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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
May 4, 1996
(Date of earliest event reported)
GREAT LAKES CHEMICAL CORPORATION
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
DELAWARE 1-6450 95-1765035
(State of Incorporation) (Commission File No.) (IRS Employer Identification No.)
</TABLE>
ONE GREAT LAKES BOULEVARD, P.O. BOX 2200,
WEST LAFAYETTE, INDIANA 47906
(Address of principal executive offices, including zip code)
(317) 497-6100
(Registrant's telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS.
On May 4, 1996, Great Lakes Chemical Corporation (the "Company") entered
into a Pre-Acquisition Agreement with Nowsco Well Service Ltd. ("Nowsco")
pursuant to which the Company has agreed, subject to the terms and conditions of
the Pre-Acquisition Agreement, to make an offer (the "Offer") to purchase all of
the outstanding common shares (the "Shares") of Nowsco at a price of Cdn. $30.90
per share payable in cash. The Company has entered into a commitment letter with
The Chase Manhattan Bank, N.A. to establish a bank credit facility providing for
borrowings up to $600 million to finance the Offer.
The foregoing description of the Pre-Acquisition Agreement is qualified in
its entirety by reference to the Pre-Acquisition Agreement, a copy of which is
incorporated herein by reference to Exhibit (10) to this Current Report on Form
8-K. A copy of the Press Release issued by the Company on May 4, 1996 announcing
the Company's entering into the Pre-Acquisition Agreement is attached as Exhibit
(99).
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits
(10) Pre-Acquisition Agreement, dated May 4, 1996, between Great Lakes
Chemical Corporation and Nowsco Well Service Ltd.
(99) Great Lakes Chemical Corporation Press Release dated May 4, 1996.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
<TABLE>
<S> <C>
GREAT LAKES CHEMICAL CORPORATION
Dated: May 4, 1996 By: /s/ ROBERT T. JEFFARES
-----------------------------------
Name: Robert T. Jeffares
Title: Executive Vice President
and Chief Financial Officer
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EXHIBIT INDEX
<TABLE>
<CAPTION>
PAPER (P) OR
EXHIBIT DESCRIPTION ELECTRONIC (E)
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<C> <S> <C>
(10) Pre-Acquisition Agreement, dated May 4, 1996, between Great Lakes E
Chemical Corporation and Nowsco Well Service Ltd.
(99) Great Lakes Chemical Corporation Press Release dated May 4, 1996 E
</TABLE>
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Exhibit 10
THE PRE-ACQUISITION AGREEMENT entered into this 4th day of May, 1996.
B E T W E E N:
GREAT LAKES CHEMICAL CORPORATION, a
corporation existing under the laws of
Delaware,
(hereinafter called "GLCC")
-- and --
NOWSCO WELL SERVICE LTD., a corporation
existing under the laws of Alberta,
(hereinafter called "the Company")
RECITALS
WHEREAS:
1. There is an outstanding take-over bid to the shareholders of the Company
offering to purchase all of the outstanding common shares of the Company at
a price of Cdn.$27.00 per common share;
2. The board of directors of the Company wishes to encourage GLCC to make a
take-over bid to the shareholders of the Company offering to purchase all
of the outstanding common shares of the Company at a price of Cdn.$30.90
per common share;
3. The board of directors of the Company has determined that it would be in
the best interests of the Company and its shareholders to recommend
acceptance of the GLCC offer to the shareholders of the Company, to
cooperate with GLCC and take all reasonable action to support the GLCC
offer and to waive the application of the Company's Shareholder Protection
Rights Agreement to the GLCC offer and certain other offers;
4. The board of directors of the Company has determined that it would be in
the best interests of the Company and its shareholders to enter into this
Agreement; and
5. GLCC will make an offer subject to the terms and conditions of this
Agreement.
NOW THEREFORE IN CONSIDERATION of the mutual covenants hereinafter set out,
the parties hereto hereby agree as follows:
ARTICLE I
THE OFFER
1.1 THE OFFER. Subject to the terms and conditions of this Agreement GLCC
agrees to mail on or before May 8, 1996 to the holders of common shares of
the Company, an offer to purchase all of the common shares (including the
associated rights issued pursuant to the Company's Shareholder Protection
Rights Agreement, hereinafter called the "Rights" and together with the
common shares called the "Shares" and the holders of Shares are hereinafter
called "Shareholders") at a price of Cdn.$30.90 per Share, subject to the
terms and conditions set out in Schedule "A" to this Agreement (the
"Offer") as the same
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may be amended pursuant to the terms hereof. GLCC further agrees that it
will not amend the terms of the Offer other than to increase the
consideration payable thereunder, to extend the expiry thereof or to waive
any conditions thereof, except with the prior consent of the Company.
1.2 COMPANY APPROVAL OF THE OFFER.
(a) The Company represents that its board of directors, upon consultation
with its advisors, has determined unanimously that:
(i) the Offer is fair to the Shareholders and is in the best
interests of the Company and the Shareholders;
(ii) the board of directors will recommend that Shareholders accept
the Offer; and
(iii)this Agreement is in the best interests of the Company and the
Shareholders;
(b) The Company represents that the board of directors has received an
opinion from the Company's financial advisors that the Offer is fair
from a financial point of view to the Shareholders.
1.3 COMPANY COOPERATION. The Company covenants to cooperate with GLCC, to take
all reasonable action to support the Offer and to provide GLCC with a draft
copy of any Directors' Circular to be issued, from time to time, prior to
the mailing thereof, on a confidential basis, and to provide GLCC with a
reasonable opportunity to review and provide comments thereon. The Company
further covenants to use reasonable commercial efforts to mail the
Directors' Circular to be issued in connection with the mailing of the
Offer on the same date that GLCC mails the Offer to the Shareholders.
1.4 JOINT PRESS RELEASE AND PUBLIC DISCLOSURE. The parties agree to jointly
issue a press release as soon as practicable in a mutually agreeable form
and the Company agrees to file a copy of this Agreement as soon as possible
with the securities regulatory authorities having jurisdiction over the
Company.
1.5 POST OFFER COVENANTS. If GLCC takes up and pays for Shares pursuant to the
Offer, GLCC and the Company agree to use all reasonable efforts to enable
GLCC to acquire the balance of the Shares as soon as practicable after
completion of the Offer by way of compulsory acquisition, arrangement,
amalgamation or other type of acquisition transaction carried out for a
consideration per Share of not less than Cdn.$30.90 per Share. The Company
agrees and represents that its board of directors has determined
unanimously to use its and their respective reasonable efforts to enable
GLCC to elect or appoint all of the directors of the Company as soon as
possible after GLCC takes up and pays for at least 50% of the Shares
pursuant to the Offer.
