<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 20, 1996
REGISTRATION NO.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
STATIA TERMINALS INTERNATIONAL N.V.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
NETHERLANDS ANTILLES 4226 52-2003102
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
</TABLE>
------------------------
TUMBLEDOWN DICK BAY
ST. EUSTATIUS, NETHERLANDS ANTILLES
(011) 5993-82300
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
STATIA TERMINALS CANADA, INCORPORATED
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
NOVA SCOTIA, CANADA 4226 98-0164788
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
</TABLE>
------------------------
3817 PORT MALCOLM ROAD
PORT HAWKESBURY, NOVA SCOTIA B0E2V0
(902) 625-1711
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
CT CORPORATION SYSTEM
1633 BROADWAY
NEW YORK, NEW YORK 10019
(212) 664-1666
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
------------------------
Copies to:
<TABLE>
<S> <C> <C>
DAVID B. PITTAWAY JACK R. PINE, ESQ. JOHN W. ERICKSON, ESQ.
CASTLE HARLAN, INC. STATIA TERMINALS, INC. WHITE & CASE
150 EAST 58TH STREET, 37TH FL. 701 WARRENVILLE ROAD 1155 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10155 SUITE 275 NEW YORK, NEW YORK 10036-2787
LISLE, ILLINOIS 60532-1376
(212) 644-8600 (630) 435-9540 (212) 819-8644
</TABLE>
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the effective date of this Registration Statement.
If any of the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. / /
------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
TITLE OF EACH NOTE AMOUNT TO BE PROPOSED OFFERING PROPOSED AGGREGATE AMOUNT OF
OF SECURITIES TO BE REGISTERED REGISTERED PRICE PER NOTE(1) OFFERING PRICE(1) REGISTRATION FEE
<S> <C> <C> <C> <C>
11 3/4% First Mortgage Notes due 2003, Series
B................................................ $135,000,000 100% $135,000,000 $40,909.09
Guarantees of each of the
Subsidiary Guarantors(2)......................... (3) (3) (3) None (3)
</TABLE>
(1) In accordance with Rule 457(f)(2), the registration fee is calculated based
on the book value, which has been computed as of December 11, 1996, of the
outstanding 11 3/4% First Mortgage Notes due 2003 of Statia Terminals
International N.V. and Statia Terminals Canada, Incorporated to be cancelled
in the exchange transaction hereunder.
(2) The 11 3/4% First Mortgage Notes due 2003 of Statia Terminals International
N.V. and Statia Terminals Canada, Incorporated being registered will be
guaranteed by each of Statia Terminals International N.V.'s and Statia
Terminals Canada, Incorporated's subsidiaries: Statia Terminals Corporation
N.V., Statia Terminals N.V., Saba Trustcompany N.V., Bicen Development
Corporation N.V., Point Tupper Marine Services Limited, Statia Terminals
Delaware, Inc., Statia Terminals, Inc., Statia Terminals Southwest, Inc.,
W.P. Company, Inc., Seven Seas Steamship Company, Inc., Seven Seas Steamship
Company (Sint Eustatius) N.V., Statia Laboratory Services N.V., Statia Tugs
N.V. and Statia Delaware Holdco II, Inc.
(3) No additional consideration will be paid by the recipients of the 11 3/4%
First Mortgage Notes due 2003 for the Guarantees. Pursuant to Rule 457(n)
under the Securities Act of 1933, no separate fee is payable for the
Guarantees.
------------------------
The Registrants hereby amend this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrants
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
OTHER REGISTRANTS
<TABLE>
<CAPTION>
ADDRESS, INCLUDING ZIP
CODE
PRIMARY STANDARD IRS AND TELEPHONE NUMBER
INDUSTRIAL EMPLOYER INCLUDING AREA CODE, OF
JURISDICTION OF CLASSIFICATION IDENTIFICATION PRINCIPAL EXECUTIVE
NAME OF CORPORATION INCORPORATION CODE NUMBER NUMBER OFFICE
- ------------------------- -------------------- ---------------- ------------------- -------------------------
<S> <C> <C> <C> <C>
Statia Terminals Netherlands Antilles 4226 Not Applicable Tumbledown Dick Bay
Corporation N.V........ St. Eustatius,
Netherlands Antilles
(011) 5993-82300
Statia Terminals N.V..... Netherlands Antilles 4226 Application Pending Tumbledown Dick Bay
St. Eustatius,
Netherlands Antilles
(011) 5993-82300
Saba Trustcompany N.V.... Netherlands Antilles 4226 Not Applicable Tumbledown Dick Bay
St. Eustatius,
Netherlands Antilles
(011) 5993-82300
Bicen Development Netherland Antilles 4226 Not Applicable Tumbledown Dick Bay
Corporation N.V........ St. Eustatius,
Netherlands Antilles
(011) 5993-82300
Point Tupper Marine Nova Scotia, Canada 4226 Not Applicable 3817 Port Malcolm Road
Services Limited....... Port Hawkesbury, Nova
Scotia B0E2V0
(902) 625-1711
Statia Terminals Delaware 4226 13-3917764 800 Fairway Drive
Delaware, Inc.......... Suite 295
Deerfield Beach, FL 33441
(954) 698-0705
Statia Terminals, Inc.... Delaware 4226 59-2317192 800 Fairway Drive
Suite 295
Deerfield Beach, FL 33441
(954) 698-0705
Statia Terminals Texas 4226 74-2424152 Highway 48
Southwest, Inc......... HC 70, Box 88
Brownsville, TX 78521
(210) 831-3531
W.P. Company, Inc........ Delaware 4226 65-0299159 800 Fairway Drive
Suite 295
Deerfield Beach, FL 33441
(954) 698-0705
Seven Seas Steamship Florida 4226 65-0648169 1350 E. Newport Center
Company, Inc........... Drive
Suite 201
Deerfield Beach, FL 33442
(954) 481-8401
Seven Seas Steamship
Company Netherland Antilles 4226 Not Applicable Jeems No. 4
(Sint Eustatius) St. Eustatius,
N.V.................... Netherlands Antilles
(011) 5993-82510
Statia Laboratory Netherland Antilles 4226 Not Applicable Tumbledown Dick Bay
Services N.V........... St. Eustatius,
Netherlands Antilles
(011) 5993-82300
Statia Tugs N.V.......... Netherland Antilles 4226 Not Applicable Tumbledown Dick Bay
St. Eustatius,
Netherlands Antilles
(011) 5993-82300
Statia Delaware Holdco Delaware 4226 13-3917761 800 Fairway Drive
II, Inc................ Suite 295
Deerfield Beach, FL 33441
(954) 698-0705
</TABLE>
2
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY JURISDICTION IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL
PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH
JURISDICTION.
PROSPECTUS
SUBJECT TO COMPLETION, DATED DECEMBER 20, 1996
[LOGO] STATIA TERMINALS INTERNATIONAL N.V.
STATIA TERMINALS CANADA, INCORPORATED
OFFER TO EXCHANGE
11 3/4% FIRST MORTGAGE NOTES DUE 2003, SERIES B FOR ALL OUTSTANDING
11 3/4% FIRST MORTGAGE NOTES DUE 2003, SERIES A
THE EXCHANGE OFFER
WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME,
ON , 1997, UNLESS EXTENDED
------------------------
Statia Terminals International N.V., a Netherlands Antilles corporation
('Statia'), and its wholly-owned subsidiary, Statia Terminals Canada,
Incorporated, a Nova Scotia, Canada corporation ('Statia Canada' and, together
with Statia, the 'Issuers') hereby offer, upon the terms and subject to the
conditions set forth in this Prospectus (the 'Prospectus') and the accompanying
Letter of Transmittal (the 'Letter of Transmittal'; together with the
Prospectus, the 'Exchange Offer'), to exchange up to an aggregate principal
amount of $135,000,000 of its 11 3/4% First Mortgage Notes due 2003, Series B
(the 'New Notes') for up to an aggregate principal amount of $135,000,000 of its
outstanding 11 3/4% First Mortgage Notes due 2003, Series A (the 'Old Notes').
The terms of the New Notes are identical in all material respects to those of
the Old Notes, except for certain transfer restrictions, registration rights,
and liquidated damages provisions relating to the Old Notes. The New Notes will
evidence the same debt as the Old Notes and will be issued pursuant to, and be
entitled to the benefits of, the Indenture (as defined herein) governing the Old
Notes. The New Notes and the Old Notes are collectively referred to herein as
the 'Notes.'
Interest on the New Notes is payable on May 15 and November 15 of each year,
commencing May 15, 1997. The New Notes are redeemable in whole or in part at the
option of the Issuers at any time on or after November 15, 2000, at the
redemption prices hereinafter set forth. In addition, at any time on or prior to
November 15, 1999, the Issuers may redeem up to 35% aggregate principal amount
of the New Notes with the proceeds of one or more Equity Offerings (as defined
herein) at a redemption price equal to 111.75% of the principal amount thereof,
plus accrued and unpaid interest, if any, to the date of redemption, provided
that after giving effect to such redemption at least $88 million aggregate
principal amount of the New Notes remains outstanding.
An Event of Default (as defined herein) will occur if a Change of Control
(as defined herein) occurs. Such Event of Default may be cured if an offer is
made to purchase all outstanding New Notes at a purchase price equal to 101% of
the aggregate principal amount of the New Notes, plus accrued and unpaid
interest, if any, to the date of purchase and all New Notes properly tendered
pursuant to such offer are purchased. There can be no assurance that the Issuers
will have the financial resources necessary to repurchase the New Notes upon a
Change of Control.
The New Notes will be senior obligations of the Issuers and will rank pari
passu with or senior in right of payment to the Issuers' existing and future
Indebtedness (as defined herein) and will be secured by a lien on all existing
and future Collateral (as defined herein), which includes the Issuers' two
principal terminal facilities. The New Notes will be unconditionally guaranteed
on a senior secured basis by, and will be secured by a first priority lien on
all of the outstanding capital stock of, the Issuers' existing active
subsidiaries (the 'Subsidiary Guarantors'). The Indenture governing the New
Notes (the 'Indenture') permits the Issuers and their subsidiaries under certain
circumstances to incur a limited amount of additional Indebtedness which will
share ratably in the Collateral with holders of the New Notes. See 'Description
of Notes -- Security.' As of November 29, 1996, after giving effect to the
Transactions (as defined herein), the aggregate total Indebtedness of the
Issuers was approximately $135,000,000 (reflecting issuance of the Old Notes).
The Old Notes were originally issued and sold on November 27, 1996 in a
transaction not registered under the Securities Act of 1933, as amended (the
'Securities Act'), in reliance upon the exemptions provided in Rule 144A and
Regulation D under the Securities Act. Accordingly, the Old Notes may not be
reoffered, resold or otherwise pledged, hypothecated or transferred in the
United States unless so registered or unless an applicable exemption from the
registration requirements of the Securities Act is available.
The Issuers will accept for exchange any and all Old Notes which are
properly tendered in the Exchange Offer prior to 5:00 p.m., New York City time,
on , 1997, unless extended by the Issuers in their sole discretion
(the 'Expiration Date'). The Expiration Date will not in any event be extended
to a date later than , 1997. Tenders of Old Notes may be withdrawn
at any time prior to 5:00 p.m., New York City time, on the Expiration Date. In
the event the Issuers terminate the Exchange Offer and do not accept for
exchange any Old Notes with respect to the Exchange Offer, the Issuers will
promptly return the Old Notes to the holders thereof. The Exchange Offer is not
conditioned upon any minimum principal amount of Old Notes being tendered for
exchange, but is otherwise subject to certain customary conditions. The Old
Notes may be tendered only in integral multiples of $1,000.
(Continued on Next Page)
SEE 'RISK FACTORS' BEGINNING ON PAGE 8 FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED BY PARTICIPANTS IN THE EXCHANGE OFFER.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------
THE DATE OF THIS PROSPECTUS IS , 1997
<PAGE>
The New Notes are being offered hereunder in order to satisfy certain
obligations of the Issuers contained in the Registration Rights Agreement (the
'Registration Rights Agreement'), dated November 27, 1996, by and among the
Issuers, the Subsidiary Guarantors and Dillon, Read & Co. Inc., as the initial
purchaser (the 'Initial Purchaser'), with respect to the initial sale of the Old
Notes. Based on interpretations by the staff of the Securities and Exchange
Commission (the 'Commission') rendered to third parties in similar transactions,
the New Notes issued pursuant to the Exchange Offer in exchange for Old Notes
may be offered for resale, resold and otherwise transferred by respective
holders thereof (other than any such holder which is an 'affiliate' of either
Issuer within the meaning of Rule 405 under the Securities Act) without
compliance with the registration and prospectus delivery provisions of the
Securities Act, provided that the New Notes are acquired in the ordinary course
of such holder's business and such holder has no arrangement with any person to
participate in the distribution of such New Notes and is not engaged in and does
not intend to engage in a distribution of the New Notes. Each broker-dealer that
receives New Notes for its own account pursuant to the Exchange Offer must
acknowledge that it will deliver a prospectus in connection with any resale of
such New Notes. The Letter of Transmittal states that by so acknowledging and by
delivering a prospectus, a broker-dealer will not be deemed to admit that it is
an 'underwriter' within the meaning of the Securities Act. This Prospectus, as
it may be amended or supplemented from time to time, may be used by a broker-
dealer in connection with resales of the New Notes received in exchange for Old
Notes if such New Notes were acquired by such broker-dealer as a result of
market-making activities or other trading activities. Each Issuer has agreed
that, for a period of 180 days after the Expiration Date, it will make this
Prospectus available to any broker-dealer for use in connection with any such
resale. See 'Plan of Distribution.'
There has not previously been any public market for the New Notes. The
Issuers do not intend to list the New Notes on any securities exchange or to
seek approval for quotation through any automated quotation system. There can be
no assurance that an active market for the New Notes will develop. To the extent
that an active market for the New Notes does develop, the market value of the
New Notes will depend on market conditions (such as yields on alternative
investments), general economic conditions, the Company's financial condition,
and other factors. Such conditions might cause the New Notes, to the extent that
they are actively traded, to trade at a significant discount from face value.
See 'Risk Factors--Absence of Public Market.'
The Issuers will not receive any proceeds from the Exchange Offer. The
Issuers have agreed to pay the expenses incident to the Exchange Offer.
NO PERSON IS AUTHORIZED IN CONNECTION WITH ANY OFFERING MADE HEREBY TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THE PROSPECTUS,
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE ISSUERS. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITY
OTHER THAN THE NEW NOTES OFFERED HEREBY, NOR DOES IT CONSTITUTE AN OFFER TO SELL
OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY TO ANY
PERSON IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL TO MAKE SUCH AN OFFER OR
SOLICITATION TO SUCH PERSON.
------------------------
Until , 1997 (90 days after commencement of this offering), all
dealers effecting transactions in the New Notes, whether or not participating in
this offering, may be required to deliver a Prospectus.
AVAILABLE INFORMATION
The Issuers have filed with the Commission a registration statement on Form
S-4 (the 'Registration Statement') under the Securities Act, with respect to the
New Notes. This Prospectus, which constitutes a part of the Registration
Statement, does not contain all the information set forth in the Registration
Statement, certain items of which are contained in schedules and exhibits to the
Registration Statement as permitted by the rules and regulations of the
Commission. Statements made in this Prospectus as to the contents of any
contract, agreement or other document referred to are not necessarily complete.
With respect to each such contract, agreement or other document filed as an
exhibit to the Registration Statement, reference is made to the exhibit for a
more complete description of the matter involved, and each such statement shall
be deemed qualified in its entirety by such reference. Items of information
omitted from this Prospectus but contained in the Registration Statement may be
inspected and copied at the public reference facilities maintained by the
Commission at Room 1024, 450 Fifth Street, N.W., Judiciary Plaza, Washington,
D.C. 20549 and at the following regional offices of the Commission: Northwestern
Atrium Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661; and
7 World Trade Center, 13th Floor, New York, New York 10048. Copies of such
material can be obtained by mail from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549 at
prescribed rates. Electronic registration statements filed through the
Electronic Data Gathering Analysis and Retrieval ('EDGAR') system are publicly
available through the Commission's web site at http:/www.sec.gov. All amendments
thereto and subsequent periodic reports required to be filed under the
Securities Exchange Act of 1934, as amended (the 'Exchange Act'), have been and
will be filed through EDGAR.
As a result of this offering, the Issuers will become subject to the
periodic reporting and other informational requirements of the Exchange Act. In
the event that either Issuer ceases to be subject to the informational
requirements of the Exchange Act, each Issuer has agreed that, for so long as
any of the Old Notes or the New Notes remain outstanding, it will file with the
Commission and distribute to holders of the Old Notes or the New Notes, as
applicable, copies of the financial information that would have been contained
in such annual reports and quarterly reports, including management's discussion
and analysis of financial condition and results of operations, that would have
been required to be filed with the Commission pursuant to the Exchange Act. See
'Description of Notes--Certain Covenants--Reports.'
ii
<PAGE>
PROSPECTIVE PARTICIPANTS IN THE EXCHANGE OFFER ARE NOT TO CONSTRUE THE
CONTENTS OF THIS OFFERING MEMORANDUM AS INVESTMENT, LEGAL OR TAX ADVICE. EACH
INVESTOR SHOULD CONSULT ITS OWN COUNSEL, ACCOUNTANT AND OTHER ADVISORS AS TO
LEGAL, TAX, BUSINESS, FINANCIAL AND RELATED ASPECTS OF A PURCHASE OF THE NOTES.
NONE OF THE ISSUERS IS MAKING ANY REPRESENTATION TO ANY PARTICIPANT IN THE
EXCHANGE OFFER REGARDING THE LEGALITY OF AN INVESTMENT THEREIN BY SUCH
PARTICIPANT UNDER APPROPRIATE LEGAL INVESTMENT OR SIMILAR LAWS.
ENFORCEABILITY OF CERTAIN CIVIL LIABILITIES
The Company has been advised by its Netherlands Antilles counsel, Smeets
Thesseling van Bokhorst Spigt, as to risks relating to the enforceability of
certain civil liabilities under the U.S. federal securities laws and foreign
judgments related thereto by courts of the Netherlands Antilles, and by its
Canadian counsel, Stewart McKelvey Stirling Scales, as to risks relating to the
enforceability of such civil liabilities and foreign judgments by courts of the
Province of Nova Scotia. See 'Risk Factors -- Enforceability Of Certain Civil
Liabilities.'
------------------------
THE NOTES OFFERED HEREBY HAVE NOT BEEN AND WILL NOT BE QUALIFIED FOR SALE
UNDER THE SECURITIES LAWS OF CANADA OR ANY PROVINCE OR TERRITORY OF CANADA. THE
NOTES ARE NOT BEING OFFERED FOR SALE AND MAY NOT BE OFFERED OR SOLD, DIRECTLY OR
INDIRECTLY, IN CANADA, OR TO ANY RESIDENT THEREOF, IN VIOLATION OF THE
SECURITIES LAWS OF CANADA OR ANY PROVINCE OR TERRITORY OF CANADA.
iii
<PAGE>
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by, and should be read
in conjunction with, the more detailed information and financial data, including
the financial statements and notes thereto, appearing elsewhere in this
Prospectus. Unless otherwise stated in this Prospectus, references to (a)
'Statia' shall mean Statia Terminals International N.V., (b) 'Statia Canada'
shall mean Statia Terminals Canada, Incorporated and (c) 'Company' shall mean
Statia, Statia Canada and their subsidiaries both before and after consummation
of the Acquisition (as defined herein). Certain terms used in this Prospectus
have been defined in the Glossary appearing on page 8 of this Prospectus. All
dollar references in this Prospectus are to U.S. dollars unless otherwise
specifically indicated.
This Prospectus contains forward-looking statements that involve risks and
uncertainties. The Company's actual results may differ materially from the
results discussed in the forward-looking statements. Factors that might cause
such a difference include those discussed in 'Risk Factors.'
THE COMPANY
The Company believes that, measured by capacity, it is among the five
largest independent marine terminaling companies in the world. The Company
primarily provides crude oil, refined products and other bulk liquids
terminaling services to some of the world's largest producers of crude oil,
integrated oil companies, oil traders and refiners, and petrochemical companies.
The Company's services are utilized by customers whose products are transshipped
through the Company's facilities to the Americas and Europe. The Company owns,
leases and operates three storage and transshipment facilities located at (i)
the island of St. Eustatius, Netherlands Antilles; (ii) Point Tupper, Nova
Scotia, Canada; and (iii) Brownsville, Texas (which facility is being held for
sale). In connection with its terminaling business, the Company also provides
related value-added services, including bunkering (the supply of fuel to marine
vessels for their own propulsion), petroleum product blending and processing,
emergency and spill response, bulk product sales and ship services. Tank
capacity of the Company has increased from 4.4 million barrels in 1990 to 20.4
million barrels in 1995. Over the same period, revenues of the Company have
increased from $86.8 million in 1990 to $135.5 million in 1995.
The liquids terminaling industry consists of two market segments. One
segment is characterized by the ownership and management of terminals inland
along major crude oil or petroleum product pipelines. This segment is primarily
engaged in the distribution of crude oil to inland refineries or of petroleum
products to wholesalers via pipeline, rail or truck. The second segment of the
industry is marine terminaling. This segment is primarily engaged in bulk
storage and transshipment of crude oil and petroleum products of domestic and
overseas producers, traders, refiners and distributors.
Demand for the Company's services is primarily dependent on the supply of
and demand for crude oil and petroleum products in the U.S. According to the
U.S. Department of Energy (the 'DOE'), U.S. crude oil demand increased at a
compound annual growth rate of 1.2% between 1992 and 1995. While demand in the
U.S. has risen, domestic crude oil production has continued to fall. According
to the DOE, U.S. crude oil production has fallen at a compound annual rate of
3.0% between 1992 and 1995. According to the DOE, importation of crude oil into
the U.S. has increased at a compound annual growth rate of 5.7% between 1992 and
1995. According to the Oil and Gas Journal (September 27, 1996) (the 'Journal'),
U.S. refinery utilization was near peak capacity at 95.5% as of September 23,
1996. The Company believes that the U.S. economy will increasingly rely upon
imports of both crude oil and refined products to satisfy its requirements.
According to the PIRA Energy Group ('PIRA'), U.S. crude oil imports are
projected to increase at a compound annual growth rate of 1.1% between 1996 and
2000 while U.S. refined products imports are projected to increase at a compound
annual growth rate of 1.3%.
Due to significant economies of scale, crude oil is shipped from the Middle
East, North Sea and Western Africa primarily in Very Large Crude Carriers
('VLCCs') and Ultra-Large Crude Carriers ('ULCCs'). However, limitations related
to size of vessel and depth of water prevent VLCCs and ULCCs, when fully-laden,
from delivering their products directly to U.S. and Canadian ports (other than
the Louisiana Offshore Oil Port, and certain ports in Canada that each service a
single refinery). Most petroleum companies shipping by VLCC or ULCC are
therefore forced to either partially or completely
1
<PAGE>
'lighter' their cargo (the process by which liquid cargo is transferred to
smaller ships, usually while at sea) or transship it through a terminal to other
smaller vessels that can enter U.S. and Canadian ports. Compared to lightering,
terminaling reduces the risk of environmental contamination, is less dependent
on weather conditions, provides more scheduling certainty and, in the case of
the Company, offers oil producers the ability to store oil in close proximity to
the U.S.
The Company's facilities are strategically located near the U.S. Gulf and
East coasts. The Company's St. Eustatius facility is located at a point of
minimal deviation from the major shipping routes from the Arabian Gulf via the
Cape of Good Hope and from Western Africa to the U.S. Gulf and East coasts and
from the Panama Canal and South America to Europe. The Company's Point Tupper
facility is located on the Strait of Canso at Point Tupper, Nova Scotia, a point
of minimal deviation from the shipping routes from the North Sea oil fields to
the U.S. East coast, Canada and the Midwestern U.S. via the St. Lawrence Seaway
and Great Lakes system. The Point Tupper facility operates the deepest
independent ice-free marine terminal on the North American Atlantic coast. The
St. Eustatius facility can accommodate all of, and the Point Tupper facility can
accommodate substantially all of, the largest fully-laden VLCCs and ULCCs.
Shipping into the U.S. from the St. Eustatius and Point Tupper terminals is
not subject to restrictions under the Jones Act, as amended (the 'Jones Act').
The Jones Act mandates that cargo transported between two U.S. ports be carried
only on American-manufactured, -registered and -crewed vessels, the costs of
which are generally considerably higher than those of comparable foreign
vessels. As a result, use of the Company's foreign facilities is considerably
more cost-effective than use of U.S.-based marine terminals for transshipment to
other U.S. destinations.
Approximately 80% of the Company's tanks, measured by capacity, at the
terminals together with related marine installations, were constructed or
renovated during the last six years. At St. Eustatius, new storage facilities
were constructed, increasing capacity at the terminal more than threefold since
1990. At Point Tupper, the facilities were renovated and a former refinery site
was converted into an independent storage terminal. Ernst & Young/Wright Killen,
an independent consulting firm ('EYWK') that provides a broad range of services
to the hydrocarbon processing industries, has provided a valuation (the
'Appraisal') of the St. Eustatius and Point Tupper facilities in connection with
the Initial Offering (as defined herein). EYWK has determined the appraised
replacement value of the Collateral (other than the stock of Statia Canada and
the Subsidiary Guarantors) to be approximately $715 million. An executive
summary of the Replacement Cost Appraisal is attached hereto as Annex A. See
'Risk of Factors -- Adequacy of Collateral.'
The Company began operations in 1982 as Statia Terminals N.V. ('STNV'), a
Netherlands Antilles corporation operating an oil products terminal located on
the island of St. Eustatius. In 1984, CBI Industries, Inc. ('CBI'), an
industrial gases and contracting services (including storage tank construction)
company, acquired a controlling interest in STNV. STNV purchased Statia
Terminals Southwest, Inc. ('STSW'), its facility at Brownsville, Texas, in 1986
and in 1993 the Company acquired the remaining shares it did not then own of
Statia Terminals Point Tupper, Incorporated ('STPT') located at Point Tupper,
Nova Scotia. In 1990, CBI became the sole owner of STNV and STSW. In 1996, CBI
was acquired by Praxair, Inc. ('Praxair'), which sold the Company to focus on
its core businesses. In November of 1996, the Issuers acquired from Praxair all
of the outstanding capital stock of Statia Terminals, Inc. and certain of its
affiliates (the 'Acquisition'). See 'The Transactions.'
THE TRANSACTIONS
Statia and its wholly-owned subsidiary, Statia Canada, are newly organized
corporations formed by Statia Terminals Group N.V. (the 'Parent') for the
purpose of consummating the Acquisition. The Parent is a newly organized company
formed primarily by Castle Harlan Partners II L.P. (together with its
affiliates, 'CHPII'), a private equity investment fund managed by Castle Harlan,
Inc. ('Castle Harlan'), a private merchant bank, and management of the Company.
Pursuant to an agreement between Praxair and the other parties named therein
(the 'Stock Purchase Agreement'), the Parent has purchased from indirect
subsidiaries of Praxair all of the outstanding capital stock of the entities
owning the St. Eustatius and
2
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Brownsville facilities and certain other affiliated entities (the 'Statia Target
Companies') and all of the outstanding capital stock of the entities owning the
Point Tupper facility and Canadian spill response capabilities (the 'Statia
Canada Target Companies' and, together with the Statia Target Companies, the
'Target Companies'). The purchase price paid to Praxair for the capital stock of
the Target Companies was (i) $169 million in cash which is subject to
post-closing adjustment for certain aggregate changes in the working capital of
the Target Companies from the amounts estimated at the closing of the
Acquisition, plus (ii) $40 million in preferred stock of the Parent.
In connection with the Acquisition (i) the Parent issued $40 million of
preferred stock to Praxair, (ii) the Parent issued $55 million of preferred
stock and common stock to CHPII; (iii) the Parent issued $1.5 million of
preferred stock and common stock to a consultant to the Company, (iv) the Parent
issued $4.5 million of preferred stock and common stock to senior management of
the Company ($1.5 million of which was financed with non-recourse loans from the
Parent and $3 million of which was issued in exchange for capital stock of STNV
previously awarded to such senior management), (v) the Parent made a capital
contribution of $98.5 million to the Company (consisting of $55.5 million in
cash and $43 million in the form of equity in the Target Companies), (vi) the
Company paid $169 million in cash (consisting of a portion of the capital
contribution from the Parent and the proceeds of the Old Notes) directly or
indirectly to Praxair in satisfaction of the cash portion of the purchase price
for the Target Companies, (vii) the Parent paid $1 million to Praxair to acquire
certain other assets, (viii) the Company executed senior secured revolving
credit facilities in an aggregate amount of $17.5 million (collectively, the
'New Bank Credit Facility') which remained undrawn at the closing of the
Offering and (ix) the Issuers issued the Old Notes in an aggregate principal
amount of $135,000,000 (the 'Initial Offering') to institutional investors. The
transactions referred to in (i) through (ix) are referred to herein as the
'Transactions.' See 'The Transactions.'
THE EXCHANGE OFFER
<TABLE>
<S> <C>
The New Notes........................ The forms and terms of the New Notes are identical in all material
respects to the terms of the Old Notes for which they may be exchanged
pursuant to the Exchange Offer, except for certain transfer restrictions,
registration rights and liquidated damages provisions relating to the Old
Notes described under '-- The Terms of the Notes.'
The Exchange Offer................... The Issuers are offering to exchange up to $135,000,000 in aggregate
principal amount of the New Notes for up to $135,000,000 aggregate
principal amount of the Old Notes. Old Notes may be exchanged only in
integral multiples of $1,000.
Expiration Date; Withdrawal of
Tender............................. The Exchange Offer will expire at 5:00 p.m., New York City time, on
, 1997, or such later date and time to which it is extended
by the Issuers (the 'Expiration Date'). The tender of Old Notes pursuant
to the Exchange Offer may be withdrawn at any time prior to the Expiration
Date. The Expiration Date will not in any event be extended to a date
later than , 1997. Any Old Notes not accepted for exchange
for any reason will be returned without expense to the tendering holder
thereof as promptly as practicable after the expiration or termination of
the Exchange Offer.
Certain Conditions to the Note
Exchange Offer..................... The Exchange Offer is subject to certain customary conditions, which may
be waived by the Company. See 'The Exchange Offer--Certain Conditions to
the Exchange Offer.'
</TABLE>
3
<PAGE>
<TABLE>
<S> <C>
Procedures for Tendering Old Notes... Each holder of Old Notes wishing to accept the Exchange Offer must
complete, sign and date the Letter of Transmittal, or a facsimile thereof,
in accordance with the instructions contained herein and therein, and mail
or otherwise deliver such Letter of Transmittal, or such facsimile,
together with such Old Notes and any other required documentation to the
Exchange Agent (as defined herein) at the address set forth herein. By
executing the Letter of Transmittal, each holder will represent to the
Issuers that, among other things, (i) any New Notes to be received by it
will be acquired in the ordinary course of its business, (ii) it has no
arrangement with any person to participate in the distribution of the New
Notes and (iii) it is not an 'affiliate,' as defined in Rule 405 of the
Securities Act, of the Company or, if it is an affiliate, it will comply
with the registration and prospectus delivery requirements of the
Securities Act to the extent applicable. Each holder whose Old Notes are
held through DTC (as defined herein) and who wishes to participate in the
Exchange Offer may do so through the DTC's Automated Tender Offer Program
('ATOP') by which each tendering participant will agree to be bound by the
Letter of Transmittal.
Interest Rate on the New
Notes.............................. The New Notes will bear interest from the date of issuance at a rate of
11 3/4% per annum on their principal amount. Holders of the New Notes will
receive interest on May 15, 1997 from the date of issuance, plus an amount
equal to the accrued interest on the Old Notes. Interest on the Old Notes
accepted for exchange will cease to accrue upon issuance of the New Notes.
Interest Payment Dates............... May 15 and November 15, commencing May 15, 1997.
Special Procedures for Beneficial
Owners............................. Any beneficial owner whose Old Notes are registered in the name of a
broker, dealer, commercial bank, trust company or other nominee and who
wishes to tender such Old Notes in the Exchange Offer should contact such
registered holder promptly and instruct such registered holder to tender
on such beneficial owner's behalf. If such beneficial owner wishes to
tender on such owner's own behalf, such owner must, prior to completing
and executing the Letter of Transmittal and delivering his Old Notes,
either make appropriate arrangements to register ownership of the Old
Notes in such owner's name or obtain a properly completed bond power from
the registered holder. The transfer of registered ownership may take
considerable time and may not be able to be completed prior to the
Expiration Date.
Guaranteed Delivery Procedures....... Holders of Notes who wish to tender their Old Notes and whose Old Notes
are not immediately available or who cannot deliver their Old Notes, the
Letter of Transmittal or any other documents required by the Letter of
Transmittal to the Exchange Agent, prior to the Expiration Date, must
tender their Old Notes according to the guaranteed delivery procedures set
forth in 'The Exchange Offer -- Guaranteed Delivery Procedures.'
</TABLE>
4
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<TABLE>
<S> <C>
Appraisal............................ Ernst & Young/Wright Killen ('EYWK') has been retained to provide a
replacement valuation of the Collateral (other than the stock of Statia
Canada and the Subsidiary Guarantors) securing the Notes. EYWK estimated
that as of September 1996, the total replacement value of such Collateral
was approximately $715 million. An executive summary of the Replacement
Cost Appraisal is attached hereto as Annex A. See 'Risk
Factors -- Adequacy of Collateral.'
Registration Requirements............ The Issuers have agreed to use their best efforts to commence or
consummate by April 26, 1997, the registered Exchange Offer pursuant to
which holders of the Old Notes will be offered an opportunity to exchange
their Old Notes for the New Notes which will be issued without legends
restricting the transfer thereof. In the event that applicable
interpretations of the staff of the Commission do not permit the Issuers
to effect the Exchange Offer or in certain other circumstances, the
Issuers have agreed to file a shelf registration statement ('Shelf
Registration Statement') to cover resales of the Old Notes by the holders
thereof and to use their best efforts to cause such Shelf Registration
Statement to be declared effective under the Securities Act and, subject
to certain exceptions, keep such Shelf Registration Statement effective
until three years after the effectiveness date of such Shelf Registration
Statement. If the Issuers fail to commence or consummate the Exchange
Offer or fail to file the Shelf Registration Statement, where applicable,
within the time periods specified in the Registration Rights Agreement,
they will be required to pay liquidated damages ('Liquidated Damages') to
the holders of Old Notes under certain circumstances. See 'Description of
Notes -- Old Notes Registration Rights; Liquidated Damages.'
Use of Proceeds...................... There will be no proceeds to the Issuers from the exchange of Notes
pursuant to the Exchange Offer. See 'Use of Proceeds of the New Notes.'
</TABLE>
TERMS OF THE NOTES
The form and terms of the New Notes are the same as the form and terms of
the Old Notes except that the New Notes are registered under the Securities Act
and, therefore, will not bear legends restricting the transfer thereof. See
'Description of Notes.'
RISK FACTORS
See 'Risk Factors' beginning on page 8 for a discussion of certain factors
that prospective participants in the Exchange Offer should consider prior to
participating in the Exchange Offer.
5
<PAGE>
SUMMARY HISTORICAL AND PRO FORMA COMBINED FINANCIAL DATA
The following table sets forth certain historical combined financial data
for each of the years in the three-year period ended December 31, 1995 and as of
December 31, 1993, 1994, and 1995, which have been derived from and are
qualified by reference to the audited Combined Financial Statements of the
Company included elsewhere in this Prospectus. The summary historical combined
unaudited financial data set forth below for the nine-month period ended
September 30, 1996 have been derived from, and are qualified by reference to,
the unaudited combined financial statements of the Company included elsewhere in
this Prospectus and include all adjustments, consisting of normal recurring
adjustments, which management considers necessary for a fair presentation of the
financial position and the results of operations of the Company for such
periods. Results for the interim periods are not necessarily indicative of the
results for the full year. The summary historical combined financial data set
forth below should be read in conjunction with, and is qualified by reference
to, 'Management's Discussion and Analysis of Financial Condition and Results of
Operations' and the Combined Financial Statements of the Company and
accompanying notes thereto and other financial information included elsewhere in
this Prospectus.
<TABLE>
<CAPTION>
HISTORICAL FINANCIAL INFORMATION(1) PRO FORMA(2)
-------------------------------------------------- ---------------------------
PRE-PRAXAIR ACQUISITION POST-PRAXAIR
------------------------------- ACQUISITION
-------------- YEAR ENDED
YEARS ENDED DECEMBER 31, NINE MONTHS DECEMBER NINE MONTHS
------------------------------- ENDED 31, ENDED
1993 1994 1995 SEPT. 30, 1996 1995 SEPT. 30, 1996
-------- -------- -------- -------------- ---------- --------------
(DOLLARS IN THOUSANDS) (DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
STATEMENT OF INCOME DATA:
Revenues.................................... $112,076 $132,666 $135,541 $114,977 $133,156 $113,130
Cost of services and products sold.......... 94,850 111,194 117,482 104,575 103,193 97,005
Gross profit................................ 17,226 21,472 18,059 10,402 29,963 16,125
Sales and administrative expense............ 4,388 5,339 6,900 4,464 6,900 4,464
Interest expense(3)......................... 726 3,114 4,478 3,447 16,237 11,954
Net income (loss)........................... 10,046 10,944 4,569 845 5,953 (1,246)
BALANCE SHEET DATA:
Total assets(4)............................. $186,420 $197,357 $230,283 $139,810 N/A $248,548
Total debt(5)............................... 60,126 64,450 66,400 76,000 N/A 135,000
Stockholders' equity subject to
reduction(6).............................. -- -- -- -- N/A 20,000
Preferred stock............................. 11,212 18,057 18,589 18,589 N/A --
Total common stockholders' equity(7)........ 95,404 86,965 91,001 (38,600) N/A 78,500
SELECTED FINANCIAL DATA:
EBIT(8)..................................... $ 12,755 $ 17,241 $ 16,602 $ 10,200 $ 22,741 $ 11,304
Depreciation and amortization............... 6,683 10,680 12,118 7,544 6,950 7,245
EBITDA(9)................................... 19,438 27,921 28,720 17,744 29,691 18,549
Gross profit as a % of revenues............. 15.4% 16.2% 13.3% 9.0% 22.5% 14.3%
Effective tax rates(10)..................... 15.6% 8.6% 6.1% 23.4% 8.5% N/M
Capital expenditures(11).................... $ 17,147 $ 25,440 $ 37,138 $ 12,479 $ 37,138 $ 12,479
SELECTED RATIOS:
EBITDA/interest expense(12)................. 26.77x 8.97x 2.81x 2.20x 1.83x 1.55x
Total debt/EBITDA........................... 3.09x 2.31x 2.31x N/A N/A N/A
<CAPTION>
PRO FORMA(2)
-------------
TWELVE MONTHS
ENDED
SEPT. 30, 1996
--------------
<S> <C>
STATEMENT OF INCOME DATA:
Revenues.................................... $143,830
Cost of services and products sold.......... 121,226
Gross profit................................ 22,604
Sales and administrative expense............ 6,410
Interest expense(3)......................... 16,013
Net income (loss)........................... (731)
BALANCE SHEET DATA:
Total assets(4)............................. $248,548
Total debt(5)............................... 135,000
Stockholders' equity subject to
reduction(6).............................. 20,000
Preferred stock............................. --
Total common stockholders' equity(7)........ 78,500
SELECTED FINANCIAL DATA:
EBIT(8)..................................... $ 15,980
Depreciation and amortization............... 9,980
EBITDA(9)................................... 25,959
Gross profit as a % of revenues............. 15.7%
Effective tax rates(10)..................... N/M
Capital expenditures(11).................... $ 21,797
SELECTED RATIOS:
EBITDA/interest expense(12)................. 1.62x
Total debt/EBITDA........................... 5.20x
</TABLE>
- ------------------------
(1) Prior to January 12, 1996, the Company was a wholly-owned subsidiary of CBI.
On January 12, 1996, pursuant to the merger agreement dated December 22,
1995, CBI became a wholly-owned subsidiary of Praxair. This merger
transaction was reflected in the combined financial statements of the
Company as a purchase, effective January 1, 1996. The application of
purchase accounting resulted in changes to the historical basis of
various assets. Accordingly, the information provided for periods
subsequent to December 31, 1995, is not comparable to the information
provided for the earlier periods and dates (Pre-Praxair Acquisition).
(2) The pro forma amounts reflect the historical operations of the Company as
adjusted to reflect the impact of the Transactions and reclassification of
assets held for sale as if they had occurred at the beginning of the period
presented for operations data and as if they had occurred on September 30,
1996 for balance sheet data. See 'Unaudited Pro Forma Combined Financial
Data.'
(3) Pro forma interest expense reflects the debt incurred in connection with the
Transactions at the interest rate of 11.75% per annum.
(4) The reduction in total assets from December 31, 1995 to September 30, 1996
resulted primarily from the application of purchase accounting effective
January 1, 1996 ($95,446 reduction). See Post-Praxair Acquisition Financial
Statements and the Notes thereto set forth on pages F-15 through F-20. The
increase in pro forma total assets as of September 30, 1996 resulted
primarily from the termination of the First Salute Leasing, L.P. off balance
sheet financing in connection with the Transactions.
6
<PAGE>
(5) Pre-Praxair Acquisition total debt includes only third-party debt. The
Company was financed through a combination of third-party debt and,
effective with the Praxair Acquisition, $10,000 of pushed-down debt from the
application of purchase accounting. Advances from Praxair and CBI were
non-interest bearing.
(6) Certain of Parent's preferred stock contain features which may require
Parent to cause the Company to dividend or otherwise remit the proceeds of
the sale of certain assets. See 'Notes 2 and 3 to Unaudited Pro Forma
Combined Balance Sheet'.
(7) The reduction of total stockholders' equity between December 31, 1995 and
September 30, 1996 resulted from the application of purchase accounting
effective January 1, 1996 ($105,446 reduction; see Post-Praxair Acquisition
Financial Statements and the notes thereto set forth on pages F-15 through
F-20); the payment of $25,789 dividends to Praxair affiliates; and net
income after preferred stock dividends of $845.
(8) EBIT is defined as the sum of income before income tax provision (benefit),
interest expense and the portion of the First Salute Leasing, L.P. lease
payment that represents interest expense for the period prior to the
Transactions. The amount of the First Salute Leasing, L.P. related interest
expense included in the calculation was $5,741 for the year ended December
31, 1995, and $4,621 for the nine months ended September 30, 1996.
(9) EBITDA is defined as the sum of (i) income before income tax provision
(benefit), (ii) interest expense, (iii) depreciation and amortization and
(iv) the portion of the First Salute Leasing, L.P. lease payments that
represents interest expense for the period prior to the Transactions. The
amount of the First Salute Leasing, L.P. related interest expense included
in the calculation was $5,741 for the year ended December 31, 1995 and
$4,621 for the nine months ended September 30, 1996. EBITDA is presented not
as an alternative measure of operating results or cash flow from operations
(as determined in accordance with generally accepted accounting principles),
but rather to provide additional information related to the debt servicing
ability of the Company.
(10) The effective tax rate of the Company is based upon the level of pre-tax
income, or loss, incurred in each tax jurisdiction. Certain locations
include separate legal entities that restrict the ability of the Company to
offset pre-tax income against pre-tax losses from other entities. Further,
certain entities, including STNV, are subject to minimum tax computations
which, depending on the level of pre-tax income, may have a significant
impact on the effective tax rate of the Company See 'Note 7 to Pre-Praxair
Acquisition Financial Statements.'
(11) Excludes capital spending of $400, $86,595, and $1,518 during 1993, 1994
and 1995, respectively, financed through an operating lease arrangement
with First Salute Leasing, L.P. and capital spending at Point Tupper prior
to acquisition in October, 1993.
(12) For purposes of this ratio, interest expense includes the First Salute
Leasing, L.P. lease payments.
7
<PAGE>
RISK FACTORS
PROSPECTIVE PARTICIPANTS SHOULD CAREFULLY CONSIDER THE FOLLOWING FACTORS IN
ADDITION TO THE OTHER INFORMATION SET FORTH IN THIS PROSPECTUS BEFORE
PARTICIPATING IN THE EXCHANGE OFFER:
SUBSTANTIAL LEVERAGE AND ABILITY TO SERVICE AND REFINANCE DEBT
In connection with the Transactions, the Company incurred a significant
amount of indebtedness to acquire the common stock of the Target Companies. Upon
issuance of the Old Notes and consummation of the related transactions, the
estimated aggregate total Indebtedness of the Issuers was approximately $135
million and its stockholders' equity was $78.5 million. After giving effect to
the Transactions, earnings would have been insufficient to cover fixed charges
for the pro forma nine months ended September 30, 1996 by approximately $1.3
million. In addition, subject to the restrictions in the Indenture and the New
Bank Credit Facility, the Company may incur additional indebtedness from time to
time to provide working capital, to finance acquisitions or capital expenditures
or for other corporate purposes.
The level of the Company's indebtedness could have important consequences
to holders of the Notes, including: (i) a substantial portion of the Company's
cash flow from operations must be dedicated to debt service and will not be
available for other purposes; (ii) the Company's ability to obtain additional
debt financing in the future for working capital, capital expenditures or
acquisitions may be limited; and (iii) the Company's level of indebtedness could
limit its flexibility in reacting to changes in the industry and economic
conditions generally.
The Company's ability to pay interest on the Notes and to satisfy its other
debt obligations will depend upon its future operating performance, which will
be affected by prevailing economic conditions and financial, business and other
factors, most of which are beyond the Company's control. The Company anticipates
that its operating cash flow, together with borrowings under the New Bank Credit
Facility, will be sufficient to meet its operating expenses and capital
expenditures, to sustain operations and to service its interest requirements as
they become due. The Company expects that it will likely be unable to repay the
Notes at maturity through projected operating cash flow, and it will be
necessary to refinance the Notes. No assurance can be given that the Company
will be able to refinance the Notes on terms acceptable to it, if at all. If the
Company is unable to service its indebtedness, it will be forced to adopt an
alternative strategy that may include reducing or delaying capital expenditures,
selling assets, restructuring or refinancing its indebtedness or seeking
additional equity capital. There can be no assurance that any of these
strategies could be effected on satisfactory terms, if at all. See 'Management's
Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources.'
The occurrence of a Change of Control will constitute an Event of Default
under the Indenture. Such Event of Default may be cured if, within 30 days after
the occurrence of the Change of Control, an offer to all holders of Notes to
purchase (a 'Change of Control Offer') all outstanding Notes properly tendered
pursuant to such offer is made and, within 60 days after the occurrence of the
Change of Control (such purchase date being the 'Change of Control Purchase
Date'), all Notes properly tendered pursuant to such offer are accepted for
purchase for a cash price in U.S. dollars (the 'Change of Control Purchase
Price') equal to 101% of the principal amount of the Notes, plus accrued and
unpaid interest, if any, to the Change of Control Purchase Date. The occurrence
of the events constituting a Change of Control under the Indenture may result in
an event of default in respect of other Indebtedness of Statia and its
Subsidiaries and, consequently, the lenders thereof may have the right to
require repayment of such Indebtedness in full. If a Change of Control Offer is
made, there can be no assurance that the Issuers will have available funds
sufficient to pay for all or any of the Notes that might be delivered by holders
of Notes seeking to accept the Change of Control Offer. The Event of Default
arising upon a Change of Control will also be cured if a third party makes the
Change of Control Offer in the manner and at the times and otherwise in
compliance with the requirements applicable to a Change of Control Offer made by
the Issuers, including the obligations described under '-- Additional Amounts;
Indemnification' above, and purchases all Notes properly tendered and not
withdrawn under such Change of Control Offer.
DEPENDENCE ON DEMAND AND PRICING STRUCTURE FOR PETROLEUM PRODUCTS
The Company's operations are largely dependent on the demand for crude oil
and other petroleum products imported into the U.S. The demand for imported
crude oil and other petroleum products in the U.S. is influenced by a number of
factors, including weather conditions, economic growth, pricing of
8
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petroleum products and substitute products, government policy, transportation
costs, domestic production and refining capacity and utilization. Changes in
government regulation affecting the petroleum industry, including the imposition
of a surcharge on imported oil or an increase in taxes on crude oil and oil
products, could adversely affect the Company's business. These factors are
beyond the Company's control, and there can be no assurance that conditions
affecting supply and demand of crude oil and petroleum products favorable to the
Company's business and financial condition will exist.
When the forward prices for petroleum products that the Company stores fall
below spot prices for any length of time, the users of the Company's storage
facilities are less likely to store product, thereby reducing storage
utilization levels. This market condition is referred to as 'backwardation.'
When forward prices exceed spot prices for any length of time the market is said
to be in 'contango.' When the petroleum products market is in contango for a
specific product by an amount exceeding storage costs, time value of money, cost
of a second vessel and the cost of loading and unloading at the terminal, the
demand for storage capacity at the Company's terminals for such product usually
increases. Historically, heating oil has been in contango during the summer
months and gasoline has been in contango during the winter months. There can be
no assurance that the market will follow this pattern in the future. For
example, since mid-1995, all segments of the petroleum products markets have
been in backwardation. As a result, the Company believes that utilization of its
facilities has been adversely impacted. In addition, for the quarter ended
September 30, 1996, unused storage capacity for refined petroleum products at
the Company's Point Tupper and St. Eustatius facilities was 7.0 million barrels
(of an aggregate of 10.2 million barrels of available storage capacity) compared
to almost no unused storage capacity in the fourth quarter of 1994.
RECENT OPERATING RESULTS
The Company's EBITDA and percentage capacity leased for the three months
ended September 30, 1996 were approximately $4.7 million and 62%, respectively,
compared to $4.1 million and 74%, respectively, for the three months ended
September 30, 1995. The Company's EBITDA and percentage capacity leased for the
fourth quarter of 1995 were approximately $6.9 million and 75%. The Company
believes that EBITDA and percentage capacity leased for the fourth quarter of
1996 will be substantially lower than such amounts for the fourth quarter of
1995 primarily due to backwardation in all segments of petroleum products
markets and uncertainty about future ownership of the Company prior to the
signing of the Stock Purchase Agreement with Praxair. There can be no assurances
that the Company's EBITDA and percentage capacity leased can be sustained at or
will improve from current levels.
RELIANCE ON CERTAIN CUSTOMERS
The Company's revenues from a state-owned oil producer and a refiner
constituted approximately 6.4% and 4.8%, respectively, of its total 1995
revenues. In addition, approximately 10.1% of the Company's 1995 revenues were
derived from parties unaffiliated with such state-owned oil producer but were
generated by the movement of such state-owned oil producer's products through
the Company's terminals. No other customer accounted for more than 5% of the
Company's 1995 revenues directly or indirectly. Although the Company has
long-standing relationships and long-term contracts with these two customers,
there can be no assurance that such long-term contracts will be renewed at the
end of their terms, 2000 and 1999, respectively. If such contracts were not
renewed or the Company otherwise lost any significant portion of its revenues
from these two customers, such non-renewal or loss could have a material adverse
effect on the Company's business and financial condition. The Company also has
long-term contracts with certain other key customers, and there can be no
assurance that these contracts will be renewed at the end of their terms or that
the Company will be able to enter into other long-term contracts on terms
favorable to it or at all. See 'Business -- Customers.'
WEATHER
The Company's operations are disrupted and negatively affected from time to
time by adverse weather conditions. Since its construction in 1982, the
Company's St. Eustatius facility has been adversely impacted by six hurricanes,
of which the three that most seriously affected the Company occurred in the
third and fourth quarters of 1995. Operations at the St. Eustatius facility
ceased for varying lengths of time from August 28, 1995 to October 3, 1995, and,
during September 1995, vessel calls at the St. Eustatius facility decreased to
41 from an average of 77 per month during the previous seven months. Although
9
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certain terminal assets sustained extensive damage, substantially all related
repairs and improvements have been completed. The marine equipment and shoreline
installations that were damaged or destroyed are being repaired or replaced. The
cost of repairing such hurricane damage is estimated to be approximately $19.4
million, approximately $12.6 million of which was covered by insurance. The $6.8
million not covered by insurance is related primarily to improvements. While the
Company has certain property and liability insurance policies with various
insurance carriers, it has no business interruption insurance. See
'Business -- Insurance' and 'Management's Discussion and Analysis of Financial
Condition and Results of Operations.'
COMPETITION
Because the independent liquids terminaling industry is fragmented, the
Company competes both with large, well-financed companies that own many terminal
locations and with small companies that may own a single terminal location.
Certain companies offering liquids terminaling facilities have more storage
capacity than the Company and greater financial and other resources. The Company
believes that most of its principal competitors are less highly-leveraged than
the Company and may therefore have greater financing and operating flexibility
than the Company. There can be no assurance that the Company will not encounter
increased competition in the future, which could have a material adverse effect
on the Company's business and financial condition.
ADEQUACY OF COLLATERAL
The Notes are secured by a security interest in the Collateral, which
(other than the Stock of Statia Canada and the Subsidiary Guarantors) has an
appraised replacement value of approximately $715 million according to EYWK. See
'Prospectus Summary -- The Exchange Offer -- Appraisal.' Upon liquidation of the
Company, the realizable value of the Collateral would likely be less than such
appraised replacement value, and there can be no assurance that, following an
acceleration of the Notes after an Event of Default, the proceeds from the sale
of the Collateral would be sufficient to satisfy all amounts due on the Notes.
In addition, the Indenture permits the Issuers under certain circumstances to
incur a limited amount of additional Indebtedness which would share ratably in
the Collateral with the holders of the Notes. See 'Description of
Notes -- Security' and the executive summary of the Replacement Cost Appraisal
attached hereto as Annex A. The ability of the holders of the Notes to realize
upon the Collateral may be further restricted by applicable law in the event of
a bankruptcy proceeding involving the Company or its subsidiaries. See '-- Risk
Relating to Bankruptcy, Insolvency or Restructuring Proceedings.'
RISK RELATING TO BANKRUPTCY, INSOLVENCY OR RESTRUCTURING PROCEEDINGS
Netherlands Antilles
The rights of the Trustee to realize upon the Collateral will be subject to
the laws applicable to enforcement of security interests in the Netherlands
Antilles. In case of default on an underlying payment obligation, the holder of
a first mortgage, such as the Trustee, is authorized to foreclose by selling all
or part of the mortgaged real property, provided this authority has been granted
in the notarial deed creating the mortgage and has been recorded with the
Registrar of Mortgages of the island of the Netherlands Antilles where the real
property is located. When the foregoing authority has been granted and the
filing has been made, as has occurred in the case of the Notes, in the event of
default, the mortgagee may, at its option, sell all or part of the mortgaged
real property either at a public auction before a civil-law notary on any island
of the Netherlands Antilles without any further court order, ruling or other
approval, or by private sale the terms and conditions of which have been
approved by a competent court of the Netherlands Antilles. In the event of
bankruptcy of Statia, the Trustee may exercise its rights to foreclose as if
there were no bankruptcy, provided this right is exercised within one month
(unless extended) after the date of insolvency (which date could coincide with
the date of the creditors' meeting, if at such meeting no compromise or
agreement between the creditors was reached). Failing timely exercise of this
right, the court appointed receiver in bankruptcy will claim and sell the
property and the Trustee will have a prior right to the proceeds of such sale up
to the value of such perfected first security interest, subject to sharing
certain bankruptcy costs. The foregoing applies equally to holders of first
priority liens on property other than real property ('Personal Property'),
except that such other liens need not be created by notarial deed and cannot be
recorded in a register available for public inspection (except for certain
intellectual property rights). Due to the absence of such register, there can be
no assurance that the Personal Property is not
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<PAGE>
subject to security rights which have priority over the security rights granted
to the Trustee pursuant to the Security Documents. Therefore, in the absence of
such register, the Trustee will rely on a representation and warranty from the
Company that, except as disclosed in writing to the Trustee, the Personal
Property is not subject to any security rights other than the security rights
granted to the Trustee pursuant to the Security Documents.
The bankruptcy of, or any other similar proceeding with respect to, Statia
under Netherlands Antilles law should not result in a determination that funds
held by the Trustee as the result of collection of proceeds pursuant to the
applicable Security Documents are the property of Statia. However, due to the
lack of relevant precedent, no assurance can be given that a bankruptcy judge
will decide as indicated above. In addition, a bankruptcy receiver might decide
that Statia should not continue to perform in accordance with the Indenture or
the applicable Security Documents. All assets of Statia that come into existence
after a bankruptcy will not, and claims of Statia arising after a bankruptcy in
respect of existing contracts may not, be subject to the security interests
created pursuant to the applicable Security Documents. Furthermore, the
bankruptcy of Statia prior to the fiduciary assignment of receivables and the
fiduciary transfer of inventories by Statia to the Trustee would preclude the
receivables and inventories from being available as security for the Trustee for
the benefit of the holders of the Notes.
Canada
In Canada, in the event of a bankruptcy or insolvency of the Company, the
Trustee's ability to realize upon its security interest will be subject to the
provisions of the Canadian Bankruptcy and Insolvency Act. A secured creditor,
such as the Trustee, that intends to realize upon its security interest must
give to the insolvent company a written ten-day notice of its intention to do
so. An insolvent company may, in certain circumstances, delay realization by a
secured creditor of its security interest by making a proposal to all or some of
its creditors, including the secured creditors, or by filing with the official
receiver a notice of its intention to make such a proposal. In such
circumstances, a stay of proceedings is obtained, thereby delaying the rights of
secured creditors to realize upon secured assets, unless they obtain from the
court an exemption from the stay. If the proposal made to the secured creditors
is rejected, the secured creditors may realize upon the secured assets
(including, in the case of the Trustee, the Collateral). Furthermore, if the
proposal is rejected by the unsecured creditors, bankruptcy will automatically
occur. Bankruptcy does not prevent secured creditors from realizing upon their
security interest, although a court may postpone such realization. In so doing,
a court may not, save for some exceptions, postpone the right of a secured
creditor to enforce its security interest for more than six months from (i) the
date the debtor became bankrupt, or in some instances, (ii) the date the debt
became due (whether upon acceleration or otherwise). The trustee appointed in
the bankruptcy might also delay a secured creditor from realizing on its
security interest upon giving such creditor a notice of his intention to inspect
the property of the bankrupt that is subject to the security interest, generally
for the purpose of valuing the security interest. The bankruptcy trustee may
also request that the secured creditor assess the value of the security and the
bankruptcy trustee has the right to redeem the security on payment to the
secured creditor of the debt or the value of the security as assessed or, where
the bankruptcy trustee is dissatisfied with the value at which the security is
assessed, require that the property subject to the security interest be sold. An
insolvent company, in certain circumstances, may also obtain a stay of the
secured creditor's proceedings by placing itself under the protection of the
Companies' Creditors Arrangement Act ('CCAA'). Like the proposal in bankruptcy,
the CCAA allows a company to propose an arrangement to all of its creditors,
including its secured creditors, in which case all actions and proceedings
against the assets of the company are stayed until the first meeting of
creditors is held, unless a court orders otherwise. There may, in certain
circumstances, also be further postponement of creditors' rights subsequent
thereto. However, should a class of secured creditors reject the arrangement,
such class is free to realize upon its security interest.
United States
There can be no assurance that bankruptcy proceedings would not be
commenced with respect to Statia or Statia Canada in the U.S., or that any such
proceedings, if commenced, would be dismissed in deference to Netherlands
Antilles or Canadian bankruptcy proceedings. If Statia or Statia Canada were to
become subject to bankruptcy proceedings under U.S. law, the ability of the
Trustee to realize upon the Collateral could be delayed and the rights of
holders of Notes in the Collateral could be modified under applicable provisions
of U.S. bankruptcy law.
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<PAGE>
FRAUDULENT CONVEYANCE AND ULTRA VIRES CONSIDERATIONS
Under Netherlands Antilles law, the granting of a security interest and the
issuance of a guaranty may be void under the doctrine of 'ultra vires' if (i)
such transactions are not in furtherance of the corporate purpose of the entity
granting the security interest or issuing the guaranty and (ii) the other
parties to such transaction knew or should have known that the transactions
could not have been in furtherance of such entity's corporate purpose. In
determining whether the granting of a security interest and the issuance of a
guaranty by a Netherlands Antilles company is in furtherance of such company's
corporate purpose, Netherlands Antilles courts will consider a number of
factors, including primarily the scope of the company's objects as set forth in
the company's articles of association and the commercial benefit to the company
derived from the transactions in respect of which such security is granted or
such guaranty is issued. The Company believes that, as direct or indirect
wholly-owned subsidiaries of Statia, the Netherlands Antilles Subsidiary
Guarantors will derive substantial benefit from the transactions described
herein and therefore that the granting of the security interests and the
issuance of such Guarantees described herein are in furtherance of the corporate
purposes of such Subsidiary Guarantors. In addition, the Company has been
advised by its Netherlands Antilles counsel, Smeets Thesseling van Bokhorst
Spigt, that it is not unlikely that the granting of such security interests and
the issuance of the Guarantees by the Netherlands Antilles Subsidiary Guarantors
will be upheld by a Netherlands Antilles court as being in furtherance of the
corporate purposes of such Subsidiary Guarantors. However, because the
determination of whether the granting of a security interest and the issuance of
a guaranty are in furtherance of an entity's corporate purpose is inherently
fact-based and fact-specific, there can be no assurance that a Netherlands
Antilles court would agree with the Company and its counsel in this regard.
Under Netherlands Antilles law, the granting of a security interest and the
issuance of a guaranty may also be void under fraudulent conveyance principles
if (i) the transactions are entered into without the debtor being obligated
thereto by contract or otherwise by law, (ii) as a result of the transactions,
any creditors (including future creditors) are prejudiced and (iii) while
performing the transactions, both the debtor and the party with whom the debtor
acted knew that prejudice would result from such transactions. The burden of
proving such fraudulent conveyance is generally on the party seeking to avoid
the guaranty and the granting of a security interest, except if the security
interest is granted or the guaranty is issued within 40 days of bankruptcy of
the debtor, in which case the burden in principle shifts to the debtor to show
the absence of fraudulent conveyance. In determining whether the granting of a
security interest or the issuance of a guaranty by a Netherlands Antilles
company prejudices creditors, Netherlands Antilles courts will consider a number
of factors, including primarily whether such company received less than
reasonably equivalent value or fair consideration for the security interest and
the guaranty and whether such company is at the time of the transactions or will
as a result thereof be generally unable to pay its debts when due or will have
unreasonably small capital to conduct its business. The Company believes that
the Subsidiary Guarantors will receive reasonably equivalent value for the
security interests and the Guarantees described herein and are not at the time
of the Transactions, and will not be as a result thereof, generally unable to
pay their respective debts when due or have unreasonably small capital to
conduct their respective businesses. However, because the determination of
whether the granting of a security interest and the issuance of a guaranty are
fraudulent conveyances are inherently fact-based and fact-specific, there can be
no assurance that a Netherlands Antilles court would agree with the Company in
this regard.
ENFORCEABILITY OF CERTAIN CIVIL LIABILITIES
Netherlands Antilles
Statia is incorporated under the laws of the Netherlands Antilles, and most
of its assets are located outside the U.S. As a result, it may be difficult for
holders of Notes to realize in the U.S. upon a judgment rendered against Statia
in a U.S. court. The Company has been advised by its Netherlands Antilles
counsel, Smeets Thesseling van Bokhorst Spigt, that, while legal actions may be
instituted directly against the Company in the Netherlands Antilles, enforcement
of judgments for the payment of money obtained against the Company in U.S.
courts must be brought before a competent Netherlands Antilles court (pursuant
to a procedure which does not generally require relitigation on the merits) and
will generally be recognized by such court if (i) certain procedural protections
provided in the Netherlands Antilles have been observed and (ii) the judgment
obtained in the U.S., or proceedings related to it, are not contrary to natural
justice or public policy in the Netherlands Antilles. If any such judgment is
not recognized by a
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<PAGE>
Netherlands Antilles court, relitigation of the merits will be required in order
to obtain enforcement of such judgments in the Netherlands Antilles. In
addition, such Netherlands Antilles counsel has advised the Company that it is
unlikely that (i) the courts of the Netherlands Antilles would enforce judgments
entered by the U.S. courts predicated upon the civil liability provisions of the
U.S. federal securities laws or (ii) that actions can be brought in the
Netherlands Antilles in relation to civil liabilities predicated upon the U.S.
federal securities laws.
Canada
Statia Canada is incorporated under the laws of Nova Scotia, Canada, and
all of its assets are located outside the U.S., primarily in the Province of
Nova Scotia, Canada. As a result, it may be difficult for holders of Notes to
realize in the U.S. upon a judgment obtained against Statia Canada in a U.S.
court. The Company has been advised by its Nova Scotia counsel, Stewart McKelvey
Stirling Scales, that, while legal actions may be instituted directly against
Statia Canada in the Province of Nova Scotia, enforcement of a final and
unappealable judgment for a sum certain obtained against Statia Canada in a U.S.
court would be recognized and enforced by a Nova Scotia court provided that: (i)
the U.S. court validly took jurisdiction under Nova Scotia law, (ii) the
judgment was not obtained by fraud, or in a manner contrary to natural justice
and its enforcement would not be inconsistent with public policy, as applied by
a Nova Scotia court, and (iii) the enforcement of such judgment in Nova Scotia
does not constitute directly or indirectly the enforcement of U.S. penal law.
Such Nova Scotia counsel has also advised that there is some doubt that (i) the
courts of the Province of Nova Scotia would enforce judgments entered by U.S.
courts predicated upon the civil liability provisions of the U.S. federal
securities laws and (ii) actions can be brought in the Province of Nova Scotia
in relation to civil liabilities predicated upon the U.S. federal securities
laws.
IMPACT OF ENVIRONMENTAL REGULATION; GOVERNMENTAL REGULATION
The Company's operations and properties are subject to laws and regulations
in its geographic areas of operation, including those governing the use,
storage, handling, generation, treatment, emission, release, discharge and
disposal of certain materials, substances and wastes, remediation of areas of
contamination and the health and safety of employees. As such, the nature of the
Company's operations and previous operations by others at certain of the
facilities exposes the Company to the risk of claims with respect to
environmental protection and health and safety matters, and there can be no
assurance that material costs or liabilities will not be incurred in connection
with such claims. Based on its experience to date and on the covenants of
Praxair under the Stock Purchase Agreement, management believes that none of (i)
its planned environmental investigation, remediation and upgrading referred to
under 'Business -- Environmental, Health and Safety Matters,' (ii) the future
cost of compliance with existing environmental protection and health and safety
laws and regulations or (iii) liability for other known environmental claims,
will have a material adverse effect on the Company's business and financial
condition. However, the actual costs associated with such planned environmental
investigation, remediation and upgrading could be substantial and future events,
such as the discovery of presently unknown environmental conditions and changes
in existing laws and regulations or their interpretation or more vigorous
enforcement policies of regulatory agencies, may give rise to additional
expenditures or liabilities that could be material to the Company's business and
financial condition. See 'Business -- Environmental, Health and Safety Matters.'
FREE TRADE ZONE STATUS AND CERTAIN TAX MATTERS
The Company's facilities in the Netherlands Antilles, Canada and Texas have
qualified for designation as free trade zones and/or customs bonded warehouses.
Such status allows customers and the Company to transship commodities to foreign
destinations with no tax effect.
Pursuant to a Free Zone and Profit Tax Agreement (the 'Free Zone
Agreement') with the island government of St. Eustatius and the central
government of the Netherlands Antilles, which agreement is scheduled to expire
on December 31, 2000, the Company is subject to a minimum annual tax of 500,000
Netherlands Antilles guilders (approximately $282,000 at the current exchange
rate) or 2% of taxable income, whichever is greater. The Free Zone Agreement
further provides that any amounts paid to meet the minimum annual payment will
be available to offset future tax liabilities under the Free Zone Agreement to
the extent that the minimum annual payment is greater than 2% of taxable income.
Discussions regarding modification and extension of the Free Zone Agreement have
commenced and management believes that, although certain terms and conditions
could be modified and that the amounts
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<PAGE>
payable to these governments may be increased modestly, extension of the Free
Zone Agreement is likely. However, it is possible that such amounts may be
increased significantly and that additional fees may be imposed by government
authorities if the Free Zone Agreement is not extended or is otherwise amended.
In Canada and the U.S., the customs bonded warehouse and free trade zone
designations expire annually. The Company routinely renews these designations
through compliance with regulations, including providing evidence of bonding
arrangements and fee payments. It is possible, although management of the
Company believes that it is unlikely, that the Company could lose its customs
bonded warehouse and free trade zone designations through non-compliance,
inability to obtain the necessary bonding arrangements or as a result of
significant changes in regulations. Should these free trade zone designations
terminate, the Company's business and financial condition may be adversely
impacted.
CONTROLLING STOCKHOLDER
CHPII indirectly owns substantially all of the outstanding voting stock of
the Company. By virtue of such stock ownership, CHPII has the power to control
all matters submitted to shareholders of the Company and to elect all directors
and managing directors of the Company. The interests of CHPII as equity holder
may differ from the interests of holders of the Notes.
ABSENCE OF PUBLIC MARKET
There has not previously been any public market for the New Notes and the
Company does not intend to apply for a listing of the New Notes on any
securities exchange. There can be no assurance as to the liquidity of any
markets that may develop for the New Notes, the ability of holders of the New
Notes to sell their New Notes or the price at which holders would be able to
sell their New Notes. Future trading prices of the New Notes will depend on many
factors, including, among other things, prevailing interest rates, the Company's
operating results and the market for similar securities. Historically, the
market for securities similar to the New Notes, including non-investment grade
debt, has been subject to disruptions that have caused substantial volatility in
the prices of such securities. There can be no assurance that any market for the
New Notes, if such market develops, will not be subject to similar disruptions.
The Company has agreed to use its best efforts to have this registration
statement declared effective by the Commission on or prior to 105 days after the
date of issuance of the Notes. See 'Description of Notes -- Old Notes
Registration Rights; Liquidated Damages.' In the event that applicable
interpretations of the staff of the Commission do not permit the Company to
effect the Exchange Offer or in certain other circumstances, the Company has
agreed to file a Shelf Registration Statement and to use its best efforts to
cause such Shelf Registration Statement to be declared effective under the
Securities Act and, subject to exceptions set forth in the Registration Rights
Agreement, keep such Shelf Registration Statement effective until three years
after the effectiveness date of such Shelf Registration Statement. If the
Company does not comply with its registration obligations with respect to the
Old Notes in a timely manner, it will be required to pay liquidated damages to
the holders of the Old Notes until all such registration defaults have been
cured. See 'Description of Notes -- Old Notes Registration Rights; Liquidated
Damages.' The liquidity of, and trading market for, the New Notes may also be
materially and adversely affected by declines in the market for high-yield
securities generally. Such a decline may materially and adversely affect such
liquidity and trading independent of the financial performance of, and prospects
for, the Company.
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<PAGE>
THE TRANSACTIONS
THE ACQUISITION
Pursuant to the Stock Purchase Agreement, the Parent purchased, directly or
indirectly from Praxair, all of the outstanding capital stock of the Target
Companies. The purchase price paid to Praxair for the capital stock of the
Target Companies was (i) $169 million in cash, which is subject to post-closing
adjustment for certain aggregate changes in the working capital of the Target
Companies from the amounts estimated at the closing of the Acquisition, plus
(ii) $40 million in preferred stock of the Parent.
In connection with the Acquisition, (i) the Parent issued $40 million of
preferred stock to Praxair, (ii) the Parent issued $55 million of preferred
stock and common stock to CHPII, (iii) the Parent issued $1.5 million of
preferred stock and common stock to a consultant to the Company, (iv) the Parent
issued $4.5 million of preferred stock and common stock to senior management of
the Company ($1.5 million of which was financed with non-recourse loans from the
Parent and $3 million of which was issued in exchange for capital stock of STNV
previously awarded to such senior management), (v) the Parent made a capital
contribution of $98.5 million to the Company (consisting of $55.5 million in
cash and $43 million in the form of equity in the Target Companies), (vi) the
Company paid $169 million in cash (consisting of a portion of the capital
contribution from the Parent and the proceeds of the Old Notes) directly or
indirectly to Praxair in satisfaction of the cash portion of the purchase price
for the Target Companies, (vii) the Parent paid $1 million to Praxair to acquire
certain other assets, (viii) the Company executed the New Bank Credit Facility
which remained undrawn at the closing of the Initial Offering and (ix) the
Company made the Initial Offering.
Upon consummation of the Transactions, Statia owns, directly or indirectly,
100% of the outstanding capital stock of the Target Companies.
The following is an abbreviated organizational chart of the Company
following consummation of the Transactions:
<TABLE>
<S> <C> <C>
Noteholders
| Praxair/CBI
| | CHPII
| | and others
| $135 million $40 million | |
|First Mortgage Notes ----------------------------- | |
| Statia Terminals Group N.V. Preferred Stock |
| ("Parent") $61 million Preferred |
| | ---------------------------------------------- |
| $98.5 million | and Common Stock
| Common Stock (1) |
| |
| Note Co-Issuer Statia Terminals
|-------------------- International N.V.
| ("Statia")
| |
| Statia Terminals
| Corporation N.V.
| |
| --------------------------------
| | |
| | Statia Terminals N.V.
| Statia Terminals St. Eustatius Collateral
| Canada, Incorporated
Note |-------- ("Statia Canada")
Co-Issuer Point Tupper Collateral
</TABLE>
- ------------------
(1) The $98.5 million of Common Stock ($20 million of which is subject to
reduction) is net of the $1.5 million financed with loans from Parent and
consists of $55.5 million cash and $43 million of equity in the Target
Companies. See 'Parent Capital Structure.' See notes 2 and 3 to the
Unaudited Pro Forma Combined Balance Sheet as of September 30, 1996 under
'Unaudited Pro Forma Combined Financial Data.'
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<PAGE>
PARENT CAPITAL STRUCTURE
Parent has an authorized capital of $37,000 divided into 370,000 shares
with a par value of $0.10 consisting of the following shares: (i) 100,500 shares
of Common Stock; (ii) 20,000 shares of 8% Series A Cumulative Preferred Stock
(the 'Series A Preferred Stock'); (iii) 10,000 shares of 8% Series B Cumulative
Preferred Stock (the 'Series B Preferred Stock'); (iv) 10,000 shares of 8%
Series C Cumulative Preferred Stock (the 'Series C Preferred Stock'); (v) 20,000
shares of 2% Series D Preferred Stock (the 'Series D Preferred Stock'); and (vi)
209,500 shares of 2% Series E Preferred Stock (the 'Series E Preferred Stock').
The following entities currently own Parent stock: (i) Praxair or one of its
subsidiaries holds 20,000 shares of the Series A Preferred Stock, 10,000 shares
of Series B Preferred Stock and 10,000 shares of Series C Preferred Stock; (ii)
CHPII holds 20,000 shares of Series D Preferred Stock, 35,000 shares of Series E
Preferred Stock and 35,000 shares of Common Stock; (iii) certain members of
management hold 4,500 shares of Common Stock and 4,500 shares of Series E
Preferred Stock; and (iv) a consultant to the Company or such consultant's
affiliates holds 1,500 shares of Common Stock and 1,500 shares of Series E
Preferred Stock. See 'The Transactions.'
The terms of the Series A, Series B and Series C Preferred Stock contain
certain restrictions on the purchase, redemption, defeasance or retirement of
the Notes unless such action is effected (w) at the stated maturity of the
Notes, (x) in connection with an Event of Default, (y) pursuant to the mandatory
purchase offer provisions of the Indenture relating to asset sales or (z)
pursuant to the redemption provisions of the Indenture relating to withholding
taxes. Other than as permitted by the foregoing sentence, Parent may not,
directly or indirectly, and may not cause or permit Statia or any of its
subsidiaries to, directly or indirectly, purchase, redeem, defease or retire any
Notes if: (i) in the case of the Series A Preferred Stock, (A) Parent shall not
have declared full cash dividends on such series or, if the Indenture restricts
such declaration, full cash dividends on such series to the extent permitted by
the Indenture, or (B) Parent fails to redeem such series when such redemption is
mandatory, (ii) in the case of the Series B Preferred Stock, Parent fails to
redeem such series when such redemption is mandatory, (iii) in the case of the
Series C Preferred Stock, Parent fails to redeem such series when such
redemption is mandatory, (iv) following the occurrence of certain events set
forth in the Preferred Stock Agreements (defined below) following which the
dividend rate on the Series A, Series B or Series C Preferred Stock is not 8%
per annum or (v) if such purchase, redemption, defeasance or retirement would
reduce the Consolidated Fixed Charge Coverage Ratio such that, in certain
circumstances, the Series C Preferred Stock may not be redeemed as described in
the third succeeding paragraph. See 'Certain Relationships and Related
Transactions.'
Each of the Series A and Series C Preferred Stock is non-voting stock with
a liquidation preference of $1,000 per share. The Parent must redeem these
series on the earliest of (i) one year following the maturity date of the Notes,
(ii) one year from the date on which not more than $10,000,000 aggregate
principal amount of Notes is outstanding (other than those Notes held or
beneficially owned by Parent or any of its affiliates), (iii) the date on which
a holder or beneficial owner of any equity interest in Parent (other than
Praxair), or any option, warrant, convertible security or synthetic or
derivative product related to such equity interest, sells, assigns, pledges or
otherwise transfers any such equity interest except in limited circumstances, or
(iv) 30 days following receipt of notice from the holders of any such series
that the Parent has failed to cure a material breach under the Parent Preferred
Stock Agreement or Parent PS Shareholder Agreement (together the 'Preferred
Stock Agreements').
The Series B Preferred Stock is non-voting stock with a liquidation
preference of $1,000 per share. Parent must redeem this series on the earliest
of (i) the second anniversary of the initial issuance of this series of stock,
(ii) one year from the date on which not more than $10,000,000 aggregate
principal amount of Notes is outstanding (other than those Notes held or
beneficially owned by Parent or any of its affiliates), (iii) the date on which
a holder or beneficial owner of any equity interest in Parent (other than
Praxair), or any option, warrant, convertible security or synthetic or
derivative product related to such equity interest, sells, assigns, pledges or
otherwise transfers any such equity interest except in limited circumstances, or
(iv) 30 days following receipt of notice from the Series B Preferred
Stockholders that Parent has failed to cure a material breach under the
Preferred Stock Agreements. To the extent that Parent or one of its affiliates
shall have received proceeds from the sale of the M/V Megan D. Gambarella,
Parent must redeem the Series B Preferred Stock at the applicable redemption
price therefor out of such proceeds. The
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<PAGE>
Indenture permits the sale of the M/V Megan D. Gambarella and, in the event of
such sale, will permit a Restricted Payment from the Company to the Parent equal
to the amount of the liquidation preference plus accrued and unpaid dividends on
the then outstanding Series B Preferred Stock. See 'Description of
Notes--Certain Covenants--Limitations on Restricted Payments.' If Parent has not
redeemed the Series B Preferred Stock by the second anniversary of the Initial
Offering, Parent may, following the exercise of an option to exchange the Series
B Preferred Stock into common equity of Parent (which option must be exercised
by the holders of the Series B Preferred Stock prior to the third anniversary of
the Closing Date), either redeem the shares for cash or exchange them for common
equity of Parent.
If Statia or one of its affiliates is permitted under the terms of the
Consolidated Fixed Charge Coverage Ratio test in the Limitation on Additional
Indebtedness covenant in the Indenture to issue Indebtedness in an amount up to
or greater than the liquidation preference of the Series C Preferred Stock plus
accrued but unpaid dividends thereon, and Parent does not redeem the Series C
Preferred Stock at the applicable redemption price therefor under certain
conditions, then the management fees payable to Castle Harlan thereafter accrue
and will not be paid in cash until such redemption occurs. The Indenture permits
one or more Restricted Payments from the Company to the Parent when such
Consolidated Fixed Charge Coverage Ratio test permits the incurrence of
Indebtedness in an amount up to the liquidation preference plus accrued and
unpaid dividends on the then outstanding Series C Preferred Stock. See
'Description of Notes--Certain Covenants--Limitations on Restricted Payments.'
The Series D Preferred Stock is non-voting stock on which the dividends
have been waived and which has a liquidation preference of $1,000 per share. In
the event of the sale of the Brownsville facility, Parent, in certain
circumstances, may be required to redeem the Series D Preferred Stock with the
net proceeds thereof. In the event the net proceeds from the sale of the
Brownsville facility and a certain asset of Parent exceed a specified threshold,
Castle Harlan may be entitled to a payment of up to $1 million. The Indenture
permits the sale of the Brownsville facility and permits a Restricted Payment
from the Company to Parent equal to the net proceeds from such sale. See
'Description of Notes--Certain Covenants--Limitations on Restricted Payments.'
The Series E Preferred Stock is voting stock on which the dividends have
been waived and which has a liquidation preference of $1,000 per share.
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<PAGE>
USE OF PROCEEDS OF THE NEW NOTES
This Exchange Offer is intended to satisfy certain obligations of the
Company under the Registration Rights Agreement. The Company will not receive
any proceeds from the issuance of the New Notes offered hereby. In consideration
for issuing the New Notes as contemplated in this Prospectus, the Company will
receive, in exchange, Old Notes in like principal amount. The form and terms of
the New Notes are identical in all material respects to the form and terms of
the Old Notes, except as otherwise described herein under 'The Exchange
Offer--Terms of the Exchange Offer.' The Old Notes surrendered in exchange for
the New Notes will be retired and cancelled and cannot be reissued. Accordingly,
issuance of the New Notes will not result in any increase in the outstanding
debt of the Company.
PRO FORMA CAPITALIZATION
(UNAUDITED)
The following table sets forth the capitalization of the Company, on a pro
forma basis, giving effect to the Transactions as if they had occurred on
September 30, 1996. This table should be read in conjunction with the 'Selected
Historical and Pro Forma Combined Financial Data' and 'Unaudited Pro Forma
Combined Financial Data' included elsewhere in this Prospectus.
<TABLE>
<CAPTION>
PRO FORMA
SEPTEMBER 30, 1996
----------------------
(DOLLARS IN THOUSANDS)
<S> <C>
Notes.................................................................. $135,000
Stockholders' Equity subject to reduction.............................. 20,000
Stockholders' Equity................................................... 78,500
-----------
Total Capitalization.............................................. $233,500
-----------
-----------
</TABLE>
THE EXCHANGE OFFER
PURPOSE AND EFFECT OF THE EXCHANGE OFFER
Pursuant to a Registration Rights Agreement, the Issuers have agreed (i) to
file a registration statement with respect to an offer to exchange the Old Notes
for senior debt securities of the Issuers, with terms substantially identical to
the Old Notes (except that the New Notes will not contain terms with respect to
transfer restrictions) within 45 days after the date of original issuance of the
Old Notes and (ii) to use their best efforts to cause such registration
statement to be declared effective by the Commission on or prior to 105 days
after such issue date. In the event that applicable law or interpretations of
the staff of the Commission do not permit the Issuers to file the registration
statement containing this Prospectus or to effect the Exchange Offer, or if
certain holders of the Old Notes notify the Issuers that they are not permitted
to participate in, or would not receive freely tradeable New Notes pursuant to,
the Exchange Offer, or if the Issuers do not consummate the Exchange Offer on or
prior to six months following the date of issuance of the Old Notes, the Issuers
will use their best efforts to cause to be declared effective the Shelf
Registration Statement with respect to the resale of the Old Notes and, subject
to exceptions set forth in the Registration Rights Agreement, keep the Shelf
Registration Statement effective until three years after the effectiveness date
of such Shelf Registration Statement. The Issuers may be obligated to pay
liquidated damages under certain circumstances if the Issuers are not in
compliance with their obligations under the Registration Rights Agreement. See
'Old Notes Registration Rights.'
Each holder of the Old Notes who wishes to exchange such Old Notes for New
Notes in the Exchange Offer will be required to make certain representations,
including representations that (i) any New Notes to be received by it will be
acquired in the ordinary course of its business, (ii) it has no arrangement with
any person to participate in the distribution of the New Notes and (iii) it is
not an 'affiliate,' as defined in Rule 405 of the Securities Act, of the Company
or, if it is an affiliate, it will comply with the registration and prospectus
delivery requirements of the Securities Act to the extent applicable. See 'Old
Notes Registration Rights.'
18
<PAGE>
RESALE OF NEW NOTES
Based on interpretations by the staff of the Commission set forth in
no-action letters issued to third-parties, the Company believes that, except as
described below, New Notes issued pursuant to the Exchange Offer in exchange for
Old Notes may be offered for resale, resold and otherwise transferred by any
holder thereof (other than a holder which is an 'affiliate' of the Company
within the meaning of Rule 405 under the Securities Act) without compliance with
the registration and prospectus delivery provisions of the Securities Act,
provided that such New Notes are acquired in the ordinary course of such
holder's business and such holder does not intend to participate and has no
arrangement or understanding with any person to participate in the distribution
of such New Notes. Any holder who tenders in the Exchange Offer with the
intention or the purpose of participating in a distribution of the New Notes
cannot rely on such interpretation by the staff of the Commission and must
comply with the registration and prospectus delivery requirements of the
Securities Act in connection with a secondary resale transaction. Unless an
exemption from registration is otherwise available, any such resale transaction
should be covered by an effective registration statement containing the selling
security holders information required by Item 507 of Regulation S-K under the
Securities Act. This Prospectus may be used for an offer to resell, resale or
other retransfer of New Notes only as specifically set forth herein. Each
broker-dealer that receives New Notes for its own account in exchange for Old
Notes, where such Old Notes were acquired by such broker-dealer as a result of
market-making activities or other trading activities, must acknowledge that it
will deliver a prospectus in connection with any resale of such New Notes. See
'Plan of Distribution'.
TERMS OF THE EXCHANGE OFFER
Upon the terms and subject to the conditions set forth in this Prospectus
and in the Letter of Transmittal, the Issuers will accept for exchange any and
all Old Notes properly tendered and not withdrawn prior to 5:00 p.m., New York
City time, on the Expiration Date. The Issuers will issue $1,000 principal
amount of New Notes in exchange for each $1,000 principal amount of outstanding
Old Notes surrendered pursuant to the Exchange Offer. Old Notes may be tendered
only in integral multiples of $1,000.
The form and terms of the New Notes will be the same as the form and terms
of the Old Notes except the New Notes will be registered under the Securities
Act and hence will not bear legends restricting the transfer thereof. The New
Notes will evidence the same debt as the Old Notes. The New Notes will be issued
pursuant to and be entitled to the benefits of, the Indenture, which also
authorized the issuance of the Old Notes, such that both series will be treated
as a single class of debt securities under the Indenture.
The Exchange Offer is not conditioned upon any minimum aggregate principal
amount of Old Notes being tendered for exchange.
As of the date of this Prospectus, $135 million aggregate principal amount
of the Old Notes are outstanding. This Prospectus, together with the Letter of
Transmittal, is being sent to all registered holders of Old Notes. There will be
no fixed record date for determining registered holders of Old Notes entitled to
participate in the Exchange Offer.
The Company intends to conduct the Exchange Offer in accordance with the
provisions of the Registration Rights Agreement and the applicable requirements
of the Exchange Act, and the rules and regulations of the Commission thereunder.
Old Notes which are not tendered for exchange in the Exchange Offer will remain
outstanding and continue to accrue interest and will be entitled to the rights
and benefits such holders have under the Indenture and the Registration Rights
Agreement.
The Company shall be deemed to have accepted for exchange properly tendered
Notes when, as and if the Company shall have given oral or written notice
thereof to the Exchange Agent and complied with the provisions of Section 3 of
the Registration Rights Agreement. The Exchange Agent will act as agent for the
tendering holders for the purposes of receiving the New Notes from the Company.
The Company expressly reserves the right to amend or terminate the Exchange
Offer, and not to accept for exchange any Old Notes not theretofore accepted for
exchange, upon the occurrence of any of the conditions specified below under
'--Certain Conditions to the Exchange Offer.'
19
<PAGE>
Holders who tender Old Notes in the Exchange Offer will not be required to
pay brokerage commissions or fees or, subject to the instructions in the Letter
of Transmittal, transfer taxes with respect to the exchange of Old Notes
pursuant to the Exchange Offer. The Company will pay all charges and expenses,
other than certain applicable taxes described below, in connection with the
Exchange Offer. See '--Fees and Expenses.'
EXPIRATION DATE; EXTENSIONS; AMENDMENTS
The term 'Expiration Date,' shall mean 5:00 p.m., New York City time on
, 1997, unless the Company, in its sole discretion, extends the
Exchange Offer, in which case the term 'Expiration Date' shall mean the latest
date and time to which the Exchange Offer is extended.
In order to extend the Exchange Offer, the Company will notify the Exchange
Agent of any extension by oral or written notice and will mail to the registered
holders of Old Notes an announcement thereof, each prior to 9:00 a.m., New York
City time, on the next business day after the then Expiration Date.
The Company reserves the right, in its sole discretion, (i) to delay
accepting for exchange any Old Notes, to extend the Exchange Offer or to
terminate the Exchange Offer if any of the conditions set forth below under 'The
Exchange Offer--Conditions' shall not have been satisfied, by giving oral or
written notice of such delay, extension or termination to the Exchange Agent or
(ii) to amend the terms of the Exchange Offer in any manner. Any such delay in
acceptance, extension, termination or amendment will be followed as promptly as
practicable by oral or written notice thereof to the registered holders of Old
Notes. If the Exchange Offer is amended in a manner determined by the Company to
constitute a material change, the Company will promptly disclose such amendment
by means of a prospectus supplement that will be distributed to the registered
holders, and the Company will extend the Exchange Offer, depending upon the
significance of the amendment and the manner of disclosure to the registered
holders, if the Exchange Offer would otherwise expire during such period.
INTEREST ON THE NEW NOTES
The New Notes will bear interest from the date of issuance at a rate of
11 3/4% per annum, on their principal amount. Holders of the New Notes will
receive interest on May 15, 1997 from the date of initial issuance of the New
Notes, plus an amount equal to the accrued interest on the Old Notes. Interest
on the Old Notes accepted for exchange will cease to accrue upon issuance of the
New Notes.
CERTAIN CONDITIONS TO THE EXCHANGE OFFER
Notwithstanding any other term of the Exchange Offer, the Company will not
be required to accept for exchange, or exchange any New Notes for, any Old
Notes, and may terminate the Exchange Offer as provided herein before the
acceptance of any Old Notes for exchange, if:
(a) any action or proceeding is instituted or threatened in any court
or by or before any governmental agency with respect to the Exchange Offer
which, in the Company's reasonable judgment, might materially impair the
ability of the Company to proceed with the Exchange Offer; or
(b) any law, statute, rule or regulation is proposed, adopted or
enacted, or any existing law, statute, rule or regulation is interpreted by
the staff of the Commission, which, in the Company's reasonable judgment,
might materially impair the ability of the Company to proceed with the
Exchange Offer; or
(c) any governmental approval has not been obtained, which approval
the Company shall, in its reasonable discretion, deem necessary for the
consummation of the Exchange Offer as contemplated hereby.
The Company expressly reserves the right, at any time or from time to time,
to extend the period of time during which the Exchange Offer is open, and
thereby delay acceptance for exchange of any Old Notes, by giving oral or
written notice of such extension to the holders thereof. During any such
extensions, all Old Notes previously tendered will remain subject to the
Exchange Offer and may be accepted for exchange by the Company. Any Old Notes
not accepted for exchange for any reason will be returned without expense to the
tendering holder thereof as promptly as practicable after the expiration or
termination of the Exchange Offer.
20
<PAGE>
The Company expressly reserves the right to amend or terminate the Exchange
Offer, and not to accept for exchange any Old Notes not theretofore accepted for
exchange, upon the occurrence of any of the conditions of the Exchange Offer
specified above under '--Certain Conditions to the Exchange Offer.' The Company
will give oral or written notice of any extension, amendment, non-acceptance or
termination to the holders of the Old Notes as promptly as practicable, such
notice in the case of any extension to be issued no later than 9:00 a.m., New
York City time, on the next business day after the previously scheduled
Expiration Date.
The foregoing conditions are for the sole benefit of the Company and may be
asserted by the Company regardless of the circumstances giving rise to any such
condition or may be waived by the Company in whole or in part at any time and
from time to time in its sole discretion. The failure by the Company at any time
to exercise any of the foregoing rights shall not be deemed a waiver of any such
rights and each such right shall be deemed an ongoing right which may be
asserted at any time and from time to time.
In addition, the Company will not accept for exchange any Old Notes
tendered, and no New Notes will be issued in exchange for any such Old Notes, if
at such time any stop order shall be threatened or in effect with respect to the
Registration Statement of which this Prospectus constitutes a part or the
qualification of the Indenture under the Trust Indenture Act of 1939 (the
'TIA').
PROCEDURES FOR TENDERING
Only a holder of Old Notes may tender such Old Notes in the Exchange Offer.
To tender in the Exchange Offer, a holder must (i) complete, sign and date the
Letter of Transmittal, or facsimile thereof, have the signature thereon
guaranteed if required by the Letter of Transmittal, and mail or otherwise
deliver such Letter of Transmittal or such facsimile to the Exchange Agent prior
to 5:00 p.m., New York City time, on the Expiration Date or (ii) comply with
DTC's ATOP procedures described below. In addition, either (i) Old Notes must be
received by the Exchange Agent, or (ii) a timely confirmation of book-entry
transfer (a 'Book-Entry Confirmation') of such Old Notes, if such procedure is
available, into the Exchange Agent's account at the Depository Trust Company
(the 'Book-Entry Transfer Facility' or 'DTC') pursuant to the procedure for
book-entry transfer described below together with the Letter of Transmittal or a
properly transmitted Agent's Message (as defined herein) must be received by the
Exchange Agent prior to the Expiration Date, or (iii) the holder must comply
with the guaranteed delivery procedures described below. To be tendered
effectively, the Letter of Transmittal and other required documents or a
properly transmitted Agent's Message must be received by the Exchange Agent at
the address set forth below under the 'The Exchange Offer--Exchange Agent' prior
to 5:00 p.m., New York City time, on the Expiration Date.
The tender by a holder which is not withdrawn prior to the Expiration Date
will constitute an agreement between such holder and the Company in accordance
with the terms and subject to the conditions set forth herein and in the Letter
of Transmittal.
THE METHOD OF DELIVERY OF OLD NOTES, THE LETTER OF TRANSMITTAL AND ALL
OTHER REQUIRED DOCUMENTS TO THE EXCHANGE AGENT (INCLUDING DELIVERY THROUGH DTC
AND ANY ACCEPTANCE OF AN AGENT'S MESSAGE TRANSMITTED THROUGH ATOP) IS AT THE
ELECTION AND RISK OF THE HOLDER. INSTEAD OF DELIVERY BY MAIL, IT IS RECOMMENDED
THAT HOLDERS USE AN OVERNIGHT OR HAND DELIVERY SERVICE. IN ALL CASES, SUFFICIENT
TIME SHOULD BE ALLOWED TO ASSURE DELIVERY TO THE EXCHANGE AGENT BEFORE THE
EXPIRATION DATE. NO LETTER OF TRANSMITTAL OR OLD NOTES SHOULD BE SENT TO THE
COMPANY. HOLDERS MAY REQUEST THEIR RESPECTIVE BROKERS, DEALERS, COMMERCIAL
BANKS, TRUST COMPANIES OR OTHER NOMINEES TO EFFECT THE ABOVE TRANSACTIONS FOR
SUCH HOLDERS.
Any beneficial owner whose Old Notes are registered in the name of a
broker, dealer, commercial bank, trust company or other nominee and who wishes
to tender should contact the registered holder promptly and instruct such
registered holder of Old Notes to tender on such beneficial owner's behalf. If
21
<PAGE>
such beneficial owner wishes to tender on such owner's own behalf, such owner
must, prior to completing and executing the Letter of Transmittal and delivering
such owner's Old Notes, either make appropriate arrangements to register
ownership of the Old Notes in such owner's name or obtain a properly completed
bond power from the registered holder of Old Notes. The transfer of registered
ownership may take considerable time and may not be able to be completed prior
to the Expiration Date.
Signatures on a Letter of Transmittal or a notice of withdrawal described
below, as the case be, must be guaranteed by an Eligible Institution (as defined
herein) unless the Old Notes tendered pursuant thereto are tendered (i) by a
registered holder who has not completed the box entitled 'Special issuance
Instructions' or 'Special Delivery Instructions' on the Letter of Transmittal or
(ii) for the account of an Eligible Institution. In the event that signatures on
a Letter Transmittal or a notice of withdrawal, as the case may be, are required
to be guaranteed, such guarantor must be a member firm or a registered national
securities exchange or of the National Association of Securities Dealers, Inc.,
a commercial bank or trust company having an office or correspondent in the
United States or an 'eligible guarantor institution' within the meaning of Rule
17Ad-15 under the Exchange Act which is a member of one of the recognized
signature guarantee programs identified in the Letter of Transmittal (an
'Eligible Institution').
If the Letter of Transmittal is signed by a person other than the
registered holder of any Old Notes listed therein, such Old Notes must be
endorsed or accompanied by a properly completed bond power, signed by such
registered holder as such registered holder's name appears on such Old Notes
with the signature thereon guaranteed by an Eligible Institution.
If the Letter of Transmittal or any Old Notes or bond powers are signed by
trustees, executors, administrators, guardians, attorneys-in-fact, officers of
corporations or others acting in a fiduciary or representative capacity, such
persons should so indicate when signing, and unless waived by the Company,
evidence satisfactory to the Company of their authority to so act must be
submitted with the Letter of Transmittal.
The Exchange Agent and DTC have confirmed that any financial institution
that is a participant in DTC's system may utilize DTC's Automated Tender Offer
Program ('ATOP') to tender Old Notes. Accordingly, participants in DTC's ATOP
may, in lieu of physically completing and signing the Letter of Transmittal and
delivering it to the Exchange Agent, electronically transmit their acceptance of
the Exchange Offer by causing DTC to transfer the Old Notes to the Exchange
Agent in accordance with DTC's ATOP procedures for transfer. DTC will then send
an Agent's Message to the Exchange Agent.
The term 'Agent's Message' means a message transmitted by DTC received by
the Exchange Agent and forming part of the Book-Entry Confirmation, which states
that DTC has received an express acknowledgement from a participant in DTC's
ATOP that is tendering Old Notes, which are the subject of such book-entry
confirmation, that such participant has received and agrees to be bound by the
terms of the Letter of Transmittal (or, in the case of an Agent's Message
relating to guaranteed delivery, that such participant has received and agrees
to be bound by the applicable notice of guaranteed delivery (the 'Notice of
Guaranteed Delivery')), and that the agreement may be enforced against such
participant.
All questions as to the validity, form, eligibility (including time of
receipt), acceptance of tendered Old Notes and withdrawal of tendered Old Notes
will be determined by the Company in its sole discretion, which determination
will be final and binding. The Company reserves the absolute right to reject any
and all Old Notes not properly tendered or any Old Notes the Company's
acceptance of which would, in the opinion of counsel for the Company, be
unlawful. The Company also reserves the right to waive any defects,
irregularities or conditions of tender as to particular Old Notes. The Company's
interpretation of the terms and conditions of the Exchange Offer (including the
instructions in the Letter of Transmittal) will be final and binding on all
parties. Unless waived, any defects or irregularities in connection with tenders
of Old Notes must be cured within such time as the Company shall determine.
Although the Company intends to notify holders of defects or irregularities with
respect to tenders of Old Notes, neither the Company, the Exchange Agent nor any
other person shall incur any liability for failure to give such notification.
Tenders of Old Notes will not be deemed to have been made until such defects or
irregularities have been cured or waived. Any Old Notes received by the Exchange
Agent that are not properly tendered and as to which the defects or
irregularities have not been cured or waived will be
22
<PAGE>
returned by the Exchange Agent to the tendering holder, unless otherwise
provided in the Letter of Transmittal, as soon as practicable following the
Expiration Date.
In all cases, issuance of New Notes for Old Notes that are accepted for
exchange pursuant to the Exchange Offer will be made only after timely receipt
by the Exchange Agent of the Old Notes or a timely Book-Entry Confirmation of
such Old Notes into the Exchange Agent's account at the Book-Entry Transfer
Facility, a properly completed and duly executed Letter of Transmittal and all
other required documents. If any tendered Old Notes are not accepted for
exchange for any reason set forth in the terms and conditions of the Exchange
Offer or if Old Notes are submitted for a greater principal amount than the
holder desires to exchange, such unaccepted or non-exchanged Old Notes will be
returned without expense to the tendering holder thereof (or, in the case of Old
Notes tendered by book-entry transfer into the Exchange Agent's account at the
Book-Entry Transfer Facility pursuant to the book-entry transfer procedures
described below, such non-exchanged Old Notes will be credited to an account
maintained with such Book-Entry Transfer Facility) as promptly as practicable
after the expiration or termination of the Exchange Offer.
BOOK-ENTRY TRANSFER
The Exchange Agent will make a request to establish an account with respect
to the Old Notes at the Book-Entry Transfer Facility for purposes of the
Exchange Offer within two business days after the date of this Prospectus, and
any financial institution that is a participant in the Book-Entry Transfer
Facility's system may make book-entry delivery of Old Notes by causing the
Book-Entry Transfer Facility to transfer such Old Notes into the Exchange
Agent's account at the Book-Entry Transfer Facility in accordance with such
Book-Entry Transfer Facility's procedures for transfer. However, although
delivery of the Old Notes may be effected through book-entry transfer at the
Book-Entry Transfer Facility, the Letter of Transmittal or facsimile thereof,
with any required signature guarantees and any other required documents, must,
in any case, be transmitted to, and received by, the Exchange Agent at the
address set forth below under '--Exchange Agent' on or prior to the Expiration
Date or, if the guaranteed delivery procedures described below are to be
complied with, within the time period provided under such procedures. Delivery
of documents to the Book-Entry Transfer Facility does not constitute delivery to
the Exchange Agent.
GUARANTEED DELIVERY PROCEDURES
Holders who wish to tender their Old Notes and (i) whose Old Notes are not
immediately available or (ii) who cannot deliver their Old Notes, the Letter of
Transmittal or any other required documents to the Exchange Agent prior to the
Expiration Dates, may effect a tender if:
(a) The tender is made through an Eligible Institution;
(b) Prior to the Expiration Date, the Exchange Agent receives from
such Eligible Institution a properly completed and duly executed Notice of
Guaranteed Delivery (by facsimile transmission, mail or hand delivery)
setting forth the name and address of the holder, the registered number(s)
of such Old Notes and the principal amount of Old Notes tendered, stating
that the tender is being made thereby and guaranteeing that, within three
(3) New York Stock Exchange trading days after the Expiration Date, either
(i) the Letter of Transmittal (or facsimile thereof) together with the Old
Notes or a Book-Entry Confirmation, as the case may be, and any other
documents required by the Letter of Transmittal will be deposited by the
Eligible Institution with the Exchange Agent or (ii) the Exchange Agent
will receive a properly transmitted Agent's Message; and
(c) Such properly completed and executed Letter of Transmittal (or
facsimile thereof), as well as all tendered Old Notes in proper form for
transfer or a Book-Entry Confirmation, as the case may be, and all other
documents required by the Letter of Transmittal or a properly transmitted
Agent's Message, are received by the Exchange Agent within three (3) New
York Stock Exchange trading days after the Expiration Date.
Upon request to the Exchange Agent, a Notice of Guaranteed Delivery will be
sent to holders who wish to tender their Old Notes according to the guaranteed
delivery procedures set forth above.
23
<PAGE>
WITHDRAWAL OF TENDERS
Except as otherwise provided herein, tenders of Old Notes may be withdrawn
at any time prior to 5:00 p.m., New York City time, on the Expiration Date.
For a withdrawal to be effective, (i) a written notice of withdrawal must
be received by the Exchange Agent at one of the addresses set forth below under
'Exchange Agent' or (ii) such notice of withdrawal must comply with the
appropriate procedures of DTC's ATOP system. Any such notice of withdrawal must
specify the name of the person having tendered the Old Notes to be withdrawn,
identify the Old Notes to be withdrawn (including the principal amount of such
Old Notes), and (where certificates for Old Notes have been transmitted) specify
the name in which such Old Notes were registered, if different from that of the
withdrawing holder. If certificates for Old Notes have been delivered or
otherwise identified to the Exchange Agent, then, prior to the release of such
certificates the withdrawing holder must also submit the serial numbers of the
particular certificates to be withdrawn and a signed notice of withdrawal with
signatures guaranteed by an Eligible Institution unless such holder is an
Eligible Institution. If Old Notes have been tendered pursuant to the procedure
for book-entry transfer described above, any notice of withdrawal must specify
the name and number of the account at the Book-Entry Transfer Facility to be
credited with the withdrawn Old Notes and otherwise comply with the procedures
of such facility. All questions as to the validity, form and eligibility
(including time of receipt) of such notices will be determined by the Company,
whose determination shall be final and binding on all parties. Any Old Notes so
withdrawn will be deemed not to have been validly tendered for exchange for
purposes of the Exchange Offer. Any Old Notes which have been tendered for
exchange but which are not exchanged for any reason will be returned to the
holder thereof without cost to such holder (or, in the case of Old Notes
tendered by book-entry transfer into the Exchange Agent's account at the
Book-Entry Transfer Facility pursuant to the book-entry transfer procedures
described above, such Old Notes will be credited to an account maintained with
such Book-Entry Transfer Facility for the Old Notes) as soon as practicable
after withdrawal, rejection of tender or termination of the Exchange Offer.
Properly withdrawn Old Notes may be retendered by following one of the
procedures described under '--Procedures for Tendering Old Notes' above at any
time on or prior to the Expiration Date.
EXCHANGE AGENT
Marine Midland Bank has been appointed as Exchange Agent of the Exchange
Offer. Questions and requests for assistance, request for additional copies of
this Prospectus or of the Letter of Transmittal and requests for Notice of
Guaranteed Delivery should be directed to the Exchange Agent addressed as
follows:
<TABLE>
<S> <C>
By Registered or Certified Mail or By Hand:
by Overnight Courier:
Marine Midland Bank Marine Midland Bank
140 Broadway 140 Broadway
Level A Level A
New York, NY 10005-1180 New York, NY 10005-1180
Attention: Corporate Trust Operations Attention: Corporate Trust Operations
</TABLE>
By Facsimile:
Marine Midland Bank
Corporate Trust Operations
Facsimile: (212) 658-2292
Confirm by Telephone: (212) 658-5931
FEES AND EXPENSES
The expenses of soliciting tenders will be borne by the Company. The
principal solicitation is being made by mail; however, additional solicitation
may be made by telegraph, telephone or in person by officers and regular
employees of the Company and its affiliates.
The Company has not retained any dealer-manager in connection with the
Exchange Offer and will not make any payments to broker-dealers or others
soliciting acceptances of the Exchange Offer. The
24
<PAGE>
Company, however, will pay the Exchange Agent reasonable and customary fees for
its services and will reimburse it for its reasonable out-of-pocket expenses in
connection therewith.
The cash expenses to be incurred in connection with the Exchange Offer will
be paid by the Company and are estimated in the aggregate to be approximately
$200,000. Such expenses include registration fees, fees and expenses of the
Exchange Agent and Trustee, accounting and legal fees and printing costs, and
related fees and expenses.
TRANSFER TAXES
The Company will pay all transfer taxes, if any, applicable to the exchange
of Notes pursuant to the Exchange Offer. If, however, certificates representing
Old Notes for principal amounts not tendered or accepted for exchange are to be
delivered to, or are to be issued in the name of, any person other than the
registered holder of notes tendered, or if tendered Old Notes are registered in
the name of any person other than the person signing the Letter of Transmittal,
or if a transfer tax is imposed for any reason other than the exchange of Notes
pursuant to the Exchange Offer, then the amount of any such transfer taxes
(whether imposed on the registered holder or any other persons) will be payable
by the tendering holder. If satisfactory evidence of payment of such taxes or
exemption therefrom is not submitted with the Letter of Transmittal, the amount
of such transfer taxes will be billed directly to such tendering holder.
CONSEQUENCES OF FAILURE TO EXCHANGE
Holders of Old Notes who do not exchange their Old Notes for New Notes
pursuant to the Exchange Offer will continue to be subject to the restrictions
on transfer of such Old Notes, as set forth (i) in the legend thereon as a
consequence of the issuance of the Old Notes pursuant to the exemptions from, or
in transactions not subject to, the registration requirements of the Securities
Act and applicable state securities laws and (ii) otherwise set forth under
'Transfer Restrictions' in the Offering Memorandum dated November 22, 1996
distributed in connection with the Initial Offering. In general, the Old Notes
may not be offered or sold, unless registered under the Securities Act, except
pursuant to an exemption from, or in a transaction not subject to, the
Securities Act and applicable state securities laws. The Company does not
currently anticipate that it will register the Old Notes under the Securities
Act. Based on interpretations by the staff of the Commission, New Notes issued
pursuant to the Exchange Offer may be offered for resale, resold or otherwise
transferred by holders thereof (other than any such holder which is an
'affiliate' of the Company within the meaning of Rule 405 under the Securities
Act) without compliance with the registration and prospectus delivery provisions
of the Securities Act, provided that such New Notes are acquired in the ordinary
course of such holders' business and such holders have no arrangement or
understanding with respect to the distribution of the New Notes to be acquired
pursuant to the Exchange Offer. Any holder who tenders in the Exchange Offer for
the purpose of participating in a distribution of the New Notes (i) could not
rely on the applicable interpretations of the staff of the Commission and (ii)
must comply with the registration and prospectus delivery requirements of the
Securities Act in connection with a secondary resale transaction. In addition,
to comply with the securities laws of certain jurisdictions, if applicable, the
New Notes may not be offered or sold unless they have been registered or such
securities laws have been complied with. The Company has agreed, pursuant to the
Registration Rights Agreement and subject to certain specified limitations
therein, to register or qualify the New Notes for offer or sale under the
securities or blue sky laws of such jurisdictions as any holder of the New Notes
reasonably requests in writing.
25
<PAGE>
UNAUDITED PRO FORMA COMBINED FINANCIAL DATA
The following Unaudited Pro Forma Combined Statements of Income for the
year ended December 31, 1995 and the nine month period ended September 30, 1996
give effect to the Transactions as if they had occurred at the beginning of the
period indicated. The unaudited pro forma combined financial data are based on
the historical financial statements of the Company and the assumptions and
adjustments described in the accompanying notes. The Unaudited Pro Forma
Combined Statements of Income do not purport to represent what the results of
operations of the Company actually would have been if the Transactions had
occurred as of the date indicated or what such results will be for any future
periods.
The following Unaudited Pro Forma Combined Balance Sheet as of September
30, 1996, was prepared as if the Transactions had occurred on such date. The
Unaudited Pro Forma Combined Balance Sheet reflects the preliminary allocation
of the purchase price for the Acquisition to the tangible and intangible assets
and liabilities of the Company. The final allocation of such purchase price, and
the resulting amortization expense in the accompanying Unaudited Pro Forma
Combined Statements of Income, will differ from the preliminary estimates due to
the final allocation being based on: (a) actual closing date amounts of assets
and liabilities, and (b) actual values of property and equipment and any
identifiable intangible assets.
The unaudited pro forma combined financial data are based upon assumptions
that the Company believes are reasonable and should be read in conjunction with
the Combined Financial Statements of the Company and the accompanying notes
thereto included elsewhere in this Prospectus.
26
<PAGE>
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1995
-----------------------------------------------------
PRO FORMA
--------------------------
ASSETS HELD
FOR SALE
HISTORICAL (1) ADJUSTMENTS PRO FORMA
---------- ----------- ----------- ---------
<S> <C> <C> <C> <C>
Revenues................................................... $ 135,541 $(2,385) $ -- $133,156
(4,385)(2)
(538)(3)
Cost of services and products sold......................... 117,482 (3,625) (5,741)(4) 103,193
---------- ----------- ----------- ---------
Gross profit............................................. 18,059 1,240 10,664 29,963
Selling and administrative expenses........................ 6,900 -- -- 6,900
---------- ----------- ----------- ---------
Income from operations................................... 11,159 1,240 10,664 23,063
Interest expense........................................... 4,478 -- 11,759(5) 16,237
Other expense.............................................. 298 24 -- 322
---------- ----------- ----------- ---------
Income (loss) before income taxes and preferred stock
dividends............................................. 6,383 1,216 (1,095) 6,504
Provision for income taxes................................. 390 161 -- 551
---------- ----------- ----------- ---------
Net income (loss) before preferred stock
dividends............................................. 5,993 1,055 (1,095) 5,953
Preferred stock dividends.................................. 1,424 -- (1,424)(6) --
---------- ----------- ----------- ---------
Net income (loss)........................................ $ 4,569 $ 1,055 $ 329 $ 5,953
---------- ----------- ----------- ---------
---------- ----------- ----------- ---------
</TABLE>
- ------------------
(1) Reflects adjustments to dispose of the operations of the Brownsville
terminal and to record the estimated savings, net of incremental costs,
related to the anticipated sale of the M/V Megan D. Gambarella, a marine
vessel. Both the Brownsville terminal and the M/V Megan D. Gambarella are
reflected as Assets held for sale on the accompanying Unaudited Pro Forma
Combined Balance Sheet.
(2) Reflects the decrease in depreciation and amortization relating to the
Transactions of $4,385. Under purchase accounting, the purchase price of
$209,000 is allocated to the assets and liabilities of the Company based
upon their respective fair values. In addition, on January 12, 1996,
pursuant to the merger agreement dated December 22, 1995 (the 'Merger'), CBI
became a wholly-owned subsidiary of Praxair. The Merger was reflected in the
combined financial statements of the Company as a purchase, effective
January 1, 1996. The value assigned to the Company as of the merger date was
consistent with the purchase price. The preliminary allocation of the Merger
resulted in the elimination of $9,925 previously recorded intangible assets,
a writedown of property and equipment of $85,521 and the push down of
$10,000 of Merger related debt. These adjustments resulted in a pro forma
adjustment to reduce depreciation and amortization by $4,726 for the year
ended December 31, 1995. The preliminary purchase accounting allocation for
the Transactions, excluding the termination of the First Salute Leasing,
L.P. off balance sheet financing, resulted in an increase in property, plant
and equipment of $6,815. This adjustment resulted in a pro forma adjustment
to increase depreciation by $341 for the year ended December 31, 1995.
(3) Adjustment to record the estimated savings identified by the Company's
management, principally personnel related, to be implemented shortly after
closing the Transactions. These savings are partially offset by higher
insurance and certain other stand-alone costs.
(4) Reflects the termination of the First Salute Leasing, L.P. off balance sheet
financing in connection with the Transactions. The adjustment of $5,741
reflects the reduction of the amount of cash rent expense of the Company.
(5) Adjusted to eliminate current interest expense ($4,478), record new interest
expense of $15,863 at the interest rate of 11.75% per annum for the Notes
and amortization of transaction financing costs of $914 less interest
capitalized of $540.
(6) Adjusted to eliminate historical preferred stock dividends paid to an
affiliate of Praxair.
27
<PAGE>
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30, 1996
------------------------------------------------------
PRO FORMA
---------------------------
ASSETS HELD
HISTORICAL FOR SALE(1) ADJUSTMENTS PRO FORMA
---------- ----------- ------------ ---------
<S> <C> <C> <C> <C>
Revenues.................................................. $ 114,977 (1,847) $ -- $113,130
256(2)
(404)(3)
Cost of services and product sold......................... 104,575 (2,801) (4,621)(4) 97,005
---------- ----------- ------------ ---------
Gross profit............................................ 10,402 954 4,769 16,125
Selling and administrative expenses....................... 4,464 -- -- 4,464
---------- ----------- ------------ ---------
Income from operations.................................. 5,938 954 4,769 11,661
Interest expense.......................................... 3,447 8,507(5) 11,954
Other expense (income).................................... 359 (2) -- 357
---------- ----------- ------------ ---------
Income (loss) before income taxes and preferred stock
dividends............................................ 2,132 956 (3,738) (650)
Provision for income taxes................................ 498 98 -- 596
---------- ----------- ------------ ---------
Net income (loss) before preferred dividends............ 1,634 858 (3,738) (1,246)
Preferred stock dividends................................. 789 -- (789)(6) --
---------- ----------- ------------ ---------
Net income (loss)....................................... $ 845 858 $ (2,949) $ (1,246)
---------- ----------- ------------ ---------
---------- ----------- ------------ ---------
</TABLE>
- ------------------
(1) Reflects adjustments to dispose of the operations of the Brownsville
terminal and to record the estimated savings, net of incremental costs,
related to the anticipated sale of the M/V Megan D. Gambarella, a marine
vessel. Both the Brownsville terminal and the M/V Megan D. Gambarella are
reflected as Assets held for sale on the accompanying Unaudited Pro Forma
Combined Balance Sheet.
(2) Under purchase accounting, the purchase price of $209,000 is allocated to
the assets and liabilities of the Company based upon their respective fair
values. The purchase accounting relating to the Merger has been reflected in
the historical statements effective January 1, 1996. The preliminary
purchase accounting allocation for the Transactions resulted in an increase
in property and equipment of $6,815. This adjustment resulted in a pro forma
adjustment to increase depreciation by $256 for the nine months ended
September 30, 1996.
(3) Adjustment to record the estimated savings identified by the Company's
management, principally personnel related, to be implemented shortly after
closing the Transactions. These savings are partially offset by higher
insurance and certain other stand-alone costs.
(4) Reflects the termination of the First Salute Leasing, L.P. off balance sheet
financing, which is expected to occur as a result of the Transactions. The
adjustment of $4,621 reflects the reduction of the amount of cash rent
expense of the Company.
(5) Adjusted to eliminate current interest expense ($3,447), record new interest
expense of $11,897 at the interest rate of 11.75% per annum for the Notes
and amortization of transaction financing costs of $686, less interest
capitalized of $629.
(6) Adjusted to eliminate the preferred stock dividends paid to an affiliate of
Praxair.
28
<PAGE>
UNAUDITED PRO FORMA COMBINED BALANCE SHEET
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
PRO FORMA ADJUSTMENTS
POST-PRAXAIR ----------------------------------------------
ACQUISITION CAPITALIZATION ACQUISITION
AS OF ASSETS HELD AND AND PURCHASE
ASSETS: SEPTEMBER 30, 1996 FOR SALE(1) FINANCING(2) ACCOUNTING PRO FORMA
------------------ ------------ -------------- ------------ ---------
<S> <C> <C> <C> <C> <C>
Current assets:
Cash and cash equivalents ...... $ 648 $ -- $175,500 $ (169,398)(3) $ 6,750
Accounts receivable, net ....... 13,153 (154) -- (1,900)(4) 11,099
Inventory, net.................. 6,704 -- -- -- 6,704
Prepaid expenses................ 451 (9) -- -- 442
Assets held for sale(4)......... -- 20,000 -- -- 20,000
------------------ ------------ -------------- ------------ ---------
Total current assets......... 20,956 19,837 175,500 (171,298) 44,995
------------------ ------------ -------------- ------------ ---------
Property and equipment, net ...... 116,216 (17,486) -- 98,328(4) 197,058
Intangible assets, net............ -- -- 8,600 (8,600)(4) --
Other noncurrent assets........... 2,638 (2,543) 6,400 -- 6,495
------------------ ------------ -------------- ------------ ---------
$139,810 $ (192) $190,500 $ (81,570) $248,548
------------------ ------------ -------------- ------------ ---------
------------------ ------------ -------------- ------------ ---------
LIABILITIES & STOCKHOLDERS'
EQUITY:
Current liabilities:
Accounts payable................ $ 8,563 (29) $ -- $ -- $ 8,534
Accrued expenses................ 6,067 (163) -- 610(4) 6,514
Bank debt....................... 76,000 -- -- (76,000)(4) --
Payable to CBI/Praxair
affiliates................... 29 -- -- (29)(4) --
------------------ ------------ -------------- ------------ ---------
Total current liabilities ... 90,659 (192) -- (75,419) 15,048
Long-term debt.................... -- -- 135,000 -- 135,000
Advances from CBI/Praxair......... 69,162 -- -- (69,162)(4) --
------------------ ------------ -------------- ------------ ---------
Total liabilities............ 159,821 (192) 135,000 (144,581) 150,048
------------------ ------------ -------------- ------------ ---------
Stockholders' equity subject to
reduction....................... -- -- 10,000 10,000(3) 20,000
Old equity........................ (20,011) -- -- 20,011(4) --
New equity:
Common stock -- Statia
Terminals International
N.V.......................... -- -- 45,500 33,000(3) 78,500
------------------ ------------ -------------- ------------ ---------
Total stockholders' equity... (20,011) -- 45,500 53,011 78,500
------------------ ------------ -------------- ------------ ---------
$139,810 $ (192) $190,500 $ (81,570) $248,548
------------------ ------------ -------------- ------------ ---------
------------------ ------------ -------------- ------------ ---------
</TABLE>
- ------------------
(1) Reflects adjustments to sell the operations of the Brownsville terminal and
to record the estimated savings, net of incremental costs, related to the
anticipated sale of the M/V Megan D. Gambarella, a marine vessel. Both the
Brownsville terminal and the M/V Megan D. Gambarella are reflected as Assets
held for sale. The Company has estimated the anticipated proceeds of the
sale of the M/V Megan D. Gambarella and the Brownsville terminal to
aggregate $20,000 although the actual proceeds of such a sale may not equal
such estimates.
(Footnotes continued on next page)
29
<PAGE>
(Footnotes continued from previous page)
(2) Proceeds from issuance of Notes and Common Stock less issuance and
transaction costs.
<TABLE>
<S> <C>
Issuance of Notes........................................................................... $135,000
Issuance of Common Stock, subject to reduction.............................................. 10,000
Issuance of Common Stock.................................................................... 45,500
----------
Gross proceeds.................................................................. $190,500
Less:
Debt issuance costs............................................................. (6,400)
Transaction cost................................................................ (8,600)
----------
Net cash proceeds............................................................... $175,500
----------
----------
</TABLE>
Parent issued $20,000 of Series D Preferred Stock to CHPII. Parent in turn
purchased $20,000 of common equity of the Company. The Series D Preferred
Stock contains features which may require Parent to cause the Company to
dividend or otherwise remit the proceeds of the sale of the Brownsville
terminal. The Brownsville terminal is carried on the balance sheet of the
Company at $10,000 as an asset held for sale. Accordingly, $10,000 of the
Company's Common Stock has been classified outside of the stockholders'
equity section as stockholders' equity subject to reduction. See 'Parent
Capital Structure.'
(3) To reflect the acquisition of the Company from Praxair:
<TABLE>
<S> <C>
Cash payment for the acquisition......................................................... $ 169,000
Plus, excess cash............................................................ 398
-------------
Net cash outflow......................................................................... $ 169,398
Capital contribution from Parent, reflecting
Praxair's retained interest in the Company
Stockholders' equity subject to reduction.................................... 10,000
Common stock, net of loans................................................... 30,000
Management's common stock, net of loans.................................................. 3,000
-------------
Total consideration.......................................................... $ 212,398
-------------
-------------
</TABLE>
The Parent issued $10,000 of Series B Preferred Stock to Praxair or one of
its subsidiaries as partial consideration for the capital stock of the Target
Companies. Such stock of the Target Companies was contributed to the Company
in return for common equity of the Company. The Series B Preferred Stock
contains features which require the Parent to cause the Company to dividend
or otherwise remit the proceeds of the sale of the the M/V Megan D.
Gambarella, a marine vessel. Accordingly, an additional $10,000 of the
Company's Common Stock has been classified outside of the stockholders'
equity section as stockholders' equity subject to reduction. See 'Parent
Capital Structure.'
(4) To reflect preliminary purchase accounting adjustments:
<TABLE>
<S> <C>
Total consideration...................................................................... $ 212,398
Assets and liabilities retained by Praxair
Other receivables............................................................ 1,900
Bank and Praxair Merger push-down debt....................................... (76,000)
Payable to CBI/Praxair....................................................... (29)
Advances from CBI/Praxair.................................................... (69,162)
Restructuring accrual.................................................................... 610
Elimination of old equity................................................................ 20,011
-------------
Increase in property and equipment....................................................... $ 89,728
Reclassification of transaction costs from intangible assets............................. 8,600
-------------
Total write-up of property and equipment................................................. $ 98,328
-------------
-------------
</TABLE>
The Stock Purchase Agreement required Praxair to terminate, before maturity,
the First Salute Leasing, L.P. off-balance sheet financing on or prior to the
consummation of the Acquisition. This termination, which approximates
$88,500, represents the most significant portion of the increase of property
and equipment.
30
<PAGE>
SELECTED HISTORICAL AND PRO FORMA COMBINED FINANCIAL DATA
The following table sets forth selected historical and pro forma combined
financial data for the periods and as of the dates indicated. The selected
historical combined statement of income data for each of the years in the three
year period ended December 31, 1995 and the selected historical combined balance
sheet data as of December 31, 1993, 1994 and 1995, have been derived from and
are qualified by reference to, the Audited Combined Financial Statements of the
Company included elsewhere in this Prospectus. The selected historical combined
statement of income data for each of the years in the two year period ended
December 31, 1992 and the selected historical combined balance sheet data as of
December 31, 1991 and 1992 have been derived from the Company's unaudited
financial statements. The selected historical combined unaudited financial data
set forth below for the nine-month periods ended September 30, 1995 and 1996
have been derived from, and are qualified by reference to, the unaudited
combined financial statements of the Company included elsewhere herein and
include all adjustments, consisting of normal recurring adjustments, which
management considers necessary for a fair presentation of the financial position
and the results of operations of the Company for such periods. Results for the
interim periods are not necessarily indicative of the results for the full year.
The selected historical combined financial data set forth below should be read
in conjunction with, and are qualified by reference to, 'Management's Discussion
and Analysis of Financial Condition and Results of Operations' and the Combined
Financial Statements of the Company and accompanying notes thereto and other
financial information included elsewhere in this Prospectus.
31
<PAGE>
<TABLE>
<CAPTION>
HISTORICAL FINANCIAL INFORMATION(1)
--------------------------------------------------------------------------------------
PRE-PRAXAIR ACQUISITION POST-PRAXAIR
-------------------------------------------------------------------- ACQUISITION
--------------
YEARS ENDED DECEMBER 31, NINE MONTHS NINE MONTHS
--------------------------------------------------- ENDED ENDED
1991 1992 1993 1994 1995 SEPT. 30, 1995 SEPT. 30, 1996
-------- ------- -------- -------- -------- -------------- --------------
(DOLLARS IN THOUSANDS) (DOLLARS IN
THOUSANDS)
<CAPTION>
STATEMENT OF INCOME DATA:
<S> <C> <C> <C> <C> <C> <C> <C>
Revenues........................ $101,204 $99,122 $112,076 $132,666 $135,541 $104,318 $ 114,977
Cost of services and products
sold.......................... 88,540 82,893 94,850 111,194 117,482 89,564 104,575
Gross profit.................... 12,664 16,229 17,226 21,472 18,059 14,754 10,402
Sales and administrative
expense....................... 3,087 3,307 4,388 5,339 6,900 4,954 4,464
Interest expense(3)............. 19 -- 726 3,114 4,478 3,767 3,447
Net income (loss)............... 9,010 13,060 10,046 10,944 4,569 4,101 845
BALANCE SHEET DATA:
Total assets(4)................. $ 82,368 $88,128 $186,420 $197,357 $230,283 N/A $ 139,810
Total debt(5)................... 7,235 -- 60,126 64,450 66,400 N/A 76,000
Stockholders' equity subject to
reduction(6).................. -- -- -- -- -- N/A --
Preferred stock................. 19,437 12,000 11,212 18,057 18,589 N/A 18,589
Total stockholders' equity(7)... 52,984 73,482 95,404 86,965 91,001 N/A (38,600)
SELECTED FINANCIAL DATA:
EBIT(8)......................... 9,598 13,712 12,755 17,241 16,602 13,541 10,200
Depreciation and amortization... 3,389 4,401 6,683 10,680 12,118 8,293 7,544
EBITDA(9)....................... 12,987 18,113 19,438 27,921 28,720 21,834 17,744
Gross profit as a % of
revenues...................... 12.5% 16.4% 15.4% 16.2% 13.3% 14.1% 9.0%
Effective tax rates(10)......... 5.9% 4.8% 15.6% 8.6% 6.1% 7.0% 23.4%
Capital expenditures(11)........ $ 22,316 $19,223 $ 17,147 $ 25,440 $ 37,138 $ 27,820 $ 12,479
SELECTED RATIOS:
EBITDA/interest expense(12)..... 683.53x N/M 26.77x 8.97x 2.81x 2.75x 2.20x
Total debt/EBITDA............... 0.56x N/M 3.09x 2.31x 2.31x N/A N/A
Ratio of earnings to fixed
charges(13)................... 10.40x 14.71x 5.01x 2.94x 1.44x 1.51x 1.17x
SELECTED OTHER DATA:
Capacity (in thousands of
barrels)...................... 5,600 7,459 11,590 15,387 20,387 20,387 18,738
Percentage capacity
leased(14).................... 85% 86% 79% 87% 76% 76% 68%
Throughput (in thousands of
barrels)(15).................. 25,436 27,109 37,591 60,630 109,805 79,301 64,312
Vessel calls(16)................ 777 829 967 1,063 973 745 728
<CAPTION>
PRO FORMA(2)
-----------------------------
YEAR ENDED NINE MONTHS
DECEMBER 31, ENDED
1995 SEPT. 30, 1996
------------ --------------
STATEMENT OF INCOME DATA:
<S> <C> <C>
Revenues........................ $133,156 $113,130
Cost of services and products
sold.......................... 103,193 97,005
Gross profit.................... 29,963 16,125
Sales and administrative
expense....................... 6,900 4,464
Interest expense(3)............. 16,237 11,954
Net income (loss)............... 5,953 (1,246)
BALANCE SHEET DATA:
Total assets(4)................. N/A $248,548
Total debt(5)................... N/A 135,000
Stockholders' equity subject to
reduction(6).................. N/A 20,000
Preferred stock................. N/A --
Total stockholders' equity(7)... N/A 78,500
SELECTED FINANCIAL DATA:
EBIT(8)......................... 22,741 11,304
Depreciation and amortization... 6,950 7,245
EBITDA(9)....................... 29,691 18,549
Gross profit as a % of
revenues...................... 22.5% 14.3%
Effective tax rates(10)......... 8.5% N/M
Capital expenditures(11)........ $ 37,138 $ 12,479
SELECTED RATIOS:
EBITDA/interest expense(12)..... 1.83x 1.55x
Total debt/EBITDA............... N/A N/A
Ratio of earnings to fixed
charges(13)................... 1.32x (13)
SELECTED OTHER DATA:
Capacity (in thousands of
barrels)...................... 18,738 18,738
Percentage capacity
leased(14).................... 79% 71%
Throughput (in thousands of
barrels)(15).................. 106,537 64,312
Vessel calls(16)................ 920 728
</TABLE>
- ------------------
(1) Prior to January 12, 1996, the Company was a wholly-owned subsidiary of CBI.
On January 12, 1996, pursuant to the merger agreement dated December 22,
1995, CBI became a wholly-owned subsidiary of Praxair. This merger
transaction was reflected in the combined financial statements of the
Company as a purchase, effective January 1, 1996. The application of
purchase accounting resulted in changes to the historical basis of various
assets. Accordingly, the information provided for periods subsequent to
December 31, 1995, is not comparable to the information provided for the
earlier periods and dates (Pre-Praxair Acquisition).
(2) The pro forma amounts reflect the historical operations of the Company as
adjusted to reflect the impact of the Transactions and reclassification of
Assets held for sale as if they had occurred at the beginning of the period
presented for operations data and as if they had occurred on September 30,
1996 for balance sheet data. See 'Unaudited Pro Forma Combined Financial
Data.'
(3) Pro forma interest expense reflects the debt incurred in connection with the
Transactions at the interest rate of 11.75% per annum.
(4) The reduction in total assets from December 31, 1995 to September 30, 1996
resulted primarily from the application of purchase accounting effective
January 1, 1996 ($95,446 reduction). See Post-Praxair Acquisition Financial
Statements and the Notes thereto set forth on pages F-15 through F-20. The
increase in pro forma total assets as of September 30, 1996 resulted
primarily from the termination of the First Salute Leasing, L.P. off balance
sheet financing in connection with the Transactions.
(5) Pre-Praxair Acquisition total debt includes only third-party debt. The
Company was financed through a combination of third-party debt and,
effective with the Praxair Acquisition, $10,000 of pushed-down debt from the
application of purchase accounting. Advances from Praxair and CBI were
non-interest bearing.
(Footnotes continued on next page)
32
<PAGE>
(Footnotes continued from previous page)
(6) Certain of Parent's preferred stock contain features which require Parent to
cause the Company to dividend or otherwise remit the proceeds of the sale of
certain assets. See 'Notes 2 and 3 to Unaudited Pro Forma Combined Balance
Sheet.'
(7) The reduction of total stockholders' equity between December 31, 1995 and
September 30, 1996 resulted from the application of purchase accounting
effective January 1, 1996 ($105,446 reduction; see Post-Praxair Acquisition
Financial Statements and the notes thereto set forth on pages F-15 through
F-20); the payment of $25,789 dividends to Praxair affiliates; and net
income after preferred stock dividends of $845.
(8) EBIT is defined as the sum of income before income tax provision (benefit),
interest expense and the portion of the First Salute Leasing, L.P. lease
payment that represents interest expense for the period prior to the
Transactions. The amount of the First Salute Leasing, L.P. related interest
expense included in the calculation was $5,741 for the year ended December
31, 1995, and $4,183 and $4,621 for the nine months ended September 30, 1995
and September 30, 1996, respectively.
(9) EBITDA is defined as the sum of (i) income before income tax provision
(benefit), (ii) interest expense, (iii) depreciation and amortization and
(iv) the portion of the First Salute Leasing, L.P. lease payments that
represents interest expense for the period prior to the Transactions. The
amount of the First Salute Leasing, L.P. related interest expense included
in the calculation was $5,741 for the year ended December 31, 1995 and
$4,183 and $4,621 for the nine months ended September 30, 1995 and September
30, 1996. EBITDA is presented not as an alternative measure of operating
results or cash flow from operations (as determined in accordance with
generally accepted accounting principles), but rather to provide additional
information related to the debt servicing ability of the Company.
(10) The effective tax rate of the Company is based upon the level of pre-tax
income, or loss, incurred in each tax jurisdiction. Certain locations
include separate legal entities that restrict the ability of the Company to
offset pre-tax income against pre-tax losses from other entities. Further,
certain entities, including STNV, are subject to minimum tax computations
which, depending on the level of pre-tax income, may have a significant
impact on the effective tax rate of the Company See 'Note 7 to Pre-Praxair
Acquisition Financial Statements.'
(11) Excludes capital spending of $400, $86,595, and $1,518 during 1993, 1994
and 1995, respectively, financed through an operating lease arrangement
with First Salute Leasing, L.P. and capital spending at Point Tupper prior
to acquisition in October, 1993.
(12) For purposes of this ratio, interest expense includes the First Salute
Leasing, L.P. lease payments.
(13) The ratio of earnings to fixed charges is expressed as the ratio of fixed
charges plus pretax earnings to fixed charges. Fixed charges consist
principally of interest expense, amortization of debt expense, preferred
stock dividends and the interest component of rent expense. Earnings were
insufficient to cover fixed charges for the pro forma nine months ended
September 30, 1996 by $1,278. The pro forma ratio of earnings to fixed
charges are calculated on the same basis as the historical ratios of
earnings to fixed charges.
(14) Represents the storage capacity leased to third parties weighted for the
number of days leased in the month divided by the capacity available for
lease.
(15) Represents the total number of inbound barrels discharged from a vessel,
tank, rail car or tanker truck, not including across-the-dock or
tank-to-tank transfers.
(16) A vessel call occurs when a vessel docks or anchors at one of the Company's
terminal locations in order to load and/or discharge cargo and/or to take
on bunker fuel. Such dockage or anchorage is counted as one vessel call
regardless of the number of activities carried on by the vessel. A vessel
call also occurs when the Company sells and delivers bunker fuel to a
vessel not calling at its terminals for the above purposes.
33
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
OVERVIEW
For purposes of the discussion below, reference is made to the historical
Combined Financial Statements of Statia Terminals, Inc. and its Subsidiaries and
Affiliates as of December 31, 1993, 1994 and 1995 and the years then ended, the
Pre-Praxair Acquisition income statement and for the nine months ended September
30, 1995 and the Post-Praxair Acquisition balance sheet and income statement as
of September 30, 1996 and for the nine months then ended. Reference is also made
to 'Risk Factors.' The Company prepares its financial statements in accordance
with U.S. generally accepted accounting principles. All figures are in U.S.
dollars unless otherwise indicated.
Primarily as a result of increased storage capacity from 7.5 million
barrels as of December 31, 1992 to 20.4 million barrels as of December 31, 1995,
and the addition of ancillary services, total revenues increased from $112.1
million for the year ended 1993 to $135.5 million for the year ended 1995. The
Company expanded to its third location, Point Tupper, Nova Scotia, during 1992
and completed refurbishment of this 7.5 million barrel facility during 1994 (a
total capital investment of $74.1 million). At St. Eustatius during the fourth
quarter of 1993, the Company commenced construction of five million barrels of
crude oil storage and a SPM system (the 'St. Eustatius Crude Project'), which
was completed and leased during the first quarter of 1995 (total capital
investment of $107.5 million). Over the three year period from 1993 to 1995, the
Company added crude oil storage and related services to its established fuel
oil, clean products, consumable oils and chemicals storage and related services.
In addition to blending and other ancillary services, the Company added marine
emergency response services at both St. Eustatius and Point Tupper and a limited
refining capability through its atmospheric distillation unit at St. Eustatius
during 1995. Finally, during the fourth quarter of 1995 and the first quarter of
1996, investments were made in a heating system and butane sphere at Point
Tupper. These additions to capacity have led to higher capacity leased and more
throughput and, therefore, higher revenues from storage, throughput and
ancillary services. Revenues from storage, throughput and ancillary services
(consisting of storage, throughput, wharfage and other terminal services) have
grown from $34.8 million to $43.1 million to $54.7 million for the years ended
December 31, 1993, 1994 and 1995, respectively.
34
<PAGE>
The following table sets forth, for the periods indicated, certain key
statistics for each of the Company's operating locations.
CAPACITY, CAPACITY LEASED, THROUGHPUT AND VESSEL CALLS BY LOCATION
(Capacity and Throughput in thousands of barrels)
<TABLE>
<CAPTION>
FOR THE
NINE MONTHS
FOR THE YEARS ENDED DECEMBER ENDED SEPTEMBER
31, 30,
------------------------------- ------------------
1993 1994 1995 1995 1996
------ ------ ------- ------ ------
<S> <C> <C> <C> <C> <C>
St. Eustatius
Capacity....................................... 6,334 6,334 11,334 11,334 11,334
Capacity leased................................ 84.9% 87.3% 90.4% 90.9% 80.8%
Throughput..................................... 26,295 34,223 72,420 53,409 50,134
Vessel calls................................... 798 866 825 643 684
Point Tupper
Capacity....................................... 3,607 7,404 7,404 7,404 7,404
Capacity leased................................ 68.0% 86.0% 61.4% 61.7% 54.8%
Throughput..................................... 5,592 19,507 34,117 23,220 14,178
Vessel calls................................... 43 76 95 66 44
Brownsville (being held for sale)
Capacity....................................... 1,649 1,649 1,649 1,649 1,649
Capacity leased................................ 70.1% 87.8% 46.0% 47.1% 39.1%
Throughput..................................... 5,704 6,900 3,268 2,672 1,704
Vessel calls................................... 126 121 53 36 52
All locations
Capacity....................................... 11,590 15,387 20,387 20,387 20,387
Capacity leased................................ 79.3% 86.5% 76.0% 76.4% 68.0%
Throughput..................................... 37,591 60,630 109,805 79,301 66,016
Vessel calls................................... 967 1,063 973 745 780
</TABLE>
Primarily as a result of backwardation in the petroleum markets, which
creates a disincentive to store oil, storage, throughput and ancillary services
revenues and operating net income have decreased recently. Storage, throughput
and ancillary services revenues fell 9.0% for the first nine months of 1996
versus the comparable period for 1995. In addition, the operations at St.
Eustatius suffered damages from Hurricanes Iris, Luis and Marilyn (the '1995
Hurricanes') causing closure of the terminal during the third quarter of 1995.
Repair of damages caused by the 1995 Hurricanes and installation of certain
improvements were substantially completed during the third quarter of 1996 at an
estimated cost of $19.4 million, of which $12.6 million was recovered from
insurance carriers (the remaining $6.8 million having been principally expended
on improvements). Lastly, the Company's operating expenses have increased 21.7%
for the first nine months of 1996 compared to the same period for 1995 due
primarily to the impact of adding 32.3%, measured by volume, of additional
capacity during the first quarter of 1995. Except for inflationary cost
increases, cost increases due to additional storage capacity and costs of
providing additional ancillary services, the operating costs of the Company are
relatively fixed and generally do not change significantly with changes in
capacity leased. Additions or reductions in storage lease and throughput
revenues directly impact operating income.
35
<PAGE>
The following table sets forth, for the periods indicated, the total net
operating income (loss) after allocation of selling and administrative expenses
at each of the Company's operating locations and the percentage such net
operating income (loss) bears to the total net operating income of the Company.
OPERATING INCOME (LOSS) BY LOCATION
(Dollars in thousands)
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
-----------------------------------------------------------------
1993 1994 1995
------------------- ------------------- -------------------
% % %
$ OF TOTAL $ OF TOTAL $ OF TOTAL
------- -------- ------- -------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
Netherlands Antilles and the Caribbean............ $ 9,339 72.7% $13,516 83.8% $13,072 117.1%
Canada............................................ 2,805 21.8 1,291 8.0 (522) (4.7)
U.S............................................... 694 5.5 1,326 8.2 (1,391) (12.4)
------- -------- ------- -------- ------- --------
Total........................................... $12,838 100.00% $16,133 100.00% $11,159 100.00%
------- -------- ------- -------- ------- --------
------- -------- ------- -------- ------- --------
</TABLE>
On January 12, 1996, pursuant to the merger agreement dated December 22,
1995, CBI, the ultimate parent company of the operations of the Company prior to
the Acquisition, became wholly-owned by Praxair. This merger transaction was
reflected in the combined financial statements of the Company as a purchase
effective January 1, 1996. The application of purchase accounting has resulted
in changes to the historical cost basis of accounting for various assets.
Accordingly, the information provided for periods subsequent to December 31,
1995 is not necessarily comparable to prior periods.
The following table sets forth, for the periods indicated, the percentage
of revenues represented by certain items in the combined statements of income of
the Company. The table and subsequent discussion should be read in conjunction
with the Combined Financial Statements appearing at Page F-1 of this Prospectus.
The historical operating results are not necessarily indicative of the future
operating results or business and financial condition of the Company.
HISTORICAL AND PRE-PRAXAIR ACQUISITION INCOME STATEMENT
(Dollars in thousands)
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
-----------------------------------------------------------------
1993 1994 1995
------------------- ------------------- -------------------
% OF % OF % OF
DOLLARS REVENUES DOLLARS REVENUES DOLLARS REVENUES
------- -------- ------- -------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
Revenues:
Storage, throughput and ancillary
services................................ $34,800 31.1% $43,096 32.5% $54,701 40.4%
Bunker and bulk product sales.............. 77,276 68.9 89,570 67.5 80,840 59.6
------- -------- ------- -------- ------- --------
Total revenues............................. 112,076 100.00 132,666 100.00 135,541 100.00
Cost of services and products sold........... 94,850 84.6 111,194 83.8 117,482 86.7
------- -------- ------- -------- ------- --------
Gross profit............................... 17,226 15.4 21,472 16.2 18,059 13.3
Selling and administrative expenses.......... 4,388 3.9 5,339 4.0 6,900 5.1
------- -------- ------- -------- ------- --------
Income from operations..................... 12,838 11.5 16,133 12.2 11,159 8.2
Interest expense............................. 726 0.6 3,114 2.3 4,478 3.3
Other expense (income)....................... 83 0.1 (1,108) (0.8) 298 0.2
------- -------- ------- -------- ------- --------
Income before income taxes and preferred
stock dividends......................... 12,029 10.8 14,127 10.7 6,383 4.7
Provision for income taxes................... 1,873 1.7 1,219 0.9 390 0.3
Preferred stock dividends.................... 110 0.1 1,964 1.5 1,424 1.1
------- -------- ------- -------- ------- --------
Net income................................. $10,046 9.0% $10,944 8.3% $ 4,569 3.3%
------- -------- ------- -------- ------- --------
------- -------- ------- -------- ------- --------
</TABLE>
36
<PAGE>
RESULTS OF OPERATIONS
COMPARISON OF PRE-PRAXAIR ACQUISITION RESULTS OF OPERATIONS FOR THE NINE MONTHS
ENDED SEPTEMBER 30, 1995 AND POST-PRAXAIR ACQUISITION RESULTS FOR THE NINE
MONTHS ENDED SEPTEMBER 30, 1996
The following table sets forth, for the periods indicated, revenues
(excluding intercompany sales) at each of the Company's locations and the
percentage such revenues bear to the total revenues of the Company for the nine
months ended September 30, 1995 and 1996.
NINE MONTH REVENUES AND OPERATING INCOME (LOSS) BY LOCATION(1)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
FOR THE NINE MONTHS ENDED SEPTEMBER 30,
--------------------------------------------
PRE-PRAXAIR POST-PRAXAIR
ACQUISITION ACQUISITION
-------------------- --------------------
1995 1996
-------------------- --------------------
% %
$ OF TOTAL $ OF TOTAL
-------- -------- -------- --------
<S> <C> <C> <C> <C>
REVENUES
Netherlands Antilles and the Caribbean............................... $ 94,338 90.5% $105,171 91.5%
Canada............................................................... 8,063 7.7 7,904 6.9
U.S.................................................................. 1,917 1.8 1,902 1.6
-------- -------- -------- --------
Total.............................................................. $104,318 100.0% $114,977 100.00%
-------- -------- -------- --------
-------- -------- -------- --------
</TABLE>
<TABLE>
<S> <C> <C> <C> <C>
OPERATING INCOME (LOSS)
Netherlands Antilles and the Caribbean............................... $ 11,296 115.3% $ 8,418 141.8%
Canada............................................................... (511) (5.2) (1,608) (27.1%)
U.S.................................................................. (985) (10.1) (872) (14.7%)
-------- -------- -------- --------
Total.............................................................. $ 9,800 100.0% $ 5,938 100.0%
-------- -------- -------- --------
-------- -------- -------- --------
</TABLE>
- ------------------
(1) Intercompany sales have been eliminated.
Revenues aggregated $115.0 million for the nine months ended September 30,
1996, an increase of $10.7 million, or 10.2%, from the nine-month results for
1995 of $104.3 million. Primarily as a result of decreasing storage, throughput
and ancillary revenues and a 21.7% increase in operating expenses between the
comparable periods ended September 30, 1995 and 1996, net operating income fell
39.4%, or $3.9 million, from $9.8 million for the first nine months of 1995 to
$5.9 million for the first nine months of 1996.
Storage, throughput and ancillary revenues were $37.3 million for the nine
months ended September 30, 1996 compared to $41.0 million, down $3.7 million, or
9.0% from the same period for 1995. At St. Eustatius, storage, throughput and
ancillary services revenues were down $2.1 million, or 6.8%, and at Point Tupper
these revenues were down $1.6 million, or 19.5%. The decreases are primarily due
to non-renewal of storage leases by some customers as a result of backwardation
in the petroleum markets, reduced throughput from existing customers, and
uncertainty as to the Company's future ownership due to Praxair's announced plan
to dispose of the business.
Revenues from sale of bunker fuel and bulk product were $77.7 million for
the nine months ended September 30, 1996 compared to $63.3 million for 1995, an
increase of $14.4 million, or 22.8%. The change is due primarily to an increase
in bunker fuel volume delivered at higher average selling prices partially
offset by a reduction in bulk product volume sold. Gross margins on bunker fuel
and bulk product sales, both in dollar terms and as a percentage of revenues,
are little changed when comparing the first nine month periods of 1995 and 1996.
While volumes of bulk product sales were down, gross margins have improved
slightly.
Operating expenses were $37.1 million for the nine months ended September
30, 1996 compared to $30.5 million for the same period in 1995, an increase of
$6.6 million, or 21.7%. The increase is primarily due to higher depreciation
expense during the first nine months of 1996 as a result of completion of
various
37
<PAGE>
capital projects during 1995, including the St. Eustatius Crude Project
(however, see discussion below of offsetting depreciation adjustment as a result
of Praxair's acquisition). With the inception of operations for the St.
Eustatius Crude Project during the first quarter of 1995, personnel costs and
related fringe benefits, marine charter costs and other expenses gradually
increased. The Company has also incurred higher insurance costs and fees for
professional services (which do not include fees for the Transactions) for the
first nine months of 1996 as compared to the same period for 1995. The Company
expects that while certain expenses for professional fees will not recur,
insurance costs will increase further in connection with increasing coverage for
the Collateral securing the Notes (see 'The Transactions') and as a result of
the Company's inability to reduce risk management costs by pooling such costs
with CBI and Praxair.
As a result of Praxair's acquisition of CBI on January 12, 1996, the
Company, following the push-down accounting rules, recognized a $85.5 million
reduction of its property and equipment as of January 1, 1996. The Company wrote
off approximately $9.9 million of goodwill and other intangible assets resulting
from prior acquisitions and transactions. As a result of this reduction and
write off, the pro-forma 1996 depreciation and amortization expenses of the
Company decreased by $4.7 million on an annualized basis.
See generally 'Risk Factors -- Recent Operating Results.'
COMPARISON OF TWELVE MONTHS ENDED DECEMBER 31, 1994 AND 1995
The following table sets forth, for the periods indicated, the total
revenues (excluding intercompany sales) at each of the Company's locations and
the percentage such revenues bear to the total revenues of the Company for the
years ended December 31, 1993, 1994 and 1995.
REVENUES BY LOCATION(1)
(Dollars in thousands)
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
--------------------------------------------------------------------
1993 1994 1995
-------------------- -------------------- --------------------
% % %
$ OF TOTAL $ OF TOTAL $ OF TOTAL
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
REVENUES
Netherlands Antilles and the Caribbean........ $101,887 90.9% $114,989 86.7% $121,899 90.0%
Canada........................................ 5,365 4.8 12,222 9.2 11,184 8.2
U.S........................................... 4,824 4.3 5,455 4.1 2,458 1.8
-------- -------- -------- -------- -------- --------
Total.................................... $112,076 100.0% $132,666 100.0% $135,541 100.0%
-------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- --------
</TABLE>
- ------------------
(1) Intercompany sales have been eliminated.
For the year ended December 31, 1995, revenues were $135.5 million, an
increase of $2.9 million, or 2.2%, over annual revenues for 1994 of $132.7
million. The Company experienced gains in bunker fuel sales and storage and
throughput services revenues and decreases in bulk product sales. Due primarily
to a 24.7% increase in operating expenses and a 29.2% increase in selling and
administrative expenses, income from operations fell from $16.1 million in 1994
to $11.2 million in 1995, a decrease of $4.9 million, or 30.8%. The Company
incurred additional expenses in anticipation of significant growth, including
higher terminal throughput, particularly at Point Tupper and Brownsville. The
Company's management believes that third and fourth quarter operating income in
1995 was lower than the results would have been had the St. Eustatius facility
not been impacted by the 1995 Hurricanes primarily due to lost business from
temporary shut down of the St. Eustatius facility.
Primarily as a result of the completion and subsequent lease of the St.
Eustatius Crude Project in the first quarter of 1995 and additional bunker
sales, revenues at St. Eustatius increased to $121.9 million from $115.0 million
for 1994, an increase of $6.9 million, or 6.0%. Partially offsetting the growth
in revenues was a reduction in bulk product sales and the detrimental impact of
the 1995 Hurricanes.
At St. Eustatius, revenues from storage and throughput services, amounted
to $41.0 million for 1995, an increase of $15.6 million, or 61.4%, above the
1994 results of $25.4 million. The increase is due to higher utilization and
throughput volumes, particularly from the St. Eustatius Crude Project, resulting
in higher revenues from storage leases, throughput charges, dock charges,
emergency response fees and other
38
<PAGE>
charges. The percentage of capacity leased for 1995 was 90.9% compared to 87.3%
for 1994. Throughput volumes increased from 34.2 million barrels to 72.4 million
barrels, an increase of 38.2 million barrels, or 111.7%, primarily as a result
of 50.1 million barrels of crude oil transshipped through the St. Eustatius
Crude Project during the year.
Revenues from delivery of bunker fuel amounted to $64.9 million for 1995,
an increase of $10.4 million, or 18.9%, from 1994 revenues of $54.5 million.
This increase is primarily due to an 8.5% increase in volumes delivered. The
Company experienced larger quantities delivered to fewer vessels in 1995 versus
1994 which allowed the Company to benefit from economies of scale for large
deliveries, including the more efficient use of equipment. Bunker sales were
also affected by an increase in average selling prices of approximately 9.6%.
The Company experienced general market price increases and a slight change in
the mix of bunker fuel sold (a movement toward higher quality fuel oil sales
which command a higher price).
Bulk product sales generated revenues of $16.0 million for 1995 compared to
$35.1 million for 1994. During 1995, as a result of shifting its primary
customer base to utilities and commercial interests in the Caribbean, the
Company realized smaller volume but higher margin sales. In previous years, the
Company bought cargo size lots of petroleum products from a key supplier for
resale to utilities in the U.S.
Revenues from storage and throughput services at Point Tupper aggregated
$11.2 million for 1995 compared to $12.2 million for 1994, a 8.2% decrease. Due
in part to the backwardation in the oil markets, most of the clean product tanks
(approximately 52% of the Point Tupper facility) remained vacant during 1995.
During 1995, 61.4% of the total available tankage was leased compared to 86.0%
for 1994. However, total throughput amounted to 34.1 million barrels for 1995,
an increase of 14.6 million barrels, or 74.9%, over 1994 throughput of 19.5
million barrels. The throughput increase is due primarily to full utilization of
the terminal's crude oil capacity for 1995 compared to only partial utilization
for 1994 as reactivation of the crude portion of the facility was completed and
leased during the third quarter of 1994.
The terminal in Brownsville, Texas (which is being held for sale) generated
revenues of $2.5 million for 1995, down 54.5%, or $3.0 million, from 1994
revenues of $5.5 million. The primary cause of the decrease was the devaluation
of the Mexican peso in December 1994 and the corresponding negative effect on
the Mexican economy during 1995. Mexican economic conditions caused several
customers who had stored petroleum and vegetable oils during 1994 not to renew
their leases or return to tanks previously utilized during their seasonal
periods. Brownsville leased 46.1% of its available capacity during 1995 compared
to 87.8% during 1994. Total throughput barrels amounted to 3.3 million for 1995
versus 6.9 million barrels for 1994. Additionally, reduced utilization of
tankage led to lower revenues from ancillary services.
Operating expenses for the 1995 year were $36.6 million, an increase of
$7.3 million, or 24.9%, over 1994 expenses of $29.3 million, primarily due to
additional depreciation and personnel expenses related to the St. Eustatius
Crude Project (which commenced operations during the first quarter of 1995) and
completion of the renovation and subsequent lease of the crude facility at Point
Tupper (which commenced operations during the third quarter of 1994). The
Company also experienced an increase in its marine charter and crew costs at St.
Eustatius due to the need for additional tug and emergency response
capabilities. Offsetting the year to year increase was a change in the
depreciable lives of certain assets in order to conform more closely with
industry standards. The Company had been depreciating its tanks and jetties over
20 and 15 years, respectively, but changed its estimated useful life to 40 and
25 years, respectively, reducing depreciation expenses by $3.4 million for 1995.
Selling and administrative expenses increased from $5.3 million for 1994 to
$6.9 million for 1995, an increase of $1.6 million, or 30.2%. This increase was
due to a higher allocation of administrative charges from CBI, the addition of
personnel, salary increases consisting primarily of cost of living adjustments
and moving expenses. The Company relocated its administrative office, at which
supervisory and policy decisions are made, from Miami, Florida to Deerfield
Beach, Florida during the summer of 1995.
Interest expense related to third party debt was $3.1 million and $4.5
million for the year ended December 31, 1994 and 1995, respectively, net of
interest capitalized to capital projects and the effects of an interest rate
swap. The higher interest expense was due to higher average interest rates
charged on the Company's floating rate loans and higher average borrowings
outstanding.
39
<PAGE>
Tax rates in the jurisdictions in which the Company operates did not change
significantly between 1994 and 1995. The provision for income taxes fell from
$1.2 million for 1994 to $0.4 million for 1995, primarily because of the
reduction of earnings at the Brownsville terminal. For 1994, Brownsville had
pretax income of $1.2 million resulting in a tax provision of $0.8 million, and
for 1995 this operation had a pretax loss of $1.6 million. Secondly, the Company
incurred the minimum profit tax payable under its Free Zone and Profit Tax
Agreement in the Netherlands Antilles of $0.3 million for 1994 and 1995, and
paid its share of Large Corporation Tax in Canada for 1994 and 1995.
Consequently, the effective tax rate of the Company was 8.6% for 1994 versus
6.1% for 1995. As of December 31, 1995, the Point Tupper terminal had net
operating loss carryforwards of $8.0 million plus investment tax credits
available to offset future taxable income.
COMPARISON OF TWELVE MONTHS ENDED DECEMBER 31, 1993 AND 1994
Total revenue for 1994 was $132.7 million, up $20.6 million, or 18.4%, from
revenues generated for 1993 of $112.1 million. Operating income rose from $12.8
million for 1993 to $16.1 million for 1994, an improvement of $3.3 million, or
25.8%. The improved results were primarily due to (i) the completion of the
reactivation of the crude facilities at Point Tupper during mid-summer 1994 and
the subsequent lease of substantially all of the tankage during the third and
fourth quarter, (ii) modest improvement in storage and throughput services
revenues at St. Eustatius and Brownsville, and (iii) higher profitability on
bunker and bulk product sales at St. Eustatius.
Storage and throughput revenues at St. Eustatius totaled $25.4 million for
1994, a 3.3% increase over the 1993 total of $24.6 million. The percentage
capacity leased also increased during this period, from 84.9% in 1993 to 87.3%
in 1994. No new storage capacity was added at St. Eustatius during 1994. Bunker
revenues increased sharply in 1994 over 1993 revenues due to an increase in
delivered volume. Metric tonnes of bunker fuel delivered totaled 570,000, an
increase of 163,000 metric tonnes, or 40.0%, over 1993 deliveries of 407,000
metric tonnes. Bunker revenues totaled $54.4 million in 1994 as compared to
$38.8 million in 1993, an increase of $15.6 million, or 40.2%. Revenues from
bulk product sales decreased $3.4 million, or 8.8% from $38.5 million in 1993 to
$35.1 million in 1994 with a corresponding decrease in volumes of 198,000
barrels, from 3.0 million barrels in 1993 to 2.8 million barrels in 1994.
The Company acquired a 24.5% common equity stake in the Point Tupper
terminal during the summer of 1992 and subsequently began reactivating this
facility with the assistance of a CBI affiliate and other stockholders. In June
1993, the facility commenced operations with the lease of a small portion of its
tankage for the blending of gasolines. In October 1993, the Company acquired all
the outstanding shares held by the other stockholders in Point Tupper Terminals
Company, Ltd. ('PTTC') for approximately $11.2 million, and after an
amalgamation created Statia Terminals Point Tupper, Incorporated. Prior to
October 1993, the Company received management fees from PTTC as consideration
for supervision of the Point Tupper refurbishment project and for operations
management, marketing and administrative services. Such management fees
aggregated $2.7 million during 1993. The reactivation project was essentially
completed by August 1994 when the crude portion of the facility was leased on a
long-term basis. From 1993 to 1994, revenues from storage and throughput
services increased by more than four-fold from $2.7 million to $12.0 million
(exclusive of management fees earned). During the fourth quarter of 1994, 96% of
Point Tupper's capacity was leased.
At Brownsville, storage and throughput revenues were $5.5 million for the
1994 year, up $0.7 million, or 14.6%, from the 1993 results of $4.8 million as
this facility experienced additional petroleum and vegetable oil throughput from
several customers. The percentage capacity leased increased from 70.1% in 1993
to 87.8% in 1994. No new storage capacity was added at the Brownsville facility
during 1994 and 368,000 barrels of capacity were added during 1993. Throughput
volume increased 21.0% in 1994 over 1993.
Operating expenses were $29.3 million in 1994, an increase of $6.7 million,
or 29.6%, over 1993 operating expenses of $22.6 million. The 1993 total only
includes operating expenses for the Point Tupper facility for the period October
20 to December 31, 1993. Prior to October 20, 1993, the Company was a minority
owner of the Point Tupper facility and accounted for its minority ownership as
an equity investment. In addition, the crude facility at Point Tupper did not
become operational until August 1994.
40
<PAGE>
As a result, the Point Tupper facility had an increase in operating expenses of
$5.7 million in 1994 over 1993.
Selling and administrative expenses totaled $5.3 million, an increase of
$0.9 million, or 21.7%, over the 1993 total of $4.4 million. The increase is due
primarily to increased wages and fringe benefits of $0.8 million. In addition,
1993 selling and administrative expenses are net of $0.6 million of expenses for
the period January 1, 1993 to October 20, 1993 allocated to PTTC.
The increase in interest expense from $0.7 million in 1993 to $3.1 million
in 1994 is due partially to having only three months of interest expense in 1993
for the Point Tupper facility versus a full twelve months in 1994. Interest
expense related to the Point Tupper crude facility began to be recognized in
August 1994. Prior to August 1994, this interest was capitalized as part of the
reactivation cost of the facility.
Income tax provision totaled $1.2 million in 1994, a decrease of $0.7
million, or 36.8%, from the 1993 income tax provision of $1.9 million. This was
due primarily to a decrease of $0.9 million in the income tax provision of
Statia Point Tupper Corp., a Delaware company (liquidated in December, 1994)
which was a minority shareholder in and earned management fee income from PTTC
during the period January 1, 1993 to October 20, 1993. This decrease was
partially offset by an increase in Brownsville's income tax provision of $0.3
million in 1994.
LIQUIDITY AND CAPITAL RESOURCES
Except for cash of the Company's Canadian subsidiaries, the Company has
been a participant in CBI's cash management system whereby all cash receipts
were swept into its parent's investment program. Cash for operations and capital
expansion has been funded by the operations of the Company, its parent and debt
facilities available to the Company (guaranteed by its parent). During 1993,
cash of $19.0 million was provided by banks and the largest usage of cash was
for purchases of property and equipment ($17.1 million). During 1994, cash from
operations provided $25.7 million, advances from the Company's parent provided
$8.3 million and sales of preferred stock to an affiliate provided $7.5 million.
The major uses of cash for 1994 were for capital expenditures of $25.4 million
(exclusive of $86.6 million financed off-balance sheet through First Salute
Leasing, L.P.) and dividends to the Company's parent and affiliates in the
amount of $21.8 million. During 1995, the major sources of cash were $25.9
million from the Company's parent and $11.5 million from operations; the major
use of cash was $37.1 million for capital to expand or sustain operations.
Existing indebtedness of the Company was repaid in connection with the
Transactions. See 'Description of Notes' and 'Description of New Bank Credit
Facility' for a summary of the terms and conditions of the Company's
indebtedness as a result of the Transactions.
The debt service costs associated with the borrowings under the New Bank
Credit Facility and the Notes will significantly increase liquidity
requirements. The Notes will accrue interest at 11 3/4% per annum and will be
payable semi-annually commencing May 15, 1997. The Notes will mature on November
15, 2003. The Indenture to the Notes limits the incurrence of additional debt by
the Company and limits the ability of the Company to pay any dividends or redeem
any capital stock and limits the Company's ability to sell its assets. The
Company may incur additional indebtedness as long as its Fixed Charge Coverage
Ratio (as defined therein) is greater than certain minimum levels. The $17.5
million New Bank Credit Facility bears interest at the Prime Rate (as defined
therein) plus .50% per annum. This facility will expire on November 27, 1999.
The Company believes that cash flow generated by its operations and amounts
available under its New Bank Credit Facility will be sufficient, until the
maturity of the Notes, to fund its working capital needs, fund its capital
expenditures and other operating requirements (including any expenditures
required by applicable environmental laws and regulations) and service its debt.
The Company's operating performance and ability to service or refinance the
Notes and to extend or refinance the New Bank Credit Facility will be subject to
future economic conditions and to financial, business and other factors, many of
which are beyond the Company's control. There can be no assurance that the
Company's future operating performance will be sufficient to service its
indebtedness or that the Company will be able to repay at maturity or refinance
its indebtedness in whole or in part.
41
<PAGE>
CAPITAL EXPENDITURES
Statia spent $17.1 million, $25.4 million and $37.1 million during 1993,
1994 and 1995, respectively, on capital expenditures, of which $9.4 million,
$18.6 million and $27.2 million, respectively, was spent to enhance the
Company's ability to generate incremental revenues. These figures exclude $88.5
million of off balance financing incurred during 1993, 1994 and 1995 for the St.
Eustatius Crude Project. During 1993 at Point Tupper, the Company completed
refurbishment of the clean products tankage and installation of blending
systems. During 1994, Statia purchased and retrofitted an emergency response
vessel for operation at St. Eustatius and completed reactivation of the crude
tankage at Point Tupper among other projects. During 1995 at Point Tupper, the
Company initiated construction of a 55,000 barrel butane sphere and a fuel oil
heating system, and purchased spill response vessels and equipment. Future
capital expenditures are expected to be lower than those in recent years as no
significant projects are currently planned. The Company's capital expenditures
are budgeted at $3.5 million for the fourth quarter of 1996, primarily for
safety, environmental and maintenance related items at St. Eustatius. Capital
expenditures for 1997 are projected at approximately $7 million, consisting
primarily of maintenance related expenditures.
The following table sets forth capital expenditures by location and
separates such expenditures into those which produce, or have the potential to
produce, incremental revenue, and those which sustain existing operations.
SUMMARY OF CAPITAL EXPENDITURES BY LOCATION
(Dollars in thousands)
<TABLE>
<CAPTION>
PRODUCE
INCREMENTAL SUSTAIN EXISTING
REVENUES OPERATIONS TOTAL % OF TOTAL
----------- ---------------- ------- ----------
<S> <C> <C> <C> <C>
YEAR ENDED DECEMBER 31, 1993
Netherlands Antilles and the Caribbean.............. $ 2,368 $7,003 $ 9,371(1) 54.7%
Canada.............................................. 6,988 0 6,988 40.7
U.S................................................. 0 788 788 4.6
----------- ------- ------- ----------
Total........................................... $ 9,356 $7,791 $17,147 100.0%
----------- ------- ------- ----------
----------- ------- ------- ----------
YEAR ENDED DECEMBER 31, 1994
Netherlands Antilles and the Caribbean.............. $11,384 $3,405 $14,789(1) 58.1%
Canada.............................................. 6,913 2,584 9,497 37.3
U.S................................................. 276 878 1,154 4.6
----------- ------- ------- ----------
Total........................................... $18,573 $6,867 $25,440 100.0%
----------- ------- ------- ----------
----------- ------- ------- ----------
YEAR ENDED DECEMBER 31, 1995
Netherlands Antilles and the Caribbean.............. $18,926 $6,342 $25,268(1)(2)(3) 68.0%
Canada.............................................. 7,912 1,755 9,667 26.0
U.S................................................. 325 1,878 2,203 6.0
----------- ------- ------- ----------
Total........................................... $27,163 $9,975 $37,138 100.0%
----------- ------- ------- ----------
----------- ------- ------- ----------
NINE MONTHS ENDED SEPTEMBER 30, 1996
Netherlands Antilles................................ $ 833 $2,545 $ 3,378(2)(3) 60.0%
Canada.............................................. 553 247 800 14.2
U.S................................................. 18 1,431 1,449 25.8
----------- ------- ------- ----------
Total........................................... $ 1,404 $4,223 $ 5,627 100.0%
----------- ------- ------- ----------
----------- ------- ------- ----------
</TABLE>
- ------------------
(1) Excludes capital spending of $0.4 million, $86.6 million, $1.5 million
during 1993, 1994 and 1995, respectively, financed off balance sheet through
a leveraged lease arrangement with First Salute Leasing, L.P.
(2) Excludes repairs and improvements of $8.1 million spent in 1995 and
approximately $11.3 million spent through the third quarter of 1996 on
certain facilities damaged or destroyed by the 1995 Hurricanes.
(3) Excludes $12.6 million of proceeds received from insurance and $6.8 million
of capitalized hurricane related enhancements.
The Company financed the St. Eustatius Crude Project through a leveraged
lease arrangement, effectively removing $88.5 million of assets and liabilities
from its balance sheet (See 'Note 5 to the Combined Financial Statements'). The
Company leased land to a special purpose financing entity, First Salute Leasing,
L. P., upon which the crude tanks were constructed. The facilities of the St.
Eustatius Crude Project are leased back to the Company. During the life of the
lease, the Company accounts for monthly lease payments, consisting primarily of
interest on the underlying financing, and recognizes an accrual towards the
residual guarantee value within the line item cost of services and products
sold. During
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<PAGE>
1995, the Company paid $5.7 million to First Salute Leasing, L.P. which
consisted primarily of interest costs on the underlying debt. All obligations
under the lease were satisfied prior to the Transactions and the related assets
were included on the balance sheet at that time.
ENVIRONMENTAL MATTERS
The Company's subsidiaries are subject to comprehensive and periodically
changing foreign, federal, state and local environmental laws and regulations,
including those governing oil spills, emissions of air pollutants, discharges of
wastewater and storm waters, and the disposal of non-hazardous and hazardous
waste. In 1993, 1994, and 1995, the capital expenditures of the Company for
compliance with environmental laws and regulations were approximately $0.4
million, $1.4 million, and $3.4 million, respectively. Expenditures during 1994
and 1995 consisted primarily of the purchase of spill response vessels and
equipment at Point Tupper to comply with new Canadian legislation. These figures
do not include routine operational compliance costs, such as the costs for the
disposal of hazardous and non-hazardous solid waste, which were approximately
$0.1 million, $0.3 million, and $0.6 million in 1993, 1994, and 1995,
respectively. The Company believes it is presently in substantial compliance
with applicable laws and regulations governing environmental matters.
In connection with the Acquisition, studies were undertaken by and for
Praxair to identify potential environmental, health and safety matters. Certain
matters involving potential environmental costs were identified at the Point
Tupper facility. Praxair has agreed to pay for certain of these costs currently
estimated at approximately $3.0 million representing certain investigation,
remediation, compliance and capital costs. To the extent that certain of these
matters exceed this estimate, Praxair has agreed to reimburse the Company for
these future expenditures. Additionally, the Company has identified additional
environmental costs at Point Tupper of approximately $1.0 million. These future
costs will be expensed as incurred or capitalized as property and equipment. The
Company believes that these environmental costs subject to the foregoing
reimbursements will not have a material adverse effect on the Company's
financial position or results of operations.
The Company anticipates that it will incur additional capital and operating
costs in the future to comply with currently existing laws and regulations, new
regulatory requirements arising from recently enacted statutes, and possibly new
statutory enactments. As U.S. and foreign government regulatory agencies have
not yet promulgated the final standards for proposed environmental programs, the
Company cannot at this time reasonably estimate the cost for compliance with
these additional requirements (some of which will not take effect for several
years) or the timing of any such costs. However, management believes any such
costs will not have a material adverse effect on the Company's business and
financial condition or results of operations.
See generally 'Risk Factors -- Impact of Environmental Regulation;
Governmental Regulation' and 'Business--Environmental, Health and Safety
Matters.'
OTHER MATTERS
The general rate of inflation in the countries where the Company operates
has been relatively low in recent years causing a modest impact on operating
costs. Typically, inflationary cost increases result in adjustments to storage
and throughput charges because long-term contracts contain price escalation
provisions. Bunker fuel and bulk product sales prices are based on active
markets and the Company is generally able to pass any cost increases to
customers.
Except for minor local operating expenses in Canadian dollars and
Netherlands Antilles guilders, all of the Company's transactions are in U.S.
dollars. Therefore, the Company believes it has no significant exposure to
exchange rate fluctuation.
The Company maintains insurance policies on insurable risks at levels it
considers appropriate. At the present time, the Company does not carry business
interruption insurance due to, what the Company believes, are excessive premium
costs for the coverage provided. While the Company believes it is adequately
insured, future losses could exceed insurance policy limits, or under adverse
interpretations, be excluded from coverage. Future liability or costs, if any,
incurred under such circumstances could adversely impact cash flow. See
'Business -- Insurance.'
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INDUSTRY
The liquid terminaling industry includes oil producing countries,
integrated oil companies, refiners, pipeline operators and independent
terminaling operators such as the Company. A substantial portion of crude oil
and petroleum products storage terminals in the world are 'captive,' i.e., they
are owned by producers, refiners and pipeline operators and used almost
exclusively for their own operations. The independent terminaling operator
segment of the industry in which the Company competes, and which is described in
this Prospectus, excludes the captive portion of the industry. Such captive
terminals are only occasionally made available to the market on a short-term
basis and lack certain competitive advantages of independent operations, the
most important of which is confidentiality.
The size of the independent terminaling operator segment of the industry is
difficult to assess. The Independent Liquid Terminals Association ('ILTA')
provides an indication of the size of this segment of the industry. The ILTA is
an international trade association that represents commercial operators of bulk
liquid terminals, above-ground tank storage facilities, and pipeline facilities
located in North and South America, Europe, Asia, the United Kingdom, Australia,
New Zealand and South Africa. As published in the 1995 ILTA Bulk Liquids
Terminals Directory, the 87 ILTA member companies operated 471 deepwater barge
and pipeline terminals with an aggregate capacity of over 310 million barrels of
dry bulk and liquid storage capacity in more than 13,340 tanks. More than 400 of
these bulk liquid terminals are located in the U.S. and represent over 264
million barrels of capacity.
The liquid terminaling industry consists of two market segments. One
segment is characterized by the ownership and management of terminals inland
along major crude oil or petroleum product pipelines. This segment is
principally engaged in the distribution of crude oil to inland refineries or of
petroleum products to wholesalers via pipeline, rail or truck. The second major
segment of the industry is marine terminaling. This segment is principally
engaged in bulk storage and transshipment of crude oil and petroleum products of
domestic and overseas producers, traders, refiners and distributors. The Company
is principally engaged in marine terminaling operations, primarily on St.
Eustatius and at Point Tupper.
Demand for the Company's services is primarily dependent on the supply of
and demand for crude oil and petroleum products in the U.S. According to the
U.S. DOE, U.S. crude oil demand increased at a compound annual growth rate of
1.2% between 1992 and 1995. While demand in the U.S. has risen, domestic crude
oil production has continued to fall. According to the U.S. DOE, U.S. crude oil
production has fallen at a compound annual rate of 3.0% between 1992 and 1995.
According to the DOE, the importation of crude oil into the U.S. has increased
at a compound annual growth rate of 5.7% between 1992 and 1995. According to the
Journal, U.S. refinery utilization was near its peak capacity at 95.1% as of
September 30, 1996. The Company believes that the U.S. economy will increasingly
rely upon imports of both crude oil and refined products to satisfy its
requirements. According to PIRA, U.S. crude oil imports are projected to
increase at a compound annual growth rate of 1.1% between 1996 and 2000 while
U.S. refined products imports are projected to increase at a compound annual
growth rate of 1.3%.
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[Insert Graphic]
Source: U.S. Department of Energy
Customers use marine liquids terminals for petroleum products generally for
five reasons: (i) to take advantage of shipping economies of scale by
transporting petroleum products in bulk to a terminal as near to the ultimate
destination as possible where those products can be loaded onto smaller vessels
for onward shipping; (ii) to blend petroleum products to meet market
specifications; (iii) to process petroleum products stored by their customers by
distillation to add value for a specific downstream market; (iv) to store
temporarily product to capitalize on market opportunities for product sales; and
(v) to access fuel for consumption by marine vessels.
BULK CARGO MOVEMENT
Companies seeking to obtain economic advantage through freight savings on
long hauls will ship crude oil or refined products in either VLCCs or ULCCs to a
transshipment point such as one of the Company's terminals, where they will
discharge, store and then load their cargoes onto smaller ships for movement to
the ultimate market. Shippers may alternatively transport crude oil or refined
products as near to the market as possible in a VLCC or ULCC and then transfer
the cargo, while at sea, directly to one or more smaller ships that will meet
the specifications of the port of discharge -- an operation known as
'lightering.' Transshipment or lightering is generally required for shipment to
the U.S. because only one port (the Louisiana Offshore Oil Port) in the U.S. can
accommodate fully-laden VLCCs and ULCCs. The Company's St. Eustatius facility
has the capability to receive the largest fully-laden VLCCs and ULCCs, and its
Point Tupper facility can receive substantially all of such tankers. VLCCs and
ULCCs will often enter into otherwise restricted ports when their cargo has been
sufficiently reduced to enable such entry.
Terminaling offers several advantages over lightering. Terminaling provides
more flexibility in the scheduling of deliveries and the ability to deliver to
multiple points or customers. In addition, terminaling is generally safer and
more environmentally sound because lightering is often conducted while at sea
and is subject to adverse weather and sea conditions. The U.S. Oil Pollution Act
of 1990 ('OPA 90') imposes unlimited carrier liability for spills in U.S.
territorial waters. Carrier liability provisions in respect of oil pollution
also exist under Canadian law pursuant to the Canada Shipping Act. Lightering in
U.S. and Canadian territorial waters therefore creates a risk of liability for
owners and shippers that is mitigated by
45
<PAGE>
terminaling. Discharging by lightering takes significantly longer than
discharging at a terminal (for example, a fully-loaded ULCC requires
approximately six to seven days for fully discharging by lightering but only 24
to 36 hours for fully discharging at the St. Eustatius or the Point Tupper
terminal). In addition, terminaling offers oil producers the ability to store
oil, and in the Company's case, in close proximity to the U.S. Under current
market conditions, lightering has, in most instances, some cost advantages over
terminaling (primarily by allowing the VLCCs and ULCCs to cover a larger portion
of the total journey). These advantages depend on the relative charter costs of
VLCCs and ULCCs, on the one hand, and of the smaller tankers used for lightering
and shuttling from terminals to the ultimate destination ports, on the other
hand.
OPA 90 prohibits single-hulled tankers built after 1990 from entering U.S.
territorial waters (regardless of whether for lightering or docking purposes).
In addition, OPA 90 prohibits all vessels utilizing single-hulls from entering
U.S. territorial waters after 2010. The Canadian Standards for Double Hull
Construction of Oil Tankers prohibit single-hulled vessels constructed after
July 1993 from entering Canadian territorial waters. Currently, approximately
96% of the world's VLCC and ULCC tanker fleet is single-hulled. The substantial
majority of such vessels were built prior to 1990.
BLENDING
Stringent environmental regulations for refined petroleum products in both
the U.S. and European marketplaces have created an increasing demand for
facilities that can blend a variety of blendstocks into finished products that
meet such regulations and customers' specific requirements. Providing this
service requires specialized equipment (including static mixers and jet nozzles)
and expertise. In addition, blenders must have in inventory or in tank the full
range of blendstocks. The evolving reformulated gasoline market in the U.S.
(resulting primarily from emission-reduction regulations, including the Clean
Air Act, as amended), tightening specifications for distillates and the
increasing need for blended bunker fuel generally required by most newer vessels
are expected to enhance the growth of the product blending segment of the
terminaling industry.
PROCESSING
For products that cannot be blended to meet certain environmental
specifications, certain terminaling companies offer processing services. The two
methods used to process crude oil into various components are cracking and
atmospheric distillation. Cracking, the process by which heavier components of
the crude oil are separated into higher valued, lighter products such as
gasoline, naphtha and distillates, is significantly more sophisticated than the
process of atmospheric distillation. The atmospheric distillation process
applies heat to separate the hydrocarbons in crude oil into a narrower range of
products. Most simple distillation units produce at least three product streams:
naphtha, distillate (heating oil) and residual fuel. The profitability of either
cracking or atmospheric distillation is dependent on the combination of
feedstock costs, operating costs and the value of the resulting products.
SEASONAL AND OPPORTUNITY STORAGE
Storage facilities allow refiners and traders to take advantage of seasonal
movements and anomalies in the crude oil and refined products markets. When
petroleum products markets are in backwardation for any length of time, the
traditional users of terminal storage facilities are less likely to store
product, thereby reducing storage utilization levels. When petroleum product
markets are in contango by an amount exceeding storage costs, time value of
money, cost of a second vessel and the cost of loading and unloading at the
terminal, the demand for storage capacity at terminals usually increases.
Historically, heating oil has been in contango during the summer months and
gasoline has been in contango during the winter months. There can be no
assurance, however, that the market will follow this pattern in the future. For
example, since mid-1995, all segments of the petroleum products markets have
been in backwardation. As a result, the Company believes that utilization of its
facilities has been adversely impacted.
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<PAGE>
[INSERT CHART]
Price Data Supplied by New York Mercantile Exchange
Several factors have contributed to the present extended backwardation in
the crude oil and petroleum products markets, including the anticipation of
Iraqi crude oil entering the market, strong demand for petroleum products, and
the closing of a major oil refinery in the northeast U.S. The result has been a
continued industry-wide erosion in leased tank capacity as well as in the rates
paid for that tank capacity.
BUNKER SALES
The term 'bunkering' refers to the sale and delivery of fuels to be
consumed by marine vessels for their own propulsion. The customer base and
suppliers of bunker fuel are located worldwide. Sales of bunker fuel (diesel
oil, gas oil, and fuel oil) are primarily driven by the proximity of the
terminal location to major shipping routes, the amount of cargo carried by
marine vessels and the price, quantity and quality of bunker fuel.
Bunker fuel is sold under international standards of quality that are
recognized by both fuel suppliers and ship operators. As the raw materials for
the blended marine fuels are purchased in bulk lots, each supplier is
responsible for the quality control/merchantability aspects of the fuel that
they sell.
Traditionally, the bunker business was concentrated in those ports where
either high volume of ship traffic occurred or where primary sources of refined
marine fuels were located. In many cases, the two overlapped. In recent years, a
reduction in the number of refiner/suppliers in many ports together with changes
in environmental laws in the U.S. and Europe has increased the supply of bunker
fuel at offshore delivery locations. As an alternative to in-port supply at
either the vessel cargo loading or discharging location, the offshore supplier
must provide reliability of supply, speed of delivery, consistent quality and
overall safety standards to attract ship operators.
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<PAGE>
BUSINESS
INTRODUCTION AND HISTORY
The Company believes that, measured by capacity, it is among the five
largest independent marine terminaling companies in the world. The Company
primarily provides crude oil, refined products and other bulk liquids
terminaling services to some of the world's largest producers of crude oil,
integrated oil companies, oil traders and refiners, and petrochemical companies.
The Company's services are utilized by customers whose products are transshipped
through the Company's facilities to the Americas and Europe. The Company owns,
leases and operates three storage and transshipment facilities located at (i)
the island of St. Eustatius, Netherlands Antilles; (ii) Point Tupper, Nova
Scotia, Canada; and (iii) Brownsville, Texas (which facility is being held for
sale). In connection with its terminaling business, the Company also provides
related value-added services, including bunkering (the supply of fuel to marine
vessels for their own propulsion), petroleum product blending and processing,
emergency and spill response, bulk product sales and ship services.
The Company began operations in 1982 as Statia Terminals N.V. ('STNV'), a
Netherlands Antilles corporation operating an oil products terminal located on
the island of St. Eustatius. In 1984, CBI Industries, Inc. ('CBI'), an
industrial gases and contracting services (including storage tank construction)
company, acquired a controlling interest in STNV. STNV purchased Statia
Terminals Southwest, Inc. ('STSW'), its facility at Brownsville, Texas, in 1986
and in 1993 the Company acquired the remaining shares it did not then own of
Statia Terminals Point Tupper, Incorporated ('STPT') located at Point Tupper,
Nova Scotia. In 1990, CBI became the sole owner of STNV and STSW. In 1996, CBI
was acquired by Praxair, Inc. ('Praxair'), which sold the Company to focus on
its core businesses. In November of 1996, the Issuers acquired from Praxair all
of the outstanding capital stock of Statia Terminals, Inc. and certain of its
affiliates. See 'The Transactions'.
Since 1990, the Company has grown substantially, with tank capacity
increasing from 4.4 million barrels in 1990 to 20.4 million barrels in 1995 and
revenues increasing from $86.8 million to $135.5 million over the same period.
The Company's management team and employee base have a diverse range of
experience and skills in the terminaling industry, including engineering, crude
oil and product distribution, oil trading, terminal operations, shipping,
refinery operations, product blending and finance. This experience allows
management to understand the objectives of each of the Company's customers and
to forge alliances with those customers at each of the Company's terminals to
meet those objectives. Thus, the Company believes that its operations extend
beyond the traditional approach to terminaling not only because the Company is a
premier provider of core services offered by its competitors but also because
the Company, unlike most of its competition, provides ancillary, value-added
services tailored to support the particular needs of its customers.
BUSINESS STRATEGY
The Company's business strategy is based on its belief that its performance
is driven by its ability to tailor its services to customer-specific needs, in
effect becoming an integral part of each customer's long-term liquids
distribution system. More specifically, the Company's business consists of the
following elements:
o Capitalize on Wide Range of Value-Added Services Offered. The
Company seeks to add long-term value to its customers by providing them
with superior services at the Company's strategically located terminaling
facilities. The Company's comprehensive range of terminaling-related
services currently includes bunkering, petroleum product blending and
processing, emergency and spill response, bulk product sales and ship
services. For example, the Company owns spheres for the storage of butane
at its St. Eustatius and Point Tupper facilities which enhance the
Company's gasoline blending capabilities, and an atmospheric distillation
unit available to refine petroleum products at its St. Eustatius facility.
The butane storage spheres and the atmospheric distillation unit can be
utilized by the Company to improve the quality and value of its customers'
products.
o Generate Stable Cash Flow Through Long-Term Contracts. The Company
has entered into long-term (one year or more) contracts with certain
customers. Currently all of the Company's crude oil storage capacity
(approximately 42% of total storage capacity) is leased under long-term
contracts. Such
48
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contracts, which have terms of up to five years plus renewal options,
provide for minimum monthly payments and generate stable cash flow. In
1995, approximately two-thirds of the Company's storage and throughput
revenues (excluding related ancillary services) were attributable to
long-term contracts. The Company is actively seeking additional long-term
contracts.
o Pursue Strategic Opportunities at the Point Tupper Facility. The
Company's facility at Point Tupper is one of two independent terminals on
the North American Atlantic coast with the capacity to receive
substantially all of the largest fully-laden VLCCs and ULCCs. This facility
operates the deepest independent ice-free marine terminal on the North
American Atlantic coast with market access to the U.S. East coast, Canada
and the U.S. industrial Midwest via the St. Lawrence Seaway and the Great
Lakes system. The terminal provides producers of crude oil from the North
Sea, and the emerging Grand Banks oil fields, with competitive access to
refineries in the upper Atlantic region. The Company intends to utilize the
strategic location of its Point Tupper facility to pursue long-term
contracts with oil and natural gas producers, refiners and traders in
connection with the proposed development of commercially viable fields in
the North Sea, Sable Island (off Nova Scotia) and the Grand Banks area.
Current production from the North Sea exceeds five million barrels per day
(approximately 10-11% of which is exported to North America), with
continued growth expected. The lives of existing fields are being extended
and new fields continue to come onstream. Point Tupper provides producers
in this region seeking to expand market share in the U.S. with a facility
that is approximately two and one-half days from the New York, New Jersey
and Philadelphia refineries by ship, and with access to the Sarnia, Ontario
and Chicago refineries by ship and pipeline. Producers can gain strategic
advantage by using the Point Tupper terminal to deliver cargo via VLCC and
then transshipping the cargo via smaller ships suitable to access the
shallower, draft-restricted ports on the upper East coast of the U.S. The
Company believes that currently there is no competitor in the region that
can provide the strategic and economic value for crude oil storage,
petroleum product blending and transshipment services that the Point Tupper
facility offers. Point Tupper is seeking to attract additional storage
business from producers of crude oil in the North Sea and in the emerging
production area near the Grand Banks in the upper Atlantic, located
approximately one day by ship from Point Tupper. If the Company were
successful in securing contracts for the storage of North Sea and Grand
Banks crude oil, it would have to convert all or a portion of its clean
products (consisting of gasoline, diesel and aviation fuels and related
products) storage capacity to crude oil storage and blending capacity. The
cost of such conversion would vary, depending, among other factors, on the
grade of crude oil to be stored. In addition, the Company is seeking an
integrated oil company as a customer for the blending of gasoline at Point
Tupper for the U.S. and/or Canadian Markets.
COMPETITIVE STRENGTHS
Management believes that the Company's quality and breadth of service and
market presence distinguish it as one of the leading independent marine
terminaling companies in the world. The Company believes that its strong
position in the terminaling industry and continued opportunities for growth and
operating profitability are attributable to the following competitive strengths:
o Location. The Company's facilities are strategically located near
the U.S. Gulf and East coasts. The Company's St. Eustatius facility is
located at a point of minimal deviation from the major shipping routes from
the Arabian Gulf via the Cape of Good Hope and from Western Africa to the
U.S. Gulf and East coasts and from the Panama Canal and South America to
Europe. The Company's Point Tupper facility is located on the Strait of
Canso at Point Tupper, Nova Scotia, a point of minimal deviation from the
shipping routes from the North Sea oil fields to the U.S. East coast,
Canada and the Midwestern U.S. via the St. Lawrence Seaway and the Great
Lakes system. The Point Tupper facility operates the deepest independent
ice-free marine terminal on the North American Atlantic coast. The St.
Eustatius facility can accommodate all of, and the Point Tupper facility
can accommodate substantially all of, the world's largest fully-laden VLCCs
and ULCCs.
Shipping into the U.S. from the St. Eustatius and Point Tupper
terminals is not subject to restrictions under the Jones Act. The Jones Act
mandates that cargo transported between two U.S. ports be carried only on
American-manufactured, -registered and -crewed vessels, the costs of which
are generally considerably higher than those of comparable foreign vessels.
As a result, use of the
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Company's foreign facilities is considerably more cost-effective than use
of U.S.-based marine terminals for transshipment to other U.S.
destinations.
o High Quality Assets. The marine terminaling business is capital
intensive, resulting in significant start-up costs for potential
competitors. Approximately 80% of the Company's tanks, measured by
capacity, at the terminals, together with related marine installations,
were constructed or renovated during the last six years. At St. Eustatius,
new storage facilities were constructed, increasing capacity more than
threefold since 1990. At Point Tupper, the facilities were renovated and a
former refinery site was converted into an independent storage terminal.
The Company believes that the level of automation of its facilities in
general equals or exceeds that of any of its competitors. The Company's
other facilities constructed prior to 1990 have been maintained to high
standards and are currently in good condition. The Company has a
substantial amount of unused land at St. Eustatius and at Point Tupper. See
'-- Information by Location.' EYWK has determined the appraised replacement
value of the Collateral (other than the stock of Statia Canada and the
Subsidiary Guarantors) to be approximately $715 million. An executive
summary of the Replacement Cost Appraisal is attached hereto as Annex A.
See 'Risk Factors -- Adequacy of Collateral.'
o Breadth of Service. In addition to storage, the Company provides a
comprehensive range of complementary services which generates ancillary
revenues and additional primary storage and throughput volume. Such
services include bunkering, petroleum product blending and processing,
emergency and spill response capacity, bulk product sales and ship
services.
o Management. The Company's senior management averages over 19 years
experience in terminaling-related industries. Prior to joining the Company,
members of senior management developed skills and gained experience at
companies such as Pakhoed USA, Inc., GATX Corporation, The Coastal
Corporation, Petroleos de Venezuela S.A. and Chicago Bridge & Iron Company.
This experience included training in engineering, construction and project
management, crude oil and petroleum supply and distribution, oil trading,
terminal operations, shipping, refinery operations, product blending and
finance. Senior management experience has allowed the Company to develop
key strategic relationships with customers at each of its three terminal
locations. See 'Management -- Directors and Executive Officers.'
PRODUCTS AND SERVICES
The Company provides a full range of standard storage services, including
product heating, mixing, storage in insulated and/or interior coated tanks. The
Company's facilities are capable of handling a variety of products, including
light, medium and heavy crude oils, residual fuel oil, gasoline, gasoline
blending components, diesel, marine gas and diesel oil, aviation fuel, bunker
fuel, petroleum diluents, lubricating oils, vegetable oils, caustic soda,
butane, asphalt and various chemicals.
Canadian environmental laws and regulations require ship owners,
charterers, refineries and terminals to have access to spill response
capabilities. The Company, through its wholly-owned subsidiary, Point Tupper
Marine Services Limited ('PTMS'), operates two fully-equipped spill response
vessels in Canada, one of which is located at the Point Tupper terminal and, in
the event of an oil spill, can deploy containment and clean-up equipment
including skimmers, booms, absorbents and solvents. The Company believes that
the presence of fully-equipped spill response vessels in port will be important
in attracting certain major integrated oil companies to the Point Tupper
facility.
The Company specializes in 'in-tank' or 'in-line' blending with
computer-assisted blending technology that assures specified product integrity
and homogeneity. At St. Eustatius, the Company has facilities capable of
blending and mixing a full range of refined products from gasoline through
residual fuel oils, including bunker fuel. The Company carries an inventory of
certain blendstocks to provide customers with the option of customized blending.
The Company believes that its blending capability has attracted certain
customers who have leased capacity primarily for blending purposes and who have
contributed to its bunker fuel volume and product sales. Management has worked
closely with residual fuel oil market participants to assist them with their
blending operations by offering the brokering of product blending components and
computerized blending services.
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The Company owns spheres for the storage of butane at its St. Eustatius and
Point Tupper facilities that enhance the Company's blending capabilities and an
atmospheric distillation unit used for refining at its St. Eustatius facility.
The gas storage spheres and the atmospheric distillation unit can be utilized to
improve product quality and value of the Company's customers' products.
In addition, the Company supplies bunker fuel in the Caribbean and in Nova
Scotia, Canada. In the Caribbean, fueling may take place at St. Eustatius and on
the waters off St. Kitts, St. Maarten, the U.S. Virgin Islands and Puerto Rico.
In the Caribbean, the Company's bunkering business has evolved from offering
bunker fuel to ships at the berth to a delivery system utilizing specially
modified barges which provide fuel to vessels at anchor. The Company initiated
bunker fuel service operations at Point Tupper in the first quarter of 1996 with
bunker fuel delivered ex-pipeline at the terminal and by truck in the
surrounding Strait of Canso area.
The Company purchases petroleum products primarily to cover its bunker fuel
sales. Product purchases and sales may also be made to accommodate customers who
wish to dispose of odd lots or to assist customers' sales activities and
occasionally to take advantage of an attractive buying opportunity.
For the years ended December 31, 1993, 1994 and 1995 and for the nine
months ended September 30, 1996, the Company derived approximately 31%, 32%, 40%
and 32%, respectively, of its revenues from storage and throughput revenues, and
69%, 68%, 60% and 68%, respectively, of its revenues from bunker fuel and bulk
product sales activities.
PRICING
Storage and throughput pricing in the terminaling industry is subject to a
number of factors, including general increases or decreases in petroleum product
production and consumption, political developments, seasonality in demand for
certain products and the geographic sector of the world being serviced. At the
customer level, terminal selection focuses primarily on (i) location (the
shortest shipping route being the least expensive route), (ii) quality of
service and (iii) range of services offered. Price differentials among competing
terminals are generally less important to the customer because terminaling costs
represent only a small portion of the customer's total distribution costs. The
Company's pricing strategy is based primarily on prices prevailing at the time
in the terminaling market in which it competes, but the Company also takes into
consideration the quality and range of its services compared to those of
competing terminals and cost savings from shipping to the Company's terminal
locations. In situations requiring special accommodations for the customer (e.g.
unique tank modification), the Company may price on a rate-of-return basis.
The Company enters into written storage and throughput contracts with
customers. In 1995, approximately two-thirds of the Company's storage and
throughput revenues (excluding related ancillary services) were attributable to
long-term (one year or more) storage and throughput agreements. The Company's
long-term storage and throughput agreements are individually negotiated with
users of each of the terminal facilities. However, the typical agreement
specifies tank storage volume (the 'specified volume'), the commodities to be
stored, a minimum monthly charge, an excess throughput charge and a price
escalator. In addition, there are charges for certain additional services such
as the transfer, mixing or heating of stored commodities. The minimum monthly
charge is due and payable without regard to the volume of storage capacity, if
any, actually utilized. For the minimum monthly charge, the user is allowed to
deliver, store for one month and remove the specified volume of commodities. In
addition to the minimum monthly charge, there is an additional charge for excess
throughput, i.e., if more than the specified volume is delivered during the
month. The excess throughput charge is typically at a lower rate per barrel than
the rate per barrel utilized in establishing the minimum monthly charge.
Year-to-year escalation of charges is usually governed by (i) agreement on
specific escalated amounts, (ii) application of an agreed upon index or (iii)
application of a factor reflecting increased operational costs of the terminal.
INFORMATION BY LOCATION
The day-to-day operations of the Company are managed at the respective
terminal locations. For the years ended December 31, 1993, 1994 and 1995 and for
the nine months ended September 30, 1996, the Company derived 91%, 87%, 90% and
91% of its revenues, respectively, from its St. Eustatius facility,
approximately 5%, 9%, 8% and 7% of its revenues, respectively, from its Point
Tupper facility and approximately 4%, 4%, 2% and 2% of its revenues,
respectively, from its Brownsville facility (which is being
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held for sale). See 'Management's Discussion and Analysis of Financial Condition
and Results of Operations' and Note 11 of Notes to Combined Financial Statements
of Statia Terminals, Inc. and its Subsidiaries and Affiliates.
Statia Terminals N.V.--St. Eustatius, Netherlands Antilles
The St. Eustatius facility is located on the Netherlands Antilles island of
St. Eustatius, which is 1,939 miles from Houston, 1,514 miles from Philadelphia,
552 miles from Amuay Bay, Venezuela and 1,909 miles from the Panama Canal. This
facility is capable of handling a wide range of petroleum products, including
crude oil and refined products. A two berth jetty, a floating dock, a floating
hose station and an offshore single point mooring buoy ('SPM') serve the
terminal's customers' vessels. This facility has 28 tanks with a combined
capacity of 5.2 million barrels dedicated to fuel oil storage, 11 tanks with
total capacity of 1.1 million barrels dedicated to clean products storage and
eight tanks totaling 5.0 million barrels dedicated to multigrade crude oil
storage. The fuel oil and clean product facilities have in-tank and in-line
blending capability. The crude storage is the newest portion of the facility,
having been constructed in early 1995 by Chicago Bridge & Iron Company. The
storage tanks comply with construction standards that meet or exceed API,
National Fire Prevention Association and other material industry standards.
Crude oil movements at the terminal are fully-automated. In addition to the
storage and blending services at St. Eustatius, this facility has the
flexibility to utilize certain storage capacity for both feedstock and refined
products to support its atmospheric distillation unit, which is capable of
processing up to 15,000 barrels per day of feedstock ranging from condensates to
heavy crude oil.
The St. Eustatius facility can accommodate the world's largest vessels for
loading and discharging crude oil. The SPM can handle a single fully-laden
vessel of up to 520,000 dead weight tons ('DWT') with a draft of up to 120 feet.
The SPM can discharge or load at rates in excess of 100,000 barrels per hour of
crude oil. There are six pumps connected to the SPM, each of which can pump up
to 18,000 barrels per hour from the SPM to the storage tanks. The jetty at St.
Eustatius can accommodate three vessels simultaneously. The south berth of the
jetty can handle vessels of up to 150,000 DWT with a draft of up to 55 feet. The
north berth of the jetty can handle vessels of up to 80,000 DWT with a draft of
up to 55 feet. There is also a barge loading station on the jetty. At the south
and north berths of the jetty, 25,000 barrels per hour of fuel oil can be
discharged or loaded. To accommodate the needs of its gasoline blending
customers, the Company is constructing a monopile that can handle vessels of up
to 40,000 DWT with a draft of up to 46 feet. The monopile can handle two vessels
simultaneously and can discharge or load 12,000 barrels per hour of refined
products. In addition, there is a floating hose station that the Company uses to
load bunker fuel onto its barges for delivery to clean products customers.
The emergency and spill response capability at St. Eustatius is supported
by the Statia Alert, a barge that is capable of recovering 200 gallons per
minute of oil/water mixture, and two response boats that can deploy booms and
release dispersants. The St. Eustatius facility also has three tugs on time
charter and owns two mooring launches, all of which are available for safe
berthing of vessels calling at the terminal. The Company's customers benefit by
ready access to this equipment, and the Company charges each vessel that calls
at its St. Eustatius facility a fee for this capability. At St. Eustatius, the
Company owns and operates the M/V Megan D. Gambarella, an emergency and spill
response vessel with a book value of approximately $10 million, which is being
held for sale.
Notwithstanding periods of unusually adverse market conditions, including
the backwardation that has persisted since the first quarter of 1995, the
average percentage capacity leased at the St. Eustatius facility for each of the
years ended 1991, 1992, 1993, 1994 and 1995 was 99%, 96%, 85%, 87%, and 91%,
respectively, and such capacity leased for each of the nine months ended
September 30, 1995 and 1996 was 91% and 81%, respectively. The Company believes
that this demand has been driven primarily by cost advantages associated with
the location of the facility, shipping economies of scale, product blending
capabilities and the availability of a full range of ancillary services
including bunkering at the facility. Storage capacity at the St. Eustatius
facility has grown from 2.0 million barrels of fuel oil storage in 1982 to a
present capacity of 11.3 million barrels.
The ability to blend a comprehensive range of refined products from
gasoline through residual fuel oils has contributed to the Company's success in
leasing the facility's tankage. The refined product tanks have generally been
leased at or near full capacity on a continuous basis. Management has worked
closely with
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residual fuel oil market participants to assist them with their blending
operations by offering the brokering of product blending components and
computerized blending services. STNV has a five-year (subject to renewal at the
customer's discretion) contract with a major state-owned oil producer for 5.0
million barrels of dedicated crude oil storage. This storage is being used by
the producer to service a number of its customers in the western hemisphere.
Utilization of the terminal enables the producer to transport various grades of
crude oil to markets at competitive transportation rates.
Recognizing the strategic advantage of its location in the Caribbean, the
Company delivers bunker fuel to vessels at its St. Eustatius facility. The
bunkering business has evolved from offering fuels to ships at the berth to a
delivery system utilizing specially modified barges which provide fuel to
vessels at anchorage. The location of the terminal on the leeward side of the
island, which provides natural protection for ships, generally favorable
year-round weather conditions and deep navigable water at an anchorage
relatively close to shore, attracts ships to the Company for their bunker fuel
requirements. The bunker fuel sales operation is supported by three barges owned
by the Company. These barges are used to relieve congestion at the jetty
facility and also to expedite delivery of bunker fuel to vessels that are
refueling and not discharging or loading cargo at the terminal and to deliver
bunker fuel at adjacent islands.
The Company recently commissioned its atmospheric distillation unit at St.
Eustatius. The unit is capable of processing up to 15,000 barrels per day of
feedstock ranging from condensates to heavy crude oil. This distillation unit
can produce naphtha, distillate (heating oil) and residual fuel. The Company
believes that the capability to process for third parties may create
opportunities for the Company in its bunkering operations.
The Company owns and operates all of the dock facilities at St. Eustatius
and charges separately for the use of these facilities as well as associated
services such as pilotage, tug assistance, line handling, launch service, spill
response capabilities and ship service.
Statia Terminals Point Tupper, Incorporated -- Point Tupper, Nova Scotia
The Point Tupper terminal is located in the Strait of Canso, near Port
Hawkesbury, Nova Scotia, Canada, which is 722 miles from New York City, 869
miles from Philadelphia and 2,522 miles from Mongstad Terminal in Norway. This
facility operates the deepest independent ice-free marine terminal on the North
American Atlantic coast, with access to the U.S. East coast, Canada and the
Midwestern U.S. via the St. Lawrence Seaway and the Great Lakes system. The
Point Tupper facility can accommodate substantially all of the largest
fully-laden VLCCs and ULCCs vessels for loading and discharging.
At Point Tupper, the facilities were renovated and a former oil refinery
site was converted into an independent storage terminal. This work, performed
primarily by a subsidiary of Chicago Bridge & Iron Company, was begun in 1992
and completed in 1994. The tanks were renovated to comply with construction
standards that met or exceeded API, National Fire Prevention Association and
other material industry standards.
The Company believes that its dock at Point Tupper is one of the premier
dock facilities in North America. The south berth of Point Tupper facility's
dock, Berth One, can handle fully-laden vessels of up to 400,000 DWT with a
draft of up to 85 feet. At Berth One, approximately 75,000 barrels per hour of
crude, approximately 40,000 barrels per hour of diesel or gasoline, or 12,000
barrels per hour of fuel oil can be discharged or loaded. Berth Two can
accommodate vessels of up to 80,000 DWT with drafts of up to 60 feet. At Berth
Two, approximately 25,000 barrels per hour of crude, approximately 25,000
barrels per hour of diesel or gasoline, or approximately 25,000 barrels per hour
of fuel oil can be discharged or loaded. Terminal liquid movement is fully
automated. The Point Tupper facility can dock two vessels simultaneously. The
dock facility is owned and operated by STPT, which charges separately for the
use of the dock facility as well as associated services, including pilotage, tug
assistance, line handling, launch service, spill response capabilities and ship
services.
The berths at the jetty at the Point Tupper facility connect to a 7.5
million barrel tank farm. The terminal has the capability of receiving and
loading crude oil, refined petroleum products and certain petrochemicals.
In compliance with STPT's safe handling procedures and Canadian laws
regarding the environment, the Company owns two fully-equipped emergency and
spill response vessels based in Nova Scotia one of
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which is located at Point Tupper. In addition to these vessels, the Company has
the full capability to respond to spills on land or water with a combined spill
response capability of over 2,500 metric tons at this terminal location. An
additional 7,500 metric ton spill response capability is immediately available
at Point Tupper by agreement through a response organization. The Company's
customers benefit by ready access to the equipment. In 1995, PTMS was granted
Canadian Coast Guard certification as a 'response organization' with emergency
and spill response capabilities. Consequently, vessels calling in the Strait of
Canso are now required to pay to PTMS a membership subscription fee for access
to the services provided by the emergency and spill response organization, even
if they do not dock at the Company's terminal.
There are two truck racks at the Point Tupper facility. The north truck
rack has the capability to load 550 barrels per hour of fuel oil and the south
truck rack has the capability to load 550 barrels per hour of fuel oil or up to
550 barrels per hour of diesel.
The average percentage capacity leased at the Point Tupper facility over
each of the last three years ended 1993, 1994 and 1995 was 68%, 86% and 61%,
respectively and such capacity leased for each of the nine months ended
September 30, 1995 and 1996 was 62% and 55%, respectively. The current crude oil
storage capacity is 3.6 million barrels, utilizing a total of eight tanks. The
remainder of the terminal, 3.9 million barrels, is currently equipped to
accommodate a variety of refined products including gasoline, gasoline blending
components, distillates and fuel oil. Construction of a new 55,000 barrel butane
sphere was recently completed. This sphere is one of the largest of its kind in
North America and is expected to enhance the Company's gasoline blending
operation.
In 1994, STPT entered into a long-term storage contract (with two five-year
renewal options at the customer's discretion) with a large oil refiner. This
contract commits all of the 3.6 million barrels of current crude oil storage at
the Point Tupper facility, representing approximately 48% of the terminal's
total capacity. In early 1996, STPT signed a three-year contract with an
international oil company to store fuel oil at Point Tupper. This company will
use the storage as a base for the distribution of fuel oil to be sold into the
local market via tank truck. As part of the storage agreement, STPT has secured
a supply of fuel oil from the international oil company for the development of a
bunkering business at Point Tupper. The remaining tanks at STPT, all presently
designed for the storage of gasoline, distillates, aviation fuel and other
petroleum products, are currently unleased. This unused capacity represents
approximately 45% of the total terminal capacity. The severe backwardation in
the petroleum products market since mid-1995 has adversely impacted the
utilization of the facility.
In the first quarter of 1996, STPT initiated the offering of bunkering
services at Point Tupper. Delivery of bunker fuel at Point Tupper is initially
being made to vessels at the berths.
STPT is in the process of finalizing a land exchange agreement with the
Province of Nova Scotia involving the conveyance of certain land (principally
the approximately 1,296 acres comprising Lake Landrie and certain adjacent
watershed lands) at the Point Tupper terminal site to the Province of Nova
Scotia in exchange for the conveyance by the Province of Nova Scotia of certain
unused road rights-of-way on the Company's remaining property at Point Tupper
(the 'Land Swap').
Statia Terminals Southwest, Inc. -- Brownsville, Texas.
The Company's terminal near Brownsville, which is being held for sale, is
located on a deep water port serving northeast Mexico. STSW is situated near the
U.S./Mexico border, 8 miles from Matamoros, Mexico and 17 miles inland from the
Gulf of Mexico, within the Port of Brownsville. The terminal handles refined
petroleum products, asphalt, vegetable and fish oils, lube oils, wax and
chemicals. The terminal consists of 41 tanks with an aggregate storage capacity
totaling over 1.6 million barrels. Tank sizes range from 1,500 barrels to
200,000 barrels. The tanks and associated common facilities are located on
several parcels of land that are leased from the Brownsville Navigation
District. Four docks, owned and operated by the Brownsville Navigation District,
accommodate marine vessel traffic at STSW's facility. The Brownsville facility
can handle fully-laden vessels of up to 50,000 DWT. STSW uses five railroad spur
lines with a total of 32 railcar spots to accommodate railroad tank cars. Most
of the commodities transshipped through the Company's Brownsville facility
arrive inbound by marine vessel and are subsequently loaded outbound into
railcars or tank trucks primarily for shipment into Mexico.
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COMPETITION AND BUSINESS CONSIDERATIONS
The independent terminaling industry is fragmented and includes both large,
well-financed companies that own many terminal locations and small companies
that may own a single terminal location. The Company is a member of the ILTA,
which, among other functions, publishes a directory of terminal locations of its
members throughout the U.S. Customers with specific location and facility
demands generally use the ILTA directory to identify the terminals in the region
available for specific needs and to select the preferred providers on the basis
of service, specific terminal capabilities and environmental compliance.
Customers then seek competitive proposals to ultimately select the terminal
retained.
In addition to the terminals owned by independent terminal operators, many
state-owned oil producers and major energy and chemical companies also own
extensive terminal facilities, and these terminals often have the same
capabilities as terminals owned by independent operators. While the purpose of
such terminals is to serve the operations of their owners, and they do not
normally offer terminaling services to third parties, these terminals
occasionally are made available to the market when they have unused capacity on
a short-term and irregular basis. Such terminals lack certain competitive
advantages of independent operators, the most important of which is
confidentiality.
In many instances, major energy and chemical companies that own storage and
terminaling facilities are also significant customers of independent terminal
operators. Such companies typically have strong demand for terminals owned by
independent operators when independent terminals have more cost-effective
locations near key transportation links such as deep water ports. Major energy
and chemical companies also need independent terminal storage when their captive
storage facilities are inadequate, either because of size constraints, the
nature of the stored material or specialized handling requirements.
Independent terminal owners compete based on the location and versatility
of terminals, service and price. A favorably located terminal will have access
to cost-effective transportation both to and from the terminal. Possible
transportation modes include waterways, railroads, roadways and pipelines.
Terminal versatility is a function of the operator's ability to offer safe
handling for a diverse group of products with potentially complex handling
requirements. The primary service function provided by the terminal is the safe
storage and return of all of the customer's product while maintaining product
integrity. Terminals may also provide additional services, such as heating,
blending, water removal, processing, assurance of the proper environmental
handling procedures or vapor control to reduce evaporation.
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The Company's competitors at its primary terminals include:
<TABLE>
<CAPTION>
ST. EUSTATIUS
STORAGE CAPACITY
NAME LOCATION (BARRELS)(1)
- ------------------------------------------------------------------------- ----------------- ----------------
<S> <C> <C>
Bahamas Oil Refining Co. (BORCO)(2)...................................... Bahamas 25,840,000
Curacao Oil Terminal(2).................................................. Curacao, N.A. 20,750,000(3)
Refineria Isla (Curacao), S.A.(2)........................................ Curacao, N.A. 16,600,000(3)
Amerada Hess Corporation(2).............................................. St. Lucia 12,000,000
Bonaire Petroleum Corp., N.V. (BOPEC)(2)................................. Bonaire, N.A. 10,000,000
Commonwealth Oil Refining Company (CORCO)................................ Puerto Rico 8,000,000
Wickland Oil Company..................................................... Aruba 5,775,000
South Riding Point Holdings, Ltd......................................... Bahamas 5,200,000
POINT TUPPER
<CAPTION>
STORAGE CAPACITY
NAME LOCATION (BARRELS)(1)
- ------------------------------------------------------------------------- ----------------- ----------------
<S> <C> <C>
International-Matex Tank Terminals....................................... Bayonne, NJ 12,500,000
GATX Terminals Corporation............................................... Carteret, NJ 6,650,000
South Riding Point Holdings, Ltd......................................... Bahamas 5,200,000
Tosco Corporation(2)..................................................... Riverhead, NY 5,200,000
GATX Terminals Corporation............................................... Staten Island, NY 5,000,000
Stolthaven (Santos) Ltd.................................................. Perth Amboy, NJ 2,146,000
Multiple................................................................. NY/NJ Harbor >35,000,000
</TABLE>
- ------------------
(1) Source: Stalsby/Wilson's Petroleum Terminal Encyclopedia Eighth Edition.
(2) Captive terminal. See 'Industry.'
(3) The Company believes such storage capacity to be less than fully useable.
CUSTOMERS
The Company's customers include state-owned oil producers, integrated oil
companies and traders. The Company presently has one significant long-term
contract at St. Eustatius, which is a five-year contract (with a five-year
renewal option at the customer's discretion) with a state-owned oil producer
which became effective in early 1995. This throughput and storage contract
commits all the St. Eustatius facility's current crude oil storage to such
customer, which represents approximately 44% of the terminal's total capacity
and 6.4% of the 1995 revenues of the Company, with an additional 10.1% of the
1995 revenues of the Company being derived from parties unaffiliated with such
customer but generated by the movement of such customer's products through the
St. Eustatius terminal.
STPT has signed a five-year contract with two five-year renewal options (at
the customer's discretion) with a major refiner. This contract, which became
effective on August 1994 and commits approximately 48% of the present tank
capacity at Point Tupper, represented approximately 4.8% of the 1995 revenues of
the Company.
No other customer accounted for more than 5% of the 1995 revenues of the
Company.
SUPPLIERS
The Company presently has a supply contract at St. Eustatius, which became
effective in 1992 and expires December 31, 1997, with a major state-owned oil
producer. This contract provides the Company with the majority of the fuel oil
necessary to support its bunkering operations. The Company obtains the balance
of its fuel oil from various sources. Fuel oil and other supplies necessary for
its bunkering operations are obtained from various sources and are readily
available.
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ENVIRONMENTAL, HEALTH AND SAFETY MATTERS
St. Eustatius
In the past, the St. Eustatius terminal has not been subject to significant
environmental, health and safety regulations ('Environmental Laws'), and health,
safety and environmental audits have not been required by law. To date, only
water emissions monitoring has been undertaken when treated water is released
into the ocean. There are no environmental or health and safety permits required
for the St. Eustatius terminal except under the St. Eustatius Nuisance
Ordinance. In February 1996, the Company submitted an application for a license
to the Executive Council of St. Eustatius pursuant to the St. Eustatius Nuisance
Ordinance. The license will establish certain environmental standards for
operation of the facility, including limits on and monitoring of air emissions
and waste-water discharges, establishment of a waste-water treatment system,
standards for above-ground storage tanks and tank pits, as well as reporting and
clean-up of any soil pollution and site security measures. The draft license
submitted with the application will be subject to public review and comment. The
Company cannot predict when or in what form the final license may be issued;
however, based on available information, the Company believes it will be able to
comply with the final license requirements and that compliance should not
require significant additional capital costs, except for security fencing. On
and offsite disposal and storage of hazardous waste materials have been executed
under the supervision of the terminal management. STNV has had twelve recorded
spills in the last three years, two of which were on land and ten at sea, and
the largest of which was approximately 20 tons of diesel fuel at sea. All of
these spills were reported to the appropriate environmental authorities and have
not resulted in any citations for violations of law by such authorities. All
such spills have been remediated by the Company. Three government safety
inspections have been performed in the last year with no citations issued. In
connection with the Transaction, in June 1996 a Phase I and a limited Phase II
environmental site assessment were conducted on the St. Eustatius terminal. The
scope of the limited Phase II assessment included soil sampling and testing in
certain selected areas. In none of the areas tested were contaminants found at
levels that would require clean up under regulations presently in effect in St.
Eustatius.
Point Tupper
The Point Tupper terminal is subject to a variety of Environmental Laws
administered by the Canadian federal government and Nova Scotia Department of
Environment (the 'NSDOE'). While air emission monitoring is not required by the
NSDOE, surface water discharge outfall and groundwater monitoring are required
and are performed on a routine basis in accordance with current requirements of
the NSDOE with records available on site for the NSDOE to review. All of the
requisite environmental permits are in place. The principal permit is the
Industrial Waste Treatment Works Permit issued by the NSDOE in 1992. No health
and safety permits are required. STPT has had six land and eleven marine oil
spills in the last three years, the largest of which was approximately 250 tons
of crude oil spilled on land, all of which have been reported and remediated to
the satisfaction of the applicable agencies. Past uses of the facility by
others, including its past operation by others as an oil refinery, have resulted
in certain on-site areas of known and potential contamination, as described
below. Under the Environmental Laws, the Company as the owner and operator of
the facility can be held liable for remediation of, and damages arising from,
these conditions. In connection with the Transactions, in June 1996, a Phase I
and a limited Phase II environmental site assessment were conducted on the Point
Tupper terminal. The scope of the limited Phase II assessment included surface
water and groundwater sampling and testing in certain selected areas of the
terminal property and a field investigation on the property involving the
excavation of 21 test pits. These activities included the collection of soil and
groundwater samples and the analysis of those samples for petroleum hydrocarbons
and other potential contaminants. Based on available information there is
evidence of environmental contamination associated with certain areas of the
property (some of which result from the past operation of the facility by others
as a refinery) including a former sludge and waste disposal area, an interceptor
settling pond, a pump station, former lead blending tanks, and a portion of the
South Tank Farm. Certain terminal operations also have been identified as
requiring upgrading or remediation to meet existing environmental laws,
including, among other matters, an oil-water separator required to process
facility run-off, underground storage tanks that must be removed, possible
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<PAGE>
upgrading of containment areas for above-ground storage tanks, additional spill
containment and emergency response equipment, capacity to treat ballast water,
as required, and the presence of friable asbestos that must be removed from
certain areas of the terminal. The Company plans to undertake in accordance with
Environmental Laws the necessary investigations, remediation and upgrading to
address these matters. With respect to environmental liabilities and compliance
costs at Point Tupper, Praxair has agreed to pay the costs of the following
(translations of Canadian dollars into U.S. dollars are calculated using an
exchange rate of Cdn. $1.00 to U.S. $.7406 as of November 29, 1996 as published
in the Wall Street Journal on December 2, 1996):
(i) removal of friable asbestos up to Cdn. $452,000 (U.S. $334,751)
(which is one-half of the approximate amount that the Company estimates
would be required to remove all asbestos, if that should be necessary);
(ii) removal under applicable Environmental Laws of up to nineteen
underground storage tanks that either are presently in use or were in use
in the past and believed to be present at the facility and the related
redesign and installation of containment systems at pump stations where
certain of such tanks are to be removed up to an amount of Cdn. $221,000
(U.S. $163,673) (the company estimates that such removal and redesign and
installation will cost approximately that amount), and any remediation of
contamination resulting from such tanks, the entire cost of which Praxair
has agreed to pay;
(iii) the removal and proper disposal of between 500 and 1,000 tons of
petroleum sludge stored in one of the bays of the API oil/water separator
up to Cdn. $467,500 (U.S. $346,231) (the Company estimates that such
removal and disposal will cost approximately that amount);
(iv) upgrading of the API oil/water separator up to Cdn. $3,000,000
(U.S. $2,221,800) to bring it into compliance with certain NSDOE
requirements (the Company estimates the API separator upgrading will cost
approximately that amount);
(v) the investigation of numerous sludge pits and a waste disposal
site located on the eastern portion of the facility property in the general
vicinity of Landrie Lake, a drinking water source for the area, in an
amount up to Cdn. $19,000 (U.S. $14,071) (for such investigation) and any
required remediation, the entire cost of which Praxair has agreed to pay;
and
(vi) the survey, testing and other investigation of the above-ground
storage tank containment areas (including compound floors and dikes) to
determine whether such containment areas meet applicable Environmental
Laws, up to Cdn. $69,000 (U.S. $51,101), and, if necessary, bringing the
containment areas into compliance with such requirements, the entire cost
of which Praxair has agreed to pay.
The Company has also identified additional environmental costs of
approximately U.S. $1.0 million which are not covered by the Praxair agreement.
The Company believes that the agreement by Praxair to pay the above-listed costs
includes most of the significant and immediate known environmental liabilities
associated with the Point Tupper facility, and that the amount agreed to for
specific items is reasonable. However, there can be no assurance that
environmental liabilities under existing or future environmental laws beyond the
scope of the Praxair agreement will not be material. In addition, there can be
no assurances that the Company will not be required to incur expenses before
Praxair pays amounts for which it ultimately would be responsible.
Brownsville
The Brownsville terminal (which is being held for sale) is subject to
Environmental Laws and the Company is in material compliance with and not
subject to any material liability under any such Environmental Laws. Since 1993,
internal environmental compliance audits have been performed annually by the
Company with the assistance of safety and environmental consultants. Disposal of
hazardous materials on and offsite has been executed with the approval of the
Texas Natural Resource Conservation Commission ('TNRCC'). The Brownsville
terminal has had two land and one marine oil spills in the last three years, all
of which were reported and remediated to the satisfaction of the appropriate
agency. The
58
<PAGE>
largest spill at Brownsville in the last three years was approximately 150 tons
of lube oil on land. No governmental health or safety citations for violations
of Environmental Laws have been issued in the last three years. In connection
with the Transactions, in June 1996 an Environmental Site Assessment, including
limited soil, surface water and groundwater sampling and testing, was undertaken
at the Brownsville terminal. The purpose of the assessment was to review and
assess terminal operations and environmental conditions at the terminal property
that could constitute noncompliance with or result in remediation costs under
Environmental Laws. The assessment concluded that limited areas of soil
contamination exist on the property but that no significant environmental
noncompliance or liability issues were associated with the facility.
Nevertheless, the Company has undertaken to remediate the areas of limited soil
contamination and remedy the noncompliance matters. Based on the information
available to the Company, the cost of these items is not expected to be
material.
LEGAL PROCEEDINGS
Global Petroleum Corp. ('Global') brought an action against an affiliate of
the Company in December of 1993 in the Supreme Court of Nova Scotia seeking the
release of certain petroleum products owned by Global that the Company was
holding to secure the payment of certain invoices. Global secured the release of
the products by posting a $2 million bond. Global claims damages of $1.2 million
for breach of contract and such affiliate of the Company counterclaimed for
breach of contract and payment of the approximately $2 million of unpaid
invoices for product storage and other services.
In April 1995, Global, Scotia Synfuels Limited and their related companies
brought suit against CBI Industries, Inc. and certain affiliates of the Company
in the Supreme Court of Nova Scotia alleging damages in the amount of $100
million resulting from misrepresentation, fraud and breach of fiduciary duty
associated with the reactivation of the Point Tupper facility and the sale of
their shares in STPT to an affiliate of the Company and CBI. This suit has been
stayed until the conclusion of the action discussed in the preceding paragraph.
In May 1994, the U.S. Department of Justice brought an action in the U.S.
District Court for the District of Virgin Islands against Statia Terminals Inc.
and STNV for $3.6 million of pollution clean up costs in connection with the
discharge of oil into the territorial waters of the U.S. Virgin Islands and
Puerto Rico by a barge (not owned or leased by the Company or any of its
affiliates) that had been loaded at St. Eustatius. The Company is presently
disputing the U.S. District Court's jurisdiction over STNV.
The Company believes the allegations made in these proceedings are without
merit; therefore, the Company intends to vigorously contest these claims. The
Company is indemnified against damages relating to the foregoing proceedings by
Praxair in accordance with the Stock Purchase Agreement. While no estimate can
reasonably be made of any ultimate liability at this time, the Company believes
the final outcome of these proceedings will not have a material adverse effect
on the Company's business, financial condition or results of operations.
In November 1996, a former executive officer of the Company brought suit
against the Company and others for breach of contract and related actions. The
Company believes the ultimate outcome of these proceedings will not have a
material adverse effect on the Company's business, financial condition or
results of operations and intends to vigorously defend such action.
The Company is involved in various other claims and litigation arising from
the ordinary conduct of its business. Based upon analysis of legal matters and
discussions with legal counsel, the Company believes that the ultimate outcome
of these matters will not have a material adverse impact on the Company's
business, financial condition or results of operations.
EMPLOYEES
As of September 30, 1996, excluding contract labor, the Company employed
237 people. Seventy employees are located in the U.S., 106 on St. Eustatius, 60
at Point Tupper and one in Mexico. The local unions at both the St. Eustatius
and Point Tupper facilities have been in existence since 1994. The Company
believes that its relationships with its employees are good.
59
<PAGE>
At STNV, the majority of the hourly workers are represented by the Windward
Islands Federation of Labor ('WIFOL'). Due to the failure of STNV and WIFOL to
conclude discussions regarding proposed changes to the agreement with WIFOL that
expired on May 31, 1996, the terms of such agreement have been extended through
May 31, 1997, with discussions continuing. There are separate ongoing
discussions between STNV management and a select group of supervisory and office
personnel at STNV regarding their organization into a collective bargaining
group. The parties are presently engaged in mediation.
The Communications, Energy and Paperworkers Union ('CEPU') represents a
portion of Point Tupper's hourly work force. During 1995, STPT and CEPU signed a
new three-year agreement that will expire on September 30, 1998. STPT has
experienced two minor work stoppages in the last three years. In April 1994,
employees stopped working for approximately one-half of a day to protest safety
conditions at the facility. The following April, electricians picketed for
approximately two hours to protest the employment of non-union workers on one
project. Most of the workers at the facility were unaffected by the activity.
INSURANCE
Upon closing of the Transactions, the Company had property insurance
covering damage to its real and personal property located at its three terminals
and administrative offices. The property loss limit at Point Tupper is $150
million with a $0.1 million deductible. The combined loss limit for St.
Eustatius and Brownsville is $150 million with a $0.1 million deductible except
for a loss limit of $100 million for catastrophic loss (wind, flood, earthquake,
etc.) at St. Eustatius with a $.5 million deductible for catastrophic loss. The
Company carries various layers of liability coverage of up to $200 million with
a deductible of $0.25 million. The Company carries $28.3 million of coverage on
the SPM system at St. Eustatius with a $0.25 million deductible, and coverage up
to scheduled values for damage to its marine vessels with a $50,000 deductible.
Finally, upon consummation of the Transactions, the Company carried other
insurance customary in the industry. The Company does not have, and does not
plan to carry, business interruption insurance.
Incurred but unreported liabilities prior to the consummation of the
Transactions either will be covered by the Company's new insurance policies or
by Praxair pursuant to the Stock Purchase Agreement, subject to certain
exceptions.
60
<PAGE>
MANAGEMENT
MANAGING DIRECTORS/DIRECTORS AND EXECUTIVE OFFICERS
Managing Directors and Directors, as the case may be, of the Issuers are
elected annually by their shareholders to serve during the ensuing year or until
a successor is duly elected and qualified. Executive officers of the Issuers are
duly elected by their respective Board of Managing Directors/Directors to serve
until their respective successors are elected and qualified.
The following table sets forth certain information with respect to the
managing directors and executive officers of Statia.
<TABLE>
<CAPTION>
NAME AGE POSITION
- ------------------------------------------ --- ------------------------------------------
<S> <C> <C>
James G. Cameron.......................... 50 Managing Director
John K. Castle............................ 55 Managing Director
David B. Pittaway......................... 45 Managing Director
Justin B. Wender.......................... 27 Managing Director and Secretary
</TABLE>
The following table sets forth certain information with respect to the
directors and executive officers of Statia Canada.
<TABLE>
<CAPTION>
NAME AGE POSITION
- ------------------------------------------ --- ------------------------------------------
<S> <C> <C>
David B. Pittaway......................... 45 Director and President
James F. Brenner.......................... 38 Vice President Finance
Justin B. Wender.......................... 27 Director and Secretary
Jack R. Pine.............................. 57 Assistant Secretary
</TABLE>
James G. Cameron. Mr. Cameron has been with Statia Terminals, Inc., an
affiliate of the Company ('STI'), since 1981. From 1981 to 1984, Mr. Cameron
served as Vice President, Engineering & Operations, during which time he served
as the Project Manager spearheading the design and construction of the St.
Eustatius terminal facility. Mr. Cameron was promoted in 1984 to Executive Vice
President and Chief Operating Officer. Since being named President and Chief
Executive Officer of STI in 1993, Mr. Cameron has served on the Boards of
Directors of Tankstore, a joint venture company among Chicago Bridge & Iron
Company, GATX Corporation and Paktank International B.V., and Petroterminal de
Panama, representing CBI's ownership in the pipeline traversing the isthmus of
Panama. His prior experience in the petroleum industry dates back to 1969 when
he joined Cities Service Company as a marine engineer. Mr. Cameron subsequently
joined Pakhoed USA, Inc., where he served in a variety of positions including
Project Engineer, Manager of Engineering & Construction, Maintenance Manager and
Terminal Manager, including the management of Paktank's largest facility in Deer
Park, Texas. Mr. Cameron holds a B.S. degree in Marine Engineering.
Jack R. Pine. Mr. Pine has been involved with the legal affairs of the
Company and its affiliates since their inception and was formally transferred to
STI from CBI Industries, Inc. on May 1, 1996. He has over 26 years of combined
experience with Liquid Carbonic Industries Corporation and CBI. Mr. Pine joined
the legal staff of CBI in 1974 as Assistant Counsel and was appointed Associate
General Counsel in 1984. Prior to joining CBI, Mr. Pine was engaged in the
private practice of law. Mr. Pine holds a B.S. degree in Physics and a J.D.
degree.
James F. Brenner. Mr. Brenner joined STI in December, 1992, as its
Controller, and was promoted to his present position in July, 1993. Immediately
prior to joining STI, he served three years as Vice President, Finance and Chief
Financial Officer of Margo Nursery Farms Inc. a publicly traded agribusiness
firm with European and Latin American operations. From 1986 to 1990, Mr. Brenner
was Treasurer of Latin American Agribusiness Development Corp., a company
providing debt and equity financing to agribusinesses throughout Latin America.
His duties included serving as Managing Director for several of its corporate
investments. From 1981 to 1986, Mr. Brenner held various positions with the
international accounting firm of Price Waterhouse LLP Mr. Brenner is a licensed
Certified Public Accountant in Florida. He holds an M.S. degree in Accounting.
61
<PAGE>
John K. Castle. Mr. Castle has been a Managing Director/Director of the
Issuers since September 1996. Mr. Castle is Chairman and Chief Executive Officer
of Branford Castle, Inc., an investment company formed in 1986. Since 1987, Mr.
Castle has been Chairman of Castle Harlan, Inc., a private merchant bank in New
York City, and General Partner of Legend Capital Group, L.P., a private buyout
fund. Mr. Castle is Chief Executive Officer of Castle Harlan Partners II, G.P.
Inc., the general partner of the general partner of Castle Harlan Partners II,
L.P., the Company's controlling stockholder. Immediately prior to forming
Branford Castle, Inc. in 1986, Mr. Castle was President and Chief Executive
Officer and a director of Donaldson Lufkin & Jenrette, Inc., which he joined in
1965. Mr. Castle is a director of UNC, Inc., Sealed Air Corporation and Morton's
Restaurant Group, Inc. He is a trustee of the New York Medical College (for 11
years he was Chairman of the Board), a member of The New York and Presbyterian
Hospitals, Inc.'s Board of Trustees, a member of the Board of the Whitehead
Institute for Biomedical Research, a member of the Corporation of the
Massachusetts Institute of Technology and has served as a director of The
Equitable Life Assurance Society of the United States.
David B. Pittaway. Mr. Pittaway has been a Managing Director/Director of
the Issuers since September 1996. Mr. Pittaway has been Vice President and
Secretary of Castle Harlan, Inc. a private merchant bank in New York City, since
February 1987 and Managing Director since February 1992. Mr. Pittaway is an
executive officer of Castle Harlan Partners II, G.P. Inc., the general partner
of the general partner of Castle Harlan Partners II, L.P., the Company's
controlling shareholder. Mr. Pittaway has been Vice President and Secretary of
Branford Castle, Inc., an investment company, since October 1986; Vice
President, Chief Financial Officer and a director of Branford Chain, Inc., a
marine wholesale company, since June 1987; a director of Morton's Restaurant
Group, Inc. (formerly known as Quantum Restaurant Group, Inc.), a public
restaurant company, since December 1988; and a director of McCormick & Schmick
Holding Corp., a privately-held restaurant holding company, since June 1994.
Prior to 1987, Mr. Pittaway was Vice President of Strategic Planning and
Assistant to the President of Donaldson Lufkin & Jenrette, Inc.
Justin B. Wender. Mr. Wender has been a Managing Director/Director of the
Issuers since September 1996. Since 1993, he has been employed by Castle Harlan,
Inc. He currently serves as Vice President. From 1991 to 1993, Mr. Wender worked
in the Investment Banking Group of Merrill Lynch & Co. He is a board member of
MAG Aerospace Industries, Inc.
ADDITIONAL MANAGING DIRECTORS/DIRECTORS
In October 1996, the Issuers extended invitations to Admiral James L.
Holloway III, U.S.N. (Ret.) and Francis Jungers to join the Boards of Managing
Directors/Directors of the Issuers. Admiral Holloway and Mr. Jungers have
accepted the Issuers' invitation to become members of the Boards of Managing
Directors/Directors of the Issuers.
Admiral James L. Holloway III, U.S.N. (Ret.), 73. Adm. Holloway has been
President of the Naval Historical Foundation, a national naval historic
preservation, since 1982. Recently, he was a Commissioner on Merchant Marine and
Defense. Previously, he was President of the Council of American-Flag Ship
Operators, national trade association representing owners and operators of U.S.
flag vessels, from August 1981 through 1989. Adm. Holloway was Admiral in the
U.S. Navy and Chief of Naval Operations prior to his retirement in 1978.
Francis Jungers, 69. Mr. Jungers is a private investor and business
consultant in Portland, Oregon. Mr. Jungers has been a consultant since January
1, 1978. From 1973 to 1978, he was Chairman and Chief Executive Officer of
Arabian American Oil Company which is the largest producer of crude and
liquified gas in the world and holds the concession for all of Saudi Arabia's
oil production. Mr. Jungers is a director of Dual Drilling Company, Georgia
Pacific Corporation, Star Technologies, Inc., Thermo Ecotek Corporation, Thermo
Electron Corporation, ThermoQuest Corporation, Pacific Rehabilitation & Sports
Medicine, Inc., Donaldson, Lufkin & Jenrette, Inc., The AES Corporation and ESCO
Corporation. Mr. Jungers is also Chairman of the Advisory Board of Common Sense
Partners, L.P., a hedge fund.
Castle Harlan may, from time to time, elect additional managing
directors/directors.
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<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth information concerning the compensation paid
or accrued for the year ended December 31, 1995 for the President and Chairman
of the Company and each of the three other most highly compensated executive
officers of the Company.
<TABLE>
<CAPTION>
LONG TERM COMPENSATION AWARDS
----------------------------------------------
SECURITIES
ANNUAL COMPENSATION RESTRICTED UNDERLYING ALL OTHER
------------------------ STOCK AWARDS OPTIONS/SARS COMPENSATIONS
NAME AND PRINCIPAL POSITION(1) YEAR SALARY($) BONUS($)(2) ($)(3)(4) (#SHARES)(5) ($)(6)
- -------------------------------------------- ---- --------- ----------- ------------ ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
James G. Cameron ........................... 1995 $ 200,000 $ 110,781 $ 78,594 13,000 $77,125
President and Chairman 1994 185,000 -- 71,750 10,000 54,569
1993 160,469 9,000 60,750 4,000 70,135
Thomas M. Thompson, Jr. .................... 1995 162,200 20,150 35,366 5,200 15,205
Executive Vice President 1994 149,345 37,820 30,750 4,500 23,466
1993 134,888 3,750 -- -- 25,331
Robert R. Russo ............................ 1995 143,749 17,500 35,366 5,200 14,572
Senior Vice President 1994 125,004 30,500 30,750 4,500 19,641
1993 109,652 -- -- -- 20,630
Richard D. Gooley(7) ....................... 1995 122,884 18,750 27,633 -- --
Senior Vice President 1994 -- -- -- -- --
1993 -- -- -- -- --
</TABLE>
- ---------------
(1) James G. Cameron became President and Chairman of Statia Terminals, Inc. on
July 27, 1993, Thomas M. Thompson, Jr. became Executive Vice President on
May 6, 1996, Robert R. Russo became Senior Vice President on May 6, 1996 and
Richard D. Gooley became Senior Vice President on May 6, 1996.
(2) This column contains the amounts that were earned in the stated year and
paid in the following year pursuant to annual incentive bonus opportunities.
In 1995, Mr. Cameron received his 1994 bonus of $90,781 and was paid his
1995 bonus of $20,000.
(3) Amounts earned in 1995 (but awarded in 1996) were pursuant to the CBI 1994
Restricted Stock Award Plan and reflects restricted stock earned pursuant to
50% of the target awards granted in 1995 for which performance is measured
at the end of 1995. Restrictions on these shares expire January 1, 2000 or
with a change in control (such change took place in December, 1995) these
shares were paid out in early 1996.
(4) Restricted Stock Awards are valued at the closing price on the date of
grant. Participants receive dividends on the Restricted Stock reported in
this column. The number and value of the aggregate restricted stock holdings
at the end of the last completed fiscal year, based on the New York Stock
Exchange composite closing price of $32.625 per share on December 31, 1995,
for each named executive officer are: James G. Cameron, 8,770, $286,121;
Thomas M. Thompson, Jr., 4,079, $133,077; Robert R. Russo, 2,504, $81,693
and Richard D. Gooley, $27,633.
(5) Represents options to purchase CBI common stock awarded under the CBI Stock
Option Plan. Such options were purchased from Messrs. Cameron, Thompson
and Russo in the first quarter of 1996 in connection with the purchase of
CBI by Praxair for a net price of approximately $166,250 to Mr. Cameron,
$57,787 to Mr. Russo and $57,787 to Mr. Thompson.
(6) The compensation reported represents (a) contributions pursuant to the CBI
Salaried Employee Stock Ownership Plan (1987) (the 'ESOP') for shares
allocated to the executive officer's account, (b) the cost of stock
allocated in the form of units to each executive officer's account in an
irrevocable trust under the CBI Benefit Restoration Plan for allocations
pursuant to the ESOP which otherwise exceed the maximum limit imposed upon
such plan by the Internal Revenue Code (the 'Code'), and (c) the dollar
value of split-dollar life insurance benefits. Those three amounts,
expressed in the same order identified above, for each named officer are as
follows: James G. Cameron, $15,206, $11,130, $50,789; Thomas M. Thompson,
Jr., $15,205, $0, $0; Robert R. Russo, $14,572, $0, $0; and Richard D.
Gooley, $0, $0, $0.
(7) Resigned effective November 8, 1996.
RESTRICTED STOCK AWARDS
Prior to the Acquisition, an aggregate of $3 million in STNV restricted
preferred stock was awarded to James G. Cameron, James F. Brenner,
and Jack R. Pine and certain other officers of subsidiaries of the
Issuers (each hereinafter a 'recipient'), subject to a specified restriction
period which commenced on the date of the award, and other conditions set forth
in the restricted stock award agreement between STNV and the recipient of such
stock. Each such recipient has surrendered and in consideration for such
surrender received a unit consisting of shares of Parent common stock and Series
E Preferred Stock for each of his shares of such STNV preferred stock, with an
aggregate value equal to the share of STNV preferred stock surrendered therefor,
and subject to substantially similar restrictions and conditions, which has been
set forth in a restricted unit award agreement between the Parent and such
recipient. Prior to the expiration of the restriction period, recipients may not
sell, transfer, pledge, assign, encumber or otherwise dispose of their units;
however, during the restriction period, the recipient of a unit shall have all
voting and dividend rights, if any, with respect to the stock comprising such
restricted unit. In general, the restriction period
63
<PAGE>
shall lapse on the earliest of the second anniversary of the date of the
consummation of the Initial Offering or the recipient's death, disability or
retirement (after attaining both a specified period of time of continuous
service with the Company and a specified age), or a 'change in control' (as
defined in the award agreement; for purposes of this paragraph, a 'change in
control') of the Parent or the Company. A recipient's restricted units shall
generally be forfeited upon the recipient's termination of employment with the
Company for any reason other than his death, disability, or retirement or under
certain other circumstances, subject to the Parent's discretion to waive all or
part of such forfeiture or permit another recipient to purchase all or a portion
of the terminating recipient's units at their then-current fair market value
(which transferred units shall thereafter be subject to the restrictions and
conditions set forth in the transferee's restricted unit award agreement). Upon
expiration or lapse of the restriction period, shares of Parent stock
represented by the unit will be delivered to the recipient free of the
above-mentioned restrictions. At any time within a specified period of time
following the award of restricted units to a recipient, the recipient may
instruct the Parent to defer irrevocably delivery of all or a portion of the
shares of stock comprising such unit, in accordance with his restricted unit
award agreement. Upon such an election, the recipient shall have a right to
receive the stock with respect to which such election is made (together with
dividend equivalents thereon), following expiration of the restriction period,
upon the earlier to occur of termination, if applicable, of his employment with
the Company and a change in control.
EMPLOYMENT AGREEMENTS
In connection with the transaction, the Parent and STI Inc. have entered
into employment agreements with James G. Cameron, James F. Brenner, and Jack R.
Pine. These agreements provide for an annual base salary which is subject to
review at least annually. These agreements also provide for an annual cash
incentive bonus to be awarded based on the difference between a target EBITDA
and actual EBITDA. The employment agreement with Mr. Cameron continue until
December 31, 2001 and are renewable for successive three-year periods
thereafter. The employment agreements with Messrs. Brenner and Pine continues
until December 31, 1999 and are renewable for successive two-year periods
thereafter. Additional benefits include participation in an executive life
insurance plan as well as various employee benefit plans. In the event that
Statia Terminals, Inc. terminates any such employment agreement without
substantial cause or the employee terminates for good reason (as such terms are
defined in each such employment agreement), the employee shall be entitled to
his current medical and dental benefits and his current compensation for the
greater of twelve months and the remaining portion of the term of such
employment agreement payable in monthly installments for such period plus a pro
rated portion of such employee's bonus compensation for the year of termination
only payable as and when ordinarily determined for such year.
64
<PAGE>
SECURITY OWNERSHIP
The following table sets forth certain information, with respect to
(i) each person that is a beneficial owner of more than 5% of the outstanding
shares of the common stock of Issuers, (ii) each managing director/director and
executive officer of the Issuers and (iii) all managing directors/directors and
officers of the Issuers as a group. Options that are exercisable within 60 days
are reflected in the following table as if they had been exercised. Unless
otherwise indicated, the number of shares and percentages set forth below are
common stock of the Parent and the address is the principal office of the
Company.
<TABLE>
<CAPTION>
MANAGING DIRECTORS, NAMED OFFICERS AND 5% BENEFICIAL OWNERS NUMBER OF SHARES PERCENTAGE
- ----------------------------------------------------------------------------------- ---------------- ----------
<S> <C> <C> <C>
Statia Terminals Group N.V.(1)..................................................... 6,000 100%
--------
James G. Cameron................................................................... 1,179 2.9%
Jack R. Pine....................................................................... 451 1.1%
James F. Brenner................................................................... 310 .8%
John K. Castle(2) ................................................................. 35,000 85.4%
c/o Castle Harlan, Inc.
150 East 58th Street
New York, NY 10155
All Officers and Directors(3)(4)................................................... 39,000 90.2%
Castle Harlan Partners II L.P. and affiliates(2)(3)(4) ............................ 35,000 85.4%
c/o Castle Harlan, Inc.
150 East 58th Street
New York, NY 10155
</TABLE>
- ---------------
(1) Number of shares and percentage are of common stock of Statia.
(2) CHPII is the controlling stockholder of Parent and therefore may be deemed
to be the beneficial owner of the shares owned by Parent. John K. Castle is
the controlling shareholder of the general partner of the general partner of
CHPII and may therefore be deemed to be the beneficial owner of shares
beneficially owned by CHPII and its affiliates. Mr. Castle disclaims
beneficial ownership of the shares owned by CHPII and its affiliates other
than such shares that represent his pro rata partnership interests in CHPII
and its affiliates.
(3) Includes two affiliates of CHPII with positions of less than 5% of common
stock of the Parent in each case.
(4) Managing Directors/Directors David B. Pittaway and Justin B. Wender are
expected to purchase shares of Common Stock of Parent in an amount to be
determined, but which is less than 5%.
65
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
As part of the Acquisition, Parent has entered into a management agreement
with Castle Harlan providing for the payment to Castle Harlan, subject to
certain conditions, of an annual management fee of $1,350,000 for investment
banking, advisory and strategic planning services. In the event the net proceeds
from the sale of the Brownsville facility and a certain asset of Parent exceed a
specified threshhold, Castle Harlan may be entitled to an additional payment of
up to $1 million. Under the Indenture, dividends from the Company to Parent to
permit Parent to pay Castle Harlan's annual management fee and a dividend of the
net proceeds of the sale of the Brownsville facility are excepted from the
limitation on Restricted Payments so long as no Default or Event of Default
exists. See 'Description of Notes--Certain Covenants--Limitations on Restricted
Payments.'
Pursuant to an agreement between CHPII and a consultant relating to the
structuring of the Transactions, the consultant received from the Company upon
consummation of the Transactions an advisory fee (payable to the consultant who
in turn paid a portion of such fee to certain entities/persons which provided
services to the consultant) of $2,500,000 in cash and 1,500 shares of Series E
Preferred Stock and 1,500 shares of common stock of Parent. The consultant is
also a party to an agreement with Statia Terminals N.V. dated as of January 1,
1993 pursuant to which the consultant renders certain advisory and consulting
services to the Company and is compensated therefor.
The stockholders of Parent have entered into a stockholders' agreement
which governs certain relationships among, and contains certain rights and
obligations of, the stockholders of Parent. The stockholders' agreement, among
other things, (i) limits the ability of the stockholders to transfer their
shares in Parent except in certain permitted transfers as defined therein; (ii)
provides for a right of first refusal; (iii) provides for certain tag-along
obligations and certain bring-along rights; (iv) provides for put and call
rights relating to stock held by certain management stockholders; (v) provides
for certain registration rights; and (vi) provides for certain pre-emptive
rights.
The stockholders' agreement provides that the parties thereto must vote
their shares to elect a Board of Managing Directors of Parent who will be
nominated by CHPII and one of whom will be nominated by the management
stockholders.
Pursuant to the stockholders' agreement, the stockholders granted each
other 'tag-along' rights under which all stockholders have the option of
participating in certain sales of common stock and Series E Preferred Stock by a
selling stockholder (other than sales to affiliates of each stockholder and
distributions by CHPII to its partners) at the same price and other terms as the
selling stockholder. In addition, all stockholders have granted to the majority
holders the right, in certain circumstances, to sell their common stock and
Series E Preferred Stock in a sale of all common stock and Series E Preferred
Stock to a third party. Any such sale shall be in an arms' length transaction
with an unaffiliated bona fide third party purchaser in which all consideration
payable to holders of common stock and Series E Preferred Stock will be
distributed pro rata on the basis of each holder's stock ownership.
Pursuant to the stockholders' agreement, the holders of the shares are
entitled to certain rights with respect to registration under the Securities Act
of certain shares held by them including, in the case of CHPII, certain demand
registration rights. The stockholders' agreement also provides for certain
preemptive rights as well as certain put and call rights. Subject to certain
conditions, the preemptive rights grant the right to purchase shares in a share
issuance of the Parent and the put and call rights will enable certain
management stockholders in certain circumstances following termination of their
employment and subject to certain limitations to cause the Parent to purchase
their shares at a certain price or for the Company to require management
stockholders to sell their shares to the Company in certain circumstances
following termination of their employment. Under the Indenture, dividends from
the Company to Parent to permit Parent to pay the purchase price of shares
purchased from management stockholders are excepted from the limitation on
Restricted Payments up to a specified amount so long as no Default or Event of
Default exists. See 'Description of Notes--Certain Covenants--Limitations on
Restricted Payments.'
The stockholders' agreement provides that it shall terminate upon certain
events, including sale of the Parent pursuant to the 'bring-along' rights as
described above. If not terminated earlier, the stockholders'
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<PAGE>
agreement shall terminate on its tenth anniversary. Unless the stockholders'
agreement has been terminated, any transferee of common stock or Series E
Preferred Stock shall be bound by its terms and shall become a party thereto.
In addition to the foregoing, Parent and the stockholders of Parent have
entered into the Preferred Stock Agreements which govern certain relationships
among, and contain certain rights and obligations of stockholders of Parent as
well as certain obligations of Parent and certain remedies related thereto. The
Preferred Stock Agreements, among other things, (i) limit the rights of certain
stockholders to receive dividends; (ii) limit the stated capital of Parent;
(iii) limit the business, assets and liabilities of Parent; (iv) limit Parent's
ability to merge, consolidate or transfer all or substantially all of its
assets; (v) limit certain restricted payments of Parent; (vi) limit, under
certain circumstances, the right of Castle Harlan to receive its management fee
in cash; (vii) limit transactions with affiliates; (viii) limit the right of
Parent to issue certain equity securities; (ix) limit the right of Parent and
the Company to take certain actions which affect the ability of Parent to
redeem, repurchase or make payments with respect to Parent preferred stock; (x)
limit the right of the Company to amend or modify the Indenture (other than an
amendment or modification that can be effected without the consent of the
Holders of the Notes) and certain other documents; (xi) limit, under certain
circumstances, the ability of Parent to purchase, redeem, defease or retire the
Notes; (xii) require Parent to take reasonable efforts to redeem the Series B
Preferred Stock; (xiii) require Parent to provide certain information to the
holders of the preferred stock; and (xiv) limit certain modifications of the
Preferred Stock Agreements.
DESCRIPTION OF NEW BANK CREDIT FACILITY
The Company has entered into loan and security agreements with a Canadian
financial institution and a U.S. financial institution that are affiliated with
each other, respectively (collectively the 'Lenders'), pursuant to which each of
the Lenders is providing to the Company and its subsidiaries revolving credit
facilities (collectively the 'New Bank Credit Facility'). Subject to borrowing
base limitations and the satisfaction of customary borrowing conditions, the
Company and its subsidiaries are permitted to borrow up to an aggregate of $17.5
million under the New Bank Credit Facility. Certain terms of such New Bank
Credit Facility are summarized below
and are qualified by reference to the terms of the New Bank Credit Facility.
The New Bank Credit Facility enables the Company to obtain revolving credit
loans from time to time for working capital in an aggregate amount outstanding
from time to time in amounts requested by the borrowers thereunder up to the
amount equal to the sum of (i) 80% of eligible accounts receivable plus (ii) the
lesser of 50% of eligible inventory or an aggregate $3 million, less (iii) any
outstanding letter of credit liability.
The revolving credit loans bear interest at the Prime Rate (as defined
therein) plus .50% per annum. The Company is obligated to pay an annual fee of
.375% per annum on the difference between the average monthly balance of
revolving credit loans and $2.5 million in the case of the Canadian financial
institution and $9 million in the case of the U.S. financial institution,
payable monthly. The New Bank Credit Facility will terminate on the third
anniversary of the date of the consummation of the Initial Offering, unless
terminated sooner upon an event of default (as defined therein), and outstanding
revolving credit loans will be payable on such date or such earlier date as may
be accelerated following the occurrence of any Event of Default.
The revolving credit loans constitute senior Indebtedness of the Company
and are secured by a first priority lien on the Company's accounts receivable
and inventory. The New Bank Credit Facility contains various restrictive
covenants and events of default customary for a transaction of this type but
does not contain any financial maintenance covenants.
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DESCRIPTION OF NOTES
The New Notes will be issued, and the Old Notes were issued, pursuant to
the Indenture among Statia, Statia Canada, the Subsidiary Guarantors and Marine
Midland Bank, as trustee (the 'Trustee'), a copy of which has been filed as an
exhibit to the Registration Statement of which this Prospectus is a part. For
purposes of the following summary, the Old Notes and the New Notes shall be
collectively referred to as the 'Notes.' The terms of the Notes include those
set forth or referred to in the Indenture and those made part of the Indenture
by reference to the Trust Indenture Act of 1939, as amended (the 'Trust
Indenture Act'). The Notes are subject to all such terms, and prospective
participants in the Exchange Offer are referred to the Indenture, the Trust
Indenture Act and the documents referred to in the Indenture for a statement
thereof. The following summary does not purport to be a complete description of
the Notes, Indenture and such documents and is subject to the detailed
provisions of, and qualified in its entirety by reference to, the Notes,
Indenture and such documents. Capitalized terms that are used but not otherwise
defined herein have the meanings assigned to them in the Indenture and such
definitions are incorporated herein by reference.
GENERAL
The Notes are joint and several obligations of Statia and Statia Canada.
The Notes will be senior secured obligations of the Issuers limited to an
aggregate principal amount of $135 million. The indebtedness represented by the
Notes will rank pari passu in right of payment with all Indebtedness of the
Issuers that is not, by its terms, expressly subordinated in right of payment to
the Notes. The Notes will be unconditionally guaranteed on a senior basis by
each of the Restricted Subsidiaries of the Issuers. As of the date of the
Indenture, all of the Issuers' active Subsidiaries are Restricted Subsidiaries.
However, under certain circumstances, the Issuers are able to designate future
Subsidiaries as Unrestricted Subsidiaries. Unrestricted Subsidiaries are not be
subject to many of the restrictive covenants set forth in the Indenture. The
Notes will be non-recourse to Parent, and direct and indirect stockholders of
Parent (including Praxair and CBI).
The Notes will bear interest at the rate shown on the cover page of this
Prospectus, payable on May 15 and November 15 of each year, commencing on May
15, 1997, to holders of record at the close of business on the May 1 or November
1, as the case may be, immediately preceding the relevant interest payment date.
The Notes will mature on November 15, 2003 and will be issued in registered
form, without coupons, in denominations of $1,000 and integral multiples
thereof. The Notes will be payable as to principal, premium, if any, and
interest at the office or agency of the Issuers maintained for such purpose
within the City and State of New York or, at the option of the Issuers, by wire
transfer of immediately available funds or, in the case of certificated
securities only, by mailing a check to the registered address of the holders of
the Notes (the 'Holders'). See '-- Delivery and Form of Securities -- Book
Entry, Delivery and Form.' Until otherwise designated by the Issuers, the
Issuers' office or agency in New York will be the office of the Trustee
maintained for such purpose.
SUBSIDIARY GUARANTEES
The Issuers' payment obligations under the Notes will be jointly and
severally guaranteed (the 'Guarantees') by the Subsidiary Guarantors. The
Subsidiary Guarantees will be secured by a Lien on the Collateral. See
'-- Security.' The obligations of each U.S.-incorporated Subsidiary Guarantor
under its Guarantee will be limited to reduce the risk that it would constitute
a fraudulent conveyance under applicable law.
The Indenture provides that no Significant Guarantor (other than STSW (the
entity owning the Capital Stock of the Brownsville terminal)) may consolidate
with or merge with or into (whether or not such Significant Guarantor is the
surviving Person) another Person whether or not affiliated with such Significant
Guarantor unless (i) the Person formed by or surviving any such consolidation or
merger (if other than such Significant Guarantor) assumes all of the obligations
of such Significant Guarantor pursuant to a supplemental indenture, in form and
substance satisfactory to the Trustee, under the Notes and the Indenture; (ii)
immediately after giving effect to such transaction, no Default or Event of
Default exists;
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and (iii) immediately after giving effect to such transaction Statia could incur
at least $1.00 of additional Indebtedness pursuant to the Consolidated Fixed
Charge Coverage Ratio test set forth in the covenant described under 'Certain
Covenants--Limitations on Additional Indebtedness.'
ADDITIONAL AMOUNTS; INDEMNIFICATION
All payments made by the Issuers or any Subsidiary Guarantor under or with
respect to the Notes will be made free and clear of, and without withholding or
deduction for or on account of, any present or future Taxes imposed or levied by
or on behalf of any Taxing Authority, unless the Issuers or any such Subsidiary
Guarantor are required to withhold or deduct such Taxes by law or by the
interpretation or administration thereof. If the Issuers or any Subsidiary
Guarantor are required to withhold or deduct any amount for or on account of
Taxes imposed or levied by or on behalf of any Taxing Authority from any payment
made under or with respect to the Notes, the Issuers and any such Subsidiary
Guarantor, as the case may be, will pay such additional amounts ('Additional
Amounts') as may be necessary so that the net amount received by each Holder of
Notes (including Additional Amounts) after such withholding or deduction will
not be less than the amount the Holder would have received if such Taxes had not
been withheld or deducted; provided that no Additional Amounts will be payable
with respect to a payment made to a Holder of Notes (an 'Excluded Holder') (a)
with which the Issuers or any such Subsidiary Guarantor do not deal at arm's
length (within the meaning of the Income Tax Act (Canada)) at the time of making
such payment; (b) with respect to any such Taxes which would not have been so
imposed but for (i) the existence of any present or former connection (other
than the mere holding of a Note or the receipt of payments under or with respect
to the Notes) between such Holder (or between a fiduciary, settlor, beneficiary,
member or shareholder of such Holder, if such Holder is an estate, a trust, a
partnership or a corporation) and Canada or the Netherlands Antilles or any
political subdivision or Taxing Authority thereof or therein, as the case may
be, including, without limitation, such Holder (or such fiduciary, settlor,
beneficiary, member or shareholder) being or having been a citizen or resident
thereof or being or having been engaged in a trade or business or present
therein or having, or having had, a permanent establishment therein, or (ii) the
presentation by the Holder of any Note for payment on a date more than 30 days
after the date on which such payment became due and payable or the date on which
payment thereof is duly provided for, whichever occurs later; (c) with respect
to any estate, inheritance, gift, sales, transfer or personal property tax or
any similar Taxes imposed or levied by or on behalf of any Taxing Authority; or
(d) with respect to any such Taxes that would not have been imposed, due or
payable but for a failure by the Holder of Notes to comply with a request by the
Issuers to satisfy any certification, identification or other reporting
requirements whether imposed by statute, regulation, treaty or administrative
practice concerning nationality, residence in or connection with the Netherlands
Antilles or Canada; nor shall Additional Amounts be paid with respect to any
payment on a Note to a Holder who is a fiduciary or partnership or other than
the sole beneficial owner of such payment to the extent such payment would be
required to be included in the income, for tax purposes, of a beneficiary or
settlor with respect to such fiduciary or a member of such partnership or a
beneficial owner who would not have been entitled to the Additional Amounts had
such beneficiary, settlor, member or beneficial owner been the holder of the
Note. The Issuers or any such Subsidiary Guarantor will also, in accordance with
applicable law, (i) make such withholding or deduction and (ii) remit the full
amount deducted or withheld to the relevant Taxing Authority. The Issuers or any
such Subsidiary Guarantor will furnish to the Holders of the Notes, within 30
days after the date the payment of any such Taxes is due pursuant to applicable
law, certified copies of tax receipts evidencing such payment by the Issuers or
any such Subsidiary Guarantor.
In addition to the obligation to pay Additional Amounts, the Issuers and
each Subsidiary Guarantor will indemnify and hold harmless each Holder of Notes
(other than an Excluded Holder in respect of the applicable payment) and will,
upon written request of each Holder of Notes (other than an Excluded Holder in
respect of the applicable payment), and provided that reasonable supporting
documentation is provided, reimburse ('Reimbursement Payments') each such Holder
for the amount of (i) any Taxes levied or imposed by the Netherlands Antilles or
levied or imposed by way of deduction or withholding by Canada and paid by such
Holder as a result of payments made under or with respect to the Notes, and (ii)
any Taxes levied or imposed by the Netherlands Antilles or levied or imposed by
way of deduction or withholding by Canada with respect to any reimbursement
under the foregoing clause (i), so that the net
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amount received by such Holder after such reimbursement will not be less than
the net amount the Holder would have received if such Taxes on such
reimbursement had not been so imposed.
At least 30 days prior to each date on which any payment under or with
respect to the Notes is due and payable, if the Issuers or any Subsidiary
Guarantor will be obligated to pay Additional Amounts with respect to such
payment, the Issuers or such Subsidiary Guarantor, as the case may be, will
deliver to the Trustee an Officers' Certificate stating that such Additional
Amounts will be payable and the amounts so payable and will set forth such other
information necessary to enable the Trustee to pay such Additional Amounts to
Holders of Notes on the payment date. Whenever there is mentioned herein the
payment of principal and premium, if any, interest or any other amount payable
under or with respect to any Note, such mention shall be deemed to include
mention of the payment of Additional Amounts and Reimbursement Payments to the
extent that, in such context, Additional Amounts and Reimbursement Payments were
or would be payable in respect thereof.
OPTIONAL REDEMPTION OF THE NOTES
The Notes may not be redeemed on or before November 15, 2000, but will be
redeemable at the option of the Issuers, in whole or in part, at any time after
November 15, 2000, at the following redemption prices (expressed as percentages
of principal amount), together with accrued and unpaid interest, if any, thereon
to the redemption date, if redeemed during the 12-month period beginning
November 15, in the year indicated:
<TABLE>
<CAPTION>
OPTIONAL
YEAR REDEMPTION PRICE
- --------------------------------------------------------------------------- ----------------
<S> <C>
2000....................................................................... 105.875%
2001....................................................................... 102.938%
2002....................................................................... 100.000%
</TABLE>
provided that the Issuers may not redeem the Notes prior to the Fifth
Anniversary with the proceeds of Asset Sales.
Notwithstanding the foregoing, at any time prior to November 15, 1999, the
Issuers may redeem up to 35% of the aggregate principal amount of the Notes with
the net cash proceeds of one or more Equity Offerings at a redemption price
equal to 111.75% of the principal amount thereof, plus accrued and unpaid
interest, if any, to the redemption date; provided that (a) at least $88 million
aggregate principal amount of the Notes remain outstanding immediately after the
occurrence of such redemption and (b) such redemption occurs within 60 days of
the date of the closing of any such Equity Offering.
If less than all of the Notes are to be redeemed at any time, selection of
the Notes to be redeemed will be made by the Trustee from among the outstanding
Notes on a pro rata basis, by lot or by any other method permitted in the
Indenture. Notice of redemption will be mailed at least 30 days but not more
than 60 days before the redemption date to each holder whose Notes are to be
redeemed at the registered address of such holder. On and after the redemption
date, interest will cease to accrue on the Notes or portions thereof called for
redemption.
TAX REDEMPTION
The Notes will also be subject to redemption, in whole but not in part, at
the option of the Issuers at any time at 100% of the principal amount thereof,
plus accrued and unpaid interest, if any, to the date of redemption, if either
of the Issuers or the Subsidiary Guarantors, as the case may be, has become or
would become obligated to pay, on the next date on which any amount would be
payable with respect to the Notes, any Additional Amounts or Reimbursement
Payments as a result of a change in, or amendment to, the laws, treaties,
regulations or rulings of any Taxing Authority, or any change in, or amendment
to, any official position regarding the application or interpretation of such
laws, regulations, treaties or rulings which change or amendment is announced or
becomes effective on or after the Issue Date; provided that the Issuers or any
Subsidiary Guarantor, as the case may be, determine, in their business judgment,
that the obligation to pay such Additional Amounts or Reimbursement Payments
cannot be avoided by the use of
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reasonable measures available to the Issuers or the Subsidiary Guarantor, as the
case may be (not including substitution of the obligors under the Notes). Notice
of redemption will be mailed at least 30 days but not more than 60 days before
the redemption date to each Holder whose Notes are to be redeemed at the
registered address of such Holder. On or after the redemption date, interest
will cease to accrue on the Notes called for redemption.
MANDATORY OFFERS TO PURCHASE THE NOTES
Subject to certain limitations, the Indenture requires the Issuers, under
certain circumstances, to offer to purchase a portion of the outstanding Notes.
See 'Certain Covenants -- Limitations on Asset Sales.'
