<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 10, 1997
REGISTRATION NO. 333-18455
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 1
TO
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 PARTNERS II, L.P. STATIA TERMINALS, INC. WHITE & CASE
150 EAST 58TH STREET, 37TH FL. 701 WARRENVILLE ROAD, SUITE 275 1155 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10155 LISLE, ILLINOIS 60532-1376 NEW YORK, NEW YORK 10036-2787
(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. / /
------------------------
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 98-0165266 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 FEBRUARY 10, 1997
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 below in the fourth
paragraph) 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
under the caption 'Description of Notes -- Certain Definitions') 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 under the caption 'Description of Notes --
Certain Definitions') will occur if a Change of Control (as defined under the
caption 'Description of Notes -- Certain Definitions') 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 under the caption 'Description of Notes -- Certain
Definitions') and will be secured by a lien on all existing and future
Collateral (as defined under the caption 'Description of Notes -- Certain
Definitions'), which includes the Issuers' two principal terminal facilities.
The New Notes will be fully and 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'). See 'Business -- Subsidiaries of the Company' for a description of
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 under the caption 'Description of Notes -- Certain
Definitions'), 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. (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 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.
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 (i) an 'affiliate' of
either Issuer within the meaning of Rule 405 under the Securities Act or (ii) a
broker-dealer that acquired the Old Notes in a transaction other than as part of
its market-making or other trading activities) 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>
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 107 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 '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
1
<PAGE>
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 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
2
<PAGE>
'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 '-- 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.'
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
</TABLE>
3
<PAGE>
<TABLE>
<S> <C>
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.'
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
</TABLE>
4
<PAGE>
<TABLE>
<S> <C>
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.'
Certain Tax Consequences............. For Netherlands Antilles tax purposes, subject to certain exceptions, 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 on the sale or redemption of
the New Notes. No withholding on account of any Netherlands Antilles taxes
will be 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.
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 the understanding that the New Notes are intended to
represent the same indebtedness as the Old Notes. 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 Income Tax Act (Canada) at the time of
making payment, will be exempt from Canadian withholding tax.
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.
See 'Taxation.'
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)
--------------------------------------------------
PRE-PRAXAIR ACQUISITION POST-PRAXAIR
------------------------------- ACQUISITION
--------------
YEARS ENDED DECEMBER 31, NINE MONTHS
------------------------------- ENDED
1993 1994 1995 SEPT. 30, 1996
-------- -------- -------- --------------
(DOLLARS IN THOUSANDS) (DOLLARS IN
THOUSANDS)
<S> <C> <C> <C> <C>
STATEMENT OF INCOME DATA:
Revenues.................................... $112,076 $132,666 $135,541 $114,977
Cost of services and products sold.......... 94,850 111,194 117,482 104,575
Gross profit................................ 17,226 21,472 18,059 10,402
Sales and administrative expense............ 4,388 5,339 6,900 4,464
Interest expense(3)......................... 726 3,114 4,478 3,447
Net income (loss) available to common
stockholders.............................. 10,046 10,944 4,569 845
BALANCE SHEET DATA:
Total assets(4)............................. $186,420 $197,357 $230,283 $139,810
Total debt(5)............................... 60,126 64,450 66,400 76,000
Stockholders' equity subject to
reduction(6).............................. -- -- -- --
Preferred stock............................. 11,212 18,057 18,589 18,589
Total common stockholders' equity(7)........ 95,404 86,965 91,001 (38,600)
OTHER FINANCIAL DATA AND RATIOS:(8)
Adjusted EBIT(9)............................ $ 12,755 $ 17,241 $ 16,602 $ 10,200
Depreciation and amortization............... 6,683 10,680 12,118 7,544
Adjusted EBITDA(10)......................... 19,438 27,921 28,720 17,744
Gross profit as a % of revenues............. 15.4% 16.2% 13.3% 9.0%
Effective tax rates(11)..................... 15.6% 8.6% 6.1% 23.4%
Capital expenditures(12).................... 17,147 25,440 37,138 12,479
NET CASH FLOW FROM:
Operating activities........................ $ (3,371) $ 25,706 $ 11,476 $ 11,302
Investing activities........................ (23,355) (25,353) (36,908) (12,310)
Financing activities........................ 28,404 (1,679) 26,477 187
Adjusted EBITDA/interest expense(13)........ 26.77x 8.97x 2.81x 2.20x
Total debt/Adjusted EBITDA.................. 3.09x 2.31x 2.31x N/A
<CAPTION>
PRO FORMA(2)
------------------------------------------
YEAR
ENDED
DECEMBER NINE MONTHS TWELVE MONTHS
31, ENDED ENDED
1995 SEPT. 30, 1996 SEPT. 30, 1996
-------- -------------- --------------
<S> <C> <C> <C>
STATEMENT OF INCOME DATA:
Revenues.................................... $133,156 $113,130 $143,830
Cost of services and products sold.......... 103,731 97,408 121,764
Gross profit................................ 29,425 15,722 22,066
Sales and administrative expense............ 6,900 4,464 6,410
Interest expense(3)......................... 16,237 11,954 16,013
Net income (loss) available to common
stockholders.............................. 5,415 (1,649) (1,269)
BALANCE SHEET DATA:
Total assets(4)............................. N/A $248,548 $248,548
Total debt(5)............................... N/A 135,000 135,000
Stockholders' equity subject to
reduction(6).............................. N/A 20,000 20,000
Preferred stock............................. N/A -- --
Total common stockholders' equity(7)........ N/A 78,500 78,500
OTHER FINANCIAL DATA AND RATIOS:(8)
Adjusted EBIT(9)............................ $22,203 $ 10,901 $ 15,442
Depreciation and amortization............... 6,950 7,245 9,980
Adjusted EBITDA(10)......................... 29,153 18,146 25,421
Gross profit as a % of revenues............. 22.1% 13.9% 15.3%
Effective tax rates(11)..................... 9.2% N/M N/M
Capital expenditures(12).................... 37,138 12,479 21,797
NET CASH FLOW FROM:
Operating activities........................ N/A N/A N/A
Investing activities........................ N/A N/A N/A
Financing activities........................ N/A N/A N/A
SELECTED RATIOS:
Adjusted EBITDA/interest expense(13)........ 1.80x 1.52x 1.59x
Total debt/Adjusted EBITDA.................. N/A N/A 5.31x
</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.
6
<PAGE>
(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.
(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) Adjusted EBIT, Adjusted EBITDA, Adjusted EBITDA/interest expense and Total
Debt/Adjusted EBITDA are not measures prepared in accordance with GAAP, but
rather to provide additional information related to the debt servicing
ability of the Company.
(9) Adjusted 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.
(10) Adjusted 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. Adjusted
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.
(11) 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.'
(12) 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.
(13) 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.'
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. 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
8
<PAGE>
obligations described under 'Description of Notes -- Additional Amounts;
Indemnification' below, and purchases all Notes properly tendered and not
withdrawn under such Change of Control Offer. See 'Description of
Notes -- Change of Control.'
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 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.
On a pro forma basis for the twelve months ended September 30, 1996, the
Company would have incurred a net loss of approximately $731,000. See
"Prospectus Summary -- Summary Historical and Pro Forma Combined Financial
Data." There can be no assurances that losses will not persist or that the
Company will be profitable in the future.
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,
9
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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
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.'
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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 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
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<PAGE>
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.
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
12
<PAGE>
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. Accordingly, it may not be possible
to effect service of process on Statia within the United States other than
through its appointed service of process agent. See 'Description of
Notes -- Governing Law; Consent to Jurisdiction and Service.' In addition, 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 Statia in the Netherlands
Antilles, enforcement of judgments for the payment of money obtained against
Statia 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 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. Accordingly, it may not be possible to effect service of
process on Statia Canada within the United States other than through its
appointed service of process agent. See 'Description of Notes -- Governing Law;
Consent to Jurisdiction and Service.' In addition, 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
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<PAGE>
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 fixed
exchange rate of 1.78 (in effect since December 24, 1971)) 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 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.
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<PAGE>
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>
<CAPTION>
<S> <C>
Noteholders
| Praxair/CBI
| | CHPII
| | and others
| $135 million $40 million | |
| First Mortgage Notes Statia Terminals Group N.V. ------------------------ | |
| ("Parent") Preferred Stock |
| | $61 million Preferred |
| $98.5 million | ------------------------------------------
| Common Stock(1) | and Common Stock
| Statia Terminals
| Note Co-Issuer 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
17
<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.'
19
<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 (i) an 'affiliate' of the Company
within the meaning of Rule 405 under the Securities Act or (ii) a broker-dealer
that acquired the Old Notes in a transaction other than as part of its
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 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.'
20
<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.
21
<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
22
<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
23
<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.
24
<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
By Facsimile:
Marine Midland Bank
Corporate Trust Operations
Facsimile: (212) 658-2292
Confirm by Telephone: (212) 658-5931
</TABLE>
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
25
<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 (i) an
'affiliate' of the Company within the meaning of Rule 405 under the Securities
Act or (ii) a broker-dealer that acquired the Old Notes in a transaction other
than as part of its 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 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.
26
<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 on January 1, 1995. 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.
27
<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)
Cost of services and products sold......................... 117,482 (3,625) (5,741)(3) 103,731
---------- ----------- ----------- ---------
Gross profit............................................. 18,059 1,240 10,126 29,425
Selling and administrative expenses........................ 6,900 -- -- 6,900
---------- ----------- ----------- ---------
Income from operations................................... 11,159 1,240 10,126 22,525
Interest expense........................................... 4,478 -- 11,759(4) 16,237
Other expense.............................................. 298 24 -- 322
---------- ----------- ----------- ---------
Income (loss) before income taxes........................ 6,383 1,216 (1,633) 5,966
Provision for income taxes................................. 390 161 -- 551
---------- ----------- ----------- ---------
Net income (loss)........................................ 5,993 1,055 (1,633) 5,415
Preferred stock dividends.................................. 1,424 -- (1,424)(5) --
---------- ----------- ----------- ---------
Net income available to common stockholders.............. $ 4,569 $ 1,055 $ (209) $ 5,415
---------- ----------- ----------- ---------
---------- ----------- ----------- ---------
</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) 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.
(4) 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.
(5) Adjusted to eliminate historical preferred stock dividends paid to an
affiliate of Praxair.
28
<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)
Cost of services and product sold......................... 104,575 (2,800) (4,621)(3) 97,408
---------- ----------- ------------ ---------
Gross profit............................................ 10,402 955 4,365 15,722
Selling and administrative expenses....................... 4,464 -- -- 4,464
---------- ----------- ------------ ---------
Income from operations.................................. 5,938 955 4,365 11,258
Interest expense.......................................... 3,447 8,507(4) 11,954
Other expense (income).................................... 359 (2) -- 357
---------- ----------- ------------ ---------
Income (loss) before income taxes....................... 2,132 957 (4,142) (1,053)
Provision for income taxes................................ 498 98 -- 596
---------- ----------- ------------ ---------
Net income (loss)....................................... 1,634 859 (4,142) (1,649)
Preferred stock dividends................................. 789 -- (789)(5) --
---------- ----------- ------------ ---------
Net income available to common stockholders............. $ 845 $ 859 $ (3,353) $ (1,649)
---------- ----------- ------------ ---------
---------- ----------- ------------ ---------
</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) 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.
(4) 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.
(5) Adjusted to eliminate the preferred stock dividends paid to an affiliate of
Praxair.
29
<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)
30
<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.
31
<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.
32
<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)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF INCOME DATA:
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) available to
common stockholders............ 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)
OTHER FINANCIAL DATA AND RATIOS:
(8)
Adjusted EBIT(9)................. $ 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
Adjusted EBITDA(10).............. 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(11).......... 5.9% 4.8% 15.6% 8.6% 6.1% 7.0% 23.4%
Capital expenditures(12)......... 22,316 19,223 17,147 25,440 37,138 27,820 12,479
NET CASH FLOW FROM:
Operating Activities............. $ 10,336 $23,759 $(3,371) $ 25,706 $ 11,476 $ 10,775 $ 11,302
Investing Activities............. (22,472) (24,225) (23,355) (25,353) (36,908) (27,820) (12,310)
Financing Activities............. 12,803 0 28,404 (1,679) 26,477 16,703 187
Adjusted EBITDA/interest
expense(13).................... 683.53x N/M 26.77x 8.97x 2.81x 2.75x 2.20x
Total debt/Adjusted EBITDA....... 0.56x N/M 3.09x 2.31x 2.31x N/A N/A
Ratio of earnings to fixed
charges(14).................... 10.40x 14.71x 5.01x 2.94x 1.44x 1.51x 1.17x
Capacity (in thousands of
barrels)....................... 5,600 7,459 11,590 15,387 20,387 20,387 18,738
Percentage capacity leased(15)... 85% 86% 79% 87% 76% 76% 68%
Throughput (in thousands of
barrels)(16)................... 25,436 27,109 37,591 60,630 109,805 79,301 64,312
Vessel calls(17)................. 777 829 967 1,063 973 745 728
<CAPTION>
PRO FORMA(2)
-------------------------
YEAR
ENDED
DECEMBER NINE MONTHS
31, ENDED
1995 SEPT. 30, 1996
-------- --------------
<S> <C> <C>
STATEMENT OF INCOME DATA:
Revenues......................... $133,156 $113,130
Cost of services and products
sold........................... 103,731 97,408
Gross profit..................... 29,425 15,722
Sales and administrative
expense........................ 6,900 4,464
Interest expense(3).............. 16,237 11,954
Net income (loss) available to
common stockholders............ 5,415 (1,649)
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
OTHER FINANCIAL DATA AND RATIOS:
(8)
Adjusted EBIT(9)................. $22,203 $ 10,901
Depreciation and amortization.... 6,950 7,245
Adjusted EBITDA(10).............. 29,153 18,146
Gross profit as a % of
revenues....................... 22.1% 13.9%
Effective tax rates(11).......... 9.2% N/M
Capital expenditures(12)......... 37,138 12,479
NET CASH FLOW FROM:
Operating Activities............. N/A N/A
Investing Activities............. N/A N/A
Financing Activities............. N/A N/A
SELECTED RATIOS:
Adjusted EBITDA/interest
expense(13).................... 1.80x 1.52x
Total debt/Adjusted EBITDA....... N/A N/A
Ratio of earnings to fixed
charges(14).................... 1.29x (14)
SELECTED OTHER DATA:
Capacity (in thousands of
barrels)....................... 18,738 18,738
Percentage capacity leased(15)... 79% 71%
Throughput (in thousands of
barrels)(16)................... 106,537 64,312
Vessel calls(17)................. 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
(Footnotes continued on next page)
33
<PAGE>
(Footnotes continued from previous page)
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.
(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) Adjusted EBIT, Adjusted EBITDA, Adjusted EBITDA/interest expense and Total
Debt/Adjusted EBITDA are not measures prepared in accordance with GAAP, but
rather to provide additional information related to the debt servicing
ability of the Company.
(9) Adjusted 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.
(10) Adjusted 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. Adjusted 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.
(11) 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.'
(12) 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.
(13) For purposes of this ratio, interest expense includes the First Salute
Leasing, L.P. lease payments.
(14) 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 $1,682. The pro forma ratio of earnings to fixed
charges are calculated on the same basis as the historical ratios of
earnings to fixed charges.
(15) 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.
(16) 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.
(17) 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.
34
<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. Substantially all of the
Company's transactions are denominated in U.S. dollars. 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.
35
<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 ENDED
DECEMBER 31, SEPTEMBER 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.
36
<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............ $ 9,387 73.10% $13,698 84.90% $13,206 118.30%
Canada............................................ 2,490 19.40 1,185 7.40 (522) (4.70)
U.S............................................... 961 7.50 1,250 7.70 (1,525) (13.60)
------- ------- ------- ------- ------- -------
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>
37
<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............................... $ 11,341 115.7% $ 8,648 145.6%
Canada............................................................... (506) (5.8) (1,635) (27.5%)
U.S.................................................................. (975) (9.9) (1,075) (18.1%)
-------- -------- -------- --------
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% due primarily to a
reduction in tankage leased for fuel oil and a reduction in associated
throughput volume. At Point Tupper these revenues were down $1.6 million, or
19.5% due primarily to a reduction in tankage leased for refined products and a
reduction in associated throughput volume. 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. Bunker fuel volume delivered
rose 31.8% and average selling prices rose 3.7% when comparing the nine month
periods ended September 30, 1995 and 1996. 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
38
<PAGE>
product sales were down (53.7% when comparing nine month periods), gross margins
have improved slightly.
Operating expenses were $33.6 million for the nine months ended September
30, 1996 compared to $30.5 million for the same period in 1995, an increase of
$3.1 million, or 10.2%. 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. Had Praxair's
acquisition of CBI not taken place, annualized depreciation and amortization
would have increased by approximately $3.7 million due primarily to additional
depreciation related to the St. Eustatius Crude Project.
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.
39
<PAGE>
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 charges. The percentage of capacity leased for
1995 was 90.4% 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
40
<PAGE>
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.
During 1995, the line item 'Other income (expense)' is composed primarily
of insurance deductibles related to claims resulting from the 1995 Hurricanes.
During 1994, this line item accumulates various gains realized upon final
settlements with insurance carriers and other parties, none of which is
individually significant.
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
41
<PAGE>
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. 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.
For the nine month periods ended September 30, 1995 and 1996, net cash flow
from operating activities was essentially unchanged ($10.8 million for 1995 and
$11.3 million for 1996). During the first
42
<PAGE>
nine months of 1995, cash generated from operations and financing activities was
used primarily for purchases of property and equipment aggregating $27.8
million. For the comparable period during 1996, cash generated by operations was
primarily used for purchases of property and equipment aggregating $12.5
million.
Existing indebtedness of the Company (including debt incurred during 1996
and advances from Praxair) 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 Consolidated Fixed
Charge Coverage Ratio (as defined under 'Description of Notes -- Certain
Definitions') is greater than certain minimum levels. The $17.5 million New Bank
Credit Facility bears interest at the Prime Rate (as defined under 'Description
of New Bank Credit Facility') 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.
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.
43
<PAGE>
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%
----------- ------- ------- ----------
----------- ------- ------- ----------
</TABLE>
<TABLE>
<S> <C> <C> <C> <C>
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 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,
44
<PAGE>
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.'
45
<PAGE>
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%.
46
<PAGE>
[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
47
<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.
48
<PAGE>
Terms
Term Structure of Gasoline and Distillate Markets
Spot vs. Four Months Out*
1/1/91 - 10/28/96
1991 02-Jan -2.75 10.65
03-Jan -2.58 9.11
04-Jan -2.28 8.09
07-Jan 0.73 11.96
08-Jan -1.42 10.43
09-Jan -2.19 11.50
10-Jan 0.19 13.46
11-Jan 0.63 15.26
14-Jan 6.01 22.88
15-Jan 2.14 19.16
16-Jan 4.69 23.69
17-Jan -0.96 9.46
18-Jan -1.47 9.87
21-Jan -0.38 13.86
22-Jan 0.90 14.71
23-Jan 0.80 16.15
24-Jan 0.90 16.67
25-Jan 0.82 16.47
28-Jan 1.28 15.86
29-Jan 2.50 16.93
30-Jan 4.41 17.28
31-Jan 2.98 10.14
01-Feb 3.07 10.93
04-Feb 2.27 10.36
05-Feb 2.52 12.11
06-Feb 2.94 14.39
07-Feb 3.23 15.26
08-Feb 3.32 16.05
11-Feb 3.78 19.30
12-Feb 3.47 19.05
13-Feb 3.48 15.46
14-Feb 3.59 15.25
15-Feb 2.74 13.26
19-Feb 3.04 12.06
20-Feb 3.82 15.11
21-Feb 3.46 12.23
22-Feb 3.62 11.37
25-Feb 4.90 12.91
26-Feb 7.45 14.13
27-Feb 9.25 14.94
28-Feb 8.36 4.82
01-Mar 7.80 3.74
04-Mar 9.70 3.55
05-Mar 9.95 3.86
06-Mar 10.91 3.64
07-Mar 11.03 3.31
08-Mar 10.31 3.59
11-Mar 12.21 3.32
12-Mar 11.67 3.40
13-Mar 10.76 3.71
14-Mar 9.88 3.55
15-Mar 10.48 4.10
18-Mar 10.79 4.29
19-Mar 11.40 4.52
20-Mar 12.33 4.28
21-Mar 11.47 4.66
22-Mar 10.18 4.21
25-Mar 9.60 3.82
26-Mar 9.87 3.81
27-Mar 11.81 3.80
28-Mar 10.38 2.95
01-Apr 8.20 -0.52
02-Apr 8.57 -0.41
03-Apr 7.32 -0.85
04-Apr 7.85 -0.71
05-Apr 8.52 -0.44
08-Apr 9.12 -0.60
09-Apr 8.32 -0.98
10-Apr 9.27 -0.86
11-Apr 9.22 -0.70
12-Apr 9.51 -0.91
15-Apr 9.98 -1.09
16-Apr 9.89 -1.92
17-Apr 11.08 -1.47
18-Apr 11.28 -1.27
19-Apr 10.69 -1.14
22-Apr 10.72 -0.82
23-Apr 9.56 -0.47
24-Apr 9.74 -0.68
25-Apr 9.22 -1.54
26-Apr 9.62 -1.69
29-Apr 9.32 -2.01
30-Apr 9.41 -3.36
01-May 10.53 -3.58
02-May 10.95 -3.59
03-May 11.26 -3.31
06-May 11.27 -3.49
07-May 11.21 -3.38
08-May 11.34 -3.46
09-May 11.77 -3.96
10-May 10.41 -4.24
13-May 10.43 -4.51
14-May 9.39 -4.14
15-May 8.62 -3.98
16-May 8.14 -4.10
17-May 8.10 -3.97
20-May 7.75 -3.78
21-May 8.08 -3.80
22-May 7.22 -3.56
23-May 7.03 -3.46
24-May 7.29 -3.51
28-May 7.50 -3.59
29-May 6.77 -3.74
30-May 7.69 -3.82
31-May 7.35 -4.19
03-Jun 7.22 -4.13
04-Jun 7.15 -4.34
05-Jun 6.82 -4.68
06-Jun 7.04 -4.42
07-Jun 7.18 -4.61
10-Jun 7.15 -4.99
11-Jun 7.48 -4.81
12-Jun 6.46 -5.23
13-Jun 6.29 -5.08
14-Jun 6.37 -4.61
17-Jun 6.67 -4.67
18-Jun 6.65 -4.51
19-Jun 6.26 -4.45
20-Jun 5.33 -4.17
21-Jun 5.13 -4.20
24-Jun 5.35 -4.09
25-Jun 5.43 -4.08
26-Jun 5.86 -4.25
27-Jun 6.76 -4.35
28-Jun 6.13 -4.44
01-Jul 6.55 -4.21
02-Jul 7.16 -4.27
03-Jul 6.44 -4.23
05-Jul 6.63 -4.28
08-Jul 6.81 -4.00
09-Jul 6.59 -4.18
10-Jul 7.11 -4.01
11-Jul 7.13 -3.85
12-Jul 6.86 -3.56
15-Jul 6.18 -3.78
16-Jul 5.67 -3.81
17-Jul 6.41 -3.77
18-Jul 6.34 -3.86
19-Jul 6.41 -4.03
22-Jul 6.70 -4.14
23-Jul 7.29 -4.25
24-Jul 8.12 -4.28
25-Jul 7.91 -4.11
26-Jul 7.90 -4.08
29-Jul 7.33 -4.02
30-Jul 6.05 -3.24
31-Jul 6.92 -3.10
01-Aug 7.73 -3.18
02-Aug 8.25 -3.14
05-Aug 9.21 -3.11
06-Aug 9.37 -3.14
07-Aug 9.16 -3.44
08-Aug 10.85 -3.51
09-Aug 11.38 -3.25
12-Aug 11.47 -3.23
13-Aug 10.33 -3.23
14-Aug 8.71 -3.28
15-Aug 8.74 -3.26
16-Aug 9.18 -3.10
19-Aug 8.87 -2.55
20-Aug 8.82 -2.00
21-Aug 9.33 -3.05
22-Aug 9.68 -3.03
23-Aug 9.24 -3.14
26-Aug 8.31 -3.11
27-Aug 7.72 -3.08
28-Aug 6.44 -2.97
29-Aug 3.51 -0.27
30-Aug 3.92 -0.12
03-Sep 3.61 -0.11
04-Sep 3.66 -0.58
05-Sep 3.22 -0.72
06-Sep 2.85 -0.91
09-Sep 2.90 -1.23
10-Sep 2.81 -1.22
11-Sep 3.23 -1.33
12-Sep 3.35 -1.48
13-Sep 3.09 -1.29
16-Sep 3.16 -1.13
17-Sep 3.09 -1.14
18-Sep 3.17 -1.14
19-Sep 2.54 -1.18
20-Sep 2.25 -0.98
23-Sep 2.02 -0.69
24-Sep 1.40 -0.88
25-Sep 1.63 -1.08
26-Sep 2.07 -1.21
27-Sep 1.05 2.63
