Montedison S.p.A., et al.; Proposed Consent Agreement With Analysis To Aid Public Comment

FEDERAL TRADE COMMISSION

[File No. 941-0043]

Montedison S.p.A., et al.; Proposed Consent Agreement With

Analysis To Aid Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed consent agreement.

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SUMMARY: In settlement of alleged violations of federal law prohibiting

unfair acts and practices and unfair methods of competition, this

consent agreement, accepted subject to final Commission approval, would

require, among other things, the Royal Dutch Petroleum Company and the

Shell Group of Companies to divest all of Shell Oil's polypropylene

assets to Union Carbide Corporation, or to another Commission approved

acquirer, within six months; would require Montedison to relinquish

revenues under the profit sharing agreement from future U.S. licenses

by Mitsui Petrochemical Industries Ltd.; and would prohibit the company

from entering into similar agreements.

DATES: Comments must be received on or before March 28, 1995.

ADDRESSES: Comments should be directed to: FTC/Office of the Secretary,

Room 159, 6th Street and Pennsylvania Avenue NW., Washington, D.C.

20580.

FOR FURTHER INFORMATION CONTACT:

Howard Morse or Rhett Krulla, FTC/S-3627, Washington, D.C. 20580. (202)

326-6320 or 326-2608.

SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal

Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46 and Section 2.34 of

the Commission's Rules of Practice (16 CFR 2.34), notice is hereby

given that the following consent agreement containing a consent order

to cease and desist, having been filed with and accepted, subject to

final approval, by the Commission, has been placed on the public record

for a period of sixty (60) days. Public comment is invited. Such

comments or views will be considered by the Commission and will be

available for inspection and copying at its principal office in

accordance with Section 4.9(b)(6)(ii) of the Commission's Rules of

Practice (16 CFR 4.9(b)(6)(ii).

In the matter of Montedison S.p.A., a corporation, HIMONT

Incorporated, a corporation, Royal Dutch Petroleum Company, a

corporation, The ``Shell'' Transport and Trading Company, p.l.c., a

corporation, and Shell Oil Company, a corporation, File No. 941-

0043.

Agreement Containing Consent Order

The Federal Trade Commission (``the Commission''), having initiated

an investigation of the proposed formation of a joint venture between

Montedison S.p.A. and HIMONT Incorporated (collectively ``Montedison'')

and Shell Petroleum N.V., a holding company of the Royal Dutch/Shell

Group of Companies (``the Shell Group'') controlled by N.V. Koninklijke

Nederlandsche Petroleum Maatschappij (Royal Dutch Petroleum Company)

(``Royal Dutch'') and The ``Shell'' Transport and Trading Company,

p.l.c. (``Shell T&T''), that would merge certain assets and businesses

of Montedison and of companies of the Shell Group and it now appearing

that Royal Dutch, Shell T&T, and Shell Oil Company (``Shell Oil''), a

company of the Shell Group, (collectively ``Shell'') and Montedison,

all collectively hereinafter sometimes referred to as ``proposed

respondents,'' are willing to enter into an agreement containing an

order to exclude certain assets and businesses from the joint venture,

to divest certain assets and businesses, and to cease and desist from

making certain acquisitions, and providing for other relief:

It is hereby agreed by and between proposed respondents, by their

duly authorized officers and attorneys, and counsel for the Commission

that:

1. Proposed respondent Montedison S.p.A. is a corporation

organized, existing and doing business under and by virtue of the laws

of Italy with its principal executive offices located at Foro

Buonaparte, 31, 20121 Milan, Italy.

2. Proposed respondent HIMONT Incorporated is a corporation

organized, existing and doing business under and by virtue of the laws

of the State of [[Page 5415]] Delaware with its principal executive

offices located at Three Little Falls Centre, 2801 Centerville Road,

Wilmington, Delaware 19850-5439. HIMONT Incorporated is a wholly-owned,

indirect subsidiary of Montedison S.p.A.

3. Proposed respondent Royal Dutch is a corporation organized,

existing and doing business under and by virtue of the laws of the

Netherlands with its principal executive offices located at Carel van

Bylandtlaan 30, The Hague, The Netherlands. Royal Dutch is a holding

company which, together with Shell T&T, controls the Shell Group.

4. Proposed respondent Shell T&T is a corporation organized,

existing and doing business under and by virtue of the laws of England

with its principal executive offices located at Shell Centre, London

SE1 7NA, England. Shell T&T is a holding company which, together with

Royal Dutch, controls the Shell Group.

5. Proposed respondent Shell Oil is a corporation organized,

existing and doing business under and by virtue of the laws of Delaware

with its principal executive offices located at One Shell Plaza,

Houston, Texas 77002. Shell Oil is a member company of the Shell Group,

and all of its shares are directly or indirectly owned by Royal Dutch

and Shell T&T.

6. Proposed respondents admit, for purposes of this Agreement and

Order and any related enforcement action, all the jurisdictional facts

set forth in the draft of complaint.

7. Proposed respondents waive:

(a) any further procedural steps;

(b) the requirement that the Commission's decision contains a

statement of findings of fact and conclusions of law;

(c) all rights to seek judicial review or otherwise to challenge or

contest the validity of the Order entered pursuant to this Agreement;

and

(d) any claim under the Equal Access to Justice Act.

8. This Agreement shall not become part of the public record of the

proceeding unless and until it is accepted by the Commission. If this

Agreement is accepted by the Commission it, together with the draft of

complaint contemplated thereby, will be placed on the public record for

a period of sixty (60) days and information in respect thereto

released. The Commission thereafter may either withdraw its acceptance

of this Agreement and so notify the proposed respondents, in which

event it will take such action as it may consider appropriate, or issue

and serve its complaint (in such forms as the circumstances may

require) and decision, in disposition of the proceeding.

9. This Agreement is for settlement purposes only and does not

constitute an admission by proposed respondents that the law has been

violated as alleged in the draft of complaint, or that the facts as

alleged in the draft of complaint, other than jurisdictional facts

admitted as specified above, are true.

10. This Agreement contemplates that, if it is accepted by the

Commission, and if such acceptance is not subsequently withdrawn by the

Commission pursuant to the provisions of Section 2.34 of the

Commission's Rules, the Commission may, without further notice to the

proposed respondents, (1) issue its complaint corresponding in form and

substance with the draft of complaint and its decision containing the

following Order to divest and to cease and desist in disposition of the

proceeding, and (2) make information public with respect thereto. When

so entered, the Order shall have the same force and effect and may be

altered, modified, or set aside in the same manner and within the same

time provided by statute for other orders. The Order shall become final

upon service. Delivery by the U.S. Postal Service of the complaint and

decision containing the agreed-to Order to proposed respondents'

attorneys of record, William C. Pelster, Esq., Skadden, Arps, Slate,

Meagher & Flom, 919 Third Avenue, New York, NY 10022, for Montedison;

Robert D. Joffe, Esq., Cravath, Swaine & Moore, 825 Eighth Avenue, New

York, NY 10019, for Royal Dutch and Shell T&T; and S. Allen Lackey,

Esq., Shell Oil Company, One Shell Plaza, Houston, Texas 77252, for

Shell Oil, shall constitute service. Proposed respondents waive any

right they may have to any other manner of service. The complaint may

be used in construing the terms of the Order, and no agreement,

understanding, representation or interpretation not contained in the

Order or this Agreement may be used to vary or contradict the terms of

the Order.

11. Proposed respondents have read the proposed complaint and Order

contemplated hereby. Proposed respondents understand that once the

Order has been issued, they will be required to file one or more

compliance reports showing they have fully complied with the Order.

Proposed respondents further understand that they may be liable for

civil penalties in the amount provided by law for each violation of the

Order after it becomes final.

Order

I

It is ordered that, as used in this Order, the following

definitions shall apply:

A. The following terms shall mean the following entities:

1. ``Montedison'' means Montedison S.p.A. and its wholly owned

subsidiary Montedison (Nederland) N.V., a holding company that owns

Montecatini Nederland B.V., which in turn owns, directly or indirectly,

through its subsidiaries HIMONT Incorporated, Spherilene S.r.l.,

Moplefan S.p.A. and Montepolmieri Sud, S.p.A., all of the polyolefins

interests of Montedison S.p.A. ``Montedison'' includes all

subsidiaries, divisions, and groups and affiliates controlled by

Montedison S.p.A., their respective successors and assigns, and their

respective directors, officers, employees, agents and representatives.

Unless otherwise indicated, ``Montedison'' does not include Montell.

2. ``HIMONT'' means HIMONT Incorporated. ``HIMON'' includes all

subsidiaries, divisions, and groups and affiliates controlled by

HIMONT, their respective successors and assigns, and their respective

directors, officers, employees, agents and representatives.

3. ``Shell'' means N.V. Koninklijke Nederlandsche Petroleum

Maatschappij (Royal Dutch Petroleum Company) (``Royal Dutch''), The

``Shell'' Transport and Trading Company, p.l.c. (``Shell T&T''), and

the Shell Group.

4. ``The Shell Group'' means all companies controlled by Royal

Dutch and/or Shell T&T, including Shell Oil and Shell Petroleum N.V.

``The Shell Group'' includes all subsidiaries, divisions, and groups

and affiliates controlled by companies of the Shell Group, Royal Dutch

or Shell T&T, their respective successors and assigns, and their

respective directors, officers, and agents and representatives. Unless

otherwise indicated, ``the Shell Group'' does not include Montell.

5. ``Shell Oil'' means Shell Oil Company. ``Shell Oil'' includes

all subsidiaries, divisions, and groups controlled by Shell Oil, their

respective successors and assigns, and their respective directors,

officers, agents and representatives. Unless otherwise indicated,

``Shell Oil'' does not include Polyco.

6. ``Montell'' means Montell Polyolefins, the corporation to be

formed, pursuant to the Agreement to Merge Polyolefins Businesses, to

hold the majority of the polyolefins businesses of Montedison and of

Shell and to be owned, directly or indirectly, [[Page 5416]] by

Montedison and companies of the Shell Group. ``Montell'' includes all

subsidiaries, divisions, and groups controlled by Montell, their

respective successors and assigns, and their respective directors,

officers, agents and representatives.

7. ``Montell Affiliates'' means companies that Montell controls as

that term is defined in 16 C.F.R. Sec. 801.1(b), except that this term

shall also include (i) any entity other than Montell in which Shell or

Montedison has an ownership interest of 25% or more as of December 1,

1994 and which interest is contributed to Montell, and (ii) companies

in which Montell has an ownership interest of 35% or more and would

have control as defined in 16 CFR 801.1(b) if ownership interests held

directly or indirectly by a government were excluded.

