum amount available
thereunder.

          (b)  The foregoing provisions will not apply to:

          (i)    the incurrence by the Company of Indebtedness pursuant to the
     Existing Credit Facility (and by its Subsidiaries of Guarantees thereof) in
     an aggregate principal amount at any time outstanding not to exceed an
     amount equal to $2.537 billion less the aggregate amount of all mandatory
     repayments (other than mandatory prepayments triggered solely by the
     issuance of Indebtedness or Preferred Stock of a Finance Subsidiary to
     refinance the Existing Credit Facility) applied after May 17, 1999 to (x)
     repay loans (other than revolving credit loans) outstanding thereunder or
     (y) permanently reduce the revolving credit commitments thereunder;

          (ii)   the incurrence by the Company and the Subsidiary Guarantors of
     Indebtedness represented by the Notes (other than Additional Notes) and the
     Subsidiary Guarantees thereof;

          (iii)  the incurrence by the Company and its Restricted
     Subsidiaries of Existing Indebtedness (other than Indebtedness of the type
     described in clause (i), (ii) or (v) through (xii) of this covenant);

          (iv)   the incurrence by the Company or any of its Restricted
     Subsidiaries of any Permitted Refinancing in exchange for, or the net
     proceeds of which are used to extend, refinance, renew, replace, defease or
     refund, Indebtedness that was permitted to be incurred under the Fixed
     Charge Coverage Ratio test set forth above or clause (ii) or (iii) above or
     (xiii) or (xiv) below or this clause (iv);

          (v)    the incurrence by the Company or any of its Restricted
     Subsidiaries of intercompany Indebtedness between or among the Company and
     any of its Restricted Subsidiaries; provided, however, that (i) if the
     Company or any Subsidiary Guarantor is the obligor on such Indebtedness,
     such Indebtedness is expressly subordinated to the prior payment in full in
     cash of all Obligations with respect to the Notes or the Subsidiary
     Guarantee, as the case may be, and (ii) (A) any subsequent issuance or
     transfer of Equity Interests that results in any such Indebtedness being
     held by a Person other than the Company or a Restricted Subsidiary and (B)
     any sale or other transfer of any such Indebtedness to a Person that is not
     either the Company or a

                                       44



     Restricted Subsidiary shall be deemed, in each case, to constitute an
     incurrence of such Indebtedness by the Company or such Restricted
     Subsidiary, as the case may be;

          (vi)   the incurrence by the Company or any Restricted Subsidiary of
     Hedging Obligations that are incurred for the purpose of (A) fixing or
     hedging interest rate or currency risk with respect to any fixed or
     floating rate Indebtedness that is permitted by the Indenture to be
     outstanding or any receivable or liability the payment of which is
     determined by reference to a foreign currency; provided that the notional
     principal amount of any such Hedging Obligation does not exceed the
     principal amount of the Indebtedness to which such Hedging Obligation
     relates or (B) managing fluctuations in the price or cost of raw materials,
     manufactured products or related commodities; provided that such
     obligations are entered into in the ordinary course of business to hedge or
     mitigate risks to which the Company or any Restricted Subsidiary is exposed
     in the conduct of its business or the management of its liabilities (as
     determined by the Company's or such Restricted Subsidiary's principal
     financial officer in the exercise of his or her good faith business
     judgment);

          (vii)  the issuance by any of the Company's Restricted Subsidiaries of
     shares of Preferred Stock to the Company or a Wholly Owned Restricted
     Subsidiary; provided that (A) any subsequent issuance or transfer of Equity
     Interests that results in such Preferred Stock being held by a Person other
     than the Company or a Wholly Owned Restricted Subsidiary or (B) the
     transfer or other disposition by the Company or a Wholly Owned Restricted
     Subsidiary of any such shares to a Person other than the Company or a
     Wholly Owned Restricted Subsidiary shall be deemed, in each case, to
     constitute an issuance of such Preferred Stock by such Subsidiary on such
     date that is not permitted by this clause (vii);

          (viii) the incurrence by the Company or any of its Restricted
     Subsidiaries of Indebtedness represented by tender, bid, performance,
     government contract, surety or appeal bonds, standby letters of credit and
     warranty and contractual service obligations of like nature, trade letters
     of credit or documentary letters of credit, in each case to the extent
     incurred in the ordinary course of business of the Company or such
     Restricted Subsidiary and the incurrence by the Company of Indebtedness
     represented by letters of credit incurred in connection with the PBGC
     Settlement;

          (ix)   the incurrence by any Restricted Subsidiary of the Company of
     Indebtedness or the issuance by any Restricted Subsidiary of Preferred
     Stock, the aggregate principal amount or liquidation preference of which,
     together with all other Indebtedness and Preferred Stock of the Company's
     Restricted Subsidiaries at the time outstanding and incurred or issued in
     reliance upon this clause (ix), does not exceed $50.0 million;

          (x)    the issuance by any Finance Subsidiary of Preferred Stock with
     an aggregate liquidation preference not exceeding the amount of
     Indebtedness of the Company held by such Finance Subsidiary; provided that
     the Fixed Charge Coverage Ratio for the Company's most recently ended four
     full fiscal quarters for which financial statements have been filed with
     the SEC pursuant to the covenant described below under Section 4.04
     immediately preceding the date on which such Preferred Stock is issued
     would have been at least 2.0 to 1, determined on a pro forma basis
     (including a pro forma application of the net proceeds therefrom) as if
     such Preferred Stock had been issued at the beginning of such four-quarter
     period;

          (xi)   the incurrence of Indebtedness by Foreign Subsidiaries in an
     aggregate principal amount (or accreted value, as applicable) at any time
     outstanding and incurred in reliance upon this clause (xi) not to exceed
     $100.0 million;

          (xii)  the Guarantee by any Restricted Subsidiary of Indebtedness of
     the Company or a Restricted Subsidiary that was permitted to be incurred by
     another provision of this covenant;

                                       45



          (xiii) Acquired Debt or Acquired Disqualified Stock; provided that
     such Indebtedness or Disqualified Stock was not incurred in connection with
     or in contemplation of such Person's becoming a Restricted Subsidiary; and
     provided further that immediately after giving effect to such incurrence,
     the Fixed Charge Coverage Ratio for the Company's most recently ended four
     full fiscal quarters for which financial statements have been filed with
     the SEC pursuant to Section 4.04 immediately preceding the date of such
     incurrence would have been at least 2.0 to 1, determined on a pro forma
     basis;

          (xiv)  Indebtedness or Disqualified Stock of a Specified Joint Venture
     or a Subsidiary thereof existing at the time such Specified Joint Venture
     first becomes a Restricted Subsidiary; provided that such Indebtedness or
     Disqualified Stock was not incurred in connection with or in contemplation
     of such Specified Joint Venture's becoming a Restricted Subsidiary; and
     provided further that immediately after giving effect to such Specified
     Joint Venture's becoming a Restricted Subsidiary, the Fixed Charge Coverage
     Ratio for the Company's most recently ended four full fiscal quarters for
     which financial statements have been filed with the SEC pursuant to Section
     4.04 immediately preceding the date on which such Specified Joint Venture
     became a Restricted Subsidiary would have been, determined on a pro forma
     basis, (x) at least 2.0 to 1 or (y) equal to or greater than it was
     immediately prior to such Specified Joint Venture's becoming a Restricted
     Subsidiary;

          (xv)   with respect to any Specified Joint Venture that becomes a
     Restricted Subsidiary, the incurrence by such Specified Joint Venture of
     Indebtedness under any revolving credit facility in an aggregate principal
     amount at any time outstanding not to exceed the aggregate principal amount
     of committed financing under all revolving credit facilities of such
     Specified Joint Venture as in effect on May 17, 1999; and

          (xvi)  the incurrence by the Company or any Subsidiary Guarantor of
     Indebtedness in an aggregate principal amount (or accreted value, as
     applicable) at any time outstanding and incurred in reliance on this clause
     (xvi) not to exceed $25.0 million.

          (c)  For purposes of determining compliance with this covenant, in the
event that an item of Indebtedness or Preferred Stock meets the criteria of more
than one of the categories of permitted Indebtedness described in clauses (i)
through (xvi) above or is entitled to be incurred pursuant to Section 4.06(a),
the Company shall, in its sole discretion, classify such item of Indebtedness or
Preferred Stock in any manner that complies with this covenant and such
Indebtedness or Preferred Stock will be treated as having been incurred pursuant
to the clauses or Section 4.06(a), as the case may be, designated by the
Company. The amount of Indebtedness issued at a price which is less than the
principal amount thereof shall be equal to the amount of the liability in
respect thereof determined in accordance with GAAP.

     Section 4.07.   Limitation on Restricted Payments. (a) The Company will
not, and will not permit any of its Restricted Subsidiaries to, directly or
indirectly:

          (i)    declare or pay any dividend or make any distribution on account
     of the Company's or any of its Restricted Subsidiaries' Equity Interests
     (other than (x) dividends or distributions payable in Qualified Equity
     Interests of the Company and (y) dividends or distributions payable to the
     Company or any Restricted Subsidiary of the Company);

          (ii)   purchase, redeem or otherwise acquire or retire for value any
     Equity Interests of the Company, any of its Restricted Subsidiaries or any
     Affiliate of the Company (other than any such Equity Interests owned by the
     Company or any of its Restricted Subsidiaries);

          (iii)  make any principal payment on, or purchase, redeem, defease or
     otherwise acquire or retire for value any Indebtedness ("Subordinated
     Debt") of the Company or any Restricted Subsidiary that is subordinated by
     its terms to the Notes or the Subsidiary Guarantees (other than
     Indebtedness owed to the Company or any Restricted Subsidiary), except, in
     each case, payment of interest or principal at Stated Maturity; or

                                       46



          (iv)   make any Restricted Investment (all such payments and other
     actions set forth in clauses (i) through (iv) above being collectively
     referred to as "Restricted Payments");

unless, at the time of and after giving effect to such Restricted Payment (the
amount of any such Restricted Payment, if other than cash, shall be the fair
market value (as conclusively evidenced by a Board Resolution) of the asset(s)
proposed to be transferred by the Company or such Restricted Subsidiary, as the
case may be, pursuant to such Restricted Payment):

     (A)  no Default or Event of Default shall have occurred and be continuing
after giving effect thereto; and

     (B)  the Company would, at the time of such Restricted Payment and after
giving pro forma effect thereto as if such Restricted Payment had been made at
the beginning of the most recently ended four full fiscal quarters for which
financial statements have been filed with the SEC pursuant to Section 4.04
immediately preceding the date of such Restricted Payment, have been permitted
to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge
Coverage Ratio test set forth in Section 4.06(a) and

     (C)  such Restricted Payment, together with the aggregate of all other
Restricted Payments made by the Company and its Restricted Subsidiaries on or
after the Issue Date (excluding Restricted Payments permitted by Section
4.07(b)(ii) (to the extent paid to the Company or any of its Restricted
Subsidiaries or to the extent such distributions are deducted as a minority
interest in calculating Consolidated Net Income), Section 4.07(b)(iii), Section
4.07(b)(iv), Section 4.07(b)(v), Section 4.07(b)(vii), Section 4.07(b)(x),
Section 4.07(b)(xiv) and Section 4.07(b)(xvi) and 50% of any Restricted Payments
permitted by Section 4.07(b)(viii)), is less than the sum, without duplication,
of:

          (i)    50% of the Consolidated Net Income of the Company for the
     period (taken as one accounting period) from the beginning of the first
     fiscal quarter commencing on April 1, 2003, to the end of the Company's
     most recently ended fiscal quarter for which financial statements have been
     filed with the SEC pursuant to Section 4.04 at the time of such Restricted
     Payment (or, if such Consolidated Net Income for such period is a deficit,
     less 100% of such deficit), plus

          (ii)   100% of the aggregate net cash proceeds received by the Company
     or any of its Restricted Subsidiaries from the issue or sale (other than to
     a Subsidiary or Joint Venture of the Company) after the Issue Date of
     Qualified Equity Interests of the Company or of debt securities of the
     Company or any of its Restricted Subsidiaries that have been converted into
     or exchanged for such Qualified Equity Interests of the Company, plus

          (iii)  to the extent that any Restricted Investment (other than a
     Restricted Investment permitted to be made pursuant to Section 4.07(b)(vii)
     or Section 4.07(b)(viii) below) that was made after the Issue Date is sold
     for cash or otherwise liquidated, repaid or otherwise reduced, including by
     way of dividend (to the extent not included in calculating Consolidated Net
     Income), for cash, the lesser of (A) the cash return with respect to such
     Restricted Investment (less the cost of disposition, if any) and (B) the
     initial amount of such Restricted Investment plus

          (iv)   an amount equal to the sum of (A) the net reduction in
     Investments in Unrestricted Subsidiaries resulting from dividends,
     repayments of loans or other transfers of assets (to the extent not
     included in calculating Consolidated Net Income), in each case to the
     Company or any Restricted Subsidiary from Unrestricted Subsidiaries and (B)
     the portion (proportionate to the Company's equity interest in such
     Subsidiary) of the fair market value of the net assets of an Unrestricted
     Subsidiary at the time such Unrestricted Subsidiary is designated a
     Restricted Subsidiary; provided, however, that the foregoing sum shall not
     exceed, in the case of any Unrestricted Subsidiary, the amount of
     Restricted Investments (other than Restricted Investments permitted to be
     made pursuant to Section 4.07(b)(vii) or Section 4.07(b)(viii) below)
     previously made after the Issue Date by the Company or any Restricted
     Subsidiary in such Unrestricted Subsidiary.

                                       47



          (b)  If, other than with respect to payments made under Section
4.07(b)(i) and Section 4.07(b)(xiv) below, no Default or Event of Default shall
have occurred and be continuing after giving effect to such Restricted Payment,
the foregoing provisions will not prohibit the following Restricted Payments:

          (i)    the payment of any dividend within 60 days after the date of
     declaration thereof, if at said date of declaration such payment would have
     complied with the provisions of the Indenture;

          (ii)   dividends or distributions by any Restricted Subsidiary of the
     Company payable (x) to all holders of a class of Capital Stock of such
     Restricted Subsidiary on a pro rata basis or on a basis that is more
     favorable to the Company; provided that at least 50% of such class of
     Capital Stock is held by the Company and/or one or more of its Restricted
     Subsidiaries or (y) to all holders of a class of Preferred Stock of a
     Restricted Subsidiary that is not a Subsidiary Guarantor issued after the
     Issue Date in compliance with Section 4.06;

          (iii)  the payment of cash dividends on any series of Disqualified
     Stock issued after the Issue Date in an aggregate amount not to exceed the
     cash received by the Company since the Issue Date upon issuance of such
     Disqualified Stock;

          (iv)   the redemption, repurchase, retirement or other acquisition of
     any Equity Interests of the Company, any Restricted Subsidiary or any Joint
     Venture (or the acquisition of all the outstanding Equity Interests of any
     Person that conducts no operations and has no assets or liabilities other
     than the ownership of Equity Interests in a Joint Venture) in exchange for,
     or out of the net cash proceeds of the substantially concurrent sale (other
     than to a Subsidiary or Joint Venture of the Company) of, Qualified Equity
     Interests of the Company; provided that the amount of any such net cash
     proceeds that are utilized for any such redemption, repurchase, retirement
     or other acquisition shall be excluded from clause (C)(ii) of Section
     4.07(a);

          (v)    the defeasance, redemption or repurchase of Subordinated Debt
     with the net cash proceeds from an incurrence of Permitted Refinancing or
     in exchange for or out of the net cash proceeds from the substantially
     concurrent sale (other than to a Subsidiary or Joint Venture of the
     Company) of Qualified Equity Interests of the Company; provided that the
     amount of any such net cash proceeds that are utilized for any such
     redemption, repurchase, retirement or other acquisition shall be excluded
     from clause (C)(ii) of Section 4.07(a);

          (vi)   the repurchase, redemption or other acquisition or retirement
     for value of (x) any Equity Interests of the Company or any Subsidiary of
     the Company held by any member of the Company's (or any of its
     Subsidiaries') management pursuant to any management equity subscription
     agreement or stock option agreement or (y) any Equity Interests of the
     Company that are or are intended to be used to satisfy issuances of Equity
     Interests upon exercise of employee or director stock options or upon
     exercise or satisfaction of other similar instruments outstanding under
     employee or director benefit plans of the Company or any Subsidiary of the
     Company; provided that the aggregate price paid for all such repurchased,
     redeemed, acquired or retired Equity Interests shall not exceed $10.0
     million in any fiscal year of the Company;

          (vii)  Restricted Investments in any of the Specified Joint Ventures
     (including without limitation, the purchase of Equity Interests of a
     Specified Joint Venture directly from another Person or the purchase of all
     the outstanding Equity Interests of any Person that conducts no operations
     and has no assets or liabilities other than the ownership of Equity
     Interests of a Specified Joint Venture) to the extent that the proceeds
     thereof are used to purchase or redeem an interest of another Person in
     such Specified Joint Venture (other than the Company, a Restricted
     Subsidiary or an Affiliate of the Company, except a Person that is deemed
     to be an Affiliate solely by virtue of its ownership of Equity Interests of
     the Company acquired in exchange for Equity Interests in such Specified
     Joint Venture); provided that after giving pro forma effect thereto as if
     such Restricted Payment (and any related incurrence of Indebtedness) had
     been made at the

                                       48



     beginning of the most recently ended four-full-fiscal-quarter period for
     which financial statements have been filed with the SEC pursuant to Section
     4.04 immediately preceding the date of such Restricted Payment, the Company
     would have been permitted to incur at least $1.00 of additional
     Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in
     Section 4.06(a);

          (viii) Restricted Investments in any Joint Venture made during any
     fiscal year of the Company or within 45 days after the end of such fiscal
     year in amounts that, together with all other Restricted Investments made
     in such Joint Venture in respect of such fiscal year in reliance on this
     Section 4.07(b)(viii) during such fiscal year or within 45 days after the
     end of such fiscal year, do not exceed the amount of dividends or
     distributions previously paid in respect of such fiscal year to the Company
     or any Restricted Subsidiary by such Joint Venture;

          (ix)   the payment of dividends on the Company's common stock at a
     rate not to exceed $0.90 per share per annum (such $0.90 amount to be
     appropriately adjusted to reflect any stock split, reverse stock split,
     stock dividend or similar transactions made after the Issue Date so that
     the aggregate amount of dividends payable after such transaction is the
     same as the amount payable immediately prior to such transaction);

          (x)    distributions or payments of Receivables Fees;

          (xi)   (A) Investments in any Joint Venture or Unrestricted Subsidiary
     organized to construct, own and/or operate a propylene oxide plant in the
     European Union in an aggregate amount that, together with all other
     Investments made pursuant to this Section 4.07(b)(xi), does not exceed
     $100.0 million and (B) the pledge of the Capital Stock of such Joint
     Venture or Unrestricted Subsidiary or of a Joint Venture Subsidiary that
     has no assets and conducts no operations other than the holding directly or
     indirectly of Equity Interests of such Joint Venture to secure Non-Recourse
     Debt of such Joint Venture or Unrestricted Subsidiary;

          (xii)  (A) (x) the transfer of the TDI Assets to a newly formed Joint
     Venture or Unrestricted Subsidiary or (y) the designation of any Restricted
     Subsidiary that has no assets or liabilities other than all or a portion of
     the TDI Assets as an Unrestricted Subsidiary, in each case, in connection
     with the incurrence of Indebtedness by such Joint Venture or Unrestricted
     Subsidiary or Rhodia or a wholly-owned subsidiary of Rhodia to improve the
     Rhodia TDI Plant and (B) the pledge of the Capital Stock of such Joint
     Venture or Unrestricted Subsidiary or of a Joint Venture Subsidiary that
     has no assets and conducts no operations other than the holding directly or
     indirectly of Equity Interests of such Joint Venture to secure Non-Recourse
     Debt of such Joint Venture or Unrestricted Subsidiary or Rhodia or a
     wholly-owned subsidiary of Rhodia;

          (xiii) the repurchase of any Subordinated Debt at a purchase price not
     greater than 101% of the principal amount thereof in the event of (x) a
     Change of Control pursuant to a provision no more favorable to the holders
     thereof than the provisions of Section 4.14 or (y) an Asset Sale pursuant
     to a provision no more favorable to the holders thereof than the provisions
     of Section 4.09; provided that, in each case, prior to such repurchase the
     Company has made a Change of Control Offer or Asset Sale Offer, as
     applicable, and repurchased all Notes that were validly tendered for
     payment in connection with such Change of Control Offer or Asset Sale
     Offer;

          (xiv)  distributions by any Restricted Subsidiary or Joint Venture of
     chemicals to a holder of Capital Stock of such Restricted Subsidiary or
     Joint Venture if such distributions are made pursuant to a provision in a
     joint venture agreement or other arrangement entered into in connection
     with the establishment of such Joint Venture or Restricted Subsidiary that
     requires such holder to pay a price for such chemicals equal to that which
     would be paid in a comparable transaction negotiated on an arm's-length
     basis (or pursuant to a provision that imposes a substantially equivalent
     requirement);

                                       49



          (xv)   any other Restricted Payment that, together with all other
     Restricted Payments made pursuant to this Section 4.07(b)(xv) on or after
     the Issue Date, does not exceed $25 million (after giving effect to any
     subsequent reduction in the amount of any Investments made pursuant to this
     Section 4.07(b)(xv) as a result of the repayment or other disposition
     thereof for cash as set forth in clause (C)(iii) of Section 4.07(a), the
     amount of such reduction not to exceed the amount of such Investments
     previously made pursuant to this Section 4.07(b)(xv); and

          (xvi)  dividends or distributions by any Joint Venture (other than a
     Specified Joint Venture) to all holders of a class of Capital Stock of such
     Joint Venture permitted by Section 4.07(b)(ii)(x) above; provided that
     after giving effect to such dividends or distributions and any related
     transactions, the Joint Venture making such dividends or distributions to
     such holders is contractually entitled to receive, and receives within 180
     days before or after the date of such dividends or distributions, directly
     or indirectly, an equivalent or larger cash payment from each such holder
     (other than from a holder that is the Company or any Restricted Subsidiary)
     or from an Affiliate of such holder, which cash payment has not been
     previously applied pursuant to this Section 4.07(b)(xvi) to offset any
     other dividend or distribution by such Joint Venture to such holder and (y)
     such dividends or distributions do not exceed such holders' pro rata share
     of the Joint Venture's cash flows from operating activities, minus any
     non-cash charge to the extent that it represents an accrual of or reserve
     for cash expenditures in any future period or amortization of a prepaid
     cash expense in any future period.

          (c)  The Board of Directors of the Company may designate any
Restricted Subsidiary to be an Unrestricted Subsidiary if such designation would
not cause a Default. For purposes of making such determination, all outstanding
Investments by the Company and its Restricted Subsidiaries in the Subsidiary so
designated will be deemed to be Restricted Payments at the time of such
designation and will reduce the amount available for Restricted Payments Section
4.07(a) (except to the extent such Investments were repaid in cash, and, in the
case of a Joint Venture (and any Subsidiary of a Joint Venture) designated as an
Unrestricted Subsidiary on the first day that it is a Subsidiary of the Company,
except to the extent that (1) such Investments were made after the Issue Date or
(2) in the case of a Specified Joint Venture, such Investments were made prior
to the Issue Date). All such outstanding Investments (except as provided in the
parenthetical included in the preceding sentence) will be deemed to constitute
Investments in an amount equal to the fair market value of such Investments at
the time of such designation (as conclusively determined by the Board of
Directors). Such designation will only be permitted if any such Restricted
Payment would be permitted at such time and if such Restricted Subsidiary
otherwise meets the definition of an Unrestricted Subsidiary. In the case of any
designation by the Company of a Person as an Unrestricted Subsidiary on the
first day that such Person is a Subsidiary of the Company in accordance with the
provisions of the Indenture, such designation shall be deemed to have occurred
for all purposes of the Indenture simultaneously with, and automatically upon,
such Person becoming a Subsidiary.

          (d)  Not later than the date of making any Restricted Payment, other
than those permitted by Sections 4.07(b)(ii)(x), 4.07(b)(vi), 4.07(b)(x) and
4.07(b)(xiv) above, and not later than the 120th day after making any Restricted
Payment permitted by Section 4.07(b)(vi) above, the Company shall deliver to the
Trustee an Officers' Certificate stating that such Restricted Payment is
permitted and setting forth the basis upon which the calculations required by
this Section 4.07 were computed.

     Section 4.08.   Limitation on Dividend and other Payment Restrictions
Affecting Restricted Subsidiaries and Joint Ventures. (a) The Company will not,
and will not permit any of its Restricted Subsidiaries to, directly or
indirectly, create or otherwise cause or suffer to exist or become effective any
restriction on the ability of any Restricted Subsidiary to:

          (i)    (A) pay dividends or make any other distributions to the
     Company or any of its Restricted Subsidiaries (1) on its Capital Stock, or
     (2) with respect to any other interest or participation in, or measured by,
     its profits, or (B) pay any Indebtedness owed to the Company or any of its
     Restricted Subsidiaries;

          (ii)   make loans or advances to the Company or any of its Restricted
     Subsidiaries; or

                                       50



          (iii)  transfer any of its properties or assets to the Company or any
     of its Restricted Subsidiaries;

except for such restrictions existing under or by reason of:

                 (a)  existing agreements as in effect on the Issue Date;

                 (b)  Indebtedness permitted by the Indenture to be incurred
          containing restrictions on the ability of Restricted Subsidiaries to
          consummate transactions of the types described in clause (i), (ii) or
          (iii) above not materially more restrictive than those contained in
          the Indenture;

                 (c)  the Indenture;

                 (d)  applicable law;

                 (e)  existing restrictions with respect to a Person acquired by
          the Company or any of its Restricted Subsidiaries (except to the
          extent such restrictions were put in place in connection with or in
          contemplation of such acquisition), which restrictions are not
          applicable to any Person, or the properties or assets of any Person,
          other than the Person, or the property or assets of the Person, so
          acquired;

                 (f)  customary non-assignment provisions in leases and other
          agreements entered into in the ordinary course of business;

                 (g)  construction loans and purchase money obligations
          (including Capital Lease Obligations) for property acquired in the
          ordinary course of business that impose restrictions of the nature
          described in clause (iii) above on the property so constructed or
          acquired;

                 (h)  in the case of clause (iii) above, restrictions contained
          in security agreements or mortgages securing Indebtedness of a
          Restricted Subsidiary to the extent such restrictions restrict the
          transfer of the property subject to such security agreements or
          mortgages;

                 (i)  a Permitted Refinancing, provided that the restrictions
          contained in the agreements governing such Permitted Refinancing are
          not materially more restrictive, taken as a whole, than those
          contained in the agreements governing the Indebtedness being
          refinanced (as conclusively evidenced by a Board Resolution);

                 (j)  customary restrictions on a Finance Subsidiary imposed in
          such Finance Subsidiary's organizational documents or by the terms of
          its Preferred Stock;

                 (k)  any restriction with respect to shares of Capital Stock of
          a Restricted Subsidiary imposed pursuant to an agreement entered into
          for the sale or disposition of such shares of Capital Stock or any
          restriction with respect to the assets of a Restricted Subsidiary
          imposed pursuant to an agreement entered into for the sale or
          disposition of such assets or all or substantially all the Capital
          Stock of such Restricted Subsidiary pending the closing of such sale
          or disposition;

                 (1)  in the case of any Restricted Subsidiary that is a Joint
          Venture, customary restrictions on such Restricted Subsidiary
          contained in its joint venture agreement, which restrictions arc
          consistent with the past practice of the Company and its Restricted
          Subsidiaries (as conclusively evidenced by a Board Resolution);

                                       51



                 (m)  existing restrictions with respect to a Specified Joint
          Venture or the property or assets thereof or a Subsidiary of a
          Specified Joint Venture or the property or assets thereof, in each
          case, at the time such Specified Joint Venture first becomes a
          Restricted Subsidiary (except to the extent such restrictions were put
          in place in connection with or in contemplation of such Specified
          Joint Venture becoming a Restricted Subsidiary), which restrictions
          are not applicable to any Person, or the properties or assets of any
          Person, other than such Specified Joint Venture or the property or
          assets thereof or a Subsidiary of such Specified Joint Venture or the
          property or assets thereof; and

                 (n)  the Existing Credit Facility and related documentation as
          the same is in effect on the Issue Date and as amended, modified,
          extended, renewed, refunded, refinanced, restated or replaced from
          time to time; provided that the Existing Credit Facility and related
          documentation as so amended, modified, extended, reviewed, refunded,
          refinanced, restated or replaced is not materially more restrictive,
          taken as a whole, as to the matters enumerated above than the Existing
          Credit Facility and related documentation as in effect on the Issue
          Date (as conclusively evidenced by a Board Resolution).

                 For purposes of determining compliance with this covenant, in
          the event that a restriction meets the criteria of more than one of
          the categories of permitted restrictions described in clauses (a)
          through (n) above, the Company shall, in its sole discretion, classify
          such restriction in any manner that complies with this covenant, and
          such restriction will be treated as existing pursuant to the clauses
          designated by the Company.

          (b)  The Company will use best efforts (consistent with its
contractual obligations and fiduciary duties to any Joint Venture, in each case,
as in effect on the Issue Date) not to permit any of its Joint Ventures that are
not Restricted Subsidiaries to, directly or indirectly, create or otherwise
cause or suffer to exist or become effective any restriction on the ability of
such Joint Venture to:

                 (i)   (A) pay dividends or make any other distributions to the
          Company or any of its Restricted Subsidiaries (1) on its Capital Stock
          or (2) with respect to any other interest or participation in, or
          measured by, its profits or (B) pay any Indebtedness owed to the
          Company or any of its Restricted Subsidiaries;

                 (ii)  make loans or advances to the Company or any of its
          Restricted Subsidiaries; or

                 (iii) transfer any of its properties or assets to the Company
          or any of its Restricted Subsidiaries;

except for such restrictions existing under or by reason of:

          (a)  such Joint Venture's joint venture agreement or its credit
facility (provided that in each case such restrictions are consistent with the
past practice of the Company);

          (b)  in the case of any Joint Venture existing on the Issue Date, its
existing agreements as in effect on the date of the Indenture and as amended,
modified, extended, restated or replaced from time to time; provided that no
such amendment, modification, extension, restatement or replacement results in
agreements that are materially more restrictive, taken as a whole, as to the
matters enumerated above than the existing agreements as in effect on the date
of the Indenture (as conclusively evidenced by a Board Resolution);

          (c)  in the case of LCR, any instrument governing its Indebtedness;
and

                                       52



          (d)  the restrictions described in clauses (d), (e), (f), (g), (h),
(j), (k) and (n) of Section 4.08(a) (assuming that references in clauses (h) and
(k) to a Restricted Subsidiary were references to a Joint Venture).

     Section 4.09.   Limitation on Sales of Assets. (a) The Company will not,
and will not permit any of its Restricted Subsidiaries to, consummate an Asset
Sale unless:

          (i)    the Company and/or the Restricted Subsidiary, as the case may
     be, receives consideration at the time of such Asset Sale at least equal to
     the fair market value (as conclusively evidenced by a Board Resolution set
     forth in an Officers' Certificate delivered to the Trustee) of the assets
     or Equity Interests issued or sold or otherwise disposed of; and

          (ii)   at least 80% of the consideration therefor received by the
     Company and/or such Restricted Subsidiary is in the form of

                 (A)  cash or Cash Equivalents or

                 (B)  a controlling interest or a joint venture interest (to the
          extent otherwise permitted by the Indenture) in a business engaged in
          a Permitted Business or long-term property or assets that are used or
          useful in a Permitted Business;

provided that the amount of (x) any liabilities (as shown on the Company's or
such Restricted Subsidiary's most recent balance sheet) of the Company or any
Restricted Subsidiary (other than contingent liabilities and liabilities that
are by their terms subordinated to the Notes or any guarantee thereof) that are
assumed by the transferee of any such assets pursuant to a customary novation
agreement that releases the Company or such Restricted Subsidiary from further
liability and (y) any securities, notes or other obligations received by the
Company or any such Restricted Subsidiary from such transferee that are promptly
converted by the Company or such Restricted Subsidiary into cash (to the extent
of the cash received), shall be deemed to be cash for purposes of this
provision.