30-Sep 0.53 2.55
01-Oct 0.33 2.47
02-Oct 0.69 2.49
03-Oct 1.15 2.78
04-Oct 0.47 2.64
07-Oct 0.53 2.95
08-Oct 0.69 2.87
09-Oct -0.05 3.51
10-Oct -0.30 3.39
11-Oct -0.35 3.48
14-Oct -0.52 4.38
15-Oct -0.72 3.90
16-Oct -0.19 3.81
17-Oct 0.30 4.20
18-Oct 0.93 4.11
21-Oct 0.47 4.18
22-Oct 0.80 3.91
23-Oct 0.64 3.41
24-Oct 1.13 3.89
25-Oct 1.48 3.83
28-Oct 2.14 3.51
29-Oct 2.92 3.56
30-Oct -2.76 7.35
31-Oct -3.02 7.38
01-Nov -3.23 7.68
04-Nov -2.66 8.45
05-Nov -2.24 8.64
06-Nov -2.82 7.87
07-Nov -3.44 7.73
08-Nov -3.16 7.77
11-Nov -4.01 7.18
12-Nov -4.93 6.66
13-Nov -4.33 6.40
14-Nov -3.40 6.20
15-Nov -3.32 6.73
18-Nov -2.95 5.77
19-Nov -3.51 5.33
20-Nov -2.60 4.92
21-Nov -1.80 4.96
22-Nov -2.09 4.57
25-Nov -2.40 4.62
26-Nov -4.87 7.49
27-Nov -5.10 7.31
29-Nov -4.97 7.06
02-Dec -4.89 6.17
03-Dec -5.92 5.57
04-Dec -6.38 5.35
05-Dec -6.79 4.90
06-Dec -7.04 3.34
09-Dec -7.68 2.14
10-Dec -7.79 2.23
11-Dec -7.97 2.33
12-Dec -7.90 2.73
13-Dec -7.61 3.18
16-Dec -6.87 3.57
17-Dec -6.40 3.43
18-Dec -6.49 2.63
19-Dec -6.53 1.65
20-Dec -7.32 -0.19
23-Dec -7.51 -0.02
24-Dec -6.49 1.05
26-Dec -6.70 0.70
27-Dec -6.54 0.92
30-Dec -6.11 -0.05
1992 02-Jan -5.41 -0.15
03-Jan -5.16 0.64
06-Jan -5.07 0.57
08-Jan -5.91 -0.14
09-Jan -6.66 0.10
10-Jan -6.94 0.79
13-Jan -6.79 2.56
14-Jan -6.80 1.92
15-Jan -6.80 2.12
16-Jan -6.23 2.71
17-Jan -6.04 2.52
20-Jan -5.97 2.26
21-Jan -6.20 1.78
22-Jan -6.31 1.37
23-Jan -6.37 1.96
24-Jan -6.37 2.62
27-Jan -6.24 2.66
28-Jan -6.33 1.55
29-Jan -5.98 1.95
30-Jan -5.34 0.20
31-Jan -2.91 1.12
03-Feb -2.61 1.08
04-Feb -2.76 1.26
05-Feb -2.32 1.49
06-Feb -2.07 1.74
07-Feb -2.10 2.52
10-Feb -2.86 2.58
11-Feb -3.65 2.06
12-Feb -3.14 2.17
13-Feb -3.48 1.91
14-Feb -4.57 1.15
18-Feb -4.48 0.32
19-Feb -4.87 0.60
20-Feb -5.18 0.66
21-Feb -5.39 1.01
24-Feb -5.46 0.22
25-Feb -5.40 0.04
26-Feb -4.63 -0.35
27-Feb -3.89 -0.71
28-Feb 1.38 -0.68
02-Mar 0.80 -1.38
03-Mar 0.42 -1.26
04-Mar 0.61 -0.88
05-Mar 0.32 -0.58
06-Mar -0.81 -0.81
09-Mar -1.23 -0.98
10-Mar -0.86 -0.87
11-Mar -0.45 -1.40
12-Mar -0.37 -0.82
13-Mar -0.10 -0.34
16-Mar 0.27 -0.05
17-Mar 0.75 0.39
18-Mar -0.08 -0.01
19-Mar -0.38 0.41
20-Mar -1.53 0.32
23-Mar -1.48 0.33
24-Mar -1.46 -0.01
25-Mar -1.55 -0.55
26-Mar -1.25 -0.71
27-Mar -1.07 -0.89
30-Mar 1.91 -2.48
31-Mar 2.09 -2.13
01-Apr 2.64 -1.57
02-Apr 2.62 -1.53
03-Apr 2.87 -1.20
06-Apr 3.02 -1.19
07-Apr 2.27 -1.35
08-Apr 2.06 -1.23
09-Apr 1.76 -1.33
10-Apr 1.14 -1.26
13-Apr 0.06 -1.41
14-Apr -0.32 -1.17
15-Apr 0.42 -1.03
16-Apr 1.20 -0.87
20-Apr 1.43 -1.05
21-Apr 2.23 -0.54
22-Apr 1.93 -1.21
23-Apr 1.77 -1.16
24-Apr 2.17 -1.56
27-Apr 1.86 -1.70
28-Apr 1.99 -1.04
29-Apr 5.05 -2.65
30-Apr 5.40 -2.38
01-May 5.69 -2.54
04-May 6.90 -2.44
05-May 6.75 -2.62
06-May 6.60 -2.43
07-May 6.01 -2.04
08-May 5.74 -1.93
11-May 5.58 -1.93
12-May 5.25 -2.28
13-May 4.51 -2.29
14-May 4.19 -2.59
15-May 4.65 -2.49
18-May 4.32 -2.46
19-May 3.86 -2.60
20-May 4.23 -2.93
21-May 4.39 -3.25
22-May 4.80 -3.23
26-May 4.94 -2.71
27-May 4.19 -2.89
28-May 3.51 -2.57
29-May 3.98 -2.25
01-Jun 5.33 -3.42
02-Jun 5.25 -3.40
03-Jun 6.06 -3.46
04-Jun 6.07 -3.40
05-Jun 6.18 -3.10
08-Jun 6.04 -3.19
09-Jun 5.82 -3.43
10-Jun 5.74 -3.25
11-Jun 5.10 -3.40
12-Jun 5.01 -3.35
15-Jun 4.97 -3.37
16-Jun 4.75 -3.48
17-Jun 4.44 -3.32
18-Jun 4.25 -3.29
19-Jun 4.45 -3.22
22-Jun 3.85 -3.26
23-Jun 3.66 -3.19
24-Jun 3.45 -2.68
25-Jun 2.69 -2.79
26-Jun 2.39 -2.95
29-Jun 3.29 -3.01
30-Jun 3.01 -3.29
01-Jul 3.51 -3.62
02-Jul 3.65 -3.62
06-Jul 3.04 -3.77
07-Jul 2.33 -3.98
08-Jul 1.24 -4.04
09-Jul 0.89 -3.96
10-Jul 0.60 -3.86
13-Jul 0.50 -3.70
14-Jul 1.08 -3.80
15-Jul 1.61 -3.62
16-Jul 2.55 -3.74
17-Jul 2.13 -3.70
20-Jul 2.47 -3.50
21-Jul 2.84 -3.61
22-Jul 3.10 -3.25
23-Jul 3.42 -3.06
24-Jul 4.07 -2.83
27-Jul 3.44 -2.86
28-Jul 3.34 -3.32
29-Jul 3.18 -3.11
30-Jul 2.52 -2.97
31-Jul 2.63 -3.00
03-Aug 2.83 -3.43
04-Aug 2.98 -3.52
05-Aug 2.60 -3.68
06-Aug 3.32 -3.50
07-Aug 3.33 -3.76
10-Aug 3.09 -3.50
11-Aug 3.53 -3.69
12-Aug 4.03 -3.73
13-Aug 3.87 -3.73
14-Aug 3.90 -3.73
17-Aug 4.23 -3.70
18-Aug 4.86 -3.83
19-Aug 4.47 -4.00
20-Aug 4.69 -3.76
21-Aug 4.31 -3.94
24-Aug 5.37 -3.57
25-Aug 5.32 -3.77
26-Aug 5.25 -3.67
27-Aug 5.17 -3.56
28-Aug 2.31 -1.79
31-Aug 2.54 -1.65
01-Sep 2.96 -1.33
02-Sep 3.22 -1.60
03-Sep 3.32 -1.53
04-Sep 3.17 -1.48
08-Sep 2.69 -1.20
09-Sep 2.19 -1.50
10-Sep 1.32 -1.37
11-Sep 1.41 -1.09
14-Sep 1.73 -1.12
15-Sep 1.88 -1.09
16-Sep 1.79 -0.92
17-Sep 1.68 -1.17
18-Sep 0.82 -1.13
21-Sep 0.37 -0.91
22-Sep 0.45 -0.95
23-Sep 0.14 -0.40
24-Sep 0.39 -0.64
25-Sep 0.59 -0.82
28-Sep -1.40 2.24
29-Sep -1.87 2.05
30-Sep -1.90 2.33
01-Oct -1.77 2.50
02-Oct -1.35 2.45
05-Oct -1.32 2.19
06-Oct -1.24 2.19
07-Oct -1.19 2.40
08-Oct -0.47 2.48
09-Oct -0.09 3.24
12-Oct -0.10 2.93
13-Oct -0.84 2.61
14-Oct -1.13 2.71
15-Oct -0.96 2.85
16-Oct -0.94 2.61
19-Oct -1.04 2.52
20-Oct -0.79 2.26
21-Oct -0.58 1.85
22-Oct 0.00 1.64
23-Oct 0.70 1.72
26-Oct 0.85 1.67
27-Oct 1.80 1.70
28-Oct 1.45 1.50
29-Oct -4.90 2.89
30-Oct -4.47 2.37
02-Nov -3.90 2.44
03-Nov -3.64 1.93
04-Nov -4.55 1.11
05-Nov -4.29 1.22
06-Nov -5.08 0.11
09-Nov -5.26 0.63
10-Nov -6.11 0.48
11-Nov -6.40 0.95
12-Nov -6.78 0.86
13-Nov -6.58 1.38
16-Nov -6.01 1.87
17-Nov -5.65 1.45
18-Nov -5.35 0.21
19-Nov -5.61 -0.03
20-Nov -5.05 0.07
23-Nov -5.33 -0.35
24-Nov -5.97 0.12
25-Nov -6.77 2.68
30-Nov -6.80 2.26
01-Dec -7.20 1.97
02-Dec -7.26 1.96
03-Dec -7.46 1.06
04-Dec -7.40 0.99
07-Dec -7.24 1.69
08-Dec -7.52 1.04
09-Dec -7.40 1.14
10-Dec -7.16 1.79
11-Dec -7.10 1.23
14-Dec -6.60 0.55
15-Dec -6.48 0.49
16-Dec -5.76 0.73
17-Dec -5.62 0.58
18-Dec -5.10 0.50
21-Dec -5.58 1.30
22-Dec -5.82 1.44
23-Dec -5.69 2.99
28-Dec -5.42 3.34
29-Dec -5.79 2.86
30-Dec -5.87 3.10
31-Dec -5.60 2.78
1993 04-Jan -5.48 1.70
05-Jan -5.45 1.96
06-Jan -5.50 0.87
07-Jan -5.98 0.06
08-Jan -5.92 0.18
11-Jan -6.11 0.46
12-Jan -6.21 0.22
13-Jan -6.50 -0.18
14-Jan -6.15 0.38
15-Jan -5.42 0.38
18-Jan -5.38 0.32
19-Jan -5.60 0.31
20-Jan -5.98 -0.32
21-Jan -5.63 -0.56
22-Jan -5.54 -0.87
25-Jan -4.87 -0.04
26-Jan -5.49 0.64
27-Jan -5.73 0.16
28-Jan -5.00 0.39
29-Jan -6.62 0.50
01-Feb -4.20 0.54
02-Feb -4.58 0.50
03-Feb -4.57 0.63
04-Feb -4.82 0.91
05-Feb -4.69 1.24
08-Feb -5.01 1.29
09-Feb -5.19 1.27
10-Feb -5.45 1.28
11-Feb -5.59 1.14
12-Feb -5.95 0.91
16-Feb -6.22 1.21
17-Feb -6.36 0.76
18-Feb -7.06 0.15
19-Feb -6.77 0.09
22-Feb -6.53 0.19
23-Feb -6.15 0.80
24-Feb -6.82 0.98
25-Feb -7.67 2.14
01-Mar -7.36 1.42
02-Mar -2.24 0.72
03-Mar -1.83 1.20
04-Mar -1.73 1.75
05-Mar -1.56 1.47
08-Mar -1.67 0.67
09-Mar -1.92 0.97
10-Mar -2.26 1.25
11-Mar -2.46 1.16
12-Mar -2.01 1.45
15-Mar -1.78 0.99
16-Mar -1.63 1.55
17-Mar -1.51 1.50
18-Mar -1.95 1.68
19-Mar -2.20 1.80
22-Mar -2.49 1.82
23-Mar -2.23 2.23
24-Mar -2.01 2.00
25-Mar -1.51 1.59
26-Mar -1.50 1.04
29-Mar -0.96 0.43
30-Mar -1.49 -0.50
31-Mar 1.25 -1.42
01-Apr 1.18 -1.32
02-Apr 1.01 -1.03
05-Apr 0.48 -1.17
06-Apr 0.67 -1.57
07-Apr 0.89 -1.39
08-Apr 0.68 -1.67
12-Apr 0.57 -1.57
13-Apr 0.52 -1.90
14-Apr 0.88 -1.90
15-Apr 1.07 -1.67
16-Apr 1.04 -1.63
19-Apr 1.50 -1.76
20-Apr 1.30 -2.16
21-Apr 0.74 -2.27
22-Apr 0.73 -2.40
23-Apr 0.85 -1.91
26-Apr 0.57 -2.01
27-Apr 0.59 -2.07
28-Apr 0.62 -2.28
29-Apr 1.14 -2.43
30-Apr 3.39 -3.15
03-May 3.69 -3.07
04-May 3.71 -3.00
05-May 3.86 -3.09
06-May 4.11 -3.02
07-May 3.94 -2.84
10-May 3.97 -2.51
11-May 3.71 -2.82
12-May 3.32 -3.00
13-May 2.98 -3.20
14-May 2.88 -3.56
17-May 2.71 -3.27
18-May 2.59 -3.26
19-May 2.93 -3.05
20-May 2.83 -2.77
21-May 2.80 -2.92
24-May 2.58 -3.23
25-May 2.53 -3.01
26-May 1.82 -2.96
27-May 1.52 -3.15
28-May 1.59 -3.58
01-Jun 1.62 -3.50
02-Jun 2.19 -3.59
03-Jun 1.79 -3.57
04-Jun 1.53 -3.67
07-Jun 1.44 -3.82
08-Jun 1.18 -3.86
09-Jun 0.70 -3.97
10-Jun 0.59 -3.83
11-Jun 0.65 -3.82
14-Jun 0.65 -3.93
15-Jun 0.62 -3.88
16-Jun 0.93 -3.93
17-Jun 1.20 -4.01
18-Jun 1.41 -3.75
21-Jun 1.23 -3.99
22-Jun 0.67 -3.90
23-Jun 0.78 -3.92
24-Jun 1.17 -3.94
25-Jun 1.32 -3.71
28-Jun 1.45 -3.53
29-Jun 1.17 -3.51
30-Jun 1.81 -4.11
01-Jul 1.75 -4.27
02-Jul 1.50 -4.38
06-Jul 1.61 -4.20
07-Jul 1.15 -4.37
09-Jul 1.30 -4.37
12-Jul 1.43 -4.38
13-Jul 1.52 -4.48
14-Jul 1.41 -4.52
15-Jul 1.79 -4.42
16-Jul 1.80 -4.51
19-Jul 1.76 -4.40
20-Jul 1.49 -4.44
21-Jul 1.69 -4.24
22-Jul 1.43 -4.10
23-Jul 1.55 -4.07
26-Jul 1.24 -4.19
27-Jul 1.09 -3.74
28-Jul 1.05 -3.66
29-Jul 0.41 -3.93
30-Jul 0.35 -4.13
02-Aug 1.22 -3.87
03-Aug 1.14 -3.94
04-Aug 1.30 -4.07
05-Aug 1.75 -4.06
06-Aug 2.01 -4.40
09-Aug 3.19 -4.53
10-Aug 3.04 -4.48
11-Aug 4.33 -4.15
12-Aug 4.38 -3.75
13-Aug 4.12 -3.38
16-Aug 3.69 -3.56
17-Aug 3.83 -3.59
18-Aug 2.75 -3.71
19-Aug 2.16 -3.75
20-Aug 2.27 -3.74
23-Aug 1.81 -3.67
24-Aug 1.80 -3.63
25-Aug 1.63 -3.57
26-Aug 1.17 -3.61
27-Aug 1.08 -3.45
30-Aug 0.23 -3.28
31-Aug -0.27 -3.47
01-Sep -0.37 -2.78
02-Sep -0.65 -2.43
07-Sep -1.18 -2.99
08-Sep -1.00 -3.10
09-Sep -1.26 -2.99
10-Sep -1.24 -2.95
13-Sep -1.33 -2.97
14-Sep -1.75 -2.94
15-Sep -1.73 -2.95
16-Sep -1.48 -3.01
17-Sep -1.37 -2.92
20-Sep -1.24 -2.47
21-Sep -1.20 -2.43
22-Sep -1.74 -2.41
24-Sep -2.01 -2.18
27-Sep -2.45 -2.49
28-Sep -2.24 -2.35
29-Sep -2.00 -2.22
30-Sep -2.01 -1.19
01-Oct -1.46 -1.44
04-Oct -2.29 -0.06
05-Oct -2.48 -0.14
07-Oct -2.34 -0.16
08-Oct -2.14 -0.17
11-Oct -1.53 -0.09
12-Oct -1.38 -0.20
13-Oct -1.16 -0.34
14-Oct -0.31 -0.25
15-Oct -0.30 -0.45
18-Oct -1.15 -0.67
19-Oct -1.47 -0.85
20-Oct -1.85 -0.88
21-Oct -2.07 -0.95
22-Oct -2.15 -0.93
25-Oct -2.43 -1.05
26-Oct -2.11 -0.92
27-Oct -2.21 -1.15
28-Oct -1.99 -0.84
29-Oct -2.23 -0.89
01-Nov -2.57 -0.74
02-Nov -2.86 -0.92
03-Nov -3.10 -1.53
04-Nov -3.22 -1.57
05-Nov -6.14 -0.28
08-Nov -6.26 -0.32
09-Nov -6.41 -0.53
10-Nov -6.81 -0.31
11-Nov -6.60 0.00
12-Nov -6.68 -0.05
15-Nov -6.41 -0.24
16-Nov -6.50 -0.27
17-Nov -6.33 0.10
18-Nov -6.40 0.28
19-Nov -6.38 0.32
22-Nov -6.72 0.34
23-Nov -6.83 0.88
24-Nov -7.12 0.29
29-Nov -7.48 -0.30
30-Nov -7.66 -0.32
01-Dec -7.32 -0.55
02-Dec -7.32 -1.34
03-Dec -7.65 -1.28
06-Dec -7.32 -0.87
07-Dec -7.41 -1.07
08-Dec -7.74 -1.48
09-Dec -7.78 -1.53
10-Dec -7.96 -1.50
13-Dec -8.57 -1.97
14-Dec -8.37 -2.00
15-Dec -8.00 -1.36
16-Dec -7.58 -1.10
17-Dec -7.27 -1.28
20-Dec -7.35 -1.29
21-Dec -7.02 -1.14
22-Dec -7.29 -0.93
23-Dec -7.73 -0.51
27-Dec -8.35 0.41
28-Dec -7.51 -0.06
29-Dec -7.14 0.42
30-Dec -7.12 0.28
1994 03-Jan -6.16 0.46
04-Jan -5.75 1.03
05-Jan -5.42 1.67
06-Jan -5.77 1.27
07-Jan -5.24 2.24
10-Jan -5.41 2.46
11-Jan -5.14 3.52
12-Jan -5.15 4.13
13-Jan -5.12 4.62
14-Jan -5.07 6.31
17-Jan -5.61 7.34
18-Jan -5.88 4.74
19-Jan -5.95 5.32
20-Jan -5.31 3.59
21-Jan -5.19 3.60
24-Jan -4.53 4.59
25-Jan -3.94 5.22
26-Jan -3.56 7.21
27-Jan -3.94 8.04
28-Jan -4.09 7.74
31-Jan -4.03 4.65
01-Feb -3.50 5.57
02-Feb -2.80 7.18
03-Feb -2.50 6.69
04-Feb -2.36 5.64
07-Feb -3.36 4.79
08-Feb -3.10 5.26
09-Feb -3.32 5.08
10-Feb -3.68 5.75
11-Feb -3.94 6.22
14-Feb -4.39 3.97
15-Feb -4.08 3.09
16-Feb -3.80 1.80
17-Feb -3.24 1.72
18-Feb -3.07 2.04
22-Feb -2.63 2.91
23-Feb -2.98 3.45
24-Feb -2.95 4.03
25-Feb -3.09 5.50
28-Feb -1.30 0.60
01-Mar -1.18 0.82
02-Mar -1.29 0.73
03-Mar -1.26 0.76
04-Mar -1.39 0.29
07-Mar -1.85 -0.15
08-Mar -1.78 -0.33
09-Mar -1.41 0.09
10-Mar -1.59 -0.29
11-Mar -1.36 -0.38
14-Mar -1.17 -0.48
15-Mar -0.49 -0.18
16-Mar -0.38 -0.43
17-Mar -0.40 -0.23
18-Mar -0.74 -0.02
21-Mar -0.85 0.01
22-Mar -0.53 0.24
23-Mar -0.46 0.05
24-Mar -0.56 0.43
25-Mar -0.82 1.17
28-Mar -1.16 1.38
29-Mar -0.20 -2.18
30-Mar 0.04 -2.18
31-Mar 0.56 -1.85
04-Apr 1.02 -1.62
05-Apr 0.81 -1.88
06-Apr 1.06 -1.97
07-Apr 0.92 -2.19
08-Apr 0.49 -2.08
11-Apr 0.45 -1.97
12-Apr 0.54 -1.90
13-Apr 0.60 -1.75
14-Apr 1.04 -1.51
15-Apr 1.08 -1.60
18-Apr 1.05 -1.63
19-Apr 0.59 -1.74
20-Apr 0.31 -1.62
21-Apr 0.24 -1.68
22-Apr 0.72 -1.83
25-Apr 0.92 -1.75
26-Apr 0.75 -2.01
28-Apr -0.01 -2.15
29-Apr 1.90 -3.00
02-May 2.05 -2.93
03-May 1.71 -3.00
04-May 1.66 -2.97
05-May 1.33 -2.93
06-May 1.22 -2.65
09-May 1.90 -2.53
10-May 1.53 -2.65
11-May 0.99 -2.68
12-May 1.14 -2.75
13-May 1.54 -2.67
16-May 1.72 -2.84
17-May 1.59 -2.95
18-May 1.71 -3.01
19-May 1.65 -2.93
20-May 1.84 -2.88
23-May 1.92 -2.99
24-May 1.90 -3.02
25-May 1.95 -2.95
26-May 1.86 -2.59
27-May 2.17 -2.44
31-May 2.70 -2.13
01-Jun 4.25 -3.14
02-Jun 4.21 -3.42
03-Jun 4.04 -3.30
06-Jun 3.97 -3.45
07-Jun 3.48 -3.59
08-Jun 3.17 -3.61
09-Jun 2.56 -3.55
10-Jun 2.60 -3.30
13-Jun 2.72 -3.25
14-Jun 2.69 -3.20
15-Jun 2.50 -2.92
16-Jun 2.50 -2.83
17-Jun 3.08 -2.59
20-Jun 2.84 -2.74
21-Jun 2.33 -2.94
22-Jun 2.39 -3.04
23-Jun 2.61 -2.79
24-Jun 2.60 -2.77
27-Jun 2.17 -2.90
28-Jun 2.61 -2.83
29-Jun -2.36 -3.40
30-Jun -2.63 -3.30
01-Jul -2.62 -3.20
05-Jul -2.44 -3.20
06-Jul -2.31 -3.50
07-Jul -2.97 -3.88
08-Jul -2.85 -3.94
11-Jul -2.89 -3.85
12-Jul -2.70 -3.84
13-Jul -2.63 -3.84
14-Jul -2.45 -3.76
15-Jul -2.08 -3.61
18-Jul -2.36 -3.84
19-Jul -2.25 -3.79
20-Jul -1.95 -3.60
21-Jul -1.64 -3.53
22-Jul -1.85 -3.29
25-Jul -1.05 -3.36
26-Jul 0.04 -3.34
27-Jul 0.49 -3.33
28-Jul -0.62 -3.58
29-Jul 0.58 -3.09
01-Aug 1.36 -2.76
02-Aug 1.88 -2.83
03-Aug 2.77 -2.92
04-Aug 2.74 -3.05
05-Aug 2.20 -3.88
08-Aug 2.09 -3.60
09-Aug 2.52 -3.68
10-Aug 2.03 -3.66
11-Aug 1.70 -3.53
12-Aug 0.65 -3.79
15-Aug 0.23 -3.65
16-Aug 0.35 -3.79
17-Aug 0.86 -3.41
18-Aug 1.55 -3.49
19-Aug 0.35 -3.54
22-Aug -1.43 -3.40
23-Aug -1.63 -3.58
24-Aug -3.37 -3.48
25-Aug -4.28 -3.22
26-Aug -3.48 -3.26
29-Aug -2.73 -3.04
30-Aug -3.71 -2.80
31-Aug -4.18 -2.70
01-Sep -4.48 -2.82
02-Sep -4.89 -2.72
06-Sep -4.86 -2.91
07-Sep -5.78 -2.95
08-Sep -5.18 -3.05
09-Sep -5.63 -3.06
12-Sep -5.98 -3.10
13-Sep -7.63 -3.45
14-Sep -7.96 -3.77
15-Sep -7.96 -4.22
16-Sep -8.01 -4.13
19-Sep -7.48 -3.80
20-Sep -8.02 -3.54
21-Sep -7.65 -3.87
22-Sep -7.47 -3.64
23-Sep -7.83 -3.64
26-Sep -8.72 -3.61
27-Sep -9.40 -3.55
28-Sep -9.92 -2.49
29-Sep -9.21 -2.20
30-Sep -8.76 -1.96
03-Oct -8.78 -2.21
04-Oct -9.26 -2.25
05-Oct -9.99 -2.27
06-Oct -9.54 -2.26
07-Oct -8.83 -2.12
10-Oct -8.45 -2.10
11-Oct -7.50 -2.21
12-Oct -7.50 -2.57
13-Oct -7.10 -2.72
14-Oct -7.21 -2.55
17-Oct -6.31 -2.35
18-Oct -5.88 -2.19
19-Oct -6.40 -1.76
20-Oct -5.10 -0.94
21-Oct -4.53 -1.27
24-Oct -2.49 -0.94
25-Oct -2.39 -1.13
26-Oct -0.26 -1.11
27-Oct -0.47 -1.22
28-Oct 3.17 -1.12
31-Oct 0.20 -0.20
01-Nov 0.30 0.18
02-Nov -0.42 0.23
03-Nov -0.91 0.38
04-Nov -1.38 0.19
07-Nov -2.26 0.05
08-Nov -1.05 0.18
09-Nov -2.08 0.23
10-Nov -0.98 0.23
11-Nov -0.54 0.15
14-Nov 0.17 -0.22
15-Nov 0.01 -0.50
16-Nov -0.83 -0.75
17-Nov -1.64 -0.83
18-Nov -2.06 -0.95
21-Nov -2.30 -0.78
22-Nov -2.39 -0.52
23-Nov -3.09 0.11
28-Nov -2.70 -0.02
29-Nov -2.63 0.60
30-Nov -2.69 0.30
01-Dec -2.88 -0.30
02-Dec -3.98 -0.52
05-Dec -4.13 -0.79
06-Dec -3.84 -0.55
07-Dec -3.98 -0.30
08-Dec -3.29 0.42
09-Dec -2.76 1.09
12-Dec -4.59 1.12
13-Dec -2.76 0.47
14-Dec -1.75 0.94
15-Dec -2.73 0.68
16-Dec -1.80 0.54
19-Dec -1.96 -0.23
20-Dec -2.50 -0.23
21-Dec -2.03 -0.39
22-Dec -2.26 -0.41
23-Dec -2.38 -0.37
27-Dec -3.21 0.75
28-Dec -2.64 1.00
29-Dec -2.07 1.41
30-Dec 0.00 1.83
1995 03-Jan -2.18 1.55
04-Jan -1.71 0.96
05-Jan -0.79 0.76
06-Jan -1.13 0.57
09-Jan -1.00 0.10
10-Jan -1.20 -0.18
11-Jan -0.94 -0.03
12-Jan -0.63 -0.01
13-Jan -0.45 -0.47
16-Jan 0.78 -0.31
17-Jan 0.98 -0.08
18-Jan 2.83 0.14
19-Jan 2.12 0.05
20-Jan 0.90 0.04
23-Jan 0.25 0.01
24-Jan 0.90 -0.38
25-Jan 0.40 -0.65
26-Jan 0.59 -0.58
27-Jan -0.29 -0.33
30-Jan -0.69 -0.28
31-Jan 0.63 -0.78
01-Feb 0.35 -0.39
02-Feb -0.02 0.05
03-Feb 1.15 0.59
06-Feb 1.36 0.59
07-Feb 1.34 0.73
08-Feb 0.88 0.00
09-Feb 0.57 -0.23
10-Feb 0.12 0.00
13-Feb 0.26 -0.44
14-Feb 0.25 -0.32
15-Feb 0.21 -0.63
16-Feb 1.33 -0.80
17-Feb 1.61 -0.50
21-Feb 2.09 -0.63
22-Feb 2.69 -0.52
23-Feb 2.16 -0.58
24-Feb 2.23 -0.55
27-Feb 2.32 -0.85
28-Feb 1.06 -0.92
01-Mar 1.74 -1.52
02-Mar 0.59 -1.52
03-Mar 0.52 -1.27
06-Mar 0.84 -1.60
07-Mar 1.43 -1.88
08-Mar 0.88 -2.26
09-Mar -0.20 -2.13
10-Mar -0.93 -2.03
13-Mar -0.46 -2.10
14-Mar -0.88 -2.74
15-Mar -0.06 -2.53
16-Mar 0.76 -2.32
17-Mar 0.88 -1.92
20-Mar 1.10 -2.23
21-Mar 1.04 -2.23
22-Mar 1.25 -1.93
23-Mar 0.83 -2.01
24-Mar 1.30 -1.75
27-Mar 1.75 -1.43
28-Mar 1.96 -1.54
29-Mar 2.69 -1.75
30-Mar 2.88 -2.30
31-Mar 2.95 -2.33
03-Apr 2.28 -2.25
04-Apr 3.33 -2.10
05-Apr 4.31 -2.14
06-Apr 4.60 -1.92
07-Apr 4.54 -1.67
10-Apr 4.52 -1.82
11-Apr 4.31 -1.70
12-Apr 4.92 -1.73
13-Apr 4.74 -1.54
17-Apr 4.82 -1.57
18-Apr 6.06 -1.47
19-Apr 5.70 -1.55
20-Apr 5.57 -1.31
21-Apr 5.30 -1.95
24-Apr 4.64 -1.37
25-Apr 4.94 -1.08
26-Apr 5.22 -1.06
27-Apr 6.30 -0.85
28-Apr 6.50 -0.72
01-May 7.25 -1.73
02-May 7.64 -1.48
03-May 6.92 -1.75
04-May 7.06 -1.67
05-May 7.34 -1.64
08-May 7.38 -1.76
09-May 6.62 -2.16
10-May 7.04 -1.94
11-May 7.48 -2.14
12-May 7.95 -2.04
15-May 8.58 -2.00
16-May 9.25 -1.86
17-May 9.81 -1.90
18-May 9.40 -1.78
19-May 9.54 -1.75
22-May 9.61 -1.75
23-May 9.23 -1.45
24-May 8.73 -1.62
25-May 9.79 -1.60
26-May 9.57 -2.13
30-May 8.55 -2.33
31-May 8.06 -2.93
01-Jun 5.60 -2.85
02-Jun 6.34 -2.65
05-Jun 7.29 -2.60
06-Jun 7.24 -2.80
07-Jun 7.51 -2.86
08-Jun 6.84 -2.87
09-Jun 7.01 -3.11
12-Jun 7.02 -2.87
13-Jun 6.80 -2.88
14-Jun 7.55 -2.67
15-Jun 7.67 -2.54
16-Jun 7.57 -2.74
19-Jun 7.68 -2.95
20-Jun 8.10 -2.92
21-Jun 7.41 -2.87
22-Jun 7.29 -2.82
23-Jun 6.24 -2.71
26-Jun 5.56 -2.65
27-Jun 5.65 -2.55
28-Jun 7.24 -2.43
29-Jun 4.99 -2.97
30-Jun 4.92 -2.97
05-Jul 4.48 -3.00
06-Jul 4.74 -2.84
07-Jul 4.50 -3.03
10-Jul 4.74 -2.91
11-Jul 4.38 -2.91
12-Jul 4.91 -2.85
13-Jul 4.72 -2.87
14-Jul 4.62 -2.90
17-Jul 3.87 -2.94
18-Jul 3.15 -2.92
19-Jul 2.39 -2.91
20-Jul 2.06 -3.07
21-Jul 2.08 -3.08
24-Jul 2.69 -2.99
25-Jul 2.18 -2.92
26-Jul 1.34 -2.73
27-Jul 2.09 -2.60
28-Jul 2.40 -2.50
31-Jul 2.34 -2.51
01-Aug 2.42 -2.30
02-Aug 2.52 -2.10
03-Aug 2.33 -2.33
04-Aug 2.50 -2.19
07-Aug 2.72 -2.23
08-Aug 2.81 -2.13
09-Aug 2.98 -2.20
10-Aug 3.55 -2.27
11-Aug 3.92 -2.24
14-Aug 4.19 -2.23
15-Aug 4.11 -2.07
16-Aug 3.06 -1.92
17-Aug 3.32 -1.89
18-Aug 3.25 -1.81
21-Aug 2.91 -1.70
22-Aug 2.99 -1.68
23-Aug 3.47 -1.65
24-Aug 4.42 -1.55
25-Aug 4.92 -1.62
28-Aug 4.95 -1.60
29-Aug 4.78 -1.92
30-Aug 5.69 -1.90
31-Aug 1.89 -0.70
01-Sep 2.05 -0.45
05-Sep 3.38 0.13
06-Sep 2.94 -0.06
07-Sep 2.68 -0.48
08-Sep 2.62 -0.36
11-Sep 2.52 -0.36
12-Sep 3.19 -0.40
13-Sep 2.94 -0.89
14-Sep 4.09 -0.66
15-Sep 4.08 -0.77
18-Sep 5.13 -0.63
19-Sep 4.93 -0.78
20-Sep 4.81 -1.45
21-Sep 4.12 -1.41
22-Sep 3.51 -1.43
25-Sep 3.26 -1.33
26-Sep 3.04 -1.45
27-Sep 3.21 -1.28
28-Sep 4.56 -1.03
29-Sep 1.13 0.20
02-Oct 1.75 0.35
03-Oct 1.43 0.47
04-Oct 0.42 0.28
05-Oct -0.01 0.09
06-Oct -0.23 0.12
09-Oct 0.49 0.21
10-Oct 0.45 0.15
11-Oct 0.73 0.32
12-Oct 0.31 0.27
13-Oct 0.27 0.30
16-Oct 0.53 0.23
17-Oct 0.15 0.06
18-Oct -0.07 -0.08
19-Oct -0.34 -0.01
20-Oct -0.30 0.14
23-Oct -0.32 0.13
24-Oct -0.13 0.52
25-Oct -0.34 0.71
26-Oct -0.47 0.94
27-Oct -0.44 0.94
30-Oct -0.21 1.06
31-Oct -0.04 0.92
01-Nov -2.79 2.60
02-Nov -2.30 3.12
03-Nov -2.28 3.07
06-Nov -2.27 2.81
07-Nov -2.19 2.67
08-Nov -2.32 2.83
09-Nov -2.54 3.20
10-Nov -2.82 3.22
13-Nov -3.00 3.20
14-Nov -2.77 3.27
15-Nov -2.36 3.29
16-Nov -2.35 3.50
17-Nov -1.74 3.80
20-Nov -1.15 3.79
21-Nov -0.85 3.48
22-Nov -0.03 3.57
27-Nov 0.15 3.74
28-Nov 1.05 3.54
29-Nov 2.30 3.04
30-Nov -1.73 4.04
01-Dec -2.12 4.26
04-Dec -1.89 4.98
05-Dec -1.49 5.25
06-Dec -1.61 5.69
07-Dec -1.46 6.12
08-Dec -1.05 7.08
11-Dec -0.98 7.77
12-Dec -0.47 7.57
13-Dec 1.25 8.13
14-Dec 1.39 7.50
15-Dec 3.04 8.17
18-Dec 3.18 8.90
19-Dec 2.47 9.35
20-Dec 0.75 9.86
21-Dec 0.39 10.47
22-Dec 1.34 10.17
26-Dec 1.91 10.23
27-Dec 2.71 11.62
28-Dec 1.37 10.26
29-Dec 1.32 9.40
1996 02-Jan 2.14 10.14
03-Jan 1.84 10.03
04-Jan 2.42 9.60
05-Jan 2.61 10.45
09-Jan 1.68 10.70
10-Jan 1.37 10.24
11-Jan -0.51 8.27
12-Jan -0.68 6.60
15-Jan -0.60 5.76
16-Jan -0.67 5.47
17-Jan 0.23 5.79
18-Jan 0.23 6.51
19-Jan 0.96 6.66
22-Jan 0.45 6.52
23-Jan -0.77 5.83
24-Jan -0.34 4.80
25-Jan -0.57 3.98
26-Jan -0.99 4.28
29-Jan -0.94 4.99
30-Jan -0.29 5.76
31-Jan -0.25 6.55
01-Feb -2.69 8.94
02-Feb 0.19 6.74
05-Feb -0.72 5.24
06-Feb -0.93 4.88
07-Feb -1.24 5.71
08-Feb -0.95 6.37
09-Feb -0.49 7.01
12-Feb -0.58 6.89
13-Feb -0.17 8.55
14-Feb 0.23 10.01
15-Feb 0.44 9.04
16-Feb 0.77 9.26
20-Feb 1.21 7.74
21-Feb 2.40 9.55
22-Feb 2.86 11.30
23-Feb 3.08 13.17
26-Feb 3.19 14.16
27-Feb 3.61 15.40
28-Feb 3.35 11.48
29-Feb 2.74 13.07
01-Mar 4.92 4.77
04-Mar 4.53 4.14
05-Mar 4.46 4.43
06-Mar 4.40 5.36
07-Mar 4.00 4.89
08-Mar 3.95 4.79
11-Mar 3.67 5.68
12-Mar 3.97 4.96
13-Mar 5.05 4.54
14-Mar 5.47 4.80
15-Mar 6.22 7.55
18-Mar 7.16 9.57
19-Mar 7.70 11.11
20-Mar 7.33 12.13
21-Mar 6.61 10.13
22-Mar 6.79 10.58
25-Mar 7.55 10.45
26-Mar 6.60 11.87
27-Mar 6.64 13.35
28-Mar 6.01 11.64
29-Mar 5.94 10.74
01-Apr 7.70 4.43
02-Apr 9.87 6.13
03-Apr 10.22 5.55
04-Apr 11.22 6.86
08-Apr 11.96 7.60
09-Apr 12.29 7.78
10-Apr 13.29 8.54
11-Apr 14.05 9.15
12-Apr 13.22 9.00
15-Apr 12.71 9.26
16-Apr 11.85 7.54
17-Apr 10.82 6.51
18-Apr 9.05 4.30
19-Apr 9.79 4.35
22-Apr 11.19 2.92
23-Apr 12.73 4.14
24-Apr 13.90 5.05
25-Apr 15.36 5.79
26-Apr 16.92 5.58
29-Apr 17.16 7.79
30-Apr 13.69 8.88
01-May 12.22 1.28
02-May 13.50 1.40
03-May 14.46 1.79
06-May 13.45 1.81
07-May 13.53 1.92
08-May 12.52 1.66
09-May 11.48 1.27
10-May 12.33 1.27
13-May 12.74 2.04
14-May 12.28 1.26
15-May 11.45 1.06
16-May 9.72 0.57
17-May 8.83 1.05
20-May 9.49 1.47
21-May 8.98 0.75
22-May 7.92 0.75
23-May 7.77 0.52
24-May 8.07 0.23
28-May 7.17 0.46
29-May 6.91 0.59
30-May 5.43 -0.32
31-May 5.19 -1.42
04-Jun 5.79 -1.84
05-Jun 6.09 -1.85
06-Jun 6.80 -2.02
07-Jun 7.06 -1.98
10-Jun 7.41 -2.06
11-Jun 7.00 -2.19
12-Jun 6.18 -2.20
13-Jun 5.49 -2.25
14-Jun 5.65 -2.16
17-Jun 6.20 -1.81
18-Jun 5.46 -1.66
19-Jun 4.13 -1.93
20-Jun 4.39 -1.92
21-Jun 4.72 -2.00
24-Jun 4.42 -2.03
25-Jun 3.77 -1.93
26-Jun 3.46 -1.58
27-Jun 3.96 -1.33
28-Jun 4.06 -1.10
01-Jul 6.26 -1.08
02-Jul 6.04 -1.30
03-Jul 8.38 -1.06
08-Jul 6.49 -1.44
09-Jul 6.21 -1.34
10-Jul 6.96 -1.39
11-Jul 7.93 -1.21
12-Jul 7.40 -1.32
15-Jul 8.48 -1.07
16-Jul 7.98 -1.18
17-Jul 7.63 -1.26
18-Jul 7.23 -1.17
19-Jul 6.84 -1.27
22-Jul 6.90 -1.37
23-Jul 6.94 -1.40
24-Jul 6.56 -1.13
25-Jul 6.47 -0.97
26-Jul 6.24 -1.18
29-Jul 6.07 -0.87
30-Jul 6.38 -0.84
31-Jul 6.60 -0.24
01-Aug 5.68 -0.45
02-Aug 5.97 0.13
05-Aug 5.41 0.12
06-Aug 5.64 -0.45
07-Aug 5.64 -0.28
08-Aug 5.57 -0.40
09-Aug 5.23 -0.46
12-Aug 5.73 -0.34
13-Aug 5.31 -0.37
14-Aug 5.39 0.15
15-Aug 4.94 0.00
16-Aug 5.30 0.41
19-Aug 6.13 0.57
20-Aug 5.80 0.38
21-Aug 5.27 0.27
22-Aug 5.15 0.70
23-Aug 5.02 0.66
26-Aug 5.00 0.76
27-Aug 4.98 0.95
28-Aug 4.85 1.25
29-Aug 4.75 1.76
30-Aug 4.46 2.25
03-Sep 4.28 3.02
04-Sep 4.01 2.45
05-Sep 4.86 2.70
06-Sep 4.98 3.28
09-Sep 4.34 2.95
10-Sep 3.88 3.07
11-Sep 4.20 3.49
12-Sep 3.91 3.93
13-Sep 3.40 4.05
16-Sep 2.98 3.11
17-Sep 2.98 3.25
18-Sep 2.98 3.25
19-Sep 1.77 3.67
20-Sep 1.54 3.56
23-Sep 0.51 3.54
24-Sep 1.13 4.17
25-Sep 0.87 5.66
26-Sep 1.39 5.18
27-Sep 2.20 5.09
30-Sep 1.33 5.61
01-Oct 0.87 8.07
02-Oct 0.56 9.32
03-Oct 0.83 10.36
04-Oct 1.01 10.27
07-Oct 2.43 10.69
08-Oct 2.08 9.66
09-Oct 1.76 8.24
10-Oct 1.17 6.74
11-Oct 2.11 6.62
14-Oct 2.54 7.64
15-Oct 2.33 7.04
16-Oct 1.46 6.01
17-Oct 1.68 6.02
18-Oct 2.18 6.88
21-Oct 2.07 6.48
22-Oct 2.78 5.81
23-Oct 2.91 4.63
24-Oct 3.97 4.52
25-Oct 4.37 5.00
28-Oct 5.01 4.91
Gasoline Distillate - - -
- ------------
*Markets are in contango when the lines fall below the x-axis; they are in
backwardation when they rise above the x-axis.
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.
49
<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.
SUBSIDIARIES OF THE COMPANY
Subsidiary Guarantors consist of the following entities: Statia Terminals
Corporation N.V., Statia Terminals Delaware, Inc., W.P. Company and Statia
Delaware Holdco II, Inc. are holding companies and conduct no operations. STNV
is the legal entity through which the Company operates in the Netherlands
Antilles. STNV operates a petroleum and blending terminal on the island of St.
Eustatius. See '--Information by Location--Statia Terminals N.V.--St. Eustatius,
Netherlands Antilles.' Saba Trustcompany N.V., a real estate holding company
located in the Netherlands Antilles, leases a portion of its lands to STNV.
Bicen Development Corporation N.V., a real estate holding company located in the
Netherlands Antilles, leases a portion of its lands to STNV and has made
improvements to the land where Company employees reside. Statia Laboratory
Services N.V. is a real estate holding company which owns certain rights to any
improvements made after February 1995 on a portion of land owned by STNV. Point
Tupper Marine Services Limited ('PTMS') provides spill response capabilities,
sells bunkering (the supply of fuel to marine vessels) and provides marine
services to Statia Canada. See '--Information by Location--Statia Terminals
Point Tupper, Incorporated--Point Tupper, Nova Scotia.' Statia Terminals, Inc.
('STI') provides administrative services to the operating entities. STSW owns
and operates the terminal near Brownsville, Texas. Seven Seas Steamship Company,
Inc. and Seven Seas Steamship Company (Sint Eustatius) N.V. are operated
independently and provide ship services to vessel owners in the Carribean and
on the island of St. Eustatius. Statia Tugs N.V. is a dormant company.
In addition to the Subsidiary Guarantors there are five additional
subsidiaries of the Company that are inactive, hold no assets and are in the
process of being dissolved.
50
<PAGE>
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 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.
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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 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
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Tupper Marine Services Limited, 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.
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
53
<PAGE>
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 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
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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 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.
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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 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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<PAGE>
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 million which are not covered by the Praxair agreement.
The costs represent pre-emptive capital improvements designed to mitigate or
prevent future environmental exposures and improve the overall safety of the
Company's facilities. 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
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<PAGE>
three years, all of which were reported and remediated to the satisfaction of
the appropriate agency. The 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, Richard D. Gooley, a former executive officer of the
Company, brought suit against the Company and others for breach of contract and
related actions in the 17th Judicial Circuit in and for Broward County, Florida.
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.
61
<PAGE>
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.
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.
62
<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
Jack R. Pine............................... 57 Secretary
James F. Brenner........................... 38 Vice President and Treasurer
</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>
James G. Cameron........................... 50 Director
Clarence W. Brown.......................... 47 Director
Paul R. Crissman........................... 40 Director and President
James F. Brenner........................... 38 Vice President Finance
Jack R. Pine............................... 57 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
63
<PAGE>
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.
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.
Paul R. Crissman. Mr. Crissman joined STNV in 1984 and has held safety,
environmental, and operational management positions at the Company's terminal
facilities. Mr. Crissman became Terminal Manager of Statia Canada's facility
near Port Hawkesbury, Nova Scotia, in 1992. Prior to joining STNV, Mr. Crissman
was employed for approximately four years in various positions with Paktank, a
terminalling company with a facility in the Houston, Texas, area. In December,
1996, Mr. Crissman was appointed to his present positions as a Director and
President of Statia Canada and as a Managing Director of STNV.
Clarence W. Brown. Mr. Brown joined STNV in 1993 as Administrative Manager
and was appointed Terminal Manager of STNV's facility at St. Eustatius,
Netherlands Antilles, in early 1996. In December, 1996, Mr. Brown was elected to
his present positions as a Director of Statia Canada and a Managing Director of
STNV. Prior to joining STNV, he held various management positions at the Amerada