8. ``Technipol'' means a company to be formed and held separate by

Montedison under the terms and conditions of the attached Agreement to

Hold Separate. ``Technipol'' includes all subsidiaries, divisions, and

groups controlled by Technipol, their respective successors and

assigns, and their respective directors, officers, agents and

representatives.

9. ``Polyco'' means a company to be formed by Shell Oil to succeed

to and conduct, under the terms and conditions of this Order, the

Properties to Be Divested. ``Polyco'' includes all subsidiaries,

divisions, and groups controlled by Polyco, their respective successors

and assigns, and their respective directors, officers, agents and

representatives.

10. ``Akzo Nobel'' means Akzo Nobel N.V., Akzo Nobel Inc., Akzo

Chemicals BV and Akzo Chemicals Inc.

11. ``Mitsui'' means Mitsui Petrochemical Industries Ltd.

12. ``Union Carbide'' or ``UCC'' means Union Carbide Corporation.

B. ``Commission'' means the Federal Trade Commission.

C. ``Agreement to Merge Polyolefins Businesses'' means the

agreement between Montedison and Shell Petroleum N.V. (a company of the

Shell Group) dated December 30, 1993, and amendments thereto, to merger

the majority of the worldwide polyolefins businesses of Montedison and

of Shell into a new entity to be owned by Montedison and companies of

the Shell Group.

D. ``Propylene Polymers'' or ``PP'' means homopolymers of propylene

and copolymers or polyolefinic alloys of propylene with less than 50%

by mol of other monoolefins and having a flexural moduls (measured

according to ASTM D 790-71) higher than 4,000 Kg/cm2.

E. ``PP Catalyst'' means supported catalyst components including

compounds of transition metals of Groups IV-VIII of the Periodic Table,

at least in part supported on a carrier, the essential component of

which is a halogen-containing compound of magnesium, for use in

production of Propylene Polymers.

F. ``Catalyst Support'' means preformed catalyst supports or

support carriers which may be titanated, i.e., combined with titanium

or with a titanium containing compound, to produce PP Catalyst.

G. ``Catalyst Systems'' means specified combinations of PP Catalyst

and other components designed, developed, used, or suitable for use for

the production of Propylene Polymers.

H. ``PP Technology'' means technology relating to Propylene

Polymers and the production thereof, and to the preparation and use of

Catalyst Systems.

I. ``Catalyst Technology'' means technology relating to PP Catalyst

and to the production, preparation and use of PP Catalyst, Catalyst

Support and Catalyst Systems.

J. ``Shell Catalyst Technology'' means Catalyst Technology,

including Know-How and patent rights, developed, under development,

used, offered for license or licensed to any person by companies of the

Shell Group at any time prior to the date of transfer to Polyco of the

Properties to Be Divested.

K. ``Shell Oil Catalyst Technology'' means Catalyst Technology,

including Know-How and patent rights, developed, under development,

used, offered for license or licensed to any person by Union Carbide or

Shell Oil at any time prior to that date of transfer to Polyco of the

Properties to Be Divested.

L. ``Unipol PP Technology'' means PP Technology and Catalyst

Technology, including Know-How and patent rights, developed, under

development, offered for license, or licensed to any person by UCC and/

or Shell Oil in accordance with their Cooperative Undertaking Agreement

dated December 22, 1983, or used by UCC and Shell Oil in their

partnership PP facility at Seadrift, Texas at any time prior to the

date this Order becomes final.

M. ``Unipol/SHAC Technology Business'' means the research and

development, promotion, and licensing of Unipol PP Technology and Shell

Oil Catalyst Technology; the research and development of PP Catalyst,

Catalyst Support and Catalyst Systems utilizing Unipol PP Technology

and Shell Oil Catalyst Technology; rights and obligations under, and

activities conducted pursuant to, the Cooperative Undertaking Agreement

between UCC and Shell Oil dated December 22, 1983, and the

Polypropylene Catalyst Research and Development Agreement among Shell

Oil, UCC and Shell Internationale Research Maatschappij B.V. (``The

Tripartite Catalyst Research Agreement''); and the research and

development, production and sale of Propylene Polymers, and the

demonstration of Unipol PP Technology and Shell Oil Catalyst

Technology, pursuant to the Seadrift Polypropylene Company partnership

agreement between UCC and Shell Oil.

N. ``LIPP Process'' means PP Technology developed and used by Shell

for the production of Propylene Polymers through a bulk liquid

polymerization process.

O. ``Know-How'' means all relevant information, including

knowledge, experience and specifications.

P. ``Material Confidential Information'' means competitively

sensitive or proprietary information, not in the public domain,

concerning the PP Technology, Catalyst Technology, PP Catalyst,

Catalyst Support, or Propylene Polymers businesses.

Q. ``Properties to Be Divested'' means

1. All assets, tangible and intangible, of Shell Oil relating to PP

Technology, Catalyst Technology, Propylene Polymers and PP Catalyst,

including without limitation:

a. Shell Oil's Propylene Polymers plant and assets at Norco,

Louisiana, and Shell Oil's associated facilities at Norco, Louisiana

for splitting and separating polymer-grade propylene and propane from

chemical-grade propylene;

b. Shell Oil's PP Catalyst plant and assets at Norco, Louisiana;

c. Shell Oil's interest in the Seadrift Polypropylene Company and

the Propylene Polymers plant at Seadrift, Texas;

d. Shell Oil's PP Catalyst pilot plant;

e. Shell Oil's facilities and equipment (other than real property

and general, chemical analytical equipment) at the Westhollow

Technology Center at Houston, Texas, primarily utilized during the year

prior to the transfer to Polyco of the Properties to Be Divested in

research, development and technical support with respect to Shell Oil's

Propylene Polymers, PP Catalyst and Catalyst Technology businesses;

f. A rent-free lease, until five years from the date of divestiture

of the Properties to Be Divested or until such earlier date as the

acquirer may elect, to offices and research and development space at

the Westhollow Technology Center at Houston, Texas, associated with the

Properties to Be Divested; [[Page 5417]]

g. All owned or leased distribution facilities, rail cars and other

assets used in sales or technical service of Propylene Polymers or PP

Catalyst, other than real property at the headquarters offices, general

sales offices, and research center of Shell Oil;

h. All intellectual property, including patent rights, trade

secrets, technology and Know-How, relating to Catalyst Technology, PP

Catalyst, Catalyst Systems, and Propylene Polymers;

i. All customer lists, vendor lists, catalogs, sales promotion

literature, advertising materials, research materials, technical

information, management information systems, software, inventions,

specifications, designs, drawings, processes and quality control data;

j. All interest in and to the contracts entered into in the

ordinary course of business with customers (together with associated

bid and performance bonds), suppliers, sales representatives,

distributors, agents, personal property lessors, personal property

lessees, licensors, licensees, consignors and consignees, including

without limitation agreements with Shell Canada and Pecten, and rights

under warranties and guarantees, express or implied;

k. All books, records, and files;

l. Shell Oil's interest in owned or leased real property associated

with the Norco, Louisiana, and Seadrift, Texas, Propylene Polymers

plants, together with appurtenances, licenses and permits;

m. Shell Oil's interest in owned or leased improvements to real

property associated with the Norco, Louisiana, PP Catalyst plant,

together with appurtenances, licenses and permits, and a rent-free

lease to the land associated with the PP Catalyst plant for the life of

the plant;

n. Shell Oil's interest in the Unipol/SHAC Technology Business and

in the Cooperative Undertaking Agreement dated December 22, 1983,

including but not limited to all future revenue of Shell Oil from

Unipol PP Technology and Shell Catalyst Technology developed, under

development, offered for license, or licensed to any person by UCC or

Shell Oil at any time prior to the date of transfer to Polyco;

o. Exclusive world-wide rights to all Shell Oil trademarks and

trade names relating to Propylene Polymers other than Shell Oil

trademarks used by Shell Oil for its products generally, such as the

``SHELL'' mark and the Pecten emblem;

p. All licenses relating to the manufacture and sale of Propylene

Polymers and PP Catalyst or the licensing of PP Technology or Catalyst

Technology, including but not limited to Shell Oil's rights under the

following patents:

(1) All applicable patents of Shell;

(2) All patents of Montedison and Mitsui covered by the July 30,

1985 Agreement of Himont Incorporated, Mitsui, Union Carbide

Corporation, and Shell Chemical Company; any patent license agreements

between Montedison and Shell; and any patent license agreements between

Mitsui and Shell;

(3) Phillips U.S. Patent 4,376,851 ``crystalline polypropylene'';

(4) Studiengesellschaft Kohle U.S. Patent 4,125,698 covering

production of PP with a titanium chloride/DEAC catalyst; and

(5) Amoco Chemical Company patents covering ``PP Catalyst''

identified in the patent license agreement between Amoco and Shell Oil,

including Amoco U.S. Patent 4,540,679; Japan Patent Application 59350/

85 and European Patent Application 159,150; and

q. Shell Oil's rights under he Tripartite Catalyst Research

Agreement; the Polypropylene Agreement between Shell Research Limited

and Shell Oil Company; the PP Catalyst Patent Settlement Agreement

between Shell Internationale Research Maatschappij B.V. and Shell Oil

Company; and the July 30, 1985 Agreement of Himont Incorporated,

Mitsui, Union Carbide Corporation, and Shell Chemical Company, subject

to any necessary approval of parties not subject to this Order; and

2. All Shell's worldwide rights to the ``SHAC'' trademark; all

customer lists, records and files, all catalogs, and all sales

promotion literature relating to sales by Shell outside the United

States of PP Catalyst and Propylene Polymers manufactured by Shell Oil;

and all interest in and to contracts entered into by Shell in the

ordinary course of business with customers, sales representatives,

distributors and agents relating to the sale, outside the United

States, of PP Catalyst or Propylene Polymers manufactured by Shell Oil

(together with associated bid and performance bonds).

R. ``Viability and competitiveness'' means having the capability

and incentive to operate independently at annual levels of research and

development, licensing, production, and sales of PP Technology,

Catalyst Technology, PP Catalyst, Catalyst Support and Propylene

Polymers at least equal to levels experienced during each of the two

(2) calendar years immediately preceding the date of transfer to Polyco

of the Properties to Be Divested, and capable through its own resources

of functioning independently and competitively in the PP Technology,

Catalyst Technology, PP Catalyst, and Propylene Polymers businesses.

II

It is further ordered that:

A. Shell and Shell oil, as applicable, shall divest the Properties

to Be Divested, absolutely and in good faith, within six (6) months of

the date this Order becomes final, and shall also divest such

additional, ancillary assets and businesses and effect such

arrangements as are necessary to assure the marketability and the

Viability and Competitiveness of the Properties to Be Divested.

