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EXHIBIT 10.18
SECURITY AGREEMENT
THIS SECURITY AGREEMENT (as amended, supplemented, amended and
restated or otherwise modified from time to time, this "SECURITY AGREEMENT"),
dated as of September 15, 1997, is made by PACKAGED ICE, INC., a Texas
corporation ("GRANTOR"), in favor of THE FROST NATIONAL BANK, a national
banking association, as agent (in such capacity, the "AGENT") for each of the
Banks under the Credit Agreement (as defined below).
W I T N E S S E T H:
WHEREAS, pursuant to that certain Credit Agreement, dated as of the
date hereof (as modified, amended, supplemented, or restated from time to time,
the "CREDIT AGREEMENT"), among Grantor, the Agent, and certain other financial
institutions who from time to time are parties thereto (the "BANKS"), the Banks
have extended Commitments to make Revolving Credit Loans to the Grantor (the
"BORROWER");
WHEREAS, as a condition precedent to the making of loans by the Banks
under the Credit Agreement, the Grantor is required to execute and deliver this
Security Agreement;
WHEREAS, the Grantor has duly authorized the execution, delivery and
performance of this Security Agreement;
NOW, THEREFORE, for good and valuable consideration, the receipt of
which is hereby acknowledged, and in order to induce the Banks to extend the
Revolving Commitments to the Borrower pursuant to the Credit Agreement, the
Grantor agrees, for the benefit of each of the Banks, as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. CERTAIN TERMS. The following terms when used in this
Security Agreement, including its preamble and recitals, shall have the
following meanings (such definitions to be equally applicable to the singular
and plural forms thereof):
"COLLATERAL" is defined in Section 2.1.
"COLLATERAL ACCOUNT" is defined in Section 6.2.
"COPYRIGHT COLLATERAL" means all copyrights of Grantor, whether
statutory or common law, registered or unregistered, now or hereafter in force
throughout the world including, without limitation, all of Grantor's right,
title and interest in and to all copyrights registered in the United States
Copyright Office or anywhere else in the world and also including, without
limitation, the copyrights referred to in ITEM A of SCHEDULE V attached hereto,
and all applications for registration thereof, all copyright licenses,
including each copyright license referred to in ITEM B of SCHEDULE V attached
hereto, the right to xxx for past, present and future infringements of any
thereof, all rights corresponding thereto throughout the world, including and
without limitation, the right to distribute copies or phonograph records of the
copyrighted matter to the public by
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sales, lease, lending, rental or other transfer of ownership; the right to
reproduce as copies or phonorecords; the right to prepare derivative works; the
right to perform or display the copyrighted material publicly; any and all
moral rights in the copyrighted matter; and all extensions and renewals of any
thereof and all proceeds of the foregoing, including, without limitation,
income from licenses, royalties, sales, lease, lending, payments, claims,
damages and proceeds of suit.
"DEPOSIT ACCOUNTS" is defined in clause (t) of Section 2.1.
"EQUIPMENT" is defined in clause (a) of Section 2.1.
"EVENT OF DEFAULT" means the occurrence of any of the following events
or conditions:
(a) An Event of Default under the Credit Agreement shall
occur and be continuing;
(b) The failure to pay, when due, any portion of the
Secured Indebtedness, subject to applicable notice and cure
periods, if any;
(c) The failure of Grantor to observe any of the terms,
conditions or covenants contained in this Security Agreement,
subject to applicable notice and cure periods, if any; or
(d) The ownership of the Collateral or any of the
Collateral, except for Inventory sold in the ordinary course
of business or as permitted under Section 4.1.3 hereof, or any
legal or equitable interest therein, becomes vested in a
person or entity other than Grantor.
"INTELLECTUAL PROPERTY COLLATERAL" means, collectively, the Copyright
Collateral, the Patent Collateral, the Trademark Collateral and the Trade
Secrets Collateral.
"INVENTORY" is defined in clause (b) of Section 2.1.
"LENDER PARTY" means, as the context may require, Agent, each Bank,
and each of their respective successors, transferees and assigns.
"PATENT COLLATERAL" means:
(a) all patents (the "PATENTS"), now existing anywhere in
the world or hereafter acquired, whether currently in use or
not, all records thereof and all patent applications prepared
now or hereafter, including divisional, continuation, and
continuation-in-part applications, whether pending or in
preparation for filing, including applications in the United
States Patent and Trademark Office or any foreign country,
including, but not limited to those referred to in ITEM A of
SCHEDULE II attached hereto;
(b) all Patent licenses, including each Patent license
referred to in ITEM B of SCHEDULE II attached hereto;
(c) all reissues, extensions, or renewals of any of the
items described in clauses (a) and (b); and
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(d) all proceeds of, and rights associated with, the
foregoing, including any claim by Grantor against third
parties for past, present or future infringement of any
Patent, whether owned by or licensed to Grantor, and any
violation or breach of the conditions of any Patent license,
including any Patent or Patent license referred to in ITEM A
and ITEM B of SCHEDULE II attached hereto.
"RECEIVABLES" is defined in clause (c) of Section 2.1.
"RELATED CONTRACTS" is defined in clause (c) of Section 2.1.
"SECURED INDEBTEDNESS" is defined in Section 2.2.
"THIRD PARTY" is defined in clause (a) of Section 3.1.3.
"TRADEMARK COLLATERAL" means:
(a) all trademarks, trade names, corporate names, company
names, business names, fictitious business names, trade
styles, service marks, certification marks, collective marks,
logos, other source of business identifiers, prints and labels
on which any of the foregoing have appeared or appear, designs
and general intangibles of a like nature (all of the foregoing
items in this clause (a) being collectively called a
"TRADEMARK"), now existing anywhere in the world or hereafter
adopted or acquired, whether currently in use or not, all
registrations and records thereof and all applications in
connection therewith, whether pending or in preparation for
filing, including registrations, recordings and applications
in the United States Patent and Trademark Office or in any
office or agency of the United States of America or any State
thereof or any foreign country, including those referred to in
ITEM A of SCHEDULE III attached hereto;
(b) all Trademark licenses, including each Trademark
license referred to in ITEM B of SCHEDULE III attached hereto;
(c) all reissues, extensions, or renewals of any of the
items described in clauses (a) and (b);
(d) all of the goodwill of the business connected with
the use of, and symbolized by the items described in, clauses
(a) and (b); and
(e) all proceeds of, and rights associated with, the
foregoing, including any claim by Grantor against third
parties for past, present or future infringement or dilution
of any Trademark, including any Trademark referred to in ITEM
A and ITEM B of SCHEDULE III attached hereto, or for any
injury to the goodwill associated with the use of any such
Trademark or for breach or enforcement of any Trademark
license.
