<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
/X/ Quarterly report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 for the quarterly period
ended August 31, 1997; or
/ / Transition report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 for the transition period
from __________ to __________.
Commission File Number: 33-12173
AMERICOLD CORPORATION
(Exact name of registrant as specified in its charter)
OREGON 93-0295215
(State of Incorporation) (I.R.S. Employer
Identification Number)
7007 S.W. Cardinal Lane, Suite 135
Portland, Oregon 97224
(Address of principal executive offices) (Zip Code)
(503) 624-8585
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days.
Yes /X/ No / /
Indicate by check mark whether the registrant has filed all
documents and reports required to be filed by Sections 12, 13 or
15(d) of the Securities Exchange Act of 1934 subsequent to the
distribution of securities under a plan confirmed by a court.
Yes /X/ No / /
Number of shares outstanding of the registrant's common stock, par
value $.01 per share, as of September 30, 1997: 5,037,823 shares.<PAGE>
AMERICOLD CORPORATION
Form 10-Q
TABLE OF CONTENTS
-----------------
Page
----
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets 3
Consolidated Statements of Operations 4
Consolidated Statements of Cash Flows 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of 10
Financial Condition and Results of
Operations
PART II OTHER INFORMATION
Item 1. Legal Proceedings 19
Item 6. Exhibits and Reports on Form 8-K 19
SIGNATURES 21
EXHIBIT INDEX 22
<PAGE>
PART I - Financial Information
Item 1. Financial Statements
AMERICOLD CORPORATION
CONSOLIDATED BALANCE SHEETS
Last day of February 1997 and August 1997
(In thousands, except share data)
<TABLE>
<CAPTION>
Last day of Last day of
February 1997 August 1997
------------- -----------
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 13,702 $ 16,315
Trade receivables, net 27,560 28,677
Other receivables, net 3,138 3,319
Prepaid expenses 3,828 3,276
Tax refund receivable 2,636 2,669
Other current assets 891 733
----------- ----------
Total current assets 51,755 54,989
Property, plant and equipment, less accumulated depreciation
of $192,649 and $202,385, respectively 384,484 375,501
Cost in excess of net assets acquired, less accumulated
amortization of $24,644 and $25,897, respectively 74,749 73,496
Other noncurrent assets 20,046 19,425
----------- ----------
Total assets $ 531,034 $ 523,411
=========== ==========
LIABILITIES, PREFERRED STOCK AND COMMON STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable $ 16,116 $ 12,989
Accrued interest 18,466 18,161
Accrued expenses 13,660 13,993
Deferred revenue 5,555 6,022
Current maturities of long-term debt 5,229 5,242
Other current liabilities 5,259 5,119
---------- ----------
Total current liabilities 64,285 61,526
Long-term debt, less current maturities 465,834 464,581
Deferred income taxes 98,524 97,532
Other noncurrent liabilities 10,347 10,443
---------- ----------
Total liabilities 638,990 634,082
---------- ----------
Preferred stock, $100 par value; authorized 1,000,000 shares;
issued and outstanding 52,936 and 46,797 shares, respectively 5,753 5,477
---------- ----------
Common stockholders' deficit:
Common stock, $.01 par value; authorized
10,000,000 shares; issued and outstanding 4,995,556 and
5,037,823 shares, respectively 50 50
Additional paid-in capital 51,182 51,870
Retained deficit (164,580) (167,707)
Equity adjustment to recognize minimum pension liability (361) (361)
---------- ----------
Total common stockholders' deficit (113,709) (116,148)
---------- ----------
Total liabilities, preferred stock and
common stockholders' deficit $ 531,034 $ 523,411
========== ==========
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
AMERICOLD CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
Three and six months ended last day of August 1996 and 1997
(In thousands, except per share data)
<TABLE>
<CAPTION>
Three months Three months Six months Six months
ended ended ended ended
last day of last day of last day of last day of
August 1996 August 1997 August 1996 August 1997
----------- ----------- ----------- -----------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Net sales $ 73,139 $ 73,299 $ 152,535 $ 145,807
---------- ---------- ---------- ----------
Operating expenses:
Cost of sales 55,024 53,457 114,489 106,085
Amortization of cost in excess of
net assets acquired 626 626 1,253 1,253
Selling and administrative expenses 7,312 7,545 15,035 15,219
--------- --------- --------- ---------
Total operating expenses 62,962 61,628 130,777 122,557
--------- --------- --------- ---------
Gross operating margin 10,177 11,671 21,758 23,250
--------- --------- --------- ---------
Other (expense) income:
Interest expense (13,721) (13,893) (29,256) (27,816)
Reorganization expenses (403) - (403) -
Other, net (46) 722 468 785
--------- --------- --------- ---------
Total other expense (14,170) (13,171) (29,191) (27,031)
--------- --------- --------- ---------
Loss before income taxes (3,993) (1,500) (7,433) (3,781)
Benefit for income taxes 1,320 343 2,424 992
--------- --------- --------- ---------
Net loss $ (2,673) $ (1,157) $ (5,009) $ (2,789)
========= ========= ========= ==========
Net loss per common share $ (0.58) $ (0.26) $ (1.09) $ (0.62)
========= ========= ========= ==========
Weighted average number of shares
outstanding 4,931 5,012 4,931 5,004
========= ========= ========= ==========
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
AMERICOLD CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
Six months ended last day of August 1996 and 1997
(In thousands)
<TABLE>
<CAPTION>
Six months Six months
ended last ended last
day of day of
August 1996 August 1997
----------- -----------
(Unaudited) (Unaudited)
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (5,009) $ (2,789)
Adjustments to reconcile net loss to
net cash provided (used) by operating activities:
Depreciation 10,203 10,534
Amortization and other noncash expenses 2,086 2,310
Changes in assets and liabilities (5,826) (176)
Provision for deferred taxes (2,424) (992)
--------- ---------
Net cash provided (used) by operating activities (970) 8,887
--------- ---------
Cash flows from investing activities:
Net expenditures for property, plant
and equipment (15,220) (5,979)
Other items, net 291 754
--------- ---------
Net cash used by investing activities (14,929) (5,225)
--------- ---------
Cash flows from financing activities:
Principal payments under capitalized
lease and other debt obligations (1,457) (1,240)
Proceeds from sale of senior subordinated notes 120,000 -
Retirement of senior subordinated debentures (115,000) -
Debt issuance costs (5,379) (50)
Release of escrowed funds 4,820 167
Issuance of stock - 74
--------- ---------
Net cash provided (used) by financing activities 2,984 (1,049)
--------- ---------
Net increase (decrease) in cash and cash equivalents (12,915) 2,613
Cash and cash equivalents at beginning of period 20,857 13,702
--------- ---------
Cash and cash equivalents at end of period $ 7,942 $ 16,315
========= =========
Supplemental disclosure of cash flow information:
Cash paid year-to-date for interest,
net of amounts capitalized $ 28,920 $ 28,121
========= =========
Capital lease obligations incurred to lease new equipment $ 231 $ -
========= =========
Cash paid during the year for income taxes $ 24 $ 34
========= =========
</TABLE>
See accompanying notes to consolidated financial statements. <PAGE>
AMERICOLD CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. PRINCIPLES OF CONSOLIDATION
---------------------------
The consolidated balance sheet as of the last day of August
1997; the related consolidated statements of operations for
the six months ended the last day of August 1996 and August
1997; and the related consolidated statements of cash flows
for the six months ended the last day of August 1996 and
August 1997 are unaudited. In the opinion of management, all
adjustments necessary for a fair presentation of such
financial statements have been included. Such adjustments
consisted of normal recurring items. Interim results are not
necessarily indicative of results for a full year. The
financial information presented herein should be read in
conjunction with the financial statements included in the
registrant's Annual Report on Form 10-K for the year ended the
last day of February 1997.
2. COMMON STOCKHOLDERS' DEFICIT
----------------------------
The Company has reserved 300,000 shares of common stock for
issuance under a stock option plan established in 1987. Under
the plan, options are granted by the Compensation Committee of
the Board of Directors to purchase common stock at a price not
less than 85% of the fair market value on the date the option
is granted.
Information with regard to the plan as of the last day of
August 1997 follows:
Weighted
Average
Exercise
Shares Price
------ --------
Outstanding at beginning of year 225,148 $11.63
Granted - -
Exercised (3,449) 10.00
Cancelled - -
Forfeited (690) 10.00
------- -----
Outstanding 221,009 $11.66
======= =====
Options exercisable 93,009 $10.79
======= =====
All stock options will become fully exercisable upon the
completion of the merger discussed in Note 8.
3. PROVISION FOR INCOME TAXES
--------------------------
The provision for income taxes was computed using a tax rate
of 39.2%. The tax rate was applied to loss before income
taxes, after adjusting for amortization of cost in excess of
net assets acquired.
4. LOSS PER COMMON SHARE
---------------------
Loss per common share is computed by dividing net loss, less
preferred dividend requirements, by the weighted average
number of common shares outstanding. See Exhibit 11,
Statement Regarding Computation of Per Share Earnings.
5. CASH AND CASH EQUIVALENTS
-------------------------
Cash and cash equivalents includes highly liquid instruments,
with original maturities of three months or less when
purchased. There were cash equivalents totaling $10.0 million
and $13.0 million as of the last day of February 1997 and
August 1997, respectively.
6. LONG-TERM DEBT
--------------
On April 9, 1996, the Company sold $120.0 million aggregate
principal amount of the Company's 12.875% Senior Subordinated
Notes due 2008. The Company used $115.0 million of the
proceeds to redeem at par on May 9, 1996 the Company's 15%
Senior Subordinated Debentures due 2007. The remaining
proceeds were used to pay transaction costs. The interest
rate on the notes can be increased from 12.875% to 13.875% if
the notes are not rated "B- or higher" by Standard & Poor's
and "B3 or higher" by Moody's Investors Service by November 1,
1997. The notes have been rated "B-" by Standard and Poor's
since they were issued, and as of September 30, 1997, "Caa" by
Moody's Investors Service.
7. NEW ACCOUNTING STANDARDS
------------------------
The Company has not implemented the reporting requirements of
Financial Accounting Standards Board Statement of Financial
Accounting Standards No. 128, "Earnings Per Share" ("SFAS No.
128"), although it will be required to do so during the fourth
quarter of fiscal 1998 and thereafter. This Statement
establishes a different method of computing net income per
share than is currently required under the provisions of
Accounting Principles Board Opinion No. 15. Under SFAS No.
128, the Company will be required to present both basic net
income per share and diluted net income per share. The
Company estimates that the adoption of SFAS No. 128 will not
have a material impact on its income per share.
The Company has not implemented the reporting requirements of
Financial Accounting Standards Board Statement of Financial
Accounting Standards No. 130, "Reporting Comprehensive Income"
("SFAS No. 130"), although it will be required to do so during
the first quarter of fiscal 1999 and thereafter. This
Statement establishes standards for reporting and display of
comprehensive income and its components. The Company does not
believe that the adoption of SFAS No. 130 will have a material
impact on its financial statement presentation.
The Company has not implemented the reporting requirements of
Financial Accounting Standards Board Statement No. 131,
"Disclosures about Segments of an Enterprise and Related
Information" ("SFAS No. 131"), although it will be required to
do so for fiscal 1999 and thereafter. This statement
establishes standards for reporting operating segments in
annual financial statements and requires selected information
about operating segments in interim financial statements. The
Company believes it may be required to show information not
currently disclosed.
8. SUBSEQUENT EVENT
----------------
On September 29, 1997, the Company announced that it had
entered into a merger agreement pursuant to which Vornado
Realty Trust ("Vornado") would acquire the Company. Vornado
announced that, in addition, it had also entered into a merger
agreement to acquire URS Logistics, Inc. (Kelso & Company, who
owns a controlling interest in the Company, holds
approximately 57% of the common equity of URS Logistics,
Inc.). Vornado also announced that it had entered into a
partnership agreement with Crescent Real Estate Equities
Company ("Crescent") to make the acquisitions, with Vornado
controlling 60% of the partnership and Crescent 40%.
The consideration for the acquisition of the Company is
approximately $582 million, including $111 million in cash and
$471 million in indebtedness. The price to be paid to the
shareholders per common share is $20.70. The purchase price
also includes the redemption of the Company's preferred stock
for $100 per share, its par value, plus accrued and unpaid
dividends to the date of closing, and the buyout of all
existing stock options at $20.70 per share, less the exercise
price of each option share. The transaction is expected to
close no later than December 31, 1997.
The Company believes that the transaction, when completed,
will afford the Company the opportunity to improve its capital
structure and provide substantial capital to support warehouse
growth.
<PAGE>
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
-------------------------------------------------
RESULTS OF OPERATIONS
- ---------------------
INTRODUCTION - Americold provides integrated logistics
services for the frozen food industry consisting of
warehousing and transportation management. These services are
provided through the Company's network of 48 refrigerated
warehouses and its refrigerated transportation management
unit. The Company's fiscal year ends on the last day of
February.
SUBSEQUENT EVENT - Subsequent to the end of the quarter, on
September 29, 1997, the Company announced that it had entered
into a merger agreement pursuant to which Vornado Realty Trust
("Vornado") would acquire the Company. See Part II, Item 5. -
"Other Information" for more explanation on the transaction.
DEVELOPMENT OF TRANSPORTATION MANAGEMENT SERVICES - Over the
past several years, the Company has experienced increased
interest by customers in procuring transportation management
services from the Company. In this regard, the Company has
entered into arrangements pursuant to which it is providing
such services to three large customers. The Company has made
proposals to offer similar services to certain other potential
customers by emphasizing its full-service logistics expertise
and warehouse industry position which enable customers to
obtain services in support of distribution of frozen food
products from a single provider.
As the Company does not invest in or own transportation
equipment, the Company has entered into contracts with
independent carriers to provide freight transportation at
negotiated rates. Accordingly, the margins that the Company
earns in providing transportation management services are
lower than for its warehousing services.
DEVELOPMENT OF WAREHOUSE PROPERTIES - Although the Company
currently has no projects in progress, the Company continually
evaluates the need for warehouse space and intends to pursue
growth of its refrigerated warehouse business both by
expanding its network of warehouses and by expanding existing
facilities in response to customer requirements. The Company
did not renew the lease on its marginally profitable Kent,
Washington facility upon its expiration on March 31, 1997, and
did not renew the lease on its marginally unprofitable Corona
Street facility in Los Angeles, California, when the lease
expired on August 1, 1997. See "--Liquidity and Capital
Resources--Capital Resources" and "--Capital Resources --
Capital Expenditures."
FORWARD-LOOKING STATEMENTS - This document includes "forward-
looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995, including, without
limitation, statements as to expectations, beliefs and future
financial performance that are based on current expectations
and are subject to a number of risks and uncertainties.
Actual results or outcomes could differ materially from
current expectations due to a number of factors (such as
substantial leverage and history of losses; restrictions
imposed by the Company's debt agreements; the Company's
substantial debt obligations; the Company's dependence on
significant customers; competition; and dependence on
agricultural markets) described in Exhibit 99 to the Company's
Annual Report on Form 10-K for the year ended the last day of
February 1997, and due to the effects of the merger on the
Company.
COMPARISON OF THREE-MONTH PERIODS ENDED AUGUST 31, 1996 AND
1997
--------------------------------------------------------------
Net sales increased slightly by 0.2% from $73.1 million for
the second quarter of fiscal 1997 to $73.3 million for the
same quarter in fiscal 1998. Warehousing sales increased from
$46.9 million to $48.6 million when comparing quarter to
quarter. However, transportation management sales decreased
from $24.5 million to $23.1 million from the second quarter of
fiscal 1997 to the second quarter of fiscal 1998 continuing
the trend seen in the first quarter of fiscal 1998.
Cost of sales decreased 2.8% from $55.0 million for the second
quarter of fiscal 1997 to $53.5 million for the same quarter
of fiscal 1998. The decrease is primarily related to the
decreased volume of transportation services during the
quarter.