B. The period of six (6) months as specified in Paragraph II.A

shall be extended to March 31, 1997, if either of the following

conditions is satisfied:

1. Union Carbide declines, within thirty (30) days following

receipt by Union Carbide of the report of the independent appraiser, to

acquire the Properties to Be Divested for the fair market value of the

Properties to Be Divested as an operating business as determined by an

independent appraisal prepared in accordance with the following

procedure, or as otherwise agreed, or at such price as agreed, by Shell

Oil and Union Carbide:

a. Prior to the expiration of fifteen (15) days from the date this

Order becomes final shell Oil will notify Union Carbide of Shell Oil's

selection of an independent appraiser;

b. The independent appraiser selected by Shell Oil will perform the

appraisal unless within fifteen (15) days from notification of Shell

Oil's selected independent appraiser, Union Carbide objects to Shell

Oil's selected independent appraiser and notifies Shell Oil of its

selection of an independent appraiser;

c. Within fifteen (15) days from the date the name of Union

Carbide's selected independent appraiser is received by Shell Oil,

Shell Oil will either agree to Union Carbide's selected independent

appraiser or request that the two selected independent appraisers

jointly select, within ten (10) days of such request, another

independent appraiser;

d. The compensation paid to the independent appraiser shall be paid

by shell Oil or as otherwise agreed by Shell Oil and Union Carbide, and

the amount of compensation shall be independent of the amount of the

fair market value of the properties to Be Divested as determined by the

appraisal;

e. The independent appraiser shall be authorized by Shell to

question [[Page 5418]] personnel and examine all relevant books and

records, including personnel and books and records of the Unipol/SHAC

Technology Business, in connection with the appraisal under appropriate

confidentiality provisions;

f. The independent appraisal shall be completed and presented by

the appraiser to Union Carbide and Shell Oil within forty-five (45)

days of the selection of the appraiser as set forth in this Paragraph

II.B.1 of this Order; or

2. Union Carbide, within (30) days of receiving notice from Shell

Oil that Shell proposes to divest Polyco to a named acquirer approved

by the Commission, does not consent to the transfer of Polyco's

interest in the Cooperative Undertaking Agreement dated December 22,

1983, to such Commission approved acquirer.

C. In the event that, prior to the expiration of the six (6) months

specified in Paragraph II.A of this Order, the Commission has neither

approved nor disapproved, within sixty (60) days of receipt of the

application, an application for approval of a divestiture to a proposed

acquirer submitted in accordance with Paragraphs II.A and II.F of this

Order, the time period specified in Paragraph II.A of this Order may be

extended by the Commission by the number of days in excess of sixty

(60) required by the Commission to rule on the divestiture application

and, if the Commission approves divestiture to a person other than

Union Carbide, the Commission may further extend such period, if

necessary, by thirty (30) days in order to provide Shell Oil time to

comply with the requirements of Paragraph II.B.2 of this Order.

D. Provided further, if at the instance of Union Carbide over the

opposition of Shell, Shell is enjoined or otherwise prohibited by court

order from divesting the Properties to Be Divested, Shell shall

promptly give written notice of such order to the Commission, whereupon

the period within which Shell shall divest the Properties to Be

Divested under Paragraphs II.A, II.B or II.C of this Order shall be

extended to the earlier of (1) one year from the expiration of the time

specified in Paragraph II.A of this Order and such additional time as

may be allowed in Paragraphs II.B or II.C of this Order; or (2) ninety

(90) days after the injunction or other order expires.

E. Respondents shall comply with all terms of the Agreement to Hold

Separate, attached to this order and made a part hereof as Appendix I.

Said Agreement shall continue in effect until such time as Shell and

Shell Oil, as applicable, have divested all the Properties to Be

Divested or until such other time as the Agreement to Hold Separate

provides. Profits accumulated by Technipol during the period the

Agreement to Hold Separate is in effect shall be retained by Montedison

upon expiration of the Agreement to Hold Separate and shall in no event

be transferred to Montell or Shell.

F. Shell and Shell Oil, as applicable, shall divest the Properties

to Be Divested as an incorporated, ongoing business, identified herein

as ``Polyco'' and established in accordance with the attached Agreement

to Hold Separate, and shall divest the Properties to Be Divested only

to Union Carbide or to another acquirer or acquirers that receive the

prior approval of the Commission, and only in a manner that receives

the prior approval of the Commission. The purpose of the divestiture is

to ensure the continuation of Polyco as an ongoing and viable business

engaged in the research, development, manufacture and sale of PP

Catalyst and Propylene Polymers and in the research, development, and

licensing of PP Technology and Catalyst Technology, and to remedy the

lessening of competition resulting from the proposed acquisition as

alleged in the Commission's complaint.

G. The Properties to Be Divested shall be divested free and clear

of (1) all royalties, mortgages, encumbrances and liens to Shell or

Montell; and (2) any contractual commitments or obligations to Shell or

Montell existing as of the date of divestiture.

H. Should any transfer of an agreement, contract or license

required by Paragraph II.A of this Order not be possible after

reasonable effort by Shell and Shell Oil due to a person other than a

party to this Order withholding its consent to the transfer, Shell Oil

shall enter into an agreement with Polyco or the acquirer thereof the

purpose of which agreement is to realize the same effect as such

transfer. Shell Oil shall submit a copy of each such agreement with its

compliance reports to the Commission pursuant to Paragraphs VIII.A and

VIII.B of this Order. Further, Shell Oil shall secure, at its expense,

patent licenses, or assignments of patent licenses, extending to Polyco

and the acquirer thereof rights and royalty rates with respect to the

manufacture and sale of Propylene Polymers and PP Catalyst from the

Properties to Be Divested, and rights to expand production and sale, no

less favorable than those held by Shell Oil as of the date of transfer

to Polyco of the Properties to Be Divested.

III

It is further ordered that:

A. Prior to transfer of any assets or businesses from Shell into

Montell or merger of any part of Shell and Montell or Montedison, Shell

shall

1. Extend to Polyco, without royalty to Shell or Montell, Shell's

rights under agreements relating to the research and development,

manufacture and sale of PP Catalyst, Catalyst Support, and Catalyst

Systems by any person, including but not limited to nonexclusive rights

to sell, and to contract with Akzo Nobel for the production of, PP

Catalyst and Catalyst Support;

2. Disclose to Polyco all Shell Catalyst Technology in its

possession or to which it has rights;

3. Grant Polyco, without royalty to Shell or Montell, the

perpetual, non-exclusive right (1) to license, subject to the rights of

Union Carbide, Shell Catalyst Technology to any person worldwide; (2)

to sell worldwide to any person PP Catalyst and Catalyst Systems based

on Shell Catalyst Technology; and (3) to enforce intellectual property

rights with respect to Shell Catalyst Technology worldwide, including

without exclusion the right to sue any person who by the manufacture,

use or sale of any PP Catalyst or Catalyst System infringes any Shell

patent which has been applied for in any country in the world before

the date this Order becomes final. All costs of any such suit by Polyco

shall be borne by Polyco and all damages recovered shall be retained by

Polyco; and

4. Gant Polyco, without royalty to Shell or Montell, the exclusive

right, until seven years from the date of divestiture of the Properties

to Be Divested, (1) to license, subject to the rights of Union Carbide,

Shell Catalyst Technology to persons other than Montell and Montell

Affiliates; and (2) to sell to persons other than Montell and Montell

Affiliates (or LIPP Process licensees for use in their LIPP Process

plants) such PP Catalyst formulations or their equivalent as were

manufactured or sold by Shell, or manufactured for Shell by Akzo Nobel,

prior to the date this Order becomes final; and

B. Shell and Montell shall grant to Polyco and licensees of Unipol

PP Technology immunity under patents relating to PP Technology,

Catalyst Technology, PP Catalyst, Catalyst Support, Catalyst Systems or

Propylene Polymers, based on work conducted prior to December 31, 1997,

or prior to one year after divestiture of the Properties to Be

Divested, whichever is later, by persons who, as Shell personnel within

one (1) year prior to the date of the formation of Montell, had access

to Unipol PP Technology other [[Page 5419]] than in the public domain

and other than Catalyst Technology received by Shell Oil from other

companies of the Shell Group.

C. Until one (1) year after divestiture of the Properties to Be

Divested no Shell research personnel who, within one (1) year prior to

the date of the formation of Montell, had access to Unipol PP

Technology (other than Catalyst Technology received by Shell Oil from

other companies of the Shell Group) shall engage in research at

facilities of Montell on PP Technology, Shell Catalyst Technology or

Montedison Catalyst Tchnology. Provided, however, nothing in this Order

shall require Shell to conduct any research and development for any

person or to refrain from conducting research and development for, and

at the expense of, any person, including Montell and communicating

with, or receiving communications from, such person regarding such

research and development work. The results of any research and

development conducted by Shell prior to December 31, 1997, or one year

after divestiture of the Properties to Be Divested, whichever is later,

on Shell Catalyst Technology, including but not limited to research or

development conducted for, or at the expense of, Montell, shall be

provided to Polyco without payment for use in the Unipol/SHAC

Technology Business.

D. Shell (including former employees of Shell transferred to

Montell) shall not provide, disclose or otherwise make available to

Montedison, Technipol, Montell or Montell Affiliates any Material

Confidential Information relating to Unipol PP Technology or the

Unipol/SHAC Technology Business (other than Catalyst Technology

received by Shell Oil from other companies of the Shell Group),

provided however nothing in this Paragraph III.D of this Order shall

prohibit (1) Montell Affiliates who are licensees of Unipol PP

Technology from receiving information, in accordance with such license,

for use in their Unipol PP Technology licensed production facilities,

including information obtained by Shell, prior to the formation of

Montell, under The Tripartite Catalyst Research Agreement; and (2) any

communication between Shell and Montell necessary to ensure that

Montell and its employees make no unauthorized use or disclosure of any

Material Confidential Information.