Hess Corporation facility on St. Lucia, including General Manager of the
facility, and has more than 16 years of experience in the marine terminal
industry. Mr. Brown holds a B.S. degree in Accounting.
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
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<PAGE>
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.
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. in
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
(Footnotes continued on next page)
65
<PAGE>
(Footnotes continued from previous page)
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 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.
In addition, certain employees of the Issuers and its subsidiaries
participate in a restricted stock award program with terms substantially
similar to those described in the preceding paragraph.
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. Messrs. Cameron, Brenner and Pine are entitled to an
annual base salary of $215,000, $81,268 and $115,700, respectively. 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
agreements with Mr. Cameron continues until December 31, 2001 and is renewable
for successive three-year periods thereafter. The employment agreements with
Messrs. Brenner and Pine continue 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.
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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>
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%.
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<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 plus .50% per
annum. The Prime Rate is defined as 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. As of February 6, 1997 the Prime
Rate is 8.75%. 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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<PAGE>
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 fully and 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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<PAGE>
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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<PAGE>
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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<PAGE>
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. Any Change of
Control Offer will, to the extent applicable, comply with the securities laws,
including Rule 14e-1 promulgated under the Exchange Act.
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
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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 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.
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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
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. As set forth above, a
Change of Control can occur in certain circumstances upon a sale of all or
substantially all of the assets of Statia or Parent. In connection therewith,
the phrase 'all or substantially all' as used in the Indenture (including in the
definition of 'Change of Control') varies according to the facts and
circumstances of the subject transaction, has no clearly established meaning
under New York law (which governs the Indenture) and is subject to judicial
interpretation. Accordingly, in certain circumstances there may be a degree of
uncertainty in ascertaining whether a particular transaction would involve a
disposition of 'all or substantially all' of the assets of a person and
therefore it may be unclear as to whether a Change of Control has occurred and
whether the Notes are subject to a Change of Control Offer.
'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,
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(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
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 describes
the material Canadian federal income tax consequences to a holder of the Old
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.
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
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<PAGE>
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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<PAGE>
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.
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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, or (ii) a broker-dealer that acquired the Old Notes in a
transaction other than as part of its 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
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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.
107
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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>
108
<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>
109
<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................................................. 12,029 14,127 6,383
Provision for income taxes................................................... 1,873 1,219 390
-------- -------- --------
Net income................................................................. 10,156 12,908 5,993
Preferred stock dividends.................................................... 110 1,964 1,424
-------- -------- --------
Net income available to common stockholders................................ 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 preferred stock........................................................ 11,200 7,501 --
Increase (decrease) in advances from CBI....................................... (1,651) 8,335 25,898
Bank borrowings................................................................ 18,965 10,468 5,552
Bank repayments................................................................ 0 (6,144) (3,600)
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.
Substantially all of the Company's transactions are denominated in U.S. dollars.
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.
OTHER INCOME (EXPENSE)
Other income (expense) includes miscellaneous, non-operating items. In
1994, other income (expense) included non-recurring gains realized upon final
settlements with insurance carriers and other parties, none of which were
individually significant.
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.
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
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)
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 interest
rate swap agreement is intended to qualify as a hedge against variable debt
borrowings. The Company does not generally use financial instruments for
speculative investment or trading purposes. Additionally, the Company is not a
party to leveraged derivatives. If the Company did not have the interest rate
swap agreement, its exposure to these risks would increase. 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 at the option of either the issuer or the holder. 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>
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>
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)
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 and expire in varying amounts
after seven year periods through 2002.
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.
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.
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)
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, results of
operations or net cash flows.
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, results of operations or net cash flows.
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. In addition, corporate expenses have
been allocated to the various geographic regions.
(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................................................................... 5,199 1,634
Preferred stock dividends...................................................... 1,098 789
------------- -------------
Net income available to common stockholders.................................. 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................................................... 1,400 (66,400)
Repayment of bank borrowings...................................... -- --
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
The accompanying unaudited combined financial statements for Statia
Terminals, Inc. and its Subsidiaries and Affiliates (the Company) include all
adjustments necessary for a fair presentation of the results for the interim
periods presented. These adjustments consist of only normal and recurring
adjustments. The results of operations for the interim periods are not
necessarily indicative of results of operations for the full year. These
unaudited interim combined financial statements should be read in conjunction
with the full year 1995, 1994 and 1993 combined financial statements and notes
thereto included elsewhere in this registration statement.
ORGANIZATION AND OPERATIONS
The Company 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 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.
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)
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 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.
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)
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.
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. These
costs represent pre-emptive capital improvements designed to mitigate or prevent
future environmental exposures, and improve the overall safety of the
facilities. 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, results of operations or net cash flows.
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.............................................. 8,905 14,363 12,574
Provision for income taxes................................................... (281) (281) (281)
-------- -------- --------
Net income.............................................................. 8,624 14,082 12,293
Preferred stock dividends.................................................... -- (960) --
-------- -------- --------
Net income available to common stockholders............................. 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 Corporation 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, results of
operations or net cash flows.
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, results of operations or net cash flows.
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
F-28
<PAGE>
STATIA TERMINALS N.V.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
DECEMBER 31, 1993, 1994 AND 1995
(DOLLARS IN THOUSANDS)
and results of operations. Any environmental expenditures related to cleanup or
remediation efforts are expensed when amounts can be reasonably estimated.
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>
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.............................................. 55 (1,607) (4,960)
Provision for income taxes....................................................... 114 156 155
------- ------- --------
Net income (loss).............................................................. (59) (1,763) (5,115)
Preferred stock dividends........................................................ 110 1,004 1,424
------- ------- --------
Net income (loss) available to common stockholders............................. (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:
Purchase 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 stock......................................................... -- 1,201 10,000
Sale of preferred stock...................................................... 11,200 7,501 --
Redemption of Preferred Stock................................................ (5,000) -- --
Bank borrowings.............................................................. 18,966 4,324 1,950
Repayment of bank borrowings................................................. -- -- --
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
-------- -------- -------
-------- -------- -------
(5,000) -- --
</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. Substantially all of the Company's
transactions are denominated in U.S. dollars.
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 interest
rate swap agreement is intended to qualify as a hedge against variable debt
borrowings. The Company does not generally use financial instruments for
speculative investments or trading purposes. Additionally, the Company is not a
party to leveraged derivatives. If the Company did not have the interest rate
swap agreement, its exposure to interest rate variability would increase. 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 at the option of either the issuer or the holder. 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, and expire in
varying amounts after seven years through 2002.
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.
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)
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, results of operations or net cash flows.
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. These
costs represent pre-emptive capital improvements designed to mitigate or prevent
future environmental exposures and improve the overall safety of the Company's
facilities. 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, results of operations or net cash flows.
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>
<CAPTION>
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>
<CAPTION>
ASSETS:
<S> <C>
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................................ 16
Parent Capital Structure........................ 17
Use of Proceeds of the New Notes................ 19
Pro Forma Capitalization........................ 19
The Exchange Offer.............................. 19
Unaudited Pro Forma Combined
Financial Data................................ 27
Selected Historical and Pro Forma Combined
Financial Data................................ 32
Management's Discussion and Analysis of
Financial Condition and Results of
Operations.................................... 35
Industry........................................ 46
Business........................................ 50
Management...................................... 63
Security Ownership.............................. 67
Certain Relationships and
Related Transactions.......................... 68
Description of New Bank Credit Facility......... 69
Description of Notes............................ 70
Taxation........................................ 102
Plan of Distribution............................ 106
Experts......................................... 106
Legal Matters................................... 107
Glossary........................................ 108
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).
*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).
</TABLE>
II-1
<PAGE>
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.--(CONTINUED)
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
*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.
8.1 -- Opinion of White & Case regarding certain tax matters (contained in the opinion filed as Exhibit
5.1 hereto).
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.
</TABLE>
II-2
<PAGE>
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.--(CONTINUED)
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
+10.1 -- Marine Fuel Agreement, dated as of May 6, 1993 ('Marine Fuel Agreement').
+10.2 -- Amendment to, inter alia, the Marine Fuel Agreement, dated as of January 1, 1996.
+10.3 -- Extension to the Marine Fuel Agreement dated as of December 27, 1996.
+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).
-- Intentionally omitted.
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.
*23.11 -- Consent of Stalsby/Wilson.
#*24.1 -- Power of Attorney.
*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.
</TABLE>
------------------
* Previously filed.
+ Subject to confidentiality treatment under and to be filed by amendment.
# See also pages II-5 to II-16, II-19 to II-20 and II-22.
II-3
<PAGE>
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.
(d) The undersigned registrants hereby undertake:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the Registration
Statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if
the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the
Registrant pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 that are incorporated by reference in the Registration
Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new Registration Statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(4) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the Registrant's annual report
pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934
(and, where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Securities Exchange Act of 1934)
that is incorporated by reference in this Registration Statement shall be
deemed to be a new Registration Statement relating to the securities
offered herein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused Amendment No. 1 to 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
February 10, 1997.
STATIA TERMINALS INTERNATIONAL N.V.
By: *
_______________________________
Name: David B. Pittaway
Title: Managing Director
By: *
_______________________________
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, Amendment No. 1
to this Registration Statement has been signed by the following persons in the
capacities indicated on February 10, 1997.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- -------------------------------------------------------- --------------------------------------------------------
<S> <C>
* Managing Director
----------------------------- (Principal Executive Officer)
David B. Pittaway
* Managing Director
-----------------------------
Justin B. Wender
* Managing Director
----------------------------- (Principal Financial and Accounting Officer)
James G. Cameron
* Managing Director
-----------------------------
John K. Castle
/s/ James F. Brenner Vice President and Treasurer
-----------------------------
James F. Brenner
</TABLE>
II-5
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE
- -------------------------------------------------------- --------------------------------------------------------
<S> <C>
/s/ Jack R. Pine Secretary
-----------------------------
Jack R. Pine
*By: /s/ James F. Brenner
--------------------------------------
James F. Brenner
Attorney-in-Fact
</TABLE>
II-6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused Amendment No. 1 to 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 February 10, 1997.
STATIA TERMINALS CANADA, INCORPORATED
By: /s/ Paul R. Crissman
____________________________________
Name: Paul R. Crissman
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, Amendment No. 1
to this Registration Statement has been signed by the following persons in the
capacities indicated on February 10, 1997.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ------------------------------------------------------ ------------------------------------------------------
<S> <C>
/s/ James G. Cameron Director
-----------------------------
James G. Cameron
/s/ Clarence W. Brown Director
-----------------------------
Clarence W. Brown
/s/ Paul R. Crissman Director and President
----------------------------- (Principal Executive Officer)
Paul R. Crissman
/s/ James F. Brenner Vice President Finance
----------------------------- (Principal Financial and Accounting Officer)
James F. Brenner
/s/ Jack R. Pine Secretary
-----------------------------
Jack R. Pine
*By: /s/ James F. Brenner
--------------------------------------
James F. Brenner
Attorney-in-Fact
</TABLE>
II-7
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused Amendment No. 1 to 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 February 10, 1997.
STATIA TERMINALS CORPORATION N.V.
By: /s/ James G. Cameron
____________________________________
Name: James G. Cameron
Title: Managing Director
By: /s/ James F. Brenner
____________________________________
Name: James F. Brenner
Title: Vice President and Treasurer
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, Amendment No. 1
to this Registration Statement has been signed by the following persons in the
capacities indicated on February 10, 1997.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ------------------------------------------------------ ------------------------------------------------------
<S> <C>
/s/ James G. Cameron Managing Director
----------------------------- (Principal Executive Officer)
James G. Cameron
/s/ Clarence W. Brown
----------------------------- Managing Director
Clarence W. Brown
/s/ Paul R. Crissman
----------------------------- Managing Director
Paul R. Crissman
/s/ James F. Brenner Vice President & Treasurer
----------------------------- (Principal Financial and Accounting Officer)
James F. Brenner
/s/ Jack R. Pine Secretary
-----------------------------
Jack R. Pine
</TABLE>
II-8
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused Amendment No. 1 to 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 February 10, 1997.
STATIA TERMINALS DELAWARE, 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, Amendment No. 1
to this Registration Statement has been signed by the following persons in the
capacities indicated on February 10, 1997.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ------------------------------------------------------ ------------------------------------------------------
<S> <C>
/s/ James G. Cameron Director and President
----------------------------- (Principal Executive Officer)
James G. Cameron
/s/ Thomas M. Thompson Jr. Director and Vice President
-----------------------------
Thomas M. Thompson Jr.
/s/ Robert R. Russo Vice President
-----------------------------
Robert R. Russo
/s/ James F. Brenner Vice President and Treasurer
----------------------------- (Principal Financial and Accounting Officer)
James F. Brenner
/s/ Jack R. Pine Secretary
-----------------------------
Jack R. Pine
</TABLE>
II-9
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused Amendment No. 1 to 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 February 10, 1997.
STATIA DELAWARE HOLDCO II, 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, Amendment No. 1
to this Registration Statement has been signed by the following persons in the
capacities indicated on February 10, 1997.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ------------------------------------------------------ ------------------------------------------------------
<S> <C>
/s/ James G. Cameron Director and President
----------------------------- (Principal Executive Officer)
James G. Cameron
/s/ Thomas M. Thompson, Jr. Director and Vice President
-----------------------------
Thomas M. Thompson, Jr.
/s/ Robert F. Russo Vice President
-----------------------------
Robert R. Russo
/s/ James F. Brenner Vice President and Treasurer
----------------------------- (Principal Financial and Accounting Officer)
James F. Brenner
/s/ Jack R. Pine Secretary
-----------------------------
Jack R. Pine
</TABLE>
II-10
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused Amendment No. 1 to 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 February 10, 1997.
STATIA TERMINALS N.V.
By: /s/ Paul R. Crissman
__________________________________
Name: Paul R. Crissman
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, Amendment No. 1
to this Registration Statement has been signed by the following persons in the
capacities indicated on February 10, 1997.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ------------------------------------------------------ ------------------------------------------------------
<S> <C>
/s/ Paul R. Crissman Managing Director
----------------------------- (Principal Executive Officer)
Paul R. Crissman
/s/ Clarence W. Brown Managing Director and Secretary
-----------------------------
Clarence W. Brown
/s/ James F. Brenner Vice President and Treasurer
----------------------------- (Principal Financial and Accounting Officer)
James F. Brenner
</TABLE>
II-11
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused Amendment No. 1 to 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 February 10, 1997.
SABA TRUSTCOMPANY N.V.
By: /s/ Paul R. Crissman
__________________________________
Name: Paul R. Crissman
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, Amendment No. 1
to this Registration Statement has been signed by the following persons in the
capacities indicated on February 10, 1997.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ------------------------------------------------------ ------------------------------------------------------
<S> <C>
/s/ Paul R. Crissman Managing Director
----------------------------- (Principal Executive Officer)
Paul R. Crissman
/s/ Clarence W. Brown Managing Director and Secretary
-----------------------------
Clarence W. Brown
/s/ James F. Brenner Vice President and Treasurer
----------------------------- (Principal Financial and Accounting Officer)
James F. Brenner
</TABLE>
II-12
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused Amendment No. 1 to 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 February 10, 1997.
BICEN DEVELOPMENT CORPORATION N.V.
By: /s/ Paul R. Crissman
__________________________________
Name: Paul R. Crissman
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, Amendment No. 1
to this Registration Statement has been signed by the following persons in the
capacities indicated on February 10, 1997.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ------------------------------------------------------ ------------------------------------------------------
<S> <C>
/s/ Paul R. Crissman Managing Director
----------------------------- (Principal Executive Officer)
Paul R. Crissman
/s/ Clarence W. Brown Managing Director and Secretary
-----------------------------
Clarence W. Brown
/s/ James F. Brenner Vice President and Treasurer
----------------------------- (Principal Financial and Accounting Officer)
James F. Brenner
</TABLE>
II-13
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused Amendment No. 1 to 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 February 10, 1997.
SEVEN SEAS STEAMSHIP COMPANY
(SINT EUSTATIUS) N.V.
By: /s/ John D. Franklin
__________________________________
Name: John D. Franklin
Title: 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, Amendment No. 1
to this Registration Statement has been signed by the following persons in the
capacities indicated on February 10, 1997.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ------------------------------------------------------ ------------------------------------------------------
<S> <C>
Covenant Managers N.V. Managing Director
By: *
-----------------------------
Name: Lucius A. Hailey
Title: Managing Director
Treasurer and Assistant Secretary
/s/ Victor M. Lopez
----------------------------- (Principal Executive, Financial and Accounting
Victor M. Lopez Officer)
/s/ Jack R. Pine Secretary
-----------------------------
Jack R. Pine
*By: /s/ James F. Brenner
--------------------------------------
James F. Brenner
Attorney-in-Fact
</TABLE>
II-14
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused Amendment No. 1 to 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 February 10, 1997.
STATIA LABORATORY SERVICES N.V.
By: *
__________________________________
Name: Paul R. Crissman
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, Amendment No. 1
to this Registration Statement has been signed by the following persons in the
capacities indicated on February 10, 1997.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ------------------------------------------------------ ------------------------------------------------------
<S> <C>
/s/ Paul R. Crissman Managing Director
----------------------------- (Principal Executive, Officer)
Paul R. Crissman
/s/ Clarence W. Brown Managing Director and Secretary
-----------------------------
Clarence W. Brown
/s/ James F. Brenner Vice President & Treasurer
----------------------------- (Principal Financial and Accounting Officer)
James F. Brenner
</TABLE>
II-15
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused Amendment No. 1 to 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 February 10, 1997.
STATIA TERMINALS, INC.