COMPARISON OF SIX-MONTH PERIODS ENDED AUGUST 31, 1996 AND 1997
--------------------------------------------------------------
NET SALES - Americold's net sales for the first six months of
fiscal 1997 and the first six months of fiscal 1998 are
detailed in the table below, by activity:
NET SALES
(Dollars in Millions)
Six Months Ended Six Months Ended
August 31, 1996 August 31, 1997
---------------- ---------------- % Change
Amount % Amount % FY97 to FY98
------ --- ------ --- ------------
Logistics
Warehousing
Storage $ 49.1 32.2% $ 50.6 34.7 % 3.1 %
Handling 37.9 24.9% 38.9 26.7% 2.6 %
Leasing 3.3 2.2% 2.5 1.7% (24.2)%
Freezing
and other 5.1 3.3% 5.7 3.9% 11.8 %
------ ----- ------ ----- ------
95.4 62.6% 97.7 67.0% 2.4 %
Transportation
management
services 54.1 35.4% 45.2 31.0% (16.5)%
----- ----- ----- ----- -----
Total logistics 149.5 98.0% 142.9 98.0% (4.4)%
Other 3.0 2.0% 2.9 2.0% (3.3)%
----- ----- ----- ----- -----
Total net sales $152.5 100.0% $145.8 100.0% (4.4)%
====== ===== ====== ===== =====
The Company's net sales decreased 4.4% from $152.5 million for
the first six months of fiscal 1997 to $145.8 million for the
first six months of fiscal 1998, reflecting a substantial
decrease in transportation management sales due to decreases
in volume of product shipped by the Company's existing
customers.
Warehousing sales increased from $95.4 million for the first
six months of fiscal 1997 to $97.7 million for the first six
months of fiscal 1998, principally due to a 7.3% increase in
storage volume. Storage revenue increased as storage volume
increased from 1.38 billion pounds stored on average per month
in the first six months of fiscal 1997 to 1.48 billion pounds
stored on average per month in the same period in fiscal 1998.
The 2.6% increase in handling revenue resulted primarily from
a 4.8% increase in volume of product handled. For the first
six months of fiscal 1997, 10.3 billion pounds of product were
handled by the Company compared with 10.8 billion pounds
during the same period in fiscal 1998.
The Company anticipated that vegetable inventory would grow in
the second quarter and continues to expect it to build in the
third quarter as the 1997 harvest is completed. Storage
levels for potatoes were higher during the first six months of
fiscal 1998 but the Company is unable to forecast the levels
for the balance of fiscal 1998.
Transportation management sales decreased 16.5% from $54.1
million for the first six months of fiscal 1997 to $45.2
million for the first six months of fiscal 1998, for the
reasons referenced above.
Other sales (quarry sales) decreased slightly from $3.0
million for the first six months of fiscal 1997 to $2.9
million for the first six months of fiscal 1998.
COST OF SALES - Cost of sales decreased 7.3% from $114.5
million for the first six months of fiscal 1997 to $106.1
million for the first six months of fiscal 1998. The
decreased volume of transportation management services, which
required decreases in transportation capacity purchased from
carriers, resulted in an approximate $9.7 million decrease in
cost of sales. Cost of sales increased by approximately $0.8
million, as a result of increased operating lease payments on
facilities financed through the Lease Line (as defined below).
See "Liquidity and Capital Resources". Cost of sales also
increased due to the continuing operational difficulties at
one of the Company's warehouse facilities. Efforts are
continuing to be made to resolve the difficulties.
Cost of sales as a percentage of net sales decreased from
75.1% for the first six months of fiscal 1997 to 72.8% for the
first six months of fiscal 1998, as transportation management
sales, which has high variable cost requirements, decreased
from 35.4% of net sales in the prior period to 31.0% in the
more recent period.
SELLING AND ADMINISTRATIVE EXPENSES - Selling and
administrative expenses increased 1.2% from $15.0 million for
the first six months of fiscal 1997 to $15.2 million for the
first six months of fiscal 1998 due to increased professional
fees. Selling and administrative expenses as a percentage of
net sales increased from 9.9% in the first six months of
fiscal 1997 to 10.4% in the first six months of fiscal 1998
due to the decrease in transportation management sales, which
did not result in a corresponding decrease in selling and
administrative expenses.
<PAGE>
GROSS OPERATING MARGIN - Gross operating margin increased 6.8%
from $21.8 million for the first six months of fiscal 1997 to
$23.3 million for the first six months of fiscal 1998 due to
the increased gross operating margin from the increased
warehousing sales. Costs related to transportation management
sales decreased faster than sales which also contributed to
the increase in gross operating margin.
INTEREST EXPENSE - Interest expense decreased from $29.3
million for the first six months of fiscal 1997 to $27.8
million for the first six months of fiscal 1998 as a result of
a non-recurring increase in interest expense in the prior
period due to the defeasance requirements in fiscal 1997 on
the redemption in May 1996 of $115.0 million of the Company's
15% Senior Subordinated Debentures due 2007 which were
replaced by the Company's $120.0 million of 12.875% Senior
Subordinated Notes due 2008. As a result of the defeasance
requirements, both issuances were outstanding for the period
April 9, 1996 to May 8, 1996.
In addition, interest expense in the prior period was also
affected by the higher average interest rate on the debt
outstanding at that time.
INCOME (LOSS) - The Company's income before income taxes
improved as the first six months of fiscal 1997 reflected a
loss of $7.4 million compared to a loss of $3.8 million in the
first six months of fiscal 1998. The reduced loss in the more
recent period was due to the increased gross operating margin
contribution from the increased warehousing sales and from the
transportation management services and from the reduced
interest expense incurred on the Company's outstanding debt as
compared to the corresponding prior period.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
The Company believes it has sufficient liquidity and capital
resources to meet its needs related to the payment of interest
expense, the continued operation and maintenance of its
warehouses, the continued operation and planned expansion of
its transportation management business and the funding of
limited growth in warehouse capacity. Any anticipated growth
in the volume of transportation management services is not
expected to consume significant capital resources. Although
the Company's internal resources for new warehouse acquisition
or construction are limited, the Company has been able to
arrange for lease financing for new warehouse capacity from a
finance company (the "Lease Line"). See "--Capital
Resources." While the Company currently has no projects in
progress, the Company plans to finance future warehouse
additions and expansions principally through lease financing.
In light of the significant debt obligations due between
fiscal 2000 and fiscal 2008, the Company continues to need to
increase operating cash flow and seek external sources for
refinancing. To the extent such operating cash flow growth
will result from warehouse capacity growth, the Company will
also be required to obtain additional sources of interim
financing. See "Liquidity - Subsequent Event".
LIQUIDITY
---------
OPERATING CASH FLOW - Net cash flow from operating
activities, representing cash provided from operations, is
used to fund capital expenditures and meet debt service
requirements. Operating cash flow reported for any one period
is sensitive to the timing of the collection of receivables
and the payment of payables.
Net cash flow from operating activities as reported in the
Company's consolidated financial statements increased from a
negative $1.0 million for the first six months of fiscal 1997
to $8.9 million for the first six months of fiscal 1998. The
increase is due principally to the improvement in the net loss
and to the changes in certain working capital items such as
trade receivables, trade payables and accrued expenses. Net
cash flow from operating activities in fiscal years 1995, 1996
and 1997 was $12.7 million, $12.6 million and $18.9 million,
respectively. Funds provided from operations (gross operating
margin plus depreciation, amortization and employee stock
ownership plan expense) was $33.5 million for the first six
months of fiscal 1997 and $35.3 million for the first six
months of fiscal 1998. Funds provided from operations in
fiscal years 1995, 1996 and 1997 were $71.6 million, $76.6
million and $72.1 million, respectively.
WORKING CAPITAL - The Company's working capital position as of
the last day of the six-month period ended August 31, 1997 was
a negative $6.5 million. This position compares to negative
$12.5 million at fiscal 1997 year end. Working capital
increased in the more recent period principally due to timing
differences in the collection of receivables and payment of
payables.
The Company's historical negative working capital position
generally has not affected its ability to meet its cash
operating needs.
CAPITAL RESOURCES
-----------------
The credit agreement with the Company's primary bank provides
an aggregate availability of $27.5 million, which may be used
for any combination of letters of credit and revolving cash
borrowings for general working capital purposes, subject to
borrowing base limitations. The borrowing base for both cash
borrowings and letters of credit equals 85% of eligible
accounts receivable pledged to the bank plus, at the option of
the Company, 70% of the value of all real property mortgaged
to the bank. The Company has not mortgaged any properties
under the credit agreement. The credit agreement, which
matures on February 28, 1999, requires two 30-day resting
periods (during which there may be no outstanding borrowings)
during each of fiscal 1998 and fiscal 1999. The Company has
satisfied the resting periods required for fiscal 1998. The
credit agreement also contains certain restrictive covenants,
including financial covenants.
Based on eligible accounts receivable as of August 31, 1997,
the Company had an available credit line of $23.8 million, of
which $6.1 million was used for letters of credit, principally
related to leasing commitments and worker's compensation
reserves. No cash borrowings were outstanding.
The Lease Line is used to finance, subject to meeting certain
conditions, the construction or acquisition of new warehouses
or the expansion of existing warehouses which are not pledged
as collateral security for senior debt. While the Lease Line
commitment was originally intended to expire December 31,
1996, based on discussions with the lender, the expiration
date is expected to be extended and the total commitment is
expected to be increased by approximately $10.0 million, to an
available total of $17.3 million, in order to allow for the
potential sale/leaseback of an existing facility.
LONG-TERM DEBT - On April 9, 1996, the Company sold $120.0
million aggregate principal amount of the Company's 12.875%
Senior Subordinated Notes due 2008. The Company used $115.0
million of the proceeds to redeem at par on May 9, 1996 the
Company's 15% Senior Subordinated Debentures due 2007. The
remaining proceeds were used to pay transaction costs. The
interest rate on the notes can be increased from 12.875% to
13.875% if the notes are not rated "B- or higher" by Standard
& Poor's and "B3 or higher" by Moody's Investors Service by
November 1, 1997. The notes have been rated "B-" by Standard
and Poor's since they were issued, and as of September 30,
1997, "Caa" by Moody's Investors Service.
CAPITAL EXPENDITURES - Budgeted fiscal 1998 capital
expenditures total approximately $14.1 million, including
approximately $1.4 million for warehouse expansion.
Expenditures for property, plant and equipment for the first
six months of fiscal 1998 totaled $5.9 million, of which
approximately $0.3 million related to warehouse expansions,
and the remaining were routine replacements or betterments, or
revenue enhancements or cost reduction items.
JOINT VENTURE - The Company finalized an agreement in which
the Company's costs incurred in the construction of the
facility at Park Rapids, Minnesota warehouse facility were
reimbursed by a joint venture. The Company owns 50% of the
joint venture and will operate the facility for a management
fee.
NEW ACCOUNTING STANDARDS - The Company has not implemented the
reporting requirements of Financial Accounting Standards Board
Statement of Financial Accounting Standards No. 128, "Earnings
Per Share" ("SFAS No. 128"), although it will be required to
do so during the fourth quarter of fiscal 1998 and thereafter.
This Statement establishes a different method of computing net
income per share than is currently required under the
provisions of Accounting Principles Board Opinion No. 15.
Under SFAS No. 128, the Company will be required to present
both basic net income per share and diluted net income per
share. The Company estimates that the adoption of SFAS No.
128 will not have a material impact on its income per share.
The Company has not implemented the reporting requirements of
Financial Accounting Standards Board Statement of Financial
Accounting Standards No. 130, "Reporting Comprehensive Income"
("SFAS No. 130"), although it will be required to do so during
the first quarter of fiscal 1999 and thereafter. This
Statement establishes standards for reporting and display of
comprehensive income and its components. The Company does not
believe that the adoption of SFAS No. 130 will have a material
impact on its financial statement presentation.
The Company has not implemented the reporting requirements of
Financial Accounting Standards Board Statement No. 131,
"Disclosures about Segments of an Enterprise and Related
Information" ("SFAS No. 131"), although it will be required to
do so for fiscal 1999 and thereafter. This statement
establishes standards for reporting operating segments in
annual financial statements and requires selected information
about operating segments in interim financial statements. The
Company believes it may be required to show information not
currently disclosed.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
-----------------
In a declaratory judgment action brought against Non-Stop
Logistics Corporation ("Non-Stop") by the Company, the Company
sought certain rights to software pursuant to a letter
agreement with Non-Stop, and Non-Stop asserted various claims
for damages to its business, lost business opportunities and
lost profits, and asserted breaches of the letter agreement
and a confidentiality agreement. On February 27, 1997, the
Bankruptcy Judge (the "Judge") filed an order deciding certain
of the claims at issue.
In May 1997, Non-Stop's claim for damages for the Company's
breach of the confidentiality agreement was tried. On July 7,
1997, the Court filed an order denying Non-Stop's claims for
damages and attorney fees and costs for the Company's breach
of the confidentiality agreement. Additionally, on September
23, 1997, the Court entered an order granting the Company
partial final judgment on its claim based on a $350,000
promissory note. Unless the judgment is bonded pending an
appeal, the Company will be entitled to execute on its
judgment for approximately $435,000 (including accrued
interest) soon after it is entered.
Non-Stop's counterclaim for intentional interference with
prospective business relations has been severed and reserved
for a later jury trial in District Court. Non-Stop is
claiming damages of approximately $10.0 million. Trial on
Non-Stop's claim for intentional interference will not take
place before the winter of calendar 1997. The Company
believes the interference claim is without merit and will
vigorously defend that claim.
ITEM 5. OTHER INFORMATION
-----------------
On September 26, 1997, the Company entered into an Agreement
and Plan of Merger (the "Merger"), with Vornado Realty Trust
("Vornado") and certain of its subsidiaries pursuant to which
a subsidiary of Vornado will merge with and into the Company
and the Company will be acquired by Vornado. A copy of the
Merger Agreement is attached to this Quarterly Report on Form
10-Q as Exhibit 2.1.
Pursuant to the Merger Agreement, each issued and outstanding
share of common stock of the Company will be converted into
the right to receive $20.70 per share in cash and each issued
and outstanding share of preferred stock will be converted
into the right to receive $100.00 per share in cash, plus
accrued and unpaid dividends on the preferred stock to the
time at which the Merger becomes effective (the "Effective
Time"). Immediately prior to the Effective Time, the Company
will cause to be paid to each holder of an option to purchase
shares of common stock of the Company an amount equal to
$20.70 multiplied by the aggregate number of shares underlying
such option minus the aggregate exercise price of such option.
Vornado has represented that upon completion of the Merger the
Company will be in compliance with the provisions of its
outstanding indebtedness relating to changes of control.
The Board of Directors of the Company approved the Merger
Agreement by a unanimous vote of the directors present and
directed that it be submitted to the holders of the Company's
common stock at a special meeting of shareholders. Pursuant to
irrevocable proxies, holders of more than 51% of the outstanding
common stock of the Company have agreed to vote for approval of
the Merger Agreement and approval of the Merger is assured.
Common shareholders of the Company are entitled to vote on the
merger and to dissenters' rights under Oregon law. Copies of
the irrevocable proxies are attached as Exhibit 9.1.
The obligation of each party to effect the Merger is subject
to customary conditions, including absence of legal or
regulatory prohibition. In addition, the obligations of
Americold to effect the Merger are subject to the conditions
that Vornado shall have performed its obligations under the
Merger Agreement, the representations and warranties of
Vornado shall be true and correct at the Effective Time and
Vornado shall have reaffirmed Americold's obligations under
certain employment agreements. The obligations of Vornado are
subject to reciprocal conditions and the condition that
Americold's indebtedness not exceed $471,000,000 at closing.
The merger agreement may be terminated at any time prior to
the Effective Time by mutual consent of either party. The
merger agreement may also be terminated by action of either
party if (i) the Merger has not been consummated by January
15, 1998; or (ii) a court or governmental agency shall have
issued a non-appealable order or ruling restraining or
otherwise prohibiting the Merger. In addition, either party
may terminate the agreement if the other party has materially
breached any of its covenants or made a material
misrepresentation and not cured the same within 15 days of
notice of such breach or misrepresentation.
Subsequent to entering into the Merger Agreement, Vornado
advised the Company that it executed an agreement with
Crescent Real Estate Equities Limited Partnership ("Crescent")
whereby, following the merger and the acquisition of URS
Logistics, Inc. by Vornado, Vornado and Crescent will own
Americold and URS Logistics, Inc. jointly with Vornado as the
managing operating partner owning a 60% interest and Crescent
owning a 40% interest.