"TRADE SECRETS COLLATERAL" means common law and statutory trade
secrets and all other confidential or proprietary or useful information and all
know-how obtained by or used in or contemplated at any time for use in the
business of Grantor (all of the foregoing being collectively called a "TRADE
SECRET"), whether or not such Trade Secret has been reduced to a writing or
other tangible form, including all documents and things embodying,
incorporating or referring in any way to such Trade Secret, all Trade Secret
licenses, including
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each Trade Secret license referred to in SCHEDULE IV attached hereto, and
including the right to xxx for and to enjoin and to collect damages for the
actual or threatened misappropriation of any Trade Secret and for the breach or
enforcement of any such Trade Secret license.
"U.C.C." means the Uniform Commercial Code, as in effect in the State
of Texas.
SECTION 1.2. CREDIT AGREEMENT DEFINITIONS. Unless otherwise defined
herein or the context otherwise requires, terms used in this Security
Agreement, including its preamble and recitals, have the meanings provided in
the Credit Agreement.
SECTION 1.3. U.C.C. DEFINITIONS. Unless otherwise defined herein or
the context otherwise requires, terms for which meanings are provided in the
U.C.C. are used in this Security Agreement, including its preamble and
recitals, with such meanings.
ARTICLE II
SECURITY INTEREST
SECTION 2.1. GRANT OF SECURITY. Grantor hereby assigns and pledges to
Agent for its benefit and the benefit of each of the Lender Parties, and hereby
grants to Agent, for its benefit and the benefit of each of the Lender Parties,
a security interest in all of the following, whether now or hereafter existing
or acquired (the "COLLATERAL"):
(a) all equipment in all of its forms of Grantor,
wherever located, including all machinery, manufacturing,
distribution, selling, data processing and office equipment, assembly
systems, tools, molds, dies, fixtures, appliances, furniture,
furnishings, vehicles, trade fixtures, and other tangible personal
property (other than Inventory), and all parts thereof and all
accessions, additions, attachments, improvements, substitutions and
replacements thereto and therefor (any and all of the foregoing being
the "EQUIPMENT");
(b) all inventory in all of its forms of Grantor,
wherever located, including:
(i) all goods, merchandise and other personal
property furnished or to be furnished under any contract of
service or intended for sale or lease, all consigned goods and
other items which have previously constituted Equipment but
are then currently being held for sale or lease in the
ordinary course of Grantor's business, all raw materials and
work in process therefor, finished goods thereof, and all
other materials and supplies of any kind, nature or
description used or consumed in the manufacture, production,
packing, shipping, advertising, finishing or sale thereof;
(ii) all goods in which Grantor has an interest in
mass or a joint or other interest or right of any kind
(including goods in which Grantor has an interest or right as
consignee); and
(iii) all goods which are returned to or
repossessed by Grantor;
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and all accessions thereto, products thereof and documents therefore
(any and all such inventory, materials, goods, accessions, products
and documents being the "INVENTORY");
(c) all accounts, contracts, contract rights, chattel
paper, documents, instruments and general intangibles of Grantor,
whether or not arising out of or in connection with the sale or lease
or other disposition of goods or the rendering of services, and all
rights of Grantor now or hereafter existing in and to all security
agreements, guaranties, leases and other contracts securing or
otherwise relating to any such accounts, contracts, contract rights,
chattel paper, documents and instruments (any and all such accounts,
contracts, contract rights, chattel paper, documents, instruments, and
general intangibles being the "RECEIVABLES", and any and all such
security agreements, guaranties, leases and other contracts being the
"RELATED CONTRACTS");
(d) all Intellectual Property Collateral of Grantor;
(e) in addition to general intangibles which may be
included within Receivables or Intellectual Property Collateral, all
contracts, contract rights and general intangibles of Grantor,
including without limitation, all tax refunds, claims, causes of
action, judgments, franchises, permits, licenses, supply contracts,
purchase contracts, and agreements (collectively, "GENERAL
INTANGIBLES");
(f) all of Grantor's right, title and interest in and to
any and all depository, savings, or custodial, or other accounts
maintained by Grantor with any of the Lender Parties, all sums now or
at any time hereafter on deposit therein, credited thereto, or payable
thereon and all instruments, documents and other writings evidencing
any of the foregoing accounts (such accounts collectively referred to
herein as the "DEPOSIT ACCOUNTS");
(g) all investment property of Grantor (except the
capital stock of Southco Ice, Inc., a Texas corporation), including,
without limitation, all of the capital stock of Packaged Ice Leasing,
Inc., a Nevada corporation, Southwestern Ice, Inc., a Texas
corporation, Mission Party Ice, Inc., a Texas corporation, and
Southwest Texas Packaged Ice, Inc., a Texas corporation;
(h) all books, records, writings, data bases, information
and other property relating to, used or useful in connection with,
evidencing, embodying, incorporating or referring to, any of the
foregoing in this Section 2.1.;
(i) all of Grantor's other property and rights of every
kind and description and interests therein; and
(j) all products, offspring, rents, issues, profits,
returns, income and proceeds of and from any and all of the foregoing
Collateral (including proceeds which constitute property of the types
described in clauses (a), (b), (c), (d), (e), (f), (g), (h), and (i),
proceeds deposited from time to time in the Deposit Accounts and in
any lock boxes of Grantor, and, to the extent not otherwise included,
all payments under insurance (whether or not Agent is the loss payee
thereof), or any indemnity, warranty or guaranty, payable by reason of
loss or damage to or otherwise with respect to any of the foregoing
Collateral.
Notwithstanding the foregoing, "COLLATERAL" shall not include any General
Intangibles as to which, or other rights arising under contracts as to which,
the grant of a security interest would constitute a violation of a
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valid and enforceable restriction on such grant, unless and until any required
consents shall have been obtained. Grantor agrees to use its best efforts to
obtain any such required consent.