1.6 SHAREHOLDER PROTECTION RIGHTS PLAN.
(a) The Company represents that its board of directors has resolved to
waive the application of the Shareholder Protection Rights Plan to the
Offer and to any other actions taken by GLCC in furtherance of
acquiring all of the Shares and covenants to take all action necessary
pursuant to the Shareholder Protection Rights Plan to effect such
waiver, such waiver to become effective no later than the date (the
"Waiver Date") that is the earlier of June 18, 1996 or the initial
expiry date of the Offer, as set forth on Schedule "A" hereto, as it
may be extended from the time to time pursuant to the terms of the
Offer as necessary solely to satisfy the conditions of the Offer
relating to approvals required under the Investment Canada Act, the
Competition Act or the Hart-Scott- Rodino Antitrust Improvements Act
of 1976.
(b) The Company covenants and agrees and represents that its board of
directors has resolved not to waive the application of the Shareholder
Protection Rights Plan or to redeem any of the outstanding Rights or
take any other action which would limit the application of the
Shareholder Protection Rights Plan to any transaction other than an
Acquisition Proposal (as defined in section 2.2) that is in the form
of a take-over bid circular made to all Shareholders, in which case
such waiver will not be effective prior to the Waiver Date.
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1.7 OUTSTANDING STOCK OPTIONS. The Company agrees and represents that its
board of directors has unanimously resolved to use its and their respective
reasonable efforts to encourage all persons holding options to purchase
Shares pursuant to the Company's employee stock option plan and other
compensation arrangements or otherwise, to exercise their options prior to
the expiry of the Offer and to tender all Shares issued in connection
therewith to the Offer. The Company further agrees and represents that the
board of directors of the Company has also resolved and has authorized and
directed the Company to, cause the vesting of option entitlements under its
employee stock option plans and other compensation arrangements to
accelerate prior to or concurrent with the expiry of the Offer, such that
all outstanding Options to acquire Shares are exercisable prior to or
concurrent with the expiry of the Offer, and to arrange for all Shares that
are fully paid thereunder to be distributed to those persons entitled
thereto so as to be able to be tendered into the Offer and to thereafter
satisfy all other obligations of the Company under such plans or, upon the
acquisition by GLCC of Shares pursuant to the Offer, to cause all
entitlements under such arrangements to terminate upon the payment of an
amount in respect of each outstanding option equal to the difference
between the exercise price thereof and the Offer price.
ARTICLE II
COVENANTS OF THE COMPANY
2.1 ORDINARY COURSE OF BUSINESS. The Company covenants and agrees that, prior
to the time (the "Effective Time") of the appointment or election to the
board of directors of the Company of persons designated by GLCC pursuant to
section 1.5, unless GLCC shall otherwise agree in writing or as otherwise
expressly contemplated or permitted by this Agreement:
(a) the Company shall, and shall cause each of its direct and indirect
subsidiaries (including Nowsco Americas S.A. ("NASA")) (collectively
its "Subsidiaries") to, conduct its and their respective business only
in and not take any action except in, the usual, ordinary and regular
course of business and consistent with past practice;
(b) the Company shall not directly or indirectly do or permit to occur any
of the following:
(i) issue, sell, pledge, lease, dispose of, encumber or agree to
issue, sell, pledge, lease, dispose of or encumber (or permit any
of its Subsidiaries to issue, sell, pledge, lease, dispose of,
encumber or agree to issue, sell, pledge, lease, dispose of or
encumber):
(A) any additional shares of, or any options, warrants, calls,
conversion privileges or rights of any kind to acquire any
shares of, any capital stock of the Company or any of its
Subsidiaries (other than pursuant to the exercise of
employee stock options currently outstanding), or
(B) except in the ordinary course of business, any assets of the
Company or any of its Subsidiaries;
(ii) amend or propose to amend its articles or by-laws or those of
any of its Subsidiaries;
(iii)split, combine or reclassify any outstanding Shares, or declare,
set aside or pay any dividend (other than as disclosed in writing
to GLCC prior to the date hereof) or other distribution payable
in cash, stock, property or otherwise with respect to the Shares;
(iv) redeem, purchase or offer to purchase (or permit any of its
Subsidiaries to redeem, purchase or offer to purchase) any Shares
or other securities of the Company or any of its Subsidiaries;
(v) reorganize, amalgamate or merge the Company or any of its
Subsidiaries with any other person, corporation, partnership or
other business organization whatsoever;
(vi) acquire or agree to acquire (by merger, amalgamation, acquisition
of stock or assets or otherwise) any person, corporation,
partnership or other business organization or division or acquire
or agree to acquire any material assets; or
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(vii)incur or commit to incur any indebtedness for borrowed money or
issue any debt securities except for the borrowing of working
capital in the ordinary course of business and consistent with
past practice;
(c) the Company shall not, and shall cause each of its Subsidiaries to not
(otherwise than as may be contemplated in section 1.7 and section 2.4
of this Agreement):
(i) enter into or modify any employment, severance, collective
bargaining or similar agreements, policies or arrangements with,
or grant any bonuses, salary increases, severance or termination
pay to, any officers or directors of the Company other than
pursuant to agreements in effect (without amendment) on the date
hereof; or
(ii) in the case of employees who are not officers or directors, take
any action other than in the ordinary, regular and usual course
of business and consistent with past practice (none of which
actions shall be unreasonable or unusual) with respect to the
entering into or modifying of any employment, severance,
collective bargaining or similar agreements, policies or
arrangements or with respect to the grant of any bonuses, salary
increases, stock options, pension benefits, retirement
allowances, deferred compensation, severance or termination pay
or any other form of compensation or profit sharing or with
respect to any increase of benefits payable otherwise than
pursuant to agreements, policies or arrangements in effect
(without amendment) on the date hereof;
(d) the Company shall use its reasonable efforts to cause its current
insurance (or re-insurance) policies not to be cancelled or terminated
or any of the coverage thereunder to lapse, unless simultaneously with
such termination, cancellation or lapse, replacement policies
underwritten by insurance and re-insurance companies of nationally
recognized standing providing coverage equal to or greater than the
coverage under the cancelled, terminated or lapsed policies for
substantially similar premiums are in full force and effect;
(e) the Company shall:
(i) use its reasonable efforts, and cause each of its Subsidiaries
to use its reasonable efforts, to preserve intact their
respective business organizations and goodwill, to keep available
the services of its officers and employees as a group and to
maintain satisfactory relationships with suppliers, agents,
distributors, customers and others having business relationships
with it or its Subsidiaries;
(ii) not take any action, or permit any of its Subsidiaries to take
any action, that would render, or that reasonably may be expected
to render, any representation or warranty made by it in this
Agreement untrue in any material respect at any time prior to the
Effective Time if then made; and
(iii)promptly notify GLCC orally and in writing of any material
adverse change in the normal course of its or any of its
Subsidiaries' businesses or in the operation of its or any of its
Subsidiaries' businesses or in the operation of its or any of its
Subsidiaries' properties, and of any material governmental or
third party complaints, investigations or hearings (or
communications indicating that the same may be contemplated);
(f) the Company shall not settle or compromise any claim brought by any
present, former or purported holder of any securities of the Company
in connection with the transactions contemplated by this Agreement or
the Offer prior to the Effective Time without the prior written
consent of GLCC; and
(g) the Company shall not enter into or modify any contract, agreement,
commitment or arrangement with respect to any of the matters set forth
in this section 2.1 without the prior consent of GLCC.