The information contained above summarizes certain provisions
of the Merger Agreement. Such summary does not purport to be
complete and is qualified in its entirety by reference to the
merger agreement, and the irrevocable proxies, copies of which
are filed as Exhibits 2.1 and 9.1, 9.2 and 9.3, respectively,
to this Quarterly Report on Form 10-Q and which are
incorporated into this report by reference for all purposes.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
--------------------------------
(a) Exhibits
(2.1) Agreement and Plan of Merger Among Vornado
Realty Trust, Portland Parent, Inc., Portland
Storage Acquisition Co., and Americold
Corporation, dated September 26, 1997
(9.1) Irrevocable Proxy, executed on September 26,
1997, by KIA III - Americold, Inc., L.P.
(9.2) Irrevocable Proxy, executed on September 26,
1997, by Kelso Investment Associates II, L. P.
(9.3) Irrevocable Proxy, executed on September 26,
1997, by Kelso Equity Partners, L.P.
(11) Statement Regarding Computation of Per Share
Earnings
(27) Financial Data Schedule
(b) Reports on Form 8-K
No Reports on Form 8-K were filed during the quarter for
which this report is filed.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
AMERICOLD CORPORATION
/s/ Joel M. Smith
JOEL M. SMITH,
Senior Vice President
and Chief Financial Officer
Date: October 7, 1997
<PAGE>
FORM 10-Q
Exhibit Index
Exhibit Page
- ------- ----
(a) Exhibits
(2.1) Agreement and Plan of Merger Among 23
Vornado Realty Trust, Portland Parent,
Inc., Portland Storage Acquisition Co.,
and Americold Corporation, dated
September 26, 1997
(9.1) Irrevocable Proxy, executed on
September 26, 1997, by KIA III -
Americold, Inc., L.P.
(9.2) Irrevocable Proxy, executed on
September 26, 1997, by Kelso Investment
Associates II, L. P.
(9.3) Irrevocable Proxy, executed on
September 26, 1997, by Kelso Equity
Partners, L.P.
(11) Statement Regarding Computation of
Per Share Earnings
(27) Financial Data Schedule
<PAGE>
<PAGE>
AGREEMENT AND PLAN OF MERGER
AMONG
VORNADO REALTY TRUST,
PORTLAND PARENT, INC.
PORTLAND STORAGE ACQUISITION CO.,
AND
AMERICOLD CORPORATION
Dated as of September 26, 1997
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS 1
ARTICLE II
THE MERGER 7
2.1 The Merger 7
2.2 Articles of Incorporation 8
2.3 By-Laws 8
2.4 Directors and Officers 8
2.5 Shareholders' Meeting 9
2.6 Effective Time 9
ARTICLE III
CONVERSION OF SHARES 9
3.1 Americold Stock 9
3.2 Options 11
3.3 Dissenting Shares 11
3.4 Acquisition Co. Common Stock 11
3.5 Payment for Shares 12
3.6 Adjustment to Prevent Dilution 15
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF AMERICOLD 15
4.1 Organization, etc 15
4.2 Authorization and Binding Obligation 17
4.3 Capitalization 18
4.4 Consents and Approvals; No Conflicts 19
4.5 Financial Statements; SEC Reports 20
4.6 Undisclosed Liabilities 21
4.7 Governmental Approvals and Authorizations 22
4.8 Compliance with Laws 22
4.9 Absence of Certain Payments 22
4.10 Real Property 23
4.11 Property 24
4.12 Intellectual Property 25
4.13 Absence of Conflicts of Interest 26
4.14 Contracts 26
4.15 Labor Matters 27
4.16 Employee Benefit Plans 27
4.17 Actions Pending 30
4.18 Affiliate Transactions 30
4.19 Absence of Certain Changes 30
4.20 Insurance 30
4.21 Taxes 31
4.22 Environmental Matters 32
4.23 Brokers, Finders, etc 34
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF VORNADO,
THE PARENT AND ACQUISITION CO 34
5.1 Organization and Standing 34
5.2 Authorization and Binding Obligation 35
5.3 Consents and Approvals; No Conflicts 35
5.4 Litigation 36
5.5 Finders and Investment Bankers 36
5.6 Financing, etc. 37
ARTICLE VI
COVENANTS 37
6.1 Conduct of Business 37
6.2 Third-Party Consents 40
6.3 Compliance with OBCA; Filings;
Information Statement 40
6.4 Additional Agreements 42
6.5 Acquisition Proposals 42
6.6 Public Announcements 43
6.7 Consent of the Parent 43
6.8 Transfer Taxes 44
6.9 Officers' and Directors' Insurance;
Indemnification of Officers and Directors 44
6.10 Americold Indebtedness 44
6.11 Access 45
6.12 Management Arrangements 45
ARTICLE VII
CLOSING CONDITIONS 45
7.1 Conditions Precedent to the Obligations
of All Parties 45
7.2 Additional Conditions to the Obligation
of Americold 46
7.3 Conditions Precedent to Obligations of
Vornado, the Parent and Acquisition Co 47
ARTICLE VIII
CLOSING 49
8.1 Time and Place 49
8.2 Filings at the Closing; Other Actions 49
ARTICLE IX
NON-SURVIVAL OF REPRESENTATIONS, WARRANTIES AND
COVENANTS 49
ARTICLE X
TERMINATION RIGHTS 49
10.1 Termination 49
10.2 Procedure and Effect of Termination 50
<PAGE>
ARTICLE XI
OTHER PROVISIONS 51
11.1 Amendment and Modification 51
11.2 Benefit and Assignment 51
11.3 No Third-Party Beneficiaries 51
11.4 Entire Agreement 51
11.5 Expenses 52
11.6 Headings 52
11.7 Choice of Law 52
11.8 Notices 52
11.9 Counterparts 54
<PAGE>
SCHEDULES
Schedule 1.5 Americold Indebtedness
Schedule 1.38 Knowledge
Schedule 1.48 Options
Schedule 2.4 Officers of Surviving Corporation
Schedule 4.1(a) Americold Qualification
Schedule 4.1(b) Americold Subsidiaries;
Qualification
Schedule 4.1(c) Third Party Interests
Schedule 4.3 Capitalization
Schedule 4.4 Consents and Approvals; No
Conflicts
Schedule 4.5 Financial Statements
Schedule 4.6 Undisclosed Liabilities
Schedule 4.7 Governmental Approvals and
Authorizations
Schedule 4.8 Compliance with Laws
Schedule 4.10 Real Property
Schedule 4.11 Property
Schedule 4.12 Intellectual Property
Schedule 4.13 Contracts
Schedule 4.14 Conflicts of Interest
Schedule 4.15 Labor Matters
Schedule 4.16 Plans
Schedule 4.17 Litigation
Schedule 4.18 Affiliate Transactions
Schedule 4.19 Adverse Changes
Schedule 4.20 Insurance
Schedule 4.21 Taxes
Schedule 4.22 Environmental Matters
Schedule 4.23 Americold Finders
Schedule 6.1 Conduct of Business
Schedule 6.1(d) Certain Agreements
Schedule 6.1(g) Financing Matters
Schedule 6.1(h) Employee Matters
Schedule 6.2 Third Party Consents
<PAGE>
EXHIBITS
Exhibit A Americold Principal Shareholders
<PAGE>
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of September 26,
1997 (the "Agreement"), among VORNADO REALTY TRUST, a Maryland real
estate investment trust ("Vornado"), PORTLAND PARENT, INC., a
Delaware corporation (the "Parent"), PORTLAND STORAGE ACQUISITION
CO., a Delaware corporation and a wholly-owned subsidiary of the
Parent ("Acquisition Co."), and AMERICOLD CORPORATION, an Oregon
corporation ("Americold").
ARTICLE I
DEFINITIONS
Unless otherwise stated, the following terms when used
herein have the meanings assigned to them below.
1.1 "Acquisition Co." has the meaning set forth in the
preamble to this Agreement.
1.2 "Affiliate" means a Person that directly, or
indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, the Person
specified.
1.3 "Americold" has the meaning set forth in the
preamble to this Agreement.
1.4 "Americold Common Stock" means the common stock,
par value $.01 per share, of Americold.
1.5 "Americold Indebtedness" means the indebtedness of
Americold under the agreements and instruments listed in Schedule
1.5 hereto.
1.6 "Americold Preferred Stock" means the Series A
Variable Rate Cumulative Preferred Stock, par value $100 per share,
of Americold.
1.7 "Americold Principal Shareholder" means each of the
Persons set forth on Exhibit A to this Agreement.
1.8 "Americold Representatives" has the meaning set
forth in Section 6.5 hereof.
1.9 "Americold Shareholders' Meeting" has the meaning
set forth in Section 2.5 hereof.
1.10 "Americold Subsidiary" means any corporation,
partnership, limited liability company, joint venture or other
entity of which Americold owns, directly or indirectly, at least a
majority of the securities or other ownership interests having by
the terms thereof ordinary voting power or otherwise has the right
or power to elect a majority of the board of directors or other
Persons performing similar functions of such corporation,
partnership, limited liability company, joint venture or other
entity.
1.11 "Applicable Law" means all applicable provisions
of all (i) constitutions, treaties, statutes, laws (including, but
not limited to, the common law), rules, regulations, ordinances,
codes or orders of any Governmental Authority and (ii) orders,
decisions, rulings, injunctions, judgments, awards and decrees or
consents of or agreements with any Governmental Authority.
1.12 "Articles of Merger" has the meaning set forth in
Section 2.6 hereof.
1.13 "Board" has the meaning set forth in Section
4.2(b) hereof.
1.14 "Business Day," whether or not initially
capitalized, means every day of the week excluding Saturdays,
Sundays and federal holidays.
1.15 "Certificates" has the meaning set forth in
Section 3.5(a) hereof.
1.16 "Closing" means the closing of the Merger.
1.17 "Closing Date" means the date on which the Closing
occurs.
1.18 "Code" means the Internal Revenue Code of 1986, as
amended, together with all regulations and rulings issued
thereunder by any Governmental
Authority.
1.19 "Common Stock Consideration" means $20.70.
1.20 "Contracts" has the meaning set forth in Section
4.14 hereof.
1.21 "DGCL" means the Delaware General Corporation Law.
1.22 "Dissenting Shares" has the meaning set forth in
Section 3.3 hereof.
1.23 "Effective Time" has the meaning set forth in
Section 2.6 hereof.
1.24 "Environmental Laws" means all Applicable Laws
relating to the protection of human health or the environment.
1.25 "ERISA" means the Employee Retirement Income
Security Act of 1974, as amended, together with the regulations and
rulings issued thereunder by any Governmental Authority.
1.26 "Exchange Act" means the U.S. Securities Exchange
Act of 1934, as amended.
1.27 "Exercise Price" means, with respect to any
Option, the price at which the holder of such Option is entitled to
purchase one share of Americold Common Stock upon exercise of such
Option.
1.28 "Filings" has the meaning set forth in Section
6.3(b) hereof.
1.29 "Financial Statements" has the meaning set forth
in Section 4.5 hereof.
1.30 "GAAP" means United States generally accepted
accounting principles.
1.31 "Governmental Approvals" has the meaning set forth
in Section 4.7 hereof.
1.32 "Governmental Authority" means any nation or
government, any state or other political subdivision thereof or any
entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government, in each
case to the extent the same has jurisdiction over the Person or
property in question.
1.33 "HSRA" means the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, and the regulations adopted
thereunder.
1.34 "Information Statement" has the meaning set forth
in Section 2.5 hereof.
1.35 "IRS" means the Internal Revenue Service of the
United States.
1.36 "Kelso" means Kelso & Company.
1.37 "Kelso Fee" has the meaning set forth in Section
7.2(f).
1.38 "Knowledge" means, with respect to Americold or
any Americold Subsidiary, the actual knowledge of any of the
individuals set forth on Schedule 1.38 hereto.
1.39 "Leased Property" has the meaning set forth in
Section 4.10 hereof.
1.40 "Liens" means all debts, liens, security
interests, mortgages, pledges, judgments, trusts, adverse claims,
liabilities, encumbrances, material rights of way, charges which
are liens and other impairments of title of any kind other than
Permitted Liens.
1.41 "Material Adverse Effect" means a material adverse
effect on the business, assets, properties, liabilities or
financial condition of Americold and the Americold Subsidiaries,
taken as a whole, or on the ability of Americold timely to
consummate the transactions contemplated hereby.
1.42 "Merger" has the meaning set forth in Section 2.1
hereof.
1.43 "Merger Consideration" means the sum of the
aggregate Common Stock Consideration and the aggregate Preferred
Stock Consideration.
1.44 "Merger Filings" has the meaning set forth in
Section 2.6 hereof.
1.45 "Notice" has the meaning set forth in Section
6.3(a) hereof.
1.46 "OBCA" means the Oregon Business Corporation Act.
1.47 "Option Consideration" has the meaning set forth
in Section 3.2 hereof.
1.48 "Options" means the outstanding options to
purchase Americold Common Stock issued prior to the date hereof
pursuant to the option plans listed on Schedule 1.48 hereto.
1.49 "Owned Property" has the meaning set forth in
Section 4.10 hereof.
1.50 "O.R.S." means the Oregon Revised Statutes, as
amended.
1.51 "Parent" has the meaning set forth in the preamble
to this Agreement.
1.52 "Permitted Liens" has the meaning set forth in
Section 4.10 hereof.
1.53 "Person" means an individual, corporation,
partnership, limited liability company, association, trust or other
entity or organization, including any Governmental Authority or any
other government or political subdivision or an agency or
instrumentality thereof.
1.54 "Plans" has the meaning set forth in Section 4.16
hereof.
1.55 "Preferred Stock Consideration" means $100.00,
plus the amount per share of all accrued and unpaid dividends on
the Preferred Stock to the Closing Date.
1.56 "Real Property" has the meaning set forth in
Section 4.10 hereof.
1.57 "Real Estate Laws" means any applicable building,
zoning, subdivision and other land use and similar laws, codes,
ordinances, rules, regulations and orders of Governmental
Authorities.
1.58 "Returns" has the meaning set forth in Section
4.21 hereof.
1.59 "SEC" means the United States Securities and
Exchange Commission.
1.60 "SEC Reports" has the meaning set forth in Section
4.5(b) hereof.
1.61 "Surviving Corporation" has the meaning set forth
in Section 2.1 hereof.
1.62 "Surviving Corporation Common Stock" has the
meaning set forth in Section 3.4 hereof.
1.63 "Tax" has the meaning set forth in Section 4.21
hereof.
1.64 "Takeover Statute" has the meaning set forth in
Section 4.2(d) hereof.
1.65 "Transfer Taxes" means all sales (including,
without limitation, bulk sales), use, value added, documentary,
stamp, gross receipts, registration, transfer, conveyance, excise,
recording, license and other similar Taxes and fees imposed by any
Governmental Authority in connection with a merger.
1.66 "Vornado" has the meaning set forth in the
preamble of this Agreement.
ARTICLE II
THE MERGER
2.1 The Merger. In accordance with the provisions of
this Agreement and the OBCA and the DGCL, at the Effective Time (i)
Acquisition Co. shall be merged with and into Americold (the
"Merger"), and Americold shall be the surviving corporation of the
Merger (hereinafter sometimes called the "Surviving Corporation")
and shall continue its corporate existence under the laws of the
State of Oregon; (ii) the name, identity, existence, rights,
privileges, powers, franchises, properties and assets of Americold
shall continue unaffected and unimpaired; and (iii) the separate
existence of Acquisition Co. shall cease, and all of the rights,
privileges, powers, franchises, properties and assets of
Acquisition Co. shall be vested in Americold. The name of the
surviving corporation shall be "Americold Corporation."
2.2 Articles of Incorporation. The Articles of
Incorporation of Americold in effect immediately prior to the
Effective Time shall be the Articles of Incorporation of the
Surviving Corporation until thereafter amended as provided therein
or by law, except that Article III thereof shall be amended and
restated in its entirety as follows:
"The aggregate number of
shares which the
Corporation shall have
authority to issue is 1,000
shares of Common Stock, par
value $.01 per share."
2.3 By-Laws. The By-Laws of Americold in effect
immediately prior to the Effective Time shall be the By-Laws of the
Surviving Corporation until thereafter amended, altered or repealed
as provided therein.
2.4 Directors and Officers. The directors of
Acquisition Co. immediately prior to the Effective Time shall be
the directors of the Surviving Corporation, each to hold office in
accordance with the Articles of Incorporation and By-Laws of the
Surviving Corporation until his or her successor is appointed and
qualified or until his or her earlier death, resignation or
removal. The individuals set forth on Schedule 2.4 shall be the
officers of the Surviving Corporation, each to hold office in
accordance with the Articles of Incorporation and By-Laws of the
Surviving Corporation until his or her successor is appointed and
qualified or until his or her earlier death, resignation or
removal.
