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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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SCHEDULE 13E-3
RULE 13E-3 TRANSACTION STATEMENT
(PURSUANT TO SECTION 13(E) OF THE SECURITIES EXCHANGE ACT OF 1934)
UNIVAR CORPORATION
(NAME OF THE ISSUER)
ROYAL PAKHOED N.V.
UC ACQUISITION CORP.
(NAME OF PERSON(S) FILING STATEMENT)
COMMON SHARES, NO PAR VALUE PER SHARE
(TITLE OF CLASS OF SECURITIES)
913353 10 8
(CUSIP NUMBER OF CLASS OF SECURITIES)
N. J. WESTDIJK
CHAIRMAN OF THE BOARD OF MANAGEMENT
ROYAL PAKHOED N.V.
333 BLAAK
3011 G.B. ROTTERDAM
THE NETHERLANDS
TELEPHONE NUMBER: 011-31-10-400-2911
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO RECEIVE NOTICES
AND COMMUNICATIONS ON BEHALF OF PERSON(S) FILING STATEMENT)
COPIES TO:
NICHOLAS UNKOVIC, ESQ.
LAWRENCE B. LOW, ESQ.
GRAHAM & JAMES LLP
ONE MARITIME PLAZA, SUITE 300
SAN FRANCISCO, CA 94111
TELEPHONE: (415) 954-0200
THIS STATEMENT IS FILED IN CONNECTION WITH (CHECK THE APPROPRIATE BOX):
a. / / The filing of solicitation materials or an information statement
subject to Regulation 14A, Regulation 14C, or Rule 13e-3(c) under Securities
Exchange Act of 1934.
b. / / The filing of a registration statement under the Securities Act of
1933.
c. /X/ A tender offer.
d. / / None of the above.
Check the following box if the soliciting materials or information
statement referred to in checking box (a) are preliminary copies. / /
CALCULATION OF FILING FEE
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TRANSACTION VALUATION AMOUNT OF FILING FEE
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$303,992,121.80 $60,798.42
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/X/ Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the form
or schedule and the date of its filing.
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Amount previously paid: $60,798.42 Filing party: Royal Pakhoed N.V.,
Form or registration no.: Schedule 14D-1 Pakhoed Investeringen B.V.,
Pakhoed USA Inc. and
UC Acquisition Corp.
Date filed: June 7, 1996
</TABLE>
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* For purposes of calculating the filing fee only. This amount assumes the
purchase of 15,629,415 shares of Common Shares at $19.45 in cash per share.
The amount of the filing fee calculated in accordance with Regulation 240.0-4
of the Securities Exchange Act of 1934 equals 1/50 of one percentum of the
value of the shares to be purchased.
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INTRODUCTION
This Rule 13e-3 Transaction Statement (the "Statement") relates to a tender
offer by UC Acquisition Corp., a Washington corporation ("Buyer"), which is an
indirect subsidiary of Royal Pakhoed, N.V. (a translation of Koninklijke Pakhoed
N.V., a publicly held limited liability company formed and existing under the
laws of The Netherlands ("Parent")), to purchase any and all common shares (the
"Shares") of Univar Corporation, a Washington corporation ("Company" or
"Issuer"). The offer is being made at a price of $19.45 per Share, net to the
seller in cash (the "Offer Price"), upon the terms and subject to the conditions
set forth in the Offer to Purchase of Buyer dated June 7, 1996 (the "Offer to
Purchase") and in the related Letter of Transmittal (which, together with the
Offer to Purchase, constitute the "Offer"), copies of which are filed as
Exhibits (d)(1) and (d)(2) hereto, respectively. This Statement is being filed
by Parent and Buyer.
The purpose of the Offer is to enable Buyer to acquire all of the
outstanding Shares and control of Company. The Offer is the first step in the
acquisition of all Shares of Company. Buyer, Parent, and Company have entered
into an Agreement and Plan of Reorganization (the "Reorganization Agreement"),
dated as of May 31, 1996, which provides, among other things, that following the
consummation of the Offer, subject to the terms and conditions contained in the
Reorganization Agreement and in accordance with the relevant provisions of the
Washington Business Corporation Act (the "WBCA"), Buyer will be merged into
Company (the "Proposed Merger") and Company will be the surviving corporation
(the "Surviving Corporation"). On the effective date of the Proposed Merger (the
"Effective Date"), each outstanding Share (other than Shares owned by Buyer and
its affiliates and Shares held by shareholders who perfect their dissenters'
rights under the WBCA) will be converted into the right to receive an amount in
cash equal to the highest Offer Price paid pursuant to the Offer (the "Merger
Consideration"). The Reorganization Agreement also provides that if Buyer
acquires at least ninety percent (90%) of the outstanding Shares, Buyer would
have the ability to consummate the Proposed Merger without a meeting or vote of
the other shareholders of Company pursuant to the "short form" merger provisions
of the WBCA. Under the WBCA, a "short form" merger would have to be effected in
the form of a merger of Company into Buyer, with Buyer as the surviving
corporation.
The filing of this Statement and the disclosures made by Parent and Buyer
in the Offer to Purchase in compliance with Rule 13e-3 are not to be construed
to deem any of Buyer, Parent or any of their affiliates as "affiliates" or
"control persons" of Company. Because of the restrictive provisions of the
Standstill Agreement (as defined in the Offer to Purchase) which, among other
things, limits the ability of Buyer, Parent and their affiliates to elect
representatives to Company's Board of Directors, to call shareholder meetings,
to form a "group", to induce any other person to initiate a tender offer or to
otherwise exercise control over Company, Buyer does not believe that it or any
of its affiliates or "control persons" are "affiliates" of Company for purposes
of Rule 13e-3 or otherwise. Furthermore, under the Standstill Agreement, Parent
and its affiliates are required to vote their Shares for the election of persons
designated by the other unaffiliated directors to fill Board seats other than
Parent's proportionate number to which it is entitled under the Standstill
Agreement.
The following cross reference sheet is being supplied pursuant to General
Instruction F to the Statement and shows the location in the Tender Offer
Statement on Schedule 14D-1 (the "Schedule 14D-1") filed by Buyer, Parent
Pakhoed Investeringen B.V. and Pakhoed USA Inc. with the Securities and Exchange
Commission on the date hereof, of the information required to be included in
response to the items of this Statement. The information set forth in Schedule
14D-1, including all exhibits thereto, is hereby expressly incorporated herein
by reference and the responses to each item are qualified in their entirety by
the provisions of the Schedule 14D-1.
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<TABLE>
<CAPTION>
ITEM IN WHERE LOCATED IN
SCHEDULE 13-E3 SCHEDULE 14D-1
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Item 1(a) Item 1(a)
Item 1(b) Item 1(b)
Item 1(c) Item 1(c)
Item 1(d) Item 1(c)
Item 1(e) Item *
Item 1(f) Item *
Item 2(a) Item 2(a)
Item 2(b) Item 2(b)
Item 2(c) Item 2(c)
Item 2(d) Item 2(d)
Item 2(e) Item 2(e)
Item 2(f) Item 2(f)
Item 2(g) Item 2(g)
Item 3(a)(1) & (2) Item 3(a)
Item 3(b) Item 3(b)
Item 4 Item *
Item 5 Item 5
Item 6(a) Item 4(a)
Item 6(b) Item *
Item 6(c) Item 4(b)
Item 6(d) Item 4(c)
Item 7(a) Item 5
Item 7(b) Item *
Item 7(d) Item *
Item 7(d) Item *
Item 8 Item *
Item 9 Item *
Item 10(a) Item 6(a)
Item 10(b) Item 6(b)
Item 11 Item 7
Item 12(a) Item *
Item 12(b) Item *
Item 13 Item *
Item 14 Item *
Item 15(a) Item *
Item 15(b) Item *
Item 16 Item 10(f)
Item 17 Item 11
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*The item is located in the Rule 13e-3 Transaction Statement only.
ITEM 1. ISSUER AND CLASS OF SECURITY SUBJECT TO THE TRANSACTION.
(a) The name of the issuer of the class of equity security which is
the subject of the Rule 13e-3 transaction is Univar Corporation, a
Washington corporation (the "Company"), and the address of its principal
executive offices is 6100 Carillon Point, Kirkland, Washington 98033.
(b) The information set forth in the Offer to Purchase under the
Introduction is incorporated herein by reference.
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(c) The information set forth in the Offer to Purchase under Section 5
("Price Range of the Shares; Dividends on the Shares") is incorporated
herein by reference.
(d) The information set forth in the Offer to Purchase under Section 5
("Price Range of the Shares; Dividends on the Shares") is incorporated
herein by reference.
(e) Not Applicable.
(f) The information set forth in the Offer to Purchase under Special
Factors ("Certain Shares Expected to be Tendered") and Section 10
("Contacts and Transactions Among Parent, Buyer and Company") is
incorporated herein by reference.
ITEM 2. IDENTITY AND BACKGROUND.
(a)--(d) and (g) This Statement is being filed by Parent and Buyer.
The information set forth in the Offer to Purchase under the Introduction
and Section 8 ("Certain Information Concerning Buyer and Parent") and
Schedule I to the Offer to Purchase is incorporated herein by reference.
(e)--(f) During the last five years, neither Buyer nor Parent (i) has
been convicted in a criminal proceeding (excluding traffic violations or
similar misdemeanors), or (ii) was party to a civil proceeding of a
judicial or administrative body of competent jurisdiction and as a result
of such proceeding was or is subject to a judgment, decree or final order
enjoining further violations of, or prohibiting activities subject to,
federal or state securities laws of finding any violations of such laws.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS.
(a)--(b) The information set forth in the Offer to Purchase under
Section 10 ("Contacts and Transactions Among Parent, Buyer and Company"),
and Section 8 ("Certain Information Concerning Buyer and Parent") is
incorporated herein by reference.
ITEM 4. TERMS OF THE TRANSACTION.
(a) The information set forth in the Offer to Purchase under the
Introduction, Special Factors ("Purpose of the Offer"), Section 1 ("Terms
of the Offer"), Section 2 ("Procedure for Tendering Shares"), Section 3
("Withdrawal Rights"), Section 4 ("Acceptance for Payment and Payment")
Section 10 ("Contacts and Transactions Among Parent, Buyer and Company"),
and Section 12 ("Certain Conditions of the Offer") is incorporated herein
by reference.
(b) The information set forth in the Offer to Purchase under the
Introduction, Special Factors ("Certain Shares Expected to be Tendered")
and Section 10 ("Contacts and Transactions Among Parent, Buyer and
Company") is incorporated herein by reference.
ITEM 5. PLANS OR PROPOSALS OF THE ISSUER OR AFFILIATE.
(a)--(g) The information set forth in the Offer to Purchase under the
Introduction, Special Factors ("Purpose of the Offer"), ("Certain Effects
of the Transaction"), ("Plans for Company"), Section 6 ("Effect of the
Offer on the Market for Shares"), Section 8 ("Certain Information
Concerning Buyer and Parent") and Section 10 ("Contacts and Transactions
Among Parent, Buyer and Company") is incorporated herein by reference.
ITEM 6. SOURCE AND AMOUNTS OF FUNDS OR OTHER CONSIDERATION.
(a) The information set forth in the Offer to Purchase under Section 9
("Source and Amount of Funds") is incorporated herein by reference.
(b) The information set forth in the Offer to Purchase under Section
14 ("Certain Fees and Expenses") is incorporated herein by reference.
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(c) The information set forth in the Offer to Purchase under Section 9
("Source and Amount of Funds") is incorporated herein by reference.
(d) By letter to the Securities and Exchange Commission (the "SEC" or
the "Commission") dated June 7, 1996, Parent and Buyer have requested that
the names of the lending banks as well as certain material terms of the
loan agreements for loans used by Parent to finance the Offer remain
confidential.
ITEM 7. PURPOSE(S), ALTERNATIVES, REASONS AND EFFECTS.
(a)--(d) The information set forth in the Offer to Purchase under the
Introduction, Special Factors ("Fairness of the Transaction"), ("Purpose of
the Offer"), ("Certain Effects of the Transaction") ("Plans for Company")
("Certain Federal Income Tax Consequences"), Section 6 ("Effect of the
Offer on the Market for Shares"), Section 7 ("Certain Information
Concerning Company"), Section 8 ("Certain Information Concerning Parent,
Buyer and Company") and Section 9 ("Source and Amount of Funds") is
incorporated herein by reference.
ITEM 8. FAIRNESS OF THE TRANSACTION.
(a)--(e) The information set forth in the Offer to Purchase under the
Introduction, Special Factors ("Certain Shares Expected to be Tendered"),
("Fairness of the Transaction"), ("Statutory Requirements") and Section 10
("Contacts and Transactions Among Parent, Buyer and Company") is
incorporated herein by reference.
(f) Not applicable.
ITEM 9. REPORTS, OPINIONS, APPRAISALS AND CERTAIN NEGOTIATIONS.
(a) The information set forth in the Offer to Purchase under Special
Factors ("Fairness of the Transaction") and ("Reports, Opinions and
Appraisals") is incorporated herein by reference.
(b) The information set forth in the Offer to Purchase under Special
Factors ("Fairness of the Transaction") and ("Reports, Opinions and
Appraisals") is incorporated herein by reference.
(c) Not applicable.
ITEM 10. INTEREST IN SECURITIES OF THE ISSUER.
(a)--(b) The information set forth in the Offer to Purchase under the
Introduction, Special Factors ("Purpose of the Offer"), Section 8 ("Certain
Information Concerning Buyer and Parent") and Section 10 ("Contacts and
Transactions Among Parent, Buyer and Company") is incorporated herein by
reference.
ITEM 11. CONTRACTS, ARRANGEMENTS OR UNDERSTANDINGS WITH RESPECT TO THE ISSUER'S
SECURITIES.
The information set forth in the Offer to Purchase under the
Introduction, Special Factors ("Purpose of Offer"), ("Certain Shares
Expected to be Tendered"), ("Certain Effects of the Offer"), ("Plans for
Company"), Section 8 ("Certain Information Concerning Buyer and Parent")
and Section 10 ("Contacts and Transactions Among Parent, Buyer and
Company") is incorporated herein by reference.
ITEM 12. PRESENT INTENTION AND RECOMMENDATION OF CERTAIN PERSONS WITH REGARD TO
THE TRANSACTION.
(a)--(b) The information set forth in the Offer to Purchase under the
Introduction, Special Factors ("Fairness of the Transaction"), ("Certain
Shares Expected to be Tendered") and Section 10 ("Contacts and Transactions
Among Parent, Buyer and Company") is incorporated herein by reference.
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ITEM 13. OTHER PROVISIONS OF THE TRANSACTION.
(a) The information set forth in the Offer to Purchase under Special
Factors ("Certain Effects of the Offer") and Schedule II is incorporated
herein by reference.
(b) Not applicable.
(c) Not applicable.
ITEM 14. FINANCIAL INFORMATION.
(a) The information set forth in the Offer to Purchase under Section 7
("Certain Information Concerning Company") and the Company's Annual Report
on Form 10-K for the year ended February 29, 1996 (File No. 1-5858) is
incorporated herein by reference.
(b) Not applicable.
ITEM 15. PERSONS AND ASSETS EMPLOYED, RETAINED OR UTILIZED.
(a) The information set forth in the Offer to Purchase under Special
Factors ("Purpose of the Offer and the Transaction"), ("Plans for
Company"), Section 10 ("Contacts and Transactions Among Parent, Buyer and
Company"), and Section 14 ("Certain Fees and Expenses") is incorporated
herein by reference.
(b) The information set forth in the Offer to Purchase under Special
Factors ("Plans for Company") is incorporated herein by reference.
ITEM 16. ADDITIONAL INFORMATION.
Additional information concerning the Offer is set forth in the Offer to
Purchase and the related Letter of Transmittal and is incorporated herein by
reference.
ITEM 17. MATERIAL TO BE FILED AS EXHIBITS.
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(a) Exhibit (a)(1). Standby Rollover Agreement dated November 30, 1995, by and between
(b) Parent and [*].
Exhibit (a)(2). Credit Agreement dated September 1, 1989, by and between Parent
and [*].
Exhibit (a)(3). Credit Agreement dated December 5, 1995, by and between Parent and
[*].
Exhibit (a)(4). Agreement on Standby Facility dated November 30, 1995, by and
between Parent and [*].
Exhibit (a)(5). Credit Agreement dated October 16, 1995, by and between Parent and
[*].
Exhibit (a)(6). Revolving Credit Facility Agreement dated May 20, 1996, by and
between Parent and [*].
Exhibit (a)(7) Standby Bridging Facility Agreement dated June 4, 1996, by and
between Parent and [*].
Exhibit (a) (8) Agreement on Standby Facility dated June 4, 1996, by and between
Parent and [*].
Exhibit (a) (9) Standby Rollover Agreement dated June 4, 1996, by and between
Parent and [*].
Exhibit (b)(1) Opinion of Schroder Wertheim & Co. Incorporated, dated May 31,
1996.
Exhibit (b)(2) Report of Schroder Wertheim & Co. Incorporated, dated May 31,
1996.
</TABLE>
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* Confidential treatment requested with respect to the names of the lending banks as well as
certain material terms of the loan agreements.
</TABLE>
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<TABLE>
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(c) Exhibit (c)(1). Standstill Agreement, dated September 19, 1986, by and among
Company, Parent, Investeringen and Pakhoed USA.
Exhibit (c)(2). Confidentiality and Standstill Agreement by and among Parent,
Pakhoed USA, Investeringen and Company, dated as of April 12,
1996.
Exhibit (c)(3). The Shareholder Agreement, dated May 31, 1996, by and between
Parent and The Dow Chemical Company.
Exhibit (c)(4). Form of Officers and Directors Agreement, dated May 31, 1996, by
and between Parent and each of Curtis P. Lindley, Andrew V. Smith,
Richard E. Engebrecht, N. Stewart Rogers, James W. Bernard, James
H. Wiborg, Roger L. Kesseler and John Scriven, directors of
Company, and Paul H. Hough, Gary E. Pruitt, and William A. Butler,
officers of Company.
Exhibit (c)(5). Form of Letter to Company Officers Clarifying and Amending Certain
Change of Control Agreements, List of Executive Officers, and
Schedule of Payments.
Exhibit (c)(6). Agreement and Plan of Reorganization, dated May 31, 1996, by and
among Parent, Buyer and Company.
Exhibit (c)(7). Form of Articles of Merger and Plan of Merger.
Exhibit (c)(8). Environmental Due Diligence Agreement by and between Parent and
Company, dated April 22, 1996.
Exhibit (c)(9). Form of Contingent Resignations tendered by each of John Scriven,
N. Stewart Rogers, James H. Wiborg, Andrew V. Smith, Curtis P.
Lindley, James W. Bernard, Roger L. Kesseler, Paul H. Hough and
Richard E. Engebrecht.
(d) Exhibit (d)(1). Offer to Purchase, dated June 7, 1996.
Exhibit (d)(2). Letter of Transmittal.
Exhibit (d)(3). Letter dated June 7, 1996, from D.F. King & Co., Inc. to Brokers,
Dealers, Commercial Banks, Trust Companies and Other Nominees.
Exhibit (d)(4). Letter to Clients of Brokers, Dealers, Banks, Trust Companies and
Other Nominees.
Exhibit (d)(5). Notice of Guaranteed Delivery.
Exhibit (d)(6). Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
Exhibit (d)(7). Certificate of Foreign Status, Form W-8.
Exhibit (d)(8). Text of Press Release issued by Parent and Company, dated June 3,
1996.
(e) Exhibit (e)(1). Schedule II of the Offer to Purchase, dated June 7, 1996.
(f) Not applicable.
</TABLE>
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SIGNATURE
After due inquiry and to the best of its knowledge and belief, each of the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
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Dated: June 7, 1996 ROYAL PAKHOED, N.V.
By: /s/ Dr. Sjoerd D. Eikelboom
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Dr. Sjoerd D. Eikelboom,
Senior Vice President
Dated: June 7, 1996 UC ACQUISITION CORP.
By: /s/ R. E. Wansik
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R. E. Wansik,
Vice President
</TABLE>
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EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
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99.(a)(1). Standby Rollover Agreement dated November 30, 1995, by and between Parent and
[*].
99.(a)(2). Credit Agreement dated September 1, 1989, by and between Parent and [*].
99.(a)(3). Credit Agreement dated December 5, 1995, by and between Parent and [*].
99.(a)(4). Agreement on Standby Facility dated November 30, 1995, by and between Parent and
[*].
99.(a)(5). Credit Agreement dated October 16, 1995, by and between Parent and [*].
99.(a)(6). Revolving Credit Facility Agreement dated May 20, 1996, between Parent and [*].
99.(a)(7) Standby Bridging Facility Agreement, dated June 4, 1996, by and between Parent
and [*].
99.(a)(8) Agreement on Standby Facility dated June 4, 1996 by and between Parent and [*].
99.(a)(9) Standby Rollover Agreement dated June 4, 1996, by and between Parent and [*].
99.(b)(1). Opinion of Schroder Wertheim & Co. Incorporated, dated May 31, 1996'
99.(b)(2). Report of Schroder & Wertheim & Co. Incorporated, dated May 31, 1996. Parent and
UC Acquisition Corp. have requested a continuing exemption by letter dated June
6, 1996 for the exhibit. In addition, a paper copy of this exhibit was submitted
to the Commission on June 6, 1996 and an electronic filing shall be made within 6
days of the filing.
99.(c)(1). Standstill Agreement, dated September 19, 1986, by and among Company, Parent,
Investeringen and Pakhoed USA.
99.(c)(2). Confidentiality and Standstill Agreement, dated as of April 12, 1996, among
Parent, Pakhoed USA, Investeringen and Company.
99.(c)(3). The Shareholder Agreement, dated as of May 31, 1996, by and between The Dow
Chemical Company and Parent.
99.(c)(4). Form of Officers and Directors Agreement, dated May 31, 1996, by and between
Parent and each of Curtis P. Lindley, Andrew V. Smith, Richard E. Engebrecht, N.
Stewart Rogers, James W. Bernard, James H. Wiborg, Roger L. Kesseler and John
Scriven, directors of Company, and Paul H. Hough, Gary E. Pruitt, and William A.
Butler, officers of Company.
99.(c)(5). Form of Letter to Company Officers Clarifying and Amending Certain Change of
Control Agreements, List of Executive Officers, and Schedule of Payments.
99.(c)(6). Agreement and Plan of Reorganization dated May 31, 1996, by and among Parent,
Buyer and Company.
99.(c)(7). Form of Articles of Merger and Plan of Merger.
99.(c)(8). Environmental Due Diligence Agreement by and between Parent and Company, dated
April 22, 1996.
99.(c)(9). Form of Contingent Resignations tendered by each of John Scriven, N. Stewart
Rogers, James H. Wiborg, Andrew V. Smith, Curtis P. Lindley, James W. Bernard,
Roger L. Kesseler, Paul H. Hough and Richard E. Engebrecht.
99.(d)(1). Offer to Purchase, dated June 7, 1996.
99.(d)(2). Letter of Transmittal.
99.(d)(3). Letter dated June 7, 1996, from D.F. King & Co., Inc. to Brokers, Dealers,
Commercial Banks, Trust Companies and Other Nominees.
99.(d)(4). Letter to Clients of Brokers, Dealers, Banks, Trust Companies and Other Nominees.
99.(d)(5). Notice of Guaranteed Delivery.
99.(d)(6). Guidelines for Certification of Taxpayer Identification Number on Substitute Form
W-9.
99.(d)(7). Certificate of Foreign Status, Form W-8.
99.(d)(8). Text of Press Release issued by Company, dated June 3, 1996.
99.(e)(1). Schedule II of the Offer to Purchase, dated June 7, 1996.
</TABLE>
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* Confidential treatment requested with respect to the names of the lending
banks as well as certain material terms of the loan agreement.
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(9)(1)
STANDBY ROLLOVER
AGREEMENT
BETWEEN
KONINKLIJKE PAKHOED N.V.
AND
[*]
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Article Page
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1. Definitions 2
2. Conditions for Acceptance 4
3. Acceptance 4
4. Special Market Circumstances 4
5. Interest and Reimbursements/Repayment of Advance 5
6. Maturity and Reduction of Facility 6
7. Conversion 6
8. Balance Sheet Ratios/Negative Statement 7
9. Payments 8
10. Increased Expenses 9
11. Expenses 9
12. Accounting for Payments 10
13. Transfer 10
14. Exercising of Rights 10
15. Annual Accounting 10
16. Proof of Claim 10
17. Accelerated Demand 11
18. Notices 12
19. Differences 12
</TABLE>
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STANDBY ROLL-OVER AGREEMENT
The undersigned:
1. The limited company KONINKLIJKE PAKHOED N.V., established in Rotterdam,
hereafter known as: "Borrower",
and
2. the limited company [*],
maintaining an office in Rotterdam (Coolsingel 119), hereafter known
as: "Bank";
HAVING TAKEN INTO CONSIDERATION:
- - that the Bank and Borrower on 12 June 1985 entered into a standby
roll-over agreement up to a maximum amount of NLG 150,000,000.00 (one
hundred fifty million guilders), which agreement was last modified
during the agreement dated 3 September 1990, this (modified) agreement
hereafter being known as: "1985 Agreement";
- - that the Bank by letter dated 21 September 1995 has offered Borrower in
replacement of the 1985 Agreement, which hereby expires, a standby
facility up to a maximum amount of NLG 100,000,000.00 (one hundred
million guilders) with conversion options, and Borrower has accepted
this offer;
- - that the parties now wish to set forth the conditions of the aforesaid
facility;
STIPULATE AS FOLLOWS:
Article 1
DEFINITIONS
In this agreement, the terms mentioned hereafter shall have the meanings given
below.
AIBOR: (Amsterdam Interbank Offered Rate) the interest
percentage on an annual basis for one, three, six and
twelve-month interbank money deposits, which are
published daily by De Nederlandsche Bank N.V. at
approximately 12:00 A.M. (Dutch time). The rates are
an average of the prices (so-called selling prices)
at which a number of leading banks (established in
the Netherlands) are willing to provide each other
deposits at the time of measurement (around 12:00
o'clock) for the respective period of time;
Basis Guilder Amount: with respect to an Advance issued in a currency of
choice, the amount in guilders which was used in
calculating the countervalue upon acceptance of that
Advance;
Start Date: the date of signing of this agreement;
Facility: a standby credit facility on roll-over basis up to a
maximum amount of NLG 100,000,000.00 (one hundred
million guilders), which facility the Bank has made
available to Borrower under the terms and
stipulations of this agreement;
Currencies of Choice: the foreign currency (or currencies) which are freely
convertible into guilders and which according to the
Bank are current in the interbank Eurodeposit market,
in which Borrower may accept Advances in accordance
with the stipulations of this agreement;
<PAGE> 3
Loan Amount: the sum of the Advances which Borrower has accepted
at any time in guilders or in one or more Currencies
of Choice under the Facility, with the understanding
that the Basis Guilder Amount applies to the latter;
LIBOR: the interest percentage on an annual basis at which,
according to the Bank deposits in the respective
Currency of Choice, comparable to the respective
Advance as regards amount and maturity, are offered
by banks to leading banks in the London interbank
money market at 11:00 P.M. (London time), two Work
Days prior to the start of the respective Advance;
Countervalue: the amount in the respective Currency of Choice,
converted from guilders, at the average rate of said
Currency of Choice with respect to the guilder as
officially quoted on the Amsterdam Exchange, or for a
Currency of Choice which is not officially quoted,
the market rate applicable to the Bank for purchase
of said Currency of Choice with guilders, three Work
Days prior to the start of the respective Advance;
Advance: a monetary sum of NLG 5,000,000.00 (five million
guilders) or a multiple thereof, or the Countervalue
thereof in a Currency of Choice, rounded off to units
of one million, which the Bank loans to the Borrower
for one, three, six or twelve months, as the Borrower
chooses, under the Facility. An Advance with a
different maturity can only be accepted with express
consent of the Bank. This consent is dependent on the
circumstances in the interbank money market of the
respective currency (Currency of Choice). The Bank's
decision in this is binding on Borrower;
Work Day: a day on which the banks in the Netherlands and, if a
Currency of Choice is involved, [those] in the United
Kingdom and in the country of the respective Currency
of Choice, are open to the public.
Article 2
CONDITIONS FOR ACCEPTANCE
Borrower can, with the advent of the Start Date, observing the conditions of
this agreement, request the Bank to make available one or more Advances under
the Facility on a Work Day, provided the following conditions are fulfilled:
(i) none of the events or circumstances provided in Article 17 arises;
(ii) the Bank from the Borrower its latest articles of association.
Article 3
ACCEPTANCE
a. If Borrower wishes to accept an Advance in guilders, it shall notify
the Bank thereof by telephone or telefax no later than 11:00 A.M. on
the day of acceptance of the particular Advance, during which Borrower
shall indicate the date of acceptance, the amount, and the maturity of
the Advance.
<PAGE> 4
b. Borrower can request the Bank to make available one or more Advances in
a Currency of Choice under the Facility, observing a deadline of three
Work Days. The request shall contain the date of acceptance, the
amount, the maturity and the Currency of Choice of the desired Advance.
c. If Borrower has notified the Bank by telephone, the Bank has the right
to demand a written confirmation from Borrower before making available
an Advance.
d. The Bank shall provide each advance loaned to an account or accounts at
the Bank opened in the name of Borrower.
e. In the choice of the Advances, Borrower shall pay attention to the
reduction of the Facility, the corresponding repayments per Article 6,
and the conversions per Article 7.
f. The Advances accepted under the 1985 Agreement on the date of signing
of this agreement, up to a total amount of NLG 40,000,000.00 (forty
million guilders), are considered as being assumed under the Facility,
with the understanding that the interest rate prevailing for those
Advances (i.e., as determined under the 1985 Agreement) remain in force
until the end of the particular maturity of the Advances.
Article 4
SPECIAL MARKET CIRCUMSTANCES
a. If the Bank prior to acceptance of an Advance in guilders ascertains
that, by reason of circumstances which affect the interbank money
market of Amsterdam, the interest on an Advance to be accepted cannot
be reasonably determined on the basis of AIBOR, the Bank shall
immediately inform Borrower of this.
b. Parties shall then take counsel as to a substitute interest for the
requested Advance. If this consultation has not led to agreement by
11:00 A.M. on the first day of the Advance, the Bank will then
determine the substitute interest for the Advance. Borrower will not
then be obligated to accept the Advance, provided it notifies Bank of
such without delay, but no later than 12:00 o'clock of the same day.
c. The substitute interest shall be based on the expenses of the Bank,
plus the margin mentioned in Article 5.a.1. If Borrower cannot agree to
the substitute interest, the obligation of the Bank to provide the
Advance requested by Borrower is suspended until the Bank informs
Borrower that it can reasonably establish the interest on the basis of
AIBOR.
d. In the situation mentioned in the paragraphs preceding this article,
the Bank makes no reservation with respect to the possibility of making
guilders available.
e. The Bank shall keep Borrower apprised of the developments of AIBOR and
immediately inform Borrower whenever the interest as provided in
Article 5.a.1 can be reasonably established on this basis.
f. If the Bank prior to acceptance of a Currency of Choice ascertains
that, by reason of circumstances which affect the interbank money
market of London, the interest on an Advance to be accepted cannot be
reasonably determined on the basis of LIBOR, the Bank shall immediately
inform Borrower of this.
g. Parties shall then take counsel as to a substitute basis on which the
Bank shall make available the requested Advance to Borrower. If this
consultation has not led to agreement by 11:00 o'clock one day before
the start of the Advance, the Bank shall determine the substitute basis
and Borrower shall have the right to refrain from accepting the Advance
and to request the Bank to provide the Advance in guilders. In the
latter case, the Bank shall provide the Advance to Borrower in
guilders, without prejudice to the provisions in Paragraphs a through e
of this Article 4.
h. The Bank shall from time to time keep Borrower apprised of the
developments on the London interbank money market with respect to the
particular Currency of Choice and immediately notify it whenever the
interest can be reasonably established on the basis of LIBOR.
Article 5
INTEREST AND REIMBURSEMENTS/REPAYMENT OF ADVANCE
a. Borrower promises:
(i) to pay the Bank for each Advance accepted under the Facility
an interest on an annual basis that is equal to AIBOR (in the
case of guilders) or LIBOR (in the case of a Currency of
Choice), in both cases plus a margin of [*]; from 1 December
1997 this margin shall be [*];
<PAGE> 5
(ii) to pay the Bank, for the daily amount not accepted under the
Facility, from the Start Date, a readiness commission of [*]
on an annual basis, which commission Borrower shall satisfy on
the last day of each prior calendar quarter, for the first
time on 31 December 1995. From 1 December 1997, the readiness
commission shall be [*] on an annual basis.
b. The computation of the interest and the commission shall be done on the
basis of the actual number of days and a year of 360 days, unless an
Advance is provided in Belgian Francs or British Pounds, in which case
a year of 365 days is used.
The determination of interest by the Bank shall be binding on Borrower,
unless error is proven. The Bank shall confirm the established interest
in writing to Borrower. The interest for each Advance is due at the
same time as the repayment of that Advance. In the case of an Advance
of longer than six months, the interest shall be computed after every
six months and be paid by Borrower.
c. Each Advance shall be repaid at the end of the maturity thereof. The
repayments are made in guilders or, insofar as concerns an Advance in a
Currency of Choice, in that Currency of Choice. But if, through
monetary circumstances which lie entirely outside the influence of
Borrower, Borrower cannot obtain the Currency of Choice in order to pay
back the Advance at the end of its maturity, Borrower shall immediately
inform the Bank of such. The parties shall then enter into consultation
to attempt to implement the repayment in different fashion. If parties
within five Work Days from the aforesaid communication of Borrower have
not reached an agreement as to the repayment, Borrower shall repay the
Advance in guilders on the following Work Day. The expenses and
currency loss which ensue to the Bank from invoking this clause shall
be charged to Borrower and shall be paid by Borrower at first demand of
the Bank.
d. Repayment of an accepted Advance before the end of its maturity is not
permitted.
Article 6
MATURITY AND REDUCTION OF FACILITY
a. The amount of the Facility shall be reduced on two deadlines, of NLG
50,000,000.00 (fifty million guilders) each, the first on 1 December
2002 and the last on 1 December 2004. On 1 December 2004, the Facility
will thus be terminated; Borrower shall then redeem the full amount
outstanding under the Facility on that date.
b. Borrower is permitted at all times to reduce the Facility at an
accelerated rate with an amount of NLG 5,000,000.00 (five million
guilders) or a multiple thereof, provided no (further) use is made of
the desired accelerated reduction on the date thereof. Borrower shall
inform the Bank in writing of its intention to make a reduction, at
least ten days before an accelerated reduction. This communication is
irrevocable.
Article 7
CONVERSION
a. During the term of the Facility, but no later than 1 December 2001,
Borrower is entitled to request the Bank, observing a deadline of at
least ten Work Days, to entirely or partially convert the Facility into
one or more monetary loans in guilders for the remaining term of the
Facility at a fixed rate of interest ("Fixed Loan(s)"). If an Advance
is running, the conversion thereof may only occur on the day following
the last day of maturity of that Advance.
b. The request mentioned under Item a is made in writing to the Bank,
containing the desired date of conversion, the amount to be converted,
being at least NLG 10,000,000.00 (ten million guilders) or a multiple
thereof, and the desired interest period, as well the declaration by
Borrower that the conditions for acceptance as mentioned in Article 2
continue to be fulfilled. If these conditions are met, the Bank shall
then satisfy the request of Borrower.
c. The interest on the Fixed Loan shall be determined for an interest
period of one year or a multiple thereof, chosen by Borrower, up to the
maximum of the remaining maturity of the Facility.
The Bank shall determine the interest one to five Work Days prior to
the date of conversion, or the first day of a new interest period, at
the cost price to the Bank, plus a margin to be agreed upon between
Bank and Borrower at that moment.
The interest is then computed on the basis of a month of 30 days and a
year of 360 days and shall be payable at the end of six months. After
determination of the interest, the request mentioned under Item a is
irrevocable.
d. Borrower shall redeem the Fixed Loan(s) at semiannual terms or at
periods of time to be stipulated with the Bank, while the provisions of
Article 6.a shall apply accordingly.
<PAGE> 6
e. Borrower shall have the option of early repayment of 5% (five percent)
of the original principal of a Fixed Loan per year, this being done
with no special reimbursement, provided this repayment is reported to
the Bank by Borrower one month in advance, in writing (including
telefax), and the day of payment coincides with an interest due date.
f. Larger accelerated redemptions than those mentioned under Item c are
only permitted to Borrower, with the same notification and on the same
date as Item e, if Borrower pays the Bank a reimbursement at the same
time as the accelerated repayment and the interest. The reimbursement
is determined by the difference between:
(i) the sum of the contractual interest installments in cash,
remaining as of the date of early repayment, on the amount to
be repaid early;
and
(ii) the sum of interest paid in cash which the Bank will be able
to use for monetary loans comparable to the accelerated
repayment in amount and maturity as of the date of early
repayment ("Actual Interest"),
with a minimum of 1% (one percent) of the amount being repaid early.
The conversion into cash shall occur at the Actual Interest, if the
contractual interest is lower than the Actual Interest the
reimbursement shall be equal to 1% (one percent) of the amount being
repaid early, except in the event that the contractual interest is more
than 1% (one percent) lower than the Actual Interest, in which case no
reimbursement is owed.
g. The other conditions of this agreement shall be applied accordingly to
the Fixed Loan(s), when possible.
Article 8
BALANCE SHEET RATIOS, NEGATIVE STATEMENT
a. Borrower promises to ensure that, during the term of the Facility:
(i) on the consolidated balance sheet, a ratio between the current
assets and current liabilities, including obligations maturing
within one year by reason of long and medium-term debt, shall
always be maintained at a minimum of one to one (1:1);
(ii) on the consolidated balance sheet, a ratio between long
[term?] borrowed capital and shareholders' equity shall never
exceed two point five to one (2.5:1).
By long borrowed capital is meant here the sum of:
- all debts of long and medium-long term, excluding the
obligations falling due within one year by reason of
long and medium-long debts, which should be listed
among the current liabilities;
- 100% (one hundred percent) of the provisions, minus
the provision for exchange differences and that
portion of the provisions which is listed among the
shareholders' equity, as indicated below.
By shareholders' equity is meant here the sum of:
- share capital;
- share premium reserves;
- other free reserves, with the exception of a reserve
resulting from revaluation of fixed assets;
- 50% (fifty percent) of the taxation provision.
The aforesaid ratios should always be read in agreement with and on the
basis of the balance sheet and profit and loss statement, officially
approved by the accountants, for the most recent fiscal year, with the
accompanying explanation, produced in accordance with the statutory
provisions regarding annual accounts.
b. Borrower promises not to take out any mortgage on its real property
situated in the Netherlands without consent of the Bank, on which
approval the Bank may impose conditions.
c. Wherever this article speaks of real property, real rights are also
understood thereby.
d. Borrower promises that all companies in which it directly possesses or
will possess the majority of the voting capital, or in which it,
together with or by means of one or more companies, whether or not
directly associated with each other, in which it possesses the majority
of the voting capital, possess or shall possess the majority of the
voting capital, shall assume the same obligations as mentioned under
Item b and Item c above.
Article 9
PAYMENTS
<PAGE> 7
a. Borrower shall make payments of amounts which it shall owe by virtue of
this agreement without any deduction or compensation (including
deduction or reduction by virtue of any levy or taxation of any kind,
but not including assessments for the Bank which are designated by law
as Dutch tax withheld on the corporate assessment and levied on
Borrower) and without cost to the Bank on the dates of maturity,
insofar as concerns payment in guilders, at the Bank's office in
Rotterdam, Coolsingel 119, in legal tender of the Netherlands as of the
date of payment, unless the Bank has notified Borrower of a different
payment address in the Netherlands in good time.
b. Payments in a Currency of Choice shall also be made without any
deduction or compensation (including deduction or reduction by virtue
of any levy or taxation of any kind, but not including assessments for
the Bank which are designated by law as Dutch tax withheld on the
corporate assessment and levied on Borrower) and without cost to the
Bank to the account of the Bank at its correspondent in the country of
the respective Currency of Choice, to be indicated to Borrower in
advance.
c. If the date of maturity of any payment does not fall on a Work Day, the
next work day shall qualify as the date of maturity, unless the next
Work Day falls in the next calendar month, in which case the date of
maturity is the immediately preceding Work Day, recalculating the
interest amount in both cases.
Article 10
INCREASED EXPENSES
If, by virtue of statutory provisions or measures, or a change in the
enforcement or interpretation thereof, including provisions or measures of De
Nederlandsche Bank N.V. or of any authority of a country of the Currency of
Choice in which any Advance has been provided:
a. the Bank with respect to the Loan amount and/or the interest under this
agreement is subject to a tax assessment other than an assessment on
profit or a Dutch withholding of the corporate taxation;
b. the Bank is obligated to maintain reserves or deposits with respect to
Advances loaned or to be loaned under this agreement, and/or if a
change occurs in the obligation;
c. the Bank is subjected to any other obligation with respect to this
agreement;
and thereby the expenses associated with the Advances in a Currency of Choice
loaned or to be loaned by virtue of this agreement are increased for the Bank:
1. the Bank shall inform Borrower of this as soon as possible, and consult
with Borrower as to the extent to which the harmful consequences
thereof can be limited, and
2. Borrower shall pay the Bank, at its first request in this regard, as
much extra as is necessary to hold the Bank harmless from these extra
expenses, and
3. Borrower shall be entitled to make early repayment on the Loan Amount,
together with interests, and whatever other amount, wholly or
partially, is owed by Borrower in that Currency of Choice by reason of
this agreement, but in amounts of at least NLG 5,000,000.00 (five
million guilders) or the Countervalue thereof, provided it has given
written notice of its intention to the Bank within fourteen days of the
notification by the Bank per Item 1 above, without prejudice to
Borrower's obligation to compensate the Bank, at its request, for all
damages which the Bank shall suffer up to the end of the particular
Advance as a direct consequence of such an early repayment. Repayment
shall occur within fourteen days of Borrower's communication as
provided in this paragraph.
Article 11
EXPENSES
All expenses incurred by the Bank as a direct consequence of the fact that
Borrower does not fulfill any obligation which it has assumed by virtue of this
agreement, or does not do so in timely or proper manner, including all
reasonable expenses of lawyers and other outside experts, as well as processing
fees, assessed against whomever, but in direct connection with the rights of the
Bank against Borrower, shall be charged to Borrower and paid by Borrower at the
first demand of the Bank.
Article 12
ACCOUNTING FOR PAYMENTS
Whatever the Bank shall receive from Borrower by virtue of this agreement shall
be applied to diminish or to pay the debt of Borrower, first of all that
resulting from expenses incurred, then the readiness commission, then
reimbursements, then the interest, and lastly the principal.
Article 13
<PAGE> 8
TRANSFER
a. Borrower promises not to withhold its approval from the Bank, except
for reasonable grounds, if the Bank wishes to transfer the rights and
obligations from this agreement in whole or in part to third parties
and also promises to acknowledge this transfer in writing. Any expenses
arising from an assignment and transfer shall be charged to the Bank.
b. The Bank promises not to withhold its approval from the Borrower,
except for reasonable grounds, if the Borrower wishes to transfer the
rights and obligations from this agreement in whole or in part to third
parties within its group and also promises to acknowledge this transfer
in writing. Any expenses arising from an assignment and transfer shall
be charged to the Borrower.
Article 14
EXERCISING OF RIGHTS
The exercising by the Bank of the rights resulting to it from this agreement,
the times at which and the order in which these shall be exercised, shall be the
choice of the Bank, without the nonexercising of any right being susceptible of
interpretation that the Bank has relinquished that right.
Article 15
ANNUAL ACCOUNTS
Borrower shall hand over to the Bank each year, as soon as possible after they
are produced, but no later than six months after the end of the accounting year,
its consolidated annual accounts approved by an independent certified
accountant. Furthermore, Borrower shall provide to the Bank, at its first
demand, all other explanations which the Bank may reasonably request of
Borrower.
Article 16
PROOF OF CLAIM
The bookkeeping of the Bank shall furnish complete proof of the amount of and
reason for all amounts owed by Borrower to the Bank by virtue of this agreement,
although Borrower may furnish counter-evidence.
In event of a difference as to any balance which is due and payable by Borrower
according to the books of the Bank, Borrower shall not be entitled to refuse or
delay the payment of that balance in whole or in part.
Article 17
ACCELERATED DEMAND
a. The Loan Amount, together with interest and all other amounts owed by
Borrower by reason of this agreement, are immediately demandable in
their entirety, without any summons, serving of notice, or other
formality being required:
1. if Borrower fails to fulfill any obligation to the Bank by
virtue of this agreement, or does not do so in timely or
proper manner, and Borrower still does not fulfill such an
obligation within fourteen days of the Bank's having made such
a request of it;
2. if Borrower requests suspension of payment, files for
bankruptcy, is declared bankrupt, or if its real property or
any significant portion thereof can be seized or if a writ of
sequestration is converted into a garnishment order;
3. if Borrower ceases its operations or resolves on dissolution;
4. if Borrower transfers its operations to a new or different
company or otherwise alienates them;
5. if Borrower is in default of any payment obligation by virtue
of any monetary loan provided or to be provided by third
parties, any financing facility, or any long-term guarantee
facility, each with an original maturity of more than twelve
months, in consequence of which the respective monetary loan
and/or facility is demanded to be repaid in its entirety at an
accelerated date, with the understanding that the Bank can
only demand repayment under this agreement if the aforesaid
default of Borrower is so serious that the ability of Borrower
to satisfy its payment obligations under this agreement with
respect to the Bank is significantly jeopardized.
By long-term guarantee facility is meant in this connection a
long-term agreement between a bank and Borrower, under which
this bank, at the terms as stipulated between the respective
bank and Borrower, guarantees Borrower's payment obligations
with respect to third parties.
<PAGE> 9
b. Borrower is obligated to inform the Bank immediately as to the
occurrence of one or more of the circumstances affecting Borrower as
mentioned above under Item a, Subitems 2, 3, 4 or 5.
The obligations of the Bank by virtue of this agreement shall end immediately
upon occurrence of one of the events mentioned above under Paragraph a.
If the Bank demands repayment, Borrower shall immediately owe the Bank a
reimbursement of 1-1/2% (one and a half percent) of the amount demanded by the
Bank, without prejudice to the Bank's right of complete reimbursement of damages
and expenses if these should amount to a higher sum.
Without prejudice to the provisions of the preceding paragraphs of this article,
Borrower in event of late payment of any amount owed by it by virtue of this
agreement is obligated to pay, on the amount paid late to the Bank during the
period from the due date until the date of payment, a reimbursement of 2-1/2%
(two and a half percent), annually, above a) the interbank selling price in
Amsterdam for call money, insofar as guilders are concerned, and b) the
"interbank overnight interest rate" in London for the respective Currency of
Choice, in both cases on each day of the tardy payment at 11:00 A.M. Amsterdam
or London time, respectively. As regards tardy payment of a redemption
installment, this reimbursement takes the place of the interest mentioned in
Articles 5 and 7 after the maturity date.
Article 18
NOTIFICATIONS
Notifications and communications with respect to this agreement can only be
given in writing or by telefax, unless otherwise specified in this agreement,
and at the addresses reported below:
For Borrower: Koninklijke Pakhoed N.V.
Dept. Treasury
P. O. Box 863
3000 AW Rotterdam
Telefax: (010) 4147956
For the Bank: [*]
Address changes are only valid after written communication has been given
thereof to the other party.
Article 19
DIFFERENCES
a. Differences with respect to this agreement shall be submitted to the
competent magistrates of Amsterdam, unless otherwise provided.
b. The General Conditions of the Bank shall apply to this agreement,
unless otherwise expressly stipulated in this agreement, as have been
filed by the Dutch Banking Association on 11 November 1987 with the
clerk of the District Courts of Amsterdam and Rotterdam, with the
understanding that the Bank promises not to invoke the Articles 18, 19,
20, 21 and 33 of the General Conditions.
c. Changes in this agreement, including the General Conditions mentioned
under Item b, are only valid if both parties have given their written
consent to them.
THUS DRAWN UP AND SIGNED IN DUPLICATE
at Rotterdam, on 30 November 1995
Koninklijke Pakhoed N.V. [*]
<PAGE> 1
(9)(2)
[*]
CREDIT AGREEMENT
The undersigned:
the limited liability company [*], hereafter known
as the Bank,
and
the limited liability company Pakhoed Holding N.V., established at Rotterdam,
Boompjes 60-68, hereafter known as Borrower,
stipulate to the following:
1. The Bank shall provide on 1 September 1989 a revolving credit facility
for an amount equal to NLG 50,000,000.00 (in words: fifty million
guilders) or the equivalent - in whole or in part - in any other
convertible currency available to the Bank.
2. Borrower is permitted to avail itself of the facility
a. by borrowing in current account
b. by overnight money loans
c. by fixed advances (cash loans) with a maturity of one to
twelve months
d. by long-term loans, taking into account the total term of the
facility.
The borrower is permitted at all times to repay and reborrow, whether
in whole or in part, already borrowed sums in current account, fixed
advances (cash loans) and overnight money loans or to convert them into
long-term loans, taking into account the term of the facility for all
of this.
3. The following interest and conditions apply:
a. for borrowing in current account in Dutch guilders:
a debit interest rate of [*] per year above the discount rate
for promissory notes of De Nederlandsche Bank N.V., plus a
surcharge, depending on the money market, presently at 1%.
Changes in these surcharges shall be made known in a number of
newspapers of national circulation.
b. for borrowing in current account in foreign currency:
a debit interest rate based on the Eurocurrency market rates
plus a margin of [*] per year.
Initials: [*] Initials: PAKHOED HOLDING N.V.
<PAGE> 2
c. for overnight money loans and fixed advances (cash loans) in
Dutch guilders and foreign currency: the interbank selling
prices with a comparable amount and maturity, as these are
quoted at Amsterdam (AIBOR) or London (LIBOR), plus a
surcharge of [*] per year.
d. for long-term loans:
the costs of interbank assumed loans with a comparable amount
and maturity plus a margin of [*] per year.
e. readiness commission:
[*] per quarter on the portion of the facility not borrowed,
on a daily basis.
f. No closing commission shall be charged.
g. The interest and the readiness commission shall be calculated
for the actual number of days elapsing, each month being taken
at the correct number of days and a year being taken at 360
days, insofar as no other custom exists for the particular
currency.
h. The interest per Items a, b and d shall be paid at the end of
each quarter. The interest per Item c should be paid at the
end of the agreed interest period.
i. The readiness commission shall be computed per quarter and
payable at the end of the quarter, for the first time on 30
September 1989.
4. a. The facility shall be repaid in its entirety on 31 August
1999.
b. The facility can be reduced by borrower at all times, in whole
or in part, without penalty, provided that no (more) use
thereof is made on the day of the desired early reduction,
whereupon the readiness commission is payable solely on the
reduced and unused portion.
5. Early redemption of long-term loans is permitted, provided such a
redemption is reported to the Bank in writing at least five work days
in advance. The expenses incurred by the Bank and the possibly lost
income from reinvestment of the early redeemed amounts shall be charged
to the borrower. Such redeemed amounts can be again borrowed within the
framework and the maturity of this facility.
6. The not yet redeemed portion of the principal can, with the interest
and whatever else is owed by the borrower to the Bank by reason of this
agreement, be demanded in its entirety and immediately by the Bank,
without any summons or notice being required:
a. if borrower fails to fulfill any obligation to the Bank by
virtue of this agreement, or does not do so in timely or
proper manner, and borrower still does not fulfill such an
obligation within fourteen days of the Bank's having made such
a request of it;
b. if borrower requests suspension of payment, files for
bankruptcy, is declared bankrupt, or if its real property or
any significant portion thereof can be seized or if the
valuation of a writ of sequestration becomes final;
c. if borrower ceases its operations or resolves on dissolution;
d. if borrower transfers its operations to a new or different
company or otherwise alienates them;
7. Borrower shall be in default by the mere fact of the occurrence of one
of the instances of immediate demandability mentioned in Article 6 of
this agreement. It shall give the Bank immediate notice as soon as one
or more of the facts occur which, by virtue of the provisions of this
agreement, might make the sums borrowed under this facility demandable
and of any change in its articles of association.
8. All Dutch taxes on the interest of this facility as such, which are not
taxes which are designated in the Netherlands as Income and/or
Corporate Taxes, or as withholding of these taxes, and all expenses
which are reasonably connected with the maintenance of the rights from
the agreement and/or with collection of the amount owed by reason of
this facility, in court or out of court, shall be paid by the borrower.
9. Borrower shall hand over the consolidated annual accounts, audited by a
certified accountant, within three months of the appearance of its
annual report, but no later than six months after the end of the last
accounting year. Borrower shall furnish to the Bank, on its first
demand, the explanations which the Bank may reasonably request.
10. 1. Borrower promises to ensure that during the course of the loan
a. a ratio between its current assets and current
liabilities, including the obligations due within one
year from long and medium-long term debt, is always
maintained at 1:1, at least,
<PAGE> 3
b. a ratio between long borrowed capital and
shareholders' equity of 2.5:1 is never exceeded in
the consolidated balance sheet.
Initials: [*] Initials: PAKHOED HOLDING N.V.
<PAGE> 4
By long borrowed capital is meant here the sum of:
- all debts of long and medium-long term, excluding the
obligations falling due within one year by reason of
long and medium-long debts, which should be listed
among the current liabilities;
- 100% of the provisions, minus the provision for
exchange differences and that portion of the
provisions which is listed among the shareholders'
equity, as indicated below.
By shareholders' equity is meant here the sum of:
- share capital;
- share premium reserves;
- other free reserves, with the exception of a reserve
resulting from future revaluation of fixed assets;
- 50% of the taxation provision.
The aforesaid ratios should always be read in agreement with
and on the basis of the balance sheet and profit and loss
statement, officially approved by the accountants, for the
fiscal year 1973, with the accompanying explanation, which
accounting basis shall always be handled consistently in
future.
2. Borrower promises not to take out any mortgage on its real
property situated in the Netherlands without consent of the
Bank, on which approval the Bank may impose conditions.
3. Wherever this article speaks of real property, real rights are
also understood thereby.
4. Borrower promises that all companies in which it directly
possesses or will possess the majority of the voting capital,
or in which it, together with or by means of one or more
companies, whether or not directly associated with each other,
in which it possesses the majority of the voting capital,
possess or shall possess the majority of the voting capital,
shall assume the same obligations as mentioned under Item 2
and Item 3 above.
11. Notifications and communications with respect to this agreement should
occur in writing, by telex or telefax, unless otherwise explicitly
provided, and should be made at the addresses mentioned below:
for the Bank:
[*]
and for the borrower:
Koninklijke Pakhoed N.V.
Dept. Treasury
P. O. Box 863
3000 AW ROTTERDAM
Telex: 22112
Telefax: 010-4139829
12. Dutch law applies to this agreement and its execution. Differences
involving this agreement and the execution thereof shall be adjudicated
in the first instance by the competent magistrates of Rotterdam.
13. The "General Conditions" of the Bank, which are drawn up by the Dutch
Banking Association and have been filed with the clerk of the District
Courts of Amsterdam and Rotterdam on 11 November 1987 and which have
been made known to the borrower, are also applicable to this agreement,
but with the exception of Articles 18, 19, 20, 21 and 33. Where the
conditions deviate, this agreement shall prevail.
Thus having been stipulated and drawn up in duplicate and signed in Rotterdam,
on 1 September 1989.
CREDIT [*] PAKHOED HOLDING N.V.
<PAGE> 1
(9)(3)
[*]
- --------------------------------------------------------------------------------
The undersigned:
1. The limited liability company Koninklijke Pakhoed N.V., established
at Rotterdam, hereafter known as: borrower
and
2. The limited liability company [*], established in
Amsterdam, hereafter known as: the bank,
considering:
- - that the bank has offered the borrower, in its letter dated 17
August 1995, a multi-currency standby facility to replace the
standby facility of NLG 50 million, dated 5 July 1991, and the
standby facility of NLG 50 million, dated 16 October 1991, which
hereby expire.
- - that the bank and borrower wish to regulate the conditions under
which borrower can avail itself of this facility;
stipulate to the following:
Article 1 Definitions
1.01 The following terms in this agreement are defined as follows:
a. AIBOR: the interest percentage for interbank deposits of
comparable maturity in guilders, as ascertained by De Nederlandsche
Bank N.V. on the day of borrowing at 12:00 A.M. (Dutch time);
b. Eurocurrency: freely convertible U.S. Dollars, German Marks,
Pounds Sterling, Belgian Francs, French Francs, Swiss Francs,
Swedish Krone and Australian Dollars.
c. LIBOR: the interest percentage at which interbank deposits in
identical currency are offered for comparable amounts and
maturities by the banks to first-class banks in the London
Interbank Market at 11:00 A.M. (London time), two work days prior
to the borrowing day;
d. Limit: the maximum amount of the facility, expressed in Dutch
guilders, which may be (still) issued at any time, taking into
account the provisions of Article 6;
e. Countervalue: the result of the outstanding amounts in
Eurocurrency, multiplied by the selling price as is established by
the bank for the sale of Eurocurrency in return for Dutch guilders
at 11:00 A.M.
f. Due Date(s): the date(s), by 12:00 A.M., on which borrower must
pay (back) any amount that it owes to the bank by reason of this
agreement.
g. Work Day: a day on which banks in Amsterdam, London, and the place
where any amount must be paid by virtue of this agreement, are open
for bank business.
Article 2 Amount
2.01 The bank shall provide to borrower as of the date of signing of
this agreement and up to 1 December 2005 a facility in the amount
of a maximum of f. 100,000,000.00 (in words: one hundred million
guilders) or the Countervalue thereof in Eurocurrency, under the
following conditions and provisions.
Article 3 Form
3.01 Borrower can avail itself of the facility by borrowing:
a. in the form of one or more short-term loans in Dutch guilders, for
periods of 1, 3, 6 or 12 months, in amounts of f. 1,000,000.00 or a
multiple thereof;
b. in the form of one or more medium-term loans in Dutch guilders,
with maturities of 2, 3, 4 or 5 years, in amounts of f.
1,000,000.00 or a multiple thereof;
c. in the form of one or more short-term loans in Eurocurrency, for
periods of 1, 3, 6 or 12 months, in amounts with a Countervalue of
f. 1,000,000.00 or a multiple thereof, rounded off to 100,000 in
the particular currency.
<PAGE> 2
3.02 Borrower must select the maturities of short-term and medium-term
loans so that they do not exceed the term of the facility.
Article 4 Availability/Disbursement
4.01 The facility is only (still) available if borrower satisfies the
ratios and obligations to the bank as stipulated in Article 11 and
none of the events mentioned in Article 10 has occurred.
4.02 If borrower wishes to borrow one (or more) short-term loan(s) in
Dutch guilders, it shall inform the bank of this by telephone, no
later than 10:00 A.M. on the day of borrowing, indicating the
desired amount and the desired period, this communication being
binding on borrower on the day of the borrowing; the bank shall
notify the borrower as soon as possible on the day of borrowing
what the prevailing interest rate is for the desired borrowing in
accordance with Article 5. Borrowing in the form of short-term
loans in Dutch guilders can only be done within the Limit. The bank
shall send a confirmation of each borrowing to Koninklijke Pakhoed
N.V., according to the form included in Exhibit A. Such borrowing
is regulated by the provisions contained in the respective
confirmation, insofar as these differ from the provisions of this
agreement.
4.03 If borrower wishes to borrow one (or more) medium-term loan(s) in
Dutch guilders, it shall give the bank written notification of this
no more than two weeks before the borrowing, indicating the date of
borrowing, the desired amount and the desired period; the bank
shall inform borrower as soon as possible, but no more than three
weeks prior to the day of borrowing, what the interest rate is for
the desired borrowing according to Article 5. After establishing
the interest and acceptance thereof by borrower, said communication
is irrevocable. Borrowing in the form of medium-term loans in Dutch
guilders can only be done within the Limit and against signing of
an acknowledgement of debt in accordance with the form included in
Exhibit B of this agreement. Such borrowing is regulated by the
provisions included int he respective acknowledgement of debt,
insofar as these differ from the provisions of this agreement.
4.04 If borrower wishes to borrow one (or more) short-term loan(s) in
Eurocurrency, it shall inform the bank of this by telephone, no
later than two work days prior to the borrowing before 10:00 A.M.,
indicating the desired currency and period, this communication
being binding on borrower on the day of the borrowing; the bank
shall notify the borrower as soon as possible on the day of said
communication what the prevailing interest rate is for the desired
borrowing in accordance with Article 5. The bank shall include the
relevant data for this loan in a written confirmation. Borrowing in
the form of short-term loans in Eurocurrency can only be done
within the Limit and insofar as the bank has funds up to the
desired amounts and for the desired periods. The bank shall send a
confirmation of each borrowing to Koninklijke Pakhoed N.V.,
according to the form included in Exhibit A.
4.05 In event of borrowing in Eurocurrency, the bank is entitled to
withhold from borrower an amount which is considered necessary,
within reasonable bounds, to cover exchange rate risk. Likewise,
the bank shall compute the Countervalue on the first Work Day of
each calendar month. The amount thus computed is taken into
consideration when determining whether borrowing is still possible
within the Limit.
4.06 In the event that the Countervalue computed per Article 4.05,
together with the total of the amounts borrowed in Dutch guilders,
exceeds the Limit, borrower shall, at first demand of the bank,
remit the amount by which the maximum credit facility is exceeded
to a deposit account as indicated by the bank. In the latter case,
a credit interest shall be paid on the thus-remitted amounts at the
applicable market rates for borrowers. These amounts shall be paid
back on first demand of borrower as soon as and as long as it
appears that the exceeding of the maximum amount of the facility
has diminished on a subsequent accounting date.
4.07 The disbursement of the short-term and/or medium-term loan(s) shall
occur by crediting a bank account, to be specified by borrower,
using the starting date of the particular loan as the value date.
4.08 The short-term loans borrowed under the agreements of 5 July 1991
and 16 October 1991 as of the date of signing of this agreement, in
a total amount of NLG 20,000,000 (in words: twenty million
guilders), are considered as being assumed under this agreement,
with the understanding that the interest applying to these
short-term loans (i.e., established under the aforesaid previous
agreements) remains in force until the end of the particular
maturity of the short-term loans.
Article 5 Interest and Commission(s)
5.01 Borrower shall pay the following debit interest rate on the amounts
in Dutch guilders borrowed during the term of this agreement:
<PAGE> 3
a. for short-term loans, AIBOR on the date of the borrowing, plus a
surcharge of [*] per year; this debit interest rate is included in
the confirmation sent out for the particular short-term loan, and
it is due on the last day of the period for which the short-term
loan is borrowed and should be paid at the same time as the
repayment of the principal on the Due Date of the short-term loan.
b. for medium-term loans, "cost of funds" of the bank, plus a
surcharge of [*] per year; this debit interest rate is included in
the acknowledgement of debt signed for the particular medium-term
loan, being due semiannually and charged to account after six
months, on 1 July and 1 January of each year.
5.02 Borrower shall pay, on the amounts in Eurocurrency borrowed as
short-term loan(s) during the term of this agreement, a debit
interest rate equal to LIBOR, as ascertained two days prior to the
day of borrowing, plus a surcharge of [*] per year. This debit
interest rate is due on the last day of the period for which the
short-term loan is borrowed and should be paid along with the
repayment of the principal on the Due Date of the short-term loan,
in the same currency as the principal.
5.03 The interest for borrowing under this facility shall be computed on
the number of actual days elapsed, for Dutch guilders on the basis
of a year of 360 days and for Eurocurrency according to the market
practices applying to the particular currency.
5.04 Borrower shall owe, at three months from the date of signing of
this agreement, a readiness commission of [*] per year (as of 1
December 1998, this commission amounts to [*] per year) on the
portion of the facility not borrowed on a daily basis, to be paid
at the end of the respective period on 1 January, 1 April, 1 July
and 1 October of each year.
5.05 As of the date on which any reduction of this facility takes effect
as provided in Article 6, the readiness commission is no longer due
on the amount of that reduction.
Article 6 Term, Reduction and Accelerated Redemption
6.01 The credit facility shall have a term until 1 December 2005, on
which date borrower shall have paid to the bank the amount still
owed by it by reason of this facility and this agreement, in a lump
sum.
6.02 As of 1 December 1996, borrower has the right to reduce this
facility in whole or in part, provided it makes no (further) use
thereof on the date of the desired accelerated reduction.
6.03 Borrower has the right to redeem the amounts borrowed as
medium-term loans on an accelerated basis, provided it gives the
bank written notice of its intention at least one month in advance.
Such redeemed amounts can be again borrowed within the framework
and the term of this facility.
6.04 Accelerated redemption of any amount borrowed as short-term loan is
not permitted, except in the instances mentioned by Article 10.
6.05 Reduction of this facility, insofar as it is not (yet) borrowed,
carries no penalty.
6.06 In event of accelerated redemption of a medium-term loan, borrower
shall pay to the bank the cash value of the difference between the
interest yet to be paid during the remaining term of the loan and
the interest which the bank can obtain by lending the amount to be
redeemed at an accelerated pace to another first-class bank for a
period equal to said remaining term. The cashing out shall occur at
the last-mentioned interest rate.
Article 7 (Re) Payment
7.01 Borrower shall make all payments which it owes by virtue of this
agreement to the bank on the Due Dates prior to 12:00 o'clock (by
giro), without any setting off of debt or any other limitation or
conditions of any kind. All Dutch taxes on the interest of this
facility as such, not being taxes which are designated in the
Netherlands as Income and/or Corporate Tax or as withholding tax,
shall be charged to the borrower.
7.02 In event of accelerated demand for repayment as provided in Article
10, all amounts owed to the bank shall be immediately paid off.
7.03 Without prejudice to the provisions of Article 10, borrower shall
repay to the bank each amount borrowed under this facility as a
loan on the Due Date of that particular loan.
7.04 If borrower wishes to again borrow a short-term or medium-term loan
or portions thereof for a subsequent period, the repayment of that
loan or the particular portion thereof
<PAGE> 4
shall not in actuality occur and the repayment and the renewed
provision of funds shall be considered to take place at the same
time. In such instances, Article 4 applies accordingly.
7.05 If any Due Date is not a Work Day, the next following Work Day
shall qualify as Due Date, unless the next following Work Day falls
in a new calendar month, in which case the Work Day preceding the
respective Due Date shall qualify as the Due Date.
7.06 Each payment shall be used, in the first place, to satisfy any
expenses, then to pay for commissions and interest, and finally to
redeem the principal.
Article 8 Nontimely Payments
8.01 In event of nontimely payment by borrower of any amount owed to the
bank by it in virtue or in consequence of the present agreement,
borrower shall be assessed a penalty interest of 1% per month on
the amount paid late for the time during which this remains unpaid;
for the outstanding amount, this penalty interest takes the place
of the interest applying to the particular loan in Article 5; it is
calculated up to the day of payment, portions of a month also being
computed according to the number of days actually elapsed on the
basis of a month of 30 days, and it should be paid at the same time
as the payment of the last paid amount.
Article 9 Expenses, Proof of Indebtedness
9.01 All expenses which are reasonably connected with collection of the
amount owed by virtue of this credit facility in court or out of
court, and/or incurred by the bank in maintaining and exercising
its rights, shall be charged to borrower.
9.02 Except for counter-evidence to be furnished by borrower, an extract
from the books produced and signed by the bank shall qualify as
full proof of the amounts owed by borrower by reason or virtue of
this agreement, and also insofar as the magnitude and reason
thereof are concerned.
Article 10 Accelerated Demand for Repayment
10.01 All amounts borrowed under this facility with the interest and
whatever else the borrower owes the bank by reason of this
agreement can be demanded immediately and in its entirely by the
bank, without any summons or notice being required:
(a) if borrower fails to fulfill any obligation to the bank by virtue
of this agreement, or does not do so in timely or proper manner,
and borrower still does not fulfill such an obligation within
fourteen days of the bank's having made such a request of it;
(b) if borrower requests suspension of payment, files for bankruptcy,
is declared bankrupt, or if its real property or any significant
portion thereof can be seized or if a writ of sequestration is
converted into a garnishment order;
(c) if borrower ceases its operations or resolves on dissolution;
(d) if borrower transfers its operations to a new or different company
or otherwise alienates them;
(e) if borrower is in default of any payment obligation by virtue of
any monetary loan provided or to be provided by third parties, any
financing facility, or any long-term guarantee facility, each with
an original maturity of more than twelve months, in consequence of
which the respective monetary loan and/or facility is demanded to
be repaid in its entirety at an accelerated date, with the
understanding that the bank can only demand repayment under this
agreement if the aforesaid default of borrower is so serious that
the ability of borrower to satisfy its payment obligations under
this agreement with respect to the bank is significantly
jeopardized.
By long-term guarantee facility is meant in this connection a
long-term agreement between a bank and borrower, under which this
bank, at the terms as stipulated between the respective bank and
borrower, guarantees borrower's payment obligations with respect to
third parties.
10.02 Borrower is obligated to notify the bank immediately of the
occurrence of the aforesaid circumstances.
Article 11 Ratios/Negative Pledge
11.01 Borrower promises to ensure that, during the term of the Loan;
<PAGE> 5
- - on the consolidated balance sheet, a ratio between the current
assets and current liabilities, including obligations maturing
within one year by reason of long and medium-term debt, shall
always be maintained at a minimum of one to one (1:1);
- - on the consolidated balance sheet, a ratio between long [term?]
borrowed capital and shareholders' equity shall never exceed two
point five to one (2.5:1).
By long borrowed capital is meant here the sum of:
A. all debts of long and medium-long term, excluding the obligations
falling due within one year by reason of long and medium-long
debts, which should be listed among the current liabilities;
B. one hundred percent (100%) of the provisions, minus the provision
for exchange differences and that portion of the provisions which
is listed among the shareholders' equity, as indicated below.
By shareholders' equity is meant here the sum of:
- share capital;
- share premium reserves;
- other free reserves, with the exception of a reserve
resulting from revaluation of fixed assets;
- fifty percent (50%) of the taxation provision.
The aforesaid ratios should always be read in agreement with and on
the basis of the balance sheet and profit and loss statement,
officially approved by the accountants, for the most recent fiscal
year, with the accompanying explanation, produced in accordance
with the statutory provisions regarding annual accounts.
11.02 Borrower promises not to take out any mortgage on its real property
situated in the Netherlands without consent of the bank, on which
approval the Bank may impose conditions.
11.03 Wherever this article speaks of real property, real rights are also
understood thereby.
11.04 Borrower promises that all companies in which it directly possesses
or will possess the majority of the voting capital, or in which it,
together with or by means of one or more companies, whether or not
directly associated with each other, in which it possesses the
majority of the voting capital, possess or shall possess the
majority of the voting capital, shall assume the same obligations
as mentioned under Item 2 and Item 3 above.
Article 12 Figures and Other Information
12.01 Borrower is obligated to send to the bank each year, within six
months of the closing out of the accounting year, its consolidated
annual accounts approved by outside accountant. Furthermore,
borrower, if it has borrowed any money under this credit facility,
is obligated to furnish the bank the explanations which the bank
may reasonably request of it, upon its demand.
Article 13 Banking Transactions
13.01 The bank has the "right of first refusal" as regards swap
transactions with respect to this facility.
Article 14 General Conditions
14.01 The General Conditions dated 11 November 1987, shall apply to this
agreement, unless otherwise expressly stipulated in this agreement,
as have been filed by the Dutch Banking Association on 11 November
1987 with the clerk of the District Courts of Amsterdam and
Rotterdam, except for Articles 18, 19, 20, 21, 31 and 33.
Article 15 Notices
15.01 All notices and communications with respect to this agreement
should be done in writing, per telex or telefax, unless otherwise
expressly determined, and should be sent to:
for the bank, to the address [*]
or telex [*]
attention
<PAGE> 6
or telefax [*]
attention
for the borrower, to the address: Treasury Dept.
P. O. Box 863,
3000 AW ROTTERDAM or
Blaak 333
3011 GB ROTTERDAM
or telefax 010-4147956
attention Treasury Dept.
Thus signed in duplicate at Rotterdam on 5 December 1995.
[*] Koninklijke Pakhoed N.V.
<PAGE> 7
[*]
- --------------------------------------------------------------------------------
Exhibit A
Re: Configuration of Short-Term Loans
Dear Sirs:
Re: Standby Facility
With reference to our telephone conversation today, we hereby confirm that we
are providing you a rollover loan in the framework of the standby facility, as
established in the agreement concluded between Koninklijke Pakhoed N.V. and [*]
on 5 December 1995, under the following conditions:
Amount:
Maturity:
Interest:
Payment:
Sincerely
[*]
<PAGE> 8
[*]
- --------------------------------------------------------------------------------
Exhibit B
ACKNOWLEDGEMENT OF DEBT
The undersigned
the limited liability company Koninklijke Pakhoed N.V., established in
Rotterdam, hereafter known as "the borrower"
declares that it has received a loan
and accordingly owes the ING Bank N.V., established in Amsterdam, hereafter
known as "the bank," the sum of
f (in words: ) and that it is
obligated to:
1) Pay to the bank a fixed interest of ...% per year on the aforesaid
sum or the unredeemed portion thereof, becoming due semiannually on
the first of January and the first of July of each year, for the
first time on next ..., for the period elapsing from today on.
2) To redeem said amount at f. ... on ..., unless the duration of the
loan is extended.
3) Furthermore, this loan is subject to the conditions and provisions
reported in the agreement signed between the borrower and the bank
on ... to provide a credit facility of f. 100,000,000.00.
Thus signed in Rotterdam, on ...
the borrower:
Borrower's signature:)1
N.B.)1. Each signer for borrower should sign and print their name here:
Good for ... guilders with interest and expenses and to sign this statement.
<PAGE> 1
AGREEMENT ON STANDBY FACILITY
The undersigned:
I. [*] ;
II. KONINKLIJKE PAKHOED N.V.,
established in Rotterdam,
hereafter known as: the Borrower;
considering:
- - that [*] has offered to the Borrower in the letter
dated 28 September 1995 a Facility to replace the Credit Agreement
in the amount of f. 50,000,000.00, dated 28 and 29 August 1989,
which shall expire with the signing of this agreement;
- - that [*] and the Borrower wish to regulate the
conditions under which the Borrower can avail itself of the
Facility;
stipulate as follows:
ARTICLE 1 DEFINITIONS
In this agreement, the following terms shall have the meanings given below:
a. Start Date: date of general signing of this agreement.
b. Facility: standby facility up to a maximum amount of f.
100,000,000.00 (in words: one hundred million
guilders) or the countervalue thereof in
Eurocurrency, provided this Eurocurrency is
available on the interbank money markets.
c. Advance(s): amounts in guilders and/or Eurocurrency to be
loaned to Borrower by [*] under
the Facility, for periods of 1, 2, 3, 6, 9 or
12 months, in multiples of f. 5,000,000.00 (in
words: five million guilders) or the
countervalue thereof in Eurocurrency.
d. Loan(s): amounts in guilders and/or U.S. dollars to be loaned
to the Borrower by [*] under the
Facility with maturities of a minimum of two years,
in multiples of f. 10,000,000.00 (in words: ten
million guilders) or the countervalue thereof in U.S.
dollars.
e. AIBOR: (Amsterdam Interbank Offered Rates)
the interest rate such as is published by De
Nederlandsche Bank N.V. on the so-called Reuters
screen on or about 12:00 o'clock Amsterdam time
on the day of the borrowing for comparable
maturities.
f. LIBOR: (London Interbank Offered Rates)
the interest rate as is offered for comparable
maturities by banks to first-class banks in the
London interbank money market on or around 11:00
o'clock London time, two Work Days prior to the
day of borrowing.
g. End Date: 30 November 2004.
h. Work Day: a day on which the banking institutions in the
Netherlands are open and on which transactions occur
in the interbank market in Amsterdam and/or London
and/or any other place where transactions have to be
performed in fulfillment of obligations with respect
to this agreement.
ARTICLE 2 AVAILABILITY
1. The Borrower can avail itself of the Facility by borrowing Advances
and/or Loans - from the Start Date till the End Date, without
prejudice to the provisions of Article 12.
2. The Borrower is authorized - starting on 1 November 1996 - to
reduce the Facility in whole or in part, without having to pay any
damages or penalty - provided that no (further) use is made thereof
on the day of the desired accelerated reduction.
<PAGE> 2
ARTICLE 3 USE
1. The Borrower is authorized to borrow Advances and/or Loans under
the Facility, with the understanding that the total amount of
outstanding Advances and Loans can never be higher than the amount
of the Facility.
In determining the capacity still available under the Facility, the
guilder countervalue of the Eurocurrency borrowed under the
Facility is computed at the exchange rates of the Amsterdam
exchange market, which are based on the average exchange rates
(informational purposes) that are established each Work Day by De
Nederlandsche Bank N.V.
2. The Borrower shall notify [*] by telephone or telefax
of its intention to borrow Advances and/or Loans, no later than the
day of the borrowing at 12:00 o'clock as regards borrowing in
guilders and at least two Work Days prior to the day of borrowing
as regards borrowing in Eurocurrency, indicating the amount, the
desired maturity, and the desired Eurocurrency. [*] will send a
written confirmation to the Borrower as to the negotiations with
respect to Advances and/or Loans, including the principal, the
maturity, and the interest as established by [*].
3. If, on the desired day of borrowing of Advances and/or
Loans in Eurocurrency, [*] ascertains that, due to circumstances on
the interbank money market(s), the Eurocurrency desired by the
Borrower is not available, [*]'s obligation to provide the
Eurocurrency for the respective borrowing of Advances and/or Loans
is at an end. The Borrower is then entitled to borrow Advances
and/or Loans in another Eurocurrency, taking into account the
provisions of Paragraph 3.1.
4. The Advances and/or Loans borrowed under the Credit Agreement of
28/29 August 1989 as of the date of signing of this agreement are
considered to be assumed under this agreement, with the
understanding that the interest established for the Advances and/or
Loans remains in force until the end of the agreed maturity of
those Advances and/or Loans.
ARTICLE 4 COMMISSION
The Borrower shall owe, with respect to the Facility, a readiness commission of
[*] per year. This readiness commission shall be charged at the end of each
quarter on the daily portion of the Facility not borrowed, insofar as has not
been reduced per Article 2, Paragraph 2, and it shall be charged after sending a
notice against the account kept in the name of the Borrower on the books of
[*], for the first time on 31 December 1995. For the calculation
of this commission, the month is taken at the correct number of days and the
year is taken at 360 days.
ARTICLE 5 INTEREST
ADVANCES
1. a. The interest on Advances in guilders shall be equal to the
AIBOR rate, which interest is increased by a surcharge of
[*] per year.
b. The interest on Advances in Eurocurrency shall be equal to
the LIBOR rate, which interest is increased by a surcharge
of [*] per year.
c. If the AIBOR and/or LIBOR rate is not published on the day
of determining the interest, a different interest
indicator shall be established in mutual consideration,
which is increased by a surcharge of [*] per year.
