SECOND AMENDED AND RESTATED INVESTMENT AGREEMENT
Between
AMERICOLD CORPORATION, an
Oregon corporation
and
METROPOLITAN LIFE INSURANCE COMPANY, a
New York corporation
Dated as of May 5, 1995
TABLE OF CONTENTS
Page
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SECTION 1. DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. . . . . . . . . 9
SECTION 3. [Deleted.] . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 4. FINANCIAL STATEMENTS AND INFORMATION . . . . . . . . . . . . . 13
SECTION 5. INSPECTION OF PROPERTIES AND BOOKS . . . . . . . . . . . . . . 15
SECTION 6. COVENANTS OF THE COMPANY . . . . . . . . . . . . . . . . . . . 15
SECTION 7. EVENTS OF DEFAULT. . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 8. RELEASE OF COLLATERAL; ADDITIONS OF MORTGAGED
PROPERTIES TO THE TRUST ESTATE . . . . . . . . . . . . . . . 22
SECTION 9. REQUIRED PREPAYMENTS; PREPAYMENT PRICE; OPTIONS
TO REQUIRE PURCHASE. . . . . . . . . . . . . . . . . . . . . 23
SECTION 10. PAYMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 11. INDEMNITY . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 12. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. . . . . . . . . . 27
SECTION 13. EXPENSES. . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 14. CONSENT; CONDITIONS TO EFFECTIVENESS. . . . . . . . . . . . . 28
SECTION 15. RIGHTS CUMULATIVE . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 16. PARTIAL TERMINATION . . . . . . . . . . . . . . . . . . . . . 29
SECTION 17. SUCCESSORS. . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 18. CONSTRUCTION. . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 19. AMENDMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 20. NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 21. HEADINGS. . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 22. COUNTERPARTS. . . . . . . . . . . . . . . . . . . . . . . . . 31
SECOND AMENDED AND RESTATED INVESTMENT AGREEMENT
dated as of May 5, 1995 between AMERICOLD CORPORA-
TION, an Oregon corporation (the "Company"), and
METROPOLITAN LIFE INSURANCE COMPANY, a New York
corporation (the "Investor").
The Investor was the purchaser of $300,000,000
aggregate principal amount of the Company's First Mortgage Bonds
Due 2002 (the "Original Bonds") issued pursuant to an Indenture
dated as of June 15, 1987 (the "Original Indenture") between the
Company and Shawmut Bank Connecticut, National Association (then
known as The Connecticut National Bank), as Trustee. In
connection with the purchase of the Original Bonds by the
Investor, the Company and the Investor entered into an Investment
Agreement dated as of July 2, 1987 (the "Original Agreement")
providing for certain additional terms regarding Investor's
investment in the Original Bonds. The Company has retired
$150,000,000 in principal amount of the Original Bonds with the
proceeds of a registered offering (the "Offering") of
$176,250,000 aggregate principal amount of the Company's 11 1/2%
First Mortgage Bonds, Series B, Due 2005 (the "Series B Bonds").
In connection with the Offering, the Original Indenture was
amended and restated to provide for the issuance of the Series B
Bonds, to reflect certain amendments to the terms and conditions
governing the Original Bonds and to redesignate the Original
Bonds as 11.45% First Mortgage Bonds, Series A, Due 2002. The
Original Bonds as so amended and redesignated are herein referred
to as the "Series A Bonds." The Original Indenture as so amended
and restated is herein referred to as the "Indenture." In
connection with the Offering and the amendment and restatement of
the Original Indenture, the Company and the Investor entered into
an Amended and Restated Investment Agreement dated as of March 2,
1993 (as amended, the "Amended and Restated Agreement").
The Company is preparing to issue $115,000,000 of 15%
Senior Subordinated Debentures due 2007 (the "New Subordinated
Debentures") in exchange for its outstanding 11% Senior
Subordinated Debentures due 1997 (the "Old Subordinated
Debentures"), pursuant to a Plan of Reorganization (the "Plan")
described in a Disclosure Statement dated April 14, 1995 (the
"Disclosure Statement"). The Investor is willing to execute this
Second Amended and Restated Investment Agreement (this
"Agreement"), subject to the conditions set forth herein.
NOW, THEREFORE, the Company and the Investor have
agreed and do hereby agree as follows:
SECTION 1. DEFINITIONS. Unless the context specifies
to the contrary, all terms used in this Agreement are used herein
with the meanings set forth in the Indenture (provided that
defined terms in the Indenture which incorporate terms that are
defined both herein and in the Indenture shall be deemed for the
purposes of this Agreement to be amended to reflect such terms as
defined herein) and as follows:
"ADJUSTED CONSOLIDATED INTEREST EXPENSE" means, for any
period, the total interest expense of the Company and its
Restricted Subsidiaries, including (i) interest expense
attributable to capital leases, (ii) amortization of debt
discount and debt issuance cost, (iii) capitalized interest,
(iv) non-cash interest payments, (v) commissions, discounts and
other fees and charges owed with respect to letters of credit and
bankers' acceptance financing, (vi) net costs under Interest Rate
Protection Agreements (including amortization of fees),
(vii) Preferred Stock dividends (other than dividends payable
solely in kind) in respect of all Preferred Stock held by persons
other than the Company or a Restricted Subsidiary,
(viii) interest incurred in connection with investments in
discontinued operations and (ix) interest actually paid by the
Company or any of its Restricted Subsidiaries under any guarantee
of Indebtedness or any other obligation of any other person.
"ADJUSTED CONSOLIDATED NET INCOME" means, for any
period, the net income (or net loss) of the Company and its
Restricted Subsidiaries determined on a consolidated basis in
accordance with generally accepted accounting principles,
provided, however, that there shall not be included in such
Adjusted Consolidated Net Income:
(i) any net income of any person if such person is not
a Restricted Subsidiary, except that (A) the Company's or
any Restricted Subsidiary's equity in the net income of any
such person for such period shall be included in such
Adjusted Consolidated Net Income up to the aggregate amount
of cash actually distributed by such person during such
period to the Company or a Restricted Subsidiary as a
dividend or other distribution (subject, in the case of a
dividend or other distribution to a Restricted Subsidiary,
to the limitations contained in clause (iii) below) and
(B) the Company's or any Restricted Subsidiary's equity in a
net loss of any such person for such period shall be
included in determining such Adjusted Consolidated Net
Income;
(ii) any net income of any person acquired by the
Company or a Restricted Subsidiary in a pooling of interests
transaction for any period prior to the date of such
acquisition;
(iii) any net income of any Restricted Subsidiary if
such Restricted Subsidiary is subject to restrictions,
directly or indirectly, on the payment of dividends or the
making of distributions by such Restricted Subsidiary,
directly or indirectly, to the Company, except that (A) the
Company's equity in the net income of any such Restricted
Subsidiary for such period shall be included in such
Adjusted Consolidated Net Income up to the aggregate amount
of cash actually distributed by such Restricted Subsidiary
during such period to the Company or another Restricted
Subsidiary as a dividend or other distribution (subject, in
the case of a dividend or other distribution to another
Restricted Subsidiary, to the limitation contained in this
clause) and (B) the Company's equity in a net loss of any
such Restricted Subsidiary for such period shall be included
in determining such Adjusted Consolidated Net Income;
(iv) any gain or loss realized upon the sale or other
disposition of any property, plant or equipment of the
Company or its Restricted Subsidiaries (including pursuant
to any sale-and-leaseback arrangement), provided, however,
that the exclusion from Adjusted Consolidated Net Income of
gains described in this clause (iv) shall not apply to
deferred gains resulting from sale-and-leaseback arrange-
ments to the extent that there is an offsetting increase in
depreciation expense resulting from the recapitalization of
the related property, plant or equipment which is not sold
or otherwise disposed of in the ordinary course of business
and any gain or loss realized upon the sale or other
disposition of any Capital Stock of any person;
(v) the cumulative effect of a change in accounting
principles, including the cumulative effect of the implemen-
tation of SFAS 106 by the Company with respect to services
rendered by employees in periods prior to its implementa-
tion, but excluding any effects of such implementation with
respect to services rendered in periods following such
implementation, and excluding any one-time or cumulative
charges associated with the implementation of SFAS 109;
(vi) the cash effect of the rejection of any leases
and executory contracts pursuant to the Plan; and
(vii) the cash effect of the Company's incurring costs
(including but not limited to professional fees) in
connection with the Plan in excess of $5,750,000.
"ADJUSTED CONSOLIDATED NET WORTH" of the Company and
its Restricted Subsidiaries shall mean an amount equal to the
total amounts shown on the balance sheet of the Company and its
Restricted Subsidiaries, as of the date for which the determina-
tion is being made, as (i) the par or stated value of all out-
standing Capital Stock of the Company plus (ii) paid-in capital
or capital surplus relating to such Capital Stock plus (iii) any
retained earnings or earned surplus less (A) any accumulated
deficit, (B) any amounts attributable to Redeemable Stock,
(C) any amounts attributable to Exchangeable Stock, (D) any
amounts attributable to treasury stock and (E) adjustments
relating to pension liabilities, in all cases determined on a
consolidated basis in accordance with generally accepted
accounting principles; provided, however that to the extent such
balance sheet reflects any effects attributable to any one time
or cumulative charges associated with the implementation of SFAS
106 and 109 or any changes in accounting principles implemented
thereafter, such effects shall be disregarded; and provided,
further, that to the extent such balance sheet reflects any gain
or loss realized upon the sale or other disposition of any
property, plant or equipment of the Company or its restricted
subsidiaries after February 28, 1995 (including pursuant to a
sale-and-leaseback arrangement which is an Asset Disposition) or
upon the sale or other disposition of any Capital Stock of any
person, such gain or loss shall also be disregarded; and
provided, further that the cash effects of the rejection of any
leases or executory contracts pursuant to the Plan and the cash
effects of the Company's incurring costs (including but not
limited to professional fees) in connection with the Plan in
excess of $5,750,000 shall also be disregarded.
"ADJUSTED EBITDA" means, for any period, Adjusted
Consolidated Net Income plus (to the extent deducted in calcu-
lating Adjusted Consolidated Net Income) Adjusted Consolidated
Interest Expense, income taxes, depreciation expenses, amortiza-
tion expense, non-cash write-offs of deferred financing costs and
non-cash deductions for contributions to the ESOP (but without
giving effect to any extraordinary gain or loss) for such period.
"ADJUSTED TOTAL CAPITALIZATION" shall mean, without
duplication, Adjusted Consolidated Net Worth plus Indebtedness of
the Company and its Restricted Subsidiaries, consolidated in
accordance with generally accepted accounting principles.
"ASSET DISPOSITION" shall mean any sale, lease, trans-
fer or other disposition (or series of related sales, leases,
transfers or dispositions) of shares of Capital Stock of a
Subsidiary (other than directors' qualifying shares), property or
other assets (each referred to for the purposes of this defini-
tion as a "disposition") by the Company or any of its Subsidi-
aries, other than (i) a disposition by a Subsidiary to the
Company or by the Company or a Subsidiary to a Wholly Owned
Subsidiary that is a Restricted Subsidiary, (ii) a disposition of
property or assets at fair market value in the ordinary course of
business, (iii) a disposition of obsolete or worn out assets in
the ordinary course of business, (iv) a disposition subject to
and made in accordance with Section 3.01 of the Indenture, or
(v) a disposition subject to Section 4.06 of the Indenture.
"AVAILABLE CASH FLOW" for the most recent four-quarter
period ended prior to the date on which a determination is being
made, shall mean Adjusted EBITDA minus (i) cash income taxes paid
or payable during such period and (ii) the amount of Capital
Expenditures (other than any non-cash Capital Expenditures) of
the Company and its Restricted Subsidiaries during such period.
"BANK" shall mean U.S. National Bank of Oregon, any
successors thereto, or the representative or agent for any
successor bank group or groups providing long-term bank financing
for the Company from time to time.