CHANGE OF CONTROL
The occurrence of a Change of Control will constitute an Event of Default
under the Indenture. Such Event of Default may be cured if, within 30 days after
the occurrence of the Change of Control, an offer to all holders of Notes to
purchase (a 'Change of Control Offer') all outstanding Notes properly tendered
pursuant to such offer is made and, within 60 days after the occurrence of the
Change of Control (such purchase date being the 'Change of Control Purchase
Date'), all Notes properly tendered pursuant to such offer are accepted for
purchase for a cash price in U.S. dollars (the 'Change of Control Purchase
Price') equal to 101% of the principal amount of the Notes, plus accrued and
unpaid interest, if any, to the Change of Control Purchase Date.
In order to effect a Change of Control Offer, the Issuers shall within 30
days after the occurrence of the Change of Control mail to the Trustee, who
shall mail to each holder of Notes, a copy of the Change of Control Offer, which
shall state, among other things: (i) the date of such Change of Control and,
briefly, the events causing such Change of Control, (ii) that the Change of
Control Offer is being made pursuant to the Indenture and that all Notes
properly tendered pursuant to the Change of Control Offer will be accepted for
payment, (iii) the last date on which the Change of Control Purchase Notice (as
defined in the Indenture) must be given, (iv) the Change of Control Purchase
Date, (v) the Change of Control Purchase Price, (vi) the names and addresses of
the paying agents and the offices or agencies maintained by the Issuers for such
purpose in The City of New York, (vii) the procedures that holders must follow
to accept the Change of Control Offer and (viii) the procedures for withdrawing
a Change of Control Purchase Notice.
The failure of the Issuers (or a third party, in the case of a Change of
Control Offer made by a third party as described below) to make or consummate
the Change of Control Offer, or pay the Change of Control Purchase Price on the
Change of Control Purchase Date will give the Trustee and the holders of Notes
the rights described under '-- Events of Default.'
The occurrence of the events constituting a Change of Control under the
Indenture may result in an event of default in respect of other Indebtedness of
Statia and its Subsidiaries and, consequently, the lenders thereof may have the
right to require repayment of such Indebtedness in full. If a Change of Control
Offer is made, there can be no assurance that the Issuers will have available
funds sufficient to pay for all or any of the Notes that might be delivered by
holders of Notes seeking to accept the Change of Control Offer. The Event of
Default arising upon a Change of Control will also be cured if a third party
makes the Change of Control Offer in the manner and at the times and otherwise
in compliance with the requirements applicable to a Change of Control Offer made
by the Issuers, including the obligations described under '-- Additional
Amounts; Indemnification' above, and purchases all Notes properly tendered and
not withdrawn under such Change of Control Offer.
The Change of Control default feature of the Notes, by permitting the
Issuers to cure the Event of Default by making a Change of Control Offer, may in
certain circumstances make more difficult or discourage a sale or takeover of
the Issuers and, therefore, the removal of incumbent management. The Change of
Control default feature, however, is not part of a plan by management to adopt a
series of antitakeover provisions. Instead, the Change of Control default
feature is a result of negotiations between the Issuers and the Initial
Purchaser. Subject to the limitations discussed below, the Issuers or any
'Person' meeting the definition of a Principal could, in the future, enter into
certain transactions, including
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acquisitions, refinancings or other recapitalizations, that would not constitute
a Change of Control under the Indenture, but that could increase the amount of
Indebtedness outstanding at such time or otherwise affect the Issuers' capital
structure or credit ratings.
SECURITY
Pursuant to the Security Documents, Statia and the Subsidiary Guarantors
granted as collateral to the Trustee for the benefit of the Trustee and the
Holders of the Notes a Lien on certain of the Issuers' real and personal
property, as summarized below, together with the proceeds therefrom and
improvements, alterations, accessions and repairs thereto. The Collateral
includes substantially all of the real and personal property of the Issuers and
the Subsidiary Guarantors located at and/or used in connection with the St.
Eustatius and Point Tupper facilities, as well as all of the Capital Stock of
Statia Canada and the Subsidiary Guarantors outstanding on the Issue Date. The
security interest in the Collateral is a first priority interest (to the extent
attainable by filing or possession), subject to certain permitted encumbrances,
which encumbrances, in the reasonable judgment of Statia, will not adversely
affect the value of the Collateral, except that the security interest in
Accounts Receivable, Inventory and general intangibles and proceeds to the
extent relating thereto (collectively the 'Lender Collateral') is a second
priority interest.
The personal property Collateral has been pledged, or subject to fiduciary
transfer, pursuant to security agreements, securities pledge agreements or
foreign equivalents thereof by and among the Issuers, the Subsidiary Guarantors
and the Trustee (the 'Security Agreements'). The personal property Collateral,
whether now owned or hereafter acquired, will include (i) all machinery and
equipment (other than vehicles, marine vessels and emergency and spill response
equipment) Accounts Receivable and Inventory owned by the Issuers and the
Subsidiary Guarantors located at and/or used in connection with the St.
Eustatius and Point Tupper facilities (together with all improvements,
accessions, alterations, additions, replacements and repairs thereto), (ii) all
of the shares of Capital Stock of Statia Canada and the Subsidiary Guarantors
outstanding on the Issue Date or thereafter acquired, (iii) the assets deposited
or required to be deposited in the Collateral Account pursuant to the Indenture,
(iv) all intellectual property of the Issuers and the Subsidiary Guarantors
including, without limitation, all trademarks, service marks, patents,
copyrights, trade secrets and other proprietary information, (v) all general
intangibles relating to any and all of the foregoing and (vi) all proceeds and
products of any and all of the foregoing.
The real property Collateral has been secured pursuant to mortgages or the
foreign equivalent thereof by and among the appropriate Issuers, Subsidiary
Guarantors and the Trustee (the 'Mortgages'). The real property Collateral will
include all of the interests of the Issuers and/or the Subsidiary Guarantors in
real property and fixtures located at the St. Eustatius and Point Tupper
facilities.
Prior to the consummation of the offering of the Notes, the Trustee and the
lenders (the 'Lenders') under the New Bank Credit Facility will enter into
certain access, use and intercreditor agreements (the 'Access Intercreditor
Agreements'). The Access Intercreditor Agreements provides, among other things,
that (i) the Trustee and the Lenders will provide notices to each other with
respect to the occurrence of an event of default under the Indenture or the New
Bank Credit Facility, as the case may be, (ii) for a period up to 120 days
following the date of receipt by the Lenders of written notice from the Trustee
directing the removal by the Lenders of the Lender Collateral, the Lenders may
enter and use the St. Eustatius facility and the Point Tupper facility to the
extent necessary to complete the manufacture of Inventory, collect Accounts
Receivable and repossess, remove, sell or otherwise dispose of the Lender
Collateral and (iii) until all of the obligations of Statia Canada and Statia
Terminals N.V. (collectively, the 'Borrowers') to the Lenders arising under or
in connection with the New Bank Credit Facility are paid in full (x) the liens
granted to the Trustee for the benefit of the Trustee and the holders of the
Notes) will in all respects, be subject and subordinate to the liens of the
Lenders in the Lender Collateral and (y) the Lenders shall have the exclusive
right to take possession of, sell, lease or otherwise dispose of the Lender
Collateral and to restrict, permit or approve any sale, transfer or other
disposition thereof.
Net Proceeds from a Collateral Asset Sale, except with respect to the sale
of the entity owning the Capital Stock of the Brownsville terminal or any of the
assets constituting the Brownsville terminal, are required to be deposited in
the Collateral Account upon receipt. The Issuers may elect to make a Collateral
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Asset Sale Offer in connection with any Collateral Asset Sale to purchase the
maximum principal amount of Notes that may be purchased out of the Net Proceeds
of such sale at a purchase price of 105% of the principal amount thereof (or the
then-applicable price at which the Notes may be optionally redeemed if less than
105%), plus accrued and unpaid interest, if any, thereon. See '-- Certain
Covenants -- Limitations on Asset Sales.' To the extent a Collateral Asset Sale
Offer is made and not subscribed to by Holders of the Notes, the unutilized Net
Proceeds may be retained by the Issuers free of the Lien of the Indenture and
the Security Documents.
If an Event of Default occurs under the Indenture, the Trustee (on its
behalf and on behalf of the Holders of the Notes), in addition to any rights or
remedies available to it under the Indenture, may take such action as it deems
advisable to protect and enforce its rights in the Collateral, including the
institution of foreclosure proceedings; provided that the rights and remedies
available to the Trustee and the actions permitted to be taken thereby with
respect to the Lender Collateral shall be subject to the provisions of the
Access Intercreditor Agreements. The proceeds received by the Trustee from any
foreclosure will be applied by the Trustee first to pay the expenses of such
foreclosure and fees and other amounts then payable to the Trustee under the
Indenture, and thereafter to pay the principal of, premium, if any, and interest
on the Notes. Until such time, however, as all of the obligations of the
Borrowers owed to the Lenders under the New Bank Credit Facility are paid in
full, the proceeds from any foreclosure or other realization upon the Lender
Collateral will be applied first to pay to the Lenders all amounts then payable
under the New Bank Credit Facility and thereafter in the manner described in the
immediately preceding sentence. There can be no assurance that the proceeds of
any sale of the Collateral in whole pursuant to the Indenture and the Security
Documents following an Event of Default would be sufficient to pay the amount
due on the Notes.
Real property pledged as security to a lender may be subject to known and
unforeseen environmental risks. See 'Risk Factors -- Impact of Environmental
Regulation; Governmental Regulation' and 'Business -- Environmental, Health and
Safety Matters.'
The right of the Trustee to repossess and dispose of the Collateral upon
the occurrence of an Event of Default is likely to be significantly impaired by
applicable bankruptcy law if a bankruptcy proceeding were to be commenced by or
against the Issuers or the Subsidiary Guarantors prior to the Trustee having
repossessed and disposed of the Collateral. See 'Risk Factors -- Risk Relating
to Bankruptcy, Insolvency or Restructuring Proceedings.'
The Issuers under certain circumstances may incur Additional Secured
Indebtedness which will share ratably in the Collateral with the Holders of the
Notes; the principal amount of such Indebtedness will not exceed an amount equal
to the liquidation preference of Parent's then outstanding Series C Preferred
Stock (initially $10 million), plus accrued and unpaid dividends, if any,
thereon. See 'Parent Capital Structure.'
CERTAIN COVENANTS
Limitations on Additional Indebtedness.
The Indenture provides that Statia will not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly, (a) create, incur, assume,
guarantee or otherwise become liable with respect to (collectively, 'incur') any
Indebtedness (including without limitation Acquired Indebtedness), other than
Indebtedness between the Issuers and their Wholly-Owned Restricted Subsidiaries
or among such Wholly-Owned Restricted Subsidiaries and (b) issue (except to
Statia or any of its Wholly-Owned Restricted Subsidiaries) any Capital Stock
having a preference in liquidation or with respect to the payment of dividends,
unless, after giving effect thereto, Statia's Consolidated Fixed Charge Coverage
Ratio on the date thereof would be at least 2.0 to 1, determined on a pro forma
basis as if the incurrence of such additional Indebtedness or the issuance of
such Capital Stock, as the case may be, and the application of the net proceeds
therefrom, had occurred at the beginning of the four-quarter period used to
calculate Statia's Consolidated Fixed Charge Coverage Ratio.
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Notwithstanding the foregoing, Statia and its Restricted Subsidiaries may:
(i) incur Indebtedness in an amount not to exceed the greater of (A) $17.5
million or (B) the sum of 85% of Accounts Receivable, 60% of Inventory and 50%
of the net book value of vessels (other than the M/V Megan D. Gambarella) owned
by Statia and its Restricted Subsidiaries (including Refinancing Indebtedness
with respect thereto); (ii) incur Indebtedness represented by the Notes
(including Refinancing Indebtedness with respect thereto); (iii) incur
Indebtedness in respect of Capitalized Lease Obligations in an aggregate
principal amount not to exceed $5.0 million at any time outstanding (including
Refinancing Indebtedness with respect thereto); (iv) incur Indebtedness in
respect of purchase money obligations in an aggregate amount not to exceed $2.0
million at any time outstanding (including Refinancing Indebtedness with respect
thereto); (v) incur Indebtedness pursuant to the issuance of Subordinated
Management Notes in an aggregate principal amount not to exceed $5.0 million at
any time outstanding; (vi) incur Non-Recourse Purchase Money Indebtedness; (vii)
incur Indebtedness pursuant to Hedging Obligations, provided that such Hedging
Obligations are entered into to protect Statia or its Restricted Subsidiaries
from fluctuations in interest rates on Indebtedness incurred in accordance with
the Indenture to the extent the notional principal amount of such Hedging
Obligation does not exceed the principal amount of the Indebtedness to which
such Hedging Obligation relates; (viii) incur Indebtedness under Currency
Agreements; provided that (x) such Currency Agreements relate to Indebtedness or
the purchase price of goods purchased or sold by Statia or any of its Restricted
Subsidiaries in the ordinary course of its business and (y) such Currency
Agreements do not increase the Indebtedness or other obligations of Statia or
any of its Restricted Subsidiaries outstanding other than as a result of
fluctuations in foreign currency exchange rates; and (ix) incur Indebtedness
under Oil and Petroleum Hedging Contracts; provided that such contracts were
entered into in the ordinary course of business for the purpose of limiting
risks that arise in the ordinary course of business of Statia or any of its
Restricted Subsidiaries.
Limitations on Subsidiary Debt.
The Indenture further provides that, notwithstanding the provisions of the
covenant described above under the caption 'Limitations on Additional
Indebtedness,' Statia will not permit any of its Restricted Subsidiaries,
directly or indirectly, to create, incur, assume, guarantee or otherwise become
liable with respect to (collectively, 'incur') any Indebtedness (which, with
respect to any Restricted Subsidiary, includes without limitation any Capital
Stock of such Restricted Subsidiary having a preference in liquidation or with
respect to the payment of dividends) except Indebtedness permitted to be
incurred by Restricted Subsidiaries of Statia under clauses (i) through (iv) and
(vi) through (ix) of the second paragraph of the covenant described under the
caption 'Limitations on Additional Indebtedness and Additional Secured
Indebtedness.'
Limitations on Restricted Payments.
The Indenture provides that Statia will not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly, make any Restricted Payment
if at the time of such Restricted Payment:
(i) a Default or Event of Default shall have occurred and be
continuing or shall occur as a consequence thereof;
(ii) Statia would be unable to incur an additional $1.00 of
Indebtedness pursuant to the Consolidated Fixed Charge Coverage
Ratio test set forth in the covenant described under 'Limitations
on Additional Indebtedness'; or
(iii) the amount of such Restricted Payment, when added to the
aggregate amount of all Restricted Payments made after the date
of the Indenture, exceeds the sum of (A) 50% of Statia's
Consolidated Net Income (taken as one accounting period) from
the Issue Date to the end of Statia's most recently ended fiscal
quarter for which internal financial statements are available at
the time of such Restricted Payment (or, if such aggregate
Consolidated Net Income shall be a deficit, minus 100% of such
aggregate deficit) plus (B) the net Cash proceeds from the
issuance and sale (other than to a Subsidiary of Statia) after
the date of the Indenture of Statia's Capital Stock that is not
Disqualified Stock, plus (C) to the extent that any Restricted
Investment that was made after the Issue Date is sold for Cash
or otherwise liquidated or repaid for Cash, the lesser of (x)
the Cash return of capital with respect to such Restricted
Investment (less the cost of disposition, if any) and (y) the
initial amount of such Restricted Investment.
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The foregoing provisions (ii) and (iii) do not prohibit: (1) the payment of
any dividend within 60 days after the date of declaration thereof, if at said
date of declaration such payment would have complied with the provisions of the
Indenture; (2) the redemption, repurchase, retirement or other acquisition of
any Capital Stock of Statia in exchange for, or out of the proceeds of, the
substantially concurrent sale (other than to a Subsidiary of Statia) of other
Capital Stock of Statia (other than any Disqualified Stock); (3) the defeasance,
redemption, repurchase or other retirement of subordinated Indebtedness in
exchange for, or out of the proceeds of, the substantially concurrent issue and
sale of (I) subordinated Indebtedness of Statia so long as such subordinated
Indebtedness has no stated maturity earlier than the 91st day after the stated
maturity for the final scheduled principal payment of the Notes or (II) Capital
Stock of Statia (other than (x) Disqualified Stock, (y) Capital Stock sold to a
Subsidiary of Statia and (z) Capital Stock purchased by members of Statia's or
any of its Subsidiaries' management with the proceeds of loans from Statia or
any of its Subsidiaries); (4) the repurchase, redemption or other acquisition or
retirement for value of any Capital Stock of Statia or any Subsidiary of Statia
held by any member of Statia's or any of its Subsidiaries' management pursuant
to any management equity subscription agreement, employment agreement, stock
option agreement or other compensation agreement for Cash or Subordinated
Management Notes; provided, that the aggregate Cash paid for all such
repurchased, redeemed, acquired or retired Capital Stock shall not in any fiscal
year exceed the sum of (w) $350,000 (the 'Management Basket'), (x) any unused
portion of the Management Basket from any prior fiscal year beginning with
fiscal 1997, (y) the aggregate Cash proceeds received by Statia from any key man
life insurance policy and (z) the aggregate Cash proceeds received by Statia
during such fiscal year from any reissuance of Capital Stock by Statia to
members of management of Statia and its Subsidiaries (other than any such
Capital Stock that was purchased with the proceeds of loans from Statia or any
of its Subsidiaries); and provided further, that in no event may the aggregate
principal amount of Subordinated Management Notes so issued exceed $5.0 million
at any one time outstanding; (5) the making of loans to members of Statia's (or
any of its Restricted Subsidiaries') management to enable such Persons to
acquire Capital Stock in Statia pursuant to any management equity subscription
agreement, employment agreement, stock option agreement or other compensation
agreement entered into in the ordinary course of business to the extent the
proceeds are actually used to acquire such Capital Stock; (6) the payment of a
dividend to Parent to enable Parent to pay management fees to Castle Harlan,
Inc. or its designated Affiliate in an amount not to exceed $1.35 million per
annum plus out of pocket costs and expenses pursuant to the Castle Harlan
Agreement as in effect on the Issue Date; (7) the making of Related Business
Investments in joint ventures or Unrestricted Subsidiaries so long as the
aggregate amount of such Related Business Investments made or committed does not
exceed at any time 2% of the Consolidated Tangible Assets of Statia at such
time; (8) the making of a Related Business Investment in joint ventures or
Unrestricted Subsidiaries out of the proceeds of the substantially concurrent
issue and sale of Capital Stock of Statia (other than (x) Disqualified Stock,
(y) Capital Stock sold to a Subsidiary of Statia and (z) Capital Stock purchased
by members of Statia's or its Subsidiaries' management with the proceeds of
loans from Statia or any of its Subsidiaries); (9) the making of one or more
Restricted Payments from the net proceeds from the sale of the M/V Megan D.
Gambarella, in an amount equal to the liquidation preference (initially $10
million) plus accrued and unpaid dividends of Parent's then outstanding Series B
Preferred Stock so long as such funds are used to effect the retirement of such
Series B Preferred Stock; (10) the making of one or more Restricted Payments
with the net proceeds resulting from the sale of the Brownsville facility or
(11) the making of one or more Restricted Payments in an amount equal to the
liquidation preference (initially $10 million) plus accrued and unpaid dividends
of Parent's then outstanding Series C Preferred Stock in order to retire such
Series C Preferred Stock, provided that after giving effect to such Restricted
Payment and any Indebtedness incurred to finance such Restricted Payment, Statia
would be able to incur at least $1.00 of Indebtedness pursuant to the
Consolidated Fixed Charge Coverage Ratio test set forth in the covenant
described under 'Limitations on Additional Indebtedness.'
The amounts referred to in clauses (1), (2), (3)(II), (4), (5), (7), (8)
and (11) shall be included as Restricted Payments in any computation made
pursuant to clause (iii) above.
Not later than the date of making any Restricted Payment, Statia shall
deliver to the Trustee an Officers' Certificate stating that such Restricted
Payment is permitted and setting forth the basis upon which the calculations
required by the covenant 'Limitation on Restricted Payments' were computed,
which calculations shall be based upon Statia's latest available financial
statements.
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Limitations on Restrictions on Distributions from Subsidiaries.
The Indenture provides that Statia will not, and will not permit any of its
Restricted Subsidiaries to, create or otherwise cause or suffer to exist or
become effective any consensual Payment Restriction with respect to any of its
Restricted Subsidiaries, except for any such Payment Restriction existing under
or by reason of (a) applicable law, (b) customary non-assignment provisions in
leases or other contracts entered into in the ordinary course of business and
consistent with past practices, (c) purchase money obligations for property
acquired in the ordinary course of business that impose restrictions of the
nature described in clause (c) of the definition thereof on the property so
acquired, (d) customary restrictions imposed on the transfer of copyrighted or
patented materials, (e) the entering into of a contract for the sale or other
disposition of assets, directly or indirectly, so long as such restrictions do
not extend to assets that are not subject to such sale or other disposition, (f)
provisions in Indebtedness of Restricted Subsidiaries that are permitted by the
Indenture to be incurred that only restrict the transfer of the assets purchased
with the proceeds of such Indebtedness, (g) the terms of the New Bank Credit
Facility on the Issue Date and any similar Payment Restriction under any similar
bank credit facility or any replacement thereof, provided that such similar
Payment Restriction is no more restrictive than the Payment Restriction in
effect on the Issue Date under the New Bank Credit Facility, (h) the terms of
any agreement evidencing any Acquired Indebtedness that was permitted to be
incurred pursuant to the Indenture, provided that such Payment Restriction only
applies to assets that were subject to such restriction and encumbrances prior
to the acquisition of such assets by Statia or its Restricted Subsidiaries and
(i) any such Payment Restriction arising in connection with Refinancing
Indebtedness; provided that any such Payment Restrictions that arise under such
Refinancing Indebtedness are not, taken as a whole, more restrictive than those
under the agreement creating or evidencing the Indebtedness being refunded or
refinanced.
Limitations on Transactions with Affiliates.
The Indenture provides that Statia will not, and will not permit any of its
Restricted Subsidiaries to, sell, lease, transfer or otherwise dispose of any of
its properties or assets to, or purchase any property or assets from or enter
into any contract, agreement, understanding, loan, advance or guarantee with, or
for the benefit of, any Affiliate (each of the foregoing, an 'Affiliate
Transaction'), unless (i) such Affiliate Transaction is on terms that are no
less favorable to Statia or the relevant Restricted Subsidiary than those that
would have been obtained in a comparable transaction by Statia or such
Restricted Subsidiary with an unrelated Person and (ii) Statia delivers to the
Trustee (a) with respect to any Affiliate Transaction involving aggregate
payments in excess of $1.0 million, a resolution of its Board of Directors set
forth in an Officers' Certificate certifying that such Affiliate Transaction
complies with clause (i) above and such Affiliate Transaction is approved by a
majority of the disinterested members of the Board of Directors and (b) with
respect to any Affiliate Transaction involving aggregate payments in excess of
$5.0 million, an opinion as to the fairness to Statia or such Restricted
Subsidiary from a financial point of view issued by an Independent Financial
Advisor; provided, however that (x) any employment agreement entered into by
Statia or any of its Restricted Subsidiaries in the ordinary course of business
and consistent with the past practice of Statia or such Restricted Subsidiary,
(y) transactions between or among Statia and/or its Restricted Subsidiaries and
(z) transactions permitted by the provisions of the Indenture described above
under the covenant 'Limitations on Restricted Payments,' in each case, shall not
be deemed Affiliate Transactions.
Limitations on Liens.
The Indenture provides that neither Statia nor any of its Restricted
Subsidiaries may directly or indirectly create, incur, assume or suffer to exist
any Lien on any property or asset now owned or hereafter acquired, or on any
income or profits therefrom, or assign or convey any right to receive income
therefrom, except (i) in the case of any property or asset which does not
constitute Collateral, Permitted Liens, unless the Notes are equally and ratably
secured for as long as such secured Indebtedness is so secured, and (ii) in the
case of any property or asset which constitutes Collateral, Liens specifically
permitted by the applicable Security Documents.
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Limitations on Asset Sales; Offers to Purchase.
The Indenture provides that Statia will not, and will not permit any of its
Restricted Subsidiaries to, consummate any Asset Sale involving any of the
Collateral (other than the Lender Collateral) (a 'Collateral Asset Sale') unless
(i) Statia and its Restricted Subsidiaries receive consideration at the time of
such Collateral Asset Sale at least equal to the fair market value of the assets
included in such Collateral Asset Sale; (ii) the aggregate fair market value of
the consideration from all such Collateral Asset Sales that is not in the form
of Cash or Financial Instruments shall not, when aggregated with the fair market
value of all other non-Cash or non-Financial Instrument consideration received
by Statia and its Restricted Subsidiaries from all previous Collateral Asset
Sales since the date of the Indenture that have not yet been converted into Cash
or Financial Instruments, exceed 5% of the Consolidated Tangible Assets of
Statia at the time of, and prior to giving effect to, such Collateral Asset
Sale; (iii) the Net Proceeds thereof shall be paid directly by the purchaser
thereof to the Trustee for deposit into the Collateral Account; and (iv) if any
property other than Financial Instruments is included in the Net Proceeds of
such Collateral Asset Sale, such property shall be made subject to the Lien of
the Indenture and the Security Documents; provided that any Cash received shall
be immediately exchanged for Financial Instruments; and provided further, that
the Land Swap shall be excluded from any computation made pursuant to clause (i)
or (ii) above. Upon consummation of such Collateral Asset Sale and deposit of
the Net Proceeds thereof in the Collateral Account, such Net Proceeds shall, at
the option of the Issuers, (a) be left in the Collateral Account as security for
the Notes, or (b) be reinvested in a manner that would constitute a Related
Business Investment or a Permitted Related Acquisition, provided that such
property will be subject to a first priority Lien in favor of the Trustee and
will constitute Collateral, or (c) subject to the limitations set forth in the
sixth paragraph of this section, be applied to purchase the maximum principal
amount of Notes tendered to Statia that may be purchased out of the Net Proceeds
of such sale pursuant to an Offer to Purchase made by Statia as set forth below
(the 'Collateral Asset Sale Offer') at a purchase price equal to 105% of
principal amount (or, if the then-applicable price at which the Notes may be
optionally redeemed is less than 105%, at such lesser price), plus accrued and
unpaid interest, if any, thereon to the date of purchase. Notwithstanding the
preceding provisions of this section neither Statia nor any of its Restricted
Subsidiaries shall cause all or substantially all of the Collateral located at
or used in connection with the St. Eustatius facility or the Point Tupper
facility to be sold or disposed of in a Collateral Asset Sale on or prior to the
Fifth Anniversary. If, subsequent to the Fifth Anniversary, Statia or any of its
Restricted Subsidiaries cause all or substantially all of the Collateral located
at or used in connection with the St. Eustatius facility to be sold or disposed
of in a Collateral Asset Sale, Statia or the applicable Restricted Subsidiary
shall make a Collateral Asset Sale Offer to purchase all of the outstanding
Notes within 30 days of such Collateral Asset Sale at a purchase price equal to
the then-applicable price at which the Notes may be optionally redeemed, plus
accrued and unpaid interest, if any, thereon to the date of purchase. To the
extent a Collateral Asset Sale Offer is made and not fully subscribed to by
Holders of the Notes, the unutilized Net Proceeds to which such Collateral Asset
Sale Offer related may be retained by the Issuers free and clear of the Lien of
the Indenture and the Security Documents.
For purposes of the foregoing covenant regarding Collateral Asset Sales,
there will be no limitation on the sale or other disposition of Lender
Collateral until such time as all of the obligations of the Borrowers owed to
the Lenders under the New Bank Credit Facility are paid in full. Notwithstanding
the foregoing, the sale or other disposition of the Capital Stock of the entity
owning the Brownsville facility will not be considered a Collateral Asset Sale
and any net proceeds therefrom will not be deposited in the Collateral Account.
The Indenture provides that Statia will not, and will not permit any of its
Restricted Subsidiaries to, consummate any Asset Sale not involving any of the
Collateral (other than Lender Collateral) (a 'Non-Collateral Asset Sale'),
unless (i) Statia or its Restricted Subsidiaries receive consideration at the
time of such Non-Collateral Asset Sale at least equal to the fair market value
of the assets included in such Non-Collateral Asset Sale, and (ii) the aggregate
fair market value of the consideration from all such Non-Collateral Asset Sales
that is not in the form of Cash or Financial Instruments shall not, when
aggregated with the fair market value of all other non-Cash or non-Financial
Instruments consideration received by Statia and its Restricted Subsidiaries
from all previous Non-Collateral Asset Sales since the Issue Date that
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have not yet been converted into Cash or Financial Instruments, exceed 5% of the
Consolidated Tangible Assets of Statia at the time of, and prior to giving
effect to, such Non-Collateral Asset Sale. Upon consummation of any such
Non-Collateral Asset Sale, Statia shall, or shall cause the applicable
Restricted Subsidiary to, within 360 days of the receipt of the proceeds
therefrom, (a) reinvest the Net Proceeds of such Non-Collateral Asset Sale in a
manner that would constitute a Related Business Investment or a Permitted
Related Acquisition; (b) use the Net Proceeds to repay outstanding Indebtedness
under the New Bank Credit Facility and, in the case of any Non-Collateral Asset
Sale (other than any sale of Lender Collateral), use the Net Proceeds to repay
outstanding Indebtedness ranking pari passu with the Notes; provided, that any
such repayment of Indebtedness under the New Bank Credit Facility or any other
revolving credit facility or similar agreement shall result in a permanent
reduction in the lending commitment relating thereto in an amount equal to the
principal amount so repaid; or (c) subject to the limitations set forth in the
sixth paragraph of this section, apply or cause to be applied the Net Proceeds
of such Non-Collateral Asset Sale that are neither reinvested as provided in
clause (a) nor applied to the repayment of Indebtedness as provided in clause
(b) to the purchase of the maximum principal amount of Notes tendered to Statia
that may be purchased out of such Net Proceeds at a purchase price equal to 100%
of the principal amount thereof, plus accrued and unpaid interest, if any,
thereon to the date of purchase, pursuant to an Offer to Purchase made by Statia
as set forth below (a 'Non-Collateral Asset Sale Offer'); provided that Statia
may defer the Non-Collateral Asset Sale Offer until the amount subject thereto
would be at least $5.0 million. All Net Proceeds from Non-Collateral Asset Sales
shall be deposited into the Collateral Account pending application in accordance
with the provisions of this covenant. To the extent a Non-Collateral Asset Sale
Offer is made and not fully subscribed to by Holders of the Notes, the
unutilized Net Proceeds to which such Offer related may be retained by the
Issuers free and clear of the Lien of the Indenture and the Security Documents.
The Indenture provides that proceeds of insurance relating to the
destruction of all or any portion of the Collateral or any award relating to a
taking of all or any portion of the Collateral by eminent domain that has not
been applied as set forth in '--Possession, Use and Release of Collateral' (a)
shall be left in the Collateral Account as security for the Notes, or (b)
subject to the limitations set forth in the sixth paragraph of this section,
shall be used by Statia and its Restricted Subsidiaries, to the extent not
utilized to repair or replace the Collateral affected by such destruction or
taking in accordance with the provisions of the applicable Security Document, to
make an offer to purchase the maximum principal amount of Notes that may be
purchased out of such proceeds or award (a 'Proceeds Offer') at a purchase price
equal to 100% of the principal amount thereof, plus accrued and unpaid interest,
if any, thereon to the date of purchase. Notwithstanding anything herein to the
contrary, the proceeds of insurance relating to the destruction of, or an award
relating to the taking of, all or substantially all of the Collateral located at
or used in connection with the St. Eustatius facility or the Point Tupper
facility, following the Fifth Anniversary, shall be used to make a Proceeds
Offer within 30 days after receipt of such proceeds at a purchase price equal to
100% of the principal amount thereof, plus accrued and unpaid interest, if any,
thereon to the date of purchase. To the extent a Proceeds Offer is made and not
fully subscribed to by holders of the Notes, the unutilized net proceeds to
which such Offer related may be retained by the Issuers free and clear of the
Lien of the Indenture and the Security Documents.
For purposes of the foregoing covenant (i) 'all or substantially all' shall
mean the Taking or Destruction of such portion of the Collateral with respect to
any Facility that will cause the Cost of Construction (as defined in the
Mortgages) to rebuild or replace such Collateral to exceed the amount of
insurance maintained by the Issuers and their Restricted Subsidiaries with
respect to such Facility and (ii) until such time as all of the obligations of
the New Bank Borrowers owed to the New Bank Lenders under the New Bank Credit
Facility are paid in full, Lender Collateral shall be deemed not to constitute
Collateral.
Notwithstanding the foregoing, in no event shall the Issuers purchase
pursuant to Offers to Purchase Notes having an original issue price of more than
25% of the aggregate original issue price of the Notes on or prior to the Fifth
Anniversary. If the foregoing limitation applies, the Issuers shall use any
excess net proceeds that, but for the application of such limitation, would have
been required to be used to make an Offer to Purchase on or prior to the Fifth
Anniversary to make an Offer to Purchase to all holders of Notes
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at a purchase price equal to 100% of the principal amount thereof, plus accrued
and unpaid interest, if any, thereon to the date of purchase, promptly after the
Fifth Anniversary; provided that the Issuers may defer such Offer to Purchase
until the aggregate of such excess net proceeds and the aggregate unutilized
amount of net proceeds realized after the Fifth Anniversary is equal to or
exceeds $5.0 million (at which point the entire amount shall be applied to make
such Offer to Purchase).
Each Offer to Purchase: (A) with respect to Non-Collateral Asset Sales and
Proceeds Offers only, will be mailed to the record holders of the Notes as shown
on the register of holders of Notes not more than 360 days after a
Non-Collateral Asset Sale or 30 days after receipt of insurance proceeds or
condemnation awards giving rise to a requirement to make an Offer to Purchase,
with a copy to the Trustee; (B) with respect to any Offer to Purchase, will
specify the purchase date (which shall be no earlier than 30 days nor later than
40 days from the date such notice is mailed); and (C) otherwise will comply with
the procedures set forth in the Indenture. Upon receiving notice of the Offer to
Purchase, Holders of Notes may elect to tender their Notes in whole or in part
in integral multiples of $1,000 in exchange for U.S. legal tender. To the extent
holders properly tender Notes in an amount exceeding the amount of Net Proceeds
or net insurance proceeds or condemnation awards, as applicable, used to make an
Offer to Purchase, Notes of tendering holders will be repurchased on a pro rata
basis (based on amounts tendered). To the extent any Offer to Purchase is not
fully subscribed to by the holders of the Notes, the Issuers may retain the
unutilized portion of the net proceeds free and clear of the Lien of the
Indenture and the Security Documents.
Statia will comply with the requirements of Section 14(e) under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the
repurchase of Notes pursuant to any Offer to Purchase. Any such Offer to
Purchase may provide that Statia's obligations thereunder to purchase Notes
offered pursuant thereto shall be suspended if there shall be in effect a
binding order of any court of competent jurisdiction prohibiting consummation of
such Offer to Purchase and shall be terminated if any such order shall become
final and non-appealable; provided, however, that Statia shall use its
reasonable best efforts to prevent the entry of any such order or to cause the
lifting of any such order as soon as practicable.
Limitations on Sale and Leaseback Transactions.
The Indenture provides that Statia will not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly, enter into, renew or extend
any Sale and Leaseback Transaction (other than a Sale and Leaseback Transaction
between Statia and any of its Wholly-Owned Restricted Subsidiaries or between
Wholly-Owned Restricted Subsidiaries of Statia, as the case may be) unless: (i)
Statia or such Restricted Subsidiary would be entitled, under the covenants
described under 'Limitations on Additional Indebtedness' and 'Limitations on
Subsidiary Debt' to incur Indebtedness in an amount equal to the Attributable
Indebtedness with respect to such Sale and Leaseback Transaction, (ii) such Sale
and Leaseback Transaction would not result in a violation of the covenant
described under 'Limitations on Liens'; and (iii) the Net Proceeds from any such
Sale and Leaseback Transaction are applied in a manner consistent with the
provisions described under 'Limitations on Asset Sales.'
Restrictions on Sale of Stock of Subsidiaries.
The Indenture provides that, except with respect to the Capital Stock of
the entity owning the Brownsville terminal, Statia will not, and will not permit
any Restricted Subsidiary to, sell or otherwise dispose of any of the Capital
Stock of any Restricted Subsidiary unless: (i) (a) Statia shall retain ownership
of more than 50% of the Common Equity of such Restricted Subsidiary or (b)
except with respect to Statia Canada, all of the Capital Stock of such
Restricted Subsidiary shall be sold or otherwise disposed of; and (ii) the Net
Proceeds from any such sale or disposition are applied in a manner consistent
with the provisions described under 'Limitations on Asset Sales.'
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Limitations on Mergers and Certain Other Transactions.
The Indenture provides that the Issuers will not, in any transaction or
series of related transactions, (i) consolidate or merge with or into (other
than a merger with a Wholly-Owned Restricted Subsidiary solely for the purpose
of changing the applicable Issuer's jurisdiction of incorporation to one of the
States of the U.S.), or sell, lease, convey or otherwise dispose of or assign
all or substantially all of the assets of Statia and its Restricted Subsidiaries
(taken as a whole), or assign any of its obligations under the Notes, the
Indenture or the Security Documents, to any Person or (ii) adopt a Plan of
Liquidation unless, in either case: (a) the Person formed by or surviving such
consolidation or merger (if other than an Issuer) or to which such sale, lease,
conveyance or other disposition or assignment shall be made (or, in the case of
a Plan of Liquidation, any Person to which assets are transferred)
(collectively, the 'Successor'), is a corporation organized and existing under
(x) the laws of the Netherlands Antilles, (y) the laws of the U.S. or any State
thereof or the District of Columbia or (z) the laws of Canada or any province
thereof, and the Successor assumes by supplemental indenture in a form
satisfactory to the Trustee all of the obligations of the applicable Issuer
under the Notes, the Indenture and the Security Documents; (b) immediately prior
to and immediately after giving effect to such transaction and the assumption of
the obligations as set forth in clause (a) above and the incurrence of any
Indebtedness to be incurred in connection therewith, no Default or Event of
Default shall have occurred and be continuing; and (c) immediately after and
giving effect to such transaction and the assumption of the obligations set
forth in clause (a) above and the incurrence of any Indebtedness to be incurred
in connection therewith, and the use of any net proceeds therefrom on a pro
forma basis, (1) the Consolidated Net Worth of the applicable Issuer or the
Successor, as the case may be, would be at least equal to the Consolidated Net
Worth of such Issuer immediately prior to such transaction and (2) Statia or the
Successor, as the case may be, could incur at least $1.00 of additional
Indebtedness pursuant to the Consolidated Fixed Charge Coverage Ratio test set
forth in the covenant described under 'Limitations on Additional Indebtedness;'
(d) each Subsidiary Guarantor, unless it is the other party to the transactions
described above, shall have by amendment to its guarantee confirmed that its
guarantee of the Notes shall apply to the obligations of the Issuers or the
Successor under the Notes and the Indenture; and (e) the Trustee is satisfied
that the transaction will not, in and of itself, result in the Issuers or the
Successor being required to make any deduction or withholding for or on account
of Taxes from any payments made under or with respect to the Notes.
Impairment of Security Interest.
The Indenture provides that Statia will not, and will not permit any of its
Restricted Subsidiaries to, (i) take or omit to take any action with respect to
the Collateral that might or would have the result of affecting or impairing the
security interest in the Collateral in favor of the Trustee for its benefit and
for the benefit of the Holders or (ii) grant to any Person (other than the
Trustee for its benefit and for the benefit of the Holders) any interest
whatsoever in the Collateral, in each case except as expressly provided for in
the Indenture or the Security Documents.
Amendment to Security Documents.
The Indenture provides that Statia will not, and will not permit any of its
Restricted Subsidiaries to, amend, modify or supplement, or permit or consent to
any amendment, modification or supplement of, the Security Documents in any way
that would be adverse to the Holders.
Additional Subsidiary Guarantors.
The Indenture provides that if Statia or any of its Restricted Subsidiaries
shall acquire or create another Subsidiary, then such newly acquired or created
Subsidiary will be required to execute a Guarantee and deliver an Opinion of
Counsel, in accordance with the terms of the Indenture, unless it has been
designated as an Unrestricted Subsidiary.
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Change of Business.
The Indenture provides that, if an Issuer or any Subsidiary Guarantor
conducts business in any jurisdiction (the 'Taxing Jurisdiction') other than the
Netherlands Antilles or Canada in a manner which causes Holders to be liable for
Taxes on payments under the Notes which they would not have been so liable but
for such conduct of business in the Taxing Jurisdiction, the provision of the
Notes described under the caption 'Additional Amounts; Indemnification' shall be
considered to apply to such Holders as if references in such provision to
'Taxes' includes Taxes imposed by way of deduction or withholding by such Taxing
Jurisdiction and references to 'Taxing Authority' includes the Taxing
Jurisdiction.
Reports.
Whether or not required by the rules and regulations of the Commission, so
long as any Notes are outstanding, Statia will furnish to the Holders of Notes
(i) all quarterly and annual financial information that would be required to be
contained in a filing with the Commission on Forms 10-Q and 10-K (or if
applicable, any analogous forms for foreign issuers) if Statia were required to
file such Forms, including a 'Management's Discussion and Analysis of Financial
Condition and Results of Operations' that describes the financial condition and
results of operations of Statia and its Restricted Subsidiaries, and, with
respect to the annual information only, a report thereon by Statia's certified
independent accountants and (ii) all reports that would be filed with the
Commission on Form 8-K if Statia were required to file such reports. In
addition, whether or not required by the rules and regulations of the
Commission, Statia will file a copy of all such information and reports with the
Commission for public availability (unless the Commission will not accept such a
filing) and make such information available to investors who request it in
writing. The Issuers have agreed that, for so long as any Notes remain
outstanding, they will furnish to the Holders and beneficial holders of Notes
and to prospective purchasers of Notes designated by the Holders of Transfer
Restricted Securities (as defined in the Registration Rights Agreement) and to
broker dealers, upon their request, the information required to be delivered
pursuant to Rule 144(d)(4) under the Securities Act.
EVENTS OF DEFAULT
An 'Event of Default' is defined in the Indenture as (i) failure by the
Issuers to pay interest or any Additional Amounts or Reimbursement Payments
related thereto on any of the Notes, or any Liquidated Damages, when it becomes
due and payable and the continuance of any such failure for 30 days; (ii)
failure by the Issuers to pay the principal or premium, if any, on any of the
Notes, when it becomes due and payable, whether at stated maturity, upon
redemption, upon acceleration or otherwise; (iii) either Issuer shall fail to
comply with any of its agreements or covenants in the 'Limitations on Mergers
and Certain Other Transactions' or 'Limitations on Asset Sales' covenants
described above; (iv) failure by the Issuers to comply with any other covenant
in the Indenture or the Security Documents and continuance of such failure for
30 days after notice of such failure has been given to the Issuers by the
Trustee or by the Holders of at least 25% of the aggregate principal amount of
the Notes then outstanding; (v) failure by either of the Issuers or any of their
Subsidiaries to make any payment when due or during any applicable grace period
in respect of any Indebtedness of the Issuers or any of such Subsidiaries that
has an aggregate outstanding principal amount of $2.5 million or more; (vi) a
default under any Indebtedness of the Issuers or any Subsidiary, whether such
Indebtedness now exists or hereafter shall be created, if (A) such default
results in the holder or holders of such Indebtedness causing the Indebtedness
to become due prior to its stated maturity and (B) the outstanding principal
amount of such Indebtedness, together with the outstanding principal amount of
any other such Indebtedness the maturity of which has been so accelerated,
aggregate $2.5 million or more at any one time; (vii) one or more final
judgments or orders that exceed $2.5 million in the aggregate for the payment of
money have been entered by a court or courts of competent jurisdiction against
the Issuers or any Subsidiary of the Issuers and such judgment or judgments have
not been satisfied, stayed, annulled or rescinded within 60 days of being
entered; (viii) certain events of bankruptcy, insolvency or reorganization
involving the Issuers or any Significant Subsidiary of the Issuers; (ix) any of
the Security Documents ceases to be in full force and effect or any of the
Security Documents ceases to give the Trustee the Liens, rights, powers and
privileges purported to be created thereby; (x) the occurrence of a Change of
Control; and (xi) on or prior to the Fifth Anniversary, (A) the sale, transfer
or other disposition
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by the Issuers and their Restricted Subsidiaries of all or substantially all of
the Collateral located at or used in connection with the St. Eustatius or Point
Tupper facilities, (B) all or substantially all of the Collateral located at the
St. Eustatius or Point Tupper facilities is destroyed or is subject to a taking
by eminent domain or (C) the Issuers and their Restricted Subsidiaries
consummate Asset Sales with a fair market value in excess of $100 million in the
aggregate, provided that such Event of Default may be cured by the Issuers
making an Offer to Purchase the maximum principal amount of Notes that may be
purchased out of the net proceeds received from the events specified in clauses
(A)-(C) above (less any net proceeds previously applied to an Offer to
Purchase); provided further that such Offer to Purchase shall be made within 60
days of the event specified above at a price of 105% (100% with respect to
clause (B) above) of the principal amount of the Notes, plus accrued and unpaid
interest, if any, thereon.
If an Event of Default (other than an Event of Default specified in clause
(viii) above involving either of the Issuers or in clause (x) or (xi) above),
shall have occurred and be continuing under the Indenture, or an Event of
Default specified in clause (x) above shall occur and be continuing and the
Issuers (or a third party) shall fail to make a Change of Control Offer at the
times and in the manner specified under '--Change of Control,' or an Event of
Default specified in clause (xi) above shall occur and be continuing and the
Issuers shall fail to make an Offer to Purchase at the time and in the manner
specified above, the Trustee by written notice to Statia, or the Holders of at
least 25% in aggregate principal amount of the Notes then outstanding by written
notice to Statia and the Trustee, may declare all amounts owing under the Notes
to be due and payable immediately. Upon such declaration of acceleration, the
aggregate principal amount and accrued and unpaid interest, if any, on the
outstanding Notes shall immediately become due and payable. If an Event of
Default results from bankruptcy, insolvency or reorganization involving either
Issuer, all outstanding Notes shall become due and payable without any further
action or notice. In certain cases, the Holders of a majority in aggregate
principal amount of the Notes then outstanding may waive an existing Default or
Event of Default and its consequences, except a default in the payment of
principal of, premium, if any, and interest on the Notes.
The Holders may not enforce the provisions of the Indenture or the Notes
except as provided in the Indenture. Subject to certain limitations, Holders of
a majority in principal amount of the Notes then outstanding may direct the
Trustee in its exercise of any trust or power; provided however, that such
direction does not conflict with the terms of the Indenture. The Trustee may
withhold from the Holders notice of any continuing Default or Event of Default
(except any Default or Event of Default in payment of principal amount, premium,
if any, or interest on the Notes) if the Trustee determines that withholding
such notice is in the Holders' interest.
The Issuers are required to deliver to the Trustee annually a statement
regarding compliance with the Indenture and, upon any Officer of either of the
Issuers becoming aware of any Default or Event of Default, a statement
specifying such Default or Event of Default and what action the Issuers are
taking or propose to take with respect thereto.
POSSESSION, USE AND RELEASE OF COLLATERAL
Unless an Event of Default shall have occurred and be continuing, the
Issuers and the Subsidiary Guarantors will have the right to remain in
possession and retain exclusive control of the Collateral, to operate the
Collateral (other than any Financial Instruments constituting part of the
Collateral and deposited with the Trustee and other than as set forth in the
Security Documents) and to collect, invest and dispose of any income thereon.
The Issuers will have the right to obtain a release of items of Collateral
other than certain Trust Moneys (the 'Released Interests') subject to an Asset
Sale and the Trustee will release the Released Interests from the Lien of the
Security Documents and reconvey the Released Interests to the appropriate Issuer
or Subsidiary Guarantor, upon compliance with the condition that the appropriate
Issuer or Subsidiary Guarantor deliver to the Trustee the following, among other
items:
(a) A notice from the appropriate Issuer or Subsidiary Guarantor
requesting the release of the Released Interests (i) describing the
proposed Released Interests, (ii) specifying the value of such Released
Interests on a date within 60 days of such notice (the 'Valuation Date'),
(iii) except with
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respect to the Land Swap, stating that the purchase price to be received is
at least equal to the fair market value of the Released Interests, (iv)
stating that the release of such Released Interests will not interfere with
the Trustee's ability to realize the value of the remaining Collateral and
will not impair the maintenance and operation of the remaining Collateral,
(v) confirming the sale of, or an agreement to sell, such Released
Interests in a bona fide sale to a Person that is not an Affiliate of any
of the Issuers or Subsidiary Guarantors or, in the event that such sale is
to a Person that is an Affiliate, confirming that such sale is made in
compliance with the provisions set forth in the 'Limitation on Transactions
with Affiliates' covenant, (vi) certifying that such Asset Sale complies
with the terms and conditions of the Indenture with respect thereto, and
(vii) in the event there is to be a substitution of property for the
Collateral subject to the Asset Sale, specifying the property intended to
be substituted for the Collateral to be disposed of,
(b) An Officers' Certificate of the appropriate Issuer or Subsidiary
Guarantor stating that (i) such Asset Sale covers only the Released
Interests and complies with the terms and conditions of the Indenture with
respect to Asset Sales, (ii) all Net Proceeds from the sale of any of the
Released Interests will be applied pursuant to the provisions of the
Indenture in respect of Asset Sales, (iii) there is no Default or Event of
Default in effect or continuing on the date thereof or the date of such
Asset Sale, (iv) the release of the Collateral will not result in a Default
or Event of Default under the Indenture, and (v) all conditions precedent
in the Indenture relating to the release in question have been complied
with, and
(c) All documentation required by the Trust Indenture Act, if any,
prior to the release of Collateral by the Trustee and, in the event there
is to be a substitution of property for the Collateral subject to the Asset
Sale, all documentation necessary to subject such new Collateral to the
Lien of the Security Documents.
So long as no Event of Default shall have occurred and be continuing, the
Issuers and the Subsidiary Guarantors, without consent by the Trustee, may sell
or otherwise dispose of any Permitted Equipment that may be defective or may
have become worn out or obsolete or is no longer used or useful in the operation
of the St. Eustatius or Point Tupper Facilities, provided, however, that the
aggregate fair market value of such equipment does not exceed $500,000 and such
equipment is sold in a commercially reasonably manner to an unaffiliated third
party and certain certificates and opinions are delivered to the Trustee. In
addition, so long as no Default or Event of Default shall have occurred and be
continuing, the Issuers and the Subsidiary Guarantors may, without any release
or consent by the Trustee, do a number of ordinary course activities, upon
satisfaction of certain conditions. For example, subject to specified
limitations and conditions, the Issuers and the Subsidiary Guarantors would be
permitted to grant rights-of-way and easements over or in respect of any real
property; abandon, terminate, cancel, release or make alterations in or
substitutions of any leases, contracts or rights-of-way; alter, repair, replace,
change the location or position of and add to its plants, structures, machinery,
systems, equipment, fixtures and appurtenances; grant a non-exclusive license of
any intellectual property; abandon intellectual property; under certain
circumstances surrender or modify any franchise, license or permit subject to
the Lien of the Security Documents which it may own or under which it may be
operating; and grant leases or subleases in respect to any Real Property.
Proceeds of insurance relating to the destruction of all or any portion of
the Collateral or an award relating to a taking of all or any portion of the
Collateral by eminent domain, net of all expenses reasonably incurred by the
Issuers or any of their Restricted Subsidiaries in the collection thereof, will
be exchanged for Financial Instruments and deposited with the Trustee and held
in the Collateral Account. The Issuers or the appropriate Subsidiary Guarantor
may withdraw such proceeds or an award from the Collateral Account to reimburse
such Issuer or the appropriate Subsidiary Guarantor for expenditures made, or to
pay costs incurred, by such Issuer or the appropriate Subsidiary Guarantor to
repair, rebuild or replace the Collateral destroyed or taken, subject to
compliance with certain conditions, including, without limitation, delivery to
the Trustee of an opinion of counsel that the Trustee has a valid and perfected
Lien on such repairs, rebuildings and replacements.
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DISCHARGE OF INDENTURE
The Indenture permits the Issuers to terminate all of their obligations
under the Indenture, other than the obligation to pay the principal of, premium,
if any, and interest on the Notes, and certain other obligations and to release
the Collateral from the Lien of the Indenture and the Security Documents, at any
time after the 91st day following the (i) deposit in trust with the Trustee,
under an irrevocable trust agreement, money or U.S. Government obligations in an
amount sufficient to pay principal of, premium, if any, and interest on the
Notes to their maturity or redemption, as the case may be, and (ii) compliance
with certain other conditions, including delivery to the Trustee of an opinion
of counsel to the effect that after the 91st day following their deposit, the
trust funds will not be subject to the effect of any applicable bankruptcy,
insolvency, reorganization or similar laws affecting creditors' rights generally
or to the rights of any other creditor of the Issuers or any Subsidiary
Guarantor other than those continuing rights of the applicable Holders of Notes,
delivery to the Trustee of an opinion of counsel or a ruling received from the
Internal Revenue Service to the effect that Holders will not recognize income,
gain or loss for U.S. Federal income tax purposes as a result of the Issuers'
exercise of such right and will be subject to U.S. Federal income tax on the
same amount and in the same amount and in the same manner and at the same times
as would have been the case otherwise and the delivery to the Trustee of an
opinion of counsel in Canada and the Netherlands Antilles to the effect that
Holders will not recognize income, gain or loss for Canadian federal and
provincial tax or Netherlands Antilles tax, as the case may be, and other tax
purposes as a result of the Issuers' exercise of such rights and will be subject
to Canadian federal and provincial tax or Netherlands Antilles tax, as the case
may be, and other tax on the same amounts, in the same manner and at the same
time as would have been the case had the Issuers not exercised such rights.
TRANSFER AND EXCHANGE
A Holder will be able to register the transfer of or exchange Notes only in
accordance with the provisions of the Indenture. The Registrar may require a
Holder, among other things, to furnish appropriate endorsements and transfer
documents and to pay any taxes and fees required by law or permitted by the
Indenture. Without the prior consent of the Issuers, the Registrar is not
required (i) to register the transfer of or exchange any Note selected for
redemption, (ii) to register the transfer of or exchange any Note for a period
of 15 days before a selection of Notes to be redeemed or (iii) to register the
transfer or exchange of a Note between a record date and the next succeeding
interest payment date. The Holder of a Note will be treated as the owner of such
Note for all purposes.
AMENDMENT, SUPPLEMENT AND WAIVER
Subject to certain exceptions, the Indenture or the Notes may be amended or
supplemented with the consent (which may include consents obtained in connection
with a tender offer or exchange offer for Notes) of the Holders of at least a
majority in principal amount of the Notes then outstanding, and any existing
Default under, or compliance with any provision of, the Indenture may be waived
(other than any continuing Default or Event of Default in the payment of the
principal of, premium, if any, or interest on the Notes) with the consent (which
may include consents obtained in connection with a tender offer or exchange
offer for Notes) of the Holders of a majority in principal amount of the Notes
then outstanding. Without the consent of any Holder, the Issuers and the Trustee
may amend or supplement the Indenture or the Notes to cure any ambiguity, defect
or inconsistency, to provide for uncertificated Notes in addition to or in place
of certificated Notes, to provide for the assumption of the Issuers' obligations
to Holders in the case of a merger or acquisition, or to make any change that
does not adversely affect the rights of any Holder.
Without the consent of the Holders of at least 75% in principal amount of
the Notes then outstanding (including consents obtained in connection with a
tender offer or exchange offer for such Notes), no waiver or amendment to the
Indenture may make any change in the provisions described above under the
caption 'Change of Control' or in the obligations of the Issuers to make a
Non-Collateral Asset Sale Offer or Proceeds Offer that adversely affects the
rights of any Holder of the Notes.
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Without the consent of each holder affected, the Issuers and the Trustee
may not: (i) extend the maturity of any Note; (ii) affect the terms of any
scheduled payment of interest on or principal of the Notes (including without
limitation any redemption provisions); (iii) take any action that would
subordinate the Notes to any other Indebtedness of the Issuers or any of their
Subsidiaries; (iv) modify or amend the Indenture or the Security Documents, or
take or fail to take any action, that would have the effect of impairing the
lien on the Collateral or permit any release of Collateral from the lien of the
Security Documents except as expressly contemplated by the Indenture; (v) reduce
the percentage of holders necessary to consent to an amendment, supplement or
waiver to the Indenture or (vi) make any change to the Indenture or the Notes
that would result in the Issuers being required to make any deduction or
withholding from payments made under or with respect to the Notes or adversely
affect the right of the holders to receive Additional Amounts or Reimbursement
Payments as described under '-- Additional Amounts; Indemnification.'
CONCERNING THE TRUSTEE
The Indenture contains certain limitations on the rights of the Trustee,
should it become a creditor of the Issuers, to obtain payment of claims in
certain cases, or to realize on certain property received in respect of any such
claim as security or otherwise. The Trustee will be permitted to engage in other
transactions; however, if it acquires any conflicting interest (as defined in
the Indenture), it must eliminate such conflict or resign.
The holders of a majority in principal amount of the then outstanding Notes
will have the right to direct the time, method and place of conducting any
proceeding for exercising any remedy available to the Trustee, subject to
certain exceptions. The Indenture provides that, in case an Event of Default
occurs and is not cured, the Trustee will be required, in the exercise of its
power, to use the degree of care of a prudent person in similar circumstances in
the conduct of his own affairs. Subject to such provisions, the Trustee will be
under no obligation to exercise any of its rights or powers under the Indenture
at the request of any holder, unless such holder shall have offered to the
Trustee security and indemnity satisfactory to the Trustee.
GOVERNING LAW; CONSENT TO JURISDICTION AND SERVICE
Each of the Indenture, the Notes and the Guarantees is governed by, and
construed in accordance with, the laws of the State of New York. The Security
Documents executed by Statia are governed by and construed in accordance with
the laws of the Netherlands Antilles, and the Security Documents executed by
Statia Canada are governed by and construed in accordance with the laws of the
Province of Nova Scotia and the federal laws of Canada. The Issuers and the
Subsidiary Guarantors have expressly submitted to the nonexclusive jurisdiction
of New York State and the U.S. federal courts sitting in The City of New York
for the purposes of any suit, action or proceeding with respect to the
Indenture, the Notes and the Guarantees and for actions brought under federal or
state securities laws. The Issuers and the Subsidiary Guarantors will appoint CT
Corporation as their agent upon which process may be served in any such action
or proceeding with respect to the Indenture, the Notes or the Guarantees.
DELIVERY AND FORM OF SECURITIES
Book-Entry, Delivery and Form
The New Notes initially will be represented by a single, permanent global
certificate in definitive, fully registered form (the 'Global Note'). The Global
Note will be deposited on the date of the closing of the Exchange Offer (the
'Closing Date') with, or on behalf of, The Depositary Trust Company (the
'Depositary') and registered in the name of Cede & Co., as nominee of the
Depository (such nominee being referred to herein as the 'Global Note Holder').
The Depositary is a limited-purpose trust company that was created to hold
securities for its participating organizations (collectively, the 'Participants'
or the 'Depositary's Participants') and to facilitate the clearance and
settlement of transactions in such securities between Participants through
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electronic book-entry changes in accounts of its Participants. The Depositary's
Participants include securities brokers and dealers, banks and trust companies,
clearing corporations and certain other organizations. Access to the
Depositary's system is also available to other entities such as banks, brokers,
dealers and trust companies (collectively, the 'Indirect Participants' or the
'Depositary's Indirect Participants') that clear through or maintain a custodial
relationship with a Participant, either directly or indirectly. Persons who are
not Participants may beneficially own securities held by or on behalf of the
Depositary only through the Depositary's Participants or the Depositary's
Indirect Participants.
The Issuers expect that pursuant to procedures established by the
Depositary (i) upon deposit of the Global Note, the Depositary will credit the
accounts of Participants that have complied with the applicable provisions of
the Exchange Offer, with the respective principal amounts of the New Notes
represented by the Global Note corresponding to the principal amounts of the Old
Notes and (ii) ownership of beneficial interests in the Global Note will be
shown on, and the transfer of that ownership thereof will be effected only
through, records maintained by the Depositary (with respect to the interests of
the Depositary's Participants) or by the Depositary's Participants and the
Depositary's Indirect Participants (with respect to other owners of beneficial
interests in the Global Note).
The laws of some states require that certain persons take physical delivery
in definitive form of securities that they own. Consequently, the ability to
transfer beneficial interests in the Global Note will be limited to some extent.
So long as the Global Note Holder is the registered owner of any Notes, the
Global Note Holder will be considered the sole Holder of those Notes under the
Indenture. Except as provided below, owners of Notes will not be entitled to
have the Global Note registered in their names and will not be considered the
owners or Holders thereof under the Indenture for any purpose, including with
respect to the giving of any directions, instructions or approvals to the
Trustee thereunder. None of the Issuers, the Subsidiary Guarantors or the
Trustee will have any responsibility or liability for any aspect of the records
relating to or payments made on account of the Global Note by the Depositary, or
for maintaining, supervising or reviewing any records of the Depositary relating
to such Global Note.
Payments in respect of the principal of, premium, if any, and interest on
any Notes registered in the name of a Global Note Holder on the applicable
record date will be payable by the Trustee to or at the direction of such Global
Note Holder in its capacity as the registered Holder under the Indenture. Under
the terms of the Indenture, the Issuers and the Trustee may treat the persons in
whose names any Notes, including the Global Note, are registered as the owners
thereof for the purpose of receiving such payments and for any and all other
purposes whatsoever. Consequently, none of the Issuers or the Trustee has or
will have any responsibility or liability for the payment of such amounts to
beneficial owners of Notes (including principal, premium, if any, and interest).
The Issuers believe, however, that it is currently the policy of the Depositary
to immediately credit the accounts of the relevant Participants with such
payments, in amounts proportionate to their respective beneficial interests in
the relevant security as shown on the records of the Depositary. Payments by the
Depositary's Participants and the Depositary's Indirect Participants to the
beneficial owners of Notes will be governed by standing instructions and
customary practice and will be the responsibility of the Depositary's
Participants or the Depositary's Indirect Participants.
Subject to certain conditions, any person having a beneficial interest in
the Global Note may, upon request to the Trustee, exchange such beneficial
interest for New Notes in definitive form. Upon any such issuance, the Trustee
is required to register such New Notes in the name of, and cause the same to be
delivered to, such person or persons (or the nominee of any thereof). Such New
Notes would be issued in fully registered form. In addition, if (i) the Issuers
notify the Trustee in writing that the Depositary is no longer willing or able
to act as a depositary and the Issuers are unable to locate a qualified
successor within 90 days or (ii) the Issuers, at their option, notify the
Trustee in writing that they elect to cause the issuance of Notes in definitive
form under the Indenture, then, upon surrender by the relevant Global Note
Holder of its Global Notes, Notes in such form will be issued to each person
that such Global Notes Holder and the Depositary identifies as being the
beneficial owner of the related Notes. To the extent New Notes in
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definitive form are issued, such New Notes will be issued in denominations of
$1,000 and integral multiples thereof.
Neither the Issuers nor the Trustee will be liable for any delay by the
Global Note Holder or the Depositary in identifying the beneficial owners of
Notes and the Issuers and the Trustee may conclusively rely on, and will be
protected in relying on, instructions from the Global Note Holder or the
Depositary for all purposes.
The Indenture requires that payments in respect of the Notes represented by
the Global Note (including principal, premium, if any, interest, Additional
Amounts, Reimbursement Payments and Liquidated Damages) be made in same day
funds. Interests in the Global Note will trade in the Depositary's Same-Day
Funds Settlement System, and any permitted secondary market trading activity in
the Notes will, therefore, be required by the Depositary to be settled in
same-day funds. Transfers between Participants in DTC will be effected in
accordance with DTC's procedures, and will be settled in same-day funds.
DTC has advised the Issuers that it will take any action permitted to be
taken by a holder of Notes only at the direction of one or more Participants to
whose account with DTC interests in the Global Notes are credited and only in
respect of such portion of the aggregate principal amount of the Notes as to
which such Participant or Participants has or have given such direction.
However, if there is an Event of Default under the Notes, DTC reserves the right
to exchange the Global Note for Notes in certificated form, and to distribute
such Notes to its Participants.
The information in this section concerning DTC and its book-entry systems
has been obtained from sources that the Company believes to be reliable, but the
Issuers take no responsibility for the accuracy thereof.
Although DTC has agreed to the foregoing procedures to facilitate transfers
of interests in the Global Note among participants in DTC, it is under no
obligation to perform or to continue to perform such procedures, and such
procedures may be discontinued at any time. None of the Issuers or the Trustee
will have any responsibility for the performance by DTC or its respective
participants or indirect participants of their respective obligations under the
rules and procedures governing their operations.
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Old Notes Registration Rights; Liquidated Damages
Pursuant to the Registration Rights Agreement, the Issuers have agreed to
file with the Commission a registration statement (the 'Exchange Offer
Registration Statement') on the appropriate form under the Securities Act with
respect to an offer to exchange the Old Notes for the New Notes. The New Notes
will evidence the same debt as the Old Notes and will be issued under and
entitled to the same benefits under the Indenture as the Old Notes. Upon the
effectiveness of the Exchange Offer Registration Statement, the Issuers will
offer, pursuant to the Exchange Offer, to the Holders of Transfer Restricted
Securities who are able to make certain representations the opportunity to
exchange their Transfer Restricted Securities for New Notes. If (i) the Issuers
are not required to file the Exchange Offer Registration Statement because the
Exchange Offer is not permitted by applicable law or Commission policy, (ii) any
Holder of Transfer Restricted Securities notifies the Issuers that (a) it is
prohibited by law or Commission policy from participating in the Exchange Offer
or (b) it may not resell the New Notes acquired by it in the Exchange Offer to
the public without delivering a prospectus and the prospectus contained in the
Exchange Offer Registration Statement is not appropriate or available for such
resales or (c) it is a broker-dealer and holds Notes acquired directly from the
Issuers or an Affiliate of the Issuers, or (iii) the Issuers do not consummate
the Exchange Offer on or prior to six months following the Issue Date, the
Issuers will file with the Commission a Shelf Registration Statement to cover
resales of the Notes by the Holders thereof who satisfy certain conditions
relating to the provision of information in connection with the Shelf
Registration Statement. The Issuers will use their best efforts to cause the
applicable registration statement to be declared effective as promptly as
possible by the Commission. For purposes of the foregoing, 'Transfer Restricted
Securities' means each Note until the earliest to occur of (i) the date on which
such Note has been exchanged by a person other than a broker-dealer for a New
Note in the Exchange Offer, (ii) following the exchange by a broker-dealer in
the Exchange Offer of a Note for a New Note, the date on which such New Note is
sold to a purchaser who receives from such broker-dealer on or prior to the date
of such sale a copy of the prospectus contained in the Exchange Offer
Registration Statement, (iii) the date on which such Note has been effectively
registered under the Securities Act and disposed of in accordance with the Shelf
Registration Statement or (iii) the date on which such Note is distributed to
the public pursuant to Rule 144 under the Act. The Issuers will not be permitted
to consummate the Exchange Offer after six months following the Issue Date.
The Registration Rights Agreement provides that (i) the Issuers will file
an Exchange Offer Registration Statement with the Commission on or prior to 45
days after the Issue Date, (ii) the Issuers will use their best efforts to have
the Exchange Offer Registration Statement declared effective by the Commission
on or prior to 105 days after the Issue Date, (iii) unless the Exchange Offer
would not be permitted by a policy of the Commission, the Issuers will commence
the Exchange Offer and will use their best efforts to issue on or prior to 45
days after the date on which the Exchange Offer Registration Statement is
declared effective by the Commission (the 'Exchange Offer Effective Date') New
Notes in exchange for all Notes tendered prior thereto in the Exchange Offer and
(iv) if obligated to file the Shelf Registration Statement, the Issuers will
each use their best efforts to file the Shelf Registration Statement with the
Commission on or prior to 45 days after such obligation arises and to cause the
Shelf Registration Statement to be declared effective by the Commission on or
prior to 105 days after such obligation arises. If (a) the Issuers fail to file
within 45 days, or cause to become effective within 105 days, the Exchange Offer
Registration Statement or (b) the Issuers are obligated to file the Shelf
Registration Statement and such Shelf Registration Statement is not filed within
45 days, or declared effective within 105 days, of the date on which the Issuers
became so obligated or (c) the Issuers fail to consummate the Exchange Offer
within 45 days of the Exchange Offer Effective Date or (d) the Shelf
Registration Statement or the Exchange Offer Registration Statement is declared
effective but thereafter ceases to be effective or usable in connection with
resales of Transfer Restricted Securities during the periods specified in the
Registration Rights Agreement (each such event referred to in clauses (a)
through (d) above a 'Registration Default'), in the case of clause (b) only,
other than by reason of the failure of the Holders to make certain
representations to or provide information reasonably requested by the Issuers or
by reason of delays caused by the failure of any Holder to provide information
to the National Association of Securities Dealers, Inc. or
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to any other regulatory agency having jurisdiction over any of the Holders, then
the Issuers will pay liquidated damages ('Liquidated Damages') to each holder of
Transfer Restricted Securities, during the first 90-day period immediately
following the occurrence of such Registration Default in an amount equal to $.05
per week per $1,000 principal amount of Notes constituting Transfer Restricted
Securities held by such holder. The amount of the Liquidated Damages will
increase an additional $.05 per week per $1,000 principal amount constituting
Transfer Restricted Securities for each subsequent 90-day period until the
applicable Registration Default has been cured, up to a maximum amount of
Liquidated Damages of $.30 per week per $1,000 principal amount of Notes
constituting Transfer Restricted Securities. All accrued Liquidated Damages will
be paid by the Issuers on each Damages Payment Date (as defined in the
Registration Rights Agreement) to the Global Note holders by wire transfer of
immediately available funds or by federal funds check and to the holders of
certificated securities by mailing a check to such holders' registered
addresses. Following the cure of all Registration Defaults, the accrual of
Liquidated Damages will cease.
Holders of the Old Notes will be required to make certain representations
to the Issuers (as described in the Registration Rights Agreement) in order to
participate in the Exchange Offer and will be required to deliver information to
be used in connection with the Shelf Registration Statement within the time
periods set forth in the Registration Rights Agreement in order to have their
Old Notes included in the Shelf Registration Statement and benefit from the
provisions regarding Liquidated Damages set forth above.
CERTAIN DEFINITIONS
Set forth below is a summary of certain of the defined terms used in the
Indenture. Reference is made to the Indenture for the full definition of all
such terms.
'Accounts Receivable' shall have the meaning ascribed to the term
'Accounts' in the Access Intercreditor Agreements.
'Acquired Indebtedness' of any Person means (a) with respect to any other
Person that becomes a direct or indirect Subsidiary of the referent Person after
the date of the Indenture, Indebtedness of such Person and its Subsidiaries
existing at the time such Person becomes a Subsidiary of the referent Person
that was not incurred in connection with, or in contemplation of, such Person
becoming a Subsidiary of the referent Person and (b) with respect to the
referent Person or any of its Subsidiaries, any Indebtedness assumed by the
referent Person or any of its Subsidiaries in connection with the acquisition of
an asset from another Person that was not incurred by such other Person in
connection with, or in contemplation of, such acquisition.
'Additional Secured Indebtedness' means Indebtedness of the Issuers and
their Restricted Securities, the principal amount of which shall not exceed an
amount equal to the liquidation preference of Parent's then outstanding Series C
Preferred Stock, plus accrued and unpaid dividends, if any.
'Affiliate' of any Person means any Person (i) which directly or indirectly
controls or is controlled by, or is under direct or indirect common control
with, the referent Person, (ii) which beneficially owns or holds 10% or more of
any class of the Voting Stock of the referent Person or (iii) of which 10% or
more of the Voting Stock (or, in the case of a Person which is not a
corporation, 10% or more of the equity interest) is beneficially owned or held
by the referent Person. For purposes of this definition, control of a Person
shall mean the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise.
'Asset Sale' for any Person means the sale, transfer or other disposition
or series of sales, transfers or other dispositions (including without
limitation by merger or consolidation (other than a merger or consolidation
subject to the covenant described under 'Limitation on Mergers and Certain Other
Transactions'), and whether by operation of law or otherwise) of any of that
Person's assets (including without limitation the sale or other disposition of
Capital Stock of any Subsidiary of such Person, whether by such Person or by
such Subsidiary), whether owned on the date of the Indenture or subsequently
acquired, outside of the ordinary course of business, excluding, however, (i)
any sale, transfer or other
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disposition between Statia and any of its Wholly-Owned Restricted Subsidiaries,
provided that in the event any assets which constitute a portion of the
Collateral are so sold, transferred or disposed of, Statia or the appropriate
Wholly-Owned Restricted Subsidiary as the case may be, shall acquire such
Collateral subject to the Lien of the Indenture and the Security Documents and
shall take or cause to be taken all action necessary or appropriate to maintain,
preserve and protect the security interest in such Collateral granted by the
Security Documents, (ii) any sale, transfer or other disposition, or series of
sales, transfers or other dispositions, of assets not constituting Collateral
having a purchase price or transaction value, as the case may be, of $100,000 or
less, provided that no Default or Event of Default exists at the time of such
sale, (iii) any sale by Statia or any Wholly-Owned Restricted Subsidiary of its
Accounts Receivable, (iv) the destruction of all or any portion of the
Collateral or the taking of all or any portion of the Collateral by eminent
domain, and (v) any sale, transfer or other disposition of the ship called the
M/V Megan D. Gambarella, the assets comprising the Brownsville facility or the
Capital Stock of the entity owning the Brownsville facility (Statia Terminals
Southwest, Inc.).
'Attributable Indebtedness,' of any Person, when used with respect to any
Sale and Leaseback Transaction, means, as at the time of determination, property
subject to such Sale and Leaseback Transaction and the present value (discounted
at a rate equivalent to such Person's then-current weighted average cost of
funds for borrowed money as at the time of determination, compounded on a
semi-annual basis) of the total obligations of the lessee for rental payments
during the remaining term of the lease included in any such Sale and Leaseback
Transaction.
'Bankruptcy Law' means Title 11, U.S. Code, the Netherlands Antilles
Bankruptcy Decree (het Faillissementsbesluit), and the Bankruptcy and Insolvency
Act, Canada or any similar federal, provincial, state or foreign law for the
relief of debtors.
'Board Resolution' of any Person means a duly adopted resolution of the
Board of Directors of such Person.
'Capital Stock' of any Person means any and all shares, rights to purchase,
warrants or options (whether or not currently exercisable), participations or
other equivalents of or interests in (however designated) the equity (including
without limitation common stock, preferred stock and partnership interests) of
such Person.
'Capitalized Lease Obligations' of any Person means the obligations of such
Person to pay rent or other amounts under a lease that is required to be
capitalized for financial reporting purposes in accordance with GAAP, and the
amount of such obligation shall be the capitalized amount thereof determined in
accordance with GAAP.
'Cash' means U.S. dollars, Canadian dollars or Netherlands Antilles
Guilders.
'Castle Harlan Agreement' means the management agreement between Castle
Harlan, Inc. and Parent dated as of the Issue Date.
'Change of Control' means the occurrence of any of the following: (i) the
consummation of any transaction the result of which is (x) if such transaction
occurs prior to the first sale of Common Equity of Statia or Parent pursuant to
a registration statement under the Securities Act that results in at least 25%
of the then outstanding common equity of Statia or Parent having been sold to
the public, that the Principals and their Related Parties beneficially own less
than, directly or indirectly, 51% of the Common Equity of Statia or Parent, and
(y) if such transaction occurs thereafter, that any Person or group (as such
term is used in Section 13(d)(3) of the Exchange Act) (other than the Principals
and their Related Parties) owns, directly or indirectly, a majority of the
Common Equity of Statia or Parent, or (ii) the first date on which any Person or
group (as defined above) other than the Principals and their Related Parties
shall have elected, or caused to be elected, a sufficient number of its or their
nominees to the Board of Directors of Statia or Parent such that the nominees so
elected (regardless of when elected) shall collectively constitute a majority of
the Board of Directors of Statia or Parent or (iii) Statia or Parent
consolidates with, or merges with or into, another person or sells, assigns,
conveys, transfers, leases or otherwise disposes of all or substantially all of
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its assets to any Person, or any Person consolidates with, or merges with or
into, Statia or Parent, in any such event pursuant to a transaction in which the
outstanding Voting Stock of Statia or Parent, as the case may be, is converted
into or exchanged for cash, securities or other property, other than any such
transaction where the outstanding Voting Stock of Statia or Parent, as the case
may be, is converted into or exchanged for Voting Stock (other than Disqualified
Stock) of the surviving or transferee corporation and the beneficial owners of
the Voting Stock of Parent immediately prior to such transaction own, directly
or indirectly, not less than a majority of the Voting Stock of the surviving or
transferee corporation immediately after such transaction.
'Collateral' means, collectively, all of the property and assets that from
time to time are subject to the Lien of the Security Documents.
'Collateral Account' means the collateral account to be established
pursuant to the Indenture.
'Common Equity' of any Person means all Capital Stock of such Person that
is generally entitled to (i) vote in the election of directors or managing
directors of such Person or (ii) if such Person is not a corporation, vote or
otherwise participate in the selection of the governing body, partners, managers
or others that will control the management and policies of such Person.
'Consolidated Amortization Expense' of any Person for any period means the
amortization expense of such Person and its Restricted Subsidiaries for such
period (to the extent included in the computation of Consolidated Net Income of
such Person), determined on a consolidated basis in accordance with GAAP.
'Consolidated Depreciation Expense' of any Person for any period means the
depreciation expense of such Person and its Restricted Subsidiaries for such
period (to the extent included in the computation of Consolidated Net Income of
such Person), determined on a consolidated basis in accordance with GAAP.
'Consolidated Fixed Charge Coverage Ratio' of any Person means, with
respect to any determination date, the ratio of (i) EBITDA for such Person's
prior four full fiscal quarters for which financial results have been reported
immediately preceding the determination date, to (ii) the aggregate Fixed
Charges of such Person for such four fiscal quarters; provided, however, that if
any calculation of Statia's Consolidated Fixed Charge Coverage Ratio requires
the use of any quarter beginning prior to the date of the Indenture, such
calculation shall be made on a pro forma basis, giving effect to the issuance of
the Notes and the use of the net proceeds therefrom as if the same had occurred
at the beginning of the four-quarter period used to make such calculation; and
provided further, that if any such calculation requires the use of any quarter
prior to the date that any Asset Sale was consummated, or that any Indebtedness
was incurred, or that any acquisition was effected, by Statia or any of its
Restricted Subsidiaries, such calculation shall be made on a pro forma basis,
giving effect to each such Asset Sale, incurrence of Indebtedness or
acquisition, as the case may be, and the use of any proceeds therefrom, as if
the same had occurred at the beginning of the four-quarter period used to make
such calculation.
'Consolidated Income Tax Expense' means, for any Person for any period, the
provision for taxes based on income and profits of such Person and its
Restricted Subsidiaries to the extent such income or profits were included in
computing Consolidated Net Income of such Person for such period.
'Consolidated Interest Expense' means, without duplication, with respect to
any Person for any period, the sum of the interest expense on all Indebtedness
of such Person and its Restricted Subsidiaries for such period, determined on a
consolidated basis in accordance with GAAP and including, without limitation (i)
imputed interest on Capitalized Lease Obligations and Attributable Indebtedness,
(ii) commissions, discounts and other fees and charges owed with respect to
letters of credit securing financial obligations and bankers' acceptance
financing, (iii) the net costs associated with Hedging Obligations, (iv)
amortization of other financing fees and expenses, (v) the interest portion of
any deferred payment obligations, (vi) amortization of debt discount or premium,
if any, (vii) all other non-cash interest expense, (viii) capitalized interest,
(ix) all interest payable with respect to discontinued operations, and (x) all
interest on any Indebtedness of any other Person guaranteed by the referent
Person or any of its Restricted Subsidiaries.
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'Consolidated Net Income' of any Person for any period means the net income
(or loss) of such Person and its Restricted Subsidiaries for such period
determined on a consolidated basis in accordance with GAAP; provided that there
shall be excluded from such net income (to the extent otherwise included
therein), without duplication: (i) the net income (or loss) of any Person (other
than a Restricted Subsidiary of the referent Person) in which any Person other
than the referent Person has an ownership interest, except to the extent that
any such income has actually been received by the referent Person or any of its
Wholly-Owned Restricted Subsidiaries in the form of cash dividends during such
period; (ii) except to the extent includible in the consolidated net income of
the referent Person pursuant to the foregoing clause (i), the net income (or
loss) of any Person that accrued prior to the date that (a) such Person becomes
a Restricted Subsidiary of the referent Person or is merged into or consolidated
with the referent Person or any of its Restricted Subsidiaries or (b) the assets
of such Person are acquired by the referent Person or any of its Restricted
Subsidiaries; (iii) the net income of any Restricted Subsidiary of the referent
Person during such period to the extent that the declaration or payment of
dividends or similar distributions by such Restricted Subsidiary of that income
(a) is not permitted by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental regulation
applicable to that Restricted Subsidiary during such period or (b) would be
payable as Taxes as a result of such dividend or distribution; (iv) any gain
(but not loss), together with any related provisions for taxes on any such gain,
realized during such period by the referent Person or any of its Restricted
Subsidiaries upon (a) the acquisition of any securities, or the extinguishment
of any Indebtedness, of the referent Person or any of its Restricted
Subsidiaries or (b) any Asset Sale by the referent Person or any of its
Restricted Subsidiaries, (v) any extraordinary gain (but not extraordinary
loss), together with any related provision for Taxes on any such extraordinary
gain, realized by the referent Person or any of its Restricted Subsidiaries
during such period; and (vi) in the case of a successor to such Person by
consolidation, merger or transfer of its assets, any earnings of the successor
prior to such merger, consolidation or transfer of assets; and provided further,
that (y) any gain referred to in clauses (iv) and (v) above and which is
received in Cash by the referent Person or one of its Restricted Subsidiaries
during such period shall be included in the consolidated net income of the
referent Person for computations made pursuant to the covenant Limitations on
Restricted Payments, and (z) any extraordinary loss incurred by the referent
Person and its Restricted Subsidiaries as a result of the premium paid to
repurchase Notes in connection with a Collateral Asset Sale Offer during such
period shall be excluded from any computation of consolidated net income of such
referent Person to the extent of any extraordinary gain realized by the referent
Person and its Restricted Subsidiaries resulting from such Collateral Asset Sale
during such period.
'Consolidated Net Worth' means, with respect to any Person as of any date,
the sum of (i) the consolidated equity of the common shareholders of such Person
and its consolidated Restricted Subsidiaries as of such date plus (ii) the
respective amounts reported on such Person's balance sheet as of such date with
respect to any series of preferred stock (other than Disqualified Stock), less
all write-ups (other than write-ups resulting from foreign currency translations
and write-ups of tangible assets of a going concern business made within 12
months after the acquisition of such business) subsequent to the Issue Date in
the book value of any asset owned by such Person or a Restricted Subsidiary of
such Person.
'Consolidated Tangible Assets' of any Person as of any date means the total
assets of such Person and its Restricted Subsidiaries (excluding any assets that
would be classified as 'intangible assets' under GAAP) on a consolidated basis
at such date, determined in accordance with GAAP, less all write-ups subsequent
to the Issue Date in the book value of any asset owned by such Person or any of
its Restricted Subsidiaries.
'Currency Agreement' means any foreign exchange contract, currency swap
agreement or other similar agreement or arrangement designed to protect Statia
or any of its Restricted Subsidiaries against fluctuations in currency values.
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'Custodian' means any receiver, trustee, assignee, liquidator,
sequestrator, curator (in the case of bankruptcy in the Netherlands Antilles),
bewindvoerder (in the case of suspension of payments in the Netherlands
Antilles) or similar official under any Bankruptcy Law.
'Default' means any event, act or condition that is, or after notice or the
passage of time or both would be, an Event of Default.
'Disqualified Stock' means with respect to any Person any Capital Stock of
such Person or any of its Subsidiaries that, by its terms, by the terms of any
agreement related thereto or by the terms of any security into which it is
convertible, puttable or exchangeable, is, or upon the happening of any event or
the passage of time would be, required to be redeemed or repurchased by such
Person or any of its Subsidiaries, whether or not at the option of the holder
thereof, or matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, in whole or in part, on or prior to the final maturity
date of the Notes; provided, however, that any class of Capital Stock of such
Person that, by its terms, authorizes such Person to satisfy in full its
obligations with respect to the payment of dividends or upon maturity,
redemption (pursuant to a sinking fund or otherwise) or repurchase thereof or
otherwise by the delivery of Capital Stock that is not Disqualified Stock, and
that is not convertible, puttable or exchangeable for Disqualified Stock, shall
not be deemed to be Disqualified Stock so long as such Person satisfies its
obligations with respect thereto solely by the delivery of Capital Stock that is
not Disqualified Stock.
'EBITDA' means, with respect to any Person for any period, without
duplication, the sum of the amounts for such period of (i) Consolidated Net
Income, (ii) Consolidated Income Tax Expense, (iii) Consolidated Amortization
Expense (but only to the extent not included in Fixed Charges), (iv)
Consolidated Depreciation Expense, (v) Fixed Charges and (vi) all other non-cash
items reducing the Consolidated Net Income (excluding any such non-cash charge
that results in an accrual of a reserve for cash charges in any future period)
of such Person and its Restricted Subsidiaries, in each case determined on a
consolidated basis in accordance with GAAP (provided, however, that the amounts
set forth in clauses (ii) through (vi) shall be included only to the extent such
amounts reduce Consolidated Net Income), less the aggregate amount of all
non-cash items, determined on a consolidated basis, to the extent such items
increase Consolidated Net Income.
'Equity Offerings' means (i) an offering or sale of Capital Stock (other
than Disqualified Stock) of Statia pursuant to a registration statement filed
with the Commission in accordance with the Securities Act or pursuant to an
exemption from the registration requirements thereof or (ii) a contribution to
the capital of Statia by Parent of the net cash proceeds received by Parent from
a substantially concurrent offering or sale of Capital Stock of Parent (other
than to Statia or a Subsidiary of Statia) pursuant to a registration statement
filed with the Commission in accordance with the Securities Act or pursuant to
an exemption from the registration requirements thereof.
'Exchange Act' means the Securities Exchange Act of 1934, as amended.
'Fifth Anniversary' means the fifth anniversary of the later of (i) the
Issue Date and (ii) if an Exchange Offer is consummated within six months of the
Issue Date, the consummation of the Exchange Offer.
'Financial Instruments' means (i) securities issued or directly and fully
guaranteed or insured by the U.S. or the Canadian Government or any agency or
instrumentality thereof having maturities of not more than 12 months from the
date of acquisition and rated at least 'A' or the equivalent by either Moody's
Investors Service, Inc. or Standard & Poor's Corporation, (ii) certificates of
deposit and eurodollar time deposits with maturities of 12 months or less from
the date of acquisition, bankers' acceptances with maturities not exceeding 12
months and overnight bank deposits, in each case with any domestic commercial
bank having capital and surplus in excess of $250 million and a Keefe Bank Watch
Rating of B or better, (iii) repurchase obligations with a term of not more than
30 days for underlying securities of the types described in clauses (i) and (ii)
entered into with any financial institution meeting the qualifications specified
in clause (ii) above, (iv) commercial paper having the highest rating obtainable
from Moody's Investors Service, Inc. or Standard & Poor's Corporation and in
each case maturing within 12 months after the date of acquisition, (v)
securities with maturities of 12 months or less from the date of acquisition
backed by standby or direct pay letters of credit issued by any bank satisfying
the requirement of clause
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(ii) above, and (vi) any money-market fund sponsored by any registered broker
dealer or mutual fund distributor that invests solely in instruments of the type
set forth above.
'Fixed Charges' means, with respect to any Person for any period, the sum
of (a) the Consolidated Interest Expense of such Person and its Restricted
Subsidiaries for such period, and (b) the product of (i) all cash dividend
payments (and non-cash dividend payments in the case of a Person that is a
Restricted Subsidiary) on any series of preferred stock of such Person or a
Restricted Subsidiary of such Person, times (ii) a fraction, the numerator of
which is one and the denominator of which is one minus the then current combined
federal, state, local or equivalent foreign statutory tax rate of such Person,
expressed as a decimal, in each case, on a consolidated basis and in accordance
with GAAP.
'GAAP' means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession of the U.S., as in effect on the date of the Indenture.
'Hedging Obligations' of any Person means the obligations of such Person
pursuant to any interest rate swap agreement, interest rate collar agreement or
other similar agreement or arrangement relating to interest rates.
'Indebtedness' of any Person at any date means, without duplication: (i)
all liabilities, contingent or otherwise, of such Person for borrowed money
(whether or not the recourse of the lender is to the whole of the assets of such
Person or only to a portion thereof); (ii) all obligations of such Person
evidenced by bonds, debentures, notes or other similar instruments; (iii) all
obligations of such Person in respect of letters of credit or other similar
instruments (or reimbursement obligations with respect thereto); (iv) all
obligations of such Person with respect to any Currency Agreement, Oil and
Petroleum Hedging Contracts or Hedging Obligations; (v) all obligations of such
Person to pay the deferred and unpaid purchase price of property or services,
except trade payables and accrued expenses incurred by such Person in the
ordinary course of business in connection with obtaining goods, materials or
services, which payable is not overdue by more than 60 days according to the
original terms of sale unless such payable is being contested in good faith;
(vi) the maximum fixed repurchase price of all Disqualified Stock of such
Person; (vii) all Capitalized Lease Obligations of such Person; (viii) all
Indebtedness of others secured by a Lien on any asset of such Person, whether or
not such Indebtedness is assumed by such Person; (ix) all Indebtedness of others
guaranteed by such Person to the extent of such guarantee; and (x) all
Attributable Indebtedness. The amount of Indebtedness of any Person at any date
shall be the outstanding balance at such date of all unconditional obligations
as described above, the maximum liability of such Person for any such contingent
obligations at such date and, in the case of clause (viii), the lesser of (A)
the fair market value of any asset subject to a Lien securing the Indebtedness
of others on the date that the Lien attaches and (B) the amount of the
Indebtedness secured. For purposes of the preceding sentence, the 'maximum fixed
repurchase price' of any Disqualified Stock that does not have a fixed
repurchase price shall be calculated in accordance with the terms of such
Disqualified Stock as if such Disqualified Stock were purchased on any date on
which Indebtedness shall be required to be determined pursuant to the Indenture,
and if such price is based upon, or measured by, the fair market value of such
Disqualified Stock (or any equity security for which it may be exchanged or
converted), such fair market value shall be determined in good faith by the
Board of Directors of such Person, which determination shall be evidenced by a
Board Resolution.
'Independent Financial Advisor' means an accounting, appraisal or
investment banking firm of nationally recognized standing that is, in the
reasonable judgment of Statia's Board of Directors, qualified to perform the
task for which it has been engaged and disinterested and independent with
respect to Statia and its Affiliates.
'Inventory' shall have the meaning ascribed to such term in the Access
Intercreditor Agreements.
'Investments' of any Person means (i) all investments by such Person in any
other Person in the form of loans, advances or capital contributions (excluding
commission, travel and similar advances to officers and
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employees made in the ordinary course of business) or similar credit extensions
constituting Indebtedness of such Person, and any guarantee of Indebtedness of
any other Person, (ii) all purchases (or other acquisitions for consideration)
by such Person of Indebtedness, Capital Stock or other securities of any other
Person and (iii) all other items that would be classified as investments
(including without limitation purchases of assets outside the ordinary course of
business) on a balance sheet of such Person prepared in accordance with GAAP.
'Issue Date' means the date the Old Notes were initially issued.
'Lien' means, with respect to any asset or property, any mortgage, deed of
trust, debenture, fiduciary, transfer, fiduciary assignment, lien (statutory or
other), pledge, lease, easement, restriction, covenant, charge, security
interest or other encumbrance of any kind or nature in respect of such asset or
property, whether or not filed, recorded or otherwise perfected under applicable
law (including without limitation any conditional sale or other title retention
agreement, and any lease in the nature thereof, any option or other agreement to
sell, and any filing of, or agreement to give, any financing statement under the
Uniform Commercial Code (or equivalent statutes) of any jurisdiction).
'Liquidated Damages' has the meaning ascribed to such term under 'Delivery
and Form of Securities--Old Notes Registration Rights Agreement; Liquidated
Damages.'
'Management' means the Directors, Managing Directors, and executive
officers of the Issuers and their affiliates.
'Net Proceeds' with respect to any Asset Sale by any Person means the
proceeds in the form of Financial Instruments (including Cash which is
immediately exchanged into Financial Instruments) received by such Person from
such Asset Sale, including payments in respect of deferred payment obligations
when received in the form of Cash or Financial Instruments after (a) provision
for all income or other taxes measured by or resulting from such Asset Sale or
the transfer of the proceeds of such Asset Sale to such Person, (b) payment of
all reasonable out-of-pocket fees and expenses related to such Asset Sale
(including without limitation brokerage, legal, accounting and investment
banking fees and commissions) and (c) in the case of any Asset Sale that does
not involve any portion of the Collateral, repayment of Indebtedness that is
required by the terms thereof to be repaid in connection with such Asset Sale.
'New Bank Credit Facility' means the Loan and Security Agreement between
Statia Terminals N.V. and Congress Financial Corporation and the Loan Agreement
among Statia Canada, Point Tupper Marine Services Limited and Congress Financial
Corporation (Canada), as such agreements may be amended, supplemented, modified
or replaced from time to time.
'Non-Recourse Purchase Money Indebtedness' means Indebtedness of Statia or
any of its Restricted Subsidiaries incurred to finance the purchase of any
assets of Statia or any of its Restricted Subsidiaries within 90 days of such
purchase, as long as (a) the amount of Indebtedness thereunder does not exceed
100% of the purchase cost of such assets, (b) the purchase cost of such assets
is or should be included in 'additions to property, plant and equipment' in
accordance with GAAP, (c) such Indebtedness is non-recourse to Statia or any of
its Restricted Subsidiaries or any of their respective assets other than the
assets so purchased and (d) the purchase of such assets is not part of an
acquisition of any Person.
'Offers to Purchase' means one or more Collateral Asset Sale Offer,
Non-Collateral Asset Sale Offer and Proceeds Offer, as the case may be.
'Oil and Petroleum Hedging Contracts' of any Person means any oil or
petroleum products hedging agreement or other similar agreement or arrangement
designed to protect such Person or any of its Restricted Subsidiaries against
fluctuations in the market price of oil or petroleum products.
'Parent' means Statia Terminals Group N.V.
'Payment Restriction', with respect to a Restricted Subsidiary of any
Person, means any encumbrance, restriction or limitation, whether by operation
of the terms of its charter or by reason of any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation, on the ability of (i)
such Restricted Subsidiary to (a) pay dividends or make other distributions on
its Capital Stock or make
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payments on any obligation, liability or Indebtedness owed to such Person or any
other Restricted Subsidiary of such Person, (b) make loans or advances to such
Person or any other Restricted Subsidiary or such Person or (c) transfer any of
its properties or assets to such Person or any other Restricted Subsidiary of
such Person or (ii) such Person or any other Restricted Subsidiary of such
Person to receive or retain any such dividends, distributions or payments, loans
or advances or transfer or properties or assets.
'Permitted Equipment' means machinery (other than tanks, pipelines, docks
and the single point mooring buoy), furniture, apparatus, tools, implements or
other similar property of Statia and its Restricted Subsidiaries.
'Permitted Investments' means (i) Financial Instruments; (ii) certificates
of deposits or Eurodollar deposits due within one year with a commercial bank
having capital funds of at least $500 million or more; (iii) debt of any state
or political subdivision that is rated A or better; and (iv) mutual funds that
invest solely in Permitted Investments described in clauses (i) through (iii)
above.
'Permitted Liens' means: (i) Liens for taxes, assessments or governmental
charges or claims that either (a) are not yet delinquent or (b) are being
contested in good faith by appropriate proceedings and as to which appropriate
reserves or other provisions have been made in accordance with GAAP; (ii)
statutory Liens of landlords and carriers, warehousemens, mechanics, suppliers,
materialmen, repairmen or other Liens imposed by law arising in the ordinary
course of business and with respect to amounts that either (a) are not yet
delinquent or (b) are being contested in good faith by appropriate proceedings
and as to which appropriate reserves or other provisions have been made in
accordance with GAAP; (iii) Liens incurred or deposits made in the ordinary
course of business in connection with workers' compensation, unemployment
insurance and other types of social security; (iv) Liens incurred or deposits
made to secure the performance of tenders, bids, leases, statutory obligations,
surety and appeal bonds, progress payments, government contracts and other
obligations of like nature (exclusive of obligations for the payment of borrowed
money), in each case, incurred in the ordinary course of business; (v)
attachment or judgment Liens not giving rise to a Default or an Event of Default
and Liens created by deposits of Cash or Financial Instruments to permit Statia
to appeal court judgments that are being contested in good faith by appropriate
proceedings and do not give rise to a Default or an Event of Default; (vi)
easements, rights-of-way, restrictions and other similar charges or encumbrances
in respect of real property not interfering with the ordinary conduct of the
business of Statia or any of its Subsidiaries and not materially affecting the
value of the property subject thereto; (vii) leases or subleases granted to
others not interfering with the ordinary conduct of the business of Statia or
any of its Subsidiaries and not materially affecting the value of the property
subject thereto; (viii) Liens on Accounts Receivable, Inventory and vessels
(other than the M/V Megan D. Gambarella) owned by Statia or its Restricted
Subsidiaries securing outstanding Indebtedness referred to in clause (i) under
the covenant described under 'Limitations on Additional Indebtedness'; (ix)
Liens securing Acquired Indebtedness, provided that such Liens (x) are not
incurred in connection with, or in contemplation of, the acquisition of the
property or assets acquired and (y) do not extend to or cover any property or
assets of Statia or any of its Restricted Subsidiaries other than the property
or assets so acquired; (x) Liens securing Refinancing Indebtedness to the extent
incurred to repay, refinance or refund Indebtedness that is secured by Liens and
outstanding as of the date hereof, provided that such Refinancing Indebtedness
shall be secured solely by the assets securing the outstanding Indebtedness
being repaid, refinanced or refunded; (xi) Liens on the Collateral securing
Additional Secured Indebtedness incurred in accordance with the provisions of
this Indenture, provided that (y) such liens are pari passu with, and in no
event senior to, the liens on the Collateral created under the Security
Documents and (z) the representatives of such Additional Secured Indebtedness
shall have entered into an additional lender intercreditor agreement; (xii)
Liens under the Security Documents and the Indenture; (xiii) Liens that secure
Sale and Leaseback Transactions that are permitted under the covenants described
under 'Limitations on Additional Indebtedness' and 'Limitations on Sale and
Leaseback Transactions' and relate only to real property that does not
constitute a portion of the Collateral and is not used in connection with any
manufacturing activity; (xiv) Liens securing Indebtedness between Statia and its
Wholly Owned Restricted Subsidiaries or among such Wholly Owned Restricted
Subsidiaries; and (xv) Liens existing on the date of the Indenture to the extent
and in the manner such Liens are in effect on the Issue Date.
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'Permitted Related Acquisition' means the acquisition by Statia or its
Restricted Subsidiaries of any assets used or useful in the business conducted
by Statia or its Restricted Subsidiaries as such business is conducted on the
Issue Date.
'Person' means any individual, corporation, partnership, joint venture,
incorporated or unincorporated association, joint-stock company, trust,
unincorporated organization or government or other agency or political
subdivision thereof or other entity of any kind.
'Plan of Liquidation', with respect to any Person, means a plan that
provides for, contemplates or the effectuation of which is preceded or
accompanied by (whether or not substantially contemporaneously, in phases or
otherwise): (i) the sale, lease, conveyance or other disposition of all or
substantially all of the assets of such Person otherwise than as an entirety or
substantially as an entirety; and (ii) the distribution of all or substantially
all of the proceeds of such sale, lease, conveyance or other disposition and all
or substantially all of the remaining assets of such Person to Holders of
Capital Stock of such Person.
'Principals' means Castle Harlan, Inc., members of Management and their
respective Affiliates.
'Refinancing Indebtedness' means Indebtedness of Statia or a Subsidiary of
Statia issued in exchange for, or the proceeds from the issuance and sale or
disbursement of which are used substantially concurrently to repay, redeem,
refund, refinance, discharge or otherwise retire for value, in whole or in part
(collectively, 'repay'), or constituting an amendment, modification or
supplement to or a deferral or renewal of (collectively, an 'amendment'), any
Indebtedness of Statia or any of its Subsidiaries existing immediately after the
original issuance of the Notes or incurred pursuant to the provisions of the
covenant described under 'Limitations on Additional Indebtedness' in a principal
amount not in excess of the principal amount of the Indebtedness so repaid or
amended; provided that: (i) the Refinancing Indebtedness is the obligation of
the same Person, and is subordinated to the Notes, if at all, to the same
extent, as the Indebtedness being repaid or amended; (ii) the Refinancing
Indebtedness is scheduled to mature either (a) no earlier than the Indebtedness
being repaid or amended or (b) after the maturity date of the Notes; (iii) the
portion, if any, of the Refinancing Indebtedness that is scheduled to mature on
or prior to the maturity date of the Notes has a Weighted Average Life to
Maturity at the time such Refinancing Indebtedness is incurred that is equal to
or greater than the Weighted Average Life to Maturity of the portion of the
Indebtedness being repaid that is scheduled to mature on or prior to the
maturity date of the Notes; and (iv) the Refinancing Indebtedness is secured
only to the extent, if at all, and by the assets, that the Indebtedness being
repaid or amended is secured.
'Related Business Investment' means any Investment directly by Statia or
its Restricted Subsidiaries in any business that is closely related to or
complements the business of Statia or its Restricted Subsidiaries as such
business exists on the Issue Date.
'Related Party' with respect to any Principal means (i) any controlling
stockholder, 80% (or more) owned Subsidiary, or spouse or immediate family
member (in the case of an individual) of such Principal or (ii) any trust,
corporation, partnership or other entity, the beneficiaries, shareholders,
partners, owners or Persons beneficially holding an 80% or more controlling
interest of which consist of such Principal and/or such other Persons referred
to in the immediately preceding clause (i).
'Restricted Debt Payment' means any purchase, redemption, defeasance
(including without limitation in substance or legal defeasance) or other
acquisition or retirement for value, directly or indirectly, by Statia or a
Subsidiary of Statia, prior to the scheduled maturity or prior to any scheduled
repayment of principal or sinking fund payment, as the case may be, in respect
of Indebtedness of Statia that is subordinate in right of payment to the Notes.
'Restricted Investment', with respect to any Person, means any Investment
by such Person (other than a Permitted Investment) in any of its Unrestricted
Subsidiaries or in any Person that is not a Restricted Subsidiary.
'Restricted Payment' means with respect to any Person: (i) the declaration
of any dividend (other than a dividend declared by a Wholly Owned Restricted
Subsidiary to holders of its Common Equity) or the making of any other payment
or distribution of Cash, securities or other property or assets in respect of
such
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Person's Capital Stock (except that a dividend payable solely in Capital Stock
(other than Disqualified Stock) of such Person shall not constitute a Restricted
Payment); (ii) any payment on account of the purchase, redemption, retirement or
other acquisition for value of such Person's Capital Stock or any other payment
or distribution made in respect thereof, either directly or indirectly (other
than a payment solely in Capital Stock that is not Disqualified Stock); (iii)
any Restricted Investment; or (iv) any Restricted Debt Payment.
'Restricted Subsidiary' of any Person means each of the Subsidiaries of
such Person which, as of the determination date, is not an Unrestricted
Subsidiary of such Person.
'Sale and Leaseback Transaction' means with respect to any Person an
arrangement with any bank, insurance company or other lender or investor or to
which such lender or investor is a party, providing for the leasing by such
Person or any of its Subsidiaries of any property or asset of such Person or any
of its Subsidiaries which has been or is being sold or transferred by such
Person or such Subsidiary to such lender or investor or to any Person to whom
funds have been or are to be advanced by such lender or investor on the security
of such property or asset.
'Security Documents' means, collectively, the Security Agreements, the
Mortgages, the Access Intercreditor Agreements, and all security agreements,
fiduciary transfers, debentures, fiduciary assignments, pledges, debentures,
mortgages, deeds of trust, collateral assignments or other instruments
evidencing or creating any security interest in favor of the Trustee in all or
any portion of the Collateral, in each case as amended, amended and restated,
supplemented or otherwise modified from time to time.
'Significant Guarantor' means any single Subsidiary Guarantor or group of
Subsidiary Guarantors that as of the date of the most recently ended month for
which an internal balance sheet is available would have constituted a
Significant Subsidiary of Statia.
'Significant Subsidiary' means any Subsidiary that would be a 'significant
subsidiary' as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated
pursuant to the Securities Act, as such Regulation is in effect on the Issue
Date, except all references to '10 percent' in such definition shall be changed
to '2 percent'.
'Subordinated Management Notes' means any Indebtedness of Statia issued to
repurchase Capital Stock of Statia held by members of management of Statia or
any of its Restricted Subsidiaries the terms of which provide that (i) no Cash
payments (principal, interest or otherwise) will be due and payable until
November 15, 2004 and (ii) such Indebtedness is subordinated in full in right of
payment to the prior payment in full in cash of the Notes and any Indebtedness
issued in exchange for or to refinance all or a portion of the Notes.
'Subsidiary' of any Person means (i) any corporation of which at least a
majority of the aggregate voting power of all classes of the Common Equity is
owned by such Person directly or through one or more other Subsidiaries of such
Person and (ii) any entity other than a corporation in which such Person,
directly or indirectly, owns at least a majority of the Common Equity of such
entity.
'Subsidiary Guarantors' means each of the parties named as such in the
Indenture and any other Subsidiary of the Issuers or a Subsidiary thereof that
executes a Subsidiary Guarantee in accordance with the provisions of the
Indenture, and their respective successors and assigns.
'Taxes' means any tax, duty, levy, impost, assessment or other governmental
charge (including penalties, interest and any other similar liabilities related
thereto) levied, imposed or assessed by or on behalf of any Taxing Authority.
'Taxing Authority' means either (i) the Government of the Netherlands
Antilles or any authority or agency therein or thereof having power to tax or
(ii) the Government of Canada, any province thereof or any other government or
any political subdivision or territory or possession of the Government of Canada
or any province thereof or any authority or agency therein or thereof having
power to tax.
'Unrestricted Subsidiary' means each of the Subsidiaries of Statia so
designated by a resolution adopted by the Board of Directors of Statia and whose
creditors have no direct or indirect recourse (including without limitation
recourse with respect to the payment of principal of or interest on Indebtedness
of such Subsidiary) to Statia or a Restricted Subsidiary; provided, however,
that the Board of Directors of Statia will be prohibited from designating as an
Unrestricted Subsidiary any Subsidiary of Statia existing on the date
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of the Indenture. The Board of Directors of Statia may designate an Unrestricted
Subsidiary to be a Restricted Subsidiary, provided that (i) any such
redesignation shall be deemed to be an incurrence by Statia and its Restricted
Subsidiaries of the Indebtedness (if any) of such redesignated Subsidiary for
purposes of the 'Limitations on Additional Indebtedness' covenant in the
Indenture as of the date of such redesignation and (ii) immediately after giving
effect to such redesignation and the incurrence of any such additional
Indebtedness, Statia and its Restricted Subsidiaries could incur $1.00 of
additional Indebtedness pursuant to the Consolidated Fixed Charge Coverage Ratio
set forth in the 'Limitations on Additional Indebtedness' covenant described
above. Any such designation or redesignation by the Board of Directors shall be
evidenced to the Trustee by the filing with the Trustee of a certified copy of
the Resolution of Statia's Board of Directors giving effect to such designation
or redesignation and an Officer's Certificate certifying that such designation
or redesignation complied with the foregoing conditions and setting forth the
underlying calculations of such certificate.
'Voting Stock', with respect to any Person, means securities of any class
of Capital Stock of such Person entitling the holders thereof (whether at all
times or only so long as no senior class of stock has voting power by reason of
any contingency) to vote in the election of members of the board of directors of
such Person.
'Weighted Average Life to Maturity', when applied to any Indebtedness at
any date, means the number of years obtained by dividing (i) the sum of the
products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payment of
principal, including payment at final maturity, in respect thereof, by (b) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment by (ii) the then outstanding principal
amount of such Indebtedness.
'Wholly-Owned Restricted Subsidiary' of Statia means a Restricted
Subsidiary of Statia, of which 100% of the Common Equity (except for directors'
qualifying shares or certain minority interests owned by other Persons solely
due to local law requirements that there be more than one stockholder, but which
interest is not in excess of what is required for such purpose) is owned
directly by Statia or through one or more Wholly-Owned Restricted Subsidiaries
of Statia.
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TAXATION
The following summaries contain a description of the principal Netherlands
Antilles and Canadian tax consequences and the principal U.S. federal income tax
consequences to a holder from the purchase, ownership and disposition of Notes.
NETHERLANDS ANTILLES TAXATION
The following discussion of Netherlands Antilles tax laws is based on
advice of Coopers & Lybrand (Netherlands Antilles), special Netherlands Antilles
tax counsel to the Company and is based on Antilles tax laws and practice
currently applicable.
Based on a ruling which has been approved on September 3, 1996 by the
Antilles tax authorities, ruling number SV/62.9460.0/B962791 tax counsel in the
Netherlands Antilles is of the opinion that a Holder of New Notes will not be
subject to Netherlands Antilles income tax with respect to the exchange of the
Old Notes for the New Notes pursuant to the Exchange Offer, with respect to any
interest received on the New Notes or with respect to any gains realized upon
the sale or redemption of the New Notes provided that: (i) the Holder of New
Notes is not a resident or deemed a resident of the Netherlands Antilles; (ii)
the Holder of New Notes does not have an enterprise which in its entirety or in
part is carried on: (a) in the case of an individual Holder of New Notes, by
such Holder of New Notes personally or through a permanent representative or
agent in the Netherlands Antilles, or (b) in the case of an entity, through a
permanent establishment, permanent representative or agent in the Netherlands
Antilles; and to which enterprise or to which part of an enterprise the New
Notes are attributable.
No withholding on account of any Netherlands Antilles taxes is required by
the Issuers with respect to interest payments made to a Holder of New Notes or
under the Guarantees or with respect to any gains realized upon the sale or
redemption of the New Notes.
Holders of Notes who are not residents of the Netherlands Antilles are not
subject to any Netherlands Antilles gift, estate or inheritance taxes solely by
reason of being Holders of Notes.
The aforementioned ruling is based on current Antilles tax laws. Subject to
possible alterations of tax laws, the ruling will be valid from the date of
issuance of the New Notes through redemption of the New Notes. Coopers and
Lybrand knows of no proposal to alter Antilles tax laws in any relevant respect.
CANADIAN FEDERAL TAX CONSEQUENCES
In the opinion of Arthur Andersen & Co., the following summary is based on
the advice of Arthur Andersen & Co. and describes the material Canadian federal
income tax consequences to a holder of the Notes or New Notes who is a
non-resident of Canada. This summary is based on the current provisions of the
Income Tax Act (Canada) (the 'Act') and the regulations thereunder, Arthur
Andersen & Co.'s understanding of the current administrative practices of
Revenue Canada, and all specific proposals to amend the Act and the regulations
announced by the Canadian Minister of Finance prior to the date hereof. This
summary does not otherwise take into account or anticipate changes in the law,
whether by judicial, governmental or legislative decision or action, nor does it
take into account tax legislation or consideration of any province or territory
of Canada or any jurisdiction other than Canada. This summary is general in
nature and is not exhaustive of all possible Canadian income tax considerations.
Accordingly, prospective purchasers should consult their own tax advisers for
advice with respect to their particular circumstances.
The payment by the Issuers of interest, principal or premium on the Old
Notes to a Holder who is a non-resident of Canada and with whom the Company
deals at arm's length within the meaning of the Act at the time of making the
payment should be exempt from Canadian withholding tax. The payment by the
Issuers of interest, principal or premium on the New Notes to a Holder who is a
non-resident of Canada and with whom the Company deals at arm's length within
the meaning of the Act at the time of making the payment will be exempt from
Canadian withholding tax. For the purposes of the Act, related persons (as
therein defined) are deemed not to deal at arm's length and it is a question of
fact whether persons not related to each other deal at arm's length.
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The exchange of the Old Notes for New Notes pursuant to the Exchange Offer
should not be regarded as a disposition of Old Notes for Canadian tax purposes,
based upon our understanding that the New Notes are intended to represent the
same indebtedness as the Old Notes. Even if the Canadian tax authorities were to
view the Old Notes as being disposed of, such disposition will not be taxable to
Holders who are not resident in Canada, other than certain non-resident insurers
carrying on business in Canada and elsewhere. Accrued but unpaid interest on Old
Notes at the time of the consummation of the Exchange Offer should not be
subject to taxation in Canada for those Holders who are not resident in Canada
and who are not related to the Issuers, other than certain non-resident insurers
who carry on business in Canada and elsewhere.
No other tax on income (including taxable capital gains) will be payable
under the Act in respect of the holding, redemption or disposition of the Old
Notes or New Notes, the exchange of Old Notes for New Notes pursuant to the
Exchange Offer or the receipt of interest or premium thereon by Holders who are
neither residents nor deemed to be residents of Canada for the purposes of the
Act and who do not use or hold and are not deemed to use or hold the Notes or
New Notes in carrying on business in Canada for the purposes of the Act, except
that in certain circumstances Holders who are non-resident insurers carrying on
an insurance business in Canada and elsewhere may be subject to such taxes.
U.S. FEDERAL INCOME TAXATION
In the opinion of White & Case, the following summary describes the
principal U.S. federal income tax consequences of the issuance of the New Notes
and the Exchange Offer. This summary applies only to Notes held as capital
assets and does not address aspects of U.S. federal income taxation that may be
applicable to Holders that are subject to special tax rules, such as insurance
companies, tax-exempt organizations, banks or dealers in securities or
currencies or to Holders that will hold a Note as part of a position in a
'straddle' or as part of a 'hedging' or 'conversion' transaction for U.S.
federal income tax purposes or that have a 'functional currency' other than the
U.S. dollar. In addition, this summary assumes that a Holder will not elect to
treat a Note and a hedge or combination of hedges with respect thereto as an
integrated transaction for U.S. federal income tax purposes. Moreover, this
summary does not address the U.S. federal income tax treatment of Holders that
do not acquire New Notes pursuant to the Exchange Offer. Each prospective
purchaser should consult its tax advisor with respect to the U.S. federal,
state, local and foreign tax consequences of acquiring, holding and disposing of
Notes.
This summary is based on the tax laws of the U.S. as in effect on the date
of this Prospectus and on U.S. Treasury Regulations in effect (or, in certain
cases, proposed) as of the date of this Prospectus, as well as judicial and
administrative interpretations thereof available on or before such date. All of
the foregoing are subject to change, which change could apply retroactively and
could affect the tax consequences described below.
For purposes of this summary, a 'U.S. Holder' is a Holder of Notes who is a
citizen or resident of the U.S., a corporation or partnership organized in or
under the laws of the U.S. or any political subdivision thereof or therein, or
an estate or trust the income of which is subject to U.S. federal income
taxation regardless of its source and a 'Non-U.S. Holder' is a Holder of Notes
other than a U.S. Holder. For taxable years beginning after December 31, 1996, a
trust will be a U.S. Holder if (i) a U.S. court can exercise primary supervision
over the administration of such trust and (ii) one or more U.S. fiduciaries has
the authority to control all of the substantial decisions of such trust.
Exchange Offer
The exchange of Old Notes for New Notes pursuant to the Exchange Offer
should not be treated as an 'exchange' for U.S. federal income tax purposes
because the New Notes should not be considered to differ materially in kind or
extent from the Old Notes. New Notes received by a holder of Old Notes should be
treated as a continuation of the Old Notes in the hands of such holder.
Accordingly, there should not be any U.S. federal income tax consequences to
holders exchanging Old Notes for New Notes pursuant to the Exchange Offer. A
holder's holding period of New Notes should include the holding period of the
Old Notes exchanged therefor.
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Stated Interest
Stated interest paid on a New Note or under a Guarantee that is treated as
'qualified stated interest' for U.S. federal income tax purposes will be
includible in a U.S. Holder's gross income as ordinary interest income in
accordance with such U.S. Holder's usual method of tax accounting. Stated
interest paid on a New Note or under a Guarantee should be treated as 'qualified
stated interest' for U.S. federal income tax purposes. But See 'Potential
Contingent Payments' for a discussion of the treatment of Liquidated Damages,
Additional Amounts and Reimbursement Payments. Such stated interest on the New
Notes will be treated as foreign source income for U.S. federal income tax
purposes. For U.S. foreign tax credit limitation purposes, interest on the New
Notes generally will constitute 'passive income,' or in the case of certain U.S.
Holders, 'financial services income.'
Payments of stated interest on a New Note or under a Guarantee to a
Non-U.S. Holder generally will not be subject to U.S. federal income tax unless
such income is effectively connected with the conduct by such Non-U.S. Holder of
a trade or business in the U.S.
Potential Contingent Payments
U.S. Holders of New Notes should note that it is possible that the Internal
Revenue Service (the 'Service') could assert that the (i) Liquidated Damages
which the Issuers would have been obligated to pay if the Exchange Offer
registration statement had not been filed or is not declared effective within
the time periods set forth herein (or certain other actions are not taken) (as
described above under 'Description of the Notes--Old Notes Registration Rights;
Liquidated Damages') or (ii) Additional Amounts or Reimbursement Payments owed
by the Issuers in the event of the imposition of Canadian withholding taxes or
Netherlands Antilles taxes are 'contingent payments' for U.S. federal income tax
purposes. If so treated, the New Notes would be treated as contingent payment
debt instruments and none of the interest under the New Notes would be
considered qualified stated interest. In addition, a U.S. Holder of a New Note
would be required to accrue interest income over the term of such New Note under
the 'noncontingent bond method' set forth in the U.S. Treasury Regulations
issued by the Service regarding debt instruments that provide for one or more
contingent payments (the 'Contingent Debt Regulations') and, generally, any gain
recognized by a U.S. Holder on the sale, exchange or retirement of a New Note
could be treated as interest income. However, the Contingent Debt Regulations
provide that, for purposes of determining whether a debt instrument is a
contingent payment debt instrument, remote or incidental contingencies are
ignored. On the Issue Date, the Issuers believed, and they continue to believe,
that the possibility of the payment of Liquidated Damages, Additional Amounts
and Reimbursement Payments was remote. Accordingly, the Issuers did not treat
the Old Notes as contingent payment debt instruments and treated stated interest
on an Old Note or under a Guarantee as qualified stated interest for U.S.
federal income tax purposes. If Liquidated Damages, Additional Amounts or
Reimbursement Payments are, in fact, paid on a New Note or under a Guarantee,
solely for purposes of the rules regarding 'original issue discount' ('OID') for
U.S. federal income tax purposes, such New Note will be treated as retired and
then re-issued on the date of any such payment for an amount equal to the
'adjusted issue price' of such New Note on such date.
Effect of Optional Redemption and Event of Default Upon a Change of Control
An Event of Default will occur if a Change of Control occurs and the
Issuers do not cure such event by making an offer to purchase all outstanding
New Notes held by it at a purchase price equal to 101% of the principal amount
of the New Notes, plus accrued and unpaid interest to the date of purchase. In
addition, the New Notes are redeemable in whole or in part at the option of the
Issuers at any time on or after November 15, 2000 at the redemption prices set
forth above. In addition, at any time on or prior to November 15, 1999, the
Issuers may redeem up to 35% aggregate principal amount of the New Notes,
provided that after giving effect to such redemption at least $88 million
aggregate principal amount remains outstanding, with the proceeds of an Equity
Offering of the Issuers.
Under the U.S. Treasury Regulations regarding debt instruments issued with
OID, the yield to maturity of a debt instrument will be based upon the
instrument's stated payment schedule if such schedule is significantly more
likely than not to occur. In addition, such Treasury Regulations contain
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special rules for determining the maturity date and the 'stated redemption price
at maturity' of a debt instrument where the issuer of such debt instrument has
an unconditional option to make payments under such debt instrument under an
alternative payment schedule. Under such rules, it is assumed that the issuer of
such debt instrument will exercise an option to redeem a debt instrument if such
exercise will lower the yield to maturity of such debt instrument. Since
payments pursuant to the stated payment schedule of the New Notes are
significantly more likely than not to occur and the Issuers do not have an
option to redeem the New Notes which would lower the yield to maturity of the
New Notes, the Issuers will disregard the optional redemption provisions of the
New Notes in determining that the New Notes will not be issued with OID.
Sale, Exchange or Retirement
Upon the sale, exchange or retirement of a Note (other than pursuant to the
Exchange Offer (as discussed above under 'The Exchange Offer')), a U.S. Holder
will recognize taxable gain or loss equal to the difference, if any, between the
amount realized on the sale, exchange or retirement (except to the extent
attributable to accrued but unpaid interest that has not been included in
income) and the U.S. Holder's adjusted tax basis in such Note. A U.S. Holder's
adjusted tax basis in a New Note generally will equal the cost of such New Note
to the U.S. Holder decreased by the amount of any payment with respect to the
New Note other than qualified stated interest payments. Subject to the rules
discussed above under 'Potential Contingent Payments,' such gain or loss
generally will be capital gain or loss, and will be long-term capital gain or
loss if the New Note has been held for more than one year at the time of such
sale, exchange or retirement. Any gain realized on a sale, exchange or
retirement of a New Note by a U.S. Holder generally will be treated as U.S.
source income.
Any gain realized by a Non-U.S. Holder upon the sale, exchange or
retirement of a Note (other than pursuant to the Exchange Offer (as discussed
above under 'The Exchange Offer')) generally will not be subject to U.S. federal
income tax, unless (i) such gain is effectively connected with the conduct by
such Non-U.S. Holder of a trade or business in the U.S. or (ii) in the case or
any gain realized by an individual Non-U.S. Holder, such holder is present in
the U.S. for 183 days or more in the taxable year of such sale, exchange or
retirement and certain other conditions are met.
U.S. Backup Withholding Tax and Information Reporting
A 31% backup withholding tax and information reporting requirements apply
to certain payments of principal of, and interest on, an obligation and to
proceeds of the sale or redemption of an obligation, to certain noncorporate
U.S. Holders. The payor will be required to withhold 31% of any such payment
within the U.S. on a New Note to a U.S. Holder (other than an 'exempt
recipient,' such as a corporation) if such U.S. Holder fails to furnish its
correct taxpayer identification number or otherwise fails to comply with, or
establish an exemption from, such backup withholding requirements. Payments of
principal and interest to a Non-U.S. Holder will not be subject to backup
withholding tax and information reporting requirements if an appropriate
certification is provided by the holder to the payor and the payor does not have
actual knowledge that the certificate is false.
These backup withholding tax and information reporting rules currently are
under review by the U.S. Treasury Department and proposed U.S. Treasury
Regulations issued on April 15, 1996 would modify certain of such rules
generally with respect to payments made after December 31, 1997. Accordingly,
the application of such rules to the New Notes could be changed.
THE ABOVE SUMMARIES ARE NOT INTENDED TO CONSTITUTE A COMPLETE ANALYSIS OF
ALL TAX CONSEQUENCES RELATING TO THE OWNERSHIP OF NOTES. PROSPECTIVE PURCHASERS
OF NOTES SHOULD CONSULT THEIR OWN TAX ADVISORS CONCERNING THE TAX CONSEQUENCES
OF THEIR PARTICULAR SITUATIONS.
103
<PAGE>
PLAN OF DISTRIBUTION
Based on interpretations by the Staff set forth in no-action letters issued
to third parties, the Company believes that New Notes issued pursuant to the
Exchange Offer in exchange for the Old Notes may be offered for resale, resold
and otherwise transferred by holders thereof (other than any holder which is (i)
an 'affiliate' of the Company within the meaning of Rule 405 under the
Securities Act, (ii) a broker-dealer who acquired Notes directly from the
Company or (iii) broker-dealers who acquired Notes as a result of market-making
or other trading activities) without compliance with the registration and
prospectus delivery provisions of the Securities Act provided that such New
Notes are acquired in the ordinary course of such holders' business, and such
holders are not engaged in, and do not intend to engage in, and have no
arrangement or understanding with any person to participate in, a distribution
of such New Notes; provided that broker-dealers ('Participating Broker-Dealers')
receiving New Notes in the Exchange Offer will be subject to a prospectus
delivery requirement with respect to resales of such new Notes. To date, the
Staff has taken the position that Participating Broker-Dealers may fulfill their
prospectus delivery requirements with respect to transactions involving an
exchange of securities such as the exchange pursuant to the Exchange Offer
(other than a resale of an unsold allotment from the sale of the Old Notes to
the Initial Purchaser) with the Prospectus, contained in the Exchange Offer
Registration Statement. Pursuant to the Registration Rights Agreement, the
Company has agreed to permit Participating Broker-Dealers and other persons, if
any, subject to similar prospectus delivery requirements to use this Prospectus
in connection with the resale of such New Notes. The Company has agreed that,
for a period of 180 days after the Expiration Date, it will make this
Prospectus, and any amendment or supplement to this Prospectus, available to any
broker-dealer that requests such documents in the Letter of Transmittal.
Each holder of the Old Notes who wishes to exchange its Old Notes for New
Notes in the Exchange Offer will be required to make certain representations to
the Company as set forth in 'The Exchange Offer--Terms and Conditions of the
Letter of Transmittal.' In addition, each holder who is a broker-dealer and who
receives New Notes for its own account in exchange for Old Notes that were
acquired by it as a result of market-making activities or other trading
activities, will be required to acknowledge that it will deliver a prospectus in
connection with any resale by it of such New Notes.
The Company will not receive any proceeds from any sale of New Notes by
broker-dealers. New Notes received by broker-dealers for their own account
pursuant to the Exchange Offer may be sold from time to time in one or more
transactions in the over-the-counter market, in negotiated transactions, through
the writing of options on the New Notes or a combination of such methods of
resale, at market prices prevailing at the time of resale, at prices related to
such prevailing market prices or negotiated prices. Any such resale may be made
directly to a purchaser or to or through brokers or dealers who may receive
compensation in the form of commissions or concessions from any such
broker-dealer and/or the purchasers of any such New Notes. Any broker-dealer
that resells New Notes that were received by it for its own account pursuant to
the Exchange Offer and any broker or dealer that participates in a distribution
of such New Notes may be deemed to be an 'underwriter' within the meaning of the
Securities Act and any profit on any such resale of New Notes and any
commissions or concessions received by any such persons may be deemed to be
underwriting compensation under the Securities Act. The Letter of Transmittal
states that by acknowledging that it will deliver and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an
'underwriter' within the meaning of the Securities Act.
The Company has agreed to pay all expenses incidental to the Exchange Offer
other than commissions and concessions of any brokers or dealers and will
indemnify holders of the Old Notes (including any broker-dealers) against
certain liabilities, including liabilities under the Securities Act, as set
forth in the Registration Rights Agreement.
EXPERTS
The Combined Financial Statements of Statia Terminals, Inc. and its
Subsidiaries and Affiliates as of December 31, 1993, 1994 and 1995 and for the
years then ended, included in this Prospectus have been audited by Arthur
Andersen LLP, independent public accountants, as indicated in their reports with
respect thereto, and are included herein in reliance upon the authority of said
firm as experts in giving said
104
<PAGE>
reports. The opinion set forth under 'Taxation--Canadian Federal Tax
Consequences' referred to in this Prospectus and elsewhere in the Registration
Statement has been rendered by Arthur Andersen & Co., Toronto, independent
public accountants, and has been referred to herein in reliance upon the
authority of such firm as experts in giving said opinion. The opinion set forth
under 'Taxation--Netherlands Antilles Taxation' referred to in this Prospectus
and elsewhere in the Registration Statement has been rendered by Coopers &
Lybrand (Netherlands Antilles), independent public accountants, and has been
referred to herein in reliance upon the authority of such firm as experts in
giving said opinion.
LEGAL MATTERS
The validity of the issuance of the New Notes offered hereby and certain
U.S. federal income tax consequences will be passed upon for the Issuers by
White & Case, New York, New York, with respect to matters of U.S. federal and
state law. The validity of the issuance of the New Notes offered hereby will be
passed upon for the Issuers by Smeets Thesseling van Bokhorst Spigt, Curacao,
Netherlands Antilles, with respect to matters of Netherlands Antilles law and
Stewart McKelvey Stirling Scales, Halifax, Nova Scotia, with respect to Canadian
and Nova Scotia law.
105
<PAGE>
GLOSSARY
<TABLE>
<S> <C>
Backwardation................................ A petroleum products price structure in which spot prices for
petroleum products exceed forward prices.
Barrel....................................... Forty-two (42) US gallons of 231 cubic inches each at 60 degrees
Fahrenheit.
Blending..................................... The process whereby product of one type is mixed with one or more
products of another type in specified proportions.
Blendstocks.................................. Additives to petroleum products and petroleum products used in
blending operations.
Bunkering.................................... The sale and delivery of diesel oil, gas oil and fuel oil to be
consumed by marine vessels for their own propulsion.
Clean Products............................... Gasoline, diesel and aviation fuels, and related products.
Contango..................................... A petroleum product price structure in which forward prices for
petroleum products exceed spot prices.
DWT.......................................... Deadweight tons.
Emergency Response Fee....................... A fee charged to all vessels docking in St. Eustatius and for entry
into the Strait of Canso in connection with the Company's
maintenance of emergency spill and response equipment.
Excess Throughput............................ Throughput volume for a given period in excess of a specified level
stated in the storage contract.
Lightering................................... The process by which liquid cargo is transferred from VLCCs and
ULCCs to smaller ships, usually while underway at sea. Lightering
can transfer all of the VLCCs' or ULCCs' cargo, or only such amount
as is necessary to decrease the vessel's draft sufficiently to
enable it to enter its port of destination.
Percentage Capacity Leased................... The storage capacity leased to third parties weighted for the
number of days leased in the month divided by the capacity
available for lease.
Product Sale................................. A bulk sale of petroleum products for use other than as bunker
fuel.
Residual Fuel Oil............................ Also called No. 6 Fuel Oil or Bunker C. The residue from the
distillation of crude oil after the light oils, gasoline, naphtha,
kerosine and distillate oils are extracted at normal temperature
and pressure.
SPM.......................................... Single Point Mooring -- a buoy connected to the shore by undersea
pipelines used for loading and unloading VLCCs and ULCCs.
</TABLE>
106
<PAGE>
<TABLE>
<S> <C>
Throughput Volume............................ The total number of inbound barrels discharged from a vessel, tank,
rail car or tanker truck, not including across-the-dock or
tank-to-tank transfers.
Transshipment................................ Utilization of a terminal for the transfer of product from a vessel
to storage tanks for subsequent transfer from such tanks to the
same or other vessels.
ULCCs........................................ Ultra Large Crude Carriers -- marine vessels above 320,000 DWT that
transport crude oil.
Vessel Call.................................. A vessel call occurs when a vessel docks or anchors at one of the
Company's terminal locations in order to load and/or discharge
cargo and/or to take on bunker fuel. Such dockage or anchorage is
counted as one vessel call regardless of the number of activities
carried on by the vessel. A vessel call also occurs when the
Company sells and delivers bunker fuel to a vessel not calling at
its terminals for the above purposes.
VLCCs........................................ Very Large Crude Carriers -- marine vessels of between 160,000 and
319,999 DWT that transport crude oil.
</TABLE>
107
<PAGE>
FINANCIAL STATEMENTS
INDEX
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
STATIA TERMINALS, INC. AND ITS SUBSIDIARIES AND AFFILIATES (PRE-PRAXAIR ACQUISITION)
PRE-PRAXAIR ACQUISITION
Report of Independent Public Accountants............................................................. F-2
Combined Balance Sheets as of December 31, 1993, 1994 and 1995....................................... F-3
Combined Statements of Income and Retained Earnings for the years ended December 31, 1993, 1994 and
1995................................................................................................ F-4
Combined Statements of Cash Flows for the years ended December 31, 1993, 1994
and 1995........................................................................................... F-5
Notes to Combined Financial Statements............................................................... F-6
INTERIM UNAUDITED FINANCIAL STATEMENTS (POST-PRAXAIR ACQUISITION)
Combined Balance Sheet as of September 30, 1996...................................................... F-15
Combined Statements of Income and Retained Earnings (Deficit)
for the nine month periods ended September 30, 1995 and 1996....................................... F-16
Combined Statements of Cash Flows
for the nine month periods ended September 30, 1995 and 1996....................................... F-17
Notes to Combined Financial Statements............................................................... F-18
STATIA TERMINALS N.V.
PRE-PRAXAIR ACQUISITION
Report of Independent Public Accountants............................................................. F-21
Consolidated Balance Sheets as of December 31, 1993, 1994 and 1995................................... F-22
Consolidated Statements of Income and Retained Earnings for the years ended December 31, 1993, 1994
and 1995............................................................................................ F-23
Consolidated Statements of Cash Flows for the years ended December 31, 1993, 1994
and 1995........................................................................................... F-24
Notes to Consolidated Financial Statements........................................................... F-25
STATIA TERMINALS POINT TUPPER, INC.
PRE-PRAXAIR ACQUISITION
Report of Independent Public Accountants............................................................. F-30
Consolidated Balance Sheets as of December 31, 1993, 1994 and 1995................................... F-31
Consolidated Statements of Income (Loss) and Retained Earnings (Deficit) for the years ended December
31, 1993, 1994 and 1995............................................................................. F-32
Consolidated Statements of Cash Flows for the years ended December 31, 1993, 1994
and 1995........................................................................................... F-33
Notes to Consolidated Financial Statements........................................................... F-34
STATIA TERMINALS INTERNATIONAL N.V.
Report of Independent Public Accountants............................................................. F-39
Balance Sheet as of September 4, 1996................................................................ F-40
Notes to Balance Sheet............................................................................... F-41
STATIA TERMINALS CANADA, INCORPORATED
Report of Independent Public Accountants............................................................. F-42
Balance Sheet as of August 15, 1996.................................................................. F-43
Notes to Balance Sheet............................................................................... F-44
</TABLE>
F-1
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Boards of Directors of Statia Terminals, Inc.
and its Subsidiaries and Affiliates:
We have audited the accompanying combined balance sheets of Statia
Terminals, Inc. and its Subsidiaries and Affiliates (Pre-Praxair Acquisition) as
of December 31, 1993, 1994 and 1995, and the related statements of income,
retained earnings and cash flows for the years then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform our audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the combined financial statements referred to above present
fairly in all material respects, the financial position of Statia Terminals,
Inc. and its Subsidiaries and Affiliates (Pre-Praxair Acquisition) as of
December 31, 1993, 1994 and 1995, and the results of operations and cash flows
for the years then ended, in conformity with generally accepted accounting
principles.
Arthur Andersen LLP
Chicago, Illinois
March 8, 1996
F-2
<PAGE>
STATIA TERMINALS, INC. AND ITS SUBSIDIARIES AND AFFILIATES
(PRE-PRAXAIR ACQUISITION)
COMBINED BALANCE SHEETS
AS OF DECEMBER 31, 1993, 1994 AND 1995
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
1993 1994 1995
-------- -------- --------
<S> <C> <C> <C>
ASSETS:
Current assets:
Cash and cash equivalents.................................................. $ 1,750 $ 424 $ 1,469
Accounts receivable--
Trade, less allowance for doubtful accounts of $394, $306 and $645...... 7,070 6,705 9,675
Other receivables....................................................... 1,404 3,720 6,707
Inventory, net............................................................. 7,020 1,984 1,886
Prepaid expenses........................................................... 377 71 163
-------- -------- --------
Total current assets............................................... 17,621 12,904 19,900
Property and equipment, net.................................................. 153,949 169,666 196,327
Deferred income taxes........................................................ 2,040 1,843 782
Intangible assets, net....................................................... 12,769 10,498 9,925
Other non-current assets..................................................... 41 2,446 3,349
-------- -------- --------
$186,420 $197,357 $230,283
-------- -------- --------
-------- -------- --------
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
Accounts payable........................................................... $ 7,236 $ 6,751 $ 6,073
Accrued expenses........................................................... 3,982 4,226 4,158
Current portion of long-term debt.......................................... 283 8,050 14,800
Payable to (receivable from) CBI affiliates.................................. (93) 20 1,276
-------- -------- --------
Total current liabilities.......................................... 11,408 19,047 26,307
Long-term debt, net of current maturities.................................... 59,843 56,400 51,600
Advances from CBI Industries, Inc............................................ 8,553 16,888 42,786
-------- -------- --------
Total liabilities.................................................. 79,804 92,335 120,693
-------- -------- --------
Stockholders' equity:
Preferred stock............................................................ 11,212 18,057 18,589
Common stock............................................................... 19,425 19,425 19,425
Additional paid-in capital................................................. 36,442 37,099 36,566
Retained earnings.......................................................... 39,537 30,441 35,010
-------- -------- --------
Total stockholders' equity......................................... 106,616 105,022 109,590
-------- -------- --------
$186,420 $197,357 $230,283
-------- -------- --------
-------- -------- --------
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-3
<PAGE>
STATIA TERMINALS, INC. AND ITS SUBSIDIARIES AND AFFILIATES
(PRE-PRAXAIR ACQUISITION)
COMBINED STATEMENTS OF INCOME AND RETAINED EARNINGS
FOR THE YEARS ENDED DECEMBER 31, 1993, 1994 AND 1995
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
1993 1994 1995
-------- -------- --------
<S> <C> <C> <C>
Revenues..................................................................... $112,076 $132,666 $135,541
Cost of services and products sold........................................... (94,850) (111,194) (117,482)
-------- -------- --------
Gross profit............................................................... 17,226 21,472 18,059
Selling and administrative expenses.......................................... (4,388) (5,339) (6,900)
-------- -------- --------
Income from operations..................................................... 12,838 16,133 11,159
Interest expense............................................................. (726) (3,114) (4,478)
Other income (expense)....................................................... (83) 1,108 (298)
-------- -------- --------
Income before income taxes and preferred stock dividends................... 12,029 14,127 6,383
Provision for income taxes................................................... 1,873 1,219 390
-------- -------- --------
Net income before preferred stock dividends................................ 10,156 12,908 5,993
Preferred stock dividends.................................................... 110 1,964 1,424
-------- -------- --------
Net income................................................................. 10,046 10,944 4,569
Retained earnings, beginning of year......................................... 29,491 39,537 30,441
Common dividends............................................................. -- (20,040) --
-------- -------- --------
Retained earnings, end of year............................................... $ 39,537 $ 30,441 $ 35,010
-------- -------- --------
-------- -------- --------
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-4
<PAGE>
STATIA TERMINALS, INC. AND ITS SUBSIDIARIES AND AFFILIATES
(PRE-PRAXAIR ACQUISITION)
COMBINED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1993, 1994 AND 1995
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Cash flows from operating activities: 1993 1994 1995
------- ------- -------
<S> <C> <C> <C>
Net income before preferred stock dividends.................................... $10,156 $12,908 $ 5,993
Adjustments to reconcile net income to net cash
provided by operating activities--
Depreciation and amortization expense....................................... 6,683 10,680 12,118
Provision for bad debts..................................................... 637 236 339
Loss (gain) on disposition of property and equipment........................ 7 (34) 59
(Increase) decrease in accounts receivable--trade........................... (3,086) 129 (3,309)
(Increase) decrease in other receivables.................................... 2,270 (2,316) (2,676)
(Increase) decrease in inventory............................................ (5,276) 5,144 (3,094)
(Increase) decrease in prepaid expense...................................... 135 306 (92)
Decrease in deferred income taxes........................................... 562 262 1,062
(Increase) decrease in intangible assets.................................... (4,987) 1,178 910
(Increase) decrease in other non-current assets............................. 8 (2,405) (297)
(Decrease) in accounts payable.............................................. (6,364) (485) (678)
Increase (decrease) in accrued expenses..................................... 943 (10) (115)
Increase (decrease) in payable to CBI affiliates............................ (5,059) 113 1,256
------- ------- -------
Net cash provided by (used in) operating activities....................... (3,371) 25,706 11,476
------- ------- -------
Cash flows from investing activities:
Decrease in equity investments................................................. 4,580 -- --
Purchase of Point Tupper....................................................... (10,794) -- --
Proceeds from sale of property and equipment................................... 6 87 230
Purchase of property, plant and equipment...................................... (17,147) (25,440) (37,138)
------- ------- -------
Net cash used in investing activities..................................... (23,355) (25,353) (36,908)
Cash flows from financing activities:
Sale of common and preferred stock............................................. 11,200 7,501 --
Increase (decrease) in advances from CBI....................................... (1,651) 8,335 25,898
Bank borrowings (repayments), net.............................................. 18,965 4,324 1,952
Dividends paid to affiliates................................................... (110) (21,839) (1,373)
------- ------- -------
Net cash provided by (used in) financing activities....................... 28,404 (1,679) 26,477
------- ------- -------
Increase (decrease) in cash and cash equivalents................................. 1,678 (1,326) 1,045
Cash and cash equivalents, beginning balance..................................... 72 1,750 424
------- ------- -------
Cash and cash equivalents, ending balance........................................ $ 1,750 $ 424 $ 1,469
------- ------- -------
------- ------- -------
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-5
<PAGE>
STATIA TERMINALS, INC. AND ITS SUBSIDIARIES AND AFFILIATES
(PRE-PRAXAIR ACQUISITION)
NOTES TO COMBINED FINANCIAL STATEMENTS
DECEMBER 31, 1993, 1994 AND 1995
(DOLLARS IN THOUSANDS)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION AND OPERATIONS
Statia Terminals, Inc. and its Subsidiaries and Affiliates (the Company)
own, lease and operate petroleum and other bulk liquid blending, transshipment
and storage facilities located on the Island of St. Eustatius, Netherlands
Antilles; near Port Hawkesbury, Nova Scotia, Canada; and in Brownsville, Texas.
The Company's terminaling services are furnished to some of the world's largest
producers of crude oil, integrated oil companies, oil refiners and traders, and
petrochemical companies. In addition, the Company provides a variety of related
terminal services including the supplying of bunker fuels for vessels, emergency
and spill response, brokering of product trades and ship services. Statia
Terminals, Inc. provides marketing management and administrative services for
its subsidiaries and affiliates from its office in Deerfield Beach, Florida.
These combined financial statements represent the combination of commonly
owned companies operating in the independent bulk liquid terminating industry.
The Company includes the following primary entities: Statia Terminals, Inc.
(incorporated in Delaware), Statia Terminals N.V. (incorporated in the
Netherlands Antilles), Statia Terminals Point Tupper, Inc. (incorporated in Nova
Scotia, Canada) and Statia Terminals Southwest, Inc. (incorporated in Texas).
Significant intercompany balances and transactions have been eliminated.
The Company is a wholly owned subsidiary of CBI Industries, Inc. (CBI). On
January 12, 1996, pursuant to the merger agreement dated December 22, 1995, CBI
became a wholly owned subsidiary of Praxair, Inc. This merger transaction was
reflected in the Company's combined financial statements as a purchase effective
January 1, 1996. Accordingly, the historical information provided herein, for
periods prior to January 1, 1996 ('Pre-Praxair Acquisition'), will not be
comparable to subsequent financial information.
USE OF ESTIMATES
These combined financial statements have been prepared in conformity with
generally accepted accounting principles as promulgated in the United States
which require management to make estimates and assumptions that affect the
reported amounts of assets and liabilities. Management is also required to make
judgments regarding disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of revenues and expenses
during the reporting periods. Actual results could differ from those estimates.
REVENUE RECOGNITION
Revenues from storage and throughput operations are recognized ratably as
the services are provided. Revenues and commissions from bunkering services,
vessel services and product sales are recognized at the time of delivery of the
service or product.
FOREIGN CURRENCY TRANSLATION AND EXCHANGE
The combined financial statements include the financial statements of
foreign subsidiaries and affiliates translated in accordance with Statement of
Financial Accounting Standards (SFAS) No. 52 'Foreign Currency Translation.' The
functional currency for foreign subsidiaries and affiliates is the U.S. dollar.
F-6
<PAGE>
STATIA TERMINALS, INC. AND ITS SUBSIDIARIES AND AFFILIATES
(PRE-PRAXAIR ACQUISITION)
NOTES TO COMBINED FINANCIAL STATEMENTS - (CONTINUED)
DECEMBER 31, 1993, 1994 AND 1995
(DOLLARS IN THOUSANDS)
CASH AND CASH EQUIVALENTS
The Company's excess cash is either swept by CBI to fund or cover current
advances or invested in short-term, highly liquid investments with maturities of
three months or less. Such short-term investments are carried at cost, which
approximates market, and are classified as cash and cash equivalents.
PROPERTY AND EQUIPMENT
Property and equipment are stated at cost less accumulated depreciation.
Depreciation expense is computed using the straight-line method over the
estimated useful lives of the respective assets. Additions to property and
equipment, replacements, betterments and major renewals are capitalized. Repair
and maintenance expenditures which do not materially increase asset values or
extend useful lives are expensed.
The Company expects there will be no material effect of its financial
position or results of operations resulting from the adoption, effective January
1, 1996, of SFAS No. 121, Accounting for the Impairment of Long-Lived Assets and
for Long-Lived Assets to be Disposed of.
INTANGIBLE ASSETS
Intangible assets include goodwill, deferred financing costs,
organizational costs and preoperating expenditures. The excess of cost over the
fair value of tangible net assets acquired has been capitalized as goodwill and
is being amortized on a straight-line basis over the periods of expected
benefit, which do not exceed 40 years. The Company's costs related to
establishing debt obligations are amortized ratably over the life of the
underlying obligation. Organizational costs and preoperating expenditures are
amortized evenly over five-year periods. Amortization expense was $224 in 1993,
$929 in 1994 and $1,540 in 1995 related to these intangible assets. Accumulated
amortization was $224, $1,153, and $2,693 at December 31, 1993, 1994 and 1995,
respectively.
INCOME TAXES
The Company determines its tax provision and deferred tax balances in
compliance with SFAS No. 109, 'Accounting for Income Taxes.' Under this
approach, the provision for income taxes represents income taxes paid or payable
for the current year adjusted for the change in deferred taxes during the year.
Deferred income taxes reflect the net tax effects of temporary differences
between the financial statement bases and the tax bases of assets and
liabilities and are adjusted for changes in tax rates and tax laws when changes
are enacted.
SIGNIFICANT CUSTOMERS
The Company's revenues from a state-owned oil producer and a refiner
constituted approximately 6.4% and 4.8%, respectively, of the Company's total
1995 revenues. In addition, approximately 10.1% of the Company's 1995 revenues
were derived from parties unaffiliated with such state-owned oil producer and
were generated by the movement of such products through the terminals. No other
customer accounted for more than 5% of the Company's 1995 revenues directly or
indirectly. Although the Company has long-standing relationships and long-term
contracts with two customers, if such long-term contracts were not renewed at
the end of their terms, 2000 and 1999, respectively, or if the Company otherwise
lost any significant portion of its revenues from these customers, such loss
could have a material adverse effect on the business and financial condition of
the Company. The Company also has long-term contracts with certain other key
customers and there can be no assurance that these contracts will be renewed at
the end of their terms.
F-7
<PAGE>
STATIA TERMINALS, INC. AND ITS SUBSIDIARIES AND AFFILIATES
(PRE-PRAXAIR ACQUISITION)
NOTES TO COMBINED FINANCIAL STATEMENTS - (CONTINUED)
DECEMBER 31, 1993, 1994 AND 1995
(DOLLARS IN THOUSANDS)
2. HURRICANE INSURANCE CLAIMS
During the third quarter of 1995, the Company's Caribbean location was
adversely impacted by three hurricanes. Operations at the facility were ceased
for varying lengths of time from August 28, 1995 to October 3, 1995. Certain
terminal assets sustained extensive damage and are presently being repaired.
Several marine items and shoreline installations were damaged or destroyed and
are being repaired or replaced.
The Company has certain property and liability insurance policies with
various insurance carriers. The claims process related to the hurricane damages
has been initiated and is continuing. As of December 31, 1995, the Company had
incurred $8,121 of expenditures which it believes are subject to hurricane
insurance coverage and had received advances from its insurance carriers
amounting to $3,110. The insurance claim receivable of $4,611 is included in
other receivables as of December 31, 1995. Deductibles under the insurance
policies aggregating $400 have been expensed during 1995. It is the intention of
management to incur additional expenditures related to the replacement or repair
of items damaged or destroyed. At the present time, the amount of proceeds to be
recovered under insurance policies is uncertain. However, both current and
future expenditures which represent facility improvements, if unreimbursed by
the Company's insurers, will be capitalized.
3. PROPERTY AND EQUIPMENT
At December 31, 1993, 1994 and 1995, property and equipment consisted of
the following:
<TABLE>
<CAPTION>
USEFUL
1993 1994 1995 LIFE
-------- -------- -------- ------------
<S> <C> <C> <C> <C>
Land......................................................... $ 1,314 $ 1,314 $ 1,314 --
Land improvements............................................ 1,388 1,488 2,260 5-20 years
Buildings and improvements................................... 3,537 3,591 3,971 20-40 years
Plant machinery and terminals................................ 193,353 216,294 251,119 4-40 years
Field and office equipment................................... 1,655 3,794 4,269 3-15 years
-------- -------- --------
Total property and equipment, at cost...................... 201,247 226,481 262,933
Less accumulated depreciation................................ (47,298) (56,815) (66,606)
-------- -------- --------
Property and equipment, net................................ $153,949 $169,666 $196,327
-------- -------- --------
-------- -------- --------
</TABLE>
Effective January 1, 1995, the Company extended the depreciable lives of
certain marine installations and tanks from 15 and 20 years to 25 and 40 years,
respectively. This change resulted in a corresponding reduction of depreciation
expense of $3,400 for 1995.
During construction of its facilities, the Company allocates interest and
certain overhead charges to the cost of the constructed facility. During 1993,
1994 and 1995, interest capitalized to constructed facilities amounted to $843,
$716, and $352, respectively.
4. DEBT
At December 31, 1993, 1994 and 1995, the Company had $54,000, $60,000 and
$56,400, respectively, outstanding on a long-term debt agreement secured by
property and equipment at the Company's Point Tupper, Canada, facility. A
guarantee has been provided by CBI. At December 31, 1994 and 1995, $3,600 and
$4,800, respectively, was currently payable. This obligation bears interest at
one-, two-, three-or six-month U.S. prime rates, London Interbank Offer Rates
(LIBOR) or Canadian bankers acceptance rates, plus 75 basis points, at the
option of the Company. The weighted average interest rates for the year were
4.8%, 6.7% and 6.7% in 1993, 1994 and 1995, respectively. The debt agreement
requires the Company and CBI to maintain various debt covenants.
F-8
<PAGE>
STATIA TERMINALS, INC. AND ITS SUBSIDIARIES AND AFFILIATES
(PRE-PRAXAIR ACQUISITION)
NOTES TO COMBINED FINANCIAL STATEMENTS - (CONTINUED)
DECEMBER 31, 1993, 1994 AND 1995
(DOLLARS IN THOUSANDS)
The Company has three short-term and unsecured revolving credit lines
aggregating $12,500 used to cover working capital needs and letters of credit,
of which $4,450 and $10,000 was outstanding at December 31, 1994 and 1995,
respectively. These credit lines, guaranteed by CBI, bear interest quarterly at
one-, two- or three-month LIBOR plus 50 basis points, or 6.5% and 6.3% at
December 31, 1994 and 1995, respectively. During February, 1996, two of these
credit lines aggregating $10,000 were renewed until February 28, 1997, at LIBOR
plus 35 basis points and guaranteed by Praxair, Inc.
The Company also had two long-term loans outstanding with Canadian
government agencies at December 31, 1993 totaling U.S. $6,409. Of this total,
U.S. $283 was currently payable. The two loans were paid in full during 1994.
The weighted average year-end interest rate on these loans as of December
31,1993 was 9.7%.
Minimum annual principal payments due on revolving credit lines and
long-term debt during the years ending 1996 through 2000 are $14,800, $5,700,
$6,000, $6,900 and $33,000, respectively.
Cash payments for interest to third parties were $228, $2,951 and $4,494
for 1993, 1994 and 1995, respectively.
In 1993, the Company entered into an interest rate swap agreement,
guaranteed by CBI, based on a notional amount of $20,000 whereby the Company
makes semiannual interest payments at an annual rate of 5.91% through October
21, 1996, in exchange for the right to receive interest payments at floating
rates (3.3750%, 5.8125% and 5.8750% at December 31, 1993, 1994 and 1995,
respectively) semiannually through October 21, 1996. This swap agreement is
extendible for two additional years at the option of the Company. The fair
market value impact of the interest rate swap and related option agreement was
$1 as of December 31, 1995, which was estimated based upon the net amount that
would be paid to terminate the agreement, utilizing quoted prices for comparable
contracts and discounted cash flows. The counterparty to the interest rate swap
agreement is a major financial institution, which the Company periodically
evaluates as to its creditworthiness. The Company has never experienced, nor
does it anticipate, nonperformance.
5. LEASES
The Company rents certain facilities, land and marine equipment under
cancelable and noncancelable operating leases. Rental expense on operating
leases was $13,760 in 1995 (of which $8,823 including $3,082 for recognition of
lease residual value guarantee, relates to the lease described below), $3,435 in
1994 and $3,365 in 1993. Future rental commitments, excluding residual value
guarantees discussed below, during the years ending 1996 through 2000 are
$10,678, $10,512, $10,145, $7,506 and $1,668, respectively.
On November 17, 1993, Statia Terminals N.V. and a subsidiary entered into
an agreement with a third party financier (First Salute Leasing, L.P.) pursuant
to which a portion of its land on St. Eustatius was leased to this third party
for the purpose of construction and operation of five million barrels of crude
oil storage tanks and a single point mooring system. Statia Terminals N.V. acted
as agent for the third party with regard to the construction of the facilities.
Statia Terminals N.V. has leased the facility from the third party for a minimum
period of five years beginning February 1, 1995. The aggregate construction cost
incurred for these leased assets totalled $88,513. The facility became
operational in the first quarter of 1995 and the applicable portion of the
required rentals are included in rent expense and future rental commitments
above. At the completion of the initial five year term, Statia Terminals N.V.
has the option to extend the lease, purchase the facility from the lessor, or
arrange for the leased properties to be sold to a third party. In the event of
purchase or sale of these properties, Statia Terminals N.V. is obligated to the
lessor for any short-fall between the purchase or sales price and the lease
residual value guarantee. At December 31, 1995, the maximum amount of the
residual value guarantee related to assets under this lease totaled $78,777.
F-9
<PAGE>
STATIA TERMINALS, INC. AND ITS SUBSIDIARIES AND AFFILIATES
(PRE-PRAXAIR ACQUISITION)
NOTES TO COMBINED FINANCIAL STATEMENTS - (CONTINUED)
DECEMBER 31, 1993, 1994 AND 1995
(DOLLARS IN THOUSANDS)
6. SHAREHOLDERS' EQUITY
On January 18, 1991, Statia Terminals N.V. issued 12,000 shares of
preferred stock with a par value of $1.00 per share to an affiliate of CBI in
consideration for an investment of $12,000. Each share of this preferred stock
entitles the holder to one vote on matters put forth for shareholder approval.
Preferred share dividends are not recorded until declared by Statia Terminals
N.V. The preferred shares are non-cumulative and non-participating and dividends
are paid at a rate of 8% per annum when declared. Preferred shareholders have
preference upon liquidation over common shareholders.
On December 29, 1994, Statia Terminals N.V. declared preferred dividends of
$960 and common dividends of $20,040, both payable on December 30, 1994 to
shareholders of record on December 29, 1994. On January 10, 1996, Statia
Terminals N.V. declared preferred dividends of $1,000 and common dividends of
$24,000, both payable on January 11, 1996, to shareholders of record on January
10, 1996. All dividends were paid to affiliates of CBI.
On October 22, 1993, and March 15, 1994, Statia Terminals Point Tupper,
Inc. issued 14,689 shares and 10,311 shares, respectively, of first preferred
stock to a Canadian affiliate of CBI in exchange for an aggregate contribution
of Cdn $25,000 (U.S.$18,577). The first preferred stock is non-voting,
cumulative and redeemable. The preferred dividends are accrued and paid
quarterly at a rate of .25% above the preferred shareholder's borrowing rate as
established by the shareholder's lending institution. During 1993, 1994 and
1995, Statia Terminals Point Tupper, Inc. paid dividends of $0, $835 and $1,373,
respectively, with average dividend rates of 5.11%, 5.99% and 7.81%,
respectively. First preferred shareholders have preference upon liquidation over
all other classes of preferred shareholders as well as common shareholders. The
components of shareholders' equity are as follows:
<TABLE>
<CAPTION>
STOCK ADDITIONAL
-------------------- RETAINED PAID-IN
COMMON PREFERRED EARNINGS CAPITAL TOTAL
------- --------- -------- ---------- --------
<S> <C> <C> <C> <C> <C>
1993:
Statia Terminals, Inc............................... $ 1 $ -- $ (650) $ 112 $ (537)
Statia Terminals N.V................................ 19,395 12 41,172 34,364 94,943
Statia Terminals Point Tupper, Inc.................. 1 17,819 (722) -- 17,098
Statia Terminals Southwest, Inc..................... 10 5,000 (507) 989 5,492
All others.......................................... 29 -- (202) 1,178 1,005
Eliminations........................................ (11) (11,619) 446 (201) (11,385)
------- --------- -------- ---------- --------
$19,425 $11,212 $39,537 $ 36,442 $106,616
------- --------- -------- ---------- --------
------- --------- -------- ---------- --------
1994:
Statia Terminals, Inc............................... $ 1 $ -- $ 167 $ 112 $ 280
Statia Terminals N.V................................ 19,395 12 34,254 34,364 88,025
Statia Terminals Point Tupper, Inc.................. 1 24,664 (3,489) 1,857 23,033
Statia Terminals Southwest, Inc..................... 10 -- (96) 989 903
All others.......................................... 33 -- (578) 2,378 1,833
Eliminations........................................ (15) (6,619) 183 (2,601) (9,052)
------- --------- -------- ---------- --------
$19,425 $18,057 $30,441 $ 37,099 $105,022
------- --------- -------- ---------- --------
------- --------- -------- ---------- --------
1995:
Statia Terminals, Inc............................... $ 1 $ -- $ 329 $ 112 $ 442
Statia Terminals N.V................................ 19,395 12 46,547 34,364 100,318
Statia Terminals Point Tupper, Inc.................. 2 25,196 (10,028) 11,324 26,494
Statia Terminals Southwest, Inc..................... 10 -- (1,485) 989 (486)
All others.......................................... 33 -- 304 2,378 2,715
Eliminations........................................ (16) (6,619) (657) (12,601) (19,893)
------- --------- -------- ---------- --------
$19,425 $18,589 $35,010 $ 36,566 $109,590
------- --------- -------- ---------- --------
------- --------- -------- ---------- --------
</TABLE>
F-10
<PAGE>
STATIA TERMINALS, INC. AND ITS SUBSIDIARIES AND AFFILIATES
(PRE-PRAXAIR ACQUISITION)
NOTES TO COMBINED FINANCIAL STATEMENTS - (CONTINUED)
DECEMBER 31, 1993, 1994 AND 1995
(DOLLARS IN THOUSANDS)
7. INCOME TAXES
U.S. federal income taxes and certain state taxes are settled quarterly
with CBI. In Canada and the Netherlands Antilles, estimated current year taxes
payable are paid monthly. Total cash payments to CBI for U.S. income taxes were
$256 in 1995, $1,077 in 1994, and $150 in 1993.
The sources of income (loss) before the provision for income taxes and
preferred stock dividends are:
<TABLE>
<CAPTION>
1993 1994 1995
------- ------- --------
<S> <C> <C> <C>
U.S......................................................... $ 4,150 $ 45 $ (1,387)
Non-U.S..................................................... 7,879 14,082 7,770
------- ------- --------
$12,029 $14,127 $ 6,383
------- ------- --------
------- ------- --------
</TABLE>
The benefit from (provision for) income taxes consisted of:
<TABLE>
<CAPTION>
1993 1994 1995
------- ------- -------
<S> <C> <C> <C>
Taxes payable:
U.S........................................................ $ (573) $ (30) $ 818
State...................................................... (10) (8) (19)
Non-U.S.................................................... (782) (785) (775)
------- ------- -------
(1,365) (823) 24
------- ------- -------
Deferred income taxes:
U.S........................................................ (147) (35) (52)
Non-U.S.................................................... (361) (361) (362)
------- ------- -------
(508) (396) (414)
------- ------- -------
$(1,873) $(1,219) $ (390)
------- ------- -------
------- ------- -------
</TABLE>
The components of the deferred income taxes benefit (provision) above are:
<TABLE>
<CAPTION>
1993 1994 1995
------- ------- -------
<S> <C> <C> <C>
Depreciation expense......................................... $ (402) $ (432) $ (515)
Employee and retiree benefits................................ (106) 36 58
Other, net................................................... -- -- 43
------- ------- -------
$ (508) $ (396) $ (414)
------- ------- -------
------- ------- -------
</TABLE>
F-11
<PAGE>
STATIA TERMINALS, INC. AND ITS SUBSIDIARIES AND AFFILIATES
(PRE-PRAXAIR ACQUISITION)
NOTES TO COMBINED FINANCIAL STATEMENTS - (CONTINUED)
DECEMBER 31, 1993, 1994 AND 1995
(DOLLARS IN THOUSANDS)
A reconciliation of income taxes at the U.S. statutory rate of 35% to the
Company's provision for income taxes follows:
<TABLE>
<CAPTION>
1993 1994 1995
------- ------- -------
<S> <C> <C> <C>
Income before income taxes and preferred stock dividends..... $12,029 $14,127 $ 6,383
------- ------- -------
------- ------- -------
Tax provision at U.S. statutory rate......................... $(3,766) $(5,351) $(2,234)
State income taxes........................................... (10) (8) (19)
Non-U.S. tax rate differential and losses without tax
benefit.................................................... 1,937 4,144 1,909
Other, net................................................... (34) (4) (46)
------- ------- -------
Provision for income taxes................................... $(1,873) $(1,219) $ (390)
------- ------- -------
------- ------- -------
Effective tax rates.......................................... 15.57% 8.63% 6.11%
------- ------- -------
------- ------- -------
</TABLE>
The principal temporary differences included in deferred income taxes
reported on the balance sheets are:
<TABLE>
<CAPTION>
1993 1994 1995
------- ------- -------
<S> <C> <C> <C>
Depreciation expense......................................... $ 2,120 $ 1,794 $ 1,508
Acquisition of partnership shares and other activity......... (46) (660) (660)
Employee and retiree benefits................................ -- (20) (44)
Net operating loss carryforwards............................. 5,389 4,730 8,521
Valuation allowance.......................................... (5,389) (4,730) (8,521)
Other, net................................................... (34) 729 (22)
------- ------- -------
$ 2,040 $ 1,843 $ 782
------- ------- -------
------- ------- -------
</TABLE>
At December 31, 1995 undistributed earnings equaled approximately $46,500.
If such earnings were distributed, additional U.S. tax of approximately $15,000
would be incurred. In January, 1996, the Company distributed approximately
$25,000 from a non-U.S. subsidiary. A portion of this distribution, the amount
in excess of 1996 earnings, will be aggregated with the $46,500 undistributed
earnings at December 31, 1995.
The Company's Canadian subsidiaries have incurred certain costs which are
accounted for differently for financial reporting and Canadian taxation
purposes. Timing differences in the recognition of expenses occur primarily as a
result of differing provisions for depreciating property and equipment and
amortization of goodwill, deferred financing costs, organizational costs and
preoperating expenditures. Certain expenditures are not deductible for taxation
purposes. In addition, Canadian subsidiaries of the Company have incurred
taxable losses which will be available for utilization over a seven year period
to offset future taxable income. Net operating loss carryforwards available to
offset future Canadian taxable income were U.S. $4,834, $4,205 and $7,967 as of
December 31, 1993, 1994 and 1995, respectively.
On June 1, 1989, the governments of the Netherlands Antilles and St.
Eustatius approved a 12-year Free Zone Agreement (the Agreement) retroactive to
January 1, 1989, and concluding on December 31, 2000. The Agreement requires the
Company to pay a 2% rate on taxable income instead of profit tax, or a minimum
payment of 500,000 Netherlands Antilles guilders (U.S. $282). The Agreement
further provides that any amounts paid in order to meet the minimum annual
payment will be available to offset future tax liabilities under the Agreement
to the extent that the minimum annual payment is greater than 2% of taxable
income. At December 31, 1993, 1994 and 1995, the amount available to offset
future tax liability under the Agreement was approximately $555, $525 and $554,
respectively.
F-12
<PAGE>
STATIA TERMINALS, INC. AND ITS SUBSIDIARIES AND AFFILIATES
(PRE-PRAXAIR ACQUISITION)
NOTES TO COMBINED FINANCIAL STATEMENTS - (CONTINUED)
DECEMBER 31, 1993, 1994 AND 1995
(DOLLARS IN THOUSANDS)
8. RELATED-PARTY TRANSACTIONS
As a wholly owned subsidiary of CBI, the Company engages in various
related-party transactions with CBI and its affiliates. The unpaid portion of
these transactions with CBI affiliates is included in payable to (receivable
from) CBI affiliates. Advances from CBI consist principally of funds loaned by
CBI for disbursements, debt service and dividends offset by the transfer of the
Company's excess cash. Advances from CBI amounted to $8,553, $16,888 and $42,786
at December 31, 1993, 1994 and 1995, respectively. The advances from CBI are
non-interest bearing and do not have a specified maturity date.
The Company regularly contracts with affiliates of CBI for the construction
and expansion of its facilities and for certain repair and maintenance work.
During 1993, 1994 and 1995, $35,338, $7,406 and $19,032, respectively, was paid
to CBI affiliates for these activities related to its property and equipment. It
is not possible to determine whether the results of operations and financial
position of the Company would be significantly different had the Company
contracted with independent third parties for its construction, expansion,
repair and maintenance needs.
CBI directly and indirectly allocates certain corporate administrative
services to the Company including certain legal services, risk management, tax
advice and return preparation, employee benefit administration, cash management
and other services. During 1993, 1994 and 1995, $361, $578 and $1,592,
respectively, was paid for these direct and indirect administrative services.
9. COMMITMENTS AND CONTINGENCIES
The Company, CBI and others are defendants in a suit brought during
January, 1994, before the District Court of Harris County, Texas, 334th Judicial
District, in which plaintiffs claim damages, primarily for lost profits, as a
result of the Company's alleged failure to lease certain Company owned property
and tankage to the plaintiffs for a proposed vacuum tower project on the island
of St. Eustatius. The plaintiffs contend that the defendants breached their
alleged contractual obligations and made misrepresentations to the plaintiffs.
The Company believes the allegations made are without merit; therefore, the
Company intends to vigorously contest the claims through numerous legal and
factual defenses. While no estimate can reasonably be made of any ultimate
liability at this time, the Company believes the final outcome will not have a
material adverse effect on the Company's financial condition and results of
operations.
The Company is involved in various other claims and litigation arising from
the conduct of its business. Based upon analysis of legal matters and
discussions with legal counsel, the Company believes that the ultimate outcome
of these matters will not have a material adverse effect on the Company's
financial position and results of operations.
The Company has entered into two collective bargaining agreements involving
a portion of its work force as of December 31, 1995. A collective bargaining
agreement between Statia Terminals N.V. and 52.8% of its work force expires in
May, 1996. Additionally, a collective bargaining agreement between Statia
Terminals Point Tupper, Inc. and 51.1% of its work force expires in September,
1998.
10. RETIREMENT PLANS
For United States citizens, the Company participates in a defined benefit
plan, certain contributory plans, an employee stock ownership plan and other
plans sponsored by CBI. The Company paid CBI its proportionate share of the
contributions to these plans amounting to $358 in 1993, $340 in 1994 and $396 in
1995. These amounts are included in the corporate administrative charges
described in Note 8 above. In addition, for certain foreign nationals residing
in the Netherlands Antilles, the Company sponsors a government guaranteed
pension plan.
F-13
<PAGE>
STATIA TERMINALS, INC. AND ITS SUBSIDIARIES AND AFFILIATES
(PRE-PRAXAIR ACQUISITION)
NOTES TO COMBINED FINANCIAL STATEMENTS - (CONTINUED)
DECEMBER 31, 1993, 1994 AND 1995
(DOLLARS IN THOUSANDS)
11. NATURE OF OPERATIONS BY GEOGRAPHIC AREA
<TABLE>
<CAPTION>
REVENUES FROM IDENTIFIABLE
UNAFFILIATED OPERATING ASSETS AS OF
CUSTOMERS PROFIT (LOSS)(1) DECEMBER 31(2)
------------- ---------------- --------------
<S> <C> <C> <C>
1993:
Netherlands Antilles(3)................ $ 101,887 $ 11,673 $101,241
Canada(4).............................. 5,365 (770) 81,946
United States.......................... 4,824 1,935 7,842
Corporate.............................. -- -- 5,802
Eliminations and other................. -- -- (10,411)
------------- ---------------- --------------
Combined............................... $ 112,076 $ 12,838 $186,420
------------- ---------------- --------------
------------- ---------------- --------------
1994:
Netherlands Antilles(3)................ $ 114,989 $ 13,255 $ 94,510
Canada(4).............................. 12,222 1,975 89,843
United States.......................... 5,455 903 8,367
Corporate.............................. -- -- 12,272
Eliminations and other................. -- -- (7,635)
------------- ---------------- --------------
Combined............................... $ 132,666 $ 16,133 $197,357
------------- ---------------- --------------
------------- ---------------- --------------
1995:
Netherlands Antilles(3)................ $ 121,899 $ 13,205 $120,184
Canada(4).............................. 11,184 (510) 96,461
United States.......................... 2,458 (1,536) 5,954
Corporate.............................. -- -- 25,569
Eliminations and other................. -- -- (17,885)
------------- ---------------- --------------
Combined............................... $ 135,541 $ 11,159 $230,283
------------- ---------------- --------------
------------- ---------------- --------------
</TABLE>
- ------------------
(1) In computing operating profit by geographic region, none of the following
items have been included: interest expense, income taxes and equity from
income in unconsolidated affiliates.
(2) Identifiable assets are those assets that are identified with the operation
of each geographic area. The identifiable assets of the Caribbean exclude
off-balance sheet leased assets totaling $86,995 at December 31, 1994, and
$88,513 at December 31, 1995. Identifiable asset eliminations/other are
amounts due to/from the Company and its Subsidiaries and Affiliates, and
other entities not included in the United States, Caribbean and Canada
amounts.
(3) The Netherlands Antilles amounts include Statia Terminals N.V., Statia
Chandlers N.V., Bicen Development and Saba Trust Company.
(4) The Canada amounts include Statia Terminals Point Tupper Inc., Statia
Steamship Agency and Statia Terminals Point Tupper Marine Services. The
revenues from unaffiliated customers for 1993 includes management fees from
a joint venture.
F-14
<PAGE>
THE FINANCIAL STATEMENTS OF THE COMPANY AND
ITS PREDECESSOR ARE NOT COMPARABLE IN CERTAIN RESPECTS (NOTE 1)
STATIA TERMINALS, INC. AND ITS SUBSIDIARIES AND AFFILIATES
(POST-PRAXAIR ACQUISITION)
COMBINED BALANCE SHEET
(UNAUDITED)
AS OF SEPTEMBER 30, 1996
(DOLLARS IN THOUSANDS)
<TABLE>
<S> <C>
ASSETS:
Current assets:
Cash and cash equivalents........................................................................... $ 648
Accounts receivable less allowance for doubtful accounts of $778.................................... 13,153
Inventory........................................................................................... 6,704
Other current assets................................................................................ 451
--------
Total current assets........................................................................... 20,956
Property and equipment, net......................................................................... 116,216
Other non-current assets............................................................................ 2,638
--------
$139,810
--------
--------
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT):
Current liabilities:
Notes payable....................................................................................... $ 76,000
Accounts payable.................................................................................... 8,563
Accrued expenses.................................................................................... 6,067
Payable to CBI affiliates........................................................................... 29
--------
Total current liabilities...................................................................... 90,659
Advances from Praxair, Inc.......................................................................... 69,162
Stockholders' equity:
Preferred stock..................................................................................... 18,589
Common stock........................................................................................ 19,425
Additional paid-in capital.......................................................................... (33,870)
Retained deficit.................................................................................... (24,155)
--------
Total stockholders' equity (deficit)........................................................... (20,011)
--------
$139,810
--------
--------
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-15
<PAGE>
THE FINANCIAL STATEMENTS OF THE COMPANY AND ITS PREDECESSOR
ARE NOT COMPARABLE IN CERTAIN RESPECTS (NOTE 1)
STATIA TERMINALS, INC. AND ITS SUBSIDIARIES AND AFFILIATES
COMBINED STATEMENTS OF INCOME AND RETAINED EARNINGS (DEFICIT)
(UNAUDITED)
FOR THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 1995 AND 1996
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
PRE-PRAXAIR POST-PRAXAIR
ACQUISITION ACQUISITION
SEPTEMBER 30, SEPTEMBER 30,
1995 1996
------------- -------------
<S> <C> <C>
Revenues....................................................................... $ 104,318 $ 114,977
Cost of services and products sold............................................. 89,564 104,575
------------- -------------
Gross profit................................................................. 14,754 10,402
Selling and administrative expenses............................................ 4,954 4,464
------------- -------------
Income from operations....................................................... 9,800 5,938
Interest expense............................................................... 3,767 3,447
Other expense.................................................................. 442 359
------------- -------------
Income before income taxes and preferred stock dividends..................... 5,591 2,132
Provision for income taxes..................................................... 392 498
------------- -------------
Net income before preferred stock dividends.................................. 5,199 1,634
Preferred stock dividends...................................................... 1,098 789
------------- -------------
Net income................................................................... 4,101 845
Retained earnings, beginning of period......................................... 30,441 35,010
Praxair purchase accounting--reclass historical retained earnings to additional
paid-in capital.............................................................. -- (35,010)
Dividends paid................................................................. -- (25,000)
------------- -------------
Retained earnings (deficit), end of period..................................... $ 34,542 $ (24,155)
------------- -------------
------------- -------------
</TABLE>
The accompanying notes are an integral part of these statements.
F-16
<PAGE>
THE FINANCIAL STATEMENTS OF THE COMPANY AND ITS PREDECESSOR
ARE NOT COMPARABLE IN CERTAIN RESPECTS (NOTE 1)
STATIA TERMINALS, INC. AND ITS SUBSIDIARIES AND AFFILIATES
COMBINED STATEMENTS OF CASH FLOWS
(UNAUDITED)
FOR THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 1995 AND 1996
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
PRE-PRAXAIR POST-PRAXAIR
ACQUISITION ACQUISITION
SEPTEMBER 30, 1995 SEPTEMBER 30, 1996
------------------ ------------------
<S> <C> <C>
Cash flows from operating activities:
Net income before preferred stock dividends.......................... $ 5,199 $ 1,634
Adjustments to reconcile net income
to net cash provided by operating activities--
Depreciation and amortization expense............................. 8,293 7,544
Loss on disposition of property and equipment..................... 60 458
Provision for bad debts........................................... 141 231
(Increase) decrease in accounts receivable........................ (4,204) 2,998
Increase in inventory............................................. (2,130) (4,818)
Increase in other current assets.................................. (116) (288)
Decrease in deferred income taxes................................. 825 782
Increase in other non-current assets.............................. (1,870) (391)
Increase in accounts payable...................................... 3,644 2,490
Increase in accrued expenses...................................... 994 1,909
Increase (decrease) in payable to affiliates...................... 18 (1,247)
Decrease in other current liabilities............................. (79) --
---------- ----------
Net cash provided by operating activities....................... 10,775 11,302
---------- ----------
Cash flows from investing activities:
Proceeds from sale of property and equipment......................... -- 169
Purchase of property and equipment................................... (27,820) (12,479)
---------- ----------
Net cash used in investing activities........................... (27,820) (12,310)
---------- ----------
Cash flows from financing activities:
Increase in advances from Praxair, Inc............................ 16,401 26,376
Increase in notes payable......................................... -- 66,000
Bank borrowings, net of repayments................................ 1,400 (66,400)
Dividends paid to affiliates...................................... (1,098) (25,789)
---------- ----------
Net cash provided by financing activities....................... 16,703 187
---------- ----------
Decrease in cash and cash equivalents.................................. (342) (821)
Cash and cash equivalents, beginning balance........................... 424 1,469
---------- ----------
Cash and cash equivalents, ending balance.............................. $ 82 $ 648
---------- ----------
---------- ----------
</TABLE>
The accompanying notes are an integral part of these statements.
F-17
<PAGE>
THE FINANCIAL STATEMENTS OF THE COMPANY AND ITS PREDECESSOR
ARE NOT COMPARABLE IN CERTAIN RESPECTS (NOTE 1)
STATIA TERMINALS, INC. AND ITS SUBSIDIARIES AND AFFILIATES
(POST-PRAXAIR ACQUISITION)
NOTES TO COMBINED FINANCIAL STATEMENTS
(UNAUDITED)
FOR THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 1995 AND 1996
(DOLLARS IN THOUSANDS)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
GENERAL
These interim financial statements are unaudited, but include, in the
opinion of management, all adjustments necessary for a fair presentation of the
results for the periods indicated. Results on an interim basis are not, however,
necessarily indicative of results which may be expected for the full year.
In connection with these interim financial statements, reference is made to
the annual financial statements and notes thereto contained elsewhere in this
Prospectus.
ORGANIZATION AND OPERATIONS
Statia Terminals, Inc. and its Subsidiaries and Affiliates (the Company)
provide crude oil, refined products and other bulk liquids terminaling services
to some of the world's largest producers of crude oil, integrated oil companies,
oil traders and refiners, and petrochemical companies. The Company owns, leases,
and operates three storage and transshipment facilities located at (i) the
island of St. Eustatius, Netherlands Antilles; (ii) Point Tupper, Nova Scotia,
Canada; and (iii) Brownsville, Texas. In connection with its terminaling
business, the Company also provides related value-added services, including
bunkering (the supply of fuel to marine vessels), petroleum product blending and
processing, emergency and spill response, bulk product sales and ship services.
These combined financial statements represent the combination of commonly
owned companies operating in the independent bulk liquid terminaling industry.
The Company includes the following primary entities: Statia Terminals, Inc.
(incorporated in Delaware), Statia Terminals N.V. (incorporated in the
Netherlands Antilles), Statia Terminals Point Tupper, Inc. (incorporated in Nova
Scotia, Canada) and Statia Terminals Southwest, Inc. (incorporated in Texas).
Significant intercompany balances and transactions have been eliminated.
The Company was a wholly owned subsidiary of CBI Industries, Inc. (CBI). On
January 12, 1996, pursuant to the merger agreement dated December 22, 1995 (the
'Merger'), CBI became a wholly owned subsidiary of Praxair, Inc. ('Praxair').
This Merger transaction was reflected in the Company's combined financial
statements as a purchase effective January 1, 1996. Accordingly, the historical
information provided herein, for periods prior to January 1, 1996 ('Pre-Praxair
Acquisition'), is not comparable to subsequent financial information. The fair
value assigned to the Company as of the Merger date was approximately $210
million, excluding bank borrowings, Praxair and CBI intercompany and advance
accounts and the buyout of certain off-balance sheet financing ('Merger Value').
This Merger Value approximates the purchase price of the acquisition of the
Company.
The preliminary allocation of the fair value resulted in the elimination of
$9,925 of previously recorded intangible assets and a writedown of property and
equipment of $85,521 and a corresponding reduction of $95,446 in retained
earnings. The fair value of the Company's other assets and liabilities
approximates their historical carrying value. The allocation of the Merger Value
is based on preliminary estimates of fair value and may be revised at a later
date.
The Merger and the related application of purchase accounting resulted in
changes to the capital structure and the historical basis of various assets of
the Pre-Praxair Acquisition Statia financial statements. The effect of such
changes significantly affects comparability of the financial position and
results of
F-18
<PAGE>
THE FINANCIAL STATEMENTS OF THE COMPANY AND ITS PREDECESSOR
ARE NOT COMPARABLE IN CERTAIN RESPECTS (NOTE 1)
STATIA TERMINALS, INC. AND ITS SUBSIDIARIES AND AFFILIATES
(POST-PRAXAIR ACQUISITION)
NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)
(UNAUDITED)
FOR THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 1995 AND 1996
(DOLLARS IN THOUSANDS)
operations of Pre-Praxair Acquisition Statia and the Post-Praxair Acquisition
Statia. A vertical black line has been used to separate the Pre-Praxair
Acquisition and the Post-Praxair Acquisition information.
2. HURRICANE INSURANCE CLAIMS
During the third and fourth quarters of 1995, the Company's Caribbean
location was adversely impacted by three hurricanes. Operations at the terminal
facility ceased for varying lengths of time from August 28, 1995, to October 3,
1995. Certain terminal assets sustained extensive damage and were repaired. A
few marine items and shoreline installations were damaged or destroyed and were
replaced.
The Company has certain property and liability insurance policies with
various insurance carriers. The claims process related to the hurricane damages
was settled in the third quarter of 1996 for $12,615.
3. DEBT
At September 30, 1996, the Company and Praxair (as co-borrower) had $56,000
outstanding on a debt agreement secured by property and equipment at the
Company's Point Tupper, Canada, facility. A guarantee has been provided by
Praxair. This obligation bears interest at one-, two-, three- or six-month U.S.
prime rates, London Interbank Offer Rates (LIBOR) or Canadian bankers acceptance
rates, plus 50 basis points, at the option of the Company. The weighted average
interest rate for the nine months ended September 30, 1996 was 5.45%.
The Company has three short-term and unsecured revolving credit lines
aggregating $12,500 used to cover working capital needs and letters of credit,
of which $10,000 was outstanding at September 30, 1996. During February, 1996,
these credit lines were renewed until February 28, 1997. These credit lines,
guaranteed by Praxair, bear interest quarterly at one-, two- or three-month
LIBOR plus 35 basis points, or 6.0375% at September 30, 1996.
Cash payments for interest were $2,699 for the nine months ended September
30, 1996.
The proceeds from the Merger, net of debt repayments, lease buy-out and
transaction costs, are expected to approximate $10,000. Accordingly, $10,000 of
Praxair acquisition debt has been pushed down to the Company's financial
statements effective with the Merger.
4. INCOME TAXES
U.S. federal income taxes and certain state taxes are settled quarterly
with CBI/Praxair. In Canada and the Netherlands Antilles, estimated current year
taxes payable are paid monthly. Total cash receipts from Praxair for U.S. income
taxes were $329 for the nine months ended September 30, 1996.
5. RELATED-PARTY TRANSACTIONS
As a wholly-owned subsidiary of Praxair, the Company engages in various
related-party transactions with Praxair, CBI and their affiliates. The unpaid
portion of these transactions is included in payables to Praxair affiliates, net
of any receivables. Advances from Praxair consist principally of funds loaned by
Praxair for disbursements, debt service and dividends offset by the transfer of
the Company's excess cash. Advances from Praxair amounted to $69,162 at
September 30, 1996. The advances from Praxair are non-interest bearing and do
not have a specified maturity date.
F-19
<PAGE>
THE FINANCIAL STATEMENTS OF THE COMPANY AND ITS PREDECESSOR
ARE NOT COMPARABLE IN CERTAIN RESPECTS (NOTE 1)
STATIA TERMINALS, INC. AND ITS SUBSIDIARIES AND AFFILIATES
(POST-PRAXAIR ACQUISITION)
NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)
(UNAUDITED)
FOR THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 1995 AND 1996
(DOLLARS IN THOUSANDS)
The Company regularly contracts with affiliates of CBI for the construction
and expansion of its facilities and for certain repair and maintenance work.
During the nine months ended September 30, 1996, $4,395 was paid to CBI
affiliates for these activities related to its property and equipment. It is not
possible to determine whether the results of operations and financial position
of the Company would be significantly different had the Company contracted with
independent third parties for its construction, expansion, repair and
maintenance needs.
Praxair directly and indirectly allocates certain corporate administrative
services to the Company including certain legal services, risk management, tax
advice and return preparation, employee benefit administration, cash management
and other services. During the nine months ended September 30, 1996, $138 was
paid for these direct and indirect administrative services.
6. COMMITMENTS AND CONTINGENCIES
The Company, CBI and others were defendants in a suit brought during
January 1994, before the District Court of Harris County, Texas, 334th Judicial
District, in which plaintiffs claim damages, primarily for lost profits, as a
result of the Company's alleged failure to lease certain Company owned property
and tankage to the plaintiffs for a proposed vacuum tower project on the Island
of St. Eustatius. The plaintiffs contended that the defendants breached their
alleged contractual obligations and made misrepresentations to the plaintiffs.
In October 1996, the Company, CBI and Praxair settled this claim for $4,600,
subject to final documentation of the settlement agreement.
In connection with the Acquisition, studies were undertaken by and for
Praxair to identify potential environmental, health and safety matters. Certain
matters involving potential environmental costs were identified at the Point
Tupper facility. Praxair has agreed to pay for certain of these costs currently
estimated at approximately $3,000 representing certain investigation,
remediation, compliance and capital costs. To the extent that certain of these
matters exceed this estimate, Praxair has agreed to reimburse the Company for
these future expenditures. Additionally, the Company has identified additional
environmental costs at Point Tupper of approximately $1,000. These future costs
will be expensed as incurred or capitalized as property and equipment. The
Company believes that these environmental costs subject to the foregoing
reimbursements will not have a material adverse effect on the Company's
financial position or results of operations.
The Company complies with environmental regulations in the locations where
it operates and is not aware of any environmental contingent liabilities which
may have a material effect on its financial position and results of operations.
Any environmental expenditures related to cleanup or remediation efforts are
expensed currently when amounts can be reasonably estimated.
F-20
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Managing Directors of
Statia Terminals N.V.:
We have audited the accompanying consolidated balance sheets of Statia
Terminals N.V. (Pre-Praxair Acquisition) as of December 31, 1993, 1994 and 1995,
and the related consolidated statements of income and retained earnings and cash
flows for the years then ended. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Statia
Terminals N.V. (Pre-Praxair Acquisition) as of December 31, 1993, 1994 and 1995,
and the results of operations and cash flows for the years then ended, in
conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Chicago, Illinois
October 24, 1996
F-21
<PAGE>
STATIA TERMINALS N.V.
(PRE-PRAXAIR ACQUISITION)
CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 1993, 1994 AND 1995
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
1993 1994 1995
------- ------- --------
<S> <C> <C> <C>
ASSETS:
Current assets:
Cash and cash equivalents.................................................. $ 148 $ 89 $ 185
Accounts receivable--trade, net............................................ 3,701 5,193 9,246
Other receivables.......................................................... 1,044 610 4,467
Inventory, net............................................................. 7,013 1,959 1,311
Prepaid expenses........................................................... 62 6 66
------- ------- --------
Total current assets.................................................. 11,968 7,857 15,275
Property and equipment, net..................................................... 76,126 85,035 101,905
Investment in subsidiary........................................................ 206 -- --
Other non-current assets........................................................ 9 11 1,605
------- ------- --------
$88,309 $92,903 $118,785
------- ------- --------
------- ------- --------
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
Accounts payable........................................................... $ 2,539 $ 3,439 $ 3,586
Accrued expenses........................................................... 1,508 2,091 1,788
Payable to (receivable from) CBI affiliates................................ (11,999) (652) 13,093
------- ------- --------
Total current liabilities............................................. (7,952) 4,878 18,467
Advances from CBI Industries, Inc............................................... 1,318 -- --
------- ------- --------
Total liabilities..................................................... (6,634) 4,878 18,467
------- ------- --------
Stockholders' equity:
Preferred stock............................................................ 12 12 12
Common stock............................................................... 19,395 19,395 19,395
Additional paid-in capital................................................. 34,364 34,364 34,364
Retained earnings.......................................................... 41,172 34,254 46,547
------- ------- --------
Total stockholders' equity............................................ 94,943 88,025 100,318
------- ------- --------
$88,309 $92,903 $118,785
------- ------- --------
------- ------- --------
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-22
<PAGE>
STATIA TERMINALS N.V.
(PRE-PRAXAIR ACQUISITION)
CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
FOR THE YEARS ENDED DECEMBER 31, 1993, 1994 AND 1995
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
1993 1994 1995
-------- -------- --------
<S> <C> <C> <C>
Revenues..................................................................... $101,458 $114,455 $121,160
Cost of services and products sold......................................... (89,336) (98,269) (104,643)
-------- -------- --------
Gross profit............................................................ 12,122 16,186 16,517
Selling and administrative expenses.......................................... (2,837) (2,389) (3,536)
-------- -------- --------
Income from operations.................................................. 9,285 13,797 12,981
Interest expense............................................................. (42) (2) 70
Other income (expense)....................................................... (338) 568 (477)
-------- -------- --------
Income before income taxes and preferred stock dividends................ 8,905 14,363 12,574
Provision for income taxes................................................... (281) (281) (281)
-------- -------- --------
Net income before preferred stock dividends............................. 8,624 14,082 12,293
Preferred stock dividends.................................................... -- (960) --
-------- -------- --------
Net income.............................................................. 8,624 13,122 12,293
Retained earnings, beginning of year......................................... 32,548 41,172 34,254
Common dividends............................................................. -- (20,040) --
-------- -------- --------
Retained earnings, end of year............................................... $ 41,172 $ 34,254 $ 46,547
-------- -------- --------
-------- -------- --------
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-23
<PAGE>
STATIA TERMINALS N.V.
(PRE-PRAXAIR ACQUISITION)
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1993, 1994 AND 1995
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
1993 1994 1995
------- ------- -------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income before preferred stock dividends.................................... $ 8,624 $14,082 $12,293
Adjustments to reconcile net income to net cash
provided by operating activities--
Depreciation and amortization expense....................................... 5,126 5,526 7,827
Provision for bad debts..................................................... 605 (467) 128
Loss on disposition of property............................................. -- -- 6
Increase in accounts receivable--trade...................................... (355) (1,025) (4,181)
(Increase) decrease in other receivables.................................... 680 434 (3,857)
(Increase) decrease in inventory............................................ (5,139) 5,054 648
(Increase) decrease in prepaid expense...................................... (52) 56 (60)
(Increase) decrease in other non-current assets............................. 9 (2) (1,875)
Increase (decrease) in accounts payable..................................... (32) 900 147
Increase (decrease) in accrued expenses..................................... 304 583 (303)
Increase (decrease) in payable to CBI affiliates............................ 606 11,347 13,745
Decrease in deferred income................................................. (6) -- --
------- ------- -------
Net cash provided by operating activities................................. 10,370 36,488 24,518
------- ------- -------
Cash flows from investing activities:
Purchase of property and equipment............................................. (8,756) (14,435) (24,422)
Investment in subsidiary....................................................... 41 206 --
------- ------- -------
Net cash used in investing activities..................................... (8,715) (14,229) (24,422)
Cash flows from financing activities:
Decrease in advances from CBI.................................................. (1,651) (1,318) --
Dividends paid to affiliates................................................... -- (21,000) --
------- ------- -------
Net cash used in financing activities..................................... (1,651) (22,318) --
------- ------- -------
Increase (decrease) in cash and
cash equivalents............................................................... 4 (59) 96
Cash and cash equivalents, beginning balance..................................... 144 148 89
------- ------- -------
Cash and cash equivalents, ending balance........................................ $ 148 $ 89 $ 185
------- ------- -------
------- ------- -------
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-24
<PAGE>
STATIA TERMINALS N.V.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1993, 1994 AND 1995
(DOLLARS IN THOUSANDS)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION AND OPERATIONS
Statia Terminals N.V. (the Company), a Netherlands Antilles corporation,
operates a petroleum storage and blending terminal with a capacity of 11.3
million barrels on the island of St. Eustatius. The Company also provides value
added services including bunkering (the supply of fuels and lube oils to marine
vessels), processing, emergency and spill response, and bulk product sales.
These combined financial statements include the accounts of the Company and
those of its wholly owned subsidiary, Statia Laboratory Services N.V.
Intercompany balances and transactions are eliminated in consolidation.
The Company uses a fixed exchange rate to convert Netherlands Antilles
guilders to United States dollars at Nafl 1.78 to U.S.$1.00. These consolidated
financial statements are presented in United States dollars.
The Company is affiliated through common ownership with other terminaling
companies bearing the Statia name and is a wholly owned subsidiary of CBI
Industries, Inc. (CBI), which has other subsidiaries operating in the
construction of metal plate structures, contracting services, industrial gases
and other investments. On January 12, 1996, pursuant to the merger agreement
dated December 22, 1995, CBI became a wholly owned subsidiary of Praxair, Inc.
USE OF ESTIMATES
These consolidated financial statements have been prepared in conformity
with generally accepted accounting principles which require management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities. Management is also required to make judgments regarding disclosure
of contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting periods.
Actual results could differ from those estimates.
REVENUE RECOGNITION
Revenues from storage and throughput operations are recognized ratably as
the services are provided. Revenues and commissions from bunkering services,
vessel services and product sales are recognized at the time of delivery of the
service or product.
PROPERTY AND EQUIPMENT
Property and equipment are stated at cost less accumulated depreciation.
Depreciation is computed using the straight-line method over the estimated
useful lives of the respective assets. Additions to property and equipment and
facility improvements are capitalized. Repair and maintenance expenditures which
do not materially increase asset values or extend useful lives are expensed.
The Company expects there will be no material effect of its financial
position or results of operations resulting from the adoption, effective January
1, 1996, of SFAS No. 121, Accounting for the Impairment of Long-Lived Assets and
for Long-Lived Assets to be Disposed of.
The Company determines its tax position and deferred tax balances in
compliance with SFAS No. 109, 'Accounting for Income Taxes.' Under this
approach, the provision for income taxes represents income taxes paid or payable
for the current year adjusted for the change in deferred taxes during the year.
Deferred income taxes reflect the net tax effects of temporary differences
between the financial statement
F-25
<PAGE>
STATIA TERMINALS N.V.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
DECEMBER 31, 1993, 1994 AND 1995
(DOLLARS IN THOUSANDS)
bases and the tax bases of assets and liabilities and are adjusted for changes
in tax rates and tax laws when changes are enacted.
INCOME TAXES
The Company determines its tax position and deferred tax balances in
compliance with SFAS No. 109, 'Accounting for Income Taxes.' Under this
approach, the provision for income taxes represents income taxes paid or payable
for the current year adjusted for the change in deferred taxes during the year.
Deferred income taxes reflect the net tax effects of temporary differences
between the financial statement bases and the tax bases of assets and
liabilities and are adjusted for changes in tax rates and tax laws when changes
are enacted.
On June 1, 1989, the governments of the Netherlands Antilles and St.
Eustatius approved a 12-year Free Zone Agreement (the Agreement) retroactive to
January 1, 1989, and concluding December 31, 2000. The Agreement requires the
Company to pay a 2% rate on taxable income instead of profit tax, or a minimum
annual payment of 500,000 Netherlands Antilles guilders (U.S. $281). The
Agreement further provides that any amounts paid in order to meet the minimum
annual payment will be available to offset future tax liabilities under the
Agreement to the extent that the minimum annual payment is greater than 2% of
taxable income. At December 31, 1993, 1994 and 1995, the amount available to
offset future tax liability under the Agreement is approximately $558, $528 and
$554.
CASH AND CASH EQUIVALENTS
The Company's excess cash is either swept by CBI to fund or cover current
advances or invested in short-term, highly liquid investments with maturities of
three months or less. Such short-term investments are carried at cost, which
approximates market, and are classified as cash and cash equivalents.
INVENTORY
Inventory of oil products is valued at the lower of weighted average cost
or market.
SIGNIFICANT CUSTOMERS
The Company's revenues from a state-owned oil producer constituted
approximately 7.1% of the Company's total 1995 revenues. No other customer
accounted for more than 5% of the Company's 1995 revenues. Although the Company
has a long-standing relationship and a long-term contract with one customer, if
the long-term contract were not renewed at the end of the term, in the year
1999, or if the Company otherwise lost any significant portion of its revenues
from this customer, such loss could have a material adverse effect on the
business and financial condition of the Company. The Company also has long-term
contracts with certain other key customers and there can be no assurance that
these contracts will be renewed at the end of their terms.
2. HURRICANE INSURANCE CLAIMS
During the third quarter of 1995, the Company's Caribbean location was
adversely impacted by three hurricanes. Operations at the terminal facility
ceased for varying lengths of time from August 28, 1995, to October 3, 1995.
Certain terminal assets sustained extensive damage and are presently being
repaired. Several marine items and shoreline installations were damaged or
destroyed and are being repaired or replaced.
The Company has certain property and liability insurance policies with
various insurance carriers. The claims process related to the hurricane damages
has been initiated and is continuing. As of December 31,
F-26
<PAGE>
STATIA TERMINALS N.V.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
DECEMBER 31, 1993, 1994 AND 1995
(DOLLARS IN THOUSANDS)
1995, the Company had incurred $8,121 of expenditures which it believes are
subject to hurricane insurance coverage and had received advances from its
insurance carriers amounting to $3,110. The insurance claim receivable of $4,611
is included in other receivables as of December 31, 1995. Deductibles under the
insurance policies aggregating $400 have been expensed during 1995. It is the
intention of management to incur additional expenditures related to the
replacement or repair of items damaged or destroyed. At the present time, the
amount of proceeds to be recovered under insurance policies is uncertain.
However, both current and future expenditures which represent facility
improvements, if unreimbursed by the Company's insurers, will be capitalized.
The Company has certain property and liability insurance policies with
various insurance carriers. The claims process related to the hurricane damages
was settled in the third quarter of 1996 for $12,615.
3. PROPERTY AND EQUIPMENT
At December 31, 1993, 1994 and 1995, property and equipment consisted of
the following:
<TABLE>
<CAPTION>
ESTIMATED
1993 1994 1995 USEFUL LIFE
------- ------- -------- ------------
<S> <C> <C> <C> <C>
Land............................................................. $ 396 $ 396 $ 396 --
Land improvements................................................ 1,106 1,106 1,331 5-20 years
Buildings and improvements....................................... 1,693 1,708 1,933 20-40 years
Plant machinery and terminals.................................... 115,908 130,233 154,329 4-40 years
Field and office equipment....................................... 999 1,094 853 3-15 years
------- ------- --------
Total property and equipment, at cost.......................... 120,102 134,537 158,842
Less accumulated depreciation.................................... (43,976) (49,502) (56,937)
------- ------- --------
Property and equipment, net................................. $76,126 $85,035 $101,905
------- ------- --------
------- ------- --------
</TABLE>
During the first quarter of 1995, the Company completed the construction
of, and began leasing and operating, a 5.0 million barrel crude oil terminal
with a single point mooring facility (see Note 7).
Effective January 1, 1995, the Company extended the depreciable lives of
its tanks and jetty from 20 and 15 years to 40 and 25 years, respectively. This
change resulted in a corresponding reduction of depreciation expense of $2,681.
During construction of its facilities, the Company allocates interest and
certain overhead charges to the cost of the facility constructed. During 1993,
1994 and 1995 interest capitalized to constructed facilities amounted to $0, $0
and $71, respectively.
4. DEBT
The Company has a short-term and unsecured revolving credit line of $2,500
used to cover letters of credit, of which $0 was outstanding at December 31,
1994 and 1995. This credit line, guaranteed by CBI, bears interest quarterly at
one-, two- or three-month London Interbank Offer Rates (LIBOR) plus 50 basis
points.
5. SHAREHOLDERS' EQUITY
On January 18, 1991, Statia Terminals N.V. issued 12,000 shares of
preferred stock with a par value of $1.00 per share to an affiliate of CBI in
consideration for an investment of $12.0 million. Each share of this preferred
stock entitles the holder to one vote on matters put forth for shareholder
approval. Preferred share dividends are not accrued until declared by Statia
Terminals N.V. The preferred shares are non-cumulative and non-participating and
dividends are paid at a rate of 8% per annum when declared. Preferred
shareholders have preference upon liquidation over common shareholders.
F-27
<PAGE>
STATIA TERMINALS N.V.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
DECEMBER 31, 1993, 1994 AND 1995
(DOLLARS IN THOUSANDS)
On January 10, 1996, Statia Terminals N.V. declared preferred dividends of
$1,000 and common dividends of $24,000, both payable on January 11, 1996, to
shareholders of record on January 10, 1996. All dividends were paid to
affiliates of CBI.
6. RELATED-PARTY TRANSACTIONS
CBI, the ultimate sole stockholder of the Company's common stock,
periodically advances working capital funds to the Company through an affiliate,
Statia Terminals, Inc.
The Company has regularly contracted with affiliates of CBI for the
construction and expansion of its facilities and for certain repair and
maintenance work. During 1995, $16,569 was paid to CBI affiliates for these
activities related to its property and equipment. It is not possible to
determine whether the results of operations and financial position of the
Company would be significantly different had the Company contracted with
independent third parties for its construction, expansion, repair and
maintenance needs.
Statia Terminals, Inc. directly and indirectly allocates certain corporate
administrative services to the Company, including certain legal services, risk
management, tax advice and return preparation, employee benefit administration,
cash management and other services, some of which are ultimately provided by
CBI. During 1995, $3,536 was paid to Statia Terminals, Inc. for these direct and
indirect administrative services.
Due from (to) affiliates included the following at December 31, 1993, 1994
and 1995:
<TABLE>
<CAPTION>
1993 1994 1995
--------------- ------------ ---------------
DUE DUE DUE DUE DUE
AFFILIATE FROM TO FROM TO FROM DUE TO
- ------------------------------------------------------------ ------- ---- ---- ---- ---- -------
<S> <C> <C> <C> <C> <C> <C>
Statia Terminals Southwest, Inc. (STSW)..................... $ 4,511 $ 0 $ 0 $160 $125 $ 0
StatiaTerminals, Inc........................................ 7,749 0 0 6 0 13,604
Bicen Development N.V....................................... 516 0 464 0 410 0
Others...................................................... 0 777 354 0 0 24
------- ---- ---- ---- ---- -------
$12,776 $777 $818 $166 $535 $13,628
------- ---- ---- ---- ---- -------
------- ---- ---- ---- ---- -------
</TABLE>
7. COMMITMENTS AND CONTINGENCIES
The Company, CBI and others are defendants in a suit brought during January
1994, before the District Court of Harris County, Texas, 334th Judicial
District, in which plaintiffs claim damages, primarily for lost profits, as a
result of the Company's alleged failure to lease certain Company owned property
and tankage to the plaintiffs for a proposed vacuum tower project on the island
of St. Eustatius. The plaintiffs contend that the defendants breached their
alleged contractual obligations and made misrepresentations to the plaintiffs.
The Company believes the allegations made are without merit; therefore, the
Company intends to vigorously contest the claims through numerous legal and
factual defenses. While no estimate can reasonably be made of any ultimate
liability at this time, the Company believes the final outcome will not have a
material adverse effect on the Company's financial position and results of
operations.
The Company is involved in various other claims and litigation arising from
the conduct of its business. Based upon analysis of these legal matters and
discussions with legal counsel, the Company believes that the ultimate outcome
of these matters will not have a material adverse impact on the Company's
financial position and results of operations.
The Company complies with environmental regulations in the locations where
it operates and is not aware of any environmental contingent liabilities which
may have a material effect on its financial position and results of operations.
Any environmental expenditures related to cleanup or remediation efforts are
expensed when amounts can be reasonably estimated.
F-28
<PAGE>
STATIA TERMINALS N.V.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
DECEMBER 31, 1993, 1994 AND 1995
(DOLLARS IN THOUSANDS)
The Company is subject to a collective bargaining agreement covering
approximately 53% of its work force as of December 31, 1995. The collective
bargaining agreement expires in May 1996.
8. LEASES
The Company leases marine equipment and has a commitment to lease certain
facilities under operating leases. Minimum future rentals on operating leases
for the next five years are as follows:
<TABLE>
<S> <C> <C>
Year ending December 31,
1996..................... $10,150
1997..................... 10,096
1998..................... 9,924
1999..................... 7,350
2000..................... 6,542
-------
$44,062
-------
-------
</TABLE>
Rent expense on operating leases amounted to approximately $2,623, $3,040
and $4,405 for the years ended December 31, 1993, 1994 and 1995, respectively.
On November 17, 1993, the Company, through a subsidiary, entered into an
agreement with a third party financier (First Salute Leasing, L.P.) pursuant to
which a portion of its land on St. Eustatius was leased to this third party for
the purpose of construction and operation of five million barrels of crude oil
storage tanks and a single point mooring system. The Company acted as agent for
the third party with regard to the construction of the facilities. The Company
leases the facility from the third party for a minimum period of five years. The
aggregate construction cost incurred for these leased assets totaled $88,513.
The facility became operational in the first quarter of 1995 and the applicable
portion of the required rentals are included in rent expense and future rental
commitments above.
At the completion of the initial five-year term, the Company has the option
to extend the lease, purchase the facility from the lessor, or arrange for the
leased properties to be sold to a third party. In the event of purchase or sale
of these properties, the Company is obligated to the lessor for any shortfall
between the purchase or sales price and the lease residual value guarantee. At
December 31, 1995, the maximum amount of the residual value guarantee related to
assets under this lease totaled $78,777.
F-29
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors of
Statia Terminals Point Tupper Inc.:
We have audited the accompanying consolidated balance sheets of Statia
Terminals Point Tupper, Inc. (Pre-Praxair Acquisition) as of December 31, 1993,
1994 and 1995, and the related consolidated statements of income and retained
earnings and cash flows for the years then ended. These financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Statia
Terminals Point Tupper Inc. (Pre-Praxair Acquisition) as of December 31, 1993,
1994 and 1995, and the results of operations and cash flows for the years then
ended, in conformity with generally accepted accounting principles.
Arthur Andersen LLP
Chicago, Illinois
October 24, 1996
F-30
<PAGE>
STATIA TERMINALS POINT TUPPER, INC.
(PRE-PRAXAIR ACQUISITION)
CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 1993, 1994 AND 1995
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
1993 1994 1995
------- ------- -------
<S> <C> <C> <C>
ASSETS:
Current assets:
Cash and cash equivalents...................................................... $ 1,169 $ 345 $ 1,207
Accounts receivable--
Trade, net.................................................................. 608 746 196
Other receivables........................................................... 1,726 2,930 2,241
Inventory, net................................................................. -- 25 575
Prepaid expenses............................................................... 238 17 62
------- ------- -------
Total current assets...................................................... 3,741 4,063 4,281
Property and equipment, net...................................................... 65,020 71,507 79,156
Intangible assets, net........................................................... 11,288 11,732 11,105
Other non-current assets......................................................... 3,054 2,405 1,713
------- ------- -------
$83,103 $89,707 $96,255
------- ------- -------
------- ------- -------
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
Accounts payable............................................................... $ 4,035 $ 975 $ 698
Accrued expenses............................................................... 2,088 1,482 1,959
Current portion of long-term debt.............................................. 283 8,050 14,800
Payable to (receivable from) CBI affiliates.................................... (244) (233) 704
------- ------- -------
Total current liabilities................................................. 6,162 10,274 18,161
Long-term debt, net of current maturities........................................ 59,843 56,400 51,600
------- ------- -------
Total liabilities......................................................... 66,005 66,674 69,761
------- ------- -------
Stockholders' equity:
Preferred stock................................................................ 17,819 24,664 25,196
Common stock................................................................... 1 1 2
Additional paid-in capital..................................................... -- 1,857 11,324
Retained earnings (deficit).................................................... (722) (3,489) (10,028)
------- ------- -------
Total stockholders' equity................................................ 17,098 23,033 26,494
------- ------- -------
$83,103 $89,707 $96,255
------- ------- -------
------- ------- -------
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-31
<PAGE>
STATIA TERMINALS POINT TUPPER, INC.
(PRE-PRAXAIR ACQUISITION)
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
AND RETAINED EARNINGS (DEFICIT)
FOR THE YEARS ENDED DECEMBER 31, 1993, 1994 AND 1995
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
1993 1994 1995
------- ------- --------
<S> <C> <C> <C>
Revenues......................................................................... $ 2,716 $12,024 $ 11,143
Cost of services and products sold............................................... (2,396) (9,079) (9,370)
------- ------- --------
Gross profit................................................................... 320 2,945 1,773
Selling and administrative expenses.............................................. (11) (1,700) (2,382)
------- ------- --------
Income (loss) from operations.................................................. 309 1,245 (609)
Interest expense................................................................. (684) (3,112) (4,548)
Other income (expense)........................................................... 430 260 197
------- ------- --------
Income (loss) before income taxes and preferred stock dividends................ 55 (1,607) (4,960)
Provision for income taxes....................................................... 114 156 155
------- ------- --------
Net income (loss) before preferred stock dividends............................. (59) (1,763) (5,115)
Preferred stock dividends........................................................ 110 1,004 1,424
------- ------- --------
Net income (loss).............................................................. (169) (2,767) (6,539)
Retained earnings (deficit), beginning of year................................... (553) (722) (3,489)
Common dividends................................................................. -- -- --
------- ------- --------
Retained earnings (deficit), end of year......................................... $ (722) $(3,489) $(10,028)
------- ------- --------
------- ------- --------
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-32
<PAGE>
STATIA TERMINALS POINT TUPPER, INC.
(PRE-PRAXAIR ACQUISITION)
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1993, 1994 AND 1995
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
1993 1994 1995
-------- -------- -------
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss before preferred stock dividends.................................... $ (59) $ (1,763) $(5,115)
Adjustments to reconcile net income to net cash provided by operating
activities--
Depreciation and amortization expense..................................... 763 4,217 3,328
Provision for bad debts................................................... -- 7 34
(Increase) decrease in accounts receivable--trade......................... 392 (145) 516
(Increase) decrease in other receivables.................................. (1,231) (1,204) 689
Increase in inventory..................................................... -- (25) (550)
(Increase) decrease in prepaid expense.................................... 103 221 (45)
Increase in intangible assets............................................. (3,282) (993) --
(Increase) decrease in other non-current assets........................... (3,663) (9) 9
Increase (decrease) in accounts payable................................... (11,315) (3,060) (277)
Increase (decrease) in accrued expenses................................... 1,079 (606) 477
Increase (decrease) in payable to CBI affiliates.......................... (244) 11 937
-------- -------- -------
Net cash provided by (used in) operating activities..................... (17,457) (3,349) 3
-------- -------- -------
Cash flows from investing activities:
Sale of property & equipment................................................. (6,988) (9,497) (9,667)
-------- -------- -------
Net cash used in investing activities................................... (6,988) (9,497) (9,667)
-------- -------- -------
Cash flows from financing activities:
Sale of common and preferred stock........................................... 6,200 8,702 10,000
Bank borrowings, net of repayments........................................... 18,966 4,324 1,950
Dividends paid to affiliates................................................. (110) (1,004) (1,424)
-------- -------- -------
Net cash provided by (used in) financing activities..................... 25,056 12,022 10,526
-------- -------- -------
Increase (decrease) in cash and cash equivalents............................... 611 (824) 862
Cash and cash equivalents, beginning balance................................... 558 1,169 345
-------- -------- -------
Cash and cash equivalents, ending balance...................................... $ 1,169 $ 345 $ 1,207
-------- -------- -------
-------- -------- -------
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-33
<PAGE>
STATIA TERMINALS POINT TUPPER, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(PRE-PRAXAIR ACQUISITION)
DECEMBER 31, 1993, 1994 AND 1995
(DOLLARS IN THOUSANDS)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION AND OPERATIONS
Statia Terminals Point Tupper, Inc. provides crude oil, refined products
and other bulk liquids terminaling services to some of the largest integrated
oil companies, oil traders and refiners, and petrochemical companies. This
company owns and operates a storage, petroleum product blending and processing
and transshipment facility located at Point Tupper, Nova Scotia, Canada. In
connection with the Statia Terminals Point Tupper, Inc. terminaling business,
Point Tupper Marine Services Limited provides related value-added services at
the same transshipment facility in Point Tupper, Nova Scotia, Canada, including
bunkering (the supply of fuel to marine vessels), emergency and spill response
and ship services.
These consolidated financial statements represent the consolidation of
Statia Terminals Point Tupper, Inc. and Point Tupper Marine Services Limited
(the Company). Both companies are wholly owned subsidiaries of Statia Terminals
Inc. (STI). Significant intercompany balances and transactions have been
eliminated.
USE OF ESTIMATES
These consolidated financial statements have been prepared in conformity
with generally accepted accounting principles as promulgated in the United
States which require management to make estimates and assumptions that affect
the reported amounts of assets and liabilities. Management is also required to
make judgments regarding disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues and
expenses during the reporting periods. Actual results could differ from those
estimates.
REVENUE RECOGNITION
Revenues from storage and throughput operations are recognized ratably as
the services are provided. Revenues and commissions from bunkering services,
vessel services and product sales are recognized at the time of delivery of the
service or product.
FOREIGN CURRENCY TRANSLATION AND EXCHANGE
The consolidated statements include the financial information of foreign
companies translated in accordance with Statement of Financial Accounting
Standards (SFAS) No. 52 'Foreign Currency Translation.' The functional currency
for the Company is the U.S. dollar.
CASH AND CASH EQUIVALENTS
The Company's excess cash is invested in short-term, highly liquid
investments with maturities of three months or less. Such short-term investments
are carried at cost, which approximates market, and are classified as cash and
cash equivalents.
PROPERTY AND EQUIPMENT
Property and equipment are stated at cost less accumulated depreciation.
Depreciation expense is computed using the straight-line method over the
estimated useful lives of the respective assets. Additions to property and
equipment, improvements and major renewals are capitalized. Repair and
maintenance expenditures which do not materially increase asset values or extend
useful lives are expensed.
F-34
<PAGE>
STATIA TERMINALS POINT TUPPER, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(PRE-PRAXAIR ACQUISITION)
DECEMBER 31, 1993, 1994 AND 1995
(DOLLARS IN THOUSANDS)
The Company expects there will be no material effect of its financial
position or results of operations resulting from the adoption, effective January
1, 1996, of SFAS No. 121, Accounting for the Impairment of Long-Lived Assets and
for Long-Lived Assets to be Disposed of.
INTANGIBLE ASSETS
Intangible assets include goodwill, deferred financing costs,
organizational costs and preoperating expenditures. The excess of cost over the
fair value of tangible net assets acquired has been capitalized as goodwill and
is being amortized on a straight-line basis over the periods of expected
benefit, which do not exceed 40 years. The Company's costs related to
establishing debt obligations are amortized ratably over the life of the
underlying obligation. Organizational costs and preoperating expenditures are
amortized evenly over five-year periods. Amortization expense was $166 in 1993,
$1,209 in 1994 and $1,311 in 1995 related to these intangible assets.
Accumulated amortization was $166, $1,375, and $2,686 at December 31, 1993, 1994
and 1995, respectively.
INCOME TAXES
The Company determines its tax provision and deferred tax balances in
compliance with SFAS No. 109, 'Accounting for Income Taxes.' Under this
approach, the provision for income taxes represents income taxes paid or payable
for the current year adjusted for the change in deferred taxes during the year.
Deferred income taxes reflect the net tax effects of temporary differences
between the financial statement bases and the tax bases of assets and
liabilities and are adjusted for changes in tax rates and tax laws when changes
are enacted.
SIGNIFICANT CUSTOMERS
The Company's revenues from a refiner and two petroleum product brokers
constituted approximately 61.6%, 14.6% and 6.2%, respectively, of the Company's
total 1995 revenues. In addition, approximately 7.6% the Company's 1995 revenues
were derived from parties unaffiliated with the above mentioned customers and
were generated by the movement of such products through the terminals. No other
customer accounted for more than 5% of the Company's 1995 revenues directly or
indirectly. Although the Company has a long-standing relationship and a
long-term contract with one customer, if the long-term contract were not renewed
at the end of the term, in the year 2000, or if the Company otherwise lost any
significant portion of its revenues from this customer, such loss could have a
material adverse effect on the business and financial condition of the Company.
The Company also has long-term contracts with certain other key customers and
there can be no assurance that these contracts will be renewed at the end of
their terms.
F-35
<PAGE>
STATIA TERMINALS POINT TUPPER, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(PRE-PRAXAIR ACQUISITION)
DECEMBER 31, 1993, 1994 AND 1995
(DOLLARS IN THOUSANDS)
2. PROPERTY AND EQUIPMENT
At December 31, 1993, 1994 and 1995, property and equipment consisted of
the following:
<TABLE>
<CAPTION>
1993 1994 1995 USEFUL LIFE
------- ------- ------- ------------
<S> <C> <C> <C> <C>
Land.............................................................. $ 278 $ 270 $ 273 --
Land improvements................................................. -- -- 2 5-20 years
Buildings and improvements........................................ 538 567 569 20-40 years
Plant machinery and terminals..................................... 64,767 72,171 81,826 4-40 years
Field and office equipment........................................ 34 2,106 2,117 3-15 years
------- ------- -------
Total property and equipment, at cost........................... 65,617 75,114 84,781
Less accumulated depreciation..................................... (597) (3,607) (5,625)
------- ------- -------
Property and equipment, net..................................... $65,020 $71,507 $79,156
------- ------- -------
------- ------- -------
</TABLE>
Effective January 1, 1995, the Company extended the depreciable lives of
certain marine installations and tanks from 15 and 20 years to 25 and 40 years,
respectively. This change resulted in a corresponding reduction of depreciation
expense of $1,662 for 1995.
During construction of its facilities, the Company allocates interest and
certain overhead charges to the cost of the constructed facility. During 1993,
1994 and 1995, interest capitalized to constructed facilities amounted to $352,
$716 and $843, respectively.
3. DEBT
At December 31, 1993, 1994 and 1995, the Company had $54,000, $60,000 and
$56,400, respectively, outstanding on a long-term debt agreement secured by
property and equipment at the facility. A guarantee has been provided by CBI. At
December 31, 1994 and 1995, $3,600 and $4,800, respectively, was currently
payable. This obligation bears interest at one-, two-, three- or six-month U.S.
prime rates, London Interbank Offer Rates (LIBOR) or Canadian bankers acceptance
rates, plus 75 basis points, at the option of the Company. The weighted average
interest rates for the year were 4.8%, 6.7% and 6.7% in 1993, 1994 and 1995,
respectively. The debt agreement requires the Company and CBI to maintain
various debt covenants.
The Company has two short-term and unsecured revolving credit lines
aggregating $10,000 used to cover working capital needs and letters of credit,
of which $4,450 and $10,000 was outstanding at December 31, 1994 and 1995,
respectively. These credit lines, guaranteed by CBI, bear interest quarterly at
one-, two- or three-month LIBOR plus 50 basis points, or 6.5% and 6.3% at
December 31, 1994 and 1995, respectively. During February, 1996, these credit
lines were renewed until February 28, 1997, at LIBOR plus 35 basis points and
guaranteed by Praxair, Inc.
The Company also had two long-term loans outstanding with Canadian
government agencies at December 31, 1993 totaling U.S. $6,409. Of this total
$283 was currently payable. The two loans were paid in full during 1994. The
weighted average year-end interest rate on these loans as of December 31, 1993
was 9.7%.
Minimum annual principal payments due on revolving credit lines and
long-term debt during the years ending 1996 through 2000 are $14,800; $5,700;
$6,000; $6,900 and $33,000; respectively.
Cash payments for interest were $228, $2,951 and $4,494 for 1993, 1994 and
1995, respectively.
F-36
<PAGE>
STATIA TERMINALS POINT TUPPER, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(PRE-PRAXAIR ACQUISITION)
DECEMBER 31, 1993, 1994 AND 1995
(DOLLARS IN THOUSANDS)
In 1993, the Company entered into an interest rate swap agreement,
guaranteed by CBI, based on a notional amount of $20,000 whereby the Company
makes semiannual interest payments at an annual rate of 5.91% through October
21, 1996, in exchange for the right to receive interest payments at floating
rates (3.3750%, 5.8125% and 5.8750% at December 31, 1993, 1994 and 1995,
respectively) semiannually through October 21, 1996. This swap agreement is
extendible for two additional years at the option of the Company. The fair
market value of the interest rate swap and related option agreement was $1 as of
December 31, 1995, which was estimated based upon the net amount that would be
paid to terminate the agreement, utilizing quoted prices for comparable
contracts and discounted cash flows. The counterparty to the interest rate swap
agreement is a major financial institution, which the Company periodically
evaluates as to its creditworthiness. The Company has never experienced, nor
does it anticipate, nonperformance.
4. SHAREHOLDERS' EQUITY
On October 22, 1993, and March 15, 1994, Statia Terminals Point Tupper,
Inc. issued 14,689 shares and 10,311 shares, respectively, of first preferred
stock to a Canadian affiliate of CBI in exchange for an aggregate contribution
of Cdn$25,000 (U.S.$18,577). The first preferred stock is non-voting, cumulative
and redeemable. The preferred dividends are accrued and paid quarterly at a rate
of .25% above the preferred shareholder's borrowing rate as established by the
shareholder's lending institution. During 1993, 1994 and 1995, Statia Terminals
Point Tupper, Inc. paid dividends of $110, $1,004 and $1,424, respectively, with
average dividend rates of 5.11%, 5.99% and 7.81%, respectively. First preferred
shareholders have preference upon liquidation over all other classes of
preferred shareholders as well as common shareholders.
5. INCOME TAXES
In Canada, estimated Large Corporation taxes are paid monthly.
The Company has incurred certain costs which are accounted for differently
for financial reporting and Canadian taxation purposes. Timing differences in
the recognition of expenses occur primarily as a result of differing provisions
for depreciating property and equipment and amortization of goodwill, deferred
financing costs, organizational costs and preoperating expenditures. Certain
expenditures are not deductible for taxation purposes. In addition, the Company
has incurred taxable losses which will be available for utilization over a seven
year period to offset future taxable income. Net operating loss carryforwards
available to offset future Canadian taxable income were U.S. $4,834, $4,205 and
$7,967 as of December 31, 1993, 1994 and 1995, respectively.
6. RELATED-PARTY TRANSACTIONS
As a wholly owned subsidiary of STI, the Company engages in various
related-party transactions with STI and its affiliates. The unpaid portion of
these transactions is included in intercompany balances.
STI allocates certain corporate administrative services to the Company
including certain legal services, risk management, tax advice and return
preparation, employee benefit administration, cash management and other
services. During 1993, 1994 and 1995, $11, $1,700 and $2,382, respectively, was
paid for these direct and indirect administrative services.
7. COMMITMENTS AND CONTINGENCIES
The Company is involved in various other claims and litigation arising from
the conduct of its business. Based upon analysis of legal matters and
discussions with legal counsel, the Company believes that the ultimate outcome
of these matters will not have a material adverse impact on the Company's
financial position and results of operations.
F-37
<PAGE>
STATIA TERMINALS POINT TUPPER, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(PRE-PRAXAIR ACQUISITION)
DECEMBER 31, 1993, 1994 AND 1995
(DOLLARS IN THOUSANDS)
In connection with the Acquisition, studies were undertaken by and for
Praxair to identify potential environmental, health and safety matters. Certain
matters involving potential environmental costs were identified at the Point
Tupper facility. Praxair has agreed to pay for certain of these costs currently
estimated at approximately $3,000 representing certain investigation,
remediation, compliance and capital costs. To the extent that certain of these
matters exceed this estimate, Praxair has agreed to reimburse the Company for
these future expenditures. Additionally, the Company has identified additional
environmental costs at Point Tupper of approximately $1,000. These future costs
will be expensed as incurred or capitalized as property and equipment. The
Company believes that these environmental costs subject to the foregoing
reimbursements will not have a material adverse effect on the Company's
financial position or results of operations.
The Company is subject to a collective bargaining agreement involving 51.1%
of its work force as of December 31, 1995. The agreement in effect for Statia
Terminals Point Tupper, Inc. expires in September, 1998.
F-38
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Shareholder of Statia Terminals International N.V.:
We have audited the accompanying balance sheet of Statia Terminals International
N.V. (a Netherlands Antilles corporation) as of September 4, 1996. This balance
sheet is the responsibility of the Company's management. Our responsibility is
to express an opinion on this balance sheet based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the balance sheet is free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the balance sheet. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion the balance sheet referred to above presents fairly, in all
material respects, the financial position of Statia Terminals International N.V.
as of September 4, 1996, in conformity with generally accepted accounting
principles.
ARTHUR ANDERSEN LLP
Chicago, Illinois
December 20, 1996
F-39
<PAGE>
STATIA TERMINALS INTERNATIONAL N.V.
BALANCE SHEET
AS OF SEPTEMBER 4, 1996
(IN U.S. DOLLARS)
<TABLE>
STOCKHOLDERS' EQUITY:
<S> <C>
Common Stock ($1 par value, 30,000 shares authorized;
6,000 shares issued and outstanding)................................................................... $6,000
Subscription Receivable.................................................................................. (6,000)
Total Stockholders' Equity.......................................................................... $0
------
</TABLE>
The accompanying notes are an integral part of this balance sheet.
F-40
<PAGE>
STATIA TERMINALS INTERNATIONAL N.V.
NOTES TO BALANCE SHEET
SEPTEMBER 4, 1996
(IN U.S. DOLLARS)
1. ORGANIZATION
On September 4, 1996, Statia Terminals International N.V. (the Company) was
incorporated under the laws of the Netherlands Antilles.
2. SIGNIFICANT ACCOUNTING POLICIES
The Company employs accounting policies that are in accordance with generally
accepted accounting policies in the United States. The functional currency for
the Company is the U.S. dollar.
3. SUBSEQUENT EVENT
On November 27, 1996, in connection with the private placement of the 11 3/4%
First Mortgage Notes, the Company acquired Statia Terminals Inc. and its
subsidiaries and affiliates.
F-41
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Shareholder of Statia Terminals Canada, Incorporated:
We have audited the accompanying balance sheet of Statia Terminals Canada,
Incorporated (a Nova Scotia, Canada corporation) as of August 15, 1996. This
balance sheet is the responsibility of the Company's management. Our
responsibility is to express an opinion on this balance sheet based on our
audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the balance sheet is free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the balance sheet. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion the balance sheet referred to above presents fairly, in all
material respects, the financial position of Statia Terminals Canada,
Incorporated as of August 15, 1996, in conformity with generally accepted
accounting principles.
ARTHUR ANDERSEN LLP
Chicago, Illinois
December 20, 1996
F-42
<PAGE>
STATIA TERMINALS CANADA, INCORPORATED
BALANCE SHEET
AS OF AUGUST 15, 1996
(IN U.S. DOLLARS)
<TABLE>
<S> <C>
ASSETS:
Cash......................................................................................................... $ 1
Total Assets............................................................................................ $ 1
---
STOCKHOLDERS' EQUITY:
Common Stock (no par value, 1,000,000 shares authorized;
1 share issued and outstanding)............................................................................ $ 1
---
Total Stockholders' Equity.............................................................................. $ 1
---
</TABLE>
The accompanying notes are an integral part of this balance sheet.
F-43
<PAGE>
STATIA TERMINALS CANADA, INTERNATIONAL
NOTES TO BALANCE SHEET
AUGUST 15, 1996
(IN U.S. DOLLARS)
1. ORGANIZATION
On August 15, 1996, Statia Terminals Canada, Incorporated (the Company) was
incorporated under the laws of Nova Scotia, Canada.
2. SIGNIFICANT ACCOUNTING POLICIES
The Company employs accounting policies that are in accordance with generally
accepted accounting policies in the United States. The functional currency for
the Company is the U.S. dollar. The translation from Canadian dollars to U.S.
dollars is performed for balance sheet accounts using current exchange rates in
effect at the balance sheet date.
3. SUBSEQUENT EVENT
On November 27, 1996, in connection with the private placement of the 11 3/4%
First Mortgage Notes, the Company acquired Statia Terminals Point Tupper, Inc.
and its subsidiary.
F-44
<PAGE>
ANNEX A
REPLACEMENT COST APPRAISAL
EXECUTIVE SUMMARY
Dillon, Read & Co. Inc. engaged Ernst & Young/Wright Killen ('EYWK') to
provide a replacement cost appraisal for Statia Terminals N.V.'s St. Eustatius
terminal at St. Eustatius, Netherlands Antilles and Statia Terminals Canada's
Point Tupper terminal at Port Hawkesbury, Nova Scotia, Canada. This appraisal
was prepared for inclusion in the Offering Memorandum of the 11 3/4% First
Mortgage Notes due 2003, Series A.
EYWK used standard engineering cost estimating techniques to determine the
current replacement cost of the Company's terminal facilities. These costs were
determined assuming replacement with like facilities at the same location, and
are a combination of estimates for major items such as tanks, docks, and major
identifiable capital items. Costs were obtained from vendors and other sources
recognized in the industry, and in certain instances specified below from the
Company. The costs for all docks and marine facilities were developed for EYWK
by a consulting firm which has specific expertise in marine loading facilities
and is familiar with the conditions at St. Eustatius and Point Tupper. Where
specific details of other items such as electrical, site work, etc. were not
known, factored costs based on the installed cost of relevant assets were
utilized. All construction costs (including site preparation) were location
adjusted to the specific sites and conditions of each of the facilities. An
amount of 15 percent of onsite construction costs identified by line item was
added to cover expenditures not included in such line items. Construction
interest was estimated assuming an 18 month construction period and a 9.5
percent interest rate. No adjustments were made for depreciation due to the
condition of equipment included in this report.
The values for land, and replacement costs for office furniture, electronic
data processing equipment, and miscellaneous equipment in both facilities, were
provided by the Company. While EYWK has no reason to believe such cost estimates
to be inaccurate, EYWK makes no warranties as to the accuracy of these costs.
The St. Eustatius terminal contains 61 tanks totaling approximately 11.4
million barrels of storage (of which 11.3 million barrels are available for
lease) and five separate marine loading facilities and a small refinery. Because
of the remote location, the terminal has its own power, fresh water, and inert
gas systems. The estimated replacement cost for the St. Eustatius terminal is
$380,408,000.
The Point Tupper terminal contains 41 tanks totaling approximately 7.5
million barrels of storage, a large dock, and a small truck loading facility.
The estimated replacement cost for the Point Tupper terminal is $335,178,000.
The combined replacement cost, new, for the two terminals is $715,586,000.
Such replacement cost does not purport to represent the fair market value of
these assets.
A-1
<PAGE>
------------------------------------------------------
------------------------------------------------------
No dealer, salesperson or any other person has been authorized in connection
with any offering made hereby to give any information or to make any
representation not contained in this Prospectus. If given or made, such
information or representation must not be relied upon as having been authorized
by the Issuers. This Prospectus does not constitute an offer to sell or a
solicitation in any jurisdiction to any person to whom it is unlawful to make
any such offer in such jurisdiction. Neither the delivery of this Prospectus nor
any sale made hereunder shall, under any circumstances, create any implication
that the information herein is correct as of any time subsequent to the date
hereof or that there has been no change in the affairs of the Issuers or the
Subsidiary Guarantors.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
Available Information........................... ii
Enforceability of Certain Civil Liabilities..... iii
Prospectus Summary.............................. 1
Risk Factors.................................... 8
The Transactions................................ 15
Parent Capital Structure........................ 16
Use of Proceeds of the New Notes................ 18
Pro Forma Capitalization........................ 18
The Exchange Offer.............................. 18
Unaudited Pro Forma Combined
Financial Data................................ 26
Selected Historical and Pro Forma Combined
Financial Data................................ 31
Management's Discussion and Analysis of
Financial Condition and Results of
Operations.................................... 34
Industry........................................ 44
Business........................................ 48
Management...................................... 61
Security Ownership.............................. 65
Certain Relationships and
Related Transactions.......................... 66
Description of New Bank Credit Facility......... 67
Description of Notes............................ 68
Taxation........................................ 100
Plan of Distribution............................ 104
Experts......................................... 104
Legal Matters................................... 105
Glossary........................................ 106
Index to Financial Statements................... F-1
Annex A--Replacement Cost Appraisal Executive
Summary....................................... A-1
</TABLE>
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
[LOGO]
STATIA TERMINALS INTERNATIONAL N.V.
STATIA TERMINALS CANADA, INCORPORATED
------------------------
OFFER TO EXCHANGE
11 3/4% FIRST MORTGAGE NOTES
DUE 2003, SERIES B
FOR ALL OUTSTANDING 11 3/4%
FIRST MORTGAGE NOTES DUE
2003, SERIES A
------------------------
PROSPECTUS
------------------------
, 1997
------------------------------------------------------
------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Netherlands Antilles
The Articles of Incorporation of Statia contain no specific provisions
under which any member of the Managing Board, officers, and/or attorneys-in-fact
is indemnified in any manner against any liability which such person may incur
in the aforementioned capacity as such. However, article XI of the Articles of
Incorporation of Statia provides: 'The determination of the balance sheet and
profit and loss account shall acquit and discharge the Managing Board for its
management during the relevant financial year.' However, such discharge can only
release a Managing Director from liability for matters that are apparent from
the balance sheet and profit and loss account. Such discharge is however not
absolute and shall in principle only prevent contractual liability vis-a-vis
Statia and not general liability vis-a-vis third parties.
Canada
Statia Canada's Articles of Association provide that every director or
officer, former director or officer, or person who acts or acted at Statia
Canada's request, as a director or officer of Statia Canada, a body corporate,
partnership or other association of which Statia Canada is or was a shareholder,
partner, member or creditor, and the heirs and legal representatives of such
person, in the absence of any dishonesty on the part of such person, shall be
indemnified by Statia Canada against, and it shall be the duty of the directors
out of the funds of Statia Canada to pay, all costs, losses and expenses,
including an amount paid to settle an action or claim or satisfy a judgment,
that such director, officer or person may incur or become liable to pay in
respect of any claim made against such person or civil, criminal or
administrative action or proceeding to which such person is made a party by
reason of being or having been a director or officer of Statia Canada or such
body corporate, partnership or other association, whether Statia Canada is a
claimant or party to such action or proceeding or otherwise; and the amount for
which such indemnity is proved shall immediately attach as a lien on the
property of Statia Canada and have priority as against the shareholders over all
other claims.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
<S> <C> <C>
1. -- Purchase Agreement dated as of November 22, 1996 among the Issuers and Dillon, Read & Co.
3.1 -- Articles of Incorporation Statia Terminals International N.V.
3.2 -- Memorandum and Articles of Association of Statia Terminals Canada, Incorporated.
3.3 -- Order of the Supreme Court of Nova Scotia approving the Amalgamation Agreement between Statia
Terminals Canada, Incorporated and Statia Terminals Point Tupper, Inc. filed at the Registry of
Joint Stock Companies at Halifax, Nova Scotia.
4.1 -- Indenture, dated as of November 27, 1996, among Statia Terminals International N.V., Statia
Terminals Canada, Incorporated, Statia Terminals Corporation N.V., Statia Terminals Delaware,
Inc., Statia Terminals, Inc., Statia Terminals N.V., Statia Delaware HoldCo II, Inc., Saba
Trustcompany N.V., Bicen Development Corporation N.V., Statia Terminals Southwest, Inc., W.P.
Company, Inc., Seven Seas Steamship Company, Inc., Seven Seas Steamship Company (Sint Eustatius)
N.V., Point Tupper Marine Services Limited, Statia Laboratory Services N.V., Statia Tugs N.V.
(collectively, the 'Subsidiary Guarantors') and Marine Midland Bank.
4.2 -- Specimen Certificate of 11 3/4% Series A First Mortgage Note due 2003 (included in Exhibit 4.1
hereto).
</TABLE>
II-1
<PAGE>
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.--(CONTINUED)
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
<S> <C> <C>
4.3 -- Specimen Certificate of 11 3/4% Series B First Mortgage Note due 2003 (included in Exhibit 4.1
hereto).
4.4 -- Form of Guarantee of securities issued pursuant to the Indenture (included in Exhibit 4.1 hereto).
4.5 -- Registration Rights Agreement, dated as of November 27, 1996, by and among Statia Terminals
International N.V., Statia Terminals Canada, Incorporated, the Subsidiary Guarantors and Dillon,
Read & Co. Inc.
4.6 -- Share Pledge Agreement, dated as of November 27, 1996, by and between Statia Terminals
International N.V. and Marine Midland Bank.
4.7 -- Share Pledge Agreement, dated as of November 27, 1996, by and between Statia Terminals N.V. and
Marine Midland Bank.
4.8 -- Share Pledge Agreement, dated as of November 27, 1996, by and between Statia Terminals Corporation
N.V. and Marine Midland Bank.
4.9 -- Share Pledge Agreement, dated as of November 27, 1996, by and between Seven Seas Steamship
Company, Inc. and Marine Midland Bank.
4.10 -- Fiduciary Transfer of Tangible Assets Agreement, dated as of November 27, 1996, by and between
Statia Terminals N.V., Saba Trustcompany N.V., Bicen Development Corporation N.V., Statia
Laboratory Services N.V., Statia Tugs N.V., Seven Seas Steamship Company (Sint Eustatius) N.V. and
Marine Midland Bank.
4.11 -- Fiduciary Assignment of Intangible Assets Agreement, dated as of November 27, 1996, by and between
Statia Terminals International N.V., Statia Terminals Corporation N.V., Statia Terminals N.V.,
Saba Trustcompany N.V., Bicen Development Corporation N.V., Statia Laboratory Services N.V., Seven
Seas Steamship Company (Sint Eustatius) N.V., Statia Tugs N.V. and Marine Midland Bank.
4.12 -- Deed of Mortgage, dated as of November 27, 1996, by and among Statia Terminals N.V., Statia
Laboratory Services N.V., Saba Trustcompany N.V. and Bicen Development Corporation N.V. as
mortgagors and Marine Midland Bank as mortgagee.
4.13 -- Fixed and Floating Charge Debenture, made as of November 27, 1996, between Statia Terminals
Canada, Incorporated and Marine Midland Bank.
4.14 -- Debenture Delivery Agreement, dated as of November 27, 1996, between Statia Terminals Canada,
Incorporated and Marine Midland Bank.
4.15 -- Securities Pledge Agreement, made as of November 27, 1996, between Statia Terminals Canada,
Incorporated and Marine Midland Bank.
4.16 -- Securities Pledge Agreement, dated as of November 27, 1996, between Statia Terminals Corporation
N.V. and Marine Midland Bank.
4.17 -- Debt Allocation Agreement, dated as of November 27, 1996, between Statia Terminals International
N.V. and Statia Terminals Canada, Incorporated.
4.18 -- United States Securities Pledge and Security Agreement, dated as of November 27, 1996, by and
among Statia Terminals International N.V., Statia Delaware Holdco II, Statia Terminals Delaware,
Inc., Statia Terminals, Inc., W.P. Company, Inc. and Marine Midland Bank.
*5.1 -- Opinion of White & Case regarding the legality of the 11 3/4% Series B First Mortgage Note due
2003.
*5.2 -- Opinion of Smeets Thesseling van Bokhorst Spigt, special Netherlands Antilles counsel to the
Issuers, regarding the legality of the 11 3/4% Series B First Mortgage Note due 2003.
*5.3 -- Opinion of Stewart McKelvey Stirling Scales, special Canadian counsel to the Issuers, regarding
the legality of the 11 3/4% Series B First Mortgage Note due 2003.
</TABLE>
II-2
<PAGE>
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.--(CONTINUED)
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
<S> <C> <C>
*8.1 -- Opinion of White & Case regarding certain tax matters.
*8.2 -- Opinion of Coopers & Lybrand LLP, special Netherlands Antilles tax adviser to the Issuers,
regarding certain tax matters.
*8.3 -- Opinion of Arthur Andersen & Co., Toronto, special Canadian, tax adviser to the Issuers, regarding
certain tax matters.
*10.1 -- Storage and Throughput Agreement, dated as of May 6, 1993 ('Storage and Throughput Agreement').
*10.2 -- Marine Fuel Agreement, dated as of May 6, 1993 ('Marine Fuel Agreement').
*10.3 -- Amendment, dated as of January 1, 1996 to (i) the Storage and Throughput Agreement and (ii) the
Marine Fuel Agreement.
*10.4 -- Storage and Throughput Agreement, dated as of August 20, 1993.
*10.5 -- Storage and Throughput Agreement, dated as of August 1, 1994.
*10.6 -- Employment Agreement, dated as of November 27, 1996, between Statia Terminals Group N.V., Statia
Terminals, Inc. and James G. Cameron.
*10.7 -- Employment Agreement, dated as of November 27, 1996, between Statia Terminals Group N.V., Statia
Terminals, Inc. and James F. Brenner.
*10.8 -- Employment Agreement, dated as of November 27, 1996, between Statia Terminals Group N.V., Statia
Terminals, Inc. and Jack R. Pine.
10.9 -- Loan and Security Agreement, dated as of November 27, 1996 between Congress Financial Corporation
(Florida) and Statia Terminals N.V.
10.10 -- Loan Agreement, dated as of November 27, 1996, by and among Congress Financial Corporation
(Canada), Statia Terminals Canada, Incorporated and Point Tupper Marine Services Limited.
10.11 -- Brownsville Navigation District Contracts No. 2790, dated as of May 17, 1993, between the
Brownsville Navigation District and Statia Terminals Southwest, Inc.
10.12 -- Brownsville Navigation District Contracts No. 2826, dated as of January 14, 1994, between the
Brownsville Navigation District and Statia Terminals Southwest, Inc.
12.1 -- Statement regarding computation of ratios.
21.1 -- Subsidiaries of Statia Terminals International N.V. and Statia Terminals Canada, Incorporated.
23.1 -- Consent of Arthur Andersen LLP.
*23.2 -- Consent of White & Case (contained in the opinion filed as Exhibit 5.1 hereto).
*23.3 -- Consent of White & Case (contained in Exhibit 8.1 hereto).
*23.4 -- Consent of Smeets Thesseling van Bokhorst Spigt (contained in the opinion filed as Exhibit 5.2
hereto).
*23.5 -- Consent of Stewart McKelvey Stirling Scales (contained in the opinion filed as Exhibit 5.3
hereto).
*23.6 -- Consent of Coopers & Lybrand LLP (contained in Exhibit 8.2 hereto).
*23.7 -- Consent of Arthur Andersen & Co., Toronto (contained in Exhibit 8.3 hereto).
23.8 -- Consent of The PIRA Energy Group.
23.9 -- Consent of The Independent Liquid Terminals Assocation.
23.10 -- Consent of The New York Mercantile Exchange.
</TABLE>
II-3
<PAGE>
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.--(CONTINUED)
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
<S> <C> <C>
23.11 -- Consent of Stalsby/Wilson.
24.1 -- Power of Attorney (see pgs II-7 through II-22).
25.1 -- Statement of eligibility of trustee.
27. -- Financial Data Schedule.
*99.1 -- Form of Letter of Transmittal for the 11 3/4% First Mortgage Notes due 2003, Series B.
*99.2 -- Form of Notice of Guaranteed Delivery for the 11 3/4% First Mortgage Notes due 2003, Series B.
*99.3 -- Letter to Brokers.
*99.4 -- Letter to Clients.
*99.5 -- Instruction to Registered Holder and/or Book Entry Transfer Participant from Beneficial Owner.
*99.6 -- Guidelines for Certificate of Taxpayer Identification Number on substitute Form W-9.
</TABLE>
- ------------------
* To be filed by amendment.
ITEM 22. UNDERTAKINGS.
(a) Each of the undersigned registrants hereby undertakes that insofar as
indemnification for liabilities arising under the Securities Act of 1933, as
amended (the 'Act') may be permitted to directors, officers and controlling
persons of the registrants pursuant to the foregoing provisions, or otherwise,
the registrants have been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim of
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against the public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
(b) Each of the undersigned registrants hereby undertakes to respond to
requests for information that is incorporated by reference into this prospectus
pursuant to Item 4, 10(b), 11 or 13 of this Form, within one business day of
receipt of such request, and to send the incorporated documents by first class
mail or other equally prompt means. This includes information contained in
documents filed subsequent to the effective date of the registration statement
through the date of responding to the request.
(c) The undersigned registrants hereby undertake to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State of New
York and in the City of Deerfield Beach, State of Florida, on December 20, 1996.
STATIA TERMINALS INTERNATIONAL N.V.
By: /s/ DAVID B. PITTAWAY
---------------------
Name: David B. Pittaway
Title: Managing Director
By: /s/ JAMES G. CAMERON
---------------------
Name: James G. Cameron
Title: Managing Director
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints and
hereby authorizes Jack R. Pine and James F. Brenner, and each of them, as
attorney-in-fact, to sign on such person's behalf, individually and in each
capacity stated below, and to file any amendments, including post-effective
amendments to this registration statement.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated on December 20, 1996.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
/s/ DAVID B. PITTAWAY Managing Director
--------------------- (Principal Executive Officer)
David B. Pittaway
/s/ JUSTIN B. WENDER Managing Director and Secretary
--------------------
Justin B. Wender
/s/ JAMES G. CAMERON Managing Director
-------------------- (Principal Financial and Accounting Officer)
James G. Cameron
/s/ JOHN K. CASTLE Managing Director
--------------------
John K. Castle
</TABLE>
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State of New
York, on December 20, 1996.
STATIA TERMINALS CANADA, INCORPORATED
By: /s/ DAVID B. PITTAWAY
---------------------
Name: David B. Pittaway
Title: Director and President
By: /s/ JUSTIN B. WENDER
---------------------
Name: Justin B. Wender
Title: Managing Director
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints and
hereby authorizes Jack R. Pine and James F. Brenner, and each of them, as
attorney-in-fact, to sign on such person's behalf, individually and in each
capacity stated below, and to file any amendments, including post-effective
amendments to this registration statement.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated on December 20, 1996.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
/s/ DAVID B. PITTAWAY Director and President
--------------------- (Principal Executive Officer)
David B. Pittaway
/s/ JUSTIN B. WENDER Director and Secretary
--------------------
Justin B. Wender
/s/ JAMES F. BRENNER Vice President Finance
-------------------- (Principal Financial and Accounting Officer)
James F. Brenner
/s/ JACK R. PINE Assistant Secretary
----------------
Jack R. Pine
</TABLE>
II-6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State of New
York, on December 20, 1996.
STATIA TERMINALS CORPORATION N.V.
By: /s/ DAVID B. PITTAWAY
---------------------
Name: David B. Pittaway
Title: Managing Director
By: /s/ JUSTIN B. WENDER
---------------------
Name: Justin B. Wender
Title: Managing Director
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints and
hereby authorizes Jack R. Pine and James F. Brenner, and each of them, as
attorney-in-fact, to sign on such person's behalf, individually and in each
capacity stated below, and to file any amendments, including post-effective
amendments to this registration statement.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated on December 20, 1996.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C> <C>
/s/ DAVID B. PITTAWAY Managing Director
--------------------- (Principal Executive Officer)
David B. Pittaway
/s/ JUSTIN B. WENDER Managing Director and Secretary
-------------------- (Principal Financial and Accounting Officer)
Justin B. Wender
</TABLE>
II-7
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State of New
York, on December 20, 1996.
STATIA TERMINALS DELAWARE, INC.
By: /s/ DAVID B. PITTAWAY
---------------------
Name: David B. Pittaway
Title: Director and President
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints and
hereby authorizes Jack R. Pine and James F. Brenner, and each of them, as
attorney-in-fact, to sign on such person's behalf, individually and in each
capacity stated below, and to file any amendments, including post-effective
amendments to this registration statement.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated on December 20, 1996.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C> <C>
/s/ DAVID B. PITTAWAY Director and President
--------------------- (Principal Executive Officer)
David B. Pittaway
/s/ JUSTIN B. WENDER Vice President, Treasurer and Secretary
-------------------- (Principal Financial and Accounting Officer)
Justin B. Wender
</TABLE>
II-8
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State of New
York, on December 20, 1996.
STATIA DELAWARE HOLDCO II, INC.
By: /s/ DAVID B. PITTAWAY
---------------------
Name: David B. Pittaway
Title: Director and President
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints and
hereby authorizes Jack R. Pine and James F. Brenner, and each of them, as
attorney-in-fact, to sign on such person's behalf, individually and in each
capacity stated below, and to file any amendments, including post-effective
amendments to this registration statement.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated on December 20, 1996.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C> <C>
/s/ DAVID B. PITTAWAY Director and President
--------------------- (Principal Executive Officer)
David B. Pittaway
/s/ JUSTIN B. WENDER Vice President, Treasurer and Secretary
-------------------- (Principal Financial and Accounting Officer)
Justin B. Wender
</TABLE>
II-9
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Deerfield Beach, State of
Florida, on December 20, 1996.
STATIA TERMINALS N.V.
By: /s/ JAMES G. CAMERON
------------------------
Name: James G. Cameron
Title: Managing Director
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints and
hereby authorizes Jack R. Pine and James F. Brenner, and each of them, as
attorney-in-fact, to sign on such person's behalf, individually and in each
capacity stated below, and to file any amendments, including post-effective
amendments to this registration statement.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated on December 20, 1996.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C> <C>
/s/ JAMES G. CAMERON Managing Director
-------------------- (Principal Executive, Financial and Accounting Officer)
James G. Cameron
/s/ ROBERT R. RUSSO Managing Director
-------------------
Robert R. Russo
/s/ THOMAS M. THOMPSON, JR. Managing Director
---------------------------
Thomas M. Thompson, Jr.
/s/ JUSTIN B. WENDER Secretary
--------------------
Justin B. Wender
</TABLE>
II-10
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Deerfield Beach, State of
Florida, on December 20, 1996.
SABA TRUSTCOMPANY N.V.
By: /s/ JAMES G. CAMERON
--------------------
Name: James G. Cameron
Title: Managing Director
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints and
hereby authorizes Jack R. Pine and James F. Brenner, and each of them, as
attorney-in-fact, to sign on such person's behalf, individually and in each
capacity stated below, and to file any amendments, including post-effective
amendments to this registration statement.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated on December 20, 1996.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C> <C>
/s/ JAMES G. CAMERON Managing Director
-------------------- (Principal Executive, Financial and Accounting Officer)
James G. Cameron
/s/ JUSTIN B. WENDER Secretary
--------------------
Justin B. Wender
</TABLE>
II-11
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly authorized, in the registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Deerfield Beach,
State of Florida, on December 20, 1996.
BICEN DEVELOPMENT CORPORATION N.V.
By: /s/ JAMES G. CAMERON
--------------------
Name: James G. Cameron
Title: Managing Director
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints and
hereby authorizes Jack R. Pine and James F. Brenner, and each of them, as
attorney-in-fact, to sign on such person's behalf, individually and in each
capacity stated below, and to file any amendments, including post-effective
amendments to this registration statement.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated on December 20, 1996.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C> <C>
/s/ JAMES G. CAMERON Managing Director
-------------------- (Principal Executive, Financial and Accounting Officer)
James G. Cameron
/s/ JUSTIN B. WENDER Secretary
--------------------
Justin B. Wender
</TABLE>
II-12
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly authorized, in the registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of New York, State of
New York, on December 20, 1996.
SEVEN SEAS STEAMSHIP COMPANY
(SINT EUSTATIUS) N.V.
By: /s/ JUSTIN B. WENDER
--------------------
Name: Justin B. Wender
Title: Secretary
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints and
hereby authorizes Jack R. Pine and James F. Brenner, and each of them, as
attorney-in-fact, to sign on such person's behalf, individually and in each
capacity stated below, and to file any amendments, including post-effective
amendments to this registration statement.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated on December 20, 1996.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
Covenant Managers N.V. Managing Director
By: /s/ Lucius A. Hailey
Name: Lucius A. Hailey
Title: Managing Director
/s/ JUSTIN B. WENDER Secretary
-------------------- (Principal Executive, Financial and Accounting Officer)
Justin B. Wender
</TABLE>
II-13
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly authorized, in the registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Deerfield Beach,
State of Florida, on December 20, 1996.
STATIA LABORATORY SERVICES N.V.
By: /s/ JAMES G. CAMERON
--------------------
Name: James G. Cameron
Title: Managing Director
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints and
hereby authorizes Jack R. Pine and James F. Brenner, and each of them, as
attorney-in-fact, to sign on such person's behalf, individually and in each
capacity stated below, and to file any amendments, including post-effective
amendments to this registration statement.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated on December 20, 1996.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C> <C>
/s/ JAMES G. CAMERON Managing Director
-------------------- (Principal Executive, Financial and Accounting Officer)
James G. Cameron
/s/ JUSTIN B. WENDER Secretary
--------------------
Justin B. Wender
</TABLE>
II-14
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly authorized, in the registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Deerfield Beach,
State of Florida, on December 20, 1996.
STATIA TERMINALS, INC.
By: /s/ JAMES G. CAMERON
--------------------
Name: James G. Cameron
Title: Director, Chairman of the
Board
and President
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints and
hereby authorizes Jack R. Pine and James F. Brenner, and each of them, as
attorney-in-fact, to sign on such person's behalf, individually and in each
capacity stated below, and to file any amendments, including post-effective
amendments to this registration statement.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated on December 20, 1996.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
/s/ JAMES G. CAMERON Director, Chairman of the Board and President
-------------------- (Principal Executive Officer)
James G. Cameron
/s/ THOMAS M. THOMPSON, JR. Director and Executive Vice President
---------------------------
Thomas M. Thompson, Jr.
/s/ ROBERT R. RUSSO Director
-------------------
Robert R. Russo
/s/ JACK R. PINE Senior Vice President, General Counsel and Secretary
----------------
Jack R. Pine
/s/ JOHN D. FRANKLIN Vice President--Marine Fuel Sales
--------------------
John D. Franklin
/s/ JAMES K. LIVINGSTON Vice President--Terminal Operations
-----------------------
James K. Livingston
/s/ JAMES F. BRENNER Vice President--Finance, Assistant Secretary and
--------------------
James F. Brenner Treasurer
(Principal Financial and Accounting Officer)
</TABLE>
II-15
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly authorized, in the registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Deerfield Beach,
State of Florida, on December 20, 1996.
STATIA TERMINALS SOUTHWEST, INC.
By: /s/ JAMES G. CAMERON
--------------------
Name: James G. Cameron
Title: Director and President
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints and
hereby authorizes Jack R. Pine and James F. Brenner, and each of them, as
attorney-in-fact, to sign on such person's behalf, individually and in each
capacity stated below, and to file any amendments, including post-effective
amendments to this registration statement.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated on December 20, 1996.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
/s/ JAMES G. CAMERON Director and President
-------------------- (Principal Executive Officer)
James G. Cameron
/s/ THOMAS M. THOMPSON, JR. Executive Vice President
---------------------------
Thomas M. Thompson, Jr.
/s/ROBERT R. RUSSO Senior Vice President--Supply/Operations
------------------
Robert R. Russo
/s/ JACK R. PINE Director, Senior Vice President, General Counsel and
---------------- Secretary
Jack R. Pine
/s/ JAMES K. LIVINGSTON Vice President--Terminal Operations
-----------------------
James K. Livingston
/s/ JAMES F. BRENNER Director, Vice President--Finance, Assistant
-------------------- Secretary and Treasurer
James F. Brenner
(Principal Financial and Accounting Officer)
</TABLE>
II-16
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly authorized, in the registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Deerfield Beach,
State of Florida, on December 20, 1996.
W.P. COMPANY, INC.
By: /s/ JAMES G. CAMERON
--------------------
Name: James G. Cameron
Title: Director and President
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints and
hereby authorizes Jack R. Pine and James F. Brenner, and each of them, as
attorney-in-fact, to sign on such person's behalf, individually and in each
capacity stated below, and to file any amendments, including post-effective
amendments to this registration statement.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated on December 20, 1996.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
/s/ JAMES G. CAMERON Director and President
-------------------- (Principal Executive Officer)
James G. Cameron
/s/ ROBERT R. RUSSO Director
-------------------
Robert R. Russo
/s/ JAMES F. BRENNER Vice President--Finance and Secretary
-------------------- (Principal Financial and Accounting Officer)
James F. Brenner
/s/ JUSTIN B. WENDER Assistant Secretary
--------------------
Justin B. Wender
</TABLE>
II-17
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly authorized, in the registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Deerfield Beach,
State of Florida, on December 20, 1996.
SEVEN SEAS STEAMSHIP COMPANY, INC.
By: /s/ JAMES F. BRENNER
--------------------
Name: James F. Brenner
Title: Vice President
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints and
hereby authorizes Jack R. Pine and James F. Brenner, and each of them, as
attorney-in-fact, to sign on such person's behalf, individually and in each
capacity stated below, and to file any amendments, including post-effective
amendments to this registration statement.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated on December 20, 1996.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
/s/ JOHN D. FRANKLIN Director and President
-------------------- (Principal Executive Officer)
John D. Franklin
/s/ JAMES F. BRENNER Vice President
-------------------- (Principal Financial and Accounting Officer)
James F. Brenner
/s/ F.A. CALDERON Vice President
-----------------
F.A. Calderon
/s/ G.W. PIETERS Vice President
----------------
G.W. Pieters
/s/ VICTOR M. LOPEZ Secretary and Treasurer
-------------------
Victor M. Lopez
/s/ JUSTIN B. WENDER Assistant Secretary
--------------------
Justin B. Wender
</TABLE>
II-18
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly authorized, in the registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Deerfield Beach,
State of Florida, on December 20, 1996.
STATIA TUGS N.V.
By: /s/ JAMES G. CAMERON
--------------------
Name: James G. Cameron
Title: Managing Director
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints and
hereby authorizes Jack R. Pine and James F. Brenner, and each of them, as
attorney-in-fact, to sign on such person's behalf, individually and in each
capacity stated below, and to file any amendments, including post-effective
amendments to this registration statement.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated on December 20, 1996.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
/s/ JAMES G. CAMERON Managing Director
-------------------- (Principal Executive, Financial and Accounting Officer)
James G. Cameron
</TABLE>
II-19
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly authorized, in the registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Deerfield Beach,
State of Florida, on December 20, 1996.
POINT TUPPER MARINE SERVICES LIMITED
By: /s/ JAMES G. CAMERON
--------------------
Name: James G. Cameron
Title: Director
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints and
hereby authorizes Jack R. Pine and James F. Brenner, and each of them, as
attorney-in-fact, to sign on such person's behalf, individually and in each
capacity stated below, and to file any amendments, including post-effective
amendments to this registration statement.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated on December 20, 1996.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
/s/ JAMES G. CAMERON Director
-------------------- (Principal Executive Officer)
James G. Cameron
/s/ R. L. POTTER President
----------------
R. L. Potter
/s/ ROBERT R. RUSSO Senior Vice President
-------------------
Robert R. Russo
/s/ JAMES F. BRENNER Vice President--Finance and Treasurer
-------------------- (Principal Financial and Accounting Officer)
James F. Brenner
/s/ JOHN D. FRANKLIN Vice President--Marine Fuel Sales
--------------------
John D. Franklin
/s/ JACK R. PINE Secretary
----------------
Jack R. Pine
/s/ JUSTIN B. WENDER Assistant Secretary
--------------------
Justin B. Wender
</TABLE>
II-20
<PAGE>
STATIA TERMINALS INTERNATIONAL N.V.
STATIA TERMINALS CANADA, INCORPORATED
$135,000,000 11 3/4% First Mortgage Notes due 2003
PURCHASE AGREEMENT
November 22, 1996
New York, New York
Dillon, Read & Co. Inc.
535 Madison Avenue
New York, New York 10022
Ladies and Gentlemen:
Statia Terminals International N.V., a Netherlands Antilles
corporation ("Statia"), and Statia Terminals Canada, Incorporated, a Nova
Scotia, Canada corporation ("Statia Canada" and, together with Statia, the
"Issuers"), agree with you as follows:
1. ISSUANCE OF NOTES. The Issuers propose to issue and sell to
Dillon, Read & Co. Inc. (the "Purchaser") an aggregate of $135,000,000 principal
amount of 11 3/4% Series A First Mortgage Notes due 2003 (the "Series A First
Mortgage Notes"). The Series A First Mortgage Notes will be issued pursuant to
an indenture (the "Indenture"), to be dated the Closing Date (as defined below),
by and among the Issuers, each of Statia Terminals Corporation N.V., Statia
Terminals Delaware, Inc., Statia Terminals, Inc., Statia Terminals N.V., Statia
Delaware Holdco II, Inc., Saba Trustcompany N.V., Bicen Development Corporation
N.V., Statia Terminals Southwest, Inc., W.P. Company, Inc., Seven Seas Steamship
Company, Inc., Seven Seas Steamship Company (Sint Eustatius) N.V., Point Tupper
Marine Services Limited, Statia Laboratory Services N.V. and Statia Tugs N.V.
(collectively, the "Subsidiary Guarantors") and Marine Midland Bank, as trustee
(the "Trustee"). The Issuers' obligations under the Series A First Mortgage
Notes and the Series B First Mortgage Notes (as defined below) will be
unconditionally guaranteed on a senior basis by each of the Subsidiary
Guarantors pursuant to each of their guarantees (the "Subsidiary Guarantees").
Capitalized terms used
<PAGE>
-2-
but not otherwise defined herein shall have the meanings given to such terms in
the Indenture or the Offering Memorandum (as defined below).
The Series A First Mortgage Notes will be offered and sold to the
Purchaser pursuant to an exemption from the registration requirements under the
Securities Act of 1933, as amended (the "Act"). The Issuers have prepared a
preliminary offering memorandum, dated November 5, 1996 (the "Preliminary
Offering Memorandum"), and a final offering memorandum, dated and available for
distribution on the date hereof (the "Offering Memorandum"), relating to the
Issuers, the Subsidiary Guarantors and the Series A First Mortgage Notes.
The Purchaser has advised the Issuers that the Purchaser intends, as
soon as it deems advisable after this Purchase Agreement has been executed and
delivered, to resell (the "Exempt Resales") the Series A First Mortgage Notes
purchased by the Purchaser under this Purchase Agreement (this "Agreement") in
private sales exempt from registration under the Act on the terms set forth in
the Offering Memorandum, as amended or supplemented, solely to (i) persons whom
the Purchaser reasonably believes to be "qualified institutional buyers," as
defined in Rule 144A under the Act ("QIBs"), (ii) institutional "accredited
investors" (as defined in Rule 501(a)(1), (2), (3) or (7) under Regulation D of
the Act) that make certain representations and agreements (each, an
"Institutional Accredited Investor") and (iii) other eligible purchasers
pursuant to offers and sales that occur outside the U.S. within the meaning of
Regulation S under the Act; the persons specified in clauses (i)-(iii) are
sometimes collectively referred to herein as the "Eligible Purchasers." The
Purchaser acknowledges that the Notes have not been qualified for sale under the
securities laws of Canada or any province or territory thereof and may not be
offered or sold, directly or indirectly, in Canada or to any resident thereof.
Holders (including subsequent transferees) of the Series A First
Mortgage Notes will have the registration rights set forth in the registration
rights agreement (the "Registration Rights Agreement"), to be dated the Closing
Date, in the form of Exhibit A to this Agreement, for so long as such Series A
First Mortgage Notes constitute "Transfer Restricted Securities" (as defined in
the Registration Rights Agreement). Pursuant to the Registration Rights
Agreement, the Issuers and the Subsidiary Guarantors will agree to (A) file with
the Securities and Exchange Commission (the "Commission"), under the
circumstances set forth in the Registration Rights Agreement, (i) a registration
statement under the Act (the "Exchange Offer Registration State-
<PAGE>
-3-
ment") relating to the 11 3/4% Series B First Mortgage Notes due 2003 (the
"Series B First Mortgage Notes"; and, together with the Series A First Mortgage
Notes, the "Notes," which term includes the Subsidiary Guarantees related
thereto) to be offered in exchange for the Series A First Mortgage Notes (the
"Exchange Offer") and/or (ii) a shelf registration statement pursuant to Rule
415 under the Act (the "Shelf Registration Statement" and, together with the
Exchange Offer Registration Statement, the "Registration Statements") relating
to the resale by certain holders of the Series A First Mortgage Notes, and (B)
use their best efforts to cause such Registration Statements to be declared
effective as soon as practicable. This Agreement, the Notes, the Indenture, the
Registration Rights Agreement and the Security Documents (as defined in the
Indenture) are hereinafter sometimes referred to collectively as the "Operative
Documents."
Upon original issuance of the Series A First Mortgage Notes and
until such time as the same is no longer required under the applicable
requirements of the Act, the Series A First Mortgage Notes shall bear the
following legend:
"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED
IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE
SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY
NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE
PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A
THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE
BENEFIT OF THE ISSUERS THAT (A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED ONLY (1) (a) TO A PERSON WHO THE SELLER REASONABLY
BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A, (b) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE
SECURITIES ACT, (c) OUTSIDE THE U.S. TO A FOREIGN PERSON IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT OR (d) IN
ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE ISSUERS SO
REQUEST), (2) TO THE ISSUERS OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT AND, IN EACH CASE, IN
<PAGE>
-4-
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE U.S. OR
ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH
SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE
SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A)
ABOVE.
