Exhibit 99.7
SECURITY CAPITAL PLEDGE AND GUARANTY AGREEMENT
AGREEMENT dated as of June 27, 1997 between Security Capital
Corporation, a Delaware corporation ("Security Capital") and NationsCredit
Commercial Corporation, as Agent for the Lenders referred to below.
W I T N E S S E T H :
WHEREAS Pumpkin Ltd., a Delaware corporation (the "Company"), Pumpkin
Masters Holdings, Inc., a Delaware corporation ("Holdings"), certain lenders
and NationsCredit Commercial Corporation, as agent for such lenders, are
parties to a Credit Agreement of even date herewith (as the same may be
amended from time to time, the "Credit Agreement"); and
WHEREAS in order to induce such lenders and NationsCredit Commercial
Corporation, as agent for such lenders to enter into the Credit Agreement,
Security Capital has agreed to enter into a limited guaranty of the
obligations of the Company under the Financing Documents referred to in the
Credit Agreement and to grant a continuing security interest in and to the
Collateral (as hereafter defined) to secure such guaranty;
NOW THEREFORE in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
SECTION 1. Definitions
Terms defined in the Credit Agreement and not otherwise defined herein
have, as used herein, the respective meanings provided for therein. The
following additional terms, as used herein, have the following respective
meanings:
"Cash Collateral Account" has the meaning set forth in Section 5(A).
"Collateral" has the meaning set forth in Section 4.
"Guaranteed Obligations" means all amounts payable by the Company under
the Credit Agreement and any other Financing Document including without
limitation (i) all principal of and interest (including any interest which
accrues after the commencement of any case, proceeding or other action
relating to the bankruptcy, insolvency or reorganization of the Company or
Holdings, whether or not allowed or allowable as a claim in any such
proceeding) on any loan under, or any note issued pursuant to, the Credit
Agreement, (ii) all reimbursement obligations of the Company with respect to
any letter of credit issued pursuant to the Credit Agreement and any interest
thereon (including any interest which accrues after the commencement of any
case, proceeding or other action relating to the bankruptcy, insolvency or
reorganization of the Company or Holdings, whether or not allowed or
allowable as a claim in any such proceeding), (iii) all other amounts payable
by the Company under any Financing Document and (iv) any amendments,
restatements, renewals, extensions or modifications of any of the foregoing;
provided that notwithstanding anything set forth in this Agreement to the
contrary, for purposes of this Agreement, the term "Guaranteed Obligations"
shall mean, at any time, an amount not to exceed, and Security Capital's
obligations with respect to all or part of the Guaranteed Obligations shall
not exceed at any time, the aggregate amount on deposit in the Cash
Collateral Account at such time (or, if greater, the aggregate amount
required to have been deposited by Holdings and the Company in the Cash
Collateral Account from and including the Closing Date to and including such
date pursuant to Section 8.11(b)(y) of the Credit Agreement).
"Secured Obligations" means the Guaranteed Obligations.
"Secured Parties" means the Agent and the Lenders.
"Security Interests" means the security interests in the Collateral
granted hereunder securing the Secured Obligations.
"UCC" means the Uniform Commercial Code as in effect on the date hereof
in the State of New York; provided that if by reason of mandatory provisions
of law, the perfection or the effect of perfection or non-perfection of the
Security Interest in any Collateral is governed by the Uniform Commercial
Code as in effect in a jurisdiction other than New York, "UCC" means the
Uniform Commercial Code as in effect in such other jurisdiction for purposes
of the provisions hereof relating to such perfection or effect of perfection
or non-perfection.
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SECTION 2. Guaranty
(A) Security Capital hereby unconditionally guarantees the full and
punctual payment (whether at stated maturity, upon acceleration or otherwise)
of the Guaranteed Obligations. Upon failure by the Company to pay punctually
any Guaranteed Obligations, Security Capital shall forthwith on demand pay
the amount not so paid at the place and in the manner specified in the Credit
Agreement.