By: *
__________________________________
Name: James G. Cameron
Title: Director, Chairman of the
Board
and President
Pursuant to the requirements of the Securities Act of 1933, Amendment No. 1
to this Registration Statement has been signed by the following persons in the
capacities indicated on February 10, 1997.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ------------------------------------------------------ ------------------------------------------------------
<S> <C>
* Director, Chairman of the Board and President
----------------------------- (Principial Executive Officer)
James G. Cameron
* Director and Executive Vice President
-----------------------------
Thomas M. Thompson, Jr.
* Director and Senior Vice President
-----------------------------
Robert R. Russo
* Senior Vice President, General Counsel and Secretary
-----------------------------
Jack R. Pine
* Vice President--Marine Fuel Sales
-----------------------------
John D. Franklin
* Vice President--Terminal Operations
-----------------------------
James K. Livingston
/s/ James F. Brenner Vice President--Finance, Assistant Secretary
----------------------------- and Treasurer
James F. Brenner (Principal Financial and Accounting Officer)
By: /s/ James F. Brenner
--------------------------------------
James F. Brenner
Attorney-in-Fact
</TABLE>
II-16
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused Amendment No. 1 to 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 February 10, 1997.
STATIA TERMINALS SOUTHWEST, INC.
By: *
__________________________________
Name: James G. Cameron
Title: Director and President
Pursuant to the requirements of the Securities Act of 1933, Amendment No. 1
to this Registration Statement has been signed by the following persons in the
capacities indicated on February 10, 1997.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ------------------------------------------------------ ------------------------------------------------------
<S> <C>
* Director and President
----------------------------- (Principial Executive Officer)
James G. Cameron
* Director and Executive Vice President
-----------------------------
Thomas M. Thompson, Jr.
* Director and Senior Vice President--Supply/Operations
-----------------------------
Robert R. Russo
* Senior Vice President, General Counsel and Secretary
-----------------------------
Jack R. Pine
* Vice President--Terminal Operations
-----------------------------
James K. Livingston
/s/ James F. Brenner Vice President--Finance, Assistant
----------------------------- Secretary and Treasurer
James F. Brenner (Principal Financial and Accounting Officer)
*By: /s/ James F. Brenner
------------------------------------
James F. Brenner
Attorney-in-Fact
</TABLE>
II-17
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused Amendment No. 1 to 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 February 10, 1997.
W.P. COMPANY, INC.
By: *
__________________________________
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, Amendment No. 1
to this Registration Statement has been signed by the following persons in the
capacities indicated on February 10, 1997.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ------------------------------------------------------ ------------------------------------------------------
<S> <C>
* Director and President
----------------------------- (Principal Executive Officer)
James G. Cameron
/s/ Thomas M. Thompson, Jr. Director and Vice President
-----------------------------
Thomas M. Thompson, Jr.
* Director and Vice President
-----------------------------
Robert R. Russo
/s/ James F. Brenner Vice President--Finance and Assistant Secretary
----------------------------- (Principal Financial and Accounting Officer)
James F. Brenner
/s/ Jack R. Pine Secretary
-----------------------------
Jack R. Pine
*By: /s/ James F. Brenner
------------------------------------
James F. Brenner
Attorney-in-Fact
</TABLE>
II-18
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused Amendment No. 1 to 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 February 10, 1997.
SEVEN SEAS STEAMSHIP COMPANY, INC.
By: /s/ John D. Franklin
__________________________________
Name: John D. Franklin
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, Amendment No. 1
to this Registration Statement has been signed by the following persons in the
capacities indicated on February 10, 1997.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ------------------------------------------------------ ------------------------------------------------------
<S> <C>
* Director and President
----------------------------- (Principal Executive Officer)
John D. Franklin
* Vice President
-----------------------------
F.A. Calderon
* Vice President
-----------------------------
G.W. Pieters
* Treasurer and Assistant Secretary
----------------------------- (Principal Financial and Accounting Officer)
Victor M. Lopez
/s/ Susan M. Mosteller Secretary
-----------------------------
Susan M. Mosteller
*By: /s/ James R. Brenner
------------------------------------
James F. Brenner
Attorney-in-Fact
</TABLE>
II-19
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused Amendment No. 1 to 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 February 10, 1997.
STATIA TUGS N.V.
By: *
__________________________________
Name: James G. Cameron
Title: Managing Director
Pursuant to the requirements of the Securities Act of 1933, Amendment No. 1
to this Registration Statement has been signed by the following persons in the
capacities indicated on February 10, 1997.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ------------------------------------------------------ ------------------------------------------------------
<S> <C>
* Managing Director
----------------------------- (Principal Executive,
James G. Cameron Financial and Accounting Officer)
*By: /s/ James F. Brenner
------------------------------------
James F. Brenner
Attorney-in-fact
</TABLE>
II-20
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused Amendment No. 1 to 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 February 10, 1997.
POINT TUPPER MARINE SERVICES LIMITED
By: *
__________________________________
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, Amendment No. 1
to this Registration Statement has been signed by the following persons in the
capacities indicated on February 10, 1997.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ------------------------------------------------------ ------------------------------------------------------
<S> <C>
* Director
-----------------------------
James G. Cameron
/s/ Clarence W. Brown Director
-----------------------------
Clarence W. Brown
* President
----------------------------- (Principal Executive Officer)
Robert L. Potter
/s/ James F. Brenner Vice President--Finance, Treasurer
----------------------------- and Assistant Secretary
James F. Brenner (Principal Financial and Accounting Officer)
* Secretary
-----------------------------
Jack R. Pine
*By: /s/ James F. Brenner
------------------------------------
James F. Brenner
Attorney-in-Fact
</TABLE>
II-21
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION OF EXHIBIT PAGE
- ------ ------------------------------------------------------------------------------------------- ------------
<S> <C> <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).
*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
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION OF EXHIBIT PAGE
- ------ ------------------------------------------------------------------------------------------- ------------
<S> <C> <C> <C>
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.
8.1 -- Opinion of White & Case regarding certain tax matters (contained in the opinion filed
as Exhibit 5.1 hereto).
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 -- Marine Fuel Agreement, dated as of May 6, 1993 ('Marine Fuel Agreement').
+10.2 -- Amendment to, inter alia, the Marine Fuel Agreement, dated as of January 1, 1996.
+10.3 -- Extension to the Marine Fuel Agreement dated as of December 27, 1996.
+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.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION OF EXHIBIT PAGE
- ------ ------------------------------------------------------------------------------------------- ------------
<S> <C> <C> <C>
*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 -- Intentionally omitted.
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.
*23.11 -- Consent of Stalsby/Wilson.
#*24.1 -- Power of Attorney
*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.
</TABLE>
- ------------------
* Previously filed.
+ Subject to confidentiality treatment under and to be filed by amendment.
# See also pages II-5 to II-16, II-19 to II-20 and II-22.
<PAGE>
EXHIBIT 5.1
February 10, 1997
Statia Terminals International N.V.
Statia Terminals Canada, Incorporated
and the Subsidiary Guarantors
c/o Statia Terminals, Inc.
800 Fairway Drive
Suite 295
Deerfield Beach, FL 33441
Ladies and Gentlemen:
We have acted as special counsel to each of Statia Terminals International
N.V., a Netherlands Antilles corporation ("Statia"), Statia Terminals Canada
Incorporated, a corporation organized under the federal laws of Canada ("Statia
Canada" and together with Statia, the "Issuers"), Statia Terminals N.V., a
Netherlands Antilles corporation ("STNV"), Saba Trustcompany N.V., a Netherlands
Antilles corporation ("Saba"), Bicen Development Corporation N.V., a Netherlands
Antilles Corporation ("Bicen"), Point Tupper Marine Services Limited, a Canadian
corporation ("PTMS"), Statia Terminals Delaware, Inc., a Delaware corporation
("Statia Delaware"), Statia Delaware Holdco II, Inc. ("Holdco"), Statia
Terminals Inc., a Delaware corporation ("STI"), Statia Terminals Southwest,
Inc., a Texas corporation ("STS"), W.P. Company, Inc., a Delaware corporation
("WPCo"), Seven Seas Steamship Company, Inc., a Florida corporation ("Seven
Seas"), Seven Seas Steamship (Sint Eustatius) N.V., a Netherlands Antilles
corporation ("Seven Seas N.V."), Statia Laboratory Services N.V., a Netherlands
Antilles corporation ("Statia Lab"), Statia Tugs N.V., a Netherlands Antilles
<PAGE>
Statia Terminals International N.V.
Statia Terminals Canada, Incorporated
Page 2
corporation ("Statia Tugs") and Statia Terminals Corporation N.V., a Netherlands
Antilles corporation ("STCNV," and together with STNV, Saba, Bicen, PTMS, Statia
Delaware, Holdco, STI, STS, WPCo., Seven Seas, Seven Seas N.V., Statia Lab and
Statia Tugs, collectively, the "Subsidiary Guarantors"; STNV, Saba, Bicen, PTMS,
Seven Seas N.V., Statia Lab, Statia Tugs and STCNV being hereinafter referred to
collectively as the "Foreign Subsidiary Guarantors"), in connection with the
Registration Statement on Form S-4 (the "Registration Statement"), to be filed
with the Securities Exchange Commission in connection with the registration
under the Securities Act of 1933, as amended, of $135 million aggregate
principal amount of 11 3/4% First Mortgage Notes due 2003, Series B of the
Issuers (the "New Notes") and the guarantees of the New Notes by the Subsidiary
Guarantors (the "New Guarantees") to be offered and issued by the Issuers, under
an Indenture dated as of November 27, 1996 among the Issuers, the Subsidiary
Guarantors and Marine Midland Bank, as Trustee.
Based upon the foregoing, we are of the opinion that:
1. Assuming that the issuance of the New Notes has been duly and
validly authorized by each of the Issuers, and when the New Notes have been
duly executed and delivered by each of the Issuers, the New Notes will be
legally valid and binding obligations of the Issuers, except as the
enforceability thereof may be limited by bankruptcy, insolvency,
reorganization or other similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles (regardless
of whether the issue of enforeceability is considered in a proceeding in
equity or at law).
2. Assuming that the issuance of the New Guarantees has been duly and
validly authorized by each of the Foreign Subsidiary Guarantors, and when
the New Guarantees have been duly executed and delivered by each of the
Subsidiary Guarantors, the New Guarantees will be legally valid and binding
obligations of the Subsidiary Guarantors, except as the enforceability
thereof may be limited by bankruptcy, insolvency, reorganization or other
similar laws affecting the enforcement of creditors' rights generally and
by general equitable principles (regardless of whether the issue of
enforceability is considered in a proceeding in equity or at law).
<PAGE>
Statia Terminals International N.V.
Statia Terminals Canada, Incorporated
Page 3
3. Subject to the assumptions and limitations contained therein, we
hereby confirm our opinion set forth in the Prospectus under the heading
"U.S. Federal Income Taxation."
The foregoing opinions are based upon the laws of the United States
(including the Internal Revenue Code of 1986, as amended), the Treasury
regulations issued thereunder, the administrative and judicial interpretations
thereof, in each case as in effect on the date hereof. All of the foregoing are
subject to change, which change could apply retroactively and could adversely
affect such opinions.
We hereby consent to the filing with the Securities and Exchange
Commission of this opinion as an exhibit to the Registration Statement and to
the reference to this firm under the headings, "Legal Matters" and "U.S. Federal
Income Taxation," in the Prospectus which is part of the Registration Statement.
In giving such consent, we do not hereby admit that we are in the category of
persons whose consent is required under Section 7 of the Securities Act.
Very truly yours,
White & Case
JWE:SBK:RLHF
<PAGE>
Statia Terminals International N.V.
Tumbledown Dick Bay
St. Eustatius, Netherlands Antilles
The Subsidiary Guarantors (as defined below)
Tumbledown Dick Bay/Jeems No. 4
St. Eustatius, Netherlands Antilles
February 10, 1997
Re: Statia Terminals International N.V.
The Subsidiary Guarantors
Dear Sirs:
We have acted as special counsel on matters of Netherlands Antilles law to
Statia Terminals International N.V., a company organized and existing under the
laws of the Netherlands Antilles ("Statia") and the Subsidiary Guarantors, in
connection with, among other things, (i) that certain Registration Statement on
Form S-4 (the "Registration Statement"), to be filed with the Securities
Exchange Commission in connection with the registration under the United States
Securities Act of 1933, as amended, by Statia, among others, of an aggregate of
$135,000,000 principal amount of 11 3/4% Series B First Mortgage Notes due 2003
(the "New Notes"), and (ii) that certain Guaranty of the New Notes (the
"Guaranty," and together, the "Guarantees"), executed by the Subsidiary
Guarantors, and as attached to the Indenture, dated as of November 27, 1996
among Statia, Statia Terminals Canada, Incorporated (together, the "Issuers"),
the Subsidiary Guarantors (as defined in the Indenture) and Marine Midland Bank
(the "Indenture"), and (iii) that certain Registration Rights Agreement, dated
as of November 27, 1996 (the "Registration Rights Agreement"), among the
Issuers, the Subsidiary Guarantors and Dillon, Read & Co. Inc. The documents
referred to above under (i) through (iii) are collectively referred to as the
Documents.
In rendering this opinion, we have examined and relied upon the following
documents in photostatic form or otherwise:
<PAGE>
-2-
(1) a copy of each of the Documents;
(2) a copy of the 11 3/4% Series A First Mortgage Notes due 2003 (the "Old
Notes", and together with the New Notes, the "Notes"), and a form of
the New Notes, as well as Specimen Certificates of those certain New
Notes upon the exchange, pursuant to and under the terms of the
Registration Rights Agreement (as defined below) of the Notes;
(3) a photostatic copy of (i) an excerpt dated November 27, 1996 of the
registration of Statia (the "Statia Excerpt"), and (ii) an excerpt of
each of Statia Terminals Corporation N.V., Statia Terminals N.V., Saba
Trustcompany N.V., Bicen Development Corporation N.V., Seven Seas
Steamship Company (Sint Eustatius) N.V., Statia Laboratory Services
N.V. and Statia Tugs N.V., each a Netherlands Antilles company and
affiliated with Statia, and together the "Subsidiary Guarantors," such
excerpts hereinafter referred to as the "Subsidiary Guarantors
Excerpts," and together with the Statia Excerpt, the "Excerpts," in the
Trade Register of the Chamber of Commerce of Curacao, and St. Maarten,
Netherlands Antilles, respectively (the "Trade Register");
(4) a certified copy of the Articles of Incorporation, as amended
(statuten), of Statia (the "Statia Articles of Incorporation"), and of
the Subsidiary Guarantors (the "Subsidiary Guarantors Articles of
Incorporation," and together, the "Articles of Incorporation");
(5) photostatic copies of the business license and foreign exchange license
in relation to Statia as well as copies of the relevant correspondence
with the Bank of the Netherlands Antilles (the "Central Bank"),
including that certain letter issued by the Central Bank on September
26, 1996, as well as that certain letter addressed to the Central Bank
on December 13, 1996, and those certain letters, dated December 23,
1996 and January 9, 1997 issued by the Central Bank, and photostatic
copies of the business licenses in relation to each of the Subsidiary
Guarantors and/or written confirmation, dated November 22, 1996 from
the Executive Council of the island territory of St. Eustatius that the
respective business licenses are in full force and effect (together,
the "Licenses");
(6) (a) a photostatic copy of the resolutions adopted by written consent
outside a meeting (the "Statia Resolutions") by the Statia Board of
Directors (the "Statia Board"), including certain powers of attorney
(collectively, the "Statia Powers of Attorney"), appointing David B.
Pittaway and Justin B. Wender, and each of them, as attorney-in-fact of
Statia (each, an "Attorney-in-Fact"), authorized to act on behalf of
Statia, and (b) photostatic copies of the resolutions adopted by
written consent outside a meeting (the "Subsidiary Guarantors
Resolutions") by the respective boards of directors of the Subsidiary
Guarantors (the "Subsidiary Guarantors Boards of Directors," and
together with the Statia Board, the "Board of Directors"), including
certain powers of attorney (collectively, the Board, the "Board of
Directors"), including certain powers of attorney (collectively, the
"Subsidiary Guarantors Powers of Attorney"), appointing Mr. James G.
Cameron and Justin B. Wender as attorney-in-fact of the respective
Subsidiary Guarantors (each, an
<PAGE>
-3-
"Attorney-in-Fact"), authorized to act on behalf of the respective
Subsidiary Guarantors;
(7) a copy of the Registration Statement, dated December 20, 1996 as filed
by or on behalf of the Issuers with the Securities Exchange Commission;
(8) a copy of the Registration Rights Agreement, dated November 27, 1996,
among the Issuers and Dillon, Read & Co. (the "Registration
Rights Agreement"),
and such other documents and such treaties, laws, rules, regulations, and the
like, as we have deemed necessary as a basis for the opinion hereinafter
expressed.
The following opinion is limited in all respects to the laws of the Netherlands
Antilles as they stand at the present time and as they are interpreted
under presently published case law of the Netherlands Antilles courts,
including the Supreme Court of the Netherlands.
We have not investigated the laws of any jurisdiction other than the
Netherlands Antilles and we express no opinion as to any tax matters,
other than as stated herein.
In our examination of the documents referred to above and in rendering
this opinion, we have assumed, without independent investigation of any
kind:
(i) the genuineness of all signatures on the documents submitted
to or reviewed by us;
(ii) the authenticity of all agreements, certificates, instruments,
and other documents submitted to us as originals;
(iii) the conformity to the originals of all agreements,
certificates, instruments, and other documents submitted to us
as certified, photostatic copies or copies by facsimile;
(iv) that each Power of Attorney is in full force and effect and has
not been amended or revoked prior to or at the date hereof or
the date of execution of any documents hereunder;
(v) that (a) each party to the Documents, and the Notes, as the
case may be, other than Statia and the Subsidiary Guarantors,
respectively, has and will have all requisite power (corporate
and otherwise) to execute and deliver, and to perform its
obligations under the Documents, and the Notes, and that (b)
the Documents, and the Notes when executed, have been duly
authorized, executed, and delivered by or on behalf of the
parties thereto, other than Statia and the Subsidiary
Guarantors;
(vi) that each of the Documents and the Notes, constitutes or will
constitute the legal, valid, and binding obligations of the
parties thereto, and is or will be enforceable against those
parties in accordance with its respective terms, under the laws
of the State of New York, by which each of them, as the case
may be, is expressed to be governed and under the
<PAGE>
-4-
laws of any other relevant jurisdiction (other than the laws of
the Netherlands Antilles);
(vii) that the New Notes will be issued, executed and delivered in
compliance with the Registration Statement and in the form, or
substantially the form as reviewed by us;
(viii) that the entering into the Documents by each of the Subsidiary
Guarantors is to its respective advantage and benefit, and is in
furtherance of its respective corporate purpose.
Based upon the foregoing and subject to any factual matters or documents
not disclosed to us in the course of our investigation, and subject to
the qualifications and limitations stated hereafter, we are at the date
hereof of the opinion that:
1. Each of Statia and the Subsidiary Guarantors is validly
existing as a "naamloze vennootschap" (a company with limited
liability) under the laws of the Netherlands Antilles, with
full corporate power and capacity to own, lease and operate its
respective properties and assets and to conduct its respective
business, all in accordance with its respective object clauses
as set forth in Article 2 of the Articles of Incorporation.
2. Each of Statia and the Subsidiary Guarantors has the requisite
corporate power and authority to enter into, execute and
deliver the Documents and New Notes, to which it is a party, as
the case may be, and to perform its respective obligations
thereunder.
3. Each of Statia and the Subsidiary Guarantors has taken all
necessary corporate action to authorize the entering into,
execution, delivery and performance of the Documents, to which
it is a party, including, but not limited to, the issuance and
delivery of the New Notes by Statia, and the consummation of the
transactions as described in the Documents.
4. When executed and delivered by and on behalf of each of Statia
and the Subsidiary Guarantors by one or more duly appointed
attorneys-in-fact, the Documents, to which it is a party, will
constitute the legal, valid and binding obligations of Statia
and the Subsidiary Guarantors, respectively, enforceable in
accordance with its respective terms.
5. When executed by and on behalf of Statia, by any two managing
directors acting jointly, or by one or more duly appointed
attorneys-in-fact, including the Statia Attorneys-in-Fact, and
issued in the manner as described in the Registration
Statement, the New Notes will constitute the legal, valid and
binding obligations of Statia, enforceable against Statia, in
accordance with their terms.
6. Except for the Licenses, no license, authorization, permission
or consent from or other action by, or filing with, any
governmental authority in or of the Netherlands Antilles, is
required in connection with (i) the entering into, execution
and delivery by each of Statia and the Subsidiary Guarantors of
the Documents, and the New Notes, to which it is a party, and
the performance by each of Statia and the Subsidiary Guarantors
of its
<PAGE>
-5-
respective obligations thereunder including, but not limited
to, the issuance of the New Notes by Statia as contemplated
under the Registration Rights Agreement and the Indenture.
However, Statia is required to file for public inspection in
the Trade Register a certificate setting forth the particulars
of the New Notes from time to time (a failure to so file such
certificate would not affect the validity of the Documents or
the Notes and other than the filing of such certificate it is
not necessary to record or register the Documents or the New
Notes in any public office in the Netherlands Antilles.
7. The choice of New York law as the law governing the Documents,
and the New Notes, as the case may be, will be valid and
binding under the laws of the Netherlands Antilles and
accordingly enforceable against Statia and the Subsidiary
Guarantors, as the case may be, in accordance with its
respective terms, to the extent not in violation of public
policy of the Netherlands Antilles. The choice of forum of the
courts of the State of New York in respect of the Documents, to
which it is a party, will be valid and binding on Statia and
the Subsidiary Guarantors under the laws of the Netherlands
Antilles, insofar as such laws are applicable.
This opinion is subject to the following qualifications:
a. The opinions expressed herein may be affected or limited by (i)
the general defenses available to obligors under Netherlands
Antilles law in respect of the validity and enforceability of
agreements and (ii) the provisions of any applicable bankruptcy
(faillissement) insolvency, fraudulent conveyance (actio
Pauliana), reorganization, moratorium (surseance van betaling),
and other or similar laws of general application now or
hereafter in effect, relating to or affecting the enforcement or
protection of creditors' rights.
b. The rights and obligations of the parties to the Documents, and
the New Notes, as the ease may be, are, to the extent that the
laws of the Netherlands Antilles are applicable, subject to the
principle of good faith (goede trouw), which under Netherlands
Antilles law governs the relationship between the parties to a
contract and which, in certain circumstances, may limit or
preclude the reliance on, or enforcement of, contractual terms
and provisions.
c. When applying the law of any jurisdiction (including the
Netherlands Antilles), the courts in the Netherlands Antilles
may give effect to mandatory rules of the law of another
jurisdiction with which the situation has a close connection,
if and insofar as, under the law of the latter jurisdiction,
those rules must be applied, whatever the chosen law.
d. The enforcement in the Netherlands Antilles of the Documents
will be subject to the rules of civil procedure as applied by
the Netherlands Antilles courts. Specific performance may not
always be available under Netherlands Antilles law. Enforcement
in the Netherlands Antilles of a judgment expressed in a
currency other than Netherlands
<PAGE>
-6-
Antilles guilders may give rise to complications and it is,
therefore, advisable to obtain a judgment expressed both in that
currency and the equivalent thereof in Netherlands Antilles
guilders.
e. Under the laws of the Netherlands Antilles, each power of
attorney (volmacht) or mandate (lastgeving), whether or not
irrevocable, granted by Statia in the Documents will terminate
by force of law, and without notice, upon insolvency or bankruptcy of
Statia or the Subsidiary Guarantors. The same can apply to the
appointment by Statia or the Subsidiary Guarantors of a
process agent pursuant to the Documents.
In this opinion some Netherlands Antilles legal concepts are expressed
in English terms and not in their original Dutch terms. The concepts
concerned may not be identical to the concepts described by the same
English term as they exist under the laws of other jurisdictions. This
opinion may, therefore, only be relied upon on the express condition
that any issues of interpretation or liability arising thereunder will
be governed by Netherlands Antilles law and be brought before a
Netherlands Antilles court.
Finally, we hereby consent to the filing of this opinion as an exhibit
to the Registration Statement and to the references of our firm under
the heading "Enforceability of Certain Civil Liabilities", the heading
"Risk Factors-Enforceability of Certain Civil Liabilities", the heading
"Risk Factors-Relating to Bankruptcy, Insolvency or Restructuring
Proceedings", and the heading "Legal Matters" in the Prospectus which is
part of the Registration Statement.
This opinion is strictly limited to the matters stated herein and may
not be read as extending by implication to any matters not specifically
referred to. Nothing in this opinion should be taken as expressing an
opinion in respect of any representations or warranties, or other
information, contained in the Documents or any other document examined
in connection with this opinion except as expressly confirmed herein.
This opinion is addressed to you and your counsel and may only be relied
upon by you and your counsel in connection with the transactions to
which the Documents and the New Notes relate and may not be relied upon
by, or be transmitted to, or filed with any other person, firm, company,
or institution without our prior written consent.
SMEETS THESSELING VAN BOKHORST SPIGT
<PAGE>
[STEWART MCKELVEY STIRLING SCALES LETTERHEAD]
Exhibit 5.3
February 10, 1997
Statia Terminals Canada, Incorporated
3817 Port Malcolm Road
Richmond County NS B0E 2V0
- -and-
Point Tupper Marine Services Limited
3817 Port Malcolm Road
Richmond County NS BOE 2VO
Dear Sirs:
We have acted as Canadian counsel to Statia Terminals Canada,
Incorporated ("Statia Canada") and Point Tupper Marine Services Limited ("PTMS")
in connection with the registration statement on Form S-4 (the "Registration
Statement"), to be filed with the Securities Exchange Commission in connection
with the registration under the Securities Act of 1933, as amended, of
$135,000,000 aggregate principal amount of 11 3/4% First Mortgage Notes due
2003, Series B (the "New Notes") to be offered and issued by the Issuers and the
guarantee of the Notes by PTMS as one of the Subsidiary Guarantors (the "New
Guarantee"), under an Indenture dated as of November 27, 1996 among the Issuers,
the Subsidiary Guarantors (as defined therein) and Midland Marine Bank, as
Trustee.
Upon the basis of the foregoing, we are of the opinion that: (a) the
issuance of the New Notes has been duly and validly authorized by Statia Canada,
and when the New Notes have been duly issued, executed and delivered by Statia
Canada in accordance with the terms of the Registration
<PAGE>
February 10, 1997
Page 2
Rights Agreement (as defined in the Registation Statement) and the Indenture
(as defined in the Registration Statement, the New Notes will be legally valid
and binding obligations of Statia Canada, except as to the enforceability
thereof may be limited by bankruptcy, insolvency, reorganization or other
similar loss affecting the enforcement of creditors rights generally and by
general equitable principles (regardless of whether the issue of enforceability
is considered in a proceeding in equity or at law; and (b) the issuance of the
New Guarantee has been duly and validly authorized by PTMS, and when the New
Guarantee has been duly issued, executed and delivered by PTMS in accordance
with the terms of the Registration Rights Agreement and the Indenture, the New
Guarantee will be a legally valid and binding obligation of PTMS, except as the
enforceability thereof may be limited by bankruptcy, insolvency, reorganization
or other similar laws affecting the enforcement of creditors' rights generally
and by general equitable principles (regardless of whether the issue of
enforceability is considered in a proceeding in equity or at law).
We hereby consent to the filing of this opinion as an Exhibit to the
Registration Statement and to the references to this firm under the heading
"Legal Matters" and under the heading "Risk Factors--Enforceability of Certain
Civil Liabilities" in the prospectus which is part of the Registration
Statement.
Yours truly,
STEWART McKELVEY STIRLING SCALES
RKJ/dbm
<PAGE>
[COOPERS & LYBRAND LETTERHEAD]
Exhibit 8.2
Statia Terminals International N.V. and Our reference
Statia Terminals Canada, Inc. SV/62.9460.I/B97084
Date
February 10, 1997
PER TELEFAX. Subject
Netherlands Antilles
taxation
Dear Sirs:
We have acted as special tax counsel on matters of Netherlands Antilles tax law
to Statia Terminals International N.V. in connection with the execution of the
Purchase Agreement between Statia Terminals International N.V. (hereafter
"Statia N.V."), a Netherlands Antilles corporation. Statia Terminals Canada,
Incorporated, (hereafter "Statia Canada") a Nova Scotia, Canada corporation
(together with Statia N.V. the "Issuers") and Dillon, Read & Co. Inc. (the
"Purchaser") of an aggregate of $135,000,000 principal amount of 11-3/4% Series
A First Mortgage Notes due 2003 (the "Old Notes") issued by the Issuers pursuant
to the Indenture, among the Issuers, the companies collectively referred to as
the Subsidiary Guarantors and Marine Midland Bank as Trustee and in connection
with the Offer to Exchange (the "Exchange Offer") $135,000,000 principal amount
of 11-3/4% Series B First Mortgage Notes due 2003 (the "New Notes" and,
collectively with the Old Notes, the "Notes") pursuant to a prospectus dated
February 10, 1997 (the "Prospectus").
Based on the foregoing, we are of the opinion that the section of the Prospectus
captioned "Taxation--Netherlands Antilles Taxation" contains a summary which is
accurate in all material aspects of the Antilles profit tax, individual income
tax and gift, estate or inheritance tax consequences on the basis of the ruling
approved by the Antilles tax authorities, and applicable to a holder of Notes
who is not a resident or deemed a resident of the Netherlands Antilles and does
not have an enterprise which in its entirety or in part is carried on
personally, through a permanent representative, agent or permanent establishment
in the Antilles to which the Notes are attributable.
Yours truly,
Coopers & Lybrand
<PAGE>
Exhibit 8.3
Arthur
Andersen
------------------------------
Arthur Andersen & Co.
Chartered Accountants
------------------------------
Toronto Dominion Centre
1900-79 Wellington Street West
PO Box 29
Toronto Ontario M5K 1B9
416 863 1540
416 947 7678 Fax
February 10, 1997
The Board of Directors
Statia Terminals Canada, Incorporated
Statia Terminals International N.V.
C/O Statia Terminals Inc.
800 Fairway Drive, Suite 295
Deerfield Beach, Florida 33441
U.S.A.