"CAPITAL EXPENDITURES" shall mean, for any period, the
sum of all expenditures for fixed or capital assets (including,
without limitation, expenditures for maintenance and repairs
which should be capitalized in accordance with generally accepted
accounting principles and Capital Lease Obligations), but not
including expenditures for the acquisition of assets or other
property pursuant to Section 4.27 of the Indenture.
"CAPITAL LEASE OBLIGATION" of any Person shall mean the
obligations of such Person to pay rent or other amounts under a
lease that is required to be capitalized for financial reporting
purposes in accordance with generally accepted accounting princi-
ples; and the amount of such obligation shall be the capitalized
amount thereof determined in accordance with generally accepted
accounting principles.
"CONTINGENT OBLIGATION" as applied to any Person means
any direct or indirect liability, contingent or otherwise, of
that Person with respect to any indebtedness, lease, dividend, or
other obligation of another, or any letter of credit, including,
without limitation, any such obligation directly or indirectly
guaranteed, endorsed (other than for collection or deposit in the
ordinary course of business), co-made or discounted or sold with
recourse by that Person, or in respect of which that Person is
otherwise directly or indirectly liable, including, without
limitation, any such obligation for which that Person is in
effect liable through any agreement (contingent or otherwise) to
purchase, repurchase, or otherwise acquire such obligation or any
security therefor, or to provide funds for the payment or
discharge of such obligation (whether in the form of loans,
advances, stock purchases, capital contributions, or otherwise),
or to maintain the solvency of any balance sheet, income, or
other financial condition of the obligor of such obligation, or
to make payment for any products, materials or supplies or for
any transportation, services, or lease regardless of the
nondelivery or nonfurnishing thereof, in any such case if the
purpose or intent of such agreement is to provide assurance that
such obligation will be paid or discharged, or that any agree-
ments relating thereto will be complied with, or that the holders
of such obligation will be protected (in whole or in part)
against loss in respect thereof. The amount of any Contingent
Obligation shall be equal to the amount of the obligation so
guaranteed or otherwise supported.
"CREDIT AGREEMENT" shall mean the Credit Agreement
dated as of February 3, 1993, between the Company and United
States National Bank of Oregon, as amended through the date
hereof and as the same may be amended from time to time.
"DEFAULT" shall mean the occurrence of any event which,
upon notice or lapse of time or both, would become an Event of
Default under the Indenture or this Agreement.
"INDEBTEDNESS" of any Person shall mean, without
duplication, (a) all indebtedness of such Person for borrowed
money or for the deferred purchase price of property or services;
(b) except to the extent supporting Indebtedness of such Person
(but no other indebtedness) of the type described in clause (a)
above, the face amount of all letters of credit issued for the
account of such Person and, without duplication, all drafts drawn
thereunder; (c) all liabilities secured by any Lien on any prop-
erty owned by such Person, whether or not such indebtedness has
been assumed; (d) all Capital Lease Obligations; and (e) all
Contingent Obligations of such Person.
"LIEN" shall mean any mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or
other), or preference, priority or other security agreement of
any kind or nature whatsoever (including, without limitation, any
conditional sale or other title retention agreement and any
financing lease having substantially the same effect as any of
the foregoing).
"NET AVAILABLE CASH": The term "Net Available Cash"
from an Asset Disposition means Cash payments received (including
any Cash payments received by way of deferred payment of princi-
pal pursuant to a note or installment receivable or otherwise,
but only as and when received, but excluding any other considera-
tion received in the form of assumption by the acquiring Person
of Indebtedness or other obligations relating to such properties
or assets or received in any other non-Cash form) therefrom, in
each case net of all legal, title and recording tax expenses,
commissions and other fees and expenses incurred, and all
federal, state, provincial, foreign and local taxes required to
be accrued as a liability under generally accepted accounting
principles, as a consequence of such Asset Disposition, and in
each case net of all payments made on any Indebtedness which is
secured by any assets subject to such Asset Disposition, in
accordance with the terms of any Lien upon or other security
agreement of any kind with respect to such assets, or which must
by its terms, or in order to obtain a necessary consent to such
Asset Disposition, or by applicable law be repaid out of the
proceeds from such Asset Disposition, and net of all distribu-
tions and other payments required to be made and actually made to
minority interest holders in Subsidiaries or joint ventures as a
result of such Asset Disposition.
"NET CASH" of the Company and its Restricted Subsidi-
aries on a consolidated basis, as of any date, shall mean the
amount shown on the consolidated balance sheet of the Company and
its Restricted Subsidiaries as cash as of such date (but not
including cash held in accounts or deposits that are subject to
any lien, encumbrances or restrictions or which is required to be
held in connection with any agreements or obligations), computed
in accordance with generally accepted accounting principles, plus
the total amount of cash payments which the Company has made as
of the date of computation for redemption or prepayment of
Series A Bonds pursuant to clauses (y) and (z) of the second
paragraph of Section 9(b) hereof, minus the amount of
Indebtedness outstanding on such date under the Credit Agreement
(or any Indebtedness issued in any refinancing, refunding,
replacement, extension or restructuring thereof), other than any
Indebtedness representing undrawn amounts under letters of credit
under the Credit Agreement (or any Indebtedness issued in any
refinancing, refunding, replacement, extension or restructuring
thereof) not in excess of $10,000,000 in the aggregate; provided,
however, that Net Cash shall not be less than zero.
"PREFERRED STOCK," as applied to the Capital Stock of
any corporation, means Capital Stock of any class or classes
(however designated) which is preferred as to the payment of
dividends, or as to the distribution of assets upon any voluntary
or involuntary liquidation or dissolution of such corporation,
over shares of Capital Stock of any other class of such
corporation.
"PRO FORMA DEBT SERVICE," for any period, shall mean
the sum of (i) Adjusted Consolidated Interest Expense (excluding
any non-cash items included in Adjusted Consolidated Interest
Expense to the extent no current liability exists with respect
thereto) that would be payable during such period by the Company
and its Restricted Subsidiaries assuming (x) that all Indebted-
ness outstanding on the last day of the quarter prior to the
period for which the determination is being made were outstanding
throughout such period (other than scheduled payments of
principal to the extent included in clause (ii) hereof), and
(y) that, with respect to any floating rate or other Indebted-
ness, the interest rate in effect on the date of such determina-
tion were in effect throughout such period, but giving effect to
any scheduled increase or decrease in interest rate that is
ascertainable on the date of determination, and (ii) the amount
of principal payments payable during such period (and any inter-
est payable during such period on such principal amounts to the
extent not included in clause (i) hereof) on all Indebtedness of
the Company and its Restricted Subsidiaries, in each case consol-
idated in accordance with generally accepted accounting
principles.
"PROSPECTUS" shall mean the final Prospectus with
respect to the first public sale of the Series B Bonds, as filed
with the SEC under Rule 424.
"REDEEMABLE STOCK" means any Capital Stock (excluding
Capital Stock which has been or is hereafter sold or issued to an
employee stock ownership plan) that by its terms or otherwise is
required to be redeemed on or prior to the first anniversary of
the Stated Maturity of the Series A Bonds or is redeemable at the
option of the holder thereof at any time on or prior to the first
anniversary of the Stated Maturity of the Series A Bonds.
"RELEVANT DOCUMENT" shall have the meaning set forth in
Section 2(b) hereof.
"RESTRICTED SUBSIDIARY" shall mean all Subsidiaries of
the Company other than Unrestricted Subsidiaries.
"SENIOR DEBT" of the Company and its Restricted
Subsidiaries shall mean all Indebtedness of the Company and its
Restricted Subsidiaries, consolidated in accordance with gener-
ally accepted accounting principles, other than Subordinated
Debt.
"SUBORDINATED DEBT" shall mean the Old Subordinated
Debentures, the New Subordinated Debentures, any other unsecured
Indebtedness for money borrowed of the Company which
(i) on the date on which the status of such Indebted-
ness is determined for any purpose hereof,
(1) has a final maturity not earlier than
September 1, 2005, and
(2) is not subject to payment, redemption or
other retirement by means of any installment, sinking
fund, serial maturity or other required payments prior
to September 1, 2005; and
(ii) is issued or assumed pursuant to, or evidenced
by, an indenture or other instrument that contains provi-
sions for the subordination of such Indebtedness (to which
appropriate reference shall be made in the instruments
evidencing such Indebtedness if not contained therein) to
the Series A Bonds and the Series B Bonds (and, at the
option of the Company, if so provided, to other Indebtedness
of the Company, either generally or as specifically desig-
nated) on the terms, including related definitions, set
forth in Schedule III attached hereto.
"SUBSIDIARY" of any Person shall mean and include
(a) 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 (irrespec-
tive of whether or not at the time stock of any class or classes
of such corporation will 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 or through Subsidiaries and
(b) any partnership, association, joint venture or other entity
in which such Person, directly or through Subsidiaries, has a
more than 50% equity interest at the time.
"TITLE COMPANY" shall mean Ticor Title Insurance
Company.
"UNRESTRICTED SUBSIDIARY" shall mean any Subsidiary of
the Company which is created or acquired by the Company or any
Subsidiary of the Company after the date hereof and is designated
an Unrestricted Subsidiary by the Company's Board of Directors at
the time of such creation or acquisition.
SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE
COMPANY. The Company hereby represents and warrants as follows:
(a) CORPORATE STATUS. Each of the Company and its
Subsidiaries (i) is a duly organized and validly existing
corporation in good standing under the laws of the jurisdic-
tion of its incorporation, (ii) has the power and authority
to own its property and assets and to transact the business
in which it is engaged and (iii) is duly qualified as a
foreign corporation and in good standing in each jurisdic-
tion where the ownership, lease or operation of property or
the conduct of its business requires such qualification
except where the failure to be so qualified would not have a
material adverse effect on the business, operations, prop-
erty, condition (financial or otherwise) or immediate
prospects of the Company and its Restricted Subsidiaries
taken as a whole.
(b) CORPORATE POWER AND AUTHORITY. The Company has
the corporate power to execute, deliver and carry out the
terms and provisions of this Agreement, the Security Docu-
ments, the Indenture, the Plan, and the documents
contemplated by the Plan to be executed and delivered by the
Company (collectively, the "Relevant Documents") and has
taken all necessary corporate action to authorize the
execution, delivery and performance by it of each of the
Relevant Documents. The Company has duly executed and
delivered each of the Relevant Documents, and each of the
Relevant Documents constitutes its legal, valid and binding
obligation enforceable in accordance with its respective
terms.
(c) NO CONTRAVENTION. Neither the execution, delivery
or performance by the Company of the Relevant Documents nor
compliance by it with the terms and provisions thereof,
(i) will contravene any applicable provision of any law,
statute, rule, regulation, order, writ, injunction or decree
of any court or governmental instrumentality or (ii) will
conflict or be inconsistent with or result in any breach of
any of the terms, covenants, conditions or provisions of, or
constitute a default under, or result in the creation or
imposition of (or the obligation to create or impose) any
Lien (except pursuant to the Security Documents) upon any of
the property or assets of the Company or any of its
Subsidiaries pursuant to the terms of any indenture,
mortgage, deed of trust, agreement or other instrument to
which the Company or any of its Subsidiaries is a party or
by which it or any of its property or assets is bound, or
(iii) will violate any provision of the Certificate of
Incorporation or By-Laws of the Company or any of its
Subsidiaries.
(d) LITIGATION. There are no actions, suits or
proceedings pending or, to the best of the knowledge of the
Company, threatened (i) with respect to any Relevant Docu-
ment or (ii) that are reasonably likely to materially and
adversely affect the operations, business, property, assets,
condition (financial or otherwise) or immediate prospects of
the Company and its Restricted Subsidiaries taken as a
whole.
