Exhibit 99.5
COMPANY SECURITY AGREEMENT
AGREEMENT dated as of June 27, 1997 between Pumpkin Ltd., a Delaware
corporation (together with its successors, the "Company"), and NationsCredit
Commercial Corporation, as Agent for the Lenders referred to below.
W I T N E S S E T H :
WHEREAS the Company, Pumpkin Masters Holdings, Inc., 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, the
Company has agreed to grant a continuing security interest in and to the
Collateral (as hereafter defined) to secure its obligations under the Financing
Documents referred to in the Credit 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:
"Accounts" means all "accounts" (as defined in the UCC) now owned or
hereafter acquired by the Company, and shall also mean and include all accounts
receivable, contract rights, book debts, notes, drafts and other obligations or
indebtedness owing to the Company arising from the sale, lease or exchange of
goods or other property by it and/or the performance of services by it
(including any such obligation which might be characterized as an account,
contract right or general intangible under the Uniform Commercial Code in effect
in any jurisdiction) and all of the Company's rights in, to and under all
purchase orders for goods, services or other property, and all of the Company's
rights to any goods, services or other property represented by any of the
foregoing (including returned or repossessed goods and unpaid sellers' rights of
rescission, replevin, reclamation and rights to stoppage in transit) and all
monies due to or to become due to the Company under all contracts for the sale,
lease or exchange of goods or other property and/or the performance of services
by it (whether or not yet earned by performance on the part of the Company), in
each case whether now in existence or hereafter arising or acquired including,
without limitation, the right to receive the proceeds of said purchase orders
and contracts and all collateral security and guarantees of any kind given by
any Person with respect to any of the foregoing.
"Collateral" has the meaning set forth in Section 3.
"Collateral Accounts" means the Lockbox Account and the Insurance Account.
"Copyrights" means all of the following: (i) all copyrights under the laws
of the United States or any other country (whether or not the underlying works
of authorship have been published), all registrations and recordings thereof,
all intellectual property rights to works of authorship (whether or not
published), ad all applications for copyrights under the laws of the United
States or any other country, including, without limitation, registrations,
recordings and applications in the United States Copyright Office or in any
similar office or agency of the United States, any State thereof or any other
country or any political subdivision thereof, including, without limitation,
those described in Schedule 1 to Exhibit E hereto, (ii) all reissues, renewals
or extensions thereof, (iii) all claims for, and rights to ▇▇▇ for, past or
future infringements of any of the foregoing, and (iv) all income, royalties,
damages and payments now or hereafter due or payable with respect to
2
any of the foregoing, including, without limitigation, damages and payments
for AST or future infringements thereof.
"Copyright License"means any written agreement now or hereafter in
existence granting to the Company the right to use any Copyright.
"Copyright Security Agreement" means a Copyright Security Agreement
executed and delivered by a Grantor in favor of the Agent, for the benefit of
the Secured Parties, substantially in the form of Exhibit E hereto, as the same
may be amended from time to time.
"Documents" means all "documents" (as defined in the UCC) or other receipts
covering, evidencing or representing goods, now owned or hereafter acquired by
the Company.
"Equipment" means all "equipment" (as defined in the UCC) now owned or
hereafter acquired by the Company, including without limitation all motor
vehicles, trucks, trailers, railcars and barges.
"General Intangibles" means all "general intangibles" (as defined in the
UCC) now owned or hereafter acquired by the Company, including (i) all
obligations or indebtedness owing to the Company (other than Accounts) from
whatever source arising, (ii) all Patents, Patent Licenses, Trademarks,
Trademark Licenses, Copyrights, Copyright Licenses rights in intellectual
property, goodwill, trade names, service marks, trade secrets, permits and
licenses, (iii) all rights or claims in respect of refunds for taxes paid and
(iv) all rights in respect of any pension plan or similar arrangement maintained
for employees of any member of the ERISA Group.
"Instruments" means all "instruments", "chattel paper" or "letters of
credit" (each as defined in the UCC), including those evidencing, representing,
arising from or existing in respect of, relating to, securing or otherwise
supporting the payment of, any of the Accounts, including (but not limited to)
promissory notes, drafts, bills of exchange and trade acceptances, now owned or
hereafter acquired by the Company.
"Insurance Account" has the meaning set forth in Section 5(C).
"Insurance Proceeds" has the meaning set forth in Section 5(C).
"Inventory" means all "inventory" (as defined in the UCC), now owned or
hereafter acquired by the Company, wherever located, and shall also mean and
3
include all raw materials and other materials and supplies, work-in-process
and finished goods and any products made or processed therefrom and all
substances, if any, commingled therewith or added thereto.
"Liquid Investments" has the meaning set forth in Section 5(E).
"Lockbox Account" has the meaning set forth in Section 5(A).
"Lockbox Agreement" has the meaning set forth in Section 5(A).
"Lockbox Bank" has the meaning set forth in Section 5(A).
"Patent License" means any agreement now or hereafter in existence granting
to the Company, or pursuant to which the Company has granted to any other
Person, any right with respect to any Patent or any invention now or hereafter
in existence, whether patentable or not, whether a patent or application for
patent is in existence on such invention or not, and whether a patent or
application for patent on such invention may come into existence.
"Patents" means all the following: (i) all letters patent and design
letters patent of the United States or any other country and all applications
for letters patent and design letters patent of the United States or any other
country, including, without limitation, applications in the United States Patent
and Trademark Office or in any similar office or agency of the United States,
any State thereof or any other country or any political subdivision thereof,
(ii) all reissues, divisions, continuations, continuations-in-part, renewals and
extensions thereof, (iii) all claims for, and rights to ▇▇▇ for, past or future
infringements of any of the foregoing and (iv) all income, royalties, damages
and payments now or hereafter due or payable with respect to any of the
foregoing, including, without limitation, damages and payments for past or
future infringements thereof.
"Patent Security Agreement" means the Patent Security Agreement executed
and delivered by the Company in favor of the Agent, for the benefit of the
Secured Parties, substantially in the form of Exhibit C hereto, as the may be
amended from time to time.
"Perfection Certificate" means a certificate substantially in the form of
Exhibit A, completed and supplemented with the schedules and attachments
contemplated thereby to the satisfaction of the Agent, and duly executed by the
chief executive officer and the chief legal officer of the Company.
4
"Permitted Liens" means the Security Interests and the Liens on the
Collateral permitted to be created, to be assumed or to exist pursuant to
Section 8.02 of the Credit Agreement.
"Proceeds" means all proceeds of, and all other profits, products, rents or
receipts, in whatever form, arising from the collection, sale, lease, exchange,
assignment, licensing or other disposition of, or other realization upon,
collateral, including all claims of the Company against third parties for loss
of, damage to or destruction of, or for proceeds payable under, or unearned
premiums with respect to, policies of insurance in respect of, any collateral,
and any condemnation or requisition payments with respect to any collateral, in
each case whether now existing or hereafter arising.