(B) The obligations of Security Capital hereunder are unconditional and
absolute and, without limiting the generality of the foregoing, shall not be
released, discharged or otherwise affected by:
(i) any extension, renewal, settlement, compromise, waiver or release in
respect of any obligation of the Company or Holdings under any Operative
Document, by operation of law or otherwise;
(ii) any modification or amendment of or supplement to any Operative
Document;
(iii) any release, non-perfection or invalidity of any direct or indirect
security for any obligation of the Company or Holdings under any
Operative Document;
(iv) any change in the corporate existence, structure or ownership of the
Company or Holdings or any insolvency, bankruptcy, reorganization or
other similar proceeding affecting the Company or Holdings or any of
their respective assets or any resulting release or discharge of any
obligation of the Company or Holdings contained in any Operative Document;
(v) the existence of any claim, set-off or other rights which Security
Capital may have at any time against the Company, Holdings, the Agent,
any Lender or any other Person, whether in connection herewith or any
unrelated transactions, provided that nothing herein shall prevent the
assertion of any such claim by separate suit or compulsory counterclaim;
(vi) any invalidity or unenforceability relating to or against the
Company or Holdings for any reason of any Operative Document,
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or any provision of applicable law or regulation purporting to prohibit
the payment by the Company or Holdings of the principal of or interest on
any Note or any reimbursement obligation or any other amount payable by
the Company under any Operative Document; or
(vii) any other act or omission to act or delay of any kind by the
Company, Holdings, the Agent, any Lender or any other Person or any other
circumstance whatsoever which might, but for the provisions of this
paragraph, constitute a legal or equitable discharge of Holdings'
obligations hereunder.
(C) Security Capital irrevocably waives acceptance hereof, presentment,
demand, protest and any notice not provided for herein, as well as any
requirement that at any time any action be taken by any Person against the
Company or any other Person.
(D) If acceleration of the time for payment of any amount payable by the
Company under the Financing Documents or any Note is stayed upon the
insolvency, bankruptcy or reorganization of the Company, the obligations of
Security Capital hereunder with respect to all such amounts otherwise subject
to acceleration will nonetheless be performed forthwith on demand by the
Agent (at the request of the Required Lenders).
(E) Security Capital's obligations under this Section 2 shall remain in
full force and effect until the date on which all Secured Obligations shall
have been repaid in full, all Commitments under the Credit Agreement shall
have been terminated and all outstanding Letters of Credit shall have been
terminated or canceled. If at any time any payment of any amount payable by
the Company under the Credit Agreement or any other Financing Document is
rescinded or must be otherwise restored or returned upon the insolvency or
receivership of the Company or otherwise, Security Capital's obligations
hereunder with respect to such payment shall be reinstated as though such
payment had been due but not made at such time.
(F) Upon making any payment with respect to the Company hereunder,
Security Capital shall be subrogated to the rights of the payee against the
Company with respect to such payment; provided that Security Capital shall
not enforce any payment by way of subrogation until all amounts of principal
of and interest on the Loans and all other amounts payable by the Company
under the Credit Agreement and any other Financing Documents have been paid
in full and
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the Commitments of each Lender have been terminated and all Letters of Credit
shall have expired or shall have been canceled.
SECTION 3. Representations and Warranties.
Security Capital represents and warrants as follows:
(A) Security Capital is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Delaware, and
has all corporate powers and all material governmental licenses,
authorizations, consents and approvals required to carry on its business as
now conducted.
(B) The execution, delivery and performance by Security Capital of this
Agreement are within Security Capital's corporate powers, have been duly
authorized by all necessary corporate action, require no action by or in
respect of, or filing with, any governmental body, agency or official and do
not contravene, or constitute a default under, any provision of applicable
law or regulation or of the certificate of incorporation or by-laws of
Security Capital or of any material agreement, judgment, injunction, order,
decree or other instrument binding upon Security Capital.
(C) This Agreement constitutes a valid and binding agreement of Security
Capital, enforceable in accordance with its terms subject, however, to
general principles of equity and to applicable bankruptcy, fraudulent
transfer, insolvency, reorganization, moratorium and other similar laws from
time to time in effect and affecting the enforcement of creditors' rights
generally (regardless of whether such enforcement is considered in a
proceeding in equity or at law).
(D) Security Capital has not performed any acts which might prevent the
Agent from enforcing any of the terms of this Agreement or which would limit
the Agent in any such enforcement.
(E) The Security Interests constitute valid security interests under the
UCC securing the Secured Obligations, to the extent the UCC is applicable
thereto.
