8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

Current Report

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (date of earliest event reported): August 3, 2006

LYONDELL CHEMICAL COMPANY

(Exact name of registrant as specified in its charter)

Delaware

(State or other jurisdiction of incorporation)

1-10145	95-4160558
(Commission File Number)	(I.R.S. Employer Identification No.)
1221 McKinney Street, Suite 700, Houston, Texas	77010
(Address of principal executive offices)	(Zip Code)

(713) 652-7200

(Registrant’s telephone number, including area code)

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

The descriptions set forth below under each Item are qualified in their entirety by the full text of the respective documents to which they refer, which documents are filed herewith.

Item 1.01 Entry into a Material Definitive Agreement

On August 3, 2006, Lyondell Chemical Company (“Lyondell”) amended (1) its Receivables Purchase Agreement (the “Receivables Purchase Agreement Amendment”) dated as of December 17, 2003 among Lyondell Funding II, LLC as the seller, Lyondell as the servicer, the banks and other financial institutions party thereto as purchasers, and Citicorp USA, Inc. as asset agent and administrative agent for the purchasers, and (2) its Undertaking Agreement (the “Undertaking Agreement Amendment”) dated as of December 17, 2003. These amendments primarily excluded Millennium Chemicals Inc., a wholly-owned subsidiary of Lyondell, from certain events-of-default provisions, and addressed certain other changes. The Receivables Purchase Agreement Amendment and the Undertaking Agreement Amendment are being filed with this Current Report on Form 8-K as Exhibits 4.22(e) and 4.23(d), respectively.

Item 9.01

(c)	Exhibits
	4.22(e)	Amendment No. 5 dated as of August 3, 2006 to Receivables Purchase Agreement dated as of December 17, 2003 among Lyondell Funding II, LLC as the seller, Lyondell Chemical Company as the servicer, the banks and other financial institutions party thereto as purchasers, and Citicorp USA, Inc. as asset agent and administrative agent for the purchasers
	4.23(d)	Amendment No. 4 dated as of August 3, 2006 to Undertaking Agreement dated as of December 17, 2003

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

LYONDELL CHEMICAL COMPANY
By:	/s/ Kerry A. Galvin
Name:	Kerry A. Galvin
Title:	Senior Vice President and General Counsel

Date: August 9, 2006

INDEX TO EXHIBITS

Exhibit Number	Description
4.22(e)	Amendment No. 5 dated as of August 3, 2006 to Receivables Purchase Agreement dated as of December 17, 2003 among Lyondell Funding II, LLC as the seller, Lyondell Chemical Company as the servicer, the banks and other financial institutions party thereto as purchasers, and Citicorp USA, Inc. as asset agent and administrative agent for the purchasers
4.23(d)	Amendment No. 4 dated as of August 3, 2006 to Undertaking Agreement dated as of December 17, 2003

EX-4.22(E)

Exhibit 4.22(e)

AMENDMENT NO. 5 TO RECEIVABLES PURCHASE AGREEMENT

AMENDMENT dated as of August 3, 2006 to the RECEIVABLES PURCHASE AGREEMENT dated as of December 17, 2003 (as amended, the “Agreement”) among LYONDELL FUNDING II, LLC, a Delaware limited liability company (the “Seller”), LYONDELL CHEMICAL COMPANY, a Delaware corporation, as the Servicer (as hereinafter defined), the banks and other financial institutions listed on the signature pages hereof as the Initial Purchasers (the “Initial Purchasers”), and CITICORP USA, INC., a Delaware corporation (“CUSA”), as asset agent and administrative agent (the “Agent”) for the Purchasers.

The parties hereto agree as follows:

SECTION 1. Defined Terms. Unless otherwise specifically defined herein, each term used herein which is defined in the Agreement has the meaning assigned to such term in the Agreement.

SECTION 2. Amendments. (a) The following defined terms in Section 1.1 of the Agreement are amended to read in their entirety as follows:

“Lyondell Joint Ventures” means Equistar, LCR, Millennium and any Future Joint Venture; provided that upon the consummation of a Permitted LCR Sale (as defined in the Lyondell Undertaking), LCR shall no longer be a “Lyondell Joint Venture”.