"Secured Obligations" means the obligations secured under this 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, 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 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 whether or not
allowed or allowable as a claim in any such proceeding), (c) all other amounts
payable by the Company hereunder or under any other Financing Document, (d) all
other obligations of the Company hereunder and the other Financing Documents and
(e) any amendments, restatements, renewals, extensions or modifications of any
of the foregoing.
"Secured Parties" means the Agent and the Lenders.
"Security Interests" means the security interests in the Collateral granted
hereunder securing the Secured Obligations.
"Trademarks" means all of the following: (i) all trademarks, trade names,
corporate names, company names, business names, trade styles, service marks,
logos, brand names, trade dress, prints and labels on which any of the foregoing
have appeared or appear, package and other designs, and any other source or
business identifiers, designs and general intangibles of like nature, now
existing or hereafter adopted or acquired, all registrations and recordings
thereof, and all applications in connection therewith, including registrations,
recordings and applications in the United States Patent and Trademark Office or
in any similar
5
office or agency of the United States, any State thereof or any
other country or any political subdivision thereof, including those described in
the Perfection Certificate, (ii) the goodwill of the business symbolized thereby
or associated with each of them, (iii) all reissues, extensions and renewals
thereof, (iv) all claims for, and rights to ▇▇▇ for, past or future
infringements of any of the foregoing and (v) all income, royalties, damages and
payments now or hereafter due or payable with respect to any the foregoing,
including, without limitation, damages and payments for past or future
infringements thereof.
"Trademark License" means any written agreement now or hereafter in
existence granting to the Company any right to use any Trademark.
"Trademark Security Agreement" means the Trademark Security Agreement
executed and delivered by the Company in favor of the Agent, for the benefit of
the Secured Parties, substantially in the form of Exhibit D hereto, as the same
may be amended from time to time.
"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.
SECTION 2. Representations and Warranties
The Company represents and warrants as follows:
(A) The Company has good and marketable title to all of the Collateral
(except any Collateral (other than Accounts and Inventory) leased by the Company
as lessee), free and clear of any Liens other than the Permitted Liens. The
Company has taken all actions necessary under the UCC to perfect its interest in
any Accounts purchased or otherwise acquired by it, as against its assignors and
creditors of its assignors.
(B) The Company 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. Other than financing statements or other similar or
equivalent documents or instruments with respect to the Security Interests and
Permitted Liens, no financing statement, mortgage, security
6
agreement or similar or equivalent document or instrument covering all or any
part of the Collateral is on file or of record in any jurisdiction in which
such filing or recording would be effective to perfect a Lien on such
Collateral. No Collateral is in the possession of any Person (other than the
Company) asserting any claim thereto or security interest therein, except
that the Agent or its designee may have possession of Collateral as
contemplated hereby.
(C) The information set forth in the Perfection Certificate delivered to
the Agent prior to the Closing Date is correct and complete after giving effect
to the consummation of the Acquisition. Not later than 30 days following the
Closing Date, the Company shall furnish to the Agent file search reports from
each UCC filing office set forth in Schedule 7 to the Perfection Certificate
confirming the filing information set forth in such Schedule.
(D) The Security Interests in the Collateral in which a security interest
can be created under the UCC constitute valid security interests under the UCC
securing the Secured Obligations. When UCC financing statements in the form
specified in Exhibit A shall have been filed in the offices specified in the
Perfection Certificate, the Security Interests shall constitute perfected
security interests in the Collateral (except Inventory in transit) to the extent
that a security interest therein may be perfected by filing pursuant to the UCC,
prior to all other Liens and rights of others therein except for the Permitted
Liens. When in addition the Patent Security Agreement, the Trademark Security
Agreement and Copyright Security Agreement have been recorded with the United
States Patent and Trademark Office or United States Copyright Office, as the
case may be and UCC financing statements in the form specified in Exhibit A
shall have been filed with offices specified in the Perfection Certificate with
respect to the Patents listed in Schedule I to such Patent Security Agreement,
the Trademarks listed in Schedule 1 to such Trademark Security Agreement, and
the Copyright listed in Schedule I to such Copyright Security Agreement the
Security Interests shall constitute perfected Security Interests in all right,
title and interest of the Company in such Patents and Trademarks therein
described, prior to all other Liens and rights of others therein except
Permitted Liens.
(E) The Inventory and Equipment are insured in accordance with the
requirements of the Credit Agreement.
(F) All Inventory has or will have been produced in compliance with the
applicable requirements of the Fair Labor Standards Act, as amended.
SECTION 3. The Security Interests
7
(A) In order to secure the full and punctual payment and performance of the
Secured Obligations in accordance with the terms thereof, the Company 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 the Company,
whether now owned or existing or hereafter acquired or arising and regardless of
where located (all being collectively referred to as the "Collateral"):
(1) Accounts;
(2) Inventory;
(3) General Intangibles;
(4) Documents;
(5) Instruments;
(6) Equipment;
(7) The Lockbox Account and the Insurance Account, all cash deposited in
either of the foregoing from time to time, the Liquid Investments made pursuant
to Section 5(E) and other monies and property of any kind of the Company in the
possession or under the control of the Agent;
(8) All books and records (including customer lists, credit files, computer
programs, printouts and other computer materials and records) of the Company
pertaining to any of the Collateral; and
(9) All Proceeds of all or any of the Collateral described in Clauses 1
through 8 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 the Company with respect to any of the Collateral or
any transaction in connection therewith.
8
SECTION 4. Further Assurances; Covenants
(A) The Company will not change its name, identity or corporate structure
in any manner unless it shall have given the Agent prior notice thereof and
delivered an opinion of counsel with respect thereto in accordance with Section
4(M). The Company will not change (i) the location of its chief executive office
or chief place of business or (ii) the locations where it keeps or holds any
Collateral or any records relating thereto from the applicable location
described in the Perfection Certificate unless it shall have given the Agent
prior notice thereof and delivered an opinion of counsel with respect thereto in
accordance with Section 4(M).
(B) The Company will, from time to time, at its expense, execute, deliver,
file and record any statement, assignment, instrument, document, agreement or
other paper and take any other action (including, without limitation, any
filings of financing or continuation statements under the UCC and the
registration in the United States Patent and Trademark Office or United States
Copyright Office, as the case may be, of any unregistered Patent, Trademark or
Copyright that is material to the business of the Company, now owned or later
acquired by the Company) that from time to time may be necessary or desirable,
or that the Agent may request, in order to create, preserve or perfect the
Security Interests or to enable the Secured Parties to obtain the full benefits
of this Agreement, or to enable the Agent to exercise and enforce any of its
rights, powers and remedies hereunder with respect to any of the Collateral. To
the extent permitted by applicable law, the Company hereby authorizes the Agent,
and appoints the Agent as its true and lawful attorney (with full power of
substitution, in the name of the Company, the Secured Parties or otherwise, for
the sole use and benefit of the Secured Parties), to execute and file financing
statements or continuation statements without the Company's signature appearing
thereon. The Company agrees that a carbon, photographic, photostatic or other
reproduction of this Agreement or of a financing statement is sufficient as a
financing statement. The Company shall pay the costs of, or incidental to, any
recording or filing of any financing or continuation statements concerning the
Collateral.