2.5 Shareholders' Meeting. Americold shall, as soon as
practicable following the date of this Agreement, duly call,
convene and hold a meeting of its shareholders (the "Americold
Shareholders' Meeting") for the purpose of obtaining the approval
of this Agreement by the shareholders of Americold
entitled to vote thereon.
2.6 Effective Time. The Merger shall become effective
upon the later to occur of the filing of articles of merger with
the Secretary of State of the State of Oregon in accordance with
O.R.S. 60.494 and 60.501 (the "Articles of Merger") and the filing
with the Secretary of State of the State of Delaware of a
certificate of merger in accordance with Sections 252 and 103 of
the DGCL (together with the Articles of Merger, the "Merger
Filings"). The Merger Filings shall be filed simultaneously with
the Closing. The date and time when the Merger shall become
effective is hereinafter referred to as the "Effective Time."
ARTICLE III
CONVERSION OF SHARES
3.1 Americold Stock. (a) At the Effective Time, by
virtue of the Merger and without any action on the part of the
holder thereof, each share of Americold Common Stock (except for
(i) any shares of Americold Common Stock then owned beneficially or
of record by Vornado, the Parent or Acquisition Co. or any other
subsidiary of Vornado, (ii) shares of Americold Common Stock then
held in the treasury of Americold or any Americold Subsidiary, and
(iii) Dissenting Shares) issued and outstanding immediately prior
to the Effective Time shall be converted into the right to receive
cash from the Parent in an amount per share equal to the Common
Stock Consideration.
(b) At the Effective Time, by virtue of the Merger and
without any action on the part of the holder thereof, each share of
Americold Preferred Stock (except for (i) any shares of Americold
Preferred Stock then owned beneficially or of record by Vornado,
the Parent or Acquisition Co. or any other subsidiary of Vornado
and (ii) shares of Americold Preferred Stock then held in the
treasury of Americold or any Americold Subsidiary) issued and
outstanding immediately prior to the Effective Time shall be
converted into the right to receive cash from the Parent in an
amount per share equal to the Preferred Stock Consideration.
(c) Each share of Americold Common Stock or Americold
Preferred Stock which is then owned beneficially or of record by
Vornado, the Parent or Acquisition Co. or any other direct or
indirect subsidiary of Vornado shall, by virtue of the Merger and
without any action on the part of the holder thereof, be canceled
and retired and cease to exist, without any conversion thereof.
(d) Each share of Americold Common Stock or Americold
Preferred Stock held in the treasury of Americold or any Americold
Subsidiary immediately prior to the Effective Time shall, by virtue
of the Merger, be canceled and retired and cease to exist, without
any conversion thereof.
(e) The holders of certificates representing shares of
Americold Common Stock or Americold Preferred Stock shall, as of
the Effective Time, cease to have any rights as shareholders of
Americold, except such rights, if any, as they may have pursuant to
the OBCA, and, except as aforesaid, their sole right shall be the
right to receive their pro rata share of the Common Stock
Consideration or the Preferred Stock Consideration, as the case may
be, as determined and paid in the manner set forth in this
Agreement.
3.2 Options. Prior to the Effective Time, Americold
shall take such actions as may be necessary such that immediately
prior to the Effective Time, each Option outstanding immediately
prior to the Effective Time, whether or not then exercisable, shall
be canceled and only entitle the holder thereof to receive, as soon
as reasonably practicable after the surrender thereof, cash in an
amount (the "Option Consideration") equal to the product of (i) the
number of shares of Americold Common Stock into which such Option
is exercisable times (ii) the excess of the Common Stock
Consideration over the Exercise Price for such Option.
3.3 Dissenting Shares. Notwithstanding anything in this
Agreement to the contrary, shares of Americold Common Stock which
are held by shareholders who shall have effectively dissented from
the Merger and perfected their dissenters' rights in accordance
with the provisions of O.R.S. 60.564 and 60.571 (the "Dissenting
Shares") shall not be converted into or be exchangeable for the
right to receive any Common Stock Consideration, but the holders
thereof shall be entitled to payment from the Surviving Corporation
of the fair value of such shares in accordance with the provisions
of O.R.S. 60.577; provided, however, that if any such holder shall
have failed to perfect such appraisal rights or shall have
effectively withdrawn or lost such rights, pursuant to O.R.S.
60.687 or otherwise, his or her shares of Americold Common Stock
shall thereupon be converted into and exchangeable for, at the
Effective Time, their pro rata share of the aggregate Common Stock
Consideration as determined and paid in the manner set forth in
this Agreement.
3.4 Acquisition Co. Common Stock. Each share of common
stock, par value $.01 per share, of Acquisition Co. (the
"Acquisition Co. Common Stock"), issued and outstanding immediately
prior to the Effective Time shall, by virtue of the Merger and
without any action on the part of the holder thereof, be converted
into and exchangeable for one fully paid and non-assessable share
of common stock, par value $.01 per share, of the Surviving
Corporation ("Surviving Corporation Common Stock"). From and after
the Effective Time, each outstanding certificate theretofore
representing shares of Acquisition Co. Common Stock shall be deemed
for all purposes to evidence ownership of and to represent the
number of shares of Surviving Corporation Common Stock into which
such shares of Acquisition Co. Common Stock shall have been
converted. Promptly after the Effective Time, the Surviving
Corporation shall issue to the Parent a stock certificate or
certificates representing 1,000 shares of Surviving Corporation
Common Stock in exchange for the certificate or certificates which
formerly represented shares of Acquisition Co. Common Stock, which
shall be canceled.
3.5 Payment for Shares. (a) Prior to the Effective
Time, the Parent shall designate a business entity regularly
engaged in such work and which is reasonably satisfactory to
Americold to act as Paying Agent with respect to the Merger (the
"Paying Agent"). Each record holder (other than Vornado, Parent,
Acquisition Co. or any other subsidiary of Vornado) of Americold
Common Stock or Americold Preferred Stock immediately prior to the
Effective Time will be entitled to receive, upon surrender to the
Paying Agent of the certificates representing such shares of
Americold Common Stock or Americold Preferred Stock, as the case
may be (collectively, the "Certificates") for cancellation, cash in
an amount equal to the product of the number of shares of Americold
Common Stock or Americold Preferred Stock previously represented by
the Certificates multiplied by the Common Stock Consideration or
Preferred Stock Consideration, as the case may be, subject to any
required withholding of taxes. At or prior to the Effective Time,
the Parent shall make available to the Paying Agent sufficient
funds to make all payments in amounts determined pursuant to the
preceding sentence. No interest shall accrue or be paid on the cash
payable upon the surrender of the Certificates. Any funds delivered
or made available to the Paying Agent pursuant to this Section
3.5(a) and not exchanged for Certificates within six months after
the Effective Time will be returned by the Paying Agent to the
Surviving Corporation, which thereafter will act as Paying Agent,
subject to the rights of holders of unsurrendered Certificates
under this Section 3.5(a), and any former shareholders of the
Company who have not previously exchanged their Certificates will
thereafter be entitled to look only to the Surviving Corporation
for payment of their claim for the consideration set forth in
Section 3.1, without any interest, but will have no greater rights
against the Surviving Corporation than may be accorded to general
creditors thereof under applicable law. Notwithstanding the
foregoing, neither the Paying Agent nor any party hereto shall be
liable to a holder of shares of Americold Common Stock or Americold
Preferred Stock for any cash or interest delivered to a public
official pursuant to applicable abandoned property, escheat or
similar laws. As soon as practicable after the Effective Time, the
Surviving Corporation will cause the Paying Agent to mail to each
record holder of shares of Americold Common Stock and Americold
Preferred Stock (other than the Americold Principal Shareholders)
(i) a form of letter of transmittal (which will specify that
delivery will be effected, and risk of loss and title to the
Certificates will pass, only upon proper delivery of the
Certificates to the Paying Agent), which letter shall be in
customary form, and (ii) instructions for use in effecting the
surrender of the Certificates for payment.
(b) With respect to any Certificate alleged to have
been lost, stolen or destroyed, the owner or owners of such
Certificate shall be entitled to the consideration set forth above
upon delivery to the Surviving Corporation of an affidavit of such
owner or owners setting forth such allegation and an indemnity
agreement to indemnify Vornado, the Parent and the Surviving
Corporation, on terms reasonably satisfactory to Vornado, against
any claim that may be made against any of them on account of the
alleged loss, theft or destruction of any such Certificate or the
delivery of the payment set forth above.
(c) Notwithstanding Section 3.5(a), immediately
following the Effective Time, each Americold Principal Shareholder,
upon surrender of the Certificate or Certificates representing all
of the shares of Americold Common Stock and Americold Preferred
Stock owned by such Americold Principal Shareholder together with
the related letter of transmittal, shall be entitled to receive, in
immediately available funds, the amount of cash into which the
aggregate number of shares of Americold Common Stock and Americold
Preferred Stock represented by such Certificate or Certificates
surrendered shall have been converted pursuant to this Agreement.
(d) If consideration is to be delivered to a Person
other than the Person in whose name the Certificate surrendered in
exchange therefor is registered, it shall be a condition to
delivery of the consideration that the Certificate so surrendered
shall be properly endorsed or otherwise in proper form for transfer
and that the Person requesting such consideration shall pay any
transfer or other Taxes required by reason of the payment to a
Person other than the registered holder of the Certificate
surrendered or establish to the satisfaction of the Surviving
Corporation that such Tax has been paid or is not applicable.
(e) Until surrendered in accordance with the provisions
of this Section 3.5, from and after the Effective Time, each
Certificate (other than (i) Certificates representing shares of
Americold Common Stock or Americold Preferred Stock owned
beneficially or of record by Vornado, the Parent, Acquisition Co.
or any other subsidiary of Vornado, (ii) Certificates representing
shares of Americold Common Stock or Americold Preferred Stock held
in the treasury Americold or any Americold Subsidiary and (iii)
Dissenting Shares in respect of which appraisal rights are
perfected) shall represent for all purposes the right to receive
the cash pursuant to Section 3.1(a) or (b), as applicable, as
determined and paid in the manner set forth in this Agreement.
(f) After the Effective Time there shall be no
transfers on the stock transfer books of the Surviving Corporation
of the shares of Americold Common Stock, shares of Americold
Preferred Stock or Options that were outstanding immediately prior
to the Effective Time. If, after the Effective Time, Certificates
are presented to the Surviving Corporation, they shall be canceled
and exchanged for the applicable consideration referred to in this
Section 3.5.
3.6 Adjustment to Prevent Dilution. In the event that
Americold changes the number of shares of Americold Common Stock or
Americold Preferred Stock or securities convertible or exchangeable
into or exercisable for shares of Americold Common Stock or
Americold Preferred Stock issued and outstanding prior to the
Effective Time as a result of a reclassification, stock split
(including a reverse split), stock dividend or distribution,
recapitalization, merger, subdivision, issuer tender or exchange
offer, or other similar transaction, the Common Stock Consideration
and Preferred Stock Consideration
shall be equitably adjusted.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF AMERICOLD
Americold hereby represents and warrants to the Parent
and Acquisition Co. as follows:
4.1 Organization, etc. (a) Americold is a corporation
duly organized and validly existing under the laws of the State of
Oregon and has all requisite corporate power and authority to own,
lease and operate its properties and to carry on its business as
now being conducted. Americold is duly qualified or licensed and in
good standing to do business in each jurisdiction in which the
property owned, leased or operated by it or the nature of the
business conducted by it makes such qualification necessary, except
where the failure to be so qualified or licensed would not
individually or in the aggregate have a Material Adverse Effect or
materially restrict the ability of Americold to conduct business as
presently conducted by it in such jurisdiction. Each jurisdiction
where Americold is so qualified is listed on Schedule 4.1(a)
hereto. Except as set forth on Schedule 4.1(b) hereto, there are no
Americold Subsidiaries and, except as set forth on Schedule 4.1(b)
hereto, Americold does not own, directly or indirectly, any capital
stock of or equity interests in any Person. Americold has
heretofore delivered or made available to the Parent accurate and
complete copies of the Articles of Incorporation and By-Laws of
Americold, as amended and in effect on the date hereof. The stock
certificate books and ledgers of Americold, which have been made
available to the Parent, accurately reflect, at the date hereof,
the ownership of the issued and outstanding capital stock of
Americold.
(b) Each Americold Subsidiary is listed on Schedule
4.1(b) hereto, is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its
incorporation and has all requisite corporate power and authority
to own, lease and operate its properties and to carry out its
business as now being conducted. Each Americold Subsidiary is duly
qualified or licensed and in good standing to do business in each
jurisdiction in which the property owned, leased or operated by it
or the nature of the business conducted by it makes such
qualification necessary, except where the failure to be so
qualified or licensed would not individually or in the aggregate
have a Material Adverse Effect or materially restrict the ability
of such Americold Subsidiary to conduct business as presently
conducted by it in such jurisdiction. Each jurisdiction where each
Americold Subsidiary is so qualified is listed on Schedule 4.1(b)
hereto. Americold has heretofore delivered to the Parent accurate
and complete copies of the Articles of Incorporation and By-Laws or
other organizational documents of each Americold Subsidiary, as
amended and in effect on the date hereof.
(c) Except as set forth on Schedule 4.1(c) hereto,
Americold owns of record and beneficially 100% of the issued and
outstanding capital stock and all other equity interests in each
Americold Subsidiary, free and clear of any Liens.
4.2 Authorization and Binding Obligation. (a) Americold
has all necessary corporate power and authority to execute and
deliver this Agreement and to consummate the transactions
contemplated hereby. Subject to the approvals referred to in
Section 2.5, Americold's execution, delivery and performance of
this Agreement has been duly and validly authorized by all
necessary corporate action on the part of Americold and this
Agreement has been duly executed and delivered by Americold. Except
for the actions referred to in Sections 2.5, 4.2(b) and 4.2(d)
hereof, which actions are in full force and effect, and the giving
of notice in accordance with O.R.S. 60.214, 60.561 and 60.567, no
other corporate action or proceedings on the part of Americold are
necessary to authorize this Agreement or the consummation of the
transactions contemplated hereby. Subject to the approvals referred
to in Section 2.5, this Agreement constitutes the valid and binding
obligation of Americold, enforceable against Americold in
accordance with its terms, except as may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar
rights of creditors generally and by general principles of equity.
(b) The Board of Directors of Americold (the "Board")
has authorized the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby and has not
withdrawn such authorization. A true and complete copy of such
approvals by the Board has been delivered to the Parent. The Board
of Directors of Americold has received the opinion of its financial
advisors, Houlihan, Lokey, Howard & Zukin, to the effect that the
consideration to be paid by Parent to the holders of the shares of
Americold Common Stock and Americold Preferred Stock in the Merger
is fair to such holders from a financial point of view.
(c) Subsequent to the giving of the authorization
referred to in the preceding paragraph, each Americold Principal
Shareholder has executed and delivered to the Parent an irrevocable
proxy authorizing the Parent to vote, at the Americold
Shareholders' Meeting, the shares of Americold Common Stock set
forth opposite such Americold Principal Shareholder's name on
Exhibit A hereto, which shares represent all shares of Americold
Common Stock owned beneficially or of record by such Americold
Principal Shareholder, in favor of adopting this Agreement. Each
Americold Principal Shareholder acknowledges, and the proxy
recites, that such proxy is coupled with an interest.
(d) The Board has taken all appropriate action so that
the entry into this Agreement, the granting of the proxies provided
for under Section 4.2(c) hereof and the consummation of the
transactions contemplated by this Agreement shall be exempted from
the provisions of O.R.S. 60.801-60.816 and 60.825. No other "fair
price," "moratorium," "control share acquisition" or other similar
anti-takeover statute or regulation, including, without limitation,
O.R.S. 60.801-60.816 and 60.825 (each, a "Takeover Statute") or any
applicable anti-takeover provision in the Articles of Incorporation
and By-laws of Americold is, or at the Effective Time will be,
applicable to Americold, the shares of Americold Common Stock and
Americold Preferred Stock, the Merger or the other transactions
contemplated by this Agreement.