2. The interest on the Advances borrowed is due on the agreed due date
of Advances.
3. In computing the interest on Advances, the prevailing practices for
currency shall be employed (guilders practice: exact [days in]
month/360 [days in] year).
4. If any interest due date is not a Work Day, the next following Work
Day shall qualify as due date, and with interest calculated for
that day (or days).
LOANS
1. The interest on Loans in guilders and/or U.S. dollars shall be
equal to the interest charged to [*] for similar
refinancing, plus a surcharge of [*] per year.
2. The interest on the Loan is due on the last day of the agreed fixed
interest period, but not less frequently than annually.
3. For the calculation of interest, the prevailing practices for
currency shall be employed (guilders practice: exact [days in]
month/360 [days in] year).
4. If any interest due date is not a Work Day, the next following Work
Day shall qualify as due date, and with interest calculated for
that day (or days).
ARTICLE 6 DISBURSEMENT
Disbursement of Advances and/or Loans shall occur by crediting a bank account to
be specified by the Borrower, using as the value date the date of arrival of the
Advances and/or Loans. This crediting forms the evidence of indebtedness.
<PAGE> 3
ARTICLE 7 REPAYMENT/REDEMPTION
1. The amount which the Borrower owes in principal, interest and
expenses to [*] by virtue of the extended Advances
and/or Loans must be paid (back) on the due date in a bank account
to be specified by [*].
2. Advances and/or Loans which are borrowed should be repaid in the
same currency as that in which they were borrowed.
3. The Advances and/or Loans borrowed under the Facility must be
repaid no later than the End Date.
ARTICLE 8 ACCELERATED REDEMPTION
1. Total or partial accelerated redemption of Advances is not
permitted.
2. Total or partial accelerated redemption of Loans is only possible
by adjustment of the cash value of the positive interest difference
between the established interest and the interest which [*] can
obtain for similar lending in the bank money/capital market for
the remaining term of the particular Loan.
ARTICLE 9 CHANGE IN CIRCUMSTANCES
If measures or regulations by the government and/or De Nederlandsche Bank N.V.
should lead to an effect which increases the cost price for the lending of
Advances and/or Loans, [*] shall inform the Borrower of this as
soon as possible and consult with the Borrower as to how the disadvantageous
consequences of this can be limited. The Borrower shall pay such extra costs
with respect to Advances and/or Loans which are issued after the date of
notification on the first demand of [*].
ARTICLE 10 OVERDUE INTEREST
If any amount is not paid by the Borrower in timely manner, the Borrower shall
owe an overdue interest of 1% per month, to be calculated on the respective
amount which the Borrower still has not paid, from the day when it becomes due
until the day of payment.
ARTICLE 11 ORDER OF PAYMENTS
All that which [*] shall receive from the Borrower with respect
to this Facility shall be used to reduce the amount owed by the Borrower by
virtue of this agreement, in the first place, the expenses incurred, next the
commission, followed by interest, and finally the principal.
ARTICLE 12 DEMANDABILITY
The outstanding Advances and/or Loans under the Facility can be immediately
demanded at all times, without prior notice or dunning, in the following cases:
a. if the Borrower fails to fulfill any obligation to [*]
by virtue of this agreement, or does not do so in timely or proper
manner, and the Borrower still does not fulfill such an obligation
within 14 days of [*] having made such a request of it;
b. if the Borrower requests suspension of payment, files for
bankruptcy, is declared bankrupt, or if its real property or any
significant portion thereof can be seized or if a writ of
sequestration is converted into a garnishment order;
c. if the Borrower ceases its operations or resolves on dissolution;
d. if the Borrower transfers its operations to a new or different
company or otherwise alienates them;
e. if the Borrower is in default of any payment obligation by virtue
of any monetary loan provided or to be provided by third parties,
any financing facility, or any long-term guarantee facility, each
with an original maturity of more than 12 months, in consequence of
which the respective monetary loan and/or facility is demanded to
be repaid in its entirety at an accelerated date, with the
understanding that [*] can only demand repayment
under this agreement if the aforesaid default of the Borrower is so
serious that the ability of the Borrower to satisfy its payment
obligations under this agreement with respect to [*]
is significantly jeopardized.
By long-term guarantee facility is meant in this connection a long-
term agreement between a bank and the Borrower, under which this
bank, at the terms as stipulated between the respective bank and
the Borrower, guarantees the Borrower's payment obligations with
respect to third parties.
<PAGE> 4
ARTICLE 13 FINANCIAL INFORMATION
The Borrower is obligated to send [*] each year a copy of its
(consolidated) annual accounts, after they have been drawn up.
ARTICLE 14 TAXES/EXPENSES
1. The Borrower shall pay all amounts which it owes to [*] by virtue
of the Facility to [*] without deduction and/or settlement, at the
offices of [*] or at such place as is indicated by [*].
2. All Dutch taxes which might be levied in future in the form of an
independent profit tax on the interest, not counting as taxes the
Dutch Income Taxes and/or Corporate Tax or any withholding of these
taxes, shall be charged to the Borrower.
3. All reasonably incurred expenses of collection when repayment of
the Facility is demanded shall be charged to the Borrower.
Collection expenses also include all outside expenses of legal
counsel, court costs, costs of experts and other costs of third
parties.
ARTICLE 15 INDEBTEDNESS
With respect to the indebtedness by virtue of this agreement, the books of
[*] shall qualify as full proof, unless the Borrower furnishes
counter-evidence.
ARTICLE 16 SECURITY
1. The Borrower promises to [*] that, during the term
of the Facility and until such time as the Advances and/or Loans
borrowed under the Facility have been redeemed:
a. on the consolidated balance sheet, a ratio between the
current assets and current liabilities, including
obligations maturing within one year by reason of long and
medium-term debt, shall always be maintained at a minimum
of 1:1;
b. on the consolidated balance sheet, a ratio between long
[term?] borrowed capital and shareholders' equity shall
never exceed 2.5:1.
By long borrowed capital is meant here the sum of:
- all debts of long and medium-long term, excluding the
obligations falling due within one year by reason of long
and medium-long debts, which should be listed among the
current liabilities;
- 100% of the provisions, minus the provision for exchange
differences and that portion of the provisions which is
listed among the shareholders' equity, as indicated below.
By shareholders' equity is meant here the sum of:
- share capital;
- share premium reserves;
- other free reserves, with the exception of a reserve
resulting from revaluation of fixed assets;
- 50% of the taxation provision.
The aforesaid ratios should always be read in agreement with and on
the basis of the balance sheet and profit and loss statement,
officially approved by the accountants, for the most recent fiscal
year, with the accompanying explanation, produced in accordance
with the statutory provisions regarding annual accounts.
2. The Borrower promises not to take out any mortgage on its real
property situated in the Netherlands without consent of [*] on
which approval [*] may impose conditions.
3. Wherever this article speaks of real property, real rights are also
understood thereby.
4. The Borrower promises that all companies in which it directly
possesses or will possess the majority of the voting capital, or in
which it, together with or by means of one or more companies,
whether or not directly associated with each other, in which it
possesses the majority of the voting capital, possess or shall
possess the majority of the voting capital, shall assume the same
obligations as mentioned under Item 2 and Item 3 of the present
article.
ARTICLE 17 NOTICES
<PAGE> 5
Notices and communications with respect to this agreement should, unless
otherwise expressly provided, be made in writing or by telefax at the following
addresses:
[*]
for the Borrower:
Koninklijke Pakhoed N.V.
Treasury Dept.
P. O. Box 863
3000 AW Rotterdam
Telefax: 010-4147956
ARTICLE 18 MISCELLANEOUS
1. With respect to this agreement [*] elects domicile
at the offices in Utrecht, at Croeselaan 18, and the Borrower at
the offices in Rotterdam, at Blaak 333.
2. Dutch law applies to this agreement and its execution.
3. Differences with respect to this agreement are resolved by the
competent Dutch magistrates.
4. The Borrower declares that the entering into this agreement does
not conflict with any other agreement entered into by it.
5. Unless otherwise expressly provided in this agreement, the offer
dated 28 September 1993, identification Rt/CV/2396/Pakhoed.145,
accepted by the Borrower with respect to the Facility, applies
wholly to this agreement.
Thus signed in duplicate at the respective locations on 30 November 1995
I. [*]
II. KONINKLIJKE PAKHOED N.V.
<PAGE> 1
[*]
- --------------------------------------------------------------------------------
CREDIT AGREEMENT
- --------------------------------------------------------------------------------
The undersigned:
1. The limited liability company Koninklijke Pakhoed N.V., established
in Rotterdam, hereafter known as: "borrower,"
and
2. [*]
considering:
- - that the bank is hereby offering borrower a revolving
multi-currency standby facility;
- - that the bank and borrower wish to regulate the conditions under
which borrower can avail itself of this facility;
stipulate to the following:
Article 1 Definitions
1.01 The following terms are defined as below in this agreement:
a. AIBOR: the interest percentage for interbank deposits of
comparable maturity in guilders, as ascertained by De
Nederlandsche Bank N.V. on the day of borrowing at 11:00
A.M.;
b. Eurocurrency: freely convertible U.S. Dollars, German
Marks, Pounds Sterling, Belgian Francs, French Francs,
Swiss Francs, Swedish Krone and Australian Dollars.
c. LIBOR: the interest percentage at which interbank
deposits in identical currency are offered for comparable
amounts and maturities by the banks to first-class banks
in the London Interbank Market at 11:00 A.M. (London
time), two work days prior to the borrowing day;
d. Limit: the maximum amount of the facility, expressed in
Dutch guilders, which may be (still) issued at any time,
taking into account the provisions of Article 6;
e. Countervalue: the result of the outstanding amounts in
Eurocurrency, multiplied by the selling price as is
established by the bank for the sale of Eurocurrency in
return for Dutch guilders at 11:00 A.M.
f. Due Date(s): the date(s), by 12:00 A.M., on which
borrower must pay (back) any amount that it owes to the
bank by reason of this agreement.
g. Work Day: a day on which banks in Amsterdam, London, and
the place where any amount must be paid by virtue of this
agreement, are open for bank business.
Article 2 Amount
2.01 The bank shall provide to borrower as of the date of signing of
this agreement and up to 1 November 2002 a facility in the amount
of a maximum of f. 50,000,000.00 (in words: fifty hundred million
guilders) or the Countervalue thereof in Eurocurrency, under the
following conditions and provisions.
Article 3 Form
3.01 Borrower can avail itself of the facility by borrowing:
a. in the form of one or more short-term loans in Dutch
guilders, for periods of 1, 3, 6 or 12 months, in amounts
of f. 500,000.00 or a multiple thereof;
b. in the form of one or more short-term loans in
Eurocurrency, for periods of 1, 3, 6 or 12 months, in
amounts with a Countervalue of f. 500,000.00 or a multiple
thereof, rounded off to 100,000 in the particular
currency.
3.02 Borrower must select the maturities of short-term loans so that
they do not exceed the term of the facility.
<PAGE> 2
Article 4 Availability/Disbursement
4.01 The facility is only (still) available if borrower satisfies the
ratios and obligations to the bank as stipulated in Article 11 and
none of the events mentioned in Article 10 has occurred.
4.02 If borrower wishes to borrow one (or more) short-term loan(s) in
Dutch guilders, it shall inform the bank of this by telephone, no
later than 10:00 A.M. on the day of borrowing, indicating the
desired amount and the desired period, this communication being
binding on borrower on the day of the borrowing; the bank shall
notify the borrower as soon as possible on the day of borrowing
what the prevailing interest rate is for the desired borrowing in
accordance with Article 5. Borrowing in the form of short-term
loans in Dutch guilders can only be done within the Limit. The bank
shall immediately send a confirmation of each borrowing to the
borrower.
4.03 If borrower wishes to borrow one (or more) short-term loan(s) in
Eurocurrency, it shall inform the bank of this by telephone, no
later than two work days prior to the borrowing before 10:00 A.M.,
indicating the desired currency and period, this communication
being binding on borrower on the day of the borrowing; the bank
shall notify the borrower as soon as possible on the day of said
communication what the prevailing interest rate is for the desired
borrowing in accordance with Article 5. The bank shall include the
relevant data for this loan in a written confirmation. Borrowing in
the form of short-term loans in Eurocurrency can only be done
within the Limit and insofar as the bank has funds up to the
desired amounts and for the desired periods.
4.04 In event of borrowing in Eurocurrency, the bank is entitled to
withhold from borrower an amount which is considered necessary,
within reasonable bounds, to cover exchange rate risk. Likewise,
the bank shall compute the Countervalue on the first Work Day of
each calendar month. The amount thus computed is taken into
consideration when determining whether borrowing is still possible
within the Limit.
4.05 In the event that the Countervalue computed per Article 4.04,
together with the total of the amounts borrowed in Dutch guilders,
exceeds the Limit, borrower shall, at first demand of the bank,
remit the amount by which the maximum credit facility is exceeded
to a deposit account as indicated by the bank. In the latter case,
a credit interest shall be paid on the thus-remitted amounts at the
applicable market rates for borrowers. These amounts shall be paid
back on first demand of borrower as soon as and as long as it
appears that the exceeding of the maximum amount of the facility
has diminished on a subsequent accounting date.
4.06 The disbursement of the short-term loan(s) shall occur by crediting
a bank account, to be specified by borrower, using the starting
date of the particular loan as the value date.
Article 5 Interest and Commission(s)
5.01 Borrower shall pay the following debit interest rate on the amounts
in Dutch guilders borrowed during the term of this agreement:
a. for short-term loans, AIBOR on the date of the borrowing,
plus a surcharge of [*] per year; it is due on the last
day of the period for which the short-term loan is
borrowed and should be paid at the same time as the
repayment of the principal on the Due Date of the
short-term loan.
5.02 Borrower shall pay, on the amounts in Eurocurrency borrowed as
short-term loan(s) during the term of this agreement, a debit
interest rate equal to LIBOR, as ascertained two days prior to the
day of borrowing, plus a surcharge of [*] per year. This debit
interest rate is due on the last day of the period for which the
short-term loan is borrowed and should be paid along with the
repayment of the principal on the Due Date of the short-term loan,
in the same currency as the principal.
5.03 The interest for borrowing under this facility shall be computed on
the number of actual days elapsed, for Dutch guilders on the basis
of a year of 360 days and for Eurocurrency according to the market
practices applying to the particular currency.
5.04 Borrower shall owe, at three months from the date of signing of
this agreement, a readiness commission of [*] per year on the
portion of the facility not borrowed on a daily basis, to be paid
at the end of the respective period on 1 July, 1 October, 1 January
and 1 April of each year.
5.05 As of the date on which any reduction of this facility takes effect
as provided in Article 6, the readiness commission is no longer due
on the amount of that reduction.
Article 6 Term, Reduction and Accelerated Redemption
<PAGE> 3
6.01 The credit facility shall have a term until 1 November 2002, on
which date borrower shall have paid to the bank the amount still
owed by it by reason of this facility and this agreement, in a lump
sum.
6.02 From the date of signing, borrower has the right to reduce this
facility in whole or in part, provided it makes no (further) use
thereof on the date of the desired accelerated reduction.
6.03 Accelerated redemption of any amount borrowed as short-term loan is
not permitted, except in the instances mentioned by Article 10.
6.04 Reduction of this facility, insofar as it is not (yet) borrowed,
carries no penalty.
Article 7 (Re) Payment
7.01 Borrower shall make all payments which it owes by virtue of this
agreement to the bank on the Due Dates prior to 12:00 o'clock (by
giro), without any setting off of debt or any other limitation or
conditions of any kind. All Dutch taxes on the interest of this
facility as such, not being taxes which are designated in the
Netherlands as Income and/or Corporate Tax or as withholding tax,
shall be charged to the borrower.
7.02 In event of accelerated demand for repayment as provided in Article
10, all amounts owed to the bank shall be immediately paid off.
7.03 Without prejudice to the provisions of Article 10, borrower shall
repay to the bank each amount borrowed under this facility as a
loan on the Due Date of that particular loan.
7.04 If borrower wishes to again borrow a short-term loan or portions
thereof for a subsequent period, the repayment of that loan or the
particular portion thereof shall not in actuality occur and the
repayment and the renewed provision of funds shall be considered to
take place at the same time. In such instances, Article 4 applies
accordingly.
7.05 If any Due Date is not a Work Day, the next following Work Day
shall qualify as Due Date, unless the next following Work Day falls
in a new calendar month, in which case the Work Day preceding the
respective Due Date shall qualify as the Due Date.
7.06 Each payment shall be used, in the first place, to satisfy any
expenses, then to pay for commissions and interest, and finally to
redeem the principal.
Article 8 Nontimely Payments
8.01 In event of nontimely payment by borrower of any amount owed to the
bank by it in virtue or in consequence of the present agreement,
borrower shall be assessed a penalty interest of 1% per month on
the amount paid late for the time during which this remains unpaid;
for the outstanding amount, this penalty interest takes the place
of the interest applying to the particular loan in Article 5; it is
calculated up to the day of payment, portions of a month also being
computed according to the number of days actually elapsed on the
basis of a month of 30 days, and it should be paid at the same time
as the payment of the last paid amount.
Article 9 Expenses, Proof of Indebtedness
9.01 All expenses which are reasonably connected with collection of the
amount owed by virtue of this credit facility in court or out of
court, and/or incurred by the bank in maintaining and exercising
its rights, shall be charged to borrower.
9.02 Except for counter-evidence to be furnished by borrower, an extract
from the books produced and signed by the bank shall qualify as
full proof of the amounts owed by borrower by reason or virtue of
this agreement, and also insofar as the magnitude and reason
thereof are concerned.
Article 10 Accelerated Demand for Repayment
10.01 All amounts borrowed under this facility with the interest and
whatever else the borrower owes the bank by reason of this
agreement can be demanded immediately and in its entirely by the
bank, without any summons or notice being required:
a. if borrower fails to fulfill any obligation to the bank by
virtue of this agreement, or does not do so in timely or
proper manner, and borrower still does not fulfill such an
obligation within fourteen days of the bank's having made
such a request of it;
<PAGE> 4
b. if borrower requests suspension of payment, files for
bankruptcy, is declared bankrupt, or if its real property
or any significant portion thereof can be seized or if a
writ of sequestration is converted into a garnishment
order;
c. if borrower ceases its operations or resolves on
dissolution;
d. if borrower transfers its operations to a new or different
company or otherwise alienates them;
e. if borrower is in default of any payment obligation by
virtue of any monetary loan provided or to be provided by
third parties, any financing facility, or any long-term
guarantee facility, each with an original maturity of more
than twelve months, in consequence of which the respective
monetary loan and/or facility is demanded to be repaid in
its entirety at an accelerated date, with the
understanding that the bank can only demand repayment
under this agreement if the aforesaid default of borrower
is so serious that the ability of borrower to satisfy its
payment obligations under this agreement with respect to
the bank is significantly jeopardized.
By long-term guarantee facility is meant in this connection a
long-term agreement between a bank and borrower, under which this
bank, at the terms as stipulated between the respective bank and
borrower, guarantees borrower's payment obligations with respect to
third parties.
10.02 Borrower is obligated to notify the bank immediately of the
occurrence of the aforesaid circumstances.
Article 11 Ratios/Negative Pledge
11.01 Borrower promises to ensure that, during the term of this facility
a. on the consolidated balance sheet, a ratio between the
current assets and current liabilities, including
obligations maturing within one year by reason of long and
medium-term debt, shall always be maintained at a minimum
of 1:1;
b. on the consolidated balance sheet, a ratio between long
[term?] borrowed capital and shareholders' equity shall
never exceed 2.5:1.
By long borrowed capital is meant here the sum of:
1. all debts of long and medium-long term, excluding the
obligations falling due within one year by reason of long
and medium-long debts, which should be listed among the
current liabilities;
2. one hundred percent (100%) of the provisions, minus the
provision for exchange differences and that portion of the
provisions which is listed among the shareholders' equity,
as indicated below.
By shareholders' equity is meant here the sum of:
- share capital;
- share premium reserves;
- other free reserves, with the exception of a reserve
resulting from revaluation of fixed assets;
- 50% of the taxation provision.
The aforesaid ratios should always be read in agreement
with and on the basis of the balance sheet and profit and
loss statement, officially approved by the accountants,
for the most recent fiscal year, with the accompanying
explanation, produced in accordance with the statutory
provisions regarding annual accounts.
11.02 Borrower promises not to take out any mortgage on its real property
situated in the Netherlands without consent of the bank, on which
approval the Bank may impose conditions.
11.03 Wherever this article speaks of real property, real rights are also
understood thereby.
11.04 Borrower promises that all companies in which it directly possesses
or will possess the majority of the voting capital, or in which it,
together with or by means of one or more companies, whether or not
directly associated with each other, in which it possesses the
majority of the voting capital, possess or shall possess the
majority of the voting capital, shall assume the same obligations
as mentioned under Item 11.02 and Item 11.03 above.
Article 12 Figures and Other Information
<PAGE> 5
12.01 Borrower is obligated to send to the bank each year, within six
months of the closing out of the accounting year, its consolidated
annual accounts approved by outside accountant. Furthermore,
borrower, if it has borrowed any money under this credit facility,
is obligated to furnish the bank the explanations which the bank
may reasonably request of it, upon its demand.
Article 13 Banking Transactions
13.01 The bank has the "right of first refusal" as regards swap
transactions with respect to this facility.
Article 14 General Conditions
14.01 The General Conditions dated 11 November 1987, shall apply to this
agreement, as have been filed by the Dutch Banking Association with
the clerk of the District Courts of Amsterdam and Rotterdam, except
for Articles 18, 19, 20, 21, and 33.
Article 15 Notices
15.01 All notices and communications with respect to this agreement
should be done in writing, per telex or telefax, unless otherwise
expressly determined, and should be sent to:
for the bank, to the address [*]
or telefax [*]
attention
for the borrower, to the address: [*]
or telefax [*]
attention
Thus signed in duplicate at Rotterdam on 16 October 1995.
[*]
Koninklijke Pakhoed N.V.
Mr. N. J. Westdijk
<PAGE> 1
REVOLVING CREDIT FACILITY AGREEMENT
For
NLG 50,000,000
DATED MAY 20, 1996
Between
KONINKLIJKE PAKHOED N.V.
As Borrower
and
[*]
<PAGE> 2
2
THIS REVOLVING CREDIT FACILITY ("THE FACILITY AGREEMENT") is made on the 20th
day of May 1996 ------
-----
BETWEEN
1/ KONINKLIJKE PAKHOED N.V., a company incorporated in The Netherlands and
whose principal office is at Blaak 333, 3011 GB Rotterdam ("the Borrower"),
and
2/ [*]
IT IS HEREBY AGREED as follows:
1. FACILITY & AMOUNT
Subject to the terms and conditions of this Facility Agreement the Bank is
putting at the disposal of the Borrower a Revolving Credit Facility ("the
Facility") for an amount not exceeding
NLG 50,000,000 (fifty million euro-Dutch Guilders),
or its NLG equivalent for outstanding principal amounts in other freely
available Eurocurrencies.
The Bank has the right to demand, at any drawdown or renewal date, from the
Borrower partial repayment of principal if and as far as outstanding
principal amounts under the Facility when converted back into NLG (the
Facility's reference currency), using the Bank's prevailing market spot
forex rates for that purpose, would exceed the amount of the Facility with
such partial repayment being equal to the amount of such excess.
The Facility shall be utilised by the Borrower for its general corporate
purposes.
Amounts drawn hereunder may be repaid and redrawn during the life of the
Facility Agreement.
2. CONDITIONS PRECEDENT
The obligations of the Bank hereunder to make the Facility available to the
Borrower is also subject to the condition that the Bank shall have
received, in form and substance acceptable to it, the following documents:
- a copy of the statutes and articles of incorporation of the Borrower;
- a list of authorised signatories of the Borrower and their respective
specimen signatures.
<PAGE> 3
3
3. DRAWDOWN AND DRAWING RENEWALS
Notices of drawings shall be given to the Bank verbally by an
authorised officer of the Borrower no later than 10:00 am Brussels time
two Business Days prior to the intended drawdown or renewal date. Once
given, notices of drawings are irrevocable. Drawings must be confirmed
in writing or by telefax by an authorised signatory of the Borrower as
soon as possible but no later than the end of the Business Day
following the date of the notice of drawing.
4. TERMS OF DRAWINGS AND SUBSEQUENT RENEWALS (ROLLOVERS) THEREOF
4.a. AMOUNTS
Minimum amounts of individual drawings shall be NLG 1,000,000 or the
equivalent thereof and shall be in integral multiples of NLG 1,000,000
or the equivalent thereof. Drawings and subsequent renewals thereof
shall be subject always to aggregate outstanding principal amounts
never exceeding the amount of the Facility.
4.b. INTEREST RATE
The Borrower shall pay interest on the outstanding principal amounts of
the Facility, in the same currency as the currency of the respective
drawings or renewals thereof, at a rate per annum equal to the
aggregate of the applicable Libor (London Interbank Offered Rate) or
Bibor (Brussels Interbank Offered Rate) for the Interest Period
concerned plus the margin.
----
4.c. MARGIN
shall be [*] p.a. [* percent per annum]
4.d. APPLICABLE LIBOR/BIBOR OR ALTERNATIVE RATE
i) for euro-NLG or other euro-currency drawings or renewals thereof
the applicable rate shall be euro-NLG resp. the relevant
euro-currency Libor for the Interest Period concerned as quoted on
the relevant pages of Reuters for the relevant euro currency and
Interest Period at 11:00 a.m. London time 2 business days before
the relevant drawing or drawing renewal date;
ii) for BEF drawings or renewals thereof the applicable rate shall be
BEF Bibor for the Interest Period concerned as quoted on the page
"BELO" of Reuters at 11:00 a.m. Brussels time 2 business days
before the relevant drawing renewal date;
iii) if the relevant pages were not to provide an applicable Libor resp.
Bibor quotation, the Bank shall conclusively provide such quotation
itself as best reflecting the then prevailing market conditions;
<PAGE> 4
4
iv) if the duration of an Interest Period selected by the Borrower
hereunder does not correspond to the standard interest period
duration on which a relevant quotation is based then the Bank
shall have the right to adjust the applicable Libor resp. Bibor
for such discrepancy.
4.e. INTEREST PERIODS
Subject as provided below, each period in respect of which interest is
payable shall be of 1, 2, 3, 6 or 12 months duration as the Borrower
may select. If the Borrower fails to select an Interest Period in
accordance with the above, or at all, such Interest Period shall be
for a duration of 1 month (and the related outstanding principal shall
be in the currency it was outstanding in for the previous Interest
Period). The first Interest Period(s) shall commence on the drawdown
date; each subsequent Interest Period shall commence on the expiry
date of the preceding Interest Period relative thereto.
4.f. INTEREST DUE DATES AND INTEREST COMPUTATION METHOD
i) Interest shall be payable by the Borrower in arrears on the last
day of each Interest Period.
ii) Interest shall accrue from day to day and be computed on the
basis of a year of 360 days and for the actual number of days
elapsed.
4.g. OVERDUE INTEREST
In the event that the Borrower fails to pay any sum owing on any due
date hereunder the Bank shall be entitled to charge interest on such
sum at the rate of the aggregate of (a) the Bank's cost of funding, as
conclusively determined by the Bank, such sum until it is paid, plus
(b) the Margin plus (c) 1.5% p.a. The Bank may select such Interest
Periods for such unpaid sum (and hitherto such interest compounding
periods) as it deems appropriate in the circumstances.
5. EXPIRY DATE
The Bank's commitment hereunder shall terminate on December 31, 2002
and any amounts then outstanding shall be fully and finally repaid by
the Borrower on that date in any event together with interest, fees and
any other sums then owing under this Facility Agreement.
<PAGE> 5
6. PREPAYMENT
The Borrower may prepay any sums due hereunder (together with interest
on that sum accrued to the date of prepayment) provided the Bank
receives at least 7 Business Days advance notice in writing of such
intention to prepay, the prepayment amount and the prepayment date (and
provided always that the Borrower pays to the Bank the cost incurred by
the Bank in breaking its matching funding arrangements, such cost to be
conclusively -- save manifest error -- determined by the Bank).
7. CANCELLATION OF UNDRAWN AMOUNTS
At the option of the Borrower and exercisable by written notice to the
Bank, the undrawn amount of the Facility, or any part thereof, may be
cancelled without any penalty -- commencing as from the date falling 1
year after the signing date of this Facility Agreement -- upon the
giving of 30 days advance notice.
8. BUSINESS DAY
Means a day on which commercial banks are open for business in the
Brussels and London Interbank markets and in the principal financial
centre of the currency in which a relevant drawing is to be denominated.
If any day on which a payment is otherwise due hereunder is not a
business day such payment shall be made on the next succeeding Business
Day (unless that day would thereby fall in the next calendar month in
which case payment shall be made on the preceding business day).
9. FEES AND EXPENSES
9.a COMMITMENT FEE
A commitment fee of [*], calculated on the daily undrawn portion of
the Facility commencing from the signing date of this Facility
Agreement, is payable by the Borrower in NLG in arrears on the last
business day of each calendar quarter and on the date of termination of
the Facility Agreement (including the Expiry Date). Computation basis
will be a year of 360 days for the actual number of days elapsed;
9.b. OTHER EXPENSES
The Borrower will fully indemnify the Bank on its first demand for any
reasonable out of pocket expenses or costs of whatever nature and
wherever or however incurred by the Bank in the protection, preservation
or enforcement of any of its rights or revenues hereunder and/or in the
recovering of any amounts due hereunder including legal, funding
breakage, and other ad hoc expenses.
<PAGE> 6
6
10. PAYMENTS
10.a. Except as otherwise provided herein any payment to be made by the
Borrower under this Facility Agreement shall be made in the currency in
which it is contractually due, in immediately available funds during
normal banking hours on the due date. If payment is nevertheless made in
a different currency than the due currency, then the Borrower shall
fully compensate the Bank for foreign exchange costs incurred for
converting such currency into the due currency, and immediately pay to
the Bank any resulting shortfall against the contractual due amount.
10.b. All payments to be made by the Borrower shall be made to and in favour
of the Bank at such accounts and before such hours as the Bank shall
notify to the Borrower from time to time;
10.c. All payments by the Borrower hereunder shall be made in full without
set-off, counterclaim, withholding or any other deduction whatsoever
(other than taxes on the overall income of the Bank). If the Borrower is
compelled by law to make a deduction or withholding from any amount
payable to the Bank then the Borrower will immediately pay such
additional amounts (other than taxes on the overall income of the Bank)
as will result in the Bank receiving the full amount it would have
received had no such deduction or withholding been made. In such
circumstances, the Borrower will immediately provide the Bank with a
certificate of the amount deducted and generally provide the Bank with
satisfactory evidence of the receipt of the payment of such deduction by
the relevant authority.
11. CHANGE IN CIRCUMSTANCES
The Borrower will on first demand pay to the Bank such amounts as the
Bank may from time to time certify as necessary to compensate it for any
additional cost or reduction of return in connection herewith arising as
a result of compliance with any future law, regulation, treaty or
official directive or request (whether or not having the force of law)
including, without limitation, those relating to capital adequacy,
liquidity, reserve and special deposit requirements, funds and taxes
(other than taxes on the overall net income of the Bank) and any rule or
request of an organisation whose rules are binding on the Bank. The Bank
shall immediately upon it becoming aware of such costs or reduction,
notify the Borrower in writing thereof and, upon the introduction
thereof, supply calculations of such cost or reduction in reasonable
detail.
In the event that the Bank elects to demand such compensation for
increased cost from the Borrower, the Borrower will have the right to
prepay all outstandings under the Facility, together with any interest
and any other amounts due to the Bank, upon the giving of 2 (two)
business days' written advance notice and provided that the Borrower
compensates the Bank for any intermediate so increased cost through the
date of such prepayment. Upon such prepayment, this Facility Agreement
shall be terminated.
<PAGE> 7
7
12. REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants ("staat ervoor in") to the Bank that:
12.a. the execution and performance of this Facility Agreement are within its
authority, have been and are duly authorised by all necessary corporate
action, do not contravene any provision of law, the Borrower's Articles
of Association or any agreement binding on it and create and constitute
valid and enforceable obligations. The Borrower also certifies that the
person(s) signing this Facility Agreement for and on its behalf is (are)
duly empowered and has (have) proper signing authority(ies) to do so;
12.b. it has full power and authority to own its assets and to carry on its
business as it is now being conducted;
12.c. it has all consents and licenses which may be necessary for it to enter
into this Facility Agreement and to meet its obligations hereunder;
12.d. it is not in default or likely to be in default under any agreement or
instrument binding upon it or on any of its assets or revenues, which is
material in the context of this Facility Agreement;
12.e. no litigation, arbitration or administrative proceeding is taking place,
pending of, to its knowledge, threatened against it or any of its assets
or revenues, which is material in the context of this Facility
Agreement;
12.f. neither the Borrower, nor any of its assets or revenues, is entitled to
immunity from any legal action or proceeding.
The representations and warranties under Clauses 12.a, 12.b, 12.c and 12.f
above shall be deemed to be repeated by the Borrower on and as of the dates of
each drawdown and of each drawing renewal notice hereunder, as if made with
reference to the facts and circumstances existing at such dates.
13. UNDERTAKINGS
The Borrower will:
13.a. notify the Bank immediately of the occurrence of any event of default
as per Clause 15 hereof;
13.b. supply the Bank with its audited consolidated Profit & Loss Account and
Balance Sheet within 180 days of the accounts date or as soon as they
are published whichever is earlier. The Borrower will also provide the
Bank with semi-annual figures as soon as these are available, and will
provide the Bank with such other information concerning the Borrower's
business as the Bank may reasonably request from time to time;
<PAGE> 8
8
13.c not create any mortgage upon its real estate and other immovable
property rights ("onroerende zaken en beperkle zakelijke rechten op
onroerende zaken") in the Netherlands without the consent of the Bank,
which consent may be given subject to the fulfilment of certain
conditions.
The Borrower covenants that the same condition as mentioned under Clause 13.c
above shall apply to all the companies in which the Borrower owns or will own
the majority of the voting rights either directly or through or together with
one or more companies in which the Borrower owns or controls as ultimate owner
the majority of the voting rights.
14. FINANCIAL COVENANTS
The Borrower covenants that during the lifetime of this Facility Agreement it
will:
a. maintain in its consolidated balance sheet the ratio between the current
assets ('vlottende activa') and current liabilities ('vlottende
passiva'), including the current portion of long term debts, at no less
than one to one (1:1);
b. not exceed in its consolidated balance sheet a ratio between long term
liabilities and shareholder's equity of two and one half to one (2.5:1).
Long term liabilities as used in this Clause 14.b mean the aggregate of:
- - all long term debts but excluding the current portion of long term
debts which latter will be included in the current liabilities;
- - one hundred percent (100%) of the provisions minus the provision for
exchange differences and minus that part of the provisions which is
included in the shareholders' equity as mentioned below.
Shareholders' equity as used in this Clause 14.b means the aggregate of:
- - capital paid up and called
- - share premium reserve
- - other reserves, other than legal reserves and excluding a reserve as
a consequence of revaluation of fixed assets;
- - fifty percent (50%) of the provisions for deferred taxes.
The above ratios are to be interpreted at any time in accordance with and on
the basis of the consolidated balance sheet and consolidated profit and loss
account as approved by external auditors of the Borrower over the most recent
financial year with the notes thereto, composed in compliance with the Dutch
legal requirements for financial statements.
<PAGE> 9
9
15. EVENTS OF DEFAULT
In any of the following events shall have occurred and, where a grace period has
been mentioned, has not been remedied within the stated grace period, such event
shall constitute an Event of Default and the Bank may, as long as such Event of
Default is continuing, by written notice to the Borrower effective upon receipt
thereof by the Borrower, declare the outstanding principal amounts plus interest
accrued thereon upto the date of payment and any other amounts payable under
this Facility Agreement to be immediately due and payable, whereupon the same
shall become immediately due and payable and the Bank's obligations hereunder
shall immediately terminate:
a. if the Borrower is in default in the due performance of any obligation
under this Facility Agreement and such default is not remedied within 14
days after receipt by the Borrower of written notification thereto given
by the Bank;
b. if the Borrower applies for general suspension of payments, applies for
bankruptcy, is adjudicated bankrupt or if an executory attachment
("executoriaal beslag") is made on its real estate or on a substantial
part thereof or if a conservatory attachment ("conservatoir beslag")
thereon will have become enforceable;
c. if the Borrower ceases to carry on its business or decides to winding
up, liquidation or dissolution procedures for its company;
d. if the Borrower transfers its business to a new or other company or
disposes of its business in any other manner;
e. if any indebtedness in respect of borrowed moneys of the Borrower or any
long term guarantee facility is accelerated as a consequence of an event
of default under the terms thereof, it being understood however that the
Bank is only entitled to declare an Event of Default under this Facility
Agreement in the event such default of the Borrower as meant hereabove
materially affects its capability to perform its payment obligations
under this Facility Agreement towards the Bank.
Borrowed moneys as used in this Clause 15.e mean any loan or
indebtedness for borrowed money other than this Facility having an
original maturity of more than 12 months and long term guarantee
facility means an agreement with an original term of more than 12 months
between a bank and the Borrower pursuant to which the bank subject to
the terms agreed between such bank and the Borrower guarantees payment
obligations of the Borrower towards third parties.
16. WAIVERS, REMEDIES CUMULATIVE
No failure or delay by either party hereto in exercising any of its
rights or powers under this Facility Agreement shall operate as waiver
thereof. The rights and remedies of the Bank under this Facility
Agreement are cumulative and not exhaustive of each other or of any
rights or remedies provided by law.
<PAGE> 10
10
17. SEVERABILITY OF PROVISIONS
If any provision of this Facility Agreement is or becomes invalid, this
shall not affect the validity of any other provision of this Facility
Agreement.
18. ASSIGNMENT AND TRANSFER
The Bank may, subject to the consent of the Borrower which will not be
unreasonably withheld, assign or transfer all or any part of its rights
and obligations to reputable banks or financial institutions with a
maximum number of three (including the Bank). All costs, expenses, fees
and other charges are for the account of the banks involved and there
will be no additional tax consequences for the Borrower.
19. "GENERAL CONDITIONS"
Unless explicitly provided otherwise herein, this Facility Agreement
shall be governed also by the General Conditions as filed on December
22, 1995, by the Dutch Bankers Association at the Registrars' Office of
the District Courts of Amsterdam and Rotterdam, with the exception of
its Articles 18, 19, 20, 21, and 33.
20. GOVERNING LAW AND JURISDICTION
This Facility Agreement shall be governed by and construed in accordance
with Dutch Law and the courts of Rotterdam, or at the option of the
Borrower, the courts of Brussels will be competent. The Bank will
however be free to initiate and hold proceedings before any other court
it deems appropriate for protecting its rights and claims hereunder. In
the latter regard, the Borrower waives to the fullest extent permitted
by law any immunity it or any of its assets or revenues may have now or
in the future in connection with any legal proceedings in relation to
this Facility Agreement.
<PAGE> 11
11
21. NOTICES
Notices between the parties hereunder may be delivered by facsimile or
in writing (except where otherwise required as per any of the Clauses of
this Facility Agreement) as follows:
if to the Borrower: KONINKLIJKE PAKHOED N.V.
P.O. Box 863
3000 AW Rotterdam (The Netherlands)
Attention: Treasury Department
Telephone: +31 10 400 26 09
Facsimile: + 31 10 414 79 56
if to the Bank: [*]
IN WITNESS WHEREOF the parties hereto have duly executed this Facility
Agreement in 2 originals on the day, month and year first above written, each
party declaring having received one original.
FOR AND ON BEHALF OF:
The Borrower, [*]
KONINKLIJKE PAKHOED N.V.,
By: /s/ N.J. Westdijk
--------------------------- ---------------------------
<PAGE> 1
NLG 100,000,000 -- STANDBY BRIDGING FACILITY
AGREEMENT
BETWEEN
KONINKLIJKE PAKHOED N.V.
AND
[*]
<TABLE>
<CAPTION>
Article Page
- ------- ----
<S> <C>
1. Definitions 2
2. Conditions for Acceptance 3
3. Acceptance 3
4. Special Market Circumstances 4
5. Interest and Reimbursements/Repayment of Advance 5
6. Maturity and Reduction of Facility 6
7. Conversion 6
8. Balance Sheet Ratios/Negative Statement 7
9. Payments 8
10. Increased Expenses 8
11. Expenses 9
12. Accounting for Payments 9
13. Transfer 9
14. Exercising of Rights 9
15. Annual Accounting/information 9
16. Proof of Claim 10
17. Accelerated Demand 10
18. Notices 11
19. Differences 11
</TABLE>
<PAGE> 2
STANDBY BRIDGING FACILITY AGREEMENT
The undersigned:
1. The limited company KONINKLIJKE PAKHOED N.V., established in Rotterdam,
hereafter known as: "Borrower",
and
2. [*]
HAVING TAKEN INTO CONSIDERATION:
- - that the Bank has offered Borrower a standby bridging facility up to a
maximum amount of NLG 100,000,000.00 (one hundred million guilders)
with conversion options, and Borrower has accepted this offer;
- - that the parties now wish to set forth the conditions of the aforesaid
facility;
STIPULATE AS FOLLOWS:
Article 1
DEFINITIONS
In this agreement, the terms mentioned hereafter shall have the meanings given
below.
AIBOR: (Amsterdam Interbank Offered Rate) the interest
percentage on an annual basis for one, three, six and
twelve-month interbank money deposits, which are
published daily by De Nederlandsche Bank N.V. at
approximately 12:00 A.M. (Dutch time). The rates are
an average of the prices (so-called selling prices)
at which a number of leading banks (established in
the Netherlands) are willing to provide each other
deposits at the time of measurement (around 12:00
o'clock) for the respective period of time;
Basis Guilder Amount: with respect to an Advance issued in a currency of
choice, the amount in guilders which was used in
calculating the countervalue upon acceptance of that
Advance;
<PAGE> 3
Start Date: the date of signing of this agreement;
Facility: a standby credit facility on roll-over basis up to a
maximum amount of NLG 100,000,000.00 (one hundred
million guilders), which facility the Bank has made
available to Borrower under the terms and
stipulations of this agreement;
Currencies of Choice: the foreign currency (or currencies) which are freely
convertible into guilders and which according to the
Bank are current in the interbank Eurodeposit market,
in which Borrower may accept Advances in accordance
with the stipulations of this agreement;
Loan Amount: the sum of the Advances which Borrower has accepted
at any time in guilders or in one or more Currencies
of Choice under the Facility, with the understanding
that the Basis Guilder Amount applies to the latter;
LIBOR: the interest percentage on an annual basis at which,
according to the Bank deposits in the respective
Currency of Choice, comparable to the respective
Advance as regards amount and maturity, are offered
by banks to leading banks in the London interbank
money market at 11:00 P.M. (London time), two Work
Days prior to the start of the respective Advance;
Countervalue: the amount in the respective Currency of Choice,
converted from guilders, at the average rate of said
Currency of Choice with respect to the guilder as
officially quoted on the Amsterdam Exchange, or for a
Currency of Choice which is not officially quoted,
the market rate applicable to the Bank for purchase
of said Currency of Choice with guilders, three Work
Days prior to the start of the respective Advance;
Advance: a monetary sum of NLG 5,000,000.00 (five million
guilders) or a multiple thereof, or the Countervalue
thereof in a Currency of Choice, rounded off to units
of one million, which the Bank loans to the
<PAGE> 4
Borrower for one, three, six or twelve months, as the
Borrower chooses, under the Facility. An Advance with
a different maturity can only be accepted with
express consent of the Bank. This consent is
dependent on the circumstances in the interbank money
market of the respective currency (Currency of
Choice). The Bank's decision in this is binding on
Borrower;
Work Day: a day on which the banks in the Netherlands and, if a
Currency of Choice is involved, [those] in the United
Kingdom and in the country of the respective Currency
of Choice, are open to the public.
Article 2
CONDITIONS FOR ACCEPTANCE
Borrower can, with the advent of the Start Date, observing the conditions of
this agreement, request the Bank to make available one or more Advances under
the Facility on a Work Day, provided the following conditions are fulfilled:
(i) none of the events or circumstances provided in Article 17 arises;
(ii) the Bank from the Borrower its latest articles of association.
Article 3
ACCEPTANCE
a. If Borrower wishes to accept an Advance in guilders, it shall notify
the Bank thereof by telephone or telefax no later than 11:00 A.M. on
the day of acceptance of the particular Advance, during which Borrower
shall indicate the date of acceptance, the amount, and the maturity of
the Advance.
b. Borrower can request the Bank to make available one or more Advances in
a Currency of Choice under the Facility, observing a deadline of three
Work Days. The request shall contain the date of acceptance, the
amount, the maturity and the Currency of Choice of the desired Advance.
c. If Borrower has notified the Bank by telephone, the Bank has the right
to demand a written confirmation from Borrower before making available
an Advance.
d. The Bank shall provide each advance loaned to an account or accounts at
the Bank opened in the name of Borrower.
<PAGE> 5
e. In the choice of the Advances, Borrower shall pay attention to the
reduction of the Facility, the corresponding repayments per Article 6,
and the conversions per Article 7.
Article 4
SPECIAL MARKET CIRCUMSTANCES
a. If the Bank prior to acceptance of an Advance in guilders ascertains
that, by reason of circumstances which affect the interbank money
market of Amsterdam, the interest on an Advance to be accepted cannot
be reasonably determined on the basis of AIBOR, the Bank shall
immediately inform Borrower of this.
b. Parties shall then take counsel as to a substitute interest for the
requested Advance. If this consultation has not led to agreement by
11:00 A.M. on the first day of the Advance, the Bank will then
determine the substitute interest for the Advance. Borrower will not
then be obligated to accept the Advance, provided it notifies Bank of
such without delay, but no later than 12:00 o'clock of the same day.
c. The substitute interest shall be based on the expenses of the Bank,
plus the margin mentioned in Article 5.a.1. If Borrower cannot agree to
the substitute interest, the obligation of the Bank to provide the
Advance requested by Borrower is suspended until the Bank informs
Borrower that it can reasonably establish the interest on the basis of
AIBOR.
d. In the situation mentioned in the paragraphs preceding this article,
the Bank makes no reservation with respect to the possibility of making
guilders available.
e. The Bank shall keep Borrower apprised of the developments of AIBOR and
immediately inform Borrower whenever the interest as provided in
Article 5.a.1 can be reasonably established on this basis.
f. If the Bank prior to acceptance of a Currency of Choice ascertains
that, by reason of circumstances which affect the interbank money
market of London, the interest on an Advance to be accepted cannot be
reasonably determined on the basis of LIBOR, the Bank shall immediately
inform Borrower of this.
g. Parties shall then take counsel as to a substitute basis on which the
Bank shall make available the requested Advance to Borrower. If this
consultation has not led to agreement by 11:00 o'clock one day before
the start of the Advance, the Bank shall determine the substitute basis
and Borrower shall have the right to refrain from accepting the Advance
and to request the Bank to provide the Advance in guilders. In the
latter case, the Bank shall provide the Advance to Borrower in
guilders, without prejudice to the provisions in Paragraphs a through e
of this Article 4.
<PAGE> 6
h. The Bank shall from time to time keep Borrower apprised of the
developments on the London interbank money market with respect to the
particular Currency of Choice and immediately notify it whenever the
interest can be reasonably established on the basis of LIBOR.
Article 5
INTEREST AND REIMBURSEMENTS/REPAYMENT OF ADVANCE
a. Borrower promises:
(i) to pay the Bank for each Advance accepted under the Facility
an interest on an annual basis that is equal to AIBOR (in the
case of guilders) or LIBOR (in the case of a Currency of
Choice), in both cases plus a margin of [*];
(ii) to pay the Bank, for the daily amount not accepted
under the Facility, from the Start Date, a readiness
commission of [*] on an annual basis, which commission
Borrower shall satisfy on the last day of each prior calendar
quarter, for the first time on 30 June 1996.
b. The computation of the interest and the commission shall be done on the
basis of the actual number of days and a year of 360 days, unless an
Advance is provided in Belgian Francs or British Pounds, in which case
a year of 365 days is used.
The determination of interest by the Bank shall be binding on Borrower,
unless error is proven. The Bank shall confirm the established interest
in writing to Borrower. The interest for each Advance is due at the
same time as the repayment of that Advance. In the case of an Advance
of longer than six months, the interest shall be computed after every
six months and be paid by Borrower.
c. Each Advance shall be repaid at the end of the maturity thereof. The
repayments are made in guilders or, insofar as concerns an Advance in a
Currency of Choice, in that Currency of Choice. But if, through
monetary circumstances which lie entirely outside the influence of
Borrower, Borrower cannot obtain the Currency of Choice in order to pay
back the Advance at the end of its maturity, Borrower shall immediately
inform the Bank of such. The parties shall then enter into consultation
to attempt to implement the repayment in different fashion. If parties
within five Work Days from the aforesaid communication of Borrower have
not reached an agreement as to the repayment, Borrower shall repay the
Advance in guilders on the following Work Day. The expenses and
currency loss which ensue to the Bank from invoking this clause shall
be charged to Borrower and shall be paid by Borrower at first demand of
the Bank.
<PAGE> 7
d. Repayment of an accepted Advance before the end of its maturity is not
permitted.
Article 6
MATURITY AND REDUCTION OF FACILITY
a. The amount of the facility shall be proportionately reduced, taking
into account the facilities provided by the Bank and other financial
institutions in this context to a total amount of NLG 300,000,000.00
from long-term refinancing, as anticipated by "equity (linked)
transactions", in lump sums of NLG 5,000,000.00 with a minimum of NLG
10,000,000.00, or in its entirety, or for the remainder by means of a
last total redemption on 15 July 1999. Thus, the facility shall be
ended on 15 July 1999.
b. Borrower is permitted at all times to reduce the Facility at an
accelerated rate with an amount of NLG 5,000,000.00 (five million
guilders) or a multiple thereof, provided no (further) use is made of
the desired accelerated reduction on the date thereof. Borrower shall
inform the Bank in writing of its intention to make a reduction, at
least ten days before an accelerated reduction. This communication is
irrevocable.
Article 7
CONVERSION
a. During the term of the Facility, but no later than 15 July 1998,
Borrower is entitled to request the Bank, observing a deadline of at
least ten Work Days, to entirely or partially convert the Facility into
one or more monetary loans in guilders for the remaining term of the
Facility at a fixed rate of interest ("Fixed Loan(s)"). If an Advance
is running, the conversion thereof may only occur on the day following
the last day of maturity of that Advance.
b. The request mentioned under Item a is made in writing to the Bank,
containing the desired date of conversion, the amount to be converted,
being at least NLG 10,000,000.00 (ten million guilders) or a multiple
thereof, and the desired interest period, as well the declaration by
Borrower that the conditions for acceptance as mentioned in Article 2
continue to be fulfilled. If these conditions are met, the Bank shall
then satisfy the request of Borrower.
c. The interest on the Fixed Loan shall be determined for an interest
period of one year or a multiple thereof, chosen by Borrower, up to the
maximum of the remaining maturity of the Facility. The Bank shall
determine the interest one to five Work Days prior to the date of
conversion, or the first day of a new interest period, at the cost
price to the Bank, plus a margin to be agreed upon between Bank and
Borrower at that moment. The interest is then computed on the basis of
a month of
<PAGE> 8
30 days and a year of 360 days and shall be payable at the end of six
months. After determination of the interest, the request mentioned
under Item a is irrevocable.
d. Borrower shall redeem the Fixed Loan(s) at semiannual terms or at
periods of time to be stipulated with the Bank, while the provisions of
Article 6.a shall apply accordingly.
e. Borrower shall have the option of early repayment of 5% (five percent)
of the original principal of a Fixed Loan per year, this being done
with no special reimbursement, provided this repayment is reported to
the Bank by Borrower one month in advance, in writing (including
telefax), and the day of payment coincides with an interest due date.
f. Larger accelerated redemptions than those mentioned under Item c are
only permitted to Borrower, with the same notification and on the same
date as Item e, if Borrower pays the Bank a reimbursement at the same
time as the accelerated repayment and the interest. The reimbursement
is determined by the difference between:
(i) the sum of the contractual interest installments in cash,
remaining as of the date of early repayment, on the amount to
be repaid early;
and
(ii) the sum of interest paid in cash which the Bank will be able
to use for monetary loans comparable to the accelerated
repayment in amount and maturity as of the date of early
repayment ("Actual Interest"),
with a minimum of 1% (one percent) of the amount being repaid early.
The conversion into cash shall occur at the Actual Interest, if the
contractual interest is lower than the Actual Interest the
reimbursement shall be equal to 1% (one percent) of the amount being
repaid early, except in the event that the contractual interest is more
than 1% (one percent) lower than the Actual Interest, in which case no
reimbursement is owed.
g. The other conditions of this agreement shall be applied accordingly to
the Fixed Loan(s), when possible.
Article 8
BALANCE SHEET RATIOS, NEGATIVE STATEMENT
a. Borrower promises to ensure that, during the term of the Facility:
(i) on the consolidated balance sheet, a ratio between the current
assets and current liabilities, including obligations maturing
within one year by reason of long and medium-term debt, shall
always be maintained at a
<PAGE> 9
minimum of one to one (1:1);
(ii) on the consolidated balance sheet, a ratio between long
[term?] borrowed capital and shareholders' equity shall never
exceed two point five to one (2.5:1).
By long borrowed capital is meant here the sum of:
- all debts of long and medium-long term, excluding the
obligations falling due within one year by reason of
long and medium-long debts, which should be listed
among the current liabilities;
- 100% (one hundred percent) of the provisions, minus
the provision for exchange differences and that
portion of the provisions which is listed among the
shareholders' equity, as indicated below.
By shareholders' equity is meant here the sum of:
- share capital;
- share premium reserves;
- other free reserves, with the exception of a reserve
resulting from revaluation of fixed assets;
- 50% (fifty percent) of the taxation provision.
The aforesaid ratios should always be read in agreement with and on the
basis of the balance sheet and profit and loss statement, officially
approved by the accountants, for the most recent fiscal year, with the
accompanying explanation, produced in accordance with the statutory
provisions regarding annual accounts.
b. Borrower promises not to take out any mortgage on its real property
situated in the Netherlands without consent of the Bank, on which
approval the Bank may impose conditions.
c. Wherever this article speaks of real property, real rights are also
understood thereby.
d. Borrower promises that all companies in which it directly possesses or
will possess the majority of the voting capital, or in which it,
together with or by means of one or more companies, whether or not
directly associated with each other, in which it possesses the majority
of the voting capital, possess or shall possess the majority of the
voting capital, shall assume the same obligations as mentioned under
Item b and Item c above.
Article 9
PAYMENTS
a. Borrower shall make payments of amounts which it shall owe by virtue of
this agreement without any deduction or compensation (including
deduction or reduction by virtue of any levy or
<PAGE> 10
taxation of any kind, but not including assessments for the Bank which
are designated by law as Dutch tax withheld on the corporate assessment
and levied on Borrower) and without cost to the Bank on the dates of
maturity, insofar as concerns payment in guilders, at the Bank's office
in Rotterdam, Coolsingel 119, in legal tender of the Netherlands as of
the date of payment, unless the Bank has notified Borrower of a
different payment address in the Netherlands in good time.
b. Payments in a Currency of Choice shall also be made without any
deduction or compensation (including deduction or reduction by virtue
of any levy or taxation of any kind, but not including assessments for
the Bank which are designated by law as Dutch tax withheld on the
corporate assessment and levied on Borrower) and without cost to the
Bank to the account of the Bank at its correspondent in the country of
the respective Currency of Choice, to be indicated to Borrower in
advance.
c. If the date of maturity of any payment does not fall on a Work Day, the
next work day shall qualify as the date of maturity, unless the next
Work Day falls in the next calendar month, in which case the date of
maturity is the immediately preceding Work Day, recalculating the
interest amount in both cases.
Article 10
INCREASED EXPENSES
If, by virtue of statutory provisions or measures, or a change in the
enforcement or interpretation thereof, including provisions or measures of De
Nederlandsche Bank N.V. or of any authority of a country of the Currency of
Choice in which any Advance has been provided:
a. the Bank with respect to the Loan amount and/or the interest under this
agreement is subject to a tax assessment other than an assessment on
profit or a Dutch withholding of the corporate taxation;
b. the Bank is obligated to maintain reserves or deposits with respect to
Advances loaned or to be loaned under this agreement, and/or if a
change occurs in the obligation;
c. the Bank is subjected to any other obligation with respect to this
agreement;
and thereby the expenses associated with the Advances in a Currency of Choice
loaned or to be loaned by virtue of this agreement are increased for the Bank:
1. the Bank shall inform Borrower of this as soon as possible, and consult
with Borrower as to the extent to which the harmful consequences
thereof can be limited, and
<PAGE> 11
2. Borrower shall pay the Bank, at its first request in this regard, as
much extra as is necessary to hold the Bank harmless from these extra
expenses, and
3. Borrower shall be entitled to make early repayment on the Loan Amount,
together with interests, and whatever other amount, wholly or
partially, is owed by Borrower in that Currency of Choice by reason of
this agreement, but in amounts of at least NLG 5,000,000.00 (five
million guilders) or the Countervalue thereof, provided it has given
written notice of its intention to the Bank within fourteen days of the
notification by the Bank per Item 1 above, without prejudice to
Borrower's obligation to compensate the Bank, at its request, for all
damages which the Bank shall suffer up to the end of the particular
Advance as a direct consequence of such an early repayment. Repayment
shall occur within fourteen days of Borrower's communication as
provided in this paragraph.
Article 11
EXPENSES
All expenses incurred by the Bank as a direct consequence of the fact that
Borrower does not fulfill any obligation which it has assumed by virtue of this
agreement, or does not do so in timely or proper manner, including all
reasonable expenses of lawyers and other outside experts, as well as processing
fees, assessed against whomever, but in direct connection with the rights of the
Bank against Borrower, shall be charged to Borrower and paid by Borrower at the
first demand of the Bank.
Article 12
ACCOUNTING FOR PAYMENTS
Whatever the Bank shall receive from Borrower by virtue of this agreement shall
be applied to diminish or to pay the debt of Borrower, first of all that
resulting from expenses incurred, then the readiness commission, then
reimbursements, then the interest, and lastly the principal.
Article 13
TRANSFER
a. Borrower promises not to withhold its approval from the Bank, except
for reasonable grounds, if the Bank wishes to transfer the rights and
obligations from this agreement in whole or in part to third parties
and also promises to acknowledge this transfer in writing. Any expenses
arising from an assignment and transfer shall be charged to the Bank.
b. The Bank promises not to withhold its approval from the Borrower,
except for reasonable grounds, if the Borrower wishes to transfer the
rights and obligations from this agreement in whole or in part to third
parties within its
<PAGE> 12
group and also promises to acknowledge this transfer in writing. Any
expenses arising from an assignment and transfer shall be charged to
the Borrower.
Article 14
EXERCISING OF RIGHTS
The exercising by the Bank of the rights resulting to it from this agreement,
the times at which and the order in which these shall be exercised, shall be the
choice of the Bank, without the nonexercising of any right being susceptible of
interpretation that the Bank has relinquished that right.
Article 15
ANNUAL ACCOUNTS/INFORMATION
Borrower shall hand over to the Bank each year, as soon as possible after they
are produced, but no later than six months after the end of the accounting year,
its consolidated annual accounts approved by an independent certified
accountant. Furthermore, Borrower shall provide to the Bank, at its first
demand, all other explanations which the Bank may reasonably request of
Borrower. In connection with article 6, Borrower shall keep the Bank
sufficiently and promptly apprized as to the refinancings undertaken by
Borrower.
Article 16
PROOF OF CLAIM
The bookkeeping of the Bank shall furnish complete proof of the amount of and
reason for all amounts owed by Borrower to the Bank by virtue of this agreement,
although Borrower may furnish counter-evidence.
In event of a difference as to any balance which is due and payable by Borrower
according to the books of the Bank, Borrower shall not be entitled to refuse or
delay the payment of that balance in whole or in part.
Article 17
ACCELERATED DEMAND
a. The Loan Amount, together with interest and all other amounts owed by
Borrower by reason of this agreement, are immediately demandable in
their entirety, without any summons, serving of notice, or other
formality being required:
1. if Borrower fails to fulfill any obligation to the Bank by
virtue of this agreement, or does not do so in timely or
proper manner, and Borrower still does not fulfill such an
obligation within fourteen days of the Bank's having made such
a request of it;
2. if Borrower requests suspension of payment, files for
<PAGE> 13
bankruptcy, is declared bankrupt, or if its real property or
any significant portion thereof can be seized or if a writ of
sequestration is converted into a garnishment order;
3. if Borrower ceases its operations or resolves on dissolution;
4. if Borrower transfers its operations to a new or different
company or otherwise alienates them;
5. if Borrower is in default of any payment obligation by virtue
of any monetary loan provided or to be provided by third
parties, any financing facility, or any long-term guarantee
facility, each with an original maturity of more than twelve
months, in consequence of which the respective monetary loan
and/or facility is demanded to be repaid in its entirety at an
accelerated date, with the understanding that the Bank can
only demand repayment under this agreement if the aforesaid
default of Borrower is so serious that the ability of Borrower
to satisfy its payment obligations under this agreement with
respect to the Bank is significantly jeopardized.
By long-term guarantee facility is meant in this connection a
long-term agreement between a bank and Borrower, under which
this bank, at the terms as stipulated between the respective
bank and Borrower, guarantees Borrower's payment obligations
with respect to third parties.
b. Borrower is obligated to inform the Bank immediately as to the
occurrence of one or more of the circumstances affecting Borrower as
mentioned above under Item a, Subitems 2, 3, 4 or 5.
The obligations of the Bank by virtue of this agreement shall end immediately
upon occurrence of one of the events mentioned above under Paragraph a.
If the Bank demands repayment, Borrower shall immediately owe the Bank a
reimbursement of 1-1/2% (one and a half percent) of the amount demanded by the
Bank, without prejudice to the Bank's right of complete reimbursement of damages
and expenses if these should amount to a higher sum.
Without prejudice to the provisions of the preceding paragraphs of this article,
Borrower in event of late payment of any amount owed by it by virtue of this
agreement is obligated to pay, on the amount paid late to the Bank during the
period from the due date until the date of payment, a reimbursement of 2-1/2%
(two and a half percent), annually, above a) the interbank selling price in
Amsterdam for call money, insofar as guilders are concerned, and b) the
"interbank overnight interest rate" in London for the respective Currency of
Choice, in both cases on each day of the tardy payment at 11:00 A.M. Amsterdam
or London time, respectively. As regards tardy payment of a redemption
installment, this
<PAGE> 14
reimbursement takes the place of the interest mentioned in Articles 5 and 7
after the maturity date.
Article 18
NOTIFICATIONS
Notifications and communications with respect to this agreement can only be
given in writing or by telefax, unless otherwise specified in this agreement,
and at the addresses reported below:
For Borrower: Koninklijke Pakhoed N.V.
Dept. Treasury
P. O. Box 863
3000 AW Rotterdam
Telefax: (010) 4147956
For the Bank: [*]
Address changes are only valid after written communication has been given
thereof to the other party.
Article 19
DIFFERENCES
a. Differences with respect to this agreement shall be submitted to the
competent magistrates of Amsterdam, unless otherwise provided.
b. The General Conditions of the Bank shall apply to this agreement,
unless otherwise expressly stipulated in this agreement, as have been
filed on 22 December 1995 with the clerk of the District Court of
Amsterdam, with the understanding that the Bank promises not to invoke
the Articles 18, 19, 20, 21 and 33 of the General Conditions.
c. Changes in this agreement, including the General Conditions mentioned
under Item b, are only valid if both parties have given their written
consent to them.
THUS DRAWN UP AND SIGNED IN DUPLICATE
at Rotterdam, on 4 June 1996
Koninklijke Pakhoed N.V. [*]
<PAGE> 1
AGREEMENT ON STANDBY FACILITY
The undersigned:
I. [*];
II. KONINKLIJKE PAKHOED N.V.,
established in Rotterdam,
hereafter known as: the Borrower;
considering:
- that [*] has offered to the Borrower a
Facility in the amount of f. 100,000,000.00 (in words:
one hundred million guilders);
- that [*] and the Borrower wish to regulate the
conditions under which the Borrower can avail itself of the
Facility;
stipulate as follows:
ARTICLE 1 DEFINITIONS
In this agreement, the following terms shall have the meanings given below:
a. Start Date: date of general signing of this agreement.
b. Facility: standby facility up to a maximum amount of f.
100,000,000.00 (in words: one hundred million
guilders) or the countervalue thereof in
Eurocurrency, provided this Eurocurrency is available
on the interbank money markets.
c. Advance(s): amounts in guilders and/or Eurocurrency to be loaned
to Borrower by [*] under the Facility,
for periods of 1, 2, 3, 6, 9 or 12 months, in
multiples of f. 5,000,000.00 (in words: five million
guilders) or the countervalue thereof in
Eurocurrency.
d. AIBOR: (Amsterdam Interbank Offered Rates) the interest rate
such as is published by De Nederlandsche Bank N.V. on
the so-called Reuters screen on or about 12:00
o'clock Amsterdam time on the day of the borrowing
for
<PAGE> 2
comparable maturities.
e. LIBOR: (London Interbank Offered Rates) the interest rate as
is offered for comparable maturities by banks to
first- class banks in the London interbank money
market on or around 11:00 o'clock London time, two
Work Days prior to the day of borrowing.
f. End Date: 15 July 1999.
g. Work Day: a day on which the banking institutions in the
Netherlands are open and on which transactions occur
in the interbank market in Amsterdam and/or London
and/or any other place where transactions have to be
performed in fulfillment of obligations with respect
to this agreement.
ARTICLE 2 AVAILABILITY
1. Taking into account the provisions of Art. 2.2, the Borrower can avail
itself of the Facility by borrowing Advances - from the Start Date till
the End Date, without prejudice to the provisions of Article 12.
2. The Borrower is authorized at all times to reduce the Facility in whole
or in part - without having to pay any damages or penalty - provided
that no (further) use is made thereof on the day of the desired
accelerated reduction. However, the Borrower is obligated to reduce the
Facility in its entirety or in proportion to the facilities made
available by other financial institutions in the total amount of f.
300,000,000.00 (in words: three hundred million guilders) from the
proceeds of issuance of new stock and/or from the proceeds of the sale
of Furness.
ARTICLE 3 USE
1. The Borrower is authorized to borrow Advances under the Facility, with
the understanding that the total amount of outstanding Advances can
never be higher than the amount of the Facility. In determining the
capacity still available under the Facility, the guilder countervalue
of the Eurocurrency borrowed under the Facility is computed at the
exchange rates of the Amsterdam exchange market, which are based on the
average exchange rates (informational purposes) that are established
each Work Day by De Nederlandsche Bank N.V.
2. The Borrower shall notify Rabobank Nederland by telephone or telefax of
its intention to borrow Advances, no later than the day of the
borrowing at 12:00 o'clock as regards borrowing in guilders and at
least two Work Days prior to the day of
<PAGE> 3
borrowing as regards borrowing in Eurocurrency, indicating the amount,
the desired maturity, and the desired Eurocurrency. Rabobank Nederland
will send a written confirmation to the Borrower as to the negotiations
with respect to Advances, including the principal, the maturity, and
the interest as established by Rabobank Nederland.
3. If, on the desired day of borrowing of Advances in Eurocurrency,
Rabobank Nederland ascertains that, due to circumstances on the
interbank money market(s), the Eurocurrency desired by the Borrower is
not available, Rabobank Nederland's obligation to provide the
Eurocurrency for the respective borrowing of Advances is at an end. The
Borrower is then entitled to borrow Advances in another Eurocurrency,
taking into account the provisions of Paragraph 3.1.
ARTICLE 4 COMMISSION
The Borrower shall owe, with respect to the Facility, a readiness commission of
[*] per year. This readiness commission shall be charged at the end of each
quarter on the daily portion of the Facility not borrowed, insofar as has not
been reduced per Article 2, Paragraph 2, and it shall be charged after sending a
notice against the account kept in the name of the Borrower on the books of
Rabobank Nederland, for the first time on 30 June 1996. For the calculation of
this commission, the month is taken at the correct number of days and the year
is taken at 360 days.
ARTICLE 5 INTEREST
1. a. The interest on Advances in guilders shall be equal to the
AIBOR rate, which interest is increased by a surcharge
of [*].
b. The interest on Advances in Eurocurrency shall be equal to the
LIBOR rate, which interest is increased by a surcharge of [*].
c. If the AIBOR and/or LIBOR rate is not published on the day of
determining the interest, a different interest indicator shall
be established in mutual consideration, which is increased by
a surcharge of [*].
2. The interest on the Advances borrowed is due on the agreed due date of
Advances.
3. In computing the interest on Advances, the prevailing practices for
currency shall be employed (guilders practice: exact [days in]
month/360 [days in] year).
4. If any interest due date is not a Work Day, the next following Work Day
shall qualify as due date, and with interest calculated for that day
(or days).
ARTICLE 6 DISBURSEMENT
Disbursement of Advances shall occur by crediting a bank account to be specified
by the Borrower, using as the value date the date of
<PAGE> 4
arrival of the Advances. This crediting forms the evidence of indebtedness.
ARTICLE 7 REPAYMENT/REDEMPTION
1. The amount which the Borrower owes in principal, interest and expenses
to Rabobank Nederland by virtue of the Advances extended must be paid
(back) on the due date in a bank account to be specified by Rabobank
Nederland.
2. Advances which are borrowed should be repaid in the same currency as
that in which they were borrowed.
3. The Advances borrowed under the Facility must be repaid no later than
the End Date.
ARTICLE 8 ACCELERATED REDEMPTION
Total or partial accelerated redemption of Advances is only permitted if this is
done from the proceeds of issuance of new stock and/or from the proceeds from
the sale of Furness, and under compensation of Rabobank Nederland.
ARTICLE 9 CHANGE IN CIRCUMSTANCES
If measures or regulations by the government and/or De Nederlandsche Bank N.V.
should lead to an effect which increases the cost price for the lending of
Advances, Rabobank Nederland shall inform the Borrower of this as soon as
possible and consult with the Borrower as to how the disadvantageous
consequences of this can be limited. The Borrower shall pay such extra costs
with respect to Advances which are issued after the date of notification on the
first demand of Rabobank Nederland.
ARTICLE 10 OVERDUE INTEREST
If any amount is not paid by the Borrower in timely manner, the Borrower shall
owe an overdue interest of 1% per month, to be calculated on the respective
amount which the Borrower still has not paid, from the day when it becomes due
until the day of payment.
ARTICLE 11 ORDER OF PAYMENTS
All that which Rabobank Nederland shall receive from the Borrower with respect
to this Facility shall be used to reduce the amount owed by the Borrower by
virtue of this agreement, in the first place, the expenses incurred, next the
commission, followed by interest, and finally the principal.
ARTICLE 12 DEMANDABILITY
The outstanding Advances under the Facility can be immediately
<PAGE> 5
demanded at all times, without prior notice or dunning, in the following cases:
a. if the Borrower fails to fulfill any obligation to Rabobank Nederland
by virtue of this agreement, or does not do so in timely or proper
manner, and the Borrower still does not fulfill such an obligation
within 14 days of Rabobank Nederland having made such a request of it;
b. if the Borrower requests suspension of payment, files for bankruptcy,
is declared bankrupt, or if its real property or any significant
portion thereof can be seized or if a writ of sequestration is
converted into a garnishment order;
c. if the Borrower ceases its operations or resolves on dissolution;
d. if the Borrower transfers its operations to a new or different company
or otherwise alienates them;
e. if the Borrower is in default of any payment obligation by virtue of
any monetary loan provided or to be provided by third parties, any
financing facility, or any long-term guarantee facility, each with an
original maturity of more than 12 months, in consequence of which the
respective monetary loan and/or facility is demanded to be repaid in
its entirety at an accelerated date, with the understanding that
Rabobank Nederland can only demand repayment under this agreement if
the aforesaid default of the Borrower is so serious that the ability of
the Borrower to satisfy its payment obligations under this agreement
with respect to Rabobank Nederland is significantly jeopardized. By
long-term guarantee facility is meant in this connection a long-term
agreement between a bank and the Borrower, under which this bank, at
the terms as stipulated between the respective bank and the Borrower,
guarantees the Borrower's payment obligations with respect to third
parties.
ARTICLE 13 FINANCIAL INFORMATION
The Borrower is obligated to send Rabobank Nederland each year a copy of its
(consolidated) annual accounts, after they have been drawn up.
ARTICLE 14 TAXES/EXPENSES
1. The Borrower shall pay all amounts which it owes to Rabobank Nederland
by virtue of the Facility to Rabobank Nederland without deduction
and/or settlement, at the offices of Rabobank Nederland or at such
place as is indicated by Rabobank Nederland.
2. All Dutch taxes which might be levied in future in the form of an
independent profit tax on the interest, not counting as
<PAGE> 6
taxes the Dutch Income Taxes and/or Corporate Tax or any withholding of
these taxes, shall be charged to the Borrower.
3. All reasonably incurred expenses of collection when repayment
of the Facility is demanded shall be charged to the Borrower.
Collection expenses also include all outside expenses of legal counsel,
court costs, costs of experts and other costs of third parties.
ARTICLE 15 INDEBTEDNESS
With respect to the indebtedness by virtue of this agreement, the books of
Rabobank Nederland shall qualify as full proof, unless the Borrower furnishes
counter-evidence.
ARTICLE 16 SECURITY
1. The Borrower promises to Rabobank Nederland that, during the term of
the Facility and until such time as the Advances and/or Loans borrowed
under the Facility have been redeemed:
a. on the consolidated balance sheet, a ratio between the
current assets and current liabilities, including
obligations maturing within one year by reason of long
and medium-term debt, shall always be maintained at a
minimum of 1:1;
b. on the consolidated balance sheet, a ratio between long
[term?] borrowed capital and shareholders' equity shall
never exceed 2.5:1.
By long borrowed capital is meant here the sum of:
- all debts of long and medium-long term, excluding the
obligations falling due within one year by reason of long and
medium-long debts, which should be listed among the current
liabilities;
- 100% of the provisions, minus the provision for exchange
differences and that portion of the provisions which is listed
among the shareholders' equity, as indicated below.
By shareholders' equity is meant here the sum of:
- share capital;
- share premium reserves;
- other free reserves, with the exception of a reserve
resulting from revaluation of fixed assets;
- 50% of the taxation provision.
The aforesaid ratios should always be read in agreement with and on the
basis of the balance sheet and profit and loss statement, officially
approved by the accountants, for the most recent fiscal year, with the
accompanying explanation,
<PAGE> 7
produced in accordance with the statutory provisions regarding annual
accounts.
2. The Borrower promises not to take out any mortgage on its real
property situated in the Netherlands without consent of Rabobank
Nederland on which approval Rabobank Nederland may impose conditions.
3. Wherever this article speaks of real property, real rights are
also understood thereby.
4. The Borrower promises that all companies in which it directly
possesses or will possess the majority of the voting capital,
or in which it, together with or by means of one or more
companies, whether or not directly associated with each other,
in which it possesses the majority of the voting capital,
possess or shall possess the majority of the voting capital,
shall assume the same obligations as mentioned under Item 2
and Item 3 of the present article.
ARTICLE 17 NOTICES
Notices and communications with respect to this agreement should, unless
otherwise expressly provided, be made in writing or by telefax at the following
addresses:
(*)
for the Borrower:
Koninklijke Pakhoed N.V.
Treasury Dept.
P. O. Box 863
3000 AW Rotterdam
Telefax: 010-4147956
ARTICLE 18 MISCELLANEOUS
1. With respect to this agreement Rabobank Nederland elects domicile at
the offices in Utrecht, at Croeselaan 18, and the Borrower at the
offices in Rotterdam, at Blaak 333.
2. Dutch law applies to this agreement and its execution.
3. Differences with respect to this agreement are resolved by the
competent Dutch magistrates.
4. The Borrower declares that the entering into this agreement
does not conflict with any other agreement entered into by it.
<PAGE> 8
Thus signed in duplicate at the respective locations on 4 June 1996
I. (*)
II. KONINKLIJKE PAKHOED N.V.
<PAGE> 1
(*)
- --------------------------------------------------------------------------------
The undersigned:
1. The limited liability company Koninklijke Pakhoed N.V., established at
Rotterdam, hereafter known as: borrower
and
2. (*)
considering:
- - that the bank has offered the borrower, in its letter dated 3 June
1996, a multi-currency standby facility,
- - that the bank and borrower wish to regulate the conditions under which
borrower can avail itself of this facility;
stipulate to the following:
Article 1 Definitions
1.01 The following terms in this agreement are defined as follows:
a. AIBOR: the interest percentage for interbank deposits of comparable
maturity in guilders, as ascertained by De Nederlandsche Bank N.V. on
the day of borrowing at 12:00 A.M. (Dutch time);
b. Eurocurrency: freely convertible U.S. Dollars, German Marks, Pounds
Sterling, Belgian Francs, French Francs, Swiss Francs, Swedish Krone
and Australian Dollars.
c. LIBOR: the interest percentage at which interbank deposits in identical
currency are offered for comparable amounts and maturities by the banks
to first-class banks in the London Interbank Market at 11:00 A.M.
(London time), two work days prior to the borrowing day;
d. Limit: the maximum amount of the facility, expressed in Dutch guilders,
which may be (still) issued at any time, taking into account the
provisions of Article 6;
e. Countervalue: the result of the outstanding amounts in Eurocurrency,
multiplied by the selling price as is established by the bank for the
sale of Eurocurrency in return for Dutch guilders at 11:00 A.M.
f. Due Date(s): the date(s), by 12:00 A.M., on which borrower must pay
(back) any amount that it owes to the bank by
<PAGE> 2
reason of this agreement.
g. Work Day: a day on which banks in Amsterdam, London, and
the place where any amount must be paid by virtue of this
agreement, are open for bank business.
Article 2 Amount
2.01 The bank shall provide to borrower as of the date of signing
of this agreement and up to 15 July 1999 a facility in the
amount of a maximum of f. 100,000,000.00 (in words: one
hundred million guilders) or the Countervalue thereof in
Eurocurrency, under the following conditions and provisions.
Article 3 Form
3.01 Borrower can avail itself of the facility by borrowing:
a. in the form of one or more short-term loans in Dutch
guilders, for periods of 1, 3, 6 or 12 months, in amounts of
f. 1,000,000.00 or a multiple thereof;
b. in the form of one or more short-term loans in Eurocurrency,
for periods of 1, 3, 6 or 12 months, in amounts with a
Countervalue of f. 1,000,000.00 or a multiple thereof,
rounded off to 100,000 in the particular currency.
3.02 Borrower must select the maturities of short-term loans so
that they do not exceed the term of the facility.
Article 4 Availability/Disbursement
4.01 The facility is only (still) available if borrower satisfies the
ratios and obligations to the bank as stipulated in Article 11 and
none of the events mentioned in Article 10 has occurred.
