Exhibit 99.8
INVESTORS SUBORDINATION AGREEMENT
SUBORDINATION AGREEMENT dated as of June 27, 1997 among Pumpkin Ltd., a
Delaware corporation (the "Company"), the Subordinated Obligations Holders
(as defined below) and NationsCredit Commercial Corporation, as Agent (the
"Agent") for the Lenders referred to below.
W I T N E S S E T H:
WHEREAS, the Company, Pumpkin Masters Holdings, Inc., the Lenders party
thereto (the "Lenders") and the Agent are parties to the Credit Agreement (as
defined below); and
WHEREAS, in order to induce the Lenders to enter into such Credit
Agreement, the Company and the Subordinated Obligations Holders have agreed
to enter into this Agreement;
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:
"Credit Agreement" means the Credit Agreement dated as of June 27, 1997,
among the Company, Pumpkin Masters Holdings, Inc., the Lenders and the Agent,
as the same may be amended from time to time.
"Management Agreement" means the Management Advisory Services Agreement
dated as of the date hereof between Security Capital and the Company.
"Senior Commitments" means, without duplication, all commitments to
extend credit (including without limitation any commitments to issue any
letters of credit) and all instruments pursuant to which commitments or
instruments Senior Debt may be incurred (including without limitation any
letters of credit).
"Senior Debt" means all amounts payable with respect to the Credit
Agreement, which include (a) 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
any of its Subsidiaries or Affiliates, 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, (b) all reimbursement obligations of the
Company with respect to any letter of credit issued pursuant to the Credit
Agreement (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 any of its Subsidiaries or Affiliates,
whether or not allowed or allowable as a claim in any such proceeding), (c)
all other amounts payable by the Company or any of its Subsidiaries
thereunder or under any other Financing Document and (d) any amendments,
restatements, renewals, extensions or modifications of any of the foregoing.
"Subordinated Obligations" means (a) all amounts payable by the Company
pursuant to the Management Agreement (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, whether or not
allowed or allowable as a claim in any such proceeding) and any other amounts
payable with respect thereto and (b) any amendments, restatements, renewals,
extensions or modifications of any of the foregoing.
"Subordinated Obligations Holder" means any holder from time to time of
Subordinated Obligations.
SECTION 2. Covenants of Subordinated Obligations Holders. (a)
Each Subordinated Obligations Holder acknowledges and agrees that (i) the
Credit Agreement restricts the ability of the Company and its Subsidiaries to
make payments in respect of Subordinated Obligations and (ii) should any
Subordinated Obligations Holder collect or receive, directly or indirectly,
any payment of any kind or character, whether in cash or property in respect
of any Subordinated Obligations (and whether by way of payment of principal
or interest, redemption, purchase, other acquisition, dividend, distribution,
guarantee, grant of a security interest, realization of security or the
proceeds thereof, set-off, exercise of contractual or statutory rights or
otherwise), (x) at a time when such payment is prohibited by the terms of the
Credit Agreement, (y) through exercise of remedies permitted under Section
2(c) at any time while any Senior Debt or any Senior Commitment is
outstanding or (z) in the event of any insolvency or bankruptcy proceeding or
any receivership, liquidation, reorganization or other similar proceeding in
connection therewith, relative to the Company or to any of its creditors, in
their capacity as creditors of the Company, or to substantially all of its
property, and in the event of any proceedings for voluntary liquidation,
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dissolution or other winding up of the Company, whether or not involving
insolvency or bankruptcy, such Subordinated Obligations Holder will forthwith
deliver the same to the Agent for the equal and ratable benefit of the
holders of Senior Debt in precisely the form received (except for the
endorsement or the assignment of or by such Subordinated Obligations Holder
where necessary) for application to payment of all Senior Debt in full, after
giving effect to any concurrent payment or distribution to the holders of
Senior Debt and, until so delivered, the same shall be held in trust by such
Subordinated Obligations Holder as the property of the holders of Senior Debt.