4.3 Capitalization. (a) The authorized Americold Common
Stock and other authorized capital stock of Americold and each of
the Americold Subsidiaries is as set forth on Schedule 4.3 hereto.
All issued and outstanding shares of Americold Common Stock and
other equity interests of Americold and each of the Americold
Subsidiaries are duly authorized, validly issued, fully paid,
non-assessable and free of preemptive rights. Schedule 4.3 hereto
sets forth the name of each Person who owns beneficially or of
record any shares of capital stock and other equity interests of
any Americold Subsidiary and, in the case of each Americold
Subsidiary, the number of shares owned by each such Person.
(b) Except as set forth on Schedule 4.3 hereto, there
are not now, and at the Effective Time there will not be, any
options, warrants, calls, subscriptions, or other rights or other
agreements or commitments of any nature whatsoever obligating
Americold or any of the Americold Subsidiaries to issue, transfer,
deliver or sell, or cause to be issued, transferred, delivered or
sold, any additional shares of Americold Common Stock or other
equity interest of Americold or any of the Americold Subsidiaries,
or any securities or obligations convertible into or exchangeable
for any such Americold Common Stock or other equity interests, or
obligating Americold or any of the Americold Subsidiaries to grant,
extend or enter into any such agreement or commitment and no
authorization therefor has been given or made by Americold or any
Americold Subsidiary. Except for the arrangements described in
Schedule 4.3 hereto, there are no contractual arrangements that
obligate Americold or any Americold Subsidiary to (i) repurchase,
redeem or otherwise acquire any of its capital stock or its other
equity interests or (ii) pay any Person any consideration that is
calculated with reference to the consideration to be paid to the
Americold Shareholders under this Agreement.
4.4 Consents and Approvals; No Conflicts. Except for
applicable requirements of the HSRA and as set forth on Schedule
4.4 hereto and the approvals referred to in Sections 2.5 and 4.2(b)
hereof, the giving of notice in accordance with O.R.S. 60.214 and
the filing and recordation of the Merger Filings as required by the
OBCA and the DGCL, no filing with, and no permit, authorization,
consent or approval of, any Governmental Authority or other third
party is necessary for the consummation by Americold of the
transactions contemplated by this Agreement, except where the
failure to make such filing or obtain such authorization, consent
or approval would not individually or in the aggregate have a
Material Adverse Effect. Subject to obtaining such approvals and
making such filings, neither the execution and delivery of this
Agreement by Americold nor the consummation by Americold of the
transactions contemplated hereby, nor compliance by Americold with
any of the provisions hereof, will (i) result in any violation of
any provision of the Articles of Incorporation or By-Laws or other
organizational documents of Americold or any Americold Subsidiary,
(ii) violate any Applicable Law or (iii) except as set forth on
Schedule 4.4 hereto, result in a violation or breach of, or
constitute (with or without due notice or lapse of time or both) a
default or give rise to a right of any Person to terminate, cancel
or accelerate the payment or performance of any liability,
obligation or commitment under any contract (including any Contract
listed in Schedule 4.13 hereto) to which Americold or any of the
Americold Subsidiaries is a party, or by which any of their
respective properties are bound, except, in the case of clauses
(ii) and (iii) above, where such violation, breach, default or
right of termination, cancellation or acceleration would not
individually or in the aggregate have a Material Adverse Effect.
4.5 Financial Statements; SEC Reports. (a) Americold
has furnished the Parent with (i) a consolidated balance sheet of
Americold as at February 28, 1997 and consolidated statements of
operations, changes in shareholders' equity (deficit) and cash
flows of Americold for such year, together with the related audit
report of KPMG Peat Marwick LLP and (ii) an unaudited consolidated
balance sheet of Americold as of August 31, 1997 and an unaudited
consolidated statement of operations of Americold for the six-month
period ended August 31, 1997. All such financial statements are
referred to herein collectively as the "Financial Statements."
Other than as set forth in Schedule 4.5 hereto, the Financial
Statements (including any related schedules and/or notes) have been
prepared in accordance with GAAP consistently applied throughout
the periods presented, except that the unaudited financial
statements are subject to year-end adjustments and do not contain
footnotes. The balance sheets included in the Financial Statements
fairly present, in all material respects, the financial position of
Americold and the Americold Subsidiaries as at the dates thereof,
and the statements of operations, changes in shareholders' equity
(deficit) and cash flows included in the Financial Statements
fairly present, in all material respects, the results of the
operations, changes in shareholders' equity (deficit) and cash
flows, respectively, of Americold and the Americold Subsidiaries
for the periods indicated.
(b) The Company has filed all forms, reports,
statements and schedules with the SEC required to be filed pursuant
to the Exchange Act, and the regulations of the SEC thereunder,
since January 1, 1996. As of their respective dates, all reports
(including the financial statements included or incorporated
therein) filed by Americold with the SEC (collectively, the "SEC
Reports") complied in all material respects with all applicable
requirements of the Exchange Act and the regulations of the SEC
thereunder applicable to such SEC Reports, and did not contain any
untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make
the statements made therein, in light of the circumstances under
which they were made, not misleading.
4.6 Undisclosed Liabilities. Except (i) to the extent
reflected or reserved against in the August 31, 1997 balance sheet
of Americold included in the Financial Statements, (ii) to the
extent specifically set forth on Schedule 4.6 hereto, and/or (iii)
for obligations of Americold arising in the ordinary course of the
performance of its responsibilities under any Contracts (as defined
in Section 4.14 hereof) listed on Schedule 4.14 or any agreement
which is not required to be listed on Schedule 4.14 because of the
limitations set forth in Section 4.14, neither Americold nor any
Americold Subsidiary has any liabilities or obligations of any
nature, whether liquidated, unliquidated, accrued, absolute,
contingent or otherwise which would individually or in the
aggregate have a Material Adverse Effect.
4.7 Governmental Approvals and Authorizations. Except
as set forth in Schedule 4.7 hereto, all approvals, permits,
qualifications, authorizations, licenses, franchises, consents,
orders, registrations or other approvals (collectively, the
"Governmental Approvals") of all Governmental Authorities which are
necessary in order to permit Americold and the Americold
Subsidiaries to carry on their respective businesses have been
obtained and are in full force and effect, except where the failure
to obtain such approval, permit, qualification, authorization,
license, franchise, consent, order, registration or other approval,
or the failure to be in full force and effect, would not
individually or in the aggregate have a Material Adverse Effect.
There has been no violation, cancellation, suspension or revocation
of any such Governmental Approval. This Section 4.7 does not relate
to environmental matters, which are the subject of Section 4.22.
4.8 Compliance with Laws. Except as set forth on
Schedule 4.8 hereto, neither Americold nor any Americold Subsidiary
is in conflict with or in violation or breach of or default under
(a) any Applicable Law or (b) any provision of its organizational
documents, and since February 28, 1997, neither Americold nor any
Americold Subsidiary has received any written notice alleging any
such conflict, violation, breach or default, except for any such
violations, breaches or defaults which would not individually or in
the aggregate have a Material Adverse Effect. This Section 4.8 does
not relate to environmental matters, which are the subject of
Section 4.22.
4.9 Absence of Certain Payments. Neither Americold, any
Americold Subsidiary, or any director, officer, employee or agent
of, or consultant or other representative of, Americold or any
Americold Subsidiary, or any other Person authorized to act on
behalf thereof, has unlawfully offered, paid or agreed to pay,
directly or indirectly, any money or anything of value to or for
the benefit of any individual who is or was an official or employee
or candidate for office of any Governmental Authority, or any
employee or agent of any customer or supplier of Americold or any
Americold Subsidiary, except for any such offer, payment or
agreement to pay which would not individually or in the aggregate
have a Material Adverse Effect and would not reasonably be expected
to subject Americold or any Americold Subsidiary to any damage or
penalty in any civil, criminal or governmental litigation or
proceeding.
4.10 Real Property. Schedule 4.10 hereto sets forth a
complete list of (i) all real property and all interests in real
property owned in fee by Americold or the Americold Subsidiaries
(individually, an "Owned Property") and (ii) all real property and
all interests in real property leased by Americold or the Americold
Subsidiaries (individually, a "Leased Property"; together with the
Owned Property, the "Real Property"). Except as set forth on
Schedule 4.10 hereto, Americold and the Americold Subsidiaries have
(i) good, marketable and insurable fee title to all Owned Property,
and (ii) good and valid leasehold interests in all Leased Property,
and in the case of all of the Owned Properties and those leasehold
estates covered by the title insurance policies and update letters
or endorsements (as the case may be) set forth on Schedule 4.10
hereto, such title is free and clear of any Liens, except (a) those
created or permitted under the Americold Indebtedness, (b) as
disclosed in those certain owner's title insurance policies and
update letters or endorsements, as the case may be, set forth on
Schedule 4.10 hereto, and (c) other easements, rights of way and
minor and immaterial liens, charges or encumbrances that do not
interfere with the use of the Real Property in the normal conduct
of the business of Americold and the Americold Subsidiaries and
that do not materially impair the value of the Real Property
(collectively, the "Permitted Liens"). Complete and correct copies
of each deed or lease relating to the Real Property described on
Schedule 4.10 hereto have been furnished or made available to the
Parent. The current use and operation of the Real Property does not
violate in any material respect any instrument of record affecting
the Real Property. Except as disclosed on Schedule 4.10 hereto,
since February 28, 1997, no damage or destruction has occurred and,
to the Knowledge of Americold, no condemnation or rezoning
proceeding has been threatened or commenced with respect to any of
the Real Property that would individually or in the aggregate
materially impair the continued use or operation of the Owned
Property or the Leased Property. To the Knowledge of Americold, the
Owned Property is in compliance with all Real Estate Laws, and
neither Americold nor any Americold Subsidiary has any Knowledge of
any written notice of violation or claimed violation of any Real
Estate Law, in either case except where such violation or lack of
compliance would not individually or in the aggregate materially
restrict the ability of Americold or any Americold Subsidiary to
conduct its business as presently conducted by it at any location.
Except as disclosed on Schedule 4.10 hereto, neither Americold nor
any Americold Subsidiary is obligated under or a party to any
option, right of first refusal or other contractual right to
purchase, acquire, sell or dispose of any Real Property. Neither
Americold nor any Americold Subsidiary is a lessor, sublessor or
grantor under any lease, sublease or other instrument granting to
another Person any right to the possession, lease, occupancy or
enjoyment of the Real Property, other than pursuant to any
agreements listed on Schedule 4.14 hereto. This Section 4.10 does
not relate to environmental matters, which are the subject of
Section 4.22.
4.11 Property. Schedule 4.11 hereto sets forth a
complete list as of August 31, 1997 of each item of property, plant
and equipment owned or leased by Americold or any Americold
Subsidiary. Except as set forth on Schedule 4.11 hereto, Americold
and each of the Americold Subsidiaries has good and valid title to
all tangible personal property and assets which it owns, including
the material tangible personal property reflected in the balance
sheets included in the Financial Statements as being owned by
Americold or such Americold Subsidiary, as the case may be, except
for such tangible personal property and assets disposed of in the
ordinary course of business, consistent with past practice, since
August 31, 1997 having a value not in excess of $250,000. Americold
and each of the Americold Subsidiaries has a valid legal right to
use all assets which it does not own but uses in the conduct of its
business, except where the failure to have such valid legal right
would not individually or in the aggregate have a Material Adverse
Effect.
4.12 Intellectual Property. (a) Americold and each
Americold Subsidiary possesses all patents, trademarks, service
marks, trade names, copyrights and licenses that are necessary for
the use or ownership of its respective properties and assets, and
the maintenance and operation of its respective businesses as
currently conducted. Neither Americold nor any Americold Subsidiary
uses any registered trademarks, trade names, copyrights or patents
(or have applications therefor pending) in connection with their
respective businesses, except for those set forth on Schedule 4.12
hereto (collectively referred to as the "Intellectual Property").
Except as set forth on Schedule 4.12 hereto, the Intellectual
Property is owned by Americold or a Americold Subsidiary, as
indicated on Schedule 4.12 hereto, and is not subject to any
license, royalty arrangement or dispute. To the Knowledge of
Americold, except as set forth on Schedule 4.12 hereto, no
registered trademark or trade name used by Americold or any
Americold Subsidiary infringes on any trademark or trade name in
any state or country in which such trademark or trade name is used
by Americold or such Americold Subsidiary. Neither Americold nor
any Americold Subsidiary has received written notification of
infringement of any patent, copyright, trademark or trade name, or
any application therefor, from any Person.
(b) Americold and each Americold Subsidiary possesses
the right to use all of its logistics and RF software and related
data bases for the conduct of its respective operations as
currently conducted. To the Knowledge of Americold, no other Person
has any material interest in any such software or data bases (other
than any licensor thereof which is not an officer, director or
Affiliate of Americold, any Americold Subsidiary or any Americold
Principal Shareholder).
4.13 Absence of Conflicts of Interest. Except as set
forth on Schedule 4.13 hereto, none of the Americold Principal
Shareholders nor any officer, director or Affiliate of Americold or
any Americold Subsidiary has any material interest in any material
contract or material property (real or personal), tangible or
intangible, used in the business of Americold or any Americold
Subsidiary.
4.14 Contracts. Schedule 4.14 hereto lists (or
describes in the case of oral contracts) each contract, note, debt
instrument, lease, sublease, warehouse services agreement, covenant
not to compete, supply agreement, guarantee, licensing agreement,
partnership agreement, joint venture agreement, employment
agreement (other than employment agreements set forth on Schedule
4.16 hereto), collective bargaining agreement or other agreement or
commitment of any kind, whether written or oral, to which Americold
or any Americold Subsidiary is a party (other than agreements set
forth on Schedule 4.16 hereto) or by which either of them is bound
(each, a "Contract"), provided that such Schedule need not list (i)
any written or oral Contract or related written Contracts under
which the aggregate payments required to be made by or to Americold
or any Americold Subsidiary over the life of the Contract or
Contracts are less than $300,000, (ii) any rate quote or (iii) any
warehouse receipt. Complete copies of every written Contract listed
on Schedule 4.14 hereto have been previously made available to the
Parent. Each of Americold and the Americold Subsidiaries has
performed all material obligations required to be performed by it
to date under the Contracts (and every employment contract listed
on Schedule 4.16 hereto), and neither Americold nor any Americold
Subsidiary has received written (or, to the Knowledge of Americold,
oral) notice that it is in material default in the performance of
any of its obligations under any Contract.
4.15 Labor Matters. Except as described on Schedule
4.15 hereto, since February 28, 1997 there have been no work
stoppages or labor difficulties relating to employees of Americold
or the Americold Subsidiaries. There are no labor disputes
currently subject to any unfair labor practice complaint, grievance
procedure, arbitration or litigation, nor is there any default or
any event which, with notice or the passage of time or both, would
become a default, under any agreement with any labor union or
association representing employees of Americold or any Americold
Subsidiary, except for any such dispute, procedure, arbitration,
litigation or default which would not individually or in the
aggregate have a Material Adverse Effect. Except as described on
Schedule 4.15 hereto, there are no strikes, picketing, work
stoppages or representation petitions pending or, to Americold's
Knowledge, threatened with respect to any employee of Americold or
any Americold Subsidiary.
4.16 Employee Benefit Plans. (a) Schedule 4.16 hereto
contains a true and complete list of each "employee benefit plan,"
as such term is defined in Section 3(3) of ERISA, and each bonus,
medical, incentive or deferred compensation, severance, retention,
change in control, equity incentive or other material employee
benefit plan, program or policy maintained or contributed to by
Americold or any Americold Subsidiary for the benefit of its
respective employees or former employees or with respect to which
Americold or a Americold Subsidiary is obligated to contribute on
behalf of its employees and current or former Directors
(collectively, the "Plans"). Americold has made available to the
Parent true and complete copies of all Plans; all related trust
agreements and insurance contracts forming a part of any Plans; the
most recent actuarial and trust reports prepared for any such Plan;
the most recent Form 5500 filed in respect of each such Plan and
all schedules thereto; the most recent determination letter issued
in respect of each such Plan; the current summary plan descriptions
with respect to such Plans for which such a description has been
distributed; and all amendments to any such document.
(b) Each Plan intended to be qualified under Section
401(a) of the Code has received a favorable determination letter
from the IRS with respect to "TRA" (as defined in Section 1 of Rev.