4.02 If borrower wishes to borrow one (or more) short-term
loan(s) in Dutch guilders, it shall inform the bank of this
by telephone, no later than 10:00 A.M. on the day of
borrowing, indicating the desired amount and the desired
period, this communication being binding on borrower on the
day of the borrowing; the bank shall notify the borrower as
soon as possible on the day of borrowing what the prevailing
interest rate is for the desired borrowing in accordance
with Article 5. Borrowing in the form of short-term loans in
Dutch guilders can only be done within the Limit. The bank
shall send a confirmation of each borrowing to Koninklijke
Pakhoed N.V., according to the form included in Exhibit A.
Such borrowing is regulated by the provisions contained in
the respective confirmation, insofar as these differ from
the provisions of this agreement.
4.03 If borrower wishes to borrow one (or more) short-term
<PAGE> 3
loan(s) in Eurocurrency, it shall inform the bank of this by
telephone, no later than two work days prior to the borrowing
before 10:00 A.M., indicating the desired currency and period, this
communication being binding on borrower on the day of the
borrowing; the bank shall notify the borrower as soon as possible
on the day of said communication what the prevailing interest rate
is for the desired borrowing in accordance with Article 5. The bank
shall include the relevant data for this loan in a written
confirmation. Borrowing in the form of short-term loans in
Eurocurrency can only be done within the Limit and insofar as the
bank has funds up to the desired amounts and for the desired
periods. The bank shall send a confirmation of each borrowing to
Koninklijke Pakhoed N.V., according to the form included in Exhibit
A.
4.04 In event of borrowing in Eurocurrency, the bank is entitled
to withhold from borrower an amount which is considered
necessary, within reasonable bounds, to cover exchange rate
risk. Likewise, the bank shall compute the Countervalue on
the first Work Day of each calendar month. The amount thus
computed is taken into consideration when determining
whether borrowing is still possible within the Limit.
4.05 In the event that the Countervalue computed per
Article 4.04, together with the total of the amounts
borrowed in Dutch guilders, exceeds the Limit, borrower
shall, at first demand of the bank, remit the amount by
which the maximum credit facility is exceeded to a deposit
account as indicated by the bank. In the latter case, a
credit interest shall be paid on the thus-remitted amounts
at the applicable market rates for borrowers. These amounts
shall be paid back on first demand of borrower as soon as
and as long as it appears that the exceeding of the maximum
amount of the facility has diminished on a subsequent
accounting date.
4.06 The disbursement of the short-term loan(s) shall occur by crediting
a bank account, to be specified by borrower, using the starting
date of the particular loan as the value date.
Article 5 Interest and Commission(s)
5.01 Borrower shall pay the following debit interest rate on the amounts
in Dutch guilders borrowed during the term of this agreement:
for short-term loans, AIBOR on the date of the borrowing, plus a
surcharge of [*] per year; this debit interest rate is included
in the confirmation sent out for the particular short-term loan,
and it is due on the last day of the period for which the
short-term loan is borrowed and should be paid at the same time as
the repayment of the
<PAGE> 4
principal on the Due Date of the short-term loan.
5.02 Borrower shall pay, on the amounts in Eurocurrency borrowed as
short-term loan(s) during the term of this agreement, a debit
interest rate equal to LIBOR, as ascertained two days prior to the
day of borrowing, plus a surcharge of [*] per year. This debit
interest rate is due on the last day of the period for which the
short-term loan is borrowed and should be paid along with the
repayment of the principal on the Due Date of the short-term loan,
in the same currency as the principal.
5.03 The interest for borrowing under this facility shall be computed on
the number of actual days elapsed, for Dutch guilders on the basis
of a year of 360 days and for Eurocurrency according to the market
practices applying to the particular currency.
5.04 Borrower shall owe, at three months from the date of signing of
this agreement, a readiness commission of [*] per year on the
portion of the facility not borrowed on a daily basis, to be paid
at the end of the respective period on 1 January, 1 April, 1 July
and 1 October of each year.
5.05 As of the date on which any reduction of this facility takes effect
as provided in Article 6, the readiness commission is no longer due
on the amount of that reduction.
Article 6 Term, Reduction and Accelerated Redemption
6.01 The credit facility shall have a term until 15 July 1999, on which
date borrower shall have paid to the bank the amount still owed by
it by reason of this facility and this agreement, in a lump sum.
6.02 If and insofar as borrower has obtained a definitive financing for
the purchase price of the stock of Univar Corporation, the limit
shall be reduced by at least 1/3 of the amount of said financing
and the amounts borrowed under this facility shall be redeemed on
their due date, if and insofar as a remainder has been created by
said reduction of the limit.
Furthermore, borrower is entitled at all times to reduce this
facility in whole or in part, at no penalty, provided it makes no
(further) use thereof on the date of the desired accelerated
reduction.
Article 7 (Re) Payment
7.01 Borrower shall make all payments which it owes by virtue of
this agreement to the bank on the Due Dates prior to
12:00 o'clock (by giro), without any setting off of debt or
<PAGE> 5
any other limitation or conditions of any kind. All Dutch taxes on
the interest of this facility as such, not being taxes which are
designated in the Netherlands as Income and/or Corporate Tax or as
withholding tax, shall be charged to the borrower.
7.02 In event of accelerated demand for repayment as provided in Article
10, all amounts owed to the bank shall be immediately paid off.
7.03 Without prejudice to the provisions of Article 10, borrower shall
repay to the bank each amount borrowed under this facility as a
loan on the Due Date of that particular loan.
7.04 If borrower wishes to again borrow a short-term loan or portions
thereof for a subsequent period, the repayment of that loan or the
particular portion thereof shall not in actuality occur and the
repayment and the renewed provision of funds shall be considered to
take place at the same time. In such instances, Article 4 applies
accordingly.
7.05 If any Due Date is not a Work Day, the next following Work Day
shall qualify as Due Date, unless the next following Work Day falls
in a new calendar month, in which case the Work Day preceding the
respective Due Date shall qualify as the Due Date.
7.06 Each payment shall be used, in the first place, to satisfy any
expenses, then to pay for commissions and interest, and finally to
redeem the principal.
Article 8 Nontimely Payments
8.01 In event of nontimely payment by borrower of any amount owed to the
bank by it in virtue or in consequence of the present agreement,
borrower shall be assessed a penalty interest of 1% per month on
the amount paid late for the time during which this remains unpaid;
for the outstanding amount, this penalty interest takes the place
of the interest applying to the particular loan in Article 5; it is
calculated up to the day of payment, portions of a month also being
computed according to the number of days actually elapsed on the
basis of a month of 30 days, and it should be paid at the same time
as the payment of the last paid amount.
Article 9 Expenses, Proof of Indebtedness
9.01 All expenses which are reasonably connected with collection of the
amount owed by virtue of this credit facility in court or out of
court, and/or incurred by the bank in maintaining and exercising
its rights, shall be charged to borrower.
9.02 Except for counter-evidence to be furnished by borrower, an
<PAGE> 6
extract from the books produced and signed by the bank shall
qualify as full proof of the amounts owed by borrower by reason or
virtue of this agreement, and also insofar as the magnitude and
reason thereof are concerned.
Article 10 Accelerated Demand for Repayment
10.01 All amounts borrowed under this facility with the interest and
whatever else the borrower owes the bank by reason of this
agreement can be demanded immediately and in its entirely by the
bank, without any summons or notice being required:
(a) if borrower fails to fulfill any obligation to the bank by virtue
of this agreement, or does not do so in timely or proper manner,
and borrower still does not fulfill such an obligation within
fourteen days of the bank's having made such a request of it;
(b) if borrower requests suspension of payment, files for bankruptcy,
is declared bankrupt, or if its real property or any significant
portion thereof can be seized or if a writ of sequestration is
converted into a garnishment order;
(c) if borrower ceases its operations or resolves on dissolution;
(d) if borrower transfers its operations to a new or different company
or otherwise alienates them;
(e) if borrower is in default of any payment obligation by virtue of
any monetary loan provided or to be provided by third parties, any
financing facility, or any long-term guarantee facility, each with
an original maturity of more than twelve months, in consequence of
which the respective monetary loan and/or facility is demanded to
be repaid in its entirety at an accelerated date, with the
understanding that the bank can only demand repayment under this
agreement if the aforesaid default of borrower is so serious that
the ability of borrower to satisfy its payment obligations under
this agreement with respect to the bank is significantly
jeopardized.
By long-term guarantee facility is meant in this connection a
long-term agreement between a bank and borrower, under which this
bank, at the terms as stipulated between the respective bank and
borrower, guarantees borrower's payment obligations with respect to
third parties.
10.02 Borrower is obligated to notify the bank immediately of the
occurrence of the aforesaid circumstances.
Article 11 Ratios/Negative Pledge
<PAGE> 7
11.01 Borrower promises to ensure that, during the term of the
Loan;
- - on the consolidated balance sheet, a ratio between the current
assets and current liabilities, including obligations maturing
within one year by reason of long and medium-term debt, shall
always be maintained at a minimum of one to one (1:1);
- - on the consolidated balance sheet, a ratio between long [term?]
borrowed capital and shareholders' equity shall never exceed two
point five to one (2.5:1).
By long borrowed capital is meant here the sum of:
A. all debts of long and medium-long term, excluding the obligations
falling due within one year by reason of long and medium-long
debts, which should be listed among the current liabilities;
B. one hundred percent (100%) of the provisions, minus the provision
for exchange differences and that portion of the provisions which
is listed among the shareholders' equity, as indicated below.
By shareholders' equity is meant here the sum of:
- share capital;
- share premium reserves;
- other free reserves, with the exception of a reserve
resulting from revaluation of fixed assets;
- fifty percent (50%) of the taxation provision.
The aforesaid ratios should always be read in agreement with and on
the basis of the balance sheet and profit and loss statement,
officially approved by the accountants, for the most recent fiscal
year, with the accompanying explanation, produced in accordance
with the statutory provisions regarding annual accounts.
11.02 Borrower promises not to take out any mortgage on its real property
situated in the Netherlands without consent of the bank, on which
approval the Bank may impose conditions.
11.03 Wherever this article speaks of real property, real rights
are also understood thereby.
11.04 Borrower promises that all companies in which it directly possesses
or will possess the majority of the voting capital, or in which it,
together with or by means of one or more companies, whether or not
directly associated with each other, in which it possesses the
majority of the voting capital, possess or shall possess the
majority of the voting capital, shall assume the same obligations
as mentioned
<PAGE> 8
under Item 2 and Item 3 above.
Article 12 Figures and Other Information
12.01 Borrower is obligated to send to the bank each year, within six
months of the closing out of the accounting year, its consolidated
annual accounts approved by outside accountant. Furthermore,
borrower, if it has borrowed any money under this credit facility,
is obligated to furnish the bank the explanations which the bank
may reasonably request of it, upon its demand.
Article 13 Banking Transactions
13.01 The bank has the "right of first refusal" as regards swap
transactions with respect to this facility.
Article 14 General Conditions
14.01 The General Conditions dated 22 December 1995 shall apply to this
agreement, unless otherwise expressly stipulated herein, as have
been drawn up and filed by the Dutch Banking Association on 11
November 1987 with the clerk of the District Court of Amsterdam,
and of which borrower declares that it has received a copy, except
for Articles 18, 19, 20, 21, 31 and 33.
Article 15 Notices
15.01 All notices and communications with respect to this agreement
should be done in writing, per telex or telefax, unless otherwise
expressly determined, and should be sent to:
for the bank, to the address [*]
or telex [*]
attention
or telefax [*]
for the borrower, to the address: Treasury Dept.
P. O. Box 863,
3000 AW ROTTERDAM or
Blaak 333
3011 GB ROTTERDAM
or telefax 010-4147956
attention Treasury Dept.
Thus signed in duplicate at Rotterdam on 4 June 1996.
<PAGE> 9
[*] Koninklijke Pakhoed N.V.
<PAGE> 10
[*]
- --------------------------------------------------------------------------------
Exhibit A
Re: Configuration of Short-Term Loans
Dear Sirs:
Re: Standby Facility
With reference to our telephone conversation today, we hereby confirm that we
are providing you a rollover loan in the framework of the standby facility, as
established in the agreement concluded between Koninklijke Pakhoed N.V. and ING
Bank N.V. on .. June 1996, under the following conditions:
Amount:
Maturity:
Interest:
Payment:
Sincerely
[*]
<PAGE> 11
[*]
- --------------------------------------------------------------------------------
Exhibit B
ACKNOWLEDGEMENT OF DEBT
The undersigned
the limited liability company Koninklijke Pakhoed N.V., established in
Rotterdam, hereafter known as "the borrower"
declares that it has received a loan and accordingly owes the ING Bank N.V.,
established in Amsterdam, hereafter known as "the bank," the sum of f
(in words: ) and that it is obligated to:
1) Pay to the bank a fixed interest of ...% per year on the aforesaid
sum or the unredeemed portion thereof, becoming due semiannually on
the first of January and the first of July of each year, for the
first time on next ..., for the period elapsing from today on.
2) To redeem said amount at f. ... on ..., unless the duration of the
loan is extended.
3) Furthermore, this loan is subject to the conditions and provisions
reported in the agreement signed between the borrower and the bank
on ... to provide a credit facility of f. 100,000,000.00.
Thus signed in Rotterdam, on ...
the borrower:
Borrower's signature:)1
N.B.)1. Each signer for borrower should sign and print their name here:
Good for ... guilders with interest and expenses and to sign this statement.
<PAGE> 1
ANNEX A
LOGO
PERSONAL AND CONFIDENTIAL
May 31, 1996
Board of Directors
Univar Corporation
6100 Carillon Point
Kirkland, WA 98033
Members of the Board of Directors:
We understand that Royal Pakhoed N.V. ("Pakhoed") is contemplating the
acquisition of all of the outstanding shares of Common Stock of Univar
Corporation ("Univar" or the "Company") (the "Transaction"). The Transaction
will be effected in two steps, the first of which would be a tender offer (the
"Tender Offer") by UC Acquisition Corp. ("UC"), an indirect wholly-owned
subsidiary of Pakhoed, for all of the outstanding shares of Common Stock of the
Company (the "Shares") not currently owned by Pakhoed, UC or their affiliates,
pursuant to which shareholders of the Company other than Pakhoed, UC and their
affiliates would receive $19.45 net in cash in exchange for each Share tendered.
The Tender Offer must remain open for a period of at least 30 business days from
the date upon which the Tender Offer is first publicly announced. UC may extend
the expiration date of the Tender Offer to a date not later than July 31, 1996,
provided that UC may extend the expiration date of the Tender Offer to a date
not later than August 31, 1996 if (i) necessary Government Approvals (as defined
in the proposed Agreement and Plan of Reorganization among Pakhoed, UC and the
Company (the "Reorganization Agreement")) have not been obtained by July 31,
1996, or (ii) by July 26, 1996, less than 80% of the outstanding Shares have
been tendered pursuant to the Tender Offer. In the event the Tender Offer is
extended beyond July 31, 1996, the price per Share to be paid to shareholders of
the Company in the Tender Offer and the Merger (as defined below) shall be
increased by an amount equal to the product of (i) $19.45; (ii) the prime
interest rate as announced by Bank of America NW, N.A. (doing business as
Seafirst Bank) in Seattle, Washington as in effect on August 1, 1996; and (iii)
the quotient obtained by dividing (x) the number of days the Tender Offer is
extended through July 31, 1996 by (y) 365. The terms and conditions of the
Tender Offer are more fully described in the Reorganization Agreement.
Concurrent with the closing of the Tender Offer, the holder of each
outstanding option to purchase Shares which was not previously exercised would
receive in cash the positive difference, if any, between the highest price paid
to shareholders of the Company who tendered their Shares in the Tender Offer and
the exercise price per share of such option. Subsequent to the Tender Offer,
among other things, (i) the Company and UC would be merged and the surviving
corporation would be an indirectly wholly-owned subsidiary of Pakhoed (the
"Merger") and (ii) each remaining Share not owned by Pakhoed, UC or their
affiliates would be converted into the right to receive an amount in cash equal
to the highest price paid to shareholders of the Company who tendered their
Shares in the Tender Offer. The terms and conditions of the Merger are more
fully described in the Reorganization Agreement.
You have requested that Schroder, Wertheim & Co. Incorporated ("Schroder
Wertheim") render an opinion (the "Opinion"), as investment bankers, as to the
fairness, from a financial point of view, of the consideration to be received by
the shareholders of the Company other than Pakhoed, UC and their affiliates in
the Transaction (the "Transaction Consideration").
Schroder Wertheim, as part of its investment banking business, is
continually engaged in the valuation of businesses and their securities in
connection with mergers and acquisitions, negotiated underwritings, secondary
distributions of listed and unlisted securities, private placements and
valuations for estate, corporate and other purposes. Schroder Wertheim has acted
as financial advisor to Univar with respect to the Transaction for which we have
received fees and will receive additional fees, a portion of which is contingent
upon consummation of the Transaction.
In connection with the Opinion set forth herein, we have, among other
things:
i. reviewed a draft, dated May 30, 1996, of the Reorganization
Agreement;
- --------------------------------------------------------------------------------
Telephone 212-492-6000 Equitable Center, 787 Seventh Avenue
New York, NY 10019-6016
<PAGE> 2
ii. reviewed a draft, dated May 30, 1996, of the Schedule 14D-1 to be
filed by UC with the Securities and Exchange Commission in connection with
the Tender Offer, including a draft of the Offer to Purchase incorporated
therein by reference (the "Offer to Purchase");
iii. reviewed a draft, dated May 30, 1996, of the Schedule 14D-9 to be
filed by the Company with the Securities and Exchange Commission in
connection with the Tender Offer;
iv. reviewed the Company's Annual Reports on Form 10-K filed with the
Securities and Exchange Commission for the fiscal years ended February
1992, 1993, 1994, 1995 and 1996, including the audited consolidated
financial statements of Univar included therein;
v. reviewed historical financial results of Univar by operating
division prepared by management;
vi. reviewed forecasts and projections for Univar prepared or supplied
by Univar management for the fiscal years ending February 1997 through
2002;
vii. held discussions with Univar management regarding the business,
operations and prospects of the Company;
viii. performed various valuation analyses, as we deemed appropriate,
of Univar using generally accepted analytical methodologies, including: (i)
the application to the financial results of Univar of the public trading
multiples of companies which we deemed comparable; (ii) the application to
the financial results of Univar of the multiples reflected in recent
mergers and acquisitions for businesses which we deemed comparable; and
(iii) discounted cash flow and leveraged buyout analyses of Univar's
operations;
ix. reviewed the historical trading prices and volumes of Univar
Common Stock; and
x. performed such other financial studies, analyses, inquiries and
investigations as we deemed appropriate.
In rendering the Opinion, we have assumed and relied upon the accuracy and
completeness of all information supplied or otherwise made available to us by
Univar or obtained by us from other sources, and upon the assurance of Univar's
management that they are not aware of any information or facts that would make
the information provided to us incomplete or misleading. We have not
independently verified such information, undertaken an independent appraisal of
the assets or liabilities (contingent or otherwise) of Univar, or been furnished
with any such appraisals. With respect to financial forecasts for Univar, we
have been advised by Univar, and we have assumed, without independent
investigation, that they have been reasonably prepared and reflect the best
currently available estimates and judgment as to the expected future financial
performance of Univar.
The Opinion is necessarily based upon financial, economic, market and other
conditions as they exist, and the information made available to us, as of the
date hereof. We disclaim any undertaking or obligation to advise any person of
any change in any fact or matter affecting the Opinion which may come or be
brought to our attention after the date of the Opinion unless specifically
requested to do so.
The Opinion does not constitute a recommendation as to any action the Board
of Directors of the Company or any shareholder of the Company should take in
connection with the Transaction or any aspect thereof. In rendering the Opinion,
we have not been engaged as an agent or fiduciary of the Company's shareholders
or of any other third party. The Opinion relates solely to the fairness from a
financial point of view of the Transaction Consideration to the shareholders of
Univar other than Pakhoed, UC and their affiliates. We express no opinion herein
as to the structure, terms or effect of any other aspect of the Transaction.
This letter is for the information of the Board of Directors of the Company
solely for its use in evaluating the fairness from a financial point of view of
the Transaction Consideration to the shareholders of the Company other than
Pakhoed, UC and their affiliates and may not be used for any other purpose or
referred to without our prior written consent.
Based upon and subject to all the foregoing, we are of the opinion, as
investment bankers, that as of the date hereof, the Transaction Consideration is
fair, from a financial point of view, to the shareholders of Univar other than
Pakhoed, UC and their affiliates.
Very truly yours
SCHRODER WERTHEIM & CO.
INCORPORATED
A-2
<PAGE> 1
EXHIBIT (b)(2)
REPORT OF SCHRODER WERTHEIM & CO.
INCORPORATED DATED MAY 31, 1996
Parent and UC Acquisition Corp. have requested a continuing exemption
by letter dated June 6, 1996. A paper copy was submitted to the Commission on
June 6, 1996 and an electronic filing shall be made within 6 days of the
filing.
<PAGE> 1
Univar Corporation,
Pakhoed Holding N.V.,
and
Pakhoed Investeringen B.V.
- --------------------------------------------------------------------------------
STANDSTILL AGREEMENT
- --------------------------------------------------------------------------------
Dated: September 19, 1986
<PAGE> 2
STANDSTILL AGREEMENT
THIS STANDSTILL AGREEMENT (the "Agreement") is made this 19th day of
September, 1986, by and among Univar CORPORATION, a Delaware corporation
("Company"), and Pakhoed Holding N.V., a Netherlands corporation ("Holding"),
and Pakhoed Investeringen B.V., a Netherlands corporation ("Parent").
RECITALS
A. Company, Holding, Parent and Subsidiary have contemporaneously
herewith entered into an Agreement for Exchange of Capital Stock (as defined
below) pursuant to which, among other things, Parent shall transfer to Company
all of the issued and outstanding shares of capital stock of Subsidiary, and
Company shall issue to Parent shares of Common Stock of Company, the actual
number of which shall be determined in accordance with the terms of the Exchange
Agreement.
B. The parties seek to regulate the acquisition and disposition by
Purchaser (as defined below) of Company's Voting Securities, provide for
Purchaser representation on Company's Board, and generally foster a constructive
and mutually beneficial relationship.
C. Purchaser and Company acknowledge that Company has made, prior to
the date hereof, a careful evaluation of Purchaser's investment objectives with
regard to its ownership of Voting Securities, and the compatibility of
Purchaser's management and objectives with the management and objectives of
Company; that such factors were critical to Company in its decision to enter
into this Agreement; that, absent the provisions of Articles II through IV
hereof, Purchaser's ownership of Voting Securities would present an unusual
opportunity for it to gain effective control of Company and Company might have
reached a different decision with regard
<PAGE> 3
to entering into this Agreement and the Exchange Agreement; that, therefore, the
provisions of Articles II through IV were a material inducement to Company to
enter into this Agreement and the Exchange Agreement; and, that the primary
purposes of Articles II through IV are that, so long as such provisions remain
in effect and except as permitted by such provisions, the Voting Securities
owned by Purchaser not come to rest in the hands of any single holder or group
of holders other than Purchaser, and Purchaser's ownership of Voting Securities
not be increased, other than as provided for in this Agreement or with the
consent of Company. Purchaser acknowledges that such purposes are reasonable and
that the provisions of Articles II through IV are reasonable in view of such
purposes.
NOW, THEREFORE, in consideration of the agreements and covenants set
forth herein and in the Exchange Agreement, and for other good and valuable
consideration, the parties agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement, in addition to other terms defined elsewhere
herein, the following terms have the respective meanings set forth below:
1.1 Act. "Act" means the Securities Act of 1933, as
amended.
1.2 Affiliate. "Affiliate" means any Person directly or
indirectly controlled by, controlling or under common control with another
Person, including but not limited to a Person who is employed by or is a
consultant or independent contractor to another Person. For purposes of this
definition, "control" means the power to direct the management or policies of
the Person in question.
1.3 Affiliated Director. "Affiliated Director" means any
member of the Board who has been designated by Purchaser under Article VI for
nomination or appointment as a director of Company.
-2-
<PAGE> 4
1.4 Board. "Board" means the Board of Directors of
Company as constituted from time to time.
1.5 Business Day. "Business Day" means any Monday through
Friday, inclusive, excluding any such day which is a Federal or State of
Washington holiday.
1.6 Commission. "Commission" means the Securities and
Exchange Commission of the United States.
1.7 Common Stock. "Common Stock" means the common stock
of Company, par value $.33-1/3 per share or such other par value as may be
established from time to time.
1.8 Common Stock Equivalents. "Common Stock Equivalents"
means the sum of the following, determined at any time during the term of this
Agreement" (a) the total number of shares of issued and outstanding Common
Stock, plus (b) the number of shares of Common Stock reserved for issuance
pursuant to stock options granted (but not yet exercised) under Company's stock
option plans, and plus (c) the number of votes which may be cast for the
election of directors (whether directly or by formula) as a result of ownership
of any Voting Securities other than Common Stock; provided, however, the shares
of Common Stock described in (b) above shall not be included in Common Stock
Equivalents until the earlier of (i) the date the options are exercisable, or
(ii) the end of the fiscal year of Company during which such options were
granted; provided, further, that the votes described in (c) above shall not be
included in Common Stock Equivalents until the Voting Securities other than
Common Stock are able to be voted for the election of directors.
1.9 Core Shareholders. "Core Shareholders" means the
individuals identified on the attached Exhibit A.
1.10 Effective Date. "Effective Date" means the date the
acquisition of Common Stock by Parent is consummated pursuant to the terms of
the Exchange Agreement.
1.11 Exchange Act. "Exchange Act" means the Securities
Exchange Act of 1934, as amended.
-3-
<PAGE> 5
1.12 Exchange Agreement. "Exchange Agreement" means the
Agreement for Exchange of Capital Stock of even date herewith among Parent,
Holding, Subsidiary, and Company.
1.13 Holder. "Holder" means Purchaser and any Person to
whom the registration rights under Article VII have been transferred in
compliance with Section 7.7.
1.14 Investment Banking Firm. "Investment Banking Firm"
means a nationally recognized investment banking firm.
1.15 Market Deposition Program. See Section 3.9(a).
1.16 Notice of Exercise. See Section 3.9.(b)(iii).
1.17 Notice of Issue. See Section 2.6.
1.18 Notice of Proposed Sale. See Section 3.9(a).
1.19 Percentage Limitation. See Section 2.2.
1.20 Permitted Percentage. "Permitted Percentage" means
the Percentage Limitation or, if the percentage of Common Stock Equivalents
owned by Purchaser increases as a consequence of (a) a reduction in the number
of outstanding Voting Securities other than as a result of (1) the expiration of
rights to acquire Common Stock under Company's stock option plans or (2) the
lapse or rights to vote for the election of directors as a result of ownership
of any Voting Securities other than Common Stock, (b) Purchaser's acquisitions
of Voting Securities with Board approval in accordance with Section 2.8, or (c)
Purchaser's acquisitions of Voting Securities in a tender offer permitted by
Section 2.7, following which Company fails to repurchase shares of Voting
Securities in accordance with Section 2.7(b), such greater percentage of Common
Stock Equivalents owned by Purchaser after such reduction, acquisition, or
failure, respectively. The Permitted Percentage shall be reduced from time to
time if, upon the issuance by Company of Common Stock Equivalents, Purchaser
either does not or is not permitted by this Agreement to purchase its full
Permitted Percentage of such issuance.
-4-
<PAGE> 6
1.21 Person. "Person" means any individual, partnership,
association, corporation, trust, or other entity, including without limitation
employee pension, profit sharing, and other benefit plans and trusts.
1.22 Principal Trading Market. "Principal Trading Market"
means the principal trading exchange or national automated stock quotation
system on which the Common Stock is traded or quoted.
1.23 Private Sale. See Section 3.9(a).
1.24 Purchaser. "Purchaser" means Holding, Parent, and
Purchaser Affiliates, jointly and severally.
1.25 Purchaser Affiliate. "Purchaser Affiliate" means any
Affiliate of either Holding or Parent.
1.26 Subsidiary. "Subsidiary" means DSW, Inc., a
Washington corporation.
1.27 Twenty Day Average. "Twenty Day Average" means the
average closing sale price of Common Stock on the Principal Trading Market for
the twenty (20) trading days preceding the earlier of the closing of, or public
announcement date concerning, the issuance of Voting Securities by Company.
1.28 Unaffiliated Director. "Unaffiliated Director" means
a director on the Board who is not an Affiliated Director.
1.29 Voting Securities. "Voting Securities" means Common
Stock and any other Company securities entitled to vote for the election of
directors, or any security (including any preferred stock of Company)
convertible into or exchangeable for or exercisable for the purchase of Common
Stock or other Company securities entitled to vote for the election of
directors.
1.30 13D Group. "13D Group" means any group of Persons
(other than the Core Shareholders) formed for the purpose of acquiring, holding,
voting.or disposing of Voting Securities required under Section 13(d) of the
Exchange Act and the rules and regulations thereunder (as now in effect) to file
a statement on Schedule 13D with the Commission as a
-5-
<PAGE> 7
"person" within the meaning of Section 13(d)(3) of the Exchange Act disclosing
beneficial ownership of Voting Securities representing more than 5% of any class
of Voting Securities.
ARTICLE II
RESTRICTIONS ON ACQUISITION OF ADDITIONAL
SHARES BY PURCHASER
2.1 No Purchases Before Effective Date. Except as
provided in Sections 2.7 and 2.9, Purchaser shall not, between the date of
execution of this Agreement and the Effective Date, acquire in any way or hold
record or beneficial ownership of any Voting Securities.
2.2 No Purchases Beyond Percentage Limitation. Except as
otherwise permitted herein, Purchaser shall not, directly or indirectly, acquire
any Voting Securities beyond its "Percentage Limitation". The "Percentage
Limitation" shall be 35% or such greater percentage of Common Stock Equivalents
as Purchaser may then own in accordance with this Agreement, but in no event
greater than 45%.
2.3 Permitted Purchase Due to Increases in Common Stock
Equivalents. If the Common Stock Equivalents increase at any time and, as a
consequence thereof Purchaser's aggregate ownership of Common Stock Equivalents
falls below its then Percentage Limitation, Purchaser may acquire additional
shares of Common Stock up to its Percentage Limitation, as follows:
(a) Purchaser may at any time do so by open
market purchases, partial tender offer, or private transaction; and/or
(b) Purchaser may, in accordance with Section
2.4, purchase unissued or treasury shares of Common Stock from Company.
2.4 Procedures Concerning Purchaser's Acquisition of
Shares from Company in response to Increases in Common Stock Equivalents.
-6-
<PAGE> 8
(a) Within thirty (30) days after any increase
in Common Stock Equivalents (other than an increase previously notified to
Purchaser under Section 2.6), Company shall give Purchaser written notice
setting forth the number of Common Stock Equivalents prior to the increase, the
number of Common Stock Equivalents after the increase, Purchaser's then
Percentage Limitation, the number of shares of Common Stock Purchaser may
purchase as a consequence of said increase, and the per share purchase price for
such shares.
(b) The purchase price per share of Common Stock
purchased under Section 2.3(b) shall be established as follows:
(i) if the Common Stock Equivalents
increased as a result of issuance by Company of one or more Voting Securities
(other than issuance of options under Company's stock option plans), the price
per share shall be the lesser of the Twenty Day Average or the aggregate fair
market value of all consideration received by Company for such Voting Securities
as determined by the Board (including attribution of the consideration received
with respect to each Voting Security other than Common Stock) within thirty (30)
days after the issuance, divided by the number of Common Stock Equivalents
issued by Company; or
(ii) if the Common Stock Equivalents
increased as a result of Company's issuance of stock options under Company's
stock option plans, the purchase price shall be the closing sale price of Common
Stock on the Principal Trading Market for the last day of Company's fiscal year
in which such options were issued.
(c) Purchaser shall have the right to purchase
from Company a number of shares of Common Stock equal to its then Percentage
Limitation multiplied times the increase in the Common Stock Equivalents.
Purchaser shall have fifteen (15) days from receipt of Company's notice pursuant
to Section 2.4.(a) above to notify Company in writing whether it elects to
purchase any of such shares of Common Stock and, if it so elects, the number of
shares it elects to purchase. At the time Purchaser delivers its notice to
Company, there shall be a binding agreement between Purchaser and Company for
the purchase and sale of the number of shares of
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Common Stock elected by Purchaser. Purchaser shall pay the purchase price to
Company in immediately available funds, and Company shall deliver certificates
representing the shares to Purchaser, on a date specified by Purchaser in its
notice, which date shall not be more than twenty (20) days after Purchaser
delivers its notice to Company.
2.5 Limitation on Purchaser's Right to Purchase Common
Stock Pursuant to Section 2.3 in the Event of a Business Acquisition by Company.
(a) Notwithstanding Section 2.3, Purchaser shall
have no right to purchase additional shares of Common Stock if (i) the Common
Stock Equivalents increased due to issuance by Company of Voting Securities in
connection with Company's acquisition of a business entity from a third party,
(ii) during the one year period following closing of such an acquisition,
Company repurchases a number of shares of Voting Securities equal to or greater
than the number of shares of Common Stock Equivalents issued to the third party,
and (iii) Company's plan to repurchase shares was approved by a majority of the
Board and notice thereof was given to Purchaser prior, to the closing of the
acquisition. If Company does not within the one year period repurchase a number
of shares of Voting Securities equal to the number of Common Stock Equivalents
issued to the third party, Purchaser shall have all rights under Section 2.3 to
purchase shares of Common Stock up to its Percentage Limitation. For purposes of
Section 2.4, Company shall give notice to Purchaser in accordance with Section
2.4(a) within thirty (30) days after the end of the one year period, and the
purchase price to be paid by Purchaser to purchase shares from Company shall be
established in accordance with Section 2.4(b)(i) as of the date of the closing
of the business acquisition. Except as modified by the preceding sentence, the
provisions of Section 2.4 shall govern any such purchase.
(b) The limitation contained in Section 2.5
shall only apply to increases of up to fifteen (15%) in the Common Stock
Equivalents. If in connection with an acquisition Company issues Voting
Securities which cause the Common Stock Equivalents to increase more than
fifteen
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(15%), Purchaser shall have all rights under Section 2.3 to purchase Common
Stock in connection with such increase over fifteen (15%).
2.6 Permitted Purchase If Company Proposes to Issue
Voting Securities for Cash. If Company proposes to issue Voting Securities
solely for cash pursuant to a registered offering or a private placement, and as
a consequence thereof Purchaser's aggregate ownership of Common Stock
Equivalents would fall below its then Percentage Limitation, Company shall give
Purchaser written notice of such fact (the "Notice of Issue") at least thirty
(30) days prior to the anticipated date of such issuance stating the number of
Common Stock Equivalents to be issued and the anticipated price per Common Stock
Equivalent. Purchaser shall have the right to purchase from Company a number of
shares of Common Stock equal to its then Percentage Limitation multiplied times
the number of Common Stock Equivalents to be issued. Purchaser shall have
fifteen (15) days from receipt of the Notice of Issue to notify Company in
writing whether it elects to purchase any of such shares of Common Stock and, if
it so elects, the number of shares it elects to purchase. At the time Purchaser
delivers its election to Company, there shall be a binding agreement between
Purchaser and Company for the purchase and sale of the number of shares of
Common Stock elected by Purchaser. The purchase price per share shall be the
price per Common Stock Equivalent at which the Voting Securities are actually
issued by Company; provided, however, that without Purchaser's consent the
purchase price shall not be more than one hundred twenty percent (120%) of the
anticipated price per Common Stock Equivalent set forth in the Notice of Issue.
Purchaser shall pay the purchase price to Company in immediately available
funds, and Company shall deliver certificates representing the shares of Common
Stock to Purchaser, on the date of Company's issuance of the Voting Securities.
2.7 Permitted Purchase in Response To Third Party Tender
Offer.
(a) If a tender or exchange offer is made by any
Person or 13D Group (other than Purchaser or any Person acting in concert with
Purchaser) to acquire Voting Securities, Purchaser may make a tender offer for
up to an equivalent number of shares of such Voting
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Securities as are sought to be purchased by the party making the other tender
offer. If Purchaser initiates a tender offer under this Section 2.7, the tender
offer may be on such terms as Purchaser shall elect and Company agrees that it
shall not in any way (whether by active opposition, Board announcement or
otherwise) contest said tender offer.
(b) If, following the tender offer, Purchaser
owns in the aggregate more than 45% of the Common Stock Equivalents, Company
shall have the right, exercisable at any time during the six month period
following completion of Purchaser's tender offer, to purchase from Purchaser a
number of shares of such Voting Securities as will cause Purchaser to own in the
aggregate 45% of the Common Stock Equivalents following such purchase. Company
shall, within said six (6) month period, notify Purchaser in writing whether it
elects to purchase any of such shares and, if it so elects, the number of shares
it elects to purchase. At the time Company delivers its notice to Purchaser,
there shall be a binding agreement between Purchaser and Company for the
purchase and sale of the number of shares of such Voting Securities elected by
Company.
(c) The purchase price per share shall be the
price paid by Purchaser in the tender offer to the tendering shareholders, plus
a pro-rata share of the costs and expenses incurred by Purchaser in conducting
said tender offer. The pro-rata share of costs and expenses shall be the
aggregate of all costs and expenses directly incurred by Purchaser, divided by
the number of shares of Voting Securities acquired in the tender offer. Company
shall pay the purchase price to Purchaser in immediately available funds, and
Purchaser shall deliver certificates representing the shares to Company, on a
date specified by Company in its notice, which date shall not be more than
twenty (20) days after Company delivers its notice to Purchaser.
(d) If Company's purchase is subject to or is
voluntarily submitted for shareholder approval, Purchaser shall vote all its
Voting Securities in favor of the purchase.
(e) If Company does not elect to purchase shares
from Purchaser, or elects to purchase only a portion of the shares under Section
2.7(b), Purchaser shall be entitled to retain the
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shares over 45%, but the Percentage Limitation shall remain at 45% (or such
lesser percentage as it shall become from time to time thereafter).
2.8 Permitted Purchase With Board Approval.
Notwithstanding any other provision of this Agreement, Purchaser may purchase
additional shares of Voting Securities at any time, if five-eighths (5/8) of the
Unaffiliated Directors approve such purchase in advance.
2.9 Permitted Purchase by 100% Tender Offer in response
to 10% Shareholder or Core Shareholder Increase. If at any time (a) any Person
(other than Purchaser) or a 13D Group becomes the beneficial owner of 10% or
more of the Common Stock Equivalents, or (b) the percentage of Common Stock
Equivalents beneficially owned in the aggregate by the Core Shareholders
increases by ten (10) percentage points or more over the percentage owned by the
Core Shareholders on the date of this Agreement, Purchaser shall have the right
to acquire additional shares of Common Stock by means of a tender offer under
Section 2.11 below. For purposes of this Section 2.9, the Core Shareholders'
beneficial ownership of Common Stock Equivalents shall be determined by the
reports filed (or required to be filed) by them on Form 4 under Section 16(a) of
the Exchange Act, or any successor form, or from equivalent information
furnished to Purchaser by each Core Shareholder pursuant to separate agreements
between Purchaser and the Core Shareholders.
2.10 Permitted Purchase by 100% Tender Offer After Five
Years. Commencing on the fifth anniversary of the Effective Date, Purchase shall
have the right to acquire additional shares of Common Stock by means of a tender
offer in accordance with Section 2.11 below.
2.11 Requirements for Tender Offers.
(a) Whenever Purchaser shall make a tender offer
for shares of Common Stock under Section 2.9 or 2.10, Purchaser may not close
the acquisition of the tendered shares unless all of the following requirements
have been satisfied:
(i) Purchaser's offer shall have been
made to all holders of Common Stock;
(ii) Purchaser shall offer to purchase
for cash all shares tendered; and
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(iii) Purchaser's offer shall have been
accepted by shareholders owning not less than two-thirds (2/3) of the
outstanding Common Stock.
(b) With respect to calculating whether
Purchaser's offer has been accepted by shareholders owning two-thirds (2/3) of
the outstanding Common Stock, the following shall apply:
(i) Common Shares beneficially owned by
Purchaser shall be excluded from the outstanding Common Stock;
(ii) in the case of a tender offer pursuant to
Section 2.9, Common Shares owned by the Person or 13D Group which gave rise to
Purchaser's right to make a tender offer shall be excluded from the outstanding
Common Stock; and (iii) if one or more Core Shareholders do not tender all of
their shares of Common Stock, the shares not tendered shall be excluded from the
outstanding Common Stock.
2.12 Mandatory Disposal of Excess Shares. If in violation
of any provision of Article II Purchaser shall at any time hold in the aggregate
in excess of its then Permitted Percentage, Purchaser shall be required to
dispose of such excess shares by promptly selling, subject to Company's right of
first refusal under Section 3.8, sufficient Voting Securities so that after such
sale Purchaser shall own in the aggregate not more than its then Permitted
Percentage. If Purchaser fails to dispose of shares of Voting Securities within
ninety (90) days after receipt of notice from Company advising Purchaser of its
obligation so to dispose of shares (it being understood that giving of notice by
Company is not a precondition to Purchaser's obligation to dispose of excess
shares), Company shall have the right to redeem at par value from Purchaser a
number of shares of Common Stock so that after such redemption the shares of
Voting Securities owned by Purchaser do not exceed Purchaser's then Permitted
Percentage.
2.13 Monthly Report of Ownership. During the term of this
Agreement, Purchaser will furnish to Company, within ten (10) days after the end
of each calendar month in which Purchaser acquires or disposes of any Voting
Securities, a statement showing the number of
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<PAGE> 14
shares of Voting Securities acquired or disposed of during the just ended month
and the aggregate number of shares of Voting Securities held by Purchaser at the
end of such month. To the extent that any such acquisition or disposition must
be reported to the Commission, Purchaser may fulfill the statement requirement
in this Section 2.13 by providing to Company a copy of such report to the
Commission.
2.14 General Rule Regarding Acquisition of Voting
Securities. Purchaser agrees that any and all acquisitions of Voting Securities
shall be made in compliance with all applicable federal and state laws,
including securities laws, and in accordance with restrictions generally imposed
on members of the Board and their Affiliates with respect to trading on
non-public information. Purchaser agrees to indemnify, defend and hold harmless
Company, its officers, directors and employees from and against any and all
losses, claims, liabilities, assertions and expenses incurred or suffered by any
of them, including attorneys' fees and costs of litigation, as a consequence of
a claim by any party other than Company or any of its Affiliates that Purchaser
breached its obligations set forth in the preceding sentence.
ARTICLE III
SALES OF SHARES BY PURCHASER AND RELATED RIGHTS
AND OBLIGATIONS OF PURCHASER AND COMPANY
3.1 General Restrictions on Resale or Other Disposition.
During the term of this Agreement, Purchaser shall not sell, transfer any
beneficial interest in, pledge, hypothecate or otherwise dispose of any Voting
Securities except in compliance with Article III.
3.2 Allowed Sales Pursuant to Registration Rights.
Subject to Company's right of first refusal under Section 3.8, Purchaser may at
any time sell Common Stock by means of an offering made pursuant to the
registration rights set forth in Article VII below.
3.3 Allowed Sales Pursuant to Rule 144. Subject to
Company's right of first refusal under Section 3.8, Purchaser may at any time
sell Common Stock pursuant to Rule 144 of the
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General Rules and Regulations under the Act, provided that Purchaser shall
notify Company at least two Business Days prior to the date of entering any sale
or transfer order of Common Stock pursuant to Rule 144, and provided further
that, if Company shall thereupon notify Purchaser of the pendency of its public
offering of any Voting Securities, Purchaser shall not effect any sales under
Rule 144 within 10 days prior to the commencement of or during such offering.
3.4 Allowed Private Sales to Third Parties or Pursuant to
Tender Offer. Subject to Company's right of first refusal under Section 3.8,
Purchaser may at any time make private sales of Voting Securities to a third
person, including sales pursuant to a tender offer or exchange offer.
3.5 Allowed Pledges. Purchaser may at any time make a
bona fide pledge of or grant a security interest in Voting Securities to a
commercial or an institutional bank or lender for money borrowed, provided that
the bank or lender acknowledges in writing that (a) it has received a copy of
this Agreement and (b) its sale of Voting Securities following foreclosure shall
be subject to Company's right of first refusal under Section 3.8 (as if such
bank or lender were Purchaser).
3.6 Allowed Transfers to Purchaser Affiliates. Holding,
Parent and Purchaser Affiliates may at any time transfer Voting Securities among
themselves, provided that in the reasonable opinion of counsel acceptable to
Company and Purchaser such transfer would have no clear, adverse impact of a
financial character on Company, and would not adversely affect the liabilities
and/or responsibilities of Purchaser to Company, and provided further that the
transferee shall agree in advance in writing to be bound by the terms of this
Agreement.
3.7 Allowed Transfers Upon Approved Business Disposition.
Purchaser may dispose of Voting Securities in conjunction with a merger or
consolidation in which Company is acquired, or in conjunction with a sale of all
or substantially all of Company's assets, provided a majority of the Board
approved such merger, consolidation, or sale.
3.8 Right of First Refusal. If during the term of this
Agreement, Purchaser desires to sell any Voting Securities pursuant to Section
3.2, 3.3, or 3.4, Company shall have a right of
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first refusal to purchase said Voting Securities in accordance with the
procedures set forth in Section 3.9 below.
3.9 Procedures for right of First Refusal. (a) If
Purchaser desires to sell to a third party all or part of its Voting Securities
pursuant to Section 3.4 above ("Private Sale"), or if Purchaser desires to sell
all or part of its Common Stock in the open market pursuant to Section 3.2 or
3.3 above ("Market Disposition Program"), Purchaser shall transmit to Company
and to each Unaffiliated Director a written notice ("Notice of Proposed Sale")
setting forth:
(i) if a Private Sale, (A) as to each Person to
whom such sale is proposed to be made: (1) the name, address and principal
business activity of such Person; (2) the number of shares of Voting Securities
proposed to be sold to such Person; (3) the manner in.which the sale is proposed
to be made; and (4) the price at which or other consideration for which, and the
material terms upon which, such sale is proposed to be made, and (B)
representing that the Private Sale is, to the best knowledge of Purchaser, bona
fide; and
(ii) if sales pursuant to a Market Disposition
Program: (A) the approximate date the sales are scheduled to commence; and (B)
the amount of Common Stock sought to be disposed of.
(b) Upon receipt of the Notice of Proposed Sale Company
shall have an option to purchase, in the case of a Private Sale, all but not
less than all of the Voting Securities proposed to be sold, and in the case of a
Market Disposition Program, all, if the Market Disposition Program is a firm
commitment public offering, or, if it is not such an offering, any part, of the
Common Stock proposed to be disposed of, on the following terms and conditions:
(i) If the option arises in connection with a
Private Sale, the purchase price shall be the price specified in the Notice of
Proposed Sale.
(ii) If the option arises in connection with a
Market Disposition Program, the purchase price per share of Common Stock shall
be the Twenty Day Average determined as if
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the day Purchaser delivers the Notice of Proposed Sale to Company is the closing
date of an issuance of securities by Company in the absence of any public
announcement.
(iii) If a majority of the Unaffiliated Directors
determine that it is in the best interests of Company to exercise the option,
they shall direct Company to send a written notice (the "Notice of Exercise") to
Purchaser within thirty (30) days after the Notice of Proposed Sale is received
by Company specifying the number of shares Company is purchasing; provided,
however, that in the case of a tender offer, Purchaser must receive the Notice
of Exercise not less than forty-eight (48) hours prior to the earlier of (A) the
expiration of the tender offer or (B) any date after which shares tendered may
be treated less favorably than shares tendered prior thereto. If approval of
such purchase by Company's shareholders is required by law or Company's Restated
Certificate of Incorporation, and if the Private Sale is in response to a tender
offer, Company shall waive its right of first refusal granted under Section 3.8;
otherwise, Company's Notice of Exercise shall be subject to receipt of such
shareholder approval, which Company shall use its best efforts to obtain as soon
as possible, and in any event within one hundred twenty (120) days after, the
date of the Notice of Exercise. Company's failure to obtain shareholder approval
within the one hundred twenty (120) day period shall give Purchaser the right to
proceed with the proposed sale under Section 3.9(c). If such repurchase is
subject to shareholder approval, Purchaser shall vote all its Voting Securities
in favor of the purchase.
(4) Upon Purchaser's receipt of the
Notice of Exercise, there shall be a binding agreement between Purchaser and
Company for the purchase and sale of the number of shares contained in the
Notice of Exercise. The closing of the purchase and sale shall occur on the
thirtieth Business Day following Purchaser's receipt of the Notice of Exercise.
At the closing Purchaser will deliver to Company certificates for the Voting
Securities to be sold, duly endorsed for transfer or accompanied by a duly
executed stock power, and Company will deliver to Purchaser the purchase price
as follows: if Company's purchase is following Purchaser's proposed Private
Sale, Company shall pay Purchaser the price specified in the Notice of Proposed
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Sale in the same manner (and the sale shall be upon the same terms) specified
therein, and if Company's purchase is following Purchaser's proposed Market
Disposition Program, Company shall pay Purchaser at the closing for the shares
purchased in immediately available funds; provided, however, that if Company
receives a Notice of Proposed Sale on or before the third anniversary of the
Effective Date, Company shall have the option to pay Purchaser by delivery at
the closing of ten percent (10%) of the purchase price in immediately available
funds, and the balance by delivery of a promissory note providing terms
specified in the next succeeding sentence; provided, further, that
notwithstanding the preceding proviso, if the Notice of Proposed Sale received
by Company on or before the third anniversary describes a proposed Private Sale
in response to a tender offer, Company shall pay the purchase price in the same
manner (and the sale shall be upon the same terms) specified in the Notice of
Proposed Sale. The promissory note shall provide for: fixed interest at a rate
equal to one percent (1%) greater than the weekly average yield on United States
Treasury securities adjusted to a constant maturity of ten years as determined
for the week prior to the week during which Company received the Notice of
Proposed Sale; equal annual installments including interest payable on each
anniversary of the closing in immediately available funds, with each installment
in an amount sufficient to amortize the promissory note in ten annual payments;
and for the entire unpaid balance including accrued and unpaid interest to be
payable on the fifth anniversary of the closing.
(5) Company may assign its right to
purchase the Voting Securities and may designate in the Notice of Exercise one
or more Persons to take title to all or any part of the Voting Securities, but
this shall not relieve Company of its obligation to pay the purchase price.
(c) If following receipt of a Notice of Proposed Sale
Company fails to give Purchaser a Notice of Exercise within the prescribed time
period, Purchaser shall be free to effect such sale on the following terms and
conditions:
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(i) if a Private Sale was proposed,
Purchaser may effect such sale at any time during the period ending one hundred
twenty (120) days after the date Company's Notice of Exercise was required to be
given, to the Person or Persons specified in the Notice of Proposed Sale for the
consideration and on the terms specified in said notice; and (ii) if a Market
Disposition Program was proposed, Purchaser may effect such sales at any time
during the period ending one hundred eighty (180) days after the date Company's
Notice of Exercise required to be given.
(d) If Purchaser does not make the sales within the
time periods provided above, the Voting Securities so proposed to be sold will
once again become subject to this Agreement to the same extent as if such sales
had not been proposed.
3.10 Purchaser's Covenants With Respect_to Distribution of
Shares. In any transaction or transactions under Section 3.2 or 3.3, Purchaser
shall use its best efforts, and shall cause any underwriter involved to use its
best efforts, to sell the Common Stock in the United States and in a manner
which will effect the.broadest possible distribution, with no sales to any one
person or group (as defined in the Exchange Act) in excess of 10% of the Common
Stock sold in such sale.
3.11 Company's Undertaking to-,File Reports and Cooperate in
Rule 144 Transactions. During the term of this Agreement, Company shall use its
best efforts to file, on a timely basis, all annual, quarterly and other reports
it is required to file under Sections 13 and 15(d) of the Exchange Act, and the
Rules and Regulations of the Commission thereunder, as amended from time to
time. In the event of any proposed sales of Common Stock by Purchaser under
Section 3.3, Company shall cooperate with Purchaser to enable such sales to be
made in accordance with applicable laws, rules and regulations, the requirements
of Company's transfer agent, and the reasonable requirements of the broker
through which the sales are proposed to be executed, and shall, upon request,
furnish unlegended certificates representing Common Stock in
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such numbers and denominations as Purchaser shall reasonably require for
delivery in connection with such sales.
ARTICLE IV
LEGENDS AND STOP TRANSFER ORDERS
4.1 Placement of Legends and Entry of Transfer Orders.
Purchaser agrees:
(a) that, within ten (10) Business Days after its
acquisition of any certificates evidencing Voting Securities (or, in the case of
Voting Securities currently owned by Purchaser, within ten (10) Business Days
after the date hereof) to submit such certificates to Company for placement on
the face thereof the following legends:
"The shares represented by this certificate are subject to the
restrictions on disposition set forth in and to the other provisions of
a Standstill Agreement dated as of _______________, 1986, among
[Company], [Holding] and [Parent]. Copies of such Agreement are on file
at the respective offices of [Company], [Holding] and [Parent].";
and such additional legends designed to ensure compliance with Federal and State
laws as counsel for Company may reasonably request; and
(b) to the entry of stop transfer orders with the
transfer agents of any such Voting Securities, against the transfer of such
legended certificates except in compliance with this Agreement.
4.2 Removal of Legends and Stop Transfer Orders. Company
agrees that it will, upon receipt of an opinion from its counsel that it is
appropriate so to do and upon the presentation to its transfer agent of the
certificates containing the legends provided for in Section 4.1(a), remove such
legends and withdraw the stop transfer orders provided for in Section 4.1(b)
with respect to such certificates, upon the earlier of the following:
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(a) any sale of the shares represented by such
certificates made under Section 3.2, 3.3 or 3.4; or
(b) termination of this. Agreement.
ARTICLE V
CERTAIN AGREEMENTS OF PURCHASER AND COMPANY
5.1 Future Actions. Purchaser shall not, unless the prior
written consent of the Board (in which a majority of the Unaffiliated Directors
shall concur) has been obtained, and then only to the extent express written
consent has been obtained:
(a) at any time before the expiration of five
(5) years after the Effective Date, solicit proxies or become a "participant" in
a "solicitation" (as such terms are defined in Regulation 14A under the Exchange
Act) in opposition to the recommendation of the majority of the directors on the
Board with respect to any matter; or
(b) deposit any Voting Securities in a voting
trust or subject them to a voting agreement or other arrangement of similar
effect; provided, however, that nothing in this Section 5.2 shall preclude
Purchaser from so depositing any Voting Securities to the extent required by
Netherlands laws or regulations, or if such trust, agreement or arrangement is,
and continues to be during the term of this Agreement, solely by and among
Holding, Parent and Purchaser Affiliates; or
(c) join a partnership, limited partnership,
syndicate or other group for the purpose of acquiring, holding or disposing of
Voting Securities within the meaning of Section 13(d) of the Exchange Act; or
(d) induce or attempt to induce any other Person
to initiate a tender offer for any securities of Company, or to effect any
change of control of Company, or take any action for the purpose of convening a
stockholders' meeting of Company; or
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(e) acquire, by purchase or otherwise, more than
1% of any class of equity securities of any entity which, prior to the time
Purchaser acquires more than 1% of such class, is publicly disclosed (by filing
with the Commission or otherwise) to be the beneficial owner of more than 5% of
any class of the Voting Securities; provided, that if Purchaser owns in the
aggregate in excess of 1% of any such entity, it shall divest such excess within
seven (7) days of acquiring such excess, and, provided further, that upon being
notified by Company in writing that an entity owns in excess of 5% of any class
of the Voting Securities, Purchaser shall affirm in writing to Company that
Purchaser does not own, in the aggregate, more than 1% of any class of equity
securities of such Person.
5.2 Acquisitions and Transfers in Contravention of
Agreement. Notwithstanding Company's rights to seek injunctions or other relief,
any Voting Securities acquired or transferred by Purchaser or contravention of
this Agreement may not be voted on any matter on which shareholders of Company
are entitled to vote.
5.3 Company's Issuance of Securities. During the term of
this Agreement, Company shall not issue any security (including without
limitation any Voting Security) which provide the holder(s) thereof with any
extraordinary or special voting rights or any right to veto any action of
Company, unless such issuance is approved in advance by a not less than eighty
percent (80%) vote of the Board. Further, Company shall not consider or approve
any such issuance prior to the Effective Date.
ARTICLE VI
BOARD OF DIRECTORS
6.1 Size of Board. On or before the Effective Date,
Company shall take all requisite action to increase the size of the Board by
four to thirteen and to appoint, effective as of the Effective Date, individuals
designated by Purchaser to fill the four new seats. The parties
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agree the size of the Board shall be reduced to and remain at twelve following
the first resignation therefrom following the Effective Date.
6.2 Terms. Purchaser shall advise Company on or before
the Effective Date which of the Affiliated Directors shall have terms expiring
at the annual meeting of shareholders of Company next following the Effective
Date, which shall have terms expiring at the second such annual meeting, and
which shall have terms expiring at the third such annual meeting. After the term
of any Affiliated Director expires, his or her successor shall serve a term of
three (3) years as provided in the Restated Certificate of Incorporation of
Company.
6.3 Proportional Representation.
(a) Company shall cause representatives
designated by Purchaser to be nominated for election to the Board so as to
provide Purchaser with representation on the Board proportionate to its share
ownership of Common Stock rounded down to the nearest whole number. With respect
to committees of the Board, Purchaser shall be entitled to be represented on any
committee with respect to which Purchaser requests representation.
(b) Purchaser shall vote its shares of Common
Stock so as to provide other Company shareholders with corresponding
proportionate representation. If, pursuant to the Restated Certificate of
Incorporation of Company, cumulative voting for the election of Company
directors is required, Purchaser may initially vote its shares to ensure that
its then proportionate number of Affiliated Directors are elected. Purchaser
agrees that, once its proportionate number of Affiliated Directors are elected,
Purchaser shall vote its shares of Common Stock so as to elect persons to the
Board who have been designated by the Unaffiliated Directors.
(c) Company shall use its best efforts to cause
a change in Board representation to be effected as soon as reasonably possible
following a change in Purchaser's share ownership. At Purchaser's request
Company shall cause such change to occur at the first Board meeting to be held
following a change in Purchaser's share ownership, which meeting shall
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be held not more than ninety (90) days following the change in Purchaser's share
ownership. Company may effect changes in Board representation by increase in the
size of the Board or by resignations or retirements of Board members.
Notwithstanding the foregoing, Purchaser's right to proportional Board
representation shall not cause the number of Affiliated Directors to (i)
decrease during the one year period during which Company has the right to
purchase Voting Securities under Section 2.5(a), or (ii) increase beyond 45%
during the six month period during which Company has the right to purchase
Voting Securities under Section 2.7(b)
6.4 Environmental Committee.
(a) Company shall cause a Public Policy
Committee of the Board to be established promptly after the Effective Date, and
to be continued thereafter during the term of this Agreement. The Public Policy
Committee shall be responsible to audit and recommend to the Board policies with
respect to Company health and safety,.environmental, insurance and real estate
affairs. The Committee's activities will include preparation of the job
description and interviewing the candidates for the position of Vice President
Environmental Affairs (discussed in (b) below), performing audits of and making
recommendations concerning existing and proposed Company real property sites and
insurance coverage,, consultation concerning budgets within the areas of the
Committee's responsibility, and review of approved lists of legal and other
consultants to provide services to Company in the areas of the Committee's
responsibility. Meetings of the Public Policy Committee shall be called on
notice by any member of the Committee, by the Chairman of the Board, and/or by
the Vice President-Environmental Affairs. The Chief Executive Officer shall be a
member of the Committee.
(b) Effective on the Effective Date, Company
shall create, and shall promptly thereafter fill and continue during the term of
this Agreement, a new job position to be known as Vice President-Environmental
Affairs. The Vice President shall be responsible for the health, safety and
environmental affairs of Company, both in the U.S. and Canada. The Vice
President shall report to Company's Chief Executive Officer.
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<PAGE> 25
ARTICLE VII
REGISTRATION RIGHTS
7.1 Duration of Registration Rights. Purchaser's rights
to have Company register shares of Common Stock provided in this Article VII
shall terminate upon termination of this Agreement. Rights of a Holder other
than Purchaser to have Company register shares of Common Stock provided in this
Article VII shall terminate two (2) years after Holder acquired its Common Stock
and shall survive termination of this Agreement during such two year period.
7.2 Demand Registration Covenant.
(a) If a Holder requests in writing that Company
register under the Act any Common Stock then owned by Holder, Company will use
its best efforts to cause the offering and sale to be registered as soon as
reasonably practicable. In connection therewith Company shall prepare and file a
registration statement under the Act on such form as Company shall determine to
be appropriate; provided, however, that Company shall not be obligated to file
more than one registration statement pursuant to this Section 7.2 during any
12-month period. The request shall specify the amount of Common Stock intended
to be offered and sold, shall express Holder's present intent to offer such
Common Stock for distribution, shall describe the nature or method of the
proposed offer and sale, and shall contain the undertaking of Holder to comply
with all applicable requirements of this Article VII.
(b) Upon receipt of a request for registration
under Section 7.2, Company will promptly give notice to all Holders other than
those initiating the request and provide a reasonable opportunity for such
Holders to participate in such registration. Any such other Holder must notify
Company in writing of its desire to participate, within thirty (30) days of
receipt of company's notice.
(c) Any request for registration under Section
7.2 must be for a firm commitment public offering to be managed by one or more
underwriters selected jointly by
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<PAGE> 26
Company and Holder(s) requesting registration. If, in the written opinion of the
underwriters, marketing factors require a limitation of the number of shares to
be underwritten, and if the total amount of securities that all Holders
(initiating and non-initiating) request pursuant to Section 7.2 to be included
in such offering exceeds the amount of securities that the underwriters
reasonably believe compatible with the success of the offering, Company shall
only be required to include in the offering the amount of Common Stock that the
underwriters believe will not jeopardize the success of the offering, and such
amount shall be allocated among such Holders in proportion to the respective
amounts of Common Stock proposed to be sold by each of the Holders. Any shares
of Common Stock that are so excluded from the underwriting shall be excluded
from the registration.
(d) If within ninety (9.0) days after receipt of
a request under Section 7.2(a) and any requests under Section 7.2(b) Company
shall have obtained (i) from Commission a "noaction" letter in which the
Commission has indicated that it will take no action if, without registration
under the Act, Holders dispose of the Common Stock covered by the request(s) in
the manner proposed or (ii) an opinion of its counsel (concurred in by counsel
for the requesting Holder(s)) that no registration under the Act is required,
Company need not comply with such request or request(s); provided, however, that
receipt of such "no-action" letter or opinion shall not constitute a
registration for the purpose of determining Company's obligations to Holders
under Section 7.2; and provided, further, that in such event counsel for Company
shall opine whether, by reason of the "no-action" letter or otherwise, the
removal of any legend from certificates representing all shares to which such
"no-action" letter or opinion refers is permissible, and, if so, Company shall
remove from such certificates all legends no longer required and shall rescind
any stop-transfer instructions previously communicated to its transfer agent
relating to such certificates.
7.3 Participation Registration Covenant. if Company shall
propose registration under the Act of an offering of Common Stock, Company shall
give prompt written notice of such
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<PAGE> 27
fact to each Holder and will use all reasonable efforts to cause the
registration of such number of shares of Common Stock then owned by Holders as
Holders shall request, within fifteen (15) days after receipt of such notice, to
be included, upon the same terms (including the method of distribution) of any
such offering; provided, however, that (a) Company shall not be required to give
notice or include such Common Stock in any such registration if the proposed
registration (i) is not a primary registration of securities by Company for its
own account, or (ii) is primarily (A) a registration of a stock option or
compensation plan or of securities issued or issuable pursuant to any such plan,
or (B) a registration of securities proposed to be issued in exchange for
securities or assets of, or in connection with a merger or consolidation with,
another corporation; (b) the offering of Common Stock by Holders shall comply
with Section 3.10 above; and (c) Company may, in its sole discretion and without
the consent of the Holders, withdraw such registration statement and abandon the
proposed offering.
7.4 Company's Obligations in Connection with
Registrations. In connection with any registration of Common Stock undertaken by
Company under Article VII, Company shall:
(a) furnish to Holders or their underwriter such
copies of any prospectus (including any preliminary prospectus) Holders may
reasonably request to effect the offering and sale, but only while Company is
required under the provisions hereof to cause the registration statement to
remain current;
(b) use its best efforts to qualify the offering
under applicable Blue Sky or other state securities laws to enable Holders to
offer and sell the Common Stock; provided, however, that Company shall not be
obligated to qualify as a foreign corporation to do business under the laws of
any jurisdiction in which it is not then qualified or to file any general
consent to service of process;
(c) furnish Holders, at the expense of Company,
with unlegended certificates representing ownership of the Common Stock being
sold in such numbers and denominations as Holders shall reasonably request,
meeting the requirements of the Principal Trading Market;
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<PAGE> 28
(d) use its best efforts to cause the
registration statement to remain current for thirty (30) days following its
effective date or such lesser period as the underwriters may agree; and
(e) instruct the transfer agent(s) and the
registrar(s) of Company's securities to release the stop transfer orders with
respect to the Common Stock being sold.
7.5 Conditions to Obligations Registration Covenants.
Company's obligations to register the Common Stock owned by Holders under
Article VII are subject to the following conditions.
(a) Company (upon the decision of a majority of
the Unaffiliated Directors) shall be entitled to postpone for up to ninety (90)
days the filing of any registration statement under Section 7.2, if at the time
it receives the request for registration such Unaffiliated Directors determine,
in their reasonable judgment, that such registration and offering would
materially interfere with any financing, acquisition, corporate reorganization
or other material transaction involving Company or any of its Affiliates.
Company shall promptly give Holders written notice of such determination.
(b) Company may require that the number of
shares of Common Stock offered for sale by Holders pursuant to a request for
registration under Section 7.3 be decreased or excluded entirely if, in the
opinion of Company's Investment Banking Firm, such reduction is desirable to
permit the orderly distribution and sale of the securities being offered. If
Company shall require such a reduction, Holders shall have the right to withdraw
from the offering.
(c) If Holders request registration pursuant to
Section 7.2, (i) the managing underwriter shall be an Investment Banking Firm
approved by Company (which approval will not be unreasonably withheld) and (ii)
Company will enter into an underwriting agreement containing representations,
warranties and agreements not materially different from those customarily
included in underwriting agreements with an issuer for a secondary distribution;
provided,
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<PAGE> 29
however, that Company will not be obligated to indemnify the underwriters on
terms materially different from those set forth in Section 7.8(a).
(d) Company may require, as a condition to
fulfilling its obligations under the registration covenants in Section 7.2 and
7.3, the indemnification agreements provided in Section 7.8(b) from Holders and
the underwriters.
(e) It shall be a condition precedent to the
obligations of Company to take action pursuant to this Article VII that each
Holder whose Common Stock is being registered, and each underwriter designated
by such Holder, will furnish to Company such information and materials as
Company may reasonably request and as shall be required in connection with the
action to be taken by Company. To the extent possible Holders shall provide
Company with any information and materials required to obtain acceleration of
the effective date of the registration statement.
(f) If, in the reasonable opinion of counsel to
Company it is necessary or appropriate for Company to comply with any applicable
rule, regulation, or release promulgated by the Commission, each Holder whose
Common Stock is being registered and any underwriter participating in such
public offering shall execute and deliver to Company an appropriate agreement,
in form satisfactory to counsel for Company, that such Holder or underwriter
will comply with all prospectus delivery requirements of the Act and with all
anti-stabilization, manipulation, and similar provisions of Section 10 of the
Exchange Act and any rules issued thereunder by the Commission, and will furnish
to Company information about sales made in such public offering.
(g) Holders of Common Stock included in the
registration statement shall not (until further notice) effect sales thereof
after receipt of written notice (which may include notice by telegraph) from
Company to suspend sales, to permit Company to correct or update a registration
statement or prospectus; provided, however, that the obligations of Company with
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<PAGE> 30
respect to maintaining any registration statement current and effective shall be
extended by a period of days equal to the period such suspension is in effect.
(h) At the end of the period during which
Company is obligated to keep any registration statement current and effective
(and any extensions thereof required by the preceding paragraph), and upon
receipt of notice from Company of its intention to remove from registration the
securities covered by such registration statement that remain unsold, Holders of
Common Stock included in the registration statement shall discontinue sales of
such Common Stock pursuant to such registration statement, and each such Holder
shall notify Company of the number of shares registered belonging to such Holder
that remain unsold promptly following receipt of such notice from Company.
(i) No Holder shall have any right to take any
action to restrain, enjoin, or otherwise delay any registration as the result of
any controversy that might arise with respect to the interpretation or
implementation of this Article VII.
7.6 Expenses.
(a) To the extent the expenses of registration
incurred in connection with a demand registration statement pursuant to Section
7.2 exceed the amount which Company would otherwise have incurred in its normal
Commission compliance work (which amount Company shall pay), all Holders
participating in such registration shall pay all such expenses including,
without limitation, all Commission and Blue Sky registration and filing fees,
printing expenses, fees and disbursements of legal counsel for Company and Blue
Sky counsel, transfer agents' and registrars' fees, fees and disbursements of
experts used by Company in connection with such registration, and expenses
incidental to any post-effective amendment to any such registration statement.
Further, such participating Holders shall pay all underwriting discounts,
commissions and expenses, fees and disbursements of their counsel and
accountants, and expenses of any special audits of Company incidental to or
required in connection with such registration.
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(b) In connection with any registration pursuant
to Section 7.3, Company shall pay all Commission and Blue Sky registration and
filing fees, underwriting discounts, commissions and expenses, printing
expenses, fees and disbursements of legal counsel for Company and Blue Sky
counsel, transfer agents' and registrars' fees, fees and disbursements of
experts used by Company in connection with such registration, expenses of any
special audits of Company incidental to or required by such registration, and
expenses incidental to any post-effective amendment to any such registration
statement, except to the extent the aggregate of such costs exceeds the amount
which Company would have expended in conducting an offering of only the shares
sold by it, and the participating Holders pro rata shall pay such excess based
on the number of shares of Common Stock offered by each pursuant to such
registration statement. Such Holders shall pay all expenses directly
attributable to the inclusion in the offering of Common Stock being sold by the
Holders, including without limitation fees and disbursements of their own
counsel and accountants.
7.7 Assignability of Registration Rights. The
registration rights afforded Purchaser in this Article VII shall be assignable
to a transferee of.Common Stock from Purchaser so long as (i) such transferee
has acquired not less than 750,000 shares of Common Stock (as adjusted from time
to time to reflect stock splits, stock dividends and similar changes in the
capitalization of Company) from Purchaser, (ii) such transferee has agreed with
Company in writing to comply with all applicable provisions of this Article VII,
and (iii) Purchaser has otherwise complied with all provisions of this Agreement
which affect its right to sell, transfer or otherwise dispose of shares of
Common Stock. For a transfer of registration rights to be effective, Purchaser
shall give Company written notice at the time of such transfer stating the name
and address of the transferee and identifying the shares with respect to which
the rights under this Article VII are being assigned.
7.8 Indemnification.
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(a) In the case of each registration effected by Company
pursuant to Section 7.2 or 7.3, to the extent permitted by law Company
("indemnifying party") agrees to indemnify and hold harmless each Holder, its
officers and directors, and each underwriter within the meaning of Section 15 of
the Act, against any and all losses, claims, damages, liabilities or actions to
which they or any of them may become subject under the Act or any other statute
or common law, including any amount paid in settlement of any litigation,
commenced or threatened, if such settlement is effected with the written consent
of Company, and to reimburse them for any legal or other expenses incurred by
them in connection with investigating any claims and defending any actions,
insofar as any such losses, claims, damages, liabilities or actions arise out of
or are based upon (i) any untrue statement or alleged untrue statement of a
material fact contained in the registration statement relating to the sale of
such shares, or any post-effective amendment thereto, or the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, (ii) any untrue
statement or alleged untrue statement of a material fact contained in any
preliminary prospectus, if used prior to the effective date of such registration
statement, or contained in the final prospectus (as amended or supplemented if
Company shall have filed with the Commission any amendment thereof or supplement
thereto) if used within the period during which Company is required to keep the
registration statement to which such prospectus relates current under Section
7.4(d) (including any extensions of such period as provided in Section 7.5.(g)),
or the omission or alleged omission to state therein (if so used) a material
fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading; provided, however, that the
indemnification agreement contained in this Section 7.8(a) shall not (x) apply
to such losses, claims, damages, liabilities or actions arising out of, or based
upon, any such untrue statement or alleged untrue statement, or any such
omission or alleged omission, if such statement or omission was made in reliance
upon and in conformity with information furnished to Company by such Holder or
underwriter for use in connection with preparation of the registration
statement, any preliminary prospectus or final prospectus contained in the
registration
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<PAGE> 33
statement, or any amendment or supplement thereto, or (y) inure to the benefit
of any underwriter or any Person controlling such underwriter, if such
underwriter failed to send or give a copy of the final prospectus to the Person
asserting the claim at or prior to the written confirmation of the sale of such
securities to such Person and if the untrue statement or omission concerned had
been corrected in such final prospectus.
(b) In the case of each registration effected by Company
pursuant to Section 7.2 or 7.3 above, each Holder and each underwriter of the
shares to be registered (each such party and such underwriters being referred to
severally as an "indemnifying party") shall agree in the same manner and to the
same extent as set forth in Section 7.8(a) to indemnify and hold harmless
Company, each Person (if any) who controls., Company within the meaning of
Section 15 of the Act, the directors of Company and those officers of Company
who shall have signed any such registration statement, with respect to any
untrue statement or alleged untrue statement in, or omission or alleged omission
from, such registration statement or any post-effective amendment thereto or any
preliminary prospectus or final prospectus (as amended or supplemented, if
amended or supplemented) contained in such registration statement, if such
statement or omission was made in reliance upon and in conformity with
information furnished to Company by such indemnifying party for use in
connection with the preparation of such registration statement or any
preliminary prospectus or final prospectus contained in such registration
statement or any such amendment or supplement thereto.
(c) Each indemnified party will, promptly after receipt
of written notice of the commencement of an action against such indemnified
party in respect of which indemnity may be sought under this Section 7.8, notify
the indemnifying party in writing of the commencement thereof. In case any such
action shall be brought against any indemnified party and it shall so notify an
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate therein and to the extent it may wish, jointly with any
other indemnifying party
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<PAGE> 34
similarly notified, to assume the defense thereof with counsel satisfactory to
such indemnified party, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party under this
Section 7.8 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation. The indemnity agreements in this Section 7.8 shall be in
addition to any liabilities which the indemnifying parties may have pursuant to
law.
ARTICLE VIII
TERMINATION
8.1 Termination. This Agreement shall terminate upon the
earliest to occur of the following:
(a) Purchaser's completion of a tender offer in
accordance with Section 2.11; or
(b) the date Purchaser owns in the aggregate
less than ten percent (10%) of the then Common Stock Equivalents; or
(c) if elected by Purchaser, exercisable upon
delivery of written notice thereof to Company, upon the failure of Company to
comply with its obligations under (i) this Agreement and cure of such failure
does not occur within thirty (30) days after Purchaser gives written notice of
such failure to Company or (ii) Section 2 or 3(a) of the Indemnity Agreement
dated the date of this Agreement between Company, Purchaser, and Subsidiary, and
cure of such failure does not occur within fifteen (15) days after Purchaser
gives written notice of such failure; or
(d) if elected by Company, exercisable upon
delivery of written notice thereof to the Purchaser, upon the failure of
Purchaser to comply with its obligations under this Agreement and cure of such
failure does not occur within thirty (30) days after Company gives written
notice of such failure to Purchaser.
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<PAGE> 35
8.2 Extended Cure Period. Notwithstanding Sections
8.1(c)(i) and 8.1(d) (but not Section 8.1(c)(ii)), the parties agree that if the
nature of the failure requires that more than thirty (30) days are necessary to
cure, this Agreement shall not terminate if the failing party commences a cure
within the thirty (30) day period and thereafter continuously and diligently
pursues all steps necessary to cure the failure up to and including completion
of the cure; provided, however, that this Section 8.2 shall not apply to
Company's failure to sell at the time provided shares of Common Stock to
Purchaser under Section 2.4 or 2.6.
8.3 Termination of One Party's Obligations. In lieu of
terminating this Agreement upon a breach by the other party under Section 8.1(c)
or 8.1(d), the party not in breach may notify the other that, upon expiration of
said notice period (subject to Section 8.2), all rights of the defaulting party
hereunder shall cease but all of the defaulting party's obligations hereunder
shall continue in full force and effect.
ARTICLE IX
REPRESENTATIONS AND WARRANTIES
9.1 Of Company. Company hereby represents and warrants to
each of Holding and Parent as follows:
(a) Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware,
with corporate power to own its properties and to conduct its business as now
conducted.
(b) The authorized capital stock of Company
consists of (i) 14,000,000 shares of Common Stock, of which at the date of this
Agreement, 5,675,989 shares were validly issued and outstanding, fully paid and
nonassessable and 1,292,090 shares were held in the Company's treasury, and (ii)
750,000 series preferred shares, no par value, of which, at the date of this
Agreement, no shares were issued and outstanding. In addition, at the date of
this Agreement, an aggregate of 172,967 shares of Common Stock (including
authorized but unissued
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<PAGE> 36
shares and treasury shares) were reserved for issuance pursuant to presently
existing options and future options under currently existing stock option plans.
There are outstanding no other options, warrants, rights or convertible
securities providing for the issuance of Company capital stock.
(c) Company has full legal right, power and
authority to enter into and perform this Agreement, and the execution and
delivery of this Agreement by Company and the consummation of the transactions
contemplated hereby have been duly authorized by the Board and require no other
Board or stockholder action. This Agreement constitutes a valid and binding
agreement of Company. Neither this Agreement nor the performance of this
Agreement by Company, Holding or Parent violate Company's Restated Certificate
of Incorporation.
9.2 Of Holding and Parent. Each of Holding and Parent
hereby represents and warrants to Company as follows: (a) Holding and Parent are
corporations duly organized, validly existing and in good standing under the
laws of the Netherlands, with corporate power to own its properties and to
conduct its business as now conducted. (b) Each has full legal right, power and
authority to enter into and perform this Agreement, and the execution and
delivery of this Agreement by each and the consummation of the transactions
contemplated hereby have been duly authorized by the Board of Directors of each
and require no other Board of Directors or stockholder action of either. This
Agreement constitutes a valid and binding agreement of each of Holding and
Parent.
ARTICLE X
MISCELLANEOUS
10.1 Specific Enforcement. The parties hereto acknowledge
and agree that each would be irreparably damaged if any of the provisions of
this Agreement are not performed by the other in accordance with their specific
terms or are otherwise breached. It is accordingly agreed that each party shall
be entitled to an injunction or injunctions to prevent breaches of this
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<PAGE> 37
Agreement by the other and to enforce this Agreement and the terms and
provisions hereof specifically against the other in any action instituted in the
United States District Court for the Western District of Washington, in addition
to any other remedy to which such aggrieved party may be entitled at law or in
equity. Company and Purchaser each consents to personal jurisdiction in any such
action brought in the United States District Court for the Western District of
Washington.