(e) ABSENCE OF DEFAULTS. As of the date of this
Second Amended and Restated Investment Agreement, there
exists no Default or Event of Default under the Indenture or
this Second Amended and Restated Investment Agreement.
(f) GOVERNMENTAL APPROVALS. No order, consent,
approval, license, authorization, or validation of, or
filing, recording or registration with (except as have been
obtained or made), or exemption by, any governmental or
public body or authority, or any subdivision thereof, is
required to authorize, or is required in connection with
(i) the execution, delivery and performance of any Relevant
Document or (ii) the legality, validity, binding effect or
enforceability of any Relevant Document, other than the
qualification of the Indenture under the Trust Indenture Act
of 1939, as amended and the registration of the Bonds under
the Securities Act of 1933, as amended, or under any state
securities laws.
(g) SECURITY INTERESTS. Each of the Security Agree-
ment and Cash Collateral Pledge Agreement creates, as
security for the Indebtedness and Obligations referred to
therein, a valid and enforceable security interest in and
Lien on all of the Collateral (as defined in the Security
Agreement) and Pledged Collateral (as defined in the Cash
Collateral Pledge Agreement), respectively, in favor of the
Trustee for the benefit of the holders from time to time of
the Series A Bonds and the Series B Bonds, which is
perfected and superior to and prior to the rights of all
third Persons. Each Mortgage creates, as security for the
Mortgage Indebtedness and Obligations referred to therein, a
valid and enforceable first priority mortgage lien on all of
the Mortgaged Property referred to therein (except for the
Mortgage with respect to the Company's Fogelsville,
Pennsylvania property, which creates a second priority
mortgage lien), in favor of the Trustee for the benefit of
the holders from time to time of the Series A Bonds and the
Series B Bonds, subject only to Permitted Encumbrances.
(h) COMPLIANCE WITH ERISA. All Plans except any
multiemployer plan (as defined in Section 4001(a)(3) of the
Employee Retirement Income Security Act of 1974, as amended
("ERISA")), are in substantial compliance with ERISA, no
Plan is insolvent or in reorganization, no Plan has an
accumulated or waived funding deficiency or has applied for
an extension of any amortization period within the meaning
of Section 412 of the Internal Revenue Code of 1986 (the
"Code"), neither the Company, any Subsidiary of the Company
nor any ERISA Affiliate has incurred any liability to or on
account of a Plan which is a single-employer plan as defined
in Section 4001(a)(15) of ERISA pursuant to Section 4062,
4063, or 4064 of ERISA, or a multiemployer plan pursuant to
Section 515, 4201 or 4204 of ERISA, which remains unsatis-
fied, no proceedings have been instituted to terminate any
Plan, and no condition exists which presents a material risk
to the Company and its Restricted Subsidiaries, taken as a
whole, of either incurring a liability to or on account of a
Plan pursuant to any of the foregoing sections of ERISA or
the Code. Any representation in the immediately preceding
sentence with respect to any Plan which is a multiemployer
plan (other than a representation with respect to liability
under Section 515, 4201 or 4204 of ERISA) is to the
knowledge of the Company. As of the date of this Agreement,
the aggregate present value of all accrued benefits of all
Plans which are single-employer plans did not exceed the
aggregate current value of all assets of such Plans based
upon estimated actuarial data as of March 1, 1991, provided
to the Company by the consulting actuaries of the Plans, by
more than $300,000 and there has been no material change in
such liability. As of the date of this Agreement, the
aggregate present value of unfunded contingent withdrawal
liability under Title IV of ERISA attributable to the
Company or any of its Subsidiaries does not exceed
$1,500,000, based upon the most recent records with respect
to such contingent withdrawal liability provided to the
Company. To the knowledge of the Company, neither the
Company nor any Subsidiary of the Company has incurred any
liability (including any contingency or secondary liability)
to or on account of a Predecessor Plan.
As used in this Section 2(h):
"ERISA AFFILIATE" shall mean any person (as defined
in Section 3(9) of ERISA) (including each trade or
business (whether or not incorporated)) which together
with the Company or any Subsidiary of the Company would
be deemed to be a "single employer" or a member of the
same "controlled group" of "contributing sponsors"
within the meaning of Section 4001 of ERISA,
"PLAN" shall mean any multiemployer plan or
single-employer plan, as defined in Section 4001 and
subject to Title IV of ERISA, which is maintained for
employees of the Company or by a Subsidiary of the
Company or an ERISA Affiliate, and
"PREDECESSOR PLAN" shall mean any multiemployer plan
or single-employer plan as defined in Section 4001 and
subject to Title IV of ERISA, which was maintained for
employees of any members of the controlled group of
employers with or of which the Company or a Subsidiary
of the Company is or was a member.
(i) [DELETED]
(j) LEGAL REQUIREMENTS. Each Mortgaged Property (and
the Company in respect thereof) is in compliance with all
Legal Requirements (as such term is defined in the Mortgage
covering such Mortgaged Property)
(k) SUBSIDIARIES. The corporations listed on
Schedule I are the only Subsidiaries of the Company. Said
Schedule correctly sets forth the percentage ownership
(direct and indirect) of the Company in each of its
Subsidiaries and the identity of the direct owner thereof.
Each such Subsidiary is a Restricted Subsidiary.
(l) PATENTS, LICENSES, FRANCHISES AND FORMULAS. The
Company and its Subsidiaries own all of the patents, trade-
marks, permits, service marks, trade names, copyrights,
licenses, franchises and formulas, or rights with respect to
the foregoing, and has obtained assignments of all leases
and other rights of whatever nature, necessary for the
present conduct of its business, without any known conflict
with the rights of others which, or the failure to obtain
which, as the case may be, would result in a material
adverse effect on the business, operations, property or
financial or other conditions of the Company or any of its
Subsidiaries.
(m) STORAGE CONTRACTS. Except as set forth in
Schedule II hereto as of the date of this Agreement, neither
the Company nor any of its Subsidiaries is party to any
contract (other than a lease) obligating the Company or any
such Subsidiary to provide to any Person storage services at
any Mortgaged Property for a period of more than one year
from the date of such contract.
SECTION 3. [Deleted.]
SECTION 4. FINANCIAL STATEMENTS AND INFORMATION. The
Company will furnish to the Investor in duplicate:
(a) as soon as available and in any event within
45 days after the end of the first, second and third
quarterly accounting periods in each fiscal year of the
Company, a consolidated balance sheet of the Company and its
Subsidiaries as of the end of such quarterly period and the
related consolidated statements of operations, stockholders'
equity and cash flows of the Company and its Subsidiaries
for such quarterly period and (in the case of the second and
third quarterly periods) for the portion of the fiscal year
ended with the last day of such quarterly period, all in
reasonable detail and stating in comparative form the
respective consolidated figures for the appropriate
corresponding dates and periods in the previous fiscal year
and all certified by the chief financial officer or
treasurer of the Company to present fairly the information
contained therein in accordance with generally accepted
accounting principles (except as to year-end and audit
adjustments);
(b) as soon as available and in any event within
90 days after the end of each fiscal year of the Company,
(i) a consolidated balance sheet of the Company
and its Subsidiaries as of the end of such fiscal year
and the related consolidated statements of operations,
stockholders' equity and cash flows of the Company and
its Subsidiaries for such fiscal year, all in reason-
able detail and stating in comparative form the respec-
tive consolidated figures as of the end of and for the
previous fiscal year and all accompanied by a report
thereon of KPMG Peat Marwick, or other independent
public accountants of recognized national standing
selected by the Company, and
(ii) a written statement of the accountants
referred to in clause (i) above stating that in making
the examination necessary for their report on such
financial statements they obtained no knowledge of any
Default or Event of Default under this Agreement or the
Indenture or, if such accountants shall have obtained
knowledge of any such Default or Event of Default,
specifying the nature and status thereof;
(c) concurrently with the financial statements
furnished pursuant to clauses (a) and (b) of this section,
(i) a written statement of the chief financial
officer or treasurer of the Company setting forth
computations in reasonable detail showing as at the end
of such quarterly or annual period, as the case may be,
(x) whether there was compliance with Sections 6(c),
6(d) and 6(e) hereof and with Sections 9.09, 9.10 and
9.11 of the Credit Agreement incorporated by reference
herein pursuant to Section 6(a) hereof (or any corres-
ponding covenants incorporated by reference herein
pursuant to Section 6(b) hereof), and (y) the calcula-
tions by which the information required to make the
determinations required by (x) was derived from the
financial statements furnished pursuant to (a) and (b)
of this section,
(ii) a certificate of the President or the chief
financial officer or treasurer of the Company stating
that, based upon such examination or investigation and
review of this Agreement and the Indenture as in the
opinion of the signer is necessary to enable the signer
to express an informed opinion with respect thereto, no
Default or Event of Default under this Agreement or the
Indenture exists or has existed during such period, or,
if such a Default or Event of Default shall exist or
have existed, specifying the nature and period of
existence thereof and what action the Company has
taken, is taking or proposes to take with respect
thereto, and
(iii) a certificate from the accountants referred
to in paragraph (b)(i) above to the effect that they
have reviewed the annual computations referred to in
clause (c)(i) above and such computations were
accurately prepared;
(d) promptly, and in any event within five Business
Days after any executive officer of the Company obtains
knowledge thereof, notice of (i) the occurrence of any event
which constitutes a Default or Event of Default under this
Agreement or the Indenture, (ii) any litigation or govern-
mental proceedings pending (x) against the Company or any
Subsidiary of the Company which is likely to materially and
adversely affect the operations, business, property, assets,
condition (financial or otherwise) or prospects of the
Company and its Restricted Subsidiaries taken as a whole or
(y) with respect to any Relevant Document and (iii) any
other event which is likely to materially and adversely
affect the financial condition, operations or prospects of
the Company or any Restricted Subsidiary of the Company;
(e) promptly after the Company's receipt thereof, a
copy of any "management letter" received by the Company from
its independent public accountants;
(f) promptly after the same are available, copies of
all such proxy statements, financial statements and reports
as the Company or any Subsidiary of the Company shall send
or make available generally to the Bank under the Credit
Agreement or to the trustee in respect of the Old
Subordinated Debentures or New Subordinated Debentures, and
copies of all regular and periodic reports and of all
registration statements (other than on Form S-8 or a similar
form) which the Company may file with the SEC; and
(g) such other information as the Investor may from
time to time reasonably request.
SECTION 5. INSPECTION OF PROPERTIES AND BOOKS. The
Investor, at its own expense, shall have the right to visit and
inspect any of the properties of the Company and any Subsidiary
of the Company, to examine the books of account and records of
the Company and such Subsidiary, to make or be provided with
copies and extracts therefrom, to discuss the affairs, finances
and accounts of the Company and such Subsidiary with, and to be
advised as to the same by, its and their officers, and its and
their independent public accountants (and by this provision the
Company authorizes said accountants to discuss such affairs,
finances and accounts whether or not a representative of the
Company or any Subsidiary of the Company is present) all at such
reasonable times and intervals as the Investor may desire, it
being understood that the Company will pay any fees of such
accountants incurred by it in connection with the Investor's
exercise of rights pursuant to this section.
SECTION 6. COVENANTS OF THE COMPANY. The Company
hereby covenants and agrees as follows:
(a) So long as the Credit Agreement shall be in
effect, all negative covenants contained in Article IX of
the Credit Agreement, except those contained in Section 9.07
(transactions with affiliates) and 9.13 thereof, together
with all related definitions contained in said Credit
Agreement, shall be deemed to be hereby incorporated by
reference and reaffirmed herein, MUTATIS MUTANDIS, for the
benefit of the Investor (with all references to the Agent or
the Banks deemed to be references to the Investor).
(b) If at any time the Credit Agreement (or any
successor thereto) is refinanced or replaced by other bank
financing, any and all negative covenants and definitions
which are included in any agreement with respect to such new
financing facility and which correspond to those incorpo-
rated by reference in Section 6(a) hereof shall, for so long
as such agreement or agreements is or are in effect, be
incorporated by reference and reaffirmed herein, MUTATIS
MUTANDIS, for the benefit of the Investor.