"THE NOTES MAY NOT BE OFFERED, SOLD, TRANSFERRED OR DELIVERED AS PART OF
THEIR INITIAL DISTRIBUTION OR AT ANY TIME THEREAFTER, DIRECTLY OR
INDIRECTLY, OTHER THAN TO AFFILIATES OF THE ISSUERS CONTROLLING, UNDER
COMMON CONTROL WITH OR CONTROLLED BY THE ISSUERS, PENSION FUNDS, INSURANCE
COMPANIES, SECURITIES FIRMS AND OTHER INVESTMENT INSTITUTIONS, CENTRAL
GOVERNMENTS, INTERNATIONAL ORGANIZATIONS CREATED UNDER PUBLIC
INTERNATIONAL LAW AND OTHER COMPARABLE ENTITIES, INCLUDING INTER ALIA,
FINANCE COMPANIES OF INDUSTRIAL AND FINANCIAL ENTERPRISES, WHO OR WHICH
ARE ACTIVE ON A REGULAR AND PROFESSIONAL BASIS IN THE FINANCIAL MARKETS
FOR THEIR OWN ACCOUNT, AND OTHERWISE IN ACCORDANCE WITH THE LEGEND SET
FORTH ON THE COVER PAGE OF THE OFFERING MEMORANDUM."
The Notes are being issued and sold in connection with the
acquisition by Statia and Statia Canada (the "Acquisition") of the acquired
companies as set forth on Schedule A hereto (the "Acquired Companies") pursuant
to an Amended and Restated Stock Purchase and Sale Agreement (the "Stock
Purchase Agreement") dated as of November 4, 1996 by and among Statia Terminals
Group N.V., Statia, Statia Canada and Praxair, Inc. In connection with the
Acquisition and the offering of the Notes hereby, (i) Statia Terminals Group
N.V. will issue an aggregate of $101.0 million of preferred stock and common
stock and will use substantially all of the proceeds therefrom to make a capital
contribution to Statia pursuant to a Capital Contribution Agreement (the
"Capital Contribution Agreement") in the amount of $98.5 million in return for
common equity; (ii) Statia will enter into a $17.5 million senior secured
revolving credit facility (the "New Bank Credit Facility" and, together with the
Capital Contribution Agreement and the Stock Purchase Agreement, the
"Transaction Documents"). The Notes and the Subsidiary Guarantees will be
secured by a first priority or, in the case of Inventory, Accounts Receivable
and proceeds thereof, second priority, lien on and security interests in
substantially all of the (i) real and personal property, plant and equipment
(other than the assets of the Brownsville facility, vehicles, marine vessels and
emergency and spill response equipment) of the Issuers and Subsidiary Guarantors
located at and/or used in connection with the St. Eustatius
<PAGE>
-5-
and Point Tupper facilities, and (ii) all of the shares of capital stock and
other securities or interests evidencing equity ownership of (x) the Subsidiary
Guarantors outstanding on the date hereof or hereafter acquired and (y) all
Restricted Subsidiaries hereafter acquired. The collateral securing the Notes
will be pledged pursuant to the terms of the Security Documents.
2. AGREEMENTS TO SELL AND PURCHASE. On the basis of the
representations, warranties and covenants contained in this Agreement, and
subject to the terms and conditions contained in this Agreement, the Issuers
agree to issue and sell to the Purchaser, and the Purchaser agrees to purchase
from the Issuers, the aggregate principal amount of the Series A First Mortgage
Notes. The purchase price for the Series A First Mortgage Notes shall be 97% of
their principal amount. The Issuers shall cause each Subsidiary Guarantor to
unconditionally guarantee on a senior basis by such Subsidiary Guarantor the
Issuers' obligations under the Notes.
3. DELIVERY AND PAYMENT. Delivery of, and payment of the purchase
price for, the Series A First Mortgage Notes shall be made at 9:00 a.m., New
York City time, on the third business day following the date of this Agreement
(the "Closing Date") at the offices of White & Case, 1155 Avenue of the
Americas, New York, New York 10036. The Closing Date and the location of
delivery of and the form of payment for the Series A First Mortgage Notes may be
varied by mutual agreement between the Purchaser and the Issuers.
One or more of the Series A First Mortgage Notes in global form or
certificated form, as the case may be, registered in such names as the Purchaser
may request upon at least one business day's notice prior to the Closing Date,
having an aggregate principal amount corresponding to the aggregate principal
amount of the Series A First Mortgage Notes sold pursuant to Exempt Resales to
QIBs and Institutional Accredited Investors, in the case of the Notes in global
form, and to other Eligible Purchasers, in the case of Notes in certificated
form sold pursuant to Regulation S, shall be delivered by the Issuers to the
Purchaser (or as the Purchaser directs), against payment by the Purchaser of the
purchase price therefor by means of transfer of immediately available funds
(including book transfer) reasonably acceptable to the Purchaser and the Issuers
to the order of Statia and Statia Canada. The Series A First Mortgage Notes in
global form shall be made available to the Purchaser for inspection not later
than 9:30 a.m. on the business day immediately preceding the Closing Date.
<PAGE>
-6-
4. AGREEMENTS OF THE ISSUERS. Each of the Issuers covenants and
agrees with the Purchaser as follows:
(a) To furnish the Purchaser and those persons identified by the
Purchaser, without charge, with as many copies of the Preliminary Offering
Memorandum and the Offering Memorandum, and any amendments or supplements
thereto, as the Purchaser may reasonably request for purposes contemplated
by the Act. The Issuers consent to the use of the Preliminary Offering
Memorandum and the Offering Memorandum, and any amendments and supplements
thereto required pursuant to this Agreement, by the Purchaser in
connection with Exempt Resales that are in compliance with Sections 5(b)
and 5(c) of this Agreement.
(b) Not to amend or supplement the Offering Memorandum prior to the
Closing Date unless the Purchaser shall previously have been advised of,
and shall not have objected to (any such objection not to be
unreasonable), such amendment or supplement within a reasonable time, but
in any event not longer than five days after being furnished with a copy
of such amendment or supplement. The Issuers shall promptly prepare, upon
the Purchaser's reasonable request, any amendment or supplement to the
Offering Memorandum that may be necessary or advisable in connection with
Exempt Resales.
(c) If, during the time that an Offering Memorandum is required to
be delivered in connection with any Exempt Resales or market-making
transactions after the date of this Agreement and prior to the
consummation of the Exchange Offer, any event shall occur that, in the
judgment of the Issuers or in the judgment of counsel to the Purchaser,
makes any statement of a material fact in the Offering Memorandum untrue
or that requires the making of any additions to or changes in the Offering
Memorandum in order to make the statements in the Offering Memorandum, in
the light of the circumstances under which they are made, not misleading,
or if it is necessary to amend or supplement the Offering Memorandum to
comply with all applicable laws, the Issuers shall promptly notify the
Purchaser of such event and prepare an appropriate amendment or supplement
to the Offering Memorandum so that (i) the statements in the Offering
Memorandum as amended or supplemented will, in the light of the
circumstances at the time that the Offering Memorandum is delivered to
prospective Eligible Purchasers, not be misleading and (ii) the Offering
Memorandum will comply with applicable law.
<PAGE>
-7-
(d) To cooperate with the Purchaser and counsel to the Purchaser in
connection with the qualification or registration of the Series A First
Mortgage Notes under the securities or Blue Sky laws of such jurisdictions
as the Purchaser may request and to continue such qualification in effect
so long as required for the Exempt Resales. Notwithstanding the foregoing,
the Issuers shall not be required to qualify as foreign corporations in
any jurisdiction in which they are not so qualified or to file a general
consent to service of process in any such jurisdiction or subject
themselves to taxation in excess of a nominal dollar amount in any such
jurisdiction where they are not then so subject.
(e) Whether or not the transactions contemplated by this Agreement
are consummated or this Agreement becomes effective or is terminated, to
pay all costs, expenses, fees, disbursements (including fees, expenses and
disbursements of counsel) and stamp, documentary or similar taxes imposed
by the U.S., the Netherlands Antilles or Canada incident to and in
connection with: (i) the preparation, printing, filing and distribution of
the Preliminary Offering Memorandum and the Offering Memorandum
(including, without limitation, financial statements) and all amendments
and supplements thereto, (ii) the preparation and delivery of the
Operative Documents and all other agreements, memoranda, correspondence
and documents prepared and delivered in connection with this Agreement and
with the Exempt Resales, (iii) the issuance, transfer and delivery by the
Issuers and the Subsidiary Guarantors of the Notes and the Subsidiary
Guarantees, respectively, to the Purchaser, (iv) the qualification or
registration of the Notes for offer and sale under the securities or Blue
Sky laws of the several states (including, without limitation, the cost of
printing and mailing a preliminary and final Blue Sky memorandum and the
fees and disbursements of counsel to the Purchaser relating thereto), (v)
the furnishing of such copies of the Preliminary Offering Memorandum and
the Offering Memorandum, and all amendments and supplements thereto, as
may be reasonably requested for use in connection with Exempt Resales,
(vi) the preparation of certificates for the Notes (including, without
limitation, printing and engraving thereof), (vii) the application for
quotation of the Notes in the National Association of Securities Dealers,
Inc. ("NASD") Automated Quotation System - PORTAL ("PORTAL"), including,
but not limited to, all listing fees and expenses, (viii) the approval of
the Notes by The Depository Trust Company ("DTC") for "book-
<PAGE>
-8-
entry" transfer, (ix) the rating of the Notes by rating agencies, (x) the
fees and expenses of the Trustee and Collateral Agent and its counsel and
(xi) the performance by the Issuers and the Subsidiary Guarantors of their
other obligations under the Operative Documents, including, but not
limited to, the fees, disbursements and expenses of the Issuers' counsel
and accountants.
(f) To use the proceeds from the sale of the Series A First Mortgage
Notes in the manner described in the Offering Memorandum under the caption
"Use of Proceeds."
(g) To do and perform all things required to be done and performed
under this Agreement by it prior to or after the Closing Date and to
satisfy all conditions precedent on its part to the delivery of the Series
A First Mortgage Notes.
(h) Not to sell, offer for sale or solicit offers to buy or
otherwise negotiate in respect of any security (as defined in the Act)
that would be integrated with the sale of the Series A First Mortgage
Notes in a manner that would require the registration under the Act of the
sale of the Series A First Mortgage Notes to the Purchaser or any Eligible
Purchaser.
(i) From and after the Closing Date, for so long as any of the
Series A First Mortgage Notes remain outstanding and are "restricted
securities" within the meaning of Rule 144(a)(3) under the Act and during
any period in which the Issuers are not subject to Section 13 or 15(d) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), to
make available the information required by Rule 144A(d)(4) under the Act
to (i) any Holder or beneficial owner of Series A First Mortgage Notes in
connection with any of such Notes and (ii) any prospective purchaser of
such Series A First Mortgage Notes from any such Holder or beneficial
owner designated by the Holder or beneficial owner.
(j) To comply with all of its agreements set forth in the
Registration Rights Agreement and all agreements set forth in the
representations letter of the Issuers to DTC relating to the approval of
the Notes by DTC for "book-entry" transfer.
<PAGE>
-9-
(k) To use its best efforts to effect the inclusion of the Series A
First Mortgage Notes in PORTAL and to obtain approval of the Notes by DTC
for "book-entry" transfer.
(l) From and after the Closing Date, the Issuers shall cause each of
the Subsidiary Guarantors to indemnify and hold harmless the Purchaser in
accordance with Sections 6 and 7 of this Agreement.
(m) From and after the Closing Date, for so long as any of the Notes
remain outstanding, to deliver without charge to the Purchaser, promptly
upon their becoming available, copies of all reports and other
communications (financial or otherwise) that the Issuers shall mail or
otherwise make available to their securityholders and all reports or
financial statements furnished to or filed by each of the Issuers and the
Subsidiary Guarantors with the Commission or any national securities
exchange.
(n) Prior to the Closing Date, to furnish to the Purchaser, as soon
as they have been prepared by the Issuers and the Subsidiary Guarantors, a
copy of any regularly prepared internal financial statements of each of
the Issuers and the Subsidiary Guarantors for any period subsequent to the
period covered by the financial statements appearing in the Offering
Memorandum and prior to the Closing Date.
(o) Not to distribute prior to the Closing Date any offering
material in connection with the offer and sale of the Series A First
Mortgage Notes other than the Preliminary Offering Memorandum and the
Offering Memorandum.
5. REPRESENTATIONS AND WARRANTIES. (a) Each of the Issuers
represents and warrants to the Purchaser that:
(i) Each of the Preliminary Offering Memorandum and the Offering
Memorandum has been prepared in connection with the Exempt Resales.
Neither the Preliminary Offering Memorandum nor the Offering Memorandum,
or any supplement or amendment thereto, contains any untrue statement of a
material fact or omits to state any material fact necessary in order to
make the statements therein, in the light of the circumstances under which
they were made, not misleading; provided, however, that the Issuers make
no representation or warranty with respect to information contained in or
omitted from the Preliminary Offering Memorandum or the Offering
Memorandum, as supplemented or amended, in reliance
<PAGE>
-10-
upon and in conformity with information furnished to the Issuers in
writing by the Purchaser expressly for inclusion in the Preliminary
Offering Memorandum or the Offering Memorandum or any supplement or
amendment thereto. No order asserting that any of the transactions
contemplated by this Agreement are subject to the registration
requirements of the Act has been issued or threatened.
(ii) There are no securities of either of the Issuers or any of the
Subsidiary Guarantors that are listed on a national securities exchange
registered under Section 6 of the Exchange Act or that are quoted in a
United States automated interdealer quotation system.
(iii) Except for Statia Terminals Puerto Rico Corporation, Statia
Steamship Agency, Inc., Statia Terminals Virgin Island Corporation, Seven
Seas Steamship Company N.V. and Statia Shipping N.V., which are inactive
Subsidiaries with virtually no assets and are currently being liquidated,
the Subsidiary Guarantors and Statia Canada will be, upon the closing of
the Acquisition, the only direct or indirect subsidiaries of Statia.
Statia will own, upon the closing of the Acquisition, 100% of the
outstanding capital stock and other securities evidencing equity ownership
of the Subsidiary Guarantors and Statia Canada, in each case (other than
the Lien granted to the Collateral Agent) free and clear of any pledge,
fiduciary transfer, security interest, claim, lien, limitation on voting
rights or encumbrance, and all such securities will have been duly
authorized and validly issued, fully paid and nonassessable and will not
have been issued in violation of, or subject to, any preemptive or similar
rights. Upon the closing of the Acquisition, there will not be any
outstanding rights, warrants or options to acquire, or instruments
convertible into or exchangeable for, any shares of capital stock or other
equity interest of any Subsidiary Guarantor and Statia Canada.
(iv) Each of the Issuers and the Subsidiary Guarantors has been duly
incorporated or organized, as the case may be, is validly existing as a
corporation in good standing under the laws of its respective jurisdiction
of incorporation and has all requisite corporate power and authority, and
all necessary authorizations, approvals, orders, licenses, certificates
and permits of and from regulatory or governmental officials, bodies and
tribunals, except where the failure to obtain such authorizations,
approvals, orders, licenses, certificates and permits would not result
<PAGE>
-11-
in a Material Adverse Effect, to (a) carry on its business as it is
currently being conducted and as described in the Offering Memorandum and
(b) own, lease, license and operate its respective properties in
accordance with its business as currently conducted. Each of the Issuers
and the Subsidiary Guarantors is duly qualified and in good standing as a
foreign corporation authorized to do business in each jurisdiction in
which the nature of its business or its ownership or leasing of property
requires such qualification, except where the failure to be so qualified
would not, either individually or in the aggregate, result in a Material
Adverse Effect. A "Material Adverse Effect" means any material adverse
effect on the business, condition (financial or other), properties,
assets, liabilities, results of operations or prospects of the Issuers and
the Subsidiary Guarantors taken as a whole.
(v) Each of the Issuers and the Subsidiary Guarantors has all
requisite corporate power and authority to execute, deliver and perform
all of its obligations under the Operative Documents and to consummate the
transactions contemplated by the Operative Documents, and, without
limitation, each of the Issuers has all requisite corporate power and
authority to issue, sell and deliver the Notes and each of the Subsidiary
Guarantors has all requisite corporate power and authority to execute,
deliver and perform all of its obligations under the Subsidiary
Guarantees.
(vi) This Agreement has been duly and validly authorized, executed
and delivered by each of the Issuers.
(vii) The Indenture has been, or upon the Closing Date will be, duly
and validly authorized by each of the Issuers and the Subsidiary
Guarantors and, when duly executed and delivered by each of the Issuers
and the Subsidiary Guarantors, will be a legal, valid and binding
obligation of each of the Issuers and the Subsidiary Guarantors,
enforceable against each of them in accordance with its terms, except that
enforceability of the Indenture may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general principles of equity and the
discretion of the court before which any proceedings therefor may be
brought. The Indenture, when executed and delivered, will conform in all
material respects to the description thereof in the Preliminary Offering
Memorandum and the Offering Memorandum.
<PAGE>
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(viii) The Series A First Mortgage Notes have been duly and validly
authorized for issuance and sale to the Purchaser by the Issuers and, when
issued, authenticated and delivered by the Issuers against payment by the
Purchaser in accordance with the terms of this Agreement and the
Indenture, the Series A First Mortgage Notes will be legal, valid and
binding obligations of the Issuers, entitled to the benefits of the
Indenture and enforceable against the Issuers in accordance with their
terms, except that enforceability of the Series A First Mortgage Notes may
be limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights generally and
by general principles of equity and the discretion of the court before
which any proceedings therefor may be brought. The Series A First Mortgage
Notes, when issued, authenticated and delivered, will conform in all
material respects to the description thereof in the Preliminary Offering
Memorandum and the Offering Memorandum.
(ix) The Series B First Mortgage Notes have been duly and validly
authorized for issuance by the Issuers and, when issued, authenticated and
delivered by the Issuers in accordance with the terms of the Exchange
Offer and the Indenture, the Series B First Mortgage Notes will be legal,
valid and binding obligations of the Issuers, entitled to the benefits of
the Indenture and enforceable against the Issuers in accordance with their
terms, except that enforceability of the Series B First Mortgage Notes may
be limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights generally and
by general principles of equity and the discretion of the court before
which any proceedings therefor may be brought. The Series B First Mortgage
Notes, when issued, authenticated and delivered, will conform in all
material respects to the description thereof in the Preliminary Offering
Memorandum and the Offering Memorandum.
(x) The Subsidiary Guarantees delivered on the Closing Date will be
duly and validly authorized by the Subsidiary Guarantors and, when
executed and delivered in accordance with the terms of the Indenture and
the Registration Rights Agreement, will be legal, valid and binding
obligations of the Subsidiary Guarantors, enforceable against each of them
in accordance with their terms, except that (a) enforceability of the
Subsidiary Guarantees may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general principles of
<PAGE>
-13-
equity and (b) any rights to indemnity or contribution thereunder may be
limited by federal and state securities laws and public policy
considerations and the discretion of the court before which any
proceedings therefor may be brought. The Subsidiary Guarantees, when
executed and delivered, will conform in all material respects to the
description thereof in the Preliminary Offering Memorandum and the
Offering Memorandum.
(xi) Each of the Security Documents has been, or upon the Closing
Date, will be, duly and validly authorized by each of the Issuers and
Subsidiary Guarantors party thereto and, as of the Closing Date, will have
been duly executed and delivered by each of the Issuers and the Subsidiary
Guarantors party thereto and, upon such execution and delivery, each
Security Document will constitute the legal, valid and binding obligation
of each of the Issuers and the Subsidiary Guarantors party thereto,
enforceable against each of them in accordance with its terms, except that
(a) enforceability of the Security Documents may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and by general principles of
equity and the discretion of the court before which any proceedings
therefor may be brought and (b) any rights to indemnity or contribution
thereunder may be limited by federal and state securities laws and public
policy considerations. The Security Documents, when executed and
delivered, will conform in all material respects to the description
thereof in the Preliminary Offering Memorandum and the Offering
Memorandum.
(xii) The Registration Rights Agreement has been, or upon the
Closing Date, will be, duly and validly authorized, executed and delivered
by each of the Issuers and the Subsidiary Guarantors and is a legal, valid
and binding obligation of each of the Issuers and the Subsidiary
Guarantors, enforceable against each of them in accordance with its terms,
except that (a) enforceability of the Registration Rights Agreement may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting the enforcement of creditors' rights generally and by
general principles of equity and the discretion of the court before which
any proceedings therefor may be brought and (b) any rights to indemnity or
contribution thereunder may be limited by federal and state securities
laws and public policy considerations. The Registration Rights Agreement
will conform in all material respects to
<PAGE>
-14-
the description thereof in the Preliminary Offering Memorandum and the
Offering Memorandum.
(xiii) The Transaction Documents have been duly and validly
authorized, executed and delivered by each of the Issuers and the
Subsidiary Guarantors, party thereto, and constitute the legal, valid and
binding obligations of the Issuers and the Subsidiary Guarantors, as
applicable, enforceable against the Issuers and the Subsidiary Guarantors,
as applicable, in accordance with their terms, except that (a)
enforceability of the Transaction Documents may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and by general principles of
equity and the discretion of the court before which any proceedings
therefor may be brought and (b) any rights to indemnity or contribution
thereunder may be limited by federal and state securities laws and public
policy considerations. The Transaction Documents conform in all material
respects to the description thereof in the Preliminary Offering Memorandum
and the Offering Memorandum.
(xiv) None of the Issuers or the Subsidiary Guarantors is (A) in
violation of its charter, constitutive documents or bylaws or (B) in
default (or, with notice or lapse of time or both, would be in default) in
the performance or observance of any obligation, agreement, covenant or
condition contained in any bond, debenture, note, indenture, mortgage,
deed of trust, loan agreement, note, lease, license, franchise agreement,
authorization, permit, certificate or other agreement or instrument to
which any of them is a party or by which any of them is bound or to which
any of their assets or properties is subject (collectively, "Material
Agreements"), or (C) in violation of any law, statute, rule, regulation,
judgment or court decree of any domestic or foreign court with
jurisdiction over any of them or any of their assets or properties or
other governmental or regulatory authority, agency or other body, that, in
the case of clauses (B) and (C) above, would result in a Material Adverse
Effect. There exists no condition that, with notice, the passage of time
or otherwise, would constitute a default by any of the Issuers or the
Subsidiary Guarantors under any such document or instrument or result in
the imposition of any penalty or the acceleration of any indebtedness,
other than penalties, defaults or conditions that would not result in a
Material Adverse Effect.
<PAGE>
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(xv) None of (A) the execution, delivery or performance by the
Issuers and the Subsidiary Guarantors (as applicable) of this Agreement
and the other Operative Documents, (B) the execution, delivery and
performance by the Issuers and the Subsidiary Guarantors of the
Transaction Documents to which they are a party or (C) the consummation of
the Acquisition and the transactions contemplated thereby does or will
violate, conflict with or constitute a breach of any of the terms or
provisions of, or a default under (or an event that with notice or the
lapse of time, or both, would constitute a default), or require consent
under, or result in the creation or imposition of a lien, charge or
encumbrance on any property or assets of the Issuers or any of the
Subsidiary Guarantors or an acceleration of any indebtedness of any of the
Issuers or the Subsidiary Guarantors pursuant to, (i) the charter,
constitutive documents or bylaws of either of the Issuers or any of the
Subsidiary Guarantors, (ii) any Material Agreement, (iii) any statute,
rule or regulation applicable to any of the Issuers or the Subsidiary
Guarantors or their assets or properties or (iv) any judgment, order or
decree of any domestic or foreign court or governmental agency or
authority having jurisdiction over any of the Issuers or the Subsidiary
Guarantors or their assets or properties that, in the case of clauses
(ii), (iii) and (iv) above, would result in a Material Adverse Effect.
Assuming the accuracy of the representations and warranties of the
Purchaser in Section 5(b) of this Agreement, no consent, approval,
authorization or order of, or filing, registration, qualification, license
or permit of or with, any court or governmental agency, body or
administrative agency, domestic or foreign, is required to be obtained or
made by the Issuers for (1) the execution, delivery and performance by the
Issuers and the Subsidiary Guarantors of this Agreement or any of the
other Operative Documents, (2) the execution, delivery and performance by
the Issuers of the Transaction Documents or (3) the consummation of the
Acquisition or any of the transactions contemplated thereby, except (i)
such as have been or will be obtained or made prior to Closing, (ii)
registration of the Notes under the Act pursuant to the Registration
Rights Agreement or (iii) such as may be required by the NASD. No consents
or waivers from any other person or entity are required for the execution,
delivery and performance of this Agreement or any of the other Operative
Documents, the execution, delivery and performance of the Transaction
Documents or the consummation of the Acquisition or any of the
transactions contemplated thereby,
<PAGE>
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other than such consents and waivers as have been or will be obtained.
(xvi) There is (i) no action, suit or proceeding before or by any
court, arbitrator or governmental agency, body or official, domestic or
foreign, now pending or, to the knowledge of the Issuers or the Subsidiary
Guarantors, threatened or contemplated to which any of the Issuers or the
Subsidiary Guarantors is or may be a party or to which the business,
assets or property of such person is or may be subject, (ii) no statute,
rule, regulation or order that has been enacted, adopted or issued or, to
the knowledge of the Issuers or the Subsidiary Guarantors, that has been
proposed by any governmental body or agency, domestic or foreign, (iii) no
injunction, restraining order or order of any nature by a federal or state
court or foreign court of competent jurisdiction to which any of the
Issuers or the Subsidiary Guarantors is or may be subject that, (x) in the
case of clause (i) above, except for those described in the Offering
Memorandum under the caption "Business -- Legal Proceedings," if
determined adversely to the Issuers or the Subsidiary Guarantors, would be
reasonably likely to, either individually or in the aggregate, (1) result
in a Material Adverse Effect, or (2) interfere with or adversely affect
the issuance of the Notes or the Subsidiary Guarantees in any jurisdiction
or adversely affect the consummation of the transactions contemplated by
any of the Operative Documents or the Transaction Documents and, (y) in
the case of clauses (ii) and (iii) above, would, either individually or in
the aggregate, (1) result in a Material Adverse Effect, or (2) interfere
with or adversely affect the issuance of the Notes or the Subsidiary
Guarantees in any jurisdiction or adversely affect the consummation of the
transactions contemplated by any of the Operative Documents or the
Transaction Documents. Every request of any securities authority or agency
of any jurisdiction for additional information with respect to Notes that
has been received by the Issuers, Subsidiary Guarantors or their counsel
prior to the date hereof, has been, or will prior to the Closing Date be,
complied with in all material respects.
(xvii) The Issuers have delivered to the Purchaser true and correct
executed copies of the Transaction Documents and there have been no
amendments, alterations or modifications thereto or waivers of any of the
provisions thereof. The representations and warranties of the Issuers set
forth in the Transaction Documents are true and correct as of the date of
this Agreement and will be true and correct as of
<PAGE>
-17-
the Closing Date (except to the extent that any such representation or
warranty was expressly made as of any other date, in which case such
representation and warranty was true and correct as of such date).
(xviii) No labor disturbance by the employees of any of the Issuers
or the Subsidiary Guarantors exists or, to the actual knowledge of the
Issuers or the Subsidiary Guarantors, is imminent that might reasonably be
expected to have a Material Adverse Effect; the Issuers and the Subsidiary
Guarantors are in compliance in all respects with, as applicable and
except where a failure to so comply would not have a Material Adverse
Effect, (1) all presently applicable provisions of the Employee Retirement
Income Security Act of 1974, as amended, including the regulations and
published interpretations thereunder ("ERISA") or (2) any similar
Netherlands Antilles or Canadian federal or provincial legislation; no
"reportable event" (as defined in ERISA) has occurred with respect to any
"pension plan" (as defined in ERISA) for which the Issuers or the
Subsidiary Guarantors would have any liability; none of the Issuers or the
Subsidiary Guarantors has incurred or expects to incur liability under (i)
Title IV of ERISA with respect to termination of, or withdrawal from, any
"pension plan" or (ii) Sections 412 or 4971 of the Internal Revenue Code
of 1986, as amended, including the regulations and published
interpretations thereunder (the "Code"); each "pension plan" that is
maintained or contributed to by the Issuers or the Subsidiary Guarantors
that is intended to be qualified under Section 401(a) of the Code is so
qualified and nothing has occurred, whether by action or by failure to
act, that would cause the loss of such qualification; and each employee
benefit or pension plan that the Issuers or the Subsidiary Guarantors (as
applicable) maintain or to which they are obligated to contribute and that
is subject to the Pension Benefits Standards Act, 1985 (Canada), to any
other Canadian federal law regulating employee benefit or pension plans or
to any provincial law regulating employee benefit plans (a "Canadian
Plan") is in compliance in all material respects with such laws, to the
extent applicable. None of the Issuers or the Subsidiary Guarantors has
incurred any material liability under any such Canadian Plan or otherwise
on account of any failure to meet the contribution or minimum funding
requirements applicable to, or the administration or termination of, any
such Canadian Plan, and no event has occurred and no conditions exist that
present a material risk that the Issuers and the Subsidiary
<PAGE>
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Guarantors will incur liabilities on account of the foregoing
circumstances that are material in the aggregate.
(xix) Except as set forth in the Offering Memorandum, each of the
Issuers and the Subsidiary Guarantors (i) is in compliance with, or
subject to costs or liabilities under, all local, state, provincial,
federal and foreign laws, regulations, rules of common law, orders and
decrees, as in effect as of the date hereof, and any present judgments and
injunctions issued or promulgated thereunder relating to pollution or
protection of public and employee health and safety and the environment
applicable to it or its business or operations or ownership or use of its
property ("Environmental Laws"), other than noncompliance or such costs or
liabilities that would not result in a Material Adverse Effect, and (ii)
possesses all permits, licenses or other approvals required under
applicable Environmental Laws, other than permits, licenses or approvals
the lack of which would not result in a Material Adverse Effect. All
currently pending and, to their knowledge, threatened proceedings, notices
of violation, demands, notices of potential responsibility or liability,
suits and existing environmental conditions with respect to which the
Issuers or the Subsidiary Guarantors could reasonably be expected to have
any material liability are fully and accurately described in all material
respects in the Offering Memorandum.
(xx) Each of the Issuers and the Subsidiary Guarantors has (i) good
and marketable title to all of the properties and assets described in the
Offering Memorandum as owned by it and good and marketable title to the
leasehold estates in the real and personal property described in the
Offering Memorandum as leased by it, free and clear of all Liens, except
for Liens described in the Offering Memorandum, Liens permitted under the
Indenture and the Security Documents and such Liens as would not have a
Material Adverse Effect, (ii) all licenses, certificates, permits,
authorizations, approvals, franchises and other rights from, and has made
all declarations and filings with, all federal, state, local and foreign
authorities, all self-regulatory authorities and all courts and other
tribunals (each, an "Authorization") necessary to engage in the business
conducted by it in the manner described in the Offering Memorandum, except
where failure to hold such Authorizations would not have a Material
Adverse Effect, and (iii) no reason to believe that any governmental body
or agency, domestic or foreign, is considering limiting, suspending or
revoking any such
<PAGE>
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Authorization, other than revocations that would not result in a Material
Adverse Effect. Except where the failure to be in full force and effect
would not have a Material Adverse Effect, all such Authorizations are
valid and in full force and effect and each of the Issuers and the
Subsidiary Guarantors is in compliance in all material respects with the
terms and conditions of all such Authorizations and with the rules and
regulations of the regulatory authorities having jurisdiction with respect
to such Authorizations. All leases to which any of the Issuers or the
Subsidiary Guarantors is a party are valid and binding, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws now or hereafter affecting the enforcement of
creditors' rights generally and by general principles of equity and the
discretion of the court before which any proceedings therefor may be
brought and no default has occurred and is continuing thereunder, other
than defaults that would not result in a Material Adverse Effect.
(xxi) Each of the Issuers and the Subsidiary Guarantors owns,
possesses or has the right to employ all patents, patent rights, licenses,
inventions, copyrights, know-how (including trade secrets and other
unpatented and/or unpatentable proprietary or confidential information,
systems or procedures), trademarks, service marks and trade names
(collectively, the "Intellectual Property") necessary to conduct the
businesses operated by it as described in the Offering Memorandum, other
than such Intellectual Property that would not result in a Material
Adverse Effect. None of the Issuers or the Subsidiary Guarantors has
received any notice of infringement of or conflict with (and neither knows
of any such infringement or a conflict with) asserted rights of others
with respect to any of the foregoing that, if such assertion of
infringement or conflict were sustained, would have a Material Adverse
Effect. The use of the Intellectual Property in connection with the
business and operations of the Issuers and the Subsidiary Guarantors does
not infringe on the rights of any person.
(xxii) All tax returns required to be filed by each of the Issuers
and the Subsidiary Guarantors have been filed in all jurisdictions where
such returns are required to be filed; and all taxes, including
withholding taxes, penalties and interest, assessments, fees and other
charges due or claimed to be due from such entities or that are due and
payable have been paid, other than those being contested in good faith and
for which reserves have been provided in
<PAGE>
-20-
accordance with generally accepted accounting principles or those
currently payable without penalty or interest, except where the failure to
make any such filing or payment would not have a Material Adverse Effect.
To the knowledge of each of the Issuers and the Subsidiary Guarantors,
there are no material proposed additional tax assessments against any of
them or their assets or property.
(xxiii) None of the Issuers or the Subsidiary Guarantors is an
"investment company" or a company "controlled" by an "investment company"
within the meaning of the Investment Company Act of 1940, as amended (the
"Investment Company Act"), or analogous foreign laws and regulations.
(xxiv) Except with respect to the Notes, there are no holders of
securities of any of the Issuers or the Subsidiary Guarantors who have, or
will have upon consummation of the Acquisition, the right to request or
demand that any of the Issuers or the Subsidiary Guarantors register under
the Act or analogous foreign laws and regulations any of such securities
held by any such holders.
(xxv) Each of the Issuers and the Subsidiary Guarantors maintains a
system of internal accounting controls sufficient to provide reasonable
assurance that: (A) transactions are executed in accordance with
management's general or specific authorizations; (B) transactions are
recorded as necessary to permit preparation of its financial statements in
conformity with United States generally accepted accounting principles and
to maintain accountability for assets; (C) access to assets is permitted
only in accordance with management's general or specific authorization;
and (D) the recorded accountability for its assets is compared with the
existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
(xxvi) Each of the Issuers and the Subsidiary Guarantors maintains
insurance covering its properties, assets, operations, personnel and
businesses, and such insurance is of such type and in such amounts in
accordance with customary industry practice to protect the Issuers and the
Subsidiary Guarantors and their businesses. None of the Issuers or the
Subsidiary Guarantors has received notice from any insurer or agent of
such insurer that any material capital improvements or other material
expenditures will have to be made in order to continue any insurance
maintained by any of them other than capital improvements and
<PAGE>
-21-
other expenditures that have been budgeted by the Issuers and the
Subsidiary Guarantors, as the case may be.
(xxvii) None of the Issuers, the Subsidiary Guarantors or their
Affiliates (as defined in Rule 501(b) of Regulation D under the Act) has
(A) taken, directly or indirectly, any action designed to, or that might
reasonably be expected to, cause or result in stabilization or
manipulation of the price of any security of the Issuers to facilitate the
sale or resale of the Series A First Mortgage Notes or (B) since the date
of the Preliminary Offering Memorandum (x) sold, bid for, purchased or
paid any person any compensation for soliciting purchases of the Series A
First Mortgage Notes in a manner that would require registration of the
Series A First Mortgage Notes under the Act or (y) paid or agreed to pay
to any person any compensation for soliciting another to purchase any
other securities of any of the Issuers or the Subsidiary Guarantors in a
manner that would require registration of the Series A First Mortgage
Notes under the Act.
(xxviii) No registration under the Act of the Series A First
Mortgage Notes is required for the sale of the Series A First Mortgage
Notes to the Purchaser as contemplated by this Agreement or for the Exempt
Resales, assuming in each case that (A) the purchasers who buy the Series
A First Mortgage Notes in the Exempt Resales are either QIBs or Accredited
Investors and (B) the accuracy of and compliance with the Purchaser's
representations, warranties and covenants contained in Section 5(b) of
this Agreement. No form of general solicitation or general advertising
(prohibited by the Act in connection with offers or sales such as the
Exempt Resales) was used by the Issuers, any of the Subsidiary Guarantors
or any of their representatives in connection with the offer and sale of
any of the Series A First Mortgage Notes or in connection with Exempt
Resales, including, but not limited to, articles, notices or other
communications published in any newspaper, magazine or similar medium or
broadcast over television or radio, or any seminar or meeting whose
attendees have been invited by any general solicitation or general
advertising.
(xxix) The execution and delivery of this Agreement, the other
Operative Documents and the sale of the Notes and Subsidiary Guarantees to
be purchased by the QIBs and the Accredited Investors will not involve any
prohibited transaction within the meaning of Section 406(a) of ERISA or
Section 4975(c)(1)(A)-(D) of the Code. The representation
<PAGE>
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made by each of the Issuers and the Subsidiary Guarantors in the preceding
sentence is made in reliance upon and subject to the accuracy of, and
compliance with, the representations and covenants made or deemed made by
the QIBs and the Accredited Investors as set forth in the Offering
Memorandum under the caption "Transfer Restrictions."
(xxx) Each of the Preliminary Offering Memorandum and the Offering
Memorandum, as of its date, and each amendment or supplement thereto, as
of its date, contain the information specified in, and meet the
requirements of, Rule 144A(d)(4) under the Act.
(xxxi) As of December 31, 1995, neither of the Issuers nor any of
the Subsidiary Guarantors had any material liabilities or obligations,
direct or contingent, that were not set forth in Statia's consolidated
balance sheet as of December 31, 1995 or in the notes thereto. Since
December 31, 1995 and up to the Closing Date, except as set forth in the
Offering Memorandum, (a) none of the Issuers or the Subsidiary Guarantors
has (1) incurred any liabilities or obligations, direct or contingent,
that are not in the ordinary course of business that would have a Material
Adverse Effect or (2) entered into any material transaction not in the
ordinary course of business, (b) there has not been any event or
development in respect of the business, development or financial condition
of either of the Issuers that would, either individually or in the
aggregate, result in a Material Adverse Effect and (c) there has been no
dividend or distribution of any kind declared, paid or made by either of
the Issuers or any of the Subsidiary Guarantors on any class of their
capital stock.
(xxxii) Neither of the Issuers nor any of the Subsidiary Guarantors
(nor any agent thereof acting on behalf of it) has taken, and none of them
will take, any action that might cause this Agreement or the issuance or
sale of the Notes to violate Regulation G (12 C.F.R. Part 207), Regulation
T (12 C.F.R. Part 220), Regulation U (12 C.F.R. Part 221) or Regulation X
(12 C.F.R. Part 224) of the Board of Governors of the Federal Reserve
System or analogous foreign laws and regulations, in each case as in
effect, or as the same may hereafter be in effect, on the Closing Date.
(xxxiii) The accountants who have certified or shall certify the
financial statements included or to be included as part of the Offering
Memorandum are independent accountants within the meaning of the Act. The
historical
<PAGE>
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financial statements of the Issuers and the pro forma financial statements
of the Issuers comply as to form in all material respects with the
requirements applicable to registration statements on Form S-1 under the
Act and present fairly in all material respects the financial position and
results of operations of the Issuers at the respective dates and for the
respective periods indicated. Such financial statements have been prepared
in accordance with United States generally accepted accounting principles
applied on a consistent basis throughout the periods presented (except as
disclosed in the Offering Memorandum) and comply as to form with the rules
and regulations promulgated under the Act. The pro forma financial
statements included in the Offering Memorandum have been prepared on a
basis consistent with such historical statements, except for the pro forma
adjustments specified therein, and give effect to assumptions made on a
reasonable basis and present fairly in all material respects the
historical and proposed transactions contemplated by this Agreement, the
other Operative Documents and the Transaction Documents and comply as to
form with the rules and regulations promulgated under the Act. The other
financial and statistical information and data included in the Offering
Memorandum, historical and pro forma, are accurately presented in all
material respects and prepared on a basis consistent with the financial
statements and the books and records of the Issuers and the Subsidiary
Guarantors.
(xxxiv) None of the Issuers or the Subsidiary Guarantors (A) is
"insolvent" as that term is defined in Section 101(32) of the United
States Bankruptcy Code (the "Bankruptcy Code") (11 U.S.C. ss. 101(32)),
Section 2 of the Uniform Fraudulent Transfer Act ("UFTA") or Section 2 of
the Uniform Fraudulent Conveyance Act ("UFCA"), (B) is an "insolvent
person" as that term is defined in Section 2 of the Bankruptcy and
Insolvency Act (Canada) (the "BIA") or has committed an "act of
bankruptcy" for the purposes of Section 42 of the BIA or is the "debtor
company" as defined in Section 2 of the Companies' Creditors Arrangement
Act (Canada), (C) has "unreasonably small capital" as that term is used in
Section 548(a)(2)(ii) of the Bankruptcy Code or Section 5 of the UFCA, (D)
is engaged or about to engage in a business or transaction for which its
remaining property is "unreasonably small" in relation to the business or
transaction as that term is used in Section 4 of the UFTA or (E) is unable
to pay its debts as they mature or become due, within the meaning of
Section 548(a)(2)(B)(iii) of the
<PAGE>
-24-
Bankruptcy Code, Section 4 of the UFTA and Section 6 of the UFCA. Each of
the Issuers and Subsidiary Guarantors now owns assets having a value both
at "fair valuation" and at "present fair saleable value" greater than the
amount required to pay its "debts" as such terms are used in Section 2 of
the UFTA and Section 2 of the UFCA. None of the Issuers or the Subsidiary
Guarantors will be rendered insolvent by the execution and delivery of any
of the Operative Documents or Transaction Documents or by the transactions
contemplated hereunder or thereunder.
(xxxv) Except as described in the section entitled "Certain
Relationships and Related Transactions" in the Offering Memorandum, there
are no contracts, agreements or understandings between the Issuers or any
of the Subsidiary Guarantors and any other person other than the Purchaser
that would give rise to a valid claim against the Issuers, the Subsidiary
Guarantors or the Purchaser for a brokerage commission, finder's fee or
like payment in connection with the issuance, purchase and sale of the
Notes.
(xxxvi) No consent, approval, authorization, exemption, order or
decree of any Canadian court or governmental or regulatory agency or body
not otherwise obtained prior to the Closing Date is required to permit
Statia Canada to effect payments of principal of, premium and interest on
the Notes, if any, or any payments on a non-judicial winding-up of Statia
Canada, in United States dollars.
(xxxvii) The Issuers have the authorized, issued and outstanding
capitalization set forth in the Offering Memorandum under the caption "Pro
Forma Capitalization"; all of the outstanding capital stock of the Issuers
has been duly authorized and validly issued, is or will be on the Closing
Date fully paid and nonassessable and was not issued in violation of any
preemptive or similar rights.
(xxxviii) The statistical and market-related data included in the
Offering Memorandum are based on or derived from sources that the Issuers
believe to be reliable and accurate in all material respects and represent
the Issuers' good faith estimates that are made on the basis of data
derived from such sources.
(xxxix) Each certificate signed by any officer of the Issuers or any
of the Subsidiary Guarantors and delivered to the Purchaser or counsel for
the Purchaser pursuant to, or in connection with, this Agreement shall be
deemed to be a
<PAGE>
-25-
representation and warranty by the Issuers or the Subsidiary Guarantors to
the Purchaser as to the matters covered by such certificate.
(xl) Upon execution and delivery by the parties thereto on the
Closing Date and assuming due recording, each Mortgage will create and
constitute (A) a valid and enforceable mortgage lien on the real property
and fixtures described therein (the "Real Property") and (B) a valid and
enforceable security interest in such of the Mortgaged Property (as
defined in the applicable Mortgages), other than the Real Property, in
which a security interest can be created under the laws of the Netherlands
Antilles and Canada, as the case may be, where such Mortgaged Property is
located (the "Personal Property"), in each case subject to no liens other
than Prior Liens (as defined in the applicable Mortgage). The Mortgages
will be in proper form under the laws of the Netherlands Antilles and the
Province of Nova Scotia, Canada, as the case may be, to be accepted for
recording in the provinces or other appropriate jurisdictions where the
Mortgaged Property encumbered thereby is located.
(xli) Upon execution and delivery of the Security Agreements by the
Issuers and the Subsidiary Guarantors on the Closing Date, the Security
Agreements will create and constitute valid, enforceable and, subject to
all required filings contemplated by clause (xliii) below and actions
contemplated by clause (xliv) below, perfected security interests in,
liens on or pledges of all of the Pledged Collateral (as defined in the
Security Agreements collectively).
(xlii) Upon (A) execution and delivery of the Security Documents
(other than the Securities Pledge Agreements) by the appropriate Issuers
and Subsidiary Guarantors on the Closing Date, and (B)(1) with respect to
the Mortgaged Property (as defined in each Mortgage encumbering Real
Property located in Canada), the registration of each such Mortgage with
(x) the local registry office in the local jurisdiction in which such
Mortgaged Property is located and (y) the Central Registry for the
Corporation Securities Registration Act and (2) with respect to the
Mortgaged Property (as defined in each mortgage encumbering Real Property
located in the Netherlands Antilles), the registration of each such
Mortgage with the Registrar of Mortgages in the county in which such
Mortgaged Property is located, the security interest, lien or pledge
created by
<PAGE>
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the Security Documents (other than the Securities Pledge Agreements) in
the Collateral encumbered thereby will be a perfected security interest
prior to all other claims or security interests therein, except for Prior
Liens permitted by the applicable Security Document.
(xliii) Upon (A) execution and delivery of the Securities Pledge
Agreements by the appropriate Issuers and Subsidiary Guarantors on the
Closing Date, (B) notification by each Pledgor (as defined in each
Securities Pledge Agreement delivered on the Closing Date substantially in
the form of Exhibit I-1 of the Indenture) to the issuers of the Pledged
Shares (as defined in each such Securities Pledge Agreement) pledged by
such Pledgor and acknowledgment of such pledge by the issuers thereof, and
(C) delivery of certificates representing the Pledged Shares provided that
the Collateral Agent holds such certificates in accordance with applicable
Securities Pledge Agreement), the Securities Pledge Agreements will create
and constitute a valid, enforceable and perfected security interest in,
lien on and pledge of all of the Pledged Collateral (as defined in the
Securities Pledge Agreements) prior to all other claims or security
interests therein.
(xliv) Each of the Issuers and the Subsidiary Guarantors represents,
warrants and covenants that the Mortgaged Property comprises all of the
Real Property owned and/or leased by the appropriate Issuer and Subsidiary
Guarantor, as reflected in the applicable registry, other than the Real
Property located in Brownsville, Texas.
(xlv) Each of the Issuers and the Subsidiary Guarantors represents,
warrants and covenants that all of the assets (other than the assets of
the Brownsville Facility (as defined in the Indenture), vehicles, marine
vessels and emergency spill response equipment) of the Issuers and the
Subsidiary Guarantors have been legally and validly pledged in accordance
with the Security Documents.
(xlvi) Each of the Issuers and Subsidiary Guarantors represents and
warrants that the issuance of Notes and the entering into of the Operative
Documents is in its corporate interest and does not prejudice the rights
of its creditors.
Each of the Issuers and the Subsidiary Guarantors acknowledges that
the Purchaser and, for purposes of the opinions to be delivered to the Purchaser
pursuant to Section 8 of this Agreement, the various law firms acting as counsel
to the Issuers
<PAGE>
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and each of the Subsidiary Guarantors and counsel to the Purchaser will rely
upon the accuracy and truth of the foregoing representations and the Issuers and
each Subsidiary Guarantor hereby consent to such reliance.
(b) The Purchaser represents, warrants and covenants (as to itself
only) to the Issuers that it is a QIB with such knowledge and experience in
financial and business matters as are necessary in order to evaluate the merits
and risks of an investment in the securities. The Purchaser represents, warrants
and agrees (as to itself only) with the Issuers that (i) it has not and will not
solicit offers for, or offer or sell, the Notes by any form of general
solicitation or general advertising (as those terms are used in Regulation D
under the Act) or in any manner involving a public offering within the meaning
of Section 4(2) of the Act and (ii) it has and will solicit offers for the Notes
only from, and will offer the Notes only to (x) persons whom the Purchaser
reasonably believes to be QIBs or, if any such person is buying for one or more
institutional accounts for which such person is acting as fiduciary or agent,
only when such person has represented to the Purchaser that each such account is
a QIB, to whom notice has been given that such sale or delivery is being made in
reliance on Rule 144A, and, in each case, in transactions under Rule 144A, (y) a
limited number of other institutional investors reasonably believed by the
Purchaser to be Institutional Accredited Investors that, prior to their purchase
of the Notes, deliver to the Purchaser a letter containing the representations
and agreements set forth in Annex B to the Offering Memorandum or (z) persons
other than U.S. persons outside the U.S. in reliance on Regulation S.
The Purchaser represents and warrants that the source of funds being
used by it to acquire the Notes does not include the assets of any "employee
benefit plan" (within the meaning of Section 3 of ERISA) or any "plan" (within
the meaning of Section 4975 of the Code).
The Purchaser understands that the Issuers and, for purposes of the
opinion to be delivered to them pursuant to Section 8(f) hereof, counsel to the
Issuers, will rely upon the accuracy and truth of the foregoing representations,
and the Purchaser hereby consents to such reliance.
6. INDEMNIFICATION. (a) Each of the Issuers jointly and severally
agrees to indemnify and hold harmless the Purchas- er, each person, if any, who
controls the Purchaser within the meaning of Section 15 of the Act or Section
20(a) of the Exchange Act, the agents, employees, officers and directors of the
Pur-
<PAGE>
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chaser and the agents, employees, officers and directors of any such controlling
person from and against any and all losses, liabilities, claims, damages and
expenses whatsoever (including but not limited to reasonable attorneys' fees and
any and all reasonable expenses whatsoever incurred in investigating, preparing
or defending against any litigation, commenced or threatened, or any claim
whatsoever, and any and all amounts paid in settlement of any claim or
litigation) to which they or any of them may become subject under the Act, the
Exchange Act or otherwise insofar as such losses, liabilities, claims, damages
or expenses (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact contained in the
Preliminary Offering Memorandum or the Offering Memorandum, or in any supplement
thereto or amendment thereof, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided, however, that the Issuers
will not be liable (i) in any such case to the extent, but only to the extent,
that any such loss, liability, claim, damage or expense arises out of or is
based upon any such untrue statement or alleged untrue statement or omission or
alleged omission made therein in reliance upon and in conformity with written
information relating to the Purchaser furnished to the Issuers by or on behalf
of the Purchaser expressly for use therein or (ii) with respect to the
Preliminary Offering Memorandum, to the extent that any such loss, claim, damage
or liability arises solely from the fact that the Purchaser sold Series A First
Mortgage Notes to a person to whom there was not sent or given, on or prior to
the written confirmation of such sale, a copy of the Offering Memorandum, as
amended and supplemented, if the Issuers shall have previously furnished copies
thereof to the Purchaser in accordance with this Agreement and the Offering
Memorandum, as amended and supplemented, would have corrected any such untrue
statement or omission; provided, however, that the Issuers shall sustain the
burden of proving that the Purchaser sold Series A First Mortgage Notes to the
Person alleging such loss, claim, damage or expense without sending or giving,
at or prior to the written confirmation of such sale, a copy of the Offering
Memorandum. This indemnity agreement will be in addition to any liability that
the Issuers may otherwise have, including, but not limited to, under this
Agreement.
(b) The Purchaser agrees to indemnify and hold harmless the Issuers,
each person, if any, who controls the Issuers within the meaning of Section 15
of the Act or Section 20(a) of the Exchange Act, and each of their agents,
employees,
<PAGE>
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officers and directors and the agents, employees, officers and directors of such
controlling person from and against any losses, liabilities, claims, damages and
reasonable expenses whatsoever (including but not limited to reasonable
attorneys' fees and any and all reasonable expenses whatsoever incurred in
investigating, preparing or defending against any litigation, commenced or
threatened, or any claim whatsoever and any and all reasonable amounts paid in
settlement of any claim or litigation) to which they or any of them may become
subject under the Act, the Exchange Act or otherwise insofar as such losses,
liabilities, claims, damages or expenses (or actions in respect thereof) arise
out of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in the Preliminary Offering Memorandum or the Offering
Memorandum, or in any amendment thereof or supplement thereto, or arise out of
or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading, in
each case to the extent, but only to the extent, that any such loss, liability,
claim, damage or expense arises out of or is based upon any untrue statement or
alleged untrue statement or omission or alleged omission made therein in
reliance upon and in conformity with written information relating to the
Purchaser furnished to the Issuers by the Purchaser expressly for use therein.
The Issuers and the Purchaser acknowledge that the information set forth in
Section 9 is the only information furnished in writing by the Purchaser to the
Issuers expressly for use in the Offering Memorandum.
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, suit or proceeding
(collectively, an "action"), such indemnified party shall, if a claim in respect
thereof is to be made against the indemnifying party under such subsection,
notify each party against whom indemnification is to be sought in writing of the
commencement of such action (but the failure so to notify an indemnifying party
shall not relieve such indemnifying party from any liability that it may have
under this Section 6 except to the extent that it has been prejudiced in any
material respect by such failure or from any liability which it may otherwise
have). In case any such action is brought against any indemnified party, and it
notifies an indemnifying party of the commencement of such action, the
indemnifying party will be entitled to participate in such action, and to the
extent it may elect by written notice delivered to the indemnified party
promptly after receiving the aforesaid notice from such indemnified party, to
assume the defense of such action with counsel
<PAGE>
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satisfactory to such indemnified party. Notwithstanding the foregoing, the
indemnified party or parties shall have the right to employ its or their own
counsel in any such action, but the fees and expenses of such counsel shall be
at the expense of such indemnified party or parties unless (i) the employment of
such counsel shall have been authorized in writing by the indemnifying parties
in connection with the defense of such action, (ii) the indemnifying parties
shall not have employed counsel to take charge of the defense of such action
within a reasonable time after notice of commencement of the action, or (iii)
such indemnified party or parties shall have reasonably concluded that there may
be defenses available to it or them that are different from or additional to
those available to one or all of the indemnifying parties (in which case the
indemnifying parties shall not have the right to direct the defense of such
action on behalf of the indemnified party or parties), in any of which events
such fees and expenses of counsel shall be borne by the indemnifying parties. In
no event shall the indemnifying party be liable for the fees and expenses of
more than one counsel (together with appropriate local counsel) at any time for
all indemnified parties in connection with any one action or separate but
substantially similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. Anything in this subsection to
the contrary notwithstanding, an indemnifying party shall not be liable for any
settlement of any claim or action effected without its written consent;
provided, however, that such consent was not unreasonably withheld.
7. CONTRIBUTION. In order to provide for contribution in
circumstances in which the indemnification provided for in Section 6 of this
Agreement is for any reason held to be unavailable from the indemnifying party,
or is insufficient to hold harmless a party indemnified under Section 6 of this
Agreement, the Issuers and the Purchaser shall contribute to the aggregate
losses, claims, damages, liabilities and expenses of the nature contemplated by
such indemnification provision (including any reasonable investigation, legal
and other expenses incurred in connection with, and any amount paid in
settlement of, any action or any claims asserted) to which the Issuers and the
Purchaser may be subject in such proportion as is appropriate to reflect the
relative benefits received by the Issuers, on the one hand, and the Purchaser,
on the other hand, from the offering of the Series A First Mortgage Notes or, if
such allocation is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to above but also
the relative fault of the Issuers, on the one hand, and the Purchaser, on the
other hand, in connection with
<PAGE>
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the statements or omissions that resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Issuers, on the one hand, and the
Purchaser, on the other hand, shall be deemed to be in the same proportion as
(x) the total proceeds from the offering of Series A First Mortgage Notes (net
of discounts and commissions but before deducting expenses) received by the
Issuers and (y) the total discounts and commissions received by the Purchaser as
set forth in the table on the cover page of the Offering Memorandum. The
relative fault of the Issuers, on the one hand, and the Purchaser, on the other
hand, shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Issuers
or the Purchaser and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission or
alleged statement or omission. The provisions set forth in Section 6 with
respect to notice of commencement of any action shall apply if a claim for
contribution is to be made under this Section 7; provided, however, that no
additional notice shall be required with respect to any action for which notice
has been given under Section 6 for purposes of indemnification.
The Issuers and the Purchaser agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation or by any other method of allocation that does not take into account
the equitable considerations referred to above. Notwithstanding the provisions
of this Section 7, (i) in no case shall the Purchaser be required to contribute
any amount in excess of the amount by which the total discount and commissions
applicable to the Series A First Mortgage Notes pursuant to this Agreement
exceeds the amount of any damages that the Purchaser have otherwise been
required to pay by reason of any untrue or alleged untrue statement or omission
or alleged omission and (ii) no person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 7, each person, if any, who
controls the Purchaser within the meaning of Section 15 of the Act or Section
20(a) of the Exchange Act shall have the same rights to contribution as the
Purchaser, and each person, if any, who controls the Issuers within the meaning
of Section 15 of the Act or Section 20(a) of the Exchange Act shall have the
same rights to contribution as the Issuers, subject in each case to clauses (i)
and (ii) of this Section 7. Any party entitled to contribution will, promptly
after receipt of notice of commencement of any action against
<PAGE>
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such party in respect of which a claim for contribution may be made against
another party or parties under this Section 7, notify such party or parties from
whom contribution may be sought, but the omission to so notify such party or
parties shall not relieve the party or parties from whom contribution may be
sought from any obligation it or they may have under this Section 7 or
otherwise. No party shall be liable for contribution with respect to any action
or claim settled without its written consent, provided, however, that such
written consent was not unreasonably withheld.
8. CONDITIONS OF PURCHASER'S OBLIGATIONS. The obligations of the
Purchaser to purchase and pay for the Se- ries A First Mortgage Notes, as
provided for in this Agreement, shall be subject to satisfaction of the
following conditions prior to or concurrently with such purchase:
(a) All of the representations and warranties of the Issuers
contained in this Agreement shall be true and correct on the date of this
Agreement and on the Closing Date. Each of the Issuers shall have
performed or complied with all of the agreements contained in this
Agreement and required to be performed or complied with by it at or prior
to the Closing Date.
(b) No stop order suspending the qualification or exemption from
qualification of the Series A First Mortgage Notes in any jurisdiction
shall have been issued and no proceeding for that purpose shall have been
commenced or shall be pending or threatened.
(c) No action shall have been taken and no statute, rule, regulation
or order shall have been enacted, adopted or issued by any governmental
agency that would, as of the Closing Date, prevent the issuance of the
Series A First Mortgage Notes or the consummation of the Acquisition or
the Exchange Offer; no action, suit or proceeding shall have been
commenced and be pending against or affecting or, to the best knowledge of
the Issuers and the Subsidiary Guarantors, threatened against the Issuers
and/or the Subsidiary Guarantors before any court or arbitrator or any
governmental body, agency or official that, if adversely determined, would
result in a Material Adverse Effect.
(d) Since December 31, 1995, except as contemplated by the Offering
Memorandum, neither of the Issuers nor any of the Subsidiary Guarantors
had any material liabilities or obligations, direct or contingent, that
were not set forth
<PAGE>
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in Statia's consolidated balance sheet as of December 31, 1995 or in the
notes thereto. Since December 31, 1995 and up to the Closing Date, except
as set forth in the Offering Memorandum, (a) none of the Issuers or the
Subsidiary Guarantors has (1) incurred any liabilities or obligations,
direct or contingent, that are material to any of them or (2) entered into
any material transaction not in the ordinary course of business, (b) there
has not been any event or development that would result in a Material
Adverse Effect and (c) there has been no dividend or distribution of any
kind declared, paid or made by either of the Issuers or any of the
Subsidiary Guarantors on any class of their capital stock.
(e) The Purchaser shall have received certificates, dated the
Closing Date, signed by (i) a Managing Director, Director, Chief Executive
Officer or any Executive Vice President or Senior Vice President and (ii)
the chief financial or accounting officer or director of each of the
Issuers confirming, as of the Closing Date, the matters set forth in
paragraphs (a), (b), (c) and (d) of this Section 8.
(f) The Purchaser shall have received on the Closing Date an opinion
dated the Closing Date, addressed to the Purchaser, of White & Case,
special counsel to the Issuers, in form and substance as set forth in
Exhibit B hereto.
(g) The Purchaser shall have received on the Closing Date an opinion
dated the Closing Date addressed to the Purchases, of Smeets Thesseling
Van Bokhorst Spigt, Netherlands Antilles counsel to the Issuers, in form
and substance as set forth in Exhibit C hereto.
(h) The Purchaser shall have received on the Closing Date an opinion
dated the Closing Date of Stewart McKelvey Stirling Scales, Nova Scotia
counsel to the Purchaser, in form and substance as set forth in Exhibit D
hereto.
(i) The Purchaser shall have received on the Closing Date an opinion
(satisfactory in form and substance to the Purchaser) dated the Closing
Date of Cahill Gordon & Reindel, special counsel to the Purchaser,
covering such matters as are customarily covered in such opinions.
(j) The Purchaser shall have received on the Closing Date an opinion
(satisfactory in form and substance to the Purchaser and counsel to the
Purchaser) of De Brauw Blackstone Westbroek, Netherlands Antilles counsel
to the
<PAGE>
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Purchaser, covering such matters as are customarily covered in such
opinions.
(k) The Purchaser shall have received on the Closing Date an opinion
(satisfactory in form and substance to the Purchaser and counsel to the
Purchaser) dated the Closing Date of McMillan Binch, Nova Scotia, Canadian
counsel to the Purchaser, covering such non-tax matters as are customarily
covered in such opinions.
(l) The Purchaser shall have received on the Closing Date an opinion
(satisfactory in form and substance to the Purchaser and counsel to the
Purchaser) dated the Closing Date of Coopers & Lybrand LLP, special
Netherlands Antilles tax counsel to the Issuers and of Arthur Andersen,
special Canadian tax counsel to the Issuers.
(m) Prior to the execution of this Agreement, the Purchaser shall
have received a "comfort letter" from Arthur Andersen LLP, independent
public accountants for the Issuers, dated as of the date of this
Agreement, addressed to the Purchaser and in form and substance
satisfactory to the Purchaser and counsel to the Purchaser. In addition,
as of the Closing Date, the Purchaser shall have received a "bring-down
comfort letter" from Arthur Andersen LLP in form and substance
satisfactory to the Purchaser and counsel to the Purchaser covering the
same items and matters as covered in the "comfort letter" but as of a date
that is not more than five days prior to the date thereof and any changes
and additions to the Preliminary Offering Memorandum that were made
producing the Offering Memorandum.
(n) The Purchaser shall have received from Ernst & Young/Wright
Killen (satisfactory in form and substance to the Purchaser and counsel to
the Purchaser) the Replacement Cost Appraisal relating to the St.
Eustatius and Point Tupper facilities.
(o) The Issuers, the Subsidiary Guarantors and the Trustee shall
have entered into the Indenture and the Purchaser shall have received
counterparts, conformed as executed, thereof.
(p) The Purchaser shall have received from Houlihan, Lokey, Howard &
Zukin, Inc. (satisfactory in form and substance to the Purchaser and
counsel to the Purchaser) a solvency opinion relating to the Issuers.
<PAGE>
-35-
(q) The Issuers, the Subsidiary Guarantors and the Trustee shall
have entered into the Registration Rights Agreement and the Purchaser
shall have received counterparts, conformed as executed, thereof.
(r) The Issuers shall have entered into the New Revolving Bank
Credit Facility, which shall be in form and substance satisfactory to the
Purchaser and counsel to the Purchaser; and the Purchaser shall have
received counterparts, conformed as executed thereof.
(s) Prior to or simultaneously with the closing of the transactions
contemplated by this Agreement, each condition precedent to the
consummation of the Acquisition shall have been satisfied and the
Acquisition shall have been consummated. There shall exist at and as of
the Closing Date (after giving effect to the transactions contemplated by
this Agreement) no conditions that would constitute a default (or an event
that with notice or the lapse of time, or both, would constitute a
default) under the Transaction Documents.
(t) Cahill Gordon & Reindel, counsel to the Purchaser, shall have
been furnished with such documents as they may reasonably request to
enable them to review or pass upon the matters referred to in this Section
8 and in order to evidence the accuracy, completeness or satisfaction in
all material respects of any of the representations, warranties or
conditions contained in this Agreement.
(u) The Purchaser shall have been furnished with certified copies of
such documents as they may reasonably request, including, but not limited
to, certified copies of the Transaction Documents, the Castle Harlan
Agreement and all closing documents from the closings of the transactions
contemplated hereby.
(v) On or before the Closing Date, the Issuers shall have caused to
be delivered to the Purchaser and the Collateral Agent the following
documents and instruments with regard to each Mortgaged Property:
(i) a Mortgage encumbering the Issuers' or applicable
Subsidiary Guarantor's interest in each such Mortgaged Property,
duly executed and acknowledged by the owner or holder of the fee
and/or other interest constituting such Mortgaged Property, dated on
or before the Closing Date, and to the extent that such
<PAGE>
-36-
Mortgaged Property consists of real estate situated in the
Netherlands Antilles, a declaration from the relevant Property
Register of the Netherlands Antilles evidencing that a first
mortgage has been, is or shall be granted to the Collateral Agent
for the benefit of the holders of the Notes as submitted on or prior
to the Closing Date, and otherwise in form for recording in the
appropriate recording office of the political subdivision where such
Mortgaged Property is situated, together with such certificates,
affidavits, questionnaires or returns as shall be required in
connection with the recording or filing thereof and such statements
as are contemplated in respect of such Mortgage by the counsel
opinions set forth in paragraphs (g) and (h) of this Section 8, and
any other instruments necessary to grant the interests purported to
be granted by such Mortgage under the laws of any applicable
jurisdiction, which Mortgage and other instruments shall be
effective to create a Lien on such Mortgaged Property in favor of
the Collateral Agent, subject to no Liens other than Liens permitted
to be outstanding pursuant to such Mortgage;
(ii) with respect to each Mortgaged Property, such consents,
approvals, amendments, supplements, estoppels, tenant subordination
agreements or other instruments as shall be necessary in order for
the owner or holder of the fee interest to grant the Lien
contemplated by the Mortgage with respect to such Mortgaged
Property;
(iii) with respect to each Mortgage, a title and zoning
Opinion of Counsel (satisfactory in form and substance to the
Purchaser and the Collateral Agent) dated the Closing Date,
substantially to the effect that the Lien of such Mortgage is a
valid first mortgage Lien on the Mortgaged Property encumbered
thereby, subordinate only to those Liens specified in such Mortgage
as "Prior Liens";
(iv) with respect to Mortgaged Property located in (A) the
Netherlands Antilles, a property and contour plan (a) prepared by
Chicago Bridge & Iron Company (or an Affiliate thereof), (b) dated
November 15, 1996, (c) indicating the contours and bounderies of the
portion of such Mortgaged Property constituting Real Property (and
all buildings, structures and improvements located thereon) and (d)
certified by the
<PAGE>
-37-
appropriate Subsidiary Guarantors to the effect that (x) such plan
is in all material respects a true and accurate depiction of all the
Mortgaged Property other than portions of the Mortgaged Property
which are not material to the conduct of the Issuers' and the
Subsidiary Guarantors' business and (y) there are no encroachments
other than as set forth in such plan and (B) Canada, (a) a location
plan (the "Location Plan") prepared by a surveyor who is a member of
the Association of Nova Scotia Land Surveyors constituted by the
Land Surveyors Act (Nova Scotia) (a "NS Surveyor") dated no earlier
than one month before the Closing Date, containing, in all material
respects a visual illustration of the portion of such Mortgaged
Property constituting Real Property (and all buildings, structures
and improvements located within the amount of certification shown in
the Location Plan), together with (b) a certificate of the NS
Surveyor, dated as of the date of the Location Plan, certifying to
the Initial Purchaser and the Trustee that the legal description
attached to such certificate in all material respects describes the
Real Property shown in the compiled plan annexed thereto (the
"Compiled Plan") and (c) an Officers' Certificate of Statia Canada
stating that the area represented on the Location Plan constitutes
all material portions of such Mortgaged Property constituting Real
Property (and all buildings, structures and improvements located
thereon) and, to his/her knowledge, accurately depicts in all
material respects such Property;
(v) with respect to each Mortgaged Property, policies or
certificates of insurance as required by the Mortgages relating
thereto, which policies or certificates shall bear mortgagee
endorsements of the character required by such Mortgages, and copies
evidencing payment of the relevant insurance premiums;
(vi) with respect to Mortgaged Property and other Collateral
located in Nova Scotia, Canada, personal property lien searches
confirming that the personal property comprising a part of such
Mortgaged Property is subject to no Liens other than Prior Liens (as
defined in the applicable Mortgage) or other liens permitted by the
applicable Security Documents;
(vii) with respect to each Mortgaged Property, such
affidavits, certificates and instruments of
<PAGE>
-38-
indemnification as shall be required to induce counsel to issue the
opinions contemplated in subparagraph (iii) above;
(viii) checks payable to the appropriate public officials in
payment of all recording costs and transfer taxes due in respect of
the execution, delivery or recording of such Mortgages;
(ix) with respect to each Mortgaged Property, copies of all
Leases (as defined in the Mortgages), all of which Leases shall, to
the extent not previously approved in writing by the Purchaser, be
acceptable to the Purchaser in its reasonable judgment; and
(x) with respect to each Mortgaged Property, a certificate of an
officer of the Issuers or Subsidiary Guarantors, as applicable, certifying
that, as of the date of delivery of such certificate, there has been
issued and is in effect a valid and proper certificate of occupancy or
legal equivalent, if required by local code or ordinances for the use then
being made of the applicable Mortgaged Property and that there is no
outstanding citation, violation or similar notice indicating that such
Mortgaged Property contains conditions which are not in compliance with
local codes or ordinances relating to building or fire safety or
structural soundness.
(w) On or before the Closing Date, the Issuers and the Subsidiary
Guarantors shall have caused to be delivered the following documents and
instruments with regard to the Collateral (other than the Mortgaged
Property):
(i) to the Purchaser and the Collateral Agent the Security
Agreements and Securities Pledge Agreements, duly executed by the
Issuers and the Subsidiary Guarantors party thereto, together with
evidence of all registrations or filings in each of the offices
where such registrations or filings are necessary or, in the opinion
of the Purchaser, desirable to perfect the Liens created or intended
to be created thereby;
(ii) to the Collateral Agent certificates (or the foreign
equivalent thereof) representing all of the issued and outstanding
capital stock of all of the Subsidiary Guarantors, together with
stock powers executed in blank and/or powers of attorney (as
appropriate), and caused to be made all filings and
<PAGE>
-39-
caused to be provided all additional documents necessary or, in the
opinion of the Purchaser, desirable to perfect the Liens created or
intended to be created by the Securities Pledge Agreements;
(iii) to the Purchaser evidence satisfactory to it of the
payment of all filing fees and taxes in connection with the filings
and registrations contemplated in clauses (i) and (ii) above and
acknowledgment copies of all such filings;
(iv) to Purchaser and Collateral Agent policies or
certificates of insurance as required by the Security Documents
(other than the Mortgages) which policies or certificates shall bear
endorsements of the character required by such Security Documents,
and copies evidencing payment of the relevant insurance premiums;
and
(v) to Purchaser and Collateral Agent evidence that all other
actions necessary to perfect and protect the Liens created by the
Security Documents have been taken.
If any of the conditions specified in this Section 8 shall not have
been fulfilled when and as required by this Agreement to be fulfilled, this
Agreement may be terminated by the Purchaser on notice to the Issuers at any
time at or prior to the Closing Date, and such termination shall be without
liability of any party to any other party except that the Issuers shall
reimburse the Purchaser for all of their reasonable out-of-pocket expense,
including the reasonable expense of Purchaser's counsel, incurred by the
Purchaser in connection with this Agreement. Notwithstanding any such
termination, the provisions of Sections 4(e), 6, 7, 11(d) and 14 shall remain in
effect.
The Issuers' obligation under this Agreement to sell the Series A
First Mortgage Notes to the Purchaser on the Closing Date is subject to the
Purchaser purchasing and paying for all of the Series A First Mortgage Notes.
9. PURCHASER'S INFORMATION. The Issuers and the Purchaser severally
acknowledge that the statements with respect to the offer and sale of the Series
A First Mortgage Notes set forth in the last paragraph of the cover page and the
third and fourth paragraphs under the caption "Plan of Distribution" in the
Offering Memorandum constitute the only information furnished in
<PAGE>
-40-
writing by the Purchaser expressly for use in the Offering Memorandum.
10. SURVIVAL OF REPRESENTATIONS AND AGREEMENTS. All representations
and warranties, covenants and agreements contained in this Agreement, including
the agreements contained in Sections 4(e) and 11(d), the indemnity agreements
contained in Section 6 and the contribution agreements contained in Section 7
shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of the Purchaser or any controlling person
thereof or by or on behalf of the Issuers, any of the Subsidiary Guarantors or
any controlling person of any thereof, and shall survive delivery of and payment
for the Series A First Mortgage Notes to and by the Purchaser. The
representations contained in Section 5 and the agreements contained in Sections
4(e), 6, 7, 11(d) and 14 shall survive the termination of this Agreement,
including pursuant to Section 11.
11. EFFECTIVE DATE OF AGREEMENT; TERMINATION. (a) This Agreement
shall become effective upon execution and delivery of a counterpart hereof by
each of the parties hereto.
(b) The Purchaser shall have the right to terminate this Agreement
at any time prior to the Closing Date by notice to the Issuers from the
Purchaser, without liability (other than with respect to Sections 6 and 7) on
the Purchaser's part to the Issuers if, on or prior to such date, (i) the
Issuers or any of the Subsidiary Guarantors shall have failed, refused or been
unable to perform in any material respect any agreement on its part to be
performed under this Agreement, (ii) any other condition of the obligations of
the Purchaser under this Agreement as provided in Section 8 is not fulfilled
when and as required in any material respect, (iii) trading in securities
generally on the New York Stock Exchange or the American Stock Exchange shall
have been suspended or materially limited, or minimum prices shall have been
established on such exchange by the Commission, or by such exchange or other
regulatory body or governmental authority having jurisdiction, (iv) a general
banking moratorium shall have been declared by federal, New York, Canadian or
Netherlands Antilles authorities, or if a moratorium in foreign exchange trading
by major international banks or persons shall have been declared, (v) there is
an outbreak or escalation of armed hostilities involving the United States on or
after the date of this Agreement, or if there has been a declaration by the
United States of a national emergency or war, the effect of which shall be, in
the Purchaser's judgment, to make it inadvisable or impracticable to proceed
with the offering or delivery of the Series A First Mortgage Notes on the terms
and in the manner
<PAGE>
-41-
contemplated in the Offering Memorandum or (vi) there shall have been such a
material adverse change in general economic, political or financial conditions
or the effect of international conditions on the financial markets in the United
States shall be such as, in the Purchaser's judgment, to make it inadvisable or
impracticable to proceed with the offering or delivery of the Series A First
Mortgage Notes on the terms and in the manner contemplated in the Offering
Memorandum.
(c) Any notice of termination pursuant to this Section 11 shall be
given at the address specified in Section 12 below by telephone, telex,
telephonic facsimile or telegraph, confirmed in writing by letter.
(d) If this Agreement shall be terminated pursuant to clause (i) or
(ii) of Section 11(b), or if the sale of the Series A First Mortgage Notes
provided for in this Agreement is not consummated because any condition to the
obligations of the Purchaser set forth in this Agreement is not satisfied or
because of any refusal, inability or failure on the part of either of the
Issuers to perform any agreement in this Agreement or comply with any provision
of this Agreement, the Issuers will, subject to demand by the Purchaser,
reimburse the Purchaser for all of their reasonable out-of-pocket expenses
(including the reasonable fees and expenses of all of Purchaser's counsel)
incurred in connection with this Agreement and the Transactions.
12. NOTICE. All communications with respect to or under this
Agreement, except as may be otherwise specifically provided in this Agreement,
shall be in writing and, if sent to the Purchaser, shall be mailed, delivered,
or telexed, telegraphed or telecopied and confirmed in writing to Dillon, Read &
Co. Inc., 535 Madison Avenue, New York, New York 10022 (telephone: (212)
906-7000), Attention: Corporate Finance Department, telecopy number: (212)
593-0164; and if sent to the Issuers, shall be mailed, delivered or telexed,
telegraphed or telecopied and confirmed in writing to Statia Terminals, Inc.,
800 Fairway Drive, Suite 295, Deerfield Beach, Florida 33441 (telephone: (954)
698-0705), Attention: James F. Brenner, telecopy number: (954) 698-0706;
provided, however, that any notice pursuant to Section 7 shall be mailed,
delivered or telexed, telegraphed or telecopied and confirmed in writing.
All such notices and communications shall be deemed to have been
duly given: when delivered by hand, if personally delivered; five business days
after being deposited in the mail, postage prepaid, if mailed; when answered
back, if telexed; when
<PAGE>
-42-
receipt acknowledged if telecopied; and one business day after being timely
delivered to a next-day air courier.
13. PARTIES. This Agreement shall inure solely to the benefit of,
and shall be binding upon, the Purchaser and the Issuers and the controlling
persons and agents referred to in Sections 6 and 7, and their respective
successors and assigns, and no other person shall have or be construed to have
any legal or equitable right, remedy or claim under or in respect of or by
virtue of this Agreement or any provision herein contained. The term "successors
and assigns" shall not include a purchaser, in its capacity as such, of Series A
First Mortgage Notes from the Purchaser.
14. CONSTRUCTION. This Agreement shall be construed in accordance
with the internal laws of the State of New York (without giving effect to any
provisions thereof relating to conflicts of law) and each of the parties hereto
consent to the jurisdiction of the courts of the State of New York. Each of the
parties hereto agrees to submit to the jurisdiction of the courts of the State
of New York and the U.S. Federal Courts sitting in the City of New York for the
purposes of any suit, action or proceeding arising out of or relating to this
Indenture. The Issuers hereby designate and appoint CT Corporation System, 1633
Broadway, New York, New York 10019, as its agent to receive on its behalf
service of all process in any proceedings in any court sitting in New York, New
York, such service being hereby acknowledged by the Issuers to be effective and
binding service in every respect. A copy of any such process so served shall be
mailed by registered mail to the Issuers at the address specified in Section 12
hereof, except that unless otherwise provided by applicable law, any failure to
mail such copy shall not affect the validity of service of process. If any agent
appointed by the Issuers refuses to accept service, the Issuers hereby agree
that service upon them by mail shall constitute sufficient notice. Nothing
herein shall affect the right to serve process in any other manner permitted by
law or shall limit the right of the Purchaser to bring proceedings against the
Issuers in the courts of any other jurisdiction.
15. CAPTIONS. The captions included in this Agreement are included
solely for convenience of reference and are not to be considered a part of this
Agreement.
16. COUNTERPARTS. This Agreement may be executed in various
counterparts that together shall constitute one and the same instrument.
<PAGE>
-43-
STATIA TERMINALS INTERNATIONAL
N.V.
By: /s/ David B. Pittaway
-----------------------------------
Name: David B. Pittaway
Title: Attorney-in-Fact
STATIA TERMINALS CANADA,
INCORPORATED
By: /s/ David B. Pittaway
-----------------------------------
Name: David B. Pittaway
Title: President, Director
Confirmed and accepted as
of the date first above
written:
DILLON, READ & COMPANY INC.
By: /s/ John G. Brim
----------------------------
Name: John G. Brim
Title: Managing Director
<PAGE>
Schedule A
Acquired Companies
- ------------------
Statia Terminals, Inc.
Statia Terminals International N.V.
Statia Point Tupper Corporation
Statia Terminals Point Tupper, Inc.
Statia Terminals Southwest, Inc.
Point Tupper Marine Services, Ltd.
Saba Trustcompany N.V.
Bicen Development Corporation N.V.
W.P. Company, Inc.
Statia Laboratory Services N.V.
Statia Tugs N.V.
Seven Seas Steamship Company, Inc.
<PAGE>
Exhibit A
Form of Registration Rights Agreement
<PAGE>
LB/ea/3
Exhibit 3.1
The Undersigned:
JOHANNES WILHELMUS MARIA THESSELING, a civil-law notary, residing in
Curacao, Netherlands Antilles;
herewith certifies:
that the limited liability company:
STATIA TERMINALS INTERNATIONAL N.V., established in Curacao, has been legally
incorporated by deed, executed before the Undersigned, on September 4, 1996, on
a draft of which deed the declaration of no-objection, referred to in Article 38
of the Commercial Code of the Netherlands Antilles, was issued by the Minister
of Justice of the Netherlands Antilles on September 3, 1996, under number
2082/N.V.;
that the articles of incorporation have been amended and restated in their
entirety by deed, executed before the Undersigned, on November 22, 1996, on a
draft of which deed the declaration of no-objection, referred to in Article 97
of the Commercial Code of the Netherlands Antilles, was issued by the Minister
of Justice of the Netherlands Antilles on November 19, 1996, under number
2738/N.V.;
that the limited liability company:
STATIA TERMINALS INTERNATIONAL N.V., is legally existing in good standing under
the laws of the Netherlands Antilles, with articles reading as per the attached
documents.
IN WITNESS WHEREOF, I have set my hand hereunto, after having affixed my
official seal of office.
Curacao, November 22, 1996.
[SEAL] [ILLEGIBLE]
<PAGE>
DE ONDERGETEKENDE:
mr. Johannes Wilhelmus Maria Thesseling, notaris ter standplaats Curacao,
Nederlandse Antillen,
VERKLAART:
dat het navolgende de tekst is van de statuten van de naamloze vennootschap:
STATIA TERMINALS INTERNATIONAL N.V.,
gevestigd op Curacao, Nederlandse Antillen, zoals deze thans van kracht zijn.
Curacao, 22 november 1996.
[SEAL] [ILLEGIBLE]
<PAGE>
STATUTEN
NAAM, ZETEL EN DUUR
Artikel 1
1. De vennootschap draagt de naam: STATIA TERMINALS INTERNATIONAL N.V.
2. De vennootschap heeft haar zetel op Curacao, Nederlandse Antillen. De
vennootschap kan een of meer filialen en/of kantoren vestigen buiten
Curacao, Nederlandse Antillen.
3. Krachtens eenstemmig besluit van de Directie (als omschreven in artikel 6
lid 1) kan de vennootschap haar zetel verplaatsen naar een ander land en de
staat aannemen van een naar het recht van dat land opgerichte rechtspersoon
overeenkomstig de Landsverordening Zetelverplaatsing Derde Landen van de
Nederlandse Antillen, mits de Directie hiervoor vooraf goedkeuring heeft
verkregen van de Algemene Vergadering (als omschreven in Artikel 8
lid 1).
4. De vennootschap is aangegaan voor onbepaalde tijd.
DOEL
Artikel 2
1. De vennootschap heeft ten doel:
a. het, direct of indirect, financieren van de aankoop, alsmede de
activiteiten, van een of meer vennootschappen of ondernemingen welke
deel uitmaken van, of zijn gelieerd aan, in de ruimste zin des woords,
Statia Terminals Group N.V., Statia Terminals Corporation N.V., Statia
Terminals, Inc., Statia Terminals N.V. en Statia Terminals Point
Tupper, Inc., gevestigd in Curacao, Nederlandse Antillen, de Verenigde
Staten van Amerika, Panama, Canada, en St. Eustatius, Nederlandse
Antillen (tezamen de "Statia Groep"), het verkrijgen van de benodigde
gelden door uitgifte van schuldinstrumenten van welke aard of in welke
vorm dan ook, en/of door uitgifte van aandelen in haar kapitaal,
publieke of private leningen, en in het algemeen, door het investeren
van haar vermogensbestanddelen in effecten;
b. het oprichten van, deelnemen in, houden, beheren en besturen van een
of meer vennootschappen of ondernemingen, direct of indirect, ten
behoeve van, en teneinde deel uit te maken van, de Statia Groep;
c. het geven van garanties of het op andere wijze stellen van zekerheid,
en het overdragen van eigendom, het verhypothekeren, het verpanden of
op andere wijze bezwaren van vermogensbestanddelen als zekerheid voor
haar eigen verplichtingen en die van een of meer Statia Groep
vennootschappen of ondernemingen waarvan zij, direct of indirect,
aandelen houdt.
2. De vennootschap is bevoegd tot alles wat tot het bereiken van haar doel
nuttig of nodig kan zijn of daarmede in de ruimste zin des woords verband
houdt, daaronder begrepen het deelnemen in enige onderneming of
vennootschap.
KAPITAAL EN AANDELEN
Artikel 3
1. Het maatschappelijk kapitaal van de vennootschap bedraagt DERTIG DUIZEND
United States dollars (US$ 30,000).
2. Het maatschappelijk kapitaal is verdeeld in dertig duizend
<PAGE>
-2-
(30,000) aandelen met een nominale waarde van een United States dollar (US
$l,00) elk (de "aandelen").
3. De vennootschap kan volgestorte aandelen in haar eigen kapitaal onder
bezwarende titel verkrijgen doch slechts indien tenminste twintig procent
(20%) van het maatschappelijk kapitaal van de vennootschap bij anderen dan
de vennootschap zelf geplaatst blijft.
4. De vennootschap kan geen rechten ontlenen aan aandelen in haar eigen
kapitaal. Zodanige aandelen blijven buiten beschouwing bij de berekening
van het geplaatste kapitaal.
5. De Directie is bevoegd, zonder opdracht of goedkeuring van de Algemene
Vergadering, de in haar bezit zijnde aandelen in te trekken.
UITGIFTE VAN AANDELEN
Artikel 4
1. Aandelen worden uitsluitend uitgegeven als aandelen op naam. Aandelen
worden uitgegeven tegen of boven de nominale waarde. Aandeelbewijzen worden
niet uitgegeven.
2. Onderaandelen kunnen worden uitgegeven. Storting op aandelen kan in geld
geschieden en/of in natura.
3. Met inachtneming van het bepaalde in deze statuten kunnen aandelen worden
uitgegeven op zodanige tijdstippen en voorwaarden en tegen een zodanige
vergoeding als van tijd tot tijd door de Directie wordt bepaald.
4. Bij uitgifte van aandelen heeft iedere houder van aandelen een
voorkeursrecht evenredig aan de totale nominale waarde van zijn aandelen,
met inachtneming van het in lid 5 bepaalde.
5. Voorafgaande aan iedere uitgifte van aandelen kan het voorkeursrecht van
aandeelhouders worden beperkt of uitgesloten door de Algemene Vergadering;
de Algemene Vergadering kan een dergelijk besluit slechts nemen met
unanieme goedkeuring, in welke vergadering alle geplaatste aandelen zijn
vertegenwoordigd.
6. De vennootschap kan bij uitgifte van aandelen geen eigen aandelen nemen.
REGISTER VAN AANDEELHOUDERS EN OVERDRACHT VAN AANDELEN
Artikel 5
1. De Directie houdt een register van aandeelhouders (het "Register"), waarin
de namen en adressen van alle houders van aandelen zijn opgenomen, en het
op ieder aandeel gestorte bedrag door de aandeelhouders. De Directie zal
het Register regelmatig bijhouden en de vereiste aantekeningen daarin
maken, waaronder begrepen de inschrijving van iedere uitgifte, overdracht
en intrekking van aandelen.
2. De Directie zal tevens de namen en adressen opnemen van hen die een recht
van vruchtgebruik of een pandrecht op aandelen hebben. Iedere
aandeelhouder, iedere vruchtgebruiker en iedere pandhouder is verplicht aan
de vennootschap schriftelijk zijn adres op te geven. De vennootschap is
gerechtigd voor alle doeleinden af te gaan op de naam en het adres van de
aandeelhouder als in het Register vermeld. Een aandeelhouder kan te allen
tijde zijn adres, zoals in het Register opgenomen, wijzigen door middel van
een schriftelijke kennisgeving aan de vennootschap op haar hoofdkantoor.
3. De Directie verstrekt desgevraagd aan een aandeelhouder, een
vruchtgebruiker en een pandhouder kosteloos een
<PAGE>
-3-
uittreksel uit het Register met betrekking tot zijn recht op een aandeel.
4. Het Register wordt door de Directie gehouden ten kantore van de
vennootschap.
5. Een overdracht van aandelen, alsmede de vestiging of overdracht van een
beperkt recht daarop, zal worden beheerst door de toepasselijke wettelijke
bepalingen. De overdracht van aandelen kan geschieden (i) door de
betekening van de akte van overdracht aan de vennootschap op de wijze als
door de wet voorgeschreven, of (ii) door schriftelijke erkenning door de
vennootschap van de overdracht, welke erkenning namens de vennootschap
wordt getekend door de Directie. De voorgaande bepaling is ook van
toepassing in geval van toewijzing van aandelen bij de scheiding en deling
van enige gemeenschap.
6. Bij vestiging van een vruchtgebruik of een pandrecht op een aandeel kan het
stemrecht aan de vruchtgebruiker of de pandhouder worden toegekend.
BESTUUR
Artikel 6
1. Het beheer van alle zaken, bezittingen en onderneming van de
vennootschap rust bij een directie (de "Directie"), die alle bevoegdheden
heeft en kan uitoefenen behalve die welke uitsluitend toekomen aan de
aandeelhouders krachtens de wet of deze statuten, als van tijd tot tijd
gewijzigd.
2. Het aantal personen dat de Directie vormt is niet minder dan drie noch meer
dan negen, als van tijd tot tijd door de Algemene Vergadering vastgesteld.
Het aantal personen dat het bestuur vormt is, tot wijziging door een
volgende Algemene Vergadering, het aldus vastgesteld aantal.
3. Met inachtneming van het in lid 5 van dit artikel bepaalde zullen, bij
belet of ontstentenis van een of meer directeuren, de overblijvende
directeuren een of meer personen kunnen benoemen ter voorziening in
zodanige vacature(s) met dezelfde kwalificaties als eventueel door de
Algemene Vergadering te bepalen, om in functie te blijven tot de volgende
Algemene Vergadering.
4. Directeuren kunnen te allen tijde door de Algemene Vergadering worden
ontslagen of geschorst, met tenminste twee/derden (2/3) der stemmen
uitgebracht in een vergadering alwaar tenminste vijftig procent (50%) van
het totale aantal uitstaande aandelen aanwezig is. In een Algemene
Vergadering, alwaar een besluit wordt genomen voor het ontslaan van een
directeur, of in enigerlei volgende Algemene Vergadering, kunnen de
aandeelhouders voorzien in eventuele vacature(s) welke door een dergelijk
besluit is (zijn) ontstaan, met inachtneming van het in lid 2 van dit
artikel bepaalde.
5. Indien te eniger tijd het aantal der in functie zijnde directeuren daalt
beneden de drie, zullen de overblijvende directeuren onmiddellijk een
Algemene Vergadering bijeenroepen met het doel in de vacatures in de
Directie te voorzien, en voorts met dien verstande dat bij belet of
ontstentenis van alle directeuren, de vennootschap tijdelijk wordt bestuurd
door een of meer personen, van tevoren door de Algemene Vergadering
aangewezen om als zodanig op te treden, welke persoon (personen) een
Algemene Vergadering zal (zullen) bijeenroepen ter verkiezing van
<PAGE>
-4-
een of meer directeuren. Indien geen zodanige persoon is benoemd, kan
iedere persoon of kunnen personen, in het bezit van in totaal tenminste
vijftig procent (50%) van de uitgegeven en uitstaande aandelen der
vennootschap een Algemene Vergadering bijeenroepen ter verkiezing van een
of meer directeuren.
6. Vergaderingen van de Directie worden regelmatig gehouden op zodanige plaats
en op zodanig tijdstip als de Directie van tijd tot tijd zal bepalen.
Buitengewone vergaderingen van de Directie zullen worden gehouden indien en
wanneer twee directeuren of de Voorzitter (als in lid 1 van artikel 7
omschreven) een dergelijke vergadering bijeenroepen. Kennisgeving van de
tijd en plaats van een vergadering van de Directie wordt gegeven:
(a) niet minder dan zesennegentig (96) uur voorafgaande aan die
vergadering, door middel van schriftelijke kennisgeving per post
verzonden aan iedere directeur, of
(b) niet later dan de werkdag onmiddellijk voorafgaande aan de datum van
die vergadering, door middel van persoonlijke overhandiging, of per
telefoon, telegram of telefax aan iedere directeur, met bevestiging
van de ontvangst der kennisgeving.
Een verklaring van afstand van een kennisgeving van een
directievergadering, door al de directeuren die niet aan de vergadering
deelnemen hetzij voor, na of ter vergadering getekend, wordt geacht een
kennisgeving van de vergadering in te houden. Indien alle directeuren ter
vergadering aanwezig zijn, wordt kennisgeving geacht naar behoren te zijn
gedaan.
7. Een meerderheid der leden van de Directie vormt een quorum. Het besluit van
de meerderheid der directeuren die persoonlijk of bij volmacht, als hierna
bepaald, tegenwoordig zijn in een vergadering alwaar een quorum aldus
aanwezig is, geldt als het besluit van de Directie. Bij gebrek aan quorum
kan een directeur een vergadering van tijd tot tijd verdagen totdat een
quorum aanwezig zal zijn.
8. Alle in een directievergadering te nemen besluiten zullen worden genomen
met de meerderheid der uitgebrachte stemmen, met dien verstande dat in
geval van een staken van stemmen, de door de Voorzitter uitgebrachte
stem(men) beslissend zal (zullen) zijn.
9. Van alle vergaderingen van de Directie worden notulen gehouden, welke
worden getekend door de secretaris en de voorzitter van de vergadering of
door een andere daartoe door de Directie gemachtigde persoon.
10. Een schriftelijk besluit, getekend door alle directeuren buiten vergadering
geldt als een besluit op geldige wijze genomen in een directievergadering,
welke naar behoren is bijeengeroepen en gehouden.
11. Vergaderingen van de Directie kunnen worden gehouden door middel van
conferentietelefoons of andere communicatie apparatuur waarbij alle
personen die aan de vergadering deelnemen elkaar kunnen horen, of eventueel
door middel van andere bij de wet toegestane apparatuur, en het middels
zodanige wettige apparatuur of regelingen deelnemen aan een vergadering
geldt als het ter vergadering aanwezig zijn.
12. Wanneer een besluit door de Directie moet of kan worden
<PAGE>
-5-
genomen, kan van een besluit in een vergadering worden afgezien indien alle
directeuren schriftelijk instemmen met het aldus genomen of te nemen
besluit.
13. Directeuren kunnen per telegram, telefax of ander geschrift een gemachtigde
aanstellen om namens hen op te treden in een specifieke vergadering of
vergaderingen van de Directie. Bedoelde gemachtigde dient een andere
directeur der vennootschap te zijn.
14. De Directie is bevoegd zonder de voorafgaande machtiging van de Algemene
Vergadering overeenkomsten aan te gaan als bedoeld in artikel 60 van het
Wetboek van Koophandel van de Nederlandse Antillen.
VERTEGENWOORDIGING
Artikel 7
1. De Directie wijst een voorzitter (de "Voorzitter") aan uit de directeuren.
De Directie kan voorts van tijd tot tijd een President, een of meer
Vice-President(en) (met inbegrip van Uitvoerend of Senior
Vice-Presidenten), een Controleur-Administrateur, een Penningmeester, een
of meer Assistent Penningmeester(s), een Secretaris, een of meer Assistent
Secretaris(sen) kiezen alsmede zodanige andere functionarissen en
vertegenwoordigers als zij passend acht, welke allen hun functies zullen
bekleden ten genoegen van de Directie. Dezelfde persoon kan twee of meer
der voornoemde functies bekleden, doch zal nimmer in meer dan een
hoedanigheid enig document tekenen, bevestigen of verifieren indien bedoeld
document krachtens de wet of de statuten door twee of meer functionarissen
dient te worden getekend, bevestigd of geverifieerd. De Voorzitter dient
een directeur te zijn, doch de overige functionarissen van de vennootschap
behoeven niet lid van de Directie te zijn.
2. De vennootschap wordt in en buiten rechte vertegenwoordigd en wordt
tegenover derden verbonden door twee der navolgende personen, gezamenlijk
handelend, welke personen directeuren (anders dan de Voorzitter) kunnen
doch niet behoeven te zijn, door de Directie gemachtigd om de vennootschap
te vertegenwoordigen, en welke personen de navolgende titels hebben en de
navolgende functies bekleden:
(i) Voorzitter;
(ii) President;
(iii) Vice-Presidenten (waaronder begrepen eventuele Uitvoerend
Vice-President, of Senior Vice-Presidenten);
(iv) Functionaris, Penningmeester, Assistent-Penningmeester;
(v) Secretaris, Assistent Secretaris, Controleur-Administrateur.
De Directie kan ook van tijd tot tijd andere personen, die al dan niet
directeur kunnen zijn, machtigen om de vennootschap te vertegenwoordigen,
welke personen zodanige titels zullen hebben en zodanige additionele
functies zullen bekleden als de Directie kan vaststellen.
3. De personen die bovengenoemde functies bekleden of eventueel andere
functies waartoe de Directie van tijd tot tijd als in dit artikel bepaald
machtiging kan verlenen, zullen zodanige bevoegdheden hebben als door de
Directie van tijd tot tijd aan ieder van hen verleend.
<PAGE>
-6-
4. De Directie kan aan additionele vertegenwoordigers of aan commissies
algemene of specifieke machtiging verlenen, en dergelijke
vertegenwoordigers of commissies zodanige algemene of beperkte bevoegdheden
verlenen of taken opleggen als zij passend acht.
5. De Directie kan zodanige voorschriften, reglementen en besluiten aannemen,
wijzigen en intrekken als zij passend zal achten voor het voeren van het
bedrijf en het beheer van de vennootschap, met inbegrip van voorschriften,
reglementen en besluiten inhoudende de specifieke bevoegdheden en taken van
de bekleders van bovenvermelde functies en andere personen door de Directie
gemachtigd om de vennootschap te vertegenwoordigen (het "Huishoudelijk
Reglement"). Bedoelde voorschriften, reglementen en besluiten dienen te
stroken met de bepalingen van de statuten. Eventuele beperkingen van de
vertegenwoordigingsbevoegdheid van de bekleders van bovenvermelde functies
worden van kracht op de dag volgende op die waarop de voorschriften,
reglementen of besluiten die zodanige beperkingen inhouden, zijn ingediend
bij het Handelsregister van de Kamer van Koophandel en Nijverheid op het
eiland alwaar de vennootschap gevestigd is.
6. De directeuren, bekleders van bovengenoemde functies en andere personen,
door de Directie gemachtigd om de vennootschap te vertegenwoordigen,
ontvangen zodanige vergoeding als de Algemene Vergadering kan vaststellen.
ALGEMENE VERGADERINGEN VAN AANDEELHOUDERS
Artikel 8
1. Alle algemene vergaderingen van aandeelhouders (elk, een "Algemene
Vergadering") worden gehouden op Curacao, St. Eustatius of St. Maarten,
Nederlandse Antillen.
2. Binnen zes maanden na afloop van het boekjaar, wordt de jaarlijkse
Algemene Vergadering gehouden.
3. In genoemde vergadering:
a. zal de Directie verslag uitbrengen over de gang van zaken van de
vennootschap en het gevoerde beheer gedurende het afgelopen boekjaar;
b. zal de balans en de winst-en verliesrekening worden vastgesteld, na te
zijn overgelegd tezamen met een toelichting (gezamenlijk, de
"jaarrekening"), waarin vermeld wordt naar welke maatstaf de roerende
en onroerende zaken van de vennootschap zijn gewaardeerd;
c. zal de persoon bedoeld in artikel 6 lid 5 worden aangewezen;
d. zal de winstbestemming worden vastgesteld;
e. zullen die voorstellen worden behandeld, welke in de agenda opgenomen
in de oproeping voor de vergadering, zijn vermeld.
PLAATS, OPROEPING EN STEMMING
Artikel 9
1. Behoudens de jaarlijkse Algemene Vergadering worden Algemene Vergaderingen
gehouden zo dikwijls als de Directie zulks nodig acht.
2. Aandeelhouders tezamen vertegenwoordigend ten minste een tiende gedeelte
van het uitgegeven en geplaatste kapitaal, hebben het recht aan de Directie
te verzoeken een Algemene Vergadering te beleggen met opgave van de te
behandelen onderwerpen. Indien de Directie niet binnen vier weken na
<PAGE>
-7-
dit verzoek tot oproeping is overgegaan, zijn de verzoeker(s) zelf tot
bijeenroeping bevoegd, in welk geval de Directie hiervan op de hoogte zal
worden gesteld.
3. Alle Algemene Vergaderingen worden door de Directie bijeengeroepen.
4. Alle oproepingen voor de Algemene Vergaderingen en alle kennisgevingen aan
aandeelhouders geschieden door middel van brieven aan de adressen volgens
het Register.
5. De oproeping geschiedt niet later dan op de tiende dag voor die van de
vergadering, de dag van verzending van de oproeping en die van de
vergadering niet meegerekend.
6. De te behandelen onderwerpen moeten in de oproeping voor de vergadering
worden vermeld of daarin moet worden meegedeeld dat de aandeelhouders er
ten kantore van de vennootschap kennis van kunnen nemen.
7. Algemene Vergaderingen zullen worden voorgezeten door een persoon die
daartoe telkenmale door de vergadering zal worden aangewezen.
8. Alle besluiten van jaarlijkse en Algemene Vergaderingen zullen worden
genomen met volstrekte meerderheid van stemmen, voorzover in deze statuten
niet anders is bepaald.
9. Aandeelhouders kunnen zich op een vergadering doen vertegenwoordigen door
een schriftelijk gevolmachtigde, waaronder begrepen elk via gangbare
communicatiekanalen overgebrachte en op schrift ontvangen bericht.
10. Elk aandeel geeft recht op het uitbrengen van een stem op een Algemene
Vergadering. Onthoudingen en ongeldig uitgebrachte stemmen tellen niet mee
op een Algemene Vergadering.
11. Geldige stemmen kunnen ook worden uitgebracht voor de aandelen van hen, aan
wie, uit anderen hoofde dan als aandeelhouders van de vennootschap, door
het te nemen besluit enig recht jegens de vennootschap zou worden
toegekend.
12. Voorstellen te doen door aandeelhouders voor onderwerpen te behandelen
zowel op jaarlijkse als op andere Algemene Vergaderingen, kunnen alleen dan
in behandeling worden genomen, indien zij zo tijdig en schriftelijk bij de
Directie zijn ingediend, dat zij met inachtneming van de voor de
bijeenroeping van Algemene Vergaderingen vastgestelde termijn op de wijze
als voor bijeenroeping bepaald kunnen worden aangekondigd.
13. Indien en zolang het gehele uitgegeven en geplaatste kapitaal ter Algemene
Vergadering vertegenwoordigd is, kunnen geldige besluiten worden genomen,
zelfs wanneer de voorschriften van de statuten omtrent oproeping,
bekendmaking van de punten van behandeling niet of slechts ten dele in acht
zijn genomen, mits deze besluiten met algemene stemmen worden genomen.
14. Iedere directeur heeft als zodanig het recht op de Algemene Vergadering
aanwezig te zijn en een raadgevende stem uit te brengen.
15. Besluiten van aandeelhouders kunnen in plaats van in Algemene Vergaderingen
ook schriftelijk worden genomen (als bedoeld op de wijze als bepaald in lid
9), mits met algemene stemmen van alle stemgerechtigde aandeelhouders. De
Directie houdt van de genomen besluiten aantekening. Indien de Directie
niet ter vergadering is
<PAGE>
-8-
vertegenwoordigd, wordt door of namens de voorzitter van de vergadering een
afschrift van de genomen besluiten zo spoedig mogelijk na de vergadering
aan de Directie verstrekt. De aantekeningen liggen ten kantore van de
vennootschap ter inzage van de aandeelhouders. Aan ieder van dezen wordt
desgevraagd een afschrift of uittreksel van deze aantekeningen verstrekt
tegen ten hoogste de kostprijs.
BOEKJAAR
Artikel l0
1. Het boekjaar van de vennootschap loopt van de eerste dag van januari tot en
met de laatste dag van december van ieder jaar.
2. Het eerste boekjaar loopt van de aanvang van de vennootschap tot en met
eenendertig december negentienhonderd zesennegentig.
BALANS EN JAARREKENING
Artikel 11
1. Jaarlijks binnen vijf maanden na afloop van het boekjaar, wordt door de
Directie de jaarrekening voorgelegd aan de aandeelhouders. De jaarrekening
wordt ondertekend door alle directeuren; ontbreekt de ondertekening van een
of meer hunner, dan wordt daarvan onder opgave van reden melding gemaakt.
2. De jaarlijkse Algemene Vergadering van aandeelhouders stelt de jaarrekening
vast.
3. Vaststelling van de balans en de winst-en verliesrekening zonder voorbehoud
strekt tot acquit en decharge van de Directie voor het beheer gedurende het
boekjaar, voor zover van dat beheer uit de jaarrekening blijkt.
WINSTVERDELING
Artikel 12
1. De winst, waaronder is te verstaan de netto winst ingevolge de vastgestelde
jaarrekening, is ter beschikking van de Algemene Vergadering. De Directie
is bevoegd naar eigen goeddunken een zodanig gedeelte van de winst te
reserveren en toe te delen aan de reserves van de aandelen teneinde het
doel van de vennootschap te bereiken. De vennootschap houdt een reserve
rekening aan voor de aandelen, waaruit de Directie naar eigen goeddunken,
gehele of gedeeltelijke, uitkeringen kan doen.
2. Niet gereserveerde winst zal worden uitgekeerd aan de aandeelhouders.
3. Voorzover de winst van de vennootschap zulks toelaat kan de Directie
besluiten tot vaststelling van een interimdividend als vooruitbetaling op
het te verwachten winstsaldo.
4. Indien uit de winst-en verliesrekening blijkt dat een verlies is geleden
dat niet door een reserve kan worden gedekt of op andere wijze gedelgd,
geschiedt in de volgende jaren geen winstuitkering, zolang dat verlies niet
is aangezuiverd.
STATUTENWIJZIGING EN ONTBINDING VAN DE VENNOOTSCHAP
Artikel 13
1. Een besluit tot wijziging van de statuten of tot ontbinding van de
vennootschap kan slechts genomen worden met een drie/vierde meerderheid van
stemmen in een Algemene Vergadering, waarin tenminste twee/derde gedeelte
van het geplaatste kapitaal vertegenwoordigd is.
<PAGE>
-9-
2. Indien in de vergadering niet het vereiste kapitaal vertegenwoordigd is,
wordt een tweede vergadering bijeengeroepen, te houden binnen twee maanden
na de eerste, in welke tweede vergadering, ongeacht het vertegenwoordigde
kapitaal, geldige besluiten kunnen worden genomen met een drie/vierde
meerderheid van uitgebrachte stemmen.
3. In geval van ontbinding van de vennootschap zal liquidatie geschieden onder
zodanige bepalingen als waartoe de Algemene Vergadering zal besluiten.
4. Gedurende tien (10) jaren na het einde van de liquidatie zullen de boeken
en bescheiden van de vennootschap in bewaring blijven door een daartoe door
de Algemene Vergadering aangewezen persoon.
<PAGE>
THE UNDERSIGNED:
Johannes Wilhelmus Maria Thesseling, a Civil Law Notary of Curacao, Netherlands
Antilles,
DOES HEREBY CERTIFY:
that the text set forth hereinafter is a true but unofficial English translation
of the presently effective Articles of Incorporation of the limited liability
company:
STATIA TERMINALS INTERNATIONAL N.V.,
established in Curacao, Netherlands Antilles.
Curacao, November 22, 1996.
[SEAL] [ILLEGIBLE]
<PAGE>
ARTICLES OF INCORPORATION
NAME, SEAT AND DURATION
Article 1
1. The company shall bear the name: STATIA TERMINALS INTERNATIONAL N.V.
2. The company shall have its seat in Curacao, Netherlands Antilles. The
company may establish one or more branches and/or offices outside Curacao,
Netherlands Antilles.
3. Pursuant to a unanimous resolution of the Managing Board (as described
in article 6, paragraph 1), the company may transfer its seat to another country
and assume the status of a legal entity set up under the laws of that country in
accordance with the National Ordinance Transfer of Seat Third Countries of the
Netherlands Antilles, provided the Managing Board shall have obtained in advance
the approval of the General Meeting (as described in article 8, paragraph 1).
4. The company shall be entered into for an indefinite period of time.
OBJECTS
Article 2
1. The objects of the company are:
a. to finance, directly or indirectly, the acquisition as also the activities
of one or more companies or enterprises that form part of, or are
affiliated in the broadest sense of the word to, Statia Terminals Group
N.V., Statia Terminals Corporation N.V., Statia Terminals, Inc., Statia
Terminals N.V. and Statia Terminals Point Tupper, Inc., established in
Curacao, Netherlands Antilles, the United States of America, Panama, Canada
and St. Eustatius, Netherlands Antilles (together the "Statia Group"), to
acquire the necessary moneys through the issue of evidences of indebtedness
of any nature or in any form howsoever, and/or through the issue of shares
in its capital, public or private loans, and in general through the
investment of its assets in securities;
b. to set up, participate in, hold, administer and manage one or more
companies or enterprises, directly or indirectly, for the benefit of, and
in order to form part of, the Statia Group;
c. to guarantee or otherwise secure, and to transfer the ownership of, to
mortgage, pledge or otherwise to encumber assets as security for the
company's own obligations and those of one or more Statia Group companies
or enterprises, shares of which are held by the company, be this directly
or indirectly.
2. The company shall be entitled to do all such things as may be useful or
necessary for the attainment of its objects or as shall relate thereto in the
widest sense of the word, including to participate in any enterprise or company.
CAPITAL AND SHARES
Article 3
1. The authorized capital of the company shall amount to THIRTY THOUSAND
United States Dollars (US$30,000.-).
2. The authorized capital shall be divided into thirty thousand (30,000)
shares with a nominal value of one United States Dollar (US$1.-) each (the
"shares").
3. The company may acquire fully paid up shares in its own
1
<PAGE>
capital for valuable consideration but only if at least twenty percent (20%) of
the company's authorized capital shall remain outstanding with others than the
company itself.
4. The company may not derive any rights from shares held by it in its own
capital. Such shares shall not be reckoned with when calculating the issued
capital.
5. The Managing Board shall be competent without the instruction or
approval of the General Meeting to recall the shares held by it.
ISSUE OF SHARES
Article 4
1. Shares shall be issued only as registered shares. The shares shall be
issued at or above the nominal value. Share certificates shall not be issued.
2. Fractional shares may be issued. The payment of calls may be effected in
cash and/or in kind.
3. With due observance of the stipulations in these articles, shares may be
issued at such times and subject to such terms and for such consideration as the
Managing Board shall determine from time to time.
4. When shares are issued, each holder of shares shall have a preferential
right in proportion to the total nominal value of his shares, with due
observance of the provisions of paragraph 5.
5. Prior to each issue of shares, the preferential rights of the
shareholders may be restricted or excluded by the General Meeting; the General
Meeting may adopt any such resolution only by unanimous approval, at which
meeting all the issued and outstanding shares shall be represented.
6. The company may not acquire its own shares at an issue of shares.
SHAREHOLDERS' REGISTER AND TRANSFER OF SHARES
Article 5
1. The Managing Board shall keep a shareholders' register (the "Register"),
in which the names and addresses of all the holders of shares shall be entered,
as also the amount paid up by the shareholders on each share. The Managing Board
shall keep the Register on a regular basis, and make the necessary entries
therein, including the registration of every issue, transfer and recall of
shares.
2. The Managing Board shall also enter the names and addresses of those
having a usufruct or possessory lien on shares. Each shareholder, each
usufructuary and each holder of a possessory lien shall be bound to state his
address to the company in writing. The company shall be entitled for all
purposes to rely on the shareholder's name and address as stated in the
Register. A shareholder may change his address as stated in the Register at all
times by means of a written notice to the company at its head office.
3. On request, the Managing Board shall furnish a shareholder, a
usufructuary and a holder of a possessory lien, free of charge, with an extract
from the Register as regards his right to a share.
4. The Register shall be kept by the Managing Board at the offices of the
company.
5. A transfer of shares, as also the creation thereon or the
2
<PAGE>
assignment thereto of a limited right, shall be governed by the applicable
statutory regulations. The transfer of shares may be effected (i) by serving a
deed of transfer upon the company in the manner as prescribed bylaw, or (ii) by
the written acknowledgement by the company of the transfer, which
acknowledgement shall be signed by the Managing Board on behalf of the company.
The aforegoing stipulation shall apply also in the case of an allocation of
shares on the division and partition of any community.
6. On the establishment of a usufruct or a possessory lien on a share, the
voting right may be granted to the usufructuary or the holder of the possessory
lien.
MANAGEMENT
Article 6
1. The management of all the affairs, property and business of the company
shall rest with a managing board (the "Managing Board") that shall have and may
exercise all powers except such as shall belong exclusively to the shareholders
pursuant to the law or these articles, as amended from time to time.
2. The number of persons constituting the Managing Board shall be not fewer
than three nor more than nine, as determined by the General Meeting from time to
time. The number of persons constituting the management shall be the number thus
determined, until modified by a subsequent General Meeting.
3. With due observance of the provisions of paragraph 5 of this article, in
case of the impediment or default of one or more managing directors, the
remaining managing directors may appoint one or more persons to fill any such
vacancy (vacancies) with the same qualifications as possibly stipulated by the
General Meeting, to serve until the next General Meeting.
4. Managing directors may be dismissed or suspended by the General Meeting
at all times, by at least two thirds (2/3) of the votes cast in a meeting at
which at least fifty percent (50%) of the total number of outstanding shares
shall be present. In a General Meeting, at which a resolution is adopted to
dismiss a managing director, or in any subsequent General Meeting, the
shareholders may fill any vacancy (vacancies) arisen as a result of any such
resolution, with due observance of the provisions of paragraph 2 of this
article.
5. If at any time the number of managing directors in office should be
reduced to fewer than three, the remaining managing directors shall convene a
General Meeting at once in order to fill the vacancies on the Managing Board,
and furthermore provided that in case of the impediment or default of all
managing directors, the company shall be managed temporarily by one or more
persons, previously designated by the General Meeting to act as such, which
person(s) shall convene a General Meeting in order to elect one or more managing
directors. If no such person has been designated, any person or persons, in the
aggregate holding at least fifty percent (50%) of the issued and outstanding
shares of the company may convene a General Meeting in order to elect one or
more managing directors.
6. Meetings of the Managing Board shall be held on a regular basis at such
place and time as the Managing Board shall determine from time to time.
Extraordinary meetings of the Managing
3
<PAGE>
Board shall be held if and whenever two managing directors or the Chairman (as
described in paragraph 1 of article 7) convene any such meeting. Notice of the
time and place of a meeting of the Managing Board shall be given:
(a) not less than ninety-six (96) hours prior to such meeting, by written
notice mailed to each managing director, or
(b) not later than the business day immediately preceding the date of such
meeting, by personal delivery, or by telephone, telegram or telefax to each
managing director, with acknowledgement of receipt.
A waiver of notice of a meeting of the Managing Board, signed by all the
managing directors not participating in the meeting be this before, after or at
the meeting, shall be deemed to be a notice of the meeting. If all managing
directors are present at the meeting, notice shall be deemed to have been duly
given.
7. A majority of the members of the Managing Board shall constitute a
quorum. The resolution of the majority of the managing directors, present in
person or by proxy, as provided below, at a meeting where a quorum is thus
present, shall constitute the resolution of the Managing Board. In the absence
of a quorum, a managing director may adjourn a meeting from time to time, until
a quorum shall be present.
8. All resolutions to be adopted in a meeting of the Managing Board shall
be adopted by the majority of the votes cast, provided that, in the event of a
tie, the Chairman shall have (a) casting vote(s).
9. Minutes shall be kept of the proceedings at all meetings of the Managing
Board, which minutes shall be signed by the secretary and the chairman of the
meeting, or by another person thereto authorized by the Managing Board.
10. A written resolution, signed by all the managing directors without a
meeting having been held, shall constitute a resolution validly adopted in a
meeting of the Managing Board, duly called and held.
11. Meetings of the Managing Board may be held by means of conference
telephones or other communication devices whereby all persons participating in
the meeting can hear one another, or by means of any other equipment permitted
by law, and participating in a meeting by means of any such lawful device or
arrangement shall constitute presence at the meeting.
12. If action is permitted or required to be taken by the Managing Board,
action at a meeting may be dispensed with if all managing directors agree in
writing to the action thus taken or to be taken.
13. Managing directors may appoint a proxy by telegram, telefax or other
writing, who shall act on their behalf at a specific meeting or meetings of the
Managing Board. Any such proxy shall be another managing director of the
company.
14. The Managing Board shall be competent, without prior authorization by
the General Meeting, to enter into agreements as referred to in article 60 of
the Commercial Code of the Netherlands Antilles.
REPRESENTATION
Article 7
1. The Managing Board shall designate a chairman (the
4
<PAGE>
"Chairman") from among the managing directors. The Managing Board furthermore
may elect from time to time a President, one or more Vice President(s)
(including Executive or Senior Vice Presidents), a Controller, a Treasurer, one
or more Assistant Treasurers, a Secretary, one or more Assistant Secretaries, as
also such other officials and representatives as it shall deem fit, all of whom
shall discharge their offices at the pleasure of the Managing Board. The same
person may occupy two or more of the aforesaid offices, but shall never execute,
acknowledge or verify any document in more than one capacity, if such document
is required by law or by the articles to be executed, acknowledged or verified
by two or more officials. The Chairman shall be a managing director, but the
other officials of the company need not be members of the Managing Board.
2. The company shall be represented in and out of court and shall be bound
as against third parties by any two of the following persons, acting jointly,
which persons may but are not required to be managing directors (other than the
Chairman), authorized by the Managing Board to represent the company and which
persons shall have the following titles and occupy the following offices:
(i) Chairman;
(ii) President;
(iii) Vice Presidents (including any Executive Vice President, or Senior Vice
Presidents);
(iv) Official, Treasurer, Assistant Treasurer;
(v) Secretary, Assistant Secretary, Controller.
The Managing Board may also from time to time authorize other persons, who may
or may not be managing directors, to represent the company, which persons shall
have such titles and shall occupy such additional offices as the Managing Board
may determine.
3. The persons holding the above offices or any other offices which the
Managing Board may authorize from time to time as provided in this article,
shall have such powers as granted each of them by the Managing Board from time
to time.
4. The Managing Board may grant general or specific authority to additional
representatives or to committees, and confer upon such representatives or
committees such general or limited powers or duties at it shall deem fit.
5. The Managing Board may adopt, amend and repeal such rules, regulations
and resolutions as it may deem appropriate for the conduct of the company's
business and management, including rules, regulations and resolutions containing
the specific powers and duties of the holders of the offices mentioned above and
other persons authorized by the Managing Board to represent the company (the
"By-laws"). Such rules, regulations and resolutions shall be consistent with the
provisions of the articles. Any restrictions of the powers of representation of
the holders of the offices mentioned above shall take effect on the day
following that on which the rules, regulations or resolutions containing any
such restrictions, shall have been filed at the Trade Register of the Chamber of
Commerce and Industry on the island where the company is established.
6. The managing directors, holders of the offices mentioned
5
<PAGE>
above, and other persons authorized by the Managing Board to represent the
company, shall receive such remuneration as the General Meeting may determine.
GENERAL MEETINGS OF SHAREHOLDERS
Article 8
1. All general meetings of shareholders (each a "General Meeting") shall be
held in Curacao, St. Eustatius or St. Maarten, Netherlands Antilles.
2. Within six months from the end of the financial year, the annual General
Meeting shall be held.
3. In the said meeting:
a. the Managing Board shall render a report on the course of the company's
business and the management conducted during the financial year ended;
b. the balance sheet and the profit and loss account shall be determined,
after having been submitted along with an explanatory memorandum
(collectively the "annual accounts"), setting forth the standards according
to which the movable and immovable property of the company have been
appraised;
c. the person referred to in article 6 paragraph 5 shall be designated;
d. the profit allocation shall be determined;
e. such proposals shall be dealt with as shall appear on the agenda, listed in
the notice convening the meeting.
PLACE, CONVOCATION AND VOTE
Article 9
1. Save for the annual General Meeting, General Meetings shall be held as
often as the Managing Board shall deem necessary.
2. Shareholders together representing at least one tenth part of the issued
and outstanding capital shall have the right to request the Managing Board to
call a General Meeting, thereby stating the subjects to be dealt with. If the
Managing Board should fail to convene the meeting within four weeks from such
request, the applicant(s) himself (themselves) shall be competent thus to
proceed, in which case the Managing Board shall be notified accordingly.
3. All General Meetings shall be convened by the Managing Board.
4. All notices convening the General Meetings and all communications to
shareholders shall be effected by means of letters sent to the addresses
appearing in the Register.
5. Notice convening a meeting shall be given not later than on the tenth
day prior to that of the meeting, not counting the day the notice is sent nor
that of the meeting.
6. The subjects to be dealt with shall be stated in the notice convening
the meeting, or the same shall state that the shareholders may take cognizance
thereof at the office of the company.
7. General Meetings shall be presided over by a person to be designated
thereto by the meeting each time.
8. All resolutions of annual and General Meetings shall be adopted by
absolute majority of votes, insofar as these articles do not provide otherwise.
9. Shareholders may cause themselves to be represented at a
6
<PAGE>
meeting by a proxy authorized in writing, such to include any notice transmitted
and received in writing via current channels of communication.
10. Each share shall entitle its holder to cast one vote at a General
Meeting. Abstentions and votes invalidly cast shall not be counted at a General
Meeting.
11. Valid votes may also be cast for the shares of those who, otherwise
than as shareholders of the company, would be granted any right towards the
company by the resolution to be adopted.
12. Proposals to be made by shareholders for subjects to be dealt with both
at annual and other General Meetings can be dealt with only if presented to the
Managing Board in writing and at such time that they may be announced with due
observance of the term of notice and in the manner prescribed for convening
General Meetings.
13. If and so long as the entire issued and outstanding capital is
represented at a General Meeting, valid resolutions may be adopted even if the
rules laid down in the articles as regards convocation and publication of the
agenda have not or have only partially been observed, provided such resolutions
be adopted by unanimous vote.
14. Every managing director as such shall have the right to be present at
the General Meeting and to cast an advisory vote.
15. Instead of being adopted in General Meetings, shareholders resolutions
may also be adopted in writing (in the manner as referred to in paragraph 9),
provided this be done by the unanimous vote of all the shareholders entitled to
vote.
The Managing Board shall keep a record of the resolutions adopted. If the
Managing Board is not represented at the meeting, a copy of the resolutions
adopted shall be submitted to the Managing Board as soon as possible after the
meeting by or on behalf of the chairman of the meeting. The notes shall be
available at the offices of the company for inspection by the shareholders. On
request, each of them shall receive a copy or extract of these notes, at cost
and no more.
FINANCIAL YEAR
Article 10
1. The company's financial year shall run from the first day of January up
to and including the last day of December of each year.
2. The first financial year shall run from the commencement of the company
up to and including December thirty-first nineteenhundred and ninety-six.
BALANCE SHEET AND ANNUAL ACCOUNTS
Article 11
1. Each year, within five months from the end of the financial year, the
Managing Board shall submit the annual accounts to the shareholders. The annual
accounts shall be signed by all the managing directors; should the signature of
any one or more of them be lacking, this shall be stated along with the reason.
2. The annual General Meeting of shareholders shall determine the annual
accounts.
3. Determination of the balance sheet and the profit and loss account
without reserve shall acquit and discharge the
7
<PAGE>
Managing Board in respect of the management conducted during the financial year,
insofar as the same shall appear from the annual accounts.
DISTRIBUTION OF PROFITS
Article 12
1. The profit, by which shall be understood the net profit according to the
annual accounts determined, shall be at the disposal of the General Meeting. The
Managing Board shall be competent in its discretion to reserve such a portion of
the profit and to allocate same to the reserves of the shares in order to attain
the company's objects. The company shall keep a reserve account for the shares,
from which the Managing Board in its discretion may pay distributions in whole
or in part.
2. Any profit not reserved shall be distributed among the shareholders.
3. Insofar as the company's profit shall allow, the Managing Board may
resolve to declare an interim dividend in prepayment of the profit balance to be
expected.
4. If according to the profit and loss account a loss has been suffered,
which loss cannot be covered by any reserve or compensated in any other manner,
no profits shall be distributed in subsequent years so long as such loss has not
been made good.
AMENDMENT OF THE ARTICLES AND DISSOLUTION OF THE COMPANY
Article 13
1. A resolution to amend the articles or to dissolve the company may be
adopted only by a three fourths majority of votes in a General Meeting, at which
at least two thirds part of the issued capital shall be represented.
2. If the required capital is not represented at the meeting, a second
meeting shall be convened, to be held within two months from the first one, in
which second meeting valid resolutions may be adopted by a three fourths
majority of the votes cast, regardless of the capital then represented.
3. In the event of the company's dissolution, the liquidation shall be
effected subject to such stipulations as the General Meeting shall determine.
4. During ten (10) years from the end of the liquidation, the books and
records of the company shall remain in the custody of a person thereto
designated by the General Meeting.
8
<PAGE>
Exhibit 3.2
TO ALL TO WHOM THESE PRESENTS MAY COME, BE SEEN OR KNOWN
I, Gerald W. Green, a NOTARY PUBLIC IN AND FOR THE PROVINCE OF NOVA SCOTIA BY
ROYAL AUTHORITY DULY APPOINTED, residing at Halifax, in the said Province DO
CERTIFY AND ATTEST that the paper writing hereunto annexed is a TRUE COPY of a
document produced to me and purporting to be the Certificate of Incorporation of
Statia Terminals Canada, Incorporated (incorporation # 3000804), THE SAID COPY
having been compared by me with the said original document, an act whereof being
requested, I HAVE GRANTED the same under my notarial form and seal of office to
serve and avail as occasion shall or may require.
IN TESTIMONY WHEREOF I have hereunto subscribed my name and affixed my seal of
office at Halifax the 22nd day of November, 1996.
/s/ Gerald W. Green
---------------------------------
Gerald W. Green
A Notary Public in and for the
Province of Nova Scotia
[SEAL]
<PAGE>
[SEAL]
Nova Scotia
CERTIFICATE OF INCORPORATION
Companies Act
Registry Number
3000804
Name of Company
STATIA TERMINALS CANADA, INCORPORATED
I hereby certify that the above-mentioned company was incorporated this date
under the Companies Act and that the company is limited.
/s/ Karen Richard August 15, 1996
- ----------------------------------------- ---------------------
Deputy Registrar of Joint Stock Companies Date of Incorporation
<PAGE>
TO ALL TO WHOM THESE PRESENTS MAY COME, BE SEEN OR KNOWN
I, Gerald W. Green, a NOTARY PUBLIC IN AND FOR THE PROVINCE OF NOVA SCOTIA BY
ROYAL AUTHORITY DULY APPOINTED, residing at Halifax, in the said Province DO
CERTIFY AND ATTEST that the paper writing hereunto annexed is a TRUE COPY of a
document produced to me and purporting to be the Memorandum and Articles of
Association of Statia Terminals Canada, Incorporated (incorporation # 3000804),
THE SAID COPY having been compared by me with the said original document, an act
whereof being requested, I HAVE GRANTED the same under my notarial form and seal
of office to serve and avail as occasion shall or may require.
IN TESTIMONY WHEREOF I have hereunto subscribed my name and affixed my seal of
office at Halifax the 20th day of November, 1996.
/s/ Gerald W. Green
---------------------------------
Gerald W. Green
A Notary Public in and for the
Province of Nova Scotia
[SEAL]
<PAGE>
- --------------------------------------------------------------------------------
MEMORANDUM
AND
ARTICLES OF ASSOCIATION
OF
STATIA TERMINALS CANADA, INCORPORATED
STEWART McKELVEY STIRLING SCALES
BARRISTERS & SOLICITORS
Halifax, Nova Scotia
- --------------------------------------------------------------------------------
<PAGE>
MEMORANDUM OF ASSOCIATION
OF
STATIA TERMINALS CANADA, INCORPORATED
1. The name of the Company is Statia Terminals Canada, Incorporated.
2. There are no restrictions on the objects and powers of the Company and the
Company shall expressly have the following powers:
(1) to sell or dispose of its undertaking, or a substantial part thereof;
(2) to distribute any of its property in specie among its members; and
(3) to amalgamate with any company or other body of persons.
3. The liability of the members is limited.
4. The Company proposes to issue 1,000,000 common shares without nominal or par
value with power to divide the shares in the capital for the time being into
classes or series and to attach thereto respectively any preferred, deferred or
qualified rights, privileges or conditions, including restrictions on voting
rights and including redemption, purchase and other acquisition of such shares,
subject, however, to the provisions of the Companies Act (Nova Scotia).
I, the undersigned, whose name, address and occupation are subscribed, am
desirous of being formed into a company in pursuance of this Memorandum of
Association, and I agree to take the number and kind of shares in the capital
stock of the Company written opposite my name.
NAME, ADDRESS & OCCUPATION NO. & KIND OF SHARES TAKEN
OF SUBSCRIBER BY THE SUBSCRIBER
- --------------------------------------------------------------------------------
Fraser MacFadyen one common share
800-1959 Clipper Water St.
Halifax NS B3J2X2
Solicitor
- --------------------------------------------------------------------------------
TOTAL SHARES TAKEN: one common share
DATED this 15th day of August, 1996.
Witness to the above signature:
/s/ Faye M. Duggan
-----------------------------------
Name of Witness
Faye M. Duggan 900-1959 Upper Water St.,
Halifax, Nova Scotia, B3J 2X2
-----------------------------------
Address
Legal Secretary
-----------------------------------
Occupation
<PAGE>
TABLE OF CONTENTS TO ARTICLES OF ASSOCIATION
Article Description Page
- ------- ----------- ----
1. Interpretation 1
2. Table A not to apply 1
3. Pre-Incorporation Agreement 1
4. Payment of expenses of Incorporation, etc. 1
5. May commence business at once 1
SHARES
6. Shares under control of directors 2
7. Commission on subscription 2
8. Amount and timing of calls, etc. 2
9. Installments payable by registered holder 2
10. Joint registration of shares 2
11. Liability of joint holders - survivor only recognized 2
12. Registered holder treated as absolute owner 2
13. Private company 2
CERTIFICATES
14. Share certificates 2
15. Entitlement to share certificate 3
16. Certificate issued to joint holders 3
17. Worn out, defaced or lost certificates 3
18. Fee for certificate 3
19. Branch registers 3
CALLS
20. Directors may make calls 3
21. When calls deemed made 3
22. Notice of call - timing and contents 3
23. Interest on unpaid call 3
24. Resolution making call conclusive evidence 3
25. Shareholder advances on unpaid shares 3
FORFEITURE OF SHARES
26. Notice before forfeiture 4
27. Contents of notice 4
28. Forfeiture when notice not complied with 4
29. Notice of forfeiture resolution, register entry 4
30. Forfeited share becomes property of Company 4
31. Annulment of forfeiture, etc. 4
32. Liability of shareholder to pay call after forfeiture 4
33. Certificate of forfeiture conclusive evidence 4
<PAGE>
ii
LIEN ON SHARES
34. Lien on shares for debts of shareholder 4
35. Sale of shares not paid up to enforce lien 4
36. Application of proceeds of shares by Company 4
VALIDITY OF SALES
37. Validity of sale on forfeiture or to enforce lien 5
TRANSFER OF SHARES
38. How transfer effected 5
39. Form of transfer instrument 5
40. Directors may decline to register transfer 5
41. Delivery of transfer for registration 5
42. Fee on transfer 5
43. Transfer instrument to remain with Company 5
TRANSMISSION OF SHARES
44. Executors of deceased recognized as holder 5
45. Right of executor of sole shareholder 5
46. Transmission of shares on death, bankruptcy 6
SURRENDER OF SHARES
47. Surrender of shares in compromise 6
SHARE WARRANTS
48. Issue of Share Warrants 6
49. Conditions under which Share Warrants issued 6
INCREASE AND REDUCTION OF CAPITAL
50. Increase of capital 6
51. Terms of issue of new shares 6
52. New shares may be offered to existing shareholders 6
53. New capital within control of directors 6
54. Reduction of capital 6
ALTERATION OF CAPITAL
55. Altering capital by ordinary resolution 7
56. Altering capital by special resolution 7
57. Redemption and purchase of shares 7
INTEREST ON SHARE CAPITAL
58. When share capital may bear interest 7
<PAGE>
iii
CLASSES AND SERIES OF SHARES
59. Shares with preferred, deferred or special rights 8
MEETINGS AND VOTING BY CLASS OR SERIES
60. Procedure, etc. for class vote 8
61. Restrictions on separate class and series votes 8
BORROWING POWERS
62. Directors' authority to borrow, give security, guarantee 8
63. Securities assignable free from equities 8
64. Securities at discount, premium, with preference 8
GENERAL MEETINGS
65. Ordinary general meetings 9
66. Special general meetings - how called 9
67. Contents of requisition 9
68. Notice of meeting - Waiver of notice 9
69. Notice of two meetings for special resolution 9
70. Accidental omission of notice 9
RECORD DATES
71. Setting record dates - when no record date set 9
PROCEEDINGS AT GENERAL MEETINGS
72. Business of ordinary general meeting 9
73. Quorum prerequisite to holding meeting 10
74. Requirements for quorum 10
75. Chairman of meeting 10
76. If quorum not present - dissolution or adjournment 10
77. Resolution by show of hands - demand of poll 10
78. Conduct of poll 10
79. Casting vote 10
80. Adjournment of meeting 10
81. Poll on question of adjournment, election of chairman 10
82. Effect of demand of poll on continuance of meeting 10
VOTES OF SHAREHOLDERS
83. Voting generally 10
84. Votes on transmission by death, bankruptcy, etc. 11
85. Votes of joint registered shareholders 11
86. Voting in person, by proxy, by corporate representative 11
87. Proxy requirements generally 11
88. Votes of shareholders of unsound mind 11
89. Depositing proxies before meeting 11
90. Votes by proxy after authority revoked 11
91. Form of proxy 11
92. Votes when call due on shares 12
<PAGE>
iv
93. Resolution of directors ratified by shareholders 12
94. Resolution in writing without meeting 12
DIRECTORS
95. Number of directors - maximum and minimum 12
96. First directors 12
97. Remuneration of directors 12
98. Directors may act notwithstanding vacancy 12
99. Directors may also be officers 12
100. Vacation of office on bankruptcy, etc. 12
101. Directors' conflicts of interest 12
ELECTION OF DIRECTORS
102. Election of directors at general meeting 13
103. Retiring directors remain in office until succeeded 13
104. Number of directors elected, qualification 13
105. Removal of director 13
106. When directors may be appointed by other directors 13
MANAGING DIRECTOR
107. Authority to appoint managing director 13
108. Resignation and removal of managing director 13
109. Remuneration of managing director 13
110. Powers and duties of managing director 13
CHAIRMAN OF THE BOARD
111. Chairman of the Board 13
PRESIDENT AND VICE-PRESIDENTS
112. President 13
113. Vice-Presidents 14
SECRETARY AND TREASURER
114. Secretary 14
115. Treasurer 14
OFFICERS
116. Other officers 14
117. Same person may hold more than one office 14
PROCEEDINGS OF DIRECTORS
118. Meetings of directors - quorum requirement 14
119. Participation at meeting by telephone 14
120. Place of meetings - When notice required 14
121. Summoning of meetings 14
122. Questions decided by majority - casting vote - proxies 14
<PAGE>
v
123. Chairman of directors' meeting 15
124. Authority of meeting when quorum present 15
125. Committees of directors 15
126. Proceedings of committees of directors 15
127. Effect on meeting of defectively appointed director 15
128. Resolution of directors in writing without meeting 15
129. Remuneration of directors for extra services 15
REGISTERS
130. Registers and branch registers 15
MINUTES
131. Minutes and Minute books - minutes prima facie evidence 15
POWERS OF DIRECTORS
132. General powers of directors 16
133. Specifically enumerated powers of directors 16
SOLICITORS
134. Solicitors 17
THE SEAL
135. Use of common seal 17
136. Facsimiles of common seal 17
137. Facsimile seal for use outside Nova Scotia 18
DIVIDENDS
138. Declaration of dividends 18
139. Dividends payable from profits, etc. 18
140. Declaration of amount of profits, etc., conclusive 18
141. Interim dividends 18
142. Dividends differentiated by paid-up capital 18
143. Right to set off debts against dividends 18
144. Where lien on dividends 18
145. Dividends on shares of deceased, etc. 18
146. Setting off calls and dividends 18
147. Cash dividend, dividend in kind, stock dividend, etc. 18
148. Power of directors to settle issues re dividends 18
149. Dividends on jointly registered shares 19
150. Satisfaction of dividend 19
ACCOUNTS
151. Directors' duty to keep accounts 19
152. Where books to be kept 19
153. Inspection of books by shareholders 19
154. Reports on accounts to general meeting 19
<PAGE>
vi
AUDITORS AND AUDIT
155. Appointment of auditors at ordinary general meeting 19
156. First auditors 19
157. Directors may fill casual vacancy 19
158. Persons qualified for appointment as auditors 19
159. Removal of auditor 19
160. Remuneration 20
161. Duties of auditors 20
NOTICES
162. How notice given 20
163. Notice to shareholder without registered address 20
164. Holders of share warrants not entitled to notice 20
165. Notice to joint holders 20
166. When notice deemed given - proof of notice 20
167. Transferees bound by prior notice 20
168. Notice valid though shareholder deceased 20
169. How notice to be signed 20
170. How time to be counted 20
INDEMNITY
171. Indemnity of directors, officers, etc. 20
172. Individual liability of directors, officers, etc. 21
REMINDERS
173. Reminders to directors of obligations under Act 21
<PAGE>
ARTICLES OF ASSOCIATION
OF
STATIA TERMINALS CANADA, INCORPORATED
------------------------------------------------
INTERPRETATION
1. In these Articles, unless there is something in the subject or context
inconsistent therewith:
(1) "Act" means the Companies Act (Nova Scotia);
(2) "Articles" means these Articles of Association of the Company and all
amendments hereto;
(3) "Company" means the company named above;
(4) "director" means a director of the Company;
(5) "Memorandum" means the Memorandum of Association of the Company and
all amendments thereto;
(6) "month" means calendar month;
(7) "Office" means the registered office of the Company;
(8) "person" includes a body corporate;
(9) "proxyholder" includes an alternate proxyholder;
(10) "Register" means the register of members kept pursuant to the Act, and
where the context permits includes a branch register of members;
(11) "Registrar" means the Registrar as defined in the Act;
(12) "Secretary" includes any person appointed to perform the duties of the
Secretary temporarily;
(13) "shareholder" means member as that term is used in the Act in
connection with a company limited by shares;
(14) "special resolution" has the meaning assigned by the Act;
(15) "in writing" and "written" includes printing, lithography and other
modes of representing or reproducing words in visible form;
(16) words importing number or gender include all numbers and genders
unless the context otherwise requires.
2. The regulations in Table A in the First Schedule to the Act shall not apply
to the Company.
3. The directors may enter into and carry into effect or adopt and carry into
effect any agreement made by the promoters of the Company on behalf of the
Company and may agree to any modification in the terms of any such
agreement, either before or after its execution.
4. The directors may, out of the funds of the Company, pay all expenses
incurred for the incorporation and organization of the Company.
5. The Company may commence business as soon after incorporation as the
directors think fit, notwithstanding that part only of the shares has been
allotted.
<PAGE>
-2-
SHARES
6. The directors shall control the shares and, subject to the provisions of
these Articles, may allot or otherwise dispose of them to such person, at
such times, on such terms and conditions and, if the shares have a par
value, either at a premium or at par, as they think fit.
7. The directors may pay on behalf of the Company a reasonable commission to
any person in consideration of subscribing or agreeing to subscribe
(whether absolutely or conditionally) for any shares in the Company, or
procuring or agreeing to procure subscriptions (whether absolute or
conditional) for any shares in the Company. Subject to the Act, the
commission may be paid or satisfied in shares of the Company.
8. On the issue of shares the Company may arrange among the holders thereof
differences in the calls to be paid and in the times for their payment.
9. If the whole or part of the allotment price of any shares is, by the
conditions of their allotment, payable in installments, every such
installment shall, when due, be payable to the Company by the person who is
at such time the registered holder of the shares.
10. Shares may be registered in the names of joint holders not exceeding three
in number.
11. Joint holders of a share shall be jointly and severally liable for the
payment of all installments and calls due in respect of such share. On the
death of one or more joint holders of shares the survivor or survivors of
them shall alone be recognized by the Company as the registered holder or
holders of the shares.
12. Save as herein otherwise provided, the Company may treat the registered
holder of any share as the absolute owner thereof and accordingly shall
not, except as ordered by a court of competent jurisdiction or required by
statute, be bound to recognize any equitable or other claim to or interest
in such share on the part of any other person.
13. The Company is a private company, and:
(1) no transfer of any share or prescribed security of the Company shall
be effective unless or until approved by the directors;
(2) the number of holders of issued and outstanding prescribed securities
or shares of the Company, exclusive of persons who are in the
employment of the Company or in the employment of an affiliate of the
Company and exclusive of persons who, having been formerly in the
employment of the Company or the employment of an affiliate of the
Company, were, while in that employment, and have continued after
termination of that employment, to own at least one prescribed
security or share of the Company, shall not exceed 50 in number, two
or more persons or companies who are the joint registered owners of
one or more prescribed securities or shares being counted as one
holder; and
(3) the Company shall not invite the public to subscribe for any of its
securities.
In this Article, "private company" and "securities" have the meanings
ascribed to those terms in the Securities Act (Nova Scotia), and
"prescribed security" means any of the securities prescribed by the Nova
Scotia Securities Commission from time to time for the purpose of the
definition of "private company" in the Securities Act (Nova Scotia).
CERTIFICATES
14. Certificates of title to shares shall comply with the Act and may otherwise
be in such form as the directors may from time to time determine. Unless
the directors otherwise determine, every certificate of title to shares
shall be signed manually by at least one of the Chairman, President,
Secretary, Treasurer, a vice-president, an assistant secretary, any other
officer of the Company or any director of the Company or by or on behalf of
a share registrar, transfer agent or branch transfer agent appointed by the
Company or by any other person whom the directors may designate.
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When signatures of more than one person appear on a certificate all but one
may be printed or otherwise mechanically reproduced. All such certificates
when signed as provided in this Article shall be valid and binding upon the
Company. If a certificate contains a printed or mechanically reproduced
signature of a person, the Company may issue the certificate,
notwithstanding that the person has ceased to be a director or an officer
of the Company, and the certificate is as valid as if such person were a
director or an officer at the date of its issue. Any certificate
representing shares of a class publicly traded on any stock exchange shall
be valid and binding on the Company if it complies with the rules of such
exchange whether or not it otherwise complies with this Article.
15. Except as the directors may determine, each shareholder's shares may be
evidenced by any number of certificates so long as the aggregate of the
shares stipulated in such certificates equals the aggregate registered in
the name of the shareholder.
16. Where shares are registered in the names of two or more persons, the
Company shall not be bound to issue more than one certificate or set of
certificates, and such certificate or set of certificates shall be
delivered to the person first named on the Register.
17. Any certificate that has become worn, damaged or defaced may, upon its
surrender to the directors, be cancelled and replaced by a new certificate.
Any certificate that has become lost or destroyed may be replaced by a new
certificate upon proof of such loss or destruction to the satisfaction of
the directors and the furnishing to the Company of such undertakings of
indemnity as the directors deem adequate.
18. The sum of one dollar or such other sum as the directors from time to time
determine shall be paid to the Company for every certificate other than the
first certificate issued to any holder in respect of any share or shares.
19. The directors may cause one or more branch Registers of shareholders to be
kept in any place or places, whether inside or outside of Nova Scotia.
CALLS
20. The directors may make such calls upon the shareholders in respect of all
amounts unpaid on the shares held by them respectively and not made payable
at fixed times by the conditions on which such shares were allotted, and
each shareholder shall pay the amount of every call so made to the person
and at the times and places appointed by the directors. A call may be made
payable by instalments.
21. A call shall be deemed to have been made at the time when the resolution of
the directors authorizing such call was passed.
22. At least 14 days' notice of any call shall be given, and such notice shall
specify the time and place at which and the person to whom such call shall
be paid.
23. If the sum payable in respect of any call or instalment is not paid on or
before the day appointed for the payment thereof, the holder for the time
being of the share in respect of which the call has been made or the
instalment is due shall pay interest on such call or instalment at the rate
of 9% per year or such other rate of interest as the directors may
determine from the day appointed for the payment thereof up to the time of
actual payment.
24. At the trial or hearing of any action for the recovery of any amount due
for any call, it shall be sufficient to prove that the name of the
shareholder sued is entered on the Register as the holder or one of the
holders of the share or shares in respect of which such debt accrued, that
the resolution making the call is duly recorded in the minute book and that
such notice of such call was duly given to the shareholder sued in
pursuance of these Articles. It shall not be necessary to prove the
appointment of the directors who made such call or any other matters
whatsoever and the proof of the matters stipulated shall be conclusive
evidence of the debt.
25. The directors may receive from any shareholder willing to advance it all or
any part of the amount due upon shares held by such shareholder beyond the
sums called for; and upon the amount so paid or satisfied in advance or so
much thereof as from time to time exceeds the amount of the calls then made
upon the shares in respect of which such advance has been made, the Company
may pay interest at such rate or permit such participation in profits upon
the amount so paid or satisfied in advance as the shareholder paying such
sum in advance and the directors agree.
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FORFEITURE OF SHARES
26. If any shareholder fails to pay any call or instalment on or before the day
appointed for payment, the directors may at any time thereafter while the
call or instalment remains unpaid serve a notice on such shareholder
requiring payment thereof together with any interest that may have accrued
and all expenses that may have been incurred by the Company by reason of
such non-payment.
27. The notice shall name a day (not being less than 14 days after the date of
the notice) and a place or places on and at which such call or instalment
and such interest and expenses are to be paid. The notice shall also state
that, in the event of non-payment on or before the day and at the place
or one of the places so named, the shares in respect of which the call
was made or instalment is payable will be liable to be forfeited.
28. If the requirements of any such notice are not complied with, any shares in
respect of which such notice has been given may at any time thereafter,
before payment of all calls or instalments, interest and expenses due in
respect thereof, be forfeited by a resolution of the directors to that
effect. Such forfeiture shall include all dividends declared in respect of
the forfeited shares and not actually paid before the forfeiture.
29. When any share has been so forfeited, notice of the resolution shall be
given to the shareholder in whose name it stood immediately prior to the
forfeiture and an entry of the forfeiture shall be made in the Register.
30. Any share so forfeited shall be deemed the property of the Company and the
directors may sell, re-allot or otherwise dispose of it in such manner as
they think fit.
31. The directors may at any time before any share so forfeited has been sold,
re-allotted or otherwise disposed of, annul the forfeiture thereof upon
such conditions as they think fit.
32. Any shareholder whose shares have been forfeited shall nevertheless be
liable to pay and shall forthwith pay to the Company all calls,
instalments, interest and expenses owing upon or in respect of such shares
at the time of the forfeiture together with interest thereon at the rate of
9% per year or such other rate of interest as the directors may determine
from the time of forfeiture until payment. The directors may enforce such
payment if they think fit, but are under no obligation to do so.
33. A certificate signed by the Secretary stating that a share has been duly
forfeited on a specified date in pursuance of these Articles and the time
when it was forfeited shall be conclusive evidence of the facts therein
stated as against any person who would have been entitled to the share but
for such forfeiture.
LIEN ON SHARES
34. The Company shall have a first and paramount lien upon all shares (other
than fully paid-up shares) registered in the name of a shareholder (whether
solely or jointly with others) and upon the proceeds from the sale thereof
for debts, liabilities and other engagements of the shareholder, solely or
jointly with any other person, to or with the Company, whether or not the
period for the payment, fulfilment or discharge thereof has actually
arrived, and such lien shall extend to all dividends declared in respect of
such shares. Unless otherwise agreed, the registration of a transfer of
shares shall operate as a waiver of any lien of the Company on such shares.
35. For the purpose of enforcing such lien the directors may sell the shares
subject to it in such manner as they think fit, but no sale shall be made
until the period for the payment, fulfilment or discharge of such debts,
liabilities or other engagements has arrived, and until notice in writing
of the intention to sell has been given to such shareholder or the
shareholder's executors or administrators and default has been made by them
in such payment, fulfilment or discharge for seven days after such notice.
36. The net proceeds of any such sale alter the payment of all costs shall be
applied in or towards the satisfaction of such debts, liabilities or
engagements and the residue, if any, paid to such shareholder.
<PAGE>
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VALIDITY OF SALES
37. Upon any sale after forfeiture or to enforce a lien in purported exercise
of the powers given by these Articles the directors may cause the
purchaser's name to be entered in the Register in respect of the shares
sold, and the purchaser shall not be bound to see to the regularity of the
proceedings or to the application of the purchase money, and after the
purchaser's name has been entered in the Register in respect of such shares
the validity of the sale shall not be impeached by any person and the
remedy of any person aggrieved by the sale shall be in damages only and
against the Company exclusively.
TRANSFER OF SHARES
38. The instrument of transfer of any share in the Company shall be signed by
the transferor. The transferor shall be deemed to remain the holder of such
share until the name of the transferee is entered in the Register in
respect thereof and shall be entitled to receive any dividend declared
thereon before the registration of the transfer.
39. The instrument of transfer of any share shall be in writing in the
following form or to the following effect:
For value received, _______ hereby sell, assign, and transfer unto
______________________ shares in the capital of the Company represented by
the within certificate, and do hereby irrevocably constitute and appoint
___________________ attorney to transfer such shares on the books of the
Company with full power of substitution in the premises.
Dated the _________ day of _______, _______.
Witness:
40. The directors may, without assigning any reason therefor, decline to
register any transfer of shares
(1) not fully paid-up or upon which the Company has a lien, or
(2) the transfer of which is restricted by any agreement to which the
Company is a party.
41. Every instrument of transfer shall be left for registration at the Office
of the Company, or at any office of its transfer agent where a Register is
maintained, together with the certificate of the shares to be transferred
and such other evidence as the Company may require to prove title to or the
right to transfer the shares.
42. The directors may require that a fee determined by them be paid before or
after registration of any transfer.
43. Every instrument of transfer shall, after its registration, remain in the
custody of the Company. Any instrument of transfer that the directors
decline to register shall, except in case of fraud, be returned to the
person who deposited it.
TRANSMISSION OF SHARES
44. The executors or administrators of a deceased shareholder (not being one of
several joint holders) shall be the only persons recognized by the Company
as having any title to the shares registered in the name of such
shareholder. When a share is registered in the names of two or more joint
holders, the survivor or survivors or the executors or administrators of
the deceased survivor, shall be the only persons recognized by the Company
as having any title to, or interest in, such share.
45. Notwithstanding anything in these Articles, if the Company has only one
shareholder (not being one of several joint holders) and that shareholder
dies, the executors or administrators of the deceased shareholder shall be
entitled to register themselves in the Register as the holders of the
shares registered in the name of the deceased shareholder whereupon they
shall have all the rights given by these Articles and by law to
shareholders.
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46. Any person entitled to shares upon the death or bankruptcy of any
shareholder or in any way other than by allotment or transfer, upon
producing such evidence of entitlement as the directors require, may be
registered as a shareholder in respect of such shares, or may, without
being registered, transfer such shares subject to the provisions of these
Articles respecting the transfer of shares. The directors shall have the
same right to refuse registration as if the transferee were named in an
ordinary transfer presented for registration.
SURRENDER OF SHARES
47. The directors may accept the surrender of any share by way of compromise of
any question as to the holder being properly registered in respect thereof.
Any share so surrendered may be disposed of in the same manner as a
forfeited share.
SHARE WARRANT
48. The Company, with respect to any fully paid-up shares, may issue warrants
("Share Warrants") stating that the bearer is entitled to the shares
therein specified, and may provide, by coupons or otherwise, for the
payment of future dividends on the shares included in the Share Warrants.
49. The directors may determine and vary the conditions upon which Share
Warrants will be issued and, without limiting the generality of the
foregoing, may determine the conditions upon which
(1) a new Share Warrant or coupon will be issued in the place of one worn
out, defaced, lost or destroyed, or
(2) the bearer of a Share Warrant will be entitled to attend and vote at
general meetings, or
(3) a Share Warrant may be surrendered and the name of the bearer entered
in the Register in respect of the shares therein specified.
Subject to such conditions and to these Articles the bearer of a Share
Warrant shall be a shareholder to the full extent. The bearer of a Share
Warrant shall be subject to the conditions for the time being in force,
whether made before or after the issue of the Share Warrant.
INCREASE AND REDUCTION OF CAPITAL
50. Subject to the Act, the Company may by resolution of its shareholders
increase its share capital by the creation of new shares of such amount as
it thinks expedient.
51. Subject to the Act, the new shares may be issued upon such terms and
conditions and with such rights, privileges, limitations, restrictions and
conditions attached thereto as the Company by resolution of its
shareholders determines or, if no direction is given, as the directors
determine.
52. The Company by resolution of its shareholders may, before the issue of any
new shares, determine that such shares or any of them shall be offered in
the first instance to all the then shareholders or to the holders of any
class or series of shares in proportion to the amount of the capital held
by them, or make any other provisions as to the issue and allotment of such
shares. In default of any such determination or to the extent that it does
not apply, the directors shall control the new shares.
53. Except as otherwise provided by the conditions of issue, or by these
Articles, any capital raised by the creation of new shares shall be
considered part of the original capital and shall be subject to the
provisions herein contained with reference to payment of calls and
instalments, transfer and transmission, forfeiture, lien and otherwise.
54. The Company may, by special resolution where required, reduce its share
capital in any way and with and subject to any incident authorized and
consent required by law.
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ALTERATION OF CAPITAL
55. Subject to the Act, the Company may by resolution of its shareholders:
(1) consolidate and divide all or any of its share capital into shares of
larger amount than its existing shares;
(2) convert all or any of its paid-up shares into stock and reconvert that
stock into paid-up shares of any denomination;
(3) exchange shares of one denomination for another; or
(4) cancel shares which, at the date of the passing of the resolution in
that behalf, have not been taken or agreed to be taken by any person,
and diminish the amount of its share capital by the amount of the
shares so cancelled.
56. Subject to the Act, the Company may by special resolution:
(1) subdivide its shares, or any of them, into shares of smaller amount
than is fixed by the Memorandum, so, however, that in the subdivision
the proportion between the amount paid and the amount, if any, unpaid
on each reduced share shall be the same as it was in the case of the
share from which the reduced share is derived and the special
resolution whereby any share is subdivided may determine that as
between the holders of the shares resulting from such subdivision, one
or more of such shares shall have some preference or special advantage
as regards dividend, capital, voting or otherwise, over, or as
compared with, the others or other;
(2) convert any part of its issued or unissued share capital into
preference shares redeemable or purchasable by the Company;
(3) provide for the issue of shares without any nominal or par value
provided that, upon any such issue, a declaration executed by the
Secretary must be filed with the Registrar stating the number of
shares issued and the amount received therefor;
(4) convert all or any of its previously authorized, unissued or issued,
fully paid-up shares, other than preferred shares, with nominal or par
value into the same number of shares without any nominal or par value,
and reduce, maintain or increase accordingly its liability on any of
its shares so converted; provided that the power to reduce its
liability on any of its shares so converted may, where it results in a
reduction of capital, only be exercised subject to confirmation by the
court as provided by the Act; or
(5) convert all or any of its previously authorized, unissued or issued,
fully paid-up shares without nominal or par value into the same or a
different number of shares with nominal or par value, and for such
purpose the shares issued without nominal or par value and replaced by
shares with a nominal or par value shall be considered as fully paid,
but their aggregate par value shall not exceed the value of the net
assets of the Company as represented by the shares without par value
issued before the conversion.
57. Subject to the Act and any provisions attached to such shares, the Company
may redeem, purchase or acquire any of its shares and the directors may
determine the manner and the terms for redeeming, purchasing or acquiring
such shares and may provide a sinking fund on such terms as they think fit
for the redemption, purchase or acquisition of shares of any class or
series.
INTEREST ON SHARE CAPITAL
58. The Company may pay interest at a rate not exceeding 6% per year on share
capital issued and paid-up for the purpose of raising funds to defray the
expenses of the construction of any works or buildings or the provision of
any plant which cannot be operated profitably for a lengthy period of time.
Such interest may be paid for such period and may he charged to capital as
part of the cost of construction of the work or building or of the
provision of the plant. The payment of the interest shall not operate to
reduce the amount paid-up on the shares in respect of which it is paid. The
accounts of the Company shall show full particulars of the payment during
the period to which the accounts relate.
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CLASSES AND SERIES OF SHARES
59. Subject to the Act and the Memorandum, and without prejudice to any special
rights previously conferred on the holders of existing shares, any share
may be issued with such preferred, deferred or other special rights, or
with such restrictions, whether in regard to dividends, voting, return of
share capital or otherwise, as the Company may from time to time determine
by special resolution.
MEETINGS AND VOTING BY CLASS OR SERIES
60. Where the holders of shares of a class or series have, under the Act, the
Memorandum, the terms or conditions attaching to such shares or otherwise,
the right to vote separately as a class in respect of any matter then,
except as provided in the Act, the Memorandum, these Articles or such terms
or conditions, all the provisions in these Articles concerning general
meetings (including, without limitation, provisions respecting notice,
quorum and procedure) shall, mutatis mutandis, apply to every meeting of
holders of such class or series of shares convened for the purpose of such
vote.
61. Unless the rights, privileges, terms or conditions attached to a class or
series of shares provide otherwise, such class or series of shares shall
not have the right to vote separately as a class or series upon an
amendment to the Memorandum or Articles to:
(1) increase or decrease any maximum number of authorized shares of such
class or series, or increase any maximum number of authorized shares
of a class or series having rights or privileges equal or superior to
the shares of such class or series;
(2) effect an exchange, reclassification or cancellation of all or part of
the shares of such class or series; or
(3) create a new class or series of shares equal or superior to the shares
of such class or series.
BORROWING POWERS
62. The directors on behalf of the Company may:
(1) raise or borrow money for the purposes of the Company or any of them;
(2) secure, subject to the sanction of a special resolution where required
by the Act, the repayment of funds so raised or borrowed in such
manner and upon such terms and conditions in all respects as they
think fit, and in particular by the execution and delivery of
mortgages of the Company's real or personal property, or by the issue
of bonds, debentures or other securities of the Company secured by
mortgage or other charge upon all or any part of the Property of the
Company, both present and future, including its uncalled capital for
the time being;
(3) sign or endorse bills, notes, acceptances, cheques, contracts, and
other evidence of or securities for funds borrowed or to be borrowed
for the purposes aforesaid;
(4) pledge debentures as security for loans; and
(5) guarantee obligations of any person.
63. Bonds, debentures and other securities may be made assignable, free from
any equities between the Company and the person to whom such securities
were issued.
64. Any bonds, debentures and other securities may be issued at a discount,
premium or otherwise and with special privileges as to redemption,
surrender, drawings, allotment of shares, attending and voting at general
meetings of the Company, appointment of directors and other matters.
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GENERAL MEETINGS
65. Ordinary general meetings of the Company shall be held at least once in
every calendar year at such time and place as may be determined by the
directors and not later than 15 months after the preceding ordinary general
meeting. All other meetings of the Company shall be called special general
meetings. Ordinary or special general meetings may be held either within or
without the Province of Nova Scotia.
66. The President, a vice-president or the directors may at any time convene a
special general meeting, and the directors upon the requisition of
shareholders in accordance with the Act shall forthwith proceed to convene
such meeting or meeting to be held at such time and place or times and
places as the directors determine.
67. The requisition shall state the objects of the meeting requested, be signed
by the requisitionists and deposited at the Office of the Company. It may
consist of several documents in like form each signed by one or more of the
requisitionists.
68. At least seven clear days' notice, or such longer period of notice as may
be required by the Act, of every general meeting, specifying the place, day
and hour of the meeting and, when special business is to be considered, the
general nature of such business, shall be given to the shareholders
entitled to be present at such meeting by notice given as permitted by
these Articles. With the consent in writing of all the shareholders
entitled to vote at such meeting, a meeting may be convened by a shorter
notice and in any manner they think fit, or notice of the time, place and
purpose of the meeting may be waived by all of the shareholders.
69. When it is proposed to pass a special resolution, the two meetings may be
convened by the same notice, and it shall be no objection to such notice
that it only convenes the second meeting contingently upon the resolution
being passed by the requisite majority at the first meeting.
70. The accidental omission to give notice to a shareholder, or non-receipt of
notice by a shareholder, shall not invalidate any resolution passed at any
general meeting.
RECORD DATES
71. (1) The directors may fix in advance a date as the record date for the
determination of shareholders
(a) entitled to receive payment of a dividend or entitled to receive
any distribution;
(b) entitled to receive notice of a meeting; or
(c) for any other purpose.
(2) If no record date is fixed, the record date for the determination of
shareholders
(a) entitled to receive notice of a meeting shall be the day
immediately preceding the day on which the notice is given, or,
if no notice is given, the day on which the meeting is held, and
(b) for any other purpose shall be the day on which the directors
pass the resolution relating to the particular purpose.
PROCEEDINGS AT GENERAL MEETINGS
72. The business of an ordinary general meeting shall be to receive and
consider the financial statements of the Company and the report of the
directors and the report, if any, of the auditors, to elect directors in
the place of those retiring and to transact any other business which under
these Articles ought to be transacted at an ordinary general meeting.
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73. No business shall he transacted at any general meeting unless the requisite
quorum is present at the commencement of the business. A corporate
shareholder of the Company that has a duly authorized agent or
representative present at any such meeting shall for the purpose of this
Article be deemed to be personally present at such meeting.
74. One person, being a shareholder, proxyholder or representative of a
corporate shareholder, present and entitled to vote shall constitute a
quorum for a general meeting, and may hold a meeting.
75. The Chairman shall be entitled to take the chair at every general meeting
or, if there be no Chairman, or if the Chairman is not present within
fifteen (15) minutes after the time appointed for holding the meeting, the
President or, failing the President, a vice-president shall be entitled to
take the chair. If the Chairman, the President or a vice-president is not
present within 15 minutes after the time appointed for holding the meeting
or if all such persons present decline to take the chair, the shareholders
present entitled to vote at the meeting shall choose another director as
chairman and if no director is present or if all the directors present
decline to take the chair, then such shareholders shall chose one of their
number to be chairman.
76. If within half an hour from the time appointed for a general meeting a
quorum is not present, the meeting, if it was convened pursuant to a
requisition of shareholders, shall be dissolved; if it was convened in any
other way, it shall stand adjourned to the same day, in the next week, at
the same time and place. If at the adjourned meeting a quorum is not
present within half an hour from the time appointed for the meeting, the
shareholders present shall be a quorum and may hold the meeting.
77. Subject to the Act, at any general meeting a resolution put to the meeting
shall be decided by a show of hands unless, either before or on the
declaration of the result of the show of hands, a poll is demanded by the
chairman, a shareholder or a proxyholder; and unless a poll is so demanded,
a declaration by the chairman that the resolution has been carried, carried
by a particular majority, lost or not carried by a particular majority and
an entry to that effect in the Company's book of proceedings shall be
conclusive evidence of the fact without proof of the number or proportion
of the votes recorded in favour or against such resolution.
78. When a poll is demanded, it shall be taken in such manner and at such time
and place as the chairman directs, and either at once or after an interval
or adjournment or otherwise. The result of the poll shall be the resolution
of the meeting at which the poll was demanded. The demand of a poll may be
withdrawn. When any dispute occurs over the admission or rejection of a
vote, it shall be resolved by the chairman and such determination made in
good faith shall be final and conclusive.
79. The chairman shall not have a casting vote in addition to any vote or votes
that the chairman has as a shareholder.
80. The chairman of a general meeting may with the consent of the meeting
adjourn the meeting from time to time and from place to place, but no
business shall be transacted at any adjourned meeting other than the
business left unfinished at the meeting that was adjourned.
81. Any poll demanded on the election of a chairman or on a question of
adjournment shall be taken forthwith without adjournment.
82. The demand of a poll shall not prevent the continuance of a meeting for the
transaction of any business other than the question on which a poll has
been demanded.
VOTES OF SHAREHOLDERS
83. Subject to the Act and to any provisions attached to any class or series of
shares concerning voting rights
(1) on a show of hands every shareholder present in person, every duly
authorized representative of a corporate shareholder, and, if not
prevented from voting by the Act, every proxyholder, shall have one
vote; and
<PAGE>
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(2) on a poll every shareholder present in person, every duly authorized
representative of a corporate shareholder, and every proxyholder,
shall have one vote for every share held;
whether or not such representative or proxyholder is a shareholder.
84. Any person entitled to transfer shares upon the death or bankruptcy of any
shareholder or in any way other than by allotment or transfer may vote at
any general meeting in respect thereof in the same manner as if such person
were the registered holder of such shares so long as the directors are
satisfied at least 48 hours before the time of holding the meeting of such
person's right to transfer such shares.
85. Where there are joint registered holders of any share, any of such holders
may vote such share at any meeting, either personally or by proxy, as if
solely entitled to it. If more than one joint holder is present at any
meeting, personally or by proxy, the one whose name stands first on the
Register in respect of such share shall alone be entitled to vote it.
Several executors or administrators of a deceased shareholder in whose name
any share stands shall for the purpose of this Article be deemed joint
holders thereof.
86. Votes may be cast either personally or by proxy or, in the case of a
corporate shareholder, by a representative duly authorized under the Act.
87. A proxy shall be in writing and executed in the manner provided in the Act.
A proxy or other authority of a corporate shareholder does not require its
seal. Holders of Share Warrants shall not be entitled to vote by proxy in
respect of the shares included in such warrants unless otherwise expressed
in such warrants.
88. A shareholder of unsound mind in respect of whom an order has been made by
any court of competent jurisdiction may vote by guardian or other person in
the nature of a guardian appointed by that court, and any such guardian or
other person may vote by proxy.
89. A proxy and the power of attorney or other authority, if any, under which
it is signed or a notarially certified copy of that power or authority
shall be deposited at the Office of the Company or at such other place as
the directors may direct. The directors may, by resolution, fix a time not
exceeding 48 hours excluding Saturdays and holidays preceding any meeting
or adjourned meeting before which time proxies to be used at that meeting
must be deposited with the Company at its Office or with an agent of the
Company. Notice of the requirement for depositing proxies shall be given in
the notice calling the meeting. The chairman of the meeting shall determine
all questions as to validity of proxies and other instruments of authority.
90. A vote given in accordance with the terms of a proxy shall be valid
notwithstanding the previous death of the principal, the revocation of the
proxy, or the transfer of the share in respect of which the vote is given,
provided no intimation in writing of the death, revocation or transfer is
received at the Office of the Company before the meeting or by the chairman
of the meeting before the vote is given.
91. Every form of proxy shall comply with the Act and its regulations and
subject thereto may be in the following form:
I, _________________________ of _________________ being a shareholder
of ______________________________ hereby appoint
_______________________ of ____________________ (or failing him/her
___________________________ of__________) as proxyholder to attend and
to vote for me and on my behalf at the ordinary/special general
meeting of the Company, to be held on the _____ day of ___________,
_____ and at any adjournment thereof, or at any meeting of the Company
which may be held prior to [insert specified date or event].
[If proxy is solicited by or on behalf of management of the Company,
insert a statement to that effect.]
Dated this day of ___________________ ____________.
________________________________________
Shareholder
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92. Subject to the Act, no shareholder shall be entitled to be present or to
vote on any question either personally or by proxy, at any general meeting
or be reckoned in a quorum while any call is due and payable to the Company
in respect of any of the shares of such shareholder.
93. Any resolution passed by the directors, notice of which has been given to
the shareholders in the manner in which notices are hereinafter directed to
be given and which is, within one month after it has been passed, ratified
and confirmed in writing by shareholders entitled on a poll to three-fifths
of the votes, shall be as valid and effectual as a resolution of a general
meeting. This Article shall not apply to a resolution for winding up the
Company or to a resolution dealing with any matter that by statute or these
Articles ought to be dealt with by a special resolution or other method
prescribed by statute.
94. A resolution, including a special resolution, in writing and signed by
every shareholder who would be entitled to vote on the resolution at a
meeting is as valid as if it were passed by such shareholders at a meeting
and satisfies all of the requirements of the Act respecting meetings of
shareholders.
DIRECTORS
95. Unless otherwise determined by resolution of shareholders, the number of
directors shall not be less than one or more than seven.
96. Notwithstanding anything herein contained the subscribers to the Memorandum
shall be the first directors of the Company.
97. The directors may be paid out of the funds of the Company as remuneration
for their service such sums, if any, as the Company may by resolution of
its shareholders determine, and such remuneration shall be divided among
them in such proportions and manner as the directors determine. The
directors may also be paid their reasonable travelling, hotel and other
expenses incurred in attending meetings of directors and otherwise in the
execution of their duties as directors.
98. The continuing directors may act notwithstanding any vacancy in their body,
but if their number falls below the minimum permitted, the directors shall
not, except in emergencies or for the purpose of filling vacancies, act so
long as their number is below the minimum.
99. A director may, in conjunction with the office of director, and on such
terms as to remuneration and otherwise as the directors arrange or
determine, hold any other office or place of profit under the Company or
under any company in which the Company is a shareholder or is otherwise
interested.
100. The office of a director shall ipso facto be vacated if the director:
(1) becomes bankrupt or makes an assignment for the benefit of creditors;
(2) is, or is found by a court of competent jurisdiction to be, of unsound
mind;
(3) by notice in writing to the Company, resigns the office of director;
or
(4) is removed in the manner provided by these Articles.
101. No director shall be disqualified by holding the office of director from
contracting with the Company, either as vendor, purchaser, or otherwise,
nor shall any such contract, or any contract or arrangement entered into or
proposed to be entered into by or on behalf of the Company in which any
director is in any way interested, either directly or indirectly, be
avoided, nor shall any director so contracting or being so interested be
liable to account to the Company for any profit realized by any such
contract or arrangement by reason only of such director holding that office
or of the fiduciary relations thereby established, provided the director
makes a declaration or gives a general notice in accordance with the Act.
No director shall, as a director, vote in respect of any contract or
arrangement in which the director is so interested, and if the director
does so vote, such vote shall not be counted. This prohibition may at any
time or times be suspended or relaxed to any extent by a resolution of the
shareholders and shall not
<PAGE>
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apply to any contract by or on behalf of the Company to give to the
directors or any of them any security for advances or by way of indemnity.
ELECTION OF DIRECTORS
1O2. At the dissolution of every ordinary general meeting at which their
successors are elected, all the directors shall retire from office and be
succeeded by the directors elected at such meeting. Retiring directors
sha1l be eligible for re-election.
103. If at any ordinary general meeting at which an election of directors ought
to take place no such election takes place, or if no ordinary general
meeting is held in any year or period of years, the retiring directors
shall continue in office until their successors are elected.
104. The Company may by resolution of its shareholders elect any number of
directors permitted by these Articles and may determine or alter their
qualification.
105. The Company may, by special resolution or in any other manner permitted by
statute, remove any director before the expiration of such director's
period of office and may, if desired, appoint a replacement to hold office
during such time only as the director so removed would have held office.
106. The directors may appoint any other person as a director so long as the
total number of directors does not at any time exceed the maximum number
permitted. No such appointment, except to fill a casual vacancy, shall be
effective unless two-thirds of the directors concur in it. Any casual
vacancy occurring among the directors may be filled by the directors, but
any person so chosen shall retain office only so long as the vacating
director would have retained it if the vacating director had continued as
director.
MANAGING DIRECTORS
107. The directors may appoint one or more of their body to be managing
directors of the Company, either for a fixed term or otherwise, and may
remove or dismiss them from office and appoint replacements.
108. Subject to the provisions of any contract between a managing director and
the Company, a managing director shall be subject to the provisions as to
resignation and removal as the other directors of the Company. A managing
director who for any reason ceases to hold the office of director shall
ipso facto immediately cease to be a managing director.
109. The remuneration of a managing director shall from time to time be fixed by
the directors and may be by way of any or all of salary, commission and
participation in profits.
110. The directors may from time to time entrust to and confer upon a managing
director such of the powers exercisable under these Articles by the
directors as they think fit, and may confer such powers for such time, and
to be exercised for such objects and purposes and upon such terms and
conditions, and with such restrictions as they think expedient; and they
may confer such powers either collaterally with, or to the exclusion of,
and in substitution for, all or any of the powers of the directors in that
behalf; and may from time to time revoke, withdraw, alter or vary all or
any of such powers.
CHAIRMAN OF THE BOARD
111. The directors may elect one of their number to be Chairman and may
determine the period during which the Chairman is to hold office. The
Chairman shall perform such duties and receive such special remuneration as
the directors may provide.
PRESIDENT AND VICE-PRESIDENTS
112. The directors shall elect the President of the Company, who need not be a
director, and may determine the period for which the President is to hold
office. The President shall have general supervision of the business of the
Company and shall perform such duties as may be assigned from time to time
by the directors.
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113. The directors may also elect vice-presidents, who need not be directors,
and may determine the periods for which they are to hold office. A
vice-president shall, at the request of the President or the directors and
subject to the directions of the directors, perform the duties of the
President during the absence, illness or incapacity of the President, and
shall also perform such duties as may be assigned by the President or the
directors.
SECRETARY AND TREASURER
114. The directors shall appoint a Secretary of the Company to keep minutes of
shareholders' and directors' meetings and perform such other duties as may
be assigned by the directors. The directors may also appoint a temporary
substitute for the Secretary who shall, for the purposes of these Articles,
be deemed to be the Secretary.
115. The directors may appoint a treasurer of the Company to carry out such
duties as the directors may assign.
OFFICERS
116. The directors may elect or appoint such other officers of the Company,
having such powers and duties, as they think fit.
117. If the directors so decide the same person may hold more than one of the
offices provided for in these Articles.
PROCEEDINGS OF DIRECTORS
118. The directors may meet together for the dispatch of business, adjourn and
otherwise regulate their meetings and proceedings, as they think fit, and
may determine the quorum necessary for the transaction of business. Until
otherwise determined, one director shall constitute a quorum and may hold a
meeting.
119. If all directors of the Company entitled to attend a meeting either
generally or specifically consent, a director may participate in a meeting
of directors or of a committee of directors by means of such telephone or
other communications facilities as permit all persons participating in the
meeting to hear each other, and a director participating in such a meeting
by such means is deemed to be present at that meeting for purposes of these
Articles.
120. Meetings of directors may be held either within or without the Province of
Nova Scotia and the directs may from time to time make arrangements
relating to the time and place of holding directors' meetings, the notices
to be given for such meetings and what meetings may be held without notice.
Unless otherwise provided by such arrangements:
(1) a meeting of directors may be held at the close of every ordinary
general meeting of the Company without notice;
(2) notice of every other directors' meeting shall be given as permitted
by these Articles to each director at least 48 hours before the time
fixed for the meeting; and
(3) a meeting of directors may be held without formal notice if all the
directors are present or if those absent have signified their absent
to such meeting or their consent to the business transacted at such
meeting.
121. The President or any director may at any time, and the Secretary, upon the
request of the President or any director, shall summon a meeting of the
directors to be held at the Office of the Company. The President, the
Chairman or a majority of the directors may at any time, and the Secretary,
upon the request of the President, the Chairman or a majority of the
directors, shall summon a meeting to be held elsewhere.
122. (1) Questions arising at any meeting of directors shall he decided by a
majority of votes. The chairman of the meeting may vote as a director
but shall not have a second or casting vote.
(2) At any meeting of directors the chairman shall receive and count the
vote of any director not present in person at such meeting on any
question or matter arising at such meeting whenever such absent
director has indicated by telegram, letter or other writing lodged
with the chairman of such meeting the manner in which the absent
director desires to vote on such question or matter and such question
or matter has been specifically mentioned
<PAGE>
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in the notice calling the meeting as a question or matter to be
discussed or decided thereat. In respect of any such question or
matter so mentioned in such notice any director may give to any other
director a proxy authorizing such other director to vote for such
first named director at such meeting, and the chairman of such
meeting, after such proxy has been so lodged, shall receive and count
any vote given in pursuance thereof notwithstanding the absence of the
director giving such proxy.
123. If no Chairman is elected, or if at any meeting of directors the Chairman
is not present within five minutes after the time appointed for holding the
meeting, or declines to take the chair, the President, if a director, shall
preside. If the President is not a director, is not present at such time or
declines to take the chair, a vice-president who is also a director shall
preside. If no person described above is present at such time and willing
to take the chair, the directors present shall choose some one of their
number to be chairman of the meeting.
124. A meeting of the directors at which a quorum is present shall be competent
to exercise all or any of the authorities, powers and discretions for the
time being vested in or exercisable by the directors generally.
125. The directors may delegate any of their powers to committees consisting of
such number of directors as they think fit. Any committee so formed shall
in the exercise of the powers so delegated conform to any regulations that
may be imposed on them by the directors.
126. The meetings and proceedings of any committee of directors shall be
governed by the provisions contained in these Articles for regulating the
meetings and proceedings of the directors insofar as they are applicable
and are not superseded by any regulations made by the directors.
127. All acts done at any meeting of the directors or of a committee of
directors or by any person acting as a director shall, notwithstanding that
it is afterwards discovered that there was some defect in the appointment
of the director or person so acting, or that they or any of them were
disqualified, be as valid as if every such person had been duly appointed
and was qualified to be a director.
128. A resolution in writing and signed by every director who would be entitled
to vote on the resolution at a meeting is as valid as if it were passed by
such directors at a meeting.
129. If any one or more of the directors is called upon to perform extra
services or to make any special exertions in going or residing abroad or
otherwise for any of the purposes of the Company or the business thereof,
the Company may remunerate the director or directors so doing, either by a
fixed sum or by a percentage of profits or otherwise. Such remuneration
shall be determined by the directors and may be either in addition to or in
substitution for remuneration otherwise authorized by these Articles.
REGISTERS
130. The directors shall cause to be kept at the Company's Office in accordance
with the provisions of the Act a Register of the shareholders of the
Company, a register of the holders of bonds, debentures and other
securities of the Company and a register of its directors. Branch registers
of the shareholders and of the holders of bonds, debentures and other
securities may be kept elsewhere, either within or without the Province of
Nova Scotia, in accordance with the Act.
MINUTES
131. The directors shall cause minutes to be entered in books designated for the
purpose:
(1) of all appointments of officers;
(2) of the names of directors present at each meeting of directors and of
any committee of directors;
(3) of all orders made by the directors and committees of directors; and
(4) of all resolutions and proceedings of meetings of shareholders and of
directors.
<PAGE>
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Any such minutes of any meeting of directors or of any committee of
directors or of shareholders, if purporting to be signed by the chairman of
such meeting or by the chairman of the next succeeding meeting, shall be
receivable as prima facie evidence of the matters stated in such minutes.
POWERS OF DIRECTORS
132. The management of the business of the Company is vested in the directors
who, in addition to the powers and authorities by these Articles or
otherwise expressly conferred upon them, may exercise all such powers and
do all such acts and things as may be exercised or done by the Company and
are not hereby or by statute expressly directed or required to be exercised
or done by the shareholders, but subject nevertheless to the provisions of
any statute, the Memorandum or these Articles. No modification of the
Memorandum or these Articles shall invalidate any prior act of the
directors that would have been valid if such modification had not been
made.
133. Without restricting the generality of the terms of any of these Articles
and without prejudice to the powers conferred thereby, the directors may:
(1) take such steps as they think fit to carry out any agreement or
contract made by or on behalf of the Company;
(2) pay costs, charges and expenses preliminary and incidental to the
promotion, formation, establishment, and registration of the Company;
(3) purchase or otherwise acquire for the Company any property, rights or
privileges that the Company is authorized to acquire, at such price
and generally on such terms and conditions as they think fit;
(4) pay for any property, rights or privileges acquired by, or services
rendered to the Company either wholly or partially in cash or in
shares (fully paid-up or otherwise), bonds, debentures, or other
securities of the Company;
(5) subject to the Act, secure the fulfilment of any contracts or
engagements entered into by the Company by mortgaging or charging all
or any of the property of the Company and its unpaid capital for the
time being, or in such other manner as they think fit;
(6) appoint, remove or suspend at their discretion such experts, managers,
secretaries, treasurers, officers, clerks, agents and servants for
permanent, temporary or special services, as they from time to time
think fit, and determine their powers and duties and fix their
salaries or emoluments and require security in such instances and to
such amounts as they think fit;
(7) accept a surrender of shares from any shareholder insofar as the law
permits and on such terms and conditions as may be agreed;
(8) appoint any person or persons to accept and hold in trust for the
Company any property belonging to the Company, or in which it is
interested, execute and do all such deeds and things as may be
required in relation to such trust, and provide for the remuneration
of such trustee or trustees;
(9) institute, conduct, defend, compound or abandon any legal proceedings
by and against the Company, its directors or its officers or otherwise
concerning the affairs of the Company, and also compound and allow
time for payment or satisfaction of any debts due and of any claims or
demands by or against the Company;
(10) refer any claims or demands by or against the Company to arbitration
and observe and perform the awards;
(11) make and give receipts, releases and other discharges for amounts
payable to the Company and for claims and demands of the Company;
<PAGE>
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(12) determine who may exercise the borrowing powers of the Company and
sign on the Company's behalf bonds, debentures or other securities,
bills, notes, receipts, acceptances, assignments, transfers,
hypothecations, pledges, endorsements, cheques, drafts, releases,
contracts, agreements and all other instruments and documents;
(13) provide for the management of the affairs of the Company abroad in
such manner as they think fit, and in particular appoint any person to
be the attorney or agent of the Company with such powers (including
power to sub-delegate) and noon such terms as may be thought fit;
(14) invest and deal with any funds of the Company in such securities and
in such manner as they think fit and vary or realize such investments;
(15) subject to the Act, execute in the name and on behalf of the Company
in favour of any director or other person who may incur or be about to
incur any personal liability for the benefit of the Company such
mortgages of the Company's property, present and future, as they think
fit;
(16) give any officer or employee of the Company a commission on the
profits of any particular business or transaction or a share in the
general profits of the Company;
(17) set aside out of the profits of the Company before declaring any
dividend such amounts as they think proper as a reserve fund to meet
contingencies or provide for dividends, depreciation, repairing,
improving and maintaining any of the property of the Company and such
other purposes as the directors may in their absolute discretion think
in the interests of the Company, and invest such amounts in such
investments as they think fit, and deal with and vary such
investments, and dispose of all or any part of them for the benefit of
the Company, and divide the reserve fund into such special funds as
they think fit, with full power to employ the assets constituting the
reserve fund in the business of the Company without being bound to
keep them separate from the other assets;
(18) make, vary and repeal rules respecting the business of the Company,
its officers and employees, the shareholders of the Company or any
section or class of them;
(19) enter into all such negotiations and contracts, rescind and vary all
such contracts, and execute and do all such acts, deeds and things in
the name and on behalf of the Company as they consider expedient for
or in relation to any of the matters aforesaid or otherwise for the
purposes of the Company;
(20) provide for the management of the affairs of the Company in such
manner as they think fit.
SOLICITORS
134. The Company may employ or retain solicitors any of whom may, at the request
or on the instruction of the directors, the Chairman, the President or a
managing director, attend meetings of the directors or shareholders,
whether or not the solicitor is a shareholder or a director of the Company.
A solicitor who is also a director may nevertheless charge for services
rendered to the Company as a solicitor.
THE SEAL
135. The directors shall arrange for the safe custody of the common seal of the
Company (the "Seal"). The Seal may be affixed to any instrument in the
presence of and contemporaneously with the attesting signature of (i) any
director or officer acting within such person's authority or (ii) any
person under the authority of a resolution of the directors or a committee
thereof. For the purpose of certifying documents or proceedings the Seal
may be affixed by any director or the President, a vice-president, the
Secretary, an assistant secretary or any other officer of the Company
without the authorization of a resolution of the directors.
136. The Company may have facsimiles of the Seal which may be used
interchangeably with the Seal.
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137. The Company may have for use at any place outside the Province of Nova
Scotia, as to all matters to which the corporate existence and capacity of
the Company extends, an official seal that is a facsimile of the Seal of
the Company with the addition on its face of the name of the place where it
is to be used; and the Company may by writing under its Seal authorize any
person to affix such official seal at such place to any document to which
the Company is a party.
DIVIDENDS
138. The directors may from time to time declare such dividend as they deem
proper upon shares of the Company according to the rights and restrictions
attached to any class or series of shares, and may determine the date upon
which such dividend will be payable and that it will be payable to the
persons registered as the holders of the shares on which it is declared at
the close of business upon a record date. No transfer of such shares
registered after the record date shall pass any right to the dividend so
declared.
139. No dividends shall be payable except out of the profits, retained earnings
or contributed surplus of the Company and no interest shall be payable on
any dividend except insofar as the rights attached to any class or series
of shares provide otherwise.
140. The declaration of the directors as to the amount of the profits, retained
earnings or contributed surplus of the Company shall be conclusive.
141. The directors may from time to time pay to the shareholders such interim
dividends as in their judgment the position of the Company justifies.
142. Subject to the Memorandum, these Articles and the rights and restrictions
attached to any class or series of shares, dividends may be declared and
paid to the shareholders in proportion to the amount of capital paid-up on
the shares (not including any capital paid-up bearing interest) held by
them respectively.
143. The directors may deduct from the dividends payable to any shareholder
amounts due and payable by the shareholder to the Company on account of
calls, instalments or otherwise, and may apply the same in or towards
satisfaction of such amounts so due and payable.
144. The directors may retain any dividends on which the Company has a lien, and
may apply the same in or towards satisfaction of the debts, liabilities or
engagements in respect of which the lien exists.
145. The directors may retain the dividends payable upon shares to which a
person is entitled or entitled to transfer upon the death or bankruptcy of
a shareholder or in any way other than by allotment or transfer, until such
person has become registered as the holder of such shares or has duly
transferred such shares.
l46. When the directors declare a dividend on a class or series of shares and
also make a call on such shares payable on or before the date on which the
dividend is payable, the directors may retain all or part of the dividend
and set off the amount retained against the call.
147. The directors may declare that a dividend be paid by the distribution of
cash, paid-up shares (at par or at a premium), debentures, bonds or other
securities of the Company or of any other company or any other specific
assets held or to be acquired by the Company or in any one or more of such
ways.
148. The directors may settle any difficulty that may arise in regard to the
distribution of a dividend as they think expedient, and in particular
without restricting the generality of the foregoing may issue fractional
certificates, may fix the value for distribution of any specific assets,
may determine that cash payments will be made to any shareholders upon the
footing of the value so fixed or that fractions may be disregarded in order
to adjust the rights of all parties, and may vest cash or specific assets
in trustees upon such trusts for the persons entitled to the dividend as
may seem expedient to the directors.
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149. Any person registered as a joint holder of any share may give effectual
receipts for all dividends and payments on account of dividends in respect
of such share.
150. Unless otherwise determined by the Directors, any dividend may be paid by a
cheque or warrant delivered to or sent through the post to the registered
address of the member entitled, or, when there are joint holders, to the
registered address of that one whose name stands first on the Register for
the shares jointly held. Every cheque or warrant so delivered or sent shall
be made payable to the order of the person to whom it is delivered or sent.
The mailing or other transmission to a shareholder at the shareholder's
registered address (or, in the case of joint shareholders at the address of
the holder whose name stands first on the Register) of a cheque payable to
the order of the person to whom it is addressed for the amount of any
dividend payable in cash after the deduction of any tax which the Company
has properly withheld, shall discharge the Company's liability for the
dividend unless the cheque is not paid on due presentation. If any cheque
for a dividend payable in cash is not received, the Company shall issue to
the shareholder a replacement cheque for the same amount on such terms as
to indemnity and evidence of non-receipt as the directors may impose. No
shareholder may recover by action or other legal process against the
Company any dividend represented by a cheque that has not been duly
presented to a banker of the Company for payment or that otherwise remains
unclaimed for six years from the date on which it was payable.
ACCOUNTS
151. The directors shall cause proper books of account to be kept of the amounts
received and expended by the Company, the matters in respect of which such
receipts and expenditures take place, all sales and purchases of goods by
the Company, and the assets, credits and liabilities of the Company.
152. The books of account shall be kept at the head office of the Company or at
such other place or places as the directors may direct.
153. The directors shall from time to time determine whether and to what extent
and at what times and places and under what conditions the accounts and
books of the Company or any of them shall be open to inspection of the
shareholders, and no shareholder shall have any right to inspect any
account or book or document of the Company except as conferred by statute
or authorized by the directors or a resolution of the shareholders.
154. At the ordinary general meeting in every year the directors shall lay
before the Company such financial statements and reports in connection
therewith as may be required by the Act or other applicable statute or
regulation thereunder and shall distribute copies thereof at such times and
to such persons as may be required by statute or regulation.
AUDITORS AND AUDIT
155. The Company shall at each ordinary general meeting appoint an auditor or
auditors to hold office until the next ordinary general meeting. If at any
general meeting at which the appointment of an auditor or auditors is to
take place no such appointment takes place, or if no ordinary general
meeting is held in any year or period of years, the directly shall appoint
an auditor or auditors to hold office until the next ordinary general
meeting.
156. The first auditors of the Company may be appointed by the directors at any
time before the first ordinary general meeting and the auditors so
appointed shall hold office until such meeting unless previously removed by
a resolution of the shareholders, in which event the shareholders may
appoint auditors.
157. The directors may fill any casual vacancy in the office of the auditor but
while any such vacancy continues the surviving or continuing auditor or
auditors, if any, may act.
158. The Company may appoint as auditor any person, including a shareholder, not
disqualified by statute.
159. An auditor may be removed or replaced in the circumstances and in the
manner specified in the Act.
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160. The remuneration of the auditors shall be fixed by the shareholders, or by
the directors pursuant to authorization given by the shareholders, except
that the remuneration of an auditor appointed to fill a casual vacancy may
be fixed by the directors.
161. The auditors shall conduct such audit as may be required by the Act and
their report, if any, shall be dealt with by the Company as required by the
Act.
NOTICES
162. A notice (including any communication or document) shall be sufficiently
given, delivered or served by the Company upon a shareholder, director,
officer or auditor by personal delivery at such person's registered
address (or, in the case of a director, officer or auditor, last known
address) or by prepaid mail, telegraph, telex, facsimile machine or other
electronic means of communication addressed to such person at such address.
163. Shareholders having no registered address shall not be entitled to receive
notice.
164. The holder of a share warrant shall not, unless otherwise expressed
therein, be entitled in respect thereof to notice of any general meeting of
the Company.
165. All notices with respect to registered shares to which persons are jointly
entitled may be sufficiently given to all joint holders thereof by notice
given to whichever of such persons is named first in the Register for such
shares.
166. Any notice sent by mail shall be deemed to be given, delivered or served on
the earlier of actual receipt and the third business day following that
upon which it is mailed, and in proving such service it shall be sufficient
to prove that the notice was properly addressed and mailed with the postage
prepaid thereon. Any notice given by electronic means of communication
shall be deemed to be given when entered into the appropriate transmitting
device for transmission. A certificate in writing signed on behalf of the
Company that the notice was so addressed and mailed or transmitted shall be
conclusive evidence thereof.
167. Every person who by operation of law, transfer or other means whatsoever
becomes entitled to any share shall be bound by every notice in respect of
such share that prior to such person's name and address being entered on
the Register was duly served in the manner hereinbefore provided upon the
person from whom such person derived title to such share.
168. Any notice delivered, sent or transmitted to the registered address of any
shareholder pursuant to these Articles, shall, notwithstanding that such
shareholder is then deceased and that the Company has notice thereof, be
deemed to have been served in respect of any registered shares, whether
held by such deceased shareholder solely or jointly with other persons,
until some other person is registered as the holder or joint holder
thereof, and such service shall for all purposes of these Articles be
deemed a sufficient service of such notice on the heirs, executors or
administrators of the deceased shareholder and all joint holders of such
shares.
169. Any notice may bear the name or signature, manual or reproduced, of the
person giving the notice.
170. When a given number of days' notice or notice extending over any other
period is required to be given, the day of service and the day upon which
such notice expires shall not, unless it is otherwise provided, be counted
in such number of days or other period.
INDEMNITY
171. Every director or officer, former director or officer, or person who acts
or acted at the Company's request, as a director or officer of the Company,
a body corporate, partnership or other association of which the Company is
or was a shareholder, partner, member or creditor, and the heirs and legal
representatives of such person, in the absence of any dishonesty on the
part of such person, shall he indemnified by the Company against, and it
shall be the duty of the directors out of the funds of the Company to pay,
all costs, losses and expenses, including an amount paid to settle an
action or claim or satisfy a judgment, that such director, officer or
person may incur or become liable to pay
<PAGE>
-21-
in respect of any claim made against such person or civil, criminal or
administrative action or proceeding to which such person is made a party by
reason of being or having been a director or officer of the Company or such
body corporate, partnership or other association, whether the Company is a
claimant or party to such action or proceeding or otherwise; and the amount
for which such indemnity is proved shall immediately attach as a lien on
the property of the Company and have priority as against the shareholders
over all other claims.
172. No director or officer, former director or officer, or person who acts or
acted at the Company's request, as a director or officer of the Company, a
body corporate, partnership or other association of which the Company is or
was a shareholder, partner, member or creditor, in the absence of any
dishonesty on such person's part, shall be liable for the acts, receipts,
neglects, or defaults of any other director, officer or such person, or for
joining in any receipt or other act for conformity, or for any loss, damage
or expense happening to the Company through the insufficiency or deficiency
of title to any property acquired for or on behalf of the Company, or
through the insufficiency or deficiency of any security in or upon which
any of the funds of the Company are invested, or for any loss or damage
arising from the bankruptcy, insolvency or tortious acts of any person with
whom any funds, securities or effects are deposited, or for any loss
occasioned by error of judgment or oversight on the part of such person, or
for any other loss, damage or misfortune whatsoever which happens in the
execution of the duties of such person or in relation thereto.
REMINDERS
173. The directors shall comply with the following provisions of the Act or the
Corporations Registration Act (Nova Scotia) where indicated:
(1) Keep a current Register of shareholders (Section 42).
(2) Keep a current register of directors, officers and managers and, send
to the Registrar a copy thereof and notice of all changes therein
(Section 98).
(3) Keep a current register of holders of bonds, debentures and other
securities (Section 111 and Third Schedule).
(4) Send notice to the Registrar of any redemption or purchase of
preference shares (Section 50).
(5) Send notice to the Registrar of any consolidation, division,
conversion or reconversion of the share capital or stock of the
Company (Section 53).
(6) Send notice to the Registrar of any increase of capital (Section 55).
(7) Call a general meeting every year within the proper time (Section 83).
Meetings must be held not later than 15 months after the preceding
general meeting.
(8) Send to the Registrar copies of all special resolutions (Section 88).
(9) When shares are issued for a consideration other than cash, file a
copy of the contract with the Registrar on or before the date on which
the shares are issued (Section 109).
(10) Send to the Registrar notice of the address of the Company's Office
and of all changes in such address (Section 79).
(11) Keep proper minutes of all shareholders' meetings and directors'
meetings in the Company's minute book kept at the Company's Office
(Sections 89 and 90).
(12) Obtain a certificate under the Corporations Registration Act (Nova
Scotia) as soon as business is commenced.
(13) Send notice of recognized agent to the Registrar under the
Corporations Registration Act (Nova Scotia).
<PAGE>
-22-
Name(s) of Subscriber(s)
[ILLEGIBLE]
Dated at Halifax, Nova Scotia the 15th day of
August, 1996
Witness to above signature(s):
/s/ Faye M. Duggan
- -------------------------------
Halifax, Nova Scotia
<PAGE>
Exhibit 3.3
TO ALL TO WHOM THESE PRESENTS MAY COME, BE SEEN OR KNOWN
I, Gerald W. Green, a NOTARY PUBLIC IN AND FOR THE PROVINCE OF NOVA SCOTIA BY
ROYAL AUTHORITY DULY APPOINTED, residing at Halifax, in the said Province DO
CERTIFY AND ATTEST that the paper writing hereunto annexed is a TRUE COPY of a
document produced to me and purporting to be an Order of the Supreme Court of
Nova Scotia approving the amalgamation of Statia Terminals Point Tupper,
Incorporated and Statia Terminals Canada, Incorporated (incorporation #3000804),
amalgamated to form Statia Terminals Canada, Incorporated subject to satisfying
certain conditions included in the Order, THE SAID COPY having been compared by
me with the said original document, an act whereof being requested, I HAVE
GRANTED the same under my notarial form and seal of office to serve and avail as
occasion shall or may require.
IN TESTIMONY WHEREOF I have hereunto subscribed my name and affixed my seal of
office at Halifax the 20th day of November, 1996.
/s/ Gerald W. Green
----------------------------------
Gerald W. Green
A Notary Public in and for the
Province of Nova Scotia
[SEAL]
<PAGE>
1996 S.H. No. 133263
IN THE SUPREME COURT OF NOVA SCOTIA
IN THE MATTER OF: The Companies Act of Nova Scotia, being
Chapter 81 of the Revised Statutes of Nova
Scotia, 1989
- and -
IN THE MATTER OF: The Amalgamation of Statia Terminals Canada,
Incorporated and Statia Terminals Point
Tupper, Incorporated
ORDER OF AMALGAMATION
BEFORE THE HONOURABLE JUSTICE SUZANNE M. HOOD IN CHAMBERS.
UPON HEARING READ the affidavit of James F. Brenner, sworn November 12,
1996;
AND UPON HEARING READ the amalgamation agreement dated November 12, 1996
between Statia Terminals Canada, Incorporated and Statia Terminals Point Tupper,
Incorporated (the Amalgamation Agreement) a copy of which is annexed hereto as
Schedule A;
AND UPON IT APPEARING that all the shareholders of Statia Terminals Canada,
Incorporated and Statia Terminals Point Tupper, Incorporated have approved the
Amalgamation Agreement and that none of the creditors will be affected by the
amalgamation provided for in the Amalgamation Agreement;
AND UPON HEARING D. Fraser MacFadyen, counsel for the applicants;
<PAGE>
-2-
AND UPON MOTION
IT IS HEREBY ORDERED that the amalgamation of Statia Terminals Canada,
Incorporated and Statia Terminals Point Tupper, Incorporated pursuant to the
terms of the Amalgamation Agreement be and the same is hereby approved, subject
to the fulfilment of the conditions precedent set forth in Section 9 of the
Amalgamation Agreement on or before December 31, 1996.
IT IS FURTHER ORDERED that the fulfilment of the conditions precedent to
the amalgamation of Statia Terminals Canada, Incorporated and Statia Terminals
Point Tupper, Incorporated set forth in Section 9 of the Amalgamation Agreement
shall be conclusively deemed to have been fulfilled upon filing with the
Registrar of Joint Stock Companies pursuant to the Companies Act (Nova Scotia)
on or before December 31, 1996 of a copy of this Order (including the
Amalgamation Agreement attached hereto), certified under the hand of the
Prothonotary, together with a copy of the Certificate referenced in Section 9 of
the Amalgamation Agreement and as set forth in Schedule "A" to the Amalgamation
Agreement, executed by each of Statia Terminals Canada, Incorporated and Statia
Terminals, Inc. without the necessity of any proof of any other matter or
things, including the genuineness or authority of the signatories to the
Certificate, and that the filing of such material with the Registrar of Joint
Stock Companies shall be sufficient compliance with the provisions of subsection
(9) of Section 134 of the Companies Act (Nova Scotia).
IT IS FURTHER ORDERED that neither Statia Terminals Canada, Incorporated
nor Statia Terminals Point Tupper, Incorporated be required to give notice to
their creditors, if any, of the time and place of an application for an order of
this Court approving the Amalgamation Agreement and that such notice be and the
same is hereby dispensed with pursuant to subsection (7) of Section 134 of the
Companies Act.
<PAGE>
-3-
DATED at Halifax, Nova Scotia, this 18 day of November, 1996.
/s/ [ILLEGIBLE]
----------------------------------
Prothonotary
IN THE SUPREME COURT
COUNTY OF HALIFAX, N.S.
I hereby certify that the foregoing
document identified by the Seal of
the Court, is a true copy of the
original document on file herein.
Dated the 18 day of November A.D.,
1996
/s/ [ILLEGIBLE]
----------------------------------
Prothonotary
<PAGE>
SCHEDULE A
THIS AGREEMENT OF AMALGAMATION made as of the 12th day of November, 1996.
BETWEEN:
STATIA TERMINALS CANADA, INCORPORATED, a body corporate,
incorporated under the laws of the Province of Nova Scotia
("Canada Inc.")
OF THE ONE PART
- and -
STATIA TERMINALS POINT TUPPER, INCORPORATED, a body
corporate, formed under the laws of the Province of Nova
Scotia ("Point Tupper Inc.")
OF THE OTHER PART
WHEREAS:
A. Canada Inc. was incorporated under the Companies Act of Nova Scotia (the
"Companies Act") on August 15, 1996;
B. Point Tupper Inc. was formed under the Companies Act on January 1, 1994 by
the amalgamation of Point Tupper Terminals Company and 2293180 Nova Scotia
Limited;
C. The shareholders of Canada Inc. and Point Tupper Inc. consider it to be
desirable and in the best interests of each of them that they be
amalgamated pursuant to the provisions of Section 134 of the Companies Act.
NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of the mutual
promises herein contained, Canada Inc. and Point Tupper Inc. hereto covenant and
agree, each with the other, as follows:
1. Subject to the terms and conditions of this Agreement and the provisions of
Section 9 hereof, Canada Inc. and Point Tupper Inc. shall be amalgamated
into and continue as one company (hereinafter called the "Amalgamated
Company") pursuant to Section 134 of the Companies Act.
<PAGE>
-2-
2. The attributes and characteristics of the Amalgamated Company shall be as
follows:
(a) The name of the Amalgamated Company shall be "Statia Terminals Canada,
Incorporated";
(b) The registered office of the Amalgamated Company shall be 3817 Port
Malcolm Road, Richmond County, Nova Scotia, B0E 2V0;
(c) The authorized capital of the Amalgamated Company shall consist of
1,000,000 common shares without nominal or par value and 10,000,000
common shares of the par value of $10.00 each;
(d) There shall be no restrictions on the objects and powers of the
Amalgamated Company and the Amalgamated Company shall expressly have
the following powers:
(i) to sell or dispose of its undertaking, or a substantial part
thereof;
(ii) to distribute any of its property in specie among its members;
and
(iii) to amalgamate with any company or body of persons.
(e) The names, occupations and places of residence of the first directors
of the Amalgamated Company shall be as follows:
NAME OCCUPATION PLACE OF RESIDENCE
David B. Pittaway Businessman 311 East 71st Street,
Penthouse C
New York, NY
Justin Wender Businessman 136 East 36th Street
Apt. 4G
New York, NY
such directors to hold office until the first annual general meeting
of the shareholders of the Amalgamated Company or until their
successors are elected;
(f) Subsequent directors shall be elected at the first annual general
meeting of the shareholders of the Amalgamated Company or otherwise in
the manner provided in the Articles of Association of the Amalgamated
Company;
<PAGE>
-3-
(g) The names of the officers of the Amalgamated Company and the offices
to be held by each are as follows:
NAME OFFICE HELD
David B. Pittaway President
Justin Wender Secretary
James B. Brenner Vice-President - Finance
Jack R. Pine Assistant Secretary
(h) The liability of the shareholders in the Amalgamated Company shall be
limited;
(i) The manner of converting the shares of each of Canada Inc. and Point
Tupper Inc. which are issued and outstanding at the time and date that
the amalgamation becomes effective as set out in Section 10 hereof
into shares of the Amalgamated Company shall be as follows:
(i) each such share of Canada Inc. shall be exchanged for a share of
the same class and having the same terms and conditions, if any,
of the Amalgamated Company, each of which shall be issued as
fully paid and non-assessable;
(ii) each such share of Point Tupper Inc. shall be cancelled.
3. The Articles of Association of the Amalgamated Company shall be the
Articles of Association of Canada Inc.
4. The Amalgamated Company shall possess all the property, rights, privileges
and franchises, and shall be subject to all the liabilities, contracts and
debts of each of Canada Inc. and Point Tupper Inc.
5. All rights of creditors against the property, rights and assets of Canada
Inc. and Point Tupper Inc. respectively and all mortgages, liens or claims
upon their respective properties, rights and assets shall be unimpaired by
the proposed amalgamation and all debts, contracts, liabilities and duties
of Canada Inc. and Point Tupper Inc. respectively shall henceforth attach
to the Amalgamated Company and may be enforced against it to the same
extent as if the said debts, contracts, liabilities and duties had been
incurred or contracted by it.
6. No action or proceeding by or against Canada Inc. or Point Tupper Inc.
shall abate or be affected by the proposed amalgamation but for all
purposes of such action or proceeding by or against Canada Inc. or Point
Tupper Inc. as the case may be, they shall be deemed still to exist and the
Amalgamated Company may be substituted in such action or proceeding in the
place thereof.
<PAGE>
-4-
7. Neither Canada Inc. nor Point Tupper Inc. shall, subsequent to the date
hereof, unless this Agreement shall fail to receive required confirmation
by the shareholders of either Canada Inc. or Point Tupper Inc. or not be
approved by a Judge of the Supreme Court of Nova Scotia, or unless the
conditions precedent set out in Section 9 shall not have been satisfied by
the date specified therein, issue any unissued shares of its capital stock,
except to shareholders owning shares of either of such company as at the
date of confirmation of this Agreement by the shareholders of such company,
or to each other, or as otherwise agreed upon by unanimous resolution of
the shareholders of both Canada Inc. and Point Tupper Inc.
8. Canada Inc. and Point Tupper Inc. may by resolution of their boards of
directors assent to such alterations or modifications of this Agreement
which the shareholders of the respective companies approve by unanimous
resolution in writing or as a Judge of the Supreme Court of Nova Scotia may
require, and the expression "this Agreement" as used herein shall he read
and construed to mean and include this Agreement as so altered or modified.
9. It shall be a condition precedent to the amalgamation of Canada Inc. and
Point Tupper Inc. herein provided for becoming effective that, on or before
December 31, 1996, (a) all of the issued and outstanding shares in the
capital stock of Point Tupper Inc. shall have been directly or indirectly
acquired by Canada Inc. as sole owner thereof, and (b) the amalgamation
shall have been approved by an Order of the Supreme Court of Nova Scotia
substantially in the form set forth in Schedule "B" hereto or such other
form as the parties may agree. The satisfaction of both of such conditions
shall only he conclusively deemed to have occurred by the execution and
delivery by Canada Inc. and Statia Terminals Inc. of the Certificate in the
form set forth in Schedule "A" hereto, the execution and delivery of which
shall be conclusive evidence of the matters certified therein and the
authority of the individuals affixing their signatures thereto.
10. Effective on and from the time and date of filing of this Agreement
together with the Order of the Supreme Court of Nova Scotia approving the
amalgamation herein provided and a copy of the Certificate in the form
attached hereto as Schedule "A" executed and delivered by each of Canada
Inc. and Statia Terminals Inc., and such additional evidence, if any, of
the
<PAGE>
-5-
satisfaction of the conditions precedent set out in Section 9 as such Order
may provide with the Registrar of Joint Stock Companies pursuant to the
Companies Act, Nova Scotia, each of Canada Inc. and Point Tupper Inc. shall
be amalgamated and continue as one company in accordance with the terms of
this Agreement and the Companies Act.
IN WITNESS WHEREOF the parties hereto have caused this Agreement to be duly
and properly executed in their names and on their behalf by their proper
officers duly authorized in that behalf.
SIGNED, SEALED AND DELIVERED STATIA TERMINALS CANADA,
in the presence of: INCORPORATED
/s/ Robyn Y. Choe By: James F. Brenner
- ---------------------------- -----------------------------
Witness
STATIA TERMINALS POINT
TUPPER, INCORPORATED
/s/ Jack R. Pine By: /s/ James G. Cameron
- ---------------------------- -----------------------------
Witness
<PAGE>
SCHEDULE "A"
IN THE MATTER OF The amalgamation of Statia Terminals Canada,
Incorporated ("Canada Inc.") and Statia
Terminals Point Tupper, Incorporated ("Point
Tupper Inc.") pursuant to the terms of an
Amalgamation Agreement made as of the 12th
day of November, 1996 made between Canada
Inc. and Point Tupper Inc.
CERTIFICATE
The undersigned each hereby certify that the form of Order granted by the
Supreme Court of Nova Scotia approving the above mentioned Amalgamation
Agreement is acceptable to it.
The undersigned each hereby certify that all of the issued and outstanding
shares of Point Tupper Inc. are now owned by Canada Inc.
This certificate may be executed in separate counterparts and each executed
counterpart shall be deemed to be an original and such counterparts shall
together constitute one and the same document and shall be as valid and binding
as if all parties had attended at the same place and at the same time and
executed one document.
DATED as of this ________ day of ______________, 1996.
STATIA TERMINALS CANADA, STATIA TERMINALS, INC.
INCORPORATED
By: ______________________________ By: _____________________________
<PAGE>
SCHEDULE "B"
1996 S.H. No.
IN THE SUPREME COURT OF NOVA SCOTIA
IN THE MATTER OF: The Companies Act of Nova Scotia, being
Chapter 81 of the Revised Statutes of Nova
Scotia, 1989
- and -
IN THE MATTER OF: The Amalgamation of Statia Terminals Canada,
Incorporated and Statia Terminals Point
Tupper, Incorporated
ORDER OF AMALGAMATION
BEFORE THE HONOURABLE JUSTICE IN CHAMBERS.
UPON HEARING READ the affidavit of James F. Brenner, sworn ____________,
1996;
AND UPON HEARING READ the amalgamation agreement dated November 12, 1996
between Statia Terminals Canada, Incorporated and Statia Terminals Point Tupper,
Incorporated (the Amalgamation Agreement) a copy of which is annexed hereto as
Schedule A;
AND UPON IT APPEARING that all the shareholders of Statia Terminals Canada,
Incorporated and Statia Terminals Point Tupper, Incorporated have approved the
Amalgamation Agreement and that none of the creditors will be affected by the
amalgamation provided for in the Amalgamation Agreement;
AND UPON HEARING Richard K. Jones, Q.C., counsel for the applicants;
<PAGE>
AND UPON MOTION:
IT IS HEREBY ORDERED that the amalgamation of Statia Terminals Canada,
Incorporated and Statia Terminals Point Tupper, Incorporated pursuant to the
terms of the Amalgamation Agreement be and the same is hereby approved, subject
to the fulfilment of the conditions precedent set forth in Section 9 of the
Amalgamation Agreement on or before December 31, 1996.
IT IS FURTHER ORDERED that the fulfilment of the conditions precedent to
the amalgamation of Statia Terminals Canada, Incorporated and Statia Terminals
Point Tupper, Incorporated set forth in Section 9 of the Amalgamation Agreement
shall be conclusively deemed to have been fulfilled upon filing with the
Registrar of Joint Stock Companies pursuant to the Companies Act (Nova Scotia)
on or before December 31, 1996 of a copy of this Order (including the
Amalgamation Agreement attached hereto), certified under the hand of the
Prothonotary, together with a copy of the Certificate referenced in Section 9 of
the Amalgamation Agreement and as set forth in Schedule "A" to the Amalgamation
Agreement, executed by each of Statia Terminals Canada, Incorporated and Statia
Terminals, Inc. without the necessity of any proof of any other matter or
things, including the genuineness or authority of the signatories to the
Certificate, and that the filing of such material with the Registrar of Joint
Stock Companies shall be sufficient compliance with the provisions of subsection
(9) of Section 134 of the Companies Act (Nova Scotia).
IT IS FURTHER ORDERED that neither Statia Terminals Canada, Incorporated
nor Statia Terminals Point Tupper, Incorporated be required to give notice to
their creditors, if any, of the time and place of an application for an order of
this Court approving the Amalgamation Agreement and that such notice be and the
same is hereby dispensed with pursuant to subsection (7) of Section 134 of the
Companies Act.
<PAGE>
DATED at Halifax, Nova Scotia, this ____ day of ______________, 1996
__________________________________
Prothonotary
<PAGE>
1996 S.H. No.
-----------------------------
IN THE MATTER OF:
The Amalgamation of Statia Terminals Canada,
Incorporated and Statia Terminals Point
Tupper, Incorporated
- and -
IN THE MATTER OF:
The Companies Act of Nova Scotia, being
Chapter 81 of the Revised Statutes of Nova
Scotia, l989 as amended
---------------------------------------------
ORDER
---------------------------------------------
STEWART McKELVEY STIRLING SCALES
1959 Upper Water Street
Purdy's Wharf Tower One
P.O. Box 997
Halifax, Nova Scotia
B3J 2X2
(FMF) NS17534-15
<PAGE>
================================================================================
INDENTURE
Dated as of November 27, 1996
among
STATIA TERMINALS INTERNATIONAL N.V.,
STATIA TERMINALS CANADA, INCORPORATED,
as Issuers,
STATIA TERMINALS CORPORATION N.V.,
STATIA TERMINALS DELAWARE, INC.,
STATIA TERMINALS, INC.,
STATIA TERMINALS N.V.,
STATIA DELAWARE HOLDCO II, INC.,
SABA TRUSTCOMPANY N.V.,
BICEN DEVELOPMENT CORPORATION N.V.,
STATIA TERMINALS SOUTHWEST, INC.,
W.P. COMPANY, INC.,
SEVEN SEAS STEAMSHIP COMPANY, INC.,
SEVEN SEAS STEAMSHIP COMPANY (SINT EUSTATIUS) N.V.,
POINT TUPPER MARINE SERVICES LIMITED,
STATIA LABORATORY SERVICES N.V.,
STATIA TUGS N.V.
as Subsidiary Guarantors,
and
MARINE MIDLAND BANK,
as Trustee
----------
$135,000,000
11 3/4% First Mortgage Notes due 2003, Series A
11 3/4% First Mortgage Notes due 2003, Series B
================================================================================
<PAGE>
CROSS-REFERENCE TABLE
TIA Indenture
Section Section
- ------- ---------
310(a)(1)..................................... 7.10
(a)(2)..................................... 7.10
(a)(3)..................................... N.A.
(a)(4)..................................... N.A.
(a)(5)..................................... 7.10
(b)........................................ 7.10
(c)........................................ N.A.
311(a)........................................ 7.11
(b)........................................ 7.11
(c)........................................ N.A.
312(a)........................................ 2.05
(b)........................................ 13.03
(c)........................................ 13.03
313(a)........................................ 7.06
(b)(1)..................................... 7.06
(b)(2)..................................... 7.06
(c)........................................ 7.06; 13.02
(d)........................................ 7.06
314(a)........................................ 4.08; 4.10
(b)........................................ 11.02
(c)(1)..................................... 4.08; 13.04
(c)(2)..................................... 13.04
(c)(3)..................................... 4.08
(d)........................................ 11.04; 11.08
(e)........................................ 13.05
(f)........................................ N.A.
315(a)........................................ 7.01(b)
(b)........................................ 7.05; 13.02
(c)........................................ 7.01(a)
(d)........................................ 6.05; 7.01(c)
(e)........................................ 6.11
316(a)(last sentence)......................... 2.09
(a)(1)(A).................................. 6.05
(a)(1)(B).................................. 6.04
(a)(2)..................................... N.A.
(b)........................................ 6.07
317(a)(1)..................................... 6.08
(a)(2)..................................... 6.09
(b)........................................ 2.04
318(a)........................................ 13.01
(c)........................................ 13.01
- ----------
N.A. means Not Applicable
NOTE: This Cross-Reference Table shall not, for any purpose, be deemed to be a
part of the Indenture.
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE ONE
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01 Definitions.......................................
Section 1.02 Incorporation by Reference of TIA.................
Section 1.03 Rules of Construction.............................
ARTICLE TWO
THE SECURITIES
Section 2.01 Form and Dating...................................
Section 2.02 Execution and Authentication......................
Section 2.03 Registrar and Paying Agent........................
Section 2.04 Paying Agent to Hold Assets in Trust..............
Section 2.05 Securityholder Lists..............................
Section 2.06 Transfer and Exchange.............................
Section 2.07 Replacement Securities............................
Section 2.08 Outstanding Securities............................
Section 2.09 Treasury Securities...............................
Section 2.10 Temporary Securities..............................
Section 2.11 Cancellation......................................
Section 2.12 Defaulted Interest................................
Section 2.13 CUSIP Number......................................
Section 2.14 Deposit of Moneys.................................
Section 2.15 Book-Entry Provisions for Global
Securities......................................
Section 2.16 Registration of Transfers and
Exchanges.......................................
Section 2.17 Designation.......................................
ARTICLE THREE
REDEMPTION
Section 3.01 Notices to Trustee................................
Section 3.02 Selection of Securities to Be
Redeemed........................................
Section 3.03 Notice of Redemption..............................
Section 3.04 Effect of Notice of Redemption....................
Section 3.05 Deposit of Redemption Price;
Unclaimed Moneys................................
Section 3.06 Securities Redeemed in Part.......................
-i-
<PAGE>
ARTICLE FOUR
COVENANTS
Section 4.01 Payment of Securities.............................
Section 4.02 Maintenance of Office or Agency...................
Section 4.03 Limitation on Restricted Payments.................
Section 4.04 Limitation on Additional Indebtedness.............
Section 4.05 Corporate Existence...............................
Section 4.06 Payment of Taxes and Other Claims.................
Section 4.07 Maintenance of Properties;
Insurance, Books and Records....................
Section 4.08 Compliance Certificate;
Notice of Default...............................
Section 4.09 Compliance with Laws..............................
Section 4.10 Reports...........................................
Section 4.11 Waiver of Stay, Extension
or Usury Laws...................................
Section 4.12 Limitation on Transactions
with Affiliates.................................
Section 4.13 Limitation on Restrictions on
Distributions from Subsidiaries.................
Section 4.14 Limitation on Liens...............................
Section 4.15 Limitations on Asset Sales;
Offers to Purchase..............................
Section 4.16 Restrictions on Sale of Stock
of Subsidiaries.................................
Section 4.17 Restrictions on Sale and
Leaseback Transactions..........................
Section 4.18 Limitations on Subsidiary Debt....................
Section 4.19 Impairment of Security Interest...................
Section 4.20 Amendment to Security Documents...................
Section 4.21 Additional Subsidiary Guarantees..................
Section 4.22 Change of Business................................
Section 4.23 Payment of Additional Amounts.....................
ARTICLE FIVE
SUCCESSOR CORPORATION
Section 5.01 Mergers, Consolidations and
Sale of Assets..................................
Section 5.02 Successor Corporation Substituted.................
ARTICLE SIX
DEFAULT AND REMEDIES
Section 6.01 Events of Default.................................
Section 6.02 Acceleration......................................
Section 6.03 Other Remedies....................................
Section 6.04 Waiver of Past Defaults...........................
-ii-
<PAGE>
Section 6.05 Control by Majority...............................
Section 6.06 Limitation on Suits...............................
Section 6.07 Rights of Holders to Receive Payment..............
Section 6.08 Collection Suit by Trustee........................
Section 6.09 Trustee May File Proofs of Claim..................
Section 6.10 Priorities........................................
Section 6.11 Undertaking for Costs.............................
Section 6.12 Rights and Remedies Cumulative....................
Section 6.13 Delay or Omission Not Waiver......................
Section 6.14 Change of Control.................................
ARTICLE SEVEN
TRUSTEE
Section 7.01 Duties of Trustee.................................
Section 7.02 Rights of Trustee.................................
Section 7.03 Individual Rights of Trustee......................
Section 7.04 Trustee's Disclaimer..............................
Section 7.05 Notice of Default.................................
Section 7.06 Reports by Trustee to Holders.....................
Section 7.07 Compensation and Indemnity........................
Section 7.08 Replacement of Trustee............................
Section 7.09 Successor Trustee by Merger, Etc..................
Section 7.10 Eligibility; Disqualification.....................
Section 7.11 Preferential Collection of Claims
Against Issuers.................................
ARTICLE EIGHT
SATISFACTION AND DISCHARGE OF INDENTURE
Section 8.01 Termination of Issuers' Obligations...............
Section 8.02 Application of Trust Money........................
Section 8.03 Repayment to the Issuers..........................
Section 8.04 Reinstatement.....................................
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 9.01 Without Consent of Holders........................
Section 9.02 With Consent of Holders...........................
Section 9.03 Compliance with TIA...............................
Section 9.04 Revocation and Effect of Consents.................
Section 9.05 Notation on or Exchange of Securities.............
Section 9.06 Trustee to Sign Amendments, Etc...................
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ARTICLE TEN
GUARANTEES
Section 10.01 Unconditional Guarantee...........................
Section 10.02 Severability......................................
Section 10.03 Limitation of Subsidiary
Guarantor's Liability...........................
Section 10.04 Contribution......................................
Section 10.05 Waiver of Subrogation.............................
Section 10.06 Execution of Guarantee............................
Section 10.07 Waiver of Stay, Extension
or Usury Laws...................................
ARTICLE ELEVEN
SECURITY DOCUMENTS
Section 11.01 Collateral and Security Documents.................
Section 11.02 Recording, Etc....................................
Section 11.03 Certain Dispositions of
Collateral Without Release......................
Section 11.04 Release of Collateral.............................
Section 11.05 Eminent Domain and Other
Governmental Takings............................
Section 11.06 Trust Indenture Act Requirements..................
Section 11.07 Suits to Protect the Collateral...................
Section 11.08 Purchaser Protected...............................
Section 11.09 Powers Exercisable by Receiver
or Trustee......................................
Section 11.10 Disposition of Obligations Received...............
Section 11.11 Determinations Relating to Collateral.............
Section 11.12 Renewal and Refunding.............................
Section 11.13 Release upon Termination of
the Issuers' Obligations........................
Section 11.14 Certain Actions by Trustee........................
ARTICLE TWELVE
APPLICATION OF TRUST MONEYS
Section 12.01 "Trust Moneys" Defined............................
Section 12.02 Retirement of Securities..........................
Section 12.03 Withdrawals of Insurance Proceeds
and Condemnation Awards.........................
Section 12.04 Withdrawal of Trust Moneys for
Reinvestment....................................
Section 12.05 Powers Exercisable Notwithstanding
Event of Default..................................
Section 12.06 Powers Exercisable by Trustee
or Receiver.....................................
Section 12.07 Disposition of Securities Retired.................
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Section 12.08 Investment of Trust Moneys........................
ARTICLE THIRTEEN
MISCELLANEOUS
Section 13.01 TIA Controls......................................
Section 13.02 Notices...........................................
Section 13.03 Communications by Holders with
Other Holders...................................
Section 13.04 Certificate and Opinion as to
Conditions Precedent............................
Section 13.05 Statements Required in Certificate
or Opinion......................................
Section 13.06 Rules by Trustee, Paying Agent,
Registrar.......................................
Section 13.07 Legal Holidays....................................
Section 13.08 Governing Law.....................................
Section 13.09 No Adverse Interpretation of
Other Agreements................................
Section 13.10 No Recourse Against Others........................
Section 13.11 Successors........................................
Section 13.12 Duplicate Originals...............................
Section 13.13 Severability......................................
Signatures .........................................................
Exhibit A - Form of Series A Security
Exhibit B - Form of Series B Security
Exhibit C - Form of Legend for Global Securities
Exhibit D - Transfer Certificate
Exhibit E - Transferee Certificate for Institutional
Accredited Investors
Exhibit F - Transferee Certificate for Regulation S
Transfers
Exhibit G - Form of Netherlands Antilles Mortgage
Exhibit H - Form of Canadian Mortgage and Security
Agreement (Fixed and Floating Charge
Debenture, together with Debenture
Delivery Agreement relating thereto)
Exhibit I-1 - Form of Netherlands Antilles Securities
Pledge Agreement
Exhibit I-2 - Form of Canadian Securities Pledge Agreement
Exhibit J - Form of United States Securities Pledge and
Security Agreement
Exhibit K-1 - Form of Netherlands Antilles Security
Agreement (Fiduciary Transfer of Tangible
Assets)
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Exhibit K-2 - Form of Netherlands Antilles Security
Agreement (Fiduciary Assignment of
Intangible Assets)
Exhibit L - Form of Additional Lender Intercreditor
Agreement
Note: This Table of Contents shall not, for any purpose, be deemed to be part of
the Indenture.
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INDENTURE dated as of November 27, 1996, among Statia Terminals
International N.V., a Netherlands Antilles corporation ("Statia"), Statia
Terminals Canada, Incorporated, a corporation organized under the laws of Nova
Scotia ("Statia Canada"; and together with Statia, the "Issuers"), as Issuers,
Statia Terminals, N.V., a Netherlands Antilles corporation, Statia Delaware
HoldCo II, Inc., a Delaware corporation, Saba Trustcompany N.V., a Netherlands
Antilles corporation, Bicen Development Corporation N.V., a Netherlands Antilles
corporation, Point Tupper Marine Services Limited, a corporation organized under
the laws of Nova Scotia, Statia Terminals Delaware, Inc., a Delaware
corporation, Statia Terminals, Inc., a Delaware corporation, Statia Terminals
Corporation N.V., a Netherlands Antilles corporation, Statia Terminals
Southwest, Inc., a Texas corporation, W.P. Company, Inc., a Delaware
corporation, Seven Seas Steamship Company, Inc., a Florida corporation, Seven
Seas Steamship Company (Sint Eustatius) N.V., a Netherlands Antilles
corporation, Statia Laboratory Services N.V., a Netherlands Antilles
corporation, Statia Tugs N.V. as Subsidiary Guarantors, and Marine Midland Bank,
as Trustee (the "Trustee").
The Issuers have duly authorized the creation of an issue of 11 3/4%
First Mortgage Notes due 2003, Series A, and 11 3/4% First Mortgage Notes due
2003, Series B, to be issued in exchange for the 11 3/4% First Mortgage Notes
due 2003, Series A, pursuant to the Registration Rights Agreement and, to
provide therefor, the Issuers and the Subsidiary Guarantors have duly authorized
the execution and delivery of this Indenture. All things necessary to make the
Securities, when duly issued and executed by the Issuers and authenticated and
delivered hereunder, and the Guarantees the valid joint and several obligations
of the Issuers and the Subsidiary Guarantors, respectively, and to make this
Indenture a valid and binding agreement of the Issuers and each of the
Subsidiary Guarantors, have been done.
The Trustee is entering into this Indenture acting for the benefit
of itself as well as for the benefit of the Holders of the Securities. Each
party hereto agrees as follows for the benefit of each other party and for the
equal and ratable benefit of the Holders of the Securities:
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ARTICLE I.
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.
"Access Intercreditor Agreements" means, collectively, (i) the
Access, Use and Intercreditor Agreement, dated November 27, 1996, by and between
the Trustee and Congress Financial Corporation (Florida) and (ii) the Access,
Use and Intercreditor Agreement, dated November 27, 1996, by and between the
Trustee and Congress Financial Corporation (Canada), in each case, as such
agreements may be amended, supplemented, modified or replaced from time to time.
"Accounts Receivable" shall have the meaning ascribed to the term
"Accounts" in the Access Intercreditor Agreements.
"Acquired Indebtedness" of any Person means (a) with respect to any
other Person that becomes a direct or indirect Subsidiary of the referent Person
after the date of this Indenture, Indebtedness of such Person and its
Subsidiaries existing at the time such Person becomes a Subsidiary of the
referent Person that was not incurred in connection with, or in contemplation
of, such Person becoming a Subsidiary of the referent Person and (b) with
respect to the referent Person or any of its Subsidiaries, any Indebtedness
assumed by the referent Person or any of its Subsidiaries in connection with the
acquisition of an asset from another Person that was not incurred by such other
Person in connection with, or in contemplation of, such acquisition.
"Additional Amounts" has the meaning ascribed to such term in
Section 4.23(a).
"Additional Lender Intercreditor Agreement" means an Intercreditor
Agreement substantially in the form of Exhibit L to this Indenture, as such
agreement may be amended, supplemented, modified or replaced from time to time.
"Additional Secured Indebtedness" means Indebtedness of the Issuers
and their Restricted Subsidiaries incurred pursuant to the first paragraph of
Section 4.04, the principal amount of which shall not exceed an amount equal to
the liquidation preference of Parent's then outstanding Series C Preferred
Stock, plus accrued and unpaid dividends, if any, thereon.
"Affiliate" of any Person means any Person (i) which directly or
indirectly controls or is controlled by, or is under direct or indirect common
control with, the referent Person, (ii) which beneficially owns or holds 10% or
more of any class of the Voting Stock of the referent Person or (iii) of which
10% or more
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of the Voting Stock (or, in the case of a Person which is not a corporation, 10%
or more of the equity interest) is beneficially owned or held by the referent
Person. For purposes of this definition, control of a Person shall mean the
power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise.
"Affiliate Transaction" has the meaning ascribed to such term in
Section 4.12.
"Asset Sale" for any Person means the sale, transfer or other
disposition or series of sales, transfers or other dispositions (including
without limitation by merger or consolidation (other than a merger or
consolidation subject to the covenant described in Section 5.01 of this
Indenture) and whether by operation of law or otherwise) of any of that Person's
assets (including without limitation the sale or other disposition of Capital
Stock of any Subsidiary of such Person, whether by such Person or by such
Subsidiary), whether owned on the date of this Indenture or subsequently
acquired, outside of the ordinary course of business, excluding, however, (i)
any sale, transfer or other disposition between Statia and any of its
Wholly-Owned Restricted Subsidiaries, provided that in the event any assets
which constitute a portion of the Collateral are so sold, transferred or
disposed of, Statia or the appropriate Wholly-Owned Restricted Subsidiary, as
the case may be, shall acquire such Collateral subject to the Lien of this
Indenture and the Security Documents and shall take or cause to be taken all
action necessary or appropriate to maintain, preserve and protect the Security
Interest in such Collateral granted by the Security Documents, (ii) any sale,
transfer or other disposition, or series of sales, transfers or other
dispositions, of assets not constituting Collateral having a purchase price or
transaction value, as the case may be, of $100,000 or less, provided that no
Default or Event of Default exists at the time of such sale, transfer or
disposition, (iii) any sale, transfer or disposition by Statia or any
Wholly-Owned Restricted Subsidiary of its Accounts Receivable, (iv) the
destruction of all or any portion of the Collateral or the taking of all or any
portion of the Collateral by eminent domain and (v) any sale, transfer or other
disposition of the ship called the M/V Megan D. Gambarella, the assets
comprising the Brownsville Facility or the Capital Stock of Statia Terminals
Southwest, Inc. or HoldCo II.
"Attributable Indebtedness" of any Person, when used with respect to
any Sale and Leaseback Transaction, means, as at the time of determination,
property subject to such Sale and Leaseback Transaction and the present value
(discounted at a rate equivalent to Statia's then-current weighted average cost
of funds for borrowed money as at the time of determination, compounded on a
semi-annual basis) of the total obligations of
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the lessee for rental payments during the remaining term of the lease included
in any such Sale and Leaseback Transaction.
"Bankruptcy Law" means Title 11, U.S. Code, the Netherlands Antilles
Bankruptcy Decree (het Faillissementsbesluit) and the Bankruptcy and Insolvency
Act, Canada, or any similar federal, provincial, state or foreign law for the
relief of debtors.
"Board of Directors" means, with respect to any Person, the Board of
Directors of such Person or any committee of the Board of Directors of such
Person duly authorized, with respect to any particular matter, to exercise the
power of the Board of Directors of such Person.
"Board Resolution" of any Person means a duly adopted resolution of
the Board of Directors of such Person and certified to be in full force and
effect in an Officers' Certificate of such Person delivered to the Trustee.
"Brownsville Facility" means the facilities located in Brownsville,
Texas, at which Statia and its Restricted Subsidiaries conduct their business.
"Business Day" means any day other than a Saturday, Sunday or any
other day on which banking institutions in the City of New York are required or
authorized by law or other governmental action to be closed.
"Capital Stock" of any Person means any and all shares, rights to
purchase, warrants or options (whether or not currently exercisable),
participations or other equivalents of or interests in (however designated) the
equity (including without limitation common stock, preferred stock and
partnership, membership and other equity interests) of such Person.
"Capitalized Lease Obligations" of any Person means the obligations
of such Person to pay rent or other amounts under a lease that is required to be
capitalized for financial reporting purposes in accordance with GAAP, and the
amount of such obligation shall be the capitalized amount thereof determined in
accordance with GAAP.
"Cash" means United States dollars, Canadian dollars or Netherlands
Antilles guilders.
"Castle Harlan Agreement" means the management agreement between
Castle Harlan, Inc. and Parent dated as of the Issue Date.
"Change of Control" means the occurrence of any of the following:
(i) the consummation of any transaction the result of
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which is (x) if such transaction occurs prior to the first sale of Common Equity
of Statia or Parent pursuant to a registration statement under the Securities
Act that results in at least 25% of the then outstanding Common Equity of Statia
or Parent having been sold to the public, that the Principals and their Related
Parties beneficially own less than, directly or indirectly, 51% of the Common
Equity of Statia or Parent, and (y) if such transaction occurs thereafter, that
any Person or group (as such term is used in Section 13(d)(3) of the Exchange
Act) (other than the Principals and their Related Parties) owns, directly or
indirectly, a majority of the Common Equity of Statia or Parent, or (ii) the
first date on which any Person or Group (as defined above) other than the
Principals and their Related Parties shall have elected, or caused to be
elected, a sufficient number of its or their nominees to the Board of Directors
of Statia or Parent such that the nominees so elected (regardless of when
elected) shall collectively constitute a majority of the Board of Directors of
Statia or Parent or (iii) Statia or Parent consolidates with, or merges with or
into, another Person or sells, assigns, conveys, transfers, leases or otherwise
disposes of all or substantially all of its assets to any Person, or any Person
consolidates with, or merges with or into, Statia or Parent, in any such event
pursuant to a transaction in which the outstanding Voting Stock of Statia or
Parent, as the case may be, is converted into or exchanged for Cash, securities
or other property, other than any such transaction where the outstanding Voting
Stock of Statia or Parent, as the case may be, is converted into or exchanged
for Voting Stock (other than Disqualified Stock) of the surviving or transferee
corporation and the beneficial owners of the Voting Stock of Parent immediately
prior to such transaction own, directly or indirectly, not less than a majority
of the Voting Stock of the surviving or transferee corporation immediately after
such transaction.
"Change of Control Offer" has the meaning ascribed to that term in
Section 6.14(a).
"Change of Control Purchase Date" has the meaning ascribed to that
term in Section 6.14(a).
"Change of Control Purchase Notice" has the meaning ascribed to that
term in Section 6.14(b).
"Change of Control Purchase Price" has the meaning ascribed to that
term in Section 6.14(a).
"Collateral" means, collectively, all of the property and assets
that from time to time are subject to the Lien of the Security Documents.
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"Collateral Account" means the collateral account to be established
pursuant to Section 12.01 of this Indenture.
"Collateral Asset Sale" has the meaning ascribed to that term in
Section 4.15(a).
"Collateral Asset Sale Offer" has the meaning ascribed to that term
in Section 4.15(a).
"Commission" means the Securities and Exchange Commission.
"Common Equity" of any Person means all Capital Stock of such Person
that is generally entitled to (i) vote in the election of directors or managing
directors of such Person or (ii) if such Person is not a corporation, vote or
otherwise participate in the selection of the governing body, partners, members,
managers or others that will control the management and policies of such Person.
"Consolidated Amortization Expense" of any Person for any period
means the amortization expense of such Person and its Restricted Subsidiaries
for such period (to the extent included in the computation of Consolidated Net
Income of such Person), determined on a consolidated basis in accordance with
GAAP.
"Consolidated Depreciation Expense" of any Person for any period
means the depreciation expense of such Person and its Restricted Subsidiaries
for such period (to the extent included in the computation of Consolidated Net
Income of such Person), determined on a consolidated basis in accordance with
GAAP.
"Consolidated Fixed Charge Coverage Ratio" of any Person means, with
respect to any determination date, the ratio of (i) EBITDA for such Person's
prior four full fiscal quarters for which financial results have been reported
immediately preceding the determination date, to (ii) the aggregate Fixed
Charges of such Person for such four fiscal quarters; provided, however, that if
any calculation of Statia's Consolidated Fixed Charge Coverage Ratio requires
the use of any quarter beginning prior to the date of this Indenture, such
calculation shall be made on a pro forma basis, giving effect to the issuance of
the Securities and the use of the net proceeds therefrom as if the same had
occurred at the beginning of the four-quarter period used to make such
calculation; and provided, further, that if any such calculation requires the
use of any quarter prior to the date that any Asset Sale was consummated, or
that any Indebtedness was incurred, or that any acquisition was effected, by
Statia or any of its Restricted Subsidiaries, such calculation shall be made on
a pro forma basis, giving effect to each such Asset Sale, incurrence of
Indebtedness or acquisition, as the case may be, and the use of any proceeds
therefrom, as if the
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same had occurred at the beginning of the four-quarter period used to make such
calculation.
"Consolidated Income Tax Expense" means, for any Person for any
period, the provision for taxes based on income and profits of such Person and
its Restricted Subsidiaries to the extent such income or profits were included
in computing Consolidated Net Income of such Person for such period.
"Consolidated Interest Expense" means, without duplication, with
respect to any Person for any period, the sum of the interest expense on all
Indebtedness of such Person and its Restricted Subsidiaries for such period,
determined on a consolidated basis in accordance with GAAP and including,
without limitation (i) imputed interest on Capitalized Lease Obligations and
Attributable Indebtedness, (ii) commissions, discounts and other fees and
charges owed with respect to letters of credit securing financial obligations
and bankers' acceptance financing, (iii) the net costs associated with Hedging
Obligations, (iv) amortization of other financing fees and expenses, (v) the
interest portion of any deferred payment obligations, (vi) amortization of debt
discount or premium, if any, (vii) all other non-cash interest expense, (viii)
capitalized interest, (ix) all interest payable with respect to discontinued
operations, and (x) all interest on any Indebtedness of any other Person
guaranteed by the referent Person or any of its Restricted Subsidiaries.
"Consolidated Net Income" of any Person for any period means the net
income (or loss) of such Person and its Restricted Subsidiaries for such period
determined on a consolidated basis in accordance with GAAP; provided that there
shall be excluded from such net income (to the extent otherwise included
therein), without duplication: (i) the net income (or loss) of any Person (other
than a Restricted Subsidiary of the referent Person) in which any Person other
than the referent Person has an ownership interest, except to the extent that
any such income has actually been received by the referent Person or any of its
Wholly-Owned Restricted Subsidiaries in the form of cash dividends during such
period; (ii) except to the extent includible in the consolidated net income of
the referent Person pursuant to the foregoing clause (i), the net income (or
loss) of any Person that accrued prior to the date that (a) such Person becomes
a Restricted Subsidiary of the referent Person or is merged into or consolidated
with the referent Person or any of its Restricted Subsidiaries or (b) the assets
of such Person are acquired by the referent Person or any of its Restricted
Subsidiaries; (iii) the net income of any Restricted Subsidiary of the referent
Person during such period to the extent that the declaration or payment of
dividends or similar distributions by such Restricted Subsidiary of that income
(a) is not permitted by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental regulation
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applicable to that Restricted Subsidiary during such period or (b) would be
payable as Taxes as a result of such dividend or distribution; (iv) any gain
(but not loss), together with any related provisions for taxes on any such gain,
realized during such period by the referent Person or any of its Restricted
Subsidiaries upon (a) the acquisition of any securities, or the extinguishment
of any Indebtedness, of the referent Person or any of its Restricted
Subsidiaries or (b) any Asset Sale by the referent Person or any of its
Restricted Subsidiaries, (v) any extraordinary gain (but not extraordinary
loss), together with any related provision for Taxes on any such extraordinary
gain, realized by the referent Person or any of its Restricted Subsidiaries
during such period; and (vi) in the case of a successor to such Person by
consolidation, merger or transfer of its assets, any earnings of the successor
prior to such merger, consolidation or transfer of assets; and provided,
further, that (y) any gain referred to in clauses (iv) and (v) above that is
received in Cash by the referent Person or one of its Restricted Subsidiaries
during such period shall be included in the consolidated net income of the
referent Person for computations made pursuant to Section 4.03, and (z) any
extraordinary loss incurred by the referent Person and its Restricted
Subsidiaries as a result of the premium paid to repurchase Securities in
connection with a Collateral Asset Sale Offer during such period shall be
excluded from any computation of consolidated net income of such referent Person
to the extent of any extraordinary gain realized by the referent Person and its
Restricted Subsidiaries resulting from such Collateral Asset Sale during such
period.
"Consolidated Net Worth" means, with respect to any Person as of any
date, the sum of (i) the consolidated equity of the common shareholders of such
Person and its consolidated Restricted Subsidiaries as of such date plus (ii)
the respective amounts reported on such Person's balance sheet as of such date
with respect to any series of preferred stock (other than Disqualified Stock)
less all write-ups (other than write-ups resulting from foreign currency
translations and write-ups of tangible assets of a going concern business made
within 12 months after the acquisition of such business) subsequent to the Issue
Date in the book value of any asset owned by such Person or a Restricted
Subsidiary of such Person.
"Consolidated Tangible Assets" of any Person as of any date means
the total assets of such Person and its Restricted Subsidiaries (excluding any
assets that would be classified as "intangible assets" under GAAP) on a
consolidated basis at such date, determined in accordance with GAAP, less all
write-ups subsequent to the Issue Date in the book value of any asset owned by
such Person or any of its Restricted Subsidiaries.
"Currency Agreement" means any foreign exchange contract, currency
swap agreement or other similar agreement or
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arrangement designed to protect Statia or any of its Restricted Subsidiaries
against fluctuations in currency values.
"Custodian" means any receiver, trustee, assignee, liquidator,
sequestrator, curator (in the case of bankruptcy in the Netherlands Antilles),
bewindvoerder (in the case of suspension of payments in the Netherlands
Antilles) or similar official under any Bankruptcy Law.
"Default" means any event, act or condition that is, or after notice
or the passage of time or both would be, an Event of Default.
"Depository" means, with respect to the Securities issued in the
form of one or more Global Securities, The Depository Trust Company or another
Person designated as Depository by the Issuers, which must be a clearing agency
registered under the Exchange Act.
"Destruction" has the meaning ascribed to that term in Section
4.15(c).
"Disqualified Stock" means, with respect to any Person, any Capital
Stock of such Person or any of its Subsidiaries that, by its terms, by the terms
of any agreement related thereto or by the terms of any security into which it
is convertible, puttable or exchangeable, is, or upon the happening of any event
or the passage of time would be, required to be redeemed or repurchased by such
Person or any of its Subsidiaries, whether or not at the option of the Holder
thereof, or matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, in whole or in part, on or prior to the Final Maturity
Date of the Securities; provided, however, that any class of Capital Stock of
such Person that, by its terms, authorizes such Person to satisfy in full its
obligations with respect to the payment of dividends or upon maturity,
redemption (pursuant to a sinking fund or otherwise) or repurchase thereof or
otherwise by the delivery of Capital Stock that is not Disqualified Stock, and
that is not convertible, puttable or exchangeable for Disqualified Stock, shall
not be deemed to be Disqualified Stock so long as such Person satisfies its
obligations with respect thereto solely by the delivery of Capital Stock that is
not Disqualified Stock.
"EBITDA" means, with respect to any Person for any period, without
duplication, the sum of the amounts for such period of (i) Consolidated Net
Income, (ii) Consolidated Income Tax Expense, (iii) Consolidated Amortization
Expense (but only to the extent not included in Fixed Charges), (iv)
Consolidated Depreciation Expense, (v) Fixed Charges and (vi) all other non-cash
items reducing the Consolidated Net Income (excluding any such non-cash charge
that results in an accrual of a reserve for
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cash charges in any future period) of such Person and its Restricted
Subsidiaries, in each case determined on a consolidated basis in accordance with
GAAP (provided, however, that the amounts set forth in clauses (ii) through (vi)
shall be included only to the extent such amounts reduce Consolidated Net
Income), less the aggregate amount of all non-cash items, determined on a
consolidated basis, to the extent such items increase Consolidated Net Income.
"Equity Offerings" means (i) an offering or sale of Capital Stock
(other than Disqualified Stock) of Statia pursuant to a registration statement
filed with the Commission in accordance with the Securities Act or pursuant to
an exemption from the registration requirements thereof or (ii) a contribution
to the capital of Statia by Parent of the net cash proceeds received by Parent
from a substantially concurrent offering or sale of Capital Stock of Parent
(other than to Statia or a Subsidiary of Statia) pursuant to a registration
statement filed with the Commission in accordance with the Securities Act or
pursuant to an exemption from the registration requirements thereof.
"Events of Default" has the meaning ascribed to that term in Section
6.01.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Excluded Holder" shall have the meaning ascribed to such term in
Section 4.23(a).
"Facilities" means, collectively, the Brownsville Facility, the
Point Tupper Facility and the St. Eustatius Facility.
"fair market value" means, with respect to any asset or property,
the price which could be negotiated in an arm's-length free market transaction,
for cash, between a willing seller and a willing buyer, neither of whom is under
undue pressure or compulsion to complete the transaction. Fair market value
shall be determined by the Board of Directors of Statia acting in good faith and
shall be evidenced by a Board Resolution of Statia delivered to the Trustee
except (a) any determination of fair market value made with respect to any
parcel of Real Property and related fixtures shall be made by an Independent
Financial Advisor and (b) as otherwise indicated in this Indenture or the
Security Documents.
"Fifth Anniversary" means the fifth anniversary of the later of (i)
the Issue Date and (ii) if an Exchange Offer is consummated within six months of
the Issue Date, the consummation of the Exchange Offer.
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"Final Maturity Date" means November 15, 2003.
"Financial Instruments" means (i) securities issued or directly and
fully guaranteed or insured by the United States or the Canadian Government or
any agency or instrumentality thereof having maturities of not more than 12
months from the date of acquisition and rated at least "A" or the equivalent by
either Moody's Investors Service, Inc. or Standard & Poor's Ratings Services,
(ii) certificates of deposit and Eurodollar time deposits with maturities of 12
months or less from the date of acquisition, bankers' acceptances with
maturities not exceeding 12 months and overnight bank deposits, in each case
with any domestic commercial bank having capital and surplus in excess of $250
million and a Keefe Bank Watch Rating of B or better, (iii) repurchase
obligations with a term of not more than 30 days for underlying securities of
the types described in clauses (i) and (ii) entered into with any financial
institution meeting the qualifications specified in clause (ii) above, (iv)
commercial paper having the highest rating obtainable from Moody's Investors
Service, Inc. or Standard & Poor's Ratings Services and in each case maturing
within 12 months after the date of acquisition, (v) securities with maturities
of 12 months or less from the date of acquisition backed by standby or direct
pay letters of credit issued by any bank satisfying the requirement of clause
(ii) above, and (vi) any money-market fund sponsored by any registered broker
dealer or mutual fund distributor that invests solely in instruments of the type
set forth above.
"Fixed Charges" means, with respect to any Person for any period,
the sum of (a) the Consolidated Interest Expense of such Person and its
Restricted Subsidiaries for such period, and (b) the product of (i) all cash
dividend payments (and non-cash dividend payments in the case of a Person that
is a Restricted Subsidiary) on any series of preferred stock of such Person or a
Restricted Subsidiary of such Person, times (ii) a fraction, the numerator of
which is one and the denominator of which is one minus the then current combined
federal, state, local or equivalent foreign statutory tax rate of such Person,
expressed as a decimal, in each case, on a consolidated basis and in accordance
with GAAP.
"GAAP" means generally accepted accounting principles set forth in
the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession of the United States, as in effect on the date of this
Indenture.
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"Global Security" means a security evidencing all or a part of the
Securities issued to the Depository in accordance with Section 2.01 and bearing
the legend prescribed in Exhibit C.
"Guarantee" has the meaning ascribed to that term in Section 10.01.
"Hedging Obligations" of any Person means the obligations of such
Person pursuant to any interest rate swap agreement, interest rate collar
agreement or other similar agreement or arrangement relating to interest rates.
"Holder" or "Securityholder" means the Person in whose name a
Security in the register of the Securities maintained by the Registrar pursuant
to Section 2.03.
"Indebtedness" of any Person at any date means, without duplication:
(i) all liabilities, contingent or otherwise, of such Person for borrowed money
(whether or not the recourse of the lender is to the whole of the assets of such
Person or only to a portion thereof); (ii) all obligations of such Person
evidenced by bonds, debentures, notes or other similar instruments; (iii) all
obligations of such Person in respect of letters of credit or other similar
instruments (or reimbursement obligations with respect thereto); (iv) all
obligations of such Person with respect to any Currency Agreement, Oil and
Petroleum Hedging Contracts or Hedging Obligations; (v) all obligations of such
Person to pay the deferred and unpaid purchase price of property or services,
except trade payables and accrued expenses incurred by such Person in the
ordinary course of business in connection with obtaining goods, materials or
services, which payable is not overdue by more than 60 days according to the
original terms of sale unless such payable is being contested in good faith;
(vi) the maximum fixed repurchase price of all Disqualified Stock of such
Person; (vii) all Capitalized Lease Obligations of such Person; (viii) all
Indebtedness of others secured by a Lien on any asset of such Person, whether or
not such Indebtedness is assumed by such Person; (ix) all Indebtedness of others
guaranteed by such Person to the extent of such guarantee; and (x) all
Attributable Indebtedness of such Person. The amount of Indebtedness of any
Person at any date shall be the outstanding balance at such date of all
unconditional obligations as described above, the maximum liability of such
Person for any such contingent obligations at such date and, in the case of
clause (viii), the lesser of (A) the fair market value of any asset subject to a
Lien securing the Indebtedness of others on the date that the Lien attaches and
(B) the amount of the Indebtedness secured. For purposes of the preceding
sentence, the "maximum fixed repurchase price" of any Disqualified Stock that
does not have a fixed repurchase price shall be calculated in accordance with
the terms of such Disqualified Stock as if such Disqualified Stock were
purchased
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on any date on which Indebtedness shall be required to be determined pursuant to
the Indenture, and if such price is based upon, or measured by, the fair market
value of such Disqualified Stock (or any equity security for which it may be
exchanged or converted), such fair market value shall be determined in good
faith by the Board of Directors of such Person, which determination shall be
evidenced by a Board Resolution.
"Indenture" means this Indenture, as amended or supplemented from
time to time in accordance with the terms hereof.
"Independent Financial Advisor" means an accounting, appraisal or
investment banking firm of nationally recognized standing in the United States
that is, in the reasonable judgment of Statia's Board of Directors, qualified to
perform the task for which it has been engaged and disinterested and independent
with respect to Statia and its Affiliates.
"Initial Purchaser" means Dillon, Read & Co. Inc.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as that term is defined in Rule 501(a)(1), (2), (3) or (7)
under the Securities Act.
"Intercreditor Agreements" means, collectively, (i) the Access
Intercreditor Agreements and (ii) any Additional Lender Intercreditor Agreement.
"Interest Payment Date" means the stated maturity of an installment
of interest on the Securities.
"Inventory" shall have the meaning ascribed to such term in the
Access Intercreditor Agreements.
"Investments" of any Person means (i) all investments by such Person
in any other Person in the form of loans, advances or capital contributions
(excluding commission, travel and similar advances to officers and employees
made in the ordinary course of business) or similar credit extensions
constituting Indebtedness of such Person, and any guarantee of Indebtedness of
any other Person, (ii) all purchases (or other acquisitions for consideration)
by such Person of Indebtedness, Capital Stock or other securities of any other
Person and (iii) all other items that would be classified as investments
(including without limitation purchases of assets outside the ordinary course of
business) on a balance sheet of such Person prepared in accordance with GAAP.
"Issue Date" means the date the Securities are initially issued.
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"Issuers" means the parties named as such in this Indenture until a
successor or successors replace either or both of them pursuant to this
Indenture and thereafter means such successor or successors.
"Land Swap" means (i) the conveyance by Statia Terminals Canada,
Incorporated to the Province of Nova Scotia of a portion (consisting of
approximately 1,296 acres comprising Lake Landrie, certain adjacent watershed
lands and certain road rights-of-way) of the Mortgaged Property located in
Canada described as the "Land Swap-Sale Parcel" in the Survey delivered to the
Trustee on the date hereof relating to such Mortgaged Property, and (ii) the
acquisition by Statia Terminals Canada, Incorporated from the Province of Nova
Scotia of certain unused road rights-of-way on the Mortgaged Property located in
Canada described as the "Land Swap-Acquisition Parcel" in the Survey delivered
to the Trustee on the date hereof relating to such Mortgaged Property.
"Lender Collateral" means the Accounts Receivable, Inventory and
Intangibles (as defined in the Access Intercreditor Agreements).
"Lien" means, with respect to any asset or property, any mortgage,
deed of trust, debenture, fiduciary transfer, fiduciary assignment, lien
(statutory or other), pledge, lease, easement, restriction, covenant, charge,
security interest or other encumbrance of any kind or nature in respect of such
asset or property, whether or not filed, recorded or otherwise perfected under
applicable law (including without limitation any conditional sale or other title
retention agreement, and any lease in the nature thereof, any option or other
agreement to sell, and any filing of, or agreement to give, any financing
statement under the Uniform Commercial Code (or equivalent statutes) of any
jurisdiction). For the avoidance of doubt, any escrow arrangement referred to in
the definition of Megan Escrow Amount shall not be deemed to be or to create a
Lien.
"Liquidated Damages" has the meaning ascribed to such term in the
Registration Rights Agreement.
"Management" means the Directors, Managing Directors and executive
officers of the Issuers and their Affiliates.
"Megan Escrow Amount" shall mean the amount of any net proceeds from
any sale of the M/V Megan D. Gambarella that shall have been deposited into an
escrow arrangement, together with earnings thereon.
"Mortgage" means each mortgage instrument or debenture (and each
debenture delivery agreement, if any, relating thereto), substantially in the
form of Exhibit G hereto in the
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case of Real Property located in the Netherlands Antilles, or Exhibit H hereto
(to the extent Exhibit H encumbers Real Property) in the case of Real Property
located in Canada or either such Exhibit, as appropriate in the case of other
Real Property intended to be encumbered by a Mortgage hereby (including such
changes to such form as may be necessary or desirable to conform to applicable
laws or customs regarding property in the jurisdiction where such instrument is
to be recorded), as the same may be amended, supplemented or otherwise modified
from time to time in accordance with the terms hereof and thereof.
"Mortgaged Property" means any Real Property that is subject to a
Mortgage.
"Net Proceeds" with respect to any Asset Sale by any Person means
the proceeds in the form of Financial Instruments (including Cash which is
immediately exchanged into Financial Instruments) received by such Person from
such Asset Sale, including payments in respect of deferred payment obligations
when received in the form of Cash or Financial Instruments after (a) provision
for all income or other taxes measured by or resulting from such Asset Sale or
the transfer of the proceeds of such Asset Sale to such Person, (b) payment of
all reasonable out-of-pocket fees and expenses related to such Asset Sale
(including without limitation brokerage, legal, accounting and investment
banking fees and commissions) and (c) in the case of any Non-Collateral Asset
Sale, repayment of Indebtedness that is required by the terms thereof to be
repaid in connection with such Asset Sale.
"New Bank Borrowers" means, collectively, Statia Canada, Point
Tupper Marine Services Limited, Statia Terminals N.V. and Seven Seas Steamship
Company, Inc.
"New Bank Credit Facility" means, collectively, (i) the Loan and
Security Agreement dated as of November 27, 1996 by and among Congress Financial
Corporation (Florida), as lender, and Statia Terminals N.V., as borrower, and
(ii) the Loan Agreement dated as of November 27, 1996 by and between Congress
Financial Corporation (Canada), as lender, and Statia Canada and Point Tupper
Marine Services Limited, as borrowers, in each case, as such agreement may be
amended, supplemented, modified or replaced from time to time.
"New Bank Lenders" means, collectively, Congress Financial
Corporation (Florida) and Congress Financial Corporation (Canada).
"Non-Collateral Asset Sale" has the meaning ascribed to that term in
Section 4.15(b).
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"Non-Collateral Asset Sale Offer" has the meaning ascribed to that
term in Section 4.15(b).
"Non-Recourse Purchase Money Indebtedness" means Indebtedness of
Statia or any of its Restricted Subsidiaries incurred to finance the purchase of
any assets of Statia or any of its Restricted Subsidiaries within 90 days of
such purchase so long as (a) the amount of Indebtedness thereunder does not
exceed 100% of the purchase cost of such assets, (b) the purchase cost of such
assets is or should be included in "additions to property, plant and equipment"
in accordance with GAAP, (c) such Indebtedness is non-recourse to Statia or any
of its Restricted Subsidiaries or any of their respective assets other than the
assets so purchased and (d) the purchase of such assets is not part of an
acquisition of any Person.
"Obligations" means all obligations of the Issuers, the Subsidiary
Guarantors and the Pledgors for principal, premium, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities and amounts
payable under this Indenture, the Securities, the Guarantees and the Security
Documents.
"Offers to Purchase" means one or more Collateral Asset Sale Offer,
Non-Collateral Asset Sale Offer and Proceeds Offer, as the case may be.
"Officer" means, with respect to any Person, the Chairman of the
Board, the Managing Director, the Chief Executive Officer, the President, any
Vice President, the Chief Financial Officer, the Controller, or the Secretary of
such Person.
"Officers' Certificate" means a certificate signed by two Officers
of Statia, Statia Canada, a Subsidiary Guarantor or a Pledgor, as the case may
be.
"Offshore Physical Securities" has the meaning ascribed to that
term in Section 2.01.
"Oil and Petroleum Hedging Contracts" of any Person means any oil or
petroleum products hedging agreement or other similar agreement or arrangement
designed to protect such Person or any of its Restricted Subsidiaries against
fluctuations in the market price of oil or petroleum products.
"Opinion of Counsel" means a written opinion from legal counsel (who
may be an employee of the Issuers) which and who are acceptable to the Trustee.
"Option Agreement" means the Option Agreement dated as of
October 20, 1993, by and between Statia Canada (as successor
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to Point Tupper Terminals Company), as optionor, and Scotia Synfuels Limited, as
optionee.
"Option Parcel" means a portion of the Mortgaged Property located in
Canada designated in the Option Agreement as the "Future Synfuels Site" and
described as such in the Survey delivered to the Trustee on the date hereof
relating to such Mortgaged Property.
"Parent" means Statia Terminals Group N.V. and its successors.
"Paying Agent" has the meaning ascribed to that term in
Section 2.03.
"Payment Restriction", with respect to a Restricted Subsidiary of
any Person, means any encumbrance, restriction or limitation, whether by
operation of the terms of its charter or by reason of any agreement, instrument,
judgment, decree, order, statute, rule or governmental regulation, on the
ability of (i) such Restricted Subsidiary to (a) pay dividends or make other
distributions on its Capital Stock or make payments on any obligation, liability
or Indebtedness owed to such Person or any other Restricted Subsidiary of such
Person, (b) make loans or advances to such Person or any other Restricted
Subsidiary of such Person or (c) transfer any of its properties or assets to
such Person or any other Restricted Subsidiary of such Person or (ii) such
Person or any other Restricted Subsidiary of such Person to receive or retain
any such dividends, distributions or payments, loans or advances or transfer or
properties or assets. For the avoidance of doubt, any escrow arrangement
referred to in the definition of Megan Escrow Amount shall not be deemed to be
or to create a Payment Restriction.
"Permitted Equipment" means machinery (other than tanks, pipelines,
docks and the SPM), furniture, apparatus, tools, implements or other similar
property of Statia and its Restricted Subsidiaries.
"Permitted Investments" means (i) Financial Instruments; (ii)
certificates of deposit or Eurodollar deposits due within one year with a
commercial bank having capital funds of at least $500 million; (iii) debt of any
state or political subdivision that is rated A or better by Moody's Investors
Service, Inc. or Standard & Poor's Ratings Services; and (iv) mutual funds that
invest solely in Permitted Investments described in clauses (i) through (iii)
above.
"Permitted Liens" means: (i) Liens for taxes, assessments or
governmental charges or claims that either (a) are not yet delinquent or (b) are
being contested in good faith by appropriate proceedings and as to which
appropriate reserves or
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other provisions have been made in accordance with GAAP; (ii) statutory Liens of
landlords and carriers, warehousemen, mechanics, suppliers, materialmen,
repairmen or other Liens imposed by law arising in the ordinary course of
business and with respect to amounts that either (a) are not yet delinquent or
(b) are being contested in good faith by appropriate proceedings and as to which
appropriate reserves or other provisions have been made in accordance with GAAP;
(iii) Liens incurred or deposits made in the ordinary course of business in
connection with workers' compensation, unemployment insurance and other types of
social security; (iv) Liens incurred or deposits made to secure the performance
of tenders, bids, leases, statutory obligations, surety and appeal bonds,
progress payments, government contracts and other obligations of like nature
(exclusive of obligations for the payment of borrowed money), in each case,
incurred in the ordinary course of business; (v) attachment or judgment Liens
not giving rise to a Default or an Event of Default and Liens created by
deposits of Cash or Financial Instruments to permit Statia to appeal court
judgments that are being contested in good faith by appropriate proceedings and
do not give rise to a Default or an Event of Default; (vi) easements,
rights-of-way, restrictions and other similar charges or encumbrances in respect
of Real Property not interfering with the ordinary conduct of the business of
Statia or any of its Subsidiaries and not materially affecting the value of the
property subject thereto; (vii) leases or subleases granted to others not
interfering with the ordinary conduct of the business of Statia or any of its
Subsidiaries and not materially affecting the value of the property subject
thereto; (viii) Liens on Accounts Receivable, Inventory and vessels (other than
the marine vessel known as the M/V Megan D. Gambarella) owned by Statia or its
Restricted Subsidiaries securing outstanding Indebtedness referred to in clause
(i) of Section 4.04 of this Indenture; (ix) Liens securing Acquired
Indebtedness, provided that such Liens (y) are not incurred in connection with,
or in contemplation of, the acquisition of the property or assets acquired and
(z) do not extend to or cover any property or assets of Statia or any of its
Restricted Subsidiaries other than the property or assets so acquired; (x) Liens
securing Refinancing Indebtedness to the extent incurred to repay, refinance or
refund Indebtedness that is secured by Liens and outstanding as of the date
hereof, provided that such Refinancing Indebtedness shall be secured solely by
the assets securing the outstanding Indebtedness being repaid, refinanced or
refunded; (xi) Liens on the Collateral securing Additional Secured Indebtedness
incurred in accordance with the provisions of this Indenture, provided that (y)
such Liens are pari passu with, and in no event senior to, the Liens on the
Collateral created under the Security Documents and (z) the representatives of
such Additional Secured Indebtedness shall have entered into an Additional
Lender Intercreditor Agreement; (xii) Liens under the Security Documents and
this Indenture;
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(xiii) Liens that secure Sale and Leaseback Transactions that are permitted to
be incurred under Sections 4.04 and 4.17 and relate only to Real Property that
does not constitute a portion of the Collateral and is not used in connection
with any manufacturing activity; (xiv) Liens securing Indebtedness between
Statia and its Wholly Owned Restricted Subsidiaries or among such Wholly Owned
Restricted Subsidiaries; and (xv) Liens existing on the date of this Indenture
to the extent and in the manner such Liens are in effect on the Issue Date.
"Permitted Related Acquisition" means the acquisition by Statia or
its Restricted Subsidiaries of any assets used or useful in the business
conducted by Statia or its Restricted Subsidiaries as such business is conducted
on the Issue Date.
"Person" means any individual, corporation, partnership, joint
venture, incorporated or unincorporated association, joint-stock company, trust,
unincorporated organization or government or other agency or political
subdivision thereof or other entity of any kind.
"Physical Securities" has the meaning ascribed to that term in
Section 2.01.
"Plan of Liquidation", with respect to any Person, means a plan that
provides for, contemplates or the effectuation of which is preceded or
accompanied by (whether or not substantially contemporaneously, in phases or
otherwise): (i) the sale, lease, conveyance or other disposition of all or
substantially all of the assets of such Person otherwise than as an entirety or
substantially as an entirety; and (ii) the distribution of all or substantially
all of the proceeds of such sale, lease, conveyance or other disposition and all
or substantially all of the remaining assets of such Person to Holders of
Capital Stock of such Person.
"Pledge Termination Notice" has the meaning ascribed to such term in
the Access Intercreditor Agreements.
"Pledged Shares" has the meaning ascribed to the terms "Pledged
Shares", "Additional Shares" and "Distributions" in the Securities Pledge
Agreements, collectively.
"Pledgor" means each of the Issuers and the Restricted Subsidiaries
party to any of the Security Documents executed on the date hereof and each
other party that becomes a pledgor, mortgagor, transferor or assignor under any
Security Document.
