VOTING RIGHTS AND FORBEARANCE AGREEMENT{PRIVATE }
This Voting Rights and Forbearance Agreement (this "AGREEMENT")
supplements the Deposit Trust Agreement (as defined below) and is made this 14th
day of May, 1997 by and among (i) AMALGAMATED COLLATERAL TRUST, a Delaware
business trust (the "SPT") created pursuant to the Deposit Trust Agreement (the
"DEPOSIT TRUST AGREEMENT") dated as of May 14, 1997 between ASC Holdings, Inc.,
a Utah corporation ("AMALGAMATED"), Wilmington Trust Company, as Resident
Trustee (as defined on the Deposit Trust Agreement), and Amalgamated, as Company
Trustee (as defined on the Deposit Trust Agreement), (ii) AMALGAMATED, as holder
of the Certificate of Beneficial Interest issued by the SPT, (iii) Amalgamated,
as the Company Trustee under the Deposit Trust Agreement, and (iv) FIRST
SECURITY BANK, NATIONAL ASSOCIATION, as Collateral Agent (the "COLLATERAL
AGENT") under the Collateral Agency Agreement dated as of May 14, 1997 among
Snake River Sugar Company, an Oregon agricultural cooperative ("SNAKE RIVER"),
the Collateral Agent and the purchasers (the "PURCHASERS") referred to in the
Note Purchase Agreements (the "NOTE PURCHASE AGREEMENTS") dated May 14, 1997
between the Purchasers and Snake River (terms defined in the Note Purchase
Agreements and not otherwise defined herein shall have the meanings provided in
the Note Purchase Agreements).
WHEREAS, pursuant to the Company Agreement (the "COMPANY AGREEMENT")
dated January 3, 1997 as amended May 14, 1997 among The Amalgamated Sugar
Company LLC, a Delaware limited liability company (the "COMPANY"), Snake River
and Amalgamated, Snake River received the SR Interest in the Company and
Amalgamated received the AGM Interest in the Company, each as defined in the
Company Agreement;
WHEREAS, pursuant to the Deposit Trust Agreement and to the First
Amendment to the Company Agreement dated as of May 14, 1997 (the "FIRST
AMENDMENT"), the AGM Interest was transferred and assigned to the SPT in
exchange for a beneficial interest in the SPT;
WHEREAS, Valhi, Inc. has issued to Snake River a Limited Recourse
Promissory Note dated January 3, 1997 in aggregate principal amount of
$212,500,000 (the "LIMITED RECOURSE NOTE") and a Subordinated Promissory Note
dated January 3, 1997 in aggregate principal amount of $37,500,000 (the
"SUBORDINATED NOTE") (collectively, as they may be amended, supplemented,
restated or otherwise modified from time to time, the "SNAKE RIVER LOAN NOTES").
WHEREAS, pursuant to the Pledge Agreement dated as of May 14, 1997
between the SPT and Snake River, as Secured Party (as it may be amended,
supplemented or otherwise modified from time to time, the "SPT PLEDGE
AGREEMENT"), the SPT assigned all of its right, title and interest in and to the
AGM Interest to Snake River to secure (i) the obligations of the SPT under the
Guaranty dated as of May 14, 1997 (the "SPT GUARANTY") pursuant to which the SPT
has guaranteed the Limited Recourse Note, and (ii) the obligations of Valhi,
Inc. ("VALHI") under the Subordinated Note; and pursuant to the Pledge Agreement
dated as of May 14, 1997 between Amalgamated and Snake River, as Secured Party
(as it may be amended, supplemented or otherwise modified from time to time, the
"VALHI ENTITY PLEDGE AGREEMENT"), Amalgamated assigned all of its right, title
and interest in and to the beneficial interest in SPT to Snake River to secure
the obligations of Valhi under the Snake River Loan Notes ; and pursuant to the
Pledge Agreement dated as of May 14, 1997 between Snake River and the Collateral
Agent, as Secured Party (as it may be amended, supplemented or otherwise
modified from time to time, the "SNAKE RIVER PLEDGE AGREEMENT" and together with
the SPT Pledge Agreement and the Valhi Entity Pledge Agreement, the "PLEDGE
AGREEMENTS"), Snake River assigned all of its right, title and interest in and
to the SPT Guaranty, the SPT Pledge Agreement and the AGM Interest and the Valhi
Entity Pledge Agreement and the beneficial interest in SPT to the Collateral
Agent to secure Snake River's obligations under the Note Purchase Agreements and
the 10.80% Senior Notes due April 30, 2009 (the "SENIOR NOTES") issued pursuant
thereto;
WHEREAS, the AGM Interest is entitled to certain voting and other
consensual rights with respect to the Company under certain conditions, all as
set forth in the Company Agreement (the "AGM INTEREST RIGHTS"); and
WHEREAS, the parties hereto desire to enter into an agreement
supplemental to the Deposit Trust Agreement with respect to the exercise of the
AGM Interest Rights by the Company Trustee on behalf of the SPT;
NOW, THEREFORE, in consideration of the covenants contained herein,
the parties hereto hereby agree as follows:
Authority of Company Trustee with Respect to the AGM Interest
Rights. The parties acknowledge and agree that (i) the AGM Interest includes
the AGM Interest Rights and that, accordingly, pursuant to the First Amendment
and the Deposit Trust Agreement, the AGM Interest Rights have been transferred
by Amalgamated to the SPT and (ii) pursuant to the Pledge Agreements, the AGM
Interest Rights have been assigned by the SPT to Snake River and by Snake River
to the Collateral Agent. Subject to the provisions of Sections 2 and 3 hereof
and to the Pledge Agreements, the parties hereto agree that the Company Trustee
shall be entitled to exercise, on behalf of the SPT, all AGM Interest Rights.