(c) The Company will not permit Adjusted Consolidated
Net Worth at any time to be less than the amount set forth
below opposite the period in which the measurement is made:
Fiscal Year(s) Ended February Amount
----------------------------- ------
1996 ($37,000,000)
1997 ($36,000,000)
1998 ($34,000,000)
1999 ($32,000,000)
2000 ($28,000,000)
2001 ($25,000,000)
2002 ($19,000,000)
2003 ($10,000,000)
(d) The Company will not permit the ratio of Senior
Debt to Adjusted Total Capitalization at any time to be
greater than the following amounts:
Fiscal Year(s) Ended February Required Ratio
----------------------------- --------------
1996 86.0%
1997 86.0%
1998 85.0%
1999 85.0%
2000 84.0%
2001 81.0%
2002 79.0%
2003 77.0%
(e) The Company will not permit the ratio of (i) the
sum of Available Cash Flow for the period consisting of the
four quarters most recently ended plus Net Cash to (ii) Pro
Forma Debt Service for the period consisting of (x) if such
determination is made on a day which is the last day of a
quarter, the four following quarters or (y) if such determi-
nation is made on any other day, the quarter in which a
determination is being made and the three following
quarters, at any time to be less than:
Fiscal Year Ended February Ratios
-------------------------- ------
1996 1.00 to 1.00
1997 1.10 to 1.00
1998 1.20 to 1.00
1999 .95 to 1.00
2000 .70 to 1.00
2001 .65 to 1.00
2002 .66 to 1.00
2003 1.00 to 1.00
(f) The Company will not create or permit to exist any
security interest in any contract (other than a lease) of
the Company or any Restricted Subsidiary obligating any
customer of the Company or such Restricted Subsidiary to use
storage services available at any Mortgaged Property for a
period of more than one year from the date of such contract.
(g) In connection with the Fogelsville, Pennsylvania
Mortgaged Property, the Company will upon the earlier of
(i) 60 days' prior written notice from the Investor or
(ii) the occurrence of an event of default under the
existing first mortgage on such property, either (A)(1)
prepay in full such existing first mortgage or (2) acquire
such existing first mortgage and subordinate such mortgage
to the Mortgage on such Property securing the Series A Bonds
and the Series B Bonds, in either case the effect of which
shall be to cause the Mortgage on such Property securing
such Bonds to constitute a first priority mortgage lien in
favor of the Trustee or (B) deposit with the Trustee
pursuant to the Cash Collateral Pledge Agreement a sum equal
to (x) 110 percent of the then current principal balance of
the first mortgage plus (y) accrued interest on such
principal balance through the date of such deposit; provided
that if for any reason the Investor shall acquire the debt
secured by such first mortgage, any amounts so expended by
the Investor shall be added to the Indebtedness secured
under the indenture. In the event the Company makes the
deposit as provided in (B) above, the Company will be
entitled at the end of each of the Company's fiscal quarters
to have released by the Trustee to the Company all cash
collateral deposited under (B) above, including any accrued
interest earned on such cash collateral, to the extent such
collateral exceeds the sum of the amounts set forth in
clauses (x) and (y) above as of the end of such quarter, and
the Company will be entitled to have all of such cash
collateral released of record when the first mortgage has
been indefeasibly legally satisfied or released, or when the
Company shall have acquired and subordinated the first
mortgage as provided in (A) above.
(h) (i) The Company shall not, and shall not permit
any Restricted Subsidiary, directly or indirectly, to
(w) declare or pay any dividend or make any distribution on
or in respect of its Capital Stock (including any distribu-
tion in connection with any merger or consolidation
involving the Company) or to the direct or indirect holders
of its Capital Stock (except dividends or distributions
payable solely in its Non-Convertible Capital Stock or in
options, warrants or other rights to purchase its Non-
Convertible Capital Stock and except dividends or distribu-
tions payable to the Company or a Restricted Subsidiary),
(x) purchase, redeem or otherwise acquire or retire for
value any Capital Stock of the Company or of any direct or
indirect Parent of the Company, (y) purchase, repurchase,
redeem, defease or otherwise acquire or retire for value,
prior to scheduled maturity, scheduled repayment or
scheduled sinking fund payment any Subordinated Debt (other
than the purchase, repurchase or other acquisition of
Subordinated Debt purchased in anticipation of and used for
satisfying a sinking fund obligation, principal installment
or final maturity, in each case due within one year of the
date of acquisition) or (z) make any Investment in any
Affiliate of the Company, other than a Restricted Subsidiary
or a Person which will become a Restricted Subsidiary as a
result of any such Investment (any such dividend, distribu-
tion, purchase, redemption, repurchase, defeasance, other
acquisition, retirement or Investment being hereinafter
referred to as a "Restricted Payment") if at the time the
Company or such Restricted Subsidiary makes such Restricted
Payment:
(A) a Default shall have occurred and be
continuing (or would result therefrom);
(B) the Company is not able to issue $1.00 of
additional Debt in accordance with the provisions of
Section 4.09(a) of the Indenture; or
(C) the aggregate amount of such Restricted
Payment and all other Restricted Payments since the
date on which the Series B Bonds were originally
issued, would exceed the sum of:
(1) 50% of the Adjusted Consolidated Net
Income of the Company and its Restricted
Subsidiaries accrued during the period (treated as
one accounting period) from December 1, 1992 to
the end of the most recent fiscal quarter ending
at least 45 days prior to the date of said
Restricted Payment (or, in case such Adjusted
Consolidated Net Income of the Company and its
Restricted Subsidiaries shall be a deficit, minus
100% of such deficit) and minus 100% of the amount
of any write-downs, write-offs, other negative
revaluations and other negative extraordinary
charges not otherwise reflected in Adjusted
Consolidated Net Income of the Company and its
Restricted Subsidiaries during such period;
(2) the aggregate Net Cash Proceeds received
by the Company from the issuance and sale of its
Capital Stock (other than Redeemable Stock or
Exchangeable Stock) subsequent to the date on
which the Series B Bonds were originally issued
(other than an issuance or sale to a Subsidiary or
an employee stock ownership plan);
(3) the aggregate Net Cash Proceeds received
by the Company from the issuance or sale of its
Capital Stock (other than Redeemable Stock or
Exchangeable Stock) to an employee stock ownership
plan subsequent to May 31, 1992, but (if such
employee stock ownership plan incurs any Debt)
only to the extent that any such proceeds are
equal to any increase in the Consolidated Net
Worth of the Company and its Restricted Subsidi-
aries resulting from principal repayments made by
such employee stock ownership plan with respect to
Debt incurred by it to finance the purchase of
such Capital Stock; and
(4) the amount by which Debt of the Company
and its Restricted Subsidiaries is reduced on the
consolidated balance sheet of the Company and its
Restricted Subsidiaries upon the conversion or
exchange (other than by a Restricted Subsidiary)
subsequent to the date on which the Series B Bonds
were originally issued of any Debt of the Company
or any Restricted Subsidiary convertible or
exchangeable for Capital Stock (other than
Redeemable Stock or Exchangeable Stock) of the
Company or any Restricted Subsidiary (less the
amount of any Cash, or other property, distributed
by the Company or any Restricted Subsidiary upon
such conversion or exchange).
(ii) The provisions of Section 6(h)(i) shall not prohibit:
(A) any purchase or redemption of Capital Stock
or Subordinated Debt of the Company made by exchange
for, or out of the proceeds of the substantially
concurrent sale of, Capital Stock of the Company (other
than Redeemable Stock or Exchangeable Stock and other
than Capital Stock issued or sold to a Subsidiary or an
employee stock ownership plan); PROVIDED, HOWEVER, that
(1) such purchase or redemption shall be excluded in
the calculation of the amount of Restricted Payments
made since the date the Series B Bonds were originally
issued and (2) the Net Cash Proceeds from such sale
shall be excluded from clauses (C)(2) and (C)(3) of
Section 6(h)(i);
(B) any purchase or redemption of Subordinated
Debt of the Company made by exchange for, or out of the
proceeds of the substantially concurrent sale of,
Subordinated Debt of the Company; PROVIDED, HOWEVER,
that such purchase or redemption shall be excluded in
the calculation of the amount of Restricted Payments
made since the date the Series B Bonds were originally
issued;
(C) dividends paid within 60 days after the date
of declaration thereof if at such date of declaration
such dividend would have complied with Section 6(h)(i);
PROVIDED, HOWEVER, that at the time of payment of such
dividend, no other Default shall have occurred and be
continuing (or result therefrom); PROVIDED FURTHER,
HOWEVER, that such dividend shall be included in the
calculation of the amount of Restricted Payments made
since the date the Series B Bonds were originally
issued;
(D) any repurchase of Capital Stock of the
Company after January 1, 1993 pursuant to the terms of
the Stockholders' Agreement from officers and employees
(or their estates) of the Company or its Restricted
Subsidiaries upon death, disability or termination of
employment of such officers and employees; PROVIDED,
HOWEVER, that (1) the aggregate amount of all such
repurchases (excluding repurchases made with proceeds
of life insurance policies maintained by the Company on
such employees or officers) in any fiscal year shall
not exceed $500,000; (2) to the extent that the
aggregate amount of such repurchases (excluding
repurchases made with proceeds of life insurance
policies maintained by the Company on such employees or
officers) in any fiscal year is less than $500,000, the
difference between $500,000 and such amount may be
carried forward and applied to repurchases in
subsequent fiscal years; and (3) all such repurchases
shall be included in the calculation of the amount of
Restricted Payments made since the date the Series B
Bonds were originally issued;
(E) Cash dividends paid after January 1, 1993
with respect to the ESOP Preferred Stock; PROVIDED,
HOWEVER, that (1) the aggregate amount of all such
dividends paid in any fiscal year shall not exceed
$500,000; (2) to the extent that the aggregate amount
of such dividends paid in any fiscal year is less than
$500,000, the difference between $500,000 and such
amount may be carried forward and applied to the
payment of such dividends in subsequent fiscal years;
and (3) all such dividends shall be included in the
calculation of the amount of Restricted Payments made
since the date the Series B Bonds were originally
issued;
(F) Investments in Unrestricted Subsidiaries, not
to exceed, in the aggregate, during the term of this
Agreement, the lesser of (1) $5,000,000 and (2)
$7,000,000 minus the amount of Restricted Payments made
pursuant to clause (G) below; PROVIDED, HOWEVER, that
all such Investments shall be excluded in the
calculation of the amount of Restricted Payments made
since the date the Series B Bonds were originally
issued; or
(G) Restricted Payments not to exceed, in the
aggregate, during the term of this Agreement, the
lesser of (l) $5,000,000 and (2) $7,000,000 minus the
amount of Investments in Unrestricted Subsidiaries made
during the term of Indenture; PROVIDED, HOWEVER, that
Restricted Payments made pursuant to this clause (H)
shall be included in the calculation of the amount of
Restricted Payments made since the date the Series B
Bonds were originally issued.
(i) The Company shall not use or commit to use any
cash for Capital Expenditures in any fiscal quarter in
excess of $10,000,000 for any single Capital Expenditure or
any related Capital Expenditures, unless (y) after giving
effect thereto the Company is in compliance with
Section 6(b) of this Agreement and (z) prior to such use or
commitment the Company has furnished to Investor internal
capital expenditure approval documentation detailing the
total cost, specifications and other information related to
such Capital Expenditure(s) and detailing the Company's
compliance with the condition in clause (y) of this
paragraph (i).
(j) Notwithstanding Section 4.12 of the Indenture the
Company shall not sell, transfer or otherwise dispose of any
shares of Capital Stock of any Restricted Subsidiary if,
after giving effect to such sale, transfer or disposition,
there exists any Default.