Proc. 93-39) as to the qualification thereof under Section 401(a)
of the Code and, to the Knowledge of Americold, no amendment has
been made to any such Plan since the date of such determination
letter that has or would result in the disqualification of such
Plan under Section 401(a) of the Code. Each of the Plans has been
operated and administered in all material respects in accordance
with applicable laws, including but not limited to ERISA and the
Code. There are no material pending or, to the Knowledge of
Americold, threatened claims by or on behalf of any of the Plans or
by any employee participating therein (other than routine claims
for benefits). All contributions required to have been made by
Americold and the Americold Subsidiaries to any Plan pursuant to
applicable law (including, without limitation, ERISA and the Code)
have been made on a timely basis. Neither Americold nor any of the
Americold Subsidiaries has engaged in a transaction with respect to
any Plan that, assuming the taxable period of such transaction
expired as of the date hereof, could subject Americold or any of
the Americold Subsidiaries to a tax or penalty imposed by either
Section 4975 of the Code or Section 502(i) of ERISA in an amount
which could be material.
(c) As of the date hereof, no liability under Title IV
of ERISA (other than for the payment of premiums under Section
4007) has been or is expected to be incurred by Americold or any
Americold Subsidiary with respect to any ongoing, frozen or
terminated "single employee plan", within the meaning of Section
4001(a)(15) of ERISA, currently or formerly maintained by any of
them. Americold and any Americold Subsidiary have not incurred and
do not expect to incur any withdrawal liability with respect to a
multi-employer plan (within the meaning of Section 4063 or 4064 of
ERISA).
(d) No Plan is a multiple employer plan within the
meaning of Section 4063 or 4064 of ERISA.
(e) Except for Americold and each Americold Subsidiary,
no other trade or business, whether or not incorporated, is
currently or, within the preceding six years, has been required to
be treated as a "single employer" with Americold pursuant to clause
(b), (c) or (m) of Section 414 of the Code.
(f) Neither Americold nor any Americold Subsidiary has
any obligations for retiree health and life benefits under any
Plan, except as set forth on Schedule 4.16(f) hereto.
(g) Except as set forth in Schedule 4.16 hereto, the
consummation of the transactions contemplated by this Agreement
will not (i) entitle any employees of Americold or any Americold
Subsidiary to severance pay, (ii) accelerate the time of payments
or vesting or trigger any payment of compensation or benefits
under, increase the amount payable or trigger any other material
obligation pursuant to, any Plan or (iii) result in any breach or
violation of, or a default under, any of the Plans.
4.17 Actions Pending. Except as set forth in Schedule
4.17 hereto, there is no civil, criminal or administrative action,
suit, hearing, claim, litigation, proceeding or investigation
pending or, to the Knowledge of Americold, threatened, against or
affecting Americold or any Americold Subsidiary or the business or
any of the assets of Americold or any Americold Subsidiary, or
which seeks to enjoin or prohibit, or otherwise questions the
validity of, any action taken or to be taken in connection with
this Agreement, and there is no order, decision, ruling,
injunction, judgment, award or decree or consent of or agreements
with any Governmental Authority against affecting Americold or any
Americold Subsidiary or the business or assets of Americold or any
Americold Subsidiary, or which enjoins or prohibits, any action
taken or to be taken in connection with this Agreement.
4.18 Affiliate Transactions. Except as set forth on
Schedule 4.18 hereto, there are no existing agreements,
understandings or arrangements between Americold or any Americold
Subsidiary, on the one hand, and any Affiliate of Americold or any
Americold Subsidiary, on the other hand.
4.19 Absence of Certain Changes. Except as set forth on
Schedule 4.19 hereto, since August 31, 1997, (a) Americold and the
Americold Subsidiaries have conducted their respective businesses
only in the ordinary and usual course of their respective
businesses, and (b) there has not been any material adverse change
in the financial condition, assets, owned or leased properties,
business or results of operations of Americold or any Americold
Subsidiary that, individually or in the aggregate, has had a
Material Adverse Effect and (c) neither Americold nor any Americold
Subsidiary has taken any action of the type described in any clause
of Section 6.1.
4.20 Insurance. Schedule 4.20 hereto lists all material
insurance policies maintained by, or for the benefit of, Americold
or any Americold Subsidiary, as an insured. All such insurance
policies are in full force and effect, all premiums due thereon
have been paid and no notice of termination of any such policy has
been received by the insured thereunder.
4.21 Taxes. Except as set forth on Schedule 4.21
hereto, or as reflected or reserved against in the February 28,
1997 balance sheet included in the Financial Statements, (i)
Americold and the Americold Subsidiaries have (or by the Closing
Date will have) duly and timely filed or caused to be filed all Tax
Returns that are required to be filed on or before the Closing Date
or the time for filing such returns shall have been validly
extended to a date after the Closing Date (collectively, the
"Returns"), except to the extent that the failure to so file would
not individually or in the aggregate have a Material Adverse
Effect; (ii) Americold and the Americold Subsidiaries have paid all
Taxes shown or required to be shown on such Returns, and have (or
by the Closing will have) withheld to the appropriate Taxing
Authority, all federal and state Taxes that are required to be
withheld on or before the Closing Date, except to the extent that
the failure to so pay, withhold or remit would not individually or
in the aggregate have a Material Adverse Effect; (iii) no claim in
writing by the IRS or any other Taxing Authority for assessment or
collection of Taxes, that are or may become payable by Americold or
the Americold Subsidiaries or chargeable as a Lien upon the assets
thereof, has been received by Americold or any Americold
Subsidiary; (iv) taxable years of Americold and the Americold
Subsidiaries through the taxable year ended 1990 have been examined
and closed (v) neither Americold nor any Americold Subsidiary has
granted any extension or waiver of the limitation period applicable
to any Returns, which period (after giving effect to such extension
or waiver) has not yet expired; (vi) neither Americold nor any
Americold Subsidiary has received any notice in writing of any
claim, audit, action, suit, proceeding or investigation now pending
against or with respect to Americold or any Americold Subsidiary in
respect of any Tax; (vii) there are no requests for rulings or
determinations in respect of any Tax pending between Americold or
any Americold Subsidiary, on the one hand, and any Taxing Authority
on the other; and (viii) neither Americold nor any Americold
Subsidiary has (A) been a member of an affiliated group, or (B)
filed or been included in a combined, consolidated or unitary
Return, in each case involving group members other than Americold
and the Americold Subsidiaries and (ix) neither Americold nor any
of its subsidiaries has (a) elected to be treated as a "real estate
investment trust" for federal income tax purposes for any taxable
year ending after December 31, 1993 or (b) acquired, since January
1, 1994, a substantial portion of the assets of an entity whose
election to be treated as a "real estate investment trust" has been
terminated or revoked. Schedule 4.21 hereto contains a list of
states, territories and jurisdictions (whether foreign or domestic)
with respect to which any income Tax Return has been filed by
Americold or any Americold Subsidiary within the last three taxable
years.
For purposes of this Agreement: (a) "Tax" means any net
income, alternative or add-on minimum tax, gross income, gross
receipts, sales, use, ad valorem, value added, transfer, franchise,
profits, license, withholding on amounts paid to or by Americold or
any Americold Subsidiary, payroll, employment, excise, severance,
stamp, occupation, premium, property, environmental or windfall
profits tax, custom duty or other tax, governmental fee or other
like assessment or charge of any kind whatsoever, together with any
interest or penalty, addition to tax or additional amount imposed
by any Governmental Authority (domestic or foreign) (a "Taxing
Authority"), (b) "Taxes" shall have a correlative meaning and (c)
"Tax Returns" shall mean reports, returns, information statements
relating to Taxes or other documents filed or maintained or
required to be filed or maintained, in connection with any Tax.
4.22 Environmental Matters. Except as set forth on
Schedule 4.22 hereto and in the Environmental Reports listed
thereon, Americold's and each Americold Subsidiary's operation and
use of its assets and the Real Property are in compliance in all
respects with all Environmental Laws, except to the extent that any
such noncompliance would not individually or in the aggregate have
a Material Adverse Effect. Except as set forth on Schedule 4.22 or
in the Environmental Reports listed thereon, Americold and the
Americold Subsidiaries have obtained all environmental, health and
safety permits necessary for the operation of the business of
Americold and the Americold Subsidiaries as presently conducted,
and all such permits are in full force and effect and Americold and
each Americold Subsidiary are in compliance in all respects with
the terms and conditions of each such permit, except, in each case,
to the extent that any such failure to obtain or noncompliance
would not individually or in the aggregate have a Material Adverse
Effect. Except as disclosed in Schedule 4.22 or in the
Environmental Reports listed thereon and except as could not
reasonably be expected to have individually or in the aggregate a
Material Adverse Effect, (i) no property currently owned or
operated by Americold or any Americold Subsidiary, including the
Owned and Leased Properties, has been contaminated in any material
respect with any substance regulated under any Environmental Law
such that any removal or remedial action is required under
Applicable Law; (ii) Americold and the Americold Subsidiaries are
not subject to any material liability for any off-site disposal or
contamination; and (iii) there are no other conditions or
violations involving Americold or any Americold Subsidiary
(including the presence of asbestos, underground storage tanks,
chlorofluorocarbons, Freon and polychlorinated biphenyls) that are
likely to result in any material claims, liabilities or costs or
any restrictions on the ownership, use or transfer of any Owned or
Leased Property in connection with any Environmental Law. Except as
disclosed in Schedule 4.22, to the Knowledge of Americold, there
are not other environmental reports, studies, assessments, sampling
results or other written environmental analyses relating to any
Owned Property ("Environmental Reports") and a copy of each of
these Environmental Reports has been made available to Parent at
least five days prior to the date hereof.
4.23 Brokers, Finders, etc. Except as described on
Schedule 4.23, neither Americold nor any Americold Subsidiary has
employed, or is subject to the valid claim of, any broker, finder
or other financial intermediary in connection with the transactions
contemplated by this Agreement or the transactions contemplated
hereby, who might be entitled to a fee or commission in connection
herewith.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF VORNADO, THE PARENT AND ACQUISITION CO.
Vornado, the Parent and Acquisition Co., jointly and
severally, represent and warrant to Americold as follows:
5.1 Organization and Standing. Vornado is a real estate
investment trust duly organized and in good standing under the laws
of the State of Maryland and has the power and authority to carry
on its business as presently conducted, except where the failure to
be so qualified would not individually or in the aggregate have a
material adverse effect on its ability to timely perform its
obligations hereunder or consummate the transactions contemplated
hereby. The Parent is a corporation duly organized and in good
standing under the laws of the State of Delaware and has the power
and authority to carry on its business as presently conducted,
except where the failure to be so qualified would not individually
or in the aggregate have a material adverse effect on its ability
to timely perform its obligations hereunder or consummate the
transactions contemplated hereby. Acquisition Co. is a corporation
duly organized, validly existing and in good standing under the
laws of the State of Delaware and has all requisite corporate power
and authority to carry on its business as presently conducted,
except where the failure to be so qualified would not individually
or in the aggregate have a material adverse effect on its ability
to timely perform its obligations hereunder or consummate the
transactions contemplated hereby.
5.2 Authorization and Binding Obligation. Each of
Vornado, the Parent and Acquisition Co. has all necessary
partnership, corporate or other power and authority to execute and
deliver this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement
by the Vornado, Parent and Acquisition Co. and the consummation by
Vornado, the Parent and Acquisition Co. of the transactions
contemplated hereby have been duly and validly authorized and
approved by all necessary partnership, corporate (or other) action
on the part of each of Vornado, the Parent and Acquisition Co. and
no other corporate action or other proceedings on the part of
Vornado, the Parent or Acquisition Co. is necessary to authorize
this Agreement or the consummation of the transactions contemplated
hereby. This Agreement has been duly executed and delivered by each
of Vornado, the Parent and Acquisition Co. and constitutes a valid
and binding obligation of Vornado, the Parent and Acquisition Co.,
enforceable against Vornado, the Parent and Acquisition Co. in
accordance with its terms, except as may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar
rights of creditors generally and by general principles of equity.
5.3 Consents and Approvals; No Conflicts. Except for
applicable requirements of the HSRA and filing and recordation of
the Merger Filings as required by the OBCA and the DGCL, no filing
with, and no permit, authorization, consent or approval of, any
public body or authority is necessary for the consummation by
Vornado, the Parent or Acquisition Co. of the transactions
contemplated by this Agreement, except where the failure to make
such filing or obtain such permit, authorization, consent or
approval, would not individually or in the aggregate have a
material adverse effect on such Person's ability to timely perform
its obligations hereunder or consummate the transactions
contemplated hereby. Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated
hereby, nor compliance by Vornado, the Parent or Acquisition Co.
with any of the provisions hereof will (a) result in any violation
of any provision of the organizational documents of Vornado, the
Parent or Acquisition Co., (b) violate any Applicable Law, or (c)
result in a material violation or breach of, or constitute (with or
without due notice or lapse of time or both) a material default (or
give rise to any right of termination, cancellation or
acceleration) under, any material contract, agreement, note, bond,
mortgage, indenture, license, lease, franchise, permit, Plan or
other instrument or obligation to which Vornado, the Parent or
Acquisition Co. is a party, or by which any of them or any of their
respective properties is bound, except in the case of clauses (b)
and (c) above, where such violation, breach, default or right of
termination would not individually or in the aggregate have a
material adverse effect on such Person's ability to timely perform
its obligations hereunder or to consummate the transactions
contemplated hereby.
5.4 Litigation. There is no claim, litigation,
proceeding or investigation pending or, to the best of Vornado's,
the Parent's or Acquisition Co.'s knowledge, threatened, which
seeks to enjoin or prohibit, or otherwise questions the validity
of, any action taken or to be taken by Vornado, the Parent or
Acquisition Co. in connection with this Agreement or which would
individually or in the aggregate have a material adverse effect on
such person's ability timely to perform its respective obligations
hereunder or to consummate the transactions contemplated hereby.
5.5 Finders and Investment Bankers. None of Vornado,
the Parent or Acquisition Co. has employed, or is subject to the
valid claim of, any broker, finder or other financial intermediary
in connection with the transactions contemplated by this Agreement
or the transactions contemplated hereby, who might be entitled to
a fee or commission in connection herewith or therewith payable by
Americold or any Americold Subsidiary.
5.6 Financing, etc. Vornado has available to it
pursuant to existing credit facilities sufficient cash on hand to
allow it to pay the Merger Consideration, consummate the
transactions contemplated hereby and pay related fees and expenses.
Upon consummation of the Closing, Americold will be in compliance
with Section 9.1 of the Amended and Restated Indenture dated as of
March 9, 1993, and Section 9.01 of the Indenture dated as of April
9, 1996, each of which Indentures is referred to in the list of
Americold Indebtedness set forth on Schedule 1.6 hereto of the
Americold Indebtedness.