10.2 Severability. If any term or provision of this
Agreement is held by a court of competent jurisdiction or other authority to be
invalid, void, unenforceable or against its regulatory policy, the remainder of
the terms, provisions, covenants and restrictions of this Agreement shall remain
in full force and effect and shall in no way be affected, impaired or
invalidated.
10.3 Expenses. Except as otherwise provided herein, each
party hereto shall pay its own expenses in connection with this Agreement.
10.4 Assignment; Successors. This Agreement shall be
binding upon and shall inure to the benefit of and be enforceable by the
successors of the parties hereto. Except as otherwise provided herein, this
Agreement shall not be assignable.
10.5 Amendments. This Agreement may not be modified,
amended, altered or supplemented except by a written agreement signed by
Company, Holding, and Parent which shall be authorized by all necessary
corporate action of each party. Any party may waive any condition to the
obligations of any other party hereunder.
10.6 Notices. Every notice or other communication required
or contemplated by this Agreement to be given by a party shall be delivered
either by (a) personal delivery, (b) courier mail, (c) facsimile mail, or (d)
"tested" telex (a telex for which the proper answer back has been received)
addressed to the party for whom intended at the following address:
To Company: Univar Corporation
1600 Norton Bldg.
Seattle, WA 98104
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<PAGE> 38
Attention: N. Stewart Rodgers
Telex No.: 32-8736
Answer Back: ARTHURANDER SEA
With a copy to: Preston Thorgrimson Shidler Gates & Ellis
5000 Columbia Seafirst Center
701 Fifth Avenue
Seattle, WA 98101
To Holding and
Parent: Pakhoed Holding N.V.
P.O. Box 863
3000 AW Rotterdam, The Netherlands
Attention: H. Goemans
Telex No.: 22112
Answer Back: PAKR NL
With a copy to: Graham & James
One Maritime Plaza, Suite 300
San Francisco, CA 94111
Attention: Nicholas C. Unkovic, Esq.
Telex No.: 67565
Answer Back: GJ SFO
or at such other address as the intended recipient previously shall have
designated by written notice to the other parties. Notice by courier mail shall
be effective on the date it is officially recorded as delivered to the intended
recipient by return receipt or equivalent. All notices and other communications
required or contemplated by this Agreement delivered in person or sent by
facsimile mail or "tested" telex shall be deemed to have been delivered to and
received by the addressee and shall be effective on the date of personal
delivery or on the date sent, respectively. Notice not given in writing shall be
effective only if acknowledged in writing by a duly authorized representative of
the party to whom it was given.
10.7 Attorneys' Fees. If any action or proceeding shall be
commenced to enforce this Agreement or any right arising in connection with this
Agreement, the prevailing party in such action or proceeding shall be entitled
to recover from the other party the reasonable attorneys'
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<PAGE> 39
fees, costs and expenses incurred by such prevailing party in connection with
such action or proceeding.
10.8 Integration. This Agreement contains the entire
understanding of the parties with respect to its subject matter. There are no
restrictions, agreements, promises, warranties, covenants or undertakings other
than those expressly set forth herein with respect to any matter.
10.9 Waivers. No failure or delay on the part of either
party in the exercise of any power, right or privilege hereunder shall operate
as a waiver thereof, nor shall any single or partial exercise of any such power,
right or privilege preclude other or further exercise thereof or of any other
right, power or privilege. All rights and remedies existing under this Agreement
are cumulative to, and not exclusive of, any rights or remedies otherwise
available.
10.10 Governing Law. This Agreement shall be governed by
and construed in accordance with the substantive law of the State of Washington
without giving effect to the principles of conflict of laws.
10.11 Counterparts. This Agreement may be executed-, in
one or more counterparts, each of which shall be deemed to be an original, but
all of which together shall constitute one and the same instrument.
10.12 Cooperation. The parties hereto shall each perform
such acts, execute and deliver such instruments and documents, and do all such
other things as may be reasonably necessary to accomplish the transactions
contemplated in this Agreement.
IN WITNESS WHEREOF, Company, Holding, and Parent have caused
this Agreement to be executed as of the date first above written.
UNIVAR CORPORATION
BY: _______________________________
ITS: ______________________________
PAKHOED HOLDING N.V.
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BY:________________________________
ITS: ______________________________
PAKHOED INVESTERINGEN B.V.
BY:________________________________
ITS: ______________________________
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<PAGE> 41
EXHIBIT A
LIST OF CORE SHAREHOLDERS
<TABLE>
<CAPTION>
Names Number of Shares Owned
----- ----------------------
<S> <C>
James W. & Maureen Bernard 81,500
Richard E. & Gail J. Engebrecht 50,000
Milton M. & Lorraine D. Harris 98,767
Curtis P. & Mary B. Lindley 104,734
Nat S. & Marian W. Rogers 82,800
N. Stewart & Jane S. Rogers 155,584
Robert S. & Gloria D. Rogers 128,664
James H. & Ann R. Wiborg 207,961
</TABLE>
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<PAGE> 1
April 12, 1996
Royal Pakhoed N.V.
333 Blaak
3011 GB Rotterdam
The Netherlands
Re: Confidentiality and Standstill Agreement
Gentlemen:
In connection with your consideration of a possible transaction
involving you, which shall include Royal Pakhoed N. V. and all your "affiliates"
and "associates" (as such terms are defined in Rule 12b-2 of the Securities
Exchange Act of 1934 (the "Act")), (also collectively referred to as "Pakhoed")
and Univar Corporation ("Univar"), certain financial, operational and other
information concerning Univar is being and will be furnished to you and to your
directors, officers, employees, agents, and professional advisors.
As a condition to furnishing such information, you agree, as set forth
below, to (1) keep confidential such information and any other information
Univar or its representatives furnish to you, whether furnished before, on, or
after the date of this Confidentiality and Standstill Agreement ("Agreement"),
together with analyses, compilations, studies or other documents or records
prepared by you or others, which contain or reflect or are generated from
information supplied by Univar or its representatives (collectively referred to
as "Evaluation Material") and (2) the other matters contained in this Agreement.
You agree that the Evaluation Material will be used solely for the
purpose described above and that such Evaluation Material will be kept
confidential by you; provided, however, that any of such information may be
disclosed to your directors, officers, employees, agents, and professional
(collectively referred to as "your representatives"). It being understood that
prior to any disclosure of Evaluation Material, each of your representatives
shall be informed by you of the terms of this Agreement and of the confidential
nature of the Evaluation Material. Each of your representatives shall execute a
written agreement acceptable to Univar agreeing (i) to keep the Evaluation
Material confidential and to use it only in connection with the purpose
described above and (ii) to the other terms of this Agreement. You shall be
responsible for any breach of this Agreement by you or any of your
representatives.
Without the prior written consent of Univar, you will not disclose and
will direct your
<PAGE> 2
Confidentiality and Standstill Agreement
April 12, 1996
Page 2
representatives not to disclose, to any person other than Pakhoed and your
representatives, the fact that the Evaluation Material has been made available
to you, the fact that Univar and Pakhoed are considering a transaction, or any
information with respect to the discussions including the status thereof. The
term "person" as used in this Agreement shall be broadly interpreted to include,
without limitation, any corporation, company, partnership, or individual.
If you or any of your representatives are legally compelled to disclose
Evaluation Material which is subject to this Agreement, you will provide Univar
with prompt notice so that Univar may seek a protective order or other
appropriate remedy and/or waive compliance with this Agreement. In the event
that such protective order or other remedy is not obtained, or if Univar waives
compliance with the provisions of this Agreement, you will furnish only such
information as you are advised is legally required and will exercise your best
efforts to obtain assurance that confidential treatment will be accorded any
Evaluation Material which is compelled to be disclosed.
In the event Univar and Pakhoed do not complete the transaction
indicated above, you and your representatives will, upon the request of Univar,
either (1) promptly deliver to Univar all Evaluation Material, without retaining
any copy, extract, or reproduction thereof, or (2) promptly destroy all
Evaluation Material in your or your representatives' possession, and such
destruction shall be certified in writing to Univar by the person supervising
such destruction.
You understand that Univar does not make any representation or warranty
as to the accuracy or completeness of the Evaluation Material. You agree that
Univar and its officers, directors, employees, agents, or representatives shall
not have any liability hereunder to Pakhoed or any of your representatives
resulting from the use of the Evaluation Material by Pakhoed or your
representatives.
You agree to indemnify, defend, and hold Univar, its subsidiaries, and
their respective directors, officers, employees, agents and representatives
harmless from and against any losses, claims, damages or liabilities arising out
of breach of this Agreement by you or your representatives and will reimburse
Univar, its subsidiaries, and their respective directors, officers, employees,
agents, and representatives for all expenses (including counsel fees) incurred
in connection therewith. The obligations set forth in this paragraph shall
survive the termination of this Agreement.
You further acknowledge that subject to the satisfaction of Section 1.3
of the Tender Offer Protocol attached as Exhibit B (the "Protocol"), the
Evaluation Material is being furnished to you in consideration of your agreement
that for an initial period ending October 30, 1996 you will not, without the
prior written consent of the Company, (i) acquire any stock or other securities
of the Company, other than as permitted by that certain Standstill Agreement
dated September 19, 1986 (as amended June 3, 1992 and referred to herein as the
"Standstill Agreement") but specifically excluding the right to make a tender
offer pursuant to Section 2.10 of such Standstill Agreement (ii), submit to the
Company or any other person any proposal for a
<PAGE> 3
Confidentiality and Standstill Agreement
April 12, 1996
Page 3
transaction between you and the Company or involving any of its security holders
other than in accordance with the Protocol, (iii) solicit proxies or shareholder
consents with respect to securities of the Company or become a "participant" in
any "solicitation" or a member of a "group" (as such terms are used in
Regulation 14A and Section 13(d)(3) of the Act)in opposition to the
recommendation of the majority of the Unaffiliated Directors (as defined in the
Standstill Agreement), or (iv) otherwise assist, advise, encourage or act alone
or in concert with any other person in acquiring or attempting to acquire,
directly or indirectly, control of the Company or its assets. If the conditions
of Sections 2.1 and 2.2 of the Protocol are satisfied, the term of the
standstill provisions of this Agreement shall automatically extend to April 30,
1998. The parties further agree that if a tender offer is not consummated at any
time in accordance with the protocol, that Pakhoed will not ask to make a new
proposal, renew the current proposal or seek to modify or amend this agreement
until after February 28, 1997.
You acknowledge and agree that Univar would not have an adequate remedy
at law and would be irreparably harmed in the event that any of the provisions
of this Agreement was not performed in accordance with its specific terms or was
otherwise breached. It is accordingly agreed that Univar shall be entitled to
injunctive relief to prevent breaches of this Agreement and to specifically
enforce the terms and provisions hereof, in addition to any other remedy to
which it may be entitled at law or in equity. It is further understood and
agreed that no failure to or delay in exercising any right, power, or privilege
hereunder shall operate as a waiver thereof, and no single or partial exercise
thereof shall preclude any other or further exercise thereof or the exercise of
any right, power, or privilege hereunder. You agree to pay all costs and
expenses, including counsel fees, incurred by Univar in case any such action is
brought by it.
You agree and consent to personal jurisdiction and venue in any action
brought in any court, federal and state, within the state of Washington having
subject matter jurisdiction, in connection with any matter arising under this
Agreement. This Agreement shall be governed by and construed in accordance with
the laws of the State of Washington applicable to agreements made and to be
performed within such state.
Except as otherwise indicated, your obligations under this Agreement
shall terminate as of April 30, 1998.
[the remainder of this page has been intentionally left blank]
<PAGE> 4
Confidentiality and Standstill Agreement
April 12, 1996
Page 4
Except as modified herein all other terms and conditions of the
Standstill Agreement shall remain in full force and effect through the term of
this Agreement and thereafter as provided for in the Standstill Agreement.
Univar agrees that the provisions of this Agreement are not intended to inhibit
the ability of any legal counsel which has been approved as one of your
representatives to represent Pakhoed as its legal advisors; provided, however,
that said counsel shall at all times comply with the provisions of this
Agreement.
Very truly yours,
UNIVAR CORPORATION
Paul H. Hough
President
AGREED AND ACCEPTED this ___ day of April, 1996:
Royal Pakhoed N.V.
By:______________________________
Its:_____________________________
Pakhoed USA, Inc.
By:______________________________
Its:_____________________________
Pakhoed Investeringen B.V.
<PAGE> 5
Confidentiality and Standstill Agreement
April 12, 1996
Page 5
By:______________________________
Its:_____________________________
<PAGE> 6
Confidentiality and Standstill Agreement
April 12, 1996
Page 6
EXHIBIT A
APPROVED REPRESENTATIVES OF PAKHOED
[INTENTIONALLY OMITTED]
<PAGE> 7
Confidentiality and Standstill Agreement
April 12, 1996
Page 7
EXHIBIT B
TENDER OFFER PROTOCOL
APRIL 12, 1996
STEP I:
1.1 Execution of a unanimous consent of the Univar Board of Directors
authorizing the Special Committee to negotiate with Pakhoed subject to approval
by the full Board of Directors.
1.2 No later than 11:00 A.M., Friday April 12, 1996, Pakhoed and Univar
shall execute the Confidentiality and Standstill Agreement to which this Exhibit
shall be attached which establishes an initial standstill through October 31,
1996 equivalent to the 1986 standstill between Univar and Pakhoed; provided that
this initial standstill provision will become effective only upon satisfaction
of Section 1.3.
1.3 An agreement on a mutually acceptable range of the per share tender
offer price shall be reached and confirmed in writing no later than 4:00 P.M.
Saturday, April 13, 1996. Upon such agreement the initial standstill provisions
shall become automatically effective. If no agreement is reached as to an
acceptable range of the per share tender offer, then the standstill provisions
of this Agreement shall not apply, but the confidentiality provisions shall
apply including without limitation an understanding and agreement that the
discussions relating to price ranges and other matters discussed during April 10
through April 13 are subject to such confidentiality provisions.
1.4 Agreement that due diligence will be conducted only in accordance
with a mutually acceptable written agreement. It is specifically agreed that
Mark Hooper shall not participate in due diligence, negotiations, strategic
advise, consulting or any other role in connection with the transactions
contemplated by this protocol.
STEP II:
2.1 An environmental due diligence agreement shall be executed no later
than April 25, 1996.
2.2 A minimum acceptable tender offer price per Univar Common Share
shall be approved by the Special Committee no later than April 30, 1996.
2.3 After satisfaction of Section 2.1 (execution of a due diligence
agreement) and Section 2.2 (agreement on minimum tender offer price), the
standstill provisions shall
<PAGE> 8
Confidentiality and Standstill Agreement
April 12, 1996
Page 8
automatically extend to April 30, 1998 and there will be no further price
negotiations. If either or both of Sections 2.1 and 2.2 are not satisfied by
April 30, 1996 the initial standstill provision shall remain in effect until
October 31, 1996..
2.4 Any proposal shall be strictly in accordance with all the terms and
conditions of the Standstill Agreement, including without limitation the
"Requirement for Tender Offers" as set forth in Section 2.11 of the Standstill
Agreement; provided that (a) the Univar Board has not exercised its fiduciary
duty to accept or recommend a better offer pursuant to Section 4.5 and
(b)Pakhoed has entered into a Merger Agreement to acquire the non-tendered
shares pursuant to Section 4.3 then the minimum number of Univar shares tendered
and accepted in the Tender Offer, together with the Univar shares owned by
Pakhoed, need only exceed a simple majority of the outstanding Univar shares as
of the closing of the Tender Offer. All other material terms and conditions of
any such tender offer and the form of the proposed Merger Agreement shall have
been disclosed and shall be acceptable to Univar's counsel no later than April
30, 1996.
2.5 Subject to the satisfaction of the fiduciary duties of the Univar
Board of Directors, Univar will consent to and/or encourage the execution of
agreements by a sufficient number of large Univar shareholders to assure
satisfaction of the minimum tender offer acceptances required by Section 2.4. It
is secifically understood that such agreements will permit the signing
shareholder to accept a higher offer pursuant to Section 4.5.
STEP III:
3.1 If an initial tender offer is approved by the Special Committee,
environmental due diligence shall be conducted by Pakhoed and your
representatives only as permitted by the Due Diligence Agreement referred to in
Section 1.4.
3.2 Both Pakhoed and Univar shall recognize as a moral and legal
obligation all existing rights of Univar officers and other employees including
the rights to receive the benefits of all outstanding stock options and payments
and benefits provided for in the Change of Control Agreements regardless of
provisions in the Change of Control Agreements which might be interpreted as
limiting those rights. No later than April 30, 1996 Pakhoed and Univar shall
mutually agree upon the estimated net after-tax cost (i.e., federal income tax
benefits to the surviving entity and federal excise tax costs, if any, to the
employees) of making the stock options and other change of control benefits
available to the Univar employees with indemnification against any excise tax.
In recognition of the fairness and mutual benefits of sharing these costs, the
tender offer price shall be reduced by fifty percent (50%) of such after-tax
cost determined on a fully diluted per share basis. Any adjustment required by
this Section shall be reflected in the per share tender offer referred to in
Section 2.2.
3.3 The full Univar Board shall review the proposal and related matters
in a continuation of the regular May 2 Board meeting. The continuation meeting
will be held on the afternoon of May 2 at a location outside of Kirkland.
Pakhoed directors may attend but will be
<PAGE> 9
Confidentiality and Standstill Agreement
April 12, 1996
Page 9
expected to excuse themselves after an initial presentation.
3.4 All environmental due diligence shall be completed no later than
May 24, 1996. Pakhoed shall advise the Special Committee of its decision to
proceed or not to proceed with a tender offer no later than May 30, 1996. If the
answer is no the Standstill stays in effect until April 30, 1998 and the ban on
proposals and new negotiation stays in effect until after February 28, 1997.
STEP IV:
4.1. If the answer is yes, a special board meeting will be held on May
31, 1996 and a Merger Agreement setting forth the definitive terms and
conditions shall be executed no later than June 3, 1996. A press release shall
be issued only after execution of the Merger Agreement.
4.2 The tender offer will commence within five (5) business days after
the initial announcement and will stay open for a minimum of thirty (30)
business days after the initial announcement (July 15 assuming a June 3
announcement). The tender offer will be completed no later than July 31, 1996.
Payment for the shares is required to be made promptly after completion.
4.3 Pakhoed will be contractually obligated pursuant to the Merger
Agreement to promptly follow any Tender Offer which is accepted by the minimum
number of shares as required by Section 2.4 which shall also represent a simple
majority of the outstanding shares as of the close of the Tender Offer with a
cash merger for the remaining untendered shares at the final per share tender
offer price.
4.4 Pakhoed will have an opportunity to negotiate employment agreements
with a mutually acceptable number of key executives prior to the execution of
the Merger Agreement and commencement of the Tender Offer, however the execution
of such agreements shall not be a condition to the Tender Offer and the failure
to secure such agreements shall not effect the April 30 1998 standstill
agreement.
4.5 The Univar Board will agree not to solicit other bids but will not
be restricted from considering (including providing information comparable to
that provided to Pakhoed) or accepting another unsolicited higher cash offer for
all of the outstanding Univar Common Shares. If another acquisition proposal is
approved by the Univar Board Pakhoed shall have the right to modify its tender
offer as permitted by Section 2.7 of the Standstill Agreement.
4.6 Any modification of the foregoing protocol or related dates must be
approved in writing by the Chairman of the Special Committee and a designated
representative of Pakhoed.
4.7 If either the October 31, 1996 or April 30 1998 standstill
provisions become effective in accordance with this letter agreement such
provisions will stay in effect if the tender
<PAGE> 10
Confidentiality and Standstill Agreement
April 12, 1996
Page 10
offer is not completed in accordance with the foregoing protocol and time
schedule and Pakhoed further agrees that it will not ask to make a new proposal,
renew the current proposal or seek to modify or amend this agreement until after
February 28, 1997; provided that, if the Univar Board fails to approve a tender
offer which has been approved by the Special Committee and is otherwise made in
accordance with this protocol and all previously disclosed and mutually agreed
terms and conditions, the standstill provisions of this Agreement will be
terminated as of October 31, 1996, but thereafter the present Standstill
Agreement shall remain in effect.
<PAGE> 1
SHAREHOLDER AGREEMENT
May 31, 1996
Koninklike Pakhoed, N.V.
333 Blaak
3011 G.B. Rotterdam
The Netherlands
Gentlemen:
In consideration for the proposed tender offer for shares of Common
Shares of Univar Corporation ("Company") to be made by a subsidiary of yours
(the "Buyer") and to be followed by the merger of Company with Buyer (the
"Merger"), the undersigned agrees that, in its capacity as a shareholder of
Company, it will:
(a) tender all shares of Company Common Shares held of record or
beneficially by it (representing all shares as to which the
undersigned has sole or shared voting power) as of the date
hereof or hereinafter acquired to Buyer pursuant to Buyer's
proposed Offer to Purchase Shares;
(b) provide all consents and approvals pursuant to the Distributor
Agreement by and between the undersigned and Van Waters &
Rogers, Inc., dated March 8, 1996, required to consummate the
Merger and the transactions contemplated by the Agreement and
Plan of Reorganization among you, Company and Buyer; and
(c) only at your request, (i) exercise its option to purchase all
or such portion required of the 101,874 shares of Series A
Junior Participating Convertible Preferred Shares (the
"Preferred Shares"), which the undersigned is entitled to
purchase pursuant to the Amended and Restated Agreement of
Purchase and Sale of Stock (the "Stock Purchase Agreement")
entered into by and between the undersigned and Company, dated
May 13, 1994, (ii) convert all the Preferred Shares the
undersigned acquired pursuant to the Stock Purchase Agreement
into Company Common Shares, and (iii) tender all shares of
Company Common Shares acquired pursuant to such conversion of
the Preferred Shares to Buyer pursuant to Buyer's proposed
Offer to Purchase Shares. If such request is not made and the
option is not exercised, you will pay to us or cause the
surviving corporation to pay us on consummation of the Merger,
the difference between the aggregate exercise price of the
option to acquire the Preferred Shares and the aggregate price
that would have been paid in the tender offer for the shares
of Common Shares which would have been issued pursuant to the
conversion of the Preferred Shares.
<PAGE> 2
Notwithstanding any other provision of this letter, the undersigned
will be relieved of its obligations under paragraphs (a), (b) and (c) above if
(i) a competing offer to purchase the Company and/or its shares of Common Shares
at a price greater than $19.45 per share is made by a third party prior to
consummation of the Merger, or (ii) Buyer's price for the purchase of the
undersigned's shares of Common Stock pursuant to the Offer to Purchase is
adjusted to a price which is less than $19.45 per share.
Sincerely yours,
THE DOW CHEMICAL COMPANY
By: /s/ Michael D. Parker
----------------------
Name: Michael D. Parker
Title: Group Vice President
<PAGE> 1
FORM OF
DIRECTOR AND OFFICER AGREEMENT
May 31, 1996
Royal Pakhoed N.V.
Blaak 333
3011 GB Rotterdam
The Netherlands
Gentlemen:
In consideration for the proposed business combination in which Univar
Corporation ("Company") will be merged with an indirect wholly owned subsidiary
("Buyer") of Royal Pakhoed N.V. ("Parent") (the "Merger"), the undersigned
Company officer or member of the Board of Directors of Company hereby agrees
that subject to the discharge of his fiduciary responsibilities, in his capacity
as an officer and/or a member of the Board of Directors, he will, as applicable:
(a) vote in favor of the Merger, and the execution and delivery of
the Agreement and Plan of Reorganization among Parent,
Company, and Buyer (the "Reorganization Agreement") and all
related agreements and all actions contemplated thereby;
(b) vote to recommend to Company shareholders acceptance of the
Tender Offer to be made by Buyer for Company Common Shares
pursuant to Buyer's proposed Offer to Purchase Shares and use
his reasonable efforts to cause the shareholders of Company to
tender Company Common Shares pursuant to such Offer to
Purchase Shares;
(c) use his reasonable efforts to cause the shareholders of
Company to adopt and approve the Merger Agreement and the
transactions contemplated thereby; and
(d) vote to authorize Company to consent to and/or encourage the
execution of agreements by a sufficient number of Company
shareholders to assure satisfaction of the Minimum Condition
of Buyer's proposed Offer to Purchase Shares.
The undersigned acknowledges that Parent has entered into the Merger Agreement
in reliance on the agreements herein set forth and on that basis covenants and
agrees that he will tender all Company Common Shares held of record or
beneficially by him
<PAGE> 2
(representing all shares as to which the undersigned and/or his spouse have sole
voting power) as of the date hereof or hereinafter acquired to Buyer pursuant to
Buyer's proposed Offer to Purchase Shares; provided that notwithstanding the
foregoing this letter agreement shall terminate and have no further effect if
the Board of Directors of Company approves another "Business Combination" as
permitted by Section 4.2(i) of the Reorganization Agreement. All terms not
otherwise defined in this letter agreement shall have the same meaning as in the
Reorganization Agreement.
Sincerely yours,
_____________________________________
Director/Officer
Print Name: _________________________
_____________________________________
Spouse
Print Name: _________________________
<PAGE> 1
May 31, 1996
Paul H. Hough
William A. Butler
Jeffrey Ellwood
James L. Fletcher
H. Drew MacAfee
Gary E. Pruitt
Larry Bullock
RE: CHANGE OF CONTROL AGREEMENT
Gentlemen:
Royal Pakhoed N.V. and UC Acquisition Corporation agree to and approve
the attached proposed letter agreement which amends the Change of Control
Agreements between Univar Corporation (or Van Waters & Rogers Ltd.) and each of
you. We further agree to execute final letter agreements with each of you
substantially in accordance with the attached form after execution by you and
Univar. We understand that the letter agreement with Larry Bullock may need to
be modified from the attached form due to differences in the form of his
agreement with Van Waters & Rogers Ltd.
Royal Pakhoed N.V
UC Acquisition Corporation
By /s/ N.J. Westdijk
-----------------
N. J. Westdijk
Chairman
<PAGE> 2
May 31, 1996
Re: Change of Control Agreement
Dear ______________:
This letter sets forth certain interpretations and amendments to that
certain agreement dated ____________ between you (the "Executive") and Univar
Corporation (the "Corporation") (the "Change of Control Agreement") as it
relates to the tender offer to be made by UC Acquisition Corp. ("Buyer") in
accordance with that certain Agreement and Plan of
<PAGE> 3
May 31, 1996
Page 2
Reorganization dated as of May 31, 1996 among Royal Pakhoed N.V. ("Parent"),
Buyer, and the Corporation (the "Reorganization Agreement"). Terms not otherwise
defined in this agreement shall have the same meaning as set forth in the
Reorganization Agreement and the Change of Control Agreement, respectively.
References to the following sections and headings are to the corresponding
sections in the Change of Control Agreement which are clarified and amended as
follows.
1. Term of Agreement. The following sentence shall be added to
Section 1 of the Change of Control Agreement.
"Notwithstanding any of the other provisions of this Section
1, except as to the benefits set forth in this amendment which accrue
as a result of the Tender Offer, this Change of Control Agreement shall
be canceled as of the close of business on the date of the closing of
the Tender Offer in accordance with the Reorganization Agreement, in
which case such date shall be the 'Cancellation Date.'"
2. Change in Control. The closing of the Tender Offer in
accordance with the Reorganization Agreement shall be a "change in control" as
defined in the Change of Control Agreement.
3. Termination of Employment. Upon closing the Tender Offer in
accordance with the Reorganization Agreement, the Executive shall have the right
to receive the compensation and benefits described in Sections 4 and 5 of the
Change of Control Agreement without any requirement of a "termination of
Executive's employment" as defined in Section 3 of the Change of Control
Agreement.
4 and 5. Compensation and Benefits. The amounts payable pursuant to
Section 4 and 5, without regards to any limitation in the prior version of
Section 6, shall be paid in a lump sum in the amount set forth on Exhibit A
which shall be paid in readily available funds within ten (10) business days
after Pakhoed purchases Shares satisfying the Minimum Condition pursuant to the
Reorganization Agreement.
5. Benefits. If Executive continues as an employee of the
Corporation after the Tender Offer he shall be entitled to receive benefits
comparable to those provided other management personnel.
6. Gross-Up Provision. In lieu of the existing provision in
Section 6 of the Change of Control Agreement the following provisions shall
apply:
(a) Notwithstanding anything to the contrary contained herein, in
the event it shall be determined that any payment or distribution by the
Corporation to or for the benefit of the Executive, whether paid or payable or
distributed or distributable pursuant to the terms of (i) this
<PAGE> 4
May 31, 1996
Page 3
Change of Control Agreement, as amended, (ii) the Stock Option Plans (as defined
in the Reorganization Agreement and specifically including without limitation
the cash payments provided for in Section 1.5 of the Reorganization Agreement),
(iii) other payments deemed to be "parachute payments" pursuant to Section 280G
of the Internal Revenue Code of 1986, as amended (the "Code") and (iv) any
payment to the Internal Revenue Service ("IRS"), pursuant to Section 6(b) below,
(clauses (i) through (iv) are referred to herein collectively as the "Payment"),
would be subject to the excise tax imposed by Section 4999 of the Code, or any
comparable federal, state or local excise tax (such excise tax, together with
any interest and penalties, are hereinafter collectively referred to as the
"Excise Tax"), then the Executive shall be entitled to receive an additional
payment (a "Gross-Up Payment") in such an amount that after the payment of all
taxes (including, without limitation, any interest and penalties imposed on such
taxes and the Excise Tax) imposed on the Gross-Up Payment, the Executive shall
retain an amount of the Gross-Up Payment equal to the Excise Tax imposed on the
Payment. The intent of the parties is that the Corporation shall be solely
responsible for, and shall pay, any Excise Tax on any Payment and Gross-Up
Payment and any income and employment taxes (including, without limitation,
penalties and interest) imposed on any Gross-Up Payment, as well as any loss of
tax deduction caused by the Gross-Up Payment and indemnify, defend and hold
Executive harmless against all such liabilities and related expenses. For
purposes of determining the amount of the Gross-Up Payment, the Executive shall
be deemed to pay federal income taxes at the highest marginal rates of federal
income taxation applicable to individuals in the calendar year in which the
Gross-Up Payment is to be made and state and local income taxes at the highest
marginal rates of taxation applicable to individuals as are in effect in the
state and locality of the Executive's residence in the calendar year in which
the Gross-Up Payment is to be made, net of the maximum reduction in federal
income taxes that could be obtained from deduction of such state and local
taxes.
(b) All determinations required to be made under this Section,
including without limitation, whether and when a Gross-Up Payment is required
and the amount of such Gross-Up Payment, shall be made by Price Waterhouse or in
the event they are unable or unwilling another nationally recognized accounting
firm, which firm must be reasonably acceptable to the Executive (the "Accounting
Firm"). The Corporation shall cause the Accounting Firm to provide detailed
supporting calculations to the Corporation and the Executive within fifteen (15)
business days after notice is given by the Corporation to the Accounting Firm,
or such earlier time as is requested by the Corporation. If the Corporation
fails to timely direct the Accounting Firm and provide it with necessary
information, Executive may do so two (2) business days after written notice to
the Corporation and the Accounting Firm shall make its determination based on
the information previously provided to the Accounting Firm and any information
or estimates provided by Executive. All fees and expenses of the Accounting firm
shall be borne solely by the Corporation. Any Gross-Up Payment as determined
pursuant to this Section 6, shall be paid by the Corporation within five (5)
days after receipt of the Accounting Firm's determination. The Accounting Firm
shall make its determinations using the substantial authority standard within
the meaning of Section 6662 of the Code. Any determination by the Accounting
Firm shall be binding upon the Corporation and the Executive in the absence of
material mathematical or legal
<PAGE> 5
May 31, 1996
Page 4
error. As a result of the uncertainty in the application of Section 4999 of the
Code at the time of the initial determination by the Accounting Firm hereunder,
it is possible that Gross-Up Payment will not have been made by the Corporation
that should have been made ("Underpayment") or that Gross-Up Payment will have
been made that should not have been made ("Overpayment"), in each case,
consistent with the calculations required to be made hereunder. In the event
that the Executive hereafter is required to make a payment of any Excise Tax,
the Accounting Firm shall determine the amount of Underpayment that has occurred
and any such Underpayment shall be promptly paid by the Corporation to the
Internal Revenue Service or other appropriate taxing authority on the
Executive's behalf or, if such Underpayment has been previously paid by the
Executive, to the Executive. In the event that the Accounting Firm determines
that an Overpayment has been made, any such Overpayment shall be treated for all
purposes as a loan to the Executive with interest at applicable federal rate
provided for in Section 7872(f)(2) of the Code, due and payable within ninety
(90) days after written demand to the Executive by the Corporation; provided,
however that Executive shall have no duty or obligation whatsoever to repay said
loan to the extent that the Executive's receipt of the Overpayment, or any
portion thereof, is includable in Executive's income and the Executive's
repayment of that amount is not fully deductible by the Executive for federal
and state income tax purposes. It is the intent of the preceding sentence that
tax consequences of any Overpayment shall be neutral to the Executive.
(c) The Corporation and the Executive agree to prepare and file
their respective tax returns (including any amendments thereto) and report their
respective deductions and income on a basis that is consistent with the analysis
that has been prepared by the Accounting Firm and any subsequent determination
by the Accounting Firm.
(d) In the event the Internal Revenue Service or any state taxing
authority proposes an adjustment to the taxes of the Executive which would give
rise to an Underpayment requiring indemnification by the Corporation hereunder,
then the Executive shall notify the Corporation in writing within fifteen (15)
days of the Executive's receipt of the proposed adjustment, provided that the
failure to provide such notice shall not relieve the Corporation of its
obligations under this Agreement with respect to any adjustment unless its
ability to contest such proposed adjustment is materially compromised. The
Executive agrees that thereafter the Corporation, at its own expense, shall have
the right to control the tax proceeding concerning such proposed adjustment,
including, among other things, agreeing to, contesting or compromising the
proposed adjustment. In the event the Corporation believes that there is
substantial authority that the Executive has made an Overpayment and is entitled
to a refund of federal or state taxes, then the Executive agrees to file a claim
for refund asserting such Overpayment and the Corporation shall have the right
to prosecute the claim for refund. The filing of any claim and any related
prosecution of such claim shall be at the sole expense of the Corporation.
7. Effect of Death. Death of the Executive shall have no effect
on the Surviving Corporation's obligation to make the payments provided pursuant
to Section 4 and 5 as modified
<PAGE> 6
May 31, 1996
Page 5
above. The last two sentences of Section 7 shall continue to apply as to
benefits to be paid pursuant to Section 5 and as to payments due in respect of
the Executive's death.
Sections 8 through 16 of the Change of Control Agreement shall continue
to apply without modification. In the event the Reorganization Agreement is
terminated, the Change of Control Agreement shall continue in full force and
effect without regard to the amendments and modifications made pursuant to this
letter. The following shall be added as a new Section 17.
[Remainder of page intentionally omitted]
<PAGE> 7
May 31, 1996
Page 6
17. Release. The Executive agrees that payments made pursuant to
the Change of Control Agreement, as amended, shall be in lieu of, and the
Executive hereby waives and releases any claim to, severance or other
termination payments under any other plan or arrangement of the Corporation, or
any other claim, right or cause of action relating to his employment with the
Corporation existing as of the date of this Agreement, provided that the
foregoing shall not apply to (i) any new agreement, regardless of when executed,
between the Executive and the Surviving Corporation, Parent or any affiliate of
Parent, or (ii) any plan applicable or other severance or termination otherwise
payable to Executive in connection with any termination which occurs more than
thirty (30) months after the closing of the Tender Offer.
Very truly yours,
UNIVAR CORPORATION
By______________________
Its___________________
Agreed and Accepted:
By ______________________
(the "Executive")
Royal Pakhoed N.V.
By_______________________
N.J. Westdijk
Chairman, Board of Management
UC Acquisition Corp.
By_______________________
N.J. Westdijk
Chairman and President
<TABLE>
<CAPTION>
Cash payments
for surrender of
Stock Options,
Base Restricted
Compensation, Stock Awards
Target Inventive and Deferred
and Benefits Cash Incentives
pursuant to pursuant to
Amended Change of Stock Option
Officers Control Agreement Plans
- --------- ------------------ ----------------
<S> <C> <C>
William A. Butler $ 672,531.30 $ 574,817.90
Larry Bullock 494,426.55 573,047.87
Jeffrey Ellwood 689,716.48 359,601.97
James L. Fletcher 731,519.00 847,208.97
Paul H. Hough 1,596,363.05 3,094,022.41
H. Drew MacAfee 637,321.80 499,339.02
Gary E. Pruitt 817,019.70 670,919.97
------------- -------------
Totals $5,638,897.87 $6,618,958.11
============= =============
</TABLE>
<PAGE> 1
================================================================================
AGREEMENT AND PLAN OF REORGANIZATION
AMONG
KONINKLIJKE PAKHOED N.V.
(ALSO KNOWN AS ROYAL PAKHOED N.V.),
UC ACQUISITION CORP.
AND
UNIVAR CORPORATION
DATED: MAY 31, 1996
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
1. THE TENDER OFFER....................................................................................... 1
1.1 The Tender Offer.............................................................................. 1
1.2 Buyer's Filings............................................................................... 2
1.3 Company Action................................................................................ 3
1.4 Company Filings............................................................................... 3
1.5 Stock Plans................................................................................... 4
2. THE MERGER............................................................................................. 5
2.1 Effective Time................................................................................ 5
2.2 Closing....................................................................................... 5
2.3 Effect of the Merger.......................................................................... 6
3. CONVERSION AND CANCELLATION OF SHARES.................................................................. 6
3.1 Conversion of Shares.......................................................................... 6
3.2 Surrender of Shares........................................................................... 6
3.3 No Further Transfers of Shares................................................................ 7
4. COVENANTS OF THE PARTIES............................................................................... 7
4.1 Covenants of Parent and Buyer................................................................. 7
(a) Government Approvals................................................................. 7
(b) Notification of Breach of Representations, Warranties and Covenants.................. 7
(c) Press Releases....................................................................... 7
(d) Offer to Purchase Shares............................................................. 8
(e) Litigation Developments.............................................................. 8
(f) Indemnification and Insurance........................................................ 8
(g) Company Agreements and Plans......................................................... 9
4.2 Covenants of Company.......................................................................... 9
(a) Approval by Company Shareholders. ................................................... 9
(b) Acceptance of Tender Offer........................................................... 10
(c) Agreements of Officers and Directors, and Major Shareholder.......................... 10
(d) Government Approvals................................................................. 10
(e) Notification of Breach of Representations, Warranties and Covenants.................. 10
(f) Compensation......................................................................... 11
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C>
(g) Conduct of Business in the Ordinary Course........................................... 11
(h) Press Releases....................................................................... 13
(i) No Merger or Solicitation............................................................ 14
(j) Dividends............................................................................ 15
(k) Accounting Methods................................................................... 15
(l) Additional Agreements................................................................ 15
(m) Litigation Developments.............................................................. 15
(n) Employment Agreements................................................................ 15
(o) Access to Properties, Books and Records; Confidentiality............................. 15
(p) Resignation and Appointment of Directors............................................. 16
(q) Approval of Merger................................................................... 16
(r) Deregistration....................................................................... 16
4.3 Covenants of the Parties...................................................................... 16
5. REPRESENTATIONS AND WARRANTIES OF COMPANY.............................................................. 17
5.1 Corporate Status and Power to Enter into Agreements........................................... 17
5.2 Execution and Delivery of the Agreement....................................................... 17
5.3 Capitalization................................................................................ 19
5.4 Employment Contracts and Benefits............................................................. 19
5.5 Legal Actions and Proceedings................................................................. 21
5.6 Retention of Broker or Consultant............................................................. 21
5.7 Accuracy of Representations and Warranties.................................................... 21
6. REPRESENTATIONS AND WARRANTIES OF PARENT AND BUYER ......................................................... 21
6.1 Corporate Status and Power to Enter into Agreements........................................... 21
6.2 Execution and Delivery of the Agreement....................................................... 22
6.3 Retention of Broker or Consultant............................................................. 22
6.4 Financing..................................................................................... 22
6.5 Accuracy of Representations and Warranties.................................................... 23
7. CONDITIONS TO THE MERGER............................................................................... 23
7.1 Conditions to the Obligations of Each Party................................................... 23
8. EXPENSES............................................................................................... 23
9. AMENDMENT; TERMINATION................................................................................. 24
9.1 Amendment..................................................................................... 24
9.2 Termination................................................................................... 24
9.3 Notice........................................................................................ 25
</TABLE>
ii
<PAGE> 4
<TABLE>
<S> <C>
9.4 Breach of Obligations......................................................................... 25
9.5 Termination and Expenses...................................................................... 25
10. MISCELLANEOUS.......................................................................................... 25
10.1 Notices....................................................................................... 25
10.2 Binding Agreement............................................................................. 26
10.3 Governing Law................................................................................. 27
10.4 Attorneys' Fees............................................................................... 27
10.5 Entire Agreement; Severability................................................................ 27
10.6 Counterparts.................................................................................. 27
10.7 Waivers....................................................................................... 27
10.8 Survival of Representations and Warranties.................................................... 28
</TABLE>
Exhibits Initial Section Reference
A. Merger Agreement 1.1
B. Director Agreements 4.2(c)
C. Shareholder Agreement 4.2(c)
iii
<PAGE> 5
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION, dated as of May 31, 1996
("Agreement"), is among KONINKLIJKE PAKHOED N.V. (also known as Royal Pakhoed
N.V.), a limited liability company formed and existing under the laws of The
Netherlands ("Parent"), UC ACQUISITION CORP., a Washington corporation and an
indirect wholly owned subsidiary of Parent ("Buyer"), and UNIVAR CORPORATION, a
Washington corporation ("Company").
WITNESSETH:
The Boards of Directors of Buyer and Company and the Supervisory and
Management Boards of Parent deem it advisable and in the best interests of
Parent, Buyer and Company and their respective shareholders to consummate the
business combination provided for herein whereby Parent would acquire Company
and the goodwill associated therewith through a two step transaction. First,
Buyer will commence a tender offer for Company's Common Stock, no par value
("Share" or "Shares"), in conformity with the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), and the applicable regulations thereunder (the
"Tender Offer"), and, second, following the consummation of the Tender Offer,
Buyer will be merged into Company (the "Merger"), with Company as the surviving
corporation. Alternatively, at Parent's option, Company may be merged into Buyer
pursuant to Section 2.3 hereof. Pursuant to the Merger and subject to the terms
and conditions herein, each holder of Shares will receive, in exchange for each
Share, an amount in cash, as specified in Section 3.1 of this Agreement and each
holder of options to purchase Shares will receive, in cancellation of such
options, an amount in cash as specified in Section 1.5 of this Agreement.
This Agreement and the Merger Agreement, as defined herein, have been
approved by the Supervisory and Management Boards of Parent and the Boards of
Directors of Buyer and Company and will be submitted for approval by the
shareholders of Company at a special meeting of its shareholders, if required
pursuant to applicable law or the terms hereof.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements provided for or contained
herein, the parties hereto agree as follows:
1. THE TENDER OFFER.
1.1 The Tender Offer. Provided that nothing shall have occurred that
would result in a failure to satisfy any of the conditions set forth in Annex I
hereto, Buyer shall, as promptly as practicable after the date hereof, but in no
event later than five (5) business days following the public announcement of the
terms of this Agreement, commence the Tender Offer to purchase all
1
<PAGE> 6
of the outstanding Shares pursuant to the terms thereof, at a price of Nineteen
Dollars and Forty-Five Cents ($19.45) per Share, in cash, as it may be adjusted
pursuant to the terms hereof (the "Price"). The Tender Offer shall be subject to
the condition that there shall be validly tendered in accordance with the terms
of the Tender Offer and not withdrawn prior to the expiration date of the Tender
Offer a number of Shares which, together with all Shares beneficially owned by
Parent and its "affiliates" and "associates" (as such terms are defined in Rule
12b-2 of the Exchange Act) (collectively, "Affiliates") represents at least a
majority of the Shares outstanding on a fully diluted basis (the "Minimum
Condition") and to the other conditions set forth in Annex I hereto. Unissued
Shares reserved for options which are cancelled pursuant to Section 1.5 shall
not be considered as outstanding Shares. Buyer will not, without the prior
written consent of Company, (a) decrease the Price; (b) decrease the number of
Shares sought pursuant to the Tender Offer; (c) impose additional conditions to
the Tender Offer; (d) change the expiration date of the Tender Offer so that the
Tender Offer ends less than thirty (30) "business days" (as defined in Rule
14d-1(c)(6) of the Exchange Act) from the date on which the Tender Offer is
first publicly announced or extend the expiration date beyond July 31, 1996,
provided that the expiration date of the Tender Offer may be extended by Buyer
to a date not later than August 31, 1996 if (i) any Government Approvals (as
defined in Section 4.1 hereof) shall not have been obtained by July 31, 1996, or
(ii) by July 26, 1996, less than eighty percent (80%) of the outstanding Shares
have been tendered for purchase pursuant to the Tender Offer, and Buyer
reasonably believes that eighty percent (80%) or more of the Shares will be
tendered, if the expiration date of the Tender Offer is extended; (e) waive or
modify the Minimum Condition; or (f) change the conditions to the Tender Offer
in any material respect, except that Buyer in its sole discretion may waive any
of the other conditions to the Tender Offer. In the event the Tender Offer is
extended beyond July 31, 1996 the Price shall be increased by an amount equal to
the product of the Price multiplied by the prime interest rate as announced by
Bank of America NW, N.A. (doing business as Seafirst Bank) in Seattle,
Washington as in effect on August 1, 1996, multiplied by the quotient of the
number of days that the Tender Offer is extended after July 31, 1996, divided by
three hundred and sixty-five (365). The foregoing limitations shall not be
applicable in the event this Agreement is terminated pursuant to Section 9.2(d),
in which event Buyer may modify its Tender Offer subject only to the limitations
of that certain Standstill Agreement among Parent, Pakhoed Investeringen, B.V.,
Pakhoed USA, Inc. and Company dated September 19, 1986 and amended June 3, 1992
(the "1986 Standstill Agreement").
1.2 Buyer's Filings. On or prior to the date the Tender Offer is
commenced, Buyer shall file with the Securities and Exchange Commission ("SEC")
a Tender Offer Statement on Schedule 14D-1 ("Schedule 14D-1") with respect to
the Tender Offer which will contain the offer to purchase and form of the
related letter of transmittal (which, together with any supplements or
amendments thereto, are collectively referred to herein as the "Tender Offer
Documents"), all in accordance with the requirements of the Exchange Act and
will disseminate the Tender Offer
2
<PAGE> 7
Documents to the holder of Shares. Buyer, Parent, and Company each agrees
promptly to correct any information provided by it for use in the Tender Offer
Documents if and to the extent that such information shall have become false or
misleading in any material respect. Buyer and Parent agree to take all steps
necessary to cause the Tender Offer Documents as so corrected to be filed with
the SEC and to be disseminated to holders of Shares, in each case as and to the
extent required by applicable federal securities laws. Company and its counsel
shall be given an opportunity to review and comment on the Schedule 14D-1 and
any amendments thereto prior to their being filed with the SEC. Buyer and Parent
each agrees to provide Company and its counsel in writing with any comments
Buyer, Parent or their counsel may receive from the SEC or its staff with
respect to the Tender Offer Documents promptly after the receipt thereof.
1.3 Company Action. In accordance with Section 2.8 of the 1986
Standstill Agreement, Company hereby consents to the Tender Offer and represents
and warrants that its Board of Directors, at a meeting duly called and held, has
(a) unanimously determined that this Agreement and the transactions contemplated
hereby, including the Tender Offer and the Merger, are fair to and in the best
interest of Company and its shareholders, and (b) unanimously approved this
Agreement and the transactions contemplated hereby, including the Tender Offer
and the Merger. Company further represents that Schroder Wertheim & Co.
Incorporated ("Schroder") has rendered to Company's Board of Directors its
opinion to be included in the Schedule 14D-9 (as defined in Section 1.4 hereof),
to the effect that the consideration to be received by the holders of the Shares
other than Parent and its affiliates pursuant to each of the Tender Offer and
the Merger is fair to such holders of Shares from a financial point of view.
Company will promptly furnish Parent with a list of its shareholders, mailing
labels and all available listings and computer files containing the names and
addresses of all record holders of Shares and lists of securities positions of
Shares held in stock depositories, in each case true and correct as of the most
recent practicable date (which shall not be more than ten (10) business days of
the date of this Agreement), and will promptly provide to Parent such additional
information (including, without limitation, updated lists of shareholders,
indicating the name and address of each record holder not previously furnished,
mailing labels and lists of securities positions) and such other assistance as
Parent may reasonably request in connection with the Tender Offer.
1.4 Company Filings. On or prior to the date that the Tender Offer is
commenced, Company will, in accordance with the requirements of the Exchange
Act, file with the SEC a Solicitation/Recommendation Statement on Schedule 14D-9
(the "Schedule 14D-9") which shall reflect the recommendations of Company's
Board of Directors referred to in Section 1.3 above. Company, Buyer and Parent
each agree promptly to correct any information provided by it for use in the
Schedule 14D-9 if and to the extent that such information shall have become
false or misleading in any material respect. Company agrees to take all steps
necessary to cause the Schedule 14D-9 as so corrected to be filed with the SEC
and to be disseminated to holders of
3
<PAGE> 8
Shares, in each case as and to the extent required by applicable federal
securities laws. Parent, Buyer and their counsel shall be given an opportunity
to review and comment on the Schedule 14D-9 and any amendments thereto prior to
their being filed with the SEC. Company agrees to provide Parent, Buyer and
their counsel in writing with any comments Company or its counsel may receive
from the SEC or its staff with respect to the Schedule 14D-9 and any amendments
thereto promptly after the receipt of such comments.
1.5 Stock Plans.
(a) Each outstanding employee or non-employee director stock
option to purchase Shares or restricted stock award granted under the Stock
Plans described in Section 4.2(g)(vi) may be surrendered by the holder thereof
to Company after the commencement of the Tender Offer and prior to the Effective
Time for the right to receive in exchange therefor an amount determined by
multiplying (i) the excess of the Price per Share paid pursuant to the Tender
Offer over the applicable exercise price, if any, of such option or award by
(ii) the sum of (x) the number of Shares the holder of such option(s) may
purchase (taking into account Shares the holder may conditionally purchase under
the Stock Plans in the event of a "Change of Control" as defined in such Stock
Plans) had such holder exercised such option in full immediately prior to the
Effective Time plus (y) the number of Shares owned by the holder under
restricted stock awards. Any "Deferred Cash Incentive" or other award of cash or
other property which becomes available to the holder from Company upon the
exercise of an option, pursuant to the terms of the Stock Plans, shall also
become payable. All such amounts shall be payable by Company at the time the
Shares are accepted for payment by Buyer if the Minimum Condition has been
satisfied (or at such later time as the option or award is surrendered to
Company, but not later than the Effective Time).
(b) Prior to the Effective Time, Company shall either (i)
obtain any consents from holders of options to purchase Shares granted under the
Stock Plans, or (ii) make any amendments to the terms of such Stock Plans that
are necessary to give effect to the transactions contemplated by Section 1.5(a).
Notwithstanding any other provision of this Section, payment may be withheld in
respect of any employee or non-employee director stock option or award until all
necessary consents in respect of such stock options or awards are obtained.
(c) The Stock Plans shall terminate as of the Effective Time,
and the provisions in any other plan or arrangement of Company or the Company
Subsidiaries (as defined in Section 4.1(f)) providing for the offering,
issuance, purchase, transfer or grant of any capital shares of Company or any
interest in respect of any capital shares of Company shall be terminated as of
the Effective Time, and Company shall ensure that following the Effective Time
no holder of an employee or non-employee director stock option or any
participant in any Stock Plan or other
4
<PAGE> 9
plan or arrangement of Company or the Company Subsidiaries shall have any right
thereunder to acquire any capital shares or any other interest in capital shares
of Company or the Surviving Corporation (as defined in Section 2.3). Any option
which remains unexercised as of the Effective Time shall be terminated,
cancelled and converted into the right to receive the cash payments provided for
in Section 1.5(a).
(d) Company and the Surviving Corporation shall have the right
to withhold from amounts payable pursuant to this Section any foreign, federal,
state or local income or other payroll related taxes required to be withheld
under applicable laws. The Surviving Corporation and Parent shall indemnify
holders of options and awards against any "Excise Tax" and shall also make a
"Gross-Up Payment" as those terms are defined in the Change of Control
Agreements, as amended, referenced in Section 5.4(a). The obligation to
indemnify against Excise Taxes and make a Gross-Up Payment shall apply to all
holders of options or awards who are subject to an Excise Tax or against whom an
Excise Tax is subsequently asserted regardless of whether an individual Change
of Control Agreement is executed in favor of the option or award holder provided
that such holder enters into an agreement with Company or the Surviving
Corporation regarding the terms of such indemnity substantially identical to the
form of the amendments to the Change of Control Agreements with certain
executive officers as of May 31, 1996. The Surviving Corporation shall properly
record, pay, and report all withheld taxes to the proper tax authorities and
furnish the employee with all required information reports. The Surviving
Corporation or Company shall have the right to condition any payments made to
holders of options and awards on the execution and delivery by such holders of a
mutually acceptable release of claims.
2. THE MERGER.
2.1 Effective Time. Subject to the terms and conditions of this
Agreement, upon the filing with the Washington Secretary of State of duly
executed Articles of Merger (including a Plan of Merger) as prescribed by the
Washington Business Corporation Act ("WBCA") substantially in the form attached
hereto as Exhibit A (the "Merger Agreement"), or at such time thereafter as is
provided in the Merger Agreement (the "Effective Time") on the date of such
filing or other date specified in the Merger Agreement (the "Effective Date")
the Merger shall become effective.
2.2 Closing. The closing of the Merger (the "Closing") will take place
as soon as practicable on the first (1st) business day after satisfaction of the
conditions set forth in Section 7 of this Agreement (the "Closing Date"), at the
offices of Graham & James LLP, 1001 Fourth Avenue Plaza, Suite 4500, Seattle,
Washington 98154-1065, unless another date or place is agreed to in writing by
the parties hereto.
5
<PAGE> 10
2.3 Effect of the Merger. Subject to the terms and conditions of this
Agreement and the Merger Agreement, at the Effective Time on the Effective Date,
Buyer shall be merged into Company, and Company shall be the surviving
corporation (the "Surviving Corporation") in the Merger. All assets, rights,
goodwill, privileges, immunities, powers, franchises and interests of Company
and Buyer in and to every type of property (real, personal and mixed) and choses
in action, as they exist as of the Effective Date, shall pass and be transferred
to and vest in the Surviving Corporation by virtue of the Merger at the
Effective Time without any deed, conveyance or other transfer. The separate
existence of Buyer shall cease and the corporate existence of Company as the
Surviving Corporation shall continue unaffected and unimpaired by the Merger;
and the Surviving Corporation shall be deemed to be the same entity as each of
Company and Buyer and shall be subject to all of their duties and liabilities of
every kind and description. At the sole election of Parent, the Merger may be
structured so that Company shall be merged with and into Buyer with the result
that Buyer shall be the "Surviving Corporation." The 1986 Standstill Agreement
and the Confidentiality and Standstill Agreement, dated April 12, 1996, by and
among Company, Parent and subsidiaries of Parent (the "Confidentiality
Agreement") shall be terminated at the Effective Time on the Effective Date.
3. CONVERSION AND CANCELLATION OF SHARES.
3.1 Conversion of Shares. At the Effective Time, by virtue of the
Merger and without any action on the part of the holder of any Shares, each of
the issued and outstanding Shares or fractional interests thereof (other than
any Shares owned by Buyer and its Affiliates and Shares as to which dissenters'
rights have been perfected) shall be converted into the right to receive an
amount in cash which shall be equal to the highest Price paid to holders of
Shares who tender their Shares in the Tender Offer. From and after the Effective
Time, all outstanding Shares shall no longer be outstanding and shall
automatically be canceled and retired and shall cease to exist, and the holders
of certificates formerly representing Shares (other than Shares held by Buyer
and its Affiliates) shall cease to have any rights with respect thereto other
than to receive the Price or any dissenters' rights they have perfected pursuant
to Section 23B.13.020 of the WBCA.
3.2 Surrender of Shares. Prior to the Effective Date, Buyer shall
appoint First Interstate Bank of Washington N.A. or Company's successor transfer
agent, or any other bank or trust company mutually acceptable to Buyer, Parent,
and Company, as exchange agent (the "Exchange Agent") for the purpose of
exchanging each certificate representing the Shares for the Price. As soon as
practicable after the Effective Date, each holder of Shares, upon surrender to
the Exchange Agent of one or more certificates for such Shares for cancellation,
will be entitled to receive a payment in cash of the Price for each Share or
fraction thereof.
6
<PAGE> 11
3.3 No Further Transfers of Shares. At the Effective Date, the stock
transfer books of Company shall be closed and no transfer of Shares theretofore
outstanding shall thereafter be made.
4. COVENANTS OF THE PARTIES.
4.1 Covenants of Parent and Buyer.
(a) Government Approvals. Prior to the Effective Date, Parent
and Buyer, with the cooperation of Company, shall take or cause to be taken as
promptly as practicable all such steps as shall be necessary to obtain all
authorizations, consents, orders or approvals of, or declarations or filings
with, or terminations or expirations of waiting periods imposed by any
government agencies, as are required by law or otherwise, necessary or required
to consummate the Tender Offer and the Merger (collectively, the "Government
Approvals"), including but not limited to the filing of the notification and
report form required under the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended ("HSR Act"), the Exon-Florio Amendment to the Defense
Production Act of 1950 ("Exon-Florio"), the Competition Act (Canada) and the
Investment Canada Act and shall do any and all acts deemed by Company to be
reasonably necessary or appropriate in order to cause the Merger to be
consummated on the terms provided in this Agreement as promptly as practicable.
(b) Notification of Breach of Representations, Warranties and
Covenants. Parent and Buyer shall promptly give written notice to Company upon
becoming aware of the occurrence or impending or threatened occurrence of any
event which would cause or constitute a breach of any of the representations,
warranties, or covenants of Parent or Buyer contained or referred to in the
Merger Agreement or this Agreement and shall use its best efforts to prevent the
same or remedy the same promptly.
(c) Press Releases. Parent and Buyer shall not issue any press
release or written statement for general circulation to the public relating to
the Merger, this Agreement, or the Merger Agreement unless previously provided
to Company for review and approval (which approval will not be unreasonably
withheld or delayed) and shall cooperate with Company in the development and
distribution of all news releases and other public information disclosures with
respect to this Agreement, the Merger Agreement, and the Merger. Notwithstanding
the foregoing, Parent and Buyer may, without the consent of Company, issue any
press release or written statement for general circulation with regard to this
Agreement, the Merger Agreement, and the Merger that either Parent or Buyer
determines is required under any applicable law or regulation, provided that,
prior to such issuance, Parent and Buyer shall inform Company of their intent to
make such releases or statements, shall provide a copy thereof to Company and
shall
7
<PAGE> 12
provide Company with an opportunity to review and comment on the content of such
releases or statements.
(d) Offer to Purchase Shares. Parent and Buyer shall use their
best efforts in good faith to take or cause to be taken as promptly as
practicable all such steps as shall be necessary or appropriate in order to
complete the Tender Offer on the terms provided in the Tender Offer Documents
prior to the expiration thereof.
(e) Litigation Developments. Parent and Buyer agree to
promptly advise Company with respect to any and all material legal actions or
other proceedings or investigations that could impede the transactions
contemplated hereby and to promptly advise Company with respect to any
significant developments arising in connection with said actions, proceedings,
or investigations. In the event that any action, suit, proceeding or
investigation relating hereto or to the transactions contemplated hereby is
commenced, whether before or after the Effective Time, the parties hereto agree
to cooperate and use their best efforts to defend vigorously against and respond
thereto.
(f) Indemnification and Insurance. With respect to events
which occur prior to the Effective Time, Parent agrees that all rights to
indemnification existing in favor of the present or former directors, officers,
employees, fiduciaries and agents of (i) Company, (ii) any corporation,
partnership, limited liability company, or other entity in which Company owns,
directly or indirectly, any equity interest and whose financial statements are
consolidated for accounting purposes under generally accepted accounting
principles ("GAAP") (the "Company Subsidiaries") or (iii) any "Pension Plans"
(as defined in ERISA Section 3(2)) or "Employee Welfare Benefit Plans" (as
defined in ERISA Section 3(1)) which are sponsored by Company or the Company
Subsidiaries, as provided in Company's Articles of Incorporation or pursuant to
any agreements previously disclosed by Company to Parent in writing with
specific reference to this Section, or the articles of incorporation, bylaws,
Board resolutions or similar documents of the Company Subsidiaries as in effect
as of the date hereof shall survive the Merger and shall continue in full force
and effect for a period of not less than the statutes of limitations, if any,
applicable to such matters. Without limiting the foregoing, Company and, after
the Effective Time, Parent shall cause the Surviving Corporation to periodically
advance expenses as incurred with respect to the foregoing to the fullest extent
permitted under the provisions of Company's Articles of Incorporation or the
articles of incorporation of the Company Subsidiaries. As of the Effective Time,
Company shall, or in the event Company is unable to do so, Parent shall cause
the Surviving Corporation to convert the current policies for directors' and
officers' liability insurance and ERISA or employee plan fiduciary liability
insurance maintained by Company and the Company Subsidiaries to a policy or
policies for a term of six (6) years after the Effective Date which shall cover
events which occur prior to the Effective Date, provided that the incremental
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cost of such policy or policies, after applying all related prepaid insurance
premiums, shall not exceed two hundred thousand dollars ($200,000). To the
extent that the premium for such policy or policies exceeds two hundred thousand
dollars ($200,000), Company or the Surviving Corporation shall obtain reasonably
available policies for not less than such amount. Buyer and the Surviving
Corporation shall pay all expenses, including attorneys' fees, that may be
incurred by any present or former officer, director, employee, fiduciary or
agent of Company or the Company Subsidiaries in enforcing the indemnity and
other obligations provided for in this Section 4.1(f).
(g) Company Agreements and Plans. Parent, Buyer, and their
affiliates, shall cause the Surviving Corporation to honor and fully perform all
agreements and plans for the benefit of employees or non-employee directors
which are not terminated by the terms thereof or the terms hereof and continue
after the Effective Date, and which are disclosed to Parent and Buyer pursuant
to Section 5.4(a).
4.2 Covenants of Company.
(a) Approval by Company Shareholders. As soon as practicable
after the expiration date of the Tender Offer, (i) if Buyer and its affiliates
own or have the right to acquire less than ninety percent (90%) of Company
Shares, but more than fifty percent (50%), Company shall cause the Merger, this
Agreement, and the Merger Agreement to be submitted promptly for the approval of
its shareholders at a special meeting to be called and held in accordance with
applicable laws and Company bylaws; or (ii) if, as a result of the Tender Offer,
Buyer owns or has the right to acquire ninety percent (90%) or more of Company
Shares, then at Buyer's sole election, Company shall comply with all applicable
procedures, deliver all required disclosure documents, and cooperate with Buyer
to consummate a merger between Buyer and Company pursuant to Section 23B.11.040
of the WBCA (a "short form merger"). The Board of Directors of Company, in
authorizing the execution and delivery of this Agreement by Company, shall at
all times prior to the Effective Date, subject to the discharge of their
fiduciary duty, recommend to Company shareholders that this Agreement, the
Merger Agreement, and the Merger be approved. If a special meeting of Company
shareholders is necessary or required, Company shall use its best efforts to
cause such meeting of its shareholders to take place as soon as practicable. In
connection with the call of such meeting, Company shall cause such proxy
materials or information statements, with any amendments thereto that may in the
judgment of its counsel be necessary or desirable, to be mailed to its
shareholders (the proxy materials or information statements, together with any
amendments or supplements thereto, being herein referred to as the "Proxy
Statement"). In connection with the procedures to complete a short form merger,
Company shall cause such information statements, with any amendments thereto
that may in the judgment of its counsel be necessary or desirable, to be mailed
to its shareholders (the information statement, together with any supplements
thereto, being herein referred to as the "Information
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Statement"). Prior to mailing to its shareholders, Company shall give Parent and
Buyer and their counsel reasonable opportunity to review and comment on the
Proxy Statement and the Information Statement. Subject to the discharge of their
fiduciary duty, the Board of Directors of Company shall at all times prior to
and during such meeting of Company shareholders recommend that the transactions
contemplated hereby be adopted and approved and use its best efforts to cause
such adoption and approval.
(b) Acceptance of Tender Offer. Subject to the discharge of
their fiduciary duty, the Board of Directors of Company shall at all times prior
to the delivery of the Tender Offer Documents, and prior to the expiration of
the Tender Offer, recommend that the holders of Shares tender their Shares to
Buyer pursuant to the terms of the Tender Offer Documents and consent to and use
their best efforts to encourage the execution of agreements by a sufficient
number of Company shareholders to assure satisfaction of the Minimum Condition.
(c) Agreements of Officers and Directors, and Major
Shareholder. Company acknowledges and consents to the execution and delivery to
Buyer and Parent by (i) certain officers and members of its Board of Directors
of agreements in the form attached hereto as Exhibit B (the "Officer and
Director Agreements"), and (ii) The Dow Chemical Company ("Dow") of an agreement
in the form attached hereto as Exhibit C (the "Shareholder Agreement"). Subject
to the exercise of its fiduciary duties, Company covenants and agrees not to
take any action which would interfere with or prevent the performance of the
Officer and Director Agreements and the Shareholder Agreement.
(d) Government Approvals. Company shall cooperate in all
reasonable respects with Parent and Buyer in the performance of their
undertaking pursuant to Section 4.1(a) to obtain the Government Approvals. Prior
to the Effective Date, Company, with the cooperation of Parent and Buyer, shall
take or cause to be taken as promptly as practicable all such steps as shall be
necessary to obtain all Government Approvals and shall do any and all acts
deemed by Parent and Buyer to be reasonably necessary or appropriate in order to
cause the Merger to be consummated on the terms provided in this Agreement as
promptly as practicable.
(e) Notification of Breach of Representations, Warranties and
Covenants. Company shall promptly give written notice to Parent and Buyer upon
becoming aware of the occurrence or impending or threatened occurrence of any
event which would cause or constitute a breach of any of the representations,
warranties or covenants of Company contained or referred to in this Agreement
and shall use its best efforts to prevent the same or remedy the same promptly.
(f) Compensation. Except in accordance with budgets and plans
previously approved by Company's Compensation Committee, which have been
disclosed to Parent and
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Buyer, and in connection with the acceleration of stock options as provided for
in Section 1.5, and payments made under the Change of Control Agreements (as
amended) referred to in Section 5.4(a), neither Company nor any of the Company
Subsidiaries shall, prior to the Effective Date, make or approve any increase in
the compensation payable or to become payable to any of their directors,
officers, employees or agents with annual salaries in excess of $75,000 (or the
foreign equivalent) at the date hereof (including but not limited to
compensation through any profit sharing, pension, retirement, severance,
incentive or other employee benefit program or arrangement), nor shall any bonus
payment or any agreement or commitment to make a bonus payment be made nor shall
any stock option, warrant or other right to acquire capital shares be granted,
nor employment agreement (other than any such employment agreement that may
arise by operation of law upon the hiring of any new employee) nor consulting
agreement be entered into by Company with any such directors, officers,
employees or agents unless Parent or Buyer have given its prior written consent.
(g) Conduct of Business in the Ordinary Course. Prior to the
Effective Time, Company and the Company Subsidiaries shall use reasonable
efforts to conduct their businesses and to maintain satisfactory relationships
with licensers, suppliers, distributors, and customers, all in accordance with
their ordinary and usual course of business. Prior to the Effective Time,
neither Company nor any of the Company Subsidiaries shall without the prior
written consent of Parent or Buyer or except as specifically contemplated by
this Agreement:
(i) amend its Articles of Incorporation or Bylaws;
(ii) authorize for issuance, issue, deliver, grant or
sell any additional capital shares, or securities convertible into such shares,
or issue or grant any rights, options or other commitments for the issuance of
such shares or convertible securities (other than the issuance of capital shares
and the conversion thereof or payment in lieu thereof pursuant to that certain
Agreement of Purchase and Sale of Stock between Company and Dow dated as of June
4, 1991 and amended as of May 13, 1994 (the "Dow Put/Call"), or of Shares
pursuant to the exercise of outstanding options, and the grant of any new
options in accordance with budgets and plans previously approved by Company's
Compensation Committee); and
(iii) split, combine, or reclassify any of its
capital shares or declare, set aside or pay any dividend (whether in cash,
stock, or property) in respect to its Shares or redeem or otherwise acquire any
of its Shares other than the repurchase, at cost, of Shares issued to employees
pursuant to the terms of employee restricted stock or share purchase agreements;
(iv) dispose of or acquire any material properties or
assets except in the ordinary course of business;
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(v) engage in any activities or transactions that are
outside the ordinary course of Company's business, other than funding with cash
or letters of credit the supplemental pension benefits plans as required under
the terms of such plans and the trusts for such plans;
(vi) materially amend any provision of Company's 1986
Long Term Incentive Stock Plan, as amended and restated, 1992 Long Term
Incentive Plan, amended and restated as of April 23, 1996, 1993 Non-Employee
Director Stock Option Plan, and 1995 Incentive Stock Plan (collectively, the
"Stock Plans"), Pension Plans, or Employee Welfare Benefit Plans; or
(vii) incur any indebtedness for borrowed money,
other than: (1) amounts borrowed pursuant to and in accordance with the terms
and conditions of its existing lines of credit, or (2) amounts pledged or
potentially owed in connection with letters of credit which may be obtained
naming as beneficiaries the trustees of the trusts for supplemental pension
benefits plans as required under the terms of such trusts and plans.
Notwithstanding anything in this Agreement to the contrary, Company and the
Company Subsidiaries may take any or all of the following actions with respect
to their Pension Plans prior to the Effective Time without prior consent of
Parent or Buyer:
(1) amend the Pension Plans or the trusts funding such plans to the
extent necessary or desirable to (a) obtain favorable determination letters from
the Internal Revenue Service as to the Pension Plans' tax-qualified status, (b)
maintain the Pension Plans' tax-qualified status, (c) make administrative
changes to the operations of the Pension Plans provided such changes do not
significantly increase the cost of such plans, (d) clarify the procedures for
the funding of supplemental pension benefits through contributions to trusts of
cash or letters of credit, or (e) permit Company, pursuant to a prohibitive
transaction exemption obtained from the U.S. Department of Labor, to guaranty
and provide loans to Company's Univar Corporation Uni$aver Tax Savings
Investment Plan ("Uni$aver Plan") with respect to a guaranteed investment
contract which was issued by Confederation Life Insurance Company and is held by
that plan ("GIC");
(2) obtain letters of credit which name as beneficiary the trustees of
trusts which fund supplemental pension benefits as required or permitted by the
terms of the supplemental benefits plans and trusts, and secure such letters of
credit with assets of Company or the Company Subsidiaries as required by the
bank(s) issuing the letters of credit;
(3) take whatever steps are necessary to obtain the approval of the
U.S. Department of Labor and the Internal Revenue Service for Company's
guarantee of the book value of the GIC
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and Company's promise to make loans to the Uni$aver Plan with respect to the GIC
to the extent such action does not have a material adverse effect on Company and
the Company Subsidiaries taken as a whole;
(4) make guarantee payments and loans to the Uni$aver Plan with respect
to the GIC; and
(5) establish a new supplemental benefits plan for Van Waters & Rogers
Ltd. which is similar to the existing supplemental benefits plan for Van Waters
& Rogers Ltd., except that it would be for those employees of Van Waters &
Rogers Ltd. who would participate in the Van Waters & Rogers Ltd. Supplemental
Benefits Plan but for the fact that they are U.S. citizens or residents,
establish a rabbi trust for such mirror plan which is similar to the rabbi trust
for Company, and take the actions described in (1) and (2) above with respect to
such mirror plan and rabbi trust.
(h) Press Releases. Company shall not issue any press release
or written statement for general circulation relating to this Agreement, the
Merger Agreement, or the Merger unless previously provided to Parent and Buyer
for review and approval (which approval will not be unreasonably withheld or
delayed) and shall cooperate with Parent and Buyer in the development and
distribution of all news releases and other public information disclosures with
respect to this Agreement, the Merger Agreement and the Merger. Notwithstanding
the foregoing, Company may, without the consent of Parent and Buyer, issue any
press release or written statement for general circulation with regard to this
Agreement, the Merger Agreement and the Merger that Company determines is
required under any applicable law or regulation, provided that, prior to such
issuance, Company shall inform Parent and Buyer of its intent to make such
releases or statements, shall provide a copy thereof to Parent and Buyer, and
shall provide Parent and Buyer with an opportunity to review and comment on the
content of such releases or statements.
(i) No Merger or Solicitation.
(i) Except as contemplated by this Agreement and
subject to the continuing fiduciary duties of the Board of Directors of Company,
prior to the Effective Time, Company and the Company Subsidiaries shall not
effect or agree to effect any Business Combination; except for (x) any Business
Combination unanimously approved by Company's Board of Directors, (y) any
Business Combination which does not require approval by Company's Board of
Directors, or (z) any Business Combination approved by a majority of the
disinterested directors of Company (i.e., unaffiliated with Parent) in
accordance with Section 4.2(i)(iii) below. As used in this Agreement, "Business
Combination" shall mean (except as explicitly contemplated
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in this Agreement) any tender or exchange offer, proposal for a merger,
consolidation, acquisition of assets or other takeover proposal or any offer or
proposal to acquire in any manner a ten percent (10%) or greater interest in, or
a substantial portion of outstanding capital shares of any party or any
proceedings for winding up and dissolution of Company or of any of the Company
Subsidiaries.
(ii) Prior to the Effective Date, neither Company nor
any officer, director or affiliate of Company, nor any investment banker,
attorney, accountant or other agent, advisor or representative retained by
Company shall solicit or encourage, directly or indirectly, any inquiries,
discussions or proposals for, nor propose any discussions or negotiations
looking toward, or enter into any agreement or understanding providing for, any
Business Combination.
(iii) In the event that the Board of Directors of
Company receives a bona fide unsolicited offer for a Business Combination or a
bona fide unsolicited indication of interest from any person, corporation, firm,
association, entity or group to engage in a Business Combination, and reasonably
determines, upon advice of counsel, that any duty to act or to refrain from
doing any act pursuant to this Agreement is inconsistent with the continuing
fiduciary duties of Company Board of Directors to the shareholders of Company,
Company shall within two (2) business days of receipt of such indication or
offer inform Parent of such interest or the terms of such offer and may: (a)
disclose the same nonpublic information as provided to Parent to such
corporation, firm, association, person or other entity or group concerning the
business and properties of Company and/or afford any such party the same access
as provided to Parent to the properties, books or records of Company and the
Company Subsidiaries or otherwise assist or encourage any such party in
connection with the foregoing, all on no more favorable terms and conditions as
set forth in the Confidentiality Agreement, provided that if requested, Company
Board of Directors may provide nonpublic information not provided to Parent
and/or agree to more favorable terms and conditions so long as it promptly
provides the same information to Parent and/or modifies the Confidentiality
Agreement so as to make available the same terms and conditions for Parent, or
(b) if Company Board of Directors determines that their continuing fiduciary
duties would require their approval of any such unsolicited bona fide offer for
a Business Combination with another entity because the terms of such offer are
more favorable to Company's shareholders than the terms set forth in this
Agreement, then Company may accept such offer, provided that prior to taking any
such actions Company shall provide Parent with not less than two (2) business
days to modify the terms of its Tender Offer and Tender Offer Documents and to
propose to Company any corresponding modifications to this Agreement.
(j) Dividends. Company shall not declare, set aside or pay any
dividend or other distribution in respect of the Shares (including, without
limitation, any stock dividend or
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distribution), except in the ordinary course of business and not in amounts
which materially exceed the amounts previously paid by Company.
(k) Accounting Methods. Company shall not change its methods
of accounting in effect at February 29, 1996, except as required by changes in
GAAP as concurred in by its independent auditors.
(l) Additional Agreements. In case at any time after the
Effective Time any further action is necessary or desirable to carry out the
purposes of this Agreement or to vest the Surviving Corporation with full title
to all properties, assets, rights, approvals, immunities and franchises of
Company, the proper officers and directors of each party to this Agreement shall
take all such necessary or appropriate action.
(m) Litigation Developments. Company agrees to promptly advise
Parent and Buyer with respect to any and all legal actions or other proceedings
or investigations that either seeks to enjoin the transactions contemplated
hereby or collect damages or impose a monetary payment which could reasonably be
expected to exceed $5,000,000, and to promptly advise Parent and Buyer with
respect to any significant developments arising in connection with said actions,
proceedings or investigations.
(n) Employment Agreements. Company agrees to permit and shall
give Parent and Buyer the opportunity to negotiate employment agreements with
Company executives, provided that any such agreement shall be subject to the
consummation of the Tender Offer.
(o) Access to Properties, Books and Records; Confidentiality.
Following the consummation of the Tender Offer, Company shall give Parent and
Buyer and their counsel and accountants reasonable access, during normal
business hours and upon reasonable request, to all of its properties, books,
contracts, commitments and records including, but not limited to, the corporate,
financial and operational records, papers, reports, instructions, procedures,
tax returns and filings, tax settlement letters, material contracts or
commitments, regulatory examinations and correspondence and shall allow Parent
and Buyer to make copies of such materials (to the extent not legally
prohibited) and shall furnish Parent and Buyer with all such information
concerning its affairs as Parent and Buyer may reasonably request. Company shall
also use its best efforts to cause Company's accountants to make available to
Parent and Buyer, their accountants, counsel and other agents, to the extent
reasonably requested in connection with such review, Company's accountants' work
papers and documentation relating to its work papers and its audits of the books
and records of Company. Any information requested by Parent and Buyer shall be
subject to the provisions of the Confidentiality Agreement.
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(p) Resignation and Appointment of Directors. Upon the
execution of this Agreement, Company shall deliver to Parent and Buyer
contingent resignations of all directors of Company who were not nominated by
Parent. Such resignations shall be contingent on the consummation of the Tender
Offer. Upon the consummation of the Tender Offer, Company shall accept the
resignations of a sufficient number of such directors as determined by Parent
and Buyer to result in Parent having representation on the Board of Directors of
Company proportionate to the percentage shareholding of Parent and its
affiliated companies, provided that the Board of Directors (excluding directors
nominated by Parent) shall have the right but not the obligation to designate up
to four current members of the Special Committee of the Board of Directors who
shall remain directors after the consummation of the Tender Offer until the
Effective Date. On the Effective Date, Company shall accept the resignations of
any such directors determined by Parent and Buyer who have not previously
resigned.