SECTION 2.2. SECURITY FOR THE OBLIGATION. This Security Agreement
secures the payment and performance of the Obligation, including, without
limitation, all obligations now or hereafter existing under the Credit
Agreement, the Notes, this Security Agreement and each of the other Loan Papers
to which Grantor is or may become a party, whether for principal, interest,
costs, fees, expenses or otherwise (including all such amounts which would
become due but for the operation of the automatic stay under Section 362(a) of
the United States Bankruptcy Code, 11 U.S.C. Section 362(a), and the operation
of Sections 502(b) and 506(b) of the United States Bankruptcy Code, 11 U.S.C.
Sections 502(b) and 506(b)) (all of the foregoing, together with all renewals,
extensions and modifications of all or any part thereof, being the "SECURED
INDEBTEDNESS").
SECTION 2.3. CONTINUING SECURITY INTEREST; TRANSFER OF NOTES. This
Security Agreement shall create a continuing security interest in the
Collateral and shall:
(a) remain in full force and effect until payment in full
of the Secured Indebtedness and the termination of all Commitments;
(b) be binding upon Grantor, its successors, transferees
and assigns; and
(c) inure, together with the rights and remedies of Agent
hereunder, to the benefit of Agent and each other Lender Party.
Without limiting the generality of the foregoing clause (c), any Lender Party
may assign or otherwise transfer (in whole or in part) any note held by it to
any other Person or entity, and such other Person or entity shall thereupon
become vested with all the rights and benefits in respect thereof granted to
such Lender Party under any Loan Paper (including this Security Agreement), or
otherwise, subject, however, to any contrary provisions in such assignment or
transfer, and to the provisions of the Credit Agreement. Upon the payment in
full of the Secured Indebtedness and the termination of all Commitments, the
security interest granted herein shall terminate and all rights to the
Collateral shall revert to Grantor. Upon any such termination, Agent will, at
Grantor's sole expense, execute and deliver to Grantor such documents as
Grantor shall reasonably request to evidence such termination.
SECTION 2.4. GRANTOR REMAINS LIABLE. Anything herein to the contrary
notwithstanding:
(a) Grantor shall remain liable under the contracts and
agreements included in the Collateral to the extent set forth therein,
and shall perform all of its duties and obligations under such
contracts and agreements to the same extent as if this Security
Agreement had not been executed;
(b) the exercise by Agent of any of its rights hereunder
shall not release Grantor from any of its duties or obligations under
any such contracts or agreements included in the Collateral; and
(c) neither Agent nor any other Lender Party shall have
any obligation or liability under any such contracts or agreements
included in the Collateral by reason of this Security Agreement, nor
shall Agent or any other Lender Party be obligated to perform any of
the obligations or duties of Grantor thereunder or to take any action
to collect or enforce any claim for payment assigned hereunder.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. REPRESENTATIONS AND WARRANTIES. Grantor hereby
represents and warrants unto each Lender Party as set forth in this Article.
SECTION 3.1.1. LOCATION OF COLLATERAL, ETC. All of the Equipment and
Inventory of Grantor is located at the places specified in ITEM A of SCHEDULE I
hereto, except for Inventory in transit in the ordinary course of Grantor's
business; provided, however, that Inventory and Equipment may be moved to other
locations in accordance with clause (a) of Section 4.1.1. All of the Inventory
which is imported from a location outside the United States arrives at one of
the ports or locations specified in ITEM A of SCHEDULE I hereto. None of the
Equipment and Inventory has, within the four months preceding the date of this
Security Agreement, been located at any place other than the places specified
in ITEM A of SCHEDULE I hereto. Each location of Equipment or Inventory which
is subject to a lease, sublease, mortgage or similar instrument is described as
such in ITEM A of SCHEDULE I hereto and Grantor shall, upon the request of
Agent provide Agent with the name and address of each lessor, sublessor,
lessee, sublessee and/or mortgagee (other than Grantor) with respect to any or
all such locations. All of the lock boxes of Grantor are located at the places
specified in ITEM B of SCHEDULE I hereto. The place(s) of business and chief
executive office of Grantor and the office(s) where Grantor keeps its records
concerning the Receivables, are located at the addresses specified in ITEM C of
SCHEDULE I hereto. Except as set forth on ITEM D of SCHEDULE I hereto, Grantor
has no trade names. Grantor has not been known by any legal name different
from the one set forth on the signature page hereto. Except as previously
disclosed to Agent in writing, Grantor has not been the subject of any merger
or other corporate reorganization. If the Collateral includes any Inventory
located in the State of California, Grantor is not a "retail merchant" within
the meaning of Section 9102 of the Uniform Commercial Code - Secured
Transactions of the State of California. Grantor is not a party to any
Federal, state or local government contract.
SECTION 3.1.2. OWNERSHIP, NO LIENS, ETC. Grantor has good and
marketable title to the Collateral and Grantor is the legal and beneficial
owner of the Collateral and owns the Collateral free and clear of any Lien,
security interest, charge or encumbrance except for the security interest
created by this Security Agreement and except as permitted by the Credit
Agreement. No effective financing statement or other instrument similar in
effect covering all or any part of the Collateral is on file in any recording
office, except such as may have been filed in favor of Agent relating to this
Security Agreement, and except as permitted by the Credit Agreement.
SECTION 3.1.3. POSSESSION AND CONTROL.
(a) The name and address of each bailee, processor,
warehouseman, consignee or other Person in possession of any of the
Inventory or Equipment (each such Person being a "THIRD PARTY") on the
date hereof, other than carriers and shippers of Inventory in transit
in the ordinary course of Grantor's business, is set forth in ITEM A
of SCHEDULE I hereto, together with the address of the location where
such Inventory or Equipment is or may be held. Except as otherwise
indicated in ITEM A of SCHEDULE I hereto, no Person (other than a
Person identified in ITEM A of SCHEDULE I thereto as being a
consignee) in possession of any of the Inventory or Equipment conducts
a business at the location of such Inventory or Equipment other than a
business in the nature of warehousing or
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transporting goods for others. In the event that any Inventory
is in the possession of a Third Party, such Inventory is not evidenced
by a negotiable instrument or document.