“Material Debt” means Indebtedness of Lyondell and/or one or more of its Subsidiaries (including for this purpose the Lyondell Joint Ventures, but excluding LCR and Millennium and its Subsidiaries so long as such Person is not at the time a “Significant Subsidiary” for purposes of the instruments governing the Senior Notes or the Senior Subordinated Notes), arising in one or more related or unrelated transactions, in an aggregate principal amount exceeding $50,000,000.

“Receivables Pool” means at any time the aggregation of all then outstanding Receivables sold or otherwise transferred by the Originators to the Seller.

(b) Each reference to “Receivables” in the definitions of Credit and Collection Policy and Securitization Transaction is changed to “Pool Receivables”.

(c) Section 7.1(f) is amended to read in its entirety as follows:

(f) (i) any Transaction Party or any Material Subsidiary (x) shall commence a voluntary case or other proceeding seeking liquidation,

reorganization or other relief with respect to itself or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any substantial part of its property, or shall consent to any such relief or to the appointment of or taking possession by any such official in an involuntary case or other proceeding commenced against it, or shall make a general assignment for the benefit of creditors; or (y) shall fail generally to pay its debts as they become due; or (z) shall take any corporate action to authorize any of the foregoing; or (ii) an involuntary case or other proceeding shall be commenced against any Transaction Party or any Material Subsidiary seeking liquidation, reorganization or other relief with respect to it or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any substantial part of its property, and such involuntary case or other proceeding shall remain undismissed and unstayed for a period of 60 days; or (iii) an order for relief shall be entered against any Transaction Party or any Material Subsidiary under the federal bankruptcy laws as now or hereafter in effect (for purposes of this Section 7.1(f), a Material Subsidiary includes the Lyondell Joint Ventures, but excludes LCR and Millennium and its Subsidiaries so long as such Person is not at the time (x) an Originator or (y) a “Significant Subsidiary” for purposes of the instruments governing the Senior Notes or the Senior Subordinated Notes); or

(d) Section 7.1(k) is amended to read in its entirety as follows:

(k) (i) one or more judgments or orders for the payment of money shall be rendered by a court or other tribunal or governmental agency against the Seller or (ii) judgments or orders for the payment of money exceeding $50,000,000 in aggregate amount (exclusive of amounts covered by insurance as to which the carrier has not contested coverage) shall be rendered against a Transaction Party (other than the Seller) or any Subsidiary (including for this purpose the Lyondell Joint Ventures, but excluding LCR and Millennium and its Subsidiaries so long as such Person is not at the time (x) an Originator or (y) a “Significant Subsidiary” for purposes of the instruments governing the Senior Notes or the Senior Subordinated Notes), and such judgments or orders shall continue undischarged, unsatisfied and unstayed for a period of 30 days; or enforcement remedies in respect of any such judgments or orders shall be commenced; or

SECTION 3. Limited Waiver and Consent. The Purchasers hereby:

(a) waive the provisions of Section 5.3(o) of the Agreement to the extent necessary to permit execution and delivery of Amendment No. 1 to the

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Receivables Sale Agreement in substantially in the form of Exhibit A hereto, and authorize and direct the Agent to consent thereto;

(b) authorize and consent to the Agent’s consent to instruments tendered to it for its consent by the parties to the Receivables Sale Agreement as contemplated by said Amendment No. 1 so long as the Agent shall have received evidence satisfactory to it in its sole discretion that the Receivables to be thereby excluded from “Seller Receivables” (as defined in the Receivables Sale Agreement) would not be Eligible Receivables at such time under the Agreement; and

(c) authorize and consent to Agent’s execution and delivery of such further documents and instruments as may be requested of it and it may deem reasonably necessary or appropriate to confirm such exclusion of Receivables from Seller Receivables.

SECTION 4. Contingent Amendment. Effective if, as and when a Permitted LCR Acquisition (as defined in the Lyondell Undertaking) is consummated, the definition of Lyondell Joint Ventures in Section 1.1 of the Agreement is amended to read in its entirety as follows:

“Lyondell Joint Ventures” means Equistar, Millennium and any Future Joint Venture.