E. Until two (2) years after divestiture of the Properties to Be

Divested, Shell, Montell and Technipol shall not employ, or make offers

of employment to, any person employed by Shall Oil whose principal

duties, during the year prior to the date of transfer to Polyco of the

Properties to Be Divested, related to the management, development or

operation of the Properties to Be Divested. This provision, however,

does not apply to employment by Shell Oil of any employee who is

terminated by Polyco or by the acquirer of the Properties to Be

Divested or who is not offered employment by Polyco or by the acquirer

of the Properties to Be Divested at a base salary that is at least

equivalent, and incentives and benefits that are comparable, to those

held by the employee prior to the divestiture of the Properties to Be

Divested. Provided, however, Shell Oil shall not be required to, but

may, terminate employment of any employee who refuses to accept

employment with Polyco; Shell Oil shall substitute alternative

personnel or equivalent qualifications, education and experience for

any persons declining to accept employment with Polyco who are not

terminated by Shell. Shell Oil shall encourage and facilitate

employment by Polyco or by the acquirer of the Properties to Be

Divested of employees whose principal duties, during the year prior to

the date of transfer to Polyco of the Properties to Be Divested,

related to the management, development or operation of the Properties

to Be Divested; shall not offer any incentive to such employees to

decline employment with Polyco or with the acquired or the Properties

to Be Divested or to accept other employment in Shell; and shall remove

any impediments that exist which may deter such employees from

accepting employment with Polyco or with the acquirer of the Properties

to Be Divested, including but not limited to the payment for the

benefit of the employees of all accrued bonuses, pensions and other

accrued benefits to which such employees are entitled as of the date of

the divestiture. Shall Oil shall not impose any loss of pension

benefits on employees to which such employees are entitled under the

Shell Oil pension plan as administered under ERISA.

IV

It is further ordered that from the date this Order becomes final

and continuing until three (3) years following the date of the

divestiture required by this Order, Shell shall, at Polyco's request or

at the request of the acquirer of the Properties to Be Divested,

contract with Polyco or the acquirer of the Properties to Be Divested

to supply to Polyco or the acquirer propylene monomer, in such

quantities and product grade as Polyco or the acquirer may request for

use in the Properties to Be Divested subject only to the capacity and

grade constraints of Shell's propylene monomer production facilities in

the United States and preexisting contractual obligations to persons

other than Shell, Montedison, and Montell. The price, terms, and

conditions at which Shell shall supply any grade of propylene monomer

to Polyco and to the acquirer of the Properties to Be Divested shall be

no less favorable to Polyco and the acquirer of the Properties to Be

Divested than the price, terms, and conditions at which Shell supplies

such grade of propylene monomer, directly or indirectly, to Montell in

North America, through exchange or otherwise.

V

It is further ordered that:

A. If Shell or Shell Oil, as applicable, has not divested,

absolutely and in good faith and with the Commission's prior approval,

the Properties to Be Divested within the time required by Paragraph

II.A of this Order or within such additional time as may be allowed in

Paragraphs II.B, II.C or II.D of this Order, the Commission may appoint

a trustee to divest the Properties to Be Divested. In the event that

the Commission or the Attorney General brings an action pursuant to

Sec. 5(l) of the Federal Trade Commission Act, 15 U.S.C. 45(l), or any

other statute enforced by the Commission, Shell shall consent to the

appointment of a trustee in such action. Neither the appointment of a

trustee nor a decision not to appoint a trustee under this Paragraph

shall preclude the Commission or the Attorney General from seeking

civil penalties or any other relief available to it, including a court-

appointed trustee, pursuant to 5(l) of the Federal Trade Commission

Act, or any other statute enforced by the Commission, for any failure

by Shell to comply with this Order.

B. If a trustee is appointed by the Commission or a court pursuant

to Paragraph V.A of this Order, Shell shall consent to the following

terms and conditions regarding the trustee's powers, duties, authority,

and responsibilities:

1. The Commission shall select the trustee, subject to the consent

of Shell, which consent shall not be unreasonably withheld. The trustee

shall be a person with experience and expertise in acquisitions and

divestitures. If Shell has not opposed, in writing, including the

reasons for opposing, the selection of any proposed trustee within ten

(10) days after notice by the staff of the Commission to Shell of the

identity of any proposed trustee, [[Page 5420]] Shell shall be deemed

to have consented to the selection of the proposed trustee.

2. Subject to the prior approval of the Commission, the trustee

shall have the exclusive power and authority to divest the Properties

to Be Divested.

3. Within ten (10) days after appointment of the trustee, Shell

shall execute a trust agreement that, subject to the prior approval of

the Commission and, in the case of a court-appointed trustee, of the

court, transfers to the trustee all rights and powers necessary to

permit the trustee to effect the divestiture required by this Order.

4. The trustee shall have twelve (12) months from the date the

Commission approves the trust agreement described in Paragraph V.B.3 to

accomplish the divestiture, which shall be subject to the prior

approval of the Commission. If, however, at the end of the twelve-month

period, the trustee has submitted a plan of divestiture or believes

that divestiture can be achieved within a reasonable time, the

divestiture period may be extended by the Commission, or, in the case

of a court-appointed trustee, by the court; provided, however, the

Commission may extend this period only two (2) times.

5. The trustee shall have full and complete access to the

personnel, books, records and facilities related to the Properties to

Be Divested or to any other relevant information, as the trustee may

request. Shell and Polyco shall develop such financial or other

information as such trustee may request and shall cooperate with the

trustee. Shell and Polyco shall take no action to interfere with or

impede the trustee's accomplishment of the divestitures. Any delays in

divestiture caused by Shell or Polyco shall extend the time for

divestiture under this Paragraph in an amount equal to the delay, as

determined by the Commission or, in the case of a court-appointed

trustee, by the court.

6. The trustee shall use his or her best efforts to negotiate the

most favorable price and terms available in each contract that is

submitted to the Commission, subject to Shell's absolute and

unconditional obligation to divest at no minimum price. The divestiture

shall be made in the manner and to the acquirer or acquirers as set out

in Paragraph II.A of this Order; provided, however, if the trustee

receives bona fide offers from more than one acquiring entity, and if

the Commission determines to approve more than one such acquiring

entity, the trustee shall divest to the acquiring entity or entities

selected by Shell from among those approved by the Commission.

7. The trustee shall serve, without bond or other security, at the

cost and expense of Shell, on such reasonable and customary terms and

conditions as the Commission or a court may set. The trustee shall have

the authority to employ, at the cost and expense of Shell, such

consultants, accountants, attorneys, investment bankers, business

brokers, appraisers, and other representatives and assistants as are

necessary to carry out the trustee's duties and responsibilities. The

trustee shall account for all monies derived from the divestiture and

all expenses incurred. After approval by the Commission or, in the case

of a court-appointed trustee, by the court, of the account of the

trustee, including fees for his or her services, all remaining monies

shall be paid at the direction of Shell and the trustee's power shall

be terminated. The trustee's compensation shall be based at least in

significant part on a commission arrangement contingent on the

trustee's divesting the Properties to Be Divested.

8. Shell shall indemnify the trustee and hold the trustee harmless

against any liabilities, losses, claims, damages, or expenses arising

out of, or in connection with, the performance of the trustee's duties,

including all reasonable fees of counsel and other expenses incurred in

connection with the preparation for, or defense of any claim, whether

or not resulting in any liability, except to the extent that such

liabilities, losses, claims, damages, or expenses result from

misfeasance, gross negligence, willful or wanton acts, or bad faith by

the trustee.

9. If the trustee ceases to act or fails to act diligently, a

substitute trustee shall be appointed in the same manner as provided in

Paragraph V.A. of this Order.

10. The Commission or, in the case of a court-appointed trustee,

the court, may on its own initiative or at the request of the trustee

issue such additional orders or directions as may be necessary or

appropriate to accomplish the divestiture required by this Order.

11. The trustee shall have no obligation or authority to operate or

maintain the Properties to Be Divested pending completion of the

divestiture.

12. The trustee shall report in writing to Shell Oil and the

Commission every sixty (60) days concerning the trustee's efforts to

accomplish divestiture.

VI

It is further ordered that:

A. Royal Dutch, Shell T&T and Montedison shall obligate Montell,

Montedison shall obligate Technipol, and Shell Oil shall obligate

Polyco, to be bound by this Order and insure compliance with this Order

by Montell, Technipol and Polyco, respectively.

B. Shell, Montedison and Montell shall not restrict any Montell

Affiliate from licensing PP Technology or Catalyst Technology from the

Unipol/SHAC Technology Business or Technipol or from purchasing PP

Catalyst or Catalyst Systems from Polyco or Technipol.

C. Polyco shall not withhold its consent, except for good cause, to

Union Carbide to grant or negotiate license fees and royalty rates

below those minimums specified in the Cooperative Undertaking Agreement

dated December 22, 1983, and attachments thereto.

D. Shell, Montedison, Montell and Technipol shall not enter into or

renew any agreement or understanding with any developer or licensor of

PP Technology or Catalyst Technology or any manufacturer, or seller of

PP Catalyst, Catalyst Support, or Catalyst Systems limiting the

geographic area within which, or limiting the persons to whom, such

person may license PP Technology or Catalyst Technology or may

manufacture and sell PP Catalyst, Catalyst Support, or Catalyst

Systems, unless such agreement or understanding relates exclusively to

markets other than the United States and has no effect on United States

commerce, including but not limited to export commerce. Nothing in this

Paragraph VI.D shall prohibit Shell, Montedison, Montell or Technipol

from legitimately designating a sales agent for the sale of, or

contract manufacturer for the production of, PP Catalyst or Propylene

Polymers in any geographic area, or from limiting the persons,

geographic area or uses for which they respectively grant legitimate

licenses of their PP Technology or Catalyst Technology.

E. Montedison, Montell and Technipol shall not (1) enforce any

provision in any agreement with Mitsui providing for sharing of

royalties with respect to licenses granted by Mitsui after the date

this Order becomes final for use of PP Technology and Catalyst

Technology in the United States in Propylene Polymers plants and in the

production of Propylene Polymers; or (2) enter into or renew any

agreement with Mitsui providing for sharing of royalties with respect

to licensing of PP Technology or Catalyst Technology in the United

States for use in Propylene Polymers plants and in the production of

Propylene Polymers.

VII

It is further ordered that, for a period of ten (10) years from the

date this Order [[Page 5421]] becomes final, Shell, Montedison and

Montell shall not, without the prior approval of the Commission,

directly or indirectly, through subsidiaries, partnerships, or

otherwise:

A. Acquire any stock, share capital, equity, or other interest in

any concern, corporate or non-corporate, other than the acquisition by

Shell or Montedison of additional shares of Montell, engaged in at the

time of such acquisition, or within two (2) years preceding such

acquisition engaged in,

1. the research and development (other than only implementation of

technology licensed from others), or sale or licensing to any person,

of PP Technology or Catalyst Technology anywhere in the world;

2. the research and development, sale, or manufacture for sale of

PP Catalyst, Catalyst Support, or Catalyst Systems anywhere in the

world; or

3. the manufacture or sale of Propylene Polymers in the United

States or Canada; or

B. Acquire any assets used for or previously used for (and still

suitable for use for)

1. the research and development (other than only implementation of

technology licensed from others), or sale or licensing to any person,

of PP Technology or Catalyst Technology anywhere in the world;

2. the research and development, sale, or manufacture for sale of

PP Catalyst, Catalyst Support, or Catalyst Systems anywhere in the

world; or

3. the manufacture or sale of Propylene polymers in the United

States or Canada.