SECTION 7. EVENTS OF DEFAULT. An "Event of Default"
hereunder occurs if:
(a) the Company fails to pay any installment of
interest on any Series A Bond when the same becomes due and
such failure continues for a period of five days; or
(b) the Company fails to observe or perform any of its
other covenants or agreements set forth or incorporated in
this Agreement and such failure continues for a period of
30 days; or
(c) any material representation, warranty or other
statement made by or on behalf of the Company set forth or
incorporated in this Agreement shall prove to have been
false or misleading in any material respect as of the date
when made hereunder; or
(d) any event shall occur or any condition shall exist
in respect of any Indebtedness of the Company (other than
the Series A Bonds and the Series B Bonds) or a Subsidiary
of the Company in a principal (or capitalized) amount of at
least $2,500,000, or under any agreement securing or
relating to any such Indebtedness, the effect of which is to
cause or permit any holder of such Indebtedness or a trustee
to cause the acceleration of the maturity of such Indebted-
ness, or any such Indebtedness shall not have been paid at
the final maturity date thereof (as renewed or extended if
such Indebtedness shall have been renewed or extended) and
any applicable grace period shall have expired;
and in any such case the Investor notifies the Company and the
Trustee that an Event of Default has occurred hereunder.
SECTION 8. RELEASE OF COLLATERAL; ADDITIONS OF
MORTGAGED PROPERTIES TO THE TRUST ESTATE.
(a) If the Company plans to release a Mortgaged
Property or Properties from the lien of the Mortgage or Mortgages
on such Property or Properties pursuant to Section 3.01 of the
Indenture (other than in connection with the sale of economically
obsolete Mortgaged Property in accordance with the provisions of
Section 3.01(e)(i), the sale of a Mortgaged Property or Proper-
ties (or the portion of the Company's Kansas City, Kansas
Mortgaged Property used exclusively in the Company's quarry
operations) in accordance with the provisions of
Section 3.01(e)(ii), certain events of casualty, condemnation or
taxation in accordance with the provisions of Section 3.01(d),
partial releases in accordance with the provisions of
Section 3.01(f), the sale of the Brooks, Oregon or Watsonville,
California properties in accordance with the provisions of
3.01(g), or any release in accordance with the provisions of
Section 3.01(i) of the Indenture), it shall, at least 45 days
prior to the proposed date of release, provide the Investor with
a list of Mortgaged Properties including at least two more
Properties than the number proposed to be released, and shall
promptly thereafter furnish the Investor with such information
relating to such Properties as is maintained in the ordinary
course of the Company's business as the Investor shall reasonably
request. Within 30 days of its receipt of such information, the
Investor shall designate such Properties, if any, which it
believes should not be released, it being understood that (i) the
Investor shall not object to a number of Properties at least
equal to the number proposed to be released and (ii) the Investor
will not object to the release of the Brooks, Oregon Property
(assuming the release of such Property otherwise complies with
the provisions regarding the release of Properties generally).
The Company shall not have any Mortgaged Property (or the portion
of the Company's Kansas City, Kansas Mortgaged Property used
exclusively in the Company's quarry operations) released under
Section 3.01(e)(ii) of the Indenture without the approval and
consent of the Investor. The Company shall exercise its rights
under Section 3.01 of the Indenture only with respect to the
Mortgaged Properties accepted for release by the Investor as
provided in the preceding sentences of this paragraph.
(b) The Company will not substitute property for
(x) cash held by the Trustee in the case of property which is to
become subject to a first Lien on such property in accordance
with the final paragraph of Section 4.27(a) and Section 4.27(b),
or (y) Mortgaged Properties released from the lien of their
respective Mortgages pursuant to Section 3.01(e)(ii) of the
Indenture, without the prior written approval and consent of the
Investor.
SECTION 9. REQUIRED PREPAYMENTS; PREPAYMENT PRICE;
OPTIONS TO REQUIRE PURCHASE.
(a) In addition to any prepayment required by the
Indenture, the Company shall be required to prepay Series A
Bonds in the following circumstances and in the principal
amounts indicated:
(1) At any time the Company prepays any Series B
Bonds pursuant to Section 3.01(b) of the Indenture, the
Company shall, concurrently with such prepayment of
Series B Bonds, prepay the entire principal amount of
the Series A Bonds.
(2) On March 9, 1996, the Company shall prepay a
principal amount of Series A Bonds equal to the
difference, if any, between (x) $21,525,588 and (y) the
value of Mortgaged Properties acceptable to the
Investor that have become subject to the lien of a
Mortgage (or, in the case of the construction of an
addition upon property which is already subject to the
lien of a Mortgage, including but not limited to the
addition to the Issuer's Tomah, Wisconsin facility
constructed in 1994, the value of each addition, with
respect to which the conditions specified in
Section 4.27 of the Indenture for qualification of the
addition as Mortgaged Property are satisfied) after
April 12, 1995 and prior to March 9, 1996 (other than
Mortgaged Properties acquired with Cash or Government
Obligations held by the Trustee pursuant to
Section 3.01(e)(ii) of the Indenture); PROVIDED,
HOWEVER, that no such prepayment shall be required if
the difference between the amounts described above in
clauses (x) and (y) is less than $50,000.
(3) If the Company or any Affiliate of the
Company or other Person acting on behalf of the Company
acquires Series B Bonds, in open market purchases or
otherwise (excluding, however, any redemption of
Series B Bonds in accordance with the terms of the
Indenture and this Agreement that occurs concurrently
with a pro rata redemption of Series A Bonds), the
Company shall give written notice thereof to the
Investor. Such notice shall contain an offer by the
Company to prepay all of the Series A Bonds held by the
Investor and its Affiliates on a date specified in such
notice (which date shall be no less than 30 and no more
than 60 days from the date of such notice). If the
Investor shall notify the Company in writing within
20 days after receipt of such notice that the Investor
will accept such offer, the Company will prepay on the
date specified in such notice, all of the Series A
Bonds held by the Investor and its Affiliates.
(4) Upon an Asset Disposition the Company shall
apply to the prepayment of an aggregate principal
amount of Senior Debt of the Company an amount equal to
the amount of Net Available Cash not applied within
360 days of such Asset Disposition to the acquisition
of Tangible Property acceptable to the Investor. If
any Series A Bonds or Series B Bonds are to be prepaid
pursuant to this clause (4), the respective principal
amounts of any Series A Bonds and Series B Bonds to be
prepaid shall be determined PRO RATA based on the
respective principal amounts of Series A Bonds and
Series B Bonds outstanding (and not theretofore called
for redemption) on the date the prepayment is to be
made.
(5) At any time the Company exercises its legal
defeasance option or covenant defeasance option
pursuant to Article Six of the Indenture, the Company
shall, concurrently with the exercise of such option,
prepay the entire principal amount of the Series A
Bonds.
(b) With respect to any prepayment or purchase of
Series A Bonds required by paragraph (a) of this Section 9
or permitted or required under the Indenture (other than a
repurchase upon a Change of Control, a prepayment pursuant
to Section 3.01(d) of the Indenture, a redemption under
Section 3.01(g) of the Indenture in connection with a sale
of the Watsonville, California Property or any redemption or
prepayment described in clauses (x), (y) and (z) of the
following paragraph ) the Company agrees that the repurchase
or purchase price applicable to such prepayment or purchase
of such Series A Bonds shall be the greater of (i) the
prepayment price provided in Section 3.01(b) of the
Indenture with respect to the Series A Bonds for the date on
which such prepayment or purchase is to be made, if any, and
(ii) the prepayment price set forth below (expressed as a
percentage of the principal amount to be prepaid or
purchased) for the date on which such prepayment or purchase
is to be made (together with accrued interest to the date of
prepayment or purchase)
Year beginning March 1 Prepayment Price
---------------------- ----------------
1995 111.500%
1996 109.583%
1997 107.666%
1998 105.750%
1999 103.833%
2000 101.917%
2001 and thereafter 100.000%
Notwithstanding the provisions of the Indenture and the
foregoing provisions of this paragraph (b), the Investor,
for itself and its successors and assigns, agrees that the
Company shall not be required to pay any premium whatsoever,
and the Investor hereby irrevocably waives and relinquishes
the right to demand or collect any premium and agrees to
allow prepayment or redemption at 100% of the principal
amount of Series A Bonds in the following circumstances:
(x) the redemption of $10,000,000 of Series A Bonds held by
the Investor as provided in Section 14(b)(2); (y) any
optional redemption or prepayment or any redemption or
prepayment under Section 9(a)(1), (2), (3) or (4) above,
either in whole or in part, of Series A Bonds on one or more
occasions within the 18-month period immediately following
the Effective Date (as defined in the Plan); and (z) any
optional redemption or prepayment or any redemption or
prepayment under Section 9(a)(1), (2), (3) or (4) above of
additional Series A Bonds on one or more occasions up to a
total of $25,000,000 (less the amount of Series A Bonds
redeemed or prepaid within the 18-month period described in
clause (y) above), whenever such redemption shall occur.
The redemptions and prepayments described in clauses (y) and
(z) above shall be made pro rata among the holders of the
Series A Bonds based upon their respective principal amounts
held as of the date of redemption or prepayment. On or
before the Effective Date (as defined in the Plan), and in
any event prior to any sale or transfer of Series A Bonds by
the Investor, the Company and the Investor shall execute
such waivers, consents and amendments of the provisions of
Section 3.01(b) (except part (B) of the proviso at the end
of such subsection) and other related provisions of the
Indenture, and shall take such other actions, as may be
reasonably necessary under the Indenture to permit the
redemptions and prepayments described in clause (x), (y) and
(z) above and to give full effect to the agreements and
waivers provided for in this paragraph; provided, however,
that the Investor shall not be required to waive any Default
or Event of Default.
(c) Promptly and in any event within ten days after
the occurrence of any Change in Control the Company shall
give written notice thereof to the Investor. Such notice
shall contain an offer by the Company to purchase all of the
Series A Bonds held by the Investor and its Affiliates on a
date specified in such notice (which date shall be no less
than 30 and no more than 60 days from the date of such
notice). If the Investor shall notify the Company in
writing within 20 days after receipt of such notice that the
Investor will accept such offer, the Company will prepay, on
the date specified in such notice, all of the Series A Bonds
held by the Investor and its Affiliates at a purchase price
equal to 101% of the aggregate principal amount of such
Series A Bonds, plus accrued and unpaid interest, if any, to
the date of purchase.
To the extent not otherwise provided for in this Agreement, pre-
payments required under this Section 9 shall be made at the times
and upon the notice (other than as set forth above in
Section 9(c)) provided in Article Three of the Indenture.
SECTION 10. PAYMENT. Notwithstanding any provision to
the contrary in the Series A Bonds or the Indenture, the Company
will promptly and punctually pay and will cause the Trustee to
pay to the Investor in the manner and at the address provided in
Schedule V hereto (or in such other manner or at such other
address as the Investor may from time to time designate by
written notice to the Company) all amounts payable in respect of
the principal of, and premium, if any, and interest on, any
Series A Bonds then held by the Investor or any of its Affili-
ates, without any presentment thereof and without any notation of
such payment being made thereon.
In the event that the Investor or any of its Affiliates
shall sell any Series A Bonds, the Investor or such Affiliate
shall, prior to the delivery of such Series A Bonds, make or
cause to be made a notation thereon of the date to which interest
has been paid thereon and, if not theretofore made, a notation of
the extent to which payment has been made on account of the
principal thereof.
The Company has obtained the agreement of the Trustee
to be bound by the foregoing provisions of this section.
SECTION 11. INDEMNITY. Notwithstanding Section 2.07
of the Indenture, the Investor's unsecured indemnity agreement in
favor of the Company and the Trustee (and any Paying Agent or
Registrar under the Indenture) shall constitute sufficient indem-
nity for all purposes of said section in the case of mutilation,
destruction, loss or theft of any of the Series A Bonds.