          (b)  Within 360 days after the receipt of any Net Proceeds from an
Asset Sale, the Company may apply such Net Proceeds, at its option:

                 (i)   to permanently repay Senior Indebtedness (and to
          correspondingly reduce commitments with respect thereto in the case of
          revolving borrowings) of the Company or a Subsidiary Guarantor or
          Indebtedness (and to correspondingly reduce commitments with respect
          thereto in the case of revolving borrowings) of any Restricted
          Subsidiary that is not a Subsidiary Guarantor; provided that, so long
          as the provisions of Section 4.12 are in effect, only (A) repayment of
          Senior Indebtedness incurred under the Existing Credit Facility (but
          not any refinancing thereof other than a credit facility with
          commercial banks and other lenders), or (B) if a Restricted Subsidiary
          that is not a Subsidiary Guarantor has consummated the Asset Sale,
          repayment of Indebtedness of such Restricted Subsidiary (with a
          corresponding reduction in commitments with respect thereto in the
          case of revolving borrowings) shall constitute a repayment of
          Indebtedness permitted pursuant to this clause (i); or

                 (ii)  to acquire a controlling interest or a joint venture
          interest (to the extent otherwise permitted by the Indenture) in
          another business or, the making of a capital expenditure or the
          acquisition of other long-term assets, in each case, in a Permitted
          Business (or enter into a binding commitment for any such expenditure
          or acquisition); provided that such binding commitment shall be
          treated as a permitted application of Net Proceeds from the date of
          such commitment until and only until the earlier of (x) the date on
          which such expenditure or acquisition is consummated and (y) the 180th
          day following the expiration of the aforementioned 360 day period. If
          the expenditure or acquisition contemplated by such binding commitment
          is not consummated on or before

                                       53



          such 180th day and the Company shall not have applied such Net
          Proceeds pursuant to clause (i) above on or before such 180th day,
          such commitment shall be deemed not to have been a permitted
          application of Net Proceeds at any time;

provided that, so long as the provisions of Section 4.12 are in effect, the
Company may not apply Net Proceeds of a Significant Asset Sale pursuant to
clause (ii) above to satisfy its obligations to apply such proceeds pursuant to
this paragraph except to the extent that the provisions of the Existing Credit
Facility (but not any refinancing thereof other than a credit facility with
commercial banks and other lenders) require a mandatory prepayment from such
proceeds but the requisite lenders thereunder have waived such mandatory
prepayment.

     Pending the final application of any such Net Proceeds, the Company may
temporarily reduce the revolving Indebtedness under the Existing Credit Facility
or otherwise invest such Net Proceeds in any manner that is not prohibited by
the Indenture. Any Net Proceeds from Asset Sales that are not applied or
invested as provided in the first sentence of this Section 4.09(b) will be
deemed to constitute "Excess Proceeds."

          (c)  When the aggregate amount of Excess Proceeds exceeds $25 million,
the Company will be required to make an offer to all Holders of Notes (an "Asset
Sale Offer") to purchase the maximum principal amount of Notes and, (x) if the
Company is required to do so under the terms of any other Indebtedness ranking
pari passu with such Notes, such other Indebtedness, and (y) if the Company
elects to do so, any Existing ARCO Chemical Debt, on a pro rata basis with the
Notes, that may be purchased out of the Excess Proceeds, at an offer price in
cash in an amount equal to 100% of the principal amount thereof plus accrued and
unpaid interest and Liquidated Damages, if any, thereon to the date of purchase,
in accordance with the procedures set forth herein.

     To the extent that the aggregate amount of Notes (and any other pari passu
Indebtedness subject to such Asset Sale Offer) tendered pursuant to such Asset
Sale Offer is less than the Excess Proceeds, the Company may, subject to the
other terms of the Indenture, use any remaining Excess Proceeds for general
corporate purposes.

     If the aggregate principal amount of Notes surrendered by Holders thereof
in connection with an Asset Sale Offer exceeds the amount of Excess Proceeds,
the Trustee shall select the Notes to be purchased on a pro rata basis.

     Upon completion of the offer to purchase made under the Indenture, the
amount of Excess Proceeds shall be reset at zero.

          (d)  The Company will comply with the requirements of Rule l4e-1 under
the Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with any Asset
Sale Offer.

     Section 4.10.   Limitation on Affiliate Transactions. (a) The Company will
not, and will not permit any of its Restricted Subsidiaries to, sell, lease,
transfer or otherwise dispose of any of its properties or assets to, or purchase
any property or assets from, or enter into or make any contract, agreement,
understanding, loan, advance or Guarantee with, or for the benefit of, any
Affiliate (each of the foregoing, an "Affiliate Transaction"), unless (i) such
Affiliate Transaction is on an arm's-length basis and (ii) the Company delivers
to the Trustee (a) with respect to any Affiliate Transaction involving aggregate
consideration in excess of $10 million, a Board Resolution set forth in an
Officers' Certificate certifying that such Affiliate Transaction complies with
clause (i) above and that such Affiliate Transaction has been approved by a
majority of the disinterested members of the Board of Directors and (b) with
respect to any Affiliate Transaction involving aggregate consideration in excess
of $25 million, an opinion as to the fairness to the Company or such Restricted
Subsidiary of such Affiliate Transaction from a financial point of view issued
by an investment banking firm of national standing; provided that:

                                       54



          (i)    transactions or payments pursuant to any employment
     arrangements or employee, officer or director benefit plans or arrangements
     entered into by the Company or any of its Restricted Subsidiaries in the
     ordinary course of business;

          (ii)   transactions between or among the Company and/or its Restricted
     Subsidiaries;

          (iii)  any Restricted Payment permitted by Section 4.07 of the type
     described in clause (i) or (ii) of the first paragraph thereof;

          (iv)   customary loans, advances, fees and compensation paid to, and
     indemnity provided on behalf of, officers, directors, employees or
     consultants of the Company or any of its Restricted Subsidiaries;

          (v)    transactions entered into on an arm's-length basis in the
     ordinary course of business between the Company or any of its Restricted
     Subsidiaries and any Joint Venture;

          (vi)   sales (including a sale in exchange for a promissory note of or
     Equity Interest in such Accounts Receivable Subsidiary) of accounts
     receivable and the provision of billing, collection and other services in
     connection therewith, in each case, to an Accounts Receivable Subsidiary in
     connection with any Receivables Facility; and

          (vii)  transactions pursuant to any contract or agreement in effect on
     the date of the Indenture as the same may be amended, modified or replaced
     from time to time so long as any such contract or agreement as so amended,
     modified or replaced is, taken as a whole, no less favorable to the Company
     and its Restricted Subsidiaries than the contract or agreement as in effect
     on the date of the Indenture (as conclusively evidenced by a Board
     Resolution); in each case, shall not be deemed to be Affiliate Transactions
     and therefore not subject to the requirements of clauses (i) and (ii) of
     the initial sentence above.

     Section 4.11.   Limitation on Liens. (a) The Company will not, and will not
permit any of its Restricted Subsidiaries to, directly or indirectly, create,
incur, assume or suffer to exist any Lien (except Permitted Liens) on any asset
now owned or hereafter acquired, or any income or profits therefrom, unless all
payments due under the Indenture and the Notes or the Subsidiary Guarantees are
secured on an equal and ratable basis with the obligations so secured (or, if
such obligations are subordinated by their terms to the Notes or the Subsidiary
Guarantees, prior to the obligations so secured) until such time as such
obligations are no longer so secured.

          (b)  The Company and its Subsidiaries shall also comply with the
provisions of Section 4.12(a) until such provisions cease to be in effect
pursuant to Section 4.12(b).

     Section 4.12.   Equal and Ratable Liens. (a) To the extent the Company or
any Subsidiary of the Company grants a Lien upon any of its property or assets
to secure the Existing Credit Facility Obligations, the Company or such
Subsidiary, as the case may be, shall, contemporaneously with the granting of
such Lien, secure the Indenture Obligations equally and ratably with the
Existing Credit Facility Obligations secured by such Lien.

          (b)  Notwithstanding the foregoing, from and after the date when all
Liens granted in favor of the holders of Existing Credit Facility Obligations
are released (and are not concurrently replaced with any new Liens on any asset
of the Company or any of its Restricted Subsidiaries securing Existing Credit
Facility Obligations), the provisions of this Section 4.12 will no longer apply.
The provisions of Section 4.11 will, however, continue to apply.

     Section 4.13.   No Amendment to Subordination Provisions. The Company will
not amend, modify or alter the Senior Subordinated Notes Indenture in any way
that would amend the subordination

                                       55



provisions of the Senior Subordinated Notes Indenture or any of the defined
terms used therein in a manner that would be adverse to the holders of the
Notes.

     Section 4.14.   Repurchase of Notes upon a Change in Control. (a) Upon the
occurrence of a Change of Control, each Holder will have the right to require
the Company to repurchase all or any part (equal to $1,000 or an integral
multiple thereof) of such Holder's Notes pursuant to the offer described below
(the "Change of Control Offer") at an offer price in cash equal to 101% of the
aggregate principal amount thereof plus accrued and unpaid interest and
Liquidated Damages, if any, thereon to the date of purchase (the "Change of
Control Payment") on a date that is not more than 90 days after the occurrence
of such Change of Control (the "Change of Control Payment Date"). Within 30 days
following any Change of Control, the Company will mail, or at the Company's
request the Trustee will mail, a notice to each Holder offering to repurchase
the Notes held by such Holder pursuant to the procedures specified in such
notice.

          (b)  The Company will comply with the requirements of Rule 14e-1 under
the Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the
repurchase of the Notes as a result of a Change of Control.

          (c)  On the Change of Control Payment Date, the Company will, to the
extent lawful, (1) accept for payment all Notes or portions thereof properly
tendered and not withdrawn pursuant to the Change of Control Offer, (2) deposit
with the Paying Agent an amount equal to the Change of Control Payment in
respect of all Notes or portions thereof so tendered, and (3) deliver or cause
to be delivered to the Trustee the Notes so accepted together with an Officer's
Certificate stating the aggregate principal amount of Notes or portions thereof
being purchased by the Company.

     The Paying Agent will promptly mail to each Holder of Notes so tendered the
Change of Control Payment for such Notes, and the Trustee will promptly
authenticate and mail (or cause to be transferred by book entry) to each Holder
a Note equal in principal amount to any unpurchased portion of the Notes
surrendered, if any; provided that each such Note will be in a principal amount
of $1,000 or an integral multiple thereof.

          (d)  The Company will not be required to make a Change of Control
Offer upon a Change of Control if a third party makes the Change of Control
Offer at the same or a higher purchase price, at the same times and otherwise in
substantial compliance with the requirements applicable to a Change of Control
Offer made by the Company and purchases all Notes validly tendered and not
withdrawn under such Change of Control Offer.

     Section 4.15.   Limitation on Sale and Leaseback Transactions. The Company
will not, and will not permit any of its Restricted Subsidiaries to, enter into
any Sale and Leaseback Transaction; provided that the Company or any Restricted
Subsidiary may enter into a Sale and Leaseback Transaction if: (a) the Company
or such Restricted Subsidiary, as the case may be, could have (i) incurred
Indebtedness in an amount equal to the Attributable Debt relating to such Sale
and Leaseback Transaction pursuant to the Fixed Charge Coverage Ratio test set
forth in Section 4.06(a) (whether or not such covenant has ceased to be
otherwise in effect pursuant to Section 4.18) and (ii) incurred a Lien to secure
such Indebtedness pursuant to Section 4.11 without securing the Notes; and (b)
the gross cash proceeds of such Sale and Leaseback Transaction are at least
equal to the fair market value (as conclusively determined by the Board of
Directors) of the property that is the subject of such Sale and Leaseback
Transaction.

     Section 4.16.   Limitation on Line of Business. The Company will not, and
will not permit any of its Restricted Subsidiaries to, engage in any business
other than Permitted Businesses, except to such extent as would not be material
to the Company and its Subsidiaries taken as a whole.

     Section 4.17.   Limitation on Accounts Receivable Facilities. The Company
may, and any of its Restricted Subsidiaries may, sell (including a sale in
exchange for a promissory note of or an Equity Interest in such Accounts
Receivable Subsidiary) at any time and from time to time, accounts receivable to

                                       56



any Accounts Receivable Subsidiary; provided that the aggregate consideration
received in each such sale is at least equal to the aggregate fair market value
of the receivables sold.

     Section 4.18.   Limited Applicability of Covenants when Notes are Rated
Investment-Grade. Notwithstanding the foregoing, the Company's and its
Restricted Subsidiaries' obligations to comply with the provisions of Sections
4.06, 4.07, 4.08, 4.09, 4.10, 4.16, 4.17 and 4.22 will terminate and cease to
have any further effect from and after the first date when the Notes are rated
Investment Grade.

     Section 4.19.   Existence. Subject to Articles 4 and 5 of this Indenture,
the Company will do or cause to be done all things necessary to preserve and
keep in full force and effect its existence and the existence of each of its
Restricted Subsidiaries in accordance with the respective organizational
documents of the Company and each such Subsidiary and the rights (whether
pursuant to charter, partnership certificate, agreement, statute or otherwise),
material licenses and franchises of the Company and each such Subsidiary;
provided that the Company shall not be required by this Section 4.19 to preserve
any such right, license or franchise, or the existence of any Restricted
Subsidiary, if the Company shall determine that the maintenance or preservation
thereof is no longer desirable in the conduct of the business of the Company and
its Restricted Subsidiaries taken as a whole.

     Section 4.20.   Payment of Taxes and Other Claims. The Company will payor
discharge and shall cause each of its Restricted Subsidiaries to payor
discharge, or cause to be paid or discharged, before the same shall become
delinquent (a) all material taxes, assessments and governmental charges levied
or imposed upon (i) the Company or any such Subsidiary, (ii) the income or
profits of any such Subsidiary which is a corporation or (iii) the property of
the Company or any such Subsidiary and (b) all material lawful claims for labor
materials and supplies that, if unpaid, might by law become a lien upon the
property of the Company or any such Subsidiary; provided that the Company shall
not be required to pay or discharge, or cause to be paid or discharged, any such
tax, assessment, charge or claim the amount, applicability or validity of which
is being contested in good faith by appropriate proceedings and for which
adequate reserves have been established in accordance with GAAP.

     Section 4.21.   Maintenance of Properties and insurance. The Company will
cause all material assets necessary in the conduct of its business or the
business of any of its Restricted Subsidiaries, to be maintained and kept in
good condition, repair and working order (ordinary wear and tear excepted) and
will cause to be made all necessary repairs, renewals and replacements thereof,
all as in the judgment of the Company may be necessary so that the business
carried on in connection therewith may be properly conducted at all times;
provided that nothing in this Section 4.21 shall prevent the Company or any such
Subsidiary from discontinuing the use, operation or maintenance of any of such
assets or disposing or abandoning of any of them, if such discontinuance,
disposal or abandonment is, in the judgment of the Company, desirable in the
conduct of the business of the Company or such Subsidiary.

     The Company will maintain, and will cause each of its Restricted
Subsidiaries to maintain (either in the Company's name or in such Subsidiary's
own name) insurance on all their respective properties consistent with the
insurance maintained on the Issue Date or otherwise in at least such amounts
(with no materially greater risk retention) and against at least such risks as
are usually maintained, retained or insured against in the same general area by
companies of established repute owning similar properties in such area and
engaged in the same or a similar business, in either case, to the extent
available to the Company and its Restricted Subsidiaries on commercially
reasonable terms.

     Section 4.22.   Limitation on Issuance of Guarantees by Restricted
Subsidiaries. (a) The Company will not permit any Restricted Subsidiary that is
not a Subsidiary Guarantor, directly or indirectly, to Guarantee or secure the
payment of any other Indebtedness of the Company or any of its Restricted
Subsidiaries (except Indebtedness of such Restricted Subsidiary or a Restricted
Subsidiary of such Restricted Subsidiary) unless (i) such Restricted Subsidiary
simultaneously executes and delivers a supplemental indenture in the form of
Exhibit B hereto providing for the Guarantee of the payment of the Notes by such
Restricted Subsidiary and shall deliver an Opinion of Counsel to the Trustee
pursuant to paragraph (c) below; provided that this paragraph shall not be
applicable to (x) any Guarantee of any Restricted Subsidiary that existed at the
time such Person became a Restricted Subsidiary and was not

                                       57



incurred in connection with, or in contemplation of, such Person's becoming a
Restricted Subsidiary, (y) Guarantees of Indebtedness of a Restricted Subsidiary
that is a Foreign Subsidiary by a Restricted Subsidiary that is a Foreign
Subsidiary or (z) the granting of Liens by a Joint Venture Subsidiary to secure
Indebtedness under the Existing Credit Facility, the Existing Senior Secured
Notes and the Notes. If the Notes are (A) pari passu with the Guaranteed
Indebtedness, then the Subsidiary Guarantee shall be pari passu with, or senior
to, the guarantee of such Guaranteed Indebtedness or (B) senior to the
Guaranteed Indebtedness, then the Subsidiary Guarantee shall be senior to the
guarantee of such Guaranteed Indebtedness at least to the extent that the Notes
are senior to such Guaranteed Indebtedness.

          (b)  Notwithstanding the foregoing, each Subsidiary Guarantee by a
Restricted Subsidiary shall be automatically and unconditionally released and
discharged upon (i) any sale, exchange or transfer, to any Person not an
Affiliate of the Company, of all the Company's and each Restricted Subsidiary's
Capital Stock in such Restricted Subsidiary (which sale, exchange or transfer is
not prohibited by the Indenture) as provided in Section 5.03(b), (ii) the
release or discharge of the Guarantee which resulted in the creation of such
Subsidiary Guarantee (or, in the case of the Subsidiary Guarantees of ARCO
Chemical Technology, Inc., ARCO Chemical Technology, LP. and Lyondell Chemical
Nederland, Ltd. issued on the Issue Date, the release or discharge of its
Guarantee of Indebtedness under the Existing Credit Facility and the Existing
Senior Secured Notes), except a discharge or release by or as a result of
payment under such Guarantee, and (iii) the designation of such Restricted
Subsidiary as an Unrestricted Subsidiary in accordance with the terms of the
Indenture.

          (c)  The Opinion of Counsel described above shall be to the effect
that such supplemental indenture has been duly authorized, executed and
delivered by such Subsidiary and constitutes a valid and binding obligation of
such Subsidiary, enforceable against such Subsidiary in accordance with its
terms (subject to customary exceptions).

     Section 4.23.   Payments for Consents. Neither the Company nor any of its
Subsidiaries or Affiliates will, directly or indirectly, payor cause to be paid
any consideration, whether by way of interest, fee or otherwise, to any Holder
of any Notes for or as an inducement to any consent, waiver or amendment of any
of the terms or provisions of the Indenture or the Notes unless such
consideration is offered to be paid or agreed to be paid to all Holders of the
Notes that consent, waive or agree to amend such term or provision in the time
frame set forth in the solicitation documents relating to such consent, waiver
or agreement.

                                    ARTICLE 5

                     Consolidation, Merger or Sale of Assets

     Section 5.01.   Consolidation, Merger or Sale of Assets by the Company. (a)
The Company may not consolidate or merge with or into (whether or not the
Company is the surviving corporation), or sell, assign, transfer, conveyor
otherwise dispose of all or substantially all its assets in one or more related
transactions, to another corporation, Person or entity unless:

          (i)    the Company is the surviving corporation or the entity or the
     Person formed by or surviving any such consolidation or merger (if other
     than the Company) or to which such sale, assignment, transfer, conveyance
     or other disposition shall have been made is a corporation organized or
     existing under the laws of the United States, any state thereof or the
     District of Columbia;

          (ii)   the corporation formed by or surviving any such consolidation
     or merger (if other than the Company) or the corporation to which such
     sale, assignment, transfer, lease, conveyance or other disposition shall
     have been made assumes all the Obligations of the Company under the Notes,
     the Indenture and the Security Documents to which it is a party pursuant to
     a supplemental indenture in form reasonably satisfactory to the Trustee;

          (iii)  immediately after such transaction no Default or Event of
     Default exists; and

                                       58



          (iv)   the Company or the entity or Person formed by or surviving any
     such consolidation or merger (if other than the Company), or to which such
     sale, assignment, transfer, lease, conveyance or other disposition shall
     have been made (A) will have a Consolidated Net Worth immediately after the
     transaction equal to or greater than the Consolidated Net Worth of the
     Company immediately preceding the transaction and (B) except with respect
     to a consolidation or merger of the Company with or into a Person that has
     no outstanding Indebtedness, will, at the time of such transaction and
     after giving pro forma effect thereto as if such transaction had occurred
     at the beginning of the applicable four-quarter period, be permitted to
     incur at least $1.00 of additional Indebtedness pursuant to the Fixed
     Charge Coverage Ratio test set forth in Section 4.06(a). The foregoing
     shall not prohibit the merger or consolidation of a Wholly Owned Restricted
     Subsidiary with the Company; provided that, in connection with any such
     merger or consolidation, no consideration (other than common stock in the
     surviving Person or the Company) shall be issued or distributed to the
     stockholders of the Company.

          (b)  The Company will not lease all or substantially all its assets to
another Person.

     Section 5.02.   Successor Company Substituted. (a) Except as provided in
Section 5.02(b), upon any consolidation or merger, or any sale, assignment,
transfer, conveyance or other disposition of all or substantially all the assets
of the Company in accordance with Section 5.01 hereof, the successor corporation
formed by such consolidation or into or with which the Company is merged or to
which such sale, assignment, transfer, conveyance or other disposition is made
shall succeed to, and be substituted for (so that from and after the date of
such consolidation, merger, sale, assignment, transfer, conveyance or other
disposition, the provisions of this Indenture referring to the "Company" shall
refer instead to the successor corporation), and may exercise every right and
power of, the Company under this Indenture with the same effect as if such
successor Person had been named as the Company herein, and the predecessor
Company shall be released from all its obligations hereunder and under the
Notes.

          (b)  The sale, assignment, transfer, lease, conveyance or other
disposition by the Company of all or substantially all its property or assets
taken as a whole to one or more of the Company's Subsidiaries shall not relieve
the Company from its obligations under the Indenture and the Notes.

     Section 5.03.   Consolidation, Merger or Sale of Assets by a Subsidiary
Guarantor. (a) No Subsidiary Guarantor may consolidate with or merge with or
into (whether or not such Subsidiary Guarantor is the surviving Person), another
corporation, Person or entity whether or not affiliated with such Subsidiary
Guarantor unless:

          (i)    subject to the provisions of Section 5.03(b) below, the Person
     formed by or surviving any such consolidation or merger (if other than the
     Company or such Subsidiary Guarantor) assumes all the obligations of such
     Subsidiary Guarantor, pursuant to a supplemental indenture in form and
     substance reasonably satisfactory to the Trustee, under the Notes;

          (ii)   immediately after giving effect to such transaction, no Default
     or Event of Default exists; and

          (iii)  the Company would, at the time of such transaction and after
     giving pro forma effect thereto as if such transaction had occurred at the
     beginning of the applicable four-quarter period, (A) have a Consolidated
     Net Worth immediately after the transaction equal to or greater than the
     Consolidated Net Worth of the Company immediately preceding the transaction
     and (B) except with respect to a consolidation or merger with a Person that
     has no outstanding Indebtedness, be permitted to incur at least $1.00 of
     additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test
     set forth in 4.06(a).

     All the Subsidiary Guarantees issued pursuant to clause (i) above shall in
all respects have the same legal rank and benefit under this Indenture as the
Subsidiary Guarantees theretofore and thereafter issued in accordance with the
terms of this Indenture as though all such Subsidiary Guarantees had been issued
at the date of the execution hereof.

                                       59



          (b)  (i) The requirements of clauses (i) and (iii) of Section 5.03(a)
will not apply in the case of a consolidation with or merger with or into the
Company and the requirements of clause (iii) of Section 5.03(a) will not apply
in the case of a consolidation with or merger with or into another Subsidiary
Guarantor.

          (ii)   In the event of a sale or other disposition, by way of merger,
     consolidation or otherwise, of all the Capital Stock of any Subsidiary
     Guarantor to any Person that is not an Affiliate of the Company permitted
     by the applicable provisions of the Indenture, such Subsidiary Guarantor
     will be released and relieved of any obligations under its Subsidiary
     Guarantee; provided that the Net Proceeds of such sale or other disposition
     are applied in accordance with the applicable provisions of the Indenture.

     Section 5.04.   Opinion of Counsel to Trustee. The Trustee, subject to the
provisions of Sections 7.01 and 7.03, may receive an Opinion of Counsel as
conclusive evidence that any such consolidation, merger, conveyance, sale,
transfer, lease, exchange or other disposition referred to in Section 5.01 or
5.03 complies with the applicable provisions of this Indenture.

                                   ARTICLE 6

                                    Remedies

     Section 6.01.   Events of Default. Each of the following constitutes an
"Event of Default":

          (a)  a default in the payment of interest or any Liquidated Damages on
the Notes when due, which has continued for 30 days;

          (b)  a default in the payment when due of principal of or premium on,
any Note when due at its Stated Maturity, upon optional redemption, upon
required repurchase, upon declaration or otherwise;

          (c)  the failure by the Company to comply with its obligations under
Article 5, Section 4.09 or Section 4.14;

          (d)  the Company or any Subsidiary Guarantor defaults in the
performance of or breaches any other covenant or agreement in this Indenture or
under the Notes (other than (a), (b) or (c) above) and such default or breach
continues for a period of 60 consecutive days after written notice by the
Trustee or the Holders of 25% or more in aggregate principal amount of the
Notes;

          (e)  any default under any mortgage, indenture or instrument under
which there may be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by the Company or any of its Significant
Subsidiaries (or any Indebtedness for money borrowed Guaranteed by the Company
or any of its Significant Subsidiaries if the Company or a Significant
Subsidiary does not perform its payment obligations under such Guarantee within
any grace period provided for in the documentation governing such Guarantee)
and, whether such Indebtedness or Guarantee exists on the date of the indenture
or is thereafter created, which default (a) constitutes a Payment Default or (b)
results in the acceleration of such Indebtedness prior to its Stated Maturity,
and in each case, the principal amount of any such Indebtedness, together with
the principal amount of any other such Indebtedness under which there has been a
Payment Default or that has been so accelerated, aggregates $50 minion or more;

          (f)  failure by the Company or any of its Significant Subsidiaries to
pay a final judgment or final judgments aggregating in excess of $50 million,
which judgment or judgments are not paid, discharged or stayed for a period of
60 days;

          (g)  a court having jurisdiction in the premises enters a decree or
order for (i) relief in respect of the Company or any Significant Subsidiary in
an involuntary case under any applicable bankruptcy, insolvency or other similar
Jaw now or hereafter in effect, (ii) appointment of a receiver,

                                       60



liquidator, assignee, custodian, trustee, sequestrator or similar official of
the Company or any Significant Subsidiary or for all or substantially all the
property and assets of the Company or any Significant Subsidiary or (iii) the
winding up or liquidation of the affairs of the Company or any Significant
Subsidiary and, in each case, such decree or order shall remain unstayed and in
effect for a period of 60 consecutive days;

          (h)  the Company or any Significant Subsidiary (i) commences a
voluntary case under any applicable bankruptcy, insolvency or other similar law
now or hereafter in effect, or consents to the entry of an order for relief in
an involuntary case under any such law, (ii) consents to the appointment of or
taking possession by a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official of the Company or any Significant Subsidiary or
for all or substantially all the property and assets of the Company or any
Significant Subsidiary or (iii) effects any general assignment for the benefit
of creditors;

          (i)  except as permitted by the Indenture, any Subsidiary Guarantee
issued hereunder shall be held in any judicial proceeding to be unenforceable or
invalid or shall cease for any reason to be in full force and effect or any
Subsidiary Guarantor, or any Person acting on behalf of any Subsidiary
Guarantor, shall deny or disaffirm its obligations under the Subsidiary
Guarantees issued thereunder; or

          (j)  any of the Security Documents ceases to be in full force and
effect, or any of the Security Documents ceases to give the holders of the Notes
any of the Liens purported to be created thereby, or any of the Security
Documents is declared null and void or the Company or any Restricted Subsidiary
denies in writing that it has any further liability under any Security Document
or gives written notice to such effect (in each case other than in accordance
with the terms of this Indenture (including Section 14.01(b)) or the terms of
the Existing Credit Facility or the Security Documents (including the cessation
of effectiveness of any Security Document in connection with a release of all
collateral covered thereby in accordance with the terms of this Indenture, the
Existing Credit Facility, the Existing Senior Secured Note Indentures and such
Security Document) or unless waived by the requisite lenders under the Existing
Credit Facility if, after the waiver, the Company is in compliance with Section
4.12; provided that if a failure of the sort described in this clause (j) is
susceptible of cure, no Event of Default shall arise under this clause (j) with
respect thereto until 30 days after notice of such failure shall have been given
to the Company by the Trustee or the Holders of at least 25% in principal amount
of the then outstanding Notes issued under the Indenture.

     Section 6.02.   Acceleration. If an Event of Default (other than an Event
of Default specified in clause (g) or (h) of Section 6.01 that occurs with
respect to the Company or any Subsidiary Guarantor) occurs and is continuing
under this Indenture, the Trustee or the Holders of at least 25% in aggregate
principal amount of the Notes then Outstanding, by written notice to the Company
(and to the Trustee if such notice is given by the Holders (the "Acceleration
Notice")), may, and the Trustee at the request of such Holders shall, declare
the principal of, premium, if any, and accrued but unpaid interest and
Liquidated Damages, if any, on all the Notes to be due and payable. Upon a
declaration of acceleration, such principal, premium, if any, and accrued
interest and Liquidated Damages, if any, shall be immediately due and payable.
If an Event of Default specified in clause (g) or (h) of Section 6.01 occurs
with respect to the Company or any Subsidiary Guarantor, the principal of,
premium, if any, accrued interest and Liquidated Damages, if any, on the Notes
then Outstanding shall ipso facto become and be immediately due and payable
without any declaration or other act on the part of the Trustee or any Holder.

     Section 6.03.   Other Remedies. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of principal or interest and Liquidated Damages on the Notes or to enforce the
performance of any provision of the Notes or this Indenture.

     The Trustee may maintain a proceeding even if it does not possess any of
the Notes or does not produce any of them in the proceeding. A delay or omission
by the Trustee or any Holder in exercising any right or remedy accruing upon an
Event of Default shall not impair the right or remedy or constitute a waiver of
or acquiescence in the Event of Default. All remedies are cumulative to the
extent permitted by law.

                                       61



     Section 6.04.   Waiver of Past Defaults. The Holders of at least a majority
in principal amount of the outstanding Notes, by written notice to the Company
and to the Trustee, may waive all past defaults and rescind and annul a
declaration of acceleration and its consequences under the Notes, if (i) all
existing Events of Default, other than the nonpayment of the principal of and
premium, if any, and interest and Liquidated Damages, if any, on such Notes that
have become due solely by such declaration of acceleration, have been cured or
waived and (ii) the rescission would not conflict with any judgment or decree of
a court of competent jurisdiction. Upon any such waiver, such Default shall
cease to exist, and any Event of Default arising therefrom shall be deemed to
have been cured for every purpose of this Indenture; but no such waiver shall
extend to any subsequent or other Default or impair any right consequent
thereon.

     Section 6.05.   Control by Majority. The Holders of at least a majority in
aggregate principal amount of the Outstanding Notes may direct the time, method
and place of conducting any proceeding for any remedy available to the Trustee
or exercising any trust or power conferred on the Trustee. However, the Trustee
may refuse to follow any direction that conflicts with law or this Indenture,
that may involve the Trustee in personal liability, or that the Trustee
determines in good faith may be unduly prejudicial to the rights of Holders not
joining in the giving of such direction and may take any other action it deems
proper that is not inconsistent with any such direction received from the
Holders.

     Section 6.06.   Limitation on Suits. A Holder may not pursue any remedy
with respect to this Indenture or the Notes unless:

          (a)  the Holder gives the Trustee written notice of a continuing Event
of Default;

          (b)  the Holders of at least 25% in aggregate principal amount of
Outstanding Notes make a written request to the Trustee to pursue the remedy;

          (c)  such Holder or Holders offer the Trustee security or indemnity
satisfactory to it against any loss, liability or expense;

          (d)  the Trustee does not comply with the request within 60 days after
receipt thereof and the offer of security or indemnity; and

          (e)  during such 60 day period, the Holders of at least a majority in
aggregate principal amount of the Outstanding Notes do not give the Trustee a
direction inconsistent with the request.

     Section 6.07.   Rights of Holders to Receive Payment. Notwithstanding any
other provision of this Indenture, the right of any Holder to receive payment of
principal, premium, if any, interest and Liquidated Damages, if any, on the
Note, on or after the respective due dates expressed in the Note, or to bring
suit for the enforcement of any such payment on or after such respective dates,
shall not be impaired or affected without the consent of the Holder.

     Section 6.08.   Collection Suit by Trustee. If an Event of Default
specified in Section 6.01(a) or (b) hereof occurs and is continuing, the Trustee
is authorized to recover judgment in its own name and as trustee of an express
trust against the Company or any other obligor for the whole amount of
principal, premium, if any, and interest and Liquidated Damages, if any,
remaining unpaid on the Notes and interest on overdue principal and, to the
extent lawful, interest and Liquidated Damages, if any, and such further amount
as shall be sufficient to cover amounts due the Trustee under Section 7.08,
including the costs and expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel.