Provided, however, these prohibitions shall not relate to the

construction of new facilities or the acquisition of new or used

equipment in the ordinary course of business from a person other than

the persons referred to in Paragraph VII.A of this Order. Provided,

further that this Paragraph VII of this Order shall not apply to the

acquisition of Technipol by Montell following completion of the

divestiture of the Properties to Be Divested and expiration of the

attached Hold Separate Agreement.

VIII

It is further ordered that:

A. Within sixty (60) days from the date this Order becomes final

and every sixty (60) days thereafter until Shell has fully complied

witht he provisions of Paragraphs II and V of this Order, Shell Oil

shall submit to the Commission a verified written report setting forth

in detail the manner and form in which it intends to comply, is

complying, and has complied with Paragraphs II and V of this Order.

Shell Oil shall include in its compliance reports, among other things

that are required from time to time, a full description of the efforts

being made to comply with Paragraphs II and V of the Order, including a

description of all substantive contacts or negotiations for the

divestitute and the identity of all parties contacted. Shell Oil shall

include in its compliance reports copies of all written communications

to and from such parties, all internal memoranda, and all reports and

recommendations concerning divestiture.

B. One (1) year from the date this Order becomes final, annually

for the next nine (9) years on the anniversary of the date this Order

becomes final, and at other times as the Commission may require, Royal

Dutch, Shell Oil, Montendison and Montell shall each file a verified

written report with the Commission setting forth in detail the manner

and form in which it has complied and is complying with this Order.

IX

It is further ordered that Royal Dutch, Shell T&T, Shell Oil,

Montedison and Montell shall each notify the Commission at least thirty

(30) days perior to any proposed change in such company, such as

dissolution, assignment, sale resulting in the emergence of a successor

corporation, or the creation or dissolution of subsidiaries or any

other change in such company that may affect compliance obligations

arising out of this Order.

X

It is further ordered that, for the purpose of determining or

securing compliance with this Order, and subject to any legally

recognized privilege, upon written request, and on reasonable notice,

Shell, Montedison and Montell shall each permit any duly authorized

representative of the Commission:

A. Access, during office hours and in the presence of counsel, to

inspect and copy all books, ledgers, accounts, correspondence,

momoranda, and other records and documents in the possession or under

the control of Shell, Montendison or Montell, as applicable, relating

to any matters contained in this Order; and

B. Upon five (5) days notice to Shell, Montedison or Montell and

without restraint or interference from it, to interview its officers,

directors or employees, who may have counsel present, regarding such

matters.

XI

It is further ordered that this Order shall terminate twenty (20)

years from the date this Order becomes final.

Attachment I

In the Matter of: Montedison S.p.A., a corporation, HIMONT

Incorporated, a corporation, Royal Dutch Petroleum Company, a

corporation, The ``Shell'' Transport and Trading Company, p.l.c., a

corporation, and Shell Oil Company, a corporation, File No. 941-

0043.

Agreement to Hold Separate

This Agreement to Hold Separate (``Agreement'') is by and among

Montedison S.p.A., a corporation organized, existing and doing business

under the laws of Italy with its principal executive offices located at

Foro Buonaparte, 31, 20121 Milan, Italy, and its wholly-owned

subsidiary, HIMONT Incorporated, a corporation organized, existing and

doing business under the laws of the State of Delaware with its

principal executive offices located at Three Little Falls Centre, 2801

Centerville Road, Wilmington, Delaware 19850-5439 (collectively

``Montedison''); Royal Dutch Petroleum Company, a corporation

organized, existing and doing business under the laws of the

Netherlands with its principal executive offices located at Carel van

Bylandtlaan 30, The Hague, The Netherlands, and The ``Shell'' Transport

and Trading Company, p.l.c., a corporation organized, existing and

doing business under the laws of England with its principal executive

offices located at Shell Centre, London SE1 7NA, England, and their

wholly-owned subsidiary, Shell Oil Company, a corporation organized,

existing and doing business under the laws of the State of Delaware

with its principal executive offices located at One Shell Plaza,

Houston, Texas 77002 (collectively ``Shell''); and the Federal Trade

Commission (the ``Commission''), an independent agency of the United

States Government, established under the Federal Trade Commission Act

of 1914, 15 U.S.C. Sec. 41, et seq. (collectively, the ``Parties'').

Premises

Whereas, on or about December 30, 1993, Montedison and Shell

Petroleum N.V., a holding company of the Shell Group, entered into an

agreement providing for the merger (hereinafter the ``Acquisition'') of

the majority of the polyolefin assets and businesses of Montedison

(hereinafter the ``Montedison Merged Assets'') and the majority of the

polyolefin assets and [[Page 5422]] businesses of Shell (hereinafter

the ``Shell Merged Assets''); and

Whereas, Montedison and Shell each develop a license PP Technology

and Catalyst Technology and each develop, manufacture and sell PP

Catalyst and Propylene Polymers; and

Whereas, Montedison will establish Technipol and hold Technipol

separate from Montell in accordance with the Decision of the Commission

of the European Communities in Case No. IV/M. 269-SHELL/MONTECATINI;

and

Whereas, the Commission is now investigating the Acquisition to

determine if it would violate any of the statutes enforced by the

Commission; and

Whereas, if the Commission accepts the attached Agreement

Containing Consent Order (``Consent Order''), which would require the

divestiture of certain assets, the Commission must place the Consent

Order on the public record for a period of at least sixty (60) days and

may subsequently withdraw such acceptance pursuant to the provisions of

Section 2.34 of the Commission's Rules; and

Whereas, the Commission is concerned that if an understanding is

not reached, preserving the status quo ante of the Montedison Merged

Assets and the Shell Merged Assets, respectively, during the period

specified in Paragraph 4 of this Agreement, divestiture resulting from

any proceeding challenging the legality of the Acquisition might not be

possible, or might be less than an effective remedy; and

Whereas, the Commission is concerned that if the Acquisition is

consummated, it will be necessary to preserve the Commission's ability

to require the divestiture of the Properties to Be Divested as

described in Paragraph I.Q of the Consent Order and the Commission's

right to have the Properties to Be Divested continue as a separate,

viable and independent entity; and

Whereas, the purpose of this Agreement and the Consent Order is to:

(i) Ppreserve the Properties to Be Divested, also referred to

herein as ``Polyco,'' as a viable business independent from Montedison,

pending the divestiture of the Properties to Be Divested as a viable

and ongoing enterprise;

(ii) Preserve Technipol as a viable business independent from

Shell, pending the divestiture of the Properties to Be Divested as a

viable and ongoing enterprise; and

(iii) Remedy any anticompetitive effects of the Acquisition; and

Whereas, Montedison's and Shell's entering into this Agreement

shall in no way be construed as an admission by Montedison and Shell

that the Acquisition is illegal, and this Agreement shall in no way be

construed as limiting in any way the obligations of Montedison and

Shell pursuant to the Decision of the Commission of the European

Communities in Case No. IV/M. 269-SHELL/MONTECATINI; and

Whereas, Montedison and Shell understand that no act or transaction

contemplated by this Agreement shall be deemed immune or exempt from

the provisions of the antitrust laws or the Federal Trade Commission

Act by reason of anything contained in this Agreement.

Now, therefore, upon understanding that the Commission has not yet

determined whether the Acquisition will be challenged, and in

consideration of the Commission's agreement that, unless the Commission

determines to reject the Consent Order, the Commission will not seek a

temporary restraining order, preliminary injunction, or permanent

injunction with respect to the Acquisition, and in recognition that the

Commission may exercise any and all rights to enforce this Agreement

and the Consent Order to which it is annexed and made a part thereof,

and, in the event the required divestiture is not accomplished, to seek

divestiture of the Properties to Be Divested and such other relief as

the Commission may consider appropriate, the Parties agree as follows:

1. Montedison and Shell agree that from the date this Agreement is

signed by Shell and Montedison until the earliest of the dates listed

in Paragraphs 1.a or 1.b, they each will comply with the provisions of

this Agreement:

a. Ten days after the Commission withdraws its acceptance of the

Consent Order pursuant to the provisions of Section 2.34 of the

Commission's Rules; or

b. The day after the divestiture required by the Consent Order has

been completed.

2. Montedison, Royal Dutch, Shell T&T and Shell Oil agree to

execute and be bound by the attached Agreement Containing Consent Order

and to comply, from the date this Agreement is accepted, with the

provisions of the Consent Order as if it were final.

3. The terms capitalized herein shall have the same definitions as

in the Consent Order. In addition, the following terms used herein

shall have the following definitions:

a. ``Montedison PP Technology'' means PP Technology and Catalyst

Technology, including Know-How and patent rights, developed, under

research and development, used, offered for license, or licensed to any

person by Montedison at any time prior to the date of transfer to

Technipol of the Montedison Properties to Be Transferred. For purposes

of this Agreement Catalloy process and related catalyst technology and

technology concerning the production of PP Catalyst or the production

of any other component of Catalyst Systems shall be excluded from

``Montedison PP Technology.''

b. ``Montedison Properties to Be Transferred'' means the

businesses, rights and interests, and other assets, tangible and

intangible, required to be transferred from Montedison to Technipol

pursuant to Paragraph 8 of this Agreement.

c. ``Existing Montedison Licenses'' means licenses of Montedison PP

Technology to persons other than Montell Affiliates in effect as of the

date of transfer to Technipol of the Montedison Properties to Be

Transferred and includes so-called ``catalyst use know-how licenses,''

``process know-how licenses'' and ``patent licenses.''

d. ``Improvements'' means all refinements, optimizations, or new

technical developments, patentable or unpatentable, of Know-How, PP

Technology and Catalyst Technology, with commercial application, other

than Major Advances.

e. ``Major Advances'' means all new technical developments of and

changes, patentable or unpatentable, to existing Know-How, PP

Technology and Catalyst Technology with commercial application, of the

type generally recognized in the industry as revolutionary or of major

consequence and would, upon commercial implementation, (a) reduce

production costs of Propylene Polymers by at least one (1) cent per

pound; (b) significantly increase the quality, productivity or selling

potential of the PP Catalyst, Catalyst Support or Catalyst System, or

the quality or selling potential of the Propylene Polymers; or (c)

enable production of new Propylene Polymers commercially competitive

primarily in end-uses for which Propylene Polymers produced and sold

commercially have not been previously suitable for technological

reasons. Major Advances include, for example:

i. In the case of PP Technology, elimination of a unit operation,

addition of a unit operation, or introduction of a new comonomer or

additive;

ii. In the case of PP Catalyst, a change in the major type of

Catalyst Support;

iii. In the case of Catalyst Systems, a change in the major type of

components [[Page 5423]] or elimination of one component together with

a type change in another component; and

iv. In the case of Propylene Polymers, new compositions or types

that display chemical and physical properties not previously achievable

by the relevant technology.