(C) If any Collateral is at any time in the possession or control of any
warehouseman, bailee or any of the Company's agents or processors, the Company
shall notify such warehouseman, bailee, agent or processor of the Security
Interests created hereby and to hold all such Collateral for the Agent's account
subject to the Agent's instructions.
(D) The Company shall keep full and accurate books and records relating to
the Collateral, and stamp or otherwise ▇▇▇▇ such books and records in such
9
manner as the Required Lenders may reasonably require in order to reflect the
Security Interests.
(E) The Company will immediately deliver and pledge each Instrument to the
Agent, appropriately endorsed to the Agent, provided that so long as no Event of
Default shall have occurred and be continuing, the Company may retain for
collection in the ordinary course any Instruments (other than checks and drafts
constituting payments in respect of Accounts, as to which the provisions of
Section 5(B) shall apply) received by it in the ordinary course of business and
the Agent shall, promptly upon request of the Company, make appropriate
arrangements for making any other Instrument pledged by the Company available to
it for purposes of presentation, collection or renewal (any such arrangement to
be effected, to the extent deemed appropriate to the Agent, against trust
receipt or like document).
(F) The Company shall use its best efforts to cause to be collected from
its account debtors, as and when due, any and all amounts owing under or on
account of each Account (including Accounts which are delinquent, such Accounts
to be collected in accordance with lawful collection procedures) and shall apply
forthwith upon receipt thereof all such amounts as are so collected to the
outstanding balance of such Account. Subject to the rights of the Secured
Parties hereunder upon the occurrence and during the continuance of an Event of
Default, the Company may allow in the ordinary course of business as adjustments
to amounts owing under its Accounts (i) an extension or renewal of the time or
times of payment, or settlement for less than the total unpaid balance, which
the Company finds appropriate in accordance with sound business judgment unless
such extension, renewal or settlement results in causing such Account to not be
an Eligible Receivable and thereby causes the aggregate unpaid balance of
Working Capital Borrowings to exceed the Borrowing Base and (ii) a refund or
credit due as a result of returned or damaged merchandise or as a discount for
prompt payment, all in accordance with the Company's ordinary course of business
consistent with its historical collection practices. The costs and expenses
(including attorney's fees) of collection, whether incurred by the Company or
the Agent, shall be borne by the Company.
(G) Upon the occurrence and during the continuance of any Event of Default,
upon request of the Required Lenders through the Agent, the Company will
promptly notify (and the Company hereby authorizes the Agent so to notify) each
account debtor in respect of any Account or Instrument that such Collateral has
been assigned to the Agent hereunder, and that any payments due or to become due
in respect of such Collateral are to be made directly to the Agent or its
designee.
10
(H) Upon the occurrence and during the continuance of any Event of Default,
the Company shall deliver to the Agent any and all certificates of title,
applications for title or similar evidence of ownership of the Equipment owned
at such time by the Company and shall cause the Agent to be named as lienholder
on any such certificate of title or other evidence of ownership. The Company
shall not permit any such items to become a fixture to real estate (unless the
Agent has a first priority Lien thereon pursuant to the Mortgage) or an
accession to other personal property.
(I) Without the prior written consent of the Required Lenders, the Company
will not sell, lease, exchange, assign or otherwise dispose of, or grant any
option with respect to, any Collateral except, subject to the rights of the
Secured Parties hereunder if an Event of Default shall have occurred and be
continuing, as permitted under the Credit Agreement including Section 8.06,
whereupon, in the case of such a sale or exchange, the Security Interests
created hereby in such item (but not in any Proceeds arising from such sale or
exchange) shall cease immediately without any further action on the part of the
Agent.
(J) The Company will, promptly upon request, provide to the Agent all
information and evidence it may reasonably request concerning the Collateral to
enable the Agent to enforce the provisions of this Agreement.
(K) From time to time upon request by the Agent, the Company shall, at its
cost and expense, cause to be delivered to the Secured Parties an opinion of
counsel satisfactory to the Agent as to such matters relating to the
transactions contemplated hereby as the Required Lenders may reasonably request.
(L) The Company shall promptly notify the Agent if it knows that any
application or registration relating to any Patent, Trademark, or Copyright may
become abandoned or canceled or of any adverse determination or development
(including the institution of, or any such determination or development in, any
proceeding in the United States Patent and Trademark Office or the United States
Copyright Office, as the case may be, or any court) regarding the Company's
ownership of any Patent, Trademark or Copyright, its right to register the same,
or to keep and maintain the same. In the event that any right to any Patent,
Patent License, Trademark, Trademark License Copyright or Copyright License is
infringed, misappropriated or diluted by a third party, the Company shall notify
the Agent promptly after it learns thereof and shall, unless the Company shall
reasonably determine that any such action would be of negligible economic value,
take such action as the Company shall reasonably deem appropriate under the
circumstances to protect such Patent, Patent License, Trademark, Trademark
License Copyright or Copyright License. In no event shall the Company, either
11
itself or through any agent, employee or licensee, file an application for
the registration of any material Patent, Trademark or Copyright with the
United States Patent and Trademark Office or the United States Copyright
Office, as the case may be, or with any similar office or agency in any other
country or any political subdivision thereof, unless it promptly executes,
delivers and files any and all agreements, instruments, documents and papers,
if any, the Agent may request to evidence the Security Interest in such
Patent, Trademark or Copyright and the goodwill and general intangibles of
the Company relating thereto or represented thereby. The Company hereby
appoints the Agent as its true and lawful attorney (with full power of
substitution, in the name of the Company, the Secured Parties or otherwise,
for the sole use and benefit of the Secured Parties) to execute, deliver and
file all such writings for the foregoing purposes upon failure by the Company
to promptly execute, deliver or file any such writings or otherwise fail to
comply with any provision of this paragraph; (L) such power, being coupled
with an interest, shall be irrevocable until the Secured Obligations are paid
in full.