(b) Except as indicated in clause (a) of this Section,
Grantor has exclusive possession and control of the Equipment and
Inventory.
SECTION 3.1.4. NEGOTIABLE DOCUMENTS, INSTRUMENTS AND CHATTEL PAPER.
Grantor has, contemporaneously herewith, delivered to Agent possession of all
originals of all negotiable documents, instruments and chattel paper currently
owned or held by Grantor (duly endorsed in blank, if requested by Agent).
SECTION 3.1.5. INTELLECTUAL PROPERTY COLLATERAL. With respect to any
Intellectual Property Collateral, other than Intellectual Property Collateral
with negligible economic value:
(a) such Intellectual Property Collateral is valid and
subsisting and has not been adjudged invalid or unenforceable, in
whole or in part;
(b) Grantor has made all necessary filings and
recordations to protect its interest in such Intellectual Property
Collateral, including, without limitation, recordations of all of its
interests in the Patent Collateral and Trademark Collateral in the
United States Patent and Trademark Office and in corresponding offices
throughout the world (where appropriate), and its claims to the
Copyright Collateral in the United States Copyright Office and in
corresponding offices throughout the world (where appropriate);
(c) Grantor is the exclusive owner of the entire and
unencumbered right, title and interest in and to such Intellectual
Property Collateral and no claim has been made that the use of such
Intellectual Property Collateral does or may violate the asserted
rights of any third party; and
(d) Grantor has performed and will continue to perform
all acts and has paid and will continue to pay all required fees and
taxes to maintain each and every item of Intellectual Property
Collateral in full force and effect throughout the world, as
applicable.
SECTION 3.1.6. VALIDITY, ETC. This Security Agreement creates a
valid security interest in the Collateral, securing the payment of the Secured
Indebtedness, which security interest is a first priority security interest in
the Collateral except to the extent previously disclosed to Agent in writing,
and all filings and other actions necessary or desirable to perfect and protect
such security interest will be duly made or taken.
SECTION 3.1.7. AUTHORIZATION, APPROVAL, ETC. No authorization,
approval or other action by, and no notice to or filing with, any governmental
authority or regulatory body is required either:
(a) for the grant by Grantor of the security interest
granted hereby or for the execution, delivery and performance of this
Security Agreement by Grantor; or
(b) for the filing required for perfection of or the
exercise by Agent of its rights and remedies hereunder.
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SECTION 3.1.8. COMPLIANCE WITH LAWS. Grantor is in compliance with
the requirements of all applicable laws (including, without limitation, the
provisions of the Fair Labor Standards Act), rules, regulations and orders of
every Governmental Authority, the non-compliance with which might materially
adversely affect the business, properties, assets, operations, condition
(financial or otherwise) or prospects of Grantor or the value of the Collateral
or the worth of the Collateral as collateral security.
SECTION 3.1.9. TAXES. All taxes, assessments and other charges
levied against the Collateral have been paid in full, other than taxes,
assessments and charges not yet due and payable.
ARTICLE IV
COVENANTS
SECTION 4.1. CERTAIN COVENANTS. Grantor covenants and agrees that, so
long as any portion of the Secured Indebtedness shall remain unpaid, and until
the termination of the Commitments, Grantor will, unless the Required Banks
under the Credit Agreement shall otherwise consent in writing, perform the
obligations set forth in this Section.
SECTION 4.1.1. AS TO EQUIPMENT AND INVENTORY. Grantor hereby agrees
that it shall:
(a) keep all the Equipment and Inventory (other than
Inventory in transit and Inventory sold in the ordinary course of
business) at the places therefor specified in Section 3.1.1 or, upon
30 days' prior written notice to Agent, at such other places in a
jurisdiction where all representations and warranties set forth in
Article III (including Section 3.1.6) shall be true and correct, and
all action required pursuant to the first sentence of Section 4.1.7
shall have been taken with respect to the Equipment and Inventory;
(b) with respect to any Equipment or Inventory in the
possession or control of any Third Party or any of Grantor's agents,
notify such Third Party or agent of Agent's security interest in such
Equipment or Inventory and, upon Agent's request following the
occurrence and during the continuance of an Event of Default, direct
such Third Party or agent to hold all such Equipment or Inventory for
Agent's account and subject to Agent's instructions;
(c) cause the Equipment to be maintained and preserved in
the same condition, repair and working order as when new, ordinary
wear and tear excepted, and in accordance with any manufacturer's
manual; and forthwith, or in the case of any material loss or damage
to any of the Equipment, as quickly as practicable after the
occurrence thereof, make or cause to be made all repairs,
replacements, and other improvements in connection therewith which are
necessary or desirable to such end; and promptly furnish to Agent a
statement respecting any loss or damage to any of the Equipment within
ten (10) business days after Grantor obtains knowledge of any such
loss or damage; and
(d) pay promptly when due all property and other taxes,
assessments and governmental charges or levies imposed upon, and all
claims (including claims for labor, materials and supplies) against,
the Equipment and Inventory, except to the extent the validity thereof
is being contested in good faith by appropriate proceedings and for
which adequate reserves in accordance with Generally Accepted
Accounting Principles have been set aside.
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SECTION 4.1.2. AS TO RECEIVABLES. Grantor shall keep its place(s) of
business and chief executive office and the office(s) where it keeps its
records concerning the Receivables, and all originals of all chattel paper
which evidence Receivables, located at the addresses set forth in ITEM C of
SCHEDULE I hereto, or, upon 30 days' prior written notice to Agent at such
other locations in a jurisdiction where all actions required by the first
sentence of Section 4.1.7 shall have been taken with respect to the
Receivables; not change its name except upon 30 days' prior written notice to
Agent; hold and preserve such records and chattel paper; and permit
representatives of Agent, at any time during normal business hours to inspect
and make abstracts from such records and chattel paper.
SECTION 4.1.3. AS TO ALL COLLATERAL.