     Section 6.09.   Trustee May File Proofs of Claim. The Trustee is authorized
to file such proofs of claim and other papers or documents as may be necessary
or advisable in order to have the claims of the Trustee (including any claim for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel) and the Holders allowed in any judicial
proceedings relative to the

                                       62



Company (or any other obligor upon the Notes), its creditors or its property and
shall be entitled and empowered to collect, receive and distribute any money or
other property payable or deliverable on any such claims and any custodian in
any such judicial proceeding is hereby authorized by each Holder to make such
payments to the Trustee, and in the event that the Trustee shall consent to the
making of such payments directly to the Holders, to pay to the Trustee any
amount due to it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, and any other amounts due the
Trustee under Section 7.08. To the extent that the payment of any such
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 7.08 out of the
estate in any such proceeding, shall be denied for any reason, payment of the
same shall be secured by a Lien on, and shall be paid out of, any and all
distributions, dividends, money, securities and other properties which the
Holders may be entitled to receive in such proceeding whether in liquidation or
under any plan of reorganization or arrangement or otherwise. Nothing herein
contained shall be deemed to authorize the Trustee to authorize or consent to or
accept or adopt on behalf of any Holder any plan of reorganization, arrangement,
adjustment or composition affecting the Notes or the rights of any Holder
thereof, or to authorize the Trustee to vote in respect of the claim of any
Holder in any such proceeding.

     Section 6.10.   Priorities. If the Trustee collects any money pursuant to
this Article or receives any money from the Collateral Agent as the distribution
of proceeds received upon realization of any Collateral, it shall pay out the
money in the following order:

     First: to the Trustee, its agents and attorneys for amounts due under
Section 7.08, including payment of all compensation, expense and
liabilities incurred, and all advances made, by the Trustee and the costs and
expenses of collection;

     Second: to Holders for amounts due and unpaid on the Notes for principal,
premium, if any, interest and Liquidated Damages, if any, ratably, without
preference or priority of any kind, according to the amounts due and payable on
the Notes for principal, premium, if any, interest and Liquidated Damages,
respectively; and

     Third: to the Company or to such party as a court of competent jurisdiction
shall direct.

     The Trustee may fix a record date and payment date for any payment to
Holders pursuant to this Section 6.10 upon five Business Days prior notice to
the Company.

     Section 6.11.   Undertaking for Costs. In any suit for the enforcement of
any right or remedy under this Indenture or in any suit against the Trustee for
any action taken or omitted by it as a Trustee, a court in its discretion may
require the filing by any party litigant in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys' fees and expenses, against any party
litigant in the suit, having due regard to the merits and good faith of the
claims or defenses made by the party litigant. This Section does not apply to a
suit by the Trustee, a suit by a Holder pursuant to Section 6.06, or a suit by
Holders of more than 10% in aggregate principal amount of the then Outstanding
Notes.

     Section 6.12.   Restoration of Rights and Remedies. If the Trustee or any
Holder has instituted any proceeding to enforce any right or remedy under this
Indenture or any Note and such proceeding has been discontinued or abandoned for
any reason, or has been determined adversely to the Trustee or to such Holder,
then and in every such case the Company, any other obligor upon the Notes, the
Trustee and the Holders shall, subject to any determination in such proceeding,
be restored severally and respectively to their former positions hereunder, and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.

     Section 6.13.   Rights and Remedies Cumulative. No right or remedy herein
conferred upon or reserved to the Trustee or to the Holders is intended to be
exclusive of any other right or remedy, and every right and remedy shall, to the
extent permitted by law, be cumulative and in addition to every other right and
remedy given hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion or

                                       63



employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.

     Section 6.14.   Waiver of Stay, Extension or Usury Laws. The Company
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay or extension law or any usury or other similar
law wherever enacted, now or at any time hereafter in force, that would prohibit
or forgive the Company from paying all or any portion of the principal of (or
premium, if any), interest or Liquidated Damages, if any, on the Notes
contemplated herein or in the Notes or that may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenant that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.

                                    ARTICLE 7

                                   The Trustee

     Section 7.01.   Certain Duties and Responsibilities. (a) Except during the
continuance of an Event of Default,

          (i)    the Trustee need perform only those duties that are
     specifically set forth in this Indenture and no others, and no implied
     covenants or obligations shall be read into this Indenture against the
     Trustee; and

          (ii)   in the absence of bad faith on its part, the Trustee may
     conclusively rely, as to the truth of the statements and the correctness of
     the opinions expressed therein, upon certificates or opinions furnished to
     the Trustee and conforming to the requirements of this Indenture. However,
     in the case of any such certificates or opinions which by any provision
     hereof are specifically required to be furnished to the Trustee, the
     Trustee shall examine the certificates and opinions to determine whether or
     not they conform to the requirements of this Indenture (but need not
     confirm or investigate the accuracy of mathematical calculations or other
     facts stated therein).

          (b)  In case an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs.

          (c)  No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that (i) this paragraph does not
limit the effect of Section 7.01(a); (ii) the Trustee shall not be liable for
any error of judgment made in good faith by a Responsible Officer, unless it is
proved that the Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any action it takes or
omits to take in good faith in accordance with a direction received by it
pursuant to Section 6.06.

          (d)  The Trustee may refuse to perform any duty or exercise any right
or power or expend or risk its own funds or otherwise incur any financial
liability unless it receives indemnity satisfactory to it against any loss,
liability or expense.

          (e)  Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of
Sections 7.01 and 7.03.

                                       64



     Section 7.02.   Notice of Defaults. (a) Within 90 days after the occurrence
of any Default, the Trustee shall transmit by mail to all Holders, as their
names and addresses appear in the Register, notice of such Default hereunder
actually known to the Trustee unless such Default shall have been cured or
waived; provided, however, that, except in the case of a Default in the payment
of the principal of, premium (if any) or interest and Liquidated Damages, if
any, on, any Note, the Trustee may withhold such notice if and so long as the
board of directors, the executive committee or a trust committee of Responsible
Officers of the Trustee determines that the withholding of such notice is not
opposed to the interests of the Holders.

          (b)  The Trustee shall not be required to take notice or be deemed to
have notice or knowledge of any event or of any Default (except default in the
payment of monies to the Trustee which are required to be paid to the Trustee on
or before a specified date or within a specified time after receipt by the
Trustee of a notice or a certificate which was in fact received), unless the
Trustee shall receive from the Company or a Holder a notice stating that the
same has occurred and is continuing, and specifying the same, and in the absence
of such notice the Trustee may conclusively assume that the same does not exist,
except as aforesaid.

     Section 7.03.   Certain Rights of Trustee. Subject to the provisions of
Section 7.01:

          (i)    the Trustee may conclusively rely and shall be protected in
     acting or refraining from acting upon any resolution, certificate,
     statement, instrument, opinion, report, notice, request, direction,
     consent, order, bond, note, other evidence of indebtedness or other paper
     or document believed by it to be genuine and to have been signed or
     presented by the proper party or parties;

          (ii)   any request or direction of the Company mentioned herein shall
     be sufficiently evidenced by a Company Request or a Company Order thereof,
     and any resolution of any Person's board of directors (or any committee
     thereof) shall be sufficiently evidenced if certified by an Officer of such
     Person as having been duly adopted and being in full force and effect on
     the date of such certificate;

          (iii)  whenever in the administration of this Indenture the Trustee
     shall deem it desirable that a matter be proved or established prior to
     taking, suffering or omitting any action hereunder, the Trustee (unless
     other evidence be herein specifically prescribed) may, in the absence of
     bad faith on its part, rely upon the Officer's Certificates of the Company;

          (iv)   the Trustee may consult with counsel of its selection and the
     written advice of such counselor any Opinion of Counsel shall be full and
     complete authorization and protection in respect of any action taken,
     suffered or omitted by it hereunder in good faith and in reliance thereon;

          (v)    in case an Event of Default occurs and is continuing, the
     Trustee shall be under no obligation to exercise any of the rights or
     powers vested in it by this Indenture at the request or direction of any of
     the Holders pursuant to this Indenture, unless such Holders shall have
     offered to the Trustee security or indemnity satisfactory to it against any
     loss, liability or expense which might be incurred by it in compliance with
     such request or direction;

          (vi)   the Trustee shall not be bound to make any investigation into
     the facts or matters stated in any resolution, certificate, statement,
     instrument, opinion, report, notice, request, direction, consent, order,
     bond, note, other evidence of indebtedness or other paper or document;

          (vii)  the Trustee may execute any of the trusts or powers hereunder
     or perform any duties hereunder either directly or by or through agents or
     attorneys and the Trustee shall not be responsible for any misconduct or
     negligence on the part of any agent or attorney appointed with due care by
     it hereunder; and

                                       65



          (viii) the rights, privileges, protections, immunities and benefits
     given to the Trustee, including, without limitation, its right to be
     indemnified, are extended to, and shall be enforceable by, the Trustee in
     each of its capacities hereunder, and to each agent, custodian and other
     Person employed to act hereunder.

     Section 7.04.   Not Responsible for Recitals or Issuance of Notes. The
recitals contained herein and in the Notes, except the Trustee's certificates of
authentication, shall be taken as the statements of the Company, and neither the
Trustee nor any Authenticating Agent assumes any responsibility for their
correctness. The Trustee makes no representations as to the validity or
sufficiency of this Indenture or of the Notes, except that the Trustee
represents that it is duly authorized to execute and deliver this Indenture,
authenticate the Notes and perform its obligations hereunder and that the
statements made by it in a Statement of Eligibility and Qualification on Form
T-1 supplied to the Company in connection with the registration of any Notes
issued hereunder will be true and accurate subject to the qualifications set
forth therein. Neither the Trustee nor any Authenticating Agent shall be
accountable for the use or application by the Company of the Notes or the
proceeds thereof.

     Section 7.05.   Trustee's Disclaimer. The Trustee makes no representation
as to the validity or adequacy of this Indenture or the Notes, it shall not be
accountable for the Company' use of the proceeds from the Notes, it shall not be
responsible for any statement in the offering memorandum for the Notes or in the
Indenture or the Notes (other than its certificate of authentication), the acts
of a prior Trustee hereunder, or the determination as to which beneficial owners
are entitled to receive any notices hereunder.

     Section 7.06.   May Hold Notes. The Trustee, any Authenticating Agent, any
Paying Agent, any Registrar or any other agent of the Company, in its individual
or any other capacity, may become the owner or pledgee of Notes and, subject to
Section 7.09 and Section 7.14, may otherwise deal with the Company or its
Affiliates with the same rights it would have if it were not Trustee,
Authenticating Agent, Paying Agent, Registrar or such other agent.

     Section 7.07.   Money Held in Trust. Money held by the Trustee in trust
hereunder need not be segregated from other funds except to the extent required
by law. The Trustee shall be under no liability for interest on any money
received by it hereunder except as otherwise agreed in writing with the Company.

     Section 7.08.   Compensation and Reimbursement. The Company agrees:

          (a)  to pay to the Trustee from time to time such compensation as the
Company and the Trustee shall from time to time agree in writing for all
services rendered by it hereunder (which compensation shall not be limited by
any provision of law in regard to the compensation of a trustee of an express
trust);

          (b)  to reimburse the Trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the reasonable
compensation and the expenses, advances and disbursements of its agents and
counsel), except any such expense, disbursement or advance as may be
attributable to its negligence or bad faith; and

          (c)  to indemnify the Trustee and any predecessor Trustee for, and to
hold it harmless against, any loss, damage, claims, liability or expense
(including taxes, other than taxes based on the income of the Trustee) incurred
without negligence or bad faith on its part, arising out of or in connection
with the acceptance or administration of this trust, including the reasonable
costs and expenses of defending itself against any claim (whether asserted by
the Company, a Holder or any other person) or liability in connection with the
exercise or performance of any of its powers or duties hereunder.

     The Company' payment obligations pursuant to this Section 7.08 shall
survive the discharge of this Indenture. When the Trustee incurs expenses after
the occurrence of a Default specified in Section

                                       66



6.01(g) or 6.01(h), the expenses are intended to constitute expenses of
administration under any Bankruptcy Law.

     Section 7.09.   Conflicting Interests. If the Trustee has or shall acquire
a conflicting interest within the meaning of the TIA, within 90 days the Trustee
shall either eliminate such conflicting interest, apply to the SEC for
permission to continue as Trustee with such conflicting interest, or resign, to
the extent and in the manner provided by, and subject to the provisions of, the
TIA and this Indenture. To the extent permitted by such Act, the Trustee shall
not be deemed to have a conflicting interest by virtue of being a trustee under
this Indenture with respect to Original Notes and Additional Notes, or a trustee
under any other indenture between the Company and the Trustee.

     Section 7.10.   Corporate Trustee Required; Eligibility. (a) There shall at
all times be one (and only one) Trustee hereunder. The Trustee shall be a Person
that is eligible pursuant to the TIA to act as such and has a combined capital
and surplus of at least $100,000,000. If any such Person publishes reports of
condition at least annually, pursuant to law or to the requirements of its
supervising or examining authority, then for the purposes of this Section 7.10
and to the extent permitted by the TIA, the combined capital and surplus of such
Person shall be deemed to be its combined capital and surplus as set forth in
its most recent report of condition so published. If at any time the Trustee
shall cease to be eligible in accordance with the provisions of this Section
7.10, it shall resign immediately in the manner and with the effect hereinafter
specified in this Article.

     Section 7.11.   Resignation and Removal; Appointment of Successor. (a) No
resignation or removal of the Trustee and no appointment of a successor Trustee
pursuant to this Article shall become effective until the acceptance of
appointment by the successor Trustee in accordance with the applicable
requirements of Section 7.12.

          (b)  The Trustee may resign at any time by giving written notice
thereof to the Company. If the instrument of acceptance by a successor Trustee
required by Section 7.12 shall not have been delivered to the Trustee within 30
days after the giving of such notice of resignation, the resigning Trustee may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.

          (c)  The Trustee may be removed at any time by Act of the Holders of a
majority in principal amount of the Outstanding Notes, delivered to the Trustee
and to the Company. If the instrument of acceptance by a successor Trustee
required by Section 7.12 shall not have been delivered to the Trustee within 30
days after the giving of such notice of removal, the Trustee being removed may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.

          If at any time:

          (i)    the Trustee shall fail to comply with Section 7.09 after
     written request therefor by the Company or by any Holder who has been a
     bona fide Holder for at least six months, or

          (ii)   the Trustee shall cease to be eligible under Section 7.10 and
     shall fail to resign after written request therefor by the Company or by
     any such Holder, or

          (iii)  the Trustee shall become incapable of acting or shall be
     adjudged bankrupt or insolvent or a receiver of the Trustee or of its
     property shall be appointed or any public officer shall take charge or
     control of the Trustee or of its property or affairs for the purpose of
     rehabilitation, conservation or liquidation,

then, in any such case, (A) the Company may remove the Trustee, or (B) subject
to Section 6.11, any Holder who has been a bona fide Holder for at least six
months may, on behalf of itself and all others similarly situated, petition any
court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor Trustee or Trustees.

                                       67



          (d)  If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, the
Company shall promptly appoint a successor Trustee and shall comply with the
applicable requirements of Section 7.12. If, within one year after such
resignation, removal or incapability, or the occurrence of such vacancy, a
successor Trustee shall be appointed by Act of the Holders of a majority in
principal amount of the Outstanding Notes delivered to the Company and the
retiring Trustee, the successor Trustee so appointed shall, forthwith upon its
acceptance of such appointment in accordance with the applicable requirements of
Section 7.12, become the successor Trustee and to that extent supersede the
successor Trustee appointed by the Company. If no successor Trustee shall have
been so appointed by the Company or the Holders and accepted appointment in the
manner required by Section 7.12, then, subject to Section 6.11, any Holder who
has been a bona fide Holder for at least six months may, on behalf of itself and
all others similarly situated, petition any court of competent jurisdiction for
the appointment of a successor Trustee.

          (e)  The Company shall give notice of each resignation and each
removal of the Trustee and each appointment of a successor Trustee to all
Holders in the manner provided in Section 1.10. Each notice shall include the
name of the successor Trustee and the address of its Corporate Trust Office.

     Section 7.12.   Acceptance of Appointment by Successor. (a) In case of the
appointment hereunder of a successor Trustee, every such successor Trustee so
appointed shall execute, acknowledge and deliver to the Company and to the
retiring Trustee an instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Trustee shall become effective and such
successor Trustee, without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the retiring Trustee;
but, on the request of the Company or the successor Trustee, such retiring
Trustee shall, upon payment of its charges, execute and deliver an instrument
transferring to such successor Trustee all the rights, powers and trusts of the
retiring Trustee and shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder.

          (b)  Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts referred
to above.

          (c)  No successor Trustee shall accept its appointment unless at the
time of such acceptance such successor Trustee shall be qualified and eligible
under this Article 7.

     Section 7.13.   Merger, Conversion, Consolidation or Succession to
Business. (a) Any corporation into which the Trustee may be merged or converted
or with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or
any corporation succeeding to all or substantially all the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article 7, without the execution or filing of any paper or any further act on
the part of any of the parties hereto. In case any Notes shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Notes so authenticated with the same effect
as if such successor Trustee had itself authenticated such Notes.

     Section 7.14.   Preferential Collection of Claims Against the Company. (a)
If and when the Trustee shall be or become a creditor of the Company (or any
other obligor upon the Notes), the Trustee shall be subject to the provisions of
the TIA regarding the collection of claims against the Company (or any such
other obligor).

     Section 7.15.   Appointment of Authenticating Agent. The Trustee may
appoint an Authenticating Agent acceptable to the Company to authenticate the
Notes. Any such appointment shall be evidenced by an instrument in writing
signed by a Responsible Officer, a copy of which instrument shall be promptly
furnished to the Company. Unless limited by the terms of such appointment, an
Authenticating Agent may authenticate Notes whenever the Trustee may do so. Each
reference in this Indenture to authentication (or execution of a certificate of
authentication) by the Trustee includes authentication (or

                                       68



execution of a certificate of authentication) by such Authenticating Agent. An
Authenticating Agent has the same rights as any Registrar, Paying Agent or agent
for service of notices and demands.

                                    ARTICLE 8

              Holders' List and Reports by Trustee and the Company

     Section 8.01.   The Company to Furnish Trustee Names and Addresses of
Holders; Stock Exchange Listing. (a) The Company will furnish or cause to be
furnished to the Trustee

          (i)    semi-annually, not more than 15 days after each Regular Record
     Date, a list, in such form as the Trustee may reasonably require, of the
     names and addresses of the Holders as of such Regular Record Date, and

          (ii)   at such other times as the Trustee may request in writing,
     within 30 days after the receipt by the Company of any such request, a list
     of similar form and content as of a date not more than 15 days prior to the
     time such list is furnished;

provided, however, that if and so long as the Trustee shall be the Registrar, no
such list need be furnished pursuant to this Section 8.01.

          (b) The Company will promptly notify the Trustee when any Notes are
listed on any stock exchange and of any delisting thereof.

     Section 8.02.   Preservation of Information; Communications to Holders. (a)
The Trustee shall preserve, in as current a form as is reasonably practicable,
the names and addresses of Holders contained in the most recent list, if any,
furnished to the Trustee as provided in Section 8.01 and the names and addresses
of Holders received by the Trustee in its capacity as Registrar; provided,
however, that if and so long as the Trustee shall be the Registrar, the Register
shall satisfy the requirements relating to such list. None of the Company, the
Trustee or any other Person shall be under any responsibility with regard to the
accuracy of such list. The Trustee may destroy any list furnished to it as
provided in Section 8.01 upon receipt of a new list so furnished.

          (b)  The rights of Holders to communicate with other Holders with
respect to their rights under this Indenture or under the Notes, and the
corresponding rights and privileges of the Trustee, shall be as provided by the
TIA.

          (c)  Every Holder, by receiving and holding the same, agrees with the
Company and the Trustee that neither the Company nor the Trustee nor any agent
of either of them shall be held accountable by reason of any disclosure of
information as to names and addresses of Holders made pursuant to the TIA.

     Section 8.03.   Reports by Trustee. The Trustee shall transmit to Holders
such reports concerning the Trustee and its actions under this Indenture as may
be required pursuant to the TIA at the times and in the manner provided pursuant
thereto. If required by Section 313(a) of the TIA, the Trustee shall, within 60
days after each May 15, following the date of this Indenture deliver to Holders
a brief report, dated as of such May 15, which complies with the provisions of
such Section 313(a). A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Trustee with each stock exchange, if
any, upon which any Notes are listed, with the SEC and with the Company.

                                    ARTICLE 9

                         Amendment, Supplement or Waiver

                                       69



     Section 9.01.   Without Consent of the Holders. (a) Without the consent of
any Holder, the Company and the Trustee may enter into one or more indentures
supplemental hereto, for any of the following purposes:

          (i)    to cure any ambiguity, omission, defect or inconsistency,

          (ii)   to provide for the assumption by a successor of the obligations
     of the Company under this Indenture,

          (iii)  to provide for uncertificated Notes in addition to or in place
     of certificated Notes; provided that the uncertificated Notes are issued in
     registered form for purposes of Section 163(f) of the Code, or in a manner
     such that the uncertificated Notes are described in Section 163(f)(2)(B) of
     the Code,

          (iv)   to add Subsidiary Guarantees with respect to the Notes, to
     grant a Lien under this Indenture to the Trustee as security for the Notes,
     to confirm and evidence the release, termination or discharge of any
     Subsidiary Guarantee or any such Lien with respect to or securing the Notes
     when such release, termination or discharge is permitted under this
     Indenture,

          (v)    to add to the covenants of the Company for the benefit of the
     Holders or to surrender any right or power conferred upon the Company,

          (vi)   to provide for or confirm the issuance of Additional Notes in
     accordance with the terms of the Indenture,

          (vii)  to make any change that does not adversely affect the rights of
     any Holder under the Notes or this Indenture, or

          (viii) to comply with any requirement of the SEC in connection with
     the qualification of this Indenture under the TIA or otherwise.

     Section 9.02.   With Consent of Holders. (a) Subject to Section 6.07, the
Company, the Trustee and (if applicable) any Subsidiary Guarantor may amend or
supplement this Indenture or the Notes with the written consent of the Holders
of not less than a majority in aggregate principal amount of the Outstanding
Notes, and any past Default or compliance with any provisions may also be waived
with the written consent of the Holders of not less than a majority in aggregate
principal amount of the Outstanding Notes.

          (b) Notwithstanding the provisions of this Section 9.02, without the
consent of each Holder affected, an amendment or waiver, including a waiver
pursuant to Section 6.04, may not (with respect to any Notes held by a
non-consenting Holder):

          (i)    change the Stated Maturity of the principal of, or any
     installment of interest on, any Note,

          (ii)   reduce the principal amount of or premium, if any, or interest
     or Liquidated Damages, if any, on any Note,

          (iii)  reduce any amount payable on redemption of the Notes or upon
     the occurrence of an Event of Default or reduce the Change of Control
     Payment or the amount to be paid in connection with an Asset Sale Offer,

          (iv)   change the place or currency of payment of principal of or
     premium, if any, or interest or Liquidated Damages, if any, on any Note,

                                       70


          (v)    impair the right to institute suit for the enforcement of any
     payment on or after the Stated Maturity (or, in the case of a redemption,
     on or after the Redemption Date) of any Note,

          (vi)   reduce the above-stated percentage of outstanding Notes the
     consent of whose Holders is necessary to modify or amend the Indenture,

          (vii)  waive a default in the payment of principal of or premium, if
     any, or interest or Liquidated Damages, if any, on the Notes (except as set
     forth in Section 6.04),

          (viii) reduce the percentage or aggregate principal amount of
     outstanding Notes the consent of whose Holders is necessary for waiver of
     compliance with provisions of the Indenture or for waiver of Defaults,

          (ix)   modify or change any provision of the Indenture affecting the
     ranking of the Notes or the Subsidiary Guarantees in a manner adverse to
     the Holders of the Notes,

          (x)    release any Subsidiary Guarantor from any of its
     obligations under its Subsidiary Guarantee or the Indenture other than in
     accordance with the provisions of the Indenture, or amend or modify any
     provision relating to such release, or

          (xi)   directly or indirectly release the Liens created by the
     Security Documents on all or substantially all the Collateral (other than
     in accordance with the terms of the Existing Credit Facility or the
     Security Documents or with the consent of the requisite lenders under the
     Existing Credit Facility if, after such consent, the Company is in
     compliance with Section 4.12).

          (c)    It shall not be necessary for the consent of the Holders under
this Section 9.02 to approve the particular form of any proposed amendment,
supplement or waiver, but it shall be sufficient if such consent approves the
substance thereof.

          (d)    After an amendment, supplement or waiver under this Section
9.02 becomes effective, the Company shall mail to the Holders of each Note
affected thereby, with a copy to the Trustee, a notice briefly describing the
amendment, supplement or waiver. Any failure of the Company to mail such notice,
or any defect therein, shall not, however, in any way impair or affect the
validity of any supplemental indenture or the effectiveness of any such
amendment, supplement or waiver.

     Section 9.03.   Execution of Amendments, Supplements or Waivers. The
Trustee shall sign any amendment, supplement or waiver authorized pursuant to
this Article 9 if the amendment, supplement or waiver does not adversely affect
the rights, duties, liabilities or immunities of the Trustee. If it does, the
Trustee may, but need not, sign it. In signing or refusing to sign such
amendment, supplement or waiver, the Trustee shall be entitled to receive, and
shall be fully protected in relying upon, an Officer's Certificate and an
Opinion of Counsel to the effect that the execution of such amendment,
supplement or waiver has been duly authorized, executed and delivered by the
Company and that such amendment, supplement or waiver is a valid and binding
agreement of the Company, enforceable against it in accordance with its terms
(subject to customary exceptions).

     Section 9.04.   Revocation and Effect of Consents. (a) Until an amendment,
supplement or waiver becomes effective, a consent to it by a Holder is a
continuing consent by the Holder and every subsequent Holder of that Note or any
Note that evidences all or any part of the same debt as the consenting Holder's
Note, even if notation of the consent is not made on any Note. Subject to the
following paragraph of this Section 9.04, any such Holder or subsequent Holder
may revoke the consent as to such Holder's Note by notice to the Trustee or the
Company received by the Trustee or the Company, as the case may be, before the
date on which the Trustee receives an Officer's Certificate certifying that the
Holders of the requisite principal amount of Notes have consented (and not
theretofore revoked such consent) to the amendment, supplement or waiver. The
Company may, but shall not be obligated to, fix a record date for

                                       71



the purpose of determining the Holders entitled to consent to any
amendment, supplement or waiver as set forth in Section 1.08.

          (b)    After an amendment, supplement or waiver becomes effective, it
shall bind every Holder, unless it makes a change described in any of clauses
(i) through (viii) of Section 9.02(b). In that case, the amendment, supplement
or waiver shall bind each Holder of a Note who has consented to it and every
subsequent Holder of such Note or any Note that evidences all or any part of the
same debt as the consenting Holder's Note.

     Section 9.05.   Conformity with TIA. (a) Every amendment or supplemental
indenture executed pursuant to this Article shall conform to the requirements of
the TIA as then in effect.

     Section 9.06.   Notation on or Exchange of Notes. (a) If an amendment,
supplement or waiver changes the terms of a Note, the Trustee shall (if required
by the Company and in accordance with the specific direction of the Company)
request the Holder to deliver its Note to the Trustee. The Trustee shall (if
required by the Company and in accordance with the specific written direction of
the Company) place an appropriate notation on the Note about the changed terms
and return it to the Holder. Alternatively, if the Company or the Trustee so
determines, the Company in exchange for the Note shall issue and the Trustee
shall authenticate a new Note that reflects the changed terms. Failure to make
the appropriate notation or issue a new Note shall not affect the validity and
effect of such amendment, supplement or waiver.

                                   ARTICLE 10

                               Redemption of Notes

     Section 10.01.  Right of Redemption. The Notes will not be redeemable
at the option of the Company prior to June 1, 2008. Thereafter, the Notes will
be redeemable, at the option of the Company, in whole or in part, at any time or
from time to time on and prior to maturity. Such redemption may be made upon
notice mailed by first-class mail to each Holder's registered address in
accordance with Section 10.05. The Notes will be so redeemable at the following
Redemption Prices (expressed as a percentage of principal amount on the relevant
Redemption Date), plus accrued and unpaid interest and Liquidated Damages, if
any, to the relevant Redemption Date, if redeemed during the twelve-month period
commencing on June 1 of the years set forth below:

Year                                       Redemption Price
- --------------------------------------     ----------------
2008..................................              105.250%
2009..................................              103.500%
2010..................................              101.750%
2011 and thereafter...................              100.000%

     Section 10.02.  Applicability of Article. Redemption or purchase of Notes
as permitted by Section 10.01 shall be made in accordance with this
Article 10.

     Section 10.03.  Election to Redeem; Notice to Trustee. In case of any
redemption at the election of the Company of the Notes, the Company shall, at
least 30 days prior to the Redemption Date initially fixed by the Company
(unless a shorter notice shall be satisfactory to the Trustee), notify the
Trustee of such Redemption Date and of the principal amount of Notes to be
redeemed.

     Section 10.04.  Selection by Trustee of Notes to Be Redeemed. In the
case of any partial redemption, selection of the Notes for redemption will be
made not more than 60 days prior to the Redemption Date by the Trustee in
compliance with the requirements of the principal national securities exchange,
if any, on which the Notes are listed or, if the Notes are not so listed, on a
pro rata basis, by lot or

                                       72



by such method as the Trustee shall deem fair and appropriate; provided
that no Notes of $1,000 or less shall be redeemed in part.

          (a)    The Trustee shall promptly notify the Company in writing of the
Notes selected for redemption and, in the case of any Note selected for partial
redemption, the portion of the principal amount thereof to be redeemed. On and
after the Redemption Date, interest and Liquidated Damages will cease to accrue
on Notes or portions thereof called for redemption.

          (b)    For all purposes of this Indenture, unless the context
otherwise requires, all provisions relating to the redemption of Notes shall
relate, in the case of any Note redeemed or to be redeemed only in part, to the
portion of the principal of such Note that has been or is to be redeemed.

     Section 10.05.  Notice of Redemption. (a) Notice of redemption or
purchase as provided in Section 10.01 shall be deemed to have been given upon
the mailing by first class mail, postage prepaid, of such notice to each Holder
of Notes to be redeemed, at its registered address as recorded in the Register,
not later than 30 nor more than 60 days prior to the Redemption Date.

     Any such notice shall state:

          (i)    the expected Redemption Date,

          (ii)   the Redemption Price,

          (iii)  if less than all Outstanding Notes are to be redeemed, the
     identification (and, in the case of partial redemption, the respective
     principal amounts) of the particular Notes to be redeemed,

          (iv)   that on the Redemption Date the Redemption Price will become
     due and payable upon each such Note to be redeemed, and that, unless the
     Company default in making such redemption payment or any Paying Agent is
     prohibited from making such payment pursuant to the terms of this
     Indenture, interest and Liquidated Damages thereon shall cease to accrue
     from and after said date,

          (v)    the place or places where such Notes are to be surrendered for
     payment of the Redemption Price and the name and address of the Paying
     Agent or Paying Agents,

          (vi)   the CUSIP and other security identification numbers, if any,
     subject to Section 3.12 hereof, and

          (vii)  the section of this Indenture pursuant to which the Notes are
     to be redeemed.

     Notices of redemption may not be conditional.

          (b)    Notice of such redemption or purchase of Notes to be so
redeemed or purchased at the election of the Company shall be given by the
Company or, at the written request of the Company delivered at least five
Business Days prior to the date proposed for the mailing of such notice, by the
Trustee in the name and at the expense of the Company; provided that such notice
to the Trustee may be revoked by the Company by written notice delivered to the
Trustee prior to the date proposed for the mailing of the notice of such
redemption to the Holders.

          (c)    The notice if mailed in the manner herein provided shall be
conclusively presumed to have been given, whether or not the Holder receives
such notice. In any case, failure to give such notice by mail or any defect in
the notice to the Holder of any Note designated for redemption as a whole or in
part shall not affect the validity of the proceedings for the redemption of any
other Note.

                                       73



     Section 10.06.  Deposit of Redemption Price. On or prior to 10:00 a.m., New
York City time on any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, the Company shall segregate and hold in trust as provided in Section
4.03) an amount of money sufficient to pay the Redemption Price of, and any
accrued and unpaid interest and Liquidated Damages, if any, on, all the Notes or
portions thereof which are to be redeemed on that date.

     Section 10.07.  Notes Payable on Redemption Date. (a) Notice of redemption
having been given as provided in this Article 10, the Notes so to be redeemed
shall, on the Redemption Date, become due and payable at the Redemption Price
herein specified and from and after such date (unless Company shall default in
the payment of the Redemption Price or any Paying Agent is prohibited from
paying the Redemption Price pursuant to the terms of this Indenture) such Notes
shall cease to bear interest and Liquidated Damages. Upon surrender of such
Notes for redemption in accordance with such notice, such Notes shall be paid by
the Company at the Redemption Price. Installments of interest and Liquidated
Damages, if any, whose Interest Payment Date is on or prior to the Redemption
Date shall be payable to the Holders of such Notes registered as such on the
relevant Regular Record Dates according to their terms and the provisions of
Section 3.07.