2.2 NON-SOLICITATION.
(a) The Company shall not, directly or indirectly, through any officer,
director, employee, representative or agent of the Company or any of
its Subsidiaries, solicit or encourage (including by way of
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furnishing information or entering into any form of agreement,
arrangement or understanding) the initiation of any inquiries or
proposals regarding any merger, amalgamation, take-over bid, sale of
substantial assets, sale of treasury shares or similar transactions
involving the Company or any Subsidiaries of the Company (any of the
foregoing inquiries or proposals being referred to herein as an
"Acquisition Proposal"), provided nothing contained in this section
2.2 or other provision of this Agreement shall prevent the board of
directors of the Company from considering, negotiating, approving and
recommending to the Shareholders an unsolicited bona fide written
Acquisition Proposal for which adequate financial arrangements have
been made, which the board of directors of the Company determines in
good faith (after consultation with its financial advisors, and after
receiving a written opinion of outside counsel, or advice of outside
counsel that is reflected in the minutes of the board of directors of
the Company, to the effect that the board of directors is required to
do so in order to discharge properly its fiduciary duties) would, if
consummated in accordance with its terms, result in a transaction more
favourable to the Shareholders than the transaction contemplated by
this Agreement (any such Acquisition Proposal being referred to herein
as a "Superior Proposal").
(b) The Company shall immediately cease and cause to be terminated any
existing discussions or negotiations with any parties (other than
GLCC) with respect to any potential Acquisition Proposal. The Company
agrees not to release any third party from any confidentiality or
standstill agreement to which the Company and such third party is a
party. The Company shall immediately request the return or destruction
of all information provided to any third parties who have entered into
a confidentiality agreement with the Company relating to a potential
Acquisition Proposal and shall use all reasonable efforts to ensure
that such requests are honoured.
(c) The Company shall immediately notify GLCC of any existing Acquisition
Proposals or of any future Acquisition Proposal or any request for
non-public information relating to the Company or any of its
Subsidiaries in connection with an Acquisition Proposal or for access
to the properties, books or records of the Company or any Subsidiary
by any person or entity that informs any member of the board of
directors of the Company or such Subsidiary that it is considering
making, or has made, an Acquisition Proposal. Such notice to GLCC
shall be made, from time to time, orally and in writing and shall
indicate such details of the proposal, inquiry or contact known to
such person as GLCC may reasonably request including the identity of
the person making such proposal, inquiry or contact.
(d) If the board of directors of the Company receives a request for
material non-public information from a party who proposes to the
Company a bona fide Acquisition Proposal and the board of directors of
the Company determines that such proposal is a Superior Proposal
pursuant to section 2.2(a), then, and only in such case, the Company
may, subject to the execution of a confidentiality agreement
substantially similar to that then in effect between the Company and
GLCC provide such party with access to information regarding the
Company; provided that, in respect of any Acquisition Proposal
currently outstanding, no such term need be imposed that would be
inconsistent with, or would render the party unable to make, the
unamended Acquisition Proposal or to complete the unamended
Acquisition Proposal pursuant to the terms thereof. The Company agrees
to send a copy of any such confidentiality agreement to GLCC
immediately upon its execution.
(e) The Company shall ensure that the officers, directors and employees of
the Company and its Subsidiaries and any investment bankers or other
advisors or representatives retained by the Company are aware of the
provisions of this section, and the Company shall be responsible for
any breach of this section 2.2 by such bankers, advisors or
representatives.
2.3 ACCESS TO INFORMATION. Subject to the existing Confidentiality Agreement
between the Company and GLCC dated April 10, 1996, upon reasonable notice,
the Company shall (and shall cause each of its Subsidiaries to) afford
GLCC's officers, employees, counsel, accountants and other authorized
representatives and advisors ("Representatives") reasonable access, during
normal business hours from the date
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hereof and until the expiration of this Agreement, to its properties,
books, contracts and records as well as to its management personnel, and,
during such period, the Company shall (and shall cause each of its
Subsidiaries to) furnish promptly to GLCC all information concerning its
business, properties and personnel as GLCC may reasonably request.
2.4 EMPLOYMENT ARRANGEMENTS. The Company shall have used all reasonable
efforts to have amended any outstanding agreements, understandings,
policies or other arrangements with its senior executive officers or
employees on terms satisfactory to GLCC.
ARTICLE III
FEES AND OTHER ARRANGEMENTS
3.1 (a) If at any time after the execution of this Agreement:
(i) the board of directors has withdrawn, redefined or changed,
during the term of the Offer, any of its recommendations or
determinations referred to in sections 1.2, 1.5 or 1.7 in a
manner adverse to GLCC or shall have resolved to do so;
(ii) the board of directors shall have failed to reaffirm its
recommendation of this Offer by press statement within 5 days
after the public announcement or commencement of any Acquisition
Proposal and in a Directors' Circular within 10 days after the
mailing of any such Acquisition Proposal;
(iii)an Acquisition Proposal is made to the Shareholders or to the
Company, or the outstanding Acquisition Proposal is amended to
increase the consideration offered thereunder and upon the expiry
of the Offer any such other Acquisition Proposal has either been
accepted or has not expired or been withdrawn, and the Minimum
Condition (as defined in Schedule "A" to this Agreement) of the
Offer has not been satisfied;
(iv) any third party acquires 25% or more of the Shares by any means
whatsoever during the term of the Offer; or
(v) during the term of the Offer, the Company breaches in any
material respect any of its representations, warranties or
covenants made in this Agreement, including, without limitation,
the representations and covenants in section 1.6;
(each of the above being a "Fee Event"), then the Company shall pay to
GLCC 3% of the value of the Superior Proposal made to the Shareholders
or the Company during the term of this Agreement, (calculated based on
the offer price per share of any such proposal multiplied by the
number of Shares outstanding on a fully diluted basis,) having the
highest value from time to time and, in any event, not less than
Cdn.$20,900,000 whether or not there is a Superior Proposal, in
immediately available funds to an account designated by GLCC within
one business day after the first to occur of the events described
above and in the event there is more than one Superior Proposal, or a
Superior Proposal is proposed to the Company for the first time after
a fee has been paid to GLCC pursuant to this section, then the fee
required to be paid hereby shall be recalculated and any incremental
fee shall be paid to GLCC within one business day after the event that
gives rise to the recalculation; provided that, except as provided
above with respect to any incremental fee, the Company shall only be
obligated to make one payment pursuant to this section 3.1.
In the event that any Superior Proposal is for consideration other
than all cash, then the value of that Superior Proposal shall be as
determined by agreement by the financial advisors to GLCC and the
Company, or failing such agreement, the value of the Superior Proposal
shall be calculated using the closing value of the Shares on The
Toronto Stock Exchange, on a fully diluted basis, on the day after the
public announcement of the Superior Proposal, plus Cdn.$0.50.
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(b) The Company agrees to pay to GLCC Cdn.$6,900,000 in immediately
available funds to an account designated by GLCC within one business
day of the Offer being mailed to the Shareholders.
