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 November 30, 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 December 31, 1997: 1,000 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
Financial Condition and Results of
Operations 10
PART II OTHER INFORMATION
Item 1. Legal Proceedings 16
Item 4. Submission of Matters to a Vote of
Security Holders 16
Item 6. Exhibits and Reports on Form 8-K 17
SIGNATURES 18
EXHIBIT INDEX 19
<PAGE>
PART I - Financial Information
Item 1. Financial Statements
AMERICOLD CORPORATION
CONSOLIDATED BALANCE SHEETS
Last day of February 1997 and November 1997
(In thousands, except per share data)
<TABLE>
<CAPTION>
Last day of Last day of
February 1997 November 1997
------------- -------------
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 13,702 $ 2,152
Trade receivables, net 27,560 35,659
Other receivables, net 3,138 3,550
Prepaid expenses 3,828 2,853
Tax refund receivable 2,636 3,124
Other current assets 891 710
----------- ----------
Total current assets 51,755 48,048
Property, plant and equipment, less accumulated depreciation
of $192,649 and $207,176, respectively 384,484 372,545
Cost in excess of net assets acquired, less accumulated
amortization of $24,644 and $26,524, respectively 74,749 72,869
Other noncurrent assets 20,046 24,232
----------- ----------
Total assets $ 531,034 $ 517,694
=========== ==========
LIABILITIES, PREFERRED STOCK AND COMMON STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable $ 16,116 $ 15,440
Accrued interest 18,466 6,664
Accrued expenses 13,660 13,709
Deferred revenue 5,555 6,185
Current maturities of long-term debt 5,229 26,203
Other current liabilities 5,259 4,354
---------- ----------
Total current liabilities 64,285 72,555
Long-term debt, less current maturities 465,834 323,982
Deferred income taxes 98,524 94,264
Other noncurrent liabilities 10,347 10,187
---------- ----------
Total liabilities 638,990 500,988
---------- ----------
Preferred stock, $100 par value; authorized 1,000,000 shares;
issued and outstanding 52,936 and 0 shares, respectively 5,753 -
---------- ----------
Common stockholders' equity (deficit):
Common stock, $.01 par value; authorized
10,000,000 shares and 1,000 shares, respectively; issued and
outstanding 4,995,556 and 1,000 shares, respectively 50 -
Additional paid-in capital 51,182 189,801
Retained deficit (164,580) (172,734)
Equity adjustment to recognize minimum pension liability (361) (361)
---------- ----------
Total common stockholders' equity (deficit) (113,709) 16,706
---------- ----------
Total liabilities, preferred stock and
common stockholders' deficit $ 531,034 $ 517,694
========== ==========
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
AMERICOLD CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
Three and nine months ended last day of November
1996 and 1997 (In thousands, except share and
per share data)
<TABLE>
<CAPTION>
Three months Three months Nine months Nine months
ended ended ended ended
last day of last day of last day of last day of
November 1996 November 1997 November 1996 November 1997
------------- ------------- ------------- -------------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Net sales $ 82,244 $ 84,367 $ 234,779 $ 230,174
---------- ---------- ---------- ----------
Operating expenses:
Cost of sales 59,014 61,755 173,503 167,840
Amortization of cost in excess of
net assets acquired 627 627 1,880 1,880
Selling and administrative expenses 7,678 11,708 22,713 26,927
--------- --------- --------- ---------
Total operating expenses 67,319 74,090 198,096 196,647
--------- --------- --------- ---------
Gross operating margin 14,925 10,277 36,683 33,527
--------- --------- --------- ---------
Other (expense) income:
Interest expense (13,601) (12,588) (42,857) (40,404)
Reorganization expenses (476) - (879) -
Other, net (190) 941 278 1,726
--------- --------- --------- ---------
Total other expense (14,267) (11,647) (43,458) (38,678)
--------- --------- --------- ---------
Income (loss) before income taxes and
extraordinary item 658 (1,370) (6,775) (5,151)
(Provision) benefit for income taxes (504) 292 1,920 1,284
--------- --------- --------- ---------
Net income (loss) before extraordinary item 154 (1,078) (4,855) (3,867)
Extraordinary item, net of income tax
benefit of $2,977 - (4,612) - (4,612)
--------- --------- --------- ---------
Net income (loss) $ 154 $ (5,690) $ (4,855) $ (8,479)
========= ========= ========= =========
Income (loss) per common share:
Income (loss) before extraordinary item $ (18.35) $(1,176.00) $(5,489.80) $(4,327.64)
Extraordinary item - (4,612.00) - (4,635.17)
--------- --------- --------- ---------
Net income(loss) per common share $ (18.35) $ (5,788.00) $(5,489.80) $(8,962.81)
========= ========== ========== =========
Weighted average number of shares
outstanding 981 1,000 980 995
========= ========= ========= =========
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
AMERICOLD CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine months ended last day of November 1996 and 1997
(In thousands)
<TABLE>
<CAPTION>
Nine months Nine months
ended last ended last
day of day of
November 1996 November 1997
------------- -------------
(Unaudited) (Unaudited)
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (4,855) $ (8,479)
Adjustments to reconcile net loss to
net cash provided (used) by operating activities:
Depreciation 15,518 15,831
Amortization and other noncash expenses 4,386 3,473
Changes in assets and liabilities (9,783) (17,439)
Provision for deferred taxes (1,920) (4,260)
Write-off of unamortized issuance costs - 1,657
--------- ---------
Net cash provided (used) by operating activities 3,446 (9,217)
--------- ---------
Cash flows from investing activities:
Net expenditures for property, plant
and equipment (24,525) (8,336)
Net proceeds from sale of assets 6,517 924
Other items, net (739) (415)
--------- ---------
Net cash used by investing activities (18,747) (7,827)
--------- ---------
Cash flows from financing activities:
Principal payments under capitalized
lease and other debt obligations (1,998) (1,877)
Retirement of mortgage bonds - (140,000)
Proceeds from sale of senior subordinated notes 120,000 -
Proceeds from credit agreements - 21,000
Retirement of senior subordinated debentures (115,000) -
Proceeds from mortgage payable 15,222 -
Retirement of mortgage payable (11,376) -
Debt issuance costs (5,463) (7,071)
Release of escrowed funds 4,820 167
Issuance of stock 65 134,173
Preferred stock dividend (715) (898)
--------- ---------
Net cash provided by financing activities 5,555 5,494
--------- ---------
Net decrease in cash and cash equivalents (9,846) (11,550)
Cash and cash equivalents at beginning of period 20,857 13,702
--------- ---------
Cash and cash equivalents at end of period $ 11,011 $ 2,152
========= =========
Supplemental disclosure of cash flow information:
Cash paid year-to-date for interest,
net of amounts capitalized $ 48,367 $ 52,206
========= =========
Capital lease obligations incurred to lease new equipment $ 231 $ -
========= =========
Cash paid during the year for income taxes $ 58 $ 488
========= =========
Property sale proceeds placed in escrow $ 5,334 $ -
========= =========
Employee stock ownership plan contribution made with
common stock $ 750 $ -
========= =========
</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 November 1997; the
related consolidated statements of operations for the three and nine
months ended the last day of November 1996 and November 1997; and the
related consolidated statements of cash flows for the nine months ended
the last day of November 1996 and November 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.
On October 31, 1997, the Company was acquired by a partnership of
preferred stock affiliates of Vornado Realty Trust and Crescent Real
Estate Equities Company (the "Acquisition"). The Acquisition was
accomplished pursuant to a merger in which the Company was the
surviving corporation. The Company has elected not to apply push down
accounting under the provisions of the Securities and Exchange
Commission's Staff Accounting Bulletin No. 54.
2. PROVISION FOR INCOME TAXES
--------------------------
The provision for income taxes was computed using a tax rate of 39.2%.
The tax rate was applied to income before income taxes and
extraordinary item, after adjusting for amortization of cost in excess
of net assets acquired.
3. INCOME PER COMMON SHARE
-----------------------
Income per common share is computed by dividing net income, less
preferred dividend requirements, by the weighted average number of
common shares outstanding. See Exhibit 11, Statement Regarding
Computation of Per Share Earnings.
4. 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 $0.0 million as of the last
day of February 1997 and November 1997, respectively.
5. 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 was subject to increase from 12.875% to 13.875% if
the notes were not rated "B- or higher" by Standard & Poor's and "B3 or
higher" by Moody's Investors Service as of November 1, 1997. The notes
received the required ratings as of November 1, 1997.
On October 31, 1997, in connection with the Acquisition, the Company
redeemed all $140.0 million in principal amount of its 11.45% Series A
First Mortgage Bonds due 2002, and paid all accrued interest and
prepayment premiums.
6. 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 additional disclosures may be required upon adoption of SFAS
No. 131.
7. ACQUISITION OF COMPANY
----------------------
On October 31, 1997, the Company was acquired by a partnership of
preferred stock affiliates of Vornado Realty Trust and Crescent Real
Estate Equities Company. The Acquisition was accomplished pursuant to a
merger in which the Company was the surviving corporation.
The consideration for the Acquisition was approximately $581.0 million,
including $111.0 million in cash and assumption of $470.0 million in
indebtedness. Holders of Common Stock of Americold received $20.70 per
share and the holder of the Series A Variable Rate Cumulative Preferred
Stock of Americold received $100.00 per share, plus accrued and unpaid
dividends to the closing date.
8. EXTRAORDINARY ITEM
------------------
In conjunction with the redemption of the $140.0 million of Series A
First Mortgage Bonds due 2002 as discussed in note 5, unamortized
issuance costs of approximately $1.7 million and approximately $5.9
million of premiums paid on the redemption were written off, resulting
in an extraordinary loss, net of taxes, of approximately $4.6 million.
9. SUBSEQUENT EVENTS
-----------------
On January 5, 1998, the Company completed a debt tender offer that
effectively redeemed approximately $145.0 million out of the $176.3
million of its outstanding 11.5% Series B First Mortgage Bonds due
2005, and approximately $119.0 million out of the $120.0 million of its
outstanding 12.875% Senior Subordinated Notes due 2008. The Company
financed the redemption of the principal and applicable tender premium
with a new short-term credit line. See "Management's Discussion and
Analysis of Financial Conditions and Results of Operations - Liquidity
and Capital Resources - Capital Resources".
On January 12, 1998, the Company notified the Trustee of the First
Mortgage Bonds that the Company was making an irrevocable election to
redeem all the remaining outstanding Series B First Mortgage Bonds as
of March 1, 1998 at a price of 105.75% of principal amount plus accrued
and unpaid interest.
<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 47 refrigerated warehouses and its refrigerated transportation
management unit. The Company's fiscal year ends on the last day of
February.
ACQUISITION OF COMPANY - On October 31, 1997, the Company was acquired
by a partnership of preferred stock affiliates of Vornado Realty Trust
and Crescent Real Estate Equities Company. The Acquisition was
accomplished pursuant to a merger in which the Company was the
surviving corporation. In addition, on the same date the partnership
acquired URS Logistics, Inc., in which the former controlling
shareholder of Americold also held a controlling interest. See " --
Liquidity and Capital Resources" for more information 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 Acquisition on the
Company.
<PAGE>
COMPARISON OF THREE-MONTH PERIODS ENDED NOVEMBER 30, 1996 AND 1997
------------------------------------------------------------------
NET SALES - Net sales increased slightly by 2.6% from $82.2 million for
the third quarter of fiscal 1997 to $84.4 million for the same quarter
in fiscal 1998. Warehousing sales increased from $54.4 million to $55.8
million when comparing the two quarters. Transportation management
sales increased from $26.6 million to $27.3 million from the third
quarter of fiscal 1997 to the third quarter of fiscal 1998.
Cost of sales increased 4.0% from $59.0 million for the third quarter
of fiscal 1997 to $61.4 million for the same quarter of fiscal 1998.
The increase is primarily related to the increased warehousing costs
related to increased volumes and to operational problems at one of the
Company's warehouse facilities, and to the increased volume of
transportation services during the quarter.
COMPARISON OF NINE-MONTH PERIODS ENDED NOVEMBER 30, 1996 AND 1997
-----------------------------------------------------------------
NET SALES - Americold's net sales for the first nine months of fiscal
1997 and the first nine months of fiscal 1998 are detailed in the table
below, by activity:
NET SALES
(Dollars in Millions)
Nine Months Ended Nine Months Ended
November 30, 1996 November 30, 1997
----------------- ----------------- % Change
Amount % Amount % FY97 to FY98
------ --- ------- --- -------------
Logistics
Warehousing
Storage $ 77.6 33.1% $ 80.4 35.0% 3.6 %
Handling 59.4 25.3% 60.8 26.4% 2.3 %
Leasing 5.0 2.1% 3.5 1.5% (30.0)%
Freezing
and other 7.8 3.3% 8.8 3.8% 11.4 %
149.8 63.8% 153.5 66.7% 2.4 %
Transportation
management
services 80.7 34.4% 72.5 31.5% (10.2)%
Total logistics 230.5 98.2% 226.0 98.2% (2.0)%
Other 4.3 1.8% 4.2 1.8% (2.3)%
Total net sales $234.8 100.0% $230.2 100.0% (2.0)%
The Company's net sales decreased 2.0% from $234.8 million for the
first nine months of fiscal 1997 to $230.2 million for the first nine
months of fiscal 1998, reflecting a substantial decrease in
transportation management sales in the later period due to decreases in
volume of product shipped by the Company's existing customers.
Warehousing sales increased from $149.8 million for the first nine
months of fiscal 1997 to $153.5 million for the first nine months of
fiscal 1998, principally due to a 7.6% increase in storage volume.
Storage revenue increased as storage volume increased from 1.49 billion
pounds stored on average per month in the first nine months of fiscal
1997 to 1.60 billion pounds stored on average per month in the same
period in fiscal 1998.
The 2.3% increase in handling revenue resulted primarily from a 4.6%
increase in volume of product handled. For the first nine months of
fiscal 1997, 16.2 billion pounds of product were handled by the Company
compared with 16.9 billion pounds during the same period in fiscal
1998.
Storage levels for potatoes were higher than anticipated during the
first nine months of fiscal 1998. The Company anticipates that the
current levels of storage volume of vegetables and potatoes will fall
during the fourth quarter, but is unable to forecast to what levels.
<PAGE>
Transportation management sales decreased 10.2% from $80.7 million for
the first nine months of fiscal 1997 to $72.5 million for the first
nine months of fiscal 1998, for the reason referenced above.
Other sales (quarry sales) decreased slightly from $4.3 million for the
first nine months of fiscal 1997 to $4.2 million for the first nine
months of fiscal 1998.
COST OF SALES - Cost of sales decreased 3.3% from $173.5 million for
the first nine months of fiscal 1997 to $167.8 million for the first
nine 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. Warehousing cost of sales increased
by approximately $1.2 million, as a result of increased operating lease
payments on facilities financed through operating leases. Cost of sales
also increased due to the continuing operational difficulties at one of
the Company's warehouse facilities. Efforts continue to be made to
resolve the difficulties.
Cost of sales as a percentage of net sales decreased from 73.9% for the
first nine months of fiscal 1997 to 72.9% for the first nine months of
fiscal 1998, as transportation management sales, which has high
variable cost requirements, decreased from 34.4% of net sales in the
prior period to 31.5% in the more recent period.
SELLING AND ADMINISTRATIVE EXPENSES - Selling and administrative
expenses increased 18.6% from $22.7 million for the first nine months
of fiscal 1997 to $26.9 million for the first nine months of fiscal
1998 mainly due to the approximate $3.6 million of compensation expense
related to the buy-out of stock options and management bonuses paid
pursuant to the Acquisition and due to increased professional fees.
Selling and administrative expenses as a percentage of net sales
increased from 9.7% in the first nine months of fiscal 1997 to 11.7% in
the first nine 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.
GROSS OPERATING MARGIN - Gross operating margin decreased 8.6% from
$36.7 million for the first nine months of fiscal 1997 to $33.5 million
for the first nine months of fiscal 1998 due primarily to the increased
selling and administrative costs along with the operational problems at
one of the Company's facilities.
INTEREST EXPENSE - Interest expense decreased from $42.9 million for
the first nine months of fiscal 1997 to $40.4 million for the first
nine 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.
Also, interest expense decreased in the more recent period as a result
of the $140.0 million of 11.45% Series A First Mortgage Bonds due 2002
redeemed on October 31, 1997.
EXTRAORDINARY ITEM - In conjunction with the redemption of the $140.0
million of 11.45% First Mortgage Bonds due 2002 described above,
unamortized issuance costs of approximately $1.7 million and
approximately $5.9 million of premiums paid on the redemption were
written-off, resulting in an extraordinary loss, net of taxes, of
approximately $4.6 million.
INCOME (LOSS) - The Company's income before income taxes and
extraordinary item improved in the first nine months of fiscal 1998
compared to the first nine months of fiscal 1997, reflecting a loss of
$4.8 million in the more recent period compared to a loss of $5.2
million in the prior period. The reduced loss in the more recent period
was due to reduced interest expense of approximately $2.5 million, the
incurrence of approximately $0.9 million of reorganization expenses in
the prior period and the increase of approximately $1.4 million in the
more recent period of other income related to the sale of a parcel of
land and to the Company's share of the income earned by the Park
Rapids, Minnesota joint venture. The aggregate of these items exceeded
the gross operating margin decrease of approximately $3.2 million by
approximately $1.6 million.
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
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 decreased from $3.4 million for the
first nine months of fiscal 1997 to a negative $9.2 million for the
first nine months of fiscal 1998. The decrease is due principally to
the larger net loss and to the changes in certain working capital items
such as trade receivables, trade payables, accrued expenses and accrued
interest. 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 $54.5 million for the first nine months of fiscal 1997 and
$52.0 million for the first nine 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 nine-month period ended November 30, 1997 was a negative
$24.5 million. This position compares to negative $12.5 million at
fiscal 1997 year end. Working capital decreased in the more recent
period principally due to $20.0 million of short-term borrowing used to
redeem the first mortgage bonds, which was partially offset by the
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 November 30, 1997, the
Company had an available credit line of $27.5 million, of which $6.1
million was used for letters of credit, principally related to leasing
commitments and worker's compensation reserves. As of November 30,
1997, $1.0 million was borrowed under the credit agreement.
<PAGE>
The Company entered into a short-term credit facility dated as of
October 31, 1997 among Vornado Crescent Portland Partnership, as
Borrower; Americold Corporation, as Borrower and Guarantor; Americold
Services Corporation, as Guarantor; and Goldman Sachs Mortgage Company,
as Agent and Lender (the "New Credit Agreement"). The New Credit
Agreement matures on April 30, 1998 unless extended to October 31, 1998
pending the satisfaction of certain conditions, and provides for up to
$379.6 million of borrowings. Funds borrowed under the New Credit
Agreement are for the purpose of completing the acquisition of the
Company by Vornado/Crescent and for refinancing certain of the
Company's existing indebtedness. The Company intends to replace the New
Credit Agreement with long-term mortgage-backed debt following
completion of the Company's redemption of its Series B First Mortgage
Bonds due 2005, which is expected to occur as of March 1, 1998.
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 was subject to an
increase from 12.875% to 13.875% if the notes were not rated "B- or
higher" by Standard & Poor's and "B3 or higher" by Moody's Investors
Service as of November 1, 1997. The notes received the required ratings
as of November 1, 1997.
On October 31, 1997, in connection with the Acquisition, the Company
redeemed all $140.0 million in principal of its 11.45% Series A First
Mortgage Bonds due 2002, and paid all accrued interest and prepayment
premiums. The funds were provided to the Company by the partnership as
a capital contribution.
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 nine months of fiscal 1998 totaled $8.3 million, of which
approximately $1.6 million related to warehouse expansions, with the
remaining expenditures related to routine replacements or betterments,
revenue enhancement projects or cost reduction items.
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.
<PAGE>
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 additional disclosures may be required upon adoption of SFAS
No. 131.
SUBSEQUENT EVENTS - On January 5, 1998, the Company completed a debt
tender offer that effectively redeemed approximately $145.0 million out
of the $176.3 million of its outstanding 11.5% Series B First Mortgage
Bonds due 2005, and approximately $119.0 million out of the $120.0
million of its outstanding 12.875% Senior Subordinated Notes due 2008.
The Company financed the redemption of the principal and applicable
tender premium with its new short-term credit line. On January 12,
1998, the Company notified the Trustee of the First Mortgage Bonds that
the Company was making an irrevocable election to redeem all the
remaining outstanding Series B First Mortgage Bonds as of March 1, 1998
at a price of 105.75% of principal amount plus accrued and unpaid
interest.
<PAGE>
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. The principal amount of that judgment,
including accrued interest, has been paid. The court has since entered
an order awarding Americold more than $155,000 in attorney's fees. That
order, however, has not yet been reduced to a judgment and the
attorneys fees have not yet been paid.
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 is
scheduled occur on March 17, 1998. The Company believes the
interference claim is without merit and has filed a motion for summary
judgment which is scheduled to be heard on January 23, 1998.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
---------------------------------------------------
On October 20, 1997, the Company held a special meeting of shareholders
to consider and vote on a proposal to approve the merger of the
Company. The proposal was approved with 2,618,500 shares of common
stock of the Company, $0.01 par value per share (the "Common Stock"),
voting for approval, no shares of Common Stock voting against approval,
and no shares of Common Stock abstaining. The number of shares of
Common Stock of the Company outstanding on October 1, 1997, the record
date for the special Meeting, was 5,037,823 shares. Accordingly, the
holders of a majority of the outstanding Common Stock voted to approve
the merger.
<PAGE>
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
--------------------------------
(a) Exhibits
(10) (xxxi) Credit Agreement, dated as of October 30,
1997, among Vornado Crescent Portland Partnership, as
Borrower, Americold Corporation, as Borrower and
Guarantor, Americold Services Corporation, as
Guarantor and Goldman Sachs Mortgage Company, as
Agent and Lender ("Goldman Sachs")
(xxxii) Form of Americold Promissory Note in the amount of
$379,600,000 dated October 31, 1997
(xxxiii) Form of Americold Security Agreement dated October
31, 1997 between Americold and Goldman Sachs
(xxxiv) Form of Americold Services Corporation Security
Agreement dated October 31, 1997 between Americold
Services Corporation and Goldman Sachs
(xxxv) Form of Amended and Restated Master Mortgage, Deed to
Secure Debt and Deed of Trust with Uniform Commercial
Code Security Agreement and with Assignment of
Leases, Rents and Profits among Americold, the
trustees for certain properties and Goldman Sachs
(xxxvi) Subordination Provisions, modifying the Promissory
Note described in (10)(xxxii) and the mortgage
described in (10)(xxxv) above to the extent set forth
in Subordination Provisions
(11) Statement Regarding Computation of Per Share Earnings
(27) Financial Data Schedule
(b) Reports on Form 8-K
During the quarter, the following were filed:
1. A Current Report on Form 8-K, dated October 21, 1997
was filed on October 21, 1997 to disclose that on
October 20, 1997 the Company held a special meeting
of shareholders to vote on a proposal to approve the
Merger Agreement. The proposal was approved.
2. A Current Report on Form 8-K, dated October 31, 1997,
was filed on November 14, 1997 to disclose the
acquisition of the Company, and also to disclose that
prior to the closing of the acquisition, the Company
redeemed all of its 11.45% Series A First Mortgage
Bonds due 2002.
Subsequent to the end of the quarter, a Current Report on
Form 8-K, dated December 23, 1997, was filed on December
31, 1997 to disclose the change in Registrant's certifying
accountant, from KPMG Peat Marwick LLP to Deloitte &
Touche LLP.
<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: January 13, 1998
<PAGE>
FORM 10-Q
Exhibit Index
Exhibit Page
(a) Exhibits
(10) (xxxi) Credit Agreement, dated as of 19
October 30, 1997, among Vornado Crescent
Portland Partnership, as borrower,
Americold Corporation, as Borrower
and Guarantor, Americold Services
Corporation, as Guarantor and Goldman
Sachs Mortgage Company, as
Agent and Lender ("Goldman Sachs")
(xxxii) Form of Americold Promissory Note 80
in the amount of $379,600,000 dated
October 31, 1997
(xxxiii) Form of Americold Security Agreement 84
dated October 31, 1997 between Americold
and Goldman Sachs
(xxxiv) Form of Americold Services Corporation 103
Security Agreement dated October 31, 1997
between Americold Services Corporation and
Goldman Sachs
(xxxv) Form of Amended and Restated Master 123
Mortgage, Deed to Secure Debt and Deed
of Trust with Uniform Commercial Code
Security Agreement and with Assignment
of Leases, Rents and Profits among
Americold, the trustees for certain
properties and Goldman Sachs
(xxxvi) Subordination Provisions, modifying the 183
Promissory Note described in (10)(xxxii)
and the mortgage described in (10)(xxxv)
above to the extent set forth in
Subordination Provisions
(11) Statement Regarding Computation of Per 191
Share Earnings
(27) Financial Data Schedule 192
CREDIT AGREEMENT
Dated as of October 30, 1997
among
VORNADO CRESCENT PORTLAND PARTNERSHIP, as Borrower
AMERICOLD CORPORATION, as Borrower and Guarantor
AMERICOLD SERVICES CORPORATION, as Guarantor
and
GOLDMAN SACHS MORTGAGE COMPANY, as Agent and Lender
<PAGE>
TABLE OF CONTENTS
-----------------
Page
ARTICLE I. DEFINITIONS; PRINCIPLES OF CONSTRUCTION
Section 1.1. Definitions...................................................1
Section 1.2. Principles of Construction...................................12
ARTICLE II. GENERAL
Section 2.1. The Loans....................................................13
Section 2.2. Maturity.....................................................14
Section 2.3. Interest.....................................................14
Section 2.4. Loan Repayment...............................................14
Section 2.5. Payments and Computations....................................15
Section 2.6. Break Funding Costs..........................................16
Section 2.7. Regulatory Change, Etc.......................................16
Section 2.8. Unavailability, Etc..........................................16
Section 2.9. Mitigation; Mandatory Assignment.............................17
Section 2.10. Intentionally Deleted.......................................17
Section 2.11. Intentionally Deleted.......................................17
Section 2.12. Fees .......................................................17
ARTICLE III. CONDITIONS PRECEDENT
Section 3.1. Conditions Precedent to the Loans to be Made on the
Closing Date.................................................18
Section 3.2. Conditions Precedent to All Loans............................20
Section 3.3. Conditions Precedent to the JV Takeout Closing Date..........21
Section 3.4. Conditions Precedent to the Series B Closing Date............21
Section 3.5. Conditions Precedent to the Senior Subordinated
Closing Date.................................................22
ARTICLE IV. REPRESENTATIONS AND WARRANTIES
Section 4.1. Representations and Warranties of the Borrower...............22
Section 4.2. Survival of Representations..................................26
ARTICLE V. AFFIRMATIVE COVENANTS OF BORROWER
Section 5.1. Information Covenants........................................26
Section 5.2. Maintenance of Properties....................................28
Section 5.3. Preservation of Existence and Franchises.....................29
Section 5.4. Books, Records and Inspections...............................29
Section 5.5. Compliance with Law..........................................29
Section 5.6. Insurance....................................................29
Section 5.7. Ownership of Americold.......................................29
Section 5.8. Plan Assets, Etc.............................................29
Section 5.9. Costs of Enforcement.........................................30
Section 5.10. Estoppel Statement..........................................30
Section 5.11. Transaction Covenants.......................................30
Section 5.12. Additional Security; Mortgages..............................32
<PAGE>
ARTICLE VI. NEGATIVE COVENANTS
Section 6.1. Indebtedness.................................................32
Section 6.2. Liens .......................................................33
Section 6.3. Nature of Business...........................................33
Section 6.4. Consolidation, Merger, Sale or Purchase of Assets, Etc.......34
Section 6.5. Advances, Investments and Loans..............................34
Section 6.6. Transactions with Affiliates.................................34
Section 6.7. Operating Lease Obligations..................................34
Section 6.8. Sale and Leaseback...........................................35
Section 6.9. Governing Documents..........................................35
Section 6.10. ERISA35
Section 6.11. Distributions; Payment on Subordinated Indebtedness.........35
Section 6.12. Total Indebtedness to Total Capitalization..................36
ARTICLE VII. DEFAULTS
Section 7.1. Events of Default............................................36
Section 7.2. Remedies.....................................................38
ARTICLE VIII. AMERICOLD AND ASC GUARANTY OF JV OBLIGATIONS
Section 8.1. The Guaranty.................................................39
Section 8.2. Obligations Independent......................................39
Section 8.3. Obligations Unconditional....................................39
Section 8.4. Reinstatement................................................40
Section 8.5. Certain Additional Waivers...................................41
Section 8.6. Subordination................................................41
Section 8.7. Remedies.....................................................41
Section 8.8. Continuing Guaranty..........................................41
Section 8.9. Limitation on Effective Date of Guaranty
Under Article VIII...........................................42
ARTICLE IX. ASC GUARANTY OF AMERICOLD OBLIGATIONS
Section 9.1. The Guaranty.................................................42
Section 9.2. Obligations Independent......................................42
Section 9.3. Obligations Unconditional....................................42
Section 9.4. Reinstatement................................................43
Section 9.5. Certain Additional Waivers...................................44
Section 9.6. Subordination................................................44
Section 9.7. Remedies.....................................................44
Section 9.8. Continuing Guaranty..........................................44
ARTICLE X. MISCELLANEOUS
Section 10.1. Survival....................................................45
Section 10.2. Governing Law; Consent to Jurisdiction......................45
Section 10.3. Modification, Waiver in Writing.............................46
Section 10.4. Delay Not a Waiver..........................................46
Section 10.5. Notices.....................................................47
Section 10.6. Trial by Jury...............................................48
Section 10.7. Headings....................................................48
Section 10.8. Severability................................................48
Section 10.9. Preferences.................................................48
<PAGE>
Section 10.10. Waiver of Notice...........................................48
Section 10.11. Remedies of Borrower and ASC...............................49
Section 10.12. Expenses; Indemnity........................................49
Section 10.13. Exhibits and Schedules Incorporated........................50
Section 10.14. Offsets, Counterclaims and Defenses........................50
Section 10.15. No Joint Venture or Partnership............................50
Section 10.16. Publicity.................................................50
Section 10.17. Waiver of Marshaling of Assets.............................51
Section 10.18. Waiver of Counterclaim.....................................51
Section 10.19. Conflict; Construction of Documents........................51
Section 10.20. Brokers and Financial Advisors.............................51
Section 10.21. No Third Party Beneficiaries...............................52
Section 10.22. Prior Agreements...........................................52
Section 10.23. Counterparts...............................................52
Section 10.24. Right of Set-Off...........................................52
Section 10.25. Payment of Expenses, Etc...................................53
Section 10.26. Amendments, Waivers and Consents...........................54
Section 10.27. Benefit of Agreement.......................................54
Section 10.28. Confidentiality............................................55
Section 10.29. No Obligations of Goldman, Sachs & Co......................56
Section 10.30. Cooperation................................................56
Section 10.31. No Recourse to Members, Stockholders or Partners of
Joint Venture..............................................56
Section 10.32. Agency.....................................................57
Section 10.33. Reorganization.............................................57
SCHEDULES
Schedule 3.4 - Mortgage Closing Conditions
Schedule 4.1 - Existing Indebtedness
Schedule 6.8 Sale and Leasebacks
EXHIBITS
Exhibit A-1 - Form of Joint Venture Promissory Note
Exhibit A-2 - Form of Americold Promissory Note
Exhibit B - Form of Notice of Borrowing
Exhibit C - Form of Joint Venture Pledge and Security Agreement
Exhibit D - Intentionally Omitted
Exhibit E-1 - Form of Americold Security Agreement
Exhibit E-2 - Form of ASC Security Agreement
Exhibit F - Form of Mortgage
Exhibit G - Terms of Subordination
Exhibit H - Form of Parent Guarantee
<PAGE>
THIS CREDIT AGREEMENT, dated as of October 30, 1997, among
Vornado Crescent Portland Partnership, a general partnership (the "Joint
Venture"), and Americold Corporation, an Oregon corporation ("Americold", and
together with Joint Venture, each a "Borrower" and collectively, the
"Borrowers"), Americold Services Corporation, a Delaware corporation ("ASC"),
Goldman Sachs Mortgage Company, a New York limited partnership, as the Lender
(including any assignees pursuant to the terms of this Agreement, the "Lender")
and Goldman Sachs Mortgage Company, as Agent.
All capitalized terms used herein shall have the respective
meanings set forth in Section 1.1 hereof or elsewhere in this Credit Agreement.
W I T N E S S E T H:
WHEREAS, subject to and upon the terms and conditions herein
set forth, the Lender is willing to make available to the Borrowers the credit
facility provided for herein;
NOW, THEREFORE, IT IS AGREED:
ARTICLE I.
DEFINITIONS; PRINCIPLES OF CONSTRUCTION
Section 1.2. Definitions.
For all purposes of this Credit Agreement, except as otherwise
expressly required or unless the context clearly indicates a contrary intent:
"Acquisition" shall mean the acquisition by Borrowers of (i)
securities of a Person in substantially the same business as Borrowers as such
business is conducted on the date hereof or (ii) capital assets to be used in
such business as so conducted.
"Adjusted Consolidated Net Income" of a Person means the
consolidated net income of such Person and its consolidated subsidiaries
determined in accordance with GAAP, adjusted for depreciation and amortization
in a manner appropriate to remove their effect on the calculation of
consolidated net income.
"Adjusted LIBO Rate" means, with respect to each Interest
Period, a rate of interest per annum obtained by dividing (i) the applicable
Base LIBO Rate by (ii) a percentage equal to 100% minus the applicable Reserve
Percentage then in effect.
"Affiliate" means, with respect to any Person, any other
Person directly or indirectly controlling (including, but not limited to, all
partners, directors, officers and members of such Person), controlled by or
under direct or indirect common control with such Person. A Person shall be
deemed to control a corporation, a partnership, a trust or a limited liability
company if such Person possesses, directly or indirectly, the power (i) to vote
10% or more of the securities having ordinary voting power for the election of
directors of such corporation or to vote 10% or more of the partnership, trust
or limited liability company interests of such partnership, trust or limited
liability company, respectively, or (ii) to direct or cause direction of the
management and policies of such corporation, partnership, trust or limited
liability company, whether through the ownership of voting securities, as
managing or general partner, as managing member, by contract or otherwise.
Notwithstanding the foregoing, the Joint Venture shall be deemed to be an
Affiliate of Americold.
<PAGE>
"Agent" means Goldman Sachs Mortgage Company, in its capacity
as agent, and any successor agent appointed hereunder.
"Agreement" means this Credit Agreement, as amended,
supplemented or modified from time to time.
"Americold Commitment" means $379,600,000.
"Americold Loan" means each of (i) the Initial Americold Loan,
(ii) the Series B Americold Loans, (iii) the Senior Subordinated Americold Loan
and (iv) the JV Takeout Loan. The Americold Loans outstanding shall not at any
time exceed in the aggregate the Americold Commitment.
"Americold Obligations" shall have the meaning given to such
term in Section 9.1.
"Applicable Margin" means 1.25% per annum from and after the
date hereof through and including April 30, 1998, and, if the Final Maturity
date is extended pursuant to Section 2.2.1, to October 30, 1998, the Applicable
Margin shall mean 1.50% per annum.
"ASC" means Americold Services Corporation, a Delaware
corporation.
"Base LIBO Rate" means the rate of interest per annum
(expressed as a percentage) for deposits in U.S. Dollars for a one (1) month
period that appears on Telerate Page 3750 as of 11:00 a.m., London time, on the
applicable LIBOR Determination Date for the related Interest Reset Date. If such
rate does not appear on Telerate Page 3750 as of 11:00 a.m., London time, on the
applicable LIBOR Determination Date, the Base LIBO Rate shall mean the
arithmetic mean of all offered rates (expressed as a percentage per annum) for
deposits in U.S. Dollars for a one (1) month period that appear on the Reuters
Screen LIBO Page as of 11:00 a.m., London time, on such LIBOR Determination
Date, if at least two such offered rates so appear. If fewer than two such
offered rates appear on the Reuters Screen LIBO Page as of 11:00 a.m., London
time, on the applicable LIBOR Determination Date, the Lender will request the
principal London office of each of four major Reference Banks in the London
interbank market selected by the Lender to provide such Lender's offered
quotation (expressed as a percentage per annum) to prime banks in the London
interbank market for deposits in U.S. Dollars for a one (1) month period as of
11:00 a.m., London time, on such LIBOR Determination Date for amounts comparable
to the then-outstanding principal balance of the Notes and in any event not less
than U.S. $1,000,000. If two or more such offered quotations are so provided,
the Base LIBO Rate will be the arithmetic mean of such quotations. If fewer than
two such quotations are so provided, the Lender will request each of three major
banks in New York City selected by the Lender to provide such bank's rate
(expressed as a percentage per annum) for loans in U.S. Dollars to leading
European banks for a one (1) month period as of approximately 11:00 a.m., New
York City time, on the applicable LIBOR Determination Date for amounts
comparable to the then-outstanding principal balance of the Notes and in any
event not less than U.S. $1,000,000. If two or more such rates are so provided,
the Base LIBO Rate will be the arithmetic mean of such rates. If fewer than two
such rates are so provided, then the Base LIBO Rate will be the Base LIBO Rate
in effect on the preceding Interest Reset Date. To the extent required, the
results reached pursuant to the above terms of this definition shall be rounded
upward to the nearest 1/16th of 1% per annum.
<PAGE>
"Base Rate" means, with respect to any Interest Period, the
per annum rate publicly announced by Citibank, N.A. (or its successors) on the
first Business Day of such Interest Period as its base rate on corporate loans.
"Borrower" means each of Americold and Joint Venture, and they
are collectively herein called the "Borrowers".
"Business Day" means any day other than a Saturday, Sunday or
any other day on which national banks in New York are not open for business.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended, 42 U.S.C. ss. 9601 et seq.
"Claims" shall have the meaning provided in the definition of
"Environmental Claims."
"Closing Date" means October 31, 1997 (or such later date as
the Borrowers may request and is acceptable to the Lender in its sole
discretion) if on such date all conditions precedent set forth in Section 3.1
hereof are satisfied, or waived by the Lender.
"Code" means the Internal Revenue Code of 1986, as amended,
and as it may be further amended from time to time, any successor statutes
thereto, and applicable U.S. Department of Treasury regulations issued pursuant
thereto in temporary or final form.
"Collateral" means, collectively, the Collateral under the
Pledge Agreement, the Security Agreements, the Mortgages and any other document,
agreement or instrument executed from time to time by either Borrower to secure
the Secured Obligations.
"Crescent" means Crescent Real Estate Equities, Inc.
"Default" means the occurrence of any event hereunder or under
any other Loan Document which, but for the giving of notice or passage of time,
or both, would be an Event of Default.
"Default Rate" has the meaning set forth in Section 2.3.2.
"Distribution" has the meaning set forth in Section 6.11.
"Environmental Claims" means any and all administrative,
regulatory or judicial actions, suits, demands, demand letters, claims, liens,
notices of noncompliance or violation, investigations (other than internal
reports prepared by a Borrower or any of its Subsidiaries solely in the ordinary
course of such Person's business and not in response to any third party action
or request of any kind) or proceedings relating to any Environmental Law or any
permit issued, or any approval given, under any such Environmental Law
(hereafter, "Claims"), including, without limitation, (a) any and all Claims by
governmental or regulatory authorities for enforcement, cleanup, removal,
response, remedial or other actions or damages pursuant to any applicable
Environmental Law, and (b) any and all Claims by any third party seeking
damages, contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from alleged injury or threat of injury to health,
safety or the environment relating to any Hazardous Materials.
<PAGE>
"Environmental Law" means any applicable Federal, state,
foreign or local statute, law, rule, regulation, ordinance, code and rule of
common law now or hereafter in effect and in each case as amended, and any
legally binding judicial or administrative interpretation thereof, including any
judicial or administrative order, consent decree or judgment, relating to the
environment, health, safety or Hazardous Materials, including, without
limitation, CERCLA; RCRA; the Federal Water Pollution Control Act, as amended,
33 U.S.C. ss. 1251 et seq.; the Toxic Substances Control Act, 15 U.S.C. ss. 7401
et seq.; the Clean Air Act, 42 U.S.C. . ss. 7401 et seq.; the Safe Drinking
Water Act, 42 U.S.C. ss. 3808 et seq.; the Oil Pollution Act of 1990, 33 U.S.C.
ss. 2701 et seq.; and any applicable state and local or foreign counterparts or
equivalents.
"ERISA" has the meaning set forth in Section 4.1(h) hereof.
"ERISA Affiliate" means each person (as defined in Section
3(9) of ERISA) which together with the Borrowers would be deemed to be a member
of the same "controlled group" within the meaning of Section 414(b), (c), (m)
and (o) of the Code.
"Event of Default" has the meaning set forth in Section 7.1
hereof.
"Existing Indebtedness" has the meaning set forth in Section
4.1 hereof.
"Exit Fee" has the meaning set forth in Section 2.12.2.
"Final Maturity Date" means April 30, 1998, unless extended in
accordance with the provisions of Section 2.2.1, in which case the Final
Maturity Date shall mean October 30, 1998.
"First Interest Period" means the period commencing on (and
including) the Closing Date and ending on (but excluding) the first Interest
Payment Date.
"GAAP" means generally accepted accounting principles in the
United States of America, consistently applied, as of the relevant date in
question.
"Goldman" means Goldman Sachs Mortgage Company, a New York
limited partnership.
"Governmental Authority" means any court, board, agency,
commission, office or authority of any nature whatsoever of or for any
governmental unit (federal, state, county, district, municipal, city or
otherwise), whether now or hereafter in existence.
"Guarantor" means Americold and ASC.
"Guaranty Obligations" means any obligations (other than
endorsements in the ordinary course of business of negotiable instruments for
deposit or collection) guaranteeing any Indebtedness, leases, dividends or other
obligations of any other Person in any manner, whether direct or indirect, and
including any obligation, whether or not contingent, (i) to purchase any such
Indebtedness or other obligation or any property constituting security therefor,
(ii) to advance or provide funds or other support for the payment or purchase of
such Indebtedness or obligation or to maintain working capital, solvency or
other balance sheet condition of such other Person (including without limitation
keep well agreements, maintenance agreements, comfort letters or similar
agreement or arrangement), (iii) to lease or purchase property, securities or
services primarily for the purpose of assuring the owner of such Indebtedness or
<PAGE>
obligation the payment thereof, or (iv) otherwise assure or hold harmless the
owner of such Indebtedness or obligation against loss in respect thereof.
"Hazardous Materials" means (a) any petroleum or petroleum
products, radioactive materials, asbestos in any form that is or could become
friable, urea formaldehyde foam insulation, transformers or other equipment that
contained, electric fluid containing regulated levels of polychlorinated
biphenyls, and radon gas; (b) any chemicals, materials or substances defined as
or included in the definition of "hazardous substances," "hazardous waste,"
"hazardous materials," "extremely hazardous waste," "restricted hazardous
waste," "toxic substances," "toxic pollutants," "contaminants," or "pollutants,"
or words of similar import, under any applicable Environmental Law; and (c) any
other chemical, material or substance, exposure to which is prohibited, limited
or regulated by any governmental authority pursuant to any applicable
Environmental Law.
"Indebtedness" means, with respect to any Person, without
duplication, the following, whether direct or contingent:
(a)...... all indebtedness for borrowed money or any other
obligation evidenced by a note, bond, debenture or similar instrument;
(b)...... the deferred purchase price of assets or services
which in accordance with GAAP would be shown to be a liability (or on the
liability side of a balance sheet);
(c)...... all Guaranty Obligations;
(d)...... the maximum amount of all letters of credit issued
or acceptance facilities established for the account of such Person and, without
duplication, all drafts drawn thereunder (other than letters of credit (i)
supporting other Indebtedness of the Borrowers or the Guarantor, or (ii) offset
by a like amount of cash or government securities held in escrow by or on behalf
of the issuer thereof to secure such letter of credit and draws thereunder);
(e)...... all capitalized lease obligations;
(f)...... all Indebtedness of another Person secured by any
lien on any property of the Borrowers or the Guarantor, whether or not such
Indebtedness has been assumed;
(g)...... all obligations under take-or-pay or similar
arrangements or under interest rate, currency, or commodities agreements;
(h)...... indebtedness created or arising under any
conditional sale or title retention agreement (other than conditional sale and
title retention agreements entered into in the ordinary course of business for
assets incidental to the management and operation of the Properties); and
(i)...... obligations of such Person with respect to
withdrawal liability to or on behalf of any "multiemployer plan" as defined in
Section 4001(a) of ERISA;
provided, however, that Indebtedness shall not include (i) current accounts
payable (other than for borrowed money) incurred in the ordinary course of
business; provided that all such accounts payable shall constitute Indebtedness
if not paid when due (or in conformity with customary trade terms) and (ii)
indemnification, recourse carve-out and similar contingent obligations which are
not assurances of payment of the items described in subclauses (a) through (i)
of this definition.
<PAGE>
"Indemnitee" means Lender, its officers, directors, employees,
representatives and agents.
"Initial Americold Loan" means the Loan to Americold to be
made on the Closing Date in the principal amount of $20,000,000.
"Interest Payment Date" means the first (1st) day of each
calendar month, or, if in any month such first (1st) day is not a Business Day,
then the Interest Payment Date for such month shall be the first Business Day
thereafter, provided that the first Interest Payment Date shall be December 1,
1997.
"Interest Period" means (i) the First Interest Period and (ii)
each successive period beginning on (and including) the preceding Interest
Payment Date and ending on (but excluding) the next succeeding Interest Payment
Date.
"Interest Reset Date" means the first day of each Interest
Period.
"Joint Venture" means Vornado Crescent Portland Partnership, a
general partnership, of which Portland Parent, Inc., a Delaware corporation, is
a general partner.
"JV Commitment" means $25,000,000.
"JV Loan" means the Loan made to Joint Venture on the Closing
Date.
"JV Mandatory Prepayment" means the mandatory repayment to be
made by Joint Venture pursuant to Section 2.4.3(b) in the amount of the then
outstanding amount of the JV Loan.
"JV Obligations" has the meaning set forth in Section 8.1
hereof.
"JV Takeout Closing Date" means the date on which the JV
Takeout Loan is to be made.
"JV Takeout Loan" means the Loan made to Americold
simultaneously with the JV Mandatory Prepayment and shall be in the amount of
the then outstanding principal amount of the JV Loan.
"Lender" means Goldman Sachs Mortgage Company and includes any
other Person who becomes a lender pursuant to the provisions of Section 10.27.
"LIBOR Business Day" means a Business Day on which United
States dollar deposits may be dealt in on the London interbank market and on
which commercial banks and foreign exchange markets are open in London.
"LIBOR Determination Date" means, with respect to each
Interest Period, the second LIBOR Business Day preceding the Interest Reset
Date.
"Lien" means any mortgage, pledge, hypothecation, assignment,
security interest, encumbrance, lien (statutory or otherwise), or charge of any
kind (including any agreement to give any of the foregoing, any conditional sale
or other title retention agreement, any financing or similar statement or notice
perfecting a security interest under the Uniform Commercial Code as adopted and
<PAGE>
in effect in the relevant jurisdiction, or other similar recording or notice
statute, and any lease in the nature thereof).
"Loan" shall mean the JV Loan and the Americold Loans made
pursuant to Section 2.1 hereof which shall in the aggregate not exceed the Total
Commitment and shall be evidenced by the Notes of the Joint Venture and
Americold, respectively.
"Loan Closing Date" means each of the Closing Date, each
Series B Closing Date, the JV Takeout Closing Date and the Senior Subordinated
Closing Date.
"Loan Documents" means, collectively, this Credit Agreement,
the Notes and the Pledge Agreement (including any stock power and financing
statements executed and delivered in connection therewith), and the Security
Agreements and the Parent Guarantees as well as all other documents executed
and/or delivered in connection with the Loans or hereafter delivered by or on
behalf of each of the Borrowers, ASC or a Parent Guarantor pursuant to the
requirements hereof or of any other Loan Document, including, without
limitation, any Mortgages from and after the delivery thereof.
"Material Adverse Change" means (i) a material adverse effect
on the rights or remedies of the Lender or on the ability of either Borrower to
perform its obligations to the Lender under this Credit Agreement or any other
Loan Document or (ii) a material adverse effect on the performance, business,
operations, property, assets, liabilities, condition (financial or otherwise) or
prospects of either Borrower or the Borrowers and their Subsidiaries taken as a
whole.
"Merger Agreement" means the Agreement and Plan of Merger
among Vornado Realty Trust, Portland Parent, Inc., Portland Storage Acquisition
Co. and Americold, dated as of September 26, 1997.
"Mortgage Closing Conditions" means the conditions set forth
on Schedule 3.4 hereto.
"Mortgage Indenture" means the Amended and Restated Indenture
dated as of March 9, 1993, as amended between Americold, as Issuer, and Fleet
National Bank (formerly known as Shawmut Bank Connecticut), as Trustee.
"Mortgages" means recourse mortgages on the Properties that
constitute real property, substantially in the form of Exhibit F attached
hereto, and security agreements, pledge agreements or other appropriate
documents creating security in the case of Properties that do not constitute
real property, in each case in form and substance reasonably satisfactory to the
Lender and securing the Secured Obligations delivered from time to time under
this Credit Agreement.
"Notes" means (a) the promissory notes of Americold and (b)
the promissory note of Joint Venture in favor of the Lender evidencing the
Americold Loans and the JV Loan, respectively, and provided in accordance with
Section 2.1.3 hereof, as such promissory notes may be amended, modified,
supplemented or replaced from time to time.
"Notice" has the meaning set forth in Section 6.1(b).
"Notice of Borrowing" means a Notice of Borrowing,
substantially in the form attached hereto as Exhibit B.
<PAGE>
"Officer's Certificate" of a Borrower means a certificate made
by an individual authorized to act on behalf of such Borrower and, to the extent
applicable, any constituent Person with respect to Borrower. Without limiting
the foregoing, if the individual signing the certificate is doing so on behalf
of a corporation, then such individual shall hold the office of President, Vice
President or Chief Financial Officer (or the equivalent) with respect to such
corporation.
"Parent Guarantee" shall mean a Parent Guarantee,
substantially in the form of Exhibit H attached hereto) to be entered into by
each real estate investment trust and its related operating partnership on a
joint and several basis that directly or indirectly owns Americold.
"Parent Guarantor" shall mean each real estate investment
trust and the related operating partnership party to a Parent Guarantee.
"Permitted Investments" means cash, U.S. Government
Securities, U.S. Dollar ($) time deposits, certificates of deposit and banker's
acceptances, repurchase obligations for underlying securities of the types
described above, repurchase agreements relating to the foregoing, commercial
paper the issuers of which have a short-term credit rating of at least A-1
and/or P-1 or the equivalent from a Rating Agency, and investments and money
market funds substantially all of whose assets are comprised of securities of
the types described above.
"Permitted Liens" means (i) Liens created by, under or in
connection with this Credit Agreement or the other Loan Documents or the
Mortgages, if any, in favor of the Lender, (ii) Liens for taxes and other
charges not yet due or Liens for taxes being contested in good faith by
appropriate proceedings for which adequate reserves have been established in
accordance with GAAP (and as to which the property subject to such Lien is not
yet subject to foreclosure, sale or loss on account thereof), (iii) Liens in
respect of property imposed by law arising in the ordinary course of business
such as materialmen's, mechanic's, warehousemen's, workman's compensation and
other like Liens, provided that such Liens secure only amounts not yet due and
payable or amounts being contested in good faith by appropriate proceedings for
which adequate reserves have been established (and as to which the property
subject to such lien is not yet subject to foreclosure, sale or loss on account
thereof), (iv) pledges or deposits made to secure payment under worker's
compensation insurance, unemployment insurance, pensions, social security
programs, public liability laws or similar legislation, (v) Liens arising from
good faith deposits in connection with or to secure performance of tenders,
statutory obligations, surety and appeal bonds, bids, leases, contracts,
performance and return-of-money bonds and other similar obligations incurred in
the ordinary course of business (other than obligations in respect of the
payment of borrowed money), (vi) easements, rights-of-way, restrictions
(including zoning restrictions), defects or irregularities in title and other
similar charges or encumbrances not, in any material respect, interfering with
the ordinary conduct of business at such Property in a manner, individually or
taking into account similar interference at other Properties, reasonably likely
to have a Material Adverse Change, (vii) leases or subleases granted to others,
whether existing now or hereafter entered into, in the ordinary course of
business not interfering in any material respect with the business or operations
of the Borrower or any of its Subsidiaries, (viii) any attachment or judgment
lien, unless the judgment it secures shall not, within thirty (30) days after
the entry thereof, have been discharged or execution thereof stayed pending
appeal, or shall not have been discharged within thirty (30) days after the
expiration of any such stay, and (ix) any mortgage or security agreement in
favor of the Agent securing the Secured Obligations.
"Person" means any individual, sole proprietorship,
corporation, general partnership, limited partnership, limited liability company
or partnership, joint venture, association, joint stock company, bank, trust,
estate, unincorporated organization, any federal, state, county or municipal
<PAGE>
government (or any agency or political subdivision thereof), endowment fund or
any other form of entity.
"Plan" means any multiemployer or single-employer plan as
defined in Section 4001 of ERISA, which is maintained by a Borrower, for
employees of such Borrower, any Subsidiary or an ERISA Affiliate.