          (b)    On and after any Redemption Date, if money sufficient to pay
the Redemption Price of and any accrued and unpaid interest and Liquidated
Damages on Notes called for redemption shall have been made available in
accordance with Section 10.06, the Notes (or the portions thereof) called for
redemption will cease to accrue interest and Liquidated Damages and the only
right of the Holders of such Notes (or portions thereof) will be to receive
payment of the Redemption Price of, and subject to the last sentence of Section
10.07(a), any accrued and unpaid interest and Liquidated Damages, if any, on
such Notes (or portions thereof) to the Redemption Date. If any Note (or portion
thereof) called for redemption shall not be so paid upon surrender thereof for
redemption, the principal (and premium, if any) shall, until paid, bear interest
and Liquidated Damages from the Redemption Date at the rate borne by the Note
(or portion thereof).

     Section 10.08.  Notes Redeemed in Part. Any Note that is to be redeemed
only in part shall be surrendered at a Place of Payment (with, if the Company or
the Trustee so requires, due endorsement by, or a written instrument of transfer
in form satisfactory to the Company and the Trustee duly executed by, the Holder
thereof or such Holder's attorney duly authorized in writing) and the Company
shall execute and the Trustee shall authenticate and deliver to the Holder of
such Note without service charge, a new Note or Notes, of any authorized
denomination as requested by such Holder in aggregate principal amount equal to
and in exchange for the unredeemed portion of the principal of the Note so
surrendered.

                                   ARTICLE 11

                           Satisfaction and Discharge

     Section 11.01.  Satisfaction and Discharges of Indenture. (a) This
Indenture shall cease to be of further effect (except as to any surviving rights
of transfer or exchange of Notes herein provided for), and the Trustee, on
demand of and at the expense of the Company, shall execute proper instruments
acknowledging satisfaction and discharge of this Indenture, when

          (i)    either

                 (A)  all Notes theretofore authenticated and delivered (other
          than (y) Notes that have been destroyed, lost or stolen and that have
          been replaced or paid as provided in Section 3.06, and (z) Notes for
          whose payment money has theretofore been deposited in trust or
          segregated and held in trust by the Company and thereafter repaid to
          the Company or discharged from such trust, as provided in Section
          4.03) have been delivered to the Trustee canceled or for cancellation;
          or

                                      74



                 (B)  all such Notes not theretofore delivered to the Trustee
          canceled or for cancellation

                      (x)  have become due and payable, or

                      (y)  will become due and payable at their Stated Maturity
                 within one year, or

                      (z)  are to be called for redemption within one year under
                 arrangements reasonably satisfactory to the Trustee for the
                 giving of notice of redemption by the Trustee in the name, and
                 at the expense, of the Company,

          (ii)   the Company has irrevocably deposited or caused to be deposited
     with the Trustee an amount in United States dollars, U.S. Government
     Obligations, or a combination thereof, sufficient to pay and discharge the
     entire Indebtedness on such Notes not theretofore delivered to the Trustee
     canceled or for cancellation, for principal (and premium, if any) and
     interest and Liquidated Damages to the date of such deposit (in the case of
     Notes that have become due and payable), or to the Stated Maturity or
     Redemption Date, as the case may be;

          (iii)  the Company has paid or caused to be paid all other sums then
     payable hereunder by the Company; and

          (iv)   the Company has delivered to the Trustee an Officer's
     Certificate and an Opinion of Counsel each to the effect that all
     conditions precedent provided for in this Section 11.01 relating to the
     satisfaction and discharge of this Indenture have been complied with;
     provided that any such counsel may rely on any Officer's Certificate as to
     matters of fact (including as to compliance with the foregoing clauses (i),
     (ii) and (iii);

          (b)    Notwithstanding the satisfaction and discharge of this
Indenture, the obligations of the Company to the Trustee under Section 7.08 and,
if money shall have been deposited with the Trustee pursuant to clause (ii) of
Section 11.01(a), the obligations of the Trustee under Section 11.02, shall
survive.

     Section 11.02.  Application of Trust Money. Subject to the provisions of
the last paragraph of Section 4.03, all money deposited with the Trustee
pursuant to Section 11.01 shall be held in trust and applied by it, in
accordance with the provisions of the Notes and this Indenture, to the payment,
either directly or through any Paying Agent (including the Company acting as its
own Paying Agent) as the Trustee may determine, to the Persons entitled thereto,
of the principal (and premium, if any) and interest and Liquidated Damages on
the Notes; but such money need not be segregated from other funds except to the
extent required by law.

                                   ARTICLE 12

                       Defeasance and Covenant Defeasance

     Section 12.01.  Option of the Company to Effect Defeasance or Covenant
Defeasance. The Company may at its option by a Board Resolution, at any time,
elect to have either Section 12.02 or Section 12.03 applied to the Outstanding
Notes upon compliance with the conditions set forth below in this Article 12.

     Section 12.02.  Legal Defeasance and Discharge. Upon the exercise by the
Company under Section 12.01 of the option applicable to this Section 12.02, the
Company shall be deemed to have been discharged from any and all Obligations
with respect to all Outstanding Notes (and any Subsidiary Guarantor will be
discharged from any and all Obligations in respect of its Subsidiary Guarantee)
on the date which is the 123rd day after the deposit referred to in Section
12.04(a); provided that all of the conditions set forth below are satisfied
(hereinafter, "Legal Defeasance"). For this purpose, such Legal

                                       75



Defeasance means that the Company shall be deemed to have paid and
discharged the entire Indebtedness represented by the Outstanding Notes, which
shall thereafter be deemed to be "outstanding" only for the purposes of Section
12.05 hereof and the other Sections of this Indenture referred to in clauses (i)
and (ii) of this Section 12.02, and to have satisfied all its other obligations
under such Notes and this Indenture (and the Trustee, on demand of and at the
expense of the Company, shall execute proper instruments acknowledging the
same), except for the following provisions which shall survive until otherwise
terminated or discharged hereunder: (i) the rights of Holders of Outstanding
Notes to receive solely from the trust fund described in Section 12.04 hereof,
and as more fully set forth in such Section, payments in respect of the
principal of, premium, if any, and interest and Liquidated Damages on such Notes
when such payments are due, (ii) the obligations of the Company with respect to
such Notes under Sections 1.06, 2.03, 3.03, 3.04, 3.05, 3.06, 3.13, 3.14, 4.01,
4.02, 4.03 and 12.05 hereof, (iii) the rights, powers, trusts, duties and
immunities of the Trustee hereunder, including, without limitation, the
Trustee's rights under Section 7.08 hereof, and the obligations of the Company
in connection therewith and with this Article 12. Subject to compliance with
this Article 12, the Company may exercise its option under this Section 12.02
notwithstanding the prior exercise of its option under Section 12.03 hereof with
respect to the Notes.

     Section 12.03.  Covenant Defeasance. Upon the exercise by the Company under
Section 12.01 of the option applicable to this Section 12.03, the Company shall
be released from its obligations under the covenants contained in Sections 4.06
through Section 4.18, Section 4.22, Article 14 and clause (iv) of Section
5.01(a) hereof with respect to the Outstanding Notes and no Default under
Section 6.01(e), (f) and (g) shall thereafter constitute a Default or Event of
Default on the date which is the 123rd day after the deposit referred to in
Section 12.04(a); provided that all of the conditions set forth below are
satisfied (hereinafter, "Covenant Defeasance"), and the Notes shall thereafter
be deemed not Outstanding for the purposes of any direction, waiver, consent or
declaration or act of Holders (and the consequences of any thereof) in
connection with such covenants, but shall continue to be deemed Outstanding for
all other purposes hereunder. For this purpose, such Covenant Defeasance means
that, with respect to the Outstanding Notes, the Company may omit to comply with
and shall have no liability in respect of any term, condition or limitation set
forth in any such covenant, whether directly or indirectly, by reason of any
reference elsewhere herein to any such covenant or by reason of any reference in
any such covenant to any other provision herein or in any other document and
such omission to comply shall not constitute a Default or an Event of Default
under Section 6.01(c) or (d), but, except as specified above, the remainder of
this Indenture and such Notes shall be unaffected thereby.

     Section 12.04.  Conditions to Legal or Covenant Defeasance. The following
shall be the conditions to application of either Section 12.02 or Section 12.03
to the Outstanding Notes:

          (a)    the Company has deposited with the Trustee, in trust, money
and/or U.S. Government Obligations that through the payment of interest and
principal in respect thereof in accordance with their terms will provide money
in an amount sufficient, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, to pay (i) the principal of, premium, if any, and
accrued interest and Liquidated Damages, if any, on the Notes when such payments
are due in accordance with the terms of this Indenture and the Notes or (ii) in
the case of Legal Defeasance, accrued interest and Liquidated Damages, if any,
on the Notes through a scheduled redemption date and the principal of, and
premium on the Notes on such redemption date; provided that, at the time of
deposit, the Company irrevocably authorize the Trustee to issue a timely notice
of redemption and to take such other steps reasonably requested by the Trustee
to ensure that such redemption will be effectuated;

          (b)    in the case of an election under Section 12.02, the Company has
delivered to the Trustee (i) either (x) an Opinion of Counsel to the effect that
Holders will not recognize income, gain or loss for Federal income tax purposes
as a result of the exercise by the Company of its option under this Article 12
and will be subject to Federal income tax on the same amount and in the same
manner and at the same times as would have been the case if such deposit,
defeasance and discharge had not occurred, which Opinion of Counsel must be
based upon (and accompanied by a copy of) a ruling of the Internal Revenue
Service to the same effect unless there has been a change in applicable Federal
income tax law after the date of this Indenture such that a ruling is no longer
required or (y) a ruling directed to the Trustee received

                                       76



from the Internal Revenue Service to the same effect as the aforementioned
Opinion of Counsel and (ii) an Opinion of Counsel to the effect that, as a
result of the creation of the defeasance trust, the Company will not be required
to register under the Investment Company Act of 1940 and after the passage of
123 days following the deposit, the trust fund will not be subject to the effect
of Section 547 of the United States Bankruptcy Code or Section 15 of the New
York Debtor and Creditor Law or any comparable provision of applicable law;

          (c)    in the case of an election under Section 12.03, the delivery by
the Company to the Trustee of (i) an Opinion of Counsel to the effect that,
among other things, the Holders will not recognize income, gain or loss for
Federal income tax purposes as a result of such deposit and defeasance and will
be subject to Federal income tax on the same amount and in the same manner and
at the same times as would have been the case if such deposit and defeasance had
not occurred and (ii) an Opinion of Counsel to the effect that, as a result of
the creation of the defeasance trust, the Company will not be required to
register under the Investment Company Act of 1940 and after the passage of 123
days following the deposit, the trust fund will not be subject to the effect of
Section 547 of the United States Bankruptcy Code or Section 15 of the New York
Debtor and Creditor Law or any comparable provision of applicable law;

          (d)    immediately after giving effect to such deposit on a pro forma
basis, no Event of Default, or event that after the giving of notice or lapse of
time or both would become an Event of Default, shall have occurred and be
continuing on the date of such deposit or during the period ending on the 123rd
day after the date of such deposit, and such deposit shall not result in a
breach or violation of, or constitute a default under, any other agreement or
instrument to which the Company is a party or by which the Company is bound;

          (e)    if at such time the Notes are listed on a national securities
exchange, the Company has delivered to the Trustee an Opinion of Counsel to the
effect that the Notes will not be delisted as a result of such deposit,
defeasance and discharge;

          (f)    the Company shall have delivered to the Trustee Officer's
Certificates stating that the deposit made by the Company pursuant to its
election under Sections 12.02 or 12.03 was not made by the Company with the
intent of preferring the Holders over the other creditors of the Company with
the intent of defeating, hindering, delaying or defrauding creditors of the
Company or others; and

          (g)    the Company shall have delivered to the Trustee Officer's
Certificates and an Opinion of Counsel, each stating that all conditions
precedent provided for relating to either the Legal Defeasance under Section
12.02 or the Covenant Defeasance under Section 12.03 (as the case may be) have
been complied with as contemplated by this Section 12.04.

     Section 12.05.  Deposited Money and Government Securities to Be Held in
Trust; Other Miscellaneous Provisions. Subject to Section 12.06, all money and
U.S. Government Obligations (including the proceeds thereof) deposited with the
Trustee pursuant to Section 12.04 in respect of the Outstanding Notes shall be
held in trust and applied by the Trustee, in accordance with the provisions of
such Notes and this Indenture, to the payment, either directly or through any
Paying Agent (including the Company acting as Paying Agent) as the Trustee may
determine, to the Holders of such Notes of all sums due and to become due
thereon in respect of principal of, premium, if any, and interest and Liquidated
Damages, but such money need not be segregated from other funds except to the
extent required by law.

     The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the money or U.S. Government
Obligations deposited pursuant to Section 12.04 hereof or the principal and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the Outstanding Notes.

     Anything in this Article 12 to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon the request of the
Company any money or U.S. Government Obligations held by it as provided in
Section 12.04 hereof which, in the opinion of a nationally recognized firm of

                                       77



independent public accountants expressed in a written certification thereof
delivered to the Trustee (which may be the opinion delivered under Section
12.04(a) hereof), are in excess of the amount thereof which would then be
required to be deposited to effect an equivalent Legal Defeasance or Covenant
Defeasance.

     Section 12.06.  Repayment to Company. Any money deposited with the Trustee
or any Paying Agent, or then held by the Company, in trust for the payment of
the principal of, premium, if any, or interest and Liquidated Damages on any
Note and remaining unclaimed for two years after such principal, premium, if
any, or interest and Liquidated Damages has become due and payable shall be paid
to the Company on its written request or (if then held by the Company) shall be
discharged from such trust; and the Holder of such Note shall thereafter, as an
unsecured general creditor, look only to the Company for payment thereof, and
all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall thereupon
cease; provided, however, that the Trustee or such Paying Agent, before being
required to make any such repayment, shall at the expense of the Company cause
to be published once, in The New York Times and The Wall Street Journal
(national edition), notice that such money remains unclaimed and that, after a
date specified therein, which shall not be less than 30 days from the date of
such notification or publication, any unclaimed balance of such money then
remaining will be repaid to the Company.

     Section 12.07.  Reinstatement. If the Trustee or Paying Agent is unable to
apply any money or U.S. Government Obligations in accordance with Section 12.02
or 12.03, as the case may be, by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, then the obligations of the Company under this Indenture and the
Notes shall be revived and reinstated as though no deposit had occurred pursuant
to Section 12.02 or 12.03 until such time as the Trustee or Paying Agent is
permitted to apply all such amounts in accordance with Section 12.02 or 12.03
hereof, as the case may be; provided, however, that, if the Company makes any
payment of principal of, premium, if any, or interest and Liquidated Damages on
any Note following the reinstatement of its Obligations, the Company shall be
subrogated to the rights of the Holder of such Note to receive such payment from
the amounts held by the Trustee or Paying Agent.

                                   ARTICLE 13

                              Subsidiary Guarantees

     Section 13.01.  The Guarantees. (a) Subject to the provisions of this
Article 13, each Subsidiary Guarantor hereby irrevocably and unconditionally
guarantees, jointly and severally, the full and punctual payment (whether at
Stated Maturity, upon acceleration, optional redemption, upon repurchase
following a Change of Control Offer or an Asset Sale Offer or otherwise) of the
principal of and premium, if any, and interest and Liquidated Damages, if any,
on, and all other amounts payable under, each Note provided for under this
Indenture, and the full and punctual payment of all other amounts payable by the
Company under this Indenture. Upon failure by the Company to pay punctually any
such amount, each Subsidiary Guarantor shall forthwith on demand pay the amount
not so paid at the place and in the manner specified in this Indenture.

     Section 13.02.  Guarantee Unconditional. The obligations of the Subsidiary
Guarantors hereunder shall be unconditional and absolute and, without limiting
the generality of the foregoing, shall, to the fullest extent permitted by law,
not be released, discharged or otherwise affected by:

          (a)    any extension, renewal, settlement, compromise, waiver or
release in respect of any obligation of the Company under this Indenture or any
Note, by operation of law or otherwise;

          (b)    any modification or amendment of or supplement to this
Indenture or any Note; provided that any such modification which increases the
obligations of each Subsidiary Guarantor hereunder shall not be effective as to
such Subsidiary Guarantor without its consent;

          (c)    any release, impairment, non-perfection or invalidity of any
direct or indirect security for any obligation of the Company or any Subsidiary
Guarantor hereunder;

                                       78



          (d)    any change in the corporate existence, structure or ownership
of the Company, or any insolvency, bankruptcy, reorganization or other similar
proceeding affecting the Company or its assets or any resulting release or
discharge of any obligation of the Company contained in this Indenture or any
Note;

          (e)    the existence of any claim, set-off or other rights which the
Subsidiary Guarantors may have at any time against the Company, the Trustee or
any other Person, whether in connection with this Indenture or any unrelated
transactions, provided that nothing herein shall prevent the assertion of any
such claim by separate suit or compulsory counterclaim;

          (f)    any invalidity or unenforceability relating to or against the
Company for any reason of this Indenture or any Note, or any provision of
applicable law or regulation purporting to prohibit the payment by the Company
of the principal of or interest and Liquidated Damages on any Note or any other
amount payable by the Company under this Indenture; or

          (g)    any other act or omission to act or delay of any kind by the
Company, the Trustee or any other Person or any other circumstance whatsoever
which might, but for the provisions of this paragraph, constitute a legal or
equitable discharge of or defense to such Subsidiary Guarantor's obligations
hereunder.

     Section 13.03.  Discharge; Reinstatement. The Subsidiary Guarantors'
obligations hereunder shall remain in full force and effect until the principal
of, premium, if any, and interest and Liquidated Damages, if any, on the Notes
and all other amounts payable by the Company under this Indenture shall have
been paid in full. If at any time any payment of the principal of, premium, if
any, or interest and Liquidated Damages, if any, on any Note or any other amount
payable by the Company under this Indenture is rescinded or must be otherwise
restored or returned upon the insolvency, bankruptcy or reorganization of the
Company or otherwise, the Subsidiary Guarantors' obligations hereunder with
respect to such payment shall be reinstated as though such payment had been due
but not made at such time.

     Section 13.04.  Waiver by the Subsidiary Guarantors. The Subsidiary
Guarantors irrevocably waive acceptance hereof, presentment, demand, protest and
any notice not provided for herein, as well as any requirement that at any time
any action be taken by any Person against the Company or any other Person.

     Section 13.05.  Subrogation and Contribution. Upon making any payment with
respect to any obligation of the Company under this Article 13, the Subsidiary
Guarantor making such payment shall be subrogated to the rights of the payee
against the Company with respect to such obligation; provided that such
Subsidiary Guarantor shall not enforce either (i) any right to receive payment
by way of subrogation against the Company or against any direct or indirect
security for such obligation, or any other right to be reimbursed, indemnified
or exonerated by or for the account of the Company in respect thereof or (ii)
any right to receive payment, in the nature of contribution or for any other
reason, from any other Subsidiary Guarantor with respect to such payment, in
each case so long as any amount payable by the Company hereunder or under the
Notes remains unpaid.

     Section 13.06.  Stay of Acceleration. If acceleration of the time for
payment of any amount payable by the Company under this Indenture or the Notes
is stayed upon the insolvency, bankruptcy or reorganization of the Company, all
such amounts otherwise subject to acceleration under the terms of this Indenture
shall nonetheless be payable by the Subsidiary Guarantors hereunder forthwith on
demand by the Trustee or the Holders.

     Section 13.07.  Limits of Guarantees. Notwithstanding anything to the
contrary in this Article 13, each Subsidiary Guarantor, and by its acceptance of
Notes, each Holder, hereby confirms that it is the intention of all such parties
that the Subsidiary Guarantee of such Guarantor not constitute a fraudulent
conveyance under applicable fraudulent conveyance provisions of the United
States Bankruptcy Code or any comparable provision of state law. To effectuate
the foregoing intention, the Trustee, the Holders and the Subsidiary Guarantors
hereby irrevocably agree that the obligations of such Subsidiary Guarantor under

                                       79



its Subsidiary Guarantee and this Article 13 shall be limited to the maximum
amount that would not render such Subsidiary Guarantor's obligations subject to
avoidance under applicable fraudulent conveyance provisions of the United States
Bankruptcy Code or any comparable provision of state law.

     Section 13.08.  Execution and Delivery of Note Guarantee. To evidence its
Subsidiary Guarantee set forth in Section 13.01, each Subsidiary Guarantor
hereby agrees that this Indenture (or a supplemental indenture in the form of
Exhibit B hereto) shall be executed on behalf of such Subsidiary Guarantor by
one of its Officers.

     The signature of an Officer of a Subsidiary Guarantor on the Indenture
shall bind such Subsidiary Guarantor, notwithstanding that such individual has
ceased to hold such office prior to the authentication and delivery of any Note
or did not hold such office at the date of such Note.

     The delivery of any Note by the Trustee, after the authentication thereof
hereunder, shall constitute due delivery of the Subsidiary Guarantee set forth
in this Indenture on behalf of the Subsidiary Guarantors.

                                   ARTICLE 14

                              Security Arrangements

     Section 14.01.  Security. (a) In order to secure the Indenture Obligations
equally and ratably with the Existing Credit Facility Obligations and
Obligations in respect of the Existing Senior Secured Notes and, with respect to
certain of the Collateral, the Existing ARCO Chemical Debt, the Company will,
and will cause each of its Restricted Subsidiaries named in any Existing
Security Document as a party thereto, to execute and deliver to the Collateral
Agent prior to the Issue Date each Existing Security Document to which it is a
party. The Company and its Restricted Subsidiaries shall comply with all
covenants and agreements contained in the Security Documents the failure to
comply with which would have a material and adverse effect on the Liens
purported to be created thereby, unless such failure to comply is waived by the
requisite lenders under the Existing Credit Facility if, after that waiver, the
Company is in compliance with Section 4.12.

          (b)    The Trustee and each holder of each Note by its acceptance of
that Note acknowledges and agrees that:

          (i)    this Indenture, as originally executed and delivered by the
     parties hereto, does not create any Lien on any property or securities
     which secures the Indenture Obligations or this Indenture;

          (ii)   the Existing Security Documents, when executed and delivered by
     the parties thereto, will comply with the provisions of Section 4.12;

          (iii)  the Existing Security Documents provide, and any Security
     Document that becomes effective after the Issue Date, may provide, that the
     Liens created thereby or thereunder automatically will be released and
     extinguished with respect to any property or security that is transferred
     or otherwise disposed of in accordance with the terms of the Existing
     Credit Facility, including any property or security that is the subject of
     a Major Asset Sale and is transferred to a Subject Asset Transferee;

          (iv)   without the necessity of any consent of or notice to the
     Trustee or any holder of Indenture Obligations, the Company and the
     Collateral Agent may amend, modify, supplement or terminate any Security
     Document as long as the Company remains in compliance with Section 4.12;

          (v)    as among the Trustee and the holders of Indenture Obligations
     and the lenders under the Existing Credit Facility and the Collateral
     Agent, those lenders and the Collateral Agent

                                       80



     will have the sole ability to control and obtain remedies with respect
     to all Collateral (including on sale or liquidation of any Collateral after
     acceleration of the Notes, the Existing Senior Secured Notes, the Existing
     Credit Facility Obligations or the Existing ARCO Chemical Debt) without the
     necessity of any consent of or notice to the Trustee or any such holder;

          (vi)   any or all Liens granted under the Security Documents for the
     benefit of the Holders will be automatically released, without the
     necessity of any consent of the Trustee or any Holders, upon a release of
     such Lien or Liens pursuant to the terms of the Security Documents and the
     Existing Credit Facility or if such release is approved by the requisite
     lenders under the Existing Credit Facility;

          (vii)  the relative rights of the holders of Indenture Obligations and
     the holders of Indebtedness or other obligations secured by Liens on the
     Collateral are governed by, and are subject to the terms and conditions of,
     the Security Documents and not this Indenture; and

          (viii) without the necessity of any consent of or notice to the
     Trustee or any holder of Indenture Obligations, the Company may, on behalf
     of itself or any of its Restricted Subsidiaries, request and instruct the
     Collateral Agent to, on behalf of each secured party under the Security
     Documents, (A) execute and deliver to the Company, for the benefit of any
     Person, such release documents as the Company may reasonably request, of
     all liens and security interests held by the Collateral Agent in such
     assets, and such Person shall be entitled to rely conclusively on such
     release document, and (B) deliver any such assets in the possession of the
     Collateral Agent to the Company.

     Section 14.02.  Notice of Payment, Discharge or Defeasance. The Trustee and
each Holder, by its acceptance of a Note, agree that upon the payment in full or
discharge pursuant to Article 11 of the Indenture Obligations, the Trustee shall
without notice to or consent of any Holder, upon the written request of the
Company, certify to the Collateral Agent, in writing, that the Indenture
Obligations have been paid in full, or that this Indenture has been discharged
in accordance with Article 11.

                                       81



     IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, all as of the date first written above.

                                        LYONDELL CHEMICAL COMPANY


                                        By:       /s/  KAREN A. TWITCHEL
                                           ------------------------------------
                                                    Karen A. Twitchell
                                               Vice President and Treasurer


                                        ARCO CHEMICAL TECHNOLOGY, INC., as a
                                        Subsidiary Guarantor


                                        By:       /s/  FRANCIS P. MCGRAIL
                                           ------------------------------------
                                                    Francis P. McGrail
                                                        President


                                        ARCO CHEMICAL TECHNOLOGY, LP., as a
                                        Subsidiary Guarantor


                                        By: ARCO Chemical Technology Management,
                                            Inc.,  its General Partner


                                        By:       /s/  FRANCIS P. MCGRAIL
                                           ------------------------------------
                                                    Francis P. McGrail
                                                  President and Treasurer


                                        LYONDELL CHEMICAL NEDERLAND, LTD., as
                                        a Subsidiary Guarantor


                                        By:         /s/  MORRIS GELB
                                           ------------------------------------
                                                      Morris Gelb
                                                       President

                                       82



                                        THE BANK OF NEW YORK, as Trustee


                                        By:         /s/  VAN K. BROWN
                                           ------------------------------------
                                                       Van K. Brown
                                                      Vice President

                                       83



                                                                       EXHIBIT A

                                 [FORM OF NOTE]

                            LYONDELL CHEMICAL COMPANY

                      10 1/2% Senior Secured Note due 2013

No.                                                [CUSIP/CINS] No.
   --------------                                                  ------------
                                                   $
                                                    -------------

     LYONDELL CHEMICAL COMPANY, a Delaware corporation (the "Company", which
term includes any successor Persons under the Indenture hereinafter referred
to), for value received promises to pay to ____________ or its registered
assigns, the principal sum of ________________________ Dollars ($___________)
[or such other amount as indicated on the Schedule of Exchanges of Securities
attached hereto]/1/, on June 1,2013.

     Interest Rate:                10 1/2% per annum.

     Interest Payment Dates:       June 1 and  December  1 of each year
                                   commencing  December  1, 2003.

     Regular Record Dates:         May 15 and November 15 of each year.

     Reference is hereby made to the further provisions of this Note set forth
on the reverse hereof, which further provisions shall for all purposes have the
same effect as if set forth at this place.

- ----------
/1/  To be included in any Global Note

                                       A-1



     IN WITNESS WHEREOF, the Company has caused this Note to be signed manually
or by facsimile by its duly authorized officer.

                                        LYONDELL CHEMICAL COMPANY


                                        By:  /s/
                                           ------------------------------------

                                       A-2



                (Form of Trustee's Certificate of Authentication)

     This is one of the 10 1/2% Senior Secured Notes due 2013 referred to in the
within-mentioned Indenture.

                                        THE BANK OF NEW YORK, as Trustee


                                        By:  /s/
                                           ------------------------------------
                                                   Authorized Signatory
Dated:
      ---------------

                                       A-3



                             [REVERSE SIDE OF NOTE]

                            LYONDELL CHEMICAL COMPANY

                      10 1/2% Senior Secured Note due 2013

     (1)  Principal and Interest. The Company agrees to pay the principal of
this Note on June 1, 2013.

     The Company agrees to pay interest on the principal amount of this Note on
each Interest Payment Date, as set forth below, at the rate of 10 1/2% per
annum.

     Interest will be payable semi-annually (to the Holders of record of the
Notes (or any predecessor Notes) at the close of business on the Regular Record
Date immediately preceding the Interest Payment Date) on each Interest Payment
Date, commencing December 1, 2003.

     [The Holder of this Note is entitled to the benefits of the Registration
Rights Agreement, dated May 20, 2003, among the Company, the Subsidiary
Guarantors party thereto and the Initial Purchasers named therein (the
"Registration Rights Agreement"). In the event that (i) the Company and the
Subsidiary Guarantors fail to file an Exchange Offer Registration Statement with
the SEC on or prior to the 100th day after the Issue Date, (ii) the Exchange
Offer Registration Statement is not declared effective by the SEC on or prior to
the 210th day after the Issue Date, (iii) the Exchange Offer is not consummated
on or before the 30th business day after the Exchange Offer Registration
Statement is declared effective, (iv) the Company and the Subsidiary Guarantors
are obligated to file the Shelf Registration Statement and fail to file the
Shelf Registration Statement with the SEC on or prior to the 100th day after
such filing obligation arises, (v) the Company and the Subsidiary Guarantors are
obligated to file a Shelf Registration Statement and the Shelf Registration
Statement is not declared effective on or prior to the 210th day after the
obligation to file a Shelf Registration Statement arises, or (vi) the Exchange
Offer Registration Statement or the Shelf Registration Statement, as the case
may be, is declared effective but thereafter ceases to be effective or useable
in connection with resales of the Notes during the periods specified in the
Registration Rights Agreement, for such time of non-effectiveness or
non-usability (each, a "Registration Default"), the Company and the Subsidiary
Guarantors agree to pay to the Holder of this Note, if affected thereby,
liquidated damages ("Liquidated Damages") in an amount equal to $0.05 per week
per $1,000 in principal amount of this Note for each week or portion thereof
that the Registration Default continues for the first 90 day period immediately
following the occurrence of such Registration Default. The amount of the
Liquidated Damages shall increase by an additional $0.05 per week per $1,000 in
principal amount of Notes with respect to each subsequent 90 day period until
all Registration Defaults have been cured, up to a maximum amount of Liquidated
Damages of $0.25 per week per $1,000 in principal amount of Notes. The Company
and the Subsidiary Guarantors shall not be required to pay Liquidated Damages
for more than one Registration Default at any given time.

     Following the cure of all Registration Defaults, the accrual of Liquidated
Damages will cease.]/2/

     Interest on this Note will accrue from the most recent date to which
interest has been paid [on this Note or the Note surrendered in exchange
herefor]/3/ or, if no interest has been paid, from May 20, 2003; provided that,
if there is no existing default in the payment of interest and if this Note is
authenticated between a Regular Record Date referred to on the face hereof and
the next succeeding Interest Payment Date, interest shall accrue from such
Interest Payment Date. Interest will be computed on the basis of a 360-day year
of twelve 30-day months.
- ----------
/2/  Include only for Initial Note.
/3/  Include only for Exchange Note.

                                       A-4



     The Company shall pay interest on overdue principal and premium, if any,
and interest on overdue installments of interest and Liquidated Damages, to the
extent lawful, at a rate per annum equal to 1% per annum in excess of the rate
of interest applicable to the Notes.

     (2)  Method of Payment. The Company will pay interest (except defaulted
interest) on the principal amount of the Notes on each June 1 and December 1,
beginning December 1, 2003 to the Persons who are Holders (as reflected in the
Register at the close of business on the May 15 and November 15 immediately
preceding the Interest Payment Date), in each case, even if the Note is canceled
on registration of transfer or registration of exchange after such Regular
Record Date; provided that, with respect to the payment of principal, the
Company will make payment to the Holder that surrenders this Note to any Paying
Agent on or after June 1, 2013.

     The Company will pay principal, premium, if any, and interest and
Liquidated Damages, if any, in money of the United States that at the time of
payment is legal tender for payment of public and private debts. Payments
(including principal, premium, if any, and interest and Liquidated Damages, if
any) in respect of the Notes represented by the Global Notes, the Holders of
which have given wire transfer instructions on or prior to the relevant record
date, shall be made by wire transfer of immediately available funds to the
accounts specified by the Global Note Holder. With respect to Physical Notes,
the Company will make all payments of principal, premium, if any, and interest
and Liquidated Damages, if any, at the office or agency maintained by the
Company for such purposes in The City of New York or, at the Company's option,
by mailing a check to each such Holder's registered address. If a payment date
is a date other than a Business Day, payment may be made at that place on the
next succeeding day that is a Business Day and no interest shall accrue for the
intervening period.

     (3)  Paying Agent and Registrar. Initially, the Trustee will act as Paying
Agent and Registrar. The Company may change any Paying Agent or Registrar upon
written notice thereto. The Company, any Subsidiary or any Affiliate of any of
them may act as Paying Agent, Registrar or co-registrar.