(b) Unless and until all Senior Debt shall have been paid in full and all
Senior Commitments shall have terminated or been canceled, neither the
Company nor any of its Subsidiaries or Affiliates shall make, and no
Subordinated Obligations Holder shall demand, accept or receive, or shall
attempt to collect or commence any legal proceedings to collect, any direct
or indirect payment (in cash or property or by setoff, exercise of
contractual or statutory rights or otherwise) of or on account of any amount
payable on or with respect to any Subordinated Obligations (including any
payment in respect of redemption or purchase or other acquisition), except
(x) as expressly permitted under clause (i) of Section 8.12 of the Credit
Agreement and (y) as expressly permitted under Section 2(c).
(c) Unless and until all Senior Debt shall have been paid in full and all
Senior Commitments shall have terminated or been canceled, no Subordinated
Obligations Holder will commence or maintain any action, suit or any other
legal or equitable proceeding against the Company or any of its Subsidiaries
or Affiliates, or join with any creditor in any such proceeding; provided
that nothing in this Section 2(c) will preclude any Subordinated Obligations
Holder (i) from commencing at any time any action, suit or any other legal or
equitable proceeding to enforce any remedies to which such Subordinated
Obligations Holder is entitled under the instrument governing the
Subordinated Obligations held by such Subordinated Obligations Holder if at
such time the holders of Senior Debt have commenced an action, suit or
proceeding to enforce substantially similar remedies or (ii) from joining
with any creditor in any such proceeding, under any insolvency, bankruptcy,
receivership, liquidation, reorganization or other similar proceeding if the
holders of Senior Debt have joined in any such proceeding.
(d) Each Subordinated Obligations Holder hereby waives any and all notice
in respect of the Credit Agreement and agrees and consents that without
notice to or assent by such Subordinated Obligations Holder:
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(i) the obligations and liabilities of the Company or any other
party or parties to the Credit Agreement (or any promissory note,
security document or guaranty evidencing or securing the same) may,
from time to time, in whole or in part, be renewed, extended, modified,
amended, restated, accelerated, compromised, supplemented, terminated,
sold, exchanged, waived or released;
(ii) the Agent and the Lenders may exchange, release or surrender any
collateral to the Company or any other Person, waive, release or
subordinate any security interest, obtain a guaranty of any Person or a
security interest in or mortgage or other encumbrance on any additional
property as collateral for any obligations of the Company in its sole
discretion may elect;
(iii) the Agent and the Lenders may apply payments by the Company or
any other Person to such portion of the Secured Obligations (as defined
in the Security Agreements) as they in their sole discretion may elect;
(iv) any Lender may provide additional financing or otherwise extend
credit to the Company;
(v) the Agent and the Lenders may exercise or refrain from exercising
any right, remedy or power granted by or in connection with the Credit
Agreement, any other Financing Documents or any other agreements relating
thereto; and
(vi) any Lender or the Agent may surrender or release, from time to
time, in whole or in part, any balance or balances of funds with the
Agent or any Lender at any time standing to the credit of the Company;
all as the Agent or the Lenders may deem advisable and all without impairing,
abridging, diminishing, releasing or affecting the obligations of the Company
and the Subordinated Obligations Holders hereunder.
(e) Each Subordinated Obligations Holder agrees that it will not contest
the validity, perfection, priority or enforceability of any lien or security
interest granted to secure any Senior Debt or of any guaranty securing Senior
Debt.
SECTION 3. Dissolution, Liquidation or Reorganization of the Company. (a)
In the event of any insolvency or bankruptcy proceedings, and any
receivership, liquidation, reorganization or other similar proceedings in
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connection therewith, relative to the Company or to any of its creditors, in
their capacity as creditors of the Company, or to substantially all of its
property, and in the event of any proceedings for voluntary liquidation,
dissolution or other winding up of the Company, whether or not involving
insolvency or bankruptcy, then:
(i) the holders of the Senior Debt shall first be entitled to receive
payment in full in cash of the principal thereof, premium, if any,
interest and all other amounts payable thereon (accruing before and after
the commencement of the proceedings) before any Subordinated Obligations
Holder is entitled to receive any payment on account or in respect of
Subordinated Obligations; and
(ii) any payment or distribution of assets of the Company of any
kind or character, whether in cash, property or securities to which any
Subordinated Obligations Holder would be entitled, but for the provisions
of this Section 3, shall be paid or distributed by the liquidating
trustee or agent or other Person making such payment or distribution,
whether a trustee in bankruptcy, a receiver or liquidating trustee or
other trustee or agent, directly to the Agent and any other
representative on behalf of the holders of Senior Debt to the extent
necessary to make payment in full of all amounts of Senior Debt remaining
unpaid, after giving effect to any concurrent payment or distribution to
the holders of the Senior Debt.