Dear Sirs:
Re: Offer to Exchange (the "Exchange Offer") U.S. $135,000,000 11-3/4% First
Mortgage Notes due 2003 Series B (the "New Notes") for all Outstanding
11-3/4% First Mortgage Notes, Series A of Statia Terminals International
N.V. and Statia Terminals Canada, Incorporated.
We have acted as special Canadian tax advisors to Statia Terminals
International N.V. and Statia Terminals Canada Incorporated (the "Issuers") in
connection with the issue and sale by the Issuer of U.S. $135,000,000 aggregate
principal amount of 11-3/4% First Mortgage Notes Series A due 2003 (the "Notes")
to Dillon, Read & Co. Inc. (the "Purchaser") pursuant to a purchase agreement
dated as of November 22, 1996 (the "Purchase Agreement") between the Purchaser
and Issuers and in connection with the Exchange Offer pursuant to a Prospectus
dated February 10, 1997 for the purpose of delivering the opinions expressed
herein. This opinion is delivered to you at your request regarding the Exchange
Offer transaction.
As such, we have reviewed documents which are either executed originals or which
we have been advised by Issuer are true and complete copies of the following:
(i) the Purchase Agreement dated November 22, 1996;
(ii) (a) the preliminary offering memorandum of the Issuers dated November 5,
1996, and (b) the final offering memorandum of the Issuers dated
November 22, 1996 (the "Offering Memorandum");
(iii) the indenture dated as of November 27, 1996 (the "Indenture") among
the Issuers, the companies collectively referred to as the
Subsidiary Guarantors and Marine Midland Bank as trustee (the
"Trustee"), together with the form of Notes attached to the Indenture;
(iv) a registration rights agreement in relation to the Notes dated as of
November 27, 1996 between Issuers, the Subsidiary Guarantors named
therein and the Purchaser; and
(v) the Prospectus dated February 10, 1997 filed with a Form S-4
Registration Statement with the U.S. Securities and Exchange
Commission ("the Prospectus").
We have also examined originals or copies identified to our satisfaction of the
debt allocation agreement between the Issuers dated November 27, 1996 and such
other documents as we have considered necessary or advisable to enable us to
give this opinion.
For the purposes of this opinion, we have assumed with respect to all documents
examined by us the genuineness of all signatures, the authencity of all
documents submitted to us as originals and the conformity to authentic original
documents of all documents submitted to us as certified, notarial or photostatic
copies. We have also assumed that the Notes in definitive form will be in
substantially the form attached to the Indenture.
The opinion expressed in paragraph 1 below is based on the provisions of the
Income Tax Act (Canada) and the regulations thereunder in force on February 7,
1997, specific proposals to amend the Income Tax Act (Canada) and the
regulations thereunder announced by the Canadian Minister of Finance before
February 10, 1997 and our understanding of the current administrative practices
of Revenue Canada.
The opinion expressed herein is based on the federal laws of Canada in force on
the date thereof and does not take into account the laws of any province or
territory of Canada or any other jurisdiction.
Based on the foregoing,
1. Subject to the limitations set forth therein, we hereby confirm our
opinion contained in the Prospectus captioned "Taxation--Canadian Federal
Tax Consequences" and that the summary contained therein describes the
material Canadian federal income tax consequences to a holder of Notes or
New Notes who, within the meaning of the Income Tax Act (Canada), is a
non-resident of Canada, deals at arms' length with the Issuers and holds
the Notes and New Notes as capital property.
2. We are of the opinion that no stamp or other issuance, goods and services
or transfer taxes or duties are payable by or on behalf of a Holder under
the federal laws of Canada in connection with the exchange of Notes for
New Notes pursuant to the Exchange Offer.
As independent accountants, we hereby consent to the use of our opinion under
the heading "Taxation--Canadian Federal Tax Consequences" in the Prospectus
dated February 10, 1997 included in the Registration Statement on Form S-4 for
Statia Terminals International N.V. and Statia Terminals Canada, Incorporated.
In giving this consent we do not thereby admit we come within the category of
persons whose consent is required under Section 7 of the Securities Act of 1933,
as amended, or the rules and regulations of the Securities and Exchange
Commission.
Yours very truly,
Arthur Andersen & Co.
<PAGE>
Exhibit 10.6
EMPLOYMENT AGREEMENT
This Agreement is made as of the 27th day of November, 1996
between Statia Terminals Group N. V., a Netherlands Antilles corporation, having
a registered office at L.B. Smithplein 3, Curacao, Netherlands Antilles (the
"Company"); Statia Terminals, Inc., a Delaware corporation, with offices at 800
Fairway Drive, Suite 295, Deerfield Beach, Florida 33441 (the "Subsidiary"); and
James G. Cameron, an individual with an address of 12060 Eagle Trace Blvd.
North, Coral Springs, FL 33071 (the "Employee").
RECITALS
WHEREAS, the Company has entered into a certain Amended and
Restated Stock Purchase and Sale Agreement dated as of November 4, 1996, among
the Company and certain other corporations (the "Purchase and Sale Agreement")
pursuant to which the Company shall, directly or indirectly, acquire all of the
issued and outstanding shares of the common stock of the Subsidiary;
WHEREAS, the Employee has been and is presently in the employ
of the Subsidiary and is presently serving as President and Chief Executive
Officer of the Subsidiary;
WHEREAS, the Employee possesses an intimate knowledge of the
business and affairs of the Subsidiary and its policies, procedures, methods and
personnel;
WHEREAS, the Company desires to secure the continued services
and employment of the Employee on behalf of the Subsidiary, and the Employee
desires to be employed by the Subsidiary, upon the terms and conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants and
promises contained herein, the parties hereto, each intending to be legally
bound hereby, agree as follows:
1. Employment. The Company hereby agrees to cause the
Subsidiary to employ and continue to employ the Employee as President and Chief
Executive Officer of the Subsidiary and the Subsidiary hereby agrees to employ
and continue to employ the Employee as President and Chief Executive Officer,
and the Employee accepts such employment for the term of the employment
specified in Section 3 hereof (the "Employment Term"). During the Employment
Term, the Employee shall serve as the President and Chief Executive Officer of
the Subsidiary, performing such duties and having such authority as shall be
reasonably required of an executive-level employee of the Subsidiary, reporting
only to the Board of Directors of the Subsidiary (the "Board"), and shall have
such other powers and perform such other additional executive duties as may from
time to time be assigned to him by the Board. Such duties being performed and
such authority being exercised shall be at least commensurate with the duties
being
<PAGE>
performed and authority being exercised by the Employee immediately prior to the
date of this Agreement.
2. Performance. The Employee will serve the Subsidiary
faithfully and to the best of his ability and will devote substantially all of
his time, energy, experience and talents during regular business hours and as
otherwise reasonably necessary to such employment, to the exclusion of all other
business activities; provided however, that such exclusion shall not prohibit
the Employee from attending to the Employee's personal matters and/or financial
and investment affairs (which financial or investment affairs shall not conflict
with the business of the Subsidiary or the Company and is subject to the
provisions of Section 12 hereof) during regular business hours as may from
time-to-time be reasonably necessary so long as attendance to such matters and
affairs does not interfere with the performance of the Employee's duties
hereunder.
3. Employment Term. Subject to earlier termination pursuant to
Section 7 hereof the Employment Term shall (i) begin on the date of this
Agreement and continue until December 31, 2001 and (ii) be automatically renewed
for successive three-year periods thereafter, unless, at least 90 days before
the end of the initial term or any subsequent three-year period, either party
gives notice to the other of his or its desire to terminate this Agreement, in
which case it shall terminate as of the end of such term or period.
Notwithstanding the foregoing, if after December 31, 1998, there is a Change in
Control (as hereinafter defined) which occurs during the Employment Term, the
Employment Term shall be extended automatically for a period of three years from
and after the date of such Change in Control and shall not be automatically
renewed thereafter.
4. Compensation.
(a) Salary. During the Employment Term, the Company shall
cause the Subsidiary to pay the Employee a base salary, payable in equal
bi-weekly installments, subject to withholding and other applicable taxes, at an
annual rate of not less than Two Hundred Fifteen Thousand U.S. Dollars
($215,000). Such base salary shall be reviewed in January, 1997, and at least
annually thereafter.
(b) Cash Incentive Bonus. For the calendar year 1997
and for each subsequent calendar year, or portion thereof, during the
Employment Term, a reasonable target EBITDA (as defined below) for each calendar
year and a target bonus for the Employee for such calendar year shall be
established by the Board in its discretion after receiving the recommendation of
the management of the Subsidiary, and as soon as practicable after the end of
each such calendar year as the actual EBITDA achieved for such calendar year has
been determined, the Company shall cause the Subsidiary to pay to the Employee a
lump sum bonus determined as follows:
2
<PAGE>
% of Target EBITDA Achieved
- -------------------------------------
At Least But Less Than % of Target Bonus to be Paid
- ------------ ----------------- -----------------------------------
-- 85 None
85 90 85
90 95 90
95 100 95
100 105 100
105 110 105
110 115 110
115 120 115
120 125 120
125 and above -- 125
If during the course of any calendar year, the Company shall sell or otherwise
dispose of five percent (5%) or more of the total assets of the Company and its
subsidiaries, the Board shall establish a revised EBITDA target for such
calendar year after receiving management's recommendation.
"EBITDA" shall mean for any period, the (a) net income (or net
loss) of the Company and its subsidiaries plus (b) the sum of (i) interest
expense, (ii) income tax expense, (iii) depreciation expense, (iv) amortization
expense, and (v) extraordinary or unusual losses deducted in calculating net
income (or net loss) less (c) extraordinary or unusual gains added in
calculating net income (or net loss), in each case determined in accordance
with generally accepted accounting principles at the end of each such calendar
year for the Company and its subsidiaries on a consolidated basis, and plus (d)
any fees paid to or expenses incurred by the Company pursuant to the Management
Agreement between the Company and an Affiliate (as hereinafter defined) of a
stockholder of the Company dated November __, 1996.
(c) Employee Benefits. The Employee shall be entitled
to and shall receive employee benefits or participate in plans and programs
maintained by or on behalf of the Subsidiary which are otherwise made available
to employees of the Subsidiary, including but not limited to, medical, health,
accident and disability plan, cafeteria plan and 401(k) plan.
(d) Additional Benefits. In addition to the other
compensation payable to the Employee hereunder, during the Employment Term, the
Company shall cause the Subsidiary to furnish at its expense an automobile, or
a reasonable allowance in lieu thereof at the option of the Subsidiary, office,
reasonable secretarial services, a club membership, and such
3
<PAGE>
other supplies, equipment, facilities, services and emoluments appropriate to
such Employee's position. Also, the Subsidiary shall purchase from The CBI
Industries Inc. Supplemental Survivors' Benefit, Executive Life Insurance and
Benefit Restoration Trust at cash surrender value the collateral assignment of
the Executive Life Insurance Policy on the Employee and pay the premiums on such
policy during the Employment Term pursuant to a separate agreement dated the
date hereof between the Employee and the Subsidiary relating to such policy.
(e) Paid Time Off. Employee shall be entitled to paid
vacation, holidays, and sick leave during each calendar year of employment in
accordance with policies of the Subsidiary. Vacation may only be taken at times
mutually convenient for the Subsidiary and the Employee. The Subsidiary may
elect to pay out all accrued and unused vacation time as of December 31 of any
calendar year in January of the following calendar year. Such pay out will be at
the then prevailing rate of annual compensation. No more than four weeks
vacation time may be accrued at any time.
5. Expenses. The Employee shall be entitled to be reimbursed
by the Subsidiary for all reasonable expenses incurred by him in connection with
the performance of his duties hereunder in accordance with policies established
by the Board from time to time and upon receipt of appropriate documentation.
6. Secret Processes and Confidential Information. For the
Employment Term and thereafter (a) the Employee will not divulge, transmit or
otherwise disclose (except as legally compelled by court order, and then only to
the extent required, after prompt notice to both the Company and the Subsidiary
of any such order), directly or indirectly, other than in the regular and proper
course of business of the Company and/or the Subsidiary, any confidential
knowledge or information with respect to the operations or finances of the
Subsidiary or the Company or any of their subsidiaries or Affiliates, or with
respect to confidential or secret processes, services, techniques, customers or
plans with respect to the Company and/or the Subsidiary, and (b) the Employee
will not use, directly or indirectly, any confidential information for the
benefit of anyone other than the Company and/or the Subsidiary; provided,
however, that the Employee has no obligation, express or implied, to refrain
from using or disclosing to others any such knowledge or information which is or
hereafter shall become available to the public other than through disclosure by
the Employee.
To the greatest extent possible, any Work Product (as
hereinafter defined) shall be deemed to be "work made for hire" (as defined in
the Copyright Act, 17 U.S.C.A. Section 101 et seq., as amended) and owned
exclusively by the Subsidiary. The Employee hereby unconditionally and
irrevocably transfers and assigns to the Subsidiary all right, title and
interest the Employee may currently have or in the future may have by operation
of law or otherwise in or to any Work Product, including, without limitation,
all patents, copyrights, trademarks, service marks and other intellectual
property rights. The Employee agrees to execute and deliver to the Subsidiary
any transfers, assignments, documents or other instruments which the Company may
deem necessary or appropriate to vest complete title and ownership of any Work
Product, and all rights therein, exclusively in the Subsidiary.
4
<PAGE>
During the term of this Agreement and thereafter, Employee
shall not take any action to disparage or criticize to any third parties any of
the services of the Company and/or the Subsidiary or to commit any other action
that injures or hinders the business relationships of the Company and/or the
Subsidiary.
All files, records, documents, memorandums, notes or other
documents relating to the business of Company and/or the Subsidiary, whether
prepared by Employee or otherwise coming into his possession in the course of
the performance of his services under this Agreement, shall be the exclusive
property of Company and shall be delivered to Company and not retained by
Employee upon termination of this Agreement for any reason whatsoever.
7. Termination.
(a) Mutual Agreement. The employment of the Employee
hereunder may be terminated at any time by the mutual agreement of the parties
hereto.
(b) Termination for Substantial Cause. The Subsidiary may
at any time upon thirty (30) days prior written notice to the Employee,
terminate the employment of the Employee for Substantial Cause (as hereinafter
defined).
(c) Termination by the Employee. The Employee shall be
entitled to terminate his employment without being in violation of any provision
of this Agreement upon 30 days prior written notice to the Subsidiary (i) for
Good Reason; (ii) upon retirement pursuant to the CBI Pension Plan, as amended
effective August 1, 1996, or pursuant to any other plan or policy of the
Subsidiary; or (iii) at any time and for any reason after the Employee has
attained the age of sixty-five (65) years.
(d) Termination by Death or Disability. The employment of
the Employee shall terminate upon the death of the Employee or the inability
of the Employee to perform his duties as a result of physical or mental
disability for an aggregate of 90 days in any 180 day period, as determined in
good faith by the Board ("Disability").
8. Definitions. For purposes of this Agreement:
(a) "Business" shall mean the business of owning, leasing
or operating petroleum and other bulk liquid blending, trans-shipment, storage
or processing facilities or providing related terminaling services such as
supply of bunker fuel for vessels, emergency and spill response services;
brokering of product trades and vessel representation.
(b) "Substantial Cause" shall mean:
(i) Conviction of the Employee of a crime constituting
a felony in the jurisdiction in which committed, or for any other criminal act
against the Subsidiary or the Company involving dishonesty or willful misconduct
intended to
5
<PAGE>
injure the Subsidiary or the Company or any Affiliate of either of them in any
substantial way (whether or not a felony and whether or not criminal
proceedings are initiated);
(ii) Failure or refusal of the Employee in any material
respect to perform his obligations under this Agreement or the duties of his
employment or to follow the lawful and proper directives of the Board, other
than by reason of a Disability provided such duties or directives are consistent
with this Agreement, and such failure or refusal continues uncured for a period
of sixty (60) days after written notice thereof from the Subsidiary to the
Employee which specifies (i) the nature of such failure or refusal, and (ii) the
reasonable action of the Employee necessary for cure;
(iii) Any willful or intentional misconduct of the
Employee committed for the purpose, or having the reasonably foreseeable effect,
of injuring in a substantial way the Company, the Subsidiary, or any Affiliate
of either of them, or their respective businesses or reputations; or
(iv) Any conduct by Employee that causes the Subsidiary
or any of its Affiliates to violate any state or federal law relating to the
workplace environment or any violation of any written policy of the Subsidiary
providing for termination in the event of violation of such policy.
(a) "Good Reason" shall mean:
(i) a signlficant reduction in the authorities, duties,
or responsibilities of Employee other than as a result of sales of assets as
contemplated by the Purchase and Sale Agreement;
(ii) assignment to an office location which is more
than 100 miles from the office location of the Employee as of the date of this
Agreement; or
(iii) material breach of this Agreement by the
Subsidiary or the Company which is not cured within thirty (30) days after
written notice of such breach is given by the Employee to the Company and the
Subsidiary.
As applied to the Employee, the parties hereto agree that any position other
than President and Chief Executive Officer of the Subsidiary, reporting only to
the Board, and to whom all other employees report, directly or indirectly, would
constitute a significant reduction in the authorities, duties or
responsibilities of the Employee.
(b) "Change in Control" shall mean the occurrence of any
of the following events with respect to the Company or with respect to the
Subsidiary:
6
<PAGE>
(i) a merger, consolidation, combination,
reorganization or other transaction resulting in less than fifty percent (50%)
of the combined voting power of the surviving or resulting entity being owned by
the former shareholders of the Company or the Subsidiary, as applicable;
(ii) the sale or other disposition of all or
substantially all of the assets or business of the Company or the Subsidiary, as
applicable other than to an Affiliate of the Company or the Subsidiary, as
applicable; or
(iii) during any period of two (2) consecutive years,
individuals who at the beginning of such period constituted the Board of
Directors of the Company or of the Subsidiary, as applicable, cease for any
reason to constitute at least a majority of such board, unless the election, or
nomination for the election by the shareholders of the Company or the
Subsidiary, respectively, of each new director was approved by at least
two-thirds of the directors then still in office who were directors at the
beginning of the period;
provided, however, that, the foregoing to the contrary notwithstanding, in no
event shall any Change in Control be deemed to occur, for purposes of this
Agreement, as the direct or indirect result of the occurrence of any of the
transactions contemplated under the Purchase and Sale Agreement.
(c) "Afiliate" shall mean, with respect to any Person, any
entity that directly or indirectly through one or more intermediaries controls,
is controlled by or is under common control with such Person.
(d) "Person" shall mean any corporation, partnership,
limited liability company, joint venture, association, joint stock company,
trust, unincorporated organization or other entity or organization.
(e) "Work Product" shall mean work product, property,
data documentation or information of any kind relating to the Business,
prepared, conceived, discovered, developed or created by the Employee for the
Subsidiary or any of the Subsidiary's Affiliates, clients or customers while the
Employee is employed by the Subsidiary.
(f) "Disability" shall have the meaning specified in
Section 7(d) hereof.
9. Insurance and Indemnification.
(a) Life Insurance. The Subsidiary may purchase
insurance on the life of the Employee, and if it does so, the Employee shall
cooperate fully by performing all the requirements of the life insurer which are
necessary conditions precedent to the issuance of the life insurance policy
issued by it.
7.
<PAGE>
(b) Directors and Officers Insurance and
Indemnification. The Subsidiary shall provide directors and officers
insurance covering the Employee for events occurring during the Employment
Term on terms at least as favorable as coverage for Directors of the Company,
and the Subsidiary shall provide indemnification to the Employee to the full
extent allowed by the law of its jurisdiction of incorporation.
10. Severance.
(a) If the Employee's employment is terminated by the
Subsidiary without Substantial Cause or by the Employee for Good Reason, then
without further liability of the Subsidiary or the Company the Employee shall be
entitled to (i) medical and dental benefits as provided immediately prior to the
date of termination which shall continue for the Severance Period (as
hereinafter defined) (which shall be terminated sooner to the extent provided by
another employer) and (ii) severance compensation for the Severance Period
following any such termination, payable in equal monthly installments, subject
to withholding and other applicable taxes, at an annual rate equal to the
Employees base rate of pay for the year of termination. In addition, the
Employee will be entitled to a pro rata portion of the bonus compensation
referred to in Section 4(b) hereof for the year of termination only as and when
ordinarily determined for such year. For the purposes of this Agreement,
"Severance Period" shall mean a period commencing on the date of any such
termination and ending on the expiration of the Employment Term (determined as
of the date of such termination without giving effect to such termination);
provided, however, that the Severance Period shall not be less than one year.
(b) If the Employee's employment is terminated for any
other reason, then without further liability of the Subsidiary or the Company,
the Employee shall be entitled to the salary, expenses and benefits accrued to
the termination date (excluding the bonus referred to in Section 4(b) hereof).
11. Notice. Any notices required or permitted hereunder
shall be in writing, signed and shall be deemed to have been given when
personally delivered or when mailed, certified or registered mail,
postage prepaid, to the following addresses:
If to the Employee:
James G. Cameron
12060 Eagle Trade Blvd. North
Coral Springs, FL 33071
8
<PAGE>
If to the Subsidiary:
Statia Terminals, Inc.
800 Fairway Drive
Suite 295
Deerfield Beach, Florida 33441
Attention: Board of Directors
With a copy to:
Castle Harlan Partners II, L.P.
150 East 58th Street
37th Floor
New York, New York 10015
Attention: David B. Pittaway
and a copy to:
Kaye, Scholer, Fierman, Hays & Handler, LLP
425 Park Avenue
New York, NY 10022
Attention: Brian Christaldi, Esq.
If to the Company:
Statia Terminals Group N. V.
c/o Statia Terminals Inc.
800 Fairway Drive
Suite 295
Deerfield Beach, Florida 33441
Attention: Board of Directors
With a copy to:
Castle Harlan Partners II, L.P.
150 East 58th Street
37th Floor
New York, New York 10015
Attention: David B. Pittaway
9
<PAGE>
and a copy to:
Kaye, Scholer, Fierman,
Hays & Handler, LLP
425 Park Avenue
New York, NY 10022
Attention: Brian Christaldi, Esq.
Each of the Employee, the Subsidiary and the Company may
change its address for purposes of this Section by sending notice to the other
parties.
12. Non-Competition. The Employee shall not, at any time
during the Employment Term and for a period of eighteen months thereafter,
directly or indirectly, except where specifically contemplated by the terms of
his employment or this Agreement, (a) be employed by, engage in or participate
in the ownership, management, operation or control of, or act in any advisory or
other capacity for, any Competing Entity which conducts its business within the
Territory (as the terms Competing Entity and Territory are hereinafter defined);
provided, however, that notwithstanding the foregoing, the Employee may make
solely passive investments in any Competing Entity the common stock of which is
publicly held and of which the Employee shall not own or control, directly or
indirectly, in the aggregate securities which constitute 5% or more of the
voting rights or equity ownership of such Competing Entity; or (b) solicit or
divert any business or any customer from the Subsidiary or any Affiliate of the
Subsidiary or assist any person, firm or corporation in doing so or attempting
to do so; or (c) cause or seek to cause any person, firm or corporation to
refrain from dealing or doing business with the Subsidiary or any Affiliate of
the Subsidiary or assist any person, firm or corporation in doing so.
For purposes of this Section 12, (i) the term "Competing
Entity" shall mean any Person which presently or hereafter during the term
hereof engages in the Business; and (ii) the term Territory shall mean the
Caribbean and the area within a three hundred mile radius of (a) the terminal
facility operated by an Affiliate of the Subsidiary at Point Tupper, Nova Scotia
and (b) any terminal hereafter operated by the Subsidiary or any Affiliate of
the Subsidiary.
13. General.
(a) Governing Law: Captions. The terms of this Agreement
shall be governed by and construed under the laws of the State of Florida.
Paragraph and Section captions used herein are for convenience of reference
only, and shall not in any way affect the meaning or interpretation of this
Agreement.
(b) Assignability. The Employee may not assign his
interest in or delegate his duties under this Agreement. Notwithstanding
anything else in this Agreement to the contrary, the Subsidiary may assign this
Agreement and all rights hereunder shall inure to the benefit of the assignee or
any person, firm or corporation succeeding to all or substantially all of the
business or assets of the Subsidiary by purchase, merger or consolidation.
10
<PAGE>
(c) Dispute Resolution. With the exception of the
Company's or the Subsidiary's right to elect to seek injunctive relief pursuant
to paragraph (g) of this Section 13, in the event of any dispute between either
the Company or the Subsidiary and the Employee arising out of or relating to
this Agreement or its termination or any other aspect of Employee's employment,
the parties hereby agree to submit such dispute to a non-binding mediation under
the American Arbitration Association's National Rules for the Resolution of
Employment Disputes; Arbitration and Mediation Rules (the "Rules") within sixty
(60) days of notice from any one of the parties to another. Unless the parties
can agree on a mediator within thirty (30) days of such notice, mediation shall
proceed pursuant to the Rules. In the event any such dispute is not resolved by
mediation, any party hereto may initiate an action or claim to enforce any
provision or term of this Agreement. Each party shall bear its or his own costs
and expenses (including attorney's fees) associated with any mediation, action,
or claim.
(d) Binding Effect. This Agreement is for the employment
of Employee, personally, and the services to be rendered by him must be
rendered by him and no other person. This Agreement shall be binding upon and
inure to the benefit of the Company, the Subsidiary, and the Employee and, as
the case may be, their respective successors and assigns, personal
representatives, heirs and legatees.
(e) Entire Agreement: Modification. This Agreement
constitutes the entire agreement of the parties hereto with respect to the
subject matter hereof and may not be modified or amended in any way except in
writing by the parties.
(f) Duration. Notwithstanding the term of employment
hereunder, this Agreement shall continue for so long as any obligations remain
under this Agreement hereto, including without limitation any obligations of the
Company or the Subsidiary under Sections 9(b), 10 or 13 of this Agreement.
(g) Survival. The covenants set forth in Sections 6 and
12 of this Agreement shall survive and shall continue to be binding upon
Employee notwithstanding the termination of this Agreement for any reason
whatsoever. The covenants set forth in Section 6 and Section 12 of this
Agreement shall be deemed and construed as separate agreements independent of
any other provision of this Agreement. The existence of any claim or cause of
action by Employee against Company and/or Subsidiary, whether predicated on this
Agreement or otherwise, shall not constitute a defense to the enforcement by
Company or Subsidiary of any or all covenants. It is expressly agreed that the
remedy at law for the breach of any such covenant is inadequate and that
injunctive relief shall be available to prevent the breach or any threatened
breach thereof.
(h) Severability. In case any provision in this Agreement
shall be held invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions hereof will not in any way be
affected or impaired thereby and the parties shall in good faith agree on a
modification of the invalid, illegal or unenforceable provision which renders it
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<PAGE>
valid, legal or enforceable (as the case may be) and which as closely as
possible reflects the original intent of the parties.
(i) Guaranty of Company. The Company hereby
unconditionally guarantees to Employee the full and timely performance by
Subsidiary of its obligations under this Agreement.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto, intending to be
legally bound, have hereunto executed this Agreement the day and year first
written above.
Statia Terminals, Inc.
By: /s/ James G. Cameron
--------------------------------
Name: James G. Cameron
Title: President
Statia Terminals Group N. V.
By: /s/ David B. Pittaway
-------------------------------
Name: David B. Pittaway
Title: Attorney-in-law
EMPLOYEE
/s/ James G. Cameron
------------------------------------
James G. Cameron
13
<PAGE>
Exhibit 10.7
EMPLOYMENT AGREEMENT
This Agreement is made as of the 27th day of November, 1996
between Statia Terminals Group N.V., a Netherlands Antilles corporation, having
a registered office at L.B. Smithplein 3, Curacao, Netherlands Antilles (the
"Company"); Statia Terminals, Inc., a Delaware corporation, with offices at 800
Fairway Drive, Suite 295, Deerfield Beach, Florida 33441 (the "Subsidiary"); and
James F. Brenner, an individual with an address of 8245 S.W. 93rd Street, Miami,
FL 33156 (the "Employee").
RECITALS
WHEREAS, the Company has entered into a certain Amended and
Restated Stock Purchase and Sale Agreement dated as of November 4, 1996, among
the Company and certain other corporations (the "Purchase and Sale Agreement")
pursuant to which the Company shall, directly or indirectly, acquire all of the
issued and outstanding shares of the common stock of the Subsidiary;
WHEREAS, the Employee has been and is presently in the employ
of the Subsidiary;
WHEREAS, the Employee possesses an intimate knowledge of the
business and affairs of the Subsidiary and its policies, procedures, methods and
personnel;
WHEREAS, the Company desires to secure the continued services
and employment of the Employee on behalf of the Subsidiary, and the Employee
desires to be employed by the Subsidiary, upon the terms and conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants and
promises contained herein, the parties hereto, each intending to be legally
bound hereby, agree as follows:
1. Employment. The Company hereby agrees to cause the
Subsidiary to employ and continue to employ the Employee as a senior financial
officer of the Subsidiary and the Subsidiary hereby agrees to employ and
continue to employ the Employee as a senior financial officer, and the Employee
accepts such employment for the term of the employment specified in Section 3
hereof (the "Employment Term"). During the Employment Term, the Employee shall
serve as a senior financial officer of the Subsidiary, performing such duties
and having such authority as shall be reasonably required of an executive-level
employee of the Subsidiary.
2. Performance. The Employee will serve the Subsidiary
faithfully and to the best of his ability and will devote substantially all of
his time, energy, experience and talents during regular business hours and
as otherwise reasonably necessary to such employment, to the
<PAGE>
exclusion of all other business activities; provided however, that such
exclusion shall not prohibit the Employee from attending to the Employee's
personal matters and/or financial and investment affairs (which financial or
investment affairs shall not conflict with the business of the Subsidiary or
the Company and is subject to the provisions of Section 12 hereof) during
regular business hours as may from time-to-time be reasonably necessary so long
as attendance to such matters and affairs does not interfere with the
performance of the Employee's duties hereunder.