     (4)  Indenture; Limitations. The Company issued the Notes under an
Indenture dated as of May 20, 2003 (the "Indenture"), among the Company, the
Subsidiary Guarantors and The Bank of New York, as trustee (the "Trustee").
Capitalized terms herein are used as defined in the Indenture unless otherwise
indicated. The terms of the Notes include those stated in the Indenture and
those made part of the Indenture by reference to the Trust Indenture Act of 1939
(the "TIA"). The Notes are subject to all such terms, and Holders are referred
to the Indenture and the TIA for a statement of all such terms. To the extent
permitted by applicable law, in the event of any inconsistency between the terms
of this Note and the terms of the Indenture, the terms of the Indenture shall
control.

     The Notes are secured senior obligations of the Company. The Indenture
limits the initial aggregate principal amount of the Notes to $325,000,000 but
permits the issuance of Additional Notes subject to compliance with certain
conditions and covenants contained in the Indenture and except as may be limited
by applicable law.

     (5)  Optional Redemption. The Notes may be redeemed at the option of the
Company, in whole or in part, at any time and from time to time, on or after
June 1, 2008, at the following Redemption Prices (expressed in percentages of
principal amount on the relevant Redemption Date), plus accrued and unpaid
interest and Liquidated Damages, if any, to the Redemption Date, if redeemed
during the 12-month period commencing June 1 of each of the years set forth
below:

       Year                     Redemption Price
- -----------------------------   ----------------
2008 ........................            105.250%
2009 ........................            103.500%
2010 ........................            101.750%
2011 and thereafter..........            100.000%

                                   A-5



     If less than all the Notes are to be redeemed at any time, selection of
Notes for redemption will be made by the Trustee in compliance with the
requirements of the principal national securities exchange, if any, on which the
Notes are listed or, if the Notes are not so listed, on a pro rata basis, by lot
or by such method as the Trustee shall deem fair and appropriate; provided that
no Notes of $1,000 or less shall be redeemed in part.

     Notices of redemption shall be mailed by first class mail at least 30 but
not more than 60 days before the redemption date to each Holder of Notes to be
redeemed at its registered address. Notices of redemption may not be
conditional. If any Note is to be redeemed in part only, the notice of
redemption that relates to such Note shall state the portion of the principal
amount thereof to be redeemed. A new Note in principal amount equal to the
unredeemed portion thereof will be issued in the name of the Holder thereof upon
cancellation of the original Note. Notes called for redemption become due on the
date fixed for redemption. On and after the redemption date, interest and
Liquidated Damages, if any, cease to accrue on Notes or portions of them called
for redemption.

     (6)  Repurchase upon a Change in Control and Sale of Assets. Upon the
occurrence of (a) a Change in Control, each Holder shall have the right to
require that the Company repurchase such Holder's Notes at a purchase price in
cash equal to 101% of the principal amount thereof on the date of purchase, plus
accrued and unpaid interest and Liquidated Damages, if any, to the date of
purchase and (b) an Asset Sale, the Company may be obligated to make an offer to
purchase on a pro rata basis from the Holders the Notes with the Excess Proceeds
of such Asset Sales at a purchase price equal to 100% of the principal amount of
such Notes plus accrued interest and Liquidated Damages, if any, to the date of
purchase.

     (7)  Denominations; Transfer; Exchange. The Notes are in fully registered
form without coupons, in denominations of $1,000 and any integral multiples of
$1,000. A Holder may register the transfer or exchange of Notes in accordance
with the Indenture. The Registrar may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents and to pay any taxes and
fees required by law or permitted by the Indenture.

     (8)  Persons Deemed Owners. A Holder may be treated as the owner of a Note
for all purposes.

     (9)  Unclaimed Money. If money for the payment of principal, premium, if
any, or interest and Liquidated Damages, if any, remains unclaimed for two
years, the Trustee and the Paying Agent will pay the money back to the Company
at its written request. After that, Holders entitled to the money must look to
the Company for payment, unless an abandoned property law designates another
Person, and all liability of the Trustee and such Paying Agent with respect to
such money shall cease.

     (10) Discharge Prior to Redemption or Maturity. If the Company irrevocably
deposits, or causes to be deposited, with the Trustee money or U.S. Government
Obligations sufficient to pay the then outstanding principal of and premium, if
any, and accrued interest and Liquidated Damages on the Notes (a) to redemption
or maturity, the Company will be discharged from the Indenture and the Notes,
except in certain circumstances for certain sections thereof, and (b) to
redemption or maturity, the Company will be discharged from certain covenants
set forth in the Indenture.

     (11) Amendment; Supplement; Waiver. Subject to certain exceptions, the
Indenture or the Notes may be amended or supplemented with the consent of the
Holders of at least a majority in aggregate principal amount of the Notes then
Outstanding, and any existing Default or compliance with any provision may be
waived with the consent of the Holders or a majority in aggregate principal
amount of the Notes then Outstanding. Without notice to or the consent of any
Holder, the parties thereto may amend the Indenture or the Notes to the extent
set forth in the Indenture.

     (12) Restrictive Covenants. The Indenture contains certain covenants,
including, without limitation, covenants with respect to the following matters:
(i) Indebtedness; (ii) Restricted Payments; (iii) distributions from Restricted
Subsidiaries and Joint Ventures; (iv) sales of assets; (v) transactions with

                                   A-6



Affiliates; (vi) Liens; (vii) no amendment to subordination provisions; (viii)
repurchase of Notes upon a Change in Control; (ix) Sale and Leaseback
Transactions; (x) Subsidiary Guarantees; and (xi) consolidation, merger and sale
of assets. Within 120 days after the end of each fiscal year, the Company must
report to the Trustee on compliance with such limitations.

     (13) Successor Persons. When a successor person or other entity (other than
a Subsidiary of the Company) assumes all the obligations of its predecessor
under the Notes and the Indenture, the predecessor person will be released from
those obligations.

     (14) Remedies for Events of Default. If an Event of Default (other than an
Event of Default specified in Section 6.01(g) or (h) of the Indenture that
occurs with respect to the Company or a Subsidiary Guarantor) occurs and is
continuing under this Indenture, then in every such case the Trustee or the
Holders of at least 25% in aggregate principal amount of the Outstanding Notes,
by written notice to the Company (and to the Trustee if such notice is given by
the Holders), may, and the Trustee at the written request of such Holders shall,
declare the principal of, premium, if any, and accrued interest and Liquidated
Damages, if any, on all of the Outstanding Notes to be immediately due and
payable. Upon a declaration of acceleration, such principal of, premium, if any,
and accrued interest and Liquidated Damages, if any, shall be immediately due
and payable. If an Event of Default specified in Section 6.01(g) or (h) of the
Indenture occurs with respect to the Company or a Subsidiary Guarantor, the
principal of, premium, if any, and accrued interest and Liquidated Damages, if
any, on the Outstanding Notes shall ipso facto become and be immediately due and
payable without any declaration or other act on the part of the Trustee or any
Holder. The Holders of at least a majority in aggregate principal amount of the
Outstanding Notes by written notice to the Company and to the Trustee, may waive
all past defaults and rescind and annul a declaration of acceleration and its
consequences if (1) all existing Events of Default, other than the nonpayment of
the principal of, premium, if any, and interest and Liquidated Damages, if any,
on the Notes that have become due solely by such declaration of acceleration,
have been cured or waived and (2) the recission would not conflict with any
judgment or decree of a court of competent jurisdiction.

     Holders may not enforce the Indenture, the Notes or the Subsidiary
Guarantees except as provided in the Indenture. The Trustee may require security
or indemnity satisfactory to it before it enforces the Indenture, the Notes or
the Subsidiary Guarantees. The Holders of at least a majority in aggregate
principal amount of the Notes then Outstanding may direct the Trustee in the
exercise of any trust or power in accordance with the terms of the Indenture.

     (15) Security. In order to secure the Indenture Obligations, the Company
and certain of its Restricted Subsidiaries have entered into the Security
Documents. The Indenture Obligations shall be secured by Liens on the Collateral
in accordance with the terms and provisions of the Security Documents. The
Indenture requires that Holders of the Notes be granted a lien equally and
ratably with any lien granted on additional assets to secure the holders of
Existing Credit Facility Obligations subsequent to the Issue Date. Each Holder
of this Note, by accepting the same, agrees that (i) the Existing Security
Documents provide, and any Security Document that becomes effective after the
Issue Date, may provide, that the Liens created thereby or thereunder
automatically will be released and extinguished with respect to any property or
security that is transferred or otherwise disposed of in accordance with the
terms of the Existing Credit Facility, including any property or security that
is the subject of a Major Asset Sale and is transferred to a Subject Asset
Transferee; (ii) without the necessity of any consent of or notice to the
Trustee or any holder of Indenture Obligations, the Company and the Collateral
Agent may amend, modify, supplement or terminate any Security Document as long
as the Company remains in compliance with the Indenture; (iii) as among the
Trustee and the holders of Indenture Obligations and the lenders under the
Existing Credit Facility and the Collateral Agent, those lenders and the
Collateral Agent will have the sole ability to control and obtain remedies with
respect to all Collateral (including on sale or liquidation of any Collateral
after acceleration of the Notes, the Existing Senior Secured Notes, the Existing
Credit Facility Obligations or the Existing ARCO Chemical Debt) without the
necessity of any consent of or notice to the Trustee or any such holder; (iv)
any or all Liens granted under the Security Documents for the benefit of the
Holders will be automatically released, without the necessity of any consent of
the Trustee or the Holders, upon a release of such Lien or Liens pursuant to the
terms of the Security Documents and the Existing Credit Facility or if such
release is approved by the requisite lenders under the Existing Credit

                                   A-7



Facility; (v) the relative rights of the holders of Indenture Obligations and
the holders of Indebtedness or other obligations secured by Liens on the
Collateral are governed by, and are subject to the terms and conditions of, the
Security Documents and not this Indenture; and (vi) without the necessity of any
consent of or notice to the Trustee or any holder of Indenture Obligations, the
Company may, on behalf of itself or any of its Restricted Subsidiaries, request
and instruct the Collateral Agent to, on behalf of each secured party under the
Security Documents, (A) execute and deliver to the Company, for the benefit of
any Person, such release documents as the Company may reasonably request, of all
liens and security interests held by the Collateral Agent in such assets, and
such Person shall be entitled to rely conclusively on such release document, and
(B) deliver any such assets in the possession of the Collateral Agent to the
Company. From and after the date when all liens granted in favor of the holders
of Existing Credit Facility Obligations are released, the provisions regarding
security described above will no longer apply.

     (16) Subsidiary Guarantees. Each Subsidiary Guarantor irrevocably and
unconditionally guarantees, jointly and severally, on a senior basis, the full
and punctual payment (whether at Stated Maturity, upon acceleration, optional
redemption, upon repurchase following a Change of Control Offer or an Asset Sale
Offer or otherwise) of the principal of, premium, if any, and interest and
Liquidated Damages, if any, on, and all other amounts payable under, this Note
provided for under this Indenture, and the full and punctual payment of all
other amounts payable by the Company under the Indenture; provided that,
notwithstanding anything to the contrary herein, the aggregate amount of the
Obligations guaranteed under the Indenture by any Subsidiary Guarantor shall be
limited in amount to the maximum amount that would not render such Subsidiary
Guarantor's obligations subject to avoidance under the applicable fraudulent
conveyance provisions of the United States Bankruptcy Code or any comparable
provision of any applicable state law.

     (17) Additional Subsidiary Guarantees. If any of the Company's Restricted
Subsidiaries shall Guarantee or secure the payment of any other Indebtedness of
the Company or any of its Restricted Subsidiaries, then, subject to certain
exceptions specified in the Indenture, such Restricted Subsidiary shall become a
Subsidiary Guarantor by executing a supplemental indenture.

     (18) Trustee Dealings with Company. The Trustee under the Indenture, in its
individual or any other capacity, may become the owner or pledgee of Notes and
may make loans to, accept deposits from, perform services for, and otherwise
deal with, the Company and its Affiliates as if it were not the Trustee.

     (19) Authentication. This Note shall not be valid until the Trustee signs
the certificate of authentication on this Note.

     (20) Abbreviations. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), COST (= Custodian) and U/G/M/A (= Uniform Gifts
to Minors Act).

     (21) Governing Law. This Note shall be governed by and construed in
accordance with the internal laws of the State of New York, without giving
effect to any principles of conflict of laws to the extent that the application
of the law of another jurisdiction is required thereby.

     The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture. Requests may be made to the Company, One Houston
Center, Suite 700, 1221 McKinney, Houston, Texas 77010; Attention: General
Counsel.

                                   A-8



                            [FORM OF TRANSFER NOTICE]

     FOR VALUE RECEIVED the undersigned registered holder hereby sell(s),
assign(s) and transfer(s) unto

Insert Taxpayer Identification No.

- ---------------------------------------------------------------------------
(Please print or typewrite name and address including zip code of assignee)

- --------------------------------------------------------------------------
the within Note and all rights thereunder, hereby irrevocably constituting
and appointing

- --------------------------------------------------------------------------
attorney to transfer such Note on the books of the Company with full power
of substitution in the premises.

                                   A-9



                     [THE FOLLOWING PROVISION TO BE INCLUDED
             ON ALL CERTIFICATES BEARING A PRIVATE PLACEMENT LEGEND]

     In connection with any transfer of this Note occurring prior to
________________, the undersigned confirms that without utilizing any general
solicitation or general advertising that:

                                    Check One

     (a)  this Note is being transferred in compliance with the exemption from
registration under the Securities Act of 1933, as amended, provided by Rule 144A
thereunder and the certificate attached hereto has been completed. [ ]

     (b)  this Note is being transferred in compliance with Regulation S under
the Securities Act and a certificate in the form specified by the Indenture is
being furnished herewith. [ ]

     (c)  this Note is being transferred in compliance with the exemption from
registration under the Securities Act of 1933, as amended, provided by Rule 144
thereunder. [ ]

     (d)  this Note is being transferred to the Company. [ ]

                                       or

     (e)  this Note is being transferred other than in accordance with (a), (b)
or (d) above, and documents are being furnished which comply with the conditions
of transfer set forth in this Note and the Indenture. [ ]

     If none of the foregoing boxes is checked, the Trustee or other Registrar
shall not be obligated to register this Note in the name of any Person other
than the Holder hereof unless and until the conditions to any such transfer of
registration set forth herein and in Sections 3.13 and 3.14 of the Indenture
shall have been satisfied.

Date:
     ----------------------

                                        ----------------------------------------
                                        NOTICE: The signature to this assignment
                                        must correspond with the name as written
                                        upon the face of the within-mentioned
                                        instrument in every particular, without
                                        alteration or any change whatsoever.

Signature Guarantee:
                     ------------------------

     Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.

              TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.

     The undersigned represents and warrants that it is purchasing this Note for
its own account or an account with respect to which it exercises sole investment
discretion and that it and any such account is a "qualified institutional buyer"
within the meaning of Rule 144A under the Securities Act of 1933, as amended,
and is aware that the sale to it is being made in reliance on Rule

                                      A-10



144A and acknowledges that it has received such information regarding the
Company as the undersigned has requested pursuant to Rule 144A or has determined
not to request such information and that it is aware that the transferor is
relying upon the undersigned's foregoing representations in order to claim the
exemption from registration provided by Rule 144A.

Dated:
      ---------------------
                                        ----------------------------------------
                                        To be executed by an executive officer

                                      A-11



                       OPTION OF HOLDER TO ELECT PURCHASE

     If you wish to have this Note purchased by the Company pursuant to Section
4.09 or Section 4.14 of the Indenture, check the box: [ ]

     If you wish to have a portion of this Note purchased by the Company
pursuant to Section 4.09 or Section 4.14 of the Indenture, state the amount (in
original principal amount) below:

     $
      --------------------------

     Date:
          ----------------------

     Your Signature:
                    -------------------------

     (Sign exactly as your name appears on the other side of this Note)

     Signature Guarantee:
                          -------------------

     Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.

                                      A-12



                       SCHEDULE OF EXCHANGES OF SECURITIES

     The following exchanges of a part of this Global Note for Physical Notes or
a part of another Global Note have been made:

               Amount of         Amount of      Principal amount
              decrease in       increase in      of this Global    Signature of
            principal amount  principal amount   Note following     authorized
Date of      of this Global    of this Global    such decrease      officer of
Exchange          Note              Note         (or increase)       Trustee



                                      A-13



                                                                       EXHIBIT B
                             SUPPLEMENTAL INDENTURE

                       dated as of ________________, ____

                                      among

                           LYONDELL CHEMICAL COMPANY,

                                   as Company

                             [SUBSIDIARY GUARANTORS]

                                       and

                              THE BANK OF NEW YORK,
                                   as Trustee

                              ---------------------

                      10 1/2% Senior Secured Notes due 2013

                                      B-1



     THIS SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), entered into
as of ___________________, ____, among LYONDELL CHEMICAL COMPANY., a Delaware
corporation (the "Company") [INSERT EACH SUBSIDIARY GUARANTOR EXECUTING THIS
SUPPLEMENTAL INDENTURE AND ITS JURISDICTION OF INCORPORATION] (each an
"Undersigned") and THE BANK OF NEW YORK, as trustee (the "Trustee").

                                    RECITALS

     WHEREAS, the Company, the Subsidiary Guarantors party thereto and the
Trustee entered into the Indenture, dated as of May 20,2003 (the "Indenture"),
relating to the Company's 10 1/2% Senior Secured Notes due 2013 (the "Notes");

     WHEREAS, as a condition to the Trustee entering into the Indenture and the
purchase of the Notes by the Holders, the Company agreed, subject to certain
exceptions, pursuant to Section 4.22 of the Indenture to cause any Restricted
Subsidiary that has guaranteed or secured Indebtedness of the Company or any of
its Restricted Subsidiaries to provide Subsidiary Guarantees.

                                    AGREEMENT

     NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained and intending to be legally bound, the parties hereto hereby
agree as follows:

     Section 1. Capitalized terms used herein and not otherwise defined herein
are used as defined in the Indenture.

     Section 2. Each Undersigned, by its execution of this Supplemental
Indenture, agrees to be a Subsidiary Guarantor under the Indenture and to be
bound by the terms of the Indenture applicable to Subsidiary Guarantors,
including, but not limited to, Article 13 thereof.

     Section 3. This Supplemental Indenture shall be governed by and construed
in accordance with the internal laws of the State of New York.

     Section 4. This Supplemental Indenture may be signed in various
counterparts which together shall constitute one and the same instrument.

     Section 5. This Supplemental Indenture is an amendment supplemental to the
Indenture and said Indenture and this Supplemental Indenture shall henceforth be
read together.

                                      B-2



     IN WITNESS WHEREOF, the parties have duly executed and delivered this
Supplemental Indenture or have caused this Supplemental Indenture to be duly
executed on their respective behalf by their respective officers thereunto duly
authorized, as of the day and year first above written.

                                        LYONDELL CHEMICAL COMPANY


                                        By:  /s/
                                           -------------------------------------


                                        [SUBSIDIARY GUARANTORS]


                                        THE BANK OF NEW YORK,
                                        as Trustee


                                        By:  /s/
                                           -------------------------------------

                                      B-3



                                                                       EXHIBIT C

                   Form of Certificate of Beneficial Ownership

The Bank of New York
101 Barclay Street, Floor 21 West
New York, New York 10286
Attention: Corporate Trust Administration

     Re:      Lyondell Chemical Company
              10 1/2% Senior Secured Notes due 2013 (the "Notes")
              Issued under the Indenture (the "Indenture") dated as
              of May 20, 2003 relating to the Notes

     This is to certify that based solely on certifications we have received in
writing, by tested telex or by electronic transmission from member organizations
("Member Organizations") appearing in our records as persons being entitled to a
portion of the principal amount of Notes represented by Temporary Offshore
Global Note issued under the above-referenced Indenture, that as of the date
hereof, $________ principal amount of Notes represented by the Temporary
Offshore Global Note being submitted herewith for exchange is beneficially owned
by persons who are either (i) non-U.S. persons (within the meaning of Regulation
S under the Securities Act of 1933, as amended) or (ii) U.S. persons who
purchased the Notes in a transaction that did not require registration under the
Securities Act of 1933, as amended. We further certify that (i) we are not
submitting herewith for exchange any portion of such Temporary Offshore Global
Note excepted in such Member Organization certifications and (ii) as of the date
hereof we have not received any notification from any Member Organization to the
effect that the statements made by such Member Organization with respect to any
portion of such Temporary Offshore Global Note submitted herewith for exchange
are no longer true and cannot be relied upon as of the date hereof. Accordingly,
you are hereby requested to (i) exchange $_________ of such beneficial interest
held by non-U.S. persons in the Temporary Offshore Global Note for an equivalent
beneficial interest in a Permanent Offshore Global Note and (ii) transfer
$__________ of such beneficial interest held by U.S. persons in the Temporary
Offshore Global Note into an equivalent beneficial interest in the U.S. Global
Note.

                                      C-1



     You and the Company are entitled to rely upon this Certificate and are
irrevocably authorized to produce this Certificate or a copy hereof to any
interested party in any administrative or legal proceeding or official inquiry
with respect to the matters covered hereby.

                                        Yours faithfully,

                                        [EUROCLEAR  BANK  S.A./N.V., as operator
                                        of  the  Euroclear System]

                                                       OR

                                        [CLEARSTREAM BANK, societe anonyme]


                                        By:  /s/
                                           -------------------------------------

Date:
      --------------------------

                                      C-2



                                                                       EXHIBIT D

                       Form of Certificate to be Delivered
                          in Connection with Transfers
                            Pursuant to Regulation S
                            ------------------------
                                         _______________,______

The Bank of New York
101 Barclay Street, Floor 21 West
New York, New York 10286
Attention: Corporate Trust Administration

     Re:      Lyondell Chemical Company
              10%% Senior Secured Notes due 2013 (the "Notes")

Dear Sirs:

     In connection with our proposed sale of U.S.$_____________ aggregate
principal amount of the Notes, we confirm that such sale has been effected
pursuant to and in accordance with Regulation S under the Securities Act of
1933, as amended, and, accordingly, we represent that:

     (1)  the offer of the Notes was not made to a person in the United States;

     (2)  at the time the buy order was originated, the transferee was outside
the United States or we and any person acting on our behalf reasonably believed
that the transferee was outside the United States;

     (3)  no directed selling efforts have been made by us in the United States
in contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation
S, as applicable; and

     (4)  the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act of 1933.

                                      D-1



     You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Terms used in this certificate have the
meanings set forth in Regulation S.

                                        Very truly yours,

                                        [Name of Transferor]


                                        By:  /s/
                                           -------------------------------------
                                                    Authorized Signatory

                                      D-2



                                                                       EXHIBIT E

                     Form of Accredited Investor Certificate
                       Transferee Letter of Representation

The Bank of New York
101 Barclay Street, Floor 21 West
New York, New York 10286
Attention: Corporate Trust Administration

Ladies and Gentlemen:

     In connection with our proposed purchase of $[ ] aggregate principal amount
of the 10 1/2% Senior Secured Notes due 2013 (the "Notes") of Lyondell Chemical
Company (the "Company"), we confirm that:

     1.  We are an institutional "accredited investor" (as defined in Rule
50l(a)(1), (2), (3) or (7) of Regulation D under the Securities Act of 1933, as
amended (the "Securities Act"), purchasing for our own account or for the
account of such an institutional "accredited investor" as to which we exercise
sole investment discretion, and we have such knowledge and experience in
financial and business matters as to be capable of evaluating the merits and
risks of our investment in the Notes, and we and any account for which we are
acting are each able to bear the economic risk of our or its investment.

     2.  We understand and acknowledge that the Notes have not been registered
under the Securities Act or any other applicable securities law, and that the
Notes may not be offered or sold except as permitted in the following sentence.
We agree, on our own behalf and on behalf of any account for which we are
acting, that if we should sell any Notes within the time period referred to in
Rule l44(k) of the Securities Act, we will do so only (A) to the Company, (B)
pursuant to an effective registration statement under the Securities Act or any
subsidiary thereof, (C) in accordance with Rule 144A under the Securities Act to
a "qualified institutional buyer" (as defined therein), (D) outside the Untied
States in accordance with Rule 904 of Regulation S under the Securities Act, (E)
in a principal amount of not less than $100,000 to an institutional "accredited
investor" (as defined above) that, prior to such transfer, furnishes to the
Trustee under the Indenture a signed letter containing certain representations
and agreements relating to the restrictions on transfer of the Notes (the form
of which letter can be obtained from the Trustee), (F) pursuant to the exemption
from registration provided by Rule 144 under the Securities Act (if available),
or any other exemption from the registration requirements of the Securities Act
and in compliance with the terms of the Indenture (which terms require the
delivery of such opinions and certifications as the Company and the Trustee may
require), and we further agree to provide to any person purchasing any of the
Notes from us a notice advising such purchaser that resales of the Notes are
restricted as stated herein.

     3.  We are acquiring the Notes for investment purposes and not with a view
to distribution thereof or with any present intention of offering or selling any
Notes, except as permitted above.

     You and the Company are entitled to rely upon this letter and you are
irrevocably authorized to produce this letter or a copy hereto to any interested
party in any administrative or legal proceeding or official inquiry with respect
to the matters covered hereby.

                                      E-1



     THIS LETTER SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS
PRINCIPLES THEREOF, OTHER THAN ANY MANDATING THE APPLICATION OF SUCH LAWS).

                                        Very truly yours,

                                       (Name of Purchaser)


                                        By:  /s/
                                           -------------------------------------

                                        Date:
                                              ----------------------------------

     Upon transfer, the Notes would be registered in the name of the new
beneficial owner as follows:

By:
   ------------------------------

Date:
     ----------------------------

Taxpayer ID number:
                   --------------

                                      E-2

EX-5

                                                                       Exhibit 5

                                                                   July 11, 2003

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:

     As set forth in the Registration Statement on Form S-4 (the "Registration
Statement") to be filed by Lyondell Chemical Company, a Delaware corporation
("Lyondell"), Lyondell Chemical 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"), with
the Securities and Exchange Commission (the "Commission") under the Securities
Act of 1933, as amended (the "Act"), relating to the registration under the Act
of (i) $325 million aggregate principal amount of 10 1/2% Senior Secured Notes
due 2013 (the "New Notes") to be offered by Lyondell in exchange (the "Exchange
Offer") for a like principal amount of its issued and outstanding unregistered
10 1/2% Senior Secured Notes due 2013 (the "Outstanding Notes") and (ii) the
related subsidiary guarantees of the New Notes by LCNL, ACTI and ACTLP (the
"Guarantees"), we are passing upon certain legal matters in connection with the
New Notes and the Guarantees for Lyondell, LCNL, ACTI and ACTLP. The New Notes
are to be issued under an Indenture dated as of May 20, 2003 among Lyondell, the
Subsidiary Guarantors party thereto and The Bank of New York, as trustee (the
"Indenture"). At your request, this opinion is being furnished to you for filing
as Exhibit 5 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 Indenture 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



Lyondell Chemical Company
Lyondell Chemical Nederland, Ltd.
ARCO Chemical Technology, Inc.
ARCO Chemical Technology, L.P.
July 11, 2003
Page 2

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 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.

     On the basis of the foregoing, and subject to the assumptions, limitations
and qualifications set forth herein, we are of the opinion that when (i) the
Registration Statement has become effective under the Act and the Indenture has
been qualified under the Trust Indenture Act of 1939, as amended, and (ii) the
New Notes have been duly executed, authenticated and delivered in accordance
with the provisions of the Indenture and issued in exchange for the Outstanding
Notes tendered pursuant to, and in accordance with the terms of, the Exchange
Offer as contemplated by the Registration Statement, (a) the New 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 (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 each of LCNL,
ACTI and ACTLP, enforceable against each of 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 Revised Uniform Limited Partnership Act of the State
of Delaware and the contract law of the State of New York, each as currently in
effect.



Lyondell Chemical Company
Lyondell Chemical Nederland, Ltd.
ARCO Chemical Technology, Inc.
ARCO Chemical Technology, L.P.
July 11, 2003
Page 3

     We hereby consent to the filing of this opinion of counsel as Exhibit 5 to
the Registration Statement and to the reference to our Firm under the heading
"Legal Matters" in the prospectus forming a part of the Registration Statement.
In giving this consent, we do not hereby admit that we are in the category of
persons whose consent is required under Section 7 of the Act or the rules and
regulations of the Commission thereunder.

                                   Very truly yours,

                                   BAKER BOTTS L.L.P.

SAM/ERH

EX-12

                                                                      Exhibit 12

                            LYONDELL CHEMICAL COMPANY
                STATEMENT SETTING FORTH DETAIL FOR COMPUTATION OF
                       RATIO OF EARNINGS TO FIXED CHARGES
                              (Millions of dollars)



                                                                                                                   Three Months
                                                                                                                       Ended
                                                                             Year Ended December 31,                 March 31,
                                                                   --------------------------------------------  -----------------
                                                                     1998     1999     2000     2001     2002      2002     2003
                                                                     ----     ----     ----     ----     ----      ----     ----
                                                                                                       
 Income (loss) from continuing operations before income taxes        $ 89    $(104)   $  693    $(221)   $(191)     $(73)   $(168)
                                                                     ------------------------------------------------------------
 Fixed charges:

      Interest expense, gross                                         385      717       627      495      508       119      141
      Portion of rentals representative of interest                    35       53        46       44       51        10       15
                                                                     ------------------------------------------------------------
         Total fixed charges before capitalized interest              420      770       673      539      559       129      156
      Capitalized interest                                             --       --        --        3       10         2        2
                                                                     ------------------------------------------------------------
         Total fixed charges including capitalized interest           420      770       673      542      569       131      158
                                                                     ------------------------------------------------------------
 Earnings before fixed charges                                       $509    $ 666    $1,366    $ 318    $ 368      $ 56    $ (12)
                                                                     ------------------------------------------------------------
 Ratio of earnings to fixed charges (a)                               1.2       --       2.0       --       --        --       --
                                                                    =============================================================


(a)  Earnings were insufficient to cover fixed charges for the years ended 1999,
     2001 and 2002 and for the three months ended March 31, 2002 and 2003 by
     $104 million, $224 million, $201 million, $75 million and $170 million,
     respectively.

EX-23.1

                                                                    EXHIBIT 23.1

                       CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the incorporation by reference in this Registration
Statement on Form S-4 of Lyondell Chemical Company of the following reports,
which appear in the Lyondell Chemical Company Annual Report on Form 10-K for the
year ended December 31, 2002. We also consent to the reference to us under the
heading "Experts" in such Registration Statement.

   .  Our report dated March 10, 2003 on our audits of the consolidated
      financial statements of Lyondell Chemical Company as of December 31, 2002
      and 2001 and for each of the three years in the period ended December 31,
      2002.

   .  Our report dated March 10, 2003 on our audits of the consolidated
      financial statements of Equistar Chemicals, LP as of December 31, 2002 and
      2001 and for each of the three years in the period ended December 31,
      2002.

   .  Our report dated February 14, 2003 on our audits of the financial
      statements of LYONDELL-CITGO Refining LP as of December 31, 2002 and 2001
      and for each of the three years in the period ended December 31, 2002.


                                                 /s/ PricewaterhouseCoopers LLP


Houston, Texas
July 11, 2003

EX-24.1

                                                                    EXHIBIT 24.1

                            LYONDELL CHEMICAL COMPANY

                                POWER OF ATTORNEY

     WHEREAS, LYONDELL CHEMICAL COMPANY, a Delaware corporation (the "Company"),
intends to file with the U.S. Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Act"), a
Registration Statement on Form S-4, including a prospectus, with such amendment
or amendments thereto, whether pre-effective or post-effective, in each case as
may be necessary or appropriate, together with any and all exhibits and other
documents having relation to said Registration Statement (collectively, the
"Registration Statement"), in connection with the Company's proposal to offer to
issue in exchange for all of its then outstanding 10 1/2% senior secured notes
due 2013 (previously issued under Rule 144A or Regulation S under the Act) up to
a like principal amount of 10 1/2% senior secured notes due 2013 registered
under the Act.

     NOW, THEREFORE, each of the undersigned, in his or her capacity as a
director or officer, or both, as the case may be, of the Company, does hereby
appoint Dan F. Smith, T. Kevin DeNicola, Charles L. Hall and Kerry A. Galvin,
and each of them severally, his or her true and lawful attorneys or attorney
with power to act with or without the others and with full power of substitution
and resubstitution, to execute in his or her name, place and stead, in his or
her capacity as a director or officer or both, as the case may be, of the
Company, the Registration Statement and all instruments necessary or incidental
in connection therewith, with such amendment or amendments thereto in each case
as may be necessary or appropriate, together with any and all exhibits and other
documents relating thereto as said attorneys or any of them shall deem necessary
or incidental in connection therewith, and to file the same or cause the same to
be filed with the Commission. Each of said attorneys shall have full power and
authority to do and perform in the name and on behalf of



each of the undersigned, in any and all capacities, every act whatsoever
necessary or desirable to be done to the premises, as fully and to all intents
and purposes as each of the undersigned might or could do in person, each of the
undersigned hereby ratifying and approving the acts of said attorneys and each
of them.