(b) The Subordinated Obligations Holders shall not be subrogated to the
rights of the holders of the Senior Debt to receive payments or distributions
of assets of the Company until all Senior Debt shall have been paid in full
and all Senior Commitments shall have terminated or been canceled; 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 any
Subordinated Obligations Holder would be entitled except for these provisions
shall, as between the Company, its creditors other than the holders of the
Senior Debt, and such Subordinated Obligations Holder, be deemed to be a
payment by the Company to or on account of the Senior Debt. The provisions of
Sections 2 and 3 of this Agreement are and are intended solely for the
purpose of defining the relative rights of holders of Subordinated
Obligations, on the one hand, and the holders of the Senior Debt, on the
other hand.
(c) Upon payment in full of all Senior Debt and the termination or
cancellation of all Senior Commitments, the Subordinated Obligations Holders
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shall be subrogated (equally and ratably with the holders of all subordinated
indebtedness of the Company, which, by its terms, is not superior in right of
payment to the Subordinated Obligations, and ranks on a parity with the
Subordinated Obligations) to the rights of the holders of Senior Debt to
receive payments or distributions of cash, property or securities of the
Company applicable to the Senior Debt until all amounts owing on the
Subordinated Obligations shall be paid in full. For purposes of such
subrogation, no payments or distributions to the holders of the Subordinated
Obligations of cash, property, securities or other assets by virtue of the
subrogation herein provided which otherwise would have been made to the
holders of the Senior Debt shall, as between the Company, its creditors other
than the holders of Senior Debt and the holders of the Subordinated
Obligations, be deemed to be a payment to or on account of the Subordinated
Obligations. The Subordinated Obligations Holders agree that, in the event
that all or any part of any payment made on account of the Senior Debt is
recovered from the holders of Senior Debt as a preference, fraudulent
transfer or similar payment under any bankruptcy, insolvency or similar law,
any payment or distribution received by the Subordinated Obligations Holders
on account of the Subordinated Obligations at any time after the date of the
payment so recovered, whether pursuant to the right of subrogation provided
for in this Section 3(c) or otherwise, shall be deemed to have been received
by such holders of Subordinated Obligations in trust as the property of the
holders of the Senior Debt and such holders shall forthwith deliver the same
to the Agent for the equal and ratable benefit of the holders of the Senior
Debt for application to payment of all Senior Debt in full.
(d) Each Subordinated Obligations Holder agrees that, if an order for
relief under the Bankruptcy Code is entered for or against the Company, it
will not oppose any motion of the Company for an order under the Bankruptcy
Code authorizing the Company: (i) to obtain new credit from and incur
additional indebtedness to the holders of Senior Debt (which indebtedness,
inclusive of all interest and other charges which may accrue in respect
thereof, is sometimes hereinafter referred to as the "Post-Petition
Indebtedness") with such indebtedness to have priority over any or all
administrative expenses of the kind specified in Section 503(b) or 507(b) of
the Bankruptcy Code in accordance with Section 364(c)(1) of the Bankruptcy
Code; (ii) to secure repayment of the Post-Petition Indebtedness by granting
the holders of Senior Debt liens on and security interests in the assets of
the Company that are created or acquired after the commencement of any such
case under the Bankruptcy Code, which shall be senior and prior to any and
all other liens, security interests and other claims (the "Post-Petition
Collateral"), and (iii) to secure repayment of amounts then owing to the
holders of Designated Debt under the Credit Agreement or the other Financing
Documents by granting to the holders of Senior Debt a security interest
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in the Post-Petition Collateral. In the event that the holders of Senior Debt
commence an adversary proceeding for relief from the automatic stay under
Section 362 of the Bankruptcy Code, each Subordinated Obligations Holder
agrees that it will not oppose such proceeding.