SECTION 4. The Security Interests
(A) In order to secure the full and punctual payment and performance of
the Secured Obligations in accordance with the terms thereof, and to secure
the performance of all the obligations of Security Capital hereunder,
Security Capital hereby grants to the Agent for the ratable benefit of the
Secured Parties a continuing security interest in and to all of the following
property of Security
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Capital, whether now owned or existing or hereafter acquired or arising and
regardless of where located (all being collectively referred to as the
"Collateral"):
(1) The Cash Collateral Account, all cash deposited therein from
time to time and the Liquid Investments made pursuant to Section 5(C); and
(2) All Proceeds of all or any of the Collateral described in clause
1 hereof.
(B) The Security Interests are granted as security only and shall not
subject any Secured Party to, or transfer or in any way affect or modify, any
obligation or liability of Security Capital with respect to any of the
Collateral or any transaction in connection therewith.
SECTION 5. Cash Collateral Account
(A) On and after the Closing Date, all cash distributions required to
be deposited by Holdings and the Company pursuant to Section 8.11(b)(y)(A) of
the Credit Agreement shall be delivered to and held by the Agent to be
invested by the Agent in a money market fund (the "Cash Collateral Account")
established by a sponsor selected by the Agent, which such fund shall be
under the exclusive control of the Agent, and which fund shall invest solely
in Temporary Cash Investments; provided that, if an Event of Default has
occurred and is continuing, the Agent shall, if instructed by the Required
Lenders, cause such Temporary Investments to be liquidated and apply or cause
to be applied the proceeds thereof to the payment of the Secured Obligations
in the manner specified in Section 9. Such funds may be commingled with
other funds held by the Agent for investment in such fund, but a separate
accounting shall be maintained by the Agent therefor. Any income received
with respect to the balance from time to time standing to the credit of the
Cash Collateral Account, including any interest or capital gains on Temporary
Cash Investments, shall remain, or be deposited, in the Cash Collateral
Account. All right, title and interest in and to the cash amounts on deposit
from time to time in the Cash Collateral Account together with any Liquid
Investments from time to time made pursuant to subsection (C) of this Section
shall vest in the Agent, shall constitute part of the Collateral hereunder
and shall not constitute payment of the Secured Obligations until applied
thereto as hereinafter provided.
(B) Security Capital shall cause Holdings and the Company to deposit (or
remit if paid by wire transfer) into the Cash Collateral Account all amounts
required to be deposited by Holdings and the Company therein pursuant to
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Section 8.11(b)(y) of the Credit Agreement. In addition to the foregoing,
Security Capital agrees that if any such amounts shall be received by it,
Security Capital shall as promptly as possible deposit such proceeds into the
Cash Collateral Account. Until so deposited, all such amounts shall be held
in trust by Security Capital for and as the property of the Secured Parties
and shall not be commingled with any other funds or property of Security
Capital. Upon the occurrence and continuation of an Event of Default, the
Agent shall, if so instructed by the Required Lenders, apply or cause to be
applied (subject to collection) any or all of the balance from time to time
standing to the credit of the Cash Collateral Account in the manner specified
in Section 9.
SECTION 6. General Authority
Security Capital hereby irrevocably appoints the Agent its true and
lawful attorney, with full power of substitution, in the name of Security
Capital, the Secured Parties or otherwise, for the sole use and benefit of
the Secured Parties, but at the Security Capital's expense, to the extent
permitted by law to exercise, at any time and from time to time while an
Event of Default has occurred and is continuing, the power to sell, transfer,
assign or otherwise deal in the Collateral or with the same or the proceeds
or avails thereof, as fully and effectually as if the Agent were the absolute
owner thereof; provided that the Agent shall give Security Capital not less
than ten days' prior written notice of any intended disposition of any of the
Collateral. Security Capital agrees that such notice constitutes "reasonable
notification" within the meaning of Section 9-504(3) of the UCC.
SECTION 7. Remedies upon Event of Default
If any Event of Default has occurred and is continuing, the Agent may
exercise on behalf of the Secured Parties all rights of a secured party under
the UCC (whether or not in effect in the jurisdiction where such rights are
exercised) and, in addition, the Agent may, without being required to give
any notice, except as herein provided or as may be required by mandatory
provisions of law, withdraw all cash and Liquid Investments in the Cash
Collateral Account and apply such cash and Liquid Investments and other cash,
if any, then held by it as Collateral as specified in Section 9.
SECTION 8. Limitation on Duty of Agent in Respect of Collateral
Beyond the exercise of reasonable care in the custody thereof, the Agent
shall have no duty as to any Collateral in its possession or control or in
the possession or control of any agent or bailee or any income thereon or as
to the
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preservation of rights against prior parties or any other rights pertaining
thereto. The Agent shall be deemed to have exercised reasonable care in the
custody of the Collateral in its possession if the Collateral is accorded
treatment substantially equal to that which it accords its own property, and
shall not be liable or responsible for any loss or damage to any of the
Collateral, or for any diminution in the value thereof, by reason of the act
or omission of any warehouseman, carrier, forwarding agency, consignee or
other agent or bailee selected by the Agent in good faith.
SECTION 9. Application of Proceeds.
Upon the occurrence and during the continuance of an Event of Default,
any cash held in the Cash Collateral Account and all proceeds thereon shall
be applied by the Agent in the following order of priorities:
first, to payment of reasonable compensation to agents and counsel
for the Agent, and all expenses, liabilities and advances incurred or
made by the Agent in connection with any disposition of the Collateral,
and any other unreimbursed expenses for which the Agent or any other
Secured Party is to be reimbursed pursuant to Section 10.04 of the Credit
Agreement or Section 11 hereof and unpaid fees owing to the Agent under
the Credit Agreement;
second, to the ratable payment of unpaid principal of the Secured
Obligations;
third, to the ratable payment of accrued but unpaid interest on the
Secured Obligations in accordance with the provisions of the Credit
Agreement;
fourth, to the ratable payment of all other Secured Obligations,
until all Secured Obligations shall have been paid in full; and
finally, to payment to Security Capital or its successors or assigns,
or as a court of competent jurisdiction may direct, of any surplus then
remaining from such proceeds.
The Agent may make distributions hereunder in cash or in kind or, on a
ratable basis, in any combination thereof.
SECTION 10. Concerning the Agent
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The provisions of Article XI of the Credit Agreement shall inure to the
benefit of the Agent in respect of this Agreement and shall be binding upon
the parties to the Credit Agreement and the parties hereto in such respect.
In furtherance and not in derogation of the rights, privileges and immunities
of the Agent therein set forth:
(A) The Agent is authorized to take all such action as is provided to be
taken by it as Agent hereunder and all other action reasonably incidental
thereto. As to any matters not expressly provided for herein (including the
timing and methods of realization upon the Collateral) the Agent shall act or
refrain from acting in accordance with written instructions from the Required
Lenders or, in the absence of such instructions, in accordance with its
discretion.
(B) The Agent shall not be responsible for the existence, genuineness or
value of any of the Collateral or for the validity, perfection, priority or
enforceability of the Security Interests in any of the Collateral, whether
impaired by operation of law or by reason of any action or omission to act on
its part hereunder. The Agent shall have no duty to ascertain or inquire as
to the performance or observance of any of the terms of this Agreement by
Security Capital.
SECTION 11. Expenses
In the event that Security Capital fails to comply with the provisions
of this Agreement, such that the value of any Collateral or the validity,
perfection, rank or value of any Security Interest is thereby diminished or
potentially diminished or put at risk, the Agent if requested by the Required
Lenders may, but shall not be required to, effect such compliance on behalf
of Security Capital, and Security Capital shall reimburse the Agent for the
reasonable costs thereof on demand. All reasonable expenses of protecting and
maintaining the Collateral, any and all income taxes imposed by any state,
federal, or local authority on any of the Collateral, or in respect of the
disposition thereof shall be borne and paid by Security Capital; and if
Security Capital fails to promptly pay any portion thereof when due, the
Agent or any other Secured Party may, at its option, but shall not be
required to, pay the same and charge Security Capital's account therefor, and
Security Capital agrees to reimburse the Agent or such other Secured Party
therefor on demand. All sums so paid or incurred by the Agent or any other
Secured Party for any of the foregoing and any and all other sums for which
Security Capital may become liable hereunder and all costs and expenses
(including attorneys' fees, legal expenses and court costs (including the
reasonable allocation of the compensation, costs and expenses of in-house
counsel, based upon time spent)) reasonably incurred by the Agent or any other
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Secured Party in enforcing or protecting the Security Interests or any of
their rights or remedies under this Agreement, shall, together with interest
thereon until paid at an annual rate equal to 5% plus the rate announced from
time to time by NationsBank, N.A. as its prime rate, be additional Secured
Obligations hereunder.
SECTION 12. Termination of Security Interests; Release of Collateral.