     IN WITNESS WHEREOF, each of the undersigned has executed this instrument on
this 10th day of July, 2003.




                         Signature                                                    Title
                         ---------                                                    -----
                                                             
/s/ Dan F. Smith                                                 President, Chief Executive Officer and Director
- --------------------------------------------
Dan F. Smith


/s/ T. Kevin DeNicola                                                       Senior Vice President and
- --------------------------------------------                                 Chief Financial Officer
T. Kevin DeNicola


/s/ Charles L. Hall                                                       Vice President, Controller and
- --------------------------------------------                                 Chief Accounting Officer
Charles L. Hall


/s/ William T. Butler                                            Chairman of the Board of Directors and Director
- --------------------------------------------
Dr. William T. Butler


/s/ Carol A. Anderson                                                                Director
- --------------------------------------------
Carol A. Anderson


/s/ Stephen I. Chazen                                                                Director
- --------------------------------------------
Stephen I. Chazen


/s/ Travis Engen                                                                     Director
- --------------------------------------------
Travis Engen








                         Signature                                                    Title
                         ---------                                                    -----
                                                             
/s/ Ray R. Irani                                                                     Director
- --------------------------------------------
Dr. Ray R. Irani


/s/ David J. Lesar                                                                   Director
- --------------------------------------------
David J. Lesar


/s/ Stephen F. Hinchliffe, Jr.                                                       Director
- --------------------------------------------
Stephen F. Hinchliffe, Jr.


/s/ Dudley C. Mecum                                                                  Director
- --------------------------------------------
Dudley C. Mecum


/s/ William R. Spivey                                                                Director
- --------------------------------------------
Dr. William R. Spivey

EX-24.2

                                                                    EXHIBIT 24.2

                          ARCO CHEMICAL TECHNOLOGY, LP

                                POWER OF ATTORNEY

     WHEREAS, ARCO CHEMICAL TECHNOLOGY, LP, a Delaware limited partnership (the
"Company"), a wholly owned subsidiary of Lyondell Chemical Company ("Lyondell"),
intends to file with the U.S. Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Act"), a
Registration Statement on Form S-4, including one or more prospectuses, with
such amendment or amendments thereto, whether pre-effective or post-effective,
in each case as may be necessary or appropriate, together with any and all
exhibits and other documents having relation to said Registration Statement
(collectively, the "Registration Statement"), in connection with Lyondell's
offer to exchange its 10 1/2% Senior Secured Notes due 2013 registered under the
Act pursuant to the Registration Statement for a like principal amount of its
outstanding unregistered 10 1/2% Senior Secured Notes due 2013 previously issued
under Rule 144A or Regulation S under the Act.

     NOW, THEREFORE, the undersigned, in his or her capacity as a director or
officer, or both, as the case may be, of ARCO Chemical Technology Management,
Inc., the general partner of the Company, does hereby appoint Kerry A. Galvin
and T. Kevin DeNicola and each of them severally, his or her true and lawful
attorneys or attorney with power to act with or without the others and with full
power of substitution and resubstitution, to execute in his or her name, place
and stead, in his or her capacity as a director or officer or both, as the case
may be, of ARCO Chemical Technology Management, Inc., the general partner of the
Company, the Registration Statement and all instruments necessary or incidental
in connection therewith, with such amendment or amendments thereto in each case
as may be necessary or appropriate, together with any and all exhibits and other
documents relating thereto as said attorneys or any of them shall deem necessary
or incidental in connection therewith, and to file the same or cause the same to
be filed with the Commission. Each of said attorneys shall have full power and
authority to do and perform in the name and on behalf of the undersigned, in any
and all capacities, every act whatsoever necessary or desirable to be done to
the premises, as fully and to all intents and purposes as the undersigned might
or could do in person, the undersigned hereby ratifying and approving the acts
of said attorneys and each of them.

     IN WITNESS WHEREOF, the undersigned has executed this instrument on this
1st day of July, 2003.




                                            /s/ Francis P. McGrail
                                            ------------------------------------
                                            FRANCIS P. MCGRAIL
                                            DIRECTOR, PRESIDENT, TREASURER




                          ARCO CHEMICAL TECHNOLOGY, LP

                                POWER OF ATTORNEY

     WHEREAS, ARCO CHEMICAL TECHNOLOGY, LP, a Delaware limited partnership (the
"Company"), an indirect wholly owned subsidiary of Lyondell Chemical Company
("Lyondell"), intends to file with the U.S. Securities and Exchange Commission
(the "Commission") under the Securities Act of 1933, as amended (the "Act"), a
Registration Statement on Form S-4, including one or more prospectuses, with
such amendment or amendments thereto, whether pre-effective or post-effective,
in each case as may be necessary or appropriate, together with any and all
exhibits and other documents having relation to said Registration Statement
(collectively, the "Registration Statement"), in connection with Lyondell's
offer to exchange its 10 1/2% Senior Secured Notes due 2013 registered under the
Act pursuant to the Registration Statement for a like principal amount of its
outstanding unregistered 10 1/2% Senior Secured Notes due 2013 previously issued
under Rule 144A or Regulation S under the Act.

     NOW, THEREFORE, the undersigned, in his or her capacity as a director or
officer, or both, as the case may be, of ARCO Chemical Technology Management,
Inc., the general partner of the Company, does hereby appoint Kerry A. Galvin
and T. Kevin DeNicola and each of them severally, his or her true and lawful
attorneys or attorney with power to act with or without the others and with full
power of substitution and resubstitution, to execute in his or her name, place
and stead, in his or her capacity as a director or officer or both, as the case
may be, of ARCO Chemical Technology Management, Inc., the general partner of the
Company, the Registration Statement and all instruments necessary or incidental
in connection therewith, with such amendment or amendments thereto in each case
as may be necessary or appropriate, together with any and all exhibits and other
documents relating thereto as said attorneys or any of them shall deem necessary
or incidental in connection therewith, and to file the same or cause the same to
be filed with the Commission. Each of said attorneys shall have full power and
authority to do and perform in the name and on behalf of the undersigned, in any
and all capacities, every act whatsoever necessary or desirable to be done to
the premises, as fully and to all intents and purposes as the undersigned might
or could do in person, the undersigned hereby ratifying and approving the acts
of said attorneys and each of them.

     IN WITNESS WHEREOF, the undersigned has executed this instrument on this
1st day of July, 2003.




                                     /s/ Eva Chu
                                     -------------------------------------------
                                     EVA CHU
                                     DIRECTOR




                          ARCO CHEMICAL TECHNOLOGY, LP

                                POWER OF ATTORNEY

     WHEREAS, ARCO CHEMICAL TECHNOLOGY, LP, a Delaware limited partnership (the
"Company"), an indirect wholly owned subsidiary of Lyondell Chemical Company
("Lyondell"), intends to file with the U.S. Securities and Exchange Commission
(the "Commission") under the Securities Act of 1933, as amended (the "Act"), a
Registration Statement on Form S-4, including one or more prospectuses, with
such amendment or amendments thereto, whether pre-effective or post-effective,
in each case as may be necessary or appropriate, together with any and all
exhibits and other documents having relation to said Registration Statement
(collectively, the "Registration Statement"), in connection with Lyondell's
offer to exchange its 10 1/2% Senior Secured Notes due 2013 registered under the
Act pursuant to the Registration Statement for a like principal amount of its
outstanding unregistered 10 1/2% Senior Secured Notes due 2013 previously issued
under Rule 144A or Regulation S under the Act

     NOW, THEREFORE, the undersigned, in his or her capacity as a director or
officer, or both, as the case may be, of ARCO Chemical Technology Management,
Inc., the general partner of the Company, does hereby appoint Kerry A. Galvin
and T. Kevin DeNicola and each of them severally, his or her true and lawful
attorneys or attorney with power to act with or without the others and with full
power of substitution and resubstitution, to execute in his or her name, place
and stead, in his or her capacity as a director or officer or both, as the case
may be, of ARCO Chemical Technology Management, Inc., the general partner of the
Company, the Registration Statement and all instruments necessary or incidental
in connection therewith, with such amendment or amendments thereto in each case
as may be necessary or appropriate, together with any and all exhibits and other
documents relating thereto as said attorneys or any of them shall deem necessary
or incidental in connection therewith, and to file the same or cause the same to
be filed with the Commission. Each of said attorneys shall have full power and
authority to do and perform in the name and on behalf of the undersigned, in any
and all capacities, every act whatsoever necessary or desirable to be done to
the premises, as fully and to all intents and purposes as the undersigned might
or could do in person, the undersigned hereby ratifying and approving the acts
of said attorneys and each of them.

     IN WITNESS WHEREOF, the undersigned has executed this instrument on this
1st day of July, 2003.




                                    /s/ Laura C. Fulton
                                    --------------------------------------------
                                    LAURA C. FULTON
                                    DIRECTOR



                          ARCO CHEMICAL TECHNOLOGY, LP

                                POWER OF ATTORNEY

     WHEREAS, ARCO CHEMICAL TECHNOLOGY, LP, a Delaware limited partnership (the
"Company"), an indirect wholly owned subsidiary of Lyondell Chemical Company
("Lyondell"), intends to file with the U.S. Securities and Exchange Commission
(the "Commission") under the Securities Act of 1933, as amended (the "Act"), a
Registration Statement on Form S-4, including one or more prospectuses, with
such amendment or amendments thereto, whether pre-effective or post-effective,
in each case as may be necessary or appropriate, together with any and all
exhibits and other documents having relation to said Registration Statement
(collectively, the "Registration Statement"), in connection with Lyondell's
offer to exchange its 10 1/2% Senior Secured Notes due 2013 registered under the
Act pursuant to the Registration Statement for a like principal amount of its
outstanding unregistered 10 1/2% Senior Secured Notes due 2013 previously issued
under Rule 144A or Regulation S under the Act

     NOW, THEREFORE, the undersigned, in his or her capacity as a director or
officer, or both, as the case may be, of ARCO Chemical Technology Management,
Inc., the general partner of the Company, does hereby appoint Kerry A. Galvin
and T. Kevin DeNicola and each of them severally, his or her true and lawful
attorneys or attorney with power to act with or without the others and with full
power of substitution and resubstitution, to execute in his or her name, place
and stead, in his or her capacity as a director or officer or both, as the case
may be, of ARCO Chemical Technology Management, Inc., the general partner of the
Company, the Registration Statement and all instruments necessary or incidental
in connection therewith, with such amendment or amendments thereto in each case
as may be necessary or appropriate, together with any and all exhibits and other
documents relating thereto as said attorneys or any of them shall deem necessary
or incidental in connection therewith, and to file the same or cause the same to
be filed with the Commission. Each of said attorneys shall have full power and
authority to do and perform in the name and on behalf of the undersigned, in any
and all capacities, every act whatsoever necessary or desirable to be done to
the premises, as fully and to all intents and purposes as the undersigned might
or could do in person, the undersigned hereby ratifying and approving the acts
of said attorneys and each of them.

     IN WITNESS WHEREOF, the undersigned has executed this instrument on this
1st day of July, 2003.


                                    /s/ Charles L. Hall
                                    --------------------------------------------
                                    CHARLES L. HALL
                                    DIRECTOR



                          ARCO CHEMICAL TECHNOLOGY, LP

                                POWER OF ATTORNEY

     WHEREAS, ARCO CHEMICAL TECHNOLOGY, LP, a Delaware limited partnership (the
"Company"), an indirect wholly owned subsidiary of Lyondell Chemical Company
("Lyondell"), intends to file with the U.S. Securities and Exchange Commission
(the "Commission") under the Securities Act of 1933, as amended (the "Act"), a
Registration Statement on Form S-4, including one or more prospectuses, with
such amendment or amendments thereto, whether pre-effective or post-effective,
in each case as may be necessary or appropriate, together with any and all
exhibits and other documents having relation to said Registration Statement
(collectively, the "Registration Statement"), in connection with Lyondell's
offer to exchange its 10 1/2% Senior Secured Notes due 2013 registered under the
Act pursuant to the Registration Statement for a like principal amount of its
outstanding unregistered 10 1/2% Senior Secured Notes due 2013 previously issued
under Rule 144A or Regulation S under the Act

     NOW, THEREFORE, the undersigned, in his or her capacity as a director or
officer, or both, as the case may be, of ARCO Chemical Technology Management,
Inc., the general partner of the Company, does hereby appoint Kerry A. Galvin
and T. Kevin DeNicola and each of them severally, his or her true and lawful
attorneys or attorney with power to act with or without the others and with full
power of substitution and resubstitution, to execute in his or her name, place
and stead, in his or her capacity as a director or officer or both, as the case
may be, of ARCO Chemical Technology Management, Inc., the general partner of the
Company, the Registration Statement and all instruments necessary or incidental
in connection therewith, with such amendment or amendments thereto in each case
as may be necessary or appropriate, together with any and all exhibits and other
documents relating thereto as said attorneys or any of them shall deem necessary
or incidental in connection therewith, and to file the same or cause the same to
be filed with the Commission. Each of said attorneys shall have full power and
authority to do and perform in the name and on behalf of the undersigned, in any
and all capacities, every act whatsoever necessary or desirable to be done to
the premises, as fully and to all intents and purposes as the undersigned might
or could do in person, the undersigned hereby ratifying and approving the acts
of said attorneys and each of them.

     IN WITNESS WHEREOF, the undersigned has executed this instrument on this
1st day of July, 2003.



                                    /s/ David J. Prilutski
                                    --------------------------------------------
                                    DAVID J. PRILUTSKI
                                    DIRECTOR

EX-24.3

                                                                    EXHIBIT 24.3

                        LYONDELL CHEMICAL NEDERLAND, LTD.

                                POWER OF ATTORNEY

     WHEREAS, LYONDELL CHEMICAL NEDERLAND, LTD., a Delaware corporation (the
"Company"), a wholly owned subsidiary of Lyondell Chemical Company ("Lyondell"),
intends to file with the U.S. Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Act"), a
Registration Statement on Form S-4, including one or more prospectuses, with
such amendment or amendments thereto, whether pre-effective or post-effective,
in each case as may be necessary or appropriate, together with any and all
exhibits and other documents having relation to said Registration Statement
(collectively, the "Registration Statement"), in connection with Lyondell's
offer to exchange its 10 1/2% Senior Secured Notes due 2013 registered under the
Act pursuant to the Registration Statement for a like principal amount of its
outstanding unregistered 10 1/2% Senior Secured Notes due 2013 previously issued
under Rule 144A or Regulation S under the Act.

     NOW, THEREFORE, the undersigned, in his or her capacity as a director or
officer, or both, as the case may be, of the Company, does hereby appoint Kerry
A. Galvin and T. Kevin DeNicola and each of them severally, his or her true and
lawful attorneys or attorney with power to act with or without the others and
with full power of substitution and resubstitution, to execute in his or her
name, place and stead, in his or her capacity as a director or officer or both,
as the case may be, of the Company, the Registration Statement and all
instruments necessary or incidental in connection therewith, with such amendment
or amendments thereto in each case as may be necessary or appropriate, together
with any and all exhibits and other documents relating thereto as said attorneys
or any of them shall deem necessary or incidental in connection therewith, and
to file the same or cause the same to be filed with the Commission. Each of said
attorneys shall have full power and authority to do and perform in the name and
on behalf of the undersigned, in any and all capacities, every act whatsoever
necessary or desirable to be done to the premises, as fully and to all intents
and purposes as the undersigned might or could do in person, the undersigned
hereby ratifying and approving the acts of said attorneys and each of them.

     IN WITNESS WHEREOF, the undersigned has executed this instrument on this
1st day of July, 2003.




                                    /s/ Francis P. McGrail
                                    --------------------------------------------
                                    FRANCIS P. MCGRAIL
                                    DIRECTOR




                        LYONDELL CHEMICAL NEDERLAND, LTD.

                                POWER OF ATTORNEY

     WHEREAS, LYONDELL CHEMICAL NEDERLAND, LTD., a Delaware corporation (the
"Company"), a wholly owned subsidiary of Lyondell Chemical Company ("Lyondell"),
intends to file with the U.S. Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Act"), a
Registration Statement on Form S-4, including one or more prospectuses, with
such amendment or amendments thereto, whether pre-effective or post-effective,
in each case as may be necessary or appropriate, together with any and all
exhibits and other documents having relation to said Registration Statement
(collectively, the "Registration Statement"), in connection with Lyondell's
offer to exchange its 10 1/2% Senior Secured Notes due 2013 registered under the
Act pursuant to the Registration Statement for a like principal amount of its
outstanding unregistered 10 1/2% Senior Secured Notes due 2013 previously issued
under Rule 144A or Regulation S under the Act.

     NOW, THEREFORE, the undersigned, in his or her capacity as a director or
officer, or both, as the case may be, of the Company, does hereby appoint Kerry
A. Galvin and T. Kevin DeNicola and each of them severally, his or her true and
lawful attorneys or attorney with power to act with or without the others and
with full power of substitution and resubstitution, to execute in his or her
name, place and stead, in his or her capacity as a director or officer or both,
as the case may be, of the Company, the Registration Statement and all
instruments necessary or incidental in connection therewith, with such amendment
or amendments thereto in each case as may be necessary or appropriate, together
with any and all exhibits and other documents relating thereto as said attorneys
or any of them shall deem necessary or incidental in connection therewith, and
to file the same or cause the same to be filed with the Commission. Each of said
attorneys shall have full power and authority to do and perform in the name and
on behalf of the undersigned, in any and all capacities, every act whatsoever
necessary or desirable to be done to the premises, as fully and to all intents
and purposes as the undersigned might or could do in person, the undersigned
hereby ratifying and approving the acts of said attorneys and each of them.

     IN WITNESS WHEREOF, the undersigned has executed this instrument on this
1st day of July, 2003.



                                    /s/ Charles L. Hall
                                    --------------------------------------------
                                    CHARLES L. HALL
                                    DIRECTOR




                        LYONDELL CHEMICAL NEDERLAND, LTD.

                                POWER OF ATTORNEY

     WHEREAS, LYONDELL CHEMICAL NEDERLAND, LTD., a Delaware corporation (the
"Company"), a wholly owned subsidiary of Lyondell Chemical Company ("Lyondell"),
intends to file with the U.S. Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Act"), a
Registration Statement on Form S-4, including one or more prospectuses, with
such amendment or amendments thereto, whether pre-effective or post-effective,
in each case as may be necessary or appropriate, together with any and all
exhibits and other documents having relation to said Registration Statement
(collectively, the "Registration Statement"), in connection with Lyondell's
offer to exchange its 10 1/2% Senior Secured Notes due 2013 registered under the
Act pursuant to the Registration Statement for a like principal amount of its
outstanding unregistered 10 1/2% Senior Secured Notes due 2013 previously issued
under Rule 144A or Regulation S under the Act.

     NOW, THEREFORE, the undersigned, in his or her capacity as a director or
officer, or both, as the case may be, of the Company, does hereby appoint Kerry
A. Galvin and T. Kevin DeNicola and each of them severally, his or her true and
lawful attorneys or attorney with power to act with or without the others and
with full power of substitution and resubstitution, to execute in his or her
name, place and stead, in his or her capacity as a director or officer or both,
as the case may be, of the Company, the Registration Statement and all
instruments necessary or incidental in connection therewith, with such amendment
or amendments thereto in each case as may be necessary or appropriate, together
with any and all exhibits and other documents relating thereto as said attorneys
or any of them shall deem necessary or incidental in connection therewith, and
to file the same or cause the same to be filed with the Commission. Each of said
attorneys shall have full power and authority to do and perform in the name and
on behalf of the undersigned, in any and all capacities, every act whatsoever
necessary or desirable to be done to the premises, as fully and to all intents
and purposes as the undersigned might or could do in person, the undersigned
hereby ratifying and approving the acts of said attorneys and each of them.

     IN WITNESS WHEREOF, the undersigned has executed this instrument on this
1st day of July, 2003.






                                    /s/ Laura C. Fulton
                                    --------------------------------------------
                                    LAURA C. FULTON
                                    DIRECTOR



                        LYONDELL CHEMICAL NEDERLAND, LTD.

                                POWER OF ATTORNEY

     WHEREAS, LYONDELL CHEMICAL NEDERLAND, LTD., a Delaware corporation (the
"Company"), a wholly owned subsidiary of Lyondell Chemical Company ("Lyondell"),
intends to file with the U.S. Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Act"), a
Registration Statement on Form S-4, including one or more prospectuses, with
such amendment or amendments thereto, whether pre-effective or post-effective,
in each case as may be necessary or appropriate, together with any and all
exhibits and other documents having relation to said Registration Statement
(collectively, the "Registration Statement"), in connection with Lyondell's
offer to exchange its 10 1/2% Senior Secured Notes due 2013 registered under the
Act pursuant to the Registration Statement for a like principal amount of its
outstanding unregistered 10 1/2% Senior Secured Notes due 2013 previously issued
under Rule 144A or Regulation S under the Act.

     NOW, THEREFORE, the undersigned, in his or her capacity as a director or
officer, or both, as the case may be, of the Company, does hereby appoint Kerry
A. Galvin and T. Kevin DeNicola and each of them severally, his or her true and
lawful attorneys or attorney with power to act with or without the others and
with full power of substitution and resubstitution, to execute in his or her
name, place and stead, in his or her capacity as a director or officer or both,
as the case may be, of the Company, the Registration Statement and all
instruments necessary or incidental in connection therewith, with such amendment
or amendments thereto in each case as may be necessary or appropriate, together
with any and all exhibits and other documents relating thereto as said attorneys
or any of them shall deem necessary or incidental in connection therewith, and
to file the same or cause the same to be filed with the Commission. Each of said
attorneys shall have full power and authority to do and perform in the name and
on behalf of the undersigned, in any and all capacities, every act whatsoever
necessary or desirable to be done to the premises, as fully and to all intents
and purposes as the undersigned might or could do in person, the undersigned
hereby ratifying and approving the acts of said attorneys and each of them.

     IN WITNESS WHEREOF, the undersigned has executed this instrument on this
1st day of July, 2003.



                                    /s/ Karen A. Twitchell
                                    --------------------------------------------
                                    KAREN A. TWITCHELL
                                    TREASURER




                        LYONDELL CHEMICAL NEDERLAND, LTD.

                                POWER OF ATTORNEY

     WHEREAS, LYONDELL CHEMICAL NEDERLAND, LTD., a Delaware corporation (the
"Company"), a wholly owned subsidiary of Lyondell Chemical Company ("Lyondell"),
intends to file with the U.S. Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Act"), a
Registration Statement on Form S-4, including one or more prospectuses, with
such amendment or amendments thereto, whether pre-effective or post-effective,
in each case as may be necessary or appropriate, together with any and all
exhibits and other documents having relation to said Registration Statement
(collectively, the "Registration Statement"), in connection with Lyondell's
offer to exchange its 10 1/2% Senior Secured Notes due 2013 registered under the
Act pursuant to the Registration Statement for a like principal amount of its
outstanding unregistered 10 1/2% Senior Secured Notes due 2013 previously issued
under Rule 144A or Regulation S under the Act.

     NOW, THEREFORE, the undersigned, in his or her capacity as a director or
officer, or both, as the case may be, of the Company, does hereby appoint Kerry
A. Galvin and T. Kevin DeNicola and each of them severally, his or her true and
lawful attorneys or attorney with power to act with or without the others and
with full power of substitution and resubstitution, to execute in his or her
name, place and stead, in his or her capacity as a director or officer or both,
as the case may be, of the Company, the Registration Statement and all
instruments necessary or incidental in connection therewith, with such amendment
or amendments thereto in each case as may be necessary or appropriate, together
with any and all exhibits and other documents relating thereto as said attorneys
or any of them shall deem necessary or incidental in connection therewith, and
to file the same or cause the same to be filed with the Commission. Each of said
attorneys shall have full power and authority to do and perform in the name and
on behalf of the undersigned, in any and all capacities, every act whatsoever
necessary or desirable to be done to the premises, as fully and to all intents
and purposes as the undersigned might or could do in person, the undersigned
hereby ratifying and approving the acts of said attorneys and each of them.

     IN WITNESS WHEREOF, the undersigned has executed this instrument on this
1st day of July, 2003.



                                    /s/ Morris Gelb
                                    --------------------------------------------
                                    MORRIS GELB
                                    PRESIDENT

EX-24.4

                                                                    EXHIBIT 24.4

                         ARCO CHEMICAL TECHNOLOGY, INC.

                                POWER OF ATTORNEY

     WHEREAS, ARCO CHEMICAL TECHNOLOGY, INC., a Delaware corporation (the
"Company"), a wholly owned subsidiary of Lyondell Chemical Company ("Lyondell"),
intends to file with the U.S. Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Act"), a
Registration Statement on Form S-4, including one or more prospectuses, with
such amendment or amendments thereto, whether pre-effective or post-effective,
in each case as may be necessary or appropriate, together with any and all
exhibits and other documents having relation to said Registration Statement
(collectively, the "Registration Statement"), in connection with Lyondell's
offer to exchange its 10 1/2% Senior Secured Notes due 2013 registered under the
Act pursuant to the Registration Statement for a like principal amount of its
outstanding unregistered 10 1/2% Senior Secured Notes due 2013 previously issued
under Rule 144A or Regulation S under the Act.

     NOW, THEREFORE, the undersigned, in his or her capacity as a director or
officer, or both, as the case may be, of the Company, does hereby appoint Kerry
A. Galvin and T. Kevin DeNicola and each of them severally, his or her true and
lawful attorneys or attorney with power to act with or without the others and
with full power of substitution and resubstitution, to execute in his or her
name, place and stead, in his or her capacity as a director or officer or both,
as the case may be, of the Company, the Registration Statement and all
instruments necessary or incidental in connection therewith, with such amendment
or amendments thereto in each case as may be necessary or appropriate, together
with any and all exhibits and other documents relating thereto as said attorneys
or any of them shall deem necessary or incidental in connection therewith, and
to file the same or cause the same to be filed with the Commission. Each of said
attorneys shall have full power and authority to do and perform in the name and
on behalf of the undersigned, in any and all capacities, every act whatsoever
necessary or desirable to be done to the premises, as fully and to all intents
and purposes as the undersigned might or could do in person, the undersigned
hereby ratifying and approving the acts of said attorneys and each of them.

     IN WITNESS WHEREOF, the undersigned has executed this instrument on this
1st day of July, 2003.




                                              /s/ Francis P. McGrail
                                              ----------------------------------
                                              FRANCIS P. MCGRAIL
                                              PRESIDENT, TREASURER



                         ARCO CHEMICAL TECHNOLOGY, INC.

                                POWER OF ATTORNEY

     WHEREAS, ARCO CHEMICAL TECHNOLOGY, INC., a Delaware corporation (the
"Company"), a wholly owned subsidiary of Lyondell Chemical Company ("Lyondell"),
intends to file with the U.S. Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Act"), a
Registration Statement on Form S-4, including one or more prospectuses, with
such amendment or amendments thereto, whether pre-effective or post-effective,
in each case as may be necessary or appropriate, together with any and all
exhibits and other documents having relation to said Registration Statement
(collectively, the "Registration Statement"), in connection with Lyondell's
offer to exchange its 10 1/2% Senior Secured Notes due 2013 registered under the
Act pursuant to the Registration Statement for a like principal amount of its
outstanding unregistered 10 1/2% Senior Secured Notes due 2013 previously issued
under Rule 144A or Regulation S under the Act.

     NOW, THEREFORE, the undersigned, in his or her capacity as a director or
officer, or both, as the case may be, of the Company, does hereby appoint Kerry
A. Galvin and T. Kevin DeNicola and each of them severally, his or her true and
lawful attorneys or attorney with power to act with or without the others and
with full power of substitution and resubstitution, to execute in his or her
name, place and stead, in his or her capacity as a director or officer or both,
as the case may be, of the Company, the Registration Statement and all
instruments necessary or incidental in connection therewith, with such amendment
or amendments thereto in each case as may be necessary or appropriate, together
with any and all exhibits and other documents relating thereto as said attorneys
or any of them shall deem necessary or incidental in connection therewith, and
to file the same or cause the same to be filed with the Commission. Each of said
attorneys shall have full power and authority to do and perform in the name and
on behalf of the undersigned, in any and all capacities, every act whatsoever
necessary or desirable to be done to the premises, as fully and to all intents
and purposes as the undersigned might or could do in person, the undersigned
hereby ratifying and approving the acts of said attorneys and each of them.

     IN WITNESS WHEREOF, the undersigned has executed this instrument on this
1st day of July, 2003.




                                    /s/ Eva Chu
                                    --------------------------------------------
                                    EVA CHU
                                    DIRECTOR



                         ARCO CHEMICAL TECHNOLOGY, INC.

                                POWER OF ATTORNEY

     WHEREAS, ARCO CHEMICAL TECHNOLOGY, INC., a Delaware corporation (the
"Company"), a wholly owned subsidiary of Lyondell Chemical Company ("Lyondell"),
intends to file with the U.S. Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Act"), a
Registration Statement on Form S-4, including one or more prospectuses, with
such amendment or amendments thereto, whether pre-effective or post-effective,
in each case as may be necessary or appropriate, together with any and all
exhibits and other documents having relation to said Registration Statement
(collectively, the "Registration Statement"), in connection with Lyondell's
offer to exchange its 10 1/2% Senior Secured Notes due 2013 registered under the
Act pursuant to the Registration Statement for a like principal amount of its
outstanding unregistered 10 1/2% Senior Secured Notes due 2013 previously issued
under Rule 144A or Regulation S under the Act.

     NOW, THEREFORE, the undersigned, in his or her capacity as a director or
officer, or both, as the case may be, of the Company, does hereby appoint Kerry
A. Galvin and T. Kevin DeNicola and each of them severally, his or her true and
lawful attorneys or attorney with power to act with or without the others and
with full power of substitution and resubstitution, to execute in his or her
name, place and stead, in his or her capacity as a director or officer or both,
as the case may be, of the Company, the Registration Statement and all
instruments necessary or incidental in connection therewith, with such amendment
or amendments thereto in each case as may be necessary or appropriate, together
with any and all exhibits and other documents relating thereto as said attorneys
or any of them shall deem necessary or incidental in connection therewith, and
to file the same or cause the same to be filed with the Commission. Each of said
attorneys shall have full power and authority to do and perform in the name and
on behalf of the undersigned, in any and all capacities, every act whatsoever
necessary or desirable to be done to the premises, as fully and to all intents
and purposes as the undersigned might or could do in person, the undersigned
hereby ratifying and approving the acts of said attorneys and each of them.

     IN WITNESS WHEREOF, the undersigned has executed this instrument on this
1st day of July, 2003.




                                    /s/ Laura C. Fulton
                                    --------------------------------------------
                                    LAURA C. FULTON
                                    DIRECTOR



                         ARCO CHEMICAL TECHNOLOGY, INC.

                                POWER OF ATTORNEY

     WHEREAS, ARCO CHEMICAL TECHNOLOGY, INC., a Delaware corporation (the
"Company"), a wholly owned subsidiary of Lyondell Chemical Company ("Lyondell"),
intends to file with the U.S. Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Act"), a
Registration Statement on Form S-4, including one or more prospectuses, with
such amendment or amendments thereto, whether pre-effective or post-effective,
in each case as may be necessary or appropriate, together with any and all
exhibits and other documents having relation to said Registration Statement
(collectively, the "Registration Statement"), in connection with Lyondell's
offer to exchange its 10 1/2% Senior Secured Notes due 2013 registered under the
Act pursuant to the Registration Statement for a like principal amount of its
outstanding unregistered 10 1/2% Senior Secured Notes due 2013 previously issued
under Rule 144A or Regulation S under the Act.

     NOW, THEREFORE, the undersigned, in his or her capacity as a director or
officer, or both, as the case may be, of the Company, does hereby appoint Kerry
A. Galvin and T. Kevin DeNicola and each of them severally, his or her true and
lawful attorneys or attorney with power to act with or without the others and
with full power of substitution and resubstitution, to execute in his or her
name, place and stead, in his or her capacity as a director or officer or both,
as the case may be, of the Company, the Registration Statement and all
instruments necessary or incidental in connection therewith, with such amendment
or amendments thereto in each case as may be necessary or appropriate, together
with any and all exhibits and other documents relating thereto as said attorneys
or any of them shall deem necessary or incidental in connection therewith, and
to file the same or cause the same to be filed with the Commission. Each of said
attorneys shall have full power and authority to do and perform in the name and
on behalf of the undersigned, in any and all capacities, every act whatsoever
necessary or desirable to be done to the premises, as fully and to all intents
and purposes as the undersigned might or could do in person, the undersigned
hereby ratifying and approving the acts of said attorneys and each of them.