3.2 RIGHT OF FIRST REFUSAL. The Company covenants that it will not enter into
any agreement regarding a Superior Proposal (the "Proposed Agreement")
without providing GLCC with an opportunity to amend this Agreement to
provide for substantially similar terms to those included in the Proposed
Agreement. In particular, the Company covenants to provide GLCC with a copy
of any Proposed Agreement as executed by the party making the proposal, at
least 48 hours prior to its proposed execution by the Company. In the event
GLCC agrees to amend this Agreement as provided above, the Company
covenants to not enter into the Proposed Agreement.
ARTICLE IV
COVENANTS OF GLCC
4.1 EMPLOYMENT AGREEMENTS. GLCC covenants and agrees, and after the Effective
Time will cause the Company and any successor to the Company to agree, to
honour and comply with the terms of those existing employment and severance
agreements and policies of the Company which the Company has disclosed to
GLCC in writing prior to the date hereof.
4.2 OFFICERS' AND DIRECTORS' INSURANCE. GLCC agrees to use reasonable efforts
to secure directors' and officers' insurance coverage for the Company's
current and former directors and officers on a seven year "trailing" (or
"run-off") basis. If a trailing policy is not available at a reasonable
cost (a "reasonable cost" being not greater than the estimated cost of
providing the coverage referred to in this and the next sentence), then
GLCC agrees that for the entire period from the Effective Time until three
years after the Effective Time, GLCC will cause the Company or any
successor to the Company to maintain the Company's current directors' and
officers' insurance policy or an equivalent policy, subject in either case
to terms and conditions no less advantageous to the directors and officers
of the Company than those contained in the policy in effect on the date
hereof ("Equivalent Insurance"), for all present and former directors and
officers of the Company, covering claims made prior to or within three
years after the Effective Time. Further, GLCC agrees that after the
expiration of that three year period, GLCC will use its reasonable efforts
to cause such directors and officers to be covered under GLCC's then
existing directors' and officers' insurance policy, provided such coverage
can be obtained at minimal cost to GLCC.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
5.1 REPRESENTATIONS. The Company hereby provides to GLCC those representations
and warranties as set forth in Schedule "B" to this Agreement (and
acknowledges that GLCC is relying upon those representations and warranties
in connection with entering into this Agreement).
5.2 INVESTIGATION. Any investigation by GLCC and its advisors shall not
mitigate, diminish or affect the representations and warranties of the
Company provided pursuant to this Agreement. Where the provisions of
Schedule "B" or elsewhere in this Agreement refer to disclosure in writing,
such disclosure shall be made expressly in response to the applicable
provision and shall be signed by a senior officer of the Company.
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ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF GLCC
6.1 REPRESENTATIONS. GLCC hereby represents and warrants to the Company as
provided in Schedule "C" to this Agreement (and acknowledges that the
Company is relying upon such representations and warranties in connection
with the entering into of this Agreement).
ARTICLE VII
MUTUAL COVENANTS
7.1 CONSULTATION. GLCC and the Company agree to consult with each other in
issuing any press releases or otherwise making public statements with
respect to the Offer or any other Acquisition Proposal and in making any
filings with any federal, provincial or state governmental or regulatory
agency or with any securities exchange with respect thereto. Each party
shall use its reasonable efforts to enable the other party to review and
comment on all such press releases prior to release thereof.
7.2 FURTHER ASSURANCE. Subject to the terms and conditions herein, GLCC and
the Company agree to use their respective reasonable efforts to take, or
cause to be taken, all action and to do, or cause to be done, all things
necessary, proper or advisable under applicable laws and regulations, to
consummate the transactions contemplated by this Agreement and the Offer.
The Company and GLCC will, and will cause each of their respective
Subsidiaries to, use their reasonable efforts (i) to obtain all necessary
waivers, consents and approvals from other parties to material loan
agreements, leases and other contracts or agreements (including, in
particular but without limitation, the agreement of any persons as may be
required pursuant to any agreement, arrangement or understanding relating
to the Company's or to NASA's operations, including in respect of any
provision that may restrict GLCC or the Company or any of their respective
affiliates from conducting business in Central or South America after the
consummation of the Offer), (ii) to obtain all necessary consents,
approvals and authorizations as are required to be obtained under any
federal, provincial, state or foreign law or regulations with respect to
this Agreement or the Offer, (iii) to lift or rescind any injunction or
restraining order or other order adversely affecting the ability of the
parties to consummate the transactions contemplated hereby or by the Offer,
and (iv) to fulfil all conditions and satisfy all provisions of this
Agreement and the Offer.
ARTICLE VIII
TERMINATION
8.1 TERMINATION. This Agreement may be terminated at any time prior to the
Effective Time:
(a) by mutual written consent of GLCC and the Company;
(b) by either GLCC or the Company after September 30, 1996 if GLCC has not
purchased Shares pursuant to the Offer;
(c) by either GLCC or the Company, if the Minimum Condition or any other
condition of the Offer has not been satisfied or waived on the expiry
of the Offer, as the same may be extended from time to time pursuant
to the terms of the Offer;
(d) by GLCC upon the receipt of a fee as provided in section 3.1(a); or
(e) by the Company, if GLCC does not mail the Offer as provided in section
1.1, provided that no Fee Event has occurred;
except that the obligations set forth in section 3.1 shall survive the
termination of this Agreement, other than in respect of a termination
pursuant to section 8.1(e) above.
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8.2 WITHDRAWAL OF OFFER. If this Agreement is terminated as provided in
section 8.1 above, GLCC may terminate or withdraw the Offer without any
liability or further obligation under this Agreement.
ARTICLE IX
MISCELLANEOUS
9.1 AMENDMENT OR WAIVER. This Agreement may be amended, modified or
superseded, and any of the terms, covenants, representations, warranties
or conditions hereof may be waived, but only by written instrument
executed by GLCC and the Company; provided, however, that either GLCC or
the Company may in its discretion waive a condition herein which is solely
for its benefit without the consent of the other. No waiver of any nature,
in any one or more instances, shall be deemed or construed as a further or
continued waiver of any condition or any breach of any other term,
representation or warranty in this Agreement.
9.2 ENTIRE AGREEMENT. This Agreement and the documents referred to herein
constitute the entire agreement between the parties with respect to the
subject matter hereof and supersede all prior agreements, arrangements or
understandings with respect thereto.
9.3 HEADINGS. The descriptive headings are for convenience of reference only
and shall not control or affect the meaning or construction of any
provisions of this Agreement.
9.4 NOTICES. All notices or other communications which are required or
permitted hereunder shall be communicated confidentially and in writing and
shall be sufficient if delivered personally, or sent by confidential
telecopier addressed as follows:
To GLCC:
John V. Lacci
Vice President and General Counsel
One Great Lakes Boulevard
West Lafayette, IN 47906
Facsimile: (317) 497-6234
With a Copy to:
Stikeman, Elliott
1500, 855 - 2nd Street S.W.