3. Employment Term. Subject to earlier termination pursuant
to Section 7 hereof the Employment Term shall (i) begin on the date of this
Agreement and continue until December 31, 1999 and (ii) be automatically renewed
for successive two-year periods thereafter, unless, at least 90 days before the
end of the initial term or any subsequent two-year period, either party gives
notice to the other of his or its desire to terminate this Agreement, in which
case it shall terminate as of the end of such term or period. Notwithstanding
the foregoing, if after December 31, 1997, there is a Change in Control (as
hereinafter defined) which occurs during the Employment Term, the Employment
Term shall be extended automatically for a period of two years from and after
the date of such Change in Control and shall not be automatically renewed
thereafter.
4. Compensation.
(a) Salary. During the Employment Term, the
Company shall cause the Subsidiary to pay the Employee a base salary, payable in
equal bi-weekly installments, subject to withholding and other applicable taxes,
at an annual rate of not less than Eighty-One Thousand Two Hundred Sixty-Eight
U.S. Dollars ($81,268). Such base salary shall be reviewed in January, 1997, and
at least annually thereafter.
(b) Cash Incentive Bonus. For the
calendar year 1997 and for each subsequent calendar year, or portion
thereof, during the Employment Term, a reasonable target EBITDA (as defined
below) for each calendar year and a target bonus for the Employee for such
calendar year shall be established by the Board of Directors of the Subsidiary
(the "Board") in its discretion after receiving the recommendation of the
management of the Subsidiary, and as soon as practicable after the end of each
such calendar year as the actual EBITDA achieved for such calendar year has been
determined, the Company shall cause the Subsidiary to pay to the Employee a lump
sum bonus determined as follows:
% of Target EBITDA Achieved
At Least But Less Than % of Target Bonus to be Paid
-- 85 None
85 90 85
90 95 90
2
<PAGE>
% of Target EBITDA Achieved % of Target Bonus to be Paid
95 100 95
100 105 100
105 110 105
110 115 110
115 120 115
120 125 120
125 and above -- 125
If during the course of any calendar year, the Company shall sell or otherwise
dispose of five percent (5%) or more of the total assets of the Company and its
subsidiaries, the Board shall establish a revised EBITDA target for such
calendar year after receiving management's recommendation.
"EBITDA" shall mean for any period, the (a) net income (or net loss) of the
Company and its subsidiaries plus (b) the sum of (i) interest expense, (ii)
income tax expense, (iii) depreciation expense, (iv) amortization expense, and
(v) extraordinary or unusual losses deducted in calculating net income (or net
loss) less (c) extraordinary or unusual gains added in calculating net income
(or net loss), in each case determined in accordance with generally accepted
accounting principles at the end of each such calendar year for the Company and
its subsidiaries on a consolidated basis, and plus (d) any fees paid to or
expenses incurred by the Company pursuant to the Management Agreement between
the Company and an Affiliate (as hereinafter defined) of a stockholder of the
Company dated November __, 1996.
(c) Employee Benefits. The Employee shall be entitled to and shall
receive employee benefits or part:icipate in plans and programs maintained by or
on behalf of the Subsidiary which are otherwise made available to employees of
the Subsidiary, including but not limited to, medical, health, accident and
disability plan, cafeteria plan and 401(k) plan.
(d) Additional Benefits. In addition to the other compensation payable
to the Employee hereunder, during the Employment Term, the Company shall cause
the Subsidiary to furnish at its expense an automobile, or a reasonable
allowance in lieu thereof at the option of the Subsidiary, office, reasonable
secretarial services, and such other supplies, equipment, facilities, services
and emoluments appropriate to such Employee's position.
(e) Paid Time Off. Employee shall be entitled to paid vacation, holidays,
and sick leave during each calendar year of employment in accordance with
policies of the Subsidiary. Vacation may only be taken at times mutually
convenient for the Subsidiary and the Employee. The Subsidiary may elect to pay
out all accrued and unused vacation time as of
3
<PAGE>
December 31 of any calendar year in January of the following calendar year. Such
pay out will be at the then prevailing rate of annual compensation. No more than
four weeks vacation time may be accrued at any time.
5. Expenses. The Employee shall be entitled to be reimbursed
by the Subsidiary for all reasonable expenses incurred by him in connection with
the performance of his duties hereunder in accordance with policies established
by the Board from time to time and upon receipt of appropriate documentation.
6. Secret Processes and Confidential Information. For the
Employment Term and thereafter (a) the Employee will not divulge, transmit or
otherwise disclose (except as legally compelled by court order, and then only to
the extent required, after prompt notice to both the Company and the Subsidiary
of any such order), directly or indirectly, other than in the regular and proper
course of business of the Company and/or the Subsidiary, any confidential
knowledge or information with respect to the operations or finances of the
Subsidiary or the Company or any of their subsidiaries or Affiliates, or with
respect to confidential or secret processes, services, techniques, customers or
plans with respect to the Company and/or the Subsidiary, and (b) the Employee
will not use, directly or indirectly, any confidential information for the
benefit of anyone other than the Company and/or the Subsidiary; provided,
however, that the Employee has no obligation, express or implied, to refrain
from using or disclosing to others any such knowledge or information which is or
hereafter shall become available to the public other than through disclosure by
the Employee.
To the greatest extent possible, any Work Product (as
hereinafter defined) shall be deemed to be "work made for hire" (as defined in
the Copyright Act, 17 U.S.C.A. Section 101 et seq., as amended) and owned
exclusively by the Subsidiary. The Employee hereby unconditionally and
irrevocably transfers and assigns to the Subsidiary all right, title and
interest the Employee may currently have or in the future may have by operation
of law or otherwise in or to any Work Product, including, without limitation,
all patents, copyrights, trademarks, service marks and other intellectual
property rights. The Employee agrees to execute and deliver to the Subsidiary
any transfers, assignments, documents or other instruments which the Company may
deem necessary or appropriate to vest complete title and ownership of any Work
Product, and all rights therein, exclusively in the Subsidiary.
During the term of this Agreement and thereafter, Employee
shall not take any action to disparage or criticize to any third parties any of
the services of the Company and/or the Subsidiary or to commit any other action
that injures or hinders the business relationships of the Company and/or the
Subsidiary.
All files, records, documents, memorandums, notes or other
documents relating to the business of Company and/or the Subsidiary, whether
prepared by Employee or otherwise coming into his possession in the course of
the performance of his services under this Agreement, shall be the exclusive
property of Company and shall be delivered to Company and not retained by
Employee upon termination of this Agreement for any reason whatsoever.
4
<PAGE>
7. Termination.
(a) Mutual Agreement. The employment of the
Employee hereunder may be terminated at any time by the mutual agreement of the
parties hereto.
(b) Termination for Substantial Cause. The
Subsidiary may at any time upon thirty (30) days prior written notice to the
Employee, terminate the employment of the Employee for Substantial Cause (as
hereinafter defined).
(c) Termination by the Employee. The Employee
shall be entitled to terminate his employment without being in violation of any
provision of this Agreement upon 30 days prior written notice to the Subsidiary
(i) for Good Reason; (ii) upon retirement pursuant to the CBI Pension Plan, as
amended effective August 1, 1996, or pursuant to any other plan or policy of the
Subsidiary; or (iii) at any time and for any reason after the Employee has
attained the age of sixty-five (65) years.
(d) Termination by Death or Disability. The
employment of the Employee shall terminate upon the death of the Employee or
the inability of the Employee to perform his duties as a result of physical or
mental disability for an aggregate of 90 days in any 180 day period, as
determined in good faith by the Board ("Disability").
8. Definitions. For purposes of this Agreement:
(a) "Business" shall mean the business of
owning, leasing or operating petroleum and other bulk liquid blending,
trans-shipment, storage or processing facilities or providing related
terminaling services such as supply of bunker fuel for vessels, emergency and
spill response services; brokering of product trades and vessel representation.
(b) "Substantial Cause" shall mean:
(i) Conviction of the Employee of a crime
constituting a felony in the jurisdiction in which committed,
or for any other criminal act against the Subsidiary or the
Company involving dishonesty or willful misconduct intended
to injure the Subsidiary or the Company or any Affiliate of
either of them in any substantial way (whether or not a felony
and whether or not criminal proceedings are initiated);
(ii) Failure or refusal of the Employee in
any material respect to perform his obligations under this
Agreement or the duties of his employment or to follow the
lawful and proper directives of the Board, other than by
reason of a Disability provided such duties or directives are
consistent with this Agreement, and such failure or refusal
continues uncured for a period of sixty (60) days after
written notice thereof from the Subsidiary to the Employee
which specifies (i) the
5
<PAGE>
nature of such failure or refusal, and (ii) the reasonable
action of the Employee necessary for cure;
(iii) Any willful or intentional misconduct
of the Employee committed for the purpose, or having the
reasonably foreseeable effect, of injuring in a substantial
way the Company, the Subsidiary, or any Affiliate of either of
them, or their respective businesses or reputations; or
(iv) Any conduct by Employee that causes the
Subsidiary or any of its Affiliates to violate any state or
federal law relating to the workplace environment or any
violation of any written policy of the Subsidiary providing
for termination in the event of violation of such policy.
(a) "Good Reason" shall mean:
(i) assignment to an office location
which is more than 100 miles from the office location of
the Employee as of the date of this Agreement; or
(ii) material breach of this Agreement by
the Subsidiary or the Company which is not cured within thirty
(30) days after written notice of such breach is given by the
Employee to the Company and the Subsidiary.
(b) "Change in Control" shall mean the
occurrence of any of the following events with respect to
the Company or with respect to the Subsidiary:
(i) a merger, consolidation, combination,
reorganization or other transaction resulting in less than
fifty percent (50%) of the combined voting power of the
surviving or resulting entity being owned by the former
shareholders of the Company or the Subsidiary, as applicable;
(ii) the sale or other disposition
of all or substantially all of the assets or business of
the Company or the Subsidiary, as applicable other than to
an Affiliate of the Company or the Subsidiary, as applicable;
or
(iii) during any period of two (2)
consecutive years, individuals who at the beginning of such
period constituted the Board of Directors of the Company or of
the Subsidiary, as applicable, cease for any reason to
constitute at least a majority of such board, unless the
election, or nomination for the election by the shareholders
of the Company or the Subsidiary, respectively, of each new
director was approved by at least two-thirds of the directors
then still in office who were directors at the beginning of
the period;
6
<PAGE>
provided, however, that, the foregoing to the contrary notwithstanding, in no
event shall any Change in Control be deemed to occur, for purposes of this
Agreement, as the direct or indirect result of the occurrence of any of the
transactions contemplated under the Purchase and Sale Agreement.
(c) "Affiliate" shall mean, with respect to
any Person, any entity that directly or indirectly through one or more
intermediaries controls, is controlled by or is under common control with such
Person.
(d) "Person" shall mean any corporation,
partnership, limited liability company, joint venture, association, joint
stock company, trust, unincorporated organization or other entity or
organization.
(e) "Work Product" shall mean work product,
property, data documentation or information of any kind relating to the
Business, prepared, conceived, discovered, developed or created by the Employee
for the Subsidiary or any of the Subsidiary's Affiliates, clients or customers
while the Employee is employed by the Subsidiary.
(f) "Disability" shall have the meaning
specified in Section 7(d) hereof.
9. Directors and Officers Insurance and Indemnification. The
Subsidiary shall provide directors and officers insurance covering the Employee
for events occurring during the Employment Term on terms at least as favorable
as coverage for Directors of the Company, and the Subsidiary shall provide
indemnification to the Employee to the full extent allowed by the law of its
jurisdiction of incorporation.
10. Severance.
(a) If the Employee's employment is terminated
by the Subsidiary without Substantial Cause or by the Employee for Good
Reason, then without further liability of the Subsidiary or the Company the
Employee shall be entitled to (i) medical and dental benefits as provided
immediately prior to the date of termination which shall continue for the
Severance Period (as hereinafter defined) (which shall be terminated sooner to
the extent provided by another employer) and (ii) severance compensation for the
Severance Period following any such termination, payable in equal monthly
installments, subject to withholding and other applicable taxes, at an annual
rate equal to the Employees base rate of pay for the year of termination. In
addition, the Employee will be entitled to a pro rata portion of the bonus
compensation referred to in Section 4(b) hereof for the year of termination
only as and when ordinarily determined for such year. For the purposes of this
Agreement, "Severance Period" shall mean a period commencing on the date of any
such termination and ending on the expiration of the Employment Term (determined
as of the date of such termination without giving effect to such termination);
provided, however, that the Severance Period shall not be less than one year.
7
<PAGE>
(b) If the Employee's employment is terminated for
any other reason, then without further liability of the Subsidiary or the
Company, the Employee shall be entitled to the salary, expenses and benefits
accrued to the termination date (excluding the bonus referred to in Section (b)
hereof).
11. Notice. Any notices required or permitted hereunder
shall be in writing, signed and shall be deemed to have been given when
personally delivered or when mailed, certified or registered mail, postage
prepaid, to the following addresses:
If to the Employee:
James F. Brenner
8245 S.W. 93rd Street
Miami, FL 33156
If to the Subsidiary:
Statia Terminals, Inc.
800 Fairway Drive
Suite 295
Deerfield Beach, Florida 33441
Attention: Board of Directors
With a copy to:
Castle Harlan Partners II, L.P.
150 East 58th Street
37th Floor
New York, New York 10015
Attention: David B. Pittaway
and a copy to:
Kaye, Scholer, Fierman,
Hays & Handler, LLP
425 Park Avenue
New York, NY 10022
Attention: Brian Christaldi, Esq.
If to the Company:
Statia Terminals Group N. V.
c/o Statia Terminals Inc.
800 Fairway Drive
8
<PAGE>
Suite 295
Deerfield Beach, Florida 33441
Attention: Board of Directors
With a copy to:
Castle Harlan Partners II, L.P.
150 East 58th Street
37th Floor
New York, New York 10015
Attention: David B. Pittaway
9
<PAGE>
and a copy to:
Kaye, Scholer, Fierman,
Hays & Handler, LLP
425 Park Avenue
New York, NY 10022
Attention: Brian Christaldi, Esq.
Each of the Employee, the Subsidiary and the Company may
change its address for purposes of this Section by sending notice to the other
parties.
12. Non-Competition. The Employee shall not, at any time
during the Employment Term and for a period of eighteen months thereafter,
directly or indirectly, except where specifically contemplated by the terms of
his employment or this Agreement, (a) be employed by, engage in or participate
in the ownership, management, operation or control of, or act in any advisory or
other capacity for, any Competing Entity which conducts its business within the
Territory (as the terms Competing Entity and Territory are hereinafter defined);
provided, however, that notwithstanding the foregoing, the Employee may make
solely passive investments in any Competing Entity the common stock of which is
publicly held and of which the Employee shall not own or control, directly or
indirectly, in the aggregate securities which constitute 5% or more of the
voting rights or equity ownership of such Competing Entity; or (b) solicit or
divert any business or any customer from the Subsidiary or any Affiliate of the
Subsidiary or assist any person, firm or corporation in doing so or attempting
to do so; or (c) cause or seek to cause any person, firm or corporation to
refrain from dealing or doing business with the Subsidiary or any Affiliate of
the Subsidiary or assist any person, firm or corporation in doing so.
For purposes of this Section 12, (i) the term "Competing
Entity" shall mean any Person which presently or hereafter during the term
hereof engages in the Business; and (ii) the term Territory shall mean the
Caribbean and the area within a three hundred mile radius of (a) the terminal
facility operated by an Affiliate of the Subsidiary at Point Tupper, Nova Scotia
and (b) any terminal hereafter operated by the Subsidiary or any Affiliate of
the Subsidiary.
13. General.
(a) Governing Law: Captions. The terms of this
Agreement shall be governed by and construed under the laws of the State of
Florida. Paragraph and Section captions used herein are for convenience of
reference only, and shall not in any way affect the meaning or interpretation
of this Agreement.
(b) Assignability. The Employee may not assign his
interest in or delegate his duties under this Agreement. Notwithstanding
anything else in this Agreement to the contrary, the Subsidiary may assign this
Agreement and all rights hereunder shall inure to the benefit of the assignee or
any person, firm or corporation succeeding to all or substantially all of the
business or assets of the Subsidiary by purchase, merger or consolidation.
10
<PAGE>
(c) Dispute Resolution. With the exception of the
Company's or the Subsidiary's right to elect to seek injunctive relief pursuant
to paragraph (g) of this Section 13, in the event of any dispute between either
the Company or the Subsidiary and the Employee arising out of or relating to
this Agreement or its termination or any other aspect of Employee's employment,
the parties hereby agree to submit such dispute to a non-binding mediation under
the American Arbitration Association's National Rules for the Resolution of
Employment Disputes; Arbitration and Mediation Rules (the "Rules") within sixty
(60) days of notice from any one of the parties to another. Unless the parties
can agree on a mediator within thirty (30) days of such notice, mediation shall
proceed pursuant to the Rules. In the event any such dispute is not resolved by
mediation, any party hereto may initiate an action or claim to enforce any
provision or term of this Agreement. Each party shall bear its or his own costs
and expenses (including attorney's fees) associated with any mediation, action,
or claim.
(d) Binding Effect. This Agreement is for the
employment of Employee, personally, and the services to be rendered by him must
be rendered by him and no other person. This Agreement shall be binding upon and
inure to the benefit of the Company, the Subsidiary, and the Employee and, as
the case may be, their respective successors and assigns, personal
representatives, heirs and legatees.
(e) Entire Agreement; Modification. This Agreement
constitutes the entire agreement of the parties hereto with respect to the
subject matter hereof and may not be modified or amended in any way except in
writing by the parties.
(f) Duration. Notwithstanding the term of
employment hereunder, this Agreement shall continue for so long as any
obligations remain under this Agreement hereto, including without limitation any
obligations of the Company or the Subsidiary under Sections 9, 10 or 13 of this
Agreement.
(g) Survival. The covenants set forth in Sections
6 and 12 of this Agreement shall survive and shall continue to be binding upon
Employee notwithstanding the termination of this Agreement for any reason
whatsoever. The covenants set forth in Section 6 and Section 12 of this
Agreement shall be deemed and construed as separate agreements independent of
any other provision of this Agreement. The existence of any claim or cause of
action by Employee against Company and/or Subsidiary, whether predicated on this
Agreement or otherwise, shall not constitute a defense to the enforcement by
Company or Subsidiary of any or all covenants. It is expressly agreed that the
remedy at law for the breach of any such covenant is inadequate and that
injunctive relief shall be available to prevent the breach or any threatened
breach thereof.
(h) Severability. In case any provision in this
Agreement shall be held invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions hereof will not in any
way be affected or impaired thereby and the parties shall in good faith agree on
a modification of the invalid, illegal or unenforceable provision which renders
it
11
<PAGE>
valid, legal or enforceable (as the case may be) and which as closely as
possible reflects the original intent of the parties.
(i) Guaranty of Company. The Company hereby
unconditionally guarantees to Employee the full and timely performance by
Subsidiary of its obligations under this Agreement.
12
<PAGE>
IN WITNESS WHEREOF, the parties hereto, intending to be
legally bound, have hereunto executed this Agreement the day and year first
written above.
Statia Terminals, Inc.
By: /s/ James G. Cameron
-------------------------
Name: James G. Cameron
Title: President
Statia Terminals Group N. V.
By: /s/ David B. Pittaway
--------------------------
Name: David B. Pittaway
Title: Attoney-in-fact
EMPLOYEE
/s/ James F. Brenner
-----------------------------
James F. Brenner
13
<PAGE>
Exhibit 10.8
EMPLOYMENT AGREEMENT
This Agreement is made as of the 27th day of November, 1996
between Statia Terminals Group N. V., a Netherlands Antilles corporation, having
a registered office at L.B. Smithplein 3, Curacao, Netherlands Antilles (the
"Company"); Statia Terminals, Inc., a Delaware corporation, with offices at 800
Fairway Drive, Suite 295, Deerfield Beach, Florida 33441 (the "Subsidiary"); and
Jack R. Pine, an individual with an address of 4525 Middaugh Avenue, Downers
Grove, IL 60515 (the "Employee").
RECITALS
WHEREAS, the Company has entered into a certain Amended and
Restated Stock Purchase and Sale Agreement dated as of November 4, 1996, among
the Company and certain other corporations (the "Purchase and Sale Agreement")
pursuant to which the Company shall, directly or indirectly, acquire all of the
issued and outstanding shares of the common stock of the Subsidiary;
WHEREAS, the Employee has been and is presently in the employ
of the Subsidiary and is presently serving as Senior Vice President of the
Subsidiary;
WHEREAS, the Employee possesses an intimate knowledge of the
business and affairs of the Subsidiary and its policies, procedures, methods and
personnel;
WHEREAS, the Company desires to secure the continued services
and employment of the Employee on behalf of the Subsidiary, and the Employee
desires to be employed by the Subsidiary, upon the terms and conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants and
promises contained herein, the parties hereto, each intending to be legally
bound hereby, agree as follows:
1. Employment. The Company hereby agrees to cause the
Subsidiary to employ and continue to employ the Employee as Senior Vice
President of the Subsidiary and the Subsidiary hereby agrees to employ and
continue to employ the Employee as Senior Vice President, and the Employee
accepts such employment for the term of the employment specified in Section 3
hereof (the "Employment Term"). During the Employment Term, the Employee shall
serve as the Senior Vice President of the Subsidiary, performing such duties and
having such authority as shall be reasonably required of an executive-level
employee of the Subsidiary, reporting only to the President and Chief Executive
Officer and the Board of Directors of the Subsidiary (the "Board"), and shall
have such other powers and perform such other additional executive duties as may
from time to time be assigned to him by the President and Chief Executive
Officer or the Board. Such duties being performed and such authority being
exercised shall be
<PAGE>
at least commensurate with the duties being performed and authority being
exercised by the Employee immediately prior to the date of this Agreement.
2. Performance. The Employee will serve the Subsidiary
faithfully and to the best of his ability and will devote substantially all
of his time, energy, experience and talents during regular business hours and as
otherwise reasonably necessary to such employment, to the exclusion of all other
business activities; provided however, that such exclusion shall not prohibit
the Employee from attending to the Employee's personal matters and/or financial
and investment affairs (which financial or investment affairs shall not conflict
with the business of the Subsidiary or the Company and is subject to the
provisions of Section 12 hereof) during regular business hours as may from
time-to-time be reasonably necessary so long as attendance to such matters and
affairs does not interfere with the performance of the Employee's duties
hereunder.
3. Employment Term. Subject to earlier termination pursuant to
Section 7 hereof the Employment Term shall (i) begin on the date of this
Agreement and continue until December 31, 1999 and (ii) be automatically renewed
for successive two-year periods thereafter, unless, at least 90 days before the
end of the initial term or any subsequent two-year period, either party gives
notice to the other of his or its desire to terminate this Agreement, in which
case it shall terminate as of the end of such term or period. Notwithstanding
the foregoing, if after December 31, 1997, there is a Change in Control (as
hereinafter defmed) which occurs during the Employment Term, the Employment Term
shall be extended automatically for a period of two years from and after the
date of such Change in Control and shall not be automatically renewed
thereafter.
4. Compensation.
(a) Salary. During the Employment Term, the Company shall
cause the Subsidiary to pay the Employee a base salary, payable in equal
bi-weekly installments, subject to withholding and other applicable taxes, at an
annual rate of not less than One Hundred Fifteen Thousand Seven Hundred U.S.
Dollars ($115,700). Such base salary shall be reviewed in January, 1997, and at
least annually thereafter.
(b) Cash Incentive Bonus. For the calendar year 1997 and
for each subsequent calendar year, or portion thereof, during the Employment
Term, a reasonable target EBITDA (as defined below) for each calendar year and a
target bonus for the Employee for such calendar year shall be established by the
Board in its discretion after receiving the recommendation of the management of
the Subsidiary, and as soon as practicable after the end of each such calendar
year as the actual EBITDA achieved for such calendar year has been determined,
the Company shall cause the Subsidiary to pay to the Employee a lump sum bonus
determined as follows:
2
<PAGE>
% of Target EBITDA Achieved
---------------------------------
At Least But Less Than % of Target Bonus to be Paid
-------- ------------- -----------------------------
- 85 None
85 90 85
90 95 90
95 100 95
100 105 100
105 110 105
110 115 110
115 120 115
120 125 120
125 and above - 125
If during the course of any calendar year, the Company shall sell or otherwise
dispose of five percent (5%) or more of the total assets of the Company and its
subsidiaries, the Board shall establish a revised EBITDA target for such
calendar year after receiving management's recommendation.
"EBITDA" shall mean for any period, the (a) net income (or net
loss) of the Company and its subsidiaries plus (b) the sum of (i) interest
expense, (ii) income tax expense, (iii) depreciation expense, (iv) amortization
expense, and (v) extraordinary or unusual losses deducted in calculating net
income (or net loss) less (c) extraordinary or unusual gains added in
calculating net income (or net loss), in each case determined in accordance
with generally accepted accounting principles at the end of each such calendar
year for the Company and its subsidiaries on a consolidated basis, and plus (d)
any fees paid to or expenses incurred by the Company pursuant to the Management
Agreement between the Company and an Affiliate (as hereinafter defined) of a
stockholder of the Company dated November , 1996.
(c) Emplovee Benefits. The Employee shall be entitled to
and shall receive employee benefits or participate in plans and programs
maintained by or on behalf of the Subsidiary which are otherwise made available
to employees of the Subsidiary, including but not limited to, medical, health,
accident and disability plan, cafeteria plan and 401(k) plan.
(d) Additional Benefits. In addition to the other
compensation payable to the Employee hereunder, during the Employment Term, the
Company shall cause the Subsidiary to furnish at its expense an automobile, or a
reasonable allowance in lieu thereof at the
3
<PAGE>
option of the Subsidiary, office, reasonable secretarial services, and such
other supplies, equipment, facilities, services and emoluments appropriate to
such Employee's position.
(e) Paid Time Off. Employee shall be entitled to paid
vacation, holidays, and sick leave during each calendar year of employment in
accordance with policies of the Subsidiary. Vacation may only be taken at times
mutually convenient for the Subsidiary and the Employee. The Subsidiary may
elect to pay out all accrued and unused vacation time as of December 31 of any
calendar year in January of the following calendar year. Such pay out will be at
the then prevailing rate of annual compensation. No more than four weeks
vacation time may be accrued at any time.
5. Expenses. The Employee shall be entitled to be reimbursed
by the Subsidiary for all reasonable expenses incurred by him in connection with
the performance of his duties hereunder in accordance with policies established
by the Board from time to time and upon receipt of appropriate documentation.
6. Secret Processes and Confidential Information. For the
Employment Term and thereafter (a) the Employee will not divulge, transmit or
otherwise disclose (except as legally compelled by court order, and then only to
the extent required, after prompt notice to both the Company and the Subsidiary
of any such order), directly or indirectly, other than in the regular and proper
course of business of the Company and/or the Subsidiary, any confidential
knowledge or information with respect to the operations or finances of the
Subsidiary or the Company or any of their subsidiaries or Affiliates, or with
respect to confidential or secret processes, services, techniques, customers or
plans with respect to the Company and/or the Subsidiary, and (b) the Employee
will not use, directly or indirectly, any confidential information for the
benefit of anyone other than the Company and/or the Subsidiary; provided,
however, that the Employee has no obligation, express or implied, to refrain
from using or disclosing to others any such knowledge or information which is or
hereafter shall become available to the public other than through disclosure by
the Employee.
To the greatest extent possible, any Work Product (as
hereinafter defined) shall be deemed to be "work made for hire" (as defined in
the Copyright Act, 17 U.S.C.A. Section 101 et seq., as amended) and owned
exclusively by the Subsidiary. The Employee hereby unconditionally and
irrevocably transfers and assigns to the Subsidiary all right, title and
interest the Employee may currently have or in the future may have by operation
of law or otherwise in or to any Work Product, including, without limitation,
all patents, copyrights, trademarks, service marks and other intellectual
property rights. The Employee agrees to execute and deliver to the Subsidiary
any transfers, assignments, documents or other instruments which the Company may
deem necessary or appropriate to vest complete title and ownership of any Work
Product, and all rights therein, exclusively in the Subsidiary.
During the term of this Agreement and thereafter, Employee
shall not take any action to disparage or criticize to any third parties any of
the services of the Company and/or the
4
<PAGE>
Subsidiary or to commit any other action that injures or hinders the business
relationships of the Company and/or the Subsidiary.
All files, records, documents, memorandums, notes or other
documents relating to the business of Company and/or the Subsidiary, whether
prepared by Employee or otherwise coming into his possession in the course of
the performance of his services under this Agreement, shall be the exclusive
property of Company and shall be delivered to Company and not retained by
Employee upon termination of this Agreement for any reason whatsoever.
7. Termination.
(a) Mutual Agreement. The employment of the Employee
hereunder may be terminated at any time by the mutual agreement of the parties
hereto.
(b) Termination for Substantial Cause. The Subsidiary may
at any time upon thirty (30) days prior written notice to the Employee,
terminate the employment of the Employee for Substantial Cause (as hereinafter
defined).
(c) Termination by the Employee. The Employee shall be
entitled to terminate his employment without being in violation of any provision
of this Agreement upon 30 days prior written notice to the Subsidiary (i) for
Good Reason; (ii) upon retirement pursuant to the CBI Pension Plan, as amended
effective August 1, 1996, or pursuant to any other plan or policy of the
Subsidiary; or (iii) at any time and for any reason after the Employee has
attained the age of sixty-five (65) years.
(d) Termination by Death or Disability. The employment of
the Employee shall terminate upon the death of the Employee or the inability
of the Employee to perform his duties as a result of physical or mental
disability for an aggregate of 90 days in any 180 day period, as determined in
good faith by the Board ("Disability").
8. Definitions. For purposes of this Agreement:
(a) "Business" shall mean the business of owning, leasing
or operating petroleum and other bulk liquid blending, trans-shipment, storage
or processing facilities or providing related terminaling services such as
supply of bunker fuel for vessels, emergency and spill response services;
brokering of product trades and vessel representation.