ARTICLE VI
COVENANTS
6.1 Conduct of Business. During the period from the
date hereof to the Closing Date, Americold covenants and agrees
that it will and will cause the Americold Subsidiaries to carry on
their businesses in the ordinary course of business, in
substantially the same manner as heretofore conducted, and will use
its reasonable commercial efforts to preserve intact its and the
Americold Subsidiaries' present business organization, keep
available the services of their respective officers and Employees
and preserve their relationships with customers and suppliers and
others having business dealings with them, to the end that their
goodwill and going business shall be maintained following the
Closing. Without limiting the generality of the foregoing, except
as expressly permitted by this Agreement or with the prior written
consent of the Parent, such consent not to be unreasonably withheld
or delayed, or as set forth on Schedule 6.1 hereto, Americold
covenants and agrees that it will not, and it will not permit any
Americold Subsidiary to do, or agree to do, on or after the date
hereof, any of the following, on or before the Closing:
(a) amend their respective certificates of
incorporation or by-laws or other organizational documents;
(b) rescind, modify, amend or otherwise change or
affect any of the resolutions of the Board recommending adoption of
this Agreement and authorization of the Merger;
(c) issue, sell, transfer, assign, pledge, convey or
dispose of any security or equity interest or any security
convertible into or exchangeable or exercisable for any security or
equity interest, including, without limitation, any subscriptions,
options, warrants, calls, conversions or other rights, agreements,
commitments, arrangements or understandings of any kind obligating
Americold or any Americold Subsidiary, contingently or otherwise,
to issue or sell, or cause to be issued or sold, any security or
equity interest of Americold or any Americold Subsidiary or any
security convertible into or exchangeable or exercisable for any
security or equity interest;
(d) split, combine or reclassify any shares of any
class of its capital stock, declare, set aside or pay any dividend
or other distribution (whether in cash, stock or property or any
combination thereof) in respect of any class of its capital stock,
or redeem or otherwise acquire any shares of such capital stock,
except as required under the agreements listed on Schedule 6.1(d)
hereto;
(e) write off any receivables, except in the ordinary
course of business consistent with past practice;
(f) sell, assign, lease or otherwise transfer or
dispose of any material assets except in the ordinary course of
business consistent with past practice in an aggregate amount in
excess of $350,000 unless the same shall be replaced with assets of
equal or greater value and utility;
(g) (i) except as set forth on Schedule 6.1(g) hereto
and except in the ordinary course of business consistent with past
practice under existing lines of credit, create, incur or assume
any liability, including obligations in respect of capital leases,
or make or commit to make capital expenditures in excess of
$250,000 each or $500,000 in the aggregate or create, incur,
assume, maintain or permit to exist any indebtedness in an
aggregate amount greater than $250,000 for Americold and the
Americold Subsidiaries combined; (ii) assume, guarantee, endorse or
otherwise become liable or responsible (whether directly,
contingently or otherwise) for the obligations of any other Person,
except for assumptions, guarantees or endorsements by Americold of
the obligations of any Americold Subsidiary in the ordinary course
of business consistent with past practice; (iii) make any loans,
advances or capital contributions to, or investments in, any other
Person (other than customary loans or advances in the ordinary
course of business consistent with past practice to Employees not
to exceed $100,000 in the aggregate and extensions of credit made
to customers on a trade receivable basis in the ordinary course of
business consistent with past practice); or (iv) create, assume or
permit to exist any Lien upon their assets, except for those in
existence on the date of this Agreement and except for those
additional Liens created in the ordinary course of business
consistent with past practice;
(h) except as set forth on Schedule 6.1(h) hereto (i)
increase or modify or agree to increase or modify the compensation,
bonuses or other benefits or perquisites of any Employee of
Americold or any Americold Subsidiary, except for salary increases
granted in the ordinary course of business consistent with past
practice, or (ii) pay or commit to pay any compensation, bonus,
pension or other retirement benefit or allowance, fringe benefit or
other benefit not required by the terms of an existing Plan, or
collective bargaining agreement as in effect on the date hereof or
otherwise in the ordinary course of business consistent with past
practice;
(i) make any new elections, or make any changes to
current elections, with respect to Taxes;
(j) change their auditors, fail to maintain their books
and records in accordance with GAAP or materially change their
auditing or bookkeeping practices;
(k) take or fail to take any action that would cause
any of its representations and warranties not to be true and
correct on the Closing Date in the manner required by Section
7.3(b) hereof;
(l) cancel or materially amend or modify any real or
material personal property leases;
(m) other than in the ordinary course of business,
cancel or materially amend or modify any agreements with customers;
or
(n) enter into any new agreements with any customers
with a duration of more than one year.
6.2 Third-Party Consents. Americold covenants and
agrees that it will and will cause each Americold Subsidiary to use
reasonable commercial efforts to obtain, prior to the Closing, the
consents of third parties and Governmental Authorities set forth on
Schedule 4.4 hereto.
6.3 Compliance with OBCA; Filings; Information
Statement. (a) As soon as practicable and in any event within ten
(10) days after the date of this Agreement, Americold will prepare
and deliver to each shareholder of Americold a notice (the
"Notice"), in accordance with O.R.S. 60.214, 60.487 and 60.561,
regarding (i) the execution of this Agreement, (ii) the Board's
authorization of the execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby and (iii)
the availability of appraisal rights under O.R.S. 60.551-60.594. As
promptly as practicable, Americold will prepare, and will provide
to Vornado for its review and comment, an information statement
(together with the Notice, the "Information Statement"). As
promptly as practicable thereafter, Americold will deliver to each
holder of Americold Common Stock a copy of the Information
Statement, provided that Americold will not circulate the
Information Statement without Vornado's prior written consent.
Americold agrees that none of the information included or
incorporated by reference in the Information Statement will be
false or misleading with respect to any material fact or will omit
to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading; provided,
that the foregoing shall not apply to information supplied by or on
behalf of the Parent or Acquisition Co. specifically for inclusion
or incorporation by reference in the Information Statement. The
Parent agrees that none of the information supplied by or on behalf
of the Parent or Acquisition Co. specifically for inclusion or
incorporation by reference in the Information Statement will be
false or misleading with respect to any material fact or will omit
to state any material fact required to be stated therein or
necessary in order to make the statements in such Information
Statement, in light of the circumstances under which they are made,
not misleading.
(b) As promptly as practicable, each of Americold, the
Parent and Acquisition Co. shall properly prepare and file any
filings required under any Federal, state, county, local or
municipal law relating to the Merger and the transactions
contemplated herein (such filings, together with the filings
required under the HSRA, are, collectively, the "Filings"). The
Parent and Acquisition Co., on the one hand, and Americold, on the
other, shall promptly notify the other of the receipt of any
comments on, or any request for amendments or supplements to, the
Filings by any governmental official, and each of Americold, the
Parent and Acquisition Co. will supply the other with copies of all
correspondence between it and each of its subsidiaries and
representatives, on the one hand, and any appropriate governmental
official, on the other hand, with respect to the Filings.
6.4 Additional Agreements. Subject to the terms and
conditions herein provided, each of the parties hereto agrees to
use (and Americold shall cause the Americold Subsidiaries to use)
their commercially reasonable efforts to take, or cause to be
taken, all actions and to do, or cause to be done, all things
necessary, proper or advisable to consummate and make effective as
promptly as practicable the transactions contemplated by this
Agreement and to cooperate with one another in connection with the
foregoing, including using its commercially reasonable efforts to
obtain all necessary consents, approvals and authorizations as are
required to be obtained under Applicable Law, to defend all
lawsuits or other legal proceedings challenging this Agreement or
the consummation of the transactions contemplated hereby, to cause
to be lifted or rescinded any injunction or restraining order or
other order adversely affecting the ability of the parties to
consummate the transactions contemplated hereby, and to effect all
necessary registrations and Filings.
6.5 Acquisition Proposals. None of Americold or any of
Americold's employees, representatives or agents (collectively, the
"Americold Representatives") shall, directly or indirectly, solicit
or initiate inquiries or proposals from or enter into any agreement
with respect to, or provide any confidential information to or
participate in any discussions or negotiations with, any Persons or
group (other than the Parent, Acquisition Co. and their respective
subsidiaries and their respective directors, officers, employees,
representatives and agents) concerning any sale of assets or shares
of Americold Common Stock, any assets or shares of capital stock of
any Americold Subsidiary or any merger, consolidation or similar
transaction involving Americold or any Americold Subsidiary
(except, in all cases, for any sale of immaterial assets in the
ordinary course of business consistent with past practices).
Americold will promptly cease and Americold will cause to be
terminated by the Americold Subsidiaries any existing discussions
or negotiations with any third parties conducted heretofore with
respect to any of the foregoing and will use its reasonable
commercial efforts to retrieve and/or caused to be destroyed any
and all nonpublic information concerning Americold or any Americold
Subsidiary that has been furnished to third parties in connection
therewith. Americold will not, and will cause its controlled
Affiliates not to, and will use its best efforts to cause its
noncontrolled affiliates not to, directly or indirectly, make, or
in any way participate, directly or indirectly, in any solicitation
of proxies, or become a participant in a solicitation to vote, or
seek to advise or influence any person to abstain from voting or to
vote against the Merger, this Agreement or any of the transactions
contemplated herein, or enter into any negotiations, discussions or
arrangements, or otherwise facilitate, assist or encourage the
efforts of any third party with respect to the foregoing.
6.6 Public Announcements. The Parent and Americold will
consult with one another before issuing any press release or
otherwise making any public statement with respect to this
Agreement or the Merger and shall not issue any such press release
or make any such public statement prior to such consultation
without the consent of the Parent and Americold, except based on
the advice of counsel for Americold or the Parent, as the case may
be, as required by Applicable Law.
6.7 Consent of the Parent. The Parent, as the sole
shareholder of Acquisition Co., by executing this Agreement hereby
consents to the execution, delivery and performance of this
Agreement by Acquisition Co. and such consent shall be treated for
all purposes as a vote duly adopted at a meeting of the
shareholders of Acquisition Co. held for such purpose.
6.8 Transfer Taxes. The Parent shall be responsible for
the payment of all Transfer Taxes arising out of or in connection
with or attributable to the transactions effected pursuant to this
Agreement.
6.9 Officers' and Directors' Insurance; Indemnification
of Officers and Directors. The Parent agrees that for the entire
period from the Effective Time until at least six (6) years after
the Effective Time (a) the Articles of Incorporation and the
By-Laws of the Surviving Corporation shall contain the provisions
with respect to indemnification and exculpation from liability set
forth in Americold's Articles of Incorporation and By-Laws as of
the date of this Agreement, which provisions shall not be amended,
repealed or otherwise modified during such period in any manner
that would adversely affect the rights thereunder of individuals
who on or prior to the Effective Time were directors, officers,
employees or agents of Americold unless such modification is
required by Applicable Law and (b) the Surviving Corporation shall
either (x) maintain in effect Americold's current directors' and
officers' liability insurance covering those persons who are
currently covered on the date of this Agreement by Americold's
directors' and officers' liability insurance policy or (y) purchase
a "tail" insurance policy having a policy limit equal to or greater
than the aggregate policy limit of such insurance and covering such
persons against claims made within six (6) years following the
Effective Time; provided, however, that this Section (b) shall not
require Vornado or the Parent to pay annual insurance premiums in
excess of 125% of the current annual premium for Americold's
existing directors' and officers' liability insurance.
6.10 Americold Indebtedness. The Parent and Acquisition
Co. shall furnish such information and certificates as Americold
shall reasonably request in order for Americold and its counsel to
be able to deliver the certificates, opinions and other instruments
required under the change of control provisions of the Americold
Indebtedness.
6.11 Access. Upon reasonable notice, and except as may
otherwise be required by Applicable Law, Americold shall (and shall
cause the Americold Subsidiaries to) afford the Parent's officers,
agents and advisors reasonable access, during normal business hours
throughout the period prior to the Effective Time, to its
properties, books, contracts and records and, during such period,
Americold shall (and shall cause the Americold Subsidiaries to)
furnish to the Parent and its agents and advisors all information
concerning its business, properties and personnel as they may
reasonably request, provided that no investigation pursuant to this
Section shall affect or be deemed to modify any representation or
warranty made by Americold. All such information shall be governed
by the terms of the Confidentiality Agreement referred to in
Section 11.4.
6.12 Management Arrangements. Americold shall enter
into bonus arrangements with Americold management involving
payments in the aggregate of not less than $610,000, and the
parties shall negotiate in good faith the identities of the
management recipients of such bonus arrangements, the respective
amounts to be received by each and the respective terms thereof.
ARTICLE VII
CLOSING CONDITIONS
7.1 Conditions Precedent to the Obligations of All
Parties. The respective obligations of each party to effect the
Merger shall be subject to the fulfillment at or prior to the
Effective Time of each of the following conditions:
(a) Any waiting period (and any extension thereof)
applicable to the consummation of the Merger under the HSRA shall
have expired or been terminated.
(b) No preliminary or permanent injunction or other
order, decree or ruling issued by a court of competent jurisdiction
or by a governmental, regulatory or administrative agency or
commission nor any statute, rule, regulation or executive order
promulgated or enacted by any Governmental Authority shall be in
effect which would be reasonably likely to (i) make the
consummation of the Merger by Vornado, the Parent, Acquisition Co.
or Americold illegal or (ii) otherwise prevent the consummation of
the Merger.
7.2 Additional Conditions to the Obligation of
Americold. The obligation of Americold to effect the Merger is also
subject to the fulfillment at or prior to the Effective Time of the
following additional conditions:
(a) Vornado, the Parent and Acquisition Co. shall each
have performed in all material respects each of its respective
obligations under this Agreement required to be performed by it on
or prior to the Effective Time pursuant to the terms hereof.
(b) The representations and warranties of Vornado, the
Parent and Acquisition Co. contained in this Agreement shall be
true and correct in all material respects, in each case when made
and, unless such representation or warranty is made as of a
specific date (in which case it shall be true and correct in all
material respects as of such date), at and as of the Effective Time
as if made at and as of such time.
(c) Americold shall have received a certificate, dated
the Closing Date, of the President or any Vice President of
Vornado, to the effect that the conditions specified in paragraphs
(a) and (b) of this Section 7.2 have been fulfilled.
(d) Americold shall have received the opinion of
Sullivan & Cromwell, special counsel to Vornado, the Parent and
Acquisition Co., in form and substance reasonably satisfactory to
Americold, as to the due authorization, execution and delivery of
this Agreement by such parties.
(e) Each of the Parent and Acquisition Co. shall have
reaffirmed all of Americold's obligations under each of the
Employment Agreements listed on Schedule 4.14 hereto.
(f) Americold shall have paid, or caused to be paid, a
fee of $2,000,000 to Kelso (the "Kelso Fee") in respect of Kelso's
services in connection with the consummation of the transactions
provided for hereby.
7.3 Conditions Precedent to Obligations of Vornado, the
Parent and Acquisition Co. The obligations of Vornado, the Parent
and Acquisition Co. to effect the Merger are also subject to the
fulfillment at or prior to the Effective Time of the following
additional conditions:
(a) Americold shall have performed in all material
respects each of its obligations under this Agreement required to
be performed by it on or prior to the Effective Time pursuant to
the terms hereof.
(b) The representations and warranties of Americold set
forth in this Agreement that are qualified by reference to a
Material Adverse Effect shall be true and correct, and all other
representations and warranties of Americold shall be true and
correct, except for failures to be true and correct as would not,
individually or in the aggregate, have a Material Adverse Effect,
as of the date of this Agreement and as of the Effective Time as
though made as of the Effective Time (except to the extent any such
representation or warranty expressly speaks as of an earlier date,
in which case it shall have been true and correct in all material
respects as of such date).
(c) Vornado shall have received a certificate, dated
the Closing Date, of the Chief Executive Officer of Americold, to
the effect that the conditions specified in paragraphs (a) and (b)
of this Section 7.3 have been fulfilled.
(d) Vornado, the Parent and Acquisition Co. shall each
have received the opinion of (i) Debevoise & Plimpton, special
counsel to Americold, in form and substance reasonably satisfactory
to Vornado, as to the absence of any agreements among the
shareholders of Americold or with any potential purchaser of
Americold that conflict with the execution, delivery and
performance of this Agreement and (ii) Tonkon, Torp, Galen,
Marmaduke & Booth, special counsel to Americold, in form and
substance reasonably satisfactory to Vornado, as to the due
authorization, execution and delivery of this Agreement and to the
effect that the Merger has been duly authorized under Oregon law.
(e) One or more Americold Principal Shareholders shall
not have revoked or attempted to revoke any of the proxies referred
to in Section 4.2(c) with respect to a majority or more of the
outstanding shares of Americold Common Stock.
(f) Americold shall have furnished to Vornado evidence
reasonably satisfactory to Vornado that immediately prior to the
Closing, Americold's principal amount of long-term indebtedness
does not exceed $471,200,000.
ARTICLE VIII
CLOSING
8.1 Time and Place. Subject to the satisfaction or
waiver of all applicable conditions in Article VII, the Closing
shall take place at the offices of Debevoise & Plimpton, 875 Third
Avenue, New York, N.Y. 10022, at 10:00 a.m., local time, on the
third business day following the satisfaction of the condition set
forth in Section 7.1(a), or on such other date as Americold and the
Parent may agree.
8.2 Filings at the Closing; Other Actions. At the
Closing, the Parent and Americold shall cause the Merger Filings to
be filed and recorded in accordance with the applicable provisions
of the OBCA and the DGCL, and shall take any and all other lawful
actions and do any and all other lawful things necessary to cause
the Merger to become effective.
ARTICLE IX
NON-SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS
All of the representations and warranties contained in
this Agreement or any representations and warranties contained in
any certificate, document or instrument delivered pursuant to this
Agreement shall terminate as of the Closing. The covenants set
forth in Sections 3.3, 3.5, 6.6, 6.8 and 6.9 herein shall survive
the Closing.