(M) Not more than six months nor less than 30 days prior to the date on
which the Company proposes to take any such action contemplated by Section 4(A),
the Company shall have given notice to the Agent of such proposed action, and,
at the Company's cost and expense, caused to be delivered to the Secured Parties
with such notice, an opinion of counsel, satisfactory to the Agent,
substantially in the form of Exhibit B, to the effect that all financing
statements and amendments or supplements thereto, continuation statements and
other documents required to be recorded or filed in order to perfect and protect
the Security Interests for a period (and after giving effect to the proposed
action that is the subject of such notice), specified in such opinion,
continuing until a date not earlier than eighteen months from the date of such
opinion, against all creditors of and purchasers from the Company have been
filed in each filing office necessary for such purpose and that all filing fees
and taxes, if any, payable in connection with such filings have been paid in
full.
(N) On or prior to the Closing Date, the Company will cause the Agent to be
named as an insured party and loss payee on each insurance policy covering risks
relating to any of its Inventory and Equipment. The Company will deliver to the
Agent, upon the request of the Agent, the insurance policies for such insurance.
Each such insurance policy shall include effective waivers by the insurer of all
claims for insurance premiums against any Secured Party, provided that all
insurance proceeds in excess of $500,000 per claim shall be adjusted with and
payable to the Agent and provide that no cancellation or termination thereof
shall be effective until at least 30 days after receipt by the Agent of written
notice thereof. The Company hereby appoints the Agent as its attorney-in-fact to
make proof of loss, claim for insurance and adjustments with insurers, and to
execute or
12
endorse all documents, checks or drafts in connection with payments made as a
result of any such insurance policies.
SECTION 5. Lockbox Account and Insurance Account
(A) Within 30 days of the Closing Date, the Agent and the Company shall
establish, pursuant to a lockbox agreement in form and substance reasonably
satisfactory to the Agent (the "Lockbox Agreement"), a bank account (the
"Lockbox Account") with [Name of Lockbox Bank] (the "Lockbox Bank"), in the name
["Pumpkin Ltd."] -- NationsCredit Commercial Corporation, as Agent", and under
the exclusive control of the Agent, into which there shall be deposited from
time to time the cash proceeds of the Collateral required to be delivered to the
Agent pursuant to subsection (B) of this Section 5 or any other provision of
this Agreement. Any income received with respect to the balance from time to
time standing to the credit of the Lockbox Account, including any interest or
capital gains on Liquid Investments, shall remain, or be deposited, in the
Lockbox Account. All right, title and interest in and to the cash amounts on
deposit from time to time in the Lockbox Account together with any Liquid
Investments from time to time made pursuant to subsection (E) 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) Upon the occurrence and during the continuance of an Event of Default,
the Company shall instruct all account debtors and other Persons obligated in
respect of all Accounts to make all payments in respect of the Accounts and
shall use its best efforts to cause such account debtors and other Persons to
remit all such payments directly to the Lockbox Account (if paid by wire
transfer) or to a post office box that is subject to the Lockbox Agreement, for
deposit into the Lockbox Account. In addition to the foregoing, the Company
agrees that if the proceeds of any Collateral hereunder (including the payments
made in respect of Accounts) shall be received by it, the Company, subject to
subsection (C) of this Section, shall as promptly as possible deposit such
proceeds into the Lockbox Account. Until so deposited, all such proceeds shall
be held in trust by the Company for and as the property of the Secured Parties
and shall not be commingled with any other funds or property of the Company. The
balance from time to time standing to the credit of the Lockbox Account shall,
except upon the occurrence and continuation of an Event of Default, be
distributed to the Company in accordance with the provisions of the Lockbox
Agreement. If immediately available cash on deposit in the Lockbox Account is
not sufficient to make any distribution to the Company referred to in the
previous sentence of this Section 5(B), the Agent shall cause to be liquidated
as promptly as practicable
13
Liquid Investments in the Lockbox Account designated by the Company as
required to obtain sufficient cash to make such distribution and,
notwithstanding any other provision of this Section 5, such distribution
shall not be made until such liquidation has taken place. 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
Lockbox Account in the manner specified in Section 9.
(C) Promptly upon and at all times after the receipt of any cash proceeds
of insurance policies, awards of condemnation or other compensation required to
be paid to the Agent pursuant to Section 7.04(b) or 7.04(c) of the Credit
Agreement (the "Insurance Proceeds"), the Company shall establish and shall
thereafter maintain an additional cash collateral account (the "Insurance
Account") at the offices of the Lockbox Bank or such other bank as the Company
and the Agent may agree (the "Insurance Account Bank"), in the name and under
the control of the Agent. Forthwith upon such establishment, the Company shall
notify the Agent of the location, account name and account number of such
account. The Company hereby agrees to cause any Insurance Proceeds received from
time to time after the establishment of the Insurance Account to be deposited
therein as set forth in this paragraph. Any income received with respect to the
balance from time to time standing to the credit of the Insurance Account,
including any interest or capital gains on Liquid Investments, shall remain, or
be deposited, in the Insurance Account. All right, title and interest in and to
the cash amounts on deposit from time to time in the Insurance Account together
with any Liquid Investments from time to time made pursuant to subsection (E) 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. The Agent shall apply to repayment of
the Tranche A Loans and Tranche B Loans, respectively, those amounts on deposit
in the Insurance Account which are required to be applied to the repayment of
the Tranche A Loans in accordance with Section 2.04(b)(ii) of the Credit
Agreement or to repayment of the Tranche B Loans in accordance with Section
3.04(b)(ii) of the Credit Agreement.
(D) The balance from time to time standing to the credit of the Insurance
Account (to the extent not applied pursuant to the last sentence of Section
5(C)) shall be subject to withdrawal only upon the instructions of the Agent.
Except upon the occurrence and continuation of an Event of Default, the Agent
agrees to give instructions to distribute such amounts to the Company at such
times and in such amounts (other than amounts attributable to proceeds deposited
in the Insurance Account pursuant to Section 7.04(c) of the Credit Agreement) as
the
14
Company shall request for the purpose of repairing, reconstructing or
replacing the property or for the purpose of reimbursing expenses in respect
of which such Insurance Proceeds were received. Any such request shall be
accompanied by a certificate of the chief financial officer or treasurer of
the Company setting forth in detail reasonably satisfactory to the Required
Lenders the repair, reconstruction or replacement for which such funds will
be expended. If immediately available cash on deposit in the Insurance
Account is not sufficient to make any distribution to the Company referred to
in the previous sentence of this Section 5(D), the Agent shall cause to be
liquidated as promptly as practicable such Liquid Investments in the
Insurance Account designated by the Company as required to obtain sufficient
cash to make such distribution and, notwithstanding any other provision of
this Section 5, such distribution shall not be made until such liquidation
has taken place. 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 Insurance Account in the manner specified
in Section 9.