(b) "Substantial Cause" shall mean:
(i) Conviction of the Employee of a crime constituting a
felony in the jurisdiction in which committed, or for any
other criminal act against the Subsidiary or the Company
involving dishonesty or willful misconduct intended to injure
the Subsidiary or the Company or any Affiliate of either of
them in any
5
<PAGE>
substantial way (whether or not a felony and whether or not
criminal proceedings are initiated);
(ii) Failure or refusal of the Employee in any material
respect to perform his obligations under this Agreement or the
duties of his employment or to follow the lawful and proper
directives of the Board, other than by reason of a Disability
provided such duties or directives are consistent with this
Agreement, and such failure or refusal continues uncured for a
period of sixty (60) days after written notice thereof from
the Subsidiary to the Employee which specifies (i) the nature
of such failure or refusal, and (ii) the reasonable action of
the Employee necessary for cure;
(iii) Any willful or intentional misconduct of the
Employee committed for the purpose, or having the reasonably
foreseeable effect, of injuring in a substantial way the
Company, the Subsidiary, or any Affiliate of either of them,
or their respective businesses or reputations; or
(iv) Any conduct by Employee that causes the Subsidiary
or any of its Affiliates to violate any state or federal law
relating to the workplace environment or any violation of any
written policy of the Subsidiary providing for termination in
the event of violation of such policy.
(a) "Good Reason" shall mean:
(i) a significant reduction in the authorities, duties,
or responsibilities of Employee other than as a result of
sales of assets as contemplated by the Purchase and Sale
Agreement;
(ii) assignment to an office location which is more
than 100 miles from the office location of the Employee as of
the date of this Agreement; or
(iii) material breach of this Agreement by the Subsidiary
or the Company which is not cured within thirty (30) days
after written notice of such breach is given by the Employee
to the Company and the Subsidiary.
(b) "Change in Control" shall mean the occurrence of any of
the following events with respect to the Company or with
respect to the Subsidiary:
6
<PAGE>
(i) a merger, consolidation, combination,
reorganization or other transaction resulting in less than
fifty percent (50%) of the combined voting power of the
surviving or resulting entity being owned by the former
shareholders of the Company or the Subsidiary, as applicable;
(ii) the sale or other disposition of all or
substantially all of the assets or business of the Company or
the Subsidiary, as applicable other than to an Affiliate of
the Company or the Subsidiary, as applicable; or
(iii) during any period of two (2) consecutive years,
individuals who at the beginning of such period constituted
the Board of Directors of the Company or of the Subsidiary, as
applicable, cease for any reason to constitute at least a
majority of such board, unless the election, or nomination for
the election by the shareholders of the Company or the
Subsidiary, respectively, of each new director was approved by
at least two-thirds of the directors then still in office who
were directors at the beginning of the period;
provided, however, that, the foregoing to the contrary notwithstanding, in no
event shall any Change in Control be deemed to occur, for purposes of this
Agreement, as the direct or indirect result of the occurrence of any of the
transactions contemplated under the Purchase and Sale Agreement.
(c) "Affiliate" shall mean, with respect to any Person,
any entity that directly or indirectly through one or more intermediaries
controls, is controlled by or is under common control with such Person.
(d) "Person" shall mean any corporation, partnership,
limited liability company, joint venture, association, joint stock company,
trust, unincorporated organization or other entity or organization.
(e) "Work Product" shall mean work product, property, data
documentation or information of any kind relating to the Business, prepared,
conceived, discovered, developed or created by the Employee for the Subsidiary
or any of the Subsidiary's Affiliates, clients or customers while the Employee
is employed by the Subsidiary.
(f) "Disability" shall have the meaning specified in Section
7(d) hereof.
9. Directors and Officers Insurance and Indemnification. The
Subsidiary shall provide directors and officers insurance covering the Employee
for events occurring during the Employment Term on terms at least as favorable
as coverage for Directors of the Company, and the Subsidiary shall provide
indemnification to the Employee to the full extent allowed by the law of its
jurisdiction of incorporation.
7
<PAGE>
10. Severance.
(a) If the Employee's employment is terminated by the
Subsidiary without Substantial Cause or by the Employee for Good Reason, then
without further liability of the Subsidiary or the Company the Employee shall be
entitled to (i) medical and dental benefits as provided immediately prior to the
date of termination which shall continue for the Severance Period (as
hereinafter defined) (which shall be terminated sooner to the extent provided by
another employer) and (ii) severance compensation for the Severance Period
following any such termination, payable in equal monthly installments, subject
to withholding and other applicable taxes, at an annual rate equal to the
Employee's base rate of pay for the year of termination. In addition, the
Employee will be entitled to a pro rata portion of the bonus compensation
referred to in Section 4(b) hereof for the year of termination only as and when
ordinarily determined for such year. For the purposes of this Agreement,
"Severance Period" shall mean a period commencing on the date of any such
termination and ending on the expiration of the Employment Term (determined as
of the date of such termination without giving effect to such termination);
provided, however, that the Severance Period shall not be less than one year.
(b) If the Employee's employment is terminated for any other
reason, then without further liability of the Subsidiary or the Company, the
Employee shall be entitled to the salary, expenses and benefits accrued to the
termination date (excluding the bonus referred to in Section 4(b)) hereof).
11. Notice. Any notices required or permitted hereunder
shall be in writing, signed and shall be deemed to have been given when
personally delivered or when mailed, certified or registered mail,
postage prepaid, to the following addresses:
If to the Employee:
Jack R. Pine
4525 Middaugh Avenue
Downers Grove, IL 60515
If to the Subsidiary:
Statia Terminals, Inc.
800 Fairway Drive
Suite 295
Deerfield Beach, Florida 33441
Attention: Board of Directors
8
<PAGE>
With a copy to:
Castle Harlan Partners II, L.P.
150 East 58th Street
37th Floor
New York, New York 10015
Attention: David B. Pittaway
and a copy to:
Kaye, Scholer, Fierman, Hays & Handler, LLP
425 Park Avenue
New York, NY 10022
Attention: Brian Christaldi, Esq.
If to the Company:
Statia Terminals Group N.V.
c/o Statia Terminals Inc.
800 Fairway Drive
Suite 295
Deerfield Beach, Florida 33441
Attention: Board of Directors
With a copy to:
Castle Harlan Partners II, L.P.
150 East 58th Street
37th Floor
New York, New York 10015
Attention: David B. Pittaway
9
<PAGE>
and a copy to:
Kaye, Scholer, Fierman, Hays & Handler, LLP
425 Park Avenue
New York, NY 10022
Attention: Brian Christaldi, Esq.
Each of the Employee, the Subsidiary and the Company may
change its address for purposes of this Section by sending notice to the other
parties.
12. Non-Competition. The Employee shall not, at any time
during the Employment Term and for a period of eighteen months thereafter,
directly or indirectly, except where specifically contemplated by the terms of
his employment or this Agreement, (a) be employed by, engage in or participate
in the ownership, management, operation or control of, or act in any advisory or
other capacity for, any Competing Entity which conducts its business within the
Territory (as the terms Competing Entity and Territory are hereinafter defined);
provided, however, that notwithstanding the foregoing, the Employee may make
solely passive investments in any Competing Entity the common stock of which is
publicly held and of which the Employee shall not own or control, directly or
indirectly, in the aggregate securities which constitute 5% or more of the
voting rights or equity ownership of such Competing Entity; or (b) solicit or
divert any business or any customer from the Subsidiary or any Affiliate of the
Subsidiary or assist any person, firm or corporation in doing so or attempting
to do so; or (c) cause or seek to cause any person, firm or corporation to
refrain from dealing or doing business with the Subsidiary or any Affiliate of
the Subsidiary or assist any person, firm or corporation in doing so.
For purposes of this Section 12, (i) the term "Competing
Entity" shall mean any Person which presently or hereafter during the term
hereof engages in the Business; and (ii) the term Territory shall mean the
Caribbean and the area within a three hundred mile radius of (a) the terminal
facility operated by an Affiliate of the Subsidiary at Point Tupper, Nova Scotia
and (b) any terminal hereafter operated by the Subsidiary or any Affiliate of
the Subsidiary.
13. General.
(a) Governing Law: Captions. The terms of this Agreement
shall be governed by and construed under the laws of the State of Florida.
Paragraph and Section captions used herein are for convenience of reference
only, and shall not in any way affect the meaning or interpretation of this
Agreement.
(b) Assignability. The Employee may not assign his
interest in or delegate his duties under this Agreement. Notwithstanding
anything else in this Agreement to the contrary, the Subsidiary may assign this
Agreement and all rights hereunder shall inure to the benefit of the assignee or
any person, firm or corporation succeeding to all or substantially all of the
business or assets of the Subsidiary by purchase, merger or consolidation.
10
<PAGE>
(c) Dispute Resolution. With the exception of the Company's
or the Subsidiary's right to elect to seek injunctive relief pursuant to
paragraph (g) of this Section 13, in the event of any dispute between either the
Company or the Subsidiary and the Employee arising out of or relating to this
Agreement or its termination or any other aspect of Employee's employment, the
parties hereby agree to submit such dispute to a non-binding mediation under the
American Arbitration Association's National Rules for the Resolution of
Employment Disputes; Arbitration and Mediation Rules (the "Rules") within sixty
(60) days of notice from any one of the parties to another. Unless the parties
can agree on a mediator within thirty (30) days of such notice, mediation shall
proceed pursuant to the Rules. In the event any such dispute is not resolved by
mediation, any party hereto may initiate an action or claim to enforce any
provision or term of this Agreement. Each party shall bear its or his own costs
and expenses (including attorney's fees) associated with any mediation, action,
or claim.
(d) Binding Effect. This Agreement is for the employment of
Employee, personally, and the services to be rendered by him must be rendered by
him and no other person. This Agreement shall be binding upon and inure to the
benefit of the Company, the Subsidiary, and the Employee and, as the case may
be, their respective successors and assigns, personal representatives, heirs and
legatees.
(e) Entire Agreement; Modification. This Agreement
constitutes the entire agreement of the parties hereto with respect to the
subject matter hereof and may not be modified or amended in any way except in
writing by the parties.
(f) Duration. Notwithstanding the term of employment
hereunder, this Agreement shall continue for so long as any obligations
remain under this Agreement hereto, including without limitation any obligations
of the Company or the Subsidiary under Sections 9, 10 or 13 of this Agreement.
(g) Survival. The covenants set forth in Sections 6 and 12 of
this Agreement shall survive and shall continue to be binding upon Employee
notwithstanding the termination of this Agreement for any reason whatsoever. The
covenants set forth in Section 6 and Section 12 of this Agreement shall be
deemed and construed as separate agreements independent of any other provision
of this Agreement. The existence of any claim or cause of action by Employee
against Company and/or Subsidiary, whether predicated on this Agreement or
otherwise, shall not constitute a defense to the enforcement by Company or
Subsidiary of any or all covenants. It is expressly agreed that the remedy at
law for the breach of any such covenant is inadequate and that injunctive relief
shall be available to prevent the breach or any threatened breach thereof.
(h) Severability. In case any provision in this Agreement
shall be held invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions hereof will not in any way be
affected or impaired thereby and the parties shall in good faith agree on a
modification of the invalid, illegal or unenforceable provision which renders it
11
<PAGE>
valid, legal or enforceable (as the case may be) and which as closely as
possible reflects the original intent of the parties.
(i) Guaranty of Company. The Company hereby unconditionally
guarantees to Employee the full and timely performance by Subsidiary of its
obligations under this Agreement.
12
<PAGE>
IN WITNESS WHEREOF, the parties hereto, intending to be
legally bound, have hereunto executed this Agreement the day and year first
written above.
Statia Terminals, Inc.
By: /s/ James G. Cameron
______________________________
Name: James G. Cameron
Title: President
Statia Terminals Group N. V.
By: /s/ David B. Pittaway
________________________________
Name: David B. Pittaway
Title: Attorney-in-fact
EMPLOYEE
/s/ Jack R. Pine
________________________________
Jack R. Pine
13
<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 Amendment
No. 1 to the Registration Statement on Form S-4.
Arthur Andersen LLP
Chicago, Illinois
February 10, 1997
<PAGE>
EXHIBIT 99.1
------------
LETTER OF TRANSMITTAL
FOR
TENDER OF 11 3/4% FIRST MORTGAGE NOTES DUE 2003, SERIES A
IN EXCHANGE FOR
11 3/4% FIRST MORTGAGE NOTES DUE 2003, SERIES B
STATIA TERMINALS INTERNATIONAL N.V.
STATIA TERMINALS CANADA, INCORPORATED
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME,
ON , 1997, UNLESS EXTENDED (THE "EXPIRATION DATE").
OLD NOTES TENDERED IN THE EXCHANGE OFFER MAY BE
WITHDRAWN AT ANY TIME PRIOR TO THE
EXPIRATION DATE.
DELIVER TO THE EXCHANGE AGENT:
MARINE MIDLAND BANK
By Registered or
Certified Mail or by
Overnight Courier: By Hand:
Marine Midland Bank Marine Midland Bank
140 Broadway 140 Broadway
Level A Level A
New York, NY 10005-1180 New York, NY 10005-1180
Attn: Corporate Trust Operations Attn: Corporate Trust Operations
By Facsimile:
Marine Midland Bank
Corporate Trust Operations
Facsimile: (212) 658-2292
Confirm by Telephone:
(212) 658-5931
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE
OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER THAN THE ONE LISTED
ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. THE INSTRUCTIONS ACCOMPANYING THIS
LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL
IS COMPLETED.
<PAGE>
EXHIBIT 99.1
Page 2
The undersigned hereby acknowledges receipt and review of the
Prospectus dated ____________________, 1997 (the "Prospectus") of Statia
Terminals International N.V. ("Statia") and Statia Terminals Canada,
Incorporated ("Statia Canada", and together with Statia, the "Company") and this
Letter of Transmittal (the "Letter of Transmittal"), which together describe the
Company's offer (the "Exchange Offer") to exchange the Company's 11 3/4% First
Mortgage Notes due November 15, 2003, Series B (the "New Notes"), which have
been registered under the Securities Act of 1933, as amended (the "Securities
Act"), pursuant to a Registration Statement of which the Prospectus is a part,
for a like principal amount of the Company's issued and outstanding 11 3/4%
First Mortgage Notes due November 15, 2003, Series A (the "Old Notes").
Capitalized terms used but not defined herein have the respective meaning given
to them in the Prospectus.
The Company reserves the right, at any time or from time to time, to
extend the Exchange Offer at its discretion, in which event the term "Expiration
Date" shall mean the latest time and date in which the Exchange Offer is
extended. The Company shall notify the holders of the Old Notes of any extension
by oral or written notice prior to 9:00 A.M., New York City time, on the next
business day after the previously scheduled Expiration Date.
This Letter of Transmittal is to be used by a Holder of Old Notes
either if original Old Notes are to be forwarded herewith or if delivery of Old
Notes, if available, is to be made by book-entry transfer to the account
maintained by the Exchange Agent at The Depository Trust Company (the
"Book-Entry Transfer Facility" or "DTC") pursuant to the procedures set forth in
the Prospectus under the caption "The Exchange Offer--Book-Entry Transfer."
Holders of Old Notes whose Old Notes are not immediately available, or who are
unable to deliver their Old Notes and all other documents required by this
Letter of Transmittal to the Exchange Agent on or prior to the Expiration Date,
or who are unable to complete the procedure for book-entry transfer on a timely
basis, must tender their Old Notes according to the guaranteed delivery
procedures set forth in the Prospectus under the caption "The Exchange
Offer--Guaranteed Delivery Procedures." See Instruction 1. Delivery of documents
to the Book-Entry Transfer Facility does not constitute delivery to the Exchange
Agent.
The term "Holder" with respect to the Exchange Offer means any person
in whose name Old Notes are registered on the books of the Company or any other
person who has obtained a properly completed bond power from the registered
Holder. The undersigned has completed, executed and delivered this Letter of
Transmittal to indicate the action the undersigned desires to take with respect
to the Exchange Offer. Holders who wish to tender their Old Notes must complete
this Letter of Transmittal in its entirety. Notwithstanding the foregoing,
Holders of Old
<PAGE>
EXHIBIT 99.1
Page 3
Notes eligible to utilize DTC's Automated Tender Offer Program ("ATOP"), who
have opted to comply with the ATOP procedures set forth in the Prospectus under
the caption "Exchange Offer--Procedures for Tendering," need not complete, sign
or deliver this Letter of Transmittal.
The undersigned has checked the appropriate boxes below and signed this
Letter of Transmittal to indicate the action the undersigned desires to take
with respect to the Exchange Offer.
PLEASE READ THE ENTIRE LETTER OF TRANSMITTAL AND THE PROSPECTUS
CAREFULLY BEFORE CHECKING ANY BOX BELOW.
THE INSTRUCTIONS INCLUDED WITH THIS LETTER OF TRANSMITTAL MUST BE
FOLLOWED. QUESTIONS AND REQUESTS FOR ASSISTANCE OR FOR ADDITIONAL COPIES
OF THE PROSPECTUS AND THIS LETTER OF TRANSMITTAL MAY BE DIRECTED TO THE
EXCHANGE AGENT.
List below the Old Notes to which this Letter of Transmittal relates.
If the space below is inadequate, list the registered numbers and principal
amounts on a separate signed schedule and affix the list to this Letter of
Transmittal.
<TABLE>
<CAPTION>
===================================================================================================================
DESCRIPTION OF OLD NOTES TENDERED
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) AGGREGATE
OF REGISTERED HOLDER(S), PRINCIPAL
EXACTLY AS NAME(S) APPEAR(S) AMOUNT PRINCIPAL
ON OLD NOTES REGISTERED REPRESENTED AMOUNT
(PLEASE FILL IN, IF BLANK) NUMBERS* BY NOTE(S) TENDERED**
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
TOTAL
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
* Need not be completed by book-entry Holders.
** Unless otherwise indicated, any tendering Holder of Old Notes
will be deemed to have tendered the entire aggregate principal amount
represented by such Old Notes. All tenders must be in integral
multiples of $1,000.
================================================================================
<PAGE>
EXHIBIT 99.1
Page 4
|_| CHECK HERE IF TENDERED OLD NOTES ARE ENCLOSED
HEREWITH.
|_| CHECK HERE IF TENDERED OLD NOTES ARE BEING DELIVERED BY BOOK-ENTRY
TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH THE
BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE FOLLOWING (FOR USE BY
ELIGIBLE INSTITUTIONS ONLY):
Name of Tendering Institution:_____________________________
Account Number:____________________________________________
Transaction Code Number:___________________________________
|_| CHECK HERE IF TENDERED OLD NOTES ARE BEING DELIVERED PURSUANT TO A
NOTICE OF GUARANTEED DELIVERY ENCLOSED HEREWITH AND COMPLETE THE
FOLLOWING (FOR USE BY ELIGIBLE INSTITUTIONS ONLY):
Name(s) of Registered Holder(s) of Old Notes:
____________________________________________________________
Date of Execution of Notice of Guaranteed Delivery:_________
Window Ticket Number (if available):________________________
Name of Eligible Institution that Guaranteed Delivery:
____________________________________________________________
Account Number (if delivered by book-entry transfer):
____________________________________________________________
|_| CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL
COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS
THERETO.
Name:________________________________________________________
Address:_____________________________________________________
<PAGE>
EXHIBIT 99.1
Page 5
If the undersigned is not a broker-dealer, the undersigned represents
that it is not engaged in, and does not intend to engage in, a distribution of
New Notes. If the undersigned is a broker-dealer that will receive New Notes for
its own account in exchange for Old Notes, it acknowledges that the Old Notes
were acquired as a result of market-making activities or other trading
activities and that it will deliver a prospectus in connection with any resale
of such New Notes; however, by so acknowledging and by delivering a prospectus,
the undersigned will not be deemed to admit that it is an "underwriter" within
the meaning of the Securities Act.
SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
Subject to the terms and conditions of the Exchange Offer, the
undersigned hereby tenders to the Company for exchange the principal amount of
Old Notes indicated above. Subject to and effective upon the acceptance for
exchange of the principal amount of Old Notes tendered in accordance with this
Letter of Transmittal, the undersigned hereby exchanges, assigns and transfers
to the Company all right, title and interest in and to the Old Notes tendered
for exchange hereby. The undersigned hereby irrevocably constitutes and appoints
the Exchange Agent, the agent and attorney-in-fact of the undersigned (with full
knowledge that the Exchange Agent also acts as the agent of the Company in
connection with the Exchange Offer) with respect to the tendered Old Notes with
full power of substitution to (i) deliver such Old Notes, or transfer ownership
of such Old Notes on the account books maintained by the Book-Entry Transfer
Facility, to the Company and deliver all accompanying evidences of transfer and
authenticity, and (ii) present such Old Notes for transfer on the books of the
Company and receive all benefits and otherwise exercise all rights of beneficial
ownership of such Old Notes, all in accordance with the terms of the Exchange
Offer. The power of attorney granted in this paragraph shall be deemed to be
irrevocable and coupled with an interest.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, exchange, assign and transfer the Old Notes
tendered hereby and to acquire the New Notes issuable upon the exchange of such
tendered Old Notes, and that the Company will acquire good and unencumbered
title thereto, free and clear of all liens, restrictions, charges and
encumbrances and not subject to any adverse claim, when the same are accepted
for exchange by the Company.
<PAGE>
EXHIBIT 99.1
Page 6
The undersigned acknowledge(s) that this Exchange Offer is being made
in reliance upon interpretations contained in no-action letters issued to third
parties by the staff of the Securities and Exchange Commission (the
"Commission") that the New Notes issued in exchange for the Old Notes pursuant
to the Exchange Offer may be offered for resale, resold and otherwise
transferred by Holders thereof (other than any such Holder that is (i) an
"affiliate" of the Company within the meaning of Rule 405 under the Securities
Act or (ii) a broker-dealer that acquired the Old Notes in a transaction other
than as part of its 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 engaging in and do not intend
to engage in a distribution of the New Notes and have no arrangement or
understanding with any person to participate in a distribution of such New
Notes. The undersigned hereby further represent(s) to the Company that (i) any
New Notes acquired in exchange for Old Notes tendered hereby are being acquired
in the ordinary course of business of the person receiving such New Notes,
whether or not the undersigned, (ii) neither the undersigned nor any such other
person is engaging in or intends to engage in a distribution of the New Notes,
(iii) neither the undersigned nor any such other person has an arrangement or
understanding with any person to participate in the distribution of such New
Notes, and (iv) neither the Holder nor any such other person is an "affiliate,"
as defined in Rule 405 under 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.
If the undersigned or the person receiving the New Notes is a
broker-dealer that is receiving New Notes for its own account in exchange for
Old Notes that were acquired as a result of market-making activities or other
trading activities, the undersigned acknowledges that it or such other person
will deliver a prospectus in connection with any resale of such New Notes;
however, by so acknowledging and by delivering a prospectus, the undersigned
will not be deemed to admit that the undersigned or such other person is an
"underwriter" within the meaning of the Securities Act. The undersigned
acknowledges that if the undersigned is participating in the Exchange Offer for
the purpose of distributing the New Notes (i) the undersigned cannot rely on the
position of the staff of the Commission in certain no-action letters and, in the
absence of an exemption therefrom, must comply with the registration and
prospectus delivery requirements of the Securities Act in connection with a
secondary resale transaction of the New Notes, in which case the registration
statement must contain the selling security holder information required by Item
507 or Item 508, as applicable, of Regulation S-K of the Commission, and (ii)
failure to comply with such requirements in such instance could result in the
undersigned incurring liability under the Securities Act for which the
undersigned is not indemnified by the Company.
<PAGE>
EXHIBIT 99.1
Page 7
If the undersigned or the person receiving the New Notes is an
"affiliate" (as defined in Rule 405 under the Securities Act), the undersigned
represents to the Company that the undersigned understands and acknowledges that
the New Notes may not be offered for resale, resold or otherwise transferred by
the undersigned or such other person without registration under the Securities
Act or an exemption therefrom.
The undersigned will, upon request, execute and deliver any additional
documents deemed by the Exchange Agent or the Company to be necessary or
desirable to complete the exchange, assignment and transfer of the Old Notes
tendered hereby, including the transfer of such Old Notes on the account books
maintained by the Book-Entry Transfer Facility.
For purposes of the Exchange Offer, the Company shall be deemed to have
accepted for exchange validly tendered Old Notes when, as and if the Company
gives oral or written notice thereof to the Exchange Agent. Any tendered Old
Notes that are not accepted for exchange pursuant to the Exchange Offer for any
reason will be returned, without expense, to the undersigned at the address
shown below or at a different address as may be indicated herein under "Special
Delivery Instructions" as promptly as practicable after the Expiration Date.
All authority conferred or agreed to be conferred by this Letter of
Transmittal shall survive the death, incapacity or dissolution of the
undersigned, and every obligation of the undersigned under this Letter of
Transmittal shall be binding upon the undersigned's heirs, personal
representatives, successors and assigns.
The undersigned acknowledges that the Company's acceptance of properly
tendered Old Notes pursuant to the procedures described under the caption "The
Exchange Offer -- Procedures for Tendering" in the Prospectus and in the
instructions hereto will constitute a binding agreement between the undersigned
and the Company upon the terms and subject to the conditions of the Exchange
Offer.
Unless otherwise indicated under "Special Issuance Instructions,"
please issue the New Notes issued in exchange for the Old Notes accepted for
exchange and return any Old Notes not tendered or not exchanged, in the name(s)
of the undersigned. Similarly, unless otherwise indicated under "Special
Delivery Instructions," please mail or deliver the New Notes issued in exchange
for the Old Notes accepted for exchange and any Old Notes not tendered or not
exchanged (and accompanying documents, as appropriate) to the undersigned at the
address shown below the undersigned's signature(s). In the event that both
"Special Issuance Instructions" and "Special Delivery Instructions" are
completed, please issue the New Notes issued in exchange for the Old Notes
accepted for exchange in the
<PAGE>
EXHIBIT 99.1
Page 8
name(s) of, and return any Old Notes not tendered or not exchanged to, the
person(s) so indicated. The undersigned recognizes that the Company has no
obligation pursuant to the "Special Issuance Instructions" and "Special Delivery
Instructions" to transfer any Old Notes from the name of the registered
holder(s) thereof if the Company does not accept for exchange any of the Old
Notes so tendered for exchange.
<PAGE>
EXHIBIT 99.1
Page 9
SPECIAL ISSUANCE INSTRUCTIONS (SEE INSTRUCTIONS 5 AND 6)
To be completed ONLY (i) if Old Notes in a principal amount not
tendered, or New Notes issued in exchange for Old Notes accepted for exchange,
are to be issued in the name of someone other than the undersigned, or (ii) if
Old Notes tendered by book-entry transfer which are not exchanged are to be
returned by credit to an account maintained at the Book-Entry Transfer Facility.
Issue New Notes and/or Old Notes to:
Name(s):______________________________________________________________
(Please Type or Print)
Address:
______________________________________________________________________
______________________________________________________________________
(Include Zip Code)
______________________________________________________________________
(Tax Identification or Social Security No.)
(Complete Substitute Form W-9)
Credit unexchanged Old Notes delivered by book-entry transfer to the
Book-Entry Transfer Facility set forth below:
______________________________________________________________________
(Book-Entry Transfer Facility
Account Number, if applicable)
PLEASE SIGN HERE WHETHER OR NOT
OLD NOTES ARE BEING PHYSICALLY TENDERED HEREBY
(Complete Accompanying Substitute Form W-9 on Reverse Side)
______________________________________ _____________________________
Date
______________________________________ _____________________________
Date
Area Code and Telephone Number:_______________________________________
<PAGE>
EXHIBIT 99.1
Page 10
The above lines must be signed by the registered Holder(s) of Old Notes
as name(s) appear(s) on the Old Notes or on a security position listing, or by
person(s) authorized to become registered Holder(s) by a properly completed bond
power from the registered Holder(s), a copy of which must be transmitted with
this Letter of Transmittal. If Old Notes to which this Letter of Transmittal
relate are held of record by two or more joint Holders, then all such Holders
must sign this Letter of Transmittal. If signature is by a trustee, executor,
administrator, guardian, attorney-in-fact, officer of a corporation or other
person acting in a fiduciary or representative capacity, then such person must
(i) set forth his or her full title below and (ii) unless waived by the Company,
submit evidence satisfactory to the Company of such person's authority so to
act. See Instruction 5 regarding the completion of this Letter of Transmittal,
printed below.
Name(s):_______________________________________________________________
(Please Type or Print)
Capacity:______________________________________________________________
Address:
________________________________________________________________________
________________________________________________________________________
(Include Zip Code)
<PAGE>
EXHIBIT 99.1
Page 11
MEDALLION SIGNATURE GUARANTEE
(If Required by Instruction 5)
Certain signatures must be Guaranteed by an Eligible Institution.
Signature(s) Guaranteed by an Eligible Institution:
_____________________________________________________________________
(Authorized Signature)
_____________________________________________________________________
(Title)
_____________________________________________________________________
(Name of Firm)
_____________________________________________________________________
(Address, Include Zip Code)
_____________________________________________________________________
(Area Code and Telephone Number)
Dated:____________________, 19__
SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 5 and 6)
To be completed ONLY if Old Notes in a principal amount not tendered,
or New Notes issued in exchange for Old Notes accepted for exchange, are to be
mailed or delivered to someone other than the undersigned, or to the undersigned
at an address other than that shown below the undersigned's signature.
Mail or deliver New Notes and/or Old Notes to:
Name:
_____________________________________________________________________
(Please Type or Print)
Address:
_____________________________________________________________________
_____________________________________________________________________
(Include Zip Code)
_____________________________________________________________________
(Tax Identification or Social Security No.)
<PAGE>
EXHIBIT 99.1
Page 12
INSTRUCTIONS
FORMING PART OF THE TERMS AND
CONDITIONS OF THE EXCHANGE OFFER
1. Delivery of this Letter of Transmittal and Old Notes or Book-Entry
Confirmations. All physically delivered Old Notes or any confirmation of a
book-entry transfer to the Exchange Agent's account at the Book-Entry Transfer
Facility of Old Notes tendered by book-entry transfer (a "Book-Entry
Confirmation"), as well as a properly completed and duly executed copy of this
Letter of Transmittal or facsimile hereof, and any other documents required by
this Letter of Transmittal, must be received by the Exchange Agent at its
address set forth herein prior to 5:00 p.m., New York City time, on the
Expiration Date. The method of delivery of the tendered Old Notes, this Letter
of Transmittal and all other required documents to the Exchange Agent is at the
election and risk of the Holder and, except as otherwise provided below, the
delivery will be deemed made only when actually received or confirmed by the
Exchange Agent. Instead of delivery by mail, it is recommended that the Holder
use an overnight or hand delivery service. In all cases, sufficient time should
be allowed to assure delivery to the Exchange Agent before the Expiration Date.