SECTION 5. Governing Law. This Amendment shall be governed by and construed in accordance with the laws of the State of New York.

SECTION 6. Counterparts. This Amendment may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.

SECTION 7. Effectiveness. This Amendment shall become effective on the first date on which the Agent shall have received counterparts hereof signed by each of the Required Purchasers, the Seller and the Servicer (or, in the case of any party as to which an executed counterpart shall not have been received, receipt by the Agent in form satisfactory to it of telegraphic, telex or other written confirmation from such party of execution of a counterpart hereof by such party).

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of the date first above written.

LYONDELL FUNDING II, LLC, as Seller
By:	/s/ Charles L. Hall
Name:	Charles L. Hall
Title:	Vice President and Controller
LYONDELL CHEMICAL COMPANY, as Servicer
By:	/s/ Charles L. Hall
Name:	Charles L. Hall
Title:	Vice President, Controller and Chief Accounting Officer

CITICORP USA, INC.
By:	/s/ David Jaffe
Name:	David Jaffe
Title:	Director Vice President

BANK OF AMERICA, N.A.
By:	/s/ Stephen King
Name:	Stephen King
Title:	Vice President

F-1

CREDIT SUISSE CAYMAN ISLANDS BRANCH
By:	/s/ Thomas R. Cantello
Name:	Thomas R. Cantello
Title:	Vice President
By:	/s/ Brian T. Caldwell
Title:	Brian T. Caldwell
Name:	Director

WELLS FARGO FOOTHILL, LLC
By:	/s/ Patrick McCormack
Name:	Patrick McCormack
Title:	Assistant Vice President

NATIONAL CITY BUSINESS CREDIT, INC., (formerly known as National City Commercial Finance, Inc.)
By:	/s/ Anthony Alexander
Name:	Anthony Alexander
Title:	Vice President

THE BANK OF NEW YORK
By:	/s/ Raymond J. Palmer
Name:	Raymond J. Palmer
Title:	Vice President

F-2

EX-4.23(D)

Exhibit 4.23(d)

AMENDMENT NO. 4 TO UNDERTAKING AGREEMENT

AMENDMENT dated as of August 3, 2006 to the Undertaking Agreement dated as of December 17, 2003 (as heretofore amended, the “Undertaking Agreement”) by LYONDELL CHEMICAL COMPANY, a Delaware corporation (“Lyondell”), in favor of the PURCHASERS (as defined in the Receivables Purchase Agreement dated as of December 17, 2003 (as amended, the “Receivables Agreement”) among Lyondell Funding II, LLC, as Seller, Lyondell, as Servicer, the Purchasers from time to time party thereto and Citicorp USA, Inc., as asset agent and administrative agent (the “Agent”) for the Purchasers) and CITICORP USA, INC., as Agent.

The parties hereto agree as follows:

SECTION 1. Defined Terms; References. Unless otherwise specifically defined herein, each term used herein which is defined in the Undertaking Agreement, or incorporated by reference therein, has the meaning assigned to such term in the Undertaking Agreement or so incorporated. Each reference to “hereof”, “hereunder”, “herein” and “hereby” and each other similar reference and each reference to “this Agreement” and each other similar reference contained in the Undertaking Agreement shall, after this Amendment becomes effective, refer to the Undertaking Agreement as amended hereby.

SECTION 2. Amendments. (a) Section 1.01 of the Undertaking Agreement is hereby amended by inserting the following definitions therein in correct alphabetical order:

“Permitted LCR Acquisition” means the acquisition by Lyondell, directly or indirectly, of the 41.25% equity interest in LCR which, at the date hereof, was not owned by it.