"Point Tupper Facility" means, collectively, the facilities located
in Point Tupper, Nova Scotia, Canada at which the Issuers and/or their
respective Restricted Subsidiaries conduct their business.
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"Principals" means Castle Harlan, Inc., members of Management and
their respective Affiliates (other than the Issuers and the Subsidiary
Guarantors).
"Prior Liens" has the meaning ascribed to that term in the
applicable Security Document.
"Private Placement Legend" means the legend initially set forth on
the Securities in the form set forth on Exhibit A.
"pro forma" means, with respect to any calculation made or required
to be made pursuant to the terms of this Indenture, a calculation in accordance
with Article 11 of Regulation S-X under the Securities Act as interpreted by the
Issuers' Boards of Directors in consultation with their independent certified
public accountants.
"Proceeds Offer" shall have the meaning ascribed to such term in
Section 4.15(c).
"Purchase Agreement" means the purchase agreement dated as of
November 22, 1996 by and among the Issuers and the Initial Purchaser.
"Purchase Date" shall have the meaning ascribed to such term in
Section 4.15(e).
"Qualified Institutional Buyer" or "QIB" shall have the meaning
specified in Rule 144A under the Securities Act.
"Real Property" means any interest in any real property or any
portion thereof whether owned in fee or leased or otherwise owned.
"Record Date" means each of the Record Dates specified in the
Securities; provided that if any such date is not a Business Day, the Record
Date shall be the first day immediately preceding such specified day that is a
Business Day.
"Redemption Date," when used with respect to any Security to be
redeemed, means the date fixed for such redemption pursuant to this Indenture
and the Securities.
"Redemption Price," when used with respect to any Security to be
redeemed, means the price fixed for such redemption, payable in immediately
available funds, pursuant to this Indenture and the Securities.
"Refinancing Indebtedness" means Indebtedness of Statia or a
Subsidiary of Statia issued in exchange for, or the proceeds from the issuance
and sale or disbursement of which are used substantially concurrently to repay,
redeem, refund, refinance,
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discharge or otherwise retire for value, in whole or in part (collectively,
"repay"), or constituting an amendment, modification or supplement to or a
deferral or renewal of (collectively, an "amendment"), any Indebtedness of
Statia or any of its Subsidiaries existing immediately after the original
issuance of the Securities or incurred pursuant to the provisions of Section
4.04 in a principal amount not in excess of the principal amount of the
Indebtedness so repaid or amended; provided that: (i) the Refinancing
Indebtedness is the obligation of the same Person, and is subordinated to the
Securities, if at all, to the same extent, as the Indebtedness being repaid or
amended; (ii) the Refinancing Indebtedness is scheduled to mature either (a) no
earlier than the Indebtedness being repaid or amended or (b) after the maturity
date of the Securities; (iii) the portion, if any, of the Refinancing
Indebtedness that is scheduled to mature on or prior to the maturity date of the
Securities has a Weighted Average Life to Maturity at the time such Refinancing
Indebtedness is incurred that is equal to or greater than the Weighted Average
Life to Maturity of the portion of the Indebtedness being repaid that is
scheduled to mature on or prior to the maturity date of the Securities; and (iv)
the Refinancing Indebtedness is secured only to the extent, if at all, and by
the assets, that the Indebtedness being repaid or amended is secured.
"Registered Exchange Offer" means the offer to exchange the Series B
Securities for all of the outstanding Series A Securities in accordance with the
Registration Rights Agreement.
"Registrar" has the meaning ascribed to that term in Section 2.03.
"Registration Rights Agreement" means the Registration Rights
Agreement dated as of November 27, 1996 by and among the Issuers, the Subsidiary
Guarantors and the Initial Purchaser.
"Regulation S" means Regulation S under the Securities Act.
"Reimbursement Payments" has the meaning ascribed to such term in
Section 4.23(b).
"Related Business Investment" means any Investment directly by
Statia or its Restricted Subsidiaries in any business that is closely related to
or complements the business of Statia or its Restricted Subsidiaries as such
business exists on the Issue Date.
"Related Party" with respect to any Principal means (i) any
controlling stockholder, 80% (or more) owned Subsidiary, or spouse or immediate
family member (in the case of an individual) of such Principal or (ii) any
trust, corporation, partnership or
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other entity, the beneficiaries, shareholders, partners, owners or Persons
beneficially holding an 80% or more controlling interest of which consist of
such Principal and/or such other Persons referred to in the immediately
preceding clause (i).
"Released Interests" has the meaning ascribed to such term in
Section 11.04.
"Responsible Officer" shall mean, when used with respect to the
Trustee, any officer in the Corporate Trust Department of the Trustee with
direct responsibility for the administration of this Indenture or to whom any
corporate trust matter is referred because of such officer's knowledge of and
familiarity with the particular subject.
"Restricted Debt Payment" means any purchase, redemption, defeasance
(including without limitation in substance or legal defeasance) or other
acquisition or retirement for value, directly or indirectly, by Statia or a
Subsidiary of Statia, prior to the scheduled maturity or prior to any scheduled
repayment of principal or sinking fund payment, as the case may be, in respect
of Indebtedness of Statia that is subordinate in right of payment to the
Securities.
"Restricted Investment", with respect to any Person, means any
Investment by such Person (other than a Permitted Investment) in any of its
Unrestricted Subsidiaries or in any Person that is not a Restricted Subsidiary.
"Restricted Payment" means with respect to any Person: (i) the
declaration of any dividend (other than a dividend declared by a Wholly Owned
Restricted Subsidiary to Holders of its Common Equity) or the making of any
other payment or distribution of Cash, securities or other property or assets in
respect of such Person's Capital Stock (except that a dividend payable solely in
Capital Stock (other than Disqualified Stock) of such Person shall not
constitute a Restricted Payment); (ii) any payment on account of the purchase,
redemption, retirement or other acquisition for value of such Person's Capital
Stock or any other payment or distribution made in respect thereof, either
directly or indirectly (other than a payment solely in Capital Stock that is not
Disqualified Stock); (iii) any Restricted Investment; or (iv) any Restricted
Debt Payment.
"Restricted Security" has the meaning set forth in Rule 144(a)(3)
under the Securities Act; provided that the Trustee shall be entitled to request
and conclusively rely upon an Opinion of Counsel with respect to whether any
Security is a Restricted Security.
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"Restricted Subsidiary" of any Person means each of the Subsidiaries
of such Person which, as of the determination date, is not an Unrestricted
Subsidiary of such Person.
"Rule 144A" means Rule 144A under the Securities Act.
"Sale and Leaseback Transaction" means, with respect to any Person,
an arrangement with any bank, insurance company or other lender or investor or
to which such lender or investor is a party, providing for the leasing by such
Person or any of its Subsidiaries of any property or asset of such Person or any
of its Subsidiaries which has been or is being sold or transferred by such
Person or such Subsidiary to such lender or investor or to any Person to whom
funds have been or are to be advanced by such lender or investor on the security
of such property or asset.
"Securities" means the Series A Securities and the Series B
Securities treated as a single class of securities, as amended or supplemented
from time to time in accordance with the terms hereof, that are issued pursuant
to this Indenture.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Pledge Agreement" means each pledge agreement
substantially in the form of Exhibit I-1, Exhibit I-2 or Exhibit J (to the
extent Exhibit J encumbers Pledged Shares) (as appropriate) hereto, as the same
may be amended, supplemented or otherwise modified from time to time in
accordance with the terms hereof and thereof.
"Security Agreement" means each security agreement (and each
debenture delivery agreement, if any, relating thereto) substantially in the
form of (i) Exhibit K-1 and Exhibit K-2 hereto in the case of assets located at
or used in connection with the Real Property located in the Netherlands Antilles
or in the case of other assets to the extent Netherlands Antilles law would be
applicable thereto or (ii) Exhibit H hereto (to the extent Exhibit H encumbers
assets other than Real Property) in the case of assets located at or used in
connection with the Real Property located in Canada or in the case of other
assets to the extent the laws of Canada would be applicable thereto or (iii)
Exhibit J hereto (to the extent Exhibit J encumbers assets other than Pledged
Shares) in the case of assets with respect to which the laws of the United
States would be applicable, as the same may be amended, supplemented or
otherwise modified from time to time in accordance with the terms hereof and
thereof.
"Security Documents" means, collectively, the Security Agreements,
the Mortgages, the Securities Pledge Agreements, the Intercreditor Agreements
and all security agreements, fiduciary
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transfers, fiduciary assignments, pledges, debentures, mortgages, deeds of
trust, collateral assignments or other instruments evidencing or creating any
security interest in favor of the Trustee in all or any portion of the
Collateral, in each case as amended, amended and restated, supplemented or
otherwise modified from time to time.
"Security Interests" means the Liens on the Collateral created by
the Security Documents in favor of the Trustee and the Holders of Securities and
for the benefit of the holders of Additional Secured Indebtedness, if any.
"Series A Securities" means the 11 3/4% First Mortgage Notes due
2003, Series A, of the Issuers issued pursuant to this Indenture and sold
pursuant to the Purchase Agreement.
"Series B Preferred Stock" means the 8% Series B Preferred Stock of
Parent issued on the Issue Date.
"Series B Securities" means the 11 3/4% First Mortgage Notes due
2003, Series B, of the Issuers to be issued in exchange for the Series A
Securities pursuant to the Registered Exchange Offer and the Registration Rights
Agreement.
"Series C Preferred Stock" means the 8% Series C Preferred Stock of
Parent issued on the Issue Date.
"Significant Subsidiary Guarantor" means any single Subsidiary
Guarantor or group of Subsidiary Guarantors that as of the date of the most
recently ended month for which an internal balance sheet is available would have
constituted a Significant Subsidiary of Statia.
"Significant Subsidiary" means any Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such Regulation is in effect on
the Issue Date, except all references to "10 percent" in such definition shall
be changed to "2 percent".
"SPM" means a single point mooring buoy connected to the shore by
undersea pipelines used for loading and unloading crude carriers.
"St. Eustatius Facility" means the facilities located on the island
of St. Eustatius in the Netherlands Antilles at which the Issuers and/or their
respective Restricted Subsidiaries conduct their business.
"Statia" means Statia Terminals International N.V., a Netherlands
Antilles corporation, until a successor Person
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replaces it pursuant to this Indenture, and thereafter means such successor.
"Statia Canada" means Statia Terminals Canada, Incorporated, a
corporation organized under the laws of Nova Scotia, until a successor Person
replaces it pursuant to this Indenture, and thereafter means such successor.
"Storage Contracts" shall have the meaning ascribed to such term in
the applicable Security Documents.
"Subordinated Management Notes" means any Indebtedness of Statia
issued to repurchase Capital Stock of Statia held by members of management of
Statia or any of its Restricted Subsidiaries the terms of which provide that (i)
no Cash payments (principal, interest or otherwise) will be due and payable
until November 15, 2004 and (ii) such Indebtedness is subordinated in full in
right of payment to the prior payment in full in cash of the Securities and any
Indebtedness issued in exchange for or to refinance all or a portion of the
Securities.
"Subsidiary" of any Person means (i) any corporation of which at
least a majority of the aggregate voting power of all classes of the Common
Equity is owned by such Person directly or through one or more other
Subsidiaries of such Person and (ii) any entity other than a corporation in
which such Person, directly or indirectly, owns at least a majority of the
Common Equity of such entity.
"Subsidiary Guarantors" means each of the parties named as such in
this Indenture and any other Subsidiary of the Issuers or a Subsidiary thereof
that executes a Subsidiary Guarantee in accordance with the provisions of this
Indenture, and their respective successors and assigns.
"Successor" has the meaning ascribed to that term in Section
5.01(a).
"Survey" means in the case of any parcel of Real Property (and all
improvements thereon) located in (i) the Netherlands Antilles, (a) a property
and contour plan (1) prepared by an engineer or other professional qualified to
prepare such plan, (2) dated as of a date not more than 12 months prior to the
time of delivery thereof (unless, if dated as of a date more than 12 months
prior to such time, such plan shall be accompanied by an Officers' Certificate
of the Issuer or Subsidiary Guarantor that owns such Real Property certifying
that there have been no material alterations to the Real Property shown on such
plan after the date certified by such engineer or other professional) and (3)
indicating in all material respects, the contours and boundaries of such Real
Property (and all buildings, structures and improvements located thereon),
together
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with (b) an Officers' Certificate of the Issuer or Subsidiary Guarantor that
owns such Real Property to the effect that (1) such plan is, to his/her
knowledge, a true and accurate depiction of all such Real Property other than
portions thereof which are not material to the conduct of the Issuers' and the
Subsidiary Guarantors' business and (2) such plan, to his/her knowledge,
accurately depicts all material buildings, structures and improvements on such
Real Property and (ii) Canada, (a) a plan (1) prepared by a surveyor licensed to
practice in the province in which such Real Property is located pursuant to the
Land Surveyors Act (Nova Scotia) as amended from time to time or any similar
legislation in any other province in Canada, (2) dated as of a date not more
than 12 months prior to the time of delivery thereof (unless, if dated as of a
date more than 12 months prior to such time, such plan shall be accompanied by a
Certificate of the Issuer or Subsidiary Guarantor that owns such Real Property
certifying that there have been no material alterations to the Real Property
shown on such plan after the date certified by such surveyor), (3) containing a
visual illustration of all material portion(s) of such Real Property (and the
location of all buildings, structures and improvements located on such material
portion(s) of such Real Property) and (4) accompanied by a certificate of such
surveyor to the effect that the Real Property depicted in such plan in all
material respects illustrates the legal description attached to such certificate
and (b) an Officers' Certificate of the appropriate Issuer or Subsidiary
Guarantor stating that (1) the area represented in such plan is, to his/her
knowledge, a true and accurate depiction of all such Real Property other than
portions thereof which are not material to the conduct of the Issuers' and the
Subsidiary Guarantors' business and (2) such plan, to his/her knowledge,
accurately depicts all material buildings, structures and improvements on such
Real Property.
"Taking" has the meaning ascribed to such term in Section 4.15(c).
"Taxes" means any tax, duty, levy, impost, assessment or other
governmental charge (including penalties, interest, expenses and any other
liabilities related thereto) levied, imposed or assessed by or on behalf of any
Taxing Authority.
"Taxing Authority" means either (i) the Government of the
Netherlands Antilles or any authority or agency therein or thereof having power
to tax or (ii) the Government of Canada, any province thereof or any other
government or any political subdivision or territory or possession of the
Government of Canada or any province thereof or any authority or agency therein
or thereof having power to tax.
"Taxing Jurisdiction" shall have the meaning ascribed to such term
in Section 4.22.
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"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. ss.ss.
77aaa-77bbbb), as amended, as in effect on the date of the execution of this
Indenture until such time as this Indenture is qualified under the TIA, and
thereafter as in effect on the date on which this Indenture is qualified under
the TIA, except as otherwise provided in Section 9.03; provided, however, that
in the event the Trust Indenture Act of 1939 is amended after either such date,
"TIA" means, to the extent required by any such amendment, the Trust Indenture
Act of 1939, as so amended.
"Trust Moneys" shall have the meaning ascribed to that term in
Section 12.01.
"Trustee" means the party named as such in this Indenture until a
successor replaces it in accordance with the provisions of this Indenture and
thereafter means such successor.
"Unrestricted Subsidiary" means each of the Subsidiaries of Statia
so designated by a Board Resolution of Statia and whose creditors have no direct
or indirect recourse (including without limitation recourse with respect to the
payment of principal of or interest on Indebtedness of such Subsidiary) to
Statia or a Restricted Subsidiary; provided, however, that the Board of
Directors of Statia will be prohibited from designating as an Unrestricted
Subsidiary any Subsidiary of Statia existing on the date of this Indenture. The
Board of Directors of Statia may designate an Unrestricted Subsidiary to be a
Restricted Subsidiary, provided that (i) any such redesignation shall be deemed
to be an incurrence by Statia and its Restricted Subsidiaries of the
Indebtedness (if any) of such redesignated Subsidiary for purposes of Section
4.04 as of the date of such redesignation and (ii) immediately after giving
effect to such redesignation and the incurrence of any such additional
Indebtedness, Statia and its Restricted Subsidiaries could incur $1.00 of
additional Indebtedness pursuant to Section 4.04. Any such designation or
redesignation by the Board of Directors shall be evidenced to the Trustee by the
filing with the Trustee of a certified copy of the resolution of Statia's Board
of Directors giving effect to such designation or redesignation and an Officers'
Certificate certifying that such designation or redesignation complied with the
foregoing conditions and setting forth the underlying calculations in such
certificate.
"U.S. Government Obligations" means U.S. Legal Tender or direct
non-callable obligations of, or non-callable obligations guaranteed by, the
United States of America for payment of which obligation or guarantee the full
faith and credit of the United States of America is pledged.
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"U.S. Legal Tender" means such coin or currency of the United States
of America as at the time of payment shall be legal tender for the payment of
public and private debts.
"U.S. Person" means (i) any individual resident in the United
States, (ii) any partnership or corporation organized or incorporated under the
laws of any state of the United States, (iii) any estate of which an executor or
administrator is a U.S. Person (other than an estate governed by foreign law and
of which at least one executor or administrator is a non-U.S. Person who has
sole or shared investment discretion with respect to its assets), (iv) any trust
of which any trustee is a U.S. Person (other than a trust of which at least one
trustee is a non-U.S. Person who has sole or shared investment discretion with
respect to its assets and no beneficiary of the trust (and no settlor of the
trust if revocable) is a U.S. Person), (v) any agency or branch of a foreign
entity located in the United States, (vi) any non-discretionary or similar
account (other than an estate or trust) held by a dealer or other fiduciary for
the benefit or account of a U.S. Person, (vii) any discretionary or similar
account (other than an estate or trust) held by a dealer or other fiduciary
organized, incorporated or (if an individual) resident in the U.S. (other than
such an account held for the benefit or account of a non-U.S. Person), (viii)
any partnership or corporation organized or incorporated under the laws of a
foreign jurisdiction and formed by a U.S. Person principally for the purpose of
investing in securities not registered under the Securities Act (unless it is
organized or incorporated, and owned, by accredited investors within the
meanings of rule 501(a) under the Securities Act who are not natural Persons,
estates or trusts); provided, however, that the term "U.S. Person" shall not
include (A) a branch or agency of a U.S. Person that is located and operating
outside the U.S. for valid business purposes as a locally regulated branch or
agency engaged in the banking or insurance business, (B) any employee benefit
plan established and administered in accordance with the law, customary
practices and documentation of a foreign country and (C) the international
organizations set forth in Section 902(o)(7) of Regulation S under the
Securities Act and any other similar international organizations, and their
agencies, Affiliates and pension plans.
"U.S. Physical Securities" has the meaning ascribed to that term in
Section 2.01.
"Valuation Date" has the meaning ascribed to that term in Section
11.04(i)(a).
"Voting Stock", with respect to any Person, means securities of any
class of Capital Stock of such Person entitling the Holders thereof (whether at
all times or only so long as no senior class of stock has voting power by reason
of any
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contingency) to vote in the election of members of the board of directors of
such Person.
"Weighted Average Life to Maturity", when applied to any
Indebtedness at any date, means the number of years obtained by dividing (i) the
sum of the products obtained by multiplying (a) the amount of each then
remaining installment, sinking fund, serial maturity or other required payment
of principal, including payment at final maturity, in respect thereof, by (b)
the number of years (calculated to the nearest one-twelfth) that will elapse
between such date and the making of such payment by (ii) the then outstanding
principal amount of such Indebtedness.
"Wholly-Owned Restricted Subsidiary" of any Person means a
Restricted Subsidiary, of which 100% of the Common Equity (except for directors'
qualifying shares or certain minority interests owned by other Persons solely
due to local law requirements that there be more than one stockholder, but which
interest is not in excess of what is required for such purpose) is owned
directly by such Person or through one or more Wholly-Owned Restricted
Subsidiaries of such Person.
SECTION 1.02. Incorporation by Reference of TIA.
Whenever this Indenture refers to a provision of the TIA, such
provision is incorporated by reference in, and made a part of, this Indenture.
The following TIA terms used in this Indenture have the following meanings:
"indenture securities" means the Securities.
"indenture security holder" means a Holder of a Security.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Issuers, any
Subsidiary Guarantor or any other obligor on the Securities.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by reference in the TIA to another statute or defined by Commission
rule and not otherwise defined herein have the meanings assigned to them
therein.
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SECTION 1.03. Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and words in the
plural include the singular;
(5) provisions apply to successive events and transactions; and
(6) "herein," "hereof" and other words of similar import refer to
this Indenture as a whole and not to any particular Article, Section or other
subdivision.
ARTICLE II.
THE SECURITIES
SECTION 2.01. Form and Dating.
The Series A Securities and the Trustee's certificate of
authentication thereof shall be substantially in the form of Exhibit A annexed
hereto, which is hereby incorporated in and expressly made a part of this
Indenture. The Series B Securities and the Trustee's certificate of
authentication thereof shall be substantially in the form of Exhibit B annexed
hereto, which is hereby incorporated in and expressly made a part of this
Indenture. The Securities may have notations, legends or endorsements (including
notations relating to the Guarantees) required by law, stock exchange rule or
usage. The Issuers and the Trustee shall approve any notation, legend or
endorsement (including notations relating to the Guarantees) on the Securities.
Each Security shall be dated the date of its authentication.
Securities offered and sold in reliance on Rule 144A and to
Institutional Accredited Investors shall be issued initially in the form of one
or more permanent Global Securities in registered form, substantially in the
form set forth in Exhibit A, deposited with the Trustee, as custodian for the
Depository, and shall bear the legend set forth on Exhibit C. The aggregate
principal amount of any Global Security may from time to time be increased or
decreased by adjustments made on the
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records of the Trustee, as custodian for the Depository, as hereinafter
provided.
Securities offered and sold in offshore transactions in reliance on
Regulation S shall be issued in the form of certificated Securities in
registered form set forth in Exhibit A (the "Offshore Physical Securities").
Securities offered and sold in reliance on any other exemption from registration
under the Securities Act other than as described in the preceding paragraph
shall be issued, and Securities offered and sold in reliance on Rule 144A may be
issued, in the form of certificated Securities in registered form in
substantially the form set forth in Exhibit A (the "U.S. Physical Securities").
The Offshore Physical Securities and the U.S. Physical Securities are sometimes
collectively herein referred to as the "Physical Securities."
SECTION 2.02. Execution and Authentication.
Two Officers, or an Officer and an Assistant Secretary, shall sign,
or one Officer shall sign and one Officer or an Assistant Secretary (each of
whom shall, in each case, have been duly authorized by all requisite corporate
actions) shall attest to, the Securities for each of the Issuers by manual or
facsimile signature.
If an Officer or Assistant Secretary whose signature is on a
Security was an Officer or Assistant Secretary at the time of such execution but
no longer holds that office at the time the Trustee authenticates the Security,
the Security shall be valid nevertheless. Each Subsidiary Guarantor shall
execute the Guarantee in the manner set forth in Section 10.06.
A Security shall not be valid until an authorized signatory of the
Trustee manually signs the certificate of authentication on the Security. The
signature shall be conclusive evidence that the Security has been authenticated
under this Indenture.
The Trustee shall authenticate (i) Series A Securities for original
issue in the aggregate principal amount not to exceed $135,000,000 and (ii)
Series B Securities from time to time for issue only in exchange for a like
principal amount of Series A Securities, in each case upon a written order of
each of the Issuers in the form of an Officers' Certificate. The Officers'
Certificate shall specify the amount of Securities to be authenticated, the
series of Securities and the date on which the Securities are to be
authenticated. The aggregate principal amount of Securities outstanding at any
time may not exceed $135,000,000, except as provided in Section 2.07. Upon
receipt of a written order of each of the Issuers in the form of an Officers'
Certificate, the Trustee shall authenticate Securities
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in substitution for Securities originally issued to reflect any name change of
the Issuers.
The Trustee may appoint an authenticating agent reasonably
acceptable to the Issuers to authenticate Securities. Unless otherwise provided
in the appointment, an authenticating agent may authenticate Securities whenever
the Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent has the
same rights as the Trustee to deal with the Issuers and Affiliates of the
Issuers.
The Securities shall be issuable only in registered form without
coupons in denominations of $1,000 and any integral multiple thereof, except as
other denominations may be necessary as a result of a pro rata redemption or
purchase of Securities required by the provisions of this Indenture and the
Securities.
The Issuers, any Subsidiary Guarantor, the Trustee and any agent of
the Issuers, any Subsidiary Guarantor or the Trustee may treat the Person in
whose name any Security is registered as the owner of such Security for the
purpose of receiving payment of principal of and (subject to the provisions of
this Indenture and the Securities with respect to record dates) interest on such
Security and for all other purposes whatsoever, whether or not such Security is
overdue, and neither the Issuers, any Subsidiary Guarantor, the Trustee nor any
agent of the Issuers, any Subsidiary Guarantor or the Trustee shall be affected
by notice to the contrary.
SECTION 2.03. Registrar and Paying Agent.
The Issuers shall maintain an office or agency in the Borough of
Manhattan, The City of New York, where (a) Securities may be presented or
surrendered for registration of transfer or for exchange ("Registrar"), (b)
Securities may be presented or surrendered for payment ("Paying Agent") and (c)
notices and demands in respect of the Securities and this Indenture may be
served. The Registrar shall keep a register of the Securities and of their
transfer and exchange. The Issuers, upon written notice to the Trustee, may have
one or more co-Registrars reasonably acceptable to the Trustee. The Issuers
shall appoint the Trustee as Registrar and Paying Agent until such time as the
Trustee has resigned or a successor has been appointed. Notwithstanding anything
to the contrary in this Indenture, the Paying Agent shall be, at all times, the
Trustee.
To the extent the Issuers make such payments directly to the Holders
of the Securities, the Issuers shall simultaneously notify the Trustee thereof
in writing.
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The Paying Agent shall comply with all applicable backup withholding
tax and information reporting requirements under the U.S. Internal Revenue Code
of 1986, as amended, and the Treasury regulations issued thereunder in respect
of any payment on, or in respect of, a Note or under a Guarantee.
SECTION 2.04. Paying Agent To Hold Money in Trust.
Each Paying Agent shall hold in trust for the benefit of the Holders
or the Trustee all money held by the Paying Agent for the payment of principal
of or interest on the Securities (whether such money has been paid to it by the
Issuers or any other obligor on the Securities), and the Issuers and the Paying
Agent shall notify the Trustee of any default by the Issuers (or any other
obligor on the Securities) in making any such payment. Money held in trust by
the Paying Agent need not be segregated except as required by law and in no
event shall the Paying Agent be liable for any interest on any money received by
it hereunder. The Issuers at any time may require the Paying Agent to pay all
money held by it to the Trustee and account for any funds disbursed and the
Trustee may at any time during the continuance of any Event of Default, upon
written request to the Paying Agent, require such Paying Agent to pay forthwith
all money so held by it to the Trustee and to account for any funds disbursed.
Upon making any payment, the Paying Agent shall have no further liability for
the money delivered to the Trustee.
SECTION 2.05. Securityholder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Holders of the Securities. If the Trustee is not the Registrar, the Issuers
shall furnish to the Trustee before each Record Date and at such other times as
the Trustee may request in writing a list as of such date and in such form as
the Trustee may reasonably require of the names and addresses of Holders of the
Securities, which list may be conclusively relied upon by the Trustee.
SECTION 2.06. Transfer and Exchange.
Subject to the provisions of Sections 2.15 and 2.16, when Securities
are presented to the Registrar or a co-Registrar with a request to register the
transfer of such Securities or to exchange such Securities for an equal
principal amount of Securities of other authorized denominations of the same
series, the Registrar or co-Registrar shall register the transfer or make the
exchange as requested if its requirements for such transaction are met;
provided, however, that the Securities surrendered for registration of transfer
or exchange shall be duly endorsed or accompanied by a written instrument of
transfer in form satisfactory to the Issuers and the Registrar or co-
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Registrar, duly executed by the Holder thereof or his attorney duly authorized
in writing. To permit registrations of transfers and exchanges, the Issuers
shall execute and the Trustee shall authenticate Securities at the Registrar's
or co-Registrar's request. No service charge shall be made for any registration
of transfer or exchange, but the Issuers may require payment of a sum sufficient
to cover any transfer tax or similar governmental charge payable in connection
therewith (other than any such transfer taxes or other governmental charge
payable upon exchanges (without transfer to another Person) pursuant to Section
2.02, 2.10, 3.06, 4.15, 6.14 or 9.05, in which event the Issuers shall be
responsible for payment of any such taxes or charges). The Registrar or
co-Registrar shall not be required to register the transfer of or exchange of
any Security (i) during a period beginning at the opening of business 15 days
before the mailing of a notice of redemption of Securities and ending at the
close of business on the day of such mailing, (ii) selected for redemption in
whole or in part pursuant to Article Three, except the unredeemed portion of any
Security being redeemed in part and (iii) between a Record Date and the next
succeeding Interest Payment Date.
Any Holder of a Global Security shall, by acceptance of such Global
Security, agree that transfers of beneficial interests in such Global Security
may be effected only through a book-entry system maintained by the Depository
(or its agent), and that ownership of a beneficial interest in a Global Security
shall be required to be reflected in a book-entry system.
SECTION 2.07. Replacement Securities.
If a mutilated Security is surrendered to the Trustee or if the
Holder of a Security claims that the Security has been lost, destroyed or
wrongfully taken, the Issuers shall issue and the Trustee shall authenticate
upon written notice from the Issuers a replacement Security if the Trustee's
requirements are met. If required by the Trustee or the Issuers, such Holder
must provide an indemnity bond or other indemnity, sufficient in the judgment of
both the Issuers and the Trustee, to protect the Issuers and the Trustee from
any loss which they may suffer if a Security is replaced. The Issuers may charge
such Holder for their reasonable, out-of-pocket expenses in replacing a
Security, including reasonable fees and expenses of counsel.
Every replacement Security is an additional obligation of the
Issuers and is entitled to the benefit of this Indenture.
SECTION 2.08. Outstanding Securities.
Securities outstanding at any time are all the Securities that have
been authenticated by the Trustee except those cancelled by it, those delivered
to it for cancellation and
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those described in this Section as not outstanding. Subject to Section 2.09, a
Security does not cease to be outstanding because either of the Issuers or any
of their Affiliates holds the Security.
If a Security is replaced pursuant to Section 2.07 (other than a
mutilated Security surrendered for replacement), it ceases to be outstanding
unless the Trustee receives proof satisfactory to it that the replaced Security
is held by a bona fide purchaser. A mutilated Security ceases to be outstanding
upon surrender of such Security and replacement thereof pursuant to Section
2.07.
If on a Redemption Date or the Final Maturity Date the Paying Agent
holds U.S. Legal Tender sufficient to pay all of the principal and interest due
on the Securities payable on that date, then on and after that date such
Securities cease to be outstanding and interest on them ceases to accrue.
SECTION 2.09. Treasury Securities.
In determining whether the Holders of the required principal amount
of Securities have concurred in any direction, waiver or consent, Securities
owned by either of the Issuers, any of the Subsidiary Guarantors or any of their
respective Affiliates shall be disregarded, except that, for the purposes of
determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Securities that a Responsible Officer of the
Trustee actually knows are so owned shall be disregarded.
The Trustee may require an Officers' Certificate listing Securities
owned by either of the Issuers, a Subsidiary Guarantor or any of their
respective Affiliates.
SECTION 2.10 Temporary Securities.
Until definitive Securities are ready for delivery, the Issuers may
prepare and the Trustee shall authenticate temporary Securities upon receipt of
a written order of the Issuers in the form of an Officers' Certificate. The
Officers' Certificate shall specify the amount of temporary Securities to be
authenticated and the date on which the temporary Securities are to be
authenticated. Temporary Securities shall be substantially in the form of
definitive Securities but may have variations that the Issuers consider
appropriate for temporary Securities. Without unreasonable delay, the Issuers
shall prepare and the Trustee shall authenticate upon receipt of a written order
of the Issuers pursuant to Section 2.02 definitive Securities in exchange for
temporary Securities.
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SECTION 2.11 Cancellation.
The Issuers shall deliver to the Trustee for cancellation any
Securities that the Issuers may have acquired in any matter whatever. The
Registrar and the Paying Agent shall forward to the Trustee any Securities
surrendered to them for registration of transfer, exchange or payment. The
Trustee, or at the direction of the Trustee, the Registrar or the Paying Agent,
and no one else, shall cancel and, unless otherwise directed in writing by the
Issuers, shall dispose of all Securities surrendered for registration of
transfer, exchange, payment or cancellation. Subject to Section 2.07, the
Issuers may not issue new Securities to replace Securities that they had paid or
delivered to the Trustee for cancellation. If any Subsidiary Guarantor shall
acquire any of the Securities, such acquisition shall not operate as a
redemption or satisfaction of the Indebtedness represented by such Securities
unless and until the same are surrendered to the Trustee for cancellation
pursuant to this Section 2.11.
SECTION 2.12 Defaulted Interest.
If the Issuers default in a payment of interest on the Securities,
they shall pay interest on overdue principal and on overdue installments of
interest (without grace periods) on a subsequent special record date, which date
shall be at least ten Business Days prior to the payment date, at the rate of 2%
per annum in excess of the rate shown on the Securities. The Issuers shall fix
or cause to be fixed any such special record date and payment date. The Issuers
shall notify the Trustee in writing of the amount of defaulted interest to be
paid on each Security and the date of the proposed payment, and at the same time
the Issuers shall deposit with the Trustee an amount of money equal to the
aggregate amount proposed to be paid in respect of such defaulted interest or
shall make arrangements satisfactory to the Trustee for such deposit prior to
the date of the proposed payment, such money when deposited to be held in trust
for the benefit of the Persons entitled to such defaulted interest. At least 15
days before any such special record date, the Issuers shall mail or cause to be
mailed to each Holder a notice that states the special record date, the payment
date and the amount of defaulted interest to be paid.
SECTION 2.13 CUSIP Number.
The Issuers in issuing the Securities will use a "CUSIP" number, and
the Trustee shall use the CUSIP number in notices of redemption or exchange as a
convenience to Holders of the Securities; provided that any such notice may
state that no representation is made as to the correctness or accuracy of the
CUSIP number printed in the notice or on the Securities, and that
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reliance may be placed only on the other identification numbers printed on the
Securities.
SECTION 2.14 Deposit of Moneys.
Prior to 11:00 a.m. New York City time on each Interest Payment Date
and the Final Maturity Date, the Issuers shall have either delivered by wire
transfer or check such interest or principal and interest, as the case may be,
to Holders of the Securities at such Holders' registered addresses or deposited
with the Paying Agent in immediately available funds money sufficient to make
cash payments due on such Interest Payment Date or the Final Maturity Date, as
the case may be, in a timely manner which permits the Paying Agent to remit
payment to the Holders of the Securities on such Interest Payment Date or the
Final Maturity Date, as the case may be.
SECTION 2.15 Book-Entry Provisions for Global Securities.
(a) The Global Securities initially shall (i) be registered in the
name of the Depository or the nominee of such Depository, (ii) be delivered to
the Trustee as custodian for such Depository and (iii) bear legends as set forth
in Exhibit C.
Members of, or participants in, the Depository ("Participants")
shall have no rights under this Indenture with respect to any Global Security
held on their behalf by the Depository, or the Trustee as its custodian, or
under the Global Security, and the Depository may be treated by the Issuers, the
Trustee and any agent of the Issuers or the Trustee as the absolute owner of the
Global Security for all purposes whatsoever. Notwithstanding the foregoing,
nothing herein shall prevent the Issuers, the Trustee or any agent of the
Issuers or the Trustee from giving effect to any written certification, proxy or
other authorization furnished by the Depository or impair, as between the
Depository and Participants, the operation of customary practices governing the
exercise of the rights of a Holder of any Security.
(b) Transfers of Global Securities shall be limited to transfers in
whole, but not in part, to the Depository, its successors or their respective
nominees. Interests of beneficial owners in the Global Securities may be
transferred or exchanged for Physical Securities in accordance with the rules
and procedures of the Depository and the provisions of Section 2.16. In
addition, Physical Securities shall be delivered to all beneficial owners in
exchange for their beneficial interests in Global Securities if (i) the
Depository notifies the Issuers that it is unwilling or unable to continue as
Depository for any Global Security and a successor depository is not appointed
by the Issuers within 90 days of such notice or (ii) an Event of Default has
occurred and is continuing and the Registrar has
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received a request from the Depository to issue Physical Securities.
(c) In connection with the transfer of Global Securities as an
entirety to beneficial owners pursuant to paragraph (b) of this Section 2.15,
the Global Securities shall be deemed to be surrendered to the Trustee for
cancellation, and the Issuers shall execute, and the Trustee shall upon written
instructions from the Issuers authenticate and deliver, to each beneficial owner
identified by the Depository in exchange for its beneficial interest in the
Global Securities, an equal aggregate principal amount of Physical Securities of
authorized denominations.
(d) Any Physical Security constituting a Restricted Security
delivered in exchange for an interest in a Global Security pursuant to paragraph
(b) or (c) of this Section 2.15 shall, except as otherwise provided by Section
2.16, bear the Private Placement Legend.
(e) The Holder of any Global Security may grant proxies and
otherwise authorize any Person, including Participants and Persons that may hold
interests through Participants, to take any action which a Holder of Securities
is entitled to take under this Indenture or the Securities.
SECTION 2.16 Registration of Transfers and Exchanges.
(a) Transfer and Exchange of Physical Securities. When Physical
Securities are presented to the Registrar with a request:
(i) to register the transfer of the Physical Securities; or
(ii) to exchange such Physical Securities for an equal number of
Physical Securities of other authorized denominations,
the Registrar shall register the transfer or make the exchange as requested if
the requirements under this Indenture as set forth in this Section 2.16 for such
transactions are met; provided, however, that the Physical Securities presented
or surrendered for registration of transfer or exchange:
(I) shall be duly endorsed or accompanied by a written instrument of
transfer in form satisfactory to the Registrar or co-Registrar, duly
executed by the Holder thereof or his attorney duly authorized in writing;
and
(II) in the case of Physical Securities the offer and sale of which
have not been registered under the Securities
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Act, such Physical Securities shall be accompanied by the following
additional information and documents, as applicable:
(A) if such Physical Security is being delivered to the
Registrar by the Holder thereof for registration in the name of such
Holder, without transfer, a certification from such Holder to that
effect (in substantially the form of Exhibit D hereto); or
(B) if such Physical Security is being transferred to a
Qualified Institutional Buyer in accordance with Rule 144A under the
Securities Act, a certification to that effect (in substantially the
form of Exhibit D hereto); or
(C) if such Physical Security is being transferred to an
Institutional Accredited Investor, a certification to that effect
(in substantially the form of Exhibit D hereto) and a Transferee
Certificate for Institutional Accredited Investors in substantially
the form of Exhibit E hereto; or
(D) if such Physical Security is being transferred in reliance
on Regulation S, a certification to that effect (in substantially
the form of Exhibit D hereto) and a Transferee Certificate for
Regulation S Transfers in substantially the form of Exhibit F hereto
and an Opinion of Counsel reasonably satisfactory to the Issuers and
addressed to the Issuers and the Registrar to the effect that such
transfer is in compliance with the Securities Act; or
(E) if such Physical Security is being transferred in reliance
on Rule 144 under the Securities Act, a certification to that effect
(in substantially the form of Exhibit D hereto) and an Opinion of
Counsel reasonably satisfactory to the Issuers and addressed to the
Issuers and the Registrar to the effect that such transfer is in
compliance with the Securities Act; or
(F) if such Physical Security is being transferred in reliance
on another exemption from the registration requirements of the
Securities Act, a certification to that effect (in substantially the
form of Exhibit D hereto) and an Opinion of Counsel reasonably
satisfactory to the Issuers and addressed to the Issuers and the
Registrar to the effect that such transfer is in compliance with the
Securities Act.
(b) Restrictions on Exchange of a Physical Security for a Beneficial
Interest in a Global Security. A Physical
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Security may not be exchanged for a beneficial interest in a Global Security
except upon satisfaction of the requirements set forth below. Upon receipt by
the Registrar of a Physical Security, duly endorsed or accompanied by
appropriate instruments of transfer, in form satisfactory to the Registrar,
together with:
(A) a certification, in substantially the form of Exhibit D
hereto, that such Physical Security is being transferred to a
Qualified Institutional Buyer or an Institutional Accredited
Investor; and
(B) written instructions directing the Registrar to make, or
to direct the Depository to make, an endorsement on the Global
Security to reflect an increase in the aggregate amount of the
Securities represented by the Global Security,
then the Registrar shall cancel such Physical Security and cause, or direct the
Depository to cause, in accordance with the standing instructions and procedures
existing between the Depository and the Registrar, the number of Securities
represented by the Global Security to be increased accordingly. If no Global
Security is then outstanding, the Issuers shall issue and the Trustee shall upon
written instructions from the Issuers authenticate a new Global Security in the
appropriate amount.
(c) Transfer and Exchange of Global Securities. The transfer and
exchange of Global Securities or beneficial interests therein shall be effected
through the Depository, in accordance with this Indenture (including the
restrictions on transfer set forth herein) and the procedures of the Depository
therefor.
(d) Transfer of a Beneficial Interest in a Global Security for a
Physical Security.
(i) Any Person having a beneficial interest in a Global Security
may upon request exchange such beneficial interest for a Physical
Security. Upon receipt by the Registrar of written instructions or such
other form of instructions as is customary for the Depository from the
Depository or its nominee on behalf of any Person having a beneficial
interest in a Global Security and upon receipt by the Trustee of a written
order or such other form of instructions as is customary for the
Depository or the Person designated by the Depository as having such a
beneficial interest containing registration instructions and, in the case
of any such registration of transfer or exchange of a beneficial interest
in a Global Security the offer and sale of which have not been registered
under the
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Securities Act, the following additional information and documents:
(A) if such beneficial interest is being transferred to the
Person designated by the Depository as being the beneficial owner, a
certification from such Person to that effect (in substantially the
form of Exhibit D hereto); or
(B) if such beneficial interest is being transferred to a
Qualified Institutional Buyer in accordance with Rule 144A under the
Securities Act, a certification to that effect (in substantially the
form of Exhibit D hereto); or
(C) if such beneficial interest is being transferred to an
Institutional Accredited Investor, a certification to that effect
(in substantially the form of Exhibit D hereto) and a Transferee
Certificate for Institutional Accredited Investors in substantially
the form of Exhibit E hereto; or
(D) if such beneficial interest is being transferred in
reliance on Regulation S, a certification to that effect (in
substantially the form of Exhibit D hereto) and a Transferee
Certificate for Regulation S Transfers in substantially the form of
Exhibit F hereto and an Opinion of Counsel reasonably satisfactory
to the Issuers and addressed to the Issuers and the Registrar to the
effect that such transfer is in compliance with the Securities Act;
or
(E) if such beneficial interest is being transferred in
reliance on Rule 144 under the Securities Act, a certification to
that effect (in substantially the form of Exhibit D hereto) and an
Opinion of Counsel reasonably satisfactory to the Issuers and
addressed to the Issuers and the Registrar to the effect that such
transfer is in compliance with the Securities Act; or
(F) if such beneficial interest is being transferred in
reliance on another exemption from the registration requirements of
the Securities Act, a certification to that effect (in substantially
the form of Exhibit D hereto) and an Opinion of Counsel reasonably
satisfactory to the Issuers and addressed to the Issuers and the
Registrar to the effect that such transfer is in compliance with the
Securities Act,
then the Registrar will cause, in accordance with the standing instructions and
procedures existing between the Depository and
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the Registrar, the aggregate amount of the Global Security to be reduced and,
following such reduction, the Issuers will execute and, upon receipt of an
authentication order in the form of an Officers' Certificate, the Trustee will
authenticate and deliver to the transferee a Physical Security.
(ii) Securities issued in exchange for a beneficial interest in a
Global Security pursuant to this Section 2.16(d) shall be registered in
such names and in such authorized denominations as the Depository,
pursuant to instructions from its direct or indirect participants or
otherwise, shall instruct the Registrar in writing. The Registrar shall
deliver such Physical Securities to the Persons in whose names such
Physical Securities are so registered.
(e) Restrictions on Transfer and Exchange of Global Securities.
Notwithstanding any other provisions of this Indenture, a Global Security may
not be transferred as a whole except by the Depository to a nominee of the
Depository or by a nominee of the Depository to the Depository or another
nominee of the Depository or by the Depository or any such nominee to a
successor Depository or a nominee of such successor Depository.
(f) Private Placement Legend. Upon the registration of transfer,
exchange or replacement of Securities not bearing the Private Placement Legend,
the Registrar shall deliver Securities that do not bear the Private Placement
Legend. Upon the registration of transfer, exchange or replacement of Securities
bearing the Private Placement Legend, the Registrar shall deliver only
Securities that bear the Private Placement Legend unless, and the Trustee is
hereby authorized to deliver Securities without the Private Placement Legend if,
(i) there is delivered to the Trustee an Opinion of Counsel reasonably
satisfactory to the Issuers and the Trustee to the effect that neither such
legend nor the related restrictions on transfer are required in order to
maintain compliance with the provisions of the Securities Act or (ii) such
Security has been sold pursuant to an effective registration statement under the
Securities Act.
(g) General. By its acceptance of any Security bearing the Private
Placement Legend, each Holder of such a Security acknowledges the restrictions
on transfer of such Security set forth in this Indenture and in the Private
Placement Legend and agrees that it will transfer such Security only as provided
in this Indenture.
The Registrar shall retain copies of all letters, notices and other
written communications received pursuant to Section 2.15 or this Section 2.16 in
accordance with its usual procedures. The Issuers shall have the right to
inspect and make copies of all such letters, notices or other written
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communications at any reasonable time upon the giving of reasonable written
notice to the Registrar.
SECTION 2.17 Designation.
The Indebtedness evidenced by the Securities and the Guarantees is
hereby irrevocably designated as "senior indebtedness" or such other term
denoting seniority for the purposes of any future Indebtedness of the Issuers
and the Subsidiary Guarantors which the Issuers or any Subsidiary Guarantor
makes subordinate to any senior indebtedness or such other term denoting
seniority.
ARTICLE THREE
REDEMPTION
SECTION 3.01. Notices to Trustee.
If the Issuers elect to redeem Securities pursuant to Paragraph 5 of
the Securities, they shall notify the Trustee in writing of the Redemption Date,
the Redemption Price and the principal amount of Securities to be redeemed. The
Issuers shall give notice of redemption to the Trustee at least 45 days but not
more than 60 days before the Redemption Date (unless a shorter notice shall be
agreed to by the Trustee in writing), together with an Officers' Certificate
stating that such redemption will comply with the conditions contained herein.
SECTION 3.02. Selection of Securities to Be Redeemed.
If fewer than all of the Securities are to be redeemed, the Trustee
shall select the Securities to be redeemed in compliance with the requirements
of the principal national securities exchange, if any, on which the Securities
are listed or, if the Securities are not listed on a national securities
exchange, on a pro rata basis, by lot or by such method as the Trustee shall
deem fair and appropriate. If the Securities are listed on any national
securities exchange, the Issuers shall notify the Trustee in writing of the
requirements of such exchange in respect of any redemption. The Trustee shall
make the selection from the Securities outstanding and not previously called for
redemption and shall promptly notify the Issuers in writing of the Securities
selected for redemption and, in the case of any Security selected for partial
redemption, the principal amount thereof to be redeemed. Securities in
denominations equal to or less than $1,000 may be redeemed only in whole. The
Trustee may select for redemption portions (equal to $1,000 or any integral
multiple thereof) of the principal of Securities that have denominations larger
than $1,000.
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Provisions of this Indenture that apply to Securities called for redemption also
apply to portions of Securities called for redemption.
SECTION 3.03. Notice of Redemption.
At least 30 days but not more than 60 days before a Redemption Date,
the Issuers shall mail or cause to be mailed a notice of redemption by first
class mail, postage prepaid, to each Holder whose Securities are to be redeemed.
At the Issuers' written request, the Trustee shall give the notice of redemption
in the name of the Issuers and at the expense of the Issuers. Each notice for
redemption shall identify the Securities to be redeemed and shall state:
(1) the Redemption Date;
(2) the Redemption Price and the amount of accrued interest, if any,
to be paid;
(3) the name and address of the Paying Agent;
(4) that Securities called for redemption must be surrendered to the
Paying Agent to collect the Redemption Price plus accrued interest, if
any;
(5) that, unless the Issuers default in making the redemption
payment, interest on Securities called for redemption ceases to accrue on
and after the Redemption Date, and the only remaining right of the Holders
of such Securities is to receive payment of the Redemption Price upon
surrender to the Paying Agent of the Securities redeemed;
(6) if any Security is being redeemed in part, the portion of the
principal amount of such Security to be redeemed and that, after the
Redemption Date, and upon surrender of such Security, a new Security or
Securities in aggregate principal amount equal to the unredeemed portion
thereof will be issued;
(7) if fewer than all the Securities are to be redeemed, the
identification of the particular Securities (or portion thereof) to be
redeemed, as well as the aggregate principal amount of Securities to be
redeemed and the aggregate principal amount of Securities to be
outstanding after such partial redemption; and
(8) the Paragraph of the Securities pursuant to which the Securities
are to be redeemed.
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SECTION 3.04. Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with Section 3.03,
Securities called for redemption become due and payable on the Redemption Date
and at the Redemption Price plus accrued interest, if any. Upon surrender to the
Paying Agent, such Securities called for redemption shall be paid at the
Redemption Price (plus accrued and unpaid interest, if any, thereon to the
Redemption Date), but installments of interest, the maturity of which is on or
prior to the Redemption Date, shall be payable to Holders of record at the close
of business on the relevant Record Dates.
SECTION 3.05. Deposit of Redemption Price; Unclaimed Moneys.
On or before the Redemption Date, the Issuers shall deposit with the
Paying Agent U.S. Legal Tender sufficient to pay the Redemption Price plus
accrued interest, if any, of all Securities to be redeemed on that date.
If the Issuers comply with the preceding paragraph, then, unless the
Issuers default in the payment of such Redemption Price plus accrued interest,
if any, interest on the Securities to be redeemed will cease to accrue on and
after the applicable Redemption Date, whether or not such Securities are
presented for payment.
If money on deposit with the Trustee or the Paying Agent, as the
case may be, for the payment of principal or interest remains unclaimed for two
years, the Trustee and the Paying Agent will, subject to any applicable law, pay
the money to the Issuers at their request. Thereafter, Holders of Securities
entitled to the money must look to the Issuers and the Subsidiary Guarantors for
payment unless an abandoned property law designates another Person, and all
liability of the Trustee and the Paying Agent with respect to such money shall
cease. All money earned on funds held in trust by the Trustee or the Paying
Agent shall be remitted to the Issuers.
SECTION 3.06. Securities Redeemed in Part.
Upon surrender of a Security that is to be redeemed in part, the
Issuers shall issue and the Trustee shall authenticate for the Holder a new
Security or Securities equal in principal amount to the unredeemed portion of
the Security surrendered.
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ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Securities.
The Issuers shall pay the principal of and interest on the
Securities in the manner provided in the Securities. An installment of principal
of or interest on the Securities shall be considered paid on the date it is due
if the Trustee or Paying Agent holds on that date U.S. Legal Tender designated
for and sufficient to pay the installment.
SECTION 4.02. Maintenance of Office or Agency.
The Issuers shall maintain in the Borough of Manhattan, The City of
New York, the office or agency required under Section 2.03. The Issuers shall
give prompt written notice to the Trustee of the location, and any change in the
location, of such office or agency. If at any time the Issuers shall fail to
maintain any such required office or agency or shall fail to furnish the Trustee
with the address thereof, such presentations, surrenders, notices and demands
may be made or served at the address of the Trustee set forth in Section 13.02.
The Issuers hereby initially designate the corporate trust office of the Trustee
as its office or agency in the Borough of Manhattan, The City of New York.
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SECTION 4.03. Limitation on Restricted Payments.
Statia shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, make any Restricted Payment if at the
time of such Restricted Payment:
(i) a Default or Event of Default shall have occurred and be
continuing or shall occur as a consequence thereof;
(ii) Statia would be unable to incur an additional $1.00 of
Indebtedness pursuant to the Consolidated Fixed Charge Coverage Ratio test
set forth in Section 4.04(a); or
(iii) the amount of such Restricted Payment, when added to the
aggregate amount of all Restricted Payments made after the date of this
Indenture, exceeds the sum of (A) 50% of Statia's Consolidated Net Income
(taken as one accounting period) from the Issue Date to the end of
Statia's most recently ended fiscal quarter for which internal financial
statements are available at the time of such Restricted Payment (or, if
such aggregate Consolidated Net Income shall be a deficit, minus 100% of
such aggregate deficit) plus (B) the net Cash proceeds from the issuance
and sale (other than to a Subsidiary of Statia) after the date of this
Indenture of Statia's Capital Stock that is not Disqualified Stock, plus
(C) to the extent that any Restricted Investment that was made after the
Issue Date is sold for Cash or otherwise liquidated or repaid for Cash,
the lesser of (x) the Cash return of capital with respect to such
Restricted Investment (less the cost of disposition, if any) and (y) the
initial amount of such Restricted Investment.
The foregoing provisions (ii) and (iii) will not prohibit: (1) the
payment of any dividend within 60 days after the date of declaration thereof, if
at said date of declaration such payment would have complied with the provisions
of this Indenture; (2) the redemption, repurchase, retirement or other
acquisition of any Capital Stock of Statia in exchange for, or out of the
proceeds of, the substantially concurrent sale (other than to a Subsidiary of
Statia) of other Capital Stock of Statia (other than any Disqualified Stock);
(3) the defeasance, redemption, repurchase or other retirement of subordinated
Indebtedness in exchange for, or out of the proceeds of, the substantially
concurrent issue and sale of (I) subordinated Indebtedness of Statia so long as
such subordinated Indebtedness has no stated maturity earlier than the 91st day
after the stated maturity for the final scheduled principal payment of the
Securities or (II) Capital Stock of Statia (other than (x) Disqualified Stock,
(y) Capital Stock sold to a Subsidiary of Statia and (z) Capital Stock purchased
by members of Statia's or any of its Subsidiaries' management with the proceeds
of loans
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from Statia or any of its Subsidiaries); (4) the repurchase, redemption or other
acquisition or retirement for value of any Capital Stock of Statia or any
Subsidiary of Statia held by any member of Statia's or any of its Subsidiaries'
management pursuant to any management equity subscription agreement, employment
agreement, stock option agreement or other compensation agreement for Cash or
Subordinated Management Notes; provided that the aggregate Cash paid for all
such repurchased, redeemed, acquired or retired Capital Stock shall not in any
fiscal year exceed the sum of (w) $350,000 (the "Management Basket"), (x) any
unused portion of the Management Basket from any prior fiscal year beginning
with fiscal 1997, (y) the aggregate Cash proceeds received by Statia from any
key man life insurance policy and (z) the aggregate Cash proceeds received by
Statia during such fiscal year from any reissuance of Capital Stock by Statia to
members of management of Statia and its Subsidiaries (other than any such
Capital Stock that was purchased with the proceeds of loans from Statia or any
of its Subsidiaries); provided, further, that in no event may the aggregate
principal amount of Subordinated Management Notes so issued exceed $5.0 million
at any one time outstanding; (5) the making of loans to members of Statia's (or
any of its Restricted Subsidiaries') management to enable such Persons to
acquire Capital Stock in Statia pursuant to any management equity subscription
agreement, employment agreement, stock option agreement or other compensation
agreement entered into in the ordinary course of business to the extent the
proceeds are actually used to acquire such Capital Stock; (6) the payment of a
dividend to Parent to enable Parent to pay management fees to Castle Harlan,
Inc. or its designated Affiliate in an amount not to exceed $1.35 million per
annum plus out-of-pocket costs and expenses pursuant to the Castle Harlan
Agreement as in effect on the Issue Date; (7) the making of Related Business
Investments in joint ventures or Unrestricted Subsidiaries so long as the
aggregate amount of such Related Business Investments made or committed does not
exceed at any time 2% of the Consolidated Tangible Assets of Statia at such
time; (8) the making of a Related Business Investment in joint ventures or
Unrestricted Subsidiaries out of the proceeds of the substantially concurrent
issue and sale of Capital Stock of Statia (other than (x) Disqualified Stock,
(y) Capital Stock sold to a Subsidiary of Statia and (z) Capital Stock purchased
by members of Statia's or its Subsidiaries' management with the proceeds of
loans from Statia or any of its Subsidiaries); (9) the making of one or more
Restricted Payments from the net proceeds from the sale of the marine vessel
known as the M/V Megan D. Gambarella and/or one or more Restricted Payments from
Megan Escrow Amounts, in an aggregate amount equal to the liquidation preference
(initially $10 million) plus accrued and unpaid dividends of Parent's then
outstanding Series B Preferred Stock so long as such Restricted Payments are
used to effect the retirement of such Series B Preferred Stock; (10) the making
of one or more Restricted
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Payments with the net proceeds resulting from the sale of the Brownsville
Facility or (11) the making of one or more Restricted Payments in an amount
equal to the liquidation preference (initially $10 million) plus accrued and
unpaid dividends of Parent's then outstanding Series C Preferred Stock in order
to retire such Series C Preferred Stock, provided that after giving effect to
such Restricted Payment and any Indebtedness incurred to finance such Restricted
Payment, Statia would be able to incur at least $1.00 of Indebtedness pursuant
to the Consolidated Fixed Charge Coverage Ratio test set forth in Section
4.04(a).
The amounts referred to in clauses (1), (2), (3)(II), (4), (5), (7),
(8) and (11) of the previous paragraph shall be included as Restricted Payments
in any computation made pursuant to clause (iii) above.
Not later than the date of making any Restricted Payment, Statia
shall deliver to the Trustee an Officers' Certificate stating that such
Restricted Payment is permitted and setting forth the basis upon which the
calculations required by this Section 4.03 were computed, which calculations
shall be based upon Statia's latest available financial statements. The Trustee
shall have no duty to recalculate or otherwise verify the accuracy of any such
calculations.
SECTION 4.04. Limitation on Additional Indebtedness.
Statia shall not, and shall not permit any of its Restricted
Subsidiaries to: (a) directly or indirectly, create, incur, assume, guarantee or
otherwise become liable with respect to (collectively, "incur") any Indebtedness
(including without limitation Acquired Indebtedness), other than Indebtedness
between the Issuers and their Wholly-Owned Restricted Subsidiaries or among such
Wholly-Owned Restricted Subsidiaries and (b) issue (except to Statia or any of
its Wholly-Owned Restricted Subsidiaries) any Capital Stock having a preference
in liquidation or with respect to the payment of dividends, unless, after giving
effect thereto, Statia's Consolidated Fixed Charge Coverage Ratio on the date
thereof would be at least 2.0 to 1, determined on a pro forma basis as if the
incurrence of such additional Indebtedness or the issuance of such Capital
Stock, as the case may be, and the application of the net proceeds therefrom,
had occurred at the beginning of the four-quarter period used to calculate
Statia's Consolidated Fixed Charge Coverage Ratio.
Notwithstanding the foregoing, Statia and its Restricted
Subsidiaries may: (i) incur Indebtedness in an amount not to exceed the greater
of (A) $17.5 million or (B) the sum of 85% of Accounts Receivable, 60% of
Inventory and 50% of the net book value of vessels (other than the M/V Megan D.
Gambarella) owned by Statia and its Restricted Subsidiaries (including
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Refinancing Indebtedness with respect thereto); (ii) incur Indebtedness
represented by the Securities (including Refinancing Indebtedness with respect
thereto); (iii) incur Indebtedness in respect of Capitalized Lease Obligations
in an aggregate principal amount not to exceed $5.0 million at any time
outstanding (including Refinancing Indebtedness with respect thereto); (iv)
incur Indebtedness in respect of purchase money obligations in an aggregate
amount not to exceed $2.0 million at any time outstanding (including Refinancing
Indebtedness with respect thereto); (v) incur Indebtedness pursuant to the
issuance of Subordinated Management Notes in an aggregate principal amount not
to exceed $5.0 million at any time outstanding; (vi) incur Non-Recourse Purchase
Money Indebtedness; (vii) incur Indebtedness pursuant to Hedging Obligations,
provided that such Hedging Obligations are entered into to protect Statia or its
Restricted Subsidiaries from fluctuations in interest rates on Indebtedness
incurred in accordance with this Indenture to the extent the notional principal
amount of such Hedging Obligation does not exceed the principal amount of the
Indebtedness to which such Hedging Obligation relates; (viii) incur Indebtedness
under Currency Agreements; provided that (x) such Currency Agreements relate to
Indebtedness or the purchase price of goods purchased or sold by Statia or any
of its Restricted Subsidiaries in the ordinary course of its business and (y)
such Currency Agreements do not increase the Indebtedness or other obligations
of Statia or any of its Restricted Subsidiaries outstanding other than as a
result of fluctuations in foreign currency exchange rates; and (ix) incur
Indebtedness under Oil and Petroleum Hedging Contracts; provided that such
contracts were entered into in the ordinary course of business for the purpose
of limiting risks that arise in the ordinary course of business of Statia or any
of its Restricted Subsidiaries.
SECTION 4.05. Corporate Existence.
Except as otherwise permitted by Article Five, the Issuers shall do
or cause to be done all things necessary to preserve and keep in full force and
effect their corporate existence and the corporate, partnership or other
existence of each of Statia's Restricted Subsidiaries in accordance with the
respective organizational documents of each Restricted Subsidiary and the
material rights (charter and statutory) and franchises of the Issuers and each
of Statia's Restricted Subsidiaries; provided, however, that subject to Article
Eleven and the terms of any Security Document, Statia shall not be required to
preserve any such right or franchise, or the existence of any such Restricted
Subsidiary, if the Board of Directors of Statia shall reasonably determine that
the preservation thereof is no longer desirable in the conduct of the business
of the Issuers and such Restricted Subsidiaries, taken as a whole, and that the
loss thereof is not, and will not be, adverse in any material respect to the
Holders.
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SECTION 4.06. Payment of Taxes and Other Claims.
The Issuers shall pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, (i) all Taxes levied or
imposed upon them or any of the Restricted Subsidiaries or upon their or any of
the Restricted Subsidiaries' income, profits or property and (ii) all lawful
claims for labor, materials and supplies which, in each case, if unpaid, might
by law become a Lien upon the property of the Issuers or any of the Restricted
Subsidiaries; provided, however, that, subject to the terms of the applicable
Security Documents, the Issuers shall not be required to pay or discharge or
cause to be paid or discharged any such tax, assessment, charge or claim whose
amount, applicability or validity is being contested in good faith by
appropriate proceedings and for which disputed amounts adequate reserves have
been made in accordance with GAAP.
SECTION 4.07. Maintenance of Properties; Insurance, Books and Records.
(a) Subject to, and in compliance with, the provisions of Sections
11.03 and 11.04 and to the provisions of the applicable Security Documents, each
Issuer shall cause all properties used or useful in the conduct of its business
or the business of any of its Restricted Subsidiaries to be maintained and kept
in good condition, repair and working order (ordinary wear and tear excepted)
and supplied with all necessary equipment and shall cause to be made all
necessary repairs, renewals, replacements, betterments and improvements thereto.
(b) The Issuers shall maintain, and shall cause their Restricted
Subsidiaries to maintain, subject to the provisions of the applicable Security
Documents, insurance with responsible carriers against such risks and in such
amounts, and with such deductibles, retentions, self-insured amounts and
co-insurance provisions, as are customarily carried by similar businesses of
similar size, including, but not limited to, property and casualty loss,
workers' compensation and interruption of business insurance.
(c) The Issuers shall, and shall cause each of their Restricted
Subsidiaries to, keep proper books of record and account, in which full and
correct entries shall be made of all financial transactions and the assets and
business of the Issuers and each of their Restricted Subsidiaries, in accordance
with GAAP.
SECTION 4.08. Compliance Certificate; Notice of Default.
(a) The Issuers shall deliver to the Trustee, within 90 days after
the close of each fiscal year and 45 days after the close of each fiscal
quarter, an Officers' Certificate (one of
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which Officers shall be the principal executive officer, principal financial
officer or principal accounting officer of each of the Issuers) stating that a
review of the activities of the Issuers has been made under the supervision of
the signing officers with a view to determining whether the Issuers have kept,
observed, performed and fulfilled their obligations under this Indenture and
further stating, as to each such Officer signing such certificate, that to the
best of his or her knowledge, the Issuers during such preceding fiscal year or
fiscal quarter, as the case may be, have kept, observed, performed and fulfilled
each and every such covenant and no Default or Event of Default occurred during
such period and at the date of such certificate no Default or Event of Default
has occurred and is continuing or, if such signers do know of any Default or
Event of Default, the certificate shall describe its status with particularity.
The Officers' Certificate shall also notify the Trustee should an Issuer elect
to change its fiscal year end. For purposes of this Section 4.08(a), performance
by the Issuers of their obligations under this Indenture shall be determined
without regard to any grace period or requirement of notice provided pursuant to
the terms of this Indenture.
(b) The annual financial statements delivered pursuant to Section
4.10 shall be accompanied by a written report of Statia's independent
accountants (who shall be a firm of established national reputation) that in
conducting their audit of such financial statements nothing has come to their
attention that would lead them to believe that the Issuers have violated any
provisions of Article Four, Five or Six of this Indenture insofar as they relate
to accounting matters or, if any such violation has occurred, specifying the
nature and period of existence thereof, it being understood that such
accountants shall not be liable directly or indirectly to any Person for any
failure to obtain knowledge of any such violation.
(c) The Issuers shall deliver to the Trustee, within ten days of
becoming aware of any Default or Event of Default in the performance of any
covenant, agreement or condition contained in this Indenture, an Officers'
Certificate specifying the Default or Event of Default and describing its status
with particularity.
SECTION 4.09. Compliance with Laws.
Subject to the provisions of the applicable Security Document,
unless contested in good faith, the Issuers shall comply, and shall cause each
of their Restricted Subsidiaries to comply, with all applicable statutes, laws,
rules, regulations and orders of, and all applicable restrictions imposed by,
all governmental bodies, domestic or foreign, in respect of the conduct of its
business and the ownership of its properties, except for such noncompliance as
would not, individually or in
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the aggregate, have a material adverse effect on the business, condition
(financial or otherwise), properties, assets, results of operations or prospects
of the Issuers and their Restricted Subsidiaries taken as a whole.
SECTION 4.10. Reports.
(a) Whether or not required by the rules and regulations of the
Commission, so long as any Securities are outstanding, Statia shall furnish to
the Holders of Securities (i) all quarterly and annual financial information
that would be required to be contained in a filing with the Commission on Forms
10-Q and 10-K (or, if applicable, Form 20-Q and 20-K) if Statia were required to
file such Forms, including a "Management's Discussion and Analysis of Financial
Condition and Results of Operations" that describes the financial condition and
results of operations of Statia and its Restricted Subsidiaries, and, with
respect to the annual information only, a report thereon by Statia's certified
independent accountants and (ii) all reports that would be filed with the
Commission on Form 8-K if Statia were required to file such reports. In
addition, whether or not required by the rules and regulations of the
Commission, Statia will file a copy of all such information and reports with the
Commission for public availability (unless the Commission will not accept such a
filing) and make such information available to investors who request it in
writing. Upon qualification of this Indenture under the TIA, the Issuers shall
also comply with the provisions of TIA ss. 314(a).
(b) For so long as any of the Securities remain outstanding, the
Issuers shall furnish to the Holders and beneficial holders of Securities and to
prospective purchasers of Securities designated by the Holders of Transfer
Restricted Securities (as defined in the Registration Rights Agreement) and to
broker dealers, upon their request, the information required to be delivered
pursuant to Rule 144(d)(4) under the Securities Act.
SECTION 4.11. Waiver of Stay, Extension or Usury Laws.
The Issuers covenant (to the extent that they may lawfully do so)
that they shall not at any time insist upon, plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law or any
usury law or other law that would prohibit or forgive the Issuers from paying
all or any portion of the principal of and/or interest on the Securities as
contemplated herein, wherever enacted, now or at any time hereafter in force, or
which may affect the covenants or the performance of this Indenture, and (to the
extent that they may lawfully do so) the Issuers hereby expressly waive all
benefit or advantage of any such law, and covenant that they will not hinder,
delay or impede the execution of any power herein granted
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to the Trustee, but will suffer and permit the execution of every such power as
though no such law had been enacted.
SECTION 4.12. Limitation on Transactions with Affiliates.
Statia shall not, and shall not permit any of its Restricted
Subsidiaries to, sell, lease, transfer or otherwise dispose of any of its
properties or assets to, or purchase any property or assets from or enter into
any contract, agreement, understanding, loan, advance or guarantee with, or for
the benefit of, any Affiliate (each of the foregoing, an "Affiliate
Transaction"), unless (i) such Affiliate Transaction is on terms that are no
less favorable to Statia or the relevant Restricted Subsidiary than those that
would have been obtained in a comparable transaction by Statia or such
Restricted Subsidiary with an unrelated Person and (ii) Statia delivers to the
Trustee (a) with respect to any Affiliate Transaction involving aggregate
payments in excess of $1.0 million, a Board Resolution approved by a majority of
the disinterested members of the Board of Directors and an Officers' Certificate
certifying that such Affiliate Transaction complies with clause (i) above and
(b) with respect to any Affiliate Transaction involving aggregate payments in
excess of $5.0 million, an opinion as to the fairness to Statia or such
Restricted Subsidiary from a financial point of view issued by an Independent
Financial Advisor; provided, however that (x) any employment agreement entered
into by Statia or any of its Restricted Subsidiaries in the ordinary course of
business and consistent with the past practice of Statia or such Restricted
Subsidiary, (y) transactions between or among Statia and/or its Restricted
Subsidiaries and (z) transactions permitted by Section 4.03 of this Indenture,
in each case, shall not be deemed Affiliate Transactions.
SECTION 4.13. Limitation on Restrictions on Distributions from Subsidiaries.
Statia shall not, and shall not permit any of its Restricted
Subsidiaries to, create or otherwise cause or suffer to exist or become
effective any consensual Payment Restriction with respect to any of its
Restricted Subsidiaries, except for any such Payment Restriction existing under
or by reason of (a) applicable law, (b) customary non-assignment provisions in
leases or other contracts entered into in the ordinary course of business and
consistent with past practices, (c) purchase money obligations for property
acquired in the ordinary course of business that impose restrictions of the
nature described in clause (c) of the definition thereof on the property so
acquired, (d) customary restrictions imposed on the transfer of copyrighted or
patented materials, (e) the entering into of a contract for the sale or other
disposition of assets, directly or indirectly, so long as such restrictions do
not extend to assets that are not
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subject to such sale or other disposition, (f) provisions in Indebtedness of
Restricted Subsidiaries that is permitted by this Indenture to be incurred that
only restrict the transfer of the assets purchased with the proceeds of such
Indebtedness, (g) the terms of the New Bank Credit Facility on the Issue Date
and any similar Payment Restriction under any similar bank credit facility or
any replacement thereof, provided that such similar Payment Restriction is no
more restrictive than the Payment Restriction in effect on the Issue Date under
the New Bank Credit Facility, (h) the terms of any agreement evidencing any
Acquired Indebtedness that was permitted to be incurred pursuant to this
Indenture, provided that such Payment Restriction only applies to assets that
were subject to such restriction and encumbrances prior to the acquisition of
such assets by Statia or its Restricted Subsidiaries and (i) any such Payment
Restriction arising in connection with Refinancing Indebtedness; provided that
any such Payment Restrictions that arise under such Refinancing Indebtedness are
not, taken as a whole, more restrictive than those under the agreement creating
or evidencing the Indebtedness being refunded or refinanced.
SECTION 4.14. Limitation on Liens.
Statia shall not, and shall not cause or permit any of the
Restricted Subsidiaries to, directly or indirectly create, incur, assume or
suffer to exist any Lien on any property or asset now owned or hereafter
acquired, or on any income or profits therefrom, or assign or convey any right
to receive income therefrom, except (i) in the case of any property or asset
which does not constitute Collateral, Permitted Liens, unless the Securities are
equally and ratably secured for as long as such secured Indebtedness is so
secured, and (ii) in the case of any property or asset which constitutes
Collateral, Liens specifically permitted by the applicable Security Documents.
SECTION 4.15. Limitation on Asset Sales; Offers to Purchase.
(a) Collateral Asset Sales; Collateral Asset Sale Offer. Statia
shall not, and shall not permit any of its Restricted Subsidiaries to,
consummate any Asset Sale involving any of the Collateral (other than the Lender
Collateral) (a "Collateral Asset Sale") unless (i) Statia and its Restricted
Subsidiaries receive consideration at the time of such Collateral Asset Sale at
least equal to the fair market value of the assets included in such Collateral
Asset Sale; (ii) the aggregate fair market value of the consideration from all
such Collateral Asset Sales that is not in the form of Cash or Financial
Instruments shall not, when aggregated with the fair market value of all other
non-Cash or non-Financial Instrument consideration received by Statia and its
Restricted Subsidiaries from all previous Collateral Asset Sales since the Issue
Date that have not yet been converted into Cash or Financial Instruments, exceed
5% of
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the Consolidated Tangible Assets of Statia at the time of, and prior to giving
effect to, such Collateral Asset Sale; (iii) the Net Proceeds thereof shall be
paid directly by the purchaser thereof to the Trustee for deposit into the
Collateral Account; and (iv) if any property other than Financial Instruments is
included in the Net Proceeds of such Collateral Asset Sale, such property shall
be made subject to the Lien of this Indenture and the Security Documents;
provided that any Cash received shall be immediately exchanged for Financial
Instruments; and provided further that the Land Swap shall be excluded from any
computation made pursuant to clause (i) or (ii) above. Upon consummation of such
Collateral Asset Sale and deposit of the Net Proceeds thereof in the Collateral
Account, such Net Proceeds shall, at the option of the Issuers, (a) be left in
the Collateral Account as security for the Securities, or (b) be reinvested in a
manner that would constitute a Related Business Investment or a Permitted
Related Acquisition, provided that such property will be subject to a first
priority Lien in favor of the Trustee and will constitute Collateral, or (c)
subject to the limitations set forth in Section 4.15(d), be applied to purchase
the maximum principal amount of Securities tendered to Statia that may be
purchased out of the Net Proceeds of such sale pursuant to an Offer to Purchase
made by Statia as set forth below (the "Collateral Asset Sale Offer") at a
purchase price equal to 105% of the principal amount thereof (or if the
then-applicable price at which the Securities may be optionally redeemed is less
than 105%, at such lesser price), plus accrued and unpaid interest, if any,
thereon to the date of purchase. Notwithstanding the preceding provisions of
this Section 4.15(a), neither Statia nor any of its Restricted Subsidiaries
shall cause all or substantially all of the Collateral located at or used in
connection with the St. Eustatius Facility or the Point Tupper Facility to be
sold or disposed of in a Collateral Asset Sale on or prior to the Fifth
Anniversary and the occurrence of such sale or disposition shall constitute an
Event of Default hereunder. If, subsequent to the Fifth Anniversary, Statia or
any of its Restricted Subsidiaries causes all or substantially all of the
Collateral located at or used in connection with the St. Eustatius Facility to
be sold or disposed of in a Collateral Asset Sale, Statia or the applicable
Restricted Subsidiary shall make a Collateral Asset Sale Offer to purchase all
of the outstanding Securities within 30 days of such Collateral Asset Sale at a
purchase price equal to the then-applicable price at which the Securities may be
optionally redeemed, plus accrued and unpaid interest, if any, thereon to the
date of purchase. To the extent a Collateral Asset Sale Offer is made and not
fully subscribed to by Holders of the Securities, the unutilized Net Proceeds to
which such Collateral Asset Sale Offer related may be retained by the Issuers
free and clear of the Lien of this Indenture and the Security Documents.
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For purposes of this Section 4.15(a) regarding Collateral Asset
Sales, there will be no limitation on the sale or other disposition of Lender
Collateral until such time as all of the obligations of the New Bank Borrowers
owed to the New Bank Lenders under the New Bank Credit Facility are paid in
full, the sale of Lender Collateral shall be deemed to be a Non-Collateral Asset
Sale and the consideration received in respect thereof shall be applied in the
manner set forth in Section 4.15(b) of this Indenture.
(b) Non-Collateral Asset Sales; Non-Collateral Asset Sale Offer.
Statia shall not, and shall not permit any of its Restricted Subsidiaries to,
consummate any Asset Sale not involving any of the Collateral or any Asset Sale
of Lender Collateral described in the last paragraph of Section 4.15(a) (a
"Non-Collateral Asset Sale"), unless (i) Statia or its Restricted Subsidiaries
receive consideration at the time of such Non-Collateral Asset Sale at least
equal to the fair market value of the assets included in such Non-Collateral
Asset Sale, (ii) the aggregate fair market value of the consideration from all
such Non-Collateral Asset Sales that is not in the form of Cash or Financial
Instruments shall not, when aggregated with the fair market value of all other
non-Cash or non-Financial Instruments consideration received by Statia and its
Restricted Subsidiaries from all previous Non-Collateral Asset Sales since the
Issue Date that have not yet been converted into Cash or Financial Instruments,
exceed 5% of the Consolidated Tangible Assets of Statia at the time of, and
prior to giving effect to, such Non-Collateral Asset Sale and (iii) in the case
of a sale of Lender Collateral that is deemed to be a Non-Collateral Asset Sale,
if any property other than Cash or Financial Instruments is included in the
consideration received in respect of such Asset Sale, such property shall be
made subject to the Lien of this Indenture and the Security Documents. Upon
consummation of any such Non-Collateral Asset Sale, Statia shall, or shall cause
the applicable Restricted Subsidiary to, within 360 days of the receipt of the
proceeds therefrom, (a) reinvest the Net Proceeds of such Non-Collateral Asset
Sale in a manner that would constitute a Related Business Investment or a
Permitted Related Acquisition; provided that in the case of a sale of Lender
Collateral that is deemed to be a Non-Collateral Asset Sale, the property or
asset acquired or constructed in connection with such Related Business
Investment or Permitted Related Acquisition shall be made subject to the Lien of
this Indenture and the Security Documents; (b) use the Net Proceeds to repay
outstanding Indebtedness ranking pari passu with the Securities; provided that
any such repayment of Indebtedness under the New Bank Credit Facility, any other
revolving credit facility or similar agreement shall result in a permanent
reduction in the lending commitment relating thereto in an amount equal to the
principal amount so repaid; or (c) subject to the limitations set forth in
Section 4.15(d), apply or cause to be applied the Net Proceeds of
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such Non-Collateral Asset Sale that are neither reinvested as provided in clause
(a) nor applied to the repayment of Indebtedness as provided in clause (b) to
the purchase of the maximum principal amount of Securities tendered to Statia
that may be purchased out of such Net Proceeds at a purchase price equal to 100%
of the principal amount thereof, plus accrued and unpaid interest, if any,
thereon to the date of purchase, pursuant to an Offer to Purchase made by Statia
(a "Non-Collateral Asset Sale Offer"); provided that Statia may defer the
Non-Collateral Asset Sale Offer until the amount subject thereto would be at
least $5.0 million. All Net Proceeds from Non-Collateral Asset Sales shall be
deposited into the Collateral Account pending application in accordance with the
provisions of this Section 4.15(b). To the extent a Non-Collateral Asset Sale
Offer is made and not fully subscribed to by Holders of the Securities, the
unutilized Net Proceeds to which such offer related may be retained by the
Issuers free and clear of the Lien of this Indenture and the Security Documents.
(c) Destruction or Taking of Collateral; Proceeds Offer. In the
event there shall occur any damage to, loss or destruction of all or any portion
of the Collateral (each, a "Destruction") or any taking of all or any portion
thereof by condemnation or other eminent domain proceedings, pursuant to any
law, general or special, or by reason of the temporary requisition of the use or
occupancy of all or any portion of the Collateral by any governmental authority,
civil or military, or any sale pursuant to the exercise by any such governmental
authority of any right which it may then have to purchase or designate a
purchaser or to order a sale of all or any portion of the Collateral (each, a
"Taking") the proceeds of insurance relating to any such Destruction and the
award or payment relating to any such Taking, net of all expenses reasonably
incurred by the Issuers or any of their Restricted Subsidiaries in the
collection thereof, shall be exchanged for Financial Instruments and deposited
with the Trustee and held in the Collateral Account. The Issuers or the
appropriate Subsidiary Guarantor may withdraw such proceeds or award from the
Collateral Account to reimburse such Issuer or the appropriate Subsidiary
Guarantor for expenditures made, or to pay costs incurred, by such Issuer or the
appropriate Subsidiary Guarantor to repair, rebuild or replace the Collateral
Destroyed or Taken, subject to compliance with the provisions of Section 12.03
of this Indenture. Proceeds of insurance relating to any Destruction of all or
any portion of the Collateral or an award relating to any Taking of all or any
portion of the Collateral that has not been applied in the manner set forth in
the immediately preceding sentence (a) shall be left in the Collateral Account
as security for the Securities, or (b) subject to the limitations set forth in
Section 4.15(d), shall be used by Statia and its Restricted Subsidiaries, to the
extent not utilized to repair or replace the Collateral affected by such
Destruction or Taking in accordance
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with the provisions of this Indenture and the applicable Security Document, to
make an offer to purchase the maximum principal amount of Securities that may be
purchased out of such proceeds or award (a "Proceeds Offer") at a purchase price
equal to 100% of the principal amount thereof, plus accrued and unpaid interest,
if any, thereon to the date of purchase. Notwithstanding anything in this
Section 4.15 to the contrary, the proceeds of insurance relating to the
Destruction of, or an award relating to the Taking of, all or substantially all
of the Collateral located at or used in connection with the St. Eustatius
Facility or the Point Tupper Facility following the Fifth Anniversary shall be
used to make a Proceeds Offer within 30 days after receipt of such proceeds at a
purchase price equal to 100% of the principal amount thereof, plus accrued and
unpaid interest, if any, thereon to the date of purchase. For purposes of this
Section 4.15(c), (i) "all or substantially all" shall mean the Taking or
Destruction of such portion of the Collateral with respect to any Facility that
will cause the Cost of Construction (as defined in the Mortgages) to rebuild or
replace such Collateral to exceed the amount of insurance maintained by the
Issuers and their Restricted Subsidiaries with respect to such Facility and (ii)
until such time as all of the obligations of the New Bank Borrowers owed to the
New Bank Lenders under the New Bank Credit Facility are paid in full, Lender
Collateral shall be deemed not to constitute Collateral.
To the extent a Proceeds Offer is made and not fully subscribed to
by Holders of the Securities, the unutilized proceeds to which such Proceeds
Offer related may be retained by the Issuers free and clear of the Lien of this
Indenture and the Security Documents.
(d) Certain Limitations on Offers to Purchase. Notwithstanding the
foregoing, in no event shall the Issuers purchase pursuant to Offers to Purchase
Securities having an original issue price of more than 25% of the aggregate
original issue price of the Securities issued pursuant to this Indenture on or
prior to the Fifth Anniversary. If the foregoing limitation applies, the Issuers
shall use any excess net proceeds that, but for the application of such
limitation, would have been required to be used to make an Offer to Purchase on
or prior to the Fifth Anniversary to make an Offer to Purchase to all Holders of
Securities at a purchase price equal to 100% of the principal amount thereof,
plus accrued and unpaid interest, if any, thereon to the date of purchase,
promptly after the Fifth Anniversary; provided that the Issuers may defer such
Offer to Purchase until the aggregate of such excess net proceeds and the
aggregate unutilized amount of net proceeds realized after the Fifth Anniversary
is equal to or exceeds $5.0 million (at which point the entire amount shall be
applied to make such Offer to Purchase); provided further that the limitation on
Offers to Purchase contained in this Section 4.15(d) does not apply where
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an Offer to Purchase is made in order to cure an Event of Default.
(e) Certain Requirements Relating to Offers to Purchase. Notice of
each Offer to Purchase: (A) with respect to Non-Collateral Asset Sales and
Proceeds Offers only, shall be mailed to the record Holders of the Securities as
shown on the register of Holders of Securities not more than 360 days after a
Non-Collateral Asset Sale or 30 days after receipt of insurance proceeds or
condemnation awards giving rise to a requirement to make an Offer to Purchase,
with a copy to the Trustee; and (B) with respect to any Offer to Purchase, will
specify the purchase date (which shall be no earlier than 30 days nor later than
40 days from the date such notice is mailed) (the "Purchase Date"). The notice
shall contain all instructions and materials necessary to enable such Holders to
tender Securities pursuant to the Offer to Purchase, and shall state the
following terms:
(1) that the Offer to Purchase is being made pursuant to this
Section 4.15 and that all Securities tendered will be accepted for
payment; provided, however, that if the principal amount of Securities
tendered in an Offer to Purchase plus accrued interest at the expiration
of such offer exceeds the aggregate amount of proceeds available to
satisfy such Offer to Purchase, the Issuers shall select the Securities to
be purchased on a pro rata basis;
(2) the purchase price (including the amount of accrued interest, if
any);
(3) that any Security not tendered will continue to accrue interest;
(4) that, unless the Issuers default in making payment therefor, any
Security accepted for payment pursuant to the Offer to Purchase shall
cease to accrue interest after the Purchase Date;
(5) that Holders of Securities electing to have a Security purchased
pursuant to an Offer to Purchase will be required to surrender the
Security, with the form entitled "Option of Holder to Elect Purchase" on
the reverse of the Security completed, to the Paying Agent at the address
specified in the notice prior to the close of business on the Purchase
Date;
(6) that Holders of Securities will be entitled to withdraw their
election if the Paying Agent receives, not later than the Business Day
prior to the Purchase Date, a facsimile transmission or letter setting
forth the name of the Holder, the principal amount of the Securities the
Holder delivered for purchase and a statement that such
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Holder is withdrawing his election to have such Securities purchased; and
(7) that Holders whose Securities are purchased only in part will be
issued new Securities in a principal amount equal to the unpurchased
portion of the Securities surrendered.
Upon receiving notice of the Offer to Purchase, Holders of
Securities may elect to tender their Securities in whole or in part in integral
multiples of $1,000 in exchange for U.S. Legal Tender. To the extent Holders
properly tender Securities in an amount exceeding the amount of Net Proceeds or
net insurance proceeds or condemnation awards, as applicable, used to make an
Offer to Purchase, Securities of tendering Holders will be repurchased on a pro
rata basis (based on amounts tendered).
On or before the Purchase Date, the Issuers shall (i) accept for
payment Securities or portions thereof tendered pursuant to the Offer to
Purchase which are to be purchased in accordance with item (1) above, (ii)
deposit with the Paying Agent in accordance with Section 2.14, U.S. Legal Tender
sufficient to pay the purchase price plus accrued interest, if any, of all
Securities to be purchased and (iii) deliver to the Trustee Securities so
accepted together with an Officers' Certificate stating the Securities or
portions thereof being purchased by the Issuers. The Paying Agent shall promptly
disburse to the Holders of Securities so accepted payment in an amount equal to
the purchase price plus accrued interest, if any, and the Trustee shall promptly
authenticate and mail to such Holder new Securities equal in principal amount to
any unpurchased portion of the Securities surrendered. Any Securities not so
accepted shall be promptly mailed or caused to be mailed by the Issuers to the
Holder thereof. For purposes of this Section 4.15, the Trustee shall act as the
Paying Agent.
Statia will comply with the requirements of Section 14(e) under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the
repurchase of Securities pursuant to any Offer to Purchase. Any such Offer to
Purchase may provide that Statia's obligations thereunder to purchase Securities
offered pursuant thereto shall be suspended if there shall be in effect a
binding order of any court of competent jurisdiction prohibiting consummation of
such Offer to Purchaser and shall be terminated if any such order shall become
final and non-appealable; provided, however, that Statia shall use its
reasonable best efforts to prevent the entry of any such order or to cause the
lifting of any such order as soon as practicable.
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SECTION 4.16. Restrictions on Sale of Stock of Subsidiaries.
Except with respect to the Capital Stock of Statia Terminals
Southwest, Inc., Statia shall not, and shall not permit any Restricted
Subsidiary to, sell or otherwise dispose of any of the Capital Stock of any
Restricted Subsidiary unless: (i) (a) Statia shall retain ownership of more than
50% of the Common Equity of such Restricted Subsidiary or (b) except with
respect to Statia Canada, all of the Capital Stock of such Restricted Subsidiary
shall be sold or otherwise disposed of; and (ii) the Net Proceeds and other
proceeds from any such sale or disposition are applied or otherwise treated in a
manner consistent with the provisions described in Section 4.15.
SECTION 4.17. Restrictions on Sale and Leaseback Transactions.
Statia will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, enter into, renew or extend any Sale
and Leaseback Transaction (other than a Sale and Leaseback Transaction between
Statia and any of its Wholly-Owned Restricted Subsidiaries or between
Wholly-Owned Restricted Subsidiaries of Statia, as the case may be) unless: (i)
Statia or such Restricted Subsidiary would be entitled, under Section 4.04 and
Section 4.18 to incur Indebtedness in an amount equal to the Attributable
Indebtedness with respect to such Sale and Leaseback Transaction, (ii) such Sale
and Leaseback Transaction would not result in a violation of Section 4.14; and
(iii) the Net Proceeds from any such Sale and Leaseback Transaction are applied
in a manner consistent with the provisions described in Section 4.15.
SECTION 4.18. Limitations on Subsidiary Debt.
Notwithstanding the provisions set forth in Section 4.04, Statia
will not permit any of its Restricted Subsidiaries, directly or indirectly, to
create, incur, assume, guarantee or otherwise become liable with respect to
(collectively, "incur") any Indebtedness (which, with respect to any such
Restricted Subsidiary, includes without limitation any Capital Stock of such
Restricted Subsidiary having a preference in liquidation or with respect to the
payment of dividends) except Indebtedness permitted to be incurred by Restricted
Subsidiaries of Statia under clauses (i) through (iv) and (vi) through (ix) of
Section 4.04(b).
SECTION 4.19. Impairment of Security Interest.
Statia shall not, and shall not permit any of its Restricted
Subsidiaries to, (i) take or omit to take any action with respect to the
Collateral that might or would have the result of affecting or impairing the
security interest in the
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Collateral in favor of the Trustee for its benefit and for the benefit of the
Holders and the holders of Additional Secured Indebtedness, if any, or (ii)
grant to any Person (other than the Trustee, for its benefit and for the benefit
of the Holders and the holders of Additional Secured Indebtedness, if any) any
interest whatsoever in the Collateral, in each case except as expressly provided
for in this Indenture or the Security Documents.
SECTION 4.20. Amendment to Security Documents.
Statia shall not, and shall not permit any of its Restricted
Subsidiaries to, amend, modify or supplement, or permit or consent to any
amendment, modification or supplement of, the Security Documents in any way that
would be adverse to the Holders.
SECTION 4.21. Additional Subsidiary Guarantees.
If Statia or any of its Restricted Subsidiaries shall acquire or
create another Subsidiary, then, unless such newly acquired or created
Subsidiary has, pursuant to the definition thereof, been designated as an
Unrestricted Subsidiary, (i) such Subsidiary shall execute a Guarantee in
accordance with the terms of Section 10.06 of this Indenture and (ii) the
appropriate Issuer and/or Restricted Subsidiary shall execute and deliver a
Securities Pledge Agreement and take all other actions necessary, as set forth
in an Opinion of Counsel delivered to the Trustee, to cause the Capital Stock
issued by such newly acquired or created Subsidiary to be made subject to the
Lien of this Indenture and the Security Documents.
SECTION 4.22. Change of Business.
If an Issuer or any Subsidiary Guarantor conducts business in any
jurisdiction (the "Taxing Jurisdiction") other than the Netherlands Antilles or
Canada in a manner which causes Holders to be liable for Taxes on payments under
the Securities which they would not have been so liable but for such conduct of
business in the Taxing Jurisdiction, the provision of the Securities described
under Section 4.23 shall be considered to apply to such Holders as if references
in such provision to "Taxes" included taxes imposed by way of deduction or
withholding by such Taxing Jurisdiction and references to "Taxing Authority"
include the Taxing Jurisdiction.
SECTION 4.23. Payment of Additional Amounts.
(a) All payments made by the Issuers or any Subsidiary Guarantor
under or with respect to the Securities will be made free and clear of, and
without withholding or deduction for or on account of, any present or future
Taxes imposed or levied by or
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on behalf of any Taxing Authority, unless the Issuers or any such Subsidiary
Guarantor are required to withhold or deduct such Taxes by law or by the
interpretation or administration thereof. If the Issuers or any Subsidiary
Guarantor are required to withhold or deduct any amount for or on account of
Taxes imposed or levied by or on behalf of any Taxing Authority from any payment
made under or with respect to the Securities, the Issuers and any such
Subsidiary Guarantor, as the case may be, will pay such additional amounts
("Additional Amounts") as may be necessary so that the net amount received by
each Holder of Securities (including Additional Amounts) after such withholding
or deduction will not be less than the amount the Holder would have received if
such Taxes had not been withheld or deducted; provided that no Additional
Amounts will be payable with respect to a payment made to a Holder of Securities
(an "Excluded Holder") (a) with which the Issuers or any such Subsidiary
Guarantor do not deal at arm's length (within the meaning of the Income Tax Act
(Canada)) at the time of making such payment; (b) with respect to any such Taxes
which would not have been so imposed but for (i) the existence of any present or
former connection (other than the mere holding of a Security or the receipt of
payments under or with respect to the Securities) between such Holder (or
between a fiduciary, settlor, beneficiary, member or shareholder of such Holder,
if such Holder is an estate, a trust, a partnership or a corporation) and Canada
or the Netherlands Antilles or any political subdivision or Taxing Authority
thereof or therein, as the case may be, including, without limitation, such
Holder (or such fiduciary, settlor, beneficiary, member or shareholder) being or
having been a citizen or resident thereof or being or having been engaged in a
trade or business or present therein or having, or having had, a permanent
establishment therein, or (ii) the presentation by the Holder of any Security
for payment on a date more than 30 days after the date on which such payment
became due and payable or the date on which payment thereof is duly provided
for, whichever occurs later; (c) with respect to any estate, inheritance, gift,
sales, transfer or personal property tax or any similar Taxes imposed or levied
by or on behalf of any Taxing Authority; or (d) with respect to any such Taxes
that would not have been imposed, due or payable but for a failure by the Holder
of Securities to comply with a request by the Issuers to satisfy any
certification, identification or other reporting requirements whether imposed by
statute, regulation, treaty or administrative practice concerning nationality,
residence in or connection with the Netherlands Antilles or Canada; nor shall
Additional Amounts be paid with respect to any payment on a Security to a Holder
who is a fiduciary or partnership or other than the sole beneficial owner of
such payment to the extent such payment would be required to be included in the
income, for tax purposes, of a beneficiary or settlor with respect to such
fiduciary or a member of such partnership or a beneficial owner who would not
have been entitled to the Additional Amounts had such beneficiary, settlor,
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member or beneficial owner been the Holder of the Security. The Issuers or any
such Subsidiary Guarantor will also, in accordance with applicable law, (i) make
such withholding or deduction and (ii) remit the full amount deducted or
withheld to the relevant Taxing Authority. The Issuers or any such Subsidiary
Guarantor will furnish to the Holders of the Securities, within 30 days after
the date the payment of any such Taxes is due pursuant to applicable law,
certified copies of tax receipts evidencing such payment by the Issuers or any
such Subsidiary Guarantor.
(b) The Issuers and each Subsidiary Guarantor will indemnify and
hold harmless each Holder of Securities (other than an Excluded Holder in
respect of the applicable payment) and will, upon written request of each Holder
of Securities (other than an Excluded Holder in respect of the applicable
payment), and provided that reasonable supporting documentation is provided,
reimburse ("Reimbursement Payments") each such Holder for the amount of (i) any
Taxes levied or imposed by the Netherlands Antilles or levied or imposed by way
of deduction or withholding by Canada and paid by such Holder as a result of
payments made under or with respect to the Securities, and (ii) any Taxes levied
or imposed by the Netherlands Antilles or levied or imposed by way of deduction
or withholding by Canada with respect to any reimbursement under the foregoing
clause (i), so that the net amount received by such Holder after such
reimbursement will not be less than the net amount the Holder would have
received if Taxes on such reimbursement had not been so imposed.
(c) At least 30 days prior to each date on which any payment under
or with respect to the Securities is due and payable, if the Issuers or any
Subsidiary Guarantor will be obligated to pay Additional Amounts with respect to
such payment, the Issuers or such Subsidiary Guarantor, as the case may be, will
deliver to the Trustee an Officers' Certificate stating that such Additional
Amounts will be payable and the amounts so payable and will set forth such other
information necessary to enable the Trustee to pay such Additional Amounts to
Holders of Securities on the payment date. Whenever in this Indenture there is
mentioned, the payment of amounts based upon principal, premium, if any,
interest or any other amount payable under or with respect to any Security, such
mention shall be deemed to include mention of the payment of Additional Amounts
and Reimbursement Payments provided for in this Section 4.23, to the extent
that, in such context, Additional Amounts and Reimbursements are, were or would
be payable in respect thereof pursuant to the provisions of this Section 4.23.
(d) The obligations of the Issuers under this Section 4.23 shall
survive the termination of this Indenture and the payment of all other amounts
under or with respect to the Securities.
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ARTICLE FIVE
SUCCESSOR CORPORATION
SECTION 5.01. Mergers, Consolidations and Sale of Assets.
(a) Neither of the Issuers shall, in any transaction or series of
related transactions, (i) consolidate or merge with or into (other than a merger
with a Wholly-Owned Restricted Subsidiary solely for the purpose of changing the
applicable Issuer's jurisdiction of incorporation to one of the States of the
United States), or sell, lease, convey or otherwise dispose of or assign all or
substantially all of the assets of Statia and its Restricted Subsidiaries (taken
as a whole), or assign any of its obligations under the Securities, this
Indenture or the Security Documents, to any Person or (ii) adopt a Plan of
Liquidation unless, in either case: (a) the Person formed by or surviving such
consolidation or merger (if other than an Issuer) or to which such sale, lease,
conveyance or other disposition or assignment shall be made (or, in the case of
a Plan of Liquidation, any Person to which assets are transferred)
(collectively, the "Successor") is a corporation organized and existing under
(x) the laws of the Netherlands Antilles, (y) the laws of the United States or
any State thereof or the District of Columbia or (z) the laws of Canada or any
province thereof, and the Successor assumes by supplemental indenture in a form
satisfactory to the Trustee all of the obligations of the applicable Issuer
under the Securities, this Indenture and the Security Documents; (b) immediately
prior to and immediately after giving effect to such transaction and the
assumption of the obligations as set forth in clause (a) above and the
incurrence of any Indebtedness to be incurred in connection therewith, no
Default or Event of Default shall have occurred and be continuing; (c)
immediately after and giving effect to such transaction and the assumption of
the obligations set forth in clause (a) above and the incurrence of any
Indebtedness to be incurred in connection therewith, and the use of any net
proceeds therefrom on a pro forma basis, (1) the Consolidated Net Worth of the
applicable Issuer or the Successor, as the case may be, would be at least equal
to the Consolidated Net Worth of such Issuer immediately prior to such
transaction and (2) Statia or the Successor, as the case may be, could incur at
least $1.00 of additional Indebtedness pursuant to the Consolidated Fixed Charge
Coverage Ratio test set forth in Section 4.04(a); (d) each Subsidiary Guarantor,
unless it is the other party to the transactions described above, shall have by
amendment to its Guarantee confirmed that its Guarantee of the Securities shall
apply to the obligations of the Issuers or the Successor under the Securities
and this Indenture; (e) the Trustee shall have
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been furnished an Opinion of Counsel to the effect that the transaction will
not, in and of itself, result in the Issuers or the Successor being required to
make any deduction or withholding for or on account of Taxes from any payments
made under or with respect to the Securities referred to in Section 4.23(b); and
(f) the Issuers shall have delivered to the Trustee an Officers' Certificate and
an Opinion of Counsel each stating that (1) such transaction and supplemental
indenture comply with this Article, (2) all conditions precedent herein provided
for relating to such transaction have been complied with and (3) all instruments
of further assurance and all actions as are necessary to maintain, preserve and
protect the rights of the Holders and the Trustee hereunder and under each of
the applicable Security Documents with respect to the Security Interests have
been taken.
(b) No Significant Subsidiary Guarantor (other than Statia Terminals
Southwest, Inc.) may consolidate with or merge with or into (whether or not such
Significant Subsidiary Guarantor is the surviving Person) another Person whether
or not affiliated with such Significant Subsidiary Guarantor unless (i) the
Person formed by or surviving any such consolidation or merger (if other than
such Significant Subsidiary Guarantor) assumes all of the obligations of such
Significant Subsidiary Guarantor pursuant to a supplemental indenture, in form
and substance satisfactory to the Trustee, under the Securities and this
Indenture; (ii) immediately after giving effect to such transaction, no Default
or Event of Default exists; (iii) immediately after giving effect to such
transaction Statia could incur at least $1.00 of additional Indebtedness
pursuant to the Consolidated Fixed Charge Coverage Ratio test set forth in
Section 4.04(a); and (iv) the Issuers shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel each stating that (1) such
transaction and supplemental indenture comply with this Article, (2) all
conditions precedent herein provided for relating to such transaction have been
complied with and (3) all instruments of further assurance and all actions as
are necessary to maintain, preserve and protect the rights of the Holders and
the Trustee hereunder and under each of the applicable Security Documents with
respect to the Security Interests have been taken.
SECTION 5.02. Successor Corporation Substituted.
Upon any such consolidation, merger, conveyance, lease or transfer
in accordance with the foregoing, the Successor formed by such consolidation or
into which any Issuer is merged or to which such conveyance, lease or transfer
is made will succeed to, and be substituted for, and may exercise every right
and power of, the Issuer entering into or making such consolidation, merger,
conveyance, lease or transfer under this Indenture with the same effect as if
such Successor had been named as an Issuer herein, and thereafter (except in the
case of
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a sale, assignment, transfer, lease, conveyance or other disposition) the
predecessor corporation will be relieved of all further obligations and
covenants under this Indenture, the Securities, the Security Documents and the
Registration Rights Agreement. For all purposes of this Indenture and the
Securities (including the provisions of this Article Five and Sections 4.03,
4.04 and 4.14), Subsidiaries of any Successor will, upon such transaction or
series of transactions, become Restricted Subsidiaries or Unrestricted
Subsidiaries as provided pursuant to definition of Unrestricted Subsidiary and
all Indebtedness, and all Liens on property or assets, of the Issuers and the
Restricted Subsidiaries immediately prior to such transaction or series of
transactions will be deemed to have been incurred upon such transaction or
series of transactions.
ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default.
The following are "Events of Default" under this Indenture:
(i) failure by the Issuers to pay interest or any Additional Amounts
or Reimbursement Payments related thereto on any of the Securities or any
Liquidated Damages when they become due and payable and the continuance of
any such failure for 30 days; or
(ii) failure by the Issuers to pay the principal or premium, if any,
on any of the Securities when it becomes due and payable, whether at
stated maturity, upon redemption, upon acceleration or otherwise; or
(iii) either Issuer shall fail to comply with any of its agreements
or covenants in Section 5.01 or Section 4.15; or
(iv) failure by either of the Issuers to comply with any other
covenant in this Indenture or the Security Documents and continuance of
such failure for 30 days after notice of such failure has been given to
the Issuers by the Trustee or to the Issuers and the Trustee by the
Holders of at least 25% of the aggregate principal amount of the
Securities then outstanding; or
(v) failure by either of the Issuers or any of their Subsidiaries to
make any payment when due or during any applicable grace period in respect
of any Indebtedness
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of the Issuers or any of such Subsidiaries that has an aggregate
outstanding principal amount of $2.5 million or more; or
(vi) a default under any Indebtedness of either of the Issuers or
any Subsidiary of an Issuer, whether such Indebtedness now exists or
hereafter shall be created, if (A) such default results in the Holder or
Holders of such Indebtedness causing the Indebtedness to become due prior
to its stated maturity and (B) the outstanding principal amount of such
Indebtedness, together with the outstanding principal amount of any other
such Indebtedness the maturity of which has been so accelerated, aggregate
$2.5 million or more at any one time; or
(vii) one or more final judgments or orders that exceed $2.5 million
in the aggregate for the payment of money have been entered by a court or
courts of competent jurisdiction against either of the Issuers or any
Subsidiary of either of the Issuers and such judgment or judgments have
not been satisfied, stayed, annulled or rescinded within 60 days of being
entered; or
(viii) any of the Security Documents ceases to be in full force and
effect or any of the Security Documents ceases to give the Trustee the
Liens, rights, powers and privileges purported to be created thereby; or
(ix) the occurrence of a Change of Control; or
(x) on or prior to the Fifth Anniversary, (A) the sale, transfer or
other disposition by the Issuers and their Restricted Subsidiaries of all
or substantially all of the Collateral located at or used in connection
with the St. Eustatius Facility or Point Tupper Facility, (B) all or
substantially all of the Collateral located at the St. Eustatius Facility
or Point Tupper Facility is Destroyed or is subject to a Taking or (C) the
Issuers and their Restricted Subsidiaries consummate Asset Sales with a
fair market value in excess of $100 million in the aggregate, provided
that such Event of Default may be cured by the Issuers making an Offer to
Purchase in respect of the maximum principal amount of Securities that may
be purchased (less any such net proceeds previously applied to an Offer to
Purchase) out of the net proceeds received from the events specified in
clauses (A)-(C) above; provided further that such Offer to Purchase shall
be made within 60 days of the event specified above at a price of 105%
(100% with respect to clause (B) above) of the principal amount of the
Securities, plus accrued and unpaid interest, if any, thereon, and
otherwise in accordance with the procedures set forth in Section 4.15(e);
or
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(xi) an Issuer or any Subsidiary Guarantor (a) admits in writing its
inability to pay its debts generally as they become due, (b) commences a
voluntary case or proceeding under any Bankruptcy Law with respect to
itself, (c) consents to the entry of a judgment, decree or order for
relief against it in an involuntary case or proceeding under any
Bankruptcy Law, (d) consents to the appointment of a Custodian (as defined
below) of it or for substantially all of its property, (e) consents to or
acquiesces in the institution of a bankruptcy or an insolvency proceeding
against it, (f) makes a general assignment for the benefit of its
creditors or (g) takes any partnership or corporate action, as the case
may be, to authorize or effect any of the foregoing; or
(xii) a court of competent jurisdiction enters a judgment, decree or
order for relief in respect of an Issuer or any Subsidiary Guarantor in an
involuntary case or proceeding under any Bankruptcy Law, which shall (a)
approve as properly filed a petition seeking reorganization, arrangement,
adjustment or composition in respect of an Issuer or any Subsidiary
Guarantor, (b) appoint a Custodian of an Issuer or a Subsidiary Guarantor
or for substantially all of any of their property or (c) order the
winding-up or liquidation of its affairs; and such judgment, decree or
order shall remain unstayed and in effect for a period of 60 consecutive
days; or
(xiii) a court of competent jurisdiction in the Netherlands Antilles
grants to an Issuer or any Subsidiary Guarantor a suspense of payment
("surs??ance van betaling") or declares an Issuer or any Subsidiary
Guarantor bankrupt ("in staat van faillissement verklaard").
For purposes of this Article Six: the term "Custodian" means any
receiver, interim receiver, receiver and manager, trustee, assignee, liquidator,
sequestrator or similar official charged with maintaining possession or control
over property for one or more creditors, whether under any Bankruptcy Law or
otherwise.
SECTION 6.02. Acceleration.
If an Event of Default (other than an Event of Default specified in
clause (ix) or (x) above or an Event of Default specified in clause (xi), (xii)
or (xiii) above involving either of the Issuers), shall have occurred and be
continuing under this Indenture, or an Event of Default specified in clause (ix)
above shall occur and be continuing and the Issuers (or a third party) shall
fail to make a Change of Control Offer at the times and in the manner specified
under Section 6.14, or an Event of Default specified in clause (x) above shall
occur and be continuing and
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the Issuers shall fail to make an Offer to Purchase at the time and in the
manner specified therein, the Trustee by written notice to Statia, or the
Holders of at least 25% in aggregate principal amount of the Securities then
outstanding by written notice to Statia and the Trustee, may declare all amounts
owing under the Securities to be due and payable immediately. Upon such
declaration of acceleration, the aggregate principal amount of, premium, if any,
and interest on the outstanding Securities shall immediately become due and
payable. If an Event of Default specified in clause (xi), (xii) or (xiii) above
with respect to an Issuer occurs and is continuing, then the principal amount
of, premium, if any, and accrued interest on, all the Securities shall ipso
facto become and be immediately due and payable without any declaration or other
act on the part of the Trustee or any Holder of Securities.
SECTION 6.03. Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may
(and, at the direction of the Holders of a majority of the aggregate principal
amount of outstanding Securities, subject to Section 7.02(f), shall) (x) pursue
any available remedy by proceeding at law or in equity to collect the payment of
principal of or interest on the Securities or to enforce the performance of any
provision of the Securities, this Indenture, the Security Documents or the
Guarantees and (y) pursue any available remedy by proceeding at law or in equity
to enforce the performance of any provision of the Security Documents.
The Trustee may maintain a proceeding even if it does not possess
any of the Securities or does not produce any of them in the proceeding. A delay
or omission by the Trustee, or any Securityholder in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative to the
extent permitted by law.
Each Holder, by accepting a Security, acknowledges that the exercise
of remedies by the Trustee with respect to the Collateral is subject to the
terms and conditions of the Security Documents and the proceeds received upon
realization of the Collateral shall be applied by the Trustee in accordance with
the Intercreditor Agreements and Section 6.10 of this Indenture.
SECTION 6.04. Waiver of Past Defaults.
Subject to Sections 6.07 and 9.02, the Holders of not less than a
majority in aggregate principal amount of the outstanding Securities may on
behalf of the Holders of all the Securities waive any past Defaults under this
Indenture, except a Default in the payment of the principal of, premium, if any,
or
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interest on any Security. The Issuers shall deliver to the Trustee an Officers'
Certificate stating that the requisite percentage of Holders have consented to
such waiver and attaching copies of such consents upon which the Trustee may
conclusively rely.
SECTION 6.05. Control by Majority.
The Holders of not less than a majority in principal amount of the
outstanding Securities may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on it hereunder or under the Security Documents. Subject to
Section 7.01, however, the Trustee may refuse to follow any direction that
conflicts with any law, this Indenture or the Security Documents, that the
Trustee determines may be unduly prejudicial to the rights of another Holder of
Securities, or that may involve the Trustee in personal liability; provided that
the Trustee may take any other action deemed proper by it which is not
inconsistent with such direction.
In the event the Trustee takes any action or follows any direction
pursuant to this Indenture, the Trustee shall be entitled to indemnification
from the Issuers satisfactory to it in its sole discretion against any loss,
liability, cost or expense caused by taking such action or following such
direction.
SECTION 6.06. Limitation on Suits.
A Holder of Securities may not pursue any remedy with respect to
this Indenture, the Security Documents, the Guarantees or the Securities unless:
(1) the Holder gives to the Trustee written notice of a continuing
Event of Default;
(2) the Holder or Holders of at least 25% in principal amount of the
outstanding Securities (or, in the case of any remedy under the Security
Documents only, a majority in principal amount of outstanding Securities)
make a written request to the Trustee to pursue the remedy;
(3) such Holder or Holders offer and, if requested, provide to the
Trustee indemnity or security satisfactory to the Trustee against any
loss, liability or expense;
(4) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer and, if requested, the
provision of indemnity or security; and
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(5) during such 60-day period the Holder or Holders of a majority in
principal amount of the outstanding Securities do not give the Trustee a
direction which, in the opinion of the Trustee, is inconsistent with the
request.
A Holder of Securities may not use this Indenture to prejudice the
rights of another Holder of Securities or to obtain a preference or priority
over such other Holder of Securities.
SECTION 6.07. Rights of Holders to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of
any Holder to receive payment of principal of or premium, if any, and interest
on a Security, on or after the respective due dates expressed in such Security,
or to bring suit for the enforcement of any such payment on or after such
respective dates, shall not be impaired or affected without the consent of the
Holder.
SECTION 6.08. Collection Suit by Trustee.
If an Event of Default specified in clause (i) or (ii) of Section
6.01 occurs and is continuing, the Trustee may recover judgment in its own name
and as trustee of an express trust against the Issuers or any other obligor on
the Securities for the whole amount of principal, accrued interest and other
amounts remaining unpaid, together with interest on overdue principal and, to
the extent that payment of such interest is lawful, interest on overdue
installments of interest, in each case at the rate per annum borne by the
Securities and such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
SECTION 6.09. Trustee May File Proofs of Claim.
The Trustee may file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses, legal
fees, disbursements and advances of the Trustee, and its agents, nominees,
custodians and counsel, and any other amounts due to the Trustee under Section
7.07) and the Holders of Securities allowed in any judicial proceedings relating
to the Issuers and the Subsidiary Guarantors, their creditors or their property
and shall be entitled and empowered to collect and receive any monies or other
property payable or deliverable on any such claims and to distribute the same,
and any Custodian in any such judicial proceedings is hereby authorized by each
Holder of Securities to make such payments to the Trustee and, in the event that
the Trustee shall consent to the making of such payments directly to
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the Holders of Securities, to pay to the Trustee any amount due to it for the
reasonable compensation, expenses, legal fees, disbursements and advances of the
Trustee and its agents, nominees, custodians and counsel, and any other amounts
due the Trustee under Section 7.07. Nothing herein contained shall be deemed to
authorize the Trustee to authorize or consent to or accept or adopt on behalf of
any Holder of Securities any plan of reorganization, arrangement, adjustment or
composition affecting the Securities or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Holder of
Securities in any such proceeding.
SECTION 6.10. Priorities.
If the Trustee collects any money or property pursuant to this
Article Six, it shall pay out the money or property in the following order:
First: to the Trustee for amounts due under Section 7.07;
Second: if the Holders of Securities are forced to proceed against
the Issuers or a Subsidiary Guarantor or any other obligor on the
Securities directly without the Trustee, to such Holders for their
collection costs;
Third: to Holders of Securities for amounts due and unpaid on the
Securities for interest, ratably, without preference or priority of any
kind, according to the amounts due and payable on the Securities for
interest;
Fourth: to Holders of Securities for amounts due and unpaid on the
Securities for Additional Amounts, Reimbursement Payments and Liquidated
Damages, in each case, ratably, without preference or priority of any
kind, according to amounts due and payable on the Securities for
Additional Amounts, Reimbursement Payments and Liquidated Damages;
Fifth: to Holders of Securities for amounts due and unpaid on the
Securities for principal, ratably, without preference or priority of any
kind, according to amounts due and payable on the Securities for
principal; and
Sixth: to the Issuers or the Subsidiary Guarantors, as their
respective interests may appear;
provided, however, that in the event any Additional Lender Intercreditor
Agreement shall be in effect at the time of any payment contemplated under this
Section, the Trustee shall effect such payment in the manner set forth in
Section 5 of each such Additional Lender Intercreditor Agreement.
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The Trustee, upon prior notice to the Issuers, may fix a record date
and payment date for any payment to Holders of Securities pursuant to this
Section 6.10.
SECTION 6.11. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees and expenses, against any party litigant in the suit, having due
regard to the merits and good faith of the claims or defenses made by the party
litigant. This Section 6.11 does not apply to a suit by the Trustee, a suit by a
Holder of Securities pursuant to Section 6.07, or a suit by a Holder or Holders
of more than 10% in principal amount of the outstanding Securities.
SECTION 6.12. Rights and Remedies Cumulative.
No right or remedy herein conferred upon or reserved to the Trustee
or to the Holders is intended to be exclusive of any other right or remedy, and
every remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 6.13. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Security
to exercise any right or remedy accruing upon any Event of Default shall impair
any such right or remedy or constitute a waiver of any such Event of Default or
an acquiescence therein. Every right and remedy given by this Article VI or by
law to the Trustee or to the Holders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the Holders, as the case
may be.
SECTION 6.14. Change of Control.
(a) The Securities may not be accelerated pursuant to Section 6.1
hereof following an Event of Default under Section 6.1(ix) hereof, and such
Event of Default shall be cured, if the Issuers complies with the provisions of
this Section 6.14. Such Event of Default may be cured if, within 30 days after
the occurrence of the Change of Control, an offer to all Holders of Securities
to purchase (a "Change of Control Offer") all
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outstanding Securities properly tendered pursuant to such offer is made and,
within 60 days after the occurrence of the Change of Control, all Securities
properly tendered pursuant to such offer are accepted for purchase for a cash
price in U.S. Legal Tender (the "Change of Control Purchase Price") equal to
101% of the principal amount of the Securities, plus accrued and unpaid
interest, if any, to the Change of Control Purchase Date. Failure to mail the
notice on the date specified below or to have satisfied the foregoing condition
precedent by the date that the notice is required to be mailed shall in any
event constitute a covenant Default under Section 6.01(iv).
(b) In order to effect a Change of Control Offer, the Issuers shall
within 30 days after the occurrence of the Change of Control mail to each Holder
of Securities (with a copy to the Trustee), a copy of the Change of Control
Offer. The Change of Control Offer shall remain open from the time of mailing
for at least 20 Business Days and until the close of business on the third
Business Day prior to the Change of Control Purchase Date. The notice, which
shall govern the terms of the Change of Control Offer, shall include such
disclosures as are required by law and shall state:
(i) the date of such Change of Control and, briefly, the events
causing such Change of Control;
(ii) that the Change of Control Offer is being made pursuant to this
Section 6.14 and that all Securities tendered in the Change of Control
Offer will be accepted for payment;
(iii) the Change of Control Purchase Price for each Security, the
date on which the Securities shall be purchased (such purchase date being
the "Change of Control Purchase Date"), the last date on which the Change
of Control Purchase Notice must be given, the date on which the Change of
Control Offer expires and the names and addresses of any Paying Agent and
the offices or agencies maintained by the Issuers for such purpose in The
City of New York;
(iv) that any Security not tendered for payment will continue to
accrue interest in accordance with the terms thereof;
(v) that, unless the Issuers shall default in the payment of the
Change of Control Purchase Price, any Security accepted for payment
pursuant to the Change of Control Offer shall cease to accrue interest
after the Change of Control Purchase Date;
(vi) that Holders electing to have Securities purchased pursuant to
a Change of Control Offer will be
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required to surrender their Securities to the Paying Agent at the address
specified in the notice prior to 5:00 p.m., New York City time, on the
third Business Day immediately preceding the Change of Control Purchase
Date and, except in the case of a Global Security, must complete any form
letter of transmittal (the "Change of Control Purchase Notice") proposed
by the Issuers and acceptable to the Trustee and the Paying Agent;
(vii) that Holders will be entitled to withdraw their election if
the Paying Agent receives, not later than 5:00 p.m., New York City time,
on the Business Day immediately preceding the Change of Control Purchase
Date, a telex or facsimile transmission (confirmed by overnight delivery
of the original thereof) or letter setting forth the name of the Holder,
the principal amount of Securities the Holder delivered for purchase, the
Security certificate number (if any) and a statement that such Holder is
withdrawing his election to have such Securities purchased;
(viii) that Holders whose Securities are purchased only in part will
be issued Securities equal in principal amount to the unpurchased portion
of the Securities surrendered;
(ix) the instructions that Holders must follow in order to tender
their Securities and the procedures for withdrawing a Change in Control
Purchase Notice; and
(x) information concerning the business of the Issuers, the most
recent annual and quarterly reports of the Issuers filed with the
Commission pursuant to the Exchange Act (or, if the Issuers are not
required to file any such reports with the Commission, the comparable
reports prepared pursuant to Section 4.10), a description of material
developments in the Issuers' business, information with respect to pro
forma historical financial information after giving effect to such Change
of Control and such other information concerning the circumstances and
relevant facts regarding such Change of Control and Change of Control
Offer as would be material to a Holder of Securities in connection with
the decision of such Holder as to whether or not it should tender
Securities pursuant to the Change of Control Offer, including, but not
limited to, the events causing such Change of Control and the date such
Change of Control is deemed to have occurred.
(c) On the Change of Control Purchase Date, the Issuers shall (i)
accept for payment Securities or portions thereof tendered pursuant to the
Change of Control Offer, (ii) deposit with the Paying Agent money in United
States dollars, in immediately available funds, sufficient to pay the
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Change of Control Purchase Price of all Securities or portions thereof so
tendered and accepted (including any Additional Amounts or Reimbursement
Payments payable in respect thereof) and (iii) deliver to the Trustee the
Securities so accepted together with an Officers' Certificate setting forth the
Securities or portions thereof tendered to and accepted for payment by the
Issuers. The Paying Agent shall promptly disburse or deliver to the Holders of
Securities so accepted payment in an amount equal to such Change of Control
Purchase Price, and the Trustee shall promptly authenticate and mail or deliver
to such Holders a new Security equal in principal amount to any unpurchased
portion of each Security surrendered. Any Securities not so accepted shall be
promptly mailed or delivered by the Issuers to the Holder thereof. The Issuers
will publicly announce the results of the Change of Control Offer not later than
the first Business Day following the Change of Control Purchase Date.
Notwithstanding the foregoing provisions of this Section 6.14, the Issuers shall
not be required to make a Change of Control Offer in order to satisfy the
requirements of this Section 6.14 if a third party makes the Change of Control
Offer in the manner, at the times and otherwise in full compliance with the
requirements applicable to a Change of Control Offer made by the Issuers and
purchases all Securities properly tendered and not validly withdrawn pursuant to
such Change of Control Offer; provided that any such third party shall be
subject to Section 4.23 in respect of any amounts paid by such third party
hereunder (for this purpose, Section 4.23 is modified by replacing "Issuers"
with the name of the third party) and such Event of Default shall be cured only
if such third party complies with Section 4.23 (as modified) or if the Issuers
satisfies such third party's obligations under such Section.
(d) The Issuers shall comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act, and any other securities laws
or regulations, including applicable laws or regulations of Canada or any
province thereof, in connection with the repurchase of Securities pursuant to a
Change of Control Offer. To the extent that the provisions of any securities
laws or regulations conflict with the provisions of this Section 6.14, the
Issuers shall comply with the applicable securities laws and regulations and
shall not be deemed to have breached their obligations under this Section 6.14
by virtue thereof.
For purposes of this Section 6.14, the Trustee shall act as Paying
Agent.
Prior to the commencement of a Change of Control Offer, the Issuers
shall deliver to the Trustee an Officers' Certificate and an Opinion of Counsel
(to the extent matters of law are involved) stating that all conditions
precedent to such Change of Control Offer have been complied with.
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ARTICLE SEVEN
TRUSTEE
SECTION 7.01. Duties of Trustee.
(a) If an Event of Default actually known to the Trustee (except in
the case of Sections 7.05 and 7.06, as used in this Article Seven, "Trustee"
shall mean the Trustee in its capacity as Trustee under this Indenture and the
Security Documents) has occurred and is continuing, the Trustee shall exercise
such of the rights and powers vested in it by this Indenture and the Security
Documents and use the same degree of care and skill in its exercise as a prudent
Person would exercise or use under the circumstances in the conduct of his own
affairs. Subject to such provisions, the Trustee shall be under no obligation to
exercise any of its rights or powers under this Indenture or the Security
Documents at the request of any Holder of Securities, unless such Holder shall
have offered to the Trustee security and indemnity satisfactory to it.
(b) Except during the continuance of an Event of Default actually
known to the Trustee:
(1) The Trustee need perform only those duties as are specifically
set forth herein and in the Security Documents and no others and no
implied covenants or obligations shall be read into this Indenture or the
Security Documents against the Trustee.
(2) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions and such
other documents furnished to the Trustee and conforming to the
requirements of this Indenture or the Security Documents. However, the
Trustee shall examine the certificates and opinions to determine whether
or not they conform to the requirements of this Indenture or the Security
Documents.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(1) This paragraph does not limit the effect of paragraph (b) of
this Section 7.01.
(2) The Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer of the
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Trustee unless it is proved that the Trustee was negligent in ascertaining
the pertinent facts.
(3) The Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.02 or 6.05.
(d) No provision of this Indenture or the Security Documents shall
require the Trustee to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties hereunder or under
the Security Documents or to take or omit to take any action under this
Indenture or under the Security Documents or take any action at the request or
direction of Holders of Securities if it shall have reasonable grounds for
believing that repayment of such funds is not assured to it or it does not
receive an indemnity satisfactory to it in its sole discretion against such
risk, liability, loss, fee or expense which might be incurred by it in
compliance with such request or direction.
(e) Every provision of this Indenture that in any way relates to the
Trustee is subject to this Section 7.01.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Issuers.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
SECTION 7.02. Rights of Trustee.
(a) The Trustee may conclusively rely and shall be protected in
acting or refraining from acting on any document believed by it to be genuine
and to have been signed or presented by the proper Person. The Trustee need not
investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate or an Opinion of Counsel, or both, which shall conform
to the provisions of Section 13.05. The Trustee shall not be liable for any
action it takes or omits to take in good faith in reliance on such certificate
or opinion.
(c) The Trustee may act through its attorneys, agents, custodians
and nominees and shall not be responsible for the misconduct or negligence of
any attorney, agent, custodian or nominee (other than such a Person who is an
employee of the Trustee) appointed with due care.
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(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it reasonably believes to be authorized or within
its rights or powers.
(e) The Trustee may consult with counsel and the advice or opinion
of such counsel as to matters of law shall be full and complete authorization
and protection from liability in respect of any action taken, omitted or
suffered by it hereunder in good faith and in accordance with the advice or
opinion of such counsel.
(f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture or the Security Documents at the
request, order or direction of any of the Holders pursuant to the provisions of
this Indenture, unless such Holders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities which may be
incurred therein or thereby.
(g) The Trustee shall not be deemed to have notice or knowledge of
any matter, including any Default or Event of Default, unless a Responsible
Officer assigned to and working in the Trustee's Corporate Trust Department has
actual knowledge thereof or unless written notice thereof is received by the
Trustee at its Corporate Trust Department and such notice references the
Securities generally, the Issuers or this Indenture.
SECTION 7.03. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Securities and may make loans to, accept deposits from or
perform services for and may otherwise deal with either of the Issuers, any of
their Subsidiaries or any of their respective Affiliates with the same rights it
would have if it were not Trustee. However, the Trustee is subject to the
provisions of Sections 7.10 and 7.11.
SECTION 7.04. Trustee's Disclaimer.
The Trustee shall not be responsible for and makes no representation
as to the validity or adequacy of this Indenture, the Securities or the Security
Documents or the Collateral covered thereby, it shall not be accountable for the
Issuers' use of the proceeds from the Securities, and it shall not be
responsible for any statement of the Issuers or the Subsidiary Guarantors in
this Indenture, the Securities, the Security Documents or any document issued in
connection with the sale of Securities or any statement in the Securities other
than the Trustee's certificate of authentication. The Trustee makes no
representations with respect to and shall not be responsible for
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the effectiveness or adequacy of this Indenture, any Security Document or any
Security Interest. The Trustee shall not be responsible for independently
ascertaining or maintaining such validity, if any, and shall be fully protected
in relying upon certificates and opinions delivered to it in accordance with the
terms of this Indenture or any Security Document.
SECTION 7.05. Notice of Default.
If a Default or an Event of Default occurs and is continuing and the
Trustee receives actual notice of such event, the Trustee shall mail to each
Holder of Securities, as their names and addresses appear on the list of Holders
of Securities described in Section 2.05, notice of the uncured Default or Event
of Default within 30 days after the Trustee receives such notice. Except in the
case of a Default or an Event of Default in payment of principal amount,
premium, if any, or interest on, any Security, including the failure to make
payment on (i) any Change of Control Purchase Date pursuant to a Change of
Control Offer or (ii) any Purchase Date pursuant to an Offer to Purchase, the
Trustee may withhold the notice if and so long as the board of directors, the
executive committee, or a trust committee of directors, of the Trustee in good
faith determines that withholding the notice is in the interest of the Holders
of Securities.
SECTION 7.06. Reports by Trustee to Holders.
This Section 7.06 shall not be operative as a part of this Indenture
until this Indenture is qualified under the TIA, and, until such qualification,
this Indenture shall be construed as if this Section 7.06 were not contained
herein.
Within 60 days after each May 15 of each year beginning with 1997,
the Trustee shall, to the extent that any of the events described in TIA ss.
313(a) occurred within the previous twelve months, but not otherwise, mail to
each Holder of Securities a brief report dated as of such date that complies
with TIA ss. 313(a). The Trustee also shall comply with TIA ss.ss. 313(b),
313(c) and 313(d).
A copy of each report at the time of its mailing to Holders of
Securities shall be mailed to the Issuers and filed with the Commission and each
securities exchange, if any, on which the Securities are listed.
The Issuers shall notify a Responsible Officer of the Trustee if the
Securities become listed on any securities exchange or of any delisting thereof.
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SECTION 7.07. Compensation and Indemnity.
The Issuers shall pay to the Trustee from time to time reasonable
compensation for its acceptance of this Indenture and its services hereunder or
under the Security Documents. The Trustee's compensation shall not be limited by
any law on compensation of a trustee of an express trust. The Issuers shall
reimburse the Trustee upon request for all reasonable disbursements, expenses
and advances (including reasonable fees and expenses of counsel) incurred or
made by it in addition to the compensation for its services, except any such
disbursements, expenses and advances as may be attributable to the Trustee's
negligence, bad faith or willful misconduct. Such expenses shall include the
reasonable compensation, legal fees, disbursements and expenses of the Trustee's
agents, accountants, experts, nominees, custodians and counsel and any taxes or
other expenses incurred by a trust created pursuant to Section 8.01 hereof.
The Issuers shall, jointly and severally, indemnify the Trustee, its
directors, officers and employees and each predecessor trustee for, and hold it
harmless against, any loss, liability or expense incurred by the Trustee without
negligence, bad faith or willful misconduct on its or their part arising out of
or in connection with the administration of this trust and the Trustee's duties
under this Indenture or the Security Documents, including the reasonable
expenses and attorneys' fees of defending themselves against any claim of
liability arising hereunder. The Trustee shall notify the Issuers promptly of
any claim asserted against the Trustee for which it may seek indemnity. However,
the failure by the Trustee to so notify the Issuers shall not relieve the
Issuers of its obligations hereunder. The Issuers shall defend the claim and the
Trustee shall cooperate in the defense (and may employ its own counsel) at the
Issuers' expense. The Issuers need not pay for any settlement made without their
written consent, which consent shall not be unreasonably withheld or delayed.
The Issuers need not reimburse any expense or indemnify against any loss or
liability incurred by the Trustee as a result of the violation of this Indenture
by the Trustee if such violation arose from the negligence, bad faith or willful
misconduct of the Trustee.
To secure the Issuers' payment obligations in this Section 7.07, the
Trustee shall have a senior Lien prior to the Securities against all money or
property held or collected by the Trustee, in its capacity as Trustee, other
than money held in trust to pay principal of and interest on particular
Securities.
When the Trustee incurs expenses or renders services after an Event
of Default specified in clause (xi), (xii) or (xiii) of Section 6.01 occurs, the
expenses (including the reasonable fees and expenses of its agents and counsel)
and the compensation for the services shall be preferred over the status
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of the Holders in a proceeding under any Bankruptcy Law and are intended to
constitute expenses of administration under any Bankruptcy Law. The Issuers'
obligations under this Section 7.07 and any claim arising hereunder shall
survive the resignation or removal of any Trustee, the discharge of the Issuers'
obligations pursuant to Article Eight, any rejection or termination under any
Bankruptcy Law and the termination of this Indenture.
SECTION 7.08. Replacement of Trustee.
The Trustee may resign at any time (subject to the further
provisions of this Section 7.08) by so notifying the Issuers in writing. The
Holders of a majority in principal amount of the outstanding Securities may
remove the Trustee by so notifying the Issuers and the Trustee in writing and
may appoint a successor trustee with the Issuers' consent. The Issuers may
remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged a bankrupt or an insolvent;
(3) a receiver or other public officer takes charge of the Trustee
or its property; or
(4) the Trustee becomes legally incapable of acting with respect to
its duties hereunder.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Issuers shall notify each Holder of
Securities of such event and shall promptly appoint a successor Trustee. Within
one year after the successor Trustee takes office, the Holders of a majority in
principal amount of the Securities may appoint a successor Trustee to replace
the successor Trustee appointed by the Issuers.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Issuers. Immediately after that,
the retiring Trustee shall transfer, after payment of all sums then owing to the
Trustee pursuant to Section 7.07, all property held by it as Trustee to the
successor Trustee, subject to the Lien provided in Section 7.07, the resignation
or removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture; provided, however, that no Trustee under this Indenture shall be
liable for any act or omission of any successor Trustee. A successor Trustee
shall mail notice of its succession to each Holder of Securities.
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If a successor Trustee does not take office within 30 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Issuers or the
Holders of at least 10% in principal amount of the outstanding Securities may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
If the Trustee fails to comply with Section 7.10, any Securityholder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
Any resignation or removal of the Trustee pursuant to this Indenture
shall be deemed to be a resignation or removal of the Trustee in its capacity as
such under each of the Security Documents and any appointment of a successor
Trustee pursuant to this Indenture shall, without any further act, deed or
conveyance, be deemed to be an appointment of such successor in all capacities
of the former Trustee under each of the Security Documents and such successor
shall assume all of the obligations of the Trustee pursuant to the Security
Documents; provided, however, that the former Trustee shall (i) execute and
deliver all documents, agreements or other instruments as shall be necessary to
transfer or assign all the claims, estates, properties, rights, powers, trusts,
duties, authority and title of the former Trustee hereunder and under the
Security Documents to the successor Trustee and (ii) deliver all Collateral held
by it or its agents to such successor.
Notwithstanding replacement of the Trustee pursuant to this Section
7.08, the Issuers' obligations under Section 7.07 shall continue for the benefit
of the retiring Trustee and the Issuers shall pay to any such replaced or
removed Trustee all amounts owed under Section 7.07 upon such replacement or
removal.
SECTION 7.09. Successor Trustee by Merger, Etc.
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation, the resulting, surviving or transferee corporation without any
further act shall, if such resulting, surviving or transferee corporation is
otherwise eligible hereunder, be the successor Trustee (and the successor to the
Trustee under each of the Security Documents). In case any Securities shall have
been authenticated, but not delivered, by the Trustee then in office, any
successor by merger, conversion or consolidation to such authenticating Trustee
may adopt such authentication and deliver the Securities so authenticated with
the same effect as if such successor Trustee had itself authenticated such
Securities.
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SECTION 7.10. Eligibility; Disqualification.
This Indenture shall always have a Trustee who satisfies the
requirement of TIA ss.ss. 310(a)(1) and 310(a)(5). The Trustee shall have a
combined capital and surplus of at least $50,000,000 as set forth in its most
recent published annual report of condition. The Trustee shall comply with TIA
ss. 310(b); provided, however, that there shall be excluded from the operation
of TIA ss. 310(b)(1) any indenture or indentures under which other securities,
or certificates of interest or participation in other securities, of the Issuers
are outstanding, if the requirements for such exclusion set forth in TIA Secton
310(b)(1) are met.
SECTION 7.11. Preferential Collection of Claims Against Issuers.
The Trustee, in its capacity as Trustee hereunder, shall comply with
TIA ss. 311(a), excluding any creditor relationship listed in TIA ss. 311(b). A
Trustee who has resigned or been removed shall be subject to TIA ss. 311(a) to
the extent indicated.
ARTICLE EIGHT
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 8.01. Termination of Issuers' Obligations.
This Indenture shall cease to be of further effect (except that the
Issuers' obligations under Sections 7.07 and 4.23 and the Trustee's and Paying
Agent's obligations under Section 8.03 shall survive) when all outstanding
Securities theretofore authenticated and issued have been delivered (other than
destroyed, lost or stolen Securities that have been replaced or paid) to the
Trustee for cancellation and the Issuers have paid all sums payable hereunder.
In addition, the Issuers may terminate all of the obligations of the Issuers and
the Subsidiary Guarantors under this Indenture and the Security Documents if:
(1) the Issuers irrevocably deposit in trust with the Trustee or, at
the option of the Trustee, with a trustee satisfactory to the Trustee and
the Issuers under the terms of an irrevocable trust agreement in form and
substance satisfactory to the Trustee, money or U.S. Government
Obligations sufficient to pay principal of, premium, if any, and interest
on the Securities to maturity and to pay all other sums payable by them
hereunder; provided that (i) the trustee of the irrevocable trust shall
have been irrevocably
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instructed to pay such money or the proceeds of such U.S. Government
Obligations to the Trustee and (ii) the Trustee shall have been
irrevocably instructed to apply such money or the proceeds of such U.S.
Government Obligations to the payment of said principal and interest with
respect to the Securities;
(2) the Issuers deliver to the Trustee an Officers' Certificate
stating that all conditions precedent to satisfaction and discharge of
this Indenture have been complied with, and an Opinion of Counsel to the
same effect;
(3) the Issuers have paid or caused to be paid all other sums
payable hereunder and under the Securities and the Security Documents by
the Issuers and the Subsidiary Guarantors;
(4) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit;
(5) each of the Issuers shall have delivered to the Trustee an
Opinion of Counsel to the effect that the trust funds will not be subject
to the effect of any applicable bankruptcy, insolvency, reorganization or
similar laws affecting creditors' rights generally or to the rights of any
creditor of the Issuers or any Subsidiary Guarantor other than those
continuing rights of the applicable Holders of Securities (or, if such
opinion of counsel is conditioned upon the expiration of a fixed period of
time, following such period);
(6) the Issuers shall have delivered to the Trustee an Opinion of
Counsel from nationally recognized counsel acceptable to the Trustee or a
tax ruling to the effect that the Holders of the Securities will not
recognize income, gain or loss for Federal income tax purposes as a result
of the Issuers' exercise of its option under this Section 8.01 and will be
subject to Federal income tax on the same amount and in the same manner
and at the same times as would have been the case if such option had not
been exercised; and
(7) the Issuers shall have delivered to the Trustee an opinion of
counsel in Canada and the Netherlands Antilles to the effect that Holders
will not recognize income, gain or loss for Canadian federal or provincial
tax or Netherlands Antilles tax, as the case may be, or other tax purposes
as a result of the Issuers' exercise of such rights and will be subject to
Canadian federal and provincial tax and Netherlands Antilles tax, as the
case may be, and other tax on the same amounts, in the same manner and at
the same time as would have been the case had the Issuers not exercised
such rights.
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Immediately after such event, or after the expiration of the period of time
referred to in the opinion of counsel referred to in clause (v) above; this
Indenture shall cease to be of further effect (except as provided in the next
succeeding paragraph), and the Trustee, on demand of the Issuers, shall execute
proper instruments acknowledging confirmation of and discharge under this
Indenture.
However, the Issuers' obligations in Sections 2.03, 2.04, 2.05,
2.06, 2.07, 2.10, 2.12, 2.13, 4.01, 4.02, 4.23, 6.07, Article Seven and the
Issuers', the Trustee's and Paying Agent's obligations in Section 8.03 shall
survive until the Securities are no longer outstanding. Thereafter, only the
Issuers's obligations in Sections 7.07 and 4.23 and the Trustee's and Paying
Agent's obligations in Section 8.03 and 8.04 shall survive. For the purposes of
applying Section 4.23, if the Trustee is required by law or by the
interpretation or administration thereof to withhold or deduct any amount for or
on account of any Taxes from any payment made from the trust fund described in
Section 8.01(l) under or with respect to the Securities, such payment shall be
deemed to have been made by the Issuers and the Issuers shall be deemed to have
been so required to withhold or deduct. Nothing contained in this Article Eight
shall abrogate any of the rights, obligations or duties of the Trustee under
this Indenture and the Security Documents.
After such irrevocable deposit made pursuant to this Section 8.01
and satisfaction of the other conditions set forth herein, the Trustee upon
request shall acknowledge in writing the discharge of the Issuers' obligations
under this Indenture except for those surviving obligations specified above.
In order to have money available on a payment date to pay principal
amount of, premium, if any, or interest on the Securities, the U.S. Government
Obligations shall be payable as to principal or interest on or before such
payment date in such amounts as will provide the necessary money. U.S.
Government Obligations shall not be callable at the issuer's option.
SECTION 8.02. Application of Trust Money.
The Trustee or a trustee satisfactory to the Trustee and the Issuers
shall hold in trust money or U.S. Government Obligations deposited with it
pursuant to Section 8.01. It shall apply the deposited money and the money from
U.S. Government Obligations through the Paying Agent and in accordance with this
Indenture to the payment of principal amount of, premium, if any, and interest
on the Securities.
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SECTION 8.03. Repayment to the Issuers.
The Trustee and the Paying Agent shall promptly pay to the Issuers
upon written request any excess money or securities held by them or if deposited
with the Trustee by any Subsidiary Guarantor, to such Subsidiary Guarantor at
any time.
The Trustee and the Paying Agent shall pay to the Issuers or any
Subsidiary Guarantor, as the case may be, upon written request any money held by
them for the payment of principal, premium, if any, or interest that remains
unclaimed for two years after the date upon which such payment shall have become
due; provided, however, that the Issuers shall have either caused notice of such
payment to be mailed to each Holder entitled thereto no less than 30 days prior
to such repayment or within such period shall have published such notice in a
financial newspaper of widespread circulation published in the City of New York.
After payment to the Issuers, Holders entitled to the money must look to the
Issuers for payment as general creditors unless an applicable abandoned property
law designates another Person, and all liability of the Trustee and such Paying
Agent with respect to such money shall cease.
SECTION 8.04. Reinstatement.
If the Trustee or Paying Agent is unable to apply any money or U.S.
Government Obligations in accordance with this Indenture by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, then
and only then the Issuers' and each Subsidiary Guarantor's and Pledgor's, if
any, obligations under this Indenture, the Securities and the Security Documents
shall be revived and reinstated as though no deposit had been made pursuant to
this Indenture until such time as the Trustee is permitted to apply all such
money or U.S. Government Obligations in accordance with this Indenture;
provided, however, that if the Issuers or the Subsidiary Guarantors or Pledgors,
as the case may be, have made any payment of principal amount of, premium, if
any, or interest on any Securities because of the reinstatement of their
obligations, the Issuers or the Subsidiary Guarantors or Pledgors, as the case
may be, shall be subrogated to the rights of the Holders of such Securities to
receive such payment from the money or U.S. Government Obligations held by the
Trustee or Paying Agent.
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ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. Without Consent of Holders.
The Issuers and the Subsidiary Guarantors (when authorized by Board
Resolutions), and the Trustee, together, may amend or supplement this Indenture,
the Securities and the Guarantees, without notice to or consent of any
Securityholder, and the Pledgors (when authorized by Board Resolutions), and the
Trustee, to the extent a party thereto, together, may amend or supplement the
Security Documents without notice to or consent of any Holder of Securities:
(1) to cure any ambiguity, defect or inconsistency;
(2) to evidence the succession in accordance with Article Five
hereof of another Person to an Issuer or a Subsidiary Guarantor and the
assumption by any such successor of the covenants of an Issuer or a
Subsidiary Guarantor herein and in the Securities or a Guarantee, as the
case may be;
(3) to provide for uncertificated Securities in addition to or in
place of certificated Securities;
(4) to make any other change that does not adversely affect the
rights of any Holders of Securities hereunder or thereunder;
(5) to mortgage, pledge or grant a security interest in favor of the
Trustee as additional security for the payment and performance of
obligations under this Indenture, the Securities and the Guarantees, in
any property or assets, including any which are required to be mortgaged,
pledged or hypothecated, or in which a security interest is required to be
granted, to the Trustee pursuant to the Security Documents or otherwise;
(6) to comply with any requirements of the Commission in connection
with the qualification of this Indenture under the TIA;
(7) to add or release any Subsidiary Guarantor or Pledgor strictly
in accordance with another provision of this Indenture or a provision of
the Security Documents expressly providing for such addition or release;
provided that each of the Issuers, the Subsidiary Guarantors and the Pledgors
party thereto has delivered to the Trustee an
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Opinion of Counsel and an Officers' Certificate, each stating that such
amendment or supplement complies with the provisions of this Section 9.01.
SECTION 9.02. With Consent of Holders.
Subject to Section 6.07, the Issuers and the Subsidiary Guarantors
(when authorized by Board Resolutions) and the Trustee, together, with the
written consent (which may include consents obtained in connection with a tender
offer or exchange offer for Securities) of the Holder or Holders of at least a
majority in aggregate principal amount of the outstanding Securities, may amend
or supplement this Indenture, the Securities or the Guarantees without notice to
any other Holders of Securities. Subject to Section 6.07, the Pledgors (when
authorized by Board Resolutions) and the Trustee, to the extent a party thereto,
together, with the consent of the Holder or Holders of at least a majority in
aggregate principal amount at maturity of the outstanding Securities, may amend
or supplement the Security Documents without notice to any other Holder of
Securities. Subject to Section 6.07, the Holder or Holders of a majority in
aggregate principal amount of the outstanding Securities may by written consent
(which may include consents obtained in connection with a tender offer for
Securities) waive any existing Default (other than any continuing Default or
Event of Default in the payment of the principal amount of, premium, if any, or
interest on Securities) under, or compliance by the Issuers with any provision
of, this Indenture or the Securities without notice to any other Holder of
Securities.
Without the consent of the Holders of at least 75% in principal
amount at maturity of the Securities then outstanding (including consents
obtained in connection with a tender offer or exchange offer for such
Securities), no waiver or amendment to this Indenture may make any change in the
provisions described in Section 6.14 or in the obligations of the Issuers to
make a Non-Collateral Asset Sale Offer or Proceeds Offer that adversely affects
the rights of any Holder of the Securities.
Without the consent of each Holder of Securities affected, however,
no such amendment, supplement or waiver, including a waiver pursuant to Section
6.04, may:
(1) change the principal amount of Securities whose Holders must
consent to an amendment, supplement or waiver of any provision of this
Indenture, the Securities, the Security Documents or the Guarantees;
(2) reduce the rate or change the time for payment of interest,
including default interest, on any Security;
(3) reduce the principal amount of any Security;
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(4) change the Final Maturity Date of any Security, affect the terms
of any scheduled payment of interest on or principal of the Securities, or
alter the redemption provisions contained in this Indenture or the
Securities in any manner adverse to any Holder;
(5) make any change in provisions of this Indenture protecting the
right of each Holder to receive payment of principal of and interest on
such Security on or after the due date thereof or to bring suit to enforce
such payment, or permitting Holders of a majority in principal amount of
the Securities to waive Defaults or Events of Default;
(6) make any changes in Section 6.04, 6.07 or this Section 9.02;
(7) make the principal of, or the interest on any Security payable
in money other than as provided for in this Indenture, the Securities and
the Guarantees as in effect on the date hereof;
(8) affect the ranking of the Securities or the Guarantees or affect
the priority of the claims of Holders of Securities in and to the
Collateral, in each case in any manner adverse to the Holders of the
Securities;
(9) make any change to this Indenture or the Securities that would
result in the Issuers being required to make any deduction or withholding
from payments made under or with respect to the Securities or adversely
affect the right of the Holders to receive Additional Amounts or
Reimbursement Payments as described in Section 4.23;
(10) release any Subsidiary Guarantor from any of its obligations
under its Guarantee or this Indenture otherwise than strictly in
accordance with the terms of this Indenture; or
(11) directly or indirectly have the effect of impairing the Lien on
the Collateral or permitting any release of Collateral from the Lien of
the Security Documents except as expressly contemplated by this Indenture.
It shall not be necessary for the consent of the Holders under this
Section 9.02 to approve the particular form of any proposed amendment,
supplement or waiver, but it shall be sufficient if such consent approves the
substance thereof.
After an amendment, supplement or waiver under this Section 9.02
becomes effective, the Issuers shall mail to the Holders of Securities affected
thereby a notice briefly
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describing the amendment, supplement or waiver. Any failure of the Issuers to
mail such notice, or any defect therein, shall not, however, in any way impair
or affect the validity of any such supplemental indenture.
SECTION 9.03. Compliance with TIA.
From the date on which this Indenture is qualified under the TIA,
every amendment, waiver or supplement of this Indenture, the Security Documents,
the Securities or the Guarantees shall comply with the TIA as then in effect and
to the extent applicable thereto.
SECTION 9.04. Revocation and Effect of Consents.
Until an amendment, waiver or supplement becomes effective, a
consent to it by a Holder of Securities is a continuing consent by the Holder
and every subsequent Holder of a Security or portion of a Security that
evidences the same debt as the consenting Holder's Security, even if notation of
the consent is not made on any Security. However, any such Holder or subsequent
Holder may revoke the consent as to his Security or portion of his Security by
notice to the Trustee or the Issuers received before the date on which the
Trustee receives an Officers' Certificate certifying that the Holders of the
requisite principal amount of Securities have consented (and not theretofore
revoked such consent) to the amendment, supplement or waiver.
The Issuers may, but shall not be obligated to, fix a record date
for the purpose of determining the Holders of Securities entitled to consent to
any amendment, supplement or waiver, which record date shall be at least 30 days
prior to the first solicitation of such consent. If a record date is fixed, then
notwithstanding the last sentence of the immediately preceding paragraph, those
Persons who were Holders of Securities at such record date (or their duly
designated proxies), and only those Persons, shall be entitled to revoke any
consent previously given, whether or not such Persons continue to be Holders
after such record date. No such consent shall be valid or effective for more
than 90 days after such record date.
After an amendment, supplement or waiver becomes effective, it shall
bind every Holder, unless it makes a change described in any of clauses (1)
through (11) of Section 9.02, in which case, the amendment, supplement or waiver
shall bind only each Holder of a Security who has consented to it and every
subsequent Holder of a Security or portion of a Security that evidences the same
debt as the consenting Holder's Security; provided that any such waiver shall
not impair or affect the right of any Holder to receive payment of principal of
and interest on a Security, on or after the respective due dates
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expressed in such Security, or to bring suit for the enforcement of any such
payment on or after such respective dates without the consent of such Holder.
SECTION 9.05. Notation on or Exchange of Securities.
If an amendment, supplement or waiver changes the terms of a
Security, the Trustee may require the Holder of the Security to deliver it to
the Trustee. The Trustee may place an appropriate notation on the Security about
the changed terms and return it to the Holder. Alternatively, if the Issuers or
the Trustee so determines, the Issuers in exchange for the Security shall issue
and the Trustee shall authenticate a new Security that reflects the changed
terms.
SECTION 9.06. Trustee to Sign Amendments, Etc.
The Trustee shall execute any amendment, supplement or waiver to any
agreement authorized pursuant to this Article Nine; provided that (i) the form
of any amendment, supplement or waiver with respect to the matters referred to
in clauses (1) through (11) of Section 9.02 shall be satisfactory to the Trustee
and (ii) the Trustee may, but shall not be obligated to, execute any such
amendment, supplement or waiver which affects its own rights, duties or
immunities under this Indenture or the Security Documents. The Trustee shall be
entitled to receive, and shall be fully protected in relying upon, an Opinion of
Counsel and an Officers' Certificate of the Issuers each stating, in addition to
the matters set forth in Section 13.04, that the execution of any amendment,
supplement or waiver authorized pursuant to this Article Nine is authorized or
permitted by this Indenture and constitutes the legal, valid and binding
obligations of the Issuers, the Subsidiary Guarantors or the Pledgors, as the
case may be, enforceable in accordance with its terms. Such Opinion of Counsel
shall be at the expense of the Issuers, and the Trustee shall have a Lien under
Section 7.07 for any such expense.
ARTICLE TEN
GUARANTEES
SECTION 10.01. Unconditional Guarantee.
Each Subsidiary Guarantor, jointly and severally, hereby
unconditionally guarantees (such guarantee to be referred to herein as a
"Guarantee") to each Holder of a Security authenticated and delivered by the
Trustee and to the Trustee and its successors and assigns that: (i) the
principal amount of, premium, if any, and interest on the Securities will be
promptly
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paid in full when due, subject to any applicable grace period, whether at
maturity, by acceleration or otherwise and interest on the overdue principal and
interest on any overdue interest, to the extent lawful, of the Securities and
all other Obligations of the Issuers to the Holders of the Securities or the
Trustee hereunder or thereunder will be promptly paid in full or performed, all
in accordance with the terms hereof and thereof; and (ii) in case of any
extension of time of payment or renewal of any Securities or of any such other
Obligations, the same will be promptly paid in full when due or performed in
accordance with the terms of the extension or renewal, subject to any applicable
grace period, whether at stated maturity, by acceleration or otherwise, subject,
however, in the case of clauses (i) and (ii) above, to the limitations set forth
in Section 10.03. Each Subsidiary Guarantor hereby agrees that its obligations
hereunder shall be unconditional, irrespective of the validity, regularity or
enforceability of the Securities or this Indenture, the absence of any action to
enforce the same, any waiver or consent by any Holder of the Securities with
respect to any provisions hereof or thereof, the recovery of any judgment
against the Issuers, and action to enforce the same or any other circumstance
which might otherwise constitute a legal or equitable discharge or defense of a
guarantor. Each Subsidiary Guarantor hereby waives diligence, presentment,
demand of payment, filing of claims with a court in the event of insolvency or
bankruptcy of the Issuers, any right to require a proceeding first against the
Issuers, protest, notice and all demands whatsoever and covenants that this
Guarantee will not be discharged except by complete performance of the
obligations contained in the Securities, this Indenture and in this Guarantee.
If any Holder of the Securities or the Trustee is required by any court or
otherwise to return to the Issuers or any Subsidiary Guarantor, or any
custodian, trustee, liquidator or other similar official acting in relation to
the Issuers or any Subsidiary Guarantor, any amount paid by the Issuers or any
Subsidiary Guarantor to the Trustee or such Holder, this Guarantee, to the
extent theretofore discharged, shall be reinstated in full force and effect.
Each Subsidiary Guarantor further agrees that, as between each Subsidiary
Guarantor, on the one hand, and the Holders of the Securities and the Trustee,
on the other hand, (x) the maturity of the obligations guaranteed hereby may be
accelerated as provided in Article Six for the purposes of this Guarantee,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the obligations guaranteed hereby, and (y) in the
event of any acceleration of such obligations as provided in Article Six, such
obligations (whether or not due and payable) shall forthwith become due and
payable by each Subsidiary Guarantor for the purpose of this Guarantee.
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SECTION 10.02. Severability.
In case any provision of this Article Ten or any Guarantee shall be
invalid, illegal or unenforceable, the validity, legality, and enforceability of
the remaining provisions hereof or thereof shall not in any way be affected or
impaired thereby.
SECTION 10.03. Limitation of Subsidiary Guarantors' Liability.
It is the intention of all parties hereto that the guarantee by each
Subsidiary Guarantor pursuant to its Guarantee not constitute a fraudulent
transfer or conveyance for purposes of any Bankruptcy Law, the Uniform
Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar
Federal, state or foreign law. To effectuate the foregoing intention, the
Holders of Securities and each Subsidiary Guarantor incorporated in one of the
States of the United States hereby irrevocably agree that the obligations of
such Subsidiary Guarantor under its Guarantee shall be limited to the maximum
amount as will, after giving effect to all other contingent and fixed
liabilities of such Subsidiary Guarantor and after giving effect to any
collections from or payments made by or on behalf of any other Subsidiary
Guarantor in respect of the obligations of such other Subsidiary Guarantor under
its Guarantee or pursuant to Section 10.04, result in the obligations of such
Subsidiary Guarantor under its Guarantee not constituting such fraudulent
transfer or conveyance.
SECTION 10.04. Contribution.
In order to provide for just and equitable contribution among the
Subsidiary Guarantors, the Subsidiary Guarantors agree, inter se, that in the
event any payment or distribution is made by any Subsidiary Guarantor (a
"Funding Subsidiary Guarantor") under its Guarantee, such Funding Subsidiary
Guarantor shall be entitled to a contribution from all other Subsidiary
Guarantors in a pro rata amount based on the Adjusted Net Assets (as defined
below) of each Subsidiary Guarantor (including the Funding Subsidiary Guarantor)
for all payments, damages and expenses incurred by that Funding Subsidiary
Guarantor in discharging the Issuers' obligations with respect to the Securities
or any other Subsidiary Guarantor's obligations with respect to its Guarantee.
"Adjusted Net Assets" of such Subsidiary Guarantor at any date shall mean the
lesser of (x) the amount by which the fair value of the property of such
Subsidiary Guarantor exceeds the total amount of liabilities, including, without
limitation, contingent liabilities (after giving effect to all other fixed and
contingent liabilities incurred or assumed on such date (other than liabilities
of such Subsidiary Guarantor under Indebtedness subordinated to such Subsidiary
Guarantor's Guarantee)), but
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excluding liabilities under the Guarantee, of such Subsidiary Guarantor at such
date and (y) the amount by which the present fair salable value of the assets of
such Subsidiary Guarantor at such date exceeds the amount that will be required
to pay the probable liability of such Subsidiary Guarantor on its debts (after
giving effect to all other fixed and contingent liabilities incurred or assumed
on such date and after giving effect to any collection from any Subsidiary of
such Subsidiary Guarantor in respect of the obligations of such Subsidiary under
its Guarantee, if any), excluding debt in respect of the Guarantee of such
Subsidiary Guarantor, as they become absolute and matured.
SECTION 10.05. Waiver of Subrogation.
Until all Guarantee Obligations are paid in full, each Subsidiary
Guarantor hereby irrevocably waives any claims or other rights which it may now
or hereafter acquire against the Issuers that arise from the existence, payment,
performance or enforcement of such Subsidiary Guarantor's obligations under its
Guarantee and this Indenture, including, without limitation, any right of
subrogation, reimbursement, exoneration, indemnification, and any right to
participate in any claim or remedy of any Holder of Securities against the
Issuers, whether or not such claim, remedy or right arises in equity, or under
contract, statute or common law, including, without limitation, the right to
take or receive from the Issuers, directly or indirectly, in cash or other
property or by set-off or in any other manner, payment or security on account of
such claim or other rights. If any amount shall be paid to any Subsidiary
Guarantor in violation of the preceding sentence and the Securities shall not
have been paid in full, such amount shall have been deemed to have been paid to
such Subsidiary Guarantor for the benefit of, and held in trust for the benefit
of, the Holders of the Securities, and shall forthwith be paid to the Trustee
for the benefit of such Holders to be credited and applied upon the Securities,
whether matured or unmatured, in accordance with the terms of this Indenture.
Each Subsidiary Guarantor acknowledges that it will receive direct and indirect
benefits from the financing arrangements contemplated by this Indenture and that
the waiver set forth in this Section 10.05 is knowingly made in contemplation of
such benefits.
SECTION 10.06. Execution of Guarantee.
To evidence its guarantee to the Holders of Securities set forth in
this Article Ten, each Subsidiary Guarantor hereby agrees to execute its
Guarantee in substantially the form included in the Securities, which shall be
endorsed on each Security ordered to be authenticated and delivered by the
Trustee. Each Subsidiary Guarantor hereby agrees that its Guarantee set forth in
this Article Ten shall remain in full
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force and effect notwithstanding any failure to endorse on each Security a
notation of such Guarantee. Each such Guarantee shall be signed on behalf of
each Subsidiary Guarantor by two Officers. Such signatures upon the Guarantee
may be by manual or facsimile signature of such officers and may be imprinted or
otherwise reproduced on the Guarantee, and in case any such officer who shall
have signed the Guarantee shall cease to be such officer before the Security on
which such Guarantee is endorsed shall have been authenticated and delivered by
the Trustee or disposed of by the Issuers, such Security nevertheless may be
authenticated and delivered or disposed of as though the Person who signed the
Guarantee had not ceased to be such officer of the Subsidiary Guarantor.
SECTION 10.07. Waiver of Stay, Extension or Usury Laws.
Each Subsidiary Guarantor covenants (to the extent that it may
lawfully do so) that it will not at any time insist upon, plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay or
extension law or any usury law or other law that would prohibit or forgive each
such Subsidiary Guarantor from performing its Guarantee as contemplated herein,
wherever enacted, now or at any time hereafter in force, or which may affect the
covenants or the performance of this Indenture; and (to the extent that it may
lawfully do so) such Subsidiary Guarantor hereby expressly waives all benefit or
advantage of any such law, and covenants that it will not hinder, delay or
impede the execution of any power herein granted to the Trustee, but will suffer
and permit the execution of every such power as though no such law had been
enacted.
ARTICLE ELEVEN
SECURITY DOCUMENTS
SECTION 11.01. Collateral and Security Documents.
(a) In order to secure the due and punctual payment of the
Securities, the Pledgors and the Trustee shall on the Issue Date enter into the
Security Documents to create the Security Interests and for related matters. The
Trustee and the Pledgors hereby agree that the Trustee holds the Collateral in
trust for its benefit, the benefit of the Holders and the benefit of the holders
of Additional Secured Indebtedness pursuant to the terms of the Security
Documents.
(b) Each Holder, by accepting a Security, agrees to all of the terms
and provisions of the Security Documents, as the same may be amended from time
to time pursuant to the provisions of the Security Documents and this Indenture.
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SECTION 11.02. Recording, Etc.
(a) The Issuers will, and will cause each other Pledgor to, take or
cause to be taken all action required or desirable to maintain, perfect,
preserve and protect the Security Interests in the Collateral granted by the
Security Documents, including, but not limited to, causing all financing
statements, Mortgages, other instruments of further assurance, including,
without limitation, continuation statements covering security interests in
personal property, and all mortgages securing purchase money obligations
delivered to the Trustee or to the trustee, mortgagee or other Holder of a
Permitted Lien under Section 11.04 to be promptly recorded, registered and
filed, and at all times to be kept recorded, registered and filed, and will
execute and file such financing statements and cause to be issued and filed such
continuation statements, all in such manner and in such places as may be
required by law fully to preserve and protect the rights of the Holders, the
holders of Additional Secured Indebtedness and the Trustee under this Indenture
and the Security Documents to all property comprising the Collateral.
The Issuers will from time to time promptly pay and discharge all
mortgage and financing and continuation statement recording and/or filing fees,
charges and Taxes relating to this Indenture and the Security Documents, any
amendments thereto and any other instruments of further assurance. Without
limiting the generality of the foregoing covenant, in the event at any time the
Trustee shall determine that additional mortgage recording, transfer or similar
Taxes are required to be paid to perfect or continue any Lien on any Real
Property in an amount at least equal to the fair market value from time to time
of such Real Property, the Issuers shall pay such Taxes promptly upon demand by
the Trustee. Notwithstanding the foregoing, the Trustee shall not have any duty
or obligation to ascertain whether any such Taxes are required to be paid at any
time, and the determination referred to in the preceding sentence shall only be
made by the Trustee upon receipt of written notice that such Taxes are due and
owing.
(b) The Issuers shall furnish or cause to be furnished
to the Trustee:
(i) at the time of execution and delivery of this Indenture,
Opinion(s) of Counsel substantially in the form of the Opinions to Counsel
delivered on the Issue Date to the Initial Purchaser;
(ii) at the time of execution and delivery of this Indenture, with
respect to each Mortgaged Property, a title Opinion of Counsel,
substantially to the effect that the Lien of the Mortgage encumbering such
Mortgaged Property is a valid first mortgage Lien on such Mortgaged
Property and
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fixtures thereon, subordinate only to those Liens specified in such
Mortgage as "Prior Liens";
(iii) within 30 days after the Issue Date, Opinion(s) of Counsel
either (a) substantially to the effect that, in the opinion of such
counsel, this Indenture, each Security Document and all other instruments
of further assurance or assignment have been properly recorded, registered
and filed to the extent necessary to perfect or create the Security
Interests created by each such Security Document and reciting the details
of such action, and stating that as to the Security Interests created
pursuant to each such Security Document, such recordings, registerings and
filings are the only recordings, registerings and filings necessary to
give notice thereof and that no re-recordings, re-registerings or
refilings are necessary to maintain such notice (other than as stated in
such opinion), or (b) to the effect that, in the opinion of such counsel,
no such action is necessary to perfect such Security Interests; and
(iv) within 30 days after November 27 in each year beginning with
November 27, 1997, an Opinion of Counsel, dated as of such date, either
(a) to the effect that, in the opinion of such counsel, such action has
been taken with respect to the recordings, registerings, filings,
re-recordings, re-registerings and refilings of all instruments of further
assurance as is necessary to maintain the Security Interests of each of
the Security Documents and reciting with respect to such Security
Interests the details of such action or referencing prior Opinions of
Counsel in which such details are given, and stating that all instruments
have been executed and/or filed that are necessary fully to preserve and
protect the rights of the Holders, the Trustee and the holders of
Additional Secured Indebtedness hereunder and under each of the Security
Documents with respect to the Security Interests, or (b) to the effect
that, in the opinion of such counsel, no such action is necessary to
maintain such Security Interests.
SECTION 11.03. Certain Dispositions of Collateral Without Release.
(a) Notwithstanding the provisions of Section 11.04, so long as no
Event of Default shall have occurred and be continuing, the Pledgors may,
without any requirement of release or consent by the Trustee:
(i) sell or otherwise dispose of any Permitted Equipment that may
be defective or may have become worn out or obsolete or is no longer used
or useful in the operation of the St. Eustatius Facility or Point Tupper
Facility;
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provided, however, that the aggregate fair market value of such equipment
does not exceed $500,000 and such equipment is sold in a commercially
reasonably manner to an unaffiliated third party;
(ii) grant rights-of-way and easements over or in respect of any
Real Property; provided, however, that such grant will not in any material
respect, in the reasonable opinion of the Board of Directors of the
relevant Pledgor, impair the usefulness of such property in the conduct of
the relevant Pledgor's business and will not be prejudicial to the
interests of the Holders;
(iii) alter, repair, replace, change the location or position of and
add to its plants, structures, machinery, systems, equipment, fixtures and
appurtenances; provided, however, that no change in the location of any
such Collateral subject to the Lien of any of the Security Documents shall
be made which (1) removes such property into a jurisdiction in which any
instrument required by law to preserve the Lien of any of the Security
Documents on such property, including all necessary instruments of further
assurance, has not been recorded, registered or filed in the manner
required by law to preserve the Lien of any of the Security Documents on
such property, (2) does not comply with the terms of this Indenture and
the Security Documents or (3) otherwise impairs the Lien of the Security
Documents;
(iv) subject to the provisions of the Security Documents, abandon,
terminate, cancel, release or make alterations in or substitutions of any
leases, contracts or of rights-of-way subject to the Lien of the Security
Documents; provided, however, that (i) any altered or substituted leases,
contracts or rights-of-way shall forthwith, without further action, be
subject to the Lien of the Security Documents to the same extent as those
previously existing and (ii) if the relevant Pledgor shall receive any
money or property in excess of such Pledgor's expenses in connection with
such termination, cancellation, release, alteration or substitution as
consideration or compensation for such termination, cancellation, release,
alteration or substitution, such money or property, to the extent it
exceeds $50,000 (in which case all of the money and property so received
and not just the portion in excess of $50,000 shall be subject to this
clause), forthwith upon its receipt by such Pledgor, shall be deposited
with the Trustee (unless otherwise required by a Prior Lien permitted
under the applicable Security Documents) as Trust Moneys subject to
disposition as provided in Article Twelve hereof or otherwise subjected to
the Lien of the Security Documents;
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(v) grant a non-exclusive license of any Patent, Trademark or
Copyright (each as defined in the relevant Security Document);
(vi) abandon any Patent, Trademark or Copyright where subsequent
applications relating to such Patent, Trademark or Copyright have been
filed with respect to similar subject matter or where the relevant
Pledgor, in its reasonable business judgment, concludes that such Patent,
Trademark or Copyright is no longer useful in the conduct of such
Pledgor's business;
(vii) surrender or modify any franchise, license or permit subject
to the Lien of any of the Security Documents which it may own or under
which it may be operating; provided, however, that, after the surrender or
modification of any such franchise, license or permit, the relevant
Pledgor shall still, in the reasonable opinion of the Board of Directors
of such Pledgor, be entitled, under some other or without any franchise,
license or permit, to conduct its business in the territory in which it is
then operating; and provided, further, that if such Pledgor shall be
entitled to receive any money or property in excess of such Pledgor's
expenses in connection with such surrender or modification as
consideration or compensation for such surrender or modification, such
money or property, to the extent that it exceeds $50,000 (in which case
all of the money and property so received and not just the portion in
excess of $50,000 shall be subject to this clause), forthwith upon its
receipt by such Pledgor, shall be deposited with the Trustee (unless
otherwise required by a Prior Lien as defined in, and permitted under, the
applicable Security Documents) as Trust Moneys subject to disposition as
provided in Article Twelve hereof, or otherwise subjected to the Lien of
the Security Documents;
(viii) subject to the provisions of the Security Documents, grant
leases or subleases in respect of any Real Property (other than Storage
Contracts) in the event that the relevant Pledgor determines, in its
reasonable business judgment, that such Real Property is no longer useful
in the conduct of such Pledgor's business and that such lease or sublease
would not be reasonably likely to have an adverse affect on the value of
the property subject thereto; provided, however, that any such lease or
sublease shall by its terms be subject and subordinate to the Lien, and
otherwise comply with the provisions, of the Mortgage affecting such Real
Property;
(ix) sell or otherwise dispose of Inventory and other Floating
Charge Collateral (as defined in the Mortgage encumbering the Mortgaged
Property in Canada) and modify,
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extend or renew, or compromise or settle any dispute or claim relating to,
or sell any Account Receivable, in each case in the ordinary course of
business consistent with prudent business practice;
(x) to release the Land Swap-Sale Parcel and the Option Parcel
from the Lien of the Mortgage encumbering the Real Property located in
Canada strictly in accordance with the other provisions of this Indenture
and the Security Documents expressly providing for such release; or
(xi) in connection with any sale of Lender Collateral in
accordance with the provisions of Section 5 of the Access Intercreditor
Agreement, to execute and deliver any and all instruments evidencing the
release of the Lien of the Security Documents on the Lender Collateral
described to be sold, transferred or otherwise disposed of in the Pledge
Termination Notice delivered by any New Bank Lender in accordance with the
provisions of the Access Intercreditor Agreement;
(b) In the event that a Pledgor has sold, exchanged, or otherwise
disposed of or proposes to sell, exchange or otherwise dispose of any portion of
the Collateral which under the provisions of this Section 11.03 may be sold,
exchanged or otherwise disposed of by such Pledgor without any release or
consent of the Trustee, and such Pledgor requests the Trustee to furnish a
written disclaimer, release or quitclaim of any interest in such property under
any of the Security Documents, the Trustee shall promptly execute such an
instrument (in recordable form, where appropriate) upon delivery to the Trustee
of (i) an Officers' Certificate by such Pledgor reciting the sale, exchange or
other disposition made or proposed to be made and describing in reasonable
detail the property affected thereby, and stating that such property is property
which by the provisions of this Section 11.03 may be sold, exchanged or
otherwise disposed of or dealt with by such Pledgor without any release or
consent of the Trustee and (ii) an Opinion of Counsel stating that the sale,
exchange or other disposition made or proposed to be made was duly taken by such
Pledgor in conformity with a designated subsection of Section 11.03(a) and that
the execution of such written disclaimer, release or quitclaim is appropriate
under this Section 11.03.
Any disposition of Collateral made in strict compliance with the
provisions of this Section 11.03 shall be deemed not to impair the Security
Interests in contravention of the provisions of this Indenture.
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SECTION 11.04. Release of Collateral.
(1) In addition to their rights under Section 11.03, the Issuers
shall have the right to obtain a release of items of Collateral (other than
Trust Moneys (excluding Trust Moneys constituting Net Proceeds from an Asset
Sale), which Trust Moneys are subject to release from the Lien of the Security
Documents as provided under Article Twelve) (the "Released Interests") subject
to an Asset Sale and the Trustee shall release the Released Interests from the
Lien of the Security Documents and reconvey the Released Interests to the
appropriate Pledgor, upon compliance with the condition that the appropriate
Pledgor deliver to the Trustee the following:
(a) Release Notice. A notice (each, a "Release Notice") from the
appropriate Pledgor requesting the release of the Released Interests (i)
describing the proposed Released Interests, (ii) except with respect to
the Land Swap, specifying the value of such Released Interests on a date
within 60 days of such notice (the "Valuation Date"), (iii) except with
respect to the Land Swap, stating that the purchase price to be received
is at least equal to the fair market value of the Released Interests, (iv)
stating that the release of such Released Interests will not interfere
with the Trustee's ability to realize the value of the remaining
Collateral and will not impair the maintenance and operation of the
remaining Collateral, (v) confirming the sale of, or an agreement to sell,
such Released Interests in a bona fide sale to a Person that is not an
Affiliate of any of the Issuers or Subsidiary Guarantors or, in the event
that such sale is to a Person that is an Affiliate, confirming that such
sale is made in compliance with the provisions of Section 4.12, (vi)
certifying that such Asset Sale complies with the terms and conditions of
this Indenture with respect thereto, (vii) in the event there is to be a
substitution of property for the Collateral subject to the Asset Sale,
specifying the property intended to be substituted for the Collateral to
be disposed of and (viii) accompanied by a counterpart of the instruments
proposed to give effect to the release fully executed and acknowledged (if
applicable) by all parties thereto other than the Trustee;
(b) Officers' Certificate. An Officers' Certificate of the
appropriate Pledgor stating that (i) such Asset Sale covers only the
Released Interests and complies with the terms and conditions of this
Indenture with respect to Asset Sales, (ii) all Net Proceeds, if any, from
the sale of any of the Released Interests will be applied pursuant to the
provisions of this Indenture in respect of Asset Sales, (iii) except with
respect to the Land Swap, there is no Default or Event of Default in
effect or continuing on the
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date thereof or the date of such Asset Sale, (iv) except with respect to
the Land Swap, the release of the Collateral will not result in a Default
or Event of Default under this Indenture and (v) all conditions precedent
in this Indenture and in the Security Documents relating to the release of
the Collateral in question have been complied with;
(c) Delivery of Net Proceeds and Other Property. The Net Proceeds
and other property (other than Cash or Financial Instruments) received as
consideration from the Asset Sale shall be delivered to the Trustee,
together with such instruments of conveyance, assignment and transfer, if
any, as may be necessary, in the Opinion of Counsel, to subject to the
Lien of this Indenture and the Security Documents all the right, title and
interest of the Pledgors in and to such property;
(d) Opinions of Counsel. Except with respect to the Land Swap, in
connection with which the appropriate Pledgor shall deliver the Opinions
of Counsel required by Section 1.26 of the Mortgage encumbering the Real
Property located in Nova Scotia, Canada, one or more Opinions of Counsel
which, when considered collectively, shall be substantially to the effect
(i) that any obligation included in the consideration for any Released
Interest and to be received by the Trustee pursuant to Section 11.04(d) is
a valid and binding obligation enforceable in accordance with its terms,
subject to such customary exceptions regarding equitable principles,
creditors' rights generally and bankruptcy as shall be reasonably
acceptable to the Trustee in its sole judgment, and is effectively pledged
under the Security Documents, (ii) that any Lien granted by a purchaser to
secure a purchase money obligation is a fully perfected Lien and such
instrument granting such Lien is enforceable in accordance with its terms,
(iii) either (x) that such instruments of conveyance, assignment and
transfer as have been or are then delivered to the Trustee are sufficient
to subject to the Lien of the Security Documents all the right, title and
interest of the Issuers in and to any property (other than Cash or
Financial Instruments) and obligations, that is included in the
consideration for the Released Interests and is to be received by the
Trustee pursuant to Section 11.04(d), or (y) that no instruments of
conveyance, assignment or transfer are necessary for such purpose, (iv)
that the Pledgor has corporate power to own all property included in the
consideration for such release, and (v) that all conditions precedent
herein and under any of the Security Documents relating to the release of
such Collateral have been complied with;
(e) Regarding Real Property. If the Collateral to be released is (i)
only a portion of a discrete parcel of Real
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Property, an Opinion of Counsel confirming that after such release, the
Lien of the applicable Mortgage continues unimpaired as a first priority
perfected Lien upon the remaining Mortgaged Property subject only to those
Liens permitted by the applicable Mortgage; and (ii) except with respect
to the Land Swap, Mortgaged Property having a fair value in excess of
$250,000, the Issuers shall have delivered to the Trustee a Survey
depicting the Real Property to be released; and
(f) Other Documents. All documentation required by the Trust
Indenture Act, if any, prior to the release of Collateral by the Trustee
and, in the event there is to be a substitution of property for the
Collateral subject to the Asset Sale, all documentation necessary to
subject such new Collateral to the Lien of the Security Documents.
In connection with any release, the Issuers shall (i) execute,
deliver and record or file and obtain such instruments as the Trustee may
reasonably require, including, without limitation, amendments to the Security
Documents and (ii) deliver to the Trustee such evidence of the satisfaction of
the applicable provisions of this Indenture and the Security Documents as the
Trustee may reasonably require.
Notwithstanding the foregoing provisions of this Section 11.04, the
Issuers may obtain a release of any Net Proceeds required to purchase Securities
pursuant to an Offer to Purchase on a Purchase Date (including an Offer to
Purchase made in order to cure an Event of Default of the type specified in
Section 6.01(ix) or (x)) by directing the Trustee in writing to cause to be
applied such Net Proceeds to such purchase in accordance with Section 4.15 and
Article Twelve.
Except with respect to the Land Swap, in case an Event of Default
shall have occurred and be continuing, the Pledgors, while in possession of the
Collateral (other than Cash, Financial Instruments, securities and other
personal property held by, or required to be deposited or pledged with, the
Trustee hereunder or under any Security Document or with the trustee, mortgagee
or other holder of a Prior Lien permitted by the Security Documents), may do any
of the things enumerated in this Section 11.04 only if the Trustee, in its
discretion, or the Holders of a majority in aggregate principal amount of the
Securities outstanding, by appropriate action of such Holders, shall consent to
such action, in which event any certificate filed under this Section 11.04 shall
omit the statement to the effect that no Event of Default has occurred and is
continuing. This paragraph shall not apply, however, during the continuance of
an Event of Default of the type specified in Section 6.01(i) or (ii).
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All Cash or Financial Instruments received by the Trustee pursuant
to this Section 11.04 shall be held by the Trustee as Trust Moneys subject to
application as provided in this Section 11.04 or in Article Twelve, as
appropriate. All purchase money and other obligations received by the Trustee
pursuant to this Section 11.04 shall be held by the Trustee as Collateral.
Any releases of Collateral made in strict compliance with the
provisions of this Section 11.04 shall be deemed not to impair the Security
Interests created by the Security Documents in favor of the Trustee, in
contravention of the provisions of this Indenture.
SECTION 11.05. Eminent Domain and Other Governmental Takings.
Should any of the Collateral be subject to a Taking, the Trustee
shall release the property so taken or purchased, but only upon receipt by the
Trustee of the following:
(a) an Officers' Certificate of the Issuers stating that such
property has been Taken and the amount of the award or payment therefor,
and that all conditions precedent herein provided for relating to such
release have been complied with;
(b) the award or payment for such property (net of the costs of
obtaining such award or payment) shall be exchanged for Financial
Instruments and deposited with the Trustee, to be held as Trust Moneys
subject to the disposition thereof pursuant to Article Twelve; provided,
however, that, in lieu of all or any part of such award or payment, the
applicable Pledgor shall have the right to deliver to the Trustee a
certificate of the trustee, mortgagee or other holder of a Prior Lien on
all or any part of the property to be released, stating that such award or
payment (net of the costs of obtaining such award or payment), or a
specified portion thereof, has been deposited with such trustee, mortgagee
or other holder pursuant to the requirements of such Prior Lien, in which
case the balance of the award, if any, shall be delivered to the Trustee;
and
(c) an Opinion of Counsel substantially to the effect:
(1) that such property has been Taken by eminent domain, or
has been sold pursuant to the exercise of a right vested in a
governmental authority to purchase, or to designate a purchaser or
order a sale of, such property;
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(2) in the case of any Taking by eminent domain, that the
award for the property so taken has become final or that the Board
of Directors of the applicable Pledgor has determined that an appeal
from such award is not advisable in the interests of the Issuers or
any other Pledgor, as applicable, or the Holders of the Securities;
(3) in the case of any such sale, that the payment with
respect to the property so sold is not less than the amount to which
the applicable Pledgor is legally entitled under the terms of such
right to purchase or designate a purchaser, or under the order or
orders directing such sale, as the case may be;
(4) in case, pursuant to Section 11.05(b), the award or
payment for such property (net of the costs of obtaining such award
or payment), or a specified portion thereof, shall be certified to
have been deposited with the trustee, mortgagee or other holder of a
Prior Lien, that the property to be released, or a specified portion
thereof, is or immediately before such Taking was subject to such
Prior Lien, and that such deposit is required by such Prior Lien;
and
(5) that the instrument or the instruments and the award or
payment of such Taking which have been or are therewith delivered to
and deposited with the Trustee conform to the requirements of this
Indenture and the applicable Security Documents and that, upon the
basis of such application, the Trustee is permitted by the terms
hereof and of the Security Documents to execute and deliver the
release requested, and that all conditions precedent herein and in
the Security Documents provided for relating to such release have
been complied with.
In any proceedings for the Taking of any part of the Collateral, the
Trustee may be represented by counsel who may be counsel for the Issuers.
All Cash or Financial Instruments received by the Trustee pursuant
to this Section 11.05 shall be held by the Trustee as Trust Moneys under Article
Twelve subject to application as therein provided. All purchase money and other
obligations received by the Trustee pursuant to this Section 11.05 shall be held
by the Trustee as Collateral subject to application as provided in Section
11.11.
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SECTION 11.06. Trust Indenture Act Requirements.
The release of any Collateral, whether pursuant to Article Eleven or
Twelve, from the Lien of any of the Security Documents or the release of, in
whole or in part, the Liens created by any of the Security Documents, will not
be deemed to impair the Security Interests in contravention of the provisions
hereof if and to the extent the Collateral or Liens are released pursuant to the
applicable Security Documents and pursuant to the terms hereof. The Trustee and
each of the Holders of the Securities acknowledge that a release of Collateral
or Liens strictly in accordance with the terms of the Security Documents and the
terms hereof will not be deemed for any purpose to be an impairment of the
Security Interests in contravention of the terms of this Indenture. To the
extent applicable, without limitation, the Pledgors and each obligor on the
Securities shall cause TIA ss. 314(d) relating to the release of property or
securities from the Liens hereof and of the Security Documents to be complied
with. Any certificate or opinion required by TIA ss. 314(d) may be made by an
Officer of the appropriate Pledgor, except in cases in which TIA ss. 314(d)
requires that such certificate or opinion be made by an independent Person.
SECTION 11.07. Suits to Protect the Collateral.
Subject to the provisions of the Security Documents, the Trustee
shall have power to institute and to maintain such suits and proceedings as it
may deem expedient to prevent any impairment of the Collateral by any acts which
may be unlawful or in violation of any of the Security Documents or this
Indenture, and such suits and proceedings as the Trustee may deem expedient to
preserve or protect its interests and the interests of the Trustee and the
Holders of the Securities in the Collateral (including power to institute and
maintain suits or proceedings to restrain the enforcement of or compliance with
any legislative or other governmental enactment, rule or order that may be
unconstitutional or otherwise invalid if the enforcement of, or compliance with,
such enactment, rule or order would impair the Security Interests or be
prejudicial to the interests of the Holders of the Securities or the Trustee).
SECTION 11.08. Purchaser Protected.
In no event shall any purchaser in good faith of any property
purported to be released hereunder be bound to ascertain the authority of the
Trustee to execute the release or to inquire as to the satisfaction of any
conditions required by the provisions hereof for the exercise of such authority
or to see to the application of any consideration given by such purchaser or
other transferee; nor shall any purchaser or other transferee of any property or
rights permitted by this Article Eleven to be sold be under obligation to
ascertain or inquire into the
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authority of the Issuers or any other Pledgor, as applicable, to make any such
sale or other transfer.
SECTION 11.09. Powers Exercisable by Receiver or Trustee.
In case the Collateral shall be in the possession of a receiver or
trustee, lawfully appointed, the powers conferred in this Article Eleven upon
the Issuers or any other Pledgor, as applicable, with respect to the release,
sale or other disposition of such property may be exercised by such receiver or
trustee, and an instrument signed by such receiver or trustee shall be deemed
the equivalent of any similar instrument of the Issuers or any other Pledgor, as
applicable, or of any officer or officers thereof required by the provisions of
this Article Eleven.
SECTION 11.10. Disposition of Obligations Received.
All purchase money or other obligations received by the Trustee
under this Article Eleven shall be held by the Trustee as a part of the
Collateral. Upon payment in Cash or Financial Instruments by or on behalf of the
Issuers or the obligor thereof to the Trustee of the entire unpaid principal
amount of any such obligation, the Trustee shall promptly release and transfer
such obligation and any mortgage securing the same upon receipt of any
documentation that the Trustee may reasonably require. Any Cash or Financial
Instruments received by the Trustee in respect of the principal of any such
obligations shall be held by the Trustee as Trust Moneys under Article Twelve
subject to application as therein provided. Unless and until the Securities are
accelerated, pursuant to Section 6.02, all interest and other income on any such
obligations, when received by the Trustee, shall be paid to the Issuers from
time to time in accordance with Section 12.08. If the Securities have been
accelerated pursuant to Section 6.02, any such interest or other income not
theretofore paid, when collected by the Trustee, shall be applied by the Trustee
in accordance with Section 6.10 of this Indenture or, if then in effect, the
Additional Lender Intercreditor Agreement.
SECTION 11.11. Determinations Relating to Collateral.
In the event (i) the Trustee shall receive any written request from
the Issuers or any other Pledgor under any Security Document for consent or
approval with respect to any matter or thing relating to any Collateral or the
Issuers' or any other Pledgor's obligations with respect thereto or (ii) there
shall be required from the Trustee under the provisions of any Security Document
any performance or the delivery of any instrument or (iii) a Responsible Officer
of the Trustee shall become aware of any nonperformance by the Issuers or any
other Pledgor of any
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covenant or any breach of any representation or warranty of the Issuers or any
other Pledgor set forth in any Security Document, and, in the case of clauses
(i), (ii) or (iii) above, the Trustees' response or action is not otherwise
specifically contemplated hereunder then, in each such event, the Trustee shall,
within seven Business Days, advise the Holders of the Securities, in writing, of
the matter or thing as to which consent has been requested or the performance or
instrument required to be delivered or the nonperformance or breach of which the
Trustee has become aware. The Holders of not less than a majority in aggregate
principal amount of the outstanding Securities pursuant to Section 6.05 shall
have the exclusive authority to direct the Trustee's response to any of the
circumstances contemplated in clauses (i), (ii) and (iii) above. In the event
the Trustee shall be required to respond to any of the circumstances
contemplated in this Section 11.11, the Trustee shall not be required so to
respond unless it shall have received written authority by not less than a
majority in aggregate principal amount of the outstanding Securities; provided,
however, that the Trustee shall be entitled to hire experts, consultants, agents
and attorneys to advise the Trustee on the manner in which the Trustee should
respond to such request or render any requested performance or response to such
nonperformance or breach (the expenses of which shall be reimbursed to the
Trustee pursuant to Section 7.07). The Trustee shall be fully protected case may
be, should respond to such request or render any requested performance or
response to such nonperformance or expert, consultant, agent or attorney or
agreed to by a Securities pursuant to Section 6.05.
SECTION 11.12. Renewal and Refunding.
Nothing in this Article Eleven shall prevent (i) the renewal or
extension, without impairment of the Security Interests, at the same or at a
lower or higher rate of interest, of any of the obligations or Indebtedness of
any Person included in the Collateral or (ii) the issue in substitution for any
such obligations or Indebtedness of other obligations or Indebtedness of such
Person for equivalent amounts and of substantially equal or superior rank as to
security, if any; provided, however, that every such obligation or Indebtedness
as so renewed or extended shall continue to be subject to the Lien of the
Security Documents and every substituted obligation of Indebtedness and the
evidence thereof shall be deposited and pledged with the Trustee.
SECTION 11.13. Release upon Termination of the Issuers' Obligations.
In the event that the Issuers delivers an Officers' Certificate
certifying that its obligations under this Indenture have been satisfied and
discharged by complying with the
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provisions of Article Eight, the Trustee shall (i) execute and deliver, in each
case without recourse, representation or warranty such releases, termination
statements and other instruments (in recordable form, where appropriate) as the
Issuers or any other Pledgor, as applicable, may reasonably request evidencing
the termination of the Security Interests created by the Security Documents and
(ii) not be deemed to hold the Security Interests for the benefit of the Trustee
and the Holders of the Securities; provided, however, that in the event the
Additional Lender Intercreditor Agreement shall then be in effect, (x) such
releases, termination statements and other instruments shall solely evidence the
termination of the Security Interest granted under the Security Documents for
the benefit of the Holders of Securities and (y) the Security Interests granted
under the Security Documents for the benefit of the holders of Additional
Secured Indebtedness shall in no event be affected thereby.
SECTION 11.14. Certain Actions by Trustee.
Any action taken by the Trustee pursuant to this Article Eleven or
Article Twelve in respect of the release, substitution or use of Collateral
shall be taken by the Trustee as its interest in such Collateral may appear, and
no provision of this Article Eleven or Article Twelve is intended to, or shall,
excuse compliance with any provision of the Intercreditor Agreements or the
Security Documents that create rights in favor of other secured creditors.
ARTICLE TWELVE
APPLICATION OF TRUST MONEYS
SECTION 12.01. "Trust Moneys" Defined.
All Cash or Financial Instruments received by the Trustee, in
accordance with the terms of this Indenture and the Security Documents:
(a) upon the release of property from the Lien of any of the
Security Documents, including, without limitation, all moneys received in
respect of the principal of all purchase money, governmental and other
obligations; or
(b) as compensation for, or proceeds of the sale of, all or any part
of the Collateral taken by eminent domain or purchased by, or sold
pursuant to an order of, a governmental authority or otherwise disposed
of; or
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(c) as proceeds of insurance upon any, all or part of the Collateral
(other than any liability insurance proceeds payable to the Trustee for
any loss, liability or expense incurred by it); or
(d) pursuant to certain provisions of the Mortgages; or
(e) as proceeds of any other sale or other disposition of all or any
part of the Collateral by or on behalf of the Trustee, or any collection,
recovery, receipt, appropriation or other realization of or from all or
any part of the Collateral pursuant to the Security Documents or
otherwise; or
(f) for application under this Article Twelve as elsewhere provided
in this Indenture or any Security Document, or whose disposition is not
elsewhere otherwise specifically provided for herein or in any Security
Document;
(all such moneys being herein sometimes called "Trust Moneys"; provided,
however, that Trust Moneys shall not include any property deposited with the
Trustee pursuant to Section 6.14 or Article Three or Eight or delivered to or
received by the Trustee pursuant to Section 6.10 hereof) shall be held by or
delivered to the Trustee, for its benefit and the benefit of the Holders of
Securities (and, if the Additional Lender Intercreditor Agreement shall then be
in effect, for the benefit of the holders of the Additional Secured
Indebtedness) as a part of the Collateral in accordance with the provisions of
this Indenture and the applicable Security Documents and, upon any entry upon or
sale or other disposition of the Collateral or any part thereof pursuant to any
of the Security Documents, said Trust Moneys shall be applied in accordance with
Section 6.10 and the applicable Intercreditor Agreements; but, prior to any such
entry, sale or other disposition, all or any part of the Trust Moneys may be
withdrawn, and shall be released, paid or applied by the Trustee, from time to
time as provided in Sections 12.02 through 12.06, inclusive, and the applicable
Intercreditor Agreement.
On the Issue Date there shall be established and, at all times
hereafter until this Indenture shall have terminated, there shall be maintained
with the Trustee an account which shall be entitled the "Collateral Account"
(the "Collateral Account"). The Collateral Account shall be established and
maintained by the Trustee at its corporate trust offices located in New York.
All Trust Moneys that are received by the Trustee shall be held, applied and/or
disbursed by the Trustee in accordance with the provisions of this Article
Twelve.
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SECTION 12.02. Retirement of Securities.
Subject to the limitations set forth in Section 4.15 and paragraph 5
of the Notes, the Trustee shall apply Trust Moneys from time to time to the
payment of the principal amount of and interest on any Securities, when due or
to the redemption thereof or the purchase thereof upon tender pursuant to an
Offer to Purchase or a Change of Control Offer under Section 6.14, as the
Issuers shall request in writing, upon receipt by the Trustee of the following:
(a) Board Resolutions of Statia directing the application pursuant
to this Section 12.02 of a specified amount of Trust Moneys and, in case
any such moneys are to be applied to the payment of Securities,
designating the Securities so to be paid and, in case any such moneys are
to be applied to the purchase of Securities, prescribing the method of
purchase, the price or prices to be paid and the maximum principal amount
of Securities to be purchased and any other provisions of this Indenture
governing such purchase;
(b) U.S. Legal Tender in the maximum amount of the accrued interest,
if any, required to be paid in connection with any such purchase, which
Cash shall be held by the Trustee in trust for such purpose;
(c) an Officers' Certificate of the Issuers, dated not more than
five Business Days prior to the date of the relevant application stating
(i) that no Default or Event of Default exists unless such
Default or Event of Default would be cured thereby; and
(ii) that all conditions precedent and covenants herein
provided for relating to such application of Trust Moneys have been
complied with; and
(d) an Opinion of Counsel stating that the documents and the Cash or
Financial Instruments, if any, which have been or are therewith delivered
to and deposited with the Trustee conform to the requirements of this
Indenture and that all conditions precedent herein provided for relating
to such application of Trust Moneys have been complied with.
Upon compliance with the foregoing provisions of this Section, the
Trustee shall apply Trust Moneys as directed and specified by such Board
Resolution, up to, but not exceeding, the principal amount of the Securities so
paid or purchased, using the U.S. Legal Tender deposited pursuant to paragraph
(b) of this
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Section 12.02, to the extent necessary, to pay any accrued interest required in
connection with such purchase.
A Board Resolution expressed to be irrevocable directing the
application of Trust Moneys under this Section 12.02 to the payment of the
principal of particular Securities shall for all purposes of this Indenture be
deemed the equivalent of the deposit of money with the Trustee in trust for such
purpose. Such Trust Moneys and any U.S. Legal Tender deposited with the Trustee
pursuant to paragraph (b) of this Section 12.02 for the payment of accrued
interest shall not, after compliance with the foregoing provisions of this
Section, be deemed to be part of the Collateral or Trust Moneys.
SECTION 12.03. Withdrawals of Insurance Proceeds and Condemnation Awards.
To the extent that any Trust Moneys consist of either (a) the
proceeds of insurance relating to the Destruction of any part of the Collateral
or (b) any award or payment relating to the Taking of any of the Collateral,
such Trust Moneys may, subject to the provisions of Section 4.15(c), be
withdrawn by the Issuers or any Subsidiary Guarantor, as applicable, and shall
be paid by the Trustee upon a request by the Issuers or the applicable
Subsidiary Guarantor by the proper officer or officers of the Issuers or the
applicable Subsidiary Guarantor to reimburse the Issuers or the applicable
Subsidiary Guarantor for expenditures made, or to pay costs incurred, by the
Issuers or the applicable Subsidiary Guarantor to repair, rebuild or replace the
Collateral Destroyed or Taken, upon receipt by the Trustee of the following:
(a) an Officers' Certificate of the applicable Issuer or the
applicable Subsidiary Guarantor dated not more than 30 days prior to the
date of the application for the withdrawal and payment of such Trust
Moneys and (if required by the TIA) signed also, in the case of the
following clauses (i), (iv) and (vi), by an Independent Financial Advisor,
setting forth:
(i) that expenditures have been made, or costs incurred, by
the Issuers or the applicable Subsidiary Guarantor in a specified
amount for the purpose of making certain repairs, rebuildings and
replacements of the Collateral, which shall be briefly described,
and stating the fair market value thereof to the applicable Issuer
or the applicable Subsidiary Guarantor at the date of the
acquisition thereof by the applicable Issuer or the applicable
Subsidiary Guarantor, except that it shall not be necessary under
this clause (i) to state the fair market value of any such repairs,
rebuildings or replacements that are separately
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described pursuant to clause (vi) of this paragraph (a) and whose
fair market value is stated in the Independent Financial Advisor's
certificate under paragraph (b) of this Section 12.03;
(ii) that no part of such expenditures in any previous or
then pending application, has been or is being made the basis for
the withdrawal of any Trust Moneys pursuant to this Section 12.03;
(iii) that no part of such expenditures or costs has been paid
out of either the proceeds of insurance or awards or payments upon
any part of the Collateral not required to be paid to the Trustee
under the relevant Mortgage;
(iv) that there is no outstanding Indebtedness, other than
costs for which payment is being requested, known to the Issuers or
the applicable Subsidiary Guarantor, after due inquiry, for the
purchase price or construction of such repairs, rebuildings or
replacements, or for labor, wages, materials or supplies in
connection with the making thereof, which, if unpaid, might become
the basis of a vendor's, mechanics', laborers' materialmen's,
statutory or other similar Lien upon any of such repairs,
rebuildings or replacement, which Lien might, in the opinion of the
signers of such certificate, materially impair the security afforded
by such repairs, rebuildings or replacement;
(v) that the property to be repaired, rebuilt or replaced is
necessary or desirable in the conduct of either the Issuers' or the
applicable Subsidiary Guarantor's business;
(vi) whether any part of such repairs, rebuildings or
replacements within six months before the date of acquisition
thereof by the Issuers or the applicable Subsidiary Guarantor, has
been used or operated by Persons other than the Issuers or the
applicable Subsidiary Guarantor in a business similar to that in
which such property has been or is to be used or operated by the
Issuers or the applicable Subsidiary Guarantor, and whether the fair
market value to the Issuers or the applicable Subsidiary Guarantor,
at the date of such acquisition, of such part of such repairs,
rebuildings or replacement is at least $25,000 and 1% of the
aggregate principal amount of the outstanding Securities; and, if
all of such facts are present, such part of said repairs,
rebuildings or replacements shall be separately described, and it
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shall be stated that an Independent Financial Advisor's certificate
as to the fair market value to the applicable Issuer or the
applicable Subsidiary Guarantor of such separately described
repairs, rebuildings or replacements will be furnished under
paragraph (b) of this Section 12.03;
(vii) that no Default or Event of Default shall have occurred
and be continuing; and
(viii) that all conditions precedent herein provided for
relating to such withdrawal and payment have been complied with.
(b) In case any part of such repairs, rebuildings or replacements is
separately described pursuant to the foregoing clause (vi) of paragraph
(a) of this Section 12.03, a certificate of an Independent Financial
Advisor (if required by the TIA) stating the fair market value to the
applicable Issuer or the applicable Subsidiary Guarantor, in such
Independent Financial Advisor's opinion, of such separately described
repairs, rebuildings or replacements at the date of the acquisition
thereof by the Issuers or the applicable Subsidiary Guarantor.
(c) (i) In case any part of such repairs, rebuildings or
replacements constitutes Real Property:
(1) with respect to any such repairs, rebuildings or
replacements that are not encompassed within or are not erected upon
Mortgaged Property, an instrument or instruments in recordable form
sufficient for the Lien of this Indenture and any Mortgage to cover
such repairs, rebuildings or replacements which, if such repairs,
rebuildings or replacements include leasehold or easement interests,
shall include normal and customary provisions with respect thereto
and evidence of the filing of all such documents as may be necessary
to perfect such Liens;
(2) a title Opinion of Counsel in form and substance
acceptable to the Trustee, substantially to the effect that the Lien
of this Indenture and any Mortgage constitutes a direct and valid
and perfected mortgage Lien on such repairs, rebuildings or
replacements (subject to no Prior Liens other than Prior Liens which
were permitted with respect to the Collateral repaired, rebuilt or
replaced);
(3) in the event such repairs, rebuildings or replacements
have a fair market value in excess of $250,000, a Survey with
respect thereto; and
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(4) evidence of payment or a closing statement indicating
payments to be made by the applicable Issuer or the applicable
Subsidiary Guarantor of all recording charges, transfer taxes and
other costs and expenses, including reasonable legal fees and
disbursements of counsel for the Trustee (and any foreign counsel),
that may be incurred to validly and effectively subject such
repairs, rebuildings or replacements to the Lien of any applicable
Security Document and to perfect such Lien; and
(ii) in case any part of such repairs, rebuildings or replacements
constitutes personal property interests:
(1) an instrument in recordable form sufficient for the Lien
of any applicable Security Document to cover such repairs,
rebuildings or replacements; and
(2) evidence of payment or a closing statement indicating
payments to be made by the Issuers or the applicable Subsidiary
Guarantor of all filing fees, recording charges, transfer taxes and
other costs and expenses, including reasonable legal fees and
disbursements of counsel for the Trustee (and any foreign counsel),
that may be incurred to validly and effectively subject such
repairs, rebuildings or replacements to the Lien of any Security
Document and to perfect such Liens.
(d) An Opinion of Counsel to the effect:
(i) that the instruments that have been or are therewith
delivered to the Trustee conform in all material respects to the
requirements of this Indenture and any other applicable Security Document,
and that, upon the basis of such request of the Issuers or the applicable
Subsidiary Guarantor and the accompanying documents specified in this
Section 12.03, all conditions precedent herein provided for relating to
such withdrawal and payment have been complied with, and the Trust Moneys
whose withdrawal is then requested may be lawfully paid over under this
Section 12.03; and
(ii) that all of the Issuers' or the applicable Subsidiary
Guarantor's right, title and interest in and to said repairs, rebuildings
or replacements, or combination thereof, are then subject to the Lien of
any of the Security Documents.
Upon compliance with the foregoing provisions of this Section 12.03,
the Trustee shall cause the Trustee to pay on the written request of the Issuers
an amount of Trust Moneys of the
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character aforesaid equal to the amount of the expenditures or costs stated in
the Officers' Certificate required by clause (i) of paragraph (a) of this
Section 12.03, or the fair market value to the Issuers of such repairs,
rebuildings and replacements stated in such Officers' Certificate (and in such
Independent Financial Advisor's certificate, if required by paragraph (b) of
this Section 12.03), whichever is less.
SECTION 12.04. Withdrawal of Trust Moneys for Reinvestment.
To the extent that any Trust Moneys consist of Net Proceeds received
by the Trustee pursuant to Section 4.15 and the Issuers or any Subsidiary
Guarantor, as applicable, intends to reinvest such Net Proceeds in a manner that
would constitute a Related Business Investment or a Permitted Related
Acquisition, such Trust Moneys may be withdrawn by the Issuers or any Subsidiary
Guarantor, as applicable, and shall be paid by the Trustee upon a written
request by the Issuers by the proper Officer or Officers of the Issuers or any
Subsidiary Guarantor, as applicable, to reimburse the Issuers or any Subsidiary
Guarantor, as applicable, for expenditures made or to pay costs incurred by the
Issuers or any Subsidiary Guarantor, as applicable, in connection with such
Related Business Investment or Permitted Related Acquisition, upon receipt by
the Trustee of the following:
(a) An Officers' Certificate of the Issuers, dated not more than 30
days prior to the date of the application for the withdrawal and payment of such
Trust Moneys, stating in substance as follows:
(i) that the Trust Moneys to be released constitute
Net Proceeds from an Asset Sale;
(ii) setting forth with particularity the investment
or acquisition to be made with such Trust Moneys;
(iii) that the release of the Trust Moneys complies
with all applicable terms of this Indenture;
(iv) that there is no Default or Event of Default (both before and
after giving effect to the Related Business Investment or the Permitted
Related Acquisition) continuing; and
(v) that all conditions precedent herein provided for relating to
the release of the Trust Moneys in question have been provided.
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(b) If the Related Business Investment or the Permitted Related
Acquisition to be made is an investment in Real Property, the Issuers shall also
deliver to the Trustee:
(i) an instrument or instruments in recordable form sufficient
for the Lien of this Indenture and any Mortgage to cover such Real
Property which, if the Real Property is a leasehold or easement interest,
shall include normal and customary provisions with respect thereto and
evidence of the filing of all such financing statements and other
instruments as may be necessary to perfect such Liens;
(ii) a title Opinion of Counsel in form and substance acceptable
to the Trustee, substantially to the effect that the Lien of this
Indenture and any Mortgage constitutes a direct and valid and perfected
mortgage Lien on such Real Property (subject to no Prior Liens other than
Prior Liens which were permitted with respect to the Collateral which was
the subject of the Asset Sale);
(iii) in the event the fair market value of the Real Property is
in excess of $250,000, a Survey with respect thereto; and
(iv) evidence of payment or a closing statement indicating
payments to be made by the Issuers or the appropriate Subsidiary Guarantor
of all recording charges, transfer taxes and other costs and expenses,
including reasonable legal fees and disbursements of one counsel for the
Trustee (and any foreign counsel), that may be incurred to validly and
effectively subject the Real Property to the Lien of any applicable
Security Document and to perfect such Lien.
(c) If the Related Business Investment or Permitted Related
Acquisition is a personal property interest, the Issuers or the appropriate
Subsidiary Guarantor shall deliver to the Trustee:
(i) an instrument in recordable form, if necessary, sufficient for
the Lien of any applicable Security Document to cover such personal
property interest; and
(ii) evidence of payment or a closing statement indicating payments
to be made by the Issuers or the appropriate Subsidiary Guarantor of all
filing fees, recording charges, transfer taxes and other costs and
expenses, including reasonable legal fees and disbursements of one counsel
for the Trustee (and any foreign counsel), that may be incurred to validly
and effectively subject the Related Business Investment or Permitted
Related Acquisition
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to the Lien of any Security Document and to perfect such Lien.
(d) An Opinion of Counsel stating that (i) all of the Issuers' or
the applicable Subsidiary Guarantor's right, title and interest in and to such
personal property are then subject to the Lien of the Security Documents and
(ii) the documents that have been or are therewith delivered to the Trustee
conform to the requirements of this Indenture and that all conditions precedent
herein and in the Security Documents relating to such application of Trust
Moneys have been complied with.
SECTION 12.05. Powers Exercisable Notwithstanding Event of Default.
In case an Event of Default shall have occurred and shall be
continuing, the Issuers or any Subsidiary Guarantor, as applicable, while in
possession of Collateral (other than Cash, Financial Instruments, securities and
other Personal property held by, or required to be deposited or pledged with,
the Trustee hereunder or under the Security Documents or with the trustee,
mortgagee or other holder of a Prior Lien), may do any of the things enumerated
in Sections 12.02, 12.03 and 12.04 if the Holders of a majority in aggregate
principal amount of the Securities outstanding, by appropriate action of such
Holders, shall consent to such action, in which event any certificate filed
under any of such Sections shall omit the statement to the effect that no Event
of Default has occurred and is continuing. This Section 12.05 shall not apply,
however, during the continuance of an Event of Default of the type specified in
Section 6.01(i) or (ii).
SECTION 12.06. Powers Exercisable by Trustee or Receiver.
In case the Collateral (other than any Cash, Financial Instruments,
securities and other personal property held by, or required to be deposited or
pledged with, the Trustee hereunder or under the Security Documents or with the
trustee, mortgagee or other holder of a Prior Lien) shall be in the possession
of a receiver or trustee lawfully appointed, the powers hereinbefore in this
Article Twelve conferred upon the Issuers and any Subsidiary Guarantor, as
applicable, with respect to the withdrawal or application of Trust Moneys may be
exercised by such receiver or trustee, in which case a certificate signed by
such receiver or trustee shall be deemed the equivalent of any Officers'
Certificate required by this Article Twelve. If the Trustee shall be in
possession of any of the Collateral hereunder or under any of the Security
Documents, such powers may be exercised by the Trustee, in its discretion.
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SECTION 12.07. Disposition of Securities Retired.
All Securities received by the Trustee and for whose purchase Trust
Moneys are applied under this Article Twelve, if not otherwise cancelled, shall
be promptly delivered to the Trustee for cancellation and destruction unless the
Trustee shall be otherwise directed in writing by the Issuers. Upon destruction
of any Securities, the Trustee shall issue a certificate of destruction to the
Issuers.
SECTION 12.08. Investment of Trust Moneys.
All or any part of any Trust Moneys held by the Trustee hereunder
(except such as may be held for the account of any particular Securities) shall
from time to time be invested or reinvested by the Trustee in any Financial
Instruments pursuant to the written direction of the Issuers which shall specify
the Financial Instruments in which such Trust Moneys shall be invested. Unless
an Event of Default occurs and is continuing, any interest on such Financial
Instruments (in excess of any accrued interest paid at the time of purchase)
which may be received by the Trustee shall be forthwith paid to the Issuers.
Such Financial Instruments shall be held by the Trustee as a part of the
Collateral, subject to the same provisions hereof as the Cash used by it to
purchase such Financial Instruments.
The Trustee shall not be liable or responsible for any loss
resulting from such investments or sales except only for its own grossly
negligent action, its own grossly negligent failure to act or its own willful
misconduct in complying with this Section 12.08.
ARTICLE THIRTEEN
MISCELLANEOUS
SECTION 13.01. TIA Controls.
If any provision of this Indenture limits, qualifies, or conflicts
with another provision which is required to be included in this Indenture by the
TIA, the required provision shall control.
SECTION 13.02. Notices.
Any notices or other communications required or permitted hereunder
shall be in writing, and shall be sufficiently given if made by hand delivery,
by telecopier or registered or certified mail, postage prepaid, return receipt
requested, addressed as follows:
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if to the Issuers or any Subsidiary Guarantor:
Statia Terminals International N.V.
c/o Statia Terminals, Inc.
800 Fairway Drive
Suite 295
Deerfield Beach, FL 33441
Attention: James F. Brenner
Facsimile: (954) 570-3453
Telephone: (954) 698-0705
if to the Trustee:
Marine Midland Bank
140 Broadway
12th Floor
New York, New York 10005-1180
Attention: Corporate Trust Department
Facsimile: (212) 658-6425
Telephone: (212) 658-6433
Each of the Issuers, the Subsidiary Guarantors and the Trustee by
written notice to each other such Person may designate additional or different
addresses for notices to such Person. Any notice or communication to the
Issuers, the Subsidiary Guarantors and the Trustee shall be deemed to have been
given or made as of the date so delivered if personally delivered; when receipt
is acknowledged, if telecopied; and five (5) calendar days after mailing if sent
by registered or certified mail, postage prepaid (except that a notice of change
of address shall not be deemed to have been given until actually received by the
addressee).
Any notice or communication mailed to a Holder of Securities shall
be mailed to him by first class mail or other equivalent means at his address as
it appears on the registration books of the Registrar and shall be sufficiently
given to him if so mailed within the time prescribed.
Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other Holders of
Securities. If a notice or communication is mailed in the manner provided above,
it is duly given, whether or not the addressee receives it.
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SECTION 13.03. Communications by Holders with Other Holders.
Holders of Securities may communicate pursuant to TIA ss. 312(b)
with other Holders of Securities with respect to their rights under this
Indenture, the Securities or the Guarantees. The Issuers, the Trustee, the
Registrar and any other Person shall have the protection of TIA ss. 312(c).
SECTION 13.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Issuers, a Subsidiary
Guarantor or a Pledgor to the Trustee to take any action under this Indenture or
the Security Documents, the Issuers, such Subsidiary Guarantor or such Pledgor,
as the case may be, shall furnish to the Trustee:
(1) an Officers' Certificate, in form and substance satisfactory to
the Trustee, stating that, in the opinion of the signers, all conditions
precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with; and
(2) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
SECTION 13.05. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture, other than the Officers'
Certificate required by Section 4.08, shall include:
(1) a statement that the Person making such
certificate or opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such Person, he has made
such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has
been complied with; and
(4) a statement as to whether or not, in the opinion of each such
Person, such condition or covenant has been complied with; provided,
however, that with respect to
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matters of fact an Opinion of Counsel may rely on an Officers' Certificate
or certificates of public officials.
SECTION 13.06. Rules by Trustee, Paying Agent, Registrar.
The Trustee, Paying Agent or Registrar may make reasonable rules for
its functions.
SECTION 13.07. Legal Holidays.
If a payment date is not a Business Day, payment may be made on the
next succeeding day that is a Business Day with the same force and effect as if
made on such payment date.
SECTION 13.08. Governing Law.
THIS INDENTURE, THE INTERCREDITOR AGREEMENTS, THE SECURITIES AND THE
GUARANTEES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE
OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. Each of the
parties hereto agrees to submit to the nonexclusive jurisdiction of the courts
of the State of New York and the U.S. Federal Courts sitting in the City of New
York for the purposes of any suit, action or proceeding arising out of or
relating to this Indenture. The Issuers and the Subsidiary Guarantors hereby
designate and appoint CT Corporation System, 1633 Broadway, New York, New York
10019, as its agent to receive on its behalf service of all process in any
proceedings in any court sitting in New York, New York, such service being
hereby acknowledged by the Issuers and Subsidiary Guarantors to be effective and
binding service in every respect. A copy of any such process so served shall be
mailed by registered mail to the Issuers and Subsidiary Guarantors, at their
respective address specified in Section 13.02 hereof, except that unless
otherwise provided by applicable law, any failure to mail such copy shall not
affect the validity of service of process. If any agent appointed by the Issuers
and Subsidiary Guarantors refuses to accept service, the Issuers and Subsidiary
Guarantors hereby agree that service upon them by mail shall constitute
sufficient notice. Nothing herein shall affect the right to serve process in any
other manner permitted by law or shall limit the right of the Trustee to bring
proceedings against the Issuers and Subsidiary Guarantors in the courts of any
other jurisdiction.
SECTION 13.09. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan
or debt agreement of any of the Issuers or any of its Subsidiaries. Any such
indenture, loan or debt agreement may not be used to interpret this Indenture.
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SECTION 13.10. No Recourse Against Others.
A director, officer, employee, its direct or indirect stockholder or
incorporator, as such, of the Issuers or any of its Subsidiaries, including but
not limited to Parent and its stockholders, shall not have any liability for any
obligations of the Issuers or the Subsidiary Guarantors under the Securities,
this Indenture or the Guarantees or for any claim based on, in respect of or by
reason of such obligations or their creations. Each Holder of Securities by
accepting a Security waives and releases all such liability. Such waiver and
release are part of the consideration for the issuance of the Securities.
SECTION 13.11. Successors.
All agreements of the Issuers and the Subsidiary Guarantors in this
Indenture, the Securities and the Guarantees shall bind their respective
successors. All agreements of the Trustee in this Indenture shall bind its
successors.
SECTION 13.12. Duplicate Originals.
All parties may sign any number of copies of this Indenture. Each
signed copy or counterpart shall be an original, but all of them together shall
represent the same agreement.
SECTION 13.13. Severability.
In case any one or more of the provisions in this Indenture, in the
Securities or in the Guarantees shall be held invalid, illegal or unenforceable,
in any respect for any reason, the validity, legality and enforceability of any
such provision in every other respect and of the remaining provisions shall not
in any way be affected or impaired thereby, it being intended that all of the
provisions hereof shall be enforceable to the full extent permitted by law.
SECTION 13.14. Tax Considerations.
It is the intention of the parties hereto that for U.S. Federal,
state and local income tax purposes: (i) neither the Holders nor the Trustee
shall be at any time the owner of the Collateral for U.S. Federal, state or
local tax purposes and (ii) the arrangement created hereby is intended solely to
be a security arrangement and not a trust and neither the Trustee nor the
Holders shall file any returns, reports or other documents or take any position
inconsistent therewith for U.S. Federal, state or local tax law purposes.
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SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed as of the date first written above.
STATIA TERMINALS INTERNATIONAL
N.V.
By: /s/ David B. Pittaway
---------------------------------
Name: David B. Pittaway
Title: Managing Director
By: /s/ James G. Cameron
---------------------------------
Name: James G. Cameron
Title: Managing Director
STATIA TERMINALS CANADA,
INCORPORATED
By: /s/ David B. Pittaway
---------------------------------
Name: David B. Pittaway
Title: President
MARINE MIDLAND BANK,
as Trustee
By: /s/ Eileen M. Hughes
---------------------------------
Name: Eileen M. Hughes
Title: Assistant Vice President
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IN WITNESS WHEREOF, each of the undersigned Subsidiary Guarantors
has caused this Indenture to be duly executed as of this 27th day of November,
1996.
STATIA TERMINALS CORPORATION N.V.
By: /s/ David B. Pittaway
---------------------------------
Name: David B. Pittaway
Title: Managing Director
By: /s/ Justin B. Wender
---------------------------------
Name: Justin B. Wender
Title: Managing Director and
Secretary
STATIA TERMINALS DELAWARE, INC.
By: /s/ David B. Pittaway
---------------------------------
Name: David B. Pittaway
Title: President
STATIA TERMINALS, INC.
By: /s/ James G. Cameron
---------------------------------
Name: James G. Cameron
Title: Chairman of the Board and
President
STATIA TERMINALS N.V.
By: /s/ James G. Cameron
---------------------------------
Name: James G. Cameron
Title: Managing Director
STATIA TERMINALS HOLDCO II, INC.
By: /s/ David B. Pittaway
---------------------------------
Name: David B. Pittaway
Title: President
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SABA TRUSTCOMPANY N.V.
By: /s/ James G. Cameron
---------------------------------
Name: James G. Cameron
Title: Managing Director
BICEN DEVELOPMENT CORPORATION N.V.
By: /s/ James G. Cameron
---------------------------------
Name: James G. Cameron
Title: Managing Director
STATIA TERMINALS SOUTHWEST,INC.
By: /s/ James G. Cameron
---------------------------------
Name: James G. Cameron
Title: President
W.P. COMPANY, INC.
By: /s/ James F. Brenner
---------------------------------
Name: James F. Brenner
Title: Vice President Finance
and Secretary
SEVEN SEAS STEAMSHIP COMPANY, INC.
By: /s/ James F. Brenner
---------------------------------
Name: James F. Brenner
Title: Vice President
STATIA TUGS N.V.
By: /s/ James G. Cameron
---------------------------------
Name: James G. Cameron
Title:
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SEVEN SEAS STEAMSHIP COMPANY
(SINT EUSTATIUS) N.V.
By: /s/ James G. Cameron
---------------------------------
Name: James G. Cameron
Title: Attorney-in-Fact
POINT TUPPER MARINE SERVICES
LIMITED
By: /s/ James F. Brenner
---------------------------------
Name: James F. Brenner
Title: Vice President Finance
and Treasurer
STATIA LABORATORY SERVICES, N.V.
By: /s/ James G. Cameron
---------------------------------
Name: James G. Cameron
Title: Managing Director
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STATIA DELAWARE HOLDCO II, INC.
By: /s/ David B. Pittaway
---------------------------------
Name: David B. Pittaway
Title: President
<PAGE>
EXHIBIT A
[FORM OF SERIES A SECURITY]
THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE U.S. SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE SECURITY EVIDENCED HEREBY
MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE
SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON
THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY
RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE
BENEFIT OF THE ISSUERS THAT (A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED ONLY (1) (a) TO A PERSON WHO THE SELLER REASONABLY
BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (b) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (c)
OUTSIDE THE U.S. TO A FOREIGN PERSON IN A TRANSACTION MEETING THE REQUIREMENTS
OF RULE 904 UNDER THE SECURITIES ACT OR (d) IN ACCORDANCE WITH ANOTHER EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN
OPINION OF COUNSEL IF THE ISSUERS SO REQUEST), (2) TO THE ISSUERS, (3) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND, IN EACH
CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE U.S.
OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH
SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASERS FROM IT OF THE SECURITY
EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE.
THE SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD, TRANSFERRED OR
DELIVERED AS PART OF ITS INITIAL DISTRIBUTION OR AT ANY TIME THEREAFTER,
DIRECTLY OR INDIRECTLY, OTHER THAN TO AFFILIATES OF THE ISSUERS CONTROLLING,
UNDER COMMON CONTROL WITH OR CONTROLLED BY THE ISSUERS, PENSION FUNDS, INSURANCE
COMPANIES, SECURITIES FIRMS AND OTHER INVESTMENT INSTITUTIONS, CENTRAL
GOVERNMENTS, INTERNATIONAL ORGANIZATIONS CREATED UNDER PUBLIC INTERNATIONAL LAW
AND OTHER COMPARABLE ENTITIES, INCLUDING, INTER ALIA, FINANCE COMPANIES OF
INDUSTRIAL AND FINANCIAL ENTERPRISES, WHO OR WHICH ARE ACTIVE ON A REGULAR AND
PROFESSIONAL BASIS IN THE FINANCIAL MARKETS FOR THEIR OWN ACCOUNT.
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STATIA TERMINALS INTERNATIONAL N.V.
STATIA TERMINALS CANADA, INCORPORATED
11 3/4% First Mortgage Note due 2003, Series A
CUSIP No.:
No.________________ $
Statia Terminals International N.V., a Netherlands Antilles
corporation ("Statia"), and Statia Terminals Canada, Incorporated, a corporation
organized under the federal laws of Canada (together with Statia, the "Issuers,"
which term includes any successor corporation), for value received, hereby
jointly and severally promise to pay to ____________________ or registered
assigns, the principal sum of $135,000,000 United States Dollars, on November
15, 2003.
Interest Payment Dates: May 15 and November 15, commencing May 15,
1997
Record Dates: May 1 and November 1
Reference is made to the further provisions of this Security
contained herein, which will for all purposes have the same effect as if set
forth at this place.
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IN WITNESS WHEREOF, the Issuers have caused this Security to be
signed manually or by facsimile by its duly authorized officers.
Dated:
STATIA TERMINALS INTERNATIONAL N.V.
By:_________________________________
Name:
Title:
By:_________________________________
Name:
Title:
STATIA TERMINALS CANADA,
INCORPORATED
By:_________________________________
Name:
Title:
By:_________________________________
Name:
Title:
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This is one of the 11 3/4% First Mortgage Notes due 2003, Series A,
described in the within-mentioned Indenture.
MARINE MIDLAND BANK,
as Trustee
By:______________________________
Authorized Signatory
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(REVERSE OF SECURITY)
STATIA TERMINALS INTERNATIONAL N.V.
STATIA TERMINALS CANADA, INCORPORATED
11 3/4% First Mortgage Note due 2003, Series A
1. Interest.
Statia Terminals International N.V., a Netherlands Antilles
corporation ("Statia"), and Statia Terminals Canada, Incorporated, a corporation
organized under the federal laws of Canada ("Statia Canada," and together with
Statia, the "Issuers"), hereby jointly and severally promise to pay interest on
the principal amount of this Security at the rate per annum shown above. The
Issuers will pay interest semi-annually on May 15 and November 15 of each year
(the "Interest Payment Date"), commencing May 15, 1997. Interest on the
Securities will accrue from the most recent date to which interest has been paid
or, if no interest has been paid, from November 27, 1996. Interest will be
computed on the basis of a 360-day year of twelve 30-day months.
The Issuers shall pay interest on overdue principal from time to
time on demand at the rate borne by the Securities plus 2% and on overdue
installments of interest (without regard to any applicable grace periods) to the
extent lawful.
2. Method of Payment.
The Issuers shall pay interest on the Securities (except defaulted
interest) to the Persons who are the registered Holders at the close of business
on the Record Date immediately preceding the Interest Payment Date even if the
Securities are cancelled on registration of transfer or registration of exchange
after such Record Date. Holders must surrender Securities to a Paying Agent to
collect principal payments. The Issuers shall pay principal and interest in
money of the United States that at the time of payment is legal tender for
payment of public and private debts ("U.S. Legal Tender"). However, the Issuers
may pay principal and interest by wire transfer of U.S. Federal funds, or
interest by check payable in such U.S. Legal Tender. The Issuers may deliver any
such interest payment to the Paying Agent or to a Holder at the Holder's
registered address.
3. Paying Agent and Registrar.
Marine Midland Bank (the "Trustee") will act as Paying Agent and
Registrar. The Issuers may change any Registrar or co-Registrar without notice
to the Holders; however, the Paying
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Agent shall always be the Trustee or any successor trustee, under the Indenture.
4. Indenture and Guarantees.
The Issuers issued the Securities under an Indenture, dated as of
November 27, 1996 (the "Indenture"), among the Issuers, the Subsidiary
Guarantors and the Trustee. Capitalized terms herein are used as defined in the
Indenture unless otherwise defined herein. The terms of the Securities include
those stated in the Indenture and those made part of the Indenture by reference
to the Trust Indenture Act of 1939 (15 U.S.C. ss.ss. 77aaa-77bbbb) (the "TIA"),
as in effect on the date of the Indenture until such time as the Indenture is
qualified under the TIA, and thereafter as in effect on the date on which the
Indenture is qualified under the TIA, except as provided in the Indenture.
Notwithstanding anything to the contrary herein, the Securities are subject to
all such terms, and Holders of Securities are referred to the Indenture and the
TIA for a statement of them. The Securities are secured obligations of the
Issuers limited in aggregate principal amount to $135,000,000. Payment on each
Security is guaranteed on a senior basis, jointly and severally, by the
Subsidiary Guarantors pursuant to Article Ten of the Indenture.
5. Redemption.
(a) Optional Redemption. The Securities will be redeemable, at the
Issuers' option, in whole at any time or in part from time to time, on and after
November 15, 2000 at the following redemption prices (expressed as percentages
of the principal amount), together with accrued and unpaid interest, if any,
thereon to the Redemption Date if redeemed during the 12-month period beginning
November 15:
Year Percentage
---- ----------
2000......................................................105.875%
2001 ....................................................102.938%
2002......................................................100.000%
provided that the Issuers may not redeem the Securities prior to the Fifth
Anniversary with the proceeds of Asset Sales.
(b) Optional Redemption upon Public Equity Offering. On or prior to
November 15, 1999, the Issuers may redeem up to 35% of the aggregate principal
amount of the Securities with the net cash proceeds of one or more Equity
Offerings at a redemption price equal to 111.175% of the principal amount
thereof, plus accrued and unpaid interest, if any, to the Redemption Date;
provided that (a) at least $88 million aggregate principal amount of the
Securities remain outstanding immediately after the
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occurrence of such redemption and (b) such redemption occurs within 60 days of
the date of the closing of any such Equity Offering.
(c) Tax Redemption. The Securities will be subject to redemption, in
whole but not in part, at the option of the Issuers at any time at 100% of the
principal amount thereof, plus accrued and unpaid interest, if any, to the
Redemption Date, if either of the Issuers or the Subsidiary Guarantors, as the
case may be, has become or would become obligated to pay, on the next date on
which any amount would be payable with respect to the Securities, any Additional
Amounts or Reimbursement Payments as a result of a change in, or amendment to,
the laws, treaties, regulations or rulings of any Taxing Authority, or any
change in, or amendment to, any official position regarding the application or
interpretation of such laws, regulations, treaties or rulings, which change or
amendment is announced or becomes effective on or after the Issue Date; provided
that the Issuers or the Subsidiary Guarantors, as the case may be, determine, in
their business judgment, that the obligation to pay such Additional Amounts or
Reimbursement Payments cannot be avoided by the use of reasonable measures
available to the Issuers or the Subsidiary Guarantors, as the case may be, (not
including substitution of the obligors under the Securities).
(d) Selection of Securities for Redemption. If less than all of the
Securities are to be redeemed at any time, selection of the Securities to be
redeemed will be made by the Trustee from among the outstanding Securities on a
pro rata basis, by lot or by any other method permitted in the Indenture.
6. Notice of Redemption.
Notice of redemption will be mailed at least 30 days but not more
than 60 days before the Redemption Date to each Holder of Securities to be
redeemed at such Holder's registered address. Securities in denominations of
$1,000 may be redeemed only in whole. The Trustee may select for redemption
portions (equal to $1,000 or any integral multiple thereof) of the principal of
Securities that have denominations larger than $1,000.
If any Security is to be redeemed in part only, the notice of
redemption that relates to such Security shall state the portion of the
principal amount thereof to be redeemed. A new Security in a principal amount
equal to the unredeemed portion thereof will be issued in the name of the Holder
thereof upon cancellation of the original Security. On and after the Redemption
Date, interest will cease to accrue on Securities or portions thereof called for
redemption.
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<PAGE>
7. Offers to Purchase.
The Indenture provides that following certain Asset Sales, takings
by eminent domain and casualty occurrences, and subject to further limitations
contained therein, the Issuers shall make an offer to purchase certain amounts
of the Securities in accordance with the procedures set forth in the Indenture.
In addition, an Event of Default shall occur under the Indenture as a result of
a Change of Control or upon the occurrence of significant Asset Sales, takings
or destructions, on or prior to the Fifth Anniversary. Any such Event of Default
may be cured if an Offer to Purchase is made and consummated as described in the
Indenture.
8. Security Documents.
In order to secure the due and punctual payment of the principal of
and interest on the Securities and all other amounts payable by the Issuers
under the Indenture and the Securities when and as the same shall be due and
payable, whether at maturity, by acceleration or otherwise, according to the
terms of the Securities and the Indenture, the Pledgors have granted Liens on
the Collateral to the Trustee for the benefit of the Trustee and the Holders of
Securities pursuant to the Indenture, the Intercreditor Agreements and the
Security Documents.
Each Holder, by accepting a Security, agrees to all of the terms and
provisions of the Security Documents and the Intercreditor Agreements, as the
same may be amended from time to time pursuant to the respective provisions
thereof and the Indenture.
The Trustee and each Holder acknowledge that a release of any of the
Collateral or any Lien strictly in accordance with the terms and provisions of
any of the Security Documents and the terms and provisions of the Indenture will
not be deemed for any purpose to be an impairment of the security under the
Indenture.
Under certain circumstances set forth in the Indenture, the Issuers
may incur Additional Secured Indebtedness that will share ratably in the
Collateral with Holders of the Securities.
9. Denominations; Transfer; Exchange.
The Securities are in registered form, without coupons, in
denominations of U.S.$1,000 and integral multiples of U.S.$1,000. A Holder shall
register the transfer of or exchange Securities in accordance with the
Indenture. The Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay certain transfer
taxes or similar governmental charges payable in connection therewith as
permitted by the Indenture. The Registrar need not
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<PAGE>
register the transfer of or exchange any Securities or portions thereof selected
for redemption, except the unredeemed portion of any Security being redeemed in
part.
10. Persons Deemed Owners.
The registered Holder of a Security shall be treated as the owner of
it for all purposes.
11. Unclaimed Funds.
If funds for the payment of principal or interest remain unclaimed
for two years, the Trustee and the Paying Agent will repay the funds to the
Issuers at their request. After that, all liability of the Trustee and Paying
Agent with respect to such funds shall cease.
12. Discharge.
The Issuers may be discharged from their obligations under the
Indenture and the Securities except for certain provisions thereof, upon
satisfaction of certain conditions specified in the Indenture.
13. Amendment; Supplement; Waiver.
Subject to certain exceptions, the Indenture or the Securities may
be amended or supplemented with the written consent (which may include consents
obtained in connection with a tender offer or exchange offer for securities) of
the Holders of at least a majority in aggregate principal amount of the
Securities then outstanding (75% with respect to the Change of Control
provisions and the obligation to make an Offer to Purchase), and any existing
Default or Event of Default or compliance with any provision may be waived other
than any continuing Default or Event of Default in the payment of the principal
amount of, premium, if any, or interest on the Securities with the consent
(which may include consents obtained in connection with a tender offer or
exchange offer for securities) of the Holders of a majority in aggregate
principal amount of the Securities then outstanding. Without the consent of any
Holder, the parties thereto may amend or supplement the Indenture, the Security
Documents or the Securities to, among other things, cure any ambiguity, defect
or inconsistency, provide for uncertificated Securities in addition to or in
place of certificated Securities to provide for the assumption of the Issuers'
obligations to Holders in the case of a merger or acquisition or comply with any
requirements of the Commission in connection with the qualification of the
Indenture under the TIA, or make any other change that does not materially
adversely affect the rights of any Holder of a Security.
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<PAGE>
14. Restrictive Covenants.
The Indenture contains certain covenants that, among other things,
limit the ability of the Issuers and their subsidiaries to make Restricted
Payments, to incur Indebtedness, to create Liens, to issue preferred or other
Capital Stock of Subsidiaries, to sell assets, to permit restrictions on
dividends and other payments by subsidiaries to the Issuers, to consolidate,
merge or sell all or substantially all of their assets, to engage in
transactions with Affiliates or to engage in certain businesses. The limitations
are subject to a number of important qualifications and exceptions. The Issuers
must report to the Trustee on compliance with such limitations.
15. Defaults and Remedies.
If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in aggregate principal amount of Securities then
outstanding may declare all the Securities to be due and payable immediately in
the manner and with the effect provided in the Indenture. Holders of Securities
may not enforce the Indenture or the Securities except as provided in the
Indenture. The Trustee is not obligated to enforce the Indenture, any
Intercreditor Agreement, the Security Documents or the Securities unless it has
received indemnity satisfactory to it. The Indenture permits, subject to certain
limitations therein provided, Holders of a majority in aggregate principal
amount of the Securities then outstanding to direct the Trustee in its exercise
of any trust or power. The Trustee may withhold from Holders of Securities
notice of any continuing Default or Event of Default (except a Default in
payment of principal or interest, including an accelerated payment) if it
determines that withholding notice is in their interest.
16. Trustee Dealings with Issuers.
The Trustee under the Indenture, in its individual or any other
capacity, may become the owner or pledgee of Securities and may otherwise deal
with the Issuers, their Subsidiaries or their respective Affiliates as if it
were not the Trustee.
17. No Recourse Against Others.
No director, officer, employee, direct or indirect stockholder or
incorporator, as such, of the Issuers or any of their Subsidiaries, including
but not limited to Parent and its stockholders, shall have any liability for any
obligation of the Issuers under the Securities or the Indenture, or for any
claim based on, in respect of or by reason of, such obligations or their
creation. Each Holder of a Security by accepting a Security waives and releases
all such liability. Such waiver and
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<PAGE>
release are part of the consideration for the issuance of the Securities.
18. Authentication.
This Security shall not be valid until the Trustee or authenticating
agent signs the certificate of authentication on this Security.
19. Abbreviations and Defined Terms.
Customary abbreviations may be used in the name of a Holder of a
Security or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
20. CUSIP Numbers.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Issuers have caused CUSIP numbers to be
printed on the Securities as a convenience to the Holders of the Securities. No
representation is made as to the accuracy of such numbers as printed on the
Securities and reliance may be placed only on the other identification numbers
printed hereon.
21. Registration Rights.
Pursuant to the Registration Rights Agreement, the Issuers will be
obligated upon the occurrence of certain events to consummate an exchange offer
pursuant to which the Holder of this Security shall, subject to certain
limitations, have the right to exchange this Series A Security for the Issuers'
[___]% First Mortgage Notes due 2003, Series B (the "Series B Securities"),
which will be registered under the Securities Act, in like principal amount and
having terms identical in all material respects as the Series A Securities. The
Holders shall be entitled to receive certain additional interest payments in the
event such exchange offer is not consummated and upon certain other conditions,
all pursuant to and in accordance with the terms of the Registration Rights
Agreement.
The Issuers will furnish to any Holder of a Security upon written
request and without charge a copy of the Indenture. Requests may be made to:
Statia Terminals International N.V., 800 Fairway Drive, Suite 295, Deerfield
Beach, FL 33441 Attn:
James F. Brenner.
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<PAGE>
GUARANTEE
The Subsidiary Guarantors (as defined in the Indenture referred to
in the Security upon which this notation is endorsed and each hereinafter
referred to as a "Subsidiary Guarantor," which term includes any successor
Person under the Indenture) have unconditionally guaranteed on a senior basis
(such guarantee by each Subsidiary Guarantor being referred to herein as the
"Guarantee") (i) the due and punctual payment of the principal amount of,
premium and interest on the Securities, whether at maturity, by acceleration or
otherwise, the due and punctual payment of interest on the overdue principal
amount and interest, if any, on the Securities, to the extent lawful, and the
due and punctual performance of all other obligations of the Issuers to the
Holders or the Trustee all in accordance with the terms set forth in Article Ten
of the Indenture and (ii) in case of any extension of time of payment or renewal
of any Securities or any of such other obligations, that the same will be
promptly paid in full when due or performed in accordance with the terms of the
extension or renewal, whether at stated maturity, by acceleration or otherwise.
No director, officer, employee, direct or indirect stockholder or
incorporator, as such, of any Subsidiary Guarantor, including but not limited to
Parent and its stockholders, shall have any liability for any obligations of the
Subsidiary Guarantors under the Guarantee or for any claim based on, in respect
of or by reason of such obligations or their creation.
The Guarantee shall not be valid or obligatory for any purpose until
the certificate of authentication on the Securities upon which the Guarantee is
noted shall have been executed by the Trustee under the Indenture by the manual
signature of one of its authorized officers.
STATIA TERMINALS CORPORATION N.V.
By:_________________________________
Name:
Title:
By:_________________________________
Name:
Title:
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<PAGE>
STATIA TERMINALS DELAWARE, INC.
By:_________________________________
Name:
Title:
By:_________________________________
Name:
Title:
STATIA TERMINALS, INC.
By:_________________________________
Name:
Title:
By:_________________________________
Name:
Title:
STATIA TERMINALS N.V.
By:_________________________________
Name:
Title:
By:_________________________________
Name:
Title:
STATIA TERMINALS HOLDCO II, INC.
By:_________________________________
Name:
Title:
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<PAGE>
SABA TRUSTCOMPANY N.V.
By:_________________________________
Name:
Title:
By:_________________________________
Name:
Title:
BICEN DEVELOPMENT CORPORATION N.V.
By:_________________________________
Name:
Title:
By:_________________________________
Name:
Title:
STATIA TERMINALS SOUTHWEST,INC.
By:_________________________________
Name:
Title:
By:_________________________________
Name:
Title:
W.P. COMPANY, INC.
By:_________________________________
Name:
Title:
By:_________________________________
Name:
Title:
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<PAGE>
SEVEN SEAS STEAMSHIP COMPANY, INC.
By:_________________________________
Name:
Title:
By:_________________________________
Name:
Title:
SEVEN SEAS STEAMSHIP COMPANY (SINT EUSTATIUS)
N.V.
By:_________________________________
Name:
Title:
By:_________________________________
Name:
Title:
POINT TUPPER MARINE SERVICES LIMITED
By:_________________________________
Name:
Title:
By:_________________________________
Name:
Title:
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<PAGE>
STATIA LABORATORY SERVICES, N.V.
By:_________________________________
Name:
Title:
By:_________________________________
Name:
Title:
STATIA TUGS N.V.
By:_________________________________
Name:
Title:
By:_________________________________
Name:
Title:
STATIA DELAWARE HOLDCO II, INC.
By:_________________________________
Name:
Title:
By:_________________________________
Name:
Title:
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<PAGE>
ASSIGNMENT FORM
I or we assign and transfer this Security to
________________________________________________________________________________
________________________________________________________________________________
(Print or type name, address and zip code of assignee or transferee)
________________________________________________________________________________
(Insert Social Security or other identifying number of assignee or transferee)
and irrevocably appoint ________________________________________________________
agent to transfer this Security on the books of the Issuers.
The agent may substitute another to act for him.
Dated:________________ Signed:_____________________________
(Sign exactly as name appears
on the other side of this
Security)
Signature Guarantee: ___________________________________________________________
Participant in a recognized Signature Guarantee Medallion
Program (or other signature guarantor program reasonably
acceptable to the Trustee)
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<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Issuers
pursuant to Section 4.15 or Section 6.14 of the Indenture, check the appropriate
box:
Section 4.15 [_____] or Section 6.14 [_____]
If you want to elect to have only part of this Security purchased by
the Issuers pursuant to Section 4.15 or Section 6.14 of the Indenture, state the
amount: $_____________
Date: ___________________ Your Signature: ______________________________
(Sign exactly as your name
appears on the other side of
this Security)
Signature Guarantee: ___________________________________________________________
Participant in a recognized Signature Guarantee
Medallion Program (or other signature guarantor program
reasonably acceptable to the Trustee)
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<PAGE>
EXHIBIT B
[FORM OF SERIES B SECURITY]
STATIA TERMINALS INTERNATIONAL N.V.
STATIA TERMINALS CANADA, INCORPORATED
11 3/4% First Mortgage Note due 2003, Series B
CUSIP No.:______
No.________________ $_______________
Statia Terminals International N.V., a Netherlands Antilles
corporation ("Statia"), and Statia Terminals Canada, Incorporated, a corporation
organized under the federal laws of Canada ("Statia Canada" and, together with
Statia, the "Issuers," which term includes any successor corporation), for value
received, hereby jointly and severally promise to pay to _______________________
or registered assigns, the principal sum of $135,000,000 United States Dollars,
on November 15, 2003.
Interest Payment Dates: May 15 and November 15 commencing May 15,
1997
Record Dates: May 1 and November 1
Reference is made to the further provisions of this Security
contained herein, which will for all purposes have the same effect as if set
forth at this place.
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<PAGE>
IN WITNESS WHEREOF, the Issuers have caused this Security to be
signed manually or by facsimile by its duly authorized officers.
Dated:
STATIA TERMINALS INTERNATIONAL N.V.
By:_________________________________
Name:
Title:
By: ________________________________
Name:
Title:
STATIA TERMINALS CANADA, INCORPORATED
By:_________________________________
Name:
Title:
By:_________________________________
Name:
Title:
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<PAGE>
This is one of the 11 3/4% First Mortgage Notes due 2003, Series B,
described in the within-mentioned Indenture.
Marine Midland Bank,
as Trustee
By _______________________________
Authorized Signatory
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<PAGE>
(REVERSE OF SECURITY)
STATIA TERMINALS INTERNATIONAL N.V.
STATIA TERMINALS CANADA, INCORPORATED
11 3/4% First Mortgage Note due 2003, Series B
1. Interest.
Statia Terminals International N.V., a Netherlands Antilles
corporation ("Statia"), and Statia Terminals Canada, Incorporated, a corporation
organized under the federal laws of Canada ("Statia Canada" and, together with
Statia, the "Issuers"), hereby jointly and severally promise to pay interest on
the principal amount of this Security at the rate per annum shown above. The
Issuers will pay interest semi-annually on May 15 and November 15 of each year
(the "Interest Payment Date"), commencing May 15, 1997. Interest on the
Securities will accrue from the most recent date to which interest has been paid
or, if no interest has been paid, from November 27, 1996. Interest will be
computed on the basis of a 360-day year of twelve 30-day months.
The Issuers shall pay interest on overdue principal from time to
time on demand at the rate borne by the Securities plus 2% and on overdue
installments of interest (without regard to any applicable grace periods) to the
extent lawful.
2. Method of Payment.
The Issuers shall pay interest on the Securities (except defaulted
interest) to the Persons who are the registered Holders at the close of business
on the Record Date immediately preceding the Interest Payment Date even if the
Securities are cancelled on registration of transfer or registration of exchange
after such Record Date. Holders must surrender Securities to a Paying Agent to
collect principal payments. The Issuers shall pay principal and interest in
money of the United States that at the time of payment is legal tender for
payment of public and private debts ("U.S. Legal Tender"). However, the Issuers
may pay principal and interest by wire transfer of U.S. Federal funds, or
interest by check payable in such U.S. Legal Tender. The Issuers may deliver any
such interest payment to the Paying Agent or to a Holder at the Holder's
registered address.
3. Paying Agent and Registrar.
Marine Midland Bank (the "Trustee") will act as Paying Agent and
Registrar. The Issuers may change any Registrar or co-Registrar without notice
to the Holders; however the Paying Agent
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shall always be the Trustee or any successor trustee under the Indenture.
4. Indenture and Guarantees.
The Issuers issued the Securities under an Indenture, dated as of
November 27, 1996 (the "Indenture"), among the Issuers, the Subsidiary
Guarantors and the Trustee. Capitalized terms herein are used as defined in the
Indenture unless otherwise defined herein. The terms of the Securities include
those stated in the Indenture and those made part of the Indenture by reference
to the Trust Indenture Act of 1939 (15 U.S.C. ss.ss. 77aaa-77bbbb) (the "TIA"),
as in effect on the date of the Indenture until such time as the Indenture is
qualified under the TIA, and thereafter as in effect on the date on which the
Indenture is qualified under the TIA, except as provided in the Indenture.
Notwithstanding anything to the contrary herein, the Securities are subject to
all such terms, and Holders of Securities are referred to the Indenture and the
TIA for a statement of them. The Securities are secured obligations of the
Issuers limited in aggregate principal amount to $135,000,000. Payment on each
Security is guaranteed on a senior basis, jointly and severally, by the
Subsidiary Guarantors pursuant to Article Ten of the Indenture.
5. Redemption.
(a) Optional Redemption. The Securities will be redeemable, at the
Issuers' option, in whole at any time or in part from time to time, on and after
November 15, 2000 at the following redemption prices (expressed as percentages
of the principal amount), together with accrued and unpaid interest, if any,
thereon to the Redemption Date if redeemed during the twelve-month period
beginning November 15:
Year Percentage
---- ----------
2000......................................................105.875%
2001......................................................102.938%
2002......................................................100.000%
provided that the Issuers may not redeem the Securities prior to the Fifth
Anniversary with the proceeds of Asset Sales.
(b) Optional Redemption upon Public Equity Offering. On or prior to
November 15, 1999, the Issuers may redeem up to 35% of the aggregate principal
amount of the Securities with the net cash proceeds of one or more Equity
Offerings at a redemption price equal to 111.75% of the principal amount
thereof, plus accrued and unpaid interest to the Redemption Date; provided that
(a) at least $88 million aggregate principal amount of the Securities remain
outstanding immediately after the occurrence of
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such redemption and (b) such redemption occurs within 60 days of the date of the
closing of any such Equity Offering.
(c) Tax Redemption. The Securities will be subject to redemption, in
whole but not in part, at the option of the Issuers at any time at 100% of the
principal amount thereof, plus accrued and unpaid interest, if any, to the
Redemption Date, if either of the Issuers or the Subsidiary Guarantors, as the
case may be, has become or would become obligated to pay, on the next date on
which any amount would be payable with respect to the Securities, any Additional
Amounts or Reimbursement Payments as a result of a change in, or amendment to,
the laws, treaties, regulations or rulings of any Taxing Authority, or any
change in, or amendment to, any official position regarding the application or
interpretation of such laws, regulations, treaties or rulings, which change or
amendment is announced or becomes effective on or after the Issue Date; provided
that the Issuers or the Subsidiary Guarantors, as the case may be, determine, in
their business judgment, that the obligation to pay such Additional Amounts or
Reimbursement Payments cannot be avoided by the use of reasonable measures
available to the Issuers or the Subsidiary Guarantors, as the case may be, (not
including substitution of the Obligors under the Securities).
(d) Selection of Securities for Redemption. If less than all of the
Securities are to be redeemed at any time, selection of the Securities to be
redeemed will be made by the Trustee from among the Outstanding Securities on a
pro rata basis, by lot or by any other method permitted in the Indenture.
6. Notice of Redemption.
Notice of redemption will be mailed at least 30 days but not more
than 60 days before the Redemption Date to each Holder of Securities to be
redeemed at such Holder's registered address. Securities in denominations of
$1,000 may be redeemed only in whole. The Trustee may select for redemption
portions (equal to $1,000 or any integral multiple thereof) of the principal of
Securities that have denominations larger than $1,000.
If any Security is to be redeemed in part only, the notice of
redemption that relates to such Security shall state the portion of the
principal amount thereof to be redeemed. A new Security in a principal amount
equal to the unredeemed portion thereof will be issued in the name of the Holder
thereof upon cancellation of the original Security. On and after the Redemption
Date, interest will cease to accrue on Securities or portions thereof called for
redemption.
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7. Offers to Purchase.
The Indenture provides that following certain Asset Sales, takings
by eminent domain and casualty occurrences, and subject to further limitations
contained therein, the Issuers shall make an offer to purchase certain amounts
of the Securities in accordance with the procedures set forth in the Indenture.
In addition, an Event of Default shall occur under the Indenture as a result of
a Change of Control or upon the occurrence of significant Asset Sales, takings
or destructions, prior to the Fifth Anniversary. Any such Event of Default may
be cured if an offer to purchase is made and consummated as described in the
Indenture.
8. Security Documents.
In order to secure the due and punctual payment of the principal of
and interest on the Securities and all other amounts payable by the Issuers
under the Indenture and the Securities when and as the same shall be due and
payable, whether at maturity, by acceleration or otherwise, according to the
terms of the Securities and the Indenture, the Pledgors have granted Liens on
the Collateral to the Collateral Agent for the benefit of the Trustee and the
Holders of Securities pursuant to the Indenture, the Intercreditor Agreement and
the Security Documents.
Each Holder, by accepting a Security, agrees to all of the terms and
provisions of the Security Documents and the Intercreditor Agreement, as the
same may be amended from time to time pursuant to the respective provisions
thereof and the Indenture.
The Trustee, the Collateral Agent and each Holder acknowledge that a
release of any of the Collateral or any Lien strictly in accordance with the
terms and provisions of any of the Security Documents and the terms and
provisions of the Indenture will not be deemed for any purpose to be an
impairment of the security under the Indenture.
Under certain circumstances set forth in the Indenture, the Issuers
may incur Additional Secured Indebtedness that will share ratably in the
Collateral with Holders of the Securities.
9. Denominations; Transfer; Exchange.
The Securities are in registered form, without coupons, in
denominations of U.S.$1,000 and integral multiples of U.S.$1,000. A Holder shall
register the transfer of or exchange Securities in accordance with the
Indenture. The Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay certain transfer
taxes or similar governmental charges payable in connection
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therewith as permitted by the Indenture. The Registrar need not register the
transfer of or exchange any Securities or portions thereof selected for
redemption, except the unredeemed portion of any security being redeemed in
part.
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10. Persons Deemed Owners.
The registered Holder of a Security shall be treated as the owner of
it for all purposes.
11. Unclaimed Funds.
If funds for the payment of principal or interest remain unclaimed
for two years, the Trustee and the Paying Agent will repay the funds to the
Issuers at its request. After that, all liability of the Trustee and Paying
Agent with respect to such funds shall cease.
12. Discharge.
The Issuers may be discharged from their obligations under the
Indenture and the Securities except for certain provisions thereof upon
satisfaction of certain conditions specified in the Indenture.
13. Amendment; Supplement; Waiver.
Subject to certain exceptions, the Indenture, or the Securities may
be amended or supplemented with the written consent (which may include consents
obtained in connection with a tender offer or exchange offer for securities) of
the Holders of at least a majority in aggregate principal amount of the
Securities then outstanding (75% with respect to the Change of Control
provisions and the Obligation to make an Offer to Purchase), and any existing
Default or Event of Default or compliance with any provision may be waived other
than any continuing Default or Event of Default in the payment of the principal
amount of, premium, if any, or interest on the Securities with the consent
(which may include consents obtained in connection with a tender offer or
exchange offer for securities) of the Holders of a majority in aggregate
principal amount of the Securities then outstanding. Without the consent of any
Holder, the parties thereto may amend or supplement the Indenture, the Security
Documents or the Securities to, among other things, cure any ambiguity, defect
or inconsistency, provide for uncertificated Securities in addition to or in
place of certificated Securities to provide for the assumption of the Issuers'
obligations to Holders in the case of a merger or acquisition or comply with any
requirements of the Commission in connection with the qualification of the
Indenture under the TIA, or make any other change that does not materially
adversely affect the rights of any Holder of a Security.
14. Restrictive Covenants.
The Indenture contains certain covenants that, among other things,
limit the ability of the Issuers and their
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subsidiaries to make Restricted Payments, to incur Indebtedness, to create
Liens, to issue preferred or other Capital Stock of Subsidiaries, to sell
assets, to permit restrictions on dividends and other payments by subsidiaries
to the Issuers, to consolidate, merge or sell all or substantially all of their
assets, to engage in transactions with Affiliates or to engage in certain
businesses. The limitations are subject to a number of important qualifications
and exceptions. The Issuers must report to the Trustee on compliance with such
limitations.
15. Defaults and Remedies.
If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in aggregate principal amount of Securities then
outstanding may declare all the Securities to be due and payable immediately in
the manner and with the effect provided in the Indenture. Holders of Securities
may not enforce the Indenture or the Securities except as provided in the
Indenture. The Trustee is not obligated to enforce the Indenture, the
Intercreditor Agreement, the Security Documents or the Securities unless it has
received indemnity satisfactory to it. The Indenture permits, subject to certain
limitations therein provided, Holders of a majority in aggregate principal
amount of the Securities then outstanding to direct the Trustee in its exercise
of any trust or power. The Trustee may withhold from Holders of Securities
notice of any continuing Default or Event of Default (except a Default in
payment of principal or interest, including an accelerated payment) if it
determines that withholding notice is in their interest.
16. Trustee Dealings with Issuers.
The Trustee under the Indenture, in its individual or any other
capacity, may become the owner or pledgee of Securities and may otherwise deal
with the Issuers, their Subsidiaries or their respective Affiliates as if it
were not the Trustee.
17. No Recourse Against Others.
No director, officer, employee, direct or indirect stockholder or
incorporator, as such, of the Issuers or any of their Subsidiaries, including
but not limited to Parent and its stockholders, shall have any liability for any
obligation of the Issuers under the Securities or the Indenture or for any claim
based on, in respect of or by reason of, such obligations or their creation.
Each Holder of a Security by accepting a Security waives and releases all such
liability. Such waiver and release are part of the consideration for the
issuance of the Securities.
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18. Authentication.
This Security shall not be valid until the Trustee or authenticating
agent signs the certificate of authentication on this Security.
19. Abbreviations and Defined Terms.
Customary abbreviations may be used in the name of a Holder of a
Security or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
20. CUSIP Numbers.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Issuers have caused CUSIP numbers to be
printed on the Securities as a convenience to the Holders of the Securities. No
representation is made as to the accuracy of such numbers as printed on the
Securities and reliance may be placed only on the other identification numbers
printed hereon.
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GUARANTEE
The Subsidiary Guarantors (as defined in the Indenture referred to
in the Security upon which this notation is endorsed and each hereinafter
referred to as a "Subsidiary Guarantor," which term includes any successor
Person under the Indenture) have unconditionally guaranteed on a senior basis
(such guarantee by each Subsidiary Guarantor being referred to herein as the
"Guarantee") (i) the due and punctual payment of the principal amount of,
premium and interest on the Securities, whether at maturity, by acceleration or
otherwise, the due and punctual payment of interest on the overdue principal
amount and interest, if any, on the Securities, to the extent lawful, and the
due and punctual performance of all other obligations of the Issuers to the
Holders or the Trustee all in accordance with the terms set forth in Article Ten
of the Indenture and (ii) in case of any extension of time of payment or renewal
of any Securities or any of such other obligations, that the same will be
promptly paid in full when due or performed in accordance with the terms of the
extension or renewal, whether at stated maturity, by acceleration or otherwise.
No director, officer, employee, direct or indirect stockholder or
incorporator, as such, of any Subsidiary Guarantor, including but not limited to
Parent and its stockholders, shall have any liability for any obligations of the
Subsidiary Guarantors under the Guarantee or for any claim based on, in respect
of or by reason of such obligations or their creation.
The Guarantee shall not be valid or obligatory for any purpose until
the certificate of authentication on the Securities upon which the Guarantee is
noted shall have been executed by the Trustee under the Indenture by the manual
signature of one of its authorized officers.
STATIA TERMINALS CORPORATION N.V.
By:_________________________________
Name:
Title:
By:_________________________________
Name:
Title:
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STATIA TERMINALS DELAWARE, INC.
By:_________________________________
Name:
Title:
STATIA TERMINALS, INC.
By:_________________________________
Name:
Title:
STATIA TERMINALS N.V.
By:_________________________________
Name:
Title:
STATIA DELAWARE HOLDCO II, INC.
By:_________________________________
Name:
Title:
SABA TRUSTCOMPANY N.V.
By:_________________________________
Name:
Title:
BICEN DEVELOPMENT CORPORATION N.V.
By:_________________________________
Name:
Title:
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STATIA TERMINALS SOUTHWEST,INC.
By:_________________________________
Name:
Title:
W.P. COMPANY, INC.
By:_________________________________
Name:
Title:
SEVEN SEAS STEAMSHIP COMPANY, INC.
By:_________________________________
Name:
Title:
SEVEN SEAS STEAMSHIP COMPANY (SINT EUSTATIUS)
N.V.
By:_________________________________
Name:
Title:
POINT TUPPER MARINE SERVICES LIMITED
By:_________________________________
Name:
Title:
STATIA LABORATORY SERVICES, N.V.
By:_________________________________
Name:
Title:
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STATIA TUGS N.V.
By:_________________________________
Name:
Title:
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ASSIGNMENT FORM
I or we assign and transfer this Security to
________________________________________________________________________________
________________________________________________________________________________
(Print or type name, address and zip code of assignee or transferee)
________________________________________________________________________________
(Insert Social Security or other identifying number of assignee or transferee)
and irrevocably appoint ________________________________________________________
agent to transfer this Security on the books of the Issuers.
The agent may substitute another to act for him.
Dated:________________ Signed:_____________________________
(Sign exactly as name appears
on the other side of this
Security)
Signature Guarantee: ___________________________________________________________
Participant in a recognized Signature Guarantee Medallion
Program (or other signature guarantor program reasonably
acceptable to the Trustee)
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OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Issuers
pursuant to Section 4.15 or Section 6.14 of the Indenture, check the appropriate
box:
Section 4.15 [_____] or Section 6.14 [_____]
If you want to elect to have only part of this Security purchased by
the Issuers pursuant to Section 4.15 or Section 6.14 of the Indenture, state the
amount: $___________
Dated:________________ Signed:_____________________________
(Sign exactly as name appears
on the other side of this
Security)
Signature Guarantee: ___________________________________________________________
Participant in a recognized Signature Guarantee Medallion
Program (or other signature guarantor program reasonably
acceptable to the Trustee)
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EXHIBIT C
FORM OF LEGEND FOR GLOBAL SECURITIES
Any Global Security authenticated and delivered hereunder shall bear
a legend (which would be in addition to any other legends required in the case
of a Restricted Security) in substantially the following form:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A
DEPOSITORY OR A NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY. THIS
SECURITY IS NOT EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A
PERSON OTHER THAN THE DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS SECURITY
(OTHER THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY THE DEPOSITORY TO A
NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE
DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY) MAY BE REGISTERED EXCEPT
IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
ISSUERS OR THEIR AGENTS FOR REGISTRATION OF TRANSFER, EXCHANGE, OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS
IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
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EXHIBIT D
CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER OF SECURITIES
Re: 11 3/4% First Mortgage Notes due 2003,
Series A (the "Securities") of
Statia Terminals International N.V. and
Statia Terminals Canada, Incorporated
This Certificate relates to $_______ principal amount of Securities
held in the form of* ___ a beneficial interest in a Global Security or* _______
Physical Securities by ______ (the "Transferor").
The Transferor:*
|_| has requested by written order that the Registrar deliver in
exchange for its beneficial interest in a Global Security held by the Depositary
a Physical Security or Physical Securities in definitive, registered form of
authorized denominations and an aggregate number equal to its beneficial
interest in such Global Security (or the portion thereof indicated above); or
|_| has requested the Registrar by written order to exchange or register
the transfer of a Physical Security or Physical Securities.
In connection with such request and in respect of each such
Security, the Transferor does hereby certify that the Transferor is familiar
with the Indenture relating to the above captioned Securities and the
restrictions on transfers thereof as provided in Section 2.16 of such Indenture,
and that the transfer of the Securities does not require registration under the
Securities Act of 1933, as amended (the "Act") because*:
|_| Such Security is being acquired for the Transferor's own account,
without transfer (in satisfaction of Section 2.16(a)(II)(A) or Section
2.16(d)(i)(A) of the Indenture).
|_| Such Security is being transferred to a "qualified institutional
buyer" (as defined in Rule 144A under the Act), in reliance on Rule 144A.
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|_| Such Security is being transferred to an institutional "accredited
investor" (within the meaning of subparagraphs (a)(1), (2), (3) or (7) of Rule
501 under the Act.
|_| Such Security is being transferred in reliance on Regulation S under
the Act.
|_| Such Security is being transferred in accordance with Rule 144 under
the Act.
|_| Such Security is being transferred in reliance on and in compliance
with another exemption from the registration requirements of the Act.
_______________________________
[INSERT NAME OF TRANSFEROR]
By: _________________________
[Authorized Signatory]
Date: _______________________
*Check applicable box.
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EXHIBIT E
Form of Certificate To Be
Delivered in Connection with
Transfers to Institutional Accredited Investors
______________,_____
Trustee
[Address]
Re: Statia Terminals International N.V.
and Statia Terminals Canada, Incorpo-
rated (collectively, the "Issuers")
under the Indenture (the "Indenture")
relating to 11 3/4% First Mortgage
Notes due 2003, Series A
Ladies and Gentlemen:
In connection with our proposed purchase of 11 3/4% First Mortgage
Notes due 2003, Series A (the "Securities"), of the Issuers, we confirm that:
(1) We have received such information as we deem necessary in order
to make our investment decision.
(2) We understand that any subsequent transfer of the Securities is
subject to certain restrictions and conditions set forth in the Indenture and
the undersigned agrees to be bound by, and not to resell, pledge or otherwise
transfer the Securities except in compliance with, such restrictions and
conditions and the Securities Act of 1933, as amended (the "Securities Act").
(3) We understand that the offer and sale of the Securities have not
been registered under the Securities Act, and that the Securities may not be
offered or sold within the United States or to, or for the account or benefit
of, U.S. Persons except as permitted in the following sentence. We agree, on our
own behalf and on behalf of each account for which we acquire any Securities,
that, prior to (x) the date which is three years after the later of the date of
original issuance of the Securities and (y) such later date, if any, as may be
required by applicable laws, the Securities may be offered, resold, pledged or
otherwise transferred only (a) to the Issuers, (b) inside the United States to a
Person whom we reasonably believe to be a "qualified institutional buyer" (as
defined in Rule 144A under the Securities Act) in compliance with Rule 144A
under the Securities Act, (c) inside the United States to a Person we
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reasonably believe to be an institutional "accredited investor" (as defined
below) that, prior to such transfer, furnishes to the Trustee a signed letter
substantially in the form hereof, (d) outside the United States to Persons other
than U.S. Persons in offshore transactions meeting the requirements of Rule 904
under Regulation S under the Securities Act, (e) pursuant to the exemption from
registration provided by Rule 144 under the Securities Act (if available), (f)
pursuant to an effective registration statement under the Securities Act or (g)
pursuant to another available exemption from the registration requirements of
the Securities Act, and, in each case, in accordance with any applicable
securities laws of any state of the United States or any other applicable
jurisdiction, and we further agree to provide to any Person purchasing
Securities from us a notice advising such purchaser that resales of the
Securities are restricted as stated herein.
(4) We understand that, on any proposed resale of Securities, we
will be required to furnish to the Trustee and the Issuers, such certification,
legal opinions and other information as the Trustee and the Issuers may
reasonably require to confirm that the proposed sale complies with the foregoing
restrictions. We further understand that the Securities purchased by us will
bear a legend to the foregoing effect.
(5) We are an institutional "accredited investor" (as defined in
Rule 501(a)(1), (2), (3) or (7) under the Securities Act) and have such
knowledge and experience in financial and business matters as to be capable of
evaluating the merits and risks of our investment in the Securities, and we and
any accounts for which we are acting are each able to bear the economic risk of
our or their investment, as the case may be.
(6) We are acquiring the Securities purchased by us for our account
or for one or more accounts (each of which is an institutional "accredited
investor") as to each of which we exercise sole investment discretion.
You and the Issuers are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceeding or official inquiry with respect
to the matters covered hereby.
Very truly yours,
[Name of Transferor]
By:_______________________________
[Authorized Signatory]
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Upon transfer the Securities would be registered in the name of the
new beneficial owner as follows:
Name:________________________________
Address:_____________________________
Taxpayer ID Number:__________________
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EXHIBIT F
Form of Certificate To Be
Delivered in Connection
with Regulation S Transfers
______________,_____
Trustee
[address]
Re: Statia Terminals International, N.V. and
Statia Terminals Canada, Incorporated
(collectively, the "Issuers") 11 3/4%
First Mortgage Notes due 2003, Series A
(the "Securities")
Ladies and Gentlemen:
In connection with our proposed sale of $135,000,00 aggregate
principal amount of the Securities, we confirm that such sale has been effected
pursuant to and in accordance with Regulation S under the Securities Act of
1933, as amended (the "Securities Act"), and, accordingly, we represent that:
(1) the offer of the Securities was not made to a Person in the
United States;
(2) either (a) at the time the buy offer was originated, the
transferee was outside the United States or we and any Person acting on
our behalf reasonably believed that the transferee was outside the United
States, or (b) the transaction was executed in, on or through the
facilities of a designated off-shore securities market and neither we nor
any Person acting on our behalf knows that the transaction has been
pre-arranged with a buyer in the United States;
(3) no directed selling efforts have been made in the United States
in contravention of the requirements of Rule 903(b) or Rule 904(b) of
Regulation S under the Securities Act, as applicable;
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act; and
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<PAGE>
(5) we have advised the transferee of the transfer restrictions
applicable to the Securities.
You and the Issuers are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby.