(a) Grantor shall not permit the ownership of any of the
Collateral, or any legal or equitable interest therein, to become
vested in any other person or entity unless otherwise permitted under
or pursuant to the terms of the Credit Agreement; provided, however,
until such time as Agent shall notify Grantor of the revocation of
such power and authority Grantor (i) may in the ordinary course of its
business, at its own expense, sell, lease or furnish under the
contracts of service any of the Inventory and Equipment normally held
by Grantor or any Third Party for such purpose, and use and consume,
in the ordinary course of its business, any raw materials, work in
process or materials normally held by Grantor or any Third Party for
such purpose, and use and consume, in the ordinary course of its
business, any raw materials, work in process or materials normally
held by Grantor for such purpose, (ii) will, at its own expense,
endeavor to collect, as and when due, all amounts due with respect to
any of the Collateral, including the taking of such action with
respect to such collection as Agent may reasonably request or, in the
absence of such request, as Grantor may deem advisable, and (iii) may
grant,in the ordinary course of business, to any party obligated on
any of the Collateral, any rebate, refund or allowance to which such
party may be lawfully entitled, and may accept, in connection
therewith, the return of goods, the sale or lease of which shall have
given rise to such Collateral. Agent however, may, at any time after
the occurrence of an Event of Default, whether before or after any
revocation of such power and authority or the maturity of any of the
Secured Indebtedness, notify any parties obligated on any of the
Collateral to make payment to Agent of any amounts due or to become
due thereunder and enforce collection of any of the Collateral by suit
or otherwise and surrender, release, or exchange all or any part
thereof, or compromise or extend or renew for any period (whether or
not longer than the original period) any indebtedness thereunder or
evidenced thereby. Upon the written request of Agent after the
occurrence of an Event of Default, Grantor will, at its own expense,
within five (5) days after receipt of such request, notify any parties
obligated on any of the Collateral to make payment to Agent of any
amounts due or to become due thereunder.
(b) Agent is authorized to endorse, in the name of
Grantor, any item, howsoever received by Agent representing any
payment on or other proceeds of any of the Collateral.
SECTION 4.1.4. AS TO INTELLECTUAL PROPERTY COLLATERAL.
(a) Grantor shall not, and Grantor shall not permit any
of its licensees to, unless Grantor shall reasonably and in good faith
determine (and notice of such determination shall have been delivered
to Agent) that any of the Patent Collateral and/or Trademark
Collateral is of negligible economic value to Grantor:
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(i) fail to continue to use any of the Trademark
Collateral in order to maintain all of the Trademark
Collateral in full force free from any claim of abandonment
for non-use;
(ii) fail to employ all of the Patent Collateral
and Trademark Collateral registered with any Federal or state
or foreign authority with an appropriate notice of such
registration;
(iii) use any of the Trademark Collateral
registered with any Federal or state or foreign authority
except for the uses for which registration or application for
registration of all of the Trademark Collateral has been made;
or
(iv) do or permit any act or knowingly omit to do
any act whereby any of the Patent Collateral or Trademark
Collateral may lapse or become invalid or unenforceable.
(b) Grantor shall not, unless Grantor shall either
reasonably and in good faith determine (and notice of such
determination shall have been delivered to Agent) that any of the
Copyright Collateral or any of the Trade Secrets Collateral is of
negligible economic value to Grantor, do or permit any act or
knowingly omit to do any act whereby any of the Copyright Collateral
or any of the Trade Secrets Collateral may lapse or become invalid or
the rights thereto become unenforceable or be placed in the public
domain except upon expiration of the end of an unrenewable term of a
registration thereof.
(c) Grantor shall notify Agent within ten (10) business
days after it receives notice that any application or registration
relating to any material item of the Intellectual Property Collateral
may become abandoned or dedicated to the public or placed in the
public domain or invalid or unenforceable, or of any adverse
determination (including the institution of, or any such determination
or development in, any proceeding in the United States Patent and
Trademark Office, the United States Copyright Office, or any foreign
counterpart thereof or any court) regarding Grantor's ownership of any
of the Intellectual Property Collateral, its right to register the
same or to keep and maintain and enforce the same.
(d) In no event shall Grantor or any of its agents,
employees, designees or licensees file an application for the
registration of any Intellectual Property Collateral with the United
States Patent and Trademark Office, the United States Copyright
Office, or any similar office or agency in any other country or any
political subdivision thereof, unless it informs Agent of all such
additional filings within 30 days thereafter (or at any other time
upon the request of Agent), and upon written request of Agent executes
and delivers any and all agreements, instruments, documents and papers
as Agent may reasonably request to evidence Agent's security interests
in such Intellectual Property Collateral and the goodwill and general
intangibles of Grantor relating thereto or represented thereby.
(e) Grantor shall take all necessary steps, including in
any proceeding before the United States Patent and Trademark Office,
the United States Copyright Office, or any similar office or agency in
any other country or any political subdivision thereof, to maintain
and pursue any application (and to obtain the relevant registration)
filed with respect to, and to maintain any registration of, the
Intellectual Property Collateral, including the filing of applications
for renewal, affidavits of use, affidavits of incontestability and
opposition, interference and cancellation proceedings and the payment
of fees and taxes(except to the extent that dedication, abandonment or
invalidation is permitted under the foregoing clauses (a), (b) and
(c).
PII SECURITY AGREEMENT
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12
(f) Grantor shall promptly execute and deliver to Agent
any documents required to acknowledge or register or perfect Agent's
interest in any part of the Intellectual Property Collateral.
SECTION 4.1.5. INSURANCE. Grantor will maintain, and will cause each
of its Subsidiaries to maintain, insurance with respect to the Equipment and
Inventory with companies reasonably acceptable to Agent. Such insurance shall
be in an amount not less than the fair market value of the Equipment and
Inventory and shall be against such casualties, with such deductible amounts as
Agent shall reasonably approve. All insurance policies shall be written for
the benefit of Grantor and Agent, as their interest may appear, payable to
Agent as loss payee, or in other forms satisfactory to Agent, and such policies
or certificates evidencing the same shall be furnished to Agent. All policies
of insurance shall provide for written notice to Agent at least thirty (30)
days prior to cancellation.
SECTION 4.1.6. TRANSFERS AND OTHER LIENS. Grantor shall not:
(a) sell, assign (by operation of law or otherwise) or
otherwise dispose of any of the Collateral, except Inventory in the
ordinary course of business or as permitted by the Credit Agreement;
or
(b) create or suffer to exist any Lien or other charge or
encumbrance upon or with respect to any of the Collateral to secure
Indebtedness of any Person or entity, except for the security interest
created by this Security Agreement and except as permitted by the
Credit Agreement.