“Permitted LCR Sale” means (i) any sale or other disposition of all (but not less than all) of Lyondell’s direct or indirect ownership interest in LCR, provided that the net cash proceeds of such sale are used to prepay Indebtedness of Lyondell in compliance with the provisions of Section 3.12(b) or (ii) any sale or other disposition of all or substantially all of the assets of LCR, provided that the net proceeds of such sale or disposition in excess of amounts required to satisfy Indebtedness or other obligations of LCR are promptly distributed to the holders of equity interests in LCR and the portions thereof received by Lyondell or a Subsidiary (net of any applicable taxes) are used to prepay Indebtedness of Lyondell in compliance with the provisions of Section 3.12(b).

(b) The following definition in Section 1.01 of the Undertaking Agreement is amended to read in its entirety as follows:

“JV Subsidiaries” means each Subsidiary of Lyondell that directly holds an equity interest in any Lyondell Joint Venture.

(c) The proviso to Section 3.09 of the Undertaking Agreement is hereby amended by adding the phrase “other than a CA Obligor” immediately preceding the words “to incur”.

(d) Section 3.16 of the Undertaking Agreement is hereby amended by adding the following paragraph at the end thereof:

Notwithstanding the foregoing, the obligations relating to LCR set forth in this Section (and elsewhere in the Transaction Documents) shall no longer apply following consummation of a Permitted LCR Sale and application of the proceeds thereof.

(e) Section 3.19 of the Undertaking Agreement is hereby amended by adding the phrase “and a Permitted LCR Acquisition” immediately after the phrase “Lyondell’s acquisition of Millennium” in clause (iv) to the proviso thereto.

(f) For the avoidance of doubt, simultaneously with the consummation of a Permitted LCR Acquisition, then for all purposes of the Undertaking Agreement LCR shall cease to be a Lyondell Joint Venture and the Subsidiaries of Lyondell that hold an equity interest in LCR shall cease to be JV Subsidiaries.

SECTION 3. Representations of Lyondell. Lyondell represents and warrants that (i) the representations and warranties of Lyondell set forth in Article 2 of the Undertaking Agreement and Article IV of the Receivables Agreement will be true in all material respects on and as of the Amendment Effective Date (as defined below) with the same effect as though made on and as of such date, except to the extent such representations and warranties expressly relate to an earlier date and (ii) no Potential Event of Termination or Event of Termination will have occurred and be continuing on such date.

SECTION 4. Governing Law. This Amendment shall be governed by and construed in accordance with the laws of the State of New York.

SECTION 5. Counterparts. This Amendment may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.

SECTION 6. Effectiveness. This Amendment shall become effective on the date (the “Amendment Effective Date”) when the Agent shall have received counterparts hereof signed by each of the Required Purchasers and Lyondell (or, in the case of any party as to which an executed counterpart shall not have been received, the Agent shall have received in form satisfactory to it facsimile or other written confirmation from such party of execution of a counterpart hereof by such

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party). Promptly after the Amendment Effective Date occurs, the Agent shall notify Lyondell and the Purchasers thereof, and such notice shall be conclusive and binding on all parties hereto.

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of the date first above written.

LYONDELL CHEMICAL COMPANY
By:	/s/ Charles L. Hall
Name:	Charles L. Hall
Title:	Vice President, Controller and Chief Accounting Officer

CITICORP USA, INC.
By:	/s/ David Jaffe
Name:	David Jaffe
Title:	Director Vice President

BANK OF AMERICA, N.A.
By:	/s/ Stephen King
Name:	Stephen King
Title:	Vice President

F-1

CREDIT SUISSE CAYMAN ISLANDS BRANCH
By:	/s/ Thomas R. Cantello
Name:	Thomas R. Cantello
Title:	Vice President
By:	/s/ Brian T. Caldwell
Title:	Brian T. Caldwell
Name:	Director

WELLS FARGO FOOTHILL, LLC
By:	/s/ Patrick McCormack
Name:	Patrick McCormack
Title:	Assistant Vice President

NATIONAL CITY BUSINESS CREDIT, INC., (formerly known as National City Commercial Finance, Inc.)
By:	/s/ Anthony Alexander
Name:	Anthony Alexander
Title:	Vice President

THE BANK OF NEW YORK
By:	/s/ Raymond J. Palmer
Name:	Raymond J. Palmer
Title:	Vice President