Very truly yours,
[Name of Transferor]
By:_______________________________
[Authorized Signature]
Upon transfer the Securities would be registered in the name of the
new beneficial owner as follows:
Name:________________________________
Address:_____________________________
Taxpayer ID Number:__________________
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Exhibit K
[FORM OF ADDITIONAL LENDER INTERCREDITOR AGREEMENT]
INTERCREDITOR AGREEMENT, dated as of , , among MARINE MIDLAND BANK,
a banking corporation and trust company organized and existing under the laws of
the State of New York, as trustee under the Indenture (as hereinafter defined)
(in such capacity, and together with any successors in such capacity, the
"Trustee"), and __________, as representative, trustee or agent under
_______________ (in such capacity, and together with any successors in such
capacity, the "Representative").
R E C I T A L S :
A. The Trustee is the trustee under that certain indenture dated as
of November 27, 1996 (as amended, amended and restated, supplemented or
otherwise modified from time to time, the "Indenture"; capitalized terms used
herein and not otherwise defined shall have the meanings assigned thereto in the
Indenture), by and among STATIA TERMINALS INTERNATIONAL N.V. ("Statia") and
STATIA TERMINALS CANADA, INCORPORATED ("Statia Canada"; together with Statia,
the "Issuers"), the Subsidiary Guarantors and the Trustee, pursuant to which the
Issuers have issued their 11 3/4% First Mortgage Notes due 2003 (the "First
Mortgage Notes") in the aggregate principal amount of U.S.$135,000,000. It is
contemplated that the Issuers may, after the Issue Date, issue certain exchange
notes (the "Exchange Notes"; together with the First Mortgage Notes, the
"Notes") pursuant to the Indenture.
B. The Indenture contemplates that the Issuers may incur Additional
Secured Indebtedness so long as (i) such Indebtedness is incurred in accordance
with Section 4.14 of the Indenture and (ii) the Consolidated Fixed Charge
Coverage Ratio determined in accordance with Section 4.04 of the Indenture is
satisfied. Pursuant to the Indenture, the holder of such Additional Secured
Indebtedness may share ratably in the Collateral with the Holders of the Notes;
provided, however, that the holder of such Additional Secured Indebtedness
executes and delivers this agreement.
C. To secure the payment and performance of the Issuers' and
Subsidiary Guarantors' obligations under the Indenture, the Guarantees and the
Notes, the Issuers and
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Subsidiary Guarantors have, pursuant to the Security Documents, granted mortgage
liens on and security interests in the Collateral to the Trustee for its benefit
and for the benefit of the Holders of the Notes and the holders of Additional
Secured Indebtedness (collectively, the "Secured Parties").
D. The Representative is the holder of that certain [Note or Credit
Agreement] (the "Representative Debt"), which is being entered into in
connection with the incurrence of the Additional Secured Indebtedness permitted
by, and incurred in accordance with, the provisions of the Indenture.
E. The parties hereto wish to enter into this agreement in order to
set forth their understanding with respect to certain matters, including,
without limitation, to clarify the rights of the Trustee and the duties and
responsibilities of the Trustee and to confirm that the Representative Debt and
the Notes shall be equally and ratably secured by the Collateral.
A G R E E M E N T :
The parties hereto agree as follows:
SECTION 1. Definitions. The following terms used herein shall have
the following meanings:
"Note Obligations" shall mean all unpaid principal of, and accrued
interest on, the Notes and all other obligations and liabilities of the Issuers
and the Subsidiary Guarantors to the Trustee and to the Holders of the Notes now
existing or hereafter incurred, under, arising out of or in connection with the
Notes, the Indenture or the Guarantees.
"Representative Debt Agreements" shall mean the agreements entered
into by the Issuers and/or the Subsidiary Guarantors governing or evidencing any
Additional Secured Indebtedness, copies of which are annexed hereto.
"Representative Debt Obligations" shall mean all the unpaid
principal of, and accrued interest on, any Additional Secured Indebtedness and
all other obligations and liabilities of the Issuers and the Subsidiary
Guarantors to the Representative under, arising out of, or in connection with,
any Representative Debt Agreement.
"Secured Obligations" shall mean, collectively, the Note Obligations
and the Representative Debt Obligations.
SECTION 2. Appointment As Agent. The Representative, on behalf of
itself and the holders of the Representative Debt, hereby designates and
appoints the Trustee to serve as agent, and
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irrevocably authorizes (and each holder of the Representative Debt, by its
acceptance of any note or other instrument evidencing the Representative Debt or
the benefit thereof, shall be deemed irrevocably to have authorized) the Trustee
to act as agent therefor for the purposes of executing and delivering, on behalf
thereof, the Security Documents and, subject to the provisions of this
agreement, enforcing the Secured Parties' rights in respect of the Collateral
and the obligations of the Issuers and the Subsidiary Guarantors under the
Security Documents.
SECTION 3. Exercise of Remedies. The Representative shall not
exercise any remedy in respect of the Collateral under the terms of the
Representative Debt Agreements including, without limitation, any action to
foreclose on or cause the conveyance of the Collateral, other than as set forth
herein. So long as any of the Note Obligations shall be outstanding, the Trustee
shall have the exclusive right to initiate, direct or forbear from exercising
any and all enforcement, foreclosure, sale or other actions relating to any
Collateral and the Representative's rights in respect thereof and of any such
actions shall be limited to joining any judicial proceeding relating thereto.
The Trustee shall have no duty or obligation with respect to the Collateral or
any of the Security Documents except as expressly provided in the Indenture, and
neither the Representative nor the holder of any Additional Secured Indebtedness
shall have any rights to direct the Trustee or cause the Trustee to take any
actions hereunder or under the Indenture. Nothing in this agreement shall create
or be deemed to create a fiduciary relationship of any kind between the Trustee
and the Representative or any holder of Additional Secured Indedtedness.
SECTION 4. Representations. The Representative represents and
warrants to the Trustee that (i) the Representative Debt is permitted to be
incurred by the Issuers pursuant to the Indenture, (ii) the Lien securing such
Representative Debt is (a) pari passu to the Liens granted pursuant to the
Security Documents and (b) permitted to be incurred pursuant to the Indenture.
SECTION 5. Application of Proceeds. In the event that, pursuant to
the provisions of Section 3 above, the Trustee forecloses on and sells or
otherwise receives proceeds in respect of any of the Collateral, the proceeds of
any such sale or other transaction shall be applied as follows:
First: to the payment of all costs and expenses payable to the
Trustee in connection with such sale or other transaction and any legal
proceedings relating thereto, and all other amounts due the Trustee under
Section 7.07 of the Indenture;
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Second: to the payment of all costs and expenses payable to the
Representative in connection with such sale or other transaction;
Third: pro rata to the Trustee and the Representative based on (i)
the aggregate amount of Note Obligations then outstanding and (ii) the aggregate
amount of Representative Debt Obligations then outstanding and permitted to be
incurred under the Indenture, in each case after giving effect to the payments
made pursuant to clauses First and Second above; and
Fourth: any surplus, if any, remaining after payment in full of the
Note Obligations and any other amounts owing under the Indenture and the
Representative Debt Obligations, shall be paid over to the Issuers or to
whosoever may be lawfully entitled thereto.
SECTION 6. Disclaimers, Indemnity, Etc.
(a) The Trustee shall have no duties or responsibilities except
those expressly set forth in this agreement, the Indenture and the Security
Documents. The Trustee shall not be responsible to any Secured Party for any
recitals, statements, representations or warranties contained in this agreement,
the Indenture, the Notes, the Guarantees, the Security Documents or any
Representative Debt Agreement (collectively, the "Financing Agreements") or in
any certificate or other document referred to or provided for in, or received by
any of them under, any of the Financing Agreements, or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of any of the
Financing Agreements or any other document referred to or provided for therein
or any Lien under the Security Documents or the perfection or priority of any
such Lien or for any failure by any party to perform any of its respective
obligations under any of the Financing Agreements. The Trustee may employ agents
and attorneys-in-fact and shall not be responsible, except as to money or
securities received by it or its authorized agents, for the negligence or
misconduct of any such agents or attorneys-in-fact selected by it with
reasonable care. Neither the Trustee nor any of its directors, officers,
employees or agents shall be liable or responsible for any action taken or
omitted to be taken by it or them hereunder or in connection herewith, except
for its or their own gross negligence or willful misconduct.
(b) The Trustee shall be entitled to rely upon any certification,
notice or other communication (including any thereof by telex, telecopy,
telegram or (cable) believed by it to be genuine and correct and to have been
signed or sent by or on behalf of the proper Person or Persons, and upon advice
and statements of legal counsel (including counsel to the Issuers or the
Subsidiary Guarantors), independent accountants and other experts selected by
the Trustee. The Trustee shall in all cases
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be fully protected in acting, or in refraining from acting, hereunder in
accordance with the Indenture, and any action taken or failure to act pursuant
thereto, shall be binding on all of the Secured Parties.
(c) The Trustee (on behalf of the Holders of the Notes) and the
Representative (on behalf of the holders of the Representative Debt) agree that
the Secured Parties represented by each of them shall indemnify the Trustee,
ratably in accordance with the amount of the Secured Obligations held by such
Secured Parties, to the extent neither reimbursed by the Issuers or the
Subsidiary Guarantors nor reimbursed out of any proceeds pursuant to the
applicable provisions of the Security Documents, for any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind and nature whatsoever which may be imposed
on, incurred by or asserted against the Trustee in any way relating to or
arising out of any of the Financing Agreements or any other documents
contemplated by or referred to therein or the transactions contemplated thereby
or the enforcement of any of the terms of any thereof; provided, however, that
no such Secured Party shall be liable for any of the foregoing to the extent
they arise from the negligence or willful misconduct of the Trustee.
(d) Except for action expressly required of the Trustee hereunder,
the Trustee shall, notwithstanding anything to the contrary in Section 6(c)
hereof, in all cases be fully justified in failing or refusing to act hereunder
or under any or all of the Security Documents unless and until it shall be
further indemnified to its satisfaction by the Secured Parties against any and
all loss, cost, expense or liability which may be incurred by it by reason of
taking or refusing to take any such action. The Trustee shall not be required to
take any action that is in its opinion contrary to law or to the terms of this
agreement or any or all of the Security Documents, or which would in its opinion
subject it or any of its officers, employees or directors to liability.
(e) The Trustee may deem and treat the payee of any promissory note
or other evidence of indebtedness relating to the Secured Obligations as the
owner thereof for all purposes hereof unless and until a written notice of the
assignment or transfer thereof, signed by such payee and in form satisfactory to
the Trustee, shall have been filed with the Trustee. Any request, authority or
consent of any Person who at the time of making such request or giving such
authority or consent is the holder of any such note or other evidence of
indebtedness shall be conclusive and binding on any subsequent holder,
transferee or assignee of such note or other evidence of indebtedness and of any
note or notes or other evidences of indebtedness issued in exchange therefor.
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(f) Except as expressly provided herein and in the Security
Documents, the Trustee shall have no duty to take any affirmative steps with
respect to the collection of amounts payable in respect of the Collateral. The
Trustee shall incur no liability as a result of any sale of any Collateral at
any private sale.
(g) Until such time as the Secured Obligations shall have been paid
in full, the Trustee may at any time, by giving written notice to the other
parties hereto, resign and be discharged of the responsibilities hereby created,
such resignation to become effective upon (A) the appointment of a successor
Trustee and (B) the acceptance of such appointment by such successor Trustee. If
no successor Trustee shall be appointed and shall have accepted such appointment
within 90 days after the Trustee gives the aforesaid notice of resignation, the
Trustee may apply to any court of competent jurisdiction to appoint a successor
Trustee to act until such time, if any, as a successor shall have been appointed
pursuant to the Indenture. The Trustee who has resigned shall be entitled to all
fees, costs and expenses to the extent incurred or arising, or relating to
events occurring, before its resignation or removal.
(h) In no event shall the Trustee or any party or Secured Party be
liable or responsible for any funds or investments of funds held by either of
the Issuers or any Subsidiary Guarantor.
(i) In the performance of its duties or obligations hereunder, the
Trustee shall be entitled to the benefits and exculpations set forth in Articles
Seven, Eleven and Twelve of the Indenture.
SECTION 7. Sale of Collateral. The Representative agrees that the
Trustee shall have the right at any time and from time to time pursuant to the
Indenture to permit, or to forbear from permitting, the Issuers and the
Subsidiary Guarantor to sell or convey all or any portion of assets constituting
Collateral to any third party. In the event that the Trustee consents to any
sale or disposition of any of the Collateral, the Liens on or pledges of the
Collateral pursuant to the Representative Debt Agreements shall be deemed
released upon the consummation of any such transaction. In connection therewith,
the Representative shall, upon request of the Trustee, execute and deliver to
the Issuers such mortgage satisfactions or other releases or appropriate
instruments to evidence the release or termination of such Lien on or pledge of
the Collateral as the Issuers or the Trustee shall request.
SECTION 8. Amendments; Refinancings. The Representative shall not
agree to any amendment of the Representative Debt Agreements affecting or
relating to the
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Collateral without the prior written consent of the Trustee. Nothing herein
shall limit the ability of the Issuers or the Subsidiary Guarantors and the
Trustee to agree to any refinancing terms, whether secured or unsecured, or to
any amendment or waiver relating to the Indenture, the Notes or the Security
Documents.
SECTION 9. Representative Cooperation in Refinancings. If there
shall be any refinancing or similar arrangement with respect to the obligations
under the Indenture (including subsequent refinancings) and the obligations
under such refinancing or other arrangement are secured by the Collateral, the
Representative shall enter into such amendments to this agreement or new
agreements as the Issuers shall request so that the representative, trustee or
agent under such refinancing or other arrangement shall have substantially
similar rights as the Trustee hereunder.
SECTION 10. Termination. This agreement shall terminate on the
earlier to occur of (i) the payment or performance in full of all obligations of
the Issuers and Subsidiary Guarantors under the Indenture or under any agreement
or agreements pursuant to which such obligations are refinanced in whole or in
part (including subsequent refinancings) and/or (ii) the payment or performance
in full of all obligations of the Issuers or the Subsidiary Guarantors under the
Representative Debt Agreements. The Trustee shall (i) execute and deliver all
documents, agreements or other instruments as shall be necessary to transfer or
assign all the claims, estates, properties, rights, powers, trusts, duties,
authority and title of the Trustee hereunder and under the Security Documents to
the Representative and (ii) deliver all Collateral held by it or its agents to
the Representative.
SECTION 11. Possession of Collateral. The Trustee shall hold any
Collateral in its possession for the benefit of itself, the Secured Parties and
the Representative.
SECTION 12. No Benefit. This agreement shall not confer any rights
or benefits on the Issuers or the Subsidiary Guarantors, and is intended solely
for the benefit of the parties hereto and their respective beneficiaries and
successors and assigns.
SECTION 13. Notices. Any notice hereunder to (i) the Trustee shall
be given to the address and in the manner provided for in the Indenture and (ii)
the Representative shall be given to the addresses and in the manner provided
for in the Representative Debt Agreements.
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SECTION 14. Successors and Assigns. This agreement shall inure to
the benefit of and be binding upon the parties' respective successors and
assigns.
SECTION 15. Governing Law. This agreement shall be governed by and
construed in accordance with the laws of the State of New York without regard to
the principles of conflicts of law.
SECTION 16. Counterparts. This agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same instrument.
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IN WITNESS WHEREOF, this agreement was executed and delivered as of
the date first set forth above.
MARINE MIDLAND BANK,
as Trustee
By:_____________________________________________________________________________
Name:
Title:
[Name of Representative]
By:_____________________________________________________________________________
Name:
Title:
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REGISTRATION RIGHTS AGREEMENT
Dated as of November 27, 1996
by and among
STATIA TERMINALS INTERNATIONAL N.V.,
STATIA TERMINALS CANADA INCORPORATED,
THE SUBSIDIARY GUARANTORS NAMED HEREIN
and
DILLON, READ & CO. INC.
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<PAGE>
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This Registration Rights Agreement (the "Agreement") is made and
entered into as of November 27, 1996 by and among STATIA TERMINALS INTERNATIONAL
N.V., a Netherlands Antilles corporation ("Statia"), STATIA TERMINALS CANADA,
INCORPORATED, a corporation organized under the laws of Nova Scotia ("Statia
Canada" and, together with Statia, the "Issuers"), the SUBSIDIARY GUARANTORS (as
defined herein) and DILLON, READ & CO. INC. (the "Purchaser"). The execution and
delivery of this Agreement is a condition to the obligations of the Purchaser to
purchase $135,000,000 of the Issuers' 11 3/4% First Mortgage Notes due 2003
under the Purchase Agreement, dated as of November 22, 1996 (the "Purchase
Agreement"), by and among the Issuers and the Purchaser.
The Issuers, the Subsidiary Guarantors and the Purchaser hereby
agree as follows:
SECTION 1. DEFINITIONS
As used in this Agreement, the following capitalized terms shall
have the following meanings:
Act: The Securities Act of 1933, as amended, and the rules and
regulations promulgated by the Commission pursuant thereto.
Action: As defined in Section 8(c) of this Agreement.
Broker-Dealer: Any broker or dealer registered under the Exchange
Act.
Closing Date: The date that the Notes are purchased by the Purchaser
pursuant to the Purchase Agreement.
Commission: The Securities and Exchange Commission.
Consummate: A Registered Exchange Offer shall be deemed
"Consummated" for purposes of this Agreement upon the occurrence of (i) the
filing and effectiveness under the Act of the Exchange Offer Registration
Statement relating to the Notes to be issued in the Exchange Offer, (ii) the
maintenance of such Registration Statement continuously effective and the
keeping of the Exchange Offer open for a period not less than the minimum period
required pursuant to Section 3(b) of this Agreement and (iii) the delivery by
the Issuers to the Registrar under the
<PAGE>
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Indenture of New Notes in the same aggregate principal amount as the aggregate
principal amount of Old Notes that were so tendered.
Damages Payment Date: With respect to the Notes, each Interest
Payment Date.
Effectiveness Target Date: As defined in Section 5 of this
Agreement.
Exchange Act: The Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated by the Commission pursuant thereto.
Exchange Offer: The registration under the Act by the Issuers and
the Subsidiary Guarantors of the New Notes pursuant to a Registration Statement
pursuant to which the Issuers and the Subsidiary Guarantors offer the Holders of
all outstanding Transfer Restricted Securities the opportunity to exchange all
such outstanding Old Notes that are Transfer Restricted Securities held by such
Holders for New Notes in an aggregate principal amount equal to the aggregate
principal amount of the Old Notes that are Transfer Restricted Securities
tendered in such exchange offer by such Holders.
Exchange Offer Registration Statement: The Registration Statement
relating to the Exchange Offer, including the related Prospectus.
Exempt Resales: The transactions in which the Purchaser propose to
sell the Notes to (i) certain "qualified institutional buyers," as such term is
defined in Rule 144A under the Act, (ii) to a limited number of certain
institutional "accredited investors," as such term is defined in Rule 501(a)(1),
(2), (3) and (7) of Regulation D under the Act and (iii) other eligible
purchasers pursuant to Regulation S under the Act.
Holders: As defined in Section 2(b) of this Agreement.
Indenture: The Indenture, dated as of November 27, 1996, by and
among the Issuers, the Subsidiary Guarantors and Marine Midland Bank, as trustee
(the "Trustee"), pursuant to which the Notes are to be issued, as such Indenture
is amended or supplemented from time to time in accordance with its terms.
Interest Payment Date: As defined in the Notes.
<PAGE>
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NASD: National Association of Securities Dealers, Inc.
New Notes: The Issuers' 11 3/4% First Mortgage Notes due 2003 to be
issued pursuant to the Indenture in connection with the Exchange Offer and
evidencing the same debt as the Old Notes.
Notes: Old Notes and New Notes.
Old Notes: The Issuers' 11 3/4% First Mortgage Notes due 2003 to be
issued pursuant to the Indenture on the Closing Date.
Person: An individual, partnership, corporation, trust or
unincorporated organization, or a government or agency or political subdivision
thereof.
Prospectus: The prospectus included in a Registration Statement, as
amended or supplemented by any prospectus supplement and by all other amendments
and supplements thereto, including post-effective amendments, and all material
incorporated by reference or deemed to be incorporated by reference, if any, in
such Prospectus.
Purchaser: Dillon, Read & Co. Inc.
Record Holder: With respect to any Damages Payment Date relating to
the First Mortgage Notes, each Person who is a Holder of First Mortgage Notes on
the record date with respect to the Interest Payment Date on which such Damages
Payment Date shall occur.
Registration Default: As defined in Section 5 of this Agreement.
Registration Statement: Any registration statement of the Issuers
and the Subsidiary Guarantors relating to (a) an offering of New Notes pursuant
to an Exchange Offer or (b) the registration for resale of Transfer Restricted
Securities pursuant to the Shelf Registration Statement that is filed pursuant
to the provisions of this Agreement, in each case, including the Prospectus
included therein, all amendments and supplements thereto (including pre- and
post-effective amendments) and all exhibits and material incorporated by
reference or deemed to be incorporated by reference, if any, therein.
Shelf Filing Deadline: As defined in Section 4(a) of this Agreement.
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Shelf Registration Statement: As defined in Section 4(a) of this
Agreement.
Subsidiary: With respect to any Person, any other Person of which a
majority of the equity ownership or the voting securities is at the time owned,
directly or indirectly, by such Person or by one or more other subsidiaries of
such Person or a combination thereof.
Subsidiary Guarantors: Each Subsidiary of the Issuers that, pursuant
to the Indenture, is required to become a guarantor of the obligations of the
Issuers under the Notes and the Indenture.
TIA: The Trust Indenture Act of 1939, as amended (15 U.S.C. Section
77aaa-77bbbb), as in effect on the date of the Indenture.
Transfer Restricted Securities: Each Note until the earliest to
occur of (i) the date on which such Note has been exchanged by a person other
than a Broker-Dealer for a New Note in the Exchange Offer, (ii) following the
exchange by a Broker-Dealer in the Exchange Offer of a Note for a New Note, the
date on which such New Note is sold to a purchaser who receives from such
Broker-Dealer on or prior to the date of such sale a copy of the prospectus
contained in the Exchange Offer Registration Statement, (iii) the date on which
such Note has been effectively registered under the Act and disposed of in
accordance with the Shelf Registration Statement or (iv) the date on which such
Note is distributed to the public pursuant to Rule 144 under the Act.
Underwritten Registration or Underwritten Offering: A registration
in which securities of the Issuers are sold to an underwriter for reoffering to
the public pursuant to an effective Registration Statement.
SECTION 2. SECURITIES SUBJECT TO THIS AGREEMENT
(a) Transfer Restricted Securities. The securities entitled to the
benefits of this Agreement are the Transfer Restricted Securities.
(b) Holders of Transfer Restricted Securities. A Person is deemed to
be a holder of Transfer Restricted Securities (each, a "Holder") whenever such
Person owns Transfer Restricted Securities.
<PAGE>
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SECTION 3. REGISTERED EXCHANGE OFFER
(a) Unless the Exchange Offer shall not be permissible under
applicable federal law or Commission policy, the Issuers shall (i) cause to be
filed with the Commission as soon as practicable on or prior to 45 days after
the Closing Date, a Registration Statement under the Act relating to the New
Notes and the Exchange Offer and (ii) use their best efforts to cause such
Registration Statement declared effective by the Commission as soon as
practicable on or prior to 105 days after the Closing Date. In connection with
the foregoing, the Issuers shall (A) file all pre-effective amendments to such
Registration Statement as may be necessary to cause such Registration Statement
to become effective, (B) if applicable, file a post-effective amendment to such
Registration Statement pursuant to Rule 430A under the Act, (C) cause all
necessary filings in connection with the registration and qualification of the
New Notes to be made under the Blue Sky laws of such jurisdictions as are
necessary to permit Consummation of the Exchange Offer (provided, however, that
the Issuers shall not be obligated to qualify as foreign corporations in any
jurisdiction in which they are not so qualified or to take any action that would
subject them to general service of process or taxation in any jurisdiction where
they are not so subject) and (D) upon the effectiveness of such Registration
Statement, commence the Exchange Offer and use their best efforts to issue on or
prior to 45 days after the date on which such Registration Statement is declared
effective by the Commission, New Notes in exchange for all Old Notes tendered
prior thereto in the Exchange Offer. The Exchange Offer shall be on the
appropriate form permitting registration of the New Notes to be offered in
exchange for the Transfer Restricted Securities and to permit resales of New
Notes held by Broker-Dealers as contemplated by Section 3(c) below. If, after
such Exchange Offer Registration Statement initially is declared effective by
the Commission, the Exchange Offer or the issuance of New Notes under the
Exchange Offer or the resale of New Notes received by Broker-Dealers in the
Exchange Offer as contemplated by Section 3(c) below is interfered with by any
stop order, injunction or other order or requirement of the Commission or any
other governmental agency or court, such Registration Statement shall be deemed
not to have become effective for purposes of this Agreement during the period
that such stop order, injunction or other similar order or requirement shall
remain in effect.
(b) The Issuers shall cause the Exchange Offer Registration
Statement to be effective continuously and shall keep the Exchange Offer open
for a period of not less than the
<PAGE>
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minimum period required under applicable federal and state securities laws to
Consummate the Exchange Offer; provided, however, that in no event shall such
period be less than 20 business days nor longer than 90 days. The Issuers shall
cause the Exchange Offer to comply with all applicable federal and state
securities laws. The Issuers shall only offer to exchange New Notes for Old
Notes in the Exchange Offer, and only the New Notes shall be registered under
the Exchange Offer Registration Statement. The Issuers shall use their best
efforts to cause the Exchange Offer to be Consummated on the earliest
practicable date after the Exchange Offer Registration Statement has become
effective, but in no event later than 45 business days after such effective
date.
(c) The Issuers shall indicate in a "Plan of Distribution" section
contained in the Prospectus included in the Exchange Offer Registration
Statement that any Broker-Dealer that holds Old Notes that are Transfer
Restricted Securities and that were acquired for its own account as a result of
market-making activities or other trading activities (other than Transfer
Restricted Securities acquired directly from the Issuers), may exchange such Old
Notes pursuant to the Exchange Offer; provided, however, that such Broker-Dealer
may be deemed to be an "underwriter" within the meaning of the Act and must,
therefore, deliver a prospectus meeting the requirements of the Act in
connection with any resales of the New Notes received by such Broker-Dealer in
the Exchange Offer. Such "Plan of Distribution" section shall allow the use of
the Prospectus by all Persons subject to the prospectus delivery requirements of
the Act, including participating Broker-Dealers, and shall also contain all
other information with respect to such resales by Broker-Dealers that the
Commission may require to permit such resales pursuant thereto, but such "Plan
of Distribution" shall not name any such Broker-Dealer or disclose the amount of
Notes held by any such Broker-Dealer except to the extent required by the
Commission as a result of a change in policy after the date of this Agreement.
The Issuers shall use their best efforts to keep the Exchange Offer
Registration Statement continuously effective, supplemented and amended as
required by the provisions of Section 6(c) below to the extent necessary to
ensure that it is available for resales of Notes acquired by Broker-Dealers for
their own accounts as a result of market-making activities or other trading
activities, and to ensure that it conforms with the requirements of this
Agreement, the Act and the policies, rules and regulations of the Commission as
announced from time to time, for a period of 180 days from the date on which the
Exchange Offer
<PAGE>
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Registration Statement is declared effective. The Issuers shall provide
sufficient copies of the latest version of such Prospectus to Broker-Dealers
promptly upon request at any time during such 180-day period in order to
facilitate such resales.
(d) The Issuers shall not consummate the Exchange Offer after six
months following the Closing Date.
SECTION 4. SHELF REGISTRATION
(a) Shelf Registration. If (i) the Issuers are not required to file
an Exchange Offer Registration Statement or to consummate the Exchange Offer
because the Exchange Offer is not permitted by applicable law or Commission
policy or (ii) any Holder of Transfer Restricted Securities shall notify the
Issuers within 20 business days of the Consummation of the Exchange Offer that
such Holder (A) is prohibited by applicable law or Commission policy from
participating in the Exchange Offer, or (B) may not resell the New Notes
acquired by it in the Exchange Offer to the public without delivering a
prospectus and the Prospectus contained in the Exchange Offer Registration
Statement is not appropriate or available for such resales by such Holder or (C)
is a Broker-Dealer and holds Old Notes (including the Purchaser who holds Old
Notes as part of an unsold allotment from the original offering of the Notes)
acquired directly from the Issuers or one of their Affiliates or (iii) the
Issuers do not consummate the Exchange Offer on or prior to six months following
the Closing Date, then the Issuers shall (x) cause to be filed a shelf
registration statement pursuant to Rule 415 under the Act, which may be an
amendment to the Exchange Offer Registration Statement (in either event, the
"Shelf Registration Statement"), on or prior to the earliest to occur of (1) the
45th day after the date on which the Issuers determine that they are not
required to file the Exchange Offer Registration Statement or (2) the 45th day
after the date on which the Issuers receive notice from a Holder of Transfer
Restricted Securities as contemplated by clause (ii) above (such earliest date
being the "Shelf Filing Deadline"), which Shelf Registration Statement shall
provide for resales of all Transfer Restricted Securities the Holders of which
shall have provided the information required pursuant to Section 4(b) of this
Agreement, and (y) use their best efforts to cause such Shelf Registration
Statement to be declared effective by the Commission on or before the 105th day
after the Shelf Filing Deadline. The Issuers shall use their best efforts to
keep such Shelf Registration Statement continuously effective, supplemented and
amended as required by the provisions of Sections 6(b) and (c) of this Agreement
to the extent necessary to ensure that it is available for resales of
<PAGE>
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Notes by the Holders of Transfer Restricted Securities entitled to the benefit
of this Section 4(a) and to ensure that it conforms with the requirements of
this Agreement, the Act and the policies, rules and regulations of the
Commission as announced from time to time, for a continuous period of three
years following the date on which such Shelf Registration Statement becomes
effective under the Act or such shorter period that will terminate when all the
Notes covered by the Shelf Registration Statement have been sold pursuant to
such Shelf Registration Statement.
(b) Provision by Holders of Certain Information in Connection with
the Shelf Registration Statement. No Holder of Transfer Restricted Securities
may include any of its Transfer Restricted Securities in any Shelf Registration
Statement pursuant to this Agreement unless and until such Holder furnishes to
the Issuers in writing, within 20 business days after receipt of a request
therefor, such information as the Issuers may reasonably request for use in
connection with any Shelf Registration Statement or Prospectus or preliminary
Prospectus included in such Shelf Registration Statement. No Holder of Transfer
Restricted Securities shall be entitled to liquidated damages pursuant to
Section 5 of this Agreement unless and until such Holder shall have used its
best efforts to provide all such reasonably requested information. Each Holder
as to which any Shelf Registration Statement is being effected agrees to furnish
promptly to the Issuers all information required to be disclosed to make the
information previously furnished to the Issuers by such Holder not materially
misleading.
SECTION 5. LIQUIDATED DAMAGES
If (i) any of the Registration Statements required by this Agreement
is not filed with the Commission on or prior to the date specified for such
filing in this Agreement, (ii) any of such Registration Statements has not been
declared effective by the Commission on or prior to the date specified for such
effectiveness in this Agreement (the "Effectiveness Target Date"), (iii) the
Exchange Offer has not been Consummated within 45 business days after the
Effectiveness Target Date with respect to the Exchange Offer Registration
Statement or (iv) any Registration Statement required by this Agreement is filed
and declared effective but shall thereafter cease to be effective or usable in
connection with resales of Transfer Restricted Securities during the periods
required by this Agreement (each such event referred to in clauses (i) through
(iv), a "Registration Default"), the Issuers hereby jointly and severally agree
to pay liquidated damages to each Holder of Transfer
<PAGE>
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Restricted Securities with respect to the first 90-day period immediately
following the occurrence of such Registration Default, in an amount equal to
$.05 per week per $1,000 principal amount of Notes constituting Transfer
Restricted Securities held by such Holder for each week or portion thereof that
the Registration Default continues. The amount of the liquidated damages shall
increase by an additional $.05 per week per $1,000 in principal amount of Notes
constituting Transfer Restricted Securities with respect to each subsequent
90-day period until all Registration Defaults have been cured, up to a maximum
amount of liquidated damages of $.30 per week per $1,000 in principal amount of
Notes constituting Transfer Restricted Securities. Notwithstanding the
foregoing, the Issuers shall not be required to pay liquidated damages to each
Holder of Transfer Restricted Securities if the Registration Default arises from
the failure of the Issuers to file, or cause to become effective, a Shelf
Registration Statement within the time period required by Section 4 of this
Agreement and such Registration Default is by reason of the failure of the
Holders to make the representations required pursuant to Section 4(b) of this
Agreement, or provide the information reasonably requested by the Issuers, the
NASD or any other regulatory agency having jurisdiction over any of the Holders.
All accrued liquidated damages shall be paid by the Issuers on each Damages
Payment Date to the Global Note Holders by wire transfer of immediately
available funds or by federal funds check and to the Holders of certificated
securities by mailing a check to such Holders' registered addresses. Following
the cure of all Registration Defaults relating to any particular Transfer
Restricted Securities, the accrual of liquidated damages with respect to such
Transfer Restricted Securities will cease.
All obligations of the Issuers set forth in the preceding paragraph
that are outstanding with respect to any Transfer Restricted Security at the
time such security ceases to be a Transfer Restricted Security shall survive
until such time as all such obligations with respect to such Transfer Restricted
Security shall have been satisfied in full.
SECTION 6. REGISTRATION PROCEDURES
(a) Exchange Offer Registration Statement. In connection with the
Exchange Offer, the Issuers and the Subsidiary Guarantors shall comply with all
of the provisions of Section 6(c) below, shall use their best efforts to effect
such exchange to permit the sale of Transfer Restricted Securities being sold in
accordance with the intended method or methods of distribution thereof, and
shall comply with all of the following provisions:
<PAGE>
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(i) If in the reasonable opinion of special U.S. counsel to the
Issuers there is a question as to whether the Exchange Offer is permitted
by applicable law, the Issuers hereby agree to seek a no-action letter or
other favorable decision from the Commission allowing the Issuers to
Consummate an Exchange Offer for such Old Notes. The Issuers hereby agree
to pursue the issuance of such a decision to the Commission staff level
but shall not be required to take commercially unreasonable action to
effect a change of Commission policy. The Issuers hereby agree, however,
to (A) participate in telephonic conferences with the Commission, (B)
deliver to the Commission an analysis prepared by special counsel to the
Issuers setting forth the legal bases, if any, upon which such counsel has
concluded that such an Exchange Offer should be permitted and (C)
diligently pursue a resolution (which need not be favorable) by the
Commission of such submission.
(ii) As a condition to its participation in the Exchange Offer
pursuant to the terms of this Agreement, each Holder of Transfer
Restricted Securities shall furnish, upon the request of the Issuers,
prior to the Consummation of the Exchange Offer, a written representation
to the Issuers (which may be contained in the letter of transmittal
contemplated by the Exchange Offer Registration Statement) to the effect
that (A) it is not an affiliate of any of the Issuers or the Subsidiary
Guarantors, (B) it is not engaged in, and does not intend to engage in,
and has no arrangement or understanding with any person to participate in,
a distribution of the New Notes to be issued in the Exchange Offer and (C)
it is acquiring the New Notes in its ordinary course of business. In
addition, all such Holders of Transfer Restricted Securities shall
otherwise cooperate in the Issuers' preparations for the Exchange Offer.
(iii) The Issuers and the Purchaser acknowledge that the staff of
the Commission has taken the position that any broker-dealer that owns New
Notes that were received by such broker-dealer for its own account in the
Exchange Offer (a "Participating Broker-Dealer") may be deemed to be an
"underwriter" within the meaning of the Act and must deliver a prospectus
meeting the requirements of the Act in connection with any resale of such
New Notes (other than a resale of an unsold allotment resulting from the
original offering of the Notes).
The Issuers and the Purchaser also acknowledge that it is the
Commission staff's position that if the Prospectus
<PAGE>
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contained in the Exchange Offer Registration Statement includes a plan of
distribution containing a statement to the above effect and the means by
which Participating Broker-Dealers may resell the New Notes, without
naming the Participating Broker-Dealers or specifying the amount of New
Notes owned by them, such Prospectus may be delivered by Participating
Broker-Dealers to satisfy their prospectus delivery obligations under the
Act in connection with resales of New Notes for their own accounts, so
long as the Prospectus otherwise meets the requirements of the Act.
(b) Shelf Registration Statement. In the event that a Shelf
Registration Statement is required by this Agreement, the Issuers shall comply
with all the provisions of Section 6(c) of this Agreement and shall use their
best efforts to effect such registration to permit the sale of the Transfer
Restricted Securities being sold in accordance with the intended method or
methods of distribution of such Transfer Restricted Securities and, in
connection therewith, the Issuers will as expeditiously as possible prepare and
file with the Commission a Shelf Registration Statement relating to the
registration on any appropriate form under the Act, which form shall be
available for the sale of the Transfer Restricted Securities in accordance with
the intended method or methods of distribution of such Transfer Restricted
Securities.
(c) General Provisions. In connection with any Registration
Statement and any Prospectus required by this Agreement to permit the sale or
resale of Transfer Restricted Securities (including, without limitation, any
Registration Statement and the related Prospectus, to the extent that the same
are required to be available to permit resales of Notes by Broker-Dealers), each
of the Issuers shall:
(i) use its best efforts to keep such Registration Statement
continuously effective for the applicable time period required hereunder
and provide all requisite financial statements (including, if required by
the Act or any regulation thereunder, financial statements of the
Subsidiary Guarantors) for the period specified in Section 3 or 4 of this
Agreement, as applicable; upon the occurrence of any event that would
cause any such Registration Statement or the Prospectus contained therein
(A) to contain a material misstatement or omission or (B) not to be
effective and usable for resale of Transfer Restricted Securities during
the period required by this Agreement, the Issuers shall promptly notify
the Holders to suspend use of the Prospectus, and the Holders shall
suspend use of the
<PAGE>
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Prospectus, and such Holders shall not communicate non-public information
to any third party, in violation of the securities laws, until the Issuers
have made an appropriate amendment to such Registration Statement, in the
case of clause (A), correcting any such misstatement or omission, and, in
the case of either clause (A) or (B), the Issuers shall use their best
efforts to cause such amendment to be declared effective and such
Registration Statement and the related Prospectus to become usable for
their intended purpose(s) as soon as practicable thereafter;
(ii) prepare and file with the Commission such amendments and
post-effective amendments to such Registration Statement as may be
necessary to keep the Registration Statement effective for the applicable
period set forth in Section 3 or 4 of this Agreement, or such shorter
period as will terminate when all Transfer Restricted Securities covered
by such Registration Statement have been sold; cause the Prospectus to be
supplemented by any required Prospectus supplement, and as so supplemented
to be filed pursuant to Rule 424 under the Act during the applicable time
period required hereunder and to comply fully with the applicable
provisions of Rules 424 and 430A under the Act in a timely manner; and
comply with the provisions of the Act and the Exchange Act with respect to
the disposition of all Transfer Restricted Securities covered by such
Registration Statement during such period in accordance with the intended
method or methods of distribution by the sellers of such securities set
forth in such Registration Statement as so amended or in such Prospectus
as so supplemented;
(iii) advise the underwriter(s), if any, and selling Holders
promptly and, if requested by such Persons, to confirm such advice in
writing, (A) when the Prospectus or any prospectus supplement or
post-effective amendment has been filed and, with respect to any
Registration Statement or any post-effective amendment thereto, when the
same has become effective, (B) of any request by the Commission for
amendments to the Registration Statement or amendments or supplements to
the Prospectus or for additional information relating to such Registration
Statement or Prospectus, (C) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement under the
Act or of the suspension by any state securities commission of the
qualification of the Transfer Restricted Securities for offering or sale
in any jurisdiction, or the initiation of any proceeding for any of the
preceding purposes, (D) of the existence of any fact or the happening
<PAGE>
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of any event that makes any statement of a material fact made in the
Registration Statement, the Prospectus, any amendment or supplement to
such Registration Statement or Prospectus, as the case may be, or any
document incorporated by reference in such Registration Statement or
Prospectus untrue in any material respect, or that requires the making of
any additions to or changes in the Registration Statement or the
Prospectus in order to make the statements in such Registration Statement
or Prospectus not misleading and that in the case of the Prospectus, it
will not contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading. If at any time the Commission shall issue any
stop order suspending the effectiveness of the Registration Statement, or
any state securities commission or other regulatory authority shall issue
an order suspending the qualification or exemption from qualification of
the Transfer Restricted Securities under state securities or Blue Sky
laws, the Issuers shall use their best efforts to obtain the withdrawal or
lifting of such order at the earliest possible time;
(iv) furnish to each of the selling Holders and each of the
underwriter(s), if any, before filing with the Commission, copies of any
Registration Statement or any Prospectus included in such Registration
Statement or Prospectus or any amendments or supplements to any such
Registration Statement or Prospectus (including all documents incorporated
by reference after the initial filing of such Registration Statement),
which documents will be subject to the reasonable review of such Holders
and underwriter(s), if any, for a period of at least five business days,
and the Issuers will not file any such Registration Statement or
Prospectus or any amendment or supplement to any such Registration
Statement or Prospectus, as the case may be, (including all such documents
incorporated by reference) to which any selling Holder of Transfer
Restricted Securities covered by such Registration Statement or the
underwriter(s), if any, shall reasonably object within five business days
after the receipt of such Registration Statement or Prospectus. A selling
Holder or underwriter, if any, shall be deemed to have reasonably objected
to such filing if such Registration Statement, Prospectus, amendment or
supplement, as applicable, as proposed to be filed, contains a material
misstatement or omission;
<PAGE>
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(v) promptly prior to the filing of any document that is to be
incorporated by reference into a Registration Statement or Prospectus, (a)
provide copies of such document to the selling Holders and to the
underwriter(s), if any, (b) make the Issuers' representatives available
for discussion of such document and other customary due diligence matters
provided that such discussion and due diligence shall be coordinated on
behalf of the selling Holders by one counsel designated by and on behalf
of such selling Holders and (c) include such information in such document
prior to the filing of such document as such selling Holders or
underwriter(s), if any, may reasonably request;
(vi) make available at reasonable times for inspection by the
selling Holders, any underwriter participating in any disposition pursuant
to such Registration Statement and any attorney or accountant retained by
such selling Holders or any of the underwriter(s), if any, at the offices
where normally kept, during reasonable business hours, all relevant
financial and other records, pertinent corporate documents and properties
of the Issuers and cause the Issuers' officers, directors and employees to
supply all information reasonably requested by any such Holder,
underwriter, attorney or accountant in connection with such Registration
Statement subsequent to the filing thereof and prior to its effectiveness;
provided, however, that such persons shall first agree in writing with the
Issuers that any information that is reasonably and in good faith
designated by the Issuers in writing as confidential at the time of
delivery of such information shall be kept confidential by such persons,
unless and to the extent that (i) disclosure of such information is
required by court or administrative order or is necessary to respond to
inquiries of regulatory authorities, (ii) disclosure of such information
is required by law (including any disclosure requirements pursuant to
Federal securities laws in connection with the filing of the Shelf
Registration Statement or the use of any Prospectus), (iii) such
information becomes generally available to the public other than as a
result of a disclosure or failure to safeguard such information by such
person or (iv) such information becomes available to such person from a
source other than the Issuers and their Subsidiaries and such source is
not bound by a confidentiality agreement; and provided further that the
foregoing inspection and information gathering shall be coordinated on
behalf of such parties by one counsel designated by and or on behalf of
such parties;
<PAGE>
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(vii) if requested by any selling Holders or the underwriter(s), if
any, promptly incorporate in any Registration Statement or Prospectus,
pursuant to a supplement or post-effective amendment if necessary, such
information as such selling Holders and underwriter(s), if any, may
reasonably request to have included therein, including, without
limitation, information relating to the "Plan of Distribution" of the
Transfer Restricted Securities, information with respect to the principal
amount of Transfer Restricted Securities being sold to such
underwriter(s), the purchase price being paid for Transfer Restricted
Securities and any other terms of the offering of the Transfer Restricted
Securities to be sold in such offering; and make all required filings of
such Prospectus supplement or post-effective amendment as soon as
practicable after the Issuers are notified of the matters to be
incorporated in such Prospectus supplement or post-effective amendment;
provided, however, that the Issuers shall not be required to take any
action pursuant to this Section 6(c)(vii) that would, in the opinion of
counsel for the Issuers, violate applicable law;
(viii) upon request to the Company by a selling Holder or
underwriter, if any, furnish to each such Person without charge, at least
one conformed copy of the Registration Statement, as first filed with the
Commission, and of each amendment thereto, including, upon the request of
such Person, all documents incorporated by reference therein and all
exhibits to the extent requested (including exhibits incorporated therein
by reference);
(ix) deliver to each selling Holder and each of the underwriter(s),
if any, without charge, as many copies of the Prospectus (including each
preliminary prospectus) and any amendment or supplement thereto as such
Persons may reasonably request; the Issuers hereby consent to the use of
the Prospectus and any amendment or supplement to the Prospectus by each
of the selling Holders and each of the underwriter(s), if any, in
connection with the offering and the sale of the Transfer Restricted
Securities in accordance with the terms thereof and with U.S. Federal
securities laws and Blue Sky laws covered by the Prospectus or any
amendment or supplement thereto;
(x) enter into such agreements (including an underwriting agreement
in form, scope and substance as is customary in underwritten offerings)
and take all such other reasonable actions in connection therewith in
order to expedite or facilitate the disposition of the Transfer
<PAGE>
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Restricted Securities pursuant to any Registration Statement contemplated
by this Agreement, all as may be reasonably requested by any Holder of
Transfer Restricted Securities or the underwriter(s), if any, in
connection with any sale or resale of Transfer Restricted Securities
pursuant to any Registration Statement contemplated by this Agreement; and
whether or not an underwriting agreement is entered into and whether or
not the registration is an Underwritten Registration, the Issuers and the
Subsidiary Guarantors shall (i) make such representations and warranties
to the Holders of such Transfer Restricted Securities and the
underwriters, if any, with respect to the business of the Issuers and
their Subsidiaries (including with respect to businesses or assets
acquired or to be acquired by any of them), and the Shelf Registration
Statement, Prospectus and documents, if any, incorporated or deemed to be
incorporated by reference therein, in each case, in form, substance and
scope as are customarily made by issuers to underwriters in underwritten
offerings, and confirm the same if and when customarily requested; (ii)
obtain opinions of counsel to the Issuers and updates thereof (which
counsel and opinions (in form, scope and substance) shall be reasonably
satisfactory to the underwriters, if any, and special counsel to the
Holders of the Transfer Restricted Securities being sold), addressed to
each selling Holder of Transfer Restricted Securities and each of the
underwriters, if any, covering the matters customarily covered in opinions
requested in underwritten offerings and such other matters as may be
reasonably requested by such underwriters, if any, and special counsel to
Holders of Transfer Restricted Securities; (iii) use their best efforts to
obtain customary "cold comfort" letters and updates thereof from the
independent certified public accountants of the Issuers (and, if
necessary, any other independent certified public accountants of any
subsidiary of the Issuers or of any business acquired by an Issuer or any
such subsidiary for which financial statements and financial data is, or
is required to be, included in the Shelf Registration Statement),
addressed (where reasonably possible) to each selling Holder of Transfer
Restricted Securities and each of the underwriters, if any, such letters
to be in customary form and covering matters of the type customarily
covered in "cold comfort" letters in connection with underwritten
offerings; (iv) if an underwriting agreement is entered into, the same
shall contain indemnification provisions and procedures no less favorable
to the selling Holders and the underwriters, if any, than those set forth
in Section 8 hereof (or such other provisions and procedures acceptable
<PAGE>
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to Holders of a majority in aggregate principal amount of Transfer
Restricted Securities covered by such Shelf Registration Statement and the
underwriters, if any); and (v) deliver such documents and certificates as
may be reasonably requested by the Holders of a majority in aggregate
principal amount of the Transfer Restricted Securities being sold and the
underwriters, if any, to evidence the continued validity of the
representations and warranties made pursuant to clause (i) above and to
evidence compliance with any customary conditions contained in the
underwriting agreement or other agreement entered into by the Issuers.
If at any time the representations and warranties of the Issuers
contemplated in clause (A)(1) above cease to be true and correct, the
Issuers shall so advise the Purchaser and the underwriter(s), if any, and
each selling Holder promptly and, if requested by any of them, shall
confirm such advice in writing;
(xi) prior to any public offering of Transfer Restricted Securities,
cooperate with and cause the Subsidiary Guarantors to cooperate with the
selling Holders, the underwriter(s), if any, and their respective counsel
in connection with the registration and qualification (or exemption from
such registration or qualification) of the Transfer Restricted Securities
for offer and sale under the securities or Blue Sky laws of such
jurisdictions as the selling Holders and underwriter(s), if any, may
reasonably request in writing and do any and all other acts or things
necessary or advisable to enable the disposition in such jurisdictions of
the Transfer Restricted Securities covered by the Shelf Registration
Statement; provided, however, that neither the Issuers nor the Subsidiary
Guarantors shall be required to register or qualify as a foreign
corporation where it is not now so qualified or to take any action that
would subject it to the service of process in suits or to taxation, other
than as to matters and transactions relating to the Registration
Statement, in any jurisdiction where it is not now so subject;
(xii) shall issue, upon the request of any Holder of Old Notes
covered by the Shelf Registration Statement, if any, New Notes having an
aggregate principal amount equal to the aggregate principal amount of Old
Notes surrendered to the Issuers by such Holder in exchange therefor or
being sold by such Holder; such New Notes to be registered in the name of
such Holder or, if being sold by such Holder in the name of
<PAGE>
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the purchaser(s) of such New Notes, as the case may be; in return, the Old
Notes held by such Holder shall be surrendered to the Issuers for
cancellation;
(xiii) in connection with any sale or transfer of Transfer
Restricted Securities that will result in such securities no longer being
Transfer Restricted Securities, cooperate with and cause the Subsidiary
Guarantors to cooperate with the selling Holders and the underwriter(s),
if any, to facilitate the timely preparation and delivery of certificates
representing Transfer Restricted Securities to be sold and not bearing any
restrictive legends; and enable such Transfer Restricted Securities to be
in such denominations and registered in such names as the Holders or the
underwriter(s), if any, may request at least two business days prior to
any sale of Transfer Restricted Securities made by such underwriter(s);
(xiv) use its best efforts to cause the Transfer Restricted
Securities covered by the Registration Statement to be registered with or
approved by such other governmental agencies or authorities as may be
necessary to enable the seller or sellers of such Transfer Restricted
Securities or the underwriter(s), if any, to consummate the disposition of
such Transfer Restricted Securities, subject to the proviso contained in
clause (xi) above;
(xv) if any fact or event contemplated by Section 6(c)(iii)(D) of
this Agreement shall exist or have occurred, prepare a supplement or
post-effective amendment to the Registration Statement or related
Prospectus or any document incorporated in such Registration Statement or
Prospectus by reference or file any other required document so that, as
thereafter delivered to the purchasers of Transfer Restricted Securities,
the Registration Statement will not contain an untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein not misleading and the Prospectus will not contain an
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
contained therein, in the light of the circumstances under which they were
made, not misleading;
(xvi) provide a CUSIP number for all Transfer Restricted Securities
not later than the effective date of the Registration Statement and
provide the Trustee under the Indenture with printed certificates for the
Transfer
<PAGE>
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Restricted Securities that are in a form eligible for deposit with The
Depository Trust Company;
(xvii) cooperate and assist in any filings required to be made with
the NASD and in the performance of any due diligence investigation by any
underwriter (including any "qualified independent underwriter") that is
required to be retained in accordance with the rules and regulations of
the NASD, and use its reasonable best efforts to cause such Registration
Statement to become effective and approved by such governmental agencies
or authorities as may be necessary to enable the selling Holders of
Transfer Restricted Securities to consummate the disposition of such
Transfer Restricted Securities subject to the proviso of clause (xi)
above;
(xviii) otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission in regards to any Registration
Statement, and make generally available to its securityholders, as soon as
practicable, a consolidated earning statement of Statia meeting the
requirements of Rule 158 (which need not be audited) for the twelve-month
period (A) commencing at the end of any fiscal quarter in which Transfer
Restricted Securities are sold to underwriters in a firm commitment or
reasonable best efforts Underwritten Offering or (B) if not sold to
underwriters in such an offering, beginning with the first month of
Statia's first fiscal quarter commencing after the effective date of the
Registration Statement;
(xix) cause the Indenture to be qualified under the TIA not later
than the effective date of the first Registration Statement required by
this Agreement, and, in connection therewith, cooperate with the Trustee
and the Holders to effect such changes to the Indenture, if any, as may be
required for such Indenture to be so qualified in accordance with the
terms of the TIA; and execute, and use their best efforts to cause the
Trustee to execute, all customary documents that may be required to effect
such changes and all other forms and documents required to be filed with
the Commission to enable such Indenture to be so qualified in a timely
manner.
The Issuers may require a holder of Transfer Restricted Notes to be
included in a Registration Statement to furnish to the Issuers such information
regarding the distribution of such Transfer Restricted Notes as is required by
law to be disclosed in such Registration Statement and the Issuers may exclude
from
<PAGE>
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such Registration Statement the Transfer Restricted Notes of any Holder who
unreasonably fails to furnish such information within a reasonable time after
receiving such request.
Each Holder agrees by acquisition of a Transfer Restricted Security
that, upon receipt of any notice from the Issuers of the existence of any fact
of the kind described in Section 6(c)(iii)(D) of this Agreement, such Holder
will forthwith discontinue disposition of Transfer Restricted Securities
pursuant to the applicable Registration Statement until such Holder's receipt of
the copies of the supplemented or amended Prospectus contemplated by Section
6(c)(xvi) of this Agreement, or until it is advised in writing (the "Advice") by
the Issuers that the use of the Prospectus may be resumed, and has received
copies of any additional or supplemental filings that are incorporated by
reference in the Prospectus. If so directed by the Issuers, each Holder will
deliver to the Issuers (at the Issuers' expense) all copies, other than
permanent file copies then in such Holder's possession, of the Prospectus
covering such Transfer Restricted Securities that was current at the time of
receipt of such notice. In the event that the Issuers shall give any such
notice, the time period regarding the effectiveness of such Registration
Statement set forth in Section 3 or 4 of this Agreement, as applicable, shall be
extended by the number of days during the period from and including the date of
the giving of such notice pursuant to Section 6(c)(iii)(D) of this Agreement to
and including the date when each selling Holder covered by such Registration
Statement shall have received the copies of the supplemented or amended
Prospectus contemplated by Section 6(c)(xvi) of this Agreement or shall have
received the Advice.
SECTION 7. REGISTRATION EXPENSES
(a) All fees and expenses incident to the Issuers' performance of or
compliance with this Agreement will be borne by the Issuers regardless of
whether a Registration Statement becomes effective, including without
limitation: (i) all registration and filing fees and expenses (including filings
made with the NASD (and, if applicable, the fees and expenses of any "qualified
independent underwriter" and its counsel that may be required by the rules and
regulations of the NASD)); (ii) all fees and expenses of compliance with federal
securities and state Blue Sky or securities laws; (iii) all expenses of printing
(including printing certificates for the New Notes to be issued in the Exchange
Offer and printing of Prospectuses); (iv) all fees and disbursements of counsel
for the Issuers, the Subsidiary Guarantors and, subject to Section 7(b) below,
the Holders of
<PAGE>
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Transfer Restricted Securities; (v) all application and filing fees in
connection with listing the Notes on a national securities exchange or automated
quotation system pursuant to the requirements of this Agreement; and (vi) all
fees and disbursements of independent certified public accountants of the
Issuers (including the expenses of any special audit and comfort letters
required by or incident to such performance).
Each of the Issuers will, in any event, bear its internal expenses
(including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties), the expenses of any annual
audit and the fees and expenses of any Person, including special experts,
retained by it.
Notwithstanding the foregoing or anything in this Agreement to the
contrary, each Holder of Transfer Restricted Notes shall pay all underwriting
discounts and commissions of any underwriters with respect to any Notes sold by
or on behalf of it.
(b) In connection with any Registration Statement required by this
Agreement (including, without limitation, the Exchange Offer Registration
Statement and the Shelf Registration Statement), the Issuers will reimburse the
Purchaser and the Holders of Transfer Restricted Securities being tendered in
the Exchange Offer and/or resold pursuant to the "Plan of Distribution"
contained in the Exchange Offer Registration Statement or registered pursuant to
the Shelf Registration Statement, as applicable, for the reasonable fees and
disbursements of not more than one counsel, who shall be Cahill Gordon & Reindel
or such other counsel as may be chosen by the Holders of a majority in principal
amount of the Transfer Restricted Securities for whose benefit such Registration
Statement is being prepared.
SECTION 8. INDEMNIFICATION
(a) The Issuers and each of the Subsidiary Guarantors jointly and
severally agree to indemnify and hold harmless (i) the Purchaser, each Holder of
Transfer Restricted Securities and each participating Broker Dealer, (ii) each
person, if any, who controls any of the foregoing within the meaning of Section
15 of the Act or Section 20(a) of the Exchange Act (any of the persons referred
to in this clause (ii) being hereinafter referred to as a "controlling person")
and (iii) the agents, employees, officers and directors and the agents,
employees, officers and directors of any such controlling person
<PAGE>
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(collectively, the "Indemnified Persons") from and against any and all losses,
liabilities, claims, damages and reasonable expenses whatsoever (including but
not limited to reasonable attorneys' fees and any and all reasonable expenses
whatsoever incurred in investigating, preparing or defending against any
litigation, commenced or threatened, or any claim whatsoever, and any and all
amounts paid in settlement of any claim or litigation) to which they or any of
them may become subject under the Act, the Exchange Act or otherwise, insofar as
such losses, liabilities, claims, damages or expenses (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or
Prospectus, or in any supplement thereto or amendment thereof, or arise out of
or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading;
provided, however, that the Issuers and the Subsidiary Guarantors will not be
liable in any such case to the extent, but only to the extent, that any such
loss, liability, claim, damage or expense arises out of or is based upon any
such untrue statement or alleged untrue statement or omission or alleged
omission made therein in reliance upon and in conformity with written
information furnished to the Issuers or the Subsidiary Guarantors by or on
behalf of any Indemnified Person relating to such Indemnified Person expressly
for use therein; provided, further, that the Issuers and the Subsidiary
Guarantors shall not be liable to any Indemnified Person under the indemnity
agreement in this subsection with respect to any preliminary Prospectus to the
extent that any such loss, claim, damage or liability of such Indemnified Person
results from an untrue statement of a material fact contained in, or the
omission of a material fact from, such preliminary Prospectus that was corrected
in the final Prospectus, if the Issuers or the Subsidiary Guarantors shall
sustain the burden of proving that such Indemnified Person sold Notes to the
person alleging such loss, claim, damage or liability without sending or giving,
at or prior to the written confirmation of such sale, a copy of the Prospectus
or of the Prospectus as then amended or supplemented if the Issuers and the
Subsidiary Guarantors had previously furnished copies thereof to such
Indemnified Person. This indemnity agreement will be in addition to any
liability that the Issuers or any of the Subsidiary Guarantors may otherwise
have, including, but not limited to, under this Agreement.
(b) In connection with any Registration Statement pursuant to which
a Holder of Transfer Restricted Securities offers or sells Transfer Restricted
Securities, such Holder
<PAGE>
-24-
agrees, severally and not jointly, to indemnify and hold harmless the Issuers
and the Subsidiary Guarantors, their respective directors and officers and any
person controlling an Issuers or a Subsidiary Guarantor within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act, to the same
extent as the foregoing indemnity from the Issuers and the Subsidiary Guarantors
to each Indemnified Person but only with respect to information relating to such
Holder furnished in writing by or on behalf of such Holder expressly for use in
such Registration Statement. In any such case in which any action shall be
brought against an Issuer or a Subsidiary Guarantor, any director or officer of
an Issuer or a Subsidiary Guarantor or any person controlling an Issuer or a
Subsidiary Guarantor based on such Registration Statement and in respect of
which indemnity may be sought against a Holder of Transfer Restricted
Securities, such Holder shall have the rights and duties given to the Issuers
and the Subsidiary Guarantors (except that if an Issuer or a Subsidiary
Guarantor shall have assumed the defense thereof, such Holder shall not be
required to do so, but may employ separate counsel therein and participate in
the defense thereof but the fees and expenses of such counsel shall be at the
expense of such Holder), and the Issuers and the Subsidiary Guarantors, their
respective directors and officers and any person controlling an Issuer or a
Subsidiary Guarantor shall have the rights and duties given to the Indemnified
Persons by Section 7(a) hereof.
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, suit or proceeding
(collectively, an "Action"), such indemnified party shall, if a claim in respect
thereof is to be made against the indemnifying party under such subsection,
promptly notify each party against whom indemnification is to be sought in
writing of the commencement of such Action (but the failure so to notify an
indemnifying party shall not relieve such indemnifying party from any liability
that it may have under this Section 8 except to the extent that it has been
prejudiced in any material respect by such failure or from any liability which
it may otherwise have). In case any such Action is brought against any
indemnified party, and it notifies an indemnifying party of the commencement of
such Action, the indemnifying party will be entitled to participate in such
Action, and to the extent it may elect by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense of such Action with counsel reasonably
satisfactory to such indemnified party. Notwithstanding the foregoing, the
indemnified party or parties shall have the right to employ its or their own
counsel in any such Action, but the fees and expenses of such counsel shall be
<PAGE>
-25-
at the expense of such indemnified party or parties unless (i) the employment of
such counsel shall have been authorized in writing by the indemnifying parties
in connection with the defense of such Action, (ii) the indemnifying parties
shall not have employed counsel to take charge of the defense of such Action
within a reasonable time after notice of commencement of the Action, or (iii)
such indemnified party or parties shall have reasonably concluded that there may
be defenses available to it or them that are different from or additional to
those available to one or all of the indemnifying parties (in which case the
indemnifying parties shall not have the right to direct the defense of such
Action on behalf of the indemnified party or parties), in any of which events
such fees and expenses of counsel shall be borne by the indemnifying parties. In
no event shall the indemnifying party be liable for the fees and expenses of
more than one counsel (together with appropriate local counsel) at any time for
all indemnified parties in connection with any one Action or separate but
substantially similar or related Actions in the same jurisdiction arising out of
the same general allegations or circumstances. Anything in this subsection to
the contrary notwithstanding, an indemnifying party shall not be liable for any
settlement of any claim or Action effected without its written consent;
provided, however, that such consent was not unreasonably withheld.
(d) In order to provide for contribution in circumstances in which
the indemnification provided for in paragraphs (a) and (b) of this Section 8 is
for any reason held to be unavailable from the indemnifying party, or is
insufficient to hold harmless a party indemnified under this Section 8, the
Issuers, the Subsidiary Guarantors and the Indemnified Parties shall contribute
to the aggregate losses, claims, damages, liabilities and expenses of the nature
contemplated by such indemnification provision (including any reasonable
investigation, legal and other expenses incurred in connection with, and any
amount paid in settlement of, any Action or any claims asserted, but after
deducting in the case of losses, claims, damages, liabilities and expenses
suffered by the indemnifying party, any contribution received by the
indemnifying party, from persons other than the indemnified party who may also
be liable for contribution, including persons who control the indemnified party
within the meaning of Section 15 of the Act or Section 20(a) of the Exchange
Act) to which the Issuers, the Subsidiary Guarantors and the Indemnified Parties
may be subject, in such proportion as is appropriate to reflect the relative
benefits received by the Issuers and the Subsidiary Guarantors, on the one hand,
and the Indemnified Parties, on the other hand, from the offering of the Old
Notes or, if such allocation is not
<PAGE>
-26-
permitted by applicable law or indemnification is not available as a result of
the indemnifying party not having received notice as provided in paragraph (c)
of this Section 8, in such proportion as is appropriate to reflect not only the
relative benefits referred to above but also the relative fault of the Issuers
and the Subsidiary Guarantors, on the one hand, and the Indemnified Parties, on
the other hand, in connection with the statements or omissions that resulted in
such losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative benefits received by the Issuers
and the Subsidiary Guarantors shall be deemed to be in the same proportion as
the total proceeds from the offering of Old Notes (net of discounts but before
deducting expenses) received by the Issuers as set forth in the table on the
cover page of the Prospectus. The relative fault of the Issuers and the
Subsidiary Guarantors, on the one hand, and the Indemnified Parties, on the
other hand, shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Issuers, the Subsidiary Guarantors or the Indemnified Parties and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
(e) The Issuers, the Subsidiary Guarantors and the Purchaser agree
that it would not be just and equitable if contribution pursuant to paragraph
(d) of this Section 8 were determined by pro rata allocation or by any other
method of allocation that does not take into account the equitable
considerations referred to above. Notwithstanding the provisions of paragraph
(d) of this Section 8, (i) in no case shall an Indemnified Party be required to
contribute any amount in excess of the amount by which the total received by
such Indemnified Party with respect to its sale of its Transfer any damages that
such Indemnified Party has otherwise been required to pay by reason of any
untrue or alleged untrue statement or omission or alleged omission and (ii) no
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of paragraphs (d) and
(e) of this Section 8, each person, if any, who controls an Indemnified Party
within the meaning of Section 15 of the Act or Section 20(a) of the Exchange Act
shall have the same rights to contribution as such Indemnified Party, and each
person, if any, who controls the Issuers or the Subsidiary Guarantors within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange Act shall have
the same rights to contribution as the Issuers or the Subsidiary Guarantors,
subject
<PAGE>
-27-
in each case to clauses (i) and (ii) of this Section 8(e). Any party entitled to
contribution will, promptly after receipt of notice of commencement of any
Action against such party in respect of which a claim for contribution may be
made against another party or parties under paragraphs 8(d) or (e) of this
Section 8, notify such party or parties from whom contribution may be sought,
but the omission to so notify such party or parties shall not relieve the party
or parties from whom contribution may be sought from any obligation it or they
may have under paragraphs (d) or (e) of this Section 8 or otherwise. No party
shall be liable for contribution with respect to any Action or claim settled
without its written consent; provided, however, that such written consent was
not unreasonably withheld.
SECTION 9. RULE 144A
The Issuers shall use their best efforts, for so long as any
Transfer Restricted Securities remain outstanding, to make available to any
Holder or beneficial owner of Transfer Restricted Securities in connection with
any sale of such securities and any prospective purchaser of such Transfer
Restricted Securities from such Holder or beneficial owner, the information
required by Rule 144A(d)(4) under the Act in order to permit resales of such
Transfer Restricted Securities pursuant to Rule 144A.
SECTION 10. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS
No Holder may participate in any Underwritten Registration under
this Agreement unless such Holder (a) agrees to sell such Holder's Transfer
Restricted Securities on the basis provided in any underwriting arrangements
approved by the Persons entitled under this Agreement to approve such
arrangements and (b) completes and executes all reasonable questionnaires,
powers of attorneys, indemnities, underwriting agreements, lock-up letters and
other documents required under the terms of such underwriting arrangements.
SECTION 11. SELECTION OF UNDERWRITERS
The Holders of Transfer Restricted Securities covered by the Shelf
Registration Statement who desire to do so may sell such Transfer Restricted
Securities in an Underwritten Offering. In any such Underwritten Offering, the
investment banker or investment bankers and manager or managers that will
administer the offering will be selected by the Holders of a majority in
aggregate principal amount of the Transfer Restricted Securities
<PAGE>
-28-
included in such offering; provided, that such investment bankers and managers
must be reasonably satisfactory to the Issuers.
SECTION 12. MISCELLANEOUS
(a) Remedies. Each Holder, in addition to being entitled to exercise
all rights provided in this Agreement, in the Indenture, the Purchase Agreement
or granted by law, including recovery of liquidated or other damages, will be
entitled to specific performance of its rights under this Agreement. The Issuers
and the Subsidiary Guarantors agree that monetary damages would not be adequate
compensation for any loss incurred by reason of a breach by it of the provisions
of this Agreement and hereby agree to waive the defense in any Action for
specific performance that a remedy at law would be adequate.
(b) No Inconsistent Agreements. The Issuers will not on or after the
date of this Agreement enter into any agreement with respect to its securities
that is inconsistent with the rights granted to the Holders in this Agreement or
otherwise conflicts with the provisions of this Agreement. The Issuers have not
previously entered into any agreement granting any registration rights with
respect to its securities to any Person. The rights granted to the Holders under
this Agreement do not in any way conflict with and are not inconsistent with the
rights granted to the holders of the Issuers' securities under any agreement in
effect on the date of this Agreement.
(c) Adjustments Affecting the Notes. Without the written consent of
the Holders of a majority in aggregate principal amount of outstanding Transfer
Restricted Notes, the Issuers and the Subsidiary Guarantors will not take any
action, or permit any change to occur, with respect to the Notes that would
materially and adversely affect the ability of the Holders to Consummate any
Exchange Offer.
(d) Amendments and Waivers. The provisions of this Agreement may not
be amended, modified or supplemented, and waivers or consents to or departures
from the provisions of this Agreement may not be given unless the Issuers have
obtained the written consent of Holders of a majority of the outstanding
principal amount of Transfer Restricted Securities. Notwithstanding the
foregoing, a waiver or consent to departure from the provisions of this
Agreement that relates exclusively to the rights of Holders whose securities are
being sold or tendered pursuant to a Registration Statement and that does not
affect directly or indirectly the rights of other Holders whose securities are
not being sold or tendered pursuant to such
<PAGE>
-29-
Registration Statement may be given by the Holders of a majority of the
outstanding principal amount of Transfer Restricted Securities being so sold or
tendered.
(e) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivering, first-class
mail (registered or certified, return receipt requested), telex, telecopier or
air courier guaranteeing overnight delivery:
(i) if to a Holder, at the address set forth on the records of the
Registrar under the Indenture, with a copy to the Registrar under the
Indenture; and
(ii) if to the Issuers or the Subsidiary Guarantors, at:
Statia Terminals, Inc.
800 Fairway Drive
Suite 295
Deerfield Beach, Florida 33441
Facsimile: (954) 698-0706
Attention: Jack Pine
with a copy to:
White and Case
1155 Avenue of the Americas
New York, New York 10036-2787
Facsimile: (212)
Attention: John Erickson
All such notices and communications shall be deemed to have been
duly given: (i) at the time delivered by hand, if personally delivered; (ii)
five business days after being deposited in the mail, postage prepaid, if
mailed; (iii) when answered back, if telexed; (iv) when receipt acknowledged, if
telecopied; and (v) on the next business day, if timely delivered to an air
courier guaranteeing overnight delivery.
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee at the
address specified in the Indenture.
(f) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and permitted assigns of each of
the parties, including without
<PAGE>
-30-
limitation and without the need for an express assignment, subsequent Holders of
Transfer Restricted Securities.
(g) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties to this Agreement in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
(h) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning of this
Agreement.
(i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE
CONFLICT OF LAW RULES THEREOF. Each of the parties hereto agrees to submit to
the jurisdiction of the courts of the State of New York and the U.S. Federal
Courts sitting in the City of New York for the purposes of any suit, action or
proceeding arising out of or relating to this Indenture. The Issuers hereby
designate and appoint CT Corporation System, 1633 Broadway, New York, New York
10019, as its agent to receive on its behalf service of all process in any
proceedings in any court sitting in New York, New York, such service being
hereby acknowledged by the Issuers to be effective and binding service in every
respect. A copy of any such process so served shall be mailed by registered mail
to the Issuers at the address specified in Section 12(e) hereof, except that
unless otherwise provided by applicable law, any failure to mail such copy shall
not affect the validity of service of process. If any agent appointed by the
Issuers refuses to accept service, the Issuers hereby agree that service upon
them by mail shall constitute sufficient notice. Nothing herein shall affect the
right to serve process in any other manner permitted by law or shall limit the
right of the Holders to bring proceedings against the Issuers in the courts of
any other jurisdiction.
(j) Severability. In the event that any one or more of the
provisions contained in this Agreement, or the application of any such provision
in any circumstance, is held invalid, illegal or unenforceable, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions contained in this Agreement shall not be affected or
impaired thereby.
(k) Entire Agreement. This Agreement together with the other
Operative Documents (as defined in the Purchase Agreement) is intended by the
parties as a final expression of
<PAGE>
-31-
their agreement and intended to be a complete and exclusive statement of the
agreement and understanding of the parties to this Agreement in respect of the
subject matter contained in this Agreement. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to in this
Agreement with respect to the registration rights granted by the Issuers with
respect to the Transfer Restricted Securities. This Agreement supersedes all
prior agreements and understandings between the parties with respect to such
subject matter.
[Signatures on Next Page]
<PAGE>
-32-
[Registration Rights Agreement - Issuers' Signature Page]
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.
STATIA TERMINALS INTERNATIONAL
N.V.
By: /s/ David B. Pittaway
-------------------------------------
Name: David B. Pittaway
Title: Managing Director
By: /s/ James G. Cameron
-------------------------------------
Name: James G. Cameron
Title: Managing Director and Secretary
STATIA TERMINALS CANADA,
INCORPORATED
By: /s/ David B. Pittaway
-------------------------------------
Name: David B. Pittaway
Title: President
STATIA TERMINALS CORPORATION N.V.
By: /s/ David B. Pittaway
-------------------------------------
Name: David B. Pittaway
Title: Managing Director
By: /s/ Justin B. Wender
-------------------------------------
Name: Justin B. Wender
Title: Managing Director and Secretary
STATIA TERMINALS DELAWARE, INC.
By: /s/ David B. Pittaway
-------------------------------------
Name: David B. Pittaway
Title: President
<PAGE>
-33-
STATIA TERMINALS, INC.
By: /s/ James G. Cameron
-------------------------------------
Name: James G. Cameron
Title: President and Chairman of
of the Board
STATIA TERMINALS N.V.
By: /s/ James G. Cameron
-------------------------------------
Name: James G. Cameron
Title: Managing Director
STATIA DELAWARE HOLD CO II, INC.
By: /s/ David B. Pittaway
-------------------------------------
Name: David B. Pittaway
Title: President
SABA TRUST COMPANY N.V.
By: /s/ James G. Cameron
-------------------------------------
Name: James G. Cameron
Title: Managing Director
BICEN DEVELOPMENT CORPORATION
N.V.
By: /s/ James G. Cameron
-------------------------------------
Name: James G. Cameron
Title: Managing Director
STATIA TERMINALS SOUTHWEST, INC.
By: /s/ James G. Cameron
-------------------------------------
Name: James G. Cameron
Title: President
<PAGE>
-34-
W.P. COMPANY, INC.
By: /s/ James F. Brenner
-------------------------------------
Name: James F. Brenner
Title: Vice President
SEVEN SEAS STEAMSHIP COMPANY
By: /s/ James F. Brenner
-------------------------------------
Name: James F. Brenner
Title: Vice President
SEVEN SEAS STEAMSHIP COMPANY
(SINT EUSTATIUS) N.V.
By: /s/ James G. Cameron
-------------------------------------
Name: James G. Cameron
Title: Attorney-in-Fact
POINT TUPPER MARINE SERVICES
LIMITED
By: /s/ James F. Brenner
-------------------------------------
Name: James F. Brenner
Title: Vice President Finance and
Treasurer
STATIA LABORATORY SERVICES, N.V.
By: /s/ James G. Cameron
-------------------------------------
Name: James G. Cameron
Title: Managing Director
STATIA TUGS N.V.
By: /s/ James G. Cameron
-------------------------------------
Name: James G. Cameron
Title: Managing Director
<PAGE>
-35-
[Registration Rights Agreement - Purchaser's Signature Page]
Accepted and agreed as of the
date first above written:
/s/ Kaj Ahlburg
_________________________________________
DILLON, READ & CO. INC.
By:
-------------------------------------
Name: Kaj Ahlburg
Title: Senior Vice President
<PAGE>
SHARE PLEDGE AGREEMENT
SHARE PLEDGE AGREEMENT (the "Pledge Agreement"), dated as of
November 27, 1996, by and between Statia Terminals
International N.V., a company incorporated under the laws of
the Netherlands Antilles having its corporate seat at L.B.
Smittplein 3, Curacao, Netherlands Antilles ("Pledgor") and
Marine Midland Bank, a New York banking corporation and trust
company having its registered office at 140 Broadway, 12th
Floor, New York, NY 10005-1180, as trustee (in such capacity
and together with any successors and assigns in such capacity,
"Pledgee") pursuant to the Indenture (as hereinafter defined)
and the Additional Lender Intercreditor Agreement as defined
in the Indenture, if any.
WITNESSETH:
WHEREAS, Pledgor, Statia Terminals Canada Incorporated
(together with the Pledgor hereafter collectively referred to
as the "Issuers"), certain subsidiaries of Pledgor and
Pledgee are contemporaneously with the execution and delivery
of this Pledge Agreement entering into a certain indenture,
dated as of November 27, 1996 (as amended, restated,
supplemented or otherwise modified from time to time, the
"Indenture") pursuant to which the Issuers are issuing
11 3/4% first mortgage notes due 2003 (the "First Mortgage
Notes"), in the aggregate principal amount of US$135,000,000;
WHEREAS, it is contemplated that the Issuers may, after
the date hereof, (i) issue exchange notes pursuant to the
Indenture (the "Exchange Notes"; together with the First
Mortgage Notes, the "Notes") and (ii) incur certain
additional indebtedness ("Additional Secured Indebtedness")
in accordance with the provisions of Section 4.04 and Section
4.14 of the Indenture
<PAGE>
2
which shall be equally and ratably secured by the
Pledged Collateral (as hereinafter defined);
WHEREAS, the Pledgor is entering into this Pledge
Agreement with Pledgee acting for the benefit of itself, the
holders of the Notes and the holders of Additional Secured
Indebtedness (collectively the "Secured Parties") for the
purpose, among other things, of securing and providing for the
payment of all amounts of principal, premium, if any, interest,
costs, charges, fees, expenses, commissions, reimbursements,
indemnities and all other amounts from time to time due and
payable by the Pledgor to the Secured Parties (whether at
stated maturity, by acceleration or otherwise, including,
without limitation, the payments of interest and other amounts
which would accrue and become due but for the filing of a
petition in bankruptcy or the operation of any stay under any
Bankruptcy Law (as defined in the Indenture)) under the
Indenture, the Notes, this Pledge Agreement, and any other
instrument governing the obligations of Pledgor with respect to
the Additional Secured Indebtedness (the ("Additional
Indebtedness Instrument", together with the Indenture, the
Notes, and this Pledge Agreement collectively the "Secured
Instruments"), as well as the performance and payment of all
other obligations and liabilities, now existing or hereafter
arising whatsoever which are now or at any time hereafter may
be or become due, owing or payable under any of the Secured
Instruments, in any form or currency, to the Secured Parties by
the Pledgor, actually or contingently, solely or jointly and/or
severally with another or others, as principal or surety, or by
virtue of any current or other account in connection with any
advance, loan, credit, instrument, guarantee or indemnity made
or issued to, for or at the request of the Pledgor pursuant to
any Secured Instrument and costs, for the purpose hereof
including,
<PAGE>
3
but not limited to, costs of collection of any amount due to
the Secured Parties (collectively, the "Secured
Obligations");
WHEREAS, the Indenture is governed by the laws of State of
New York;
WHEREAS, the Pledgor is of the opinion that the execution
and delivery of this Agreement and the performance of its
obligations hereunder is in its corporate interest and does
not prejudice the rights of its creditors;
NOW, THEREFORE, in consideration of the foregoing premises
the Pledgor agrees with the Pledgee as follows:
Section 1 Definitions
Capitalized terms used herein and not defined shall have
the meanings assigned to them in the Indenture.
Section 2 Obligations Owed to Pledgee as Trustee
2.1 In order to ensure that a valid pledge is created pursuant
to this Pledge Agreement, Pledgor hereby agrees and
covenants with Pledgee that it shall (i) pay to Pledgee (as
and when due by the Pledgor in accordance with the
provisions of the applicable Secured Instruments) all
amounts of money due and payable to the holders of the Notes
and to the holders of the Additional Secured Indebtedness
under their respective Secured Instruments, in order to
permit Pledgee to make the payments required under the
applicable Secured Instrument, as and when due, to the
holders of the Notes and to the holders of Additional
Secured Indebtedness, and (ii) perform all of its other
<PAGE>
4
obligations to the holders of the Notes and the holders of
the Additional Secured Indebtedness in accordance with their
respective Secured Instruments. The agreements, covenants
and obligations of Pledgor set forth in the immediately
preceding sentence shall hereinafter be referred to as the
"Debtholder Obligations". It is the intention of the parties
that the Debtholder Obligations shall be identical and
equal, but alternative to the obligations of Pledgor to the
holders of the Notes and to the holders of Additional
Secured Indebtedness under their respective Secured
Instruments.
2.2 The Pledgor and the Pledgee agree and acknowledge that the
Debtholder Obligations are obligations and liabilities of
the Pledgor to the Pledgee, as trustee and paying agent,
separate and independent from and without prejudice to the
liabilities which the Pledgor has or may have to the holders
of the Notes and to the holders of the Additional Secured
Indebtedness, provided that the total amount due and payable
under the Debtholder Obligations shall be decreased to the
extent that the Pledgor shall have paid any amounts to the
Pledgee, which are due, payable and owing to any holder of
the Notes and any holder of Additional Secured Indebtedness
in accordance with their respective Secured Instruments.
2.3 In connection with the performance of the provisions of this
Pledge Agreement, the Pledgee (in its capacity as Trustee)
shall have the duties, and shall be entitled to the
benefits, set forth in the Indenture and/or the Additional
Lender Intercreditor Agreement, if any, all to the extent
permitted by applicable law.
<PAGE>
5
2.4 The relationship of the holders of the Notes, the holders of
Additional Secured Indebtedness and the Pledgee are or will
be, as the case may be, governed by the Indenture and the
applicable Intercreditor Agreements, which are or will be,
as the case may be, governed by and construed in accordance
with the laws of the State of New York.
Section 3 Pledge
3.1 In order to secure and to provide for the payment and
performance when due of all Secured Obligations, Pledgor
hereby grants and, in the case of Pledged Collateral
hereafter acquired or obtained, agrees to grant to Pledgee
for the benefit of the Secured Parties and Pledgee hereby
accepts from the Pledgor a first right of pledge ("eerste
pandrecht") (the "Pledge"), to all of the right, title and
interest of Pledgor in, to and over the following whether
now existing or hereafter acquired (collectively, the
"Pledged Collateral"):
(i) all issued and outstanding shares of Statia Terminals
Corporation N.V. (the "Company"), a company
incorporated under the laws of the Netherlands
Antilles, listed in Schedule I hereto (the "Pledged
Shares");
(ii) all additional shares of capital stock of the Company
from time to time acquired by Pledgor in any manner
(including, without limitation) all stock dividends,
bonus shares, rights of issue, options and warrants at
any time and from time to time received, receivable or
otherwise distributed with respect to the Pledged
Shares and all issued
<PAGE>
6
and outstanding shares of capital stock or other
equity interests of each other Netherlands Antilles
Person which, after the date hereof, is or becomes, as
a result of any occurrence, a Restricted Subsidiary of
Pledgor (collectively the "Additional Shares");
(iii) dividends, cash, distributions from retained earnings,
returns of paid up nominal share capital, return of
paid in capital surplus income, profits and other
property, interests or proceeds at any time and from
time to time received, receivable or otherwise
distributed with respect to the Pledged Shares and
Additional Shares (the "Distributions");
(iv) all interest of Pledgor in the entries on the books of
any financial intermediary pertaining to the Pledged
Collateral; and
(v) (a) any and all proceeds of any insurance (except
payments made to a Person which is not a party to this
Pledge Agreement), indemnity, warranty or guarantee
payable to Pledgee or to Pledgor from time to time
with respect to any of the Pledged Collateral, (b)
payments (in any form whatsoever) made or due and
payable to Pledgor from time to time in connection
with any requisition, confiscation, condemnation,
seizure or forfeiture of all or any part of the
Pledged Collateral by any governmental authority (or
any Person acting under color of governmental
authority), (c) instruments representing obligations
to pay
<PAGE>
7
amounts in respect of Pledged Shares, (d) products of
the Pledged Collateral, and (e) other amounts from
time to time paid or payable under or in connection
with any of the Pledged Collateral.
Section 4 Notification; Delivery of Pledged Collateral
4.1 The Pledge granted hereunder has been notified to and
acknowledged by the Company as set forth in Schedule II.
Upon acquisition by Pledgor of any and all Additional
Shares, Pledgor shall cause the Pledge granted hereunder to
be notified to and acknowledged by the Company or the issuer
of such Additional Shares, as the case may be, and with due
observance to the provisions of this section 4.
4.2 Immediately upon this Pledge Agreement becoming effective
with respect to the Pledged Shares and promptly upon each
receipt or acquisition thereof with respect to Additional
Shares, the Pledgor will deliver or cause to be delivered to
the Pledgee a duly authenticated extract from the register
of shareholders of the Company and any issuer of Additional
Shares evidencing the entry in such register of the Pledge
granted hereunder, and if in respect of any one or more of
the Pledged Shares or Additional Shares, as the case may be,
share certificates have been issued, the Pledgor shall in
addition deliver to the Pledgee the originals of such share
certificates, duly endorsed to evidence the Pledge granted
hereunder. All Pledged Shares and Additional Shares shall be
in suitable form for transfer by delivery or shall be
accompanied by duly executed instruments of transfer or
assignment in blank, all in form and substance necessary or
appropriate to complete the Pledge and give the Pledgee the
right to
<PAGE>
8
transfer the Pledged Shares and Additional Shares under the
terms hereof.
4.3 Pledgor shall, upon obtaining any Additional Shares of any
Person, promptly (and in any event within five Business
Days) deliver to Pledgee a pledge amendment, duly executed
by Pledgor, in substantially the form of Schedule III hereto
(each, a "Pledge Amendment"), in respect of the additional
Pledged Shares which are to be pledged pursuant to this
Pledge Agreement, and an acknowledgement of such Pledge
Amendment by the Company or the issuer of such Additional
Shares, as the case may be, confirming the Pledge hereby
created on and in respect of such Additional Shares. Pledgor
hereby authorizes Pledgee to attach each Pledge Amendment to
this Pledge Agreement and agrees that all Additional Shares
listed on any Pledge Amendment delivered to Pledgee shall
for all purposes hereunder be considered Pledged Collateral
from and after the date of such Pledge Amendment.
4.4 Pledgor shall further promptly (and in any event within five
Business Days) upon obtaining any Additional Shares, deliver
to Pledgee written notice that Pledgor is delivering all
documents evidencing or representing the Pledged Collateral,
if any, to the Pledgee, at its offices or in deposit with
another institution at such place or places as the Pledgee
may from time to time elect, and all such documents shall be
held subject to the terms, covenants and conditions herein
set forth. Neither the Pledgee nor any director, officer or
employee of the Pledgee, shall be liable for any action
taken or omitted to be taken by it or them relative to any
of such documents except for its or their own gross
negligence, willful
<PAGE>
9
misconduct, or bad faith and the Pledgee shall not be liable
for any action or omission to act on the part of any agent
appointed and selected by the Pledgee with reasonable care
to act with respect to such documents (or any part thereof).
Section 5 Voting Rights; Distributions
5.1 Pledgee shall have the voting rights and other consensual
rights and powers pertaining to the Pledged Collateral or
any part thereof, except that Pledgee hereby authorizes, and
grants power of attorney to the Pledgor to, so long as no
Event of Default shall have occurred and be continuing,
exercise any and all of such voting and/or consensual rights
and powers relating or pertaining to the Pledged Collateral
or any part thereof, for any purpose not inconsistent with
the terms or purpose of this Pledge Agreement, the Indenture
and the applicable Secured Instrument, provided, however,
that the Pledgor shall not (i) exercise such rights which
may have an adverse effect on the value of the Pledged
Collateral or the pledge granted by this Pledge Agreement
and (ii) without the prior written approval of the Pledgee,
vote in respect of any one or more of the Pledged Shares or
Additional Shares in favor of a proposal (x) to amend the
Articles of Association of the Company or any other issues
of Additional Shares or (y) to dissolve and liquidate the
Company or any other issuer of Additional Shares or (z) to
issue any shares in addition to or in substitution for the
Pledged Shares or any Additional Shares or to re-issue
shares that have been repurchased, except in accordance with
the provisions of section 6.2 hereof.
<PAGE>
10
5.2 So long as no Event of Default shall have occurred and
subject to and in accordance with the provisions of the
Indenture, the Pledgor shall be entitled to receive, retain
and utilize the Distributions, free from the Pledge hereby
created; provided, however, that (i) such Distributions are
made in accordance with the provisions of this Pledge
Agreement and the Indenture and (ii) any and all such
Distributions consisting of rights or interests in the form
of securities shall be, and shall be forthwith delivered to
Pledgee to hold as Pledged Collateral and shall, if received
by Pledgor, be received for the benefit of Pledgee, be
segregated from the other property or funds of Pledgor, and
be forthwith delivered to Pledgee as Pledged Collateral in
the same form as so received (with any necessary or
appropriate endorsement).
5.3 Upon the occurrence and during the continuance of an Event
of Default, all rights of the Pledgor to exercise the voting
and/or consensual rights and powers which it is entitled to
exercise pursuant to Section 5.1 shall cease, and all such
rights shall thereupon be exercised by the Pledgee in
accordance with Section 5.5, which shall have the sole and
exclusive right and authority to exercise the voting and/or
consensual rights and powers relating or pertaining to the
Pledged Collateral or any part thereof.
5.4 Upon or at any time after the occurrence of an Event of
Default, the Pledgor's rights to receive Distributions in
accordance with Section 5.2, shall automatically cease and
the Pledgee shall be entitled to, and shall have the right
to collect, any and all Distributions, provided that the
Pledgee shall at its option apply any and all cash amounts
so collected to satisfy the Secured Obligations, to the
<PAGE>
11
fullest extent permitted by Netherlands Antilles law or hold
such Distributions as Pledged Collateral. Any Distributions
in the form of non-cash assets shall be received subject to
the Pledge hereby created to the fullest extent permitted by
or possible under Netherlands Antilles law or any other law
governing such assets or the creation of an encumbrance
thereover. Without limiting the generality of the
immediately preceding sentence, Pledgor shall, at its sole
cost and expense, from time to time execute and deliver to
Pledgee any and all documents necessary or appropriate to
confirm and protect the Pledge granted or purported to be
granted in the Distributions as contemplated in this Section
5.4 and to enable Pledgee to exercise and enforce its rights
and remedies with respect thereto.
5.5 Pledgee shall have no responsibility to the Pledgor or any
other Person for its exercise or failure to exercise such
voting or consensual rights and powers.
5.6 A notice from the Pledgee to the Company or other issuer of
Additional Shares with a copy to the Pledgor stating that an
Event of Default has occurred shall be sufficient for the
Company or other issuer of Additional Shares to accept the
Pledgee as being exclusively entitled to (i) the voting
and/or consensual rights and powers which it is entitled to
exercise pursuant to Section 5.1 and (ii) receive and
collect the Distributions. The Pledgee shall remain entitled
to exercise such powers and rights and receive such
Distributions and the Company or other issuer of Additional
Shares shall accept the Pledgee as being exclusively
entitled to such powers and rights and receive such
Distributions until the earlier of (i) a notice of
<PAGE>
12
termination of the Event of Default from the Pledgee to the
Company or other issuer of Additional Shares or (ii) a
decision by a competent court that no Event of Default
exists.
Notwithstanding the provisions of this Section 5.6, Pledgor
shall (at its sole cost and expense) from time to time
execute and deliver to Pledgee appropriate instruments as
Pledgee may reasonably request in order to permit Pledgee to
exercise its voting and consensual and other rights which it
may be entitled to exercise and to receive all Distributions
which it may be entitled to receive under this Section 5.
Section 6 Transfers and Other Liens
6.1 Pledgor shall not (i) sell, pledge, convey, assign or
otherwise dispose of, or grant any option, right or warrant
with respect to, any of the Pledged Collateral except as
permitted by the Indenture, (ii) create or permit to exist
any Lien upon or with respect to any Pledged Collateral
other than the Pledge granted to Pledgee under this Pledge
Agreement, or (iii) permit the Company or any other issuer
of Additional Shares to merge, consolidate or change its
legal form, unless all of the outstanding capital stock or
partnership interests of the surviving or resulting
corporation or partnership as the case may be is, upon such
merger or consolidation, pledged hereunder and no cash,
securities or other property is distributed in respect of
outstanding shares or partnership interests of any other
constituent corporation or partnership.
<PAGE>
13
6.2 Pledgor shall (i) cause each issuer of the Pledged
Collateral not to issue any shares in its capital stock or
other securities in addition to or in substitution for the
Pledged Shares and Additional Shares issued by such issuer,
except to Pledgor and (ii) pledge hereunder, immediately
upon its acquisition (directly or indirectly) thereof, any
and all additional shares of capital stock or other equity
securities of the issuer of the Pledged Collateral which are
required to be pledged hereunder.
Section 7 Representations, Warranties and Covenants
7.1 The Pledgor represents, warrants and covenants to the
Pledgee as follows:
(a) Enforceability; No Filings
This Pledge Agreement has been duly executed and delivered
by the Pledgor and constitutes the valid and legally binding
obligation of the Pledgor, enforceable against the Pledgor
in accordance with its terms. This Pledge Agreement creates
a valid first priority pledge ("eerste pandrecht") on the
Pledged Collateral. No filings, registrations or recordings
are necessary or appropriate to create, preserve and protect
the Pledge granted by Pledgor to Pledgee pursuant to this
Pledge Agreement, other than the registration of the Pledge
in the register of shareholders of the Company or of the
issuer of Additional Shares pursuant to Section 4.2 hereof.
(b) Authority; No Conflict
Pledgor has the requisite corporate power, authority and
legal right to pledge and grant the Pledge hereunder in all
the Pledged Collateral and there is no law, regulation,
<PAGE>
14
provision having the force of law on the Pledgor, judicial
order, security right, contract, agreement or other
instrument binding on the Pledgor or affecting the Pledgor's
properties, or any impediment or disability which would
conflict with or in any way prevent the execution, delivery
or performance by the Pledgor or the enforcement against the
Pledgor of this Pledge Agreement.
(c) No Consents
All authorizations, approvals, consents, permissions of, or
other action by or notice or filings with, any governmental
authorities (including exchange controls) or any other
Persons which are required to be obtained, taken, or made
(i) in connection with the execution and delivery by the
Pledgor of this Pledge Agreement and the performance by the
Pledgor of the Secured Obligations or (ii) for the exercise
by Pledgee of its rights and remedies hereunder have been
duly obtained, taken, or made and are in full force and
effect.
(d) No Lien
The Pledgor holds and, in the case of Pledged Collateral
acquired or obtained hereafter, shall at all times hold
title to the Pledged Collateral subject to no Lien other
than the Pledge created hereby. Pledgor is, and at the time
of delivery of the Pledged Collateral to Pledgee in
accordance with Sections 4 and 14 of this Pledge Agreement
will be, the sole legal and beneficial owner of the Pledged
Collateral. All Pledged Collateral is on the date hereof,
and, in the case of Pledged Collateral acquired or obtained
hereafter, will be, so owned by Pledgor free and clear of
any Lien except for the Lien granted to Pledgee pursuant to
this Agreement.
<PAGE>
15
(e) Due Authorization and Issuance
All of the Pledged Shares have been and the Additional
Shares will be duly authorized and validly issued and fully
paid and nonassessable.
(f) Principal Place of Business
Pledgor's principal place of business is located at
________________________. Pledgor shall not move its
principal place of business except to such new location as
Pledgor may establish in accordance with the last sentence
of this subsection. Pledgor shall not establish a new
location for its chief executive office nor shall it change
its name until (i) it shall have given Pledgee not less than
forty-five (45) days prior written notice of its intention
so to do, clearly describing such new location or name and
providing such other information in connection therewith as
Pledgee may request, and (ii) with respect to such new
location or name, Pledgor shall have taken all action
necessary or required by any and all existing or future
laws, or as Pledgee shall from time to time reasonably
request, to maintain the validity and priority of the Pledge
granted hereby.
(g) Pledged Collateral
Schedule I sets forth an accurate and complete description
of all of the outstanding capital stock of each Restricted
Subsidiary of the Issuers owned by Pledgor as of the date
hereof and all information set forth herein and on such
Schedule relating to the Pledged Collateral is accurate and
complete in all respects.
<PAGE>
16
(h) No Options, Warrants, etc.
There are no options, warrants, calls, rights, commitments
or agreements of any character to which Pledgor is a party
or by which it is bound obligating Pledgor to issue, deliver
or sell or cause to be issued, delivered or sold, additional
Pledged Shares or obligating Pledgor to grant, extend or
enter into any such option, warrant, call, right, commitment
or agreement. There are no voting trusts or other agreements
or understandings to which Pledgor is a party with respect
to the voting of the capital stock of any issuer of the
Pledged Shares.
(i) General
To the extent not represented and warranted above:
(1) Pledgor has the full legal capacity ("is volledig
beschikkingsbevoogd") to pledge the Pledged Collateral
in favor of Pledgee.
(2) Pledgor has not created in advance ("bij voorbaat") a
pledge which is still in existence on any of the
Pledged Collateral in favor of any party, under the
laws of the Netherlands Antilles or under the laws of
any other jurisdiction.
(3) Pledgor has not created in advance ("bij voorbaat") any
other security interest, regardless its form, which is
still in existence, in the Pledged Collateral under the
laws of the Netherlands Antilles or under the laws of
any other jurisdiction.
(4) No right or charge, including but not limited to any
"limited right" ("beperkt recht") exists on or with
<PAGE>
17
respect to the Assets, except for the rights
("rechten") of Pledgor.
(5) The Pledged Collateral have not been attached ("vrij
van beslag").
(6) Pledgor has not been dissolved and the Company has not
been dissolved and no resolution to dissolve Pledgor or
the Company has been adopted by its general meeting of
shareholders.
(7) No depositary receipts ("certificaten") have been
issued for the Pledged Shares.
(8) Except as permitted or contemplated under the
Indenture, neither the Company nor Pledgor has entered
into any agreement pursuant to which it is obliged to
do anything which would cause the foregoing to be
untrue and incorrect, nor has any agreement or other
instrument been entered into or signed by Pledgor or
the Company pursuant to which it has transferred or is
obliged to transfer any rights attached to the Pledged
Shares or any Additional Shares or pursuant to which it
has granted options, warrants or similar rights with
respect to the Pledged or Additional Shares.
(9) No resolution or other action has been adopted or
taken by the Company or its general meeting of
shareholders to amend the articles of association of
the Company as at the date hereof.
(10) The Company has no shareholder(s) other than Pledgor.
(11) At the date hereof Pledgor is not entitled to any
rights to subscribe for shares in the share capital of
the Company, nor to any dividend rights, options,
warrants, claim rights or similar rights.
<PAGE>
18
(12) The attached copy of the shareholder register of the
Company, is complete and correct as at the date hereof.
Section 8 Remedies
8.1 Upon the occurrence of an Event of Default, Pledgee may, but
shall not be obliged to, in addition to any other action
permitted by law (and not limited in any manner to the
remedies contained in the Notes, the Indenture or any other
Secured Instrument), take one or more of the following
actions, in accordance with the terms of and at the times
specified in the Indenture and the Additional Lender
Intercreditor Agreement, if any, whether or not it shall
have resorted to any other property securing the Secured
Obligations or shall have proceeded against any party liable
for any of the Secured Obligations.
8.2 Upon the occurrence of an Event of Default, Pledgee may, to
the fullest extent permitted by applicable law, (i) without
notice (except as herein set forth), advertisement, hearing
or process of law of any kind, sell any or all of the
Pledged ColIateral, at any public or private sale wherever
held, without prejudice to the provisions of Sections 1180,
1181 and 1182 of the Civil Code of the Netherlands Antilles
and (ii) retain and apply the Distributions received
pursuant to Section 5.4 hereof to the Secured Obligations in
accordance with Section 9 hereof. Pledgor agrees that, to
the extent notice of sale shall be required by law, five (5)
days notice to Pledgor of the time and place of any public
sale or the time after which any private sale or other
intended disposition is to take place shall be commercially
reasonable notification of such matters. No notification
need be given
<PAGE>
19
to Pledgor if it has signed, after the occurrence of an
Event of Default, an agreement renouncing or modifying any
right to notification of sale or other intended disposition.
Pledgee shall not be obligated to make any sale of the
Pledged Collateral regardless of notice of sale having been
given. Pledgee may adjourn any public or private sale from
time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be made
at the time and place to which it was so adjourned. In
connection with any sale, Pledgee shall have the right to
impose such limitations and restrictions on the sale of the
Pledged Collateral as Pledgee may deem to be necessary or
appropriate to comply with any applicable law rule or
regulation having applicability to the sale, including,
without limitation, restrictions on the number and
qualifications of the offerees and purchasers and
requirements for any necessary governmental approvals, and
the Pledgee shall be authorized at any such sale (if it
seems advisable to do so) to restrict the prospective
offerees and purchasers to persons who will represent and
agree that they are purchasing securities included in the
Pledged Collateral for their own account for investment and
not with a view to the distribution or sale thereof in
violation of applicable securities laws. The Pledgor shall
cooperate with the Pledgee in obtaining any necessary
consents of any competent banking authority and agrees to
cooperate with the Pledgee so that the sale of the Pledged
Collateral does not violate any applicable securities laws.
Without limiting the generality of the foregoing, the
Pledgor will cause the Company or any other issuer of
Pledged Collateral to (a) register the offer and sale of any
securities constituting the Pledged Collateral under such
securities laws or (b) should Pledgee so request, provide
Pledgee with such available material and financial and other
<PAGE>
20
information which counsel to Pledgee shall require in order
to be able to give an opinion to the effect that the offer
and sale of such Pledged Collateral does not require an
effective registration statement under such securities laws
whichever is requested by the Pledgee. The Pledgor hereby
expressly waives, to the fullest extent permitted by
applicable law, (i) any and all notices (except as herein
set forth), advertisements, hearings or process of law in
connection with the exercise by the Pledgee of any of its
rights and remedies hereunder and (ii) any claims against
Pledgee arising by reason of the fact that the price at
which any Pledged Collateral may have been sold at any
private sale was less than the price which might have been
obtained at a public sale, even if Pledgee accepts the first
offer received and does not offer such Pledged Collateral to
more than one offeree. Pledgee may be the purchaser of any
or all of the Pledged Collateral at any such sale and shall
be entitled, for the purpose of bidding and making
settlement or payment of the purchase price for all or any
portion of the Pledged Collateral sold at such sale, to use
and apply any of the Secured Obligations owed to Pledgee as
a credit on account of the purchase price of any Pledged
Collateral payable by Pledgee at such sale. Each purchaser
at any such sale shall acquire the property sold absolutely
free from any claim or right on the part of Pledgor, and
Pledgor hereby waives, to the fullest extent permitted by
law, all rights of redemption, stay and/or appraisal which
it now has or may at any time in the future have under any
rule of law or statute now existing or hereafter enacted.
Pledgee shall have the right to the extent permitted by law,
at any time upon the occurrence of an Event of Default and
without notice to Pledgor, to endorse, assign or otherwise
<PAGE>
21
transfer to or to register in the name of the Pledgee or any
of its nominees any or all of the Pledged Collateral. In
addition, Pledgee shall have the right at any time to
exchange certificates representing or evidencing Pledged
Collateral for certificates of smaller or larger
denominations.
Section 9 Application of Proceeds
The proceeds received by Pledgee in respect of any sale of,
collection from or other realization upon all or any part of the
Pledged Collateral pursuant to the exercise by Pledgee of its
remedies as a secured creditor as provided in Section 8 hereof
shall be applied, together with any other sums then held by
Pledgee pursuant to this Agreement, promptly by Pledgee in the
manner set forth in the Indenture and/or the Additional Lender
Intercreditor Agreement, if any.
Section 10 Reasonable Care
Pledgee shall be deemed to have exercised reasonable care in the
custody and preservation of the Pledged Collateral in its
possession, if any, if such Pledged Collateral is accorded
treatment substantially equivalent to that which Pledgee, in its
individual capacity, accords its own property consisting of
similar instruments or interests, it being understood that
Pledgee shall have any responsibility for (i) ascertaining or
taking action with respect to calls, conversions, exchanges,
maturities, tenders or other matters relating to any Pledged
Collateral, whether or not Pledgee has or is deemed to have
knowledge of such matters, or (ii) taking any necessary steps to
preserve rights against any Person with respect to any Pledged
Collateral.
<PAGE>
22
Section 11 Expenses
Pledgor will immediately upon demand pay to Pledgee the amount of
any and all expenses, including the fees and expenses of its
counsel (including, without limitation, any local or foreign
counsel) and the allocated costs of Pledgee's internal counsel
and the fees and expenses of any experts and agents which Pledgee
may incur in connection with (i) the collection of the Secured
Obligations, (ii) the enforcement and administration of this
Pledge Agreement, (iii) the custody or preservation of, or the
sale of, collection from, or other realization upon, any of the
Pledged Collateral, (iv) the exercise or enforcement of any of
the rights of Pledgee or (v) the failure by Pledgor to perform or
observe any of the provisions hereof. All amounts payable by
Pledgor under this Section 11 shall be due upon immediate demand,
shall bear interest from the date advanced to the date of
repayment thereof at a rate of 2% in excess of the highest rate
payable under the Notes (the "Default Rate"), and shall be part
of the Secured Obligations. Pledgor's obligations under this
Section 11 shall survive the termination of this Agreement and
the discharge of Pledgor's other obligations hereunder.
In addition to any of the other rights and remedies hereunder,
Pledgee shall have the right to institute a proceeding seeking
specific performance in connection with any of the agreements or
obligations hereunder.
<PAGE>
23
Section 12 No Waiver; Cumulative Remedies
12.1 No failure on the part of the Pledgee to exercise, no
course of dealing with respect to, and no delay on the part
of the Pledgee in exercising, any right, power or remedy
hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any such right, power or
remedy hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or
remedy. The remedies herein provided are cumulative and are
not exclusive of any other remedies provided by law.
12.2 In the event Pledgee shall have instituted any proceeding
to enforce any right, power or remedy under this Pledge
Agreement by foreclosure, sale, entry or otherwise, and
such proceeding shall have been discontinued or abandoned
for any reason or shall have been determined adversely to
Pledgee, then and in every such case, Pledgor and Pledgee
shall be restored to their respective former positions and
rights hereunder with respect to the Pledged Collateral,
and all rights, remedies and power of Pledgee shall
continue as if no such proceeding had been instituted.
Section 13 No Release
Nothing set forth in this Pledge Agreement shall relieve Pledgor
from the performance of any term, covenant, condition or
agreement on Pledgor's part to be performed or observed under or
in respect of any of the Pledged Collateral or from any liability
to any Person under or in respect of any of the Pledged
Collateral or shall impose any obligation on Pledgee to perform
or observe any such term, covenant, condition or agreement on
Pledgor's part to be so performed or observed shall impose any
<PAGE>
24
liability on Pledgee for any act or omission on the part of
Pledgor relating thereto or for any breach of any representation
or warranty on the part of Pledgor contained in this Pledge
Agreement, or under or in respect of the Pledged Collateral or
made in connection herewith or therewith.
Section 14 Supplements, Further Assurances
Pledgor agrees that at any time and from time to time (including,
without limitation, in connection with (i) any amendment,
amendment and restatement, supplement or modification of the
Indenture or (ii) any acquisition by Pledgor of Additional
Shares), at the sole cost and expenses of Pledgor, Pledgor shall
promptly execute and deliver all further instruments and
documents, including, without limitation, supplemental or
additional pledge agreements, and take all further actions that
may be necessary or required by any and all existing and future
laws or that Pledgee may from time to time reasonably request, in
order to protect the validity and priority of the Pledge granted
or purported to be granted hereby or to enable Pledgee to
exercise and enforce its rights and remedies hereunder with
respect to any Pledged Collateral.
Section 15 Notices
Unless otherwise provided herein any notice or other
communication herein required or permitted to be given shall be
given in the manner and at the address set forth in the
Indenture, or as to any party at such other address as shall be
designated by such party in a written notice to the other party
complying as to delivery with the terms of this Section 15. All
such notices and other communications shall be deemed to have
<PAGE>
25
been given when delivered in person, or received by telecopy or
telex; or one (l) Business Day after delivery to the office of
such overnight courier service; or five (5) Business Days after
deposit in the United States mail, registered or certified, with
postage prepaid and properly addressed; provided, however, that
notice to Pledgee shall not be effective until received by
Pledgee.
Section 16 Continuing Security Interest; Assignment
This Pledge Agreement shall create a continuing security interest
in the Pledged Collateral and shall (i) be binding upon Pledgor,
its successors and assigns, and (ii) inure, together with the
rights and remedies of Pledgee hereunder, to the benefit of
Pledgee and each of their respective successors, transferees and
assigns; no other Persons (including, without limitation, any
other creditor of the Pledgor) shall have any interest herein or
any right or benefit with respect hereto.
Section 17 Severability of Provisions
Any provision of this Pledge Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions
hereof or affecting the validity or enforceability of such
provision in any other jurisdiction.
Section 18 Pledgee
Pledgee has been appointed as trustee hereunder pursuant to the
Indenture and the Additional Lender Intercreditor Agreement, if
any. The actions of Pledgee hereunder are subject to the
<PAGE>
26
provisions of the Indenture and/or the Additional Lender
Intercreditor Agreement, if any. Pledgee shall have the right
hereunder to make demands, to give notice, to exercise or refrain
from exercising any rights, and to take or refrain from taking
action (including, without limitation the release or substitution
of Pledged Collateral), in accordance with this Pledge Agreement,
the Indenture and the Additional Lender Intercreditor Agreement,
if any. Pledgee may resign its position as trustee and a
successor Pledgee may be appointed in the manner provided in the
Indenture and the Additional Lender Intercreditor Agreement, if
any. Upon the acceptance of any appointment as Pledgee by a
successor Pledgee, that successor Pledgee shall thereupon succeed
to and become vested with all the rights, powers, privileges and
duties of the retiring Pledgee under this Pledge Agreement, and
the retiring Pledgee shall thereupon be discharged from its
duties and obligations under this Pledge Agreement. After any
retiring Pledgee's resignation, the provisions of this Pledge
Agreement shall inure to its benefit as to any actions taken or
omitted to be taken by it under this Pledge Agreement while it
was Pledgee.
Section 19 Pledgee may Perform
If the Pledgor shall fail to do any act or things which it has
covenanted to do hereunder, the Pledgee may (but shall not be
obligated to) do the same or cause it to be done or remedy any
such breach, and may expend its funds for such purpose. Any and
all amounts so expended by the Pledgee shall be repayable to it
by the Pledgor immediately upon the Pledgee's demand therefor,
with interest at a per annum rate equal to the Default Rate.
Pledgor's obligations under this Section 19 shall survive the
termination of this Pledge Agreement and the discharge of
Pledgor's obligations under this Pledge Agreement.
<PAGE>
27
Section 20 Pledgee Appointed Attorney-in-Fact
The Pledgor hereby appoints the Pledgee the Pledgor's
attorney-in-fact with an interest, with full power of
substitution, for the purpose of taking such action and executing
agreements, instruments and other documents, in the name of the
Pledgor or otherwise as the Pledgee may deem necessary or
advisable to accomplish the purposes hereof, which appointment is
coupled with an interest and is irrevocable. Pledgee will notify
the Pledgor of such action and provide the Pledgor with copies of
such documents prior to or substantially contemporaneously with
the taking or filing thereof.
Section 21 Termination
This Pledge Agreement and the Pledge created hereby shall
automatically terminate when all Secured Obligations shall have
been fully paid and satisfied in accordance with the provisions
of the Indenture. At that time, the Pledgee shall (without
recourse upon, or any warranty whatsoever by, Pledgee) deliver to
Pledgor all Pledged Collateral and related documents then in the
custody or possession of the Pledgee, if any, all without
recourse upon, or warranty whatsoever by the Pledgee and at the
cost and expense of the Pledgor. The Pledgee, at the cost and
expense of the Pledgor, shall do such further acts and things,
and execute and deliver to the Pledgor such additional releases,
assignments and instruments, as the Pledgor may reasonably
require or reasonably deem advisable to carry into effect the
purpose of this Section 21.
Section 22 Limitation on Interest Payable
<PAGE>
28
It is the intention of the parties to conform strictly to the
usury laws, whether state or federal, that are applicable to the
transaction of which this Pledge Agreement is a part. All
agreements between Pledgor and Pledgee, whether now existing or
hereafter arising and whether oral or written, are hereby
expressly limited so that in no contingency or event whatsoever
shall the amount paid or agreed to be paid by Pledgor for the
use, forbearance or detention of the money to be loaned or
advanced under the Indenture or any related document, or for the
payment or performance of any covenant or obligation contained
herein or in the Indenture, exceed the maximum amount permissible
under applicable usury laws. If under any circumstances
whatsoever fulfillment of any such provision, at the time
performance of such provision shall be due, shall involve
exceeding the limit of validity prescribed by law, then the
obligation to be fulfilled shall be reduced to the limit of such
validity. If under any circumstances Pledgor shall have paid an
amount deemed interest by applicable law, which would exceed the
highest lawful rate, such amount that would be excessive interest
under applicable usury laws shall be applied to the reduction of
the principal amount owing in respect of the Secured Obligations
and not to the payment of interest, or if such excessive interest
exceeds the unpaid balance of principal and any other amounts due
hereunder, the excess shall be refunded to Pledgor by the holders
of the Notes. All sums paid or agreed to be paid for the use,
forbearance or detention of the principal under any extension of
credit or advancement of funds by Marine Midland Bank, as
trustee, shall, to the extent permitted by applicable law, and to
the extent necessary to preclude exceeding the limit of validity
prescribed by law, be amortized, prorated, allocated and spread
from the date of this Pledge Agreement until payment in full of
the Secured Obligations so that the actual rate of interest on
<PAGE>
29
account of such principal amounts is uniform throughout the term
hereof.
Section 23 Headings
Section headings used in this Pledge Agreement are for
convenience of reference only and shall not affect the
construction of this Pledge Agreement.
Section 24 Amendments
No amendment, modification, supplement, termination or waiver of
or to any provision of this Pledge Agreement, nor any consent to
any departure by the Pledgor from any provision of this Pledge
Agreement, shall be effective unless the same shall be in writing
and signed by the Pledgee. Any amendment, modification or
supplement of or to any provision of this Pledge Agreement, any
waiver of any provision of this Pledge Agreement, and any consent
to any departure by the Pledgor from the terms of any provision
of this Pledge Agreement shall be effective only in the specific
instance and for the specific purpose for which made or given. No
notice to or demand upon the Pledgor in any instance hereunder
shall entitle the Pledgor to any other or further notice or
demand in similar or other circumstance.
<PAGE>
30
Section 25 Indemnification
Each and every obligation of the Issuers to indemnify and hold
harmless the Trustee in the Indenture contained in Section 7.07
thereof is incorporated herein mutatis mutandis as an obligation
of Pledgor hereunder to indemnify Pledgee, and Marine Midland
Bank, in its individual capacity, and the officers, directors,
employees, agents and applicants thereof.
Section 26 Governing law; Consent to Jurisdiction
This Pledge Agreement shall be governed by and construed in
accordance with the laws of the Netherlands Antilles. The
competent courts of the Netherlands Antilles in Curacao shall
have non-exclusive jurisdiction.
Section 27 Execution in Counterparts
This Pledge Agreement may be executed in any number of
counterparts, each of which counterparts, when so executed and
delivered, shall be deemed to be an original and all of which
counterparts, taken together, shall constitute one and the same
agreement.
<PAGE>
IN WITNESS WHEREOF, the parties hereto executed or have caused
this Pledge Agreement to be executed by their respective managing
directors or officers thereunto duly authorized, as the case may
be, as of the day and year first above written.
STATIA TERMINALS INTERNATIONAL N.V.,
as pledgor
By: /s/ David B. Pittaway
Title: Attorney-in-fact
MARINE MIDLAND BANK, in its capacity as trustee,
as pledgee
By: /s/ Eileen M. Hughes
Title: Assistant Vice President
<PAGE>
32
SCHEDULE I
Shares pledged
- --------------------------------------------------------------------------------
Percentage
of all
Description Share Nos./ Capital
Issuer of Shares Certificate Nos. Par Value No. of shares of Issuer
- ------ ----------- ---------------- --------- ------------- ----------
<PAGE>
SCHEDULE II
Acknowledgement
Statia Terminals Corporation N.V. (the "Company"), hereby
represented by two of its managing directors, accepts notice of
and acknowledges the pledge created by the attached share pledge
agreement between Statia Terminals International N.V. (the
"Pledgor") and Marine Midland Bank, as trustee (the "Pledgee")
(the "Share Pledge Agreement"), agrees to and acknowledges the
contents of the Share Pledge Agreement, undertakes to register
the pledge of Shares in the shareholder register of the Company,
including the transfer of voting rights to the Pledgee in
accordance with Section 5 and to maintain such registration until
the Pledgee has instructed in writing otherwise, and undertakes
to Pledgee during the existence of the pledge created thereby to
comply with the provisions of the Share Pledge Agreement so long
as the pledge is in effect.
Dated
STATIA TERMINALS CORPORATION N.V.
/s/ David B. Pittaway /s/ Justin Wender
By: David B. Pittaway By: Justin Wender
Managing Director Managing Director
<PAGE>
34
Schedule III
[Form of Pledge Amendment]
To: the Pledgee
This is to inform you that we have acquired or obtained the following Additional
Shares as defined in the Share Pledge Agreement dated November 27, 1996, between
yourselves and ourselves:
Shares pledged
- --------------------------------------------------------------------------------
Percentage
of all
Description Share Nos./ Capital
Issuer of Shares Certificate Nos. Par Value No. of shares of Issuer
- ------ ----------- ---------------- --------- ------------- ----------
and that these Additional Shares are, and to the extent required, are hereby
made, subject to the Pledge as defined in said Share Pledge Agreement. This
Pledge Amendment forms an integral part of the Share Pledge Agreement.
___________________________________
Pledgor
Date:
<PAGE>
35
Acknowledgement
Statia Terminals Corporation N.V. (the "Company")/[ ] (the
"Issuer"), hereby represented by [two of] its managing
director[s], accepts notice of and acknowledges the pledge
created by the attached Pledge Amendment between Statia Terminals
International N.V. (the "Pledgor") and Marine Midland Bank, as
trustee (the "Pledgee") pursuant to the Share Pledge Agreement
(as defined therein), agrees to and acknowledges the contents of
the Share Pledge Agreement (including the Pledge Amendment),
undertakes to register the pledge of Additional Shares in the
shareholder register of the Company/Issuer, including the
transfer of voting rights to the Pledgee in accordance with
Section 5 and to maintain such registration until the Pledgee has
instructed in writing otherwise, and undertakes to Pledgee during
the existence of the pledge created thereby to comply with the
provisions of the Share Pledge Agreement so long as the pledge is
in effect.
Dated
STATIA TERMINALS CORPORATION N.V./ISSUER
By: By:
Managing Director Managing Director
<PAGE>
SHARE PLEDGE AGREEMENT
SHARE PLEDGE AGREEMENT (the "Pledge Agreement"), dated as of
November 27, 1996, by and between Statia Terminals N.V., a
company incorporated under the laws of the Netherlands Antilles
having its corporate seat at L.B. Smittplein 3, Curacao,
Netherlands Antilles ("Pledgor") and Marine Midland Bank, a New
York banking corporation and trust company having its registered
office at 140 Broadway, 12th Floor, New York, NY 10005-1180, as
trustee (in such capacity and together with any successors and
assigns in such capacity, "Pledgee") pursuant to the Indenture
(as hereinafter defined) and the Additional Lender Intercreditor
Agreement as defined in the Indenture, if any.
WITNESSETH:
WHEREAS, Statia Terminals International N.V. ("STI"), a
company incorporated under the laws of the Netherlands Antilles,
Statia Terminals Canada Incorporated (together with Terminals
hereafter collectively referred to as the "Issuers"), Pledgor,
certain subsidiaries of Pledgor and Pledgee are contemporaneously
with the execution and delivery of this Pledge Agreement entering
into a certain indenture, dated as of November 27, 1996 (as
amended, restated, supplemented or otherwise modified from time
to time, the "Indenture") pursuant to which the Issuers are
issuing 11 3/4% first mortgage notes due 2003 (the "First
Mortgage Notes"), in the aggregate principal amount of
US$135,000,000;
WHEREAS, it is contemplated that the Issuers may, after the
date hereof, (i) issue exchange notes pursuant to the Indenture
(the "Exchange Notes"), together with the First Mortgage Notes,
the Notes"), and (ii) incur certain additional indebtedness
("Additional Secured Indebtedness") in accordance with the
<PAGE>
2
provisions of Section 4.04 and Section 4.14 of the Indenture
which shall be equally and ratably secured by the Pledged
Collateral (as hereinafter defined);
WHEREAS, the Pledgor is entering into this Pledge Agreement
with Pledgee acting for the benefit of itself, the holders of the
Notes and the holders of Additional Secured Indebtedness
(collectively the "Secured Parties") for the purpose, among other
things, of securing and providing for the payment of all amounts
of principal, premium, if any, interest, costs, charges, fees,
expenses, commissions, reimbursements, indemnities and all other
amounts from time to time due and payable by the Pledgor to the
Secured Parties (whether at stated maturity, by acceleration or
otherwise, including, without limitation, the payments of
interest and other amounts which would accrue and become due but
for the filing of a petitition in bankruptcy or the operation of
any stay under any Bankruptcy Law (as defined in the Indenture))
under the Indenture, the Notes, this Pledge Agreement, and any
other instrument governing the obligations of Pledgor with
respect to the Additional Secured Indebtedness (the "Additional
Indebtedness Instrument", together with the Indenture, the Notes,
and this Pledge Agreement collectively the "Secured
Instruments"), as well as the performance and payment of all
other obligations and liabilities, now existing or hereafter
arising whatsoever which are now or at any time hereafter may be
or become due, owing or payable under any of the Secured
Instruments, in any form or currency, to the Secured Parties by
the Pledgor, actually or contingently, solely or jointly and/or
severally with another or others, as principal or surety, or by
virtue of any current or other account in connection with any
advance, loan, credit, instrument, guarantee or indemnity made or
issued to, for or at the request of the Pledgor pursuant to any
Secured Instrument and costs, for the purpose hereof including,
<PAGE>
3
but not limited to, cost of collection of any amount due to the
Secured Parties (collectively, the "Secured Obligations");
WHEREAS, the Indenture is governed by the laws of State of
New York;
WHEREAS, the Pledgor is of the opinion that the execution
and delivery of this Agreement and the performance of its
obligations hereunder is in its corporate interest and does not
prejudice the rights of its creditors;
NOW, THEREFORE, in consideration of the foregoing premises
the Pledgor agrees with the Pledgee as follows:
Section 1 Definitions
Capitalized terms used herein and not defined shall have the
meanings assigned to them in the Indenture.
Section 2 Obligations Owed to Pledgee as Trustee
2.1 In order to ensure that a valid pledge is created pursuant
to this Pledge Agreement, Pledgor hereby agrees and
covenants with Pledgee that it shall (i) pay to Pledgee (as
and when due by the Pledgor in accordance with the
provisions of the applicable Secured Instruments) all
amounts of money due and payable to the holders of the Notes
and to the holders of the Additional Secured Indebtedness
under their respective Secured Instruments, in order to
permit Pledgee to make the payments required under the
applicable Secured Instrument, as and when due, to the
holders of the Notes and to the holders of Additional
Secured Indebtedness, and (ii) perform all of its other
<PAGE>
4
obligations to the holders of the Notes and the holders of
the Additional Secured Indebtedness in accordance with their
respective Secured Instruments. The agreements, covenants
and obligations of Pledgor set forth in the immediately
preceding sentence shall hereinafter be referred to as the
"Debtholder Obligations". It is the intention of the parties
that the Debtholder Obligations shall be identical and
equal, but alternative to the obligations of Pledgor to the
holders of the Notes and to the holders of Additional
Secured Indebtedness under their respective Secured
Instruments.
2.2 The Pledgor and the Pledgee agree and acknowledge that the
Debtholder Obligations are obligations and liabilities of
the Pledgor to the Pledgee, as trustee and paying agent,
separate and independent from and without prejudice to the
liabilities which the Pledgor has or may have to the holders
of the Notes and to the holders of the Additional Secured
Indebtedness, provided that the total amount due and payable
under the Debtholder Obligations shall be decreased to the
extent that the Pledgor shall have paid any amounts to the
Pledgee, which are due, payable and owing to any holder of
the Notes and any holder of Additional Secured Indebtedness
in accordance with their respective Secured Instruments.
2.3 In connection with the performance of the provisions of this
Pledge Agreement, the Pledgee (in its capacity as Trustee)
shall have the duties, and shall be entitled to the
benefits, set forth in the Indenture and/or the Additional
Lender Intercreditor Agreement, if any, all to the extent
permitted by applicable law.
<PAGE>
5
2.4 The relationship of the holders of the Notes, the holders of
Additional Secured Indebtedness and the Pledgee are or will
be, as the case may be, governed by the Indenture and the
applicable Intercreditor Agreements, which are or will be,
as the case may be, governed by and construed in accordance
with the laws of the State of New York.
Section 3 Pledge
3.1 In order to secure and to provide for the payment and
performance when due of all Secured Obligations, Pledgor
hereby grants and, in the case of Pledged Collateral
hereafter acquired or obtained, agrees to grant to Pledgee
for the benefit of the Secured Parties and Pledgee hereby
accepts from the Pledgor a first right of pledge ("eerste
pandrecht") (the "Pledge"), to all of the right, title and
interest of Pledgor in, to and over the following whether
now existing or hereafter acquired (collectively, the
"Pledged Collateral"):
(i) all issued and outstanding shares of Statia
Laboratory Services N.V. ("Labs"), a company
incorporated under the laws of the Netherlands
Antilles, all issued and outstanding shares of Statia
Tugs N.V. ("Tugs"), a company incorporated under the
laws of the Netherlands Antilles, and all issued and
outstanding shares of Statia Shipping N.V.
("Shipping"), a company incorporated under the laws of
the Netherlands Antilles (together with Labs and Tugs,
hereinafter referred to as the "Companies"), all as
listed in Schedule I hereto (the "Pledged Shares");
<PAGE>
6
(ii) all additional shares of capital stock of the
Companies from time to time acquired by Pledgor in any
manner (including, without limitation) all stock
dividends, bonus shares, rights of issue, options and
warrants at any time and from time to time received,
receivable or otherwise distributed with respect to
the Pledged Shares and all issued and outstanding
shares of capital stock or other equity interests of
each other Netherlands Antilles Person which, after
the date hereof, is or becomes, as a result of any
occurrence, a Restricted Subsidiary of Pledgor
(collectively the "Additional Shares");
(iii) dividends, cash, distributions from retained
earnings, returns of paid up nominal share capital,
return of paid in capital surplus income, profits and
other property, interests or proceeds at any time and
from time to time received, receivable or otherwise
distributed with respect to the Pledged Shares and
Additional Shares (the "Distributions");
(iv) all interest of Pledgor in the entries on the
books of any financial intermediary pertaining to the
Pledged Collateral; and
(v) (a) any and all proceeds of any insurance (except
payments made to a Person which is not a party to this
Pledge Agreement), indemnity, warranty or guarantee
payable to Pledgee or to Pledgor from time to time
with respect to any of the Pledged Collateral, (b)
payments (in any form whatsoever)
<PAGE>
7
made or due and payable to Pledgor from time to time
in connection with any requisition, confiscation,
condemnation, seizure or forfeiture of all or any part
of the Pledged Collateral by any governmental
authority (or any Person acting under color of
governmental authority), (c) instruments representing
obligations to pay amounts in respect of Pledged
Shares, (d) products of the Pledged Collateral, and
(e) other amounts from time to time paid or payable
under or in connection with any of the Pledged
Collateral.
Section 4 Notification; Delivery of Pledged Collateral
4.1 The Pledge granted hereunder has been notified to and
acknowledged by the Companies as set forth in Schedule II.
Upon acquisition by Pledgor of any and all Additional
Shares, Pledgor shall cause the Pledge granted hereunder to
be notified to and acknowledged by the Companies or the
issuer of such Additional Shares, as the case may be, and
with due observance to the provisions of this section 4.
4.2 Immediately upon this Pledge Agreement becoming effective
with respect to the Pledged Shares and promptly upon each
receipt or acquisition thereof with respect to Additional
Shares, the Pledgor will deliver or cause to be delivered to
the Pledgee a duly authenticated extract from the register
of shareholders of the Companies and any issuer of
Additional Shares evidencing the entry in such register of
the Pledge granted hereunder, and if in respect of any one
or more of the Pledged Shares or Additional Shares, as the
case may be, share certificates have been issued, the
Pledgor shall in addition deliver to the Pledgee the
<PAGE>
8
originals of such share certificates, duly endorsed to
evidence the Pledge granted hereunder. All Pledged Shares
and Additional Shares shall be in suitable form for transfer
by delivery or shall be accompanied by duly executed
instruments of transfer or assignment in blank, all in form
and substance necessary or appropriate to complete the
Pledge and give the Pledgee the right to transfer the
Pledged Shares and Additional Shares under the terms hereof.
4.3 Pledgor shall, upon obtaining any Additional Shares of any
Person, promptly (and in any event within five Business
Days) deliver to Pledgee a pledge amendment, duly executed
by Pledgor, in substantially the form of Schedule III hereto
(each, a "Pledge Amendment"), in respect of the additional
Pledged Shares which are to be pledged pursuant to this
Pledge Agreement, and an acknowledgement of such Pledge
Amendment by the Companies or the issuer of such Additional
Shares, as the case may be, confirming the Pledge hereby
created on and in respect of such Additional Shares. Pledgor
hereby authorizes Pledgee to attach each Pledge Amendment to
this Pledge Agreement and agrees that all Additional Shares
listed on any Pledge Amendment delivered to Pledgee shall
for all purposes hereunder be considered Pledged Collateral
from and after the date of such Pledge Amendment.
4.4 Pledgor shall further promptly (and in any event within
five Business Days) upon obtaining any Additional Shares,
deliver to Pledgee written notice that Pledgor is delivering
all documents evidencing or representing the Pledged
Collateral, if any, to the Pledgee, at its offices or in
deposit with another institution at such place or
<PAGE>
9
places as the Pledgee may from time to time elect, and all
such documents shall be held subject to the terms, covenants
and conditions herein set forth. Neither the Pledgee nor any
director, officer or employee of the Pledgee, shall be
liable for any action taken or omitted to be taken by it or
them relative to any of such documents except for its or
their own gross negligence, willful misconduct, or bad faith
and the Pledgee shall not be liable for any action or
omission to act on the part of any agent appointed and
selected by the Pledgee with reasonable care to act with
respect to such documents (or any part thereof).
Section 5 Voting Rights; Distributions
5.1 Pledgee shall have the voting rights and other consensual
rights and powers pertaining to the Pledged Collateral or
any part thereof, except that Pledgee hereby authorizes, and
grants power of attorney to the Pledgor to, so long as no
Event of Default shall have occurred and be continuing,
exercise any and all of such voting and/or consensual rights
and powers relating or pertaining to the Pledged Collateral
or any part thereof, for any purpose not inconsistent with
the terms or purpose of this Pledge Agreement, the Indenture
and the applicable Secured Instrument, provided, however,
that the Pledgor shall not (i) exercise such rights which
may have an adverse effect on the value of the Pledged
Collateral or the pledge granted by this Pledge Agreement
and (ii) without the prior written approval of the Pledgee,
vote in respect of any one or more of the Pledged Shares or
Additional Shares in favor of a proposal (x) to amend the
Articles of Association of the Companies or any other issues
of Additional Shares or
<PAGE>
10
(y) to dissolve and liquidate the Companies or any other
issuer of Additional Shares or (z) to issue any shares in
addition to or in substitution for the Pledged Shares or any
Additional Shares or to re-issue shares that have been
repurchased, except in accordance with the provisions of
section 6.2 hereof.
5.2 So long as no Event of Default shall have occurred and
subject to and in accordance with the provisions of the
Indenture, the Pledgor shall be entitled to receive, retain
and utilize the Distributions, free from the Pledge hereby
created; provided, however, that (i) such Distributions are
made in accordance with the provisions of this Pledge
Agreement and the Indenture and (ii) any and all such
Distributions consisting of rights or interests in the form
of aecurities shall be, and shall be forthwith delivered to
Pledgee to hold as Pledged Collateral and shall, if received
by Pledgor, be received for the benefit of Pledgee, be
segregated from the other property or funds of Pledgor, and
be forthwith delivered to Pledgee as Pledged Collateral in
the same form as so received (with any necessary or
appropriate endorsement).
5.3 Upon the occurrence and during the continuance of an Event
of Default, all rights of the Pledgor to exercise the voting
and/or consensual rights and powers which it is entitled to
exercise pursuant to Section 5.1 shall cease, and all such
rights shall thereupon be exercised by the Pledgee in
accordance with Section 5.5, which shall have the sole and
exclusive right and authority to exercise the voting and/or
consensual rights and powers relating or pertaining to the
Pledged Collateral or any part thereof.
<PAGE>
11
5.4 Upon or at any time after the occurrence of an Event of
Default, the Pledgor's rights to receive Distributions in
accordance with Section 5.2, shall automatically cease and
the Pledgee shall be entitled to, and shall have the right
to collect, any and all Distributions, provided that the
Pledgee shall at its option apply any and all cash amounts
so collected to satisfy the Secured Obligations, to the
fullest extent permitted by Netherlands Antilles law or hold
such Distributions as Pledged Collateral. Any Distributions
in the form of non-cash assets shall be received subject to
the Pledge hereby created to the fullest extent permitted by
or possible under Netherlands Antille law or any other law
governing such assets or the creation of an encumbrance
thereover. Without limiting the generality of the
immediately preceding sentence, Pledgor shall, at its sole
cost and expense, from time to time execute and deliver to
Pledgee any and all documents necessary or appropriate to
confirm and protect the Pledge granted or purported to be
granted in the Distributions as contemplated in this Section
5.4 and to enable Pledgee to exercise and enforce its rights
and remedies with respect thereto.
5.5 Pledgee shall have no responsibility to the Pledgor or any
other Person for its exercise or failure to exercise such
voting or consensual rights and powers.
5.6 A notice from the Pledgee to the Companies or other issuer
of Additional Shares with a copy to the Pledgor stating that
an Event of Default has occurred shall be sufficient for the
Companies or other issuer of Additional Shares to accept the
Pledgee as being exclusively entitled to (i) the voting
and/or consensual rights and powers which it is
<PAGE>
12
entitled to exercise pursuant to Section 5.1 and (ii)
receive and collect the Distributions. The Pledgee shall
remain entitled to exercine such powers and rights and
receive such Distributions and the Companies or other issuer
of Additional Shares shall accept the Pledgee as being
exclusively entitled to such powers and rights and receive
such Distributions until the earlier of (i) a notice of
termination of the Event of Default from the Pledgee to the
Companies or other issuer of Additional Shares or (ii) a
decision by a competent court that no Event of Default
exists.
Notwithstanding the provisions of this Section 5.6, Pledgor
shall (at its sole cost and expense) from time to time
execute and deliver to Pledgee appropriate instruments as
Pledgee may reasonably request in order to permit Pledgee to
exercise its voting and consensual and other rights which it
may be entitled to exercise and to receive all Distributions
which it may be entitled to receive under this Section 5.
Section 6 Transfers and Other Liens
6.1 Pledgor shall not (i) sell, pledge, convey, assign or
otherwise dispose of, or grant any option, right or warrant
with respect to, any of the Pledged Collateral except as
permitted by the Indenture, (ii) create or permit to exist
any Lien upon or with respect to any Pledged Collateral
other than the Pledge granted to Pledgee under this Pledge
Agreement, or (iii) permit the Companies or any other issuer
of Additional Shares to merge, consolidate or change its
legal form, unless all of the outstanding capital stock or
partnership interests of the surviving or resulting
<PAGE>
13
corporation or partnership as the case may be is, upon such
merger or consolidation, pledged hereunder and no cash,
securities or other property is distributed in respect of
outstanding shares or partnership interests of any other
constituent corporation or partnership.
6.2 Pledgor shall (i) cause each issuer of the Pledged
Collateral not to issue any shares in its capital stock or
other securities in addition to or in substitution for the
Pledged Shares and Additional Shares issued by such issuer,
except to Pledgor and (ii) pledge hereunder, immediately
upon its acquisition (directly or indirectly) thereof, any
and all additional shares of capital stock or other equity
securities of the issuer of the Pledged Collateral which are
required to be pledged hereunder.
Section 7 Representations, Warranties and Covenants
7.1 The Pledgor represents, warrants and covenants to the
Pledgee as follows:
(a) Enforceability; No Filings
This Pledge Agreement has been duly executed and delivered
by the Pledgor and constitutes the valid and legally binding
obligation of the Pledgor, enforceable against the Pledgor
in accordance with its terms. This Pledge Agreement creates
a valid first priority pledge ("eerste pandrecht") on the
Pledged Collateral. No filings, registrations or recordings
are necessary or appropriate to create, preserve and protect
the Pledge granted by Pledgor to Pledgee pursuant to this
Pledge Agreement, other than the registration of the Pledge
in the register of shareholders
<PAGE>
14
of the Companies or of the issuer of Additional Shares
pursuant to Section 4.2 hereof.
(b) Authority; No Conflict
Pledgor has the requisite corporate power, authority and
legal right to pledge and grant the Pledge hereunder in all
the Pledged Collateral and there is no law, regulation,
provision having the force of law on the Pledgor, judicial
order, security right, contract, agreement or other
instrument binding on the Pledgor or affecting the Pledgor's
properties, or any impediment or disability which would
conflict with or in any way prevent the execution, delivery
or performance by the Pledgor or the enforcement against the
Pledgor of this Pledge Agreement.
(c) No Consents
All authorizations, approvals, consents, permissions of, or
other action by or notice or filings with, any governmental
authorities (including exchange controls) or any other
Persons which are required to be obtained, taken, or made
(i) in connection with the execution and delivery by the
Pledgor of this Pledge Agreement and the performance by the
Pledgor of the Secured Obligations or (ii) for the exercise
by Pledgee of its rights and remedies hereunder have been
duly obtained, taken, or made and are in full force and
effect.
(d) No Lien
The Pledgor holds and, in the case of Pledged Collateral
acquired or obtained hereafter, shall at all times hold
title to the Pledged Collateral subject to no Lien other
than the Pledge created hereby. Pledgor is, and at the time
of delivery of the Pledged Collateral to Pledgee in
<PAGE>
15
accordance with Sections 4 and 14 of this Pledge Agreement
will be, the sole legal and beneficial owner of the Pledged
Collateral. All Pledged Collateral is on the date hereof,
and, , in the case of Pledged Collateral acquired or
obtained hereafter, will be, so owned by Pledgor free and
clear of any Lien except for the Lien granted to Pledgee
pursuant to this Agreement.
(e) Due Authorization and Issuance
All of the Pledged Shares have been and the Additional
Shares will be duly authorized and validly issued and fully
paid and nonassessable.
(f) Principal Place of Business
Pledgor's principal place of business is located at
________________________________. Pledgor shall not move its
principal place of business except to such new location as
Pledgor may establish in accordance with the last sentence
of this subsection. Pledgor shall not establish a new
location for its chief executive office nor shall it change
its name until (i) it shall have given Pledgee not less than
forty-five (45) days prior written notice of its intention
so to do, clearly describing such new location or name and
providing such other information in connection therewith as
Pledgee may request, and (ii) with respect to such new
location or name, Pledgor shall have taken all action
necessary or required by any and all existing or future
laws, or as Pledgee shall from time to time reasonably
request, to maintain the validity and priority of the Pledge
granted hereby.
(g) Pledged Collateral
<PAGE>
16
Schedule I sets forth an accurate and complete description
of all of the outstanding capital stock of each Restricted
Subsidiary of the Issuer owned by Pledgor as of the date
hereof and all information set forth herein and on such
Schedule relating to the Pledged Collateral is accurate and
complete in all respects.
(h) No Options, Warrants, etc.
There are no options, warrants, calls, rights, commitments
or agreements of any character to which Pledgor is a party
or by which it is bound obligating Pledgor to issue, deliver
or sell or cause to be issued, delivered or sold, additional
Pledged shares or obligating Pledgor to grant, extend or
enter into any such option, warrant, call, right, commitment
or agreement. There are no voting trusts or other agreements
or understandings to which Pledgor is a party with respect
to the voting of the capital stock of any issuer of the
Pledged Shares.
(i) General
To the extent not represented and warranted above:
(1) Pledgor has the full legal capacity ("is volledig
beschikkingsbevoegd") to pledge the Pledged Collateral
in favor of Pledgee.
(2) Pledgor has not created in advance ("bij voorbaat") a
pledge which is still in existence on any of the
Pledged Collateral in favor of any party, under the
laws of the Netherlands Antilles or under the laws of
any other jurisdiction.
(3) Pledgor has not created in advance ("bij voorbaat") any
other security interest, regardless its form,
<PAGE>
17
which is still in existence, in the Pledged Collateral
under the laws of the Netherlands Antilles or under the
laws of any other jurisdiction.
(4) No right or charge, including but not limited to any
"limited right" ("beperkt recht") exists on or with
respect to the Assets, except for the rights
("rechten") of Pledgor.
(5) The Pledged Collateral have not been attached ("vrij
van beslag").
(6) Pledgor has not been dissolved and the Companies has
not been dissolved and no resolution to dissolve
Pledgor or the Companies has been adopted by its
general meeting of shareholders.
(7) No depositary receipts ("certificaten") have been
issued for the Pledged Shares.
(8) Except as permitted or contemplated under the
Indenture, neither the Companies nor Pledgor has
entered into any agreement pursuant to which it is
obliged to do anything which would cause the foregoing
to be untrue and incorrect, nor has any agreement or
other instrument been entered into or signed by Pledgor
or the Companies pursuant to which it has transferred
or is obliged to transfer any rights attached to the
Pledged Shares or any Additional Shares or pursuant to
which it has granted options, warrants or similar
rights with respect to the Pledged or Additional
Shares.
(9) No resolution or other action has been adopted or
taken by the Companies or its general meeting of
shareholders to amend the articles of association of
the Companies as at the date hereof.
<PAGE>
18
(10) The Companies has no shareholder(s) other than
Pledgor.
(11) At the date hereof Pledgor is not entitled to any
rights to subscribe for shares in the share capital of
the Companies, nor to any dividend rights, options,
warrants, claim rights or similar rights.
(12) The attached copy of the shareholder register of the
Companies, is complete and correct as at the date
hereof.
Section 8 Remedies
8.1 Upon the occurrence of an Event of Default, Pledgee may, but
shall not be obliged to, in addition to any other action
permitted by law (and not limited in any manner to the
remedies contained in the Notes, the Indenture or any other
Secured Instrument), take one or more of the following
actions, in accordance with the terms of and at the times
specified in the Indenture and the Additional Lender
Intercreditor Aqreement, if any, whether or not it shall
have resorted to any other property securing the Secured
Obligations or shall have proceeded against any party liable
for any of the Secured Obligations.
8.2 Upon the occurrence of an Event of Default, Pledgee may, to
the fullest extent permitted by applicable law, (i) without
notice (except as herein set forth), advertisement, hearing
or process of law of any kind, sell any or all of the
Pledged Collateral, at any public or private sale wherever
held, without prejudice to the provisions of Sections 1180,
1181 and 1182 of the Civil Code of the Netherlands Antilles
and (ii) retain and apply the Distributions received
pursuant to Section 5.4 hereof to the Secured Obligations in
accordance
<PAGE>
19
with Section 9 hereof. Pledgor agrees that, to the extent
notice of sale shall be required by law, five (5) days
notice to Pledgor of the time and place of any public sale
or the time after which any private sale or other intended
disposition is to take place shall be commercially
reasonable notification of such matters. No notification
need be given to Pledgor if it has signed, after the
occurrence of an Event of Default, an agreement renouncing
or modifying any right to notification of sale or other
intended disposition. Pledgee shall not be obligated to make
any sale of the Pledged Collateral regardless of notice of
sale having been given. Pledgee may adjourn any public or
private sale from time to time by announcement at the time
and place fixed therefor, and such sale may, without further
notice, be made at the time and place to which it was so
adjourned. In connection with any sale, Pledgee shall have
the right to impose such limitations and restrictions on the
sale of the Pledged Collateral as Pledgee may deem to be
necessary or appropriate to comply with any applicable law
rule or regulation having applicability to the sale,
including, without limitation, restrictions on the number
and qualifications of the offerees and purchasers and
requirements for any necessary governmental approvals, and
the Pledgee shall be authorized at any such sale (if it
seems advisable to do so) to restrict the prospective
offerees and purchasers to persons who will represent and
agree that they are purchasing securities included in the
Pledged Collateral for their own account for investment and
not with a view to the distribution or sale thereof in
violation of applicable securities laws. The Pledgor shall
cooperate with the Pledgee in obtaining any necessary
consents of any competent banking authority and agrees to
cooperate with the Pledgee so that the sale of the Pledged
Collateral does not violate any applicable securities
<PAGE>
20
laws. Without limiting the generality of the foregoing, the
Pledgor will cause the Companies or any other issuer of
Pledged Collateral to (a) register the offer and sale of any
securities constituting the Pledged Collateral under such
securities laws or (b) should Pledgee so request, provide
Pledgee with such available material and financial and other
information which counsel to Pledgee shall require in order
to be able to give an opinion to the effect that the offer
and sale of such Pledged Collateral does not require an
effective registration statement under such securities laws
whichever is requested by the Pledgee. The Pledgor hereby
expressly waives, to the fullest extent permitted by
applicable law, (i) any and all notices (except as herein
set forth), advertisements, hearings or process of law in
connection with the exercise by the Pledgee of any of its
rights and remedies hereunder and (ii) any claims against
Pledgee arising by reason of the fact that the price at
which any Pledged Collateral may have been sold at any
private sale was less than the price which might have been
obtained at a public sale, even if Pledgee accepts the first
offer received and does not offer such Pledged Collateral to
more than one offeree. Pledgee may be the purchaser of any
or all of the Pledged Collateral at any such sale and shall
be entitled, for the purpose of bidding and making
settlement or payment of the purchase price for all or any
portion of the Pledged Collateral sold at such sale, to use
and apply any of the Secured Obligations owed to Pledgee as
a credit on account of the purchase price of any Pledged
Collateral payable by Pledgee at such sale. Each purchaser
at any such sale shall acquire the property sold absolutely
free from any claim or right on the part of Pledgor, and
Pledgor hereby waives, to the fullest extent permitted by
law, all rights of redemption, stay and/or appraisal which
it now has or may at
<PAGE>
21
any time in the future have under any rule of law or statute
now existing or hereafter enacted.
Pledgee shall have the right to the extent permitted by
applicable law, at any time upon the occurrence of an Event
of Default and without notice to Pledgor, to endorse, assign
or otherwise transfer to or to register in the name of the
Pledgee or any of its nominees any or all of the Pledged
Collateral. In addition, Pledgee shall have the right at any
time to exchange certificates representing or evidencing
Pledged Collateral for certificates of smaller or larger
denominations.
Section 9 Application of Proceeds
The proceeds received by Pledgee in respect of any sale of,
collection from or other realization upon all or any part of the
Pledged Collateral pursuant to the exercise by Pledgee of its
remedies as a secured creditor as provided in Section 8 hereof
shall be applied, together with any other sums then held by
Pledgee pursuant to this Agreement, promptly by Pledgee in the
manner set forth in the Indenture and/or the Additional Lender
Intercreditor Agreement, if any.
Section 10 Reasonable Care
Pledgee shall be deemed to have exercised reasonable care in the
custody and preservation of the Pledged Collateral in its
possession, if any, if such Pledged Collateral is accorded
treatment substantially equivalent to that which Pledgee, in its
individual capacity, accords its own property consisting of
similar instruments or interests, it being understood that
Pledgee shall have any responsibility for (i) ascertaining or
<PAGE>
22
taking action with respect to calls, conversions, exchanges,
maturities, tenders or other matters relating to any Pledged
Collateral, whether or not Pledgee has or is deemed to have
knowledge of such matters, or (ii) taking any necessary steps to
preserve rights against any Person with respect to any Pledged
Collateral.
Section 11 Expenses
Pledgor will immediately upon demand pay to Pledgee the amount of
any and all expenses, including the fees and expenses of its
counsel (including, without limitation, any local or foreign
counsel) and the allocated costs of Pledgee's internal counsel
and the fees and expenses of any experts and agents which Pledgee
may incur in connection with (i) the collection of the Secured
Obligations, (ii) the enforcement and administration of this
Pledge Agreement, (iii) the custody or preservation of, or the
sale of, collection from, or other realization upon, any of the
Pledged Collateral, (iv) the exercise or enforcement of any of
the rights of Pledgee or (v) the failure by Pledgor to perform or
observe any of the provisions hereof. All amounts payable by
Pledgor under this Section 11 shall be due upon immediate demand,
shall bear interest from the date advanced to the date of
repayment thereof at a rate of 2% in excess of the highest rate
payable under the Notes ("the Default Rate"), and shall be part
of the Secured Obligations. Pledgor's obligations under this
Section 11 shall survive the termination of this Agreement and
the discharge of Pledgor's other obligations hereunder.
In addition to any of the other rights and remedies hereunder,
Pledgee shall have the right to institute a proceeding seeking
specific performance in connection with any of the agreements or
obligations herunder.
<PAGE>
23
Section 12 No Waiver; Cumulative Remedies
12.1 No failure on the part of the Pledgee to exercise, no
course of dealing with respect to, and no delay on the part
of the Pledgee in exercising, any right, power or remedy
hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any such right, power or
remedy hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or
remedy. The remedies herein provided are cumulative and are
not exclusive of any other remedies provided by law.
12.2 In the event Pledgee shall have instituted any proceeding
to enforce any right, power or remedy under this Pledge
Agreement by foreclosure, sale, entry or otherwise, and
such proceeding shall have been discontinued or abandoned
for any reason or shall have been determined adversely to
Pledgee, then and in every such case, Pledgor and Pledgee
shall be restored to their respective former positions and
rights hereunder with respect to the Pledged Collateral,
and all rights, remedies and power of Pledgee shall
continue as if no such proceeding had been instituted.
Section 13 No Release
Nothing set forth in this Pledge Agreement shall relieve Pledgor
from the performance of any term, covenant, condition or
agreement on Pledgor's part to be performed or observed under or
in respect of any of the Pledged Collateral or from any liability
to any Person under or in respect of any of the Pledged
Collateral or shall impose any obligation on Pledgee to perform
or observe any such term, covenant, condition or agreement on
<PAGE>
24
Pledgor's part to be so performed or observed shall impose
any liability on Pledgee for any act or omission on the part
of Pledgor relating thereto or for any breach of any
representation or warranty on the part of Pledgor contained
in this Pledge Agreement, or under or in respect of the
Pledged Collateral or made in connection herewith or
therewith.
Section 14 Supplements, Further Assurances
Pledgor agrees that at any time and from time to time (including,
without limitation, in connection with (i) any amendment,
amendment and restatement, supplement or modification of the
Indenture or (ii) any acquisition by Pledgor of Additional
Shares), at the sole cost and expenses of Pledgor, Pledgor shall
promptly execute and deliver all further instruments and
documents, including, without limitation, supplemental or
additional pledge agreements, and take all further actions that
may be necessary or required by any and all existing and future
laws or that Pledgee may from time to time reasonably request, in
order to protect the validity and priority of the Pledge granted
or purported to be granted hereby or to enable Pledgee to
exercise and enforce its rights and remedies hereunder with
respect to any Pledged Collateral.
Section 15 Notices
Unless otherwise provided herein any notice or other
communication herein reguired or permitted to be given shall be
given in the manner and at the address set forth in the
Indenture, or as to any party at such other address as shall be
designated by such party in a written notice to the other party
complying as to delivery with the terms of this Section 15. All
<PAGE>
25
such notices and other communications shall be deemed to have
been given when delivered in person, or received by telecopy or
telex; or one (1) Business Day after delivery to the office of
such overnight courier service; or five (5) Business Days after
deposit in the United States mail, registered or certified, with
postage prepaid and properly addressed; provided, however, that
notice to Pledgee shall not be effective until received by
Pledgee.
Section 16 Continuing Security Interest; Assignment
This Pledge Agreement shall create a continuing security interest
in the Pledged Collateral and shall (i) be binding upon Pledgor,
its successors and assigns, and (ii) inure, together with the
rights and remedies of Pledgee hereunder, to the benefit of
Pledgee and each of their respective successors, transferees and
assigns; no other Persons (including, without limitation, any
other creditor of the Pledgor) shall have any interest herein or
any right or benefit with respect hereto.
Section 17 Severability of Provisions
Any provision of this Pledge Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions
hereof or affecting the validity or enforceability of such
provision in any other jurisdiction.
Section 38 Pledgee
Pledgee has been appointed as trustee hereunder pursuant to the
Indenture and the Additional Lender Intercreditor Agreement, if
<PAGE>
26
any. The actions of Pledgee hereunder are subject to the
provisions of the Indenture and/or the Additional Lender
Intercreditor Agreement, if any. Pledgee shall have the right
hereunder to make demands, to give notice, to exercise or refrain
from exercising any rights, and to take or refrain from taking
action (including, without limitation the release or substitution
of Pledged Collateral), in accordance with this Pledge Agreement,
the Indenture and the Additional Lender Intercreditor Agreement,
if any. Pledgee may resign its position as trustee and a
successor Pledgee may be appointed in the manner provided in the
Indenture and the Additional Lender Intercreditor Agreement, if
any. Upon the acceptance of any appointment as Pledgee by a
successor Pledgee, that successor Pledgee shall thereupon succeed
to and become vested with all the rights, powers, privileges and
duties of the retiring Pledgee under this Pledge Agreement, and
the retiring Pledgee shall thereupon be discharged from its
duties and obligations under this Pledge Agreement. After any
retiring Pledgee's resignation, the provisions of this Pledge
Agreement shall inure to its benefit as to any actions taken or
omitted to be taken by it under this Pledge Agreement while it
was Pledgee.
Section 19 Pledgee may Perform
If the Pledgor shall fail to do any act or things which it has
covenanted to do hereunder, the Pledgee may (but shall not be
obligated to) do the same or cause it to be done or remedy any
such breach, and may expend its funds for such purpose. Any and
all amounts so expended by the Pledgee shall be repayable to it
by the Pledgor immediately upon the Pledgee's demand therefor,
with interest at a per annum rate equal to the Default Rate.
Pledgor's obligations under this Section 19 shall survive the
<PAGE>
27
termination of this Pledge Agreement and the discharge of
Pledgor's obligations under this Pledge Agreement.
Section 20 Pledgee Appointed Attorney-in-Fact
The Pledgor hereby appoints the Pledgee the Pledgor's
attorney-in-fact with an interest, with full power of
substitution, for the purpose of taking such action and executing
agreements, instruments and other documents, in the name of the
Pledgor or otherwise as the Pledgee may deem necessary or
advisable to accomplish the purposes hereof, which appointment is
coupled with an interest and is irrevocable. Pledgee will notify
the Pledgor of such action and provide the Pledgor with copies of
such documents prior to or substantially contemporaneously with
the taking or filing thereof.
Section 21 Termination
This Pledge Agreement and the Pledge created hereby shall
automatically terminate when all Secured Obligations shall have
been fully paid and satisfied in accordance with the provisions
of the Indenture. At that time, the Pledgee shall (without
recourse upon, or any warranty whatsoever by, Pledgee) deliver to
Pledgor all Pledged Collateral and related documents then in the
custody or possession of the Pledgee, if any, all without
recourse upon, or warranty whatsoever by the Pledgee and at the
cost and expense of the Pledgor. The Pledgee, at the cost and
expense of the Pledgor, shall do such further acts and things,
and execute and deliver to the Pledgor such additional releases,
assignments and instruments, as the Pledgor may reasonably
require or reasonably deem advisable to carry into effect the
purpose of this Section 21.
<PAGE>
28
Section 22 Limitation on Interest Payable
It is the intention of the parties to conform strictly to the
usury laws, whether state or federal, that are applicable to the
transaction of which this Pledge Agreement is a part. All
agreements between Pledgor and Pledgee, whether now existing or
hereafter arising and whether oral or written, are hereby
expressly limited so that in no contingency or event whatsoever
shall the amount paid or agreed to be paid by Pledgor for the
use, forbearance or detention of the money to be loaned or
advanced under the Indenture or any related document, or for the
payment or performance of any covenant or obligation contained
herein or in the Indenture, exceed the maximum amount permissible
under applicable usury laws. If under any circumstances
whatsoever fulfillment of any such provision, at the time
performance of such provision shall be due, shall involve
exceeding the limit of validity prescribed by law, then the
obligation to be fulfilled shall be reduced to the limit of such
validity. If under any circumstances Pledgor shall have paid an
amount deemed interest by applicable law, which would exceed the
highest lawful rate, such amount that would be excessive interest
under applicable usury laws shall be applied to the reduction of
the principal amount owing in respect of the Secured Obligations
and not to the payment of interest, or if such excessive interest
exceeds the unpaid balance of principal and any other amounts due
hereunder, the excess shall be refunded to Pledgor by the holders
of the Notes. All sums paid or agreed to be paid for the use,
forbearance or detention of the principal under any extension of
credit or advancement of funds by Marine Midland Bank, as
trustee, shall, to the extent permitted by applicable law, and to
the extent necessary to preclude exceeding the limit of validity
prescribed by law, be amortized, prorated, allocated and spread
from the date of this Pledge Agreement until payment in full of
<PAGE>
29
the Secured Obligations so that the actual rate of interest on
account of such principal amounts is uniform throughout the term
hereof.
Section 23 Headings
Section headings used in this Pledge Agreement are for
convenience of reference only and shall not affect the
construction of this Pledge Agreement.
Section 24 Amendments
No amendment, modification, supplement, termination or waiver of
or to any provision of this Pledge Agreement, nor any consent to
any departure by the Pledgor from any provision of this Pledge
Agreement, shall be effective unless the same shall be in writing
and signed by the Pledgee. Any amendment, modification or
supplement of or to any provision of this Pledge Agreement, any
waiver of any provision of this Pledge Agreement, and any consent
to any departure by the Pledgor from the terms of any provision
of this Pledge Agreement shall be effective only in the specific
instance and for the specific purpose for which made or given. No
notice to or demand upon the Pledgor in any instance hereunder
shall entitle the Pledgor to any other or further notice or
demand in similar or other circumstance.
<PAGE>
30
Section 25 Indemnification
Each and every obligation of the Issuers to indemnify and hold
harmless the Trustee in the Indenture contained in Section 7.07
thereof is incorporated herein mutatis mutandis as an obligation
of Pledgor hereunder to indemnify Pledgee, and Marine Midland
Bank, in its individual capacity, and the officers, directors,
employees, agents and applicants thereof.
Section 26 Governing law; Consent to Jurisdiction
This Pledge Agreement shall be governed by and construed in
accordance with the laws of the Netherlands Antilles. The
competent courts of the Netherlands Antilles in Curacao shall
have non-exclusive jurisdiction.
Section 27 Execution in Counterparts
This Pledge Agreement may be executed in any number of
counterparts, each of which counterparts, when so executed and
delivered, shall be deemed to be an original and all of which
counterparts, taken together, shall constitute one and the same
agreement.
<PAGE>
IN WITNESS WHEREOF, the parties hereto executed or have caused
this Pledge Agreement to be executed by their respective managing
directors or officers thereunto duly authorized, as the case may
be, as of the day and year first above written.
STATIA TERMINALS N.V.,
as pledgor
By: /s/ James G. Cameron
Title: Managing Director
MARINE MIDLAND BANK, in its capacity as trustee,
as pledgee
By: /s/ Eileen M. Hughes
Title: Assistant Vice President
<PAGE>
32
SCHEDULE I
Shares pledged
- --------------------------------------------------------------------------------
Percentage of all
Capital [or other
Description Share Nos./ No. of Equity Interest]
Issuer of Shares Certificate Nos. Par Value shares of Issuer
- ------ ----------- ---------------- --------- ------ -----------------
<PAGE>
SCHEDULE II
STATIA LABORATORY SERVICES N.V.
Acknowledgment
Statia Laboratory Services N.V. (the "Company"), hereby
represented by (two of) its managing director(s), accepts notice
of and acknowledges the pledge created by the attached share
pledge agreement between Statia Terminals Corporation N.V. (the
"Pledgor") and Marine Midland Bank, as trustee (the "Pledgee")
(the "Share Pledge Agreement"), agrees to and acknowledges the
contents of the Share Pledge Agreement, undertakes to register
the pledge of Shares in the shareholder register of the Company,
including the transfer of voting rights to the Pledgee in
accordance with Section 5 and to maintain such registration until
the Pledgee has instructed in writing otherwise, and undertakes
to Pledgee during the existence of the pledge created thereby to
comply with the provisions of the Share Pledge Agreement so long
as the pledge is in effect.
Dated
STATIA LABORATORY SERVICES N.V.
/s/ James G. Cameron /s/ Justin B. Wender
By: James G. Cameron By: Justin B. Wender
Managing Director Managing Director
<PAGE>
SCHEDULE II
STATIA TUGS N.V.
Acknowledgement
STATIA TUGS N.V.(the "Company"), hereby represented by (two of)
its managing director(s) accepts notice of and acknowledges the
pledge created by the attached share pledge agreement between
Statia Terminals Corporation N.V. (the "Pledgor") and Marine
Midland Bank, as trustee (the "Pledgee") (the "Share Pledge
Agreement"), agrees to and acknowledges the contents of the Share
Pledge Agreement, undertakes to register the pledge of Shares in
the shareholder register of the Company, including the transfer
of voting rights to the Pledgee in accordance with Section 5 and
to maintain such registration until the Pledgee has instructed in
writing otherwise, and undertakes to Pledgee during the existence
of the pledge created thereby to comply with the provisions of
the Share Pledge Agreement so long as the pledge is in effect.
Dated
STATIA TUGS N.V.
/s/ James G. Cameron /s/ Justin B. Wender
By: James G. Cameron By: Justin B. Wender
Managing Director Managing Director
<PAGE>
35
SCHEDULE II
STATIA SHIPPING N.V.
Acknowledgement
STATIA SHIPPING N.V. (the "Company"), hereby represented by
(two of) its managing director(s), accepts notice of and
acknowledges the pledge created by the attached share pledge
agreement between Statia Terminals Corporation N.V. (the
"Pledgor") and Marine Midland Bank, as trustee (the "Pledgee")
(the "Share Pledge Agreement"), agrees to and acknowledges the
contents of the Share Pledge Agreement, undertakes to register
the pledge of Shares in the shareholder register of the
Company, including the transfer of voting rights to the
Pledgee in accordance with Section 5 and to maintain such
registration until the Pledgee has instructed in writing
otherwise, and undertakes to Pledgee during the existence of
the pledge created thereby to comply with the provisions of
the Share Pledge Agreement so long as the pledge is in effect.
Dated
STATIA SHIPPING N.V.
By: By:
Managing Director Managing Director
<PAGE>
36
Schedule III
[Form of Pledge Amendment]
To: the Pledgee
This is to inform you that we have acquired or obtained the following Additional
Shares as defined in the Share Pledge Agreement dated November 27, 1996, between
yourselves and ourselves:
Shares pledged
- --------------------------------------------------------------------------------
Percentage of all
Capital [or other
Description Share Nos./ No. of Equity Interest]
Issuer of Shares Certificate Nos. Par Value shares of Issuer
- ------ ----------- ---------------- --------- ------ -----------------
and that these Additional Shares are, and to the extent required, are hereby
made, subject to the Pledge as defined in said Share Pledge Agreement. This
Pledge Amendment forms an integral part of the Share Pledge Agreement.
__________________________________
Pledgor
Date:
<PAGE>
37
Acknowledgement
Statia Laboratory Services N.V./Statia Tugs N.V./Statia Shipping
N.V. ([each] the "Company")/[ ] (the "Issuer") hereby
represented by [two of] its managing director[s], accepts notice
of and acknowledges the pledge created by the attached Pledge
Amendment between Statia Terminals N.V. (the "Pledgor") and
Marine Midland Bank, as trustee (the "Pledgee") pursuant to the
Share Pledge Agreement (as defined therein), agrees to and
acknowledges the contents of the Share Pledge Agreement
(including the Pledge Amendment), undertakes to register the
pledge of Additional Shares in the shareholder register of the
Company/Issuer, including the transfer of voting rights to the
Pledgee in accordance with Section 5 and to maintain such
registration until the Pledgee has instructed in writing
otherwise, and undertakes to Pledgee during the existence of the
pledge created thereby to comply with the provisions of the Share
Pledge Agreement so long as the pledge is in effect.
Dated
LABS/TUGS/SHIPPING/ISSUER
By: By:
Managing Director Managing Director
<PAGE>
SHARE PLEDGE AGREEMENT
SHARE PLEDGE AGREEMENT (the "Pledge Agreement"), dated as of
November 27, 1996, by and between Statia Terminals Corporation
N.V., a company incorporated under the laws of the Netherlands
Antilles having its corporate seat at L.B. Smittplein 3, Curacao,
Netherlands Antilles ("Pledgor") and Marine Midland Bank, a New
York banking corporation and trust company having its registered
office at 140 Broadway, 12th Floor, New York, NY 10005-1180, as
trustee (in such capacity and together with any successors and
assigns in such capacity, "Pledgee") pursuant to the Indenture
(as hereinafter defined) and the Additional Lender Intercreditor
Agreement as defined in the Indenture, if any.
WITNESSETH:
WHEREAS, Statia Terminals International N.V. ("STI"), a
company incorporated under the laws of the Netherlands Antilles,
Statia Terminals Canada Incorporated (together with Terminals
hereafter collectively referred to as the "Issuers"), Pledgor,
certain subsidiaries of Pledgor and Pledgee are contemporaneously
with the execution and delivery of this Pledge Agreement entering
into a certain indenture, dated as of November 27, 1996 (as
amended, restated, supplemented or otherwise modified from time
to time, the "Indenture") pursuant to which the Issuers are
issuing 11 3/4% first mortgage notes due 2003 (the "First
Mortgage Notes"), in the aggregate principal amount of
US$135,000,000;
WHEREAS, it is contemplated that the Issuers may, after the
date hereof, (i) issue exchange notes pursuant to the Indenture
(the "Exchange Notes"; together with the First Mortgage Notes,
the "Notes") and (ii) incur certain additional indebtedness
("Additional Secured Indebtedness") in accordance with the
<PAGE>
2
provisions of Section 4.04 and Section 4.14 of the
Indenture which shall be equally and ratably secured by
the Pledged Collateral (as hereinafter defined);
WHEREAS, the Pledgor is entering into this Pledge Agreement
with Pledgee acting for the benefit of itself, the holders of the
Notes and the holders of Additional Secured Indebtedness
(collectively the "Secured Parties") for the purpose, among other
things, of securing and providing for the payment of all amounts
of principal, premium, if any, interest, costs, charges, fees,
expenses, commissions, reimbursements, indemnities and all other
amounts from time to time due and payable by the Pledgor to the
Secured Parties (whether at stated maturity, by acceleration or
otherwise, including, without limitation, the payments of
interest and other amounts which would accrue and become due but
for the filing of a petition in bankruptcy or the operation of
any stay under any Bankruptcy Law (as defined in the Indenture))
under the Indenture, the Notes, this Pledge Agreement, and any
other instrument governing the obligations of Pledgor with
respect to the Additional Secured Indebtedness (the "Additional
Indebtedness Instrument", together with the Indenture, the Notes,
and this Pledge Agreement collectively the "Secured
Instruments"), as well as the performance and payment of all
other obligations and liabilities, now existing or hereafter
arising whatsoever which are now or at any time hereafter may be
or become due, owing or payable under any of the Secured
Instruments, in any form or currency, to the Secured Parties by
the Pledgor, actually or contingently, solely or jointly and/or
severally with another or others, as principal or surety, or by
virtue of any current or other account in connection with any
advance, loan, credit, instrument, guarantee or indemnity made or
issued to, for or at the request of the Pledgor pursuant to any
Secured Instrument and costs, for the purpose hereof including,
<PAGE>
3
but not limited to, costs of collection of any amount due to the
Secured Parties (collectively, the "Secured Obligations");
WHEREAS, the Indenture is governed by the laws of State of
New York;
WHEREAS, the Pledgor is of the opinion that the execution
and delivery of this Agreement and the performance of its
obligations hereunder is in its corporate interest and does not
prejudice the rights of its creditors;
NOW, THEREFORE, in consideration of the foregoing premises
the Pledgor agrees with the Pledgee as follows:
Section 1 Definitions
Capitalized terms used herein and not defined shall have the
meanings assigned to them in the Indenture.
Section 2 Obligations Owed to Pledgee as Trustee
2.1 In order to ensure that a valid pledge is created pursuant
to this Pledge Agreement, Pledgor hereby agrees and
covenants with Pledgee that it shall (i) pay to Pledgee (as
and when due by the Pledgor in accordance with the
provisions of the applicable Secured Instruments) all
amounts of money due and payable to the holders of the Notes
and to the holders of the Additional Secured Indebtedness
under their respective Secured Instruments, in order to
permit Pledgee to make the payments required under the
applicable Secured Instrument, as and when due, to the
holders of the Notes and to the holders of Additional
Secured Indebtedness, and (ii) perform all of its other
<PAGE>
4
obligations to the holders of the Notes and the holders of
the Additional Secured Indebtedness in accordance with their
respective Secured Instruments. The agreements, covenants
and obligations of Pledgor set forth in the immediately
preceding sentence shall hereinafter be referred to as the
"Debtholder Obligations". It is the intention of the parties
that the Debtholder Obligations shall be identical and
equal, but alternative to the obligations of Pledgor to the
holders of the Notes and to the holders of Additional
Secured Indebtedness under their respective Secured
Instruments.
2.2 The Pledgor and the Pledgee agree and acknowledge that the
Debtholder Obligations are obligations and liabilities of
the Pledgor to the Pledgee, as trustee and paying agent,
separate and independent from and without prejudice to the
liabilities which the Pledgor has or may have to the holders
of the Notes and to the holders of the Additional Secured
Indebtedness, provided that the total amount due and payable
under the Debtholder Obligations shall be decreased to the
extent that the Pledgor shall have paid any amounts to the
Pledgee, which are due, payable and owing to any holder of
the Notes and any holder of Additional Secured Indebtedness
in accordance with their respective Secured Instruments.
2.3 In connection with the performance of the provisions of this
Pledge Agreement, the Pledgee (in its capacity as Trustee)
shall have the duties, and shall be entitled to the
benefits, set forth in the Indenture and/or the Additional
Lender Intercreditor Agreement, if any, all to the extent
permitted by applicable law.
<PAGE>
5
2.4 The relationship of the holders of the Notes, the holders of
Additional Secured Indebtedness and the Pledgee are or will
be, as the case may be, governed by the Indenture and the
applicable Intercreditor Agreements, which are or will be,
as the case may be, governed by and construed in accordance
with the laws of the State of New York.
Section 3 Pledge
3.1 In order to secure and to provide for the payment and
performance when due of all Secured Obligations, Pledgor
hereby grants and, in the case of Pledged Collateral
hereafter acquired or obtained, agrees to grant to Pledgee
for the benefit of the Secured Parties and Pledgee hereby
accepts from the Pledgor a first right of pledge ("eerste
pandrecht")(the "Pledge"), to all of the right, title and
interest of Pledgor in, to and over the following whether
now existing or hereafter acquired (collectively, the
"Pledged Collateral"):
(i) all issued and outstanding common shares (Shares B) of
Statia Terminals N.V. ("Terminals"), a company
incorporated under the laws of the Netherlands
Antilles, all issued and outstanding shares of SABA
TrustCompanies N.V. ("Saba"), a company incorporated
under the laws of the Netherlands Antilles, and all
issued and outstanding shares of Bicen Development
Companies N.V. ("Bicen"), a company incorporated under
the laws of the Netherlands Antilles (together with
Terminals and Saba, hereinafter referred to as the
"Companies"), all as listed in Schedule I hereto (the
"Pledged Shares");
<PAGE>
6
(ii) all additional shares of capital stock of the
Companies from time to time acquired by Pledgor in
any manner (including, without limitation) all stock
dividends, bonus shares, rights of issue, options and
warrants at any time and from time to time received,
receivable or otherwise distributed with respect to
the Pledged Shares and all issued and outstanding
shares of capital stock or other equity interests of
each other Netherlands Antilles Person which, after
the date hereof, is or becomes, as a result of any
occurrence, a Restricted Subsidiary of Pledgor
(collectively the "Additional Shares");
(iii) dividends, cash, distributions from retained
earnings, returns of paid up nominal share capital,
return of paid in capital surplus income, profits and
other property, interests or proceeds at any time and
from time to time received, receivable or otherwise
distributed with respect to the Pledged Shares and
Additional Shares (the "Distributions");
(iv) all interest of Pledgor in the entries on the
books of any financial intermediary pertaining to the
Pledged Collateral; and
(v) (a) any and all proceeds of any insurance (except
payments made to a Person which is not a party to
this Pledge Agreement), indemnity, warranty or
guarantee payable to Pledgee or to Pledgor from time
to time with respect to any of the Pledged Collateral,
(b) payments (in any form whatsoever)
<PAGE>
7
made or due and payable to Pledgor from time to time
in connection with any requisition, confiscation,
condemnation, seizure or forfeiture of all or any part
of the Pledged Collateral by any governmental
authority (or any Person acting under color of
governmental authority), (c) instruments representing
obligations to pay amounts in respect of Pledged
Shares, (d) products of the Pledged Collateral, and
(e) other amounts from time to time paid or payable
under or in connection with any of the Pledged
Collateral.
Section 4 Notification; Delivery of Pledged Collateral
4.1 The Pledge granted hereunder has been notified to and
acknowledged by the Companies as set forth in Schedule II.
Upon acquisition by Pledgor of any and all Additional
Shares, Pledgor shall cause the Pledge granted hereunder to
be notified to and acknowledged by the Companies or the
issuer of such Additional Shares, as the case may be, and
with due observance to the provisions of this section 4.
4.2 Immediately upon this Pledge Agreement becoming effective
with respect to the Pledged Shares and promptly upon each
receipt or acquisition thereof with respect to Additional
Shares, the Pledgor will deliver or cause to be delivered to
the Pledgee a duly authenticated extract from the register
of shareholders of the Companies and any issuer of
Additional Shares evidencing the entry in such register of
the Pledge granted hereunder, and if in respect of any one
or more of the Pledged Shares or Additional Shares, as the
case may be, share certificates have been issued, the
Pledgor shall in addition deliver to the Pledgee the
<PAGE>
8
originals of such share certificates, duly endorsed to
evidence the Pledge granted hereunder. All Pledged Shares
and Additional Shares shall be in suitable form for transfer
by delivery or shall be accompanied by duly executed
instruments of transfer or assignment in blank, all in form
and substance necessary or appropriate to complete the
Pledge and give the Pledgee the right to transfer the
Pledged Shares and Additional Shares under the terms hereof.
4.3 Pledgor shall, upon obtaining any Additional Shares of any
Person, promptly (and in any event within five Business
Days) deliver to Pledgee a pledge amendment, duly executed
by Pledgor, in substantially the form of Schedule III hereto
(each, a "Pledge Amendment"), in respect of the additional
Pledged Shares which are to be pledged pursuant to this
Pledge Agreement, and an acknowledgement of such Pledge
Amendment by the Companies or the issuer of such Additional
Shares, as the case may be, confirming the Pledge hereby
created on and in respect of such Additional Shares. Pledgor
hereby authorizes Pledgee to attach each Pledge Amendment to
this Pledge Agreement and agrees that all Additional Shares
listed on any Pledge Amendment delivered to Pledgee shall
for all purposes hereunder be considered Pledged Collateral
from and after the date of such Pledge Amendment.
4.4 Pledgor shall further promptly (and in any event within
five Business Days) upon obtaining any Additional Shares,
deliver to Pledgee written notice that Pledgor is delivering
all documents evidencing or representing the Pledged
Collateral, if any, to the Pledgee, at its offices or in
deposit with another institution at such place or
<PAGE>
9
places as the Pledgee may from time to time elect, and all
such documents shall be held subject to the terms, covenants
and conditions herein set forth. Neither the Pledgee nor any
director, officer or employee of the Pledgee, shall be
liable for any action taken or omitted to be taken by it or
them relative to any of such documents except for its or
their own gross negligence, willful misconduct, or bad faith
and the Pledgee shall not be liable for any action or
omission to act on the part of any agent appointed and
selected by the Pledgee with reasonable care to act with
respect to such documents (or any part thereof).
Section 5 Voting Rights; Distributions
5.1 Pledgee shall have the voting rights and other consensual
rights and powers pertaining to the Pledged Collateral or
any part thereof, except that Pledgee hereby authorizes, and
grants power of attorney to the Pledgor to, so long as no
Event of Default shall have occurred and be continuing,
exercise any and all of such voting and/or consensual rights
and powers relating or pertaining to the Pledged Collateral
or any part thereof, for any purpose not inconsistent with
the terms or purpose of this Pledge Agreement, the Indenture
and the applicable Secured Instrument, provided, however,
that the Pledgor shall not (i) exercise such rights which
may have an adverse effect on the value of the Pledged
Collateral or the pledge granted by this Pledge Agreement
and (ii) without the prior written approval of the Pledgee,
vote in respect of any one or more of the Pledged Shares or
Additional Shares in favor of a proposal (x) to amend the
Articles of Association of the Companies or any other issues
of Additional Shares or
<PAGE>
10
(y) to dissolve and liquidate the Companies or any other
issuer of Additional Shares or (z) to issue any shares in
addition to or in substitution for the Pledged Shares or any
Additional Shares or to re-issue shares that have been
repurchased, except in accordance with the provisions of
section 6.2 hereof.
5.2 So long as no Event of Default shall have occurred and
subject to and in accordance with the provisions of the
Indenture, the Pledgor shall be entitled to receive, retain
and utilize the Distributions, free from the Pledge hereby
created; provided, however, that (i) such Distributions are
made in accordance with the provisions of this Pledge
Agreement and the Indenture and (ii) any and all such
Distributions consisting of rights or interests in the form
of securities shall be, and shall be forthwith delivered to
Pledgee to hold as Pledged Collateral and shall, if received
by Pledgor, be received for the benefit of Pledgee, be
segregated from the other property or funds of Pledgor, and
be forthwith delivered to Pledgee as Pledged Collateral in
the same form as so received (with any necessary or
appropriate endorsement).
5.3 Upon the occurrence and during the continuance of an Event
of Default, all rights of the Pledgor to exercise the voting
and/or consensual rights and powers which it is entitled to
exercise pursuant to Section 5.1 shall cease, and all such
rights shall thereupon be exercised by the Pledgee in
accordance with Section 5.5, which shall have the sole and
exclusive right and authority to exercise the voting and/or
consensual rights and powers relating or pertaining to the
Pledged Collateral or any part thereof.
<PAGE>
11
5.4 Upon or at any time after the occurrence of an Event of
Default, the Pledgor's rights to receive Distributions in
accordance with Section 5.2, shall automatically cease and
the Pledgee shall be entitled to, and shall have the right
to collect, any and all Distributions, provided that the
Pledgee shall at its option apply any and all cash amounts
so collected to satisfy the Secured Obligations, to the
fullest extent permitted by Netherlands Antilles law or hold
such Distributions as Pledged Collateral. Any Distributions
in the form of non-cash assets shall be received subject to
the Pledge hereby created to the fullest extent permitted by
or possible under Netherlands Antilles law or any other law
governing such assets or the creation of an encumbrance
thereover. Without limiting the generality of the
immediately preceding sentence, Pledgor shall, at its sole
cost and expense, from time to time execute and deliver to
Pledgee any and all documents necessary or appropriate to
confirm and protect the Pledge granted or purported to be
granted in the Distributions as contemplated in this Section
5.4 and to enable Pledgee to exercise and enforce its rights
and remedies with respect thereto.
5.5 Pledgee shall have no responsibility to the Pledgor or any
other Person for its exercise or failure to exercise such
voting or consensual rights and powers.
5.6 A notice from the Pledgee to the Companies or other issuer
of Additional Shares with a copy to the Pledgor stating that
an Event of Default has occurred shall be sufficient for the
Companies or other issuer of Additional Shares to accept the
Pledgee as being exclusively entitled to (i) the voting
and/or consensual rights and powers which it is
<PAGE>
12
entitled to exercise pursuant to Section 5.1 and (ii)
receive and collect the Distributions. The Pledgee shall
remain entitled to exercise such powers and rights and
receive such Distributions and the Companies or other issuer
of Additional Shares shall accept the Pledgee as being
exclusively entitled to such powers and rights and receive
such Distributions until the earlier of (i) a notice of
termination of the Event of Default from the Pledgee to the
Companies or other issuer of Additional Shares or (ii) a
decision by a competent court that no Event of Default
exists.
Notwithstanding the provisions of this Section 5.6, Pledgor
shall (at its sole cost and expense) from time to time
execute and deliver to Pledgee appropriate instruments as
Pledgee may reasonably request in order to permit Pledgee to
exercise its voting and consensual and other rights which it
may be entitled to exercise and to receive all Distributions
which it may be entitled to receive under this Section 5.
Section 6 Transfers and Other Liens
6.1 Pledgor shall not (i) sell, pledge, convey, assign or
otherwise dispose of, or grant any option, right or warrant
with respect to, any of the Pledged Collateral except as
permitted by the Indenture, (ii) create or permit to exist
any Lien upon or with respect to any Pledged Collateral
other than the Pledge granted to Pledgee under this Pledge
Agreement, or (iii) permit the Companies or any other issuer
of Additional Shares to merge, consolidate or change its
legal form, unless all of the outstanding capital stock or
partnership interests of the surviving or resulting
<PAGE>
13
corporation or partnership as the case may be is, upon such
merger or consolidation, pledged hereunder and no cash,
securities or other property is distributed in respect of
outstanding shares or partnership interests of any other
constituent corporation or partnership.
6.2 Pledgor shall (i) cause each issuer of the Pledged
Collateral not to issue any shares in its capital stock or
other securities in addition to or in substitution for the
Pledged Shares and Additional Shares issued by such issuer,
except to Pledgor and (ii) pledge hereunder, immediately
upon its acquisition (directly or indirectly) thereof, any
and all additional shares of capital stock or other equity
securities of the issuer of the Pledged Collateral which are
required to be pledged hereunder.
Section 7 Representations, Warranties and Covenants
7.1 The Pledgor represents, warrants and covenants to the
Pledgee as follows:
(a) Enforceability; No Filings
This Pledge Agreement has been duly executed and delivered
by the Pledgor and constitutes the valid and legally binding
obligation of the Pledgor, enforceable against the Pledgor
in accordance with its terms. This Pledge Agreement creates
a valid first priority pledge ("eerste pandrecht") on the
Pledged Collateral. No filings, registrations or recordings
are necessary or appropriate to create, preserve and protect
the Pledge granted by Pledgor to Pledgee pursuant to this
Pledge Agreement, other than the registration of the Pledge
in the register of shareholders
<PAGE>
14
of the Companies or of the issuer of Additional Shares
pursuant to Section 4.2 hereof.
(b) Authority; No Conflict
Pledgor has the requisite corporate power, authority and
legal right to pledge and grant the Pledge hereunder in all
the Pledged Collateral and there is no law, regulation,
provision having the force of law on the Pledgor, judicial
order, security right, contract, agreement or other
instrument binding on the Pledgor or affecting the Pledgor's
properties, or any impediment or disability which would
conflict with or in any way prevent the execution, delivery
or performance by the Pledgor or the enforcement against the
Pledgor of this Pledge Aqreement.
(c) No Consents
All authorizations, approvals, consents, permissions of, or
other action by or notice or filings with, any governmental
authorities (including exchange controls) or any other
Persons which are required to be obtained, taken, or made
(i) in connection with the execution and delivery by the
Pledgor of this Pledge Agreement and the performance by the
Pledgor of the Secured Obligations or (ii) for the exercise
by Pledgee of its rights and remedies hereunder have been
duly obtained, taken, or made and are in full force and
effect.
(d) No Lien
The Pledgor holds and, in the case of Pledged Collateral
acquired or obtained hereafter to the extent applicable,
shall at all times hold title to the Pledged Collateral
subject to no Lien other than the Pledge created hereby.
Pledgor is, and at the time of delivery of the Pledged
<PAGE>
15
Collateral to Pledgee in accordance with Sections 4 and 14
of this Pledge Agreement will be, the sole legal and
beneficial owner of the Pledged Collateral. All Pledged
Collateral is on the date hereof, and, in the case of
Pledged Collateral acquired or obtained hereafter, will be,
so owned by Pledgor free and clear of any Lien except for
the Lien granted to Pledgee pursuant to this Agreement.
(e) Due Authorization and Issuance
All of the Pledged Shares have been and the Additional
Shares will be duly authorized and validly issued and fully
paid and nonassessable.
(f) Principal Place of Business
Pledgor's principal place of business is located at
____________________________________. Pledgor shall not move
its principal place of business except to such new location
as Pledgor may establish in accordance with the last
sentence of this subsection. Pledgor shall not establish a
new location for its chief executive office nor shall it
change its name until (i) it shall have given Pledgee not
less than forty-five (45) days prior written notice of its
intention so to do, clearly describing such new location or
name and providing such other information in connection
therewith as Pledgee may request, and (ii) with respect to
such new location or name, Pledgor shall have taken all
action necessary or required by any and all existing or
future laws, or as Pledgee shall from time to time
reasonably request, to maintain the validity and priority of
the Pledge granted hereby.
(g) Pledged Collateral
<PAGE>
16
Schedule I sets forth an accurate and complete description
of all of the outstanding capital stock of each Restricted
Subsidiary of the Issuers owned by Pledgor as of the date
hereof and all information set forth herein and on such
Schedule relating to the Pledged Collateral is accurate and
complete in all respects.
(h) No Options, Warrants etc.
There are no options, warrants, calls, rights, commitments
or agreements of any character to which Pledgor is a party
or by which it is bound obligating Pledgor to issue, deliver
or sell or cause to be issued, delivered or sold, additional
Pledged Shares or obligating Pledgor to grant, extend or
enter into any such option, warrant, call, right, commitment
or agreement. There are no voting trusts or other agreements
or understandings to which Pledgor is a party with respect
to the voting of the capital stock of any issuer of the
Pledged Shares.
(i) General
To the extent not represented and warranted above:
(1) Pledgor has the full legal capacity ("is volledig
beschikkingsbevoegd") to pledge the Pledged Collateral
in favor of Pledgee.
(2) Pledgor has not created in advance ("bij voorbeat") a
pledge which is still in existence on any of the
Pledged Collateral in favor of any party, under the
laws of the Netherlands Antilles or under the laws of
any other jurisdiction.
(3) Pledgor has not created in advance ("bij voorbaat") any
other security interest, regardless its form,
<PAGE>
17
which is still in existence, in the Pledged Collateral
under the laws of the Netherlands Antilles or under the
laws of any other jurisdiction.
(4) No right or charge, including but not limited to any
"limited right" ("beperkt recht") exists on or with
respect to the Assets, except for the rights
("rechten") of Pledgor.
(5) The Pledged Collateral have not been attached ("vrij
van beslag").
(6) Pledgor has not been dissolved and the Companies
have not been dissolved and no resolution to dissolve
Pledgor or the Companies has been adopted by its
general meeting of shareholders.
(7) No depositary receipts ("certificaten" have been
issued for the Pledged Shares.
(8) Except as permitted or contemplated under the
Indenture, neither the Companies nor Pledgor has
entered into any agreement pursuant to which it is
obliged to do anything which would cause the foregoing
to be untrue and incorrect, nor has any agreement or
other instrument been entered into or signed by Pledgor
or the Companies pursuant to which it has transferred
or is obliged to transfer any rights attached to the
Pledged Shares or any Additional Shares or pursuant to
which it has granted options, warrants or similar
rights with respect to the Pledged or Additional
Shares.
(9) No resolution or other action has been adopted or
taken by the Companies or its general meeting of
shareholders to amend the articles of association of
the Companies as at the date hereof.
<PAGE>
18
(10) The Companies (other than the holder of Shares
A in the share capital of Terminals) have no
shareholder(s) other than Pledgor.
(11) At the date hereof Pledgor is not entitled to any
rights to subscribe for shares in the share capital of
the Companies, nor to any dividend rights, options,
warrants, claim rights or similar rights.
(12) The attached copy of the shareholder register of the
Companies, is complete and correct as at the date
hereof.
Section 8 Remedies
8.1 Upon the occurrence of an Event of Default, Pledgee may, but
shall not be obliged to, in addition to any other action
permitted by law (and not limited in any manner to the
remedies contained in the Notes, the Indenture or any other
Secured Instrument), take one or more of the following
actions, in accordance with the terms of and at the times
specified in the Indenture and the Additional Lender
Intercreditor Agreement, if any, whether or not it shall
have resorted to any other property securing the Secured
Obligations or shall have proceeded against any party liable
for any of the Secured Obligations.
8.2 Upon the occurrence of an Event of Default, Pledgee may, to
the fullest extent permitted by applicable law, (i) without
notice (except as herein set forth), advertisement, hearing
or process of law of any kind, sell any or all of the
Pledged Collateral, at any public or private sale wherever
held, without prejudice to the provisions of Sections 1180,
1181 and 1182 of the Civil Code of the Netherlands Antilles
and (ii) retain and apply the Distributions received
pursuant to
<PAGE>
19
with Section 9 hereof. Pledgor agrees that, to the extent
notice of sale shall be required by law, five (5) days
notice to Pledgor of the time and place of any public sale
or the time after which any private sale or other intended
disposition is to take place shall be commercially
reasonable notification of such matters. No notification
need be given to Pledgor if it has signed, after the
occurrence of an Event of Default, an agreement renouncing
or modifying any right to notification of sale or other
intended disposition. Pledgee shall not be obligated to make
any sale of the Pledged Collateral regardless of notice of
sale having been given. Pledgee may adjourn any public or
private sale from time to time by announcement at the time
and place fixed therefor, and such sale may, without further
notice, be made at the time and place to which it was so
adjourned. In connection with any sale, Pledgee shall have
the right to impose such limitations and restrictions on the
sale of the Pledged Collateral as Pledgee may deem to be
necessary or appropriate to comply with any applicable law
rule or regulation having applicability to the sale,
including, without limitation, restrictions on the number
and qualifications of the offerees and purchasers and
requirements for any necessary governmental approvals, and
the Pledgee shall be authorized at any such sale (if it
seems advisable to do so) to restrict the prospective
offerees and purchasers to persons who will represent and
agree that they are purchasing securities included in the
Pledged Collateral for their own account for investment and
not with a view to the distribution or sale thereof in
violation of applicable securities laws. The Pledgor shall
cooperate with the Pledgee in obtaining any necessary
consents of any competent banking authority and agrees to
cooperate with the Pledgee so that the sale of the Pledged
Collateral does not violate any applicable securities
<PAGE>
20
laws. Without limiting the generality of the foregoing, the
Pledgor will cause the Companies or any other issuer of
Pledged Collateral to (a) register the offer and sale of any
securities constituting the Pledged Collateral under such
securities laws or (b) should Pledgee so request, provide
Pledgee with such available material and financial and other
information which counsel to Pledgee shall require in order
to be able to give an opinion to the effect that the offer
and sale of such Pledged Collateral does not require an
effective registration statement under such securities laws
whichever is requested by the Pledgee. The Pledgor hereby
expressly waives, to the fullest extent permitted by
applicable law, (i) any and all notices (except as herein
set forth), advertisements, hearings or process of law in
connection with the exercise by the Pledgee of any of its
rights and remedies hereunder and (ii) any claims against
Pledgee arising by reason of the fact that the price at
which any Pledged Collateral may have been sold at any
private sale was less than the price which might have been
obtained at a public sale, even if Pledgee accepts the first
offer received and does not offer such Pledged Collateral to
more than one offeree. Pledgee may be the purchaser of any
or all of the Pledged Collateral at any such sale and shall
be entitled, for the purpose of bidding and making
settlement or payment of the purchase price for all or any
portion of the Pledged Collateral sold at such sale, to use
and apply any of the Secured Obligations owed to Pledgee as
a credit on account of the purchase price of any Pledged
Collateral payable by Pledgee at such sale. Each purchaser
at any such sale shall acquire the property sold absolutely
free from any claim or right on the part of Pledgor, and
Pledgor hereby waives, to the fullest extent permitted by
law, all rights of redemption, stay and/or appraisal which
it now has or may at
<PAGE>
21
any time in the future have under any rule of law or statute
now existing or hereafter enacted.
Pledgee shall have the right, at any time upon the
occurrence of an Event of Default and without notice to
Pledgor, to endorse, assign or otherwise transfer to or to
register in the name of the Pledgee or any of its nominees
any or all of the Pledged Collateral. In addition, Pledgee
shall have the right at any time to exchange certificates
representing or evidencing Pledged Collateral for
certificates of smaller or larger denominations.
Section 9 Application of Proceeds
The proceeds received by Pledgee in respect of any sale of,
collection from or other realization upon all or any part of the
Pledged Collateral pursuant to the exercise by Pledgee of its
remedies as a secured creditor as provided in Section 8 hereof
shall be applied, together with any other sums then held by
Pledgee pursuant to this Agreement, promptly by Pledgee in the
manner set forth in the Indenture and/or the Additional Lender
Intercreditor Agreement, if any.
Section 10 Reasonable Care
Pledgee shall be deemed to have exercised reasonable care in the
custody and preservation of the Pledged Collateral in its
possession, if any, if such Pledged Collateral is accorded
treatment substantially equivalent to that which Pledgee, in its
individual capacity, accords its own property consisting of
similar instruments or interests, it being understood that
Pledgee shall have any responsibility for (i) ascertaining or
taking action with respect to calls, conversions, exchanges,
<PAGE>
22
maturities, tenders or other matters relating to any Pledged
Collateral, whether or not Pledgee has or is deemed to have
knowledge of such matters, or (ii) taking any necessary steps to
preserve rights against any Person with respect to any Pledged
Collateral.
Section 11 Expenses
Pledgor will immediately upon demand pay to Pledgee the amount of
any and all expenses, including the fees and expenses of its
counsel (including, without limitation, any local or foreign
counsel) and the allocated costs of Pledgee's internal counsel
and the fees and expenses of any experts and agents which Pledgee
may incur in connection with (i) the collection of the Secured
Obligations, (ii) the enforcement and administration of this
Pledge Agreement, (iii) the custody or preservation of, or the
sale of, collection from, or other realization upon, any of the
Pledged Collateral, (iv) the exercise or enforcement of any of
the rights of Pledgee or (v) the failure by Pledgor to perform or
observe any of the provisions hereof. All amounts payable by
Pledgor under this Section 11 shall be due upon immediate demand,
shall bear interest from the date advanced to the date of
repayment thereof at a rate of 2% in excess of the highest rate
payable uncle the Notes ("Default Rate"), and shall be part of the
Secured Obligations. Pledgor's obligations under this Section 11
shall survive the termination of this Agreement and the discharge
of Pledgor's other obligations hereunder.
In addition to any of the other rights and remedies hereunder,
Pledgee shall have the right to institute a proceeding seeking
specific performance in connection with any of the agreements or
obligations herunder.
<PAGE>
23
Section 12 No Waiver; Cumulative Remedies
12.1 No failure on the part of the Pledgee to exercise, no
course of dealing with respect to, and no delay on the part
of the Pledgee in exercising, any right, power or remedy
hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any such right, power or
remedy hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or
remedy. The remedies herein provided are cumulative and are
not exclusive of any other remedies provided by law.
12.2 In the event Pledgee shall have instituted any proceeding
to enforce any right, power or remedy under this Pledge
Agreement by foreclosure, sale, entry or otherwise, and
such proceeding shall have been discontinued or abandoned
for any reason or shall have been determined adversely to
Pledgee, then and in every such case, Pledgor and Pledgee
shall be restored to their respective former positions and
rights hereunder with respect to the Pledged Collateral,
and all rights, remedies and power of Pledgee shall
continue as if no such proceeding had been instituted.
Section 13 No Release
Nothing set forth in this Pledge Agreement shall relieve Pledgor
from the performance of any term, covenant, condition or
agreement on Pledgor's part to be performed or observed under or
in respect of any of the Pledged Collateral or from any liability
to any Person under or in respect of any of the Pledged
Collateral or shall impose any obligation on Pledgee to perform
or observe any such term, covenant, condition or agreement on
Pledgor's part to be so performed or observed shall impose any
<PAGE>
24
liability on Pledgee for any act or omission on the part of
Pledgor relating thereto or for any breach of any representation
or warranty on the part of Pledgor contained in this Pledge
Agreement, or under or in respect of the Pledged Collateral or
made in connection herewith or therewith.
Section 14 Supplements, Further Assurances
Pledgor agrees that at any time and from time to time (including,
without limitation, in connection with (i) any amendment,
amendment and restatement, supplement or modification of the
Indenture or (ii) any acquisition by Pledgor of Additional
Shares), at the sole cost and expenses of Pledgor, Pledgor shall
promptly execute and deliver all further instruments and
documents, including, without limitation, supplemental or
additional pledge agreements, and take all further actions that
may be necessary or required by any and all existing and future
laws or that Pledgee may from time to time reasonably request,
in order to protect the validity and priority of the Pledge
granted or purported to be granted hereby or to enable Pledgee to
exercise and enforce its rights and remedies hereunder with
respect to any Pledged Collateral.
Section 15 Notices
Unless otherwise provided herein any notice or other
communication herein required or permitted to be given shall be
given in the manner and at the address set forth in the
Indenture, or as to any party at such other address as shall be
designated by such party in a written notice to the other party
complying as to delivery with the terms of this Section 15. All
such notices and other communications shall be deemed to have
<PAGE>
25
been given when delivered in person, or received by telecopy or
telex; or one (1) Business Day after delivery to the office of
such overnight courier service; or five (5) Business Days after
deposit in the United States mail, registered or certified, with
postage prepaid and properly addressed; provided, however, that
notice to Pledgee shall not be effective until received by
Pledgee.
Section 16 Continuing Security Interest; Assignment
This Pledge Agreement shall create a continuing security interest
in the Pledged Collateral and shall (i) be binding upon Pledgor,
its successors and assigns, and (ii) inure, together with the
rights and remedies of Pledgee hereunder, to the benefit of
Pledgee and each of their respective successors, transferees and
assigns; no other Persons (including, without limitation, any
other creditor of the Pledgor) shall have any interest herein or
any right or benefit with respect hereto.
Section 17 Severability of Provisions
Any provision of this Pledge Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions
hereof or affecting the validity or enforceability of such
provision in any other jurisdiction.
Section 18 Pledgee
Pledgee has been appointed as trustee hereunder pursuant to the
Indenture and the Additional Lender Intercreditor Agreement, if
any. The actions of Pledgee hereunder are subject to the
<PAGE>
26
provisions of the Indenture and/or the Additional Lender
Intercreditor Agreement, if any. Pledgee shall have the right
hereunder to make demands, to give notice, to exercise or refrain
from exercising any rights, and to take or refrain from taking
action (including, without limitation the release or substitution
of Pledged Collateral), in accordance with this Pledge Agreement,
the Indenture and the Additional Lender Intercreditor Agreement,
if any. Pledgee may resign its position as trustee and a
successor Pledgee may be appointed in the manner provided in the
Indenture and the Additional Lender Intercreditor Agreement, if
any. Upon the acceptance of any appointment as Pledgee by a
successor Pledgee, that successor Pledgee shall thereupon succeed
to and become vested with all the rights, powers, privileges and
duties of the retiring Pledgee under this Pledge Agreement, and
the retiring Pledgee shall thereupon be discharged from its
duties and obligations under this Pledge Agreement. After any
retiring Pledgee's resignation, the provisions of this Pledge
Agreement shall inure to its benefit as to any actions taken or
omitted to be taken by it under this Pledge Agreement while it
was Pledgee.
Section 19 Pledgee may Perform
If the Pledgor shall fail to do any act or things which it has
covenanted to do hereunder, the Pledgee may (but shall not be
obligated to) do the same or cause it to be done or remedy any
such breach, and may expend its funds for such purpose. Any and
all amounts so expended by the Pledgee shall be repayable to it
by the Pledgor immediately upon the Pledgee's demand therefor,
with interest at a per annum rate equal to the Default Rate.
Pledgor's obligations under this Section 19 shall survive the
termination of this Pledge Agreement and the discharge of
Pledgor's obligations under this Pledge Agreement.
<PAGE>
27
Section 20 Pledgee Appointed Attorney-in-Fact
The Pledgor hereby appoints the Pledgee the Pledgor's attorney-
in-fact with an interest, with full power of substitution, for
the purpose of taking such action and executing agreements,
instruments and other documents, in the name of the Pledgor or
otherwise as the Pledgee may deem necessary or advisable to
accomplish the purposes hereof, which appointment is coupled with
an interest and is irrevocable. Pledgee will notify the Pledgor
of such action and provide the Pledgor with copies of such
documents prior to or substantially contemporaneously with the
taking or filing thereof.
Section 21 Termination
This Pledge Agreement and the Pledge created hereby shall
automatically terminate when all Secured Obligations shall have
been fully paid and satisfied in accordance with the provisions
of the Indenture. At that time, the Pledgee shall (without
recourse upon, or any warranty whatsoever by, Pledgee) deliver to
Pledgor all Pledged Collateral and related documents then in the
custody or possession of the Pledgee, if any, all without
recourse upon, or warranty whatsoever by the Pledgee and at the
cost and expense of the Pledgor. The Pledgee, at the cost and
expense of the Pledgor, shall do such further acts and things,
and execute and deliver to the Pledgor such additional releases,
assignments and instruments, as the Pledgor may reasonably
require or reasonably deem advisable to carry into effect the
purpose of this Section 21.
Section 22 Limitation on Interest Payable
<PAGE>
28
It is the intention of the parties to conform strictly to the
usury laws, whether state or federal, that are applicable to the
transaction of which this Pledge Agreement is a part. All
agreements between Pledgor and Pledgee, whether now existing or
hereafter arising and whether oral or written, are hereby
expressly limited so that in no contingency or event whatsoever
shall the amount paid or agreed to be paid by Pledgor for the
use, forbearance or detention of the money to be loaned or
advanced under the Indenture or any related document, or for the
payment or performance of any covenant or obligation contained
herein or in the Indenture, exceed the maximum amount permissible
under applicable usury laws. If under any circumstances
whatsoever fulfillment of any such provision, at the time
performance of such provision shall be due, shall involve
exceeding the limit of validity prescribed by law, then the
obligation to be fulfilled shall be reduced to the limit of such
validity. If under any circumstances Pledgor shall have paid an
amount deemed interest by applicable law, which would exceed the
highest lawful rate, such amount that would be excessive interest
under applicable usury laws shall be applied to the reduction of
the principal amount owing in respect of the Secured Obligations
and not to the payment of interest, or if such excessive interest
exceeds the unpaid balance of principal and any other amounts due
hereunder, the excess shall be refunded to Pledgor by the holders
of the Notes. All sums paid or agreed to be paid for the use,
forbearance or detention of the principal under any extension of
credit or advancement of funds by Marine Midland Bank, as
trustee, shall, to the extent permitted by applicable law, and to
the extent necessary to preclude exceeding the limit of validity
prescribed by law, be amortized, prorated, allocated and spread
from the date of this Pledge Agreement until payment in full of
the Secured Obligations so that the actual rate of interest on
<PAGE>
29
account of such principal amounts is uniform throughout the term
hereof.
Section 23 Headings
Section headings used in this Pledge Agreement are for
convenience of reference only and shall not affect the
construction of this Pledge Agreement.
Section 24 Amendments
No amendment, modification, supplement, termination or waiver of
or to any provision of this Pledge Agreement, nor any consent to
any departure by the Pledgor from any provision of this Pledge
Agreement, shall be effective unless the same shall be in writing
and signed by the Pledgee. Any amendment, modification or
supplement of or to any provision of this Pledge Agreement, any
waiver of any provision of this Pledge Agreement, and any consent
to any departure by the Pledgor from the terms of any provision
of this Pledge Agreement shall be effective only in the specific
instance and for the specific purpose for which made or given. No
notice to or demand upon the Pledgor in any instance hereunder
shall entitle the Pledgor to any other or further notice or
demand in similar or other circumstance.
<PAGE>
30
Section 25 Indemnification
Each and every obligation of the Issuers to indemnify and hold
harmless the Trustee in the Indenture contained in Section 7.07
thereof is incorporated herein mutatis mutandis as an obligation
of Pledgor hereunder to indemnify Pledgee, and Marine Midland
Bank, in its individual capacity, and the officers, directors,
employees, agents and applicants thereof.
Section 26 Governing law; Consent to Jurisdiction
This Pledge Agreement shall be governed by and construed in
accordance with the laws of the Netherlands Antilles. The
competent courts of the Netherlands Antilles in Curacao shall
have non-exclusive jurisdiction.
Section 27 Execution in Counterparts
This Pledge Agreement may be executed in any number of
counterparts, each of which counterparts, when so executed and
delivered, shall be deemed to be an original and all of which
counterparts, taken together, shall constitute one and the same
agreement.
<PAGE>
IN WITNESS WHEREOF, the parties hereto executed or have caused
this Pledge Agreement to be executed by their respective managing
directors or officers thereunto duly authorized, as the case may
be, as of the day and year first above written.
STATIA TERMINALS CORPORATION N.V.,
as pledgor
By: /s/ David B. Pittaway
Title: Managing Director
MARINE MIDLAND BANK, in its capacity as trustee,
as pledgee
By: /s/ Eileen M. Hughes
Title: Assistant Vice President
<PAGE>
32
SCHEDULE I
Shares pledged
- --------------------------------------------------------------------------------
Percentage of all
Capital [or other
Description Share Nos./ No. of Equity Interest]
Issuer of Shares Certificate Nos. Par Value shares of Issuer
- ------ ----------- ---------------- --------- ------ -----------------
<PAGE>
SCHEDULE II
STATIA TERMINALS N.V.
Acknowledgement
Statia Terminals N.V. (the "Company"), hereby represented by (two
of) its managing director(s), accepts notice of and acknowledges
the pledge created by the attached share pledge agreement between
Statia Terminals Corporation N.V. (the "Pledgor") and Marine
Midland Bank, as trustee (the "Pledgee") (the "Share Pledge
Agreement"), agrees to and acknowledges the contents of the Share
Pledge Agreement, undertakes to register the pledge of Shares in
the shareholder register of the Company, including the transfer
of voting rights to the Pledgee in accordance with Section 5 and
to maintain such registration until the Pledgee has instructed in
writing otherwise, and undertakes to Pledgee during the existence
of the pledge created thereby to comply with the provisions of
the Share Pledge Agreement so long as the pledge is in effect.
Dated
STATIA TERMINALS N.V.
/s/ James G. Cameron /s/ Justin B. Wender
By: James G. Cameron By: Justin B. Wender
Managing Director Managing Director
<PAGE>
SCHEDULE II
SABA TRUSTCOMPANY N.V.
Acknowledgement
SABA TRUSTCOHPANY N.V.(the "Company"), hereby represented by (two
of) its managing director(s), accepts notice of and acknowledges
the pledge created by the attached share pledge agreement between
Statia Terminals Corporation N.V. (the "Pledgor") and Marine
Midland Bank, as trustee (the "Pledgee") (the "Share Pledge
Agreement"), agrees to and acknowledges the contents of the Share
Pledge Agreement, undertakes to register the pledge of Shares in
the shareholder register of the Company, including the transfer
of voting rights to the Pledgee in accordance with Section 5 and
to maintain such registration until the Pledgee has instructed in
writing otherwise, and undertakes to Pledgee during the existence
of the pledge created thereby to comply with the provisions of
the Share Pledge Agreement so long as the pledge is in effect.
Dated
SABA TRUSTCOMPANY N.V.
/s/ James G. Cameron /s/ Justin B. Wender
By: James G. Cameron By: Justin B. Wender
Managing Director Managing Director
<PAGE>
SCHEDULE II
BICEN DEVELOPMENT COMPANY
Acknowledgement
Bicen Development Company N.V. (the "Company"), hereby
represented by (two of) its managing director(s), accepts notice
of and acknowledgea the pledge created by the attached share
pledge agreement between Statia Terminals Corporation N.V. (the
"Pledgor") and Marine Midland Bank, as trustee (the "Pledgee"),
(the "Share Pledge Agreement"), agrees to and acknowledges the
contents of the Share Pledge Agreement, undertakes to register
the pledge of Shares in the shareholder register of the Company,
including the transfer of voting rights to the Pledgee in
accordance with Section 5 and to maintain such registration until
the Pledgee has instructed in writing otherwise, and undertakes
to Pledgee during the existence of the pledge created thereby to
comply with the provisions of the Share Pledge Agreement so long
as the pledge is in effect.
Dated
BICEN DEVELOPMENT COMPANY N.V.
/s/ James G. Cameron /s/ Justin B. Wender
By: James G. Cameron By: Justin B. Wender
Managing Director Managing Director
<PAGE>
36
Schedule III
[Form of Pledge Amendment]
To: the Pledgee
This is to inform you that we have acquired or obtained the following Additional
Shares as defined in the Share Pledge Agreement dated November 27, 1996, between
yourselves and ourselves:
Shares pledged
- --------------------------------------------------------------------------------
Percentage of all
Capital [or other
Description Share Nos./ No. of Equity Interest]
Issuer of Shares Certificate Nos. Par Value shares of Issuer
- ------ ----------- ---------------- --------- ------ -----------------
and that these Additional Shares are, and to the extent required, are hereby
made, subject to the Pledge as defined in said Share Pledge Agreement. This
Pledge Amendment forms an integral part of the Share Pledge Agreement.
__________________________________
Pledgor
Date:
<PAGE>
37
Acknowledgement
Statia Terminals N.V./Saba Trustcompany N.V./Bicen Development
Corporation N.V. ([each] the "Company")/[ ] (the "Issuer")
hereby represented by [two of its managing directort(s), accepts
notice of and acknowledges the pledge created by the attached
Pledge Amendment between Statia Terminals Corporation N.V. (the
"Pledgor") and Marine Midland Bank, as trustee (the "Pledgee")
pursuant to the Share Pledge Agreement (as defined therein),
agrees to and acknowledges the contents of the Share Pledge
Agreement (including the Pledge Amendment), undertakes to
register the pledge of Additional Shares in the shareholder
register of the Company/Issuer, including the transfer of voting
rights to the Pledgee in accordance with Section 5 and to
maintain such registration until the Pledgee has instructed in
writing otherwise, and undertakes to Pledgee during the existence
of the pledge created thereby to comply with the provisions of
the Share Pledge Agreement so long as the pledge is in effect.
Dated
TERMINALS/SABA/BICEN/ISSUER
By: By:
Managing Director Managing Director
<PAGE>
SHARE PLEDGE AGREEMENT
SHARE PLEDGE AGREEMENT (the "Pledge Agreement"), dated as of November 27,
1996, by and between Seven Seas Steamship Company, Inc., a company incorporated
under the laws of ___________________ having its corporate seat at
_________________ ("Pledgor") and Marine Midland Bank, a New York banking
corporation and trust company having its registered office at 140 Broadway, 12th
Floor, New York, NY 10005-1180, as trustee (in such capacity and together with
any successors and assigns in such capacity, "Pledgee") pursuant to the
Indenture (as hereinafter defined) and the Additional Lender Intercreditor
Agreement as defined in the Indenture, if any.
WITNESSETH:
WHEREAS, Statia Terminals International N.V. ("STI"), a company
incorporated under the laws of the Netherlands Antilles, Statia Terminals Canada
Incorporated (together with Terminals hereafter collectively referred to as the
"Issuers"), Pledgor, certain subsidiaries of Pledgor and Pledgee are
contemporaneously with the execution and delivery of this Pledge Agreement
entering into a certain indenture, dated as of November 27, 1996 (as amended,
restated, supplemented or otherwise modified from time to time, the "Indenture")
pursuant to which the Issuers are issuing 11-3/4% first mortgage notes due 2003
(the "First Mortgage Notes"), in the aggregate principal amount of
US$135,000,000;
WHEREAS, it is contemplated that the Issuers may, after the date hereof,
(i) issue exchange notes pursuant to the Indenture (the "Exchange Notes";
together with the First Mortgage Notes, the "Notes") and (ii) incur certain
additional indebtedness ("Additional Secured Indebtedness") in accordance with
the
<PAGE>
2
provisions of Section 4.04 and Section 4.14 of the Indenture which shall be
equally and ratably secured by the Pledged Collateral (as hereinafter defined);
WHEREAS, the Pledgor is entering into this Pledge Agreement with Pledgee
acting for the benefit of itself, the holders of the Notes and the holders of
Additional Secured Indebtedness (collectively the "Secured Parties") for the
purpose, among other things, of securing and providing for the payment of all
amounts of principal, premium, if any, interest, costs, charges, fees, expenses,
commissions, reimbursements, indemnities and all other amounts from time to time
due and payable by the Pledgor to the Secured Parties (whether at stated
maturity, by acceleration or otherwise, including, without limitation, the
payments of interest and other amounts which would accrue and become due but for
the filing of a petition in bankruptcy or the operation of any stay under any
Bankruptcy Law (as defined in the Indenture)) under the Indenture, the Notes,
this Pledge Agreement, and any other instrument governing the obligations of
Pledgor with respect to the Additional Secured Indebtedness (the "Additional
Indebtedness Instrument", together with the Indenture, the Notes, and this
Pledge Agreement collectively the "Secured Instruments"), as well as the
performance and payment of all other obligations and liabilities, now existing
or hereafter arising whatsoever which are now or at any time hereafter may be or
become due, owing or payable under any of the Secured Instruments, in any form
or currency, to the Secured Parties by the Pledgor, actually or contingently,
solely or jointly and/or severally with another or others, as principal or
surety, or by virtue of any current or other account in connection with any
advance, loan, credit, instrument, guarantee or indemnity made or issued to, for
or at the request of the Pledgor pursuant to any Secured Instrument and costs,
for the purpose hereof including,
<PAGE>
3
but not limited to, costs of collection of any amount due to the Secured Parties
(collectively, the "Secured Obligations");
WHEREAS, the Indenture is governed by the laws of State of New York;
WHEREAS, the Pledgor is of the opinion that the execution and delivery of
this Agreement and the performance of its obligations hereunder is in its
corporate interest and does not prejudice the rights of its creditors;
NOW, THEREFORE, in consideration of the foregoing premises the Pledgor
agrees with the Pledgee as follows:
Section 1 Definitions
Capitalized terms used herein and not defined shall have the meanings assigned
to them in the Indenture.
Section 2 Obligations Owed to Pledgee as Trustee
2.1 In order to ensure that a valid pledge is created pursuant to this Pledge
Agreement, Pledgor hereby agrees and covenants with Pledgee that it shall
(i) pay to Pledgee (as and when due by the Pledgor in accordance with the
provisions of the applicable Secured Instruments) all amounts of money due
and payable to the holders of the Notes and to the holders of the
Additional Secured Indebtedness under their respective Secured Instruments,
in order to permit Pledgee to make the payments required under the
applicable Secured Instrument, as and when due, to the holders of the Notes
and to the holders of Additional Secured Indebtedness, and (ii) perform all
of its other
<PAGE>
4
obligations to the holders of the Notes and the holders of the Additional
Secured Indebtedness in accordance with their respective Secured
Instruments. The agreements, covenants and obligations of Pledgor set
forth in the immediately preceding sentence shall hereinafter be referred
to as the "Debtholder Obligations". It is the intention of the parties
that the Debtholder Obligations shall be identical and equal, but
alternative to the obligations of Pledgor to the holders of the Notes and
to the holders of Additional Secured Indebtedness under their respective
Secured Instruments.
2.2 The Pledgor and the Pledgee agree and acknowledge that the Debtholder
Obligations are obligations and liabilities of the Pledgor to the Pledgee,
as trustee and paying agent, separate and independent from and without
prejudice to the liabilities which the Pledgor has or may have to the
holders of the Notes and to the holders of the Additional Secured
Indebtedness, provided that the total amount due and payable under the
Debtholder Obligations shall be decreased to the extent that the Pledgor
shall have paid any amounts to the Pledgee, which are due, payable and
owing to any holder of the Notes and any holder of Additional Secured
Indebtedness in accordance with their respective Secured Instruments.
2.3 In connection with the performance of the provisions of this Pledge
Agreement, the Pledgee (in its capacity as Trustee) shall have the duties,
and shall be entitled to the benefits, set forth in the Indenture and/or
the Additional Lender Intercreditor Agreement, if any, all to the extent
permitted by applicable law.
<PAGE>
5
2.4 The relationship of the holders of the Notes, the holders of Additional
Secured Indebtedness and the Pledgee are or will be, as the case may be,
governed by the Indenture and the applicable Intercreditor Agreements,
which are or will be, as the case may be, governed by and construed in
accordance with the laws of the State of New York.
Section 3 Pledge
3.1 In order to secure and to provide for the payment and performance when due
of all Secured Obligations, Pledgor hereby grants and, in the case of
Pledged Collateral hereafter acquired or obtained, agrees to grant to
Pledgee for the benefit of the Secured Parties and Pledgee hereby accepts
from the Pledgor a first right of pledge ("eerste pandrecht") (the
"Pledge"), to all of the right, title and interest of Pledgor in, to and
over the following whether now existing or hereafter acquired
(collectively, the "Pledged Collateral"):
(i) all issued and outstanding shares of Seven Seas Steamship Company
(St. Eustatius), N.V. ("SSSC"), a company incorporated under the
laws of the Netherlands Antilles, and all issued and outstanding
shares of Seven Seas Steamship Company N.V. ("Steamship"), a company
incorporated under the laws of the Netherlands Antilles (together
with SSSC hereinafter referred to as the "Companies"), all as listed
in Schedule I hereto (the "Pledged Shares");
(ii) all additional shares of capital stock of the Companies from time to
time acquired by Pledgor in
<PAGE>
6
any manner (including, without limitation) all stock dividends,
bonus shares, rights of issue, options and warrants at any time and
from time to time received, receivable or otherwise distributed with
respect to the Pledged Shares and all issued and outstanding shares
of capital stock or other equity interests of each other Netherlands
Antilles Person which, after the date hereof, is or becomes, as a
result of any occurrence, a Restricted Subsidiary of Pledgor
(collectively the "Additional Shares");
(iii) dividends, cash, distributions from retained earnings, returns of
paid up nominal share capital, return of paid in capital surplus
income, profits and other property, interests or proceeds at any
time and from time to time received, receivable or otherwise
distributed with respect to the Pledged Shares and Additional Shares
(the "Distributions");
(iv) all interest of Pledgor in the entries on the books of any financial
intermediary pertaining to the Pledged Collateral; and
(v) (a) any and all proceeds of any insurance (except payments made to a
Person which is not a party to this Pledge Agreement), indemnity,
warranty or guarantee payable to Pledgee or to Pledgor from time to
time with respect to any of the Pledged Collateral, (b) payments (in
any form whatsoever) made or due and payable to Pledgor from time to
time in connection with any requisition,
<PAGE>
7
confiscation, condemnation, seizure or forfeiture of all or any part
of the Pledged Collateral by any governmental authority (or any
Person acting under color of governmental authority), (c)
instruments representing obligations to pay amounts in respect of
Pledged Shares, (d) products of the Pledged Collateral, and (e)
other amounts from time to time paid or payable under or in
connection with any of the Pledged Collateral.
Section 4 Notification; Delivery of Pledged Collateral
4.1 The Pledge granted hereunder has been notified to and acknowledged by the
Companies as set forth in Schedule II. Upon acquisition by Pledgor of any
and all Additional Shares, Pledgor shall cause the Pledge granted hereunder
to be notified to and acknowledged by the Companies or the issuer of such
Additional Shares, as the case may be, and with due observance to the
provisions of this section 4.
4.2 Immediately upon this Pledge Agreement becoming effective with respect to
the Pledged Shares and promptly upon each receipt or acquisition thereof
with respect to Additional Shares, the Pledgor will deliver or cause to be
delivered to the Pledgee a duly authenticated extract from the register of
shareholders of the Companies and any issuer of Additional Shares
evidencing the entry in such register of the Pledge granted hereunder, and
if in respect of any one or more of the Pledged Shares or Additional
Shares, as the case may be, share certificates have been issued, the
Pledgor shall in addition deliver to the Pledgee the originals of such
share certificates, duly endorsed to evidence the Pledge granted hereunder.
All Pledged Shares
<PAGE>
8
and Additional Shares shall be in suitable form for transfer by delivery or
shall be accompanied by duly executed instruments of transfer or assignment
in blank, all in form and substance necessary or appropriate to complete
the Pledge and give the Pledgee the right to transfer the Pledged Shares
and Additional Shares under the terms hereof.
4.3 Pledgor shall, upon obtaining any Additional Shares of any Person, promptly
(and in any event within five Business Days) deliver to Pledgee a pledge
amendment, duly executed by Pledgor, in substantially the form of Schedule
III hereto (each, a "Pledge Amendment"), in respect of the additional
Pledged Shares which are to be pledged pursuant to this Pledge Agreement,
and an acknowledgement of such Pledge Amendment by the Companies or the
issuer of such Additional Shares, as the case may be, confirming the Pledge
hereby created on and in respect of such Additional Shares. Pledgor hereby
authorizes Pledgee to attach each Pledge Amendment to this Pledge Agreement
and agrees that all Additional Shares listed on any Pledge Amendment
delivered to Pledgee shall for all purposes hereunder be considered Pledged
Collateral from and after the date of such Pledge Amendment.
4.4 Pledgor shall further promptly (and in any event within five Business Days)
upon obtaining any Additional Shares, deliver to Pledgee written notice
that Pledgor is delivering all documents evidencing or representing the
Pledged Collateral, if any, to the Pledgee, at its own offices or in
deposit with another institution at such place or places as the Pledgee may
from time to time elect, and all such documents shall be held subject to
the terms,
<PAGE>
9
covenants and conditions herein set forth. Neither the Pledgee nor any
director, officer or employee of the Pledgee, shall be liable for any
action taken or omitted to be taken by it or them relative to any of such
documents except for its or their own gross negligence, willful misconduct,
or bad faith and the Pledgee shall not be liable for any action or omission
to act on the part of any agent appointed and selected by the Pledgee with
reasonable care to act with respect to such documents (or any part
thereof).
Section 5 Voting Rights; Distributions
5.1 Pledgee shall have the voting rights and other consensual rights and powers
pertaining to the Pledged Collateral or any part thereof, except that
Pledgee hereby authorizes, and grants power of attorney to the Pledgor to,
so long as no Event of Default shall have occurred and be continuing,
exercise any and all of such voting and/or consensual rights and powers
relating or pertaining to the Pledged Collateral or any part thereof, for
any purpose not inconsistent with the terms or purpose of this Pledge
Agreement, the Indenture and the applicable Secured Instrument, provided,
however, that the Pledgor shall not (i) exercise such rights which may have
an adverse effect on the value of the Pledged Collateral or the pledge
granted by this Pledge Agreement and (ii) without the prior written
approval of the Pledgee, vote in respect of any one or more of the Pledged
Shares or Additional Shares in favor of a proposal (x) to amend the
Articles of Association of the Companies or any other issues of Additional
Shares or (y) to dissolve and liquidate the Companies or any other issuer
of Additional Shares or (z) to issue any shares in
<PAGE>
10
addition to or in substitution for the Pledged Shares or any Additional
Shares or to re-issue shares that have been repurchased, except in
accordance with the provisions of section 6.2 hereof.
5.2 So long as no Event of Default shall have occurred and subject to and in
accordance with the provisions of the Indenture, the Pledgor shall be
entitled to receive, retain and utilize the Distributions, free from the
Pledge hereby created; provided, however, that (i) such Distributions are
made in accordance with the provisions of this Pledge Agreement and the
Indenture and (ii) any and all such Distributions consisting of rights or
interests in the form of securities shall be, and shall be forthwith
delivered to Pledgee to hold as Pledged Collateral and shall, if received
by Pledgor, be received for the benefit of Pledgee, be segregated from the
other property or funds of Pledgor, and be forthwith delivered to Pledgee
as Pledged Collateral in the same form as so received (with any necessary
or appropriate endorsement).
5.3 Upon the occurrence and during the continuance of an Event of Default, all
rights of the Pledgor to exercise the voting and/or consensual rights and
powers which it is entitled to exercise pursuant to Section 5.1 shall
cease, and all such rights shall thereupon be exercised by the Pledgee in
accordance with Section 5.5, which shall have the sole and exclusive right
and authority to exercise the voting and/or consensual rights and powers
relating or pertaining to the Pledged Collateral or any part thereof.
5.4 Upon or at any time after the occurrence of an Event of Default, the
Pledgor's rights to receive Distributions in
<PAGE>
11
accordance with Section 5.2, shall automatically cease and the Pledgee
shall be entitled to, and shall have the right to collect, any and all
Distributions, provided that the Pledgee shall at its option apply any and
all cash amounts so collected to satisfy the Secured Obligations, to the
fullest extent permitted by Netherlands Antilles law or hold such
Distributions as Pledged Collateral. Any Distributions in the form of non-
cash assets shall be received subject to the Pledge hereby created to the
fullest extent permitted by or possible under Netherlands Antilles law or
any other law governing such assets or the creation of an encumbrance
thereover. Without limiting the generality of the immediately preceding
sentence, Pledgor shall, at its sole cost and expense, from time to time
execute and deliver to Pledgee any and all documents necessary or
appropriate to confirm and protect the Pledge granted or purported to be
granted in the Distributions as contemplated in this Section 5.4 and to
enable Pledgee to exercise and enforce its rights and remedies with respect
thereto.
5.5 Pledgee shall have no responsibility to the Pledgor or any other Person for
its exercise or failure to exercise such voting or consensual rights and
powers.
5.6 A notice from the Pledgee to the Companies or other issuer of Additional
Shares with a copy to the Pledgor stating that an Event of Default has
occurred shall be sufficient for the Companies or other issuer of
Additional Shares to accept the Pledgee as being exclusively entitled to
(i) the voting and/or consensual rights and powers which it is entitled to
exercise pursuant to Section 5.1 and (ii) receive and collect the
Distributions. The Pledgee shall
<PAGE>
12
remain entitled to exercise such powers and rights and receive such
Distributions and the Companies or other issuer of Additional Shares shall
accept the Pledgee as being exclusively entitled to such powers and rights
and receive such Distributions until the earlier of (i) a notice of
termination of the Event of Default from the Pledgee to the Companies or
other issuer of Additional Shares or (ii) a decision by a competent court
that no Event of Default exists.
Notwithstanding the provisions of this Section 5.6, Pledgor shall (at its
sole cost and expense) from time to time execute and deliver to Pledgee
appropriate instruments as Pledgee may reasonably request in order to
permit Pledgee to exercise its voting and consensual and other rights which
it may be entitled to exercise and to receive all Distributions which it
may be entitled to receive under this Section 5.
Section 6 Transfers and Other Liens
6.1 Pledgor shall not (i) sell, convey, pledge, assign or otherwise dispose of,
or grant any option, right or warrant with respect to, any of the Pledged
Collateral except as permitted by the Indenture, (ii) create or permit to
exist any Lien upon or with respect to any Pledged Collateral other than
the Pledge granted to Pledgee under this Pledge Agreement, or (iii) permit
the Companies or any other issuer of Additional Shares to merge,
consolidate or change its legal form, unless all of the outstanding capital
stock or partnership interests of the surviving or resulting corporation or
partnership as the case may be is, upon such merger or consolidation,
pledged hereunder and no cash,
<PAGE>
13
securities or other property is distributed in respect of outstanding
shares or partnership interests of any other constituent corporation or
partnership.
6.2 Pledgor shall (i) cause each issuer of the Pledged Collateral not to issue
any shares in its capital stock or other securities in addition to or in
substitution for the Pledged Shares and Additional Shares issued by such
issuer, except to Pledgor and (ii) pledge hereunder, immediately upon its
acquisition (directly or indirectly) thereof, any and all additional shares
of capital stock or other equity securities of the issuer of the Pledged
Collateral which are required to be pledged hereunder.
Section 7 Representations, Warranties and Covenants
7.1 The Pledgor represents, warrants and covenants to the Pledgee as follows:
(a) Enforceability; No Filings
This Pledge Agreement has been duly executed and delivered by the Pledgor
and constitutes the valid and legally binding obligation of the Pledgor,
enforceable against the Pledgor in accordance with its terms. This Pledge
Agreement creates a valid first priority pledge ("eerste pandrecht") on the
Pledged Collateral. No filings, registrations or recordings are necessary
or appropriate to create, preserve and protect the Pledge granted by
Pledgor to Pledgee pursuant to this Pledge Agreement, other than the
registration of the Pledge in the register of shareholders of the Companies
or of the issuer of Additional Shares pursuant to Section 4.2 hereof.
<PAGE>
14
(b) Authority; No Conflict
Pledgor has the requisite corporate power, authority and legal right to
pledge and grant the Pledge hereunder in all the Pledged Collateral and
there is no law, regulation, provision having the force of law on the
Pledgor, judicial order, security right, contract, agreement or other
instrument binding on the Pledgor or affecting the Pledgor's properties, or
any impediment or disability which would conflict with or in any way
prevent the execution, delivery or performance by the Pledgor or the
enforcement against the Pledgor of this Pledge Agreement.
(c) No Consents
All authorizations, approvals, consents, permissions of, or other action by
or notice or filings with, any governmental authorities (including exchange
controls) or any other Persons which are required to be obtained, taken, or
made (i) in connection with the execution and delivery by the Pledgor of
this Pledge Agreement and the performance by the Pledgor of the Secured
Obligations or (ii) for the exercise by Pledgee of its rights and remedies
hereunder have been duly obtained, taken, or made and are in full force and
effect.
(d) No Lien
The Pledgor holds and, in the case of Pledged Collateral acquired or
obtained hereafter, shall at all times hold title to the Pledged Collateral
subject to no Lien other than the Pledge created hereby. Pledgor is, and
at the time of delivery of the Pledged Collateral to Pledgee in accordance
with Sections 4 and 14 of this Pledge Agreement will be, the sole legal and
beneficial owner of the Pledged Collateral. All Pledged Collateral is on
the date hereof,
<PAGE>
15
and, in the case of Pledged Collateral acquired or obtained hereafter, will
be, so owned by Pledgor free and clear of any Lien except for the Lien
granted to Pledgee pursuant to this Agreement.
(e) Due Authorization and Issuance
All of the Pledged Shares have been and the Additional Shares will be duly
authorized and validly issued and fully paid and nonassessable.
(f) Principal Place of Business
Pledgor's principal place of business is located at ______________________.
Pledgor shall not move its principal place of business except to such new
location as Pledgor may establish in accordance with the last sentence of
this subsection. Pledgor shall not establish a new location for its chief
executive office nor shall it change its name until (i) it shall have given
Pledgee not less than forty-five (45) days prior written notice of its
intention so to do, clearly describing such new location or name and
providing such other information in connection therewith as Pledgee may
request, and (ii) with respect to such new location or name, Pledgor shall
have taken all action necessary or required by any and all existing or
future laws, or as Pledgee shall from time to time reasonably request, to
maintain the validity and priority of the Pledge granted hereby.
(g) Pledged Collateral
Schedule I sets forth an accurate and complete description of all of the
outstanding capital stock of each Restricted Subsidiary of the Issuers
owned by Pledgor as of the date hereof and all information set forth herein
and on such
<PAGE>
16
Schedule relating to the Pledged Collateral is accurate and complete in all
respects.
(h) No Options, Warrants, etc.
There are no options, warrants, calls, rights, commitments or agreements of
any character to which Pledgor is a party or by which it is bound
obligating Pledgor to issue, deliver or sell or cause to be issued,
delivered or sold, additional Pledged Shares or obligating Pledgor to
grant, extend or enter into any such option, warrant, call, right,
commitment or agreement. There are no voting trusts or other agreements or
understandings to which Pledgor is a party with respect to the voting of
the capital stock of any issuer of the Pledged Shares.
(i) General
To the extent not represented and warranted above:
(1) Pledgor has the full legal capacity ("is volledig
beschikkingsbevoegd") to pledge the Pledged Collateral in favor of
Pledgee.
(2) Pledgor has not created in advance ("bij voorbaat") a pledge which is
still in existence on any of the Pledged Collateral in favor of any
party, under the laws of the Netherlands Antilles or under the laws of
any other jurisdiction.
(3) Pledgor has not created in advance ("bij voorbaat") any other security
interest, regardless its form, which is still in existence, in the
Pledged Collateral under the laws of the Netherlands Antilles or under
the laws of any other jurisdiction.
<PAGE>
17
(4) No right or charge, including but not limited to any "limited right"
("beperkt recht") exists on or with respect to the Assets, except for
the rights ("rechten") of Pledgor.
(5) The Pledged Collateral have not been attached ("vrij van beslag").
(6) Pledgor has not been dissolved and the Companies has not been
dissolved and no resolution to dissolve Pledgor or the Companies has
been adopted by its general meeting of shareholders.
(7) No depositary receipts ("certificaten") have been issued for the
Pledged Shares.
(8) Except as permitted or contemplated under the Indenture, neither the
Companies nor Pledgor has entered into any agreement pursuant to which
it is obliged to do anything which would cause the foregoing to be
untrue and incorrect, nor has any agreement or other instrument been
entered into or signed by Pledgor or the Companies pursuant to which
it has transferred or is obliged to transfer any rights attached to
the Pledged Shares or any Additional Shares or pursuant to which it
has granted options, warrants or similar rights with respect to the
Pledged or Additional Shares.
(9) No resolution or other action has been adopted or taken by the
Companies or its general meeting of shareholders to amend the articles
of association of the Companies as at the date hereof.
(10) The Companies has no shareholder(s) other than Pledgor.
(11) At the date hereof Pledgor is not entitled to any rights to subscribe
for shares in the share capital
<PAGE>
18
of the Companies, nor to any dividend rights, options, warrants, claim
rights or similar rights.
(12) The attached copy of the shareholder register of the Companies, is
complete and correct as at the date hereof.
Section 8 Remedies
8.1 Upon the occurrence of an Event of Default, Pledgee may, but shall not be
obliged to, in addition to any other action permitted by law (and not
limited in any manner to the remedies contained in the Notes, the Indenture
or any other Secured Instrument), take one or more of the following
actions, in accordance with the terms of and at the times specified in the
Indenture and the Additional Lender Intercreditor Agreement, if any,
whether or not it shall have resorted to any other property securing the
Secured Obligations or shall have proceeded against any party liable for
any of the Secured Obligations.
8.2 Upon the occurrence of an Event of Default, Pledgee may, to the fullest
extent permitted by applicable law, (i) without notice (except as herein
set forth), advertisement, hearing or process of law of any kind, sell any
or all of the Pledged Collateral, at any public or private sale wherever
held, without prejudice to the provisions of Sections 1180, 1181 and 1182
of the Civil Code of the Netherlands Antilles and (ii) retain and apply the
Distributions received pursuant to Section 5.4 hereof to the Secured
Obligations in accordance with Section 9 hereof. Pledgor agrees that, to
the extent notice of sale shall be required by law, five (5) days notice to
Pledgor of the time and place of any public sale or the time after which
any private sale or other intended
<PAGE>
19
disposition is to take place shall be commercially reasonable notification
of such matters. No notification need be given to Pledgor if it has
signed, after the occurrence of an Event of Default, an agreement
renouncing or modifying any right to notification of sale or other intended
disposition. Pledgee shall not be obligated to make any sale of the
Pledged Collateral regardless of notice of sale having been given. Pledgee
may adjourn any public or private sale from time to time by announcement at
the time and place fixed therefor, and such sale may, without further
notice, be made at the time and place to which it was so adjourned. In
connection with any sale, Pledgee shall have the right to impose such
limitations and restrictions on the sale of the Pledged Collateral as
Pledgee may deem to be necessary or appropriate to comply with any
applicable law rule or regulation having applicability to the sale,
including, without limitation, restrictions on the number and
qualifications of the offerees and purchasers and requirements for any
necessary governmental approvals, and the Pledgee shall be authorized at
any such sale (if it seems advisable to do so) to restrict the prospective
offerees and purchasers to persons who will represent and agree that they
are purchasing securities included in the Pledged Collateral for their own
account for investment and not with a view to the distribution or sale
thereof in violation of applicable securities laws. The Pledgor shall
cooperate with the Pledgee in obtaining any necessary consents of any
competent banking authority and agrees to cooperate with the Pledgee so
that the sale of the Pledged Collateral does not violate any applicable
securities laws. Without limiting the generality of the foregoing, the
Pledgor will cause the Companies or any other issuer of Pledged Collateral
to (a) register the offer and sale of any securities constituting the
Pledged Collateral under such
<PAGE>
20
securities laws or (b) should Pledgee so request, provide Pledgee with such
available material and financial and other information which counsel to
Pledgee shall require in order to be able to give an opinion to the effect
that the offer and sale of such Pledged Collateral does not require an
effective registration statement under such securities laws whichever is
requested by the Pledgee. The Pledgor hereby expressly waives, to the
fullest extent permitted by applicable law, (i) any and all notices (except
as herein set forth), advertisements, hearings or process of law in
connection with the exercise by the Pledgee of any of its rights and
remedies hereunder and (ii) any claims against Pledgee arising by reason of
the fact that the price at which any Pledged Collateral may have been sold
at any private sale was less than the price which might have been obtained
at a public sale, even if Pledgee accepts the first offer received and does
not offer such Pledged Collateral to more than one offeree. Pledgee may be
the purchaser of any or all of the Pledged Collateral at any such sale and
shall be entitled, for the purpose of bidding and making settlement or
payment of the purchase price for all or any portion of the Pledged
Collateral sold at such sale, to use and apply any of the Secured
Obligations owed to Pledgee as a credit on account of the purchase price of
any Pledged Collateral payable by Pledgee at such sale. Each purchaser at
any such sale shall acquire the property sold absolutely free from any
claim or right on the part of Pledgor, and Pledgor hereby waives, to the
fullest extent permitted by law, all rights of redemption, stay and/or
appraisal which it now has or may at any time in the future have under any
rule of law or statute now existing or hereafter enacted.
<PAGE>
21
Pledgee shall have the right, at any time upon the occurrence of an Event
of Default and without notice to Pledgor, to endorse, assign or otherwise
transfer to or to register in the name of the Pledgee or any of its
nominees any or all of the Pledged Collateral. In addition, Pledgee shall
have the right at any time to exchange certificates representing or
evidencing Pledged Collateral for certificates of smaller or larger
denominations.
Section 9 Application of Proceeds
The proceeds received by Pledgee in respect of any sale of, collection from or
other realization upon all or any part of the Pledged Collateral pursuant to the
exercise by Pledgee of its remedies as a secured creditor as provided in Section
8 hereof shall be applied, together with any other sums then held by Pledgee
pursuant to this Agreement, promptly by Pledgee in the manner set forth in the
Indenture and/or the Additional Lender Intercreditor Agreement, if any.
Section 10 Reasonable Care
Pledgee shall be deemed to have exercised reasonable care in the custody and
preservation of the Pledged Collateral in its possession, if any, if such
Pledged Collateral is accorded treatment substantially equivalent to that which
Pledgee, in its individual capacity, accords its own property consisting of
similar instruments or interests, it being understood that Pledgee shall have
any responsibility for (i) ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relating to any
Pledged Collateral, whether or not Pledgee has or is deemed to have knowledge of
such matters, or (ii) taking any necessary steps to
<PAGE>
22
preserve rights against any Person with respect to any Pledged Collateral.
Section 11 Expenses
Pledgor will immediately upon demand pay to Pledgee the amount of any and all
expenses, including the fees and expenses of its counsel (including, without
limitation, any local or foreign counsel) and the allocated costs of Pledgee's
internal counsel and the fees and expenses of any experts and agents which
Pledgee may incur in connection with (i) the collection of the Secured
Obligations, (ii) the enforcement and administration of this Pledge Agreement,
(iii) the custody or preservation of, or the sale of, collection from, or other
realization upon, any of the Pledged Collateral, (iv) the exercise or
enforcement of any of the rights of Pledgee or (v) the failure by Pledgor to
perform or observe any of the provisions hereof. All amounts payable by Pledgor
under this Section 11 shall be due upon immediate demand, shall bear interest
from the date advanced to the date of repayment thereof at a rate of 2% in
excess of the highest rate payable under the Notes ("Default Rate"), and shall
be part of the Secured Obligations. Pledgor's obligations under this Section 11
shall survive the termination of this Agreement and the discharge of Pledgor's
other obligations hereunder.
In addition to any of the other rights and remedies hereunder, Pledgee shall
have the right to institute a proceeding seeking specific performance in
connection with any of the agreements or obligations hereunder.
<PAGE>
23
Section 12 No Waiver; Cumulative Remedies
12.1 No failure on the part of the Pledgee to exercise, no course of dealing
with respect to, and no delay on the part of the Pledgee in exercising, any
right, power or remedy hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right, power or remedy
hereunder preclude any other or further exercise thereof or the exercise of
any other right, power or remedy. The remedies herein provided are
cumulative and are not exclusive of any other remedies provided by law.
12.2 In the event Pledgee shall have instituted any proceeding to enforce any
right, power or remedy under this Pledge Agreement by foreclosure, sale,
entry or otherwise, and such proceeding shall have been discontinued or
abandoned for any reason or shall have been determined adversely to
Pledgee, then and in every such case, Pledgor and Pledgee shall be restored
to their respective former positions and rights hereunder with respect to
the Pledged Collateral, and all rights, remedies and power of Pledgee shall
continue as if no such proceeding had been instituted.
Section 13 No Release
Nothing set forth in this Pledge Agreement shall relieve Pledgor from the
performance of any term, covenant, condition or agreement on Pledgor's part to
be performed or observed under or in respect of any of the Pledged Collateral or
from any liability to any Person under or in respect of any of the Pledged
Collateral or shall impose any obligation on Pledgee to perform or observe any
such term, covenant, condition or agreement on Pledgor's part to be so performed
or observed shall impose any
<PAGE>
24
liability on Pledgee for any act or omission on the part of Pledgor relating
thereto or for any breach of any representation or warranty on the part of
Pledgor contained in this Pledge Agreement, or under or in respect of the
Pledged Collateral or made in connection herewith or therewith.
Section 14 Supplements, Further Assurances
Pledgor agrees that at any time and from time to time (including, without
limitation, in connection with (i) any amendment, amendment and restatement,
supplement or modification of the Indenture or (ii) any acquisition by Pledgor
of Additional Shares), at the sole cost and expenses of Pledgor, Pledgor shall
promptly execute and deliver all further instruments and documents, including,
without limitation, supplemental or additional pledge agreements, and take all
further actions that may be necessary or required by any and all existing and
future laws or that Pledgee may from time to time reasonably request, in order
to protect the validity and priority of the Pledge granted or purported to be
granted hereby or to enable Pledgee to exercise and enforce its rights and
remedies hereunder with respect to any Pledged Collateral.
Section 15 Notices
Unless otherwise provided herein any notice or other communication herein
required or permitted to be given shall be given in the manner and at the
address set forth in the Indenture, or as to any party at such other address as
shall be designated by such party in a written notice to the other party
complying as to delivery with the terms of this Section 15. All such notices
and other communications shall be deemed to have been given when delivered in
person, or received by telecopy or
<PAGE>
25
telex; or one (1) Business Day after delivery to the office of such overnight
courier service; or five (5) Business Days after deposit in the United States
mail, registered or certified, with postage prepaid and properly addressed;
provided, however, that notice to Pledgee shall not be effective until received
by Pledgee.
Section 16 Continuing Security Interest; Assignment
This Pledge Agreement shall create a continuing security interest in the Pledged
Collateral and shall (i) be binding upon Pledgor, its successors and assigns,
and (ii) inure, together with the rights and remedies of Pledgee hereunder, to
the benefit of Pledgee and each of their respective successors, transferees and
assigns; no other Persons (including, without limitation, any other creditor of
the Pledgor) shall have any interest herein or any right or benefit with respect
hereto.
Section 17 Severability of Provisions
Any provision of this Pledge Agreement which is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof or affecting the validity or enforceability of such provision
in any other jurisdiction.
Section 18 Pledgee
Pledgee has been appointed as trustee hereunder pursuant to the Indenture and
the Additional Lender Intercreditor Agreement, if any. The actions of Pledgee
hereunder are subject to the provisions of the Indenture and/or the Additional
Lender
<PAGE>
26
Intercreditor Agreement, if any. Pledgee shall have the right hereunder to make
demands, to give notice, to exercise or refrain from exercising any rights, and
to take or refrain from taking action (including, without limitation the release
or substitution of Pledged Collateral), in accordance with this Pledge
Agreement, the Indenture and the Additional Lender Intercreditor Agreement, if
any. Pledgee may resign its position as trustee and a successor Pledgee may be
appointed in the manner provided in the Indenture and the Additional Lender
Intercreditor Agreement, if any. Upon the acceptance of any appointment as
Pledgee by a successor Pledgee, that successor Pledgee shall thereupon succeed
to and become vested with all the rights, powers, privileges and duties of the
retiring Pledgee under this Pledge Agreement, and the retiring Pledgee shall
thereupon be discharged from its duties and obligations under this Pledge
Agreement. After any retiring Pledgee's resignation, the provisions of this
Pledge Agreement shall inure to its benefit as to any actions taken or omitted
to be taken by it under this Pledge Agreement while it was Pledgee.
Section 19 Pledgee may Perform
If the Pledgor shall fail to do any act or things which it has covenanted to do
hereunder, the Pledgee may (but shall not be obligated to) do the same or cause
it to be done or remedy any such breach, and may expend its funds for such
purpose. Any and all amounts so expended by the Pledgee shall be repayable to it
by the Pledgor immediately upon the Pledgee's demand therefor, with interest at
a per annum rate equal to the Default Rate. Pledgor's obligations under this
Section 19 shall survive the termination of this Pledge Agreement and the
discharge of Pledgor's obligations under this Pledge Agreement.
<PAGE>
27
Section 20 Pledgee Appointed Attorney-in-Fact
The Pledgor hereby appoints the Pledgee the Pledgor's attorney-in-fact with an
interest, with full power of substitution, for the purpose of taking such action
and executing agreements, instruments and other documents, in the name of the
Pledgor or otherwise as the Pledgee may deem necessary or advisable to
accomplish the purposes hereof, which appointment is coupled with an interest
and is irrevocable. Pledgee will notify the Pledgor of such action and provide
the Pledgor with copies of such documents prior to or substantially
contemporaneously with the taking or filing thereof.
Section 21 Termination
This Pledge Agreement and the Pledge created hereby shall automatically
terminate when all Secured Obligations shall have been fully paid and satisfied
in accordance with the provisions of the Indenture. At that time, the Pledgee
shall (without recourse upon, or any warranty whatsoever by, Pledgee) deliver to
Pledgor all Pledged Collateral and related documents then in the custody or
possession of the Pledgee, if any, all without recourse upon, or warranty
whatsoever by the Pledgee and at the cost and expense of the Pledgor. The
Pledgee, at the cost and expense of the Pledgor, shall do such further acts and
things, and execute and deliver to the Pledgor such additional releases,
assignments and instruments, as the Pledgor may reasonably require or reasonably
deem advisable to carry into effect the purpose of this Section 21.
Section 22 Limitation on Interest Payable
<PAGE>
28
It is the intention of the parties to conform strictly to the usury laws,
whether state or federal, that are applicable to the transaction of which this
Pledge Agreement is a part. All agreements between Pledgor and Pledgee, whether
now existing or hereafter arising and whether oral or written, are hereby
expressly limited so that in no contingency or event whatsoever shall the amount
paid or agreed to be paid by Pledgor for the use, forbearance or detention of
the money to be loaned or advanced under the Indenture or any related document,
or for the payment or performance of any covenant or obligation contained herein
or in the Indenture, exceed the maximum amount permissible under applicable
usury laws. If under any circumstances whatsoever fulfillment of any such
provision, at the time performance of such provision shall be due, shall involve
exceeding the limit of validity prescribed by law, then the obligation to be
fulfilled shall be reduced to the limit of such validity. If under any
circumstances Pledgor shall have paid an amount deemed interest by applicable
law, which would exceed the highest lawful rate, such amount that would be
excessive interest under applicable usury laws shall be applied to the reduction
of the principal amount owing in respect of the Secured Obligations and not to
the payment of interest, or if such excessive interest exceeds the unpaid
balance of principal and any other amounts due hereunder, the excess shall be
refunded to Pledgor by the holders of the Notes. All sums paid or agreed to be
paid for the use, forbearance or detention of the principal under any extension
of credit or advancement of funds by Marine Midland Bank, as trustee, shall, to
the extent permitted by applicable law, and to the extent necessary to preclude
exceeding the limit of validity prescribed by law, be amortized, prorated,
allocated and spread from the date of this Pledge Agreement until payment in
full of the Secured Obligations so that the actual rate of interest on
<PAGE>
29
account of such principal amounts is uniform throughout the term hereof.
Section 23 Headings
Section headings used in this Pledge Agreement are for convenience of reference
only and shall not affect the construction of this Pledge Agreement.
Section 24 Amendments
No amendment, modification, supplement, termination or waiver of or to any
provision of this Pledge Agreement, nor any consent to any departure by the
Pledgor from any provision of this Pledge Agreement, shall be effective unless
the same shall be in writing and signed by the Pledgee. Any amendment,
modification or supplement of or to any provision of this Pledge Agreement, any
waiver of any provision of this Pledge Agreement, and any consent to any
departure by the Pledgor from the terms of any provision of this Pledge
Agreement shall be effective only in the specific instance and for the specific
purpose for which made or given. No notice to or demand upon the Pledgor in any
instance hereunder shall entitle the Pledgor to any other or further notice or
demand in similar or other circumstance.
<PAGE>
30
Section 25 Indemnification
Each and every obligation of the Issuers to indemnify and hold harmless the
Trustee in the Indenture contained in Section 7.07 thereof is incorporated
herein mutatis mutandis as an obligation of Pledgor hereunder to indemnify
Pledgee, and Marine Midland Bank, in its individual capacity, and the officers,
directors, employees, agents and applicants thereof.
Section 26 Governing law; Consent to Jurisdiction
This Pledge Agreement shall be governed by and construed in accordance with the
laws of the Netherlands Antilles. The competent courts of the Netherlands
Antilles in Curacao shall have non-exclusive jurisdiction.
Section 27 Execution in Counterparts
This Pledge Agreement may be executed in any number of counterparts, each of
which counterparts, when so executed and delivered, shall be deemed to be an
original and all of which counterparts, taken together, shall constitute one and
the same agreement.
<PAGE>
31
IN WITNESS WHEREOF, the parties hereto executed or have caused this Pledge
Agreement to be executed by their respective managing directors or officers
thereunto duly authorized, as the case may be, as of the day and year first
above written.
SEVEN SEAS STEAMSHIP COMPANY, INC.
as pledgor
By: /s/ James G. Cameron
--------------------
Title: Attorney-in-Fact
MARINE MIDLAND BANK, in its capacity as trustee,
as pledgee
By: /s/Eileen M. Hughes
------------------------
Title: Assistant Vice President
<PAGE>
32
SCHEDULE I
<TABLE>
<CAPTION>
Shares pledged
- ---------------------------------------------------------------------------------------------
Percentage of all
Capital [or other
Description Share Nos./ Equity Interest]
Issuer of Shares Certificate Nos. Par Value No. of Shares of Issuer
- ------ --------- ---------------- --------- ------------- ---------
<S> <C> <C> <C> <C> <C>
</TABLE>
<PAGE>
33
SCHEDULE II
SEVEN SEAS STEAMSHIP COMPANY (ST. EUSTATIUS), N.V.
Acknowledgement
Seven Seas Steamship company (St. Eustatius), N.V. (the "Company"), hereby
represented by (two of) its managing director(s), accepts notice of and
acknowledges the pledge created by the attached share pledge agreement between
Seven Seas Steamship Company, Inc. (the "Pledgor") and Marine Midland Bank, as
trustee (the "Pledgee") (the "Share Pledge Agreement"), agrees to and
acknowledges the contents of the Share Pledge Agreement, undertakes to register
the pledge of Shares in the shareholder register of the Company, including the
transfer of voting rights to the Pledgee in accordance with Section 5 and to
maintain such registration until the Pledgee has instructed in writing
otherwise, and undertakes to Pledgee during the existence of the pledge created
thereby to comply with the provisions of the Share Pledge Agreement so long as
the pledge is in effect.
Dated
SEVEN SEAS STEAMSHIP COMPANY (ST. EUSTATIUS), N.V.
/s/Robert R. Russo /s/James G. Cameron
- ------------------------------- ---------------------------------
By: Robert R. Russo By: James G. Cameron
Managing Director Managing Director
<PAGE>
35
Schedule III
[Form of Pledge Amendment]
To: the Pledgee
This is to inform you that we have acquired or obtained the following Additional
Shares as defined in the Share Pledge Agreement dated November 27, 1996, between
yourselves and ourselves:
<TABLE>
<CAPTION>
Shares pledged
- ---------------------------------------------------------------------------------------------
Percentage of all
Capital [or other
Description Share Nos./ Equity Interest]
Issuer of Shares Certificate Nos. Par Value No. of Shares of Issuer
- ------ --------- ---------------- --------- ------------- ---------
<S> <C> <C> <C> <C> <C>
</TABLE>
and that these Additional Shares are, and to the extent required, are hereby
made, subject to the Pledge as defined in said Share Pledge Agreement. This
Pledge Amendment forms an integral part of the Share Pledge Agreement.
-------------------------------
Pledgor
Date:
<PAGE>
36
<PAGE>
37
Acknowledgement
Seven Seas Steamship Company (St. Eustatius) N.V./Seven Seas Steamship Company
N.V. ([each] the "Company")/[____________] (the "Issuer") hereby represented by
[two of] its managing director(s), accepts notice of and acknowledges the pledge
created by the attached Pledge Amendment between Seven Seas Shipping Co., Inc.
(the "Pledgor") and Marine Midland Bank, as trustee (the "Pledgee") pursuant to
the Share Pledge Agreement (as defined therein), agrees to and acknowledges the
contents of the Share Pledge Agreement (including the Pledge Amendment),
undertakes to register the pledge of Additional Shares in the shareholder
register of the Company/Issuer, including the transfer of voting rights to the
Pledgee in accordance with Section 5 and to maintain such registration until the
Pledgee has instructed in writing otherwise, and undertakes to Pledgee during
the existence of the pledge created thereby to comply with the provisions of the
Share Pledge Agreement so long as the pledge is in effect.
Dated
SSSC/ Steamship/ISSUER
- ------------------------------- ---------------------------------
By: By:
Managing Director Managing Director
<PAGE>
FIDUCIARY TRANSFER OF TANGIBLE ASSETS AGREEMENT
FIDUCIARY TRANSFER OF TANGIBLE ASSETS AGREEMENT (the "Agreement"), dated
as of November 27, 1996, by and between Statia Terminals N.V., a company
incorporated under the laws of the Netherlands Antilles, having its corporate
seat at ("Statia Terminals"), Saba Trust Company N.V., a company incorporated
under the laws of the Netherlands Antilles, having its corporate seat at
____________________ ("Saba"), Bicen Development Corporation N.V., a company
incorporated under the laws of the Netherlands Antilles, having its corporate
seat at __________________ ("Bicen"), Statia Laboratory Services N.V., a company
incorporated under the laws of the Netherlands Antilles, having its corporate
seat at ________________ ("Labs"), Saba Tugs N.V., a company incorporated under
the laws of the Netherlands Antilles, having its corporate seat at
___________________ ("Tugs") and Seven Seas Steamship Company (St. Eustatius)
N.V., a company incorporated under the laws of the Netherlands Antilles, having
its corporate seat at ________________ ("Seven Seas") (Statia Terminals, Saba,
Bicen, Labs, Tugs and Seven Seas individually a "Transferor" and collectively
the "Transferors") and Marine Midland Bank, a New York banking corporation and
trust company, having its registered office at 140 Broadway, 12th Floor, New
York, NY 10005-1180, as trustee (in such capacity and together with any
successors and assigns in such capacity, the "Transferee") pursuant to the
Indenture (as hereinafter defined) and the Additional Lender Intercreditor
Agreement (as defined in the Indenture), if any.
<PAGE>
2
WITNESSETH:
WHEREAS the Transferors, Statia Terminals International N.V. ("Statia
International"), Statia Terminals Canada Incorporated ("Statia Canada" together
with Statia International hereafter collectively referred to as the "Issuers"),
and certain other parties are contemporaneously with the execution and delivery
of this Agreement entering into a certain indenture dated as of November 27,
1996, (as amended, restated, supplemented or otherwise modified from time to
time, the "Indenture"), pursuant to which the Issuers are issuing 11 3/4% first
mortgage notes due 2003 (the "First Mortgage Notes"), in the aggregate principal
amount of US$135,000,000;
WHEREAS, it is contemplated that the Issuers may, after the date hereof,
(i) issue exchange notes pursuant to the Indenture (the "Exchange Notes";
together with the First Mortgage Notes, the "Notes") and (ii) incur certain
additional indebtedness ("Additional Secured Indebtedness") in accordance with
the provisions of Section 4.04 and Section 4.14 of the Indenture which shall be
equally and ratably secured by the Pledged Collateral (as hereinafter defined);
WHEREAS, pursuant to the Indenture and the guarantee set forth in Article
Ten thereof (the "Guarantee") , each Transferor is jointly and severally
guaranteeing the payment and performance of all the obligations of the Issuers
arising under or in connection with the Notes and Indenture and each
Transferor's obligations under such Guarantee are intended to be secured
hereunder;
<PAGE>
3
WHEREAS, each Transferor is entering into this Agreement with Transferee
acting for the benefit of itself, the holders of the Notes and the holders of
Additional Secured Indebtedness (collectively the "Secured Parties") for the
purpose, among other things, of securing and providing for the payment of all
amounts of principal, premium, if any, interest, costs, charges, fees, expenses,
commissions, reimbursements, indemnities and all other amounts from time to time
due and payable by each Transferor to the Secured Parties (whether at stated
maturity, by acceleration or otherwise, including, without limitation, the
payments of interest and other amounts which would accrue and become due but for
the filing of a petition in bankruptcy or the operation of any stay under any
Bankruptcy Law (as defined in the Indenture)) under the Indenture, the Notes,
the Guarantee, this Agreement, and any other instrument governing the
obligations of each Transferor with respect to the Additional Secured
Indebtedness (the "Additional Indebtedness Instrument"; together with the
Indenture, the Notes, the Guarantee and this Agreement, the "Secured
Instruments"), as well as the performance and payment of all other obligations
and liabilities, now existing or hereafter arising whatsoever which are now or
at any time hereafter may be or become due, owing or payable under any of the
Secured Instruments, in any form or currency, to the Secured Parties by each
Transferor, actually or contingently, solely or jointly and/or severally with
another or others, as principal or surety, or by virtue of any current or other
account in connection with any advance, loan, credit, instrument, guarantee or
indemnity made or issued to, for or at the request of each Transferor pursuant
to any Secured Instrument and costs, for the purpose hereof including, but not
limited to, costs of collection of any amount due to the Secured Parties
(collectively, the "Secured Obligations");
<PAGE>
4
WHEREAS, pursuant to Netherlands Antilles private international law, the
vesting of security rights on tangible assets shall be governed by the laws of
the state or country in which such tangible assets are located at the moment of
vesting security rights thereon ("lex rei sitae");
WHEREAS, the Indenture is governed by the laws of the State of New York;
WHEREAS, each Transferor has advised the Transferee that the execution and
delivery of this Agreement and the performance of its obligations under this
Agreement is in its corporate interest and does not prejudice the rights of its
creditors;
NOW, THEREFORE, in consideration of the foregoing premises each Transferor
agrees with the Transferee as follows:
Section 1 Definitions
Capitalized terms used herein and not defined shall have the meanings assigned
to them in the Indenture.
Section 2 Obligations Owed to Transferee, as Trustee
2.1 In order to ensure that a valid fiduciary transfer is created pursuant to
this Agreement, each Transferor hereby agrees and covenants with Transferee
that it shall (I) pay to Transferee (as and when due by each Transferor in
accordance with the provisions of the applicable Secured Instruments) all
amounts of money due and payable to the holders of the Notes and to the
holders of the Additional Secured Indebtedness under their respective
Secured
<PAGE>
5
Instruments, in order to permit Transferee to make the payments under the
applicable Secured Instrument, as and when due to the holders of the Notes
and to the holders of Additional Secured Indebtedness, and (ii) perform all
of its other obligations to the holders of the Notes and the holders of the
Additional Secured Indebtedness in accordance with their respective Secured
Instruments. The agreements, covenants and obligations of each Transferor
set forth in the immediately preceding sentence shall hereinafter be
referred to as the "Debtholder Obligations". It is the intention of the
parties that the Debtholder Obligations shall be identical and equal, but
alternative to, the obligations of each Transferor to the holders of the
Notes and to the holders of Additional Secured Indebtedness under their
respective Secured Instruments.
2.2 Each Transferor and the Transferee agree and acknowledge that the
Debtholder Obligations are obligations and liabilities of each Transferor
to the Transferee, as trustee and paying agent, separate and independent
from and without prejudice to the liabilities which each Transferor has or
may have to the holders of the Notes and to the holders of the Additional
Secured Indebtedness, provided that the total amount due and payable under
the Debtholder Obligations shall be decreased to the extent that each
Transferor shall have paid any amounts to the Transferee, which are due,
payable and owing to any holder of the Notes and any holder of Additional
Secured Indebtedness in accordance with their respective Secured
Instruments.
2.3 In connection with the performance of the provisions of this Agreement, the
Transferee (in its capacity as Trustee) shall have the duties, and shall be
entitled to the benefits, set
<PAGE>
6
forth in the Indenture and/or the Additional Lender Intercreditor
Agreement, if any, all to the extent permitted by applicable law.
2.4 The relationship of the holders of the Notes, the holders of Additional
Secured Indebtedness and the Transferee are or will be, as the case may be,
governed by the Indenture and the applicable Intercreditor Agreements,
which are or will be, as the case may be, governed by and construed in
accordance with the laws of the State of New York.