No Letter of Transmittal or Old Notes should be sent to the Company.
2. Guaranteed Delivery Procedures. Holders who wish to tender their Old
Notes and (a) whose Old Notes are not immediately available, or (b) who cannot
deliver their Old Notes, this Letter of Transmittal or any other documents
required hereby to the Exchange Agent prior to the Expiration Date or (c) who
are unable to complete the procedure for book-entry transfer on a timely basis,
must tender their Old Notes according to the guaranteed delivery procedures set
forth in the Prospectus. Pursuant to such procedures: (i) such tender must be
made by or through a firm which is a member of a registered national securities
exchange or of the National Association of Securities Dealers Inc. or a
commercial bank or a trust company having an office or correspondent in the
United States (an "Eligible Institution"); (ii) prior to the Expiration Date,
the Exchange Agent must have received from the Eligible Institution a properly
completed and duly executed Notice of Guaranteed Delivery (by facsimile
transmission, mail or hand delivery) setting forth the name and address of the
Holder of the Old Notes, the registration 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, Inc.
("NYSE") trading days after the Expiration Date, either (x) this Letter of
Transmittal (or facsimile hereof) together with the Old Notes (or a Book-Entry
Confirmation) in proper form for transfer will be deposited by the Eligible
Institution with the Exchange Agent or (y) an Agent's Message will be
<PAGE>
EXHIBIT 99.1
Page 13
properly transmitted to the Exchange Agent; and (iii) this properly completed
and executed Letter of Transmittal (or facsimile thereof), as well as the
certificates for all physically tendered shares of Old Notes, in proper form for
transfer, or Book-Entry Confirmation, as the case may be, and all other
documents required by this Letter or a properly transmitted Agent's Message, are
received by the Exchange Agent within three (3) NYSE trading days after the date
of execution of the Notice of Guaranteed Delivery.
Any Holder of Old Notes who wishes to tender Old Notes pursuant to the
guaranteed delivery procedures described above must ensure that the Exchange
Agent receives the Notice of Guaranteed Delivery prior to 5:00 p.m., New York
City time, on the Expiration Date. Upon request of the Exchange Agent, a Notice
of Guaranteed Delivery will be sent to Holders who wish to tender their Old
Notes according to the guaranteed delivery procedures set forth above.
See "The Exchange Offer -- Guaranteed Delivery Procedures" section
of the Prospectus.
3. Tender by Holder. Only a Holder of Old Notes may tender such Old
Notes in the Exchange Offer. Any beneficial Holder of Old Notes who is not the
registered Holder and who wishes to tender should arrange with the registered
Holder to execute and deliver this Letter of Transmittal on his behalf or must,
prior to completing and executing this Letter of Transmittal and delivering his
Old Notes, either make appropriate arrangements to register ownership of the Old
Notes in such Holder's name or obtain a properly completed bond power from the
registered Holder.
4. Partial Tenders. Tenders of Old Notes will be accepted only in
integral multiples of $1,000. If less than the entire principal amount of any
Old Notes is tendered, the tendering Holder should fill in the principal amount
tendered in the third column of the box entitled "Description of Old Notes"
above. The entire principal amount of Old Notes delivered to the Exchange Agent
will be deemed to have been tendered unless otherwise indicated. If the entire
principal amount of all Old Notes is not tendered, then Old Notes for the
principal amount of Old Notes not tendered and New Notes issued in exchange for
any Old Notes accepted will be sent to the Holder at his or her registered
address, unless a different address is provided in the appropriate box on this
Letter of Transmittal, promptly after the Old Notes are accepted for exchange.
5. Signatures on this Letter of Transmittal; Bond Powers and
Endorsements; Medallion Guarantee of Signatures. If this Letter of Transmittal
(or facsimile hereof) is signed by the record Holder(s) of the Old Notes
tendered
<PAGE>
EXHIBIT 99.1
Page 14
hereby, the signature must correspond with the name(s) as written on the face of
the Old Notes without alteration, enlargement or any change whatsoever. If this
Letter of Transmittal is signed by a participant in the Book-Entry Transfer
Facility, the signature must correspond with the name as it appears on the
security position listing as the Holder of the Old Notes.
If this Letter of Transmittal (or facsimile hereof) is signed by the
registered Holder or Holders of Old Notes listed and tendered hereby and the New
Notes issued in exchange therefor is to be issued (or any untendered principal
amount of Old Notes is to be reissued) to the registered Holder, the said Holder
need not and should not endorse any tendered Old Notes, nor provide a separate
bond power. In any other case, such Holder must either properly endorse the Old
Notes tendered or transmit a properly completed separate bond power with this
Letter of Transmittal, with the signatures on the endorsement or bond power
guaranteed by an Eligible Institution.
If this Letter of Transmittal (or facsimile hereof) is signed by a
person other than the registered Holder or Holders of any Old Notes listed, such
Old Notes must be endorsed or accompanied by appropriate bond powers, in each
case signed as the name of the registered Holder or Holders appears on the Old
Notes.
If this Letter of Transmittal (or facsimile hereof) or any Old Notes of
bond powers are signed by trustees, executors, administrators, guardians,
attorneys-in-fact, or 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 so to act must be submitted with this Letter of Transmittal.
Endorsements on Old Notes or signatures on bond powers required by this
Instruction 5 must be guaranteed by an Eligible Institution.
No signature guarantee is required if (i) this Letter of Transmittal is
signed by the registered holder(s) of the Old Notes tendered herewith (or by a
participant in the Book-Entry Transfer Facility whose name appears on a security
position listing as the owner of the tendered Old Notes) and the issuance of New
Notes (and any Old Notes not tendered or not accepted) are to be issued directly
to such registered holder(s) (or, if signed by a participant in the Book-Entry
Transfer Facility, any New Notes or Old Notes not tendered or not accepted are
to be deposited to such participant's account at such Book-Entry Transfer
Facility) and neither the box entitled "Special Delivery Instructions" nor the
box entitled "Special Registration Instructions" has been completed, or (ii)
such Old Notes are tendered for the
<PAGE>
EXHIBIT 99.1
Page 15
account of an Eligible Institution. In all other cases, all signatures on this
Letter of Transmittal must be guaranteed by an Eligible Institution.
6. Special Registration and Delivery Instructions. Tendering holders
should indicate, in the applicable box or boxes, the name and address (or
account at the Book-Entry Transfer Facility) to which New Notes or substitute
Old Notes for principal amounts not tendered or not accepted for exchange are to
be issued or sent, if different from the name and address of the person signing
this Letter of Transmittal. In the case of issuance in a different name, the
taxpayer identification or social security number of the person named must also
be indicated.
7. Transfer Taxes. The Company will pay all transfer taxes, if any,
applicable to the exchange of Old Notes pursuant to the Exchange Offer. If,
however, New Notes or Old Notes for principal amounts not tendered or accepted
for exchange are to be delivered to, or are to be registered or issued in the
name of, any person other than the registered Holder of the Old Notes tendered
hereby, or if tendered Old Notes are registered in the name of any person other
than the person signing this Letter of Transmittal, or if a transfer tax is
imposed for any reason other than the exchange of Old Notes pursuant to the
Exchange Offer, then the amount of any such transfer taxes (whether imposed on
the registered Holder or any other persons) will be payable by the tendering
Holder. If satisfactory evidence of payment of such taxes or exemption therefrom
is not submitted with this Letter of Transmittal, the amount of such transfer
taxes will be billed directly to such tendering Holder.
EXCEPT AS PROVIDED IN THIS INSTRUCTION 7, IT WILL NOT BE
NECESSARY FOR TRANSFER TAX STAMPS TO BE AFFIXED TO THE OLD
NOTES LISTED IN THIS LETTER OF TRANSMITTAL.
8. Validity of Tenders. All questions as to the validity, form,
eligibility (including time of receipt), and acceptance 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 right to reject any and all
Old Notes not validly tendered or any Old Notes, the Company's acceptance of
which would, in the opinion of the Company or its counsel, be unlawful. The
Company also reserves the right to waive any conditions of the Exchange Offer or
defects or irregularities in tenders of Old Notes as to any ineligibility of any
holder who seeks to tender Old Notes in the Exchange Offer. The interpretation
of the terms and conditions of the Exchange Offer (includes this Letter of
Transmittal and the instructions hereto) by the Company shall 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. The Company will use reasonable efforts to
<PAGE>
EXHIBIT 99.1
Page 16
give notification of defects or irregularities with respect to tenders of Old
Notes, but shall not incur any liability for failure to give such notification.
9. Waiver of Conditions. The Company reserves the absolute right to
waive, in whole or part, any of the conditions to the Exchange Offer set forth
in the Prospectus.
10. No Conditional Tender. No alternative, conditional, irregular or
contingent tender of Old Notes on transmittal of this Letter of Transmittal
will be accepted.
11. Mutilated, Lost, Stolen or Destroyed Old Notes. Any Holder whose
Old Notes have been mutilated, lost, stolen or destroyed should contact the
Exchange Agent at the address indicated above for further instructions.
12. Requests for Assistance or Additional Copies. Requests for
assistance or for additional copies of the Prospectus or this Letter of
Transmittal may be directed to the Exchange Agent at the address or telephone
number set forth on the cover page of this Letter of Transmittal. Holders may
also contact their broker, dealer, commercial bank, trust company or other
nominee for assistance concerning the Exchange Offer.
13. Acceptance of Tendered Old Notes and Issuance of New Notes; Return
of Old Notes. Subject to the terms and conditions of the Exchange Offer, the
Company will accept for exchange all validly tendered Old Notes as soon as
practicable after the Exchange Date and will issue New Notes therefor as soon as
practicable thereafter. For purposes of the Exchange Offer, the Company shall be
deemed to have accepted tendered Old Notes when, as and if the Company has given
written and oral notice thereof to the Exchange Agent. If any tendered Old Notes
are not exchanged pursuant to the Exchange Offer for any reason, such
unexchanged Old Notes will be returned, without expense, to the undersigned at
the address shown above (or credited to the undersigned's account at the
Book-Entry Transfer Facility designated above) or at a different address as may
be indicated under the box entitled "Special Delivery Instructions."
<PAGE>
EXHIBIT 99.1
Page 17
14. Withdrawal. Tenders may be withdrawn only pursuant to the limited
withdrawal rights set forth in the Prospectus under the caption "The Exchange
Offer -- Withdrawal of Tenders."
IMPORTANT: THIS LETTER OF TRANSMITTAL OR A MANUALLY SIGNED FACSIMILE
HEREOF (TOGETHER WITH THE OLD NOTES) WHICH MUST BE DELIVERED BY BOOK-ENTRY
TRANSFER OR IN ORIGINAL HARD COPY FROM) OR THE NOTICE OF GUARANTEED DELIVERY
MUST BE RECEIVED BY THE EXCHANGE AGENT PRIOR TO THE EXPIRATION TIME.
<PAGE>
EXHIBIT 99.2
------------
NOTICE OF GUARANTEED DELIVERY
for
Tender of 11 3/4% First Mortgage Notes due 2003, Series A
in Exchange for
11 3/4% First Mortgage Notes due 2003, Series B
STATIA TERMINALS INTERNATIONAL NV.
STATIA TERMINALS CANADA, INCORPORATED
This form or one substantially equivalent hereto must be used by a
holder to accept the Exchange Offer of 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 "Company"), who wishes to tender 11 3/4% First Mortgage Notes
due 2003, Series A (the "Old Notes") to the Exchange Agent pursuant to the
guaranteed delivery procedures described in "The Exchange Offer--Guaranteed
Delivery Procedures" of the Company's Prospectus, dated February __, 1997 (the
"Prospectus") and in Instruction 2 to the related Letter of Transmittal. Any
holder who wishes to tender Old Notes pursuant to such guaranteed delivery
procedures must ensure that the Exchange Agent receives this Notice of
Guaranteed Delivery prior to the Expiration Date (as defined below) of the
Exchange Offer. Capitalized terms used but not defined herein have the meanings
ascribed to them in the Prospectus or the Letter of Transmittal.
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON
_______________, 1997, UNLESS EXTENDED (THE "EXPIRATION DATE"). OLD NOTES
TENDERED IN THE EXCHANGE OFFER MAY BE WITHDRAWN AT ANY TIME PRIOR TO THE
EXPIRATION DATE.
The Exchange Agent for the Exchange Offer is:
MARINE MIDLAND BANK
By Registered or Certified
Mail or by Overnight Courier: By Hand:
Marine Midland Bank Marine Midland Bank
140 Broadway 140 Broadway
Level A Level A
New York, NY 10005-1180 New York, NY 10005-1180
Attn: Corporate Trust Operations Attn: Corporate Trust Operations
<PAGE>
EXHIBIT 99.2
Page 2
By Facsimile:
Marine Midland Bank
Corporate Trust Operations
Facsimile: (212) 658-2292
Confirm by Telephone:
(212) 658-5931
_____________________________________________
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN
AS SET FORTH ABOVE, OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE OTHER THAN AS
SET FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY.
THIS NOTICE OF GUARANTEED DELIVERY IS NOT TO BE USED TO GUARANTEE
SIGNATURES. IF A SIGNATURE ON A LETTER OF TRANSMITTAL IS REQUIRED TO BE
GUARANTEED BY AN "ELIGIBLE INSTITUTION" UNDER THE INSTRUCTIONS THERETO, SUCH
SIGNATURE GUARANTEE MUST APPEAR IN THE APPLICABLE SPACE PROVIDED BOX ON THE
LETTER OF TRANSMITTAL FOR GUARANTEE OF SIGNATURES.
<PAGE>
EXHIBIT 99.2
Page 3
Ladies and Gentlemen:
The undersigned hereby tenders to the Company, upon the terms and
subject to the conditions set forth in the Prospectus and the related Letter of
Transmittal, receipt of which is hereby acknowledged, the principal amount of
Old Notes set forth below pursuant to the guaranteed delivery procedures set
forth in the Prospectus and in Instruction 2 of the Letter of Transmittal.
The undersigned hereby tenders the Old Notes listed below:
CERTIFICATE NUMBER(S) AGGREGATE AGGREGATE
(IF KNOWN) OF OLD NOTES OR PRINCIPAL PRINCIPAL
ACCOUNT NUMBER AT THE AMOUNT AMOUNT
BOOK-ENTRY FACILITY REPRESENTED TENDERED
__________________________ ___________ _________
PLEASE SIGN AND COMPLETE
Signatures of Registered Holder(s) or
Authorized Signatory:
______________________________
Date:_________________________
______________________________
Address:
Name(s) of Registered Holder(s): ______________________________
______________________________ ______________________________
______________________________ Area Code and Telephone No.:
______________________________
<PAGE>
EXHIBIT 99.2
Page 4
This Notice of Guaranteed Delivery must be signed by the Holder(s)
exactly as their name(s) appear on certificates for Old Notes or on a security
position listing as the owner of Old Notes, or by person(s) authorized to become
Holder(s) by endorsements and documents transmitted with this Notice of
Guaranteed Delivery. If signature is by a trustee, executor, administrator,
guardian, attorney-in-fact, officer or other person acting in a fiduciary or
representative capacity, such person must provide the following information.
PLEASE PRINT NAME(S) AND ADDRESS(ES)
Names(s):
____________________________________________
____________________________________________
____________________________________________
Capacity:
____________________________________________
Address(es):
____________________________________________
____________________________________________
<PAGE>
EXHIBIT 99.2
Page 5
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a firm which is a member of a registered national
securities exchange or of the National Association of Securities Dealers, Inc.,
or is a commercial bank or trust company having an office or correspondent in
the United States, or is otherwise an "eligible guarantor institution" within
the meaning of Rule 17Ad-15 under the Securities Exchange Act of 1934,
guarantees deposit with the Exchange Agent of either (i) the Letter of
Transmittal (or facsimile thereof), together with the Old Notes tendered hereby
in proper form for transfer (or confirmation of the book-entry transfer of such
Old Notes into the Exchange Agent's account at the Book-Entry Transfer Facility
described in the Prospectus under the caption "The Exchange Offer--Guaranteed
Delivery Procedures" and in the Letter of Transmittal) and any other required
documents, or (ii) a properly transmitted Agent's Message as described in the
Prospectus under the caption "Exchange Offer--Procedures For Tendering," as the
case may be, all by 5:00 p.m., New York City time, within three New York Stock
Exchange trading days following the Expiration Date.
Name of Firm:
___________________________ ________________________________
(AUTHORIZED SIGNATURE)
Address:
___________________________ Name:___________________________
(INCLUDE ZIP CODE)
Title:____________________________
Area Code and Tel. Number: (PLEASE TYPE OR PRINT)
___________________________ Date:______________________, 19__
DO NOT SEND OLD NOTES WITH THIS FORM. ACTUAL SURRENDER OF OLD NOTES MUST BE MADE
PURSUANT TO, AND BE ACCOMPANIED BY A PROPERLY COMPLETED AND DULY EXECUTED LETTER
OF TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS.
<PAGE>
EXHIBIT 99.2
Page 6
INSTRUCTIONS FOR NOTICE OF GUARANTEED DELIVERY
1. Delivery of this Notice of Guaranteed Delivery. A properly completed
and duly executed copy of this Notice of Guaranteed Delivery and any other
documents required by this Notice of Guaranteed Delivery must be received by the
Exchange Agent at its address set forth herein prior to the Expiration Date. The
method of delivery of this Notice of Guaranteed Delivery and any other required
documents to the Exchange Agent is at the election and sole risk of the holder,
and the delivery will be deemed made only when actually received by the Exchange
Agent. If delivery is by mail, registered mail with return receipt requested,
properly insured, is recommended. As an alternative to delivery by mail, the
holders may wish to consider using an overnight or hand delivery service. In all
cases, sufficient time should be allowed to assure timely delivery. For a
description of the guaranteed delivery procedures, see Instruction 2 of the
Letter of Transmittal.
2. Signatures on this Notice of Guaranteed Delivery. If this Notice of
Guaranteed Delivery is signed by the registered holder(s) of the Old Notes
referred to herein, the signature must correspond with the name(s) written on
the face of the Old Notes without alteration, enlargement, or any change
whatsoever. If this Notice of Guaranteed Delivery is signed by a participant of
the Book-Entry Transfer Facility whose name appears on a security position
listing as the owner of the Old Notes, the signature must correspond with the
name shown on the security position listing as the owner of the Old Notes.
If this Notice of Guaranteed Delivery is signed by a person
other than the registered holder(s) of any Old Notes listed or a
participant of the Book-Entry Transfer Facility, this Notice of
Guaranteed Delivery must be accompanied by appropriate bond powers,
signed as the name of the registered holder(s) appears on the Old Notes
or signed as the name of the participant shown on the Book-Entry
Transfer Facility's security position listing.
If this Notice of Guaranteed Delivery is signed by a trustee,
executor, administrator, guardian, attorney-in-fact, officer of a
corporation, or other person acting in a fiduciary or representative
capacity, such person should so indicate when signing and submit with
the Letter of Transmittal evidence satisfactory to the Company of such
person's authority to so act.
3. Requests for Assistance or Additional Copies. Questions and requests
for assistance and requests for additional copies of the Prospectus may be
directed to the Exchange Agent at the address specified in the Prospectus.
Holders may also contact their broker, dealer, commercial bank, trust company,
or other nominee for assistance concerning the Exchange Offer.
<PAGE>
EXHIBIT 99.3
Letter to Brokers
for
Tender of 11 3/4% First Mortgage Notes Due 2003, Series A
in Exchange for
11 3/4% First Mortgage Notes Due 2003, Series B
STATIA TERMINALS INTERNATIONAL N.V.
STATIA TERMINALS CANADA, INCORPORATED
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON , 1997,
UNLESS EXTENDED (THE "EXPIRATION DATE").
OLD NOTES TENDERED IN THE EXCHANGE OFFER MAY BE
WITHDRAWN AT ANY TIME PRIOR TO THE EXPIRATION DATE.
To Registered Holders and Depository
Trust Company Participants:
We are enclosing herewith the material listed below relating to the
offer by 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 "Company"), to
exchange the Company's 11 3/4% First Mortgage Notes Due 2003, Series B (the "New
Notes"), which have been registered under the Securities Act of 1933, as amended
(the "Securities Act"), for a like principal amount of the Company's issued and
outstanding 11 3/4% First Mortgage Notes Due 2003, Series A (the "Old Notes")
upon the terms and subject to the conditions set forth in the Company's
Prospectus, dated February 10, 1997, and the related Letter of Transmittal
(which together constitute the "Exchange Offer").
Enclosed herewith are copies of the following documents:
1. Prospectus dated February 10, 1997;
<PAGE>
EXHIBIT 99.3
Page 2
2. Letter of Transmittal (together with accompanying Substitute
Form W-9 Guidelines);
3. Notice of Guaranteed Delivery; and
4. Letter which may be sent to your clients for whose account you
hold Old Notes in your name or in the name of your nominee,
with space provided for obtaining such client's instruction
with regard to the Exchange Offer.
We urge you to contact your clients promptly. Please note that the
Exchange Offer will expire on the Expiration Date unless extended.
The Exchange Offer is not conditioned upon any minimum number of Old
Notes being tendered.
Pursuant to the Letter of Transmittal, each holder of Old Notes will
represent to the Company that (i) the New Notes acquired pursuant to the
Exchange Offer are being acquired in the ordinary course of business of the
undersigned, (ii) neither the undersigned nor any such other person has an
arrangement or understanding with any person to participate in the distribution
within the meaning of the Securities Act of such New Notes, (iii) if the
undersigned is not a broker-dealer, or is a broker-dealer but will not receive
New Notes for its own account in exchange for Old Notes, neither the undersigned
nor any such other person is engaged in or intends to participate in the
distribution of such New Notes and (iv) neither the undersigned nor any such
other person is an "affiliate" of the Company within the meaning of Rule 405
under the Securities Act or, if the undersigned is an "affiliate," that the
undersigned will comply with the registration and prospectus delivery
requirements of the Securities Act to the extent applicable. If the undersigned
is a broker-dealer (whether or not it is also an "affiliate") that will receive
New Notes for its own account in exchange for Old Notes, it represents that such
Old Notes were acquired as a result of market-making activities or other trading
activities, and it acknowledges that it will deliver a prospectus meeting the
requirements of the Securities Act in connection with any resale of such New
Notes. By acknowledging that it will deliver and by delivering a prospectus
meeting the requirements of the Securities Act in connection with any resale of
such New Notes, the undersigned is not deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
<PAGE>
EXHIBIT 99.3
Page 3
The enclosed Letter to Clients contains an authorization by the
beneficial owners of the Old Notes for you to make the foregoing
representations.
The Company will not pay any fee or commission to any broker or dealer
or to any other persons (other than the Exchange Agent) in connection with the
solicitation of tenders of Old Notes pursuant to the Exchange Offer. The Company
will pay or cause to be paid any transfer taxes payable on the transfer of Old
Notes to it, except as otherwise provided in Instruction 7 of the enclosed
Letter of Transmittal.
Additional copies of the enclosed material may be obtained from the
undersigned.
Very truly yours,
MARINE MIDLAND BANK
<PAGE>
EXHIBIT 99.4
------------
Letter to Clients
for
Tender of 11 3/4% First Mortgage Notes Due 2003, Series A
in Exchange for
11 3/4% First Mortgage Notes Due 2003, Series B
STATIA TERMINALS INTERNATIONAL N.V.
STATIA TERMINALS CANADA, INCORPORATED
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME,ON , 1997,
UNLESS EXTENDED (THE "EXPIRATION DATE").
OLD NOTES TENDERED IN THE EXCHANGE OFFER MAY BE
WITHDRAWN AT ANY TIME PRIOR TO THE EXPIRATION DATE.
To Our Clients:
We are enclosing herewith a Prospectus, dated February 10, 1997, of
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 "Company"), and a
related Letter of Transmittal (which together constitute the "Exchange Offer")
relating to the offer by the Company, to exchange the Company's 11 3/4% First
Mortgage Notes Due 2003, Series B (the "New Notes"), which have been
registered under the Securities Act of 1933, as amended (the "Securities
Act"), for a like principal amount of the Company's issued and outstanding 11
3/4% First Mortgage Notes Due 2003, Series A (the "Old Notes"), upon the terms
and subject to the conditions set forth in the Exchange Offer.
The Exchange Offer is not conditioned upon any minimum number of Old
Notes being tendered.
We are the holder of record of Old Notes held by us for your own
account. A tender of such Old Notes can be made only by us as the record holder
and
<PAGE>
EXHIBIT 99.4
Page 2
pursuant to your instructions. The Letter of Transmittal is furnished to you for
your information only and cannot be used by you to tender Old Notes held by us
for your account.
We request instructions as to whether you wish to tender any or all of
the Old Notes held by us for your account pursuant to the terms and conditions
of the Exchange Offer. We also request that you confirm that we may on your
behalf make the representations contained in the Letter of Transmittal.
Pursuant to the Letter of Transmittal, each holder of Old Notes will
represent to the Company that (i) the New Notes acquired pursuant to the
Exchange Offer are being acquired in the ordinary course of business of the
undersigned, (ii) neither the undersigned nor any such other person has an
arrangement or understanding with any person to participate in the distribution
within the meaning of the Securities Act of such New Notes, (iii) if the
undersigned is not a broker-dealer, or is a broker-dealer but will not receive
New Notes for its own account in exchange for Old Notes, neither the undersigned
nor any such other person is engaged in or intends to participate in the
distribution of such New Notes and (iv) neither the undersigned nor any such
other person is an "affiliate" of the Company within the meaning of Rule 405
under the Securities Act or, if the undersigned is an "affiliate," that the
undersigned will comply with the registration and prospectus delivery
requirements of the Securities Act to the extent applicable. If the undersigned
is a broker-dealer (whether or not it is also an "affiliate") that will receive
New Notes for its own account in exchange for Old Notes, it represents that such
Old Notes were acquired as a result of market-making activities or other trading
activities, and it acknowledges that it will deliver a prospectus meeting the
requirements of the Securities Act in connection with any resale of such New
Notes. By acknowledging that it will deliver and by delivering a prospectus
meeting the requirements of the Securities Act in connection with any resale of
such New Notes, the undersigned is not deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
Very truly yours,
<PAGE>
EXHIBIT 99.5
Instruction to Registered Holder and/or Book
Entry Transfer Participant from Beneficial Owner
for
Tender of 11 3/4% First Mortgage Notes Due 2003, Series A
in Exchange for
11 3/4% First Mortgage Notes Due 2003, Series B
STATIA TERMINALS INTERNATIONAL N.V.
STATIA TERMINALS CANADA, INCORPORATED
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON , 1997,
UNLESS EXTENDED (THE "EXPIRATION DATE").
OLD NOTES TENDERED IN THE EXCHANGE OFFER MAY BE
WITHDRAWN AT ANY TIME PRIOR TO THE EXPIRATION DATE.
To Registered Holder and/or Participant
of the Book-Entry Transfer Facility:
The undersigned hereby acknowledges receipt of the Prospectus dated
, 1997 (the "Prospectus") of 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 "Company"), and the accompanying Letter of Transmittal (the
"Letter of Transmittal"), that together constitute the Company's offer (the
"Exchange Offer") to exchange the Company's 11 3/4% First Mortgage Notes Due
2003, Series B (the "New Notes") for all of the Company's outstanding 11 3/4%
First Mortgage Notes Due 2003, Series A (the "Old Notes"). Capitalized terms
used but not defined herein have the meanings ascribed to them in the
Prospectus.
This will instruct you, the registered holder and/or book-entry
transfer facility participant, as to the action to be taken by you relating to
the Exchange Offer with respect to the Old Notes held by you for the account of
the undersigned.
The aggregate face amount of the Old Notes held by you for the account
of the undersigned is (FILL IN AMOUNT):
<PAGE>
EXHIBIT 99.5
Page 2
$__________ of the 11 3/4% First Mortgage Notes Due 2003, Series A.
With respect to the Exchange Offer, the undersigned hereby instructs
you (CHECK APPROPRIATE BOX):
To TENDER the following Old Notes held by you for the account of the
undersigned (INSERT PRINCIPAL AMOUNT OF OLD NOTES TO BE
TENDERED (IF ANY)): $ ___________
Not to TENDER any Old Notes held by you for the account of the
undersigned.
If the undersigned instructs you to tender the Old Notes held by you
for the account of the undersigned, it is understood that you are authorized to
make, on behalf of the undersigned (and the undersigned, by its signature below,
hereby makes to you), the representation and warranties contained in the Letter
of Transmittal that are to be made with respect to the undersigned as a
beneficial owner, including, but not limited to, the representations, that (i)
the New Notes acquired pursuant to the Exchange Offer are being acquired in the
ordinary course of business of the undersigned, (ii) neither the undersigned nor
any such other person has an arrangement or understanding with any person to
participate in the distribution within the meaning of the Securities Act of
1933, as amended (the "Securities Act") of such New Notes, (iii) if the
undersigned is not a broker-dealer, or is a broker-dealer but will not receive
New Notes for its own account in exchange for Old Notes, neither the undersigned
nor any such other person is engaged in or intends to participate in the
distribution of such New Notes and (iv) neither the undersigned nor any such
other person is an "affiliate" of the Company within the meaning of Rule 405
under the Securities Act or, if the undersigned is an "affiliate," that the
undersigned will comply with the registration and prospectus delivery
requirements of the Securities Act to the extent applicable. If the undersigned
is a broker-dealer (whether or not it is also an "affiliate") that will receive
New Notes for its own account in exchange for Old Notes, it represents that such
Old Notes were acquired as a result of market-making activities or other trading
activities, and it acknowledges that it will deliver a prospectus meeting the
requirements of the Securities Act in connection with any resale of such New
Notes. By acknowledging that it will deliver and by delivering a prospectus
meeting the requirements of the Securities Act in connection with any resale of
such New Notes, the undersigned is
<PAGE>
EXHIBIT 99.5
Page 3
not deemed to admit that it is an "underwriter" within the meaning of the
Securities Act.
SIGN HERE
Name of beneficial owner(s): ______________________________________________
Signature(s):______________________________________________________________
Name(s) (please print):____________________________________________________
Address:___________________________________________________________________
Telephone Number:__________________________________________________________
Taxpayer Identification or Social Security Number:_________________________
Date:______________________________________________________________________