Upon the repayment in full of all Secured Obligations and the
termination of the Commitments under the Credit Agreement, the Security
Interests shall terminate and all rights to the Collateral shall revert to
Security Capital. At any time and from time to time prior to such termination
of the Security Interests, the Agent may release any of the Collateral with
the prior written consent of the Required Lenders. Upon any such termination
of the Security Interests or release of Collateral, the Agent will, at the
expense of Security Capital, execute and deliver to Security Capital such
documents as Security Capital shall reasonably request to evidence the
termination of the Security Interests or the release of such Collateral, as
the case may be.
SECTION 13. Notices
All notices, communications and distributions hereunder shall be given
in accordance with Section 12.03 of the Credit Agreement and, with resepct to
Security Capital, at its address set forth on the signature pages hereof.
SECTION 14. Waivers, Non-Exclusive Remedies
No failure on the part of the Agent to exercise, and no delay in
exercising and no course of dealing with respect to, any right under this
Agreement shall operate as a waiver thereof; nor shall any single or partial
exercise by the Agent or any Secured Party of any right under the Credit
Agreement, any of the other Financing Documents or this Agreement preclude
any other or further exercise thereof or the exercise of any other right. The
rights in this Agreement, the Credit Agreement and the other Financing
Documents are cumulative and are not exclusive of any other remedies provided
by law.
SECTION 15. Successors and Assigns
This Agreement is for the benefit of the Agent and the Secured Parties
and their successors and assigns, and in the event of an assignment of all or
any of the Secured Obligations, the rights hereunder, to the extent
applicable to the
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indebtedness so assigned, may be transferred with such indebtedness. This
Agreement shall be binding on Security Capital and its successors and assigns.
SECTION 16. Changes in Writing
Neither this Agreement nor any provision hereof may be changed, waived,
discharged or terminated orally, but only in writing signed by Security
Capital and the Agent with the consent of the Required Lenders.
SECTION 17. NEW YORK LAW
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
LAWS OF THE STATE OF NEW YORK (WITHOUT REFERENCE TO PRINCIPLES OR CONFLICTS
OF LAW), EXCEPT AS OTHERWISE REQUIRED BY MANDATORY PROVISIONS OF LAW AND
EXCEPT TO THE EXTENT THAT REMEDIES PROVIDED BY THE LAWS OF ANY JURISDICTION
OTHER THAN NEW YORK ARE GOVERNED BY THE LAWS OF SUCH JURISDICTION.
SECTION 18. Severability
If any provision hereof is invalid or unenforceable in any jurisdiction,
then, to the fullest extent permitted by law, (i) the other provisions hereof
shall remain in full force and effect in such jurisdiction and shall be
liberally construed in favor of the Agent and the other Secured Parties in
order to carry out the intentions of the parties hereto as nearly as may be
possible; and (ii) the invalidity or unenforceability of any provision hereof
in any jurisdiction shall not affect the validity or enforceability of such
provision in any other jurisdiction.
SECTION 19. Counterparts
This Agreement may be signed in any number of counterparts, each of
which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument.
SECTION 20. Additional Covenants.
(A) Security Capital will cause Holdings and each of its Subsidiaries
(including without limitation the Company) to have a separate board of
directors
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at all times. At no time will the board of directors of Holdings or any of
its Subsidiaries have less than two directors who are not serving at such
time on the board of directors of Security Capital or of any Subsidiary of
Security Capital (other than Holdings or any of its Subsidiaries). Security
Capital will cause Holdings and each of its Subsidiaries to, (i) hold all
regular meetings necessary to authorize corporate action, (ii) act in its own
corporate name and through its own authorized officers and agents, (iii)
manage its own liabilities, (iv) prepare and maintain its own separate, full
and complete books, records and financial statements and (v) not permit any
of its money or other assets to be commingled with any of the money or other
assets of any other Person. In addition, Security Capital (i) will have
separate banking relationships from those of Holdings or the Company, (ii)
will have separate employees from those of Holdings or the Company and (iii)
will take all such other steps as the Required Lenders may reasonably request
to assure the legal recognition of its corporate separateness from any of
Holdings or the Company.
(B) Security Capital will not declare, order, pay, make or set aside any
dividends or distributions to any of its shareholders with respect to any
cash or property received by Security Capital from Holdings or any of its
Subsidiaries.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
SECURITY CAPITAL CORPORATION
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
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Title: Chairman
NATIONSCREDIT COMMERCIAL
CORPORATION, AS AGENT
By /s/ ▇▇▇▇▇▇ ▇. Alt
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Title: Authorized Signatory