SECTION 4. Representations and Warranties. Each Subordinated Obligations
Holder represents and warrants that:
(a) The execution, delivery and performance by him of this Agreement
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 any agreement, judgment,
injunction, order, decree or other instrument binding upon him.
(b) This Agreement constitutes a valid and binding agreement of such
Subordinated Obligations Holder.
SECTION 5. Other Agreements. (a) Each Subordinated Obligations Holder
acknowledges and agrees that the Credit Agreement restricts the Company and
any of its Subsidiaries from agreeing to any amendment or waiver of any of
the terms and conditions of the Operative Documents unless it obtains the
prior written consent of the Required Lenders.
(b) Each Subordinated Obligations Holder acknowledges and agrees that
the holders of Senior Debt have relied upon and will continue to rely upon
the covenants of the Company and the Subordinated Obligations Holders
contained herein in entering into the Credit Agreement and in extending
credit to the Company pursuant thereto.
SECTION 6. Binding Effect; Restrictions on Transfer. The covenants of the
Subordinated Obligations Holders contained herein shall be binding upon any
Subordinated Obligations Holder and upon their respective heirs, legal
representatives, successors and assigns. Each Subordinated Obligations Holder
agrees that it will not assign, pledge or otherwise transfer, for security
purposes or otherwise, any interest in the Subordinated Obligations held by
him.
SECTION 7. No Partnership. Nothing contained in this Agreement, and no
action taken by the holders of Senior Debt (or any of them) pursuant hereto,
is intended to constitute or shall be deemed to constitute the holders of
Senior Debt a partnership, association, joint venture or other entity.
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SECTION 8. Notices. Unless otherwise specified herein, all notices,
requests and other communications to any party hereunder shall be in writing
(including telex, facsimile copy or similar writing) and shall be given to
such party at its address or facsimile number set forth on the signature
pages hereof or such other address or telex or facsimile number as such party
may hereafter specify for the purpose by notice to the other parties hereto.
SECTION 9. Amendments and Waivers. Any provision of this Agreement may be
amended or waived if, and only if, such amendment or waiver is in writing and
signed by the Company and each Subordinated Obligations Holder whose rights
or duties are affected thereby and each holder of Senior Debt whose rights or
duties are affected thereby.
SECTION 10. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK. EACH PARTY
HERETO HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY
UNITED STATES FEDERAL OR NEW YORK STATE COURT SITTING IN THE CITY OF NEW YORK
FOR PURPOSES OF ANY SUIT, ACTION OR OTHER PROCEEDING ARISING OUT OF OR IN
CONNECTION WITH THIS AGREEMENT THAT MAY BE BROUGHT OR INSTITUTED AGAINST IT.
SECTION 11. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, and all of which taken
together shall constitute a single agreement, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
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IN WITNESS WHEREOF, the parties hereto have executed or have caused this
Agreement to be duly executed as of the date hereof by their respective
officers thereunto duly authorized.
NATIONSCREDIT COMMERCIAL
CORPORATION, as Agent
By: /s/ Xxxxxx X. Alt
-----------------------
Title: Authorized Signatory
Address: Xxx XxxxxxxxxxXxxxx
X.X. Xxx 000000
Xxxxxxxx, XX 00000-0000
Telecopy: 000-000-0000
PUMPKIN LTD.
By: /s/ Xxxxxx Xxxxxx
---------------------------
Title: Vice President
Address: c/o Capital Partners
Xxx Xxxxxxxx Xxxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
Telecopy: 203-625-0423
SECURITY CAPITAL CORPORATION
By: /s/ A. Xxxxxx Xxxxxxxx
------------------------------
Title: President
Address: c/o Capital Partners
Xxx Xxxxxxxx Xxxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
Telecopy: 000-000-0000
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