SECTION 12. SURVIVAL OF REPRESENTATIONS AND
WARRANTIES. All representations and warranties of the Company
herein and in any certificates or other instruments delivered
pursuant to this Agreement shall survive the execution and
delivery of this Agreement , and shall continue in effect so long
as this Agreement is in effect.
SECTION 13. EXPENSES. The Company shall reimburse the
Investor for its reasonable out-of-pocket expenses (including
fees of Smith, Barney and fees and disbursements of Willkie
Farr & Gallagher and any other counsel) in connection with its
execution of this Agreement and its consent to the Plan. The
Company shall also reimburse the Investor for its reasonable
out-of-pocket expenses (including fees and disbursements of
counsel) in connection with any amendment or requested amendment
of, or waiver or consent or requested waiver or consent under or
with respect to, this Agreement, the Indenture, any Security
Document or any of the Series A Bonds, whether or not the same
shall become effective, and in connection with the enforcement by
the Investor of any of its rights under this Agreement, the
Indenture, any Security Document or any of the Series A Bonds.
The obligations of the Company under this section shall survive
termination of this Agreement, payment of the Series A Bonds, and
payment of the fees and expenses under Section 14(c)(4) hereof.
SECTION 14. CONSENT; CONDITIONS TO EFFECTIVENESS.
(a) Subject to the conditions in paragraph (c) of this
Section 14, the Investor hereby consents to the issuance of
the New Subordinated Debentures in exchange for the Old
Subordinated Debentures pursuant to the Plan.
(b) The Company hereby agrees on the Effective Date
(as defined in the Plan) to:
(1) pay the Investor an agreement modification
fee in an amount equal to one and one-half percent
(1.50%) of the principal amount of Series A Bonds then
held by the Investor (prior to giving effect to the
redemption required under (b)(2) below); and
(2) redeem $10,000,000 principal amount of
Series A Bonds held by the Investor without premium.
(c) The effectiveness of the amendments reflected in
this Agreement is subject to the following conditions and
such amendments shall not be effective until all of such
conditions are satisfied:
(1) the Plan shall have been confirmed and shall
have become effective;
(2) the obligations of the Company under
Section 14(b) above shall have been performed;
(3) the Investor shall have approved the form of
order approving the Disclosure Statement, the
Confirmation Order (as defined in the Plan) and the
final forms of the other documents contemplated by the
Plan, which approval shall not be unreasonably withheld
provided that the matter for which approval is sought
does not affect the terms or conditions of this
Agreement or the Series A Bonds or the treatment of the
Investor in the Plan. The Investor's approval of
matters affecting the terms and conditions of this
Agreement or the Series A Bonds or the treatment of the
Investor in the Plan may be given or withheld in the
Investor's discretion;
(4) all of Investor's expenses incurred and
billed as of the Effective Date (as defined in the
Plan) in connection with the negotiation and execution
of this Agreement (including the fees of Smith, Barney
and the fees and disbursements of Willkie Farr &
Gallagher) shall have been paid in full;
(5) the representations and warranties set forth
in Section 2 hereof shall be true in all respects, and
there shall exist no Default or Event of Default under
this Agreement or the Indenture; and
(6) the Investor shall have received such legal
opinions, such executed copies of all officers'
certificates, and copies of all other corporate
documents, consents and other documents, as it shall
reasonably require.
SECTION 15. RIGHTS CUMULATIVE. The Company
acknowledges that this Agreement provides for restrictions on the
Company and benefits for the holders of the Series A Bonds that
are in addition to the restrictions and benefits provided in the
Indenture. To the extent any action prohibited by this Agreement
would be permitted by the Indenture, or to the extent this Agree-
ment would require any action not required by the Indenture, this
Agreement shall govern.
SECTION 16. PARTIAL TERMINATION. Sections 6, 7, 8 and
9 of this Agreement shall terminate if either (a) at any time the
Investor and its Affiliates do not own at least 25% of the
outstanding principal amount of Series A Bonds or (b) at any time
the Investor shall hold less than $25 million in aggregate
principal amount of the Series A Bonds provided that for the
purposes of this clause (b) only, any Series A Bonds that have
been redeemed or prepaid pursuant to the Indenture (other than
pursuant to Section 3.01(d), Section 3.01(g) in connection with a
sale of the Watsonville, California Property or Section 3.06
thereof) or prepaid hereunder shall be deemed to remain
outstanding and, if held by the Investor at the time of such
redemption or prepayment, shall be deemed to be held by the
Investor. All other provisions of this Agreement shall survive
so long as the Investor or any of its Affiliates holds any Series
A Bonds. This Agreement shall terminate when neither the
Investor nor any of its Affiliates continues to hold any Series A
Bonds.
SECTION 17. SUCCESSORS. This Agreement shall inure to
the benefit of and be binding upon (a) the Company and its succes-
sors and assigns and (b) the Investor and its successors and
assigns through merger, consolidation or other corporate
reorganization or by transfer of Series A Bonds to any Subsidiary
of the Investor, but not through any purchase or sale of Series A
Bonds by or to any Person which is not a Subsidiary of the
Investor; provided, however, that the second paragraph of
Section 9(b) shall be binding upon all successors and assigns of
the Investor.
SECTION 18. CONSTRUCTION. This Agreement shall be
construed and enforced in accordance with the substantive laws of
the State of New York.
SECTION 19. AMENDMENTS. No change, modification,
waiver, discharge, amendment or addition to this Agreement shall
be binding unless it is in writing and signed by the Company and
the Investor.
SECTION 20. NOTICES. Any notice required to be given
in writing by any party to this Agreement shall be mailed by
registered or certified mail, return receipt requested, postage
and fees prepaid, and addressed as follows:
If addressed to the Company:
Americold Corporation
Attention: Joel M. Smith
7007 SW Cardinal Lane, Suite 135
Portland, Oregon 97224
with a copy to:
Bruce G. Berning
Tonkon, Torp, Galen, Marmaduke & Booth
1600 Pioneer Tower
888 SW Fifth Avenue
Portland, Oregon 97204
If addressed to the Investor:
Metropolitan Life Insurance Company
Attention: Treasurer
One Madison Avenue
New York, New York 10010
with a copy to:
Metropolitan Life Insurance Company
Attention: Vice President
2601 Main Street, Suite 1210
Irvine, California 92714
and with a copy to:
Metropolitan Life Insurance Company
Workout Unit
200 Park Avenue
21st Floor
New York, New York 10166
Any party may, by notice in writing to the other, change the name
and address to which notices or other communications to him shall
be mailed. Any such notice shall be effective four business days
after the date of mailing by first-class, registered or certified
mail, return receipt requested, postage and fees prepaid.
SECTION 21. HEADINGS. The section and other headings
contained in this Agreement are for reference purposes only and
shall not affect the interpretation of this Agreement.
SECTION 22. COUNTERPARTS. This Agreement may be
executed in several counterparts, each of which shall be deemed
an original but all of which together shall constitute one and
the same instrument.
IN WITNESS WHEREOF, the parties hereto have duly
executed this Agreement on the day and year first above written.
AMERICOLD CORPORATION
By /s/ Lon V. Leneve
-----------------------------------------
Name: Lon V. Leneve
Title: Vice President, Secretary &
Treasurer
METROPOLITAN LIFE INSURANCE COMPANY
By /s/ Jacqueline Jenkins
---------------------------------------------------
Name: Jacqueline Jenkins
Title: Assistant Vice President
SCHEDULE I
LIST OF SUBSIDIARIES
Americold Services Corporation
(100% ownership)
Americold Acquisition Co.
(100% ownership)
SCHEDULE II
STORAGE AGREEMENT CUSTOMERS
BY LOCATION
[with contracts longer than one year]
Facility Customer Agreement Expiry
- -------- -------- --------- ------
BROOKS, OR Norpac Foods Storage Agreement 01/03/05
SALEM, OR and Option to
Purchase Real
Property 4/1/88
Agreement regarding 03/31/98
Distribution Program
4/1/88. Modified
by Letter of Intent
9/12/93.
FOGELSVILLE, PA Ore-Ida Foods Agreement for Services 01/22/03
dated 1/22/93.
NAMPA, ID J. R. Simplot Proposal dated 2/1/93. 01/31/96
PLOVER, WI Ore-Ida Foods Warehouse Construction 03/01/05
and Storage Agreement
dated 1/11/78.
Agreement for Services
dated 1/22/93.
TOMAH, WI Ocean Spray Storage Agreement 09/30/04
Cranberries, Inc. dated 9/15/94
WATERTOWN, MA Gorton Division Storage and Freezing 12/19/04
of General Mills Agreement 12/20/84
WATSONVILLE, CA Richard A. Shaw Construction and 12/31/24
Storage Agreement
2/1/84
Schedule III
Subordination*
--------------
SECTION __.01. SECURITIES SUBORDINATED TO SENIOR DEBT.
The Company and the [Trustee] each covenants and agrees and each
[securityholder], by its acceptance of a [security], likewise
covenants and agrees that all [securities] shall be issued subject
to the provisions of this Article; and each [Person] holding any
[security], whether upon original issue or upon transfer,
assignment or exchange thereof, accepts and agrees that [this Debt)
shall, to the extent and in the manner set forth in this Article,
be subordinated in right of payment to the prior payment in full,
in cash or cash equivalents, of all amounts payable under Senior
Debt, including, without limitation, the Company's obligations
under the New Credit Agreement, the First Mortgage Bonds Indenture
and the Second Amended and Restated Investment Agreement, dated as
of _______, 1995 between the Company and Metropolitan Life
Insurance Company (the "Investment Agreement") (including any
interest accruing subsequent to [a bankruptcy event] specified in
Sections ____________ of this [Indenture], whether or not such
interest is an allowed claim enforceable against the debtor under
the United States Bankruptcy Code).
SECTION __.02. NO PAYMENT ON SECURITIES IN CERTAIN
CIRCUMSTANCES. (a) No direct or indirect payment or distribution
by or on behalf of the Company on account of principal of, interest
on and premium, if any, and penalties and fees ("Other Subordinated
Obligations") with respect to [this Debt], whether pursuant to the
terms of the [securities] or upon acceleration or otherwise, and no
payment to acquire, repurchase, retire, redeem or defease any of
the [securities] shall be made if, at the time of such payment,
there exists a default in the payment of all or any portion of the
obligations on any Senior Debt, and such default shall not have
been cured or waived or the benefits of this sentence waived by or
on behalf of the holders of such Senior Debt.
(b) During the continuance of any other event of
- ------------------------
* Capitalized terms used herein and not otherwise defined
herein have the meanings specified thereof or in the
Indenture, dated as of ____ __, 1995 between Americold
Corporation (the "Company") and United States Trust
Company of New York (the "1995 Indenture"), except for
bracketed capitalized terms, which shall be replaced,
depending on the context, with appropriate terms.
default with respect to the New Credit Agreement, the First
Mortgage Bonds, the Investment Agreement or other Senior Debt
pursuant to which the maturity thereof may be accelerated and (A)
upon receipt by the [Trustee] of written notice from any holder or
holders (or representatives thereof) of such Senior Debt in the
aggregate principal amount of $10 million or (B) if such event of
default under the New Credit Agreement, the First Mortgage Bonds,
the Investment Agreement or other Senior Debt results from the
acceleration of the [securities], from and after the date of such
acceleration, no payment of principal of, interest on, and Other
Subordinated Obligations with respect to [this Debt] may be made by
or on behalf of the Company upon or in respect of the [securities]
for a period (a "Payment Blockage Period") commencing on the
earlier of the date of receipt of such notice or the date of such
acceleration and ending 179 days thereafter (unless such Payment
Blockage Period shall be terminated by written notice to the
[Trustee] from the relevant entity giving notice commencing the
Payment Blockage Period or such event of default has been cured or
waived or by repayment in full of cash or cash equivalents of such
Senior Debt). Not more than one Payment Blockage Period pursuant
to this Section __.02(b) may be commenced with respect to the
[securities] during any period of 360 consecutive days.
Notwithstanding anything in this Indenture to the contrary, there
must be 180 consecutive days in any 360-day period in which no
Payment Blockage Period is in effect. For all purposes of this
Section __.02(b), no event of default (other than an event of
default pursuant to the financial maintenance covenants under the
New Credit Agreement, the First Mortgage Bonds Indenture or the
Investment Agreement) that existed or was continuing (it being
acknowledged that any subsequent action that would give rise to an
event of default pursuant to any provision under which an event of
default previously existed or was continuing shall constitute a new
event of default for this purpose) on the date of the commencement
of any Payment Blockage Period with respect to the New Credit
Agreement, the First Mortgage Bonds, the Investment Agreement or
other Senior Debt initiating such Payment Blockage Period shall be,
or shall be made, the basis for the commencement of a second
Payment Blockage Period by the representative for, or the holders
of, such Senior Debt, whether or not within a period of 360
consecutive days, unless such event of default shall have been
cured or waived for a period of not less than 90 consecutive days.
(c) In the event that, notwithstanding the foregoing,
any payment shall be received by the [Trustee] or any Holder when
such payment is prohibited by Section __.02(a) or __.02(b) of this
[Indenture], the [Trustee] shall promptly notify the holders of
Senior Debt of such prohibited payment and such payment shall be
held in trust for the benefit of, and shall be paid over or
delivered to, the holders of Senior Debt or their respective
representatives, or to the trustee or trustees under any indenture
pursuant to which any of such Senior Debt may have been issued, as
their respective interests may appear, but only to the extent that,
upon notice from the [Trustee] to the holders of Senior Debt that
such prohibited payment has been made, the holders of the Senior
Debt (or their representative or representatives or a trustee)
within 30 days of receipt of such notice from the [Trustee] notify
the [Trustee] of the amounts then due and owing on the Senior Debt,
if any, and only the amounts specified in such notice to the
[Trustee] shall be paid to the holders of Senior Debt and any
excess above such amounts due and owing on Senior Debt shall be
paid to the Company.
SECTION __.03. PAYMENT OVER OF PROCEEDS UPON
DISSOLUTION. ETC. (a) Upon any payment or distribution of assets
or securities of the Company, as the case may be, of any kind or
character, whether in cash, property or securities, upon any
dissolution or winding up or total or partial liquidation or
reorganization of the Company, whether voluntary or involuntary or
in bankruptcy, insolvency, receivership or other proceedings, all
amounts due or to become due upon all Senior Debt (including any
interest accruing subsequent to [a bankruptcy event] specified in
Sections ___________ of this [Indenture], whether or not such
interest is an allowed claim enforceable against the debtor under
the United States Bankruptcy Code) shall first be paid in full, in
cash or cash equivalents, before the [securityholders] or the
[Trustee] on behalf of the [securityholders] shall be entitled to
receive any payment by or on behalf of the Company on account of
principal of, interest on, and Other Subordinated Obligations with
respect to, [this Debt], or any payment to acquire, repurchase,
retire, redeem or defease any of the [securities] for cash,
property or securities, or any distribution with respect to the
[securities] of any cash, property or securities. Before any
payment may be made by, or on behalf of, the Company on account of
principal of, interest on, and Other Subordinated Obligations with
respect to [this Debt] upon any such dissolution, winding up,
liquidation or reorganization, any payment or distribution of
assets or securities of the Company of any kind or character,
whether in cash, property or securities, to which the
[securityholders] or the [Trustee] on behalf of the
[securityholders] would be entitled, but for the provisions of this
Article, shall be made by the Company or by any receiver, trustee
in bankruptcy, liquidating trustee, agent or other similar [Person]
making such payment or distribution, or by the [securityholders] or
the [Trustee] if received by them or it, directly to the holders of
Senior Debt (pro rata to such holders on the basis of the
respective amounts of Senior Debt held by such holders) or their
representatives, or to any trustee or trustees under any other
indenture pursuant to which any such Senior Debt may have been
issued, as their respective interests appear, to the extent
necessary to pay all such Senior Debt in full, in cash or cash
equivalents, after giving effect to any concurrent payment,
distribution or provision therefor to or for the holders of such
Senior Debt.
(b) To the extent any payment of Senior Debt (whether by
or on behalf of the Company, as proceeds of security or enforcement
of any right of setoff or otherwise) is declared to be fraudulent
or preferential, set aside or required to be paid to any receiver,
trustee in bankruptcy, liquidating trustee, agent or other similar
[Person] under any bankruptcy, insolvency, receivership, fraudulent
conveyance or similar law, then if such payment is recovered by, or
paid over to, such receiver, trustee in bankruptcy, liquidating
trustee, agent or other similar [Person], the Senior Debt or part
thereof originally intended to be satisfied shall be deemed to be
reinstated and outstanding as if such payment had not occurred. To
the extent the obligation to repay any Senior Debt is declared to
be fraudulent, invalid, or otherwise set aside under any
bankruptcy, insolvency, receivership, fraudulent conveyance or
similar law, then the obligation so declared fraudulent, invalid or
otherwise set aside (and all other amounts that would come due with
respect thereto had such obligation not been so affected) shall be
deemed to be reinstated and outstanding as Senior Debt for all
purposes hereof as if such declaration, invalidity or setting aside
had not occurred.
(c) In the event that, notwithstanding the foregoing
provision prohibiting such payment or distribution, any payment or
distribution of assets or securities of the Company of any kind or
character, whether in cash, property or securities, shall be
received by the [Trustee] or any [securityholder] at a time when
such payment or distribution is prohibited by Section __.03(a) of
this [Indenture] and before all obligations in respect of Senior
Debt are paid in full, in cash or cash equivalents, such payment or
distribution shall be received and held in trust for the benefit
of, and shall be paid over or delivered to, the holders of Senior
Debt (pro rata to such holders on the basis of the respective
amount of Senior Debt held by such holders) or their
representatives, or to the trustee or trustees under any other
indenture pursuant to which any such Senior Debt may have been
issued, as their respective interests appear, for application to
the payment of Senior Debt remaining unpaid until all such Senior
Debt has been paid in full, in cash or cash equivalents, after
giving effect to any concurrent payment distribution or provision
therefor to or for the holders of such Senior Debt.
(d) The consolidation of the Company with, or the merger
of the Company with or into, another corporation or the liquidation
or dissolution of the Company following the sale, conveyance,
transfer, lease or other disposition of all or substantially all of
its property and assets to another corporation upon the terms and
conditions provided in [Article ____] of this [Indenture] shall not
be deemed a dissolution, winding up, liquidation or reorganization
for the purposes of this Section __.03 if such other corporation
shall, as a part of such consolidation, merger, sale, conveyance,
transfer, lease or other disposition, assume the obligations of the
Company with respect to Senior Debt and otherwise comply with the
conditions stated in Article ____ of this [Indenture].
SECTION __.04. SUBROGATION. (a) Upon the payment in
full of all Senior Debt, in cash or cash equivalents, the
[securityholders] shall be subrogated to the rights of the holders
of Senior Debt to receive payments or distributions of cash,
property or securities of the Company made on such Senior Debt
until the principal of and interest on the [securities] shall be
paid in full; and, for the purposes of such subrogation, no
payments or distributions to the holders of the Senior Debt of any
cash, property or securities to which the [securityholders] or the
[Trustee] on their behalf would be entitled except for the
provisions of this Article, and no payment pursuant to the
provisions of this Article to the holders of Senior Debt by the
[securityholders] or the [Trustee] on their behalf shall, as
between the Company, its creditors other than holders of Senior
Debt, and the [securityholders], be deemed to be a payment by the
Company to or on account of the Senior Debt. It is understood that
the provisions of this Article are intended solely for the purpose
of defining the relative rights of the [securityholders], on the
one hand, and the holders of the Senior Debt, on the other hand.
(b) If any payment or distribution to which the
[securityholders] would otherwise have been entitled but for the
provisions of this Article shall have been applied pursuant to the
provisions of this Article, to the payment of all amounts payable
under Senior Debt, then, and in such case, the [securityholders]
shall be entitled to receive from the holders of such Senior Debt
any payments or distributions received by such holders of Senior
Debt in excess of the amount required to make payment in full, in
cash or cash equivalents, of such Senior Debt of such holders.
SECTION __.05. OBLIGATIONS OF COMPANY UNCONDITIONAL.
(a) Nothing contained in this Article or elsewhere in this
[Indenture] or in the [securities] is intended to or shall impair,
as among the Company and the [securityholders], the obligation of
the Company, which is absolute and unconditional, to pay to the
[securityholders] the principal of, and interest on, and Other
Subordinated Obligation with respect to the [securities] 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
[securityholders] and creditors of the Company other than the
holders of the Senior Debt, nor shall anything herein or therein
prevent the [securityholders] or the [Trustee] on their behalf from
exercising all remedies otherwise permitted by applicable law upon
default under this Indenture, subject to the rights, if any, under
this Article of the holders of the Senior Debt.
(b) Without limiting the generality of the foregoing,
nothing contained in this Article will restrict the right of the
[Trustee] or the [securityholders] to take any action to declare
the Securities to be due and payable prior to their stated maturity
pursuant to [the acceleration provision] of this [Indenture] or to
pursue any rights or remedies hereunder; PROVIDED, HOWEVER, that
all Senior Debt then due and payable or thereafter declared to be
due and payable shall first be paid in full, in cash or cash
equivalents, before the [securityholders] or the [Trustee] are
entitled to receive any direct or indirect payment of principal of,
interest on, and Other Subordinated Obligation with respect to
[this Debt] from the Company.
SECTION __.06. NOTICE TO TRUSTEE. (a) The Company
shall give prompt written notice to the [Trustee] of any fact known
to the Company that would prohibit the making of any payment to or
by the [Trustee] in respect of the [securities] pursuant to the
provisions of this Article. The [Trustee] shall not be charged
with knowledge of the existence of any default or event of default
with respect to any Senior Debt or of any other facts that would
prohibit the making of any payment to or by the [Trustee] unless
and until the [Trustee] shall have received notice in writing at
its Corporate Trust Office to that effect signed by an Officer, or
by a holder of Senior Debt, or trustee or agent therefor; and prior
to the receipt of any such written notice, the [Trustee] shall,
subject to [other provisions hereof regarding the rights and
obligations of the [Trustee]], be entitled to assume that no such
facts exist; PROVIDED that, if the [Trustee] shall not have
received the notice provided for in this Section __.06 at least two
Business Days prior to the date upon which, by the terms of this
[Indenture], any monies shall become payable for any purpose
(including, without limitation, the payment of the principal of,
interest on, and Other Subordinated Obligations with respect to any
[security]), then, notwithstanding anything herein to the contrary,
the [Trustee] shall have full power and authority to receive any
monies from the Company and to apply the same to the purpose for
which they were received, and shall not be affected by any notice
to the contrary that may be received by it on or after such prior
date except for an acceleration of the [securities] prior to such
application. Nothing contained in this Section __.06 shall limit
the right of the holders of Senior Debt to recover payments as
contemplated by this Article. The foregoing shall not apply if the
[Paying Agent] is the Company. The [Trustee] shall be entitled to
rely on the delivery to it of a written notice by a [Person]
representing himself or itself to be a holder of any Senior Debt
(or a trustee on behalf of, or other representative of, such
holder) to establish that such notice has been given by a holder of
such Senior Debt or a trustee or representative on behalf of any
such holder.