4. Montedison and Shell agree that from the date this Agreement is

signed by Montedison and Shell until March 1, 1995, Montedison will

hold the Montedison Merged Assets separate and apart from Shell and

from Montell, and Shell will hold the Shell Merged Assets separate and

apart from Montedison and from Montell.

5. Commencing prior to, or concurrently with, transfer to Montell

of the Shell Merged Assets, Shell will hold the Properties to Be

Divested as they are presently constituted (hereafter ``Polyco'')

separate and apart on the following terms and conditions:

a. Shell and Shell Oil, as applicable, shall transfer to Polyco all

ownership and control of the Properties to Be Divested. Polyco shall be

held separate and apart and shall be operated independently of Shell

(meaning here and hereinafter, Shell excluding Polyco and excluding all

personnel connected with Polyco as of the date this Agreement is

signed) except to the extent that Shell Oil must exercise direction and

control over Polyco to assure compliance with this Agreement or with

the Consent Order.

b. Shell Oil shall separately incorporate Polyco and cause Polyco

to adopt new Articles of Incorporation and By-laws and any other

required documents for Polyco that are not inconsistent with other

provisions of this Agreement. Shall Oil shall also elect a new six-

person board of directors of Polyco (``New Board'') prior to, or

concurrently with, transfer of any assets or businesses from Shell into

Montell or merger of any part of Shell and Montell or Montedison.

Questions before the New Board shall be approved by a simple majority

of the directors voting on the matter, provided that Polyco shall

engage in no transaction that is precluded by this Agreement or by the

Consent Order. Shell Oil may elect the directors to the New Board;

provided, however, that such New Board shall consist of at least three

outside directors neither previously nor currently employed by Shell or

Montedison; two officers of Polyco; and a maximum of one Shell Oil (but

not Royal Dutch, Shell T&T or Montell) director, officer, employee, or

agent; provided, further, that such Shell Oil director, officer,

employee or agent shall enter into a confidentiality agreement in

accordance with the provisions of Paragraph 5.h hereof and shall not be

a person involved in Shell or Montell's Propylene Polymers or PP

Catalyst businesses, as defined in Paragraph I. of the Consent Order.

Such director who is also a Shell Oil director, officer, employee or

agent shall participate in matters that come before the New Board only

for the limited purpose of carrying out Shell Oil's and Polyco's

responsibilities under this Agreement or under the Consent Order. Shell

Oil will take no action to delay or limit expansion of production

capacity by Polyco. Except as permitted by this Agreement, the Shell

Oil director shall not participate in any matter, or attempt to

influence the votes of the other directors with respect to matters,

including but not limited to expansion of capacity, that would involve

a conflict of interest if Shell Oil and Polyco were separate and

independent entities. In the case of deadlock by the New Board on any

question in which the Shell Oil director participates, a second vote

shall be taken on the question and the Shell Oil director shall not

vote. The New Board shall include a chairman who is independent of

Shell and is competent to assure the continual Viability and

Competitiveness of Polyco. Shell Oil shall notify the Commission in its

next compliance report submitted pursuant to Paragraph VIII.A of the

Consent Order of the identity and relevant qualifications and

experience of any person whom Shell Oil has appointed as an original or

subsequent director of Polyco.

c. Except for the single Shell Oil director, officer, employee, or

agent serving on the ``New Board'' (as defined in Paragraph 5.b), Shell

shall not permit any director, officer, employee or agent of Shell to

also be a director, officer, employee or agent of Polyco. In the event

any members of management of the Properties to Be Divested should

choose not to accept employment with Polyco, or should retire or

otherwise leave their management positions, the non-Shell (as Shell is

defined in Paragraph 5.a hereof) directors serving on the New Board (as

defined in Paragraph 5.b hereof) shall have the exclusive power to

replace such members of management.

d. Polyco shall be staffed with sufficient employees to maintain

the Viability and Competitiveness of the Properties to Be Divested.

Shell, Montell and Technipol shall not employ, or make offers of

employment to, any person employed by Shell Oil whose principal duties,

during the year prior to the date of transfer to Polyco of the

Properties to Be Divested, related to the management, development or

operation of the Properties to Be Divested. This provision, however,

does not apply to employment by Shell Oil of any employee who is

terminated by Polyco or who is not offered employment by Polyco at a

level of compensation and benefits at least equivalent to those held by

the employee prior to the date of transfer to Polyco of the Properties

to Be Divested. Shell Oil shall encourage and facilitate employment by

Polyco of Shell Oil employees who had line responsibility with respect

to the Properties to Be Divested in the year prior to the transfer to

Polyco of the Properties to Be Divested; shall not offer any incentive

to such employees to decline employment with Polyco or accept other

employment in Shell; and shall remove any impediments that exist which

may deter such employees from accepting employment with Polyco,

including but not limited to the payment, or transfer for the account

of the employee, of all accrued bonuses, pensions and other accrued

benefits to which such employees would otherwise have been entitled had

they remained in the employment of Shell Oil.

e. Shell shall not exercise direction or control over, or influence

directly or indirectly, Polyco; provided, however, that Shell Oil may

exercise only such direction and control over Polyco as is necessary to

assure compliance with this Agreement or with the Consent Order,

including dissolution, merger, consolidation, bankruptcy, sale of

substantially all assets, major acquisitions, issuance of equity

securities or any change in the legal status of Polyco.

f. Shell shall not cause or permit any destruction, removal,

wasting, deterioration or impairment of Polyco, except for ordinary

wear and tear. Shell Oil shall maintain the marketability and the

Viability and Competitiveness of Polyco and shall not sell, transfer,

encumber (other than in the normal course of business) or otherwise

impair its marketability or Viability and Competitiveness. Shell Oil

shall provide Polyco with sufficient working capital to operate at

current rates of operation, to perform all necessary routine

maintenance to, and replacement of, plant and equipment of the

Properties to Be Divested, and to maintain the Viability and

Competitiveness of the Properties to Be Divested.

g. Shell shall not change the composition of the management of

Polyco except that the non-Shell (as Shell is defined in Paragraph 5.a

hereof) directors or members serving on the New Board (as defined in

Paragraph 5.b hereof) shall have the power to remove [[Page 5424]] any

employee. With the exception of the single Shell Oil director, Shell

Oil shall not remove directors of the New Board except for cause.

h. Except as permitted by this Agreement, the Shell Oil New Board

member shall not in his or her capacity as a New Board member receive

Material Confidential Information and shall not disclose any such

information received under this Agreement to Shell, Montedison or

Montell or use it to obtain any advantage for Shell, Montedison or

Montell. Any Shell Oil director, officer, employee or agent who obtains

or may obtain confidential information under this Agreement shall enter

a confidentiality agreement prohibiting disclosure of confidential

information until the day after the divestitures required by the

Consent Order have been completed.

i. Except as required by law and except to the extent that

necessary information is exchange in the course of defending

investigations or litigation, obtaining legal advice, acting to assure

compliance with this Agreement or the Consent Order (including

accomplishing the divestitures), or negotiating agreements to dispose

of assets, Shell, Montedison and Montell shall not receive or have

access to, or the use of, any Material Confidential Information of

Polyco, except as such information would be available to Montedison in

the normal course of business if the Acquisition had not taken place.

Any such information that is obtained by Shell Oil pursuant to this

Paragraph shall only be used for the purposes set out in this

Paragraph. Provided, however, until divestiture of Polyco, hourly

personnel assigned to Polyco plant operations may continue to be

covered by existing contracts between Shell Oil and any unions

representing such employees; and Shell Oil may assign Shell Oil

personnel to perform the accounting, analytical chemistry, human

resources, information systems, transportation services and tax

functions for Polyco provided that such Shell Oil personnel shall enter

into confidentiality agreements in accordance with the provisions in

Paragraph 5.h hereof and provided further that those Shell Oil

personnel working with Material Confidential Information of Polyco

shall not be involved in Montell's PP Technology, Catalyst Technology,

PP Catalyst or Propylene Polymers business, as defined in Paragraph I.

of the Consent Order for the period that Shell must comply with

Paragraph 5 hereof. Provided further that the New Board (as defined in

subparagraph 5.b hereof) may designate and contract with Shell Oil as a

nonexclusive sales agent for sales of PP Catalyst or Propylene Polymers

by Polyco outside the United States, provided that all Shell Oil

personnel with access to Material Confidential Information of Polyco in

connection with such contract or agency shall, prior to gaining such

access, enter into confidentiality agreements in accordance with the

provisions of Paragraph 5.h hereof.

j. All earnings and profits of Polyco shall be retained separately

in Polyco.

k. Should any transfer to Polyco of an agreement, contract or

license required to be included in the Properties to Be Divested not be

possible after reasonable effort by Shell Oil due to another party

withholding its consent to the transfer, Shell Oil shall enter into an

agreement with Polyco the purpose of which agreement is to realize the

same effect as such transfer. Further, Shell Oil shall secure, at its

expense, patent licenses, or assignments of patent licenses, extending

to Polyco rights and royalty rates with respect to the manufacture and

sale of Propylene Polymers and PP Catalyst, and rights to expand

production and sale, no less favorable than those held by Shell Oil as

of the date of transfer to Polyco of the Properties to Be Divested.

6. Prior to, or concurrently with, transfer to Montell of the Shell

Merged Assets, Royal Dutch and Shell T&T shall ensure that companies of

the Shell Group shall:

a. Take such actions as are necessary to establish and maintain

separate and apart from Montell the Koninklijke/Shell Laboratorium

Amsterdam (``KSLA'') research and development laboratory of Shell

Research B.V., a company of the Shell Group; and

b. Take such actions as are necessary to ensure that no Shell

research personnel who have had access to Unipol PP Technology (other

than Catalyst Technology received by Shell Oil from other companies of

the Shell Group) within one (1) year prior to the date of the formation

of Montell engage in research at facilities of Montell.

7. Shell Oil's Pecten international marketing organization shall

not market or distribute products of Montell but may, as requested by

Polyco, market and distribute products produced by Polyco.