(E) Amounts on deposit in the Lockbox Account and the Insurance Account
shall be invested and re-invested from time to time in such Liquid Investments
as the Company shall determine, which Liquid Investments shall be held in the
name and be under the control of the Agent; provided that, if an Event of
Default has occurred and is continuing, the Agent shall, if instructed by the
Required Lenders, cause such Liquid 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. For this purpose, "Liquid
Investments" means Temporary Cash Investments; provided that (i) each Liquid
Investment shall mature within 30 days after it is acquired by the Agent and
(ii) in order to provide the Agent, for the benefit of the Secured Parties, with
a perfected security interest therein, each Liquid Investment shall be either:
(i) evidenced by negotiable certificates or instruments, or
if non-negotiable then issued in the name of the Agent, which
(together with any appropriate instruments of transfer) are
delivered to, and held by, the Agent or an agent thereof (which
shall not be the Company or any of its Affiliates) in the State
of New York; or
(ii) in book-entry form and issued by the United States and
subject to pledge under applicable state law and Treasury
regulations and as to which (in the opinion of counsel to the
Agent) appropriate
15
measures shall have been taken for perfection of the Security
Interests.
SECTION 6. General Authority
The Company hereby irrevocably appoints the Agent its true and lawful
attorney, with full power of substitution, in the name of the Company, the
Secured Parties or otherwise, for the sole use and benefit of the Secured
Parties, but at the Company'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, all or any of the following powers with respect to
all or any of the Collateral:
(i) to demand, ▇▇▇ for, collect, receive and give acquittance
for any and all monies due or to become due thereon or by virtue
thereof,
(ii) to settle, compromise, compound, prosecute or defend any
action or proceeding with respect thereto,
(iii) to sell, transfer, assign or otherwise deal in or with
the same or the proceeds or avails thereof, including without
limitation for the implementation of any lease, assignment,
license, sublicense, grant of option, sale or other deposition
of any Patent or Trademark or any action related thereto, as
fully and effectually as if the Agent were the absolute owner
thereof, and
(iv) to extend the time of payment of any or all thereof and to
make any allowance and other adjustments with reference thereto;
provided that the Agent shall give the Company not less than ten days' prior
written notice of the time and place of any sale or other intended disposition
of any of the Collateral, except any Collateral which is perishable or threatens
to decline speedily in value or is of a type customarily sold on a recognized
market. The Company 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
(A) 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
16
as herein provided or as may be required by mandatory provisions of law, (i)
withdraw all cash and Liquid Investments in the Collateral Accounts and apply
such cash and Liquid Investments and other cash, if any, then held by it as
Collateral as specified in Section 9 and (ii) if there shall be no such cash
or Liquid Investments or if such cash and Liquid Investments shall be
insufficient to pay all the Secured Obligations in full, sell the Collateral
or any part thereof at public or private sale, for cash, upon credit or for
future delivery, and at such price or prices as the Agent may deem
satisfactory. The Agent or any other Secured Party may be the purchaser of
any or all of the Collateral so sold at any public sale (or, if the
Collateral is of a type customarily sold in a recognized market or is of a
type which is the subject of widely distributed standard price quotations, at
any private sale). The Company will execute and deliver such documents and
take such other action as the Agent deems necessary or advisable in order
that any such sale may be made in compliance with law. Upon any such sale the
Agent shall have the right to deliver, assign and transfer to the purchaser
thereof the Collateral so sold. Each purchaser at any such sale shall hold
the Collateral so sold to it absolutely and free from any claim or right of
whatsoever kind, including any equity or right of redemption of the Company
which may be waived, and the Company, to the extent permitted by law, hereby
specifically waives all rights of redemption, stay or appraisal which it has
or may have under any law now existing or hereafter adopted. The notice (if
any) of such sale required by Section 6 shall (1) in case of a public sale,
state the time and place fixed for such sale, and (2) in the case of a
private sale, state the day after which such sale may be consummated. Any
such public sale shall be held at such time or times within ordinary business
hours and at such place or places as the Agent may fix in the notice of such
sale. At any such sale the Collateral may be sold in one lot as an entirety
or in separate parcels, as the Agent may determine. The Agent shall not be
obligated to make any such sale pursuant to any such notice. The Agent may,
without notice or publication, adjourn any public or private sale or cause
the same to be adjourned from time to time by announcement at the time and
place fixed for the sale, and such sale may be made at any time or place to
which the same may be so adjourned. In case of any sale of all or any part of
the Collateral on credit or for future delivery, the Collateral so sold may
be retained by the Agent until the selling price is paid by the purchaser
thereof, but the Agent shall not incur any liability in case of the failure
of such purchaser to take up and pay for the Collateral so sold and, in case
of any such failure, such Collateral may again be sold upon like notice. The
Agent, instead of exercising the power of sale herein conferred upon it, may
proceed by a suit or suits at law or in equity to foreclose the Security
Interests and sell the Collateral, or any portion thereof, under a judgment
or decree of a court or courts of competent jurisdiction.
17
(B) For the purpose of enforcing any and all rights and remedies under this
Agreement the Agent may (i) require the Company to, and the Company agrees that
it will, at its expense and upon the request of the Agent, forthwith assemble
all or any part of the Collateral as directed by the Agent and make it available
at a place designated by the Agent which is, in its opinion, reasonably
convenient to the Agent and the Company, whether at the premises of the Company
or otherwise, (ii) to the extent permitted by applicable law, enter, with or
without process of law and without breach of the peace, any premise where any of
the Collateral is or may be located, and without charge or liability to it seize
and remove such Collateral from such premises, (iii) have access to and use the
Company's books and records relating to the Collateral and (iv) prior to the
disposition of the Collateral, store or transfer it without charge in or by
means of any storage or transportation facility owned or leased by the Company,
process, repair or recondition it or otherwise prepare it for disposition in any
manner and to the extent the Agent deems appropriate and, in connection with
such preparation and disposition, use without charge any trademark, trade name,
copyright, patent or technical process used by the Company.
(C) Without limiting the generality of the foregoing, if any Event of
Default has occurred and is continuing,
(i) the Agent may license, or sublicense, whether general,
special or otherwise, and whether on an exclusive or non-exclusive
basis, any Patents or Trademarks included in the Collateral
throughout the world for such term or terms, on such conditions
and in such manner as the Agent shall in its sole discretion
determine;
(ii) the Agent may (without assuming any obligations or
liability thereunder), at any time and from time to time, enforce
(and shall have the exclusive right to enforce) against any
licensor, licensee or sublicensee all rights and remedies of the
Company in, to and under any Patent Licenses or Trademark Licenses
and take or refrain from taking any action under any thereof, and
the Company hereby releases the Agent and each of the other Secured
Parties from, and agrees to hold the Agent and each of the other
Secured Parties free and harmless from and against any claims
arising out of, any lawful action so taken or omitted to be taken
with respect thereto, except any such claim to the extent that it
arises solely as the result of the gross negligence or willful
misconduct of any Secured Party; and
18
(iii) upon request by the Agent, the Company will execute
and deliver to the Agent a further power of attorney, in form and
substance satisfactory to the Agent, for the implementation of any
lease, assignment, license, sublicense, grant of option, sale or
other disposition of a Patent, Patent License, Trademark or
Trademark License. In the event of any such disposition pursuant
to this Section, the Company shall supply its know-how and
expertise relating to the manufacture and sale of the products
bearing Trademarks or the products or services made or rendered in
connection with Patents, and its customer lists and other records
relating to such Patents or Trademarks and to the distribution of
said products, to the Agent.