(q) Approval of Merger. Subject to the discharge of their
fiduciary duty, the Board of Directors of Company shall at all times prior to
the Effective Date, recommend that the holders of Shares approve and consent to
this Agreement, the Merger and the Merger Agreement.
(r) Deregistration. Following the consummation of the Tender
Offer and if permitted by applicable rules and regulations, including the
Exchange Act, at the request of Parent or Buyer, Company shall take or cause to
be taken as promptly as practical any and all such steps as shall be necessary
to terminate the registration of the Shares under the Exchange Act and the
listing of the Shares on any stock exchange, including the New York Stock
Exchange.
4.3 Covenants of the Parties. Parent and Buyer acknowledge the
provisions of the Confidentiality Agreement and confirm that the provisions
thereof continue to apply. Company agrees to treat as confidential all
information provided by Parent and Buyer, which is designated as, or from the
content clearly intended as, confidential information in the same manner as
Company treats similar confidential information of its own, and if this
Agreement is terminated, Company shall continue to treat all such information as
confidential and to cause its employees to keep all such information
confidential and shall return such documents theretofore delivered by Parent and
Buyer as either of them shall request, and shall use such information, or cause
it to be used, solely for the purposes of evaluating and completing the
transactions contemplated hereby.
5. REPRESENTATIONS AND WARRANTIES OF COMPANY.
Company represents and warrants to Parent and Buyer that except as
disclosed to Parent and Buyer in writing on a separate disclosure statement
previously provided by Company (the "Company Disclosure Statement"):
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5.1 Corporate Status and Power to Enter into Agreements. Company (i) is
a corporation duly organized, validly existing and in good standing under the
laws of the state of Washington, and (ii) subject to the approval of this
Agreement and the Merger Agreement and the transaction contemplated hereby and
thereby by the shareholders of Company, it has all necessary corporate power to
enter into this Agreement and the Merger Agreement and to carry out all of the
terms and provisions hereof and thereof to be carried out by it. Company is duly
qualified to do business as a foreign corporation under the laws of each
jurisdiction in which the conduct of its business requires such qualification,
except for jurisdictions where failure to so qualify would not have a material
adverse effect on Company's business.
The Company Subsidiaries are each a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation. Each of the Company Subsidiaries is duly qualified to do business
as a foreign corporation under the laws of such jurisdiction in which the
conduct of its business requires such qualification, except for jurisdictions
where failure to so qualify would not have a material adverse effect on its
business.
5.2 Execution and Delivery of the Agreement.
(a) The execution and delivery of this Agreement has been duly
authorized by the Board of Directors of Company and, when this Agreement, the
Merger Agreement, and the Merger have been duly approved by the affirmative vote
of the holders of a majority of the outstanding Shares, this Agreement, the
Merger Agreement and the Merger will be duly and validly authorized by all
necessary corporate action on the part of Company.
(b) This Agreement has been duly executed and delivered by
Company and (assuming due execution and delivery by and enforceability against
Parent and Buyer) constitutes the legal and binding obligations of Company,
except as enforcement may be limited by applicable bankruptcy laws or other
similar laws affecting creditors' rights generally, and except that the
availability of equitable remedies may be limited.
(c) The execution and delivery by Company of this Agreement
and the consummation of the transactions contemplated hereby, including the
Tender Offer (i) do not violate any provision of the Articles of Incorporation
or Bylaws of Company, any provision of federal or state law, or any governmental
rule or regulation (assuming (x) receipt of the Government Approvals, (y)
receipt of the requisite Company shareholder approval referred to in this
Section 5.2, and (z) the accuracy of the representations of Parent and Buyer set
forth herein), and (ii) do not require any consent of any person under, conflict
with or result in a breach of, or accelerate the performance required by any of
the terms of any material debt instrument, lease, license, covenant, agreement,
or understanding to which Company or any of the Company
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Subsidiaries is a party or by which it is bound which are required to be
disclosed by Company in filings made by it pursuant to the Exchange Act or any
order, ruling, decree, judgment, arbitration award or stipulation to which
Company or any of the Company Subsidiaries is subject, or constitute a material
default thereunder or result in the creation of any lien, claim, security
interest, encumbrance, charge, restriction, or similar right of any third party
upon any of the properties or assets of Company or of any of the Company
Subsidiaries. Without limiting the generality of the foregoing, Company
represents and warrants that:
(i) All of the actions necessary or required pursuant to the terms
of the 1986 Standstill Agreement to permit the transactions contemplated hereby,
the Tender Offer Documents, and the Merger Agreement have been taken, including
but not limited to, advance approval of the Agreement, the Tender Offer, the
Officer and Director Agreements, and the Shareholder Agreement, from
five-eighths (5/8) of the Unaffiliated Directors (as defined in the 1986
Standstill Agreement) as required by Section 2.8 of the 1986 Standstill
Agreement;
(ii) the execution and delivery of this Agreement and the Merger
Agreement and the consummation of the transactions contemplated hereby and
thereby, including the Tender Offer, do not violate or breach any of the terms
of the 1986 Standstill Agreement; and
(iii) approval from only the majority of Company shareholders
entitled to vote is required in order to approve this Agreement, the Merger
Agreement and the Merger pursuant to Article IX of the Articles of Incorporation
of Company and to WBCA, and that the provisions of Article VII of such Articles
do not apply to this Agreement, the Merger Agreement and the Merger.
5.3 Capitalization. The authorized capital shares of Company consists of
105,000,000 shares, of which 100,000,000 are authorized as common stock, no par
value, 21,735,415 of which are validly issued, fully paid and nonassessable and
currently outstanding, and 5,000,000 preferred shares, 105,000 of which are
designated and authorized as Series A Junior Participating Convertible Preferred
Shares ("Series A Shares") and of which none are issued and currently
outstanding; provided that Dow has the right to require Company to sell and
Company has the right to require Dow to purchase up to 107,874 Series A Shares
pursuant to the Dow Put/Call. Said shares have been issued in compliance with
all applicable registration or qualification provisions of state and federal
securities laws. No other equity securities of Company have been authorized,
issued or are outstanding. There are currently outstanding options to purchase
1,741,072 Shares, at a weighted average exercise price of $ 11.1485 per Share,
issued pursuant to the Stock Plans. Said options were issued and, upon issuance
in accordance with the terms of the outstanding options, said Shares shall be
issued, in compliance with all applicable securities laws. Other than as set
forth in this Section 5.3, there are no outstanding options, agreements, calls
or
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commitments of any character which would obligate Company to issue, sell,
pledge, assign, or otherwise encumber or dispose of, or to purchase, redeem, or
otherwise acquire, any Shares or any other equity security of Company, or
warrants or options relating to, rights to acquire, or debt or equity securities
convertible into, Shares or any other equity security of Company. Company has
delivered to Parent a true and correct copy of its options outstanding report,
which summarizes options issued pursuant to the Stock Plans as of May 30, 1996.
5.4 Employment Contracts and Benefits.
(a) Company has delivered to Parent and Buyer an accurate list setting
forth all bonus, incentive compensation, profit-sharing, pension, retirement,
stock purchase, stock option, deferred compensation, severance, retiree medical
plan and other fringe benefit plans, trust agreements, arrangements and
commitments of Company and of each of the Company Subsidiaries which is
incorporated in one of the United States, and will deliver within fifteen (15)
business days of the date of this Agreement a list of such plans, agreements,
arrangements and commitments for those Company Subsidiaries which are not
incorporated in one of the United States, together with copies of all such
plans, agreements, arrangements and commitments requiring any payments or
acceleration of any rights to acquire any Shares or any other equity security of
Company upon a change of control (the "Change of Control Agreements").
(b) With respect to each employee benefit plan (as defined in Section
3(3) of ERISA) which is listed pursuant to Section 5.4(a) and which is subject
to the reporting, disclosure, and record retention requirements set forth in the
Internal Revenue Code of 1986, as amended (the "IRC"), and Part I of Subtitle B
of Title I of ERISA and the regulations thereunder, each of such requirements
has been fully met on a timely basis.
(c) With respect to each "Employee Benefit Plan" (as defined in Section
3(3) of ERISA) which is listed in Section 5.4(a) and which is subject to Part 4
of Subtitle B of Title I of ERISA, to the best of Company's knowledge, none of
the following now exists or has existed within the six-year period ending on the
date hereof:
(i) Any act or omission constituting a material violation of
Section 402 of ERISA;
(ii) Any act or omission constituting a violation of Section 403 of
ERISA;
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(iii) Any act or omission by Company or any of the Company
Subsidiaries, or by any director, officer or employee thereof, constituting a
violation of Sections 404 and 405 of ERISA;
(iv) Any act or omission by any other person constituting a
violation of Sections 404 or 405 of ERISA;
(v) Any act or omission which constitutes a material violation of
Sections 406 or 407 of ERISA and is not exempted by Section 408 of ERISA or
which constitutes a violation of Section 4975(c) of the IRC and is not exempted
by Sections 4975(c) or (d) of the IRC; or
(vi) Any act or omission constituting a violation of Sections 503,
510 or 511 of ERISA.
(d) All contributions, premiums or other payments due from Company and
the Company Subsidiaries to (or under) any plan listed in Section 5.4(a) have
been fully paid or adequately provided for on the audited financial statements
of Company for the year ended February 29, 1996. All accruals thereon
(including, where appropriate, proportional accruals for partial periods) have
been made in accordance with GAAP consistently applied on a reasonable basis.
(e) Each plan listed pursuant to Section 5.4(a) complies in all
material respects with all applicable requirements of (i) the Age Discrimination
in Employment Act of 1967, as amended, and the regulations thereunder, (ii)
Title VII of the Civil Rights Act of 1964, as amended, and the regulations
thereunder, (iii) Titles I and IV of ERISA, and (iv) Section 401(a) of the IRC.
(f) Each plan listed pursuant to Section 5.4(a) complies in all
material respects with all applicable requirements of the health care
continuation coverage provisions of the Consolidated Omnibus Budget
Reconciliation Act of 1985, and the regulations thereunder.
5.5 Legal Actions and Proceedings. Neither Company nor any of the Company
Subsidiaries is a party to, nor threatened with, any legal action or other
proceeding or investigation before any court, any arbitrator of any kind, or any
government agency, which have not been disclosed to Parent and Buyer and, which
to the best of Company's knowledge, (i) could result in damages or impose a
monetary payment which could reasonably be expected to exceed $5,000,000, or
(ii) could impede the transactions contemplated hereby. There is no labor
dispute, strike, slow-down, or stoppage pending or, to the best of the knowledge
of Company, threatened
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against Company or any of the Company Subsidiaries which would have a material
adverse effect on Company and any of the Company Subsidiaries taken as a whole.
5.6 Retention of Broker or Consultant. No broker, agent, finder,
consultant, or other party (other than legal, auditing, tax and accounting
advisors) has been retained by Company or is entitled to be paid based upon any
agreements, arrangements, or understandings made by Company in connection with
any of the transactions contemplated by this Agreement, except that Company has
engaged Schroder to act as its financial advisor and to render an opinion
regarding the fairness of the Price and the Merger from a financial point of
view. Company has provided Parent and Buyer with a true and accurate copy of its
agreement with Schroder.
5.7 Accuracy of Representations and Warranties. No representation or
warranty by Company, and no statement by Company in the Company Disclosure
Statement or any certificate, agreement, schedule, the Tender Offer Documents,
the Proxy Statement, the Information Statement, or Schedule 14D-9 furnished in
connection with the transactions contemplated by this Agreement or the Merger
Agreement, contains or will contain any untrue statement of a material fact or
omits or will omit to state any material fact necessary to make such
representation, warranty, or statement not misleading; provided, however, that
information as of a later date shall automatically modify information as of an
earlier date.
6. REPRESENTATIONS AND WARRANTIES OF PARENT AND BUYER.
Parent and Buyer jointly and severally represent and warrant to Company
that:
6.1 Corporate Status and Power to Enter into Agreements. Parent is a
limited liability company duly organized, validly existing and in good standing
under the laws of The Netherlands and has all necessary corporate power to enter
into this Agreement and the Merger Agreement and to carry out all of the terms
and provisions hereof and thereof to be carried out by it. Buyer is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Washington and has all necessary corporate power to enter into
this Agreement and the Merger Agreement and to carry out all of the terms and
provisions hereof and thereof to be carried out by it.
6.2 Execution and Delivery of the Agreement.
(a) The execution and delivery of this Agreement and the Merger
Agreement has been duly and validly authorized by the Supervisory and Management
Boards of Parent and the Board of Directors of Buyer.
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(b) This Agreement has been duly executed and delivered by each of
Parent and Buyer and (assuming due execution and delivery by and enforceability
against Company) constitutes a legal and binding obligation of each of Parent
and Buyer except as enforcement may be limited by applicable bankruptcy laws or
other similar laws affecting creditors' rights generally, and except that the
availability of equitable remedies may be limited.
(c) The execution and delivery by each of Parent and Buyer of this
Agreement and the Merger Agreement and the consummation of transactions
contemplated hereby, including the Tender Offer (i) do not violate any provision
of the applicable articles, bylaws, or other charter documents of Parent or
Buyer, any provision of foreign, federal, or state law or any governmental rule
or regulation (assuming (x) receipt of the Government Approvals, and (y)
accuracy of the representations of Company set forth herein), and (ii) do not
require any consent of any person under, conflict with, or result in a breach
of, or accelerate the performance required by any of the terms of, any material
debt instrument, lease, license, covenant, agreement, or understanding to which
either Parent or Buyer is a party or by which it is bound or any order, ruling,
decree, judgment, arbitration, award, or stipulation to which Parent or Buyer is
subject, or constitute a material default thereunder or result in the creation
of any lien, claim, security interest, encumbrance, charge, restriction, or
similar right of any third party upon any of the properties or assets of Parent
or Buyer.
6.3 Retention of Broker or Consultant. No broker, agent, finder, consultant
or other party (other than legal, auditing, tax and accounting advisers and
consultants disclosed to Company) has been retained by Parent or Buyer or is
entitled to be paid based upon any agreements, arrangements or understandings
made by Parent or Buyer in connection with any of the transactions contemplated
by this Agreement.
6.4 Financing. Parent has, or will have, sufficient funds available to
enable Buyer to purchase all of the Shares outstanding and to pay all related
contractual obligations, fees and expenses pursuant to, or becoming payable by
the Surviving Corporation as a result of, this Agreement, the Tender Offer, and
the Merger and shall make such funds available to Buyer or the Surviving
Corporation to consummate the Tender Offer, the Merger, and related transactions
as promptly as practicable following Buyer's becoming obligated to purchase
Shares pursuant to the Tender Offer or Merger.
6.5 Accuracy of Representations and Warranties. No representation or
warranty by Parent or Buyer and no statement by Parent or Buyer in the Tender
Offer Documents or any certificate, agreement or schedule furnished in
connection with the transactions contemplated by this Agreement or the Merger
Agreement, contains or will contain any untrue statement of material fact or
omits or will omit to state any material fact necessary to make such
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<PAGE> 27
representation, warranty, or statement not misleading to Company; provided,
however, that information as of a later date shall be deemed to modify
information as of an earlier date.
7. CONDITIONS TO THE MERGER.
7.1 Conditions to the Obligations of Each Party. The obligations of
Company, Parent and Buyer to consummate the Merger are subject to the
satisfaction of the following conditions:
(a) no provision of any applicable law or regulation and no judgment,
injunction, order, or decree shall prohibit or restrain the consummation of the
Merger;
(b) all Governmental Approvals shall have been obtained, with such
exceptions as would not, individually or in the aggregate, have a material
adverse effect on Parent's or Company's business; and
(c) Buyer shall have purchased Shares pursuant to the Tender Offer
which satisfies the Minimum Condition.
8. EXPENSES.
Parent, Buyer, and Company each agree to pay, without right of
reimbursement from the other party and whether or not the transactions
contemplated by this Agreement or the Merger Agreement shall be consummated, the
costs incurred by each such party incident to the performance of its obligations
under this Agreement and the Merger Agreement, including without limitation,
costs incident to the preparation of this Agreement, the Merger Agreement, the
Tender Offer Documents, the Schedule 14D-9, the Proxy or the Information
Statement (as the case may be) and incident to the consummation of the Merger
and of the other transactions contemplated herein and in the Merger Agreement,
including the fees and disbursements of counsel, accountants, consultants, and
financial advisers employed by such party in connection therewith. Without
limiting the foregoing, Company shall bear its own costs of preparing and
distributing (including postage) the Proxy Statement or the Information
Statement to its shareholders and other information relating to these
transactions.
9. AMENDMENT; TERMINATION.
9.1 Amendment. This Agreement and the Merger Agreement may be amended in
writing by Parent, Buyer and Company at any time prior to the purchase of Shares
pursuant to the Tender Offer.
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9.2 Termination. This Agreement and the Merger Agreement may be terminated
as follows:
(a) By the mutual consent of Parent, Buyer, and Company at any time
prior to the purchase of Shares pursuant to the Tender Offer.
(b) By either Company or Parent, if (i) as a result of the occurrence
of any of the conditions set forth in Annex I hereto, (a) Buyer shall have
failed to commence the Tender Offer within ten (10) days following the date
hereof or (b) the Tender Offer shall have terminated or expired in accordance
with its terms without Buyer having purchased Shares satisfying the Minimum
Condition, or (ii) the Tender Offer has not been consummated by August 31, 1996,
or such other mutually agreed to date.
(c) By Parent, if any person, entity, or "group" (as defined in Section
13(d)(3) of the Exchange Act) other than Parent and Buyer or Dow acquires
beneficial ownership of ten percent (10%) (except in bona fide arbitrage
transactions) or more of the outstanding Shares.
(d) By Parent, Buyer or Company, if prior to the Effective Time, except
for the transactions contemplated by this Agreement, Company and the Company
Subsidiaries shall have, pursuant to Section 4.2(i)(iii), effected or agreed to
effect any Business Combination, and the two (2) business days provided for in
Section 4.2(i)(iii)(b) shall have expired without a modification to this
Agreement which is approved by Company Board of Directors.
(e) By Parent, if prior to the Effective Time, the Board of Directors
of Company shall have withdrawn or materially modified its approval or
recommendation of the Tender Offer, this Agreement, or the Merger.
9.3 Notice. The power of termination hereunder may be exercised by Parent,
Buyer, or Company, as the case may be, only by giving written notice, signed on
behalf of Company by its Chairman of the Board or President, or on behalf of
Parent and Buyer signed by Parent's Chairman of either its Supervisory or
Management Boards.
9.4 Breach of Obligations. If there has been a material breach by either
party in the performance of any of the obligations herein which shall not have
been cured within ten (10) business days after written notice thereof has been
given to the defaulting party, the nondefaulting party shall have the right to
terminate this Agreement upon written notice to the other party. In any event,
the nondefaulting party shall have no obligation to consummate any transaction
or take any further steps toward such consummation contemplated hereunder until
such breach is cured.
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9.5 Termination and Expenses. If this Agreement is terminated pursuant to
Section 9.2, this Agreement shall become void and of no effect with no liability
on the part of any party hereto (unless such termination is the result of a
breach of this Agreement by such party). The termination of this Agreement shall
have no effect on the 1986 Standstill Agreement or the Confidentiality Agreement
(including without limitation the Tender Offer Protocol attached as Exhibit B
thereto). Termination of this Agreement shall not terminate or affect the
obligations of the parties to pay expenses as provided in Section 8, to maintain
the confidentiality of the other party's information pursuant to Section 4.3 or
the Confidentiality Agreement, or the provisions of this Section 9.5 or of
Sections 10.1, 10.3 or 10.4 or the second sentence of Section 10.2 below and
shall not affect any agreement after such termination. If this Agreement shall
be terminated by Parent pursuant to Section 9.2(d), or if any of the events
specified in Section 9.2(d) occurs within twelve (12) months following
termination of this Agreement pursuant to Section 9.2, Company shall pay to
Parent and Buyer, on demand, the aggregate sum of $4,000,000. Any payment
required pursuant to the preceding sentence shall be paid no more than two (2)
business days after demand by wire transfer of immediately available funds.
Company, Parent and Buyer agrees that any termination of this Agreement or any
payment made pursuant to this Section 9.5 shall not in any manner release or be
construed as so releasing the nonterminating party or parties from any liability
or damage to the other party or parties arising out of, in connection with or
otherwise relating to, directly or indirectly, such parties' failure in
performance of any of its covenants or agreements hereunder.
10. MISCELLANEOUS.
10.1 Notices. Any notice or other communication required or permitted under
this Agreement shall be effective only if it is in writing and delivered
personally, or by overnight express or by facsimile or sent by internationally
recognized courier, shipping charges prepaid, addressed as follows:
To Parent and Buyer:
Koninklijke Pakhoed, N.V.
333 Blaak
3011 GB Rotterdam
The Netherlands
Attn: N.J. Westdijk, Chairman, Board of Management
Facsimile No.: 011-31-10-213-0512
With a copy to:
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<PAGE> 30
Nicholas C. Unkovic, Esq.
Graham & James LLP
One Maritime Plaza, Suite 300
San Francisco, California 94111-3492
Facsimile No.: (415) 391-2493
To Company:
Univar Corporation
6100 Carillon Point
Kirkland, Washington 98033
Attn: Paul H. Hough, President and Chief Executive Officer
Facsimile No.: (206) 889-4100
With a copy to:
Richard B. Dodd, Esq.
Preston Gates & Ellis
5000 Columbia Center
701 Fifth Avenue
Seattle, WA 98104-7078
Facsimile No.: (206) 623-7022
or to such other address as either party may designate by notice to the other,
and shall be deemed to have been given upon receipt.
10.2 Binding Agreement. This Agreement is binding upon and is for the
benefit of Parent, Buyer, Company, and the shareholders, officers, directors,
and employees of Company and their respective successors and permitted assigns.
This Agreement is not made for the benefit of any person, firm, corporation, or
association not a party hereto, and no other person, firm, corporation or
association shall acquire or have any right under or by virtue of this
Agreement. No party may assign this Agreement or any of its rights, privileges,
duties, or obligations hereunder without the prior written consent of the other
parties to this Agreement.
10.3 Governing Law. This Agreement shall be governed by and construed in
accordance with the substantive laws of the State of Washington, without giving
effect to such State's choice-of-law principles.
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10.4 Attorneys' Fees. In any action at law or suit in equity in relation to
this Agreement, the Merger Agreement, or the Merger, the prevailing party in
such action or suit shall be entitled to receive a reasonable sum for its
attorneys' fees and all other reasonable costs and expenses incurred in such
action or suit.
10.5 Entire Agreement; Severability. This Agreement, the Confidentiality
Agreement (other than the Tender Offer Protocol attached as Exhibit B thereto),
the 1986 Standstill Agreement and the documents, certificates, agreements,
letters, schedules, and exhibits attached or required to be delivered pursuant
hereto set forth the entire agreement and understanding of the parties in
respect of the transactions contemplated hereby, and supersede all other prior
agreements, arrangements, and understandings relating to the subject matter
hereof. Each provision of this Agreement shall be interpreted in a manner to be
effective and valid under applicable law, but if any provision hereof shall be
prohibited or ruled invalid under applicable law, the validity, legality, and
enforceability of the remaining provisions shall not, except as otherwise
required by law, be affected or impaired as a result of such prohibition or
ruling.
10.6 Counterparts. This Agreement may be executed in several counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
10.7 Waivers. Prior to or at the Effective Time, each of Parent, Buyer, and
Company shall have the right to waive any default in the performance of any term
of this Agreement by the other, to waive or extend the time for the compliance
or fulfillment by the other of any and all of the other's obligations under this
Agreement and to waive any or all of the conditions precedent to its obligations
under this Agreement, except any condition which, if not satisfied, would result
in the violation of any law or applicable governmental regulation. No failure to
exercise and no delay in exercising any right, remedy, or power hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, remedy, or power hereunder preclude any other or further exercise thereof
or the exercise of any other right, remedy, or power provided herein or by law
or in equity. The waiver by any party of the time for performance of any act or
condition hereunder does not constitute a waiver of the act or condition itself.
10.8 Survival of Representations and Warranties. The representations and
warranties contained herein and in any certificate or other writings delivered
pursuant hereto shall survive the purchase of Shares pursuant to the Tender
Offer but shall not survive the consummation of the Merger or the termination of
this Agreement. This Section 10.8 shall not limit any covenant or agreement of
the parties hereto which by its terms contemplates performance after the
Effective Time.
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[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, Parent, Buyer, and Company have each caused this
Agreement and Plan of Reorganization to be signed, effective as of the date
written above.
KONINKLIJKE PAKHOED N.V.
By:_______________________________________
N. J. Westdijk, Chairman, Board
of Management
UNIVAR CORPORATION
By:_______________________________________
Paul H. Hough, President and
Chief Executive Officer
UC ACQUISITION CORP.
By:_______________________________________
N. J. Westdijk, Chairman and
President
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[Signature Page for Agreement and Plan of Reorganization]
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<PAGE> 35
ANNEX I
Notwithstanding any other provision of the Tender Offer, Buyer shall not be
required to accept for payment or, subject to any applicable rules and
regulations of the SEC, including Rule 14e-1(c) under the Exchange Act (relating
to Buyer's obligation to pay for or return tendered Shares after the termination
or withdrawal of the Tender Offer), to pay for any Shares, and may terminate the
Tender Offer, if (i) the Minimum Condition has not been satisfied, (ii)
Governmental Approvals have not been obtained or (iii) at any time on or after
May 31, 1996 and prior to the acceptance for payment of Shares, any of the
following conditions shall occur and be continuing:
(a) there shall be instituted or pending any action or proceeding by any
government or governmental authority or agency, domestic or foreign (i)
challenging or seeking to make illegal, to delay materially or otherwise
directly or indirectly to restrain or prohibit the making of the Tender Offer,
the acceptance for payment of or payment for some of or all the Shares by Buyer
or the consummation by Buyer of the Merger, (ii) seeking to restrain or prohibit
Buyer's ownership or operation (or that of its respective subsidiaries or
affiliates) of all or any material portion of the business or assets of Company
and the Company Subsidiaries, taken as a whole, or of Parent and its
subsidiaries, taken as a whole, or to compel Buyer or any of its subsidiaries or
affiliates to dispose of or hold separate all or any material portion of the
business or assets of Company and the Company Subsidiaries, taken as a whole, or
of Parent and its subsidiaries, taken as a whole, (iii) seeking to impose or
confirm material limitations on the ability of Parent or any of its subsidiaries
or affiliates to effectively exercise full rights of ownership of the Shares,
including, without limitation, the right to vote any Shares acquired or owned by
Parent or any of its subsidiaries or affiliates on all matters properly
presented to Company's shareholders, (iv) seeking to require divestiture by
Parent or any of its subsidiaries or affiliates of any Shares, or (v) that
otherwise is likely to materially adversely affect Company and the Company
Subsidiaries, taken as a whole, or Parent and its subsidiaries, taken as a
whole;
(b) there shall be any action taken, or any statute, rule, regulation,
injunction, order or decree proposed, enacted, enforced, promulgated, issued or
deemed applicable to Company or any of the Company Subsidiaries or the Tender
Offer or the Merger, by any court, government or governmental authority or
agency, domestic or foreign other than the application of the waiting period
provisions of the HSR Act or Exon-Florio to the Tender Offer or the Merger, that
is likely, directly or indirectly, to result in any of the consequences referred
to in clauses (i) through (v) of paragraph (a) above;
(c) there shall have occurred (i) any general suspension of trading in, or
limitation on prices for, securities on the New York Stock Exchange, which
suspension or limitation shall
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continue for at least three consecutive trading days, (ii) a declaration of a
banking moratorium or any suspension of payments in respect of banks in the
United States, The Netherlands, Japan or France, which declaration or suspension
shall continue for at least three consecutive business days (iii) any limitation
(whether or not mandatory) by any government, domestic, foreign or
supranational, or Governmental Entity on, or other event that, in the reasonable
judgment of Parent, might affect, the extension of credit by banks or other
lending institutions, (iv) a commencement of a war or armed hostilities or other
national or international calamity directly or indirectly involving the United
States, The Netherlands, Japan or France, (v) in the case of any of the
foregoing existing at the time of the commencement of the Tender Offer, a
material acceleration or worsening thereof; or (vii) any significant change in
United States, The Netherlands, Japan or France currency exchange rates or any
suspension of, or limitation on, the markets therefor (whether or not
mandatory);
(d) subject to the provisions of Section 9.4 of the Agreement, Company
shall have breached or failed to perform in any material respect, any of its
covenants or agreements under this Agreement or the Merger Agreement, or any of
the representations and warranties of Company set forth in the Merger Agreement
shall not be true in any respect which is material to Company and the Company
Subsidiaries as a whole, in each case when made or at any time prior to
consummation of the Tender Offer as if made at and as of such time, provided,
however, that for purposes of this Annex I, Company shall not be deemed to have
breached its representation and warranty contained in Section 5.5 with respect
to any legal action or other proceeding or investigation which arises after May
31, 1996 which it is not required to disclose pursuant to filings made by it
pursuant to the Exchange Act without regard to any time periods covered by, or
due dates of, such filings;
(e) the Agreement shall have been terminated in accordance with its terms;
or
(f) the Board of Directors of Company shall have withdrawn or materially
modified its approval or recommendation of the Tender Offer, the Agreement or
the Merger;
which, in the reasonable judgment of Parent in any such case, and regardless of
the circumstances giving rise to any such condition, makes it inadvisable to
proceed with such acceptance for payment or payment.
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ARTICLES OF MERGER
OF
UC ACQUISITION CORP.
AND
UNIVAR CORPORATION
To the Secretary of State
State of Washington
Pursuant to the provisions of the Washington Business Corporation Act
("WBCA"), the domestic business corporations herein named do hereby submit the
following Articles of Merger.
1. Annexed hereto and made a part hereof is the Plan of Merger for
merging UC Acquisition Corp. with and into Univar Corporation as adopted by
resolution at a meeting by the Board of Directors of UC Acquisition Corp. on
___________, 1996 and by resolution adopted at a meeting by the Board of
Directors of Univar Corporation on ____________, 1996.
2. The merger was duly approved by the shareholders of UC Acquisition
Corp. and of Univar Corporation pursuant to WBCA 23B.11.030.
3. The effective time and date of the merger herein provided for shall
be the date that the Articles of Merger are filed with the Washington Secretary
of State.
Executed on _________________, 1996.
UNIVAR CORPORATION
By:____________________________
Name:
Capacity:
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EXHIBIT 4
PLAN OF MERGER
PLAN OF MERGER adopted by UC Acquisition Corp., a business corporation
organized under the laws of the State of Washington, by resolution of its Board
of Directors on _________________, 1996, and adopted by Univar Corporation, a
business corporation organized under the laws of the State of Washington, by
resolution of its Board of Directors on _________________, 1996.
1. UC Acquisition Corp. and Univar Corporation shall, pursuant to the
provisions of the Washington Business Corporation Act, be merged with and into a
single corporation, to wit, Univar Corporation. Univar Corporation shall be
the surviving corporation at the effective time and date of the merger and is
sometimes hereinafter referred to as the "surviving corporation," and shall
continue to exist as said surviving corporation under its present name pursuant
to the provisions of the Washington Business Corporation Act. The separate
existence of UC Acquisition Corp., which is sometimes hereinafter referred to as
the "non-surviving corporation," shall cease at the effective time and date of
the merger in accordance with the provisions of the Washington Business
Corporation Act.
2. The articles of incorporation of the surviving corporation shall be
the Amended and Restated Articles of Incorporation of said surviving corporation
at the effective time and date of the merger, a copy of which is attached hereto
as Exhibit A.
3. The bylaws of the surviving corporation shall be the Amended and
Restated Bylaws of said surviving corporation at the effective time and date of
the merger and will continue in full force and effect until changed, altered, or
amended as therein provided and in the manner prescribed by the provisions of
the Washington Business Corporation Act.
4. The effective date of merger shall be the date upon which the
Articles of Merger are filed with the Secretary of State. Upon the effective
date of the merger: the separate corporate existence of UC Acquisition Corp.
shall cease; title to all real estate and other property owned by UC Acquisition
Corp. or Univar Corporation shall be vested in Univar Corporation without
reversion or impairment; and the surviving corporation shall have all
liabilities of UC Acquisition Corp. and Univar Corporation. Any proceeding
pending by or against UC Acquisition Corp. or Univar Corporation may be
continued as if such merger did not occur, or the surviving corporation may be
substituted in the proceeding for UC Acquisition Corp.
5. Each issued share of the non-surviving corporation shall, at the
effective time and date of the merger, be converted into one share of the
surviving corporation. The issued
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shares of the surviving corporation existing prior to the merger shall be
cancelled and retired and shall cease to exist, and holders of certificates
formerly representing shares of the surviving corporation, other than those
shares held by UC Acquisition Corp. and its affiliates, shall cease to have any
rights with respect thereto other than a right to receive [$____] per share or
any dissenters' rights they have perfected pursuant to Section 23B.13.210 of the
Washington Business Corporations Act. Any shares of Univar Corporation in the
treasury of Univar Corporation on the effective date of the merger shall be
surrendered to the surviving corporation for cancellation,and no shares of the
surviving corporation shall be issued in respect thereof.
6. Any shareholder of Univar Corporation who has the right to dissent
from this merger as provided in Section 23B.13.020 of the Washington Business
Corporation Act and who so dissents in accordance with the requirements of
Sections 23B.11.020 through 23B.13.280 of the Washington Business Corporation
Act, shall be entitled, upon surrender of the certificate or certificates
representing certificated shares or upon imposition of restrictions of transfer
of uncertificated shares, to receive payment of the fair value of such
shareholder's shares as provided pursuant to Section 23B.13.250 of the
Washington Business Corporation Act.
7. Unless the conditions of Section 23B.11.040 of the Washington
Business Corporation Act are satisfied, the Plan of Merger herein made and
approved shall be submitted to the shareholders of the non-surviving corporation
and the shareholders of the surviving corporation for their approval or
rejection in the manner prescribed by the provisions of the Washington Business
Corporation Act.
8. In the event that the Plan of Merger shall have been approved by the
shareholders entitled to vote of the non-surviving corporation and by the
shareholders entitled to vote of the surviving corporation in the manner
prescribed by the provisions of the Washington Business Corporation Act, the
non-surviving corporation and the surviving corporation hereby stipulate that
they will cause to be executed and filed and/or recorded any document or
documents prescribed by the laws of the State of Washington, and that they will
cause to be performed all necessary acts therein and elsewhere to effectuate the
merger.
9. The Board of Directors and the proper officers of the non-surviving
corporation and of the surviving corporation, respectively, are hereby
authorized, empowered, and directed to do any and all acts and things, and to
make, execute, deliver, file, and/or record any and all instruments, papers, and
documents which shall be or become necessary, proper, or convenient to carry out
or put into effect any of the provisions of this Plan of Merger or of the merger
herein provided for.
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10. The address of the registered office of the surviving corporation
shall be _______________________________________________________________.
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EXHIBIT B
OFFICER AND DIRECTOR AGREEMENT
May 31, 1996
Koninklijke Pakhoed, N.V.
333 Blaak
3011 GB Rotterdam
The Netherlands
Gentlemen:
In consideration for the proposed business combination in which Univar
Corporation ("Company") will be merged with an indirect wholly owned subsidiary
("Buyer") of Koninklijke Pakhoed, N.V. ("Parent") (the "Merger"), the
undersigned Company officer or member of the Board of Directors of Company
hereby agrees that subject to the discharge of his fiduciary responsibilities,
in his capacity as an Officer and/or a member of the Board of Directors, he
will, as applicable:
(a) vote in favor of the Merger, and the execution and delivery of the
Agreement and Plan of Reorganization among Parent, Company, and Buyer
(the "Merger Agreement") and all related agreements and all actions
contemplated thereby;
(b) vote to recommend to Company shareholders acceptance of the Tender
Offer to be made by Buyer for Company Common Shares pursuant to
Buyer's proposed Offer to Purchase Shares and use his reasonable
efforts to cause the shareholders of Company to tender Company Common
Shares pursuant to such Offer to Purchase Shares;
(c) use his reasonable efforts to cause the shareholders of Company to
adopt and approve the Merger Agreement and the transactions
contemplated thereby; and
(d) vote to authorize Company to consent to and/or encourage the execution
of agreements by a sufficient number of Company shareholders to assure
satisfaction of the Minimum Condition of Buyer's proposed Offer to
Purchase Shares.
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The undersigned acknowledges that Parent has entered into the Merger Agreement
in reliance on the agreements herein set forth and on that basis covenants and
agrees that he will tender all Company Common Shares held of record or
beneficially by him (representing all shares as to which the undersigned and/or
his spouse have sole voting power) as of the date hereof or hereinafter acquired
to Buyer pursuant to Buyer's proposed Offer to Purchase Shares; provided that
notwithstanding the foregoing this letter agreement shall terminate and have no
further effect if the Board of Directors of Company approves another "Business
Combination" as permitted by Section 4.2(i) of the Merger Agreement. All terms
not otherwise defined in this letter agreement shall have the same meaning as in
the Merger Agreement
Sincerely yours,
_________________________________
Print Name:
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EXHIBIT C
SHAREHOLDER AGREEMENT
MAY 31, 1996
Koninklijke Pakhoed, N.V.
333 Blaak
3011 G.B. Rotterdam
The Netherlands
Gentlemen:
In consideration for the proposed tender offer for shares of Common Shares of
Univar Corporation ("Company") to be made by a subsidiary of yours (the "Buyer")
and to be followed by the merger of Company with Buyer (the "Merger"), the
undersigned agrees that, in its capacity as a shareholder of Company, it will:
(a) tender all shares of Company Common Shares held of record or beneficially
by it (representing all shares as to which the undersigned has sole or
shared voting power) as of the date hereof or hereinafter acquired to Buyer
pursuant to Buyer's proposed Offer to Purchase Shares;
(b) provide all consents and approvals pursuant to the Distributor Agreement by
and between the undersigned and Van Waters & Rogers, Inc., dated March 8,
1996, required to consummate the Merger and the transactions contemplated
by the Agreement and Plan of Reorganization among you, Company and Buyer;
and
(c) only at your request, (i) exercise its option to purchase all or such
portion required of the 101,874 shares of Series A Junior Participating
Convertible Preferred Shares (the "Preferred Shares"), which the
undersigned is entitled to purchase pursuant to the Amended and Restated
Agreement of Purchase and Sale of Stock (the "Stock Purchase Agreement")
entered into by and between the undersigned and Company, dated May 13,
1994, (ii) convert all the Preferred Shares the undersigned acquires
pursuant to the Stock Purchase Agreement into Company Common Shares, and
(iii) tender all shares of Company Common Shares acquired pursuant to such
conversion of the Preferred Shares to Buyer pursuant to Buyer's proposed
Offer to Purchase Shares. If such request is not made and the option is not
exercised, you will pay to us or cause the surviving corporation to pay us
on consummation of the Merger, the difference between the aggregate
exercise price of the option to acquire the Preferred Shares and the
aggregate price that would
3
<PAGE> 44
have been paid in the tender offer for the shares of Common Shares which
would have been issued pursuant to the conversion of the Preferred Shares.
Notwithstanding any other provision of this letter, the undersigned will be
relieved of its obligations under paragraphs (a), (b) and (c) above if (i) a
competing offer to purchase Company and/or its shares of Common Shares at a
price greater than $19.45 per share is made by a third party prior to
consummation of the Merger, or (ii) Buyer's price for the purchase of the
undersigned's shares of Common Stock pursuant to the Offer to Purchase is
adjusted to a price which is less than $19.45 per share.
Sincerely yours,
THE DOW CHEMICAL COMPANY
By: ___________________________
Name: ________________________
Title: ________________________
4
<PAGE> 1
ARTICLES OF MERGER
OF
UC ACQUISITION CORP.
AND
UNIVAR CORPORATION
To the Secretary of State
State of Washington
Pursuant to the provisions of the Washington Business Corporation Act
("WBCA"), the domestic business corporations herein named do hereby submit the
following Articles of Merger.
1. Annexed hereto and made a part hereof is the Plan of Merger for
merging UC Acquisition Corp. with and into Univar Corporation as adopted by
resolution at a meeting by the Board of Directors of UC Acquisition Corp. on
___________, 1996 and by resolution adopted at a meeting by the Board of
Directors of Univar Corporation on ____________, 1996.
2. The merger was duly approved by the shareholders of UC Acquisition
Corp. and of Univar Corporation pursuant to WBCA 23B.11.030.
3. The effective time and date of the merger herein provided for shall
be the date that the Articles of Merger are filed with the Washington Secretary
of State.
Executed on _________________, 1996.
UNIVAR CORPORATION
By:____________________________
Name:
Capacity:
3
<PAGE> 2
EXHIBIT 4
PLAN OF MERGER
PLAN OF MERGER adopted by UC Acquisition Corp., a business corporation
organized under the laws of the State of Washington, by resolution of its Board
of Directors on _________________, 1996, and adopted by Univar Corporation, a
business corporation organized under the laws of the State of Washington, by
resolution of its Board of Directors on _________________, 1996.
1. UC Acquisition Corp. and Univar Corporation shall, pursuant to the
provisions of the Washington Business Corporation Act, be merged with and into a
single corporation, to wit, Univar Corporation. Univar Corporation shall be
the surviving corporation at the effective time and date of the merger and is
sometimes hereinafter referred to as the "surviving corporation," and shall
continue to exist as said surviving corporation under its present name pursuant
to the provisions of the Washington Business Corporation Act. The separate
existence of UC Acquisition Corp., which is sometimes hereinafter referred to as
the "non-surviving corporation," shall cease at the effective time and date of
the merger in accordance with the provisions of the Washington Business
Corporation Act.
2. The articles of incorporation of the surviving corporation shall be
the Amended and Restated Articles of Incorporation of said surviving corporation
at the effective time and date of the merger, a copy of which is attached hereto
as Exhibit A.
3. The bylaws of the surviving corporation shall be the Amended and
Restated Bylaws of said surviving corporation at the effective time and date of
the merger and will continue in full force and effect until changed, altered, or
amended as therein provided and in the manner prescribed by the provisions of
the Washington Business Corporation Act.
4. The effective date of merger shall be the date upon which the
Articles of Merger are filed with the Secretary of State. Upon the effective
date of the merger: the separate corporate existence of UC Acquisition Corp.
shall cease; title to all real estate and other property owned by UC Acquisition
Corp. or Univar Corporation shall be vested in Univar Corporation without
reversion or impairment; and the surviving corporation shall have all
liabilities of UC Acquisition Corp. and Univar Corporation. Any proceeding
pending by or against UC Acquisition Corp. or Univar Corporation may be
continued as if such merger did not occur, or the surviving corporation may be
substituted in the proceeding for UC Acquisition Corp.
5. Each issued share of the non-surviving corporation shall, at the
effective time and date of the merger, be converted into one share of the
surviving corporation. The issued
4
<PAGE> 3
shares of the surviving corporation existing prior to the merger shall be
cancelled and retired and shall cease to exist, and holders of certificates
formerly representing shares of the surviving corporation, other than those
shares held by UC Acquisition Corp. and its affiliates, shall cease to have any
rights with respect thereto other than a right to receive [$____] per share or
any dissenters' rights they have perfected pursuant to Section 23B.13.210 of the
Washington Business Corporations Act. Any shares of Univar Corporation in the
treasury of Univar Corporation on the effective date of the merger shall be
surrendered to the surviving corporation for cancellation,and no shares of the
surviving corporation shall be issued in respect thereof.
6. Any shareholder of Univar Corporation who has the right to dissent
from this merger as provided in Section 23B.13.020 of the Washington Business
Corporation Act and who so dissents in accordance with the requirements of
Sections 23B.11.020 through 23B.13.280 of the Washington Business Corporation
Act, shall be entitled, upon surrender of the certificate or certificates
representing certificated shares or upon imposition of restrictions of transfer
of uncertificated shares, to receive payment of the fair value of such
shareholder's shares as provided pursuant to Section 23B.13.250 of the
Washington Business Corporation Act.
7. Unless the conditions of Section 23B.11.040 of the Washington
Business Corporation Act are satisfied, the Plan of Merger herein made and
approved shall be submitted to the shareholders of the non-surviving corporation
and the shareholders of the surviving corporation for their approval or
rejection in the manner prescribed by the provisions of the Washington Business
Corporation Act.
8. In the event that the Plan of Merger shall have been approved by the
shareholders entitled to vote of the non-surviving corporation and by the
shareholders entitled to vote of the surviving corporation in the manner
prescribed by the provisions of the Washington Business Corporation Act, the
non-surviving corporation and the surviving corporation hereby stipulate that
they will cause to be executed and filed and/or recorded any document or
documents prescribed by the laws of the State of Washington, and that they will
cause to be performed all necessary acts therein and elsewhere to effectuate the
merger.
9. The Board of Directors and the proper officers of the non-surviving
corporation and of the surviving corporation, respectively, are hereby
authorized, empowered, and directed to do any and all acts and things, and to
make, execute, deliver, file, and/or record any and all instruments, papers, and
documents which shall be or become necessary, proper, or convenient to carry out
or put into effect any of the provisions of this Plan of Merger or of the merger
herein provided for.
5
<PAGE> 4
10. The address of the registered office of the surviving corporation
shall be _______________________________________________________________.
6
<PAGE> 1
[UNIVAR CORPORATION LETTERHEAD]
APRIL 22, 1996
VIA FAX NO. 31-10-213-0512
Dr. Sjoerd D. Eikelboom
Royal Pakhoed N.V.
333 Blaak
3011 GB Rotterdam
The Netherlands
Re: Univar Corporation
Royal Pakhoed N.V.
Environmental Due Diligence Agreement
("DUE DILIGENCE AGREEMENT")
Dear Sjoerd:
Reference is made to the Confidentiality and Standstill Agreement in
connection with a possible transaction involving Royal Pakhoed N.V. ("PAKHOED")
and Univar Corporation ("UNIVAR") dated April 12, 1996 and the "TENDER OFFER
PROTOCOL" attached thereto as Exhibit B. The Confidentiality and Standstill
Agreement contemplates performance of environmental due diligence of Univar to
be conducted on behalf of Pakhoed by Pakhoed's legal counsel, Graham & James
("G&J"), and Pakhoed's environmental consultant, Harding Lawson Associates
("HLA"). Both G&J and HLA have provided professional services for Univar in the
past and HLA continues to provide professional services for Univar. Univar and
Pakhoed hereby consent to G&J's and HLA's representation of Pakhoed in this
proposed transaction. Any defined terms beginning with an initial capital used
herein which are not defined in this Due Diligence Agreement shall have the same
meaning as in the Confidentiality and Standstill Agreement. In consideration of
the continued good faith negotiations between Pakhoed and Univar and the mutual
benefits accruing to Pakhoed and Univar by virtue of their cooperation in this
due diligence effort, Pakhoed and Univar agree as follows:
1. Pakhoed and Univar agree to cooperate each with the other and the
other's legal counsel as well as with HLA as provided in this Due
Diligence Agreement. Any approval required of or from Pakhoed or Univar
pursuant to this Due Diligence Agreement shall not be unreasonably
withheld, conditioned or delayed. To the extent necessary or
appropriate, Pakhoed and Univar and/or their legal counsel shall meet
each with the other and with HLA, in person or via conference call, to
implement this Due Diligence Agreement. The
Value Growth
<PAGE> 2
Dr. Sjoerd D. Eikelboom
Due Diligence Agreement
April 22, 1996
Page 2
scope of, approach for and other terms concerning as well as the work
to be performed by HLA and G&J, and the time frame in which such work
shall be accomplished, are stated in the attached Exhibit A, "Due
Diligence Approach" ("SCOPE"), which is incorporated fully by this
reference.
2. Pakhoed shall pay all fees and costs of HLA's and G&J's performance of
the Scope. Univar shall pay the costs of its legal counsel and the
cost of providing a location in the Seattle area for file review as
contemplated in the Scope. Pakhoed shall pay all other costs of its
due diligence and the cost of providing any document review facility
outside of the Seattle area.
3. On the terms and for the limited purposes provided in the Scope, Univar
grants Pakhoed, G&J and HLA access to its files and personnel (as
identified in the Scope) to perform the Scope.
4. All preliminary and final results of due diligence shall be the sole
property of Pakhoed and Pakhoed shall not provide Univar any information
concerning its due diligence.
5. All results, reports, and any information obtained or developed by
Pakhoed, HLA or G&J pursuant to this Due Diligence Agreement and all
results, reports, and any other information obtained or developed
using information obtained in this due diligence shall constitute
"EVALUATION MATERIAL" under the Confidentiality and Standstill
Agreement, shall be subject to the terms and conditions therein and
shall be referred to herein as the "ENVIRONMENTAL EVALUATION
MATERIAL." All Environmental Evaluation Material shall be G&J attorney
work product and shall be protected from disclosure by G&J's attorney-
client privilege with Pakhoed and the attorney work product privilege,
as well as other applicable privileges, and may not be provided to
or used by any person other than those employed by Pakhoed and its
Representatives who have an actual need to know such information, and
who shall be advised of and agree to be bound by the Confidentiality
and Standstill Agreement before Evaluation Material is provided to them.
6. All such results, reports and documentary information shall bear, as a
header on each page, the following legend:
PRIVILEGED AND CONFIDENTIAL
PREPARED AT THE DIRECTION OF PAKHOED LEGAL COUNSEL
DO NOT REPRODUCE OR DISTRIBUTE
<PAGE> 3
Dr. Sjoerd D. Eikelboom
Due Diligence Agreement
April 22, 1996
Page 3
7. UNLESS SPECIFIC ARRANGEMENTS ARE MADE, FAXES AND OTHER WRITTEN NOTICES
ARE TO BE SENT ONLY TO SCOTT VOKEY WHOSE ADDRESS AND PHONE NUMBER IS:
Scott R. Vokey
Preston Gates & Ellis
5000 Columbia Center
701 Fifth Avenue
Seattle, Washington 98104-7078
Tel: (206) 623-7580
Tel: (206) 467-7605 (direct)
Fax: (206) 623-7022
8. This Due Diligence Agreement shall be effective when signed by
authorized representatives of Pakhoed, Univar, G&J and HLA and shall
terminate upon the successful conclusion of the merger contemplated by
the Confidentiality and Standstill Agreement. Each of the individuals
signing below on behalf of Pakhoed, G&J, and HLA represents and
warrants to Univar that he or she is authorized to sign on behalf of
the entity he or she represents. This letter agreement may be executed
in two or more counterparts by facsimile signature, all of which taken
together shall constitute one instrument.
9. Pakhoed acknowledges that upon the execution of this Due Diligence
Agreement and agreement on the minimum acceptable tender offer price
per Section 2.3 of the Tender Offer Protocol, the two year standstill
provisions of the Confidentiality and Standstill Agreement are hereby
effective.
Sincerely,
Univar Corporation
/s/William A. Butler
William A. Butler
Vice President, General Counsel
and Corporate Secretary
<PAGE> 4
Dr. Sjoerd D. Eikelboom
Due Diligence Agreement
April 22, 1996
Page 4
AGREED TO AND ACCEPTED:
<TABLE>
<CAPTION>
Royal Pakhoed N.V. Graham & James
<S> <C>
By:_____________________________ By:________________________
Name:___________________________ Name:______________________
Title:__________________________ Title:_____________________
Date:___________________________ Date:______________________
</TABLE>
Harding Lawson Associates
By: /s/ Victor R. Johnson, Jr.
-----------------------------
Name: /s/ Victor R. Johnson, Jr.
---------------------------
Title: Senior Vice President
--------------------------
Date: 4/24/96
---------------------------
cc: Wayne E. Grotheer, with Exhibit A
Joel S. Summer, with Exhibit A
Scott R. Vokey, with Exhibit A
Richard B. Dodd, with Exhibit A
Maureen Bennett, with Exhibit A
Nicholas Unkovic, with Exhibit A
Victor Johnson, with Exhibit A
<PAGE> 5
Dr. Sjoerd D. Eikelboom
Due Diligence Agreement
April 22, 1996
Page 4
AGREED TO AND ACCEPTED:
<TABLE>
<CAPTION>
Royal Pakhoed N.V. Graham & James
<S> <C>
By: /s/ S. Eikelboom By: /s/ Nicholas Unkovic
---------------------------- --------------------------
Name: /s/ S. Eikelboom Name: /s/ Nicholas Unkovic
-------------------------- -------------------------
Title: Director Title: Partner
------------------------- ------------------------
Date: 4/25/96 Date: 4/25/96
-------------------------- -------------------------
</TABLE>
Harding Lawson Associates
By:____________________________
Name:__________________________
Title:_________________________
Date:__________________________
cc: Wayne E. Grotheer, with Exhibit A
Joel S. Summer, with Exhibit A
Scott R. Vokey, with Exhibit A
Richard B. Dodd, with Exhibit A
Maureen Bennett, with Exhibit A
Nicholas Unkovic, with Exhibit A
Victor Johnson, with Exhibit A
<PAGE> 6
Exhibit A
Due Diligence Approach
April 22, 1996
A. Guiding Principles
Univar and Pakhoed wish to permit Pakhoed to evaluate (solely for
purposes of the proposed transaction) environmental and product, toxic tort and
similar liabilities related to Univar on the schedule set forth in the Protocol,
while preserving the confidentiality of the proposed transaction and of the
information collected during due diligence.
Therefore, except as otherwise consented to by Univar, information
shall be gathered only from the sources and in accordance with the procedures
specified in this Due Diligence Approach and not from Univar facilities (other
than its Kirkland headquarters) or through contacts with regulatory agencies.
It is expected that some information will be needed from excluded sources, but
Univar will make that information available only as agreed by the parties, for
example by having Univar personnel or counsel obtain the information in a
manner designed to protect confidentiality.
Subject to the limitations in this Due Diligence Approach, the due
diligence shall cover all known active and inactive Univar sites, in the US and
elsewhere, including offsite locations where Univar may be a responsible/liable
party.
It has been estimated that this due diligence should take six weeks,
but the Protocol requires that the due diligence be completed by May 24, 1996,
which is expected to allow less than a month for due diligence. Therefore, both
parties will make appropriate personnel and resources available on a priority
basis to accomplish the due diligence by May 24, 1996.
The due diligence will be conducted in a cooperative fashion designed to
limit to the extent possible the need to obtain information from excluded
sources while providing as much information as possible, keeping in mind the
practical limitations imposed by the time available and the need for
confidentiality.
B. Personnel
Graham and James ("G&J") will retain Harding Lawson Associates ("HLA").
Pakhoed's due diligence will be conducted by representatives of Pakhoed, HLA
and G&J (the "Pakhoed team"). While Pakhoed retains the right to designate its
team, it is expected that those representatives will for most purposes include:
Rino Wong (Pakhoed); Vic Johnson ("VJ"), Larry Floyd ("LF") and Jim Briedlow
("JB") (HLA); and Maureen Bennett and either Andy Port or
A-1
<PAGE> 7
Rupert Hansen (G&J). Others who may be involved on a less frequent basis include
Sjoerd Eikelboom, Roy Wansik and Jean Warren (Pakhoed) and Nick Unkovic (G&J).
The Pakhoed team will have its primary contacts with Wayne Grotheer
("WG") and Joel Summer ("JS") (Univar) and Scott Vokey ("SRV") of Preston Gates
& Ellis ("PG&E"), but may also have contacts with Jim Wiborg, Paul Hough, Gary
Pruitt, Bill Butler and Rick Dodd (PG&E).
C. Information Sources
Univar will make available in an offsite data room at a site to be
designated by Pakhoed:
1) all relevant and reasonably accessible information
located in Univar's Kirkland headquarters or
headquarters storage or under PG&E's control,
2) Univar's FY 1997 capital budget,
3) to the extent reasonably available, existing lists of
known active and inactive Univar sites, including third
party sites where Univar may be a responsible/liable
party, and
4) on a priority basis, the assistance of the Univar
personnel and representatives described above.
The Pakhoed team will also have access to information:
1) contained in the files of Pakhoed, G&J and HLA (provided
that HLA personnel other than VJ, LF and JB who have
worked for Univar may not be informed of this project or
that such information is being used),
2) available from commercially available data bases such as
commercial electronic due diligence services (such as
EDR) and from commercial serial photograph services,
city directory services and historical mapping services
(such as Sanborn),
3) available from other sources with prior permission of
Univar, and
4) derived from discussions with the Univar personnel and
representatives described above.
Except as described above, the Pakhoed team will not, with respect to
Univar and without prior permission from Univar
A-2
<PAGE> 8
1) contact any present or former Univar officers,
directors, employees, attorneys, consultants, agents or
other advisors, including without limitation present or
former project managers,
2) contact any regulatory agency or its present or former
personnel, contractors, consultants, attorneys or
advisors, or review or request copies of any regulatory
agency file,
3) visit, or request from any third person information
concerning, (a) any present or former Univar leased or
owned site or (b) any third party site at which Univar
is or may be a potentially responsible/liable party, or
4) review (a) the files of project managers or (b) files
located at Univar facilities.
It is nevertheless expected that, with respect to a limited number of sites or
pending or threatened litigation, information will be required from one or more
of the above excluded sources. It is also expected that information that cannot
now reasonably be anticipated will be required. The Pakhoed team will limit
requests for such information to the extent possible, and Univar will cooperate
to obtain such information in a manner agreeable to both Univar and Pakhoed.
With respect to regulatory agency contacts, due to the difficulty in scheduling
appointments with such agencies, the parties will use their best efforts to
identify and pursue any such required contacts as early as possible in the
process.
D. Due Diligence Process and Schedule
The due diligence process will commence upon execution of this
agreement and agreement on the minimum acceptable tender offer price per
Section 2.3 of the Protocol, extending the Pakhoed standstill period to two
years. These conditions are expected to be fulfilled on April 26, 1996.
Univar will make the information it is to provide (described above)
available in the data room on April 29, 1996. The due diligence will commence
that day with interviews of WG, JS and SRV, and will be completed no later than
May 24, 1996. The parties will make available the personnel and resources
necessary to accomplish this schedule.
E. Uses of Due Diligence Information
Neither Pakhoed, G&J, nor HLA will use any information developed during
the due diligence for any purpose other than evaluation of the potential
transaction, including but not limited to any attempt to require Univar to set
environmental reserves, change any accounting policy, force Univar to make any
disclosure, or in connection with any Univar project.
Univar will not be required to develop any new cost estimates, and
Pakhoed, G&J and HLA will keep confidential and not disclose to Univar or to
any third parties any cost estimates or
A-3
<PAGE> 9
other information that Pakhoed, G&J or HLA may develop, in the course of the
due diligence investigation.
Pakhoed, HLA and G&J shall destroy all information developed pursuant
to this due diligence protocol, including without limitation notes, schedules,
and reports, if the potential transaction does not close in accordance with the
Confidentiality and Standstill Agreement dated April 12, 1996.
A-4
<PAGE> 1
May 31, 1996
William A. Butler
Corporate Secretary
Univar Corporation
6100 Carillon Point
Kirkland, WA 98033
RE: CONTINGENT RESIGNATION
Dear Bill:
Pursuant to Section 4.2(p) of the Agreement and Plan of Reorganization
dated as of May 31, 1996, by and among Royal Pakhoed N.V., UC Acquisition Corp.,
and Univar Corporation ("Univar")(the "Agreement"), I hereby tender my
resignation as a director of Univar, which shall be effective as of and subject
to the consummation of the Tender Offer (as defined in the Agreement).
<PAGE> 1
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING COMMON SHARES
OF
UNIVAR CORPORATION
AT
$19.45 NET PER SHARE
BY
UC ACQUISITION CORP.
AN INDIRECT SUBSIDIARY OF
ROYAL PAKHOED N.V.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 8:00 P.M.,
NEW YORK CITY TIME, ON MONDAY, JULY 15, 1996,
UNLESS THE OFFER IS EXTENDED.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (i) THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION DATE THAT NUMBER OF SHARES
THAT WOULD, WHEN AGGREGATED WITH THE SHARES ALREADY OWNED BY BUYER AND ITS
AFFILIATES, REPRESENT A MAJORITY OF ALL OUTSTANDING SHARES ON THE DATE OF
PURCHASE, AND (ii) ALL GOVERNMENTAL APPROVALS (AS DEFINED HEREIN) FOR THE OFFER
HAVING BEEN OBTAINED OR WAIVED BY PARENT AND BUYER AND APPLICABLE LAWS COMPLIED
WITH. SEE THE INTRODUCTION AND SECTIONS 1 AND 12.
THIS TRANSACTION HAS NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION (THE "SEC" OR THE "COMMISSION") NOR HAS THE COMMISSION
PASSED UPON THE FAIRNESS OR MERITS OF SUCH TRANSACTION NOR UPON THE ACCURACY OR
ADEQUACY OF THE INFORMATION CONTAINED IN THIS DOCUMENT. ANY REPRESENTATION TO
THE CONTRARY IS UNLAWFUL.
------------------------
IMPORTANT
Any shareholder desiring to tender all or any portion of such shareholder's
common shares (the "Shares") of Univar Corporation, a Washington corporation
("Company") should either (i) complete and sign the Letter of Transmittal (or a
facsimile thereof) in accordance with the instructions in the Letter of
Transmittal, have such shareholder's signature thereon guaranteed if required by
Instruction 1 to the Letter of Transmittal, mail or deliver the Letter of
Transmittal (or such facsimile), or, in the case of a book-entry transfer
effected pursuant to the procedure set forth in Section 2 of this Offer to
Purchase, an Agent's Message (as defined herein), and any other required
documents to the Depositary (as defined herein) and either deliver the
certificates for such Shares to the Depositary along with the Letter of
Transmittal (or facsimile) or deliver such Shares pursuant to the procedure for
book-entry transfer set forth in Section 2 of this Offer to Purchase, or (ii)
request such shareholder's broker, dealer, bank, trust company or other nominee
to effect the transaction for such shareholder. A shareholder having Shares
registered in the name of a broker, dealer, bank, trust company or other nominee
must contact such broker, dealer, bank, trust company or other nominee if such
shareholder desires to tender such Shares.
If a shareholder desires to tender Shares and such shareholder's
certificates for Shares are not immediately available or the procedure for
book-entry transfer cannot be completed on a timely basis, or time will not
permit all required documents to reach the Depositary prior to the Expiration
Date, such shareholder's tender may be effected by following the procedure for
guaranteed delivery set forth in Section 2.
Questions and requests for assistance or for additional copies of this
Offer to Purchase, the Letter of Transmittal and the Notice of Guaranteed
Delivery may be directed to the Information Agent at its address and telephone
number set forth on the back cover of this Offer to Purchase.
June 7, 1996
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
INTRODUCTION....................................................................... 3
SPECIAL FACTORS.................................................................... 4
THE TENDER OFFER................................................................... 15
1. TERMS OF THE OFFER......................................................... 15
2. PROCEDURE FOR TENDERING SHARES............................................. 17
3. WITHDRAWAL RIGHTS.......................................................... 19
4. ACCEPTANCE FOR PAYMENT AND PAYMENT......................................... 20
5. PRICE RANGE OF THE SHARES; DIVIDENDS ON THE SHARES......................... 21
6. EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES........................... 21
7. CERTAIN INFORMATION CONCERNING COMPANY..................................... 22
8. CERTAIN INFORMATION CONCERNING BUYER AND PARENT............................ 25
9. SOURCE AND AMOUNT OF FUNDS................................................. 27
10. CONTACTS AND TRANSACTIONS AMONG PARENT, BUYER AND COMPANY.................. 27
11. DIVIDENDS AND DISTRIBUTIONS................................................ 37
12. CERTAIN CONDITIONS OF THE OFFER............................................ 38
13. CERTAIN LEGAL MATTERS...................................................... 39
14. CERTAIN FEES AND EXPENSES.................................................. 43
15. MISCELLANEOUS.............................................................. 44
</TABLE>
2
<PAGE> 3
TO THE HOLDERS OF COMMON SHARES OF
UNIVAR CORPORATION:
INTRODUCTION
UC Acquisition Corp., a Washington corporation ("Buyer"), which is an
indirect subsidiary of Royal Pakhoed N.V. (a translation of Koninklijke Pakhoed
N.V.), a publicly held limited liability company formed and existing under the
laws of The Netherlands ("Parent"), hereby offers to purchase all outstanding
Shares of Univar Corporation, a Washington corporation ("Company"), for a
purchase price of $19.45 per Share net to the seller in cash (the "Offer
Price"), upon the terms and subject to the conditions set forth in this Offer to
Purchase and in the related Letter of Transmittal (which, together with any
amendments or supplements hereto or thereto, collectively constitute the "Offer"
or "Tender Offer"). Certificates for Shares may show the Shares as being issued
by "Univar Corporation," a Delaware corporation, or "VWR United Corporation,"
and indicate various par values. Those certificates continue to represent valid
Shares of Company and may be tendered for purchase by Buyer in accordance with
the terms of this Offer.
Buyer and its affiliates are the record owners of 6,106,000 Shares
representing approximately 28.09% of the outstanding Shares as of May 31, 1996.
Parent has entered into a Shareholder Agreement (the "Shareholder Agreement")
with The Dow Chemical Company ("Dow") and Officers and Directors Agreements (the
"Officers and Directors Agreements") with each of Company's directors who are
not affiliated with Parent, and certain officers of Company (the "Selling
Officers and Directors"), in which Dow has agreed, and the Selling Officers and
Directors, subject to the discharging of their fiduciary duties, have agreed to
tender an additional 5,056,396 Shares representing in the aggregate
approximately 23.26% of the outstanding Shares. If these Shares are all
purchased, Buyer and its affiliates will become the holders of approximately
51.36% and a majority of the outstanding Shares.
THE BOARD OF DIRECTORS OF COMPANY HAS DETERMINED THAT THE TENDER OFFER IS
FAIR TO AND IN THE BEST INTERESTS OF COMPANY AND ITS SHAREHOLDERS AND
UNANIMOUSLY RECOMMENDS THAT ITS SHAREHOLDERS ACCEPT THE OFFER BY BUYER TO
PURCHASE SHARES.
The purpose of the Offer is to enable Parent to acquire all the outstanding
Shares and control of Company. The Offer is the first step in the acquisition of
all Shares of Company. Buyer, Parent, and Company have entered into an Agreement
and Plan of Reorganization (the "Reorganization Agreement"), dated as of May 31,
1996, which provides, among other things, that following the consummation of the
Offer, subject to the terms and conditions contained in the Reorganization
Agreement and in accordance with the relevant provisions of the Washington
Business Corporation Act (the "WBCA"), Buyer will be merged into Company (the
"Proposed Merger") and Company will be the surviving corporation (the "Surviving
Corporation"). The Reorganization Agreement also provides that at Parent's
option, Company may be merged into Buyer with Buyer as the Surviving
Corporation. If Buyer acquires at least 90% of the outstanding Shares, Buyer
would have the ability to consummate the Proposed Merger without a meeting or
vote of the other shareholders of Company pursuant to the "short form" merger
provisions of the WBCA. Under the WBCA, a "short form" merger would have to be
effected by a merger of Company into Buyer, with Buyer as the Surviving
Corporation. On the effective date of the Proposed Merger (the "Effective
Date"), each outstanding Share (other than Shares owned by Buyer and its
affiliates, Shares held in the treasury of Company and Shares held by
shareholders who perfect their dissenters' rights under the WBCA) will be
converted into the right to receive an amount in cash equal to the highest price
per Share paid pursuant to the Offer (the "Merger Consideration").
In the event the Tender Offer is extended beyond July 31, 1996, the Offer
Price shall be increased by an amount equal to the product of the Offer Price
multiplied by the prime interest rate as announced by Bank of America NW, N.A.
(doing business as Seafirst Bank) in Seattle, Washington as in effect on August
1, 1996, multiplied by the quotient of the number of days that the Tender Offer
is extended after July 31, 1996, divided by 365.
Tendering shareholders will not be obligated to pay brokerage fees or
commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, transfer taxes on the purchase of Shares pursuant to the Offer.
Buyer will pay all fees and expenses of Chemical Mellon Shareholder Services
LLC, which is acting as the
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Depositary (the "Depositary"), and D.F. King & Co., Inc., which is acting as
Information Agent (the "Information Agent"), incurred in connection with the
Offer. See Section 14 "Certain Fees and Expenses." Certain federal income tax
consequences of the sale of Shares pursuant to the Offer are described in the
section captioned "Special Factors -- Certain Federal Income Tax Consequences"
below.
The Offer is subject to the fulfillment of a number of conditions
including, without limitation, the following:
MINIMUM TENDER CONDITION. THE OFFER IS CONDITIONED UPON THERE BEING
VALIDLY TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION DATE (AS DEFINED IN
SECTION 1 "TERMS OF THE OFFER") THAT NUMBER OF SHARES THAT WOULD, WHEN
AGGREGATED WITH THE SHARES ALREADY OWNED BY BUYER AND ITS AFFILIATES, REPRESENT
A MAJORITY OF ALL OUTSTANDING SHARES ON A FULLY DILUTED BASIS ON THE DATE OF
PURCHASE (THE "MINIMUM TENDER CONDITION"). BUYER AND ITS AFFILIATES OWN
6,106,000 SHARES. IF DOW FULFILLS THE TERMS OF THE SHAREHOLDER AGREEMENT AND THE
SELLING DIRECTORS AND OFFICERS FULFILL THE TERMS OF THE OFFICERS AND DIRECTORS
AGREEMENTS, BUYER AND ITS AFFILIATES WILL OWN, OR HAVE TENDERED TO BUYER, FOR
PURCHASE APPROXIMATELY 51.36% OF THE OUTSTANDING SHARES AND THE MINIMUM TENDER
CONDITION WILL BE SATISFIED. SEE "SPECIAL FACTORS -- CERTAIN SHARES EXPECTED TO
BE TENDERED."
GOVERNMENTAL APPROVALS CONDITION. THE OFFER IS CONDITIONED UPON OBTAINING
ALL AUTHORIZATIONS, CONSENTS, ORDERS OR APPROVALS OF, OR DECLARATIONS OR FILINGS
WITH, OR TERMINATIONS OR EXPIRATIONS OF WAITING PERIODS IMPOSED BY ANY
GOVERNMENT AGENCIES, AS ARE REQUIRED BY LAW OR OTHERWISE, NECESSARY OR REQUIRED
TO CONSUMMATE THE OFFER, INCLUDING, BUT NOT LIMITED TO, THE INVESTMENT CANADA
ACT, AND THE EXPIRATION OR TERMINATION OF ALL WAITING PERIODS IMPOSED BY THE
HART-SCOTT RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED, AND THE
REGULATIONS THEREUNDER (THE "HSR ACT"), THE EXON-FLORIO AMENDMENT TO THE DEFENSE
PRODUCTION ACT OF 1950 AND THE REGULATIONS THEREUNDER ("EXON-FLORIO"), THE
COMPETITION ACT (CANADA) AND EUROPEAN ECONOMIC AREA AND NATIONAL MERGER
REGULATION (COLLECTIVELY, THE "GOVERNMENTAL APPROVALS").
Certain other conditions to the Offer are described in Sections 1, 2, 12
and 13. Buyer reserves the right (but shall not be obligated) to waive any or
all such conditions.
The percentages of Shares used herein are based on information provided by
Company, including a representation by Company that there were 21,735,415 Shares
outstanding as of May 31, 1996. The Reorganization Agreement provides that
immediately prior to the consummation of the Offer, holders of each of the then
outstanding stock options granted under any employee or non-employee director
stock option, stock purchase or similar plan or arrangement of Company
(collectively, the "Stock Plans") will receive cash payments from Company in
settlement of each such option and that the Stock Plans shall be terminated as
of the Effective Time (as defined herein). Accordingly, such Share percentages
assume that there are no stock options outstanding and that no Shares will be
issued pursuant to outstanding options. Such percentages also assume that Dow
will not exercise an option to purchase Series A Junior Participating
Convertible Preferred Shares of the Company (the "Preferred Shares") which are
convertible into Shares pursuant to Dow's rights under an agreement between Dow
and Company dated May 13, 1994 (the "Stock Purchase Agreement"). Under the
Shareholder Agreement, as discussed below, Dow has agreed that it will exercise
its option if Parent so requests. See "Special Factors -- Certain Shares
Expected to be Tendered."
SPECIAL FACTORS
PURPOSE OF THE OFFER
The purpose of the Offer and the Proposed Merger is to enable Parent to
acquire control of, and the entire equity interest in, Company. The Offer, as
the first step in the acquisition of Company, is intended to facilitate the
acquisition of at least a majority of the Shares. Parent currently intends, as
soon as practicable following
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consummation of the Offer, to consummate the Proposed Merger. The purpose of the
Proposed Merger is to acquire all Shares not tendered and purchased pursuant to
the Offer or otherwise held by non-affiliates of Parent. Pursuant to the
Proposed Merger, each then-outstanding Share (other than Shares owned by Buyer
and its affiliates, Shares held in the treasury of Company and Shares held by
shareholders who perfect any available dissenters' rights under the WBCA) will
be converted into the right to receive an amount in cash equal to the Merger
Consideration.
To ensure equal treatment of Company shareholders, the acquisition
transaction has been structured to be consummated in two steps, the Offer, a
cash tender offer, followed by the Proposed Merger, in which the remaining
equity interest in Company not acquired by Buyer pursuant to the Offer will be
subsequently converted into the right to receive the Merger Consideration. As a
result of the Proposed Merger, Company will become an indirect wholly-owned
subsidiary of Parent.
Except in the case of a "short-form" merger, under the WBCA and Company's
Articles of Incorporation, the approval of Company's Board of Directors and the
affirmative vote of holders of a majority of the outstanding Shares is required
to approve the Proposed Merger. If the Minimum Tender Condition is satisfied and
Buyer accepts for payment Shares tendered pursuant to the Offer, Buyer and its
affiliates would have sufficient voting power to approve the Proposed Merger
without the approval of any other shareholder of Company. See "Special
Factors -- Certain Shares Expected to be Tendered."
CERTAIN SHARES EXPECTED TO BE TENDERED
Buyer and its affiliates, Parent, Pakhoed USA Inc., a Delaware corporation,
and Pakhoed Investeringen, B.V., a limited liability company formed and existing
under the laws of The Netherlands, collectively own 6,106,000 Shares which
represents approximately 28.09% of the outstanding Shares. Pursuant to the
Shareholder Agreement between Dow and Parent, Dow has agreed to tender to Buyer
all Shares held of record or beneficially by it (representing all Shares as to
which Dow has sole or shared voting power) or later acquired (the "Dow Shares")
pursuant to the Offer. Buyer believes that Dow owns of record 3,900,000 Shares
which represents approximately 17.94% of the outstanding Shares. If Dow
exercises its option to purchase 101,874 Preferred Shares and converts such
Preferred Shares into Shares as described below, it will own approximately
19.87% of the then outstanding Shares. Dow and Parent have agreed, pursuant to
the Shareholder Agreement, that, if requested by Parent, Dow shall, (i) exercise
its option to purchase all or such portion of the Preferred Shares, which Dow is
entitled to purchase pursuant to the Stock Purchase Agreement, (ii) convert all
the Preferred Shares Dow acquires pursuant to the Stock Purchase Agreement into
509,370 Shares, and (iii) tender all Shares acquired pursuant to such conversion
of the Preferred Shares to Buyer pursuant to the Offer. If such request is not
made and the option is not exercised, Parent has agreed to pay to Dow or cause
the Surviving Corporation to pay Dow on consummation of the Proposed Merger, the
difference between the aggregate exercise price of the option to acquire the
Preferred Shares and the aggregate price that would have been paid pursuant to
the Offer for the Shares which would have been issued pursuant to the conversion
of the Preferred Shares. The Shareholder Agreement is subject to the absence of
a competing offer to purchase Shares at a purchase price greater than $19.45 per
Share or the Offer Price being adjusted to a price less than $19.45 per Share.
In addition, under the Officers and Directors Agreements, the Selling
Directors and Officers have each individually agreed that, subject to the
discharge of their fiduciary responsibilities in their capacities as members of
the Board of Directors or officers of Company, they will, as applicable: (a)
vote in favor of the Proposed Merger and the execution and delivery of the
Reorganization Agreement and all related agreements and all actions contemplated
thereby; (b) recommend to Company shareholders acceptance of the Offer and use
their reasonable efforts to cause the shareholders of Company to tender Shares
pursuant to the Offer; (c) use their reasonable efforts to cause the
shareholders of Company to adopt and approve the Reorganization Agreement and
the transactions contemplated thereby; and (d) consent to and/or encourage the
execution of agreements by a sufficient number of Company shareholders to assure
satisfaction of the Minimum Tender Condition. The Selling Directors and Officers
have also agreed to sell to Buyer a total of 1,156,396 Shares, representing
approximately 5.32% of the outstanding Shares.
Since Buyer and its affiliates, Parent, Pakhoed USA Inc., and Pakhoed
Investeringen B.V., collectively own 6,106,000 Shares, representing
approximately 28.09% of the outstanding Shares, and Dow and the Selling
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Directors and Officers, in connection with the Shareholder Agreement and the
Officers and Directors Agreements described above, have agreed to sell to Buyer
an additional 5,056,396 Shares representing approximately 23.26% of the
outstanding Shares, if Dow and the Selling Directors and Officers fulfill the
terms of the Shareholder Agreement and the Officers and Directors Agreements,
respectively, then Buyer and its affiliates will own 11,162,252 Shares,
representing approximately 51.36% of the outstanding Shares and the Minimum
Tender Condition will be met.
If the Minimum Tender Condition is met, Buyer will have sufficient voting
power to approve the Proposed Merger without the affirmative vote of any other
shareholder of Company. If as a result of the consummation of the Offer, Buyer
owns Shares representing 90% or more of the outstanding Shares it will be able
to effect the Proposed Merger as a "short form" merger without obtaining the
approval of any shareholder of Company.
CERTAIN EFFECTS OF THE TRANSACTION
The Proposed Merger will have the effect of eliminating the Shares of
Company shareholders, other than Shares held by Buyer and its affiliates, by
converting such Shares into the right to receive cash equal to the Merger
Consideration. Under Washington law, however, shareholders who have filed timely
notices of intent to dissent and who exercise dissenters' rights pursuant to
Sections 23B.11.020 through 23B.13.280 of the WBCA, will have certain rights
under the WBCA to dissent to the Proposed Merger and receive payment of "fair
value" of their Shares. Such rights to dissent, if statutory procedures are
complied with, could result in judicial determination of the fair value of the
Shares required to be paid to dissenting shareholders. Such dissenters' rights
are only available with respect to the Proposed Merger and are not available in
connection with the Offer. A copy of the provisions of 23B.11.020 through
23B.13.280 of the WBCA is attached as Schedule II to this Offer to Purchase. See
also "Special Factors -- Statutory Requirements."
According to Company's Annual Report on Form 10-K for the fiscal year ended
February 29, 1996 ("Company's 1996 10-K") Company's Shareholders' Equity was
$179,606,000 as of February 29, 1996, and Company had net income of $5,900,000
for the twelve months ended February 29, 1996. See Section 7 "Certain
Information Concerning Company." As a result of the consummation of the Offer
and the Proposed Merger, Company shareholders other than Parent and its
affiliates, will not have the opportunity to participate in the future earnings,
profits and growth of Company and will not have a right to vote on corporate
matters. Parent and its affiliates, as the Company shareholders after the
Proposed Merger, will own a 100% interest in the book value and earnings of
Company and will benefit from any increase in the value of Company following the
Offer and the Proposed Merger and will bear the risk of any decrease in the
value of Company after the Proposed Merger.
After the Proposed Merger, the Shares will cease to be registered under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), transactions
in Shares will not be reported on the New York Stock Exchange ("NYSE") or any
other national stock exchange, and the Shares will not be available for use as
collateral for loans made by brokers and others. See Section 6 "Effect of the
Offer on the Market for Shares" for a discussion on the possible effects of the
Offer.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The receipt of cash pursuant to the Offer or the Proposed Merger will be a
taxable transaction for federal income tax purposes under the Internal Revenue
Code of 1986, as amended (the "Code"), and may also be a taxable transaction
under applicable state, local or foreign income or other tax laws. Generally,
for federal income tax purposes, a tendering shareholder will recognize gain or
loss equal to the difference between the amount of cash received by the
shareholder pursuant to the Offer or the Proposed Merger and the aggregate tax
basis in the Shares tendered by the shareholder and purchased pursuant to the
Offer or converted in the Proposed Merger, as the case may be. Gain or loss will
be calculated separately for each block of Shares tendered and purchased
pursuant to the Offer or converted in the Proposed Merger, as the case may be.
If Shares are held by a shareholder as capital assets, gain or loss
recognized by the shareholder will be capital gain or loss, which will be
long-term capital gain or loss if the shareholder's holding period for the
Shares exceeds one (1) year. Under present law, long-term capital gains
recognized by an individual shareholder will generally be taxed at a maximum
federal marginal tax rate of 28%, and long-term capital gains recognized by a
corporate shareholder will be taxed at a maximum federal marginal tax rate of
35%.
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A shareholder (other than certain exempt shareholders including, among
others, all corporations and certain foreign individuals and entities) that
tenders Shares may be subject to 31% backup withholding unless the shareholder
provides its tax identification number ("TIN") and certifies that such number is
correct or properly certifies that it is awaiting a TIN, or unless an exemption
applies. A shareholder that does not furnish its TIN may be subject to a penalty
imposed by the Internal Revenue Service ("IRS"). See Section 2 "Procedure For
Tendering Shares -- Backup Withholding."
If backup withholding applies to a shareholder, the Depositary is required
to withhold 31% from payments to such shareholder. Backup withholding is not an
additional tax. Rather, the amount of the backup withholding can be credited
against the federal income tax liability of the person subject to the backup
withholding, provided that the required information is given to the IRS. If
backup withholding results in an overpayment of tax, a refund can be obtained by
the shareholder upon filing an income tax return.
THE FOREGOING DISCUSSION MAY NOT BE APPLICABLE WITH RESPECT TO SHARES
RECEIVED PURSUANT TO THE EXERCISE OF EMPLOYEE STOCK OPTIONS OR OTHERWISE AS
COMPENSATION OR WITH RESPECT TO HOLDERS OF SHARES WHO ARE SUBJECT TO SPECIAL TAX
TREATMENT UNDER THE CODE, SUCH AS NON-U.S. PERSONS, LIFE INSURANCE COMPANIES,
TAX-EXEMPT ORGANIZATIONS AND FINANCIAL INSTITUTIONS, AND MAY NOT APPLY TO A
HOLDER OF SHARES IN LIGHT OF INDIVIDUAL CIRCUMSTANCES. THE FEDERAL INCOME TAX
DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL INFORMATION ONLY AND IS BASED
ON EXISTING TAX LAW AS OF THE DATE OF THIS OFFER TO PURCHASE. DUE TO THE
INDIVIDUAL NATURE OF TAX CONSEQUENCES, SHAREHOLDERS ARE URGED TO CONSULT THEIR
OWN TAX ADVISORS TO DETERMINE THE PARTICULAR TAX CONSEQUENCES TO THEM (INCLUDING
THE APPLICATION AND EFFECT OF ANY STATE, LOCAL OR FOREIGN INCOME AND OTHER TAX
LAWS) OF THE OFFER AND THE PROPOSED MERGER.
FAIRNESS OF THE TRANSACTION
BUYER. Buyer believes that the Offer and Proposed Merger is fair to the
public holders of Shares. In making this determination, Buyer considered the
following factors: (a) the premium represented by the difference between the
Offer Price and recent and historical trading prices of the Shares; (b) the
premium represented by the difference between the Offer Price and the book value
per Share of $8.28 as of February 29, 1996; (c) the Offer will provide holders
the opportunity to sell Shares for cash without the usual transaction costs
associated with open-market sales or the potential resulting depressing effect
on the market price of Shares due to the limited trading volume for Shares; and
(d) the business, results of operations and prospects of Company and the nature
of the industry in which it operates, and the risks associated therewith. Buyer
did not find it practicable to, and therefore did not, quantify or otherwise
assign relative weights to these factors.
Commencing August 26, 1995, Buyer retained the financial consulting
services of Mr. Thomas M. Foster, who provided financial and related advice to
Buyer in connection with the transactions contemplated by the Reorganization
Agreement. However, Buyer has not received any report, opinion or appraisal from
any outside financial advisor or appraiser with respect to the Offer and
Proposed Merger, including but not limited to, any report, opinion or appraisal
relating to the consideration or the fairness of the consideration to be offered
to the holders of the Shares or the fairness of the Offer and the Proposed
Merger to Company or to any security holder of Company. Buyer has not retained
any financial advisor to negotiate the terms of the Offer and the Proposed
Merger or to prepare a report concerning the fairness of the Offer and the
Proposed Merger.
COMPANY. The Board of Directors of Company has determined that the Tender
Offer is fair to and in the best interests of Company and its shareholders and
unanimously recommends that its shareholders accept the Offer by Buyer to
purchase Shares. In unanimously approving the Offer, the Proposed Merger and the
Reorganization Agreement and recommending that all shareholders tender their
Shares pursuant to the Offer, the Board considered a number of factors
including:
(a) the financial and other terms and conditions of the Offer and
Reorganization Agreement;
(b) the presentation of Schroder Wertheim Co., Incorporated ("Schroder
Wertheim") at the May 31, 1996 Board meeting and the written opinion of
Schroder Wertheim to the effect that, as of the date of such opinion, and
based upon the considerations and limitations set forth therein, the
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consideration to be received by the holders of Shares in the Offer and the
Proposed Merger was fair to such holders, other than Parent, Buyer and its
affiliates, from a financial point of view.
(c) the possible alternatives to the Offer and the Proposed Merger,
including, without limitation, continuing to operate Company as an
independent entity, and the risks and opportunities associated therewith;
(d) the business, results of operations, and prospects of Company and
the nature of the industry in which it operates, and the risks associated
therewith;
(e) the fact that the terms of the Reorganization Agreement should not
unduly discourage other third parties from making bona fide proposals to
acquire Company subsequent to the execution of the Reorganization Agreement
and, that if any such proposals were made, the Board, in the exercise of
its fiduciary duties, could determine to provide information to and engage
in negotiations with any such third party subject to the terms and
conditions of the Reorganization Agreement;
(f) the Governmental Approvals required to consummate the Proposed
Merger, including, among others, antitrust approvals, and the prospects for
receiving such approvals;
(g) the general relatively high level of stock prices on the NYSE and
other principal trading markets in the United States and the risk that a
major drop in such markets would also have a significant and potentially
long term adverse effect on the Shares; and
(h) the possibility that, after the expiration of the standstill
provisions contained in the Confidentiality Agreement (as defined below in
Section 10 "Contracts and Transactions among Parent, Buyer and Company"),
that Parent might proceed with a tender offer on a unilateral basis at a
significantly lower price.
The Board did not assign relative weights to the factors or determine that
any factor was of particular importance. Rather, the Board viewed its position
and recommendation as being on the totality of the information presented to and
considered by it. In negotiating the terms of the Offer, the Board appointed a
Special Committee, none of whom are members of management or affiliated with
Parent or Dow, to represent the interest of all unaffiliated shareholders in
negotiating the terms of the Offer and the Proposed Merger.
Buyer and its affiliates are not aware of any firm offer made by any
unaffiliated person during the preceding 18 months for (a) the merger or
consolidation of Company into or with such person or of such person into or with
Company, (b) the sale or other transfer of all or any substantial part of the
assets of Company or (c) securities of Company which would enable the holder
thereof to exercise control of Company.
REPORTS, OPINIONS AND APPRAISALS
As noted above, as part of its role as financial advisor to Company,
Schroder Wertheim was engaged to deliver to Company's Board of Directors its
opinion, as investment bankers, that as of May 31, 1996, the consideration to be
offered to the shareholders of Company other than Parent, Buyer and their
affiliates in the Offer and the Proposed Merger is fair to such shareholders
from a financial point of view. A copy of Schroder Wertheim's opinion is
contained in Company's Solicitation/Recommendation Statement on Schedule 14D-9
(the "Schedule 14D-9") filed by Company with the Commission in connection with
the Offer and is being mailed to shareholders by Company with this Offer to
Purchase. Such opinion is subject to certain limitations and is based on certain
assumptions stated therein, and the summary of such opinion set forth below is
qualified in its entirety by reference to the full text of such opinion. Holders
of Shares are urged to read Schroder Wertheim's opinion in its entirety.
No limitations were imposed by Company or the Board on the scope of
Schroder Wertheim's investigation or the procedures to be followed by Schroder
Wertheim in rendering its opinion, except that Schroder Wertheim was not
authorized to solicit, and did not solicit, any indications of interest from any
third party with respect to a purchase of all or a part of Company's business.
Schroder Wertheim was not requested to and did not make any recommendation to
the Board as to the form or amount of consideration to be offered to
shareholders in the Offer and the Proposed Merger, which was determined through
negotiations between Company and Parent. In arriving at its opinion, Schroder
Wertheim did not ascribe a specific range of value to Company, but made its
determination as to the fairness, from a financial point of view of the
consideration to be offered to the shareholders of Company other than Parent,
Buyer and their affiliates on the basis of the
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financial and comparative analyses described below. Schroder Wertheim's opinion
is for the information of the Board solely for its use in evaluating the
fairness from a financial point of view of the consideration to be offered to
the shareholders of Company other than Parent, Buyer and their affiliates in the
Offer and the Proposed Merger and is not intended to be, and does not
constitute, a recommendation to any shareholder as to whether to accept the
consideration to be offered to such shareholder in the Offer or the Proposed
Merger. In rendering its opinion, Schroder Wertheim was not engaged as an agent
or fiduciary of Company's shareholders or any other third party. Schroder
Wertheim's opinion is not an opinion as to the structure, terms or effect of any
aspect of the Offer or the Proposed Merger and does not in any manner address
the Company's underlying business decision to enter into the Reorganization
Agreement.
In connection with its opinion, Schroder Wertheim, among other things (i)
reviewed a draft, dated May 30, 1996, of the Reorganization Agreement; (ii)
reviewed a draft, dated May 30, 1996, of the Schedule 14D-1 filed by Buyer with
the Commission in connection with the Offer, including a draft of this Offer to
Purchase incorporated therein by reference; (iii) reviewed a draft, dated May
30, 1996, of the Schedule 14D-9 filed by Company with the Commission in
connection with the Offer; (iv) reviewed Company's Annual Reports on Form 10-K
filed with the Commission for the fiscal years ended February 1992, 1993, 1994,
1995 and 1996, including the audited consolidated financial statements of
Company included therein; (v) reviewed historical financial results of Company
by operating division prepared by management; (vi) reviewed forecasts and
projections for Company prepared or supplied by Company management for the
fiscal years ending February 1997 through 2002; (vii) held discussions with
Company management regarding the business, operations and prospects of Company;
(viii) compared the results of operations and certain market valuation
statistics of Company with those of certain publicly traded companies which
Schroder Wertheim deemed to be reasonably comparable to Company; (ix) reviewed
the financial terms, to the extent publicly available, of certain comparable
transactions; (x) reviewed the historical trading prices and volumes of Shares;
and (xi) performed such other financial studies, analyses, inquiries and
investigations as it deemed appropriate.
In rendering its opinion, Schroder Wertheim assumed and relied upon,
without independent verification, the accuracy and completeness of all
information supplied or otherwise made available to it by Company or obtained by
it from other sources, and upon the assurances of Company's management that they
were unaware of any information or facts that would make the information
provided to Schroder Wertheim incomplete or misleading. Schroder Wertheim did
not conduct a physical inspection of the properties and facilities of Company
and did not undertake an independent appraisal of assets or liabilities
(contingent or otherwise) of Company and was not furnished with any such
appraisals. Schroder Wertheim also assumed that the financial forecasts
furnished by Company were reasonably prepared and reflected the best current
available estimates and judgment of the senior management of Company as to the
expected future financial performance of Company. Schroder Wertheim's opinion
was necessarily based upon economic, market and other conditions as they existed
on, and the information made available to it as of, the date of its opinion, and
Schroder Wertheim has disclaimed any undertaking or obligation to advise any
person of any change in any fact or matter affecting its opinion.
The following paragraphs summarize the financial and comparative analyses
performed by Schroder Wertheim and presented to the Board in connection with its
opinion. The summary does not represent a complete description of the analyses
performed by Schroder Wertheim.
Analysis of Comparable Publicly Traded Companies. Using publicly available
information, Schroder Wertheim compared selected historical and projected
financial and operating data, and selected stock market data, of Company to the
corresponding data of the following publicly traded chemical and industrial
distribution companies which Schroder Wertheim considered reasonably comparable
to Company (collectively, the "Comparable Companies"): Aceto Corporation;
Bearings, Inc.; Ellis & Everard plc; Hawkins Chemical, Inc.; McKesson
Corporation; National Sanitary Supply Co.; and W.W. Grainger, Inc.
Schroder Wertheim performed a market analysis of Company and the Comparable
Companies using closing market prices as of May 30, 1996. In connection with
such analysis, Schroder Wertheim noted, among other things, that (i) the
multiple of Company's market price to its earnings per Share for the last twelve
months ("LTM") ended April 30, 1996 was 32.4x compared to an average market
price to earnings per share multiple of 14.5x for the Comparable Companies
(using the most recent reported LTM period for each of the Comparable Companies
(collectively, the "Comparable LTM Periods")); (ii) Company's market price to
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analyst projected 1997 earnings per Share (based on consensus analysts
estimates) multiple was 15.1x compared to an average analyst projected 1996
earnings per share multiple of 13.4x for the Comparable Companies; (iii)
Company's market value plus total debt minus total cash ("Enterprise Value") to
adjusted earnings before interest and taxes ("EBIT") multiple was 15.8x compared
to an average Enterprise Value to adjusted EBIT multiple of 9.0x for the
Comparable Companies; and (iv) Company's Enterprise Value to adjusted earnings
before interest, taxes, depreciation and amortization ("EBITDA") multiple was
8.0x compared to an average Enterprise Value to adjusted EBITDA multiple of 7.3x
for the Comparable Companies. Based on this analysis, Schroder Wertheim
calculated the implied equity value of Company's Shares on a fully diluted basis
to be between $7.45 and $13.13 per share. The offer price of $19.45 implies a
premium of 48.1% to 161.2% based on these implied values.
In addition, Schroder Wertheim compared Company's recent operating
performance to the recent operating performance of the Comparable Companies.
This analysis illustrated, among other things, that: (i) Company's growth rate
in revenues for the three years ended February 29, 1996 was 6.3% compared with
an average growth rate in revenues for the last three fiscal years of 10.2% for
the Comparable Companies; (ii) Company's LTM EBITDA as a percentage of revenues
("EBITDA Margin") was 2.8% compared with an average EBITDA Margin of 7.0% for
the Comparable Companies over the Comparable LTM Periods; (iii) Company's LTM
EBIT as a percentage of revenues ("EBIT Margin") was 1.4% compared with an
average EBIT Margin of 5.8% for the Comparable Companies over the Comparable LTM
Periods; (iv) Company's LTM net income as a percentage of revenues ("Net Income
Margin") was 0.4% compared to an average Net Income Margin of 3.5% for the
Comparable Companies over the Comparable LTM Periods; and (v) Company's LTM
return on equity was 8.6% compared to an average return on equity of 22.9% for
the Comparable Companies over the Comparable LTM Periods.
Discounted Cash Flow Analysis. Schroder Wertheim performed a discounted
cash flow analysis of Company based on the financial forecast of Company as a
whole and each of its major subsidiaries for the fiscal years ending 1997 to
2002 prepared and provided by the management of Company (the "Company Financial
Forecast"). A discounted cash flow analysis is a traditional valuation
methodology used to derive a valuation of a corporate entity by calculating the
estimated future free cash flows of such corporate entity and discounting such
cash flow results back to the present.
Schroder Wertheim analyzed the Company Financial Forecast and discounted
the stream of free cash flows provided in such forecast back to May 31, 1996. To
estimate the terminal value of Company at the end of the Company Financial
Forecast period, Schroder Wertheim applied terminal multiples ranging from 5.0x
to 7.0x to Company's projected fiscal 2002 adjusted EBITDA and discounted such
value estimates back to May 31, 1996. Schroder Wertheim then summed the present
values of the free cash flows and the present values of the terminal values to
derive a range of implied equity values for Company of $375.5 million to $651.3
million (after adjustments for total debt, cash and equivalents and cash
proceeds from the exercise of stock options). These values represent $16.82 to
$28.57 per Share on a fully-diluted basis.
Selected Merger and Acquisition Transaction Analysis. Schroder Wertheim
analyzed certain publicly available information relating to numerous selected
merger and acquisition transactions in the chemical and industrial distribution
industries since 1994. Although these transactions were reviewed for comparison
purposes, none of such transactions is directly comparable to the Offer or the
Proposed Merger. Among the transactions analyzed by Schroder Wertheim were
(target/acquiror): Parts, Inc. (GKN plc)/APS Holding Corp.; Erith plc/Graham
Group; Industrial and Life Sciences Unit (Baxter)/VWR Scientific Products
Corporation; ADESA Corporation/Minnesota Power & Lighting Company; Lambert
Riviere S.A./Royal Pakhoed N.V.; Anthem Electronics, Inc./Arrow Electronics,
Inc.; Orchidis/Brenntag AG; Gates-FA Distributing Inc./Arrow Electronics, Inc.;
Bunzl Building Supply Inc./Rugby Group plc; and several acquisitions completed
by Airgas, Inc. of various regional distributors.
Schroder Wertheim computed the equity cost (offer per share multiplied by
total common shares outstanding (the "Equity Cost")) in each of the selected
transactions analyzed and divided such amount by the acquired company's LTM net
income immediately prior to the acquisition which resulted in a range of
purchase price multiples. Schroder Wertheim also computed the adjusted price
(the Equity Cost plus latest reported total debt, capitalized leases, preferred
stock and minority interest minus total cash and cash
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equivalents, adjusted for outstanding options (the "Adjusted Purchase Price"))
paid in each of the selected transactions analyzed and divided such amount by
the acquired company's LTM adjusted EBITDA and EBIT immediately prior to the
acquisition which resulted in other ranges of purchase price multiples. Using
such information and Company's LTM operating results, Schroder Wertheim compared
the implied purchase price multiples of the Offer and the Proposed Merger to the
purchase price multiple ranges calculated as aforesaid. Such analysis
illustrated: (i) the implied Adjusted Purchase Price to LTM adjusted EBITDA
multiple of the Offer and the Proposed Merger is 11.0x compared with a multiple
range of 5.4x to 15.6x for the selected transactions analyzed; (ii) the implied
Adjusted Purchase Price to LTM adjusted EBIT multiple of the Offer and the
Proposed Merger is 21.6x compared with a multiple range of 8.7x to 21.1x for the
selected transactions analyzed; and (iii) the implied Equity Cost to LTM net
income multiple of the Offer and the Proposed Merger is 50.9x compared with a
multiple range of 11.6x to 38.6x for the selected transactions analyzed. Based
on this analysis, Schroder Wertheim calculated the implied equity value of
Company's Shares on a fully diluted basis to be between $4.17 and $21.41 per
share.
Other Analyses. Schroder Wertheim analyzed the feasibility of a leveraged
buyout of Company. This analysis implied that a leveraged buyout of Company was
marginally feasible at a price of $15.00 per Share based on current market
conditions.
Schroder Wertheim also analyzed the premium paid over the stock price of
the acquired company one day, one week and four weeks prior to the announcement
of the transaction in selected merger transactions since 1994. This analysis
demonstrated that, on average, the acquired company received a 34.6%, 39.1% and
45.0% premium over its stock price one day, one week and four weeks,
respectively, prior to announcement of a transaction. Schroder Wertheim then
compared these results with the premiums over Company's stock price implied by
the Offer and the Proposed Merger. The Offer and the Proposed Merger imply
premiums of 57.2%, 55.2% and 58.0% over Company's Share price one day, one week
and four weeks, respectively, prior to May 31, 1996.
The foregoing summary does not purport to be a complete description of
Schroder Wertheim's analyses or of the presentation by Schroder Wertheim to
Company's Board. Schroder Wertheim did not attribute any particular weight to
any analysis or factor considered by it, but rather made qualitative judgments
as to the significance and relevance of each analysis or factor. Accordingly,
Schroder Wertheim believes that its analyses must be considered as a whole and
that selecting portions of its analyses or of the factors considered, without
considering all analyses and factors, could create an incomplete or misleading
view of the processes underlying the preparation of its opinion. The preparation
of a fairness opinion is a complex process and is not necessarily susceptible to
partial analysis or summary description. In performing its analyses, Schroder
Wertheim made numerous assumptions with respect to general business and economic
conditions and other matters, many of which are beyond the control of Company.
The analyses performed by Schroder Wertheim are not necessarily indicative of
actual values or actual future results, which may be significantly more or less
favorable than suggested by such analyses. Additionally, analyses relating to
the values of businesses do not purport to be appraisals or to reflect the
prices at which a business may actually be sold or at which a company's
securities may trade at any time.
Schroder Wertheim is a nationally recognized investment banking firm
engaged, among other things, in the valuation of businesses and their securities
in connection with mergers, and acquisitions, negotiated underwritings,
secondary distributions of listed and unlisted securities, private placements
and valuations for estate, corporate and other purposes.
A copy of the report submitted by Schroder Wertheim to Company's Board of
Directors has been filed as an exhibit to the Statement on Schedule 13E-3 filed
by Parent and Buyer. Copies of said report are available for inspection and
copying at the principal executive offices of Company during regular business
hours by any shareholder of Company, or a shareholder's representative who has
been so designated in writing.
In April 1995, Company engaged Schroder Wertheim as its exclusive financial
advisor in connection with the review of various options to maximize the value
of Company to its shareholders. Pursuant to this engagement, Company paid to
Schroder Wertheim a fee of $125,000 and agreed to pay customary and reasonable
advisory and financing fees to be negotiated in good faith if Company were to
proceed with a transaction or financing. In addition, Company agreed to
reimburse Schroder Wertheim for its reasonable out-
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of-pocket expenses in connection with such engagement and to indemnify Schroder
Wertheim against certain liabilities, including liabilities under the federal
securities laws.
Pursuant to an engagement letter, dated May 10, 1996, Company engaged
Schroder Wertheim, among other things, to render an opinion, as investment
bankers, as to the fairness, from a financial point of view, of the Offer and
the Proposed Merger to the shareholders of Company other than Parent, Buyer and
their affiliates. Pursuant to said engagement letter, Company (i) paid to
Schroder Wertheim an initial cash fee of $300,000 upon execution of said
engagement letter, (ii) paid to Schroder Wertheim an additional cash fee of
$300,000 at the time Schroder Wertheim informed the Board of Directors that it
was ready to deliver its opinion, and (iii) has agreed to pay to Schroder
Wertheim a cash fee of $900,000 upon consummation of the Offer. Company has also
agreed to reimburse Schroder Wertheim for its reasonable-out-of-pocket expenses
and to indemnify Schroder Wertheim, its officers, directors, controlling
persons, employees and agents, against certain liabilities, including
liabilities under the federal securities laws, relating to, arising out of, or
in connection with, the matters contemplated by the engagement letter.
Schroder Wertheim, in the normal course of business, trades in the
securities of Company for its own account and for the account of its customers,
and, accordingly, may from time to time hold a long or short position in
Company's securities.
PLANS FOR COMPANY
It is expected that following the Offer and the Proposed Merger, the
business and operations of Company will be continued substantially as they are
currently being conducted. Parent's current intention is to keep Company's
headquarters in Kirkland, Washington.
Furthermore, except as described in this Offer to Purchase Shares, based on
their current knowledge of Company, Parent and Buyer have no present plans or
proposals that would result in: (a) an extraordinary corporate transaction, such
as a merger, consolidation, reorganization or liquidation involving Company or
any of any corporation, partnership, limited liability company, or other entity
in which Company owns, directly or indirectly, any equity interest and whose
financial statements are consolidated for accounting purposes under generally
accepted accounting principles ("GAAP") ("Company Subsidiaries"), (b) a sale or
transfer of a material amount of assets involving Company or any of Company
Subsidiaries, (c) any material changes in Company's present capitalization or
dividend policy of Company, or (d) any other material change in Company's
corporate structure or business. However, Buyer and its affiliates are
continuing their review of Company and its assets, corporate structure,
capitalization, operations, properties, policies, management and personnel.
After the completion of such review, Parent may propose or develop alternative
plans or proposals, including mergers, transfers of a material amount of assets
or other transactions or changes of the nature described above. Parent and Buyer
also reserve the right to effect any change in Company's operations, properties,
policies, management and personnel as may be deemed necessary as a result of
such continuing review thereof.
Pursuant to the Reorganization Agreement, Parent has received contingent
resignations from all directors who were not nominated by Parent, which are
contingent upon consummation of the Offer. Upon the consummation of the Offer,
Company shall accept resignations of a sufficient number of directors as
determined by Parent to result in Parent having representation on the Board of
Directors of Company proportionate to the percentage holding of Buyer and its
affiliates, provided that the Board (excluding directors nominated by Parent)
shall have the right but not the obligation to designate up to four current
members of the Special Committee (as defined below) who may remain directors
after the consummation of the Offer and until the Effective Date of the Proposed
Merger. Parent expects that upon effectiveness of the Proposed Merger or shortly
thereafter, representatives of Parent will replace existing directors of Company
and the Board of Directors of Company will be composed exclusively of
representatives of Parent.
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CERTAIN STATUTORY REQUIREMENTS
Vote Required to Approve Proposed Merger
The WBCA requires that the adoption of any plan of merger or consolidation
of Company must be approved by Company's Board of Directors and by the vote of
the holders of two-thirds ( 2/3) of the outstanding Shares entitled to vote
thereon, unless otherwise provided by Company's Articles of Incorporation.
Article IX of Company's Articles of Incorporation provides that only a majority
of the outstanding Shares entitled to vote thereon is required for the approval
of the Proposed Merger. Company's Board of Directors has unanimously approved
the Offer and the Proposed Merger and the only further action of Company
required to approve the Proposed Merger will be the approval by a majority vote
of shareholders.
Article VII of Company's Articles of Incorporation requires that certain
Major Transactions, as defined therein, must be approved by 80% of the
outstanding Shares entitled to vote, which shall include the affirmative vote of
at least 50% of the outstanding Shares entitled to vote, other than shares held
by the Twenty Percent Shareholder, as defined therein, involved in such Major
Transaction. Buyer and Parent fall under the Articles of Incorporation's
definition of "Twenty Percent Shareholder" and the transactions contemplated by
the Reorganization Agreement constitute a "Major Transaction."
Company's Articles of Incorporation, however, also state that the
provisions of Article VII shall not apply to a Major Transaction if: (a) such
Major Transaction was approved by Company's Board of Directors after the Twenty
Percent Shareholder became a Twenty Percent Shareholder, and (b) the Twenty
Percent Shareholder sought and obtained the unanimous approval by Company's
Board of Directors of its acquisition of 20% or more of the outstanding Shares
entitled to vote prior to such acquisition being consummated. Parent and Pakhoed
Investeringen B.V. obtained their collective more than 20% interest in Company's
outstanding Shares prior to approval of Company's Board of Directors of the
transactions contemplated by the Reorganization Agreement and such transactions
were approved by the unanimous vote of the Board of Directors. Therefore, the
requirements for an approval by 80% of the outstanding Shares of a Major
Transaction, as described above, do not apply to the Proposed Merger.
The unanimous approval of the Reorganization Agreement by Company's Board
of Directors has rendered inapplicable the Washington Fair Price Statute,
Section 23B.17.020 of the WBCA, which would otherwise have required the vote of
the holders of two-thirds ( 2/3) of the outstanding Shares entitled to vote and
would have prevented the Shares held by Pakhoed USA Inc., Pakhoed Investeringen
B.V. and Buyer (as interested shareholders) from being counted towards the
required vote.
Furthermore, Parent, Pakhoed Investeringen B.V. and Pakhoed USA Inc.
acquired more than ten percent (10%) of Company's voting stock prior to March
23, 1988, which exempts the transactions contemplated by the Reorganization
Agreement from the Washington Moratorium Statute, Section 23B.19.040 of the WBCA
(the "Washington Moratorium Statute"). The Washington Moratorium Statute
prohibits certain "significant business transactions," such as the Proposed
Merger of a target corporation, with a greater-than-ten-percent shareholder for
a period of five (5) years, subject to certain exceptions.
If as a result of the consummation of the Offer, Buyer and its affiliates
own at least 90% of the outstanding Shares pursuant to the Offer, Buyer will
have the ability to consummate the Proposed Merger without a meeting or vote of
the other shareholders of Company pursuant to the "short form" merger provisions
of the WBCA. Under the WBCA as currently in effect, a "short form" merger would
have to be effected in the form of a merger of Company into Buyer. The Proposed
Merger and any such "short form" merger may require the consent of third parties
under certain of the agreements to which Company is subject.
Buyer and its affiliates will vote all outstanding Shares beneficially
owned by them in favor of adoption of the Proposed Merger. Collectively, Buyer
and its affiliates own approximately 28.09% of the outstanding Shares. If Dow
fulfills the terms of the Shareholder Agreement and the Selling Directors and
Officers fulfill the terms of the Officers and Directors Agreements, then Buyer
shall own approximately 51.36% of the outstanding Shares, the Minimum Tender
Condition will be met, and Buyer will have sufficient Shares to approve the
Proposed Merger without the affirmative vote of any other shareholders of
Company.
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Although Buyer, Parent, and Company have agreed to consummate the Proposed
Merger, there can be no assurance that certain conditions to the Proposed
Merger, some of which are beyond the control of Buyer, Parent, and Company will
be satisfied. See Section 10, "The Reorganization Agreement -- Conditions to the
Proposed Merger." The Offer and Proposed Merger are subject to other statutory
requirements described in "Special Factors" and Section 13 "Certain Legal
Matters."
Dissenters' Rights
Holders of Shares do not have dissenters' rights as a result of the Offer.
However, if the Proposed Merger is ultimately consummated, shareholders who have
filed timely notices of intent to dissent will have certain rights under the
WBCA to dissent to the Proposed Merger and receive payment of the fair value of
their Shares. At least 20 days prior to the date that shareholders vote on the
Proposed Merger (if a vote is required), Company will be required to deliver a
notice of dissenters' rights to all Company's shareholders, stating that the
shareholders have the right to dissent from the approval of the Proposed Merger
and explaining such dissenters' rights. Dissenters' rights also apply to
minority shareholders in connection with short form mergers. Such rights to
dissent, if the statutory procedures are complied with, could result in a
judicial determination of the "fair value" of the Shares required to be paid to
dissenting shareholders. The fair value of the Shares awarded to dissenting
shareholders would be the fair value as of the time immediately preceding the
consummation of the Proposed Merger, and would exclude any appreciation or
depreciation that occurred in anticipation of the Proposed Merger. The court
would also allow interest, at a rate that it determines to be fair and
equitable, from the date on which the Proposed Merger is consummated.
Parent and Buyer cannot make any representations as to the outcome of any
determination of fair value by a court, and holders of Shares should recognize
that such a determination of fair value could result in a price higher than,
lower than, or equal to the price available to shareholders pursuant to the
Proposed Merger. Moreover, Parent may argue in such a court proceeding that, for
purposes of such proceeding, the fair value of the Shares is less than the price
available pursuant to the Proposed Merger. Under Washington law, the court may
consider a variety of factors in determining fair value. These include the
market price at which the Shares are trading, the net value of Company's assets,
the anticipated future business prospects of Company, estimates of the
capitalized value of future earnings and other factors. Washington law requires
that the court consider all relevant facts and circumstances in determining the
fair value and that it not give undue emphasis to any one factor.
The Proposed Merger may be subject to additional "fairness" requirements.
Several recent cases in jurisdictions other than Washington, which may or may
not apply to the Proposed Merger have held that a controlling shareholder of a
company involved in a merger or other business combination has a fiduciary duty
to the other shareholders. In determining whether the controlling shareholder
has fulfilled such duty to the shareholders, certain courts have considered,
among other things, the type and amount of the consideration to be received by
such other shareholders and whether the other shareholders are accorded
appraisal rights.
The foregoing summary of the rights of objecting shareholders does not
purport to be a complete statement of the procedures to be followed by
shareholders desiring to exercise their dissenters' rights. The preservation and
exercise of dissenters' rights are conditioned on strict adherence to the
applicable provisions of the WBCA. A copy of the provisions of 23B.11.020
through 23B.13.280 of the WBCA is attached on Schedule II.
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"Going Private" Transactions
The Commission has adopted Rule 13e-3 under the Exchange Act which is
applicable to certain "going private" transactions and which may be applicable
to the Offer and Proposed Merger. The information and disclosures Buyer is
required to make under Rule 13e-3 are contained in this Offer to Purchase and
Buyer has filed a Schedule 13E-3 with the Commission in accordance with Rule
13e-3. However, the disclosures provided and the filing made are not to be
construed to deem any of Buyer or any of its affiliates as "affiliates" or
"control persons" of Company. Because of the restrictive provisions of the
Standstill Agreement which, among other things, limit the ability of Buyer and
its affiliates to elect representatives to Company's Board of Directors, to call
shareholder meetings, to form a "group", to induce any other person to initiate
a tender offer, or to otherwise exercise control over Company, Buyer does not
believe that it or any of its affiliates or "control persons" are "affiliates"
of Company for purposes of Rule 13e-3 or otherwise. See Section 10 "Contracts
and Transactions among Parent, Buyer and Company." Furthermore, under the
Standstill Agreement, Parent and its affiliates are required to vote their
shares for the election of persons designated by the other unaffiliated
directors to fill Board seats other than Parent's proportionate number to which
it is entitled under the Standstill Agreement.
INTEREST IN SECURITIES OF SUBJECT COMPANY
Except as described in this Offer to Purchase, none of Buyer, Parent,
Pakhoed USA Inc., or Pakhoed Investeringen B.V. or, to the best knowledge of
Buyer, any of the persons listed in Schedule I hereto, or any associate or
majority owned subsidiary of Buyer, Parent, Pakhoed USA Inc., or Pakhoed
Investeringen B.V. or any of the persons so listed, beneficially owns any equity
security of Company, and none of Buyer, Parent, Pakhoed USA Inc., or Pakhoed
Investeringen B.V. or, to the best knowledge of Buyer, any of the other persons
referred to above, or any of the respective directors, executive officers or
subsidiaries of any of the foregoing, has effected any transaction in any equity
security of Company during the past 60 days.
Except as described in this Offer to Purchase, including, but not limited
to, the information disclosed in Section 10 "Contracts and Transactions among
Parent, Buyer and Company" as of the date hereof, (a) there have not been any
contacts, transactions or negotiations between Buyer or Parent, any of their
respective subsidiaries or, to the best knowledge of Buyer, any of the persons
listed in Schedule I hereto, on the one hand, and Company or any of its
directors, officers or affiliates, on the other hand, that are required to be
disclosed pursuant to the rules and regulations of the Commission, and (b) none
of Buyer, Parent or, to the best knowledge of Buyer, any of the persons listed
in Schedule I hereto has any contract, arrangement, understanding or
relationship with any person with respect to any securities of Company. Prior to
the Effective Date, Buyer and Parent intend to have ongoing contacts and
negotiations with Company and its directors, officers and shareholders.
THE TENDER OFFER
1. TERMS OF THE OFFER
Upon the terms and subject to the conditions of the Offer, Buyer will
accept for payment and pay the Offer Price for all Shares validly tendered prior
to the Expiration Date and not theretofore withdrawn in accordance with Section
3. The term "Expiration Date" means 8:00 p.m., New York City time, on Monday,
July 15, 1996, unless and until Buyer shall have extended the period of time
during which the Offer is open pursuant to this Section, in which event the term
"Expiration Date" shall mean the latest time and date at which the Offer, as so
extended by Buyer, will expire.
If by 8:00 p.m., New York City time, on Monday, July 15, 1996 (or any date
or time then set as the Expiration Date), any or all of the conditions to the
Offer have not been satisfied or waived, Buyer reserves the right (but shall not
be obligated), subject to the applicable rules and regulations of the
Commission, to terminate the Offer and not accept for payment or pay for any
Shares and return all tendered Shares to tendering shareholders. In addition,
Buyer may: (a) extend the Offer to a date not later than August 31, 1996 if any
Governmental Approvals shall not have been obtained by July 31, 1996 or, if by
July 26, 1996, less than
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80% of the outstanding Shares have been tendered for purchase and Buyer
reasonably believes that 80% or more of the Shares will be tendered if the
Expiration Date is extended to not later than August 31, 1996; and (b) subject
to the right of Company shareholders to withdraw Shares until the Expiration
Date, retain the Shares that have been tendered during the period or periods for
which the Offer is extended. In the event the Tender Offer is extended beyond
July 31, 1996, the Offer Price shall be increased by an amount equal to the
product of the Offer Price multiplied by the prime interest rate as announced by
Bank of America NW, N.A. (doing business as Seafirst Bank) in Seattle,
Washington as in effect on August 1, 1996, multiplied by the quotient of the
number of days that the Tender Offer is extended after July 31, 1996, divided by
365.
There can be no assurance that Buyer will exercise its right to extend the
Offer. Any extension, amendment or termination to the Offer will be followed as
promptly as practicable by public announcement. In the case of an extension,
Rule 14e-l(d) under the Exchange Act requires that the announcement be issued no
later than 9:00 a.m., New York City time, on the next business day after the
previously scheduled Expiration Date in accordance with the public announcement
requirements of Rule 14d-4(c) under the Exchange Act. Subject to applicable law
(including Rules 14d-4(c) and 14d-6(d) under the Exchange Act, which require
that any material change in the information published, sent or given to
shareholders in connection with the Offer be promptly disseminated to
shareholders in a manner reasonably designed to inform shareholders of such
change), and without limiting the manner in which Buyer may choose to make any
public announcement, Buyer will not have any obligation to publish, advertise or
otherwise communicate any such public announcement other than by making a
release to the Dow Jones News Service. As used in this Offer to Purchase,
"business day" has the meaning set forth in Rule 14d-1 under the Exchange Act.
The minimum period during which an Offer must remain open following material
changes in the terms of the Offer or information concerning the Offer, other
than a change in price or a change in the percentage of securities sought, will
depend upon the facts and circumstances then existing, including the relative
materiality of the changed terms or information. In the case of a change in the
Offer Price or a change in the percentage of Shares sought, the Offer must
remain open for at least ten (10) business days from the date the notice of such
change is published, sent or given to shareholders.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS: (A) THE MINIMUM TENDER
CONDITION; (B) THERE BEING OBTAINED OR WAIVED ALL GOVERNMENTAL APPROVALS FOR THE
OFFER AND THAT ALL APPLICABLE LAWS ARE COMPLIED WITH; AND (C) THE SATISFACTION
OR WAIVER OF THE OTHER CONDITIONS SET FORTH IN SECTION 12. SEE THE INTRODUCTION
AND SECTION 12.
Buyer, pursuant to the Reorganization Agreement, may not, without the prior
written consent of Company: (a) decrease the Offer Price; (b) decrease the
Minimum Tender Condition; (c) impose additional conditions to the Offer; (d)
change the Expiration Date so that the Offer ends less than 30 business days
from the date on which the Offer is first publicly announced or extend the
Expiration Date beyond July 31, 1996, provided that the Expiration Date may be
extended by Buyer to a date not later than August 31, 1996 under the conditions
described above; (e) waive or modify the Minimum Tender Condition; or (f) change
the conditions to the Offer in any material respect, except that Buyer may waive
any of the other conditions to the Offer. The foregoing limitations shall not be
applicable in the event the Reorganization Agreement is terminated in accordance
with the termination provisions of the Reorganization Agreement, in which event
Buyer may modify its Offer subject to certain conditions set forth in the
Standstill Agreement between Parent, Parent Investeringen B.V., and Company,
dated September 19, 1986, as amended (the "Standstill Agreement").
Company has provided Buyer, the Depositary and the Information Agent with
Company's shareholder list and security listings for the purpose of
disseminating the Offer to holders of Shares. This Offer to Purchase, the
related Letter of Transmittal and other relevant materials will be mailed to
record holders of Shares, and will be furnished to brokers, dealers, banks,
trust companies and similar persons whose names, or the names of whose nominees,
appear on the shareholder lists, or, if applicable, who are listed as
participants in a clearing agency's security position listing, for subsequent
transmittal to beneficial owners of Shares, by Buyer following receipt of such
lists or listings from Company, or by Company if it so elects.
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2. PROCEDURE FOR TENDERING SHARES
VALID TENDER. For a shareholder to validly tender Shares pursuant to the
Offer, either: (a) a properly completed and duly executed Letter of Transmittal
(or facsimile thereof), together with any required signature guarantees, or, in
the case of a book-entry transfer, an Agent's Message (as defined below), and
any other required documents, must be received by the Depositary at one of its
addresses set forth on the back cover of this Offer to Purchase prior to the
Expiration Date and either certificates for tendered Shares must be received by
the Depositary at one of such addresses or such Shares must be delivered
pursuant to the procedures for book-entry transfer set forth below (and a
Book-Entry Confirmation (as defined below) received by the Depositary), in each
case prior to the Expiration Date; or (b) the tendering shareholder must comply
with the guaranteed delivery procedures set forth below.
The Depositary will establish accounts with respect to the Shares at the
Depositary Trust Company and the Philadelphia Depository Trust Company (the
"Book-Entry Transfer Facilities") for purposes of the Offer within two (2)
business days after the date of this Offer to Purchase. Any financial
institution that is a participant in any of the Book-Entry Transfer Facilities'
systems may make book-entry delivery of Shares by causing a Book-Entry Transfer
Facility to transfer such Shares into the Depositary's account in accordance
with such Book-Entry Transfer Facility's procedures for such transfer. However,
although delivery of Shares may be effected through book-entry transfer into the
Depositary's account at a Book-Entry Transfer Facility, the Letter of
Transmittal (or facsimile thereof), properly completed and duly executed, with
any required signature guarantees, or an Agent's Message, and any other required
documents, must, in any case, be transmitted to, and received by, the Depositary
at one of its addresses set forth on the back cover of this Offer to Purchase
prior to the Expiration Date, or the tendering shareholder must comply with the
guaranteed delivery procedures described below. The confirmation of a book-entry
transfer of Shares into the Depositary's account at a Book-Entry Transfer
Facility as described above is referred to herein as a "Book-Entry
Confirmation." DELIVERY OF DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY IN
ACCORDANCE WITH SUCH BOOK-ENTRY TRANSFER FACILITY'S PROCEDURES DOES NOT
CONSTITUTE DELIVERY TO THE DEPOSITARY.
The term "Agent's Message" means a message transmitted by a Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that such Book-Entry Transfer Facility has
received an express acknowledgement from the participant in such Book-Entry
Transfer Facility tendering the Shares that such participant has received and
agrees to be bound by the terms of the Letter of Transmittal and that Buyer may
enforce such agreement against the participant.
THE METHOD OF DELIVERY OF SHARES, THE LETTER OF TRANSMITTAL AND ALL OTHER
REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY TRANSFER FACILITY,
IS AT THE ELECTION AND RISK OF THE TENDERING SHAREHOLDER. SHARES WILL BE DEEMED
DELIVERED ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY (INCLUDING, IN THE CASE
OF A BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION). IF DELIVERY IS BY MAIL,
REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED.
IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
SIGNATURE GUARANTEES. No signature guarantee is required on the Letter of
Transmittal if: (a) the Letter of Transmittal is signed by the registered
holder(s) (which term, for purposes of this Section, includes any participant in
any of the Book-Entry Transfer Facilities' systems whose name appears on a
security position listing as the owner of the Shares) of Shares tendered
therewith and such registered holder has not completed either the box entitled
"Special Delivery Instructions" or the box entitled "Special Payment
Instructions" on the Letter of Transmittal; or (b) if such Shares are tendered
for the account of a financial institution (including most commercial banks,
savings and loan associations and brokerage houses) that is a participant in the
Security Transfer Agents Medallion Program, the New York Stock Exchange
Medallion Signature Guarantee Program or the Stock Exchange Medallion Program
(an "Eligible Institution"). In all other cases, all signatures on the Letter of
Transmittal must be guaranteed by an Eligible Institution. See Instructions 1
and 5 to the Letter of Transmittal. If the certificates for Shares are
registered in the name of a
17
<PAGE> 18
person other than the signer of the Letter of Transmittal, or if payment is to
be made or certificates for Shares not tendered or not accepted for payment are
to be returned to a person other than the registered holder of the certificates
surrendered, the tendered certificates must be endorsed or accompanied by duly
executed stock powers, in either case signed exactly as the name or names of the
registered holders or owners appear on the certificates, with the signatures on
the certificates or stock powers guaranteed as aforesaid. See Instructions 1, 5
and 7 to the Letter of Transmittal.
GUARANTEED DELIVERY. If a shareholder desires to tender Shares pursuant to
the Offer and such shareholder's certificates for Shares are not immediately
available or the procedure for book-entry transfer cannot be completed on a
timely basis or time will not permit all required documents to reach the
Depositary prior to the Expiration Date, such shareholder's tender may be
effected if all the following conditions are met:
(a) such tender is made by or through an Eligible Institution;
(b) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form provided by Buyer, is received by the
Depositary, as provided below, prior to the Expiration Date; and
(c) the certificates for all tendered Shares, in proper form for
transfer (or a Book-Entry Confirmation with respect to all such Shares),
together with a properly completed and duly executed Letter of Transmittal
(or facsimile thereof), with any required signature guarantees, or, in the
case of a book-entry transfer, an Agent's Message, and any other required
documents are received by the Depositary within three (3) trading days
after the date of execution of such Notice of Guaranteed Delivery.
The Notice of Guaranteed Delivery may be delivered by hand to the
Depositary or transmitted by facsimile transmission or mail to the Depositary
and must include a guarantee by an Eligible Institution in the form set forth in
such Notice of Guaranteed Delivery.
Notwithstanding any other provision hereof, payment for Shares accepted for
payment pursuant to the Offer will in all cases be made only after timely
receipt by the Depositary of: (a) certificates for (or a Book-Entry Confirmation
with respect to) such Shares; (b) a Letter of Transmittal (or facsimile
thereof), properly completed and duly executed, with any required signature
guarantees, or, in the case of a book-entry transfer, an Agent's Message; and
(c) any other documents required by the Letter of Transmittal. Accordingly,
tendering shareholders may be paid at different times depending upon when
certificates for Shares or Book-Entry Confirmations with respect to Shares and
other required documents are actually received by the Depositary. In the event
the Tender Offer is extended beyond July 31, 1996 the Offer Price shall be
increased by an amount equal to the product of the Offer Price multiplied by the
prime interest rate as announced by Bank of America NW, N.A. (doing business as
Seafirst Bank) in Seattle, Washington as in effect on August 1, 1996, multiplied
by the quotient of the number of days that the Tender Offer is extended after
July 31, 1996, divided by 365. EXCEPT IN THE CASE OF AN EXTENSION OF THE OFFER
BEYOND JULY 31, 1996, UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE
PURCHASE PRICE OF THE SHARES TO BE PAID BY BUYER FOR SHARES TENDERED.
The valid tender of Shares pursuant to one of the procedures described
above will constitute a binding agreement between the tendering shareholder and
Buyer upon the terms and subject to the conditions of the Offer.
APPOINTMENT. By executing a Letter of Transmittal as set forth above, the
tendering shareholder will irrevocably appoint designees of Buyer as such
shareholder's attorneys-in-fact and proxies in the manner set forth in the
Letter of Transmittal, each with full power of substitution, to the full extent
of such shareholder's rights with respect to the Shares tendered by such
shareholder and accepted for payment by Buyer and with respect to any and all
other Shares or other securities or rights issued or issuable in respect of such
Shares on or after May 31, 1996. All such proxies will be considered coupled
with an interest in the tendered Shares. Such appointment will be effective
when, and only to the extent that, Buyer accepts for payment Shares tendered by
such shareholder as provided herein. Upon such appointment, all prior powers of
attorney, proxies and consents given by such shareholder with respect to such
Shares or other securities or rights will, without further action, be revoked
and no subsequent powers of attorney, proxies, consents or revocations may be
given
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<PAGE> 19
(and, if given, will not be deemed effective). The designees of Buyer will
thereby be empowered to exercise all voting and other rights with respect to
such Shares and other securities or rights in respect of any annual, special or
adjourned meeting of Company's shareholders, actions by written consent in lieu
of any such meeting or otherwise, as they in their sole discretion deem proper.
Buyer reserves the right to require that, in order for Shares to be deemed
validly tendered, immediately upon Buyer's acceptance for payment of such
Shares, Buyer or its designee must be able to exercise full voting, consent and
other rights with respect to such Shares and other securities or rights,
including voting at any meeting of shareholders.
DETERMINATION OF VALIDITY. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance of any tender of Shares
will be determined by Buyer in its sole discretion, which determination will be
final and binding. Buyer reserves the absolute right to reject any or all
tenders determined by it not to be in proper form or the acceptance for payment
of or payment for which may, in the opinion of Buyer's counsel, be unlawful.
Buyer also reserves the absolute right to waive any defect or irregularity in
the tender of any Shares of any particular shareholder whether or not similar
defects or irregularities are waived in the case of other shareholders. No
tender of Shares will be deemed to have been validly made until all defects or
irregularities relating thereto have been cured or waived. None of Buyer,
Parent, the Depositary, the Information Agent, or any other person will be under
any duty to give notification of any defects or irregularities in tenders or
incur any liability for failure to give any such notification. Buyer's
interpretation of the terms and conditions of the Offer (including the Letter of
Transmittal and the instructions thereto) will be final and binding.
BACKUP WITHHOLDING. In order to avoid "backup withholding" of federal
income tax on payments of cash pursuant to the Offer, a shareholder surrendering
Shares in the Offer must, unless an exemption applies, provide the Depositary
with such shareholder's correct TIN on a Substitute Form W-9 and certify under
penalties of perjury that such TIN is correct and that such shareholder is not
subject to backup withholding. If a shareholder does not provide such
shareholder's correct TIN or fails to provide the certifications described
above, the IRS may impose a penalty on such shareholder and payment of cash to
such shareholder pursuant to the Offer may be subject to backup withholding of
31%. All shareholders surrendering Shares pursuant to the Offer should complete
and sign the main signature form and the Substitute Form W-9 included as part of
the Letter of Transmittal to provide the information and certification necessary
to avoid backup withholding (unless an applicable exemption exists and is proved
in a manner satisfactory to Buyer and the Depositary). Certain shareholders
(including, among others, all corporations and certain foreign individuals and
entities) are not subject to backup withholding. Noncorporate foreign
shareholders should complete and sign the main signature form and a Form W-8,
Certificate of Foreign Status, in order to avoid backup withholding. See
Instruction 10 to the Letter of Transmittal.
3. WITHDRAWAL RIGHTS
Except as otherwise provided in this Section 3, tenders of Shares are
irrevocable. Shares tendered pursuant to the Offer may be withdrawn pursuant to
the procedures set forth below at any time prior to the Expiration Date and,
unless theretofore accepted for payment and paid for by Buyer pursuant to the
Offer, may also be withdrawn at any time after August 6, 1996, or such later
date if the Offer is extended in accordance with its terms.
For a withdrawal to be effective, a written, telegraphic or facsimile
transmission notice of withdrawal must be timely received by the Depositary at
one of its addresses set forth on the back cover of this Offer to Purchase and
must specify the name of the person having tendered the Shares to be withdrawn,
the number of Shares to be withdrawn and the name of the registered holder of
the Shares to be withdrawn, if different from the name of the person who
tendered the Shares. If certificates for Shares have been delivered or otherwise
identified to the Depositary, then, prior to the physical release of such
certificates, the serial numbers shown on such certificates must be submitted to
the Depositary and, unless such Shares have been tendered by an Eligible
Institution, the signatures on the notice of withdrawal must be guaranteed by an
Eligible Institution. If Shares have been delivered pursuant to the procedure
for book-entry transfer as set forth in Section 2, any notice of withdrawal must
also specify the name and number of the account at the appropriate Book-Entry
Transfer Facility to be credited with the withdrawn Shares and otherwise comply
with such Book-Entry
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<PAGE> 20
Transfer Facility's procedures. Withdrawals of tenders of Shares may not be
rescinded, and any Shares properly withdrawn will thereafter be deemed not
validly tendered for purposes of the Offer. However, withdrawn Shares may be
retendered by again following one of the procedures described in Section 2 at
any time prior to the Expiration Date.
All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by Buyer in its sole discretion, which
determination will be final and binding. None of Buyer, Parent, the Depositary,
the Information Agent or any other person will be under any duty to give
notification of any defects or irregularities in any notice of withdrawal or
incur any liability for failure to give any such notification.
4. ACCEPTANCE FOR PAYMENT AND PAYMENT
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is amended, the terms and conditions of any such amendment), Buyer (i)
may accept for payment and pay for all Shares validly tendered and not properly
withdrawn in accordance with Section 3 upon satisfaction of the conditions to
the Offer set forth herein and (ii) will accept for payment such Shares promptly
after the Expiration Date. All questions as to the satisfaction of such terms
and conditions will be determined by Buyer in its sole discretion, which
determination will be final and binding. See Sections 1, 2, and 14. Buyer
expressly reserves the right, in its sole discretion, to delay acceptance for
payment of or payment for Shares in order to comply in whole or in part with any
applicable law, including, without limitation, the HSR Act, Exon-Florio, the
Investment Canada Act, the Competition Act (Canada), and European Economic Area
("EEA") and National Merger regulation. See Section 13. Any such delays will be
effected in compliance with Rule 14e-l(c) under the Exchange Act (relating to a
bidder's obligation to pay for or return tendered securities promptly after the
termination or withdrawal of such bidder's offer).
Parent filed a Notification and Report Form with respect to the Offer under
the HSR Act on June 7, 1996. Company is also subject to a filing requirement
under the HSR Act, with respect to which Parent provided notice to Company on
June 3, 1996, pursuant to the HSR Act. The waiting period under the HSR Act with
respect to the Offer will expire at 11:59 p.m., New York City time, on June 24,
1996, unless early termination of the waiting period is granted. However, the
Antitrust Division of the Department of Justice (the "Antitrust Division") or
the Federal Trade Commission (the "FTC") may extend the waiting period by
requesting additional information or documentary material from Parent and
Company. If such a request is made, such waiting period will expire at 11:59
p.m., New York City time, on the tenth (10th) day after substantial compliance
by Parent and Company with such request or as may be otherwise stipulated by
agreement with the Antitrust Division and the FTC. Buyer and Company expect to
make a joint voluntary Exon-Florio notice filing with respect to the Offer on
June 10, 1996, and shall be notified within 30 days after the Exon-Florio filing
was submitted if the Committee on Foreign Investment in the United States
("CFIUS") wishes to investigate the circumstances of the Offer. Parent and Buyer
will also make relevant pre-merger notification filings with Canadian regulatory
authorities, pursuant to the Competition Act (Canada) and relevant filings
pursuant to the Investment Canada Act. See Section 13 "Certain Legal Matters."
In all cases, payment for Shares accepted for payment pursuant to the Offer
will be made only after timely receipt by the Depositary of: (a) certificates
for (or a timely Book-Entry Confirmation with respect to) such Shares; (b) a
Letter of Transmittal (or facsimile thereof), properly completed and duly
executed, with any required signature guarantees, or, in the case of a
book-entry transfer, an Agent's Message; and (c) any other documents required by
the Letter of Transmittal. The Offer Price paid to any shareholder pursuant to
the Offer will be the highest Offer Price paid to any other shareholder pursuant
to the Offer.
For purposes of the Offer, Buyer will be deemed to have accepted for
payment, and thereby purchased, Shares properly tendered to Buyer and not
withdrawn as, if and when Buyer gives oral or written notice to the Depositary
of Buyer's acceptance for payment of such Shares. Payment for Shares accepted
for payment pursuant to the Offer will be made by deposit of the purchase price
therefor with the Depositary, which will act as agent for tendering shareholders
for the purpose of receiving payment from Buyer and transmitting payment to
tendering shareholders.
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<PAGE> 21
If any tendered Shares are not purchased pursuant to the Offer for any
reason, certificates for any such Shares will be returned, without expense to
the tendering shareholder (or, in the case of Shares delivered by book-entry
transfer of such Shares into the Depositary's account at a Book-Entry Transfer
Facility pursuant to the procedure set forth in Section 2, such Shares will be
credited to an account maintained at the appropriate Book-Entry Transfer
Facility), as promptly as practicable after the expiration or termination of the
Offer.
Buyer reserves the right to transfer or assign, in whole or from time to
time in part, to Parent, or to one or more direct or indirect wholly-owned
subsidiaries of Parent, the right to purchase Shares tendered pursuant to the
Offer, but any such transfer or assignment will not relieve Buyer of its
obligations under the Offer and will in no way prejudice the rights of tendering
shareholders to receive payment for Shares validly tendered and accepted for
payment pursuant to the Offer.
5. PRICE RANGE OF THE SHARES; DIVIDENDS ON THE SHARES
The Shares are traded on the NYSE and prices are quoted under the symbol
UVX. The following table sets forth, for each of the periods indicated, the high
and low sales prices per Share as reported on the NYSE.
UNIVAR CORPORATION
<TABLE>
<CAPTION>
SALES QUOTATION
-----------------
FISCAL YEAR ENDED FEBRUARY 28(29), HIGH LOW
----------------------------------------------------------- ------ ------
<S> <C> <C>
1994 First Quarter.................................... $11.38 $ 9.50
Second Quarter................................... 13.38 10.88
Third Quarter.................................... 14.25 10.00
Fourth Quarter................................... 12.88 10.88
1995 First Quarter.................................... 11.50 9.75
Second Quarter................................... 12.00 9.75
Third Quarter.................................... 14.50 11.75
Fourth Quarter................................... 13.75 11.63
1996 First Quarter.................................... 12.75 10.38
Second Quarter................................... 15.88 11.75
Third Quarter.................................... 16.25 12.25
Fourth Quarter................................... 13.75 9.88
1997 First Quarter.................................... 12.75 10.13
</TABLE>
On May 31, 1996, the last full trading day before the first public
announcement of the intention to commence the Offer, the last reported sale
quotation of the Shares on the NYSE was $12 3/8 per Share. On June 3, 1996,
prior to the commencement of trading, Buyer announced the intention to commence
the Offer. SHAREHOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR THE
SHARES.
According to Company's 1996 10-K, cash dividends of $0.075 per Share have
been declared during each of the last eight (8) quarters.
6. EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES
MARKET FOR THE SHARES. The tender and purchase of Shares pursuant to the
Offer will reduce the number of holders of Shares and the number of Shares that
might otherwise trade publicly and could adversely affect the liquidity and
market value of the remaining Shares. The extent of the continuing public market
for the Shares and the availability of quotations will depend upon the number of
holders of Shares remaining at such time, the interests in maintaining a market
in Shares on the part of securities firms and other factors. As explained below,
following consummation of the Offer (if requisite conditions are met) or
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<PAGE> 22
following consummation of the Proposed Merger (if such conditions are not met),
Buyer plans to cause Company to deregister the Shares under the Exchange Act and
to delist the Shares from all stock exchanges. Accordingly, following the
consummation of the Proposed Merger and possibly following the Offer, there will
be no continuing public market for the Shares.
NYSE. Depending upon the number of Shares purchased pursuant to the Offer,
the Shares may no longer meet the requirements of the NYSE for continued
inclusion on the NYSE, which require that an issuer have at least 1,100,000
publicly held shares, held by at least 2,000 shareholders of 100 shares or more,
with a market value of at least $40,000,000, and have demonstrated earning power
before federal income taxes and under competitive conditions of $2,500,000
during the latest fiscal year and of $2,000,000 during each of the preceding two
(2) years. The number of beneficial holders of stock held in the name of NYSE
member organizations will be considered in addition to the holders of record.
According to Company's 1996 10-K, as of February 29, 1996, there were
approximately 6,800 beneficial holders of record of Shares and as of May 31,
1996 there were 21,735,415 Shares outstanding. If, as a result of the purchase
of Shares pursuant to the Offer or otherwise, the Shares no longer meet the
requirements of the NYSE for continued inclusion in the NYSE, the Shares could
be adversely affected.
EXCHANGE ACT REGISTRATION. The Shares are currently registered under the
Exchange Act. Registration of the Shares under the Exchange Act may be
terminated upon application of Company to the Commission if the Shares are
neither listed on a national securities exchange nor held by 300 or more holders
of record. Termination of registration of the Shares under the Exchange Act
would substantially reduce the information required to be furnished by Company
to its shareholders and to the Commission and would make certain provisions of
the Exchange Act no longer applicable to Company, such as the short-swing profit
recovery provisions of Section 16(b) of the Exchange Act, the requirement of
furnishing a proxy statement pursuant to Section 14(a) of the Exchange Act in
connection with shareholders' meetings and the related requirement of furnishing
an annual report to shareholders, and the requirements of Rule 13e-3 under the
Exchange Act with respect to "going private" transactions. Furthermore, the
ability of "affiliates" of Company and persons holding "restricted securities"
of Company to dispose of such securities pursuant to Rule 144 or 144A
promulgated under the Securities Act of 1933, as amended, may be impaired or
eliminated.
Parent and Buyer intend to seek to cause Company to apply for termination
of registration of the Shares under the Exchange Act as soon as possible after
the completion of the Offer and to delist the Shares from all stock exchanges
subsequent to the consummation of the Offer if the requirements for such
termination are met. If termination of the registration of Company's Shares
becomes effective subsequent to the consummation of the Offer and prior to the
Proposed Merger, then Company may not be required to and will not distribute any
proxy statement or information statement, pursuant to Section 14 of the Exchange
Act, in connection with approval of the Proposed Merger. If registration of the
Shares is not terminated prior to the Proposed Merger, then the Shares will be
delisted from all stock exchanges and the registration of the Shares under the
Exchange Act will be terminated following the consummation of the Proposed
Merger.
MARGIN REGULATIONS. The Shares are currently "margin securities" under the
regulations of the Board of Governors of the Federal Reserve System (the
"Federal Reserve Board"), which has the effect, among other things, of allowing
brokers to extend credit on the collateral of the Shares. Depending upon factors
similar to those described above regarding listing and market quotations, it is
possible that, following the Offer, the Shares would no longer constitute
"margin securities" for the purposes of the margin regulations of the Federal
Reserve Board and therefore could no longer be used as collateral for loans made
by brokers and others.
7. CERTAIN INFORMATION CONCERNING COMPANY
Company is a Washington corporation with its principal offices at Kirkland,
Washington. According to Company's 1996 10-K, Company's principal line of
business is the distribution of industrial, agricultural and pest control
chemicals and related products and services. As a distributor of industrial,
agricultural and pest control chemicals and related products, Company's role is
to purchase chemicals from manufacturers in truck, railcar, or tankcar qualities
and sell them in smaller quantities to various customers. Company adds value to
its
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<PAGE> 23
products through superior service, selection, blending and packaging and
delivery reliability and Company provides customers assistance with
environmental and regulatory compliance. Company also provides a hazardous waste
management service in the United States called ChemCare(R). Through ChemCare(R),
Company provides its customers with logistics management, temporary waste
storage, and access to various treatment and disposal technologies. Company is
currently developing two ancillary services in the U.S.: contract chemical
management services, and third party logistics.
Set forth below is certain selected consolidated financial information with
respect to Company and the Company Subsidiaries (defined as any corporation,
partnership, limited liability company, or other entity in which Company owns,
directly or indirectly, any equity interest and whose financial statements are
consolidated with those of Company for accounting purposes under GAAP) excerpted
from the information contained in Company's 1996 10-K. More comprehensive
financial information is included in Company's 1996 10-K and other documents
filed by Company with the Commission. The following summary is qualified in its
entirety by reference to Company's 1996 10-K and such other documents and all
the financial information (including any related notes) contained therein.
Company's 1996 10-K and such other documents should be available for inspection
and copies thereof should be obtainable in the manner set forth below under
"Available Information."
23
<PAGE> 24
UNIVAR CORPORATION
SELECTED CONSOLIDATED FINANCIAL INFORMATION
YEAR ENDED FEBRUARY 28(29)
(THOUSANDS OF DOLLARS EXCEPT FOR SHARE DATA)
<TABLE>
<CAPTION>
1996 1995 1994
---------- ---------- ----------
<S> <C> <C> <C>
Sales.................................................... $2,037,674 $1,912,728 $1,802,464
Cost of sales............................................ 1,756,840 1,639,055 1,532,931
---------- ---------- ----------
Gross margin............................................. 280,834 273,673 269,533
Operating expenses....................................... 254,138 248,767 242,388
Reengineering and restructuring charges.................. 160 37,361 4,507
---------- ---------- ----------
Income (loss) from operations............................ 26,536 (12,455) 22,638
Interest expense......................................... (15,226) (11,973) (12,921)
Other -- net............................................. 896 709 525
---------- ---------- ----------
Income (loss) before provision for (benefit of) taxes on 12,206 (23,719) 10,242
income and minority interest...........................
Provision for (benefit of) taxes on income (loss)........ 6,306 (8,066) 4,403
---------- ---------- ----------
Income (loss) before minority interest................... 5,900 (15,653) 5,839
Minority interest's share in income (loss)............... -- 604 379
---------- ---------- ----------
Net income (loss)........................................ $ 5,900 $ (16,257) $ 5,460
========= ========= =========
Weighted average common shares outstanding............... 21,701 21,346 19,703
Net income (loss) per share.............................. $ 0.27 $ (0.76) $ 0.28
Cash dividends declared per share........................ $ 0.30 $ 0.30 $ 0.30
Total assets............................................. 740,605 673,203 652,694
Total interest bearing debt.............................. 188,703 162,348 177,685
Long-term debt........................................... 132,812 122,086 147,058
Working capital.......................................... 75,443 76,608 83,545
Shareholders' equity..................................... 179,606 176,163 157,406
Book value per share..................................... $ 8.28 $ 8.08 $ 8.01
Return on beginning equity............................... 3.3% (10.3)% 3.3%
</TABLE>
AVAILABLE INFORMATION. Company is subject to the informational
requirements of the Exchange Act and, in accordance therewith, is required to
file reports relating to its business, financial condition and other matters.
Information as of particular dates concerning Company's directors and officers,
their remuneration, stock options and other matters, the principal holders of
Company's securities and any material interest of such persons in transactions
with Company is required to be disclosed in proxy statements distributed to
Company's shareholders and filed with the Commission. Such reports, proxy
statements and other information should be available for inspection at the
public reference facilities of the Commission at 450 Fifth Street, N.W.,
Washington, DC 20549, and at the regional offices of the Commission located at
Seven World Trade Center, 13th Floor, New York, NY 10048 and Citicorp Center,
500 West Madison Street (Suite 1400), Chicago, IL 60661. Copies of such
information should be obtainable, by mail, upon payment of the Commission's
customary charges, by writing to the Commission's principal office at 450 Fifth
Street, N.W., Washington, DC 20549.
The information concerning Company contained herein has been taken from or
based upon publicly available documents on file with the Commission and other
publicly available information. Although Buyer and Parent do not have any
knowledge that any such information is untrue, neither Buyer nor Parent takes
any
24
<PAGE> 25
responsibility for the accuracy or completeness of such information or for any
failure by Company to disclose events that may have occurred and may affect the
significance or accuracy of any such information.
8. CERTAIN INFORMATION CONCERNING BUYER AND PARENT
Buyer, a Washington corporation that is a wholly owned subsidiary of
Pakhoed USA Inc. and an indirect subsidiary of Parent, was organized on May 24,
1996 to acquire Company and has not conducted any unrelated activities since its
organization. The principal office of Buyer is located at the principal office
of Pakhoed USA Inc., which is located at 2000 West Loop South, Suite 2200,
Houston, TX 77027. All outstanding shares of capital stock of Buyer are owned by
Pakhoed USA Inc.
Parent is a publicly held limited liability company formed under the laws
of the Netherlands with a business address of 333 Blaak, 3011 GB Rotterdam, The
Netherlands. Parent is engaged in providing storage, logistics and distribution
services for companies in the oil and chemical industry on a worldwide basis.
Parent's business specializes in two primary areas, operation of tank storage
facilities in Europe, the United States and in Southeast Asia, and shipping and
distribution of chemicals, mineral oils and bitumen. Parent's tank storage
facilities provide storage for chemicals and oils, including heavy fuels,
gasolines, chemicals, lubricating oils and edible oils. Parent's shipping and
distribution operations are located primarily in Europe.
Parent and its affiliates employ over 5,000 people in North America, Europe
and Southeast Asia. The name, business address, citizenship, present principal
occupation, and five-year employment history of each of the directors and
executive officers of Buyer and Parent are set forth in Schedule I to this Offer
to Purchase. Parent operates and owns subsidiaries worldwide, including, but not
limited to, Pakhoed Investeringen B.V. and Pakhoed USA Inc.
Set forth below is certain selected consolidated financial information with
respect to Parent and its subsidiaries excerpted from Parent's Report and
Accounts 1995 (the "Parent 1995 Annual Report"). The financial information has
been prepared using accounting principles generally accepted in the Netherlands
("Dutch accounting principles"). Dutch accounting principles differ in several
respects from GAAP. These differences result in both a monetary impact on both
shareholders' equity and net income, and alternative classification of certain
amounts and transactions. The most significant of these differences results from
the Dutch practice of charging all goodwill arising from purchases of businesses
directly against shareholders' equity rather than capitalizing and amortizing
such amounts over future periods as required by GAAP. Had such items been
recorded in accordance with GAAP, shareholders' equity at December 31, 1995,
would have been approximately 203 million Dutch Guilders greater, and net income
for the year then ended would have been approximately 14 million Dutch Guilders
less. Parent believes that other differences between Dutch accounting principles
and GAAP are immaterial for purposes of this Offer to Purchase.
The accompanying consolidated financial statements are stated in Dutch
Guilders. On June 5, 1996, the Wall Street Journal reported that, as of June 4,
1996, one U.S. dollar equaled 1.713 Dutch Guilders.
25
<PAGE> 26
ROYAL PAKHOED N.V.
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(IN MILLIONS OF DUTCH GUILDERS EXCEPT PER SHARE DATA)*
<TABLE>
<CAPTION>
DECEMBER 31,
------------------------------
1995 1994 1993
-------- -------- --------
<S> <C> <C> <C>
CONSOLIDATED PROFIT AND LOSS ACCOUNTS 1993 THROUGH 1995
Net Operating Revenues......................................... 2,069.6 1,365.2 1,448.7
Expenses....................................................... -1,789.8 -1,102.7 -1,200.8
Depreciation................................................... -117.6.. -111.2 -105.0
-------- -------- --------
Operating Results.............................................. 162.2 151.3 142.9
Income from Participations..................................... 48.2 22.3 14.6
-------- -------- --------
Group Results.................................................. 210.4 173.6 157.5
Net Interest Expense........................................... -42.8 -28.4 -42.7
Income from ordinary Operations before Taxes................... 167.6 145.2 114.8
Taxes.......................................................... -44.0 -49.9 -39.1
-------- -------- --------
Income from ordinary Operations after Taxes.................... 123.6 95.3 75.7
Extraordinary Results after Taxes.............................. -2.1 -2.6 -15.4
-------- -------- --------
Net Profit..................................................... 121.5 92.7 60.3
Net Profit (per share)...................................... 4.00 3.20 2.32
CONSOLIDATED BALANCE SHEETS AT YEAR-END 1993 THROUGH 1995
Land and Buildings............................................. 366.6 360.2 352.7
Tank Terminals and Ancillary Equipment......................... 1,413.1 1,356.3 1,334.7
Ships.......................................................... 385.3 391.7 393.6
Machinery and Equipment........................................ 284.8 253.2 279.4
Under Construction............................................. 99.3 42.9 50.7
-------- -------- --------
Tangible Fixed Assets.......................................... 2,549.1 2,404.3 2,411.1
Depreciation................................................... 1,247.0 1,170.3 1,123.4
-------- -------- --------
Book Value Tangible Fixed Assets............................... 1,302.1 1,234.0 1,287.7
Financial Fixed Assets......................................... 404.5 363.5 337.4
-------- -------- --------
Fixed Assets................................................... 1,706.6 1,597.5 1,625.1
Working Capital................................................ 136.4 191.8 152.2
-------- -------- --------
Total Assets less Current Liabilities.......................... 1,843.0 1,789.3 1,777.3
Long-Term Liabilities
Long Term Debts............................................. 588.7 523.4 679.7
Provisions.................................................. 243.9 250.6 254.2
-------- -------- --------
832.6 774.0 933.9
Shareholders' Equity
Capital Paid-Up and Called.................................. 152.2 147.2 130.1
Reserves.................................................... 858.2 868.1 713.3
-------- -------- --------
1,010.4 1,015.3 843.4
-------- -------- --------
Shareholders' Equity and Long-Term Liabilities................. 1,843.0 1,789.3 1,777.3
</TABLE>
- ---------------
* NOTE: These figures were obtained from the Parent 1995 Annual Report.
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<PAGE> 27
9. SOURCE AND AMOUNT OF FUNDS
Buyer estimates that the total amount of funds required to purchase all
outstanding Shares (other than Shares currently held by Buyer and its
affiliates) pursuant to the Offer and to pay related fees and expenses is
approximately $306 million. Buyer plans to obtain such funds either directly or
indirectly from Parent through a capital contribution or loan (or a combination
thereof) which will be made at or prior to the time Shares tendered pursuant to
the Offer are accepted for payment. Parent plans to obtain funds for such
capital contribution or loan from (i) Parent's and its affiliate's available
general corporate funds, and (ii) borrowings by Parent under several existing
unsecured lines of credit.
Parent has nine established committed credit facilities with six different
banks, with an aggregate maximum credit amount available of approximately $433
million (the "Lines of Credit"). The stated terms of the Lines of Credit range
from three (3) to ten (10) years. As of June 5, 1996, Parent and its affiliates
had approximately $47 million in cash available to contribute or loan to Buyer
and approximately $20 million was outstanding under the Lines of Credit, with a
weighted average interest rate of 3%. Available cash plus amounts available for
draw under the Lines of Credit aggregate approximately $460 million.
Borrowings can be made at any time or from time to time under each of the
Lines of Credit for general corporate purposes, including acquisitions, and are
unsecured. The precise terms for each borrowing, including interest rate, are
determined at the time of the borrowings. Generally, the interest rates provided
by these Lines of Credits range from the applicable LIBOR or BIBOR plus 0.20% to
0.325%. The agreements documenting the Lines of Credit also require Parent to
pay commitment fees, ranging from 0.10% to 0.175% per annum of the daily undrawn
portion of the Lines of Credit.
The Lines of Credit contain customary conditions to borrowing,
representations and warranties, covenants and events of defaults. These include,
among other things, covenants restricting the creation of any mortgage on
Parent's real estate or other immovable property rights in The Netherlands
without the bank's consent, and requirements that the Parent maintain specified
consolidated financial ratios. As of June 4, 1996, Parent was in compliance with
the covenants contained in the Lines of Credit. Parent has also agreed, in some
instances, to pay the reasonable out-of-pocket expenses of the bank and to
indemnify the bank for reasonable costs incurred in preserving or enforcing its
rights under the Lines of Credit.
It is anticipated that borrowings incurred by Parent to make capital
contributions or loans (or a combination thereof) to Buyer will be replaced
partly by other long-term financing, sales of equity, or by other financing
options. Parent has not made any definitive arrangements for such refinancing.
Lines of Credit with an aggregate maximum credit amount available of $173
million require repayment of borrowings thereunder from proceeds of any
refinancing resulting from sales of equity in Parent or other long-term
financing.
The foregoing description is qualified by reference to the Lines of Credit,
copies of which (or the English translation of which) have been filed with the
Commission as exhibits to the Schedule 14D-1 and are incorporated herein by
reference. All U.S. dollar amounts provided above assume an exchange ratio of
one U.S. Dollar to 1.73 Dutch Guilders.
10. CONTACTS AND TRANSACTIONS AMONG PARENT, BUYER AND COMPANY
PARENT'S 1986 INVESTMENT IN COMPANY AND THE STANDSTILL AGREEMENT
On September 19, 1986, Pakhoed Investeringen B.V., a wholly owned
subsidiary of Parent entered into an Agreement for Exchange of Capital Stock
(the "Exchange Agreement") with Company pursuant to which, among other things,
Parent transferred to Company all of the issued and outstanding shares of
capital stock of DSW, Inc., a Washington corporation which had just acquired the
chemical distribution business of McKesson Chemical Company, and Company issued
to Pakhoed Investeringen B.V. 6,106,000 Shares (giving effect to a subsequent 2
for 1 stock split), representing approximately 35% of the total outstanding
Shares as of that date. In connection with the transactions effected pursuant to
the Exchange Agreement, the Company, Parent and Pakhoed Investeringen B.V.
entered into a standstill agreement of even date (the "Standstill Agreement").
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<PAGE> 28
The Standstill Agreement provides that Parent will not acquire beneficial
ownership of any "Voting Securities" of Company (as defined in the Standstill
Agreement) if such acquisition would result in Parent owning more than 35% of
the Common Stock Equivalents of Company (as defined in the Standstill
Agreement). Parent may acquire additional Voting Securities above the 35% limit
by making a tender offer for shares of Voting Securities in response to a
third-party tender offer for such securities, in which event the percentage
limitation will increase to 45%, and Parent may retain shares over 45% to the
extent Company elects not to repurchase such shares pursuant to its right to do
so under the Standstill Agreement. Parent may also acquire shares in excess of
the percentage limitation either by receiving approval of five-eighths ( 5/8) of
the directors of Company who are not affiliated with Parent (the "Unaffiliated
Directors"), or by a tender offer (without approval by the Unaffiliated
Directors) which is: (i) made to all shareholders of Company, (ii) payable in
cash, and (iii) accepted by shareholders of Company owning two-thirds ( 2/3) of
the outstanding Shares excluding Shares held by Parent and Shares not tendered
by certain core shareholders of Company. The Reorganization Agreement and the
transactions contemplated thereby were approved by the above described
five-eighths ( 5/8) of the Unaffiliated Directors, as permitted by the
Standstill Agreement.
Subject to the foregoing restrictions, Parent may acquire Shares by open
market purchase, partial tender offer, or private transaction. In response to an
increase in the number of outstanding Shares, Parent may purchase unissued or
treasury Shares under certain circumstances.
The Standstill Agreement also provides that Parent will not (without prior
written approval of the Board, including the concurrence of a majority of the
Unaffiliated Directors): (i) deposit any Voting Securities into a voting trust
or subject them to a voting agreement except a trust or agreement between Parent
and its affiliates or as required by Netherlands law, (ii) join any group for
the purpose of acquiring, holding, or disposing of Voting Securities within the
meaning of Section 13(d) of the Exchange Act, (iii) induce any other person to
initiate a tender offer for any securities of Company, or to effect any change
of control of Company, or take any action for the purposes of convening a
shareholders' meeting, or (iv) acquire more than 1% of any class of securities
of any entity that is publicly disclosed to be the beneficial owner of 5% or
more of the Voting Securities of Company.
The Standstill Agreement requires Company to provide Parent with
representation on the Board of Directors proportionate to its stock ownership.
Accordingly, during Company's last fiscal year, Messrs. Nicolaas J. Westdijk,
Roy E. Wansik and Dr. Sjoerd D. Eikelboom held three of twelve seats on the
Company Board. Directors designated by Parent are entitled to representation on
any committee of the Company Board at Parent's request. Parent is required to
vote its Shares so as to afford Company's other shareholders with proportionate
representation.
The Standstill Agreement will terminate on the Effective Date of the
Merger.
UNIVAR EUROPE
Parent and Company jointly organized Univar Europe N.V. ("Univar Europe")
in 1991. At the time Univar Europe was organized, Company owned 51% of the
shares of Univar Europe and Parent owned forty-nine percent (49%). In connection
with the organization of Univar Europe, Parent and Company entered into a
Shareholder Agreement whereby Company agreed that Parent would have the
unilateral right to require Company to acquire Parent's 49% interest in Univar
Europe. In September, 1994, Company purchased Parent's interest in Univar Europe
for $25.8 million. Funding for this aggregate purchase price was provided
through the sale of 2,000,000 Shares to Dow.
BACKGROUND OF THE OFFER
From the time of its initial investment in Company, Parent has considered
ways consistent with the Standstill Agreement to maximize its investment in
Company. Such considerations included the possibility of acquiring additional
Shares or, in the alternative, disposing of all or a significant portion of its
Shares.
During the last three years, there have been informal discussions between
James W. Bernard, a director of Company and Company's President and Chief
Executive officer until October, 1995, and Nicolaas J.
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<PAGE> 29
Westdijk, a director of Company and Chairman of the Board of Management of
Parent. Gary E. Pruitt, Company's Chief Financial Officer, and Sjoerd J.
Eikelboom, a Director of Company and a Senior Vice President of Parent,
participated in some such discussions. In particular, meetings were held on July
7 and August 9 and 10, 1995, to discuss means for cooperation between Company
and Parent. Although these meetings discussed possible business combinations and
other possible arrangements between the two companies, no proposals were made by
Parent as a result of these informal discussions.
During the week of October 9, 1995, Mr. Pruitt met with Dr. Eikelboom,
other management of Parent, and Mr. Thomas M. Foster, a financial advisor to
Parent, to discuss in greater detail the potential for cooperation between
Company and Parent and related matters. On October 30, 1995, Parent made a
request for certain financial, operational and other information concerning
Company in connection with the consideration by Parent of a possible transaction
involving Parent and/or one or more of its affiliates and Company. On December
11, 1995, Mr. Westdijk contacted James H. Wiborg, the Chairman of the Board of
Company, indicating interest in initiating discussions concerning an acquisition
of Company. In connection with such discussions, Parent requested a meeting to
discuss an outline of possible environmental due diligence and the price which
Parent would pay for the Shares.
By letter dated January 11, 1996, from Mr. Pruitt to Dr. Eikelboom, Company
outlined its proposal concerning a procedure to move discussions of a possible
negotiated transaction forward. That letter addressed a proposed amendment to
the Standstill Agreement, requested that Parent indicate a conditional per share
range of values, and suggested a due diligence approach. By letter dated January
23, 1996, Parent provided its response to the outline contained in the January
11 letter, indicating an approach to valuation but without providing any
specific value. By letter dated February 2, 1996, from Mr. Pruitt to Mr.
Eikelboom, Company indicated that it was not prepared to initiate discussions
with Parent concerning a possible transaction at that time.
In late February, 1996, Mr. Westdijk met with Mr. Wiborg and Paul H. Hough,
a director and the Chief Executive Officer of Company, requesting that
reconsideration be given to initiating discussions. Mr. Westdijk, on behalf of
Parent, suggested to Mr. Wiborg and Mr. Hough that a price range could be
discussed based on expected earnings as well as on a current and historical
perspective.
By unanimous consent of the Board of Directors dated April 1, 1996, a
special committee relating to the transaction was created (the "Special
Committee") comprised of Messrs. James H. Wiborg, Andrew V. Smith, Richard E.
Engebrecht and N. Stewart Rogers, none of whom are executive officers of
Company, for the express purpose of negotiating a definitive acquisition
agreement with Parent. Company also prepared a protocol for use in the
negotiations (the "Protocol"). Under the Protocol, terms for price negotiation
were described, and standstill provisions were included in the related
confidentiality agreement.
On March 15, 1996, Mr. Wiborg contacted Mr. Westdijk and a meeting was set
for April 10, 1996, in Seattle, Washington at which the Protocol would be
presented to Parent. Meetings were held from April 10-13, 1996, and Parent was
represented at all of the April meetings by Mr. Westdijk and Dr. Eikelboom. All
of the members of Company's Special Committee, Mr. Hough and Mr. Pruitt were
present at the initial April 10 meeting. Thereafter, Messrs. Wiborg and Pruitt
represented Company.
At the April 10 meeting, Parent received the Protocol and was informed that
the Protocol was the exclusive basis on which Company would continue discussions
of a possible acquisition. After a review of the terms and conditions of the
Protocol, and negotiations on April 11 and 12, 1996, relating to certain
provisions within the Protocol, the parties agreed to a revised Protocol, and on
April 12, 1996, the Protocol was executed in connection with a confidentiality
agreement (the "Confidentiality Agreement"). A copy of the Confidentiality
Agreement, as executed, which contains the Protocol as Exhibit B, is attached as
an exhibit to the Schedule 14D-1, and is incorporated herein by reference in its
entirety.
The Confidentiality Agreement provides that Parent may not, without the
prior written consent of Company, disclose to any person other than Parent and
its representatives, the fact that Company and Parent were considering a
transaction. The Confidentiality Agreement further provides that Parent is to
keep confidential, subject to being legally compelled to disclose, certain
documents provided to Parent by Company in connection with the proposed
transaction (the "Evaluation Documents"). In the event that Parent is legally
29
<PAGE> 30
compelled to disclose any of the Evaluation Documents, it is required to notify
Company so that Company can take such measures to protect the confidentiality of
the Evaluation Documents.
In connection with the Protocol, the Confidentiality Agreement provides
that Parent, until October 30, 1996 (which was extended to April 30, 1998, as
discussed below), except with the written approval of Company, agrees not to:
(i) acquire any of the stock or other securities of Company other than as
permitted by the Standstill Agreement, but specifically excluding the right to
make a tender offer pursuant to Section 2.10 of the Standstill Agreement, (ii)
submit to Company or any other person any proposal for a transaction between
Parent and Company or involving any of its securities holders other than in
accordance with the Protocol, (iii) solicit proxies or shareholder consents with
respect to the securities of Company or become a "participant" in any
"solicitation" or a member of a "group" (as such terms are used in Regulation
14A and Section 13(d)(3) of the Exchange Act) in opposition to the
recommendation of the majority of the Unaffiliated Directors, or (iv) otherwise
assist, advise, encourage, or act alone or in concert with any other person in
acquiring or attempting to acquire, directly or indirectly, control of Company
or its assets. Finally, the Confidentiality Agreement provides that if certain
conditions set forth in the Protocol are satisfied, the standstill provisions of
the Confidentiality Agreement automatically extend to April 30, 1998. These
conditions were satisfied on April 26, 1996.
On April 13, Parent initially indicated a willingness to offer $17.00 per
Share for all of the Shares. This offer was based on Parent's evaluation of the
value of Company based on Parent's analysis of, among other factors, performance
projections and discounted cash flows of Company. Company responded with a
counter-offer of $23.00 per Share. Company's price was based on recovery timing,
projected earnings, earnings multiples, and market reactions to earnings
improvements.
The negotiations continued and each party made several proposals and
counter-proposals. Parent had increased the price it was willing to offer to
$19.50 per Share and Company had countered with $20.50. This was determined to
be the agreed price range. The parties determined to proceed on the basis that,
if they could reach agreement on the other terms and provisions of a definitive
acquisition agreement, the final price, subject to the approval of the Company's
Board of Directors, would be between $19.50 and $20.50 per Share with a
deduction equal to fifty percent of the after tax cost to Company of the
exercises of all previously granted employee stock options and full payment of
any amounts to be paid under previously authorized change of control agreements.
See Section 10 -- "The Change of Control Agreements" below.
On April 20 and 21, 1996, counsel for Company met with counsel for Parent
to negotiate the terms of a definitive acquisition agreement, after previously
exchanging drafts of an agreement.
During the period from April 15 -- 26, 1996, representatives of Company and
Parent analyzed the estimated after tax cost to Company of the option exercises
and change of control payments described above. On April 24, 1996, the
Supervisory Board of Parent authorized Parent's management to continue to pursue
the possible transaction, subject to agreement on price, due diligence and final
review and approval by the Supervisory Board. On April 26, 1996, Mr. Westdijk
met with Company's Special Committee and agreed upon a conditional tender offer
price of $19.45 per Share, based on a $20 per Share price, less $0.55
representing the price adjustment of fifty percent of the after tax cost of the
option exercises and change of control payments.
Beginning April 29, 1996, and ending May 24, 1996, subject to the terms of
the Confidentiality Agreement, and of an Environmental Due Diligence Agreement
dated April 22, 1996, Parent conducted a due diligence review focusing primarily
on environmental liabilities and litigation related to the business, properties
and assets of Company. A copy of the Environmental Due Diligence Agreement, as
executed, is attached as an Exhibit to the Schedule 14D-1 and is incorporated
herein by reference. Parent representatives met with Company representatives on
April 29-30 and May 6-8 and 14, 1996, as part of the environmental due diligence
procedure. Over this period and continuing through May 31, 1996, representatives
of and counsel for Company and Parent continued to negotiate terms of a
definitive acquisition agreement.
In April, 1995, Company retained Schroder Wertheim as its exclusive
financial advisor in connection with a review of various options to maximize the
value of Company to its shareholders. In April, 1996,
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<PAGE> 31
Company advised Schroder Wertheim about the on-going discussions with Parent
concerning a possible acquisition of Company by Parent. Company provided
Schroder Wertheim with certain information concerning Company and the proposed
transaction so that Schroder Wertheim could perform a preliminary analysis of
the proposed transaction. Schroder Wertheim was not authorized to and did not
solicit any indications of interest from any other third party with respect to
all or a part of Company's business, and was not requested to and did not make
any recommendation as to the form or amount of consideration to be offered to
shareholders of Company in the proposed transaction.
On May 2, 1996, an afternoon continuation of a Regular Meeting of the Board
of Directors of Company was held without the participation by the directors
nominated by Parent to discuss the proposed transaction. Representatives of
Schroder Wertheim were present at the meeting and offered their preliminary
analysis of the proposed transaction. Legal counsel reviewed issues relating to
the Protocol and the proposed Tender Offer and Proposed Merger.
On May 10, 1996, Company and Schroder Wertheim entered into an engagement
letter pursuant to which the Company retained Schroder Wertheim as its financial
advisor in connection with the possible sale of the Company and to render an
opinion to the Board of Directors, as investment bankers, as to the fairness,
from a financial point of view, of the proposed transaction with Parent.
On May 30, 1996, Parent's Supervisory Board and Board of Management
approved the Reorganization Agreement and Parent notified Company that it was
willing to execute the Reorganization Agreement and proceed with the Offer.
On May 31, 1996, the Board of Directors of Company held a special meeting
to consider the acquisition proposal submitted to Company. All of Company's
directors participated in the meeting. After initial discussion the directors
nominated by Parent indicated that they would vote in favor of the Tender Offer,
Proposed Merger and proposed Reorganization Agreement and then excused
themselves from further participation. During a continuation of the meeting, the
Board reviewed with certain of its executive officers, legal counsel, and
financial advisors the acquisition proposal submitted to Company. The
presentations included a review of the financial analysis and proposed fairness
opinion of Schroder Wertheim. Based on such discussions and presentations, the
Board unanimously approved the Reorganization Agreement and the transactions
contemplated thereby, including the Offer and the Proposed Merger.
On May 31, 1996, Parent, Buyer, and Company signed the Reorganization
Agreement, certain Directors and Officers of Company signed the Officers and
Directors Agreements, and Dow signed the Shareholder Agreement.
THE REORGANIZATION AGREEMENT
The following is a summary of the Reorganization Agreement, a copy of which
is filed as an Exhibit to the Tender Offer Statement on Schedule 14D-1 (the
"Schedule 14D-1") filed by Buyer and Parent with the Commission in connection
with the Offer. Such summary is qualified in its entirety by reference to the
Reorganization Agreement.
The Offer
The obligation of Buyer to accept for payment and pay for Shares tendered
pursuant to the Offer is subject only to satisfaction of the conditions
described in this Offer to Purchase and Annex I of the Reorganization Agreement.
Provided that nothing shall have occurred that would result in a failure to
satisfy any of the conditions set forth in this Offer to Purchase, Buyer,
pursuant to the Reorganization Agreement, may not, without the prior written
consent of Company: (a) decrease the Offer Price; (b) decrease the Minimum
Tender Condition; (c) impose additional conditions to the Offer; (d) change the
Expiration Date so that the Offer ends less than 30 "business days" from the
date on which the Offer is first publicly announced or extend the expiration
date beyond July 31, 1996, except that Buyer may extend the Offer to a date not
later than August 31, 1996 if any Governmental Approvals shall not have been
obtained by July 31, 1996 or by July 26, 1996 less than 80% of the outstanding
Shares have been tendered for purchase and Buyer
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<PAGE> 32
reasonably believes that 80% or more of the Shares will be tendered if the
Expiration Date is extended to not later than August 31, 1996; (e) waive or
modify the Minimum Tender Condition; or (f) change the conditions to the Offer
in any material respect, except that Buyer may waive any of the other conditions
to the Offer. In the event the Tender Offer is extended beyond July 31, 1996 the
Offer Price shall be increased by an amount equal to the product of the Offer
Price multiplied by the prime interest rate as announced by Bank of America NW,
N.A. (doing business as Seafirst Bank) in Seattle, Washington as in effect on
August 1, 1996, multiplied by the quotient of the number of days that the Tender
Offer is extended after July 31, 1996, divided by 365. The foregoing limitations
shall not be applicable in the event the Reorganization Agreement is terminated
in accordance with the termination provisions of the Reorganization Agreement,
in which event Buyer may modify its Offer subject only to the limitations of the
Standstill Agreement.
The Proposed Merger
At the Effective Time (defined in the Reorganization Agreement as upon the
filing with the Washington Secretary of State of a duly executed Articles of
Merger and accompanying Plan of Merger (collectively, the "Merger Agreement") as
prescribed by the WBCA (or at such time thereafter as is provided in the Merger
Agreement), Buyer will be merged into Company in accordance with the applicable
provisions of the WBCA. At the Effective Time, (a) each Share then held in the
treasury of Company will be canceled; (b) each then-remaining outstanding Share
(other than Dissenting Shares, as hereinafter defined, and Shares held by Buyer
and its affiliates) will be converted into the right to receive the Merger
Consideration in cash, without interest; (c) all then-outstanding Common Shares
of Buyer will be converted into one fully paid and nonassessable Common Share of
the Surviving Corporation; and (d) all outstanding Shares held by shareholders
who shall have properly exercised dissenters' rights, if any, with respect
thereto under the applicable provisions of the WBCA ("Dissenting Shares") will
not be converted into the right to receive the Merger Consideration pursuant to
the Proposed Merger, but will be entitled to receive payment of the fair value
of such Shares in accordance with the provisions of the WBCA. From and after the
Effective Time, all outstanding Shares (other than Shares held by Parent, Buyer
or their affiliates) shall no longer be outstanding and shall automatically be
canceled and retired and shall cease to exist, and the holders of certificates
formerly representing Shares shall cease to have any rights with respect thereto
other than to receive the Merger Consideration or dissenter's rights they have
perfected under the WBCA. Any options which remain unexercised as of the
Effective Time shall be entitled without any further action solely to the right
to receive cash payments provided for in the Reorganization Agreement.
Conditions of the Proposed Merger
The Reorganization Agreement provides that, the obligations of Company,
Parent and Buyer to consummate the Proposed Merger are, among other things,
subject to the satisfaction of the following conditions: (a) no provision of any
applicable law or regulation and no judgment, injunction, order or decree shall
prohibit or restrain the consummation of the Proposed Merger; (b) all
Governmental Approvals shall have been obtained, with such exceptions as would
not, individually or in the aggregate, have a material adverse effect on
Parent's or Company's business; and (c) Buyer shall have purchased Shares
pursuant to the Offer, sufficient to satisfy the Minimum Tender Condition.
No Solicitations
The Reorganization Agreement provides that, except as contemplated by the
Reorganization Agreement and subject to the continuing fiduciary duties of the
Board of Directors of Company, prior to the Effective Time, Company and Company
Subsidiaries: (a) shall not effect or agree to effect any Business Combination
(which is defined as any tender or exchange offer, proposal for a merger,
consolidation, acquisition of assets or other takeover proposal involving any
party to the Reorganization Agreement (except as explicitly contemplated in the
Reorganization Agreement) or any offer or proposal to acquire in any manner a
ten percent (10%) or greater interest in, or a substantial portion of
outstanding capital shares of any party to the Reorganization Agreement other
than transactions contemplated thereunder), or commence any proceedings for
winding up and dissolution affecting either of Company or Company Subsidiaries;
(b) shall not, nor shall
32
<PAGE> 33
any officer, director or affiliate of Company, nor any investment banker,
attorney, accountant or other agent, advisor or representative retained by
Company solicit or encourage, directly or indirectly, any inquiries, discussions
or proposals for, nor propose any discussions or negotiations looking toward, or
enter into any agreement or understanding providing for, any Business
Combination, provided that in response to a bona fide unsolicited offer for a
Business Combination or indication of interest from any person, corporation,
firm, association, entity or group to engage in a Business Combination, which
Company's Board of Directors reasonably determines, upon advice of counsel, that
it must respond to in light of its fiduciary duties to the shareholders of
Company, Company shall within two (2) business days of receipt of such
indication or offer inform Parent of such interest or the terms of such offer
and may: (i) disclose the same nonpublic information as provided to Parent to
such corporation, firm, association, person or other entity or group concerning
the business and properties of Company and/or afford any such party the same
access as provided to Parent to the properties, books or records of Company and
Company Subsidiaries or otherwise assist or encourage any such party in
connection with the foregoing, all on no more favorable terms and conditions as
set forth in the Confidentiality Agreement, provided that if requested, Company
Board of Directors may provide nonpublic information not provided to Parent
and/or agree to more favorable terms and conditions so long as it promptly
provides the same information to Parent and/or modifies the Confidentiality
Agreement so as to make available the same terms and conditions for Parent; or
(ii) if Company's Board of Directors determines that their continuing fiduciary
duties would require their approval of any such unsolicited bona fide offer for
a Business Combination with another entity because the terms of such offer are
more favorable to Company's shareholders than the terms set forth in the
Reorganization Agreement, then Company may accept such offer, provided that
prior to taking any such actions Company shall provide Parent with not less than
two (2) business days to modify the terms of this Offer and all requisite tender
offer documents and to propose to Company any corresponding modifications to the
Reorganization Agreement.
Termination of the Reorganization Agreement and Expenses
The Reorganization Agreement may be terminated:
(a) By the mutual consent of Parent, Buyer and Company at any time prior to
the purchase of Shares pursuant to the Offer;
(b) By either Company or Parent, if: (i) as a result of the occurrence of
any of the conditions set forth in Annex I of the Reorganization Agreement (a)
Buyer failed to commence the Tender Offer within ten (10) days following the
date the Reorganization Agreement is signed; or (b) the Tender Offer terminated
or expired in accordance with its terms without Buyer having purchased Shares
satisfying the Minimum Tender Condition pursuant to the Offer; or (ii) the
Tender Offer has not been consummated by August 31, 1996, or such other mutually
agreed to date;
(c) By Parent, if any person, entity or "group" (as defined in Section
13(d)(3) of the Exchange Act) other than Parent and Buyer or Dow acquires
beneficial ownership of ten percent (10%) (except in bona fide arbitrage
transactions) or more of the outstanding Shares;
(d) By Parent, Buyer or Company, if prior to the Effective Time, except for
transactions contemplated by the Reorganization Agreement, Company and Company
Subsidiaries have effected or agreed to effect any Business Combination, and the
two (2) business days provided for in the Reorganization Agreement has expired
without a modification to the Reorganization Agreement which is approved by
Company's Board of Directors; or
(e) By Parent, if prior to the Effective Time, the Board of Directors of
Company shall have withdrawn or materially modified its approval or
recommendation of the Tender Offer, the Reorganization Agreement or the Proposed
Merger.
If the Reorganization Agreement is terminated because (i) Company and
Company Subsidiaries have effected or agreed to effect any Business Combination,
and the two (2) business days provided for in the Reorganization Agreement have
expired without a modification to the Reorganization Agreement which is approved
by Company's Board of Directors, or (ii) if the foregoing events occur within 12
months following
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termination of the Reorganization Agreement, Company shall pay to Parent and
Buyer, on demand, the aggregate sum of $4,000,000.
Operation of Company's Business Until the Effective Time
The Reorganization Agreement provides that, from the date thereof until the
Effective Time, each of Company and Company Subsidiaries shall use reasonable
efforts to conduct its business and to maintain satisfactory relationships with
licensors, suppliers, distributors and customers, all in accordance with its
ordinary and usual course of business. Prior to the Effective Time, neither
Company nor Company Subsidiaries shall without the prior written consent of
Parent and Buyer or except as specifically contemplated by the Reorganization
Agreement: (a) amend its Articles of Incorporation or Bylaws; (b) authorize for
issuance, issue, deliver or sell any additional Shares, or securities
convertible into Shares, or issue or grant any rights, options or other
commitments for the issuance of Shares or such convertible securities (other
than the issuance of Preferred Shares and the conversion thereof or payment in
lieu thereof pursuant to the Stock Purchase Agreement, or of Shares pursuant to
the exercise of outstanding options, and the grant of any new options in
accordance with budgets and plans previously approved by Company's Compensation
Committee); (c) split, combine or reclassify any of its capital shares or
declare, set aside or pay any dividend (whether in cash, stock or property) in
respect to its Shares or redeem or otherwise acquire any of its Shares other
than the repurchase, at cost, of Shares issued to employees pursuant to the
terms of employee restricted stock or share purchase agreements; (d) dispose of
or acquire any material properties or assets except in the ordinary course of
business; (e) engage in any activities or transactions that are outside the
ordinary course of Company's business other than certain permitted activities
under the Reorganization Agreement; (f) materially amend any provision of the
Stock Plans, Pension Plans (as defined in the Reorganization Agreement) or
Employee Welfare Benefit Plans (as defined in the Reorganization Agreement); (g)
incur any indebtedness for borrowed money, other than amounts borrowed pursuant
to and in accordance with the terms and conditions of its existing lines of
credit or amounts pledged or potentially owed in connection with letters of
credit which may be obtained naming as beneficiary the trustees of the trusts
for supplemental pension benefits plans as required under the terms of such
trusts and plans; (h) except in accordance with budgets previously approved by
Company's Compensation Committee and in connection with the acceleration of
stock options and payments under the Change of Control Agreements (described
below), make or approve any increase in the compensation payable or to become
payable to any of their directors, officers, employees or agents with annual
salaries in excess of $75,000 or the foreign equivalent at the date hereof
(including, but not limited to, compensation through any profit sharing,
pension, retirement, severance, incentive or other employee benefit program or
arrangement), (i) make any bonus payment or any agreement or commitment to make
a bonus payment; or (j) grant or issue any stock option, warrant or other right
to acquire capital shares or enter into any employment agreement (other than any
such employment agreement that may arise by operation of law upon the hiring of
any new employee) or consulting agreement with any such directors, officers,
employees, or agents.
In addition, Company has agreed that it shall not: (a) declare, set aside
or pay any dividend or other distribution in respect of the Shares (including,
without limitation, any stock dividend or distribution), except in the ordinary
course of business and not in amounts which materially exceed the amounts
previously paid by Company; and (b) change its methods of accounting in effect
at February 29, 1996, except as required by changes in GAAP as concurred in by
its independent auditors.
Employment Agreements
Company has agreed to permit and shall give Parent and Buyer the
opportunity to negotiate employment agreements with key Company executives,
provided that any such agreement shall be subject to the consummation of the
Offer. Parent has indicated that it intends to offer employment agreements to
certain executives of Company, but no terms or conditions have been determined.
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Company Board Representation
Contemporaneously with the execution of the Reorganization Agreement,
Company delivered to Parent and Buyer resignations of all directors of Company
who were not nominated by Parent contingent on the consummation of the Offer.
Pursuant to the terms of the Reorganization Agreement, (a) upon the consummation
of the Offer, Company shall accept the resignations of a sufficient number of
such directors as determined by Parent and Buyer to result in Parent having
representation on the Board of Directors of Company proportionate to the
percentage shareholding of Parent and its affiliated companies, provided that
the Board of Directors (excluding directors nominated by Parent) shall have the
right but not the obligation to designate up to four (4) current members of the
Special Committee of the Board who shall remain after the consummation of the
Tender Offer until the Effective Date, and (b) on the Effective Date, Company
shall accept the resignations of any such directors determined by Parent and
Buyer who have not previously resigned.
Stock Options
Under the Reorganization Agreement holders of employee and nonemployee
director stock options granted and restricted stock awards issued under the
Stock Plans have been given the right to surrender their options and restricted
stock awards for cash payments equal to the difference between the Offer Price
per Share and the exercise price, if any, of the option or restricted stock
award times the number of Shares subject to each stock option grant or
restricted stock award. As of May 31, 1996 there were outstanding options for
1,741,072 Shares at a weighted average price of $11.1485 per Share and an
additional 50,000 Shares were subject to restricted stock awards. Each of the
options and awards were issued pursuant to plans which provided for the
acceleration of all unvested options and awards upon the event of a "Change of
Control" which in each plan is defined to include consummation of the Tender
Offer. The Reorganization Agreement also provides that the Surviving Corporation
will indemnify holders against excise and other related taxes in the event that
any portion of the amounts received are treated as "parachute payments" for
federal income tax purposes pursuant to mutually acceptable agreements
containing the terms of such indemnification.
Indemnification and Insurance
In the Reorganization Agreement, Parent has agreed that, with respect to
events occurring prior to the Effective Date, all rights to indemnification
existing in favor of the present or former directors, officers, employees,
fiduciaries and agents of Company, any of Company Subsidiaries, any Pension
Plans and Employee Welfare Benefit Plans (as defined in the Reorganization
Agreement) sponsored by Company or Company Subsidiaries, as provided in their
respective articles of incorporation, bylaws or pursuant to any agreements
previously disclosed by Company to Parent in writing with specific reference to
the Reorganization Agreement, as in effect as of the date of the Reorganization
Agreement, shall survive the Proposed Merger and shall continue in full force
and effect for a period of not less than the statutes of limitations, if any,
applicable to such matters.
Parent has further agreed that it will cause the Surviving Corporation to
periodically advance expenses as incurred with respect to the indemnification
obligations to the fullest extent permitted under the provisions of Company's
Articles of Incorporation or the articles of incorporation of Company
Subsidiaries. Parent shall cause the Surviving Corporation to periodically
advance expenses as incurred with respect to the foregoing to the fullest extent
permitted under the provisions of the Company's Articles of Incorporation or the
articles of incorporation of Company Subsidiaries. As of the Effective Time,
Company shall, or in the event Company is unable to do so, Parent shall cause
the Surviving Corporation to convert the current policies for directors' and
officers' liability insurance and ERISA or employee plan fiduciary liability
insurance maintained by Company and Company Subsidiaries to a policy or policies
for a term of six (6) years after the Effective Date which shall cover events
which occur prior to the Effective Date, provided that the incremental cost of
such policy or policies, after applying all related prepaid insurance premiums,
shall not exceed $200,000. To the extent that the premium for such policy or
policies exceeds $200,000, Company or the Surviving Corporation shall obtain
reasonably available policies for not less than such amount. Buyer and the
Surviving Corporation shall pay all
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expenses, including attorneys' fees, that may be incurred by any present or
former officer, director, employee, fiduciary or agent of Company or Company
Subsidiaries in enforcing the indemnity and other obligations provided for in
the Reorganization Agreement regarding indemnification and insurance.
Representations and Warranties
The Reorganization Agreement contains various representations and
warranties of Parent, Buyer and Company. Among other things, Company has made
representation and warranties: (a) that it and Company Subsidiaries are each
duly organized and validly existing corporations in good standing under the laws
of the state of their respective incorporation; (b) that subject to approval of
the Reorganization Agreement, it has the requisite corporate power to enter into
and carry out the terms of the Reorganization Agreement; (c) that it and Company
Subsidiaries are each qualified to do business as a foreign corporation in the
jurisdictions where failure to do so would have a material adverse affect on the
business; (d) that the execution and delivery of the Reorganization Agreement
has been duly authorized by Company; (e) that the Reorganization Agreement
constitutes the legal and binding obligation of Company; (f) that the execution
and delivery by Company of the Reorganization Agreement does not violate any
provision of Company's Articles of Incorporation or Bylaws, or any Governmental
Approvals obtained by Company, require the consent of any third party, or
violate any material contract, agreement or judgment to which either Company or
any of Company Subsidiaries is bound, including, but not limited to, the
Standstill Agreement; (g) regarding its capitalization; (h) regarding the scope
of its employment contracts and benefits and the compliance of such contracts
and benefits with applicable laws; (i) that neither Company nor any of Company
Subsidiaries is a party to, nor threatened with, any legal action or other
proceeding or investigation before any court, any arbitrator of any kind or any
government agency, and to the best of Company's knowledge, neither Company nor
any of Company Subsidiaries is subject to any potential action, proceeding,
investigation or claim, which could impede the transactions contemplated by the
Reorganization Agreement or exceed $5,000,000; (j) that there is no labor
dispute, strike, slow-down or stoppage pending or, to the best of the knowledge
of Company, threatened against Company or any of Company Subsidiaries; (k) that
Company has complied with relevant rules and regulations promulgated pursuant to
ERISA; and (l) that Company has not retained any brokers or consultants entitled
to be paid commissions except for Schroder Wertheim.
Parent and Buyer have delivered in the Reorganization Agreement various
customary representations and warranties including representations and
warranties regarding corporate status, power, authorization, and brokers. In
addition, Parent has represented and warranted that it has, or will have,
sufficient funds available to enable Buyer to purchase all of the Shares
outstanding and to pay all related contractual obligations, fees and expenses
pursuant to, or becoming payable by the Surviving Corporation as a result of,
the Reorganization Agreement, the Tender Offer, and the Merger Agreement and
shall make such funds available to Buyer or the Surviving Corporation.
THE STANDSTILL AGREEMENT. Pursuant to the Reorganization Agreement,
Company has represented and warranted to Parent and Buyer that: (a) all of the
actions necessary or required pursuant to the terms of the Standstill Agreement
to permit the transactions contemplated by the Reorganization Agreement and the
Offer have been taken, including, but not limited to, advance approval of the
Reorganization Agreement, the Offer, the Directors and Officers Agreements, and
the Shareholder Agreement from five-eighths of the Unaffiliated Directors (as
defined in the Standstill Agreement) as required by Section 2.8 of the
Standstill Agreement, and (b) that the execution and delivery of the
Reorganization Agreement and the consummation of the transactions contemplated
thereby, including the Offer, do not violate or breach any of the terms of the
Standstill Agreement. Furthermore, the Confidentiality Agreement and the
Protocol modify the Standstill Agreement such that, provided Parent has entered
into the Reorganization Agreement, then the minimum number of Shares tendered
and accepted in this Offer need only exceed a simple majority of the Shares as
of the closing of the Offer.
THE CHANGE OF CONTROL AGREEMENTS
The Board of Directors has unanimously approved change of control
agreements (the "Change of Control Agreements") between Company and certain of
the named executive officers of Company. At
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February 29, 1996, Company had Change of Control Agreements in place with each
of seven (7) executive officers (the "Executives"). Each Change of Control
Agreement provides that the Executive will receive compensation for 30 months if
his employment is terminated (voluntarily or involuntarily) for any reason other
than gross misconduct, death, permanent and total disability, or reaching age
65, provided such termination occurs within 24 months after certain defined
events which might lead to a change of control of Company. The compensation will
be paid at a rate equal to the Executive's then current salary and target
incentive. The compensation is subject to a minimum annual rate of not less than
the Executive's average compensation for the preceding three (3) calendar years,
and is subject to reduction if the aggregate present value of all payments would
exceed three (3) times the Executive's "annualized includible compensation", as
defined in Section 280G of the Code, for the Executive's most recent five (5)
taxable years. The Executive will also continue to have "employee" status for
the 30-month period and will be entitled to retain most employee benefits and
rights during this period.
Company may cease payments in the event the Executive breaches certain
non-competition or confidentiality covenants. Company also has the right to
terminate the Change of Control Agreements upon a one-year notice, except as to
rights already accrued as a result of an event which has triggered the change of
control provisions of the Change of Control Agreements. The Board of Directors
believes that the terms and conditions of the Change of Control Agreements are
in the best interest of Company because the Change of Control Agreements will
enable the Executives to continue to focus on activities providing for the
maximum long-term value to Company's shareholders, even when faced with the
possible change of control of Company.
On May 31, 1996, Parent agreed with the Executives to permit the Company to
enter into letter amendments to the Change of Control Agreements to clarify and
make provisions for payments to be made in the event the Tender Offer is
consummated (the "Letter Amendments"). The Letter Amendments: (i) clarify that
the consummation of the Tender Offer is a "change in control," (ii) provide for
payment of the 30 months of base compensation plus target bonuses upon
consummation of the Tender Offer rather than upon termination of the Executive,
such payment to be made in one lump sum in readily available funds within ten
(10) business days after Parent purchases shares satisfying the Minimum Tender
Condition, (iii) provide that if Executive continues as an employee of Company
after the Tender Offer, he shall be entitled to receive benefits comparable to
those provided other management personnel and (iv) provide for a "Gross-Up
Payment" to cover the effect of excise and other taxes on the payments made
pursuant to these agreements, the conversion of outstanding stock options and
other payments likely to be treated as "parachute payments" for federal income
tax purposes recognizing that payments in excess of the "three times annualized
compensation" may be paid to these individuals. The Executives have agreed that
payments pursuant to these revised agreements shall be in lieu of any other
severance or termination benefit or plan which they presently are entitled to in
the event of a termination within 30 months after the consummation of the Tender
Offer and by execution of the Letter Amendments will also grant a release to the
Surviving Corporation of any other right or cause of action relating to his
employment with Company prior to June 1, 1996. A copy of the form of Letter
Amendments to be executed with each Executive, along with a list of the
Executives and estimated amount to be paid is attached as an exhibit to the
Schedule 14D-1 and is incorporated herein by reference in its entirety.
The estimated aggregate amounts payable to seven executive officers in the
event the Tender Offer is consummated is approximately $5,600,000 in base
compensation, target bonuses and other benefits payable pursuant to the amended
Change of Control Agreements. In addition, these seven officers will also
receive an aggregate amount of approximately $6,600,000 as cash payments for
surrendering outstanding stock options and deferred cash incentives, the vesting
of which is to be accelerated pursuant to Company Stock Plans under provisions
applicable to other officers and employees of Company. The foregoing amounts do
not include the Gross-Up Payments which when determined will equal the related
excise and other taxes attributable to amounts deemed to be parachute payments.
11. DIVIDENDS AND DISTRIBUTIONS
Except as contemplated by the Reorganization Agreement (including, without
limitation, the making of the Offer) Company has agreed that neither it nor
Company Subsidiaries will, between the date of the execution and delivery of the
Reorganization Agreement and the Effective Time, directly or indirectly do, or
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propose or agree to do, any of the following without the prior written consent
of Buyer: split, combine or reclassify any Shares of its capital stock or
declare, redeem or otherwise acquire any of its capital stock. Further, Company
shall not declare, set aside or pay any dividend or other distribution in
respect of the Shares (including, without limitation, any stock dividend or
distribution), except in the ordinary course of business and not in amounts
which materially exceed the amounts previously paid by Company.
12. CERTAIN CONDITIONS OF THE OFFER
Notwithstanding any other provision of the Tender Offer, Buyer shall not be
required to accept for payment or, subject to any applicable rules and
regulations of the SEC, including Rule 14e-1(c) under the Exchange Act (relating
to Buyer's obligation to pay for or return tendered Shares after the termination
or withdrawal of the Tender Offer), to pay for any Shares, and may terminate the
Tender Offer, if (a) the Minimum Tender Condition has not been satisfied, (b)
Governmental Approvals have not been obtained or (c) at any time on or after May
31, 1996 and prior to the acceptance for payment of Shares, any of the following
conditions shall occur and be continuing:
(a) There shall be instituted or pending any action or proceeding by
any government or governmental authority or agency, domestic or foreign:
(i) challenging or seeking to make illegal, to delay materially or
otherwise directly or indirectly to restrain or prohibit the making of the
Tender Offer, the acceptance for payment of or payment for some of or all
the Shares by Buyer or the consummation by Buyer of the Proposed Merger,
(ii) seeking to restrain or prohibit Buyer's ownership or operation (or
that of its respective subsidiaries or affiliates) of all or any material
portion of the business or assets of Company and Company Subsidiaries,
taken as a whole, or of Parent and its subsidiaries, taken as a whole, or
to compel Buyer or any of its subsidiaries or affiliates to dispose of or
hold separate all or any material portion of the business or assets of
Company and Company Subsidiaries, taken as a whole, or of Parent and its
subsidiaries, taken as a whole, (iii) seeking to impose or confirm material
limitations on the ability of Parent or any of its subsidiaries or
affiliates to effectively exercise full rights of ownership of the Shares,
including, without limitation, the right to vote any Shares acquired or
owned by Parent or any of its subsidiaries or affiliates on all matters
properly presented to Company's shareholders, or (iv) seeking to require
divestiture by Parent or any of its subsidiaries or affiliates of any
Shares, or (v) that otherwise is likely to materially adversely affect
Company and Company Subsidiaries, taken as a whole, or Parent and its
subsidiaries, taken as a whole;
(b) There shall be any action taken, or any statute, rule, regulation,
injunction, order or decree proposed, enacted, enforced, promulgated,
issued or deemed applicable to Company or any of Company Subsidiaries or
the Tender Offer or the Proposed Merger, by any court, government or
governmental authority or agency, domestic or foreign other than the
application of the waiting period provisions of the HSR Act, Exon-Florio or
any foreign regulatory agency to the Tender Offer or the Proposed Merger,
that is likely, directly or indirectly, to result in any of the
consequences referred to in clauses (i) through (v) of paragraph (a) above;
(c) There shall have occurred (i) any general suspension of trading
in, or limitation on prices for, securities on the NYSE; which suspension
or limitation shall continue for at least three (3) consecutive trading
days, (ii) a declaration of a banking moratorium or any suspension of
payments in respect of banks in the United States, The Netherlands, Japan
or France, (iii) any limitation (whether or not mandatory) by any
government, domestic, foreign or supranational, or governmental entity on,
or other event that, in the sole judgment of Buyer, might affect, the
extension of credit by banks or other lending institutions, (iv) a
commencement of a war or armed hostilities or other national or
international calamity directly or indirectly involving the United States,
The Netherlands, Japan or France, (v) in the case of any of the foregoing
existing at the time of the commencement of the Offer, a material
acceleration or worsening thereof; or (vi) any significant change in the
United States, The Netherlands, Japan or France currency, exchange rates or
any suspension of, limitations on, the markets therefor (whether or not
mandatory);
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(d) Subject to the right to cure provided by Section 9.4 of the
Reorganization Agreement, Company shall have breached or failed to perform
in any material respect, any of its covenants or agreements under the
Reorganization Agreement, or any of the representations and warranties of
Company set forth in the Reorganization Agreement shall not be true in any
respect which is material to Company and Company Subsidiaries as a whole,
in each case when made or at any time prior to consummation of the Tender
Offer as if made at and as of such time; provided, however, that the
Company shall not be deemed to have breached its representation and
warranty contained in the Reorganization Agreement with respect to any
legal action or other proceeding or investigation which arises after May
31, 1996 which it is not required to disclose pursuant to filings made by
it pursuant to the Exchange Act without regard to any time periods covered
by, or due dates of, such filings;
(e) The Reorganization Agreement shall have been terminated in
accordance with its terms; or
(f) The Board of Directors of Company shall have withdrawn or
materially modified its approval or recommendation of the Tender Offer or
the Proposed Merger, which, in the reasonable judgment of Parent or Buyer
in any such case, and regardless of the circumstances giving rise to any
such condition, makes it inadvisable to proceed with such acceptance for
payment or payment for the Shares.
The foregoing conditions are for the sole benefit of Buyer and Parent and
may be asserted by Buyer or Parent regardless of the circumstances giving rise
to any such condition or may be waived by Buyer or Parent in whole or in part at
any time and from time to time in its sole discretion. The failure by Buyer or
Parent at any time to exercise any of the foregoing rights will not be deemed a
waiver of any such right, the waiver of any such right with respect to
particular facts and circumstances will not be deemed a waiver with respect to
any other facts and circumstances and each such right will be deemed an ongoing
right that may be asserted at any time and from time to time. Any determination
by Buyer concerning the events described in this Section 12 will be final and
binding upon all parties.
13. CERTAIN LEGAL MATTERS
Except as set forth in this Offer to Purchase, based on a review of
publicly available information regarding Company, the review of certain
information furnished by Company to Buyer and Parent and discussions among
representatives of Buyer and Parent and representatives of Company during
Buyer's and Parent's investigation of Company (see Section 10), Buyer and Parent
are not aware of any licenses or regulatory permits that would be material to
the business of Company, and Company Subsidiaries, taken as a whole, and that
might be adversely affected by Buyer's acquisition of Shares (and the indirect
acquisition of the stock of Company Subsidiaries) as contemplated herein, or any
filings, approvals or other actions by or with any domestic, foreign or
supranational governmental authority or administrative or regulatory agency that
would be required prior to the acquisition of Shares (or the indirect
acquisition of the stock of Company's Subsidiaries) by Buyer pursuant to the
Offer as contemplated herein. Should any such approval or other action be
required, there can be no assurance that any such additional approval or action,
if needed, would be obtained without substantial conditions or that adverse
consequences might not result to Company's business, or that certain parts of
Company's or Parent's business might not have to be disposed of or held separate
or other substantial conditions complied with in order to obtain such approval
or action or in the event that such approvals were not obtained or such actions
were not taken. Buyer's obligation to purchase and pay for Shares is subject to
certain conditions, including conditions with respect to legal matters discussed
in this Section 13.
STATE TAKEOVER LAWS. Company is incorporated under the laws of the State
of Washington. As a Washington corporation, Company is subject to the provisions
of the WBCA, including those described in "Special Factors -- Statutory
Requirements." A number of other states have adopted takeover laws and
regulations which purport, to varying degrees, to be applicable to attempts to
acquire securities of corporations which are incorporated in such states or
which have substantial assets, security holders, principal executive offices or
principal places of business therein. To the extent that certain provisions of
certain of these state takeover statutes purport to apply to the Offer, Buyer
believes that such laws conflict with federal law and constitute an
unconstitutional burden on interstate commerce. In 1982, the Supreme Court of
the United States, in Edgar v. Mite Corp., invalidated on constitutional grounds
the Illinois Business Takeovers Statute,
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which as a matter of state securities law, made takeovers of corporations
meeting certain requirements more difficult, and the reasoning in such decision
is likely to apply to certain other state takeover statutes. In 1987, however,
in CTS Corp. v. Dynamics Corp. of America, the Supreme Court of the United
States held that the State of Indiana could, as a matter of corporate law and,
in particular, those aspects of corporate law concerning corporate governance,
constitutionally disqualify a potential acquiror from voting on the affairs of a
target corporation without the prior approval of the remaining shareholders,
provided that such laws were applicable only under certain conditions.
Company, directly or through Company Subsidiaries, conducts business in a
number of states throughout the United States, some of which have enacted
takeover laws. Buyer does not know whether any of these laws will, by their
terms, apply to the Offer or the Proposed Merger and has not complied with any
such laws. Should any person seek to apply any state takeover law, Buyer will
take such action as then appears desirable, which may include challenging the
validity or applicability of any such statute in appropriate court proceedings.
In the event it is asserted that one or more state takeover laws is applicable
to the Offer or the Proposed Merger, and an appropriate court does not determine
that it is inapplicable or invalid as applied to the Offer, Buyer might be
required to file certain information with, or receive approvals from, the
relevant state authorities. In addition, if enjoined, Buyer might be unable to
accept for payment any Shares tendered pursuant to the Offer, or be delayed in
continuing or consummating the Offer and the Proposed Merger. In such case,
Buyer may not be obligated to accept for purchase, or pay for, any Shares
tendered. See Section 12, "Certain Conditions of the Offer."
ANTITRUST. Under the provisions of the HSR Act applicable to the Offer,
the acquisition of Shares under the Offer may be consummated following the
expiration of a fifteen (15)-calendar-day waiting period following the filing by
Parent of a Notification and Report Form with respect to the Offer, unless
Parent receives a request for additional information or documentary material
from the Antitrust Division or the FTC or unless early termination of the
waiting period is granted. Parent made such filing on June 5, 1995. If, within
the initial fifteen (15)-day waiting period, either the Antitrust Division or
the FTC requests additional information or material from Parent concerning the
Offer, the waiting period will be extended and would expire at 11:59 p.m., New
York City time, on the tenth (10th) calendar day after the date of substantial
compliance by Parent with such request or as may be otherwise stipulated by
agreement with the Antitrust Division and the FTC. In practice, complying with a
request for additional information or material can take a significant amount of
time. In addition, if the Antitrust Division or the FTC raises substantive
issues in connection with a proposed transaction, the parties frequently engage
in negotiations with the relevant governmental agency concerning possible means
of addressing those issues and may agree to delay consummation of the
transaction while such negotiations continue.
The Antitrust Division and the FTC frequently scrutinize the legality under
the antitrust laws of transactions such as Buyer's proposed acquisition of
Company. At any time before or after Buyer's acquisition of Shares pursuant to
the Offer, the Antitrust Division or the FTC could take such action under the
antitrust laws as it deems necessary or desirable in the public interest,
including seeking to enjoin the purchase of Shares pursuant to the Offer or the
consummation of the Proposed Merger or seeking the divestiture of Shares
acquired by Buyer or the divestiture of substantial assets of Company or Company
subsidiaries or Parent or its subsidiaries. Private parties may also bring legal
action under the antitrust laws under certain circumstances. There can be no
assurance that a challenge to the Offer on antitrust grounds will not be made
or, if such a challenge is made, of the result thereof.
The Offer is conditioned upon obtaining all Governmental Approvals
including those required under the HSR Act. The Reorganization Agreement also
provides that Buyer shall be permitted to extend the Offer to August 31, 1996 by
reason of the nonsatisfaction of the HSR Act by July 31, 1996 (provided that
such extension shall not prohibit Buyer from terminating the Offer or failing to
extend the Offer by reason of nonsatisfaction of any other condition of the
Offers).
EXON-FLORIO. Under Exon-Florio, the President of the United States is
authorized to prohibit or suspend acquisitions, mergers or takeovers by foreign
persons of persons engaged in interstate commerce in the United States if the
President determines, after investigation, that such foreign persons in
exercising control of
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such acquired persons might take action that threatens to impair the national
security of the United States and that other provisions of existing law do not
provide adequate authority to protect national security. Pursuant to
Exon-Florio, notice of an acquisition by a foreign person may be made to CFIUS
either voluntarily by the parties to such proposed acquisition, merger or
takeover or by any member of CFIUS. CFIUS is comprised of representatives of the
Departments of the Treasury, State, Commerce, Defense and Justice, the Office of
Management and Budget, the Office of Science and Technology Policy, the United
States Trade Representative's Office of Management and Budget, the Office of
Science and Technology Policy, the United States Trade Representative's Office
and the Council of Economic Advisors, as well as the Assistant to the President
for National Security Affairs and the Assistant to the President for Economic
Policy.
A determination that an investigation is called for must be made within 30
days after notification of a proposed acquisition, merger or takeover is first
filed with CFIUS. Any such investigation must be completed within 45 days of
such determination. Any decision by the President to take action must be
announced within 15 days of the completion of the investigation. Exon-Florio
does not require the filing of a notification, nor does it prohibit the
consummation of an acquisition, merger or takeover if a notification is not
made. If no notification is made, however, such an acquisition, merger or
takeover thereafter remains indefinitely subject to divestment should the
President subsequently determine that the national security of the United States
has been threatened or impaired. Buyer and Company expects to file with CFIUS,
on June 10, 1996, a joint voluntary notice of the transactions contemplated by
the Reorganization Agreement. Although Buyer believes that the transactions
contemplated by the Reorganization Agreement should not raise any national
security concerns, there can be no assurance that CFIUS will not determine to
conduct an investigation of the proposed transaction and, if an investigation is
commenced, there can be no assurance regarding the outcome of such
investigation.
The Offer is conditioned upon obtaining all Governmental Approvals
including those required under Exon-Florio. The Reorganization Agreement also
provides that Buyer shall be permitted to extend the Offer to August 31, 1996 by
reason of the nonsatisfaction of Exon-Florio by July 31, 1996 (provided that
such extension shall not prohibit Buyer from terminating the Offer or failing to
extend the Offer by reason of nonsatisfaction of any other condition of the
Offer).
INVESTMENT CANADA ACT. The Investment Canada Act (the "IC Act") governs
the acquisition, directly or indirectly, by non-Canadians of control of existing
Canadian businesses and the establishment by non-Canadians of new Canadian
businesses. Under the IC Act, subject to certain exceptions, a non-Canadian
proposing to acquire direct control of a Canadian business which has gross
assets equal to or in excess of Cdn. $5 million must first file an application
for review with Industry Canada, the federal government department responsible
for administering the IC Act, and receive approval for such investment from the
federal Minister (the "Minister") responsible for the IC Act. Approval is
granted where it is demonstrated, to the Minister's satisfaction, that the
proposed investment is or is likely to be of net benefit to Canada. Where the
non-Canadian has the status of a WTO investor (essentially, any national or
government of a country which is a member of the World Trade Organization or any
entity or other prescribed form of business organization which is controlled (as
defined) by any such national or government) for purposes of the IC Act or where
the Canadian business is already controlled by a WTO investor, the above
threshold is increased to Cdn. $168 million for acquisitions in 1996, subject to
certain exceptions. Where the gross assets of the Canadian business being
acquired are less than the applicable threshold, the non-Canadian must file a
notice with Industry Canada, either prior to or within 30 days following the
closing of the acquisition. Acquisitions subject to notice filing under the IC
Act are, subject to certain exceptions, not subject to the review and approval
process under the IC Act. Further, there is no longer any review of most
indirect acquisitions by WTO investors of control of Canadian businesses or
where the Canadian businesses are already controlled by WTO investors.
According to Company's 1996 10-K, Company conducts certain operations in
Canada. The acquisition of Shares by Buyer pursuant to the Offer will constitute
an indirect acquisition of control of the Canadian business of Company for
purposes of the IC Act. Parent and Buyer believe that Company is controlled by a
WTO investor for purposes of the IC Act. Parent intends to file the required
notice with Industry Canada. The acquisition will not be subject to the review
and approval process under the IC Act.
41
<PAGE> 42
PRE-MERGER NOTIFICATION REQUIREMENTS UNDER THE COMPETITION ACT
(CANADA). Certain provisions of the Competition Act (Canada) (the "Competition
Act") require prenotification to the Director of Investigation and Research
appointed under the Competition Act (the "Canadian Director") of significant
corporate transactions, such as the acquisition of a large percentage of the
stock of a public company that has Canadian operations, or a merger or
consolidation involving such an entity. Prenotification is generally required
with respect to transactions in which the parties to the transactions and their
affiliates have assets in Canada, or annual gross revenues from sales in, from
or into Canada, in excess of Cdn. $400,000,000 and which involve the direct or
indirect acquisition of an operating business, the aggregate value of the assets
of which, or the annual gross revenues from which, exceed Cdn. $35,000,000. For
transactions subject to the notification requirements, notice must be given
seven (7) or twenty-one (21) days prior to the completion of the transaction
depending on the information provided to the Canadian Director. The Canadian
Director may waive the waiting period. After the applicable waiting period
expires or is waived, the transaction may be completed.
If the Canadian Director believes that the proposed transaction prevents or
lessens, or is likely to prevent or lessen, competition substantially in a
market, the Canadian Director may apply to the Competition Tribunal, a special
purpose Canadian tribunal, which may order, among other things, the disposition
of the Canadian assets acquired in such transaction.
Parent intends to file any required notice and information with respect to
its proposed acquisition with the Canadian Director and, to the extent
necessary, observe the applicable waiting period and/or apply to the Canadian
Director for an advance ruling certificate to the effect that the Offer or
Proposed Merger would not prevent or lessen, or be likely to prevent or lessen,
competition substantially.
EEA AND NATIONAL MERGER REGULATION. According to Company's 1996 10-K,
Company conducts substantial operations in the European Economic Area ("EEA").
EEC Regulation 4064/89 (the "Merger Regulation") and Article 57 of the European
Economic Area Agreement require that concentrations with a "Community dimension"
be notified in prescribed form to the Commission of the European Communities
(the "European Commission") for review and approval prior to being put into
effect. In such cases, the European Commission will, with certain exceptions,
have exclusive jurisdiction to review the concentration as opposed to the
individual countries within the EEA.
The Offer will be deemed to have a "Community dimension" if the combined
aggregate worldwide annual revenues of both Parent and Company exceed ECU 5
billion and if the Community-wide annual revenues of each of Parent and Company
exceed ECU 250 million and if both Parent and Company do not receive more than
two-thirds ( 2/3) of their respective Community-wide revenues from one and the
same country. Concentrations that are found not to be subject to the Merger
Regulation may be subject to the various national merger control regimes of the
countries of the EEA, resulting in the possibility that it may be necessary or
desirable to obtain prior approvals from the various national authorities.
Based upon information contained in Company's 1996 10-K, Buyer currently
believes that the Offer should not be considered to have a "Community
dimension," as the combined aggregate worldwide annual revenues of both Parent
and Company for 1996 do not appear to exceed ECU 5 billion and the Community-
wide revenues of Company for 1996 appear not to exceed ECU 250 million.
Therefore, Buyer does not currently intend to file a notification with the
European Commission.
In general, EEA countries from which it may be necessary to obtain
approvals include: Austria, Belgium, Germany, Greece, Ireland, Italy, Portugal
and Sweden. In each of these jurisdiction's mandatory notification obligations
may apply. In certain other jurisdictions, although filing is not mandatory, it
may be considered desirable to obtain clearance from the relevant national
authority. The period within which the relevant national authority must or may
reach a preliminary decision on the notification, and the length of time
available to such national authority if it decides to commence a full
investigation of the transaction, varies from jurisdiction to jurisdiction. In
most cases a decision at the preliminary inquiry phase can be expected within
one to two (1-2) months of notification; where a full inquiry into a transaction
is undertaken, the detailed investigations may take several months. The relevant
national authorities are in many cases empowered to take a range of actions
designed to modify or prevent the implementation of transactions that do
42
<PAGE> 43
not fulfill the criteria for approval under the relevant national laws. Buyer
currently believes that no such mandatory or voluntary notifications or filings
are required as the activities of Company and the Company Subsidiaries and the
activities of Parent and its subsidiaries are in different countries and/or do
not meet the various national thresholds.
After commencement of the Offer, Buyer will seek further information
regarding the 1996 Community-wide revenues of Company. In the event that Buyer
concludes that the 1996 Community-wide revenues of Company in fact exceeded ECU
250 million and the Offer and the transactions contemplated thereby are,
therefore, deemed to have a "Community dimension," Buyer will file a
notification in the prescribed form with the European Commission in accordance
with the Merger Regulation. Transactions subject to the filing requirements of
the Merger Regulation are suspended automatically until three (3) weeks after
receipt of the notification. The European Commission may extend the suspension
period for such period as it finds necessary to make a final decision on the
legality of the transaction. However, in the case of a public bid, the bidder
may acquire shares of the target company during the suspension period (provided
that the transaction has been duly notified to the European Commission), but may
not vote such shares until after the end of the suspension period unless the
European Commission grants permission to do so in order to maintain the full
value of the bidder's investment.
If a filing under the Merger Regulation is made, the European Commission
must decide whether to initiate proceedings within one (1) month after the
receipt of the notification, subject to certain extensions for EEA holidays if
the information to be supplied with the notification is incomplete or if an
individual country has requested a referral of the transaction (or part of it).
If proceedings are initiated, the European Commission must reach a decision in
the proceedings within four (4) months of the commencement of the proceedings.
During this period the Buyer may modify the transactions contemplated to remove
any serious doubts of the Commission as to the compatibility of the transactions
with the common market. If the European Commission fails to reach a decision
within either of these time periods the transaction will be deemed to be
compatible with the common market. If the European Commission declares the Offer
to be incompatible with the common market, it may prevent the consummation of
the transaction, order a divestiture if the transaction has already been
consummated, or impose conditions or other obligations.
There can be no assurance that a challenge to the Offer will not be made
pursuant to the merger control regimes of one or more of the various countries
(or alternatively, if applicable, pursuant to the Merger Regulation) or by legal
action brought by private parties or, if such a challenge is made, what the
outcome will be. See Section 12, "Certain Conditions of the Offer".
OTHER FOREIGN LAWS. Company's 1996 10-K indicates that Company and certain
of Company Subsidiaries conduct business in other foreign countries outside
Canada and the EEA where regulatory filings or approvals may be required or
desirable in connection with the consummation of the Offer. Certain of such
filings or approvals, if required or desirable, may not be made or obtained
prior to the expiration of the Offer. After commencement of the Offer, Buyer
will seek further information regarding the applicability of any such laws and
currently intends to take such action as may be required or desirable. If any
government or governmental authority or agency takes any action prior to the
completion of the Offer that, in the sole judgment of Buyer, might have certain
adverse effects, Buyer will not be obligated to accept for payment or pay for
any Shares tendered. See Section 12, "Certain Conditions of the Offer".
14. CERTAIN FEES AND EXPENSES
Buyer and Parent have retained D.F. King & Co., Inc. to act as the
Information Agent and Chemical Mellon Shareholders Services, LLC, to serve as
the Depositary in connection with the Offer. The Information Agent and the
Depositary each will receive reasonable and customary compensation for their
services, be reimbursed for certain reasonable out-of-pocket expenses and be
indemnified against certain liabilities and expenses in connection therewith,
including certain liabilities and expenses under the federal securities laws.
Neither Buyer nor Parent will pay any fees or commissions to any broker or
dealer or other person (other than the Information Agent) in connection with the
solicitation of tenders of Shares pursuant to the Offer. Brokers, dealers, banks
and trust companies will be reimbursed by Buyer upon request for customary
mailing
43
<PAGE> 44
and handling expenses incurred by them in forwarding material to their
customers. It is estimated that the expenses incurred by Buyer and Parent in
connection with the offer will be approximately as set forth below:
<TABLE>
<S> <C>
Financial Advisor...................................................... $458,000
Legal and Expert Fees and Expenses..................................... $1,200,000
Printing, Mailing, Solicitation, Distribution and Depositary
Expenses............................................................. $260,000
Filing Fees and Related Expenses....................................... $106,000
Miscellaneous.......................................................... $100,000
TOTAL:............................................................ $2,124,000
</TABLE>
15. MISCELLANEOUS
The Offer is not being made to, nor will tenders be accepted from or on
behalf of, holders of Shares in any jurisdiction in which the making of the
Offer or the acceptance thereof would not be in compliance with the laws of such
jurisdiction. Neither Buyer nor Parent is aware of any jurisdiction in which the
making of the Offer or the acceptance thereof would not be in compliance with
the laws of such jurisdiction. To the extent Buyer or Parent becomes aware of
any state law that would limit the class of offerees in the Offer, Buyer will
amend the Offer and, depending on the timing of such amendment, if any, will
extend the Offer to provide adequate dissemination of such information to
holders of Shares prior to the expiration of the Offer.
No person has been authorized to give any information or to make any
representation on behalf of Buyer or Parent not contained herein or in the
Letter of Transmittal and, if given or made, such information or representation
must not be relied upon as having been authorized.
Buyer has filed with the Commission the Schedule 14D-1 pursuant to Rule
14d-3 under the Exchange Act, together with exhibits, furnishing certain
additional information with respect to the Offer, and may file amendments
thereto. Such Schedule 14D-1 and any amendments thereto, including exhibits,
should be available for inspection at the public reference facilities of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549. Copies of such
information should be obtainable, by mail, upon payment of the Commission's
customary charges, by writing to the Commission at such address.
UC ACQUISITION CORP.
June 7, 1996
44
<PAGE> 45
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF
PARENT, PAKHOED USA, INC. ("PAKHOED USA"), BUYER AND
PAKHOED INVESTERINGEN, B.V. ("INVESTERINGEN")
SECTION A. DIRECTORS AND EXECUTIVE OFFICERS OF PARENT
The name, business address, present principal occupation or employment and
five (5)-year employment history of each of the directors and executive officers
of Parent are set forth below. All such directors and executive officers listed
below are citizens of The Netherlands, except Roy E. Wansik, who is a citizen of
the United States. Unless otherwise indicated, the principal business address of
each director or executive officer is 333 Blaak, 3011 GB Rotterdam, The
Netherlands.
<TABLE>
<CAPTION>
POSITION WITH PARENT;
NAME, AGE AND PRINCIPAL OCCUPATION OR EMPLOYMENT;
BUSINESS ADDRESS FIVE (5)-YEAR EMPLOYMENT HISTORY
- ------------------------------ --------------------------------------------------------------------
<S> <C>
N. J. Westdijk (54)........... Managing Director of Parent from 1990 to 1992. Chairman of the Board
of Parent from 1992 to present. See Sections B, C and D for further
employment history.
Pierre A. Pellenaars (51)..... Senior Vice President, Finance and Administration, of Parent from
1989 to present. Director of Univar Europe N.V. from 1991 to 1994.
See Section D for further employment history.
J. W. Berghuis (61)........... Vice Chairman of the Board of Management of Parent from 1991 to
present. See Sections B, C and D for further employment history.
G. P. Krans (48).............. Member of the Board of Management of Parent from May 1996 to
present. Chief Executive Officer of Shell Saudi Arabia Oil and
Chemicals from 1994 to 1995. Chief Financial Officer of Shell
Indonesia Oil and Chemicals from 1989 to 1994.
A. H. Spoor (47).............. Member of the Board of Management of Parent from 1996 to present.
Director of Special Products Division, Natural Gas, Exxon Company
Int. from 1993 to February 1996.
Frederick van der Ploeg Professor of Political Economy at the University of Amsterdam from
(40)........................ 1991 to present. Member of the Lower House of the Dutch Parliament
for the Labour Party (PvdA) (Financial Spokesperson) from 1994 to
present. Member of the Supervisory Board of Parent from 1996 to
present.
H. de Ruiter (62)............. Member of the Supervisory Board of Parent from 1996 to present.
Currently serving as Deputy Chairman. Managing Director of
Royal/Dutch Shell until 1994.
J. F. M. Peters (64).......... Member of the Supervisory Board of Parent from 1983 to present.
Chairman and Chief Financial Officer, Executive Board of AEGON N.V.
from 1984 to 1993. Retired, various board memberships from 1993 to
present.
J. H. Choufoer (69)........... Chairman of the Supervisory Board of Parent from 1990 to present.
Chairman of the Supervisory Board of Koninklijke Ahold N.V. from
1990 to May 1996. Chairman of the Supervisory Board of ING Group
N.V. from 1990 to May 1996. Chairman of the Supervisory Board of
Koninklijke Hoogovens N.V. from 1990 to present. Member of the
Supervisory Board of N.V. Koninklijke Nederlandsche Petroleum
Maatschappij (Royal Dutch Petroleum Co.) from 1990 to present.
Member of the Board of Directors of The Shell Petroleum Co. Ltd.
from 1990 to present.
Hubert Crijns (65)............ Member of the Supervisory Board of Parent from 1993 to present.
Member of the Supervisory Board of Parent from 1993 to present.
Chief Executive Officer of Parent from 1976 to 1993.
Arie A. van der Louw (62)..... Member of the Supervisory Board of Parent, Heidemij N.V., Verenigde
Tankrederijen, Nelcon and Groot Themsen from 1991 to present.
Chairman of Supervisory Board of Feijenoord -- Stadium from 1991 to
present. Chairman of Dutch Broadcasting Corporation from 1992 to
present.
</TABLE>
I-1
<PAGE> 46
<TABLE>
<CAPTION>
POSITION WITH PARENT;
NAME, AGE AND PRINCIPAL OCCUPATION OR EMPLOYMENT;
BUSINESS ADDRESS FIVE (5)-YEAR EMPLOYMENT HISTORY
- ------------------------------ --------------------------------------------------------------------
<S> <C>
J. Groenendijk (68)........... Retired since 1988. Chairman of the Executive Board of Royal
Nedlloyd Group N.V. from 1985 to 1988. Several non-executive
directorships with Dutch companies, including Parent, from 1988 to
1996.
J. Bouwens (60)............... Division President of Gebr. Broere from prior to 1988 to present.
Member of the Strategic Committee of Parent and Group President of
the Shipping and Chemical Storage Group of Parent from 1994 to
present.
J. Brouwer (54)............... Division President of Paktank International from prior to 1990 to
present. Member of the Strategic Committee of Parent and Group
President of International Tank Storage and Development Group of
Parent from 1994 to present.
P.Y. Divet (50)............... Managing Director of Lambert Riviere S.A. from prior to 1991 to
present. President of Lambert Riviere S.A. from 1995 to present.
Member of the Strategic Committee of Parent from 1996 to present.
S.D. Eikelboom (60)........... Senior Vice President Strategy & Development of Parent from 1976 to
present.
P.P. Witte (42)............... Senior Vice President, Human Resources, of Parent from 1995 to
present. Senior Vice President, Human Resources (Netherlands) at
Asea Brown Boveri B.V. from 1991 to 1994. Personnel Manager
(Netherlands) of BASF Netherlands B.V. from 1986 to 1991.
Roy E. Wansik (52) Group President, North America, of Parent from 1993 to present.
2000 West Loop South, #2200 Member of the Strategic Committee of Parent from 1993 to present.
Houston, Texas 77027.......... See Section B for further employment history.
</TABLE>
SECTION B. DIRECTORS AND EXECUTIVE OFFICERS OF PAKHOED USA
The name, business address, present principal occupation or employment and
five (5)-year employment history of each of the directors and executive officers
of Pakhoed USA are set forth below. Unless otherwise indicated, the business
address of each such director and executive officer is 2000 West Loop South,
#2200, Houston, Texas 77027. All such directors and executive officers listed
below are citizens of the United States, except N.J. Westdijk and J. Berghuis,
who are citizens of The Netherlands.
<TABLE>
<CAPTION>
NAME, AGE AND POSITION WITH PAKHOED, USA; PRINCIPAL OCCUPATION
BUSINESS ADDRESS OR EMPLOYMENT; FIVE (5)-YEAR EMPLOYMENT HISTORY
- ------------------------------ ----------------------------------------------------------------------------
<S> <C>
N.J. Westdijk (54)............ Director, Chairman and President of Pakhoed USA from 1992 to present. See
333 Blaak Sections A, C and D for further employment history.
3011 GB Rotterdam
The Netherlands
Roy E. Wansik (52)............ Vice President and Director of Pakhoed USA from 1991 to present. See Section
A for further employment history.
John H. Trow (61)............. Treasurer and Secretary of Pakhoed USA from 1991 to present. See Section C
for further employment history.
J.W. Berghuis (61)............ Director of Pakhoed USA from 1992 to present. See Sections A, C and D for
333 Blaak further employment history.
3011 GB Rotterdam
The Netherlands
</TABLE>
I-2
<PAGE> 47
SECTION C. DIRECTORS AND EXECUTIVE OFFICERS OF BUYER
The name, business address, present principal occupation or employment and
five (5)-year employment history of each of the directors and executive officers
of Buyer are set forth below. Unless otherwise indicated, the business address
of each such director and executive officer is UC Acquisition Corp., in care of
Pakhoed USA, 2000 West Loop South, #2200, Houston, Texas 77027. All such
directors and executive officers listed below are citizens of the United States,
except Mr. N.J. Westdijk and Mr. J.W. Berghuis, who are citizens of The
Netherlands.
<TABLE>
<CAPTION>
NAME, AGE AND POSITION WITH BUYER; PRINCIPAL OCCUPATION
BUSINESS ADDRESS OR EMPLOYMENT; FIVE (5)-YEAR EMPLOYMENT HISTORY
- ------------------------------ ----------------------------------------------------------------------------
<S> <C>
N. J. Westdijk (54)........... Chairman, of the Board, President and Director of Buyer from May 1996 to
333 Blaak present. See Sections A, B and D for further employment history.
3011 GB Rotterdam
The Netherlands
Roy E. Wansik (52)............ Vice President and Director of Buyer from May 1996 to present. See Sections
A and B for further employment history.
John H. Trow (61)............. Treasurer and Secretary of Buyer from May 1996 to present. See Section B for
further employment history.
J. W. Berghuis (61)........... Director of Buyer from May 1996 to present. See Sections A, B and D for
333 Blaak further employment history.
3011 GB Rotterdam
The Netherlands
</TABLE>
SECTION D. DIRECTORS AND EXECUTIVE OFFICERS OF INVESTERINGEN
The name, business address, present principal occupation or employment and
five (5)-year employment history of each of the directors and executive officers
of Investeringen are set forth below. The business address of each such director
and executive officer is Pakhoed Investeringen, in care of Parent, 333 Blaak,
3011 GB Rotterdam, The Netherlands. All such directors and executive officers
listed below are citizens of The Netherlands.
<TABLE>
<CAPTION>
NAME, AGE AND POSITION WITH INVESTERINGEN; PRINCIPAL OCCUPATION
BUSINESS ADDRESS OR EMPLOYMENT; FIVE (5)-YEAR EMPLOYMENT HISTORY
- ------------------------------ ----------------------------------------------------------------------------
<S> <C>
N.J. Westdijk (54)............ Managing Director of Investeringen from 1992 to present. See Sections A, B
and C for further employment history.
J. W. Berghuis (61)........... Director of Investeringen from 1992 to present. See Sections A, B and C for
further employment history.
Pierre A. Pellenaars (51)..... Director of Investeringen from 1989 to present. See Section A for further
employment history.
</TABLE>
I-3
<PAGE> 48
SCHEDULE II
THE FOLLOWING IS REPRODUCED FROM THE WASHINGTON BUSINESS CORPORATION ACT.
DISSENTERS' RIGHTS
23B.13.010 DEFINITIONS. -- As used in this chapter:
(1) "Corporation" means the issuer of the shares held by a dissenter before
the corporate action, or the surviving or acquiring corporation by merger or
share exchange of that issuer.
(2) "Dissenter" means a shareholder who is entitled to dissent from
corporate action under RCW 23B.13.020 and who exercises that right when and in
the manner required by RCW 23B.13.200 through 23B.13.280.
(3) "Fair value" with respect to a dissenter's shares means the value of
the shares immediately before the effective date of the corporate action to
which the dissenter objects, excluding any appreciation or depreciation in
anticipation of the corporate action unless exclusion would be inequitable.
(4) "Interest" means interest from the effective date of the corporate
action until the date of payment, at the average rate currently paid by the
corporation on its principal bank loans or, if none, at a rate that is fair and
equitable under all the circumstances.
(5) "Record shareholder" means the person in whose name shares are
registered in the records of a corporation or the beneficial owner of shares to
the extent of the rights granted by a nominee certificate on file with a
corporation.
(6) "Beneficial shareholder" means the person who is a beneficial owner of
shares held in a voting trust or by a nominee as the record shareholder.
(7) "Shareholder" means the record shareholder or the beneficial
shareholder.
23B.13.020 RIGHT TO DISSENT.
(1) A shareholder is entitled to dissent from, and obtain payment of the
fair value of the shareholder's shares in the event of any of the following
corporate actions:
(a) Consummation of a plan of merger to which the corporation is a
party (i) if shareholder approval is required for the merger by RCW
23B.11.030, 23B.11.080, or the articles of incorporation and the
shareholder is entitled to vote on the merger, or (ii) if the corporation
is a subsidiary that is merged with its parent under RCW 23B.11.040;
(b) Consummation of a plan of share exchange to which the corporation
is a party as the corporation whose shares will be acquired, if the
shareholder is entitled to vote on the plan;
(c) Consummation of a sale or exchange of all, or substantially all,
of the property of the corporation other than in the usual and regular
course of business, if the shareholder is entitled to vote on the sale or
exchange, including a sale in dissolution, but not including a sale
pursuant to court order or a sale for cash pursuant to a plan by which all
or substantially all of the net proceeds of the sale will be distributed to
the shareholders within one year after the date of sale;
(d) An amendment of the articles of incorporation that materially
reduces the number of shares owned by the shareholder to a fraction of a
share if the fractional share so created is to be acquired for cash under
RCW 23B.06.040; or
(e) Any corporate action taken pursuant to a shareholder vote to the
extent the articles of incorporation, bylaws, or a resolution of the board
of directors provides that voting or nonvoting shareholders are entitled to
dissent and obtain payment for their shares.
(2) A shareholder entitled to dissent and obtain payment for the
shareholder's shares under this chapter may not challenge the corporate action
creating the shareholder's entitlement unless the action fails to comply
II-1
<PAGE> 49
with the procedural requirements imposed by this title, RCW 25.10.900 through
25.10.955, the articles of incorporation, or the bylaws, or is fraudulent with
respect to the shareholder or the corporation.
(3) The right of a dissenting shareholder to obtain payment of the fair
value of the shareholder's shares shall terminate upon the occurrence of any one
of the following events:
(a) The proposed corporate action is abandoned or rescinded;
(b) A court having jurisdiction permanently enjoins or sets aside the
corporate action; or
(c) The shareholder's demand for payment is withdrawn with the written
consent of the corporation. (Last amended by Ch. 269, L. '91, eff.
7-28-91.)
23B.13.030 DISSENT OF NOMINEES AND BENEFICIAL OWNERS.
(1) A record shareholder may assert dissenters' rights as to fewer than all
the shares registered in the shareholder's name only if the shareholder dissents
with respect to all shares beneficially owned by any one person and notifies the
corporation in writing of the name and address of each person on whose behalf
the shareholder asserts dissenters' rights. The rights of a partial dissenter
under this subsection are determined as if the shares as to which the dissenter
dissents and the dissenter's other shares were registered in the names of
different shareholders.
(2) A beneficial shareholder may assert dissenters' rights as to shares
held on the beneficial shareholder's behalf only if:
(a) The beneficial shareholder submits to the corporation the record
shareholder's written consent to the dissent not later than the time the
beneficial shareholder asserts dissenters' rights; and
(b) The beneficial shareholder does so with respect to all shares of
which such shareholder is the beneficial shareholder or over which such
shareholder has power to direct the vote.
23B.13.200 NOTICE OF DISSENTERS' RIGHTS.
(1) If proposed corporate action creating dissenters' rights under RCW
23B.13.020 is submitted to a vote at a shareholders' meeting, the meeting notice
must state that shareholders are or may be entitled to assert dissenters' rights
under this chapter and be accompanied by a copy of this chapter.
(2) If corporate action creating dissenters' rights under RCW 23B.13.020 is
taken without a vote of shareholders, the corporation, within ten days after the
effective date of such corporate action, shall notify in writing all
shareholders entitled to assert dissenters' rights that the action was taken and
send them the dissenters' notice described in RCW 23B.13.220.
23B.13.210 NOTICE OF INTENT TO DEMAND PAYMENT.
(1) If proposed corporate action creating dissenters' rights under RCW
23B.13.020 is submitted to a vote at a shareholders' meeting, a shareholder who
wishes to assert dissenters' rights must (a) deliver to the corporation before
the vote is taken written notice of the shareholder's intent to demand payment
for the shareholder's shares if the proposed action is effected, and (b) not
vote such shares in favor of the proposed action.
(2) A shareholder who does not satisfy the requirements of subsection (1)
of this section is not entitled to payment for the shareholder's shares under
this chapter.
23B.13.220 DISSENTERS' NOTICE.
(1) If proposed corporate action creating dissenters' rights under RCW
23B.13.020 is authorized at a shareholders' meeting, the corporation shall
deliver a written dissenters' notice to all shareholders who satisfied the
requirements of RCW 23B.13.210.
II-2
<PAGE> 50
(2) The dissenters' notice must be sent within ten days after the effective
date of the corporate action, and must:
(a) State where the payment demand must be sent and where and when
certificates for certificated shares must be deposited;
(b) Inform holders of uncertificated shares to what extent transfer of
the shares will be restricted after the payment demand is received;
(c) Supply a form for demanding payment that includes the date of the
first announcement to news media or to shareholders of the terms of the
proposed corporate action and requires that the person asserting
dissenters' rights certify whether or not the person acquired beneficial
ownership of the shares before that date;
(d) Set a date by which the corporation must receive the payment
demand, which date may not be fewer than thirty nor more than sixty days
after the date the notice in subsection (1) of this section is delivered;
and
(e) Be accompanied by a copy of this chapter.
23B.13.230 DUTY TO DEMAND PAYMENT.
(1) A shareholder sent a dissenters' notice described in RCW 23B.13.220
must demand payment, certify whether the shareholder acquired beneficial
ownership of the shares before the date required to be set forth in the
dissenters' notice pursuant to RCW 23B.13.220(2)(c), and deposit the
shareholder's certificates in accordance with the terms of the notice.
(2) The shareholder who demands payment and deposits the shareholder's
share certificates under subsection (1) of this section retains all other rights
of a shareholder until the proposed corporate action is effected.
(3) A shareholder who does not demand payment or deposit the shareholder's
share certificates where required, each by the date set in the dissenters'
notice, is not entitled to payment for the shareholder's shares under this
chapter.
23B.13.240 SHARE RESTRICTIONS.
(1) The corporation may restrict the transfer of uncertificated shares from
the date the demand for their payment is received until the proposed corporate
action is effected or the restriction is released under RCW 23B.13.260.
(2) The person for whom dissenters' rights are asserted as to
uncertificated shares retains all other rights of a shareholder until the
effective date of the proposed corporate action.
23B.13.250 PAYMENT.
(1) Except as provided in RCW 23B.13.270, within thirty days of the later
of the effective date of the proposed corporate action, or the date the payment
demand is received, the corporation shall pay each dissenter who complied with
RCW 23B.13.230 the amount the corporation estimates to be the fair value of the
shareholder's shares, plus accrued interest.
(2) The payment must be accompanied by:
(a) The corporation's balance sheet as of the end of a fiscal year
ending not more than sixteen months before the date of payment, an income
statement for that year, a statement of changes in shareholders' equity for
that year, and the latest available interim financial statements, if any;
(b) An explanation of how the corporation estimated the fair value of
the shares;
(c) An explanation of how the interest was calculated;
II-3
<PAGE> 51
(d) A statement of the dissenter's right to demand payment under RCW
23B.13.280; and
(e) A copy of this chapter.
23B.13.260 FAILURE TO TAKE ACTION.
(1) If the corporation does not effect the proposed action within sixty
days after the date set for demanding payment and depositing share certificates,
the corporation shall return the deposited certificates and release any transfer
restrictions imposed on uncertificated shares.
(2) If after returning deposited certificates and releasing transfer
restrictions, the corporation wishes to undertake the proposed action, it must
send a new dissenters' notice under RCW 23B.13.220 and repeat the payment demand
procedure.
23B.13.270 AFTER-ACQUIRED SHARES.
(1) A corporation may elect to withhold payment required by RCW 23B.13.250
from a dissenter unless the dissenter was the beneficial owner of the shares
before the date set forth in the dissenters' notice as the date of the first
announcement to news media or to shareholders of the terms of the proposed
corporate action.
(2) To the extent the corporation elects to withhold payment under
subsection (1) of this section, after taking the proposed corporate action, it
shall estimate the fair value of the shares, plus accrued interest, and shall
pay this amount to each dissenter who agrees to accept it in full satisfaction
of the dissenter's demand. The corporation shall send with its offer an
explanation of how it estimated the fair value of the shares, an explanation of
how the interest was calculated, and a statement of the dissenter's right to
demand payment under RCW 23B.13.280.
23B.13.280 PROCEDURE IF SHAREHOLDER DISSATISFIED WITH PAYMENT OR OFFER.
(1) A dissenter may notify the corporation in writing of the dissenter's
own estimate of the fair value of the dissenter's shares and amount of interest
due, and demand payment of the dissenter's estimate, less any payment under RCW
23B.13.250, or reject the corporation's offer under RCW 23B.13.270 and demand
payment of the dissenter's estimate of the fair value of the dissenter's shares
and interest due, if:
(a) The dissenter believes that the amount paid under RCW 23B.13.250
or offered under RCW 23B.13.270 is less than the fair value of the
dissenter's shares or that the interest due is incorrectly calculated;
(b) The corporation fails to make payment under RCW 23B.13.250 within
sixty days after the date set for demanding payment; or
(c) The corporation does not effect the proposed action and does not
return the deposited certificates or release the transfer restrictions
imposed on uncertificated shares within sixty days after the date set for
demanding payment.
(2) A dissenter waives the right to demand payment under this section
unless the dissenter notifies the corporation of the dissenter's demand in
writing under subsection (1) of this section within thirty days after the
corporation made or offered payment for the dissenter's shares.
II-4
<PAGE> 52
Manually signed facsimile copies of the Letter of Transmittal will be
accepted. The Letter of Transmittal, certificates for Shares and any other
required documents should be sent or delivered by each shareholder of Company or
such shareholder's broker, dealer, bank, trust company or other nominee to the
Depositary at one of its addresses set forth below.
THE DEPOSITARY FOR THE OFFER IS:
CHEMICAL MELLON SHAREHOLDER SERVICES, LLC
<TABLE>
<S> <C> <C>
By Mail: By Overnight Delivery: By Hand:
Chemical Mellon Chemical Mellon First Interstate Bank of
Shareholder Services Shareholder Services Washington
P. O. Box 817 Attn: Reorg. Dept. 1st Floor 999 Third Avenue
Midtown Station 85 Challenger Road Stock Transfer, 14th Floor
New York, NY 10018 Ridgefield Park, NJ 07660 Seattle, Washington 98104
By Facsimile Transmission New York Drop:
For Guaranteed Deliveries Only:
(201) 296-4293 120 Broadway, 13th Floor
New York, NY 10271
</TABLE>
Questions and requests for assistance or for additional copies of this
Offer to Purchase, the Letter of Transmittal and the Notice of Guaranteed
Delivery may be directed to the Information Agent at its telephone numbers and
location listed below. You may also contact your broker, dealer, bank, trust
company or other nominee for assistance concerning the Offer.
The Information Agent for the Offer is:
D.F. King & Co., Inc.
77 Water Street
New York, New York 10005
Call Toll Free
1-800-735-3591
------------------------------
<PAGE> 1
EXHIBIT (A)(2)
LETTER OF TRANSMITTAL
TO TENDER COMMON SHARES
OF
UNIVAR CORPORATION
PURSUANT TO THE OFFER TO PURCHASE
DATED JUNE 7, 1996
BY
UC ACQUISITION CORP.
AN INDIRECT SUBSIDIARY OF
ROYAL PAKHOED N.V.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 8:00 P.M.,
NEW YORK CITY TIME, ON JULY 15, 1996, UNLESS THE OFFER IS EXTENDED.
THE DEPOSITARY FOR THE OFFER IS:
CHEMICAL MELLON SHAREHOLDER SERVICES, LLC
<TABLE>
<S> <C>
Deliver by Mail: By Overnight Delivery:
Chemical Mellon Shareholder Services, LLC Chemical Mellon Shareholder Services, LLC
P.O. Box 817 Midtown Station Attn.: Reorg. Dept., First Floor
New York, NY 10018 85 Challenger Road
Ridgefield Park, NJ 07660
By Facsimile Transmission
For Guaranteed Deliveries Only:
(201) 296-4293
Delivery by Hand: New York Drop:
First Interstate Bank of Washington 120 Broadway, 13th Floor
999 Third Avenue New York, NY 10271
Stock Transfer, 14th Floor
Seattle, Washington 98104
</TABLE>
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE TRANSMISSION TO A NUMBER
OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
Information Agent:
D.F. King & Co., Inc.
77 Water Street
New York, New York 10005-4495
Call Toll Free: 1 (800) 735-3591
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be completed by shareholders either if
certificates for Shares (as defined below) are to be forwarded herewith or if
tenders of Shares are to be made by book-entry transfer to an account maintained
by Chemical Mellon Shareholder Services, LLC (the "Depositary") at The
Depository Trust Company and Philadelphia Depository Trust Company (each a
"Book-Entry Transfer Facility" and collectively referred to as the "Book-Entry
Transfer Facilities") pursuant to the procedures set forth in Section 2 of the
Offer to Purchase (as defined below). Shareholders who tender Shares by
book-entry transfer, are referred to herein as "Book-Entry Shareholders."
Holders of Shares whose certificates for such Shares (the "Share Certificates")
are not immediately available or who cannot deliver their Share Certificates and
all other required documents to the Depositary prior to the Expiration Date (as
defined in Section 1 of the Offer to Purchase) or who cannot complete the
procedures for book-entry transfer on a timely basis, must tender their Shares
according to the guaranteed delivery
<PAGE> 2
/ / CHECK HERE IF SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO AN
ACCOUNT MAINTAINED BY THE DEPOSITARY WITH A BOOK-ENTRY TRANSFER FACILITY
AND COMPLETE THE FOLLOWING:
Name of Tendering Institution:
Check Box of Book-Entry Transfer Facility:
/ / The Depository Trust Company
/ / Philadelphia Depository Trust Company
Account Number:
Transaction Code Number:
/ / CHECK HERE IF SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED
DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING.
PLEASE ENCLOSE A PHOTOCOPY OF SUCH NOTICE OF GUARANTEED DELIVERY.
Name(s) of Registered Holder(s):
Window Ticket Number (if any):
Date of Execution of Notice of Guaranteed Delivery:
Name of Institution which Guaranteed Delivery:
<TABLE>
<S> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF SHARES TENDERED
- ----------------------------------------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S) SHARE CERTIFICATE(S) AND SHARE(S) TENDERED
(PLEASE FILL IN, IF BLANK, EXACTLY AS NAME(S) APPEAR(S) ON SHARE CERTIFICATE(S)) (ATTACH ADDITIONAL LIST, IF NECESSARY)
- ----------------------------------------------------------------------------------------------------------------------------------
SHARE CERTIFICATE NUMBER OF SHARES
NUMBER(S)* TENDERED**
------------------------------------------
------------------------------------------
------------------------------------------
------------------------------------------
------------------------------------------
------------------------------------------
------------------------------------------
------------------------------------------
------------------------------------------
Total Shares
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Need not be completed by Book-Entry Shareholders.
** Unless otherwise indicated, it will be assumed that all Shares represented by
certificates delivered to the Depositary are being tendered. See Instruction
4.
<PAGE> 3
NOTE: SIGNATURE(S) MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
LADIES AND GENTLEMEN:
The undersigned hereby tenders to UC Acquisition Corp., a Washington
corporation ("Buyer") which is an indirect subsidiary of Royal Pakhoed N.V. (a
translation of Koninklijke Pakhoed N.V., a publicly held limited liability
company formed and existing under the laws of The Netherlands, ("Parent"), the
above-described common shares (the "Shares"), of Univar Corporation, a
Washington corporation ("Company"), at a purchase price of $19.45 per Share, net
to the seller in cash, upon the terms and subject to the conditions set forth in
the Offer to Purchase, dated June 7, 1996 (the "Offer to Purchase"), and in this
Letter of Transmittal (which together constitute the "Offer"), receipt of which
is hereby acknowledged. The undersigned understands that Buyer reserves the
right to transfer or assign, in whole or from time to time in part, to one or
more of its or Parent's affiliates, the right to purchase all or any portion of
the Shares tendered pursuant to the Offer.
Subject to, and effective upon, acceptance for payment of, or payment for,
Shares tendered herewith in accordance with the terms and subject to the
conditions of the Offer (including, if the Offer is extended, the terms or
conditions of any such extension), the undersigned hereby sells, assigns and
transfers to, or upon the order of Buyer all right, title and interest in and to
all of the Shares that are being tendered hereby and any and all dividends,
distributions, other Shares, rights or other securities issued or issuable in
respect thereof on or after May 31, 1996, and payable or distributable to the
undersigned on a date prior to the transfer to the name of Buyer or nominee or
transferee of Buyer on Company's stock transfer records of the Shares tendered
herewith (a "Distribution"), and constitutes and appoints the Depositary the
true and lawful agent and attorney-in-fact of the undersigned with respect to
such Shares (and any Distributions), with full power of substitution (such power
of attorney being deemed to be an irrevocable power coupled with an interest),
to (i) deliver Share Certificates (and any Distributions), or transfer ownership
of such Shares (and any Distributions) on the account books maintained by a
Book-Entry Transfer Facility, together, in any such case, with all accompanying
evidences of transfer and authenticity to, or upon the order of Buyer, upon
receipt by the Depositary, as the undersigned's agent, of the purchase price
(adjusted, if appropriate, as provided in the Offer to Purchase), (ii) present
such Shares (and any Distributions) for transfer on the books of Company and
(iii) receive all benefits and otherwise exercise all rights of beneficial
ownership of such Shares (and any Distributions), all in accordance with the
terms and subject to the conditions of the Offer.
All authority conferred or agreed to be conferred in this Letter of
Transmittal shall be binding upon successors, assigns, heirs, executors,
administrators and legal representatives of the undersigned and shall not be
affected by, and shall survive, the death or incapacity of the undersigned.
Except as stated in the Offer to Purchase, this tender is irrevocable.
The undersigned hereby irrevocably appoints each designee of Buyer, the
attorney-in-fact and proxy of the undersigned, with full power of substitution,
to the full extent of the undersigned's rights with respect to all Shares
tendered hereby and accepted for payment and paid for by Buyer (and any
Distributions). All such proxies shall be considered coupled with an interest in
the Shares tendered herewith. Such appointment will be effective when, and only
to the extent that, Buyer pays for such Shares as provided in the Offer to
Purchase. Upon such appointment, all prior powers of attorney, proxies, consents
or revocations given by such shareholder with respect to such Shares (and any
Distributions) will, without further action, be revoked and no subsequent powers
of attorney, proxies, consents or revocations may be given (and, if given, will
be deemed ineffective). The designees of Buyer will, with respect to the Shares
for which such appointment is effective, be empowered to exercise all voting and
other rights with respect to such Shares of the undersigned as they in their
sole discretion may deem proper at any annual, special or adjourned meeting of
Company's shareholders or actions by written consent in lieu of any such meeting
or otherwise. Buyer reserves the right to require that, in order for Shares to
be deemed validly tendered, immediately upon the payment of such Shares, Buyer
or its designee must be able to exercise full voting and consent and other
rights with respect to such Shares and other securities or rights, including
voting at any meeting of shareholders.
The undersigned hereby represents and warrants that the undersigned has full
power and authority to tender, sell, assign and transfer the Shares tendered
hereby (and any Distributions) and that, when the same are accepted for payment
and paid for by Buyer, Buyer will acquire good, marketable and unencumbered
title thereto, free and clear of all liens, restrictions, charges and
encumbrances and that the Shares tendered hereby (and any Distributions) will
not be subject to any adverse claim. The undersigned, upon request, will execute
and deliver any additional documents deemed by the Depositary or Buyer to be
necessary or desirable to complete the sale, assignment and transfer of Shares
tendered hereby (and any Distributions). In addition, the undersigned shall
promptly remit and transfer to the Depositary for the account of Buyer any and
all other Distributions in respect of the Shares tendered hereby, accompanied by
appropriate documentation of transfer, and, pending such remittance or
appropriate assurance thereof, Buyer shall be, subject to applicable law,
entitled to all rights and privileges as owner of any such Distributions, and
may withhold the entire purchase price of Shares tendered hereby, or deduct from
such purchase price the amount or value thereof as determined by Buyer in its
sole discretion.
Tender of Shares made pursuant to the Offer are irrevocable, except that
Shares tendered pursuant to the Offer may be withdrawn at any time prior to the
Expiration Date (as defined in the Offer to Purchase) and, unless theretofore
accepted for payment by Buyer pursuant to the Offer, may also be withdrawn at
any time after August 6, 1996. See Section 3 of the Offer to Purchase.
Unless otherwise indicated herein under "Special Payment Instructions",
please issue the check for the purchase price and/or return any Share
Certificates not tendered or not accepted for payment in the name(s) of the
registered holder(s) appearing under "Description of Shares Tendered".
Similarly, unless otherwise indicated under "Special Delivery Instructions",
please mail the check for the purchase price and/or return any Share
Certificates not tendered or not accepted for payment (and accompanying
documents, as appropriate) to the addresses of the registered holder(s)
appearing under "Description of Shares Tendered". In the event that both the
Special Payment Instructions and the Special Delivery Instructions are
completed, please issue the check for the purchase price and/or return any Share
Certificates not tendered or not accepted for payment in the name of, and
deliver such check and/or return Share Certificates to, the person(s) so
indicated. The undersigned recognizes that Buyer has no obligation pursuant to
the Special Payment Instructions to transfer any Shares from the name of the
registered holder thereof if Buyer does not accept for payment any of the Shares
tendered hereby.
/ / Check here if any of the certificates representing Shares that you own have
been lost or destroyed and see Instruction 11.
Number of Shares represented by the lost or destroyed certificates:
<PAGE> 4
SPECIAL PAYMENT
INSTRUCTIONS
(See Instructions 1, 5, 6 and 7)
To be completed ONLY if Share Certificates not tendered or not accepted for
payment and/or the check for the purchase price of Shares accepted for payment
are to be issued in the name of someone other than the undersigned.
Issue / / check
/ / certificates to:
Name:_________________________________________________________________________
(Please Type or Print)
Address_______________________________________________________________________
______________________________________________________________________________
(Include Zip Code)
______________________________________________________________________________
(Tax Identification or Social Security No.)
(See Substitute Form W-9)
SPECIAL DELIVERY
INSTRUCTIONS
(See Instructions 1, 5, 6 and 7)
To be completed ONLY if Share Certificates not tendered or not accepted for
payment and/or the check for the purchase price of Shares accepted for payment
are to be sent to someone other than the undersigned or to the undersigned at an
address other than that shown above.
Mail / / check
/ / certificates to:
Name:_________________________________________________________________________
(Please Type or Print)
Address_______________________________________________________________________
______________________________________________________________________________
(Include Zip Code)
<PAGE> 5
IMPORTANT
SHAREHOLDER SIGN HERE AND COMPLETE SUBSTITUTE FORM W-9
------------------------------------------------------------------------
(Signature(s) of Shareholder(s))
Dated:_________ , 1996
(Must be signed by the registered holder(s) exactly as name(s) appear(s) on
the Share Certificate or on a security position listing or by person(s)
authorized to become registered holder(s) by certificates and documents
transmitted herewith. If signature is by trustee, executors, administrators,
guardians, attorneys-in-fact, agents, officers of corporations or others acting
in a fiduciary or representative capacity, please provide the following
information. See instruction 5.)
Name:__________________________________________________________________________
- -------------------------------------------------------------------------------
(Please Type or Print)
Capacity (Full Title):_________________________________________________________
Area Codes and Telephone Numbers:______________________________________________
Taxpayer Identification or Social Security No.:________________________________
GUARANTEE OF SIGNATURE(S)
(See Instructions 1 and 5)
Authorized Signature:__________________________________________________________
Name:__________________________________________________________________________
(Please Type or Print)
Title:_________________________________________________________________________
Name of Firm:__________________________________________________________________
Address:_______________________________________________________________________
(Include Zip Code)
Area Code and Telephone Numbers:_______________________________________________
<PAGE> 6
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. Signature Guarantees. Except as otherwise provided below, signatures on
this Letter of Transmittal must be guaranteed by a financial institution
(including most commercial banks, savings and loan associations and brokerage
houses) that is a participant in the Security Transfer Agents Medallion Program,
the New York Stock Exchange Medallion Signature Guarantee Program or the Stock
Exchange Medallion Program (an "Eligible Institution"), unless the Shares
tendered hereby are tendered (i) by the registered holder (which term, for
purposes of these Instructions, includes any participant in any of the
Book-Entry Transfer Facilities' systems whose name appears on a security
position listing as the owner of the Shares) of such Shares who has completed
neither the box entitled "Special Payment Instructions" nor the box entitled
"Special Delivery Instructions" herein or (ii) for the account of an Eligible
Institution. See Instruction 5. If the Share Certificates are registered in the
name of a person other than the signer of this Letter of Transmittal, or if
payment is to be made to, or Share Certificates for unpurchased Shares are to be
issued or returned to, a person other than the registered owner, then the
tendered certificates must be endorsed or accompanied by duly executed stock
powers, in either case signed exactly as the name or names of the registered
holders or owners appear on the certificates, with the signatures on the
certificates or stock powers guaranteed by an Eligible Institution as provided
herein. See Instruction 5 and 7.
2. Requirements of Tender. This Letter of Transmittal is to be used either
if Share Certificates are to be forwarded herewith or if tenders are to be made
pursuant to the procedures for tender by book-entry transfer set forth in
Section 2 of the Offer to Purchase. Share Certificates, or timely confirmation
(a "Book-Entry Confirmation") of a book-entry transfer of such Shares into the
Depositary's account at a Book-Entry Transfer Facility, as well as this Letter
of Transmittal (or a facsimile hereof), properly completed and duly executed,
with any required signature guarantees, or an Agent's Message (as defined in
Section 2 of the Offer to Purchase) in connection with a book-entry transfer and
any other documents required by this Letter of Transmittal, must be received by
the Depositary at one of its addresses set forth herein prior to the Expiration
Date. Shareholders whose Share Certificates are not immediately available or who
cannot deliver their Share Certificates and all other required documents to the
Depositary prior to the Expiration Date or who cannot complete the procedures
for delivery by book-entry transfer on a timely basis may tender their Shares by
properly completing and duly executing a Notice of Guaranteed Delivery pursuant
to the guaranteed delivery procedures set forth in Section 2 of the Offer to
Purchase. Pursuant to such procedure: (i) such tender must be made by or through
an Eligible Institution, (ii) a properly completed and duly executed Notice of
Guaranteed Delivery, substantially in the form made available by Buyer must be
received by the Depositary prior to the Expiration Date, and (iii) the Share
Certificates (or a Book-Entry Confirmation) representing all tendered Shares, in
proper form for transfer, together with a Letter of Transmittal (or a facsimile
thereof), properly completed and duly executed, with any required signature
guarantees (or, in the case of a book-entry transfer, an Agent's Message) and
any other documents required by this Letter of Transmittal, must be received by
the Depositary within three (3) trading days after the date of execution of such
Notice of Guaranteed Delivery, all as provided in Section 2 of the Offer to
Purchase. If Share Certificates are forwarded separately to the Depositary, a
properly completed and duly executed Letter of Transmittal (or a facsimile
thereof) must accompany each such delivery.
The method of delivery of Share Certificates, this Letter of Transmittal and
all other required documents, including delivery through any Book-Entry Transfer
Facility is at the option and sole risk of the tendering shareholder and the
delivery will be deemed made only when actually received by the Depositary. If
delivery is by mail, registered mail with return receipt requested, properly
insured, is recommended. In all cases, sufficient time should be allowed to
ensure timely delivery. The Notice of Guaranteed Delivery may be delivered by
hand to the Depositary or transmitted by facsimile transmission or mail to the
Depositary and must include a guarantee by an Eligible Institution in the form
set forth in such Notice of Guaranteed Delivery.
No alternative, conditional or contingent tenders will be accepted. All
tendering shareholders, by execution of this Letter of Transmittal (or a
facsimile thereof), waive any right to receive any notice of the acceptance of
their Shares for payment.
3. Inadequate Space. If the space provided herein under "Description of
Shares Tendered" is inadequate, the certificate numbers and/or the number of
Shares should be listed on a separate signed schedule attached hereto.
4. Partial Tenders (Not applicable to Book-Entry Shareholders). If fewer
than all the Shares represented by any Share Certificates delivered to the
Depositary herewith are to be tendered hereby, fill in the number of Shares
which are to be tendered in the box entitled "Number of Shares Tendered". In
such case, a new Share Certificate for the untendered Shares will be sent,
without expense, to the person(s) signing this Letter of Transmittal, unless
otherwise provided in the box entitled "Special Delivery Instructions" on this
Letter of Transmittal, as soon as practicable after the Expiration Date. All
Shares represented by certificate(s) delivered to the Depositary will be deemed
to have been tendered unless otherwise indicated.
5. Signatures on Letter of Transmittal, Stock Powers and Endorsements. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
tendered hereby, the signatures must correspond with the name(s) as written on
the face of the certificate(s) without alteration, enlargement or any change
whatsoever.
If any of the Shares tendered hereby are owned of record by two or more
joint owners, all such owners must sign this Letter of Transmittal.
If any of the tendered Shares are registered in different names on several
certificates, it will be necessary to complete, sign and submit as many separate
Letters of Transmittal as there are different registrations of certificates.
If this Letter of Transmittal or any certificates or stock powers are signed
by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a
corporation or other person acting in a fiduciary or representative capacity,
such person should so indicate when signing, and proper evidence satisfactory to
Buyer of such person's authority so to act must be submitted.
If any of the Shares tendered hereby are owned of record by two or more
joint owners, all such owners must sign this Letter of Transmittal.
<PAGE> 7
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares listed and transmitted hereby, no endorsements of certificates or
separate stock powers are required unless payment is to be made, or Share
Certificates not tendered or not purchased are to be issued or returned, to a
person other than the registered holder(s). Signatures on such certificates or
stock powers must be guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Shares evidenced by the certificate(s) listed and
transmitted hereby, the certificate(s) must be endorsed or accompanied by
appropriate stock powers, in either case signed exactly as the name(s) of the
registered holder(s) appear on the certificate(s). Signatures on such
certificate(s) or stock powers must be guaranteed by an Eligible Institution.
6. Stock Transfer Taxes. Except as set forth in this Instruction 6, Buyer
will pay or cause to be paid any stock transfer taxes with respect to the
transfer and sale of purchased Shares to it or its order pursuant to the Offer.
If however, payment of the purchase price is to be made to, or (in the
circumstances permitted hereby) if Share Certificates not tendered or not
purchased are to be registered in the name of, any person other than the
registered holder(s), or if tendered Share Certificates are registered in the
name of any person other than the person(s) signing this Letter of Transmittal,
the amount of any stock transfer taxes (whether imposed on the registered
holder(s) or such person) payable on account of the transfer to such person will
be deducted from the purchase price unless satisfactory evidence of the payment
of such taxes or exemption therefrom is submitted.
Except as provided in this Instruction 6, it will not be necessary for
transfer tax stamps to be affixed to the certificate(s) listed in this Letter of
Transmittal.
7. Special Payment and Delivery Instructions. If a check and/or Share
Certificates for unpurchased Shares is or are to be issued in, the name of a
person other than the signer of this Letter of Transmittal or if a check is to
be sent, and/or such Share Certificates are to be returned to someone other than
the signer of this Letter of Transmittal or to an address other than that shown
above, the appropriate boxes on this Letter of Transmittal should be completed.
8. Requests for Assistance or Additional Copies. Questions and requests for
assistance may be directed to the Information Agent at its address or telephone
number set forth above and additional copies of the Offer to Purchase, this
Letter of Transmittal and the Notice of Guaranteed Delivery may be obtained at
Buyer's expense from the Information Agent at its address set forth above or
from a broker, dealer, commercial bank or trust company.
9. Waiver of Conditions. Subject to the terms of the Reorganization
Agreement (as defined in the offer to Purchase) the conditions of the Offer may
be waived by Buyer, in whole or in part, at any time or from time to time in
Buyer's sole discretion.
10. Backup Withholding Tax. Each tendering shareholder is required to
provide the Depositary with a correct Taxpayer Identification Number ("TIN") on
Substitute Form W-9, which is provided under "Important Tax Information" below.
Failure to provide the information on the Substitute Form W-9 may subject the
tendering shareholder to 31% federal income tax backup withholding on the
payment of the purchase price. The box in Part 3 of the form may be checked if
the tendering shareholder has not been issued a TIN and has applied for a number
or intends to apply for a number in the near future. If the box in Part 3 is
checked and the Depositary is not provided with a TIN within 60 days, the
Depositary will withhold 31% of all payments of the purchase price, if any, made
thereafter pursuant to the Offer until a TIN is provided to the Depositary.
11. Lost, Destroyed or Stolen Certificates. If any certificate representing
Shares has been lost, destroyed or stolen, the shareholder should promptly
notify the Depositary by checking the box immediately preceding the special
payment/special delivery instructions and indicating the number of Shares lost.
The shareholder will then be instructed as to the steps that must be taken in
order to replace the certificate. This Letter of Transmittal and related
documents cannot be processed until the procedures for replacing lost or
destroyed certificates have been followed.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A FACSIMILE HEREOF), PROPERLY
COMPLETED AND DULY EXECUTED, TOGETHER WITH ANY REQUIRED SIGNATURE GUARANTEES
(OR, IN THE CASE OF A BOOK-ENTRY TRANSFER, AN AGENT'S MESSAGE) AND CERTIFICATES
OR BOOK-ENTRY CONFIRMATION AND ALL OTHER REQUIRED DOCUMENTS MUST BE RECEIVED BY
THE DEPOSITARY, OR A PROPERLY COMPLETED AND DULY EXECUTED NOTICE OF GUARANTEED
DELIVERY MUST BE RECEIVED BY THE DEPOSITARY, PRIOR TO THE EXPIRATION DATE.
IMPORTANT TAX INFORMATION
Under federal income tax law, a shareholder whose tendered Shares are
accepted for payment is required to provide the Depositary (as payer) with the
shareholder's correct TIN on Substitute Form W-9 below. If the shareholder is an
individual, the TIN is his or her social security number. The Certificate of
Awaiting Taxpayer Identification Number should be completed if the tendering
shareholder has not been issued a TIN and has applied for a number or intends to
apply for a number in the near future. Failure to furnish timely a correct TIN
or include all required information will subject the taxpayer to a $50 penalty
for each failure. There are civil and criminal penalties for giving false
information to avoid backup withholding. A shareholder who provides false
information may be subject to a civil penalty of up to $500 and a criminal
penalty, upon conviction, of a fine up to $1,000 or imprisonment of up to one
year, or both.
Certain shareholders (including, among others, all corporations and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements. For a foreign individual to qualify as an exempt recipient, that
shareholder must submit a statement, signed under penalties of perjury,
attesting to that individual's exempt status. Forms for such statements can be
obtained from the Depositary. See the enclosed Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9 for additional
instructions.
If (i) the shareholder does not furnish the Depositary with a TIN in the
required manner; (ii) the IRS notifies the Depositary that the TIN provided is
incorrect; or (iii) the shareholder is required, but fails, to certify it is not
subject to backup withholding, backup withholding will apply. If backup
withholding applies, the Depositary is required to withhold 31% of any payments
made to the shareholder. Backup withholding is not an additional tax. Rather,
the tax liability of persons subject to backup withholding will be credited by
the amount of tax withheld. If withholding results in an overpayment of taxes, a
refund may be obtained from the Internal Revenue Service.
<PAGE> 8
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup federal income tax withholding with respect to payment of
the purchase price for Shares purchased pursuant to the Offer, a shareholder
must provide the Depositary with his or her correct TIN by completing the
Substitute Form W-9 below, certifying that the TIN provided on Substitute Form
W-9 is correct (or that the shareholder is awaiting a TIN) and that (i) the
shareholder has not been notified by the Internal Revenue Service that he or she
is subject to backup withholding as a result of failure to report all interest
or dividends or (ii) the Internal Revenue Service has notified the shareholder
that he or she is no longer subject to backup withholding.
WHAT NUMBER TO GIVE THE DEPOSITARY
The shareholder is required to give the Depositary the social security
number or employer identification number of the record holder of the Shares
tendered hereby. If the Shares are in more than one name or are not in the name
of the actual owner, consult the enclosed Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9 for additional guidance on
which number to report.
<PAGE> 9
<TABLE>
<S> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------
PAYER'S NAME: UC ACQUISITION CORP.
- -----------------------------------------------------------------------------------------------------------------------------
SUBSTITUTE PART 1 -- PLEASE PROVIDE YOUR TIN IN THE BOX AT RIGHT AND ------------------------------
FORM W-9 CERTIFY BY SIGNING AND DATING BELOW. Social Security Number
OR
------------------------
Employer Identification
Number(s)
- -----------------------------------------------------------------------------------------------------------------------------
PART 2 -- Certification -- Under penalties of perjury, I
certify that:
(1) The number shown on this form is my correct Taxpayer Part 3 --
Identification Number (or I am waiting for a number to Awaiting TIN
be issued to me) and / /
(2) I am not subject to backup withholding because (a) I am
exempt from backup withholding or (b) I have not been notified ------------------
by the Internal Revenue Service (the "IRS") that I am
subject to backup withholding as a result of a failure to Part 4
report all interest or dividends or (c) the IRS has Exept TIN
notified me that I am no longer subject to backup / /
withholding.
----------------------------------------------------------------------------------------------
CERTIFICATION INSTRUCTIONS -- You must cross out item (2) in Part 2 above if you have been
Department of the Treasury notified by the IRS that you are subject to backup withholding because of under reporting
Internal Revenue Service interest or dividends on your tax returns. However, if after being notified by the IRS that
(IRS) you were subject to backup withholding you received another notification from the IRS stating
Payer's Request for that you are no longer subject to backup withholding, do not cross out such item (2). If you
Taxpayer Identification are exempt from backup withholding, check the box in Part 4 above. If you are awaiting your
Number (TIN) TIN number, check the box in Part 3 above.
- -----------------------------------------------------------------------------------------------------------------------------
SIGNATURE________________________________________________________ DATE___________________________, 1996
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS SUBSTITUTE FORM W-9 MAY RESULT IN
BACKUP WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE
OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL INFORMATION.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE
IF YOU CHECKED THE BOX IN PART 3 OF SUBSTITUTE FORM W-9
- --------------------------------------------------------------------------------
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification
number has not been issued to me, and either (a) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration Office or
(b) I intend to mail or deliver an application in the near future. I
understand that, if I do not provide a taxpayer identification number to the
Depositary within 60 days, 31% of all reportable payments made to me
thereafter will be withheld until I provide a number.
<TABLE>
<S> <C>
- -------------------------------------------- ------------------------------
Signature Date
</TABLE>
- ------------------------------------------------------------------------------
<PAGE> 1
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING COMMON SHARES
OF
UNIVAR CORPORATION
AT
$19.45 NET PER SHARE
BY
UC ACQUISITION CORP.
AN INDIRECT SUBSIDIARY OF
ROYAL PAKHOED N.V.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 8:00 P.M.,
NEW YORK CITY TIME, ON MONDAY, JULY 15, 1996
UNLESS OFFER IS EXTENDED.
June 7, 1996
To Brokers, Dealers, Banks,
Trust Companies and other Nominees:
We have been engaged by UC Acquisition Corp., a Washington corporation
("Buyer"), which is an indirect subsidiary of Royal Pakhoed N.V. (a translation
of Koninklijke Pakhoed N.V.), a publicly held limited liability company formed
and existing under the laws of The Netherlands ("Parent"), to act as Information
Agent in connection with Buyer's offer to purchase all outstanding common
shares, (the "Shares"), of Univar Corporation, a Washington corporation
("Company"), at $19.45 per Share, net to the seller in cash, upon the terms and
subject to the conditions set forth in Buyer's Offer to Purchase dated June 7,
1996 (the "Offer to Purchase") and in the related Letter of Transmittal (which,
together with any amendments or supplements thereto, collectively constitute the
"Offer"). Please furnish copies of the enclosed material to those of your
clients for whom you hold Shares registered in your name or in the name of your
nominee.
Enclosed herewith are copies of the following documents:
1. Offer to Purchase, dated June 7, 1996;
2. Letter of Transmittal to be used by shareholders of Company in
accepting the Offer;
3. A printed form of letter that may be sent to your clients for whose
account you hold Shares in your name or in the name of a nominee, with
space provided for obtaining such clients' instructions with regard to the
Offer;
4. Notice of Guaranteed Delivery;
5. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9;
6. Returned envelope addressed to the Depositary;
7. Schedule 14D-9 of Company; and
8. Letter of Chairman and President of Company to Company
Shareholders, dated June 7, 1996.
<PAGE> 2
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION DATE THAT NUMBER OF SHARES
THAT WOULD, WHEN AGGREGATED WITH THE SHARES ALREADY OWNED BY BUYER AND ITS
AFFILIATES, REPRESENT A MAJORITY OF ALL OUTSTANDING SHARES ON THE DATE OF
PURCHASE, AND (2) ALL GOVERNMENTAL APPROVALS FOR THE OFFER (AS DEFINED IN THE
OFFER TO PURCHASE) HAVING BEEN OBTAINED OR WAIVED BY PARENT AND BUYER AND
APPLICABLE LAWS COMPLIED WITH.
We urge you to contact your clients promptly. Please note that the Offer
and withdrawal rights will expire at 8:00 p.m., New York City time, on Monday,
July 15, 1996, unless extended.
Neither Buyer nor Parent will pay any fees or commissions to any broker or
dealer or other person (other than the Information Agent as described in the
Offer to Purchase) in connection with the solicitation of tenders of Shares
pursuant to the Offer. You will be reimbursed upon request for customary mailing
and handling expenses incurred by you in forwarding the enclosed offering
materials to your customers.
Additional copies of the enclosed material may be obtained by contacting us
at the respective address and telephone number set forth on the back cover of
the enclosed Offer to Purchase.
Very truly yours,
D.F. King & Co., Inc.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL RENDER YOU OR
ANY OTHER PERSON THE AGENT OF BUYER, PARENT, THE DEPOSITARY OR THE INFORMATION
AGENT OR AUTHORIZE YOU OR ANY OTHER PERSON TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION ON BEHALF OF ANY OF THEM WITH RESPECT TO THE OFFER NOT CONTAINED
IN THE OFFER TO PURCHASE OR THE LETTER OF TRANSMITTAL.
<PAGE> 1
EXHIBIT (A)(5)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING COMMON SHARES
OF
UNIVAR CORPORATION
AT
$19.45 NET PER SHARE
BY
UC ACQUISITION CORP.
AN INDIRECT SUBSIDIARY OF
ROYAL PAKHOED N.V.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 8:00 P.M.,
NEW YORK CITY TIME, ON MONDAY, JULY 15, 1996,
UNLESS THE OFFER IS EXTENDED.
To Our Clients:
Enclosed for your consideration is an Offer to Purchase dated June 7, 1996
(the "Offer to Purchase") and the related Letter of Transmittal (which, together
with any amendments or supplements thereto, collectively constitute the "Offer")
relating to the Offer by UC Acquisition Corp., a Washington corporation
("Buyer"), which is an indirect subsidiary of Royal Pakhoed N.V. (a translation
of Koninklijke Pakhoed N.V.), a limited liability company formed and existing
under the laws of The Netherlands ("Parent"), to purchase for cash all
outstanding common shares, (the "Shares"), of Univar Corporation, a Washington
corporation ("Company").
We are the holder of record of Shares held by us for your account. A TENDER
OF SUCH SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF RECORD AND PURSUANT TO
YOUR INSTRUCTION. THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR YOUR
INFORMATION ONLY AND CANNOT BE USED TO TENDER SHARES HELD BY US FOR YOUR
ACCOUNT.
We request instructions as to whether you wish to tender any of or all the
Shares held by us for your account, pursuant to the terms and conditions set
forth in the Offer.
Your attention is directed to the following:
1. The offer price is $19.45 per Share, net to the seller in cash,
upon the terms and subject to the conditions of the Offer.
2. The Offer is being made for all outstanding Shares.
3. THE OFFER AND WITHDRAWAL RIGHTS EXPIRE 8:00 P.M., NEW YORK CITY
TIME, ON MONDAY, JULY 15, 1996, UNLESS THE OFFER IS EXTENDED BY BUYER.
4. The Offer is conditioned upon, among other things, (1) there being
validly tendered and not withdrawn prior to the Expiration Date (as defined
in the Offer to Purchase) that number of Shares that would, when aggregated
with the Shares already owned by Buyer and its affiliates, represent a
majority of all outstanding Shares and (2) all Governmental Approvals (as
defined in the Offer to Purchase) for the Offer having been obtained or
waived by Parent and Buyer and applicable laws complied with.
5. Any stock transfer taxes applicable to a sale of Shares to Buyer
will be borne by Buyer, except as otherwise provided in Instruction 6 of
the Letter of Transmittal.
<PAGE> 2
Your instructions to us should be forwarded promptly to permit us to submit
a tender on your behalf prior to the expiration of the Offer.
If you wish to have us tender any or all the Shares held by us for your
account, please so instruct us by completing, executing, detaching and returning
to us the instruction form on the detachable part hereof. An envelope to return
your instructions to us is enclosed. If you authorize the tender of your Shares,
all such Shares will be tendered unless otherwise specified on the detachable
part hereof. Your instructions should be forwarded to us in ample time to permit
us to submit a tender on your behalf prior to the expiration of the Offer.
Payment for Shares accepted for payment pursuant to the Offer will in all
cases be made only after timely receipt by Chemical Mellon Shareholder Services,
LLC (the "Depositary"), of (a) certificates for (or a timely Book-Entry
Confirmation (as defined in the Offer to Purchase), with respect to such Shares,
(b) a Letter of Transmittal (or facsimile thereof), properly completed and duly
executed, with any required signature guarantees, or, in the case of a
book-entry transfer effected pursuant to the procedure set forth in Section 2 of
the Offer to Purchase, an Agent's Message, and (c) any other documents required
by the Letter of Transmittal. Accordingly, tendering shareholders may be paid at
different times depending upon when certificates for Shares or Book-Entry
Confirmations with respect to Shares and other required documents are actually
received by the Depositary.
In the event the Tender Offer is extended beyond July 31, 1996 the Offer
Price shall be increased by an amount equal to the product of the Offer Price
multiplied by the prime interest rate as announced by Bank of America NW, N.A.
(doing business as Seafirst Bank) in Seattle, Washington as in effect on August
1, 1996, multiplied by the quotient of the number of days that the Tender Offer
is extended after July 31, 1996, divided by 365. EXCEPT IN THE CASE OF AN
EXTENSION OF THE OFFER BEYOND JULY 31, 1996, UNDER NO CIRCUMSTANCES WILL
INTEREST BE PAID ON THE PURCHASE PRICE OF THE SHARES TO BE PAID BY BUYER.
The Offer is not being made to, nor will tenders be accepted from, or on
behalf of, holders of Shares in any jurisdiction in which the making or
acceptance of the Offer would not be in compliance with the laws of such
jurisdiction.
[Signature Block of Broker,]
Dealer, Bank, Trust Company
or other Nominee
<PAGE> 3
INSTRUCTIONS WITH RESPECT TO
THE OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING COMMON SHARES
OF
UNIVAR CORPORATION
The undersigned acknowledge(s) receipt of your letter, the Offer to
Purchase of UC Acquisition Corp. dated June 7, 1996 (the "Offer to Purchase")
and the related Letter of Transmittal relating to common shares of Univar
Corporation, a Washington corporation (the "Shares").
This will instruct you to tender the number of Shares indicated below held
by you for the account of the undersigned, on the terms and subject to the
conditions set forth in such Offer to Purchase and Letter of Transmittal.
<TABLE>
<S> <C>
Number of Shares to be Tendered:* Sign here
Shares
------------------------------------------------------
------------------------------------------------------
Signature(s)
------------------------------------------------------
------------------------------------------------------
(Please print name(s) and address(es))
Dated: , 1996
</TABLE>
- ---------------
* Unless otherwise indicated, it will be assumed that all your Shares are to be
tendered.
<PAGE> 1
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF COMMON SHARES
OF
UNIVAR CORPORATION
As set forth in Section 2 of the Offer to Purchase (as defined below), this
form or one substantially equivalent hereto must be used to accept the Offer (as
defined below) if certificates for common shares (the "Shares"), of Univar
Corporation, a Washington corporation ("Company") are not immediately available,
or if the procedure for book-entry transfer cannot be completed on a timely
basis or time will not permit all required documents to reach the Depositary
prior to the Expiration Date (as defined in the Offer to Purchase). This form
may be delivered by hand to the Depositary or transmitted by facsimile
transmission or mail to the Depositary and must include a guarantee by an
Eligible Institution (as defined in the Offer to Purchase). See Section 2 of the
Offer to Purchase.
TO: CHEMICAL MELLON SHAREHOLDER SERVICES, LLC, DEPOSITARY
<TABLE>
<S> <C>
Deliver by Mail: By Overnight Delivery:
Chemical Mellon Shareholder Services, LLC Chemical Mellon Shareholder Services, LLC
P.O. Box 817 Midtown Station Attn.: Reorg. Dept., First Floor
New York, NY 10018 85 Challenger Road
Ridgefield Park, NJ 07660
By Facsimile Transmission
For Guaranteed Delivery Only:
(201) 296-4293
Delivery by Hand: New York Drop:
First Interstate Bank of Washington 120 Broadway, 13th Floor
999 Third Avenue New York, NY 10271
Stock Transfer, 14th Floor
Seattle, Washington 98104
</TABLE>
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS, OR TRANSMISSION OF INSTRUCTIONS
VIA A FACSIMILE NUMBER, OTHER THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE A
VALID DELIVERY.
Information Agent:
D.F. King & Co., Inc.
77 Water Street
New York, New York 10005-4495
Call Toll Free: 1 (800) 735-3591
This form is not to be used to guarantee signatures. If a signature on a
Letter of Transmittal is required to be guaranteed by an Eligible Institution
under the instructions thereto, such signature guarantee must appear in the
applicable space provided in the signature box on the Letter of Transmittal.
<PAGE> 2
Ladies and Gentlemen:
The undersigned hereby tenders to UC Acquisition Corp., a Washington
corporation ("Buyer"), which is an indirect subsidiary of Royal Pakhoed N.V., (a
translation of Koninklijke Pakhoed N.V.) a publicly held limited liability
company formed and existing under the laws of The Netherlands, upon the terms
and subject to the conditions set forth in Buyer's Offer to Purchase dated June
7, 1996 (the "Offer to Purchase"), and the related Letter of Transmittal,
receipt of which is hereby acknowledged, the number of Shares (as such terms are
defined in the Offer to Purchase) set forth below, all pursuant to the
guaranteed delivery procedures set forth in Section 2 of the Offer to Purchase.
<TABLE>
<S> <C>
Number of Shares Name(s) of Record Holder(s):
Certificate Nos. (if available): PLEASE PRINT
(Check one box if Shares will be Address(es):
tendered by book-entry transfer)
/ / The Depository Trust Company ZIP CODE
/ / Philadelphia Depository Trust Company Area Code and
Account Number Tel. No.:
Dated:
</TABLE>
<PAGE> 3
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a participant in the Security Transfer Agent's Medallion
Program, the New York Stock Exchange Medallion Signature Guarantee Program or
the Stock Exchange Medallion Program, hereby guarantees to deliver to the
Depositary either the certificates representing the Shares tendered hereby, in
proper form for transfer, or a Book-Entry Confirmation with respect to such
Shares, in any such case together with a properly completed and duly executed
Letter of Transmittal (or facsimile thereof), with any required signature
guarantees, or an Agent's Message, and any other required documents within three
(3) trading days after the date hereof.
The Eligible Institution that completes this form must communicate the
guarantee to the Depositary and must deliver the Letter of Transmittal and
certificates for Shares to the Depositary within the time period shown herein.
Failure to do so could result in a financial loss to such Eligible Institution.
All terms used herein have the meanings set forth in the Offer to Purchase.
<TABLE>
<S> <C>
Name of Firm: --------------------------------------------
AUTHORIZED SIGNATURE
Address: Name:
PLEASE PRINT
Title:
- -----------------------------------------------
ZIP CODE
Area Code and
Tel No.: Dated:
</TABLE>
NOTE: DO NOT SEND CERTIFICATES FOR SHARES WITH THIS NOTICE; CERTIFICATES
FOR SHARES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL.
<PAGE> 1
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER. Social Security numbers have nine digits separated by two hyphens: i.e.,
000-00-0000. Employer identification numbers have nine digits separated by only
one hyphen: i.e., 00-0000000. The table below will help determine the number to
give the payer.
- -------------------------------------------------------------
- -------------------------------------------------------------
FOR THIS TYPE OF ACCOUNT:
- -------------------------------------------------------------
- -------------------------------------------------------------
1. An individual's
account
2. Two or more
individuals
(joint account)
3. Husband and wife
(joint account)
4. Custodian account of
a minor (Uniform
Gift to Minors Act)
5. Adult and minor
(joint account)
6. Account in the name
of guardian or
committee for a
designated ward,
minor, or
incompetent person
7. a. The usual
revocable savings
trust account
(grantor is also
trustee)
b. So-called trust
account that is
not a legal or
valid trust under
State law
- -------------------------------------------------------------
- -------------------------------------------------------------
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(4) Show the name of the owner.
(5) List first and circle the name of the valid trust, estate, or pension trust.
NOTE: IF NO NAME IS CIRCLED WHEN THERE IS MORE THAN ONE NAME, THE NUMBER WILL BE
CONSIDERED TO BE THAT OF THE FIRST NAME LISTED.
GIVE THE GIVE THE EMPLOYER
IDENTIFICATION
FOR THIS TYPE OF
SOCIAL SECURITY ACCOUNT: NUMBER OF --
NUMBER OF -- 8. Sole The Owner(4)
proprietorship
The individual account The legal entity (Do not
9. A valid furnish the
trust,
estate, or
penThe actual owner of the account or, identifying number of the personal
if combined funds, sion trust
any one of the representative or trustee unless
individual(s)
the legal entity itself
desigThe actual owner of the account is not
or,
nated in the account
if joint funds, title)(5)
either person(1)
10. Corporate
The minor(2) account The Corporation
11. Religious, The organization
charitable,
edu or
cational
organization
account The partnership
12. Partnership
account held
The adult or, if in
the minor is the the name of
only contributor, the business
the minor(1) The organization
13. Association,
club, or
The ward, minor, other
or incompetent tax-exempt
person(3) organization
14. A broker or
registered The broker or nominee
The nominee
grantor-trustee(1)
15. Account with
the
Department The public entity
of Agriculture
in the name
of
a public
entity (such
as a
State or local
The actual government,
owner(1) school
district or
prison) that
receives
agricultural
program
payments
<PAGE> 2
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
PAGE 2
OBTAINING A NUMBER
If you don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card, or Form
SS-4, Application for Employer Identification Number, at the local office of the
Social Security Administration or the Internal Revenue Service and apply for a
number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on ALL payments include the
following:
- A corporation.
- A financial institution.
- An organization exempt from tax under section 501(a), or an individual
retirement plan.
- The United States or any agency or instrumentality thereof.
- A State, the District of Columbia, a possession of the United States, or
any subdivision or instrumentality thereof.
- A foreign government, a political subdivision of a foreign government, or
any agency or instrumentality thereof.
- An international organization or any agency, or instrumentality thereof.
- A registered dealer in securities or commodities registered in the U.S. or
a possession of the U.S.
- A real estate investment trust.
- A common trust fund operated by a bank under section 584(a).
- An exempt charitable remainder trust, or a non-exempt trust described in
section 4947(a)(1).
- An entity registered at all times under the Investment Company Act of
1940.
- A foreign central bank of issue.
Payments of dividends and patronage dividends not generally subject to backup
withholding include the following:
- Payments to nonresident aliens subject to withholding under section 1441.
- Payments to partnership not engaged in a trade or business in the U.S. and
which have at least one nonresident partner.
- Payments of patronage dividends where the amount received is not paid in
money.
- Payments made by certain foreign organizations.
Payments of interest not generally subject to backup withholding include the
following:
- Payments of interest on obligations issued by individuals.
NOTE: You may be subject to backup withholding if this interest is $600 or
more and is paid in the course of the payer's trade or business and you
have not provided your correct taxpayer identification number to the
payer.
- Payments of tax-exempt interest (including exempt-interest dividends under
section 852).
- Payments described in section 6049(b)(5) to nonresident aliens.
- Payments on tax-free covenant bonds under section 1451.
- Payments made by certain foreign organizations.
EXEMPT PAYEES DESCRIBED ABOVE SHOULD FILE FORM W-9 TO AVOID POSSIBLE ERRONEOUS
BACKUP WITHHOLDING. FILE SUBSTITUTE FORM W-9 WITH THE PAYER, FURNISH YOUR
TAXPAYER IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, AND
RETURN IT TO THE PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE
DIVIDENDS, ALSO SIGN AND DATE THE FORM.
Certain payments other than interest, dividends, and patronage dividends that
are not subject to information reporting are also not subject to backup
withholding. For details, see the regulations under sections 6041, 6041A(a),
6045, and 6050A.
PRIVACY ACT NOTICE. Section 6109 requires most recipients of dividends,
interest, or other payments to give taxpayer identification numbers to payers
who must report the payments to IRS. IRS uses the numbers for identification
purposes. Payers must be given the numbers whether or not recipients are
required to file tax returns. Payers must generally withhold 31% of taxable
interest, dividends, and certain other payments to a payee who does not furnish
a taxpayer identification number to a payer. Certain penalties may also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER. If you fail
to furnish your taxpayer identification number to a payer, you are subject to a
penalty of $50 for each such failure unless your failure is due to reasonable
cause and not to willful neglect.
(2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING. If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION. Falsifying certifications or
affirmations may subject you to criminal penalties including fines and/or
imprisonment.
(4) FAILURE TO REPORT CERTAIN DIVIDEND AND INTEREST PAYMENTS. If you fail to
include any portion of an includible payment for interest, dividends or
patronage dividends in gross income and such failure is due to negligence, a
penalty of 20% is imposed on any portion of an underpayment attributable to that
failure.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE
SERVICE.
<PAGE> 1
Form W-8
(Rev. November 1992)
Department of the Treasury
Internal Revenue Service
CERTIFICATE OF FOREIGN STATUS
- -------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
NAME OF OWNER(if joint account, also give joint owner's name.)(See SPECIFIC INSTRUCTIONS.) U.S. TAXPAYER IDENTIFICATION
NUMBER (if any)
_________________________________________________________________________________________________________________________
PLEASE PERMANENT ADDRESS (See SPECIFIC INSTRUCTIONS.)(Include apt. or suite no.)
PRINT _________________________________________________________________________________________________________________________
OR City, province or state, postal code, and country
TYPE _________________________________________________________________________________________________________________________
CURRENT MAILING ADDRESS, if different from permanent address (include apt. or suite no., or P.O. box if mail is not
delivered to street address.)
_________________________________________________________________________________________________________________________
City, town or post office, state, and ZIP code (if foreign address, enter city, province or state, postal code,
and country.)
- ----------------------------------------------------------------------------------------------------------------------------------
List account information Account number Account type Account number Account type
here (Optional, see
SPECIFIC INSTRUCTIONS.)
- ----------------------------------------------------------------------------------------------------------------------------------
NOTICE OF CHANGE IN STATUS.--To notify the payer, mortgage interest recipient, broker, or barter exchange that you no longer
qualify for exemption, check here . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [ ]
IF YOU CHECK THIS BOX, REPORTING WILL BEGIN ON THE ACCOUNT(S) LISTED.
- ----------------------------------------------------------------------------------------------------------------------------------
CERTIFICATION.--(Check applicable box(es)). Under penalties of perjury, I certify that:
[ ] For INTEREST PAYMENTS, I am not a U.S. citizen or resident (or I am filing for a foreign corporation,
partnership, estate, or trust).
PLEASE [ ] For DIVIDENDS, I am not a U.S. citizen or resident (or I am filing for a foreign corporation, partnership,
SIGN estate, or trust).
HERE
[ ] For BROKER TRANSACTIONS or BARTER EXCHANGES, I am an exempt foreign person as defined in the
instructions below.
____________________________________________________________________ ____________________________________________
Signature Date
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
GENERAL INSTRUCTIONS
(Section references are to the Internal Revenue Code unless otherwise noted.)
PURPOSE
Use Form W-8 or a substitute form containing a substantially similar statement
to tell the payer, mortgage interest recipient, middleman, broker, or barter
exchange that you are a nonresident alien individual, foreign entity, or exempt
foreign person not subject to certain U.S. information return reporting or
backup withholding rules.
CAUTION: Form W-8 does not exempt the payee from the 30% (or lower treaty)
nonresident withholding rates.
NONRESIDENT ALIEN INDIVIDUAL
For income tax purposes, "nonresident alien individual" means an individual who
is neither a U.S. citizen nor resident. Generally, an alien is considered to be
a U.S. resident if:
- - The individual was a lawful permanent resident of the United States at any
time during the calendar year, that is, the alien held an immigrant visa (a
"green card"), or
- - The individual was physically present in the United States on:
(1) at least 31 days during the calendar year, and
(2) 183 days or more during the current year and the 2 preceding calendar
years (counting all the days of physical presence in the current year,
one-third the number of days of presence in the first preceding year, and only
one-sixth of the number of days in the second preceding year).
See PUB. 519, U.S. Tax Guide for Aliens, for more information on resident
and nonresident alien status.
NOTE: If you are a nonresident alien individual married to a U.S. citizen or
resident and have made an election under section 6013(g) or (h), you are
treated as a U.S. resident and MAY NOT use Form W-8.
EXEMPT FOREIGN PERSON
For purposes of this form, you are an "exempt foreign person" for a calendar
year in which:
1. You are a nonresident alien individual or a foreign corporation,
partnership, estate, or trust.
2. You are an individual who has not been, and plans not to be, present in
the United States for a total of 183 days or more during the calendar year, and
3. You are neither engaged, nor plan to be engaged during the year, in a U.S.
trade or business that has effectively connected gains from transactions with a
broker or barter exchange.
If you do not meet the requirements of 2 or 3 above, you may instead certify
on FORM 1001, Ownership, Exemption, or Reduced Rate Certificate, that your
country has a tax treaty with the United States that exempts your transactions
from U.S. tax.
FILING INSTRUCTIONS
WHEN TO FILE.--File Form W-8 or substitute form before a payment is made.
Otherwise, the payer may have to withhold and send part of the payment to the
Internal Revenue Service (see BACKUP WITHHOLDING below). This certificate
generally remains in effect for three calendar years. However, the payer may
require you to file a new certificate each time a payment is made to you.
WHERE TO FILE.--File this form with the payer of the qualifying income who is
the withholding agent (see WITHHOLDING AGENT on page 2). Keep a copy for your
own records.
BACKUP WITHHOLDING
A U.S. taxpayer identification number or Form W-8 or substitute form must be
given to the payers of certain income. If a taxpayer identification number or
Form W-8 or substitute form is not provided or the wrong taxpayer
identification number is provided, these payers may have to withhold 20% of
each payment or transaction. This is called backup withholding.
NOTE: On January 1, 1993, the backup withholding rate increases from 20% to 31%.
Reportable payments subject to backup withholding rules are:
- - Interest payments under section 6049(a).
- - Dividend payments under sections 6042(a) and 6044.
- - Other payments (i.e., royalties and payments from brokers and barter
exchanges) under sections 6041, 60941A(a), 6045, 6050A, and 6050N.
If backup withholding occurs, an exempt foreign person who is a nonresident
alien individual may get a refund by filing FORM 1040NR, U.S. Nonresident Alien
Income Tax Return, with the Internal Revenue
(Continued on back.)
- --------------------------------------------------------------------------------
Cat. No. 10230M Form W-8 (Rev. 11-82)
21
<PAGE> 2
(Form W-8 (Rev. 11-92) Page 2
- ------------------------------------------------------------------------------
Service Center, Philadelphia, PA 19255, even if filing the return is not
otherwise required.
U.S. TAXPAYER IDENTIFICATION NUMBER
The Internal Revenue law requires that certain income be reported to the
Internal Revenue Service using a U.S. taxpayer identification number (TIN).
This number can be a social security number assigned to individuals by the
Social Security Administration or an employer identification number assigned to
businesses and other entities by the Internal Revenue Service.
Payments to account holders who are foreign persons (nonresident alien
individuals, foreign corporations, partnerships, estates, or trusts) generally
are not subject to U.S. reporting requirements. Also, foreign persons are not
generally required to have a TIN, nor are they subject to any backup
withholding because they do not furnish a TIN to a payer or broker.
However, foreign persons with income effectively connected with a trade or
business in the United States (income subject to regular (graduated) income
tax), must have a TIN. To apply for a TIN, use FORM SS-4, Application for
Employer Identification Number, available from local Internal Revenue Service
offices, or FORM SS-6, Application for a Social Security Card, available from
local Social Security Administration offices.
SPECIAL RULES
MORTGAGE INTEREST.--For purposes of the reporting rules, mortgage interest is
interest paid on a mortgage to a person engaged in a trade or business
originating mortgages in the course of that trade or business. A mortgage
interest recipient is one who receives interest on a mortgage that was acquired
in the course of a trade or business.
Mortgage interest is not subject to backup withholding rules, but is subject
to reporting requirements under section 6050H. Generally, however, the
reporting requirements do not apply if the payer of record is a nonresident
alien individual who pays interest on a mortgage not secured by real property
in the United States. Use Form W-8 or substitute form to notify the mortgage
interest recipient that the payer is a nonresident alien individual.
PORTFOLIO INTEREST.--Generally, portfolio interest paid to a nonresident alien
individual or foreign partnership, estate, or trust is not subject to backup
withholding rules. However, if interest is paid on portfolio investments to a
beneficial owner that is neither a financial institution nor a member of a
clearing organization, Form W-8 or substitute form is required.
REGISTERED OBLIGATIONS NOT TARGETED TO FOREIGN MARKETS qualify as portfolio
interest not subject to 30% withholding, but require the filing of Form W-8 or
substitute form. See INSTRUCTIONS TO WITHHOLDING AGENTS on this page for
reporting rules.
See PUB. 516, Withholding of Tax on Nonresident Aliens and Foreign
Corporations, for REGISTERED OBLIGATIONS TARGETED TO FOREIGN MARKETS and when
Form W-8 or substitute form is not required on these payments.
BEARER OBLIGATIONS.--The interest from bearer obligations targeted to foreign
markets is treated as portfolio interest and is not subject to 30% withholding.
Form W-8 or substitute form is not required.
DIVIDENDS.--Any distribution or payment of dividends by a U.S. corporation sent
to a foreign address is subject to the 30% (or lower treaty) withholding rate,
but is not subject to backup withholding. Also, there is no backup withholding
on dividend payments made to a foreign person by a foreign corporation.
However, the 30% withholding (or lower treaty) rate applies to dividend
payments made to a foreign person by a foreign corporation if:
- - 25% or more of the foreign corporation's gross income for the three
preceding taxable years was effectively connected with a U.S. trade or
business, and
- - The corporation was not subject to the branch profits tax because of an
income tax treaty (see section 884(e)).
If a foreign corporation makes payments to another foreign corporation, the
recipient must be a qualified resident of its country of residence to benefit
from that country's tax treaty.
BROKER OR BARTER EXCHANGES.--Income from transactions with a broker or barter
exchanges is subject to reporting rules and backup withholding unless Form W-8
or substitute form is filed to notify the broker or barter exchange that you
are an exempt foreign person as defined on page 1.
SPECIFIC INSTRUCTIONS
NAME OF OWNER.--If Form W-8 is being filed for portfolio interest, enter the
name of the beneficial owner.
U.S. TAXPAYER IDENTIFICATION NUMBER.--If you have a U.S. taxpayer identification
number, enter your number in this space (see the discussion earlier).
PERMANENT ADDRESS.--Enter your complete address in the country where you reside
permanently for income tax purposes.
<TABLE>
<CAPTION>
IF YOU ARE: SHOW THE ADDRESS OF:
<S> <C>
An individual Your permanent residence
A partnership Principal office
or corporation
An estate or trust Permanent residence or principal office
of any fiduciary
</TABLE>
Also show your current mailing address if it differs from your permanent
address.
ACCOUNT INFORMATION (OPTIONAL).--If you have more than one account (savings,
certificate of deposit, pension, IRA, etc.) with the same payer, list all
account numbers and types on one Form W-8 or substitute form unless your payer
requires you to file a separate certificate for each account.
If you have MORE THAN ONE PAYER, file a separate Form W-8 with each payer.
SIGNATURE.--If only one foreign person owns the account(s) listed on this form,
that foreign person should sign the Form W-8.
If each owner of a joint account is a foreign person, EACH should sign a
separate Form W-8.
NOTICE OF CHANGE IN STATUS.--If you have become a U.S. citizen or resident after
you have filed Form W-8 or substitute form, or you cease to be an exempt
foreign person, you must notify the payer in writing within 30 days of your
change in status.
To notify the payer, you may check the box in the space provided on this
form or use the method prescribed by the payer.
Reporting will then begin on the account(s) listed and backup withholding
may also begin unless you certify to the payer that:
(1) The U.S. taxpayer identification number you have given is correct, AND
(2) The Internal Revenue Service has not notified you that you are subject
to backup withholding because you failed to report certain income.
You may use FORM W-9, Request for Taxpayer Identification Number and
Certification, to make these certifications.
If an account is no longer active, you do not have to notify a payer of your
change in status unless you also have another account with the same payer that
is still active.
FALSE CERTIFICATE.--If you file a false certificate when you are not entitled
to the exemption from withholding or reporting, you may be subject to fines
and/or imprisonment under U.S. perjury laws.
INSTRUCTIONS TO WITHHOLDING AGENTS
WITHHOLDING AGENT.--Generally, the person responsible for payment of the items
discussed above to a nonresident alien individual or foreign entity is the
withholding agent (see Pub. 515).
RETENTION OF STATEMENT.--Keep Form W-8 or substitute form in you records for at
least four years following the end of the calendar year during which the
payment is paid or collected.
PORTFOLIO INTEREST.--Although registered obligations not targeted to foreign
markets are not subject to 30% withholding, you must file FORM 1042S, Foreign
Person's U.S. Source Income Subject to Withholding, to report the interest
payment. Both Form 1042S and a copy of Form W-8 or substitute form must be
attached to FORM 1042, Annual Withholding Tax Return for U.S. Source Income of
Foreign Persons.
22
<PAGE> 1
FOR RELEASE: IMMEDIATE
Univar Corporation
6100 Carillon Point
Kirkland, WA 98033
Contact: Gary E. Pruitt
206-889-3440
UNIVAR ANNOUNCES AGREEMENT TO MERGE WITH ROYAL PAKHOED N.V.
KIRKLAND, WASHINGTON, June 3, 1996 . . . Univar Corporation (NYSE:UVX)
announced today that it has entered into an agreement to merge with a subsidiary
of Royal Pakhoed N.V., a Netherlands limited liability company. Pakhoed and its
affiliates currently own approximately 28% of Univar's common stock. The merger
will be preceded by a cash tender offer for all the outstanding common shares of
Univar at a price of $19.45 per common share. The tender offer will be initiated
by UC Acquisition Corp., a subsidiary of Pakhoed which has been created for this
transaction.
Univar's Board of Directors has unanimously endorsed the offer and
recommends that its shareholders accept the offer. The Board also has
unanimously approved the merger agreement.
Univar has approximately 21,700,000 shares outstanding, giving the
transaction a total equity value of approximately $425 million. Pakhoed has
entered into agreements with The Dow Chemical Company and certain other
shareholders to tender approximately 5.1 million shares (or approximately 23% of
Univar's outstanding shares). These shares, together with shares currently held
by Pakhoed and its affiliates, represent in excess of 51% of Univar's
outstanding shares. Pakhoed intends to finance the offer and merger from
existing lines of credit and cash on hand.
"The offer represents an excellent value for our shareholders, and we
are also confident that Pakhoed will be a good owner and manager for both the
business and our employees," said James H. Wiborg, Chairman of the Univar Board.
Schroder Wertheim & Co. Incorporated acted
<PAGE> 2
as financial advisor to Univar and has provided an opinion to the Univar Board
that the offer is fair, from a financial point of view, to the shareholders of
Univar other than Pakhoed.
"With its worldwide logistic operations on the one hand, and Univar's
strength in chemical distribution on the other, Pakhoed positions itself as
a truly unique business partner for the chemical industry," said Klaas Westdijk,
Chairman of Pakhoed's Board of Management. "Through our complementary resources,
we can deliver significant benefits to our customers and suppliers in a broad
range of areas" added Paul H. Hough, Univar's President and Chief Executive
Officer.
The terms and conditions of the tender offer will be set forth in
offering documents expected to be filed with the Securities and Exchange
Commission not later than June 7, 1996. This filing will include conditions
relating to the acquisition of a majority of the outstanding shares of Univar,
on a fully diluted basis, including shares which are already owned by Pakhoed.
The filing also will contain information relating to certain governmental
approvals to be obtained prior to the completion of the offer and merger. The
agreement to merge will be filed with these documents. The merger agreement also
permits the Board, in the exercise of its fiduciary duties, to consider other
offers or indications of interest to be acquired, to provide information to the
acquirer, and after notice and satisfaction of other requirements, enter into an
agreement to be acquired by a party other than Pakhoed.
Univar is a Washington corporation, engaged in the distribution of
industrial, agricultural and pest control chemicals and related products and
services. Its shares are traded on the New York Stock Exchange under the symbol
"UVX." It conducts its operation in the United States, Canada and Europe.
Pakhoed is a limited liability company formed under the laws of the
Netherlands and operates numerous tank storage facilities in Europe, the United
States and Asia for storage of chemicals and oil, and conducts worldwide
shipping and distribution operations, primarily in Europe. Pakhoed's shares are
traded on the Amsterdam and London Stock Exchanges.
<PAGE> 1
EXHIBIT 99.(E)(1)
SCHEDULE II
THE FOLLOWING IS REPRODUCED FROM THE WASHINGTON BUSINESS CORPORATION ACT.
DISSENTERS' RIGHTS
23B.13.010 DEFINITIONS. -- As used in this chapter:
(1) "Corporation" means the issuer of the shares held by a dissenter before
the corporate action, or the surviving or acquiring corporation by merger or
share exchange of that issuer.
(2) "Dissenter" means a shareholder who is entitled to dissent from
corporate action under RCW 23B.13.020 and who exercises that right when and in
the manner required by RCW 23B.13.200 through 23B.13.280.
(3) "Fair value" with respect to a dissenter's shares means the value of
the shares immediately before the effective date of the corporate action to
which the dissenter objects, excluding any appreciation or depreciation in
anticipation of the corporate action unless exclusion would be inequitable.
(4) "Interest" means interest from the effective date of the corporate
action until the date of payment, at the average rate currently paid by the
corporation on its principal bank loans or, if none, at a rate that is fair and
equitable under all the circumstances.
(5) "Record shareholder" means the person in whose name shares are
registered in the records of a corporation or the beneficial owner of shares to
the extent of the rights granted by a nominee certificate on file with a
corporation.
(6) "Beneficial shareholder" means the person who is a beneficial owner of
shares held in a voting trust or by a nominee as the record shareholder.
(7) "Shareholder" means the record shareholder or the beneficial
shareholder.
23B.13.020 RIGHT TO DISSENT.
(1) A shareholder is entitled to dissent from, and obtain payment of the
fair value of the shareholder's shares in the event of any of the following
corporate actions:
(a) Consummation of a plan of merger to which the corporation is a
party (i) if shareholder approval is required for the merger by RCW
23B.11.030, 23B.11.080, or the articles of incorporation and the
shareholder is entitled to vote on the merger, or (ii) if the corporation
is a subsidiary that is merged with its parent under RCW 23B.11.040;
(b) Consummation of a plan of share exchange to which the corporation
is a party as the corporation whose shares will be acquired, if the
shareholder is entitled to vote on the plan;
(c) Consummation of a sale or exchange of all, or substantially all,
of the property of the corporation other than in the usual and regular
course of business, if the shareholder is entitled to vote on the sale or
exchange, including a sale in dissolution, but not including a sale
pursuant to court order or a sale for cash pursuant to a plan by which all
or substantially all of the net proceeds of the sale will be distributed to
the shareholders within one year after the date of sale;
(d) An amendment of the articles of incorporation that materially
reduces the number of shares owned by the shareholder to a fraction of a
share if the fractional share so created is to be acquired for cash under
RCW 23B.06.040; or
(e) Any corporate action taken pursuant to a shareholder vote to the
extent the articles of incorporation, bylaws, or a resolution of the board
of directors provides that voting or nonvoting shareholders are entitled to
dissent and obtain payment for their shares.
II-1
<PAGE> 2
(2) A shareholder entitled to dissent and obtain payment for the
shareholder's shares under this chapter may not challenge the corporate action
creating the shareholder's entitlement unless the action fails to comply with
the procedural requirements imposed by this title, RCW 25.10.900 through
25.10.955, the articles of incorporation, or the bylaws, or is fraudulent with
respect to the shareholder or the corporation.
(3) The right of a dissenting shareholder to obtain payment of the fair
value of the shareholder's shares shall terminate upon the occurrence of any one
of the following events:
(a) The proposed corporate action is abandoned or rescinded;
(b) A court having jurisdiction permanently enjoins or sets aside the
corporate action; or
(c) The shareholder's demand for payment is withdrawn with the written
consent of the corporation. (Last amended by Ch. 269, L. '91, eff.
7-28-91.)
23B.13.030 DISSENT OF NOMINEES AND BENEFICIAL OWNERS.
(1) A record shareholder may assert dissenters' rights as to fewer than all
the shares registered in the shareholder's name only if the shareholder dissents
with respect to all shares beneficially owned by any one person and notifies the
corporation in writing of the name and address of each person on whose behalf
the shareholder asserts dissenters' rights. The rights of a partial dissenter
under this subsection are determined as if the shares as to which the dissenter
dissents and the dissenter's other shares were registered in the names of
different shareholders.
(2) A beneficial shareholder may assert dissenters' rights as to shares
held on the beneficial shareholder's behalf only if:
(a) The beneficial shareholder submits to the corporation the record
shareholder's written consent to the dissent not later than the time the
beneficial shareholder asserts dissenters' rights; and
(b) The beneficial shareholder does so with respect to all shares of
which such shareholder is the beneficial shareholder or over which such
shareholder has power to direct the vote.
23B.13.200 NOTICE OF DISSENTERS' RIGHTS.
(1) If proposed corporate action creating dissenters' rights under RCW
23B.13.020 is submitted to a vote at a shareholders' meeting, the meeting notice
must state that shareholders are or may be entitled to assert dissenters' rights
under this chapter and be accompanied by a copy of this chapter.
(2) If corporate action creating dissenters' rights under RCW 23B.13.020 is
taken without a vote of shareholders, the corporation, within ten days after the
effective date of such corporate action, shall notify in writing all
shareholders entitled to assert dissenters' rights that the action was taken and
send them the dissenters' notice described in RCW 23B.13.220.
23B.13.210 NOTICE OF INTENT TO DEMAND PAYMENT.
(1) If proposed corporate action creating dissenters' rights under RCW
23B.13.020 is submitted to a vote at a shareholders' meeting, a shareholder who
wishes to assert dissenters' rights must (a) deliver to the corporation before
the vote is taken written notice of the shareholder's intent to demand payment
for the shareholder's shares if the proposed action is effected, and (b) not
vote such shares in favor of the proposed action.
(2) A shareholder who does not satisfy the requirements of subsection (1)
of this section is not entitled to payment for the shareholder's shares under
this chapter.
II-2
<PAGE> 3
23B.13.220 DISSENTERS' NOTICE.
(1) If proposed corporate action creating dissenters' rights under RCW
23B.13.020 is authorized at a shareholders' meeting, the corporation shall
deliver a written dissenters' notice to all shareholders who satisfied the
requirements of RCW 23B.13.210.
(2) The dissenters' notice must be sent within ten days after the effective
date of the corporate action, and must:
(a) State where the payment demand must be sent and where and when
certificates for certificated shares must be deposited;
(b) Inform holders of uncertificated shares to what extent transfer of
the shares will be restricted after the payment demand is received;
(c) Supply a form for demanding payment that includes the date of the
first announcement to news media or to shareholders of the terms of the
proposed corporate action and requires that the person asserting
dissenters' rights certify whether or not the person acquired beneficial
ownership of the shares before that date;
(d) Set a date by which the corporation must receive the payment
demand, which date may not be fewer than thirty nor more than sixty days
after the date the notice in subsection (1) of this section is delivered;
and
(e) Be accompanied by a copy of this chapter.
23B.13.230 DUTY TO DEMAND PAYMENT.
(1) A shareholder sent a dissenters' notice described in RCW 23B.13.220
must demand payment, certify whether the shareholder acquired beneficial
ownership of the shares before the date required to be set forth in the
dissenters' notice pursuant to RCW 23B.13.220(2)(c), and deposit the
shareholder's certificates in accordance with the terms of the notice.
(2) The shareholder who demands payment and deposits the shareholder's
share certificates under subsection (1) of this section retains all other rights
of a shareholder until the proposed corporate action is effected.
(3) A shareholder who does not demand payment or deposit the shareholder's
share certificates where required, each by the date set in the dissenters'
notice, is not entitled to payment for the shareholder's shares under this
chapter.
23B.13.240 SHARE RESTRICTIONS.
(1) The corporation may restrict the transfer of uncertificated shares from
the date the demand for their payment is received until the proposed corporate
action is effected or the restriction is released under RCW 23B.13.260.
(2) The person for whom dissenters' rights are asserted as to
uncertificated shares retains all other rights of a shareholder until the
effective date of the proposed corporate action.
23B.13.250 PAYMENT.
(1) Except as provided in RCW 23B.13.270, within thirty days of the later
of the effective date of the proposed corporate action, or the date the payment
demand is received, the corporation shall pay each dissenter who complied with
RCW 23B.13.230 the amount the corporation estimates to be the fair value of the
shareholder's shares, plus accrued interest.
II-3
<PAGE> 4
(2) The payment must be accompanied by:
(a) The corporation's balance sheet as of the end of a fiscal year
ending not more than sixteen months before the date of payment, an income
statement for that year, a statement of changes in shareholders' equity for
that year, and the latest available interim financial statements, if any;
(b) An explanation of how the corporation estimated the fair value of
the shares;
(c) An explanation of how the interest was calculated;
(d) A statement of the dissenter's right to demand payment under RCW
23B.13.280; and
(e) A copy of this chapter.
23B.13.260 FAILURE TO TAKE ACTION.
(1) If the corporation does not effect the proposed action within sixty
days after the date set for demanding payment and depositing share certificates,
the corporation shall return the deposited certificates and release any transfer
restrictions imposed on uncertificated shares.
(2) If after returning deposited certificates and releasing transfer
restrictions, the corporation wishes to undertake the proposed action, it must
send a new dissenters' notice under RCW 23B.13.220 and repeat the payment demand
procedure.
23B.13.270 AFTER-ACQUIRED SHARES.
(1) A corporation may elect to withhold payment required by RCW 23B.13.250
from a dissenter unless the dissenter was the beneficial owner of the shares
before the date set forth in the dissenters' notice as the date of the first
announcement to news media or to shareholders of the terms of the proposed
corporate action.
(2) To the extent the corporation elects to withhold payment under
subsection (1) of this section, after taking the proposed corporate action, it
shall estimate the fair value of the shares, plus accrued interest, and shall
pay this amount to each dissenter who agrees to accept it in full satisfaction
of the dissenter's demand. The corporation shall send with its offer an
explanation of how it estimated the fair value of the shares, an explanation of
how the interest was calculated, and a statement of the dissenter's right to
demand payment under RCW 23B.13.280.
23B.13.280 PROCEDURE IF SHAREHOLDER DISSATISFIED WITH PAYMENT OR OFFER.
(1) A dissenter may notify the corporation in writing of the dissenter's
own estimate of the fair value of the dissenter's shares and amount of interest
due, and demand payment of the dissenter's estimate, less any payment under RCW
23B.13.250, or reject the corporation's offer under RCW 23B.13.270 and demand
payment of the dissenter's estimate of the fair value of the dissenter's shares
and interest due, if:
(a) The dissenter believes that the amount paid under RCW 23B.13.250
or offered under RCW 23B.13.270 is less than the fair value of the
dissenter's shares or that the interest due is incorrectly calculated;
(b) The corporation fails to make payment under RCW 23B.13.250 within
sixty days after the date set for demanding payment; or
(c) The corporation does not effect the proposed action and does not
return the deposited certificates or release the transfer restrictions
imposed on uncertificated shares within sixty days after the date set for
demanding payment.
(2) A dissenter waives the right to demand payment under this section
unless the dissenter notifies the corporation of the dissenter's demand in
writing under subsection (1) of this section within thirty days after the
corporation made or offered payment for the dissenter's shares.
II-4