"Plan Assets" means such term within the meaning and as
defined in the Department of Labor Regulation 29 CFR ss. 2510.3-101, as amended,
and the advisory opinions and rulings issued thereunder.
"Pledge Agreement" means the Pledge and Security Agreement to
be entered into between Joint Venture, as pledgor thereunder, and the Agent,
substantially in the form of Exhibit C attached hereto, as it may be amended,
supplemented or modified from time to time.
"Properties" means the assets, properties, rights, contracts
and other interests owned by either of the Borrowers.
"Rating Agency" means each of Standard & Poor's Ratings Group,
a division of McGraw-Hill, Inc., Moody's Investors Service, Inc., or any other
nationally-recognized statistical rating agency which has been approved by the
Lender.
"RCRA" shall mean the Resource Conservation and Recovery Act,
as amended, 42 U.S.C.ss. 6901 et seq.
"Reference Bank" means each of Barclays Bank, plc, The Bank of
Tokyo, Ltd., National Westminster Bank, plc and Bankers Trust Company or any
substitute reference bank appointed by the Lender which (i) is a leading bank
engaged in transactions in Eurodollar deposits in the international Eurocurrency
market, (ii) has a place of business in London, England and (iii) whose
quotations appear on page 3750 of the Telerate screen on the relevant LIBOR
Determination Date.
"Regulation D, G, T, U, or X" means, respectively, Regulation
D, G, T, U and X of the Board of Governors of the Federal Reserve System as from
time to time in effect and any successor to all or a portion thereof.
"Regulatory Change" means any change after the date of this
Credit Agreement (or with respect to any assignee hereunder, after the date such
assignee becomes a Lender) in federal, state or foreign laws or regulations or
the adoption or the making, after such date, of any interpretations, directives
or requests applying to a class of Lenders or companies controlling Lenders,
including a Lender or any company controlling a Lender, of or under any federal,
state or foreign laws or regulations (whether or not having the force of law) by
any court or governmental or monetary authority charged with the interpretation
or administration thereof.
"Reserve Percentage" means, for any day, the stated maximum
rate (expressed as a decimal) in effect on such day at which reserves (including
any marginal, supplemental or emergency reserves) are required to be maintained
under Regulation D by a member bank of the Federal Reserve System against
"Eurocurrency liabilities" (as such term is used in Regulation D) but without
benefit of or credit for proration, exemptions or offsets that might otherwise
be available to such member bank from time to time under Regulation D. Without
limiting the effect of the foregoing, the reserve percentage shall reflect any
other reserves required to be maintained by such member bank against (i) any
category of liabilities which includes deposits by reference to which the
<PAGE>
Adjusted LIBO Rate for the Loan is to be determined or (ii) any category of
extension of credit or other assets that includes the Loan, but not including
any risk-based or other capital requirements relating to extensions of credit.
The Reserve Percentage shall be expressed in decimal form and rounded upward, if
necessary, to the nearest 1/100th of one percent, and shall include marginal,
emergency, supplemental, special and other reserve percentages. The parties
hereto acknowledge that, as of the Closing Date, the Reserve Percentage is zero.
"Required Appraisals" shall mean real estate appraisals
satisfying the requirements set forth in 12 C.F.R., Part 34 Subpart C, or any
successor or similar statute, rule, regulation, guideline or order.
"Reuters Screen LIBO Page" means the display designated as the
"LIBO" page on the Reuters Monitor Money Rates Service (or such other page as
may replace the LIBO page on the service for the purpose of displaying interbank
rates from London in U.S. Dollars).
"Secured Obligations" means the outstanding principal amount
set forth in, and evidenced by, the Notes, together with all interest accrued
and unpaid thereon (including interest accruing after the date of the filing of
any petition under applicable bankruptcy law whether or not such interest is
enforceable) and all other sums (including indemnification payments, tax gross
up payments and break funding payments) due to the Lender in respect of the
Loans, including any sums due under the Notes, this Credit Agreement, the Pledge
Agreement, each Security Agreement or any other Loan Document.
"Securities Act" means the Securities Act of 1933, as amended.
"Security Agreement" means the Security Agreements to be
entered into (i) between Americold and the Agent, substantially in the form of
Exhibit E-1 hereto and (ii) between ASC and the Agent, substantially in the form
of Exhibit E-2 hereto.
"Senior Subordinated Americold Loan" means the Loan to
Americold to be made to fund the Senior Subordinated Tender and the Senior
Subordinated Defeasance.
"Senior Subordinated Closing Date" means the date on which the
Senior Subordinated Americold Loan is to be made.
"Senior Subordinated Defeasance" has the meaning as set forth
in the definition of Transaction contained herein.
"Senior Subordinated Indenture" means the Indenture dated as
of April 9, 1996 between Americold and United States Trust Company of New York,
as Trustee.
"Senior Subordinated Notes" means the 12.875% Senior
Subordinated Notes due 2008, issued by Americold under the Senior Subordinated
Indenture.
"Senior Subordinated Tender" shall have the meaning provided
in the definition of Transaction.
"Series A Notes" means the 11.45% First Mortgage Bonds,
Series, Due 2002, issued by Americold under the Mortgage Indenture.
<PAGE>
"Series A Redemption" shall have the meaning provided in the
definition of Transaction contained herein.
"Series B Americold Loans" means the Series B Tender Americold
Loan and the Series B Redemption Americold Loan.
"Series B Redemption Americold Loan" means the Loan to
Americold to fund the Series B Redemption.
"Series B Tender Americold Loan" means the Loan to Americold
to fund the Series B Tender,
"Series B Closing Dates" means each date on which a Series B
Americold Loan is to be made.
"Series B Notes" means the 11.50% First Mortgage Bonds, Series
B, Due 2005, issued by Americold under the Mortgage Indenture.
"Series B Redemption" has the meaning as set forth in the
definition of Transaction contained herein.
"Series B Redemption Closing Date" shall mean the date on
which the Series B Redemption Americold Loan shall be made.
"Series B Tender" shall have the meaning provided in the
definition of Transaction contained herein.
"Series B Tender Closing Date" shall mean the date on which
the Series B Tender Loan shall be made.
"Subsidiary" means (i) any corporation more than 50% of whose
stock of any class or classes having by the terms thereof ordinary voting power
to elect a majority of the directors of such corporation (irrespective of
whether or not at the time, any class or classes of such corporation shall have
or might have voting power by reason of the happening of any contingency) is at
the time owned by such Person directly or indirectly through Subsidiaries, and
(ii) any partnership, association, trust, joint venture or other entity in which
such Person directly or indirectly through Subsidiaries has more than 50% equity
interest at any time.
"Telerate Page 3750" means the display designated as "Page
3750" on the Dow Jones Telerate Service (or such other page as may replace Page
3750 on that service or such other service as may be nominated by the British
Bankers' Association as the information vendor for the purpose of displaying
British Bankers' Association Interest Settlement Rates for U.S. Dollar
deposits).
"$34 Million Credit Documents" means the documents evidencing
the Indebtedness described in Part A of Schedule 4.1 hereto.
"Total Commitment" means $379,600,000.
"Transaction" shall mean (i) the redemption of all of the
outstanding Series A Notes to occur simultaneously with the closing on the
Closing Date (the "Series A Redemption"); (ii) the tender offer/consent
solicitation for all of the outstanding Series B Notes pursuant to which, among
<PAGE>
other things, all operating covenants included in the Mortgage Indenture shall
have been effectively removed (the "Series B Tender"); (iii) the redemption of
those Series B Notes remaining outstanding upon the consummation of the Series B
Tender (the "Series B Redemption"); (iv) the tender offer/consent solicitation
for the Senior Subordinated Notes which solicitation shall include solicitation
of consent for the effective removal of all operating covenants which can be
removed by other than unanimous consent and any requirement that funds deposited
to defease the Senior Subordinated Notes be on deposit with the trustee under
the Senior Subordinated Indenture for any period of time in order for the
defeasance to become effective (the "Senior Subordinated Tender"); (v) the
defeasance (pursuant to the covenant, as compared to legal, defeasance
provisions) of those Senior Subordinated Notes remaining outstanding upon the
consummation of the Senior Subordinated Tender (the "Senior Subordinated
Defeasance"); and (vi) the funding of the JV Takeout Loan and JV Mandatory
Prepayment.
"U.S. Government Securities" means securities (including
strips) evidencing an obligation to pay principal and interest in a full and
timely manner that are (x) direct obligations of the United States of America
for the payment of which its full faith and credit is pledged or (y) obligations
of a Person controlled or supervised by and acting as an agency or
instrumentality of and guaranteed as a full faith and credit obligation by the
United States of America, which in either case are not callable or redeemable at
the option of the issuer thereof (including a depository receipt issued by a
bank (as defined in Section 3(a)(2) of the Securities Act) as custodian with
respect to any such securities or a specific payment of principal of or interest
on any such securities held by such custodian for the account of the holder of
such depository receipt, provided that (except as required by law) such
custodian is not authorized to make any deduction from the amount payable to the
holder of such depository receipt from any amount received by the custodian in
respect of the securities or the specific payment of principal of or interest on
the securities evidenced by such depository receipt).
"Up Front Fee" has the meaning set forth in Section 2.12.1.
"URS" means URS Logistics, Inc., a Delaware corporation.
"Vornado" means Vornado Realty Trust, a Maryland real estate
investment trust.
Section 1.2. Principles of Construction.
All references to sections, schedules and exhibits are to
sections, schedules and exhibits in or to this Credit Agreement unless otherwise
specified. Unless otherwise specified, the words "hereof", "herein" and
"hereunder" and words of similar import, when used in this Credit Agreement,
shall refer to this Credit Agreement as a whole and not to any particular
provision of this Credit Agreement. The words "includes", "including" and
similar terms shall be construed as if followed by the words "without
limitation". Unless otherwise specified, all meanings attributed to defined
terms herein shall be equally applicable to both the singular and plural forms
of the terms so defined. All accounting terms not specifically defined herein
shall be construed in accordance with GAAP, as may be modified herein.
<PAGE>
ARTICLE II.
GENERAL
Section 2.1. The Loans.
2.1.1....Commitments. (a) The Lender will make the JV Loan to
Joint Venture on the Closing Date in an amount equal to the JV Commitment, upon
satisfaction of the conditions set forth in Section 3.1.
(b).....The Lender shall make the following Americold Loans
on the following dates subject to the satisfaction or waiver of the conditions
in Article III to be met by such date: (i) the Initial Americold Loan shall be
made on the Closing Date in the amount of $20,000,000; (ii) the Series B Tender
Americold Loan shall be made on the Series B Tender Closing Date; (iii) the
Series B Redemption Loan shall be made on the Series B Redemption Date; (iv) the
Senior Subordinated Americold Loan shall be made on the Senior Subordinated
Closing Date; and (v) the JV Takeout Loan shall be made on the JV Takeout
Closing Date in the amount of $25,000,000; provided, however, that if, after
giving effect to any Loan to be made pursuant to clauses (ii), (iii) or (iv),
Americold would not be in compliance with the provisions of Section 6.12
(determined without giving effect to any Parent Guarantee), Lender shall not be
obligated to make such Loan unless (x) Parent Guarantors shall have delivered to
Agent Parent Guarantees guaranteeing a sufficient portion of the Loans so that,
after giving effect thereto, Americold would be in compliance with the
provisions of Section 6.12 and (y) Parent Guarantors shall have delivered to
Agent opinions of counsel as to such matters as Agent shall reasonably request.
(c)......The aggregate principal amount of the JV Loan and the
Americold Loans made shall not exceed the Total Commitment.
(d)......The Lender shall not be obligated to make any Loan
after April 30, 1998.
2.1.2....Disbursement to Borrower. (a) Joint Venture may
request and receive only one borrowing hereunder in respect of the JV Loan.
Joint Venture shall receive the JV Loan upon the closing on the Closing Date, in
accordance with the provisions of the Credit Agreement. Any amount borrowed and
repaid hereunder in respect of the JV Loan may not be reborrowed.
(b)...Americold may request and Lender shall make available
the prescribed amount of each of the Americold Loans on the date specified in
each Notice of Borrowing no later than 12:00 noon (New York time). Each of the
Americold Loans shall consist of only one borrowing. Any amount borrowed and
repaid hereunder in respect of any Americold Loan may not be reborrowed.
2.1.3....The Notes. (a) The Lender's JV Loan shall be
evidenced by a duly executed promissory note of Joint Venture to the Lender in
the principal amount of the JV Commitment and shall be substantially in the form
of Exhibit A-1 hereto.
(b)...The Lender's Americold Loans shall be evidenced by a
duly executed promissory note of Americold to the Lender in the principal amount
of the Lender's Americold Commitment and shall be substantially in the form of
Exhibit A-2 hereto. The Lender is authorized to set forth on the reverse of such
Note the outstanding amount of each Americold Loan but the failure to do so
shall not affect the obligation of Americold to repay such Loans.
<PAGE>
(c)......The Notes shall be subject to repayment as provided
in Section 2.4 hereof, shall be entitled to the benefits of this Credit
Agreement and shall be secured by the Pledge Agreement, the Security Agreements,
the Mortgages, if any, and the other Loan Documents.
2.1.4....Use of Proceeds of Loan. (a) Joint Venture shall use
the proceeds of the JV Loan to effect the Series A Redemption on the Closing
Date. (b) Americold shall use the proceeds of the Americold Loans to effect the
Transaction, including to effect, together with Joint Venture, the Series A
Redemption.
Section 2.2. Maturity.
2.2.1....Maturity Date. The Loans shall be due and payable on
the Final Maturity Date. The Final Maturity Date may be extended from April 30,
1998 to October 30, 1998 if the following conditions are satisfied: (a) the
Borrowers shall have provided to the Lender on or before April 1, 1998 a written
notice of extension; and (b) on April 30, 1998, no Default or Event of Default
shall have occurred and be continuing, and the Borrowers shall have delivered to
the Lender an Officer's Certificate certifying thereto.
2.2.2....Payment. Each Borrower agrees to pay all outstanding
principal amounts under such Borrower's Loans, together with all accrued but
unpaid interest thereon and all other amounts owing from such Borrower to the
Lender and under the other Loan Documents, on the Final Maturity Date.
Section 2.3. Interest.
2.3.1....Interest. Subject to Sections 2.7 and 2.8, the
principal balance outstanding under each Loan from time to time shall bear
interest at a per annum rate equal to the Adjusted LIBO Rate from time to time
as established hereunder, plus the Applicable Margin. The Base LIBO Rate and
Adjusted LIBO Rate for each Interest Period shall be set on each LIBOR
Determination Date preceding such Interest Period. Accrued interest shall be
payable in arrears on each Interest Payment Date.
2.3.2....Default Rate. Notwithstanding the foregoing, upon the
occurrence and during the continuance of an Event of Default of the type
described in Section 7.1(a) (including as a result of a failure to make any
required prepayment), the entire principal of and interest on the Loans shall
bear interest, payable on demand, at a rate equal to the higher of (i) three
percent (3%) per annum in excess of the rate otherwise applicable hereunder and
(ii) Base Rate (the "Default Rate"). Payment or acceptance of the increased
rates provided for in this Subsection 2.3.2 is not a permitted alternative to
timely payment or full performance by Borrower and shall not constitute a waiver
of any Default or Event of Default or an amendment to this Credit Agreement or
any other Loan Document and shall not otherwise prejudice or limit any rights or
remedies of the Lender.
Section 2.4. Loan Repayment.
2.4.1....Voluntary Prepayments. Subject to Section 2.4.2, (i)
Joint Venture shall have the right to prepay the JV Loan and (ii) Americold
shall have the right to prepay any or all of the Americold Loans at any time in
whole or in part without premium or penalty, but Joint Venture and Americold
shall be required to make any payment due under Section 2.6.
<PAGE>
2.4.2....Generally; Notice Required. Other than with respect
to a payment (at the Final Maturity Date or otherwise) or prepayment of the
Loans on an Interest Payment Date where a Borrower has irrevocably notified the
Lender in writing that it is making such payment or prepayment by at least 12:00
noon, New York time, at least three (3) Business Days prior to such Interest
Payment Date, such Borrower shall pay the breakage costs provided for in Section
2.6 hereof as to that portion of its Loan paid or prepaid (which breakage costs
shall be calculated for a period equal to the entire Interest Period which
follows such Interest Payment Date). All prepayments of principal shall include
the accrued but unpaid interest on the principal amount prepaid.
2.4.3...Mandatory Prepayments. (a) If at any time when a
Parent Guarantee is in effect, the rating assigned to the long term unsecured
and noncredit enhanced debt of the real estate investment trust party thereto
shall fail to be rated both (x) at least BBB- by Standard & Poor's Ratings
Group, a division of MeGraw-Hill, Inc. and (y) at least Baa3 by Moody's
Investors Service, Inc., Americold shall within three (3) Business Days after
such failure prepay the Loans by an amount equal to the maximum principal amount
guaranteed pursuant to such Parent Guarantor's Parent Guarantee.
(b)...Joint Venture shall be obligated to prepay the entire
principal amount of the JV Loan on the earliest day on which Americold shall be
permitted by the terms, provisions and covenants of the Mortgage Indenture and
the Senior Subordinated Indenture to incur additional Indebtedness equal to the
full amount of the JV Takeout Loan.
Section 2.5. Payments and Computations.
2.5.1...Making of Payments. All payments hereunder or under
any other Loan Document shall be made to the Lender in U.S. dollars in
immediately available funds to the account of the Lender designated below its
signature hereon (or to such other account as the Lender may instruct the
Borrower in writing at least two Business Days prior to the applicable payment
date) no later than 12:00 noon (New York time) on the date when due. Payments
received after such time shall be deemed to have been received on the next
succeeding Business Day. Whenever any payment hereunder shall be stated to be
due on a day which is not a Business Day, the due date thereof shall be extended
to the next succeeding Business Day and shall include interest and fees for the
period of such extension. Interest on a Loan shall accrue from and include the
date of such Loan, but shall exclude the date of payment. Unless the Lender
shall have received notice from Borrower prior to the date on which any payment
is due to the Lender hereunder that such Borrower will not make such payment in
full, the Lender may assume that such Borrower has made such payment in full to
the Lender on such date.
2.5.2...Computations. Interest payable on the Loans shall be
computed on the basis of the actual number of days elapsed in the period in
question (i.e., with respect to the interest due on a given Interest Payment
Date, from and including the date of a Loan or the last Interest Payment Date,
as applicable, to but excluding the current Interest Payment Date) over a year
of 360 days.
Section 2.6. Break Funding Costs.
Each Borrower agrees that it will reimburse the Lender on
demand for any loss incurred or to be incurred by the Lender in the reemployment
of the funds released by any prepayment or repayment (other than on the Final
Maturity Date or on an Interest Payment Date where the Lender has timely
received the notice referred to in Section 2.4.2 hereof) of Loans made to such
Borrower. Such loss shall be the difference as reasonably determined by the
Lender between the amount that would have been realized by the Lender for the
<PAGE>
remainder of the Interest Period in which such payment of prepayment is made
based on the Adjusted LIBO Rate applicable for such Interest Period and any
lesser amount that would be realized by the Lender in reemploying the funds
received in prepayment by making a loan of the same type (but utilizing the then
applicable Adjusted LIBO Rate) in the amount of the principal amount prepaid
during the period from the date of prepayment to the last day of the then
applicable Interest Period.
Section 2.7. Regulatory Change, Etc.
If, as a result of any Regulatory Change: (a) the basis of
taxation of payments to a Lender or any company controlling the Lender of the
principal of or interest on the Loans to a Borrower is changed; or (b) any
reserve, special deposit or similar requirements (other than such requirements
as are taken into account in determining the Adjusted LIBO Rate) relating to any
extensions of credit or other assets of, or any deposits with or other
liabilities of the Lender or any company controlling the Lender is imposed,
modified or deemed applicable; or (c) any other condition affecting a Loan to
such Borrower subject to the Adjusted LIBO Rate is imposed on the Lender or any
company controlling the Lender and the Lender reasonably determines that, by
reason thereof, the cost to the Lender or any company controlling the Lender of
making or maintaining the Loans to such Borrower is increased, or any amount
receivable by the Lender or any company controlling the Lender hereunder in
respect of any portion of the Loans to such Borrower is reduced, in each case by
an amount reasonably deemed by the Lender to be material (such increases in cost
and reductions in amounts receivable being herein called "Increased Costs"),
then such Borrower agrees that it will pay to the Lender upon the Lender's
written request such additional amount or amounts as will compensate the Lender
or any company controlling the Lender for such Increased Costs to the extent the
Lender reasonably determines that such Increased Costs are allocable to the
Loans to such Borrower. The Lender will notify such Borrower of any event
occurring after the date hereof which will entitle the Lender to compensation
pursuant to this Section 2.7 as promptly as practicable after it obtains
knowledge thereof and determines to request such compensation, but the failure
to provide such notice shall reduce any obligation of such Borrower under this
Section 2.7. Notwithstanding the foregoing, in no event shall either Borrower be
required to compensate the Lender for any portion of the income or franchise
taxes (including any taxes imposed in lieu of such taxes and any withholding
taxes) of the Lender or the company controlling the Lender, whether or not
attributable to payments made by the Borrower. If the Lender requests
compensation under this Section 2.7, a Borrower may, by notice to the Lender,
require that (i) the Lender furnish to such Borrower a statement setting forth
the basis for requesting such compensation and the method for determining the
amount thereof, and/or (ii) the interest rate on the Loans be changed from the
then applicable Adjusted LIBO Rate (as determined pursuant to Section 2.3) plus
the Applicable Margin to the Base Rate plus the Applicable Margin.
Section 2.8. Unavailability, Etc.
Without limiting the effect of Section 2.7, in the event that,
(a) by reason of any Regulatory Change, the Lender or the company controlling
the Lender incurs Increased Costs based on or measured by the excess above a
specified level of the amount of a category of deposits or other liabilities of
the Lender or any company controlling the Lender, which includes deposits by
reference to which the Adjusted LIBO Rate is determined or (b) the Lender shall
have determined in good faith after reasonable investigation that dollar
deposits in the principal amount of the Loans are not generally available in the
London interbank market, or (c) reasonable means do not exist for ascertaining
the Adjusted LIBO Rate, then, if the Lender so elects by notice to a Borrower,
the interest rate applicable to the then outstanding principal balance of the
Loans to such Borrower shall be converted to the Base Rate plus the Applicable
Margin. If the Lender elects to convert the interest rate applicable to the
<PAGE>
Loans to the Base Rate plus the Applicable Margin pursuant to the terms of this
Section 2.8 the affected Borrower may, by notice to the Lender, require that the
Lender furnish to such Borrower a statement setting forth the basis for such
election.
Section 2.9. Mitigation; Mandatory Assignment.
The Lender shall use reasonable efforts to avoid or mitigate
any increased cost or suspension of the availability of the Adjusted LIBO Rate
under Sections 2.7 and 2.8 to the greatest extent practicable (including
transferring the Loans to another lending office or affiliate of the Lender)
unless, in the opinion of the Lender, such efforts would be likely to have any
adverse effect upon it. In the event the Lender makes a request to a Borrower
for additional payments in accordance with Section 2.7 or 2.8, then, provided
that no Event of Default has occurred and is continuing at such time, such
Borrower may, at its own expense (such expense to include any transfer fee
payable to the Lender under Section 10.27(b) and any expense pursuant to Section
2.6), and in its sole discretion, require the Lender to transfer and assign in
whole (but not in part), without recourse (in accordance with and subject to the
terms and conditions of Section 10.27(b)) all of its interests, rights and
obligations under this Credit Agreement to another Lender or institution
acceptable to the Lender which shall assume such assigned obligations (which
assignee may be another Lender, if the Lender accepts such assignment); provided
that (i) such assignment shall not conflict with any law, rule or regulation or
order of any court or other governmental authority, and (ii) the Borrowers or
such eligible assignee shall have paid to the assigning Lender in immediately
available funds the principal of and interest accrued to the date of such
payment on the portion of the Loans hereunder held by such assigning Lender and
all other amounts owed to such assigning Lender hereunder, including any amount
which would have been payable to the Lender under Section 2.6 if the Lender's
Loans had been paid or prepaid on the date of such transfer.
Section 2.10. Intentionally Deleted
[Intentionally Deleted.]
Section 2.11. Intentionally Deleted
[Intentionally Deleted.]
Section 2.12. Fees.
<PAGE>
2.12.1. .Up Front Fee. Americold agrees to pay to the Lender
an up front fee (the "Up Front Fee") which Up Front Fee shall be equal to 0.20%
of the Total Commitment. The Up Front Fee shall be paid on October 31, 1997.
2.12.2... Exit Fee. Americold agrees to pay to Goldman Sachs
Mortgage Company an exit fee (the "Exit Fee") equal to 0.25% of the Total
Commitment. The Exit Fee shall be payable upon the earlier of (x) the Final
Maturity Date and (y) the repayment of the Loans. The Exit Fee shall be paid
unless either (i) Goldman or one of its Affiliates fails to offer, on Goldman's
or such Affiliate's then market terms, to originate mortgage loans (other than
under this Credit Agreement) or fails to offer to participate as a lead
underwriter/purchaser in a commercial mortgage-backed transaction involving the
Properties, in each case in the amount of at least $316,000,000 or (ii) Goldman
or one of its Affiliates so originates or participates in such transactions,
involving the Properties, in each case in the amount of at least $316,000,000.
ARTICLE III.
CONDITIONS PRECEDENT
Section 3.1. Conditions Precedent to the Loans to be Made on
the Closing Date.
The obligation of the Lender to make the Loans hereunder on
the Closing Date is subject to the fulfillment by Joint Venture, Americold and
ASC, as indicated, or waiver by the Lender of the following conditions precedent
no later than the Closing Date:
(a)......Representations and Warranties; Compliance with
Conditions. The representations and warranties of each Borrower and ASC
contained in this Credit Agreement and the other Loan Documents shall be true
and correct in all material respects on and as of the Closing Date with the same
effect as if made on and as of such date (except to the extent that they
expressly relate to an earlier date), and no Default or Event of Default shall
have occurred and be continuing as of the Closing Date; and each Borrower and
ASC shall be in compliance in all material respects with all terms and
conditions set forth in this Credit Agreement and in each other Loan Document on
its part to be observed or performed.
(b)......Credit Agreement and Notes. The Lender shall have
received copies of (i) this Credit Agreement, duly executed and delivered on
behalf of each Borrower and ASC, and (ii) the Notes, duly executed and delivered
on behalf of each Borrower.
(c)......Costs; Expenses; Fees. The Borrowers shall have paid
to the Lender all costs, expenses and fees (including legal fees and expenses of
counsel for the Lender relating to the transactions contemplated by the Loan
Documents and due diligence) to the extent due and payable under any Loan
Document on the Closing Date.
(d)......Financial Statements. The Lender shall have received
a pro forma balance sheet for each Borrower and its Subsidiaries (estimated as
of the day preceding the Closing Date), audited consolidated financial
statements of Americold for the year ended February 28, 1997, together with a
report thereon from independent public accountants of recognized national
standing and unaudited consolidated financial statements of Americold for the
second quarter ended August 31, 1997, and such other financial information as to
such Borrowers and ASC as the Lender may request.
<PAGE>
(e)......Delivery of Other Loan Documents. The Lender shall
have received fully executed and acknowledged counterparts of the Pledge
Agreement and stock certificates and stock powers duly endorsed in blank, UCC-1
financing statements relating to all of the capital stock of Americold by Joint
Venture, together with any necessary consents thereto, and the Security
Agreements, together with UCC-1 financing statements.
(f)......Related Documents. Each additional document not
specifically referenced herein, but relating to the transactions contemplated
herein, shall have been duly authorized, executed and delivered by all parties
thereto and the Lender shall have received and approved certified copies
thereof.
(g)......Delivery of Organizational Documents. On or before
the Closing Date, each Borrower shall deliver or cause to be delivered to the
Lender copies certified by each Borrower or the applicable Secretary of State of
all organizational documentation related to each Borrower, each of the
Subsidiaries of Americold and/or the formation, structure, existence, good
standing and/or qualification to do business, as the Lender may request in its
sole discretion, including good standing certificates, qualifications to do
business in the appropriate jurisdictions, resolutions authorizing the entering
into of the Loan Documents and, with respect to the Guarantor, the guaranty
contained in Article VIII hereof, and incumbency certificates as may be
requested by the Lender.
(h)......Single Purpose Status. The Lender shall have received
an Officer's Certificate from the Joint Venture to the effect Joint Venture is a
single-purpose entity whose sole business is to own the equity securities of
Americold and certifying as to the fulfillment of the conditions set forth in
Section 3.1(a) hereof.
(i)......Opinions of Counsel. The Lender shall have received
an opinion of each Borrower's counsel with respect to (i) the execution,
delivery, authority, enforceability of the Loan Documents by each Borrower and
ASC, (ii) the receipt of all necessary governmental and nongovernmental
approvals to consummate the transactions contemplated by the Loan Documents,
(iii) the absence of litigation relating to the transactions contemplated by the
Loan Documents, (iv) the absence of any conflict between the execution, delivery
and performance of the Loan Documents and any material agreement binding upon
Borrowers, including the Mortgage Indenture, the Subordinated Note Indenture and
any credit agreement binding upon such Borrower, and (v) the perfection of the
security interests granted under the Pledge Agreement and the Security
Agreements and (vi) such other matters as the Lender may reasonably require, all
such opinions in form, scope and substance satisfactory to the Lender and its
counsel in their sole discretion.
(j)......Completion of Proceedings. All partnership,
corporate, and other proceedings taken or to be taken in connection with the
transactions contemplated by this Credit Agreement and other Loan Documents
shall be satisfactory in form and substance to the Lender, and the Lender shall
have received all such counterpart originals or certified copies of such
documents as the Lender may reasonably request.
(k)......Intentionally Omitted.
(l)......No Material Adverse Change. The Lender shall be
satisfied that as of the Closing Date there shall be no Material Adverse Change.
<PAGE>
(m)......Credit Agreement. The execution, delivery and
performance of the transactions contemplated by this Agreement and the other
Loan Documents shall not conflict with the provisions of the Second Amended and
Restated Credit Agreement between Americold and United States National Bank of
Oregon dated as of June 19, 1995 in the amount of $27,500,000.
(n)......Merger. On or prior to the Closing Date, the merger
(including the payment of merger consideration) contemplated by the Merger
Agreement shall have been consummated in accordance with the Merger Agreement,
and the Lender shall have received evidence thereof satisfactory to it.
(o)......Redemption of Series A Notes. The Series A Redemption
shall have occurred and the Lender shall have received evidence thereof
satisfactory to it.
(p)......Series B Tender and Senior Subordinated Tender. The
Lender shall be satisfied that the Series B Tender and the Senior Subordinated
Tender shall have been made or that arrangements shall have been made so that
the Series B Tender and the Senior Subordinated Tender shall be made on or by
November 17, 1997.
(q)......Certification of Documents. The Lender shall have
received a true and complete copy of the Senior Subordinated Note Indenture and
the Mortgage Indenture certified by an officer of Americold.
(r)......Equity Contributions. Americold and Joint Venture
shall have received on or prior to the Closing Date cash capital contributions
of at least $242,000,000 and $217,000,000, respectively.
Section 3.2. Conditions Precedent to All Loans.
The obligation of the Lender to make the Loans (including
Loans made on the Closing Date), is subject, at the time of the making of each
Loan (except as hereinafter indicated), to the satisfaction of the following
conditions:
3.2.1. No Default; Representations and Warranties. At the
time of the making of a Loan, and also after giving effect thereto (i) there
shall exist no Default or Event of Default and (ii) all representations and
warranties by any Person contained herein or in any other Loan Document shall be
true and correct in all material respects with the same effect as though such
representations and warranties had been made on the date of the making of such
Loan (it being understood and agreed that any representation or warranty which
by its terms is made as of a specified date shall be required to be true and
correct in all material respects only as of such specified date).
3.2.2. No Material Adverse Change, etc. At the time of the
making of the Loan to a Borrower and also after given effect thereto, nothing
shall have occurred (and the Lender shall have become aware of no facts or
conditions not previously known) which it shall reasonably determine has or
could reasonably be expected to have or result in a Material Adverse Change.
3.2.3. Notice of Borrowing. (a) At least five (5) days prior
to the making of each Loan, Lender shall have received a Notice of Borrowing.
The occurrence of the Closing Date and the acceptance of the benefits or
proceeds of each Loan shall constitute a representation and warranty by the
Borrowers to the Lender that all the conditions specified in Sections 3.1 and
3.2 and applicable to such Loan exist as of that time. All of the Notes,
certificates, legal opinions and other documents and papers referred to in
<PAGE>
Sections 3.1 and 3.2, unless otherwise specified, shall be delivered to the
Lender and shall be in form and substance reasonably satisfactory to the Lender.
3.2.4... Legal Opinions. The Lender shall have received such
legal opinions from counsel to the Borrower or Borrowers, as applicable, as to
such matters (including the ability of the Borrower to incur such Loan and to
provide collateral contemplated under this Agreement for such Loan without
violating the terms of the Mortgage Indenture, the Subordinated Note Indenture
and other material agreements of either Borrower) as it may reasonably request.
3.2.5...Closing Date. The date of such Loan shall be on or
before April 30, 1998.
3.2.6...Parent Guarantee. If the circumstances described in
Section 2.1.1(b) shall have occured, the Lender shall have received executed
Parent Guarantees by Parent Guarantors owning directly or indirectly 100% of the
capital stock of Joint Venture.
Section 3.3. Conditions Precedent to the JV Takeout Closing
Date.
In addition to the conditions set forth in Section 3.2 hereof,
the obligation of the Lender to make the JV Takeout Loan on the JV Takeout
Closing Date is subject to the fulfillment by Joint Venture of the following
conditions precedent no later than the JV Takeout Closing Date.
3.3.1. Repayment of JV Loan. Arrangements satisfactory to the
Lender shall have been made for the Joint Venture to make JV Mandatory
Prepayment.
3.3.2. Legal Opinion. The Lender shall have received an
opinion from counsel to Americold that the incurrence of the JV Takeout Loan
shall not violate the terms of the debt instruments to which
Americold is a
party.
Section 3.4. Conditions Precedent to the Series B Closing
Date.
In addition to the conditions set forth in Section 3.2 hereof,
the obligation of the Lender to make the Series B Americold Loan hereunder on
each Series B Closing Date is subject to the fulfillment by Joint Venture and
Americold, as indicated, or waiver by the Lender of the following conditions
precedent no later than such Series B Closing Date:
3.4.1. Consummation of Series B Tender; Redemption
Arrangements. Americold shall have (a) provided evidence satisfactory to the
Lender that the Series B Tender shall have been consummated and that all
tendered Series B Notes will be cancelled simultaneously with the making of the
Series B Americold Loan, (b) specified in writing to the Lender the percentage
of Series B Notes tendered, and if sufficient Series B Notes were tendered,
certified to the Lender that all operating covenants in the Mortgage Indenture
have been effectively removed, (c) provided evidence satisfactory to the Lender
that arrangements for the redemption of all untendered Series B Notes on March
1, 1998 have been made (and Americold hereby irrevocably authorizes Agent to
provide in the name and on behalf of Americold all notices, instructions or
orders to the trustee under the Mortgage Indenture to effect such redemption if
not otherwise timely provided by Americold), and (d) provided evidence
reasonably satisfactory to Lender that Americold has on such date available or
has received on or before such date irrevocable commitments (which may include
commitments under this Credit Agreement) from creditworthy Persons to provide
funds to Americold in order to effect the Series B Redemption, the Senior
Subordinated Tender and the Senior Subordinated Defeasance.
<PAGE>
Section 3.5. Conditions Precedent to the Senior Subordinated
Closing Date.
In addition to the conditions set forth in Section 3.2 hereof,
the obligation of the Lender to make the Senior Subordinated Americold Loan
hereunder on the Senior Subordinated Closing Date is subject to the fulfillment
by Americold of the following conditions precedent no later than the Senior
Subordinated Closing Date:
3.5.1 Consummation of Senior Subordinated Tender; Defeasance
Arrangements. The Borrowers shall (i) have provided evidence satisfactory to the
Lender that the Senior Subordinated Tender shall have been consummated, (ii)
have specified to Lender the percentage of Senior Subordinated Notes tendered
and (iii) if sufficient Senior Subordinated Notes have been tendered, have
provided evidence that the covenants under the Senior Subordinated Indenture
were effectively removed, have taken all necessary action to defease the
remaining outstanding Senior Subordinated Notes and provided evidence to the
Lender that the defeasance has become effective pursuant to Section 6.02 of the
Senior Subordinated Indenture (and that the requirement under Section 6.02(3)
thereof has been satisfied or removed) and (iv) provided evidence reasonably
satisfactory to Lender that Americold has on such date available or has received
on or before such date irrevocable commitments (which may include the
commitments of Lender under this Credit Agreement) from creditworthy Persons to
provide funds to Americold in order to effect the Series B Redemption and the
Series B Tender. In the event that applicable instruments creating Indebtedness
prevent Americold from incurring all or a portion of the Senior Subordinated
Americold Loan, (a) Americold will borrow such portion thereof as is so
permitted and Joint Venture or an Affiliate will borrow, on terms identical to
the JV Loan, the remaining portion and make such funds available to Americold to
enable Americold to effect a defeasance of the Senior Subordinated Notes on the
Senior Subordinated Closing Date (with such additional borrowing by Joint
Venture or such Affiliate to be refinanced by a borrowing from the Lenders by
Americold (on terms identical to the Americold Loans) as soon as such borrowing
is so permitted) or (b) if Joint Venture (or such Affiliate) is unable to borrow
the amount and provide the funds as contemplated by the foregoing clause (a),
Americold and Joint Venture will take such actions as may be reasonably
requested by the Lender in order to effect on the Senior Subordinated Closing
Date the payment of the tender price for the tendered Senior Subordinated Notes
and the defeasance of the untendered Senior Subordinated Notes and to obtain no
later than March 1, 1998 the discharge of the Mortgage Indenture and the release
of all collateral mortgaged under the Mortgage Indenture.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES
Section 4.1. Representations and Warranties of the Borrower.
Each Borrower and ASC hereby jointly and severally represent
and warrant to the Lender on and as of each Loan Closing Date that:
(a)......Organization. Each Borrower and ASC have been duly
organized and is validly existing and is in good standing with requisite power
and authority to own its respective properties and to transact the businesses in
which it is now engaged or proposed to be conducted. Each Borrower and ASC are
duly qualified to do business and is in good standing in each jurisdiction where
it is required to be so qualified in connection with its properties, businesses
and operations, except where the failure to be so qualified could not be
reasonably likely to result in a Material Adverse Change. Each Borrower and ASC
<PAGE>
possess all rights, licenses, permits and authorizations, governmental or
otherwise, necessary to entitle it to own its properties and to transact the
businesses in which it is now engaged other than those which, if not so
possessed, could have a material adverse effect on any Borrower. Joint Venture
owns all the capital stock of Americold.
(b)......Proceedings. All necessary action has been taken by
each Borrower and ASC to authorize the execution, delivery and performance of
this Credit Agreement and the other Loan Documents to which it is a party. This
Credit Agreement and such other Loan Documents have been duly authorized,
executed and delivered by each Borrower and ASC party thereto and constitute
each Borrower's and ASC's legal, valid and binding obligations enforceable
against it in accordance with their respective terms, subject, as to
enforceability, to applicable bankruptcy, insolvency and similar laws affecting
rights of creditors generally and general principles of equity (regardless of
whether enforcement is sought in a proceeding in equity or at law).
(c)......No Conflicts. The Borrowers' and ASC's execution,
delivery and performance of this Credit Agreement and the other Loan Documents
to which it is a party will not conflict with or result in a breach of any of
the terms or provisions of, or constitute a default under, or result in the
creation or imposition of any lien, charge or encumbrance upon any of the
Borrowers' or ASC's, or to its knowledge, any of Americold's Subsidiaries'
properties or assets pursuant to the terms of any indenture, mortgage, deed of
trust, the loan agreement, partnership agreement, trust agreement or other
material agreement or instrument to which the Borrowers (other than immaterial
contracts or agreements not creating Indebtedness for borrowed money) to which
Borrowers or ASC, or any of Americold's Subsidiaries, is a party or by which any
of the Borrowers' or ASC's, or any of Americold's Subsidiaries' properties or
assets is subject, nor will such action result in any violation of the
provisions of any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Borrowers or ASC or any
of the Borrowers', ASC's or Americold's Subsidiaries' properties or assets, and
any consent, approval, authorization, order, registration or qualification of or
with any court or any such regulatory authority or other governmental agency or
body required for the execution, delivery and performance by it of this Credit
Agreement or any other Loan Documents to which it is a party has been obtained
and is in full force and effect in all material respects.
(d)......Litigation. There are no actions, suits or
proceedings at law or in equity by or before any Governmental Authority or other
agency now pending or threatened against or affecting either Borrower, ASC, or
Americold's Subsidiaries, which actions, suits or proceedings, relate to the
transactions contemplated by any of the Loan Documents or the Transactions or
which, alone or in the aggregate, if determined against either Borrower, ASC or
Americold's Subsidiaries, as applicable, might result in a Material Adverse
Change.
(e)......Agreements. None of the Borrowers, ASC nor, to the
knowledge of the Borrowers, any of Americold's Subsidiaries, is in default in
any material respect in the performance, observance or fulfillment of any of the
obligations, covenants or conditions contained in any agreement or instrument to
which it is a party or by which it is bound which could have a material adverse
effect on the Borrowers, ASC or Americold's Subsidiaries.
(f)......No Bankruptcy Filing. Neither ASC, Borrowers nor
Americold's Subsidiaries is contemplating either the filing of a petition by it
under any state or federal bankruptcy or insolvency laws or the liquidation of
its assets or property, and none has any knowledge of any Person contemplating
the filing of any such petition against any of them or any of Americold's
Subsidiaries.
<PAGE>
(g)......Full and Accurate Disclosure. No statement of fact
made by any Person in this Credit Agreement or in any of the other Loan
Documents furnished or in connection with any part of the transaction and all
such factual information hereafter furnished by or on behalf of the Borrowers in
writing to the Lender to which any Borrower is a party contains any untrue
statement of a material fact or omits to state any material fact necessary to
make statements contained herein or therein not misleading. There are no facts,
events or conditions known to either Borrower disclosed to the Lender which,
individually or in the aggregate, have or could be expected to result in a
Material Adverse Change.
(h)......No Plan Assets. Neither of the Borrowers, ASC nor any
of Americold's Subsidiaries is an "employee benefit plan", as defined in Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), and none of the assets of either Borrower or any of Americold's
Subsidiaries constitutes or will constitute Plan Assets.
(i)......Compliance. Each Borrower and Americold's
Subsidiaries are in compliance in all material respects with all laws, rules,
regulations, orders and decrees (including Environmental Laws) applicable to it,
or to its properties other than those where noncompliance could not reasonably
be expected to have a Material Adverse Change on any of the Borrowers, ASC or
Americold's Subsidiaries.
(j)......Financial Information. The financial statements
provided to the Lender, consisting of a pro forma balance sheet of each Borrower
and Americold's Subsidiaries on a consolidated basis assuming consummation of
the transactions contemplated hereunder and under the Merger Agreement are true
and correct and fairly represent the financial condition of each Borrower and
Americold's Subsidiaries as of such date and based on such assumption; and since
the date of such pro forma balance sheets there have occurred no changes or
circumstances which have had or are likely to have a Material Adverse Effect on
either Borrower or Americold's Subsidiaries and the financial statements
referenced above.
(k)......Title; Liens. Each Borrower and each of Americold's
Subsidiaries has good and insurable title to all of its properties and assets
including, without limitation, the Properties, free and clear of all mortgages,
liens, encumbrances, mortgages, pledges, security interests and other adverse
claims of any nature, except for the Pledge Agreement and the Lien under the
Security Agreement in favor of the Lender and Permitted Liens and other Liens
permitted by Section 6.2.
(l)......Indebtedness. No Borrower nor Americold's
Subsidiaries has any Indebtedness except for the Loans under the Credit
Agreement and the Indebtedness listed on Schedule 4.1 hereto (the "Existing
Indebtedness") which is a complete list of all Indebtedness (other than
Indebtedness in aggregate principal amount not in excess of $1,000,000) which is
outstanding on the date hereof and which is to remain outstanding after the date
hereof.
(m)......Taxes. The Borrowers and each of their Subsidiaries
have filed, or caused to be filed, all material tax returns (federal, state,
local and foreign) required to be filed and paid all amounts of taxes shown
thereon to be due (including interest and penalties) and has paid all other
taxes (including intangible fees, assessments and other governmental charges
taxes) owing (or necessary to preserve any Liens in favor of the Lender), by it,
except for such taxes (i) which are not yet delinquent or (ii) as are being
contested in good faith and by proper proceedings, and against which adequate
reserves are being maintained in accordance with GAAP, but only so long as there
is no risk of loss, sale or forfeiture of any collateral pledged to the Lender.
The Borrowers are not aware of any proposed material tax assessments against it
or any of its Subsidiaries. No extension of time for assessment or payment by
<PAGE>
either Borrower or any of their Subsidiaries of any federal, state or local tax
is in effect.
(n)......Not a Foreign Person. Neither of the Borrowers nor
any of Americold's Subsidiaries is a "foreign person" within the meaning of ss.
1445(f)(3) of the Code.
(o)......Capital Contributions. On or prior to the Closing
Date, Joint Venture and Americold shall have received the capital contributions
referred to in Section 3.1, and no Distributions have been made except as
permitted under this Agreement.
(p)......Use of Proceeds. None of the Loan proceeds will be
used for the purpose of purchasing or carrying any "margin stock" as defined in
Regulation U, Regulation X, Regulation G, or Regulation T or for the purpose of
reducing or retiring any Indebtedness which was originally incurred to purchase
or carry "margin stock" or for any other purpose which might constitute this
transaction a "purpose credit" within the meaning of Regulation U, Regulation X
or Regulation G.
(q)......Investment Company Act. Neither of the Borrowers nor
Americold's Subsidiaries is (i) an "investment company" registered or required
to be registered under the Investment Company Act of 1940, as amended, and is
not "controlled" by such a company, within the meaning of; or (ii) is a "holding
company" or a "subsidiary company" of a "holding company" or an "affiliate" of
either a "holding company" or a "subsidiary company" within the meaning of the
Public Utility Holding Company Act of 1935, as amended.
(r)......Employees. Each Borrower and each of Americold's
Subsidiaries either has no employees or has no material liability which has been
incurred by it and remains unsatisfied for any taxes or penalties with respect
to (i) any employee benefit plan (within the meaning of Section 3(3) of ERISA)
established, sponsored, maintained or contributed to by it on behalf of its
employees at any of the Properties or (ii) any "multiemployer plan" (as defined
in Section 4001(a)(3) of ERISA) as to which it is making or has an obligation to
make contributions or (iii) any lien which has been imposed on its assets
pursuant to Section 412 of the Code or Sections 302 or 4086 of ERISA.
(s)......Merger Agreement. The Borrowers have furnished to the
Lender a true and complete copy of the Merger Agreement and all amendments and
waivers thereof, no default by it exists thereunder and to the best of the
Borrowers' knowledge no default in any material respects by any party thereto or
any affiliates of such parties exists thereunder except as it has heretofore
disclosed in writing to the Lender.
(t)......Priority. Upon attachment of the Liens under the
Pledge Agreement, the Security Agreements and the Mortgages, such Liens will
constitute the first priority Liens they purport to create subject to no other
Liens except Liens permitted hereunder or the other Loan Documents.
Section 4.2. Survival of Representations.
Each Borrower and ASC hereby agree that all of the
representations and warranties of Borrower or the Guarantor, as applicable, set
forth in Section 4.1 hereof and elsewhere in this Credit Agreement and in the
other Loan Documents shall survive for so long as any amount remains owing to
the Lender under this Credit Agreement or any of the other Loan Documents by
either Borrower. All representations, warranties, covenants and agreements made
in this Credit Agreement or in the other Loan Documents by either Borrower shall
be deemed to have been relied upon by the Lender notwithstanding any
investigation heretofore or hereafter made by the Lender.
<PAGE>
ARTICLE V.
AFFIRMATIVE COVENANTS OF BORROWER
Section 5.1. Information Covenants.
Each Borrower will furnish, or cause to be furnished, as
indicated to the Lender:
(a)......Annual Financial Statements. As soon as available and
in any event within ninety (90) days after the close of each fiscal year of each
Borrower and its Subsidiaries, a consolidated balance sheet of each Borrower and
its Subsidiaries at the end of such fiscal year together with related
consolidated statements of income, and retained earnings and of cash flows for
such fiscal year, all in reasonable detail and examined by independent certified
public accountants of recognized national standing whose opinion shall be to the
effect that such financial statements have been prepared in accordance with GAAP
(except for changes with which such accountants concur) and shall not be
qualified as to the scope of the audit, all of the foregoing to be in reasonable
detail and in form and substance satisfactory to the Lender.
(b)......Quarterly Financial Statements. As soon as available
and in any event within forty-five (45) days after the end of each of the first
three fiscal quarters of each fiscal year of each Borrower and its Subsidiaries,
a consolidated balance sheet of each Borrower and its Subsidiaries as at the end
of such quarterly period together with related consolidated statements of
income, and retained earning and of cash flows for such quarterly period and for
the portion of the fiscal year ending with such period, all in reasonable form
and detail acceptable to the Lender and accompanied by Officer's Certificates on
behalf of each Borrower as being true and correct and as having been prepared in
accordance with GAAP, subject to changes resulting from audit and normal
year-end audit adjustments.
(c)......Monthly Reports. Within thirty (30) days after the
end of each month, each Borrower will provide a report in a form reasonably
satisfactory to the Lender including an operating statement for such month for
such Borrower.
(d)......Officer's Certificate. At the time of delivery of the
financial statements provided for in Sections 5.1(a) and (b) hereof, an
Officer's Certificate on behalf of each Borrower, delivering such statements
which, if it includes a statement that an Event of Default exists, shall specify
the nature and extent thereof and what action such Borrower proposes to take
with respect thereto.
(e)......Auditor's Reports; Tax Returns. Promptly upon receipt
thereof, (i) a copy of any other report or "management letter" submitted by
independent accountants to each Borrower in connection with any annual, interim
or special audit of the books of each Borrower or its Subsidiaries and (ii) if
requested by the Lender, a copy of such Borrower's Federal tax return.
(f)......Appraisals, Environmental and Engineering Reports.
(i) Promptly upon receipt by each Borrower or any of its Subsidiaries, copies of
any Environmental Claim which could be reasonably expected to result in a
Material Adverse Change from the United States Environmental Protection Agency,
or any state or local agency responsible for environmental matters, the United
States Occupational Health and Safety Administration, or any state or local
agency responsible for health and safety matters, or any successor agencies or
<PAGE>
authorities concerning environmental, health or safety matters. (ii) Within
ninety (90) days after the Closing Date the Borrowers shall provide appraisals,
engineering reports and environmental reports as requested by the Lender in its
reasonable discretion.
(g)......Other Information. With reasonable promptness upon
any such request, such other information regarding the business, properties or
financial condition of each Borrower or any of its Subsidiaries as the Lender
may reasonably request.
(h)......Notice of Default, Casualty, Condemnation or
Litigation. Promptly (but in any event within five (5) Business Days) upon a
Borrower obtaining knowledge thereof, it will give written notice to the Lender,
of the occurrence of any of the following with respect to such Borrower or any
of its Subsidiaries: (i) the occurrence of an Event of Default, specifying the
nature and existence thereof and what action such Borrower proposes to take with
respect thereto, (ii) commencement of any litigation, arbitral or governmental
proceeding against such Borrower or any of its Subsidiaries in respect of
environmental matters in which damages are sought or environmental remediation
demanded which exceeds $500,000 in any instance or $5,000,000 in the aggregate
or which might otherwise materially adversely affect the business, properties,
assets, condition (financial or otherwise) or prospects of the Borrowers and
their Subsidiaries, taken as a whole, (iii) the commencement of any litigation,
arbitral or governmental proceeding against either Borrower in which damages are
sought which exceeds $500,000 in any instance or $5,000,000 in the aggregate or
which might otherwise materially adversely affect the business, properties,
assets, condition (financial or otherwise) or prospects of such Borrower, (iv)
any levy of an attachment, execution or other process against the Borrowers or
Borrowers' Subsidiaries' assets which exceeds $500,000 in any instance or
$5,000,000 in the aggregate, (v) with respect to either Borrower or any of their
Subsidiaries, the occurrence of an Event of Default (after applicable notice and
cure periods) by reason of an event of default under any other agreement for
borrowed money, (vi) any development in Borrowers' or the Borrowers'
Subsidiaries' respective businesses or affairs which has resulted in, or which
either Borrower reasonably believes may result in, a Material Adverse Change of
such Borrower and its Subsidiaries, (vii) any significant casualty or
condemnation of any Property or (viii) the institution of any proceedings
involving, or the receipt of notice of potential liability or responsibility
for, any violation, or alleged violation of any federal, state or local law,
rule or regulation, including but not limited to, regulations promulgated under
the Resource Conservation and Recovery Act of 1976, 42 U.S.C. ss.ss. 6901 et
seq., regulating the generation, handling or disposal of any toxic or hazardous
waste or substance or the release into the environment or storage of any toxic
or hazardous waste or substance, the violation of which would reasonably be
expected to give rise to a material liability of, or a material adverse effect
on the business, assets, properties condition (financial or otherwise) or
prospects of, the Borrowers and the Subsidiaries.