8. Prior to, or concurrently with, transfer to Montell of the

Montedison Merged Assets, Montedison shall

a. transfer to Technipol as an ongoing business:

i. PP research and development facilities in the Giulio Natta

Research Center in Ferrara, Italy, by outright transfer or lease,

including transfer of its PO3 pilot plant, equipment, rights-of-way,

easements, and other rights and assets appropriate and sufficient to

preserve the Viability and Competitiveness of the Montedison PP

Technology business.

ii. The irrevocable worldwide right, for a period not to expire

prior to the divestiture of the Properties to be Divested, to grant to

any person perpetual Montedison PP Technology licenses subject to any

lawful rights previously granted to persons not parties to this

Agreement. This right shall be exclusive subject to the right of

Montell to license Montell Affiliates.

iii. Existing Montedison Licenses and Montedison's PP Catalyst

supply contracts with persons other than Montell Affiliates. Should any

such transfer not be possible after reasonable effort by Montedison due

to the other party withholding its consent to the transfer, Montedison

or Montell shall enter into an agreement with Technipol to service the

licenses not transferred to Technipol and account for revenues from

such licenses strictly for the benefit and account of Technipol, the

purpose of which agreement is to realize to the extent possible the

same effect of a transfer of such licenses.

iv. Montedison's PP Catalyst sales business.

v. Personnel who possess the specific skills and experience

required by Technipol sufficient to support, conduct and preserve the

Viability and Competitiveness of the Montedison Properties to Be

Transferred. Montedison shall appoint Technipol's managers on the basis

of demonstrated ability and specific experience in the Montedison PP

Technology field.

vi. Such other assets (including cash and working capital) and

personnel as may be required to effectuate the remedial purpose of this

Order and to assure that Technipol will be capable of operating

independently at the same level of research, development and licensing

of PP Technology, and sale of PP Catalyst as existed in the Montedison

Properties to Be Transferred on average during the two (2) years prior

to the Transfer Date.

b. Physically separate, to the extent feasible, the assets,

personnel, offices and facilities transferred or leased to Technipol

from those retained in Montedison and from those transferred to Montell

so as to assure the independence of Technipol from Montell and to

assure that Material Confidential Information that is not to be made

available to another person pursuant to the Consent Order and this

Agreement is not accessible to such person. [[Page 5425]]

c. Assign to Technipol all other agreements in which Montedison

grants to a person other than Montell or a Montell Affiliate the right

to practice Montedison PP Technology. Should any such assignment not be

possible after reasonable effort by Montedison due to the other party

withholding its consent to the assignment, Montedison or Montell shall

enter into an agreement with Technipol the purpose of which is to

realize the effect of such assignment.

d. Take such actions as necessary to ensure an ongoing agreement

between Montell and Technipol pursuant to which Montell will provide to

Technipol, at Montell's cost, services (such as building security, fire

protection, trash removal, shipping and receiving, accounting and

cleaning services), utilities and common maintenance for the Montedison

Properties to Be Transferred, as may be requested by Technipol.

Provided, however, that Montedison shall retain for Montell

ownership of, and free right to practice and use, and sell product

resulting from the practice or use of, all Montedison PP Technology and

PP Catalyst production assets.

9. Commencing prior to, or concurrently with, transfer to Montell

of the Montedison Merged Assets, Montedison will hold Technipol as

constituted in accordance with Paragraph 8 of this Agreement separate

and apart on the following terms and conditions:

a. Montedison shall separately incorporate Technipol and adopt

Articles of Incorporation and By-laws for Technipol that are not

inconsistent with other provisions of this Agreement. Montedison shall

also elect a board of directors of Technipol prior to, or concurrently

with, transfer to Montell of the Montedison Merged Assets.

b. Technipol shall be operated independently of Montell and Shell,

and neither Shell nor Montell shall have any ownership or other

financial interest in Technipol or exercise direction or control over,

or influence directly or indirectly, Technipol, except as specifically

authorized by this Agreement.

c. Montedison shall not permit any director, officer, employee or

agent of Montell, or any director, officer, employee or agent of

Montedison involved in management or oversight of Montell, to also be a

director, officer, employee or agent of Technipol.

d. Any Montedison director, officer, employee or agent who obtains

or may obtain Material Confidential Information of Technipol under this

Agreement shall not disclose to Shell or Montell such Material

Confidential Information until the day after divestiture of the

Properties to Be Divested has been completed.

e. Montedison shall not cause or permit any destruction, removal,

wasting, deterioration or impairment of Technipol, except for ordinary

wear and tear. Montedison shall also maintain the Viability and

Competitiveness of Technipol and shall not sell, transfer, encumber

(other than in the normal course of business) or otherwise impair its

Viability and Competitiveness.

f. The purpose of the formation of Technipol and the transfer to it

of the Montedison Properties to Be Transferred is to ensure the

continuation of a separate, full-functioning entity to conduct the

business of the Montedison Properties to Be Transferred and to preserve

the Viability and Competitiveness of that business until the Properties

to Be Divested are divested.

g. Montell shall provide Technipol and its licensees and

prospective licensees access to any and all of Montell's commercial

scale PP plants using Montedison PP Technology for demonstrating the PP

Technology and Catalyst Technology used in the plant to prospective

licensees and shall provide technical assistance and training for

personnel of Technipol's licensees. In consideration for providing such

services and assistance to Technipol, Montell may charge no more than

its actual hourly cost of pay and benefits for the services of Montell

personnel providing technical assistance and training and, in the case

of technical assistance or training by Montell personnel at a

licensee's or prospective licensee's facilities, reasonable and

customary travel and per diem subsistence costs of such personnel.

h. With respect to future Improvements or Major Advances in

Montedison PP Technology by Technipol or Montell:

i. Technipol and Montell shall each own any Improvements or Major

Advances it develops at its own cost or finances.

ii. Technipol shall have the right to license to any person any

results obtained from research and development in the field of PP

Technology performed by Technipol under contract for Montell.

iii. Technipol may grant Montell a paid-up, royalty-free, perpetual

and non-exclusive right to use any Improvements owned by Technipol or

received by Technipol from its licensees.

iv. Technipol may grant Montell a non-exclusive license to use any

Major Advances owned by Technipol or received by Technipol from its

licensees on a non-discriminatory basis on terms available to other

persons.

v. Montell shall grant Technipol a paid-up, royalty-free, perpetual

and non-exclusive right to license persons other than Montell

Affiliates to use any Improvements owned by Montell.

vi. Montell shall grant Technipol the right to license third

parties to use any Major Advances owned by Montell, unless Montell is

contractually prohibited, by contract with any person other than a

Montell Affiliate or a respondent, from sharing such Major Advances

with Technipol. Such grant to Technipol shall be on reasonable terms

and conditions which shall, in any event, be no less favorable to

Technipol than those offered by Montell to any person other than a

Montell Affiliate.

i. Technipol shall have the exclusive right, subject to any lawful

rights previously granted to persons not parties to this Agreement, to

enforce intellectual property rights with respect to Montedison PP

Technology, and to sell PP Catalyst to persons other than Montell and

Montell Affiliates.

j. Except as expressly provided in this Agreement, all sales,

licensing and other business relationships between Technipol and either

Montedison, Shell or Montell shall be conducted on a non-discriminatory

basis on terms available to other persons.

k. Pursuant to a PP Catalyst supply agreement between Montell and

Technipol, Montell shall produce PP Catalyst, including Improvements

thereto, for Technipol for use by Technipol's licensees and PP Catalyst

customers, subject to the rights of Akzo Nobel. To this end, Montell

shall dedicate such portion of its PP Catalyst production capacity as

is required to supply Technipol's licensees and PP Catalyst customers.

The price for PP Catalyst supplied by Montell to Technipol shall be

negotiated between Montell and Technipol, but in no event shall be more

than the lowest contract price, in terms of the price per pound of

Propylene Polymers produced per pound of PP Catalyst, for PP Catalyst

available to a licensee other than a Montell Affiliate or government

controlled licensee, as of December 31, 1993, recalculated in

accordance with the pricing formula in the PP Catalyst supply contract

for that licensee, less eight percent (8%).

l. Pursuant to a Catalyst Support supply agreement between Montell

and Technipol, Montell shall produce Catalyst Support, including

Improvements thereto, for Technipol for sale to Akzo Nobel. The price

for Catalyst Support supplied by Montell to [[Page 5426]] Technipol

shall be negotiated between Montell and Technipol, but in no event

shall be more than the price charged to Akzo Nobel as of December 31,

1993, recalculated in accordance with the pricing formula in the

Catalyst Support supply contract between Akzo Nobel and Himont, less

eight percent (8%).

m. Notwithstanding any agreement entered into by Montell and

Technipol pursuant to Paragraphs 9.k and 9.l of this Agreement,

Technipol may acquire PP Catalyst and Catalyst Support from any other

person.

n. Technipol shall provide to Montell, on the date of transfer to

Technipol of the Montedison Properties to Be Transferred and on the

first day of every calendar quarter thereafter, an estimate of its

requirements for PP Catalyst and Catalyst Support for the following

twelve (12) months. Montell shall supply PP Catalyst and Catalyst

Support in quantities sufficient to maintain an inventory of PP

Catalyst and Catalyst Support equivalent to Technipol's requirements

for PP Catalyst and Catalyst Support for a period of six (6) months. In

the event that Montell is unable to maintain an inventory of PP

Catalyst and Catalyst Support sufficient to supply Technipol's

requirements for PP Catalyst and Catalyst Support for a period of six

(6) months, Montell will grant to Technipol the right and Know-How

necessary to produce, or have produced on its behalf, PP Catalyst and

Catalyst Support.

o. In the case of any shortage of PP Catalyst or Catalyst Support

production Montell shall continue to supply Technipol with its

requirements except that in the case of shortages that are not the

result of Montell's actions Montell may allocate PP Catalyst and

Catalyst Support to Technipol and Montell and Montell Affiliates on a

pro rata basis based on the previous twelve (12) months. In the case of

any shortage of PP Catalyst or Catalyst Support to Technipol, Technipol

may request that Montell expand the production facilities, at Montell's

expense, in order to meet the requirements of Technipol.

p. Technipol shall have the sole right to determine, subject to PP

Catalyst supply contracts with persons other than Montell or Montell

Affiliates existing as of the date the Montedison Properties to Be

Transferred are transferred to Technipol and the existing Akzo

agreement, the sales price, quantity and type of PP Catalyst and

Catalyst Support sold by Technipol to any person.

q. Montell and Shell shall not interfere in, or attempt to

influence, any decisions or activities of Technipol.

r. Shell, Montedison, Montell, Technipol and Polyco shall not

exchange or discuss between each other, directly or indirectly, current

or future intentions, plans or forecasts for pricing, production or

capacity for PP Catalyst, Catalyst Support, Catalyst Systems or

Propylene Polymers, or royalty rates for licensing PP Technology or

Catalyst Technology to others, except as required between Montell and

Technipol in accordance with Paragraphs 9.k and 9.l of this Agreement.