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
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, the
proceeds of any sale of, or other realization upon, all or any part of the
Collateral and any cash held in the Collateral Accounts shall be applied by the
Agent in the following order of priorities:
first, to payment of the expenses of such sale or other
realization, including reasonable compensation to agents and
counsel for the Agent, and all expenses, liabilities and advances
incurred or made by the Agent in connection therewith, 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
19
Credit Agreement or Section 12 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 the Company 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
The provisions of Section 10.05 and 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 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
20
performance or observance of any of the terms of this Agreement by the
Company.
SECTION 11. Appointment of Co-Agents
At any time or times, in order to comply with any legal requirement in any
jurisdiction, the Agent may appoint another bank or trust company or one or more
other persons, either to act as co-agent or co-agents, jointly with the Agent,
or to act as separate agent or agents on behalf of the Secured Parties with such
power and authority as may be necessary for the effectual operation of the
provisions hereof and may be specified in the instrument of appointment (which
may, in the discretion of the Agent, include provisions for the protection of
such co-agent or separate agent similar to the provisions of Section 10).
SECTION 12. Expenses
In the event that the Company fails to comply with the provisions of the
Credit Agreement or 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 the Company, and the Company shall reimburse the Agent for the
costs thereof on demand. All insurance expenses and all expenses of protecting,
storing, warehousing, appraising, insuring, handling, maintaining, and shipping
the Collateral, any and all excise, property, sales, and use taxes imposed by
any state, federal, or local authority on any of the Collateral, or in respect
of periodic appraisals and inspections of the Collateral to the extent the same
may be requested by the Required Lenders from time to time, or in respect of the
sale or other disposition thereof shall be borne and paid by the Company; and if
the Company 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 the Company's account therefor, and the Company 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 the Company 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 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
21
by NationsBank, N.A. as its prime rate, be additional Secured Obligations
hereunder.
SECTION 13. Termination of Security Interests; Release of Collateral
Upon the repayment in full of all Secured Obligations, the termination or
cancellation of all outstanding Letters of Credit and the termination of the
Commitments under the Credit Agreement, the Security Interests shall terminate
and all rights to the Collateral shall revert to the Company. 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 the Company, execute and deliver
to the Company such documents as the Company shall reasonably request to
evidence the termination of the Security Interests or the release of such
Collateral, as the case may be.
SECTION 14. Notices
All notices, communications and distributions hereunder shall be given in
accordance with Section 12.03 of the Credit Agreement.
SECTION 15. 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 16. 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
indebtedness so assigned, may be transferred with such indebtedness. This
Agreement shall be binding on the Company and its successors and assigns.
22
SECTION 17. Changes in Writing
Neither this Agreement nor any provision hereof may be changed, waived,
discharged or terminated orally, but only in writing signed by the Company and
the Agent with the consent of the Required Lenders.
SECTION 18. 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 19. 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 20. 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.
23
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.
PUMPKIN LTD.
By /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------------------------
Title: Vice President
NATIONSCREDIT COMMERCIAL
CORPORATION, AS AGENT
By /s/ ▇▇▇▇▇▇ ▇. Alt
------------------------------------------------------
Title: Authorized Signatory
EXHIBIT A
PERFECTION CERTIFICATE
The undersigned, [Chief executive officer] and [Chief legal officer], of
Pumpkin Ltd., a Delaware corporation (the "Company"), hereby certify with
reference to the Security Agreement dated as of June __, 1997 between the
Company and NationsCredit Commercial Corporation, as Agent (terms defined
therein being used herein as therein defined), to the Agent and each Lender as
follows:
1. Names. (a) The exact corporate name of the Company, after giving effect
to the consummation of the Merger, as it appears in its certificate of
incorporation is as follows:
Pumpkin Ltd.
dba Pumpkin Masters, Inc.
(b) Set forth below is each other corporate name the Company has had since
its organization, together with the date of the relevant change:
Pumpkin Ltd. (Colo. corp.) adopted dba in 1993
(c) The Company has not changed its identity or corporate structure in any
way within the past five years except for the Merger.
(d) The following is a list of all other names (including trade names or
similar appellations) used by the Company or any of its divisions or other
business units at any time during the past five years:
Pumpkin Masters, Inc.
1
Pumpkin Masters Inc.
2. Current Locations. (a) The chief executive office of the Company is
located at the following address:
Mailing Address County State
(mailing) ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(street) ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(b) The following are all the locations where the Company maintains any
books or records relating to any Accounts:
Mailing
Address County State
423, 427, 431, 437 E. Bayaud Denver Colorado 80209
(c) The following are all the places of business of the Company not
identified above:
Mailing
Name Address County State
None
(d) The following are all the locations where the Company maintains any
Inventory not identified above:
Mailing
Name Address County State
Schedule 1 attached
(e) The following are the names and addresses of all Persons other than the
Company which have possession of any of the Company's Inventory:
2
Mailing
Name Address County State
Schedule 1 attached
3. Prior Locations. (a) Set forth below is the information required by
subparagraphs (a), (b) and (c) of paragraph 2 with respect to each location or
place of business maintained by the Company at any time during the past five
years:
No additional
(b) Set forth below is the information required by subparagraphs (d) and
(e) of paragraph 2 with respect to each location or bailee where or with whom
Inventory has been lodged at any time during the past four months:
▇▇▇▇▇▇▇▇ Industries
▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇▇▇, ▇▇
4. Unusual Transactions. All Accounts have been originated by the Company
and all Inventory and Equipment has been acquired by the Company in the ordinary
course of its business.
5. File Search Reports. Attached hereto as Schedule 5(A) is a true copy of
a file search report from the Uniform Commercial Code filing officer in each
jurisdiction identified in paragraph 2 or 3 above with respect to each name set
forth in paragraph 1 above. Attached hereto as Schedule 5(B) is a true copy of
each financing statement or other filing identified in such file search reports.
6. UCC Filings. A duly signed financing statement on Form UCC-1 in
substantially the form of Schedule 6(A) hereto has been duly filed in the
Uniform Commercial Code filing office in each jurisdiction identified in
paragraph 2 hereof. Attached hereto as Schedule 6(B) is a true copy of each such
filing duly acknowledged by the filing officer.
7. Schedule of Filings. Attached hereto as Schedule 7 is a schedule setting
forth filing information with respect to the filings described in paragraph 6
above.
8. Filing Fees. All filing fees and taxes payable in connection with the
filings described in paragraph 6 above have been paid.
3
9. Patents, Trademarks, Copyrights. All patents, trademarks and copyrights
owned by the Company as of the date hereof and all patent licenses, trademark
licenses and copyright licenses to which the Company is a party as of the date
hereof are listed on Schedule 9 hereto.
4
IN WITNESS WHEREOF, we have hereunto set our hands this ____ day of
________, 1997.
____________________________
Title:
SCHEDULE I
NAME INVENTORY EQUIPMENT
-------------------------------------------------- --------------- --------------------------------------------------
Pumpkin Masters, Inc. X Office equipment
▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇▇▇▇ ▇▇▇▇▇▇)
Kelly's Crafts, Inc. X
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇▇▇▇ County)
Mid America Frame, Inc. X Machinery
▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇ "▇"
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
(Clinton County)
Sterling Graphics, Inc. X
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
T-Plas Tech Corporation X Molds
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
(Denver County)
Vanguard Packaging X
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
(Clay County)
▇▇▇▇▇▇▇▇ Industries X
▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇, ▇▇
(▇▇▇▇▇▇▇▇ County)
▇▇▇▇▇▇ Exhibits X
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇.
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
NAME INVENTORY EQUIPMENT
-------------------------------------------------- --------------- --------------------------------------------------
Transparent Containers X
625 ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ Mold X
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(Arapahoe County)
Wennlly Enterprises X
11f., ▇▇. ▇▇▇ ▇▇▇. ▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇.▇.▇.
▇▇▇▇▇ School for Creative Learning X
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
2
SCHEDULE 6(A)
DESCRIPTION OF COLLATERAL
All accounts, chattel paper, contract rights, general intangibles,
inventory, equipment and documents, now owned or hereafter acquired, wherever
located, and all proceeds thereof.
1
SCHEDULE 7
SCHEDULE OF FILINGS
DEBTOR FILING OFFICER FILE NUMBER DATE OF FILING*
-------------------- ------------------- ------------------- --------------------
1
------------------------
* Indicate lapse date, if other than fifth anniversary.
2
SCHEDULE 9
PATENTS
TRADEMARK REGISTRATIONS
COPYRIGHTS
3
EXHIBIT B
OPINION OF
COUNSEL FOR THE COMPANY
* * * *
1. The Security Agreement creates a valid security interest, for the benefit
of the Secured Parties, in all the Company's right, title and interest in all
Collateral to the extent the UCC is applicable thereto (the "Security
Interest").
2. UCC financing statements and amendments thereto (collectively, the
"Financing Statements") have been filed in the filing offices listed in Schedule
1 attached hereto (the "Filing Jurisdictions"), which are all of the offices in
which filings are required to perfect the Security Interest, to the extent the
Security Interest may be perfected by filing under the UCC, and no further
filing or recording of any document or instrument or other action will be
required so to perfect the Security Interest, except that (i) continuation
statements with respect to each Financing Statement must be filed within the
respective time periods set forth on Schedule 1 attached hereto; (ii) additional
filings may be necessary if the Company changes its name, identity or corporate
structure or the jurisdiction in which its places of business, its chief
executive office or the Collateral are located; and (iii) we express no opinion
on the perfection of, or need for further filing or recording to perfect, the
Security Interest in goods now or hereafter located in any jurisdiction other
than the Filing Jurisdictions.
3. There Are
(i) no UCC financing statements which name the Company as debtor or
seller and cover any of the Collateral, other than the Financing
Statements, other financing statements naming the Agent as the secured party
of record [and the financing statements with respect to Permitted Liens
annexed as Schedule 2 hereto, listed in the available records in the UCC
filing offices of the Filing Jurisdictions; and
(ii) no notices of the filing of any federal tax lien (filed
pursuant to Section 6323 of the Internal Revenue Code) or any lien of the
Pension Benefit Guaranty Corporation (filed pursuant to Section 4068 of
ERISA) covering any of the Collateral listed in the available records in the
[UCC filing office in state of Company's chief executive office], which is
the only office having files which must be searched in order to fully
determine the existence of notices of the filing of federal tax liens
(filed pursuant to Section 6323 of the Internal Revenue Code) and liens of
the Pension Benefit Guaranty Corporation (filed pursuant to Section 4068
of ERISA) on the Collateral.
1
4. The Security Interest secures the payment of (i) all future Loans made
by the Lenders to the Company, whether or not at the time such Loans are made
an Event of Default or other event not within the control of the Lenders has
relieved or may relieve the Lenders from their obligations to make such
Loans, and (ii) all reimbursement obligations of the Company with respect to
any Letters of Credit issued by the Lenders, and is perfected to the extent
set forth in paragraph 2 above with respect to such future Loans. Subject to
[list any qualifications], insofar as the priority thereof is governed by the
UCC, the Security Interest has the same priority with respect to such future
Loans as it does with respect to Loans made on the date hereof, except that
_______________________(1)
------------------------
(1) To be conformed to opinion delivered at closing.
2
EXHIBIT C
PATENT SECURITY AGREEMENT
(PATENTS, PATENT APPLICATIONS AND PATENT LICENSES)
WHEREAS, Pumpkin Ltd. (together with its successors, the "Grantor"), Pumpkin
Masters Holdings, Inc., 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 and in effect from time to time,
the "Credit Agreement");
WHEREAS, pursuant to the terms of the Company Security Agreement dated as of
June , 1997 (as said Agreement may be amended and in effect from time to
time, the "Company Security Agreement") between the Grantor and NationsCredit
Commercial Corporation, as agent for the secured parties referred to therein (in
such capacity, together with its successors in such capacity, the "Grantee"),
Grantor has granted to Grantee for the ratable benefit of such secured parties a
security interest in substantially all the assets of the Grantor;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Grantor does hereby grant to
Grantee (and confirm the grant pursuant to the Company Security Agreement to the
Grantee of) a continuing security interest in all of Grantor's right, title and
interest in, to and under the following (all of the following items or types of
property being herein collectively referred to as the "Patent Collateral"),
whether presently existing or hereafter arising or acquired:
(i) each Patent and Patent application, including each Patent and Patent
application referred to in Schedule 1 annexed hereto;
(ii) each Patent License, including each Patent License listed on
Schedule 1 annexed hereto; and
(iii) all products and proceeds of the foregoing, including any claim by
Grantor against third parties for past, present or future infringement of
any Patent, including any Patent referred to in Schedule 1 annexed hereto,
and any Patent licensed under any Patent License, including any Patent
License listed on Schedule 1 annexed hereto.