(i)......Condemnation and Casualty. Each Borrower shall
immediately notify the Lender of any casualty or any pending or threatened
condemnation or eminent domain proceeding with respect to any portion of any
Property which may result in a claim for insurance or condemnation proceeds in
excess of $500,000 per real property and group of other related Property.
Section 5.2. Maintenance of Properties
Each Borrower shall insure that its Properties and its
Subsidiaries' Properties are kept in good condition and repair, normal wear and
tear and casualty damage excepted.
Section 5.3. Preservation of Existence and Franchises.
Each Borrower will do or cause to be done, all things
necessary to preserve and keep in full force and effect its and its
Subsidiaries' existence, rights, franchises and authority, but Americold shall
not be required to be qualified to do business in any jurisdiction if the
failure to be so qualified is not reasonably likely to result in a Material
Adverse Change and, with respect to Joint Venture, its single-purpose entity
status, if applicable.
Section 5.4. Books, Records and Inspections.
Each Borrower will keep, and shall cause its Subsidiaries to
keep, complete and accurate books and records of their respective transactions
in accordance with GAAP applied on a consistent basis. Each Borrower will, and
will cause its Subsidiaries to, permit, on reasonable notice and during
reasonable hours, officers or designated representatives of the Lender to visit
and inspect their respective books of account and records and any of their
respective properties or assets (in whomever's possession) and to discuss the
affairs, finances and accounts of such Borrower and such Subsidiaries with, and
be advised as to the same by, their respective officers, directors, partners and
independent accountants.
Section 5.5. Compliance with Law.
Each Borrower will comply, and will cause its Subsidiaries to
comply, in all material respects with all applicable laws, rules, regulations
and orders of, and all applicable restrictions imposed by all applicable
governmental bodies, foreign or domestic, or authorities and agencies thereof
(including quasi governmental authorities and agencies), in respect of the
conduct of its businesses and the ownership of its respective properties
(including applicable statutes, regulations, orders and restrictions relating to
environmental standards and controls) other than such noncompliance which could
not reasonably be expected to result in a Material Adverse Change.
Section 5.6. Insurance.
Each Borrower will at all times maintain, and will cause such
Borrower's Subsidiaries to at all times maintain, in full force and effect
insurance (including worker's compensation insurance, liability insurance,
casualty insurance and business interruption insurance) in such amounts,
covering such risks and liabilities and with such deductibles or self-insurance
retentions as are in accordance with normal industry practice.
Section 5.7. Ownership of Americold.
Joint Venture shall at all times directly own one-hundred
percent (100%) of the capital stock or other equity interests of Americold.
Americold shall not create any Subsidiaries after the Closing Date.
Section 5.8. Plan Assets, Etc.
Each Borrower will do, or cause to be done, all things
reasonably necessary to ensure that neither it nor its Subsidiaries will be
deemed to hold Plan Assets at any time.
<PAGE>
Section 5.9. Costs of Enforcement.
In the event (i) that this Credit Agreement is put into the
hands of any attorney for collection, suit or action as against either Borrower,
(ii) of the bankruptcy, insolvency, rehabilitation or other similar proceeding
in respect of either Borrower or any of its Subsidiaries or an assignment by
either Borrower for the benefit of its creditors, or (iii) the Lender shall
attempt to remedy any Default or Event of Default hereunder or incur any expense
with respect to any Default or Event of Default (whether or not involving
collection efforts), such Borrower shall be chargeable with and agrees to pay
all reasonable costs incurred by the Lender as a result thereof, including costs
of collection and defense, including reasonable attorney's fees (and experts',
consultants' and witnesses' fees) in connection therewith and in connection with
any appellate proceeding or post-judgment action involved therein, which shall
be due and payable together with all required service or use taxes.
Section 5.10. Estoppel Statement.
After written request by the Lender, the Borrowers shall
within fifteen (15) days furnish the Lender with a statement, duly acknowledged
and certified, setting forth (i) the original principal amount of the Notes,
(ii) the unpaid principal amount of the Notes, (iii) the current Adjusted LIBO
Rate and Final Maturity Date, (iv) the date installments of interest were last
paid, (v) any offsets or defenses known to Borrowers to the payment of the
Secured Obligations, (vi) that the Notes, this Credit Agreement, the Pledge
Agreement, the Security Agreements and the other Loan Documents are valid, legal
and binding obligations and have not been modified or if modified, giving
particulars of such modification, and (vii) such other matters as the Lender may
reasonably request.
Section 5.11. Transaction Covenants.
(i) Americold shall promptly after the Closing Date and the
consummation of the Series A Redemption seek to obtain the release of
Properties which are at such time encumbered under the Mortgage
Indenture to the extent permitted as a result of such Series A
Redemption provided that nothing herein shall require Americold to
deliver appraisals other than MAI appraisals in connection therewith.
(ii) Americold and Joint Venture will effect the JV Mandatory
Prepayment as soon as permitted under the financial covenants of the
Mortgage Indenture and the Senior Subordinated Indenture.
(iii) Promptly (and in any event on or before November 17,
1997) after the date of this Agreement, Americold shall commence the
Series B Tender and the Senior Subordinated Tender. Upon consummation
of the Series B Tender, Americold shall provide to Agent confirmation
of the results thereof. Americold shall promptly after consummation of
the Series B Tender seek to obtain the release of Properties which are
at such time encumbered under the Mortgage Indenture to the extent
permitted as a result of such Series B Tender, provided that nothing
herein shall require Americold to deliver appraisals other than MAI
appraisals in connection therewith
(iv) In the event any Series B Notes remain outstanding upon
consummation of the Series B Tender, Americold shall promptly notify
the remaining holders of the Series B Notes that the outstanding Series
B Notes shall be redeemed on March 1, 1998 or earlier, if permitted.
<PAGE>
Americold shall promptly after all Series A Notes nd Series B Notes
have been redeemed or surrendered for cancellation obtain the release
of all Properties subject to the lien of the Mortgage Indenture.
Section 5.12. Additional Security; Mortgages.
Each Borrower will grant to the Lender a first priority
security interest in and Mortgage on each Property promptly after such Property
is released from the Lien of the Mortgage Indenture or any of the $34 Million
Credit Documents promptly after release of such Property therefrom, and, in
connection therewith, each Borrower shall comply with the Mortgage Closing
Conditions; provided, however, that nothing in this sentence shall require
Americold to obtain appraisals other than MAI appraisals or, except during any
period that a Default shall have occurred and be continuing, to incur any
material costs that would be duplicated or would be unnecessary in connection
with a secured refinancing of the Loans, it being understood that title
commitments will be obtained and sought to be held open for a one year period.
If requested by the Agent or any Lender, each Borrower shall deliver to Lender
real estate appraisals satisfying the requirement set forth in 12 C.F.R., Part
34-Subpart C, or any successor or similar statute, rule, regulation, guideline
or order (any such appraisal a "Required Appraisal"), in connection with any
Property, in form or substance satisfactory to Lender.
ARTICLE VI.
NEGATIVE COVENANTS
Each Borrower hereby covenants and agrees that, without prior
written consent of the Lender:
Section 6.1. Indebtedness67.
(a)......Each Borrower will not, and will cause its
Subsidiaries not to, contract, create, incur, assume or permit to exist any
Indebtedness, except:
(i) Indebtedness arising under this Credit Agreement and the
other Loan Documents or the Mortgages, if any;
(ii) Existing Indebtedness (provided that the Indebtedness
under the $34 Million Credit Documents shall be repaid in full on or
before March 1, 1998 and shall not, after such date, constitute
Existing Indebtedness except to the extent the repayment hereof has
been guaranteed under a Parent Guarantee in the amount of such
Indebtedness); and
(iii) purchase money Indebtedness incurred after the Closing
Date by Borrower to acquire capital assets so long as (a) such
Indebtedness is incurred within 180 days of the date of acquisition of
such asset, (b) the aggregate amount of all such Indebtedness
outstanding at any time shall not exceed $75 million, (c) after giving
effect thereto, there shall not exist any Default or Event of Default,
(d) Borrower has complied with the provisions of Section 6.1(b) with
respect to such Indebtedness and (e) the principal amount of any such
Indebtedness shall not exceed 80% of the purchase price of the asset or
assets acquired with the proceeds of such Indebtedness; and
<PAGE>
(iv) Indebtedness in favor of Vornado or Crescent which
contains the terms of subordination set forth on Exhibit G attached
hereto which (a) provides for no mandatory payment of principal or
installment thereof on or prior to November 15, 1999 and (b) does not
provide for or permit the payment of any cash interest except to the
extent that such cash interest may be paid as a Distribution under
Section 6.11.
(b)......Each Borrower hereby grants to Goldman Sachs Mortgage
Company a right of first offer with respect to Indebtedness incurred under
Section 6.1(a)(iii). No Borrower shall incur any such Indebtedness unless
Borrower shall have first provided Goldman Sachs Mortgage Company with written
notice (each such notice, a "Notice") of its intention to incur Indebtedness and
the details of such Indebtedness, and Goldman Sachs Mortgage Company shall have
declined (or be deemed to have declined) to offer to provide or to have an
Affiliate offer to provide financing. Goldman Sachs Mortgage Company shall be
deemed to have so declined if it shall expressly decline in writing to offer to
provide such financing or fails to offer to provide such financing within five
Business Days after being provided such terms and details. If Goldman Sachs
Mortgage Company shall decline (or be deemed to have declined to offer to
provide such financing), each Borrower shall be able to incur such Indebtedness
at any time within 90 days after the date of such Notice. If Goldman Sachs
Mortgage Company or its Affiliate shall have offered to provide such financing
and Borrowers shall not have accepted such offer, each Borrower shall be
prohibited for a period of 180 days after the date of such Notice from incurring
any such Indebtedness having, in the reasonable discretion of the Borrowers,
terms which are worse for Borrowers than those offered by Goldman Sachs Mortgage
Company or such Affiliate. If such proposed Indebtedness is not incurred by
Borrowers within such 180 day period, the provisions of this Section 6.1(b)
shall apply to any incurrence of such Indebtedness. The failure (or deemed
failure) by Goldman Sachs Mortgage Company or such Affiliate to offer to provide
any particular financing under this Section 6.1(b) shall not prevent the
application of this Section 6.1(b) to any other incurrence of Indebtedness
proposed to be incurred under Section 6.1(a)(iii).
Section 6.2. Liens.
Each Borrower will not, and will cause its Subsidiaries not
to, (i) contract, create, incur, assume or permit to exist any Lien (other than
(a) Permitted Liens, (b) Liens existing on the date hereof, (c) solely with
respect to Indebtedness permitted by Section 6.1(a)(iii), Liens on the assets
acquired with the proceeds of such Indebtedness to secure such Indebtedness but
not any other assets and (d) solely with respect to the subordinated
Indebtedness permitted by Section 6.1(a)(iv), junior Liens on Properties of such
Borrower but only if such Properties are then subject to first priority Liens in
favor of the Agent to secure the Secured Obligations and such junior Liens which
are subject to the subordination provisions set forth on Exhibit G attached
hereto) with respect to any of their respective properties or assets of any kind
(whether real or personal, tangible or intangible), whether now owned or
hereafter acquired or (ii) sell any of their respective properties or assets
subject to an understanding or agreement, contingent or otherwise, to repurchase
such property or assets (including sales of accounts receivable or notes with
recourse to it).
Section 6.3. Nature of Business.
Each Borrower and its Subsidiaries will not alter the
character or conduct of their respective businesses from that conducted as of
the Closing Date.
<PAGE>
Section 6.4. Consolidation, Merger, Sale or Purchase of
Assets, Etc.
(a) Neither of the Borrowers nor their Subsidiaries will
dissolve, liquidate, or wind up their affairs, and (b) the Borrowers will not,
and the Borrowers will cause their Subsidiaries not to, enter into any
transaction of merger or consolidation (other than the merger contemplated by
the Merger Agreement to be consummated on or prior to the Closing Date), or sell
or otherwise dispose of all or any part of their Properties, lease or otherwise
acquire (in a single transaction or a series of related transactions) all or any
part of the property or assets of any Person (other than Acquisitions not in
excess of $75,000,000 in the aggregate (including in such computation
Acquisitions permitted under Section 6.5)); provided, that nothing in this
Section 6.4 shall prevent the sale of (i) Properties located at Burbank,
California and Watertown, Massachusetts, (ii) inventory in the ordinary course
of business, or (iii) the sale of equipment deemed obsolete and other
miscellaneous property sales so long as the gross sales proceeds of such sales
of obsolete equipment and other miscellaneous property do not exceed $500,000 in
the aggregate during any consecutive six month period.
Section 6.5. Advances, Investments and Loans.
Each Borrower will not, and each Borrower will cause its
Subsidiaries not to, lend money or make advances to any Person, or purchase or
acquire any stock, obligations or securities of, or any other interest in, or
make any capital contribution to any Person other than (i) Acquisitions not in
excess of $75,000,000 in the aggregate (including in such computation
Acquisitions permitted under Section 6.4), and (ii) Permitted Investments and
(iii) the merger pursuant to the Merger Agreement.
Section 6.6. Transactions with Affiliates.
Each Borrower will not enter into, and each Borrower will
cause its Subsidiaries to not enter into, any transaction or series of
transactions with any Affiliate other than on terms and conditions substantially
as favorable to such Borrower or its Subsidiaries, as the case may be, as would
be obtainable by any of them in a comparable arm's-length transaction with a
Person other than an Affiliate; provided, however, that nothing in this Section
6.6 shall prevent Borrowers from incurring Indebtedness permitted by Section
6.1(a)(iv).
Section 6.7. Operating Lease Obligations.
Each Borrower will not enter into, assume or permit to exist,
and each Borrower will cause its Subsidiaries to not enter into, assume or
permit to exist, any obligations for the payment of rent for any property (real,
personal or mixed, tangible or intangible) under leases, subleases or similar
arrangements as lessee except in the ordinary course of business under leases
that provide for annual rentals not in excess of $12,500,000 per year in the
aggregate under all such leases, subleases or similar arrangements.
<PAGE>
Section 6.8. Sale and Leaseback.
Each Borrower will not enter into, and each Borrower will
cause its Subsidiaries to not enter into, any arrangement pursuant to which it
will lease back, as lessee, any property (real, personal or mixed, tangible or
intangible) previously owned by any of them and sold or otherwise transferred or
disposed of, directly or indirectly, to the owner-lessor of such property other
than those arrangements the Borrowers have presently entered into prior to the
Closing Date and which are listed on Schedule 6.8.
Section 6.9. Governing Documents.
Each Borrower will not cause or permit, and each Borrower will
cause its Subsidiaries to not cause or permit, any amendment, modification,
supplement, waiver or termination of any provisions of its respective
organizational instruments, or other governing document, in a manner that would
impair or limit its ability to satisfy its obligations hereunder and under the
other Loan Documents, including, specifically but without limitation, the
obligations referred to in Sections 5.7 and 6.3 hereof.
Section 6.10. ERISA.
Each Borrower will not and will cause its Subsidiaries not to
take any action which will result in a material violation of ERISA.
<PAGE>
Section 6.11. Distributions; Payment on Subordinated
Indebtedness.
Each Borrower will not, and will not permit any of its
Subsidiaries to (i) declare or pay any dividends (other than dividends payable
solely in capital stock of such Person) or return any capital to, its
stockholders or authorize or make any other distribution payment or delivery of
property or cash to its stockholders as such, or redeem, retire, purchase or
otherwise acquire, directly or indirectly, for a consideration, any shares of
any class of its capital stock now or hereafter outstanding (or any warrants for
or options or stock appreciation rights in respect of any of such shares), or
set aside any funds for any of the foregoing purposes, or permit any of its
Subsidiaries to purchase or otherwise acquire for consideration any shares of
any class of the capital stock of a Borrower or any other Subsidiary, as the
case may be, now or hereafter outstanding (or any options or warrants or stock
appreciation rights issued by such Person with respect to its capital stock), or
(ii) pay any interest on subordinated Indebtedness permitted by Section
6.1(a)(iv) (payments under clauses (i) or (ii) being herein called a
"Distribution"); provided, however, that (x) any Subsidiary of Americold may pay
dividends to Americold, (y) Americold may pay dividends to Joint Venture solely
for the purpose of enabling the Joint Venture to pay operating expenses and to
pay the Secured Obligations, (z) in addition to payments permitted under clauses
(x) and (y), Americold may pay interest on any such permitted subordinated
Indebtedness and cash dividends if (i) prior to and after giving effect to such
payment no Default shall have occurred and be continuing, (ii) the aggregate
amount of such payments from and after the date hereof shall not exceed 100% of
the Adjusted Consolidated Net Income of Americold accrued during the period
(treated as one accounting period) from November 1, 1997 to the end of the most
recent fiscal quarter ending at least 45 days prior to the date of such payment,
and (iii) such payments may only be made once per calendar quarter and only if
Americold shall have delivered to Agent an Officer's Certificate certifying that
the conditions set forth in this Section 6.11 have been complied with and
providing the computations demonstrating compliance with this Section 6.11.
Section 6.12. Total Indebtedness to Total Capitalization.
Americold shall not permit the ratio of (x) the sum of the
outstanding principal amount of the JV Loan plus the aggregate principal amount
of Indebtedness of Americold and its Subsidiaries to (y) the sum of the amount
set forth in clause (x) plus Economic Net Worth of Americold and its
Subsidiaries to be greater than (a) at any time prior to March 1, 1998, 0.666 to
1.000 and (b) at any time thereafter, 0.600 to 1.000; provided, however, that
any portion of Indebtedness that is guaranteed by a Parent Guarantee shall not
be included in the computation of Indebtedness under this Section 6.12.
"Economic Net Worth" means (x) cash capital contributions to Americold from and
after the date of the merger under the Merger Agreement less (y) Distributions
made after the date hereof plus (or if a deficit minus) (z) cumulative Adjusted
Consolidated Net Income of Americold, computed in accordance with GAAP, accrued
during the period (treated as one accounting period) from November 1, 1997 to
the date of computation.
ARTICLE VII.
DEFAULTS
Section 7.1. Events of Default.
An Event of Default shall exist upon the occurrence of any of
the following specified events (each an "Event of Default"):
<PAGE>
(a)......if a Borrower shall (i) default in the payment when
due of any principal owing hereunder or under any of its Notes (including any
prepayment required hereunder) or (ii) default, and such default shall continue
for three (3) or more days thereafter, in the payment when due of any interest,
fees or other amounts owing hereunder, under such Notes, under any of the other
Loan Documents or in connection herewith;
(b)......if either Borrower transfers or encumbers all or any
portion of the Collateral except pursuant to the Pledge Agreement, the Security
Agreements or the Mortgages;
(c)......if any representation or warranty made by either
Borrower or any Parent Guarantor herein or in any other Loan Document shall be
false or misleading in any material respect on or as of the date the
representation or warranty was made;
(d)......if either Borrower or their Subsidiaries (or when the
Parent Guaranty shall be in effect either Parent Guarantor) shall make an
assignment for the benefit of creditors, or if either Borrower or any of their
Subsidiaries shall generally not be paying its debts as they become due;
(e)......if a receiver, liquidator or trustee shall be
appointed for either Borrower or any of their Subsidiaries (or when the Parent
Guaranty shall be in effect either Parent Guarantor), or if either Borrower or
any of their Subsidiaries (or when the Parent Guaranty shall be in effect either
Parent Guarantor) shall be adjudicated a bankrupt or insolvent, or if any
petition for bankruptcy, reorganization or arrangement pursuant to federal
bankruptcy law, or any similar federal or state law, shall be filed by or
against, consented to, or acquiesced in by, either Borrower or any of their
Subsidiaries (or when the Parent Guaranty shall be in effect either Parent
Guarantor) or if any proceeding for the dissolution or liquidation of Borrower
or any of their Subsidiaries (or when the Parent Guaranty shall be in effect
either Parent Guarantor) shall be instituted; provided, however, if such
appointment, adjudication, petition or proceeding was involuntary and not
consented to by either Borrower or any of Borrowers' Subsidiaries (or when the
Parent Guaranty shall be in effect either Parent Guarantor), as applicable, upon
the same not being discharged, stayed or dismissed within sixty (60) days;
(f)......[Intentionally omitted];
(g)......if either Borrower breaches any of its covenants
contained in Section 3.5.1, Sections 5.6, 5.11 or 5.12 or Article VI hereof;
(h)......if an Event of Default as defined or described in any
of the other Loan Documents has occurred and is continuing;
(i)......if any Loan Document shall fail to be in full force
and effect or to give the Lender the liens, rights, powers and privileges
purported to be created thereby for ten (10) days after the notice to the
Borrowers from the Lender or any Borrower or ASC (or when the Parent Guaranty
shall be in effect either Parent Guarantor) shall so assert;
(j)......if either Borrower shall continue to be in default
under any of the other terms, covenants or conditions of this Credit Agreement
or any other Loan Document not specified in any other subsection of this Section
7.1 for ten (10) days after notice to such Borrower from the Lender;
(k)......Either Borrower or any of their Subsidiaries shall
with respect to Indebtedness having a principal amount in excess of $15,000,000
(i) default in any payment (beyond the applicable grace period with respect
<PAGE>
thereto, if any) with respect to any such Indebtedness, or (ii) default in the
observance or performance of any agreement or condition relating to any such
Indebtedness or contained in any instrument or agreement evidencing, or relating
thereto, or any other event or condition shall occur or condition exist, the
effect of which default, in the case of either (i) or (ii), or other event or
condition would permit the holder or holders of such Indebtedness (or trustee or
agent on behalf of such holders) to cause (determined without regard to whether
any notice or lapse of time is required) any such Indebtedness to become due
prior to its stated maturity;
(l)......one or more final judgments or decrees shall be
entered against either Borrower or any of their Subsidiaries involving a
liability for which the creditor has recourse against any such Person of
$250,000 or more in any instance, or $1,000,000 or more in the aggregate for all
such judgments and decrees collectively (not paid or fully covered by insurance
provided by a carrier who has acknowledged coverage) and any such judgments or
decrees shall not have been vacated, discharged, paid or stayed or bonded
pending appeal within the time permitted to appeal therefrom; or
(m)......there shall occur any event which has had or will
impair the ability of either Borrower to pay the Loans when due and such event
has continued for a period of ten (10) days or, if Borrowers shall have provided
to Agent evidence of an ability to remedy the results of such event, a
reasonable period of time to permit Borrowers to implement such remedy
Section 7.2. Remedies.
Upon the occurrence of an Event of Default, the Lender may, by
written notice to each Borrower, take any of the following actions without
prejudice to the rights of the Lender to enforce its claims against each
Borrower, except as may otherwise be specifically provided for herein:
(a)......Acceleration of Loan. Declare the unpaid principal of
and any accrued interest in respect of the Loans and the Notes to be due,
whereupon the same shall be immediately due and payable without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
each Borrower; provided, however, that, notwithstanding the foregoing, if an
Event of Default specified in Section 7.1(d) or (e) shall occur, then the Notes
and the Loans shall immediately become due and payable without the giving of any
notice or other action by the Lender;
(b)......Enforcement of Rights. Enforce any and all Liens and
security interests in favor of the Lender in respect of the Notes and the Loans
and any other amounts due, including, without limitation, all rights and
interests created and existing under the Loan Documents and all rights of
set-off;
(c)......Remedies with Respect to the Collateral. Exercise any
of the following rights with respect to the Collateral:
(i) foreclose upon all or any portion of the Collateral or
otherwise enforce the security interest in favor of the Lender in any
manner permitted by law or provided for in this Credit Agreement or in
Loan Documents;
(ii) recover from each Borrower all costs and expenses,
including, without limitation, reasonable attorneys' fees, incurred or
paid by the Lender in exercising any right, power or remedy provided by
this Credit Agreement or any other Loan Document or by law; and
<PAGE>
(iii) apply the proceeds of any exercise of remedies by the
Lender with respect to any Collateral pursuant to the foregoing
provisions to payment of the following obligations, and the Lender may
account for the purchase price of any sale by crediting the sales price
against: (A) first, the expenses of the liquidation, sale or
collection, the costs of any action and any other costs or expenses for
which each Borrower is obligated; and (B) then, all other Secured
Obligations of such Borrower, including, without limitation, all
amounts then due, owing and unpaid for principal, interest and other
amounts under this Credit Agreement and the other Loan Documents in
such order and proportions as the Lender in its discretion may choose;
and
(d)......Other Remedies. Exercise any other right or remedy
available to the Lender under applicable law or in equity.
ARTICLE VIII.
AMERICOLD AND ASC GUARANTY OF JV OBLIGATIONS
Section 8.1. The Guaranty.
Subject to Section 8.9, Americold and ASC (for purposes of
this Article VIII only, Americold is herein referred to as a "Guarantor") hereby
jointly and severally guarantee to the Lender the payment by Joint Venture when
due (whether at maturity, as a mandatory prepayment, by acceleration or
otherwise) of all amounts owing under this Credit Agreement, the Note and any
other Loan Documents owing by Joint Venture, including, specifically but without
limitation, all principal, interest and other amounts now or hereafter owing in
connection with the JV Loan and/or the Note (hereinafter referred to
collectively as "JV Obligations"). This guaranty is a guaranty of payment and
not of collection.
Section 8.2. Obligations Independent.
The obligations of each Guarantor hereunder are independent of
the obligations of Joint Venture, and a separate action or actions may be
brought and prosecuted against each Guarantor, regardless of whether action is
brought against Joint Venture or whether Joint Venture is joined in any such
action or actions. Each Guarantor hereby waives the benefit of any statute of
limitations affecting its liability hereunder.
Section 8.3. Obligations Unconditional.
Each Guarantor agrees that its obligations under this Article
VIII are absolute and unconditional, irrespective of the value, genuineness,
validity, regularity or enforceability of any of the Loan Documents, or any
other agreement or instrument referred to therein, or any substitution, release
or exchange of any other guaranty of or security for the JV Obligations, and, to
the fullest extent permitted by applicable law, irrespective of any other
circumstance whatsoever (including, without limitation, personal defenses of the
Joint Venture) which might otherwise constitute a legal or equitable discharge
or defense of a surety, guarantor or co-obligor, it being the intent of this
Section 8.3 that the obligations of each Guarantor hereunder shall be absolute
and unconditional under any and all circumstances. Without limiting the
generality of the foregoing, it is agreed that the occurrence of any one or more
of the following shall not alter or impair the liability of each Guarantor
hereunder which shall remain absolute and unconditional as described above:
<PAGE>
(a)......at any time or from time to time, without notice to
the Guarantors, the time for any performance of or compliance with the JV
Obligations may be extended, or such performance or compliance may be waived;
(b)......any of the acts required or contemplated in any of
the provisions of any of the Loan Documents or any other agreement or instrument
referred therein may be done or omitted;
(c)......the maturity of any of the JV Obligations may be
accelerated, or the maturity date of the Note executed by Joint Venture may be
extended, whether in accordance with Section 2.2.1 or otherwise, or any of the
JV Obligations may be modified, supplemented or amended in any respect, or any
right under any of the Loan Documents or any other agreement or instrument
referred to therein may be waived or extended or any other guaranty of any of
the JV Obligations or any security therefor may be released or exchanged in
whole or in part or otherwise dealt with;
(d)......the Lender receives and holds security for the
payment of the JV Obligations or any other indebtedness of Joint Venture to the
Lender and exchanges, enforces, waives, releases, fails to perfect, sells, or
otherwise disposes of any such security;
(e)......the Lender applies such security and directs the
order or manner of sale thereof as the Lender in its discretion may determine;
(f)......the Lender releases or substitutes any one or more of
any endorsers, pledgors or guarantors of the JV Obligations or any other
indebtedness of Joint Venture to the Lender;
(g)......any Lien granted to, or in favor of, the Lender as
security for any of the JV Obligations (or as security for the guaranty thereof
by each Guarantor) shall fail to attach or be perfected;
(h)......any of the JV Obligations or any Lien granted or
purported to be granted in respect thereof shall be determined to be void or
voidable or shall be subordinated to the claims of any Person; or
(i)......there shall occur any insolvency, bankruptcy,
reorganization or dissolution of Joint Venture or any other Person.
With respect to its obligations hereunder, each Guarantor
hereby expressly waives diligence, presentment, demand of payment, protest and
all notices whatsoever, and any requirement that the Lender exhaust any right,
power or remedy or proceed against any Person under any of the Loan Documents or
any other agreement or instrument referred to therein, or against any other
Person under any other guaranty of, or security for, or obligation relating to,
any of the JV Obligations.
Section 8.4. Reinstatement67.
The obligations of each Guarantor under this Article VIII
shall be automatically reinstated if and to the extent that for any reason any
payment or performance by or on behalf of any Person in respect of the JV
Obligations is rescinded or must be otherwise restored by any holder of any of
the JV Obligations, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise, and each Guarantor agrees that it will pay to the
Lender on demand all reasonable out-of-pocket costs and expenses (including,
without limitation, fees of counsel) incurred by the Lender in connection with
such rescission or restoration, including any such costs and expenses incurred
in defending against any claim alleging that such payment constituted a
<PAGE>
preference, fraudulent transfer or similar payment under any bankruptcy,
insolvency or similar law.
Section 8.5. Certain Additional Waivers.
Without limiting the generality of the provisions of any other
provision of this Article VIII, each Guarantor hereby specifically waives (a)
promptness, diligence, notice of acceptance and any other notice with respect to
any of the JV Obligations or any other obligations under the Loan Documents or
this Article VIII, (b) any requirement that the Lender or any other Person
protect, secure or insure any Lien or any property subject thereto or exhaust
any right or take any action against Joint Venture or any other Person or any
collateral or undertake any marshaling of assets, (c) any right to direct the
order of enforcement of remedies, (d) any defense arising by reason of any claim
or defense based upon an election of remedies by the Lender which in any manner
impairs, reduces, releases or otherwise adversely affects its subrogation,
contribution or reimbursement rights or other rights to proceed against the
Joint Venture or any other Person or any collateral, (e) any duty on the part of
the Lender to disclose to each Guarantor any matter, fact or thing relating to
the business, operation or condition of the Joint Venture or any other party to
any of the Loan Documents and their assets now known or hereafter known by the
Lender, and (f) all presentments, demands for performance, notices of
nonperformance, protests, notices of protest, notices of dishonor, and notices
of acceptance of the guaranty provided for in this Article VIII and of the
existence, creation, or incurrence of new or additional Indebtedness.
Section 8.6. Subordination.
Any obligations of the Joint Venture to a Guarantor, now or
hereafter existing, are hereby subordinated to the JV Obligations. Such
obligations of Joint Venture to such Guarantor shall, after the occurrence of
any Event of Default, be enforced and performance received by such Guarantor and
the proceeds thereof shall be paid over to the Lender on account of the JV
Obligations. In addition, each Guarantor hereby agrees not to exercise any
rights it may have for subrogation, indemnity, reimbursement or contribution
against Joint Venture for amounts paid by such Guarantor pursuant to this
Article VIII until such time as all JV Obligations have been indefeasibly paid
in full in cash.
Section 8.7. Remedies.
Each Guarantor agrees that, as between such Guarantor, on the
one hand, and the Lender, on the other hand, the JV Obligations may be declared
to be forthwith due and payable as provided in Section 7.1 hereof (and shall be
deemed to have become automatically due and payable in the circumstances
provided in said Section 7.1) for purposes of this Article VIII, notwithstanding
any stay, injunction or other prohibition preventing such declaration (or such
JV Obligations from becoming automatically due and payable) as against any other
Person and that, in the event of such declaration (or such JV Obligations being
deemed to have become automatically due and payable), such JV Obligations
(whether or not due and payable by any other Person) shall forthwith become due
and payable by each Guarantor for purposes of this Article VIII.
Section 8.8. Continuing Guaranty.
The guaranty in this Article VIII is a continuing guaranty and
shall apply to all JV Obligations whenever arising.
<PAGE>
Section 8.9. Limitation on Effective Date of Guaranty
Under Article VIII.
This guaranty provided in this Article VIII, notwithstanding
anything to the contrary contained in this Article VIII, shall be effective only
on the first date that such guaranty can become effective without conflicting
with the financial covenants of the Mortgage Indenture and the Senior
Subordinated Indenture but if a portion of such guaranty may so become effective
on any date, such portion such become effective from and after such date.
ARTICLE IX.
ASC GUARANTY OF AMERICOLD OBLIGATIONS
Section 9.1. The Guaranty.
ASC (for purposes of this Article IX only, references to
"Guarantor" refer to ASC and not to any other Person) hereby guarantees to the
Lender the payment by Americold when due (whether at maturity, as a mandatory
prepayment, by acceleration or otherwise) of all amounts owing under this Credit
Agreement, the Note and any other Loan Documents owing by Americold, including,
specifically but without limitation, all principal, interest and other amounts
now or hereafter owing in connection with the Americold Loans and/or the Note
(hereinafter referred to collectively as "Americold Obligations"). This guaranty
is a guaranty of payment and not of collection.
Section 9.2. Obligations Independent.
The obligations of the Guarantor hereunder are independent of
the obligations of Americold, and a separate action or actions may be brought
and prosecuted against the Guarantor, regardless of whether action is brought
against Americold or whether Americold is joined in any such action or actions.
The Guarantor hereby waives the benefit of any statute of limitations affecting
its liability hereunder.
Section 9.3. Obligations Unconditional.
The Guarantor agrees that its obligations under this Article
IX are absolute and unconditional, irrespective of the value, genuineness,
validity, regularity or enforceability of any of the Loan Documents, or any
other agreement or instrument referred to therein, or any substitution, release
or exchange of any other guaranty of or security for the Americold Obligations,
and, to the fullest extent permitted by applicable law, irrespective of any
other circumstance whatsoever (including, without limitation, personal defenses
of Americold) which might otherwise constitute a legal or equitable discharge or
defense of a surety, guarantor or co-obligor, it being the intent of this
Section 9.3 that the obligations of the Guarantor hereunder shall be absolute
and unconditional under any and all circumstances. Without limiting the
generality of the foregoing, it is agreed that the occurrence of any one or more
of the following shall not alter or impair the liability of Guarantor hereunder
which shall remain absolute and unconditional as described above:
(a)......at any time or from time to time, without notice to
the Guarantor, the time for any performance of or compliance with the Americold
Obligations may be extended, or such performance or compliance may be waived;
<PAGE>
(b)......any of the acts required or contemplated in any of
the provisions of any of the Loan Documents or any other agreement or instrument
referred therein may be done or omitted;
(c)......the maturity of any of the Americold Obligations may
be accelerated, or the maturity date of the Note executed by Americold may be
extended, whether in accordance with Section 2.2.1 or otherwise, or any of the
Americold Obligations may be modified, supplemented or amended in any respect,
or any right under any of the Loan Documents or any other agreement or
instrument referred to therein may be waived or extended or any other guaranty
of any of the Americold Obligations or any security therefor may be released or
exchanged in whole or in part or otherwise dealt with;
(d)......the Lender receives and holds security for the
payment of the Americold Obligations or any other indebtedness of Americold to
the Lender and exchanges, enforces, waives, releases, fails to perfect, sells,
or otherwise disposes of any such security;
(e)......the Lender applies such security and directs the
order or manner of sale thereof as the Lender in its discretion may determine;
(f)......the Lender releases or substitutes any one or more of
any endorsers, pledgors or guarantors of the Americold Obligations or any other
indebtedness of Americold to the Lender;
(g)......any Lien granted to, or in favor of, the Lender as
security for any of the Americold Obligations (or as security for the guaranty
thereof by the Guarantor) shall fail to attach or be perfected;
(h)......any of the Americold Obligations or any Lien granted
or purported to be granted in respect thereof shall be determined to be void or
voidable or shall be subordinated to the claims of any Person; or
(i)......there shall occur any insolvency, bankruptcy,
reorganization or dissolution of Americold or any other Person.
With respect to its obligations hereunder, the Guarantor
hereby expressly waives diligence, presentment, demand of payment, protest and
all notices whatsoever, and any requirement that the Lender exhaust any right,
power or remedy or proceed against any Person under any of the Loan Documents or
any other agreement or instrument referred to therein, or against any other
Person under any other guaranty of, or security for, or obligation relating to,
any of the Americold Obligations.
Section 9.4. Reinstatement.
The obligations of the Guarantor under this Article IX shall
be automatically reinstated if and to the extent that for any reason any payment
or performance by or on behalf of any Person in respect of the Americold
Obligations is rescinded or must be otherwise restored by any holder of any of
the Americold Obligations, whether as a result of any proceedings in bankruptcy
or reorganization or otherwise, and the Guarantor agrees that it will pay to the
Lender on demand all reasonable out-of-pocket costs and expenses (including,
without limitation, fees of counsel) incurred by the Lender in connection with
such rescission or restoration, including any such costs and expenses incurred
in defending against any claim alleging that such payment constituted a
preference, fraudulent transfer or similar payment under any bankruptcy,
insolvency or similar law.
<PAGE>
Section 9.5. Certain Additional Waivers.
Without limiting the generality of the provisions of any other
provision of this Article IX, the Guarantor hereby specifically waives (a)
promptness, diligence, notice of acceptance and any other notice with respect to
any of the Americold Obligations or any other obligations under the Loan
Documents or this Article IX, (b) any requirement that the Lender or any other
Person protect, secure or insure any Lien or any property subject thereto or
exhaust any right or take any action against Americold or any other Person or
any collateral or undertake any marshaling of assets, (c) any right to direct
the order of enforcement of remedies, (d) any defense arising by reason of any
claim or defense based upon an election of remedies by the Lender which in any
manner impairs, reduces, releases or otherwise adversely affects its
subrogation, contribution or reimbursement rights or other rights to proceed
against Americold or any other Person or any collateral, (e) any duty on the
part of the Lender to disclose to the Guarantor any matter, fact or thing
relating to the business, operation or condition of Americold or any other party
to any of the Loan Documents and their assets now known or hereafter known by
the Lender, and (f) all presentments, demands for performance, notices of
nonperformance, protests, notices of protest, notices of dishonor, and notices
of acceptance of the guaranty provided for in this Article IX and of the
existence, creation, or incurrence of new or additional Indebtedness.
Section 9.6. Subordination.
Any obligations of Americold to the Guarantor, now or
hereafter existing, are hereby subordinated to the Americold Obligations. Such
obligations of Americold to the Guarantor shall, after the occurrence of any
Event of Default, be enforced and performance received by the Guarantor and the
proceeds thereof shall be paid over to the Lender on account of the Americold
Obligations. In addition, the Guarantor hereby agrees not to exercise any rights
it may have for subrogation, indemnity, reimbursement or contribution against
Americold for amounts paid by such Guarantor pursuant to this Article IX until
such time as all Americold Obligations have been indefeasibly paid in full in
cash.
Section 9.7. Remedies.
The Guarantor agrees that, as between such Guarantor, on the
one hand, and the Lender, on the other hand, the Americold Obligations may be
declared to be forthwith due and payable as provided in Section 7.1 hereof (and
shall be deemed to have become automatically due and payable in the
circumstances provided in said Section 7.1) for purposes of this Article IX,
notwithstanding any stay, injunction or other prohibition preventing such
declaration (or such Americold Obligations from becoming automatically due and
payable) as against any other Person and that, in the event of such declaration
(or such Americold Obligations being deemed to have become automatically due and
payable), such Americold Obligations (whether or not due and payable by any
other Person) shall forthwith become due and payable by the Guarantor for
purposes of this Article IX.
Section 9.8. Continuing Guaranty.
The guaranty in this Article IX is a continuing guaranty and
shall apply to all Americold Obligations whenever arising.
<PAGE>
ARTICLE X.
MISCELLANEOUS
Section 10.1. Survival.
This Credit Agreement and all covenants, agreements,
indemnities, representations and warranties made herein and in the certificates
delivered pursuant hereto shall survive the making by the Lender of the Loans
and the execution and delivery to the Lender of the Notes, and shall continue in
full force and effect so long as all or any of the Secured Obligations is
outstanding and unpaid or the Lender has any obligation to provide financing
hereunder. Whenever in this Credit Agreement any Person is referred to, such
reference shall be deemed to include the legal representatives, successors and
assigns of such Person (provided that the foregoing shall not be deemed to
permit any transfer of any ownership interest that is otherwise prohibited
hereunder). All covenants, promises and agreements in this Credit Agreement
contained, by or on behalf of each Borrower or ASC shall inure to the benefit of
the successors and assigns of the Lender.
Section 10.2. Governing Law; Consent to Jurisdiction.
(a)......THIS CREDIT AGREEMENT WAS NEGOTIATED IN THE STATE OF
NEW YORK, AND MADE BY THE LENDER AND ACCEPTED BY EACH BORROWER AND ASC IN THE
STATE OF NEW YORK, AND THE PROCEEDS OF THE NOTES DELIVERED PURSUANT HERETO WERE
DISBURSED FROM THE STATE OF NEW YORK, WHICH STATE THE PARTIES AGREE HAS A
SUBSTANTIAL RELATIONSHIP TO THE PARTIES AND TO THE UNDERLYING TRANSACTION
EMBODIED HEREBY, AND IN ALL RESPECTS, INCLUDING MATTERS OF CONSTRUCTION,
VALIDITY AND PERFORMANCE, THIS CREDIT AGREEMENT AND THE OBLIGATIONS ARISING
HEREUNDER OR UNDER ANY OTHER LOAN DOCUMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS
MADE AND PERFORMED IN SUCH STATE AND ANY APPLICABLE LAW OF THE UNITED STATES OF
AMERICA. TO THE FULLEST EXTENT PERMITTED BY LAW, EACH BORROWER AND ASC HEREBY
UNCONDITIONALLY AND IRREVOCABLY WAIVE ANY CLAIM TO ASSERT THAT THE LAW OF ANY
OTHER JURISDICTION GOVERNS THIS CREDIT AGREEMENT, THE NOTES AND ANY OTHER LOAN
DOCUMENT, AND THIS CREDIT AGREEMENT AND THE NOTES SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK PURSUANT TO ss.
5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.
(b)......ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST THE
LENDER OR ANY BORROWER OR ASC ARISING OUT OF OR RELATING TO THIS CREDIT
AGREEMENT SHALL BE INSTITUTED IN ANY FEDERAL OR STATE COURT IN NEW YORK, NEW
YORK, PURSUANT TO ss. 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW, AND EACH
OF THE BORROWER AND ASC WAIVE ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE
TO THE LAYING OF VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING AND HEREBY
IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT IN ANY SUIT, ACTION OR
PROCEEDING. EACH BORROWER AND ASC DOES HEREBY DESIGNATE AND APPOINT VORNADO,
WITH OFFICES AT PARK 80 WEST PLAZA II, SADDLE BROOK, NEW JERSEY 07663, OR AT
SUCH OTHER OFFICE IN NEW YORK, NEW YORK, AS ITS AUTHORIZED AGENT TO ACCEPT AND
ACKNOWLEDGE ON ITS BEHALF SERVICE OF ANY AND ALL PROCESS WHICH MAY BE SERVED IN
<PAGE>
ANY SUCH SUIT, ACTION OR PROCEEDING IN ANY FEDERAL OR STATE COURT IN NEW YORK,
NEW YORK, AND AGREES THAT SERVICE OF PROCESS UPON SAID AGENT AT SAID ADDRESS AND
WRITTEN NOTICE OF SAID SERVICE OF BORROWER OR ASC, AS APPLICABLE, MAILED OR
DELIVERED TO SUCH BORROWER OR ASC IN THE MANNER PROVIDED HEREIN SHALL BE DEEMED
IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON SUCH BORROWER OR ASC IN ANY
SUCH SUIT, ACTION OR PROCEEDING IN THE STATE OF NEW YORK. EACH BORROWER AND ASC
EACH (I) SHALL GIVE PROMPT NOTICE TO THE AGENT ON BEHALF OF THE LENDER OF ANY
CHANGED ADDRESS OF ITS AUTHORIZED AGENT HEREUNDER, (II) MAY AT ANY TIME AND FROM
TIME TO TIME DESIGNATE A SUBSTITUTE AUTHORIZED AGENT WITH AN OFFICE IN NEW YORK,
NEW YORK (WHICH OFFICE SHALL BE DESIGNATED AS THE ADDRESS FOR SERVICE OF
PROCESS), AND (III) SHALL PROMPTLY DESIGNATE SUCH A SUBSTITUTE IF ITS AUTHORIZED
AGENT CEASES TO HAVE AN OFFICE IN NEW YORK, NEW YORK OR IS DISSOLVED WITHOUT
LEAVING A SUCCESSOR.
(c)......Each Borrower and ASC hereby irrevocably waive any
objection which it may now or hereafter have to the laying of venue of any of
the aforesaid actions or proceedings arising out of or in connection with this
Credit Agreement or any other Loan Document brought in the courts referred to in
subsection (b) hereof and hereby further irrevocably waives and agrees not to
plead or claim in any such court that any such action or proceeding brought in
any such court has been brought in an inconvenient forum.
Section 10.3. Modification, Waiver in Writing.
No modification, amendment, extension, discharge, termination
or waiver of any provision of this Credit Agreement, the Notes or any other Loan
Document, nor consent to any departure by any Borrower or ASC therefrom, shall
in any event be effective unless the same shall be in a writing signed by the
party against whom enforcement is sought, and then such waiver or consent shall
be effective only in the specific instance, and for the purpose, for which
given. Except as otherwise expressly provided herein, no notice to, or demand on
any Borrower or ASC shall entitle such Borrower or ASC to any other or future
notice or demand in the same, similar or other circumstances.
Section 10.4. Delay Not a Waiver.
Neither any failure nor any delay on the part of the Lender in
insisting upon strict performance of any term, condition, covenant or agreement,
or exercising any right, power, remedy or privilege hereunder, or under the
Notes or under any other Loan Document, or any other instrument given as
security therefor, shall operate as or constitute a waiver thereof, nor shall a
single or partial exercise thereof preclude any other future exercise, or the
exercise of any other right, power, remedy or privilege. In particular, and not
by way of limitation, by accepting payment after the due date of any amount
payable under this Credit Agreement, the Notes or any other Loan Document, the
Lender shall not be deemed to have waived any right either to require prompt
payment when due of all other amounts due under this Credit Agreement, the Notes
or the other Loan Documents, or to declare a default for failure to effect
prompt payment of any such other amount.
<PAGE>
Section 10.5. Notices.
All notices, consents, approvals and requests required or
permitted hereunder or under any other Loan Document shall be given in writing
and shall be effective for all purposes if hand delivered or sent by (a)
certified or registered United States mail, postage prepaid, or (b) expedited
prepaid delivery service, either commercial or United States Postal Service,
with proof of attempted delivery, addressed as follows (or at such other address
and person as shall be designated from time to time by any party hereto, as the
case may be, in a written notice to the other parties hereto in the manner
provided for in this Section):
If to the Lender:
Goldman Sachs Mortgage Company
85 Broad Street
New York, New York 10004
Attention: Mark J. Kogan
with a copy to:
Willkie Farr & Gallagher
153 E. 53rd Street
New York, New York 10022
Attention: Eugene A. Pinover, Esq.
If to Joint Venture, Americold or ASC:
Americold Corporation
7007 Southwest Cardinal Lane
Suite 135
Portland, Oregon 97224
Attention: Joel Smith, Chief Financial Officer
with a copy to:
Vornado Realty Trust
Park 80 West Plaza II
Saddle Brook, New Jersey 07663
Attention: President
Attention: Chief Financial Officer
with a copy to:
Sullivan & Cromwell
125 Broad Street
New York, New York
Attention: Janet Geldzahler, Esq.
<PAGE>
A notice shall be deemed to have been given: in the case of
hand delivery, at the time of delivery; in the case of registered or certified
mail when delivered or on the third Business Day after sent to the address set
forth above, postage prepaid, or, if earlier, upon the delivery (or refusal
thereof) thereof.
Section 10.6. Trial by Jury.
EACH BORROWER AND ASC HEREBY AGREE NOT TO ELECT A TRIAL BY
JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVES ANY RIGHT TO TRIAL BY
JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH
REGARD TO THE LOAN DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING
IN CONNECTION THEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN
KNOWINGLY AND VOLUNTARILY BY EACH BORROWER, AND IS INTENDED TO ENCOMPASS
INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY
JURY WOULD OTHERWISE ACCRUE. THE LENDER IS HEREBY AUTHORIZED TO FILE A COPY OF
THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY EACH
BORROWER AND ASC.
Section 10.7. Headings.
The Article and/or Section headings and the Table of Contents
in this Credit Agreement are included herein for convenience of reference only
and shall not constitute a part of this Credit Agreement for any other purpose.
Section 10.8. Severability67.
Wherever possible, each provision of this Credit Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Credit Agreement shall be
prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Credit Agreement.
Section 10.9. Preferences.
The Lender shall have the continuing and exclusive right to
apply or reverse and reapply any and all payments by any Borrower or ASC to any
portion of the obligations of such Borrower or ASC hereunder. To the extent
Borrower or ASC makes a payment or payments to the Lender, which payment or
proceeds or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside or required to be repaid to a trustee,
receiver or any other party under any bankruptcy law, state or federal law,
common law or equitable cause, then, to the extent of such payment or proceeds
received, the obligations hereunder or part thereof intended to be satisfied
shall be revived and continue in full force and effect, as if such payment or
proceeds had not been received by the Lender. The foregoing is without
limitation of the rights in favor of the Lender set forth in Article VIII or
Article IX.
Section 10.10. Waiver of Notice.
None of the Borrowers or ASC shall be entitled to any notices
of any nature whatsoever from the Lender except with respect to matters for
which this Credit Agreement or the other Loan Documents specifically and
expressly provide for the giving of notice by the Lender to a Borrower or ASC
<PAGE>
and except with respect to matters for which any Borrower or ASC is not,
pursuant to applicable law, permitted to waive the giving of notice. Each
Borrower and ASC hereby expressly waive the right to receive any notice from the
Lender with respect to any matter for which this Credit Agreement or the other
Loan Documents do not specifically and expressly provide for the giving of
notice by the Lender to any Borrower or ASC.
Section 10.11. Remedies of Borrower and ASC.
In the event that a claim or adjudication is made that the
Lender has acted unreasonably or unreasonably delayed acting in any case where
by law or under this Credit Agreement or the other Loan Documents, the Lender
has an obligation to act reasonably or promptly, each Borrower and ASC agree
that neither the Lender, nor its agent, shall be liable for any monetary
damages, and such Borrower's or ASC's sole remedies shall be limited to
commencing an action seeking injunctive relief or declaratory judgment, except
in any case where it is determined that the Lender has acted with gross
negligence or willful misconduct. The parties hereto agree that any action or
proceeding to determine whether a Borrower or ASC has acted reasonably shall be
determined by an action seeking declaratory judgment.
Section 10.12. Expenses; Indemnity.
(a)......Each Borrower covenants and agrees to reimburse the
Lender upon receipt of written notice from the Lender for all reasonable
out-of-pocket costs and expenses (including reasonable attorneys' fees and
disbursements) incurred by or on behalf of the Lender in connection with (i) the
preparation, negotiation, execution and delivery of this Credit Agreement and
the other Loan Documents, and the consummation of the transactions contemplated
hereby and thereby; (ii) Borrowers' ongoing performance of and compliance with
Borrowers' respective agreements and covenants contained in this Credit
Agreement and the other Loan Documents on its respective part to be performed or
complied with after the Closing Date; (iii) the negotiation, preparation,
execution, delivery and administration of any consents, amendments (including
modifications pursuant to Section 10.33), waivers or other modifications to this
Credit Agreement and the other Loan Documents whether requested by either
Borrower or the Lender and any other documents or matters requested by the
Lender (whether or not any of the foregoing become effective); (iv) reasonable
fees and expenses of counsel for providing to the Lender all required legal
opinions; (v) enforcing or preserving any rights, in response to third party
claims or the prosecuting or defending of any action or proceeding or other
litigation, in each case against, under or affecting a Borrower, this Credit
Agreement, the other Loan Documents, the Properties or any other security given
for the Loans; and (vi) enforcing any obligations of or collecting any payments
due from a Borrower under this Credit Agreement, the other Loan Documents or
with respect to the Properties or in connection with any refinancing or
restructuring of the credit arrangements provided under this Credit Agreement in
the nature of a "work-out" or of any insolvency or bankruptcy proceedings;
provided, however, no Borrower shall be liable for the payment of any such costs
and expenses to the extent the same arise by reason of the gross negligence,
illegal acts, fraud or willful misconduct of the Lender.
(b)......Each Borrower shall indemnify and hold harmless the
Lender from and against any and all other liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, claims, costs, expenses and
disbursements of any kind or nature whatsoever (including the reasonable fees
and disbursements of counsel for the Lender in connection with any
investigative, administrative or judicial proceeding commenced or threatened,
whether or not the Lender shall be designated a party thereto), that may be
imposed on, incurred by, or asserted against the Lender in any manner relating
to or arising out of any breach by a Borrower of its obligations under, or any
material misrepresentation by a Borrower contained in this Credit Agreement or
<PAGE>
the other Loan Documents or with respect to any environmental matter related to
any Property; provided, however, a Borrower shall not be liable for the payment
of any such costs and expenses to the extent the same arise by reason of the
gross negligence, illegal acts, fraud or willful misconduct of the Lender.
Section 10.13. Exhibits and Schedules Incorporated.
The Exhibits and Schedules annexed hereto are hereby
incorporated herein as a part of this Credit Agreement with the same effect as
if set forth in the body hereof.
Section 10.14. Offsets, Counterclaims and Defenses.
Any assignee of the Lender's interest in and to this Credit
Agreement, the Notes and the other Loan Documents shall take the same free and
clear of all offsets, counterclaims or defenses which are unrelated to such
documents which a Borrower or ASC may otherwise have against any assignor of
such documents, and no such unrelated counterclaim or defense shall be
interposed or asserted by a Borrower or ASC in any action or proceeding brought
by any such assignee upon such documents and any such right to interpose or
assert any such unrelated offset, counterclaim of defense in any such action or
proceeding is hereby expressly waived by Borrower.
Section 10.15. No Joint Venture or Partnership.
The parties hereto intend that the relationships created
hereunder and under the other Loan Documents be solely that of borrower,
guarantor and lender. Nothing herein or therein is intended to create a joint
venture, partnership, tenancy-in-common, or joint tenancy relationship between
or among the parties hereto nor to grant the Lender any interest other than that
of lender secured pursuant to the terms of the Loan Documents.
Section 10.16. Publicity.
All news releases, publicity or advertising by Borrower or its
Affiliates or by Goldman, Agent or any Lender which it controls through any
media intended to reach the general public which refers to the Loan Documents or
the financing evidenced by the Loan Documents, Goldman, or the Lender shall be
subject to the prior written approval of the Lender and each Borrower which
shall not be unreasonably withheld or delayed; provided, however, that nothing
in this Section 10.16 shall prevent any disclosure permitted by Section 10.28 or
which is otherwise required by law.
Section 10.17. Waiver of Marshaling of Assets.
To the fullest extent each Borrower or ASC may legally do so,
each such Person waives all rights to a marshaling of the assets of such Person,
its partners, if any, and others with interests in such Person, or to a sale in
inverse order of alienation in the event of foreclosure of the interests hereby
created, and agrees not to assert any right under any laws pertaining to the
marshaling of assets, the sale in inverse order of alienation, homestead
exemption, the administration of estates of decedents, or any other matters
whatsoever to defeat, reduce or affect the right of the Lender under the Loan
Documents to a sale of the Collateral for the collection of the Secured
Obligations without any prior or different resort for collection, of the right
of the Lender to the payment of the Secured Obligations out of the net proceeds
of the Collateral or any interest therein in preference to every other claimant
whatsoever. In addition, each Borrower and ASC each, for itself and its
successors and assigns, waives in the event of foreclosure of any or all of the
Liens, any equitable right otherwise available to each Borrower or ASC which
<PAGE>
would require the separate sale of the Collateral or the Lender to exhaust its
remedies against any part of the Collateral before proceeding against any other
part or parts thereof; and further in the event of such foreclosure each
Borrower and ASC do hereby expressly consent to and authorize, at the option of
the Lender, the foreclosure and sale either separately or together of any or all
of the Collateral.
Section 10.18. Waiver of Counterclaim.
Each Borrower and ASC each hereby waives the right to assert a
counterclaim, other than a compulsory counterclaim, in any action or proceeding
brought against it by the Lender, or its agents.
Section 10.19. Conflict; Construction of Documents.
In the event of any conflict between the provisions of this
Credit Agreement and any of the other Loan Documents, the provisions of this
Credit Agreement shall control. The parties hereto acknowledge that they were
represented by counsel in connection with the negotiation and drafting of the
Loan Documents and that such Loan Documents shall not be subject to the
principle of construing their meaning against the party which drafted same.
Section 10.20. Brokers and Financial Advisors.
Each of the Lender and each Borrower hereby represents that it
has dealt with no financial advisors, brokers, underwriters, placement agents,
agents or traders in connection with the transactions contemplated by this
Credit Agreement. Each Borrower hereby indemnifies the Lender and holds it
harmless from and against any and all claims, liabilities, costs and expenses of
any kind in any way relating to or arising from a claim by any Person that such
Person acted on behalf of such Borrower in connection with the transactions
contemplated herein. The Lender indemnifies each Borrower and holds them
harmless from and against any and all claims, liabilities, costs and expenses of
any kind in any way relating to or arising from a claim by any Person that such
Person acted on behalf of the Lender in connection with the transactions
contemplated herein. The provisions of this Section shall survive the expiration
and termination of this Credit Agreement and the repayment of the Secured
Obligations.
<PAGE>
Section 10.21. No Third Party Beneficiaries.
This Credit Agreement and the other Loan Documents are solely
for the benefit of the Lender, each Borrower and ASC, and nothing contained in
this Credit Agreement or the other Loan Documents shall be deemed to confer upon
anyone other than such Persons any right to insist upon or to enforce the
performance or observance of any of the obligations contained herein or therein.
All conditions to the obligations of the Lender to make the Loan hereunder are
imposed solely and exclusively for the benefit of the Lender, and no other
Person shall have standing to require satisfaction of such conditions in
accordance with their terms or be entitled to assume that the holder of the
Loans will refuse to make the Loans in the absence of strict compliance with any
or all thereof and no other Person shall under any circumstances be deemed to be
a beneficiary of such conditions, any or all of which may be freely waived in
whole or in part by the Lender if, in its sole discretion, it deems it advisable
or desirable to do so.
Section 10.22. Prior Agreements.
This Credit Agreement and the other Loan Documents contain the
entire agreement of the parties hereto and thereto in respect of the
transactions contemplated hereby and thereby, and all prior agreements among or
between such parties, whether oral or written, among the Borrowers, ASC and the
Lender, in each case with respect to the subject matter hereof, are superseded
by the terms of this Credit Agreement and the other Loan Documents.
Section 10.23. Counterparts.
This Credit Agreement may be executed in any number of
counterparts, each of which where so executed and delivered shall be an
original, but all of which shall constitute one and the same instrument. It
shall not be necessary in making proof of this Credit Agreement to produce or
account for more than one such counterpart.
Section 10.24. Right of Set-Off.
In addition to any rights now or hereafter granted under
applicable law or otherwise, and not by way of limitation of any such rights,
upon the occurrence and during the continuance of an Event of Default, the
Lender is authorized at any time and from time to time, without presentment,
demand, protest or other notice of any kind (all of which rights being hereby
expressly waived), to set-off and to appropriate and apply any and all deposits
(general or special) and any other indebtedness at any time held or owing by the
Lender (including, without limitation, branches, agencies or Affiliates of the
Lender wherever located) to or for the credit or the account of each Borrower or
ASC (to the extent such credit or account is for the benefit of such Borrower or
ASC), against the obligations and liabilities of such Borrower or ASC to the
Lender hereunder, under the Notes, the other Loan Documents or otherwise,
irrespective of whether the Lender shall have made any demand hereunder and
although such obligations, liabilities or claims, or any of them, may be
contingent or unmatured, and any such set-off shall be deemed to have been made
immediately upon the occurrence of an Event of Default even though such charge
is made or entered on the books of the Lender subsequent thereto.
<PAGE>
Section 10.25. Payment of Expenses, Etc.
Each Borrower agrees to:
(i) pay and hold the Lender harmless from and against any and
all present and future stamp and other similar taxes and save the
Lender harmless from and against any and all liabilities with respect
to or resulting from any delay or omission (other than to the extent
attributable to the Lender) to pay such taxes;
(ii) indemnify the Lender, its officers, directors, employees,
representatives and agents from and hold each of them harmless against
any and all losses, liabilities, claims, damages or expenses incurred
by any of them as a result of, or arising out of, or in any way related
to, or by reason of, any investigation, litigation or other proceeding
(whether or not the Lender is a party thereto) related to the entering
into and/or performance of any Loan Document or the use of proceeds of
the Loans (including other extensions of credit) hereunder or the
consummation of any other transactions contemplated in any Loan
Document, including, without limitation, the reasonable fees and
disbursements of counsel incurred in connection with any such
investigation, litigation or other proceeding (but excluding any such
losses, liabilities, claims, damages or expenses to the extent incurred
by reason of gross negligence, willful misconduct or fraudulently on
the part of the Person to be indemnified);
(iii) defend, indemnify and pay the Lender, its officers,
directors, employees, representatives and agents from and hold each of
them harmless against any and all losses, liabilities, claims, damages
or expenses incurred by any of them as a result of, or arising out of,
or by reason of, any investigation, litigation or other proceeding
(whether or not the Lender is a party thereto) related to the actual or
alleged presence of Hazardous Materials in violation of any
Environmental Law in the air, surface water, groundwater, surface or
subsurface of any Property owned or at any time operated by a Borrower
or any of its Subsidiaries, the generation, storage, transportation or
disposal of Hazardous Materials at any location owned or operated by a
Borrower or any of its Subsidiaries, the non-compliance at any Property
owned or at any time operated by a Borrower or any of its Subsidiaries
with federal, state and local laws, regulations, and ordinances
(including applicable permits thereunder) applicable to any Property
owned or at any time operated by a Borrower or any of its Subsidiaries,
or any Environmental Claim asserted against a Borrower, any of its
Subsidiaries or any Property owned or at any time operated by a
Borrower or any of its Subsidiaries, including, in each case, without
limitation, the actual reasonable fees and disbursements of counsel and
other consultants incurred in connection with any such investigation,
litigation or other proceeding (but excluding any losses, liabilities,
claims, damages or expenses to the extent incurred by reason of the
gross negligence or willful misconduct of the Person to be
indemnified). To the extent that the undertaking to defend, indemnify,
pay or hold harmless the Lender set forth in the preceding sentence may
be unenforceable because it is violative of any law or public policy,
the Borrowers shall make the maximum contribution to the payment and
satisfaction of each of the indemnified liabilities which is
permissible under applicable law; and
(iv) pay, from time to time, all intangible recording taxes
applicable to the transaction evidenced hereby, including late fees,
penalties and interest, if any.
<PAGE>
Section 10.26. Amendments, Waivers and Consents.
Neither this Credit Agreement nor any other Loan Document nor
any of the terms hereof or thereof may be amended, changed, waived, discharged
or terminated, nor shall any consent or approval be deemed granted hereunder,
unless such amendment, change, waiver, discharge, termination, consent or
approval is in writing signed by the Lender.
Section 10.27. Benefit of Agreement.
(a)......Generally. This Credit Agreement shall be binding
upon and inure to the benefit of and be enforceable by the respective successors
and assigns of the parties hereto; provided that no Borrower nor ASC may assign
or transfer any of its interests without prior written consent of the Lender;
and provided, further, that the rights of the Lender to transfer, assign or
grant participations in its rights and/or obligations hereunder shall be limited
as set forth in this Section.
(b)......Assignments. The Lender may, in the ordinary course
of its business and in accordance with applicable law, assign all or a portion
of its rights and obligations hereunder to a bank or other financial institution
pursuant to an assignment agreement; provided that any such assignment shall be
in a minimum aggregate amount of $5,000,000 and in integral multiples of
$500,000 above such amount (or in the entire amount of such lesser amount as may
then be held by the assigning Lender) and that each such assignment shall be of
a constant, not varying, percentage of all of the assigning Lender's rights and
obligations under this Credit Agreement. Any assignment hereunder shall be
effective upon satisfaction of the conditions set forth in the preceding
sentence and delivery to the Lender of written notice of the assignment together
with a transfer fee of $2,500 payable to the Lender for its own account. Upon
the effectiveness of any such assignment, the assignee shall become a "Lender"
for all purposes of this Credit Agreement and the other Loan Documents and, to
the extent of such assignment, the assigning Lender shall be relieved of its
obligations hereunder to the extent of the amount being assigned. The Borrowers
shall at the request of Goldman enter into such amendments to this Agreement and
the other Loan Documents in order to provide for an agent to administer this
Credit Agreement on behalf of the Lenders. Along such lines, Joint Venture and
Americold agree that upon effectiveness of any such assignment and surrender of
the appropriate Notes, it will promptly provide to the assigning Lender and to
the assignee separate promissory notes in the amount of their respective
interests substantially in the forms of Exhibits A-1 and A-2, respectively (but,
if applicable, with notation thereon that it is given in substitution for and
replacement of the original Notes or any replacement notes thereof).
If, pursuant to this subsection, any interest in this Credit
Agreement or any Notes is transferred to any transferee which is organized under
the laws of any jurisdiction other than the United States or any state thereof,
the transferor Lender shall cause such transferee, concurrently with the
effectiveness of such transfer, (i) to represent to the transferor Lender (for
the benefit of the transferor Lender, and each Borrower) that under applicable
law and treaties no income, franchise, corporate, capital, stamp or other taxes,
levies, duties, imports, deductions, charges or fees of any nature will be
required to be withheld by the Borrowers, or the transferor Lender with respect
to any payments to be made to such transferee in respect of the Loans, (ii) to
furnish to the transferor Lender either U.S. Internal Revenue Service Form 4224
or U.S. Internal Revenue Service Form 1001 (wherein such transferee claims
entitlement to complete exemption from U.S. federal withholding tax on all
interest payments hereunder) and (iii) to agree (for the benefit of the
transferor Lender and the Borrowers) to provide the transferor Lender a new Form
4224 or Form 1001 upon the expiration or obsolescence of any previously
delivered form and comparable statements in accordance with applicable U.S. laws
and regulations and amendments duly executed and completed by such transferee,
<PAGE>
and to comply from time to time with all applicable U.S. laws and regulations
with regard to such withholding tax exemption.
(c)......Participations. Subject to obtaining the prior
consent of Goldman, , each Lender may, in the ordinary course of its business,
and in accordance with applicable law, sell, transfer, agent or assign
participations in all or any part of such Lender's interests and obligations
hereunder; provided that (i) such selling Lender shall remain a "Lender" for all
purposes under this Credit Agreement (such selling Lender's obligations under
the Loan Documents remaining unchanged) and the participant shall not constitute
a Lender hereunder, (ii) no such participant shall have, or be granted, rights
to approve any amendment or waiver relating to this Credit Agreement or the
other Loan Documents except to the extent any such amendment or waiver would (A)
reduce the principal of or rate of interest on or fees in respect of the Loans,
(B) postpone the date fixed for any payment of principal (including extension of
the Final Maturity Date but excluding any mandatory prepayment), interest or
fees in which the participant is participating, or (C) release all or
substantially all of the guaranties or the collateral (except as expressly
provided in the Loan Documents) supporting the Loans, (iii) sub-participations
by the participant shall be prohibited, and (iv) each participation must be in a
minimum amount of $5,000,000 and in integral multiples of $500,000 (or in the
entire amount of such lesser amount as may then be held by the selling Lender).
In the case of any such participation, the participant shall not have any rights
under this Credit Agreement or the other Loan Documents (the participant having
rights against the selling Lender in respect of such participation as set forth
in the participation agreement with such Lender creating such participation) and
all amounts payable by the Borrowers hereunder shall be determined as if such
Lender had not sold such participation. The Borrowers agree that a Lender shall
have the right to disclose all information it has received from the Borrowers to
potential assignees or participants on a confidential basis pursuant to a
confidentiality agreement acceptable to the Borrowers and consistent with
Section 10.28.
(d)......Assignments to Federal Reserve Bank. Notwithstanding
any other provision contained in this Credit Agreement or any other Loan
Document to the contrary, any Lender may assign all or any portion of the Loans
or Notes held by it to any Federal Reserve Bank or the United States Treasury as
collateral security pursuant to Regulation A of the Board of Governors of the
Federal Reserve System and any Operating Circular issued by such Federal Reserve
Bank; provided that any payment in respect of such assigned Loan or Notes made
by the Borrowers to or for the account of the assigning and/or pledging Lender
in accordance with the terms of this Credit Agreement shall satisfy the
Borrowers' obligations hereunder in respect of such assigned Loan or Notes to
the extent of such payment. No such assignment shall release the assigning
Lender from its obligations hereunder.
Section 10.28. Confidentiality.
The Lender agrees to hold confidential any nonpublic
information that it may receive from the Borrowers pursuant to or in connection
with this Credit Agreement (hereinafter, "confidential information"), except for
disclosures: (a) specifically authorized by a Borrower; (b) to any actual or
prospective permitted transferee or assignee of, or participant in, any part of
any Lender's interest in the Loans, provided such Person has agreed in writing
for the benefit of the Borrowers and the selling Lender to hold such information
confidential in accordance with the terms of this Section; (c) to legal counsel,
accountants and other professional advisors to the Lender, so long as the Lender
shall inform such Persons of the confidential nature of such information and
shall direct them to treat such information confidentially, and to appraisers in
the ordinary course of business; (d) to regulatory officials having jurisdiction
over the Lender; (e) which the Lender has been advised by counsel believes may
<PAGE>
be required by law, or which are otherwise required by legal process to which
the Lender or any Person to whom disclosure is permitted hereunder is a party or
in connection with the assertion by the Lender in any judicial or nonjudicial
proceeding of any claim, counterclaim or defense against any Borrower; or (f) of
information which has previously become publicly available through the actions
of a Person other the Lender. Notwithstanding the foregoing, in no event shall
the Lender have any liability for the disclosure of any confidential information
by any Person to whom confidential information was disclosed by the Lender in
compliance with the provisions of this Credit Agreement.
Section 10.29. No Obligations of Goldman, Sachs & Co.
Notwithstanding anything to the contrary herein or in the
other Loan Documents, each Borrower and ASC agree that neither Goldman, Sachs &
Co. nor any of its partners, officers, employees or agents shall have any
liability (contractually or otherwise) in respect of the Loan or any other
obligations arising under the Loan Documents.
Section 10.30. Cooperation.
Each Borrower hereby agrees that it and (as applicable) each
of its respective principals, members, officers, representatives, affiliates and
controlling persons shall:
(a)......Provide (or cause its affiliates to provide) the
Lender with any information in Borrowers' possession or which can be obtained by
the Borrower without any material expense and which can be disclosed without
violating any applicable law or breaching any applicable confidentiality
requirement (including financial information) that, in the reasonable opinion of
the Lender, is necessary or desirable (for legal disclosure or marketing
purposes) to include in any information memorandum or other disclosure documents
or marketing materials used in connection with any syndication of the Loan by
the Lender; and
(b)......From time to time at the request of the Lender meet
with prospective purchasers of an interest in the Loan to discuss the
Properties, the Borrowers and their Affiliates, the Borrowers' business, the
Loans and any other matters that, in the reasonable opinion of the Lender, are
relevant in connection with the syndication of the Loans; provided that
Borrowers shall not be required to disclose any information that would cause the
Borrowers to be in violation of any applicable law or in breach of any
applicable confidentiality requirement.
Section 10.31. No Recourse to Partners of Joint Venture or
Common Stock Joint Venture.
Notwithstanding anything to the contrary herein or in the
other Loan Documents, the Agent and the Lenders agree that no general or limited
partner, member or stockholer of Joint Venture, nor any of their partners,
officers, employees or agents shall in such capacity have any liability
(contractually or otherwise) in respect of the Loan or any other obligations
arising under the Loan Documents. Nothing in this Section 10.31 shall relieve
the Borrowers or ASC of any such liability.
Section 10.32. Agency.
Each Lender under this Credit Agreement hereby appoints
Goldman as its Agent (the "Agent"), and authorizes the Agent to act as its agent
in the administration of the Credit Agreement and the other Loan Documents,
including the right to act as the secured party pledgee, assignee or mortgagee
<PAGE>
with respect to any Collateral on behalf of all the Lenders and to take all
actions permitted to be taken by the Agent under any Loan Document. The Agent
may appoint any reputable financial institution as a successor agent at any time
upon five (5) days' prior written notice to Borrowers, such appointment to be
effective upon acceptance thereof by the successor.
Section 10.33. Reorganization.ion
The parties hereto acknowledge that the Borrowers desire to
engage in a corporate reorganization after the date hereof which will include
the (a) establishment of Americold as a real estate investment trust under the
Code and (b) transfer of certain assets, primarily equipment, to an Affiliate or
Affiliates of Borrowers to be created. The parties hereto agree to execute and
deliver appropriate amendments to this Credit Agreement and the other Loan
Documents in order to effectuate such reorganization, which will include
revisions to Section 6.11 (but will not permit the payment of any amounts
subject to Section 6.11 if prior to or after giving effect thereto there will be
a Default or an Event of Default) and Section 6.3 (solely to permit Americold to
engage in its current business through Subsidiaries), provided that such
revisions do not adversely affect the ability of the Borrowers or ASC to repay
the Secured Obligations when due or the Collateral or Liens thereon or otherwise
materially adversely affect the interests of the Agent or the Lenders.
[Signatures appear on following page(s).]
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Credit
Agreement to be duly executed by their duly authorized representatives, all as
of the day and year first above written.
VORNADO CRESCENT PORTLAND
PARTNERSHIP, a Delaware general partnership
By: PORTLAND PARENT, INC., a general partner
By: /s/ Joseph Macnow
----------------------
Name: Joseph Macnow
Title: Vice President
AMERICOLD CORPORATION
By: /s/ Joseph Macnow
----------------------
Name: Joseph Macnow
Title: Vice President
AMERICOLD SERVICES CORPORATION
By: /s/ Joseph Macnow
----------------------
Name: Joseph Macnow
Title: Vice President
<PAGE>
GOLDMAN SACHS MORTGAGE COMPANY, a New York
limited partnership, as Agent and Lender
By: Goldman Sachs Real Estate Funding Corp.,
its General Partner
By: /s/ J. Theodore Borter
---------------------------
Name: J. Theodore Borter
Title: Attorney-in-Fact
Payments to be made to Lender should be made
as follows:
Citibank, NA
ABA No. 021000089
Account No. 40711421
Goldman Sachs Mortgage Company
Reference: Vornado Crescent Portland
Partnership
<PAGE>
SCHEDULES
Schedule 3.4 - Mortgage Closing Conditions
Schedule 4.1 Existing Indebtedness
Schedule 6.8 Sale and Leasebacks
EXHIBITS
Exhibit A-1 - Form of Joint Venture Promissory Note
Exhibit A-2 - Form of Americold Promissory Note
Exhibit B - Form of Notice of Borrowing
Exhibit C - Form of Joint Venture Pledge and Security Agreement
Exhibit D - Intentionally Omitted
Exhibit E-1 - Form of Americold Security Agreement
Exhibit E-2 - Form of ASC Security Agreement
Exhibit F - Form of Mortgage
Exhibit G - Terms of Subordination
Exhibit H - Form of Parent Guarantee
<PAGE>
Form of
Promissory Note
$379,600,000 October 31, 1997
FOR VALUE RECEIVED, the undersigned, AMERICOLD CORPORATION, an
Oregon corporation ("AMERICOLD"), promises to pay to the order of GOLDMAN SACHS
MORTGAGE COMPANY, a limited partnership organized and existing under the laws of
the State of New York ("HOLDER"), on or before the Final Maturity Date (as such
term is defined in the Credit Agreement) at such place as Holder may from time
to time designate in writing, the lesser of (x) $379,600,000 and (y) the unpaid
amount of the Americold Loans set forth on the reverse hereof, in lawful money
of the United States of America, together with interest thereon, to be computed
and paid as specified in the Credit Agreement (as such terms are defined below);
provided, that the failure of the Holder to make a notation on the reverse
hereof of the amount of Americold Loans shall not reduce or affect the
obligation of Americold to repay such Americold Loans.
Except as otherwise defined or limited herein, capitalized
terms used herein shall have the meanings ascribed to them in that certain
Credit Agreement (the "Credit Agreement"), dated as of the date hereof, by and
among Americold, Vornado Crescent Portland Partnership, Americold Services
Corporation, Holder and Goldman Sachs Mortgage Company, as Agent. This is the
Note of Americold referred to in the Credit Agreement and is entitled to the
security therefor granted pursuant to the Loan Documents, including, without
limitation, the Pledge Agreements and the Security Agreements. The terms of this
Note are hereby supplemented in full by the terms of the Credit Agreement and
the other Loan Documents.
The entire Secured Obligations or any portion thereof, shall
without notice, except such notice as is required under the terms of any Loan
Document, become immediately due and payable at the option of Holder, unless
otherwise specified under the applicable Loan Document, if an Event of Default
shall have occurred and be continuing. In the event that Holder retains counsel
to collect all or any part of the Secured Obligations, or to protect, or
foreclose the security provided in connection herewith, Americold agrees to pay
reasonable costs of collection incurred by Holder, including reasonable
attorneys' fees.
Americold does hereby agree that, if an Event of Default of
the type described in Section 7.1(a) of the Credit Agreement shall have occurred
and is continuing, Americold shall pay interest at the Default Rate on the
entire outstanding amount of the Americold Loans and due but unpaid interest
thereon, upon demand from time to time, to the extent permitted by applicable
law.
<PAGE>
Americold represents that it has full power, authority and
legal right to execute and deliver this Note and to perform its obligations
hereunder, and that this Note constitutes the valid and binding obligation of
Americold, enforceable against Americold in accordance with its terms, except as
enforceability may be limited by (i) applicable bankruptcy, insolvency,
reorganization, moratorium, or similar laws affecting the enforcement of
creditors' rights generally and (ii) general principles of equity, regardless of
whether considered in proceedings at law or in equity.
All notices or other communications required or permitted to
be given pursuant hereto shall be given in the manner specified in the Credit
Agreement directed to the parties at their respective addresses as provided
therein.
THIS NOTE WAS NEGOTIATED IN THE STATE OF NEW YORK, AND MADE BY
AMERICOLD AND ACCEPTED BY HOLDER IN THE STATE OF NEW YORK, AND THE PROCEEDS
DELIVERED PURSUANT HERETO WERE DISBURSED FROM THE STATE OF NEW YORK, WHICH STATE
THE PARTIES AGREE HAS A SUBSTANTIAL RELATIONSHIP TO THE PARTIES AND TO THE
UNDERLYING TRANSACTION EMBODIED HEREBY, AND IN ALL RESPECTS, INCLUDING MATTERS
OF CONSTRUCTION, VALIDITY AND PERFORMANCE. THIS NOTE AND THE OBLIGATIONS ARISING
HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK APPLICABLE TO NOTES MADE AND PERFORMED IN SUCH STATE AND
ANY APPLICABLE LAW OF THE UNITED STATES OF AMERICA, IT BEING UNDERSTOOD THAT THE
LAW OF THE STATE OF NEW YORK SHALL GOVERN THE VALIDITY AND THE ENFORCEABILITY OF
THIS NOTE AND ALL OF THE INDEBTEDNESS OR OBLIGATIONS ARISING HEREUNDER OR UNDER
ANY OTHER LOAN DOCUMENT. TO THE FULLEST EXTENT PERMITTED BY LAW, AMERICOLD
HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY CLAIM TO ASSERT THAT THE LAW
OF ANY OTHER JURISDICTION GOVERNS THIS NOTE, AND THIS NOTE SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST AMERICOLD OR
HOLDER ARISING OUT OF OR RELATING TO THIS NOTE SHALL BE INSTITUTED IN ANY
FEDERAL OR STATE COURT IN NEW YORK, NEW YORK, AND AMERICOLD WAIVES ANY OBJECTION
WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH SUIT,
ACTION OR PROCEEDING, AND AMERICOLD HEREBY IRREVOCABLY SUBMITS TO THE
JURISDICTION OF ANY SUCH COURT IN ANY SUIT, ACTION OR PROCEEDING.
No release of any security for the Secured Obligations or any
Person liable for payment of the Secured Obligations, no extension of time for
payment of this Note or any installment hereof, and no alteration, amendment or
waiver of any provision of the Loan Documents made by agreement between Holder
and any other Person or party shall release, modify, amend, waive, extend,
change, discharge, terminate or affect the liability of Americold or any other
Person or party who might be or become liable for the payment of all or any part
of the Secured Obligations, under the Loan Documents, except as otherwise
expressly provided herein.
<PAGE>
Americold and all others who may become liable for the payment
of all or any part of the Secured Obligations do hereby severally waive
presentment and demand for payment, notice of dishonor, protest, notice of
protest, notice of non-payment, and notice of intent to accelerate the maturity
hereof and (except as may be expressly provided for in the Loan Documents) of
acceleration.
This Note may not be modified, amended, waived, extended,
changed, discharged or terminated orally or by any act or failure to act on the
part of Americold or Holder, but only by an agreement in writing signed by the
party against whom enforcement of any modification, amendment, waiver,
extension, change, discharge or termination is sought.
Whenever used, the singular number shall include the plural,
the plural the singular, and the words "Holder" and "Americold" shall include
their respective successors, assigns, heirs, executors and administrators as
permitted under the Loan Documents.
Notwithstanding anything to contrary herein or in the other
Loan Documents, no general or limited partner, member or stockholder of Joint
Venture nor any of its partners, officers, employees or agents shall in such
capacity have any liability (contractually or otherwise) in respect of the Loans
or any other obligations arising under the Loan Documents. Nothing in the
foregoing sentence shall relieve Joint Venture, Americold or ASC of any such
liability.
<PAGE>
IN WITNESS WHEREOF, Americold has caused its duly authorized
officers to execute this Note on its behalf, as of the day and year first above
written.
AMERICOLD CORPORATION
By:
-------------------------
Name:
Title:
EXHIBIT E-1
FORM OF
AMERICOLD SECURITY AGREEMENT
SECURITY AGREEMENT dated as of October 31, 1997 (this
"Agreement"), between Americold Corporation, an Oregon corporation (the
"Assignor"), and Goldman Sachs Mortgage Company, a New York limited partnership,
in its capacity as Agent under that certain Credit Agreement described below
(the "Agent").
W I T N E S S E T H:
WHEREAS, pursuant to a certain Credit Agreement dated as of
October 30, 1997 (as at any time amended, modified or supplemented, the "Credit
Agreement"), among Assignor, Vornado Crescent Portland Partnership, a Delaware
general partnership, (the "Joint Venture"), Americold Services Corporation, a
Delaware corporation, Goldman Sachs Mortgage Company, a New York limited
partnership, as Agent and as Lender, and the other Lenders from time to time a
party thereto, the Lenders have agreed, subject to all of the terms and
conditions therein set forth, to make a loan to Joint Venture and loans to
Americold in the aggregate principal amount of up to $379.6 million
(collectively, the "Loan") (any capitalized term used but not defined herein
shall have the meaning given such term in the Credit Agreement);
WHEREAS, in connection with the making of the Loan under the
Credit Agreement and as security for the payment of the Secured Obligations (as
defined in the Credit Agreement and herein called the "Obligations"), Agent on
behalf of the Lenders is requiring that Assignor execute and deliver this
Agreement and grant the security interests contemplated hereby, and Assignor
desires to assign all of its rights, title and interest in and to the Collateral
(as hereinafter defined) to Agent on behalf of the Bank as additional collateral
for the payment in full of the Obligations.
NOW, THEREFORE, in consideration of the premises and the
covenants hereinafter contained, and to induce the Lenders and Agent to execute
and deliver the Credit Agreement and the other Loan Documents and to induce the
Lenders to make the Loan, it is agreed as follows:
ARTICLE I.
DEFINITIONS
SECTION 1.1. Definition of Terms Used Herein. All capitalized
terms used but not defined herein shall have the meanings set forth in the other
Loan Documents.
SECTION 1.2. Definition of Certain Terms Used Herein. As used
herein, the following terms shall have the following meanings:
"Account Debtor" shall mean any person who is or who may
become obligated to the Assignor under, with respect to or on account of an
Account.
"Accounts" shall mean, with respect to the Assignor, any and
all right, title and interest of the Assignor to payment for goods and services
sold or leased (exclusive of any liabilities of the Assignor with respect
thereto), including any such right evidenced by chattel paper, whether due or to
become due, whether or not it has been earned by performance, and whether now or
<PAGE>
hereafter acquired or arising in the future, including, without limitation,
accounts receivable from Affiliates of the Assignor.
"Accounts Receivable" shall mean, with respect to the
Assignor, all right, title and interest of the Assignor to all "accounts", as
such term is defined in the Uniform Commercial Code, and to Accounts and all of
the Assignor's right, title and interest in any returned goods, together with
all rights, titles, securities and guaranties with respect thereto, including
any rights to stoppage in transit, replevin, reclamation and resales, and all
related security interests, liens and pledges, whether voluntary or involuntary,
whether due or to become due, whether now or hereafter arising in the future.
"Agent" shall mean the agent, if any, for the Lenders under
the Credit Agreement.
"Collateral" shall mean all (a) Accounts Receivable, (b)
Documents, (c) Equipment (including, without limitation, Fixtures), (d) General
Intangibles, (e) Inventory, (f) Instruments, (g) Proceeds, (h) Investment
Property as defined in the Uniform Commercial Code, including the capital stock
(and all rights relating thereto, including rights to dividends, to vote and to
all distributions of any Person, including the Persons set forth on Schedule III
hereto) and (i) Collection Deposit Accounts and all other cash and cash
accounts; provided, that, as to any particular item described in clauses (a)
through (i) above, (i) whether or not there shall exist a Lien on such item
under any other agreement, if the creation of a Lien hereunder on such item
would violate the terms of any agreement listed below (a "Listed Agreement"),
the Lien hereunder shall not attach to such item (which shall not constitute
"Collateral" subject hereto until attachment) until the earlier of (x) the
repayment of the indebtedness incurred under such Listed Agreement secured by
such item and, if applicable, the termination of any further commitment to lend
and (y) the time such violation would no longer exist, and (ii) if the item is
subject to a perfected Lien thereon on the date hereof created under any Listed
Agreement, the Lien created by this Agreement shall not attach to such item
until the earlier of (x) the release of such item from the Lien of such other
agreement and (y) the indebtedness under such other agreement secured by such
item shall have been repaid. The Listed Agreements are: (a) the Amended and
Restated Indenture dated as of March 9, 1993, as amended, between Assignor, as
issuer, and Fleet National Bank, formerly known as Shawmut Bank Connecticut, as
Trustee, (b) the $34 Million Credit Documents, which are listed on Schedule IV
hereto and (c) the Credit Agreement, dated as of June 19, 1995, between Assignor
and the United States National Bank of Oregon for $27,500,000.
"Collection Deposit Account" shall mean a lockbox account of
the Assignor maintained for the benefit of the Secured Parties with the Agent
pursuant to Article V or with a Sub-Agent pursuant to a Lockbox Agreement.
"Collection Deposit Account Activation Date" shall have the
meaning given to it in Section 5.1.
"Credit Agreement" shall have the meaning as set forth in the
first Whereas clause hereunder.
"Default" shall mean any "Default" as defined in the Credit
Agreement.
"Documents" shall mean all instruments, files, records, ledger
sheets and documents covering or relating to any of the Collateral.
<PAGE>
"Equipment" shall mean all "equipment", as such term is
defined in the Uniform Commercial Code, and all equipment, machinery, apparatus,
furniture and furnishings, conveyors, rolls, attachments, storage and handling
equipment, automotive equipment, motor vehicles, trucks, trailers, boats,
vessels, aircraft and rolling stock and parts thereof and all other tangible
personal property similar to any of the foregoing, including tools, parts and
supplies of every kind and description, and all improvements, accessions or
appurtenances thereto, that are now or hereafter owned by the Assignor. The term
"Equipment" shall include Fixtures.
"Event of Default" shall mean any "Event of Default" as
defined in the Credit Agreement.
"Fixtures" shall mean all items of Equipment, whether now
owned or hereafter acquired, of the Assignor that become so related to
particular real estate that an interest in them arises under any real estate law
applicable thereto.
"General Intangibles" shall mean all "general intangibles", as
such term is defined in the Uniform Commercial Code, and all chooses in action
and causes of action and all other assignable intangible personal property of
the Assignor of every kind and nature (other than Accounts Receivable) now owned
or hereafter acquired by the Assignor, including corporate or other business
records, indemnification claims, customer lists, contract rights (including
rights under leases, whether entered into as lessor or lessee, but excluding
rights under any agreement in existence on the date hereof as to which the
granting of the security interest granted hereby would constitute a breach),
Intellectual Property, goodwill, registrations, franchises, tax refund claims
and any letter of credit, guarantee, claim, security interest or other security
held by or granted to the Assignor to secure payment by an Account Debtor of any
of the Accounts Receivable.
"Indemnitee" shall mean any "Indemnitee" as defined in the
Credit Agreement.
"Instruments" shall mean all "instruments," "chattel paper,"
and "letters of credit" (each as defined in the Uniform Commercial Code),
including, but not limited to, promissory notes, drafts, bills of exchange and
trade acceptances, now owned or hereafter acquired by the Assignor.
"Inventory" shall mean all "inventory", as such term is
defined in the Uniform Commercial Code, and all goods of the Assignor, whether
now owned or hereafter acquired, held for sale or lease, or furnished or to be
furnished by the Assignor under contracts of service, or consumed in the
Assignor's business, including raw materials, intermediates, work in process,
packaging materials, finished goods, semi-finished inventory, scrap inventory,
manufacturing supplies and spare parts, and all such goods that have been
returned to or repossessed by or on behalf of the Assignor.
"Intellectual Property" shall mean all intellectual and
similar property of the Assignor of every kind and nature now owned or hereafter
acquired by the Assignor, including inventions, designs, patents, patent
applications, copyrights, copyright registrations, applications to register
copyrights, Licenses, trademarks and service marks and the goodwill associated
therewith, trademark or service mark applications, trade names, trade secrets,
confidential or proprietary technical and business information, know-how,
show-how or other data or information, software and databases and all
embodiments or fixations thereof and related documentation, registrations and
franchises, and all additions, improvements and accessions to, and books and
records describing or used in connection with, any of the foregoing.
"Lenders" shall mean the lenders party from time to time to
the Credit Agreement.
<PAGE>
"License" shall mean any patent license, copyright license,
trademark license or other license or sublicense to which the Assignor is or
becomes a party, including those listed on Schedule I (other than those license
agreements in existence as of the date hereof and listed on Schedule I, and
those license agreements entered into after the date hereof, that by their terms
prohibit assignment or a grant of a security interest by the Assignor as
licensee thereunder).
"Loan Documents" shall mean the Loan Documents (as such term
is defined in the Credit Agreement).
"Lockbox Agreement" shall mean the lockbox agreement and/or
amended and restated lockbox agreement among the Assignor, the Agent and a
Sub-Agent (as defined in the Lockbox Agreement), in a form as the Agent may
specify.
"Notes" shall have the meaning assigned to such term in the
Credit Agreement.
"Obligations" shall have the meaning assigned to such term in
the preliminary statement of this Agreement.
"Proceeds" shall mean any consideration received from the
sale, exchange, license, lease or other disposition of any asset or property
that constitutes Collateral, any value received as a consequence of the
possession of any Collateral and any payment received from any insurer or other
person or entity as a result of the destruction, loss, theft, damage or other
involuntary conversion of whatever nature of any asset or property that
constitutes Collateral, and shall include (a) all cash and negotiable
instruments received or held on behalf of the Agent pursuant to the Lockbox
Agreement or any other lockbox or similar arrangement relating to the payment of
Accounts Receivable and Inventory and (b) any claim of the Assignor against any
third party for (and the right to sue and recover for and the rights to damages
or profits due or accrued arising out of or in connection with) (i) past,
current or future infringement of any patent now or hereafter owned by the
Assignor or licensed under a patent license, (ii) past, current or future breach
of any License, (iii) past, current or future infringement of any copyright now
or hereafter owned by the Assignor or licensed under a copyright license and
(iv) any and all other amounts from time to time paid or payable under or in
connection with any of the Collateral.
"Secured Parties" shall mean the Agent and the Lenders and the
successors and assigns of each of the foregoing.
"Security Interest" shall have the meaning assigned to such
term in Section 2.1.
"Sub-Agent" shall mean a financial institution that shall have
delivered to the Agent an executed Lockbox Agreement.
"Uniform Commercial Code" shall mean the Uniform Commercial
Code of the State of New York, or other applicable jurisdiction, as in effect
from time to time.
SECTION 1.3. Rules of Interpretation. The rules of
interpretation specified in Section 1.2 of the Credit Agreement shall be
applicable to this Agreement.
ARTICLE II.
SECURITY INTEREST
<PAGE>
SECTION 2.1. Security Interest. As security for the payment or
performance, as the case may be, of the Obligations, the Assignor hereby
bargains, sells, conveys, assigns, sets over, mortgages, pledges, hypothecates
and transfers to the Agent, its successors and its assigns, for the ratable
benefit of the Secured Parties, and hereby grants to the Agent, its successors
and assigns, for the benefit of the Secured Parties, a security interest in, all
of the Assignor's right, title and interest in, to and under the Collateral (the
"Security Interest"). Without limiting the foregoing, the Agent is hereby
authorized to file one or more financing statements (including fixture filings),
continuation statements, filings with the United States Patent and Trademark
Office or United States Copyright Office (or any successor office or any similar
office in any other country) or other documents for the purpose of perfecting,
confirming, continuing, enforcing or protecting the Security Interest granted by
the Assignor, without the signature of the Assignor, naming the Assignor as
debtor and the Agent as secured party.
To the extent permitted by law, the lien of the Security
Interest hereunder shall attach to the Collateral immediately.
The Assignor agrees at all times to keep accurate and complete
accounting records with respect to the Collateral, including a record of all
payments and Proceeds received in respect thereof.
SECTION 2.2. No Assumption of Liability. The Security Interest
is granted as security only and shall not subject the Agent or any other Secured
Party to, or in any way alter or modify, any obligation or liability of the
Assignor with respect to or arising out of any of the Collateral.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
The Assignor represents and warrants to and with the Agent and
each other Secured Party that:
SECTION 3.1. Title and Authority. The Assignor has good and
valid rights in and title to the Collateral with respect to which it has
purported to grant a Security Interest hereunder and has full power and
authority to grant to the Agent the Security Interest in such Collateral
pursuant hereto and to execute, deliver and perform its obligations in
accordance with the terms of this Agreement, without the consent or approval of
any other person other than any consent or approval that has been obtained.
SECTION 3.2. Filings. The Perfection Certificate has been duly
prepared, completed and executed and the information set forth therein is
correct and complete. Fully executed Uniform Commercial Code financing
statements (other than fixture filings, as applicable) or other appropriate
filings, recordings or registrations containing a description of the Collateral
have been delivered to the Agent for filing in each governmental, municipal or
other office specified in Schedule 6 to the Perfection Certificate, which are
all the filings, recordings and registrations that are necessary to publish
notice of and protect the validity of and to establish a legal, valid and
perfected security interest in favor of the Agent (for the benefit of the
Secured Parties) in respect of all Collateral in which the Security Interest may
be perfected by filing, recording or registration under the UCC in the United
States (or any political subdivision thereof) and its territories and
possessions, except for farm equipment, timber, minerals, fixtures, or
collateral whose ownership interest is evidenced by a certificate or other
instrument, or vehicle titles, and no further or subsequent filing, refiling,
recording, rerecording, registration or reregistration is necessary in any such
jurisdiction, except as provided under applicable law with respect to the filing
of continuation statements.
<PAGE>
SECTION 3.3. Validity of Security Interest. The Security
Interest constitutes (a) a legal and valid security interest in all the
Collateral securing the payment and performance of the Obligations and (b)
subject to the filings described in Section 3.2 above, a perfected security
interest in all Collateral in which a security interest may be perfected by
filing, recording or registering a financing statement or analogous document in
the United States (or any political subdivision thereof) and its territories and
possessions pursuant to the Uniform Commercial Code, except for farm equipment,
timber, minerals, fixtures, or collateral whose ownership interest is evidenced
by a certificate or other instrument, or vehicle titles. The Security Interest
is and shall be prior to any other Lien on any of the Collateral, other than
Liens expressly permitted to be prior to the Security Interest pursuant to
Section 6.2 of the Credit Agreement.
SECTION 3.4. Absence of Other Liens. The Collateral is owned
by the Assignor free and clear of any Lien, except for Liens expressly permitted
pursuant to Section 6.2 of the Credit Agreement. Other than as contemplated
hereby, the Assignor has not filed or consented to the filing of (a) any
financing statement or analogous document under the Uniform Commercial Code or
any other applicable laws covering any Collateral, (b) any assignment in which
the Assignor assigns any Collateral or any security agreement or similar
instrument covering any Collateral with the United States Patent and Trademark
Office or the United States Copyright Office nor (c) any assignment in which the
Assignor assigns any Collateral or any security agreement or similar instrument
covering any Collateral with any foreign governmental, municipal or other
office.
ARTICLE IV.
COVENANTS
SECTION 4.1. Change of Name; Location of Collateral; Records;
Place of Business. (a) The Assignor agrees promptly to notify the Agent of any
change (i) in its corporate name or in any trade name used to identify it in the
conduct of its business or in the ownership of its properties, (ii) in the
location of its chief executive office, its principal place of business, any
office in which it maintains books or records relating to Collateral owned by it
or any office or facility at which Collateral owned by it is located (including
the establishment of any such new office or facility) or (iii) in its identity
or corporate structure. The Assignor agrees not to effect or permit any change
referred to in the preceding sentence unless all filings have been made under
the Uniform Commercial Code or otherwise that are required in order for the
Agent to continue at all times following such change to have a valid, legal and
perfected security interest in all the Collateral. The Assignor agrees promptly
to notify the Agent if any material portion of the Collateral is damaged or
destroyed.
(b) The Assignor agrees to maintain, at its own cost and
expense, complete and accurate records with respect to the Collateral owned by
it and, at such time or times as the Agent may request, promptly to prepare and
deliver to the Agent a duly certified schedule or schedules in form and detail
satisfactory to the Agent showing the identity, amount and location of any and
all Collateral.
SECTION 4.2. Periodic Certification. Each quarter, commencing
with the quarter ending on June 30, 1998, at the time of delivery of quarterly
financial statements by the Assignor with respect to the preceding fiscal
quarter pursuant to Section 5.1(b) of the Credit Agreement, the Assignor shall
deliver to the Agent a certificate executed by a Financial Officer of the
Assignor (a) setting forth the information required pursuant to Section 2 of the
Perfection Certificate, (b) certifying that all Uniform Commercial Code
<PAGE>
financing statements (including fixture filings, as applicable), filings with
the United States Patent and Trademark Office and appropriate state offices with
respect to state registered trademarks or the United States Copyright Office, or
other appropriate filings, recordings or registrations, including all refilings,
rerecordings and reregistrations, containing a description of the Collateral
have been filed of record in each governmental, municipal or other appropriate
office in each jurisdiction identified pursuant to clause (a) above to the
extent necessary to protect and perfect the Security Interest for a period of
not less than 18 months after the date of such certificate, (c) setting forth,
with respect to each filing, recording or registration (including each refiling,
rerecording or reregistration) made since the date of the Perfection Certificate
or the most recent certificate delivered pursuant to this Section 4.2, the
filing office, date and file number thereof, (d) attaching true, correct and
complete acknowledgment copies of each such filing, recording or registration
not theretofore delivered to the Agent and (e) stating that he has consulted
with its legal counsel as to the matters set forth in such certificate.
SECTION 4.3. Protection of Security. The Assignor shall, at
its own cost and expense, take any and all actions necessary to defend title to
the Collateral against all persons and to defend the Security Interest of the
Agent in the Collateral and the priority thereof against any Lien not expressly
permitted under the Credit Agreement.
SECTION 4.4. Instruments. The Assignor shall deliver and
pledge to the Agent all Instruments ((i) but only with respect to any Instrument
representing in excess of $250,000 of indebtedness and (ii) at any time during
the continuance of an Event of Default) and other property, the perfection of a
security interest in which requires possession pursuant to the Uniform
Commercial Code, duly endorsed and accompanied by duly executed instruments of
transfer or assignment, all in form and substance satisfactory to the Agent,
promptly upon the Assignor's receipt thereof. The Assignor shall mark
conspicuously all chattel paper with a legend in form and substance satisfactory
to the Agent, indicating that such chattel paper is subject to the Liens of the
Security Interest.
SECTION 4.5. Further Assurances. The Assignor agrees, at its
expense, to execute, acknowledge, deliver and cause to be duly filed all such
further instruments and documents (including filings with the United States
Patent and Trademark Office or the United States Copyright Office) and take all
such actions as the Agent or any of the other Secured Parties may from time to
time request to better assure, preserve, protect and perfect the Security
Interest and the rights and remedies created hereby, including the payment of
any fees and taxes required in connection with the execution and delivery of
this Agreement, the granting of the Security Interest and the filing of any
financing statements (including fixture filings) or other documents in
connection herewith.
SECTION 4.6. Inspection and Verification. The Agent and such
persons as the Agent may reasonably designate shall have the right, at any
reasonable time or times and at the Assignor's own cost and expense, to inspect
the Collateral, all records related thereto (and to make extracts and copies
from such records) and the premises upon which any of the Collateral is located,
to discuss the Assignor's affairs with the officers of the Assignor and its
independent accountants and to verify under reasonable procedures the validity,
amount, quality, quantity, value, condition and status of or any other matter
relating to, the Collateral, including, in the case of Accounts or Collateral in
the possession of any third party, by contacting Account Debtors or the third
party possessing such Collateral for the purpose of making such a verification.
The Agent shall have the absolute right to share any information it gains from
such inspection or verification with any other Secured Party.
SECTION 4.7. Taxes; Insurance; Encumbrances. At its option,
the Agent may discharge past due taxes, assessments, charges, fees, liens,
security interests or other encumbrances at any time levied or placed on the
<PAGE>
Collateral and not permitted under the Loan Documents, and may pay for insurance
on or the maintenance and preservation of the Collateral to the extent the
Assignor fails to do so as required by this Agreement or the other Loan
Documents, and the Assignor agrees to reimburse the Agent on demand for any
payment made or any expense incurred by the Agent pursuant to the foregoing
authorization; provided, however, that nothing in this Section 4.7 shall be
interpreted as excusing the Assignor from the performance of, or imposing any
obligation on, the Agent or any other Secured Party to cure or perform, any
covenants or other promises of the Assignor with respect to insurance, taxes,
assessments, charges, fees, liens, security interests or other encumbrances and
maintenance as set forth herein or in the other Loan Documents.
SECTION 4.8. Assignment of Security Interest. If at any time
the Assignor shall take and perfect a security interest in any property of an
Account Debtor or any other person to secure payment and performance of an
Account, the Assignor shall promptly notify the Agent and, following request of
the Agent, assign such security interest to the Agent. Such assignment need not
be filed of public record unless necessary to continue the perfected status of
the security interest against creditors of and transferees from the Account
Debtor or other person granting the security interest.
SECTION 4.9. Continuing Obligations of the Assignor. The
Assignor shall remain liable to, at its own cost and expense, duly and
punctually, observe and perform all the conditions and obligations to be
observed and performed by it under each contract, agreement or instrument
relating to the Collateral, all in accordance with the terms and conditions
thereof, and the Assignor agrees to indemnify and hold harmless the Agent and
the other Secured Parties from and against any and all liability for such
performance.
SECTION 4.10. Use and Disposition of Collateral. The Assignor
may use but not dispose of the Collateral in any lawful manner not inconsistent
with the provisions of this Agreement, the respective Credit Agreement or any
Loan Document, except that the Assignor may dispose of Collateral to the extent
disposal would not be prohibited by provisions of the Loan Documents.
SECTION 4.11. Limitation on Modification of Accounts. The
Assignor will not, without the Agent's prior written consent, grant any
extension of the time of payment of any of the Accounts Receivable, compromise,
compound or settle the same for less than the full amount thereof, release,
wholly or partly, any person liable for the payment thereof or allow any credit
or discount whatsoever thereon, other than extensions, credits, discounts,
compromises or settlements granted or made in the ordinary course of business.
After a Default or an Event of Default shall have occurred and during the
continuance thereof, the Agent may notify the Assignor not to grant or make any
such extension, credit, discount, compromise, or settlement under any
circumstances without its prior written consent, in which case the Assignor
shall cease to grant or make any of the same.
ARTICLE V.
COLLECTIONS
SECTION 5.1. Collection Deposit Accounts. (a) If requested by
the Agent at any time, the Assignor shall establish and shall maintain one or
more Collection Deposit Accounts with the Agent or with any financial
institution that (i) is satisfactory to the Agent and (ii) enters into the
Lockbox Agreement. The provisions of this Article V shall apply only from and
after the date (the "Collection Deposit Account Activation Date") which is the
earlier of (x) the date of such request or the date of any Default or Event of
Default.
<PAGE>
(b) Unless and until the Collection Deposit Accounts are
converted to closed lockbox accounts pursuant to paragraph (c) below, the
Assignor may at any time withdraw any of the funds contained in a Collection
Deposit Account of the Assignor for use, subject to the provisions of the Loan
Documents, for general corporate purposes.
(c) Effective upon notice to the Assignor from the Agent after
the occurrence and during the continuance of an Event of Default (which notice
may be given by telephone if promptly confirmed in writing), each Collection
Deposit Account will, without any further action on the part of the Assignor,
the Agent or any Sub-Agent, convert into a closed lockbox account under the
exclusive dominion and control of the Agent in which funds are held subject to
the rights of the Agent hereunder. The Assignor shall thereafter have no right
or power to withdraw any funds from any Collection Deposit Account without the
prior written consent of the Agent until all Events of Default are cured or
waived. The Assignor irrevocably authorizes the Agent to notify each Sub-Agent
(i) of the occurrence of an Event of Default and (ii) of the matters referred to
in this paragraph (c). Following the occurrence of an Event of Default, the
Agent may instruct each Sub-Agent to transfer immediately all funds held in each
Collection Deposit Account to an account maintained with the Agent.
SECTION 5.2. Collections. (a) From and after the Collection
Deposit Account Activation Date, the Assignor agrees, upon request of the Agent,
to notify and direct promptly each Account Debtor and every other person
obligated to make payments with respect to the Accounts Receivable and Inventory
to make all such payments to a Collection Deposit Account established by it. The
Assignor shall use all reasonable efforts to cause each Account Debtor and every
other person identified in the preceding sentence to make all payments with
respect to the Accounts Receivable and Inventory directly to such Collection
Deposit Account.
(b) In the event that any Assignor directly receives any
remittances on Accounts Receivable or Inventory, notwithstanding the
arrangements for payment directly into the Collection Deposit Accounts, such
remittances shall be held in trust for the benefit of the Agent and the other
Secured Parties and shall be segregated from other funds of the Assignor,
subject to the Security Interest granted hereby, and the Assignor shall cause
such remittances and payments to be deposited into the applicable Collection
Deposit Account as soon as practicable after the Assignor's receipt thereof.
SECTION 5.3. Power of Attorney. The Agent is hereby appointed
by the Assignor as the true and lawful agent and attorney-in-fact of the
Assignor, and in such capacity the Agent shall have the right, with power of
substitution for the Assignor and in the Assignor's name or otherwise, for the
use and benefit of the Agent and the other Secured Parties, upon the occurrence
and during the continuance of an Event of Default, (a) to receive, endorse,
assign and/or deliver any and all notes, acceptances, checks, drafts, money
orders or other evidences of payment relating to the Collateral or any part
thereof; (b) to demand, collect, receive payment of, give receipt for and give
discharges and releases of all or any of the Collateral; (c) to sign the name of
the Assignor on any invoice or bill of lading relating to any of the Collateral;
(d) to send verifications of Accounts Receivable to any Account Debtor; (e) to
commence and prosecute any and all suits, actions or proceedings at law or in
equity in any court of competent jurisdiction to collect or otherwise realize on
all or any of the Collateral or to enforce any rights in respect of any
Collateral; (f) to settle, compromise, compound, adjust or defend any actions,
suits or proceedings relating to all or any of the Collateral; (g) to notify, or
to require the Assignor to notify, Account Debtors to make payment directly to
the Agent; and (h) to use, sell, assign, transfer, pledge, make any agreement
with respect to or otherwise deal with all or any of the Collateral, and to do
all other acts and things necessary to carry out the purposes of this Agreement,
as fully and completely as though the Agent were the absolute owner of the
Collateral for all purposes; provided, however, that nothing herein contained
<PAGE>
shall be construed as requiring or obligating the Agent or any other Secured
Party to make any commitment or to make any inquiry as to the nature or
sufficiency of any payment received by the Agent or any other Secured Party, or
to present or file any claim or notice, or to take any action with respect to
the Collateral or any part thereof or the moneys due or to become due in respect
thereof or any property covered thereby, and no action taken or omitted to be
taken by the Agent or any other Secured Party with respect to the Collateral or
any part thereof shall give rise to any defense, counterclaim or offset in favor
of the Assignor or to any claim or action against the Agent or any other Secured
Party. It is understood and agreed that the appointment of the Agent as the
agent and attorney-in-fact of the Assignor for the purposes set forth above is
coupled with an interest and is irrevocable. The provisions of this Section 5.3
shall in no event relieve the Assignor of any of its obligations hereunder or
under the other Loan Documents with respect to the Collateral or any part
thereof or impose any obligation on the Agent or any other Secured Party to
proceed in any particular manner with respect to the Collateral or any part
thereof, or in any way limit the exercise by the Agent or any other Secured
Party of any other or further right that it may have on the date of this
Agreement or hereafter, whether hereunder, under any other Financing Document,
by law or otherwise. Any sale pursuant to the provisions of this Section 5.3
shall be deemed to conform to the commercially reasonable standards as provided
in Section 9-504(3) of the Uniform Commercial Code as in effect in the State of
New York or its equivalent in other jurisdictions.
ARTICLE VI.
REMEDIES
SECTION 6.1. Remedies upon Default. Upon the occurrence and
during the continuance of an Event of Default, the Assignor agrees to deliver
each item of Collateral to the Agent on demand, and it is agreed that the Agent
shall have the right (subject to applicable law) to take any of or all the
following actions at the same or different times: (a) with respect to any
Collateral consisting of Intellectual Property, on demand, to cause the Security
Interest to become an assignment, transfer and conveyance of any of or all such
Collateral by the Assignor to the Agent, or to license or, to the extent
permitted by applicable law, sublicense, whether general, special or otherwise,
and whether on an exclusive or non-exclusive basis, any such Collateral
throughout the world on such terms and conditions and in such manner as the
Agent shall determine (other than in violation of any then-existing licensing
arrangements to the extent that waivers cannot be obtained), and (b) with or
without legal process and with or without previous notice or demand for
performance, to take possession of the Collateral (and temporary possession of
any non-Collateral in connection with any such repossession, with the right to
store, at the Assignor's expense and risk, such non-Collateral) and without
liability for trespass to enter any premises where the Collateral may be located
for the purpose of taking possession of or removing the Collateral and,
generally, to exercise any and all rights afforded to a secured party under the
Uniform Commercial Code or other applicable law. Without limiting the generality
of the foregoing, the Assignor agrees that the Agent shall have the right,
subject to the mandatory requirements of applicable law, to sell or otherwise
dispose of all or any part of the Collateral, at public or private sale or at
any broker's board or on any securities exchange, for cash, upon credit or for
future delivery as the Agent shall deem appropriate. The Agent shall be
authorized at any such sale (if it deems it advisable to do so) to restrict the
prospective bidders or purchasers to persons who will represent and agree that
they are purchasing the Collateral for their own account for investment and not
with a view to the distribution or sale thereof, and upon consummation of any
such sale the Agent shall have the right to assign, transfer and deliver to the
purchaser or purchasers thereof the Collateral so sold. Each such purchaser at
any such sale shall hold the property sold absolutely free from any claim or
right on the part of the Assignor, and the Assignor hereby waives (to the
fullest extent permitted by applicable law) all rights of redemption, stay and
appraisal that the Assignor now has or may at any time in the future have under
any rule of law or statute now existing or hereafter enacted.
<PAGE>
The Agent shall give the Assignor 10 days' written notice
(which the Assignor agrees is reasonable notice within the meaning of Section
9-504(3) of the Uniform Commercial Code as in effect in the State of New York or
its equivalent in other jurisdictions) of the Agent's intention to make any sale
of Collateral. Such notice, in the case of a public sale, shall state the time
and place for such sale and, in the case of a sale at a broker's board or on a
securities exchange, shall state the board or exchange at which such sale is to
be made and the day on which the Collateral, or portion thereof, will first be
offered for sale at such board or exchange. Any such public sale shall be held
at such time or times within ordinary business hours and at such place or places
as the Agent may fix and state in the notice (if any) of such sale. At any such
sale, the Collateral, or portion thereof, to be sold may be sold in one lot as
an entirety or in separate parcels, as the Agent may (in its sole and absolute
discretion) determine. The Agent shall not be obligated to make any sale of any
Collateral if it shall determine not to do so, regardless of the fact that
notice of sale of such Collateral shall have been given. The Agent may, without
notice or publication, adjourn any public or private sale or cause the same to
be adjourned from time to time by announcement at the time and place fixed for
sale, and such sale may, without further notice, be made at the time and place
to which the same was so adjourned. In case any sale of all or any part of the
Collateral is made on credit or for future delivery, the Collateral so sold may
be retained by the Agent until the sale price is paid by the purchaser or
purchasers thereof, but the Agent shall not incur any liability in case any such
purchaser or purchasers shall fail to take up and pay for the Collateral so sold
and, in case of any such failure, such Collateral may be sold again upon like
notice. At any public sale made pursuant to this Section 6.1, any Secured Party
may bid for or purchase, free (to the fullest extent permitted by applicable
law) from any right of redemption, stay, valuation or appraisal on the part of
the Assignor (all said rights being also hereby waived and released to the
extent permitted by law), the Collateral or any part thereof offered for sale
and may make payment on account thereof by using any claim then due and payable
to such Secured Party from the Assignor as a credit against the purchase price,
and such Secured Party may, upon compliance with the terms of sale, hold, retain
and dispose of such property without further accountability to the Assignor
therefor. For purposes hereof, a written agreement to purchase the Collateral or
any portion thereof shall be treated as a sale thereof; the Agent shall be free
to carry out such sale pursuant to such agreement and the Assignor shall not be
entitled to the return of the Collateral or any portion thereof subject thereto,
notwithstanding the fact that after the Agent shall have entered into such an
agreement all Events of Default shall have been remedied and the Obligations
paid in full; provided, however, that in the event the Obligations shall have
been paid in full, the Assignor shall be entitled to the return of the proceeds
of the sale of any such Collateral to the extent not applied to payment of the
Obligations. As an alternative to exercising the power of sale herein conferred
upon it, the Agent may proceed by a suit or suits at law or in equity to
foreclose this Agreement and to sell the Collateral or any portion thereof
pursuant to a judgment or decree of a court or courts having competent
jurisdiction or pursuant to a proceeding by a court-appointed receiver. Any sale
pursuant to the provisions of this Section 6.1 shall be deemed to conform to the
commercially reasonable standards as provided in Section 9-504(3) of the Uniform
Commercial Code as in effect in the State of New York or its equivalent in other
jurisdictions. The Assignor will remain liable for any deficiency in the payment
of the Obligations.
SECTION 6.2. Application of Proceeds. The Agent shall apply
the proceeds of any collection or sale of the Collateral, as well as any
Collateral consisting of cash, as follows:
<PAGE>
FIRST, to the payment of all costs and expenses incurred by
the Agent (in its capacity as such hereunder or under any other Loan
Document) in connection with such collection or sale or otherwise in
connection with this Agreement or any of the Obligations, including all
court costs and the fees, other charges and expenses of its agents and
legal counsel, the repayment of all advances made by the Agent hereunder
or under any other Loan Document on behalf of the Assignors and any
other costs or expenses incurred in connection with the exercise of any
right or remedy hereunder or under any other Loan Document;
SECOND, to the payment of the Secured Obligations in such
order as the Agent may determine in its sole discretion; and
THIRD, to the Assignor, its successors or assigns, or as a
court of competent jurisdiction may otherwise direct.
The Agent shall have absolute discretion as to the time of
application of any such proceeds, moneys or balances in accordance with this
Agreement. Upon any sale of the Collateral by the Agent (including pursuant to a
power of sale granted by statute or under a judicial proceeding), the receipt by
the Agent or of the officer making the sale shall be a sufficient discharge to
the purchaser or purchasers of the Collateral so sold and such purchaser or
purchasers shall not be obligated to see to the application of any part of the
purchase money paid over to the Agent or such officer or be answerable in any
way for the misapplication thereof.
SECTION 6.3. Grant of License to Use Intellectual Property.
For the purpose of enabling the Agent to exercise rights and remedies under this
Section 6.3 at such time as the Agent shall be lawfully entitled to exercise
such rights and remedies, the Assignor hereby grants to the Agent an
irrevocable, non-exclusive license (exercisable without payment of royalty or
other compensation to the Assignor) to use, license or sub-license any of the
Collateral consisting of Intellectual Property now owned or hereafter acquired
by the Assignor, and wherever the same may be located, and including in such
license reasonable access to all media in which any of the licensed items may be
recorded or stored and to all computer software and programs used for the
compilation or printout thereof. The use of such license by the Agent shall be
exercised, at the option of the Agent, upon the occurrence and during the
continuation of an Event of Default, provided that any license, sub-license or
other transaction entered into by the Agent in accordance herewith shall be
binding upon the Assignor notwithstanding any subsequent cure of an Event of
Default.
ARTICLE VII.
MISCELLANEOUS
SECTION 7.1. Notices. All communications and notices hereunder
shall (except as otherwise expressly permitted herein) be in writing and given
as provided in Section 10.5 of the Credit Agreement. All communications and
notices hereunder to the Agent shall be given to it at its address set forth in
Schedule II hereto.
SECTION 7.2. Absolute and Unconditional Obligations.. All
rights of the Agent hereunder, the Security Interest and all obligations of the
Assignor hereunder shall be absolute and unconditional irrespective of (a) any
lack of validity or enforceability of any Loan Document, any agreement with
respect to any of the Obligations or any other agreement or instrument relating
to any of the foregoing, (b) any change in the time, manner or place of payment
of, or in any other term of, all or any of the Obligations or any other
<PAGE>
amendment or waiver of or any consent to any departure from any Credit
Transaction Document or any other agreement or instrument, (c) any exchange,
release or non-perfection of any Lien on other Collateral, or any release or
amendment or waiver of or consent under or departure from any guarantee,
securing or guaranteeing all or any of the Obligations or (d) any other
circumstance that might otherwise constitute a defense available to, or a
discharge of, the Assignor in respect of the Obligations or in respect of this
Agreement (other than the indefeasible payment in full of all the Obligations).
The Agent may resort to the Assignor hereunder for the payment of the
Obligations whether or not the Agent shall have resorted to any other property
of any person securing the Obligations or shall have proceeded against any other
obligor primarily or secondarily obligated with respect to any of the
Obligations.
SECTION 7.3. Survival of Agreement. All covenants, agreements,
representations and warranties made by the Assignor herein and in the
certificates or other instruments prepared or delivered in connection with or
pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the Secured Parties and shall survive the execution and
delivery of the Notes, regardless of any investigation made by the Secured
Parties or on their behalf, and shall continue in full force and effect as long
as the principal of or any accrued interest on, or any other fee or amount
payable under or in respect of, any Note or this Agreement or, without
duplication of the foregoing, under any of the other Loan Documents is
outstanding and unpaid.
SECTION 7.4. Binding Effect; Assignments. This Agreement shall
become effective as to the Assignor when a counterpart hereof executed on behalf
of the Assignor shall have been delivered to the Agent and a counterpart hereof
shall have been executed on behalf of the Agent, and thereafter shall be binding
upon the Assignor and the Agent and their respective successors and assigns, and
shall inure to the benefit of the Assignor, the Agent and the other Secured
Parties and their respective successors and assigns, except that the Assignor
shall not have the right to assign its rights hereunder or any interest herein
or in the Collateral (and any such attempted assignment shall be void) except as
expressly contemplated by this Agreement or the other Loan Documents.
SECTION 7.5. Successors and Assigns. Whenever in this
Agreement any of the parties hereto is referred to, such reference shall be
deemed to include the successors and assigns of such party; and all covenants,
promises and agreements by or on behalf of the Assignor or the Agent that are
contained in this Agreement shall bind and inure to the benefit of their
respective successors and assigns.
SECTION 7.6. Agent's Fees and Expenses; Indemnification. (a)
The Assignor agrees to pay upon demand to the Agent the amount of any and all
reasonable expenses, including the reasonable fees and expenses of its counsel
and of any experts or agents, that the Agent may incur in connection with (i)
the administration of this Agreement (including the customary fees of the Agent
for any audits conducted by it with respect to the Accounts Receivable or
Inventory), (ii) the custody or preservation of, or the sale of, collection from
or other realization upon any of the Collateral, (iii) the exercise, enforcement
or protection of any of the rights of the Agent hereunder or (iv) the failure of
the Assignor to perform or observe any of the provisions hereof. If the Assignor
shall fail to do any act or thing that it has covenanted to do hereunder or any
representation or warranty of the Assignor hereunder shall be breached, the
Agent may (but shall not be obligated to) do the same or cause it to be done or
remedy any such breach and there shall be added to and deemed part of the
Obligations the cost or expense incurred by the Agent in so doing.
(b) Without limitation of its indemnification obligations
under the other Loan Documents, the Assignor agrees to indemnify the Agent, the
Secured Parties and the other Indemnitees against, and hold each of them
<PAGE>
harmless from, any and all losses, claims, damages, liabilities and related
expenses, including reasonable counsel fees and expenses, incurred by or
asserted against any of them arising out of, in any way connected with, or as a
result of, the execution, delivery or performance of this Agreement or any
claim, litigation, investigation or proceeding relating hereto or to the
Collateral, whether or not any Indemnitee is a party thereto, provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses are determined by a
court of competent jurisdiction by final and nonappealable judgment to have
resulted from the gross negligence or willful misconduct of such Indemnitee.
(c) Any amounts payable as provided hereunder shall be
additional Obligations secured hereby and by the other Security Documents. The
provisions of this Section 7.6 shall remain operative and in full force and
effect regardless of the termination of this Agreement, the consummation of the
transactions contemplated hereby, the repayment of any of the Obligations, the
invalidity or unenforceability of any term or provision of this Agreement or any
other Loan Document or any investigation made by or on behalf of the Agent or
any other Secured Party. All amounts due under this Section 7.6 shall be payable
on written demand therefor and shall bear interest at the rate provided for in
the Notes in respect of the payment of overdue principal and interest on the
Notes.
SECTION 7.7. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 7.8. Waivers; Amendment. (a) No failure or delay of
the Agent or any other Secured Party in exercising any power or right hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right or power, or any abandonment or discontinuance of steps to
enforce such a right or power, preclude any other or further exercise thereof or
the exercise of any other right or power. The rights and remedies of the Agent
hereunder and of the other Secured Parties under the other Loan Documents are
cumulative and are not exclusive of any rights or remedies that they would
otherwise have. No waiver of any provisions of this Agreement or any other Loan
Document or consent to any departure by the Assignor therefrom shall in any
event be effective unless the same shall be permitted by paragraph (b) below,
and then such waiver or consent shall be effective only in the specific instance
and for the purpose for which given. No notice or demand on the Assignor in any
case shall entitle the Assignor to any other or further notice or demand in
similar or other circumstances.
(b) Neither this Agreement nor any provision hereof may be
waived, amended or modified except pursuant to a written agreement entered into
by the Assignor and the Agent, with the prior written consent of the Agent and
the holders of the Notes; provided, however, that except as provided herein or
in the other Loan Documents, no such agreement shall amend, modify, waive or
otherwise adversely affect a Secured Party's rights and interests in any
material amount of the Collateral without the prior written consent of such
Secured Party.
SECTION 7.9. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING
OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN
INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS
APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN
THIS SECTION 7.9.
<PAGE>
SECTION 7.10. Severability. In the event any one or more of
the provisions contained in this Agreement or in any other Loan Document should
be held invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein and therein
shall not in any way be affected or impaired thereby (it being understood that
the invalidity of a particular provision in a particular jurisdiction shall not
in and of itself affect the validity of such provision in any other
jurisdiction). The parties shall endeavor in good-faith negotiations to replace
the invalid, illegal or unenforceable provisions with valid provisions, the
economic effect of which comes as close as possible to that of the invalid,
illegal or unenforceable provisions.
SECTION 7.11. Jurisdiction; Consent to Service of Process. (a)
The Assignor hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of any New York State court or
Federal court of the United States of America sitting in New York City, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or the other Loan Documents, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court. Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement shall affect any right that the Agent
or any other Secured Party may otherwise have to bring any action or proceeding
relating to this Agreement or the other Loan Documents against the Assignor or
its properties in the courts of any jurisdiction.
(b) The Assignor hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection that it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement or the other
Loan Documents in any New York State or Federal court. Each of the parties
hereto hereby irrevocably waives, to the fullest extent permitted by law, the
defense of an inconvenient forum to the maintenance of such action or proceeding
in any such court.
(c) Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in Section 7.1. Nothing in
this Agreement will affect the right of any party to this Agreement to serve
process in any other manner permitted by law.
SECTION 7.12. Termination or Release. (a) This Agreement and
the Security Interest shall terminate when all the Obligations have been
indefeasibly paid in full in cash and the Lenders shall have no further
obligations under the Loan Documents.
(b) Upon (i) any sale by the Assignor of any Collateral
that is permitted under the Credit Agreement, or (ii) the effectiveness of any
written consent to the release of the Security Interest in any Collateral
pursuant to the Credit Agreement, the Security Interest in such Collateral (but
not the proceeds thereof) shall be automatically released.
<PAGE>
(c) In connection with any termination or release pursuant to
paragraphs (a) or (b) the Agent shall execute and deliver to the Assignor, at
the Assignor's expense, all Uniform Commercial Code termination statements,
documents in order to terminate any United States Patent and Trademark Office
and United States Copyright Office filings and similar documents that the
Assignor shall reasonably request to evidence such termination or release. Any
execution and delivery of termination statements or documents pursuant to this
Section 7.12 shall be without recourse to or warranty by the Agent.
SECTION 7.13. Headings. Article and Section headings used
herein are for convenience of reference only, are not part of this Agreement and
are not to affect the construction of, or to be taken into consideration in
interpreting, this Agreement.
SECTION 7.14. Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall constitute an original but all of
which when taken together shall constitute but one contract.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
AMERICOLD CORPORATION
By:
----------------------
Name:
Title:
GOLDMAN SACHS MORTGAGE COMPANY, a New
York limited partnership, as Agent
By: Goldman Sachs Real Estate Funding
Corp., its General Partner
By:
-----------------------
Name:
Title:
<PAGE>
1.ANNEX I
PERFECTION CERTIFICATE
Reference is made to (a) the Credit Agreement dated as of
October 30, 1997 (as further amended from time to time, the "Credit Agreement"),
among Americold Corporation, an Oregon corporation (the "Assignor"), Vornado
Crescent Portland Partnership, a Delaware general partnership (the "Joint
Venture"), and Goldman Sachs Mortgage Company, a New York limited partnership,
individually and as Agent (the "Agent"), and (b) the Security Agreement, dated
as of October 31, 1997 (as amended from time to time, the "Security Agreement"),
among the Assignor and the Agent. Capitalized terms used and not defined herein
shall have the meanings assigned to such terms in the Credit Agreement and the
Security Agreement, as applicable.
Under the Security Agreement, the Assignor is a grantor of a
security interest in the Collateral as defined therein.
The undersigned, the Financial Officer of the Assignor, hereby
certifies to the Agent and each other Secured Party as follows:
1. Names.
(a) The exact corporate name of the Assignor under the
Security Agreement, as such name appears in its certificate of incorporation, is
as follows:
(b) Set forth below is each other corporate name the Assignor
has had since its organization, together with the date of the relevant change:
Original Corporate Name:
Corporate Name Change:
(c) Except as set forth in Schedule 1, the Assignor has not
changed its identity or corporate structure in any way within the past five
years.
[Changes in identity or corporate structure would include
mergers, consolidations and acquisitions, as well as any change in the form,
nature or jurisdiction of corporate organization. If any such change has
occurred, include in Schedule 1, as applicable, the information required by
Sections 1 and 2 of this certificate as to each acquired or constituent party to
a merger or consolidation.]
1.1 The following is list of all other names (including
trade names or similar appellations) used by the Assignor or any of its
divisions or other business units in connection with the conduct of its business
or the ownership of its properties as they relate to the business conducted by
the Assignor at any time during the past five years:
2. Current Locations.
(a) The chief executive office of the Assignor is located at
the following address:
Mailing Address County State
- -------------------------------------------------------------------------------
(b) The following are all locations where the Assignor
maintains any books or records relating to any Accounts Receivable:
Mailing Address County State
- --------------------------------------------------------------------------------
(c) The following are all the places of business of the
Assignor not identified above:
Mailing Address County State
- -------------------------------------------------------------------------------
(d) The following are all the locations where the Assignor
maintains, any Inventory not identified above:
Mailing Address County State
- -------------------------------------------------------------------------------
(e) The following are the names and addresses of all persons
other than the Assignor who have possession of any of the Assignor's Inventory:
Name Mailing Address County State
- -------------------------------------------------------------------------------
3. Unusual Transactions. All Accounts Receivable have been
originated by the Assignor and all Inventory has been acquired by the Assignor
in the ordinary course of its business.
4. File Search Reports. Attached hereto as Schedule 4(A) are
true copies of file search reports from the Uniform Commercial Code filing
offices where filings described in Section 5 hereof are to be made. Attached
hereto as Schedule 4(B) is a true copy of each financing statement or other
filing identified in such file search reports.
5. UCC Filings. A duly signed Uniform Commercial Code
financing statement (including fixture filings, as applicable) in substantially
the form of Schedule 5 hereto has been delivered to the Agent for filing in the
Uniform Commercial Code filing office in each jurisdiction identified in Section
2 hereof.
6. Schedule of Filings. Attached hereto as Schedule 6 is a
schedule setting forth, with respect to the filings described in Section 5
above, each filing office in which such filings are to be made.
7. Mortgage Filings. Attached hereto as Schedule 7 is a
schedule setting forth, with respect to each of the real properties to be
subject to a Mortgage under the Credit Agreement owned by the Assignor, (a) the
exact corporate name of the Corporation that owns such property as such name
appears in its certificate of incorporation, (b) if different than the name
identified pursuant to clause (a), the exact name of the current record owner of
such property reflected in the records of the filing office for such property
identified pursuant to the following clause and (c) the filing office in which a
Mortgage with respect to such property must be filed or recorded in order for
the Agent to obtain a perfected lien thereon.
IN WITNESS WHEREOF, I have hereunto set my hand the ____ day
of ________, ____.
[FINANCIAL OFFICER]
By:___________________________
Name:
Title:
FORM OF
AMERICOLD SERVICES CORPORATION SECURITY AGREEMENT
SECURITY AGREEMENT dated as of October 31, 1997 (this
"Agreement"), between Americold Services Corporation, a Delaware corporation
(the "Assignor"), and Goldman Sachs Mortgage Company, a New York limited
partnership, in its capacity as Agent under that certain Credit Agreement
described below (the "Agent").
W I T N E S S E T H:
WHEREAS, pursuant to a certain Credit Agreement dated as of
October 30, 1997 (as at any time amended, modified or supplemented, the "Credit
Agreement"), among Assignor, Americold Corporation, an Oregon corporation
("Americold"), Vornado Crescent Portland Partnership, a Delaware general
partnership (the "Joint Venture"), Goldman Sachs Mortgage Company, a New York
limited partnership, as Agent and as Lender, and the other Lenders from time to
time a party thereto, the Lenders have agreed, subject to all of the terms and
conditions therein set forth, to make a loan to Joint Venture and loans to
Americold in the aggregate principal amount of up to $ 379.6 million
(collectively, the "Loan") (any capitalized term used but not defined herein
shall have the meaning given such term in the Credit Agreement);
WHEREAS, Assignor is a wholly-owned subsidiary of Americold
and, as such, will receive benefits from the above-described Loan;
WHEREAS, Assignor is Guarantor under the Credit Agreement,
and, as such, has unconditionally guaranteed any and all Obligations (as defined
herein) under the Loan Documents;
WHEREAS, in connection with the making of the Loan under the
Credit Agreement and as security for the payment of the Secured Obligations (as
defined in the Credit Agreement and herein called the "Obligations"), Agent on
behalf of the Lenders is requiring that Assignor execute and deliver this
Agreement and grant the security interests contemplated hereby, and Assignor
desires to assign all of its rights, title and interest in and to the Collateral
(as hereinafter defined) to Agent on behalf of the Bank as additional collateral
for the payment in full of the Obligations.
NOW, THEREFORE, in consideration of the premises and the
covenants hereinafter contained, and to induce the Lenders and Agent to execute
and deliver the Credit Agreement and the other Loan Documents and to induce the
Lenders to make the Loan, it is agreed as follows:
Article I.
DEFINITIONS
SECTION 1.1. Definition of Terms Used Herein. All capitalized
terms used but not defined herein shall have the meanings set forth in the other
Loan Documents.
SECTION 1.2. Definition of Certain Terms Used Herein. As used
herein, the following terms shall have the following meanings:
"Account Debtor" shall mean any person who is or who may
become obligated to the Assignor under, with respect to or on account of an
Account.
"Accounts" shall mean, with respect to the Assignor, any and
all right, title and interest of the Assignor to payment for goods and services
sold or leased (exclusive of any liabilities of the Assignor with respect
thereto), including any such right evidenced by chattel paper, whether due or to
become due, whether or not it has been earned by performance, and whether now or
hereafter acquired or arising in the future, including, without limitation,
accounts receivable from Affiliates of the Assignor.
"Accounts Receivable" shall mean, with respect to the
Assignor, all right, title and interest of the Assignor to all "accounts", as
such term is defined in the Uniform Commercial Code, and to Accounts and all of
the Assignor's right, title and interest in any returned goods, together with
all rights, titles, securities and guaranties with respect thereto, including
any rights to stoppage in transit, replevin, reclamation and resales, and all
related security interests, liens and pledges, whether voluntary or involuntary,
whether due or to become due, whether now or hereafter arising in the future.
"Agent" shall mean the agent, if any, for the Lenders under
the Credit Agreement.
"Collateral" shall shall mean all (a) Accounts Receivable, (b)
Documents, (c) Equipment (including, without limitation, Fixtures), (d) General
Intangibles, (e) Inventory, (f) Instruments, (g) Proceeds, (h) Investment
Property as defined in the Uniform Commercial Code, including the capital stock
(and all rights relating thereto, including rights to dividends, to vote and to
all distributions of any Person, including the Persons set forth on Schedule III
hereto) and (i) Collection Deposit Accounts and all other cash and cash
accounts; provided, that, as to any particular item described in clauses (a)
through (i) above, (i) whether or not there shall exist a Lien on such item
under any other agreement, if the creation of a Lien hereunder on such item
would violate the terms of any agreement listed below (a "Listed Agreement"),
the Lien hereunder shall not attach to such item (which shall not constitute
"Collateral" subject hereto until attachment) until the earlier of (x) the
repayment of the indebtedness incurred under such Listed Agreement secured by
such item and, if applicable, the termination of any further commitment to lend
and (y) the time such violation would no longer exist, and (ii) if the item is
subject to a perfected Lien thereon on the date hereof created under any Listed
Agreement, the Lien created by this Agreement shall not attach to such item
until the earlier of (x) the release of such item from the Lien of such other
agreement and (y) the indebtedness under such other agreement secured by such
item shall have been repaid. The Listed Agreements are: (a) the Amended and
Restated Indenture dated as of March 9, 1993, as amended, between Americold
Corporation, as issuer, and Fleet National Bank, formerly known as Shawmut Bank
Connecticut, as Trustee, (b) the $34 Million Credit Documents, which are listed
on Schedule III hereto and (c) the Credit Agreement, dated as of June 19, 1995,
between Americold Corporation and the United States National Bank of Oregon for
$27,500,000.
"Collection Deposit Account" shall mean a lockbox account of
the Assignor maintained for the benefit of the Secured Parties with the Agent
pursuant to Article V or with a Sub-Agent pursuant to a Lockbox Agreement.
"Collection Deposit Account Activation Date" shall have the
meaning given to it in Section 5.1.
<PAGE>
"Credit Agreement" shall have the meaning as set forth in the
first Whereas clause hereunder.
"Default" shall mean any "Default" as defined in the Credit
Agreement.
"Documents" shall mean all instruments, files, records, ledger
sheets and documents covering or relating to any of the Collateral.
"Equipment" shall mean all "equipment", as such term is
defined in the Uniform Commercial Code, and all equipment, machinery, apparatus,
furniture and furnishings, conveyors, rolls, attachments, storage and handling
equipment, automotive equipment, motor vehicles, trucks, trailers, boats,
vessels, aircraft and rolling stock and parts thereof and all other tangible
personal property similar to any of the foregoing, including tools, parts and
supplies of every kind and description, and all improvements, accessions or
appurtenances thereto, that are now or hereafter owned by the Assignor. The term
"Equipment" shall include Fixtures.
"Event of Default" shall mean any "Event of Default" as
defined in the Credit Agreement.
"Fixtures" shall mean all items of Equipment, whether now
owned or hereafter acquired, of the Assignor that become so related to
particular real estate that an interest in them arises under any real estate law
applicable thereto.
"General Intangibles" shall mean all "general intangibles", as
such term is defined in the Uniform Commercial Code, and all chooses in action
and causes of action and all other assignable intangible personal property of
the Assignor of every kind and nature (other than Accounts Receivable) now owned
or hereafter acquired by the Assignor, including corporate or other business
records, indemnification claims, customer lists, contract rights (including
rights under leases, whether entered into as lessor or lessee, but excluding
rights under any agreement in existence on the date hereof as to which the
granting of the security interest granted hereby would constitute a breach),
Intellectual Property, goodwill, registrations, franchises, tax refund claims
and any letter of credit, guarantee, claim, security interest or other security
held by or granted to the Assignor to secure payment by an Account Debtor of any
of the Accounts Receivable.
"Indemnitee" shall mean any "Indemnitee" as defined in the
Credit Agreement.
"Instruments" shall mean all "instruments," "chattel paper,"
and "letters of credit" (each as defined in the Uniform Commercial Code),
including, but not limited to, promissory notes, drafts, bills of exchange and
trade acceptances, now owned or hereafter acquired by the Assignor.
"Inventory" shall mean all "inventory", as such term is
defined in the Uniform Commercial Code, and all goods of the Assignor, whether
now owned or hereafter acquired, held for sale or lease, or furnished or to be
furnished by the Assignor under contracts of service, or consumed in the
Assignor's business, including raw materials, intermediates, work in process,
packaging materials, finished goods, semi-finished inventory, scrap inventory,
manufacturing supplies and spare parts, and all such goods that have been
returned to or repossessed by or on behalf of the Assignor.
"Intellectual Property" shall mean all intellectual and
similar property of the Assignor of every kind and nature now owned or hereafter
acquired by the Assignor, including inventions, designs, patents, patent
<PAGE>
applications, copyrights, copyright registrations, applications to register
copyrights, Licenses, trademarks and service marks and the goodwill associated
therewith, trademark or service mark applications, trade names, trade secrets,
confidential or proprietary technical and business information, know-how,
show-how or other data or information, software and databases and all
embodiments or fixations thereof and related documentation, registrations and
franchises, and all additions, improvements and accessions to, and books and
records describing or used in connection with, any of the foregoing.
"Lenders" shall mean the lenders party from time to time to
the Credit Agreement.
"License" shall mean any patent license, copyright license,
trademark license or other license or sublicense to which the Assignor is or
becomes a party, including those listed on Schedule I (other than those license
agreements in existence as of the date hereof and listed on Schedule I, and
those license agreements entered into after the date hereof, that by their terms
prohibit assignment or a grant of a security interest by the Assignor as
licensee thereunder).
"Loan Documents" shall mean the Loan Documents (as such term
is defined in the Credit Agreement).
"Lockbox Agreement" shall mean the lockbox agreement and/or
amended and restated lockbox agreement among the Assignor, the Agent and a
Sub-Agent (as defined in the Lockbox Agreement), in a form as the Agent may
specify.
"Notes" shall have the meaning assigned to such term in the
Credit Agreement.
"Obligations" shall have the meaning assigned to such term in
the preliminary statement of this Agreement.
"Proceeds" shall mean any consideration received from the
sale, exchange, license, lease or other disposition of any asset or property
that constitutes Collateral, any value received as a consequence of the
possession of any Collateral and any payment received from any insurer or other
person or entity as a result of the destruction, loss, theft, damage or other
involuntary conversion of whatever nature of any asset or property that
constitutes Collateral, and shall include (a) all cash and negotiable
instruments received or held on behalf of the Agent pursuant to the Lockbox
Agreement or any other lockbox or similar arrangement relating to the payment of
Accounts Receivable and Inventory and (b) any claim of the Assignor against any
third party for (and the right to sue and recover for and the rights to damages
or profits due or accrued arising out of or in connection with) (i) past,
current or future infringement of any patent now or hereafter owned by the
Assignor or licensed under a patent license, (ii) past, current or future breach
of any License, (iii) past, current or future infringement of any copyright now
or hereafter owned by the Assignor or licensed under a copyright license and
(iv) any and all other amounts from time to time paid or payable under or in
connection with any of the Collateral.
"Secured Parties" shall mean the Agent and the Lenders and the
successors and assigns of each of the foregoing.
"Security Interest" shall have the meaning assigned to such
term in Section 2.1.
"Sub-Agent" shall mean a financial institution that shall have
delivered to the Agent an executed Lockbox Agreement.
<PAGE>
"Uniform Commercial Code" shall mean the Uniform Commercial
Code of the State of New York, or other applicable jurisdiction, as in effect
from time to time.
SECTION 1.3. Rules of Interpretation. The rules of
interpretation specified in Section 1.2 of the Credit Agreement shall be
applicable to this Agreement.
ARTICLE II.
SECURITY INTEREST
SECTION 2.1. Security Interest. As security for the payment or
performance, as the case may be, of the Obligations, the Assignor hereby
bargains, sells, conveys, assigns, sets over, mortgages, pledges, hypothecates
and transfers to the Agent, its successors and its assigns, for the ratable
benefit of the Secured Parties, and hereby grants to the Agent, its successors
and assigns, for the benefit of the Secured Parties, a security interest in, all
of the Assignor's right, title and interest in, to and under the Collateral (the
"Security Interest"). Without limiting the foregoing, the Agent is hereby
authorized to file one or more financing statements (including fixture filings),
continuation statements, filings with the United States Patent and Trademark
Office or United States Copyright Office (or any successor office or any similar
office in any other country) or other documents for the purpose of perfecting,
confirming, continuing, enforcing or protecting the Security Interest granted by
the Assignor, without the signature of the Assignor, naming the Assignor as
debtor and the Agent as secured party.
To the extent permitted by law, the lien of the Security
Interest hereunder shall attach to the Collateral immediately.
The Assignor agrees at all times to keep accurate and complete
accounting records with respect to the Collateral, including a record of all
payments and Proceeds received in respect thereof.
SECTION 2.2. No Assumption of Liability. The Security Interest
is granted as security only and shall not subject the Agent or any other Secured
Party to, or in any way alter or modify, any obligation or liability of the
Assignor with respect to or arising out of any of the Collateral.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
The Assignor represents and warrants to and with the Agent and
each other Secured Party that:
SECTION 3.1. Title and Authority. The Assignor has good and
valid rights in and title to the Collateral with respect to which it has
purported to grant a Security Interest hereunder and has full power and
authority to grant to the Agent the Security Interest in such Collateral
pursuant hereto and to execute, deliver and perform its obligations in
accordance with the terms of this Agreement, without the consent or approval of
any other person other than any consent or approval that has been obtained.
SECTION 3.2. Filings. The Perfection Certificate has been duly
prepared, completed and executed and the information set forth therein is
correct and complete. Fully executed Uniform Commercial Code financing
<PAGE>
statements (other than fixture filings, as applicable) or other appropriate
filings, recordings or registrations containing a description of the Collateral
have been delivered to the Agent for filing in each governmental, municipal or
other office specified in Schedule 6 to the Perfection Certificate, which are
all the filings, recordings and registrations that are necessary to publish
notice of and protect the validity of and to establish a legal, valid and
perfected security interest in favor of the Agent (for the benefit of the
Secured Parties) in respect of all Collateral in which the Security Interest may
be perfected by filing, recording or registration under the UCC in the United
States (or any political subdivision thereof) and its territories and
possessions, except for farm equipment, timber, minerals, fixtures, or
collateral whose ownership interest is evidenced by a certificate or other
instrument, or vehicle titles, and no further or subsequent filing, refiling,
recording, rerecording, registration or reregistration is necessary in any such
jurisdiction, except as provided under applicable law with respect to the filing
of continuation statements.
SECTION 3.3. Validity of Security Interest. The Security
Interest constitutes (a) a legal and valid security interest in all the
Collateral securing the payment and performance of the Obligations and (b)
subject to the filings described in Section 3.2 above, a perfected security
interest in all Collateral in which a security interest may be perfected by
filing, recording or registering a financing statement or analogous document in
the United States (or any political subdivision thereof) and its territories and
possessions pursuant to the Uniform Commercial Code, except for farm equipment,
timber, minerals, fixtures, or collateral whose ownership interest is evidenced
by a certificate or other instrument, or vehicle titles. The Security Interest
is and shall be prior to any other Lien on any of the Collateral, other than
Liens expressly permitted to be prior to the Security Interest pursuant to
Section 6.2 of the Credit Agreement.
SECTION 3.4. Absence of Other Liens. The Collateral is owned
by the Assignor free and clear of any Lien, except for Liens expressly permitted
pursuant to Section 6.2 of the Credit Agreement. Other than as contemplated
hereby, the Assignor has not filed or consented to the filing of (a) any
financing statement or analogous document under the Uniform Commercial Code or
any other applicable laws covering any Collateral, (b) any assignment in which
the Assignor assigns any Collateral or any security agreement or similar
instrument covering any Collateral with the United States Patent and Trademark
Office or the United States Copyright Office nor (c) any assignment in which the
Assignor assigns any Collateral or any security agreement or similar instrument
covering any Collateral with any foreign governmental, municipal or other
office.
ARTICLE IV.
COVENANTS
SECTION 4.1. Change of Name; Location of Collateral; Records;
Place of Business. (a) The Assignor agrees promptly to notify the Agent of any
change (i) in its corporate name or in any trade name used to identify it in the
conduct of its business or in the ownership of its properties, (ii) in the
location of its chief executive office, its principal place of business, any
office in which it maintains books or records relating to Collateral owned by it
or any office or facility at which Collateral owned by it is located (including
the establishment of any such new office or facility) or (iii) in its identity
or corporate structure. The Assignor agrees not to effect or permit any change
referred to in the preceding sentence unless all filings have been made under
the Uniform Commercial Code or otherwise that are required in order for the
Agent to continue at all times following such change to have a valid, legal and
perfected security interest in all the Collateral. The Assignor agrees promptly
to notify the Agent if any material portion of the Collateral is damaged or
destroyed.
<PAGE>
(b) The Assignor agrees to maintain, at its own cost and
expense, complete and accurate records with respect to the Collateral owned by
it and, at such time or times as the Agent may request, promptly to prepare and
deliver to the Agent a duly certified schedule or schedules in form and detail
satisfactory to the Agent showing the identity, amount and location of any and
all Collateral.
SECTION 4.2. Periodic Certification. Each quarter, commencing
with the quarter ending on June 30, 1998, at the time of delivery of quarterly
financial statements by the Assignor with respect to the preceding fiscal
quarter pursuant to Section 5.1(b) of the Credit Agreement, the Assignor shall
deliver to the Agent a certificate executed by a Financial Officer of the
Assignor (a) setting forth the information required pursuant to Section 2 of the
Perfection Certificate, (b) certifying that all Uniform Commercial Code
financing statements (including fixture filings, as applicable), filings with
the United States Patent and Trademark Office and appropriate state offices with
respect to state registered trademarks or the United States Copyright Office, or
other appropriate filings, recordings or registrations, including all refilings,
rerecordings and reregistrations, containing a description of the Collateral
have been filed of record in each governmental, municipal or other appropriate
office in each jurisdiction identified pursuant to clause (a) above to the
extent necessary to protect and perfect the Security Interest for a period of
not less than 18 months after the date of such certificate, (c) setting forth,
with respect to each filing, recording or registration (including each refiling,
rerecording or reregistration) made since the date of the Perfection Certificate
or the most recent certificate delivered pursuant to this Section 4.2, the
filing office, date and file number thereof, (d) attaching true, correct and
complete acknowledgment copies of each such filing, recording or registration
not theretofore delivered to the Agent and (e) stating that he has consulted
with its legal counsel as to the matters set forth in such certificate.
SECTION 4.3. Protection of Security. The Assignor shall, at
its own cost and expense, take any and all actions necessary to defend title to
the Collateral against all persons and to defend the Security Interest of the
Agent in the Collateral and the priority thereof against any Lien not expressly
permitted under the Credit Agreement.
SECTION 4.4. Instruments. The Assignor shall deliver and
pledge to the Agent all Instruments ((i) but only with respect to any Instrument
representing in excess of $250,000 of indebtedness and (ii) at any time during
the continuance of an Event of Default) and other property, the perfection of a
security interest in which requires possession pursuant to the Uniform
Commercial Code, duly endorsed and accompanied by duly executed instruments of
transfer or assignment, all in form and substance satisfactory to the Agent,
promptly upon the Assignor's receipt thereof. The Assignor shall mark
conspicuously all chattel paper with a legend in form and substance satisfactory
to the Agent, indicating that such chattel paper is subject to the Liens of the
Security Interest.
SECTION 4.5. Further Assurances. The Assignor agrees, at its
expense, to execute, acknowledge, deliver and cause to be duly filed all such
further instruments and documents (including filings with the United States
Patent and Trademark Office or the United States Copyright Office) and take all
such actions as the Agent or any of the other Secured Parties may from time to
time request to better assure, preserve, protect and perfect the Security
Interest and the rights and remedies created hereby, including the payment of
any fees and taxes required in connection with the execution and delivery of
this Agreement, the granting of the Security Interest and the filing of any
financing statements (including fixture filings) or other documents in
connection herewith.
SECTION 4.6. Inspection and Verification. The Agent and such
persons as the Agent may reasonably designate shall have the right, at any
reasonable time or times and at the Assignor's own cost and expense, to inspect
<PAGE>
the Collateral, all records related thereto (and to make extracts and copies
from such records) and the premises upon which any of the Collateral is located,
to discuss the Assignor's affairs with the officers of the Assignor and its
independent accountants and to verify under reasonable procedures the validity,
amount, quality, quantity, value, condition and status of or any other matter
relating to, the Collateral, including, in the case of Accounts or Collateral in
the possession of any third party, by contacting Account Debtors or the third
party possessing such Collateral for the purpose of making such a verification.
The Agent shall have the absolute right to share any information it gains from
such inspection or verification with any other Secured Party.
SECTION 4.7. Taxes; Insurance; Encumbrances. At its option,
the Agent may discharge past due taxes, assessments, charges, fees, liens,
security interests or other encumbrances at any time levied or placed on the
Collateral and not permitted under the Loan Documents, and may pay for insurance
on or the maintenance and preservation of the Collateral to the extent the
Assignor fails to do so as required by this Agreement or the other Loan
Documents, and the Assignor agrees to reimburse the Agent on demand for any
payment made or any expense incurred by the Agent pursuant to the foregoing
authorization; provided, however, that nothing in this Section 4.7 shall be
interpreted as excusing the Assignor from the performance of, or imposing any
obligation on, the Agent or any other Secured Party to cure or perform, any
covenants or other promises of the Assignor with respect to insurance, taxes,
assessments, charges, fees, liens, security interests or other encumbrances and
maintenance as set forth herein or in the other Loan Documents.
SECTION 4.8. Assignment of Security Interest. If at any time
the Assignor shall take and perfect a security interest in any property of an
Account Debtor or any other person to secure payment and performance of an
Account, the Assignor shall promptly notify the Agent and, following request of
the Agent, assign such security interest to the Agent. Such assignment need not
be filed of public record unless necessary to continue the perfected status of
the security interest against creditors of and transferees from the Account
Debtor or other person granting the security interest.
SECTION 4.9. Continuing Obligations of the Assignor. The
Assignor shall remain liable to, at its own cost and expense, duly and
punctually, observe and perform all the conditions and obligations to be
observed and performed by it under each contract, agreement or instrument
relating to the Collateral, all in accordance with the terms and conditions
thereof, and the Assignor agrees to indemnify and hold harmless the Agent and
the other Secured Parties from and against any and all liability for such
performance.
SECTION 4.10. Use and Disposition of Collateral. The Assignor
may use but not dispose of the Collateral in any lawful manner not inconsistent
with the provisions of this Agreement, the respective Credit Agreement or any
Loan Document, except that the Assignor may dispose of Collateral to the extent
disposal would not be prohibited by provisions of the Loan Documents.
SECTION 4.11. Limitation on Modification of Accounts. The
Assignor will not, without the Agent's prior written consent, grant any
extension of the time of payment of any of the Accounts Receivable, compromise,
compound or settle the same for less than the full amount thereof, release,
wholly or partly, any person liable for the payment thereof or allow any credit
or discount whatsoever thereon, other than extensions, credits, discounts,
compromises or settlements granted or made in the ordinary course of business.
After a Default or an Event of Default shall have occurred and during the
continuance thereof, the Agent may notify the Assignor not to grant or make any
such extension, credit, discount, compromise, or settlement under any
circumstances without its prior written consent, in which case the Assignor
shall cease to grant or make any of the same.
<PAGE>
ARTICLE V.
COLLECTIONS
SECTION 5.1. Collection Deposit Accounts. (a) If requested by
the Agent at any time, the Assignor shall establish and shall maintain one or
more Collection Deposit Accounts with the Agent or with any financial
institution that (i) is satisfactory to the Agent and (ii) enters into the
Lockbox Agreement. The provisions of this Article V shall apply only from and
after the date (the "Collection Deposit Account Activation Date") which is the
earlier of (x) the date of such request or the date of any Default or Event of
Default.
(a)(b) Unless and until the Collection Deposit Accounts are
converted to closed lockbox accounts pursuant to paragraph (c) below, the
Assignor may at any time withdraw any of the funds contained in a Collection
Deposit Account of the Assignor for use, subject to the provisions of the Loan
Documents, for general corporate purposes.
(c) Effective upon notice to the Assignor from the Agent after
the occurrence and during the continuance of an Event of Default (which notice
may be given by telephone if promptly confirmed in writing), each Collection
Deposit Account will, without any further action on the part of the Assignor,
the Agent or any Sub-Agent, convert into a closed lockbox account under the
exclusive dominion and control of the Agent in which funds are held subject to
the rights of the Agent hereunder. The Assignor shall thereafter have no right
or power to withdraw any funds from any Collection Deposit Account without the
prior written consent of the Agent until all Events of Default are cured or
waived. The Assignor irrevocably authorizes the Agent to notify each Sub-Agent
(i) of the occurrence of an Event of Default and (ii) of the matters referred to
in this paragraph (c). Following the occurrence of an Event of Default, the
Agent may instruct each Sub-Agent to transfer immediately all funds held in each
Collection Deposit Account to an account maintained with the Agent.
SECTION 5.2. Collections. (a) From and after the Collection
Deposit Account Activation Date, the Assignor agrees, upon the request of the
Agent, to notify and direct promptly each Account Debtor and every other person
obligated to make payments with respect to the Accounts Receivable and Inventory
to make all such payments to a Collection Deposit Account established by it. The
Assignor shall use all reasonable efforts to cause each Account Debtor and every
other person identified in the preceding sentence to make all payments with
respect to the Accounts Receivable and Inventory directly to such Collection
Deposit Account.
(b) In the event that any Assignor directly receives any
remittances on Accounts Receivable or Inventory, notwithstanding the
arrangements for payment directly into the Collection Deposit Accounts, such
remittances shall be held in trust for the benefit of the Agent and the other
Secured Parties and shall be segregated from other funds of the Assignor,
subject to the Security Interest granted hereby, and the Assignor shall cause
such remittances and payments to be deposited into the applicable Collection
Deposit Account as soon as practicable after the Assignor's receipt thereof.
SECTION 5.3. Power of Attorney. The Agent is hereby appointed
by the Assignor as the true and lawful agent and attorney-in-fact of the
Assignor, and in such capacity the Agent shall have the right, with power of
substitution for the Assignor and in the Assignor's name or otherwise, for the
<PAGE>
use and benefit of the Agent and the other Secured Parties, upon the occurrence
and during the continuance of an Event of Default, (a) to receive, endorse,
assign and/or deliver any and all notes, acceptances, checks, drafts, money
orders or other evidences of payment relating to the Collateral or any part
thereof; (b) to demand, collect, receive payment of, give receipt for and give
discharges and releases of all or any of the Collateral; (c) to sign the name of
the Assignor on any invoice or bill of lading relating to any of the Collateral;
(d) to send verifications of Accounts Receivable to any Account Debtor; (e) to
commence and prosecute any and all suits, actions or proceedings at law or in
equity in any court of competent jurisdiction to collect or otherwise realize on
all or any of the Collateral or to enforce any rights in respect of any
Collateral; (f) to settle, compromise, compound, adjust or defend any actions,
suits or proceedings relating to all or any of the Collateral; (g) to notify, or
to require the Assignor to notify, Account Debtors to make payment directly to
the Agent; and (h) to use, sell, assign, transfer, pledge, make any agreement
with respect to or otherwise deal with all or any of the Collateral, and to do
all other acts and things necessary to carry out the purposes of this Agreement,
as fully and completely as though the Agent were the absolute owner of the
Collateral for all purposes; provided, however, that nothing herein contained
shall be construed as requiring or obligating the Agent or any other Secured
Party to make any commitment or to make any inquiry as to the nature or
sufficiency of any payment received by the Agent or any other Secured Party, or
to present or file any claim or notice, or to take any action with respect to
the Collateral or any part thereof or the moneys due or to become due in respect
thereof or any property covered thereby, and no action taken or omitted to be
taken by the Agent or any other Secured Party with respect to the Collateral or
any part thereof shall give rise to any defense, counterclaim or offset in favor
of the Assignor or to any claim or action against the Agent or any other Secured
Party. It is understood and agreed that the appointment of the Agent as the
agent and attorney-in-fact of the Assignor for the purposes set forth above is
coupled with an interest and is irrevocable. The provisions of this Section 5.3
shall in no event relieve the Assignor of any of its obligations hereunder or
under the other Loan Documents with respect to the Collateral or any part
thereof or impose any obligation on the Agent or any other Secured Party to
proceed in any particular manner with respect to the Collateral or any part
thereof, or in any way limit the exercise by the Agent or any other Secured
Party of any other or further right that it may have on the date of this
Agreement or hereafter, whether hereunder, under any other Financing Document,
by law or otherwise. Any sale pursuant to the provisions of this Section 5.3
shall be deemed to conform to the commercially reasonable standards as provided
in Section 9-504(3) of the Uniform Commercial Code as in effect in the State of
New York or its equivalent in other jurisdictions.
ARTICLE VI.
REMEDIES
SECTION 6.1. Remedies upon Default. Upon the occurrence and
during the continuance of an Event of Default, the Assignor agrees to deliver
each item of Collateral to the Agent on demand, and it is agreed that the Agent
shall have the right (subject to applicable law) to take any of or all the
following actions at the same or different times: (a) with respect to any
Collateral consisting of Intellectual Property, on demand, to cause the Security
Interest to become an assignment, transfer and conveyance of any of or all such
Collateral by the Assignor to the Agent, or to license or, to the extent
permitted by applicable law, sublicense, whether general, special or otherwise,
and whether on an exclusive or non-exclusive basis, any such Collateral
throughout the world on such terms and conditions and in such manner as the
Agent shall determine (other than in violation of any then-existing licensing
arrangements to the extent that waivers cannot be obtained), and (b) with or
without legal process and with or without previous notice or demand for
<PAGE>
performance, to take possession of the Collateral (and temporary possession of
any non-Collateral in connection with any such repossession, with the right to
store, at the Assignor's expense and risk, such non-Collateral) and without
liability for trespass to enter any premises where the Collateral may be located
for the purpose of taking possession of or removing the Collateral and,
generally, to exercise any and all rights afforded to a secured party under the
Uniform Commercial Code or other applicable law. Without limiting the generality
of the foregoing, the Assignor agrees that the Agent shall have the right,
subject to the mandatory requirements of applicable law, to sell or otherwise
dispose of all or any part of the Collateral, at public or private sale or at
any broker's board or on any securities exchange, for cash, upon credit or for
future delivery as the Agent shall deem appropriate. The Agent shall be
authorized at any such sale (if it deems it advisable to do so) to restrict the
prospective bidders or purchasers to persons who will represent and agree that
they are purchasing the Collateral for their own account for investment and not
with a view to the distribution or sale thereof, and upon consummation of any
such sale the Agent shall have the right to assign, transfer and deliver to the
purchaser or purchasers thereof the Collateral so sold. Each such purchaser at
any such sale shall hold the property sold absolutely free from any claim or
right on the part of the Assignor, and the Assignor hereby waives (to the
fullest extent permitted by applicable law) all rights of redemption, stay and
appraisal that the Assignor now has or may at any time in the future have under
any rule of law or statute now existing or hereafter enacted.
The Agent shall give the Assignor 10 days' written notice
(which the Assignor agrees is reasonable notice within the meaning of Section
9-504(3) of the Uniform Commercial Code as in effect in the State of New York or
its equivalent in other jurisdictions) of the Agent's intention to make any sale
of Collateral. Such notice, in the case of a public sale, shall state the time
and place for such sale and, in the case of a sale at a broker's board or on a
securities exchange, shall state the board or exchange at which such sale is to
be made and the day on which the Collateral, or portion thereof, will first be
offered for sale at such board or exchange. Any such public sale shall be held
at such time or times within ordinary business hours and at such place or places
as the Agent may fix and state in the notice (if any) of such sale. At any such
sale, the Collateral, or portion thereof, to be sold may be sold in one lot as
an entirety or in separate parcels, as the Agent may (in its sole and absolute
discretion) determine. The Agent shall not be obligated to make any sale of any
Collateral if it shall determine not to do so, regardless of the fact that
notice of sale of such Collateral shall have been given. The Agent may, without
notice or publication, adjourn any public or private sale or cause the same to
be adjourned from time to time by announcement at the time and place fixed for
sale, and such sale may, without further notice, be made at the time and place
to which the same was so adjourned. In case any sale of all or any part of the
Collateral is made on credit or for future delivery, the Collateral so sold may
be retained by the Agent until the sale price is paid by the purchaser or
purchasers thereof, but the Agent shall not incur any liability in case any such
purchaser or purchasers shall fail to take up and pay for the Collateral so sold
and, in case of any such failure, such Collateral may be sold again upon like
notice. At any public sale made pursuant to this Section 6.1, any Secured Party
may bid for or purchase, free (to the fullest extent permitted by applicable
law) from any right of redemption, stay, valuation or appraisal on the part of
the Assignor (all said rights being also hereby waived and released to the
extent permitted by law), the Collateral or any part thereof offered for sale
and may make payment on account thereof by using any claim then due and payable
to such Secured Party from the Assignor as a credit against the purchase price,
and such Secured Party may, upon compliance with the terms of sale, hold, retain
and dispose of such property without further accountability to the Assignor
therefor. For purposes hereof, a written agreement to purchase the Collateral or
any portion thereof shall be treated as a sale thereof; the Agent shall be free
to carry out such sale pursuant to such agreement and the Assignor shall not be
entitled to the return of the Collateral or any portion thereof subject thereto,
notwithstanding the fact that after the Agent shall have entered into such an
agreement all Events of Default shall have been remedied and the Obligations
paid in full; provided, however, that in the event the Obligations shall have
been paid in full, the Assignor shall be entitled to the return of the proceeds
of the sale of any such Collateral to the extent not applied to payment of the
Obligations. As an alternative to exercising the power of sale herein conferred
upon it, the Agent may proceed by a suit or suits at law or in equity to
foreclose this Agreement and to sell the Collateral or any portion thereof
pursuant to a judgment or decree of a court or courts having competent
jurisdiction or pursuant to a proceeding by a court-appointed receiver. Any sale
pursuant to the provisions of this Section 6.1 shall be deemed to conform to the
commercially reasonable standards as provided in Section 9-504(3) of the Uniform
Commercial Code as in effect in the State of New York or its equivalent in other
jurisdictions. The Assignor will remain liable for any deficiency in the payment
of the Obligations.
SECTION 6.2. Application of Proceeds. The Agent shall apply
the proceeds of any collection or sale of the Collateral, as well as any
Collateral consisting of cash, as follows:
FIRST, to the payment of all costs and expenses incurred by
the Agent (in its capacity as such hereunder or under any other Loan
Document) in connection with such collection or sale or otherwise in
connection with this Agreement or any of the Obligations, including all
court costs and the fees, other charges and expenses of its agents and
legal counsel, the repayment of all advances made by the Agent hereunder
or under any other Loan Document on behalf of the Assignors and any
other costs or expenses incurred in connection with the exercise of any
right or remedy hereunder or under any other Loan Document;
SECOND, to the payment of the Secured Obligations in such
order as the Agent may determine in its sole discretion; and
THIRD, to the Assignor, its successors or assigns, or as a
court of competent jurisdiction may otherwise direct.
The Agent shall have absolute discretion as to the time of application of any
such proceeds, moneys or balances in accordance with this Agreement. Upon any
sale of the Collateral by the Agent (including pursuant to a power of sale
granted by statute or under a judicial proceeding), the receipt by the Agent or
of the officer making the sale shall be a sufficient discharge to the purchaser
or purchasers of the Collateral so sold and such purchaser or purchasers shall
not be obligated to see to the application of any part of the purchase money
paid over to the Agent or such officer or be answerable in any way for the
misapplication thereof.
SECTION 6.3. Grant of License to Use Intellectual Property.
For the purpose of enabling the Agent to exercise rights and remedies under this
Section 6.3 at such time as the Agent shall be lawfully entitled to exercise
such rights and remedies, the Assignor hereby grants to the Agent an
irrevocable, non-exclusive license (exercisable without payment of royalty or
other compensation to the Assignor) to use, license or sub-license any of the
Collateral consisting of Intellectual Property now owned or hereafter acquired
by the Assignor, and wherever the same may be located, and including in such
license reasonable access to all media in which any of the licensed items may be
recorded or stored and to all computer software and programs used for the
compilation or printout thereof. The use of such license by the Agent shall be
exercised, at the option of the Agent, upon the occurrence and during the
continuation of an Event of Default, provided that any license, sub-license or
other transaction entered into by the Agent in accordance herewith shall be
binding upon the Assignor notwithstanding any subsequent cure of an Event of
Default.
ARTICLE VII.
MISCELLANEOUS
<PAGE>
SECTION 7.1. Notices. All communications and notices hereunder
shall (except as otherwise expressly permitted herein) be in writing and given
as provided in Section 10.5 of the Credit Agreement. All communications and
notices hereunder to the Agent shall be given to it at its address set forth in
Schedule II hereto.
SECTION 7.2. Absolute and Unconditional Obligations.. All
rights of the Agent hereunder, the Security Interest and all obligations of the
Assignor hereunder shall be absolute and unconditional irrespective of (a) any
lack of validity or enforceability of any Loan Document, any agreement with
respect to any of the Obligations or any other agreement or instrument relating
to any of the foregoing, (b) any change in the time, manner or place of payment
of, or in any other term of, all or any of the Obligations or any other
amendment or waiver of or any consent to any departure from any Credit
Transaction Document or any other agreement or instrument, (c) any exchange,
release or non-perfection of any Lien on other Collateral, or any release or
amendment or waiver of or consent under or departure from any guarantee,
securing or guaranteeing all or any of the Obligations or (d) any other
circumstance that might otherwise constitute a defense available to, or a
discharge of, the Assignor in respect of the Obligations or in respect of this
Agreement (other than the indefeasible payment in full of all the Obligations).
The Agent may resort to the Assignor hereunder for the payment of the
Obligations whether or not the Agent shall have resorted to any other property
of any person securing the Obligations or shall have proceeded against any other
obligor primarily or secondarily obligated with respect to any of the
Obligations.
SECTION 7.3. Survival of Agreement. All covenants, agreements,
representations and warranties made by the Assignor herein and in the
certificates or other instruments prepared or delivered in connection with or
pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the Secured Parties and shall survive the execution and
delivery of the Notes, regardless of any investigation made by the Secured
Parties or on their behalf, and shall continue in full force and effect as long
as the principal of or any accrued interest on, or any other fee or amount
payable under or in respect of, any Note or this Agreement or, without
duplication of the foregoing, under any of the other Loan Documents is
outstanding and unpaid.
SECTION 7.4. Binding Effect; Assignments. This Agreement shall
become effective as to the Assignor when a counterpart hereof executed on behalf
of the Assignor shall have been delivered to the Agent and a counterpart hereof
shall have been executed on behalf of the Agent, and thereafter shall be binding
upon the Assignor and the Agent and their respective successors and assigns, and
shall inure to the benefit of the Assignor, the Agent and the other Secured
Parties and their respective successors and assigns, except that the Assignor
shall not have the right to assign its rights hereunder or any interest herein
or in the Collateral (and any such attempted assignment shall be void) except as
expressly contemplated by this Agreement or the other Loan Documents.
SECTION 7.5. Successors and Assigns. Whenever in this
Agreement any of the parties hereto is referred to, such reference shall be
deemed to include the successors and assigns of such party; and all covenants,
promises and agreements by or on behalf of the Assignor or the Agent that are
contained in this Agreement shall bind and inure to the benefit of their
respective successors and assigns.
SECTION 7.6. Agent's Fees and Expenses; Indemnification. (a)
The Assignor agrees to pay upon demand to the Agent the amount of any and all
reasonable expenses, including the reasonable fees and expenses of its counsel
and of any experts or agents, that the Agent may incur in connection with (i)
the administration of this Agreement (including the customary fees of the Agent
for any audits conducted by it with respect to the Accounts Receivable or
<PAGE>
Inventory), (ii) the custody or preservation of, or the sale of, collection from
or other realization upon any of the Collateral, (iii) the exercise, enforcement
or protection of any of the rights of the Agent hereunder or (iv) the failure of
the Assignor to perform or observe any of the provisions hereof. If the Assignor
shall fail to do any act or thing that it has covenanted to do hereunder or any
representation or warranty of the Assignor hereunder shall be breached, the
Agent may (but shall not be obligated to) do the same or cause it to be done or
remedy any such breach and there shall be added to and deemed part of the
Obligations the cost or expense incurred by the Agent in so doing.
(b) Without limitation of its indemnification obligations
under the other Loan Documents, the Assignor agrees to indemnify the Agent, the
Secured Parties and the other Indemnitees against, and hold each of them
harmless from, any and all losses, claims, damages, liabilities and related
expenses, including reasonable counsel fees and expenses, incurred by or
asserted against any of them arising out of, in any way connected with, or as a
result of, the execution, delivery or performance of this Agreement or any
claim, litigation, investigation or proceeding relating hereto or to the
Collateral, whether or not any Indemnitee is a party thereto, provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses are determined by a
court of competent jurisdiction by final and nonappealable judgment to have
resulted from the gross negligence or willful misconduct of such Indemnitee.
(c) Any amounts payable as provided hereunder shall be
additional Obligations secured hereby and by the other Security Documents. The
provisions of this Section 7.6 shall remain operative and in full force and
effect regardless of the termination of this Agreement, the consummation of the
transactions contemplated hereby, the repayment of any of the Obligations, the
invalidity or unenforceability of any term or provision of this Agreement or any
other Loan Document or any investigation made by or on behalf of the Agent or
any other Secured Party. All amounts due under this Section 7.6 shall be payable
on written demand therefor and shall bear interest at the rate provided for in
the Notes in respect of the payment of overdue principal and interest on the
Notes.
SECTION 7.7. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 7.8. Waivers; Amendment. (a) No failure or delay of
the Agent or any other Secured Party in exercising any power or right hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right or power, or any abandonment or discontinuance of steps to
enforce such a right or power, preclude any other or further exercise thereof or
the exercise of any other right or power. The rights and remedies of the Agent
hereunder and of the other Secured Parties under the other Loan Documents are
cumulative and are not exclusive of any rights or remedies that they would
otherwise have. No waiver of any provisions of this Agreement or any other Loan
Document or consent to any departure by the Assignor therefrom shall in any
event be effective unless the same shall be permitted by paragraph (b) below,
and then such waiver or consent shall be effective only in the specific instance
and for the purpose for which given. No notice or demand on the Assignor in any
case shall entitle the Assignor to any other or further notice or demand in
similar or other circumstances.
(b) Neither this Agreement nor any provision hereof may be
waived, amended or modified except pursuant to a written agreement entered into
by the Assignor and the Agent, with the prior written consent of the Agent and
the holders of the Notes; provided, however, that except as provided herein or
in the other Loan Documents, no such agreement shall amend, modify, waive or
otherwise adversely affect a Secured Party's rights and interests in any
material amount of the Collateral without the prior written consent of such
Secured Party.
<PAGE>
SECTION 7.9. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING
OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN
INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS
APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN
THIS SECTION 7.9.
SECTION 7.10. Severability. In the event any one or more of
the provisions contained in this Agreement or in any other Loan Document should
be held invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein and therein
shall not in any way be affected or impaired thereby (it being understood that
the invalidity of a particular provision in a particular jurisdiction shall not
in and of itself affect the validity of such provision in any other
jurisdiction). The parties shall endeavor in good-faith negotiations to replace
the invalid, illegal or unenforceable provisions with valid provisions, the
economic effect of which comes as close as possible to that of the invalid,
illegal or unenforceable provisions.
SECTION 7.11. Jurisdiction; Consent to Service of Process. (a)
The Assignor hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of any New York State court or
Federal court of the United States of America sitting in New York City, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or the other Loan Documents, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court. Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement shall affect any right that the Agent
or any other Secured Party may otherwise have to bring any action or proceeding
relating to this Agreement or the other Loan Documents against the Assignor or
its properties in the courts of any jurisdiction.
(b) The Assignor hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection that it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement or the other
Loan Documents in any New York State or Federal court. Each of the parties
hereto hereby irrevocably waives, to the fullest extent permitted by law, the
defense of an inconvenient forum to the maintenance of such action or proceeding
in any such court.
<PAGE>
(c) Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in Section 7.1. Nothing in
this Agreement will affect the right of any party to this Agreement to serve
process in any other manner permitted by law.
SECTION 7.12. Termination or Release. (a) This Agreement and
the Security Interest shall terminate when all the Obligations have been
indefeasibly paid in full in cash and the Lenders shall have no further
obligations under the Loan Documents.
(a)(b) Upon (i) any sale by the Assignor of any Collateral
that is permitted under the Credit Agreement, or (ii) the effectiveness of any
written consent to the release of the Security Interest in any Collateral
pursuant to the Credit Agreement, the Security Interest in such Collateral (but
not the proceeds thereof) shall be automatically released.
(c) In connection with any termination or release pursuant to
paragraphs (a) or (b) the Agent shall execute and deliver to the Assignor, at
the Assignor's expense, all Uniform Commercial Code termination statements,
documents in order to terminate any United States Patent and Trademark Office
and United States Copyright Office filings and similar documents that the
Assignor shall reasonably request to evidence such termination or release. Any
execution and delivery of termination statements or documents pursuant to this
Section 7.12 shall be without recourse to or warranty by the Agent.
SECTION 7.13. Headings. Article and Section headings used
herein are for convenience of reference only, are not part of this Agreement and
are not to affect the construction of, or to be taken into consideration in
interpreting, this Agreement.
SECTION 7.14. Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall constitute an original but all of
which when taken together shall constitute but one contract.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
AMERICOLD SERVICES CORPORATION
By:
-------------------------
Name:
Title:
GOLDMAN SACHS MORTGAGE COMPANY, a New York
limited partnership, as Agent
By: Goldman Sachs Real Estate Funding
Corp., its General Partner
By:
----------------------------
Name:
Title:
<PAGE>
ANNEX I
PERFECTION CERTIFICATE
Reference is made to (a) the Credit Agreement dated as of
October 30, 1997 (as further amended from time to time, the "Credit Agreement"),
among Americold Services Corporation, a Delaware corporation ("Assignor"),
Americold Corporation, an Oregon corporation, Vornado Crescent Portland
Partnership, a Delaware general partnership (the "Joint Venture"), and Goldman
Sachs Mortgage Company, a New York limited partnership, individually and as
Agent (the "Agent"), and (b) the Security Agreement, dated as of October 31,
1997 (as amended from time to time, the "Security Agreement"), among the
Assignor and the Agent. Capitalized terms used and not defined herein shall have
the meanings assigned to such terms in the Credit Agreement and the Security
Agreement, as applicable.
Under the Security Agreement, the Assignor is a grantor of a
security interest in the Collateral as defined therein.
The undersigned, the Financial Officer of the Assignor, hereby
certifies to the Agent and each other Secured Party as follows:
1. Names.
(a) The exact corporate name of the Assignor under the
Security Agreement, as such name appears in its certificate of incorporation, is
as follows:
(b) Set forth below is each other corporate name the Assignor
has had since its organization, together with the date of the relevant change:
Original Corporate Name:
Corporate Name Change:
(c) Except as set forth in Schedule 1, the Assignor has not
changed its identity or corporate structure in any way within the past five
years.
[Changes in identity or corporate structure would include mergers,
consolidations and acquisitions, as well as any change in the form, nature or
jurisdiction of corporate organization. If any such change has occurred, include
in Schedule 1, as applicable, the information required by Sections 1 and 2 of
this certificate as to each acquired or constituent party to a merger or
consolidation.]
1.1 The following is list of all other names (including
trade names or similar appellations) used by the Assignor or any of its
divisions or other business units in connection with the conduct of its business
or the ownership of its properties as they relate to the business conducted by
the Assignor at any time during the past five years:
2. Current Locations.
(a) The chief executive office of the Assignor is located at
the following address:
<PAGE>
Mailing Address County State
- -------------------------------------------------------------------------------
(b) The following are all locations where the Assignor maintains any books or
records relating to any Accounts Receivable:
Mailing Address County State
- -------------------------------------------------------------------------------
(c) The following are all the places of business of the
Assignor not identified above:
Mailing Address County State
- -------------------------------------------------------------------------------
(d) The following are all the locations where the Assignor
maintains, any Inventory not identified above:
Mailing Address County State
- -------------------------------------------------------------------------------
(e) The following are the names and addresses of all persons other than the
Assignor who have possession of any of the Assignor's Inventory:
Name Mailing Address County State
- -------------------------------------------------------------------------------
3. Unusual Transactions. All Accounts Receivable have been
originated by the Assignor and all Inventory has been acquired by the Assignor
in the ordinary course of its business.
4. File Search Reports. Attached hereto as Schedule 4(A) are
true copies of file search reports from the Uniform Commercial Code filing
offices where filings described in Section 5 hereof are to be made. Attached
hereto as Schedule 4(B) is a true copy of each financing statement or other
filing identified in such file search reports.
5. UCC Filings. A duly signed Uniform Commercial Code
financing statement (including fixture filings, as applicable) in substantially
the form of Schedule 5 hereto has been delivered to the Agent for filing in the
Uniform Commercial Code filing office in each jurisdiction identified in Section
2 hereof.
6. Schedule of Filings. Attached hereto as Schedule 6 is a
schedule setting forth, with respect to the filings described in Section 5
above, each filing office in which such filings are to be made.
7. Mortgage Filings. Attached hereto as Schedule 7 is a
schedule setting forth, with respect to each of the real properties to be
subject to a Mortgage under the Credit Agreement owned by the Assignor, (a) the
exact corporate name of the Corporation that owns such property as such name
appears in its certificate of incorporation, (b) if different than the name
identified pursuant to clause (a), the exact name of the current record owner of
such property reflected in the records of the filing office for such property
identified pursuant to the following clause and (c) the filing office in which a
Mortgage with respect to such property must be filed or recorded in order for
the Agent to obtain a perfected lien thereon.
<PAGE>
IN WITNESS WHEREOF, I have hereunto set my hand the ____ day of ________, ____
By:___________________________
Name:
Title:
This Instrument Prepared by
and When Recorded Return to:
Willkie Farr & Gallagher
153 East 53rd Street
New York, New York 10022
Attention: Eugene A. Pinover, Esq.
FORM OF
AMENDED AND RESTATED MASTER MORTGAGE,
DEED TO SECURE DEBT
and
DEED OF TRUST
with
UNIFORM COMMERCIAL CODE SECURITY AGREEMENT,
and with
ASSIGNMENT OF LEASES, RENTS AND PROFITS
among
AMERICOLD CORPORATION
_______________, as Trustee
with respect to the Tennessee Premises
_______________, as Trustee
with respect to the North Carolina Premises,
_______________, as Trustee
with respect to the California Premises,
_______________, as Trustee
with respect to the Virginia Premises,
_______________, as Trustee
with respect to the Missouri Premises,
and
GOLDMAN SACHS MORTGAGE COMPANY
COLLATERAL IS OR INCLUDES FIXTURES.
THE MAXIMUM PRINCIPAL INDEBTEDNESS FOR TENNESSEE RECORDING TAX PURPOSES
IS $_______________.
NOTWITHSTANDING ANYTHING CONTAINED HEREIN TO THE CONTRARY, WITH RESPECT TO THE
NEW YORK PREMISES, THE MAXIMUM AMOUNT OF INDEBTEDNESS SECURED BY THIS INSTRUMENT
AT EXECUTION OR WHICH UNDER ANY CONTINGENCY MAY BECOME SECURED HEREBY AT ANY
TIME HEREAFTER IS THE PRINCIPAL SUM OF $__________ PLUS INTEREST THEREON, PLUS
AMOUNTS EXPENDED BY THE LENDER AFTER A DECLARATION OF DEFAULT HEREUNDER TO
MAINTAIN THE LIEN OF THIS INSTRUMENT OR TO PROTECT THE PROPERTY SECURED BY THIS
INSTRUMENT, INCLUDING, WITHOUT LIMITATION, AMOUNTS IN RESPECT OF INSURANCE
PREMIUMS, REAL ESTATE TAXES, LITIGATION EXPENSES TO PROSECUTE OR DEFEND THE
RIGHTS, REMEDIES AND LIEN OF THIS INSTRUMENT OR TITLE TO THE PROPERTY SECURED
HEREBY, AND ANY COSTS, CHARGES OR AMOUNTS TO WHICH THE LENDER BECOMES SUBROGATED
UPON PAYMENT, WHETHER UNDER RECOGNIZED PRINCIPLES OF LAW OR EQUITY OR UNDER
EXPRESS STATUTORY AUTHORITY, TOGETHER WITH INTEREST ON ALL THE FOREGOING AMOUNTS
AT THE DEFAULT RATE (AS DEFINED IN THE CREDIT AGREEMENT).
<PAGE>
NOTICE AS TO OKLAHOMA PREMISES: A POWER OF SALE HAS BEEN GRANTED IN THIS
INSTRUMENT. A POWER OF SALE MAY ALLOW THE LENDER TO TAKE THE OKLAHOMA PREMISES
AND SELL IT WITHOUT GOING TO COURT IN A FORECLOSURE ACTION UPON DEFAULT BY THE
BORROWER.
THIS INSTRUMENT IS ALSO TO BE INDEXED IN THE INDEX OF FINANCING STATEMENTS AS A
FIXTURE FILING IN ACCORDANCE WITH THE UNIFORM COMMERCIAL CODE, INCLUDING
SECTIONS 9-313 AND 9-402, AS ADOPTED IN ALABAMA, ARKANSAS, NEW YORK, NORTH
CAROLINA, OKLAHOMA, TENNESSEE, VIRGINIA, CALIFORNIA AND GEORGIA.
THE NAMES OF THE DEBTOR AND THE SECURED PARTY, THE MAILING ADDRESS OF THE
SECURED PARTY FROM WHICH INFORMATION CONCERNING THE SECURITY INTEREST MAY BE
OBTAINED, THE MAILING ADDRESS OF THE DEBTOR AND A STATEMENT INDICATING THE
TYPES, OR DESCRIBING THE ITEMS, OF COLLATERAL, ARE AS DESCRIBED IN SUBSECTION
3.7.3 HEREOF.
THIS INSTRUMENT SECURES ANY CONTRACTUAL FUTURE ADVANCES THAT MAY BE MADE BY
LENDER TO BORROWER OR ANY CONTRACTUAL FUTURE OBLIGATIONS OF BORROWER TO LENDER
AT ANY TIME AND FROM TIME TO TIME DURING THE TERM HEREOF, NOT TO EXCEED [ONE
(1)] YEAR IMMEDIATELY FOLLOWING THE DATE HEREOF, IN AN AMOUNT NOT TO EXCEED AT
ANY ONE TIME OUTSTANDING $_______________, PLUS INTEREST, COSTS OF COLLECTION
(INCLUDING, BUT NOT LIMITED TO REASONABLE ACTUAL ATTORNEY FEES, WHETHER OR NOT
LITIGATION IS COMMENCED) AND SUMS ADVANCED TO PROTECT THE SECURITY OF THIS
INSTRUMENT AND, WITH RESPECT TO THE MISSOURI PREMISES, THIS INSTRUMENT IS TO BE
GOVERNED BY SECTION 443.055 OF THE REVISED STATUTES OF MISSOURI, AS AMENDED.
NOTE: INTEREST OR DISCOUNT MAY BE DEFERRED OR DEFERRED ACCRUED OR CAPITALIZED
BUT ONLY AT THE OPTION OF THE LENDER.
<PAGE>
THIS AMENDED AND RESTATED MASTER MORTGAGE, DEED TO SECURE DEBT
AND DEED OF TRUST, UNIFORM COMMERCIAL CODE SECURITY AGREEMENT AND ASSIGNMENT OF
LEASES, RENTS AND PROFITS made as of the _____ day of October, 1997, by and
among AMERICOLD CORPORATION, an Oregon corporation ("Borrower"); and GOLDMAN
SACHS MORTGAGE COMPANY, a New York limited partnership ("Lender"); and
_______________, _______________, _______________, _______________ and
_______________, each as trustee with respect to a portion of the Premises.
W I T N E S S E T H T H A T:
WHEREAS, this date Borrower, Vornado Crescent Portland
Partnership and Lender have entered into a certain Credit Agreement regarding
certain obligations of Borrower owed to Lender;
WHEREAS, to secure the repayment of such money and the
performance of certain obligations, Borrower desires to convey, grant and assign
liens, security titles, security interests and collateral assignments in certain
property;
WHEREAS, Lender is the owner and holder by assignment of the
mortgage(s) listed on Schedule 1 attached hereto (hereinafter collectively the
"Original Mortgage"), which Original Mortgage encumbers, among other things, all
of the Borrower's right, title and interest in the Premises (as defined below),
and Borrower is the obligor under the Original Mortgage;
WHEREAS, the aggregate principal amount secured by the
Original Mortgage is ________________ AND 00/100 DOLLARS ($___,000,000.00) and
as of the date of this Instrument, the aggregate principal amount outstanding
under the Original Mortgage is ________________ AND 00/100 DOLLARS
($___,000,000.00); and
WHEREAS, Borrower and Lender desire to amend and restate the
Original Mortgage on the terms and conditions set forth herein.
NOW THEREFORE, for and in consideration of the sum of Ten and
No/100 Dollars ($10.00), the mutual agreements contained herein and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and to secure the indebtedness hereinafter described, the parties
agree as follows:
Borrower hereby ratifies and confirms in all respects the
Original Mortgage, and agrees that the aggregate principal amount outstanding
under the notes and other instruments secured by the Original Mortgage, as
amended and restated hereby, is __________________ AND 00/100 DOLLARS
($___,000,000.00) which principal amount shall bear interest in accordance with
the terms of the Credit Agreement.
<PAGE>
Borrower warrants, represents and agrees that Borrower has no
defenses, offsets, claims, counterclaims, abatements or deductions relating to
the Original Mortgage or any amounts due thereunder.
The Original Mortgage is hereby modified, amended and restated
pursuant to the terms of this Instrument to read in its entirety as set forth
below:
ARTICLE I.
DEFINITIONS
For the purpose of this Instrument, the following defined
terms shall have the meanings ascribed thereto in this Article I:
"Alabama Tracts" shall mean, collectively, the Montgomery
Tract, the Andalusia Tract and the Dothan Tract.
"Albany Tract" shall mean that certain tract or parcel of land
located in Dougherty County, Georgia being more particularly described on
Exhibit "A" attached hereto and by this reference made a part hereof as the
"Albany Tract".
"Andalusia Tract" shall mean that certain tract or parcel of
land located in Covington County, Alabama being more particularly described on
Exhibit "A" attached hereto and by this reference made a part hereof as the
"Andalusia Tract".
"Arkansas Tract" shall mean that certain tract or parcel of
land located in Crittenden County, Arkansas being more particularly described on
Exhibit "A" attached hereto and by this reference made a part hereof as the
"Arkansas Tract
"Ashburn Tract" shall mean that certain tract or parcel of
land located in Turner County, Georgia being more particularly described on
Exhibit "A" attached hereto and by this reference made a part hereof as the
"Ashburn Tract".
"Augusta Tract" shall mean that certain tract or parcel of
land located in Richmond County, Georgia being more particularly described on
Exhibit "A" attached hereto and by this reference made a part hereof as the
"Augusta Tract".
"Borrower" shall mean Americold Corporation, an Oregon
corporation, and its permitted successors and assigns.
"California Tract" shall mean that certain tract or parcel of
land located in San Bernardino County, California being more particularly
described on Exhibit "A" attached hereto and by this reference made a part
hereof as the "California Tract".
<PAGE>
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 (42 U.S.C. ss. 9601 et seq. and 40 CFR
ss. 302.1 et seq.), as amended or replaced from time to time.
"Charlotte Tract" shall mean, collectively, those certain
tracts or parcels of land located in Mecklenburg County, North Carolina being
more particularly described on Exhibit "A" attached hereto and by this reference
made a part hereof as the "Charlotte Tract".
"Columbus Tract" shall mean that certain tract or parcel of
land located in Muscogee County, Georgia being more particularly described on
Exhibit "A" attached hereto and by this reference made a part hereof as the
"Columbus Tract".
"Combined Documents" shall mean the Credit Agreement, the
Note, this Instrument, the other "Loan Documents" (as defined in the Credit
Agreement) and any other instrument, document or other writing executed on or
after the date hereof on behalf of Borrower evidencing, securing or otherwise
relating to any of the Combined Obligations.
"Combined Obligations" shall mean and include the following
collectively:
(a) All "Secured Obligations", as that term is defined in the
Credit Agreement.
(b) Any and all indebtedness, obligations and liabilities of
Borrower to Lender now existing or hereafter arising under, by
virtue of or pursuant to this Instrument.
(c) Any and all advances hereafter made by Lender at any time to
protect or preserve the Premises or the lien hereof on the
Premises, or for taxes, assessments, insurance premiums or
other advances authorized under the terms of this Instrument
(whether or not the original Borrower remains the owner of the
Premises at the time of any such advances).
(d) Any and all other present and future indebtedness now owing or
which may at any time and from time to time hereafter be owing
by Borrower to Lender arising out of or otherwise relating to
the Credit Agreement or the other Combined Documents, now
existing or hereafter coming into existence, however and
whenever incurred or evidenced, whether express or implied,
direct or indirect, absolute or contingent, or due or to
become due, joint, several, joint and several, if arising
from, by virtue of, evidenced by or pursuant to any of the
Combined Documents and all renewals, substitutions,
modifications, amendments, consolidations and extensions and
restatements thereof.
<PAGE>
"Credit Agreement" shall mean that certain Credit Agreement
dated as of October 31, 1997 by and among Borrower, as borrower, United
Refrigeration Services of Texarkana, Inc., as guarantor, and Lender, as agent
and lender, together with any and all renewals, substitutions, modifications,
amendments, consolidations and extensions thereof.
"Default Condition" shall mean the occurrence of any event or
condition, (i) notice of the existence of which is a prerequisite to the
occurrence of an Event of Default under the Credit Agreement and notice of the
existence of which has been given or (ii) described in Section 7.1 of the Credit
Agreement.
"Dothan Tract" shall mean that certain tract or parcel of land
located in Houston County, Alabama being more particularly described on Exhibit
"A" attached hereto and by this reference made a part hereof as the "Dothan
Tract".
"Easements and Appurtenances" shall mean and include all
easements, rights-of-way, strips and gores of land, vaults, streets, ways,
alleys, passages, sewer rights, waters, water courses, water rights and powers,
minerals, flowers, shrubs, crops, trees, timber and other emblements now or
hereafter located on the Land or under or above the same or any part or parcel
thereof, and all estates, rights, titles, interests, privileges, liberties,
tenements, hereditaments and appurtenances, reversion and reversions, remainder
and remainders, whatsoever, in any way belonging, relating or appertaining to
the Premises or any part thereof, or which hereafter shall in any way belong,
relate or be appurtenant thereto, whether now owned or hereafter acquired by
Borrower.
"Environmental Laws" shall mean any present or future federal,
state or local law, statute, regulation or ordinance, and any judicial or
administrative order or judgment thereunder, pertaining to health, industrial
hygiene relating to Hazardous Materials handling, usage or exposure, Hazardous
Materials, or the environment, including, without limitation, each of the laws,
statutes, regulations and ordinances identified in the definition of Hazardous
Materials hereinafter set forth, as enacted as of the date hereof and as
hereafter amended or supplemented, and any permit, authorization or order
thereunder.
"Event of Default" shall have the meaning ascribed to such
term in Section 4.1 hereof.
"Fair Market Value" shall mean with respect to a Tract
(inclusive of the Plant, Equipment and Personal Property relating thereto) the
value of which would be obtained in a purchase and sale of such Tract in an
arm's length transaction among non-affiliates in which the buyer is under no
compulsion to purchase the Tract and the seller is under no compulsion to sell
the Property. The Fair Market Value shall be such amount as reasonably
determined by Lender.
<PAGE>
"Fixtures" shall mean any and all items, other than racks and
forklifts, included in Plant, Equipment and Personal Property which constitute
fixtures under the law of the state in which the Premises of which they
constitute a part are located and any and all other items of personal property
which are physically attached to the Land or buildings thereon and necessary to
operate such buildings as refrigerated warehouses and any and all replacements
and substitutions of any of the foregoing.
"Gateway Tract" shall mean, collectively, those certain tracts
or parcels of land located in Fulton County, Georgia being more particularly
described on Exhibit "A" attached hereto and by this reference made a part
hereof as the "Gateway Tract".
"Georgia Tracts" shall mean, collectively, the Gateway Tract,
the Lakewood Tract, the Columbus Tract, the Moultrie Tract, the Albany Tract,
the Macon Tract, the Augusta Tract and the Ashburn Tract.
"Hazardous Materials" shall mean and include (i) those
elements, wastes, materials, substances or compounds identified or regulated as
hazardous or toxic pursuant to the CERCLA, the Resource Conservation and
Recovery Act of 1976 (42 U.S.C. ss. 6901 et seq.), the Federal Water Pollution
Control Act (33 U.S.C. ss. 1251 et seq. and 40 CFR ss. 116.1 et seq.), the
Hazardous Materials Transportation Act (49 U.S.C. ss. 1801 et seq.), the Clean
Air Act (42 U.S.C. ss. 7401 et seq.), the Federal Insecticide, Fungicide and
Rodenticide Act (7 U.S.C. ss. 136 et seq.), the Emergency Planning and Community
Right-to-Know Act (42 U.S.C. ss. 1101 et seq.), the Occupational Safety and
Health Act (29 U.S.C. ss. 651 et seq.), the Residential Lead-Based Paint Hazard
Reduction Act (42 U.S.C. ss. 4851 et seq.), any analogous state laws, any
amendments thereto, and the regulations promulgated pursuant to said laws, all
as amended from time to time, relating to or affecting the Premises, (ii) any
hazardous, toxic or harmful substances, wastes, materials, pollutants or
contaminants (including, without limitation, asbestos, polychlorinated
biphenyls, petroleum products, flammable explosives, radioactive materials,
infectious substances, materials containing lead-based paint or raw materials
which include hazardous constituents) or any other substances or materials which
are regulated by Environmental Laws, on, in, under or affecting all or any
portion of the Premises or any surrounding areas, and (iii) any substances now
or hereafter defined as or included in the definitions of "hazardous
substances", "hazardous wastes", "hazardous materials", "pollutants" or "toxic
substances" under any applicable Legal Requirements.
"Indiana Tract" shall mean that certain tract or parcel of
land located in the County of Marion, Indiana being more particularly described
on Exhibit "A" attached hereto and by this reference made a part hereof as the
"Indiana Tract".
<PAGE>
"Instrument" shall mean this Amended and Restated Master
Mortgage, Deed to Secure Debt and Deed of Trust, Uniform Commercial Code
Security Agreement and Assignment of Leases, Rents and Profits, together with
any and all renewals, substitutions, modifications, amendments, consolidations
and extensions of this Instrument.
"Insurance Requirements" shall mean all terms of any insurance
policy required by this Instrument, all requirements of the issuer of any such
policy, and all regulations and then current standards applicable to or
affecting the Premises or any use or condition thereof, which may, at any time,
be recommended by the Board of Fire Underwriters, if any, having jurisdiction
over the Premises, or such other person or entity exercising similar functions.
"Kansas Tract" shall mean that certain tract or parcel of land
located in the County of Sedgwick, Kansas being more particularly described on
Exhibit "A" attached hereto and by this reference made a part hereof as the
"Kansas Tract".
"Lakewood Tract" shall mean that certain tract or parcel of
land located in Fulton County, Georgia being more particularly described on
Exhibit "A" attached hereto and by this reference made a part hereof as the
"Lakewood Tract".
"Land" shall mean, collectively, the Georgia Tracts, the North
Carolina Tracts, the South Carolina Tract, the Virginia Tract, the Alabama
Tracts, the Missouri Tract, the Oklahoma Tract, the Arkansas Tract, the
Tennessee Tract, the New York Tract and the California Tract.
"Leases and Rents" shall mean and include all leases, tenant
contracts, operating agreements, public warehouse agreements and rental
agreements pertaining to the Premises whether now or hereafter existing and
including, without limitation, [the Tarboro Lease and] all income, rents,
issues, profits and revenues of the Premises at any time and from time to time
now or hereafter accruing (including, without limitation, all payments under
leases or tenancies, proceeds of insurance, condemnation payments, tenant
security deposits, whether held by Borrower or in a trust account, payments to
Borrower in connection with any sale of any Premises to a tenant or customer
pursuant to the provisions of any lease or public warehouse agreement and escrow
funds), and all the estate, right, title, interest, property, possession, claim
and demand whatsoever at law, as well as in equity, of Borrower of, in and to
the same whether now or hereafter existing; provided, however, that the
assignment of any lease [(including, without limitation, the Tarboro Lease)],
operating agreement, tenant contract, public warehouse agreement and rental
agreement pursuant to which consent to the assignment is required from any or
all of the parties thereto, shall not be effective until such time as Lender
shall have obtained such consent.
<PAGE>
"Legal Requirements" shall mean all federal, state, county, municipal
and other governmental statutes, laws, rules, orders, regulations, ordinances,
judgments, decrees and injunctions (including, without limitation any of the
foregoing relating to Hazardous Materials) affecting all or any part of the
Premises or the construction, use, alteration or operation thereof, whether now
or hereafter enacted and in force, including, without limitation, (i) any which
may require repairs, modifications or alterations in or to all or any part of
the Premises, (ii) any which may in any way limit the use and enjoyment thereof,
and all permits, licenses and authorizations and regulations relating thereto,
(iii) all covenants, agreements, restrictions and encumbrances contained in any
instruments, either of record or known to Borrower, any time in force affecting
all or any part of the Premises, or (iv) any which may pertain to requirements
for equal opportunity, anti-discrimination, disability accommodation,
environmental protection, zoning or land use.
"Lender" shall mean Goldman Sachs Mortgage Company, a New York
limited partnership, together with its successors, successors-in-title and
assigns.
"Macon Tract" shall mean that certain tract or parcel of land
located in Bibb County, Georgia being more particularly described on Exhibit "A"
attached hereto and by this reference made a part hereof as the "Macon Tract".
"Missouri Tract" shall mean that certain tract or parcel of
land located in Saline County, Missouri being more particularly described on
Exhibit "A" attached hereto and by this reference made a part hereof as the
"Missouri Tract".
"Montgomery Tract" shall mean that certain tract or parcel of
land located in Montgomery County, Alabama being more particularly described on
Exhibit "A" attached hereto and by this reference made a part hereof as the
"Montgomery Tract".
"Moultrie Tract" shall mean that certain tract or parcel of
land located in Colquitt County, Georgia being more particularly described on
Exhibit "A" attached hereto and by this reference made a part hereof as the
"Moultrie Tract".
"New York Tract" shall mean that certain tract or parcel of
land located in Onondaga County, New York being more particularly described on
Exhibit "A" attached hereto and by this reference made a part hereof as the "New
York Tract".
"North Carolina Tracts" shall mean, collectively, the
Charlotte Tract and the Tarboro Tract.
"Note" shall have the meaning ascribed thereto in the Credit
Agreement.
<PAGE>
"Oklahoma Tract" shall mean that certain tract or parcel of
land located in Oklahoma County, Oklahoma being more particularly described on
Exhibit "A" attached hereto and by this reference made a part hereof as the
"Oklahoma Tract".
"Other Personalty" shall mean any and all personal property
included in the Plant, Equipment and Personal Property other than Fixtures.
"Pennsylvania Tract" shall mean that certain tract or parcel
of land located in the County of Berks, Pennsylvania being more particularly
described on Exhibit "A" attached hereto and by this reference made a part
hereof as the "Pennsylvania Tract".
"Permitted Liens" shall have the meaning ascribed thereto in
the Credit Agreement.
"Plant, Equipment and Personal Property" shall mean and
include all buildings, structures and improvements of every nature whatsoever
now or hereafter situated on the Land now or hereafter owned by Borrower or in
which Borrower now or hereafter has rights (to the extent of such rights), and
all gas and electric fixtures, radiators, heaters, engines and machinery,
boilers, ranges, elevators and motors, plumbing and heating fixtures, carpeting
and other floor coverings, fire extinguishers and any other safety equipment
required by governmental regulation or law, washers, dryers, water heaters,
mirrors, mantels, air conditioning apparatus, refrigerating plants,
refrigerators, cooking apparatus and appurtenances, window screens, awning and
storm sashes now or hereafter owned by Borrower, which are or shall be attached
to said buildings, structures or improvements and all other furnishings,
furniture, fixtures, machinery, equipment, appliances, racks, forklifts,
building supplies and materials, books and records, chattels, contract rights,
and personal property of every kind and nature whatsoever now or hereafter owned
by Borrower or in which Borrower now or hereafter has rights (to the extent of
such rights) and now or hereafter located in, on or about, or used or intended
to be used with or in connection with the use, operation or enjoyment of the
Premises, including all extensions, additions, improvements, betterments,
after-acquired property, renewals, replacements and substitutions, or proceeds
from a sale of any of the foregoing (but excluding, however, all motor
vehicles); and all the right, title and interest of Borrower now or hereafter in
any such furnishings, furniture, fixtures, machinery, equipment, appliances and
personal property subject to or covered by any prior or superior security
agreement, conditional sales contract, chattel mortgage or similar lien or
claim, together with the benefit of any deposits or payments now or hereafter
made by Borrower or on behalf of Borrower; and all personal property
constituting proceeds hereafter acquired with cash proceeds of any of the Plant,
Equipment and Personal Property described hereinabove; all of which are hereby
declared and shall be deemed to be fixtures (except for the purpose of the
definition of "Fixtures" above), and accessions to the Land and a part of the
Premises as between the parties hereto and all persons claiming by, through or
under them, and which shall be deemed to be a portion of the security for the
Combined Obligations. The location of the Plant, Equipment and Personal Property
is also the location of the Land.
<PAGE>
"Premises" shall mean and include, collectively, the Land, the
Plant, Equipment and Personal Property, the Easements and Appurtenances and the
Leases and Rents. Whenever the word "Premises" is preceded by the name of a
state or city, for example, "Georgia Premises", such reference shall be deemed
to mean and include that portion of the Premises located in the identified state
or city. If the context shall so require, the word "Premises" shall be
interpreted to mean the portion of the Land, the Plant, Equipment and Personal
Property, the Easements and Appurtenances and the Leases and Rents which relate
to a particular facility (as opposed to any group of facilities which may
comprise a given Tract).
"South Carolina Tract" shall mean that certain tract or parcel
of land located in Richland County, South Carolina being more particularly
described on Exhibit "A" attached hereto and by this reference made a part
hereof as the "South Carolina Tract".
"Tarboro Lease" shall mean that certain Public Warehousing
Service Agreement between Borrower and Kitchens of Sara Lee, Inc., as amended or
modified from time to time.
"Tarboro Tract" shall mean that certain tract or parcel of
land located in Edgecombe County, North Carolina being more particularly
described on Exhibit "A" attached hereto and by this reference made a part
hereof as the "Tarboro Tract".
"Tennessee Tract" shall mean, collectively, those certain
tracts or parcels of land located in Shelby County, Tennessee being more
particularly described on Exhibit "A" attached hereto and by this reference made
a part hereof as the "Tennessee Tract".
"Tract" or "Tracts" shall mean any one or all of the Georgia
Tracts, the North Carolina Tracts, the South Carolina Tract, the Virginia Tract,
the Alabama Tracts, the Missouri Tract, the Oklahoma Tract, the Arkansas Tract,
the Tennessee Tract, the New York Tract and the California Tract, as the context
may require. With respect to any Tract that includes more than one facility,
"Tract" shall mean any of such facilities, if the context so requires.
"Trustee" shall mean _______________, a resident of
_______________ County, North Carolina, with respect to the North Carolina
Premises; _______________, a _______________ corporation with respect to the
California Premises; _______________, a _______________ corporation with respect
to the Virginia Premises; _______________, a resident of _______________ County,
Tennessee, with respect to the Tennessee Premises; and _______________ with
respect to the Missouri Premises, together with any successor Trustee appointed
pursuant to the provisions of this Instrument. It is the intention of the
parties hereto that only the Trustee designated with respect to any Premises
need act with respect thereto, and not any other Trustee.
<PAGE>
"Virginia Tract" shall mean that certain tract or parcel of
land located in the City of Norfolk, Virginia being more particularly described
on Exhibit "A" attached hereto and by this reference made a part hereof as the
"Virginia Tract".
ARTICLE II.
GRANTING CLAUSES
2.1. Granting Clause. In order to secure the full and prompt payment
when due, whether by acceleration or otherwise, and full and prompt performance,
of the Combined Obligations in such order of priority as Lender may elect,
Borrower hereby mortgages, grants, conveys and warrants the Premises to Lender
or to Trustee for the benefit of Lender with respect to the North Carolina
Premises, the California Premises, the Missouri Premises, the Virginia Premises
and the Tennessee Premises and grants to Lender a security interest in the
Premises as more particularly set forth in this Article; provided, however, that
this grant of a security interest with respect to any Fixtures or Other
Personalty now owned or hereafter acquired which is subject to a prior or
superior security interest, the consent of the secured party of which to the
grant herein is required by the terms thereof, shall not be effective until such
time as such consents shall have been obtained:
2.1.1. Alabama Premises. Borrower hereby does
grant, bargain, sell, assign and convey unto
Lender, the successors, successors-in-title
and assigns of Lender, the Alabama Tracts,
together with the Plant, Equipment and
Personal Property, the Easements and
Appurtenances, and the Leases and Rents
pertaining to the Alabama Tracts, to have
and to hold forever.
2.1.2. Arkansas Premises. Borrower hereby does
grant, bargain, sell, assign, convey and
deliver unto Lender, the successors,
successors-in-title and assigns of Lender,
the Arkansas Tract, together with the Plant,
Equipment and Personal Property, the
Easements and Appurtenances and Leases and
Rents pertaining to the Arkansas Tract, to
have and to hold forever.
<PAGE>
2.1.3. California Premises. Borrower hereby does
grant, bargain, sell, assign and convey unto
Trustee, in trust with power of sale, the
California Tract, together with the Plant,
Equipment and Personal Property, the
Easements and Appurtenances, and the Leases
and Rents pertaining to the California
Tract, to have and to hold forever.
2.1.4. Georgia Premises. Borrower hereby does
grant, bargain, sell, assign and convey unto
Lender, the successors, successors-in-title
and assigns of Lender, the Georgia Tracts,
together with the Plant, Equipment and
Personal Property, the Easements and
Appurtenances and the Leases and Rents
pertaining to each such tract, to have and
to hold in fee simple forever, except as to
the _______________ Tract as to which the
leasehold interest is hereby assigned. With
respect to the Georgia Tracts, this
Instrument is intended to operate and is to
be construed as a deed passing title or an
assignment of lease to those tracts to
Lender and not as a mortgage and is made
under those provisions of the existing laws
of the State of Georgia relating to deeds to
secure debt.
2.1.5. Indiana Premises. Borrower hereby does
grant, bargain, sell, assign and convey unto
Lender, the successors, successors-in-title
and assigns of Lender, the Indiana Tract,
together with the Plant, Equipment and
Personal Property, the Easements and
Appurtenances, and the Leases and Rents
pertaining to the Indiana Tract, to have and
to hold forever.
2.1.6. Kansas Premises. Borrower hereby does grant,
bargain, sell, assign and convey unto
Lender, the successors, successors-in-title
and assigns of Lender, the Kansas Tract,
together with the Plant, Equipment and
Personal Property, the Easements and
Appurtenances, and the Leases and Rents
pertaining to the Kansas Tract, to have and
to hold forever.
2.1.7. Missouri Premises. Borrower hereby does
grant, bargain, sell, convey and confirm
unto _______________ as Trustee in trust for
the benefit of Lender, the successors,
successors-in-title and assigns of Lender,
the Missouri Tract, together with the Plant,
Equipment and Personal Property, the
Easements and Appurtenances, and the Leases
and Rents pertaining to the Missouri Tract,
to have and to hold the same unto said
Trustee and to said Trustee's successor or
successors in trust forever, in trust for
the purposes set forth herein, and
possession of said premises is now delivered
unto Trustee, including the right to collect
rents as hereinafter set forth.
<PAGE>
2.1.8. New York Premises. Borrower hereby does
grant, bargain, sell, assign and convey unto
Lender, the New York Tract, together with
the Plant, Equipment and Personal Property,
the Easements and Appurtenances, and the
Leases and Rents pertaining to the New York
Tract, to have and hold forever.
2.1.9. North Carolina Premises. Borrower hereby
does irrevocably grant, bargain, sell,
assign and convey unto Trustee in trust,
with power of sale, under and subject to the
terms hereof, for the benefit of Lender, the
North Carolina Tracts, together with the
Plant, Equipment and Personal Property, the
Easements and Appurtenances, and the Leases
and Rents pertaining to the North Carolina
Tracts, to have and hold forever.
2.1.10. Oklahoma Premises. Borrower hereby does
grant Lender a first mortgage and security
interest in and to the Oklahoma Premises,
all and singular, and warrants title to the
same, and further irrevocably assigns,
transfers and sets over unto Lender all
Leases and Rents thereof, absolutely not
collaterally (reserving only unto Borrower
the rights to collect the same as provided
by Subsection 3.6.1 hereof), to have and to
hold unto Lender, its successors and
assigns, forever.
Borrower further grants, acknowledges and
confirms unto Lender, as mortgagee, the full
power of sale of the Oklahoma Premises to
the extent of all real or mixed property
thereof, as authorized by the Oklahoma Power
of Sale Mortgage Foreclosure Act (46 O.S.
Supp. 1987 ss.ss. 40 et seq.), as said Act
is or may hereafter be amended, from time to
time, in addition to and not by way of
limitation of any and all other remedies
allowed at law or in equity.
<PAGE>
2.1.11. Pennsylvania Premises. Borrower hereby does
grant, bargain, sell, assign and convey unto
Lender, the successors, successors-in-title
and assigns of Lender, the Pennsylvania
Tract, together with the Plant, Equipment
and Personal Property, the Easements and
Appurtenances, and the Leases and Rents
pertaining to the Pennsylvania Tract, to
have and to hold forever.
2.1.12. South Carolina Premises. Borrower hereby
does convey, bargain, sell, release, assign
and grant a security interest unto Lender in
and to the South Carolina Tract, together
with the Plant, Equipment and Personal
Property, the Easements and Appurtenances
and the Leases and Rents pertaining to the
South Carolina Tract, to have and hold
forever.
2.1.13. Tennessee Premises. Borrower hereby does
grant, bargain, sell, assign, warrant,
pledge and convey unto Trustee, his
successors and assigns, in trust for the
benefit of Lender, the successors,
successors-in-title and assigns of Lender,
the Tennessee Tract, together with the
Plant, Equipment and Personal Property, the
Easements and Appurtenances and the Leases
and Rents pertaining to each such tract, to
have and to hold in fee simple forever. THIS
CONVEYANCE IS MADE IN TRUST AS TO THE
TENNESSEE PREMISES IN ORDER TO SECURE THE
COMBINED OBLIGATIONS AND FOR NO OTHER
PURPOSES.
2.1.14. Virginia Premises. Borrower hereby does
grant, bargain, sell, assign and convey unto
Trustee, the successors, successors-in-title
and assigns of Trustee, the Virginia Tract,
together with the Plant, Equipment and
Personal Property, the Easements and
Appurtenances and Leases and Rents to the
Virginia Tract, to have and to hold forever.
2.2. Warranty of Title. Borrower does warrant and will forever defend
the title to the Premises against the claims of all persons whomsoever, except
as to the Permitted Liens. Borrower represents and warrants that it is lawfully
seized of the Premises, other than the ____________ Tract [DELETE, IF NOT
APPLICABLE], in fee simple absolute, that Borrower has a valid leasehold estate
in the ____________ Tract [DELETE, IF NOT APPLICABLE] and the __________ Tract,
that Borrower has good right and is lawfully authorized to sell, convey or
encumber the Premises and that the Premises are free and clear of all
encumbrances except liens for real property taxes not yet due and payable and
Permitted Liens.
<PAGE>
2.3. Defeasance; Sales Pursuant to Existing Leases.
(a) Should the Combined Obligations secured by this Instrument be paid
and satisfied, then this Instrument and the conveyance effected and the liens
and security interests granted hereby shall be released and terminated and shall
be canceled and surrendered. Upon payment and satisfaction of the Combined
Obligations in full, Lender and Trustee shall execute, in recordable form, and
deliver to Borrower such instruments as are required to release and terminate of
record this Instrument. As to the South Carolina Premises, it is the intent and
meaning of Borrower and Lender that, if Borrower pays or causes to be paid to
Lender the Combined Obligations, the estate hereby granted shall cease,
terminate and be null and void, otherwise such estate shall remain in full force
and effect.
(b) Lender acknowledges that, pursuant to [(i)] the terms of that
certain Public Warehousing Service Agreement between Borrower and Kitchens of
Sara Lee, Inc. pertaining to the Tarboro Tract, [and _____________________,] the
Borrower may either elect or be required to convey to the lessee thereunder the
Land leased pursuant thereto, together with all or part of the Plant, Equipment
and Personal Property thereon. In the event of any such sale, Lender shall
release the Lien of this Instrument from the subject Premises upon payment to
Lender of all of the sales proceeds payable to Borrower with respect to such
sale, net of reasonable costs of sale.
2.4. Maximum Amount - North Carolina. The maximum amount, including
now existing and future disbursements, which may be secured hereby with respect
to the North Carolina Premises at any one time is equal to the principal amount
of $_______________; provided, however, that said maximum amount may be
increased by such additional sums and amounts as may be advanced by Lender
pursuant to the provisions of this Instrument for the protection and
preservation of the Premises, and such additional sums and amount as shall be
deemed necessary expenditures for the protection of the security in accordance
with N.C. Gen. Stat. Section 45-70(c).
2.5. Maximum Amount - South Carolina. With respect to the South
Carolina Premises, the total amount of the indebtedness that may be secured by
this Instrument at one time shall not exceed _______________ and No/100 Dollars
($_______________.00), plus interest thereon, and any disbursements made for the
payment of taxes, assessments, levies, or insurance, plus interest thereon,
reasonable, actual attorneys' fees and court costs.
2.6. Future Disbursements. This Instrument secures all present and
future loan disbursements made by Lender to Borrower which are included in the
Combined Obligations.
<PAGE>
ARTICLE III.
COVENANTS OF BORROWER
3.1. Payment of Indebtedness. Borrower will pay the Combined
Obligations according to the tenor thereof and all other sums now or hereafter
secured hereby promptly as the same shall become due.
3.2. Taxes, Liens and Other Charges.
3.2.1. In the event of the passage of any state,
federal, municipal or other governmental
law, order, rule or regulation, subsequent
to the date hereof, in any manner changing
or modifying the laws now in force governing
the taxation of debts secured by mortgages,
deeds of trust or deeds to secure debt (not
including tax on interest income associated
with such debt) or the manner of collecting
taxes so as to adversely affect Lender,
Borrower will promptly pay any such tax;
provided that, if such tax cannot legally be
paid by Borrower, then, on demand of Lender,
Borrower will prepay the Combined
Obligations in an amount equal to the Fair
Market Value with respect to the applicable
portion of the Premises(s). Lender agrees to
notify Borrower of the passing of any such
law, order, rule or regulation promptly upon
becoming actually aware thereof. Lender
shall not be deemed to be actually aware of
any such law, order, rule or regulation
unless and until an officer of Lender
responsible for administering the credit
relationship with the Borrower has become
actually aware thereof. If Borrower fails to
make such prompt payment or if, in the
reasonable opinion of Lender, any such
state, federal, municipal, or other
governmental law, order, rule or regulation
prohibits Borrower from making such payment
or would penalize Lender if Borrower makes
such payment or if, in the reasonable
opinion of Lender, the making of such
payment would result in the imposition of
interest beyond the maximum amount permitted
by applicable law, then the entire Combined
Obligations shall, at the option of Lender,
become immediately due and payable.
3.2.2. Except to the extent Borrower is contesting
the same in good faith, Borrower will pay,
before the same become delinquent, all
taxes, liens, assessments and charges of
<PAGE>
every character including all utility
charges, whether public or private, already
levied or assessed or that may hereafter be
levied or assessed upon or against the
Premises and, upon demand, will furnish
Lender receipted bills evidencing such
payment.
3.2.3. Borrower will not suffer any mechanic's,
materialman's, laborer's, statutory or other
lien to be created and to remain outstanding
upon all or any part of the Premises, except
for inchoate liens securing obligations not
yet due and payable, and except for
"Permitted Liens" and liens that Borrower
has bonded over.
3.2.4. Borrower, to the full extent permitted by
applicable law, shall indemnify, defend and
hold Lender harmless from, or shall
reimburse Lender for, any and all intangible
tax, documentary stamp tax, mortgage tax,
note tax or other like or similar tax
(excluding income, franchise or capital
taxes or taxes imposed in lieu of such
taxes) imposed on the income of Lender or
because Lender may be deemed to be doing
business in the jurisdiction) imposed with
respect to this Instrument or under any
power of sale herein granted, any of the
other Combined Documents, or the Combined
Obligations, and from any interest, charges
or penalties assessed with respect thereto.
3.2.5. Nothing contained in this Section 3.2 shall
require the payment or discharge of any such
tax, lien, assessment or charge by Borrower
for so long as Borrower shall in good faith
and at its own expense contest the same or
the validity thereof by appropriate
administrative and legal proceedings
provided such contest is permitted by law,
and shall not constitute a default under any
of the Combined Documents and provided the
same shall prevent (i) the collection
thereof or other realization thereon and the
sale or forfeiture of the Premises or any
part thereof to satisfy the same or (ii) the
enforcement thereof against Borrower, Lender
or the Premises or any part thereof.
<PAGE>
3.3. Insurance.
3.3.1. So long as any portion of the Combined
Obligations remains unpaid, Borrower, at its
expense, shall procure and maintain for the
benefit of Lender, insurance policies issued
by such insurance companies, and in such
amounts as are reasonably acceptable to
Lender, providing the following types of
insurance covering the Premises:
(i) All Risks Property Insurance
and separate insurance against
such other insurable hazards
as, under good insurance
practices, from time to time
are insured against for similar
properties in the area of the
Premises. The amount of such
insurance shall be not less
than one hundred percent (100%)
of the Full Replacement Cost of
the Plant, Equipment and
Personal Property without
deduction for depreciation. As
used herein, "Full Replacement
Cost" means the cost of
replacing the Plant, Equipment
and Personal Property,
exclusive of the cost of
excavations, foundations and
footings below the lowest
basement floor. Each policy
shall contain a Replacement
Cost Endorsement and an Agreed
Value Endorsement.
(ii) Business Interruption Insurance
insuring against loss of income
by reason of any hazard covered
under the insurance required
under Subsections (i), (iv) and
(v) of this Subsection 3.3.1 in
an amount sufficient to avoid
any coinsurance penalty, but in
any event for not less than one
year's gross receipts from all
sources of income from the
Premises less expenses not
reasonably expected to continue
during the period of
reconstruction.
(iii) Comprehensive General Liability
Insurance with broad form
liability endorsement or
comparable coverages for
personal injury liability,
including, without limitation,
bodily injury, death or
property damage liability and
also garage keeper's liability,
products liability, elevator
liability and blanket
contractual liability on an
occurrence basis in such amount
as Lender may require.
<PAGE>
(iv) Boiler and Machinery Insurance
in such amount as Lender may
reasonably require, covering
physical damage to the Plant,
Equipment and Personal
Property, to the boilers,
pressure vessels, pressure
piping and other major
components of any central
heating, air-conditioning or
ventilating systems, to the
special refrigeration equipment
and to such other equipment as
Lender may require from time to
time.
(v) Flood Insurance in an amount
reasonably satisfactory to
Lender and which otherwise
complies with the national
flood insurance program as set
forth in the "Flood Disaster
Protection Act of 1973", as
well as subsequent amendments
thereto, provided the
respective Premises is included
in a HUD designated flood prone
area.
(vi) Worker's Compensation Insurance
(including Employer's Liability
Insurance) covering all
employees of the Borrower
employed in or about the
Premises to provide
health-related claims coverage
as well as statutory benefits
as required by the laws of the
state where the respective
Premises is located.
(vii) Such other insurance on the
Premises, or any part or parts
thereof, or any replacements or
substitutions therefor, or
additions thereto, and in such
amounts as may from time to
time reasonably be required by
Lender against other insurable
hazards or casualties which at
the time are commonly insured
against in the case of premises
similarly situated, due regard
being given to the height and
type of the respective Plant,
Equipment and Personal
Property, and other property
and their construction,
location, use and occupancy.
<PAGE>
All insurance policies referenced in this
Subsection 3.3.1 which protect against
physical damage to the Plant, Equipment and
Personal Property, including but not limited
to those policies referenced in Subsection
3.3.1 clauses (i), (ii), (iv) and (v) above,
shall contain a standard mortgagee clause
(without contribution) in favor of Lender,
shall not be terminable without thirty (30)
days' prior written notice to Lender, and
shall be evidenced by original policies or
certified copies of policies deposited with
Lender, to be held by Lender until the
Combined Obligations shall have been fully
paid and discharged. All other insurance
policies, such as general liability
policies, required by the terms of this
Instrument shall be evidenced by
certificates delivered to Lender and in case
of cancellation, shall provide for ten (10)
days' prior written notice to Lender.
3.3.2. Lender shall have the right, if an Event of
Default shall have occurred and be
continuing, to approve any adjustment or
compromise of any loss in excess of
$1,000,000 (the "Threshold Amount") with
respect to any Tract (or any facility which
comprises a portion of any Tract) under any
insurance policies maintained pursuant to
paragraphs (i), (iv), (v) and (vii) of
Subsection 3.3.1. Lender shall have the
right to collect and receive the proceeds
from any such policy or policies (the
"Insurance Proceeds") where the Insurance
Proceeds are equal to or greater than the
Threshold Amount. To the extent permissible
under law, each insurance company is hereby
authorized and directed to make payment for
all such losses where the Insurance Proceeds
are equal to, or are in excess of, the
Threshold Amount directly to Lender, instead
of to Borrower or Borrower and Lender
jointly.
In the event that the Insurance Proceeds are
less than the Threshold Amount, such amount
shall be paid directly to the Borrower. If
the Insurance Proceeds are equal to, or in
excess of, the Threshold Amount but less
than $10,000,000, then, from time to time
(but not more frequently than once per
month), upon receipt by Lender of a
certificate signed by an appropriate officer
of Borrower stating that such Insurance
Proceeds shall be used to reimburse Borrower
for actual costs payable to third parties to
rebuild, restore, repair or reconstruct the
damaged Premises, Lender shall disburse such
<PAGE>
Insurance Proceeds (or the applicable
portion thereof) to Borrower. If the
Insurance Proceeds are greater than
$10,000,000, then, Lender shall disburse
such Insurance Proceeds in accordance with
the reasonable and customary practices with
respect to the funding of construction loans
by institutional lenders for the purpose of
funding (or reimbursing Borrower for) actual
costs payable to third parties to rebuild,
restore, repair or reconstruct the damaged
Premises.
In the event there is a loss in excess of
the Threshold Amount and any insurance
company fails to disburse directly and
solely to Lender but disburses instead
either solely to Borrower or to Borrower and
Lender jointly, Borrower agrees immediately
to endorse and transfer such proceeds to
Lender. Upon the failure of Borrower to
endorse and transfer such proceeds as
aforesaid, Lender may execute such
endorsements or transfers for and in the
name of Borrower and Borrower hereby
irrevocably appoints Lender as Borrower's
agent and attorney-in-fact so to do.
Lender shall not be held responsible for any
failure to collect any insurance proceeds
due under the terms of any policy regardless
of the cause of such failure absent gross
negligence or willful misconduct.
3.3.3. Not less than ten (10) days prior to the
expiration date of each policy maintained
pursuant to this Section 3.3, evidence of a
renewal or replacement thereof satisfactory
to Lender shall be delivered to Lender. At
the request of Lender, Borrower shall
deliver to Lender receipts evidencing the
payment for all such insurance policies and
renewals or replacements. In the event of
the foreclosure of this Instrument or any
other transfer of title to any of the
Premises in extinguishment, in whole or in
part, of the Combined Obligations, all
right, title and interest of Borrower in and
to all insurance policies then in force with
respect to such Premises shall pass to the
purchaser or grantee.
<PAGE>
3.3.4. Any provision of this Instrument to the
contrary notwithstanding, this Section 3.3
and the rights and obligations of Borrower
and Lender hereunder with respect to
insurance are in all respects subject to and
subordinate to any security agreements prior
or superior to this Instrument and the
rights of the "secured parties" thereof
relating to the collection and disposition
of insurance proceeds; provided, however, to
the extent this Section 3.3 imposes
requirements for the procurement and
maintenance by Borrower of insurance in
excess of that required by any of the
Combined Documents or any security
agreements prior or superior to this
Instrument, the more extensive requirements
of this Instrument shall control as between
Borrower and Lender.
3.4. Condemnation. If all or any portion of any Premises shall be
damaged or taken through condemnation (the term "condemnation" when used in this
Instrument shall include any damage or taking by any governmental or
quasi-governmental authority and any transfer by private sale in lieu thereof),
Lender shall have the right, if an Event of Default shall have occurred and be
continuing, to approve any adjustment or compromise of any award in excess of
the Threshold Amount. With respect to any condemnation which involves an award
in excess of the Threshold Amount, all such compensation, awards, damages,
claims, rights of action and proceeds and the right thereto are hereby assigned
by Borrower to Lender, and Lender is authorized, at its option, to collect and
receive all such compensation, awards or damages and to give proper receipts and
acquittances therefor without any obligation to question the amount of any such
compensation, awards or damage. If after deducting from said condemnation
proceeds all of the reasonable actual expenses incurred in the collection and
administration of such sums, including attorney's fees, any such compensation,
award or damages is: (i) less than the Threshold Amount, then such amount shall
be paid directly to the Borrower, (ii) equal to or greater than the Threshold
Amount, but less than $10,000,000, then, upon receipt by Lender of a certificate
signed by an appropriate officer of Borrower stating that such Insurance
Proceeds shall be used to reimburse Borrower for actual costs payable to third
parties to rebuild and/or restore the condemned Premises, Lender shall disburse
such compensation, awards or damages (or the applicable portion thereof) to
Borrower; or (iii) greater than $10,000,000, then, Lender shall disburse such
Insurance Proceeds in accordance with the reasonable and customary practices
with respect to the funding of construction loans by institutional lenders for
the purpose of funding (or reimbursing Borrower for) actual costs payable to
third parties to rebuild and/or restore the condemned Premises.
<PAGE>
If, prior to the receipt by Lender of such award or proceeds, the Premises shall
have been sold on foreclosure of this Instrument, Lender shall have the right to
receive such award or proceeds to the extent of any unpaid Combined Obligations
following such sale, with interest thereon at the "Default Rate" (as defined in
the Credit Agreement), whether or not a deficiency judgment on this Instrument
shall have been sought or recovered, and to the extent of reasonable actual
counsel fees, costs and disbursements incurred by Lender in connection with the
collection of such award or proceeds.
3.5. Care of Premises. Borrower hereby covenants and agrees:
3.5.1. Borrower will, at its expense, (i) keep the
buildings, parking areas, roads and
walkways, recreational facilities,
landscaping and all other improvements of
any kind now or hereafter erected on the
Land or any part thereof in accordance with
Borrower's maintenance practices as of
October 31, 1997 and in compliance with all
existing and future applicable Legal
Requirements, and (ii) not commit or suffer
to be committed any waste of the Premises or
do or suffer to be done anything (other than
that which is inherent in the ordinary
course of Borrower's business operations)
which will increase the risk of fire or
other hazard to the Premises, impair the
value thereof or take any action which might
invalidate any insurance carried on the
Premises. Borrower shall keep the sidewalks,
vaults, gutters and curbs comprising of, or
adjacent to, the Premises, clean and free
from dirt, snow, ice, rubbish and
obstructions. All repairs made by Borrower
shall be made in a good and workmanlike
manner, shall be equal or better in quality
and class to the original work and shall
comply with all applicable Legal
Requirements and Insurance Requirements.
3.5.2. Borrower may demolish, remove, construct or
alter the Premises or any portion thereof;
or consent to or permit any such demolition,
removal, construction, or alteration without
Lender's prior written consent in each
instance; provided, in each case, that any
such demolition, removal, construction or
alteration does not materially and adversely
affect the value of the Premises.
<PAGE>
3.5.3. If the Premises or any part thereof is
materially damaged by fire or any other
cause, Borrower will give immediate written
notice thereof to Lender.
3.5.4. Lender or its representative is hereby
authorized to enter upon and inspect the
Premises at any time during normal business
hours provided that Lender will not
unreasonably interfere with the business
operations of Borrower.
3.6. Leases, Contracts, Etc.
3.6.1. As additional collateral and further
security for the Combined Obligations,
Borrower does hereby assign as a present and
absolute assignment (to the extent
assignable and subject to the provisions in
the definition of "Leases and Rents"
regarding the assignment of any lease or
other agreement [(including, without
limitation, the Tarboro Lease)] pursuant to
which consent to the assignment is required
from any or all of the parties thereto) to
Lender or Trustee, as appropriate, all of
Borrower's right, title and interest now
existing or hereafter arising in and to any
and all Leases and Rents, franchise
agreements, management contracts,
construction contracts, and other contracts
(not included in the definition of Leases
and Rents), licenses and permits now or
hereafter affecting the Premises, or any
part thereof (reserving only to Borrower the
right to collect currently due and payable
income, rents, issues, profits, charges and
revenues from the Premises, other than
payments to Borrower in connection with any
sale of any Premises to a tenant or customer
pursuant to the provisions of any lease or
warehousing agreement, so long as no Event
of Default is in existence hereunder). The
foregoing is intended to be a present and
absolute assignment and not merely the
passing of a security interest. However, so
long as an Event of Default shall not have
occurred and be continuing, Borrower shall
have the right to receive the rents and
other amounts described above and to enforce
the obligations of the parties to such
<PAGE>
leases and other agreements. Borrower agrees
to execute and deliver to Lender, such
additional instruments, in form and
substance reasonably satisfactory to Lender,
or Trustee, as appropriate, as may hereafter
be requested by Lender further to evidence
and confirm said assignment; provided,
however, that acceptance of any such
assignment shall not be construed as a
consent by Lender to any lease, operating
agreement, tenant contract, rental
agreement, franchise agreement, management
contract, construction contract, or other
contract, license or permit, or to impose
upon Lender, any obligation with respect
thereto. Except in the ordinary course of
business and until Lender shall direct
otherwise with respect to any particular
lease, operating agreement, tenant contract,
rental agreement, franchise agreement,
management contract, construction contract
or other contract, license or permits,
Borrower shall not cancel or permit the
cancellation of any such lease, tenant
contract, rental agreement, franchise
agreement, management contract, construction
contract, or other contract, license or
permit, or materially modify any of said
instruments, or accept, or permit to be
made, any prepayment of any installment of
rent or fees thereunder (except for security
deposits and the usual prepayment of rent
which results from the acceptance by a
landlord on the first day of each month of
the rent for that month). Borrower shall
faithfully keep and perform, or cause to be
kept and performed, all of the material
covenants, conditions and agreements
contained in each of said instruments, now
or hereafter existing, on the part of
Borrower to be kept and performed and, in
the ordinary course of Borrower's business,
shall at all times do all things reasonably
necessary to compel performance by each
other party to said instruments of all
obligations, covenants and agreements by
such other party to be performed thereunder.
3.6.2. Borrower shall furnish to Lender, within
twenty (20) days after a receipt of a
request by Lender to do so, such information
as Lender from time to time may reasonably
request concerning the leases, operating
agreements, tenant contracts, rental
agreements, and other agreements pertaining
to the use of the Premises.
3.6.3. In addition to any other right or remedy
contained herein or in any other Loan
<PAGE>
Document, Lender shall have all of the
rights against lessees of the New York Tract
or any part thereof as are set forth in
Section 291-f of the Real Property Law of
New York.
3.7. Security Agreement.
3.7.1. PARTS OF THE PREMISES ARE, OR ARE TO BECOME,
FIXTURES ON THE LAND. Insofar as the Plant,
Equipment and Personal Property and the
Leases and Rents are concerned, this
Instrument is hereby made and declared to be
a security agreement, and a security
interest is hereby granted by Borrower to
Lender encumbering each and every item of
Plant, Equipment and Personal Property and
of Leases and Rents (collectively, the "UCC
Collateral") in compliance with the
provisions of the applicable Uniform
Commercial Code ("UCC"). A financing
statement or statements reciting this
Instrument to be a security agreement,
affecting all of said personal property
aforementioned, shall be executed by
Borrower and Lender and appropriately filed.
The remedies for any violation of the
covenants, terms and conditions of the
security agreement herein contained shall be
(i) as prescribed herein, or (ii) as
prescribed by general law, or (iii) as
prescribed by the specific statutory
consequences now or hereafter enacted and
specified in the applicable UCC, all at
Lender's sole election.
3.7.2. Borrower warrants that (i) Borrower's (that
is, "Debtor's") name, identity or corporate
structure and residence or principal place
of business are as set forth in Subsection
3.7.3 hereof; (ii) Borrower (that is,
"Debtor") has been using or operating under
said name, identity or corporate structure
without change for the time period set forth
in Subsection 3.7.3 hereof; (iii) that
Borrower is duly qualified to do business in
each state in which the Land is located
except where the failure to be so qualified
is not reasonably likely to have a material
adverse affect on the performance, business
operations, property, assets, liabilities,
conditions (financial or otherwise) or
prospects of the Borrower; and (iv) the
location of the Plant, Equipment and
Personal Property is upon the Land and at
the executive office in Atlanta, Georgia or
at Borrower's office in Saddle Brook, New
Jersey. Borrower covenants and agrees that:
(a) Borrower will furnish Lender with notice
of any change in the matters addressed by
clauses (i) or (iii) of this Subsection
3.7.2 within thirty (30) days of the
<PAGE>
effective date of any such change; (b)
Borrower will promptly execute any financing
statements or other instruments reasonably
deemed necessary by Lender to prevent any
filed financing statement from becoming
misleading or losing its perfected status;
and (c) and that Borrower will remain
qualified to do business in each state in
which the Land is located.
3.7.3. Upon execution by Lender (where local
practice requires the same), this Instrument
shall constitute a financing statement filed
as a fixture filing under the UCC in the
real estate records of the county or city in
which the Premises is located with respect
to all fixtures which are a part of the
Premises and with respect to any goods or
other personal property that may now be or
hereafter become a fixture. The information
contained in this Subsection 3.7.3 is
provided in order that this Instrument shall
comply with the requirements of the
applicable UCC for instruments to be filed
as financing statements, to perfect the
security interests with respect to fixtures.
The names of the "Debtor" and the "Secured
Party", the identity or corporate structure
and residence or principal place of business
of "Debtor", and the time period for which
"Debtor" has been using or operating under
said name and identity or corporate
structure without change, are as set forth
in Exhibit "B", attached hereto and by this
reference made a part hereof; and the
mailing address of Borrower (that is,
"Debtor"), are as set forth in Section 5.5
of this Instrument; and a statement
indicating the types, or describing the
items, of collateral is set forth
hereinabove. Borrower hereby irrevocably
appoints Lender as its attorney-in-fact,
coupled with an interest, to file with the
appropriate public office on its behalf any
financing, continuation or other statements
signed only by Lender, as secured party, in
connection with the UCC Collateral covered
by this Instrument.
<PAGE>
3.7.4. Removal of Equipment. Subject to the
provisions of the Credit Agreement, Borrower
may move any Other Personalty from any
Premises without notice to or consent of
Lender.
3.7.5. Reasonableness of Disposition. Any
disposition pursuant to the UCC of so much
of the UCC Collateral as may constitute
personal property shall be considered
commercially reasonable if made pursuant to
a public sale which is advertised at least
twice in a newspaper in which Sheriff's
sales are advertised in the county where the
Premises is located. Any notice of sale,
disposition or other intended action by
Lender with respect to the UCC Collateral
given to Borrower in accordance with the
provisions hereof at least ten (10) days
prior to such action, shall constitute
reasonable notice to Borrower. The proceeds
of any disposition of the UCC Collateral, or
any part thereof, may be applied by Lender
to the payment of the Combined Obligations
in such priority and proportions as Lender
in its discretion shall deem proper.
3.7.6. Conflict with Credit Agreement. To the
extent any of the provisions of this
Instrument pertaining to Plant, Equipment
and Personal Property are in conflict with
any provisions of the Credit Agreement, the
conflicting provisions of the Credit
Agreement shall govern and control over the
conflicting provisions of the Credit
Agreement.
3.8. Further Assurances; After Acquired Property. At any time, and
from time to time, upon request by Lender, Borrower will make, execute and
deliver or cause to be made, executed and delivered to Lender and, where
appropriate, cause to be recorded and/or filed and from time to time thereafter
to be re-recorded and/or refiled at such time and in such offices and places as
shall be deemed desirable by Lender, any and all such other and further
mortgages, deeds of trust, security agreements, financing statements,
continuation statements, instruments of further assurance, certificates and
other documents as may, in the opinion of Lender reasonably exercised, be
necessary or desirable in order to effectuate, complete, or perfect, or to
continue and preserve (a) the obligation of Borrower under the Combined
Obligations and under this Instrument and (b) the lien and security interests
granted by this Instrument as a first and prior lien (except for the Permitted
Liens) upon and in and to all of the Premises, whether now owned or hereafter
acquired by Borrower. Upon any failure by Borrower so to do, Lender may make,
execute, record, file, re-record and/or refile any and all such mortgages,
security agreements, deeds of trust, financing statements, continuation
statements, instruments, certificates and documents for and in name of Borrower
and Borrower hereby irrevocably appoints Lender the agent and attorney-in-fact
of Borrower so to do. The lien of this Instrument and the security interest
created hereby will, subject to the provisions of Subsection 2.2.2,
automatically attach, without further act, to after-acquired property attached
<PAGE>
to and/or used in connection with the operation of the Premises or any part
thereof except for motor vehicles. Without limiting the generality of the
foregoing, Borrower shall use its commercially reasonable, good faith efforts to
obtain the consent of any party whose consent is required in connection with the
assignment of any lease or other agreement pursuant to which consent to the
assignment is required from any or all of the parties thereto [(including,
without limitation, the consent of Sara Lee with respect to the Tarboro Lease)]
and the consent of secured parties under prior or superior security interests in
Other Personalty if such consent is required to the grant of the security
interest in such Other Personalty contained herein.
3.9. Expenses. Borrower will pay or reimburse Lender, upon demand
therefor, for all reasonable actual attorney's fees, costs and expenses incurred
by Lender in any suit, action, legal proceeding or dispute of any kind in which
Lender is made a party or appears as party plaintiff or defendant, affecting the
Combined Obligations secured hereby, this Instrument or the interest created
herein, or the Premises, including, but not limited to, the exercise of the
power of sale contained in this Instrument or the foreclosure of this
Instrument, any condemnation action involving the Premises or any action to
protect the security hereof; and any such amounts paid by Lender shall be
included in the Combined Obligations secured by the lien of this Instrument.
Notwithstanding the foregoing, Lender shall not be entitled to recover any such
expenses in any such suit by Lender against Borrower if such suit results in a
judicial determination in favor of Borrower with respect to the subject matter
thereof or results in a determination of liability against Lender based on an
act of gross negligence or willful misconduct.
3.10. Intentionally Omitted.
3.11. Subrogation. Lender shall be subrogated to all right, title,
equity liens and claims of all persons, firms or corporations to whom Borrower
has paid or pays, or to whom monies are paid, from the proceeds of the Combined
Obligations in the settlement of claims, liens or charges or for the benefit of
Borrower.
3.12. Limit of Validity. If from any circumstances whatsoever
fulfillment of any provision of this Instrument, at the time performance of such
provision shall be due, shall involve transcending the limit of validity
<PAGE>
presently prescribed by any applicable usury statute or any other applicable
law, with regard to obligations of like character and amount, then ipso facto
the obligation to be fulfilled shall be reduced to the limit of such validity,
so that in no event shall any exaction be possible under this Instrument that is
in excess of the current limit of such validity, but such obligation shall be
fulfilled to the limit of such validity.
3.13. Intentionally Omitted.
3.14. No Junior Encumbrances. Except as permitted pursuant to the
terms of the Credit Agreement, Borrower shall not further mortgage, encumber or
pledge all or any part of the Premises or of Borrower's interest in the Premises
or any part thereof.
3.15. Additional Covenants and Terms Applicable to the New
York Premises.
3.15.1. Borrower, in compliance with Section 13 of
the Lien Law of the State of New York will,
with respect to the New York Tract, receive
the advances secured by this Instrument and
will hold the right to receive such advances
as a trust fund to be applied first for the
purpose of paying the cost of improvements
and will apply the same first to the cost of
improvements before using any part of the
total of the same for any other purpose.
Borrower will indemnify and hold Lender
harmless against any loss or liability,
reasonable actual cost or expense,
including, without limitation, any
judgments, attorneys' fees, costs of appeal
bonds and printing costs, arising out of or
relating to any proceeding instituted by any
claim alleging a violation by Borrower of
any Section of Article 3-A of the Lien Law
of the State of New York.
3.15.2. With respect to the New York Tract, all
covenants and conditions contained herein,
other than those included in the New York
Statutory Short form of Mortgage, shall be
construed as affording to the Lender rights
additional to, and not exclusive of, the
rights conferred under the provisions of
Section 254 of the Real Property Law of the
State of New York.
3.16. Hazardous Materials. Borrower hereby represents that, except as
clearly identified in the environmental reports delivered to the Lender prior to
the date hereof, to the best knowledge of Borrower, neither Borrower nor any
<PAGE>
other person has (i) ever caused or permitted any Hazardous Materials to be
unlawfully placed, held, located or disposed of on, under or at the Land or
Plant, Equipment and Personal Property, or any part thereof or (ii) ever used
the Land or Plant, Equipment and Personal Property or any part thereof as a dump
site or storage site (whether permanent or temporary) for any Hazardous
Materials, and has only stored Hazardous Materials normally used or generated in
the operation and maintenance of a refrigerated warehouse or customer products,
and that any such storage is and has been in compliance with all Environmental
Laws.
(a) Borrower shall pay, defend and indemnify Lender and hold
Lender harmless from and against any and all losses, costs,
liabilities, including strict liability, damages, injuries,
expenses, including reasonable, actual attorneys' fees, costs
of any settlement or judgment and claims of any and every kind
whatsoever (herein collectively "Liabilities") paid, incurred
or suffered by, or asserted against, Lender by any person or
entity or governmental agency for, with respect to, or as a
direct or indirect result of, the presence on or under, or the
escape, seepage, leakage, spillage, discharge, emission or
release from the Land or Plant, Equipment and Personal
Property of any Hazardous Material or any infectious waste
including, without limitation, any Liabilities asserted or
arising under the Environmental Laws regardless of whether or
not caused by or within the control of Borrower, except to the
extent arising out of Lender's gross negligence or willful
misconduct or, with respect to each Tract, any action taken by
Lender after Lender has assumed the ownership or operation of
such Tract, which action is not reasonably necessary to
correct a pre-existing violation of an Environmental Law. If
any claim or action is asserted in writing as to which
indemnification may be sought under this paragraph, Lender
will give prompt written notice to Borrower and Borrower shall
elect within 10 days of receipt of such notice, whether to
assume the defense thereof, including the employment of
counsel reasonably satisfactory to Lender and payment of all
expenses of such defense, with full power to litigate,
compromise or settle the same in its sole discretion
(provided, however, that Borrower shall not admit the
liability of Lender with respect thereto in any such
litigation, compromise or settlement, and any such compromise
or settlement shall include a full release of liability for
Lender at no cost to it).
(b) If Borrower receives any notice of (i) the happening of any
event involving the use (other than of those substances
normally used in the operation and maintenance of a
<PAGE>
refrigerated warehouse or customer products), spill, release,
leak, seepage, discharge or cleanup of any Hazardous Substance
on the Land or Plant, Equipment and Personal Property or in
connection with Borrower's operations thereon or (ii) any
complaint, order, citation or notice with regard to air
emissions, water discharges, or any other environmental,
health or safety matter affecting Borrower (an "Environmental
Complaint") from any person or entity (including without
limitation the United States Environmental Protection Agency
(the "EPA")) and such event could reasonably be expected to
have a material adverse effect on Borrower then Borrower shall
immediately notify Lender orally and in writing of said
notice.
(c) If an Event of Default shall have occurred and be continuing,
Lender shall have the right but not the obligation, and
without limitation of Lender's rights under this Instrument,
to enter onto any of the Premises or to take such other
actions as it deems necessary or advisable to clean-up,
remove, resolve or minimize the impact of, or otherwise deal
with, any such Hazardous Material release or Environmental
Complaint following receipt of any notice from any person or
entity (including without limitation the EPA) asserting the
existence of any Hazardous Material or an Environmental
Complaint pertaining to such of the Premises or any part
thereof which, if true, could result in an order, suit or
other action against Borrower and/or which, in the reasonable
opinion of Lender, could have a material adverse effect on
Borrower and jeopardize its security under this Instrument.
All reasonable, actual costs and expenses incurred by Lender
in the exercise of any such rights shall be secured by this
Instrument and shall be payable by Borrower upon demand,
except to the extent arising out of Lender's gross negligence
or willful misconduct or, with respect to each Tract, any
action taken by Lender after Lender has assumed the ownership
or operation of such Tract, which action is not reasonably
necessary to correct a pre-existing violation of an
Environmental Law.
(d) The provisions of this Section 3.16 shall survive any
foreclosure or other enforcement hereof.
ARTICLE IV.
DEFAULT AND REMEDIES
4.1. Events of Default. The terms "Default", "Event of Default", or
"Events of Default", wherever used in this Instrument, shall mean any event
defined as such in the Credit Agreement.
<PAGE>
4.2. Acceleration of Maturity. If an Event of Default shall have
occurred and be continuing and shall not have been expressly waived in writing
by Lender, then the Combined Obligations secured hereby shall, by written notice
at the option of Lender, immediately become due and payable without further
notice or demand, time being of the essence of this Instrument and the rate of
interest with respect thereto shall be the "Default Rate" (as defined in the
Credit Agreement); and no omission on the part of Lender to exercise such option
when entitled to do so shall be construed as a waiver of such right.
4.3. Lender's Right to Enter and Take Possession, Operate and Apply
Revenues.
4.3.1. If an Event of Default shall have occurred
and be continuing and shall not have been
expressly waived in writing by Lender, then
Borrower, upon demand of Lender, shall
forthwith surrender to Lender the actual
possession of the Premises and if, and to
the extent, permitted by law, Lender itself,
or by such officers or agents as it may
appoint, may enter and take possession of
all the Premises without the appointment of
a receiver, or an application therefor, and
may exclude Borrower and its agents and
employees wholly therefrom, and may have
joint access with Borrower to the books,
papers and accounts of Borrower. Borrower
waives the posting of any bond in the event
Lender elects to take possession.
4.3.2. If Borrower shall for any reason fail to
surrender or deliver the Premises or any
part thereof after such demand by Lender,
Lender may obtain a judgment or decree
conferring upon Lender the right to
immediate possession or requiring Borrower
to deliver immediate possession of the
Premises to Lender, to the entry of which
judgment or decree Borrower hereby
specifically consents. Borrower will pay to
Lender, upon demand, all reasonable actual
expenses of obtaining such judgment or
decree, including reasonable actual
compensation to Lender, its attorneys and
agents; and all such expenses and
compensation shall, until paid, be secured
by the lien of this Instrument.
4.3.3. Upon every such entering upon or taking of
possession, Lender may hold, store, use,
operate, manage and control the Premises and
conduct the business thereof, and, from time
<PAGE>
to time (i) make all necessary and proper
maintenance, repairs, renewals,
replacements, additions, betterments and
improvements thereto and thereon and
purchase or otherwise acquire additional
fixtures, personalty and other property;
(ii) insure or keep the Premises insured;
(iii) manage and operate the Premises and
exercise all the rights and powers of
Borrower to the same extent as Borrower
could in its own name or otherwise with
respect to the same; and (iv) enter into any
and all agreements with respect to the
exercise by others of any of the powers
herein granted Lender, all as Lender from
time to time may determine to be in its best
interest. Lender may collect and receive all
the rents, issues, profits and revenues from
the Premises, including those past due as
well as those accruing thereafter, and,
after deducting (aa) all reasonable actual
expenses of taking, holding, managing and
operating the Premises (including reasonable
actual compensation for the services of all
persons employed for such purposes); (bb)
the cost of all such maintenance, repairs,
renewals, replacements, additions,
betterments, improvements, purchases and
acquisitions; (cc) the cost of such
insurance; (dd) such taxes, assessments and
other similar charges as Lender may at its
option pay; (ee) other proper charges upon
the Premises or any part thereof; and (ff)
the reasonable actual compensation, expenses
and disbursements of the attorneys and
agents of Lender, Lender shall apply the
remainder of the moneys and proceeds so
received by Lender, first to the payment of
accrued interest; second, to the payment and
satisfaction of the Combined Obligations
currently due (whether by acceleration or
otherwise); and third, to the Borrower.
4.3.4. Whenever all that is currently due (whether
by acceleration or otherwise) upon such
Combined Obligations and under any of the
terms, covenants, conditions and agreements
of this Instrument, shall have been paid and
all Events of Default shall have been cured,
Lender shall surrender possession of the
Premises to Borrower, its successors or
assigns. The same right of taking
possession, however, shall exist if any
subsequent Event of Default shall occur.
<PAGE>
4.4. Performance by Lender of Defaults by Borrower. If Borrower shall
default in the payment, performance or observance of any term, covenant or
condition of this Instrument, upon notice to Borrower and after the expiration
of any applicable grace or cure period, Lender may, at its option, pay, perform
or observe the same, and all payments made or costs or expenses incurred by
Lender in connection therewith, shall be secured hereby and shall be, without
demand, immediately repaid by Borrower to Lender with interest thereon at a rate
per annum equal to the "Default Rate" (as defined in the Credit Agreement)
calculated on the basis of the actual number of days elapsed over a 360 day
year. Lender shall be the sole judge of the necessity for any such actions and
of the amounts to be paid. Subject to the rights of tenants and other parties
under operating agreements, Lender is hereby empowered to enter and to authorize
others to enter upon the Premises or any part thereof for the purpose of
performing or observing any such defaulted term, covenant or condition without
thereby becoming liable to Borrower or any person in possession holding under
Borrower except for gross negligence or willful misconduct.
4.5. Receiver. If an Event of Default shall have occurred and be
continuing and shall not have been expressly waived by Lender, then Lender, upon
application to a court of competent jurisdiction, shall be entitled (except as
to the South Carolina Premises), to the fullest extent permitted by law, as a
matter of strict right without notice and without regard to the occupancy or
value of any security for the Combined Obligations secured hereby or the
adequacy or inadequacy of such security and without the requirement of any bond
or the solvency of any party bound for its payment and satisfaction, (but, with
respect to the Arkansas Premises, subject to Title 16, Chapter 17 of the
Arkansas Statutes Annotated) to the appointment of a receiver to take possession
of and to operate the Premises and to collect and apply the rents, issues,
profits and revenues thereof. Notwithstanding the right of Lender to the
appointment of a receiver hereunder without notice to Borrower, Lender agrees,
with respect to the Premises other than the South Carolina Premises, to use
reasonable efforts to give Borrower notice of such appointment. As to the South
Carolina Premises, Lender may apply to a court of competent jurisdiction
pursuant to S.C. Code Ann. 15-65-10, et seq., as amended from time to time, for
the appointment of a receiver to take possession of and to operate the South
Carolina Premises and to collect and apply the rents, issues, profits and
revenues thereof. As to the South Carolina Tract, Lender agrees to notify
Borrower of its application for the appointment of a receiver at least four (4)
days prior to such appointment, unless the court to which application is made
prescribes a shorter time. The receiver shall have all of the rights and powers
permitted under the laws of the state wherein the Land is situated. Borrower
will pay to Lender upon demand all expenses, including receiver's fees,
reasonable actual attorney's fees, costs and agent's compensation, incurred
pursuant to the provisions of this Section 4.5, and all such reasonable actual
expenses shall be secured by this Instrument.
<PAGE>
4.6. Enforcement. If an Event of Default shall have occurred and shall
be continuing and shall not have been expressly waived by Lender, concerning
enforcement by judicial foreclosure or exercise of private power of sale, Lender
shall have the following options:
4.6.1. With respect to the Alabama Premises, this
subsection shall apply. Lender, its agents
or its attorneys, at its option, may sell
the Alabama Premises or any part of the
Alabama Premises before the entrance of the
courthouse in the counties where the Alabama
Premises is located, at public outcry for
cash or credit, after first giving notice of
the time, place and terms of said sale by
publication once a week for three (3)
successive weeks prior to said sale in the
newspaper customarily used for such notices
published in said county and state in which
the Alabama Premises is located; and upon
receipt of the purchase money, Lender, its
agents or its attorneys, or any person
conducting said sale for it, is authorized
to execute to the purchaser at said sale a
deed to the property so purchased in the
name of Borrower, and such purchaser shall
not be held to inquire as to the application
of the proceeds of such sale. At said
foreclosure sale, the Alabama Premises may
be offered for sale and sold as a whole or
in part as Lender may elect. The presence of
any portion of the property constituting the
Alabama Premises at the place of sale is
expressly waived.
4.6.2. With respect to the Arkansas Premises, this
subsection shall apply. Lender may, with or
without entry, sell the Arkansas Premises,
or any part thereof, at public to the
highest bidder for cash at the front door of
the County Courthouse in the county or
counties in which the Arkansas Premises is
located, Public Notice of the time and place
of said sale having been given for twenty
(20) days by advertising in some newspaper
published in said county or counties by at
least three (3) insertions, or by notices
posted in five (5) public places in said
county or counties, at which sale the Lender
may bid and purchase as any third person
might do. Borrower hereby authorizes lender
to convey the Arkansas Premises to anyone
purchasing at said sale and to convey an
absolute title thereto, and the recitals of
such instrument of conveyance shall be taken
as prima facie true. Lender may exercise
such other or additional remedies as may be
available at law or in equity, including
without limitation judicial foreclosure.
<PAGE>
4.6.3. With respect to the California Premises,
this subsection shall apply. If an Event of
Default shall have occurred and be
continuing, Lender, in addition to any other
remedy of process available to Lender, may
declare all sums secured by this Instrument
immediately due and payable and by
delivering to Trustee a written declaration
of default and causing to be filed for
record a written notice of default and
election to sell and shall deposit with
Trustee copies of this Instrument and the
Combined Documents. After the lapse of such
time as may be required by law following the
filing for record of such Notice of Default,
and after giving all such notices as may be
required by law, Trustee, without demand on
Borrower, may sell the California Premises,
either as a whole or in separate parcels and
in such order as it may determine, by public
auction to the highest bidder for cash in
lawful money of the United States, payable
at the time of sale or for the equivalent of
cash, as so determined by Trustee in its
sole discretion. If the Combined Obligations
are additionally secured by real property in
California which is not subject to this
Instrument, Trustee may sell any property so
given as security therefor, which it is
authorized to sell either in whole or in
separate parcels and in such order as it may
determine. Trustee may postpone sale of all
or any portion of the California Premises by
public announcement at the time and place
fixed for such sale and from time to time
thereafter may postpone such sale by public
announcement at a time fixed by the
preceding postponement. Any person may bid
at such sale. Following such sale, Trustee
shall execute and deliver to the purchaser
its deed, without covenant or warranty,
express or implied. The Trustee's deed shall
recite the facts showing that the sale was
conducted in compliance with all the
requirements of law and this Instrument,
which recital shall be conclusive evidence
thereto in favor of bona fide purchasers and
encumbrances for value. Borrower hereby
constitutes and appoints Trustee the agent
and attorney-in-fact of Borrower to make
such sale and conveyance, and thereby to
divest Borrower of all right, title or
equity that Borrower may have in and to the
California Premises and to vest the same in
the purchaser or purchasers at such sale or
sales, and all the acts and doings of said
agent and attorney-in fact that are recitals
in said conveyance or conveyances as to
facts essential to a valid sale shall be
binding upon Borrower. The aforesaid power
of sale and agency hereby granted are
coupled with an interest and are irrevocable
by death or otherwise, are granted as
cumulative of the other remedies provided
hereby or by law for collection of the
Combined Obligations and shall not be
exhausted by one exercise thereof but may be
exercised until full payment of the Combined
Obligations.
<PAGE>
4.6.4. With respect to the Georgia Premises, this
subsection shall apply. Lender, at its
option, may sell the Georgia Premises or any
part of the Georgia Premises at public sale
or sales before the door of the courthouse
of the county or counties in which the
Georgia Premises or any part of the Georgia
Premises is situated, to the highest bidder
for cash, in order to pay the Combined
Obligations secured hereby and accrued
interest thereon and insurance premiums,
liens, assessments, taxes and charges,
including utility charges, if any, with
accrued interest thereon, and all expenses
of the sale and of all proceedings in
connection therewith, including reasonable
actual attorney's fees, if incurred, after
advertising the time, place and terms of
sale once a week for four (4) weeks
immediately preceding such sale (but without
regard to the number of days) in a newspaper
in which Sheriff's sales are advertised in
said county or counties. At any such public
sale, Lender may execute and deliver to the
purchaser a conveyance of the Georgia
Premises or any part of the Georgia Premises
in fee simple or to the full extent of any
leasehold estate, as the case may be, with
full warranties of title and to this end,
Borrower hereby constitutes and appoints
Lender the agent and attorney-in-fact of
Borrower to make such sale and conveyance,
and thereby to divest Borrower of all right,
title or equity that Borrower may have in
and to the Georgia Premises and to vest the
same in the purchaser or purchasers at such
sale or sales, and all the acts and doings
of said agent and attorney-in-fact are
hereby ratified and confirmed and any
recitals in said conveyances as to facts
essential to a valid sale shall be binding
upon Borrower.
<PAGE>
4.6.5. With respect to the Indiana Premises, this
subsection shall apply. [TO BE PROVIDED BY
INDIANA LOCAL COUNSEL]
4.6.6. With respect to the Kansas Premises, this
subsection shall apply. [TO BE PROVIDED BY
KANSAS LOCAL COUNSEL]
4.6.7. With respect to the Missouri Premises, this
subsection shall apply. Trustee, or, in the
case of his death or disability, or his
neglect or refusal to act, then a successor
appointed by the Lender, may, at the option
and request of the Lender, proceed to sell
the Missouri Premises, or any part thereof,
at public venue or out-cry, at the front
door of the Court House in the City of
Marshall, County of Saline, State of
Missouri, to the highest bidder, for cash,
after first giving the notice required by
the laws of Missouri in respect to
exercising power of sale under mortgages and
deeds of trust then in effect, and upon such
sale shall execute a Trustee's deed or deed
in fee simple of the property sold, to
purchaser or purchasers thereof, and shall
receive the proceeds thereof, out of which
the Trustee shall pay first, the cost and
expense of executing this trust, including
lawful compensation of the Trustee; and
next, shall repay to any person or persons
who may or shall, under the covenants
hereinabove set forth, have advanced or paid
any money for taxes, mechanics' liens,
insurance or other obligations, as above
provided, all sums so by said persons
advanced and not already repaid, together
with interest thereon at the rate of
interest per annum set forth in the Credit
Agreement, from the date of such advance,
until the date of payment; and, next in full
payment of all Combined Obligations secured
hereby, together with the interest accrued
thereon, and next the amount due on junior
encumbrances, and the balance to Borrower.
Any statement or recital of fact in such
deed, in relation to the non-payment of the
Combined Obligations, the existence of the
Combined Obligations, notice of
advertisement, sale and receipt of money
shall be presumptive evidence of the truth
of such statements or recital. Each time it
shall become necessary to insert an
advertisement for foreclosure and the sale
is not had, then the Trustee shall be
entitled to receive the sum of $25.00 for
services and the amount of all advertising
<PAGE>
charges from Borrower. The power of sale
hereunder shall not be exhausted by one or
more such sales (or attempts to sell) as to
all or any portion of the Missouri Premises
remaining unsold, but shall continue
unimpaired until all of the Missouri
Premises shall have been sold or until the
Combined Obligations shall have been paid in
full.
4.6.8. With respect to the New York Premises, this
subsection shall apply. Lender, with or
without entry, personally or by its agents
or attorneys, insofar as applicable, may:
(a) sell the New York Premises to the
extent permitted and pursuant to the
procedures provided by law, and all
estate, right, title and interest,
claim and demand therein and right
of redemption thereof, at one or
more sales as an entity or in
parcels, and at such time and place
and upon such terms and after such
notice thereof as may be required or
permitted by law; or
(b) institute proceedings for the
complete or partial foreclosure of
this Instrument, or
(c) take such steps to protect and
enforce its rights whether by
action, suit or proceeding in equity
or at law for the specific
performance of any covenant,
condition or agreement in this
Instrument or the Combined
Obligations or in any other
agreement relating thereto, or in
aid of the execution of any power
herein granted, or for any
foreclosure hereunder, or for the
enforcement of any other appropriate
legal or equitable remedy or
otherwise as Lender shall elect.
<PAGE>
Lender (or any officer of any court
empowered to do so) may adjourn from time to
time any sale by it to be made under or by
virtue of this Instrument by announcement at
the time and place appointed for such sale
or for such adjourned sale or sales; and
except as otherwise provided by any
applicable provision of law, Lender, without
further notice or publication, may make such
sale at the time and place to which the same
shall be so adjourned. Upon the completion
of any sale or sales made by Lender under or
by virtue of this Instrument, Lender, or an
officer of any court empowered to do so,
shall execute and deliver to the accepted
purchaser or purchasers, a good and
sufficient instrument or good and sufficient
instruments, conveying, assigning and
transferring all estate, right, title and
interest in and to the New York Premises
sold. Lender hereby is irrevocably appointed
the true and lawful attorney of Borrower, in
its name and stead, to make all necessary
conveyances, assignments, transfers and
deliveries of the New York Premises or any
portion thereof and rights so sold, and for
that purpose Lender may execute all
necessary instruments of conveyance,
assignment and transfer, and may substitute
one or more persons with like power,
Borrower hereby ratifying and confirming all
that its said attorney or such substitute or
substitutes shall lawfully do by virtue
hereof. Nevertheless, Borrower, if so
requested by Lender, shall ratify and
confirm any such sale or sales by executing
and delivering to Lender or to such
purchaser or purchasers all such instruments
as may be advisable, in the judgment of
Lender, for the purpose, and as may be
designated in such request. Any such sale or
sales made under or by virtue of this
Instrument, whether made under the power of
sale herein granted, under or by virtue of
judicial proceedings or of a judgment or
decree of foreclosure and sale, shall
operate to divest all estate, right, title,
interest, claim and demand whatsoever,
whether at law or in equity, of Borrower in
and to the properties and rights so sold,
and shall be a perpetual bar both at law and
in equity against Borrower and against any
and all persons claiming or who may claim
the same, or any part thereof, from, through
or under Borrower. In the event of any sale
made under or by virtue of this Instrument
(whether made under the power of sale herein
granted or under or by virtue of judicial
proceedings or of a judgment or decree of
foreclosure and sale), the entire principal
of, and interest on, the Combined
Obligations, if not previously due and
payable, and all other sums required to be
paid by Borrower pursuant to this Instrument
immediately thereupon shall, anything in the
Combined Documents or this Instrument to the
contrary notwithstanding, at the option of
Lender become due and payable. In the case
of any foreclosure sale of the New York
Premises pursuant to this Instrument, the
New York Premises or so much of said New
York Premises as then may be affected by
this Instrument may be sold as one parcel.
<PAGE>
4.6.9. With respect to the North Carolina Premises,
this subsection shall apply. Should Lender
elect to foreclose by exercise of the power
of sale herein contained, Lender shall
notify Trustee and shall deposit with
Trustee copies of this Instrument, the Note
and such receipts and evident of
expenditures made and secured hereby as
Trustee may require.
Upon application of Lender, it shall be
lawful for and the duty of Trustee, and
Trustee hereby is authorized and empowered
to expose to sale and to sell the North
Carolina Premises (either as a whole or in
separate parcels and in such order as the
Trustee shall determine) at public auction
for cash, after having first complied with
all applicable requirements of North
Carolina law with respect to the exercise of
powers of sale contained in deeds of trust
and upon such sale. Trustee shall convey
title to the purchaser in fee simple. After
retaining from the proceeds of such sale
just compensation for Trustee's services and
all expenses incurred by Trustee, including,
without limitation, a Trustee's commission
not exceeding five percent of the bid and
reasonable actual attorney's fees for legal
services actually performed, Trustee shall
apply the residue of the proceeds first to
the payment of all sums expended by Lender
under the terms of this Instrument; second,
to the payment of the Combined Obligations
and interest thereof secured hereby; and the
balance, if any, shall be paid to Borrower.
Borrower agrees that in the event of sale
hereunder, Lender shall have the right to
bid. Trustee may require the successful
bidder at any sale to deposit immediately
with Trustee cash or certified check in an
amount not to exceed ten percent (10%) of
the bid, provided notice of such requirement
<PAGE>
is contained in the advertisement of the
sale. The bid may be rejected if the deposit
is not immediately made and thereupon the
next highest bidder may be declared to be
the purchaser. Such deposit shall be
refunded in case a resale is had; otherwise,
it shall be applied to the purchase price.
If the Plant, Equipment and Personal
Property is sold hereunder, it need not be
at the place of sale; the published notice,
however, shall state the time and place
where such Plant, Equipment and Personal
Property may be inspected prior to sale. If
a foreclosure proceeding is commenced by the
Trustee but not completed, the Trustee's fee
will be 2% of the fair market value of the
North Carolina Premises involved in such
foreclosure if the termination occurs prior
to the first public auction sale and not
more than 3% of the fair market value of the
North Carolina Premises involved in such
foreclosure if the termination occurs after
the first public auction sale.
4.6.10. With respect to the Oklahoma Premises, this
subsection shall apply. Lender may,
individually, or by its authorized agent,
attorney or representative, with or without
further notice, as Lender may elect, in
addition to and not by way of any exclusion,
waiver, election or limitation of any other
of Lender's remedies at law or in equity:
(a) Make any payments or take any other
actions Lender deems necessary or
desirable to cure the Event of
Default or conserve the Oklahoma
Premises as set forth in Section
4.4;
(b) Enter upon and take possession of
the Oklahoma Premises, in whole or
in part, as set forth in Section
4.3; or
(c) Proceed to foreclose this Instrument
through judicial proceedings, and in
the event of judicial foreclosure,
the court shall direct the sale of
the Oklahoma Premises, exclusive of
all personal property, to be with or
without appraisement, as Lender may
elect at the time judgment is
finally rendered; or, alternatively,
pursuant to the power of sale herein
granted Lender, Lender may sell the
Oklahoma Premises (with or without
<PAGE>
the personal property) upon such
terms, conditions, and in as many
parcels, as the person conducting
the sale may, in his sole
discretion, elect; the proceeds of
any judicial or non-judicial sale of
the Oklahoma Premises shall be
applied: first, to the payment of
actual expenses of the sale and/or
action, court costs, inclusive of
Lender's reasonable actual attorneys
fees, for upkeep, security,
insurance, utilities and maintenance
of the Oklahoma Premises pending
sale or the action, and abstracting
expense; second, to the payment of
the Combined Obligations, and third,
the balance thereafter remaining, if
any, to abide the further order of
the court or to Borrower or order.
4.6.11. With respect to the Pennsylvania Premises,
this subsection shall apply. [TO
BE PROVIDED BY PENNSYLVANIA LOCAL COUNSEL]
4.6.12. With respect to the South Carolina Premises,
this subsection shall apply. Lender, at its
option, may (a) commence proceedings to
collect sums due hereunder, foreclose this
Instrument and sell the real property
portion of the South Carolina Premises: At
the foreclosure, Lender shall be entitled to
bid and to purchase the real property
portion of the South Carolina Premises and
shall be entitled to apply the Combined
Obligations, or any portion thereof, in
payment for the real property portion of the
South Carolina Premises; (b) collect and
receive all the rents, issues, profits and
revenues from the South Carolina Premises,
including those past due as well as those
<PAGE>
accruing thereafter; (c) with respect to the
personalty that is located on the South
Carolina Premises, exercise all rights,
remedies and powers available to secured
parties under the Uniform Commercial Code in
force in the State of South Carolina; and
(d) exercise any other rights or remedies
provided in this Instrument or by law, all
of which rights and remedies may be
exercised by Lender independently,
simultaneously or consecutively in any order
without being deemed to have waived any
right or remedy previously or not yet
exercised.
Borrower agrees that legal process in
connection with the foreclosure of the debt
secured hereby may be made by written notice
to Lender pursuant to Section 5.5. Such
process shall be deemed to be personally
served on Borrower as of the date of actual
receipt thereof or the date of the first
attempted delivery thereof by the U.S. Mail.
Such method of service of process shall be
in addition to all other methods permitted
by law.
4.6.13. With respect to the Tennessee Premises, this
subsection shall apply. Trustee, or, in the
case of his death or disability, or neglect
or refusal to act, then a successor
appointed by the Lender, may, at the option
and request of Lender, enter and take
possession of the Tennessee Premises and,
before or after such entry, may advertise
the sale of the Tennessee Premises for
twenty-one (21) days by three (3) weekly
notices in any newspaper published in Shelby
County, Tennessee regularly containing
Sheriff's notices or other legal notices,
and sell the Tennessee Premises for cash to
the highest bidder, free from equity of
redemption, any right of statutory
redemption as provided under any applicable
Tennessee statute including under T.C.A.ss.
66-8-101, homestead, dower, elective share
and all other exemptions, all of which are
hereby expressly waived by Borrower, and
Trustee shall execute a conveyance to the
purchaser in fee simple, and deliver
possession to the purchaser which the
Borrower covenants shall be given without
obstruction, hindrance or delay. Lender may
become the purchaser at any sale under this
conveyance. The proceeds of any sale shall
be applied as follows: first, to the payment
of the expenses of making, maintaining, and
executing this trust, the protection of the
<PAGE>
Tennessee Premises, including the expense of
any litigation or attorneys' fees and the
usual commissions to the Trustee; second, to
the payment of the Combined Obligations,
without preference or priority of any part
over any other part, and third, should there
by any surplus, the Trustee will pay it to
the Borrower or order. In the event of the
death, refusal, or of inability for any
cause on the part of the Trustee named
herein or of the successor trustees, to act
at any time under the foregoing powers and
trusts, or for any other reason satisfactory
to Lender, Lender is authorized either in
its own name or through an attorney or
attorneys in fact appointed for that purpose
by written instrument duly registered, to
name and appoint a successor or successors
to execute this trust, such appointment to
be evidenced by writing, duly acknowledged;
and when such writing shall have been
registered, the substituted trustee shall
thereupon be vested with all the right and
title, clothed with all the power of the
Trustee named herein and such like power of
substitution shall continue so long as any
part of the debt secured hereby remains
unpaid. The sale may be adjourned by the
Trustee at the Court House on the date the
sale is originally set and may be reset at a
later date by republication. Upon a sale
under this Instrument or pursuant to an
order in a judicial proceeding, the
Tennessee Premises or any part may be sold
in one parcel, and one or more exercises of
the powers herein granted shall not
extinguish the power unless the entire
premises are sold or the Combined
Obligations are paid in full.
4.6.14. With respect to the Virginia Premises, this
subsection shall apply. Trustee may take
possession of the Virginia Premises, and
proceed to sell the same at auction at the
Virginia Premises or at such other place in
the city or county in which the Virginia
Premises or the greater part thereof lies,
or in the corporate limits of any city
surrounded by or contiguous to such county,
or in the case of annexed land in the county
of which the Virginia Premises was formerly
a part, as Trustee may select upon such
terms and conditions as Trustee may deem
best, after first advertising the time,
<PAGE>
place and terms of sale in at least three
(3) consecutive issues, in advance of the
date of such sale, of a newspaper having
general circulation in the county or city in
which the Virginia Premises or some portion
thereof is located. The power of sale herein
granted may be exercised at different times
as to different portions of the Virginia
Premises, and if for any reason any
executory contract of sale shall not be
performed, then new contracts may be made
with respect to the same portion of the
Virginia Premises (with or without other
portions). If Trustee deems it best for any
reason to postpone or continue the sale at
any time or from time to time, they may do
so, in which event Trustee shall advertise
the postponed sale in the same manner as the
original advertisement of sale provided for
hereinabove. Full power and authority is
hereby expressly granted and conferred upon
Trustee to make, execute and deliver all
necessary deeds of conveyance for the
purpose of vesting in the purchaser or
purchasers complete and entire legal and
equitable title to the Virginia Premises, or
the portion thereof sold, and the recitals
therein shall be received in all courts of
law and equity as prima facie evidence of
the matters therein stated; and at such sale
Lender may become a purchaser, and no
purchaser shall be required to see to the
proper application of the purchase money.
4.6.15. Lender may, in addition to and not in
abrogation of the rights covered under this
Section 4.6, either with or without entry or
taking possession as herein provided or
otherwise, proceed by a suit or suits in law
or in equity or by any other appropriate
proceeding or remedy granted or conferred by
applicable statutes (i) to enforce payment
of the Combined Obligations or the
performance of any term, covenant, condition
or agreement of this Instrument or any other
right, and (ii) to pursue any other remedy
available to it, all as Lender shall
determine most effectual for such purposes.
4.7. Purchase by Lender. Upon any foreclosure sale, either judicially
or by private power of sale, Lender may bid for and purchase the Premises and
shall be entitled to apply all or any part of the Combined Obligations as a
credit to the purchase price.
4.8. Application of Proceeds of Sale. Except as in hereinabove
expressly set forth, in the event of a foreclosure sale of the Premises, either
judicially or by private power of sale, the proceeds of said sale shall be
applied, unless applicable statutes shall specify otherwise, first, to the
expenses of such sale and of all proceedings in connection therewith and the
reasonable actual expenses of foreclosing this Instrument, including reasonable
actual attorney's and trustee's fees or commissions (based on the collateral
<PAGE>
foreclosed upon by such Trustee), then to payment of the Combined Obligations in
such order as Lender shall elect, and finally the remainder, if any, shall be
paid as required by law, or in the absence of any provision therefor in the law,
shall be paid to the parties entitled thereto; provided, however that as to such
remainder, Lender shall not be bound by any inheritance, devise, conveyance,
assignment or lien of or upon Borrower's equity, without actual notice thereof
prior to distribution.
4.9. Borrower as Tenant Holding Over. In the event of any such
foreclosure sale by Lender, Borrower shall be deemed a tenant holding over and
shall forthwith deliver possession to the purchaser or purchasers at such sale
or be summarily dispossessed according to provisions of law applicable to
tenants holding over. With respect to the New York Tract, Borrower or any other
party to the foreclosure action or anyone claiming through Borrower who shall
remain on any portion thereof following a foreclosure sale shall not be deemed a
tenant holding over but shall be subject to removal by writ of assistance or as
otherwise permitted by law.
4.10. Waiver of Appraisement, Valuation Stay, Extension and Redemption
Laws. Borrower agrees to the full extent permitted by law, that in case of an
Event of Default on the part of Borrower hereunder, neither Borrower nor anyone
claiming through or under it shall or will set up, claim or seek to take
advantage of any appraisement, valuation, stay, extension, homestead, exemption,
redemption (except, as to redemption only, in New York and Oklahoma) or
moratorium laws, statutory or otherwise now or hereafter in force, in order to
prevent or hinder the enforcement or foreclosure of this Instrument, or the
absolute sale of the Premises, or the final and absolute putting into possession
thereof, immediately after such sale, of the purchasers thereat, and Borrower,
for itself and all who may at any time claim through or under it, hereby waives
to the full extent that it may lawfully so do, the benefit of all such laws, and
any and all right to have the assets comprised in the security intended to be
created hereby marshaled upon any foreclosure of the lien hereof, provided,
however, that nothing herein shall constitute a waiver of Official Code of
Georgia Annotated Section 4-14-161 or 45 O.S. 1981 ss. 18 or any other provision
requiring a valuation of property sold at a foreclosure sale as a condition to
the granting of a deficiency judgment. In addition, and without limiting the
foregoing, Borrower hereby, to the full extent permitted by law, releases all
right of appraisement hereunder and also releases unto Lender all rights of
redemption under the laws of Arkansas, including particularly all rights or
redemption under the Act of May 8, 1899.
4.11. Leases. Lender, at its option, is authorized to foreclose this
Instrument subject to the rights of any tenants of the Premises, and the failure
to make any such tenants parties to any such foreclosure proceedings and to
foreclose their rights will not be, nor be asserted to be by Borrower, a defense
to any proceedings instituted by Lender to collect the Combined Obligations
secured hereby.
<PAGE>
4.12. Discontinuance of Proceedings and Restoration of the Parties. In
case Lender shall have proceeded to enforce any right, power or remedy under
this Instrument by foreclosure, entry or otherwise, and such proceedings shall
have been discontinued or abandoned for any reason, then and in every such case
Borrower and Lender shall be restored to their former positions and rights
hereunder, and all rights, powers and remedies of Lender shall continue as if no
such proceeding had been taken.
4.13. Remedies Cumulative. No right, power or remedy conferred upon or
reserved to Lender by this Instrument is intended to be exclusive of any other
right, power or remedy or exclusive of any other right, power or remedy
conferred by statute, but each and every such right, power and remedy shall be
cumulative and concurrent and shall be in addition to any other right, power and
remedy given hereunder or now or hereafter existing at law or in equity or by
statute.
4.14. Waiver.
4.14.1. No delay or omission of Lender to exercise
any right, power or remedy accruing upon any
default or Event of Default shall exhaust or
impair any such right, power or remedy or
shall be construed to be a waiver of any
such default, or acquiescence therein; and
every right, power and remedy given by this
Instrument to Lender may be exercised from
time to time and as often as may be deemed
expedient by Lender. No consent or waiver,
expressed or implied, by Lender to or of any
breach or default by Borrower in the
performance of the obligations hereunder or
any Event of Default shall be deemed or
construed to be a consent or waiver to or of
any other breach or default in the
performance of the same or any other
obligations of Borrower hereunder or any
Event of Default. Failure on the part of
Lender to complain of any act or failure to
act or to declare an Event of Default,
irrespective of how long such failure
continues, shall not constitute a waiver by
Lender of its rights hereunder or impair any
rights, powers or remedies consequent on any
breach or default by Borrower. Lender may,
at any time, or from time to time, renew or
extend this Instrument, or alter or modify
the same in any way, or waive any of the
terms, covenants or conditions hereof in
<PAGE>
whole or in part, and may release any
portion of the Premises or any other
security, and grant such extensions and
indulgences in relation to the Combined
Obligations as Lender may determine without
the consent of any junior lienor or
encumbrancer and without any obligation to
give notice of any kind thereto and without
in any manner affecting the priority of the
lien hereof on any part of the Premises.
4.14.2. If Lender (i) grants forbearance or an
extension of time for the payment or
satisfaction of the Combined Obligations;
(ii) takes other or additional security for
the payment of the Combined Obligations;
(iii) waives or does not exercise any right
granted herein or in any of the Combined
Obligations; (iv) releases any part of the
Premises from the lien of this Instrument or
otherwise changes any of the terms,
covenants, conditions or agreements of any
of the Combined Obligations; (v) consents to
the filing of any map, plat or replat
affecting the Premises; (vi) consents to the
granting of any easement or other right
affecting the Premises; or (vii) makes or
consents to any agreement subordinating the
lien hereof, any such act or omission shall
not release, discharge, modify, change or
affect the original liability under any of
the Combined Obligations or any other
obligation of Borrower or any subsequent
purchaser of the Premises or any part
thereof, or any maker, co-signer, endorser,
surety or guarantor; nor shall any such act
or omission preclude Lender from exercising
any right, power or privilege herein granted
or intended to be granted in the event of
any default then made or of any subsequent
default; nor, except as otherwise expressly
provided in an instrument or instruments
executed by Lender, shall the lien of this
Instrument be altered thereby. In the event
of the sale or transfer by operation of law
or otherwise of all or any part of the
Premises, Lender, without notice, is hereby
authorized and empowered to deal with any
such vendee or transferee with reference to
the Premises or the Combined Obligations, or
with reference to any of the terms,
covenants, conditions or agreements hereof,
as fully and to the same extent as it might
deal with the original parties hereto and
without in any way releasing or discharging
any liabilities, obligations or
undertakings.
<PAGE>
4.15. Suits to Protect the Premises. Lender shall have power to
institute and maintain such suits and proceedings as it may reasonably deem
expedient to preserve or protect the perfection and/or priority of its lien
against the Premises and in the rents, issues, profits and revenues arising
therefrom.
4.16. Lender May File Proofs of Claim. In the case of any
receivership, insolvency, bankruptcy, reorganization, arrangement, adjustment,
composition or other proceedings affecting Borrower, its creditors or its
property, Lender, to the extent permitted by law, shall be entitled to file such
proofs of claim and other documents as may be necessary or advisable in order to
have the claims of Lender allowed in such proceedings for the entire amount due
and payable by Borrower under this Instrument at the date of the institution of
such proceedings and for any additional amount which may become due and payable
by Borrower hereunder after such date.
4.17. Multiple Sales. In any judicial proceedings to foreclose this
Instrument or nonjudicial exercise of power of sale or any other private or
public sale, the Premises, at the option of Lender, may be sold in whole or in
part and in the event of such multiple sales, the Combined Obligations shall not
be merged into any foreclosure sale or foreclosure judgment so long as there
shall remain outstanding any amount secured by this Instrument. Such a
foreclosure judgment in any state in which the Land is located shall not
operate, in and of itself, as a release of the other property hereby secured or
a waiver of Lender's right to elect any other remedy available to it hereunder.
ARTICLE V.
MISCELLANEOUS PROVISIONS
5.1. Successors and Assigns. This Instrument shall inure to the
benefit of and be binding upon Borrower, Lender and Trustee or their respective
heirs, executors, legal representatives, successors and assigns. Whenever a
reference is made in this Instrument to Borrower, Lender or Trustee such
reference shall be deemed to include a reference to the heirs, executors, legal
representatives successors and assigns of Borrower, Lender or Trustee.
5.2. Terminology. All personal pronouns used in this Instrument
whether used in the masculine, feminine or neuter gender, shall include all
other genders; the singular shall include the plural, and vice versa. Titles and
Articles are for convenience only and neither limit nor amplify the provisions
of this Instrument itself, and all references herein to Articles, Sections or
Subsections shall refer to the corresponding Articles, Sections or Subsections
of this Instrument unless specific reference is made to such Articles, Sections
or Subsections of another document or instrument.
<PAGE>
5.3. Severability. If any provision of this Instrument or the
application thereof to any person or circumstance shall be invalid or
unenforceable to any extent, the remainder of this Instrument and the
application of such provisions to other persons or circumstances shall not be
affected thereby and shall be enforced to the greatest extent permitted by law.
5.4. Applicable Law. (A) THIS INSTRUMENT WAS NEGOTIATED IN THE STATE
OF NEW YORK, AND MADE BY LENDER AND ACCEPTED BY BORROWER IN THE STATE OF NEW
YORK, AND THE OBLIGATIONS WERE CREATED AND SECURED IN THE STATE OF NEW YORK,
WHICH STATE THE PARTIES AGREE HAS A SUBSTANTIAL RELATIONSHIP TO THE PARTIES AND
TO THE UNDERLYING TRANSACTION EMBODIED HEREBY, AND IN ALL RESPECTS, INCLUDING,
WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, MATTERS OF CONSTRUCTION,
VALIDITY AND PERFORMANCE, THIS INSTRUMENT AND THE OBLIGATIONS ARISING HEREUNDER
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK APPLICABLE TO THE CONTRACTS MADE AND PERFORMED IN SUCH STATE (WITHOUT
REGARD TO PRINCIPLES OF CONFLICT OF LAWS) AND ANY APPLICABLE LAW OF THE UNITED
STATES OF AMERICA, EXCEPT THAT AT ALL TIMES THE PROVISIONS FOR THE CREATION,
PERFECTION, AND ENFORCEMENT OF THE LIENS AND SECURITY INTERESTS CREATED PURSUANT
HERETO AND PURSUANT TO THE OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY AND
CONSTRUED ACCORDING TO THE LAW OF THE STATE IN WHICH THE PREMISES (OR THE
APPLICABLE PORTION THEREOF) ARE LOCATED, IT BEING UNDERSTOOD THAT, TO THE
FULLEST EXTENT PERMITTED BY THE LAW OF SUCH STATE, THE LAW OF THE STATE OF NEW
YORK SHALL GOVERN THE CONSTRUCTION, VALIDITY AND ENFORCEABILITY OF ALL LOAN
DOCUMENTS AND ALL OF THE OBLIGATIONS ARISING HEREUNDER OR THEREUNDER. TO THE
FULLEST EXTENT PERMITTED BY LAW, BORROWER HEREBY UNCONDITIONALLY AND IRREVOCABLY
WAIVES ANY CLAIM TO ASSERT THAT THE LAW OF ANY OTHER JURISDICTION GOVERNS THIS
INSTRUMENT AND THE NOTE, AND THIS INSTRUMENT AND THE NOTE SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
(B) ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST LENDER OR BORROWER
ARISING OUT OF OR RELATING TO THIS INSTRUMENT MAY AT LENDER'S OPTION BE
INSTITUTED IN ANY FEDERAL OR STATE COURT IN THE CITY OF NEW YORK, COUNTY OF NEW
YORK, AND BORROWER WAIVES ANY OBJECTIONS WHICH IT MAY NOW OR HEREAFTER HAVE
BASED ON VENUE AND/OR FORUM NON CONVENIENS OF ANY SUCH SUIT, ACTION OR
PROCEEDING, AND BORROWER HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY
SUCH COURT IN ANY SUIT, ACTION OR PROCEEDING, BORROWER DOES HEREBY DESIGNATE AND
APPOINT VORNADO REALTY TRUST, 80 PARK WEST, PLAZA II, SADDLE BROOK, NEW JERSEY
07663 AS ITS AUTHORIZED AGENT TO ACCEPT AND ACKNOWLEDGE ON ITS BEHALF SERVICE OF
ANY AND ALL PROCESS WHICH MAY BE SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING
IN ANY FEDERAL OR STATE COURT IN NEW YORK, NEW YORK, AND AGREES THAT SERVICE OF
PROCESS UPON SAID AGENT AT SAID ADDRESS AND WRITTEN NOTICE OF SAID SERVICE
MAILED OR DELIVERED TO BORROWER IN THE MANNER PROVIDED HEREIN SHALL BE DEEMED IN
EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON BORROWER, IN ANY SUCH SUIT,
ACTION OR PROCEEDING IN THE STATE OF NEW YORK. BORROWER (I) SHALL GIVE PROMPT
NOTICE TO LENDER OF ANY CHANGED ADDRESS OF ITS AUTHORIZED AGENT HEREUNDER, (II)
MAY AT ANY TIME AND FROM TIME TO TIME DESIGNATE A SUBSTITUTE AUTHORIZED AGENT
WITH AN OFFICE IN NEW YORK, NEW YORK (WHICH SUBSTITUTE AGENT AND OFFICE SHALL BE
DESIGNATED AS THE PERSON AND ADDRESS FOR SERVICE OF PROCESS), AND (III) SHALL
PROMPTLY DESIGNATE SUCH A SUBSTITUTE IF ITS AUTHORIZED AGENT CEASES TO HAVE AN
OFFICE IN NEW YORK, NEW YORK OR IS DISSOLVED WITHOUT LEAVING A SUCCESSOR.
<PAGE>
5.5. Notices. All notices, requests and demands to or upon the
respective parties hereto, and all responses thereto, shall be deemed to have
been properly given or served when personally delivered or received after being
deposited in the mail, certified mail, return receipt requested, postage
prepaid, or delivered to a nationally recognized overnight courier service, with
all delivery charges paid or provided for, addressed to the addresses set forth
below. All notices, requests and demands, and all responses thereto, shall be
effective upon receipt thereof. So long as Borrower or Lender has designated
more than one address pursuant hereto, any notice, request or demand to such
party, and any response thereto, shall be effective from the time of first
delivery to the address of such party designated by it as its primary address.
Rejection or other refusal to accept or the inability to deliver because of
changed address of which no notice was given shall be deemed to be receipt of
the notice, demand or request sent. By giving at least 30 days written notice
hereof, Borrower or Lender shall have the right from time to time and at any
time during the term of this Agreement to change their respective addresses and
each shall have the right to specify as its address any other address within the
continental United States of America. For the purpose of this Agreement, the
following addresses apply:
Borrower:
Americold Corporation
---------------------
Portland, Oregon
Attn: Chief Executive Officer
(primary address)
and
Vornado Realty Trust
80 Park West, Plaza II
Saddle Brook, New Jersey 07663
Attn: President
<PAGE>
and
Vornado Realty Trust
80 Park West, Plaza II
Saddle Brook, New Jersey 07663
Attn: Chief Financial Officer
with a copy to:
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
Attention: Janet Geldzahler, Esq.
Lender:
Goldman Sachs Mortgage Company
85 Broad Street
New York, New York 10004
Attention: _______________
(primary address)
with a copy to:
Willkie Farr & Gallagher
153 East 53rd Street
New York, New York 10022
Attention: Eugene A. Pinover, Esq.
Trustee:
with respect to the California Premises:
==========================
--------------------------
with respect to the Missouri Premises:
==========================
--------------------------
with respect to the North Carolina Premises:
==========================
--------------------------
with respect to the Tennessee Premises:
==========================
--------------------------
with respect to the Virginia Premises:
==========================
--------------------------
<PAGE>
5.6. Replacement of Documents. Upon receipt of evidence reasonably
satisfactory to Borrower or Lender of the loss, theft, destruction or mutilation
of any of the Combined Documents and, in the case of any such loss, theft or
destruction, upon delivery of an indemnity agreement reasonably satisfactory to
Borrower or Lender or, in the case of any such mutilation, upon surrender and
cancellation of the appropriate document, the other party or parties will
execute and deliver, in lieu thereof, a replacement document or instrument
supplied by Borrower or Lender, identical in form and substance and dated as of
the date of the document being replaced and upon such execution and delivery of
such replacement document all references in this Instrument to the document
being replaced shall be deemed to refer to such replacement document.
5.7. Assignment. This Instrument is assignable by Lender under the
conditions set forth in Section 10.27 of the Credit Agreement, and any
assignment hereof by Lender shall operate to vest in the assignee all rights and
powers herein conferred upon and granted to Lender.
5.8. Time of the Essence. Time is of the essence with respect to each
and every covenant, agreement and obligation of Borrower under this Instrument,
each of the other Combined Documents and any and all other instruments now or
hereafter evidencing, securing or otherwise relating to the Combined
Obligations.
5.9. Counterparts. This Instrument may be executed in any number of
counterparts, each of which is deemed to be an original document, all of which
taken together shall constitute one and the same Instrument.
5.10. No Obligation to Marshal Assets. Notice is hereby given that no
holder of any mortgage, deed of trust, deed to secure debt, lien, security
interest or other encumbrance affecting all or any portion of the Premises,
which is inferior to the lien, security interest and security title of the
Instrument shall have the right or privilege to require Lender to marshal
assets.
5.11. Consent of Lender. Lender, by its acceptance of this Instrument
agrees to be bound by the terms and conditions of this Instrument.
5.12. Appointment of Successor Trustee.
5.12.1. California Premises.
<PAGE>
5.12.2. Missouri Premises. The Trustee with respect
to the Missouri Premises may resign at any
time by written instrument to that effect,
delivered to Lender. By instrument properly
recorded, acknowledged and filed in the
Office of the Recorder of the Deeds for
Saline County, Missouri, Lender may (for any
reason satisfactory to Lender and whether or
not the Trustee with respect to the Missouri
Premises has resigned by an instrument
placed of record or otherwise) appoint a
successor trustee, who, from and after the
filing of such appointment shall become
vested with title to the Missouri Premises
in trust and shall have all of the powers,
authorities and duties vested in the Trustee
by this Instrument. In the event any
foreclosure advertisement is running or has
run at the time of such appointment of a
successor Trustee with respect to the
Missouri Premises, the successor Trustee may
consummate the advertised sale without the
necessity of republishing such
advertisement. The making of oath or the
giving of bond by any successor Trustee with
respect to the Missouri Premises expressly
is waived.
5.12.3. North Carolina Premises. Lender shall at any
time have the irrevocable right to remove
Trustee with respect to the North Carolina
Premises herein named without notice or
cause and to appoint a successor thereto by
an instrument in writing, duly acknowledged,
in such form as to entitle such written
instrument to be recorded in North Carolina,
and in the event of the death or resignation
of Trustee with respect to the North
Carolina Premises named herein, Lender shall
have the right to appoint a successor
thereto by such written instrument, and any
Trustee with respect to the North Carolina
Premises so appointed shall be vested with
the title to the North Carolina Premises and
shall possess all the powers, duties and
obligations herein conferred on Trustee with
respect to the North Carolina Premises in
the same manner and to the same extent as
though such were named herein as Trustee
with respect to the North Carolina Premises.
5.12.4. Tennessee Premises. Lender shall at any time
have the irrevocable right to remove Trustee
with respect to the Tennessee Premises
<PAGE>
herein named without notice or cause and to
appoint a successor thereto by an instrument
in writing, duly acknowledged, in such form
as to entitle such written instrument to be
recorded in Tennessee, and in the event of
the death or resignation of Trustee with
respect to the Tennessee Premises named
herein, Lender shall have the right to
appoint a successor thereto by such written
instrument, and any Trustee with respect to
the Tennessee Premises so appointed shall be
vested with the title to the Tennessee
Premises and shall possess all the powers,
duties and obligations herein conferred on
Trustee with respect to the Tennessee
Premises in the same manner and to the same
extent as though such were named herein as
Trustee with respect to the Tennessee
Premises.
5.12.5. Virginia Premises. Lender shall at any time
have the irrevocable right to remove Trustee
with respect to the Virginia Premises for
any reason whatsoever and without notice and
to appoint a successor thereto by an
instrument in writing, duly acknowledged, in
such form as to entitle such written
instrument to be recorded in Virginia, and
in the event of the death or resignation of
Trustee with respect to the Virginia
Premises named herein, Lender shall have the
right to appoint a successor thereto by such
written instrument, and any Trustee with
respect to the Virginia Premises so
appointed shall be vested with the title to
the Virginia Premises and shall possess all
the powers, duties and obligations herein
conferred on Trustee with respect to the
Virginia Premises in the same manner and to
the same extent as though such were named
herein as Trustee with respect to the
Virginia Premises.
5.13. Trustee's Powers. At any time, or from time to time, without
liability therefor and without notice, upon written request of Lender and
presentation of copies of this Instrument and the Note secured hereby for
endorsement, and without affecting the personal liability of any person for
payment of the Combined Obligations or the effect of this Instrument upon the
remainder of said Premises, Trustee shall (i) reconvey any part of said
Premises, (ii) consent in writing to the making of any map or plat thereof,
(iii) assist in granting any easement therein, or (iv) join in any extension
agreement or any agreement subordinating the lien or charge hereof.
<PAGE>
5.14. Lender's Powers. Without affecting the liability of any other
person liable for the payment of any obligation herein mentioned, and without
affecting the lien or charge of this Instrument upon any portion of the Premises
not then or theretofore released as security for the full amount of all unpaid
obligations, Lender may, from time to time and without notice (i) release any
person so liable, (ii) extend the maturity or alter any of the terms of any such
obligation, (iii) grant other indulgences, (iv) cause to be released or
reconveyed at any time at Lender's option, any parcel, portion or all of the
Premises, (v) take or release any other or additional security for any
obligation herein mentioned, or (vi) make compositions or other arrangements
with debtors in relation thereto. The provisions of N.C. Gen. Stat. Section
45-45.1 or any similar statute hereafter enacted in North Carolina in
replacement or in substitution thereof shall be inapplicable to this Instrument.
5.15. Acceptance by Trustee. Trustee accepts this Trust when this
Instrument, duly executed and acknowledged, is made of public record as provided
by law.
5.16. Residential Dwelling Units. This Instrument is not a mortgage of
real property in New York principally improved or to be improved by one or more
structures containing in the aggregate not more than six (6) residential
dwelling units, each dwelling unit having its own separate cooking facility.
5.17. No Liability or Obligation on Trustee or Lender. Nothing in this
Instrument shall be construed to impose any obligation upon either Trustee or
Lender to expend any money or to take any other discretionary act herein
permitted, and neither Lender nor Trustee shall have any liability or obligation
for any delay or failure to take any discretionary act in the absence of gross
negligence or willful misconduct by them. Trustee shall not be required to see
that this Instrument is recorded and shall not be liable for the default or
misconduct of any agent or attorney appointed by them in pursuance hereof, or
for anything whatsoever in connection with this trust, except gross negligence
or willful misconduct. Trustee may act upon any instrument or paper believed by
Trustee in good faith to be genuine and to be signed by the proper party or
parties, and shall be fully protected for any action taken or suffered by
Trustee in reliance thereon.
Section 5.18. No Recourse to Members, Stockholders or Partners of
Joint Venture. Notwithstanding anything to the contrary in this Instrument,
Lender agrees that no general or limited partner, member or stockholder of Joint
Venture (as such term is defined in the Credit Agreement), nor any of their
partners, officers, employees or agents shall in such capacity have any
liability (contractually or otherwise) in respect of the Loan (as such term is
defined in the Credit Agreement)or any other obligations arising under the
Combined Documents. Nothing in this Section 5.18 shall relieve the Borrower or
any guarantor of any such liability.
<PAGE>
IN WITNESS WHEREOF, Borrower has executed this instrument as of the
day and year first above written.
"BORROWER"
AMERICOLD CORPORATION, an Oregon
By:_______________________
Attest:___________________
[CORPORATE SEAL]
EXHIBIT G
TO AMERICOLD CORPORATION AGREEMENT
SUBORDINATION PROVISIONS
Each promissory note evidencing subordinated Indebtedness (as
defined in the Credit Agreement to which this Exhibit G is attached) and each
mortgage or other document created a lien securing such subordinated
Indebtedness incurred by Americold Corporation, an Oregon corporation (the
"Company"), shall have the following subordination provisions included therein,
and shall include in the text of such promissory note the language: "THE
INDEBTEDNESS EVIDENCED BY THIS NOTE AND THE LIEN OF THE INSTRUMENTS SECURING
THIS NOTE ARE SUBORDINATE AND JUNIOR IN RIGHT OF PAYMENT TO ALL SENIOR
INDEBTEDNESS (AS DEFINED IN ANNEX A HERETO) TO THE EXTENT PROVIDED IN ANNEX A."
and in the mortgage or other document the language: "THE LIEN CREATED BY THIS
AGREEMENT AND THE INDEBTEDNESS SECURED HEREBY ARE SUBORDINATE AND JUNIOR IN
RIGHT OF PAYMENT TO ALL SENIOR INDEBTEDNESS (AS DEFINED IN ANNEX A HERETO) TO
THE EXTENT PROVIDED IN ANNEX A."
ANNEX A TO PROMISSORY NOTE
AND MORTGAGE OR OTHER DOCUMENT
Section 1.1. Subordination of Liabilities. Americold
Corporation, an Oregon corporation (the "Company"), for itself, its successors
and assigns, covenants and agrees and each holder of the promissory note (each
such holder sometimes called a "Junior Creditor") which is secured by the
mortgage or other document creating a lien to which this Annex A is attached
(the "Note") by its acceptance thereof likewise covenants and agrees that the
payment of the principal of, and interest on, and all other amounts owing in
respect of, the Note is hereby expressly subordinated, to the extent and in the
manner hereinafter set forth, to the prior indefeasible payment in full of
Senior Indebtedness (as defined in Section 1.7) in cash. The liens created by
any Junior Lien Document (as defined below) shall be junior and subordinate in
all respects to the liens purported to be created by any pledge, mortgage,
security agreement or other document relating to the Senior Indebtedness
(collectively, the "Senior Lien Documents"), regardless of any defect in such
documents, whether or not such Senior Lien Documents are enforceable, whether or
not the security interests thereunder are perfected, regardless of the priority
of such Senior Lien Documents with respect to the Junior Lien Documents under
applicable law and regardless of any other circumstance that might otherwise
give priority to the Junior Lien Documents. The provisions of this Annex A shall
constitute a continuing offer to all persons who, in reliance upon such
provisions, become holders of, or continue to hold, Senior Indebtedness, and
such provisions are made for the benefit of the holders of Senior Indebtedness,
and such holders are hereby made obligees hereunder to the same extent as if
their names were written herein as such, and they and/or each of them may
proceed to enforce such provisions.
<PAGE>
The Holder of the Note agrees that notwithstanding any other
provision of the Note to the contrary, no cash interest (except as permitted by
Section 6.11 of the Credit Agreement referred to below) or any principal shall
at any time become due under any circumstances on or prior to November 15, 1999
(the provisions of this sentence being herein called the "Repayment Alteration
Provisions").
Section 1.2. Company Not to Make Payments with Respect to
Notes in Certain Circumstances. (a) Upon the maturity of any Senior Indebtedness
(including interest thereon or fees or any other amounts owing in respect
thereof), whether at stated maturity, by acceleration or otherwise, all
principal thereof and premium, if any, and interest thereof or fees or any other
amounts owing in respect thereof, in each case to the extent due and owing at
such time, shall first be paid in full in cash, or such payment duly provided
for in cash or in a manner satisfactory to the holder or holders of such Senior
Indebtedness, before any payment is made on account of the principal of
(including installments thereof), or interest on, or any amount otherwise owing
in respect of, the Note (the "Junior Indebtedness"). Each holder of the Note
hereby agrees that, so long as any Senior Indebtedness remains unpaid, it will
not ask, demand, sue for, or otherwise take, accept or receive, any amounts
owing in respect of the Note or take any action to enforce any provision of any
document ("Junior Lien Documents") creating a pledge, mortgage, lien or security
interest to secure repayment of any portion of the Junior Indebtedness. Except
to the extent required by law, the holder of the Note shall not be entitled to
notice of such sale and such holder agrees that five (5) business days' notice
of any such sale or other disposition is reasonable notice to the extent such
notice is required by applicable law. The holder of the Note hereby consents to
any motion or application the holder of Senior Indebtedness may make to obtain
relief from any automatic stay imposed under applicable bankruptcy law in order
for the holder of Senior Indebtedness to enforce the terms of the Senior Lien
Documents. The holder of the Note will not oppose any such motion or
application.
(b) In the event that notwithstanding the provisions of the
preceding subsection (a) of this Section 1.02, the Company shall make any
payment on account of the principal of, or interest on, or amounts otherwise
owing in respect of, the Note at a time when payment is not permitted by said
subsection (a), such payment shall be held by the holder of the Note, in trust
for the benefit of, and shall be paid forthwith over and delivered to, the
<PAGE>
holders of Senior Indebtedness or their representative or representatives under
the agreements pursuant to which the Senior Indebtedness may have been issued,
as their respective interests may appear, for application pro rata to the
payment of all Senior Indebtedness remaining unpaid to the extent necessary to
pay all Senior Indebtedness in full in cash in accordance with the terms of such
Senior Indebtedness, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Indebtedness. Without in any way
modifying the provisions of this Annex A or affecting the subordination effected
hereby, if such notice is not given, the Company shall give the holder of the
Note prompt written notice of any maturity of Senior Indebtedness after which
such Senior Indebtedness remains unsatisfied.
Section 1.3. Note Subordinated to Prior Payment of all Senior
Indebtedness on Dissolution, Liquidation or Reorganization of Company. Upon any
distribution of assets of the Company upon any dissolution, winding up,
liquidation or reorganization of the Company (whether in bankruptcy, insolvency
or receivership proceedings or upon an assignment for the benefit of creditors
or otherwise):
(a) the holders of all Senior Indebtedness shall first be
entitled to receive payment in full in cash or in a manner satisfactory
to the holder or holders of such Senior Indebtedness of the principal
thereof, premium, if any, and interest (including, without limitation,
all interest accruing after the commencement of any bankruptcy,
insolvency, receivership or similar proceeding at the rate provided in
the governing documentation whether or not such interest is an allowed
claim in such proceeding) and all other amounts due thereon before the
holder of the Note is entitled to receive any payment on account of the
principal of or interest on or any other amount owing in respect of the
Note;
(b) any payment or distributions of assets of the Company of
any kind or character, whether in cash, property or securities to which
the holder of the Note would be entitled except for the provisions of
this Annex A, shall be paid by the liquidating trustee or agent or
other person making such payment or distribution, whether a trustee or
agent, directly to the holders of Senior Indebtedness or their
representative or representatives under the agreements pursuant to
which the Senior Indebtedness may have been issued, to the extent
necessary to make payment in full of all Senior Indebtedness remaining
unpaid, after giving effect to any concurrent payment or distribution
to the holders of such Senior Indebtedness; and
(c) in the event that, notwithstanding the foregoing
provisions of this Section 1.03, any payment or distribution of assets
of the Company of any kind or character, whether in cash, property or
securities, shall be received by the holder of the Note on account of
principal of, or interest or other amounts due on, the Note before all
<PAGE>
Senior Indebtedness is paid in full in cash or in a manner satisfactory
to the holder or holders of such Senior Indebtedness, or effective
provisions made for its payment, such payment or distribution shall be
received and held in trust for and shall be paid over to the holders of
the Senior Indebtedness remaining unpaid or unprovided for or their
representative or representatives under the agreements pursuant to
which the Senior Indebtedness may have been issued, for application to
the payment of such Senior Indebtedness until all such Senior
Indebtedness shall have been paid in full in cash or in a manner
satisfactory to the holder or holders of such Senior Indebtedness,
after giving effect to any concurrent payment or distribution to the
holders of such Senior Indebtedness.
Without in any way modifying the provisions of this Annex A or
affecting the subordination effected hereby, if such notice is not given, the
Company shall give prompt written notice to the holder of the Note of any
dissolution, winding up, liquidation or reorganization of the Company (whether
in bankruptcy, insolvency or receivership proceedings or upon an assignment for
the benefit of creditors or otherwise). In order to enable Senior Creditor to
enforce its rights hereunder, each Junior Creditor hereby irrevocably authorizes
and empowers the Senior Creditor (in its own name or in the name of such Junior
Creditor or otherwise), but the Senior Creditor shall have no obligation to,
enforce claims comprising any of the Junior Indebtedness by proof of debt, proof
of claim, suit or otherwise and take generally any action which such Junior
Creditor might otherwise be entitled to take, as Senior Creditor may deem
necessary or advisable for the enforcement of its rights or interests hereunder.
Section 1.4. Subrogation. Subject to the prior payment in full
of all Senior Indebtedness in cash, the holder of the Note shall be subrogated
to the rights of the holders of Senior Indebtedness to receive payments or
distributions of assets of the Company applicable to the Senior Indebtedness
until all amounts owing on the Note shall be paid in full, and for the purpose
of such subrogation no payments or distributions to the holders of the Senior
Indebtedness by or on behalf of the Company or by or on behalf of the holder of
the Note by virtue of this Annex A which otherwise would have been made to the
holder of the Note, shall be deemed to be payment by the Company to or on
account of the Senior Indebtedness, it being understood that the provisions of
this Annex A are and are intended solely for the purpose of defining the
relative rights of the holder of the Note, on the one hand, and the holders of
the Senior Indebtedness, on the other hand.
Section 1.5. Obligation of the Company Unconditional. Nothing
contained in this Annex A or in the Note (other than the Repayment Alteration
Provisions) is intended to or shall impair, as between the Company and its
<PAGE>
holder of the Note, the obligation of the Company, which is absolute and
unconditional, to pay to the holder of the Note the principal of and interest on
the Note as and when the same shall become due and payable in accordance with
their terms, or is intended to or shall affect the relative rights of the holder
of the Note and creditors of the Company other than the holders of the Senior
Indebtedness, nor shall anything herein or therein prevent the holder of the
Note from exercising all remedies otherwise permitted by applicable law, subject
to the rights, if any, under this Annex A of the holders of the Senior
Indebtedness in respect of cash, property, or securities of the Company received
upon the exercise of any such remedy. Upon any distribution of assets of the
Company referred to in this Annex A, the holder of the Note shall be entitled to
rely upon any order or decree made by any court of competent jurisdiction in
which such dissolution, winding up, liquidation or reorganization proceedings
are pending, or a certificate of the liquidating trustee or agent or other
person making any distribution to the holder of the Note, for the purpose of
ascertaining the persons entitled to participate in such distribution, the
holders of the Senior Indebtedness and other indebtedness of the Company, the
amount thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Annex A.
Section 1.6. Subordination Rights not Impaired by Acts or
Omissions of Company or Holders of Senior Indebtedness. No right of any present
or future holders of any Senior Indebtedness to enforce subordination as herein
provided shall at any time in any way be prejudiced or impaired by an act or
failure to act on the part of the Company or by any act or failure to act in
good faith by any such holder, or by any noncompliance by the Company with the
terms and provisions of the Note, regardless of any knowledge thereof which any
such holder may have or be otherwise charged with. The holders of the Senior
Indebtedness may, without in any way affecting the obligations of the holder of
the Note with respect thereto, at any time or from time to time and in their
absolute discretion, change the manner, place or terms of payment of, change or
extend the time of payment of, or renew or alter, any Senior Indebtedness, or
amend, modify or supplement any agreement or instrument governing or evidencing
such Senior Indebtedness or any other document referred to therein, or exercise
or refrain from exercising any other of their rights under the Senior
Indebtedness including, without limitation, the waiver of a default thereunder
and the release of any collateral securing such Senior Indebtedness, all without
notice to or assent from the holder of the Note.
Section 1.7. Senior Indebtedness. (a) The term "Senior
Indebtedness" shall mean all Obligations (as defined below) of the Company
and/or its Subsidiaries (as defined below) under the Credit Agreement (as
defined below) and any renewal, extension, restatement or refunding thereof.
<PAGE>
(a) As used in this Agreement, the terms set forth below shall
have the respective meanings provided below:
"Credit Agreement" shall mean the Credit Agreement dated as of
October 30, 1997 among the Company, Americold Services Corporation, Vornado
Crescent Portland Partnership, and Goldman Sachs Mortgage Company, as Lender and
as Agent, as the same may be modified, supplemented, amended or refinanced from
time to time, and including any agreement extending the maturity of, refinancing
or restructuring (including, but not limited to, the inclusion of additional
borrowers thereunder that are subsidiaries of the Company and whose obligations
are guaranteed by the Company thereunder or any increase in the amount borrowed)
all or any portion of, the indebtedness under such agreement or of any successor
agreements.
"Creditor" shall mean each of Junior Creditor and Senior
Creditor.
"Junior Creditor Agreements" shall mean each agreement
evidencing the obligations of the Junior Indebtedness.
"Obligations" shall mean any principal, interest, premium,
penalties, fees and other liabilities and obligations payable under the
documentation governing any Senior Indebtedness (including, without limitation,
all interest accruing after the commencement of any bankruptcy, insolvency,
receivership or similar proceeding at the rate provided in the governing
documentation, whether or not such interest is an allowed claim in such
proceeding).
"Senior Creditor" shall mean the holder of the Senior
Indebtedness or its representative.
Section 1.8. Certain Provisions Relating to Senior Lien
Documents and Junior Lien Documents. (a) Each Creditor shall be solely
responsible for perfecting and maintaining the perfection of its Lien in and to
each item constituting the collateral in which such Creditor has been granted a
lien. The foregoing provisions of this Annex A are intended solely to govern the
respective lien priorities as between the Creditors and shall not impose on
Senior Creditor any obligations in respect of the disposition of proceeds of
foreclosure on any Collateral which would conflict with prior perfected claims
therein in favor of any other person or any order or decree of any court or
other governmental authority or any applicable law. Each Junior Creditor agrees
that it will not contest the validity, perfection, priority or enforceability of
the liens upon the collateral of Senior Creditor and that as between Senior
Creditor and Junior Creditors, the terms of this Annex A shall govern even if
part or all of the Senior Indebtedness or the Liens securing payment and
performance thereof are avoided, disallowed, set aside or otherwise invalidated
in any judicial proceeding or otherwise.
<PAGE>
1.9. Manqagement of Collateral. Subject to the provisions of
the Uniform Commercial Code and applicable law, Senior Creditor shall have the
exclusive right to manage, perform and enforce the terms of the Senior Lien
Documents with respect to the Collateral, to exercise and enforce all privileges
and rights thereunder according to its discretion and the exercise of its
business judgment, including, without limitation, the exclusive right to take or
retake control or possession of such Collateral and to hold, prepare for sale,
process, sell, lease, dispose of, or liquidate such collateral.
1.10. Release and Sale of Collateral. Notwithstanding
anything to the contrary contained in any of the Junior Lien Documents or the
Junior Indebtedness, only Senior Creditor shall have the right to restrict or
permit, or approve or disapprove, the sale, transfer or other disposition of
collateral. Each Junior Creditor shall, immediately upon the request of Senior
Creditor, release or otherwise terminate its Liens on the Collateral to the
extent such Collateral is sold or otherwise disposed of either by (a) Senior
Creditor or its agents or (b) Debtor with the consent of Senior Creditor. Each
Junior Creditor shall immediately deliver such release documents as Senior
Creditor may require in connection therewith.
1.11. Certain Waivers by Junior Creditor. Notwithstanding any
rights or remedies available to a Junior Creditor under any of the Junior
Creditor Agreements, applicable law or otherwise, and except as provided in the
remainder of this Annex A, each Junior Creditor shall not, directly or
indirectly, (a) seek to collect from the Company (including, without limitation,
from or by way of any collateral) any of the Junior Indebtedness or exercise any
of its rights or remedies upon a default or event of default by the Company
under its Junior Creditor Agreements or otherwise, or (b) seek to foreclose or
realize upon (judicially or non-judicially) its Lien on any Collateral or assert
any claims or interests therein (including, without limitation, by setoff or
notification of account debtors), or (c) commence any action or proceeding
against the Company or consent thereto or its properties under the U.S.
Bankruptcy Code or any state insolvency law or similar present or future
statute, law or regulation or any proceedings for voluntary liquidation,
dissolution or other winding up of Debtor's business, or the appointment of any
trustee, receiver or liquidator for the Company or any part of its properties or
any assignment for the benefit of creditors or any marshaling of assets of the
Company, or (d) take any other action against the Company or the collateral. The
foregoing shall not in any way limit or impair the right of any Junior Creditor
from bidding for and purchasing Collateral at any private or judicial
foreclosure upon such Collateral initiated by Senior Creditor or from filing
proofs of claim, financing statements or continuation statements, or taking any
other actions necessary to preserve the enforceability of the Junior
Indebtedness and the Liens securing the Junior Indebtedness and the perfection
of such Liens.
Exhibit (11)
AMERICOLD CORPORATION
STATEMENT RE COMPUTATION OF
PER SHARE EARNINGS
(In thousands, except share and per share data)
<TABLE>
<CAPTION>
Three months Three months Nine months Nine months
ended ended ended ended
last day of last day of last day of last day of
November 1996 November 1997 November 1996 November 1997
------------- ------------- ------------- -------------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Net income (loss) $ 154 $ (5,690) $ (4,855) $ (8,479)
Less: total accrued preferred dividend
(52,936 shares x 13.00% x 3/12 yr) (172) - - -
(46,797 shares x 12.50% x 2/12 yr) - (98) - -
(52,936 shares x 13.50% x 4/12 yr) - - (238) -
(52,936 shares x 13.00% x 5/12 yr) - - (287) -
(52,936 shares x 13.00% x 4/12 yr) - - - (230)
(52,936 shares x 12.50% x 2/12 yr) - - - (111)
(46,797 shares x 12.50% x 2/12 yr) - - - (98)
------ ------ ------ ------
Net loss for per share calculation $ (18) $ (5,788) $ (5,380) $ (8,918)
========= =========== =========== ===========
Weighted average number of shares
outstanding 981 1,000 980 995
======== ========== =========== ============
Net loss per share $ (18.35) $(5,788.00) $(5,489.80) $(8,962.81)
========= =========== =========== ===========
</TABLE>
<TABLE> <S> <C>
<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 NOVEMBER 30, 1997 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> FEB-28-1997
<PERIOD-END> NOV-30-1997
<CASH> 2,152
<SECURITIES> 0
<RECEIVABLES> 35,659
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 48,048
<PP&E> 579,721
<DEPRECIATION> 207,176
<TOTAL-ASSETS> 517,694
<CURRENT-LIABILITIES> 72,555
<BONDS> 323,982
0
0
<COMMON> 0
<OTHER-SE> 16,706
<TOTAL-LIABILITY-AND-EQUITY> 517,694
<SALES> 230,174
<TOTAL-REVENUES> 230,174
<CGS> 167,840
<TOTAL-COSTS> 196,647
<OTHER-EXPENSES> (1,726)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 40,404
<INCOME-PRETAX> (5,151)
<INCOME-TAX> 1,284
<INCOME-CONTINUING> (3,867)
<DISCONTINUED> 0
<EXTRAORDINARY> 4,612
<CHANGES> 0
<NET-INCOME> (8,479)
<EPS-PRIMARY> (8,963)
<EPS-DILUTED> (8,963)
</TABLE>