Termination of Company Trustee's Authority to Exercise the AGM
Interest Rights. (a) The grant of authority to the Company Trustee pursuant to
Section 1 and Section 3 shall terminate upon receipt by the Resident Trustee of
notice from the Collateral Agent or Snake River of the occurrence of any one of
the following events:
(i) the Snake River Loan shall have been accelerated by the
Person or Persons entitled to take such action (including, without limitation,
the Collateral Agent) or (ii) following a default on the Snake River Loan Notes
permitting acceleration (a "SNAKE RIVER LOAN DEFAULT") such Person or Persons
shall have commenced the exercise of remedies with respect to the Snake River
Loan Notes or the AGM Interest or the Valhi Entity Pledge Agreement or the SPT
Pledge Agreement.
(b) Upon termination as set forth in this Section 2 of the
Company Trustee's right to exercise the AGM Interest Rights, the right to
exercise such AGM Interest Rights shall revert in their entirety to the Resident
Trustee and shall become exercisable, automatically and without the necessity of
any action whatsoever by any Person, solely by the Resident Trustee (or the
Collateral Agent pursuant to the terms of the Trust Agreement and the Pledge
Agreements).
Limitation of Company Trustee's Authority to Exercise Certain AGM
Interest Rights. (a) Notwithstanding the provisions of Section 1, until
payment in full in cash of the Senior Notes issued pursuant to the Note Purchase
Agreements, the Company Trustee agrees that, without consent of the Required
Holders (as defined in the Note Purchase Agreements), the Company Trustee will
not take any Control Action (as defined below) or take any enforcement action or
exercise any rights or remedies with respect to any breach of the Company
Agreement (pursuant to Section 16 of the Company Agreement or otherwise),
provided, however, that:
(i) The Company Trustee may cause the SPT to take action to
enforce specific performance of the provisions of the Company Agreement, other
than (x) any provision which conflicts with any provision of the Note Purchase
Agreements or the Collateral Agreements (as defined therein), or (y) the
provisions of Section 6.3 except for Section 6.3(i) and Section 6.3(ii); and
(ii) The Company Trustee, on behalf of the SPT, may cause
the election and continuation in office of a majority of the Management
Committee of the Company as permitted by Section 16.2.1 of the Company Agreement
("CONTROL ACTION"; which Control Action shall be deemed to continue to be taken
so long as the members of the Management Committee elected by the Company
Trustee constitute a majority of the Management Committee) if (x) the unpaid
Accrual (as defined in the Company Agreement) exceeds the Accrual Threshold (as
defined in the Company Agreement), or (y) the Triggering Event (as defined in
the Company Agreement) giving rise to the Company Trustee's ability to exercise
and continue Control Action is a default under the provisions of Article III, or
Sections 6.3, 8.4.1, or 11.1 of the Company Agreement and (z) in each case if
the Company Trustee delivers to the Resident Trustee and to the Collateral Agent
a certificate executed by two officers of the Company Trustee certifying to such
effect, and provided further that if more than 30 days shall have elapsed
following written notice (a "DEFAULT NOTICE") by or on behalf of the Required
Holders to the Company Trustee, the Resident Trustee and the Collateral Agent of
their intention, following an Event of Default, to accelerate the Senior Notes
or, following an Event of Default, to exercise any remedies other than those set
forth in Section 2 above then the Company Trustee may only exercise Control
Action if:
A. No Snake River Loan Default shall exist, and on or
prior to the end of such 30-day period, the Company Trustee shall have caused
Valhi to loan funds, which loan shall be subject to the terms of the Note
Purchase Agreement and the Subordination Agreement, to Snake River and Snake
River shall have irrevocably deposited with the Collateral Agent pursuant to the
Voting Rights Collateral Deposit Agreement as security for the payment of the
Senior Notes not less than $5,000,000 in cash; provided that in lieu of loaning
such cash to Snake River, Valhi may cause, on a nonrecourse basis to Snake
River, an irrevocable letter of credit, in form and substance reasonably
satisfactory to the Required Holders, to be issued in favor of the Collateral
Agent by a bank organized in the United States and having a long-term debt
rating of "A" or better from Standard & Poor's Ratings Service, a division of
McGraw Hill Companies, or "A2" or better from Moody's Investors Services, Inc.