Section 3 Transfer
3.1 As security for the payment and performance of the Secured Obligations,
each Transferor hereby transfers (and, in the case of Pledged Collateral
hereafter arising or acquired, agrees to transfer) title by way of
fiduciary transfer (fiduciaire eiGendomsoverdracht) to the Transferee for
the benefit of the Secured Parties, who accepts such title from each
Transferor in and to all of the right, title and interest of each
Transferor in, to and under the following property, whether now existing or
hereafter arising or acquired (collectively, the "Pledged Collateral"):
(I) any and all equipment of any kind or nature (other than vehicles,
marine vessels and emergency and spill response equipment) located at
or used in connection with the operation of each Transferor's business
conducted at the Mortgaged Property (as defined in the Indenture)
located in the Netherlands Antilles, whether or not affixed to such
Mortgaged Property, and all machinery, apparatus, equipment, fittings,
fixtures, improvements and articles of personal
<PAGE>
7
property of every kind and nature whatsoever now or hereafter attached
or affixed to such Mortgaged Property or used in connection with the
use and enjoyment thereof or the maintenance or preservation thereof,
including, without limitation, all immoveable property (to the extent
not registered with the relevant property register), truck racks,
jetties, docks, hose stations and tanks (to the extent not
constituting real property), spheres, pipelines, monopiles or pumps
whether floating, fixed or permanent, offshore single point mooring
buoys and other buoys, atmospheric distillation, storage, blending and
loading equipment, utility systems, fire sprinkler and alarm systems
or other fire prevention or extinguishing apparatus materials, HVAC
equipment, boilers, all switchboards, electronic data processing,
telecommunications or computer equipment, office machinery, computers
and computer hardware and software (whether owned or licensed), all
indoor or outdoor furniture, tools, materials, refrigeration,
electronic monitoring, water or lighting systems, power, sanitation,
waste removal, elevators, maintenance or other systems or equipment,
and all other articles used or useful in connection with the use or
operation of any part of such Mortgaged Property, including, without
limitation the items of equipment specified in Exhibit I hereto,
together with all modifications, renewals, substitutions, attachments,
improvements, accessions, alterations, additions, replacements and
repairs thereto and other property now or hereafter affixed thereto or
used in connection therewith (collectively, the "Equipment");
<PAGE>
8
(ii) all inventory (including, without limitation, all raw materials,
work-in-process, finished and semifinished inventory or goods of any
kind, nature or description), held for sale, exchange or lease or
furnished or to be furnished under a contract of service or an
exchange arrangement or used or consumed in the business or in
connection with the manufacturing, package, shipping, advertising,
selling or finishing of such goods, and all right, title and
interest therein and thereto, and the proceeds (including, without
limitation, all proceeds of insurance with respect thereto,
including the proceeds of any applicable casualty insurance to the
extent relating thereto) and products of all of the foregoing, and
all ledgers, books of account, records, tapes, cards, computer
programs, computer disks or tapes, computer printouts, computer
runs, and other computer-prepared information to the extent relating
to any of the foregoing (collectively, "Inventory"); provided,
however, that the fiduciary transfer of Inventory contemplated by
this Section 3.1(ii) is subject to, conditioned, and shall become
immediately effective (without any act or delivery by any Person)
upon, the payment and satisfaction in full, or other termination, of
the Lender Debt (as defined in the appropriate Access Intercreditor
Agreement) (the "Lender Debt") and/or any other release by Lender
(as defined in the appropriate Access Intercreditor Agreement);
provided, further that in the event the Transferors shall at any
time, subsequent to the termination and satisfaction of the Lender
Debt, incur Indebtedness of the type permitted by, and in accordance
with the provisions of clause
<PAGE>
9
(i) of Section 4.04 of the Indenture (the "Permitted Revolving
Indebtedness"), the parties hereto intend that a valid fiduciary
transfer shall be granted to the holder of the Permitted Revolving
Indebtedness and that upon the incurrence of such Indebtedness and the
execution and delivery by the applicable Transferors and the holder of
such Permitted Revolving Indebtedness of the documentation evidencing
same, the fiduciary transfer of Inventory granted to Transferee
hereunder shall be deemed to have been automatically terminated in
order that the applicable Transferors may grant a valid fiduciary
transfer of Inventory to the holder of such Permitted Revolving
Indebtedness; provided, further that upon the payment and satisfaction
in full or other termination of the Permitted Revolving Indebtedness
and/or any other release by the holder of such Indebtedness, the
fiduciary transfer of Inventory granted hereunder to Transferee shall,
once again, become immediately effective (it being understood,
however, that the Transferors shall execute and deliver any and all
documents necessary to effect the foregoing provisions of this Section
3.1(ii));
(iii) any and all documents and records relating to all or any portion of
the Equipment and any item or type of other Pledged Collateral (other
than Inventory, Accounts and Intangibles (each as defined in the
appropriate Access Intercreditor Agreement)) in respect of which
Transferee has been granted a security right under the Security
Documents executed and delivered substantially in the form of Exhibits
G, I-1 and K-2 to the Indenture, including, but not
<PAGE>
10
limited to books, records, surveys, drawings, plans, specifications,
contracts, file materials, operating and maintenance records,
catalogues, lists, correspondence, operating manuals, warranties,
guarantees, appraisals, studies and data, permits, licenses,
franchises, certificates, consents, approvals, authorizations, ledger
cards and invoices, tapes, cards, computer programs, computer disks or
tapes, computer printouts, computer runs and other computer-prepared
information, evidences of the filing of security agreements, lien
instruments and other statements, if any, and the registration of
other instruments in connection with any of the foregoing and
amendments thereto, notices to other creditors or secured parties, and
certificates from filing or other registration officers, credit
information, reports and memoranda and maintenance contracts,
(collectively the "Documents"); and
(iv) all proceeds and products of any and all of the foregoing (other than
Inventory).
Notwithstanding the foregoing, the Pledged Collateral shall not include (x)
property or assets hereafter acquired by each Transferor in accordance with
clause (ix) of the definition of Permitted Liens in the Indenture;
provided, however, that at such time as such property or asset is no longer
subject to such Lien or security interest, such property shall (without any
act or delivery by any Person) constitute Pledged Collateral hereunder or
(y) vehicles, marine vessels and emergency and spill response equipment.
<PAGE>
11
3.2 Each Transferor herewith agrees with the Transferee that the Transferee
shall at all times have access to and the right to receive copies of all
Documents relating to all or any portion of the Pledged Collateral.
It is the intention of the parties hereto that this Agreement grant to the
Transferee a fiduciary transfer of all of each Transferor's rights, title
and interest in each and every item or type of Pledged Collateral currently
owned or held by each Transferor and acquired or obtained after the date
hereof thereby. The fiduciary transfer of rights, title, and interest in
the Pledged Collateral acquired or obtained hereafter shall be effected
upon the acquisition thereof in accordance with section 3.3 of this
Agreement.
3.3 Each Transferor shall, (I) immediately after obtaining or acquiring any
item or type of property which would constitute Pledged Collateral having a
fair market value in excess of US$50,000, and (ii) no later than the fifth
Business Day following the end of each calendar month deliver to Transferee
an amendment to this Agreement, duly executed by each Transferor, in
substantially the form of Schedule 1 attached hereto (each an "Amendment")
(x) identifying each item or type of Pledged Collateral acquired or
obtained after the date hereof or after the date of the immediately
preceding Amendment, as the case may be, and (y) confirming the fiduciary
transfer of title granted hereunder in respect of such after-acquired
Pledged Collateral. Each Transferor hereby authorizes Transferee to attach
each Amendment to this Agreement and agrees that all Pledged Collateral
listed on any Amendment delivered to Transferee shall for all purposes
hereunder be considered
<PAGE>
12
Pledged Collateral from and after the date of such Amendment.
3.4 Notwithstanding any provision to the contrary set forth in this Agreement,
it is the intention of the parties that, with respect to Inventory, the
Transferee's interest therein shall be subject and subordinate to the
rights of no Person other than the Lender.
3.5 Anything to the contrary contained herein notwithstanding, by accepting the
fiduciary transfer arising from this Agreement, Transferee shall not be
deemed to be obligated to perform any of the covenants, conditions or
provisions contained in, or otherwise deal with, the Pledged Collateral or
to make any payment thereunder or with respect thereto and Transferee shall
have no liability under any Pledged Collateral, and each Transferor shall
remain solely liable to perform all the obligations and make all payments
under the Pledged Collateral.
3.6 Further Assurances
Each Transferor agrees that at any time and from time to time (including,
without limitation, in connection with any amendment, restatement,
supplement or modification of the Indenture) at the sole cost and expense
of each Transferor, each Transferor shall promptly execute and deliver all
further instruments and documents, including, without limitation,
supplemental or additional fiduciary transfer agreements, and take all
further actions that may be necessary or required by any and all existing
or future law, or that Transferee may from time to time reasonably request,
to carry into effect the purposes of this Agreement and in order to protect
the validity and priority of the fiduciary
<PAGE>
13
transfer granted or purported to be granted hereby or to enable each
Transferor to exercise and enforce its rights and remedies hereunder with
respect to any Pledged Collateral.
Section 4 Power of Attorney; Exercise of Rights
4.1 The Transferee shall have an undivided interest in the Pledged Collateral
(other than Inventory until such time as the Lender Debt shall be paid and
satisfied in full) and, if an Event of Default shall have occurred and be
continuing, each Transferor hereby designates the Transferee, subject to
the provisions of the applicable Intercreditor Agreements, to represent
each Transferor's interest, if any, in the Pledged Collateral in all
respects and each Transferor herewith authorizes and grants full power of
attorney to the Transferee, subject to the provisions of the applicable
Intercreditor Agreements, to perform on its behalf any and all acts
necessary to protect its interest and to realize its rights as a
Transferee, it being understood that this appointment is coupled with an
interest and is irrevocable.
4.2 In case of an Event of Default, the Transferee shall be entitled, and each
Transferor hereby irrevocably authorizes the Transferee, subject to the
provisions of the applicable Intercreditor Agreements, to exercise all
rights which each Transferor would have had if the Pledged Collateral would
not have been subject to this fiduciary transfer.
Section 5 Termination
Upon satisfaction in full of the Secured Obligations, the Transferee shall,
upon each Transferor's written request,
<PAGE>
14
promptly execute and deliver to each Transferor, at each Transferor's
expense, termination statements for all security agreements and lien
instruments filed by the Transferee against each Transferor and such
transfers and retransfers as each Transferor shall reasonably require in
order to terminate or rescind any transfer of title as meant in section 3.1
and 3.3 of this Agreement, in each case without recourse or warranty by the
Transferee. In addition to the foregoing, the security interest and
fiduciary transfer of title granted to Transferee in the Inventory
hereunder shall, to the extent, in accordance with, and in the manner
contemplated by Section 5 of the applicable Access Intercreditor Agreement,
automatically terminate.
Section 6 Representations, Warranties and Covenants
Each Transferor represents, warrants and covenants to the Transferee as
follows:
(a) Enforceability; No Filings
This Agreement has been duly executed and delivered by each Transferor
and constitutes the valid and legally binding obligation of each
Transferor enforceable against it in accordance with its terms. This
Agreement creates a valid first priority fiduciary transfer of the
Pledged Collateral. No filings, registrations or recordings are
necessary or appropriate to create, preserve and protect the fiduciary
transfer of the Pledged Collateral by each Transferor to Transferee
pursuant to this Agreement.
(b) Authority; No Conflict
<PAGE>
15
Each Transferor has the requisite corporate power, authority and legal
right to enter into this Agreement and grant the fiduciary transfer
contemplated herein and there is no law, regulation or provision
having the force of law on each Transferor, judicial order, security
right, contract, agreement or other instrument binding on each
Transferor or affecting each Transferor's properties, or any
impediment or disability which would conflict with or in any way
prevent the execution, delivery or performance by each Transferor or
the enforcement against each Transferor of this Agreement.
(c) No Consents
All authorizations, approvals, consents, permissions of or other
action by, or notice or filings with, any governmental authorities
(including exchange controls) or any other Persons, creditors,
supervisory directors and shareholders of each Transferor which are
required to be obtained, taken or made in connection with (I) the
fiduciary transfer by each Transferor of the Pledged Collateral
pursuant to this Agreement, (ii) the execution and delivery by each
Transferor of this Agreement and the performance by each Transferor of
its Secured Obligations hereunder or (iii) the exercise by Transferee
of the remedies in respect of the Pledged Collateral pursuant to this
Agreement, in each case have been duly obtained, taken or made, and
are in full force and effect.
(d) No Security Rights
<PAGE>
16
Each Transferor is as of the date hereof, and, as to the Pledged
Collateral acquired by it from time to time after the date hereof,
each Transferor will be, the owner of the Pledged Collateral having
full and unencumbered title thereto free from any and all Liens,
except Liens permitted by section 6(e) of this Agreement. This
Agreement creates a valid fiduciary transfer of the Pledged Collateral
superior and prior to the rights of all other Persons therein and
subject to (I) in the case of Pledged Collateral (other than
Inventory), no Liens other than the Liens described in Schedule 2
hereto as "Prior Liens" and (ii) in the case of Inventory, no Liens
other than the Lien granted to the Lender to secure the Lender Debt.
(e) Transfers and Other Security Rights
Except as specifically permitted under the provisions of the
Indenture, each Transferor shall not sell, pledge, convey, assign,
lease or transfer any of the Pledged Collateral to any Person and
shall not allow any Person to have an interest in any Pledged
Collateral. Each Transferor will not create or assume or permit to
exist any Lien on or against any of the Pledged Collateral except for
(I) Prior Liens, (ii) Liens granted to Transferee pursuant to this
Agreement, (iii) Liens granted to Lender with respect to Inventory,
and (iv) Liens of the type described in clauses (I) and (ii) of the
definition of Permitted Liens in the Indenture; provided, that each of
the Liens permitted by this clause (iv) of this Section 6(e) shall in
all respects be subject and subordinate in priority to the fiduciary
transfer
<PAGE>
17
granted pursuant to this Agreement except to the extent that the law
or regulation creating or authorizing such Lien provides that such
Lien must be superior to the Lien of this Agreement. Each Transferor
will defend the Pledged Collateral against all claims and demands of
all Persons at any time claiming any interest therein adverse to
Transferee or any Secured Party.
(f) Principal Place of Business; Change of Name
Each Transferor's principal place of business is located at
_______________________________________________________. All of the
Documents are located at the address set forth in the immediately
preceding sentence. Each Transferor shall neither establish a new
location for its principal place of business nor shall it change its
name nor shall it move the Documents until (I) it shall have given the
Transferee not less than forty-five (45) days prior written notice of
its intention to do so, clearly describing such new location and
providing such other information in connection therewith as the
Transferee or any Secured Party may request, and (ii) with respect to
such new location or name, each Transferor shall have taken all
actions necessary or required by any and all existing or future laws
or as the Transferee may from time to time reasonably request to
maintain the perfection and priority of the secured interest of the
Transferee in the Pledged Collateral intended to be granted hereby,
including, without limitation, obtaining waivers of landlord's or
warehouseman's liens with respect to such new location.
<PAGE>
18
(g) Location of Pledged Collateral
All Pledged Collateral (other than the Documents) held on the date
hereof by each Transferor is located at the locations shown in
Schedule 3 hereto. All Pledged Collateral now held or subsequently
acquired shall be kept at one or more locations shown in Schedule 3
hereto, or such new location as each Transferor may establish if (I)
it shall have given to the Transferee at least forty-five (45) days
prior written notice of its intention to do so, clearly describing
such new location and providing such other information in connection
therewith as the Transferee may request, and (ii) with respect to such
new location, each Transferor shall have taken all actions necessary
or required by any and all existing or future laws or as the
Transferee may from time to time reasonably request to maintain the
priority of the security interest of the Transferee in the Pledged
Collateral granted hereby, including, without limitation, obtaining
waivers of landlord's or warehouseman's liens with respect to such new
location.
(h) Pledged Collateral
All information set forth herein, including, without limitation, the
Schedules and Exhibits annexed hereto, and all information contained
in any documents, schedules and lists heretofore delivered to the
Transferee in connection with this Agreement, in each case, relating
to the Pledged Collateral is accurate and complete in all respects.
Section 7 Remedies Upon Event of Default
<PAGE>
19
7.1 Obtaining Possession of the Pledged Collateral
If an Event of Default shall have occurred and be continuing, then and in
every such case, Transferee may, but shall not be obligated to, in addition
to any other action permitted by law (and not limited in any manner to the
remedies contained in the Notes, the Indenture or any other Secured
Instrument) take one or more of the following actions, in accordance with
the terms of and at the times specified in the Indenture and/or the
applicable Intercreditor Agreements:
(I) personally, or by agents or attorney, immediately take possession of
the Pledged Collateral or any part thereof, from each Transferor or
any other Person who then has possession of any part thereof with or
without notice or process of law, and for that purpose may enter upon
each Transferor's premises where any of the Pledged Collateral is
located and remove such Pledged Collateral and use in connection with
such removal any and all services, supplies, aids and other facilities
of each Transferor;
(ii) sell, assign or otherwise liquidate, or direct each Transferor to
sell, assign or otherwise liquidate, any or all investments made in
whole or in part with the Pledged Collateral or any part thereof, and
take possession of the proceeds of any such sale, assignment or
liquidation; and
(iii) take possession of the Pledged Collateral or any part thereof, by
directing each Transferor in writing to deliver the same to Transferee
at any place or place designated by Transferee, in which event each
<PAGE>
20
Transferor shall at its own expense (x) forthwith cause the same to be
moved to the place or places so designated by Transferee and there
delivered to Transferee; (y) store and keep any Pledged Collateral so
delivered to Transferee at such place or places pending further action
by Transferee and (z) while the Pledged Collateral shall be so stored
and kept, provide such guards and maintenance services as shall be
necessary to protect the same and to preserve and maintain them in
good condition. Each Transferor's obligation to deliver the Pledged
Collateral is of the essence of this Agreement. To the extent
permitted under applicable law, upon application to a competent court,
Transferee shall be entitled to a decree requiring specific
performance by each Transferor of such obligation.
7.2 Disposition of the Pledged Collateral
Upon the occurrence of an Event of Default, Transferee may (in accordance
with the terms of and at the times specified in the Indenture and/or the
applicable Intercreditor Agreements) to the extent permitted under
applicable law, in respect of the Pledged Collateral, in addition to the
other rights and remedies provided for herein or otherwise available to it,
without notice except as specified below, sell the Pledged Collateral or
any part thereof in one or more parcels at public or private sale, at any
exchange, broker's board or at any of Transferee's offices or elsewhere,
for cash, on credit or for future delivery, and at such price or prices and
upon such other terms as Transferee may deem commercially reasonable.
Transferee may bid for and be the purchaser of any or all of the Pledged
Collateral at any such sale and shall be entitled, for the
<PAGE>
21
purpose of bidding and making settlement or payment of the purchase price
for all or any portion of the Pledged Collateral sold at such sale, to
deliver any outstanding Note or any other note evidencing the Additional
Secured Indebtedness (each, an "Additional Note") or claims for interest
thereon in lieu of cash, which Note, Additional Note or claims for interest
thereon shall be applied to the payment of such purchase price. In the
event that the amount payable in respect of the purchase price of the
Pledged Collateral purchased at any such sale shall be less than the amount
due on such Note or such Additional Note, such Note or such Additional Note
shall be returned to the Transferee after being appropriately stamped to
show partial payment. Each purchaser at any such sale shall acquire the
property sold absolutely free from any claim or right on the part of each
Transferor, and each Transferor hereby waives, to the fullest extent
permitted by law, all rights of redemption, stay or appraisal hereafter
enacted. Transferee shall not be obligated to make any sale of Pledged
Collateral regardless of notice of sale having been given. Transferee may
adjourn any public or private sale from time to time by announcement at the
time and place fixed therefor, and such sale may, without further notice,
be made at the time and place to which it was so adjourned. Each Transferor
hereby waives, to the fullest extent permitted by law, any claims against
Transferee arising by reason of the fact that the price at which any
Pledged Collateral may have been sold at such a private sale was less than
the price which might have been obtained at a public sale, even if
Transferee accepts the first offer received and does not offer such Pledged
Collateral to more than one offeree. Each Transferor agrees that, to the
extent notice of sale shall be required by law, five (5) days' notice from
<PAGE>
22
Transferee of the time and place of any public sale or of the time after
which a private sale or other intended disposition is to take place shall
be commercially reasonable notification of such matters. No notification
need be given to each Transferor if it has signed, after the occurrence of
an Event of Default, a statement renouncing or modifying any right to
notification of sale or other intended disposition.
7.3 Waiver of Claims
Except as otherwise provided herein, each Transferor hereby waives, to the
fullest extent permitted by applicable law, notice or judicial hearing in
connection with Transferee's taking possession or Transferee's disposition
of any of the Pledged Collateral, including, without limitation, any and
all prior notice and hearing for any prejudgment remedy or remedies and any
such right which each Transferor would otherwise have under law, and each
Transferor hereby further waives, to the fullest extent permitted by
applicable law: (I) all damages occasioned by such taking of possession;
(ii) all other requirements as to the time, place and terms of sale or
other requirements with respect to the enforcement of Transferee's rights
hereunder and (iii) all rights of redemption, appraisal, valuation, stay,
extension or moratorium now or hereafter in force under any applicable law.
Any sale of, or the grant of options to purchase, or any other realization
upon, any Pledged Collateral shall operate to divest all right, title,
interest, claim and demand, either at law or in equity or in accordance
with the principles of reasonableness and fairness, of each Transferor
therein and thereto, and shall be a perpetual bar both at law and in equity
as well as according to the principles of reasonableness and fairness
against each
<PAGE>
23
Transferor and against any and all Persons claiming or attempting to claim
the Pledged Collateral so sold, optioned or realized upon, or any part
thereof, from, through or under each Transferor.
7.4 Certain Sales of Pledged Collateral
Each Transferor recognizes that, by reason of certain prohibitions
contained in law, rules, regulations or orders of any foreign governmental
authority, Transferee may be compelled, with respect to any sale of all or
any part of the Pledged Collateral, to limit purchasers to those who meet
the requirements of such foreign governmental authority. Each Transferor
acknowledges that any such sales may be at prices and on terms less
favorable to Transferee than those obtainable through a public sale without
such restrictions, and, notwithstanding such circumstances, agrees that any
such restricted sale shall be deemed to have been made in a commercially
reasonable manner.
Section 8 Application of Proceeds
The proceeds received by Transferee in respect of any sale of, collection from
or other realization upon all or any part of the Pledged Collateral pursuant to
the exercise by Transferee of its remedies as a secured creditor as provided in
Section 7 hereof shall be applied, together with any other sums then held by
Transferee pursuant to this Agreement, promptly by Transferee in the manner set
forth in the Indenture and/or the applicable Intercreditor Agreements.
Section 9 Provisions Concerning All Pledged Collateral
<PAGE>
24
(a) Insurance. Each Transferor shall at all times keep the Pledged Collateral
insured in favor of Transferee, at each Transferor's own expense, against
fire, theft and all other risks to which the Pledged Collateral may be
subject, in such amounts and with such deductibles as from time to time
would be maintained by a prudent operator of businesses similar to the
business of each Transferor. Each policy or certificate with respect to
such insurance shall be endorsed, to the extent appropriate, in the manner
contemplated by Section 1.7.2 of the Mortgage encumbering the Real Property
located in the Netherlands Antilles and shall name Transferee as an
additional named insured or loss payee as its interest may appear, as
appropriate, and such policy or certificate shall be delivered to
Transferee. Each such policy shall state that it cannot be canceled without
thirty (30) days prior written notice to Transferee. At least thirty (30)
days prior to the expiration of any such policy of insurance, each
Transferor shall deliver to Transferee an extension or renewal policy or an
insurance certificate evidencing renewal or extension of such policy. If
any Transferor shall fail to insure such Pledged Collateral in the manner
contemplated by this Section or if any Transferor shall fail to so endorse
and deposit, or to extend or renew, all such insurance policies or
certificates with respect thereto, Transferee shall have the right (but
shall be under no obligation), to advance funds to procure or renew or
extend such insurance and each Transferor agrees to reimburse Transferee,
immediately upon demand therefor, for any and all
<PAGE>
25
costs and expenses thereof, with interest on all such funds from the date
advanced to the date of repayment thereof, at the rate per annum (the
"Default Rate") equal to two percent in excess of the rate then payable
under the Notes. Subject to the provisions of the applicable Intercreditor
Agreements, in case of any loss or damage to any of the Pledged Collateral,
all proceeds of insurance maintained by each Transferor shall be paid to
Transferee as Trust Moneys pursuant to Article Twelve of the Indenture and
shall be subject to retention and disbursement by Transferee in accordance
with the terms of the Indenture.
(b) Further Actions. Each Transferor shall, at its sole cost and expense, make,
execute, endorse, acknowledge, file and/or deliver to Transferee from time
to time such lists, descriptions and designations of the Pledged
Collateral, copies of warehouse receipts, receipts in the nature of
warehouse receipts, bills of lading, documents of title, vouchers, invoices
and schedules relating to the Pledged Collateral.
(c) Notation on Books and Records. Each Transferor shall place on its books and
records with respect to the Pledged Collateral a notation stating that
Transferee has a security interest therein.
<PAGE>
26
Section 10 Reasonable Care
Transferee shall be deemed to have exercised reasonable care in the custody and
preservation of the Pledged Collateral in its possession if such Pledged
Collateral is accorded treatment substantially equivalent to that which
Transferee, in its individual capacity, accords its own property, it being
understood that Transferee shall not have responsibility for taking any
necessary steps to preserve rights against any Person with respect to any
Pledged Collateral.
Section 11 Expenses
Each Transferor will immediately upon demand pay to Transferee the amount of any
and all expenses, including the reasonable fees and expenses of its counsel
(including, without limitation, any local or foreign counsel) and the allocated
costs of Transferee's internal counsel and the fees and expenses of any experts
and agents which Transferee may incur in connection with (I) the collection of
the Secured Obligations, (ii) the enforcement and administration of this
Agreement, (iii) the custody or preservation of, or the sale of, collection
from, or other realization upon, any of the Pledged Collateral, (iv) the
exercise or enforcement of any of the rights of Transferee or (v) the failure by
each Transferor to perform or observe any of the provisions hereof. All amounts
payable by each Transferor under this Section 11 shall be due immediately upon
demand, shall bear interest from the date advanced to the date of the repayment
thereof at the Default Rate, and shall be part of the Secured Obligations. Each
Transferor's obligations under this Section 11 shall survive the termination of
this Agreement and the discharge of each Transferor's other obligations
hereunder.
<PAGE>
27
Section 12 No Waiver; Cumulative Remedies
12.1 No failure on the part of Transferee to exercise, no course of dealing with
respect to, and no delay on the part of Transferee in exercising, any
right, power or remedy hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise of any such right, power or remedy
hereunder preclude any other or further exercise thereof or the exercise of
any other right, power or remedy. The remedies herein provided are
cumulative and are not exclusive of any remedies provided by law.
12.2 In the event Transferee shall have instituted any proceeding to enforce any
right, power or remedy under this Agreement by foreclosure, sale, entry or
otherwise, and such proceeding shall have been discontinued or abandoned
for any reason or shall have been determined adversely to Transferee, then
and in every such case, each Transferor and Transferee shall be restored to
their respective former positions and rights hereunder with respect to the
Pledged Collateral, and all rights, remedies and powers of Transferee shall
continue as if no such proceeding had been instituted.
Section 13 Trustee
Transferee has been appointed as trustee pursuant to the Indenture and the
Additional Lender Intercreditor Agreement, if any. The actions of Transferee
hereunder are subject to the provisions of the Indenture and/or the applicable
Intercreditor Agreements. Transferee shall have the right hereunder to make
demands, to give notices, to exercise or refrain from exercising any rights, and
to take or refrain from taking action (including,
<PAGE>
28
without limitation, the release or substitution of Pledged Collateral), in
accordance with this Agreement, the Indenture and/or the applicable Lender
Intercreditor Agreements. Transferee may resign from its position as Transferee
and a successor Transferee may be appointed in the manner provided in the
Indenture and/or the Additional Lender Intercreditor Agreements, if any. Upon
the acceptance of any appointment as Transferee by a successor Transferee, that
successor Transferee shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Transferee under this
Agreement, and the retiring Transferee shall thereupon be discharged from its
duties and obligations under this Agreement. After any retiring Transferee's
resignation, the provisions of this Agreement shall inure to its benefit as to
any actions taken or omitted to be taken by it under this Agreement while it was
Transferee.
Section 14 Transferee May Perform
If any Transferor shall fail to do any act or thing that it has covenanted to do
hereunder or if any warranty on the part of each Transferor contained herein
shall be breached, Transferee may (but shall not be obligated to) do the same or
cause it to be done or remedy any such breach, and may expend funds for such
purpose. Any and all amounts so expended by Transferee shall be paid by each
Transferor immediately after demand therefor, with interest at the Default Rate
during the period from and including the date on which such funds were so
expended to the date of repayment. Each Transferor's obligations under this
Section 14 shall survive the termination of this Agreement and the discharge of
each Transferor's other obligations under this Agreement.
<PAGE>
29
Section 15 Notices
Unless otherwise provided herein any notice or other communication herein
required or permitted to be given shall be given in the manner and at the
address set forth in the Indenture, or as to any party at such other address as
shall be designated by such party in a written notice to the other party
complying as to delivery with the terms of this Section 15. All such notices and
other communications shall be deemed to have been given when delivered in
person, or received by telecopy or telex; or one (1) Business Day after delivery
to the office of such overnight courier service; or five (5) Business Days after
deposit in the United States mail, registered or certified, with postage prepaid
and properly addressed; provided, however, that notice to Transferee shall not
be effective until received by Transferee.
Section 16 Continuing Security Interest
This Agreement shall create a continuing security interest in the Pledged
Collateral and shall (I) be binding upon each Transferor, its successors and
assigns, and (ii) inure, together with the rights and remedies of Transferee
hereunder, to the benefit of Transferee and its successors, transferees and
assigns; no other Persons (including, without limitation, any other creditor of
each Transferor) shall have any interest herein or any right or benefit with
respect hereto.
Section 17 Headings
The Section headings used in this Agreement are for convenience of reference
only and shall not affect the construction of this Agreement.
<PAGE>
30
Section 18 Severability of Provisions
Any provision of this Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof or affecting the validity or enforceability of such provision
in any other jurisdiction.
Section 19 Limitation on Interest Payable
It is the intention of the parties to conform strictly to the usury laws,
whether state or federal, that are applicable to the transaction of which this
Agreement is a part. All agreements between each Transferor and Transferee,
whether now existing or hereafter arising and whether oral or written, are
hereby expressly limited so that in no contingency or event whatsoever shall the
amount paid or agreed to be paid by each Transferor for the use, forbearance or
detention of the money to be loaned or advanced under the Indenture or any
related document, or for the payment or performance of any covenant or
obligation contained herein or in the Indenture, exceed the maximum amount
permissible under applicable usury laws. If under any circumstances whatsoever
fulfillment of any such provision, at the time performance of such provision
shall be due, shall involve exceeding the limit of validity prescribed by law,
then the obligation to be fulfilled shall be reduced to the limit of such
validity. If under any circumstances each Transferor shall have paid an amount
deemed interest by applicable law, which would exceed the highest lawful rate,
such amount that would be excessive interest under applicable usury laws shall
be applied to the reduction of the principal amount owing in respect of the
Secured Obligations and not to the payment of interest, or if
<PAGE>
31
such excessive interest exceeds the unpaid balance of principal and any other
amounts due hereunder, the excess shall be refunded to each Transferor. All sums
paid or agreed to be paid for the use, forbearance or detention of the principal
under any extension of credit or advancement of funds by Marine Midland Bank, as
trustee, shall, to the extent permitted by applicable law, and to the extent
necessary to preclude exceeding the limit of validity prescribed by law, be
amortized, prorated, allocated and spread from the date of this Agreement until
payment in full of the Secured Obligations so that the actual rate of interest
on account of such principal amounts is uniform throughout the term hereof.
Section 20 Indemnification
Each and every obligation of the Issuers to indemnify and hold harmless the
Trustee in the Indenture contained in Section 7.07 thereof is incorporated
herein mutatis mutandis as an obligation of each Transferor hereunder to
indemnify Transferee, and Marine Midland Bank, in its individual capacity, and
the officers, directors, employees, agents and affiliates thereof.
Section 21 Governing Law; Consent to Jurisdiction
This Agreement shall be governed by the laws of the Netherlands Antilles. The
competent courts of the Netherlands Antilles in Curacao shall have non-exclusive
jurisdiction.
Section 22 Execution in Counterparts
This Agreement and any amendments, waivers, consents or supplements hereto may
be executed in any number of counterparts and by different parties hereto in
separate counterparts, each of
<PAGE>
32
which when so executed and delivered shall be deemed to be an original, but all
such counterparts together shall constitute one and the same Agreement.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed on __________, 1996.
STATIA TERMINALS N.V., as Transferor
By:/s/ James G. Cameron
------------------------------------------------
Name: James G. Cameron
Title:
SABA TRUSTCOMPANY N.V., as Transferor
By:/s/ James G. Cameron
------------------------------------------------
Name: James G. Cameron
Title:
BICEN DEVELOPMENT CORPORATION N.V., as Transferor
By:/s/ James G. Cameron
------------------------------------------------
Name: James G. Cameron
Title:
STATIA LABORATORY SERVICES N.V., as Transferor
By:/s/ James G. Cameron
------------------------------------------------
Name: James G. Cameron
Title:
STATIA TUGS N.V., as Transferor
By:/s/ James G. Cameron
------------------------------------------------
Name: James G. Cameron
Title:
SEVEN SEAS STEAMSHIP COMPANY (ST. EUSTATIUS) N.V., as Transferor
By:/s/ James G. Cameron
------------------------------------------------
Name: James G. Cameron
MARINE MIDLAND BANK, as Transferee
By:/s/ Eileen M. Hughes
------------------------------------------------
Name: Eileen M. Hughes
Title: Assstant Vice President
<PAGE>
35
Schedule 1
to the
Fiduciary Transfer
of
Tangible Assets Agreement
This Amendment dated [date], is delivered pursuant to section 3 of the Agreement
referred to below. The undersigned hereby agrees that this Amendment may be
attached to the Fiduciary Transfer of Tangible Assets Agreement dated November
27, 1996 by and between [Transferor], a company incorporated under the laws of
the Netherlands Antilles, as Transferor, and Marine Midland Bank, as Transferee
(the "Agreement"; capitalized terms defined therein being used herein as therein
defined) and that the items or types of property listed on this Amendment shall
be deemed to be part of the Pledged Collateral and shall secure the Secured
Obligations as provided in the Agreement.
[Transferor]
BY:
TITLE:
Description of Location of
Pledged Collateral Pledged Collateral
<PAGE>
36
Schedule 2
to the
Fiduciary Transfer of
Tangible Assets Agreement
Prior Liens
None.
<PAGE>
37
Schedule 3
to the
Fiduciary Transfer of
Tangible Assets Agreement
Location of Pledged Collateral
Tumbledown Dick Bay
St. Eustatius, Netherland Antilles
<PAGE>
38
Exhibit I
to the
Fiduciary Transfer
of
Tangible Assets Agreement
Description of Pledged Collateral
See attached list
<PAGE>
FIDUCIARY ASSIGNMENT OF INTANGIBLE ASSETS AGREEMENT
FIDUCIARY ASSIGNMENT OF INTANGIBLE ASSETS AGREEMENT (the "Agreement"),
dated as of November 27, 1996 by and between Statia Terminals International
N.V., a company incorporated under the laws of the Netherlands Antilles, having
its corporate seat at __________________________ ("STI"), Statia Terminals
Corporation NV., a company incorporated under the laws of the Netherlands
Antilles, having its corporate seat at __________________________ ("STC"),
Statia Terminals N.V., a company incorporated under the laws of the Netherlands
Antilles, having its corporate seat at __________________________ ("Terminals"),
Saba Trustcompany N.V., a company incorporated under the laws of the Netherlands
Antilles, having its corporate seat at __________________________ ("Saba"),
Bicen Development Corporation N.V., a company incorporated under the laws of the
Netherlands Antilles, having its corporate seat at __________________________
("Bicen"), Statia Laboratory Services N.V., a company incorporated under the
laws of the Netherlands Antilles, having its corporate seat at
__________________________ ("Labs"), Seven Seas Steamship Company (St.
Eustatius) N.V., a company incorporated under the laws of the Netherlands
Antilles, having its corporate seat at __________________________ ("Seven
Seas"), Statia Tugs N.V., a company incorporated under the laws of the
Netherlands Antilles, having its corporate seat at __________________________
("Tugs") (STI, STC, Terminals, Saba, Bicen, Labs, Seven Seas and Tugs each
individually an "Assignor" and collectively the "Assignors") and Marine Midland
Bank, a New York banking corporation and trust company, having its registered
office at 140 Broadway, 16th Floor, New York, NY 10005-1180, as trustee (in such
capacity and together with any successors and assigns in such capacity, the
"Assignee") pursuant to the Indenture (as
<PAGE>
2
hereinafter defined) and the Additional Lender Intercreditor Agreement (as
defined in the Indenture), if any.
WITNESSETH:
WHEREAS, STI, Statia Terminals Canada Incorporated (together with STI
hereafter collectively referred to as the "Issuers"), the other Assignors and
certain other parties are contemporaneously with the execution and delivery of
this Agreement entering into a certain indenture dated as of November 27, 1996
(as amended, restated, supplemented or otherwise modified from time to time, the
"Indenture"), pursuant to which the Issuers are issuing 1l-3/4% first mortgage
notes due 2003 (the "First Mortgage Notes"), in the aggregate principal amount
of US$135,000,000;
WHEREAS, it is contemplated that the Issuers may, after the date hereof,
(i) issue exchange notes pursuant to the Indenture (the "Exchange Notes";
together with the First Mortgage Notes, the "Notes") and (ii) incur certain
additional indebtedness ("Additional Secured Indebtedness") in accordance with
the provisions of Section 4.04 and Section 4.14 of the Indenture which shall be
equally and ratably secured by the Pledged Collateral (as hereinafter defined);
WHEREAS, pursuant to the Indenture and the guarantee set forth in Article
Ten thereof (the "Guarantee"), each Assignor (other than STI) is jointly and
severally guaranteeing the payment and performance of all of the obligations of
the Issuers arising under or in connection with the Notes and the Indenture
<PAGE>
3
and each Assignor's obligations under such Guarantee are intended to be secured
hereunder;
WHEREAS, each Assignor is entering into this Agreement with Assignee acting
for the benefit of itself, the holders of the Notes and the holders of
Additional Secured Indebtedness (collectively the "Secured Parties") for the
purpose, among other things, of securing and providing for the payment of all
amounts of principal, premium, if any, interest, costs, charges, fees, expenses,
commissions, reimbursements, indemnities and all other amounts from time to time
due and payable by each Assignor to the Secured Parties (whether at stated
maturity, by acceleration or otherwise, including, without limitation, the
payments of interest and other amounts which would accrue and become due but for
the filing of any stay under any Bankruptcy Law (as defined in the Indenture))
under the Indenture, the Notes, the Guarantee, this Agreement, and any other
instrument governing the obligations of each Assignor with respect to the
Additional Secured Indebtedness (the "Additional Indebtedness Instrument";
together with the Indenture, the Notes, the Guarantee and this Agreement, the
"Secured Instruments"), as well as the performance and payment of all other
obligations and liabilities, now existing or hereafter arising whatsoever which
are now or at any time hereafter may be or become due, owing or payable under
any of the Secured Instruments, in any form or currency, to the Secured Parties
by each Assignor, actually or contingently, solely or jointly and/or severally
with another or others, as principal or surety, or by virtue of any current or
other account in connection with any advance, loan, credit, instrument,
guarantee or indemnity made or issued to, for or at the request of each Assignor
pursuant to any Secured Instrument and costs, for the purpose hereof including,
but not limited to, costs of
<PAGE>
4
collection of any amount due to the Secured Parties (collectively, the "Secured
Obligations");
WHEREAS, the Indenture is governed by the laws of the State of New York;
WHEREAS, each Assignor has informed the Assignee that the execution and
delivery of this Agreement and the performance of the obligations under this
Agreement is in its corporate interest and does not prejudice the rights of its
creditors.
NOW, THEREFORE, in consideration of the foregoing premises each Assignor
agrees with the Assignee as follows:
Section 1. Definitions
Capitalized terms used herein and not defined shall have the meanings assigned
to them in the Indenture. The following terms shall have the following meaning:
"Copyrights" shall mean, collectively, copyrights, whether statutory or
common law, and all applications, registrations and recordings relating to such
copyrights in the Netherlands Antilles, or in any political subdivision thereof
or in any other country, including, without limitation, the copyrights and
applications, registrations and recordings described in Schedule 3 hereto,
together with any and all (i) rights and privileges arising under applicable law
with respect to each Assignor's use of any copyrights, (ii) reissues,
extensions, continuations and renewals thereof, (iii) income, fees, royalties,
damages and payments now and hereafter due and/or payable with respect thereto,
including, without limitation, damages and payments for past or future
infringements
<PAGE>
5
thereof, (iv) rights corresponding thereto throughout the world and (v) rights
to sue for past, present and future infringements thereof.
"Goodwill" shall mean all goodwill connected with the use of, and
symbolized by, any of the Intellectual Property.
"Intellectual Property" shall mean, collectively, all Copyrights, Patents,
Trademarks and Licenses.
"Inventory" shall have the meaning ascribed to such term in the appropriate
Access Intercreditor Agreement.
"License" shall mean; collectively, all license and distribution agreements
with any other party with respect to a Patent, Trademark or Copyright, whether
each Assignor is a licensor or licensee, distributor or distributee under any
such license or distribution agreement, including, without limitation, the
license and distribution agreements listed in Schedule 3 hereto, along with any
and all (i) renewals, extensions, supplements and continuations thereof, (ii)
income, royalties, damages and payments now and hereafter due and/or payable to
each Assignor with respect thereto, including, without limitation, damages and
payments for past or future infringements or violations thereof and (iii) rights
to sue for past, present and future infringements or violations thereof.
"Patents" shall mean, collectively, all patents and all applications,
registrations and recordings relating thereto as may at any time be filed in the
Netherlands Antilles, or in any political subdivision thereof or in any other
country, including, without limitation, those patents, applications,
registrations and recordings described in Schedule 3 hereto, together with any
<PAGE>
6
and all (i) rights and privileges arising under applicable law with respect to
each Assignor's use of any patents, (ii) inventions and improvements described
and claimed therein, (iii) reissues, divisions, continuations, renewals,
extensions and continuations-in-part thereof, (iv) income, fees, royalties,
damages and payments now and hereafter due and/or payable under and with respect
thereto, including, without limitation, damages and payments for past or future
infringements thereof, (v) rights corresponding thereto throughout the world,
and (vi) rights to sue for past, present and future infringements thereof.
"Trademarks" shall mean, collectively, all trademarks (including service
marks), trademark registrations, trade styles and trade names and applications
therefor as may at any time be filed in the Netherlands Antilles, or in any
political subdivision thereof or in any other country, including, without
limitation, the trademark registrations and applications therefor listed in
Schedule 3 hereto, together with any and all (i) rights and privileges arising
under applicable law with respect to each Assignor's use of any trademarks, (ii)
reissues, continuations, extensions and renewals thereof, (iii) income, fees,
royalties, damages and payments now and hereafter due and/or payable under and
with respect thereto, including, without limitation, damages and payments for
past or future infringements thereof, (iv) all rights corresponding thereto
throughout the world and (v) rights to sue for past, present and future
infringements thereof.
Section 2. Obligations Owed to Assignee as Trustee
2.1 In order to ensure that a valid fiduciary assignment is created pursuant to
this Agreement, each Assignor hereby agrees and covenants with Assignee
that it shall (i) pay to Assignee (as and when due by each Assignor in
accordance
<PAGE>
7
with the provisions of the applicable Secured Instruments) all amounts of
money due and payable to the holders of the Notes and to the holders of the
Additional Secured Indebtedness under their respective Secured Instruments,
in order to permit Assignee to make the payments under the applicable
Secured Instrument, as and when due to the holders of the Notes and to the
holders of Additional Secured Indebtedness, and (ii) perform all of its
other obligations to the holders of the Notes and the holders of the
Additional Secured Indebtedness in accordance with their respective Secured
Instruments. The agreements, covenants and obligations of each Assignor
set forth in the immediately preceding sentence shall hereinafter be
referred to as the "Debtholder Obligations". It is the intention of the
parties that the Debtholder Obligations shall be identical and equal to,
but alternative to, the obligations of each Assignor to the holders of the
Notes and to the holders of Additional Secured Indebtedness under their
respective Secured Instruments.
2.2 Each Assignor and the Assignee agree and acknowledge that the Debtholder
Obligations are obligations and liabilities of each Assignor to the
Assignee, as trustee and paying agent, separate and independent from and
without prejudice to the liabilities which each Assignor has or may have to
the holders of the Notes and to the holders of the Additional Secured
Indebtedness, provided that the total amount due and payable under the
Debtholder Obligations shall be decreased to the extent that each Assignor
shall have paid any amounts to the Assignee, which are due, payable and
owing to any holder of the Notes and any holder of Additional Secured
Indebtedness in accordance with their respective Secured Instruments.
<PAGE>
8
2.3 In connection with the performance of the provisions of this Agreement, the
Assignee (in its capacity as Trustee) shall have the duties and shall be
entitled to the benefits, set forth in the Indenture and/or the Additional
Lender Intercreditor Agreement, if any, all to the extent permitted by
applicable law.
2.4 The relationship of the holders of the Notes, the holders of Additional
Secured Indebtedness and the Assignee are or will be, as the case may be,
governed by the Indenture and the applicable Intercreditor Agreements,
which are or will be, as the case may be, governed by and construed in
accordance with the laws of the State of New York.
Section 3. Assignment
3.1 As security for the payment and performance of the Secured. Obligations,
each Assignor hereby assigns and, in the case of Pledged Collateral
hereafter arising or acquired, agrees to assign by way of fiduciary
assignment (fiduciaire cessie) to the Assignee for the benefit of the
Secured Parties, who accepts such assignment from each Assignor (and, to
the extent the laws of the State of New York are applicable to the
creation, validity or perfection of the security interest in the items or
types of Pledged Collateral described in clause (v) of this Section 3.1,
Assignor hereby assigns, transfers and grants to Assignee (for its benefit
and the benefit of the Secured Parties) a continuing security interest in
and pledge of) all of the right, title and interest of each Assignor in, to
and under the following property, whether now existing or hereafter arising
or acquired ("schuidvorderingen op naam en andere
<PAGE>
9
onlichamelijke zaken") (collectively, the "Pledged Collateral"):
(i) all general intangibles and contract rights of every kind and nature
relating to any item or type of Collateral (other than Inventory and
Accounts (as hereinafter defined) in respect of which Assignee has
been granted a security right under the Security Documents executed
and delivered substantially in the form of Exhibits G, I-1 and K-1
to the Indenture (such Collateral, the "Other Collateral") whether
or not contained in a tangible asset (including, without limitation,
any and all documents relating to any item or type of Other
Collateral including, without limitation, any and all lists, books,
records, ledgers, printouts, computer programs, computer disks or
tape files, computer runs and other computer prepared information,
files (whether in printed form or stored electronically), tapes and
other papers or materials containing information relating to any
item or type of Other Collateral), all of the above including,
without limitation, any and all rights in, to and under all
throughput, storage, blending and/or supply contracts, any and all
goodwill, descriptions, name plates, claims, causes of action,
catalogs, confidential information, consulting agreements,
engineering contracts, and such other assets which relate to the
goodwill of the business of each Assignor and rights to refund or
indemnification to the extent the foregoing relate to any item or
type of Other Collateral, deposits and deposit accounts, letters of
credit, documents, instruments, chattel paper, bankers' acceptances
and guarantees, and
<PAGE>
10
income tax refunds to the extent relating to any item or type of
Other Collateral, claims for tax or other refunds against any
(federal) government or province, or any agency or authority or
other subdivision thereof relating to any item or type of Other
Collateral, corporate or other business records relating to any item
or type of Other Collateral and all reserves, deferred payments and
claims of every kind or character relating thereto, any and all
permits, licenses, franchises, certificates, consents, approvals and
authorizations (however characterized) issued or in any way
furnished, whether necessary or not for the operation and use of the
Mortgaged Property (as defined in the Mortgage encumbering the Real
Property located in the Netherlands Antilles) including, without
limitation, building permits, articles of occupancy, environmental
certificates, industrial permits or licenses and certificates of
operation (collectively, the "Contract Rights");
(ii) any and all of each Assignor's now existing or hereafter arising
rights, title and interest in, to and under that certain amended and
restated stock purchase and sale agreement (the "Stock Purchase
Agreement") dated as of November 4, 1996, between Statia Terminals
Group N.V., STC, Statia Terminals Delaware, Inc., Statia Delaware
Holdco II, Inc. Statia Terminals Canada Incorporated, Praxair, CBI
Investments, Inc. and Statia Terminals, Inc. and all documents,
agreements and other instruments executed and/or delivered in
connection therewith or relating thereto (such documents, agreements
and other
<PAGE>
11
instruments, together with the Stock Purchase Agreement, the
"Acquisition Documents") including, without limitation (i) all
rights and remedies relating to monetary damages, including
indemnification rights and remedies and claims for damages or other
relief pursuant to or in respect of the Acquisition Documents and
(ii) all rights and remedies relating to monetary damages, including
indemnification rights and remedies and claims for monetary damages
in respect of the agreements, documents and instruments referred to
in the Acquisition Documents or related thereto;
(iii) any and all Intellectual Property and Goodwill;
(iv) all accounts (including, without limitation, all rights of each
Assignor to payment for inventory sold or leased or for services
rendered, which are not evidenced by instruments or chattel paper
and whether or not earned by performance) chattel paper, documents,
instruments and other forms of payment, in each case, relating to or
evidencing the payment of money arising out of the sale, lease or
other disposition of inventory or rendition of services in the
ordinary course of business; all monies and securities to the extent
relating to the foregoing and the proceeds thereof, now or hereafter
held or received or held by, or in transit to, Congress Financial
Corporation ("Lender") or Assignee or any of their respective
affiliates or participants, whether for safekeeping, pledge,
custody, transmission, collection or otherwise; deposits (general or
special) and balances to the extent relating to the
<PAGE>
12
foregoing; all right, title and interest in, to and in respect of
all goods relating to, or which by sale have resulted in any of the
foregoing, including, without limitation, all goods described in
invoices, documents, contracts or instruments with respect to, or
otherwise representing or evidencing, any of same, including,
without limitation, all returned, reclaimed or repossessed goods,
all right, title and interest, and all enforcement and other rights,
remedies and security and liens, in, to and in respect of any of the
foregoing, including, without limitation, rights of stoppage in
transit, replevin, repossession, sequestration and reclamation and
other rights and remedies of an unpaid vendor, lienor or secured
party, guarantees, or other contracts of suretyship with respect
thereto, or deposits or other security for the obligation of any
account debtor, credit and other insurance to the extent relating to
the foregoing; to proceeds of all the foregoing; and all ledgers,
books of accounts, records, tapes, cards, computer programs,
computer disks or tapes, computer printouts, computer runs and other
computer-prepared information to the extent relating to the
foregoing (collectively, "Accounts"), and all contracts, contract
rights, licenses and general intangibles to the extent relating to
the Accounts and the Inventory, including, without limitation,
contract rights which evidence or support Accounts, causes of
actions or claims arising out of Accounts or with respect to
inventory, agreements or arrangements with sales agents,
distributors or the like and/or consignees, warehouses or other
third persons in possession of Inventory, deposit accounts,
<PAGE>
13
letters of credit, documents which evidence rights to Inventory,
instruments (relating to Accounts and Inventory), guaranty or
warranty claims with respect to Accounts or Inventory, and the
proceeds of all of the foregoing (collectively, "Lender
Intangibles"); provided, however, that the fiduciary assignment of
Accounts and Lender Intangibles contemplated under this Section
3.l(iv) is subject to, conditioned and shall become immediately
effective (without any act or delivery by any Person) upon, the
payment and satisfaction in full or other termination of the Lender
Debt (as defined in the appropriate Access Intercreditor Agreement)
and/or any other release by Lender; provided, further that in the
event the Assignors shall at any time, subsequent to the termination
and satisfaction of the Lender Debt, incur Indebtedness of the type
permitted by, and in accordance with the provisions of clause (i) of
Section 4.04 of the Indenture (the "Permitted Revolving
Indebtedness"), the parties hereto intend that a valid fiduciary
assignment shall be granted to the holder of the Permitted Revolving
Indebtedness and that upon the incurrence of such Indebtedness and
the execution and delivery by the applicable Assignors and the
holder of such Permitted Revolving Indebtedness of the documentation
evidencing same, the fiduciary assignment of Accounts and Lender
Intangibles granted to Assignee hereunder shall be deemed to have
been automatically terminated in order that the applicable Assignors
may grant a valid fiduciary assignment of Accounts and Lender
Intangibles to the holder of such Permitted Revolving Indebtedness;
provided, further that upon the payment
<PAGE>
14
and satisfaction in full or other termination of the Permitted
Revolving Indebtedness and/or any other release by the holder of
such Indebtedness, the fiduciary assignment of Accounts and Lender
Intangibles granted hereunder to Assignee shall, once again, become
immediately effective (it being understood, however, that the
Assignors shall execute and deliver any and all documents necessary
to effect the foregoing provisions of this Section 3.1(iv));
(v) the Collateral Account established and maintained pursuant to the
Indenture and all funds from time to time on deposit therein, all
investments of such funds (including, without limitation, Financial
Instruments) and all certificates and instruments from time to time
representing or evidencing such investments, all notes, certificates
of deposit, checks and other instruments from time to time hereafter
delivered to or otherwise possessed by Trustee for or on behalf of
Assignor in substitution for, or in addition to, any or all of the
Pledged Collateral or Other Collateral, and all interest, dividends,
cash, instruments and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange for
any or all of the time constituting Pledged Collateral or Other
Collateral;
(vi) all proceeds of any and all of the foregoing (other than Accounts
and Lender Intangibles).
3.2 The Pledged Collateral existing in writing or otherwise at the time of
execution of this Agreement is described or
<PAGE>
15
listed in Schedule 1 attached hereto so as to ensure that the assigned
Pledged Collateral will be sufficiently identifiable. It is the intention
of the parties hereto that Schedule 1 sets forth all material items of
Pledged Collateral herein and shall in no way whatsoever be construed to be
a complete list or to limit or otherwise prejudice the rights of Assignee
pursuant to this Agreement and any Pledged Collateral omitted therefrom
shall not be construed as an exclusion of such Pledged Collateral from the
fiduciary assignment arising from this Agreement.
3.3 It is the intention of the parties hereto that this Agreement grant to the
Assignee a fiduciary assignment of all of each Assignor's right, title and
interest in each and every item or type of Pledged Collateral currently
owned or held by each Assignor and acquired or obtained after the date
hereof thereby. The fiduciary assignment of rights, title and interest in
the Pledged Collateral acquired or obtained hereafter shall be perfected
upon the coming into existence of the legal relationship on which such
Pledged Collateral is based ("ontstaan van de rechtsverhouding waarin de
vordering haar onmiddellijke grondslag vindt"). Each Assignor shall (i)
immediately after obtaining or acquiring any item or type of Pledged
Collateral having a fair market value in excess of US$50,000 and (ii) no
later than the fifth Business Day following the end of each calendar month
deliver to Assignee an amendment to this Agreement, duly executed by each
Assignor, substantially in the form of Schedule 2 attached hereto (each an
"Amendment") (x) identifying each item or type of Pledged Collateral
acquired or obtained after the date hereof or after the date of the
immediately preceding Amendment, as the case may be, and (y) confirming the
fiduciary assignment granted
<PAGE>
16
hereunder in respect of such after-acquired Pledged Collateral. Each
Assignor hereby authorizes Assignee to attach each Amendment to this
Agreement and agrees that all Pledged Collateral listed on each Amendment
delivered to Assignee shall for all purposes hereunder be considered
Pledged Collateral from and after the date of such Amendment. A copy of any
such Pledged Collateral acquired or obtained hereafter shall be delivered
to Assignee together with each revised Schedule 2 delivered as contemplated
by this Section 3.3.
3.4 Anything to the contrary contained herein notwithstanding, by accepting the
fiduciary assignment arising from this Agreement, Assignee shall not be
deemed to be obligated to perform any of the covenants, conditions or
provisions contained in the Pledged Collateral or to make any payment
thereunder and Assignee shall have no liability under any Pledged
Collateral, and Each Assignor shall remain solely liable to perform all the
obligations and make all payments under the Pledged Collateral.
3.5 Further Assurances
Each Assignor agrees that at any time and from time to time (including,
without limitation, in connection with any amendment, restatement,
supplement or modification of the Indenture) at the sole cost and expenses
of such Assignor, such Assignor shall promptly execute and deliver all
further instruments and documents, including, without limitation,
supplemental or additional fiduciary assignment agreements, and take all
further actions that may be necessary or required by any and all existing
or future laws or that Assignee may from time to time reasonably request,
in order to protect the validity and priority of the fiduciary
<PAGE>
17
assignment granted or purported to be granted hereby or to enable Assignee
to exercise and enforce its rights and remedies hereunder with respect to
any Pledged Collateral.
3.6 Termination
If at any time any Assignor has paid and performed all of the Secured
Obligations, Assignee will (in accordance with the provisions of the
Indenture and at the request and cost of such Assignor) to the extent
required to terminate the fiduciary assignment created by this Agreement
reassign its right, title and interest in and to the Pledged Collateral to
the such Assignor or as such Assignor may direct pursuant to an instrument
of assignment or reconveyance in form acceptable to Assignee, which
instrument shall not contain any recourse or warranty by Assignee. In
addition to the foregoing, the security interest and fiduciary assignment
of title granted to Assignee in the Accounts and Lender Intangibles
hereunder shall, to the extent, in accordance with, and in the manner
contemplated by Section 5 of the applicable Access Intercreditor Agreement,
automatically terminate.
Section 4. Covenants
Special Provisions relating to Intellectual Property
4.1 Except in the ordinary course of business consistent with prudent business
practice, and as may also otherwise be specified in Section 11.03 of the
Indenture, such Assignor shall not abandon any right to file an application
relating to any Intellectual Property, without the prior written consent of
Assignee.
<PAGE>
18
4.2 Each Assignor shall not license the Intellectual Property or any portion
thereof, or amend or permit the amendment of any of the Licenses in either
case in a manner that adversely affects the right to receive any material
amount of payments thereunder, or, except as otherwise permitted under
Section 11.03 of the Indenture, in any manner adverse to the interests of
Assignee in the Intellectual Property, without the prior written consent of
Assignee.
4.3 In addition to the other rights and remedies provided for herein or
otherwise available to it, Assignee may, in accordance with the terms of,
and at the times specified, if any, in the Indenture, license or sublicense
(whether general, special or otherwise, and whether on an exclusive or non-
exclusive basis) all or any portion of the Intellectual Property throughout
the world for a term or terms, on such conditions and in such manner as
Assignee shall determine. Upon request by Assignee, such Assignor shall
execute and deliver to Assignee any powers of attorney, in form and
substance satisfactory to Assignee, for the implementation of any lease,
assignment, license, sublicense, grant of option, sale or other disposition
of any Intellectual Property.
Special Provisions Relating to Acquisition Documents
4.4 Each Assignor shall perform and comply with the terms and conditions of all
Acquisition Documents. Each Assignor shall not without the consent of
Assignee (i) cancel or terminate any of the Acquisition Documents or
consent to or accept any cancellation or termination thereof, (ii) amend,
supplement or otherwise modify any of the Acquisition Documents (in each
case in effect on the date hereof), (iii) waive any default under or breach
of any of the Acquisition Documents
<PAGE>
19
or waive, fail to enforce, forgive or release any right, interest or
entitlement of any kind, howsoever arising, under or in respect of such
Acquisition Documents or, vary or agree to the variation of any of the
provisions of such Acquisition Documents or (iv) petition, request or take
any other legal or administrative action which seeks, or may be expected,
to rescind, terminate or suspend, any of the Acquisition Documents or amend
or modify any thereof. Each Assignor shall notify Assignee in the event it
receives any notice or communication with respect to the Acquisition
Documents including, without limitation, notices of default, and shall
forward promptly copies of any such notices or communications to Assignee.
Special Provisions Concerning Accounts
4.5 As of the time when each of its Accounts arises, such Assignor shall be
deemed to have represented and warranted that, to the best of such
Assignor's knowledge, such Accounts and all records, papers and documents
relating thereto (i) represent the legal, valid and binding obligation of
the account debtor arising out of the performance of labor or services or
the sale or lease and delivery of the merchandise listed therein, or both,
(ii) constitute and evidence true and valid obligations, subject to
customary set-offs, rights of return, deductions and discounts, and (iii)
are in compliance and conform in all respects with all applicable laws of
any relevant foreign jurisdiction.
4.6 Each Assignor shall keep and maintain at its own cost and expense complete
records of each Account for at least three (3) years from the date on which
such Account comes into existence, including, without limitation, records
of all
<PAGE>
20
payments received, all credits granted thereon, all merchandise returned
and all other documentation relating thereto, and each Assignor shall make
the same available to Assignee for inspection (any inspection to be at such
Assignor's cost and expense) at any and all times upon demand.
4.7 Each Assignor shall not rescind or cancel any indebtedness evidence by any
Account or modify any term thereof or make any adjustment with respect
thereto, or extend or renew the same, or compromise or settle any dispute,
claim, suit or legal proceeding relating thereto, or sell any Account or
interest therein, except in accordance with sound commercial practices and
consistent with each Assignor's historical practices with respect to
Accounts.
4.8 Each Assignor shall take all commercially reasonable actions to cause to be
collected from the account debtor of each of the Accounts, as and when due
(including, without limitation, Accounts that are delinquent, such Accounts
to be collected in accordance with generally accepted and lawful commercial
collection procedures), any and all amounts owing under or on account of
such Account, and apply forthwith upon receipt thereof all such amounts as
are so collected to the outstanding balance of such Account. The cost and
expenses (including, without limitation, attorneys' fees) of collection,
whether incurred by such Assignor or Assignee (to the extent permitted to
be incurred by Assignee in accordance with the terms of the applicable
Access Intercreditor Agreement for so long as the applicable Access
Intercreditor Agreement is in effect) shall be paid by such Assignor.
<PAGE>
21
Provisions Relating to Collateral Account
4.9 All Trust Moneys received by the Assignee shall be deposited, held, applied
and/or disbursed by the Assignee in accordance with the provisions of
Article Twelve of the Indenture.
Section 5. Representations and Warranties
Each Assignor represents, warrants and covenants to the Assignee that:
(a) Enforceability; No Filings
This Agreement has been duly authorized, executed and delivered by
each Assignor and constitutes the valid and legally binding obligation
of each Assignor enforceable against it in accordance with its terms.
This Agreement creates a valid fiduciary assignment of the Pledged
Collateral. No filings, registrations or recordings are necessary or
appropriate to create, preserve and protect the fiduciary assignment
of the Pledged Collateral by each Assignor to Assignee pursuant to
this Agreement.
(b) Authority; No Conflict
Each Assignor has the requisite corporate power, authority and legal
right to enter into this Agreement and grant the fiduciary assignment
contemplated herein and there is no law, regulation or provision
having the force of law on each Assignor, judicial order, security
right, contract, agreement or other instrument binding on each
Assignor or affecting each Assignor's properties, or any impediment or
disability which would conflict
<PAGE>
22
with or in any way prevent the execution, delivery or performance by
each Assignor or the enforcement against each Assignor of this
Agreement.
(c) No Consents
All authorizations, approvals, consents, permissions of or other
action by, or notice or filings with, any governmental authorities
(including exchange controls) or any other Persons, creditors,
supervisory directors and shareholders of each Assignor which are
required to be obtained, taken or made in connection with (i) the
fiduciary assignment by each Assignor of the Pledged Collateral
pursuant to this Agreement, (ii) the execution and delivery by each
Assignor of this Agreement and the performance by each Assignor of its
obligations hereunder or (iii) the exercise by Assignee of the
remedies in respect of the Pledged Collateral pursuant to this
Agreement, in each case, have been duly obtained, taken or made and
are in full force and effect.
(d) No Security Rights
Each Assignor is as of the date hereof, and, as to the Pledged
Collateral acquired by it from time to time after the date hereof,
each Assignor will be, the owner of the Pledged Collateral having full
and unencumbered title thereto free from any and all Liens, except
Liens permitted by section 5(e) of this Agreement. This Agreement
creates a valid fiduciary assignment of the Pledged Collateral
superior and prior to the rights of all other Persons therein, subject
to (i) in the case of Pledged Collateral (other than Accounts and
Lender Intangibles), no
<PAGE>
23
Liens other than the Liens described in Schedule 4 hereto as "Prior
Liens" and (ii) in the case of Accounts and Lender Intangibles, no
Liens other than the Liens granted to Lender to secure the Lender
Debt.
(e) Transfers and Other Security Rights
Except as specifically permitted under the provisions of the
Indenture, each Assignor shall not sell, pledge, convey, assign, lease
or transfer any Pledged Collateral to any Person and shall not allow
any Person to have an interest in any Pledged Collateral.
No Assignor will create or assume or permit to exist any Lien on or
against any of the Pledged Collateral except for (i) Prior Liens, (ii)
Liens granted to Assignee pursuant to this Agreement (iii) Liens
granted to Lender with respect to Accounts and Lender Intangibles and
(iv) Liens of the type described in clauses (i) and (ii) of the
definition of Permitted Liens in the Indenture; provided, that each of
the Liens permitted by this clause (iv) of this Section 5(e) shall in
all respects be subject and subordinate in priority to the fiduciary
assignment granted pursuant to this Agreement except to the extent
that the law or regulation creating or authorizing such Lien provides
that such Lien must be superior to the Lien of this Agreement. Each
Assignor will defend the Pledged Collateral against all claims and
demands of all Persons at any time claiming any interest therein
adverse to Assignee.
(f) Principal Place of Business; Change of Name
<PAGE>
24
Each Assignor's principal place of business is located at the
addresses specified in Schedule 5. All of the documents, books and
records evidencing or relating to any item or type of Pledged
Collateral are located at the address set forth in the immediately
preceding sentence. No Assignor shall establish a new location for its
principal place of business nor shall it change its name until (i) it
shall have given the Assignee not less than forty-five (45) days prior
written notice of its intention to do so, clearly describing such new
location and providing such other information in connection therewith
as the Assignee may request, and (ii) with respect to such new
location or name, such Assignor shall have taken all actions necessary
or required by any and all existing or future laws or as the Assignee
may from time to time reasonably request to maintain the perfection
and priority of the secured interest of the Assignee in the Pledged
Collateral intended to be granted hereby, including, without
limitation, obtaining waivers of landlord's or warehouseman's liens
with respect to such new location.
(g) Pledged Collateral
All information set forth herein, including, without limitation, the
Schedules annexed hereto, and all information contained in any
documents, schedules and lists heretofore delivered to the Assignee in
connection with this Agreement, in each case, relating to the Pledged
Collateral is accurate and complete in all respects.
<PAGE>
25
Section 6. Remedies upon Event of Default
6.1 If an Event of Default shall have occurred and be continuing, each Assignor
hereby designates the Assignee to represent such Assignor's interest in the
Pledged Collateral in all respects and each Assignor herewith authorizes
and, to the extent necessary, grants full power of attorney to the
Assignee, in accordance with the terms and at the times specified in the
Indenture and/or the applicable Intercreditor Agreements, to perform on its
behalf any and all acts necessary to protect its interest and to realize
its rights as a Assignee, it being understood that this appointment is
coupled with an interest and is irrevocable.
6.2 If an Event of Default shall have occurred and be continuing, then and in
every such case, Assignee may, but shall not be obligated to, in addition
to any other action permitted by law (and not limited in any manner to the
remedies contained in the Notes, the Indenture or any other Secured
Instrument) take one or more of the following actions, in accordance with
the terms of, and at the times, if any, specified in the Indenture and/or
the applicable Intercreditor Agreements:
(i) the Assignee shall be authorized to notify (betekenen) the debtors
or any other third-party concerned (the "Debtors") of the fiduciary
assignment of the Pledged Collateral;
(ii) upon notification of the Debtors of the fiduciary assignment of the
Pledged Collateral pursuant to section 6.2 (i), the Assignee shall
have the sole right, to the exclusion of each Assignor, to (i)
<PAGE>
26
demand payment or other performance from the notified Debtor of the
amounts due under the Pledged Collateral which have become due and
payable and (ii) receive payment of such payments under the Pledged
Collateral; and
(iii) following notification of the Debtors, the Assignee may without any
further notice exercise all remedies available to the fullest extent
permitted under Netherlands Antilles law.
6.3 Each Assignor herewith agrees with the Assignee that the Assignee shall at
all times have access to and the right to receive copies of all documents
and records relating to the Pledged Collateral, including, but not limited
to:
(i) books, records, ledger cards and invoices;
(ii) evidences of the filing of security agreements, lien instruments and
other statements, if any, and the registration of other instruments
in connection with any of the foregoing and amendments thereto,
notices to other creditors or secured parties, and certificates from
filing or other registration officers; and
(iii) credit information, reports and memoranda.
6.4 Disposition of the Pledged Collateral
Upon the occurrence of an Event of Default, Assignee may, (in accordance
with the terms of and at the times specified in the Indenture and/or the
applicable Intercreditor Agreements) to the extent permitted under
applicable law, in respect of the Pledged Collateral, in addition to the
other rights and remedies provided for
<PAGE>
27
herein or otherwise available to it, without notice except as specified
below, sell the Pledged Collateral or any part thereof in one or more
parcels at public or private sale, at any exchange, broker's board or at
any of Assignee's offices or elsewhere, for cash, on credit or for future
delivery, and at such price or prices and upon such other terms as
Assignee may deem commercially reasonable. Assignee may bid for and be the
purchaser of any or all of the Pledged Collateral at any such sale and
shall be entitled, for the purpose of bidding and making settlement or
payment of the purchase price for all or any portion of the Pledged
Collateral sold at such sale, to deliver any outstanding Note or any other
note evidencing the Additional Secured Indebtedness (each, an "Additional
Note") or claims for interest thereon in lieu of cash, which Note,
Additional Note or claims for interest thereon shall be applied to the
payment of such purchase price. In the event that the amount payable in
respect of the purchase price of the Pledged Collateral purchased at any
such sale shall be less than the amount due on such Note or such Additional
Note, such Note or such Additional Note shall be returned to the Assignee
after being appropriately stamped to show partial payment. Each purchaser
at any such sale shall acquire the property sold absolutely free from any
claim or right on the part of each Assignor, and each Assignor hereby
waives, to the fullest extent permitted by law, all rights of redemption,
stay or appraisal hereafter enacted. Assignee shall not be obligated to
make any sale of Pledged Collateral regardless of notice of sale having
been given. Assignee may adjourn any public or private sale from time to
time by announcement at the time and place fixed therefor, and such sale
may, without further notice, be made at the time
<PAGE>
28
and place to which it was so adjourned. Each Assignor hereby waives, to
the fullest extent permitted by law, any claims against Assignee arising by
reason of the fact that the price at which any Pledged Collateral may have
been sold at such a private sale was less than the price which might have
been obtained at a public sale, even if Assignee accepts the first offer
received and does not offer such Pledged Collateral to more than one
offeree. Each Assignor agrees that, to the extent notice of sale shall be
required by law, five (5) days' notice from Assignee of the time and place
of any public sale or of the time after which a private sale or other
intended disposition is to take place shall be commercially reasonable
notification of such matters. No notification need be given to any
Assignor if it has signed, after the occurrence of an Event of Default, a
statement renouncing or modifying any right to notification of sale or
other intended disposition.
6.5 Waiver of Claims
Except as otherwise provided herein, each Assignor hereby waives, to the
fullest extent permitted by applicable law, notice or judicial hearing in
connection with Assignee's taking possession or Assignee's disposition of
any of the Pledged Collateral, including, without limitation, any and all
prior notice and hearing for any prejudgment remedy or remedies and any
such right which each Assignor would otherwise have under applicable law,
and each Assignor hereby further waives, to the fullest extent permitted by
applicable law: (i) all damages occasioned by such taking of possession;
(ii) all other requirements as to the time, place and terms of sale or
other requirements with respect to the enforcement of Assignee's rights
hereunder and
<PAGE>
29
(iii) all rights of redemption, appraisal, valuation, stay, extension or
moratorium now or hereafter in force under any applicable law. Any sale
of, or the grant of options to purchase, or any other realization upon, any
Pledged Collateral shall operate to divest all right, title, interest,
claim and demand, either at law or in equity or in accordance with the
principles of reasonableness and fairness, of each Assignor therein and
thereto, and shall be a perpetual bar both at law and in equity as well as
according to the principles of reasonableness and fairness against each
Assignor and against any and all Persons claiming or attempting to claim
the Pledged Collateral so sold, optioned or realized upon, or any part
thereof, from, through or under each Assignor.
6.6 Certain Sales of Pledged Collateral
Each Assignor recognizes that, by reason of certain prohibitions contained
in law, rules, regulations or orders of any governmental authority,
Assignee may be compelled, with respect to any sale of all or any part of
the Pledged Collateral, to limit purchasers to those who meet the
requirements of such governmental authority. Each Assignor acknowledges
that any such sales may be at prices and on terms less favorable to
Assignee than those obtainable through a public sale without such
restrictions, and, notwithstanding such circumstances, agrees that any such
restricted sale shall be deemed to have been made in a commercially
reasonable manner.
Section 7. Application of Proceeds
<PAGE>
30
The proceeds received by Assignee in respect of any sale of, collection from or
other realization upon all or any part of the Pledged Collateral pursuant to the
exercise by Assignee of its remedies as a secured creditor as provided in
Section 6 hereof shall be applied, together with any other sums then held by
Assignee pursuant to this Agreement, promptly by Assignee in the manner set
forth in the Indenture and/or the applicable Intercreditor Agreements.
Section 8. Provisions Concerning All Pledged Collateral
8.1 Insurance. Each Assignor shall at all times keep the Pledged Collateral
insured in favor of Assignee, at each Assignor's own expense, against fire,
theft and all other risks to which the Pledged Collateral may be subject,
in such amounts and with such deductibles as from time to time would be
maintained by a prudent operator of businesses similar to the business of
each Assignor. Each policy or certificate with respect to such insurance
shall be endorsed, to the extent appropriate, in the manner contemplated by
Section 1.7.2 of the Mortgage encumbering the Real Property located in the
Netherlands Antilles and shall name Assignee as an additional named insured
or loss payee as its interest may appear, as appropriate and such policy or
certificate shall be delivered to Assignee. Each such policy shall state
that it cannot be cancelled without thirty (30) days prior written notice
to Assignee. At least thirty (30) days prior to the expiration of any such
policy of insurance, each Assignor shall deliver to Assignee an extension
or renewal policy or an insurance certificate evidencing renewal or
extension of such policy. If any Assignor shall fail to insure such
Pledged Collateral in the manner contemplated by the Section or if
<PAGE>
31
such Assignor shall fail to so endorse and deposit, or to extend or renew,
all such insurance policies or certificates- with respect thereto, Assignee
shall have the right (but shall be under no obligation), to advance funds
to procure or renew or extend such insurance and such Assignor agrees to
reimburse Assignee, immediately upon demand therefor, for any and all costs
and expenses thereof, with interest on all such funds from the date
advanced to the date of repayment thereof at the rate per annum (the
"Default Rate") equal to two percent in excess of the rate then payable
under the Notes. Subject to the provisions of the applicable Intercreditor
Agreements, in case of any loss or damage to any of the Pledged Collateral,
all proceeds of insurance maintained by each Assignor shall be paid to
Assignee as Trust Moneys pursuant to Article Twelve of the Indenture and
shall be subject to retention and disbursement by Assignee in accordance
with the terms of the Indenture.
8.2 Further Actions Each Assignor shall, at its sole cost and expense, make,
execute, endorse, acknowledge, file and/or deliver to Assignee from time to
time such lists, descriptions and designations of the Pledged Collateral,
copies of warehouse receipts, receipts in the nature of warehouse receipts,
bills of lading, documents of title, vouchers, invoices and schedules
relating to the Pledged Collateral.
8.3 Notation on Books and Records. Each Assignor shall place on its books and
records with respect to the Pledged Collateral a notation stating that
Assignee has a security interest therein.
<PAGE>
32
Section 9. Reasonable Care
Assignee shall be deemed to have exercised reasonable care in the custody and
preservation of the Pledged Collateral in its possession if such Pledged
Collateral is accorded treatment substantially equivalent to that which
Assignee, in its individual capacity, accords its own property, it being
understood that Assignee shall not have responsibility for taking any necessary
steps to preserve rights against any Person with respect to any Pledged
Collateral.
Section 10. Expenses
Each Assignor will immediately upon demand pay to Assignee the amount of any and
all expenses, including the reasonable fees and expenses of its counsel
(including, without limitation, any local or foreign counsel) and the allocated
costs of Assignee's internal counsel and the fees and expenses of any experts
and agents which Assignee may incur in connection with (i) the collection of the
Secured Obligations, (ii) the enforcement and administration of this Agreement,
(iii) the custody or preservation of, or the sale of, collection from, or other
realization upon, any of the Pledged Collateral, (iv) the exercise or
enforcement of any of the rights of Assignee or (v) the failure by any Assignor
to perform or observe any of the provisions hereof. All amounts payable by Each
Assignor under this Section 10 shall be due immediately upon demand, shall bear
interest from the date advanced to the date of repayment thereof at the Default
Rate, and shall be part of the Secured Obligations. Each Assignor's obligations
under this Section 10 shall survive the termination of this Agreement and the
discharge of each Assignor's other obligations hereunder.
<PAGE>
33
Section 11. No Waiver; Cumulative Remedies
11.1 No failure on the part of Assignee to exercise, no course of dealing with
respect to, and no delay on the part of Assignee in exercising, any right,
power or remedy hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any such right, power or remedy hereunder
preclude any other or further exercise thereof or the exercise of any other
right, power or remedy. The remedies herein provided are cumulative and
are not exclusive of any remedies provided by law.
11.2 In the event Assignee shall have instituted any proceeding to enforce any
right, power or remedy under this Agreement by foreclosure, collection,
sale, entry or otherwise, and such proceeding shall have been discontinued
or abandoned for any reason or shall have been determined adversely to
Assignee, then and in every such case, each Assignor and Assignee shall be
restored to their respective former positions and rights hereunder with
respect to the Pledged Collateral, and all rights, remedies and powers of
Assignee shall continue as if no such proceeding had been instituted.
Section 12. Trustee
Assignee has been appointed as trustee pursuant to the Indenture and the
Additional Lender Intercreditor Agreement, if any. The actions of Assignee
hereunder are subject to the provisions of the Indenture and/or the applicable
Intercreditor Agreements. Assignee shall have the right hereunder to make
demands, to give notices, to exercise or refrain from exercising any rights, and
to take or refrain from taking action (including, without
<PAGE>
34
limitation, the release or substitution of Pledged Collateral), in accordance
with this Agreement, the Indenture and/or the applicable Intercreditor
Agreements. Assignee may resign from its position as Assignee and a successor
Assignee may be appointed in the manner provided in the Indenture and/or the
Additional Lender Intercreditor Agreement, if any. Upon the acceptance of any
appointment as Assignee by a successor Assignee, that successor Assignee shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Assignee under this Agreement, and the retiring
Assignee shall thereupon be discharged from its duties and obligations under
this Agreement. After any retiring Assignee's resignation, the provisions of
this Agreement shall inure to its benefit as to any actions taken or omitted to
be taken by it under this Agreement while it was Assignee.
Section 13. Assignee May Perform
If any Assignor shall fail to do any act or thing that it has covenanted to do
hereunder or if any warranty on the part of any Assignor contained herein shall
be breached, Assignee may (but shall not be obligated to) do the same or cause
it to be done or remedy any such breach, and may expend funds for such purpose.
Any and all amounts so expended by Assignee shall be paid by such Assignor
immediately after demand therefor, with interest at the Default Rate during the
period from and including the date on which such funds were so expended to the
date of repayment. Each Assignor's obligations under this Section 13 shall
survive the termination of this Agreement and the discharge of each Assignor's
other obligations under this Agreement.
<PAGE>
35
Section 14. Notices
Unless otherwise provided herein any notice or other communication herein
required or permitted to be given shall be given in the manner and at the
address set forth in the Indenture, or as to any party at such other address as
shall be designated by such party in a written notice to the other party
complying as to delivery with the terms of this Section 14. All such notices
and other communications shall be deemed to have been given when delivered in
person, or received by telecopy or telex; or one (1) Business Day after delivery
to the office of such overnight courier service; or five (5) Business Days after
deposit in the United States mail, registered or certified, with postage prepaid
and properly addressed; provided, however, that notice to Assignee shall not be
effective until received by Assignee.
Section 15. Continuing Security Interest; Assignment
This Agreement shall create a continuing security interest in the Pledged
Collateral and shall (i) be binding upon each Assignor, its successors and
assigns, and (ii) inure, together with the rights and remedies of Assignee
hereunder, to the benefit of Assignee, its successors, transferees and assigns;
no other Persons (including, without limitation, any other creditor of each
Assignor) shall have any interest herein or any right or benefit with respect
hereto.
Section 16. Headings
The Section headings used in this Agreement are for convenience of reference
only and shall not affect the construction of this Agreement.
<PAGE>
36
Section 17. Severability of Provisions
Any provision of this Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof or affecting the validity or enforceability of such provision
in any other jurisdiction.
Section 18. Limitation on Interest Payable
It is the intention of the parties to conform strictly to the usury laws,
whether state or federal, that are applicable to the transaction of which this
Agreement is a part. All agreements between each Assignor and Assignee, whether
now existing or hereafter arising and whether oral or written, are hereby
expressly limited so that in no contingency or event whatsoever shall the amount
paid or agreed to be paid by each Assignor for the use, forbearance or detention
of the money to be loaned or advanced under the Indenture or any related
document, or for the payment or performance of any covenant or obligation
contained herein or in the Indenture, exceed the maximum amount permissible
under applicable usury laws. If under any circumstances whatsoever fulfillment
of any such provision, at the time performance of such provision shall be due,
shall involve exceeding the limit of validity prescribed by law, then the
obligation to be fulfilled shall be reduced to the limit of such validity. If
under any circumstances any Assignor shall have paid an amount deemed interest
by applicable law, which would exceed the highest lawful rate, such amount that
would be excessive interest under applicable usury laws shall be applied to the
reduction of the principal amount owing in respect of the
<PAGE>
37
Secured Obligations and not to the payment of interest, or if such excessive
interest exceeds the unpaid balance of principal and any other amounts due
hereunder, the excess shall be refunded to each Assignor. All sums paid or
agreed to be paid for the use, forbearance or detention of the principal under
any extension of credit or advancement of funds by Marine Midland Bank, as
trustee, shall, to the extent permitted by applicable law, and to the extent
necessary to preclude exceeding the limit of validity prescribed by law, be
amortized, prorated, allocated and spread from the date of this Agreement until
payment in full of the Secured Obligations so that the actual rate of interest
on account of such principal amounts is uniform throughout the term hereof.
Section 19. Indemnification
Each and every obligation of the Issuers to indemnify and hold harmless the
Trustee in the Indenture contained in Section 7.07 thereof is incorporated
herein mutatis mutandis as an obligation of each Assignor hereunder to indemnify
Assignee and Marine Midland Bank in its individual capacity and the officers,
directors, employees, agents and affiliates thereof.
Section 20. Governing Law; Consent to Jurisdiction
This Agreement shall be governed by the laws of the Netherlands Antilles except
to the extent that the creation, validity or perfection of the security interest
intended to be granted hereunder is governed by the laws of a jurisdiction other
than the Netherlands Antilles. The competent courts of the Netherlands Antilles
in Curacao shall have non-exclusive jurisdiction.
<PAGE>
38
Section 21. Execution in Counterparts
This Agreement and any amendments, waivers, consents or supplements hereto may
be executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed and delivered shall be
deemed to be an original, but all such counterparts together shall constitute
one and the same Agreement.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed on _________, 1996.
STATIA TERMINALS INTERNATIONAL SEVEN SEAS STEAMSHIP COMPANY
N.V., as Assignor (ST. EUSTATIUS) N.V., as Assignor,
By: /s/David B. Pittaway By: /s/James G. Cameron
------------------------------ ------------------------------
Name: David B. Pittaway Name: James G. Cameron
Title: Attorney-in-Fact Title: Managing Director
STATIA TERMINALS CORPORATION STATIA TUGS N.V., as
N.V., as Assignor Assignor
By: /s/David B. Pittaway By: /s/James G. Cameron
------------------------------ ------------------------------
Name: David B. Pittaway Name: James G. Cameron
Title: Attorney-in-Fact Title: Managing Director
STATIA TERMINALS N.V. MARINE MIDLAND BANK,
as Assignor as Assignee
By: /s/James G. Cameron By: /s/Eileen M. Hughes
------------------------------ ------------------------------
Name: James G. Cameron Name: Eileen M. Hughes
Title: Managing Director Title: Assistant Vice President
SABA TRUSTCOMPANY N.V.
as Assignor,
By: /s/James G. Cameron
------------------------------
Name: James G. Cameron
Title: Managing Director
BICEN DEVELOPMENT CORPORATION
N.V., as Assignor
By: /s/James G. Cameron
------------------------------
Name: James G. Cameron
Title: Managing Director
STATIA LABORATORY SERVICES
N.V., as Assignor
By: /s/James G. Cameron
------------------------------
Name: James G. Cameron
Title: Managing Director
<PAGE>
41
Schedule 1
to the
Fiduciary Assignment
of
Intangible Assets Agreement
List of Collateral
Name Description Description
[Debtor] Agreement/Rights Payment Terms
-------- ---------------- -------------
The Undersigned hereby confirms that this list constitutes a List of Collateral
within the meaning of Section 3.2 and 3.3 of the Fiduciary Assignment of
Intangible Assets Agreement between [Assignor] and Assignee, and confirms
receipt thereof on ________________, 199 [ ].
---------------------------------
Assignee
<PAGE>
42
Schedule 2
to the
Fiduciary Assignment
of
Intangible Assets Agreement
This Amendment dated [date], is delivered pursuant to Section 3 of the Agreement
referred to below. The undersigned hereby agrees hat this Amendment may be
attached to the Fiduciary Assignment of Intangible Assets Agreement dated
November 27, 1996 by and between [Assignor), a company incorporated under the
laws of the Netherlands Antilles, as Assignor, and Marine Midland Bank, as
Assignee, (the "Agreement"; capitalized terms defined therein being used herein
as therein defined) and that the items or types of property listed on this
Amendment shall be deemed to be part of the Pledged Collateral and shall secure
the Secured Obligations as provided in the Agreement.
[Assignor]
By:
Title:
Description of
Pledged Collateral
<PAGE>
43
Schedule 3
to the
Fiduciary Assignment
of
Intangible Assets Agreement
Copyrights
----------
None
Licenses
--------
None
Patents
-------
None
Trademarks
----------
None
<PAGE>
44
Schedule 4
to the
Fiduciary Agreement
of
Intangible Assets Agreement
Prior Liens
-----------
None.
<PAGE>
45
Schedule 5
to the
Fiduciary Agreement
of
Intangible Assets Agreement
Principal Place of Business of Assignor
[LOGO]
Mr G.C.A. SMEETS Mr J.W.M. THESSELING
NOTARISSEN
CURACAO
NEDERLANDSE ANTILLEN
SMEETS THESSELING VAN BOKHORST SPIGT
CURACAO NEW YORK BRUSSEL
<PAGE>
IRG/MC
On this, twenty-seventh day of November nineteenhundred and ninety-six, came and
appeared before me, Gerard Christoffel Antonius Smeets, civil-law notary on
Curacao:
1. Misses ISELINE RUFINA GOUVERNEUR, a notarial candidate, residing at
Curacao, acting as a proxy in writing on behalf of:
a. STATIA TERMINALS N.V.;
b. STATIA LABORATORY SERVICES N.V. ("Statia Laboratory");
c. BICEN DEVELOPMENT CORPORATION N.V.,
all corporations organized under the Laws of the Netherlands Antilles,
established at Sint Eustatius,
d. SARA TRUST COMPANY N.V., a corporation organized under the laws of the
Netherlands Antilles, established at Statia;
hereinafter jointly as well as severally referred to as the
"Mortgagors";
2. Mister ROBERT THOMAS MIRCK, a notarial candidate, residing at Curacao in
these presents acting as authorized representative of Marine Midland Bank,
New York Branch, a New York banking corporation and trust company, having
its registered office at 140 Broadway, 12th floor, New York, New York
10005, United States of America,
hereinafter referred to as the "Mortgagee".
The said proxy of the appearer sub 1 is evidenced by one notarial power of
attorney, which, after having been authenticated according to the law, will be
attached to this deed.
The appearers, acting as aforementioned, declared as follows:
RECITALS:
1. Each of the Mortgagors other than Statia Laboratory is owner of the
property as described at the end of this document. Statia Laboratory is the
owner and holder of the property right to construct and to legally own
constructions and improvements (in Dutch: recht van opstal), as further
specified at the end of this deed.
2. Mortgagors, Mortgagee and certain subsidiaries of Mortgagors are,
comptemporaneously with the execution and delivery of this Mortgage,
entering into a certain indenture (as amended from time to time, the
"Indenture"), dated as of November 27, 1996 and which Indenture is
considered to be part of this Mortgage, pursuant to which Statia Terminals
International N.V. ("Statia International") and Statia Terminals Canada,
Incorporated ("Statia Canada", together with Statia International
collectively, the "Issuers") are issuing 11 3/4% first mortgage notes due
2003 (the "First Mortgage Notes"). It is contemplated that each of the
Issuers Mortgagor may, after the date hereof, issue exchange notes pursuant
to the Indenture (the "Exchange Notes"; together with the First Mortgage
Notes Seniors Secured Notes, the "Notes"), and incur certain
<PAGE>
-3-
they shall (i) pay to Mortgagee (as and when due by the Mortgagors in accordance
with the provisions of the applicable Secured Instrument) all amounts of money
due and payable to the holders of the Notes and to the holders of the Additional
Secured Indebtedness under their respective Secured Instruments, in order to
permit Mortgagors to make the payments required of them under the applicable
Secured Instrument, as and when due, to the holders of the Notes and to the
holders of Additional Secured Indebtedness in accordance with their respective
Secured Instruments. The agreements, covenants and obligations of Mortgagors set
forth in the immediately preceding sentence shall hereinafter be referred to as
the "Debtholder Obligations". It is the intention of the parties that the
Debtholder Obligations shall be identical and equal to the obligations of
Mortgagors to the holders of the Notes and to the holders of Additional Secured
Indebtedness under their respective Secured Instruments.
The Mortgagors and the Mortgagee agree and acknowledge that the Debtholder
Obligations are obligations and liabilities of the Mortgagor to the Mortgagee as
trustee, paying agent, separate and independent from and without prejudice to
the liabilities which the Mortgagors have or may have to the holders of the
Notes and to the holders of the Additional Secured Indebtedness, provided that
the total amount due and payable under the Debtholder Obligations shall be
decreased to the extent that the Mortgagors shall have paid any amounts to the
Mortgagee, which are due, payable and owing to any holder of the Notes and any
holder of Additional Secured Indebtedness in accordance with their respective
Secured Instruments.
The relationship of the holders of the Notes, the holders of Additional Secured
Indebtedness and the Mortgagee are or will be, as the case may be, governed by
the Indenture and the Intercreditor Agreement, which is or will be, as the case
may be, governed by and construed in accordance with the laws of the State of
New York, United States of America.
SECTION 1.1 Payment and Performance.
Each Mortgagor shall pay as and when the same shall become due, whether at its
stated maturity, by acceleration or otherwise, each and every amount payable by
any Mortgagor in respect of the Secured Obligations and shall perform, at or
prior to the time such performance shall be due, all other obligations of any
Mortgagor which constitute Secured Obligations.
SECTION 1.2 Authority and Validity.
Mortgagors represent, warrant and covenant that (i) Mortgagors are duly
authorized to execute and deliver this Mortgage, the Notes, the Guarantee, the
Indenture and the other documents evidencing or securing the Secured Obligations
(this Mortgage, the Notes, the Guarantee and such other documents, collectively,
the "Indenture Documents"), and all corporate and governmental actions,
consents, authorizations and approvals necessary or required therefor have been
duly and effectively taken and obtained, (ii) this Mortgage and the other
Indenture Documents are legal, valid, binding and enforceable obligations of
Mortgagors, (iii) Mortgagors have the full
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power and lawful authority to execute and deliver this Mortgage and the other
Indenture Documents and to mortgage the Mortgaged Property as contemplated
herein.
SECTION 1.3 Good Title.
1.3.1 Mortgagors (other than Statia Laboratory) represent, warrant and
covenant that (i) Mortgagors have good and marketable fee simple title
to the Mortgaged Property.
1.3.2 Statia Laboratory represents, warrants and covenants that it owns the
property right to construct and to legally own constructions and
improvements (in Dutch: "recht van opstal") and has good and
marketable title to all other properties constituting the Mortgaged
Property. Mortgagors will keep in effect all material rights and
appurtenances to or that constitute a part of the Mortgaged Property
which are necessary for the conduct of Mortgagor's business at the
Mortgaged Property.
1.3.3 Mortgagors will protect, preserve and defend their interest in the
Mortgaged Property and title thereto.
1.3.4 Mortgagors will comply with each of the terms, conditions and
provisions of any obligation of Mortgagors which is secured by the
Mortgaged Property or the noncompliance with which could reasonably be
expected to result in the imposition of a Lien on the Mortgaged
Property.
1.3.5 Mortgagors will appear and defend the Lien and security rights created
and evidenced hereby and the validity and priority of this Mortgage in
any action or proceeding affecting or purporting to affect the
Mortgaged Property or any of the rights of Mortgagee hereunder.
1.3.6 This Mortgage creates and constitutes a valid and enforceable first
Lien on the Mortgaged Property, and a security right on the Mortgaged
Property, which first Lien and security right are and will be subject
only to Prior Liens (but not to extensions or replacements of Prior
Liens) Mortgagors shall warrant and defend to Mortgagee and all its
successors and assigns such title and the validity and priority of the
Lien and security rights created and evidenced hereby against the
claims of all Persons.
1.3.7 There has been issued and there remains in effect each and every
certificate of occupancy or use or other Permit currently required for
the existing use and occupancy by Mortgagor and its tenants of the
Mortgaged Property.
1.3.8 The Mortgaged Property complies in all respects with all local zoning,
land use, setback or other development and use requirements of
Governmental Authorities (as hereinafter defined).
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SECTION 1.4 Recording Documentation to assure Security interest: Fees and
Expenses.
Each Mortgagor shall, forthwith after the execution and delivery of this
Mortgage and thereafter, register and record this Mortgage in such manner and in
such places as may be required by a present or future Netherlands Antilles law.
Each Mortgagor shall pay or cause to be paid all taxes and fees incident to such
filing, registration and recording, and all expenses incident to the
preparation, execution and acknowledgment thereof, and of any instrument of
further assurance arising out of or in connection with the execution and
delivery of such instruments.
Each Mortgagor shall, at its sole cost and expense, do, execute, acknowledge and
deliver all and every such further acts, deeds, conveyances, mortgages,
assignments, notices of assignment, transfers and assurances as Mortgagee shall
from time to time reasonably request to assure, convey, assign, mortgage,
transfer and confirm unto Mortgagee the property and rights hereby conveyed or
assigned, or which any Mortgagor may be or may hereafter become bound to convey
or assign to Mortgagee or which may facilitate the performance of the terms of
this Mortgage or the filing, registering or recording of this Mortgage. In the
event any Mortgagor fails to execute any instrument required to be executed by
such Mortgagor under this subsection 1.4.2, Mortgagee may execute the same as
the attorney-in-fact for such Mortgagor, such power of attorney being
irrevocable.
SECTION 1.5 Payment of Taxes, Insurance Premiums, Assessments; Compliance with
Law and Insurance Requirements.
1.5.1 Unless contested in accordance with the provisions of subsection 1.5.5
hereof, Mortgagors shall pay and discharge or cause to be paid and
discharged, from time to time when the same shall become due, all real
estate and other taxes, special assessments, levies, permits,
inspection and license fees, all premiums for insurance and all other
public charges imposed upon or assessed against the Mortgaged Property
or any part thereof or upon the revenues, rents issues, income and
profits of the Mortgaged Property, including, without limitation,
those arising in respect of the occupancy, use or possession thereof.
1.5.2 Upon the occurrence and during the continuance of an Event of Default,
at the written request of Mortgagee, Mortgagors shall deposit with
Mortgagee, on the first day of each month, an amount estimated by
Mortgagors to be equal to one-twelfth (1/12th) of the annual taxes,
assessments and other items required to be discharged by Mortgagors
under subsection 1.5.1 and amounts estimated by Mortgagors to be
necessary to maintain the insurance coverages contemplated in Section
1.7. Such amounts shall be held by Mortgagee without interest to
Mortgagors and applied to the payment of each obligation in respect of
which such amounts
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were deposited, in such order or priority as Mortgagee shall
determine, on or before the date on which such obligation would become
delinquent. If at any time the amounts so deposited by Mortgagors
shall, in Mortgagee's judgement, be insufficient (when added to the
installments anticipated to be paid thereafter) to discharge any of
such obligations when due, Mortgagors shall, within five (5) Business
Days after demand, deposit with Mortgagee such additional amounts as
may be requested by the Mortgagee. Nothing contained in this Section
1.5. shall affect any right of Mortgagee under any provision of this
Mortgage or of any statute or rule of law to pay any such amount from
its own funds and to add the amount so paid, together with interest at
a rate ("Default Rate") per annum equal to the [2]% in excess of the
then highest rate payable under the Notes to the other amounts
outstanding in respect of the Secured Obligations or relieve
Mortgagors of their obligations to make or provide for the payment of
the annual taxes, assessments and other charges required to be
discharged by Mortgagors under subsection 1.5.1.
Mortgagors hereby grant to Mortgagee a security right in all sums held
pursuant to this subsection 1.5.2 to secure payment and performance of
the Secured Obligations. During the continuance of an Event of
Default, Mortgagee may apply all or any part of these sums held
pursuant to this subsection 1.5.2 to payment and performance of the
Secured Obligations in accordance with Section 6.10 of the Indenture.
Mortgagors shall redeposit with Mortgagee an amount equal to all
amounts so applied as a condition to the cure, if any, of such Event
of Default in addition to fulfillment of any other required
conditions; provided, however, that any and all such funds shall be
returned to Mortgagors promptly after the Event of Default has been
cured.
1.5.3 Unless contested in accordance with the provisions of subsection
1.5.5, Mortgagors shall timely pay, or cause to be paid, all lawful
claims and demands of mechanics, materialmen, laborers, employees,
suppliers, government agencies administering worker's compensation
insurance, old age pensions and social security benefits and all other
claims, judgements, demands or amounts of any nature which, if unpaid,
or not bonded, would be likely to result in the creation of a Lien on
the Mortgaged Property or any part thereof or which would be likely to
result in forfeiture of all or any part of the Mortgaged Property.
1.5.4 Mortgagors shall maintain, or cause to be maintained, in full force
and effect, all permits, certificates, authorizations, consents,
approv-
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als, licenses, franchises or other instruments now or hereafter
required by any federal, state, municipal or local government or
quasi-governmental agency or authority (each of the foregoing, a
"Governmental Authority") to operate or use and occupy the premises
and the equipment for their intended uses (collectively "Permits";
each, a "Permit").
Mortgagors represents that none of these Permits will be subject to
cancellation, forfeiture or any limitation on the scope thereof solely
by virtue of the execution of this Mortgage or the foreclosure of the
Lien hereof. Unless contested in accordance with the provisions of
subsection 1.5.5, Mortgagors shall comply promptly with, or cause
prompt compliance with (i) all requirements set forth in the Permits
and (ii) all requirements of the Governmental Authority of the Island
of Sint Eustatius and the Netherlands Antilles applicable to the
Mortgaged Property or the condition, use or occupancy of all or any
part thereof or any recorded deed of restriction, declaration,
covenant running with the land or otherwise, now or hereafter in
force. Mortgagors shall not initiate or consent to any change in the
zoning, subdivision or any other use classification of the Mortgaged
Property or impair Mortgagee's rights or benefits hereunder, without
the prior written consent of Mortgagee.
1.5.5 Mortgagors may at their own expense contest the amount or
applicability of any of the obligations described in subsections
1.5.1, 1.5.3 and 1.5.4 by appropriate legal proceedings, prosecution
of which operates to prevent the collection or enforcement thereof and
the sale or forfeiture of the Mortgaged Property or any part thereof
to satisfy such obligations; provided, however, that in connection
with such contest, Mortgagors shall have made provision for the
payment or performance of such contested obligation on Mortgagors'
books if and to the extent required by generally accepted accounting
principles, or shall have deposited with Mortgagee a sum sufficient to
pay and discharge such obligation and Mortgagee's estimate of all
interests and penalties related thereto. Notwithstanding the foregoing
provisions of this subsection 1.5.5, (i) no contest of any such
obligations may be pursued by Mortgagors if such contest would expose
Mortgagee, any holder of Notes or any holder of Additional Secured
Indebtedness to any possible criminal liability or, unless Mortgagors
shall have furnished an Additional Undertaking (as hereinafter
defined) therefor satisfactory to Mortgagee, any additional civil
liability for failure to comply with such obligations and
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(ii) if at any time payment or performance of any obligation contested
by Mortgagors pursuant to this subsection 1.5.5 shall become necessary
to prevent a tax related Lien on the Mortgaged Property or any portion
thereof because of nonpayment or nonperformance, Mortgagors shall pay
or perform the same in sufficient time to prevent the imposition of
such tax related Lien.
1.5.6 Mortgagors shall not in its their use and occupancy of the Mortgaged
Property (including, without limitation, in the making of any
Alteration) take any action that could be the basis for termination,
revocation or denial of any insurance coverage required to be
maintained under this Mortgage or that could be the basis for a
defense to any claim under any insurance policy maintained in respect
of the Mortgaged Property and Mortgagors shall otherwise comply in all
respects with the requirements of any insurer that issues a policy of
insurance in respect of the Mortgaged Property.
1.5.7 Mortgagors shall, promptly upon receipt of any written notice
regarding any failure by Mortgagors to pay or discharge any of the
obligations described in subsection 1.5.1, 1.5.3, 1.5.4 or 1.5.6,
furnish a copy of such notice to Mortgagee.
SECTION 1.6 Certain Tax Law Changes.
In the event of the passage after the date of this Mortgage of any law changing
in any way the laws for the taxation of mortgages or debts secured by mortgages
for state or local purposes or the manner of the collection of any such taxes,
and imposing a new tax, either directly or indirectly, on this Mortgage,
Mortgagee, any Indenture Document or any other document relating to the Secured
Obligations, Mortgagors shall promptly pay to Mortgagee such amount or amounts
as may be necessary from time to time to pay such tax.
SECTION 1.7 Required Insurance Policies.
1.7.1 Mortgagors shall maintain in respect of the MortgagedProperty the
following insurance coverage:
(i) Physical hazard insurance on an "all risk" basis covering,
without limitation, hazards commonly covered by fire and
extended coverage, lightning, windstorm, civil commotion,
hail, riot, strike, water damage, sprinkler leakage,
collapse and malicious mischief, in an amount equal to the
full replacement cost of the Mortgaged Property, with such
deductibles as would be maintained by a prudent operator of
property similar in use and configuration to the Mortgaged
Property and located in the locality where the Mortgaged
Property is located. "Full replace-
<PAGE>
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ment cost" means the Cost of Construction (as hereinafter
defined) to replace the Mortgaged Property, exclusive of
depreciation, excavation, foundation and footings, as
determined from time to time (but not less frequently than
once every twelve (12) months) by any Person selected by
Mortgagors in consultation with its their insurance company
or insurance agent, as appropriate.
(ii) Comprehensive general liability insurance against claims for
bodily injury, death or property damage occurring on, in or
about the Mortgaged Property and any adjoining streets,
sidewalks and passageways and covering any and all claims,
including, without limitation, all legal liability, subject
to customary exclusions, to the extent insurable, imposed
upon Mortgagee and all court costs and attorneys' fees,
arising out of or connected with the possession, use,
leasing, operation or condition of the Mortgaged Property,
with policy limits and deductibles in such amounts as would
be maintained by a prudent operator of property similar in
use and configuration to the Mortgaged Property and located
in the locality where the Mortgaged Property is located;
(iii) Workers' compensation insurance as required by the laws of
the Island of Sint Eustatius, Netherlands Antilles, where
the Mortgaged Property is located to protect Mortgagors
against claims for injuries sustained in the course of
employment at the Mortgaged Property;
(iv) Explosion insurance in respect of any boilers and similar
apparatus located on the Mortgaged Property or comprising
the Mortgaged Property, with policy limits and deductibles
in such amounts as would be maintained by the prudent
operator of property similar in use and configuration to the
Mortgaged Property and where the Mortgaged Property is
located.
(v) During the performance of any alterations, renovations,
repairs, restorations or construction, broad form Builders
Risk Insurance on an all-risk completed value basis;
(vi) Such other insurance, against such risks and with policy
limits and deductibles in such amounts as would
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be maintained by a prudent operator of property similar in
use and configuration to the Mortgaged Property and located
in the locality in which the Mortgaged Property is located;
and
(vii) If the Mortgaged Property is located in an area having
special flood hazards, flood insurance in such amounts as
would be maintained by a prudent operator of property
similar in use and configuration to the Mortgaged Property
and where the Mortgaged Property is located.
1.7.2 All insurance policies required by this Section 1.7 shall be in form
customarily maintained by a prudent operator of property similar in
use and configuration to the Mortgaged Property where the Mortgaged
Property is located. All insurance policies in respect of the
coverages required by subsections 1.7.1 (i), 1.7.1 (iv), 1.7.1 (v)
and, if applicable 1.7.1 (vi) shall be in amounts at least sufficient
to prevent coinsurance liability and all losses thereunder shall be
payable to Mortgagee, as loss payee pursuant to a standard
non-contributory New York mortgagee endorsement or local equivalent,
and each such policy shall (i) include effective waivers (whether
under the terms of such policy or otherwise) by the insurer of all
claims for insurance premiums against all loss payees and named
insured other than Mortgagors and all rights of subrogation against
any named insured, and (ii) provide that any losses thereunder shall
be payable notwithstanding (a) any act, failure to act, negligence of,
or violation or breach of warranties, declarations or conditions
contained in such policy by Mortgagors or Mortgagee or any other named
insured or loss payee, (b) the occupation or use of the Mortgaged
Property for purposes more hazardous than permitted by the terms of
the policy, (c) any foreclosure or other proceeding or notice of sale
relating to the Mortgaged Property or (d) any change in the title to
or ownership or possession of the Mortgaged Property; provided,
however, that (with respect to items contemplated in clauses (c) and
(d) above) any notice requirements of the applicable policies are
satisfied. All insurance policies in respect of the coverage required
by subsections 1.7.1 (ii) and, if applicable, 1.7.1 (vi) and 1.7.1
(vii), shall name Mortgagee as an additional insured. Each policy of
insurance required under this Section 1.7 shall provide that it may
not be canceled or otherwise terminated without at least thirty (30)
days' prior written notice to Mortgagee and shall permit Mortgagee to
pay any premium
<PAGE>
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therefor within thirty (30) days after receipt of any notice stating
that such premium has not been paid when due. The policy or policies
of such insurance or certificates of insurance evidencing the required
coverage and all renewals or extensions thereof shall be delivered to
Mortgagee. Prior to the occurrence of an Event of Default, settlement
of any claim in an amount in excess of US$. 250,000.00 under any of
the insurance policies referred to in this Section 1.7 shall require
the prior approval of Mortgagee, and Mortgagors shall use its best
efforts to cause each such insurance policy to contain a provision to
such effect.
During the continuance of any Event of Default, Mortgagors shall not
settle any claim under any of the insurance policies referred to in
this Section 1.7 without the prior approval of Mortgagee, which shall
not be unreasonably withheld.
1.7.3 At least thirty (30) days prior to the expiration of any insurance
policy required by subsection 1.7.1, a policy or policies renewing or
extending such expiring policy or renewal or extension certificates or
other evidence of renewal or extension shall be delivered to
Mortgagee.
1.7.4 Mortgagors shall not purchase separate insurance policies concurrent
in form or contributing in the event of loss with those policies
required to be maintained under this Section 1.7, unless Mortgagee is
included thereon as named insured and, if applicable, with loss
payable to Mortgagee under an endorsement containing the provisions
described in subsection 1.7.2. Mortgagors promptly shall notify
Mortgagee whenever any such separate insurance policy is obtained and
promptly shall deliver to Mortgage the policy or certificate
evidencing such insurance.
1.7.5 Mortgagors shall, immediately upon receipt of any written notice of
any failure by Mortgagors to pay any insurance premium in respect of
any insurance policy required to be maintained under this Section 1.7,
furnish a copy of such notice to Mortgagee.
1.7.6 Mortgagors shall maintain, or cause to be maintained, the insurance
described in this Section 1.7 with primary insurers rated (for claims
paying purposes) in one of the two highest generic categories by each
Rating Agency (as hereinafter defined). All insurers under policies
required hereunder shall be licensed and authorized to issue insurance
in Sint Eustatius, Netherlands Antilles.
SECTION 1.8 Failure To Make Certain Payments.
If Mortgagors shall fail to perform any of the covenants contained in this
Mortgage including, without limitation, Mortgagors' covenants to (i) pay the
premiums in respect
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of all required insurance coverage, (ii) pay taxes and assessments, (iii) make
repairs, (iv) discharge Liens or (v) pay or perform any obligations of
Mortgagors under the Leases, and such failure shall constitute an Event of
Default, Mortgagee may, but shall not be obligated to, make advances to perform
such covenant on Mortgagors' behalf and all sums so advanced shall be included
in the Secured Obligations and shall be secured hereby. Mortgagors shall repay
immediately upon demand therefor all sums so advanced by Mortgagee on behalf of
Mortgagors, with interest at the Default Rate from and including the date on
which such funds were so advanced to the date of repayment thereof. Neither the
provisions of this Section 1.8 nor any action taken by Mortgagee pursuant to the
provisions of this Section 1.8 shall prevent any such failure to observe any
covenant contained in this Mortgage from constituting an Event of Default.
SECTION 1.9 Inspection.
Mortgagors shall permit Mortgagee, by their agents, representatives, accountants
and attorneys, to visit and inspect the Mortgaged Property at such reasonable
times as may be requested by the Mortgagee.
SECTION 1.10 Mortgagors To Maintain the Mortgaged Property.
Mortgagors shall not commit any waste on the Mortgaged Property or make any
change in the use of the Mortgaged Property. Mortgagors represents and warrants
that (i) the Mortgaged Property is served by all utilities required or necessary
for the current use thereof, (ii) all streets necessary to serve the Mortgaged
Property are completed and serviceable and have been dedicated and accepted as
such by the appropriate Governmental Authorities and (iii) Mortgagors have
access to the Mortgaged Property from public roads sufficient to allow
Mortgagors and its tenants and invitees to conduct its and their businesses at
the Mortgaged Property in accordance with sound commercial and industrial
practices. Mortgagors shall, at all times, maintain the Mortgaged Property in
good operating order, condition and repair and shall make all repairs necessary,
structural or nonstructural, for the operation of Mortgagors' business.
Mortgagors shall (a) not alter the occupancy or use of all or any part of the
Mortgaged Property, without the prior written consent of Mortgagee, and (b) do
all other acts which from the character or use of the Mortgaged Property may be
reasonably necessary or appropriate to maintain and preserve its value.
SECTION 1.11 Mortgagors' Obligations with Respect to Leases.
1.11.1 Mortgagors shall manage and operate the Mortgaged Property or cause
the Mortgaged Property to be managed and operated in a reasonably
prudent manner and will not, without the written consent of Mortgagee,
enter into any Lease (or any amendment or modification thereof) with
any Person, which would be reasonably likely to have an adverse effect
on the value of the property subject thereto.
1.11.2 Mortgagors shall not in respect of any material Leases:
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(i) receive or collect, or permit receipt or collection of, any
rental or other payments under any Lease more than one (1)
month in advance of the respective period in respect of
which they are to accrue, except that (a) in connection with
the execution and delivery of any Lease or of any amendment
to any Lease, rental payments thereunder may be collected
and received in advance in an amount not in excess of one
(1) month's rent and (b) Mortgagors may receive and collect
escalation and other charges in accordance with the terms of
each Lease;
(ii) assign or transfer (other than to Mortgagee hereunder or as
otherwise permitted under Section 1.12 of this Mortgage) any
rental or other payment under any Lease whether then due or
to accrue in the future, the interest of Mortgagors as
lessor under any Lease or the rents, issues, revenues,
profits or other income of the Mortgaged Property;
(iii) Mortgagors shall not enter into any lease after the date
hereof that in any material way would (i) affect the rights
of mortgagee or (ii) subordinate the rights of mortgagee
under this mortgage every lien, (iii) otherwise restrict or
amend any tenant's obligation to pay rent or restrict the
same by any deduction, sett-off;
(iii) enter into any Lease after the date hereof that does not
contain terms substantially to the effect as follows:
(a) such Lease and the rights of the tenant thereunder
shall be subject and subordinate to the rights of
Mortgagee under and the Lien of this Mortgage,
including, without limitation, the right of
Mortgagee to terminate the Lease in an Event of
Default;
(b) such Lease has been assigned as collateral
security by any Mortgagor as landlord thereunder
to Mortgagee under this Mortgage;
(c) in the case of any foreclosure hereunder, the
rights and remedies of the tenant in respect of
any obligations of any successor landlord
thereunder shall be limited to the equity interest
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of such successor landlord in the Mortgaged
Property and any successor landlord shall not (1)
be liable for any act, omission or default of any
prior landlord under the Lease or (2) be required
to make or complete any tenant improvements or
capital improvements or repair, restore, rebuild
or replace the demised Mortgaged Property or any
part thereof in the event of damage, casualty or
condemnation or (3) be required to pay any amounts
to tenant arising under the Lease prior to such
successor landlord taking possession;
(d) the tenant's obligation to pay rent and any
additional rent shall not be subject to any
abatement, deduction, counter-claim or setoff
against any mortgagee or purchaser upon the
foreclosure of any of the Mortgaged Property or
the giving or granting of a deed in lieu thereof
by reason of a landlord default occurring prior to
such foreclosure and such mortgagee or purchaser
will not be bound by any advance payments of rent
in excess of one month or any security deposits
unless such security was actually received; and
(e) the tenant agrees to be bound by the Lease at the
option of Mortgagee or any purchaser of the
Mortgaged Property upon a foreclosure of the
Mortgaged Property or the giving or granting of a
deed in lieu thereof; or
(iv) terminate or permit the termination of any Lease of space,
accept surrender of all or any portion of the space demised
under any Lease prior to end of the term thereof or accept
assignment of any Lease to Mortgagors unless:
(a) the tenant under such Lease has not paid the
equivalent of two months' rent and Mortgagors has been made
reasonable efforts to collect such rent; or
(b) Mortgagors shall deliver to Mortgagee an Officers'
Certificate to the effect that Mortgagors has entered into a
new Lease (or Leases)
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for the space covered by the terminated or assigned Lease
with a term (or terms) which expire(s) no earlier than the
date on which the terminated or assigned Lease was to expire
(excluding renewal options), and with a tenant (or tenants)
having a creditworthiness (as reasonably determined by
Mortgagors) sufficient to pay the rent and other charges due
under the new Lease (or Leases), and the tenant(s) shall
have commenced paying rent, including, without limitation,
all operating expenses and other amounts payable under the
new Lease (or Leases) without any abatement or concession in
an amount at least equal to the amount which would have then
been payable under the terminated or assigned Lease.
1.11.3 Mortgagors timely shall, perform and observe all the terms, covenants
and conditions required to be performed and observed by Mortgagors
under each Lease such that there will be no material impairment of the
fair market value of the Premises Mortgaged Property and will not
engage in any conduct in respect of any Lease which would materially
impair the fair market value of the Mortgaged Property or the Lien of
this Mortgage or the security right created hereby. Mortgagors
promptly shall notify Mortgagee of the receipt of any notice from any
lessee under any material Lease claiming that Mortgagors are in
default in the performance or observance of any of the terms,
covenants or conditions thereof to be performed or observed by
Mortgagors and will cause a copy of each such notice to be delivered
promptly to Mortgagee.
1.11.4 Mortgagors shall deliver to Mortgagee, within thirty (30) days after
the end of each calendar year ending after the date of this Mortgage,
a "Officers's Certificate", dated as of the last day of such year, (i)
containing a list of names of all tenants under Leases, and the net
square footage leased and the annual rental currently payable by each
of them, (ii) stating for which, if any, Leases then in force
Mortgagors have issued a notice of default and the nature of such
default and (iii) stating that, to the best of such officers'
knowledge, each Lease complies with the provisions of this Mortgage.
Mortgagors shall deliver to Mortgagee within thirty (30) days after
the end of each calendar quarter copies, certified by an officer of
Mortgagors, of all Leases not theretofore delivered to Mortgagee.
<PAGE>
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SECTION 1.12 Transfer Restrictions.
Except as permitted in the Indenture and Section 1.11 of this Mortgage,
Mortgagors may not without the prior written consent of Mortgagee further
mortgage, encumber, sell, convey or otherwise dispose of, or grant any option
with respect to all, or any part of the Mortgaged Property or suffer any of the
foregoing to occur by operation of law or otherwise.
No Mortgagor shall create or permit to exist any Lien upon or with respect to
any of the Mortgaged Property other than the following Liens:
(i) Liens in respect of amounts payable by each Mortgagor pursuant to
Section 1.5 if and to the extent such amounts are not yet due and
payable in accordance with the provisions of subsection 1.5.3 or are
being contested in accordance with the provisions of subsection 1.5.5;
(ii) Any permitted disposition of Mortgaged Property by Mortgagor in
accordance with the provisions of the Indenture;
(iii) Leases (and amendments and modifications thereof) permitted under
Section 1.11.1 of this Mortgage.
(iv) Liens granted under this Mortgage.
Each of the Liens and other transfers permitted by this Section 1.12 shall in
all respects be subject and subordinate in priority to the Lien and security
right created and evidenced by this Mortgage except (x) any Lien permitted by
clause (i) of this Section if and to the extent the law or regulation creating
or authorizing such Lien provides that such Lien must be superior to the Lien
and security interest created and evidenced by this Mortgage and (y) transfers
permitted under clause (ii) of this Section, which shall be made free of the
Lien and security right created and evidenced hereby.
SECTION 1.13 Destruction; Condemnation.
1.13.1 Destruction; Insurance Proceeds.
If there shall occur any damage to, or loss or destruction of the
Mortgaged Property or any part of any thereof (each, a "Destruction"),
Mortgagors shall promptly send to Mortgagee a notice setting forth the
nature and extent of such Destruction; provided, however, that
Mortgagor shall not be required to deliver the notice contemplated in
this sentence in the event that any Destruction would give rise to
insurance proceeds in an amount less to fifty thousand United States
Dollars (US$ 50,000.-). The proceeds of any insurance payable in
respect of any such Destruction shall constitute Trust Moneys and are
hereby assigned and shall be paid to Mortgagee. All such proceeds,
less the amount of any expenses incurred in litigating, arbitrating,
compromising or settling any claim arising out of such Destruction
(the "Net Proceeds"), shall constitute Trust Moneys and be applied in
accordance with the provisions of this Mortgage and/or the Indenture.
Mortgagee is hereby authorized and directed to pay from Trust Moneys
any and all
<PAGE>
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such expenses deemed necessary or reasonable by Mortgagee in
connection with the foregoing.
1.13.2 Condemnation; Assignment of Award.
If there shall occur any taking of the Mortgaged Property or any part
thereof, in or by condemnation or other eminent domain proceedings
pursuant to any law, general or special, or by reason of the temporary
requisition of the use or occupancy of the Mortgaged Property or any
part thereof, by any governmental authority, civil or military (each,
a "Taking"), Mortgagors immediately shall notify Mortgagee upon
receiving notice of such Taking or commencement of proceedings
therefor. To the extent permitted by applicable laws, Mortgagee may
participate in any proceedings or negotiations which might result in
any Taking. Mortgagee may be represented by counsel satisfactory to it
at the reasonable expense of Mortgagors. Mortgagors shall deliver or
cause to be delivered to Mortgagee all instruments reasonably
requested by it to permit such participation. Mortgagors shall in good
faith and with due diligence file and prosecute what would otherwise
be Mortgagors' claim for any such award or payment and cause the same
to be collected and paid over to Mortgagee, and hereby irrevocably
authorizes and empowers Mortgagee, in the name of each Mortgagor as
their true and lawful attorney-in-fact or otherwise, to collect and to
receipt for any such award or payment, and, in the event Mortgagors
fails so to act or are otherwise in default hereunder, to file and
prosecute such claim. Mortgagors shall pay all costs, fees (including
reasonable attorney's fees) and expenses incurred by Mortgagee in
connection with any Taking and seeking and obtaining any award or
payment on account thereof. Any proceeds, award or payment in respect
of any Taking shall constitute Trust Moneys and are hereby assigned
and shall be paid to Mortgagee. Mortgagors shall take all steps
necessary to notify the condemning authority of such assignment. Such
award or payment, less the amount of any expenses incurred in
litigating, arbitrating, compromising or settling any claim arising
out of such Taking ("Net Award"), shall be applied in accordance with
the provisions of the Indenture. Mortgagee is hereby authorized and
directed to pay from Trust Moneys any and all such expenses deemed
necessary or reasonable by Mortgagee in connection with the foregoing.
SECTION 1.14 Alterations.
Mortgagors shall not make any structural addition, modification or change (each,
an "Alteration") to the Mortgaged Property except as permitted by Section 4.07
of the Indenture. Mortgagors shall (a) complete each Alteration
<PAGE>
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promptly, in a good and workmanlike manner and, in all material respects, in
compliance with all applicable local laws, ordinances and requirements and (b)
pay when due all claims for labor performed and materials furnished in
connection with such Alteration, unless contested in accordance with the
provisions of subsection 1.5.5.
SECTION 1.15 Hazardous Material.
1.15.1 Mortgagors represents and warrants that:
(i) otherwise than as specifically disclosed in the Offering
Memorandum dated November 22, 1996, it has obtained all
permits, certificates, authorizations, consents, approvals,
licenses, franchises or other municipal, or local government
organs:
governmental agency or authority, to operate or to use and
occupy the Mortgaged Property for their intended use
(collectively the "Permits"; each a "Permit") which are
currently required with respect to the ownership and
operation of their business at the Mortgaged Property under
any and all federal, state, local and foreign laws or
regulations, codes, orders, decrees, judgements or
injunctions issued, promulgated, approved or entered
thereunder relating to pollution or protection of the
environment, including, without limitation, laws relating to
handling, use, storage, treatment, disposal, removal,
emission, discharge or release of pollutants, contaminants,
chemicals, or industrial, toxic or hazardous substances or
wastes ("Hazardous Materials") into the environment
(including, without limitation, ambient air, surface water,
ground water, drinking water supply, land surface or
subsurface strata) or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Materials (collectively,
"Environmental Laws") as they relate to the Mortgaged
Property;
(ii) it is in compliance with all material terms and conditions
of all such Permits or material representations made in such
Permit applications as they relate to the Mortgaged
Property, and also is in compliance in all material respects
with Environmental Laws, including, without limitation, all
limitations, restrictions, conditions, standards,
prohibitions, requirements, obligations, schedules
<PAGE>
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and timetables contained in the Environmental Laws as they
relate to the Mortgaged Property;
(iii) other than as specifically set forth in the Indenture, and
that certain Stock Purchase Agreement, Schedule 2-16 there
is no civil, criminal or administrative action, suit,
demand, claim, hearing, notice of violation, governmental
investigation, proceeding, notice or demand letter pending
or, to its knowledge, threatened against it or any
subsidiary under the Environmental Laws relating to the
Mortgaged Property or operations of Mortgagors or any
predecessor in interest which could be expected to result in
a material fine, penalty or other cost or expense to
Mortgagors;
(iv) there are no present or past events, conditions,
circumstances, activities, practices, incidents, actions or
plans in respect of each Mortgagor or the Mortgaged Property
which are expected to interfere with or prevent compliance
by Mortgagors or the Mortgaged Property with the
Environmental Laws relating to the Mortgaged Property, or
which are expected to give rise to any material common law
or legal liability, including, without limitation, liability
under the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended, or
similar state, local or foreign laws, or otherwise form the
basis of any material claim, action, demand, suit,
proceeding, hearing or notice of violation, governmental
study or investigation, based on or related to the
manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling, or the emission,
discharge, release or threatened into the environment of any
Hazardous Material.
1.15.2 Mortgagors shall (i) comply in all material respects with any and all
applicable present and future Environmental Laws relating to the
Mortgaged Property and all operations conducted thereat; (ii) pay the
cost of any investigation, removal, response or corrective action
(collectively, "Response Action") relating to any Hazardous Materials
on, at, under or emanating from the Mortgaged Property required by any
applicable present and future Environmental Laws; (iii) not release,
discharge or dispose of any Hazardous Materials on, at,
<PAGE>
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under or from the Mortgaged Property in violation of or in any manner
that could result in any liability under any applicable present and
future Environmental Laws; and (iv) apply any insurance proceeds or
other sums received by it in respect of any Response Action relating
to any Hazardous Materials to any unpaid costs or expenses of such
Response Action, if any, or to reimbursement for such costs previously
paid by Mortgagee, if any. In the event any Mortgagor fails to comply
with the covenants in the preceding sentence in any material respects,
Mortgagee may (upon receipt of an indemnity or other security
reasonably satisfactory to Mortgagee), in addition to any other
remedies set forth herein, but shall not be obligated to, as trustee
for and at Mortgagors' sole cost and expense cause to be taken, any
necessary Response Action relating to Hazardous Materials or required
by any and all applicable present and future Environmental Laws. Any
cost or expenses incurred by Mortgagee for such purpose shall be due
immediately upon demand therefor and all sums so expended by any
Mortgagor on behalf of Mortgagee and shall bear interest at the
Default Rate from and including the date on which such funds were so
expended to the day of repayment thereof. Mortgagors shall provide to
Mortgagee and its agents and employees access to the Mortgaged
Property and specifically grants to Mortgagee a license to
investigate, remove or otherwise remediate any Hazardous Material
located thereon, or to take any action with respect to any and all
applicable present and future Environmental Laws or in connection with
any Hazardous Materials which Environmental Laws or Hazardous
Materials could be expected to result in the incurrence of any
obligation or liability of the holders of the Notes or Mortgagee in
respect of any Mortgagor or at, under, on, or emanating from the
Mortgaged Property, if in any such case Mortgagors fails to so act and
such investigation, removal, remediation or other action is required
under any applicable present and future Environmental Laws; provided,
however, that nothing contained herein shall obligate Mortgagee to
exercise any rights under such licence. Upon written demand by
Mortgagee, which shall include a reasonably specific statement of the
basis thereof (which shall be specific to the condition of the
Mortgaged Property) and which shall be made not more frequently than
once in any twelve-month period or at any time that Mortgagee is
exercising its rights under this Mortgage, Mortgagee shall have the
right, but shall not be obligated, at the sole cost and expense of
Mortgagor, to
<PAGE>
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conduct an environmental audit or review of the Mortgaged Property,
relating to those items specified in writing or relating to the remedy
that the Mortgagee is exercising under this Mortgage, by such persons
or firms appointed by Mortgagee, and Mortgagors shall cooperate in all
respect in the conduct of such environmental audit or review,
including, without limitation, by providing reasonable access to the
Mortgaged Property and to all records relating thereto. Mortgagors
shall indemnify and hold Mortgagee and Marine Midland Bank in its
individual capacity harmless from and against all loss, cost, damage
or expense (including, without limitation, reasonable attorneys' and
consultant fees) that Mortgagee and/or Marine Midland Bank in its
individual capacity may sustain by reason of the assertion against
Mortgagee by any party and/or Marine Midland Bank in its individual
capacity of any claim relating to Hazardous Materials in respect of
Mortgagor, or at, under, on or emanating from the Mortgage Property
reasonable actions taken with respect thereto as authorized hereunder
other than such loss, cost, damage or expense, if any, to the extent
it is caused solely by the negligence or willful misconduct of
Mortgagee or its agents, contractors and subcontractors in performing
any act or exercising its remedies under this Mortgage. It is the
express intention of the parties to this Mortgage that nothing
contained herein or in any other Document shall result in Mortgagee
and/or Marina Midland Bank in its individual capacity being deemed an
"owner" or "operator" under applicable present and future
Environmental Laws.
SECTION 1.16 Asbestos.
Mortgagors shall not install nor permit to be installed in the Mortgaged
Property asbestos or any asbestos-containing material (collectively, "ACM")
except in compliance with any and all applicable present and future
Environmental Laws respecting ACM. With respect to any ACM currently present in
the Mortgaged Property, Mortgagors shall comply with any and all applicable
present and future Environmental Laws, all at Mortgagors' sole cost and expense.
If Mortgagor shall fail so to comply with such laws or regulations in any
material respect, Mortgagee may, but shall not be obligated to, in addition to
any other remedies set forth herein, take, whatever steps it deems reasonably
necessary or appropriate to comply with any and all applicable present and
future Environmental Laws. Any costs or expenses incurred by Mortgagee for such
purpose shall be immediately due and payable by Mortgagors and shall bear
interest at the Default Rate from and including the date on which such funds
were so expended to the date of repayment thereof. Mortgagors shall provide to
Mortgagee and its agents and employees access to the Mortgaged Property and
hereby specifically grants to
<PAGE>
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Mortgagee a license to remove or encapsulate such ACM if Mortgagors fail to do
so and removal or encapsulation is required under any applicable present and
future Environmental Law; provided, however, that nothing contained herein shall
obligate Mortgagee to exercise any rights under such license. Mortgagors shall
indemnify and hold Mortgagee and Marine Midland Bank in its individual capacity
harmless from and against all loss, cost, damage and expense (including, without
limitation, reasonable attorneys' and consultants' fees) that Mortgagee and
Marine Midland Bank in its individual capacity may sustain as a result of the
presence of any ACM in, at, under or emanating from the Mortgaged Property and
any removal or encapsulation thereof or compliance with any and all applicable
present and future Environmental Laws.
SECTION 1.17 Books and Records & Reports.
Mortgagors shall keep proper books of record and account, which shall accurately
represent the financial condition of Mortgagors and the business and affairs of
Mortgagors relating to the Mortgaged Property. Mortgagee and its authorized
representatives shall have the right upon reasonable notice, and at reasonable
times, from time to time, to examine the books and records of Mortgagors
relating to the operation of the Mortgaged Property.
SECTION 1.18 No Claims Against Mortgagee.
Nothing contained in this Mortgage shall constitute any consent or request by
Mortgagee, express or implied, for the performance of any labor or services or
the furnishing of any materials or other property in respect of the Mortgaged
Property or any part thereof, nor as giving Mortgagors any right, power or
authority to contract for or permit the performance of any labor or services or
the furnishing of any materials or other property in such fashion as would
permit the making of any claim against Mortgagee in respect thereof or any claim
that any Lien based on the performance of such labor or services or the
furnishing of any such materials or other property is prior to the Lien of this
Mortgage.
SECTION 1.19 Utility Services.
Mortgagors shall pay, or cause to be paid, when due all charges for all public
or private utility services, all public or private communication services, all
public or private rail- and highway services, all sprinkler systems, and all
protective services, any other services of whatever kind or nature at any time
rendered to or in connection with the Premises or any part thereof, shall comply
with all contracts relating to any such services, and shall do all other things
required for the maintenance and continuance of all such services to the extent
required to fulfill the obligations set forth in Section 1.9.
ARTICLE II
ASSIGNMENT OF RENTS;
SECTION 2.1 Assignment of Leases, Rents, Issues and Profits.
2.1.1. Mortgagors absolutely, presently and irrevocably assign, transfer and
set over to Mortgagee and grant to Mortgagee, subject to the terms and
conditions hereof, all Mortgagors' estate,
<PAGE>
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rights, title, interest, claim and demand as landlord to collect rent
and other sums due under all existing Leases and any other Leases,
including, without limitation, all extensions of the terms of the
Leases (such assigned rights, "Mortgagors' Interest"), as follows:
(i) the immediate and continuing right to receive and collect
Rents payable by all tenants or other parties pursuant to
the leases;
(ii) all claims, rights, powers, privileges and remedies if any,
of Mortgagors, whether provided for any Lease or arising by
statute or at law or in equity or otherwise, consequent on
any failure on the part of any tenant to perform or comply
with any term of any Lease;
(iii) all rights to take all actions upon the happening of a
default under any Lease as shall be permitted by such Lease
or by law, including, without limitation, the commencement,
conduct and consummation of proceedings at law;
(iv) the full power and authority, in the name of Mortgagors or
otherwise, to enforce, collect, receive and receipt for any
and all of the foregoing and to do any and all other acts
and things whatsoever which Mortgagors or any landlord are
or may be entitled to do under the Leases.
2.1.2. Any Rents receivable by Mortgagee hereunder, after payment of all
proper costs and charges, shall be applied to all amounts due and
owing under and as provided in this Mortgage and/or the Indenture.
Mortgagee shall be accountable to Mortgagors only for Rents actually
received by Mortgagee pursuant to this assignment. The collection of
such Rents and the application thereof shall not cure or waive any
Event of Default or waive, modify or affect notice of Event of Default
or invalidate any act done pursuant to such notice.
2.1.3. So long no Event of Default shall have occurred and be continuing,
Mortgagors shall have a license to collect and apply the Rents and to
enforce the obligations of tenants under the Leases. Immediately upon
the occurrence of any Event of Default, the license granted in the
immediately preceding sentence shall cease and terminate, with or
without any notice, action or proceeding. Upon such Event of Default
and during the continuance thereof, Mortgagee may, to the fullest
extent permitted by the Leases (i) exercise any of Mortgagors' rights
under the Leases, (ii) enforce the Leases, (iii) demand, collect, sue
for, attach, levy,
<PAGE>
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recover, receive, compromise, adjust, make, execute and deliver
receipts and releases for all Rents or other payments that may then be
or may thereafter become due, owing or payable with respect to the
Leases and (iv) generally do, execute and perform any other act, deed,
matter or thing whatsoever that ought to be done, executed and
performed in and about or with respect to the Leases, as fully as
allowed or authorized by Mortgagors' Interest. At such time as any
Event of Default which shall have caused Mortgagors' rights described
in the first sentence of this subsection 2.1.3. to cease shall have
been cured, Mortgagors shall thereafter be entitled to exercise the
rights described in the first sentence of this subsection 2.1.3 until
such time as any other Event of Default shall have occurred and be
continuing.
2.1.4. Mortgagors hereby irrevocably notifies, authorizes and directs the
tenant under each Lease to pay directly to, or as directed by,
Mortgagee all Rents accruing or due under its Lease upon receipt of a
notice from Mortgagee to the effect that an Event of Default exists
hereunder and requesting such payment. Mortgagors hereby authorizes
the tenant under each Lease to rely upon and comply with any notice or
demand from Mortgagee for payment of Rents to Mortgagee and Mortgagors
shall have no claim against any tenant for Rents paid by such tenant
to Mortgagee pursuant to such notice or demand.
2.1.5 Mortgagors at their sole cost and expense shall enforce the Leases in
accordance with their terms. Neither this Mortgage nor any action or
inaction on the part of Mortgagee shall release any tenant under any
Lease, any guarantor of any Lease or Mortgagors from any of their
respective obligations under the Leases or constitute an assumption of
any such obligation on the part of Mortgagee. No action or failure to
act on the part of Mortgagors shall adversely affect or limit the
rights of Mortgagee under this Mortgage or, through this Mortgage,
under the Leases.
2.1.6 All rights, powers and privileges of Mortgagee herein set forth are
deemed irrevocable, subject to the terms and conditions hereof, and
Mortgagors shall not take any action under the Leases or otherwise
which is inconsistent with this Mortgage or any of the terms hereof
and any such action inconsistent herewith or therewith shall be void.
Mortgagors shall, from time to time, upon request of Mortgagee,
execute all instruments and further assurances and all supplemental
instruments and take all such action as Mortgagee from time to time
may reasonably request in order to secure, preserve
<PAGE>
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and protect the interests intended to be assigned to Mortgagee hereby.
2.1.7 Mortgagors shall not, unilaterally or by agreement, subordinate,
amend, modify, extend, discharge, terminate, surrender, waive or
otherwise change any term of any of the Leases in any manner which
would violate this Mortgage. If the Leases shall be amended as
permitted hereby, they shall continue to be subject to the provisions
hereof without the necessity of any further act by any of the parties
hereto.
2.1.8 Nothing contained herein shall operate or be construed to (i) obligate
Mortgagee to perform any of the terms, covenants or conditions
contained in the Leases or Otherwise to impose any obligation upon
Mortgagee with respect to the Leases (including, without limitation,
any obligation arising out of any covenant of quiet enjoyment
contained in the Leases in the event that any tenant under a Lease
shall have been joined as a party defendant in any action by which the
estate of such tenant shall be terminated) or (ii) place upon
Mortgagee any responsibility for the operation, control, care,
management or repair of the Premises.
ARTICLE III
EVENTS OF DEFAULT AND REMEDIES
SECTION 3.1. Events of Default.
The following are "Events of Default" as mentioned in the Indenture:
"(i) failure by the Issuers to pay interest or any Additional
Amounts or Reimbursement Payments related thereto on any of
the Securities when it becomes due and payable and the
continuance of any such failure for 30 days; or
(ii) failure by the Issuers to pay the principal or premium, if
any, on any of the Securities, or any Additional Amounts or
Reimbursement Payments related thereto, or any Liquidated
Damages when it becomes due and payable, whether at stated
maturity, upon redemption, upon acceleration or otherwise;
or
(iii) either Issuer shall fail to comply with any of its
agreements or covenants in Section 5.01 or Section 4.15; or
(iv) failure by either of the Issuers to comply with any other
covenant in this Indenture or the Security Documents and
continuance of such failure for 30 days after notice of such
failure has been given to the Issuers by the Trustee or to
the Issuers and the Trustee by the
<PAGE>
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holders of at least 25% of the aggregate principal amount of
the Securities then outstanding; or
(v) failure by either of the Issuers or any of their
Subsidiaries to make any payment when due or during any
applicable grace period in respect of any Indebtedness of
the Issuers or any of such Subsidiaries that has an
aggregate outstanding principal amount of TWO MILLION FIVE
HUNDRED THOUSAND UNITED STATES DOLLARS (US$ 2,500,000.-) or
more; or
(vi) a default under any Indebtedness of either of the Issuers or
any Subsidiary, whether such Indebtedness now exists or
hereafter shall be created, if (A) such default results in
the holder or holders of such Indebtedness causing the
Indebtedness to become due prior to its stated maturity and
(B) the outstanding principal amount of any other such
Indebtedness, the maturity of which has been so accelerated,
aggregate (US$ 2,500,000.-) or more at any one time; or
(vii) one or more final judgments or orders that exceed US$
2,500,000.- in the aggregate for the payment of money have
been entered by a court or courts of competent jurisdiction
against either of the Issuers or any Subsidiary of the
Issuers and such judgment or judgements have not been
satisfied, stayed, annulled or rescinded within 60 days of
being entered; or
(viii) any of the Security Documents ceases to be in full force and
effect or any of the Security Documents ceases to give the
Collateral Agent the Liens, rights, powers and privileges
purported to be created thereby; or
(ix) the occurrence of a Change of Control; or
(x) on or prior to the Fifth Anniversary, (A) the sale, transfer
or other disposition by the Issuers and their Restricted
Subsidiaries of all or substantially all of the Collateral
located at or used in connection with the St. Eustatius
Facility or Point Tupper Facility, (B) all or substantially
all of the Collateral located at the St. Eustatius Facility
or Point Tupper Facility is destroyed or is subject to a
Taking or (C) the Issuers and their Restricted Subsi-
<PAGE>
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diaries consummate Asset Sales with a fair market value in
excess of US$ 100,000,000.- in the aggregate, provided that
such Event of Default may be cured by the Issuers making an
Offer to Purchase the maximum principal amount of the
Securities that may be purchased out of the net proceeds
received from the events specified in clauses (A)-(C) above;
provided further that such Offer to Purchase shall be made
within 60 days of the event specified above at a price of
105% (100% with respect to clause (B) above) of the
principal amount of the Securities, plus accrued and unpaid
interest, if any, thereon, and otherwise in accordance with
the procedures set forth in Section 4.15(d); or
(xi) an Issuer or any Subsidiary Guarantor (a) admits in writing
its inability to pay its debts generally as they become due,
(b) commences a voluntary case or proceeding under any
Bankruptcy Law with respect to itself, (c) consents to the
entry of a judgment, decree or order for relief against it
in an involuntary case or proceeding under any Bankruptcy
Law, (d) consents to the appointment of a Custodian (as
defined below) of it or for substantially all of its
property, (e) consents to or acquiesces in the institution
of a bankruptcy or an insolvency proceeding against it, (f)
makes a general assignment for the benefit of its creditors
or (g) takes any partnership or corporate action, as the
case may be, to authorize or effect any of the foregoing; or
(xii) a court of competent jurisdiction enters a judgment, decree
or order for relief in respect of an Issuer or any
Subsidiary Guarantor in an involuntary case or proceeding
under any Bankruptcy Law, which shall (a) approve as
properly filed a petition seeking reorganization,
arrangement, adjustment or composition in respect of an
Issuer or any Subsidiary Guarantor, (b) appoint a Custodian
of an Issuer or a Subsidiary Guarantor of for substantially
all of any of their property or (c) order the winding-up or
liquidation of its affairs; and such judgment, decree or
order shall remain unstayed and in effect for a period of 60
consecutive days, or
<PAGE>
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(xiii) a court of competent jurisdiction in the Netherlands
Antilles grants to an Issuer or any subsidiary guarantor a
suspense of payment ("surseance van betaling") or Issuer or
any Subsidiary Guarantor bankrupt ("in staat van
faillissement verklaard")" and such other Events of Default
as may be included in the Indenture, insofar permitted by
present and future applicable law.
SECTION 3.2. Remedies in Case of an Event of Default.
If an Event of Default (as defined in the Indenture) shall have
occurred and be continuing, Mortgagee is hereby irrevocably authorized
and empowered by the Mortgagors (but is not obligated hereunder to),
in addition to any other action permitted by law (and not limited in
any manner by the remedies contained in the Notes and the Indenture or
any other Secured Instrument), to take one or more of the following
actions subject to the limitations and restrictions of the Indenture
and/or the applicable Intercreditor Agreements;
3.2.1 by written notice to Mortgagors, declare the entire principal amount
of the Secured Obligations to be due and payable immediately;
3.2.2 personally, or by it agents or attorneys, (i) enter into and upon all
or any part of the Mortgagors Property and exclude Mortgagors, their
agents and servants wholly therefrom, (ii) use, operate, manage and
control the Premises, and conduct the business thereof, (iii) maintain
and restore the Mortgaged Property, (iv) make all reasonably necessary
or proper repairs, renewals and replacements and such useful
Alterations thereto and thereon as Mortgagee may deem advisable, (v)
manage, lease and operate the Mortgaged Property and carry on the
business thereof and exercise all rights and powers of Mortgagors with
respect thereto either in the name of Mortgagors or otherwise, or (vi)
collect and receive all earnings, revenues, rents, issues, profits and
income of the Mortgaged Property and any or every part thereof;
3.2.3 irrevocably authorized to sell the Mortgaged Property, in whole or in
part, at a public auction, in accordance with local custom all in
accordance with applicable law, so as to recover the costs, interest,
principal and other amounts due under the Indenture, the Notes and
this Mortgage and the other Secured Documents, which authorization
includes the determination of the conditions of such auction, receipt
and discharge for the purchase price, the transfer of the Mortgaged
Property and the authorization and performance, whichever appears to
be necessary for the legally
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effective implementation of such public auction;
3.2.4 take such steps to protect and enforce its rights whether by action,
suit or proceeding at law or in equity for the specific performance of
any covenant, condition or agreement in the Indenture, the Notes and
any other documents evidencing or securing the Secured Obligations or
in aid of the execution of any power granted in this Mortgage, or for
any foreclosure hereunder, or for the enforcement of any other
appropriate legal or equitable remedy or otherwise as Mortgagee shall
elect.
SECTION 3.3 Sale of Mortgaged Property if Event of Default Occurs; Proceeds of
Sale.
3.3.1 In case of any sale under this Mortgage by virtue of the exercise of
the power herein granted, or pursuant to any order in any judicial
proceeding or otherwise, the Mortgaged Property may be sold as an
entirety or in separate parcels in such manner or order as Mortgagee
in its sole discretion may elect. One or more exercises of powers
herein granted shall not extinguish or exhaust such powers, until the
entire Mortgaged Property is sold or all amounts secured hereby are
paid in full.
3.3.2 In the event of any sale made under or by virtue of this Article III,
the entire principal of and interest in respect of the Secured
Obligations, if not previously due and payable, shall, at the option
of Mortgagee, immediately become due and payable, anything in this
Mortgage to the contrary notwithstanding.
3.3.3 The proceeds of any sale made under or by virtue of this Article III,
together with any other sums which then may be held by Mortgagee under
this Mortgage, whether under the provisions of this Article III or
otherwise, shall, except as otherwise required by law, be applied in
accordance with the provisions of the Indenture and/or the applicable
Intercreditor Agreements. To the extent the proceeds of any sale made
under or by virtue of this Article III shall not be sufficient to
satisfy the Secured Obligations, Mortgagee shall be entitled to claim
to the fullest extent permitted by applicable law such part of the
Secured Obligations which has not been satisfied.
3.3.4 Mortgagee may bid for and acquire the Mortgaged Property or any part
thereof at any sale made under or by virtue of this Article III and,
in lieu of paying cash therefor, may make settlement for the purchase
price by crediting against the purchase price the unpaid amounts
outstanding to Mortgagee whether or not then due and owing in respect
of the Secured Obligations, after, to the extent permitted by
applicable law, deducting from the sales price
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the expense of the sale and the reasonable costs of the action or
proceedings and any other sums that Mortgagee is authorized to deduct
under this Mortgage.
3.3.5 To the extent permitted by applicable law, Mortgagee may adjourn from
time to time any sale by it to be made under or by virtue of this
Mortgage by announcement at the time and place appointed for such sale
or for such adjourned sale or sales and Mortgagee, without further
notice or publication, may make such sale at the time and place to
which the same shall be so adjourned.
SECTION 3.4 Additional remedies in case of an Event of Default.
3.4.1 Mortgagee shall be entitled to recover judgment as aforesaid either
before, after or during the pendency of any proceedings for the
enforcement of the provisions of this Mortgage, and the right of
Mortgagee to recover such judgment shall not be affected by any entry
or sale hereunder, or by the exercise of any other right, power or
remedy for the enforcement of the provisions of this Mortgage, or the
foreclosure of, or absolute conveyance pursuant to this Mortgage. In
case of proceedings against any Mortgagor in insolvency or bankruptcy
or any proceedings for its reorganization or involving the liquidation
of its assets, Mortgagee shall be entitled to prove the whole amount
of principal and interest and other payments, charges and costs due in
respect of the Secured Obligations to the full amount thereof without
deducting therefrom any proceeds obtained from the sale of the whole
or any part of the Mortgaged Property; provided, however, that in no
case shall Mortgagee receive a greater amount than the aggregate of
such principal, interest and such other payments, charges and costs
(with interest at a Default Rate) from the proceeds of the sale of the
Mortgaged Property and the distribution from the estate of Mortgagor.
3.4.2 Any recovery of any judgment by Mortgagee and any levy of any
execution under any judgment upon the Mortgaged Property shall not
affect in any manner or to any extent the Lien and security right
created and evidenced hereby upon the Mortgaged Property or any part
thereof, or any conveyances, powers, rights and remedies of Mortgagee
hereunder, but such conveyances, powers, rights and remedies shall
continue unimpaired as before.
3.4.3 Any moneys collected by Mortgagee under this Section 3.4 shall be
applied in accordance with the provisions of Sub-Section 3.3.3.
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SECTION 3.5 Legal Proceedings After an Event of Default.
3.5.1 After the occurrence of any Event of Default and immediately upon the
commencement of any action, suit or legal proceedings to obtain
judgement for the Secured Obligations or any part thereof, or of any
proceedings to foreclose this Mortgage or of any other proceedings in
aid of the enforcement of this Mortgage, Mortgagors shall enter its
voluntary appearance in such action, suit or proceeding.
3.5.2 Upon the occurrence of an Event of Default, Mortgagee shall be
entitled forthwith as a matter of right, concurrently or independently
of any other right or remedy hereunder either before or after
declaring the Secured Obligations or any part thereof to be due and
payable, to the appointment of a receiver or other custodian who shall
be responsible to oversee on behalf of the Mortgagee the enforcement
of Mortgagee's rights as a secured party hereunder in accordance with
the provisions of the Mortgage and applicable law and without giving
notice to any party and without regard to the adequacy or inadequacy
of any security for the Secured Obligations or the solvency or
insolvency of any person or entity then legally or liable for the
Secured Obligations or any portion thereof. Mortgagors hereby consents
to the appointment of such receiver.
3.5.3 Mortgagors shall not (i) at any time insist upon or plead or in any
manner whatsoever claim or take any benefit or advantage of any stay
or extension or moratorium law, any exemption from execution or sale
of the Mortgaged Property or any part thereof, wherever enacted, now
or at any time hereafter in force, which may affect the covenants and
terms of performance of this Mortgage, (ii) claim, take or insist on
any benefit or advantage of any law now or hereafter in force
providing for the valuation or appraisal of the Mortgaged Property, or
any part thereof, prior to any sale or sales of the Mortgaged Property
which may be made pursuant to this Mortgage, or pursuant to any
decree, judgement or order of any court of competent jurisdiction of
(iii) after any such sale or sales, claim or exercise any right under
any statute heretofore or hereafter enacted to redeem the property so
sold or any part thereof. To the extent permitted by applicable law,
Mortgagors hereby expressly (i) waive all benefit or advantage of any
such law or laws, including, without limitation, any statute of
limitations applicable to this Mortgage, and all rights to trial by
jury in any or proceeding relating to the enforcement of this Mortgage
(ii) waive any objection which it may now or hereafter have to the
laying of venue of any action, suit or proceeding brought in
connection with this Mortgage in any juris-
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diction to which it has consented under the Indenture, any Indenture
Document and/or the applicable Intercreditor Agreement and further
waives and agrees not to plead that any such action, suit or
proceeding brought in any such jurisdiction has been brought in an
inconvenient forum and (iv) covenants not to delay or impede the
execution of any power granted or delegated to Mortgagee by this
Mortgage, but to suffer and permit the execution of every such power
as though no such law or laws had been made or enacted.
SECTION 3.6 Remedies Not Exclusive.
No remedy conferred upon or reserved to Mortgagee by this Mortgage is intended
to be exclusive of any other remedy or remedies, and each and every such remedy
shall be cumulative, insofar as permittable under applicable law, and shall in
addition to every other remedy given under this Mortgage or now or hereafter
existing at law. Any delay or omission of Mortgagee to exercise any right or
power accruing upon the occurence of an Event of Default shall not impair any
such right or power and shall not be construed to be a waiver of or acquiescence
in any such Event of Default. Every power and remedy given by this Mortgage may
be exercised from the time to time concurrently or independently, when and as
often as may be deemed expedient by Mortgagee in such order and manner as
Mortgagee, in its sole discretion may elect. If Mortgagee accepts any moneys
required to be paid by Mortgagors under this Mortgage after the same become due,
such acceptance shall not constitute a waiver of the right either to require
prompt payment, when due, of all other sums secured by this Mortgage or to
declare an Event of Default with regard to subsequent default to subsequent
defaults. If Mortgagee accepts any moneys required to be paid by Mortgagors
under this Mortgage in an amount less than the sum then due, such acceptance
shall be deemed an acceptance on account and on the condition that it shall not
constitute a waiver of the obligation of Mortgagors to pay the entire sum then
due, and Mortgagors' failure to pay the entire sum then due shall be and
continue to be a default hereunder notwithstanding acceptance of such amount on
account.
ARTICLE IV
CERTAIN DEFINITIONS
The following terms shall have the following respective meanings:
"Additional Undertaking" means (a) cash or Cash Equivalents or (b) a
Surety Bond, Guaranty of Letter of Credit which is (i) provided by a
Person, (ii) whose long-term unsecured debt is rated at least AA (or
equivalent) and (iii) is otherwise satisfactory to Mortgagee.
Additional Undertakings shall be addressed directly to Mortgagee and
shall name Mortgagee as the beneficiary thereof and the party entitled
to make claims thereunder.
"Business Day" means any day other than a Saturday, Sunday or any
other day on which banking institutions in the City of New York are
required or
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authorized by law or other governmental action to be closed;
"Cost of Construction" means the sum, so far as it relates to the
reconstructing, renewing, restoring or replacing of the Mortgaged
Property of (i) obligations incurred or assumed by Mortgagors or
Undertaken by tenants pursuant to the terms of the Leases for labor,
materials and other expenses and to contractors, builders and
materialmen; (ii) the costs of contract bonds and of insurance of all
kinds that may reasonably be deemed by Mortgagors to be necessary
during the course of construction; (iii) the expenses incurred or
assumed by Mortgagors (or tenant under the Lease performing such
Restoration) for test borings, surveys, estimates, permits, any Plans
and Specifications and preliminary investigations therefor, and for
supervising construction, as well as for the performance of all other
duties required by or reasonably necessary for proper construction;
(iv) ad valorem property taxes levied upon the Premises during
performance of any Restoration; (v) any costs or other charges in
connection with obtaining counsel opinions that may be required or
necessary in connection with a Restoration; and (vi) any costs or
other charges in connection with obtaining services (including legal
counsel) that may reasonably be deemed by Mortgagors to be necessary
in connection with the construction.
"Financial Instruments" means (i) securities issued or directly and
fully guaranteed or insured by the United States or the Canadian
Government or any agency or instrumentality thereof having maturities
of not more than 12 months from the date of acquisition and rated at
least "A" or the equivalent by either Moody's Investors Service, Inc.
or Standard & Poor's rating agencies, (ii) certificates of deposit and
Eurodollar time deposits with maturities of 12 months or less from the
date of acquisition, bankers' acceptances with maturities not
exceeding 12 months and overnight bank deposits, in each case with any
domestic commercial bank having capital and surplus in excess of US$
250 million and a Keefe Bank Watch Rating of B or better, (iii)
repurchase obligations with a term of not more than 30 days for
underlying securities of the types described in clauses (i) and (ii)
entered into with any financial institution meeting the qualifications
specified in clause (ii) above, (iv) commercial paper having the
highest rating obtainable from Moody's Investors Service, Inc. or
Standard & Poor's ratings agencies and in each case maturing within 12
months after the date of acquisition, (v) securities with maturities
of 12 months or less from the date of acquisition backed by standby or
direct pay letters of credit issued by any bank satisfying the
requirement of clause (ii) above, and (vi) any money-market fund
sponsored by any registered broker dealer or mutual fund distributor
that invests solely in instruments of the type set forth above.
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"Guaranty" means the unconditional guarantee of payment of any
corporation or partnership organized and existing under the laws of
the United States of America or any State or the District of Columbia
or Canada or province thereof that has a long-term unsecured debt
rating (as determined by each Rating Agency) at the time such
guarantee is delivered equal to or higher than the then current rating
of the Notes, given to Mortgagee, accompanied by an opinion of counsel
to such guarantor to the effect that such guarantee has been duly
authorized, executed and delivered by such guarantor and constitutes
the legal, valid and binding obligation of such guarantor enforceable
against such guarantor by Mortgagee in accordance with its terms
subject to customary exceptions at the time for opinions for such
instruments, together with an Opinion of Counsel to the effect that,
taking into account the purpose under this Mortgage for which such
guarantee will be given, such guarantee and accompanying opinion are
responsive to the requirements of this Mortgage.
"Letter of Credit" means a clean, irrevocable, unconditional letter of
credit in favor of Mortgagee and entitling Mortgagee to draw thereon
in the City of New York issued by a bank with a letter of credit
evaluation determined by each Rating Agency, at the time such letter
of credit is delivered, in one of the three highest generic rating
categories of such Rating Agency.
"Rating Agency" means Standard & Poor's Ratings Services or any
successor thereto if such Person shall then be rating corporate
obligations, and Moody's Investor's Service, Inc. or any successor
thereto, if such Person shall then be rating corporate obligations,
or, if neither such Person shall be rating corporate obligations any
other organization of generally recognized standing, selected by
Mortgagee.
"rated or rating" in connection with long-term unsecured debt, means
that the Person in question has, or has been determined to be
qualified for, the rating in question by the Rating Agency.
SECTION 4.1 Indemnification: Reimbursement.
Each and every obligation of Mortgagors to indemnify and hold harmless the
Mortgagee, as trustee under the Indenture, containing in Section 7.07 of the
Indenture is incorporated herein mutatis mutandis as an obligation of Mortgagors
hereunder to indemnify Mortgagee and/or Marine Midland Bank in its individual
capacity and the officers, directors, employees, agents and affiliates of
Mortgagee (each, an "Indemnified Party"). In addition to the foregoing,
Mortgagors shall reimburse Mortgagee and/or Midland Bank in its individual
capacity, upon demand, for all costs and expenses reasonably incurred by
Mortgagee and/or Marine Midland Bank in its individual capacity in connection
with the administration and enforcement of this Mortgage. If any action or
proceeding, including, without limitation, bankruptcy or insolvency proceedings,
is
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commenced to which action or proceeding Mortgagee is made a party or in which it
becomes necessary to defend or uphold the Lien or validity of this Mortgage,
Mortgagors shall, upon demand, reimburse Mortgagee for all expenses (including,
without limitation, reasonable attorneys' and agents' fees and disbursements)
incurred by Mortgagee in such action or proceeding. In any action or proceeding
to foreclose this Mortgage or to recover or collect the Secured Obligations, the
provisions of law relating to the recovery of costs, disbursements and
allowances shall prevail unaffected by this covenant. Mortgagor's obligations
under this Section 4.8 shall survive the satisfaction of this Mortgage and the
discharge of Mortgagors' other obligations hereunder.
SECTION 4.2 Choice of law and consent to jurisdiction.
The terms and provisions of this Mortgage and the enforcement hereof is governed
by and construed in accordance with the laws of the Netherlands Antilles, and
any issues of interpretational liability arising hereunder shall be brought
before the competent court of the Netherlands Antilles.
SECTION 4.3 Changes in Writing.
This Mortgage may not be modified, amended, discharged or waived in whole or in
part except by an instrument in writing executed in accordance with the
Indenture and signed by (i) Mortgagors, to the extent any modification,
amendment, discharge or waiver is sought to be enforced against Mortgagors, and
(ii) Mortgagee, in accordance with the provisions of the Indenture to the extent
any modification, amendment, discharge or waiver is sought to be enforced
against Mortgagee.
SECTION 4.4 No Merger.
The rights and Lien created by this Mortgage shall not, under any circumstances,
be held to have merged into any other Lien or interest now owned or hereinafter
acquired by Mortgagee unless Mortgagee shall have consented to such merger in
writing.
SECTION 4.5 Concerning Mortgagee.
4.5.1 Mortgagee shall be entitled to rely upon any written notice,
statement, certificate, order or other document reasonable believed by
it to be genuine and correct and to have been signed, sent or made by
the proper person, and with respect to all matters pertaining to this
Mortgage and its duties hereunder, upon advice of counsel selected by
it.
4.5.2 Mortgagors irrevocably recognize as the mortgagee under this
instrument any party who has duly succeeded to the interest of
Mortgagee under the Indenture.
4.5.3 Mortgagee may resign from the performance of all its functions and
duties hereunder at any time by giving ten (10) days prior written
notice to Mortgagors. Such resignation shall take effect upon the
appointment of and the assignement of the Secured Obligations to a
successor Mortgagee pursuant to the provisions of the Indenture. The
Mortgagors shall be obligated to acknowledge the same and agree
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with the recording thereof in the appropriate Public Register.
4.5.4 Mortgagee has been appointed as trustee pursuant to the Indenture. The
actions of Mortgagee hereunder are subject to the provisions of the
Indenture. Mortgagee shall have the right hereunder to make demands,
to give notices, to exercise or refrain from exercising any rights,
and to take or refrain from taking and action (including, without
limitation, the release or substitution of Mortgaged Property), in
accordance with this Mortgage and the Indenture, and applicable
Netherlands Antilles law.
SECTION 4.6 Mortgagee's Right To Sever Indebtedness.
4.6.1 Mortgagors acknowledge that (a) the Mortgaged Property does not
constitute the sole source of security for the payment and performance
of the Secured Obligations and that the Secured Obligations are also
secured by property of Mortgagors and their affiliates in other
jurisdictions (all such property, collectively, the "Collateral"), (b)
the number of such jurisdictions and the nature of the transaction of
which this instrument is a part are such that it would have been
impracticable for the parties to allocate to each item of Collateral a
specific loan amount and to execute in respect of such item a separate
indenture and (c) Mortgagors intend that Mortgagee has the same rights
with respect to the Mortgaged Property, in foreclosure or otherwise,
that Mortgagee would have if each item of Collateral had been
mortgaged or pledged pursuant to a separate indenture and mortgage or
security document. In furtherance of such intent, Mortgagors agree
that Mortgagee may at any time by notice (an "Allocation Notice") to
Mortgagors allocate a portion (the "Allocated Indebtedness") of the
Secured Obligations to the Mortgaged Property and sever from the
remaining Secured Obligations the Allocated Indebtedness. From and
after the giving of an Allocation Notice with respect to the Mortgaged
Property, the Secured Obligations hereunder shall be limited to the
extent set forth in the Allocation Notice and (as so limited) shall,
for all purposes, be construed as a separate loan obligation of
Mortgagors unrelated to the other transactions contemplated by the
Indenture or any document related to either thereof. To the extent
that the proceeds on any foreclosure of the Mortgaged Property shall
exceed the Allocated Indebtedness, such proceeds shall belong to
Mortgagors and shall not be available hereunder to satisfy any Secured
Obligations of Mortgagors other than the Allocated Indebtedness. In
any action or proceeding to foreclose of the Lien, this Mortgage or in
connection
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with any power of sale foreclosure exercised under this Mortgage
commenced after the giving by Mortgagee of an Allocation Notice, the
Allocation Notice shall be conclusive proof of the limits of the
Secured Obligations hereby secured, and Mortgagors may introduce, by
way of defense or counterclaim, evidence thereof in any such action or
proceeding.
4.6.2 Mortgagors hereby waive, to the greatest extent permitted under law,
the right to a discharge of any of the Secured Obligations under any
statute or rule of law now or hereinafter in effect which provides
that foreclosure of this Mortgage exercised under this Mortgage
constitutes the exclusive means for satisfaction of the Secured
Obligations or which makes unavailable a deficiency judgement because
Mortgagee elected to proceed with a power of sale foreclosure or
because of any failure by Mortgagee to comply with laws that prescribe
conditions to the entitlement to a deficiency judgement. In the event
that, notwithstanding the foregoing waiver, any court shall for any
reason hold that Mortgagee is not entitled to a deficiency judgement,
Mortgagors shall not (a) introduce in any other jurisdiction such
judgement as a defense to enforcement against Mortgagors of any remedy
in the Indenture, any Security Document or any document related
thereto or (b) seek to have such judgement recognized or entered in
any other jurisdiction, and any such judgement shall in all events be
limited in application only to the state or jurisdiction where
rendered.
4.6.3 In the event any instrument in addition to the Allocation Notice is
necessary to effectuate the provisions of this Section 4.7, including
without limitation, any amendment to this Mortgage, any substitute
promissory note or affidavit or certificate of any kind, Mortgagee may
execute, deliver or record such instrument as the attorney-in-fact of
Mortgagors in the event that Mortgagors fails to deliver such
instrument within ten (10) days after delivery to Mortgagors of a
request therefor. Such power of attorney is coupled with an interest
and is irrevocable.
SECTION 4.7 Waiver of Stay.
4.7.1 Mortgagors agree that in the event that Mortgagors or any property or
assets of Mortgagors shall hereafter become the subject of a voluntary
or involuntary proceeding under the applicable bankruptcy laws or
Mortgagors shall otherwise be a party to any bankruptcy, insolvency,
moratorium or similar proceeding then, in any such case, whether or
not Mortgagee has commenced foreclosure proceedings under this
Mortgage, Mortgagee shall be entitled to relief from any such
automatic stay as it relates to
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the exercise of any of the rights (including, without limitation, any
foreclosure proceedings) available to Mortgagee as provided in this
Mortgage or in any other document evidencing or secured the Secured
Obligations insofar as permitted under applicable law.
4.7.2 Mortgagee shall have the right to petition or move any court having
jurisdiction over any proceeding described in subsection 5.12.1 for
the purposes provide therein, and Mortgagors agree (i) not to oppose
any such petition or motion and, (ii) at Mortgagors' sole cost and
expense, to assist and cooperate with Mortgagee, as may be requested
by Mortgagee, from time to time in obtaining any relief requested by
Mortgagee, including, without limitation, by filing any such
petitions, supplemental petitions, requests for relief, documents,
instruments or other items from time to time requested by Mortgagee or
any such court.
SECTION 4.8 No Credit for Payment of Taxes or Impositions.
Mortgagors shall not be entitled to any credit against the principal, premium,
if any, or interest payable on the Notes, and Mortgagors shall not be entitled
to any credit against any other sums which may become payable under the terms
thereof or hereof by reason of the payment of any tax or other impositions on
the Mortgaged property or any part thereof.
SECTION 4.9 Stamp and Other Taxes.
Subject to the provisions of section 1.5.5. relating to permitted contests,
Mortgagors shall pay any and all documentary stamp taxes, with interest and
fines and penalties, and any mortgage recording taxes or fees, with interest and
fines and penalties, that may hereafter be levied, imposed or assessed under or
upon or by reason of this Mortgage or the Secured Obligations or any instruments
or transaction affecting or relating to either thereof and in default thereof
Mortgagee may advance the same and the amount so advanced shall be payable by
Mortgagee to Mortgagors within ten (10) days after demand therefor, together
with interest thereon at the Default Rate.
SECTION 4.10 Estoppel Certificates.
Each party hereto shall, from time to time, upon twenty (20) days prior written
request by the other party, execute, acknowledge and deliver to such other party
a certificate signed by an authorized officer or officers stating that this
Mortgage and the other Indenture Documents are unmodified and in full force and
effect (or, if there have been modifications, that this Mortgage and such other
Indenture Documents, as applicable, are in full force and effect as modified and
setting forth such modifications) and stating the date to which payments have
been made in respect of the Secured Obligations.
SECTION 4.11 Additional Security.
Without notice to or consent of Mortgagors and without impairment of the Lien
and rights created by this Mortgage, Mortgagee may accept (but Mortgagors shall
not be obliged to furnish) from Mortgagors or from any other
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Person or Persons, additional security for the Secured Obligations. Neither the
giving of this Mortgage nor the acceptance of any such additional security shall
prevent Mortgagee from resorting, first, to such additional security, and,
second, to the security created by this Mortgage without affecting Mortgagee's
rights under this Mortgage.
SECTION 4.12 Release.
4.12.1 This Mortgage shall be released from the Mortgaged Property in
accordance with the provisions of the Indenture. Mortgagee, on the
written request and at the expense of Mortgagors, will execute and
deliver such proper instruments of release and satisfaction or
assignment, and any such instrument, when duly executed by Mortgagee
and duly recorded by Mortgagors in the place where this Mortgage is
recorded, shall conclusively evidence the release of this Mortgage.
4.12.2 Without limiting the generalities of the foregoing provision of the
first sentence of Section 4.12.1 in the event of voluntary sale of the
Mortgaged Property, in whole or in part, the Mortgage, in pursuance of
this deed, shall not be cancelled without the consent of the
Mortgagee.
SECTION 4.13 Expenses of Collection.
In the event this Mortgage or any other instrument evidencing the Secured
Obligations is placed in the hands of counsel for collection of any amount
payable hereunder or thereunder or for the enforcement of any of the provisions
hereof of thereof, Mortgagors agree to pay any and all reasonable costs
associated therewith incurred by Mortgagee, either with or without the
institution of an action, suit or other proceeding, in addition to all costs,
disbursements and allowances provided by law, all such costs to be paid upon
demand, together with interest thereon at the Default Rate from the date of
notice or incurring thereof, and the same shall deemed to be secured hereby.
SECTION 4.14 Business Days.
In the event any time period or any date provided in this Mortgage ends or falls
on a day other than a Business Day, then such time period shall be deemed to end
and such date be deemed to fall on the next succeeding Business Day, and
performance herein may be made on such Business Day, with the same force and
effect as if made on such other day. The appearer sub 2, acting as
aforementioned, declared to hereby accept the above Mortgage under the terms and
conditions referred to hereinabove. The appearers declared further to elect
domicile at the Mortgage Registry at Sint Eustatius, Netherlands Antilles.
SECTION 4.15 Severability.
In the event any one or more of the provisions contained in this Mortgage shall
for any reason be held to be invalid, illegal or unenforceable in any respect,
such invalidity, illegality or unenforceability shall not affect any other
provision of this Mortgage, but this Mortgage shall be construed as if such
invalid, illegal or
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unenforceable provision had never been contained herein or therein. The
invalidity of any provision of this Mortgage in any one jurisdiction shall not
affect or impair in any manner the validity of such provision in any other
jurisdiction.
SECTION 4.16 Notices.
Unless otherwise provided herein or in the Indenture, any notice or other
communication herein shall be given in the manner and at the address set forth
in the Indenture, or as to any party at such other address as shall be
designated by such party in a written notice to the other party.
SECTION 4.17 Covenants to run with the Mortgaged Property.
All of the grants, covenants, terms, provisions and conditions in this Mortgage
shall run with the Mortgaged Property and shall apply to and bind the successors
and assignes of each Mortgagor.
SECTION 4.18 Captions; Gender and Number
The captions and section headings of this Mortgage are for convenience only and
are not to be used to define the provisions hereof. All terms contained herein
shall be construed, whenever the context of this Mortgage requires, so that the
singular includes the plural and so that the masculine includes the feminine.
DESCRIPTION AND TITLE OF THE MORTGAGED PROPERTY:
1. the estates "Little Mountains" and "Tumble Down Dick", situated on the
island of Sint Eustatius, the Netherlands Antilles, measuring 1.178.920 m2,
described in certificate of admeasurement 1-K of September 17, 1949, with
all the structures, appurtenances to land, improvements thereon erected and
anything else that by its nature, intended use or by accession belongs
thereto, which property was acquired by STATIA TERMINALS N.V. by means of
the transcription at the Office of the Registrar of Mortgages in Sint
Eustatius on August 29, 1975 in Registrar C, Volume 15, number 16, of a
true copy of a deed of sale and purchase, executed on August 15, 1975
before the undersigned;
2. a parcel of land situated at Sint Eustatius, the Netherlands Antilles,
measuring 12.180 m2, described in certificate of admeasurement number 15 of
1971, with all the structures, appurtenances to land, improvements thereon
erected and anything else that by its nature, intended use or by accession
belongs thereto, which property was acquired by STATIA TERMINALS N.V. by
means of the transcription at the Office at the Registrar of Mortgages in
Sint Eustatius on September 26, 1977 in Registrar C, Volume 16, number 10,
of a true copy of a deed of sale and purchase, executed on September 13,
1977 by J.G.M. Speetjens, a civil law notary in Sint Maarten, the
Netherlands Antilles;
3. the property right to construct and to legally own constructions and
improvements (in Dutch: recht van opstal) on a parcel of land, situated in
Sint Eustatius in the District of "Tumble Down Dick", described in
certificate of admeasurement 63 of 1994 (which parcel of land is part of
the land as
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-41-
described in certificate of admeasurement 1-K of September 17, 1949),
measuring 163,100 m2, improvements thereon erected and anything else that
by its nature, intended use or by accession belongs thereto,
which right was acquired by STATIA LABORATORY SERVICES N.V. by means of the
transcription at the Office of the Registrar of Mortgages in Sint
Eustatius, on February 15, 1995 in Registrar C, Volume 13 number 343 of a
true copy of a deed of creation of a "recht van opstal", executed on
February 8, 1995 before the undersigned;
4. a parcel of land situated at Sint Eustatius, the Netherlands Antilles, part
of Roots, measuring 30.080 m2, described in certificate of admeasurement
number 28 of 1978, with all the structures, appurtenances to land,
improvements thereon erected and anything else that by its nature, intended
use or by accession belongs thereto, which property was acquired by BICEN
DEVELOPMENT CORPORATION N.V. by means of the transcription at the Office at
the Registrar of Mortgages in Sint Eustatius on November 24, 1978 in
Registrar C, Volume 16, number 49, of a true copy of a deed of sale and
purchase, executed on November 10, 1978 by R.J.A. Palm, a civil law notary
in Curacao, the Netherlands Antilles;
5. two plots of land situated at Sint Eustatius, the Netherlands Antilles,
situated in the district of Concordia on the Northwestern side of the
public road leading to English Quarter, measuring 8.100 m2, described in
certificate of admeasurement number 1 of 1976 and respectively measuring
8.064 m2, described in certificate of admeasurement number 2 of 1976, which
property was acquired by BICEN DEVELOPMENT CORPORATION N.V. by means of the
transcription at the Office at the Registrar of Mortgages in Sint Eustatius
on March 28, 1977 in Registrar C, Volume 15, number 119, of a true copy of
a deed of sale and purchase, executed on March 18, 1977 by R.J.A. Palm,
aforementioned;
6. a parcel of land situated at Sint Eustatius, the Netherlands Antilles,
measuring 1.380.750 m2 or approximately 341.178 acre, situated at
Schotsenhoek described in certificate of admeasurement number 1 of 1977,
with all the structures, appurtenances to land, improvements thereon
erected and anything else that by its nature, intended use or by accession
belongs thereto, which property was acquired by SARA TRUST COMPANY N.V. by
means of the transcription at the Office at the Registrar of Mortgages in
Sint Eustatius on September 8, 1980 in Registrar C, Volume 16, number 99,
of a true copy of a deed of sale and purchase, executed on August 27, 1980
by J.G.M. Speetjens, aforementioned.
A Property and Contour Plan of the Mortgaged Property will be attached to this
document.
The appearers, acting as aforementioned, declared to elect domicile at the
Office of the Registrar of Mortgages in Oranjestad, St. Eustatius.
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The appearers are known to me.
IN WITNESS WHEREOF
this deed was drawn up at Curacao on the day mentioned in the heading hereof.
After the contents of the deed were factually stated to the appearers, the
appearers unanimously declared to be informed of the contents of the deed and
not to desire a complete reading aloud thereof.
Thereupon this deed was after abbreviated reading aloud signed by the appearers
and by me.
(was signed) I.R. Gouverneur; R.Th. Mirk; Smeets.
ISSUED FOR TRUE COPY!
[SEAL] [SIGNATURE
ILLEGIBLE]
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================================================================================
FIXED AND FLOATING CHARGE DEBENTURE
Made on November 27, 1996
Between
STATIA TERMINALS CANADA, INCORPORATED
as Debtor
and
MARINE MIDLAND BANK
as Holder
================================================================================
MCMILLAN BINCH
---------
BARRISTERS & SOLICITORS
<PAGE>
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TABLE OF CONTENTS
RECITALS.....................................................................1
ACKNOWLEDGMENT AND PROMISE TO PAY......................................2
GRANTING CLAUSES.......................................................2
HABENDUM...............................................................7
COVENANTS..............................................................8
SECTION 1 -- WARRANTIES, REPRESENTATIONS AND COVENANTS OF DEBTOR.............8
1.1 Authority and Validity...........................................8
1.2 Good Title.......................................................8
1.3 Chief Executive Office; Records; Change of Name..................9
1.4 Location of Equipment and Inventory..............................9
1.5 No Consents.....................................................10
1.6 After-Acquired Intellectual Property............................10
1.7 Special Provisions Regarding Intellectual Property..............10
(a) Applications..............................................10
(b) Restriction on Licensing Intellectual Property............11
1.8 Holder May Perform; Holder Appointed Attorney-in-Fact...........11
1.9 Recording Documentation to Assure Lien; Fees and Expenses.......11
1.10 Payment of Taxes, Insurance Premiums, Assessments; Compliance
with Law and Insurance Requirements. ..........................12
1.11 Certain Tax Law Changes.........................................15
1.12 Required Insurance Policies.....................................15
1.13 Failure to Make Certain Payments................................18
1.14 Inspection......................................................18
1.15 Debtor to Maintain Improvements.................................18
1.16 Acquisition Documents...........................................18
1.17 Debtor's Obligations with Respect to Leases.....................19
1.18 Transfer Restrictions...........................................21
1.19 Destruction; Condemnation.......................................22
(a) Destruction; Insurance Proceeds...........................22
(b) Condemnation; Assignment of Award.........................23
1.20 Alterations.....................................................23
1.21 Hazardous Material..............................................23
1.22 Asbestos........................................................26
1.23 Books and Records; Reports......................................27
1.24 No Claims Against Holder........................................27
1.25 Utility Services................................................27
1.26 Land Swap.......................................................27
1.27 Accounts, Inventory and other Floating Charge Collateral........28
(a) Special Representations and Warranties....................28
(b) Maintenance of Records....................................29
(i)
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(c) Sale of Accounts, Inventory and other Floating Charge
Collateral................................................29
(d) Collection................................................29
SECTION 2 -- ASSIGNMENT OF RENTS; SECURITY AGREEMENT........................29
2.1 Assignment of Leases, Rents, Issues and Profits.................29
2.2 Security Interest in Personal Property..........................32
SECTION 3 -- EVENTS OF DEFAULT AND REMEDIES.................................32
3.1 Remedies in Case of an Event of Default.........................32
3.2 Sale of Mortgaged Property If Event of Default Occurs;
Proceeds of Sale................................................34
3.3 Additional Remedies in Case of an Event of Default..............36
3.4 Additional Remedies in Respect of Intellectual Property.........37
3.5 Legal Proceedings After an Event of Default.....................37
3.6 Remedies Not Exclusive..........................................38
3.7 No Additional Rights for Debtor Hereunder.......................39
SECTION 4 -- CERTAIN DEFINITIONS............................................39
4.1 Definitions.....................................................39
(a) Accounts .................................................39
(b) Accounts Proceeds.........................................39
(c) Additional Undertaking....................................39
(d) Business Day..............................................40
(e) Cash Equivalents..........................................40
(f) Compiled Plan.............................................40
(g) Cost of Construction......................................40
(i) Floating Charge Collateral................................41
(j) Guaranty..................................................41
(k) Intangible ...............................................41
(l) Inventory.................................................41
(m) Land Exchange Agreement...................................42
(q) Letter of Credit..........................................42
(s) perfection................................................42
(t) Rating Agency.............................................42
(u) rated or rating...........................................42
(v) security interest ........................................42
(w) Storage Contracts.........................................43
(x) Surety Bond...............................................43
(y) Trademarks ...............................................43
SECTION 5 -- MISCELLANEOUS..................................................43
5.1 Severability....................................................43
5.2 Notices.........................................................43
(ii)
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5.3 Covenants to Run with the Land..................................43
5.4 Captions; Gender and Number.....................................43
5.5 Limitation on Interest Payable..................................44
5.6 Indemnification; Reimbursement..................................44
5.7 Governing Law and Submission to Jurisdiction....................45
5.8 Judgment Currency...............................................45
5.9 Changes in Writing..............................................45
5.10 No Merger.......................................................45
5.11 No Set-Off......................................................46
5.12 Concerning Holder...............................................46
5.13 Holder's Right to Sever Indebtedness............................47
5.14 Waiver of Stay..................................................48
5.15 No Credit for Payment of Taxes or Impositions...................49
5.16 Stamp and Other Taxes...........................................49
5.17 Estoppel Certificates...........................................49
5.18 Additional Security.............................................49
5.19 Discharge of Debenture..........................................49
5.20 Pledge of Debenture.............................................50
5.21 Expenses of Collection..........................................50
5.22 Business Days...................................................50
5.23 Time of Essence.................................................50
5.24 Acknowledgment and Receipt......................................50
5.25 Not a Negotiable Instrument.....................................50
5.26 Multiple Executed Copies........................................50
5.27 No Recourse Against Others......................................50
Schedule A - Legal Description
Schedule B - Copyrights
Schedule C - Patents
Schedule D - Industrial Designs
Schedule E - Licenses
Schedule F - Prior Liens
Schedule G - Equipment Locations
Schedule H - Land Swap Sale Parcel
Schedule I - Compiled Plan
Schedule J - Land Swap Acquisition Parcel
Schedule K - Trademarks
(iii)
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FIXED AND FLOATING CHARGE DEBENTURE
FIXED AND FLOATING CHARGE DEBENTURE ("Debenture"), dated as of
November 27, 1996, made by Statia Terminals Canada, Incorporated, a corporation
organized under the laws of Nova Scotia having an office at 800 Fairway Drive,
Suite 295, Deerfield Beach, Florida 33441, as mortgagor, assignor and debtor
(together with any successors or assigns, "Debtor"), in favor of Marine Midland
Bank, a New York banking corporation and trust company having an office at 140
Broadway, 12th Floor, New York, NY 10005, as trustee pursuant to the Indenture
(as hereinafter defined) and the Additional Lender Intercreditor Agreement (as
defined in the Indenture), if any, as mortgagee, assignee, secured party and
holder of the Debenture (in such capacity and together with any successors or
assigns in such capacity, "Holder").
RECITALS:
A. Debtor is the owner of the land described in Schedule A annexed hereto and
made a part hereof and all the improvements situated thereon.
B. Debtor, Holder and certain subsidiaries of Debtor are, contemporaneously with
the execution and delivery of this Debenture, entering into a certain indenture
(as amended from time to time, the "Indenture"; capitalized terms used herein
and not otherwise defined shall have the meanings assigned thereto in the
Indenture), dated as of November 27, 1996, pursuant to which Debtor is issuing
its 11 3/4% first mortgage notes due 2003 (the "First Mortgage Notes"), in the
aggregate principal amount of U.S.$135,000,000. It is contemplated that Debtor
may, after the date hereof, (i) issue exchange notes pursuant to the Indenture
(the "Exchange Notes"; together with the First Mortgage Notes, the "Notes") and
(ii) incur certain additional indebtedness ("Additional Secured Indebtedness" as
defined in the Indenture) in accordance with the provisions of Sections 4.04 and
4.14 of the Indenture which shall be equally and ratably secured by the
Mortgaged Property (as hereinafter defined).
C. All obligations of Debtor now or hereafter existing under or in connection
with the Indenture and the Notes (including, without limitation, the obligations
of Debtor to pay principal of, premium, if any, and interest on the Notes when
due and payable) and all other charges, fees, premiums, indemnities and other
amounts due or to become due under or in connection with the Indenture, the
Notes and any other instrument governing the obligations of Debtor with respect
to the Additional Secured Indebtedness (the "Additional Indebtedness
Instrument") and all obligations, indebtedness and liabilities of Debtor
pursuant to the terms of this Debenture, in each case whether now existing or
hereafter arising, and whether in the regular course of business or otherwise,
are hereinafter referred to collectively as the "Secured Obligations".
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ACKNOWLEDGMENT AND PROMISE TO PAY:
A. Debtor, for value received, hereby acknowledges itself indebted to Holder for
the principal sum of FIVE HUNDRED MILLION DOLLARS ($500,000,000) in lawful money
of the United States and promises to pay the principal sum to or to the order of
Holder on demand. Debtor hereby expressly waives presentment for payment, notice
of non-payment and protest.
B. Debtor promises to pay to Holder interest in like money on the amount of the
principal sum outstanding from time to time and on all other amounts from time
to time owing hereunder at the rate of twenty-five (25%) percent per annum, such
interest to accrue daily and be payable on demand. Interest is payable both
before and after maturity, demand, default and judgement. Debtor promises to pay
interest on overdue interest, at the same rate, calculated and payable monthly
on the first business day of each and every month.
C. Debtor promises to pay the principal sum, interest and all other amounts from
time to time owing hereunder at the address for notice of Holder established
under Section 5.2, or as otherwise instructed by the Holder from time to time.
GRANTING CLAUSES:
As security for the payment of the principal sum, interest, overdue
interest and all other amounts from time to time owing or payable under this
Debenture, and the performance by Debtor of all its obligations under this
Debenture, Debtor hereby (i) creates a security interest in and mortgages,
assigns, transfers, pledges and charges and hereby grants as and by way of a
farge to and in favour of Holder for the benefit of itself, the
holders of the Notes and the holders of Additional Secured Indebtedness
(collectively, the "Secured Parties"), all of the undertaking, property and
assets of Debtor, both real and personal, movable and immovable, tangible and
intangible of whatsoever nature and kind now owned or hereafter acquired (except
(x) vehicles, marine vessels and emergency and spill response equipment and (y)
such property and assets as are validly and effectively subject to any fixed and
specific mortgages and charges created hereby), including its goodwill and
uncalled capital and including, without limitation, any and all rights in, to
and under the Lender Collateral, the Storage Contracts and Trademarks
(collectively, the "Charged Property"), and (ii) grants, mortgages, bargains,
sells, assigns and conveys to Holder for the benefit of the Secured Parties and
hereby grants as and by way of a fixed and specific mortgage, charge, pledge and
security interest to and in favour of Holder for the benefit of the Secured
Parties all of Debtor's right, title and interest in and to the following
property (the "Fixed Charge Collateral") whether now owned or held or hereafter
acquired (together with the undertaking, property and assets described in clause
(i) above as the Charged Property, collectively, the "Mortgaged Property"):
A. Any and all present estates or interests of Debtor in the land described in
Schedule A annexed hereto, together with all Debtor's reversionary rights in and
to any and all lots, parcels, alterations, partitions, easements, rights-of-way,
sidewalks, strips and gores of land, drives,
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roads, curbs, streets, lanes, ways, alleys, passages, passageways, sewer rights,
waters, woods, water courses, water rights, mineral, gas and oil rights, power,
air, light and other rights, estates, titles, interests, privileges, liberties,
servitudes, licenses, tenements, hereditaments and appurtenances whatsoever, in
any way belonging, relating or appertaining thereto, or any part thereof, or
which hereafter shall in any way belong, relate or be appurtenant thereto and
any leasehold interests with respect to the foregoing (collectively, the
"Land");
B. Any and all estates or interests of Debtor in the buildings, structures and
other improvements and any and all Alterations (as hereinafter defined) now or
hereafter located or erected on the Land and any leasehold interests with
respect to the foregoing, including, without limitation, attachments, walks and
ways (collectively, the "Improvements"; together with the Land, the "Premises");
provided, however, that as of the date of consummation of the Land Swap
transaction, subject to compliance with Section 1.26 of this Debenture,
"Premises" shall be deemed (i) to exclude the Land Swap-Sale Parcel and (ii) to
include the Land Swap-Acquisition Parcel;
C. Any and all permits, licenses, franchises, certificates, consents, approvals
and authorizations, however characterized, issued or in any way furnished,
whether necessary or not for the operation and use of the Premises, including,
without limitation, building permits, certificates of occupancy, environmental
certificates, industrial permits, or licenses and certificates of operation;
D. Any and all interest of Debtor in (i) equipment of any kind or nature (other
than vehicles, marine vessels and emergency and spill response equipment) and
located at or used in connection with the operation of Debtor's business
conducted at the Premises, whether or not affixed to the Premises, and all
machinery, apparatus, equipment, fittings, fixtures, improvements and articles
of personal property of every kind and nature whatsoever now or hereafter
attached or affixed to the Premises or used in connection with the use and
enjoyment of the Premises or the maintenance or preservation thereof, including,
without limitation, all truck racks, jetties, docks, hose stations, tanks,
spheres, pipelines, monopiles or pumps whether floating, fixed or permanent,
offshore single point mooring buoys and other buoys, atmospheric distillation,
storage, blending and loading equipment, utility systems, fire sprinkler and
alarm systems or other fire prevention or extinguishing apparatus materials,
HVAC equipment, boilers, electronic data processing, telecommunications or
computer equipment, office machinery, switchboards, computers and computer
hardware and software (whether owned or licensed), all indoor or outdoor
furniture, tools, materials, refrigeration, electronic monitoring, water or
lighting systems, power, sanitation, waste removal, elevators, maintenance or
other systems or equipment, and all other articles used or useful in connection
with the use or operation of any part of the Premises; (ii) all modifications,
renewals, improvements, alterations, repairs, substitutions, attachments,
additions, accessories and other property now or hereafter affixed thereto or
used in connection therewith and (iii) all replacements and all other parts
therefor (collectively, the "Equipment");
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E. All Debtor's right, title and interest, as landlord, franchisor, licensor or
grantor, in all leases and subleases of space, tenancies, lettings, franchise
agreements, licenses, occupancy or concession agreements, all books and records
which contain payments under such leases, contracts and other agreements,
written or otherwise, now existing or hereafter entered into relating in any
manner to the Premises or the Equipment and any and all amendments,
modifications, supplements and renewals of any thereof (each such lease, license
or agreement, other than Storage Contracts, as defined below, together with any
such amendment, modification, supplement or renewal, a "Lease"), whether now in
effect or hereafter coming into effect including, without limitation, all rents,
additional rents, rental income, receipts, management fees payable by tenants,
cash, guarantees, letters of credit, bonds, sureties or securities deposited
thereunder to secure performance of the lessee's, franchisee's, licensee's or
obligee's obligations thereunder, revenues, earnings, issues, profits and
income, advance rental payments, payments incident to assignment, sublease or
surrender of a Lease, claims for forfeited deposits, claims for damages and
awards, now due or hereafter to become due, with respect to any Lease
(collectively, the "Rents");
F. All general intangibles and contract rights of every kind and nature relating
to any item or type of Mortgaged Property (other than the Lender Collateral and
the Storage Contracts), and, in any event shall include, without limitation, any
and all goodwill, descriptions, name plates, claims, choses-in-action, causes of
action, catalogues, confidential information, consulting agreements, engineering
contracts, and such other assets which relate to the goodwill of the business of
Debtor and rights to refund or indemnification to the extent the foregoing
relate to any item or type of Mortgaged Property (other than the Lender
Collateral and the Storage Contracts), deposits and deposit accounts, letters of
credit, documents, instruments, chattel paper, bankers' acceptances and
guarantees, and income tax refunds to the extent relating to any item or type of
Mortgaged Property (other than the Lender Collateral and the Storage Contracts),
claims for tax or other refunds against any provincial or federal government, or
any agency or authority or other federal government, or any agency or authority
or other subdivision thereof relating to any item or type of Mortgaged Property
(other than the Lender Collateral and the Storage Contracts), corporate or other
business records relating to any item or type of Mortgaged Property (other than
the Lender Collateral and the Storage Contracts) and all reserves, deferred
payments and claims of every kind or character relating thereto (collectively,
the "Contract Rights");
G. Any and all "documents" relating to any item or type of Mortgaged Property
(other than the Lender Collateral and the Storage Contracts), including, without
limitation, any and all lists, books, records, ledgers, printouts, computer
programs, computer disks or tape files, computer runs and other computer
prepared information, files (whether in printed form or stored electronically),
tapes and other papers or materials containing information relating to any item
or type of Mortgaged Property (other than the Lender Collateral and the Storage
Contracts);
H. The "Collateral Account" established and maintained pursuant to the Indenture
and all funds from time to time on deposit therein, all investments of such
funds (including, without
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limitation, Cash Equivalents) and all certificates and instruments from time to
time representing or evidencing such investments, all notes, certificates of
deposit, checks and other instruments from time to time hereafter delivered to
or otherwise possessed by Holder for or on behalf of Debtor in substitution for,
or in addition to, any or all of the Mortgaged Property, and all interest,
dividends, cash, instruments and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of the items constituting Mortgaged Property;
I. Any and all of the Debtor's now-existing or hereafter arising rights, title
and interests in, to and under that certain amended and restated stock purchase
and sale agreement (as amended from time to time, the "Stock Purchase
Agreement") dated as of November 4, 1996, between Statia Terminals Group N.V.,
Debtor, Statia Terminals Corporation N.V., Statia Terminals Delaware, Inc.,
Praxair, Inc., CBI Investment, Inc., and Statia Terminals, Inc. and all
documents, agreements and other instruments executed and/or delivered in
connection therewith or relating thereto (such documents, agreements and other
instruments, together with the Stock Purchase Agreement, the "Acquisition
Documents") including, without limitation (i) all rights and remedies relating
to monetary damages, including indemnification rights and remedies and claims
for damages or other relief pursuant to or in respect of the Acquisition
Documents and (ii) all rights and remedies relating to monetary damages,
including indemnification rights and remedies and claims for monetary damages in
respect of the agreement, documents and instruments referred to in the
Acquisition Documents or related thereto;
J. All surveys, drawings, plans, specifications, construction contracts, file
materials, operating and maintenance records, catalogues, tenant lists,
correspondence, advertising materials, operating manuals, warranties,
guaranties, appraisals, studies and data relating to any item or type of
Mortgaged Property or the construction of any Alteration or the maintenance of
any Permit (as hereinafter defined);
K. All of Debtor's present and after acquired right, title and interest in any
and all of the following (collectively, together with all Trademarks, the
"Intellectual Property"):
(a) any and all copyrights, whether statutory or common law, and all
applications, registrations and recordings relating to such
copyrights in the Canadian Copyright Office or in any similar office
or agency of Canada, any province thereof, any political subdivision
thereof or in any other country, including, without limitation, the
copyrights and applications, registrations and recordings described
in Schedule B hereto, together with any and all (i) rights and
privileges arising under applicable law with respect to Debtor's use
of any copyrights, (ii) reissues, extensions, continuations and
renewals thereof, (iii) income, fees, royalties, damages and
payments now and hereafter due and/or payable with respect thereto,
including, without limitation, damages and payments for past or
future infringements thereof, (iv) rights corresponding thereto
throughout the world and
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(v) rights to sue for past, present and future infringements thereof
(collectively, "Copyrights"),
(b) any and all patents and all applications, registrations and
recordings relating thereto as may at any time be filed in the
Canadian Patent Office or in any similar office or agency of Canada,
any province thereof, any political subdivision thereof or in any
other country, including, without limitation, those patents,
applications, registrations and recordings described in Schedule C
hereto, together with any and all (i) rights and privileges arising
under applicable law with respect to Debtor's use of any patents,
(ii) inventions and improvements described and claimed therein,
(iii) reissues, divisions, continuations, renewals, extensions and
continua tions-in-part thereof, (iv) income, fees, royalties,
damages and payments now and hereafter due and/or payable under and
with respect thereto, including, without limitation, damages and
payments for past or future infringements thereof, (v) rights
corresponding thereto throughout the world, and (vi) rights to sue
for past, present and future infringements thereof (collectively,
"Patents"),
(c) any and all industrial designs and all applications, registrations
and recordings relating thereto as may at any time be filed in the
Canadian Industrial Design Office or in any similar office or agency
of Canada, any province thereof, any political subdivision thereof
or in any other country, including, without limitation, those
industrial designs, applications, registrations and recordings
described in Schedule D hereto, together with any and all (i) rights
and privileges arising under applicable law with respect to Debtor's
use of any industrial designs, (ii) inventions and improvements
described and claimed therein, (iii) reissues, divisions,
continuations, renewals, extensions and continuations-in-part
thereof, (iv) income, fees, royalties, damages and payments now and
hereafter due and/or payable under and with respect thereto,
including, without limitation, damages and payments for past or
future infringements thereof, (v) rights corresponding thereto
throughout the world, and (vi) rights to sue for past, present and
future infringements thereof (collectively, "Industrial Designs"),
(d) any and all license and distribution agreements with any other party
with respect to a Patent, Trademark or Copyright, whether Debtor is
a licensor or licensee, distributor or distributee under any such
license or distribution agreement, including, without limitation,
the license and distribution agreements listed in Schedule E hereto,
along with any and all (i) renewals, extensions, supplements and
continuations thereof, (ii) income, royalties, damages and payments
now and hereafter due and/or payable to Debtor with respect thereto,
including, without limitation, damages and payments for past or
future infringements or violations thereof and (iii) rights to sue
for past, present and future infringements or violations thereof
(collectively, "Licenses").
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L. All the estate, right, title, interest, claim, and demand whatsoever, of
Debtor, in law, equity, or otherwise howsoever, of, in, and to the same and
every part of the foregoing;
M. All proceeds of the conversion, voluntary or involuntary, of any of the
foregoing into cash or liquidated claims, including, without limitation,
proceeds of insurance (and any unearned premiums thereon), indemnity, warranty,
guarantee or claims payable to Holder or Debtor from time to time with respect
to any item or type of Mortgaged Property, payments (in any form whatsoever)
made or due and payable to Debtor from time to time in connection with any
requisition, confiscation, condemnation or eminent domain, seizure or forfeiture
of all or any part of the Mortgaged Property by any governmental authority (or
any person acting under colour of a governmental authority), judgment or other
awards or payments with respect thereto or settlement in lieu thereof
(including, without limitation, any Net Proceeds or Net Award (each as
hereinafter defined)), including, without limitation, interest thereon, products
of the Mortgaged Property, and other amounts from time to time paid or payable
under or in connection with any of the Mortgaged Property (collectively,
"Proceeds");
provided, however, that (i) notwithstanding the foregoing, the Mortgaged
Property shall not include (x) property or assets hereafter acquired by Debtor
in accordance with clause (ix) of the definition of Permitted Liens in the
Indenture; provided, further, that at such time as such property or asset is no
longer subject to such Lien or security interest, such property shall (without
any act or delivery by any Person) constitute Mortgaged Property hereunder; and
(y) vehicles, marine vessels and emergency and spill response equipment; and
(ii) the mortgages and charges created and evidenced hereby shall not extend or
apply to the last day of the term of any lease or any agreement therefor now
held or hereafter acquired by Debtor or the last day of the term of any Licences
of which Debtor is a licensee, but, upon the occurrence and during the
continuance of an Event of Default, Debtor shall thereafter stand possessed of
such last day and shall hold it in trust to assign the same to any Person
acquiring such term or the part thereof subject to this Debenture in course of
the enforcement of any of Holder's rights or remedies hereunder.
HABENDUM:
To have and to hold the Mortgaged Property and the Charged Property and
all rights hereby conferred to the Holder, its successors and assigns forever,
but in trust nevertheless for the uses and purposes with the powers and
authorities and subject to the terms and conditions herein set forth.
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COVENANTS:
Debtor warrants, represents and covenants to and for the benefit of Holder
as follows:
SECTION 1 -- WARRANTIES, REPRESENTATIONS AND COVENANTS OF DEBTOR
1.1 Authority and Validity. Debtor represents, warrants and covenants that (i)
Debtor is duly authorized to execute and deliver this Debenture, the Notes and
the Indenture and the other documents evidencing or securing the Secured
Obligations (this Debenture, the Notes, the Indenture and such other documents,
collectively, the "Indenture Documents"), and all corporate and governmental
actions, consents, authorizations and approvals necessary or required therefor
have been duly and effectively taken or obtained, (ii) this Debenture and the
other Indenture Documents are legal, valid, binding and enforceable obligations
of Debtor, (iii) Debtor has the full power and lawful authority to execute and
deliver this Debenture and the other Indenture Documents and to assign,
transfer, mortgage, charge and grant a security interest in the Mortgaged
Property as contemplated herein.
1.2 Good Title.
(a) Debtor represents, warrants and covenants that (i) Debtor has (a)
good and marketable legal title to the Premises, (b) valid leasehold
interest in the landlord's interest and estate under or in respect
of the Leases, (c) good title to the interest it purports to own in
and to each item of Mortgaged Property in each case subject to no
Liens, except for those Liens in respect of Noteholder Collateral
and/or Lender Collateral, as specifically identified on Schedule F
annexed hereto (collectively, "Prior Liens"), (ii) Debtor will keep
in effect all material rights and appurtenances to or that
constitute a part of the Mortgaged Property which are necessary for
the conduct of Debtor's business at the Mortgaged Property, (iii)
Debtor will protect, preserve and defend its interest in the
Mortgaged Property and title thereto, (iv) Debtor will comply with
each of the terms, conditions and provisions of any obligation of
Debtor which is secured by the Mortgaged Property or the
noncompliance with which could reasonably be expected to result in
the imposition of a Lien on the Mortgaged Property, (v) Debtor will
appear and defend the Lien and security interests created and
evidenced hereby and the validity and priority of this Debenture in
any action or proceeding affecting or purporting to affect the
Mortgaged Property or any of the rights of Holder hereunder, (vi)
this Debenture creates and constitutes a valid and enforceable first
Lien on the Mortgaged Property which Lien is and will be subject
only to (a) Prior Liens (but not to extensions or replacements of
Prior Liens) and (b) Liens hereafter created and which, pursuant to
the provisions of subsection 1.18(a), are superior to the Lien
created and evidenced hereby, and Debtor does now and shall warrant
and defend to Holder and all its successors and assigns such title
and the validity and priority of the Lien created and evidenced
hereby
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against the claims of all Persons, (vii) there has been issued and
there remain in effect each and every certificate of occupancy or
use or other Permit currently required for the existing use and
occupancy by Debtor and its tenants of the Premises and (viii) the
Premises comply in all respects with all local zoning, land use,
setback or other development and use requirements of Governmental
Authorities (as hereinafter defined).
(b) Debtor, immediately upon obtaining knowledge or receiving notice, as
the case may be, of the pendency of any proceedings for the eviction
of Debtor from the Mortgaged Property or any part thereof by
paramount title or otherwise questioning Debtor's title to the
Mortgaged Property as warranted in this Debenture, or of any
condition that might reasonably be expected to give rise to any such
proceeding, shall notify Holder in writing thereof. Holder may
participate in such proceedings, and Debtor shall deliver or cause
to be delivered to Holder all instruments requested by Holder to
permit such participation. In any such proceedings Holder may be
represented by counsel satisfactory to Holder at the expense of
Debtor. If, upon the resolution of such proceedings, Debtor shall
suffer a loss of the Mortgaged Property or any part thereof or
interest therein and title insurance proceeds shall be payable to
Debtor in connection therewith, such proceeds are hereby assigned to
and shall be paid to Holder to be applied in the manner applicable
to proceeds of Asset Sales pursuant to Section 4.15 of the
Indenture.
1.3 Chief Executive Office; Records; Change of Name. The chief place of business
of Debtor is located at 3817 Port Malcolm Road, Port Hawkesbury, Richmond
County, Nova Scotia. Debtor shall not move its chief place of business, except
to such new location as Debtor may establish in accordance with the last
sentence of this subsection 1.3. Debtor shall not establish a new location for
its chief place of business nor shall it change its name until (i) it shall have
given Holder not less than forty-five (45) days' prior written notice of its
intention so to do, clearly describing such new location or name and providing
such other information in connection therewith as Holder may request and (ii)
with respect to such new location or name, Debtor shall have taken all action
necessary or required by any and all existing or future applicable laws or as
Holder shall from time to time reasonably request to maintain and fully protect
the perfection, validity and priority of the Lien of Holder in the Mortgaged
Property intended to be granted hereby, including, without limitation, obtaining
waivers of landlord's or warehouseman's liens with respect to such new location.
1.4 Location of Equipment and Inventory. All Equipment and Inventory held on the
date hereof by Debtor is located at the locations shown in Schedule G hereto.
All Equipment and Inventory now held or subsequently acquired shall be kept at
one or more of the locations shown in Schedule G hereto, or such new location as
Debtor may establish if (i) it shall have given to Holder at least forty-five
(45) days' prior written notice of its intention so to do, clearly describing
such new location and providing such other information in connection therewith
as
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Holder may request, and (ii) with respect to such new location, Debtor shall
have taken all action necessary or required by any and all existing or future
applicable laws or as Holder shall from time to time reasonably request to
maintain and fully protect the perfection, validity and priority of the Lien of
Holder in the Mortgaged Property intended to be granted hereby, including,
without limitation, obtaining waivers of landlord's or warehouseman's liens with
respect to such new location.
1.5 No Consents. Subject to Section 1.9 of this Debenture, no consent of any
party (including, without limitation, stockholders or creditors of Debtor) and
no consent, authorization, approval, or other action by, and no notice to or
filing with, any governmental authority or regulatory body or other Person is
required (except for stockholders' and directors' resolutions which have been
passed as of the date hereof) either (A) for the creation by Debtor of the Lien
in the Mortgaged Property pursuant to this Debenture or for the execution,
delivery or performance of this Debenture by Debtor, (B) for the exercise by
Holder of the rights provided for in this Debenture or (C) for the exercise by
Holder of the remedies in respect of the Mortgaged Property pursuant to this
Debenture (except as required by bankruptcy, insolvency, winding up,
reorganization, moratorium and similar laws affecting creditors' rights
generally).
1.6 After-Acquired Intellectual Property. If Debtor shall (i) obtain any rights
to any new invention (whether or not patentable), know-how, trade secret,
design, industrial design, process, procedure, formula, diagnostic test, service
mark, trademark, trademark registration, trade name, copyright or license or
(ii) become entitled to the benefit of any patent, industrial design, service
mark or trademark application, trademark, trademark registration, license
renewal, copyright renewal or extension, or patent for any reissue, division,
continuation, renewal extension, or continuation-in-part of any patent or any
improvement on any patent, the provisions of this Debenture shall automatically
apply thereto and any item enumerated in clause (i) or (ii) of this sentence
shall automatically constitute Mortgaged Property and shall be subject to the
assignment, Lien and security interest created hereby without further action by
any party. Debtor promptly shall (x) give to Holder written notice of its
acquisition of or entitlement to any and all issued, registered or applied for
Patents, Trademarks, Copyrights, Industrial Designs and Licenses and (y) confirm
the creation and attachment of the Lien and security interest created hereby to
any thereof by execution of any instrument in form acceptable to Holder.
1.7 Special Provisions Regarding Intellectual Property.
(a) Applications. Except in the ordinary course of business consistent with
prudent business practice, and as may also otherwise be specified in Section
11.03 of the Indenture, Debtor shall not abandon any right to file an
application with respect to Intellectual Property or any pending application,
without the prior written consent of Holder.
(b) Restriction on Licensing Intellectual Property. Debtor shall not license the
Intellectual Property or any portion thereof, or amend or permit the amendment
of any of the Licenses in either case in a manner that adversely affects the
right to receive any material amount of
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payments thereunder, or, except as otherwise permitted under Section 11.03 of
the Indenture, in any manner adverse to the interests of Holder in the
Intellectual Property, without the prior written consent of Holder.
1.8 Holder May Perform; Holder Appointed Attorney-in-Fact. If Debtor shall fail
to do any act or thing that it has covenanted to do hereunder or if any warranty
on the part of Debtor contained herein shall be breached, Holder may (but shall
not be obligated to) do the same or cause it to be done or remedy any such
breach, and may expend funds for such purpose. Any and all amounts so expended
by Holder shall be paid by Debtor immediately upon demand therefor, with
interest on all such funds outstanding at a rate per annum equal to the rate
payable on the outstanding principal sum of this Debenture from and including
the date on which such funds were so expended to the date of repayment thereof.
Debtor's obligations under this Section 1.8 shall survive the termination of
this Debenture and the discharge of Debtor's other obligations under this
Debenture. Debtor hereby appoints Holder its attorney-in-fact with an interest,
with full authority in the place and stead of Debtor and in the name of Debtor,
or otherwise, from time to time in Holder's discretion, to take any action and
to execute any instrument consistent with the terms of this Debenture and the
Indenture which Holder may deem necessary or advisable to accomplish the
purposes of this Debenture. The foregoing grant of authority is a power of
attorney coupled with an interest and such appointment shall be irrevocable for
the term of this Debenture. Debtor hereby ratifies all that such attorney shall
lawfully do or cause to be done by virtue and in accordance with the terms
hereof.
1.9 Recording Documentation to Assure Lien; Fees and Expenses.
(a) Other than the filing, registration and/or recordation of this
Debenture with the office of the Registrar of Joint Stock Companies
at Halifax, Nova Scotia and at the Registry of Deeds at Arichat,
Nova Scotia, no filings, registrations and recordings are necessary
or appropriate to create, preserve, protect and perfect the Lien
granted by Debtor to Holder pursuant to this Debenture in respect of
the Mortgaged Property (except for filings in respect of Copyrights
which are not material to the conduct of Debtor's business and
undertaking).
(b) Debtor shall, forthwith after the execution and delivery of this
Debenture and thereafter, from time to time, cause this Debenture
and any financing statement, continuation statement or similar
instrument relating to any thereof or to any property intended to be
subject to the Lien of this Debenture to be filed, registered and
recorded in such manner and in such places as may be required by any
present or future law in order to publish notice of and to fully
protect the validity and priority thereof or the Lien hereof
purported to be created upon the Mortgaged Property and the interest
and rights of Holder therein. Debtor shall pay or cause to be paid
all taxes and fees incident to such filing, registration and
recording, and all expenses incident to the preparation, execution
and acknowledgment thereof, and of any instrument of further
assurance, and all
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stamp taxes or other taxes, duties and charges arising out of or in
connection with the execution and delivery of such instruments.
(c) Debtor shall, at the sole cost and expense of Debtor, do, execute,
acknowledge and deliver all and every such further acts, deeds,
conveyances, mortgages, assignments, notices of assignment,
transfers, financing statements, continuation statements and
assurances necessary or required by any and all existing or future
applicable laws or as Holder shall from time to time reasonably
request to assure, perfect, convey, assign, mortgage, transfer and
confirm unto Holder the property and rights hereby conveyed or
assigned, or which Debtor may be or may hereafter become bound to
convey or assign to Holder or which may facilitate the performance
of the terms of this Debenture or the filing, registering or
recording of this Debenture. In the event Debtor shall fail to
execute any instrument required to be executed by Debtor under this
subsection 1.9(c), Holder may execute the same as the
attorney-in-fact for Debtor, such power of attorney being coupled
with an interest and irrevocable.
1.10 Payment of Taxes, Insurance Premiums, Assessments; Compliance with Law and
Insurance Requirements.
(a) Unless contested in accordance with the provisions of subsection
1.10(e) hereof, Debtor shall pay and discharge or cause to be paid
and discharged, from time to time when the same shall become due,
all real estate and other taxes, special assessments, levies,
permits, inspection and license fees, all premiums for insurance,
all water and sewer rents and charges, and all other public charges
imposed upon or assessed against the Mortgaged Property or any part
thereof or upon the revenues, rents, issues, income and profits of
the Mortgaged Property, including, without limitation, those arising
in respect of the occupancy, use or possession thereof. Except to
the extent contemplated in Section 1.11 hereof, this subsection
1.10(a) shall not obligate Debtor to pay and discharge any charges
imposed upon Holder in respect of income taxes.
(b) Upon the occurrence and during the continuance of an Event of
Default, at the written request of Holder, Debtor shall deposit with
Holder, on the first day of each month, an amount estimated by
Debtor to be equal to one-twelfth (1/12th) of the annual taxes,
assessments and other items required to be discharged by Debtor
under subsection 1.10(a) and amounts estimated by Debtor to be
necessary to maintain the insurance coverages contemplated in
Section 1.12. Such amounts shall be held by Holder without interest
to Debtor and applied to the payment of each obligation in respect
of which such amounts were deposited, in such order or priority as
Holder shall determine, on or before the date on which such
obligation would become delinquent. If at any time the amounts so
deposited by Debtor shall, in Holder's judgment, be insufficient
(when added to the installments
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anticipated to be paid thereafter) to discharge any of such
obligations when due, Debtor shall, within five (5) Business Days
(as hereinafter defined) after demand, deposit with Holder such
additional amounts as may be requested by Holder. Nothing contained
in this Section 1.10 shall affect any right or remedy of Holder
under any provision of this Debenture or any Indenture Document or
of any statute or rule of law to pay any such amount from its own
funds and to add the amount so paid, together with interest at a
rate per annum equal to the rate payable on the outstanding
principal sum of this Debenture, to the Secured Obligations or
relieve Debtor of its obligations to make or provide for the payment
of the annual taxes, assessments and other charges required to be
discharged by Debtor under subsection 1.10(a). Debtor hereby grants
to Holder an assignment of, and a charge and a security interest in,
all sums held pursuant to this subsection 1.10(b) to secure payment
of all amounts owing under this Debenture. During the continuance of
an Event of Default, Holder may apply all or any part of the sums
held pursuant to this subsection 1.10(b) to payment and performance
of Debtor's obligations under this Debenture. Debtor shall redeposit
with Holder an amount equal to all amounts so applied as a condition
to the cure, if any, of such Event of Default in addition to
fulfilment of any other required conditions; provided, however, any
and all such funds shall be returned to Debtor promptly after the
Event of Default has been cured.
(c) Unless contested in accordance with the provisions of subsection
1.10(e), Debtor shall timely pay, or cause to be paid, all lawful
claims and demands of mechanics, materialmen, laborers, employees,
suppliers, government agencies administering worker's compensation
insurance, old age pensions and social security benefits and all
other claims, judgments, demands or amounts of any nature which, if
unpaid, or not bonded, would be likely to result in the creation of
a Lien on the Mortgaged Property or any part thereof or the Rents
arising therefrom, or which would be likely to result in forfeiture
of all or any part of the Mortgaged Property.
(d) Debtor shall maintain, or cause to be maintained, in full force and
effect, all permits, certificates, authorizations, consents,
approvals, licenses, franchises or other instruments now or
hereafter required by any federal, provincial, state, municipal or
local government or quasi-governmental agency or authority (each of
the foregoing, a "Governmental Authority") to operate or use or
occupy (as applicable) the Mortgaged Property for their intended
uses (collectively, the "Permits"; each, a "Permit"). Debtor
represents that none of the Permits will be subject to cancellation,
forfeiture or any limitation on the scope thereof solely by virtue
of the execution of this Debenture or the foreclosure of the Lien
hereof. Unless contested in accordance with the provisions of
subsection 1.10(e), Debtor shall comply promptly with, or cause
prompt compliance with (i) all requirements set forth in the Permits
and (ii) all requirements of any law, ordinance, rule,
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regulation or similar statute or case law (collectively, "Legal
Requirements") of any Governmental Authority applicable to all or
any part of the Mortgaged Property or the condition, use or
occupancy of all or any part thereof or any recorded deed of
restriction, declaration, covenant running with the land or
otherwise, now or hereafter in force. Debtor shall not initiate or
consent to any change in the zoning, subdivision or any other use
classification of the Land, if such action would be likely to
diminish the value of the Mortgaged Property or impair Holder's
rights or benefits hereunder, without the prior written consent of
Holder.
(e) Debtor may at its own expense contest the amount or applicability of
any of the obligations described in subsections 1.10(a), 1.10(c) and
1.10(d) by appropriate legal proceedings, prosecution of which
operates to prevent the collection or enforcement thereof and the
sale or forfeiture of the Mortgaged Property or any part thereof to
satisfy such obligations; provided, however, that in connection with
such contest, Debtor shall have made provision for the payment or
performance of such contested obligation on Debtor's books if and to
the extent required by generally accepted accounting principles, or
shall have deposited with Holder a sum sufficient to pay and
discharge such obligation and Holder's estimate of all interest and
penalties related thereto. Notwithstanding the foregoing provisions
of this subsection 1.10(e), (i) no contest of any such obligations
may be pursued by Debtor if such contest would expose Holder, any
holder of Notes or any holder of Additional Secured Indebtedness to
any possible criminal liability or, unless Debtor shall have
furnished an Additional Undertaking (as hereinafter defined)
therefor satisfactory to Holder, to any additional civil liability
for failure to comply with such obligations and (ii) if at any time
payment or performance of any obligation contested by Debtor
pursuant to this subsection 1.10(e) shall become necessary to
prevent the delivery of a tax or similar deed conveying the
Mortgaged Property or any portion thereof because of nonpayment or
nonperformance, Debtor shall pay or perform the same in sufficient
time to prevent the delivery of such tax or similar deed.
(f) Debtor shall not in its use and occupancy of the Premises or the
Equipment (including, without limitation, in the making of any
Alteration) take any action that could be the basis for termination,
revocation or denial of any insurance coverage required to be
maintained under this Debenture or that could be the basis for a
defense to any claim under any insurance policy maintained in
respect of the Mortgaged Property and, without limiting the
foregoing, Debtor shall otherwise comply in all material respects
with the requirements of any insurer that issues a policy of
insurance in respect of the Mortgaged Property.
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(g) Debtor shall, promptly upon receipt of any written notice regarding
any failure by Debtor to pay or discharge any of the obligations
described in subsection 1.10(a), 1.10(c), 1.10(d) or 1.10(f),
furnish a copy of such notice to Holder.
1.11 Certain Tax Law Changes. In the event of the passage after the date of this
Debenture of any law changing in any way the laws for the taxation of mortgages
or debts secured by mortgages for state, provincial or local purposes or the
manner of the collection of any such taxes, and imposing a new tax, either
directly or indirectly, on this Debenture, Holder, any Indenture Document or any
other document relating to the Secured Obligations, Debtor shall promptly pay to
Holder such amount or amounts as may be necessary from time to time to pay such
tax.
1.12 Required Insurance Policies.
(a) Debtor shall maintain in respect of the Premises the following
insurance coverages:
(1) Physical hazard insurance on an "all risk" basis covering,
without limitation, hazards commonly covered by fire and
extended coverage, lightning, windstorm, civil commotion,
hail, riot, strike, water damage, sprinkler leakage, collapse
and malicious mischief, in an amount equal to the greater of
(i) U.S.$150,000,000 per occurrence and (ii) the amount of
coverage as would be maintained by a prudent operator of
property similar in use and configuration to the Premises and
located in the locality where the Premises are located, with
such deductibles as would be maintained by a prudent operator
of property similar in use and configuration to the Premises
and located in the locality where the Premises are located;
(2) Comprehensive general liability insurance against claims for
bodily injury, death or property damage occurring on, in or
about the Premises and any adjoining streets, sidewalks and
passageways (if any), and, covering any and all claims
including, without limitation, all legal liability, subject to
customary exclusions, to the extent insurable, imposed upon
Holder and all court costs and attorneys' fees, arising out of
or connected with the possession, use, leasing, operation or
condition of the Premises, with policy limits and deductibles
in such amounts as would be maintained by a prudent operator
of property similar in use and configuration to the Premises
and located in the locality where the Premises are located;
(3) Workers' compensation insurance as required by the applicable
laws of the Province of Nova Scotia and any other province or
state in which the
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Premises are located to protect Debtor against claims for
injuries sustained in the course of employment at the
Premises;
(4) Explosion insurance in respect of any boilers and similar
apparatus located on the Premises or comprising any Equipment,
with policy limits and deductibles in such amounts as would be
maintained by a prudent operator of property similar in use
and configuration to the Premises and the Equipment and
located in the locality where the Premises and the Equipment
are located;
(5) During the performance of any alterations, renovations,
repairs, restorations or construction, broad form Builders
Risk Insurance on an all-risk completed value basis;
(6) Such other insurance, against such risks and with policy
limits and deductibles in such amounts as would be maintained
by a prudent operator of property similar in use and
configuration to the Premises and located in the locality in
which the Premises are located; and
(7) If the Premises are located in an area designated by any
applicable Governmental Authority as an area having special
flood hazards and in which flood insurance is available flood
insurance in such amounts as would be maintained by a prudent
operator of property similar in use and configuration to the
Premises and located in the locality where the Premises are
located.
(b) All insurance policies required by this Section 1.12 shall be in
form customarily maintained by a prudent operator of property
similar in use and configuration to the Premises and located in the
locality in which the Premises are located. All insurance policies
in respect of the coverages required by subsections 1.12(a)(1),
1.12(a)(4), 1.12(a)(5) and, if applicable, 1.12(a)(6) shall be in
amounts at least sufficient to prevent coinsurance liability and all
losses thereunder shall be payable to Holder, as loss payee pursuant
to a standard noncontributory New York mortgagee endorsement or
local equivalent, and each such policy shall (i) include effective
waivers (whether under the terms of such policy or otherwise) by the
insurer of all claims for insurance premiums against all loss payees
and named insureds other than Debtor and all rights of subrogation
against any named insured, and (ii) provide that any losses
thereunder shall be payable notwithstanding (A) any act, failure to
act, negligence of, or violation or breach of warranties,
declarations or conditions contained in such policy by Debtor or
Holder or any other named insured or loss payee, (B) the occupation
or use of the Premises for purposes more hazardous than permitted by
the terms of the policy, (C) any foreclosure or other proceeding or
notice of sale relating to the Premises
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or the Equipment or (D) any change in the title to or ownership or
possession of the Premises or the Equipment; provided, however, that
(with respect to items contemplated in clauses (C) and (D) above)
any notice requirements of the applicable policies are satisfied.
All insurance policies in respect of the coverages required by
subsections 1.12(a)(2) and, if applicable, 1.12(a)(6) and
1.12(a)(7), shall name Holder as an additional insured. Each policy
of insurance required under this Section 1.12 shall provide that it
may not be cancelled or otherwise terminated without at least thirty
(30) days' prior written notice to Holder and shall permit Holder to
pay any premium therefor within thirty (30) days after receipt of
any notice stating that such premium has not been paid when due. The
policy or policies of such insurance or certificates of insurance
evidencing the required coverages and all renewals or extensions
thereof shall be delivered to Holder. Prior to the occurrence of an
Event of Default, settlement of any claim in an amount in excess of
$250,000 under any of the insurance policies referred to in this
Section 1.12 shall require the prior approval of Holder, and Debtor
shall use its best efforts to cause each such insurance policy to
contain a provision to such effect. During the continuance of any
Event of Default, Debtor shall not settle any claim under any of the
insurance policies referred to in this Section 1.12 without the
prior approval of Holder.
(c) At least thirty (30) days prior to the expiration of any insurance
policy required by subsection 1.12(a), a policy or policies renewing
or extending such expiring policy or renewal or extension
certificates or other evidence of renewal or extension shall be
delivered to Holder.
(d) Debtor shall not purchase separate insurance policies concurrent in
form or contributing in the event of loss with those policies
required to be maintained under this Section 1.12, unless Holder is
included thereon as named insured and, if applicable, with loss
payable to Holder under an endorsement containing the provisions
described in subsection 1.12(b). Debtor promptly shall notify Holder
whenever any such separate insurance policy is obtained and promptly
shall deliver to Holder the policy or certificate evidencing such
insurance.
(e) Debtor shall, immediately upon receipt of any written notice of any
failure by Debtor to pay any insurance premium in respect of any
insurance policy required to be maintained under this Section 1.12,
furnish a copy of such notice to Holder.
(f) Debtor shall maintain, or cause to be maintained, the insurance
described in this Section 1.12 with primary insurers rated (for
claims paying purposes) in one of the two highest generic categories
by each Rating Agency (as hereinafter defined). All insurers under
policies required hereunder shall be licensed and authorized to
issue insurance in the province or state in which the Land is
located.
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1.13 Failure to Make Certain Payments. If Debtor shall fail to perform any of
the covenants contained in this Debenture including, without limitation,
Debtor's covenants to (i) pay the premiums in respect of all required insurance
coverages, (ii) pay taxes and assessments, (iii) make repairs, (iv) discharge
Liens or (v) pay or perform any obligations of Debtor under the Leases, and such
failure shall constitute an Event of Default, Holder may, but shall not be
obligated to, make advances to perform such covenant on Debtor's behalf and all
sums so advanced shall be added to the principal sum of this Debenture and shall
be secured hereby. Debtor shall repay immediately upon demand therefor all sums
so advanced by Holder on behalf of Debtor and all such amounts shall bear
interest at a rate per annum equal to the rate payable on the outstanding
principal sum of this Debenture from and including the date on which such funds
were so advanced to the date of repayment thereof. Neither the provisions of
this Section 1.13 nor any action taken by Holder pursuant to the provisions of
this Section 1.13 shall prevent any such failure to observe any covenant
contained in this Debenture from constituting an Event of Default.
1.14 Inspection. Debtor shall permit Holder, by its agents, representatives,
accountants and attorneys, to visit and inspect the Premises and the Equipment
at such reasonable times as may be requested by Holder.
1.15 Debtor to Maintain Improvements. Debtor shall not commit any waste on the
Premises or with respect to any Equipment or make any change in the use of the
Premises or any Equipment. Debtor represents and warrants that (i) the Premises
are served by all utilities required or necessary for the current use thereof,
(ii) all streets necessary to serve the Premises are completed and serviceable
and(iii) Debtor has access to the Premises from public roads sufficient to allow
Debtor and its tenants and invitees to conduct its and their businesses at the
Premises in accordance with sound commercial and industrial practices. Debtor
shall, at all times, maintain the Premises and the Equipment in good operating
order, condition and repair and shall make all repairs necessary, structural or
nonstructural, for the operation of Debtor's business. Debtor shall (a) not
alter the occupancy or use of all or any part of the Premises or Equipment,
without the prior written consent of Holder, and (b) do all other acts which
from the character or use of the Premises and the Equipment may be reasonably
necessary or appropriate to maintain and preserve their value.
1.16 Acquisition Documents. Debtor shall perform and comply with the terms and
conditions of all Acquisition Documents. Debtor shall not without the consent of
Holder (i) cancel or terminate any of the Acquisition Documents or consent to or
accept any cancellation or termination thereof, (ii) amend, supplement or
otherwise modify any of the Acquisition Documents (in each case as in effect on
the date hereof), (iii) waive any default under or breach of any of the
Acquisition Documents or waive, fail to enforce, forgive or release any right,
interest, or entitlement of any kind, howsoever arising, under or in respect of
such Acquisition Documents or, vary or agree to the variation of any of the
provisions of any of such Acquisition Documents, or (iv) petition, request or
take any other legal or administrative action which seeks, or may be expected,
to rescind, terminate or suspend, any of the Acquisition Documents or
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amend or modify any thereof. Debtor shall notify Holder in the event it receives
any notice or communication with respect to the Acquisition Documents including,
without limitation, notices or default, and shall forward promptly copies of any
such notices or communications to Holder.
1.17 Debtor's Obligations with Respect to Leases.
(a) Debtor shall manage and operate the Mortgaged Property or cause the
Mortgaged Property to be managed and operated in a reasonably
prudent manner and will not, without the written consent of Holder,
enter into any Lease (or any amendment or modification thereof) with
any Person which would be reasonably likely to have an adverse
effect on the value of the property subject thereto.
(b) Debtor shall not in respect of any Leases:
(1) receive or collect, or permit the receipt or collection of,
any rental or other payments under any material Lease more
than one (1) month in advance of the respective period in
respect of which they are to accrue, except that (a) in
connection with the execution and delivery of any Lease or of
any amendment to any Lease, rental payments thereunder may be
collected and received in advance in an amount not in excess
of one (1) month's rent and (b) Debtor may receive and collect
escalation and other charges in accordance with the terms of
each Lease;
(2) assign, transfer or hypothecate (other than to Holder
hereunder or as otherwise permitted under Section 1.18 of this
Debenture) any rental or other payment under any Lease whether
then due or to accrue in the future, the interest of Debtor as
lessor under any Lease or the rents, issues, revenues, profits
or other income of the Mortgaged Property;
(3) enter into any Lease after the date hereof that does not
contain terms substantially to the effect as follows:
(A) such Lease and the rights of the tenant thereunder shall
be subject and subordinate to the rights of Holder under
and the Lien of this Debenture;
(B) such Lease has been assigned as collateral security by
Debtor as landlord thereunder to Holder under this
Debenture;
(C) in the case of any foreclosure hereunder, the rights and
remedies of the tenant in respect of any obligations of
any successor landlord thereunder shall be limited to
the equity interest of such successor landlord in the
Premises and any
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successor landlord shall not (1) be liable for any act,
omission or default of any prior landlord under the
Lease or (2) be required to make or complete any tenant
improvements or capital improvements or repair, restore,
rebuild or replace the demised premises or any part
thereof in the event of damage, casualty or condemnation
or (3) be required to pay any amounts to tenant arising
under the Lease prior to such successor landlord taking
possession;
(D) the tenant's obligation to pay rent and any additional
rent shall not be subject to any abatement, deduction,
counterclaim or setoff as against any mortgagee or
purchaser upon the foreclosure of any of the Premises or
the giving or granting of a deed in lieu thereof by
reason of a landlord default occurring prior to such
foreclosure and such mortgagee or purchaser will not be
bound by any advance payments of rent in excess of one
month or any security deposits unless such security was
actually received; and
(E) the tenant agrees to attorn, at the option of Holder or
any purchaser of the Premises, upon a foreclosure or
other enforcement of the Premises; or
(4) terminate or permit the termination of any Lease of space,
accept surrender of all or any portion of the space demised
under any Lease prior to the end of the term thereof or accept
assignment of any Lease to Debtor unless:
(A) the tenant under such Lease has not paid the equivalent
of two months' rent and Debtor has made reasonable
efforts to collect such rent; or
(B) Debtor shall deliver to Holder an Officers' Certificate
to the effect that Debtor has entered into a new Lease
(or Leases) for the space covered by the terminated or
assigned Lease with a term (or terms) which expire(s) no
earlier than the date on which the terminated or
assigned Lease was to expire (excluding renewal
options), and with a tenant (or tenants) having a
creditworthiness (as reasonably determined by Debtor)
sufficient to pay the rent and other charges due under
the new Lease (or Leases), and the tenant(s) shall have
commenced paying rent, including, without limitation,
all operating expenses and other amounts payable under
the new
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Lease (or Leases) without any abatement or concession in
an amount at least equal to the amount which would have
then been payable under the terminated or assigned
Lease.
(c) Debtor timely shall, perform and observe all the terms, covenants
and conditions required to be performed and observed by Debtor under
each Lease such that there will be no material impairment of the
fair market value of the Premises and will not engage in any conduct
in respect of any Lease which would materially impair the fair
market value of the Mortgaged Property or the Lien of this Debenture
or the security interest created hereby. Debtor promptly shall
notify Holder of the receipt of any notice from any lessee under any
material Lease claiming that Debtor is in default in the performance
or observance of any of the terms, covenants or conditions thereof
to be performed or observed by Debtor and will cause a copy of each
such notice to be delivered promptly to Holder.
(d) Debtor shall deliver to Holder, within thirty (30) days after the
end of each calendar year ending after the date of this Debenture,
an Officers' Certificate, dated as of the last day of such year, (i)
containing a list of names of all tenants under Leases, and the net
square footage leased and the annual rental currently payable by
each of them, (ii) stating for which, if any, Leases then in force
Debtor has issued a notice of default and the nature of such default
and (iii) stating that, to the best of such officers' knowledge,
each Lease complies with the provisions of this Debenture. Debtor
shall deliver to Holder within thirty (30) days after the end of
each calendar quarter copies, certified by an officer of Debtor, of
all Leases not theretofore delivered to Holder.
1.18 Transfer Restrictions. Except as permitted by the Indenture and Sections
1.7, 1.17(a), 1.26 and 1.27 of this Debenture, Debtor may not without the prior
written consent of Holder sell, convey, assign or otherwise dispose of, or grant
any option with respect to all, or, any part of the Mortgaged Property; nor
shall Debtor create or permit to exist any Lien upon or with respect to, all or
any of the Mortgaged Property, other than the following Liens:
(a) Liens in respect of amounts payable by Debtor pursuant to Section
1.10 if and to the extent such amounts are not yet due and payable
in accordance with the provisions of subsection 1.10(c) or are being
contested in accordance with the provisions of subsection 1.10(e);
(b) Prior Liens;
(c) The mortgage, charge and Lien granted to Holder pursuant to this
Debenture;
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(d) Any permitted disposition of Mortgaged Property by Debtor in
accordance with the provisions of the Indenture and the Land Swaps
as permitted under Section 1.26 of this Debenture;
(e) Leases (and amendments and modifications thereof) permitted under
Section 1.17(a) of this Debenture;
(f) Any disposition of Accounts, Inventory and other Floating Charge
Collateral, permitted under Section 1.27 of this Debenture; and
(g) Any disposition of Intellectual Property permitted under Section 1.7
of this Debenture.
Each of the other Liens and other transfers permitted by this
Section 1.18 shall in all respects be subject and subordinate in priority to the
Lien created and evidenced by this Debenture except (x) any Lien permitted by
clause (a) of this Section if and to the extent the law or regulation creating
or authorizing such Lien provides that such Lien must be superior to the Lien
and security interest created and evidenced by this Debenture and (y) transfers
permitted under clause (e) of this Section, which shall be made free of the Lien
and security interest created and evidenced hereby.
1.19 Destruction; Condemnation.
(a) Destruction; Insurance Proceeds. If there shall occur any damage to, loss or
destruction of, the Improvements and Equipment, or any part of any thereof
(each, a "Destruction"), Debtor shall promptly send to Holder a notice setting
forth the nature and extent of such Destruction; provided, however, that Debtor
shall not be required to deliver the notice contemplated in this sentence in the
event that any Destruction would give rise to insurance proceeds in an amount
less than or equal to U.S.$50,000. The proceeds of any insurance payable in
respect of any such Destruction shall constitute Trust Moneys and are hereby
assigned and shall be paid to Holder. All such proceeds, less the amount of any
expenses incurred in litigating, arbitrating, compromising or settling any claim
arising out of such Destruction (the "Net Proceeds"), shall constitute Trust
Moneys pursuant to Article XII of the Indenture and be applied in accordance
with the provisions of this Debenture, the Indenture and/or the Additional
Lender Intercreditor Agreement. Holder is hereby authorized and directed to pay
from Trust Moneys any and all such expenses deemed necessary or reasonable by
Holder in connection with the foregoing.
(b) Condemnation; Assignment of Award. If there shall occur any taking of the
Mortgaged Property or any part thereof, in or by condemnation or expropriation
or other eminent domain proceedings pursuant to any law, general or special, or
by reason of the temporary requisition of the use or occupancy of the Mortgaged
Property or any part thereof, by any governmental authority, civil or military
(each, a "Taking"), Debtor immediately shall notify Holder upon receiving notice
of such Taking or commencement of proceedings therefor. To the extent
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permitted by applicable laws, Holder may participate in any proceedings or
negotiations which might result in any Taking. Holder may be represented by
counsel satisfactory to it at the expense of Debtor. Debtor shall deliver or
cause to be delivered to Holder all instruments reasonably requested by it to
permit such participation. Debtor shall in good faith and with due diligence
file and prosecute what would otherwise be Debtor's claim for any such award or
payment and cause the same to be collected and paid over to Holder, and hereby
irrevocably authorizes and empowers Holder, in the name of Debtor as its true
and lawful attorney-in-fact or otherwise, to collect and to receipt for any such
award or payment, and, in the event Debtor fails so to act or is otherwise in
default hereunder, to file and prosecute such claim. Debtor shall pay all costs,
fees and expenses incurred by Holder in connection with any Taking and seeking
and obtaining any award or payment on account thereof. Any proceeds, award or
payment in respect of any Taking shall constitute Trust Moneys and are hereby
assigned and shall be paid to Holder. Debtor shall take all steps necessary to
notify the condemning or expropriating authority of such assignment. Such award
or payment, less the amount of any expenses incurred in litigating, arbitrating,
compromising or settling any claim arising out of such Taking ("Net Award"),
shall be applied in accordance with the provisions of this Debenture, the
Indenture and the Additional Lender Intercreditor Agreement. Holder is hereby
authorized and directed to pay from Trust Moneys any and all such expenses
deemed necessary or reasonable by Holder in connection with the foregoing.
1.20 Alterations. Debtor shall not make any structural addition, modification or
change (each, an "Alteration") to the Premises or the Equipment except as
permitted by Section 11.03 of the Indenture. Debtor shall (a) complete each
Alteration promptly, in a good and workmanlike manner and, in all material
respects, in compliance with all applicable local laws, ordinances and
requirements and (b) pay when due all claims for labor performed and materials
furnished in connection with such Alteration, unless contested in accordance
with the provisions of subsection 1.10(e).
1.21 Hazardous Material.
(a) Debtor represents and warrants that, otherwise than as specifically
disclosed in the Offering Memorandum dated November 27, 1996, (i) it
has obtained all Permits which are currently required with respect
to the ownership and operation of its business at the Mortgaged
Property under any and all federal, provincial, state, local and
foreign laws or regulations, codes, orders, decrees, judgments or
injunctions issued, promulgated, approved or entered thereunder
relating to pollution or protection of the environment, including,
without limitation, laws relating to handling, use, storage,
treatment, disposal, removal, emission, discharge or release of
pollutants, contaminants, chemicals, or industrial, toxic or
hazardous substances or wastes ("Hazardous Materials") into the
environment (including, without limitation, ambient air, surface
water, ground water, drinking water supply, land surface or
subsurface strata) or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal,
transport
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or handling of Hazardous Materials (collectively, "Environmental
Laws") as they relate to the Mortgaged Property; (ii) it is in
compliance with all material terms and conditions of all such
Permits or material representations made in such Permit applications
as they relate to the Mortgaged Property, and also is in compliance
in all material respects with Environmental Laws, including, without
limitation, all limitations, restrictions, conditions, standards,
prohibitions, requirements, obligations, schedules and timetables
contained in the Environmental Laws as they relate to the Mortgaged
Property; (iii) there is no civil, criminal or administrative
action, suit, demand, claim, hearing, notice of violation,
governmental investigation, proceeding, notice or demand letter
pending or, to its knowledge, threatened against it or any
subsidiary under the Environmental Laws relating to the Mortgaged
Property or operations of Debtor or any predecessor in interest
which could be expected to result in a material fine, penalty or
other cost or expense to Debtor; (iv) there are no present or past
events, conditions, circumstances, activities, practices, incidents,
actions or plans in respect of Debtor or the Mortgaged Property
which are expected to interfere with or prevent compliance by Debtor
or the Mortgaged Property with the Environmental Laws relating to
the Mortgaged Property, or which are expected to give rise to any
material common law or legal liability, including, without
limitation, liability under the Environment Act (Nova Scotia) or the
Fisheries Act (Canada), each as amended from time to time, or
similar provincial, federal, local or other applicable laws, and any
other material legal liability, or otherwise form the basis of any
material claim, action, demand, suit, proceeding, hearing or notice
of violation, governmental study or investigation, based on or
related to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling, or the
emission, discharge, release or threatened release into the
environment of any Hazardous Material.
(b) Debtor shall (i) comply in all material respects with any and all
applicable present and future Environmental Laws relating to the
Mortgaged Property and all operations conducted thereat; (ii)
conduct or cause to be conducted and/or pay or cause to be paid, as
required, the cost of any investigation, remediation, removal,
response or corrective action (collectively, "Response Action")
relating to any Hazardous Materials on, at, under or emanating from
the Mortgaged Property required by any applicable present and future
Environmental Laws; (iii) not release, discharge or dispose of any
Hazardous Materials on, at, under or from the Mortgaged Property in
violation of or in any manner that could result in any liability
under any applicable present and future Environmental Laws; and (iv)
apply any insurance proceeds or other sums received by it in respect
of any Response Action relating to any Hazardous Materials to any
unpaid costs or expenses of such Response Action, if any, or to
reimbursement for such costs previously paid by Holder, if any. In
the event Debtor fails to comply with the covenants in the preceding
sentence in any material respect, Holder may (upon
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receipt of an indemnity or other security reasonably satisfactory to
Holder), in addition to any other remedies set forth herein, but
shall not be obligated to, as trustee for and at Debtor's sole cost
and expense cause to be taken, any necessary Response Action
relating to Hazardous Materials or required by any and all
applicable present and future Environmental Laws. Any costs or
expenses incurred by Holder for such purpose shall be due
immediately upon demand therefor and all sums so expended by Holder
on behalf of Debtor shall bear interest at a rate per annum equal to
the rate payable on the outstanding principal sum of this Debenture
from and including the date on which such funds were so expended to
the date of repayment thereof. Debtor shall provide to Holder and
its agents and employees access to the Mortgaged Property and
specifically grants to Holder a license, at the sole cost and
expense of Debtor, (x) to investigate, remove or otherwise remediate
any Hazardous Material located thereon, or to take any action with
respect to any and all applicable present and future Environmental
Laws or in connection with any Hazardous Materials, which
Environmental Laws or Hazardous Materials could be expected to
result in the incurrence of any obligation or liability of the
holders of the Notes or Holder in respect of Debtor or at, under,
on, or emanating from the Mortgaged Property, if in any such case
Debtor fails to so act and such investigation, removal, remediation
or other action is required under any applicable present and future
Environmental Laws; provided, however, that nothing contained herein
shall obligate Holder to exercise any rights under such license.
Upon written demand by Holder, which shall include a reasonably
specific statement of the basis thereof (which shall be specific to
the condition of the Mortgaged Property) and which shall be made not
more frequently than once in any twelve-month period or at any time
that Holder is exercising its remedies under this Debenture, Holder
shall have the right, but shall not be obligated, at the sole cost
and expense of Debtor, to conduct an environmental audit or other
review of the Mortgaged Property, relating to those items specified
in writing or relating to the remedy that the Holder is exercising
under this Debenture, by such persons or firms appointed by Holder,
and Debtor shall cooperate in all respects in the conduct of such
environmental audit or review, including, without limitation, by
providing reasonable access to the Mortgaged Property and to all
records relating thereto. Debtor shall indemnify and hold Holder and
Marine Midland Bank in its individual capacity harmless from and
against all loss, cost, damage or expense (including, without
limitation, attorneys' and consultants' fees) that Holder and/or
Marine Midland Bank in its individual capacity may sustain by reason
of the assertion against Holder and/or Marine Midland Bank in its
individual capacity by any party of any claim relating to Hazardous
Materials in respect of Debtor or at, under, on, or emanating from
the Mortgaged Property or reasonable actions taken with respect
thereto as authorized hereunder other than such loss, cost, damage
or expense, if any, to the extent it is caused solely by the
negligence or willful misconduct of Holder or its agents,
contractors and subcontractors in
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performing any act or exercising its remedies under this Debenture.
It is the express intention of the parties to this Debenture that
nothing contained herein or in any other Document shall result in
Holder and/or Marine Midland Bank in its individual capacity being
deemed an "owner" or "operator" under applicable present and future
Environmental Laws.
1.22 Asbestos. Debtor shall not install nor permit to be installed in the
Mortgaged Property asbestos or any asbestos-containing material (collectively,
"ACM") except in compliance with any and all applicable present and future
Environmental Laws respecting ACM. With respect to any ACM currently present in
the Mortgaged Property, Debtor shall comply with any and all applicable present
and future Environmental Laws, all at Debtor's sole cost and expense. If Debtor
shall fail so to comply with such laws or regulations in any material respect,
Holder may, but shall not be obligated to, in addition to any other remedies set
forth herein, take, whatever steps it deems reasonably necessary or appropriate
to comply with any and all applicable present and future Environmental Laws. Any
costs or expenses incurred by Holder for such purpose shall be immediately due
and payable by Debtor and shall bear interest at a rate per annum equal to the
rate payable on the outstanding principal sum of this Debenture from and
including the date on which such funds were so expended to the date of repayment
thereof. Debtor shall provide to Holder and its agents and employees access to
the Mortgaged Property and hereby specifically grants to Holder a license to
remove or encapsulate such ACM if Debtor fails to do so and removal or
encapsulation is required under any applicable present and future Environmental
Law; provided, however, that nothing contained herein shall obligate Holder to
exercise any rights under such license. Debtor shall indemnify and hold Holder
and Marine Midland Bank in its individual capacity harmless from and against all
loss, cost, damage and expense (including, without limitation, reasonable
attorneys' and consultants' fees) that Holder and Marine Midland Bank in its
individual capacity may sustain as a result of the presence of any ACM in, at,
under or emanating from the Mortgaged Property and any removal or encapsulation
thereof or compliance with any and all applicable present and future
Environmental Laws.
1.23 Books and Records; Reports. Debtor shall keep proper books of record and
account, which shall accurately represent the financial condition of Debtor and
the business and affairs of Debtor relating to the Mortgaged Property. Holder
and its authorized representatives shall have the right upon reasonable notice,
and at reasonable times, from time to time, to examine the books and records of
Debtor relating to the operation of the Mortgaged Property.
1.24 No Claims Against Holder. Nothing contained in this Debenture shall
constitute any consent or request by Holder, express or implied, for the
performance of any labor or services or the furnishing of any materials or other
property in respect of the Premises or any part thereof, nor as giving Debtor
any right, power or authority to contract for or permit the performance of any
labor or services or the furnishing of any materials or other property in such
fashion as would permit the making of any claim against Holder in respect
thereof or any claim that any
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Lien based on the performance of such labor or services or the furnishing of any
such materials or other property is prior to the Lien of this Debenture.
1.25 Utility Services. Debtor shall pay, or cause to be paid, when due all
charges for all public or private utility services, all public or private rail
and highway services, all public or private communication services, all
sprinkler systems, all protective services and any other services of whatever
kind or nature at any time rendered to or in connection with the Premises or any
part thereof (except for those parts of the Premises which have been conveyed
under the Land Swap), and shall comply with all contracts relating to any such
services, and shall do all other things required for the maintenance and
continuance of all such services to the extent required to fulfill the
obligations set forth in Section 1.15.
1.26 Land Swap.
(a) Upon the date of consummation of the Land Swap pursuant to the Land
Exchange Agreement
(1) Debtor shall, at its sole cost and expense, execute,
acknowledge and deliver to Holder for the benefit of the
Secured Parties a supplemental debenture, substantially in the
form of and with the same terms as this Debenture, creating a
fixed charge on the Land Swap-Acquisition Parcel and all
fixtures thereto and shall cause to be filed, registered or
recorded in the appropriate offices all instruments necessary
or appropriate, and shall obtain all discharges required, to
create and protect a first priority Lien in such assets,
(2) Debtor shall comply with the provisions of Section 4.15 of the
Indenture and deliver all documents required under Section
11.04 of the Indenture, as required in respect of the Land
Swap, together with (i) an Opinion of Counsel to Debtor, that
(x) Debtor has corporate power to own the Land
Swap-Acquisition Parcel, (y) Debtor has complied with all
conditions precedent applicable under the Debenture and
Indenture relating to the release of the Land Swap-Sale Parcel
and (z) Debtor has good and marketable title to, and the
supplemental debenture creates a valid and effective first
priority Lien on, the Land Swap-Acquisition Parcel; and (ii)
an Officer's Certificate of Debtor certifying that the
representations and warranties set forth in Sections 1.26(b)
and 1.26(c) below are true as of the date of consummation of
the Land Swap, and
(3) upon receipt of the documents and satisfaction of the
conditions set forth in clauses (1) and (2) above, Holder
agrees (at the sole cost and expense of Debtor) to release the
Land Swap-Sale Parcel from the Lien and charge of this
Debenture and to execute such documents as may be necessary or
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required by any and all applicable laws to effect such
release, subject to Section 11.04 of the Indenture.
(b) Debtor represents and warrants as follows: (i) there is no Equipment
or Inventory and there are no material Improvements located on the
Land Swap-Sale Parcel, (ii) the Land Swap-Sale Parcel is not
material to the operation of the Debtor's business and undertaking
and (iii) the release of the Land Swap-Sale Parcel will not have a
material adverse effect on the value of the Mortgaged Property or
impair the usefulness of the Mortgaged Property in the conduct of
Debtor's business and undertaking.
(c) Debtor represents and warrants that the Land Swap-Sale Parcel is
materially represented by the areas coloured in blue on the Compiled
Plan and that the Land Swap-Acquisition Parcel is materially
represented by the areas coloured in green on the Compiled Plan.
1.27 Accounts, Inventory and other Floating Charge Collateral.
(a) Special Representations and Warranties. As of the time when each of its
Accounts arises, Debtor shall be deemed to have represented and warranted that,
to the best of Debtor's knowledge, such Account and all records, papers and
documents of Debtor relating thereto (i) represent the legal, valid and binding
obligation of the account debtor evidencing indebtedness unpaid and owed by such
account debtor arising out of the performance of labour or services or the sale
or lease and delivery of the merchandise listed therein, or both, (ii)
constitute and evidence true and valid obligations, subject to customary
set-offs, rights of return, deductions and discounts, and (iii) are in
compliance and conform in all respects with all applicable provincial, federal
and local laws and applicable laws of any relevant foreign jurisdiction.
(b) Maintenance of Records. Debtor shall keep and maintain at its own cost and
expense complete records of each Account for at least three (3) years from the
date on which such Account comes into existence, including, without limitation,
records of all payments received, all credits granted thereon, all merchandise
returned and all other documentation relating thereto, and Debtor shall make the
same available to Holder for inspection (any inspection to be at Debtor's cost
and expense) at any and all times upon demand.
(c) Sale of Accounts, Inventory and other Floating Charge Collateral. Except
in the ordinary course of business consistent with prudent business practice,
Debtor shall not rescind or cancel any indebtedness evidenced by any Account or
modify any term thereof or make any adjustment with respect thereto, or extend
or renew the same, or compromise or settle any dispute, claim, suit or legal
proceeding relating thereto, or sell any Account or interest therein. Except in
the ordinary course of business consistent with prudent business practice,
Debtor shall not sell or otherwise dispose of Inventory or other Floating Charge
Collateral.
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(d) Collection. Debtor shall take all commercially reasonable actions to cause
to be collected from the account debtor of each of the Accounts, as and when due
(including, without limitation, Accounts that are delinquent, such Accounts to
be collected in accordance with generally accepted and lawful commercial
collection procedures), any and all amounts owing under or on account of such
Account, and apply forthwith upon receipt thereof all such amounts as are so
collected to the outstanding balance of such Account. The cost and expenses
(including, without limitation, attorneys' fees) of collection, whether incurred
by Debtor or Holder (to the extent permitted to be incurred by Holder in
accordance with the terms of the Intercreditor Agreements for so long as the
Intercreditor Agreements are in effect) shall be paid by Debtor.
SECTION 2 -- ASSIGNMENT OF RENTS; SECURITY AGREEMENT
2.1 Assignment of Leases, Rents, Issues and Profits.
(a) Debtor absolutely, presently and irrevocably assigns, transfers and
sets over to Holder and grants to Holder, subject to the terms and
conditions hereof, all Debtor's estate, right, title, interest,
claim and demand as landlord to collect rent and other sums due
under all existing Leases and any other Leases, including, without
limitation, all extensions of the terms of the Leases (such assigned
rights, "Debtor's Interest"), as follows:
(1) the immediate and continuing right to receive and collect
Rents payable by all tenants or other parties pursuant to the
Leases;
(2) all claims, rights, powers, privileges and remedies of Debtor,
whether provided for in any Lease or arising by statute or at
law or in equity or otherwise, consequent on any failure on
the part of any tenant to perform or comply with any term of
any Lease;
(3) all rights to take all actions upon the happening of a default
under any Lease as shall be permitted by such Lease or by law,
including, without limitation, the commencement, conduct and
consummation of proceedings at law or in equity; and
(4) the full power and authority, in the name of Debtor or
otherwise, to enforce, collect, receive and receipt for any
and all of the foregoing and to do any and all other acts and
things whatsoever which Debtor or any landlord is or may be
entitled to do under the Leases.
(b) Any Rents received by Holder hereunder, after payment of all proper
costs and charges, shall be applied to all amounts due and owing
under and as provided in this Debenture and/or the Indenture. Holder
shall be accountable to Debtor only for Rents actually received by
Holder pursuant to this assignment. The collection
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of such Rents and the application thereof shall not cure or waive
any Event of Default or waive, modify or affect notice of Event of
Default or invalidate any act done pursuant to such notice.
(c) So long as no Event of Default shall have occurred and be
continuing, Debtor shall have a license to collect and apply the
Rents and to enforce the obligations of tenants under the Leases.
Immediately upon the occurrence of any Event of Default, the license
granted in the immediately preceding sentence shall cease and
terminate, with or without any notice, action or proceeding. Upon
such Event of Default and during the continuance thereof, Holder
may, to the fullest extent permitted by the Leases (i) exercise any
of Debtor's rights under the Leases, (ii) enforce the Leases, (iii)
demand, collect, sue for, attach, levy, recover, receive, compromise
and adjust, and make, execute and deliver receipts and releases for
all Rents or other payments that may then be or may thereafter
become due, owing or payable with respect to the Leases and (iv)
generally do, execute and perform any other act, deed, matter or
thing whatsoever that ought to be done, executed and performed in
and about or with respect to the Leases, as fully as allowed or
authorized by Debtor's Interest. At such time as any Event of
Default which shall have caused Debtor's rights described in the
first sentence of this subsection 2.1(c) to cease shall have been
cured, Debtor shall thereafter be entitled to exercise the rights
described in the first sentence of this subsection 2.1(c) until such
time as any other Event of Default shall have occurred and be
continuing.
(d) Debtor hereby irrevocably authorizes and directs the tenant under
each Lease to pay directly to, or as directed by, Holder all Rents
accruing or due under its Lease upon receipt of a notice from Holder
to the effect that an Event of Default exists hereunder and
requesting such payment. Debtor hereby authorizes the tenant under
each Lease to rely upon and comply with any notice or demand from
Holder for payment of Rents to Holder and Debtor shall have no claim
against any tenant for Rents paid by such tenant to Holder pursuant
to such notice or demand.
(e) Debtor at its sole cost and expense shall enforce the Leases in
accordance with their terms. Neither this Debenture nor any action
or inaction on the part of Holder shall release any tenant under any
Lease, any guarantor of any Lease or Debtor from any of their
respective obligations under the Leases or constitute an assumption
of any such obligation on the part of Holder. No action or failure
to act on the part of Debtor shall adversely affect or limit the
rights of Holder under this Debenture or, through this Debenture,
under the Leases.
(f) All rights, powers and privileges of Holder herein set forth are
coupled with an interest and are irrevocable, subject to the terms
and conditions hereof, and
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Debtor shall not take any action under the Leases or otherwise which
is inconsistent with this Debenture or any of the terms hereof and
any such action inconsistent herewith or therewith shall be void.
Debtor shall, from time to time, upon request of Holder, execute all
instruments and further assurances and all supplemental instruments
and take all such action as Holder from time to time may reasonably
request in order to perfect, preserve and protect the interests
intended to be assigned to Holder hereby.
(g) Debtor shall not, unilaterally or by agreement, subordinate, amend,
modify, extend, discharge, terminate, surrender, waive or otherwise
change any term of any of the Leases in any manner which would
violate this Debenture. If the Leases shall be amended as permitted
hereby, they shall continue to be subject to the provisions hereof
without the necessity of any further act by any of the parties
hereto.
(h) Nothing contained herein shall operate or be construed to (i)
obligate Holder to perform any of the terms, covenants or conditions
contained in the Leases or otherwise to impose any obligation upon
Holder with respect to the Leases (including, without limitation,
any obligation arising out of any covenant of quiet enjoyment
contained in the Leases in the event that any tenant under a Lease
shall have been joined as a party defendant in any action by which
the estate of such tenant shall be terminated) or (ii) place upon
Holder any responsibility for the operation, control, care,
management or repair of the Premises.
2.2 Security Interest in Personal Property.
(a) This Debenture shall constitute a security agreement and shall
create and evidence a security interest or common law Lien in all
items of Mortgaged Property in which a security interest may be
granted or created pursuant to the Personal Property Security Act
(Ontario) ("PPSA"), if applicable, or any similar applicable
legislation in effect in any state or province in which the Premises
are located or under the common law in such state or province
(collectively, "Personal Property"). Such security interest or Lien
shall attach to the Personal Property at the earliest possible time
under applicable law.
(b) Subject to the creation of the security interest contemplated in
Section 2.2(a), upon the occurrence of any Event of Default, in
addition to the remedies set forth in Section 3, Holder shall have
the power to sell the Personal Property in accordance with the PPSA
or any similar legislation as enacted in any state or province in
which the Premises are located or under other applicable law. It
shall not be necessary that any Personal Property offered be
physically present at any such sale or constructively in the
possession of Holder or the person conducting the sale.
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(c) Subject to the creation of the security interest contemplated in
Section 2.2(a), upon the occurrence and during the continuance of
any Event of Default, Holder may sell the Personal Property or any
part thereof at public or private sale with notice to Debtor as
hereinafter provided. The Proceeds of any such sale, after deducting
all expenses of Holder in taking, storing, repairing and selling the
Personal Property (including, without limitation, attorneys' fees)
shall be applied in the manner set forth in subsection 3.2(c). At
any sale, public or private, of the Personal Property or any part
thereof, Holder may purchase any or all of the Personal Property
offered at such sale.
(d) Subject to the creation of the security interest contemplated in
Section 2.2(a), holder shall give Debtor reasonable notice of any
sale of any of the Personal Property pursuant to the provisions of
this Section 2.2. Notwithstanding the provisions of Section 5.2, but
subject to the requirements of all applicable laws, any such notice
shall conclusively be deemed to be reasonable and effective if such
notice is mailed at least five (5) days prior to any sale, by first
class or certified mail, postage prepaid to Debtor at its address
determined in accordance with the provisions of Section 5.2.
SECTION 3 -- EVENTS OF DEFAULT AND REMEDIES
3.1 Remedies in Case of an Event of Default. If an Event of Default shall have
occurred and be continuing, Holder may, but shall not be obligated to, in
addition to any other action permitted by law (and not limited in any manner by
the remedies contained in the Notes, the Indenture and the Additional
Indebtedness Instruments), take one or more of the following actions, all
subject to the Indenture and/or such restrictions as are contained in the
applicable Intercreditor Agreements:
(a) by written notice to Debtor, declare any principal sum, interest and
other amounts hereby secured to be due and payable immediately;
(b) personally, or by its agents or attorneys, (i) enter into and upon
all or any part of the Mortgaged Property and exclude Debtor, its
agents and servants wholly therefrom, (ii) use, operate, manage and
control the Premises and the Equipment and conduct the business
thereof, (iii) maintain and restore the Mortgaged Property, (iv)
make all reasonably necessary or proper repairs, renewals and
replacements and such useful Alterations thereto and thereon as
Holder may deem advisable, (v) manage, lease and operate the
Mortgaged Property and carry on the business thereof and exercise
all rights and powers of Debtor with respect thereto either in the
name of Debtor or otherwise, or (vi) collect and receive all
earnings, revenues, rents, issues, profits and income of the
Mortgaged Property and any or every part thereof;
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(c) with or without entry, personally or by its agents or attorneys, (i)
sell the Mortgaged Property and all estate, right, title and
interest, claim and demand therein at one or more sales in one or
more parcels, in accordance with the provisions of Section 3.2 or
(ii) institute and prosecute proceedings for the complete or partial
foreclosure of the Lien and security interests created and evidenced
hereby;
(d) by instrument in writing appoint any person to be a receiver (which
term shall include a receiver and manager) of the Mortgaged Property
or of any part thereof and may remove any receiver so appointed and
appoint another in his stead; and except as may be otherwise
directed by Holder, all moneys from time to time received by any
such receiver shall be received in trust for and paid over to
Holder; and any such receiver so appointed shall have power:
(1) to take possession of the Mortgaged Property or any part
thereof;
(2) to carry on all or any part of the business of Debtor relating
to the Mortgaged Property;
(3) to borrow money on the security of the Mortgaged Property in
priority to this Debenture for the purpose of the maintenance,
preservation or protection of the Mortgaged Property or any
part thereof or for carrying on all or any part of the
business of Debtor relating to the Mortgaged Property; and
(4) to sell, lease or otherwise dispose of the whole or any part
of the Mortgaged Property at public auction, by public tender
or by private sale, either for cash or upon credit, at such
time and upon such terms and conditions as the receiver shall
determine; provided, however, that any such receiver shall be
deemed the agent of Debtor and Holder shall not be in any way
responsible for any misconduct or negligence of any such
receiver;
(e) exercise any of the other rights to which Holder is entitled as
holder of this Debenture, including the right to take proceedings in
any court of competent jurisdiction for the appointment of a
receiver, for the sale of the Mortgaged Property or any part thereof
or for foreclosure, and the right to take any other action, suit,
remedy or proceeding authorized or permitted thereunder or by law or
by equity in order to enforce the security constituted by this
Debenture; or
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(f) take such steps to protect and enforce its rights whether by action,
suit or proceeding at law or in equity for the specific performance
of any covenant, condition or agreement in the Indenture, the Notes
and any other document evidencing or securing the Secured
Obligations or in aid of the execution of any power granted in this
Debenture, or for any foreclosure hereunder, or for the enforcement
of any other appropriate legal or equitable remedy or otherwise as
Holder shall elect.
3.2 Sale of Mortgaged Property If Event of Default Occurs; Proceeds of Sale.
(a) If an Event of Default shall have occurred and be continuing Holder
(or any receiver or receiver and manager appointed pursuant to the
provisions of subsection 3.1(d) or 3.1(e)) may, subject to the
Indenture and/or any restrictions contained in the applicable
Intercreditor Agreements in addition to any other action permitted
by law, immediately take possession of all or any part of the
Mortgaged Property and, whether or not Holder has done so, in its
own name pursuant to the mortgages, charges and security interests
constituted hereby, or in the name of Debtor, may in its sole
discretion sell, lease or otherwise dispose thereof either as a
whole or in separate parcels at public auction, by public tender or
by private sale, either for cash or upon credit and upon such terms
and conditions as Holder may determine. Holder may execute and
deliver to any purchaser of the Mortgaged Property or any part
thereof good and sufficient deeds and documents for the same, Holder
being irrevocably constituted the attorney of Debtor for the purpose
of making any such sale and executing such deeds and documents. At
such time as Holder or any purchaser of all or any portion of the
Mortgaged Property shall enter on and take possession of the
Mortgaged Property, Holder or such purchaser, as the case may be,
shall have quiet enjoyment of the applicable Mortgaged Property. So
long as the amounts hereby secured, or any part thereof, remain
unpaid, Debtor agrees that possession of the Mortgaged Property by
Debtor, or any person claiming under Debtor, shall be as tenant and,
in case of a sale as provided in this subsection 3.2(a), Debtor and
any person in possession under Debtor, as to whose interest such
sale was not made subject, shall, at the option of the purchaser at
such sale, then become and be tenants holding over, and shall
forthwith deliver possession to such purchaser, or be summarily
dispossessed in accordance with the laws applicable to tenants
holding over. One or more exercises of powers herein granted shall
not extinguish or exhaust such powers, until the entire Mortgaged
Property is sold or all amounts hereby secured are paid in full.
(b) In the event of any sale made under or by virtue of this Section 3,
the entire amount hereby secured, if not previously due and payable,
shall, at the option of Holder, immediately become due and payable,
anything in this Debenture to the contrary notwithstanding.
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(c) The proceeds received by Holder in respect of any sale of all or any
part of the Mortgaged Property made under or by virtue of this
Section 3, together with any other sums which then may be held by
Holder under this Debenture, whether under the provisions of this
Section 3 or otherwise, shall, except as otherwise required by law,
be applied by Holder in accordance with the provisions of the
Indenture and/or the applicable Intercreditor Agreements. In the
case of a sale for cash or credit, or part cash and part credit,
subject to the Indenture and/or any restrictions contained in the
applicable Intercreditor Agreements, Holder shall be bound to pay
Debtor only such moneys as have been actually received from
purchasers after the satisfaction of all claims in respect of the
Secured Obligations in the taking, recovering, keeping possession
of, and any sale of, the Mortgaged Property.
(d) Holder may bid for and acquire the Mortgaged Property or any part
thereof at any sale made under or by virtue of this Section 3 and,
in lieu of paying cash therefor, may make settlement for the
purchase price by crediting against the purchase price the unpaid
amounts outstanding to Holder whether or not then due and owing in
respect of amounts hereby secured, after, to the extent permitted by
applicable law, deducting from the sales price the expense of the
sale and the reasonable costs of the action or proceedings and any
other sums that Holder is authorized to deduct under this Debenture.
(e) To the extent permitted by applicable law, Holder may rescind or
vary any contract of sale and resell with or under any of the powers
conferred hereunder and adjourn from time to time any sale by it to
be made under or by virtue of this Debenture by announcement at the
time and place appointed for such sale or for such adjourned sale or
sales and Holder, without further notice or publication, may make
such sale at the time and place to which the same shall be so
adjourned without being answerable for any loss occasioned by such
sale or by any postponement thereof.
(f) Any sale made as aforesaid shall be a perpetual bar both in law and
in equity against Debtor and all other persons claiming the
Mortgaged Property or any part thereof, by, from, through or under
Debtor.
3.3 Additional Remedies in Case of an Event of Default.
(a) Holder shall be entitled to recover judgment either before, after or
during the pendency of any proceedings for the enforcement of the
provisions of this Debenture, and the right of Holder to recover
such judgment shall not be affected by any entry or sale hereunder,
or by the exercise of any other right, power or remedy for the
enforcement of the provisions of this Debenture, or the foreclosure
of, or absolute conveyance pursuant to, this Debenture. In case of
proceedings
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against Debtor in insolvency or bankruptcy or any proceedings for
its reorganization or involving the liquidation of its assets,
Holder shall be entitled to prove the whole amount of principal and
interest and other payments, charges and costs due hereunder to the
full amount thereof after deducting therefrom any proceeds obtained
from the sale of the whole or any part of the Mortgaged Property;
provided, however, that in no case shall Holder receive a greater
amount than the aggregate of such principal, interest and such other
payments, charges and costs from the proceeds of the sale of the
Mortgaged Property and the distribution from the estate of Debtor,
and all such amounts shall bear interest at a rate per annum equal
to the rate payable on the outstanding principal sum of this
Debenture.
(b) Any recovery of any judgment by Holder and any levy of any execution
under any judgment upon the Mortgaged Property shall not affect in
any manner or to any extent the mortgage, charge and security
interest created and evidenced hereby upon the Mortgaged Property or
any part thereof, or any conveyances, powers, rights and remedies of
Holder hereunder, but such conveyances, powers, rights and remedies
shall continue unimpaired as before.
(c) Any moneys collected by Holder under this Section 3.3 shall be
applied in accordance with the provisions of subsection 3.2(c).
3.4 Additional Remedies in Respect of Intellectual Property. In addition to the
other rights and remedies provided for herein or otherwise available to it,
Holder may, in accordance with the terms of, and at the times specified, if any,
in the Indenture and/or any restrictions contained in the applicable Additional
Lender Intercreditor Agreements, license or sublicense (whether general, special
or otherwise, and whether on an exclusive or non-exclusive basis) all or any
portions of the Intellectual Property throughout the world for such term or
terms, on such conditions and in such manner as Holder shall determine. Upon
request by Holder, Debtor shall execute and deliver to Holder any powers of
attorney, in form and substance satisfactory to Holder, for the implementation
of any lease, assignment, license, sublicense, grant of option, sale or other
disposition of any Intellectual Property.
3.5 Legal Proceedings After an Event of Default.
(a) After the occurrence of any Event of Default and immediately upon
the commencement of any action, suit or legal proceedings to obtain
judgment for the amounts hereby secured or any part thereof, or of
any proceedings to foreclose the mortgage, charge and security
interest created and evidenced hereby or otherwise enforce the
provisions of this Debenture or of any other proceedings in aid of
the enforcement of this Debenture, Debtor shall enter its voluntary
appearance in such action, suit or proceeding.
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(b) Upon the occurrence of an Event of Default, Holder shall be entitled
forthwith as a matter of right, concurrently or independently of any
other right or remedy hereunder either before or after declaring the
amounts hereby secured or any part thereof to be due and payable, to
the appointment of a receiver or other custodian, as contemplated by
subsection 3.1(d), ex parte and without giving notice to any party
and without regard to the adequacy or inadequacy of any security for
the amounts hereby secured or the solvency or insolvency of any
person or entity then legally or equitably liable for the amounts
hereby secured or any portion thereof. Debtor hereby consents to the
appointment of such receiver. Notwithstanding the appointment of any
receiver or other custodian, Holder shall be entitled as pledgee to
the possession and control of any cash, deposits or instruments at
the time held by or payable or deliverable under the terms of the
Indenture and/or the applicable Intercreditor Agreements to Holder.