(b) In the event that the [Trustee] determines in good
faith that any evidence is required with respect to the right of
any [Person] as a holder of Senior Debt to participate in any
payment or distribution pursuant to this Article, the [Trustee] may
request such [Person] to furnish evidence to the reasonable
satisfaction of the [Trustee] as to the amount of Senior Debt held
by such [Person], the extent to which such [Person] is entitled to
participate in such payment or distribution and any other facts
pertinent to the rights of such [Person] under this Article and, if
such evidence is not furnished to the [Trustee], the [Trustee] may
defer any payment to such [Person] pending judicial determination
as to the right of such [Person] to receive such payment.
SECTION __.07. RELIANCE ON JUDICIAL ORDER OR CERTIFICATE
OF LIQUIDATING AGENT. Upon any payment or distribution of assets
or securities referred to in this Article Ten, the [Trustee] and
the [securityholders] shall be entitled to rely upon any order or
decree made by any court of competent jurisdiction in which
bankruptcy, dissolution, winding up, liquidation or reorganization
proceedings are pending, or upon a certificate of the receiver,
trustee in bankruptcy, liquidating trustee, agent or other similar
[Person] making such payment or distribution, delivered to the
[Trustee] or to the [securityholders] for the purpose of
ascertaining the persons entitled to participate in such
distribution, the holders of the Senior Debt and other Debt 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 Article.
SECTION __.08. TRUSTEE'S RELATION TO SENIOR DEBT. (a)
The [Trustee] and any [Paying Agent] shall be entitled to all the
rights set forth in this Article with respect to any Senior Debt
that may at any time be held by it in its individual or any other
capacity to the same extent as any other holder of Senior Debt and
nothing in this Indenture shall deprive the [Trustee] or any
[Paying Agent] of any of its rights as such holder.
(b) With respect to the holders of Senior Debt, the
[Trustee] undertakes to perform or to observe only such of its
covenants and obligations as are specifically set forth in this
Article, and no implied covenants or obligations with respect to
the holders of Senior Debt shall be read into this Indenture
against the [Trustee]. The [Trustee] shall not be deemed to owe
any fiduciary duty to the holders of Senior Debt (except as
provided in Sections __.02(c) and __.03(c) of this [Indenture]) and
shall not be liable to any such holders if the [Trustee] shall in
good faith mistakenly pay over or distribute to [securityholders]
of [securities] or to the Company or to any other person cash,
property or securities to which any holders of Senior Debt shall be
entitled by virtue of this Article or otherwise.
SECTION __.09. SUBORDINATION RIGHTS NOT IMPAIRED BY ACTS
OR OMISSIONS OF THE ISSUER OR HOLDERS OF SENIOR DEBT. No right of
any present or future holders of any Senior Debt to enforce
subordination as provided in this Article will at any time in any
way be prejudiced or impaired by any 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 of this Indenture, regardless of any knowledge thereof that
any such holder may have or otherwise be charged with. The
provisions of this Article Ten are intended to be for the benefit
of, and shall be enforceable directly by, the holders of Senior
Debt.
SECTION __.10. HOLDERS AUTHORIZE TRUSTEE TO EFFECTUATE
SUBORDINATION OF SECURITIES. Each [securityholder] by his
acceptance of any [securities] authorizes and expressly directs the
[Trustee] on his behalf to take such action as may be necessary or
appropriate to effectuate the subordination provided in this
Article, and appoints the [Trustee] his attorney-in-fact for such
purposes, including, in the event of any dissolution, winding up,
liquidation or reorganization of the Company (whether in
bankruptcy, insolvency, receivership, reorganization or similar
proceedings or upon an assignment for the benefit of creditors or
otherwise) tending towards liquidation of the property and assets
of the Company, the filing of a claim for the unpaid balance of its
[securities] in the form required in those proceedings. If the
[Trustee] does not file a proper claim or proof of indebtedness in
the form required in such proceeding at least 10 days before the
expiration of the time to file such claim or claims, each holder of
Senior Debt is hereby authorized to file an appropriate claim for
and on behalf of the [securityholders].
SECTION __.11. NOT TO PREVENT EVENTS OF DEFAULT. The
failure to make a payment on account of principal of, interest on
or Other Subordinated Obligations with respect to the [securities]
by reason of any provision of this Article will not be construed as
preventing the occurrence of an [Event of Default].
SECTION __.12. TRUSTEE'S COMPENSATION NOT PREJUDICED.
Nothing in this Article will apply to amounts due to the [Trustee]
pursuant to other sections of this [Indenture].
SECTION __.13. NO WAIVER OF SUBORDINATION PROVISIONS.
Without in any way limiting the generality of Section __.09 of this
[Indenture], the holders of Senior Debt may, at any time and from
time to time, without the consent of or notice to the [Trustee] or
the [securityholders], without incurring responsibility to the
[securityholders] and without impairing or releasing the
subordination provided in this Article or the obligations hereunder
of the [securityholders] to the holders of Senior Debt, do any one
or more of the following: (a) change the manner, place or terms of
payment or change the time of payment of, or renew or alter, Senior
Debt or any instrument evidencing the same or any agreement under
which Senior Debt is outstanding or secured; (b) sell, exchange,
release or otherwise deal with any property pledged, mortgaged or
otherwise securing Senior Debt; (c) release any [Person] liable in
any manner for the collection of Senior Debt; and (d) exercise or
refrain from exercising any rights against the Company and any
other [Person].
SECTION __.14. PAYMENTS MAY BE PAID PRIOR TO
DISSOLUTION. Nothing contained in this Article or elsewhere in
this [Indenture] shall prevent (i) the Company, except under the
conditions described in Section __.02 or __.03 of this [Indenture],
from making payments of principal of, interest on, or Other
Subordinated Obligations with respect to the [securities], or from
depositing with the [Trustee] any money for such payments, or (ii)
the application by the [Trustee] of any money deposited with it for
the purpose of making such payments of principal of, interest on,
or Other Subordinated Obligations with respect to the [securities]
to the holders entitled thereto unless, at least two Business Days
prior to the date upon which such payment becomes due and payable,
the [Trustee] shall have received the written notice provided for
in Section __.02(b) of this [Indenture] (or there shall have been
an acceleration of the [securities] prior to such application) or
in Section __.06 of this [Indenture]. The Company shall give
prompt written notice to the [Trustee] of any dissolution, winding
up, liquidation or reorganization of the Company.
SECTION __.15. CONSENT OF HOLDERS OF SENIOR DEBT UNDER
THE NEW CREDIT AGREEMENT AND FIRST MORTGAGE BONDS. The provisions
of this Article (including the definitions contained in this
Article and references to this Article contained in this
[Indenture]) shall not be amended in a manner that would adversely
affect the rights of the holders of Senior Debt under the New
Credit Agreement, the First Mortgage Bonds, the Investment
Agreement or any other Senior Debt, and no such amendment shall
become effective unless the holders of such Senior Debt shall have
consented (in accordance with the provisions of the New Credit
Agreement, the First Mortgage Bonds Indenture, the Investment
Agreement or other relevant instrument, as the case may be) to such
amendment.
SECTION __.16. DEFINITIONS. The following terms, as
used in this Article, shall have the following meanings:
DEBT: The term "Debt" of any [Person] means, without
duplication,
(1) all obligations of such [Person] in respect of
(A) indebtedness for money borrowed and (B) indebtedness
evidenced by the [securities], or the First Mortgage
Bonds, the Securities, notes, debentures, bonds or other
similar instruments for the payment of which such
[Person] is responsible or liable including, without
limitation (x) all Obligations (as defined in the First
Mortgage Indenture, dated as of March 9, 1993) in respect
of money owed under the First Mortgage Bonds Indenture,
(y) interest accruing subsequent to an event of
bankruptcy or reorganization relating to the Company,
whether or not such interest is an allowed claim
enforceable against the debtor under the United States
Bankruptcy Code, and (z) the fees and expenses of the
Institutional Investor payable under the Investment
Agreement;
(ii) all Capital Lease Obligations of such [Person];
(iii) all obligations of such [Person] issued or
assumed as the deferred purchase price of property, all
conditional sale obligations of such [Person] and all
obligations of such [Person] under any title retention
agreement (but excluding trade accounts payable arising
in the ordinary course of business);
(iv) all obligations of such [Person] for the
reimbursement of any obligor on any letter of credit,
banker's acceptance or similar credit transaction (other
than obligations with respect to letters of credit
securing obligations (other than obligations described in
clauses (i) through (iii) above) entered into in the
ordinary course of business of such [Person] to the
extent such letters of credit are not drawn upon or, if
and to the extent drawn upon, such drawing is reimbursed
no later than the third business day following receipt by
such [Person] of a demand for reimbursement following
payment on the letter of credit);
(v) the amount of all obligations of such [Person]
with respect to the redemption, repayment or other
repurchase of any Redeemable Stock or Exchangeable Stock;
(vi) all obligations of the type referred to in
clauses (i) through (v) above of other [Persons] and all
dividends of other [Persons] for the payment of which, in
either case, such [Person] is responsible or liable as
obligor, guarantor or otherwise; provided, however, that
to the extent such [Person] is responsible or liable only
for the obligation of another [Person] to pay interest on
Debt, then a designated percentage of such interest or
the amount of the underlying Debt, as the case may be,
shall be deemed Debt of the referent [Person] and the
amount of such deemed Debt of the referent [Person] shall
be equal to the lesser of (A) the aggregate principal
amount of the underlying Debt and (B) the aggregate
amount of interest due or payable over the term of such
Debt (or the term of the [securities], if shorter)
determined based upon the rate of interest in effect as
the date of such determination, together with the maximum
prepayment premium or penalty which could become due or
payable with respect to such Debt if such Debt was
prepaid prior to the maturity of the [securities];
(vii) all obligations of the type referred to in
clauses (i) through (vi) above of other [Persons] secured
by any Lien on any property or asset of such [Person]
(whether or not such obligation is assumed by such
[Person]), the amount of such obligations being deemed to
be the lesser of the value of such property or assets and
the amount of the obligation so secured; and
(viii) all obligations of such [Person] consisting
of modifications, renewals, extensions, replacements and
refundings of any obligations described in any of clauses
(i) through (vii) above.
SENIOR DEBT: The term "Senior Debt" means Debt unless,
in the instrument creating or evidencing the same or pursuant to
which the same is outstanding, it is provided that such obligations
are PARI PASSU or junior or subordinate in right of payment to the
Securities; PROVIDED, HOWEVER, that Senior Debt shall not be deemed
to include (1) any obligation of the Company to any Subsidiary, (2)
any liability for federal, state, local or other taxes owed or
owing by the Company other than reimbursement obligations of the
Company in respect of such taxes that are paid on behalf of the
Company pursuant to the provisions in the Mortgages (as defined in
the First Mortgage Bonds Indenture) that permit the mortgagee to
make such payment, (3) any accounts payable or other liability to
trade creditors arising in the ordinary course of business
(including guarantees thereof or instruments evidencing such
liabilities), (4) any indebtedness, guarantee or obligation of the
Company which is subordinate or junior in any respect to any other
indebtedness, guarantee or obligation of the Company (including,
without limitation, the [securities]), (5) the portion of any Debt
issued in violation of section [4.05 or 4.06] of the 1995 Indenture
or (6) any obligations of the Company or any Subsidiary with
respect to the redemption, repayment or other repurchase of any
Redeemable Stock or Exchangeable Stock.
SCHEDULE V
Home Office Payments to Investor
- --------------------------------
Metropolitan Life Insurance Company
One Madison Avenue
New York, New York 10010
Attention: Treasurer
All payments on account of the Bonds shall be made by
wire transfer of immediately available funds not later than
1:00 p.m., New York City time, to the investor's Account No.
002-2-410591 (Account Name: Metropolitan Life - Corporate
Investments) at The Chase Manhattan Bank, N.A., 33 East 23rd
Street, New York, NY 10010, with sufficient information to
identify the source and application of the funds and with
specific reference to Reference No. CSP-O3099O9A.
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