     IN WITNESS WHEREOF, the undersigned has executed this instrument on this
1st day of July, 2003.




                                    /s/ Charles L. Hall
                                    --------------------------------------------
                                    CHARLES L. HALL
                                    DIRECTOR



                         ARCO CHEMICAL TECHNOLOGY, INC.

                                POWER OF ATTORNEY

     WHEREAS, ARCO CHEMICAL TECHNOLOGY, INC., a Delaware corporation (the
"Company"), a wholly owned subsidiary of Lyondell Chemical Company ("Lyondell"),
intends to file with the U.S. Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Act"), a
Registration Statement on Form S-4, including one or more prospectuses, with
such amendment or amendments thereto, whether pre-effective or post-effective,
in each case as may be necessary or appropriate, together with any and all
exhibits and other documents having relation to said Registration Statement
(collectively, the "Registration Statement"), in connection with Lyondell's
offer to exchange its 10 1/2% Senior Secured Notes due 2013 registered under the
Act pursuant to the Registration Statement for a like principal amount of its
outstanding unregistered 10 1/2% Senior Secured Notes due 2013 previously issued
under Rule 144A or Regulation S under the Act.

     NOW, THEREFORE, the undersigned, in his or her capacity as a director or
officer, or both, as the case may be, of the Company, does hereby appoint Kerry
A. Galvin and T. Kevin DeNicola and each of them severally, his or her true and
lawful attorneys or attorney with power to act with or without the others and
with full power of substitution and resubstitution, to execute in his or her
name, place and stead, in his or her capacity as a director or officer or both,
as the case may be, of the Company, the Registration Statement and all
instruments necessary or incidental in connection therewith, with such amendment
or amendments thereto in each case as may be necessary or appropriate, together
with any and all exhibits and other documents relating thereto as said attorneys
or any of them shall deem necessary or incidental in connection therewith, and
to file the same or cause the same to be filed with the Commission. Each of said
attorneys shall have full power and authority to do and perform in the name and
on behalf of the undersigned, in any and all capacities, every act whatsoever
necessary or desirable to be done to the premises, as fully and to all intents
and purposes as the undersigned might or could do in person, the undersigned
hereby ratifying and approving the acts of said attorneys and each of them.

     IN WITNESS WHEREOF, the undersigned has executed this instrument on this
1st day of July, 2003.




                                            /s/ David J. Prilutski
                                            ------------------------------------
                                            DAVID J. PRILUTSKI
                                            DIRECTOR

EX-25

                                                                      EXHIBIT 25

========================================================================
                                    FORM T-1

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                            STATEMENT OF ELIGIBILITY
                   UNDER THE TRUST INDENTURE ACT OF 1939 OF A
                    CORPORATION DESIGNATED TO ACT AS TRUSTEE

                      CHECK IF AN APPLICATION TO DETERMINE
                      ELIGIBILITY OF A TRUSTEE PURSUANT TO
                             SECTION 305(b)(2) [__]

                              THE BANK OF NEW YORK
               (Exact name of trustee as specified in its charter)

New York                                                  13-5160382
(State of incorporation                                   (I.R.S. employer
if not a U.S. national bank)                              identification no.)

One Wall Street, New York, N.Y.                           10286
(Address of principal executive offices)                  (Zip code)


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


Delaware                                                   95-4160558
(State or other jurisdiction of                            (I.R.S. employer
incorporation or organization)                             identification no.)


                        LYONDELL CHEMICAL NEDERLAND, LTD.
               (Exact name of obligor as specified in its charter)


Delaware                                                  51-0110124
(State or other jurisdiction of                           (I.R.S. employer
incorporation or organization)                            identification no.)


                         ARCO CHEMICAL TECHNOLOGY, INC.
               (Exact name of obligor as specified in its charter)


Delaware                                                     94-2400836
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)



                         ARCO CHEMICAL TECHNOLOGY, L.P.
               (Exact name of obligor as specified in its charter)


Delaware                                                 54-1613415
(State or other jurisdiction of                          (I.R.S. employer
incorporation or organization)                           identification no.)


1221 McKinney Street, Suite 700
Houston, Texas                                           77010
(Address of principal executive offices)                 (Zip code)

                                  -------------

                      10-1/2% Senior Secured Notes due 2013
                       (Title of the indenture securities)

========================================================================

                                       -2-



1.     General information. Furnish the following information as to the Trustee:

    (a) Name and address of each examining or supervising authority to which it
is subject.

- --------------------------------------------------------------------------------
       Name                                                Address
- --------------------------------------------------------------------------------

    Superintendent of Banks of the            2 Rector Street, New York,
    State of New York                         N.Y. 10006, and Albany, N.Y. 12203

    Federal Reserve Bank of New York          33 Liberty Plaza, New York,
                                              N.Y. 10045

    Federal Deposit Insurance Corporation     Washington, D.C. 20429

    New York Clearing House Association       New York, New York 10005

    (b) Whether it is authorized to exercise corporate trust powers.

    Yes.

2.  Affiliations with Obligor.

    If the obligor is an affiliate of the trustee, describe each such
    affiliation.

    None.

16. List of Exhibits.

    Exhibits identified in parentheses below, on file with the Commission, are
    incorporated herein by reference as an exhibit hereto, pursuant to Rule
    7a-29 under the Trust Indenture Act of 1939 (the "Act") and 17 C.F.R.
    229.10(d).

    1.  A copy of the Organization Certificate of The Bank of New York (formerly
        Irving Trust Company) as now in effect, which contains the authority to
        commence business and a grant of powers to exercise corporate trust
        powers. (Exhibit 1 to Amendment No. 1 to Form T-1 filed with
        Registration Statement No. 33-6215, Exhibits 1a and 1b to Form T-1 filed
        with Registration Statement No. 33-21672 and Exhibit 1 to Form T-1 filed
        with Registration Statement No. 33-29637.)

    4.  A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1
        filed with Registration Statement No. 33-31019.)

    6.  The consent of the Trustee required by Section 321(b) of the Act.
        (Exhibit 6 to Form T-1 filed with Registration Statement No. 33-44051.)

    7.  A copy of the latest report of condition of the Trustee published
        pursuant to law or to the requirements of its supervising or examining
        authority.



                                    SIGNATURE

        Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 2nd day of July, 2003.

                                        THE BANK OF NEW YORK


                                        By:     /s/ ROBERT A. MASSIMILLO
                                            ----------------------------
                                            Name:  ROBERT A. MASSIMILLO
                                            Title: VICE PRESIDENT

                                       -4-

EX-99.1

                           LYONDELL CHEMICAL COMPANY

              Letter to The Depository Trust Company Participants
                         for Tender of All Outstanding
              Unregistered 10 1/2% Senior Secured Notes due 2013
                                in Exchange for
               Registered 10 1/2% Senior Secured Notes due 2013

 The Exchange Offer will expire at 5:00 p.m., New York City time, on         ,
 2003 (the "Expiration Date"), unless sooner terminated or extended.
 Outstanding Notes tendered in the Exchange Offer may be withdrawn at any time
 prior to 5:00 p.m., New York City time, on the Expiration Date for the
 Exchange Offer.

To Depository Trust Company Participants:

   We enclose the materials listed below relating to the offer by Lyondell
Chemical Company (the "Issuer") to exchange its 101/2% Senior Secured Notes due
2013 (the "New Notes"), the issuance of which has been registered under the
Securities Act of 1933, as amended (the "Securities Act"), for a like principal
amount of its issued and outstanding unregistered 101/2% Senior Secured Notes
due 2013 (the "Outstanding Notes"), upon the terms and subject to the
conditions set forth in the Issuer's prospectus dated           , 2003 (the
"Prospectus") and the related Letter of Transmittal. The exchange of the
Outstanding Notes for the New Notes and the related documentation are referred
to herein as the "Exchange Offer."

   We are enclosing copies of the following documents:

    1. Prospectus dated           , 2003;

    2. Letter of Transmittal (together with accompanying Substitute Form W-9
       Guidelines);

    3. Notice of Guaranteed Delivery; and

    4. Letter of instructions that may be sent to your clients for whose
       account you hold Outstanding Notes in your name or in the name of your
       nominee, with space provided for obtaining such client's instructions
       with regard to the Exchange Offer.

   We urge you to contact your clients promptly. Please note that the Exchange
Offer will expire at 5:00 p.m., New York City time, on           , 2003, unless
sooner terminated or extended.

   The Exchange Offer is not conditioned upon any minimum aggregate principal
amount of Outstanding Notes being tendered for exchange.

   Pursuant to the Letter of Transmittal, each holder of Outstanding Notes will
represent to the Issuer that:

  .   such person is not an "affiliate," as defined in Rule 405 under the
      Securities Act, of the Issuer or a broker-dealer tendering Outstanding
      Notes acquired directly from the Issuer for its own account;

  .   if such person is not a broker-dealer, or is a broker-dealer but will not
      receive New Notes for its own account in exchange for Outstanding Notes,
      it is not engaged in, and does not intend to participate in, a
      distribution of New Notes;

  .   such person does not have an arrangement or understanding with any person
      to participate in the distribution of the Outstanding Notes or the New
      Notes within the meaning of the Securities Act; and

  .   any New Notes received are being acquired in the ordinary course of
      business of the person receiving such New Notes.



   If such person is a broker-dealer that will receive New Notes for its own
account in exchange for Outstanding Notes, it represents that the Outstanding
Notes to be exchanged for New Notes were acquired as a result of market-making
activities or other trading activities, and it will deliver a Prospectus in
connection with any resale of such New Notes; however, by so acknowledging and
by delivering a Prospectus, it will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.

   The enclosed Letter to Clients contains an authorization by the beneficial
owners of the Outstanding Notes for you to make the foregoing representations.

   The Issuer will not pay any fee or commission to any broker or dealer or to
any other person (other than the Exchange Agent) in connection with the
solicitation of tenders of Outstanding Notes pursuant to the Exchange Offer.
The Issuer will pay or cause to be paid any transfer taxes payable on the
transfer of Outstanding Notes to it, except as otherwise provided in
Instruction 7 of the enclosed Letter of Transmittal.

   Additional copies of the enclosed material may be obtained from us or the
Exchange Agent, The Bank of New York, upon request.

                                          Very truly yours,

                                          Lyondell Chemical Company

                                      2

EX-99.2

                           LYONDELL CHEMICAL COMPANY

                               Letter to Clients
                                      for
                           Tender of All Outstanding
              Unregistered 10 1/2% Senior Secured Notes due 2013
                                in Exchange for
               Registered 10 1/2% Senior Secured Notes due 2013

 The Exchange Offer will expire at 5:00 p.m., New York City time, on
           , 2003 (the "Expiration Date"), unless sooner terminated or
 extended. Outstanding Notes tendered in the Exchange Offer may be withdrawn at
 any time before 5:00 p.m., New York City time, on the Expiration Date for the
 Exchange Offer.

To Our Clients:

   We are enclosing with this letter a prospectus dated           , 2003 (the
"Prospectus") of Lyondell Chemical Company (the "Issuer") and the related
Letter of Transmittal. These two documents together constitute the Issuer's
offer to exchange its 10 1/2% Senior Secured Notes due 2013 (the "New Notes"),
the issuance of which has been registered under the Securities Act of 1933, as
amended (the "Securities Act"), for a like principal amount of issued and
outstanding unregistered 10 1/2% Senior Secured Notes due 2013 (the
"Outstanding Notes"). The exchange of Outstanding Notes for New Notes and the
related documentation are referred to herein as the "Exchange Offer." The
Exchange Offer is not conditioned upon any minimum aggregate principal amount
of Outstanding Notes being tendered for exchange.

   We are the holder of record of Outstanding Notes held by us for your own
account. A tender of your Outstanding Notes held by us can be made only by us
as the record holder according to your instructions. The Letter of Transmittal
is furnished to you for your information only and cannot be used by you to
tender Outstanding Notes held by us for your account.

   We request instructions as to whether you wish to tender any or all of the
Outstanding Notes held by us for your account under the terms and conditions of
the Exchange Offer. We also request that you confirm that we may, on your
behalf, make the representations contained in the Letter of Transmittal.

   Under the Letter of Transmittal, each holder of Outstanding Notes will
represent to the Issuer that:

  .   such person is not an "affiliate," as defined in Rule 405 under the
      Securities Act, of the Issuer or a broker-dealer tendering Outstanding
      Notes acquired directly from the Issuer for its own account;

  .   if such person is not a broker-dealer, or is a broker-dealer but will not
      receive New Notes for its own account in exchange for Outstanding Notes,
      it is not engaged in, and does not intend to participate in, a
      distribution of the New Notes;

  .   such person does not have an arrangement or understanding with any person
      to participate in the distribution of the Outstanding Notes or the New
      Notes within the meaning of the Securities Act;

  .   any New Notes received are being acquired in the ordinary course of
      business of the person receiving such New Notes; and

  .   if such person is a broker-dealer who will receive New Notes for its own
      account in exchange for Outstanding Notes, it will represent that the
      Outstanding Notes to be exchanged for New Notes were acquired as a result
      of market-making activities or other trading activities, and that it will
      deliver a Prospectus in connection with any resale of those New Notes;
      however, by so acknowledging and by delivering a Prospectus, it will not
      be deemed to admit that it is an "underwriter" within the meaning of the
      Securities Act.

                                          Very truly yours,



   Please return your instructions to us in the enclosed envelope within ample
time to permit us to submit a tender on your behalf before the Expiration Date.

                                INSTRUCTION TO
                           DTC TRANSFER PARTICIPANT

To Participant of The Depository Trust Company:

   The undersigned hereby acknowledges receipt and review of the prospectus
dated ,           2003 (the "Prospectus") of Lyondell Chemical Company (the
"Issuer") and the related Letter of Transmittal. These two documents together
constitute the Issuer's offer to exchange its 101/2% Senior Secured Notes due
2013 (the "New Notes"), the issuance of which has been registered under the
Securities Act of 1993, as amended (the "Securities Act"), for a like principal
amount of its issued and outstanding unregistered 101/2% Senior Secured Notes
due 2013 (the "Outstanding Notes"). The exchange of Outstanding Notes for New
Notes and the relevant documentation are referred to herein as an "Exchange
Offer."

   This will instruct you, the registered holder and DTC participant, as to the
action to be taken by you relating to the Exchange Offer for the Outstanding
Notes held by you for the account of the undersigned.

   The aggregate principal amount of the Outstanding Notes held by you for the
account of the undersigned is (fill in amount):




                                                                   Principal
    Title of Series                                                 Amount
    ---------------                                                ---------
                                                                
    Lyondell Chemical Company 101/2% Senior Secured Notes due 2013


With respect to the Exchange Offer, the undersigned hereby instructs you (check
appropriate box):

[_] To TENDER all Outstanding Notes held by you for the account of the
    undersigned.

[_] To TENDER the following amount of Outstanding Notes held by you for the
    account of the undersigned:




                                                                   Principal
    Title of Series                                                 Amount
    ---------------                                                ---------
                                                                
    Lyondell Chemical Company 101/2% Senior Secured Notes due 2013


[_] NOT to TENDER any Outstanding Notes held by you for the account of the
    undersigned.

   If no box is checked, a signed and returned Instruction to DTC Participant
will be deemed to instruct you to tender all Outstanding Notes held by you for
the account of the undersigned.

   If the undersigned instructs you to tender the Outstanding Notes held by you
for the account of the undersigned, it is understood that you are authorized to
make, on behalf of the undersigned (and the undersigned, by its signature
below, hereby makes to you), the representations contained in the Letter of
Transmittal that are to be made to the Issuer with respect to the undersigned
as a beneficial owner, including, but not limited to, the representations that:

    (i)  the undersigned is not an "affiliate," as defined in Rule 405 under
         the Securities Act, of the Issuer or a broker-dealer tendering
         Outstanding Notes acquired directly from the Issuer for its own
         account;

                                      2



    (ii) if the undersigned is not a broker-dealer, or is a broker-dealer but
         will not receive New Notes for its own account in exchange for
         Outstanding Notes, it is not engaged in, and does not intend to
         participate in, a distribution of New Notes;

   (iii) the undersigned does not have an arrangement or understanding with any
         person to participate in the distribution of the Outstanding Notes or
         the New Notes within the meaning of the Securities Act;

    (iv) any New Notes received are being acquired in the ordinary course of
         business of the undersigned; and

    (v)  if the undersigned is a broker-dealer that will receive New Notes for
         its own account in exchange for Outstanding Notes, it will represent
         that the Outstanding Notes to be exchanged for New Notes were acquired
         as a result of market-making activities or other trading activities,
         and it will acknowledge that it will deliver a Prospectus in
         connection with any resale of those New Notes; however, by so
         acknowledging and by delivering a Prospectus, the undersigned will not
         be deemed to admit that it is an "underwriter" within the meaning of
         the Securities Act.

                                   SIGN HERE

Name of beneficial owner(s): ___________________________________________________

Signature(s): __________________________________________________________________

Name(s) (please print): ________________________________________________________

Address: _______________________________________________________________________

Telephone Number: ______________________________________________________________

Taxpayer Identification or Social Security Number: _____________________________

Date: __________________________________________________________________________

                                      3

EX-99.3

                           LYONDELL CHEMICAL COMPANY

                         Notice of Guaranteed Delivery
                         for Tender of All Outstanding
              Unregistered 10 1/2% Senior Secured Notes due 2013
                                in Exchange for
               Registered 10 1/2% Senior Secured Notes due 2013

   This form, or one substantially equivalent hereto, must be used by a holder
to accept the Exchange Offer of Lyondell Chemical Company (the "Issuer"), and
to tender outstanding unregistered 10 1/2% Senior Secured Notes due 2013 (the
"Outstanding Notes") to The Bank of New York, as exchange agent (the "Exchange
Agent"), pursuant to the guaranteed delivery procedures described in "The
Exchange Offer--Guaranteed Delivery Procedures" of the Issuer's prospectus
dated           , 2003 (the "Prospectus") and in Instruction 2 to the related
Letter of Transmittal. Any holder who wishes to tender Outstanding Notes
pursuant to such guaranteed delivery procedures must ensure that the Exchange
Agent receives this Notice of Guaranteed Delivery, properly completed and duly
executed, prior to the Expiration Date (as defined below) of the Exchange
Offer. Capitalized terms used but not defined herein have the meanings ascribed
to them in the Prospectus or the Letter of Transmittal.

 The Exchange Offer will expire at 5:00 p.m., New York City time, on
           , 2003 (the "Expiration Date"), unless sooner terminated or
 extended. Outstanding Notes tendered in the Exchange Offer may be withdrawn at
 any time prior to 5:00 p.m., New York City time, on the Expiration Date for
 the Exchange Offer.

                 The Exchange Agent for the Exchange Offer is:

                             The Bank of New York

       For Delivery By Mail (registered or certified mail recommended),
                        Overnight Delivery or by Hand:

                             The Bank of New York
                              101 Barclay Street
                                 Floor 7 East
                              New York, NY 10286
                           Attn.: Carolle Montreuil
                              Reorganization Unit

            By Facsimile Transmission (eligible institutions only):

                                (212) 298-1915
                           Attn.: Carolle Montreuil

                             Confirm by telephone:
                                (212) 298-5920

   Delivery of this instrument to an address other than as set forth above, or
transmission via facsimile to a number other than as set forth above, will not
constitute a valid delivery. The instructions accompanying this Notice of
Guaranteed Delivery should be read carefully before the Notice of Guaranteed
Delivery is completed.

   This Notice of Guaranteed Delivery is not to be used to guarantee
signatures. If a signature on a Letter of Transmittal is required to be
guaranteed by an "Eligible Institution" under the instructions thereto, such
signature guarantee must appear in the applicable space in the box provided on
the Letter of Transmittal for guarantee of signatures.



Ladies and Gentlemen:

   The undersigned hereby tenders to the Issuer, upon the terms and subject to
the conditions set forth in the Prospectus and the related Letter of
Transmittal, receipt of which is hereby acknowledged, the principal amount of
Outstanding Notes set forth below pursuant to the guaranteed delivery
procedures set forth in the Prospectus under the caption "The Exchange
Offer--Guaranteed Delivery Procedures" and in Instruction 2 of the Letter of
Transmittal.

   The undersigned hereby tenders the Outstanding Notes listed below:




                                           Certificate
                                            Number(s)
                                          (if known) of
                                        Outstanding Notes
                                           or Account      Aggregate  Aggregate
                                          Number at the    Principal  Principal
                                           Book-entry       Amount     Amount
            Title of Series                 Facility      Represented Tendered
            ---------------             ----------------- ----------- ---------
                                                             
 Lyondell Chemical Company
 10 1/2% Senior Secured Notes due 2013.


                               

                                  PLEASE SIGN AND COMPLETE

- --------------------------------- -------------------------------------

- --------------------------------- -------------------------------------
 Name(s) of Registered Holder(s)  Signatures of Registered Holder(s) or Authorized Signatory

- ---------------------------------

- ---------------------------------
             Address

- --------------------------------- Dated ______________________________________________, 2003
Area Code and Telephone Number(s)




                                      2



   This Notice of Guaranteed Delivery must be signed by the registered
holder(s) of the tendered Outstanding Notes exactly as the name(s) of such
person(s) appear(s) on certificates for the Outstanding Notes or on a security
position listing as the owner of the Outstanding Notes, or by person(s)
authorized to become holder(s) by endorsements and documents transmitted with
this Notice of Guaranteed Delivery. If signature is by a trustee, executor,
administrator, guardian, attorney-in-fact, officer or other person acting in a
fiduciary or representative capacity, such person must provide the following
information:

                     Please print name(s) and address(es)

Name(s):

- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------

Capacity:

- --------------------------------------------------------------------------------

Address(es):

- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------

                                   GUARANTEE

                   (Not to be used for signature guarantee)

   The undersigned, a firm which is a member firm of a registered national
securities exchange or of the National Association of Securities Dealers, Inc.,
or is a commercial bank or trust company having an office or correspondent in
the United States, or is otherwise an "eligible guarantor institution" within
the meaning of Rule 17Ad-15 under the Securities Exchange Act of 1934, as
amended, hereby guarantees deposit with the Exchange Agent of the Letter of
Transmittal (or facsimile thereof or agent's message in lieu thereof), together
with the Outstanding Notes tendered hereby in proper form for transfer (or
confirmation of the book-entry transfer of such Outstanding Notes into the
Exchange Agent's account at the DTC described in the Prospectus under the
caption "The Exchange Offer--Procedures for Tendering--Book-Entry Transfer" and
in the Letter of Transmittal) and any other required documents, all by 5:00
p.m., New York City time, within three New York Stock Exchange trading days
following the Expiration Date.

 Name of Firm:_________________________ --------------------------------------
                                               (Authorized Signature)

 Address:______________________________ Name:_________________________________

 -------------------------------------- Title:________________________________
          (Include Zip Code)                   (Please Type or Print)

 Area Code and Telephone Number:

 -------------------------------------- Date:____________________________ 2003

   Do not send Outstanding Notes with this form. Actual surrender of
Outstanding Notes must be made pursuant to, and be accompanied by, a properly
completed and duly executed Letter of Transmittal and any other required
documents.

                                      3



                INSTRUCTIONS FOR NOTICE OF GUARANTEED DELIVERY

   1.  Delivery of this Notice of Guaranteed Delivery.  A properly completed
and duly executed copy of this Notice of Guaranteed Delivery (or facsimile
hereof or an agent's message and Notice of Guaranteed Delivery in lieu hereof)
and any other documents required by this Notice of Guaranteed Delivery with
respect to the Outstanding Notes must be received by the Exchange Agent at its
address set forth herein prior to the Expiration Date of the Exchange Offer.
The method of delivery of this Notice of Guaranteed Delivery and any other
required documents to the Exchange Agent is at the election and sole risk of
the holder, and the delivery will be deemed made only when actually received by
the Exchange Agent. If delivery is by mail, registered mail with return receipt
requested, properly insured, is recommended. As an alternative to delivery by
mail, holders may wish to consider using an overnight or hand delivery service.
In all cases, sufficient time should be allowed to ensure timely delivery. For
a description of the guaranteed delivery procedures, see Instruction 2 of the
Letter of Transmittal.

   2.  Signatures on this Notice of Guaranteed Delivery.  If this Notice of
Guaranteed Delivery (or facsimile hereof) is signed by the registered holder(s)
of the Outstanding Notes referred to herein, the signature(s) must correspond
exactly with the name(s) written on the face of the Outstanding Notes without
alteration, enlargement or any change whatsoever. If this Notice of Guaranteed
Delivery (or facsimile hereof) is signed by a participant of the DTC whose name
appears on a security position listing as the owner of the Outstanding Notes,
the signature must correspond with the name shown on the security position
listing as the owner of the Outstanding Notes.

   If this Notice of Guaranteed Delivery (or facsimile hereof) is signed by a
person other than the registered holder(s) of any Outstanding Notes listed or a
participant of the DTC, this Notice of Guaranteed Delivery must be accompanied
by appropriate bond powers, signed as the name(s) of the registered holder(s)
appear(s) on the Outstanding Notes or signed as the name(s) of the participant
shown on the DTC's security position listing.

   If this Notice of Guaranteed Delivery (or facsimile hereof) is signed by a
trustee, executor, administrator, guardian, attorney-in-fact, officer of a
corporation, or other person acting in a fiduciary or representative capacity,
such person should so indicate when signing and submit with the Letter of
Transmittal evidence satisfactory to the Exchange Agent of such person's
authority to so act.

   3.  Requests for Assistance or Additional Copies.  Questions and requests
for assistance and requests for additional copies of the Prospectus and this
Notice of Guaranteed Delivery may be directed to the Exchange Agent at the
address set forth on the cover page hereof. Holders may also contact their
broker, dealer, commercial bank, trust company or other nominee for assistance
concerning the Exchange Offer.

                                      4

EX-99.4

                           LYONDELL CHEMICAL COMPANY

                             Letter of Transmittal
                                      for
                           Tender of All Outstanding
              Unregistered 10 1/2% Senior Secured Notes due 2013
                                in Exchange for
               Registered 10 1/2% Senior Secured Notes due 2013

 The Exchange Offer will expire at 5:00 p.m., New York City time, on
           , 2003 (the "Expiration Date"), unless sooner terminated or
 extended. Outstanding Notes tendered in the Exchange Offer may be withdrawn at
 any time prior to 5:00 p.m., New York City time, on the Expiration Date for
 the Exchange Offer.

                PLEASE READ CAREFULLY THE ATTACHED INSTRUCTIONS

   If you desire to accept the Exchange Offer, this Letter of Transmittal
should be completed, signed and submitted to the Exchange Agent:

                             The Bank of New York

       For Delivery By Mail (registered or certified mail recommended),

                        Overnight Delivery or by Hand:

                             The Bank of New York
                              101 Barclay Street
                                 Floor 7 East
                              New York, NY 10286
                            Attn: Carolle Montreuil
                              Reorganization Unit

            By Facsimile Transmission (eligible institutions only):

                                (212) 298-1915
                            Attn: Carolle Montreuil

                             Confirm by telephone:
                                (212) 298-5920

   Delivery of this instrument to an address other than as shown above or
transmission via a facsimile number other than the one listed above will not
constitute a valid delivery. The instructions accompanying this Letter of
Transmittal should be read carefully before this Letter of Transmittal is
completed.

   The undersigned hereby acknowledges receipt and review of the prospectus
dated       , 2003 (the "Prospectus") of Lyondell Chemical Company (the
"Issuer") and this Letter of Transmittal which together constitute the Issuer's
offer to exchange its 101/2% Senior Secured Notes due 2013 (the "New Notes"),
the issuance of which has been registered under the Securities Act of 1933, as
amended (the "Securities Act"), for a like principal amount of issued and
outstanding unregistered 101/2% Senior Secured Notes due 2013 (the "Outstanding
Notes"). The exchange of Outstanding Notes for New Notes and the related
documentation are referred to as the "Exchange Offer." Capitalized terms used
but not defined herein have the respective meanings given to them in the
Prospectus.

   The Issuer reserves the right, at any time or from time to time, to extend
the period of time during which the Exchange Offer for the Outstanding Notes is
open, at its discretion, in which event the term "Expiration Date" shall mean
the latest date to which such Exchange Offer is extended. The Issuer shall
notify The Bank of New



York (the "Exchange Agent") of any extension by oral or written notice and
shall make a public announcement thereof no later than 9:00 a.m., New York City
time, on the next business day after the previously scheduled Expiration Date.

   The New Notes will bear interest at 101/2% per annum. Interest payment dates
will be June 1 and December 1 of each year commencing December 1, 2003.
Registered holders of New Notes on the relevant record date for the first
interest payment date following the consummation of the Exchange Offer will
receive interest accruing from the most recent date to which interest has been
paid on the Outstanding Notes or, if no interest has been paid, from May 20,
2003. Outstanding Notes accepted for exchange will cease to accrue interest
from and after the date of consummation of the Exchange Offer. Holders whose
Outstanding Notes are accepted for exchange will not receive any payment in
respect of accrued interest on such Outstanding Notes otherwise payable on any
interest payment date the record date for which occurs on or after consummation
of the Exchange Offer. Interest will be paid to the person in whose name the
applicable New Note is registered at the close of business on May 15, in the
case of the June 1 interest payment date, and November 15, in the case of the
December 1 interest payment date. Interest will be computed on the basis of
360-day year of twelve 30-day months. No additional interest will be payable on
the New Notes.

   This Letter of Transmittal is to be used by a holder of Outstanding Notes if:

  .   certificates of Outstanding Notes are to be forwarded with this Letter of
      Transmittal; or

  .   delivery of Outstanding Notes is to be made by book-entry transfer to the
      account maintained by the Exchange Agent at The Depository Trust Company
      (the "DTC") pursuant to the procedures set forth in the Prospectus under
      the caption "The Exchange Offer--Procedures for Tendering--Book-Entry
      Transfer."

   Tenders by book-entry transfer may also be made by delivering an "agent's
message" pursuant to DTC's Automated Tender Offer Program in lieu of this
Letter of Transmittal. Holders of Outstanding Notes (i) whose Outstanding Notes
are not immediately available, (ii) who are unable to deliver their Outstanding
Notes, this Letter of Transmittal and all other documents required hereby to
the Exchange Agent on or prior to the Expiration Date for the Exchange Offer,
or (iii) who are unable to complete the procedure for book-entry transfer on a
timely basis, must tender their Outstanding Notes according to the guaranteed
delivery procedures set forth in the Prospectus under the caption "The Exchange
Offer--Guaranteed Delivery Procedures." See Instruction 2 of this Letter of
Transmittal. Delivery of documents to the book-entry transfer facility does not
constitute delivery to the Exchange Agent.

   The term "holder" with respect to the Exchange Offer for Outstanding Notes
means any person in whose name such Outstanding Notes are registered on the
books of Lyondell Chemical Company, any person who holds such Outstanding Notes
and has obtained a properly completed bond power from the registered holder or
any participant in the DTC system whose name appears on a security position
listing as the holder of such Outstanding Notes and who desires to deliver the
Outstanding Notes by book-entry transfer at DTC. The undersigned has completed,
executed and delivered this Letter of Transmittal to indicate the action the
undersigned desires to take with respect to the Exchange Offer. Holders who
wish to tender their Outstanding Notes must complete this Letter of Transmittal
in its entirety (unless such Outstanding Notes are to be tendered by book-entry
transfer and an agent's message is delivered in lieu hereof).

   Please read the entire Letter of Transmittal and the Prospectus carefully
before checking any box below. The instructions included with this Letter of
Transmittal must be followed. Questions and requests for assistance or for
additional copies of the Prospectus and this Letter of Transmittal may be
directed to the Exchange Agent.

   List below the Outstanding Notes tendered under this Letter of Transmittal.
If the space below is inadequate, list the title, registered numbers and
principal amounts on a separate signed schedule and affix the list to this
Letter of Transmittal.

                                      2






                            DESCRIPTION OF OUTSTANDING NOTES TENDERED
- ----------------------------------------------------------------------------------------------------------------------------
                                                                                                   
Name(s) and Address(es) of Registered Holder(s) Exactly as Name(s) Appear(s) on Outstanding Notes (Please Fill In, If Blank)
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
                                  Outstanding Note(s) Tendered
- ----------------------------------------------------------------------------------------------------------------------------
                                                                                          Aggregate
                                                                                          Principal
                                                                                           Amount           Principal
                                                                       Registered        Represented          Amount
                        Title of Series                                Number(s)*        by Note(s)         Tendered**
- ----------------------------------------------------------------------------------------------------------------------------
Lyondell Chemical Company 10 1/2% Senior Secured Notes due 2013
                                                                       -----------------------------------------------------
                                                                       -----------------------------------------------------
                                                                       -----------------------------------------------------
                                                                       -----------------------------------------------------
- -----------------------------------------------------------------------
   Total


*  Need not be completed by book-entry holders.

** Unless otherwise indicated, any tendering holder of Outstanding Notes will
   be deemed to have tendered the entire aggregate principal amount represented
   by such Outstanding Notes. All tenders must be in integral multiples of
   $1,000.