SECTION 4.1.7. FURTHER ASSURANCES, ETC. Grantor agrees that, from
time to time at its own expense, Grantor will promptly execute and deliver all
further instruments and documents, and take all further action, that may be
reasonably necessary or desirable, or that Agent may reasonably request, in
order to perfect, preserve and protect any security interest granted or
purported to be granted hereby or to enable Agent to exercise and enforce their
rights and remedies hereunder with respect to any Collateral. Without limiting
the generality of the foregoing, Grantor will
(a) upon the written request of Agent, xxxx conspicuously
each document included in the Inventory, each chattel paper included
in the Receivables and each Related Contract and each of its records
pertaining to the Collateral with a legend, in form and substance
satisfactory to Agent indicating that such document, chattel paper,
Related Contract or Collateral is subject to the security interest
granted hereby;
(b) upon the written request of Agent, any Receivable
shall be evidenced by a promissory note or other instrument,
negotiable document or chattel paper, and Grantor shall deliver and
pledge to Agent hereunder such promissory note, instrument, negotiable
document or chattel paper, duly endorsed and accompanied by duly
executed instruments of transfer or assignment, all in form and
substance satisfactory to Agent;
(c) execute and file such financing or continuation
statements, or amendments thereto, and such other instruments or
notices (including, without limitation, any assignment of claim form
under or pursuant to the federal assignment of claims statute, 31
U.S.C. Section 3726, any successor or amended version thereof or any
regulation promulgated under or pursuant to any version thereof), as
may be reasonably necessary or desirable, or as Agent may reasonably
request, in order to perfect
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13
and preserve the security interests and other rights granted or
purported to be granted to Agent hereby;
(d) furnish to Agent, from time to time upon Agent's
written request, statements and schedules further identifying and
describing the Collateral and such other reports in connection with
the Collateral as Agent may reasonably request, all in reasonable
detail; and
(e) furnish to Agent on a reasonable good faith efforts
basis such landlord estoppel and waiver agreements for properties
leased by Grantor (or properties where Grantor maintains inventory or
equipment) as shall be requested by Agent (all in form and substance
acceptable to Agent).
With respect to the foregoing and the grant of the security interests
hereunder, Grantor hereby authorizes Agent to file one or more financing or
continuation statements, and amendments thereto, relative to all or any part of
the Collateral without the signature of Grantor where permitted by law. A
carbon, photographic or other reproduction of this Security Agreement or any
financing statement covering the Collateral or any part thereof shall be
sufficient as a financing statement where permitted by law.
ARTICLE V
AGENT
SECTION 5.1. AGENT APPOINTED ATTORNEY-IN-FACT. Grantor hereby
irrevocably appoints Agent as Grantor's attorney-in-fact, with full authority
in the place and stead of Grantor and in the name of Grantor or otherwise, from
time to time in Agent's discretion, to take any action and to execute any
instruments which Agent may deem necessary or advisable to accomplish the
purposes of this Security Agreement, including, without limitation:
(a) to ask, demand, collect, xxx for, recover,
compromise, receive and give acquittance and receipts for moneys due
and to become due under or in respect of any of the Collateral;
(b) to receive, endorse, and collect any drafts or other
instruments, documents and chattel paper, in connection with clause
(a) above;
(c) to file any claims or take any action or institute
any proceedings which Agent may deem necessary or desirable for the
collection of any of the Collateral or otherwise to enforce the rights
of Agent with respect to any of the Collateral; and
(d) to perform the affirmative obligations of Grantor
hereunder (including all obligations of Grantor pursuant to Section
4.1.7).
Grantor hereby acknowledges, consents and agrees that the power of attorney
granted pursuant to this Section is irrevocable and coupled with an interest.
SECTION 5.2. AGENT MAY PERFORM. If Grantor fails to perform any
agreement contained herein, Agent may perform, or cause performance of, such
agreement, and the reasonable expenses of Agent incurred in connection
therewith shall be payable by Grantor pursuant to Section 6.3.
PII SECURITY AGREEMENT
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14
SECTION 5.3. AGENT HAS NO DUTY. In addition to, and not in limitation
of, Section 2.4, the powers conferred on Agent hereunder are solely to protect
their interests (on behalf of the Lender Parties) in the Collateral and shall
not impose any duty on it to exercise any such powers. Except for reasonable
care of any Collateral in its possession and the accounting for moneys actually
received by it hereunder, Agent shall not have any duty as to any Collateral or
as to the taking of any necessary steps to preserve rights against prior
parties or any other rights pertaining to any Collateral.
SECTION 5.4. REASONABLE CARE. Agent is required to exercise
reasonable care in the custody and preservation of any of the Collateral in its
possession; provided, however, Agent shall be deemed to have exercised
reasonable care in the custody and preservation of any of the Collateral, if it
takes such action for that purpose as Grantor reasonably requests in writing at
times other than upon the occurrence and during the continuance of any Event of
Default, but failure of Agent to comply with any such request at any time shall
not in itself be deemed a failure to exercise reasonable care.