Calgary, Alberta
T2P 4J7
Attention: John M. Stransman
Facsimile: (403) 266-9034
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<PAGE> 10
To the Company:
Kenneth M. Bagan
General Counsel & Secretary
2750, 801 - 6th Avenue S.W.
Calgary, Alberta
T2P 4L8
Facsimile: (403) 296-1565
With a Copy to:
Bennett Jones Verchere
4500, 855 - 2nd Street S.W.
Calgary, Alberta
T2P 4K7
Attention: Henry Sykes
Facsimile: (403) 265-7219
9.5 COUNTERPARTS. This Agreement may be executed in any number of counterparts
and each such counterpart shall be deemed to be an original instrument but
all such counterparts together shall constitute but one Agreement.
9.6 EXPENSES. Each party will pay its own expenses. GLCC and the Company
represent and warrant to each other that, except for RBC Dominion
Securities Inc. and Simmons & Company International in the case of the
Company and Lehman Brothers Inc. and Nesbitt Burns, Inc. in the case of
GLCC, no broker, finder or investment banker is entitled to any brokerage,
finder's or other fee or commission, or to the reimbursement of any of its
expenses, in connection with the Offer. The Company has provided to GLCC a
correct and complete copy of all agreements between the Company and each of
its financial advisors as are in existence at the date hereof. The Company
covenants not to amend the terms of any such agreements relating to the
payment of fees and expenses without the prior written approval of GLCC.
9.7 ASSIGNMENT. GLCC may assign all or any part of its rights or obligations
under this Agreement to a direct or indirect wholly-owned Subsidiary of
GLCC, but, if such assignment takes place, GLCC shall continue to be liable
to the Company for any default in performance by the assignee. This
Agreement shall not otherwise be assignable by either party without the
prior written consent of the other party.
9.8 SEVERABILITY. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid, void
or unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and
shall in no way be effected, impaired or invalidated and the parties shall
negotiate in good faith to modify the Agreement to preserve each party's
anticipated benefits under the Agreement.
9.9 CHOICE OF LAW. This Agreement shall be governed by, construed and
interpreted in accordance with the laws of the Province of Alberta.
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<PAGE> 11
IN WITNESS WHEREOF the parties hereto have caused this Agreement to be
executed on their behalf by their officers thereunto duly authorized as of the
date first written above.
GREAT LAKES CHEMICAL CORPORATION
by: "David A. Hall"
-------------------------------
David A. Hall
Senior Vice President -- Corporate
Development
Specialized Services & Mfg.
NOWSCO WELL SERVICE LTD.
by: "S.P. Shouldice"
-------------------------------
S. P. Shouldice
Chief Executive Officer and Chairman
by: "Kenneth M. Bagan"
-------------------------------
Kenneth M. Bagan
General Counsel & Secretary
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<PAGE> 12
SCHEDULE "A"
TERMS OF THE OFFER
1. GENERAL TERMS. The Offer shall be made by a circular bid prepared in
compliance with the Securities Act (Alberta) and other applicable
provincial securities laws and in accordance with the Multi-Jurisdictional
Disclosure System to United States Shareholders.
2. EXPIRY DATE. The Offer shall be open until June 7, 1996 (provided that
GLCC may reduce or extend such period of time in its sole discretion).
3. OFFER PRICE. The Offer shall be made in cash at a price of not less than
Cdn.$30.90 per Share (including Shares which may become outstanding on the
exercise of options, warrants or other rights to purchase Shares (other
than rights issued pursuant to the Shareholder Protection Rights
Agreement)).
4. CONDITIONS OF THE OFFER. The Offer shall not be subject to any conditions
other than those substantially described as follows:
(a) at the expiry time there shall have been validly deposited under the
Offer and not withdrawn a number of Shares which constitutes at least
66 2/3% of the outstanding Shares (calculated on a fully diluted
basis) (the "Minimum Condition");
(b) the Offeror shall have determined in its sole judgment that: (i) no
material right, franchise or license of the Company or any of its
Subsidiaries has been or may be impaired (which impairment has not
been cured or waived) or otherwise adversely affected, whether as a
result of the making of the Offer, the taking up and paying for Shares
deposited under the Offer or otherwise which might make it inadvisable
for the Offeror to proceed with the Offer and/or with the taking up
and paying for the Shares under the Offer, and (ii) no covenant, term
or condition of any instrument or agreement of the Company or its
Subsidiaries exists which might make it inadvisable for the Offeror to
proceed with the Offer and/or with the taking up and paying for the
Shares under the Offer (including without limitation any default,
acceleration or other adverse event that may ensue as a result of the
Offeror taking up and paying for the Shares under the Offer);
(c) there shall not have occurred any actual or threatened change
(including a proposal by the Minister of Finance of Canada to amend
the Tax Act or any proposal to further amend the United States
Internal Revenue Code of 1986, or any announcement, governmental or
regulatory initiative, condition, event or development involving a
change or a prospective change) that, in the sole judgment of the
Offeror, directly or indirectly, has or may have a material adverse
significance with respect to the current or anticipated business or
operations of any of the Offeror, the Parent, the Company or their
respective Subsidiaries, or entities in which any of them has a
material interest, with respect to the regulatory regime applicable to
their respective business and operations or with respect to completing
a compulsory acquisition or any subsequent acquisition transaction or
with respect to any potential integration of the Company with the
Offeror (or the parent of the Offeror) or with any reorganization of
the Company or the Offeror in connection with any such potential
integration;
(d) there shall not have occurred, developed or come into effect or
existence any event, action, state, condition or major financial
occurrence of national or international consequence or any law,
regulation, action, governmental regulation, inquiry or other
occurrence of any nature whatsoever which, in the sole judgment of the
Offeror, materially adversely affects or involves, or may materially
adversely affect or involve, the general economic, financial, currency
exchange, securities or commodity market (including without limitation
oil and gas market) conditions in Canada or the United States, or the
financial condition, business, operations, assets, affairs or
prospects of the Offeror, (the parent of the Offeror), the Company or
any of its Subsidiaries;
(e) any applicable waiting periods under any competition, merger control
or similar law (including without limitation the HSR Act), regulation
or other governmental authority having jurisdiction
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<PAGE> 13
over the Offeror, (the parent of the Offeror) or the Company or the
Offer or any other transaction contemplated by the Offer with respect
to any such matters shall have expired or been terminated in respect
of such transactions;
(f) all approvals or exemptions under the Investment Canada Act in
connection with the Offer and the acquisition of Shares pursuant to
the Offer shall have been obtained on terms and conditions
satisfactory to the Offeror in its sole determination;
(g) any other requisite regulatory approvals (including without limitation
those of any stock exchanges or other regulatory authorities) shall
have been obtained on terms satisfactory to the Offeror;
(h) no act, action, suit or proceeding shall have been threatened or taken
before or by any Canadian or United States federal, provincial, state
or foreign court or other tribunal or governmental agency or other
regulatory or administrative agency or commission or by any elected or
appointed public official or private person (including without
limitation any individual, corporation, firm, group or other entity)
in Canada, the United States or elsewhere, whether or not having the
force of law, and no law, regulation or policy shall have been
proposed, enacted, promulgated or applied, whether or not having the
force of law, which could reasonably be expected to have the effect
of:
(i) making illegal, or otherwise directly or indirectly restraining
or prohibiting or making materially more costly, the making of
the Offer, the acceptance for payment of, payment for, or
ownership, directly or indirectly, of some or all of the Shares
by the Offeror, the completion of a compulsory acquisition or any
subsequent acquisition transaction or the consummation of any of
the transactions contemplated by the Offer;
(ii) prohibiting or materially limiting the ownership or operation by