10. Except as otherwise provided in the Consent Order or this

Agreement, as required for the purpose of tax return preparation,

compliance with any law or request from a revenue authority, or to the

extent that necessary information is exchanged in the course of

evaluating and consummating the formation of Montell, Technipol or

Polyco, defending government investigations or litigation, or

negotiating to dispose of assets:

a. Neither Montedison, Montell, Technipol nor Polyco shall provide,

disclose or otherwise make available to Shell any Material Confidential

Information.

b. Neither Montedison nor Technipol shall provide, disclose or

otherwise make available to Montell any Material Confidential

Information of Technipol.

c. Shell shall not provide, disclose or otherwise make available to

Montedison, Montell or Technipol any Material Confidential Information

of Polyco or the Unipol/SHAC Technology Business (other that Catalyst

Technology received by Shell Oil from other companies of the Shell

Group), provided however, nothing in this Paragraph 10.c of this

Agreement shall prohibit (a) Montell Affiliates who are licensees of

Unipol PP Technology from receiving information, in accordance with

such license, for use in their Unipol PP Technology licensed production

facilities, including information obtained by Shell, prior to the

formation of Montell, under The Tripartite Catalyst Research Agreement;

and (b) any communication between Shell and Montell necessary to ensure

that Montell and its employees make no unauthorized use or disclosure

of any Material Confidential Information.

d. Neither Montell nor Shell shall provide, disclose or otherwise

make available to Montedison or Technipol any Material Confidential

Information.

Provided, however, that nothing in this Agreement shall limit or

prohibit (a) Montell, Technipol or Polyco from licensing or otherwise

doing business on a nondiscriminatory basis with each other or with any

entity in which Montedison or a Shell Group company has an interest; or

(b) persons elected by Shell or Montedison to the Montell board of

directors from participating in decisions relating to Montell if they

do not also participate in decisions relating to similar businesses of

Technipol or Polyco.

11. To the extent that this Agreement or the Consent Order requires

Shell or Montedison to take, or prohibits Shell or Montedison from

taking, certain actions that otherwise may be required or prohibited by

contract, Shell and Montedison shall abide by the terms of this

Agreement and the Consent Order and shall not assert as a defense such

contract rights in a civil penalty action brought by the Commission to

enforce the terms of this Agreement or the Consent Order.

12. Should the Federal Trade Commission seek in any proceeding to

compel Shell (meaning here and hereinafter Shell including Polyco) to

divest itself of the Montedison Merged Assets, to compel Shell to

divest any assets of businesses of the Shell Merged Assets or the

Montedison Merged Assets that it may hold, to compel Montedison to

divest itself of the Shell Merged Assets, to compel Montedison to

divest any assets or businesses of the Montedison Merged Assets or the

Shell Merged Assets that it may hold, or to seek any other injunctive

or equitable relief for any failure to comply with the Consent Order of

this Agreement, or in any way relating to the Acquisition, Shell and

Montedison shall not raise any objection based upon the expiration of

the applicable Hart-Scott-Rodino Antitrust Improvements Act waiting

period or the fact that the Commission has permitted the Acquisition.

Shell and Montedison also waive all rights to contest the validity of

this Agreement.

13. For the purpose of determining or securing compliance with this

Agreement, subject to any legally recognized privilege, and upon

written request with reasonable notice to Montedison, Shell, Polyco or

Montell made to its principal office, Montedison, Shell, Polyco and

Montell shall permit any duly authorized representative or

representatives of the Commission:

a. Access during the office hours of Montedison or Shell and in the

presence of counsel to inspect and copy all books, ledgers, accounts,

correspondence, memoranda, and other records and documents in the

possession or under the control of Montedison, Shell, Polyco or Montell

relating to compliance with this Agreement; and

b. Upon ten (10) days notice to Montedison, Shell, Polyco or

Montell and without restraint or interference from it, to interview

officers or [[Page 5427]] employees of Montedison, Shell, Polyco or

Montell who may have counsel present, regarding any such matters.

14. This Agreement shall not be binding on the Commission until it

is approved by the Commission.

Analysis To Aid Public Comment on the Provisionally Accepted Consent

Order

The Federal Trade Commission (``the Commission'') has accepted, for

public comment, an agreement containing a proposed Consent Order from

Montedison S.p.A. and Himont Incorporated (collectively ``Montedison'')

and Royal Dutch Petroleum Company, The ``Shell'' Transport and Trading

Company, p.l.c., and Shell Oil Company (collectively ``Shell''). The

proposed Consent Order has been placed on the public record for sixty

(60) days for reception of comments from interested persons. Comments

received during this period will become part of the public record.

After sixty (60) days, the Commission will again review the agreement

and the comments received and will decide whether it should withdraw

from the agreement or make final the agreement's proposed Order.

The Commission's proposed complaint alleges that on or about

December 30, 1993, Montedison and Shell entered into an agreement to

form and acquire equal interests in a joint venture, designated by

Montedison and Shell as ``Montell'' and valued at over six billion

dollars, that would merge the majority of Shell's and Montedison's

worldwide polyolefins businesses. Shell would retain outside the

proposed joint venture polypropylene assets of Shell Oil Company

(``Shell Oil''), including Shell Oil's polypropylene catalyst and

polypropylene resin production facilities, Shell Oil's rights and

obligations under a 1983 Cooperative Undertaking Agreement with Union

Carbide Corporation (``Union Carbide''), pursuant to which Shell Oil

and Union Carbide research, develop and license polypropylene

technology and polypropylene catalyst worldwide, and Shell Oil's

interest in the Seadrift Polypropylene Company, a partnership with

Union Carbide which produces polypropylene resin. According to the

complaint, Shell would nonetheless control Shell Oil as well as

Montell.

The proposed complaint further states that Montedison coordinates

with Mitsui Petrochemical Industries Ltd. (``Mitsui'') in licensing of

polypropylene technology and in the sale of polypropylene catalysts and

shares with Mitsui royalties from licensing of polypropylene technology

and catalyst technology and profits from the sale of polypropylene

catalysts manufactured in the United States for sale to licensees in

the Western Hemisphere.

The proposed complaint alleges that the joint venture agreement

between Montedison and Shell violates Section 5 of the Federal Trade

Commission Act, as amended, 15 U.S.C. 45; the proposed joint venture

between Montedison and Shell, would, if consummated, violate Section 7

of the Clayton Act, as amended, 15 U.S.C. 18, and Section 5 of the

Federal Trade Commission Act in the world markets for polypropylene

technology, licensing of polypropylene technology and the licensing,

production and sale of polypropylene catalysts, and in the United

States and Canada markets for the production and sale of polypropylene

impact copolymer resin; the proposed joint venture would have an

adverse effect on U.S. export trade in violation of Section 5 of the

Federal Trade Commission Act, as amended, 15 U.S.C. 45; and the

agreement between Montedison and Mitsui violates Section 5 of the

Federal Trade Commission Act.

According to the proposed complaint, polypropylene technology and

catalyst technology are essential for entry into the production of

polypropylene resin, and polypropylene catalysts are essential inputs

in the production of polypropylene resin. Polypropylene resin is a

thermoplastic with distinct price/performance characteristics and

physical properties and relatively low cost and low density.

Polypropylene impact copolymer resin is a type of polypropylene resin

with high impact strength suitable for low temperature applications and

produced through copolymerization, in a second reactor, of

polypropylene and ethylene or other olefin monomers.

As alleged in the proposed complaint, Montedison, through Himont,

is the leading competitor in each of the relevant markets. Shell is the

second largest producer of polypropylene catalyst, polypropylene resin

and impact copolymer polypropylene resin in the world, is a leader in

catalyst technology, and is a significant competitor in the manufacture

and sale of polypropylene resin and polypropylene impact copolymer

resin in the United States and Canada. Shell Oil and Union Carbide

under the Cooperative Undertaking Agreement are the principal

competitor to Montedison in research, development and licensing of

polypropylene technology and catalyst technology. Other technologies

are not a significant competitive constraint according to the

complaint.

The purpose of the divestiture is to ensure continuation of the

divested assets as an ongoing, viable business engaged, in competition

with Montedison and Montell and with other companies, in the research,

development and licensing of polypropylene technology and catalyst

technology and in the manufacture and sale of polypropylene catalysts

and polypropylene resin including polypropylene impact copolymer resin,

and to remedy any lessening of competition in the relevant markets

resulting from the joint venture. The proposed Consent Order provides

for accelerated divestiture. However, if Union Carbide declines to

acquire the assets to be divested by Shell Oil, at fair market value as

determined by an independent appraisal or as otherwise agreed by Shell

Oil and Union Carbide, or Union Carbide objects to another acquirer

approved by the Commission, the divestiture period may be extended to

March 31, 1997. If Shell Oil fails to complete the required

divestitures within the required period, the Commission may appoint a

trustee to divest the assets required to be divested together with

ancillary assets and businesses and arrangements necessary to assure

the marketability of the divested assets and to assure that they are

viable and competitive in the relevant markets. Any proposed

divestiture pursuant to the Order must be approved by the Commission

after the divestiture proposal has been placed on the public record for

reception of comments from interested persons.

In addition, the proposed Consent Order would prohibit Montedison

and Montell from sharing in royalties from licenses granted by Mitsui

after the Order becomes final for use of polypropylene technology and

catalyst technology in the United States or from entering into

agreements with Mitsui for sharing of licensing royalties in the United

States and would prohibit Montedison, Shell and Montell from entering

into agreements to allocate markets for licensing of polypropylene

technology and catalyst technology or for manufacture and sale of

polypropylene catalysts.

A hold separate agreement executed as part of the Consent prohibits

Shell and Montedison from transferring assets to Montell until March 1,

1995, and until Shell has completed the required divestiture, requires

Shell to preserve and hold separate from Shell and Montell the assets

required to be divested and requires Montedison to preserve, and hold

separate from Shell and Montell, assets related to Montedison's

polypropylene technology and polypropylene catalyst

businesses. [[Page 5428]]

For a period of ten years from its effective date, the Order would

also prohibit Shell, Montedison and Montell from acquiring, without

prior Commission approval, stock or other interest in any company

engaged in, or assets used for, the research and development,

manufacture for sale, or sale or licensing of polypropylene technology,

catalyst technology or polypropylene catalyst anywhere in the world or

the manufacture or sale of polypropylene polymers in the United States

or Canada.

The purpose of this analysis is to invite public comment concerning

the Consent Order and any other aspect of the joint venture or

Montedison license agreements. This analysis is not intended to

constitute an official interpretation of the Consent Agreement and

Order or to modify its terms in any way.

Donald S. Clark,

Secretary.

[FR Doc. 95-2061 Filed 1-26-95; 8:45 am]

BILLING CODE 6750-01-M