ARTICLE VI
REMEDIES
SECTION 6.1. CERTAIN REMEDIES. If any Event of Default shall have
occurred and be continuing:
(a) Agent may exercise in respect of the Collateral, in
addition to other rights and remedies provided for herein or otherwise
available to it, all the rights and remedies of a secured party on
default under the U.C.C. (whether or not the U.C.C. applies to the
affected Collateral) and also may:
(i) require Grantor to, and Grantor hereby agrees
that it will, at its expense and upon request of Agent,
forthwith, assemble all or part of the Collateral as directed
by Agent and make it available to Agent at a place to be
designated by Agent which is reasonably convenient to all
parties;
(ii) without notice except as specified below,
sell the Collateral or any part thereof in one or more parcels
at public or private sale, at any of Agent's offices or
elsewhere, for cash, on credit or for future delivery, and
upon such other terms as Agent may deem commercially
reasonable. Grantor agrees that, to the extent notice of sale
shall be required by law, at least ten (10) days' prior notice
to Grantor of the time and place of any public sale or the
time after which any private sale is to be made shall
constitute reasonable notification. Agent shall not be
obligated to make any sale of Collateral regardless of notice
of sale having been given. Agent may adjourn any public or
private sale from time to time by announcement at the time and
place fixed therefor, and such sale may, without further
notice, be made at the time and place to which it was so
adjourned; and
(iii) in its own name or the name of Grantor, at
any time, to notify any account debtor or obligor or any party
obligated on any of the Collateral (including, but not limited
to the Receivables, Related Contracts, and General
Intangibles) to make all payments due or to become due thereon
directly to Agent or such other person or officer as Agent may
require, whereupon the power and authority of Grantor to
collect the same in the ordinary course of its business shall
be deemed to be immediately revoked and terminated. With or
without
PII SECURITY AGREEMENT
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15
such general notification, Agent may take or bring in
Grantor's name or that of the Agent all steps, actions, suits
or proceedings deemed by Agent reasonably necessary or
desirable to effect possession or collection of the
Collateral, including sums due or paid thereon, may complete
any contract or agreement of Grantor in any way related to any
of the Collateral, may make allowances or adjustments related
to the Collateral, may compromise any claims related to the
Collateral, may issue credit in its own name or the name of
Grantor, may remove from Grantor's premises all documents,
instruments, records, files or other items relating to the
Collateral. Regardless of any provision hereof, however,
Agent shall never be liable for its failure to collect or for
its failure to exercise diligence in the collection,
possession, or any transaction concerning, all or part of the
Collateral or sums due or paid thereon, nor shall it be under
any obligation whatsoever to anyone by virtue of this Security
Agreement, except to account for the funds that it shall
actually receive hereunder.
Each account debtor and obligor making payment to
Agent hereunder shall be fully protected in relying on the
written statement of Agent that it then holds a security
interest which entitles it to receive such payments, and the
receipt of Agent for such payment shall be full acquittance
therefor to the one making such payment.
Issuance by Agent of a receipt to any person, firm,
corporation or other entity obligated to pay any amounts to
Grantor shall be a full and complete release, discharge and
acquittance to such person, firm, corporation or other entity
to the extent of any amount so paid to Agent. Agent is hereby
authorized and empowered on behalf of the Grantor to endorse
the name of Grantor upon any check, draft, instrument,
receipt, instruction or other document or items, including,
but not limited to, all items evidencing payment upon any
indebtedness of any person, firm, corporation or other entity
to Grantor coming into Agent's possession, and to receive and
apply the proceeds therefrom in accordance with the terms
hereof. Agent is hereby granted an irrevocable power of
attorney, which is coupled with an interest, to execute all
checks, drafts, receipts, instruments, instructions or other
documents, agreements or items on behalf of Grantor, after the
occurrence of an Event of Default, as shall be deemed by Agent
to be necessary or advisable, in the sole discretion of Agent,
to protect their security interests in the Collateral or the
repayment of the indebtedness secured hereby, and Agent shall
not incur any liability in connection with or arising from its
exercise of such power of attorney, except in the event of
Agent's willful misconduct or gross negligence.
(b) In addition to and without limiting the rights of
Agent under Section 6.2. below, all cash proceeds received by Agent in
respect of any sale of, collection from, or other realization upon all
or any part of the Collateral may, in the discretion of Agent, be held
by Agent as collateral for, and/or then or at any time thereafter
applied (after payment of any amounts payable to Agent pursuant to
Section 6.2) in whole or in part by Agent for the benefit of the
Lender Parties against, all or any part of the Secured Indebtedness in
such order as provided in the Credit Agreement or as Agent shall
elect. Any surplus of such cash or cash proceeds held by Agent and
remaining after payment in full of all the Secured Indebtedness shall
be paid over to Grantor or to whomsoever may be lawfully entitled to
receive such surplus.
SECTION 6.2. COLLATERAL ACCOUNT.
PII SECURITY AGREEMENT
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16
(a) If an Event of Default shall have occurred and be
continuing, upon written notice by Agent to Grantor pursuant to this
clause, all proceeds of Collateral received by Grantor shall be
delivered in kind to Agent for deposit to a deposit account (the
"COLLATERAL ACCOUNT") of Grantor maintained with Agent, and Grantor
shall not commingle any such proceeds, and shall hold separate and
apart from all other property, all such proceeds in express trust for
the benefit of Agent until delivery thereof is made to Agent. No
funds other than proceeds of Collateral will be deposited in the
Collateral Account.
(b) Agent shall have the right to apply any amount in the
Collateral Account to the payment of any of the Secured Indebtedness
that is due and payable or payable upon demand, or to the payment of
any of the Secured Indebtedness at any time that an Event of Default
shall have occurred and be continuing. Agent may at any time transfer
to Grantor's general demand deposit accounts any or all of the
collected funds in the Collateral Account; provided, however, that any
such transfer shall not be deemed to be a waiver or modification of
any of Agent's rights under this Section.
SECTION 6.3. INDEMNITY AND EXPENSES.
(a) Grantor agrees to indemnify Agent from and against
any and all claims, losses and liabilities arising out of or resulting
from this Security Agreement (including, without limitation,
enforcement of this Security Agreement), except claims, losses or
liabilities resulting from Agent's gross negligence or willful
misconduct.
WITHOUT LIMITATION, THE FOREGOING INDEMNITY SHALL APPLY TO EACH
INDEMNIFIED PERSON WITH RESPECT TO MATTERS WHICH IN WHOLE OR IN PART
ARE CAUSED BY OR ARISE OUT OF THE NEGLIGENCE OF SUCH INDEMNIFIED
PERSON.
(b) Grantor will upon demand pay to Agent the amount of
any and all reasonable expenses, including the reasonable fees and
disbursements of its counsel and of any experts and agents, which
Agent may incur in connection with:
(i) the administration of this Security
Agreement;
(ii) the custody, preservation, use or operation
of, or the sale of, collection from, or other realization
upon, any of the Collateral;
(iii) the exercise or enforcement of any of the
rights of Agent or the Lender Parties hereunder; or
(iv) the failure by Grantor to perform or observe
any of the provisions hereof.
SECTION 6.4. RIGHTS CUMULATIVE. The rights, titles, interests, liens
and securities of Agent hereunder shall be cumulative of all of the securities,
rights, titles, interests or liens which Agent may now or at any time hereafter
hold securing the payment of the Secured Indebtedness, or any part thereof.