ARTICLE X
TERMINATION RIGHTS
10.1 Termination. This Agreement may be terminated at
any time prior to the Effective Time:
(a) by mutual consent of the Parent and Americold;
(b) by either the Parent or Americold if the Merger
shall not have been consummated on or before January 15, 1998;
provided, however, that the right to terminate this Agreement shall
not be available to any party whose failure to fulfill any
obligation of this Agreement has been the cause of, or resulted in,
the failure of the Merger to have occurred on or before the
aforesaid date;
(c) by the Parent, if Americold shall have materially
breached any of its covenants herein or if Americold shall have
made a material misrepresentation and not cured the same within 15
days of notice of such breach or misrepresentation;
(d) by Americold, if either the Parent or Acquisition
Co. shall have materially breached any of its covenants herein or
if either the Parent or Acquisition Co. shall have made a material
misrepresentation herein and not cured the same within 15 days of
notice of such breach or misrepresentation; or
(e) by either the Parent or Americold, if any court of
competent jurisdiction or other governmental agency of competent
jurisdiction shall have issued an order, decree or ruling or taken
any other action restraining, enjoining or otherwise prohibiting
the Merger, and such order, decree, ruling or other action shall
have become final and non-appealable.
10.2 Procedure and Effect of Termination. In the event
of termination and abandonment of the Merger by the Parent or
Americold pursuant to Section 10.1 hereof, notice thereof shall
forthwith be given to Americold or the Parent, respectively, and
this Agreement shall terminate and the Merger shall be abandoned,
without further action by any of the parties hereto. Each of the
Parent and Acquisition Co. agrees that any termination by Vornado
shall be conclusively binding upon it, whether given expressly on
its behalf or not. If this Agreement is terminated as provided
herein, no party hereto shall have any liability or further
obligation to any other party to this Agreement except that any
termination shall be without prejudice to the rights of any party
hereto arising out of a breach by any other party of any covenant
or agreement contained in this Agreement, and except that the
provisions of Sections 6.6, 11.4, 11.5 and 11.7 hereof shall
survive such termination.
ARTICLE XI
OTHER PROVISIONS
11.1 Amendment and Modification. Subject to Applicable
Law, this Agreement may be amended, modified or supplemented only
by mutual written agreement of the parties hereto.
11.2 Benefit and Assignment. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto
and their respective heirs, successors and assigns, but neither
this Agreement nor any of the rights, interests or obligations
hereunder shall be assigned by any party to this Agreement without
the prior written consent of the other parties hereto. Any
purported assignment made in contravention of the previous sentence
shall be null and void.
11.3 No Third-Party Beneficiaries. Nothing in this
Agreement shall confer any rights upon any Person other than the
parties hereto and their respective heirs, successors and permitted
assigns, except for the provisions of Section 6.10 hereof.
11.4 Entire Agreement. This Agreement and the
Confidentiality Agreement, dated as of July 29, 1997, between
Americold and Vornado and the exhibits and schedules hereto and
thereto embody the entire agreement and understanding of the
parties hereto and supersede any and all prior agreements,
arrangements and understandings relating to the matters provided
for herein and herein. Acquisition Co. hereby agrees that any
consent or waiver of compliance given by the Parent hereunder shall
be conclusively binding upon it, whether given expressly on its
behalf or not. No party is making any representation or warranty
whatsoever, express or implied, except the representations and
warranties contained in this Agreement and each party acknowledges
and agrees that it has not relied on or been induced to enter into
this Agreement by any representation or warranty other than those
expressly set forth herein.
11.5 Expenses. Except as otherwise provided in this
Agreement, each of Vornado, the Parent and Acquisition Co., on the
one hand, and Americold, on the other hand, shall be responsible
for the payment of their respective expenses, including legal and
accounting fees, in connection with the preparation, negotiation
and closing of this Agreement and the transactions contemplated
hereby.
11.6 Headings. The headings set forth in this Agreement
are for convenience only and will not control or affect the meaning
or construction of the provisions of this Agreement.
11.7 Choice of Law. The construction and performance of
this Agreement shall be governed by the laws of the State of New
York without regard to its principles of conflict of laws, except
insofar as the laws of the state of Oregon are mandatorily
applicable to the Merger, and the state and federal courts of New
York shall have exclusive jurisdiction over any controversy or
claim arising out of or relating to this Agreement.
11.8 Notices. All notices, requests, demands, letters,
waivers and other communications required or permitted to be given
under this Agreement shall be in writing and shall be deemed to
have been duly given if (a) delivered personally, (b) mailed,
certified or registered mail with postage prepaid, (c) sent by
next-day or overnight mail or delivery or (d) sent by fax, as
follows:
(a) If to Vornado, the Parent or Acquisition Co., to it
at:
Vornado Realty Trust
Park 80 West, Plaza II
Saddle Brook, NJ 07663
Attention: Mr. Michael D. Fascitelli
Telecopy #: (201) 291-1093
Sullivan & Cromwell
1701 Pennsylvania Avenue, N.W.
Washington, D.C. 20006
Attention: Janet T. Geldzahler
Telecopy #: (202) 293-6330
(b) If to Americold, to it at:
Americold Corporation
7007 S.W. Cardinal Lane
Suite 135
Portland, OR 97224
Telecopy #: (503) 598-8693
Attention: Ronald H. Dykehouse
Chief Executive Officer
with copies to:
Kelso & Company
320 Park Avenue
24th Floor
New York, NY 10022
Telecopy #: (212) 223-2379
Attention: James J. Connors, II, Esq.
and:
Tonkon, Torp, Galen, Marmaduke & Booth
1600 Pioneer Tower
888 S.W. Fifth Avenue
Portland, OR 97204
Telecopy #: (503) 274-8779
Attention: Brian G. Booth, Esq.
or to such other Person or address as any party shall specify by
notice in writing to the party entitled to notice. All such
notices, requests, demands, letters, waivers and other
communications shall be deemed to have been received (w) if by
personal delivery on the day after such delivery, (x) if by
certified or registered mail, on the fifth Business Day after the
mailing thereof, (y) if by next-day or overnight mail or delivery,
on the day delivered or (z) if by fax, on the next day following
the day on which such fax was sent, provided that a copy is also
sent by certified or registered mail.
11.9 Counterparts. This Agreement may be executed in
one or more counterparts, each of which will be deemed an original
and all of which together will constitute one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed as of the date first written
above.
VORNADO REALTY TRUST
By: /s/ Michael D. Fascitelli
___________________________
Name:
Title:
PORTLAND PARENT, INC.
By: /s/ Michael D. Fascitelli
__________________________
Name:
Title:
PORTLAND STORAGE ACQUISITION CO.
By: /s/ Michael D. Fascitelli
__________________________
Name:
Title:
AMERICOLD CORPORATION
By:/s/ Ronald H. Dykehouse
__________________________
Name: Ronald H. Dykehouse
Title: Chairman, CEO and President
<PAGE>
Exhibit A
Americold Principal Shareholders
<TABLE>
<CAPTION>
Name Number of Shares
---- ----------------
<S> <C>
KIA III-Americold, Inc. L.P. 2,000,000
Kelso Investment Associates II, L.P. 500,000
Kelso Equity Partners, L.P. 70,000
</TABLE>
<PAGE>
Exhibit (9.1)
AMERICOLD CORPORATION
IRREVOCABLE PROXY
THE UNDERSIGNED, a shareholder of Americold Corporation (the
"Company"), hereby constitutes and appoints Vornado Realty Trust
("Vornado"), Portland Parent, Inc. ("Parent") and Portland
Storage Acquisition Co. ("Acquisition Co." and, collectively with
Vornado and Parent, the "Proxies"), and each of them, as proxies
of the undersigned, with full power of substitution, to vote all
of the shares of the common stock, par value $.01, of the
Company, owned by the undersigned (the "Shares") (including the
power to execute and deliver written consents with respect to the
Shares), in favor of the approval of the Agreement and Plan of
Merger, dated as of September 26, 1997, among Vornado, Parent,
Acquisition Co. and the Company (the "Merger Agreement"), and
against any action or agreement that, directly or indirectly, is
inconsistent with or is reasonably likely to impede, interfere
with, delay or postpone the transactions contemplated by the
Merger Agreement, in the sole discretion of such Proxies, at any
and all meetings of shareholders of the Company called for such
purpose and at any adjournments and postponements thereof. The
Proxies may not exercise this proxy in respect of any other
matter.
The undersigned acknowledges and agrees that it is the legal
and beneficial owner of the number of Shares set forth below the
undersigned's signature and that this proxy shall be binding upon
all successors, transferees and assignees (by operation of law or
otherwise) of the undersigned.
The proxy granted hereunder is coupled with an interest and
is granted in consideration of the Proxies entering into the
Merger Agreement. Upon execution hereof, all prior proxies given
by the undersigned with respect to the Shares and any and all
other shares and/or securities issued or issuable in respect
thereof on or after the date hereof are as to the matters covered
hereby are hereby revoked and no subsequent proxies shall be
given with respect to matters covered hereby.
The undersigned acknowledges, intends and instructs that the
proxy granted hereunder shall expire on January 15, 1998, and
shall be, until such date, irrevocable.
IN WITNESS WHEREOF, the undersigned has executed this
Irrevocable Proxy as of the 26th day of September, 1997.
KIA III-AMERICOLD, INC., L.P.
By: KELSO PARTNERS III, L.P.,
General Partner
By: /s/ George E. Matelich
General Partner
2,000,000
Number of Shares
<PAGE>
EXHIBIT 9.2
AMERICOLD CORPORATION
IRREVOCABLE PROXY
THE UNDERSIGNED, a shareholder of Americold Corporation (the
"Company"), hereby constitutes and appoints Vornado Realty Trust
("Vornado"), Portland Parent, Inc. ("Parent") and Portland
Storage Acquisition Co. ("Acquisition Co." and, collectively with
Vornado and Parent, the "Proxies"), and each of them, as proxies
of the undersigned, with full power of substitution, to vote all
of the shares of the common stock, par value $.01, of the
Company, owned by the undersigned (the "Shares") (including the
power to execute and deliver written consents with respect to the
Shares), in favor of the approval of the Agreement and Plan of
Merger, dated as of September 26, 1997, among Vornado, Parent,
Acquisition Co. and the Company (the "Merger Agreement"), and
against any action or agreement that, directly or indirectly, is
inconsistent with or is reasonably likely to impede, interfere
with, delay or postpone the transactions contemplated by the
Merger Agreement, in the sole discretion of such Proxies, at any
and all meetings of shareholders of the Company called for such
purpose and at any adjournments and postponements thereof. The
Proxies may not exercise this proxy in respect of any other
matter.
The undersigned acknowledges and agrees that it is the legal
and beneficial owner of the number of Shares set forth below the
undersigned's signature and that this proxy shall be binding upon
all successors, transferees and assignees (by operation of law or
otherwise) of the undersigned.
The proxy granted hereunder is coupled with an interest and
is granted in consideration of the Proxies entering into the
Merger Agreement. Upon execution hereof, all prior proxies given
by the undersigned with respect to the Shares and any and all
other shares and/or securities issued or issuable in respect
thereof on or after the date hereof are as to the matters covered
hereby are hereby revoked and no subsequent proxies shall be
given with respect to matters covered hereby.
The undersigned acknowledges, intends and instructs that the
proxy granted hereunder shall expire on January 15, 1998, and
shall be, until such date, irrevocable.
IN WITNESS WHEREOF, the undersigned has executed this
Irrevocable Proxy as of the 26th day of September, 1997.
KELSO INVESTMENT
ASSOCIATES II, L.P.
By: KELSO PARTNERS II, L.P.,
General Partner
By: /s/ George E. Matelich
General Partner
500,000
Number of Shares
<PAGE>
Exhibit (9.3)
AMERICOLD CORPORATION
IRREVOCABLE PROXY
THE UNDERSIGNED, a shareholder of Americold Corporation (the
"Company"), hereby constitutes and appoints Vornado Realty Trust
("Vornado"), Portland Parent, Inc. ("Parent") and Portland
Storage Acquisition Co. ("Acquisition Co." and, collectively with
Vornado and Parent, the "Proxies"), and each of them, as proxies
of the undersigned, with full power of substitution, to vote all
of the shares of the common stock, par value $.01, of the
Company, owned by the undersigned (the "Shares") (including the
power to execute and deliver written consents with respect to the
Shares), in favor of the approval of the Agreement and Plan of
Merger, dated as of September 26, 1997, among Vornado, Parent,
Acquisition Co. and the Company (the "Merger Agreement"), and
against any action or agreement that, directly or indirectly, is
inconsistent with or is reasonably likely to impede, interfere
with, delay or postpone the transactions contemplated by the
Merger Agreement, in the sole discretion of such Proxies, at any
and all meetings of shareholders of the Company called for such
purpose and at any adjournments and postponements thereof. The
Proxies may not exercise this proxy in respect of any other
matter.
The undersigned acknowledges and agrees that it is the legal
and beneficial owner of the number of Shares set forth below the
undersigned's signature and that this proxy shall be binding upon
all successors, transferees and assignees (by operation of law or
otherwise) of the undersigned.
The proxy granted hereunder is coupled with an interest and
is granted in consideration of the Proxies entering into the
Merger Agreement. Upon execution hereof, all prior proxies given
by the undersigned with respect to the Shares and any and all
other shares and/or securities issued or issuable in respect
thereof on or after the date hereof are as to the matters covered
hereby are hereby revoked and no subsequent proxies shall be
given with respect to matters covered hereby.
The undersigned acknowledges, intends and instructs that the
proxy granted hereunder shall expire on January 15, 1998, and
shall be, until such date, irrevocable.
IN WITNESS WHEREOF, the undersigned has executed this
Irrevocable Proxy as of the 26th day of September, 1997.
KELSO EQUITY PARTNERS, L.P.
By: /s/ George E. Matelich
General Partner
70,000
Number of Shares
<PAGE>
Exhibit (11)
AMERICOLD CORPORATION
STATEMENT RE COMPUTATION OF
PER SHARE EARNINGS
(In thousands, except per share data)
<TABLE>
<CAPTION>
Three months Three months Six months Six months
ended ended ended ended
last day of last day of last day of last day of
August 1996 August 1997 August 1996 August 1997
------------- ------------- ------------- -------------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
<C> <C> <C> <C>
Net loss $ (2,673) $ (1,157) $ (5,009) $ (2,789)
Less: total accrued preferred dividend
(52.936 shares x 13.50% x 3/12 yr) (179) - - -
(52.936 shares x 13.00% x 2/12 yr) - (115) - -
(46.797 shares x 13.00% x 1/12 yr) - (51) - -
(52.936 shares x 13.50% x 6/12 yr) - - (357) -
(52.936 shares x 13.00% x 5/12 yr) - - - (287)
(46.797 shares x 13.00% x 1/12 yr) - - - (51)
------- ------- ------- -------
Net loss for per share calculation $ (2,852) $ (1,323) $ (5,366) $ (3,127)
======= ======= ======= =======
Weighted average number of shares
outstanding 4,931 5,012 4,931 5,004
======= ======= ======= =======
Net income (loss) per share $ (0.58) $ (0.26) $ (1.09) $ (0.62)
======= ======= ======= =======
</TABLE>
<TABLE> <S> <C>
<PAGE>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM AMERICOLD CORPORATION'S FINANCIAL STATEMENTS CONTAINED IN
ITS QUARTERLY REPORT ON FORM 10-Q FOR THE PERIOD ENDING AUGUST
31, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS
</LEGEND>
<MULTIPLIER> 1,000
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> FEB-28-1997
<PERIOD-END> AUG-31-1997
<CASH> 16,315
<SECURITIES> 0
<RECEIVABLES> 28,677
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 54,989
<PP&E> 577,886
<DEPRECIATION> 202,385
<TOTAL-ASSETS> 523,411
<CURRENT-LIABILITIES> 61,526
<BONDS> 464,581
<COMMON> 50
5,477
0
<OTHER-SE> (116,198)
<TOTAL-LIABILITY-AND-EQUITY> 523,411
<SALES> 145,807
<TOTAL-REVENUES> 145,807
<CGS> 106,085
<TOTAL-COSTS> 122,557
<OTHER-EXPENSES> (785)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 27,816
<INCOME-PRETAX> (3,781)
<INCOME-TAX> (992)
<INCOME-CONTINUING> (2,789)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,789)
<EPS-PRIMARY> (0.62)
<EPS-DILUTED> (0.62)
</TABLE>