This security interest is granted in conjunction with the security interests
granted to the Grantee pursuant to the Security Agreement. Grantor does hereby
further acknowledge and affirm that the rights and remedies of Grantee with
respect to the security interest in the Patent Collateral made and granted
hereby are more fully set forth in the Company
Security Agreement, the terms and provisions of which are incorporated by
reference herein as if fully set forth herein.
2
IN WITNESS WHEREOF, Grantor has caused this Patent Security Agreement to be
duly executed by its officer thereunto duly authorized as of the [ ] day
of [ ] 1997.
PUMPKIN LTD.
By:_________________________________
Title: Vice President
Acknowledged:
NATIONSCREDIT COMMERCIAL CORPORATION
as Agent
By
Name:
Title:
▇
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ )
) : ss.:
COUNTY OF NEW YORK )
On the [ ] day of [ ] , 1997 before me personally came , to me
personally known and known to me to be the person described in and who
executed the foregoing instrument as Chairman of Pumpkin Ltd., who being by
me duly sworn, did depose and say that he is the Chairman of Pumpkin Ltd.,
the corporation described in and which executed the foregoing instrument;
that the said instrument was signed on behalf of Pumpkin Ltd. by order of its
Board of Directors; that he signed his name thereto by like order; and that
he acknowledged said instrument to be the free act and deed of said
corporation.
Notary Public _______________________________________
Notary Public, State of New York
[Seal]
My commission expires:
[______________________]
4
SCHEDULE 1
TO
PATENT SECURITY AGREEMENT
U.S. PATENTS
NUMBER DATE ISSUE TITLE PATENT HOLDER
----------------------- ---------- ------------- -----------------
[--------] [-------] [---------] [------------]
PATENT LICENSES
LICENSOR LICENSEE NUMBER(S) DATE
----------------------- ------------ ------------ ------------
[------] [--------] [-------] [--------]
EXHIBIT D
[FORM OF TRADEMARK SECURITY AGREEMENT]
TRADEMARK SECURITY AGREEMENT
(TRADEMARKS, TRADEMARK REGISTRATIONS, TRADEMARK
APPLICATIONS AND TRADEMARK LICENSES)
WHEREAS, Pumpkin Ltd., a Delaware corporation (herein referred to as
"Grantor"), owns the Trademark and Trademark registration listed on Schedule
1 annexed hereto; WHEREAS, the Grantor, Pumpkin Masters Holdings, Inc.,
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 and in effect from time to time among said parties and such
lenders (the "Lenders") as may from time to time be party thereto, the
"Credit Agreement");
WHEREAS, pursuant to the terms of the Company Security Agreement dated as of
June , 1997 (as said Agreement may be amended and in effect from time to
time, the "Company Security Agreement") between Grantor and NationsCredit
Commercial Corporation, as agent for the secured parties referred to therein
(in such capacity, together with its successors in such capacity pursuant to
the terms of the Company Security Agreement, the "Grantee"), Grantor has
granted to Grantee for the ratable benefit of such secured parties, a
security interest in substantially all the assets of the Grantor including
all right, title and interest of Grantor in, to and under all Grantor's
Trademarks (as defined in the Company Security Agreement), Trademark
registrations, together with any reissues, extensions or renewals thereof,
Trademark applications and Trademark Licenses (as defined in the Company
Security Agreement), whether presently existing or hereafter arising or
acquired, together with the goodwill of the business symbolized by the
Trademarks and the applications therefor and the registrations thereof, and
all products and proceeds thereof, including any and all causes of action
which may exist by reason of infringement or dilution thereof or injury to
the associated goodwill, to secure the payment of all amounts owing by the
Grantor under the Credit Agreement and the other Financing Documents and the
Warrants referred to therein;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Grantor does hereby grant to
Grantee a continuing security interest in all of Grantor's right, title and
interest in, to and under the following (all of the following items or types
of property being herein collectively referred to as the "Trademark
Collateral"), whether presently existing or hereafter arising or acquired:
2
(i) each Trademark, Trademark registration and Trademark application, and
all of the goodwill of the business connected with the use of, and
symbolized by, each Trademark, Trademark registration and Trademark
application, including each Trademark, Trademark registration, and/or
Trademark application referred to in Schedule 1 annexed hereto;
(ii) each Trademark License and all of the goodwill of the business
connected with the use of, and symbolized by, each Trademark licensed; and
(iii) all products and proceeds of the foregoing, including any claim by
Grantor against third parties for past, present or future infringement or
dilution of any Trademark or Trademark registration, and any Trademark
licensed under any Trademark License, or for injury to the goodwill
associated with any Trademark, Trademark registration or Trademark licensed
under any Trademark License.
This security interest is granted in conjunction with the security interests
granted to the Grantee pursuant to the Security Agreement. Grantor does
hereby further acknowledge and affirm that the rights and remedies of Grantee
with respect to the security interest in the Trademark Collateral made and
granted hereby are more fully set forth in the Security Agreement, the terms
and provisions of which are incorporated by reference herein as if fully set
forth herein.
Upon the repayment in full of all Secured Obligations (as defined in the
Credit Agreement), the termination or cancellation of all outstanding Letters
of Credit and the termination of the Commitments under the Credit Agreement,
this security interest shall terminate and all rights to the Trademark
Collateral shall revert to the Company and the Trademark Collateral shall
thereupon be released. Upon such termination of this security interest
Grantee will, at the expense of Grantor, execute and deliver to the Grantee
such documents as Grantee shall reasonably request to evidence the
termination of this security interest or the release of such Trademark
Collateral, as the case may be.
3
IN WITNESS WHEREOF, Grantor has caused this Trademark Security Agreement to
be duly executed by its officer thereunto duly authorized as of the th day
of , 1997.
PUMPKIN LTD.
By:__________________________
Title: Vice President
Acknowledged:
NATIONSCREDIT COMMERCIAL CORPORATION
as Agent
By:__________________________
Name:
Title: Authorized Signatory
4
STATE OF NEW YORK )
) : ss.:
COUNTY OF NEW YORK )
On the [ ] day of [ ], 1997 before me personally came , to
me personally known and known to me to be the person described in and who
executed the foregoing instrument as Chairman of Pumpkin Ltd., who being by
me duly sworn, did depose and say that he is the Chairman of Pumpkin Ltd.,
the corporation described in and which executed the foregoing instrument;
that he knows the seal of said corporation; that the seal affixed to said
instrument is such corporate seal; that the said instrument was signed and
sealed on behalf of said corporation by order of its Board of Directors; that
he signed his name thereto by like order; and that he acknowledged said
instrument to be the free act and deed of said corporation.
Notary Public _________________________________________
Notary Public, State of New York
[Seal]
My commission expires:
[_____________________]
5
SCHEDULE 1
TO TRADEMARK
SECURITY AGREEMENT
TRADEMARK REGISTRATIONS
TRADEMARK COUNTRY REGISTRATION NO.
------------------------------ --------------- -----------------------
6