and a combined capital and surplus in excess of $500,000,000 (a "LETTER OF
CREDIT"), in an amount of not less than $5,000,000; and
B. No Snake River Loan Default shall exist, and on or
prior to the end of the 75th day following the date of the Default Notice, the
Company Trustee shall have caused Valhi to loan funds, which loan shall be
subject to the terms of the Note Purchase Agreement and the Subordination
Agreement, to Snake River and Snake River shall have irrevocably deposited with
the Collateral Agent pursuant to the Voting Rights Collateral Deposit Agreement
as additional cash collateral or caused a Letter of Credit to be delivered to
Collateral Agent in an amount sufficient to cause the sum of (x) the $5,000,000
previously deposited pursuant to the immediately preceding subparagraph A plus
(y) the amount of such additional collateral deposited pursuant to this
subparagraph B to equal or exceed the next 12 months' scheduled debt service on
the Senior Notes (including interest and principal payments).
(b) Notwithstanding the deposit of additional cash collateral
and/or any Letters of Credit as contemplated by subsection (a)(ii) above, the
Company Trustee shall not be entitled to exercise any Control Action on and
after the date which is 30 days after the last day of the fourth fiscal quarter
of Snake River ended after the date on which cash collateral or a Letter of
Credit is first deposited pursuant to subsection (A) above if any Specified
Default specified in the Subordination Agreement then exists, unless Amalgamated
shall have caused Valhi to loan funds, subject to the terms of the Note Purchase
Agreement and the Subordination Agreement, to Snake River and Snake River shall
have irrevocably deposited with the Collateral Agent pursuant to the Voting
Rights Collateral Deposit Agreement additional cash collateral or a Letter of
Credit in an amount which, when added to the amount previously deposited
pursuant to subsection (a)(ii)(A) and subsection (a)(ii)(B) above (plus any
earnings thereon held by the Collateral Agent), equals or exceeds the next 36
months' debt service on the Senior Notes (including interest and principal
payments).
(c) All collateral deposited with the Collateral Agent pursuant
to subsections (a) and (b) above shall be held by the Collateral Agent as
additional collateral for the Senior Notes and the Note Purchase Agreements
pursuant to the Voting Rights Collateral Deposit Agreement. All such collateral
deposited with the Collateral Agent pursuant to subsections (a) and (b) above,
together with any earnings thereon, shall be returned to Snake River for
repayment to Valhi in accordance with the terms of the Subordination Agreement:
(i) if no Event of Default on the Senior Notes has occurred and is continuing,
then five Business Days after the Company Trustee has notified Snake River and
the Collateral Agent that Amalgamated has ceased to exercise Control Action and
has caused its representatives to resign from the Management Committee of the
Company (and no Control Action may thereafter be exercised by the Company
Trustee hereunder unless the terms and conditions of this Agreement, including
Sections 3(a)(ii)(A) and 3(a)(ii)(B) above are again fully complied with in
respect of such exercise of Control Action), (ii) if the Senior Notes and all
other amounts payable under the Note Purchase Agreements are paid in full, or
(iii) if consented to by the Required Holders (including Valhi if Valhi has
acquired all of the Senior Notes).
(d) If any of the conditions set forth in this Section 3 to the
exercise by the Company Trustee of Control Action are not at any time satisfied
in full, the Collateral Agent, at the direction of the Required Holders, shall
notify the Resident Trustee and the Company Trustee of such non-satisfaction,
and immediately upon receipt of such notice by the Resident Trustee, all rights
of the Company Trustee to exercise Control Action shall automatically terminate
and the Company Trustee will cause its representatives to resign from the
Management Committee of the Company (and, if the Company Trustee shall fail to
so cause such resignations, then the Collateral Agent is hereby authorized to
direct the Resident Trustee to cause such resignations); provided that at such
time as the Collateral Agent, at the direction of the Required Holders, rescinds
such notice, the Company Trustee's rights to exercise Control Action under this
Section 3 shall be reinstated, subject to the right of the Collateral Agent, at
the direction of the Required Holders, to deliver additional notices under this
Section 3(d).