[_] CHECK HERE IF TENDERED OUTSTANDING NOTES ARE ENCLOSED HEREWITH.

[_] CHECK HERE AND COMPLETE THE FOLLOWING IF TENDERED OUTSTANDING NOTES ARE
    BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO THE ACCOUNT MAINTAINED BY
    THE EXCHANGE AGENT WITH THE DTC (FOR USE BY ELIGIBLE INSTITUTIONS ONLY):

    Name of Tendering Institution: _____________________________________________

    Book-entry Facility Account Number(s): _____________________________________

    Transaction Code Number(s): ________________________________________________

[_] CHECK HERE AND COMPLETE THE FOLLOWING IF TENDERED OUTSTANDING NOTES ARE
    BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY EITHER ENCLOSED
    HEREWITH OR PREVIOUSLY DELIVERED TO THE EXCHANGE AGENT (COPY ATTACHED) (FOR
    USE BY ELIGIBLE INSTITUTIONS ONLY):

    Name(s) of Registered Holder(s) of Outstanding Notes: ______________________

    Date of Execution of Notice of Guaranteed Delivery: ________________________

    Window Ticket Number (if available): _______________________________________

    Name of Eligible Institution that Guaranteed Delivery: _____________________

    DTC Account Number(s) (if delivered by book-entry transfer): _______________

                                      3



    Transaction Code Number (if delivered by book-entry transfer): _____________

    Name of Tendering Institution (if delivered by book-entry transfer): _______

[_] CHECK HERE IF TENDERED OUTSTANDING NOTES ARE BEING DELIVERED BY BOOK-ENTRY
    TRANSFER AND NON-EXCHANGED OUTSTANDING NOTES ARE TO BE RETURNED, BY
    CREDITING THE DTC ACCOUNT NUMBER SET FORTH ABOVE (FOR USE BY ELIGIBLE
    INSTITUTIONS ONLY).

[_] CHECK HERE AND COMPLETE THE FOLLOWING IF YOU ARE A BROKER-DEALER AND WISH
    TO RECEIVE 10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY
    AMENDMENTS OR SUPPLEMENTS THERETO:

    Name: ______________________________________________________________________

    Address: ___________________________________________________________________

   If the undersigned is not a broker-dealer, the undersigned represents that
it is not engaged in, and does not intend to participate in, a distribution of
New Notes. If the undersigned is a broker-dealer that will receive New Notes
for its own account in exchange for Outstanding Notes, it represents that the
New Notes are acquired as a result of market-making activities or other trading
activities and that it will deliver a Prospectus in connection with any resale
of such New Notes; however, by so acknowledging and by delivering a Prospectus,
the undersigned will not be deemed to admit that it is an "underwriter" within
the meaning of the Securities Act.

                                      4



                      SIGNATURES MUST BE PROVIDED BELOW.
             PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.

Ladies and Gentlemen:

   Subject to the terms and conditions of the Exchange Offer, the undersigned
hereby tenders to the Issuer for exchange the principal amount of Outstanding
Notes indicated above. Subject to and effective upon the acceptance for
exchange of the principal amount of Outstanding Notes tendered in accordance
with this Letter of Transmittal, the undersigned hereby exchanges, assigns and
transfers to, or upon the order of, the Issuer all right, title and interest in
and to the Outstanding Notes tendered for exchange hereby, including all rights
to accrued and unpaid interest thereon as of the Expiration Date. The
undersigned hereby irrevocably constitutes and appoints the Exchange Agent the
true and lawful agent and attorney-in-fact for the undersigned (with full
knowledge that said Exchange Agent also acts as the agent for the Issuer in
connection with the Exchange Offer) with respect to the tendered Outstanding
Notes with full power of substitution to:

  .   deliver such Outstanding Notes, or transfer ownership of such Outstanding
      Notes on the account books maintained by the DTC, to the Issuer and
      deliver all accompanying evidences of transfer and authenticity; and

  .   present such Outstanding Notes for transfer on the books of the Issuer
      and receive all benefits and otherwise exercise all rights of beneficial
      ownership of such Outstanding Notes, all in accordance with the terms of
      the Exchange Offer.

The power of attorney granted in this paragraph shall be deemed to be
irrevocable and coupled with an interest.

   The undersigned hereby represents and warrants that the undersigned has full
power and authority to tender, exchange, assign and transfer the Outstanding
Notes tendered hereby and to acquire the New Notes issuable upon the exchange
of such tendered Outstanding Notes, and that the Issuer will acquire good and
unencumbered title thereto, free and clear of all liens, restrictions, charges
and encumbrances and not subject to any adverse claim, when the same are
accepted for exchange by the Issuer as contemplated herein.

   The undersigned acknowledges that the Exchange Offer is being made in
reliance upon interpretations set forth in no-action letters issued to third
parties by the staff of the Securities and Exchange Commission (the "SEC"),
including Exxon Capital Holdings Corporation (available April 13, 1988), Morgan
Stanley & Co. Incorporated (available June 5, 1991), Shearman & Sterling
(available July 2, 1993) and similar no-action letters (the "Prior No-Action
Letters"), that the New Notes issued in exchange for Outstanding Notes pursuant
to the Exchange Offer may be offered for resale or resold and otherwise
transferred by holders thereof (other than any such holder that is an
"affiliate" of the Issuer within the meaning of Rule 405 under the Securities
Act), without compliance with the registration and prospectus delivery
provisions of the Securities Act, provided that such New Notes are acquired in
the ordinary course of such holders' business and that such holders are not
engaging in, do not intend to participate in and have no arrangement or
understanding with any person to participate in a distribution of such New
Notes. The SEC has not, however, considered the Exchange Offer in the context
of a no-action letter and there can be no assurance that the staff of the SEC
would make a similar determination with respect to the Exchange Offer as in
other circumstances.

   The undersigned hereby further represents to the Issuer that:

  .   neither the holder nor any other person receiving its New Notes in the
      Exchange Offer is an "affiliate," as defined in Rule 405 under the
      Securities Act, of the Issuer or a broker-dealer tendering Outstanding
      Notes acquired directly from the Issuer for its own account;

  .   if the undersigned is not a broker-dealer or is a broker-dealer but will
      not receive New Notes for its own account in exchange for Outstanding
      Notes, the undersigned represents that it is not engaged in, and does not
      intend to participate in, a distribution of New Notes;

                                      5



  .   neither the undersigned nor any other person receiving notes in the
      Exchange Offer has an arrangement or understanding with any person to
      participate in the distribution of the Outstanding Notes or the New Notes
      within the meaning of the Securities Act; and

  .   the New Notes to be received are being acquired in the ordinary course of
      business of the person receiving such New Notes, whether or not the
      undersigned.

   If the undersigned is a broker-dealer that will receive New Notes for its
own account in exchange for Outstanding Notes, it represents that the New Notes
are being acquired by it as a result of market-making activities or other
trading activities and that it will deliver a Prospectus in connection with any
resale of such New Notes. By so acknowledging and by delivering a Prospectus,
however, the undersigned will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.

   The undersigned acknowledges that if the undersigned is tendering
Outstanding Notes in the Exchange Offer with the intention of participating in
any manner in a distribution of the New Notes:

  .   the undersigned cannot rely on the position of the staff of the SEC set
      forth in the Prior No-Action Letters and, in the absence of an exemption
      therefrom, must comply with the registration and prospectus delivery
      requirements of the Securities Act in connection with the resale
      transaction of the New Notes, in which case the registration statement
      must contain the selling security holder information required by Item 507
      or Item 508, as applicable, of Regulation S-K of the SEC; and

  .   failure to comply with such requirements in such instance could result in
      the undersigned incurring liability for which the undersigned is not
      indemnified by the Issuer.

   The undersigned will, upon request, execute and deliver any additional
documents deemed by the Exchange Agent or the Issuer to be necessary or
desirable to complete the exchange, assignment and transfer of the Outstanding
Notes tendered hereby, including the transfer of such Outstanding Notes on the
account books maintained by the DTC.

   For purposes of the Exchange Offer, the Issuer shall be deemed to have
accepted for exchange validly tendered Outstanding Notes when, as and if the
Issuer gives oral or written notice thereof to the Exchange Agent. Any tendered
Outstanding Notes that are not accepted for exchange pursuant to the Exchange
Offer for any reason will be returned, without expense, to the undersigned at
the address shown below or at a different address as may be indicated herein
under Special Delivery Instructions as promptly as practicable after the
Expiration Date for such Exchange Offer.

   All authority conferred or agreed to be conferred by this Letter of
Transmittal shall survive the death, incapacity or dissolution of the
undersigned, and every obligation of the undersigned under this Letter of
Transmittal shall be binding upon its successors, assigns, heirs, executors,
administrators, trustees in bankruptcy and legal representatives. This tender
may be withdrawn only in accordance with the procedures set forth in the
section of the Prospectus entitled "The Exchange Offer--Withdrawal of Tenders."

   The undersigned acknowledges that the Issuer's acceptance of properly
tendered Outstanding Notes pursuant to the procedures described under the
caption "The Exchange Offer--Procedures for Tendering" in the Prospectus and in
the instructions hereto will constitute a binding agreement between the
undersigned and the Issuer upon the terms and subject to the conditions of the
Exchange Offer. The undersigned further agrees that acceptance of any tendered
Outstanding Notes by the Issuer and the issuance of New Notes in exchange
therefor shall constitute performance in full by the Issuer of their
obligations under the registration rights agreement and that the Issuer shall
have no further obligations or liabilities thereunder for the registration of
the Outstanding Notes or the New Notes.

   The Exchange Offer is subject to certain conditions set forth in the
Prospectus under the caption "The Exchange Offer--Conditions to the Exchange
Offer." The undersigned recognizes that as a result of these

                                      6



conditions (which may be waived, in whole or in part, by the Issuer), the
Issuer may not be required to exchange any of the Outstanding Notes tendered
hereby. In such event, the Outstanding Notes not exchanged will be returned to
the undersigned at the address shown below the signature of the undersigned.

   Unless otherwise indicated under "Special Issuance Instructions," please
issue the New Notes issued in exchange for the Outstanding Notes accepted for
exchange and return any Outstanding Notes not tendered or not exchanged, in the
name(s) of the undersigned (or, in the case of a book-entry delivery of
Outstanding Notes, please credit the account indicated above maintained at the
DTC). Similarly, unless otherwise indicated under "Special Delivery
Instructions," please mail or deliver the New Notes issued in exchange for the
Outstanding Notes accepted for exchange and any Outstanding Notes not tendered
or not exchanged (and accompanying documents, as appropriate) to the
undersigned at the address shown below the undersigned's signature(s). In the
event that both "Special Issuance Instructions" and "Special Delivery
Instructions" are completed, please issue the New Notes issued in exchange for
the Outstanding Notes accepted for exchange in the name(s) of, and return any
Outstanding Notes not tendered or not exchanged to, the person(s) so indicated.
The undersigned recognizes that the Issuer has no obligation pursuant to the
"Special Issuance Instructions" and "Special Delivery Instructions" to transfer
any Outstanding Notes from the name of the registered holder(s) thereof if the
Issuer does not accept for exchange any of the Outstanding Notes so tendered
for exchange.


                         SPECIAL ISSUANCE INSTRUCTIONS
                          (SEE INSTRUCTIONS 5 AND 6)

To be completed ONLY (i) if Outstanding Notes in a principal amount not
tendered, or New Notes issued in exchange for Outstanding Notes accepted for
exchange, are to be issued in the name of someone other than the undersigned,
or (ii) if Outstanding Notes tendered by book-entry transfer which are not
exchanged are to be returned by credit to an account maintained at the DTC
other than the DTC Account Number set forth above. Issue New Notes and/or
Outstanding Notes to:

Name____________________________________________________________________________

Address:________________________________________________________________________

- --------------------------------------------------------------------------------
                              (Include Zip Code)

- --------------------------------------------------------------------------------
                (Tax Identification or Social Security Number)

- --------------------------------------------------------------------------------
                            (Please Type of Print)
                         SPECIAL ISSUANCE INSTRUCTIONS
                          (SEE INSTRUCTIONS 5 AND 6)

To be completed ONLY if Outstanding Notes in a principal amount not tendered,
or New Notes issued in exchange for Outstanding Notes accepted for exchange,
are to be mailed or delivered to someone other than the undersigned, or to the
undersigned at an address other than that shown below the undersigned's
signature. Mail or deliver New Notes and/or Outstanding Notes to:

Name____________________________________________________________________________

Address:________________________________________________________________________

- --------------------------------------------------------------------------------
                              (Include Zip Code)

- --------------------------------------------------------------------------------
                (Tax Identification or Social Security Number)

- --------------------------------------------------------------------------------
                            (Please Type of Print)
[_] Check unexchanged Outstanding Notes delivered by book-entry transfer to the
    DTC account number set forth below:

DTC Account Number:_____________________________________________________________

                                      7



                                   IMPORTANT
                        PLEASE SIGN HERE WHETHER OR NOT
            OUTSTANDING NOTES ARE BEING PHYSICALLY TENDERED HEREBY
               (complete accompanying substitute form W-9 below)

X ______________________________________________________________________________

X ______________________________________________________________________________
           Signature(s) of Registered Holder(s) of Outstanding Notes

Dated __________, 2003

   (The above lines must be signed by the registered holder(s) of Outstanding
Notes as your name(s) appear(s) on the Outstanding Notes or on a security
position listing, or by person(s) authorized to become registered holder(s) by
a properly completed bond power from the registered holder(s), a copy of which
must be transmitted with this Letter of Transmittal. If Outstanding Notes to
which this Letter of Transmittal relate are held of record by two or more joint
holders, then all such holders must sign this Letter of Transmittal. If
signature is by a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation or other person acting in a fiduciary or
representative capacity, then such person must (i) set forth his or her full
title below and (ii) unless waived by the Issuer, submit evidence satisfactory
to the Issuer of such person's authority so to act. See Instruction 5 regarding
the completion of this Letter of Transmittal, printed below.)

Name(s): _______________________________________________________________________
                            (Please Type or Print)

Capacity (Full Title): _________________________________________________________

Address: _______________________________________________________________________
- --------------------------------------------------------------------------------
                              (Include Zip Code)

Area Code and Telephone Number:_________________________________________________

Taxpayer Identification or Social Security Number:______________________________

                                      8



                         MEDALLION SIGNATURE GUARANTEE
                        (if required by Instruction 5)

Certain signatures must be guaranteed by an Eligible Institution. Please read
Instruction 5 of this Letter of Transmittal to determine whether a signature
guarantee is required for the tender of your Outstanding Notes.

Signature(s) Guaranteed by an Eligible Institution: ____________________________
                            (Authorized Signature)

- --------------------------------------------------------------------------------
                                    (Title)

- --------------------------------------------------------------------------------
                                (Name of Firm)

- --------------------------------------------------------------------------------
                         (Address, Including Zip Code)

- --------------------------------------------------------------------------------
                       (Area Code and Telephone Number)

Dated: ___________________________________________________________________, 2003

                                      9



                     INSTRUCTIONS TO LETTER OF TRANSMITTAL
        FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER

   1.  Delivery of this Letter of Transmittal and Outstanding Notes or Agent's
Message and Book-Entry Confirmation.  All physically delivered Outstanding
Notes or any confirmation of a book-entry transfer to the Exchange Agent's
account at the DTC of Outstanding Notes tendered by book-entry transfer (a
"Book-Entry Confirmation"), as well as a properly completed and duly executed
copy of this Letter of Transmittal or facsimile hereof (or an agent's message
in lieu hereof), and any other documents required by this Letter of Transmittal
must be received by the Exchange Agent at its address set forth herein on or
prior to 5:00 p.m., New York City time, on the Expiration Date for the Exchange
Offer, or the tendering holder must comply with the guaranteed delivery
procedures set forth below. Outstanding Notes tendered hereby must be in
denominations of principal amount of $1,000 and any integral multiple thereof.
The method of delivery of the tendered Outstanding Notes, this Letter of
Transmittal and all other required documents to the Exchange Agent is at the
election and risk of the holder and, except as otherwise provided below, the
delivery will be deemed made only when actually received or confirmed by the
Exchange Agent. Instead of delivery by mail, it is recommended that the holder
use an overnight or hand delivery service. In all cases, sufficient time should
be allowed to ensure delivery to the Exchange Agent before the Expiration Date.
NEITHER THIS LETTER OF TRANSMITTAL NOR OUTSTANDING NOTES SHOULD BE SENT TO THE
ISSUER.

   All questions as to the validity, form, eligibility (including time of
receipt) or acceptance of tendered Outstanding Notes and withdrawal of tendered
Outstanding Notes will be determined by the Issuer in its sole discretion,
which determination will be final and binding. The Issuer reserves the absolute
right to reject any and all Outstanding Notes not properly tendered or any
Outstanding Notes the Issuer's acceptance of which would, in the opinion of
counsel for the Issuer, be unlawful. The Issuer also reserves the right to
waive any defects, irregularities or conditions of tender as to particular
Outstanding Notes. The Issuer's interpretation of the terms and conditions of
the Exchange Offer (including the instructions in this Letter of Transmittal)
shall be final and binding on all parties. Unless waived, any defects or
irregularities in connection with tenders of Outstanding Notes must be cured
within such time as the Issuer shall determine. Neither the Issuer, the
Exchange Agent nor any other person shall be under any duty to give
notification of defects or irregularities with respect to tenders of
Outstanding Notes, nor shall any of them incur any liability for failure to
give such notification. Tenders of Outstanding Notes will not be deemed to have
been made until such defects or irregularities have been cured or waived. Any
Outstanding Notes received by the Exchange Agent that are not properly tendered
and as to which the defects or irregularities have not been cured or waived
will be returned by the Exchange Agent to the tendering holders of Outstanding
Notes, unless otherwise provided in this Letter of Transmittal, as soon as
practicable following the Expiration Date. See "The Exchange Offer" section of
the Prospectus.

   2.  Guaranteed Delivery Procedures.  Holders who wish to tender their
Outstanding Notes and (a) whose Outstanding Notes are not immediately
available, or (b) who cannot deliver their Outstanding Notes, this Letter of
Transmittal or any other documents required hereby to the Exchange Agent prior
to the Expiration Date, or (c) who are unable to comply with the applicable
procedures under the DTC's Automated Tender Offer Program on a timely basis,
must tender their Outstanding Notes according to the guaranteed delivery
procedures set forth in the Prospectus.

   Pursuant to such procedures:

  .   such tender must be made by or through a financial institution (including
      most banks, savings and loan associations, and brokerage houses) that is
      a participant in the Securities Transfer Agents' Medallion Program, the
      New York Stock Exchange Medallion Program or the Stock Exchanges'
      Medallion Program approved by the Securities Transfer Association Inc.
      (an "Eligible Institution");

  .   prior to the Expiration Date, the Exchange Agent must have received from
      the Eligible Institution a properly completed and duly executed Notice of
      Guaranteed Delivery (by facsimile transmission, mail or hand delivery) or
      a properly transmitted agent's message and Notice of Guaranteed Delivery
      setting

                                      10



     forth the name and address of the holder of the Outstanding Notes, the
      registration number(s) of such Outstanding Notes and the total principal
      amount of Outstanding Notes tendered, stating that the tender is being
      made thereby and guaranteeing that, within three New York Stock Exchange
      trading days after such Expiration Date, this Letter of Transmittal (or
      facsimile hereof or an agent's message in lieu hereof) together with the
      Outstanding Notes in proper form for transfer (or a Book-entry
      Confirmation) and any other documents required by this Letter of
      Transmittal will be deposited by the Eligible Institution with the
      Exchange Agent; and

  .   this Letter of Transmittal (or a facsimile hereof or an agent's message
      in lieu hereof) together with the certificates for all physically
      tendered Outstanding Notes in proper form for transfer (or Book-entry
      Confirmation, as the case may be) and all other documents required hereby
      are received by the Exchange Agent within three New York Stock Exchange
      trading days after such Expiration Date.

   Any holder of Outstanding Notes who wishes to tender Outstanding Notes
pursuant to the guaranteed delivery procedures described above must ensure that
the Exchange Agent receives the Notice of Guaranteed Delivery prior to 5:00
p.m., New York City time, on the Expiration Date. Upon request of the Exchange
Agent, a Notice of Guaranteed Delivery will be sent to holders who wish to
tender their Outstanding Notes according to the guaranteed delivery procedures
set forth above. See "The Exchange Offer--Guaranteed Delivery Procedures"
section of the prospectus.

   3.  Tender by Holder.  Only a registered holder of Outstanding Notes may
tender such Outstanding Notes in the Exchange Offer. Any beneficial holder of
Outstanding Notes who is not the registered holder and who wishes to tender
should arrange with the registered holder to execute and deliver this Letter of
Transmittal on his behalf or must, prior to completing and executing this
Letter of Transmittal and delivering his Outstanding Notes, either make
appropriate arrangements to register ownership of the Outstanding Notes in such
holder's name or obtain a properly completed bond power from the registered
holder.

   4.  Partial Tenders (Not Applicable to Holders Who Tender by Book-Entry
Transfer).  Tenders of Outstanding Notes will be accepted only in integral
multiples of $1,000. If less than the entire principal amount of any
Outstanding Notes is tendered, the tendering holder should fill in the
principal amount tendered in the third column of the box entitled "Description
of Outstanding Notes Tendered" above. The entire principal amount of
Outstanding Notes delivered to the Exchange Agent will be deemed to have been
tendered unless otherwise indicated. If the entire principal amount of all
Outstanding Notes is not tendered, then Outstanding Notes for the principal
amount of Outstanding Notes not tendered and New Notes issued in exchange for
any Outstanding Notes accepted will be returned to the holder as promptly as
practicable after the Outstanding Notes are accepted for exchange.

   5.  Signatures on this Letter of Transmittal; Bond Powers and Endorsements;
Medallion Guarantee of Signatures.  If this Letter of Transmittal (or facsimile
hereof) is signed by the record holder(s) of the Outstanding Notes tendered
hereby, the signature(s) must correspond exactly with the name(s) as written on
the face of the Outstanding Notes without alteration, enlargement or any change
whatsoever. If this Letter of Transmittal (or facsimile hereof) is signed by a
participant in the DTC, the signature must correspond with the name as it
appears on the security position listing as the holder of the Outstanding Notes.

   If any tendered Outstanding Notes are owned of record by two or more joint
owners, all of such owners must sign this Letter of Transmittal.

   If this Letter of Transmittal (or facsimile hereof) is signed by the
registered holder(s) of Outstanding Notes listed and tendered hereby and the
New Notes issued in exchange therefor are to be issued (or any untendered
principal amount of Outstanding Notes is to be reissued) to the registered
holder(s), then said holder(s) need not and should not endorse any tendered
Outstanding Notes, nor provide a separate bond power. In any other case, such
holder(s) must either properly endorse the Outstanding Notes tendered or
transmit a properly completed separate bond power with this Letter of
Transmittal, with the signatures on the endorsement or bond power guaranteed by
an Eligible Institution.

                                      11



   If this Letter of Transmittal (or facsimile hereof) or any Outstanding Notes
or bond powers are signed by a trustee, executor, administrator, guardian,
attorney-in-fact, officer of a corporation or other person acting in a
fiduciary or representative capacity, such person should so indicate when
signing, and, unless waived by the Issuer, evidence satisfactory to the Issuer
of their authority to act must be submitted with this Letter of Transmittal.

   No signature guarantee is required if (i) this Letter of Transmittal (or
facsimile hereof) is signed by the registered holder(s) of the Outstanding
Notes tendered herein (or by a participant in the DTC whose name appears on a
security position listing as the owner of the tendered Outstanding Notes) and
the New Notes are to be issued directly to such registered holder(s) (or, if
signed by a participant in the DTC, deposited to such participant's account at
the DTC) and neither the box entitled "Special Delivery Instructions" nor the
box entitled "Special Registration Instructions" has been completed, or (ii)
such Outstanding Notes are tendered for the account of an Eligible Institution.
In all other cases, all signatures on this Letter of Transmittal (or facsimile
hereof) must be guaranteed by an Eligible Institution.

   6.  Special Issuance and Delivery Instructions.  Tendering holders should
indicate, in the applicable box or boxes, the name and address to which New
Notes or substitute Outstanding Notes for principal amounts not tendered or not
accepted for exchange are to be issued or sent, if different from the name and
address of the person signing this Letter of Transmittal. In the case of
issuance in a different name, the taxpayer identification or social security
number of the person named must also be indicated. Holders tendering
Outstanding Notes by book-entry transfer may request that Outstanding Notes not
exchanged be credited to such account maintained at the DTC as such noteholder
may designate hereon. If no such instructions are given, such Outstanding Notes
not exchanged will be returned to the name and address (or account number) of
the person signing this Letter of Transmittal.

   7.  Transfer Taxes.  The Issuer will pay all transfer taxes, if any,
applicable to the exchange of Outstanding Notes pursuant to the Exchange Offer.
If, however, New Notes or Outstanding Notes for principal amounts not tendered
or accepted for exchange are to be delivered to, or are to be registered or
issued in the name of, any person other than the registered holder of the
Outstanding Notes tendered hereby, or if tendered Outstanding Notes are
registered in the name of any person other than the person signing this Letter
of Transmittal, or if a transfer tax is imposed for any reason other than the
exchange of Outstanding Notes pursuant to the Exchange Offer, then the amount
of any such transfer taxes (whether imposed on the registered holder or any
other persons) will be payable by the tendering holder. If satisfactory
evidence of payment of such taxes or exemption therefrom is not submitted with
this Letter of Transmittal, the amount of such transfer taxes will be billed
directly to such tendering holder and the Exchange Agent will retain possession
of an amount of New Notes with a face amount at least equal to the amount of
such transfer taxes due by such tendering holder pending receipt by the
Exchange Agent of the amount of such taxes.

   8.  Tax Identification Number.  Federal income tax law requires that a
holder of any Outstanding Notes or New Notes must provide the Issuer (as payor)
with its correct taxpayer identification number ("TIN"), which, in the case of
a holder who is an individual, is his or her social security number. If the
Issuer is not provided with the correct TIN, the holder or payee may be subject
to a $50 penalty imposed by Internal Revenue Service and backup withholding,
currently at a rate of 28%, on interest payments on the New Notes.

   To prevent backup withholding, each tendering holder and each prospective
holder must provide such holder's correct TIN by completing the Substitute Form
W-9 set forth herein, certifying that the TIN provided is correct (or that such
holder is awaiting a TIN), and that (i) the holder has not been notified by the
Internal Revenue Service that such holder is subject to backup withholding as a
result of failure to report all interest or dividends or (ii) the Internal
Revenue Service has notified the holder that such holder is no longer subject
to backup withholding. If the New Notes will be registered in more than one
name or will not be in the name of the actual owner, consult the instructions
on Internal Revenue Service Form W-9, which may be obtained from the Exchange
Agent, for information on which TIN to report.

                                      12



   If such holder does not have a TIN, such holder should consult the
instructions on Form W-9 concerning applying for a TIN, check the box in Part 3
of the Substitute Form W-9, write "applied for" in lieu of its TIN and sign and
date the form and the Certificate of Awaiting Taxpayer Identification Number.
Checking this box, writing "applied for" on the form and signing such
certificate means that such holder has already applied for a TIN or that such
holder intends to apply for one in the near future. If such holder does not
provide its TIN to the Issuer within 60 days, backup withholding will begin and
continue until such holder furnishes its TIN to the Issuer.

   Certain foreign individuals and entities will not be subject to backup
withholding or information reporting if they submit a Form W-8BEN, signed under
penalties of perjury, attesting to their foreign status. A Form W-8BEN can be
obtained from the Exchange Agent.

   The Issuer reserves the right in its sole discretion to take whatever steps
are necessary to comply with the Issuer's obligations regarding backup
withholding.

   9.  Validity of Tenders.  All questions as to the validity, form,
eligibility (including time of receipt), acceptance and withdrawal of tendered
Outstanding Notes will be determined by the Issuer in its sole discretion,
which determination will be final and binding. The Issuer reserves the absolute
right to reject any and all Outstanding Notes not properly tendered or any
Outstanding Notes the Issuer's acceptance of which might, in the opinion of the
Issuer or its counsel, be unlawful. The Issuer also reserves the absolute right
to waive any conditions of the Exchange Offer or defects or irregularities of
tenders as to particular Outstanding Notes. The Issuer's interpretation of the
terms and conditions of the Exchange Offer (including this Letter of
Transmittal and the instructions hereto) shall be final and binding on all
parties. Unless waived, any defects or irregularities in connection with
tenders of Outstanding Notes must be cured within such time as the Issuer shall
determine. Neither the Issuer, the Exchange Agent nor any other person shall be
under any duty to give notification of defects or irregularities with respect
to tenders of Outstanding Notes nor shall any of them incur any liability for
failure to give such notification. Any Outstanding Notes received by The
Exchange Agent that are not properly tendered and as to which the defects or
irregularities have not been cured or waived will be returned to the tendering
holder as soon as practicable following the Expiration Date.

   10.  Waiver of Conditions.  The Issuer reserves the absolute right to waive,
in whole or part, any of the conditions to the Exchange Offer set forth in the
Prospectus.

   11.  No Conditional Tender.  No alternative, conditional, irregular or
contingent tender of Outstanding Notes will be accepted.

   12.  Mutilated, Lost, Stolen or Destroyed Outstanding Notes.  Any holder
whose Outstanding Notes have been mutilated, lost, stolen or destroyed should
contact the Exchange Agent at the address indicated above for further
instructions. This Letter of Transmittal and related documents cannot be
processed until the procedures for replacing lost, stolen or destroyed
Outstanding Notes have been followed.

   13.  Requests for Assistance or Additional Copies.  Requests for assistance
or for additional copies of the Prospectus or this Letter of Transmittal may be
directed to the Exchange Agent at the address or telephone number set forth on
the cover page of this Letter of Transmittal. Holders may also contact their
broker, dealer, commercial bank, trust company or other nominee for assistance
concerning the Exchange Offer.

   14.  Withdrawal.  Tenders may be withdrawn only pursuant to the limited
withdrawal rights set forth in the Prospectus under the caption "The Exchange
Offer--Withdrawal of Tenders."

   IMPORTANT: This Letter of Transmittal or a manually signed facsimile hereof
or an agent's message in lieu thereof (together with the Outstanding Notes
delivered by book-entry transfer or in original hard copy form) must be
received by the Exchange Agent, or the Notice of Guaranteed Delivery must be
received by the Exchange Agent, prior to the Expiration Date.

                                      13



                                                                    
                              Part I--PLEASE PROVIDE YOUR                 -------------------------
                              TIN IN THE BOX AT RIGHT AND                       Social Security Number
                              CERTIFY BY SIGNING AND                      or
                              DATING BELOW.                               -------------------------
SUBSTITUTE                                                                        Employer ID Number
                              --------------------------------------------------------------------------------------
                              Part 2--Certifications--Under penalties of perjury, I certify that:
Form W-9
                              (1) The number shown on this form is my correct Taxpayer Identification Number
Department of the Treasury        Department of the Treasury (or I have checked the box in Part 3 and executed
Internal Revenue Service          the Certificate of awaiting taxpayer identification number below) and

Payer's Request for Taxpayer  (2) I am not subject to backup withholding either because I have not been notified
Identification Number ("TIN")     by the Internal Revenue Service ("IRS") that I am subject to backup
                                  withholding as a result of failure to report all interest or dividends, or because
                                  the IRS has notified me that I am no longer subject to backup withholding.

                              Certification Instructions--You must cross out item (2) in Part 2 above if you have
                              been notified by the IRS that you are subject to backup withholding because of
                              underreporting interest or dividends on your tax return. However, if after being
                              notified by the IRS that you are subject to backup withholding you received another
                              notification from the IRS stating that you are no longer subject to backup
                              withholding, do not cross out item (2).
                              --------------------------------------------------------------------------------------
                              Name____________________________            Part 3

                              Address_________________________            Awaiting TIN  [_]

                              -------------------------                   Please complete the certificate of
                                  City, State and Zip Code                Awaiting Taxpayer Identification
                                                                          Number below.
                              ________________  ________, 2003
                                    Signature        Date



         FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
                WITHHOLDING OF 28% OF ANY PAYMENTS MADE TO YOU
                        WITH RESPECT TO THE NEW NOTES.

          YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED
                 THE BOX IN PART 3 OF THE SUBSTITUTE FORM W-9

            CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER

    I certify under penalties of perjury that a taxpayer identification number
 has not been issued to me, and either (a) I have mailed or delivered an
 application to receive a taxpayer identification number to the appropriate
 Internal Revenue Service Center or Social Security Administration Office or
 (b) I intend to mail or deliver an application in the near future. I
 understand that if I do not provide a taxpayer identification number to the
 payor within 60 days, 28% of all reportable payments made to me thereafter
 will be withheld until I provide a number.

             -------------------------  -------------------------
                     Signature                    Date

                                      14