the Company or any of its Subsidiaries, or by the Offeror (or the
parent of the Offeror), directly or indirectly, of all or any
material portion of the business or assets of the Company, on a
consolidated basis, or the Offeror (or the parent of the
Offeror), directly or indirectly, or compelling the Offeror (or
the parent of the Offeror), directly or indirectly, to dispose of
or hold separate all or any material portion of the business or
assets of the Company, on a consolidated basis, or the Offeror
(or the parent of the Offeror), directly or indirectly, as a
result of the transactions contemplated by the Offer;
(iii)imposing or confirming limitations on the ability of the
Offeror, directly or indirectly, effectively to acquire or hold
or to exercise full rights of ownership of the Shares, including
without limitation the right to vote any Shares acquired or owned
by the Offeror (or the parent of the Offeror), directly or
indirectly, on all matters properly presented to the Shareholders
of the Company, including without limitation the right to vote
any shares of capital stock of any Subsidiary (other than
immaterial Subsidiaries) directly or indirectly owned by the
Company;
(iv) requiring divestiture by the Offeror, directly or indirectly, of
any Shares; or
(v) materially adversely affecting the business, financial condition
or results of operations of the Company and its Subsidiaries
taken as a whole or the value of the Shares or of the Offer to
the Offeror;
(i) there shall not exist any prohibition at law against the Offeror
making the Offer or taking up and paying for all of the Shares under
the Offer or completing any compulsory acquisition or any subsequent
acquisition transaction;
(j) there shall not have occurred (or if there shall have occurred prior
to the commencement of the Offer and not publicly disclosed, there
shall not have been generally disclosed or disclosed to the Offeror in
writing after the commencement of the Offer) any change (or any
condition, event or development involving a prospective change) in the
business, assets, capitalization, financial condition, licenses,
permits, rights, privileges or liabilities (including without
limitation any contingent liabilities that may arise through
outstanding, pending or threatened litigation or
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<PAGE> 14
otherwise), whether contractual or otherwise, of the Company or any of
its Subsidiaries considered as a whole which, in the sole judgment of
the Offeror, is materially adverse;
(k) the Director of Investigation and Research (the "Director") appointed
under the Competition Act shall not have advised the Offeror, in
writing, that he intends to oppose the acquisition of the Shares or
that he has taken or threatened to take proceedings under the merger
provisions of Part VIII or under section 45 of the Competition Act in
respect of the purchase of Shares;
(l) (i) it shall not have been publicly disclosed or the Offeror shall
not have otherwise become aware that beneficial ownership (determined
for the purposes of this paragraph as set forth in Rule 13d-3
promulgated under the Exchange Act) of 20% or more of the outstanding
Shares has been acquired by any person (including without limitation
the Company or any of its Subsidiaries or affiliates), other than the
Offeror or any of its affiliates or (ii) (A) the board of directors of
the Company or any committee thereof shall not have approved or
recommended any proposal or any other acquisition of Shares other than
the Offer, (B) any corporation, partnership, person or other entity or
group shall not have entered into a definitive agreement or an
agreement in principle with the Company with respect to a take-over
bid (other than the Offer), tender offer or exchange offer, merger,
sale of assets, amalgamation, plan of arrangement, reorganization,
consolidation, business combination, recapitalization, liquidation,
dissolution or similar transaction with or involving the Company or
any of its Subsidiaries or (C) the board of directors of the Company
or any committee thereof shall not have resolved to do any of the
foregoing; and
(m) there shall not have occurred any material breach by the Company of
any of the representations, warranties or covenants of the
Pre-Acquisition Agreement or any termination of the Pre-Acquisition
Agreement pursuant to the terms thereof.
The foregoing conditions are for the exclusive benefit of the Offeror and
may be waived by the Offeror in whole or in part at any time and from time to
time, both before or after the expiry time.
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<PAGE> 15
SCHEDULE "B"
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
(a) ORGANIZATION. Each of the Company and each of its direct and indirect
Subsidiaries, partnerships and other entities over which it exercises
direction or control (including Nowsco Americas S.A.) (collectively, the
"Subsidiaries") has been duly incorporated or formed under applicable law,
is validly existing and has full corporate or legal power and authority to
own its properties and conduct its businesses as presently owned and
conducted. All of the outstanding shares of capital stock and other
ownership interests of the Subsidiaries are validly issued, fully paid and
non-assessable and all such shares and other ownership interests owned
directly or indirectly by the Company are owned free and clear of all
material liens, claims or encumbrances, and except as disclosed in writing
to GLCC prior to the date hereof, there are no outstanding options, rights,
entitlements, understandings or commitments (contingent or otherwise)
regarding the right to acquire any shares of capital stock or other
ownership interests in any of the Subsidiaries.
(b) CAPITALIZATION. As of the date hereof, there are 20,927,296 Shares issued
and outstanding. As at the date hereof, up to a maximum of 1,581,010 Shares
may be issued pursuant to outstanding stock option entitlements. Except as
described in the immediately preceding sentence, there are no options,
warrants, conversion privileges or other rights, agreements, arrangements
or commitments obligating the Company or any Subsidiary to issue or sell
any shares of any capital stock of the Company or any of its Subsidiaries
or securities or obligations of any kind convertible into or exchangeable
for any shares of capital stock of the Company, any Subsidiary or any other
person, nor, except as disclosed to GLCC prior to the date hereof, is there
outstanding any stock appreciation rights, phantom equity or similar
rights, agreements, arrangements or commitments based upon the book value,
income or any other attribute of the Company or any Subsidiary.
(c) AUTHORITY. The Company has the requisite corporate power and authority to
enter into this Agreement and to perform its obligations hereunder. The
execution and delivery of this Agreement by the Company and the
consummation by the Company of the transactions contemplated by this
Agreement have been duly authorized by the board of directors of the
Company and no other corporate proceedings on the part of the Company are
necessary to authorize this Agreement or the transactions contemplated
hereby. This Agreement has been duly executed and delivered by the Company
and constitutes a valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms subject to bankruptcy,
insolvency, reorganization, fraudulent transfer, moratorium and other laws
relating to or affecting creditors' rights generally and to general
principles of equity. Except as disclosed in writing to GLCC prior to the
date hereof, the execution and delivery by the Company of this Agreement
and performance by it of its obligations hereunder and (other than in
respect of subparagraph A(ii) below) the completion of the Offer and the
transactions contemplated thereby, will not:
(A) result in a violation or breach of, require any consent to be obtained
under or give rise to any termination rights under any provision of:
(i) its or any Subsidiary's certificate of incorporation, articles,
by-laws or other charter documents, including any unanimous
shareholder agreement or any other agreement or understanding
with any party holding an ownership interest in any Subsidiary;
(ii) any law, regulation, order, judgment or decree; or
(iii)any material contract, agreement, license, franchise or permit
to which the Company or any Subsidiary is bound or is subject or
is the beneficiary;
(B) give rise to any right of termination or acceleration of indebtedness,
or cause any indebtedness to come due before its stated maturity or
cause any available credit to cease to be available; or
(C) result in the imposition of any encumbrance, charge or lien upon any
of its assets or the assets of any Subsidiary, or restrict, hinder,
impair or limit the ability of the Company or any Subsidiary to
15
<PAGE> 16
carry on the business of the Company or any Subsidiary as and where it
is now being carried on or as and where it may be carried on in the
future.