(e) Notwithstanding anything to the contrary herein, without
prior written consent of all of the holders of the Senior Notes, the Company
Trustee shall take no action, directly or indirectly, to dissolve or liquidate
the Company pursuant to Section 13.1.1(d) of the Company Agreement or otherwise.
Compliance with Note Purchase Agreements. The Company Trustee
hereby agrees that at all times that it is entitled to exercise the AGM Interest
Rights, the Company Trustee shall use reasonable commercial efforts to cause the
Company to comply with (and shall take no action which would cause the Company
to violate) the Trust Agreement and the covenants and other obligations
applicable to the Company under the Note Purchase Agreements and the Collateral
Documents, and shall not exercise any AGM Interest Rights inconsistent with the
terms of the Note Purchase Agreements and the Collateral Documents. Nothing in
this Section 4 shall require the Company Trustee to make additional
contributions to the Company or cause the Company Trustee to be or be deemed to
be a guarantor of the Senior Notes.
Continuation of Obligations Under Snake River Loan Notes. The
deposit of cash collateral and/or Letters of Credit pursuant to this Agreement
shall not relieve Valhi or any other Person of any payment obligations under the
Snake River Loan Notes or relieve Snake River or any other Person of any payment
obligations under the Note Purchase Agreements and the Senior Notes.
Representations of the SPT. The SPT hereby represents and
warrants that (a) it owns beneficially and of record and, subject to the Company
Agreement and the Pledge Agreements, has the right to vote the AGM Interest,
(b) it has full power and authority to enter into and perform its obligations
under this Agreement and has not, prior to the date of this Agreement, executed
or delivered any proxy or entered into any other voting agreement or similar
arrangement, and (c) it will not take any action inconsistent with the purposes
and provisions of this Agreement.
Representations of Amalgamated and the Collateral Agent. Each of
the Company Trustee and the Collateral Agent represents and warrants that (a) it
has full power to enter into and perform its obligations under this Agreement,
(b) this Agreement has been duly authorized by all necessary action on behalf of
such party and (c) it will not take an action inconsistent with the purposes and
provisions of this Agreement, except in the case of the Collateral Agent,
pursuant to the exercise of rights and remedies under the Pledge Agreements.
Enforceability; Validity. Each party hereto expressly agrees
that this Agreement shall be specifically enforceable in any court of competent
jurisdiction in accordance with its terms and against each of the parties
hereto.
General Provisions. (a) All of the covenants and agreements
contained in this Agreement shall be binding upon, and inure to the benefit of,
the respective parties and their successors, assigns, heirs, executors,
administrators and other legal representatives, as the case may be.
This Agreement, and the rights of the parties hereto, shall
be governed by and construed in accordance with the laws of the State of
Delaware.
This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original but all of which together shall
constitute one and the same instrument.
No amendment, modification, termination or waiver of any
provision of this Agreement, and no consent to any departure by the Company
Trustee therefrom, shall in any event be effective unless the same shall be in
writing and signed by the other parties hereto and, in the case of any such
amendment or modification, by the Company Trustee. Any such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which it was given.
If any provision of this Agreement shall be declared void or
unenforceable by any court or administrative board of competent jurisdiction,
such provision shall be deemed to have been severed from the remainder of this
Agreement, and this Agreement shall continue in all other respects to be valid
and enforceable.
(f) Nothing herein shall limit in any way the rights and
remedies of the Collateral Agent under any of the Pledge Agreements.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
AMALGAMATED COLLATERAL TRUST
By: Wilmington Trust Company, not in its individual
capacity but solely as Trustee
By:
Name:
Title:
ASC HOLDINGS, INC., individually and as Company Trustee
By:
Name:
Title:
FIRST SECURITY BANK, NATIONAL ASSOCIATION, as
Collateral Agent
By:
Name:
Title:
As of the date first above written, The Amalgamated Sugar Company LLC,
a Delaware limited liability company (the "COMPANY"), hereby acknowledges and
agrees to be bound by the terms and provisions of the foregoing Voting Rights
Agreement among Amalgamated Collateral Trust, ASC Holdings, Inc. and First
Security Bank, National Association; provided, however, that the LLC shall
neither be a party to, nor a third-party beneficiary of, the foregoing
agreement.
THE AMALGAMATED SUGAR COMPANY LLC
By:
Name:
Title: