Liquidating Property Trust Agreement

STANDARD BRANDS PAINT LIQUIDATING PROPERTY TRUST


AMENDED AND RESTATED
LIQUIDATING PROPERTY TRUST AGREEMENT
dated as of May 16, 1995,


among


STANDARD BRANDS PAINT CO.
and
STANDARD BRANDS REALTY CO., INC.,
as DEPOSITORS,


STANDARD BRANDS PAINT COMPANY,


CORIMON CORPORATION,
SBP LIQUIDATING PROPERTY CO.,
SUN LIFE INSURANCE COMPANY OF AMERICA,
ANCHOR NATIONAL LIFE INSURANCE CO.,
TRANSAMERICA OCCIDENTAL LIFE INSURANCE COMPANY
and
TRANSAMERICA LIFE INSURANCE AND ANNUITY COMPANY,


TRANSAMERICA REALTY SERVICES, INC.,
as DISPOSITION AGENT, and


BANKERS TRUST COMPANY OF CALIFORNIA, N.A.,
as TRUSTEE


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TABLE OF CONTENTS


Page


SECTION 1.
DEFINITIONS . . . . . . . . . . . . . . 5
1.1. Definitions . . . . . . . . . . . . . . . . . . . . . . . 5
1.2. Other Definitional Provisions . . . . . . . . . . . . . . 17


SECTION 2.
DECLARATION OF LIQUIDATING TRUST; ISSUANCE AND
TRANSFER OF CERTIFICATES OF BENEFICIAL INTEREST;
DUTIES OF TRUSTEE . . . . . . . . . . . . 17
2.1. Declaration and Purpose of Liquidating
Trust and Termination Thereof . . . . . . . . . . . . . 17
2.2. Transfer of Property to the Trust; Acceptance
by Trustee; Situs of Trust and Title to Trust
Property . . . . . . . . . . . . . . . . . . . . . . . 20
2.3. Certificates of Beneficial Interest . . . . . . . . . . . . 21
2.4. Tax Reporting . . . . . . . . . . . . . . . . . . . . . . . 24
2.5. Further Assurances . . . . . . . . . . . . . . . . . . . . 24
2.6. Duties of Trustee . . . . . . . . . . . . . . . . . . . . . 24
2.7. Instructions to Trustee . . . . . . . . . . . . . . . . . . 25
2.8. Furnishing of Documents . . . . . . . . . . . . . . . . . . 26
2.9. Liability of Company and Depositors . . . . . . . . . . . . 26
2.10. Restrictions on Transfers of Loans under the
Trust Loan Agreement . . . . . . . . . . . . . . . . . 27


SECTION 3.
TRUST LOAN AGREEMENT; PLEDGE OF COLLATERAL;
DISPOSITION AGENT;
TRUST ACCOUNTS AND OTHER MATTERS . . . . . . . . 27
3.1. Execution of the Trust Loan Documents and
Related Agreements, Pledge of Collateral
and Other Matters . . . . . . . . . . . . . . . . . . . 27
3.2. [Intentionally Omitted] . . . . . . . . . . . . . . . . . . 28
3.3. Designation and Role of Disposition Agent . . . . . . . . . 29
3.4. Collections, Distributions and Investments . . . . . . . . 36


SECTION 4.
REPRESENTATIONS AND WARRANTIES OF DEPOSITORS AND COMPANY . . 38
4.1. Good Standing. . . . . . . . . . . . . . . . . . . . . . . 38
4.2. Corporate Power . . . . . . . . . . . . . . . . . . . . . . 38
4.3. Consents and Approvals . . . . . . . . . . . . . . . . . . 38
4.4. Title to Trust Property . . . . . . . . . . . . . . . . . . 39
4.5. Binding Effect . . . . . . . . . . . . . . . . . . . . . . 39


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4.6. Litigation . . . . . . . . . . . . . . . . . . . . . . . . 39
4.7. Compliance with Law . . . . . . . . . . . . . . . . . . . . 39
4.8. Solvency . . . . . . . . . . . . . . . . . . . . . . . . . 39
4.9. Environmental Matters . . . . . . . . . . . . . . . . . . . 39
4.10. Incorporation of Representations and
Warranties from the Trust Loan Agreement . . . . . . . . 40


SECTION 5.
REPRESENTATIONS AND WARRANTIES OF TRUST COMPANY . . . . . 41
5.1. Good Standing . . . . . . . . . . . . . . . . . . . . . . . 41
5.2. Corporate Power . . . . . . . . . . . . . . . . . . . . . . 41
5.3. Consents and Approvals . . . . . . . . . . . . . . . . . . 41
5.4. Binding Effect . . . . . . . . . . . . . . . . . . . . . . 41


SECTION 6.
CERTAIN COVENANTS OF COMPANY,
DEPOSITORS, HOLDERS AND THE TRUST . . . . . . . . 42
6.1. Title to Trust Property . . . . . . . . . . . . . . . . . . 42
6.2. Notification of Transfer . . . . . . . . . . . . . . . . . 42
6.3. Investment Company . . . . . . . . . . . . . . . . . . . . 42
6.4. Deduction of Environmental Expenditures . . . . . . . . . . 42


SECTION 7.
CONCERNING TRUSTEE, DISPOSITION AGENT AND THE TRUST . . . . 42
7.1. General Matters Relating to Trustee and
Disposition Agent . . . . . . . . . . . . . . . . . . . 42
7.2. Books and Records; Mailings to Holder . . . . . . . . . . . 45
7.3. Compensation and Indemnification . . . . . . . . . . . . . 45
7.4. Resignation, Discharge or Removal of Trustee;
Successor . . . . . . . . . . . . . . . . . . . . . . . 48
7.5. Qualification of Trustee . . . . . . . . . . . . . . . . . 50
7.6. Co-trustees and Separate Trustees . . . . . . . . . . . . . 50
7.7. Not Acting In Individual Capacity . . . . . . . . . . . . . 51
7.8. Resignation, Discharge or Removal of
Disposition Agent; Successor . . . . . . . . . . . . . 52
7.9. Termination . . . . . . . . . . . . . . . . . . . . . . . . 53
7.10. Co-Disposition Agent and Separate Disposition
Agents . . . . . . . . . . . . . . . . . . . . . . . . 53


SECTION 8.
REPRESENTATIONS AND WARRANTIES OF DISPOSITION AGENT . . . . 55
8.1. Corporate Power and Authority . . . . . . . . . . . . . . . 55
8.2. Authorization of Agreements . . . . . . . . . . . . . . . . 55
8.3. No Conflict . . . . . . . . . . . . . . . . . . . . . . . . 55


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8.4. Governmental Consents . . . . . . . . . . . . . . . . . . . 55
8.5. Binding Obligation . . . . . . . . . . . . . . . . . . . . 55


SECTION 9.
MISCELLANEOUS . . . . . . . . . . . . . 56
9.1. Benefit of Agreement. . . . . . . . . . . . . . . . . . . . 56
9.2. Severability . . . . . . . . . . . . . . . . . . . . . . . 56
9.3. Amendments and Waivers . . . . . . . . . . . . . . . . . . 56
9.4. Notices; Instructions . . . . . . . . . . . . . . . . . . . 56
9.5. Termination of this Agreement; No Power
to Revoke or Withdraw Trust Property . . . . . . . . . . 57
9.6. Nature of Interest in Trust Property . . . . . . . . . . . 60
9.7. Governing Law . . . . . . . . . . . . . . . . . . . . . . . 60
9.8. Counterparts. . . . . . . . . . . . . . . . . . . . . . . . 60
9.9. Limitations on Rights of Others . . . . . . . . . . . . . . 60
9.10. Merger and Consolidation . . . . . . . . . . . . . . . . . 61
9.11. Entire Agreement . . . . . . . . . . . . . . . . . . . . . 61


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SCHEDULES:


Schedule A Remaining Initial Properties Schedule B Additional Properties Schedule C Annual Rentals Schedule D Estimated Sales Price Schedule E Maintenance Costs Schedule F Existing Third Party Leases Schedule G Environmental Liabilities Schedule H Percentage Interests Schedule I Signature Block


EXHIBITS:


I Form of Certificate of Beneficial Interest II Form of Trust Transfer Documents


APPENDIX A


1


STANDARD BRANDS PAINT LIQUIDATING PROPERTY TRUST
AMENDED AND RESTATED
LIQUIDATING PROPERTY TRUST AGREEMENT


AMENDED AND RESTATED LIQUIDATING PROPERTY TRUST AGREEMENT relating to STANDARD BRANDS PAINT LIQUIDATING PROPERTY TRUST (the "Trust"), dated as of May 16, 1995, by and among (i) STANDARD BRANDS PAINT CO., a California corporation, and STANDARD BRANDS REALTY CO., INC., a California corporation (collectively, "Depositors"), (ii) STANDARD BRANDS PAINT COMPANY, a Delaware corporation ("Company"), (iii) CORIMON CORPORATION, a Delaware corporation ("Corimon"), SBP LIQUIDATING PROPERTY CO., a Delaware corporation ("Property Co."), SUN LIFE INSURANCE COMPANY OF AMERICA, an Arizona corporation, ANCHOR NATIONAL LIFE INSURANCE CO., a California corporation, TRANSAMERICA OCCIDENTAL LIFE INSURANCE COMPANY, a California corporation, and TRANSAMERICA LIFE INSURANCE AND ANNUITY COMPANY, a North Carolina corporation (collectively, "Holders"), (iv) TRANSAMERICA REALTY SERVICES, INC., a Delaware corporation ("Disposition Agent"), and (v) BANKERS TRUST COMPANY OF CALIFORNIA, N.A. (in its individual capacity, "Trust Company").


RECITALS


1. Effective as of the Initial Effective Date, Depositors transferred the properties listed on Schedule A, annexed hereto (the "Initial Properties") to the Trust subject to (a) $68,671,980 in principal amount of outstanding loans (the "Original Trust Loans") under the Amended and Restated Loan Agreement, dated as of June 14, 1993 (as amended, supplemented and otherwise modified from time to time, the "Existing Insurance Company Loan Agreement") among Company, Depositors, The Art Store, a California corporation ("TAS"), Sun Life Insurance Company of America, Anchor National Life Insurance Co., Transamerica Occidental Life Insurance Company and Transamerica Life Insurance and Annuity Company, as lenders (collectively, "Lenders"), and Servicing Agent (capitalized terms used in these Recitals without definition have the respective meanings assigned such terms in Section 1.1) secured by a first priority lien on such Initial Properties, and (b) a second lien securing obligations under the New Loan Agreement, dated as of March 16, 1994 (as amended, supplemented and otherwise modified from time to time, the "New Loan Agreement") among Company, Depositors, Lenders, Standard Brands Paint Collateral Trust ("SBP Collateral Trust"), as a lender thereunder, and Servicing Agent. In exchange for such transfer the Depositors received Certificates of Beneficial Interest evidencing 100% of the beneficial interest in the Trust.


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2. Company and Depositors transferred the Initial Properties to the Trust pursuant to the Standard Brands Paint Liquidating Property Trust Liquidating Property Trust Agreement dated as of July 12, 1994 among Company, Depositors, Transamerica Realty Services, Inc. and Trust Company (the "Original Trust Agreement"). The Trust was created to dispose of the Initial Properties as expeditiously as possible as provided therein.


3. The Original Trust Loan Agreement was amended and restated pursuant to an Amended and Restated Trust Loan Agreement dated as of July 12, 1994 (the "Original Trust Loan Agreement") among Trustee on behalf of the Trust, as Borrower, Lenders and Servicing Agent.


4. As of the date hereof, the Trust has disposed of 28 of the Initial Properties. The Trust continues to own 50 properties, as indicated on Schedule A annexed hereto (the "Remaining Initial Properties"), which consist of 46 properties which Depositors operate or formerly operated as retail stores, 2 properties which Depositors operated or formerly operated as warehouses and 2 parcels of vacant land. The Remaining Initial Properties that are currently operated by the Depositors are identified as such on Schedule A annexed hereto, and, together with the Additional Properties, are referred to herein as the "Operational Properties". The Remaining Initial Properties that are no longer operated by Depositors are identified as such in Schedule A, annexed hereto and are referred to herein as the "Vacant Properties", and the Remaining Initial Properties that are leased to third parties are identified as such in Schedule A annexed hereto and are referred to herein as the "Leased Properties". As a result of the sales of the 28 Initial Properties, the outstanding amount of the Original Trust Loans has been reduced to $50,415,166.36 in principal amount (the "Remaining Trust Loans") and, as of the date hereof, accrued and unpaid interest on the Remaining Trust Loans is $0.


5. On May 15, 1995, Section 2.9 of the Original Trust Agreement was amended (a) by adding Section 2.9(c) to provide that the Holders shall be jointly and severally liable directly to and shall indemnify each creditor of the Trust for all losses, claims, damages, liabilities and expenses of the Trust, including fees, expenses, Taxes, income taxes, and other liabilities of the Trust (other than any liability with respect to the Original Trust Loans) to the extent the Holder would be liable if the Trust were a partnership formed under the California Uniform Partnership Act, and (b) by deleting the penultimate sentence in Section 9.5(a). In addition, any third party creditors of the Trust were deemed third party beneficiaries of Section 2.9(c).


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6. Depositors collectively own 15 properties listed on Schedule B annexed hereto (the "Additional Properties" and together with the Remaining Initial Properties, the "Properties") which consist of Operational Properties operated by Depositors as retail paint stores.


7. Depositors have granted first priority liens on the Additional Properties to Servicing Agent, which secure obligations of Company and Depositors under the Existing Insurance Company Loan Agreement.


8. Company and Depositors have determined that it is in their best interests to transfer the Additional Properties to the Trust subject to certain of the loans outstanding under the Existing Loan Agreement and have the Trust dispose of all of the Additional Properties as expeditiously as possible as provided herein.


9. In order to permit Depositors to operate the Operational Properties prior to their disposition, the Trust has and will lease back to Depositors pursuant to the Depositors Leases (as defined below) such Properties, on a triple net bond type lease basis, for a minimum annual rental payable monthly equal to the minimum monthly rent corresponding to each such Property as set forth on Schedule C. The disposition of the Properties will be enhanced by such leases and said disposition will be subject to such leases.


10. In connection with the transfer and deposit of the Additional Properties into the Trust, Company and Depositors have requested that Lenders under the Existing Insurance Company Loan Agreement permit the transfer and deposit of the Additional Properties subject to $14,250,781.00 in principal amount of the outstanding loans under the Existing Insurance Company Loan Agreement (the "Additional Trust Loans") which shall continue to be secured by the Properties and reduce Company's and its Subsidiaries' (including Depositors') obligations in respect of the Trust Loans as provided in the Trust Acknowledgement Agreement. The Additional Trust Loans and the Remaining Trust Loans are hereinafter referred to as the "Trust Loans".


11. The Trust Loans will be amended and restated pursuant to the Trust Loan Agreement. The principal and interest on the Trust Loans prior to the maturity thereof shall be payable from the proceeds from the disposition of the Properties and lease payments as provided herein and in the Trust Loan Agreement. Company and Depositors have determined that the agreements of Lenders, including those described in the preceding sentence, will, among other things, reduce Company's and Depositors' current liabilities and allow Company and Depositors to restructure their retail operations.


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12. Pursuant to such transfer and certain modifications to the liens encumbering the Properties occurring simultaneously herewith, the Properties shall in the aggregate become subject to the lien of all of the Trust Loans without regard to whether the Trust Loan is an Additional Trust Loan or a Remaining Trust Loan and without regard to whether a particular Property is a Remaining Initial Property or an Additional Property.


13. For ease of reference and clarity, Company, Depositors, Disposition Agent and Trust Company desire to restate the Original Trust Agreement and the Holders desire to become a party to the Original Trust Agreement to incorporate the amendments made hereby. The parties hereto expressly disclaim any intent to effect a novation or an extinguishment or discharge of the Original Trust Agreement as a result of entering into this Agreement and the other documents contemplated herein.


14. In order to facilitate and coordinate the disposition of the Properties, the Trustee (as defined below) has engaged Disposition Agent (as defined below), as agent of the Trust and Trustee, to dispose of the Properties and perform the other services set forth herein.


15. Immediately upon the deposit of the Additional Properties to the Trust by the Depositors, Depositors will sell their Certificates of Beneficial Interest to the Holders (as defined below) as follows: a 49% beneficial interest to Corimon; a 31% beneficial interest to Fidelity which will immediately deposit such Certificates of Beneficial Interest in Property Co. in exchange for all of the outstanding stock of Property Co.; and a 20% beneficial interest to the Lenders (allocated among such Lenders as set forth in Schedule 1 to Appendix A hereto) in consideration of the release of claims for Contingent Interest (as defined in the Original Trust Loan Agreement) on the Trust Loans.


16. Effective upon the transfer of the Additional Properties to the Trust, the obligations of Company and Depositors under the New Loan Agreement will be exchanged for common and preferred stock of Company and, accordingly, the New Loan Agreement will be terminated and the liens on the Properties securing the obligations thereunder will be released.


17. After such transfer, the Certificates of Beneficial Interest held by Property Co. and Corimon shall be pledged to secure their obligations to Lenders under the Note Purchase Agreement and any distributions thereon shall be used on an after-tax basis to purchase obligations of Company and Depositors owing to Lenders under the Existing Loan Agreement as more fully set forth in the Note Purchase Agreement.


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18. This Agreement is completely amended and restated hereunder immediately upon the transfer of the beneficial interest in the Trust to Corimon, Property Co. and the Lenders, as set forth in Recital 15 above.


NOW, THEREFORE, in consideration of the premises and the mutual agreements herein contained, the parties hereto, as of the transfer to the Holders of the Certificates of Beneficial Interest, as set forth in Recital 15, hereby agree as follows:


SECTION 1.
DEFINITIONS


1.1. Definitions. Capitalized terms set forth below shall have the following meanings when used in this Agreement:


"Act of Bankruptcy" means, with respect to any Person, (i) a court having jurisdiction in the premises shall enter a decree or order for relief in respect of such Person in an involuntary case under any applicable bankruptcy, insolvency, or other similar law now or hereafter in effect, which decree or order is not stayed; (ii) any other similar relief shall be granted under any applicable federal or state law; (iii) a decree or order of a court having jurisdiction in the premises for the appointment of a receiver, liquidator, sequestrator, trustee, custodian, or other officer having similar powers over such Person, or over all or a substantial part of property, shall have been entered; (iv) an involuntary appointment of an interim receiver, trustee, or other custodian of such Person for all or a substantial part of property has occurred; (v) the issuance of a warrant of attachment, execution, or similar process against any substantial part of the property of such Person, and the continuance of any such events described above for 60 days has occurred (unless dismissed, bonded, or discharged); or (vi) such Person shall have an order for relief entered with respect to it or commence a voluntary case under any applicable bankruptcy, insolvency, or other similar law now or hereafter in effect, or shall consent to the entry of an order for relief in an involuntary case, or to the conversion to an involuntary case, under any such law, or shall consent to the appointment of or taking possession by a receiver, trustee, or other custodian for all or a substantial part of its property.


"Actual Knowledge" means the actual knowledge of any vice president or assistant vice president in the Corporate Trust Office of Trustee.


"Additional Properties" has the meaning assigned such term in the Recitals hereof.


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"Additional Properties Lease" means that certain Additional Properties Lease, substantially in the form of Exhibit II-B annexed hereto among the Trust and Depositors pursuant to which the Additional Properties are leased to Depositors subject to the terms and conditions set forth therein, as such Additional Properties Lease may be amended, supplemented or otherwise modified from time to time.


"Additional Trust Loans" has the meaning assigned such term in the Recitals hereof.


"Affiliate" as applied to any Person, means any other Person directly or indirectly controlling, controlled by, or under common control with, that Person. For the purposes of this definition, "control" (including, with correlative meanings, the terms "controlling", "controlled by" and "under common control with"), as applied to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of that Person, whether through the ownership of voting securities or by contract or otherwise. In no event shall any Lender, Disposition Agent, Servicing Agent or SBP Collateral Trust be deemed to be an Affiliate of Company or any of its Subsidiaries, including the Trust.


"Agreement" means this Amended and Restated Liquidating Property Trust Agreement, as it may be amended, supplemented or otherwise modified from time to time.


"Amended and Restated Memorandum of Understanding" means the Amended and Restated Memorandum of Understanding dated as of May 16, 1995, among Company, Depositors, Lenders, Servicing Agent, the trustee of the SBP Collateral Trust and the Trust, as such agreement may be amended, supplemented or otherwise modified from time to time.


"Authorized Officer" means the president or any vice president, investment officer or assistant vice president of any Person.


"Business Day" means any day excluding Saturday, Sunday and any day which is a legal holiday under the laws of the State of California or is a day on which banking institutions located in such state are authorized or required by law or other governmental action to close.


"Cash Equivalents" has the meaning assigned such term in the Trust Loan Agreement.


"Certificate of Beneficial Interest" means a certificate representing beneficial ownership interests in the Trust substantially in the form of Exhibit I annexed hereto.


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"Certificate Pledge Agreement" means that certain Pledge Agreement pursuant to which Corimon and Property Co. as Holders pledge their Certificates of Beneficial Interest to Transamerica Occidental Life Insurance Company, as Servicing Agent under the Existing Insurance Company Loan Agreement, to secure the obligations of Corimon and Property Co. under the Note Purchase Agreement, as such agreement may be amended, supplemented or otherwise modified from time to time.


"Collateral" means all right, title and interest of the Trust (and of Trustee and any co-trustee or separate trustee to the extent title is deemed vested in any such Person in accordance with this Agreement) in and to the Trust Property (including, without limitation, the Properties), in which a security interest is granted to Servicing Agent under and in accordance with the Trust Loan Documents and in accordance with Section 3.1, including, without limitation, (i) all proceeds of sales received or to be received, or derived or to be derived, now or at any time hereafter from or in connection with such Collateral and (ii) all powers and rights of Trustee and the Trust now or hereafter acquired by Trustee or the Trust and rights of enforcement under or to such Collateral.


"Collection Account" means the Collection Account established and maintained by Disposition Agent in accordance with Section 3.4.


"Collections" means all cash receipts of every nature received by or on behalf of the Trust in respect of any Trust Property and all cash receipts received on account of reimbursement or indemnification obligations of Company or any Depositor hereunder.


"Company" has the meaning assigned such term in the Recitals hereof.


"Corporate Trust Office" means the principal corporate trust or other similar office of Trustee.


"Depositors" has the meaning assigned such term in the Recitals hereof.


"Depositors Leases" means collectively, the Master Lease dated as of July 12, 1994, as amended and the individual leases for certain of the Properties, all in such form acceptable to the parties hereto, among the Trust and Depositors pursuant to which the Operational Properties are leased to Depositors subject to the terms and conditions set forth therein, as such Depositors Leases may be amended, supplemented or otherwise modified from time to time.


"Disposition Agent" means Transamerica Realty Services, Inc. in its capacity as disposition agent pursuant to Section 3.3, and any


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Person that becomes a successor Disposition Agent pursuant to Section 7.8.


"Disposition Agent Fees" means the Administration Fee and the Disposition Fee payable to Disposition Agent, as such terms are defined in Section 3.3.


"Disposition Agreements" means any and all agreements entered into from time to time by Disposition Agent on behalf of the Trust or by Trustee at the instruction of Disposition Agent in connection with the disposition of any Property, including, without limitation, any listing or similar agreement with any broker or any agreement for the sale of any Property.


"Disposition Improvements" means any physical additions or changes to any Property made for the specific purpose of facilitating a lease or sale of such property, including, but not limited to the following: (i) replacement of roofs or repairs in excess of $20,000, or with respect to the Torrance properties, $50,000 per occurrence, (ii) installation or replacement of security fences, (iii) work on HVAC (heating, ventilation and air conditioning) in excess of $5,000 per occurrence, (iv) major overhaul or repairs on Properties, (v) parking lot resurfacing, and (vi) structural changes or structural repairs in excess of $100,000 per occurrence. Disposition Improvements do not include (y) Maintenance Costs or (z) Environmental Expenditures, except as authorized by Disposition Agent in its sole discretion. ...