(d) ABSENCE OF CHANGES. Since December 31, 1995, and except as has been
publicly disclosed in any document filed with the Ontario Securities
Commission (i) the Company and the Subsidiaries have conducted their
respective businesses only in the ordinary course, (ii) no liability or
obligation of any nature (whether absolute, accrued, contingent or
otherwise) material to the Company or any Subsidiary has been incurred, and
(iii) there has not been any material adverse change in the financial
conditions, results of operations or businesses of the Company or any
Subsidiary.
(e) EMPLOYMENT AGREEMENTS. Other than as disclosed in writing to GLCC prior to
the date hereof, or except as set forth in the Information Circular and
Proxy Statement of the Company dated March 21, 1996 or the Directors'
Circular of the Company dated April 22, 1996, neither the Company nor any
Subsidiary is a party to any written or oral policy, agreement, obligation
or understanding providing for severance or termination payments to, or any
employment agreement with, any person.
(f) DISCLOSURE. The Company has disclosed to GLCC in writing prior to the date
hereof, any information known to it regarding any event, circumstance or
action taken or failed to be taken which could materially and adversely
affect the business, operations, assets, capitalization, financial
condition, prospects, rights or liabilities of or relating to the Company
or any Subsidiary.
(g) FINANCIAL STATEMENTS. The audited consolidated balance sheet and related
consolidated statement of operations, consolidated statement of changes in
financial position and consolidated statement of shareholders' equity of
the Company for the fiscal year ending December 31, 1995, and the audited
consolidated balance sheets and consolidated statements of operations and
consolidated statements of shareholders' equity for the periods ended
December 31, 1994 and December 31, 1995, as contained in the Company's 1995
Annual Report, were prepared in accordance with generally accepted
accounting principles in Canada consistently applied, and fairly present
the consolidated financial condition of the Company at the respective dates
indicated and the results of operations of the Company (on a consolidated
basis) for the periods covered.
(h) BOOKS AND RECORDS. The corporate records and minute books of the Company
and the material Subsidiaries have been maintained in accordance with all
applicable statutory requirements and are complete and accurate in all
material respects.
(i) LITIGATION, ETC. Except as set forth or specifically reflected in any
document filed with the Ontario Securities Commission, or as disclosed in
writing to GLCC prior to the date hereof, there is no claim, action,
proceeding or investigation pending or, to the knowledge of the Company,
threatened against or relating to the Company or any Subsidiary or
affecting any of their properties or assets before any court or
governmental or regulatory authority or body that, if adversely determined,
is likely to have a material adverse effect on the Company or any
Subsidiary or prevent or materially delay consummation of the transactions
contemplated by this Agreement or the Offer, nor is the Company aware of
any basis for any such claim, action, proceeding or investigation. Neither
the Company nor any Subsidiary is subject to any outstanding order, writ,
injunction or decree that has had or is reasonably likely to have a
material adverse effect or prevent or materially delay consummation of the
transactions contemplated by this Agreement or the Offer.
(j) ENVIRONMENTAL. Except as has been disclosed in writing to GLCC prior to
the date hereof, neither the Company nor any Subsidiary is aware of, or has
received:
(i) any order or directive which relates to environmental matters, and
which requires any material work, repairs, construction, or capital
expenditures; or
(ii) any demand or notice with respect to the material breach of any
environmental, health, or safety law applicable to the Company or any
Subsidiary, including, without limitation, any regulations respecting
the use, storage, treatment, transportation, or disposition of
environmental contaminants.
16
<PAGE> 17
(k) PATENT, TRADEMARK AND RELATED MATTERS. All of the patents, registered
trademarks and service marks, trade names and licenses owned or used by the
Company at the date of this Agreement are in good standing, valid and
adequate to permit the Company and its Subsidiaries to conduct its business
as presently conducted.
(l) INSURANCE. Policies of insurance in force as of the date hereof naming the
Company as an insured adequately cover all risks reasonably and prudently
foreseeable in the operation and conduct of the business of the Company and
the Subsidiaries as would be customary in respect of the businesses carried
on by the Company. All such policies of insurance shall remain in force and
effect and shall not be cancelled or otherwise terminated as a result of
the transactions contemplated hereby or by the Offer.
(m) TAX MATTERS.
(A) DEFINITIONS. For purposes of this Agreement, the following definitions
shall apply:
(i) The term "Taxes" shall mean all taxes, however denominated,
including any interest, penalties or other additions that may
become payable in respect thereof, imposed by any federal,
territorial, state, local or foreign government or any agency or
political subdivision of any such government, which taxes shall
include, without limiting the generality of the foregoing, all
income or profits taxes (including, but not limited to, federal
income taxes and provincial income taxes), payroll and employee
withholding taxes, unemployment insurance, social insurance
taxes, sales and use taxes, ad valorem taxes, excise taxes,
franchise taxes, gross receipts taxes, business license taxes,
occupation taxes, real and personal property taxes, stamp taxes,
environmental taxes, transfer taxes, workers' compensation and
other governmental charges, and other obligations of the same or
of a similar nature to any of the foregoing, which the Company or
any of its material Subsidiaries is required to pay, withhold or
collect.
(ii) The term "Returns" shall mean all reports, estimates,
declarations of estimated tax, information statements and returns
relating to, or required to be filed in connection with, any
Taxes.
(B) RETURNS FILED AND TAXES PAID. All Returns required to be filed by or
on behalf of the Company or any material Subsidiaries have been duly
filed on a timely basis and such Returns are true, complete and
correct. All Taxes shown to be payable on the Returns or on subsequent
assessments with respect thereto have been paid in full on a timely
basis, and no other Taxes are payable by the Company or any material
Subsidiaries with respect to items or periods covered by such Returns.
(C) TAX RESERVES. The Company has paid or provided adequate accruals in
its financial statements for the year ended dated December 31, 1995
for Taxes, including income taxes and related deferred taxes, in
conformity with generally accepted accounting principles applicable in
Canada.
(D) RETURNS FURNISHED. For all periods ending on and after December 31,
1992, GLCC has been furnished by the Company true and complete copies
of (i) relevant portions of income tax audit reports, statements of
deficiencies, closing or other agreements received by the Company or
any material Subsidiary or on behalf of the Company or any material
Subsidiary relating to Taxes, and (ii) all pro-forma separate federal
and provincial income or franchise tax returns for the Company or any
material Subsidiaries.
(E) TAX DEFICIENCIES; AUDITS; STATUTES OF LIMITATIONS. Except as
disclosed in writing to GLCC, no deficiencies exist or have been
asserted with respect to Taxes of the Company or any material
Subsidiary. Neither the Company nor any material Subsidiary is a party
to any action or proceeding for assessment or collection of Taxes, nor
has such event been asserted or threatened against the Company or any
material Subsidiary or any of their respective assets. No waiver or
extension of any statute of limitations is in effect with respect to
Taxes or Returns of the Company or any material Subsidiary. Except as
has been disclosed in writing to GLCC, the Returns of the Company and
any
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<PAGE> 18
material Subsidiary have never been audited by a government or taxing
authority, nor is any such audit in process, pending or threatened.
(n) PENSION AND TERMINATION BENEFITS. Other than as disclosed in writing to
GLCC prior to the date hereof, the Company has provided adequate accruals
in its financial statements for the year ended December 31, 1995 (or such
amounts are fully funded) for all pension or other employee benefit
obligations of the Company arising under or relating to each of the pension
or retirement income plans or other employee benefit plans or agreements or
policies maintained by or binding on the Company or any of its Subsidiaries
as well as for any other payment required to be made by the Company in
connection with the termination of employment or retirement of any employee
of the Company or any Subsidiary.
18
<PAGE> 19
SCHEDULE "C"
REPRESENTATIONS AND WARRANTIES OF GLCC
(a) ORGANIZATION. GLCC has been duly incorporated and organized, and is validly
existing, as a corporation under the laws of the State of Delaware and has
the requisite corporate power and authority to carry on its business as it
is now being conducted.
(b) AUTHORITY. GLCC has the requisite corporate power and authority to enter
into this Agreement and to carry out its respective obligations hereunder.
The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized and no other
corporate proceedings on the part of GLCC are necessary to authorize this
Agreement and the transactions contemplated hereby. This Agreement has been
duly executed and delivered by GLCC and constitutes a valid and binding
obligation of GLCC, enforceable by the Company in accordance with its
terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and other laws relating to or affecting
creditors' rights generally and to general principles of equity.
(c) FINANCING. GLCC has made adequate arrangements to ensure that required
funds are available to effect payment in full for all Shares offered to be
acquired pursuant to the Offer and pursuant to section 1.5 of the
Agreement.
19
<PAGE> 1
Exhibit 99
NEWS FROM [LAKES LOGO]
For more information: Gregory J. Griffith
William P. Blake
(317) 497-6100
FOR IMMEDIATE RELEASE
GREAT LAKES ANNOUNCES TENDER OFFER FOR NOWSCO SHARES
WEST LAFAYETTE, Indiana, May 4, 1996 -- Great Lakes Chemical Corporation
(NYSE:GLK) today announced it has entered into a Pre-Acquisition Agreement with
Nowsco Well Service Ltd. (Nowsco) pursuant to which Great Lakes will make an
offer to purchase all of the outstanding shares of Nowsco at a price of
Cdn.$30.90 per share payable in cash. There are approximately 22.5 million
shares outstanding, giving the bid an aggregate value of approximately Cdn.$695
million (U.S.$502 million). The offer follows a competing bid for Nowsco made by
BJ Services Company of Houston, Texas, at a price of Cdn.$27.00 per share which
was mailed to shareholders on April 12, 1996.
Under the terms of the Pre-Acquisition Agreement, Nowsco has agreed to
support the offer by Great Lakes and not to solicit or encourage any competing
offers. Nowsco's Board of Directors has unanimously resolved to recommend that
shareholders accept the offer. Nowsco has received an opinion from RBC Dominion
Securities Inc. that the offer is fair to shareholders from a financial point of
view. The offer represents a premium of 51 percent over the closing price of
Nowsco's common shares on The Toronto Stock Exchange on April 2, 1996, which is
the day before the first public announcement of BJ Services Company's proposal
to make an offer for the shares of Nowsco.
Headquartered in Calgary, Alberta, Nowsco is a publicly traded,
international well service company operating in most of the major oil and gas
producing regions of the world. The company's shares trade on The Toronto Stock
Exchange (symbol NWS) and also on the NASDAQ National Market (symbol NWSLF).
Robert B. McDonald, chief executive officer and president of Great Lakes,
stated, "The addition of Nowsco, a dynamic, technically oriented service
provider to the oil and gas industry, satisfies our highly selective acquisition
criteria. Additive to earnings from day one, this move builds on our core
competencies in high-growth, specialty businesses. Combining the technical and
marketing strengths of Nowsco and OSCA, Inc., our wholly owned, international
well service subsidiary, we not only will have the critical mass necessary to
compete in this important industry, but have built another strategic platform
from which to grow."
He elaborated, "Nowsco's technological innovations in the applications of
coil tubing services, combined with OSCA's production-enhancing product lines,
provides the industry with cost-effective solutions designed to maximize the
output of oil and gas wells. Together, Nowsco and OSCA create a formidable
competitor, capable of providing a full range of products and services to the
multibillion dollar oil and gas industry."
Nowsco's chairman and chief executive officer, Pat Shouldice, added,
"Nowsco's Board of Directors has unanimously approved this transaction. In our
opinion, the Great Lakes offer is in the best interests of Nowsco's
shareholders, customers and employees and will perpetuate Nowsco's commitment to
technology
1
<PAGE> 2
and "best value service" to its clients, which is consistent with the common
philosophy of both Nowsco and Great Lakes. The financial, technical and global
strength of Great Lakes can only add to the growing potential of Nowsco. Nowsco
will be promptly mailing a Directors' Circular to shareholders recommending that
shareholders accept the Great Lakes offer."
Great Lakes' offer will be conditional upon at least 66 2/3 percent of the
outstanding Nowsco shares (on a diluted basis) being deposited under the offer.
Upon completion of the offer, Great Lakes intends to seek to acquire, at the
offer price, all common shares of Nowsco that remain outstanding through a
subsequent compulsory acquisition or a "going private transaction". The offer
will also be conditional upon, among other things, the receipt of approval under
the Investment Canada Act on terms satisfactory to Great Lakes, as well as all
other requisite regulatory approvals. In addition, it will be a condition of the
offer that there shall not have occurred any breach or termination of the
Pre-Acquisition Agreement. The Pre-Acquisition Agreement provides for the
payment by Nowsco of certain fees to Great Lakes upon the occurrence of certain
events.
Great Lakes Chemical Corporation is the leading producer of certain
specialty chemicals for such applications as flame retardants, polymer
stabilizers, fire extinguishants, water treatment and petroleum additives; and
for the past 20 years, the company has provided products and services to the oil
and gas industry. The stock of the company is traded on the New York Stock
Exchange under the symbol GLK. Great Lakes expects to mail its formal offer to
Nowsco shareholders within the next few days, and Nowsco will include in the
mailing its Directors' Circular recommending that shareholders accept the Great
Lakes offer.
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