(c) Debtor shall not (i) at any time insist upon or plead or in any
manner whatsoever claim or take any benefit or advantage of any stay
or extension or moratorium law, any exemption from execution or sale
of the Mortgaged Property or any part thereof, wherever enacted, now
or at any time hereafter in force, which may affect the covenants
and terms of performance of this Debenture, (ii) claim, take or
insist on any benefit or advantage of any law now or hereafter in
force providing for the valuation or appraisal of the Mortgaged
Property, or any part thereof, prior to any sale or sales of the
Mortgaged Property which may be made pursuant to this Debenture, or
pursuant to any decree, judgment or order of any court of competent
jurisdiction or (iii) after any such sale or sales, claim or
exercise any right under any statute heretofore or hereafter enacted
to redeem the property so sold or any part thereof. To the extent
permitted by applicable law, Debtor hereby expressly (i) waives all
benefit or advantage of any such law or laws, including, without
limitation, any statute of limitations applicable to this Debenture,
(ii) waives any and all rights to trial by jury in any action or
proceeding related to the enforcement of this Debenture, (iii)
waives any objection which it may now or hereafter have to the
laying of venue of any action, suit or proceeding brought in
connection with this Debenture in any jurisdiction to which it has
consented under the Indenture, any Indenture Document and/or the
applicable Intercreditor Agreements and further waives and agrees
not to plead that any such action, suit or proceeding brought in any
such jurisdiction has been brought in an inconvenient forum and (iv)
covenants not to delay or impede the execution of any power granted
or delegated to Holder by this Debenture, but to suffer and permit
the execution of every such power as though no such law or laws had
been made or enacted. Debtor, for itself and all who may claim under
it, waives all rights to have the Mortgaged Property marshalled on
any foreclosure of this Debenture.
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3.6 Remedies Not Exclusive. No remedy conferred upon or reserved to Holder by
this Debenture is intended to be exclusive of any other remedy or remedies, and
each and every such remedy shall be cumulative and shall be in addition to every
other remedy given under this Debenture or now or hereafter existing at law or
in equity. Any delay or omission of Holder to exercise any right or power
accruing upon the occurrence of an Event of Default shall not impair any such
right or power and shall not be construed to be a waiver of or acquiescence in
any such Event of Default. Every power and remedy given by this Debenture may be
exercised from time to time concurrently or independently, when and as often as
may be deemed expedient by Holder in such order and manner as Holder, in its
sole discretion, may elect. If Holder accepts any moneys required to be paid by
Debtor under this Debenture after the same become due, such acceptance shall not
constitute a waiver of the right either to require prompt payment, when due, of
all other sums secured by this Debenture or to declare an Event of Default with
regard to subsequent defaults. If Holder accepts any moneys required to be paid
by Debtor under this Debenture in an amount less than the sum then due, such
acceptance shall be deemed an acceptance on account only and on the condition
that it shall not constitute a waiver of the obligation of Debtor to pay the
entire sum then due, and Debtor's failure to pay the entire sum then due shall
be and continue to be a default hereunder notwithstanding acceptance of such
amount on account.
3.7 No Additional Rights for Debtor Hereunder. If Holder shall enforce its
rights or remedies in violation of the terms of this Debenture or any
Intercreditor Agreement, Debtor agrees that it shall not raise such violation as
a defence to the enforcement by Holder of its rights under the Indenture and/or
any instrument evidencing or securing any Additional Secured Indebtedness, nor
assert such violation as a counterclaim or basis for set off or recoupment
against Holder.
SECTION 4 -- CERTAIN DEFINITIONS
4.1 Definitions. Capitalized terms not otherwise defined in this Debenture shall
have the meanings given to them in the Indenture. The following terms shall have
the following respective meanings:
(a) Accounts means all accounts (including, without limitation, all rights of
Debtor to payment for Inventory sold or leased or for services rendered, which
are not evidenced by instruments or chattel paper, and whether or not earned by
performance), chattel paper, documents, instruments and other forms of payment
in each case relating to or evidencing the payment of money arising out of the
sale, lease or other disposition of Inventory or rendition of services in the
ordinary course of business and all monies and securities to the extent relating
to the foregoing.
(b) Accounts Proceeds means all proceeds of Accounts, including, without
limitation, proceeds whether now or hereafter held or received or held by, or in
transit to, Congress Financial Corporation (Canada) or Holder or any of their
respective affiliates or participants,
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whether for safekeeping, pledge, custody, transmission, collection or otherwise;
deposits (general or special) and balances to the extent relating to the
foregoing, all right, title and interest in, to and in respect of all goods
relating to, or which by sale have resulted in any of the foregoing, including,
without limitation, all goods described in invoices, documents, contracts or
instruments with respect to, or otherwise representing or evidencing, any of
same, including, without limitation, all returned, reclaimed or repossessed
goods; all right, title and interest, and all enforcement and other rights,
remedies, and security and liens, in, to and in respect of any of the foregoing,
including, without limitation, rights of stoppage in transit, replevin,
repossession, sequestration and reclamation and other rights and remedies of an
unpaid vendor, lienor or secured party, guaranties, or other contracts of
suretyship with respect thereto, or deposits or other security for the
obligation of any account debtor, credit and other insurance to the extent
relating to the foregoing, the proceeds of all of the foregoing; and all
ledgers, books of account, records, tapes, cards, computer programs, computer
disks or tapes, computer printouts, computer runs, and other computer prepared
information to the extent relating to any of the foregoing.
(c) Additional Undertaking means (a) cash or Cash Equivalents or (b) a Surety
Bond, Guaranty or Letter of Credit which is (i) provided by a Person, (ii) whose
long-term unsecured debt is rated at least AA (or equivalent) by a Rating Agency
and (iii) is otherwise satisfactory to Holder. Additional Undertakings shall be
addressed directly to Holder and shall name Holder as the beneficiary thereof
and the party entitled to make claims thereunder.
(d) Business Day means any day other than a Saturday, Sunday or any other day on
which banking institutions in the City of New York are required or authorized by
law or other governmental action to be closed.
(e) Cash Equivalents means (1) securities issued or directly and fully
guaranteed or insured by the United States or the Canadian Government or any
agency or instrumentality thereof having maturities of not more than 12 months
from the date of acquisition and rated at least "A" or the equivalent by either
Moody's Investors Service, Inc. or Standard & Poor's Ratings Services, (2)
certificates of deposit and Eurodollar time deposits with maturities of 12
months or less from the date of acquisition, bankers' acceptances with
maturities not exceeding 12 months and overnight bank deposits, in each case
with any lender party to the New Bank Credit Facility or with any domestic
commercial bank having capital and surplus in excess of U.S.$250 million and a
Keefe Bank Watch Rating of B or better, (3) repurchase obligations with a term
of not more than 30 days for underlying securities of the types described in
clauses (1) and (2) entered into with any financial institution meeting the
qualifications specified in clause (2) above, (4) commercial paper having the
highest rating obtainable from Moody's Investors Service, Inc. or Standard &
Poor's Ratings Services and in each case maturing within 12 months after the
date of acquisition, (5) securities with maturities of 12 months or less from
the date of acquisition backed by standby or direct pay letters of credit issued
by any bank satisfying the requirement of clause (2) above, and (6) any
money-market fund sponsored by any registered broker dealer or mutual fund
distributor that invests solely in instruments of the type set forth above.
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(f) Compiled Plan means the plan attached as Schedule I hereto showing the Land,
including the Land Swap-Sale Parcel, and the Land Swap-Acquisition Parcel.
(g) Cost of Construction means the sum, so far as it relates to the
reconstructing, renewing, restoring or replacing of the Improvements, of (i)
obligations incurred or assumed by Debtor or undertaken by tenants pursuant to
the terms of the Leases for labor, materials and other expenses and to
contractors, builders and materialmen; (ii) the cost of contract bonds and of
insurance of all kinds that may reasonably be deemed by Debtor to be necessary
during the course of construction; (iii) the expenses incurred or assumed by
Debtor (or tenant under the Lease performing such restoration) for test borings,
surveys, estimates, permits, any plans and specifications and preliminary
investigations therefor, and for supervising construction, as well as for the
performance of all other duties required by or reasonably necessary for proper
construction; (iv) ad valorem property taxes levied upon the Premises during
performance of any restoration; (v) any costs or other charges in connection
with obtaining title insurance and counsel opinions that may be required or
necessary in connection with a restoration; and (vi) any costs or other charges
in connection with obtaining services (including legal counsel) that may
reasonably be deemed by Debtor to be necessary in connection with the
construction.
(h) Event of Default means an Event of Default as defined under the Indenture.
(i) Farge Collateral means all Lender Collateral and any other Charged Property
that is not Trademarks, Storage Contracts or Fixed Charge Collateral as defined
in Granting Clauses A through M.
(j) Guaranty means the unconditional guarantee of payment of any corporation or
partnership organized and existing under the laws of the United States of
America or any state or the District of Columbia or Canada or province thereof
that has a long-term unsecured debt rating (as determined by each Rating Agency)
at the time such guarantee is delivered equal to or higher than the then current
rating of the Notes, given to Holder, accompanied by an Opinion of Counsel to
such guarantor to the effect that such guarantee has been duly authorized,
executed and delivered by such guarantor and constitutes the legal, valid and
binding obligation of such guarantor enforceable against such guarantor by
Holder in accordance with its terms subject to customary exceptions at the time
for opinions for such instruments, together with an Opinion of Counsel to the
effect that, taking into account the purpose under this Debenture for which such
guarantee will be given, such guarantee and accompanying opinion are responsive
to the requirements of this Debenture.
(k) Intangible means all contracts, contract rights, licenses and general
intangibles to the extent relating to the Accounts, Accounts Proceeds and the
Inventory, including, without limitation, contract rights which evidence or
support Accounts, choses in action or causes of actions or claims arising out of
Accounts or with respect to Inventory, agreements or arrangements with sales
agents, distributors or the like and/or consignees, warehouses or other third
persons in possession of Inventory, deposit accounts, letters of credit,
documents which
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evidence rights to Inventory, instruments (relating to Accounts, Accounts
Proceeds and Inventory), guaranty or warranty claims with respect to Accounts or
Inventory, and the proceeds of all of the foregoing.
(l) Inventory means all inventory (including, without limitation, all raw
materials, work-in-process, finished and semi-finished inventory or goods of any
kind, nature or description), held for sale, exchange or lease or furnished or
to be furnished under a contract of service or an exchange arrangement or used
or consumed in the business or in connection with the manufacturing, packaging,
shipping, advertising, selling or finishing of such goods, and all right, title
and interest therein and thereto, and the proceeds (including, without
limitation, all proceeds of insurance with respect thereto, including the
proceeds of any applicable casualty insurance to the extent relating thereto)
and products of all of the foregoing, and all ledgers, books of account,
records, tapes, cards, computer programs, computer disks or tapes, computer
printouts, computer runs, and other computer prepared information to the extent
relating to any of the foregoing.
(m) Land Exchange Agreement means a land exchange agreement dated September 30,
1992 between Point Tupper Terminals Company (a predecessor, by amalgamation, of
Debtor) and Nova Scotia Business Development Corporation and Her Majesty the
Queen in the Right of the Province of Nova Scotia (the "Province") with respect
to the Land Swap.
(n) Land Swap-Sale Parcel means the Land described in Schedule H hereto to be
conveyed to the Province pursuant to the Land Swap.
(o) Land Swap-Acquisition Parcel means the lands described in Schedule J hereto
to be conveyed to Debtor pursuant to the Land Swap.
(p) Lender Collateral means all of the Accounts, Accounts Proceeds, Inventory
and Intangibles of Debtor whether now owned or hereafter acquired and wherever
located.
(q) Letter of Credit means a clean, irrevocable, unconditional letter of credit
in favour of Holder and entitling Holder to draw thereon in The City of New York
issued by a bank with a letter of credit evaluation determined by each Rating
Agency, at the time such letter of credit is delivered, in one of the three
highest generic rating categories of such Rating Agency.
(r) Noteholder Collateral means all of the Mortgaged Property except for the
Lender Collateral.
(s) perfection means all necessary steps which, under applicable law, make a
security interest in Debtor's personal property effective as against Debtor, any
creditor or third party having a claim in such property or a trustee in
bankruptcy or any other representative of creditors of Debtor.
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(t) Rating Agency means Standard & Poor's Ratings Services or any successor
thereto, if such Person shall then be rating corporate obligations, and Moody's
Investor's Service, Inc. or any successor thereto, if such Person shall then be
rating corporate obligations, or, if neither such Person shall be rating
corporate obligations, then any other organization of generally recognized
standing, selected by Holder.
(u) rated or rating in connection with long-term unsecured debt, means that the
Person in question has, or has been determined to be qualified for, the rating
in question by the Rating Agency.
(v) security interest means an interest in personal property that secures
payment or performance of an obligation, and includes, whether or not the
interest secures payment or performance of an obligation, the interest of a
transferee of an account or chattel paper.
(w) Storage Contracts means all through-put, storage, blending and/or supply
contracts and all contracts in respect of conditions for use of terminal
facilities.
(x) Surety Bond means a clean irrevocable surety bond or credit insurance policy
in favour of Holder issued by an insurance company the claims paying ability
rating of which at the time such surety bond or credit insurance policy is
delivered is in one of the three highest generic rating categories of each
Rating Agency.
(y) Trademarks means any and all trademarks (including service marks), trademark
registrations, trade styles and trade names and applications therefor as may at
any time be filed in the Canadian Trademarks Office or in any similar office or
agency of Canada, any province thereof, any political subdivision thereof or in
any other country, including, without limitation, the trademark registrations
and applications therefor listed in Schedule K hereto, together with any and all
(i) rights and privileges arising under applicable law with respect to Debtor's
use of any trademarks, (ii) reissues, continuations, extensions and renewals
thereof, (iii) income, fees, royalties, damages and payments now and hereafter
due and/or payable under and with respect thereto, including, without
limitation, damages and payments for past or future infringements thereof, (iv)
all rights corresponding thereto throughout the world and (v) rights to sue for
past, present and future infringements thereof.
SECTION 5 -- MISCELLANEOUS
5.1 Severability. In the event any one or more of the provisions contained in
this Debenture shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision of this Debenture, but this Debenture shall
be construed as if such invalid, illegal or unenforceable provision had never
been contained herein or therein. The invalidity of any provision of this
Debenture in any one jurisdiction shall not affect or impair in any manner the
validity of such provision in any other jurisdiction.
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5.2 Notices. Unless otherwise provided herein or in the Indenture, any notice or
other communication herein shall be given in the manner and at the address set
forth in the Indenture, or as to any party at such other address as shall be
designated by such party in a written notice to the other party.
5.3 Covenants to Run with the Land. All of the grants, covenants, terms,
provisions and conditions in this Debenture shall run with the land and shall
apply to and bind the successors and assigns of Debtor.
5.4 Captions; Gender and Number. The captions and section headings of this
Debenture are for convenience only and are not to be used to define the
provisions hereof. All terms contained herein shall be construed, whenever the
context of this Debenture requires, so that the singular includes the plural and
so that the masculine includes the feminine.
5.5 Limitation on Interest Payable. It is the intention of the parties to
conform strictly to all laws relating to the eligibility and rate of interest
chargeable that are applicable to the transaction of which this Debenture is a
part. All agreements between Debtor and Holder, whether now existing or
hereafter arising and whether oral or written, are hereby expressly limited so
that in no contingency or event whatsoever shall the amount paid or agreed to be
paid by Debtor for the use, forbearance or detention of the money to be loaned
or advanced under the Indenture or any related document, or for the payment or
performance of any covenant or obligation contained herein or in the Indenture,
exceed the maximum amount permissible under applicable laws. If under any
circumstances whatsoever fulfilment of any such provision, at the time
performance of such provision shall be due, shall involve exceeding the limit of
validity prescribed by law, then the obligation to be fulfilled shall be reduced
to the limit of such validity. If under any circumstances Debtor shall have paid
an amount deemed interest by applicable law, which would exceed the highest
lawful rate, such amount that would be excessive interest under applicable laws
shall be applied to the reduction of the principal amount hereby secured and not
to the payment of interest, or if such excessive interest exceeds the unpaid
balance of principal and any other amounts due hereunder, the excess shall be
refunded to Debtor. All sums paid or agreed to be paid for the use, forbearance
or detention of the principal under any extension of credit or advancement of
funds by Holder shall, to the extent permitted by applicable law, and to the
extent necessary to preclude exceeding the limit of validity prescribed by law,
be amortized, prorated, allocated and spread from the date of this Debenture
until payment in full of principal amount hereby secured so that the actual rate
of interest on account of such principal amount is uniform throughout the term
hereof.
5.6 Indemnification; Reimbursement. Each and every obligation of Debtor to
indemnify and hold harmless the Holder, as trustee under the Indenture,
contained in Section 7.07 of the Indenture is incorporated herein mutatis
mutandis as an obligation of Debtor hereunder to indemnify Holder and Marine
Midland Bank in its individual capacity and the officers, directors, employees,
agents and affiliates of Holder (each, an "Indemnified Party"). In addition to
the foregoing, Debtor shall reimburse Holder and/or Marine Midland Bank in its
individual capacity,
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upon demand, for all costs and expenses reasonably incurred by Holder and/or
Marine Midland Bank in its individual capacity in connection with the
administration and enforcement of this Debenture. If any action or proceeding,
including, without limitation, bankruptcy or insolvency proceedings, is
commenced to which action or proceeding Holder is made a party or in which it
becomes necessary to defend or uphold the Lien or validity of this Debenture,
Debtor shall, upon demand, reimburse Holder for all expenses (including, without
limitation, attorneys' and agents' fees and disbursements) incurred by Holder in
such action or proceeding. In any action or proceeding to foreclose under this
Debenture or to recover or collect the amounts hereby secured, the provisions of
law relating to the recovery of costs, disbursements and allowances shall
prevail unaffected by this covenant. Debtor's obligations under this Section 5.6
shall survive the satisfaction of this Debenture and the discharge of Debtor's
other obligations hereunder.
5.7 Governing Law and Submission to Jurisdiction. This Debenture shall be
governed by and construed in accordance with the laws of the Province of Nova
Scotia and of Canada applicable therein. Debtor irrevocably submits to the
non-exclusive jurisdiction of the courts of the Province of Nova Scotia and of
Canada sitting in Nova Scotia in any action or proceeding arising out of or
relating to this Debenture and irrevocably agrees that all such actions and
proceedings may be heard and determined in such courts, and irrevocably waives,
to the fullest extent possible, the defence of an inconvenient forum. A judgment
or order in any such action or proceeding may be enforced in any jurisdiction in
any manner provided by law. For greater certainty, Holder may serve legal
process in any manner permitted by law and may bring an action or proceeding
against Debtor or the property or assets of Debtor in the courts of any
jurisdiction.
5.8 Judgment Currency. If for the purpose of obtaining judgment in any court it
is necessary to convert any amount owing or payable to Holder under this
Debenture from the currency in which it is due (the "Agreed Currency") into a
particular currency (the "Judgment Currency"), the rate of exchange applied in
such conversion shall be that at which Holder, in accordance with its normal
procedures, could purchase the Agreed Currency with the Judgment Currency at or
about noon on the Business Day immediately preceding the date on which judgment
is given. The obligation of Debtor in respect of any amount owing or payable
under this Debenture to Holder in the Agreed Currency shall, notwithstanding any
judgment and payment in the Judgment Currency, be satisfied only to the extent
that Holder, in accordance with its normal procedures, could purchase the Agreed
Currency with the amount of the Judgment Currency so paid at or about noon on
the next Business Day following such payment. If the amount of the Agreed
Currency which Holder could so purchase is less than the amount originally due
in the Agreed Currency, Debtor shall, as a separate obligation and
notwithstanding any such judgment or payment, indemnify Holder against such
loss. The amount of any such obligation shall bear interest at the rate
applicable to the principal amount of this Debenture from the date such amount
becomes due.
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5.9 Changes in Writing. This Debenture may not be modified, amended, discharged
or waived in whole or in part except by an instrument in writing executed in
accordance with the Indenture and signed by (i) Debtor, to the extent any
modification, amendment, discharge or waiver is sought to be enforced against
Debtor, and (ii) Holder, in accordance with the provisions of the Indenture to
the extent any modification, amendment, discharge or waiver is sought to be
enforced against Holder.
5.10 No Merger. The rights and estate created by this Debenture shall not, under
any circumstances, be held to have merged into any other estate or interest now
owned or hereafter acquired by Holder unless Holder shall have consented to such
merger in writing. The taking of a judgment or judgments under any of the
covenants in this Debenture shall not operate as a merger of the covenant or
affect any other right of Holder under this Debenture or otherwise.
5.11 No Set-Off. The principal sum, interest and other amounts hereby secured
will be paid and shall be assignable free from any right of set-off or
counterclaim between Debtor and Holder or any other person or persons.
5.12 Concerning Holder.
(a) Holder shall be entitled to rely upon any written notice, statement,
certificate, order or other document believed by it to be genuine
and correct and to have been signed, sent or made by the proper
person, and, with respect to all matters pertaining to this
Debenture and its duties hereunder, upon advice of counsel selected
by it.
(b) Debtor shall recognize as the Holder under this instrument any party
who has succeeded to the interest of Holder under the Indenture and
the Additional Lender Intercreditor Agreement
(c) If any item of Mortgaged Property also constitutes collateral
granted to Holder under any other mortgage, security agreement,
debenture, pledge or instrument of any type, in the event of any
conflict between the provisions of this Debenture and the provisions
of such other security agreement, debenture, pledge or instrument of
any type in respect of such collateral, Holder, in its sole
discretion, shall select which provision or provisions shall
control.
(d) Holder may resign from the performance of all its functions and
duties hereunder at any time by giving ten (10) days' prior written
notice to Debtor. Such resignation shall take effect upon the
appointment of a successor Holder pursuant to the provisions of the
Indenture and/or the Additional Lender Intercreditor Agreement.
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(e) Holder has been appointed as collateral agent pursuant to the
Indenture and the Additional Lender Intercreditor Agreement. The
actions of Holder hereunder are subject to the provisions of the
Indenture and the Additional Lender Intercreditor Agreement. Holder
shall have the right hereunder to make demands, to give notices, to
exercise or refrain from exercising any rights, and to take or
refrain from taking any action (including, without limitation, the
release or substitution of Mortgaged Property), in accordance with
this Debenture, the Indenture and the Additional Lender
Intercreditor Agreement.
5.13 Holder's Right to Sever Indebtedness.
(a) Debtor acknowledges that (i) the Mortgaged Property does not
constitute the sole source of security for the payment and
performance of the Secured Obligations and that the Secured
Obligations are also secured by property of Debtor and its
affiliates in other jurisdictions (all such property, collectively,
the "Collateral"), (ii) the number of such jurisdictions and the
nature of the transaction of which this instrument is a part are
such that it would have been impracticable for the parties to
allocate to each item of Collateral a specific loan amount and to
execute in respect of such item a separate indenture and (iii)
Debtor intends that Holder have the same rights with respect to the
Mortgaged Property, in foreclosure or otherwise, that Holder would
have had if each item of Collateral had been mortgaged or pledged
pursuant to a separate debenture or indenture and mortgage or
security document. In furtherance of such intent, Debtor agrees that
Holder may at any time by notice (an "Allocation Notice") to Debtor
allocate a portion (the "Allocated Indebtedness") of the obligations
hereby secured to the Mortgaged Property and sever from the
remaining obligations hereby secured the Allocated Indebtedness.
From and after the giving of an Allocation Notice with respect to
the Mortgaged Property, the obligations hereby secured shall be
limited to the extent set forth in the Allocation Notice and (as so
limited) shall, for all purposes, be construed as a separate loan
obligation of Debtor unrelated to the other transactions
contemplated by the Indenture or any document related to either
thereof. To the extent that the proceeds on any foreclosure of the
Mortgaged Property shall exceed the Allocated Indebtedness, such
proceeds shall belong to Debtor and shall not be available hereunder
to satisfy any obligations secured hereby of Debtor other than the
Allocated Indebtedness. In any action or proceeding to foreclose the
Lien of this Debenture or in connection with any power of sale,
foreclosure or other remedy exercised under this Debenture commenced
after the giving by Holder of an Allocation Notice, the Allocation
Notice shall be conclusive proof of the limits of the obligations
hereby secured, and Debtor may introduce, by way of defense or
counterclaim, evidence thereof in any such action or proceeding.
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(b) Debtor hereby waives, to the greatest extent permitted under law,
the right to a discharge of any of the amounts hereby secured under
any statute or rule of law now or hereafter in effect which provides
that foreclosure of the Lien of this Debenture or other remedy
exercised under this Debenture constitutes the exclusive means for
satisfaction of the amounts hereby secured or which makes
unavailable a deficiency judgment or any subsequent remedy because
Holder elected to proceed with a power of sale foreclosure or such
other remedy or because of any failure by Holder to comply with laws
that prescribe conditions to the entitlement to a deficiency
judgment. Notwithstanding the foregoing waiver, in the event that
any court shall for any reason hold that Holder is not entitled to a
deficiency judgment, Debtor shall not (a) introduce in any other
jurisdiction such judgment as a defense to enforcement against
Debtor of any remedy in the Indenture, any Security Document or any
document related thereto or (b) seek to have such judgment
recognized or entered in any other jurisdiction, and any such
judgment shall in all events be limited in application only to the
province, state or jurisdiction where rendered.
(c) In the event any instrument in addition to the Allocation Notice is
necessary to effectuate the provisions of this Section 5.13,
including, without limitation, any amendment to this Debenture, any
substitute promissory note or affidavit or certificate of any kind,
Holder may execute, deliver or record such instrument as the
attorney-in-fact of Debtor in the event that Debtor fails to deliver
such instrument within ten (10) days after delivery to Debtor of a
request therefor. Such power of attorney is coupled with an interest
and is irrevocable.
5.14 Waiver of Stay.
(a) Debtor agrees that in the event that Debtor or any property or
assets of Debtor shall hereafter become the subject of a voluntary
or involuntary proceeding under the Bankruptcy Code, the Bankruptcy
and Insolvency Act (Canada) or the Companies Creditors' Arrangement
Act (Canada) or any other insolvency or bankruptcy legislation, or
Debtor shall otherwise be a party to any bankruptcy, insolvency,
moratorium or similar proceeding which gives rise to a stay which
has the effect of preventing Holder from enforcing its rights
hereunder (including, without limitation, the automatic stay under
Section 362 of the Bankruptcy Code or any similar provision under
any applicable law), then, in any such case, whether or not Holder
has commenced foreclosure proceedings under this Debenture, Holder
shall be entitled to relief from any such automatic stay as it
relates to the exercise of any of the rights and remedies
(including, without limitation, any foreclosure proceedings)
available to Holder as provided in this Debenture or in any other
document evidencing or securing the Secured Obligations.
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(b) Holder shall have the right to petition or move any court having
jurisdiction over any proceeding described in subsection 5.14(a) for
the purposes provided therein, and Debtor agrees (i) not to oppose
any such petition or motion and, (ii) at Debtor's sole cost and
expense, to assist and cooperate with Holder, as may be requested by
Holder from time to time, in obtaining any relief requested by
Holder, including, without limitation, by filing any such petitions,
supplemental petitions, requests for relief, documents, instruments
or other items from time to time requested by Holder or any such
court.
5.15 No Credit for Payment of Taxes or Impositions. Debtor shall not be entitled
to any credit against the principal, premium, if any, or interest payable on the
Notes, and Debtor shall not be entitled to any credit against any other sums
which may become payable under the terms thereof or hereof by reason of the
payment of any tax or other impositions on the Mortgaged Property or any part
thereof.
5.16 Stamp and Other Taxes. Subject to the provisions of subsection 1.10(e)
relating to permitted contests, Debtor shall pay all documentary stamp taxes,
with interest and fines and penalties, and any mortgage or debenture recording
taxes or fees, with interest and fines and penalties, that may hereafter be
levied, imposed or assessed under or upon or by reason of this Debenture or the
obligations hereunder secured or any instrument or transaction affecting or
relating to either thereof and in default thereof Holder may advance the same
and the amount so advanced shall be payable by Debtor to Holder immediately upon
demand therefor, and all such amounts shall bear interest at a rate per annum
equal to the rate payable on the outstanding principal sum of this Debenture
from and including the date on which such funds were so expended to the date of
repayment thereof.
5.17 Estoppel Certificates. Each party hereto shall, from time to time, upon
twenty (20) days' prior written request by the other party, execute, acknowledge
and deliver to such other party a certificate signed by an authorized officer or
officers stating that this Debenture and the other Indenture Documents are
unmodified and in full force and effect (or, if there have been modifications,
that this Debenture and such other Indenture Documents, as applicable, are in
full force and effect as modified and setting forth such modifications) and
stating the date to which payments have been made in respect of the Secured
Obligations.
5.18 Additional Security. Without notice to or consent of Debtor and without
impairment of the Lien and rights created by this Debenture, Holder may accept
(but Debtor shall not be obligated to furnish) from Debtor or from any other
Person or Persons, additional security for the Secured Obligations. Neither the
giving of this Debenture nor the acceptance of any such additional security
shall prevent Holder from resorting, first, to such additional security, and,
second, to the security created by this Debenture without affecting Holder's
Lien and rights under this Debenture.
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5.19 Discharge of Debenture. If Debtor, its successors or assigns shall pay or
cause to be paid to Holder the moneys secured by this Debenture and shall
otherwise observe and perform the terms hereof and of the Indenture Documents,
then this Debenture and the rights hereby granted shall cease and be void and
thereupon Holder shall, in accordance with and as provided in the Indenture at
the request and at the expense of Debtor, its successors or assigns, execute and
deliver to Debtor, its successors or assigns, such deeds and other instruments
as shall be requisite to cancel and discharge the Lien hereby constituted. In
addition, the Liens granted to Holder hereunder in the Lender Collateral shall,
to the extent, and in accordance with, and in the manner contemplated by Section
5 of the applicable Access Intercreditor Agreement, automatically be released
and shall terminate.
5.20 Pledge of Debenture. Notwithstanding the provisions of Section 5.19, this
Debenture at any time and from time to time may be assigned, transferred,
pledged, hypothecated, lodged, deposited or delivered by Debtor to Holder as
security for advances or loans to or for indebtedness or other obligations or
liabilities of Debtor to Holder and/or such other parties as Holder and Debtor
may in writing agree and in such event this Debenture shall not be deemed to
have been discharged or redeemed or the amounts payable hereunder to have been
satisfied or reduced by reason of the account of Debtor having ceased to be in
debit while this Debenture remained so assigned, transferred, pledged,
hypothecated, lodged, deposited or delivered.
5.21 Expenses of Collection. In the event this Debenture or any other instrument
evidencing the obligations hereunder secured is placed in the hands of counsel
for collection of any amount payable hereunder or thereunder or for the
enforcement of any of the provisions hereof or thereof, Debtor agrees to pay all
reasonable costs associated therewith incurred by Holder, either with or without
the institution of an action, suit or other proceeding, in addition to all
costs, disbursements and allowances provided by law, all such costs to be paid
upon demand, together with interest thereon at a rate per annum equal to the
rate payable on the outstanding principal sum of this Debenture from the date of
notice or incurring thereof, and the same shall be deemed to be secured hereby.
5.22 Business Days. In the event any time period or any date provided in this
Debenture ends or falls on a day other than a Business Day, then such time
period shall be deemed to end and such date shall be deemed to fall on the next
succeeding Business Day, and performance herein may be made on such Business
Day, with the same force and effect as if made on such other day.
5.23 Time of Essence. Time shall be of the essence of this Debenture and of each
and every part hereof.
5.24 Acknowledgment and Receipt. Debtor hereby acknowledges receipt of an
executed copy of this Debenture.
5.25 Not a Negotiable Instrument. This Debenture is not a negotiable instrument.
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5.26 Multiple Executed Copies. Each original copy of this Debenture may be
executed by any number of different individuals on behalf of Debtor and each
such original shall constitute one and the same Debenture.
5.27 No Recourse Against Others. A director, officer, employee, stockholder or
incorporator, as such, of Debtor, shall not have any liability for any
obligations of Debtor or for any claim based on, in respect of or by reason of
such obligations or their creation.
IN WITNESS WHEREOF Debtor has caused its corporate seal to be affixed to this
Debenture, by its officers duly authorized in that behalf on the _____ day of
_________, 1996 at ______ a.m. (Halifax, Nova Scotia time).
STATIA TERMINALS CANADA,
INCORPORATED
By: /s/ David B. Pittaway
-----------------------------
Name: David B. Pittaway
Title: President
<PAGE>
EXECUTION COPY
Schedule A - Legal Description
<PAGE>
EXECUTION COPY
Schedule B - Copyrights
no registered copyrights
<PAGE>
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Schedule C - Patents
nil
<PAGE>
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Schedule D - Industrial Designs
nil
<PAGE>
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Schedule E - Licenses
nil
<PAGE>
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Schedule F - Prior Liens
Part I - Prior Liens in Respect of Noteholder Collateral
1. the Liens permitted pursuant to subsection 1.18(a) of the attached
Debenture;
2. such easements and other rights as are referenced in the real property
description comprising Schedule A to the Debenture;
3. an Option Agreement dated October 20, 1993 granted by Point Tupper
Terminals Company, a predecessor of the Debtor, to Scotia Synfuels Limited
for the acquisition of a portion of the real property described in
Schedule A; provided that, for greater certainty, any disposition of
Mortgaged Property contemplated in such Option Agreement shall be subject
to all applicable requirements of the Indenture, including, without
limitation, Sections 4.15 and 11.04 of the Indenture;
4. the claims by the Province Nova Scotia to certain portions of the real
property described in Schedule A as public highways;
5. the interests of the Province of Nova Scotia pursuant to a land exchange
agreement dated December 30, 1992 entered into between Point Tupper
Terminals Company, a predecessor of the Debtor, and the Province of Nova
Scotia and Nova Scotia Business Development Corporation to require
conveyance of certain road alignments and the Port Hawkesbury watershed
lands in return for a conveyance by the Province of Nova Scotia to the
Debtor of certain portion of the Port Malcolm Road, Old Sunnyside Road and
Old Bearhead Access road;
6. leases of premises which are included in the real property described in
Schedule A which were entered into the ordinary course of business of the
Debtor prior to the date hereto; and
7. the reservation of mineral mining rights to the Province of Nova Scotia.
Part II - Prior Liens in Respect of Lender Collateral
1. the Liens permitted pursuant to subsection 1.18(a) of the attached
Debenture; and
2. liens in favour of Congress Financial Corporation (Canada), or any
subsequent lender, securing Indebtedness permitted under Section 4.04(i)
of the Indenture.
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Schedule G - Equipment Locations
at the real property described in Schedule "A"
<PAGE>
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Schedule H - Land Swap Sale Parcel
<PAGE>
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Schedule I - Compiled Plan
<PAGE>
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Schedule J - Land Swap Acquisition Parcel
<PAGE>
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Schedule K - Trademarks
nil
<PAGE>
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CANADA )
PROVINCE OF NOVA SCOTIA )
IN THE MATTER OF STATIA TERMINALS CANADA,
INCORPORATED, a body corporate
AND IN THE MATTER OF THE CORPORATIONS SECURITIES
REGISTRATION ACT (NOVA SCOTIA)
A F F I D A V I T
I, Fraser MacFadyen, of the Regional Municipality of Halifax, in the Province of
Nova Scotia make oath and say as follows:
1. I am a Vice-President of STATIA TERMINALS CANADA, INCORPORATED (the
"Company");
2. The total amount secured or to be secured by the Debenture of the Company is
U.S.$500,000,000 together with interest and other amounts payable as described
therein;
3. A true copy of the Debenture of the Company is attached hereto and marked
Schedule A;
4. The date of execution of the said Debenture was the 27th day of November,
1996; and
5. I, the deponent, am aware of the circumstances connected with this
transaction and have personal knowledge of the facts above deposed to.
SWORN TO at the Regional Municipality )
of Halifax, in the Province of Nova )
Scotia this 27th day of November )
1996, before me: )
) ____________________________
______________________________ )
A Commissioner of the Supreme )
Court of Nova Scotia.
<PAGE>
- --------------------------------------------------------------------------------
DEBENTURE DELIVERY AGREEMENT
Made on November 27, 1996
Between
STATIA TERMINALS CANADA, INCORPORATED
and
MARINE MIDLAND BANK, as Trustee
- --------------------------------------------------------------------------------
MCMILLAN BINCH
---------
BARRISTERS & SOLICITORS
<PAGE>
THIS DEBENTURE DELIVERY AGREEMENT dated on this 27th day of November, 1996.
BETWEEN:
STATIA TERMINALS CANADA INCORPORATED
(the "Debtor")
- and -
MARINE MIDLAND BANK, as Trustee
WITNESSES THAT FOR VALUE RECEIVED Debtor covenants and agrees with the Trustee
as follows:
1. Definitions. In this agreement:
(a) "Additional Indebtedness Instrument" means any instrument governing the
obligations of Debtor with respect to the Additional Secured Indebtedness.
(b) "Additional Secured Indebtedness" has the meaning given to it in the
Indenture.
(c) "Debenture" means a fixed and floating charge debenture issued by the Debtor
in favour of the Trustee dated November 27, 1996 in the principal amount of
U.S.$500,000,000 as amended, modified, replaced or restated from time to time;
(d) "Indenture" means the indenture as amended, modified, replaced or restated
from time to time made on November 27, 1996 between the Debtor and Statia
(collectively, the "Issuers"), certain subsidiaries of the Issuers, as
guarantors, and the Trustee, as trustee, pursuant to which the Issuers are
issuing the Notes;
(e) "Notes" means 11 3/4% first mortgage notes of the Issuers due 2003, in the
aggregate principal amount of U.S.$135,000,000 and the exchange notes of the
Issuers to be issued from time to time, in each case, pursuant to the terms of
the Indenture;
<PAGE>
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(f) "Noteholders" means the holders of the Notes;
(g) "Secured Obligations", means the obligations, indebtedness and liabilities
of the Debtor to the Trustee, the Noteholders and the holders of Additional
Secured Indebtedness, if any, under or in connection with the Indenture, the
Notes (including, without limitation, the obligations of Debtor to pay principal
of, premium, if any, and interest on the Notes when due and payable) and the
Additional Secured Indebtedness and all other charges, fees, premiums,
indemnities and other amounts due or to become due to the Trustee, the
Noteholders and the holders of Additional Secured Indebtedness, if any, in
connection with the Indenture, the Notes and the Debenture whether present or
future, direct or indirect, absolute or contingent, matured or not, extended or
renewed, wheresoever and howsoever incurred and any ultimate unpaid balance
thereof and whether the same is from time to time thereafter reduced, increased
or entirely extinguished and thereafter incurred again and whether Debtor be
bound alone or with another or others and whether as principal or as surety;
(h) "Statia" means Statia Terminals International N.V., and its successors and
assigns in such capacity, a Netherlands Antilles corporation; and
(i) "Trustee" means Marine Midland Bank and its successors and assigns in its
capacity as trustee for and on behalf of itself and for the benefit of the
Noteholders and the holders of Additional Secured Indebtedness under the
Indenture and the Additional Lender Intercreditor Agreement, if any.
2. Collateral Security. The Debenture is hereby lodged and deposited with and
delivered, pledged, hypothecated, assigned and transferred to the Trustee to be
held by it as general and continuing collateral security for the payment and
fulfilment of the Secured Obligations. Upon repayment of all Secured Obligations
and upon the request of the Debtor, the Trustee shall execute a release and
discharge of the Debenture, in accordance with the provisions of the Indenture.
3. Demand. The Trustee may, but shall not be obligated to, in addition to any
other action permitted by law, demand payment under the Debenture upon the
happening of an "Event of Default" as defined in the Indenture.
4. Remedies. Upon the occurrence of an Event of Default, the Trustee or its
nominee shall be entitled to sell at public or private sale or otherwise realize
upon the security of the Debenture and to otherwise exercise and enforce all the
rights and remedies of the Trustee under law and the terms of the Indenture, the
Notes and the Debenture free from any control of the Debtor; provided, however,
that the Trustee shall not be bound to deal with the Debenture in any way or to
exercise any rights or remedies as aforesaid and shall not be liable for any
<PAGE>
-3-
loss which may be occasioned by any failure to do so. If the foregoing is not
sufficient to satisfy all of the Secured Obligations, the Debtor shall continue
to be liable for any Secured Obligations remaining outstanding and the Trustee
shall be entitled to pursue full payment thereof.
5. Dealings by Trustee, etc. The Trustee may grant extensions of time and other
indulgences, take and give up securities, accept compositions, grant releases
and discharges and otherwise deal with the Debtor and all other parties and
securities as the Trustee may see fit, all without prejudice to the debts,
liabilities or obligations of the Debtor to the Trustee, the Noteholders and the
holders of Additional Secured Indebtedness or to the rights of the Trustee in
respect of the Debenture and the security hereby constituted.
6. Additional Security. The Debenture and the security hereby constituted are in
addition to and not in substitution for any other security now or hereafter held
by the Trustee and shall not operate as a merger of any simple contract debt or
suspend the fulfilment of, or affect the rights, remedies or powers of the
Trustee, the Noteholders and the holders of Additional Secured Indebtedness in
respect of any present or future debts, liabilities or obligations of the Debtor
to the Trustee, the Noteholders and the holders of Additional Secured
Indebtedness or any securities now or hereafter held by the Trustee or the
Noteholders or any of them for the payment or fulfilment thereof.
7. Payment of Interest and Principal. Payment by the Debtor to the Trustee of
interest for any period in respect of the Secured Obligations in accordance with
the provisions of the Indenture and the Notes shall be deemed payment in full
satisfaction of the interest payment for the same period provided for under the
"Acknowledgment and Promise to Pay" provision of the Debenture. Payment by the
Debtor to the Trustee of all other amounts in respect of the Secured Obligations
shall be deemed payment in full satisfaction of the principal payment provided
for under the "Acknowledgment and Promise to Pay" provision of the Debenture.
8. Headings. The headings in this agreement shall not affect the interpretation
of this agreement.
9. Governing Law and Submission to Jurisdiction. This agreement and the
Debenture shall be governed by and construed in accordance with the laws of the
Province of Nova Scotia and of Canada applicable therein. The Debtor irrevocably
submits to the non-exclusive jurisdiction of the courts of the Province of Nova
Scotia and of Canada in any action or proceeding arising out of or relating to
this agreement or the Debenture and irrevocably agrees that all such actions and
proceedings may be heard and determined in such courts, and irrevocably waives,
to the fullest extent possible, the defence of an inconvenient forum. A judgment
or order in any such action or proceeding may be enforced in any jurisdiction in
any manner provided by law. For greater certainty, the Trustee may serve legal
process in any
<PAGE>
-4-
manner permitted by law and may bring an action or proceeding
against the Debtor or the property or assets of the Debtor in the courts of any
jurisdiction.
10. Severability. If any provisions of this agreement, as amended from time to
time, shall be deemed invalid or void, in whole or in part, by any court of
competent jurisdiction, the remaining terms and provisions of this agreement
shall remain in full force and effect.
11. Binding Effect and Enurement. This agreement shall be binding upon the
Debtor and its respective successors and permitted assigns and shall enure to
the benefit of the and its successors and assigns, as permitted in accordance
with the provisions of the Trust Indenture.
12. Counterparts and Multiple Copies Executed. This agreement may be executed in
any number of counterparts, each of which when so executed will be deemed to be
an original and all of which, when taken together, will constitute one and the
same agreement. Each original copy of this agreement may be executed by any
number of different individuals on behalf of the Debtor and the Trustee, and
each such original copy shall constitute one and the same agreement.
IN WITNESS WHEREOF the undersigned have executed this agreement on
November 27, 1996 at ____ a.m. (Halifax, Nova Scotia time).
STATIA TERMINALS CANADA,
INCORPORATED, as Debtor
By: /s/ David B. Pittaway
---------------------------------------
Name: David B. Pittaway
Title: President
MARINE MIDLAND BANK,
as Trustee
By: /s/ Eileen M. Hughes
---------------------------------------
Name: Eileen M. Hughes
Title: Assistant Vice President
<PAGE>
================================================================================
SECURITIES PLEDGE AGREEMENT
Made on November 27, 1996
Between
STATIA TERMINALS CANADA INCORPORATED
as Pledgor
and
MARINE MIDLAND BANK
as Trustee
================================================================================
MCMILLAN BINCH
----------
BARRISTERS & SOLICITORS
<PAGE>
TABLE OF CONTENTS
RECITALS................................................................... 1
SECTION 1 -- DEFINITIONS................................................... 2
1.1 ............................................................... 2
(1) Additional Shares........................................ 2
(2) Capital Stock............................................ 2
(3) Distributions............................................ 2
(4) Documents................................................ 2
(5) Event of Default......................................... 2
(6) Intangibles.............................................. 2
(7) Lien..................................................... 2
(8) Pledged Collateral....................................... 3
(9) Pledged Shares........................................... 3
(10) Proceeds ................................................ 3
(11) security interest ....................................... 3
(12) Secured Obligations...................................... 3
(13) Termination Date ........................................ 3
(14) Trustee ................................................. 3
SECTION 2 -- PLEDGE........................................................ 3
2.1 ............................................................... 3
SECTION 3 -- SECURED OBLIGATIONS........................................... 4
3.1 ............................................................... 4
SECTION 4 -- NO RELEASE.................................................... 4
4.1 ............................................................... 4
SECTION 5 -- DELIVERY OF PLEDGED COLLATERAL................................ 5
5.1 ............................................................... 5
5.2 ............................................................... 5
SECTION 6 -- SUPPLEMENTS, FURTHER ASSURANCES............................... 5
6.1 ............................................................... 5
6.2 ............................................................... 5
SECTION 7 -- REPRESENTATIONS, WARRANTIES AND COVENANTS..................... 6
7.1 ............................................................... 6
(1) No Liens................................................. 6
(2) Authorization, Enforceability............................ 6
(3) No Consents, etc......................................... 6
(4) Due Authorization and Issuance........................... 6
(5) Chief Executive Office................................... 6
(i)
<PAGE>
(6) Delivery of Pledged Collateral; Filings.................. 7
(7) Pledged Collateral....................................... 7
(8) No Violations, etc....................................... 7
(9) Ownership of Pledged Collateral.......................... 7
(10) No Options, Warrants, etc................................ 7
(11) Preservation of Title.................................... 7
7.2 ............................................................... 7
SECTION 8 -- VOTING RIGHTS; DISTRIBUTIONS; ETC............................. 8
8.1 ............................................................... 8
8.2 ............................................................... 8
8.3 ............................................................... 9
8.4 ............................................................... 9
8.5 ............................................................... 9
SECTION 9 -- TRANSFERS AND OTHER LIENS; ADDITIONAL SHARES.................. 10
9.1 ............................................................... 10
9.2 ............................................................... 10
SECTION 10 -- REASONABLE CARE.............................................. 10
10.1 ............................................................... 10
SECTION 11 -- REMEDIES UPON DEFAULT; DECISIONS RELATING TO EXERCISE
OF REMEDIES.......................................................... 10
11.1 ............................................................... 10
11.2 ............................................................... 11
11.3 ............................................................... 11
11.4 ............................................................... 12
11.5 ............................................................... 12
SECTION 12 -- APPLICATION OF PROCEEDS...................................... 12
12.1 ............................................................... 12
SECTION 13 -- EXPENSES..................................................... 12
13.1 ............................................................... 12
SECTION 14 -- NO WAIVER; CUMULATIVE REMEDIES............................... 12
14.1 ............................................................... 12
14.2 ............................................................... 13
SECTION 15 -- TRUSTEE...................................................... 13
15.1 ............................................................... 13
SECTION 16 -- TRUSTEE MAY PERFORM; TRUSTEE APPOINTED ATTORNEY-IN-
FACT................................................................. 13
(ii)
<PAGE>
16.1 ............................................................... 13
SECTION 17 -- REINSTATEMENT................................................ 14
17.1 ............................................................... 14
SECTION 18 -- MISCELLANEOUS................................................ 14
18.1 Notices........................................................ 14
18.2 Continuing Lien; Assignment.................................... 14
18.3 Governing Law and Submission to Jurisdiction................... 14
18.4 Severability of Provisions..................................... 15
18.5 Execution in Counterparts...................................... 15
18.6 Headings....................................................... 15
18.7 Obligations Absolute........................................... 15
18.8 Limitation on Interest Payable................................. 16
(iii)
<PAGE>
SECURITIES PLEDGE AGREEMENT
This Agreement is made on this 27th day of November, 1996, between
Statia Terminals Canada, Incorporated
as Pledgor (the "Pledgor")
and
Marine Midland Bank
as Trustee
RECITALS
A. Pledgor and Statia Terminals International N.V., as issuers, certain
subsidiaries of the issuers and Trustee are contemporaneously with the execution
and delivery of this Agreement, entering into a certain indenture (as amended,
amended and restated, supplemented or otherwise modified from time to time, the
"Indenture"), dated November 27, 1996, pursuant to which Pledgor is issuing its
113/4% first mortgage notes due 2003 (the "First Mortgage Notes"), in the
aggregate principal amount of U.S.$135,000,000. It is contemplated that Pledgor
may, after the date hereof, (i) issue exchange notes pursuant to the Indenture
(the "Exchange Notes"; together with the First Mortgage Notes, the "Notes") and
(ii) incur certain additional indebtedness ("Additional Secured Indebtedness" as
defined pursuant to the Indenture) which shall be equally and rateably secured
by the Pledged Collateral (as hereinafter defined).
B. Pledgor is the owner of the Pledged Collateral (as hereinafter defined).
C. This Agreement is given by Pledgor in favour of Trustee for its benefit and
the benefit of the holders of the Notes and the holders of the Additional
Secured Indebtedness (collectively, the "Secured Parties") to secure the payment
and performance of the Secured Obligations (as hereinafter defined).
NOW, THEREFORE, in consideration of the foregoing premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Pledgor and Trustee hereby agree as follows:
<PAGE>
- 2 -
SECTION 1 -- DEFINITIONS
1.1 Capitalized terms used herein but not otherwise defined shall have the
meanings assigned to such terms in the Indenture. Such definitions shall be
applicable equally to the singular and plural forms of the terms defined. The
following terms shall have the following meanings.
(1) Additional Shares shall mean, collectively, (i) all additional shares of
Capital Stock of any issuer of the Pledged Shares from time to time acquired by
Pledgor in any manner and (ii) all issued and outstanding shares of Capital
Stock of each Person which, after the date of this Agreement, is or becomes, as
a result of any occurrence, a Restricted Subsidiary of Pledgor (which, in each
case, are and shall remain at all times until this Agreement terminates,
certificated shares) including the certificates representing such additional
shares and any interest of Pledgor in the entries on the books of any financial
intermediary pertaining to such additional shares.
(2) Capital Stock of any Person means any and all shares, participations or
other equivalents of or interest in (however designated) the equity (including,
without limitation, common stock, preferred stock and partnership, membership or
other such interests) of such Person.
(3) Distributions shall mean all dividends, cash, options, warrants, rights,
instruments, distributions, partnership distributions, returns of capital,
income, profits and other property, interests or proceeds from time to time
received, receivable or otherwise distributed to Pledgor in respect of or in
exchange for any or all of the Pledged Shares.
(4) Documents shall mean, collectively, all documents relating to any of the
Pledged Collateral and shall also include, without limitation, any and all
books, records, ledgers, printouts, computer recording media, data files, tapes,
file materials and other papers containing information relating to any of the
Pledged Collateral.
(5) Event of Default means an "Event of Default" as defined in the Indenture.
(6) Intangibles shall mean all personal property relating to any of the Pledged
Collateral, including choses in action, that is not goods, chattel paper,
documents of title, instruments, money or securities.
(7) Lien means, with respect to any asset or property, any mortgage, deed of
trust, debenture, fiduciary transfer, lien (statutory or other), pledge, lease,
easement, restriction, covenant, charge, security interest or other encumbrance
of any kind or nature in respect of such asset or property, whether or not
filed, recorded or otherwise perfected under applicable law (including without
limitation any conditional sale or other title retention agreement, and any
lease in the nature thereof, any option or other agreement to sell, and any
filing of, or agreement to give, any financing statement under the Uniform
Commercial Code (or equivalent statutes of any jurisdiction)).
<PAGE>
- 3 -
(8) Pledged Collateral shall have the meaning assigned to such term in Section 2
of this Agreement.
(9) Pledged Shares shall mean, collectively, (i) all issued and outstanding
shares of Capital Stock of each Person described in Schedule A hereto (which are
and shall remain at all times until this Agreement terminates, certificated
shares), including the certificates representing the Pledged Shares and any
interest of Pledgor in the entries on the books of any financial intermediary
pertaining to the Pledged Shares and (ii) as of the date of acquisition thereof
by Pledgor, all Additional Shares.
(10) Proceeds shall include, without limitation, any and all (i) proceeds of any
insurance (except payments made to a Person which is not a party to this
Agreement), indemnity, warranty or guarantee payable to Trustee or to Pledgor
from time to time with respect to any of the Pledged Collateral, (ii) payments
(in any form whatsoever) made or due and payable to Pledgor from time to time in
connection with any requisition, confiscation, condemnation, seizure or
forfeiture of all or any part of the Pledged Collateral by any governmental
authority (or any Person acting under color of a governmental authority), (iii)
instruments representing obligations to pay amounts in respect of Pledged
Shares, (iv) products of the Pledged Collateral, and (v) other amounts from time
to time paid or payable under or in connection with any of the Pledged
Collateral.
(11) security interest means an interest in personal property that secures
payment or performance of an obligation, and includes, whether or not the
interest secures payment or performance of an obligation, the interest of a
transferee of an account or chattel paper.
(12) Secured Obligations shall have the meaning assigned to such term in Section
3 of this Agreement.
(13) Termination Date means the date on which Pledgor shall have complied with
all of the conditions precedent set forth in Article Eight of the Indenture for
satisfaction and discharge of the Indenture.
(14) Trustee means Marine Midland Bank and its successors and assigns in its
capacity as trustee for and on behalf of itself and for the benefit of the
Secured Parties.
SECTION 2 -- PLEDGE
2.1 As collateral security for the payment and performance when due of all the
Secured Obligations, Pledgor hereby pledges, assigns, hypothecates, mortgages,
delivers, deposits and transfers to Trustee for its benefit and the benefit of
the Secured Parties, and creates a continuing first priority security interest
in, all of the right, title and interest of Pledgor in, to and under the
following property, whether now existing or hereafter acquired (collectively,
the "Pledged Collateral"):
<PAGE>
- 4 -
(1) all Pledged Shares;
(2) all Additional Shares;
(3) all Distributions;
(4) all Intangibles;
(5) all Documents; and
(6) all Proceeds of any of the foregoing.
SECTION 3 -- SECURED OBLIGATIONS
3.1 This Agreement secures, and the Pledged Collateral is collateral security
for, the payment and performance in full when due, whether at stated maturity,
by acceleration or otherwise (including, without limitation, the payment of
interest and other amounts which would accrue and become due but for Pledgor or
any property or assets of Pledgor becoming the subject of a bankruptcy or
similar proceeding under the Bankruptcy and Insolvency Act (Canada) or the
Companies Creditors' Arrangement Act (Canada) or any other applicable insolvency
or bankruptcy legislation, or Pledgor becoming a party to any bankruptcy,
insolvency, moratorium or similar proceeding which gives rise to a stay which
has the effect of preventing Trustee from enforcing its rights hereunder), of
(i) all Obligations of Pledgor now existing or hereafter arising under or in
respect of the Indenture and the Notes (including, without limitation, the
obligation of Pledgor to pay principal of, premium, if any, and interest on the
Notes when due and payable) and all other charges, fees, expenses, commissions,
reimbursements, premiums, indemnities and all other amounts due or to become
under or in connection with the Indenture, the Notes and the Additional Secured
Indebtedness and (ii) without duplication of the amounts described in clause
(i), all obligations, indebtedness and liabilities of Pledgor now existing or
hereafter arising under or in respect of this Agreement, including, without
limitation, with respect to all charges, fees, expenses, commissions,
reimbursements, premiums, indemnities and other payments related to or in
respect of the obligations contained in this Agreement (the obligations
described in clauses (i) and (ii) of this Section 3, collectively, the "Secured
Obligations").
SECTION 4 -- NO RELEASE
4.1 Nothing set forth in this Agreement shall relieve Pledgor from the
performance of any term, covenant, condition or agreement on Pledgor's part to
be performed or observed under or in respect of any of the Pledged Collateral or
from any liability to any Person under or in respect of any of the Pledged
Collateral or shall impose any obligation on Trustee or any Secured Party to
perform or observe any such term, covenant, condition or agreement on Pledgor's
part to be so performed or observed or shall impose any liability on Trustee or
any Secured Party for any act or omission on the part of Pledgor relating
thereto or for any breach
<PAGE>
- 5 -
of any representation or warranty on the part of Pledgor contained in this
Agreement, or under or in respect of the Pledged Collateral or made in
connection herewith or therewith.
SECTION 5 -- DELIVERY OF PLEDGED COLLATERAL
5.1 All certificates, agreements or instruments representing or evidencing the
Pledged Collateral, to the extent not previously delivered to Trustee, shall
immediately upon receipt thereof by Pledgor be delivered to and held by or on
behalf of Trustee pursuant hereto. All Pledged Collateral shall be in suitable
form for transfer by delivery or shall be accompanied by duly executed powers of
attorney endorsed in blank, all in form and substance satisfactory to Trustee.
Trustee shall have the right, at any time upon the occurrence and during the
continuance of an Event of Default and without notice to Pledgor, to endorse,
assign or otherwise transfer to or to obtain registration in the name of Trustee
or any of its nominees any or all of the Pledged Collateral. In addition,
Trustee shall have the right at any time to exchange certificates representing
or evidencing Pledged Collateral for certificates of smaller or larger
denominations. If requested by Trustee at any time, Pledgor will execute and
deliver to Trustee a stock transfer direction to the transfer agent of the
Pledged Collateral, if applicable; provided that Trustee will only exercise such
stock transfer direction upon the occurrence of and during the continuance of an
Event of Default.
5.2 If the issuer of Pledged Shares is incorporated in a jurisdiction which does
not permit the use of certificates to evidence equity ownership, then Pledgor
shall, to the extent permitted by applicable law, record such pledge on the
stock register of the issuer, execute any customary stock pledge forms or other
documents necessary or appropriate to complete the pledge and give Trustee the
right to transfer such Pledged Shares under the terms hereof and provide to
Trustee an opinion of counsel, in form and substance reasonably satisfactory to
Trustee, confirming such pledge.
SECTION 6 -- SUPPLEMENTS, FURTHER ASSURANCES
6.1 Pledgor agrees that at any time and from time to time, at the sole cost and
expense of Pledgor, Pledgor shall promptly execute and deliver all further
instruments and documents, and take all further action that may be necessary or
that Trustee may reasonably request, in order to protect the pledge and Lien
granted or purported to be granted hereby or to enable Trustee to exercise and
enforce its rights and remedies hereunder with respect to any Pledged
Collateral.
6.2 Pledgor shall, upon obtaining any Pledged Shares of any Person, promptly
(and in any event within five Business Days) deliver to Trustee a pledge
amendment, duly executed by Pledgor, in substantially the form of Exhibit I
hereto (each, a "Pledge Amendment"), in respect of the additional Pledged Shares
which are to be pledged pursuant to this Agreement, and confirming the
attachment of the Lien hereby created on and in respect of such additional
shares. Pledgor hereby authorizes Trustee to attach each Pledge Amendment to
this Agreement and agrees that all Pledged Shares listed on any Pledge Amendment
delivered to Trustee shall for all purposes hereunder be considered Pledged
Collateral from and after the
<PAGE>
- 6 -
date of such Pledge Amendment. All certificates, instruments or other documents
evidencing or representing any additional Pledged Shares hereinafter acquired by
Pledgor shall forthwith after issuance be delivered to and remain in the custody
of Trustee or its nominee.
SECTION 7 -- REPRESENTATIONS, WARRANTIES AND COVENANTS
7.1 Pledgor represents, warrants and covenants as follows:
(1) No Liens. Pledgor is, and at the time of any delivery of any Pledged
Collateral to Trustee pursuant to Section 5 of this Agreement will be, the sole
holder of record and the sole beneficial owner of the Pledged Collateral. All
Pledged Collateral is on the date hereof, and will be, so owned by Pledgor free
and clear of any Lien except for the Lien granted to Trustee pursuant to this
Agreement.
(2) Authorization, Enforceability. Pledgor has the requisite corporate power,
authority and legal right to pledge, assign, hypothecate, mortgage, transfer,
deliver and deposit all the Pledged Collateral pursuant to this Agreement, and
this Agreement constitutes the legal, valid and binding obligation of Pledgor,
enforceable against Pledgor in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium and similar laws relating to or affecting creditors' rights generally
or by general equitable principles (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
(3) No Consents, etc. No consent of any party (including, without limitation,
stockholders or creditors of Pledgor) and no consent, authorization, approval,
or other action by, and no notice to or filing with, any governmental authority
or regulatory body or other Person is required (i) for the pledge by Pledgor of
the Pledged Collateral pursuant to this Agreement or for the execution, delivery
or performance of this Agreement by Pledgor, or (ii) for the exercise by Trustee
of the voting or other rights provided for in this Agreement, or (iii) for the
exercise by Trustee of the remedies in respect of the Pledged Collateral
pursuant to this Agreement, except for consents, authorizations, approvals and
other filings and notices as may be required in connection with any disposition
of the Pledged Collateral by applicable laws affecting the offering and sale of
securities generally and the resolution of the board of directors of Pledgor
approving the transfer of the Pledged Collateral executed on the date hereof and
delivered to Trustee.
(4) Due Authorization and Issuance. All of the Pledged Shares have been, and to
the extent hereafter issued will be upon such issuance, duly authorized and
validly issued and fully paid and nonassessable.
(5) Chief Executive Office. Pledgor's chief place of business is located at 3817
Port Malcolm Rd., Port Hawkesbury, Richmond County, Nova Scotia. Pledgor shall
not move its chief place of business except to such new location as Pledgor may
establish in accordance with the last sentence of this subsection 7.1(5).
Pledgor shall not establish a new location for its chief place of business nor
shall it change its name until it shall have given Trustee not less
<PAGE>
- 7 -
than forty-five (45) days' prior written notice of its intention so to do,
clearly describing such new location or name and providing such other
information in connection therewith as Trustee or any Secured Party may request;
and with respect to such new location or name, Pledgor shall have taken all
action necessary or required by any and all existing or future applicable laws
or as Trustee shall from time to time reasonably request to maintain the
validity of Trustee's interests in the Pledged Collateral intended to be granted
hereby.
(6) Delivery of Pledged Collateral; Filings. Pledgor has delivered to Trustee
all certificates representing the Pledged Shares and has caused to be made all
filings required under applicable law (which filings are set forth in Schedule B
annexed hereto) in connection with the Lien created by this Agreement, and such
delivery, filing and pledge of the Pledged Collateral pursuant to this Agreement
creates a valid and first priority Lien in the Pledged Collateral securing the
payment of the Secured Obligations pursuant to the laws in effect in each
applicable jurisdiction.
(7) Pledged Collateral. All information set forth herein, including the
Schedules annexed hereto, and all information contained in any documents,
schedules and lists heretofore delivered to any Secured Party in connection with
this Agreement, in each case, relating to the Pledged Collateral is accurate and
complete in all respects.
(8) No Violations, etc. The pledge of the Pledged Collateral pursuant to this
Agreement does not violate any laws of any of the applicable jurisdictions that
this agreement is or may be subject to, including, without limitation,
Regulation G, T, U or X of the Federal Reserve Board.
(9) Ownership of Pledged Collateral. Except as otherwise permitted by the
Indenture, Pledgor at all times will be the sole beneficial owner of the Pledged
Collateral.
(10) No Options, Warrants, etc. There are no options, warrants, calls, rights,
commitments or agreements of any character to which Pledgor is a party or by
which it is bound obligating Pledgor to issue, deliver or sell or cause to be
issued, delivered or sold, additional Pledged Shares or obligating Pledgor to
grant, extend or enter into any such option, warrant, call, right, commitment or
agreement. There are no voting trusts or other agreements or understandings to
which Pledgor is a party with respect to the voting of the capital stock of any
issuer of the Pledged Shares.
(11) Preservation of Title. Pledgor has and will defend title to the Pledged
Collateral and the Liens of Trustee thereon against the claim of any Person and
will maintain and preserve such title and Liens until the Termination Date.
7.2 The representations and warranties set forth in Section 7.1 shall survive
the execution and delivery of this Agreement.
<PAGE>
- 8 -
SECTION 8 -- VOTING RIGHTS; DISTRIBUTIONS; ETC.
8.1 So long as no Event of Default shall have occurred and be continuing:
(1) Pledgor shall be entitled to exercise any and all voting and other
consensual rights pertaining to the Pledged Collateral or any part
thereof for any purpose not inconsistent with the terms or purpose
of this Agreement and the Indenture; provided, however, that Pledgor
shall not in any event exercise such rights in any manner which may
have an adverse effect on the value of the Pledged Collateral or the
security intended to be provided by this Agreement or have the
effect of imposing any restriction on the transferability or
marketability of the Pledged Collateral.
(2) Subject to the terms of the Indenture, Pledgor shall be entitled to
receive and retain, and to utilize free and clear of the Lien of
this Agreement, any and all Distributions, but only if and to the
extent made in accordance with the provisions of the Indenture;
provided, however, that any and all such Distributions consisting of
rights or interests in the form of securities shall be, and shall be
forthwith delivered to Trustee to hold, as Pledged Collateral and
shall, if received by Pledgor, be received in trust for the benefit
of Trustee, be segregated from the other property or funds of
Pledgor, and be forthwith delivered to Trustee as Pledged Collateral
in the same form as so received (with any necessary endorsement).
(3) Trustee shall be deemed without further action or formality to have
granted to Pledgor all necessary consents relating to voting rights
and shall, if necessary, upon written request of Pledgor and at
Pledgor's sole cost and expense, from time to time execute and
deliver (or cause to be executed and delivered) to Pledgor all such
instruments as Pledgor may reasonably request in order to permit
Pledgor to exercise the voting and other rights which it is entitled
to exercise pursuant to subsection 8.1(1) hereof and to receive the
Distributions which it is authorized to receive and retain pursuant
to subsection 8.1(2) hereof.
8.2 Upon the occurrence and during the continuance of an Event of Default:
(1) All rights of Pledgor to exercise the voting and other consensual
rights it would otherwise be entitled to exercise pursuant to
subsection 8.1(1) hereof without any action or the giving of any
notice shall cease, and all such rights shall thereupon become
vested in Trustee, which shall thereupon have the sole right to
exercise such voting and other consensual rights as though it were
the outright owner thereof.
<PAGE>
- 9 -
(2) Without limitation to the foregoing, Trustee may exercise any and
all rights of conversion, exchange, subscription or any other
rights, privileges or options pertaining to the Pledged Collateral
as if it were the absolute owner thereof including, without
limitation, the right to exchange at its discretion such Pledged
Collateral upon the merger, consolidation, reorganization,
recapitalization or other readjustment of any Person or upon the
exercise by any Person or Trustee of any right, privilege or option
pertaining to such Pledged Collateral, and in connection therewith,
to deposit and deliver such Pledged Collateral with any committee,
depositary, transfer agent, registrar or other designated agency
upon such terms and conditions as it may determine, all without
liability except to account for property actually received by it.
(3) All rights of Pledgor to receive Distributions which it would
otherwise be authorized to receive and retain pursuant to subsection
8.1(2) hereof shall cease and all such rights shall thereupon become
vested in Trustee, which shall thereupon have the sole right to
receive and hold as Pledged Collateral such Distributions.
8.3 Pledgor hereby revokes all previous proxies with regard to the Pledged
Collateral and grants a proxy to Trustee to attend and vote at any and all
meetings of the shareholders of the Subsidiaries of Pledgor that issued the
Pledged Collateral, and any adjournments thereof, held on or after the date
hereof and prior to the Termination Date and to execute any and all written
consents of shareholders in connection therewith, with the same effect as if
Pledgor had personally attended the meetings or had personally voted its shares
or had personally signed the written consents. Pledgor hereby authorizes Trustee
to substitute another Person as the proxyholder and hereby authorizes and
directs such proxyholder to file this proxy and any substitution instrument with
the secretary of the appropriate Subsidiary. This proxy is coupled with an
interest and is irrevocable until the Termination Date. The Trustee shall not
exercise its rights under the proxy granted pursuant to this subsection 8.3
unless an Event of Default shall have occurred and be continuing.
8.4 Pledgor shall, at Pledgor's sole cost and expense, from time to time execute
and deliver to Trustee additional instruments as Trustee may request in order to
permit Trustee to exercise the voting and other rights which it may be entitled
to exercise pursuant to subsections 8.2(1) and 8.2(2) hereof and to receive all
Distributions which it may be entitled to receive under Subsection 8.2(3)
hereof.
8.5 All Distributions which are received by Pledgor contrary to the provisions
of subsection 8.2(3) hereof shall be received in trust for the benefit of
Trustee, shall be segregated from other funds of Pledgor and shall immediately
be paid over to Trustee as Pledged Collateral in the same form as so received
(with any necessary endorsement).
<PAGE>
- 10 -
SECTION 9 -- TRANSFERS AND OTHER LIENS; ADDITIONAL SHARES
9.1 Pledgor shall not (i) sell, convey, assign or otherwise dispose of, or grant
any option, right or warrant with respect to, any of the Pledged Collateral
except as permitted by the Indenture, (ii) create or permit to exist any Lien
upon or with respect to any Pledged Collateral other than the Lien and security
interest granted to Trustee under this Agreement, or (iii) permit any issuer of
the Pledged Shares to merge, consolidate or change its legal form, unless all of
the outstanding capital stock or partnership interests of the surviving or
resulting corporation or partnership as the case may be is, upon such merger or
consolidation, pledged hereunder and no cash, securities or other property is
distributed in respect of the outstanding shares or partnership interests of any
other constituent corporation or partnership.
9.2 Pledgor shall (i) cause each issuer of the Pledged Shares not to issue any
stock or other securities in addition to or in substitution for the Pledged
Shares issued by such issuer, except to Pledgor and (ii) pledge hereunder,
immediately upon its acquisition (directly or indirectly) thereof, any and all
additional shares of capital stock or other equity securities of the issuer of
the Pledged Shares which are required to be pledged hereunder.
SECTION 10 -- REASONABLE CARE
10.1 Trustee shall be deemed to have exercised reasonable care in the custody
and preservation of the Pledged Collateral in its possession if such Pledged
Collateral is accorded treatment substantially equivalent to that which Trustee,
in its individual capacity, accords its own property consisting of similar
instruments or interests, it being understood that neither Trustee nor any of
the Secured Parties shall have responsibility for (i) ascertaining or taking
action with respect to calls, conversions, exchanges, maturities, tenders or
other matters relating to any Pledged Collateral, whether or not Trustee or any
other Secured Party has or is deemed to have knowledge of such matters, or (ii)
taking any necessary steps to preserve rights against any Person with respect to
any Pledged Collateral.
SECTION 11 -- REMEDIES UPON DEFAULT; DECISIONS RELATING TO EXERCISE OF REMEDIES
11.1 If any Event of Default shall have occurred and be continuing, Trustee
shall have the right, in addition to other rights and remedies provided for
herein or otherwise available to it, to be exercised in accordance with the
terms of, and at the times, if any, specified in the Indenture, subject to any
restrictions contained in the applicable Intercreditor Agreement, (i) to retain
and apply the Distributions to the Secured Obligations as provided in Section 12
hereof, and (ii) to exercise all the rights and remedies of a secured party on
default under all applicable laws in effect at that time, and Trustee may also
in its sole discretion, without notice except as specified below, sell the
Pledged Collateral or any part thereof (including, without limitation, any
partial interest in the Pledged Shares, to the extent permitted by applicable
law) in one or more parcels at public or private sale, at any exchange, broker's
board or at any of Trustee's offices or elsewhere, for cash, on credit or for
future delivery, and at such price or prices and upon such other terms as
Trustee may deem commercially reasonable, irrespective of the
<PAGE>
- 11 -
impact of any such sales on the market price of the Pledged Collateral.
Trustee or any other Secured Party may be the purchaser of any or all of the
Pledged Collateral at any such sale and shall be entitled, for the purpose of
bidding and making settlement or payment of the purchase price for all or any
portion of the Pledged Collateral sold at such sale, to use and apply any of
the Secured Obligations owed to such Person as a credit on account of the
purchase price of any Pledged Collateral payable by such Person at such sale.
Each purchaser at any such sale shall acquire the property sold absolutely
free from any claim or right on the part of Pledgor, and Pledgor hereby
waives, to the fullest extent permitted by law, all rights of redemption,
stay and/or appraisal which it now has or may at any time in the future have
under any rule of law or statute now existing or hereafter enacted. Pledgor
acknowledges and agrees that, to the extent notice of sale shall be required by
law, ten days notice to Pledgor of the time and place of any public sale or the
time after which any private sale or other intended disposition is to take place
shall constitute reasonable notification of such matters. No notification need
be given to Pledgor if it has signed, after the occurrence of an Event of
Default, a statement renouncing or modifying any right to notification of sale
or other intended disposition. Trustee shall not be obligated to make any sale
of Pledged Collateral regardless of notice of sale having been given. Trustee
may adjourn any public or private sale from time to time by announcement at the
time and place fixed therefor, and such sale may, without further notice, be
made at the time and place to which it was so adjourned. Pledgor hereby waives,
to the fullest extent permitted by law, any claims against Trustee arising by
reason of the fact that the price at which any Pledged Collateral may have been
sold at such a private sale was less than the price which might have been
obtained at a public sale, even if Trustee accepts the first offer received and
does not offer such Pledged Collateral to more than one offeree.
11.2 Pledgor acknowledges that any such private sales may be at prices and on
terms less favourable to Trustee than those obtainable through a public sale
without such restrictions (including, without limitation, a public offering made
pursuant to a registration statement under the Securities Act of 1933 (15 USCS @
77a (1996)), as amended from time to time or a prospectus qualifying the Pledged
Collateral for distribution in the Province of Nova Scotia and/or the other
provinces of Canada), and, notwithstanding such circumstances, agrees that any
such private sale shall be deemed to have been made in a commercially reasonable
manner and that Trustee shall have no obligation to engage in public sales and
no obligation to delay the sale of any Pledged Collateral for the period of time
necessary to permit the issuer thereof to qualify a prospectus under applicable
Canadian securities laws or register it for a form of public sale requiring
registration under any other applicable securities laws, even if such issuer
would agree to do so.
11.3 If Trustee determines to exercise its right to sell any or all of the
Pledged Collateral, upon written request, Pledgor shall from time to time
furnish to Trustee all such information as Trustee may request in order to
determine the number of securities included in the Pledged Collateral which may
be sold by Trustee pursuant to prospectus and registration exemptions under
applicable Canadian securities laws or as exempt transactions under the
Securities Act of 1933 and the rules of the Securities and Exchange Commission
thereunder, as the same are from time to time in effect.
<PAGE>
- 12 -
11.4 Pledgor recognizes that, by reason of certain prohibitions contained in
laws, rules, regulations or orders of any foreign governmental authority,
Trustee may be compelled, with respect to any sale of all or any part of the
Pledged Collateral, to limit purchasers to those who meet the requirements of
such foreign governmental authority. Pledgor acknowledges that any such sales
may be at prices and on terms less favourable to Trustee than those obtainable
through a public sale without such restrictions, and, notwithstanding such
circumstances, agrees that any such restricted sale shall be deemed to have been
made in a commercially reasonable manner and that, except as may be required by
applicable law, Trustee shall have no obligation to engage in public sales.
11.5 In addition to any of the other rights and remedies hereunder, Trustee
shall have the right to institute a proceeding seeking specific performance in
connection with any of the agreements or obligations hereunder.
SECTION 12 -- APPLICATION OF PROCEEDS
12.1 The proceeds received by Trustee in respect of any sale of, collection from
or other realization upon all or any part of the Pledged Collateral pursuant to
the exercise by Trustee of its remedies as a secured creditor as provided in
Section 11 hereof shall be applied, together with any other sums then held by
Trustee pursuant to this Agreement, promptly by Trustee in the manner set forth
in the Indenture and/or the applicable Intercreditor Agreement.
SECTION 13 -- EXPENSES
13.1 Pledgor will upon demand pay to Trustee the amount of any and all expenses,
including the fees and expenses of its counsel and the fees and expenses of any
experts and agents which Trustee may incur in connection with (i) the collection
of the Secured Obligations, (ii) the enforcement and administration of this
Agreement, (iii) the custody or preservation of, or the sale of, collection
from, or other realization upon, any of the Pledged Collateral, (iv) the
exercise or enforcement of any of the rights of Trustee or any Secured Party
hereunder or (v) the failure by Pledgor to perform or observe any of the
provisions hereof. All amounts payable by Pledgor under this Section 13.1 shall
be due upon demand and shall be part of the Secured Obligations. Pledgor's
obligations under this Section 13.1 shall survive the termination of this
Agreement and the discharge of Pledgor's other obligations hereunder.
SECTION 14 -- NO WAIVER; CUMULATIVE REMEDIES
14.1 No failure on the part of Trustee to exercise, no course of dealing with
respect to, and no delay on the part of Trustee in exercising, any right, power
or remedy hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise of any such right, power or remedy hereunder preclude any other
or further exercise thereof or the exercise of any other right, power or remedy.
The remedies herein provided are cumulative and are not exclusive of any
remedies provided by law.
<PAGE>
- 13 -
14.2 In the event Trustee shall have instituted any proceeding to enforce any
right, power or remedy under this Agreement by foreclosure, sale, entry or
otherwise, and such proceeding shall have been discontinued or abandoned for any
reason or shall have been determined adversely to Trustee, then and in every
such case, Pledgor, Trustee and each holder of any of the Secured Obligations
shall be restored to their respective former positions and rights hereunder with
respect to the Pledged Collateral, and all rights, remedies and powers of
Trustee and the Secured Parties shall continue as if no such proceeding had been
instituted.
SECTION 15 -- TRUSTEE
15.1 Trustee has been appointed as trustee hereunder pursuant to the Indenture.
The actions of Trustee hereunder are subject to the provisions of the Indenture.
Trustee shall have the right hereunder to make demands, to give notices, to
exercise or refrain from exercising any rights, and to take or refrain from
taking action (including, without limitation, the release or substitution of
Pledged Collateral), in accordance with this Agreement and the Indenture.
Trustee may resign and a successor Trustee may be appointed in the manner
provided in the Indenture. Upon the acceptance of any appointment as Trustee by
a successor Trustee, that successor Trustee shall thereupon succeed to and
become vested with all the rights, powers, privileges and duties of the retiring
Trustee under this Agreement, and the retiring Trustee shall thereupon be
discharged from its duties and obligations under this Agreement. After any
retiring Trustee's resignation, the provisions of this Agreement shall inure to
its benefit as to any actions taken or omitted to be taken by it under this
Agreement while it was Trustee.
SECTION 16 -- TRUSTEE MAY PERFORM; TRUSTEE APPOINTED ATTORNEY- IN-FACT
16.1 If Pledgor shall fail to do any act or thing that it has covenanted to do
hereunder or if any warranty on the part of Pledgor contained herein shall be
breached, Trustee or any Secured Party may (but shall not be obligated to) do
the same or cause it to be done or remedy any such breach, and may expend funds
for such purpose. Any and all amounts so expended by Trustee or such Secured
Party shall be paid by Pledgor immediately upon demand therefor, with interest
at 2% in excess of the rate then payable under the Notes (the "Default Rate")
during the period from and including the date on which such funds were so
expended to the date of repayment. Pledgor's obligations under this Section 16
shall survive the termination of this Agreement and the discharge of Pledgor's
other obligations under this Agreement. Pledgor hereby appoints Trustee its
attorney-in-fact with an interest, with full authority in the place and stead of
Pledgor and in the name of Pledgor, or otherwise, from time to time in Trustee's
discretion to take any action and to execute any instrument consistent with the
terms of this Agreement and the Indenture which the Trustee may deem necessary
or advisable to accomplish the purposes of this Agreement. The foregoing grant
of authority is a power of attorney coupled with an interest and such
appointment shall be irrevocable for the term of this Agreement. Pledgor hereby
ratifies all that such attorney shall lawfully do or cause to be done by virtue
and in accordance with the terms hereof.
<PAGE>
- 14 -
SECTION 17 -- REINSTATEMENT
17.1 This Pledge Agreement shall remain in full force and effect and continue to
be effective should any petition be filed by or against Pledgor for liquidation
or reorganization, should Pledgor become insolvent or make an assignment for the
benefit of creditors or should a receiver or trustee be appointed for all or any
significant part of Pledgor's assets, and shall continue to be effective or be
reinstated, as the case may be, if at any time payment and performance of the
Secured Obligations, or any part thereof, is, pursuant to applicable law,
rescinded or reduced in amount, or must otherwise be restored or returned, and
in any such case, the Secured Obligations shall be reinstated and deemed reduced
only by such amount paid and not so rescinded, reduced, restored or returned.
SECTION 18 -- MISCELLANEOUS
18.1 Notices. Unless otherwise provided herein, any notice or other
communication herein required or permitted to be given shall be given in the
manner at the address set forth in the Indenture, or as to any party at such
other address as shall be designated by such party in a written notice to the
other party complying as to delivery with the terms of this Section 18.1. All
such notices and other communications shall be deemed to have been given when
delivered in person, or received by telecopy or telex; or one (1) Business Day
after delivery to the office of an overnight courier service; or five (5)
Business Days after deposit in the mail, registered or certified, with postage
prepaid and properly addressed; provided, however, that notices to Trustee shall
not be effective until received by Trustee.
18.2 Continuing Lien; Assignment. This Agreement shall create a continuing Lien
in the Pledged Collateral and shall (i) be binding upon Pledgor, its successors
and assigns, and (ii) inure, together with the rights and remedies of Trustee
hereunder, to the benefit of Trustee and the other Secured Parties and each of
their respective successors, transferees and assigns; no other Person
(including, without limitation, any other creditor of Pledgor) shall have any
interest herein or any right or benefit with respect hereto. Without limiting
the generality of the foregoing clause (ii), any Secured Party may assign or
otherwise transfer any Note held by it secured by this Agreement to any other
Person, and such other Person shall thereupon become vested with all the
benefits in respect thereof granted to such Secured Party, herein or otherwise,
subject however, to the provisions of the Indenture.
18.3 Governing Law and Submission to Jurisdiction. This Agreement shall be
governed by and construed in accordance with the laws of the Province of Nova
Scotia and of Canada applicable therein. Pledgor irrevocably submits to the
non-exclusive jurisdiction of the courts of the Province of Nova Scotia and of
Canada sitting in Nova Scotia in any action or proceeding arising out of or
relating to this Agreement and irrevocably agrees that all such actions and
proceedings may be heard and determined in such courts, and irrevocably waives,
to the fullest extent possible, the defence of an inconvenient forum. A judgment
or order in any such action or proceeding may be enforced in any jurisdiction in
any manner provided by law. For greater certainty, Trustee may serve legal
process in any manner permitted by law
<PAGE>
- 15 -
and may bring an action or proceeding against Pledgor or the property or assets
of Pledgor in the courts of any jurisdiction.
18.4 Severability of Provisions. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction.
18.5 Execution in Counterparts. This Agreement and any amendments, waivers,
consents or supplements hereto may be executed in any number of counterparts and
by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed to be an original, but all such
counterparts together shall constitute one and the same Agreement.
18.6 Headings. The Section headings used in this Agreement are for convenience
of reference only and shall not affect the construction of this Agreement.
18.7 Obligations Absolute. All obligations of Pledgor hereunder shall be
absolute and unconditional irrespective of:
(1) any bankruptcy, insolvency, reorganization, arrangement,
readjustment, composition, liquidation or the like of Pledgor;
(2) any lack of validity or enforceability of the Indenture or the
Notes, or any other agreement or instrument relating thereto;
(3) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Secured Obligations, or any other
amendment or waiver of or any consent to any departure from the
Indenture or the Notes, or any other agreement or instrument
relating thereto;
(4) any exchange or release or non-perfection of any other collateral,
or any release or amendment or waiver of or consent to any departure
from any guarantee, for all or any of the Secured Obligations;
(5) any exercise or non-exercise, or any waiver of any right, remedy,
power or privilege under or in respect of this agreement, the
Indenture or the Notes except as specifically set forth in a waiver
granted pursuant to the provisions of the Indenture; or
(6) any other circumstances which might otherwise constitute a defence
available to, or a discharge of, Pledgor.
<PAGE>
- 16 -
18.8 Limitation on Interest Payable. It is the intention of the parties to
conform strictly to all laws relating to the eligibility and rate of interest
chargeable that are applicable to the transaction of which this Agreement is a
part. All agreements between Pledgor and Trustee, whether now existing or
hereafter arising and whether oral or written, are hereby expressly limited so
that in no contingency or event whatsoever shall the amount paid or agreed to be
paid by Pledgor for the use, forbearance or detention of the money to be loaned
or advanced under the Indenture or any related document, or for the payment or
performance of any covenant or obligation contained herein or in the Indenture,
exceed the maximum amount permissible under applicable laws. If under any
circumstances whatsoever fulfilment of any such provision, at the time
performance of such provision shall be due, shall involve exceeding the limit of
validity prescribed by law, then the obligation to be fulfilled shall be reduced
to the limit of such validity. If under any circumstances Pledgor shall have
paid an amount deemed interest by applicable law, which would exceed the highest
lawful rate, such amount that would be excessive interest under applicable laws
shall be applied to the reduction of the principal amount owing in respect of
the Secured Obligations and not to the payment of interest, or if such excessive
interest exceeds the unpaid balance of principal and any other amounts due
hereunder, the excess shall be refunded to Pledgor. All sums paid or agreed to
be paid for the use, forbearance or detention of the principal under any
extension of credit or advancement of funds by Trustee shall, to the extent
permitted by applicable law, and to the extent necessary to preclude exceeding
the limit of validity prescribed by law, be amortized, prorated, allocated and
spread from the date of this Agreement until payment in full of the Secured
Obligations so that the actual rate of interest on account of such principal
amounts is uniform throughout the term hereof.
The parties have executed this Agreement on November 27, 1996 at __ a.m.
(Halifax, Nova Scotia time).
STATIA TERMINALS CANADA,
INCORPORATED, as Pledgor
By: /s/ David B. Pittaway
---------------------------------------
Name: David B. Pittaway
Title: President
MARINE MIDLAND BANK, as Trustee
By: /s/ Eileen M. Hughes
---------------------------------------
Name: Eileen M. Hughes
Title: Assistant Vice President
<PAGE>
SCHEDULE A
Pledged Shares
<TABLE>
<CAPTION>
PERCENTAGE
OF ALL
NUMBER OF CAPITAL OR
SHARES OTHER
AUTHORIZED, EQUITY
CLASS OF PAR CERTIFICATE ISSUED AND INTERESTS OF
ISSUER STOCK VALUE NO(S). OUTSTANDING ISSUER
- ------ -------- ----- ----------- ----------- -------------
<S> <C> <C> <C> <C> <C>
Point Tupper common None 6 5,000 authorized; 100%
Marine 2 issued and
Services outstanding
Limited
</TABLE>
<PAGE>
SCHEDULE B
Filings
<PAGE>
EXHIBIT I
PLEDGE AMENDMENT
This Pledge Amendment, dated ______________, is delivered pursuant to
Section 6 of the Agreement referred to below. The undersigned hereby agrees that
this Pledge Amendment may be attached to the Securities Pledge Agreement, dated
as of ____________________, between the undersigned and _______________________
(the "Agreement"; capitalized terms used herein and not defined have the
meanings ascribed to them in the Agreement) and that the Pledged Shares listed
on this Pledge Amendment shall be deemed to be and shall become part of the
Pledged Collateral and shall secure all Secured Obligations.
_______________________,
as Pledgor
By: _________________________________
Name:
Title:
<PAGE>
Pledged Shares
PERCENTAGE OF
ALL CAPITAL OR
OTHER EQUITY
CLASS PAR CERTIFICATE NUMBER INTERESTS OF
ISSUER OF STOCK VALUE NO(S). OF SHARES ISSUER
- ------ -------- ----- ----------- --------- --------------
<PAGE>
EXECUTION COPY
------------------------------------------------------------
SECURITIES PLEDGE AGREEMENT
Made on November 27, 1996
Between
STATIA TERMINALS CORPORATION N.V.
as Pledgor
and
MARINE MIDLAND BANK
as Trustee
------------------------------------------------------------
MCMILLAN BINCH
---------
BARRISTERS & SOLICITORS
<PAGE>
EXECUTION COPY
TABLE OF CONTENTS
RECITALS.....................................................................1
SECTION 1 -- DEFINITIONS.....................................................2
1.1 .................................................................2
(1) Additional Shares..........................................2
(2) Capital Stock..............................................2
(3) Distributions..............................................2
(4) Documents..................................................2
(5) Event of Default...........................................2
(6) Intangibles................................................2
(7) Lien.......................................................2
(8) Pledged Collateral.........................................3
(9) Pledged Shares.............................................3
(10) Proceeds ..................................................3
(11) security interest .........................................3
(12) Secured Obligations........................................3
(13) Termination Date ..........................................3
(14) Trustee ...................................................3
SECTION 2 -- PLEDGE..........................................................3
2.1 .................................................................3
SECTION 3 -- SECURED OBLIGATIONS.............................................4
3.1 .................................................................4
SECTION 4 -- NO RELEASE......................................................4
4.1 .................................................................4
SECTION 5 -- DELIVERY OF PLEDGED COLLATERAL..................................5
5.1 .................................................................5
5.2 .................................................................5
SECTION 6 -- SUPPLEMENTS, FURTHER ASSURANCES.................................5
6.1 .................................................................5
6.2 .................................................................5
SECTION 7 -- REPRESENTATIONS, WARRANTIES AND COVENANTS.......................6
7.1 .................................................................6
(1) No Liens...................................................6
(2) Authorization, Enforceability..............................6
(3) No Consents, etc...........................................6
(4) Due Authorization and Issuance.............................6
(5) Chief Place of Business....................................6
(i)
<PAGE>
EXECUTION COPY
(6) Delivery of Pledged Collateral; Filings....................7
(7) Pledged Collateral.........................................7
(8) No Violations, etc.........................................7
(9) Ownership of Pledged Collateral............................7
(10) No Options, Warrants, etc..................................7
(11) Preservation of Title......................................7
7.2 .................................................................7
SECTION 8 -- VOTING RIGHTS; DISTRIBUTIONS; ETC...............................8
8.1 .................................................................8
8.2 .................................................................8
8.3 .................................................................9
8.4 .................................................................9
8.5 .................................................................9
SECTION 9 -- TRANSFERS AND OTHER LIENS; ADDITIONAL SHARES...................10
9.1 ................................................................10
9.2 ................................................................10
SECTION 10 -- REASONABLE CARE...............................................10
10.1 ................................................................10
SECTION 11 -- REMEDIES UPON DEFAULT; DECISIONS RELATING TO EXERCISE
OF REMEDIES...........................................................10
11.1 ................................................................10
11.2 ................................................................11
11.3 ................................................................11
11.4 ................................................................12
11.5 ................................................................12
SECTION 12 -- APPLICATION OF PROCEEDS.......................................12
12.1 ................................................................12
SECTION 13 -- EXPENSES......................................................12
13.1 ................................................................12
SECTION 14 -- NO WAIVER; CUMULATIVE REMEDIES................................12
14.1 ................................................................12
14.2 ................................................................13
SECTION 15 -- TRUSTEE.......................................................13
15.1 ................................................................13
SECTION 16 -- TRUSTEE MAY PERFORM; TRUSTEE APPOINTED ATTORNEY-IN-
FACT..................................................................13
(ii)
<PAGE>
EXECUTION COPY
16.1 ................................................................13
SECTION 17 -- REINSTATEMENT.................................................14
17.1 ................................................................14
SECTION 18 -- MISCELLANEOUS.................................................14
18.1 Notices.........................................................14
18.2 Continuing Lien; Assignment.....................................14
18.3 Governing Law and Submission to Jurisdiction....................14
18.4 Severability of Provisions......................................15
18.5 Execution in Counterparts.......................................15
18.6 Headings........................................................15
18.7 Obligations Absolute............................................15
18.8 Limitation on Interest Payable..................................16
(iii)
<PAGE>
EXECUTION COPY
SECURITIES PLEDGE AGREEMENT
This Agreement is made on November 27, 1996, between
Statia Terminals Corporation N.V.
as Pledgor ("Pledgor")
and
Marine Midland Bank
as Trustee
RECITALS
A. Statia Terminals Canada, Incorporated and Statia Terminals International
N.V., as issuers (collectively, the "Issuers"), Pledgor and certain subsidiaries
of the Issuers, as guarantors, and Trustee are contemporaneously with the
execution and delivery of this Agreement, entering into a certain indenture (as
amended, amended and restated, supplemented or otherwise modified from time to
time, the "Indenture"), dated November 27, 1996, pursuant to which Pledgor is
issuing its 11 3/4% first mortgage notes due 2003 (the "First Mortgage Notes"),
in the aggregate principal amount of U.S.$135,000,000. It is contemplated that
the Issuers may, after the date hereof, (i) issue exchange notes pursuant to the
Indenture (the "Exchange Notes"; together with the First Mortgage Notes, the
"Notes") and (ii) incur certain additional indebtedness ("Additional Secured
Indebtedness" as defined pursuant to the Indenture) which shall be equally and
rateably secured by the Pledged Collateral (as hereinafter defined).
B. Pledgor is the owner of the Pledged Collateral (as hereinafter defined).
C. This Agreement is given by Pledgor in favour of Trustee for its benefit and
the benefit of the holders of the Notes and the holders of the Additional
Secured Indebtedness (collectively, the "Secured Parties") to secure the payment
and performance of the Secured Obligations (as hereinafter defined) pursuant to
Pledgor's Guarantee (as defined in the Indenture).
NOW, THEREFORE, in consideration of the foregoing premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Pledgor and Trustee hereby agree as follows:
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SECTION 1 -- DEFINITIONS
1.1 Capitalized terms used herein but not otherwise defined shall have the
meanings assigned to such terms in the Indenture. Such definitions shall be
applicable equally to the singular and plural forms of the terms defined. The
following terms shall have the following meanings.
(1) Additional Shares shall mean, collectively, (i) all additional shares of
Capital Stock of any issuer of the Pledged Shares from time to time acquired by
Pledgor in any manner and (ii) all issued and outstanding shares of Capital
Stock of each Person which, after the date of this Agreement, is or becomes, as
a result of any occurrence, a Restricted Subsidiary of Pledgor (which, in each
case, are and shall remain at all times until this Agreement terminates,
certificated shares) including the certificates representing such additional
shares and any interest of Pledgor in the entries on the books of any financial
intermediary pertaining to such additional shares.
(2) Capital Stock of any Person means any and all shares, participations or
other equivalents of or interest in (however designated) the equity (including,
without limitation, common stock, preferred stock and partnership, membership or
other such interests) of such Person.
(3) Distributions shall mean all dividends, cash, options, warrants, rights,
instruments, distributions, partnership distributions, returns of capital,
income, profits and other property, interests or proceeds from time to time
received, receivable or otherwise distributed to Pledgor in respect of or in
exchange for any or all of the Pledged Shares.
(4) Documents shall mean, collectively, all documents relating to any of the
Pledged Collateral and shall also include, without limitation, any and all
books, records, ledgers, printouts, computer recording media, data files, tapes,
file materials and other papers containing information relating to any of the
Pledged Collateral.
(5) Event of Default means an "Event of Default" as defined in the Indenture.
(6) Intangibles shall mean all personal property relating to any of the Pledged
Collateral, including choses in action, that is not goods, chattel paper,
documents of title, instruments, money or securities.
(7) Lien means, with respect to any asset or property, any mortgage, deed of
trust, debenture, fiduciary transfer, lien (statutory or other), pledge, lease,
easement, restriction, covenant, charge, security interest or other encumbrance
of any kind or nature in respect of such asset or property, whether or not
filed, recorded or otherwise perfected under applicable law (including without
limitation any conditional sale or other title retention agreement, and any
lease in the nature thereof, any option or other agreement to sell, and any
filing of, or agreement to give, any financing statement under the Uniform
Commercial Code (or equivalent statutes of any jurisdiction)).
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(8) Pledged Collateral shall have the meaning assigned to such term in Section 2
of this Agreement.
(9) Pledged Shares shall mean, collectively, (i) all issued and outstanding
shares of Capital Stock of each Person described in Schedule A hereto (which are
and shall remain at all times until this Agreement terminates, certificated
shares), including the certificates representing the Pledged Shares and any
interest of Pledgor in the entries on the books of any financial intermediary
pertaining to the Pledged Shares and (ii) as of the date of acquisition thereof
by Pledgor, all Additional Shares.
(10) Proceeds shall include, without limitation, any and all (i) proceeds of any
insurance (except payments made to a Person which is not a party to this
Agreement), indemnity, warranty or guarantee payable to Trustee or to Pledgor
from time to time with respect to any of the Pledged Collateral, (ii) payments
(in any form whatsoever) made or due and payable to Pledgor from time to time in
connection with any requisition, confiscation, condemnation, seizure or
forfeiture of all or any part of the Pledged Collateral by any governmental
authority (or any Person acting under color of a governmental authority), (iii)
instruments representing obligations to pay amounts in respect of Pledged
Shares, (iv) products of the Pledged Collateral, and (v) other amounts from time
to time paid or payable under or in connection with any of the Pledged
Collateral.
(11) security interest means an interest in personal property that secures
payment or performance of an obligation, and includes, whether or not the
interest secures payment or performance of an obligation, the interest of a
transferee of an account or chattel paper.
(12) Secured Obligations shall have the meaning assigned to such term in Section
3 of this Agreement.
(13) Termination Date means the date on which Pledgor shall have complied with
all of the conditions precedent set forth in Article Eight of the Indenture for
satisfaction and discharge of the Indenture.
(14) Trustee means Marine Midland Bank and its successors and assigns in its
capacity as trustee for and on behalf of itself and for the benefit of the
Secured Parties.
SECTION 2 -- PLEDGE
2.1 As collateral security for the payment and performance when due of all the
Secured Obligations, Pledgor hereby pledges, assigns, hypothecates, mortgages,
delivers, deposits and transfers to Trustee for its benefit and the benefit of
the Secured Parties, and creates a continuing first priority security interest
in, all of the right, title and interest of Pledgor in, to and under the
following property, whether now existing or hereafter acquired (collectively,
the "Pledged Collateral"):
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(1) all Pledged Shares;
(2) all Additional Shares;
(3) all Distributions;
(4) all Intangibles;
(5) all Documents; and
(6) all Proceeds of any of the foregoing.
SECTION 3 -- SECURED OBLIGATIONS
3.1 This Agreement secures, and the Pledged Collateral is collateral security
for, the payment and performance in full when due, whether at stated maturity,
by acceleration or otherwise (including, without limitation, the payment of
interest and other amounts which would accrue and become due but for Pledgor or
any property or assets of Pledgor becoming the subject of a bankruptcy or
similar proceeding under the Bankruptcy and Insolvency Act (Canada) or the
Companies Creditors' Arrangement Act (Canada) or any other applicable insolvency
or bankruptcy legislation, or Pledgor becoming a party to any bankruptcy,
insolvency, moratorium or similar proceeding which gives rise to a stay which
has the effect of preventing Trustee from enforcing its rights hereunder), of
(i) all Obligations of Pledgor now existing or hereafter arising under or in
respect of the Indenture, its Guarantee and the Notes (including, without
limitation, the obligation of Pledgor to pay principal of, premium, if any, and
interest on the Notes when due and payable) and all other charges, fees,
expenses, commissions, reimbursements, premiums, indemnities and all other
amounts due or to become due and owing by Pledgor under or in connection with
the Indenture, the Guarantee, the Notes and the Additional Secured Indebtedness
and (ii) without duplication of the amounts described in clause (i), all
obligations, indebtedness and liabilities of Pledgor now existing or hereafter
arising under or in respect of this Agreement, including, without limitation,
with respect to all charges, fees, expenses, commissions, reimbursements,
premiums, indemnities and other payments related to or in respect of the
obligations contained in this Agreement (the obligations described in clauses
(i) and (ii) of this Section 3, collectively, the "Secured Obligations").
SECTION 4 -- NO RELEASE
4.1 Nothing set forth in this Agreement shall relieve Pledgor from the
performance of any term, covenant, condition or agreement on Pledgor's part to
be performed or observed under or in respect of any of the Pledged Collateral or
from any liability to any Person under or in respect of any of the Pledged
Collateral or shall impose any obligation on Trustee or any Secured Party to
perform or observe any such term, covenant, condition or agreement on Pledgor's
part to be so performed or observed or shall impose any liability on Trustee or
any Secured Party for any act or omission on the part of Pledgor relating
thereto or for any breach
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of any representation or warranty on the part of Pledgor contained in this
Agreement, or under or in respect of the Pledged Collateral or made in
connection herewith or therewith.
SECTION 5 -- DELIVERY OF PLEDGED COLLATERAL
5.1 All certificates, agreements or instruments representing or evidencing the
Pledged Collateral, to the extent not previously delivered to Trustee, shall
immediately upon receipt thereof by Pledgor be delivered to and held by or on
behalf of Trustee pursuant hereto. All Pledged Collateral shall be in suitable
form for transfer by delivery or shall be accompanied by duly executed powers of
attorney endorsed in blank, all in form and substance satisfactory to Trustee.
Trustee shall have the right, at any time upon the occurrence and during the
continuance of an Event of Default and without notice to Pledgor, to endorse,
assign or otherwise transfer to or to obtain registration in the name of Trustee
or any of its nominees any or all of the Pledged Collateral. In addition,
Trustee shall have the right at any time to exchange certificates representing
or evidencing Pledged Collateral for certificates of smaller or larger
denominations. If requested by Trustee at any time, Pledgor will execute and
deliver to Trustee a stock transfer direction to the transfer agent of the
Pledged Collateral, if applicable; provided that Trustee will only exercise such
stock transfer direction upon the occurrence of and during the continuance of an
Event of Default.
5.2 If the issuer of Pledged Shares is incorporated in a jurisdiction which does
not permit the use of certificates to evidence equity ownership, then Pledgor
shall, to the extent permitted by applicable law, record such pledge on the
stock register of the issuer, execute any customary stock pledge forms or other
documents necessary or appropriate to complete the pledge and give Trustee the
right to transfer such Pledged Shares under the terms hereof and provide to
Trustee an opinion of counsel, in form and substance reasonably satisfactory to
Trustee, confirming such pledge.
SECTION 6 -- SUPPLEMENTS, FURTHER ASSURANCES
6.1 Pledgor agrees that at any time and from time to time, at the sole cost and
expense of Pledgor, Pledgor shall promptly execute and deliver all further
instruments and documents, and take all further action that may be necessary or
that Trustee may reasonably request, in order to protect the pledge and Lien
granted or purported to be granted hereby or to enable Trustee to exercise and
enforce its rights and remedies hereunder with respect to any Pledged
Collateral.
6.2 Pledgor shall, upon obtaining any Pledged Shares of any Person, promptly
(and in any event within five Business Days) deliver to Trustee a pledge
amendment, duly executed by Pledgor, in substantially the form of Exhibit I
hereto (each, a "Pledge Amendment"), in respect of the additional Pledged Shares
which are to be pledged pursuant to this Agreement, and confirming the
attachment of the Lien hereby created on and in respect of such additional
shares. Pledgor hereby authorizes Trustee to attach each Pledge Amendment to
this Agreement and agrees that all Pledged Shares listed on any Pledge Amendment
delivered to Trustee shall for all purposes hereunder be considered Pledged
Collateral from and after the
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date of such Pledge Amendment. All certificates, instruments or other documents
evidencing or representing any additional Pledged Shares hereinafter acquired by
Pledgor shall forthwith after issuance be delivered to and remain in the custody
of Trustee or its nominee.
SECTION 7 -- REPRESENTATIONS, WARRANTIES AND COVENANTS
7.1 Pledgor represents, warrants and covenants as follows:
(1) No Liens. Pledgor is, and at the time of any delivery of any Pledged
Collateral to Trustee pursuant to Section 5 of this Agreement will be, the sole
holder of record and the sole beneficial owner of the Pledged Collateral. All
Pledged Collateral is on the date hereof, and will be, so owned by Pledgor free
and clear of any Lien except for the Lien granted to Trustee pursuant to this
Agreement.
(2) Authorization, Enforceability. Pledgor has the requisite corporate power,
authority and legal right to pledge, assign, hypothecate, mortgage, transfer,
deliver and deposit all the Pledged Collateral pursuant to this Agreement, and
this Agreement constitutes the legal, valid and binding obligation of Pledgor,
enforceable against Pledgor in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium and similar laws relating to or affecting creditors' rights generally
or by general equitable principles (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
(3) No Consents, etc. No consent of any party (including, without limitation,
stockholders or creditors of Pledgor) and no consent, authorization, approval,
or other action by, and no notice to or filing with, any governmental authority
or regulatory body or other Person is required (i) for the pledge by Pledgor of
the Pledged Collateral pursuant to this Agreement or for the execution, delivery
or performance of this Agreement by Pledgor, or (ii) for the exercise by Trustee
of the voting or other rights provided for in this Agreement, or (iii) for the
exercise by Trustee of the remedies in respect of the Pledged Collateral
pursuant to this Agreement, except for consents, authorizations, approvals and
other filings and notices as may be required in connection with any disposition
of the Pledged Collateral by applicable laws affecting the offering and sale of
securities generally and the resolution of the board of directors of Pledgor
approving the transfer of the Pledged Collateral executed on the date hereof and
delivered to Trustee.
(4) Due Authorization and Issuance. All of the Pledged Shares have been, and to
the extent hereafter issued will be upon such issuance, duly authorized and
validly issued and fully paid and nonassessable.
(5) Chief Place of Business. Pledgor's chief place of business is located at [
]. Pledgor shall not move its chief place of business except to such new
location as Pledgor may establish in accordance with the last sentence of this
subsection 7.1(5). Pledgor shall not establish a new location for its chief
place of business nor shall it change its name until it shall have given Trustee
not less than forty-five (45) days' prior written notice of its intention so to
do, clearly
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describing such new location or name and providing such other information in
connection therewith as Trustee or any Secured Party may request; and with
respect to such new location or name, Pledgor shall have taken all action
necessary or required by any and all existing or future applicable laws or as
Trustee shall from time to time reasonably request to maintain the validity of
Trustee's interests in the Pledged Collateral intended to be granted hereby.
(6) Delivery of Pledged Collateral; Filings. Pledgor has delivered to Trustee
all certificates representing the Pledged Shares and has caused to be made all
filings required under applicable law (which filings are set forth in Schedule B
annexed hereto) in connection with the Lien created by this Agreement, and such
delivery, filing and pledge of the Pledged Collateral pursuant to this Agreement
creates a valid and first priority Lien in the Pledged Collateral securing the
payment of the Secured Obligations pursuant to the laws in effect in each
applicable jurisdiction.
(7) Pledged Collateral. All information set forth herein, including the
Schedules annexed hereto, and all information contained in any documents,
schedules and lists heretofore delivered to any Secured Party in connection with
this Agreement, in each case, relating to the Pledged Collateral is accurate and
complete in all respects.
(8) No Violations, etc. The pledge of the Pledged Collateral pursuant to this
Agreement does not violate any laws of any of the applicable jurisdictions that
this agreement is or may be subject to, including, without limitation,
Regulation G, T, U or X of the Federal Reserve Board.
(9) Ownership of Pledged Collateral. Except as otherwise permitted by the
Indenture, Pledgor at all times will be the sole beneficial owner of the Pledged
Collateral.
(10) No Options, Warrants, etc. There are no options, warrants, calls, rights,
commitments or agreements of any character to which Pledgor is a party or by
which it is bound obligating Pledgor to issue, deliver or sell or cause to be
issued, delivered or sold, additional Pledged Shares or obligating Pledgor to
grant, extend or enter into any such option, warrant, call, right, commitment or
agreement. There are no voting trusts or other agreements or understandings to
which Pledgor is a party with respect to the voting of the capital stock of any
issuer of the Pledged Shares.
(11) Preservation of Title. Pledgor has and will defend title to the Pledged
Collateral and the Liens of Trustee thereon against the claim of any Person and
will maintain and preserve such title and Liens until the Termination Date.
7.2 The representations and warranties set forth in Section 7.1 shall survive
the execution and delivery of this Agreement.
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SECTION 8 -- VOTING RIGHTS; DISTRIBUTIONS; ETC.
8.1 So long as no Event of Default shall have occurred and be continuing:
(1) Pledgor shall be entitled to exercise any and all voting and other
consensual rights pertaining to the Pledged Collateral or any part
thereof for any purpose not inconsistent with the terms or purpose
of this Agreement and the Indenture; provided, however, that Pledgor
shall not in any event exercise such rights in any manner which may
have an adverse effect on the value of the Pledged Collateral or the
security intended to be provided by this Agreement or have the
effect of imposing any restriction on the transferability or
marketability of the Pledged Collateral.
(2) Subject to the terms of the Indenture, Pledgor shall be entitled to
receive and retain, and to utilize free and clear of the Lien of
this Agreement, any and all Distributions, but only if and to the
extent made in accordance with the provisions of the Indenture;
provided, however, that any and all such Distributions consisting of
rights or interests in the form of securities shall be, and shall be
forthwith delivered to Trustee to hold, as Pledged Collateral and
shall, if received by Pledgor, be received in trust for the benefit
of Trustee, be segregated from the other property or funds of
Pledgor, and be forthwith delivered to Trustee as Pledged Collateral
in the same form as so received (with any necessary endorsement).
(3) Trustee shall be deemed without further action or formality to have
granted to Pledgor all necessary consents relating to voting rights
and shall, if necessary, upon written request of Pledgor and at
Pledgor's sole cost and expense, from time to time execute and
deliver (or cause to be executed and delivered) to Pledgor all such
instruments as Pledgor may reasonably request in order to permit
Pledgor to exercise the voting and other rights which it is entitled
to exercise pursuant to subsection 8.1(1) hereof and to receive the
Distributions which it is authorized to receive and retain pursuant
to subsection 8.1(2) hereof.
8.2 Upon the occurrence and during the continuance of an Event of Default:
(1) All rights of Pledgor to exercise the voting and other consensual
rights it would otherwise be entitled to exercise pursuant to
subsection 8.1(1) hereof without any action or the giving of any
notice shall cease, and all such rights shall thereupon become
vested in Trustee, which shall thereupon have the sole right to
exercise such voting and other consensual rights as though it were
the outright owner thereof.
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(2) Without limitation to the foregoing, Trustee may exercise any and
all rights of conversion, exchange, subscription or any other
rights, privileges or options pertaining to the Pledged Collateral
as if it were the absolute owner thereof including, without
limitation, the right to exchange at its discretion such Pledged
Collateral upon the merger, consolidation, reorganization,
recapitalization or other readjustment of any Person or upon the
exercise by any Person or Trustee of any right, privilege or option
pertaining to such Pledged Collateral, and in connection therewith,
to deposit and deliver such Pledged Collateral with any committee,
depositary, transfer agent, registrar or other designated agency
upon such terms and conditions as it may determine, all without
liability except to account for property actually received by it.
(3) All rights of Pledgor to receive Distributions which it would
otherwise be authorized to receive and retain pursuant to subsection
8.1(2) hereof shall cease and all such rights shall thereupon become
vested in Trustee, which shall thereupon have the sole right to
receive and hold as Pledged Collateral such Distributions.
8.3 Pledgor hereby revokes all previous proxies with regard to the Pledged
Collateral and grants a proxy to Trustee to attend and vote at any and all
meetings of the shareholders of the Subsidiaries of Pledgor that issued the
Pledged Collateral, and any adjournments thereof, held on or after the date
hereof and prior to the Termination Date and to execute any and all written
consents of shareholders in connection therewith, with the same effect as if
Pledgor had personally attended the meetings or had personally voted its shares
or had personally signed the written consents. Pledgor hereby authorizes Trustee
to substitute another Person as the proxyholder and hereby authorizes and
directs such proxyholder to file this proxy and any substitution instrument with
the secretary of the appropriate Subsidiary. This proxy is coupled with an
interest and is irrevocable until the Termination Date. The Trustee shall not
exercise its rights under the proxy granted pursuant to this subsection 8.3
unless an Event of Default shall have occurred and be continuing.
8.4 Pledgor shall, at Pledgor's sole cost and expense, from time to time execute
and deliver to Trustee additional instruments as Trustee may request in order to
permit Trustee to exercise the voting and other rights which it may be entitled
to exercise pursuant to subsections 8.2(1) and 8.2(2) hereof and to receive all
Distributions which it may be entitled to receive under Subsection 8.2(3)
hereof.
8.5 All Distributions which are received by Pledgor contrary to the provisions
of subsection 8.2(3) hereof shall be received in trust for the benefit of
Trustee, shall be segregated from other funds of Pledgor and shall immediately
be paid over to Trustee as Pledged Collateral in the same form as so received
(with any necessary endorsement).
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SECTION 9 -- TRANSFERS AND OTHER LIENS; ADDITIONAL SHARES
9.1 Pledgor shall not (i) sell, convey, assign or otherwise dispose of, or grant
any option, right or warrant with respect to, any of the Pledged Collateral
except as permitted by the Indenture, (ii) create or permit to exist any Lien
upon or with respect to any Pledged Collateral other than the Lien and security
interest granted to Trustee under this Agreement, or (iii) permit any issuer of
the Pledged Shares to merge, consolidate or change its legal form, unless all of
the outstanding capital stock or partnership interests of the surviving or
resulting corporation or partnership as the case may be is, upon such merger or
consolidation, pledged hereunder and no cash, securities or other property is
distributed in respect of the outstanding shares or partnership interests of any
other constituent corporation or partnership.
9.2 Pledgor shall (i) cause each issuer of the Pledged Shares not to issue any
stock or other securities in addition to or in substitution for the Pledged
Shares issued by such issuer, except to Pledgor and (ii) pledge hereunder,
immediately upon its acquisition (directly or indirectly) thereof, any and all
additional shares of capital stock or other equity securities of the issuer of
the Pledged Shares which are required to be pledged hereunder.
SECTION 10 -- REASONABLE CARE
10.1 Trustee shall be deemed to have exercised reasonable care in the custody
and preservation of the Pledged Collateral in its possession if such Pledged
Collateral is accorded treatment substantially equivalent to that which Trustee,
in its individual capacity, accords its own property consisting of similar
instruments or interests, it being understood that neither Trustee nor any of
the Secured Parties shall have responsibility for (i) ascertaining or taking
action with respect to calls, conversions, exchanges, maturities, tenders or
other matters relating to any Pledged Collateral, whether or not Trustee or any
other Secured Party has or is deemed to have knowledge of such matters, or (ii)
taking any necessary steps to preserve rights against any Person with respect to
any Pledged Collateral.
SECTION 11 -- REMEDIES UPON DEFAULT; DECISIONS RELATING TO
EXERCISE OF REMEDIES
11.1 If any Event of Default shall have occurred and be continuing, Trustee
shall have the right, in addition to other rights and remedies provided for
herein or otherwise available to it, to be exercised in accordance with the
terms of, and at the times, if any, specified in the Indenture, subject to any
restrictions contained in the applicable Intercreditor Agreement, (i) to retain
and apply the Distributions to the Secured Obligations as provided in Section 12
hereof, and (ii) to exercise all the rights and remedies of a secured party on
default under all applicable laws in effect at that time, and Trustee may also
in its sole discretion, without notice except as specified below, sell the
Pledged Collateral or any part thereof (including, without limitation, any
partial interest in the Pledged Shares, to the extent permitted by applicable
law) in one or more parcels at public or private sale, at any exchange, broker's
board or at any of Trustee's offices or elsewhere, for cash, on credit or for
future delivery, and at such price or prices and upon such other terms as
Trustee may deem commercially reasonable, irrespective of the
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impact of any such sales on the market price of the Pledged Collateral. Trustee
or any other Secured Party may be the purchaser of any or all of the Pledged
Collateral at any such sale and shall be entitled, for the purpose of bidding
and making settlement or payment of the purchase price for all or any portion of
the Pledged Collateral sold at such sale, to use and apply any of the Secured
Obligations owed to such Person as a credit on account of the purchase price of
any Pledged Collateral payable by such Person at such sale. Each purchaser at
any such sale shall acquire the property sold absolutely free from any claim or
right on the part of Pledgor, and Pledgor hereby waives, to the fullest extent
permitted by law, all rights of redemption, stay and/or appraisal which it now
has or may at any time in the future have under any rule of law or statute now
existing or hereafter enacted. Pledgor acknowledges and agrees that, to the
extent notice of sale shall be required by law, ten days notice to Pledgor of
the time and place of any public sale or the time after which any private sale
or other intended disposition is to take place shall constitute reasonable
notification of such matters. No notification need be given to Pledgor if it has
signed, after the occurrence of an Event of Default, a statement renouncing or
modifying any right to notification of sale or other intended disposition.
Trustee shall not be obligated to make any sale of Pledged Collateral regardless
of notice of sale having been given. Trustee may adjourn any public or private
sale from time to time by announcement at the time and place fixed therefor, and
such sale may, without further notice, be made at the time and place to which it
was so adjourned. Pledgor hereby waives, to the fullest extent permitted by law,
any claims against Trustee arising by reason of the fact that the price at which
any Pledged Collateral may have been sold at such a private sale was less than
the price which might have been obtained at a public sale, even if Trustee
accepts the first offer received and does not offer such Pledged Collateral to
more than one offeree.
11.2 Pledgor acknowledges that any such private sales may be at prices and on
terms less favourable to Trustee than those obtainable through a public sale
without such restrictions (including, without limitation, a public offering made
pursuant to a registration statement under the Securities Act of 1933 (15 USCS @
77a (1996)), as amended from time to time or a prospectus qualifying the Pledged
Collateral for distribution in the Province of Nova Scotia and/or the other
provinces of Canada), and, notwithstanding such circumstances, agrees that any
such private sale shall be deemed to have been made in a commercially reasonable
manner and that Trustee shall have no obligation to engage in public sales and
no obligation to delay the sale of any Pledged Collateral for the period of time
necessary to permit the issuer thereof to qualify a prospectus under applicable
Canadian securities laws or register it for a form of public sale requiring
registration under any other applicable securities laws, even if such issuer
would agree to do so.
11.3 If Trustee determines to exercise its right to sell any or all of the
Pledged Collateral, upon written request, Pledgor shall from time to time
furnish to Trustee all such information as Trustee may request in order to
determine the number of securities included in the Pledged Collateral which may
be sold by Trustee pursuant to prospectus and registration exemptions under
applicable Canadian securities laws or as exempt transactions under the
Securities Act of 1933 and the rules of the Securities and Exchange Commission
thereunder, as the same are from time to time in effect.
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11.4 Pledgor recognizes that, by reason of certain prohibitions contained in
laws, rules, regulations or orders of any foreign governmental authority,
Trustee may be compelled, with respect to any sale of all or any part of the
Pledged Collateral, to limit purchasers to those who meet the requirements of
such foreign governmental authority. Pledgor acknowledges that any such sales
may be at prices and on terms less favourable to Trustee than those obtainable
through a public sale without such restrictions, and, notwithstanding such
circumstances, agrees that any such restricted sale shall be deemed to have been
made in a commercially reasonable manner and that, except as may be required by
applicable law, Trustee shall have no obligation to engage in public sales.
11.5 In addition to any of the other rights and remedies hereunder, Trustee
shall have the right to institute a proceeding seeking specific performance in
connection with any of the agreements or obligations hereunder.
SECTION 12 -- APPLICATION OF PROCEEDS
12.1 The proceeds received by Trustee in respect of any sale of, collection from
or other realization upon all or any part of the Pledged Collateral pursuant to
the exercise by Trustee of its remedies as a secured creditor as provided in
Section 11 hereof shall be applied, together with any other sums then held by
Trustee pursuant to this Agreement, promptly by Trustee in the manner set forth
in the Indenture and/or the applicable Intercreditor Agreement.
SECTION 13 -- EXPENSES
13.1 Pledgor will upon demand pay to Trustee the amount of any and all expenses,
including the fees and expenses of its counsel and the fees and expenses of any
experts and agents which Trustee may incur in connection with (i) the collection
of the Secured Obligations, (ii) the enforcement and administration of this
Agreement, (iii) the custody or preservation of, or the sale of, collection
from, or other realization upon, any of the Pledged Collateral, (iv) the
exercise or enforcement of any of the rights of Trustee or any Secured Party
hereunder or (v) the failure by Pledgor to perform or observe any of the
provisions hereof. All amounts payable by Pledgor under this Section 13.1 shall
be due upon demand and shall be part of the Secured Obligations. Pledgor's
obligations under this Section 13.1 shall survive the termination of this
Agreement and the discharge of Pledgor's other obligations hereunder.
SECTION 14 -- NO WAIVER; CUMULATIVE REMEDIES
14.1 No failure on the part of Trustee to exercise, no course of dealing with
respect to, and no delay on the part of Trustee in exercising, any right, power
or remedy hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise of any such right, power or remedy hereunder preclude any other
or further exercise thereof or the exercise of any other right, power or remedy.
The remedies herein provided are cumulative and are not exclusive of any
remedies provided by law.
<PAGE>
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- 13 -
14.2 In the event Trustee shall have instituted any proceeding to enforce any
right, power or remedy under this Agreement by foreclosure, sale, entry or
otherwise, and such proceeding shall have been discontinued or abandoned for any
reason or shall have been determined adversely to Trustee, then and in every
such case, Pledgor, Trustee and each holder of any of the Secured Obligations
shall be restored to their respective former positions and rights hereunder with
respect to the Pledged Collateral, and all rights, remedies and powers of
Trustee and the Secured Parties shall continue as if no such proceeding had been
instituted.
SECTION 15 -- TRUSTEE
15.1 Trustee has been appointed as trustee hereunder pursuant to the Indenture.
The actions of Trustee hereunder are subject to the provisions of the Indenture.
Trustee shall have the right hereunder to make demands, to give notices, to
exercise or refrain from exercising any rights, and to take or refrain from
taking action (including, without limitation, the release or substitution of
Pledged Collateral), in accordance with this Agreement and the Indenture.
Trustee may resign and a successor Trustee may be appointed in the manner
provided in the Indenture. Upon the acceptance of any appointment as Trustee by
a successor Trustee, that successor Trustee shall thereupon succeed to and
become vested with all the rights, powers, privileges and duties of the retiring
Trustee under this Agreement, and the retiring Trustee shall thereupon be
discharged from its duties and obligations under this Agreement. After any
retiring Trustee's resignation, the provisions of this Agreement shall inure to
its benefit as to any actions taken or omitted to be taken by it under this
Agreement while it was Trustee.
SECTION 16 -- TRUSTEE MAY PERFORM; TRUSTEE APPOINTED ATTORNEY-
IN-FACT
16.1 If Pledgor shall fail to do any act or thing that it has covenanted to do
hereunder or if any warranty on the part of Pledgor contained herein shall be
breached, Trustee or any Secured Party may (but shall not be obligated to) do
the same or cause it to be done or remedy any such breach, and may expend funds
for such purpose. Any and all amounts so expended by Trustee or such Secured
Party shall be paid by Pledgor immediately upon demand therefor, with interest
at 2% in excess of the rate then payable under the Notes (the "Default Rate")
during the period from and including the date on which such funds were so
expended to the date of repayment. Pledgor's obligations under this Section 16
shall survive the termination of this Agreement and the discharge of Pledgor's
other obligations under this Agreement. Pledgor hereby appoints Trustee its
attorney-in-fact with an interest, with full authority in the place and stead of
Pledgor and in the name of Pledgor, or otherwise, from time to time in Trustee's
discretion to take any action and to execute any instrument consistent with the
terms of this Agreement and the Indenture which the Trustee may deem necessary
or advisable to accomplish the purposes of this Agreement. The foregoing grant
of authority is a power of attorney coupled with an interest and such
appointment shall be irrevocable for the term of this Agreement. Pledgor hereby
ratifies all that such attorney shall lawfully do or cause to be done by virtue
and in accordance with the terms hereof.
<PAGE>
EXECUTION COPY
- 14 -
SECTION 17 -- REINSTATEMENT
17.1 This Pledge Agreement shall remain in full force and effect and continue to
be effective should any petition be filed by or against Pledgor for liquidation
or reorganization, should Pledgor become insolvent or make an assignment for the
benefit of creditors or should a receiver or trustee be appointed for all or any
significant part of Pledgor's assets, and shall continue to be effective or be
reinstated, as the case may be, if at any time payment and performance of the
Secured Obligations, or any part thereof, is, pursuant to applicable law,
rescinded or reduced in amount, or must otherwise be restored or returned, and
in any such case, the Secured Obligations shall be reinstated and deemed reduced
only by such amount paid and not so rescinded, reduced, restored or returned.
SECTION 18 -- MISCELLANEOUS
18.1 Notices. Unless otherwise provided herein, any notice or other
communication herein required or permitted to be given shall be given in the
manner at the address set forth in the Indenture, or as to any party at such
other address as shall be designated by such party in a written notice to the
other party complying as to delivery with the terms of this Section 18.1. All
such notices and other communications shall be deemed to have been given when
delivered in person, or received by telecopy or telex; or one (1) Business Day
after delivery to the office of an overnight courier service; or five (5)
Business Days after deposit in the mail, registered or certified, with postage
prepaid and properly addressed; provided, however, that notices to Trustee shall
not be effective until received by Trustee.
18.2 Continuing Lien; Assignment. This Agreement shall create a continuing Lien
in the Pledged Collateral and shall (i) be binding upon Pledgor, its successors
and assigns, and (ii) inure, together with the rights and remedies of Trustee
hereunder, to the benefit of Trustee and the other Secured Parties and each of
their respective successors, transferees and assigns; no other Person
(including, without limitation, any other creditor of Pledgor) shall have any
interest herein or any right or benefit with respect hereto. Without limiting
the generality of the foregoing clause (ii), any Secured Party may assign or
otherwise transfer any Note held by it secured by this Agreement to any other
Person, and such other Person shall thereupon become vested with all the
benefits in respect thereof granted to such Secured Party, herein or otherwise,
subject however, to the provisions of the Indenture.
18.3 Governing Law and Submission to Jurisdiction. This Agreement shall be
governed by and construed in accordance with the laws of the Province of Nova
Scotia and of Canada applicable therein. Pledgor irrevocably submits to the
non-exclusive jurisdiction of the courts of the Province of Nova Scotia and of
Canada sitting in Nova Scotia in any action or proceeding arising out of or
relating to this Agreement and irrevocably agrees that all such actions and
proceedings may be heard and determined in such courts, and irrevocably waives,
to the fullest extent possible, the defence of an inconvenient forum. A judgment
or order in any such action or proceeding may be enforced in any jurisdiction in
any manner provided by law. For greater certainty, Trustee may serve legal
process in any manner permitted by law
<PAGE>
EXECUTION COPY
- 15 -
and may bring an action or proceeding against Pledgor or the property or assets
of Pledgor in the courts of any jurisdiction.
18.4 Severability of Provisions. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction.
18.5 Execution in Counterparts. This Agreement and any amendments, waivers,
consents or supplements hereto may be executed in any number of counterparts and
by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed to be an original, but all such
counterparts together shall constitute one and the same Agreement.
18.6 Headings. The Section headings used in this Agreement are for convenience
of reference only and shall not affect the construction of this Agreement.
18.7 Obligations Absolute. All obligations of Pledgor hereunder shall be
absolute and unconditional irrespective of:
(1) any bankruptcy, insolvency, reorganization, arrangement,
readjustment, composition, liquidation or the like of Pledgor;
(2) any lack of validity or enforceability of the Indenture or the
Notes, or any other agreement or instrument relating thereto;
(3) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Secured Obligations, or any other
amendment or waiver of or any consent to any departure from the
Indenture or the Notes, or any other agreement or instrument
relating thereto;
(4) any exchange or release or non-perfection of any other collateral,
or any release or amendment or waiver of or consent to any departure
from any guarantee, for all or any of the Secured Obligations;
(5) any exercise or non-exercise, or any waiver of any right, remedy,
power or privilege under or in respect of this agreement, the
Indenture or the Notes except as specifically set forth in a waiver
granted pursuant to the provisions of the Indenture; or
(6) any other circumstances which might otherwise constitute a defence
available to, or a discharge of, Pledgor.
<PAGE>
EXECUTION COPY
- 16 -
18.8 Limitation on Interest Payable. It is the intention of the parties to
conform strictly to all laws relating to the eligibility and rate of interest
chargeable that are applicable to the transaction of which this Agreement is a
part. All agreements between Pledgor and Trustee, whether now existing or
hereafter arising and whether oral or written, are hereby expressly limited so
that in no contingency or event whatsoever shall the amount paid or agreed to be
paid by Pledgor for the use, forbearance or detention of the money to be loaned
or advanced under the Indenture or any related document, or for the payment or
performance of any covenant or obligation contained herein or in the Indenture,
exceed the maximum amount permissible under applicable laws. If under any
circumstances whatsoever fulfilment of any such provision, at the time
performance of such provision shall be due, shall involve exceeding the limit of
validity prescribed by law, then the obligation to be fulfilled shall be reduced
to the limit of such validity. If under any circumstances Pledgor shall have
paid an amount deemed interest by applicable law, which would exceed the highest
lawful rate, such amount that would be excessive interest under applicable laws
shall be applied to the reduction of the principal amount owing in respect of
the Secured Obligations and not to the payment of interest, or if such excessive
interest exceeds the unpaid balance of principal and any other amounts due
hereunder, the excess shall be refunded to Pledgor. All sums paid or agreed to
be paid for the use, forbearance or detention of the principal under any
extension of credit or advancement of funds by Trustee shall, to the extent
permitted by applicable law, and to the extent necessary to preclude exceeding
the limit of validity prescribed by law, be amortized, prorated, allocated and
spread from the date of this Agreement until payment in full of the Secured
Obligations so that the actual rate of interest on account of such principal
amounts is uniform throughout the term hereof.
The parties have executed this Agreement on November 27, 1996 at __ a.m.
(Halifax, Nova Scotia time).
STATIA TERMINALS CORPORATION N.V.,
as Pledgor
By: /s/ David B. Pittaway
---------------------------------------
Name: David B. Pittaway
Title: President
MARINE MIDLAND BANK, as Trustee
By: /s/ Eileen M. Hughes
---------------------------------------
Name: Eileen M. Hughes
Title: Assistant Vice President
<PAGE>
SCHEDULE A
Pledged Shares
<TABLE>
<CAPTION>
PERCENTAGE
OF ALL
NUMBER OF CAPITAL OR
SHARES OTHER
AUTHORIZED, EQUITY
CLASS OF PAR CERTIFICATE ISSUED AND INTERESTS OF
ISSUER STOCK VALUE NO(S). OUTSTANDING ISSUER
- ------ -------- ----- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Statia common None [ ] 1 million 100%
Terminals authorized; one
Canada, issued and
Incorporated outstanding.
Statia common $10 None 10 million 0%
Terminals authorized; none
Canada, issued and
Incorporated outstanding
</TABLE>
<PAGE>
SCHEDULE B
Filings
<PAGE>
EXHIBIT I
PLEDGE AMENDMENT
This Pledge Amendment, dated ______________, is delivered pursuant to
Section 6 of the Agreement referred to below. The undersigned hereby agrees that
this Pledge Amendment may be attached to the Securities Pledge Agreement, dated
as of ____________________, between the undersigned and _______________________
(the "Agreement"; capitalized terms used herein and not defined have the
meanings ascribed to them in the Agreement) and that the Pledged Shares listed
on this Pledge Amendment shall be deemed to be and shall become part of the
Pledged Collateral and shall secure all Secured Obligations.
_______________________,
as Pledgor
By: _________________________________
Name:
Title:
<PAGE>
Pledged Shares
PERCENTAGE OF
ALL CAPITAL OR
OTHER EQUITY
CLASS PAR CERTIFICATE NUMBER INTERESTS OF
ISSUER OF STOCK VALUE NO(S). OF SHARES ISSUER
- ------ -------- ----- ----------- --------- --------------
<PAGE>
-------------------------------------------
DEBT ALLOCATION AGREEMENT
Made as of November 27, 1996
Between
STATIA TERMINALS INTERNATIONAL N.V.
("STATIA")
and
STATIA TERMINALS CANADA, INCORPORATED
("STATIA CANADA")
-------------------------------------------
<PAGE>
DEBT ALLOCATION AGREEMENT
This Agreement made this 27th day of November, 1996.
BETWEEN:
STATIA TERMINALS INTERNATIONAL N.V. ("STATIA")
and
STATIA TERMINALS CANADA, INCORPORATED
("STATIA CANADA")
WHEREAS
1. Pursuant to an Offering Memorandum dated November 22, 1996 (the "Offering
Memorandum"), Statia Canada and Statia propose to issue, as joint
obligors, 11 3/4% First Mortgage Notes due 2003 (the "Original Notes")
having an aggregate principal amount at maturity of US$135,000,000;
2. Pursuant to a registration rights agreement dated November 27, 1996 (the
"Registration Rights Agreement"), Statia Canada and Statia are required,
subject to the conditions and limitations set out in the Registration
Rights Agreement, to make an offer to exchange the Original Notes for New
Notes, which will be identical in all material respects to the Original
Notes (except that the New Notes will not be subject to transfer
restrictions) and will evidence the same debt as the Original Notes (in
this agreement, the Original Notes and the New Notes are referred to as
the "Notes"). The Notes will be issued under a trust indenture (the "Note
Indenture") dated November 27, 1996 among, inter alia, Statia, Statia
Canada and Marine Midland Bank, as trustee;
3. The Statia Canada Note Proceeds (as defined below) will be used by Statia
Canada to (i) pay its proportionate share of the transaction costs
(including commissions payable to the Initial Purchasers) related to the
issue of the Notes ("Transaction Costs") and (ii) finance repayment of the
purchase notes in the amount of US$27,000,000 issued by Statia Canada in
connection with its purchase of the shares of Statia Terminals Point
Tupper Inc. as described in the Offering Memorandum;
4. The Statia Note Proceeds (as defined below) will be used by Statia to (i)
pay its proportionate share of Transaction Costs and (ii) assist in
financing the acquisition by its wholly-owned subsidiary, Statia Terminals
Corporation N.V., of the shares of Statia
<PAGE>
-2-
Terminals N.V., Saba Trust Company N.V., Bicen Development Corporation and
Statia Terminals Southwest, Inc. as described in the Offering Memorandum;
5. Statia and Statia Canada are entering into this agreement to evidence
their agreement as to the allocation of the debt evidenced by the Notes
(the "Debt") as between them and to provide for certain agreements
regarding repayment of the Notes and their respective obligations under
the Notes and Note Indenture.
NOW THEREFORE THIS AGREEMENT WITNESSETH that for valuable
consideration, the receipt and sufficiency whereof is hereby acknowledged,
Statia Canada and Statia agree, each with the other, as follows:
SECTION 1- DEFINITIONS
1.1 In this agreement, the following terms have the following meanings:
(a) "Gross Proceeds" means the aggregate issue price of the Notes before
any deduction for Transaction Costs;
(b) "proportionate share" where used with reference to Statia Canada or
Statia means the proportion that the Statia Canada Note Proceeds or
the Statia Note Proceeds, as the case may be, is of the Gross
Proceeds;
(c) "Statia Canada Note Proceeds" means US$28,060,000.
(d) "Statia Note Proceeds" means US$106,940,000.
1.2 Terms used but not defined in this agreement have the meanings attributed to
them in Note Indenture.
SECTION 2- ALLOCATION OF DEBT
2.1 The Gross Proceeds from the issue of the Notes shall be allocated between
Statia and Statia Canada as follows:
Statia: Statia Note Proceeds
Statia Canada: Statia Canada Note Proceeds
SECTION 3- SEVERAL OBLIGATIONS
3.1 The Statia Note Proceeds will, as between Statia and Statia Canada, be
deemed to be a separate borrowing by Statia in the amount of the Statia Note
Proceeds repayable by Statia,
<PAGE>
-3-
together with original issue discount, interest and premium or penalty (if any)
thereon, in accordance with the terms and requirements of the Notes and the Note
Indenture (the "Statia Several Note Obligations").
3.2 The Statia Canada Note Proceeds will, as between Statia Canada and Statia,
be deemed to be a separate borrowing by Statia Canada in the amount of the
Statia Canada Note Proceeds repayable by Statia Canada, together with original
issue discount, interest and premium or penalty (if any) thereon, in accordance
with the terms and requirements of the Notes and the Note Indenture (the "Statia
Canada Several Note Obligations").
SECTION 4- INDEMNITY AND DEEMED LOANS
4.1 Statia shall be solely responsible for payment of the Statia Several Note
Obligations in accordance with the terms and requirements of the Notes and the
Note Indenture and agrees to indemnify and save Statia Canada harmless with
respect to any and all obligations therefor, whether on account of issue price,
principal, original issue discount, interest, premium or penalty, all as more
fully set out in the Notes and the Note Indenture.
4.2 Statia Canada shall be solely responsible for payment of the Statia Canada
Several Note Obligations in accordance with the terms and requirements of the
Notes and the Note Indenture and agrees to indemnify and save Statia harmless
with respect to any and all obligations therefor, whether on account of issue
price, principal, original issue discount, interest, premium or penalty, all as
more fully set out in the Notes and the Note Indenture.
4.3 If, for any reason whatsoever, Statia Canada makes any payment on account of
or with respect to the Statia Several Note Obligations, whether required to be
made by either Statia or Statia Canada under the terms of the Notes or the Note
Indenture, including any payment pursuant to section 5.1 or 6.1(a), Statia
Canada shall be deemed to have advanced to Statia the amount of such payment by
way of a loan payable on demand together with interest thereon at the rate and
payable on the terms as set out in the Notes.
4.4 If, for any reason whatsoever, Statia makes any payment on account of or
with respect to the Statia Canada Several Note Obligations, whether required to
be made by either Statia or Statia Canada under the terms of the Notes or the
Note Indenture, including any payment pursuant to section 5.2 or 6.1(b), Statia
shall be deemed to have advanced to Statia Canada the amount of such payment by
way of a loan payable on demand together with interest thereon at the rate and
payable on the terms as set out in the Notes.
SECTION 5- OFFERS TO PURCHASE
5.1 Any proceeds received by Statia Canada from: (i) a Collateral Asset Sale,
(ii) a Non-Collateral Asset Sale, (iii) insurance relating to the destruction of
all or any portion of its Collateral, or (iv) an award relating to a taking of
all or any portion of its Collateral by
<PAGE>
-4-
eminent domain which are used by Statia Canada to purchase Notes pursuant to an
Offer to Purchase in accordance with the terms of the Note Indenture shall.
(a) unless the event giving rise to such proceeds is or results in the
occurrence of an Event of Default under the Note Indenture, if so
used to purchase Notes at any time or before the Fifth Anniversary
of the Issue Date, be deemed to be a payment first on account of the
Statia Canada Several Note Obligations to a maximum amount
determined on a cumulative basis of 25% of the original principal
amount thereof and then to be a payment on account of the Statia
Several Note Obligations to the extent of the balance of such
proceeds; and
(b) if so used to purchase Notes at any time after the Fifth Anniversary
of the Issue Date or if the Offer to Purchase is being made as a
result of or in order to cure an Event of Default, be deemed to be a
payment first on account of the Statia Canada Several Note
Obligations until such obligations are satisfied in full and then to
be a payment on account of the Statia Several Note Obligations to
the extent of the balance of such proceeds.
5.2 Any proceeds received by Statia from: (i) a Collateral Asset Sale, (ii) a
Non-Collateral Asset Sale, (iii) insurance relating to the destruction of all or
any portion of its Collateral, or (iv) an award relating to a taking of all or
any portion of its Collateral by eminent domain which are used by Statia to
purchase Notes pursuant to an Offer to Purchase in accordance with the terms of
the Note Indenture shall be deemed to be a payment first on an account of the
Statia Several Note Obligations until such obligations are satisfied in full and
then to be a payment on account of the Statia Canada Several Note Obligations to
the extent of the balance of such proceeds.
SECTION 6- CHANGE OF CONTROL OFFERS/REDEMPTIONS
6.1 If Statia and Statia Canada elect to redeem all or a portion of the Notes or
to cure an Event of Default resulting from a Change of Control by making a
Change of Control Offer:
(a) any amount paid by Statia Canada on account of the Redemption Price
of Notes or the Change of Control Purchase Price of Notes purchased
pursuant to a Change of Control Offer shall be deemed to be a
payment first on account of the Statia Canada Several Note
Obligations until such obligations are satisfied in full and then to
be a payment on account of the Statia Several Note Obligations; and
(b) any amount paid by Statia on account of the Redemption Price of
Notes or the Change of Control Purchase Price of Notes purchased
pursuant to a Change of Control Offer shall be deemed to be a
payment first on account of the Statia
<PAGE>
-5-
Several Note Obligations until such obligations are satisfied in
full and then to be a payment on account of the Statia Canada
Several Note Obligations.
SECTION 7- GENERAL PROVISIONS
7.1 This agreement shall enure to the benefit of and be binding upon each of
Statia Canada and Statia and their respective successors and assigns.
7.2 This agreement shall be interpreted and enforced in accordance with the laws
of Nova Scotia and the laws of Canada applicable therein.
IN WITNESS WHEREOF the parties hereto have caused this agreement to
be duly and properly executed in their names and on their behalf by their proper
officers duly authorized in that behalf.
SIGNED, SEALED AND DELIVERED ) STATIA TERMINALS
in the presence of ) INTERNATIONAL N.V.
)
)
____________________________ ) By: /s/ David B. Pittaway
Witness ) -------------------------------
)
)
) And: /s/ Justin Wender
) -------------------------------
)
) STATIA TERMINALS CANADA,
) INCORPORATED
)
____________________________ ) By: /s/ David B. Pittaway
Witness ) -------------------------------
)
)
) And: /s/ Justin Wender
) -------------------------------
<PAGE>
EXHIBIT J
UNITED STATES SECURITIES PLEDGE
AND SECURITY AGREEMENT
UNITED STATES SECURITIES PLEDGE AND SECURITY AGREEMENT (the
"Agreement"), dated as of November 27, 1996, by and among STATIA TERMINALS
INTERNATIONAL N.V., a Netherlands Antilles corporation ("Statia International"),
STATIA DELAWARE HOLDCO II, INC., a Delaware corporation ("HoldCo"), STATIA
TERMINALS DELAWARE, INC., a Delaware corporation ("Statia Delaware"), STATIA
TERMINALS, INC., a Delaware corporation ("Statia") and W.P. COMPANY, INC., a
Delaware corporation ("WP Inc."; Statia International, HoldCo, Statia and
WPInc., each a "Pledgor"; collectively, the "Pledgors") in favor of MARINE
MIDLAND BANK, as trustee (in such capacity and together with any successors and
assigns in such capacity, the "Trustee") pursuant to the Indenture (as
hereinafter defined).
R E C I T A L S :
A. Pledgors, certain other parties and Trustee are contemporaneously
with the execution and delivery of this Agreement, entering into a certain
indenture (as amended, amended and restated, supplemented or otherwise modified
from time to time, the "Indenture"), dated as of November 27, 1996, pursuant to
which Statia International and Statia Terminals Canada Incorporated
(collectively, the "Issuers"), are issuing their 11-3/4% first mortgage notes
due 2003, (the "First Mortgage Notes") in the aggregate principal amount of U.S.
$135,000,000. It is contemplated that the Issuers may after the date hereof, (i)
issue exchange notes pursuant to the Indenture (the "Exchange Notes"; together
with the First Mortgage Notes, the "Notes") and (ii) incur certain additional
Indebtedness ("Additional Secured Indebtedness") pursuant to Section 4.04 and
Section 4.14 of the Indenture which shall be equally and ratably secured by the
Pledged Collateral (as hereinafter defined).
B. Each Pledgor is the legal and beneficial owner of the Pledged
Collateral.
C. This Agreement is given by each Pledgor in favor of Trustee for
its benefit and the benefit of the holders of the Notes and the holders of the
Additional Secured Indebtedness (collectively, the "Secured Parties") to secure
the payment and performance of the Secured Obligations (as hereinafter defined).
<PAGE>
-2-
A G R E E M E N T :
NOW, THEREFORE, in consideration of the foregoing premises and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, each Pledgor hereby agrees with the Trustee as follows:
SECTION 1. Definitions. Capitalized terms used herein but not
otherwise defined shall have the meanings assigned to such terms in the
Indenture. Such definitions shall be applicable equally to the singular and
plural forms of the terms defined. The following terms shall have the following
meanings.
"Additional Shares" shall mean, collectively, (i) all additional
shares of Capital Stock of any issuer of the Pledged Shares from time to time
acquired by any Pledgor in any manner and (ii) all issued and outstanding shares
of Capital Stock of each Person which, after the date of this Agreement, is or
becomes, as a result of any occurrence, a Restricted Subsidiary of any Pledgor
(which, in each case, are and shall remain at all times until this Agreement
terminates, certificated shares) including the certificates representing such
additional shares and any interest of any Pledgor in the entries on the books of
any financial intermediary pertaining to such additional shares.
"Capital Stock" of any Person means any and all shares,
participations or other equivalents of or interest in (however designated) the
equity (including, without limitation, common stock, preferred stock and
partnership, membership or other such interests) of such Person.
"Collateral Account" shall mean the collateral accounts established
and maintained pursuant to the Indenture and all funds from time to time on
deposit therein, all investments of such funds (including, without limitation,
Financial Instruments) and all certificates and instruments from time to time
representing or evidencing such investments, all notes, certificates of deposit,
checks and other instruments from time to time hereafter delivered to or
otherwise possessed by Trustee for or on behalf of any Pledgor in substitution
for, or in addition to, any or all of the Pledged Collateral, and all interest,
dividends, cash, instruments and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of the items constituting Pledged Collateral.
"Distributions" shall mean all dividends, cash, options, warrants,
rights, instruments, distributions,
<PAGE>
-3-
partnership distributions, returns of capital, income, profits and other
property, interests or proceeds from time to time received, receivable or
otherwise distributed to any Pledgor in respect of or in exchange for any or all
of the Pledged Shares.
"Documents" shall mean, collectively, all "documents", as such term
is defined in the UCC, relating to any of the Pledged Collateral and shall also
include, without limitation, any and all books, records, ledgers, printouts,
computer recording media, data files, tapes, file materials and other papers
containing information relating to any of the Pledged Collateral.
"Intangibles" shall mean, collectively, all "general intangibles",
relating to any of the Pledged Collateral and, in any event, shall include,
without limitation, any and all contract rights, goodwill, descriptions, name
plates, claims, choses-in-action, causes of action, catalogs, confidential
information, consulting agreements, engineering contracts, and such other assets
which relate to the goodwill of the business of any Pledgor and rights to refund
or indemnification to the extent the foregoing relate to Pledged Collateral,
deposits and deposit accounts, letters of credit, documents, instruments,
chattel paper, bankers' acceptances and guarantees, and income tax refunds to
the extent relating to Pledged Collateral, claims for tax or other refunds
against any city, county or state or federal government, or any agency or
authority or other subdivision thereof relating to Pledged Collateral, corporate
or other business records relating to Pledged Collateral and all other general
intangibles of every kind and description relating to Pledged Collateral.
"Pledged Collateral" shall have the meaning assigned to such term in
Section 2 of this Agreement.
"Pledged Shares" shall mean, collectively, (i) all issued and
outstanding shares of capital stock of each Person described in Schedule A
hereto (which are and shall remain at all times until this Agreement terminates,
certificated shares), including the certificates representing the Pledged Shares
and any interest of any Pledgor in the entries on the books of any financial
intermediary pertaining to the Pledged Shares and (ii) as of the date of
acquisition thereof by any Pledgor, all Additional Shares.
"Proceeds" shall have the meaning assigned to the term "proceeds"
under the UCC, and in any event, shall include, without limitation, any and all
(i) proceeds of any insurance
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(except payments made to a Person which is not a party to this Agreement),
indemnity, warranty or guarantee payable to Trustee or to any Pledgor from time
to time with respect to any of the Pledged Collateral, (ii) payments (in any
form whatsoever) made or due and payable to any Pledgor from time to time in
connection with any requisition, confiscation, condemnation, seizure or
forfeiture of all or any part of the Pledged Collateral by any governmental
authority (or any Person acting under color of a governmental authority), (iii)
instruments representing obligations to pay amounts in respect of Pledged
Shares, (iv) products of the Pledged Collateral, and (v) other amounts from time
to time paid or payable under or in connection with any of the Pledged
Collateral.
"Secured Obligations" shall have the meaning assigned to such term
in Section 3 of this Agreement.
"UCC" shall mean the Uniform Commercial Code as in effect in any
applicable jurisdiction.
SECTION 2. Pledge. As collateral security for the payment and
performance when due of all the Secured Obligations, each Pledgor hereby
pledges, assigns, transfers and grants to Trustee for its benefit and the
benefit of the Secured Parties, a continuing first priority security interest in
and to all of the right, title and interest of each Pledgor in, to and under the
following property, whether now existing or hereafter acquired (collectively,
the "Pledged Collateral"):
(i) all Pledged Shares;
(ii) all Additional Shares;
(iii) all Distributions;
(iv) the Collateral Account;
(v) all Intangibles;
(vi) all Documents; and
(vii) all Proceeds of any of the foregoing.
SECTION 3. Secured Obligations. This Agreement secures, and the
Pledged Collateral is collateral security for, the payment and performance in
full when due, whether at stated maturity, by acceleration or otherwise
(including, without limitation, the payment of interest and other amounts which
would
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accrue and become due but for the filing of a petition in bankruptcy or the
operation of the automatic stay under Section 362(a) of the Bankruptcy Code, 11
U.S.C. ss. 362(a)), of (i) all Obligations of Statia International now existing
or hereafter arising under or in respect of the Indenture, the Guarantee and the
Additional Lender Intercreditor Agreement (including, without limitation, the
obligation of Statia International to pay principal of, premium, if any, and
interest on the Notes when due and payable) and all other charges, fees,
expenses, commissions, reimbursements, premiums, indemnities and all other
amounts due or to become under or in connection with the Indenture, the
Guarantee and the Additional Lender Intercreditor Agreement (ii) all Obligations
of each Pledgor (other than Statia International) now existing or hereafter
arising under or in respect of the Indenture, the Notes, the Guarantee and the
Additional Lender Intercreditor Agreement (including, without limitation, the
obligation of such Pledgor to pay principal of, premium, if any, and interest on
the Notes when due and payable) and all other charges, fees, expenses,
commissions, reimbursements, premiums, indemnities and all other amounts due or
to become due under or in connection with the Indenture, the Notes, the
Guarantee and the Additional Lender Intercreditor Agreement and (iii) without
duplication of the amounts described in clauses (i) and (ii) of this Section 3,
all obligations, indebtedness and liabilities of each Pledgor now existing or
hereafter arising under or in respect of this Agreement, including, without
limitation, with respect to all charges, fees, expenses, commissions,
reimbursements, premiums, indemnities and other payments related to or in
respect of the obligations contained in this Agreement (the obligations
described in clauses (i), (ii) and (iii) of this Section 3, collectively, the
"Secured Obligations").
SECTION 4. No Release. Nothing set forth in this Agreement shall
relieve any Pledgor from the performance of any term, covenant, condition or
agreement on such Pledgor's part to be performed or observed under or in respect
of any of the Pledged Collateral or from any liability to any Person under or in
respect of any of the Pledged Collateral or shall impose any obligation on
Trustee or any Secured Party to perform or observe any such term, covenant,
condition or agreement on any Pledgor's part to be so performed or observed or
shall impose any liability on Trustee or any Secured Party for any act or
omission on the part of any Pledgor relating thereto or for any breach of any
representation or warranty on the part of any Pledgor contained in this
Agreement, or under or in respect of the Pledged Collateral or made in
connection herewith or therewith.
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SECTION 5. Delivery of Pledged Collateral.
(a) All certificates, agreements or instruments representing or
evidencing the Pledged Collateral, to the extent not previously delivered to
Trustee, shall immediately upon receipt thereof by each Pledgor be delivered to
and held by or on behalf of Trustee pursuant hereto. All Pledged Collateral
shall be in suitable form for transfer by delivery or shall be accompanied by
duly executed instruments of transfer or assignment in blank, all in form and
substance satisfactory to Trustee. Trustee shall have the right, at any time
upon the occurrence and during the continuance of an Event of Default and
without notice to any Pledgor, to endorse, assign or otherwise transfer to or to
register in the name of Trustee or any of its nominees any or all of the Pledged
Collateral. In addition, Trustee shall have the right at any time to exchange
certificates representing or evidencing Pledged Collateral for certificates of
smaller or larger denominations.
(b) If the issuer of Pledged Shares is incorporated in a
jurisdiction which does not permit the use of certificates to evidence equity
ownership, then the applicable Pledgor shall, to the extent permitted by
applicable law, record such pledge on the stock register of the issuer, execute
any customary stock pledge forms or other documents necessary or appropriate to
complete the pledge and give Trustee the right to transfer such Pledged Shares
under the terms hereof and provide to Trustee an Opinion of Counsel, in form and
substance reasonably satisfactory to Trustee, confirming such pledge.
SECTION 6. Supplements, Further Assurances.
(a) Each Pledgor agrees that at any time and from time to time, at
the sole cost and expense of such Pledgor, such Pledgor shall promptly execute
and deliver all further instruments and documents, including, without
limitation, supplemental or additional UCC-1 financing statements, and take all
further action that may be necessary or that Trustee may reasonably request, in
order to perfect and protect the pledge, security interest and Lien granted or
purported to be granted hereby or to enable Trustee to exercise and enforce its
rights and remedies hereunder with respect to any Pledged Collateral.
(b) Each Pledgor shall, upon obtaining any Pledged Shares of any
Person, promptly (and in any event within five Business Days) deliver to Trustee
(i) a pledge amendment, duly executed by such Pledgor, in substantially the form
of Exhibit I hereto (each, a "Pledge Amendment"), in respect of the additional
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Pledged Shares which are to be pledged pursuant to this Agreement, and
confirming the attachment of the Lien hereby created on and in respect of such
additional shares and (ii) reasonable notification that Pledgor is delivering to
Pledgee such additional shares. Each Pledgor hereby authorizes Trustee to attach
each Pledge Amendment to this Agreement and agrees that all Pledged Shares
listed on any Pledge Amendment delivered to Trustee shall for all purposes
hereunder be considered Pledged Collateral from and after the date of such
Pledge Amendment.
SECTION 7. Representations, Warranties and Covenants. Each Pledgor
represents, warrants and covenants as follows (as to itself only):
(a) No Liens. Each Pledgor is, and at the time of any delivery of
any Pledged Collateral to Trustee pursuant to Section 5 of this Agreement
will be, the sole legal and beneficial owner of the Pledged Collateral.
All Pledged Collateral is on the date hereof, and will be, so owned by
such Pledgor free and clear of any Lien except for the Lien granted to
Trustee pursuant to this Agreement.
(b) Authorization, Enforceability. Each Pledgor has the requisite
corporate power, authority and legal right to pledge and grant a security
interest in all the Pledged Collateral pursuant to this Agreement, and
this Agreement constitutes the legal, valid and binding obligation of such
Pledgor, enforceable against such Pledgor in accordance with its terms,
except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and similar laws relating to or affecting
creditors' rights generally or by general equitable principles (regardless
of whether such enforceability is considered in a proceeding in equity or
at law).
(c) No Consents, etc. No consent of any party (including, without
limitation, stockholders or creditors of any Pledgor) and no consent,
authorization, approval, or other action by, and no notice to or filing
with, any governmental authority or regulatory body or other Person is
required (i) for the pledge by any Pledgor of the Pledged Collateral
pursuant to this Agreement or for the execution, delivery or performance
of this Agreement by any Pledgor, or (ii) for the exercise by Trustee of
the voting or other rights provided for in this Agreement, or (iii) for
the exercise by Trustee of the remedies in respect of the Pledged
Collateral pursuant to this Agreement and except for
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consents, authorizations, approvals and other filings and notices required
under the Securities Act or under state or "Blue Sky" securities laws.
(d) Due Authorization and Issuance. All of the Pledged Shares have
been, and to the extent hereafter issued will be upon such issuance, duly
authorized and validly issued and fully paid and nonassessable.
(e) Chief Executive Office. Each Pledgors' chief executive office is
located in the State set forth on Annex A hereto. No Pledgor shall (i)
move its chief executive office except to such new location as such
Pledgor may establish in accordance with the last sentence of this
subsection 7(e). No Pledgor shall establish a new location for its chief
executive office nor shall it change its name until (i) it shall have
given Trustee not less than forty-five (45) days' prior written notice of
its intention so to do, clearly describing such new location or name and
providing such other information in connection therewith as Trustee or any
Secured Party may request, and (ii) with respect to such new location or
name, such Pledgor shall have taken all action satisfactory to Trustee to
maintain the perfection and priority of the security interest of Trustee
for the benefit of the Secured Parties in the Pledged Collateral intended
to be granted hereby.
(f) Delivery of Pledged Collateral; Filings. Each Pledgor has
delivered to Trustee all certificates representing the Pledged Shares
owned on the date hereof and has caused to be filed with the Secretary of
State of New York and the State or States set forth next to such Pledgor's
name on Annex A hereto and the chief executive office of such Pledgor,
UCC-1 financing statements evidencing the Lien created by this Agreement,
and such delivery, filing and pledge of the Pledged Collateral pursuant to
this Agreement creates a valid and perfected first priority security
interest in the Pledged Collateral securing the payment of the Secured
Obligations pursuant to the UCC in effect in each applicable jurisdiction,
including, without limitation, the State of New York and the State or
States set forth next to such Pledgor's name on Annex A hereto.
(g) Pledged Collateral. All information set forth herein, including,
the Schedules annexed hereto, and all information contained in any
documents, schedules and lists heretofore delivered to any Secured Party
in connection with
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this Agreement, in each case, relating to the Pledged Collateral is
accurate and complete in all respects.
(h) No Violations, etc. The pledge of the Pledged Collateral
pursuant to this Agreement does not violate Regulation G, T, U or X of the
Federal Reserve Board.
(i) Ownership of Pledged Collateral. Except as otherwise permitted
by the Indenture, each Pledgor at all times will be the sole beneficial
owner of the Pledged Collateral.
(j) No Options, Warrants, etc. There are no options, warrants,
calls, rights, commitments or agreements of any character to which any
Pledgor is a party or by which it is bound obligating any Pledgor to
issue, deliver or sell or cause to be issued, delivered or sold,
additional Pledged Shares or obligating any Pledgor to grant, extend or
enter into any such option, warrant, call, right, commitment or agreement.
There are no voting trusts or other agreements or understandings to which
any Pledgor is a party with respect to the voting of the capital stock of
any issuer of the Pledged Shares.
SECTION 8. Voting Rights; Distributions; etc.
(a) So long as no Event of Default shall have occurred and be
continuing:
(i) Each Pledgor shall be entitled to exercise any and all voting
and other consensual rights pertaining to the Pledged Collateral or any
part thereof for any purpose not inconsistent with the terms or purpose of
this Agreement and the Indenture; provided, however, that no Pledgor
shall, in any event, exercise such rights in any manner which may have an
adverse effect on the value of the Pledged Collateral or the security
intended to be provided by this Agreement.
(ii) Subject to the terms of the Indenture, each Pledgor shall be
entitled to receive and retain, and to utilize free and clear of the Lien
of this Agreement, any and all Distributions, but only if and to the
extent made in accordance with the provisions of the Indenture; provided,
however, that any and all such Distributions consisting of rights or
interests in the form of securities shall be, and shall be forthwith
delivered to Trustee to hold, as Pledged Collateral and shall, if received
by any Pledgor, be received in trust for the benefit of Trustee, be
segregated
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from the other property or funds of such Pledgor, and be forthwith
delivered to Trustee as Pledged Collateral in the same form as so received
(with any necessary endorsement).
(iii) Trustee shall be deemed without further action or formality to
have granted to each Pledgor all necessary consents relating to voting
rights and shall, if necessary, upon written request of any Pledgor and at
such Pledgor's sole cost and expense, from time to time execute and
deliver (or cause to be executed and delivered) to such Pledgor all such
instruments as such Pledgor may reasonably request in order to permit such
Pledgor to exercise the voting and other rights which it is entitled to
exercise pursuant to subsection 8(a)(i) hereof and to receive the
Distributions which it is authorized to receive and retain pursuant to
subsection 8(a)(ii) hereof.
(b) Upon the occurrence and during the continuance of an Event of
Default:
(i) All rights of any Pledgor to exercise the voting and other
consensual rights it would otherwise be entitled to exercise pursuant to
subsection 8(a)(i) hereof without any action or the giving of any notice
shall cease, and all such rights shall thereupon become vested in Trustee,
which shall thereupon have the sole right to exercise such voting and
other consensual rights.
(ii) All rights of any Pledgor to receive Distributions which it
would otherwise be authorized to receive and retain pursuant to subsection
8(a)(ii) hereof shall cease and all such rights shall thereupon become
vested in Trustee, which shall thereupon have the sole right to receive
and hold as Pledged Collateral such Distributions.
(c) Each Pledgor shall, at such Pledgor's sole cost and expense,
from time to time execute and deliver to Trustee appropriate instruments as
Trustee may reasonably request in order to permit Trustee to exercise the voting
and other rights which it may be entitled to exercise pursuant to subsection
8(b)(i) hereof and to receive all Distributions which it may be entitled to
receive under subsection 8(b)(ii) hereof.
(d) All Distributions which are received by any Pledgor contrary to
the provisions of subsection 8(b)(ii) hereof shall be received in trust for the
benefit of Trustee, shall be segregated from other funds of such Pledgor and
shall immediately
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be paid over to Trustee as Pledged Collateral in the same form as so received
(with any necessary endorsement).
SECTION 9. Transfers and Other Liens; Additional Shares.
(a) No Pledgor shall (i) sell, convey, assign or otherwise dispose
of, or grant any option, right or warrant with respect to, any of the Pledged
Collateral except as permitted by the Indenture, (ii) create or permit to exist
any Lien upon or with respect to any Pledged Collateral other than the Lien and
security interest granted to Trustee under this Agreement, or (iii) permit any
issuer of the Pledged Shares to merge, consolidate or change its legal form,
unless all of the outstanding capital stock or partnership interests of the
surviving or resulting corporation or partnership as the case may be is, upon
such merger or consolidation, pledged hereunder and no cash, securities or other
property is distributed in respect of the outstanding shares or partnership
interests of any other constituent corporation or partnership.
(b) Each Pledgor shall (i) cause each issuer of the Pledged Shares
not to issue any stock or other securities in addition to or in substitution for
the Pledged Shares issued by such issuer, except to such Pledgor and (ii) pledge
hereunder, immediately upon its acquisition (directly or indirectly) thereof,
any and all additional shares of Capital Stock or other equity securities of the
issuer of the Pledged Shares which are required to be pledged hereunder.
SECTION 10. Reasonable Care. Trustee shall be deemed to have
exercised reasonable care in the custody and preservation of the Pledged
Collateral in its possession if such Pledged Collateral is accorded treatment
substantially equivalent to that which Trustee, in its individual capacity,
accords its own property consisting of similar instruments or interests, it
being understood that neither Trustee nor any of the Secured Parties shall have
responsibility for (i) ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relating to any
Pledged Collateral, whether or not Trustee or any other Secured Party has or is
deemed to have knowledge of such matters, or (ii) taking any necessary steps to
preserve rights against any Person with respect to any Pledged Collateral.
<PAGE>
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SECTION 11. Remedies upon Default; Decisions Relating to Exercise of
Remedies.
(a) If any Event of Default shall have occurred and be continuing,
Trustee shall have the right, in addition to other rights and remedies provided
for herein or otherwise available to it, to be exercised in accordance with the
terms of, and at the times, if any, specified in the Indenture, (i) to retain
and apply the Distributions to the Secured Obligations as provided in Section 12
hereof, and (ii) to exercise all the rights and remedies of a secured party on
default under the Uniform Commercial Code in effect in the State of New York at
that time, and Trustee may also in its sole discretion, without notice except as
specified below, sell the Pledged Collateral or any part thereof (including,
without limitation, any partial interest in the Pledged Shares) in one or more
parcels at public or private sale, at any exchange, broker's board or at any of
Trustee's offices or elsewhere, for cash, on credit or for future delivery, and
at such price or prices and upon such other terms as Trustee may deem
commercially reasonable, irrespective of the impact of any such sales on the
market price of the Pledged Collateral. Trustee or any other Secured Party may
be the purchaser of any or all of the Pledged Collateral at any such sale and
shall be entitled, for the purpose of bidding and making settlement or payment
of the purchase price for all or any portion of the Pledged Collateral sold at
such sale, to use and apply any of the Secured Obligations owed to such Person
as a credit on account of the purchase price of any Pledged Collateral payable
by such Person at such sale. Each purchaser at any such sale shall acquire the
property sold absolutely free from any claim or right on the part of any
Pledgor, and each Pledgor hereby waives, to the fullest extent permitted by law,
all rights of redemption, stay and/or appraisal which it now has or may at any
time in the future have under any rule of law or statute now existing or
hereafter enacted. Each Pledgor acknowledges and agrees that, to the extent
notice of sale shall be required by law, ten days notice to such Pledgor of the
time and place of any public sale or the time after which any private sale or
other intended disposition is to take place shall constitute reasonable
notification of such matters. No notification need be given to such Pledgor if
it has signed, after the occurrence of an Event of Default, a statement
renouncing or modifying any right to notification of sale or other intended
disposition. Trustee shall not be obligated to make any sale of Pledged
Collateral regardless of notice of sale having been given. Trustee may adjourn
any public or private sale from time to time by announcement at the time and
place fixed therefor, and such sale may, without further notice, be made at the
time and place to
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which it was so adjourned. Each Pledgor hereby waives, to the fullest extent
permitted by law, any claims against Trustee arising by reason of the fact that
the price at which any Pledged Collateral may have been sold at such a private
sale was less than the price which might have been obtained at a public sale,
even if Trustee accepts the first offer received and does not offer such Pledged
Collateral to more than one offeree.
(b) Each Pledgor recognizes that, by reason of certain prohibitions
contained in the Securities Act of 1933, as amended (the "Securities Act"), and
applicable state securities laws, Trustee may be compelled, with respect to any
sale of all or any part of the Pledged Collateral, to limit purchasers to
Persons who will agree, among other things, to acquire the Pledged Collateral
for their own account, for investment and not with a view to the distribution or
resale thereof. Each Pledgor acknowledges that any such private sales may be at
prices and on terms less favorable to Trustee than those obtainable through a
public sale without such restrictions (including, without limitation, a public
offering made pursuant to a registration statement under the Securities Act),
and, notwithstanding such circumstances, agrees that any such private sale shall
be deemed to have been made in a commercially reasonable manner and that Trustee
shall have no obligation to engage in public sales and no obligation to delay
the sale of any Pledged Collateral for the period of time necessary to permit
the issuer thereof to register it for a form of public sale requiring
registration under the Securities Act or under applicable state securities laws,
even if such issuer would agree to do so.
(c) If Trustee determines to exercise its right to sell any or all
of the Pledged Collateral, upon written request, each Pledgor shall from time to
time furnish to Trustee all such information as Trustee may request in order to
determine the number of securities included in the Pledged Collateral which may
be sold by Trustee as exempt transactions under the Securities Act and the rules
of the Securities and Exchange Commission thereunder, as the same are from time
to time in effect.
(d) Each Pledgor recognizes that, by reason of certain prohibitions
contained in laws, rules, regulations or orders of any foreign governmental
authority, Trustee may be compelled, with respect to any sale of all or any part
of the Pledged Collateral, to limit purchasers to those who meet the
requirements of such foreign governmental authority. Each Pledgor acknowledges
that any such sales may be at prices and on terms less favorable to Trustee than
those obtainable through a public sale without such restrictions, and,
notwithstanding such
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circumstances, agrees that any such restricted sale shall be deemed to have been
made in a commercially reasonable manner and that, except as may be required by
applicable law, Trustee shall have no obligation to engage in public sales.
(e) In addition to any of the other rights and remedies hereunder,
Trustee shall have the right to institute a proceeding seeking specific
performance in connection with any of the agreements or obligations hereunder.
SECTION 12. Application of Proceeds. The proceeds received by
Trustee in respect of any sale of, collection from or other realization upon all
or any part of the Pledged Collateral pursuant to the exercise by Trustee of its
remedies as a secured creditor as provided in Section 11 hereof shall be
applied, together with any other sums then held by Trustee pursuant to this
Agreement, promptly by Trustee in the manner set forth in the Indenture and/or
the Additional Lender Intercreditor Agreement.
SECTION 13. Expenses. Each Pledgor will immediately upon demand pay
to Trustee the amount of any and all expenses, including the fees and expenses
of its counsel and the fees and expenses of any experts and agents which Trustee
may incur in connection with (i) the collection of the Secured Obligations, (ii)
the enforcement and administration of this Agreement, (iii) the custody or
preservation of, or the sale of, collection from, or other realization upon, any
of the Pledged Collateral, (iv) the exercise or enforcement of any of the rights
of Trustee or any Secured Party hereunder or (v) the failure by any Pledgor to
perform or observe any of the provisions hereof. All amounts payable by each
Pledgor under this Section 13 shall be due immediately upon demand and shall be
part of the Secured Obligations. Each Pledgor's obligations under this Section
13 shall survive the termination of this Agreement and the discharge of such
Pledgor's other obligations hereunder.
SECTION 14. No Waiver; Cumulative Remedies.
(a) No failure on the part of Trustee to exercise, no course of
dealing with respect to, and no delay on the part of Trustee in exercising, any
right, power or remedy hereunder shall operate as a waiver thereof; nor shall
any single or partial exercise of any such right, power or remedy hereunder
preclude any other or further exercise thereof or the exercise of any other
right, power or remedy. The remedies herein provided are cumulative and are not
exclusive of any remedies provided by law.
<PAGE>
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(b) In the event Trustee shall have instituted any proceeding to
enforce any right, power or remedy under this Agreement by foreclosure, sale,
entry or otherwise, and such proceeding shall have been discontinued or
abandoned for any reason or shall have been determined adversely to Trustee,
then and in every such case, each Pledgor, Trustee and each holder of any of the
Secured Obligations shall be restored to their respective former positions and
rights hereunder with respect to the Pledged Collateral, and all rights,
remedies and powers of Trustee and the Secured Parties shall continue as if no
such proceeding had been instituted.
SECTION 15. Trustee. Trustee has been appointed as trustee hereunder
pursuant to the Indenture and the Additional Lender Intercreditor Agreement. The
actions of Trustee hereunder are subject to the provisions of the Indenture and
the Additional Lender Intercreditor Agreement. Trustee shall have the right
hereunder to make demands, to give notices, to exercise or refrain from
exercising any rights, and to take or refrain from taking action (including,
without limitation, the release or substitution of Pledged Collateral), in
accordance with this Agreement, the Indenture and the Additional Lender
Intercreditor Agreement. Trustee may resign and a successor Trustee may be
appointed in the manner provided in the Indenture. Upon the acceptance of any
appointment as Trustee by a successor Trustee, that successor Trustee shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Trustee under this Agreement, and the retiring
Trustee shall thereupon be discharged from its duties and obligations under this
Agreement. After any retiring Trustee's resignation, the provisions of this
Agreement shall inure to its benefit as to any actions taken or omitted to be
taken by it under this Agreement while it was Trustee.
SECTION 16. Trustee May Perform; Trustee Appointed Attorney-in-Fact.
If any Pledgor shall fail to do any act or thing that it has covenanted to do
hereunder or if any warranty on the part of such Pledgor contained herein shall
be breached. Trustee or any Secured Party may (but shall not be obligated to) do
the same or cause it to be done or remedy any such breach, and may expend funds
for such purpose. Any and all amounts so expended by Trustee or such Secured
Party shall be paid by such Pledgor within five Business Days after demand
therefor, with interest at the Default Rate during the period from and including
the date on which such funds were so expended to the date of repayment. Each
Pledgor's obligations under this Section 16 shall survive the termination of
this Agreement and the discharge of such Pledgor's other obligations under this
Agreement. Each
<PAGE>
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Pledgor hereby appoints Trustee its attorney-in-fact with an interest, with full
authority in the place and stead of such Pledgor and in the name of such
Pledgor, or otherwise, from time to time in Trustee's discretion to take any
action and to execute any instrument consistent with the terms of this Agreement
and the Indenture which the Trustee may deem necessary or advisable to
accomplish the purposes of this Agreement. The foregoing grant of authority is a
power of attorney coupled with an interest and such appointment shall be
irrevocable for the term of this Agreement. Each Pledgor hereby ratifies all
that such attorney shall lawfully do or cause to be done by virtue and in
accordance with the terms hereof.
SECTION 17. Notices. Unless otherwise provided herein, any notice or
other communication herein required or permitted to be given shall be given in
the manner at the address set forth in the Indenture, or as to any party at such
other address as shall be designated by such party in a written notice to the
other party complying as to delivery with the terms of this Section 17. All such
notices and other communications shall be deemed to have been given when
delivered in person, or received by telecopy or telex; or one (1) Business Day
after delivery to the office of such overnight courier service; or five (5)
Business Days after deposit in the United States mail, registered or certified,
with postage prepaid and properly addressed; provided, however, that notices to
Trustee shall not be effective until received by Trustee.
SECTION 18. Continuing Security Interest; Assignment. This Agreement
shall create a continuing security interest in the Pledged Collateral and shall
(i) be binding upon each Pledgor, its successors and assigns, and (ii) inure,
together with the rights and remedies of Trustee hereunder, to the benefit of
Trustee and the other Secured Parties and each of their respective successors,
transferees and assigns; no other Person (including, without limitation, any
other creditor of Pledgor) shall have any interest herein or any right or
benefit with respect hereto. Without limiting the generality of the foregoing
clause (ii), any Secured Party may assign or otherwise transfer any Note held by
it secured by this Agreement to any other Person, and such other Person shall
thereupon become vested with all the benefits in respect thereof granted to such
Secured Party, herein or otherwise, subject however, to the provisions of the
Indenture.
SECTION 19. GOVERNING LAW; TERMS. THIS AGREEMENT SHALL BE GOVERNED
BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK, WITHOUT
<PAGE>
-17-
REGARD TO PRINCIPLES OF CONFLICTS OF LAWS, EXCEPT TO THE EXTENT THAT THE
VALIDITY OR PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES
HEREUNDER, IN RESPECT OF ANY PARTICULAR PROPERTY ARE GOVERNED BY THE LAWS OF A
JURISDICTION OTHER THAN THE STATE OF NEW YORK.
SECTION 20. CONSENT TO JURISDICTION AND SERVICE OF PROCESS. ALL
JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY PLEDGOR WITH RESPECT TO THIS AGREEMENT
MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE
STATE OF NEW YORK AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT EACH PLEDGOR
ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND
UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS, AND
IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION
WITH THIS AGREEMENT. EACH PLEDGOR DESIGNATES AND APPOINTS CT CORPORATION SYSTEM,
WITH AN ADDRESS AT 1633 BROADWAY, NEW YORK, NEW YORK 10019 AND SUCH OTHER
PERSONS AS MAY HEREAFTER BE SELECTED BY SUCH PLEDGOR IRREVOCABLY AGREEING IN
WRITING TO SO SERVE, AS ITS AGENT TO RECEIVE ON ITS BEHALF, SERVICE OF ALL
PROCESS IN ANY SUCH PROCEEDINGS IN ANY SUCH COURT, SUCH SERVICE BEING HEREBY
ACKNOWLEDGED BY SUCH PLEDGOR TO BE EFFECTIVE AND BINDING SERVICE IN EVERY
RESPECT. A COPY OF SUCH PROCESS SO SERVED SHALL BE MAILED BY REGISTERED MAIL TO
SUCH PLEDGOR AT ITS ADDRESS PROVIDED FOR IN SECTION 17 HEREOF EXCEPT THAT UNLESS
OTHERWISE PROVIDED BY APPLICABLE LAW, ANY FAILURE TO MAIL SUCH COPY SHALL NOT
AFFECT THE VALIDITY OF SERVICE OF PROCESS. IF ANY AGENT APPOINTED BY ANY PLEDGOR
REFUSES TO RECEIVE AND FORWARD SUCH SERVICE, SUCH PLEDGOR HEREBY AGREES THAT
SERVICE UPON IT BY MAIL SHALL CONSTITUTE SUFFICIENT NOTICE. NOTHING HEREIN SHALL
AFFECT THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL
LIMIT THE RIGHT OF TRUSTEE TO BRING PROCEEDINGS AGAINST SUCH PLEDGOR IN THE
COURTS OF ANY OTHER JURISDICTION.
SECTION 21. Severability of Provisions. Any provision of this
Agreement which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.
SECTION 22. Execution in Counterparts. This Agreement and any
amendments, waivers, consents or supplements hereto may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed to be an original,
but all
<PAGE>
-18-
such counterparts together shall constitute one and the same Agreement.
SECTION 23. Headings. The Section headings used in this Agreement
are for convenience of reference only and shall not affect the construction of
this Agreement.
SECTION 24. Obligations Absolute. All obligations of each Pledgor
hereunder shall be absolute and unconditional irrespective of:
(i) any bankruptcy, insolvency, reorganization, arrangement, readjustment,
composition, liquidation or the like of any Pledgor;
(ii) any lack of validity or enforceability of the Indenture or the Notes,
or any other agreement or instrument relating thereto;
(iii) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Secured Obligations, or any other amendment or
waiver of or any consent to any departure from the Indenture or the Notes, or
any other agreement or instrument relating thereto;
(iv) any exchange, release or non-perfection of any other collateral, or
any release or amendment or waiver of or consent to any departure from any
guarantee, for all or any of the Secured Obligations;
(v) any exercise or non-exercise, or any waiver of any right, remedy,
power or privilege under or in respect of this Agreement, the Indenture, the
Notes or the Guarantee except as specifically set forth in a waiver granted
pursuant to the provisions of the Indenture; or
(vi) any other circumstances which might otherwise constitute a defense
available to, or a discharge of, any Pledgor.
SECTION 25. Limitation on Interest Payable. It is the intention of
the parties to conform strictly to the usury laws, whether state or federal,
that are applicable to the transaction of which this Agreement is a part. All
agreements between each Pledgor and Trustee, whether now existing or hereafter
arising and whether oral or written, are hereby expressly limited so that in no
contingency or event whatsoever shall the amount paid or agreed to be paid by
such Pledgor for the use, forbearance or
<PAGE>
-19-
detention of the money to be loaned or advanced under the Indenture or any
related document, or for the payment or performance of any covenant or
obligation contained herein or in the Indenture, exceed the maximum amount
permissible under applicable federal or state usury laws. If under any
circumstances whatsoever fulfillment of any such provision, at the time
performance of such provision shall be due, shall involve exceeding the limit of
validity prescribed by law, then the obligation to be fulfilled shall be reduced
to the limit of such validity. If under any circumstances any Pledgor shall have
paid an amount deemed interest by applicable law, which would exceed the highest
lawful rate, such amount that would be excessive interest under applicable usury
laws shall be applied to the reduction of the principal amount owing in respect
of the Secured Obligations and not to the payment of interest, or if such
excessive interest exceeds the unpaid balance of principal and any other amounts
due hereunder, the excess shall be refunded to such Pledgor by the holders of
the Notes. All sums paid or agreed to be paid for the use, forbearance or
detention of the principal under any extension of credit or advancement of funds
by Marine Midland Bank, as trustee, shall, to the extent permitted by applicable
law, and to the extent necessary to preclude exceeding the limit of validity
prescribed by law, be amortized, prorated, allocated and spread from the date of
this Agreement until payment in full of the Secured Obligations so that the
actual rate of interest on account of such principal amounts is uniform
throughout the term hereof.
<PAGE>
IN WITNESS WHEREOF, each Pledgor has caused this Agreement to be executed
and delivered by its duly authorized officer as of the date first above
written.
PLEDGORS:
STATIA TERMINALS INTERNATIONAL N.V.
By: /s/ David B. Pittaway
---------------------------------------
Name: David B. Pittaway
Title: Attorney-in-Fact
STATIA DELAWARE HOLDCO II, INC.
By: /s/ David B. Pittaway
---------------------------------------
Name: David B. Pittaway
Title: President
STATIA TERMINALS DELAWARE, INC.
By: /s/ David B. Pittaway
---------------------------------------
Name: David B. Pittaway
Title: Attorney-in-Fact
STATIA TERMINALS, INC.
By: /s/ James G. Cameron
---------------------------------------
Name: James G. Cameron
Title: Chairman of the Board
and President
W.P. COMPANY, INC.
By: /s/ James G. Cameron
---------------------------------------
Name: James G. Cameron
Title: Vice President Finance and
Secretary
<PAGE>
MARINE MIDLAND BANK, as Trustee
By: /s/ Eileen M. Hughes
---------------------------------------
Name: Eileen M. Hughes
Title: Assistant Vice President
<PAGE>
Schedule A
Pledged Shares
PERCENTAGE
OF ALL
CLASS CERTI- CAPITAL OR
PLEDGOR OF PAR FICATE NUMBER OTHER EQUITY
OF ISSUER ISSUER STOCK VALUE NO(S). OF SHARES INTERESTS
- --------- ------ ----- ----- ------ --------- ------------
Statia Statia Common $.01 1 1,000 100%
Terminals Delaware
International Holdco II,
N.V. Inc.
Statia Common $.01 1 1,000 100%
Terminals
Delaware,
Inc.
Statia Statia Common $1.00 10 1,000 100%
Terminals Terminals,
Delaware, Inc.
Inc.
W.P. Company, Seven Seas Common $1.00 1 1,000 100%
Inc. Steamship
Company,
Inc.
Statia Statia Common $.01 3,4 1,000,000 100%
Delaware Terminals
Holdco II, Southwest,
Inc. Inc.
<PAGE>
EXHIBIT I
PLEDGE AMENDMENT
This Pledge Amendment, dated ______________, is delivered pursuant
to Section 6 of the Agreement referred to below. The undersigned hereby agrees
that this Pledge Amendment may be attached to the United States Securities
Pledge and Security Agreement, dated as of ____________________, between the
undersigned and _______________________________________ (the "Agreement";
capitalized terms used herein and not defined have the meanings ascribed to them
in the Agreement) and that the Pledged Shares listed on this Pledge Amendment
shall be deemed to be and shall become part of the Pledged Collateral and shall
secure all Secured Obligations.
________________________________,
as Pledgor
By:______________________________
Name:
Title:
<PAGE>
Loan and Security Agreement
by and between
CONGRESS FINANCIAL CORPORATION (FLORIDA)
as Lender
and
STATIA TERMINALS N.V.
as Borrower
Dated: November 27, 1996
<PAGE>
TABLE OF CONTENTS
Page
----
SECTION 1. DEFINITIONS.................................................... 1
SECTION 2. CREDIT FACILITIES.............................................. 7
2.1 Revolving Loans.......................................... 7
2.2 Letter of Credit Accommodations.......................... 8
2.3 Availability Reserves.................................... 10
SECTION 3. INTEREST AND FEES.............................................. 11
3.1 Interest................................................. 11
3.2 Closing Fee.............................................. 11
3.3 Servicing Fee............................................ 11
3.4 Unused Line Fee.......................................... 11
SECTION 4. CONDITIONS PRECEDENT........................................... 12
4.1 Conditions Precedent to Initial Loans and
Letter of Credit Accommodations........................ 12
4.2 Conditions Precedent to All Loans and
Letter of Credit Accommodations........................ 13
SECTION 5. GRANT OF SECURITY INTEREST..................................... 13
SECTION 6. COLLECTION AND ADMINISTRATION.................................. 14
6.1 Borrower's Loan Account.................................. 14
6.2 Statements............................................... 14
6.3 Collection of Accounts................................... 15
6.4 Payments................................................. 16
6.5 Authorization to Make Loans.............................. 16
6.6 Use of Proceeds.......................................... 16
SECTION 7. COLLATERAL REPORTING AND COVENANTS............................. 17
7.1 Collateral Reporting..................................... 17
7.2 Accounts Covenants....................................... 17
7.3 Inventory Covenants...................................... 19
7.4 Equipment Covenants...................................... 19
7.5 Power of Attorney........................................ 19
7.6 Right to Cure............................................ 20
7.7 Access to Premises....................................... 20
SECTION 8. REPRESENTATIONS AND WARRANTIES................................. 21
8.1 Corporate Existence, Power and Authority; Subsidiaries... 21
8.2 Financial Statements; No Material Adverse Change......... 21
8.3 Chief Executive Office; Collateral Locations............. 21
8.4 Priority of Liens; Title to Properties................... 21
8.5 Tax Returns.............................................. 22
8.6 Litigation............................................... 22
8.7 Compliance with Other Agreements and Applicable Laws..... 22
8.8 Bank Accounts............................................ 22
(i)
<PAGE>
8.9 Accuracy and Completeness of Information................. 22
8.10 Environmental Compliance................................. 23
8.11 Survival of Warranties; Cumulative....................... 23
SECTION 9. AFFIRMATIVE AND NEGATIVE COVENANTS............................. 23
9.1 Maintenance of Existence................................. 23
9.2 New Collateral Locations................................. 24
9.3 Compliance with Laws, Regulations, Etc................... 24
9.4 Payment of Taxes and Claims.............................. 25
9.5 Insurance................................................ 25
9.6 Financial Statements and Other Information............... 26
9.7 Sale of Assets, Consolidation, Merger, Dissolution, Etc.. 27
9.8 Encumbrances............................................. 27
9.9 Indebtedness............................................. 28
9.10 Loans, Investments, Guarantees, Etc...................... 28
9.11 Dividends and Redemptions................................ 29
9.12 Transactions with Affiliates............................. 29
9.13 Additional Bank Accounts................................. 30
9.14 [Intentionally Omitted].................................. 30
9.15 [Intentionally Omitted].................................. 30
9.16 Costs and Expenses....................................... 30
9.17 Further Assurances....................................... 30
SECTION 10. EVENTS OF DEFAULT AND REMEDIES................................. 31
10.1 Events of Default........................................ 31
10.2 Remedies................................................. 33
SECTION 11. JURY TRIAL WAIVER; OTHER WAIVERS AND CONSENTS;
GOVERNING LAW.................................................. 34
11.1 Governing Law; Choice of Forum;
Service of Process; Jury Trial Waiver.................. 34
11.2 Waiver of Notices........................................ 35
11.3 Amendments and Waivers................................... 35
11.4 Waiver of Counterclaims.................................. 36
11.5 Indemnification.......................................... 36
SECTION 12. TERM OF AGREEMENT; MISCELLANEOUS............................... 36
12.1 Term..................................................... 36
12.2 Notices.................................................. 38
12.3 Partial Invalidity....................................... 38
12.4 Successors............................................... 38
12.5 Entire Agreement......................................... 38
(ii)
<PAGE>
INDEX TO
EXHIBITS AND SCHEDULES
Exhibit A Information Certificate
Schedule 8.4 Existing Liens
Schedule 8.8 Bank Accounts
Schedule 8.10 Environmental Compliance
Schedule 9.9 Existing Indebtedness
Schedule 9.10 Existing Loans, Advances and Guarantees
(i)
<PAGE>
LOAN AND SECURITY AGREEMENT
This Loan and Security Agreement dated November 27, 1996, is entered into
by and between CONGRESS FINANCIAL CORPORATION (FLORIDA), a Florida corporation
("Lender") and STATIA TERMINALS N.V., a Netherlands Antilles corporation
("Borrower").
W I T N E S S E T H:
WHEREAS, Borrower has requested that Lender enter into certain financing
arrangements with Borrower pursuant to which Lender may make loans and provide
other financial accommodations to Borrower; and
WHEREAS, Lender is willing to make such loans and provide such financial
accommodations on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual conditions and agreements
set forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
SECTION 1. DEFINITIONS
All terms used herein which are defined in Article 1 or Article 9 of the
Uniform Commercial Code shall have the meanings given therein unless otherwise
defined in this Agreement. All references to the plural herein shall also mean
the singular and to the singular shall also mean the plural unless the context
otherwise requires. All references to Borrower and Lender pursuant to the
definitions set forth in the recitals hereto, or to any other person herein,
shall include their respective successors and assigns. The words "hereof",
"herein", "hereunder", "this Agreement" and words of similar import when used in
this Agreement shall refer to this Agreement as a whole and not any particular
provision of this Agreement and as this Agreement now exists or may hereafter be
amended, modified, supplemented, extended, renewed, restated or replaced. The
word "including" when used in this Agreement shall mean "including, without
limitation". An Event of Default shall exist or continue or be continuing until
such Event of Default is waived in accordance with Section 11.3 or is cured in a
manner satisfactory to Lender. Any accounting term used herein unless otherwise
defined in this Agreement shall have the meanings customarily given to such term
in accordance with GAAP. For purposes of this Agreement, the following terms
shall have the respective meanings given to them below:
1.1 "Access Agreement" shall mean that certain Access, Use and
Intercreditor Agreement, dated the date hereof, by and among Lender, Congress
Financial Corporation (Canada) and Trustee.
1.2 "Accounts" shall mean all present and future rights of Borrower and
Seven Seas to payment for goods sold or leased or for services rendered, which
are not evidenced by instruments or chattel paper, and whether or not earned by
performance.
<PAGE>
1.3 "Availability Reserves" shall mean, as of any date of determination,
such amounts as Lender may from time to time establish and revise in good faith
reducing the amount of Revolving Loans and Letter of Credit Accommodations which
would otherwise be available to Borrower under the lending formula(s) provided
for herein: (a) to reflect events, conditions, contingencies or risks which, as
determined by Lender in good faith, do or may affect either (i) the Collateral
or any other property which is security for the Obligations or its value, (ii)
the assets, business or prospects of Borrower or any Obligor or (iii) the
security interests and other rights of Lender in the Collateral (including the
enforceability, perfection and priority thereof) or (b) to reflect Lender's good
faith belief that any collateral report or financial information furnished by or
on behalf of Borrower or any Obligor to Lender is or may have been incomplete,
inaccurate or misleading in any material respect or (c) to reflect outstanding
Letter of Credit Accommodations as provided in Section 2.2 hereof or (d) in
respect of any state of facts which Lender determines in good faith constitutes
an Event of Default or may, with notice or passage of time or both, constitute
an Event of Default.
1.4 "Blocked Accounts" shall have the meaning set forth in Section 6.3
hereof.
1.5 "Canadian Loan Agreement" shall mean the Loan Agreement, dated the
date hereof, among Statia Canada and Congress Financial Corporation (Canada).
1.6 "Collateral" shall have the meaning set forth in Section 5 hereof.
1.7 "Eligible Accounts" shall mean Accounts created by Borrower or Seven
Seas which are and continue to be acceptable to Lender based on the criteria set
forth below. In general, Accounts shall be Eligible Accounts if:
(a) such Accounts arise from the actual and bona fide sale and
delivery of goods by Borrower or rendition of services by Borrower in the
ordinary course of its business which transactions are completed in accordance
with the terms and provisions contained in any documents related thereto;
(b) such Accounts are not unpaid more than ninety (90) days after
the date of the original invoice for them;
(c) such Accounts comply with the terms and conditions contained in
Section 7.2(c) of this Agreement;
(d) such Accounts do not arise from sales which are on terms under
which payment by the account debtor is conditional or contingent;
(e) such Accounts do not consist of progress billings, bill and hold
invoices or retainage invoices, except as to bill and hold invoices, if Lender
shall have received an agreement in writing from the account debtor, in form and
substance satisfactory to Lender, confirming the unconditional obligation of the
account debtor to take the goods related thereto and pay such invoice and except
as to progress billings to the extent that the Borrower has performed the
services represented by the Account and the Borrower has no further obligations
in respect thereof;
2
<PAGE>
(f) the account debtor with respect to such Accounts has not
asserted a counterclaim, defense or dispute and does not have, and does not
engage in transactions which may give rise to, any right of setoff against such
Accounts (but the portion of the Accounts of such account debtor in excess of
the amount at any time and from time to time owed by Borrower to such account
debtor or claimed owed by such account debtor may be deemed Eligible Accounts);
(g) there are no facts, events or occurrences which would impair the
validity, enforceability or collectability of such Accounts or reduce the amount
payable or delay payment thereunder;
(h) such Accounts are subject to the first priority and valid
security interest and lien of Lender and any goods giving rise thereto are not,
and were not at the time of the sale thereof, subject to any liens except those
permitted in this Agreement;
(i) neither the account debtor nor any officer or employee of the
account debtor with respect to such Accounts is an officer, employee or agent of
or affiliated with Borrower directly or indirectly by virtue of family
membership, ownership, control, management or otherwise;
(j) there are no proceedings or actions which are threatened or
pending against the account debtors with respect to such Accounts which might
result in any material adverse change in any such account debtor's financial
condition;
(k) such Accounts of a single account debtor or its affiliates do
not constitute more than twenty (20%) percent of the aggregate amount of all
otherwise Eligible Accounts under this Agreement and the Canadian Loan Agreement
(but the portion of the Accounts not in excess of such percentage may be deemed
Eligible Accounts);
(l) such Accounts are not owed by an account debtor who has Accounts
unpaid more than ninety (90) days after the date of the original invoice for
them which constitute more than fifty (50%) percent of the total Accounts of
such account debtor;
(m) such Accounts are owed by account debtors whose total
indebtedness to Borrower does not exceed the credit limit with respect to such
account debtors as mutually agreed upon by Lender and Borrower from time to time
(but the portion of the Accounts not in excess of such credit limit may be
deemed Eligible Accounts); and
(n) such Accounts are owed by account debtors deemed creditworthy at
all times by Lender, as reasonably determined by Lender.
General criteria for Eligible Accounts may be established and revised from time
to time by Lender in good faith. Any Accounts which are not Eligible Accounts
shall nevertheless be part of the Collateral.
1.8 "Eligible Inventory" shall mean Inventory consisting of oil, fuel and
related petroleum products which could be sold in the ordinary course of the
business of Borrower ("finished goods") which are acceptable to Lender based on
the criteria set forth below. In general, Eligible Inventory
3
<PAGE>
shall not include (a) work-in-process; (b) components which are not part of
finished goods; (c) spare parts for equipment; (d) packaging and shipping
materials; (e) supplies used or consumed in Borrower's business; (f) Inventory
at premises other than those owned and controlled by Borrower, including,
without limitation, Inventory stored in tanks owned or controlled by Persons
other than Borrower or Inventory which is in transit to Borrower, except if
Lender shall have received an agreement in writing from the person in possession
of such Inventory and/or the owner or operator of such premises in form and
substance satisfactory to Lender acknowledging Lender's first priority security
interest in the Inventory, waiving security interests and claims by such person
against the Inventory and permitting Lender access to such Inventory, and the
right to remain on the premises where such Inventory is located so as to
exercise Lender's rights and remedies and otherwise deal with the Collateral;
(g) Inventory subject to a security interest or lien in favor of any person
other than Lender except those permitted in this Agreement; (h) bill and hold
goods; (i) unserviceable, obsolete or slow moving Inventory; (j) Inventory which
is not subject to the first priority, valid and perfected security interest of
Lender; (k) returned, damaged and/or defective Inventory; (l) Inventory
purchased or sold on consignment and (m) Inventory which is subject to any
throughput contracts and storage contracts. General criteria for Eligible
Inventory may be established and revised from time to time by Lender in good
faith. Any Inventory which is not Eligible Inventory shall nevertheless be part
of the Collateral.
1.9 "Environmental Laws" shall mean all federal, state, district, local
and foreign laws, rules, regulations, ordinances, and consent decrees relating
to health, safety, hazardous substances, pollution and environmental matters, as
now or at any time hereafter in effect, applicable to Borrower's business and
facilities (whether or not owned by it), including laws relating to emissions,
discharges, releases or threatened releases of pollutants, contamination,
chemicals, or hazardous, toxic or dangerous substances, materials or wastes into
the environment (including, without limitation, ambient air, surface water,
ground water, land surface or subsurface strata) or otherwise relating to the
generation, manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of pollutants, contaminants, chemicals, or
hazardous, toxic or dangerous substances, materials or wastes.
1.10 "Equipment" shall mean all of Borrower's now owned and hereafter
acquired equipment (exclusive of the Borrower's vehicles and computers),
machinery, fixtures, all attachments, accessions and property now or hereafter
affixed thereto or used in connection therewith, and substitutions and
replacements thereof, wherever located.
1.11 "Event of Default" shall mean the occurrence or existence of any
event or condition described in Section 10.1 hereof.
1.12 "Excess Availability" shall mean the amount, as determined by Lender,
calculated at any time, equal to: (a) the lesser of (i) the gross amount of the
Revolving Loans which would be available to Borrower pursuant to Section 2.1
from time to time if no Loans or Letters of Credit Accommodations were
outstanding and (ii) the Maximum Credit, minus (b) the sum of: (i) the amount of
all then outstanding and unpaid Obligations, plus (ii) the aggregate amount of
all trade payables of Borrower which are more than sixty (60) days past due as
of such time (other than trade payables which the Borrower is contesting in good
faith).
4
<PAGE>
1.13 "Financing Agreements" shall mean, collectively, this Agreement and
all notes, guarantees, security agreements and other agreements, documents and
instruments now or at any time hereafter executed and/or delivered by Borrower
or any Obligor in connection with this Agreement, as the same now exist or may
hereafter be amended, modified, supplemented, extended, renewed, restated or
replaced.
1.14 "First Mortgage Notes" shall mean the $135,000,000 11 3/4% First
Mortgage Notes issued by Statia Terminals International N.V. and Statia
Terminals Canada Incorporated.
1.15 "GAAP" shall mean generally accepted accounting principles in the
United States of America as in effect from time to time as set forth in the
opinions and pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and the statements and pronouncements
of the Financial Accounting Standards Board which are applicable to the
circumstances as of the date of determination consistently applied, except that,
for purposes of Sections 9.14 and 9.15 hereof, GAAP shall be determined on the
basis of such principles in effect on the date hereof and consistent with those
used in the preparation of the audited financial statements delivered to Lender
prior to the date hereof.
1.16 "Hazardous Materials" shall mean any hazardous, toxic or dangerous
substances, materials and wastes, including, without limitation, hydrocarbons
(including naturally occurring or man-made petroleum and hydrocarbons),
flammable explosives, asbestos, urea formaldehyde insulation, radioactive
materials, biological substances, polychlorinated biphenyls, pesticides,
herbicides and any other kind and/or type of pollutants or contaminants
(including, without limitation, materials which include hazardous constituents),
sewage, sludge, industrial slag, solvents and/or any other similar substances,
materials, or wastes and including any other substances, materials or wastes
that are or become regulated under any Environmental Law (including, without
limitation any that are or become classified as hazardous or toxic under any
Environmental Law).
1.17 "Indenture" shall mean the Indenture, dated as of November 27, 1996,
by and among Statia Terminals International N.V. and Statia Terminals Canada,
Incorporated, as Issuers, Statia Terminals Corporation N.V., Statia Terminals
Delaware, Inc., Statia Terminals, Inc., Statia Terminals N.V., Saba Trustcompany
N.V., Bicen Development Corporation N.V., Statia Terminals Southwest, Inc., W.P.
Company, Inc., Seven Seas Steamship Company, Inc., Seven Seas Steamship Company
(Sint Eustatius) N.V., Point Tupper Marine Services Limited, Statia Laboratory
Services, N.V. and Statia Tugs N.V., as Subsidiary Guarantors, and Marine
Midland Bank, as Trustee.
1.18 "Information Certificate" shall mean the Information Certificate of
Borrower constituting Exhibit A hereto containing material information with
respect to Borrower, its business and assets provided by or on behalf of
Borrower to Lender in connection with the preparation of this Agreement and the
other Financing Agreements and the financing arrangements provided for herein.
1.19 "Inventory" shall mean all of Borrower's now owned and hereafter
existing or acquired raw materials, work-in-process, finished goods and
semi-finished inventory or goods of any kind, nature or description, held for
sale, exchange or lease or furnished or to be furnished under a contract of
service or an exchange arrangement or used or consumed in the business or in
connection with the manufacturing, package, shipping, advertising, selling or
finishing of such goods, and all right, title
5
<PAGE>
and interest therein and thereto, and the proceeds (including, without
limitation, all proceeds of insurance with respect thereto, including the
proceeds of any applicable casualty insurance to the extent relating thereto)
and products of all of the foregoing, and all other inventory of whatsoever kind
or nature, wherever located.
1.20 "Letter of Credit Accommodations" shall mean the letters of credit,
merchandise purchase or other guaranties which are from time to time either (a)
issued or opened by Lender for the account of Borrower or any Obligor or (b)
with respect to which Lender has agreed to indemnify the issuer with respect to,
or guaranteed to the issuer, the performance by Borrower of its obligations to
such issuer.
1.21 "Loans" shall mean the Revolving Loans.
1.22 "Maximum Credit" shall mean the amount of $12,500,000.
1.23 "Net Amount of Eligible Accounts" shall mean the gross amount of
Eligible Accounts less (a) sales, excise or similar taxes included in the amount
thereof and (b) returns, discounts, claims, credits and allowances of any nature
at any time issued, owing, granted, outstanding, available or claimed with
respect thereto.
1.24 "Noteholder Collateral" shall have the meaning as set forth in the
Access Agreement.
1.25 "Obligations" shall mean any and all Revolving Loans, Letter of
Credit Accommodations and all other obligations, liabilities and indebtedness of
every kind, nature and description owing by Borrower to Lender and/or its
affiliates, including principal, interest, charges, fees, costs and expenses,
however evidenced, whether as principal, surety, endorser, guarantor or
otherwise, whether arising under this Agreement or the other Financing
Agreements, or the transactions arising hereunder or thereunder, whether now
existing or hereafter arising, whether arising before, during or after the
initial or any renewal term of this Agreement or after the commencement of any
case with respect to Borrower under the United States Bankruptcy Code or any
similar statute (including the payment of interest and other amounts which would
accrue and become due but for the commencement of such case, whether or not such
amounts are allowed or allowable in whole or in part in such case), whether
direct or indirect, absolute or contingent, joint or several, due or not due,
primary or secondary, liquidated or unliquidated, secured or unsecured, and
however acquired by Lender in connection with or arising under the Financing
Agreements or any of the transaction arising thereunder or related thereto.
1.26 "Obligor" shall mean any guarantor, endorser, acceptor, surety or
other person liable on or with respect to the Obligations or who is the owner of
any property which is security for the Obligations, other than Borrower.
1.27 "Payment Account" shall have the meaning set forth in Section 6.3
hereof.
1.28 "Person" or "person" shall mean any individual, sole proprietorship,
partnership, corporation (including any corporation which elects subchapter S
status under the Internal Revenue Code of 1986, as amended), limited liability
company, limited liability partnership, business trust,
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unincorporated association, joint stock corporation, trust, joint venture or
other entity or any government or any agency or instrumentality or political
subdivision thereof.
1.29 "Prime Rate" shall mean the rate from time to time publicly announced
by CoreStates Bank, N.A., or its successors, at its office in Philadelphia,
Pennsylvania, as its prime rate, whether or not such announced rate is the best
rate available at such bank.
1.30 "Records" shall mean all of Borrower's present and future books of
account of every kind or nature, purchase and sale agreements, invoices, ledger
cards, bills of lading and other shipping evidence, statements, correspondence,
memoranda, credit files and other data, property and general intangibles to the
extent relating to the Collateral or any account debtor, together with the
tapes, disks, diskettes and other data and software storage media and devices,
file cabinets or containers in or on which the foregoing are stored (including
any rights of Borrower with respect to the foregoing maintained with or by any
other person).
1.31 "Revolving Loans" shall mean the loans now or hereafter made by
Lender to or for the benefit of Borrower on a revolving basis (involving
advances, repayments and readvances) as set forth in Section 2.1 hereof.
1.32 "Seven Seas" shall mean Seven Seas Steamship Company, Inc., and its
successors and assigns.
1.33 "Statia Canada" shall mean collectively, Statia Terminals Canada,
Incorporated, a Nova Scotia corporation, and Point Tupper Marine Services
Limited, a Nova Scotia corporation, and their respective successors and assigns.
1.34 "Trustee" shall mean Marine Midland Bank, as Trustee under the
Indenture.
1.35 "Value" shall mean, as determined by Lender in good faith, with
respect to Inventory, the lower of (a) cost computed on an average cost method
in accordance with GAAP or (b) market value.
SECTION 2. CREDIT FACILITIES
2.1 Revolving Loans.
(a) Subject to and upon the terms and conditions contained herein,
Lender agrees to make Revolving Loans to Borrower from time to time in amounts
requested by Borrower up to the amount equal to the sum of:
(i) eighty (80%) percent of the Net Amount of Eligible
Accounts, plus
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(ii) the lesser of: (A) the sum of fifty (50%) percent of the
Value of Eligible Inventory consisting of finished goods
and (B) $2,000,000, less
(iii) any Availability Reserves.
(b) Lender may, in its discretion, from time to time, upon not less
than five (5) days prior notice to Borrower, (i) reduce the lending formula with
respect to Eligible Accounts to the extent that Lender determines in good faith
that: (A) the dilution with respect to the Accounts for any period (based on the
ratio of (1) the aggregate amount of reductions in Accounts other than as a
result of payments in cash to (2) the aggregate amount of total sales) has
increased in any material respect or may be reasonably anticipated to increase
in any material respect above historical levels, or (B) the general
creditworthiness of account debtors has declined or (ii) reduce the lending
formula(s) with respect to Eligible Inventory to the extent that Lender
determines that: (A) the number of days of the turnover of the Inventory for any
period has changed from its historical pattern in any material respect or (B)
the liquidation value of the Eligible Inventory, or any category thereof, has
decreased, or (C) the nature and quality of the Inventory has deteriorated in
any material respect. In determining whether to reduce the lending formula(s),
Lender may consider events, conditions, contingencies or risks which are also
considered in determining Eligible Accounts, Eligible Inventory or in
establishing Availability Reserves.
(c) Except in Lender's discretion, the aggregate amount of the Loans
and the Letter of Credit Accommodations outstanding at any time shall not exceed
the Maximum Credit. In the event that the outstanding amount of any component of
the Loans, or the aggregate amount of the outstanding Loans and Letter of Credit
Accommodations, exceed the amounts available under the lending formulas, the
sublimits for Letter of Credit Accommodations set forth in Section 2.2(d) or the
Maximum Credit, as applicable, such event shall not limit, waive or otherwise
affect any rights of Lender in that circumstance or on any future occasions and
Borrower shall, upon demand by Lender, which may be made at any time or from
time to time, immediately repay to Lender the entire amount of any such
excess(es) for which payment is demanded.
(d) For purposes only of applying the sublimit on Revolving Loans
based on Eligible Inventory pursuant to Section 2.1(a)(ii)(B), Lender may treat
the then undrawn amounts of outstanding Letter of Credit Accommodations for the
purpose of purchasing Eligible Inventory as Revolving Loans to the extent Lender
is in effect basing the issuance of the Letter of Credit Accommodations on the
Value of the Eligible Inventory being purchased with such Letter of Credit
Accommodations. In determining the actual amounts of such Letter of Credit
Accommodations to be so treated for purposes of the sublimit, the outstanding
Revolving Loans and Availability Reserves shall be attributed first to any
components of the lending formulas in Section 2.1(a) that are not subject to
such sublimit, before being attributed to the components of the lending formulas
subject to such sublimit.
2.2 Letter of Credit Accommodations.
(a) Subject to and upon the terms and conditions contained herein,
at the request of Borrower, Lender agrees to provide or arrange for Letter of
Credit Accommodations for the
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account of Borrower containing terms and conditions acceptable to Lender and the
issuer thereof. Any payments made by Lender to any issuer thereof and/or related
parties in connection with the Letter of Credit Accommodations shall constitute
additional Revolving Loans to Borrower pursuant to this Section 2.
(b) In addition to any administrative charges, fees or expenses
charged by any bank or issuer in connection with the Letter of Credit
Accommodations, Borrower shall pay to Lender a letter of credit fee at a rate
equal to one and three-quarters (1.75%) percent per annum on the daily
outstanding balance of the Letter of Credit Accommodations for the immediately
preceding month (or part thereof), payable in arrears as of the first day of
each succeeding month, except that Borrower shall pay to Lender such letter of
credit fee, at Lender's option, without notice, at a rate equal to three and
three-quarters (3.75%) percent per annum on such daily outstanding balance for:
(i) the period from and after the date of termination or non-renewal hereof
until Lender has received full and final payment of all Obligations
(notwithstanding entry of a judgment against Borrower) and (ii) the period from
and after the date of the occurrence of an Event of Default for so long as such
Event of Default is continuing as determined by Lender. Such letter of credit
fee shall be calculated on the basis of a three hundred sixty (360) day year and
actual days elapsed and the obligation of Borrower to pay such fee shall survive
the termination or non-renewal of this Agreement.
(c) No Letter of Credit Accommodations shall be available unless on
the date of the proposed issuance of any Letter of Credit Accommodations, the
Revolving Loans available to Borrower (subject to the Maximum Credit and any
Availability Reserves) are equal to or greater than: (i) if the proposed Letter
of Credit Accommodation is for the purpose of purchasing Eligible Inventory, the
sum of (A) the percentage equal to one hundred (100%) percent minus the then
applicable percentage set forth in Section 2.1(a)(ii)(A) above of the Value of
such Eligible Inventory, plus (B) freight, taxes, duty and other amounts which
Lender estimates must be paid in connection with such Inventory upon arrival and
for delivery to one of Borrower's locations for Eligible Inventory and (ii) if
the proposed Letter of Credit Accommodation is for any other purpose, an amount
equal to one hundred (100%) percent of the face amount thereof and all other
commitments and obligations made or incurred by Lender with respect thereto.
Effective on the issuance of each Letter of Credit Accommodation, an
Availability Reserve shall be established in the applicable amount set forth in
Section 2.2(c)(i) or Section 2.2(c)(ii).
(d) Except in Lender's discretion, the amount of all outstanding
Letter of Credit Accommodations and all other commitments and obligations made
or incurred by Lender in connection therewith shall not at any time exceed
$4,000,000. At any time an Event of Default exists or has occurred and is
continuing, upon Lender's request, Borrower will either furnish cash collateral
to secure the reimbursement obligations to the issuer in connection with any
Letter of Credit Accommodations or furnish cash collateral to Lender for the
Letter of Credit Accommodations, and in either case, the Revolving Loans
otherwise available to Borrower shall not be reduced as provided in Section
2.2(c) to the extent of such cash collateral.
(e) Borrower shall indemnify and hold Lender harmless from and
against any and all losses, claims, damages, liabilities, costs and expenses
which Lender may suffer or incur in connection with any Letter of Credit
Accommodations and any documents, drafts or acceptances relating thereto,
including any losses, claims, damages, liabilities, costs and expenses due to
any
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action taken by any issuer or correspondent with respect to any Letter of Credit
Accommodation. Borrower assumes all risks with respect to the acts or omissions
of the drawer under or beneficiary of any Letter of Credit Accommodation and for
such purposes the drawer or beneficiary shall be deemed Borrower's agent.
Borrower assumes all risks for, and agrees to pay, all foreign, Federal, State
and local taxes, duties and levies relating to any goods subject to any Letter
of Credit Accommodations or any documents, drafts or acceptances thereunder.
Borrower hereby releases and holds Lender harmless from and against any acts,
waivers, errors, delays or omissions, whether caused by Borrower, by any issuer
or correspondent or otherwise with respect to or relating to any Letter of
Credit Accommodation. The provisions of this Section 2.2(e) shall survive the
payment of Obligations and the termination or non-renewal of this Agreement.
(f) Nothing contained herein shall be deemed or construed to grant
Borrower any right or authority to pledge the credit of Lender in any manner.
Lender shall have no liability of any kind with respect to any Letter of Credit
Accommodation provided by an issuer other than Lender unless Lender has duly
executed and delivered to such issuer the application or a guarantee or
indemnification in writing with respect to such Letter of Credit Accommodation.
Borrower shall be bound by any interpretation made in good faith by Lender, or
any other issuer or correspondent under or in connection with any Letter of
Credit Accommodation or any documents, drafts or acceptances thereunder,
notwithstanding that such interpretation may be inconsistent with any
instructions of Borrower. Lender shall have the sole and exclusive right and
authority to, and Borrower shall not: (i) at any time an Event of Default exists
or has occurred and is continuing, (A) approve or resolve any questions of
non-compliance of documents, (B) give any instructions as to acceptance or
rejection of any documents or goods or (C) execute any and all applications for
steamship or airway guaranties, indemnities or delivery orders, and (ii) at all
times, (A) grant any extensions of the maturity of, time of payment for, or time
of presentation of, any drafts, acceptances, or documents, and (B) agree to any
amendments, renewals, extensions, modifications, changes or cancellations of any
of the terms or conditions of any of the applications, Letter of Credit
Accommodations, or documents, drafts or acceptances thereunder or any letters of
credit included in the Collateral. Lender may take such actions either in its
own name or in Borrower's name.
(g) Any rights, remedies, duties or obligations granted or
undertaken by Borrower to any issuer or correspondent in any application for any
Letter of Credit Accommodation, or any other agreement in favor of any issuer or
correspondent relating to any Letter of Credit Accommodation, shall be deemed to
have been granted or undertaken by Borrower to Lender. Any duties or obligations
undertaken by Lender to any issuer or correspondent in any application for any
Letter of Credit Accommodation, or any other agreement by Lender in favor of any
issuer or correspondent relating to any Letter of Credit Accommodation, shall be
deemed to have been undertaken by Borrower to Lender and to apply in all
respects to Borrower and Lender agrees that any such action taken shall be
consistent with Lender's customary practices with such issuers or correspondents
with respect thereto.
2.3 Availability Reserves. All Revolving Loans otherwise available to
Borrower pursuant to the lending formulas and subject to the Maximum Credit and
other applicable limits hereunder shall be subject to Lender's continuing right
to establish and revise Availability Reserves.
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SECTION 3. INTEREST AND FEES
3.1 Interest.
(a) Borrower shall pay to Lender interest on the outstanding
principal amount of the Loans at the rate of one-half (.50%) percent per annum
in excess of the Prime Rate, except that Borrower shall pay to Lender interest,
at Lender's option, without notice, at the rate of two and one-half (2.50%)
percent per annum in excess of the Prime Rate: (i) on the Loans for (A) the
period from and after the date of termination or non-renewal hereof until such
time as Lender has received full and final payment of all Loans (notwithstanding
entry of any judgment against Borrower), and (B) the period from and after the
date of the occurrence of an Event of Default for so long as such Event of
Default is continuing as determined by Lender and (ii) on the Revolving Loans at
any time outstanding in excess of the amounts available to Borrower under
Section 2 (whether or not such excess(es), arise or are made with or without
Lender's knowledge or consent and whether made before or after an Event of
Default). All interest accruing hereunder on and after the occurrence of any of
the events referred to in Sections 3.1(a)(i) or 3.1(a)(ii) above shall be
payable on demand.
(b) Interest shall be payable by Borrower to Lender monthly in
arrears not later than the first day of each calendar month and shall be
calculated on the basis of a three hundred sixty (360) day year and actual days
elapsed. The interest rate shall increase or decrease by an amount equal to each
increase or decrease in the Prime Rate effective on the first day of the month
after any change in such Prime Rate is announced. The increase or decrease shall
be based on the Prime Rate in effect on the last day of the month in which any
such change occurs. In no event shall charges constituting interest payable by
Borrower to Lender exceed the maximum amount or the rate permitted under any
applicable law or regulation, and if any part or provision of this Agreement is
in contravention of any such law or regulation, such part or provision shall be
deemed amended to conform thereto.
3.2 Closing Fee. Borrower shall pay to Lender as a closing fee the amount
of $75,000, which shall be fully earned as of and payable on the date hereof.
3.3 Servicing Fee. Borrower shall pay to Lender monthly a servicing fee in
an amount equal to $2,000 in respect of Lender's services for each month (or
part thereof) while this Agreement remains in effect and for so long thereafter
as any of the Obligations are outstanding, which fee shall be fully earned as of
and payable in advance on the date hereof and on the first day of each month
hereafter.
3.4 Unused Line Fee. Borrower shall pay to Lender monthly an unused line
fee at a rate equal to three-eighths (.375%) percent per annum calculated upon
the amount by which $9,000,000 exceeds the average daily principal balance of
the outstanding Revolving Loans and Letter of Credit Accommodations under this
Agreement during the immediately preceding month (or part thereof) while this
Agreement is in effect and for so long thereafter as any of the Obligations are
outstanding, which fee shall be payable on the first day of each month in
arrears.
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SECTION 4. CONDITIONS PRECEDENT
4.1 Conditions Precedent to Initial Loans and Letter of Credit
Accommodations. Each of the following is a condition precedent to Lender making
the initial Loans and providing the initial Letter of Credit Accommodations
hereunder:
(a) Lender shall have received evidence, in form and substance
satisfactory to Lender, that Lender has valid perfected and first priority
security interests in and liens upon the Collateral and any other property which
is intended to be security for the Obligations or the liability of any Obligor
in respect thereof, subject only to the security interests and liens permitted
herein or in the other Financing Agreements;
(b) all requisite corporate action and proceedings in connection
with this Agreement and the other Financing Agreements shall be satisfactory in
form and substance to Lender, and Lender shall have received all information and
copies of all documents, including records of requisite corporate action and
proceedings which Lender may have requested in connection therewith, such
documents where requested by Lender or its counsel to be certified by
appropriate corporate officers or governmental authorities;
(c) no material adverse change shall have occurred in the assets,
business or prospects of Borrower since the date of Lender's latest field
examination and no change or event shall have occurred which would impair the
ability of Borrower or any Obligor to perform its obligations hereunder or under
any of the other Financing Agreements to which it is a party or of Lender to
enforce the Obligations or realize upon the Collateral;
(d) Lender shall have completed a field review of the Records and
such other information with respect to the Collateral as Lender may require to
determine the amount of Revolving Loans available to Borrower, the results of
which shall be satisfactory to Lender, not more than three (3) business days
prior to the date hereof;
(e) Lender shall have received, in form and substance satisfactory
to Lender, all consents, waivers, acknowledgments and other agreements from
third persons which Lender may deem necessary or desirable in order to permit,
protect and perfect its security interests in and liens upon the Collateral or
to effectuate the provisions or purposes of this Agreement and the other
Financing Agreements, including acknowledgements by lessors, mortgagees and
warehousemen of Lender's security interests in the Collateral, waivers by such
persons of any security interests, liens or other claims by such persons to the
Collateral and agreements permitting Lender access to, and the right to remain
on, the premises to exercise its rights and remedies and otherwise deal with the
Collateral;
(f) Lender shall have received evidence of the closing of the
acquisition of the stock of Borrower directly or indirectly by Statia Terminals
Group N.V., including, without limitation, evidence that Statia Terminals
International N.V. and Statia Terminals Canada, Incorporated shall have
completed the issuance of the $135,000,000 11 3/4% First Mortgage Notes and
received not less than $35,000,000 in the aggregate as an equity capital
contribution;
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(g) Borrower shall have Excess Availability as determined by Lender,
as of the date hereof, in an amount equal to at least $2,000,000 after giving
effect to the initial Loans made or to be made and Letter of Credit
Accommodations issued or to be issued in connection with the initial
transactions hereunder;
(h) Lender shall have received evidence of insurance and loss payee
endorsements required hereunder and under the other Financing Agreements, in
form and substance satisfactory to Lender, and certificates of insurance
policies and/or endorsements naming Lender as loss payee;
(i) Lender shall have received, in form and substance satisfactory
to Lender, such opinion letters of counsel to Borrower with respect to the
Financing Agreements and such other matters as Lender may request; and
(j) the other Financing Agreements and all instruments and documents
hereunder and thereunder shall have been duly executed and delivered to Lender,
in form and substance satisfactory to Lender.
4.2 Conditions Precedent to All Loans and Letter of Credit Accommodations.
Each of the following is an additional condition precedent to Lender making
Loans and/or providing Letter of Credit Accommodations to Borrower, including
the initial Loans and Letter of Credit Accommodations and any future Loans and
Letter of Credit Accommodations:
(a) all representations and warranties contained herein and in the
other Financing Agreements shall be true and correct in all material respects
with the same effect as though such representations and warranties had been made
on and as of the date of the making of each such Loan or providing each such
Letter of Credit Accommodation and after giving effect thereto;
(b) no Event of Default and no event or condition which, with notice
or passage of time or both, would constitute an Event of Default, shall exist or
have occurred and be continuing on and as of the date of the making of such Loan
or providing each such Letter of Credit Accommodation and after giving effect
thereto; and
(c) Lender shall have received evidence, in form and substance
satisfactory to Lender, that (i) Borrower has notified all account debtors of
the security interests and liens of Lender in the Accounts and (ii) Borrower has
placed an appropriate notice acceptable to Lender on its invoices and in its
contracts entered after the date hereof providing notice of this financing.
SECTION 5. GRANT OF SECURITY INTEREST
To secure payment and performance of all Obligations, Borrower hereby
grants to Lender a continuing security interest in, a lien upon, and a right of
set off against, and hereby assigns to Lender as security, the following
property and interests in property of Borrower, whether now owned or hereafter
acquired or existing, and wherever located (collectively, the "Collateral"):
5.1 Accounts;
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5.2 all present and future contracts, contract rights, licenses and
general intangibles to the extent relating to the Accounts and the Inventory,
including, without limitation, contract rights which evidence or support
Accounts, choses in action or causes of actions or claims arising out of
Accounts or with respect to Inventory, agreements or arrangements with sales
agents, distributors or the like and/or consignees, warehouses or other third
persons in possession of Inventory, deposit accounts, letters of credit,
documents which evidence rights to Inventory, instruments (relating to Accounts
and Inventory), guaranty or warranty claims with respect to Accounts or
Inventory, and the proceeds of all of the foregoing;
5.3 all present and future chattel paper, documents, instruments and other
forms of payment relating to or evidencing the payment of money arising out of
the sale, lease or other disposition of Inventory or rendition of services in
the ordinary course of business; all monies and securities to the extent
relating to the foregoing and the proceeds thereof, now or hereafter held or
received or held by, or in transit to, Lender or any of its affiliates or
participants, whether for safekeeping, pledge, custody, transmission, collection
or otherwise; deposits (general or special) and balances to the extent relating
to the foregoing; all right, title and interest in, to and in respect of all
goods relating to, or which by sale have resulted in any of the foregoing,
including, without limitation, all goods described in invoices, documents,
contracts or instruments with respect to, or otherwise representing or
evidencing, any of same, including, without limitation, all returned, reclaimed
or repossessed goods; all right, title and interest, and all enforcement and
other rights, remedies, and security and liens, in, to and in respect of any of
the foregoing, including, without limitation, rights of stoppage in transit,
replevin, repossession, sequestration and reclamation and other rights and
remedies of an unpaid vendor, lienor or secured party, guaranties, or other
contracts of suretyship with respect thereto, or deposits or other security for
the obligation of any account debtor, credit and other insurance to the extent
relating to the foregoing;
5.4 Inventory;
5.5 Records; and
5.6 all products and proceeds of the foregoing, in any form, including
insurance proceeds and all claims against third parties for loss or damage to or
destruction of any or all of the foregoing.
SECTION 6. COLLECTION AND ADMINISTRATION
6.1 Borrower's Loan Account. Lender shall maintain one or more loan
account(s) on its books in which shall be recorded (a) all Loans, Letter of
Credit Accommodations and other Obligations and the Collateral, (b) all payments
made by or on behalf of Borrower and (c) all other appropriate debits and
credits as provided in this Agreement, including fees, charges, costs, expenses
and interest. All entries in the loan account(s) shall be made in accordance
with Lender's customary practices as in effect from time to time.
6.2 Statements. Lender shall render to Borrower each month a statement
setting forth the balance in the Borrower's loan account(s) maintained by Lender
for Borrower pursuant to the provisions of this Agreement, including principal,
interest, fees, costs and expenses. Each such
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statement shall be subject to subsequent adjustment by Lender but shall, absent
manifest errors or omissions, be considered correct and deemed accepted by
Borrower and conclusively binding upon Borrower as an account stated except to
the extent that Lender receives a written notice from Borrower of any specific
exceptions of Borrower thereto within thirty (30) days after the date such
statement has been mailed by Lender. Until such time as Lender shall have
rendered to Borrower a written statement as provided above, the balance in
Borrower's loan account(s) shall be presumptive evidence of the amounts due and
owing to Lender by Borrower.
6.3 Collection of Accounts.
(a) Borrower shall establish and maintain, at its expense, blocked
accounts or lockboxes and related blocked accounts (in either case, "Blocked
Accounts"), as Lender may specify, with such banks as are acceptable to Lender
into which Borrower shall promptly deposit and direct its account debtors to
directly remit all payments on Accounts and all payments constituting proceeds
of Inventory or other Collateral in the identical form in which such payments
are made, whether by cash, check or other manner. The banks at which the Blocked
Accounts are established shall enter into an agreement, in form and substance
satisfactory to Lender, providing that all items received or deposited in the
Blocked Accounts are the property of Lender, that the depository bank has no
lien upon, or right to setoff against, the Blocked Accounts, the items received
for deposit therein, or the funds from time to time on deposit therein and that
the depository bank will wire, or otherwise transfer, in immediately available
funds, on a daily basis, all funds received or deposited into the Blocked
Accounts to such bank account of Lender as Lender may from time to time
designate for such purpose ("Payment Account"). Borrower agrees that all
payments made to such Blocked Accounts or other funds received and collected by
Lender, whether on the Accounts or as proceeds of Inventory or other Collateral
or otherwise shall be the property of Lender.
(b) For purposes of calculating interest on the Obligations, such
payments or other funds received will be applied (conditional upon final
collection) to the Obligations one (1) business day following the date of
receipt of immediately available funds by Lender in the Payment Account. For
purposes of calculating the amount of the Revolving Loans available to Borrower
such payments will be applied (conditional upon final collection) to the
Obligations on the business day of receipt by Lender in the Payment Account, if
such payments are received within sufficient time (in accordance with Lender's
usual and customary practices as in effect from time to time) to credit
Borrower's loan account on such day, and if not, then on the next business day.
(c) Borrower and all of its affiliates, subsidiaries, shareholders,
directors, employees or agents shall, acting as trustee for Lender, receive, as
the property of Lender, any monies, checks, notes, drafts or any other payment
relating to and/or proceeds of Accounts or other Collateral which come into
their possession or under their control and immediately upon receipt thereof,
shall deposit or cause the same to be deposited in the Blocked Accounts, or
remit the same or cause the same to be remitted, in kind, to Lender. In no event
shall the same be commingled with Borrower's own funds. Borrower agrees to
reimburse Lender on demand for any amounts owed or paid to any bank at which a
Blocked Account is established or any other bank or person involved in the
transfer of funds to or from the Blocked Accounts arising out of Lender's
payments to or indemnification of such bank or person. The obligation of
Borrower to reimburse Lender for such amounts pursuant to this Section 6.3 shall
survive the termination or non-renewal of this Agreement.
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6.4 Payments. All Obligations shall be payable to the Payment Account as
provided in Section 6.3 or such other place as Lender may designate from time to
time. Lender may apply payments received or collected from Borrower or for the
account of Borrower (including the monetary proceeds of collections or of
realization upon any Collateral) to such of the Obligations, whether or not then
due, in such order and manner as Lender determines. At Lender's option, all
principal, interest, fees, costs, expenses and other charges provided for in
this Agreement or the other Financing Agreements may be charged directly to the
loan account(s) of Borrower. Borrower shall make all payments to Lender on the
Obligations free and clear of, and without deduction or withholding for or on
account of, any setoff, counterclaim, defense, duties, taxes, levies, imposts,
fees, deductions, withholding, restrictions or conditions of any kind. If after
receipt of any payment of, or proceeds of Collateral applied to the payment of,
any of the Obligations, Lender is required to surrender or return such payment
or proceeds to any Person for any reason, then the Obligations intended to be
satisfied by such payment or proceeds shall be reinstated and continue and this
Agreement shall continue in full force and effect as if such payment or proceeds
had not been received by Lender. Borrower shall be liable to pay to Lender, and
does hereby indemnify and hold Lender harmless for the amount of any payments or
proceeds surrendered or returned. This Section 6.4 shall remain effective
notwithstanding any contrary action which may be taken by Lender in reliance
upon such payment or proceeds. This Section 6.4 shall survive the payment of the
Obligations and the termination or non-renewal of this Agreement. If, at any
time, there are no Obligations outstanding, and Lender holds a credit balance,
Lender shall either (a) retain such credit balance, in which event Lender agrees
to pay Borrower interest thereon at a rate of three and one-quarter (3.25%)
percent per annum below the Prime Rate or (b) if requested by Borrower, remit
such credit balance to Borrower.
6.5 Authorization to Make Loans. Lender is authorized to make the Loans
and provide the Letter of Credit Accommodations based upon telephonic or other
instructions received from anyone purporting to be an officer of Borrower or
other authorized person or, at the discretion of Lender, if such Loans are
necessary to satisfy any Obligations. All requests for Loans or Letter of Credit
Accommodations hereunder shall specify the date on which the requested advance
is to be made or Letter of Credit Accommodations established (which day shall be
a business day) and the amount of the requested Loan. Requests received after
11:00 a.m. New York City time on any day shall be deemed to have been made as of
the opening of business on the immediately following business day. All Loans and
Letter of Credit Accommodations under this Agreement shall be conclusively
presumed to have been made to, and at the request of and for the benefit of,
Borrower when deposited to the credit of Borrower or otherwise disbursed or
established in accordance with the instructions of Borrower or in accordance
with the terms and conditions of this Agreement.
6.6 Use of Proceeds. Borrower shall use the initial proceeds of the Loans
provided by Lender to Borrower hereunder only for: (a) payments to each of the
persons listed in the disbursement direction letter furnished by Borrower to
Lender on or about the date hereof and (b) costs, expenses and fees in
connection with the preparation, negotiation, execution and delivery of this
Agreement and the other Financing Agreements. All other Loans made or Letter of
Credit Accommodations provided by Lender to Borrower pursuant to the provisions
hereof shall be used by Borrower only for general operating, working capital and
other proper corporate purposes of Borrower not otherwise prohibited by the
terms hereof. None of the proceeds will be used, directly or indirectly, for the
purpose of purchasing or carrying any margin security or for the purposes of
reducing or retiring any indebtedness which was originally incurred to purchase
or carry any margin
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security or for any other purpose which might cause any of the Loans to be
considered a "purpose credit" within the meaning of Regulation G of the Board of
Governors of the Federal Reserve System, as amended.
SECTION 7. COLLATERAL REPORTING AND COVENANTS
7.1 Collateral Reporting. Borrower shall provide Lender with the following
documents in a form satisfactory to Lender: (a) on a weekly basis, a schedule of
Accounts, credits issued and cash received, except that, if Borrower fails to
maintain Excess Availability of $2,000,000, then Borrower shall deliver a
schedule of Accounts, credits issued and cash received on a daily basis; (b) on
a weekly basis, inventory reports by category, including cost, quantity and
grades of Borrower's inventory, except that, if Borrower fails to maintain
Excess Availability of $2,000,000, then Borrower shall deliver such inventory
reports on a daily basis; (c) on a monthly basis or more frequently as Lender
may request, (i) perpetual inventory reports and (ii) agings of accounts
payable; (d) upon Lender's request, (i) copies of customer statements and credit
memos, remittance advices and reports, and copies of deposit slips and bank
statements, (ii) copies of shipping and delivery documents, and (iii) copies of
purchase orders, invoices and delivery documents for Inventory acquired by
Borrower; (e) agings of accounts receivable on a monthly basis or more
frequently as Lender may request; and (f) such other reports as to the
Collateral as Lender shall request from time to time. If any of Borrower's
records or reports of the Collateral are prepared or maintained by an accounting
service, contractor, shipper or other agent, Borrower hereby irrevocably
authorizes such service, contractor, shipper or agent to deliver such records,
reports, and related documents to Lender and to follow Lender's instructions
with respect to further services at any time that an Event of Default exists or
has occurred and is continuing.
7.2 Accounts Covenants.
(a) Borrower shall notify Lender promptly of: (i) any material delay
in Borrower's performance of any of its obligations to any account debtor or the
assertion of any claims, offsets, defenses or counterclaims by any account
debtor, or any disputes with account debtors, or any settlement, adjustment or
compromise thereof, (ii) all material adverse information relating to the
financial condition of any account debtor known to Borrower after due
investigation and (iii) any event or circumstance which, to Borrower's knowledge
would cause Lender to consider any then existing Accounts as no longer
constituting Eligible Accounts. No credit, discount, allowance or extension or
agreement for any of the foregoing shall be granted to any account debtor
without Lender's consent, except in the ordinary course of Borrower's business
in accordance with practices and policies previously disclosed in writing to
Lender. So long as no Event of Default exists or has occurred and is continuing,
Borrower shall settle, adjust or compromise any claim, offset, counterclaim or
dispute with any account debtor. At any time that an Event of Default exists or
has occurred and is continuing, Lender shall, at its option, have the exclusive
right to settle, adjust or compromise any claim, offset, counterclaim or dispute
with account debtors or grant any credits, discounts or allowances.
(b) Borrower shall promptly report to Lender any return of Inventory
by any one account debtor. At any time that Inventory is returned, reclaimed or
repossessed, the Account (or
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portion thereof) which arose from the sale of such returned, reclaimed or
repossessed Inventory shall not be deemed an Eligible Account. In the event any
account debtor returns Inventory when an Event of Default exists or has occurred
and is continuing, Borrower shall, upon Lender's request, (i) hold the returned
Inventory in trust for Lender, (ii) segregate all returned Inventory from all of
its other property, (iii) dispose of the returned Inventory solely according to
Lender's instructions, and (iv) not issue any credits, discounts or allowances
with respect thereto without Lender's prior written consent.
(c) With respect to each Account: (i) the amounts shown on any
invoice delivered to Lender or schedule thereof delivered to Lender shall be
true and complete, (ii) no payments shall be made thereon except payments
immediately delivered to Lender pursuant to the terms of this Agreement, (iii)
no credit, discount, allowance or extension or agreement for any of the
foregoing shall be granted to any account debtor except as reported to Lender in
accordance with this Agreement and except for credits, discounts, allowances or
extension of terms made or given in the ordinary course of Borrower's business
in accordance with practices and policies previously disclosed to Lender, (iv)
there shall be no setoffs, deductions, contras, defenses, counterclaims or
disputes existing or asserted with respect thereto except as reported to Lender
in accordance with the terms of this Agreement, (v) none of the transactions
giving rise thereto will violate any applicable State or Federal laws or
regulations, or Netherlands Antilles law, all documentation relating thereto
will be legally sufficient under such laws and regulations and all such
documentation will be legally enforceable in accordance with its terms.
(d) Lender shall have the right at any time or times, in Lender's
name or in the name of a nominee of Lender, to verify the validity, amount or
any other matter relating to any Account or other Collateral, by mail,
telephone, facsimile transmission or otherwise.
(e) Borrower shall deliver or cause to be delivered to Lender, with
appropriate endorsement and assignment, with full recourse to Borrower, all
chattel paper and instruments which Borrower now owns or may at any time acquire
immediately upon Borrower's receipt thereof, except as Lender may otherwise
agree.
(f) Lender may, at any time or times that an Event of Default exists
or has occurred and is continuing, (i) notify any or all account debtors that
the Accounts have been assigned to Lender and that Lender has a security
interest therein and Lender may direct any or all accounts debtors to make
payment of Accounts directly to Lender, (ii) extend the time of payment of,
compromise, settle or adjust for cash, credit, return of merchandise or
otherwise, and upon any terms or conditions, any and all Accounts or other
obligations included in the Collateral and thereby discharge or release the
account debtor or any other party or parties in any way liable for payment
thereof without affecting any of the Obligations, (iii) demand, collect or
enforce payment of any Accounts or such other obligations, but without any duty
to do so, and Lender shall not be liable for its failure to collect or enforce
the payment thereof nor for the negligence of its agents or attorneys with
respect thereto and (iv) take whatever other action Lender may deem necessary or
desirable for the protection of its interests. At any time that an Event of
Default exists or has occurred and is continuing, at Lender's request, all
invoices and statements sent to any account debtor shall state that the Accounts
and such other obligations have been assigned to Lender and are payable directly
and only to Lender and Borrower shall deliver to Lender such originals of
documents evidencing the sale
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and delivery of goods or the performance of services giving rise to any Accounts
as Lender may require.
7.3 Inventory Covenants. With respect to the Inventory: (a) Borrower shall
at all times maintain inventory records reasonably satisfactory to Lender,
keeping correct and accurate records itemizing and describing the kind, type,
quality and quantity of Inventory, Borrower's cost therefor and daily
withdrawals therefrom and additions thereto; (b) Borrower shall conduct a
physical count of the Inventory at least once each year, but at any time or
times as Lender may request on or after an Event of Default, and promptly
following such physical inventory shall supply Lender with a report in the form
and with such specificity as may be reasonably satisfactory to Lender concerning
such physical count; (c) Borrower shall not remove any Inventory from the
locations set forth or permitted herein, without the prior written consent of
Lender, except for sales of Inventory in the ordinary course of Borrower's
business and except to move Inventory directly from one location set forth or
permitted herein to another such location; (d) Borrower shall deliver to Lender,
at Borrower's expense, reports prepared by third party surveyors, acceptable to
Lender, with respect to the quantity, grade, cost, etc. of Borrower's inventory
with such reports to be prepared on a frequency consistent with historical
practice, but in no event less than once per month (or at such other intervals
as Lender may request from time to time), and which reports shall be delivered
directly to Lender and shall be in form, scope and methodology acceptable to
Lender; (e) Borrower shall produce, use, store and maintain the Inventory, with
all reasonable care and caution and in accordance with applicable standards of
any insurance and in conformity with applicable laws; (f) Borrower assumes all
responsibility and liability arising from or relating to the production, use,
sale or other disposition of the Inventory; (g) Borrower shall not sell
Inventory to any customer on approval, or any other basis which entitles the
customer to return or may obligate Borrower to repurchase such Inventory; and
(h) Borrower shall keep the Inventory in good and marketable condition.
7.4 Equipment Covenants. With respect to the Equipment and subject to the
rights of the Trustee: (a) Borrower shall keep the Equipment in good order,
repair, running and marketable condition (ordinary wear and tear excepted); (b)
Borrower shall use the Equipment with all reasonable care and caution and in
accordance with applicable standards of any insurance and in conformity with all
applicable laws; (c) the Equipment is and shall be used in Borrower's business
and not for personal, family, household or farming use; and (d) Borrower assumes
all responsibility and liability arising from the use of the Equipment. In
addition to, and not in limitation of, the foregoing, Borrower shall keep in
good order and repair all computers and computer hardware and software (whether
owned or licensed) in which any Records or other Collateral are stored or
maintained and, at any given time, Lender shall have access to all such
computers and computer hardware and software and all Records and Collateral
contained therein shall be accurate.
7.5 Power of Attorney. Borrower hereby irrevocably designates and appoints
Lender (and all persons designated by Lender) as Borrower's true and lawful
attorney-in-fact, and authorizes Lender, in Borrower's or Lender's name, to: (a)
at any time an Event of Default or event which with notice or passage of time or
both would constitute an Event of Default exists or has occurred and is
continuing (i) demand payment on Accounts or other proceeds of Inventory or
other Collateral, (ii) enforce payment of Accounts by legal proceedings or
otherwise, (iii) exercise all of Borrower's rights and remedies to collect any
Account or other Collateral, (iv) sell or assign any Account upon such terms,
for such amount and at such time or times as the Lender deems advisable, (v)
settle, adjust,
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compromise, extend or renew an Account, (vi) discharge and release any Account,
(vii) prepare, file and sign Borrower's name on any proof of claim in bankruptcy
or other similar document against an account debtor, and (viii) do all acts and
things which are necessary, in Lender's determination, to fulfill Borrower's
obligations under this Agreement and the other Financing Agreements, (b) at any
time after an Event of Default under Sections 10.1(a)(i), (b), (e), (f), (g),
(h) or (q) and during its continuation or in the event Lender declares an Event
of Default and demands payment of the Obligations hereunder, to notify the post
office authorities to change the address for delivery of Borrower's mail to an
address designated by Lender, and to receive and open all mail addressed to
Borrower, except that, Lender shall use its best efforts to promptly forward to
Borrower any mail received by Lender which does not contain payments of Accounts
or which does not otherwise relate to the Collateral and to forward to Borrower
copies of any payments of Accounts or documents received and retained by Lender;
(c) at any time to (i) take control in any manner of any item of payment or
proceeds thereof, (ii) have access to any lockbox or postal box into which
Borrower's mail is deposited, (iii) endorse Borrower's name upon any items of
payment relating to the Collateral or proceeds thereof and deposit the same in
the Lender's account for application to the Obligations, (iv) endorse Borrower's
name upon any chattel paper, document, instrument, invoice, or similar document
or agreement relating to any Account or any goods pertaining thereto or any
other Collateral, (v) sign Borrower's name on any verification of Accounts and
notices thereof to account debtors and (vi) execute in Borrower's name and file
any UCC financing statements or amendments thereto. Borrower hereby releases
Lender and its officers, employees and designees from any liabilities arising
from any act or acts under this power of attorney and in furtherance thereof,
whether of omission or commission, except as a result of Lender's own gross
negligence or wilful misconduct as determined pursuant to a final non-appealable
order of a court of competent jurisdiction.
7.6 Right to Cure. Lender may, at its option, (a) cure any default by
Borrower under any agreement with a third party or pay or bond on appeal any
judgment entered against Borrower to the extent that such default or judgment
relates to the Collateral, (b) discharge taxes, liens, security interests or
other encumbrances at any time levied on or existing with respect to the
Collateral and (c) pay any amount, incur any expense or perform any act which,
in Lender's judgment, is necessary or appropriate to preserve, protect, insure
or maintain the Collateral and the rights of Lender with respect thereto. Lender
may add any amounts so expended to the Obligations and charge Borrower's account
therefor, such amounts to be repayable by Borrower on demand. Lender shall be
under no obligation to effect such cure, payment or bonding and shall not, by
doing so, be deemed to have assumed any obligation or liability of Borrower. Any
payment made or other action taken by Lender under this Section shall be without
prejudice to any right to assert an Event of Default hereunder and to proceed
accordingly.
7.7 Access to Premises. From time to time as requested by Lender, at the
cost and expense of Borrower, (a) Lender or its designee shall have complete
access to all of Borrower's premises during normal business hours and after
notice to Borrower, or at any time and without notice to Borrower if an Event of
Default exists or has occurred and is continuing, for the purposes of
inspecting, verifying and auditing the Collateral and all of Borrower's books
and records, including the Records, and (b) Borrower shall promptly furnish to
Lender such copies of such books and records or extracts therefrom as Lender may
request, and (c) use during normal business hours such of Borrower's personnel,
equipment, supplies and premises as may be reasonably necessary for the
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foregoing and if an Event of Default exists or has occurred and is continuing
for the collection of Accounts and realization of other Collateral.
SECTION 8. REPRESENTATIONS AND WARRANTIES
Borrower hereby represents and warrants to Lender the following (which
shall survive the execution and delivery of this Agreement), the truth and
accuracy of which are a continuing condition of the making of Loans and
providing Letter of Credit Accommodations by Lender to Borrower:
8.1 Corporate Existence, Power and Authority; Subsidiaries. Borrower is a
corporation duly organized and in good standing under the laws of its state of
incorporation and is duly qualified as a foreign corporation and in good
standing in all states or other jurisdictions where the nature and extent of the
business transacted by it or the ownership of assets makes such qualification
necessary, except for those jurisdictions in which the failure to so qualify
would not have a material adverse effect on Borrower's financial condition,
results of operation or business or the rights of Lender in or to any of the
Collateral. The execution, delivery and performance of this Agreement, the other
Financing Agreements and the transactions contemplated hereunder and thereunder
are all within Borrower's corporate powers, have been duly authorized and are
not in contravention of law or the terms of Borrower's certificate of
incorporation, by-laws, or other organizational documentation, or any indenture,
agreement or undertaking to which Borrower is a party or by which Borrower or
its property are bound. This Agreement and the other Financing Agreements
constitute legal, valid and binding obligations of Borrower enforceable in
accordance with their respective terms. Borrower does not have any subsidiaries
except as set forth on the Information Certificate.
8.2 Financial Statements; No Material Adverse Change. All financial
statements relating to Borrower which have been or may hereafter be delivered by
Borrower to Lender have been prepared in accordance with GAAP and fairly present
the financial condition and the results of operation of Borrower as at the dates
and for the periods set forth therein. Except as disclosed in any interim
financial statements furnished by Borrower to Lender prior to the date of this
Agreement, there has been no material adverse change in the assets, liabilities,
properties and condition, financial or otherwise, of Borrower, since the date of
the most recent audited financial statements furnished by Borrower to Lender
prior to the date of this Agreement.
8.3 Chief Executive Office; Collateral Locations. The principal executive
office of Borrower and Borrower's Records concerning its Accounts are located
only at the address set forth below and its only other places of business and
the only other locations of Collateral, if any, are the addresses set forth in
the Information Certificate, subject to the right of Borrower to establish new
locations in accordance with Section 9.2 below. The day-to-day operations of
Borrower are managed in its jurisdiction of incorporation. The Information
Certificate correctly identifies any of such locations which are not owned by
Borrower and sets forth the owners and/or operators thereof and to the best of
Borrower's knowledge, the holders of any mortgages on such locations.
8.4 Priority of Liens; Title to Properties. The security interests and
liens granted to Lender under this Agreement and the other Financing Agreements
constitute valid and perfected first priority liens and security interests in
and upon the Collateral subject only to the liens indicated on
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Schedule 8.4 hereto and the other liens permitted under Section 9.8 hereof.
Borrower has good and marketable title to all of its properties and assets
subject to no liens, mortgages, pledges, security interests, encumbrances or
charges of any kind, except those granted to Lender and such others as are
specifically listed on Schedule 8.4 hereto or permitted under Section 9.8
hereof.
8.5 Tax Returns. Borrower has filed, or caused to be filed, in a timely
manner all tax returns and all material reports and declarations which are
required to be filed by it, except as provided in the Information Certificate or
as previously disclosed in writing to Lender. All information in such tax
returns, reports and declarations is complete and accurate in all material
respects. Borrower has paid or caused to be paid all taxes due and payable or
claimed due and payable in any assessment received by it, except taxes the
validity of which are being contested in good faith by appropriate proceedings
diligently pursued and available to Borrower and with respect to which adequate
reserves have been set aside on its books. Adequate provision has been made for
the payment of all accrued and unpaid Federal, State, county, local, foreign and
other taxes whether or not yet due and payable and whether or not disputed.
8.6 Litigation. Except as set forth on the Information Certificate, there
is no present investigation by any governmental agency pending, or to the best
of Borrower's knowledge threatened, against or affecting Borrower, its assets or
business and there is no action, suit, proceeding or claim by any Person
pending, or to the best of Borrower's knowledge threatened, against Borrower or
its assets or goodwill, or against or affecting any transactions contemplated by
this Agreement, which if adversely determined against Borrower would result in
any material adverse change in the assets, business or prospects of Borrower or
would impair the ability of Borrower to perform its obligations hereunder or
under any of the other Financing Agreements to which it is a party or of Lender
to enforce any Obligations or realize upon any Collateral.
8.7 Compliance with Other Agreements and Applicable Laws. Borrower is not
in default in any material respect under, or in violation in any material
respect of any of the terms of, any agreement, contract, instrument, lease or
other commitment to which it is a party or by which it or any of its assets are
bound and Borrower is in compliance in all material respects with all applicable
provisions of laws, rules, regulations, licenses, permits, approvals and orders
of any foreign, Federal, State or local governmental authority.
8.8 Bank Accounts. All of the deposit accounts, investment accounts or
other accounts in the name of or used by Borrower maintained at any bank or
other financial institution are set forth on Schedule 8.8 hereto, subject to the
right of Borrower to establish new accounts in accordance with Section 9.13
below.
8.9 Accuracy and Completeness of Information. All information furnished by
or on behalf of Borrower in writing to Lender in connection with this Agreement
or any of the other Financing Agreements or any transaction contemplated hereby
or thereby, including all information on the Information Certificate is true and
correct in all material respects on the date as of which such information is
dated or certified and does not omit any material fact necessary in order to
make such information not misleading. No event or circumstance has occurred
which has had or could reasonably be expected to have a material adverse affect
on the business, assets or prospects of Borrower, which has not been fully and
accurately disclosed to Lender in writing.
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8.10 Environmental Compliance.
(a) Except as set forth on Schedule 8.10 hereto, Borrower has not
generated, used, stored, treated, transported, manufactured, handled, produced
or disposed of any Hazardous Materials, on or off its premises (whether or not
owned by it) in a manner which constitutes a material violation of any
applicable Environmental Law or any license, permit, certificate, approval or
similar authorization thereunder and the operations of Borrower comply in all
material respects with all Environmental Laws and all licenses, permits,
certificates, approvals and similar authorizations thereunder.
(b) Except as set forth on Schedule 8.10 hereto, there has been no
material investigation, proceeding, order, directive, claim, citation or written
notice by any governmental authority or any other person nor is any pending or
to the best of Borrower's knowledge threatened, with respect to any
non-compliance with or violation of the requirements of any Environmental Law by
Borrower or the release, spill or discharge, threatened or actual, of any
Hazardous Material or the generation, use, storage, treatment, transportation,
manufacture, handling, production or disposal of any Hazardous Materials or any
other environmental, health or safety matter, which affects Borrower or its
business, operations or assets or any properties at which Borrower has
transported, stored or disposed of any Hazardous Materials.
(c) Except as set forth on Schedule 8.10 hereto, Borrower has no
material liability (contingent or otherwise) in connection with a release, spill
or discharge, threatened or actual, of any Hazardous Materials or the
generation, use, storage, treatment, transportation, manufacture, handling,
production or disposal of any Hazardous Materials.
(d) Except as set forth on Schedule 8.10 hereto, Borrower has all
material licenses, permits, certificates, approvals or similar authorizations
required to be obtained or filed in connection with the operations of Borrower
under any Environmental Law and all of such licenses, permits, certificates,
approvals or similar authorizations are valid and in full force and effect.
8.11 Survival of Warranties; Cumulative. All representations and
warranties contained in this Agreement or any of the other Financing Agreements
shall survive the execution and delivery of this Agreement and shall be deemed
to have been made again to Lender on the date of each additional borrowing or
other credit accommodation hereunder and shall be conclusively presumed to have
been relied on by Lender regardless of any investigation made or information
possessed by Lender. The representations and warranties set forth herein shall
be cumulative and in addition to any other representations or warranties which
Borrower shall now or hereafter give, or cause to be given, to Lender.
SECTION 9. AFFIRMATIVE AND NEGATIVE COVENANTS
9.1 Maintenance of Existence. Borrower shall at all times preserve, renew
and keep in full, force and effect its corporate existence and rights and
franchises with respect thereto and maintain in full force and effect all
permits, licenses, trademarks, tradenames, approvals, authorizations, leases and
contracts necessary to carry on the business as presently or proposed to be
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conducted. Borrower shall give Lender thirty (30) days prior written notice of
any proposed change in its corporate name, which notice shall set forth the new
name and Borrower shall deliver to Lender a copy of the amendment to the
Certificate of Incorporation of Borrower providing for the name change certified
by the appropriate government authority of the jurisdiction of incorporation of
Borrower as soon as it is available.
9.2 New Collateral Locations. Borrower may open any new location provided
Borrower (a) gives Lender thirty (30) days prior written notice of the intended
opening of any such new location and (b) executes and delivers, or causes to be
executed and delivered, to Lender such agreements, documents, and instruments as
Lender may deem reasonably necessary or desirable to protect its interests in
the Collateral at such location, including UCC financing statements.
9.3 Compliance with Laws, Regulations, Etc.
(a) Borrower shall, at all times, comply in all material respects
with all laws, rules, regulations, licenses, permits, approvals and orders
applicable to it under applicable law (including, without limitation,
Environmental Laws).
(b) Except with respect to any matter or event which would not have
a material adverse effect upon the Borrower or the conduct of its business,
Borrower shall give both oral and written notice to Lender promptly upon
Borrower's receipt of any notice of, or Borrower's otherwise obtaining knowledge
of, (i) the occurrence of any event involving the release, spill or discharge of
any Hazardous Material or (ii) any investigation, proceeding, complaint, order,
directive, claims, citation or notice with respect to: (A) any non-compliance
with or violation of any Environmental Law by Borrower or (B) the release, spill
or discharge of any Hazardous Material or (C) the generation, use, storage,
treatment, transportation, manufacture, handling, production or disposal of any
Hazardous Materials or (D) any other environmental, health or safety matter,
which affects Borrower or its business, operations or assets or any properties
at which Borrower transported, stored or disposed of any Hazardous Materials.
(c) Without limiting the generality of the foregoing, whenever
Lender reasonably determines that there is non-compliance, or any condition
which requires any action by or on behalf of Borrower in order to avoid any
material non-compliance, with any Environmental Law, which non-compliance could
reasonably be expected to have a material adverse effect upon the Borrower or
the conduct of its business, Borrower shall, at Lender's request and Borrower's
expense: (i) cause an independent environmental engineer acceptable to Lender to
conduct such tests of the site where Borrower's non-compliance or alleged
non-compliance with such Environmental Laws has occurred as to such
non-compliance and prepare and deliver to Lender a report as to such
non-compliance setting forth the results of such tests, a proposed plan for
responding to any environmental problems described therein, and an estimate of
the costs thereof and (ii) provide to Lender a supplemental report of such
engineer whenever the scope of such non-compliance, or Borrower's response
thereto or the estimated costs thereof, shall change in any material respect.
(d) Borrower shall indemnify and hold harmless Lender, its
directors, officers, employees, agents, invitees, representatives, successors
and assigns, from and against any and all losses, claims, damages, liabilities,
costs, and expenses (including attorneys' fees and legal expenses)
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directly or indirectly arising out of or attributable to the use, generation,
manufacture, production, storage, release, threatened release, spill, discharge,
disposal or presence of a Hazardous Material, including, without limitation, the
costs of any required or necessary repair, cleanup or other remedial work with
respect to any property of Borrower and the preparation and implementation of
any closure, remedial or other required plans. All representations, warranties,
covenants and indemnifications in this Section 9.3 shall survive the payment of
the Obligations and the termination or non-renewal of this Agreement.
9.4 Payment of Taxes and Claims. (a) Borrower shall duly pay and discharge
all taxes, assessments, contributions and governmental charges upon or against
it or its properties or assets, except for taxes the validity of which are being
contested in good faith by appropriate proceedings diligently pursued and
available to Borrower and with respect to which adequate reserves have been set
aside on its books. Borrower shall be liable for any tax or penalties imposed on
Lender as a result of the financing arrangements provided for herein and
Borrower agrees to indemnify and hold Lender harmless with respect to the
foregoing, and to repay to Lender on demand the amount thereof, and until paid
by Borrower such amount shall be added and deemed part of the Loans, provided,
that, nothing contained herein (including Section 6.4) shall be construed to
require Borrower to pay any income or franchise taxes attributable to the income
of Lender from any amounts charged or paid hereunder to Lender. The foregoing
indemnity shall survive the payment of the Obligations and the termination or
non-renewal of this Agreement.
(b) Upon the request of Borrower, Lender agrees to provide Borrower
with appropriate forms, certificates, documents or other information to the
extent necessary to establish a complete exemption from, or reduction in, any
taxes with respect to payments made by Borrower to Lender hereunder, provided
that, Lender determines, in its sole and absolute discretion, that the same will
not have an effect upon the conduct of Lender's business or would or may cause
Lender to suffer any legal, regulatory or economic prejudice or harm, as
determined by Lender or its counsel in its or their discretion. All costs and
expenses incurred in connection with the foregoing shall be paid by Borrower.
Under no circumstances shall Lender be required to disclose any of Lender's tax
returns or the tax returns of any affiliates or subsidiaries of Lender or to
disclose any other information (financial or otherwise) regarding the conduct of
Lender's business. In the event Lender elects not to cooperate with or otherwise
provide such forms, certificates, documents or other information to Borrower,
Borrower acknowledges and confirms that Lender shall have no liability
whatsoever to Borrower, any Obligor or any of their respective affiliates or
subsidiaries.
9.5 Insurance. Borrower shall, at all times, maintain with financially
sound and reputable insurers insurance with respect to the Collateral against
loss or damage and all other insurance of the kinds and in the amounts
customarily insured against or carried by corporations of established reputation
engaged in the same or similar businesses and similarly situated. Said policies
of insurance shall be satisfactory to Lender as to form, amount and insurer.
Borrower shall furnish certificates, policies or endorsements to Lender as
Lender shall require as proof of such insurance, and, if Borrower fails to do
so, Lender is authorized, but not required, to obtain such insurance at the
expense of Borrower. All policies shall provide for at least thirty (30) days
prior written notice to Lender of any cancellation or reduction of coverage and
that Lender may act as attorney for Borrower in obtaining, and at any time an
Event of Default exists or has occurred and is continuing, adjusting, settling,
amending and canceling such insurance. Borrower shall cause Lender to be named
as a loss
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payee and an additional insured (but without any liability for any premiums)
under the insurance policies related to the Inventory and all Records relating
to the Collateral and Borrower shall obtain non-contributory lender's loss
payable endorsements to such insurance policies related to the Inventory and all
Records relating to the Collateral in form and substance satisfactory to Lender.
Such lender's loss payable endorsements shall specify that the proceeds of such
insurance shall be payable to Lender as its interests may appear and further
specify that Lender shall be paid regardless of any act or omission by Borrower
or any of its affiliates. At its option, Lender may apply any insurance proceeds
received by Lender at any time to the cost of repairs or replacement of
Collateral and/or to payment of the Obligations, whether or not then due, in any
order and in such manner as Lender may determine or hold such proceeds as cash
collateral for the Obligations.
9.6 Financial Statements and Other Information.
(a) Borrower shall keep proper books and records in which true and
complete entries shall be made of all dealings or transactions of or in relation
to the Collateral and the business of Borrower and its subsidiaries in
accordance with GAAP and Borrower shall furnish or cause to be furnished to
Lender: (i) within twenty-five (25) days after the end of each fiscal month,
monthly unaudited consolidated financial statements and unaudited consolidating
financial statements (in each case only balance sheets and statements of income
and loss), all in reasonable detail, fairly presenting the financial position
and the results of the operations of Borrower and its subsidiaries as of the end
of and through such fiscal month, (ii) within forty-five (45) days after the end
of each fiscal quarter, quarterly unaudited consolidated financial statements
for Borrower and its affiliates and subsidiaries (including, in each case,
balance sheets, statements of income and loss, and statements of cash flow) all
in reasonable detail, fairly presenting the financial position and the results
of the operations of Borrower and its subsidiaries and affiliates as of the end
of and through such fiscal quarter; and (iii) within ninety (90) days after the
end of each fiscal year, audited consolidated financial statements and audited
consolidating financial statements of Borrower and its subsidiaries and its
affiliates (in each case balance sheets, statements of income and loss,
statements of cash flow and statements of shareholders' equity), and the
accompanying notes thereto, all in reasonable detail, fairly presenting the
financial position and the results of the operations of Borrower and its
subsidiaries and affiliates as of the end of and for such fiscal year, together
with the unqualified opinion of independent certified public accountants, which
accountants shall be an independent accounting firm selected by Borrower and
reasonably acceptable to Lender, that such financial statements have been
prepared in accordance with GAAP, and present fairly the results of operations
and financial condition of Borrower and its subsidiaries and its affiliates as
of the end of and for the fiscal year then ended.
(b) Borrower shall promptly notify Lender in writing of the details
of (i) any loss, damage, investigation, action, suit, proceeding or claim
relating to the Collateral or any other property which is security for the
Obligations or which would result in any material adverse change in Borrower's
business, properties, assets, goodwill or condition, financial or otherwise and
(ii) the occurrence of any Event of Default or event which, with the passage of
time or giving of notice or both, would constitute an Event of Default.
(c) Borrower shall promptly after the sending or filing thereof
furnish or cause to be furnished to Lender all reports and registration
statements which Borrower files with the Securities
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and Exchange Commission, any national securities exchange or the National
Association of Securities Dealers, Inc.
(d) Borrower shall furnish or cause to be furnished to Lender such
budgets, forecasts, projections and other information respecting the Collateral
and the business of Borrower, as Lender may, from time to time, reasonably
request. Lender is hereby authorized to deliver a copy of any financial
statement or any other information relating to the business of Borrower to any
court or other government agency or to any participant or assignee or
prospective participant or assignee. Borrower hereby irrevocably authorizes and
directs all accountants or auditors to deliver to Lender, at Borrower's expense,
copies of the financial statements of Borrower and any reports or management
letters prepared by such accountants or auditors on behalf of Borrower and to
disclose to Lender such information as they may have regarding the business of
Borrower. Any documents, schedules, invoices or other papers delivered to Lender
may be destroyed or otherwise disposed of by Lender one (1) year after the same
are delivered to Lender, except as otherwise designated by Borrower to Lender in
writing.
9.7 Sale of Assets, Consolidation, Merger, Dissolution, Etc. Borrower
shall not, directly or indirectly, (a) merge into or with or consolidate with
any other Person or permit any other Person to merge into or with or consolidate
with it, without the prior written consent of Lender, which consent shall not be
unreasonably withheld, provided that, in connection with any such proposed
merger or consolidation, Borrower shall be the surviving entity, or (b) sell,
assign, lease, transfer, abandon or otherwise dispose of any of its assets to
any other Person (except for sales of Inventory in the ordinary course of
business and except for sales of assets (other than Collateral) whereby the
disposition thereof will not have an adverse effect upon the Collateral or
Lender's access thereto or will not have a material adverse effect upon the
conduct of the Borrower's business as presently conducted), or (c) form or
acquire any subsidiary, except as permitted or not otherwise prohibited under
the Indenture and provided that Borrower provides Lender with prior written
notice thereof, or (d) wind up, liquidate or dissolve or (e) agree to do any of
the foregoing.
9.8 Encumbrances. Borrower shall not create, incur, assume or suffer to
exist any security interest, mortgage, pledge, lien, charge or other encumbrance
of any nature whatsoever on any of its assets or properties, including the
Collateral, except: (a) liens and security interests of Lender; (b) liens
securing the payment of taxes, either not yet overdue or the validity of which
are being contested in good faith by appropriate proceedings diligently pursued
and available to Borrower and with respect to which adequate reserves have been
set aside on its books; (c) non-consensual statutory liens (other than liens
securing the payment of taxes) arising in the ordinary course of Borrower's
business to the extent: (i) such liens secure indebtedness which is not overdue
or (ii) such liens secure indebtedness relating to claims or liabilities which
are fully insured and being defended at the sole cost and expense and at the
sole risk of the insurer or being contested in good faith by appropriate
proceedings diligently pursued and available to Borrower, in each case prior to
the commencement of foreclosure or other similar proceedings and with respect to
which adequate reserves have been set aside on its books; (d) zoning
restrictions, easements, licenses, covenants and other restrictions affecting
the use of real property which do not interfere in any material respect with the
use of such real property or ordinary conduct of the business of Borrower as
presently conducted thereon or materially impair the value of the real property
which may be subject thereto; (e) purchase money security interests in Equipment
(including capital leases) and purchase money mortgages on real estate
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so long as such security interests and mortgages do not apply to any property of
Borrower other than the Equipment or real estate so acquired, and the
indebtedness secured thereby does not exceed the cost of the Equipment or real
estate so acquired, as the case may be; and (f) the security interests and liens
set forth on Schedule 8.4 hereto; (g) any security interests and liens granted
in favor of the Trustee under the Indenture (with such security interests and
liens being subject to the Access Agreement); and (h) any security interests and
liens granted in favor of any person which are permitted or not otherwise
prohibited under the Indenture provided that such liens shall not attach to any
of the Collateral.
9.9 Indebtedness. Borrower shall not incur, create, assume, become or be
liable in any manner with respect to, or permit to exist, any obligations or
indebtedness, except: (a) the Obligations; (b) trade obligations and normal
accruals in the ordinary course of business not yet due and payable, or with
respect to which the Borrower is contesting in good faith the amount or validity
thereof by appropriate proceedings diligently pursued and available to Borrower,
and with respect to which adequate reserves have been set aside on its books;
(c) purchase money indebtedness (including capital leases) to the extent not
incurred or secured by liens (including capital leases) in violation of any
other provision of this Agreement; (d) indebtedness as permitted or not
otherwise prohibited under the Indenture (provided that, such indebtedness
(other than indebtedness due the Trustee or the noteholders under the Indenture
or "Additional Secured Indebtedness" as defined in the Indenture) is not secured
by the Collateral); and (e) the indebtedness set forth on Schedule 9.9 hereto;
provided, that, (i) Borrower may only make regularly scheduled payments of
principal and interest in respect of such indebtedness in accordance with the
terms of the agreement or instrument evidencing or giving rise to such
indebtedness as in effect on the date hereof, (ii) Borrower shall not, directly
or indirectly, (A) amend, modify, alter or change the terms of such indebtedness
or any agreement, document or instrument related thereto as in effect on the
date hereof, or (B) redeem, retire, defease, purchase or otherwise acquire
(except as provided for below) such indebtedness, or set aside or otherwise
deposit or invest any sums for such purpose, and (iii) Borrower shall furnish to
Lender all notices or demands in connection with such indebtedness either
received by Borrower or on its behalf, promptly after the receipt thereof, or
sent by Borrower or on its behalf, concurrently with the sending thereof, as the
case may be. Notwithstanding anything to the contrary contained in this Section
9.9, Borrower shall have the right to repurchase or otherwise acquire any
Securities (as defined in the Indenture), provided that, no Event of Default
exists and, after giving effect to such repurchase or acquisition, there shall
exist Excess Availability hereunder and under the Canadian Loan Agreement in an
aggregate amount of not less than $2,000,000.
9.10 Loans, Investments, Guarantees, Etc. Borrower shall not, directly or
indirectly, make any loans or advance money or property to any person, or invest
in (by capital contribution, dividend or otherwise) or purchase or repurchase
the stock or indebtedness or all or a substantial part of the assets or property
of any person, or guarantee, assume, endorse, or otherwise become responsible
for (directly or indirectly) the indebtedness, performance, obligations or
dividends of any Person or agree to do any of the foregoing, except: (a) loans
by Borrower to Statia Canada in an aggregate amount not to exceed $5,000,000 in
any fiscal year of Borrower, and loans by Borrower to Statia Terminals Delaware,
Inc. and Statia Delaware Hold Co. II, Inc. in an aggregate outstanding amount
not to exceed at any given time, $1,000,000, provided that, in each instance and
at the time any such loan is to be made (i) no Event of Default shall exist or
have occurred and be continuing or result from such loan and (ii) the Borrower
has Excess Availability, as determined by Lender immediately after
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giving effect to the making such loans, of not less than $1,000,000; (b) the
endorsement of instruments for collection or deposit in the ordinary course of
business; (c) investments in: (i) short-term direct obligations of the United
States Government, (ii) negotiable certificates of deposit issued by any bank
satisfactory to Lender, payable to the order of the Borrower or to bearer and
delivered to Lender, and (iii) commercial paper rated A1 or P1; and (d) the
loans, advances and guarantees set forth on Schedule 9.10 hereto or as permitted
or not otherwise prohibited under Sections 4.03 and 4.12 of the Indenture;
provided, that, as to such loans, advances and guarantees, (i) Borrower shall
not, directly or indirectly, (A) amend, modify, alter or change the terms of
such loans, advances or guarantees or any agreement, document or instrument
related thereto, including amending or modifying Sections 4.03 and 4.12 of the
Indenture as in effect on the date hereof, or (B) as to such guarantees, redeem,
retire, defease, purchase or otherwise acquire the obligations arising pursuant
to such guarantees, or set aside or otherwise deposit or invest any sums for
such purpose, except to the extent expressly provided for in the Indenture,
provided that, after giving effect thereto, the same shall not create an Event
of Default hereunder, and (ii) Borrower shall furnish to Lender all notices or
demands in connection with such loans, advances or guarantees or other
indebtedness subject to such guarantees either received by Borrower or on its
behalf, promptly after the receipt thereof, or sent by Borrower or on its
behalf, concurrently with the sending thereof, as the case may be.
9.11 Dividends and Redemptions. Borrower shall not, directly or
indirectly, declare or pay any dividends on account of any shares of class of
capital stock of Borrower now or hereafter outstanding, or set aside or
otherwise deposit or invest any sums for such purpose, or redeem, retire,
defease, purchase or otherwise acquire any shares of any class of capital stock
(or set aside or otherwise deposit or invest any sums for such purpose) for any
consideration other than common stock or apply or set apart any sum, or make any
other distribution (by reduction of capital or otherwise) in respect of any such
shares or agree to do any of the foregoing, except as permitted or not otherwise
prohibited under Sections 4.03 and 4.12 of the Indenture, provided that, after
giving effect to any such dividend or redemption, no Event of Default exists or
would exist hereunder. Borrower further agrees that it will not amend or modify
Sections 4.03 and 4.12 of the Indenture as in effect on the date hereof.
9.12 Transactions with Affiliates. Borrower shall not, directly or
indirectly, (a) purchase, acquire or lease any tangible property from, or sell,
transfer or lease any property to, any officer, director, agent or other person
affiliated with Borrower, except in the ordinary course of and pursuant to the
reasonable requirements of Borrower's business and upon fair and reasonable
terms no less favorable to the Borrower than Borrower would obtain in a
comparable arm's length transaction with an unaffiliated person or (b) make any
payments of management, consulting or other fees for management or similar
services, or of any indebtedness owing to any officer, employee, shareholder,
director or other person affiliated with Borrower, except (i) (A) reasonable
compensation to officers, employees and directors for services rendered to
Borrower in the ordinary course of business and (B) payments to EMT & Associates
for consulting services pursuant to its consulting agreement with Borrower and
payments to Statia Terminals, Inc. pursuant to its services agreement with
Borrower, and (ii) payments to Castle Harlan, Inc. as a management fee, provided
that, as of the date of such payment and after giving effect thereto,, no Event
of Default or act, condition or event which with notice or passage of time or
both would constitute an Event of Default shall exist or have occurred and be
continuing.
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9.13 Additional Bank Accounts. At any time on or after the initial
borrowings hereunder, Borrower shall not, directly or indirectly, open,
establish or maintain any deposit account, investment account or any other
account with any bank or other financial institution, other than the Blocked
Accounts and the accounts set forth in Schedule 8.8 hereto, except: (a) as to
any new or additional Blocked Accounts and other such new or additional accounts
which contain any Collateral or proceeds thereof, with the prior written consent
of Lender and subject to such conditions thereto as Lender may establish, (b) as
to any accounts used by Borrower to make payments of payroll, taxes or other
obligations to third parties, after prior written notice to Lender and (c) the
Collateral Account (as defined in the Indenture).
9.14 [Intentionally Omitted].
9.15 [Intentionally Omitted].
9.16 Costs and Expenses. Borrower shall pay to Lender on demand all
reasonable costs, expenses, filing fees and taxes paid or payable in connection
with the preparation, negotiation, execution, delivery, recording,
administration, collection, liquidation, enforcement and defense of the
Obligations, Lender's rights in the Collateral, this Agreement, the other
Financing Agreements and all other documents related hereto or thereto,
including any amendments, supplements or consents which may hereafter be
contemplated (whether or not executed) or entered into in respect hereof and
thereof, including: (a) all costs and expenses of filing or recording (including
Uniform Commercial Code financing statement filing taxes and fees, documentary
taxes, intangibles taxes and mortgage recording taxes and fees, if applicable);
(b) all insurance premiums, appraisal fees and search fees; (c) costs and
expenses of remitting loan proceeds, collecting checks and other items of
payment, and establishing and maintaining the Blocked Accounts, together with
Lender's customary charges and fees with respect thereto; (d) charges, fees or
expenses charged by any bank or issuer in connection with the Letter of Credit
Accommodations; (e) costs and expenses of preserving and protecting the
Collateral; (f) costs and expenses paid or incurred in connection with obtaining
payment of the Obligations, enforcing the security interests and liens of
Lender, selling or otherwise realizing upon the Collateral, and otherwise
enforcing the provisions of this Agreement and the other Financing Agreements or
defending any claims made or threatened against Lender arising out of the
transactions contemplated hereby and thereby (including preparations for and
consultations concerning any such matters); (g) all out-of-pocket expenses and
costs heretofore and from time to time hereafter incurred by Lender during the
course of periodic field examinations of the Collateral and Borrower's
operations, plus a per diem charge at the rate of $600 per person per day for
Lender's examiners in the field and office; and (h) the fees and disbursements
of counsel (including legal assistants) to Lender in connection with any of the
foregoing.
9.17 Further Assurances. At the request of Lender at any time and from
time to time, Borrower shall, at its expense, duly execute and deliver, or cause
to be duly executed and delivered, such further agreements, documents and
instruments, and do or cause to be done such further acts as may be necessary or
proper to evidence, perfect, maintain and enforce the security interests and the
priority thereof in the Collateral and to otherwise effectuate the provisions or
purposes of this Agreement or any of the other Financing Agreements. Lender may
at any time and from time to time request a certificate from an officer of
Borrower representing that all conditions precedent to the making of Loans and
providing Letter of Credit Accommodations contained herein are satisfied. In
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the event of such request by Lender, Lender may, at its option, cease to make
any further Loans or provide any further Letter of Credit Accommodations until
Lender has received such certificate and, in addition, Lender has determined
that such conditions are satisfied. Where permitted by law, Borrower hereby
authorizes Lender to execute and file one or more UCC financing statements
signed only by Lender.
SECTION 10. EVENTS OF DEFAULT AND REMEDIES
10.1 Events of Default. The occurrence or existence of any one or more of
the following events are referred to herein individually as an "Event of
Default", and collectively as "Events of Default":
(a) (i) Borrower fails to pay any of the Obligations within three
(3) days after the same becomes due and payable or (ii) Borrower or any Obligor
fails to perform any of the terms, covenants, conditions or provisions contained
in this Agreement or any of the other Financing Agreements other than as
described in Section 10.1(a)(i) and such failure shall continue for ten (10)
days; provided, that, such ten (10) day period shall not apply in the case of:
(A) any failure to observe any such term, covenant, condition or provision which
is not capable of being cured at all or within such ten (10) day period or which
has been the subject of a prior failure within a six (6) month period or (B) an
intentional breach by Borrower or any Obligor of any such term, covenant,
condition or provision, or (C) the failure to observe or perform any of the
covenants or provisions contained in Section 9.2, 9.7, 9.8 (with respect to
Collateral only), 9.9, 9.10, 9.11 or 9.12 of this Agreement or any covenants or
agreements covering substantially the same matter as such sections in any of the
other Financing Agreements;
(b) any representation, warranty or statement of fact made by
Borrower to Lender in this Agreement, the other Financing Agreements or any
other agreement, schedule, confirmatory assignment or otherwise shall when made
or deemed made be false or misleading in any material respect;
(c) any Obligor revokes, terminates or fails to perform any of the
terms, covenants, conditions or provisions of any guarantee, endorsement or
other agreement of such party in favor of Lender;
(d) any judgment for the payment of money is rendered against
Borrower or any Obligor in excess of $500,000 in any one case or in excess of
$1,000,000 in the aggregate and shall remain undischarged or unvacated for a
period in excess of thirty (30) days or execution shall at any time not be
effectively stayed, or any injunction, attachment, garnishment or execution
involving the Collateral, a substantial portion of the Borrower's or Obligor's
assets, or any other property owned by Borrower or Obligor materially necessary
for the conduct of the Borrower's or Obligor's respective businesses is rendered
against Borrower or any Obligor or any of such assets;
(e) any Obligor (being a natural person or a general partner of an
Obligor which is a partnership) dies or Borrower or any Obligor, which is a
partnership, limited liability company, limited liability partnership or a
corporation, dissolves or suspends or discontinues doing business;
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(f) Borrower or any Obligor becomes insolvent (or in the case of
Borrower's "faillissement", "vereffening", "surseance vean betaling" or any
other insolvency however defined or evidenced under the laws of the United
States of America, the Netherlands Antilles or otherwise), makes an assignment
for the benefit of creditors, makes or sends notice of a bulk transfer, calls a
meeting of its creditors or principal creditors, or a trustee, receiver or
liquidator is appointed or assigned under the laws of the United States of
America, the Netherlands Antilles or any other applicable law with respect to
any of the Collateral or all or substantially all of the assets of the Borrower
or any Obligor.
(g) a case or proceeding under the bankruptcy or insolvency laws of
the United States of America, the Netherlands Antilles (including, without
limitation, the Netherlands Antilles Bankruptcy Decree) or any similar federal,
state or foreign law for the relief of debtors, now or hereafter in effect or
under any insolvency, reorganization, receivership, readjustment of debt,
dissolution or liquidation law or statute of any jurisdiction now or hereafter
in effect (whether at law or in equity) is filed against Borrower or any Obligor
or all or any substantial part of its properties and such petition or
application is not dismissed within thirty (30) days after the date of its
filing or Borrower or any Obligor shall file any answer admitting or not
contesting such petition or application or indicates its consent to,
acquiescence in or approval of, any such action or proceeding or the relief
requested is granted sooner;
(h) a case or proceeding under the bankruptcy or insolvency laws of
the United States of America, the Netherlands Antilles (including, without
limitation, the Netherlands Antilles Bankruptcy Decree) or any similar federal,
state or foreign law for the relief of debtors, now or hereafter in effect or
under any insolvency, reorganization, receivership, readjustment of debt,
dissolution or liquidation law or statute of any jurisdiction now or hereafter
in effect (whether at a law or equity) is filed by Borrower or any Obligor or
for all or any part of its property; or
(i) any default by Borrower or any Obligor under any agreement,
document or instrument relating to any indebtedness for borrowed money owing to
any person other than Lender, or any capitalized lease obligations, contingent
indebtedness in connection with any guarantee, letter of credit, indemnity or
similar type of instrument in favor of any person other than Lender, in any case
in an amount in excess of $1,000,000, which default continues for more than the
applicable cure period, if any, with respect thereto, or any default by Borrower
or any Obligor under any material contract, lease, license or other obligation
to any person other than Lender, which default continues for more than the
applicable cure period, if any, with respect thereto;
(j) any change in the controlling ownership of Borrower;
(k) the indictment or threatened indictment of Borrower or any
Obligor under any criminal statute, or commencement or threatened commencement
of criminal or civil proceedings against Borrower or any Obligor, pursuant to
which statute or proceedings the penalties or remedies sought or available
include forfeiture of any of the property of Borrower or such Obligor;
(l) there shall be a material adverse change in the business, assets
or prospects of Borrower or any Obligor after the date hereof;
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(m) there shall be an event of default under the Canadian Loan
Agreement or any agreements, documents, instruments, notes or guaranties
executed and delivered in connection therewith;
(n) there shall be an event of default under the Indenture;
(o) the termination by Congress Financial Corporation (Canada) or
Statia Canada of those certain financing arrangements arising under or in
connection with the Canadian Loan Agreements;
(p) there shall be an event of default under any of the other
Financing Agreements; or
(q) the Trustee breaches, or otherwise fails to comply with, any of
the terms or provisions of the Access Agreement.
10.2 Remedies.
(a) At any time an Event of Default exists or has occurred and is
continuing, Lender shall have all rights and remedies provided in this
Agreement, the other Financing Agreements, the Uniform Commercial Code and other
applicable law, all of which rights and remedies may be exercised without notice
to or consent by Borrower or any Obligor, except as such notice or consent is
expressly provided for hereunder or required by applicable law. All rights,
remedies and powers granted to Lender hereunder, under any of the other
Financing Agreements, the Uniform Commercial Code or other applicable law, are
cumulative, not exclusive and enforceable, in Lender's discretion,
alternatively, successively, or concurrently on any one or more occasions, and
shall include, without limitation, the right to apply to a court of equity for
an injunction to restrain a breach or threatened breach by Borrower of this
Agreement or any of the other Financing Agreements. Lender may, at any time or
times, proceed directly against Borrower or any Obligor to collect the
Obligations without prior recourse to the Collateral.
(b) Without limiting the foregoing, at any time an Event of Default
exists or has occurred and is continuing, Lender may, in its discretion and
without limitation, (i) accelerate the payment of all Obligations and demand
immediate payment thereof to Lender (provided, that, upon the occurrence of any
Event of Default described in Sections 10.1(g) and 10.1(h), all Obligations
shall automatically become immediately due and payable), (ii) with or without
judicial process or the aid or assistance of others, enter upon any premises on
or in which any of the Collateral may be located and take possession of the
Collateral or complete processing, manufacturing and repair of all or any
portion of the Collateral, (iii) require Borrower, at Borrower's expense, to
assemble and make available to Lender any part or all of the Collateral at any
place and time designated by Lender, (iv) collect, foreclose, receive,
appropriate, setoff and realize upon any and all Collateral, (v) remove any or
all of the Collateral from any premises on or in which the same may be located
for the purpose of effecting the sale, foreclosure or other disposition thereof
or for any other purpose, (vi) sell, lease, transfer, assign, deliver or
otherwise dispose of any and all Collateral (including entering into contracts
with respect thereto, public or private sales at any exchange, broker's board,
at any office of Lender or elsewhere) at such prices or terms as Lender may deem
reasonable, for cash, upon credit or for future delivery, with the Lender having
the right to purchase the whole or any part of the
33
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Collateral at any such public sale, all of the foregoing being free from any
right or equity of redemption of Borrower, which right or equity of redemption
is hereby expressly waived and released by Borrower and/or (vii) terminate this
Agreement. If any of the Collateral is sold or leased by Lender upon credit
terms or for future delivery, the Obligations shall not be reduced as a result
thereof until payment therefor is finally collected by Lender. If notice of
disposition of Collateral is required by law, five (5) days prior notice by
Lender to Borrower designating the time and place of any public sale or the time
after which any private sale or other intended disposition of Collateral is to
be made, shall be deemed to be reasonable notice thereof and Borrower waives any
other notice. In the event Lender institutes an action to recover any Collateral
or seeks recovery of any Collateral by way of prejudgment remedy, Borrower
waives the posting of any bond which might otherwise be required.
(c) Lender may apply the cash proceeds of Collateral actually
received by Lender from any sale, lease, foreclosure or other disposition of the
Collateral to payment of the Obligations, in whole or in part and in such order
as Lender may elect, whether or not then due. Borrower shall remain liable to
Lender for the payment of any deficiency with interest at the highest rate
provided for herein and all costs and expenses of collection or enforcement,
including attorneys' fees and legal expenses.
(d) Without limiting the foregoing, upon the occurrence of an Event
of Default or an event which with notice or passage of time or both would
constitute an Event of Default, Lender may, at its option, without notice, (i)
cease making Loans or arranging for Letter of Credit Accommodations or reduce
the lending formulas or amounts of Revolving Loans and Letter of Credit
Accommodations available to Borrower and/or (ii) terminate any provision of this
Agreement providing for any future Loans or Letter of Credit Accommodations to
be made by Lender to Borrower.
SECTION 11. JURY TRIAL WAIVER; OTHER WAIVERS AND CONSENTS; GOVERNING LAW
11.1 Governing Law; Choice of Forum; Service of Process; Jury Trial
Waiver.
(a) The validity, interpretation and enforcement of this Agreement
and the other Financing Agreements and any dispute arising out of the
relationship between the parties hereto, whether in contract, tort, equity or
otherwise, shall be governed by the internal laws of the State of New York
(without giving effect to principles of conflicts of law).
(b) Borrower and Lender irrevocably consent and submit to the
non-exclusive jurisdiction of the Supreme Court of the State of New York and the
United States District Court for the Southern District of New York and waive any
objection based on venue or forum non conveniens with respect to any action
instituted therein arising under this Agreement or any of the other Financing
Agreements or in any way connected with or related or incidental to the dealings
of the parties hereto in respect of this Agreement or any of the other Financing
Agreements or the transactions related hereto or thereto, in each case whether
now existing or hereafter arising, and whether in contract, tort, equity or
otherwise, and agree that any dispute with respect to any such matters shall be
heard only in the courts described above (except that Lender shall have the
right to
34
<PAGE>
bring any action or proceeding against Borrower or its property in the courts of
any other jurisdiction which Lender deems necessary or appropriate in order to
realize on the Collateral or to otherwise enforce its rights against Borrower or
its property).
(c) Borrower hereby waives personal service of any and all process
upon it and consents that all such service of process may be made by certified
mail (return receipt requested) directed to its address set forth on the
signature pages hereof and service so made shall be deemed to be completed five
(5) days after the same shall have been so deposited in the U.S. mails, or, at
Lender's option, by service upon Borrower in any other manner provided under the
rules of any such courts. Within thirty (30) days after such service, Borrower
shall appear in answer to such process, failing which Borrower shall be deemed
in default and judgment may be entered by Lender against Borrower for the amount
of the claim and other relief requested.
(d) BORROWER AND LENDER EACH HEREBY WAIVES ANY RIGHT TO TRIAL BY
JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (i) ARISING UNDER THIS
AGREEMENT OR ANY OF THE OTHER FINANCING AGREEMENTS OR (ii) IN ANY WAY CONNECTED
WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO IN RESPECT
OF THIS AGREEMENT OR ANY OF THE OTHER FINANCING AGREEMENTS OR THE TRANSACTIONS
RELATED HERETO OR THERETO IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER
ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY OR OTHERWISE. BORROWER AND LENDER
EACH HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF
ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT BORROWER OR
LENDER MAY FILE AN ORIGINAL COUNTERPART OF A COPY OF THIS AGREEMENT WITH ANY
COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF
THEIR RIGHT TO TRIAL BY JURY.
(e) Lender shall not have any liability to Borrower (whether in
tort, contract, equity or otherwise) for losses suffered by Borrower in
connection with, arising out of, or in any way related to the transactions or
relationships contemplated by this Agreement, or any act, omission or event
occurring in connection herewith, unless it is determined by a final and
non-appealable judgment or court order binding on Lender, that the losses were
the result of acts or omissions constituting gross negligence or willful
misconduct. In any such litigation, Lender shall be entitled to the benefit of
the rebuttable presumption that it acted in good faith and with the exercise of
ordinary care in the performance by it of the terms of this Agreement.
11.2 Waiver of Notices. Borrower hereby expressly waives demand,
presentment, protest and notice of protest and notice of dishonor with respect
to any and all instruments and commercial paper, included in or evidencing any
of the Obligations or the Collateral, and any and all other demands and notices
of any kind or nature whatsoever with respect to the Obligations, the Collateral
and this Agreement, except such as are expressly provided for herein. No notice
to or demand on Borrower which Lender may elect to give shall entitle Borrower
to any other or further notice or demand in the same, similar or other
circumstances.
11.3 Amendments and Waivers. Neither this Agreement nor any provision
hereof shall be amended, modified, waived or discharged orally or by course of
conduct, but only by a written
35
<PAGE>
agreement signed by an authorized officer of Lender, and as to amendments, as
also signed by an authorized officer of Borrower. Lender shall not, by any act,
delay, omission or otherwise be deemed to have expressly or impliedly waived any
of its rights, powers and/or remedies unless such waiver shall be in writing and
signed by an authorized officer of Lender. Any such waiver shall be enforceable
only to the extent specifically set forth therein. A waiver by Lender of any
right, power and/or remedy on any one occasion shall not be construed as a bar
to or waiver of any such right, power and/or remedy which Lender would otherwise
have on any future occasion, whether similar in kind or otherwise.
11.4 Waiver of Counterclaims. Borrower waives all rights to interpose any
claims, deductions, setoffs or counterclaims of any nature (other then
compulsory counterclaims) in any action or proceeding with respect to this
Agreement, the Obligations, the Collateral or any matter arising therefrom or
relating hereto or thereto.
11.5 Indemnification. Borrower shall indemnify and hold Lender, and its
directors, agents, employees and counsel, harmless from and against any and all
losses, claims, damages, liabilities, costs or expenses imposed on, incurred by
or asserted against any of them in connection with any litigation,
investigation, claim or proceeding commenced or threatened related to the
negotiation, preparation, execution, delivery, enforcement, performance or
administration of this Agreement, any other Financing Agreements, or any
undertaking or proceeding related to any of the transactions contemplated hereby
or any act, omission, event or transaction related or attendant thereto,
including amounts paid in settlement, court costs, and the fees and expenses of
counsel. To the extent that the undertaking to indemnify, pay and hold harmless
set forth in this Section may be unenforceable because it violates any law or
public policy, Borrower shall pay the maximum portion which it is permitted to
pay under applicable law to Lender in satisfaction of indemnified matters under
this Section. The foregoing indemnity shall survive the payment of the
Obligations and the termination or non-renewal of this Agreement.
SECTION 12. TERM OF AGREEMENT; MISCELLANEOUS
12.1 Term.
(a) This Agreement and the other Financing Agreements shall become
effective as of the date set forth on the first page hereof and shall continue
in full force and effect for a term ending on the date three (3) years from the
date hereof (the "Renewal Date"), and from year to year thereafter, unless
sooner terminated pursuant to the terms hereof. Lender may terminate this
Agreement and the other Financing Agreements effective on the Renewal Date or on
the anniversary of the Renewal Date in any year by giving Borrower at least
sixty (60) days prior written notice, and Borrower may terminate this Agreement
at any time by giving Lender at least sixty (60) days prior written notice;
provided, that, this Agreement and all other Financing Agreements must be
terminated simultaneously. Upon the effective date of termination or non-renewal
of the Financing Agreements, Borrower shall pay to Lender, in full, all
outstanding and unpaid Obligations together with all amounts payable pursuant to
the terms of Section 12.1(c) hereof, and shall furnish cash collateral to Lender
in such amounts as Lender determines are reasonably necessary to secure Lender
from loss, cost, damage or expense, including attorneys' fees and legal
expenses, in connection with any
36
<PAGE>
contingent Obligations, including issued and outstanding Letter of Credit
Accommodations and checks or other payments provisionally credited to the
Obligations and/or as to which Lender has not yet received final and
indefeasible payment. Such payments in respect of the Obligations and cash
collateral shall be remitted by wire transfer in Federal funds to such bank
account of Lender, as Lender may, in its discretion, designate in writing to
Borrower for such purpose. Interest shall be due until and including the next
business day, if the amounts so paid by Borrower to the bank account designated
by Lender are received in such bank account later than 12:00 noon, New York City
time.
(b) No termination of this Agreement or the other Financing
Agreements shall relieve or discharge Borrower of its respective duties,
obligations and covenants under this Agreement or the other Financing Agreements
until all Obligations have been fully and finally discharged and paid, and
Lender's continuing security interest in the Collateral and the rights and
remedies of Lender hereunder, under the other Financing Agreements and
applicable law, shall remain in effect until all such Obligations have been
fully and finally discharged and paid.
(c) If for any reason this Agreement is terminated prior to the end
of the initial term, in view of the impracticality and extreme difficulty of
ascertaining actual damages and by mutual agreement of the parties as to a
reasonable calculation of Lender's lost profits as a result thereof, Borrower
agrees to pay to Lender, upon the effective date of such termination, an early
termination fee in the amount set forth below if such termination is effective
in the period indicated:
Amount Period
------ ------
(i) 3.0% of Maximum Credit From the date hereof to and including
November 26, 1997
(ii) 2.0% of Maximum Credit From November 27, 1997 to and
including November 26, 1998
(iii) 1.0% of Maximum Credit From November 27, 1998 to and
including November 26, 1999
Such early termination fee shall be presumed to be the amount of damages
sustained by Lender as a result of such early termination and Borrower agrees
that it is reasonable under the circumstances currently existing. In addition,
Lender shall be entitled to such early termination fee upon the occurrence of
any Event of Default described in Sections 10.1(g) and 10.1(h) hereof, even if
Lender does not exercise its right to terminate this Agreement, but elects, at
its option, to provide financing to Borrower or permit the use of cash
collateral under the United States Bankruptcy Code. The early termination fee
provided for in this Section 12.1 shall be deemed included in the Obligations.
(d) Notwithstanding anything to the contrary contained herein, if
Borrower requests Lender to consent to a merger or consolidation as required
under Section 9.7(a) of this Agreement (the "Merger") and Lender advises
Borrower, in writing, that Lender does not consent to such Merger, then Borrower
shall have the right to terminate this Agreement upon not less than ten (10)
business days prior written notice to Lender, and Lender agrees to waive the
early termination fee which would otherwise be required to be paid hereunder,
provided that, (i) such termination occurs within ninety (90) days after Lender
notifies Borrower that it will not consent to the Merger and (ii) the Merger,
37
<PAGE>
in fact, occurs effective as of the termination date of this Agreement. If
either of the conditions of this Section 12.1(d)(i) and (ii) are not complied
with by Borrower, then the Borrower shall pay Lender the early termination fee
as provided for in Section 12.1(c) in connection with the termination of this
Agreement.
12.2 Notices. All notices, requests and demands hereunder shall be in
writing and (a) made to Lender at its address set forth below and to Borrower at
its chief executive office set forth below, or to such other address as either
party may designate by written notice to the other in accordance with this
provision, and (b) deemed to have been given or made: if delivered in person,
immediately upon delivery; if by telex, telegram or facsimile transmission,
immediately upon sending and upon confirmation of receipt; if by nationally
recognized overnight courier service with instructions to deliver the next
business day, one (1) business day after sending; and if by certified mail,
return receipt requested, five (5) days after mailing.
12.3 Partial Invalidity. If any provision of this Agreement is held to be
invalid or unenforceable, such invalidity or unenforceability shall not
invalidate this Agreement as a whole, but this Agreement shall be construed as
though it did not contain the particular provision held to be invalid or
unenforceable and the rights and obligations of the parties shall be construed
and enforced only to such extent as shall be permitted by applicable law.
12.4 Successors. This Agreement, the other Financing Agreements and any
other document referred to herein or therein shall be binding upon and inure to
the benefit of and be enforceable by Lender, Borrower and their respective
successors and assigns, except that Borrower may not assign its rights under
this Agreement, the other Financing Agreements and any other document referred
to herein or therein without the prior written consent of Lender. Lender may,
after notice to Borrower, assign its rights and delegate its obligations under
this Agreement and the other Financing Agreements and further may assign, or
sell participations in, all or any part of the Loans, the Letter of Credit
Accommodations or any other interest herein to another financial institution or
other person, in which event, the assignee or participant shall have, to the
extent of such assignment or participation, the same rights and benefits as it
would have if it were the Lender hereunder, except as otherwise provided by the
terms of such assignment or participation, provided further that, if Lender
assigns all of its rights and interests hereunder and as of the date of such
assignment, no Event of Default exists and is continuing, the Borrower or the
Obligor, as the case may be, shall not be obligated to pay additional amounts
pursuant to the second sentence of Section 9.4(a) to the extent that such
amounts exceed the amounts that would have otherwise been payable to the
assignor had such assignor not made such assignment or transfer, except that,
the foregoing proviso shall not apply in the event that Lender assigns its
rights and interests hereunder after the occurrence of an Event of Default and
during its continuance.
12.5 Entire Agreement. This Agreement, the other Financing Agreements, any
supplements hereto or thereto, and any instruments or documents delivered or to
be delivered in connection herewith or therewith represents the entire agreement
and understanding concerning the subject matter hereof and thereof between the
parties hereto, and supersede all other prior agreements, understandings,
negotiations and discussions, representations, warranties, commitments,
proposals, offers and contracts concerning the subject matter hereof, whether
oral or written. In the event of any
38
<PAGE>
inconsistency between the terms of this Agreement and any schedule or exhibit
hereto, the terms of this Agreement shall govern.
IN WITNESS WHEREOF, Lender and Borrower have caused these presents to be
duly executed as of the day and year first above written.
LENDER BORROWER
- ------ --------
CONGRESS FINANCIAL CORPORATION STATIA TERMINALS N.V.
(FLORIDA)
By: /s/ Daniel E. Wolf By: /s/ James G. Cameron
---------------------- -------------------------
Title: Senior Vice President Title: Managing Director
-------------------------- ----------------------
Address: Chief Executive Office:
- -------- -----------------------
777 Brickell Avenue, Suite 808 Tumble Down Dick Bay
Miami, Florida 33131 St. Eustatius, Netherlands Antilles
39
<PAGE>
Loan Agreement
by and among
CONGRESS FINANCIAL CORPORATION (CANADA)
as Lender
and
STATIA TERMINALS CANADA, INCORPORATED,
POINT TUPPER MARINE SERVICES LIMITED
as Borrowers
Dated: November 27, 1996
<PAGE>
TABLE OF CONTENTS
SECTION 1. DEFINITIONS
1.1 "Access Agreement"....................................... 2
1.2 "Accounts"............................................... 2
1.3 "Availability Reserves".................................. 2
1.4 "BIA".................................................... 2
1.5 "Blocked Accounts"....................................... 2
1.6 "Canadian Dollar Amount"................................. 2
1.7 "CCAA"................................................... 3
1.8 "Collateral"............................................. 3
1.9 "Congress US"............................................ 3
1.10 "Currency Exchange Convention"........................... 3
1.11 "Debentures"............................................. 3
1.12 "Eligible Accounts"...................................... 3
1.13 "Eligible Inventory"..................................... 5
1.15 "Equipment".............................................. 6
1.16 "Event of Default"....................................... 6
1.17 "Excess Availability".................................... 6
1.18 "Financing Agreements"................................... 6
1.19 "First Mortgage Notes"................................... 6
1.20 "GAAP"................................................... 7
1.21 "General Assignments of Accounts Receivable"............. 7
1.22 "General Security Agreement"............................. 7
1.23 "Hazardous Materials".................................... 7
1.24 "Hypothecs".............................................. 7
1.25 "Indenture".............................................. 7
1.26 "Information Certificate"................................ 8
1.27 "Inventory".............................................. 8
1.28 "Letter of Credit Accommodations"........................ 8
1.29 "Loans".................................................. 8
1.30 "Maximum Credit"......................................... 8
1.31 "Net Amount of Eligible Accounts"........................ 8
1.32 "Noteholder Collateral" ................................. 8
1.33 "Obligations"............................................ 8
1.34 "Obligor"................................................ 9
1.35 "Payment Account"........................................ 9
1.36 "Person" or "person"..................................... 9
1.37 "Personal Property Security Legislation"................. 9
1.38 "PPSA"................................................... 9
1.39 "Prime Rate"............................................. 9
1.40 "Priority Payables Reserve".............................. 9
1.41 "Records"................................................ 10
1.42 "Revolving Loans"........................................ 10
<PAGE>
1.43 "Seven Seas"............................................. 10
1.44 "Statia N.V."............................................ 10
1.45 "Trustee"................................................ 10
1.46 "UCC".................................................... 10
1.47 "US Financing Agreements"................................ 10
1.48 "US Loan Agreement"...................................... 10
1.49 "Value".................................................. 11
SECTION 2. CREDIT FACILITIES
2.1 Revolving Loans........................................... 11
2.2 Letter of Credit Accommodations........................... 12
2.3 Availability Reserves..................................... 14
SECTION 3. INTEREST AND FEES
3.1 Interest.................................................. 15
3.2 Closing Fee............................................... 16
3.3 Servicing Fee............................................. 16
3.4 Unused Line Fee........................................... 16
SECTION 4. CONDITIONS PRECEDENT
4.1 Conditions Precedent to Initial Loans and Letter of
Credit Accommodations................................... 16
4.2 Conditions Precedent to All Loans and Letter
of Credit Accommodations................................ 18
SECTION 5. ......................................................... 19
SECTION 6. COLLECTION AND ADMINISTRATION
6.1 Borrowers' Loan Accounts.................................. 19
6.2 Statements................................................ 19
6.3 Collection of Accounts.................................... 19
6.4 Payments.................................................. 20
6.5 Authorization to Make Loans............................... 21
6.6 Use of Proceeds........................................... 22
<PAGE>
SECTION 7. COLLATERAL REPORTING AND COVENANTS
7.1 Collateral Reporting...................................... 22
7.2 Accounts Covenants........................................ 23
7.3 Inventory Covenants....................................... 24
7.4 Equipment Covenants....................................... 25
7.5 Power of Attorney......................................... 25
7.6 Right to Cure............................................. 26
7.7 Access to Premises........................................ 27
SECTION 8. REPRESENTATIONS AND WARRANTIES
8.1 Corporate Existence, Power and Authority; Subsidiaries.... 27
8.2 Financial Statements; No Material Adverse Change.......... 27
8.3 Chief Executive Office; Collateral Locations.............. 28
8.4 Priority of Liens; Title to Properties.................... 28
8.5 Tax Returns............................................... 28
8.6 Litigation................................................ 28
8.7 Compliance with Other Agreements and Applicable Laws...... 29
8.8 Bank Accounts............................................. 29
8.9 Accuracy and Completeness of Information.................. 29
8.10 Environmental Compliance.................................. 30
8.11 Capitalization............................................ 30
8.12 Survival of Warranties; Cumulative........................ 31
SECTION 9. AFFIRMATIVE AND NEGATIVE COVENANTS
9.1 Maintenance of Existence.................................. 31
9.2 New Collateral Locations.................................. 31
9.3 Compliance with Laws, Regulations, Etc.................... 32
9.4 Payment of Taxes and Claims............................... 33
9.5 Insurance....................................................
9.6 Financial Statements and Other Information................ 34
9.7 Sale of Assets, Consolidation, Amalgamation, Dissolution,
Etc..................................................... 36
9.8 Encumbrances.............................................. 36
9.9 Indebtedness.............................................. 37
9.10 Loans, Investments, Guarantees, Etc....................... 37
9.11 Dividends and Redemptions................................. 38
9.12 Transactions with Affiliates.............................. 38
9.13 Additional Bank Accounts.................................. 38
9.14 Applications under the Companies' Creditors Arrangement
Act..................................................... 39
9.15 Intentionally Deleted..................................... 39
9.16 Costs and Expenses........................................ 39
<PAGE>
9.17 Further Assurances........................................ 40
SECTION 10. EVENTS OF DEFAULT AND REMEDIES
10.1 Events of Default........................................ 41
10.2 Remedies................................................. 44
SECTION 11. JURY TRIAL WAIVER; OTHER WAIVERS
AND CONSENTS; GOVERNING LAW
11.1 Governing Law; Choice of Forum; Service of Process;
Jury Trial Waiver...................................... 46
11.2 Waiver of Notices........................................ 47
11.3 Amendments and Waivers................................... 48
11.4 Waiver of Counterclaims.................................. 48
11.5 Indemnification.......................................... 48
SECTION 12. TERM OF AGREEMENT; MISCELLANEOUS
12.1 Term..................................................... 49
12.2 Notices.................................................. 50
12.3 Partial Invalidity....................................... 51
12.4 Successors............................................... 51
12.5 Joint and Several Liability.............................. 51
12.6 Suretyship Waivers and Consents.......................... 52
12.7 Entire Agreement......................................... 54
12.8 Headings................................................. 55
12.9 Judgment Currency........................................ 55
<PAGE>
INDEX TO
EXHIBITS AND SCHEDULES
Exhibit A Information Certificate
Schedule 8.4 Existing Liens
Schedule 8.8 Bank Accounts
Schedule 8.10 Environmental Compliance
Schedule 8.11(a) Share Encumbrances
Schedule 9.9 Existing Indebtedness
Schedule 9.10 Existing Loans, Advances and Guarantees
<PAGE>
LOAN AGREEMENT
This Loan Agreement dated November 27, 1996 is entered into by and between
Congress Financial Corporation (Canada), an Ontario corporation ("Lender") and
Statia Terminals Canada, Incorporated, a Nova Scotia corporation and Point
Tupper Marine Services Limited, a Nova Scotia corporation (each a "Borrower" and
collectively, the "Borrowers").
W I T N E S S E T H:
WHEREAS, Borrowers have requested that Lender enter into certain financing
arrangements with Borrowers pursuant to which Lender may make loans and provide
other financial accommodations to Borrowers;
WHEREAS, Congress Financial Corporation (Florida) ("Congress US") has been
requested to enter into certain financing arrangements with Statia Terminals
N.V. ("Statia N.V.") in the United States of America pursuant to which Congress
US may make loans and provide other financial accommodations to Statia N.V.; and
WHEREAS, Lender is willing to make such loans and provide such financial
accommodations on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual conditions and agreements
set forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
SECTION 1. DEFINITIONS
All terms used herein which are defined in the PPSA shall have the
meanings given therein unless otherwise defined in this Agreement. All
references to the plural herein shall also mean the singular and to the singular
shall also mean the plural. All references to Borrowers and Lender pursuant to
the definitions set forth in the recitals hereto, or to any other person herein,
shall include their respective successors and assigns. The words "hereof",
"herein", "hereunder", "this Agreement" and words of similar import when used in
this Agreement shall refer to this Agreement as a whole and not any particular
provision of this Agreement and as this Agreement now exists or may hereafter be
amended, modified, supplemented, extended, renewed, restated or replaced.
References herein to any statute or
<PAGE>
any provision thereof include such statute or provision as amended, revised,
re-enacted, and/or consolidated from time to time and any successor statute
thereto. An Event of Default shall exist or continue or be continuing until such
Event of Default is waived in accordance with Section 11.3 or is cured in a
manner satisfactory to Lender. Any accounting term used herein unless otherwise
defined in this Agreement shall have the meanings customarily given to such term
in accordance with GAAP. Canadian Dollars and the sign "$" mean lawful money of
Canada. "US Dollars" and the sign "US$" mean lawful money of the United States
of America. For purposes of this Agreement, the following terms shall have the
respective meanings given to them below:
1.1 "Access Agreement" shall mean, collectively, that certain Access, Use
and Intercreditor Agreement, dated the date hereof, by and among Lender,
Congress US and Trustee and that certain Access, Use and Intercreditor
Agreement, dated the date hereof, by and between Lender and Trustee.
1.2 "Accounts" shall mean all present and future rights of a Borrower to
payment for goods sold or leased or for services rendered, which are not
evidenced by instruments or chattel paper, and whether or not earned by
performance.
1.3 "Availability Reserves" shall mean, as of any date of determination,
such amounts as Lender may from time to time establish and revise in good faith
reducing the amount of Revolving Loans and Letter of Credit Accommodations which
would otherwise be available to Borrowers under the lending formula(s) provided
for herein: (a) to reflect events, conditions, contingencies or risks which, as
determined by Lender in good faith, do or may affect either (i) the Collateral
or any other property which is security for the Obligations or its value, (ii)
the assets, business or prospects of either Borrower or any Obligor or (iii) the
security interests, charges, liens and other rights of Lender in the Collateral
(including the enforceability, perfection, protection and priority thereof) or
(b) to reflect Lender's good faith belief that any collateral report or
financial information furnished by or on behalf of either Borrower or any
Obligor to Lender is or may have been incomplete, inaccurate or misleading in
any material respect or (c) to reflect Lender's good faith estimate of the
amount of any Priority Payables Reserve, or (d) in respect of any state of facts
which Lender determines in good faith constitutes an Event of Default or may,
with notice or passage of time or both, constitute an Event of Default.
1.4 "BIA" shall mean the Bankruptcy and Insolvency Act (Canada).
1.5 "Blocked Accounts" shall have the meaning set forth in Section 6.3
hereof.
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1.6 "Canadian Dollar Amount" means, in respect of any amount, the sum of:
(a) such portion, if any, of such amount denominated in Canadian
Dollars; and
(b) to the extent that a portion of such amount is denominated in US
Dollars, the amount in Canadian Dollars calculated by Lender using the Currency
Exchange Convention in effect on the Business Day of determination.
1.7 "CCAA" shall mean the Companies' Creditors Arrangement Act (Canada).
1.8 "Collateral" shall mean, collectively, Collateral as such term is
defined in the General Security Agreement, Collateral as such term is defined in
the Debentures, Accounts as such term is defined in the General Assignments of
Accounts Receivable, and hypothecated claims as such term is defined in the
Hypothecs.
1.9 "Congress US" shall mean Congress Financial Corporation (Florida), a
Florida corporation, and its successors and assigns.
1.10 "Currency Exchange Convention" shall mean a procedure used by Lender
to value in Canadian Dollars (i) the obligations or assets of Borrowers or their
affiliates that are originally measured in US Dollars or (ii) any other amount
expressed in US Dollars herein by using the spot price for US Dollars provided
to Lender by Bank of Montreal for the preceding business day. In the event Bank
of Montreal no longer provides appropriate spot prices for US Dollars to Lender,
Lender shall obtain a US Dollar spot price from another Canadian bank selected
in good faith by Lender.
1.11 "Debentures" shall mean the debentures dated on or about the date
hereof granted by each Borrower in favour of Lender in respect of the
Obligations.
1.12 "Eligible Accounts" shall mean Accounts created by either Borrower
which are and continue to be acceptable to Lender based on the criteria set
forth below. In general, Accounts shall be Eligible Accounts if:
(a) such Accounts arise from the actual and bona fide sale and
delivery of goods by either Borrower or rendition of services by either Borrower
in the ordinary course of its business which transactions are completed in
accordance with the terms and provisions contained in any documents related
thereto;
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(b) such Accounts are not unpaid more than ninety (90) days after
the date of the original invoice for them;
(c) such Accounts comply with the terms and conditions contained in
Section 7.2(c) of this Agreement;
(d) such Accounts do not arise from sales which are on terms under
which payment by the account debtor is conditional or contingent;
(e) such Accounts do not consist of progress billings, bill and hold
invoices or retainage invoices, except as to bill and hold invoices, if Lender
shall have received an agreement in writing from the account debtor, in form and
substance satisfactory to Lender, confirming the unconditional obligation of the
account debtor to take the goods related thereto and pay such invoice and except
as to progress billings to the extent that the applicable Borrower has performed
the services represented by the Account and the applicable Borrower has no
further obligations in respect thereof;
(f) the account debtor with respect to such Accounts has not
asserted a counterclaim, defense or dispute and does not have, and does not
engage in transactions which may give rise to, any right of setoff against such
Accounts (but the portion of the Accounts of such account debtor in excess of
the amount at any time and from time to time owned by Borrowers to such account
debtor or claimed owed by such account debtor may be deemed Eligible Accounts);
(g) there are no facts, events or occurrences which would impair the
validity, enforceability or collectability of such Accounts or reduce the amount
payable or delay payment thereunder;
(h) such Accounts are subject to the first priority and valid and
perfected (to the extent applicable) security interest, charge and lien of
Lender and any goods giving rise thereto are not, and were not at the time of
the sale thereof, subject to any liens except those permitted in this Agreement;
(i) neither the account debtor nor any officer or employee of the
account debtor with respect to such Accounts is an officer, employee or agent of
or affiliated with either Borrower directly or indirectly by virtue of family
membership, ownership, control, management or otherwise;
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(j) there are no proceedings or actions which are threatened or
pending against the account debtors with respect to such Accounts which might
result in any material adverse change in any such account debtor's financial
condition;
(k) such Accounts of a single account debtor or its affiliates do
not constitute more than twenty (20%) percent of the aggregate amount of all
otherwise Eligible Accounts of the Borrowers under this Agreement and the
Eligible Accounts of Statia N.V. and Seven Seas under the US Loan Agreement (but
the portion of the Accounts not in excess of such percentage may be deemed
Eligible Accounts);
(l) such Accounts are not owed by an account debtor who has Accounts
unpaid more than ninety (90) days after the date of the original invoice for
them which constitute more than fifty (50%) percent of the total Accounts of
such account debtor;
(m) such Accounts are owed by account debtors whose total
indebtedness to Borrowers does not exceed the credit limit with respect to such
account debtors as mutually agreed upon by Lender and Borrowers from time to
time (but the portion of the Accounts not in excess of such credit limit may
still be deemed Eligible Accounts); and
(n) such Accounts are owed by account debtors deemed creditworthy at
all times by Lender, as reasonably determined by Lender.
General criteria for Eligible Accounts may be established and revised from time
to time by Lender in good faith. Any Accounts which are not Eligible Accounts
shall nevertheless be part of the Collateral.
1.13 "Eligible Inventory" shall mean Inventory consisting of oil, fuel and
related petroleum products which could be sold in the ordinary course of the
business of either Borrower ("finished goods") which are acceptable to Lender
based on the criteria set forth below. In general, Eligible Inventory shall not
include (a) work-in-process; (b) components which are not part of finished
goods; (c) spare parts for equipment; (d) packaging and shipping materials; (e)
supplies used or consumed in either Borrower's business; (f) Inventory at
premises other than those owned and controlled by a Borrower, including, without
limitation, Inventory stored in tanks owned or controlled by Persons other than
a Borrower or Inventory which is in transit to a Borrower, except if Lender
shall have received an agreement in writing from the person in possession of
such Inventory and/or the owner or operator of such premises in form and
substance satisfactory to Lender acknowledging Lender's first priority security
interest, lien and charge in the Inventory, waiving security interests, liens
and charges and claims by such person against the Inventory and permitting
Lender access to such Inventory
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and the right to remain on the premises where such Inventory is located so as to
exercise Lender's rights and remedies and otherwise deal with the Collateral;
(g) Inventory subject to a security interest or lien in favour of any person
other than Lender except those permitted in this Agreement; (h) bill and hold
goods; (i) unserviceable, obsolete or slow moving Inventory; (j) Inventory which
is not subject to the first priority, valid and perfected (to the extent
applicable) security interest, lien and charge of Lender; (k) returned, damaged
and/or defective Inventory; (l) Inventory purchased or sold on consignment; and
(m) Inventory which is subject to any throughput contracts and storage
contracts. General criteria for Eligible Inventory may be established and
revised from time to time by Lender in good faith. Any Inventory which is not
Eligible Inventory shall nevertheless be part of the Collateral.
1.14 "Environmental Laws" shall mean with respect to any Person all
federal (United States of America and Canada), state, provincial, district,
local, municipal and foreign laws, statutes, rules, regulations, ordinances,
orders, directives, permits, licenses and consent decrees relating to health,
safety, hazardous, dangerous or toxic substances, waste or material, pollution
and environmental matters, as now or at any time hereafter in effect, applicable
to such Person and/or its business and facilities (whether or not owned by it),
including laws relating to emissions, discharges, releases or threatened
releases of pollutants, contamination, chemicals, or hazardous, toxic or
dangerous substances, materials or wastes into the environment (including,
without limitation, ambient air, surface water, ground water, land surface or
subsurface strata) or otherwise relating to the generation, manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of pollutants, contaminants, chemicals, or hazardous, toxic or
dangerous substances, materials or wastes.
1.15 "Equipment" shall mean all of each Borrower's now owned and hereafter
acquired equipment (exclusive of each Borrower's vehicles and computers),
machinery, fixtures, all attachments, accessions and property now or hereafter
affixed thereto or used in connection therewith, and substitutions and
replacements thereof, wherever located.
1.16 "Event of Default" shall mean the occurrence or existence of any
event or condition described in Section 10.1 hereof.
1.17 "Excess Availability" shall mean the Canadian Dollar Amount, as
determined by Lender, calculated at any time, equal to: (a) the lesser of: (i)
the gross amount of the Revolving Loans which would be available to Borrowers
pursuant to Section 2.1 from time to time if no Loans or Letters of Credit
Accommodations were outstanding and (ii) the Maximum Credit, minus (b) the sum
of: (i) the amount of all then outstanding and unpaid Obligations, plus (ii) the
aggregate amount of all trade payables of each Borrower which are more than
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sixty (60) days past due as of such time (other than trade payables which such
Borrower is contesting in good faith).
1.18 "Financing Agreements" shall mean, collectively, this Agreement, the
General Security Agreement, the Debentures, the General Assignments of Accounts
Receivable, the Hypothecs, if any, and all notes, guarantees, security
agreements and other agreements, documents and instruments now or at any time
hereafter executed and/or delivered by either Borrower or any Obligor in
connection with this Agreement, as the same now exist or may hereafter be
amended, modified, supplemented, extended, renewed, restated or replaced.
1.19 "First Mortgage Notes" shall mean the US$135,000,000 11 3/4% First
Mortgage Notes issued by Statia Terminals International N.V. and Statia
Terminals Canada, Incorporated.
1.20 "GAAP" shall mean generally accepted accounting principles in the
United States of America as in effect from time to time as set forth in the
opinions and pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and the statements and pronouncements
of the Financial Accounting Standards Board which are applicable to the
circumstances as of the date of determination consistently applied, except that,
for purposes of Section 9.15 hereof, GAAP shall be determined on the basis of
such principles in effect on the date hereof and consistent with those used in
the preparation of the audited financial statements delivered to Lender prior to
the date hereof.
1.21 "General Assignments of Accounts Receivable" shall mean the general
assignments of accounts receivable dated on or about the date hereof given by
each Borrower in favour of Lender in respect of the Obligations.
1.22 "General Security Agreement" shall mean the general security
agreement dated on or about the date hereof given by Borrowers in favour of
Lender in respect of the Obligations.
1.23 "Hazardous Materials" shall mean any hazardous, toxic or dangerous
substances, materials and wastes, including, without limitation, hydrocarbons
(including naturally occurring or man-made petroleum and hydrocarbons),
flammable explosives, asbestos, urea formaldehyde insulation, radioactive
materials, biological substances, polychlorinated biphenyls, pesticides,
herbicides and any other kind and/or type of pollutants or contaminants
(including, without limitation, materials which include hazardous constituents),
sewage, sludge, industrial slag, solvents and/or any other similar substances,
materials, or wastes and including any other substances, materials or wastes
that are or become
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regulated under any Environmental Law (including, without limitation any that
are or become classified as hazardous or toxic under any Environmental Law).
1.24 "Hypothecs" shall mean the hypothecs on a universality of claims in
form and substance satisfactory to Lender given by each Borrower in favour of
Lender if requested by Lender.
1.25 "Indenture" shall mean the Indenture, dated as of November 27, 1996,
by and among Statia Terminals International N.V. and Statia Terminals Canada,
Incorporated, as Issuers, Statia Terminals Corporation N.V., Statia Terminals
Delaware, Inc., Statia Terminals, Inc., Statia Terminals N.V., Saba Trustcompany
N.V., Bicen Development Corporation N.V., Statia Terminals Southwest, Inc., W.P.
Company, Inc., Seven Seas Steamship Company, Inc., Seven Seas Steamship Company
(Sint Eustatius) N.V., Point Tupper Marine Services Limited, Statia Laboratory
Services, N.V. and Statia Tugs N.V., as Subsidiary Guarantors, and Marine
Midland Bank, as Trustee.
1.26 "Information Certificate" shall mean the Information Certificate of
each Borrower constituting Exhibit A hereto containing material information with
respect to each such Borrower, its business and assets provided by or on behalf
of each such Borrower to Lender in connection with the preparation of this
Agreement and the other Financing Agreements and the financing arrangements
provided for herein.
1.27 "Inventory" shall mean all of each Borrower's now owned and hereafter
existing or acquired raw materials, work-in-process, finished goods and
semi-finished inventory or goods of any kind, nature or description, held for
sale, exchange or lease or furnished or to be furnished under a contract of
service or an exchange arrangement or used or consumed in the business or in
connection with the manufacturing, package, shipping, advertising, selling or
finishing of such goods, and all right, title and interest therein and thereto,
and the proceeds (including, without limitation, all proceeds of insurance with
respect thereto, including the proceeds of any applicable casualty insurance to
the extent relating thereto) and products of all of the foregoing, and all other
inventory of whatsoever kind or nature, wherever located.
1.28 "Letter of Credit Accommodations" shall mean the letters of credit,
merchandise purchase or other guarantees denominated in Canadian Dollars which
are from time to time either (a) issued or opened by Lender for the account of
either Borrower or any Obligor or (b) with respect to which Lender has agreed to
indemnify the issuer with respect to, or guaranteed to the issuer, the
performance by either Borrower of its obligations to such issuer.
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1.29 "Loans" shall mean the Revolving Loans.
1.30 "Maximum Credit" shall mean, at any time, the Canadian Dollar Amount
equivalent to US $5,000,000.
1.31 "Net Amount of Eligible Accounts" shall mean the gross Canadian
Dollar Amount of Eligible Accounts less (a) sales, excise or similar taxes
included in the amount thereof and (b) returns, discounts, claims, credits and
allowances of any nature at any time issued, owing, granted, outstanding,
available or claimed with respect to such Eligible Accounts; provided that the
amounts deducted under clause (a) shall not duplicate items for which
Availability Reserves have been established by Lender.
1.32 "Noteholder Collateral" shall have the meaning as set forth in the
Access Agreement.
1.33 "Obligations" shall mean any and all Revolving Loans, Letter of
Credit Accommodations and all other obligations, liabilities and indebtedness of
every kind, nature and description owing by either Borrower to Lender and/or its
affiliates, including, without limitation, Congress US, including principal,
interest, charges, fees, costs and expenses, however evidenced, whether as
principal, surety, endorser, guarantor or otherwise, whether arising under this
Agreement or the other Financing Agreements, or the transactions arising
hereunder or thereunder, whether now existing or hereafter arising, whether
arising before, during or after the initial or any renewal term of this
Agreement or after the commencement of any proceeding with respect to either
Borrower under the BIA, the CCAA, or any similar statute in any jurisdiction
(including, without limitation, the payment of interest and other amounts which
would accrue and become due but for the commencement of such proceeding),
whether direct or indirect, absolute or contingent, joint or several, due or not
due, primary or secondary, liquidated or unliquidated, secured or unsecured, and
however acquired by Lender in connection with or arising under the Financing
Agreements or any of the transactions arising thereunder or related thereto.
1.34 "Obligor" shall mean any guarantor, endorser, acceptor, surety or
other person liable on or with respect to the Obligations or who is the owner of
any property which is security for the Obligations, other than a Borrower.
1.35 "Payment Account" shall have the meaning set forth in Section 6.3
hereof.
1.36 "Person" or "person" shall mean any individual, sole proprietorship,
partnership, corporation, business trust, unincorporated association, joint
stock corporation,
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trust, joint venture or other entity or any government or any agency or
instrumentality or political subdivision thereof.
1.37 "Personal Property Security Legislation" shall mean the Assignment of
Book Debts Act (Nova Scotia), the Corporation Securities Registration Act (Nova
Scotia) and any comparable or successor legislation in the Province of Nova
Scotia or elsewhere which may apply to security interests, charges or liens
granted by either Borrower to Lender including, without limitation, the Personal
Property Security Act (Nova Scotia) when enacted.
1.38 "PPSA" shall mean the Personal Property Security Act (Ontario).
1.39 "Prime Rate" shall mean the rate from time to time publicly announced
by CoreStates Bank, N.A., or its successors, at its office in Philadelphia,
Pennsylvania, as its prime rate, whether or not such announced rate is the best
rate available at such bank.
1.40 "Priority Payables Reserve" shall mean, at any time, the full amount
of the liabilities at such time which have a trust imposed to provide for
payment or security interest, lien or charge ranking or capable of ranking
senior to or pari passu with security interests, liens or charges securing the
Obligations on any of the Collateral under federal, provincial, state, county,
municipal, or local law including, but not limited, to claims for unremitted and
accelerated rents, taxes (including, without limitation, any applicable excise
taxes or goods and services taxes), tariffs, customs and duty charges, import
assessments, wages, workers' compensation obligations, government royalties or
pension fund obligations, together with the aggregate value, determined in
accordance with GAAP, of all Eligible Inventory which Lender, acting reasonably,
considers may be or may become subject to a right of a supplier to recover
possession thereof under any federal or provincial law, where such supplier's
right may have priority over the security interests, liens or charges securing
the Obligations including, without limitation, Eligible Inventory subject to a
right of a supplier to repossess goods pursuant to Section 81.1 of the BIA.
1.41 "Records" shall mean all of each Borrower's present and future books
of account of every kind or nature, purchase and sale agreements, invoices,
ledger cards, bills of lading and other shipping evidence, statements,
correspondence, memoranda, credit files and other data relating to the
Collateral or any account debtor, together with the tapes, disks, diskettes and
other data and software storage media and devices, file cabinets or containers
in or on which the foregoing are stored (including any rights of either Borrower
with respect to the foregoing maintained with or by any other person).
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1.42 "Revolving Loans" shall mean the loans denominated in Canadian
Dollars now or hereafter made by Lender to or for the benefit of either Borrower
on a revolving basis (involving advances, repayments and readvances) as set
forth in Section 2.1 hereof.
1.43 "Seven Seas" shall mean Seven Seas Steamship Company, Inc., and its
successors and assigns.
1.44 "Statia N.V." shall mean Statia Terminals N.V., a Netherland Antilles
corporation, and its successors and assigns.
1.45 "Trustee" shall mean Marine Midland Bank, as Trustee under the
Indenture.
1.46 "UCC" shall mean the Uniform Commercial Code.
1.47 "US Financing Agreements" shall mean the Financing Agreements as that
term is defined in the US Loan Agreement.
1.48 "US Loan Agreement" shall mean the Loan and Security Agreement of
even date between Statia N.V. and Congress US as the same now exists or may
hereafter be amended, modified, supplemented, extended, renewed, restated or
replaced.
1.49 "Value" shall mean the Canadian Dollar Amount, as determined by
Lender in good faith with respect to Inventory, equal to the lower of (a) cost
computed on an average cost method in accordance with GAAP or (b) market value.
SECTION 2. CREDIT FACILITIES
2.1 Revolving Loans.
(a) Subject to, and upon the terms and conditions contained herein,
Lender agrees to make Revolving Loans to Borrowers from time to time in amounts
requested by Borrowers up to the amount equal to the sum of:
(i) eighty (80%) percent of the Net Amount of Eligible
Accounts, plus
(ii) the lesser of: (A) the sum of fifty (50%) percent of the
Value of Eligible Inventory consisting of finished goods
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and (B) the Canadian Dollar Amount equivalent to US
$1,000,000 less
(iii) any Availability Reserves.
(b) Lender may, in its discretion, from time to time, upon not less
than five (5) days prior notice to Borrowers, (i) reduce the lending formula
with respect to Eligible Accounts to the extent that Lender determines in good
faith that: (A) the dilution with respect to the Accounts for any period (based
on the ratio of (1) the aggregate amount of reductions in Accounts other than as
a result of payments in cash to (2) the aggregate amount of total sales) has
increased in any material respect or may be reasonably anticipated to increase
in any material respect above historical levels, or (B) the general
creditworthiness of account debtors has declined or (ii) reduce the lending
formula(s) with respect to Eligible Inventory to the extent that Lender
determines that: (A) the number of days of the turnover of the Inventory for any
period has changed from its historical pattern in any material respect or (B)
the liquidation value of the Eligible Inventory, or any category thereof, has
decreased, or (C) the nature and quality of the Inventory has deteriorated in
any material respect. In determining whether to reduce the lending formula(s),
Lender may consider events, conditions, contingencies or risks which are also
considered in determining Eligible Accounts, Eligible Inventory or in
establishing Availability Reserves.
(c) Except in Lender's discretion, the aggregate Canadian Dollar
amount of the Loans and the Letter of Credit Accommodations outstanding at any
time shall not exceed the Maximum Credit. In the event that the outstanding
amount of any component of the Loans, or the aggregate amount of the outstanding
Loans and Letter of Credit Accommodations, exceed the amounts available under
the lending formulas, the sublimits for Letter of Credit Accommodations set
forth in Section 2.2(d) or the Maximum Credit, as applicable, such event shall
not limit, waive or otherwise affect any rights of Lender in that circumstance
or on any future occasions and each Borrower shall, upon demand by Lender, which
may be made at any time or from time to time, immediately repay to Lender the
entire amount of any such excess(es) for which payment is demanded.
(d) For purposes only of applying the sublimit on Revolving Loans
based on Eligible Inventory pursuant to Section 2.1(a)(ii)(B), Lender may treat
the then undrawn amounts of outstanding Letter of Credit Accommodations for the
purpose of purchasing Eligible Inventory as Revolving Loans to the extent Lender
is in effect basing the issuance of the Letter of Credit Accommodations on the
Value of the Eligible Inventory being purchased with such Letter of Credit
Accommodations. In determining the actual amounts of such Letter of Credit
Accommodations to be so treated for purposes of the sublimit, the outstanding
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Revolving Loans and Availability Reserves shall be attributed first to any
components of the lending formulas in Section 2.1(a) that are not subject to
such sublimit, before being attributed to the components of the lending formulas
subject to such sublimit.
2.2 Letter of Credit Accommodations.
(a) Subject to, and upon the terms and conditions contained herein,
at the request of either Borrower, Lender agrees to provide or arrange for
Letter of Credit Accommodations for the account of such Borrower containing
terms and conditions acceptable to Lender and the issuer thereof. Any payments
made by Lender to any issuer thereof and/or related parties in connection with
the Letter of Credit Accommodations shall constitute additional Revolving Loans
to Borrowers pursuant to this Section 2.
(b) In addition to any administrative charges, fees or expenses
charged by any bank or issuer in connection with the Letter of Credit
Accommodations, each Borrower shall pay to Lender a letter of credit fee at a
rate equal to one and three quarters (1.75%) percent per annum on the daily
outstanding balance of the Letter of Credit Accommodations for the immediately
preceding month (or part thereof), payable in arrears as of the first day of
each succeeding month, except that each Borrower shall pay to Lender such letter
of credit fee, at Lender's option, without notice, at a rate equal to three and
three-quarters (3.75%) percent per annum on such daily outstanding balance for:
(i) the period from and after the date of termination or non-renewal hereof
until Lender has received full and final payment of all Obligations
(notwithstanding entry of a judgment against either Borrower) and (ii) the
period from and after the date of the occurrence of an Event of Default for so
long as such Event of Default is continuing as determined by Lender. Such letter
of credit fee shall be calculated on the basis of a three hundred sixty five
(365) day year and actual days elapsed and the obligation of each Borrower to
pay such fee shall survive the termination or non-renewal of this Agreement.
(c) No Letter of Credit Accommodations shall be available unless on
the date of the proposed issuance of any Letter of Credit Accommodations, the
Revolving Loans available to Borrowers (subject to the Maximum Credit and any
Availability Reserves) are equal to or greater than: (i) if the proposed Letter
of Credit Accommodation is for the purpose of purchasing Eligible Inventory, the
sum of (A) one hundred (100%) percent of the cost of such Eligible Inventory,
plus (B) freight, taxes, duty and other amounts which Lender estimates must be
paid in connection with such Inventory upon arrival and for delivery to one of
either Borrower's locations for Eligible Inventory within Canada and (ii) if the
proposed Letter of Credit Accommodation is for any other purpose, an amount
equal to one hundred (100%) percent of the face amount thereof and all other
commitments and obligations made or
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incurred by Lender with respect thereto. Effective on the issuance of each
Letter of Credit Accommodation, the amount of Revolving Loans which might
otherwise be available to Borrowers shall be reduced by the applicable amount
set forth in Section 2.2(c)(i) or Section 2.2(c)(ii).
(d) Except in Lender's discretion, (i) the amount of all outstanding
Letter of Credit Accommodations and all other commitments and obligations made
or incurred by Lender in connection therewith, shall not at any time exceed the
Canadian Dollar Amount equivalent to US$3,500,000. At any time an Event of
Default exists or has occurred and is continuing, upon Lender's request,
Borrowers will either furnish cash collateral to secure the reimbursement
obligations to the issuer in connection with any Letter of Credit Accommodations
or furnish cash collateral to Lender for the Letter of Credit Accommodations,
and in either case, the Revolving Loans otherwise available to Borrowers shall
not be reduced as provided in Section 2.2(c) to the extent of such cash
collateral.
(e) Each Borrower shall indemnify and hold Lender harmless from and
against any and all losses, claims, damages, liabilities, costs and expenses
which Lender may suffer or incur in connection with any Letter of Credit
Accommodations and any documents, drafts or acceptances relating thereto,
including, but not limited to, any losses, claims, damages, liabilities, costs
and expenses due to any action taken by any issuer or correspondent with respect
to any Letter of Credit Accommodation. Each Borrower assumes all risks with
respect to the acts or omissions of the drawer under or beneficiary of any
Letter of Credit Accommodation and for such purposes the drawer or beneficiary
shall be deemed such Borrower's agent. Each Borrower assumes all risks for, and
agrees to pay, all foreign, federal, provincial and local taxes, duties and
levies relating to any goods subject to any Letter of Credit Accommodations or
any documents, drafts or acceptances thereunder. Each Borrower hereby releases
and holds Lender harmless from and against any acts, waivers, errors, delays or
omissions, whether caused by either Borrower, by any issuer or correspondent or
otherwise with respect to or relating to any Letter of Credit Accommodation. The
provisions of this Section 2.2(e) shall survive the payment of Obligations and
the termination or non-renewal of this Agreement.
(f) Nothing contained herein shall be deemed or construed to grant
either Borrower any right or authority to pledge the credit of Lender in any
manner. Lender shall have no liability of any kind with respect to any Letter of
Credit Accommodation provided by an issuer other than Lender unless Lender has
duly executed and delivered to such issuer the application or a guarantee or
indemnification in writing with respect to such Letter of Credit Accommodation.
Each Borrower shall be bound by any interpretation made in good faith by Lender,
or any other issuer or correspondent under or in connection with any Letter of
Credit
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Accommodation or any documents, drafts or acceptances thereunder,
notwithstanding that such interpretation may be inconsistent with any
instructions of either Borrower. Lender shall have the sole and exclusive right
and authority to, and Borrowers shall not: (i) at any time an Event of Default
exists or has occurred and is continuing, (A) approve or resolve any questions
of non-compliance of documents, (B) give any instructions as to acceptance or
rejection of any documents or goods or (C) execute any and all applications for
steamship or airway guaranties, indemnities or delivery orders, and (ii) at all
times, (A) grant any extensions of the maturity of, time of payment for, or time
of presentation of, any drafts, acceptances, or documents, and (B) agree to any
amendments, renewals, extensions, modifications, changes or cancellations of any
of the terms or conditions of any of the applications, Letter of Credit
Accommodations, or documents, drafts or acceptances thereunder or any letters of
credit included in the Collateral. Lender may take such actions either in its
own name or in either Borrower's name.
(g) Any rights, remedies, duties or obligations granted or
undertaken by either Borrower to any issuer or correspondent in any application
for any Letter of Credit Accommodation, or any other agreement in favour of any
issuer or correspondent relating to any Letter of Credit Accommodation, shall be
deemed to have been granted or undertaken by such Borrower to Lender. Any duties
or obligations undertaken by Lender to any issuer or correspondent in any
application for any Letter of Credit Accommodation, or any other agreement by
Lender in favour of any issuer or correspondent relating to any Letter of Credit
Accommodation, shall be deemed to have been undertaken by the applicable
Borrower to Lender and to apply in all respects to such Borrower and Lender
agrees that any such action taken shall be consistent with Lender's customary
practices with such issuers or correspondents with respect thereto.
2.3 Availability Reserves. All Revolving Loans otherwise available to
Borrowers pursuant to the lending formulas and subject to the Maximum Credit and
other applicable limits hereunder shall be subject to Lender's continuing right
to establish and revise Availability Reserves.
SECTION 3. INTEREST AND FEES
3.1 Interest.
(a) Borrowers shall pay to Lender interest on the outstanding
principal amount of the Loans at the rate of one-half (.50%) percent per annum
in excess of the Prime Rate, except that Borrowers shall pay to Lender interest,
at Lender's option, without notice, at the rate of two and one-half (2.50%)
percent per annum in excess of the Prime Rate: (i) on the
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Loans for the period from and after the date of termination or non-renewal
hereof, or the date of the occurrence of an Event of Default, and for so long as
such Event of Default is continuing as determined by Lender and until such time
as Lender has received full and final payment of all Loans (notwithstanding
entry of any judgment against either Borrower) and (ii) on the Revolving Loans
at any time outstanding in excess of the amounts available to Borrowers under
Section 2 (whether or not such excess(es), arise or are made with or without
Lender's knowledge or consent and whether made before or after an Event of
Default). All interest accruing hereunder on and after the occurrence of any of
the events referred to in Sections 3.1(a)(i) or 3.1(a)(ii) above shall be
payable on demand.
(b) Interest shall be payable by Borrowers to Lender monthly in
arrears not later than the first day of each calendar month and shall be
calculated on the basis of a three hundred sixty (360) day year and actual days
elapsed. The interest rate shall increase or decrease by an amount equal to each
increase or decrease in the Prime Rate effective on the first day of the month
after any change in such Prime Rate is announced based on the Prime Rate in
effect on the last day of the month in which any such change occurs. In no event
shall charges constituting interest payable by either Borrower to Lender exceed
the maximum amount or the rate permitted under any applicable law or regulation,
and if any part or provision of this Agreement is in contravention of any such
law or regulation, such part or provision shall be deemed amended to conform
thereto.
(c) For purposes of disclosure under the Interest Act (Canada),
where interest is calculated pursuant hereto at a rate based upon a 360 day year
(the "First Rate"), it is hereby agreed that the rate or percentage of interest
on a yearly basis is equivalent to such First Rate multiplied by the actual
number of days in the year divided by 360.
(d) Notwithstanding the provisions of this Section 3 or any other
provision of this Agreement, in no event shall the aggregate "interest" (as that
term is defined in Section 347 of the Criminal Code (Canada)) exceed the
effective annual rate of interest on the "credit advanced" (as defined therein)
lawfully permitted under Section 347 of the Criminal Code (Canada). The
effective annual rate of interest shall be determined in accordance with
generally accepted actuarial practices and principles over the term of the
applicable Loan, and in the event of a dispute, a certificate of a Fellow of the
Canadian Institute of Actuaries appointed by Lender will be conclusive for the
purposes of such determination.
(e) A certificate of an authorized signing officer of Lender as to
each amount and/or each rate of interest payable hereunder from time to time
shall be conclusive evidence of such amount and of such rate, absent manifest
error.
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(f) For greater certainty, whenever any amount is payable under this
Agreement or any Financing Agreement by a Borrower as interest or as a fee which
requires the calculation of an amount using a percentage per annum, each party
to this Agreement acknowledges and agrees that such amount shall be calculated
as of the date payment is due without application of the "deemed reinvestment
principle" or the "effective yield method". As an example, when interest is
calculated and payable monthly, the rate of interest payable per month is 1/12
of the stated rate of interest per annum.
3.2 Closing Fee. Borrowers shall pay to Lender as a closing fee the amount
of US$75,000, which shall be fully earned as of and payable on the date hereof.
3.3 Servicing Fee. Borrowers shall pay to Lender monthly a servicing fee
in an amount equal to US$1,000 in respect of Lender's services for each month
(or part thereof) while this Agreement remains in effect and for so long
thereafter as any of the Obligations are outstanding, which fee shall be fully
earned as of and payable in advance on the date hereof and on the first day of
each month hereafter.
3.4 Unused Line Fee. Borrowers shall pay to Lender monthly an unused line
fee at a rate equal to three-eights (.375%) percent per annum calculated upon
the amount by which the Canadian Dollar Amount equivalent to US $2,500,000
exceeds the average daily principal balance of the outstanding Revolving Loans
and Letter of Credit Accommodations under this Agreement during the immediately
preceding month (or part thereof) while this Agreement is in effect and for so
long thereafter as any of the Obligations are outstanding, which fee shall be
payable on the first day of each month in arrears.
SECTION 4. CONDITIONS PRECEDENT
4.1 Conditions Precedent to Initial Loans and Letter of Credit
Accommodations. Each of the following is a condition precedent to Lender making
the initial Loans and providing the initial Letter of Credit Accommodations
hereunder:
(a) Lender shall have received evidence (including, without
limitation, any subordinations or releases of any other charges, liens or
security interests in the Collateral required by Lender), in form and substance
satisfactory to Lender, that Lender has valid perfected (to the extent
applicable) and first priority security interests in, and charges and liens
upon, the Collateral and any other property which is intended to be security for
the Obligations or the liability of any Obligor in respect thereof, subject only
to the security interests, charges and liens permitted herein or in the other
Financing Agreements;
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(b) all requisite corporate action and proceedings in connection
with this Agreement and the other Financing Agreements shall be satisfactory in
form and substance to Lender, and Lender shall have received all information and
copies of all documents, including, without limitation, records of requisite
corporate action and proceedings which Lender may have requested in connection
therewith, such documents where requested by Lender or its counsel to be
certified by appropriate corporate officers or governmental authorities;
(c) no material adverse change shall have occurred in the assets,
business or prospects of either Borrower since the date of Lender's latest field
examination and no change or event shall have occurred which would impair the
ability of either Borrower or any Obligor to perform its obligations hereunder
or under any of the other Financing Agreements to which it is a party or of
Lender to enforce the Obligations or realize upon the Collateral;
(d) Lender shall have completed a field review of the Records and
such other information with respect to the Collateral as Lender may require to
determine the amount of Revolving Loans available to Borrowers, the results of
which shall be satisfactory to Lender, not more than three (3) business days
prior to the date hereof;
(e) Lender shall have received, in form and substance satisfactory
to Lender, all consents, waivers, acknowledgments and other agreements from
third persons which Lender may deem necessary or desirable in order to permit,
protect and perfect its security interests in, and charges and liens upon, the
Collateral or to effectuate the provisions or purposes of this Agreement and the
other Financing Agreements, including, without limitation, acknowledgements by
lessors, mortgagees and warehousemen of Lender's security interests in, and
liens and charges upon, the Collateral, waivers by such persons of any security
interests, liens, charges or other claims by such persons to the Collateral and
agreements permitting Lender access to, and the right to remain on, the premises
to exercise its rights and remedies and otherwise deal with the Collateral;
(f) Borrowers shall have Excess Availability as determined by
Lender, as of the date hereof, in an amount equal to at least equal to the
Canadian Dollar Amount equivalent to US $500,000 after giving effect to the
initial Loans made or to be made and Letter of Credit Accommodations issued or
to be issued in connection with the initial transactions hereunder;
(g) Lender shall have received evidence of insurance and loss payee
endorsements required hereunder and under the other Financing Agreements, in
form and substance satisfactory to Lender, and certificates of insurance
policies and/or endorsements naming Lender as loss payee;
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(h) Lender shall have received, in form and substance satisfactory
to Lender, such opinion letters of counsel to Borrowers and the Obligors with
respect to the Financing Agreements and such other matters as Lender may
request;
(i) the other Financing Agreements and all instruments and documents
hereunder and thereunder shall have been duly executed and delivered to Lender,
in form and substance satisfactory to Lender; and
(j) all conditions precedent to the making of loans under the US
Financing Agreements shall have been satisfied.
4.2 Conditions Precedent to All Loans and Letter of Credit Accommodations.
Each of the following is an additional condition precedent to Lender making
Loans and/or providing Letter of Credit Accommodations to Borrowers, including
the initial Loans and Letter of Credit Accommodations and any future Loans and
Letter of Credit Accommodations:
(a) all representations and warranties contained herein and in the
other Financing Agreements shall be true and correct in all material respects
with the same effect as though such representations and warranties had been made
on and as of the date of the making of each such Loan or providing each such
Letter of Credit Accommodation and after giving effect thereto;
(b) no Event of Default and no event or condition which, with notice
or passage of time or both, would constitute an Event of Default, shall exist or
have occurred and be continuing on and as of the date of the making of such Loan
or providing each such Letter of Credit Accommodation and after giving effect
thereto;
(c) Lender shall have received evidence, in form and substance
satisfactory to Lender, that (i) each Borrower has notified all account debtors
of the security interests, liens and charges of Lender in the Accounts and (ii)
each Borrower has placed appropriate notices acceptable to Lender on its
invoices and in its contracts entered into after the date hereof providing
notice of this financing; and
(d) no requirement of the Minister of National Revenue for payment
pursuant to Section 224, or any successor section, of the Income Tax Act
(Canada) or Section 317, or any successor section of the Excise Act (Canada) or
any comparable provision of similar legislation shall have been received by
Lender or any other Person in respect of either Borrower or otherwise issued in
respect of either Borrower.
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SECTION 5. INTENTIONALLY DELETED.
SECTION 6. COLLECTION AND ADMINISTRATION
6.1 Borrowers' Loan Accounts. Lender shall maintain one or more loan
account(s) on its books in which shall be recorded (a) all Loans, Letter of
Credit Accommodations and other Obligations and the Collateral, (b) all payments
made by or on behalf of Borrowers and (c) all other appropriate debits and
credits as provided in this Agreement, including, without limitation, fees,
charges, costs, expenses and interest. All entries in the loan account(s) shall
be made in accordance with Lender's customary practices as in effect from time
to time.
6.2 Statements. Lender shall render to Borrowers each month a statement
setting forth the balance in the Borrowers' loan account(s) maintained by Lender
for Borrowers pursuant to the provisions of this Agreement, including principal,
interest, fees, costs and expenses. Each such statement shall be subject to
subsequent adjustment by Lender but shall, absent manifest errors or omissions,
be considered correct and deemed accepted by Borrowers and conclusively binding
upon Borrowers as an account stated except to the extent that Lender receives a
written notice from Borrowers of any specific exceptions of Borrowers thereto
within thirty (30) days after the date such statement has been mailed by Lender.
Until such time as Lender shall have rendered to Borrowers a written statement
as provided above, the balance in Borrowers' loan account(s) shall be
presumptive evidence of the amounts due and owing to Lender by Borrowers.
6.3 Collection of Accounts.
(a) Borrowers shall establish and maintain, at its expense, blocked
accounts or lockboxes and related blocked accounts (in either case, "Blocked
Accounts"), as Lender may specify, and Lender may establish and maintain bank
accounts of Lender ("Payment Accounts") in each case with such banks as are
acceptable to Lender into which Borrowers shall, in accordance with Lender's
instructions, promptly deposit and direct its account debtors that remit
payments by electronic funds transfers to directly remit, all payments on
Accounts and all payments constituting proceeds of Inventory or other Collateral
in the identical form in which such payments are made, whether by cash, cheque
or other manner. The banks at which the Blocked Accounts are established shall
enter into an agreement, in form and substance satisfactory to Lender, providing
that all items received or deposited in the Blocked Accounts are the property of
Lender, that the depository bank has no charge or lien upon, or right to setoff
against the Blocked Accounts, the items received for deposit therein, or the
funds from time to time on deposit therein and that the depository bank will
wire, or otherwise
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transfer, in immediately available funds, on a daily basis, all funds received
or deposited into the Blocked Accounts to the Payment Accounts or such other
bank account of Lender as Lender may from time to time designate for such
purpose. Borrowers agree that all payments made to such Blocked Accounts or
Payment Accounts or other funds received and collected by Lender, whether on the
Accounts or as proceeds of Inventory or other Collateral or otherwise shall be
the property of Lender.
(b) For purposes of calculating interest on the Obligations, such
payments or other funds received will be applied (conditional upon final
collection) to the Obligations one (1) business day following the date of
receipt of immediately available funds by Lender in the applicable Payment
Account. For purposes of calculating the amount of the Revolving Loans available
to Borrowers such payments will be applied (conditional upon final collection)
to the Obligations on the business day of receipt by Lender in the applicable
Payment Account, if such payments are received within sufficient time (in
accordance with Lender's usual and customary practices as in effect from time to
time) to credit Borrowers' loan account on such day, and if not, then on the
next business day.
(c) Each Borrower and all of its affiliates, subsidiaries,
shareholders, directors, employees or agents shall, acting as trustee for
Lender, receive, as the property of Lender, any monies, cheques, notes, drafts
or any other payment relating to and/or proceeds of Accounts or other Collateral
which come into their possession or under their control and immediately upon
receipt thereof, shall deposit or cause the same to be deposited in the Blocked
Accounts or the Payment Accounts, or remit the same or cause the same to be
remitted, in kind, to Lender. In no event shall the same be commingled with
Borrowers' own funds. Each Borrower agrees to reimburse Lender on demand for any
amounts owed or paid to any bank at which a Blocked Account or Payment Account
is established or any other bank or person involved in the transfer of funds to
or from the Blocked Accounts or the Payment Accounts arising out of Lender's
payments to or indemnification of such bank or person. The obligation of each
Borrower to reimburse Lender for such amounts pursuant to this Section 6.3 shall
survive the termination or non-renewal of this Agreement.
6.4 Payments. All Obligations shall be payable to the Payment Account as
provided in Section 6.3 or such other place as Lender may designate from time to
time. Lender may apply payments received or collected from either Borrower or
for the account of either Borrower (including, without limitation, the monetary
proceeds of collections or of realization upon any Collateral) to such of the
Obligations, whether or not then due, in such order and manner as Lender
determines. To the extent Lender receives any payments or collections from or on
account of either Borrower in US Dollars, Lender shall convert the amount of any
such payments received or collected (including, without limitation, the monetary
proceeds of
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collections or of realization upon any collateral) in US Dollars to Canadian
Dollars using the Currency Exchange Convention and such payments shall
constitute satisfaction of the Obligations only to the extent of the amounts so
converted. Payments and collections received in any currency other than US
Dollars or Canadian Dollars will be accepted and/or applied at the sole
discretion of Lender. At Lender's option, all principal, interest, fees, costs,
expenses and other charges provided for in this Agreement or the other Financing
Agreements may be charged directly to the loan account(s) of Borrowers. Each
Borrower shall make all payments to Lender on the Obligations free and clear of,
and without deduction or withholding for or on account of, any setoff,
counterclaim, defense, duties, taxes, levies, imposts, fees, deductions,
withholding, restrictions or conditions of any kind. If after receipt of any
payment of, or proceeds of Collateral applied to the payment of, any of the
Obligations, Lender is required to surrender or return such payment or proceeds
to any Person for any reason, then the Obligations intended to be satisfied by
such payment or proceeds shall be reinstated and continue and this Agreement
shall continue in full force and effect as if such payment or proceeds had not
been received by Lender. Each Borrower shall be liable to pay to Lender, and
does hereby indemnify and hold Lender harmless for the amount of any payments or
proceeds surrendered or returned. This Section 6.4 shall remain effective
notwithstanding any contrary action which may be taken by Lender in reliance
upon such payment or proceeds. This Section 6.4 shall survive the payment of the
Obligations and the termination or non-renewal of this Agreement. If, at any
time, there are no Obligations outstanding and Lender holds a credit balance,
Lender, if requested by Borrowers, shall remit such credit balance to Borrowers
as Borrowers may direct.
6.5 Authorization to Make Loans. Lender is authorized to make the Loans
and provide the Letter of Credit Accommodations based upon telephonic or other
instructions received from anyone purporting to be an officer of a Borrower or
other authorized person or, at the discretion of Lender, if such Loans are
necessary to satisfy any Obligations. All requests for Loans or Letter of Credit
Accommodations hereunder shall specify the date on which the requested advance
is to be made or Letter of Credit Accommodations established (which day shall be
a business day) and the amount of the requested Loan. Requests received after
11:00 a.m. Toronto time on any day shall be deemed to have been made as of the
opening of business on the immediately following business day. All Loans and
Letter of Credit Accommodations under this Agreement shall be conclusively
presumed to have been made to, and at the request of and for the benefit of,
Borrowers when deposited to the credit of Borrowers or otherwise disbursed or
established in accordance with the instructions of Borrowers or in accordance
with the terms and conditions of this Agreement.
6.6 Use of Proceeds. Borrowers shall use the initial proceeds of the Loans
provided by Lender to Borrowers hereunder only for: (a) payments to each of the
persons listed in the
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disbursement direction letter furnished by Borrowers to Lender on or about the
date hereof and (b) costs, expenses and fees in connection with the preparation,
negotiation, execution and delivery of this Agreement and the other Financing
Agreements. All other Loans made or Letter of Credit Accommodations provided by
Lender to Borrowers pursuant to the provisions hereof shall be used by Borrowers
only for general operating, working capital and other proper corporate purposes
of Borrowers not otherwise prohibited by the terms hereof.
SECTION 7. COLLATERAL REPORTING AND COVENANTS
7.1 Collateral Reporting. Each Borrower shall provide Lender with the
following documents in a form satisfactory to Lender: (a) on a weekly basis, a
schedule of Accounts, credits issued and cash received together with a statement
of the aggregate outstanding and unpaid amount of all tariffs, import
assessments, customs and duty charges, goods and services taxes ("GST"),
provincial sales taxes ("PST") and other taxes (other than income taxes) due and
owing, except that, if Borrowers fail to maintain Excess Availability of the
Canadian Dollar Amount equivalent to US$1,000,000, then each Borrower shall
deliver a schedule of Accounts, credits issued and cash received together with a
statement of the aggregate outstanding and unpaid amount of all tariffs, import
assessments, customs and duty charges and GST, PST and other taxes (other than
income taxes) due and owing, on a daily basis; (b) on a weekly basis, inventory
reports by category, including cost, quantity and grades of such Borrower's
inventory, except that, if Borrowers fail to maintain Excess Availability of the
Canadian Dollar Amount equivalent to US$1,000,000, then each Borrower shall
deliver such inventory reports on a daily basis; (c) on a monthly basis or more
frequently as Lender may request, (i) perpetual inventory reports and (ii)
agings of accounts payable; (d) upon Lender's request, (i) copies of customer
statements and credit memos, remittance advices and reports, and copies of
deposit slips and bank statements, (ii) copies of shipping and delivery
documents, and (iii) copies of purchase orders, invoices and delivery documents
for Inventory acquired by either Borrower; (e) agings of accounts receivable on
a monthly basis or more frequently as Lender may request; and (f) such other
reports as to the Collateral as Lender shall request from time to time. If
either of Borrower's records or reports of the Collateral are prepared or
maintained by an accounting service, contractor, shipper or other agent, each
Borrower hereby irrevocably authorizes such service, contractor, shipper or
agent to deliver such records, reports, and related documents to Lender and to
follow Lender's instructions with respect to further services at any time that
an Event of Default exists or has occurred and is continuing.
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7.2 Accounts Covenants.
(a) Each Borrower shall notify Lender promptly of: (i) any material
delay in such Borrower's performance of any of its obligations to any account
debtor or the assertion of any claims, offsets, defenses or counterclaims by any
account debtor, or any disputes with account debtors, or any settlement,
adjustment or compromise thereof, (ii) all material adverse information relating
to the financial condition of any account debtor known to such Borrower after
due investigation and (iii) any event or circumstance which, to such Borrower's
knowledge would cause Lender to consider any then existing Accounts as no longer
constituting Eligible Accounts. No credit, discount, allowance or extension or
agreement for any of the foregoing shall be granted to any account debtor
without Lender's consent, except in the ordinary course of a Borrower's business
in accordance with practices and policies previously disclosed in writing to
Lender. So long as no Event of Default exists or has occurred and is continuing,
neither Borrower shall settle, adjust or compromise any claim, offset,
counterclaim or dispute with any account debtor. At any time that an Event of
Default exists or has occurred and is continuing, Lender shall, at its option,
have the exclusive right to settle, adjust or compromise any claim, offset,
counterclaim or dispute with account debtors or grant any credits, discounts or
allowances.
(b) Each Borrower shall promptly report to Lender any return of
Inventory by any one account debtor. At any time that Inventory is returned,
reclaimed or repossessed, the Account (or portion thereof) which arose from the
sale of such returned, reclaimed or repossessed Inventory shall not be deemed an
Eligible Account. In the event any account debtor returns Inventory when an
Event of Default exists or has occurred and is continuing, each Borrower shall,
upon Lender's request, (i) hold the returned Inventory in trust for Lender, (ii)
segregate all returned Inventory from all of its other property, (iii) dispose
of the returned Inventory solely according to Lender's instructions, and (iv)
not issue any credits, discounts or allowances with respect thereto without
Lender's prior written consent.
(c) With respect to each Account: (i) the amounts shown on any
invoice delivered to Lender or schedule thereof delivered to Lender shall be
true and complete, (ii) no payments shall be made thereon except payments
immediately delivered to Lender pursuant to the terms of this Agreement, (iii)
no credit, discount, allowance or extension or agreement for any of the
foregoing shall be granted to any account debtor except as reported to Lender in
accordance with this Agreement and except for credits, discounts, allowances or
extension of terms made or given in the ordinary course of a Borrower's business
in accordance with practices and policies previously disclosed to Lender, (iv)
there shall be no setoffs, deductions, contras, defences, counterclaims or
disputes existing or asserted with respect thereto except as reported to Lender
in accordance with the terms of this Agreement, (v) none of the trans-
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actions giving rise thereto will violate any applicable federal, provincial or
foreign laws or regulations, all documentation relating thereto will be legally
sufficient under such laws and regulations and all such documentation will be
legally enforceable in accordance with its terms.
(d) Lender shall have the right at any time or times, in Lender's
name or in the name of a nominee of Lender, to verify the validity, amount or
any other matter relating to any Account or other Collateral, by mail,
telephone, facsimile transmission or otherwise.
(e) Each Borrower shall deliver or cause to be delivered to Lender,
with appropriate endorsement and assignment, with full recourse to such
Borrower, all chattel paper and instruments which such Borrower now owns or may
at any time acquire immediately upon such Borrower's receipt thereof, except as
Lender may otherwise agree.
(f) Lender may, at any time or times that an Event of Default exists
or has occurred and is continuing, (i) notify any or all account debtors that
the Accounts have been assigned to Lender and that Lender has a security
interest therein and Lender may direct any or all accounts debtors to make
payment of Accounts directly to Lender, (ii) extend the time of payment of,
compromise, settle or adjust for cash, credit, return of merchandise or
otherwise, and upon any terms or conditions, any and all Accounts or other
obligations included in the Collateral and thereby discharge or release the
account debtor or any other party or parties in any way liable for payment
thereof without affecting any of the Obligations, (iii) demand, collect or
enforce payment of any Accounts or such other obligations, but without any duty
to do so, and Lender shall not be liable for its failure to collect or enforce
the payment thereof nor for the negligence of its agents or attorneys with
respect thereto and (iv) take whatever other action Lender may deem necessary or
desirable for the protection of its interests. At any time that an Event of
Default exists or has occurred and is continuing, at Lender's request, all
invoices and statements sent to any account debtor shall state that the Accounts
and such other obligations have been assigned to Lender and are payable directly
and only to Lender and each Borrower shall deliver to Lender such originals of
documents evidencing the sale and delivery of goods or the performance of
services giving rise to any Accounts as Lender may require.
7.3 Inventory Covenants. With respect to the Inventory: (a) each Borrower
shall at all times maintain inventory records reasonably satisfactory to Lender,
keeping correct and accurate records itemizing and describing the kind, type,
quality and quantity of Inventory, Borrower's cost therefor and daily
withdrawals therefrom and additions thereto; (b) each Borrower shall conduct a
physical count of the Inventory at least once each year, but at any time or
times as Lender may request on or after an Event of Default, and promptly
following such physical inventory shall supply Lender with a report in the form
and with such specificity
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as may be reasonably satisfactory to Lender concerning such physical count; (c)
neither Borrower shall remove any Inventory from the locations set forth or
permitted herein, without the prior written consent of Lender, except for sales
of Inventory in the ordinary course of Borrower's business and except to move
Inventory directly from one location set forth or permitted herein to another
such location; (d) each Borrower shall deliver to Lender, at their expense,
reports prepared by third party surveyors, acceptable to Lender, with respect to
the quantity, grade, cost, etc. of such Borrower's inventory with such reports
to be prepared on a frequency consistent with historical practice, but in no
event less than once per month (or at such other intervals as Lender may request
from time to time), and which reports shall be delivered directly to Lender and
shall be in form, scope and methodology acceptable to Lender; (e) each Borrower
shall produce, use, store and maintain the Inventory, with all reasonable care
and caution and in accordance with applicable standards of any insurance and in
conformity with applicable laws; (f) each Borrower assumes all responsibility
and liability arising from or relating to the production, use, sale or other
disposition of the Inventory; (g) each Borrower shall not sell Inventory to any
customer on approval, or any other basis which entitles the customer to return
or may obligate a Borrower to repurchase such Inventory; and (h) each Borrower
shall keep the Inventory in good and marketable condition.
7.4 Equipment Covenants. With respect to the Equipment and subject to the
rights of the Trustee: (a) each Borrower shall keep the Equipment in good order,
repair, running and marketable condition (ordinary wear and tear excepted); (b)
each Borrower shall use the Equipment with all reasonable care and caution and
in accordance with applicable standards of any insurance and in conformity with
all applicable laws; (c) the Equipment is and shall be used in each Borrower's
business and not for personal, family, household or farming use; and (d) each
Borrower assumes all responsibility and liability arising from the use of the
Equipment. In addition to, and not in limitation of, the foregoing, each
Borrower shall keep in good order and repair all computers and computer hardware
and software (whether owned or licensed) in which any Records or other
Collateral are stored or maintained and, at any given time, Lender shall have
access to all such computers and computer hardware and software and all Records
and Collateral contained therein shall be accurate.
7.5 Power of Attorney. Each Borrower hereby irrevocably designates and
appoints Lender (and all persons designated by Lender) as such Borrower's true
and lawful attorney-in-fact, and authorizes Lender, in any Borrower's or
Lender's name, to: (a) at any time an Event of Default or event which with
notice or passage of time or both would constitute an Event of Default exists or
has occurred and is continuing (i) demand payment on Accounts or other proceeds
of Inventory or other Collateral, (ii) enforce payment of Accounts by legal
proceedings or otherwise, (iii) exercise all of such Borrower's rights and
remedies to collect any Account or other Collateral, (iv) sell or assign any
Account upon such terms, for such
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amount and at such time or times as the Lender deems advisable, (v) settle,
adjust, compromise, extend or renew an Account, (vi) discharge and release any
Account, (vii) prepare, file and sign either Borrower's name on any proof of
claim in bankruptcy or other similar document against an account debtor, and
(viii) do all acts and things which are necessary, in Lender's determination, to
fulfil Borrowers' obligations under this Agreement and the other Financing
Agreements; (b) at any time after an Event of Default under Sections 10(a)(i),
(b), (e), (f), (g), (h) or (r) and during its continuation or in the event
Lender declares an Event of Default and demands payment of the Obligations
hereunder, to notify the post office authorities to change the address for
delivery of either Borrower's mail to an address designated by Lender, and to
receive and open all mail addressed to either Borrower, except that, Lender
shall use its best efforts to promptly forward to the applicable Borrower any
mail received by Lender which does not contain payments of Accounts or which
does not otherwise relate to the Collateral and to forward to the applicable
Borrower copies of any payments of Accounts or documents received and retained
by Lender; and (c) at any time to (i) take control in any manner of any item of
payment or proceeds thereof, (ii) have access to any lockbox or postal box into
which either Borrower's mail is deposited, (iii) endorse either Borrower's name
upon any items of payment relating to the Collateral or proceeds thereof and
deposit the same in the Lender's account for application to the Obligations,
(iv) endorse either Borrower's name upon any chattel paper, document,
instrument, invoice, or similar document or agreement relating to any Account or
any goods pertaining thereto or any other Collateral, (v) sign either Borrower's
name on any verification of Accounts and notices thereof to account debtors and
(vi) execute in either Borrower's name and file any PPSA, UCC or other financing
statements or amendments thereto and any other filings, notices or registrations
necessary or desirable under any applicable Personal Property Security
Legislation. Each Borrower hereby releases Lender and its officers, employees
and designees from any liabilities arising from any act or acts under this power
of attorney and in furtherance thereof, whether of omission or commission,
except as a result of Lender's own gross negligence or wilful misconduct as
determined pursuant to a final non-appealable order of a court of competent
jurisdiction.
7.6 Right to Cure. Lender may, at its option, (a) cure any default by
either Borrower under any agreement with a third party or pay or bond on appeal
any judgment entered against either Borrower to the extent that such default or
judgement relates to the Collateral, (b) discharge taxes, liens, security
interests, charges or other encumbrances at any time levied on or existing with
respect to the Collateral and (c) pay any amount, incur any expense or perform
any act which, in Lender's judgment, is necessary or appropriate to preserve,
protect, insure or maintain the Collateral and the rights of Lender with respect
thereto. Lender may add any amounts so expended to the Obligations and charge
either Borrower's account therefor, such amounts to be repayable by either
Borrower on demand. Lender shall be under no obligation to effect such cure,
payment or bonding and shall not, by doing so, be deemed to
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have assumed any obligation or liability of either Borrower. Any payment made or
other action taken by Lender under this Section shall be without prejudice to
any right to assert an Event of Default hereunder and to proceed accordingly.
7.7 Access to Premises. From time to time as requested by Lender, at the
cost and expense of Borrowers, (a) Lender or its designee shall have complete
access to each Borrower's premises during normal business hours and after notice
to Borrower, or at any time and without notice to either Borrower if an Event of
Default exists or has occurred and is continuing, for the purposes of
inspecting, verifying and auditing the Collateral and all of each Borrower's
books and records, including, without limitation, the Records, and (b) each
Borrower shall promptly furnish to Lender such copies of such books and records
or extracts therefrom as Lender may request, and (c) use during normal business
hours such of each Borrower's personnel, equipment, supplies and premises as may
be reasonably necessary for the foregoing and if an Event of Default exists or
has occurred and is continuing for the collection of Accounts and realization of
other Collateral.
SECTION 8. REPRESENTATIONS AND WARRANTIES
Each Borrower hereby represents and warrants to Lender the following
(which shall survive the execution and delivery of this Agreement), the truth
and accuracy of which are a continuing condition of the making of Loans and
providing Letter of Credit Accommodations by Lender to Borrower:
8.1 Corporate Existence, Power and Authority; Subsidiaries. Each Borrower
is a corporation duly amalgamated or duly incorporated, as the case may be,
validly existing and duly organized under the laws of its jurisdiction of
incorporation and is duly qualified or registered as a foreign or
extra-provincial corporation in all provinces, states or other jurisdictions
where the nature and extent of the business transacted by it or the ownership of
assets makes such qualification necessary, except for those jurisdictions in
which the failure to so qualify would not have a material adverse effect on
either Borrower's financial condition, results of operation or business or the
rights of Lender in or to any of the Collateral. The execution, delivery and
performance of this Agreement, the other Financing Agreements and the
transactions contemplated hereunder and thereunder are all within each
Borrower's corporate powers, have been duly authorized and are not in
contravention of law or the terms of any Borrower's certificate of
incorporation, by-laws, or other organizational documentation, or any indenture,
agreement or undertaking to which a Borrower is a party or by which either
Borrower or its property are bound. This Agreement and the other Financing
Agreements constitute legal, valid and binding obligations of each Borrower
enforceable in accordance with
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their respective terms. Neither Borrower has any subsidiaries except as set
forth on the Information Certificate.
8.2 Financial Statements; No Material Adverse Change. All financial
statements relating to Borrowers or its affiliates which have been or may
hereafter be delivered by Borrowers to Lender have been prepared in accordance
with GAAP and fairly present the financial condition and the results of
operation of Borrowers and their affiliates as at the dates and for the periods
set forth therein. Except as disclosed in any interim financial statements
furnished by Borrowers to Lender prior to the date of this Agreement, there has
been no material adverse change in the assets, liabilities, properties and
condition, financial or otherwise, of either Borrower, since the date of the
most recent audited financial statements furnished by Borrowers to Lender prior
to the date of this Agreement.
8.3 Chief Executive Office; Collateral Locations. The principal executive
office of each Borrower and each Borrower's Records concerning its Accounts are
located only at the address set forth below and its only other places of
business and the only other locations of Collateral, if any, are the addresses
set forth in the Information Certificate, subject to the right of each Borrower
to establish new locations in accordance with Section 9.2 below. The day-to-day
operations of each Borrower are managed in its jurisdiction of incorporation.
The Information Certificate correctly identifies any of such locations which are
not owned by either Borrower and sets forth the owners and/or operators thereof
and to the best of each Borrower's knowledge, the holders of any mortgages on
such locations.
8.4 Priority of Liens; Title to Properties. The security interests,
charges and liens granted to Lender under this Agreement and the other Financing
Agreements constitute valid and perfected (to the extent applicable) first
priority liens, charges and security interests in and upon the Collateral
subject only to the liens indicated on Schedule 8.4 hereto and the other liens
permitted under Section 9.8 hereof. Each Borrower has good and marketable title
to all of its properties and assets subject to no liens, mortgages, pledges,
security interests, hypothecs, encumbrances or charges of any kind, except those
granted to Lender and such others as are specifically listed on Schedule 8.4
hereto or permitted under Section 9.8 hereof.
8.5 Tax Returns. Each Borrower has filed, or caused to be filed, in a
timely manner all tax returns and all material reports and declarations which
are required to be filed by it, except as provided in the Information
Certificate or as previously disclosed in writing to Lender. All information in
such tax returns, reports and declarations is complete and accurate in all
material respects. Each Borrower has paid or caused to be paid all taxes due and
payable or claimed due and payable in any assessment received by it, except
taxes the validity of which are being contested in good faith by appropriate
proceedings diligently pursued and available
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to a Borrower and with respect to which adequate reserves have been set aside on
its books. Adequate provision has been made for the payment of all accrued and
unpaid federal, provincial, municipal, local, foreign and other taxes whether or
not yet due and payable and whether or not disputed.
8.6 Litigation. Except as set forth on the Information Certificate, there
is no present investigation by any governmental agency pending, or to the best
of each Borrower's knowledge threatened, against or affecting either Borrower,
its assets or business and there is no action, suit, proceeding or claim by any
Person pending, or to the best of each Borrower's knowledge threatened, against
either Borrower or its assets or goodwill, or against or affecting any
transactions contemplated by this Agreement, which if adversely determined
against either Borrower would result in any material adverse change in the
assets, business or prospects of such Borrower or would impair the ability of
such Borrower to perform its obligations hereunder or under any of the other
Financing Agreements to which it is a party or of Lender to enforce any
Obligations or realize upon any Collateral.
8.7 Compliance with Other Agreements and Applicable Laws. Neither Borrower
is in default in any material respect under, or in violation in any material
respect of any of the terms of, any agreement, contract, instrument, lease or
other commitment to which it is a party or by which it or any of its assets are
bound and each Borrower is in compliance in all material respects with all
applicable provisions of laws, rules, regulations, licenses, permits, approvals
and orders of any foreign, federal, provincial or local governmental authority.
8.8 Bank Accounts. All of the deposit accounts, investment accounts or
other accounts in the name of or used by either Borrower maintained at any bank
or other financial institution are set forth on Schedule 8.8 hereto, subject to
the right of each Borrower to establish new accounts in accordance with Section
9.13 below.
8.9 Accuracy and Completeness of Information. All information furnished by
or on behalf of either Borrower in writing to Lender in connection with this
Agreement or any of the other Financing Agreements or any transaction
contemplated hereby or thereby, including, without limitation, all information
on the Information Certificate is true and correct in all material respects on
the date as of which such information is dated or certified and does not omit
any material fact necessary in order to make such information not misleading. No
event or circumstance has occurred which has had or could reasonably be expected
to have a material adverse affect on the business, assets or prospects of either
Borrower, which has not been fully and accurately disclosed to Lender in
writing.
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8.10 Environmental Compliance.
(a) Except as set forth on Schedule 8.10 hereto, neither Borrower
has generated, used, stored, treated, transported, manufactured, handled,
produced or disposed of any Hazardous Materials, on or off its premises (whether
or not owned by it) in a manner which constitutes a material violation of any
applicable Environmental Law or any license, permit, certificate, approval or
similar authorization thereunder and the operations of each Borrower comply in
all material respects with all Environmental Laws and all licenses, permits,
certificates, approvals and similar authorizations thereunder.
(b) Except as set forth on Schedule 8.10 hereto, there has been no
material investigation, proceeding, order, directive, claim, citation or written
notice by any governmental authority or any other person nor is any pending or
to the best of each Borrower's knowledge threatened, with respect to any
non-compliance with or violation of the requirements of any Environmental Law by
either Borrower or the release, spill or discharge, threatened or actual, of any
Hazardous Material or the generation, use, storage, treatment, transportation,
manufacture, handling, production or disposal of any Hazardous Materials or any
other environmental, health or safety matter, which affects either Borrower or
their business, operations or assets or any properties at which any Borrower has
transported, stored or disposed of any Hazardous Materials.
(c) Except as set forth on Schedule 8.10 hereto, neither Borrower
has any material liability (contingent or otherwise) in connection with a
release, spill or discharge, threatened or actual, of any Hazardous Materials or
the generation, use, storage, treatment, transportation, manufacture, handling,
production or disposal of any Hazardous Materials.
(d) Except as set forth on Schedule 8.10 hereto, each Borrower has
all material licenses, permits, certificates, approvals or similar
authorizations required to be obtained or filed in connection with the
operations of such Borrower under any Environmental Law and all of such
licenses, permits, certificates, approvals or similar authorizations are valid
and in full force and effect.
8.11 Capitalization.
(a) All of the issued and outstanding shares of Statia Terminals
Canada, Incorporated are directly and beneficially owned and held by Statia
Terminals Corporation N.V. and all of the issued and outstanding shares of Point
Tupper Marine Services Limited are directly and beneficially owned by Statia
Terminals Canada, Incorporated and all of such
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shares have been duly authorized and are fully paid and non-assessable, free and
clear of all claims, liens, pledges and encumbrances of any kind, except as set
forth on Schedule 8.11(a) hereto.
(b) Each Borrower is solvent and will continue to be solvent after
the creation of the Obligations, the security interests, liens and charges of
Lender and the other transaction contemplated hereunder, is able to pay its
debts as they mature and has (and has reason to believe it will continue to
have) sufficient capital (and not unreasonably small capital) to carry on its
business and all businesses in which it is about to engage. The assets and
properties of each Borrower at a fair valuation and at their present fair
salable value are, and will be, greater than the Indebtedness of such Borrower,
and including subordinated and contingent liabilities computed at the amount
which, to the best of such Borrower's knowledge, represents an amount which can
reasonably be expected to become an actual or matured liability.
8.12 Survival of Warranties; Cumulative. All representations and
warranties contained in this Agreement or any of the other Financing Agreements
shall survive the execution and delivery of this Agreement and shall be deemed
to have been made again to Lender on the date of each additional borrowing or
other credit accommodation hereunder and shall be conclusively presumed to have
been relied on by Lender regardless of any investigation made or information
possessed by Lender. The representations and warranties set forth herein shall
be cumulative and in addition to any other representations or warranties which
Borrower shall now or hereafter give, or cause to be given, to Lender.
SECTION 9. AFFIRMATIVE AND NEGATIVE COVENANTS
9.1 Maintenance of Existence. Each Borrower shall at all times preserve,
renew and keep in full, force and effect its corporate existence and rights and
franchises with respect thereto and maintain in full force and effect all
permits, licenses, trademarks, tradenames, approvals, authorizations, leases and
contracts necessary to carry on the business as presently or proposed to be
conducted. Each Borrower shall give Lender thirty (30) days prior written notice
of any proposed change in its corporate name, which notice shall set forth the
new name and such Borrower shall deliver to Lender a certified copy of the
Articles of Amendment or analogous documents of such Borrower providing for the
name change certified by the appropriate government authority of the
jurisdiction of incorporation of such Borrower as soon as it is available.
9.2 New Collateral Locations. Each Borrower may open new locations within
Canada provided such Borrower (a) gives Lender thirty (30) days prior written
notice of the intended
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opening of each such new location and (b) executes and delivers, or causes to be
executed and delivered, to Lender such agreements, documents, and instruments as
Lender may deem reasonably necessary or desirable to protect its interests in
the Collateral at such location, including, without limitation, PPSA and other
financing statements, any filings, notices or registrations necessary or
desirable under any applicable Personal Property Security Legislation and such
other evidence as Lender may require of the perfection, registration or
recording of Lender's first priority security interests, charges and liens where
required by Lender.
9.3 Compliance with Laws, Regulations, Etc.
(a) Each Borrower shall, at all times, comply in all material
respects with all laws, rules, regulations, licenses, permits, approvals and
orders applicable to it under applicable law (including, without limitation,
Environmental Laws and pension benefit legislation).
(b) Except with respect to any matter or event which would not have
a material adverse effect upon either Borrower or the conduct of its business,
each Borrower shall give both oral and written notice to Lender promptly upon
such Borrower's receipt of any notice of, or such Borrower otherwise obtaining
knowledge of, (i) the occurrence of any event involving the release, spill or
discharge of any Hazardous Material or (ii) any investigation, proceeding,
complaint, order, directive, claims, citation or notice with respect to: (A) any
non-compliance with or violation of any Environmental Law by such Borrower or
(B) the release, spill or discharge of any Hazardous Material or (C) the
generation, use, storage, treatment, transportation, manufacture, handling,
production or disposal of any Hazardous Materials or (D) any other
environmental, health or safety matter, which affects either Borrower or its
business, operations or assets or any properties at which either Borrower
transported, stored or disposed of any Hazardous Materials.
(c) Without limiting the generality of the foregoing, whenever
Lender reasonably determines that there is non-compliance, or any condition
which requires any action by or on behalf of either Borrower in order to avoid
any material non-compliance, with any Environmental Law, which non-compliance
could reasonably be expected to have a material adverse effect upon either
Borrower or the conduct of its business, the applicable Borrower shall, at
Lender's request and such Borrower's expense: (i) cause an independent
environmental engineer acceptable to Lender to conduct such tests of the site
where such Borrower's non-compliance or alleged non-compliance with such
Environmental Laws has occurred as to such non-compliance and prepare and
deliver to Lender a report as to such non-compliance setting forth the results
of such tests, a proposed plan for responding to any
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environmental problems described therein, and an estimate of the costs thereof
and (ii) provide to Lender a supplemental report of such engineer whenever the
scope of such non-compliance, or such Borrower's response thereto or the
estimated costs thereof, shall change in any material respect.
(d) Each Borrower shall indemnify and hold harmless Lender, its
directors, officers, employees, agents, invitees, representatives, successors
and assigns, from and against any and all losses, claims, damages, liabilities,
costs, and expenses (including legal fees and expenses) directly or indirectly
arising out of or attributable to the use, generation, manufacture, production,
storage, release, threatened release, spill, discharge, disposal or presence of
a Hazardous Material, including, without limitation, the costs of any required
or necessary repair, cleanup or other remedial work with respect to any property
of either Borrower and the preparation and implementation of any closure,
remedial or other required plans. All representations, warranties, covenants and
indemnifications in this Section 9.3 shall survive the payment of the
Obligations and the termination or non-renewal of this Agreement.
9.4 Payment of Taxes and Claims.
(a) Each Borrower shall duly pay and discharge all taxes,
assessments, contributions and governmental charges upon or against it or its
properties or assets, except for taxes the validity of which are being contested
in good faith by appropriate proceedings diligently pursued and available to
such Borrower and with respect to which adequate reserves have been set aside on
its books. Each Borrower shall be liable for any tax or penalties imposed on
Lender as a result of the financing arrangements provided for herein and each
Borrower agrees to indemnify and hold Lender harmless with respect to the
foregoing, and to repay to Lender on demand the amount thereof, and until paid
by either Borrower such amount shall be added and deemed part of the Loans,
provided, that, nothing contained herein (including Section 6.4) shall be
construed to require either Borrower to pay any income taxes attributable to the
income of Lender from any amounts charged or paid hereunder to Lender. The
foregoing indemnity shall survive the payment of the Obligations and the
termination or non-renewal of this Agreement.
(b) Upon the request of Borrowers, Lender agrees to provide
Borrowers with appropriate forms, certificates, documents or other information
to the extent necessary to establish a complete exemption from, or reduction in,
any taxes with respect to payments made by Borrowers to Lender hereunder,
provided that, Lender determines, in its sole and absolute discretion, that the
same will not have an effect upon the conduct of Lender's business or would or
may cause Lender to suffer any legal, regulatory or economic prejudice or harm,
as determined by Lender or its counsel in its or their discretion. All costs and
expenses incurred
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in connection with the foregoing shall be paid by Borrowers. Under no
circumstances shall Lender be required to disclose any of Lender's tax returns
or the tax returns of any affiliates or subsidiaries of Lender or to disclose
any other information (financial or otherwise) regarding the conduct of Lender's
business. In the event Lender elects not to cooperate with or otherwise provide
such forms, certificates, documents or other information to Borrowers, each
Borrower acknowledges and confirms that Lender shall have no liability
whatsoever to Borrowers, any Obligor or any of their respective affiliates or
subsidiaries.
9.5 Insurance. Each Borrower shall, at all times, maintain with
financially sound and reputable insurers insurance with respect to the
Collateral against loss or damage and all other insurance of the kinds and in
the amounts customarily insured against or carried by corporations of
established reputation engaged in the same or similar businesses and similarly
situated. Said policies of insurance shall be satisfactory to Lender as to form,
amount and insurer. Each Borrower shall furnish certificates, policies or
endorsements to Lender as Lender shall require as proof of such insurance, and,
if a Borrower fails to do so, Lender is authorized, but not required, to obtain
such insurance at the expense of Borrowers. All policies shall provide for at
least thirty (30) days prior written notice to Lender of any cancellation or
reduction of coverage and that Lender may act as attorney for each Borrower in
obtaining, and at any time an Event of Default exists or has occurred and is
continuing, adjusting, settling, amending and cancelling such insurance. Each
Borrower shall cause Lender to be named as a loss payee and an additional
insured (but without any liability for any premiums) under the insurance
policies related to the Inventory and all Records relating to Collateral and
each Borrower shall obtain non-contributory lender's loss payable endorsements
to such insurance policies related to the Inventory and all Records relating to
Collateral in form and substance satisfactory to Lender. Such lender's loss
payable endorsements shall specify that the proceeds of such insurance shall be
payable to Lender as its interests may appear and further specify that Lender
shall be paid regardless of any act or omission by either Borrower or any of its
affiliates. At its option, Lender may apply any insurance proceeds received by
Lender at any time to the cost of repairs or replacement of Collateral and/or to
payment of the Obligations, whether or not then due, in any order and in such
manner as Lender may determine or hold such proceeds as cash collateral for the
Obligations.
9.6 Financial Statements and Other Information.
(a) Each Borrower shall keep proper books and records in which true
and complete entries shall be made of all dealings or transactions of or in
relation to the Collateral and the business of each Borrower and its
subsidiaries in accordance with GAAP and Borrowers shall furnish or cause to be
furnished to Lender: (i) within twenty-five (25) days after the end of each
fiscal month, monthly unaudited consolidated financial statements and
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unaudited consolidating financial statements (in each case only balance sheets
and statements of income and loss), all in reasonable detail, fairly presenting
the financial position and the results of the operations of each Borrower and
its subsidiaries as of the end of and through such fiscal month, (ii) within
forty-five (45) days after the end of each fiscal quarter, quarterly unaudited
consolidated financial statements for Borrower and its affiliates and
subsidiaries (including in each case, balance sheets, statements of income and
loss, and statements of cash flow) all in reasonable detail, fairly presenting
the financial position and the results of the operations of each Borrower and
its subsidiaries and affiliates as of the end of and through such fiscal quarter
and (iii) within ninety (90) days after the end of each fiscal year, audited
consolidated financial statements and audited consolidating financial statements
of each Borrower and its subsidiaries and its affiliates (including in each case
balance sheets, statements of income and loss, statements of cash flow and
statements of shareholders' equity), and the accompanying notes thereto, all in
reasonable detail, fairly presenting the financial position and the results of
the operations of each Borrower and its subsidiaries and its affiliates as of
the end of and for such fiscal year, together with the opinion of independent
chartered accountants, which accountants shall be an independent accounting firm
selected by Borrowers and reasonably acceptable to Lender, that such financial
statements have been prepared in accordance with GAAP, and present fairly the
results of operations and financial condition of Borrowers and their
subsidiaries and affiliates as of the end of and for the fiscal year then ended.
(b) Each Borrower shall promptly notify Lender in writing of the
details of (i) any loss, damage, investigation, action, suit, proceeding or
claim relating to the Collateral or any other property which is security for the
Obligations or which would result in any material adverse change in either
Borrower's business, properties, assets, goodwill or condition, financial or
otherwise and (ii) the occurrence of any Event of Default or event which, with
the passage of time or giving of notice or both, would constitute an Event of
Default.
(c) Each Borrower shall promptly after the sending or filing thereof
furnish or cause to be furnished to Lender all reports and registration
statements which any Borrower files with any Canadian securities commission or
securities exchange.
(d) Each Borrower shall furnish or cause to be furnished to Lender
such budgets, forecasts, projections and other information respecting the
Collateral and the business of such Borrower, as Lender may, from time to time,
reasonably request. Lender is hereby authorized to deliver a copy of any
financial statement or any other information relating to the business of either
Borrower to any court or other government agency or to any participant or
assignee or prospective participant or assignee. Each Borrower hereby
irrevocably authorizes and directs all accountants or auditors to deliver to
Lender, at Borrowers' expense, copies of
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the financial statements of Borrowers and any reports or management letters
prepared by such accountants or auditors on behalf of Borrowers and to disclose
to Lender such information as they may have regarding the business of Borrowers.
Any documents, schedules, invoices or other papers delivered to Lender may be
destroyed or otherwise disposed of by Lender one (1) year after the same are
delivered to Lender, except as otherwise designated by Borrowers to Lender in
writing.
9.7 Sale of Assets, Consolidation, Amalgamation, Dissolution, Etc. Neither
Borrower shall, directly or indirectly, (a) amalgamate, merge into or with or
consolidate with any other Person or permit any other Person to amalgamate,
merge into or with or consolidate with it, without the prior written consent of
Lender, which consent shall not be unreasonably withheld, provided that, in
connection with any such proposed merger or consolidation, Borrower shall be the
surviving entity, or (b) sell, assign, lease, transfer, abandon or otherwise
dispose of any of its assets to any other Person (except for sales of Inventory
in the ordinary course of business and except for sales of assets (other than
Collateral) whereby the disposition thereof will not have an adverse effect upon
the Collateral or Lender's access thereto or will not have a material adverse
effect upon the conduct of the Borrower's business as presently conducted), or
(c) form or acquire any subsidiary except as permitted or not otherwise
prohibited under the Indenture and provided that Borrower provides Lender with
prior written notice thereof, or (d) wind up, liquidate or dissolve or (e) agree
to do any of the foregoing.
9.8 Encumbrances. Neither Borrower shall create, incur, assume or suffer
to exist any security interest, mortgage, pledge, lien, charge or other
encumbrance of any nature whatsoever on any of its assets or properties,
including, without limitation, the Collateral, except: (a) liens and security
interests of Lender; (b) liens securing the payment of taxes, either not yet
overdue or the validity of which are being contested in good faith by
appropriate proceedings diligently pursued and available to a Borrower and with
respect to which adequate reserves have been set aside on its books; (c)
non-consensual statutory liens (other than liens securing the payment of taxes)
arising in the ordinary course of a Borrower's business to the extent: (i) such
liens secure indebtedness which is not overdue or (ii) such liens secure
indebtedness relating to claims or liabilities which are fully insured and being
defended at the sole cost and expense and at the sole risk of the insurer or
being contested in good faith by appropriate proceedings diligently pursued and
available to a Borrower, in each case prior to the commencement of foreclosure
or other similar proceedings and with respect to which adequate reserves have
been set aside on its books; (d) zoning restrictions, easements, licenses,
covenants and other restrictions affecting the use of real property which do not
interfere in any material respect with the use of such real property or ordinary
conduct of the business of either Borrower as presently conducted thereon or
materially impair the value of the real property which may be subject thereto;
(e) purchase money security interests or liens in Equipment
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(including capital leases) and purchase money mortgages on real estate so long
as such security interests and mortgages do not apply to any property of either
Borrower other than the Equipment or real estate so acquired, and the
indebtedness secured thereby does not exceed the cost of the Equipment or real
estate so acquired, as the case may be; (f) the security interests and liens set
forth on Schedule 8.4 hereto; (g) any security interests and liens granted in
favour of the Trustee under the Indenture (with such security interests, charges
and liens being subject to the Access Agreement); and (h) any security interests
and liens granted in favour of any person which are permitted or not otherwise
prohibited under the Indenture provided that such liens shall not attach to any
of the Collateral.
9.9 Indebtedness. Neither Borrower shall incur, create, assume, become or
be liable in any manner with respect to, or permit to exist, any obligations or
indebtedness, except (a) the Obligations; (b) trade obligations and normal
accruals in the ordinary course of business not yet due and payable, or with
respect to which a Borrower is contesting in good faith the amount or validity
thereof by appropriate proceedings diligently pursued and available to such
Borrower, and with respect to which adequate reserves have been set aside on its
books; (c) purchase money indebtedness (including capital leases) to the extent
not incurred or secured by liens (including capital leases) in violation of any
other provision of this Agreement; (d) indebtedness as permitted or not
otherwise prohibited under the Indenture (provided that, such indebtedness
(other than indebtedness due the Trustee or the noteholders under the Indenture
or "Additional Secured Indebtedness" as defined in the Indenture) is not secured
by Collateral); and (e) the indebtedness set forth on Schedule 9.9 hereto;
provided, that, (i) a Borrower may only make regularly scheduled payments of
principal and interest in respect of such indebtedness in accordance with the
terms of the agreement or instrument evidencing or giving rise to such
indebtedness as in effect on the date hereof, (ii) neither Borrower shall,
directly or indirectly, (A) amend, modify, alter or change the terms of such
indebtedness or any agreement, document or instrument related thereto as in
effect on the date hereof, or (B) redeem, retire, defease, purchase or otherwise
acquire (except as provided for below) such indebtedness, or set aside or
otherwise deposit or invest any sums for such purpose, and (iii) each Borrower
shall furnish to Lender all notices or demands in connection with such
indebtedness either received by such Borrower or on its behalf, promptly after
the receipt thereof, or sent by such Borrower or on its behalf, concurrently
with the sending thereof, as the case may be. Notwithstanding anything to the
contrary contained in this Section 9.9, each Borrower shall have the right to
repurchase or otherwise acquire any Securities (as defined in the Indenture),
provided that no Event of Default exists and, after giving effect to such
repurchase or acquisition, there shall exist Excess Availability hereunder and
under the US Loan Agreement in an aggregate amount of not less than the Canadian
Dollar Amount equivalent of US $2,000,000.
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9.10 Loans, Investments, Guarantees, Etc. Neither Borrower shall, directly
or indirectly, make any loans or advance money or property to any person, or
invest in (by capital contribution, dividend or otherwise) or purchase or
repurchase the shares or indebtedness or all or a substantial part of the assets
or property of any person, or guarantee, assume, endorse, or otherwise become
responsible for (directly or indirectly) the indebtedness, performance,
obligations or dividends of any Person or agree to do any of the foregoing,
except: (a) loans by Borrowers to Statia N.V. in an aggregate amount not to
exceed the Canadian Dollar Amount equivalent to US $5,000,000 in any fiscal year
of the Borrowers, provided that, in each instance and at the time any such loan
is to be made (i) no Event of Default shall exist or have occurred and be
continuing or result from such loan and (ii) Borrowers have Excess Availability,
as determined by Lender immediately after giving effect to the making such loans
of not less than the Canadian Dollar Amount equivalent to US$1,000,000; (b) the
endorsement of instruments for collection or deposit in the ordinary course of
business; (c) investments in: (i) short-term direct obligations of the Canadian
Government, (ii) negotiable certificates of deposit issued by any bank
satisfactory to Lender, payable to the order of either Borrower or to bearer and
delivered to Lender, and (iii) commercial paper rated A1 or P1; and (d) the
loans, advances and guarantees set forth on Schedule 9.10 hereto or as permitted
or not otherwise prohibited under Sections 4.03 and 4.12 of the Indenture;
provided, that, as to such loans, advances and guarantees, (i) neither Borrower
shall, directly or indirectly, (A) amend, modify, alter or change the terms of
such loans, advances or guarantees or any agreement, document or instrument
related thereto, including amending or modifying Sections 4.03 and 4.12 of the
Indenture as in effect on the date hereof, or (B) as to such guarantees, redeem,
retire, defease, purchase or otherwise acquire the obligations arising pursuant
to such guarantees, or set aside or otherwise deposit or invest any sums for
such purpose except to the extent expressly provided for in the Indenture
provided that, after giving effect thereto, the same shall not create an Event
of Default hereunder, and (ii) each Borrower shall furnish to Lender all notices
or demands in connection with such loans, advances or guarantees or other
indebtedness subject to such guarantees either received by such Borrower or on
its behalf, promptly after the receipt thereof, or sent by such Borrower or on
its behalf, concurrently with the sending thereof, as the case may be.
9.11 Dividends and Redemptions. Neither Borrower shall, directly or
indirectly, declare or pay any dividends on account of any shares of such
Borrower now or hereafter outstanding, or set aside or otherwise deposit or
invest any sums for such purpose, or redeem, retire, defease, purchase or
otherwise acquire any shares of any class (or set aside or otherwise deposit or
invest any sums for such purpose) for any consideration other than common shares
or apply or set apart any sum, or make any other distribution (by reduction of
capital or otherwise) in respect of any such shares or agree to do any of the
foregoing, except as permitted or not otherwise prohibited under Sections 4.03
and 4.12 of the Indenture, provided
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that, after giving effect to any such dividend or redemption, no Event of
Default exists or would exist hereunder. Each Borrower further agrees that it
will not amend or modify Sections 4.03 and 4.12 of the Indenture as in effect on
the date hereof.
9.12 Transactions with Affiliates. Neither Borrower shall, directly or
indirectly, (a) purchase, acquire or lease any tangible property from, or sell,
transfer or lease any property to, any officer, director, agent or other person
affiliated with a Borrower, except in the ordinary course of and pursuant to the
reasonable requirements of a Borrower's business and upon fair and reasonable
terms no less favourable to such Borrower than such Borrower would obtain in a
comparable arm's length transaction with an unaffiliated person or (b) make any
payments of management, consulting or other fees for management or similar
services, or of any indebtedness owing to any officer, employee, shareholder,
director or other person affiliated with either Borrower, except (i) (A)
reasonable compensation to officers, employees and directors for services
rendered to such Borrower in the ordinary course of business and (B) payments to
EMT & Associates for consulting services pursuant to its consulting agreement
with Borrowers and payments to Statia Terminals, Inc. pursuant to its services
agreement with Borrowers and (ii) payments to Castle Harlan, Inc. as a
management fee, provided that, as of the date of such payment and after giving
effect thereto,, no Event of Default or act, condition or event which with
notice or passage of time or both would constitute an Event of Default shall
exist or have occurred and be continuing.
9.13 Additional Bank Accounts. At any time on or after the initial
borrowings hereunder, neither Borrower shall directly or indirectly, open,
establish or maintain any deposit account, investment account or any other
account with any bank or other financial institution, other than the Blocked
Accounts and the accounts set forth in Schedule 8.8 hereto, except: (a) as to
any new or additional Blocked Accounts and other such new or additional accounts
which contain any Collateral or proceeds thereof, with the prior written consent
of Lender and subject to such conditions thereto as Lender may establish; (b) as
to any accounts used by either Borrower to make payments of payroll, taxes or
other obligations to third parties, after prior written notice to Lender; and
(c) the Collateral Account (as defined in the Indenture).
9.14 Applications under the Companies' Creditors Arrangement Act.
Borrowers acknowledge that their business and financial relationships with
Lender are unique from its relationship with any other of its creditors. Each
Borrower agrees that it shall not file any plan of arrangement under the CCAA
("CCAA Plan") which provides for, or would permit directly or indirectly, Lender
to be classified with any other creditor of either Borrower for purposes of such
CCAA Plan or otherwise.
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9.15 Intentionally Deleted.
9.16 Costs and Expenses. Each Borrower shall pay to Lender on demand all
reasonable costs, expenses, filing fees and taxes paid or payable in connection
with the preparation, negotiation, execution, delivery, recording,
administration, collection, liquidation, enforcement and defense of the
Obligations, Lender's rights in the Collateral, this Agreement, the other
Financing Agreements and all other documents related hereto or thereto,
including any amendments, supplements or consents which may hereafter be
contemplated (whether or not executed) or entered into in respect hereof and
thereof, including, but not limited to: (a) all costs and expenses of filing or
recording (including PPSA and UCC financing statement and other similar filing,
registration and recording fees and taxes arising under applicable Personal
Property Security Legislation or otherwise, documentary taxes, intangibles taxes
and mortgage recording taxes and fees, if applicable); (b) all insurance
premiums, appraisal fees and search fees; (c) costs and expenses of remitting
loan proceeds, collecting cheques and other items of payment, and establishing
and maintaining the Blocked Accounts, if any, and the Payment Accounts, together
with Lender's customary charges and fees with respect thereto; (d) charges, fees
or expenses charged by any bank or issuer in connection with the Letter of
Credit Accommodations; (e) costs and expenses of preserving and protecting the
Collateral; (f) costs and expenses paid or incurred in connection with obtaining
payment of the Obligations, enforcing the security interests and liens of
Lender, selling or otherwise realizing upon the Collateral, and otherwise
enforcing the provisions of this Agreement and the other Financing Agreements or
defending any claims made or threatened against Lender arising out of the
transactions contemplated hereby and thereby (including, without limitation,
preparations for and consultations concerning any such matters); (g) all
out-of-pocket expenses and costs heretofore and from time to time hereafter
incurred by Lender during the course of periodic field examinations of the
Collateral and Borrowers' operations, plus a per diem charge at the rate of
US$600 per person per day for Lender's examiners in the field and office; and
(h) the fees and disbursements of counsel (including legal assistants) to Lender
in connection with any of the foregoing.
9.17 Further Assurances. At the request of Lender at any time and from
time to time, each Borrower shall, at its expense, duly execute and deliver, or
cause to be duly executed and delivered, such further agreements, documents and
instruments (including, without limitation, Hypothecs and a general security
agreement upon enactment of the Personal Property Security Act (Nova Scotia)),
and do or cause to be done such further acts as may be necessary or proper to
evidence, perfect, maintain and enforce the security interests, liens charges
and assignments and the priority thereof in the Collateral and to otherwise
effectuate the provisions or purposes of this Agreement or any of the other
Financing Agreements. Lender may at any time and from time to time request a
certificate from an officer of a Borrower representing that all
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conditions precedent to the making of Loans and providing Letter of Credit
Accommodations contained herein are satisfied. In the event of such request by
Lender, Lender may, at its option, cease to make any further Loans or provide
any further Letter of Credit Accommodations until Lender has received such
certificate and, in addition, Lender has determined that such conditions are
satisfied. Where permitted by law, each Borrower hereby authorizes Lender to
execute and file one or more PPSA, UCC or other financing statements or notices
or other filings under the applicable Personal Property Security Legislation
signed only by Lender or Lender's representative.
SECTION 10. EVENTS OF DEFAULT AND REMEDIES
10.1 Events of Default. The occurrence or existence of any one or more of
the following events are referred to herein individually as an "Event of
Default", and collectively as "Events of Default":
(a) (i) Either Borrower fails to pay any of the Obligations within
three (3) days after the same becomes due and payable or (ii) either Borrower or
any Obligor fails to perform any of the terms, covenants, conditions or
provisions contained in this Agreement or any of the other Financing Agreements
other than as described in Section 10.1(a)(i) and such failure shall continue
for ten (10) days; provided, that, such ten (10) day period shall not apply in
the case of: (A) any failure to observe any such term, covenant, condition or
provision which is not capable of being cured at all or within such ten (10) day
period or which has been the subject of a prior failure within a six (6) month
period or (B) an intentional breach by either Borrower or any Obligor of any
such term, covenant, condition or provision, or (C) the failure to observe or
perform any of the covenants or provisions contained in Section 9.2, 9.7, 9.8
(with respect to Collateral only), 9.9, 9.10, 9.11 or 9.12 of this Agreement or
any covenants or agreements covering substantially the same matter as such
sections in any of the other Financing Agreements;
(b) any representation, warranty or statement of fact made by either
Borrower to Lender in this Agreement, the other Financing Agreements or any
other agreement, schedule, confirmatory assignment or otherwise shall when made
or deemed made be false or misleading in any material respect;
(c) any Obligor revokes, terminates or fails to perform any of the
terms, covenants, conditions or provisions of any guarantee, endorsement or
other agreement of such party in favour of Lender;
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(d) any judgment for the payment of money is rendered against either
Borrower or any Obligor in excess of the Canadian Dollar Amount equivalent to
US$ 500,000 in any one case or in excess of the Canadian Dollar Amount
equivalent to US$1,000,000 in the aggregate and shall remain undischarged or
unvacated for a period in excess of thirty (30) days or execution shall at any
time not be effectively stayed, or any injunction, attachment, garnishment or
execution involving the Collateral, a substantial portion of either Borrower's
or any Obligor's assets, or any other property owned by either Borrower or
Obligor materially necessary for the conduct of either Borrower's or any
Obligor's respective businesses is rendered against either Borrower or any
Obligor or any of such assets;
(e) any Obligor (being a natural person or a general partner of an
Obligor which is a partnership) dies or either Borrower or any Obligor, which is
a partnership or corporation, dissolves or suspends or discontinues doing
business;
(f) either Borrower or any Obligor becomes insolvent (however
defined or evidenced under the laws of Canada, the United States of America, the
Netherlands, Antilles or otherwise), makes an assignment for the benefit of
creditors, makes or sends notice of a bulk transfer or sale calls a meeting of
its creditors or principal creditors, or a trustee, receiver or liquidator is
appointed or assigned under the laws of Canada, the United States of America,
the Netherlands, Antilles or any other applicable law with respect to any of the
Collateral or all or substantially all of the assets of either Borrower or any
Obligor;
(g) a petition, case or proceeding under the bankruptcy or
insolvency laws of Canada, the United States of America, the Netherlands
Antilles (including, without limitation, the Netherlands Antilles Bankruptcy
Decree) or any similar federal, state, provincial or foreign law for the relief
of creditors now or hereafter in effect or under any insolvency, arrangement,
reorganization, moratorium, receivership, readjustment of debt, dissolution or
liquidation law or statute of any jurisdiction now or hereafter in effect
(whether at law or in equity) is filed or commenced against either Borrower or
any Obligor or all or any substantial part of its properties and such petition
or application is not dismissed within thirty (30) days after the date of its
filing or either Borrower or any Obligor shall file any answer admitting or not
contesting such petition or application or indicates its consent to,
acquiescence in or approval of, any such action or proceeding or the relief
requested is granted sooner;
(h) a petition, case or proceeding under the bankruptcy or
insolvency laws of Canada, the United States of America, the Netherlands
Antilles (including, without limitation, the Netherlands Antilles Bankruptcy
Decree) or federal, state, provincial or foreign law for the relief of creditors
now or hereafter in effect or under any insolvency, arrangement, reorganization,
moratorium, receivership, readjustment of debt, dissolution or liquidation law
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or statute of any jurisdiction now or hereafter in effect (whether at a law or
equity) is filed or commenced by either Borrower or any Obligor for all or any
part of its property including, without limitation, if either Borrower or any
Obligor shall:
(i) apply for or consent to the appointment of a receiver,
trustee or liquidator of it or of all or a substantial part of its
property and assets;
(ii) be unable, or admit in writing its inability, to pay its
debts as they mature, or commit any other act of bankruptcy;
(iii) make a general assignment for the benefit of creditors;
(iv) file a voluntary petition or assignment in bankruptcy or
a proposal seeking a reorganization, compromise, moratorium or
arrangement with its creditors;
(v) take advantage of any insolvency or other similar law
pertaining to arrangements, moratoriums, compromises or
reorganizations, or admit the material allegations of a petition or
application filed in respect of it in any bankruptcy, reorganization
or insolvency proceeding; or
(vi) take any corporate action for the purpose of effecting
any of the foregoing;
(i) any default by either Borrower or any Obligor under any
agreement, document or instrument relating to any indebtedness for borrowed
money owing to any person other than Lender, or any capitalized lease
obligations, contingent indebtedness in connection with any guarantee, letter of
credit, indemnity or similar type of instrument in favour of any person other
than Lender, in any case in an amount in excess of the Canadian Dollar Amount
equivalent to US$1,000,000, which default continues for more than the applicable
cure period, if any, with respect thereto, or any default by either Borrower or
any Obligor under any material contract, lease, license or other obligation to
any person other than Lender, which default continues for more than the
applicable cure period, if any, with respect thereto;
(j) any change in the ownership of either Borrower;
(k) the indictment or threatened indictment of either Borrower or
any Obligor under any criminal statute, or commencement or threatened
commencement of criminal or civil proceedings against either Borrower or any
Obligor, pursuant to which statute or
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proceedings the penalties or remedies sought or available include forfeiture of
any of the property of either Borrower or such Obligor;
(l) there shall be a material adverse change in the business, assets
or prospects of either Borrower or any Obligor after the date hereof;
(m) there shall be an event of default under the US Loan Agreement
or any of the US Financing Agreements;
(n) there shall be an event of default under the Indenture;
(o) the termination by US Lender or Statia N.V. of those certain
financing arrangements arising under or in connection with the US Loan
Agreement;
(p) there shall be an event of default under any of the other
Financing Agreements;
(q) a requirement from the Minister of National Revenue for payment
pursuant to Section 224 or any successor section of the Income Tax Act (Canada)
or Section 317, or any successor section or any other Person in respect of
either Borrower of the Excise Tax Act (Canada) or any comparable provision of
similar legislation shall have been received by Lender or any other Person in
respect of either Borrower or otherwise issued in respect of either Borrower; or
(r) the Trustee breaches, or otherwise fails to comply with, any of
the terms or provisions of the Access Agreement.
10.2 Remedies.
(a) At any time an Event of Default exists or has occurred and is
continuing, Lender shall have all rights and remedies provided in this
Agreement, the other Financing Agreements, the PPSA, the applicable Personal
Property Security Legislation and other applicable law, all of which rights and
remedies may be exercised without notice to or consent by either Borrower or any
Obligor, except as such notice or consent is expressly provided for hereunder or
required by applicable law. All rights, remedies and powers granted to Lender
hereunder, under any of the other Financing Agreements, the PPSA, the applicable
Personal Property Security Legislation or other applicable law, are cumulative,
not exclusive and enforceable, in Lender's discretion, alternatively,
successively, or concurrently on any one or more occasions, and shall include,
without limitation, the right to apply to a court of equity for
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an injunction to restrain a breach or threatened breach by either Borrower of
this Agreement or any of the other Financing Agreements. Lender may, at any time
or times, proceed directly against either Borrower or any Obligor to collect the
Obligations without prior recourse to the Collateral.
(b) Without limiting the foregoing, at any time an Event of Default
exists or has occurred and is continuing, Lender may, in its discretion and
without limitation, (i) accelerate the payment of all Obligations and demand
immediate payment thereof to Lender (provided, that, upon the occurrence of any
Event of Default described in Sections 10.1(g) and 10.1(h), all Obligations
shall automatically become immediately due and payable), (ii) with or without
judicial process or the aid or assistance of others, enter upon any premises on
or in which any of the Collateral may be located and take possession of the
Collateral or complete processing, manufacturing and repair of all or any
portion of the Collateral, (iii) require each Borrower, at Borrowers' expense,
to assemble and make available to Lender any part or all of the Collateral at
any place and time designated by Lender, (iv) collect, foreclose, receive,
appropriate, setoff and realize upon any and all Collateral, (v) remove any or
all of the Collateral from any premises on or in which the same may be located
for the purpose of effecting the sale, foreclosure or other disposition thereof
or for any other purpose, (vi) sell, lease, transfer, assign, deliver or
otherwise dispose of any and all Collateral (including, without limitation,
entering into contracts with respect thereto, public or private sales at any
exchange, broker's board, at any office of Lender or elsewhere) at such prices
or terms as Lender may deem reasonable, for cash, upon credit or for future
delivery, with the Lender having the right to purchase the whole or any part of
the Collateral at any such public sale, all of the foregoing being free from any
right or equity of redemption of either Borrower, which right or equity of
redemption is hereby expressly waived and released by each Borrower, and/or
(vii) terminate this Agreement. If any of the Collateral is sold or leased by
Lender upon credit terms or for future delivery, the Obligations shall not be
reduced as a result thereof until payment therefor is finally collected by
Lender. If notice of disposition of Collateral is required by law, five (5) days
prior notice by Lender to Borrowers designating the time and place of any public
sale or the time after which any private sale or other intended disposition of
Collateral is to be made, shall be deemed to be reasonable notice thereof and
Borrowers waive any other notice. In the event Lender institutes an action to
recover any Collateral or seeks recovery of any Collateral by way of prejudgment
remedy, each Borrower waive the posting of any bond which might otherwise be
required.
(c) Lender may apply the cash proceeds of Collateral actually
received by Lender from any sale, lease, foreclosure or other disposition of the
Collateral to payment of the Obligations, in whole or in part and in such order
as Lender may elect, whether or not then
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due. Each Borrower shall remain liable to Lender for the payment of any
deficiency with interest at the highest rate provided for herein.
(d) Without limiting the foregoing, upon the occurrence of an Event
of Default or an event which with notice or passage of time or both would
constitute an Event of Default, Lender may, at its option, without notice, (i)
cease making Loans or arranging Letter of Credit Accommodations or reduce the
lending formulas or amounts of Revolving Loans and Letter of Credit
Accommodations available to Borrowers and/or (ii) terminate any provision of
this Agreement providing for any future Loans or Letter of Credit Accommodations
to be made by Lender to Borrowers.
(e) Lender may appoint, remove and reappoint any person or persons,
including an employee or agent of Lender to be a receiver (the "Receiver") which
term shall include a receiver and manager of, or agent for, all or any part of
the Collateral. Any such Receiver shall, as far as concerns responsibility for
his acts, be deemed to be the agent of Borrowers and not of Lender, and Lender
shall not in any way be responsible for any misconduct, negligence or
non-feasance of such Receiver, his employees or agents. Except as otherwise
directed by Lender, all money received by such Receiver shall be received in
trust for and paid to Lender. Such Receiver shall have all of the powers and
rights of Lender described in this Section 10.2. Lender may, either directly or
through its agents or nominees, exercise any or all powers and rights of a
Receiver.
(f) Borrowers shall pay all costs, charges and expenses incurred by
Lender or any Receiver or any nominee or agent of Lender, whether directly or
for services rendered (including, without limitation, solicitor's costs on a
solicitor and his own client basis, auditor's costs, other legal expenses and
Receiver remuneration) in enforcing this Agreement or any other Financing
Agreement and in enforcing or collecting Obligations and all such expenses shall
be a charge on the proceeds of realization and shall be secured hereby.
SECTION 11. JURY TRIAL WAIVER; OTHER WAIVERS AND CONSENTS; GOVERNING LAW
11.1 Governing Law; Choice of Forum; Service of Process; Jury Trial
Waiver.
(a) The validity, interpretation and enforcement of this Agreement
and the other Financing Agreements and any dispute arising out of the
relationship between the parties hereto, whether in contract, tort, equity or
otherwise, shall be governed by the laws of the Province of Ontario and the
federal laws of Canada applicable therein.
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(b) Each Borrower and Lender irrevocably consent and submit to the
non-exclusive jurisdiction of the Ontario Court (General Division), the Supreme
Court of the State of New York and the United States District Court for the
Southern District of New York and waive any objection based on venue or forum
non conveniens with respect to any action instituted therein arising under this
Agreement or any of the other Financing Agreements or in any way connected with
or related or incidental to the dealings of the parties hereto in respect of
this Agreement or any of the other Financing Agreements or the transactions
related hereto or thereto, in each case whether now existing or hereafter
arising, and whether in contract, tort, equity or otherwise, and agree that any
dispute with respect to any such matters shall be heard only in the courts
described above (except that Lender shall have the right to bring any action or
proceeding against either Borrower or its property in the courts of any other
jurisdiction which Lender deems necessary or appropriate in order to realize on
the Collateral or to otherwise enforce its rights against either Borrower or its
property).
(c) To the extent permitted by law, each Borrower hereby waives
personal service of any and all process upon it and consents that all such
service of process may be made by registered mail (return receipt requested)
directed to its address set forth on the signature pages hereof and service so
made shall be deemed to be completed five (5) days after the same shall have
been so deposited in the Canadian mails, or, at Lender's option, by service upon
such Borrower in any other manner provided under the rules of any such courts.
Within thirty (30) days after such service, such Borrower shall appear in answer
to such process, failing which such Borrower shall be deemed in default and
judgment may be entered by Lender against such Borrower for the amount of the
claim and other relief requested.
(d) EACH BORROWER AND LENDER EACH HEREBY WAIVES ANY RIGHT TO TRIAL
BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (i) ARISING UNDER THIS
AGREEMENT OR ANY OF THE OTHER FINANCING AGREEMENTS OR (ii) IN ANY WAY CONNECTED
WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO IN RESPECT
OF THIS AGREEMENT OR ANY OF THE OTHER FINANCING AGREEMENTS OR THE TRANSACTIONS
RELATED HERETO OR THERETO IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER
ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY OR OTHERWISE. EACH BORROWER AND
LENDER EACH HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT EITHER
BORROWER OR LENDER MAY FILE AN ORIGINAL COUNTERPART OF A COPY OF THIS AGREEMENT
WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE
WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
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(e) Lender shall not have any liability to any Borrower (whether in
tort, contract, equity or otherwise) for losses suffered by either Borrower in
connection with, arising out of, or in any way related to the transactions or
relationships contemplated by this Agreement or any other Financing Agreement,
or any act, omission or event occurring in connection herewith, unless it is
determined by a final and non-appealable judgment or court order binding on
Lender, that the losses were the result of acts or omissions constituting gross
negligence or willful misconduct. In any such litigation, Lender shall be
entitled to the benefit of the rebuttable presumption that it acted in good
faith and with the exercise of ordinary care in the performance by it of the
terms of this Agreement or any other Financing Agreement.
(f) Each Borrower waives the posting of any bond otherwise required
of Lender in connection with any judicial process or proceeding to obtain
possession of, replevy, attach or levy upon the Collateral or other security for
the Obligations, to enforce any judgment or other court order entered in favour
of Lender, or to enforce by specific performance, temporary restraining order,
preliminary or permanent injunction, this Agreement or any other Financing
Agreement.
11.2 Waiver of Notices. Each Borrower hereby expressly waives demand,
presentment, protest and notice of protest and notice of dishonour with respect
to any and all instruments and commercial paper, included in or evidencing any
of the Obligations or the Collateral, and any and all other demands and notices
of any kind or nature whatsoever with respect to the Obligations, the Collateral
and this Agreement, except such as are expressly provided for herein. No notice
to or demand on either Borrower which Lender may elect to give shall entitle
either Borrower to any other or further notice or demand in the same, similar or
other circumstances.
11.3 Amendments and Waivers. Neither this Agreement nor any provision
hereof shall be amended, modified, waived or discharged orally or by course of
conduct, but only by a written agreement signed by an authorized officer of
Lender. Lender shall not, by any act, delay, omission or otherwise be deemed to
have expressly or impliedly waived any of its rights, powers and/or remedies
unless such waiver shall be in writing and signed by an authorized officer of
Lender. Any such waiver shall be enforceable only to the extent specifically set
forth therein. A waiver by Lender of any right, power and/or remedy on any one
occasion shall not be construed as a bar to or waiver of any such right, power
and/or remedy which Lender would otherwise have on any future occasion, whether
similar in kind or otherwise.
11.4 Waiver of Counterclaims. Each Borrower waives all rights to interpose
any claims, deductions, setoffs or counterclaims of any nature (other then
compulsory
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counterclaims) in any action or proceeding with respect to this Agreement, the
Obligations, the Collateral or any matter arising therefrom or relating hereto
or thereto.
11.5 Indemnification. Each Borrower shall indemnify and hold Lender, and
its directors, agents, employees and counsel, harmless from and against any and
all losses, claims, damages, liabilities, costs or expenses imposed on, incurred
by or asserted against any of them in connection with any litigation,
investigation, claim or proceeding commenced or threatened related to the
negotiation, preparation, execution, delivery, enforcement, performance or
administration of this Agreement, any other Financing Agreements, or any
undertaking or proceeding related to any of the transactions contemplated hereby
or any act, omission, event or transaction related or attendant thereto,
including, without limitation, amounts paid in settlement, court costs, and the
fees and expenses of counsel. To the extent that the undertaking to indemnify,
pay and hold harmless set forth in this Section may be unenforceable because it
violates any law or public policy, each Borrower shall pay the maximum portion
which it is permitted to pay under applicable law to Lender in satisfaction of
indemnified matters under this Section. The foregoing indemnity shall survive
the payment of the Obligations and the termination or non-renewal of this
Agreement.
SECTION 12. TERM OF AGREEMENT; MISCELLANEOUS
12.1 Term.
(a) This Agreement and the other Financing Agreements shall become
effective as of the date set forth on the first page hereof and shall continue
in full force and effect for a term ending on the date three (3) years from the
date hereof (the "Renewal Date"), and from year to year thereafter, unless
sooner terminated pursuant to the terms hereof. Lender may terminate this
Agreement and the other Financing Agreements effective on the Renewal Date or on
the anniversary of the Renewal Date in any year by giving Borrowers at least
sixty (60) days prior written notice, and Borrowers may terminate this Agreement
at any time by giving Lender at least sixty (60) days prior written notice;
provided, that, this Agreement, all other Financing Agreements and the US
Financing Agreements must be terminated simultaneously. Upon the effective date
of termination or non-renewal of the Financing Agreements, Borrowers shall pay
to Lender, in full, all outstanding and unpaid Obligations together with all
amounts payable under pursuant to the terms of Section 12.1(c) hereof and shall
furnish cash collateral to Lender in such amounts as Lender determines are
reasonably necessary to secure Lender from loss, cost, damage or expense,
including legal fees and expenses, in connection with any contingent
Obligations, including issued and outstanding Letter of Credit Accommodations
and cheques or other payments provisionally credited to the Obligations
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and/or as to which Lender has not yet received final and indefeasible payment.
Such cash collateral shall be remitted by wire transfer in Canadian Dollars to
such bank account of Lender, as Lender may, in its discretion, designate in
writing to Borrowers for such purpose. Interest shall be due until and including
the next business day, if the amounts so paid by Borrowers to the bank account
designated by Lender are received in such bank account later than 12:00 noon,
Toronto time.
(b) No termination of this Agreement or the other Financing
Agreements shall relieve or discharge any Borrower of its respective duties,
obligations and covenants under this Agreement or the other Financing Agreements
until all Obligations have been fully and finally discharged and paid, and
Lender's continuing security interest, lien and charge in the Collateral and the
rights and remedies of Lender hereunder, under the other Financing Agreements
and applicable law, shall remain in effect until all such Obligations have been
fully and finally discharged and paid.
(c) If for any reason this Agreement is terminated prior to the end
of the initial term in view of the impracticality and extreme difficulty of
ascertaining actual damages and by mutual agreement of the parties as to a
reasonable calculation of Lender's lost profits as a result thereof, Borrowers
agree to pay to Lender, upon the effective date of such termination, an early
termination fee in the amount set forth below if such termination is effective
in the period indicated:
Amount Period
------ ------
(i) 3.0% of Maximum Credit From the date hereof to and
including November 26, 1997
(ii) 2.0% of Maximum Credit From November 27, 1997 to and
including November 26, 1998
(iii) 1.0% of Maximum Credit From November 27, 1998 to and
including November 26, 1999
Such early termination fee shall be presumed to be the amount of damages
sustained by Lender as a result of such early termination and each Borrower
agrees that it is reasonable under the circumstances currently existing. In
addition, Lender shall be entitled to such early termination fee upon the
occurrence of any Event of Default described in Sections 10.1(g) and 10.1(h)
hereof, even if Lender does not exercise its rights to terminate this Agreement,
but elects, at its option, to provide financing to Borrowers or permit the use
of cash collateral
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during the course of insolvency or bankruptcy proceedings. The early termination
fee provided for in this Section 12.1 shall be deemed included in the
Obligations.
(d) Notwithstanding anything to the contrary contained herein, if
Borrowers request Lender to consent to an amalgamation, merger or consolidation
as required under Section 9.7(a) of this Agreement (the "Merger") and Lender
advises Borrowers in writing that Lender does not consent to such Merger, then
Borrowers shall have the right to terminate this Agreement upon not less than
ten (10) days prior written notice to Lender and Lender agrees to waive the
early termination fee which would otherwise be required to be paid hereunder,
provided that (i) such termination occurs within ninety (90) days after Lender
notifies Borrowers that it will not consent to the Merger and (ii) the Merger in
fact occurs effective as of the termination date of this Agreement. If either of
the conditions of this Section 12.1(d)(i) and (ii) are not complied with by
Borrowers then Borrowers shall pay Lender the early termination fee as provided
for in Section 12(c) in connection with the termination of this Agreement.
12.2 Notices. All notices, requests and demands hereunder shall be in
writing and (a) made to Lender and Congress US at the addresses set forth below
and to Borrowers at their principal executive office set forth below, or to such
other address as either party may designate by written notice to the other in
accordance with this provision, and (b) deemed to have been given or made: if
delivered in person, immediately upon delivery; if by facsimile transmission,
immediately upon sending and upon confirmation of receipt; if by nationally
recognized overnight courier service with instructions to deliver the next
business day, one (1) business day after sending; and if by registered mail,
return receipt requested, five (5) days after mailing.
12.3 Partial Invalidity. If any provision of this Agreement is held to be
invalid or unenforceable, such invalidity or unenforceability shall not
invalidate this Agreement as a whole, but this Agreement shall be construed as
though it did not contain the particular provision held to be invalid or
unenforceable and the rights and obligations of the parties shall be construed
and enforced only to such extent as shall be permitted by applicable law.
12.4 Successors. This Agreement, the other Financing Agreements and any
other document referred to herein or therein shall be binding upon and inure to
the benefit of and be enforceable by Lender, each Borrower and their respective
successors and assigns, except that neither Borrower may assign its rights under
this Agreement, the other Financing Agreements and any other document referred
to herein or therein without the prior written consent of Lender. Lender may,
after notice to Borrowers, assign its rights and delegate its obligations under
this Agreement and the other Financing Agreements and further may assign, or
sell
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<PAGE>
participations in, all or any part of the Loans, the Letter of Credit
Accommodations or any other interest herein to another financial institution or
other person, in which event, the assignee or participant shall have, to the
extent of such assignment or participation, the same rights and benefits as it
would have if it were the Lender hereunder, except as otherwise provided by the
terms of such assignment or participation, provided further that if Lender
assigns all of its rights and interests hereunder and as of the date of such
assignment, no Event of Default exists and is continuing, the Borrowers or the
Obligor, as the case may be, shall not be obligated to pay additional amounts
pursuant to the second sentence of Section 9.4(a) to the extent that such
amounts exceed the amounts that would have otherwise been payable to the
assignor had such assignor not made such assignment or transfer, except that,
the foregoing provisions shall not apply in the event that Lender assigned its
rights and interests hereunder after the occurrence of an Event of Default and
during its continuance.
12.5 Joint and Several Liability. All Loans made hereunder are made to or
for the benefit of each of the Borrowers. The Borrowers are jointly and
severally, directly and primarily liable for the full and indefeasible payment
when due and performance of all Obligations and for the prompt and full payment
and performance of all of the promises, covenants, representations, and
warranties made or undertaken by each Borrower under the Financing Agreements
and each Borrower agrees that such liability is independent of the duties,
obligations, and liabilities of each of the joint and several Borrowers. In
furtherance of the foregoing, each Borrower jointly and severally, absolutely
and unconditionally guaranties to Lender and agrees to be liable for the full
and indefeasible payment and performance when due of all the Obligations. This
guarantee is a continuing guarantee, shall not be terminated while any of the
Obligations is outstanding, and shall apply to all Obligations whenever arising.
12.6 Suretyship Waivers and Consents.
(a) Each Borrower acknowledges that the obligations of such Borrower
(the "Guarantor Borrower") undertaken herein might be construed to consist, at
least in part, of the guarantee of obligations (the "Guaranteed Obligations") of
persons other than such Borrower (including the other Borrower) and, in full
recognition of that fact, the Guarantor Borrower consents and agrees that Lender
may, at any time and from time to time, with respect to the Guaranteed
Obligations, without notice or demand, (except as provided in and in accordance
with the terms of this Agreement), whether before or after any actual or
purported termination, repudiation or revocation of this Agreement by either
Borrower, and without affecting the enforceability or continuing effectiveness
hereof as to the Guarantor Borrower: (i) increase, extend, or otherwise change
the time for payment or the terms of the Guaranteed Obligations or any part
thereof; (ii) supplement, restate, modify, amend, increase, decrease, or waive,
or
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enter into or give any agreement, approval or consent with respect to, the
Guaranteed Obligations or any part thereof, or any of the Financing Agreements
or any additional security or guarantees, or any condition, covenant, default,
remedy, right, representation, or term thereof or thereunder; (iii) accept new
or additional instruments, documents, or agreements in exchange for or relative
to any of the Financing Agreements or the Guaranteed Obligations or any part
thereof; (iv) accept partial payments on the Guaranteed Obligations; (v) receive
and hold additional security or guarantees for the Guaranteed Obligations or any
part thereof; (vi) release, reconvey, terminate, waive, abandon, fail to
perfect, subordinate, exchange, substitute, transfer, or enforce any Collateral,
security or guarantees, and apply any Collateral or security and direct the
order or manner of sale thereof as Lender in its sole and absolute discretion
may determine; (vii) release any person from any personal liability with respect
to the Guaranteed Obligations or any part thereof; (viii) settle, release on
terms satisfactory to Lender or by operation of applicable laws or otherwise
liquidate or enforce any Guaranteed Obligations and any Collateral or security
therefor or guarantee thereof in any manner, consent to the transfer of any
Collateral or security and bid and purchase at any sale; or (ix) consent to the
merger, change, or any other restructuring or termination of the corporate or
partnership existence of either Borrower, and any corresponding restructuring of
the Guaranteed Obligations, and any such merger, change, restructuring, or
termination shall not affect the liability of the Guarantor Borrower or the
continuing effectiveness hereof, or the enforceability hereof with respect to
all or any part of the Guaranteed Obligations.
(b) Lender may enforce this Agreement independently as to each
Borrower and independently of any other remedy or security Lender at any time
may have or hold in connection with the Obligations, and it shall not be
necessary for Lender to marshal assets in favour of either Borrower or any
Obligor or to proceed upon or against or exhaust any Collateral or security or
remedy before proceeding to enforce this Agreement. Each Borrower expressly
waives any right to require Lender to marshal assets in favor of either Borrower
or any guarantor of the Obligations or to proceed against the other Borrower,
and agrees that Lender may proceed against Borrowers or any Collateral in such
order as Lender shall determine in its sole an absolute discretion.
(c) Lender may file a separate action or actions against either
Borrower, whether such action is brought or prosecuted with respect to any
security or against any guarantor of the Obligations, or whether any other
person is joined in any such action or actions. Each Borrower agrees that Lender
and each Borrower and any affiliate of either Borrower may deal with each other
in connection with the Obligations or otherwise, or alter any contracts or
agreements now or hereafter existing between any of them, in any manner
whatsoever, all without in any way altering or affecting the continuing
enforceability of this Agreement. Each Borrower, as a joint and several Borrower
hereunder, expressly waives the
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benefit of any statute of limitations affecting its joint and several liability
hereunder (but not its primary liability) or the enforcement of the Obligations
or any rights of Lender created or granted herein.
(d) Lender's rights hereunder shall be reinstated and revived, and
the enforceability of this Agreement shall continue, with respect to any amount
at any time paid on account of the Obligations which thereafter shall be
required to be restored or returned by Lender, all as though such amount had not
been paid. The rights of Lender created or granted herein and the enforceability
of this Agreement at all times shall remain effective to cover the full amount
of all the Obligations even though the Obligations, including any part thereof
or any Collateral, other security or guarantee therefor, may be or hereafter may
become invalid or otherwise unenforceable as against either Borrower and whether
or not either Borrower shall have any personal liability with respect thereto.
(e) Each Borrower expressly waives any and all defenses now or
hereafter arising or asserted by reason of (i) any disability or other defense
of the other Borrower with respect to the Obligations; (ii) the unenforceability
or invalidity of any security or guaranty for the Obligations or the lack of
perfection or continuing perfection or failure of priority of any security for
the Obligations; (iii) the cessation for any cause whatsoever of the liability
of either Borrower (other than by reason of the full payment and performance of
all Obligations); (iv) any failure of Lender to marshal assets in favour of any
Borrower; (v) any failure of Lender to give notice to either Borrower of sale or
other disposition of Collateral of another Borrower or any defect in any notice
that may be given in connection with any such sale or disposition of Collateral
of either Borrower securing the Obligations; (vi) any failure of Lender to
comply with applicable law in connection with the sale or other disposition of
any Collateral or other security of either Borrower, for any Obligation,
including any failure of Lender to conduct a commercially reasonable sale or
other disposition of any Collateral or other security of either Borrower for any
Obligation; (vii) any act or omission of Lender or others that directly or
indirectly results in or aids the discharge or release of either Borrower or any
security or guaranty therefor by operation of law or otherwise; (viii) any law
which provides that the obligation of a surety or guarantor must neither be
larger in amount nor in other respects more burdensome than that of the
principal or which reduces a surety's or guarantor's obligation in proportion to
the principal obligation; (ix) any failure of Lender to file or enforce a claim
in any bankruptcy or other proceeding with respect to either Borrower; (x) the
avoidance of any lien or security interest in assets of either Borrower in
favour of Lender for any reason; or (xi) any action taken by Lender that is
authorized by this section or any other provision of any Financing Agreement.
Until such time, if any, as all of the Obligations have been indefeasibly paid
and performed in full and no portion of any commitment of Lender to Borrowers
under any Financing Agreement remains in effect, each Borrower's indebtedness,
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<PAGE>
claims and rights of subrogation, contribution, reimbursement, or indemnity
against the other Borrower shall be fully and completely subordinated to the
indefeasible repayment in full of the Obligations, and each Borrower expressly
waives until such indefeasible payment any right to enforce any remedy that it
now has or hereafter may have against any other Person and waives the benefit
of, or any right to participate in, any Collateral now or hereafter held by
Lender.
(f) To the fullest extent permitted by applicable law, each Borrower
expressly waives and agrees not to assert, any and all defenses in its favour
based upon an election of remedies by Lender which destroys, diminishes, or
affects such Borrower's subrogation rights against the other Borrower, or
against any Obligor, and/or (except as explicitly provided for herein) any
rights to proceed against the other Borrower, or any other party liable to
Lender, for reimbursement, contribution, indemnity, or otherwise.
(g) Each Borrower warrants and agrees that each of the waivers and
consents set forth herein are made after consultation with legal counsel and
with full knowledge of their significance and consequences, with the
understanding that events giving rise to any defense or right waived may
diminish, destroy, or otherwise adversely affect rights which Borrowers
otherwise may have against each other, Lender, or others, or against Collateral,
and that, under the circumstances, the waivers and consents herein given are
reasonable and not contrary to public policy or law. If any of the waivers or
consents herein are determined to be contrary to any applicable law or public
policy, such waivers and consents shall be effective to the maximum extent
permitted by law.
12.7 Entire Agreement. This Agreement, the other Financing Agreements, any
supplements hereto or thereto, and any instruments or documents delivered or to
be delivered in connection herewith or therewith represents the entire agreement
and understanding concerning the subject matter hereof and thereof between the
parties hereto, and supersede all other prior agreements, understandings,
negotiations and discussions, representations, warranties, commitments,
proposals, offers and contracts concerning the subject matter hereof, whether
oral or written.
12.8 Headings. The division of this Agreement into Sections and the
insertion of headings and a table of contents are for convenience of reference
only and shall not affect the construction or interpretation of this Agreement.
12.9 Judgment Currency. To the extent permitted by applicable law, the
obligations of each Borrower in respect of any amount due under this Agreement
shall, notwithstanding any payment in any other currency (the "Other Currency")
(whether pursuant to a judgment or
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otherwise), be discharged only to the extent of the amount in the currency in
which it is due (the "Agreed Currency") that Lender may, in accordance with
normal banking procedures, purchase with the sum paid in the Other Currency
(after any premium and costs of exchange) on the Business Day immediately after
the day on which Lender receives the payment. If the amount in the Agreed
Currency that may be so purchased for any reason falls short of the amount
originally due, each Borrower shall pay all additional amounts, in the Agreed
Currency, as may be necessary to compensate for the shortfall. Any obligation of
Borrowers not discharged by that payment shall, to the extent permitted by
applicable law, be due as a separate and independent obligation and, until
discharged as provided in this Section, continue in full force and effect.
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IN WITNESS WHEREOF, Lender and Borrower have caused these presents to be
duly executed as of the day and year first above written.
================================================================================
LENDER BORROWERS
- ------ ---------
CONGRESS FINANCIAL STATIA TERMINALS CANADA,
CORPORATION (CANADA) INCORPORATED
By: /s/ Daniel E. Wolf By: /s/ David B. Pittaway
---------------------------- ----------------------------
Title: Senior Vice President Title: President
-------------------------- --------------------------
Address: Principal Executive Office:
- -------- ---------------------------
141 Adelaide Street West, Suite 1508 3817 Port Malcolm Road
Toronto, Ontario M5H 3L9 Port Hawkesbury
CANADA Nova Scotia B0E 2T0
CANADA
Address for Congress US: POINT TUPPER MARINE SERVICES
- ------------------------ LIMITED
Congress Financial Corporation
1133 Avenue of the Americas By: /s/ James F. Brenner
New York, New York 10036 ----------------------------
Title: Vice President
--------------------------
Principal Executive Office:
---------------------------
3817 Port Malcolm Road
Port Hawkesbury
Nova Scotia B0E 2T0
CANADA
================================================================================
================================================================================
58
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STATE OF TEXAS ) BROWNSVILLE NAVIGATION DISTRICT
CONTRACT NO. 2790
COUNTY OF CAMERON )
THIS CONTRACT between the BROWNSVILLE NAVIGATION DISTRICT OF CAMERON
COUNTY, TEXAS, a navigation district organized, created and existing under and
by virtue of the laws of the State of Texas, with its domicile in Brownsville,
Cameron County, Texas, hereinafter styled District, and STATIA TERMINALS
SOUTHWEST, INC. hereinafter styled Lessee;
W I T N E S S E T H:
The said BROWNSVILLE NAVIGATION DISTRICT OF CAMERON COUNTY, TEXAS, does by
these presents lease and demise unto the said STATIA TERMINALS SOUTHWEST, INC.
the property described on Exhibit A, attached hereto and made a part hereof for
all purposes, for a term of five (5) years, commencing the 1st day of April,
1993, for and upon the following terms and conditions:
I
As a consideration for this lease and as rental for said leased premises,
the Lessee agrees to pay a rental of TWO HUNDRED FORTY THREE THOUSAND SIX
HUNDRED NINETY AND 00/100 ($243,690.00) DOLLARS, payable in advance in monthly
installments of $20,307.50. The first installment of TWENTY THOUSAND THREE
HUNDRED SEVEN AND 50/100 (20,307.50) shall be due on April 1, 1993 and a similar
installment shall be due on the first day of each month thereafter.
All rentals shall be paid not later than Ten (10) days from the date when
due; they shall thereafter bear interest at the rate of fifteen percent (15%)
per annum from the date due until paid. In the event such fifteen percent (15%)
rate at any time shall be illegal or usurious under applicable law, it shall be
automatically reduced to the highest lawful rate.
Page 1
<PAGE>
II
Lessee shall have and is hereby granted the option during the term of this
lease, provided this lease is then in full force and effect, and provided
further that Lessee is not in default under any of the provisions of this lease,
of extending and renewing this lease for one (1) additional five (5) year term,
upon the same terms and conditions and for the same rental, subject to
revaluation as below provided; the exercise of said option to be by written
notice to the District on or before ninety (90) days prior to the expiration of
the then effective term of this lease.
The rental during such option term shall be payable in equal monthly
installments.
III.
At the expiration of the primary term, the land hereby leased, or
District's percentage of value, shall be subject to change or revaluation at the
option of either party hereto, for the purpose of determining the ground rental
payable hereunder in the manner following:
At least ninety (90) days prior to the expiration of the primary term
above described, the party desiring a revaluation shall give notice thereof to
the other party hereto, and the parties shall thereupon make a bona fide effort
to agree upon the then fair market value of the land demised hereby, or a fair
percentage of existing value, exclusive of any of Lessee's improvements thereon.
If the parties are unable to agree upon said value or such percentage, then at
least sixty (60) days prior to the expiration of such period, a board of
appraisers shall be appointed consisting of one (1) member appointed by each of
the parties hereto and a third member appointed by the two (2) first appointed.
The board of appraisers shall thereupon and at least thirty (30) days prior to
the expiration of such period, determine the then fair market value of the land
demised hereby (exclusive of any of Lessee's improvements thereon) or a fair
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<PAGE>
percentage of existing value, and the valuation or percentage thus fixed by said
board shall be conclusive to the parties hereto. The party requesting the
revaluation shall pay the expense thereof.
Anything herein to the contrary notwithstanding, in no event shall the
increase implemented as a result of any revaluation in accordance with the
foregoing be in excess of the net change in the Consumer Price. Index for such
period then ending, and if such revaluation would result in a change in excess
of the change in the Consumer Price Index, the rental shall only be changed by
the percentage by which the Consumer Price Index rose or fell during such
five-year period. The Consumer Price Index as used herein shall mean the average
for "all items" shown in the "U.S. City Average for Urban Wage Earners and
Clerical Workers" as promulgated by the Bureau of Labor Statistics of the United
States Department of Labor.
IV
It is an express condition of this agreement and lease that the property
hereby leased is to be used by the Lessee for a petroleum storage terminal and
bunkering facility, including the blending of crude oil, the operation of an
ammonia plant, petro-chemical products, and all other closely related
activities, and that the right, privilege and lease herein granted may be
terminated, revoked or forfeited without judicial ascertainment by the District
any time Lessee discontinues the use of such premises for the purpose named or
uses such premises for any other purpose, provided that in the case of nonuse
such default of said Lessee shall exist for a period of 90 days at any time
after commencement of the operation of said described business.
V
All construction of improvements and facilities of the Lessee on the
leased tracts of land shall comply with the Southern Building Code and be
subject to the approval of the
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District prior to the beginning of construction, and shall conform with the
requirements of the National Board of Fire Underwriters for such occupancy and
facilities. The Lessee shall construct, maintain and operate such facilities and
conduct its operations on the leased property in such manner as not to conflict
with the regulations of any federal, state or municipal authority having
jurisdiction thereof, nor with the rules and regulations prescribed by said
District in the official Tariff of the Port of Brownsville. Any and all private
fire protection which may be installed by the Lessee shall conform in all
respects to the standards of the private fire protection facilities installed
and maintained by the District. Said approval by the District of construction of
improvements and facilities will not be unreasonably withheld. It shall be
deemed to be unreasonable under the terms of this lease for the District to
withhold such approval if (i) the improvements to be constructed by the Lessee
are appropriate for any of the uses permitted under the terms of Paragraph IV of
this lease, and (ii) such improvements comply with the Southern Building Code,
the requirements of the National Board of Fire Underwriters for such facilities,
and the regulations of any federal, state or municipal authority having
jurisdiction thereof.
VI.
The Lessee shall have, and is hereby given, the right to erect and install
electric lights, power, water, gas lines and waste lines over, under, upon and
across the lands belonging to the District, incidental to the rights and
privileges herein given, and shall have the further right to connect said lines
to the main lines owned and maintained by said District; provided and except,
however, that the rights in this paragraph defined shall be, and the same are,
specifically made subject to the following conditions and restrictions:
Page 4
<PAGE>
1. The location and construction by the Lessee of all or any of said lines
shall be subject to the approval of the District, and after the same are
installed, no change shall be made without the written consent of said District.
2. The District may at any time require a change in location of any wires,
poles, water or gas mains, or pipelines, accessories or other facilities laid on
or across said land or facilities of the District when it is deemed by the
District necessary that the same be changed, by giving the Lessee sixty (60)
days' written notice of such requirements, and such changes so made shall be at
the cost and expense of the Lessee; provided that such right shall not be
exercised arbitrarily by the District, but only when such action is made
necessary for improvements then on said property or the construction thereof
being immediately contemplated, and provided that where any changes are required
to be made under this provision, the District shall furnish the Lessee with a
new location therefor.
3. The Lessee agrees to pay the District for all water used and all
standby charges, at rates customarily charged to other industries on the
District's property.
4. Connection to the District's water main must be of standard
installation, installed to the satisfaction of the District, and with a meter of
adequate size properly operating and equipped with a check valve; said meter to
be furnished by District at the District's standard charge and to be installed
immediately at the point of connection with the District's main.
5. All electrical and power line connections, extensions and installations
are to be made in accordance with the rules and regulations of the National
Electrical Code.
6. Lessee agrees to pay to District as an When they accrue, wharfage,
port, harbor and other charges for the use of its facilities at the rates
published in the District's then effective official Port Tariff containing
authorized rates, rules and regulations governing the Brownsville Ship Channel
and its
Page 5
<PAGE>
publicly owned wharves, piers and docks, as well as all other lawful charges
incurred to District by reason of Lessee's operations on the demised premises.
7. In the event that Lessee stores more than 5,000 gallons of petroleum
hydrocarbon Lessee agrees to install groundwater monitoring wells prior to
receiving such liquid hydrocarbon products.
A minimum of four (4) monitoring wells shall be installed on the perimeter
of the facility and shall be placed at an approximate equal distance from each
other. Wells shall be constructed to comply with current USEPA standards for
monitoring wells.
The wells shall be fully developed upon installation. The groundwater
shall be monitored when they are developed and once a year thereafter.
Parameters analyzed shall include TPH (Total Petroleum Hydrocarbons) for all
facilities, and BTEX (Benzene, Toluene, Ethylbenzene, and Xylene) for all
facilities handling crude oil and light distillates. Facilities handling
Hazardous Materials, as defined by USDOT regulations in 49 CFR 100-199 (subpart
C) shall also install groundwater monitoring wells as described above, and shall
monitor for all chemicals stored in tanks with a capacity in excess of 500
gallons.
VII.
If any of the rent or other sums of money to be paid by Lessee shall not
be paid as and when the same become due and payable, or if Lessee shall default
in the performance of any of the other agreements, covenants or terms herein
contained, or if Lessee shall abandon the premises as described in Paragraph Iv,
or if a petition or answer for reorganization of Lessee or the then owner of
Lessee's interest hereunder shall be filed, or if Lessee or the then owner of
Lessee's interest hereunder shall make a general assignment for the benefit of
creditors, or shall take any benefit under any insolvency or bankruptcy act, or
have a receiver or trustee or other fiduciary appointed for its
Page 6
<PAGE>
property, or if Lessee's leasehold interest shall be taken on execution or other
process of law, or if this lease or the estate of Lessee hereunder shall be
transferred or passed to or devolve upon any other person, firm, association or
corporation, except in the manner provided hereunder, then, and in any of said
events, District shall have the right to terminate and end this lease and the
term hereby granted, as well as the right, title and interest of Lessee
hereunder; provided, however, that the District shall first give Lessee thirty
(30) days' notice in writing of such default, specifying in particularity the
nature of the default, and shall give Lessee the opportunity to cure the same
within such thirty-day period. If Lessee should fail to cure such default within
such thirty-day period, District may terminate this lease; and it is agreed
that, upon the expiration of the term fixed in such notice, if the nonpayment,
default or other cause of termination specified in such notice shall not have
been made good or removed, this lease and the term hereby granted and created,
as well as all of the right, title and interest of Lessee hereunder, shall, at
the option of the District, wholly cease and expire in the same manner and with
the same force and effect as if the expiration of time in such notice were the
end of the term herein originally demised; and the District may immediately, or
at any time thereafter, and without further notice or demand, enter into and
upon said premises, or any part thereof, in the name of the whole, and repossess
the same as of its first and former estate and expel the Lessee and those
claiming under it, and remove its effects (forcibly, if necessary) without being
taken or deemed guilty of any manner of trespass, and without prejudice to any
remedies which might otherwise be used for arrears of rent or preceding breach
of covenants, and that, notwithstanding the termination of this lease and
possession regained by District, it will indemnify District against all loss of
rent which may accrue to it by
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<PAGE>
reason of such termination during the remainder of the term aforesaid. This
section supercedes anything to the contrary contained in Section 93.002 of the
Texas Property Code.
In the event District does not exercise the right hereinabove given it, it
may accept rent from the receiver, trustee or other officer in possession
thereof for the term of such occupancy without impairing or affecting in any way
the right of District against Lessee hereunder. Any neglect or failure to
enforce the right of forfeiture of this lease or re-entry upon breach of any of
the conditions, covenants, terms and/or agreements herein contained, shall not
be deemed a waiver of such right upon any subsequent breach of any such or any
other condition, covenant, term and/or agreement herein contained.
It is understood and agreed that no part of the time of the discontinuance
or cessation in operations referred to in said Paragraph IV of this agreement
which is caused by the interference of military authorities, strikes, floods,
fires, navigation hazards, embargoes or limitations on productions instituted by
state, national or local authorities, or any other act not within the control of
either party hereto, shall be counted in said ninety-day period mentioned in
said Paragraph IV.
VIII.
The Lessee shall comply with all the conditions and covenants of this
lease and, in the event of the breach of such conditions or covenants and after
the revocation or forfeiture of this lease by the District, as in Paragraph VII
provided, all improvements owned by Lessee and placed upon the leased premises
shall be considered as part of the real estate and shall become the property of
the District. But in the event Lessee complies with all the conditions and
covenants of this lease, upon the expiration of this lease, Lessee shall have
the right for a period of ninety (90) days from the date of said expiration, and
not thereafter, to remove all of its improvements of every kind and character,
except all water mains, gas mains, railroad
Page 8
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tracks, power lines, wharves or bulkheads, which are hereby agreed shall become
the property of the District upon said expiration, cancellation or forfeiture,
from the leased premises; provided, however, that the leased premises shall be
restored to their present condition after the removal of said improvements, all
excavations filled, and all refuse of every kind and character removed from said
premises. Until such removal and restoration is completed, Lessee is to pay on a
monthly basis for each month, or a part of a month, a sum equal to one (1)
month's rental at the rate in effect at the time of termination of the lease.
IX.
In the construction of its improvements on the leased premises and in its
operation and maintenance of said improvements and its conduct of its business
thereon, Lessee agrees and hereby obligates itself to conform to and be bound by
the following:
1. No building or other similar improvements shall be constructed within
twenty (20) feet from all road right-of-way lines, nor within ten (10) feet from
all other property lines.
All septic systems installed on said leased premises shall be subject to
the approval of the District's Engineer and the County Health Officer of Cameron
County, Texas.
2. In no event shall any noxious, polluted, odorous or otherwise harmful
substance be discharged into District's Ship Channel.
3. Lessee is to secure any necessary permits from federal, state or local
agencies that may be required in connection with its construction or its
operation.
4. Lessee shall comply with all rules, regulations, and ordinances of the
Port of Brownsville as set out in the Port of Brownsville Tariff as the same may
be amended from time to time.
Page 9
<PAGE>
5. Lessee agrees to maintain. and return the leased premises in a clean
and well maintained condition as defined in District Tariff 5, Item 175. All
fences will be kept in good repair1 grass mowed, and all scrap metal, trash or
other litter removed.
6. Lessee agrees to return the leased premises in the same condition as
Lessee received it, ordinary wear and tear excepted.
X
Lessee may not assign this lease or sublet any of the leasable space
without the written consent of District, which consent will not be unreasonably
withheld. Further, Lessee may not assign this lease or sublet the leased
premises for any use other than as stated in Paragraph IV of this lease.
XI
The Lessee agrees to pay all taxes and assessments legally levied and
assessed against its leasehold interest and improvements on said property during
the term of this lease and any extension thereof before such taxes and
assessments become delinquent; unless Lessee, by legal proceedings, contests the
legality of same, in which event such taxes and assessments shall be promptly
paid upon the judicial determination thereof.
XII.
The Lessee further covenants and agrees to keep sidewalks1 roads and
passageways, if any, on, over or across said leased premises in good repair, and
to indemnify and further hold harmless District against any and all claims,
damages, liabilities, costs (including reasonable engineering and/or attorneys
fees) arising out of, in connection with, or incident to any act or omission or
condition (including the negligence of the District or its agents or employees)
in connection with the ownership, operation, maintenance or repairs of the
premises covered by the Lease including any additions to or extensions of the
same.
Page 10
<PAGE>
Lessee shall keep in full force and effect Bodily Injury Liability and
Property Damage Liability Insurance covering its operations to be carried out
upon or in connection with this lease. The policy or policies shall name
District as additional insured and contain a clause that the insurance will not
be canceled or changed without giving the District thirty (30) days' prior
written notice. Certificates of insurance shall be furnished to the District.
The limits of liability and other insurance particulars required will be
available at the District's administrative office.
XIII.
The District reserves the right to have rights-of-way and easements on,
over and across said tract of land for underground water lines, pipelines, power
lines, telephone and telegraph lines, necessary or proper for the purposes of
developing and serving lands adjacent to the tract herein described and leased
by the Lessee; said rights-of-way and easements, however, to be so located and
said water lines, pipelines, power line5, telephone and telegraph lines so
constructed and maintained as not to impair or interfere with any of the
existing or anticipated improvements on said tract leased by the Lessee, or with
the maintenance or operation thereof.
XIV.
In addition to the District's statutory lien, District shall have at all
times a valid security interest to secure payment of all rentals and other sums
of money becoming due hereunder from Lessee, and to secure payment of any
damages or loss which District may suffer by reason of the breach by Lessee of
any covenant, agreement or condition contained herein, upon all goods, wares,
equipment, fixtures, furniture, improvements and other personal property of
Lessee currently or which may hereafter be situated on the premises, and all
proceeds therefrom, and such property shall not be removed therefrom without the
consent of District until all arrearages in rent, as
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well as any and all other sums of money then due to District hereunder, shall
first have been paid and discharged and all the covenants, agreements and
conditions hereof have been fully complied with and performed by Lessee. Upon
the occurrence of an event of default by Lessee, District may, in addition to
any other remedies provided herein, after giving thirty (30) days' notice of the
intent to take possession and giving an opportunity for a hearing thereon, enter
upon the premises and take possession of any and all goods, wares, equipment,
fixtures, furniture, improvements and other personal property of Lessee situated
on the premises, without liability for trespass or conversion, and sell the same
at public or private sale, with or without having such property at the sale,
after giving Lessee reasonable notice of the time and place of any public sale
or of the time after which any private sale is to be made, at which sale the
District or its assigns may purchase unless otherwise prohibited by law.
Unless otherwise provided by law, and without intending to exclude any
other manner of giving Lessee reasonable notice, the requirement of reasonable
notice shall be met if such notice is. given at least ten (10) days before the
actual time of sale. The proceeds from any such disposition, less any and all
expenses connected with the taking possession, holding and selling of the
property (including reasonable attorneys' fees and other expenses), shall be
applied as a credit against the indebtedness secured by the security interest
granted in this section. All surplus shall be paid to Lessee or as otherwise
required by law; and the Lessee shall pay any deficiencies forthwith. Upon
request by District, Lessee agrees to execute and deliver to District a
financing statement in form sufficient to perfect the security interest of
District in the aforementioned property and proceeds thereof under the
provisions of the Uniform Commercial Code in force in the State of Texas. The
statutory lien for rent is not hereby waived, the security interest herein
granted being
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<PAGE>
in addition and supplementary thereto. Anything to the contrary notwithstanding,
said security interest shall be subject and subordinate to a security interest
granted by the Lessee to a third party in and to any property owned by Lessee
and located upon the leased premises ("Lessee's Property"), to the extent such
security interest was granted for the purpose of securing payment (i) to the
seller for the purchase price, or (ii) to a lender advancing funds for such
purchase price or any portion of such purchase price or for the constructi6n of
improvements upon the leased premises by Lessee and District agrees to execute
subordination agreements subordinating its security interest granted by Lessee
for such purposes.
XV.
All notices required hereunder shall be deemed to have been served if
hand delivered or sent by registered or certified mail, to District at the
address below or to Lessee at the leased premises or at the address below:
TO DISTRICT: TO LESSEE:
- --------------- ----------
BROWNSVILLE NAVIGATION DISTRICT STATIA TERMINALS SOUTHWEST, Inc.
OF CAMERON COUNTY, TEXAS TWO DATRAN CENTER
POST OFFICE BOX 3070 9130 5. DADELAND BLVD.,
BROWNSVILLE, TEXAS 78520-3070 SUITE 1508
MIAMI, FL 33156
XVI.
District does expressly represent and warrant that it is the sole owner of
the premises, that it has the full right, power and authority to make this
lease, and that no other person needs to join in the execution thereof in order
for the lease to be binding upon all parties having an interest in the leased
premises.
XVII.
District reserves the right, on 90 days notice, to move Lessee at
District's expense to another location on District's lands fully suitable for
Lessee's purposes.
Page 13
<PAGE>
XVIII.
Neither Lessee nor anyone claiming by, through or under Lessee shall have
the right to file or place any mechanic's lien of any kind or character
whatsoever on the premises, or on any of the buildings or improvements thereon,
and notice is hereby given that no contractor, subcontractor, or anyone else who
may furnish any material, service or labor for any buildings or improvements,
alterations or repairs at any time shall be or become entitled to any lien
thereon whatsoever. For the further security of District, Lessee shall give
actual notice of this restriction in advance to any and all contractors,
subcontractors or other persons, firms or corporations that may furnish any such
material, service or labor.
XIX.
In the event Lessee or District breaches any of the terms of this
agreement, whereupon the District employs attorneys to protect or enforce its
right hereunder, or in the event Lessee ui District files a petition in
bankruptcy and Lessee or District employs attorneys to protect its rights, then
the party which breaches or files a petition in bankruptcy agrees to pay the
other party reasonable attorneys' fees.
XX.
Lessee agrees to comply with all provisions of the official Tariff of the
Port of Brownsville as it now exists or hereafter may be amended. In the event
of a conflict between the provisions of this lease and the provisions of such
Tariff, the provisions of the Tariff shall control.
XXI.
As used in this article, the term "Hazardous Materials" means any
hazardous or toxic substances, materials or wastes, including, but not limited
to, those substances, materials or wastes listed in the United States Department
of Transportation Hazardous Materials Table (49 C.F.R. 172.101) or by the
Environmental Protection Agency as hazardous substances (40
Page 14
<PAGE>
C.F.R. Part 302) and amendments thereto, or substances, materials and wastes
which are or become regulated under any applicable local, state or federal law,
rule, or regulation, including, without limitation, any material, waste or
substance which is: (i) petroleum; (ii) asbestos; (iii) polychlorinated
biphenyls; (iv) designated as a "hazardous substance" pursuant to Section 311 of
the Clean Water Act, 33 U.S.C. 251, et seq. (33 U.S.C. 1321) or listed pursuant
to Section 307 of the Clean Water Act (33 U.S.C. 1317); (v) defined as a
"hazardous waste" pursuant to Section 1004 of the Resource Conservation and
Recovery Act, 12 U.S.C. Section 6901, et seq., (42 U.S.C. 6903); or (vi) defined
as a "Hazardous Substance" pursuant to Section 101 of the Comprehensive
Environmental Response, Compensation, and Liability Act, 42 U.S.C. 9601, et seq.
(42 U.S.C. 9601).
Lessee covenants and agrees from the date hereof and as long as the
provisions of this lease shall remain in effect to remove from the Premises, if
and as required by law, any Hazardous Materials placed in or on the Premises by
Lessee, its agents, its employees or its independent contractors, and to comply
in all respects with all federal, state and local governmental laws aid
regulations governing such removal. Lessee promises to give notice to District
of any claim, action, administrative proceeding (including, without limitation,
informal proceedings), or other demand by any governmental agency or other third
party involving the existence of Hazardous Materials on the Premise and copies
of any notice of any releases of Hazardous Materials given by Lessee pursuant to
any law, rule or regulation, and any report of and response to any such
incident.
Lessee agrees to indemnify, pay and protect, defend and save District
harmless from and against any and all claims (including without limitation,
third party claims for personal injury or real or personal property damage),
actions, administrative proceedings (including informal proceedings), judgments,
damages, punitive damages, penalties, fines, costs, liabilities (including
Page 15
<PAGE>
sums paid in settlement of claims), interest, or losses including reasonable
attorneys' and paralegals' fees and expenses, consultant fees, and expert fees,
together with all other costs and expenses of any kind or nature (collectively,
the "Costs") that arise directly or indirectly from or in connection with the
release or suspected release by Lessee or its agents, its employees or its
independent contractors of any Hazardous Materials in or into the air, soil,
ground water, or surface water at, on, about, under, or within the Premises, or
any portion thereof, or elsewhere in connection with Lessee's operations on or
in connection with the Premises. The indemnification provided in this lease
shall specifically apply to and include claims or actions brought by or on
behalf of employees of Lessee. In the event District shall suffer or incur any
such costs, Lessee shall pay to District the total of all such costs suffered or
incurred by District upon demand therefor by District. Without limiting the
generality of the foregoinq, the indemnification provided in this lease shall
specifically cover costs, including capital, operating and maintenance costs,
incurred in connection with any investigation or monitoring 01: site conditions,
any cleanup, containment, remedial, removal, or restoration work require or
performed by any federal, state or local government agency or political
subdivision or performed by any nongovernmental entity or person because of the
presence, suspected presence, release, or suspected release of any Hazardous
Material in or into the air, soil, ground water, or surface water at, on, about,
under, or within the Premises or any portion thereof, or. elsewhere in
connection with Lessee's operations on or in connection with the Premises and
any claims of third parties for loss or damage due to such hazardous materials.
In the event Lessee is required to conduct or perform any investigation or
monitoring of site conditions for any cleanup, containment, restoration, removal
or other remedial work
Page 16
<PAGE>
(collectively the "Remedial Work") under any applicable federal, state or local
law or regulation, by any judicial order or by any governmental entity, or in
order to comply with any agreements affecting the Premises because of or in
connection with any occurrence or event described in this lease, Lessee shall
perform or cause to be performed the Remedial Work in compliance with such law,
regulation, order or agreement; provided that Lessee may withhold such
compliance pursuant to a good faith dispute regarding the application,
interpretation, or validity of the law, regulation, order or agreement, subject
to the requirement of the following paragraph. All remedial work shall be
performed by one or more contractors selected by Lessee and approved in advance
in writing by District, and under the supervision of consulting engineer
selected by Lessee and approved in advance iii writing by District. All costs
and expenses of such Remedial Work shall be paid by Lessee, including, without
limitation, the charges of such contractors and/or the consulting engineer,
District's reasonable attorneys and paralegals' fees and costs incurred in
connection with monitoring or review of such Remedial Work. If Lessee shall fail
to timely commence or cause to be commenced, or fail to diligently prosecute to
completion such Remedial Work, District may, but shall not be required to, cause
such Remedial Work to be performed, and all costs and expenses thereof or
incurred in connection therewith shall be Costs within the meaning of this
lease. All such Costs shall be due and payable upon demand therefor by District.
Lessee shall be permitted to contest or cause to be contested, subject to
compliance with the requirements of this paragraph, by appropriate action any
Remedial Work requirement, and District shall not perform such requirement on
its behalf, so long as Lessee has given District written notice that Lessee is
contesting or shall contest or cause to be contested the application,
interpretation, or validity of the governmental regulation, order or agreement
pertaining to the Remedial Work by
Page 17
<PAGE>
appropriate proceedings conducted in good faith with due diligence; provided
that such contests shall not subject District or any assignees of District's
interest in the Premises to civil liability and does not jeopardize any such
parties' interest in the Premises. Lessee shall give such security or assurances
as may be reasonably required by District to insure compliance with the legal
requirements pertaining to the Remedial Work (arid payment of all Costs in
connection therewith) and to prevent any sale, forfeiture, or loss by reason of
such nonpayment or noncompliance.
This article shall be binding upon, inure to the benefit of, and be
enforceable by District and Lessee, and their respective heirs, legal
representatives, successors and assigns, including, without limitation, any
assignee or purchaser of all or any portion of the District's interest in the
Premises. If any term of this article or any application thereof shall be
invalid illegal, or unenforceable, the remainder of this article and any other
application of such term shall not be affected thereby. No delay or omission in
exercising any right hereunder shall operate as a waiver of such right or any
other right. The provisions of this article shall survive the termination or
expiration of this lease.
XXII.
This lease is in lieu of BND Lease Contracts No. 2479, 2539, 2582, 2583,
2600, 2631, 2635, 2711 and 2739 and the parties agree that upon the execution of
this contract all of such Lease Contracts are terminated.
XXIII.
This instrument contains the entire Agreement between the parties hereto,
and neither party shall be bound by any representation or agreement, oral or
written, made by either party or any of their agents, representatives or
employees, not set forth herein.
Page 18
<PAGE>
IN TESTIMONY WHEREOF said BROWNSVILLE NAVIGATION DISTRICT OF CAMERON
COUNTY, TEXAS, and said STATIA TERMINALS SOUTHWEST, INC., have each caused these
presents to be executed by its proper officers thereunto duly authorized on this
17th day of May 1993.
BROWNSVILLE NAVIGATION DISTRICT
OF CAMERON COUNTY, TEXAS
/s/ Joe Saenz
-------------------------------
JOE SAENZ, Chairman of
the Board of Navigation and
Canal Commissioners of the
Brownsville Navigation District
of Cameron County, Texas
Attest:
By: /s/ John B. Allison
--------------------
Secretary
STATIA TERMINALS SOUTHWEST, INC.
By: /s/ James G. Cameron
--------------------
Attest:
By:____________________________
Secretary
STATE OF TEXAS )
COUNTY OF CAMERON )
This instrument was acknowledged before me on the 19th day of May 1993, by
JOE SAENZ, in his capacity as Chairman of the Board of Navigation and Canal
Commissioners of the Brownsville Navigation District of Cameron County, Texas.
/s/ BEATRICE G. ROSENBAUM
-------------------------------------------
Notary Public in and for the State of Texas
My Commission Expires: ______________________
- -----------------------------------------
[Seal] BEATRICE G. ROSENBAUM
Notary Public, State of Texas
My Commission Expires 2-17-97
- -----------------------------------------
Page 19
<PAGE>
STATE OF FLORIDA )
COUNTY OF DADE )
This instrument was acknowledged before me on the 17TH day of May, 1993,
by James G. Cameron, President of STATIA TERMINALS SOUTHWEST, INC., a
corporation, on behalf of said corporation.
/s/ Virginia H. Hall
---------------------------------------------
Notary Public in and for the State of Florida
My Commission Expires: 11/23/94
Page 20
<PAGE>
EXHIBIT "A"
STATIA TERMINALS SOUTHWEST, INC.
METES AND BOUNDS DESCRIPTION
TRACT I - 21.31 ACRES
March 5, 1993
BEING a 21.31 Acre Tract of land out of and forming a part of Partition Share 32
of the Espiritu Santo Grant, Cameron County, Texas and said 21.31 Acre Tract
being more particularly described as follows;
COMMENCING at a concrete monument found at the intersection of Corps of
Engineers (U.S.E.D.) Station 85+500 and the North 4+50 Reference Line (South
Texas Coordinate System X = 2,366,382.816 and Y = 107,412.416); thence North 02
degrees 24 minutes 01 seconds East a distance of 945.51 feet to a 1/2" iron pin
set at the intersection of the North Right-of-Way line of State Highway No.48
with the West Right-of-Way line of an undedicated road for the Southeast corner
and PLACE OF BEGINNING of this tract;
THENCE along the North Right-of-Way line of State Highway No.48, South 69
degrees 14 minutes 00 seconds West a distance of 1450.03 feet to a 3/4" inch
iron pipe for the Southwest corner of this tract, said Right-of-Way line being
approximately 10.00 feet South of an existing chain link fence;
THENCE along a line West of and varying in distance (1.50 feet at the South end,
3.0 feet at the North end) from an existing chain link fence, North 21 degrees
17 minutes 00 seconds West a distance of 600.02 feet to a point for the
Northwest corner of this tract;
THENCE along the North 19+20 Reference Line North 69 degrees 14 minutes 00
seconds East, a distance of 1643.95 feet to a point for the Northeast corner of
this tract;
THENCE along the West Right-of-Way line of an undedicated road South 03 degrees
19 minutes 30 seconds East a distance of 628.92 feet to a point and the PLACE OF
BEGINNING of this tract; said tract containing 21.31 Acres, more or less.
<PAGE>
STATIA TERMINALS SOUTHWEST, INC.
METES AND BOUNDS DESCRIPTION
TRACT II - 46.367 ACRES
March 5, 1993
BEING a 46.367 Acre Tract of land out of and forming a part of Partition Share
32 of the Espiritu Santo Grant, Cameron County, Texas and said 46.367 Acre Tract
being more particularly described as follows:
COMMENCING at a Concrete Monument found at the intersection of Corps of
Engineers (U.S.E.D.) Station 83+500 and the North 4+50 Reference Line (South
Texas Coordinate System X = 2,366,382.816 and Y = 107,412.416) thence North 02
degrees 24 minutes 0l seconds East a distance of 945.51 feet to a point on the
North Right-of-Way line of State Highway No. 48 and thence North 03 degrees 19
minutes 30 seconds West a distance of 628.92 feet along the West Right-of-Way
line of an undedicated 50.0 ft. road for the Southeast corner and PLACE OF
BEGINNING of this tract:
THENCE along the North 19+20 Reference Line South 69 degrees 14 minutes 00
seconds West a distance of 1643.95 feet to a point for the Southwest corner;
THENCE North 21 degrees 17 minutes 00 seconds West a distance of 351.71 feet to
a point for a corner;
THENCE South 69 degrees 26 minutes 40 seconds West a distance of 279.97 feet to
a point for a corner:
THENCE North 70 degrees 48 minutes 56 seconds West a distance of 431.96 feet to
a point for a corner;
Thence North 41 degrees 25 minutes 09 seconds West a distance of 690.54 feet to
a point for a corner;
THENCE North 00 degrees 28 minutes 40 seconds East a distance of 184.66 feet to
a point for the Northwest corner;
THENCE South 89 degrees 43 minutes 15 seconds East a distance of 2762.50 feet to
a point on the West Right-of-Way Line of an undedicated 50.0 ft. road for the
Northeast corner;
<PAGE>
STATIA TERMINALS SOUTHWEST, INC.
PAGE 2
THENCE along the West Right-of-Way of an undedicated 50.0 ft. road, South 03
degrees 19 minutes 30 seconds East a distance of 478.31 feet to a point for a
corner and the PLACE OF BEGINNING of this tract; said tract containing 46.367
Acres more or less.
<PAGE>
STATIA TERMINALS SOUTHWEST, INC.
METES AND BOUNDS DESCRIPTION
8.817 ACRE TRACT I
March 2, 1993
BEING 8.817 Acre Tract of land, out of Share 32, Espiritu Santo Grant and Share
7, San Martin Grant, Cameron County, Texas, and said 8.817 Acre Tract being more
particularly described as follows:
COMMENCING from a concrete monument found at Corps of Engineers (U.S.E.D.)
station 81+500 and the North Station 4+50 from the centerline of the Ship
Channel Reference Line (South Texas Coordinate System X = 2,368,252.880 and Y =
108,121.542); thence North 6 deg. 22 min. 20 sec. West, a distance of 896.32
feet to a 1/2" iron rod on the North Right-of-Way line of State Highway No. 48
and North 3 deg. 14 min. 55 sec. West, a distance of 512.82 feet to a 1/2" iron
rod to the Northwest corner of a certain tract of 3.26 Acres, a total distance
of 629.18 feet to a point on the valueline, for the Southwest corner and PLACE
OF BEGINNING of this Tract I;
THENCE, North 3 deg. 14 min. 55 sec. West, a distance of 182.49 feet to a 1/2"
iron rod on the Southeast corner of a certain 20.67 Acre Tract, a total distance
of 736.21 feet to a 1/2" iron rod on the East line of said certain tract of
20.67 Acres, for the Northwest corner of this Tract I;
THENCE, leaving the East line of a certain 20.67 Acre Tract, North 85 deg. 51
min. 45 sec. East, a total distance of 580.43 feet to a 1/2" iron rod on the
west of a proposed 60.0 foot Right-of-Way line for the Northeast corner of this
Tract I;
THENCE along the West of a proposed 60.0 foot Right-of-Way line, South 05 deg.
57 min. 46 sec. East, a total distance of 554.38 feet to a point on the
valueline, for the Southeast corner of this Tract I;
THENCE along the valueline, South 69 deg. 14 min. 00 sec. West, a total distance
of 636.11 feet to the PLACE OF BEGINNING, containing 8.817 Acres of land, more
or less.
<PAGE>
STATIA TERMINAL SOUTHWEST, INC.
METES AND BOUNDS DESCRIPTION
2.773 ACRES TRACT II
March 3, 1993
BEING 2.773 Acre Tract of land, out of Share 32 Espiritu Santo Grant and Share
7, San Martin Grant, Cameron County, Texas, and said 2.773 Acre Tract being more
particularly described as follows:
COMMENCING from a concrete monument found at Corps of Engineers (U.S.E.D.)
station 81+500 and the North Station 4+50 from the centerline of the Ship
Channel Reference Line (South Texas Coordinate System X = 2,368.252.880 and Y =
108,121,542); thence North 6 deg. 22 min. 20 sec. West, a distance of 896.32
feet to a 1/2" iron rod on the North Right-of-Way line of State Highway No. 48
for the Southwest corner of a certain 3.26 Acres, thence North 3 deg. 14 min. 55
sec. West, a distance of 512.82 feet to a 1/2" iron rod, for the Southwest
corner and PLACE OF BEGINNING of this Tract II;
THENCE, North 3 deg. 14 min. 55 sec. West, a total distance of 116.36 feet to a
point on the valueline, for the Northwest corner of this Tract II;
THENCE, along said valueline, North 69 deg. 14 min. 00 sec. East, a total
distance of 636.11 feet to a point on the West of a proposed Road of 60.0 foot
Right-of-Way line, for the Northeast corner of this Tract II;
THENCE, along said West of a proposed Road of 60.0 foot Right-of-Way line,
South 05 deg. 57 min; 46 sec. East, a total distance of 275.60 feet to a 1/2"
iron rod, for the Southeast corner of this Tract II;
THENCE, South 83 deg. 44 min. 44 sec. West, a distance of 320.52 feet to a point
on the Northeast corner of a certain 3.26 Acres, a total distance of 620.52 feet
to the PLACE OF BEGINNING, containing 2.773 Acres of land, more or less.
<PAGE>
STATIA TERMINALS SOUTHWEST, INC.
METES AND BOUNDS DESCRIPTION
3.26 ACRE TRACT III
March 4, 1993
BEING, 3.26 Acre Tract of land, out of Share 32, Espiritu Santo Grant, Cameron
County, Texas, and said 3.26 Acre Tract being more particularly described as
follows:
COMMENCING from a concrete monument found at Corps of Engineers (U.S.E.D.)
Station 81+500 and the North Station 4+50 from the centerline of the Ship
Channel Reference Line (South Texas Coordinate System X = 2,368,252.880 and Y =
108,121.542); thence North 06 deg. 22 min. 20 sec. West, a distance of 896.32
feet to a 1/2" iron rod on the North Right-of-Way line of State Highway No. 48,
for the Southwest corner and PLACE OF BEGINNING of this Tract III;
THENCE, North 3 deg. 14 min. 55 sec. West, a total distance of 512.82 feet to a
1/2" iron rod on the south line of a certain 2.773 Acre Tract, for the Northwest
corner of this Tract III;
THENCE, along said south line of a certain 2.773 Acre Tract No. II, North 83
deg. 44 min. 44 sec. East, a total distance of 300.00 feet to a point, for the
Northeast corner of this Tract III;
THENCE, South 03 deg. 14 min. 55 sec. East, a total distance of 434.08 feet, to
a point on the North Right-of-Way line of State Highway No. 48, for the
Southeast corner of this Tract III;
THENCE, along said North Right-of-Way line of State Highway No. 48, South 69
deg. 14 min. 00 sec. West, a total distance of 314.13 feet to the PLACE OF
BEGINNING, containing 3.26 Acres of land, more or less.
<PAGE>
STATIA TERMINALS SOUTHWEST, INC.
METES AND BOUNDS DESCRIPTION
6.68 ACRES
March 5, 1993
BEING a 6.68 Acre Tract of land out of and forming a part of Partition Share 7,
San Martin Grant and Share 32, Espiritu Santo Grant, Cameron County, Texas and
said 6.68 Acre Tract being more particularly described as follows:
COMMENCING at a point at the intersection of Corps of Engineers (U.S.E.D.)
Station 81+500 and the North 4+50 Reference Line (South Texas Coordinate System
X = 2,368,252.880 and Y = 108,121.542), thence North 49 degrees 42 minutes 00
seconds East a distance of 176.87 feet, North 20 degrees 46 minutes 00 seconds
West a distance of 660.80 feet along the West Right-of-Way line of Anchor Road
and North 69 degrees 14 minutes 00 seconds East a distance of 100 feet along the
South Right-of-Way line of State Highway No.48 to a point for the Northwest
corner and PLACE OF BEGINNING of this tract;
THENCE continuing along the South Right-of-Way Line of State Highway No. 48
North 69 degrees 14 minutes 00 seconds East at 395.02 feet the common boundary
line of Share 7 San Martin Grant and Share 32, Espiritu Santo Grant, a total
distance of 874.95 feet to a point for the Northeast corner of this tract;
THENCE along a course approximately 30 feet East of the centerline of railroad
spur track No. N29, South 07 degrees 12 minutes 00 seconds East a distance of
100.05 feet, South 06 degrees 09 minutes 00 seconds East a distance of 99.99
feet, South 0l degree 08 minutes 00 seconds East a distance of 100.00 and South
04 degrees 27 minutes 00 seconds West a distance of 70.00 feet to a point on the
North 8+18.20 Reference Line and Southeast corner of this tract;
THENCE continuing along the North 8+18.20 Reference Line, South 69 degrees 14
minutes 0O seconds West at 497.06 feet the common boundary line of Share 7 San
Martin Grant and Share 32, Espiritu Santo Grant, a total distance of 763.11 feet
to a point for the Southwest corner of this tract;
THENCE along the East Right-of-Way line of Anchor Road, North 20 degrees 46
minutes 00 seconds West, a distance of 351.80 feet to a point and PLACE OF
BEGINNING of this tract; said tract containing 6.68 Acres, more or less.
<PAGE>
STATIA TERMINALS SOUTHWEST, INC.
METES AND BOUNDS DESCRIPTION
12.56 ACRES
March 8, 1993
BEING a 12.56 Acre Tract of land out of and forming a part of Share 32, Espiritu
Santo Grant, Cameron County, Texas and being more particularly described as
follows:
COMMENCING at the intersection of Corps of Engineers (U.S.E.D.) Station
83+694.39 and the North 5+40 Reference Line (South Texas Coordinate System X =
2,366,169.144 and Y = 107,427.645) for the Southwest corner and PLACE OF
BEGINNING of this tract;
THENCE along the East boundary line of the Statia Terminals Southwest, Inc. 6.36
Acre lease, North 20 degrees 46 minutes 00 seconds West a distance of 630.00
feet to a point on the South Right-Of-Way Line of State Highway No.
48 for the Northwest corner of this tract;
THENCE along the South Right-of-Way Line of S.H. No. 48 North 69 degrees 14
minutes 00 seconds East a distance of 867.98 ro a point, feet for the Northeast
corner of this tract;
THENCE South 20 degrees 46 minutes 00 seconds East, a distance of 630.00 feet to
a point for the Southeast corner of this tract;
THENCE along the North 5+40 Reference Line being approximately 56.42 feet North
of the North Main railroad track, South 69 degrees 14 minutes 00 seconds West a
distance of 867.98 feet to a point for the Southwest corner and PLACE OF
BEGINNING of this tract; said tract containing 12.56 Acres, more or less.
<PAGE>
STATIA TERMINALS SOUTHWEST, INC.
METES AND BOUNDS DESCRIPTION
6.36 ACRE TRACT
March 15, 1993
BEING 6.36 Acre Tract of land, out of Share 32, Espiritu South Grant, Cameron
County, Texas, and said 6.36 Acre Tract being more particularly described as
follows:
COMMENCING at a point of intersection of Corps of Engineers (U.S.E.D.) Station
83+694.39 and the North Station 5+40 from the centerline of Ship Channel
Reference Line (South Texas Coordinate System X = 2,366,169.144 and Y =
107,427.645), for the Southeast corner and PLACE OF BEGINNING of this tract;
THENCE, along a line to and having a perpendicular of an approximate 50.0 feet
off south from the centerline of the N25A Railroad, South 69 deg. 14 min. 00
sec. West, a total distance of 789.65 feet to a point 9n the East line of a
certain vacant land, for the Southwest corner of this tract;
THENCE, bounded by the East line of a certain vacant land, North 20 min. 46 min.
00 sec. West, a total distance of 275.82 feet to a point on the south line of
the Rio Grande Marine Institute Lease, for a corner of this tract;
THENCE, bounded by the South line of said Rio Grande Marine Institute Lease,
North 69 deg. 14 min. 00 sec. East, a total distance of 622.56 feet to a point
on the East line of said Rio Grande Marine Institute Lease, for a corner of this
tract;
THENCE, bounded by the East line of said Rio Grande Marine Institute Lease,
North 20 deg. 46 min. 00 sec. West a total distance of 354.18 feet, to a point
on the South 150.0 feet Right-of-Way line of the State Highway No. 48, for the
Northwest corner of this tract;
THENCE, along the South 150.0 feet Right-of-Way line of said State Highway No.
48, North 69 deg. 14 min. 0O sec. East, a total distance of 167.09 feet to a
point, for the Northeast corner of this tract;
THENCE, bounded by the West line of a certain 12.56 Acres, Statia Terminals,
South 20 deg. 46 min. 00 sec. East, a total distance of 630.00 feet to the PLACE
OF BEGINNING, containing 6.36 Acres of land, more or less.
<PAGE>
STATIA TERMINALS SOUTHWEST, INC.
METES AND BOUNDS DESCRIPTION
3.65 ACRES
BEING a 3.65 Acre Tract of land out of and forming a part of Share 32, Espiritu
Santo Grant, Cameron County, Texas and said 3.65 Acre Tract being more
particularly described as follows:
COMMENCING at the point of intersection of Corps of Engineers (U.S.E.D.) Station
84+914.74 and the North 5+08.20 Reference Line (South Texas Coordinate System X
= 2,365,039.352 and Y -106,965.219), said point being the Southeast corner and
PLACE OF BEGINNING of this tract;
THENCE along the North 5+08.20 Reference Line, said line having an approximate
perpendicular distance of 24.62 feet from the centerline of the North Main
Railroad track, South 69 degrees 14 minutes 00 seconds West a distance of 615.50
feet to a point for the Southwest corner of this tract;
THENCE North 20 degrees 46 minutes 00 seconds West a distance of 258.50 feet to
a point for the Northwest corner of this tract;
THENCE along a line that is approximately 51.60 feet South of the Itapco Lease
fence line, North 69 degrees 14 minutes 00 seconds East a distance of 615.50
feet to a point for the Northeast corner of this tract;
THENCE South 20 degrees 46 minutes 00 seconds East a distance of 258.50 feet to
a point for the Southeast corner and PLACE OF BEGINNING of this tract; said
tract containing 3.65 Acres, more or less.
<PAGE>
STATIA TERMINALS SOUTHWEST, INC.
METES AND BOUNDS DESCRIPTION
3.219 ACRE TRACT I
March 25, 1993
BEING 3.219 Acre Tract of land, out of Share 31, Espiritu Santo Grant in Cameron
County, Texas and said 3.219 Acre Tract being more particularly described as
follows:
COMMENCING from a concrete monument at Corps of Engineers (U.S.E.D.) station
90+272 and the North Station 25+45.80 from the centerline of the Ship Channel
Reference Line (South Texas Coordinate System X = 2,359,307.629 and Y =
106,970.998), marking the Southeast corner of Lot 2, Block 314 of the "El Jardin
Re-subdivision" as recorded in Volume 4, Page 48 of the Map Records of Cameron
County, Texas, thence North 01 deg. 00 min. 00 sec. East, along the East line of
said Lot 2 and the West line of said Share 31, a distance of 423.38 feet to a
point on the North Right-of-Way line of State Highway No. 48, thence along the
North Right-of-Way line of said State Highway No. 48, North 89 deg. 57 min. 00
sec. East, a distance of 674.97 feet to a point, thence along approximately
following an existing chain link fence North 00 deg. 03 min. O0 sec. West, a
distance of 150.00 feet to a point, thence North 89 deg. 57 min. 00 sec. East, a
distance of 146.00 feet to a point for the Southwest corner of this Tract I;
THENCE, along a line 10.00 feet off, of an existing storage tanks, North 00 deg.
03 min. 00 sec. West, a distance of 450.00 feet to a point on the north of an
imaginary valueline, for the Northwest corner of this Tract I;
THENCE, along of an imaginary valueline and along a line 20.00 feet off, of an
existing storage tank, North 89 deg. 57 min. 00 sec. East, a distance of 140.00
feet, to a point for the Northeast corner of this tract;
THENCE, along a line 10.00 feet off, of an existing storage tank, South 00 deg.
03 min. 00 sec. East, a distance of 230.00 feet to a point for a corner of this
Tract I;
THENCE, along a line 10.00 feet off, of an existing storage tank North 89 deg.
57 min. 00 sec. East, a distance of 351.00 feet to a point for a corner of this
Tract I;
THENCE, along a line l0.00 feet off, of an existing storage tank, South 00 deg.
03 min. 00 sec. East, a distance of 220.00 feet to a
<PAGE>
STATIA SOUTHWEST TERMINALS, INC.
TRACT II
PAGE 2
point for the Southeast corner of this Tract I;
THENCE, along a line 10.00 feet off, of an existing storage tank; South 89 deg.
57 min. 00 sec. West, a total distance of 491.00 feet to the PLACE OF BEGINNING,
containing 3.219 Acres Tract of land, more or less.
<PAGE>
STATIA TERMINALS SOUTHWEST, INC.
METES AND BOUNDS DESCRIPTION
0.45 ACRE TRACT II
March 26, 1993
BEING a 0.45 Acre Tract of land, out of Share 31, Espiritu Santo Grant in
Cameron County, Texas and said 0.45 Acre Tract being more particularly described
as follows:
COMMENCING from a concrete monument at Corps of Engineers (U.S.E.D.) Station
90+272 and the North Station 25+45.86 from the centerline of the Ship Channel
Reference Line (South Texas Coordinate System X = 2,359,307.629 and Y =
106,970.998), marking the Southeast corner of Lot 2, Block 314 of the "El Jardin
Re-subdivision" as recorded in Volume 4, Page 48 of the Map Records of Cameron
county, Texas, thence North 01 deg. 00 min. 00 sec. East, along the East line of
said Lot 2 and the West line of said Share 31, a distance of 423.38 feet to a
point on the North Right-of-Way line of State Highway No. 48, thence along the
North Right-of-Way line of said State Highway No. 48, North 89 deg. 57 min. 00
sec. East, a distance of 674.97 feet, thence along approximately following an
existing chain link fence, North 00 deg. 03 min. 00 sec. West, a distance of
790.00 feet to a point, thence North 89 deg. 57 min. 00 sec. East, a distance of
146.00 feet to a point, for the Southwest corner of this Tract II;
THENCE, along a line 10.00 feet off, of an existing storage tank, North 00 deg.
03 min. 00 sec. West, a distance of 140.00 feet to a point, for the Northwest
corner of this Tract II;
THENCE, along a line 10.00 feet off, of an existing storage tank, North 89
deg. 57 min. 00 sec. East, a distance of 140.00 feet to a point, for the
Northeast corner of this Tract II;
THENCE, along a line 10.00 feet off, of an existing storage tank, South 00 deg.
03 min. 00 sec. East, a distance of 140.00 feet to a point, for the Southeast
corner of this Tract II;
THENCE, along a line 10.00 feet off, of an existing storage tank, South 89 deg.
57 min. 00 sec. West, a distance of 140.00 feet to the PLACE OF BEGINNING,
containing 0.45 Acre Tract of land, more or less.
<PAGE>
STATE OF TEXAS ) BROWNSVILLE NAVIGATION DISTRICT
COUNTY OF CAMERON ) CONTRACT NO. 2826
THIS CONTRACT between the BROWNSVILLE NAVIGATION DISTRICT OF CAMERON
COUNTY, TEXAS, a navigation district organized, created and existing under and
by virtue of the laws of the State of Texas, with its domicile in Brownsville,
Cameron County, Texas, hereinafter styled District, and STATIA TERMINALS
SOUTHWEST, INC. hereinafter styled Lessee;
W I T N E S S E T H:
The said BROWNSVILLE NAVIGATION DISTRICT OF CAMERON COUNTY, TEXAS, does by
these presents lease and demise unto the said STATIA TERMINALS SOUTHWEST, INC.
the property described on Exhibit A, attached hereto and made a part hereof for
all purposes, for a term of ten (10) years, commencing the 1st day of January,
1994, for and upon the following terms and conditions:
I.
As a consideration for this lease and as rental for said leased premises,
and as consideration for the building situated on the site, the Lessee has paid
the sum of TWO HUNDRED THOUSAND and NO/100 DOLLARS ($200,000.00).
II.
It is an express condition of this agreement and lease that the property
leased hereby is for the sole purpose of bulk liquid storage terminal. This
lease may be terminated without judicial ascertainment by the District at any
time Lessee discontinues the use of the premises for the purposes named or uses
such premises for any other purpose, provided that in the case of nonuse such
default of said Lessee shall exist for a period of 90 days at any time after
commencement of the operation of said described business.
Page 1
<PAGE>
III.
All construction of improvements and facilities of Lessee on the leased
tract of land shall be subject to the approval of the District prior to the
beginning of construction and shall conform with the requirements of the
National Board of Fire Underwriters for such occupancy and facilities. The
Lessee shall construct, maintain and operate its facilities on the leased
property so as not to conflict with the regulations of any federal, state or
municipal authority having jurisdiction thereof, nor with the rules and
regulations prescribed by the District in the official Tariff of the Port of
Brownsville. All private fire protection which may be installed by the Lessee
shall conform in all respects to the standards of the private fire protection
facilities installed and maintained by the District.
IV.
Lessee may not assign this lease or sublet the leased premises without the
written consent of District. Further, Lessee may not assign this lease or sublet
the leased premises for any use other than as stated in Paragraph IV of this
lease.
V.
All notices required hereunder shall be deemed to have been served if hand
delivered or sent by registered or certified mail, to District at the address
below or to Lessee at the leased premises or at the address below:
TO DISTRICT: TO LESSEE:
BROWNSVILLE NAVIGATION DISTRICT STATIA TERMINALS SOUTHWEST,
OF CAMERON COUNTY, TEXAS INC.
POST OFFICE BOX 3070 HC 70, BOX 88
BROWNSVILLE, TEXAS 78520-3070 BROWNSVILLE, TX 78521
VI
Lessee shall have the right to erect electric lights, power, water and gas
lines over and across lands belonging to District, including the premises leased
herein, incidental to the rights and privileges herein given, and shall have the
further right to connect said lines to main lines maintained by the District;
Page 2
<PAGE>
provided and except, however, that the rights in this paragraph defined shall
be, and the same are, specifically made subject to the following conditions and
restrictions:
1. The location and construction by Lessee of all or any of said lines
shall be subject to the approval of District and after the same are installed,
no change shall be made without the written consent of said District.
2. District may at any time require a change in location of any wires,
poles, water or gas mains or pipelines, accessories or other facilities laid on
or across any land or facilities of District other than the leased premises, if
it is deemed by District necessary that the same be changed, by giving Lessee 30
days' written notice of such requirements, and such changes so made shall be at
the cost and expense of Lessee; provided such right shall not be exercised
arbitrarily by District, but only when such action is made necessary for
improvements then on said property or the construction thereof being immediately
contemplated, and provided that, where any changes are required to be made under
this provision, District shall furnish Lessee with a new location therefor; such
new location to be the most convenient and direct available at such time.
3. Lessee agrees to pay District for all water used and all applicable
standby charges, at rates customarily charged to other industries on the
District's property.
4. Connection to District's water main must be of standard installation,
installed to the satisfaction of District, and with a meter of adequate size
properly operating and equipped with a check valve. The meter shall be furnished
by Lessee and installed immediately at the point of connection with District's
main.
5. All electrical and power line connections, extensions and installations
are to be made in accordance with the rules and regulations of the National
Electrical Code.
Page 3
<PAGE>
6. Lessee agrees to pay to District as and when they accrue, wharfage,
port, harbor and other charges for the use of its facilities at the rates
published in the District's then effective official Port Tariff containing
authorized rates, rules and regulations governing the Brownsville Ship Channel
and its publicly owned wharves, piers and docks, as well as all other lawful
charges incurred to District by reason of Lessee's operations on the demised
premises.
7. District agrees to grant title of 6,165 square feet of gross building
area on site to Lessee.
8. In the event that Lessee stores more than 5,000 gallons of petroleum
hydrocarbon Lessee agrees to install groundwater monitoring wells prior to
receiving such liquid hydrocarbon products.
A minimum of four (4) monitoring wells shall be installed on the perimeter
of the facility and shall be placed at an approximate equal distance from each
other. Wells shall be constructed to comply with current USEPA standards for
monitoring wells.
The wells shall be fully developed upon installation. The groundwater
shall be monitored when they are developed and once a year thereafter.
Parameters analyzed shall include TPH (Total Petroleum Hydrocarbons) for all
facilities, and BTEX (Benzene, Toluene, Ethylbenzene, and Xylene) for all
facilities handling crude oil and light distillates. Facilities handling
Hazardous Materials, as defined by USDOT regulations in 49 CFR 100-199 (subpart
C) shall also install groundwater monitoring wells as described above, and shall
monitor for all chemicals stored in tanks with a capacity in excess of 500
gallons.
VII.
If any of the sums of money to be paid by Lessee shall not be paid as and
when the same becomes due or if Lessee shall default in the performance of any
of the other agreements, conditions, covenants or terms herein contained, or if
Lessee
Page 4
<PAGE>
shall abandon the premises as described in Paragraph IV; or if a petition or
answer for reorganization of Lessee or the then owner of Lessee's interest
hereunder shall be filed; or if Lessee or the then owner of Lessee's interest
hereunder shall make a general assignment for the benefit of creditors, or shall
take any benefit under any insolvency or bankruptcy act, or have a receiver or
trustee or other fiduciary appointed for its property; or if Lessee's leasehold
interest shall be taken on execution or other process of law; or if this lease
or the estate of Lessee hereunder shall be transferred or passed to or devolve
upon any other person, firm, association or corporation except in the manner
provided hereunder; then and in any of said events, District shall have the
right to terminate and this lease and the term hereby granted, as well as the
right, title and interest of Lessee hereunder; provided, however, that the
District shall first give Lessee 30 days' notice in writing of such default,
specifying in particularity the nature of the default, and shall give Lessee the
opportunity to cure such default within such 30 day period. If Lessee should
fail to cure such default within such 30 day notice period, District may
terminate this lease; and it is agreed that upon the expiration of the term
fixed in such notice, if the nonpayment, default or other cause of termination
specified in such notice shall not have been made good or removed, this lease
and the term hereby granted and created, as well as all the right, title and
interest. of Lessee hereunder shall, at the option of the District, terminate in
the same manner and with the same force and effect as if the expiration of time
in such notice were the end of the term herein originally demised; and the
District may immediately, or at any time thereafter, and without further notice
or demand, enter into and upon said premises, or any part thereof, in the name
of the whole, and repossess the same as of. its first and former estate and
expel the Lessee and those claiming under it, and remove its effects (forcibly,
if necessary) without being taken or deemed
Page 5
<PAGE>
guilty of any manner of trespass, and without prejudice to any remedies which
might be otherwise used for arrears of rent or preceding breach of covenants.
It is understood and agreed that no part of the time of the discontinuance
or cessation in operation referred to in Paragraph IV which is caused by the
interference of military authorities, strikes, floods, fires, navigation
hazards, embargoes, or limitations on production instituted by state, national
or local authorities, or any other act not within the control of either party
hereto, shall be counted in the 90 day period mentioned in said Paragraph IV.
VIII.
The Lessee shall comply with all the conditions and covenants of this
lease. If the Lessee complies with all the conditions or covenants of this
lease, upon the expiration of the term of this lease, Lessee shall have the
right for a period of up to 30 days from the date of said expiration, and not
thereafter, to remove all of its improvements of every kind and character,
except all water mains, gas mains, railroad tracks, power lines, wharves or
bulkheads, which are hereby agreed shall become the property of the District
upon said expiration, cancellation or forfeiture, from the leased premises;
provided, however, that the leased premises shall be restored to their present
condition after the removal of said improvements, all excavations, except slips,
filled and all refuse of every kind and character removed from said premises.
Until such removal and restoration is completed, Lessee shall pay to District on
a month-to-month basis the then current rental for the premises. Such rental
shall be due monthly in advance and Lessee shall pay a full month's rental for
any fraction of a month during which it completes such removal and restoration.
In the event of the breach of any such conditions or covenants, and after
the revocation or forfeiture of this lease by District as in Paragraph IX
provided, all improvements owned
Page 6
<PAGE>
by Lessee and placed upon the premises shall be considered as part of the real
estate and shall become the property of the District.
IX.
Lessee shall pay all taxes and assessments legally levied and assessed
against its leasehold interest and its improvements on said property during the
term of this lease and any extension thereof before such taxes and assessments
become delinquent, unless Lessee, by legal proceedings, contests the legality of
same, in which event such taxes and assessments shall be promptly paid upon the
judicial determination thereof.
X.
Lessee shall keep sidewalks, roads and passageways, if any, on or over
said leased premises in good repair, and shall indemnify and hold harmless
District against any and all claims, damages, liabilities, costs (including
reasonable engineering and/or attorneys fees) arising out of, in connection
with, or incident to any act or omission or condition (including the negligence
of District or its agents or employees) in connection with the ownership,
operation, maintenance or repairs of the premises covered by the Lease including
any additions to or extensions of the same. Lessee agrees to repair any damage,
reasonable wear and tear alone excepted, to District's road contiguous to the
leased premises caused by tank trucks conveying petroleum products to or from
the leased premises.
Lessee shall keep in full force and effect Bodily Injury Liability and
Property Damage Liability Insurance covering its operations to be carried out
upon or in connection with this lease. The policy or policies shall name
District as additional insured and contain a clause that the insurance will be
canceled or changed without giving the District thirty days prior written
notice. Certificates of insurance shall be furnished to the
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<PAGE>
District. The limits of liability and other insurance policy particulars
required will be available at the District's administrative office.
XI.
The District reserves the right to have rights-of-way and easements on,
over and across the premises for underground water lines, pipelines, power
lines, telegraph and telephone lines, necessary or proper for the purposes of
developing and serving lands adjacent to the tract leased by the Lessee; said
rights-of-way and easements, however, to be so located and said water lines,
pipelines, power lines, telegraph and telephone lines so constructed and
maintained as not to impair or interfere with any of the existing or anticipated
improvements on said tract leased by the Lessee, or with the maintenance or
operation thereof.
XII.
In construction of its improvements on the leased premises and in its
operation and maintenance of said improvements and the conduct of its business
thereon, Lessee agrees and hereby obligates itself to conform to and be bound by
the following:
1. No building or other similar improvements shall be constructed within
20 feet from the theoretical top of all bank lines and all road right-of-way
lines, nor within 10 feet from all other property lines.
2. All septic systems installed on said leased premises shall be subject
to the approval of the District's Engineer and the County Health Officer of
Cameron County, Texas.
3. All waste water, rain water, etc., not containing noxious, odorous or
otherwise harmful substances may be disposed of through direct underground
drains into the basin, except that such drains must leave the bank at least 8"
below the top line of rip rap rock to prevent erosion of the bank. In no event
shall
Page 8
<PAGE>
any such drain water be shunted or passed over banks of the harbor, nor shall
any noxious, odorous or otherwise harmful substance be discharged into such
harbor or basin.
4. Lessee agrees to connect its septic system to any sanitary sewer system
constructed by District for the purpose of serving the leasehold, among other
lands, paying the District its customary charge for such sewer service.
5. Lessee agrees to maintain and return the leased premises in a clean and
well maintained condition. All fences will be kept in good repair, grass mowed,
and all scrap metal, trash or other litter removed.
6. Lessee agrees to return the leased premises in the same condition as
Lessee received them, ordinary wear and tear excepted.
XIII.
In addition to the District's statutory lien, District shall have at all
times a valid security interest to secure payment of the sums of money becoming
due hereunder from Lessee, and to secure payment of any damages or loss which
District may suffer by reason of the breach by Lessee of any covenant, agreement
or condition contained herein, upon all goods, wares, equipment, fixtures,
furniture, improvements and other personal property of Lessee presently or which
may hereafter be situated on the premises, and all proceeds therefrom, and such
property shall not be removed therefrom without the consent of District until
all sums of money then due to District hereunder shall first have been paid and
discharged and all the covenants, agreements and conditions hereof have been
fully complied with and performed by Lessee. Upon the occurrence of an event of
default by Lessee, District may, in addition to any other remedies provided
herein, after giving thirty (30) days' notice of the intent to take possession
and giving an opportunity for a hearing thereon, enter upon the premises and
take possession of any and all goods, wares, equipment, fixtures, furniture,
improvements and other
Page 9
<PAGE>
personal property of Lessee situated on the premises, without liability for
trespass or conversion, and sell the same at public or private sale, with or
without having such property at the sale, after giving Lessee reasonable notice
of the time and place of any public sale or of the time after which any private
sale is to be made, at which sale the District or its assigns may purchase
unless otherwise prohibited by law. Unless otherwise provided by law, and
without intending to exclude any other manner of giving Lessee reasonable
notice, the requirement of reasonable notice shall be met if such notice is
given at least 10 days before the actual time of sale. The proceeds from any
such disposition, less any and all expenses connected with the taking
possession, holding and selling of the property (including reasonable attorneys'
fees and other expenses), shall be applied as a credit against the indebtedness
secured by the security interest granted in this section. Any surplus shall be
paid to Lessee or as otherwise required by law, and the Lessee shall pay any
deficiencies forthwith. Upon request by District, Lessee agrees to execute and
deliver to District a financing statement in form sufficient to perfect the
security interest of District under the provisions of the Uniform Commercial
Code in force in the State of Texas. The statutory lien for rent is not hereby
waived, the security interest herein granted being in addition and supplementary
thereto. Anything to the contrary notwithstanding, said security interest shall
be subject and subordinate to a security interest granted by the Lessee to a
third party in and to any property owned by Lessee and located upon the leased
premises ("Lessee's Property") to the extent such security interest was granted
for the purpose of securing payment (i) to the Seller for the purchase price
paid by Lessee for Lessee's Property or any portion of such purchase price, or
(ii) to a lender advancing funds for such purchase price or any portion of such
purchase price or for the construction of improvements upon the leased premises
by Lessee.
Page 10
<PAGE>
XIV.
Lessee agrees to comply with all provisions of the official Tariff of the
Port of Brownsville as it now exists or hereafter may be amended. In the event
of a conflict between the provisions of this lease and the provisions of such
Tariff, the provisions of the Tariff shall control.
XV.
District expressly warrants that it is the sole owner of the premises,
that it has the full right, power and authority to make this lease, and that no
other person needs to join in the execution thereof in order for the lease to be
binding upon all parties having an interest in the leased premises.
XVI.
In the event Lessee or District breaches any of the terms of this
agreement, whereupon Lessee or District employs attorneys to protect or enforce
its rights hereunder, or in the event Lessee or District files a petition in
bankruptcy and Lessee or District employs attorneys to protect its rights, then
the party which breaches or files a petition in bankruptcy agrees to pay the
other party reasonable attorneys' fees.
XVII.
As used in this article, the term "Hazardous Materials" means any
hazardous or toxic substances, materials or wastes, including, but not limited
to, those substances, materials and wastes listed in the United States
Department of Transportation Hazardous Materials Table (49 C.F.R. 172.101) or by
the Environmental Protection Agency as hazardous substances (40 C.F.R. Part 302)
and amendments thereto, or substances, materials and wastes which are or become
regulated under any applicable local, state or federal law, rule, or regulation,
including without limitation, any material, waste or substance which is: (i)
petroleum; (ii) asbestos; (iii) polychlorinated biphenyls; (iv) designated as a
"hazardous substance" pursuant to Section 311 of the Clean Water Act, 33 U.S.C.
251, et seq. (33 U.S.C.
Page 11
<PAGE>
1321) or listed pursuant to Section 307 of the Clean Water Act (33 U.S.C. 1317);
(v) defined as a "hazardous waste" pursuant to Section 1004 of the Resource
Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., (42 U.S.C.
6903); or (vi) defined as a "Hazardous Substance" pursuant to Section 101 of the
Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C.
9601, et se4. (42 U.S.C. 9601).
Lessee covenants and agrees from the date hereof and as long as the
provisions of this lease shall remain in effect to remove from the Premises, if
and as required by law, any Hazardous Materials placed in or on the Premises by
Lessee, its agents, its employees or its independent contractors, and to comply
in all respects with all federal, state and local governmental laws and
regulations governing such removal. Lessee promises to give notice to District
of any claim, action, administrative proceeding (including, without limitation,
informal proceedings), or other demand by any governmental agency or other third
party involving the existence of Hazardous Materials on the Premises, and copies
of any notice of any releases of Hazardous Materials given by Lessee pursuant to
any law, rule or regulation, and any report of and response to any such
incident.
Lessee agrees to indemnify, pay and protect, defend and save District
harmless from and against any and all claims (including, without limitation,
third party claims for personal injury or real or personal property damage),
actions, administrative proceedings (including informal proceedings), judgments,
damages, punitive damages, penalties, fines, costs, liabilities (including sums
paid in settlement of claims), interest, or losses, including reasonable
attorneys' and paralegals' fees and expenses, consultant fees, and expert fees,
together with all other costs and expenses of any kind or nature (collectively,
the "Costs") that arise directly or indirectly from or in connection with the
release or suspected release by Lessee or its agents, its employees or its
independent contractors of any Hazardous
Page 12
<PAGE>
Materials in or into the air, soil, ground water, or surface water at, on,
about, under, or within the Premises, or any portion thereof, or elsewhere in
connection with Lessee's operations on or in connection with the Premises. The
indemnification provided in this lease shall specifically apply to and include
claims or actions brought by or on behalf of employees of Lessee. In the event
District shall suffer or incur any such costs, Lessee shall pay to District the
total of all such costs suffered or incurred by District upon demand therefor by
District. Without limiting the generality of the foregoing, the indemnification
provided in this lease shall specifically cover costs, including capital,
operating and maintenance costs, incurred in connection with any investigation
or monitoring of site conditions, any cleanup, containment, remedial, removal,
or restoration work require or performed by any federal, state or local
government agency or political subdivision or performed by any nongovernmental
entity or person because of the presence, suspected presence, release, or
suspected release of any Hazardous Material in or into the air, soil, ground
water, or surface water at, on, about, under, or within the Premises or any
portion thereof, or elsewhere in connection with Lessee's operations on or in
connection with the Premises and any claims of third parties for loss or damage
due to such hazardous materials.
In the event Lessee is required to conduct or perform any investigation or
monitoring of site conditions for any cleanup, containment, restoration, removal
or other remedial work (collectively the "Remedial Work") under any applicable
federal, state or local law or regulation, by any judicial order or by any
governmental entity, or in order to comply with any agreements affecting the
Premises because of or in connection with any occurrence or event described in
this lease, Lessee shall perform or cause to be performed the Remedial Work in
compliance with such law, regulation, order or agreement; provided that Lessee
Page 13
<PAGE>
may withhold such compliance pursuant to a good faith dispute regarding the
application, interpretation, or validity of the law, regulation, order or
agreement, subject to the requirements of the following paragraph. All remedial
work shall be performed by one or more contractors selected by Lessee and
approved in advance in writing by District, and under the supervision of a
consulting engineer selected by Lessee and approved in advance in writing by
District. All costs and expenses of such Remedial Work shall be paid by Lessee,
including, without limitation, the charges of such contractors and/or the
consulting engineer, District's reasonable attorneys and paralegals' fees and
costs incurred in connection with monitoring or review of such Remedial Work. If
Lessee shall fail to timely commence or cause to be commenced, or fail to
diligently prosecute to completion, such Remedial Work, District may, but shall
not be required to, cause such Remedial Work to be performed, and all costs and
expenses thereof or incurred in connection therewith shall be Costs within the
meaning of this lease. All such Costs shall be due and payable upon demand
therefor by District.
Lessee shall be permitted to contest or cause to be contested, subject to
compliance with the requirements of this paragraph, by appropriate action any
Remedial Work requirement, and District shall not perform such requirement on
its behalf, so long as Lessee has given District written notice that Lessee is
contesting or shall contest or cause to be contested the application,
interpretation, or validity of the governmental law, regulation, order or
agreement pertaining to the Remedial Work by appropriate proceedings conducted
in good faith with due diligence; provided that such contests shall not subject
District or any assignees of District's interest in the Premises to civil
liability and does not jeopardize any such parties' interest in the Premises.
Lessee shall give such security or assurances as may be reasonably required by
District to insure compliance with the legal requirements pertaining to the
Remedial Work (and
Page 14
<PAGE>
payment of all Costs in connection therewith) and to prevent any sale,
forfeiture, or loss by reason of such nonpayment or noncompliance.
This article shall be binding upon, inure to the benefit of, and be
enforceable by District and Lessee, and their respective heirs, legal
representatives, successors and assigns, including, without limitation, any
assignee or purchaser of all or any portion of the District's interest in the
Premises. If any term of this article or any application thereof shall be
invalid, illegal, or unenforceable, the remainder of this article and any other
application of such term shall not be affected thereby. No delay or omission in
exercising any right hereunder shall operate as a waiver of such right or any
other right. The provisions of this article shall survive the termination or
expiration of this lease.
XVIII.
District reserves the right, on ninety (90) days' notice, to move Lessee
at District's expense to another location on District's lands fully suitable for
Lessee's purposes.
XIX.
Neither Lessee nor anyone claiming by, through or under Lessee shall have
the right to file or place any mechanic's lien of any kind or character
whatsoever on the premises, or on any of the buildings or improvements thereon,
and notice is hereby given that no contractor, subcontractor, or anyone else who
may furnish any material, service or labor for any buildings or improvements,
alterations or repairs at any time shall be or become entitled to any lien
thereon whatsoever. For the further security of District, Lessee shall give
actual notice of this restriction in advance to any and all contractors,
subcontractors or other persons, firms or corporations that may furnish any such
material, service or labor.
Page 15
<PAGE>
XX.
This instrument contains the entire Agreement between the parties hereto,
and neither party shall be bound by any representation or agreement, oral or
written, made by either party or any of their agents, representatives or
employees, not set forth herein.
IN TESTIMONY WHEREOF said BROWNSVILLE NAVIGATION DISTRICT OF CAMERON
COUNTY, TEXAS, and said STATIA TERMINALS SOUTHWEST, INC., have each caused these
presents to be executed by its proper officers thereunto duly authorized on this
14th day of January, 1994.
BROWNSVILLE NAVIGATION DISTRICT
OF CAMERON COUNTY, TEXAS
/s/ Joe Saenz
----------------------------------
JOE SAENZ, Chairman of
the Board of Navigation and
Canal Commissioners of the
Brownsville Navigation District
of Cameron County, Texas
Attest:
By: /s/ [ILLEGIBLE]
-----------------------------
Secretary
STATIA TERMINALS SOUTHWEST, INC.
By: /s/ James G. Cameron
------------------------------
Attest:
By: /s/ Kathy M. Estes
-----------------------------
Secretary
STATE OF TEXAS )
COUNTY OF CAMERON )
This instrument was acknowledged before me on the 19th day of January,
1994, by JOE SAENZ, in his capacity as Chairman of the Board of Navigation and
Canal Commissioners of the Brownsville Navigation District of Cameron County,
Texas.
/s/ BEATRICE G. ROSENBAUM
-------------------------------------------
Notary Public in and for the State of Texas
My Commission Expires:_____________________
- -------------------------------------
[SEAL] BEATRICE G. ROSENBAUM
Notary Public, State of Texas
My Commission Expires 2-17-97
- -------------------------------------
Page 16
<PAGE>
STATE OF FLORIDA )
COUNTY OF DADE )
This instrument was acknowledged before me on the 14th day of January,
1994, by James G. Cameron, President, of STATIA TERMINALS SOUTHWEST, INC., a
Texas corporation, on behalf of said corporation.
/s/ Virginia H. Hall
---------------------------------------------
Notary Public in and for the State of Florida
My Commission Expires: 11/23/94
Page 17
<PAGE>
EXHIBIT "A"
STATIA TERMINALS SOUTHWEST, INC.
METES AND BOUNDS DESCRIPTION
5.06 ACRE TRACT
December 30, 1993
BEING 5.06 Acre Tract of land, out of Share 32, Espiritu Santo Grant, Cameron
County, Texas, and said 5.06 Acre Tract being more particularly described as
follows:
COMMENCING at a concrete monument found of Corps Engineers (U.S.E.D.) Station
83+500 and the North 4+50 Reference Line from the centerline of the Brownsville
Ship Channel (South Texas Coordinate System X = 2,366,382.815 and Y =
107,412.415); thence North 20 deg. 46 min. West, a distance of 30.4 feet to a
point on the approximately center of the Main Railroad Track, thence South 69
deg. 14 min. West, a distance of 984.04 feet to a point on the approximately
center of the Main Railroad Track, thence along the East line of Marine Drive
Right-of-way line, North 20 deg. 46 min. West, a distance of 335.82 feet to a
point on the fence post of an existing chain link fence for a corner of a
certain 6.36 Acre Tract, for the Southwest corner and PLACE OF BEGINNING of this
tract;
THENCE, along said East line of Marine Drive and approximately along an existing
chain link fence, North 20 deg. 46 min. 00 sec. West, a total distance of 354.18
feet to a point on the South Right-of-way line of the State Highway No. 48, for
the Northwest corner of this tract;
THENCE, along said South Right-of-way line of the State Highway No. 48, North 69
deg. 14 min. 00 sec. East, a total distance of 622.56 feet to a point on the
Northwest corner of a certain 6.36 Acre Tract, for the Southeast corner of this
tract;
THENCE, along said West line of a certain 6.36 Acre Tract, South 20 deg. 46 min.
00 sec. West, a total distance of 354.18 feet to a point, for the Southeast
corner of this tract;
THENCE, along said North line of a certain 6.36 Acre Tract, South 69 deg. 14
min. 00 sec. West, a total distance of 622.56 feet to the PLACE OF BEGINNING,
containing 5.06 Acres of land, more or less.
<PAGE>
Exhibit 12.1
STATIA TERMINALS, INC.
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Historical Financial Information
---------------------------------------------------------------------------
Pre-Praxair Acquisition
---------------------------------------------------------------------------
Year Ended December 31, Nine Months
------------------------------------------------------------ Ended
1991 1992 1993 1994 1995 Sept. 30, 1995
---- ---- ---- ---- ---- --------------
<S> <C> <C> <C> <C> <C> <C>
EARNINGS BEFORE INCOME TAXES AND FIXED CHARGES:
Income (loss) before income taxes $ 9,579 $ 13,712 $ 12,029 $ 14,127 $ 6,383 $ 5,591
Add: Fixed charges, see below 1,019 1,000 2,789 6,928 13,624 10,476
Less: Capitalized interest -- -- (843) (716) (352) (207)
----------------------------------------------------------------------------
Earnings before income taxes and fixed charges $ 10,598 $ 14,712 $ 13,975 $ 20,339 $ 19,655 $ 15,860
----------------------------------------------------------------------------
----------------------------------------------------------------------------
FIXED CHARGES:
Interest expense $ 19 $ -- $ 726 $ 3,114 $ 4,478 $ 3,767
Capitalized interest -- -- 843 716 352 207
Preferred stock dividends -- -- 110 1,964 1,424 1,097
Rent expense 1,000 1,000 1,110 1,134 7,370 5,405
----------------------------------------------------------------------------
$ 1,019 $ 1,000 $ 2,789 $ 6,928 $ 13,624 $ 10,476
Ratio of earnings to fixed charges 10.40 14.71 5.01 2.94 1.44 1.51
----------------------------------------------------------------------------
----------------------------------------------------------------------------
<CAPTION>
Pro Forma
-------------- ---------
Post-Praxair
Acquisition
--------------
Nine Months Year Nine Months
Ended Ended Ended
Sept. 30, 1996 Dec. 31. 1995 Sept. 30, 1996
------------- ------------- --------------
<S> <C> <C> <C>
EARNINGS BEFORE INCOME TAXES AND FIXED CHARGES:
Income (loss) before income taxes $ 2,132 $ 6,505 $ (649)
Add: Fixed charges, see below 10,407 18,406 13,805
Less: Capitalized interest (328) (540) (629)
----------- -------------------------
Earnings before income taxes and fixed charges $ 12,211 $ 24,371 $ 12,527
----------- -------------------------
----------- -------------------------
FIXED CHARGES:
Interest expense $ 3,447 $ 16,237 $ 11,954
Capitalized interest 328 540 629
Preferred stock dividends 789 -- --
Rent expense 5,843 1,629 1,222
----------- -------------------------
$ 10,407 $ 18,406 $ 13,805
Ratio of earnings to fixed charges 1.17 1.32 (a)
----------- -------------------------
----------- -------------------------
</TABLE>
(a) Earnings were insufficient to cover fixed charges for the pro forma nine
months ended September 30, 1996 by $1,278.
<PAGE>
Exhibit 21.1
SUBSIDIARIES OF THE ISSUERS
Jurisdiction of
Name of Corporation Incorporation
- ------------------- -------------
Statia Delaware Holdco II, Inc. Delaware
Statia Terminals Southwest, Inc. Texas
Statia Terminals Delaware, Inc. Delaware
Statia Terminals, Inc. Delaware
Statia Terminals Puerto Rico
Corporation Puerto Rico
Statia Steamship Agency, Inc. Florida
W.P. Company, Inc. Delaware
Statia Terminals Virgin Islands
Corporation United States Virgin
Islands
Seven Seas Steamship Company, Inc. Florida
Seven Seas Steamship Company
(Sint. Eustatius) N.V. Netherlands Antilles
Seven Seas Steamship Company N.V. Netherlands Antilles
Statia Terminals Corporation N.V. Netherlands Antilles
Saba Trustcompany N.V. Netherlands Antilles
Bicen Development Corporation N.V. Netherlands Antilles
Statia Terminals N.V. Netherlands Antilles
Point Tupper Marine Services Limited Nova Scotia
Statia Shipping N.V. Netherlands Antilles
Statia Laboratory Services N.V. Netherlands Antilles
Statia Tugs N.V. Netherlands Antilles
<PAGE>
Exhibit 23.1
Consent of Independent Public Accountants
As independent public accountants, we hereby consent to the use of our reports
(and to all references to our Firm) included in or made part of this
Registration Statement on Form S-4.
Arthur Andersen LLP
Chicago, Illinois
December 20, 1996
<PAGE>
Exhibit 23.8
CONSENT OF THE PIRA ENERGY GROUP
Reference is made herein to the (i) Offering Memorandum of Statia Terminals
International N.V. and Statia Terminals Canada Incorporated (collectively, the
"Issuers") dated November 5, 1996 (the "Offering Memorandum"), with respect to
the issuance of $135,000,000 aggregate principal amount of __% First Mortgage
Notes due 2003 (the "Notes") and the (ii) related registration statement of the
Issuers referred to in the Offering Memorandum (the "Exchange Offer Registration
Statement") with respect to an offer to exchange the Notes for a new issue of
debt securities of the Issuers registered under the Securities Act, with terms
substantially identical to those of the Notes.
The undersigned hereby consents to the use of its name and the information
attributed to it on pages 1, 2 and 40 of the Offering Memorandum in connection
with the use of the Offering Memorandum and the Exchange Offer Registration
Statement.
PIRA ENERGY GROUP
By: /s/ Lawrence Goldstein
--------------------------------
Title: President
11/15/1996
<PAGE>
Exhibit 23.9
CONSENT OF THE INDEPENDENT LIQUID TERMINALS ASSOCIATION
Reference is made herein to the (i) Offering Memorandum of Statia Terminals
International N.V. and Statia Terminals Canada Incorporated (collectively, the
"Issuers") dated November 5, 1996 (the "Offering Memorandum"), with respect to
the issuance of $135,000,000 aggregate principal amount of __% First Mortgage
Notes due 2003 (the "Notes") and the (ii) related registration statement of the
Issuers referred to in the Offering Memorandum (the "Exchange Offer Registration
Statement") with respect to an offer to exchange the Notes for a new issue of
debt securities of the Issuers registered under the Securities Act, with terms
substantially identical to those of the Notes.
The undersigned hereby consents to the use of its name and the information
attributed to it on pages 40 and 51 of the Offering Memorandum in connection
with the use of the Offering Memorandum and the Exchange Offer Registration
Statement.
INDEPENDENT LIQUID TERMINALS
ASSOCIATION
By: /s/ John Prokop
--------------------------------
Title: President
November 18, 1996
<PAGE>
Exhibit 23.10
CONSENT OF THE NEW YORK MERCANTILE EXCHANGE
Reference is made herein to the (i) Offering Memorandum of Statia Terminals
International N.V. and Statia Terminals Canada Incorporated (collectively, the
"Issuers") dated November 5, 1996 (the "Offering Memorandum"), with respect to
the issuance of $135,000,000 aggregate principal amount of __% First Mortgage
Notes due 2003 (the "Notes") and the (ii) related registration statement of the
Issuers referred to in the Offering Memorandum (the "Exchange Offer Registration
Statement") with respect to an offer to exchange the Notes for a new issue of
debt securities of the Issuers registered under the Securities Act, with terms
substantially identical to those of the Notes.
The undersigned hereby consents to the use of its name and the information
attributed to it on pages 42 and 43 of the Offering Memorandum in connection
with the use of the Offering Memorandum and the Exchange Offer Registration
Statement.
NEW YORK MERCANTILE EXCHANGE
By: R. Paul Thompson
--------------------------------
Title: President
11/18/1996
<PAGE>
Exhibit 23.11
CONSENT OF STALSBY/WILSON
Reference is made herein to the (i) Offering Memorandum of Statia Terminals
International N.V. and Statia Terminals Canada Incorporated (collectively, the
"Issuers") dated November 5, 1996 (the "Offering Memorandum"), with respect to
the issuance of $135,000,000 aggregate principal amount of __% First Mortgage
Notes due 2003 (the "Notes") and the (ii) related registration statement of the
Issuers referred to in the Offering Memorandum (the "Exchange Offer Registration
Statement") with respect to an offer to exchange the Notes for a new issue of
debt securities of the Issuers registered under the Securities Act, with terms
substantially identical to those of the Notes.
The undersigned hereby consents to the use of its name and the information
attributed to it on page 52 of the Offering Memorandum in connection with the
use of the Offering Memorandum and the Exchange Offer Registration Statement.
STALSBY/WILSON
By: [ILLEGIBLE]
--------------------------------
Title: Mktg. Director
November 11, 1996
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST
INDENTURE ACT OF 1939 OF A CORPORATION
DESIGNATED TO ACT AS TRUSTEE
---------------
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2)
---------------
Marine Midland Bank
(Exact name of trustee as specified in its charter)
New York 16-1057879
(Jurisdiction of incorporation (I.R.S. Employer
or organization if not a U.S. Identification No.)
national bank)
140 Broadway, New York, N.Y. 10005-1180
(212) 658-1000 (Zip Code)
(Address of principal executive offices)
Eric Parets
Senior Vice President
Marine Midland Bank
140 Broadway
New York, New York 10005-1180
Tel: (212) 658-6560
(Name, address and telephone number of agent for service)
Statia Terminals International N.V.
(Exact name of obligor as specified in its charter)
Netherlands Antilles 52-2003102
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
Tumbledown Dick Bay
St. Eustatius, Netherlands Antilles
(011) 5993-82300
(Address of principal executive offices)
<PAGE>
Statia Terminals Canada, Incorporated
(Exact name of obligor as specified in its charter)
Nova Scotia, Canada 98-0164788
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
3817 Port Malcolm Road
Port Hawkesbury, Nova Scotia B0E2V0
(902) 625-1711
(Address of principal executive offices)
11 3/4% Series B First Mortgage Notes due 2003
(Title of Indenture Securities)
<PAGE>
General
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervisory
authority to which it is subject.
State of New York Banking Department.
Federal Deposit Insurance Corporation, Washington, D.C.
Board of Governors of the Federal Reserve System,
Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe
each such affiliation.
None
<PAGE>
Item 16. List of Exhibits.
Exhibit
T1A(i) * - Copy of the Organization Certificate of
Marine Midland Bank.
T1A(ii) * - Certificate of the State of New York
Banking Department dated December 31,
1993 as to the authority of Marine
Midland Bank to commence business.
T1A(iii) - Not applicable.
T1A(iv) * - Copy of the existing By-Laws of Marine
Midland Bank as adopted on January 20,
1994.
T1A(v) - Not applicable.
T1A(vi) * - Consent of Marine Midland Bank
required by Section 321(b) of the Trust
Indenture Act of 1939.
T1A(vii) - Copy of the latest report of condition of
the trustee (September 30, 1996),
published pursuant to law or the
requirement of its supervisory or
examining authority.
T1A(viii) - Not applicable.
T1A(ix) - Not applicable.
* Exhibits previously filed with the Securities and Exchange Commission with
Registration No. 33-53693 and incorporated herein by reference thereto.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the Trustee,
Marine Midland Bank, a banking corporation and trust company organized under the
laws of the State of New York, has duly caused this statement of eligibility to
be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of New York and State of New York on the 17th day of December 1996.
MARINE MIDLAND BANK
By: /s/ Frank J. Godino
Frank J. Godino
Assistant Vice President
<PAGE>
Exhibit T1A (vii)
Board of Governors of the Federal Reserve System
OMB Number: 7100-0036
Federal Deposit Insurance Corporation
OMB Number: 3064-0052
Office of the Comptroller of the Currency
OMB Number: 1557-0081
Expires March 31, 1999
Federal Financial Institutions Examination Council
- --------------------------------------------------------------------------------
This financial information has not been reviewed, or confirmed 1
for accuracy or relevance, by the Federal Reserve System.
Please refer to page i,
Table of Contents, for
the required disclosure
of estimated burden.
- --------------------------------------------------------------------------------
Consolidated Reports of Condition and Income for
A Bank With Domestic and Foreign Offices--FFIEC 031
Report at the close of business September 30, 1996 (950630)
-----------
(RCRI 9030)
This report is required by law; 12 U.S.C. Section 324 (State
member banks); 12 U.S.C. Section 1817 (State nonmember
banks); and 12 U.S.C. Section 161 (National banks).
This report form is to be filed by banks with branches and
consolidated subsidiaries in U.S. territories and possessions,
Edge or Agreement subsidiaries, foreign branches, consoli-
dated foreign subsidiaries, or International Banking Facilities.
- --------------------------------------------------------------------------------
NOTE: The Reports of Condition and Income must be
signed by an authorized officer and the Report of Condition
must be attested to by not less than two directors (trustees)
for State nonmember banks and three directors for State
member and National Banks.
I, Gerald A. Ronning, Executive VP & Controller
- ---------------------------------------------------
Name and Title of Officer Authorized to Sign Report
of the named bank do hereby declare that these Reports of
Condition and Income (including the supporting schedules)
have been prepared in conformance with the instructions
issued by the appropriate Federal regulatory authority and
are true to the best of my knowledge and believe.
/s/ Gerald A. Ronning
- ----------------------------------------------
Signature of Officer Authorized to Sign Report
10/28/96
- -------------------------
Date of Signature
The Reports of Condition and Income are to be prepared in
accordance with Federal regulatory authority instructions.
NOTE: These instructions may in some cases differ from
generally accepted accounting principles.
We, the undersigned directors (trustees), attest to the
correctness of this Report of Condition (including the
supporting schedules) and declare that it has been examined
by us and to the best of our knowledge and belief has been
prepared in conformance with the instructions issued by the
appropriate Federal regulatory authority and is true and
correct.
/s/ James H. Cleave
- -----------------------------
Director (Trustee)
/s/ Bernard J. Kennedy
- -----------------------------
Director (Trustee)
/s/ Northrup R. Knox
- -----------------------------
Director (Trustee)
- --------------------------------------------------------------------------------
For Banks Submitting Hard Copy Report Forms:
State Member Bank: Return the original and one copy to
the appropriate Federal Reserve District Bank.
State Nonmember Banks: Return the original only in the
special return address envelope provided. If express mail
is used in lieu of the special return address envelope, return
the original only to the FDIC, c/o Quality Data Systems,
2127 Espey Court, Suite 204, Crofton, MD 21114.
National Banks: Return the original only in the special
return address envelope provided. If express mail is used in
lieu of the special return address envelope, return the
original only to the FDIC, c/o Quality Data Systems, 2127
Espey Court, Suite 204, Crofton, MD 21114.
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FDIC Certificate Number |0|0|5|8|9|
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<PAGE>
NOTICE
This form is intended to assist institutions with state publication
requirements. It has not been approved by any state banking
authorities. Refer to your appropriate state banking authorities
for your state publication requirements.
REPORT OF CONDITION
Consolidating domestic and foreign subsidiaries of the
Marine Midland Bank of Buffalo
Name of Bank City
in the state of New York, at the close of business
September 30, 1996
ASSETS
Thousands
of dollars
Cash and balances due from depository
institutions:
Noninterest-bearing balances
currency and coin....................................$ 924,069
Interest-bearing balances ........................... 1,269,750
Held-to-maturity securities.......................... 0
Available-for-sale securities........................ 3,096,772
Federal Funds sold and securities purchased
under agreements to resell in domestic
offices of the bank and of its Edge and
Agreement subsidiaries, and in IBFs:
Federal funds sold................................... 785,600
Securities purchased under
agreements to resell................................. 306,969
Loans and lease financing receivables:
Loans and leases net of unearned
income............................... 14,428,376
LESS: Allowance for loan and lease
losses............................... 440,075
LESS: Allocated transfer risk reserve 0
Loans and lease, net of unearned
income, allowance, and reserve....................... 13,988,301
Trading assets....................................... 791,225
Premises and fixed assets (including
capitalized leases).................................. 180,892
Other real estate owned................................. 5,104
Investments in unconsolidated
subsidiaries and associated companies................... 0
Customers' liability to this bank on
acceptances outstanding................................. 19,791
Intangible assets....................................... 161,326
Other assets............................................ 459,739
Total assets............................................ 21,989,538
<PAGE>
LIABILITIES
Deposits:
In domestic offices.................................. 14,736,857
Noninterest-bearing.................. 3,198,971
Interest-bearing..................... 11,537,886
In foreign offices, Edge, and Agreement
subsidiaries, and IBFs.................................. 3,676,395
Noninterest-bearing.................. 0
Interest-bearing..................... 3,676,395
Federal funds purchased and securities sold
under agreements to repurchase in domestic
offices of the bank and its Edge and
Agreement subsidiaries, and in IBFs:
Federal funds purchased.............................. 385,430
Securities sold under agreements to
repurchase........................................... 212,177
Demand notes issued to the U.S. Treasury................ 300,000
Trading Liabilities...................................... 293,523
Other borrowed money:
With original maturity of one year
or less.............................................. 28,701
With original maturity of more than
one year............................................. 0
Mortgage indebtedness and obligations
under capitalized leases................................ 33,613
Bank's liability on acceptances
executed and outstanding................................ 19,791
Subordinated notes and debentures....................... 100,000
Other liabilities....................................... 305,078
Total liabilities....................................... 20,091,565
Limited-life preferred stock and
related surplus......................................... 0
EQUITY CAPITAL
Perpetual preferred stock and related
surplus................................................. 0
Common Stock............................................ 185,000
Surplus................................................. 1,633,279
Undivided profits and capital reserves.................. 77,442
Net unrealized holding gains (losses)
on available-for-sale securities........................ 2,252
Cumulative foreign currency translation
adjustments............................................. 0
Total equity capital.................................... 1,897,973
Total liabilities, limited-life
preferred stock, and equity capital..................... 21,989,538
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SECHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEET AS OF DECEMBER 31, 1995 AND THE INCOME STATEMENT FOR THE TWELVE-MONTH
PERIOD ENDED DECEMBER 31, 1995 AND FROM THE UNAUDITED POST-PRAXAIR ACQUISITION
BALANCE SHEET AS OF SEPTEMBER 30, 1996 AND THE INCOME STATEMENT FOR THE
NINE-MONTH PERIOD ENDED SEPTEMBER 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0001029113
<NAME> STATIA TERMINALS INC.
<MULTIPLIER> 1,000
<S> <C><C>
<PERIOD-TYPE> 9-MOS YEAR
<FISCAL-YEAR-END> DEC-31-1996 DEC-31-1995
<PERIOD-END> SEP-30-1996 DEC-31-1995
<CASH> $648 $1,469
<SECURITIES> 0 0
<RECEIVABLES> 13,931 17,027
<ALLOWANCES> (778) (645)
<INVENTORY> 6704 1,886
<CURRENT-ASSETS> 20,956 19,900
<PP&E> 192,533 262,933
<DEPRECIATION> (76,317) (66,606)
<TOTAL-ASSETS> 139,810 230,283
<CURRENT-LIABILITIES> 90,659 26,307
<BONDS> 0 51,600
0 0
18,589 18,589
<COMMON> 19,425 19,425
<OTHER-SE> (58,025) 71,576
<TOTAL-LIABILITY-AND-EQUITY> 139,810 230,283
<SALES> 0 0
<TOTAL-REVENUES> 114,977 135,541
<CGS> 104,575 117,482
<TOTAL-COSTS> 109,039 124,382
<OTHER-EXPENSES> 359 298
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 3,447 4,478
<INCOME-PRETAX> 2,132 6,383
<INCOME-TAX> 498 390
<INCOME-CONTINUING> 845 4,569
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 845 4,569
<EPS-PRIMARY> 0 0
<EPS-DILUTED> 0 0
</TABLE>