SECTION 6.5. LOUISIANA REMEDIES. With respect to Collateral located
in the State of Louisiana, Agent will be entitled to foreclose under this
Security Agreement under ordinary or executory process
PII SECURITY AGREEMENT
16
17
procedures, and to cause the Collateral to be immediately seized, wherever
found, and sold with or without appraisal, in regular session of court or in
vacation, in accordance with applicable Louisiana law, without the necessity of
further demanding payment from Grantor, notifying Grantor, or placing Grantor
in default. For purposes of foreclosure under Louisiana executory process
procedures, Grantor confesses judgment and acknowledges to be indebted to the
Lender Parties up to the full amount of the Secured Indebtedness. To the
extent permitted under applicable Louisiana law, Grantor additionally waives:
(a) the benefit of appraisal as provided for under Articles 2332, 2336, 2723,
and 2724 of the Louisiana Code of Civil Procedure and all other laws with
regard to appraisal upon judicial sale; (b) the demand and three days' delay as
provided under Articles 2639 and 2721 of the Louisiana Code of Civil Procedure;
(c) the notice of seizure as provided under Articles 2293 and 2721 of the
Louisiana Code of Civil Procedure; (d) the three days' delay provided under
Articles 2331 and 2722 of the Louisiana Code of Civil Procedure; and (e) all
other benefits provided under Articles 2331, 2722 and 2723 of the Louisiana
Code of Civil Procedure and all other Articles not specifically mentioned
above. Grantor further acknowledges that any declaration of fact made by
authentic act before a Notary Public and two witnesses by a person declaring
that such facts are within his or her knowledge shall constitute authentic
evidence of such facts for purposes of foreclosure under applicable Louisiana
law. Grantor further agrees that Agent may appoint a keeper of the Collateral
in the event of foreclosure.
ARTICLE VII
MISCELLANEOUS PROVISIONS
SECTION 7.1. LOAN PAPER. This Security Agreement is a Loan Paper
executed pursuant to the Credit Agreement and shall (unless otherwise expressly
indicated herein) be construed, administered and applied in accordance with the
terms and provisions thereof.
SECTION 7.2. AMENDMENTS, ETC. No amendment to or waiver of any
provision of this Security Agreement nor consent to any departure by Grantor
herefrom, shall in any event be effective unless the same shall be in writing
and signed by Agent, and then such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given.
SECTION 7.3. ADDRESSES FOR NOTICES. All notices and other
communications provided for hereunder shall be in writing or by facsimile and,
if to Grantor, mailed, delivered or transmitted to it at the address or
facsimile number set forth below its signature hereto, if to Agent, mailed,
delivered or transmitted to it at the address or facsimile number of Agent
specified in the Credit Agreement, or as to either party at such other address
or facsimile number as shall be designated by such party in a written notice to
each other party complying as to delivery with the terms of this Section. All
such notices and other communications, if mailed and properly addressed with
postage prepaid or if properly addressed and sent by prepaid courier service,
shall be deemed given when received; and all such notices and other
communications, if transmitted by facsimile, shall be deemed given when
transmitted (upon receipt of electronic confirmation of transmission).
SECTION 7.4. SECTION CAPTIONS. Section captions used in this
Security Agreement are for convenience of reference only, and shall not affect
the construction of this Security Agreement.
SECTION 7.5. SEVERABILITY. Wherever possible each provision of this
Security Agreement shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Security Agreement
shall be prohibited by or invalid under such law, such provision shall be
ineffective to
PII SECURITY AGREEMENT
17
18
the extent of such prohibition or invalidity, without invalidating the
remainder of such provision or the remaining provisions of this Security
Agreement.
SECTION 7.6. LIMITATION. Regardless of any provisions contained in
this Security Agreement, the Credit Agreement, the Notes, or any other
evidences of the Secured Indebtedness, or other instruments executed or
delivered in connection therewith, neither Agent nor any Lender Party shall
ever be entitled to receive, collect or apply, as interest on the Secured
Indebtedness, any amount in excess of the highest lawful rate and, in the event
that Agent or any Lender Party ever receives, collects or applies, as interest,
any such excess, such amount which would be excessive interest shall be applied
to the reduction of the unpaid principal balance of the Secured Indebtedness,
and if the principal balance of the Secured Indebtedness is paid in full, any
remaining excess shall be forthwith paid to Grantor. In determining whether or
not the interest paid or payable, under any specific contingency, exceeds the
highest lawful rate, Grantor, Agent, and the Lender Parties shall, to the
maximum extent permitted under applicable law, (a) characterize any
non-principal payment as an expense, fee, or premium rather than as interest,
(b) exclude voluntary prepayments and the effects thereof, and (c) "spread" the
total amount of interest throughout the entire term of the Credit Agreement and
the Notes so that the interest rate is uniform throughout the entire term of
the Credit Agreement and the Notes.
SECTION 7.7 OBLIGATIONS ABSOLUTE. All rights and remedies of the
Agent hereunder, and all obligations of the Grantor hereunder, shall be
absolute and unconditional irrespective of:
(a) any lack of validity or enforceability of the Credit
Agreement or any of the other Loan Papers or any other agreement or
instrument relating to any of the foregoing;
(b) any change in the time, manner, or place of payment
of, or in any other term of, all or any of the Secured Indebtedness,
any or all of the Obligation, or any other amendment or waiver of or
any consent to any departure from the Credit Agreement or any of the
Loan Papers;
(c) any exchange, release, or non-perfection of any
Collateral, or any release or amendment or waiver of or consent to any
departure from any guaranty, for all or any of the Secured
Indebtedness; or
(d) any other circumstance (other than payment in full of
the Secured Indebtedness) that might otherwise constitute a defense
available to, or a discharge of, the Grantor.
SECTION 7.8. SUCCESSORS AND ASSIGNS. This Security Agreement is
binding upon and shall inure to the benefit of Grantor, Agent, and the Lender
Parties, their respective heirs, executors, representatives, administrators,
successors and assigns; provided, however, that Grantor may not, without the
prior written consent of Agent, assign any rights, powers, duties or
obligations hereunder.
SECTION 7.9. GOVERNING LAW, ENTIRE AGREEMENT, ETC. THIS SECURITY
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL
LAWS OF THE STATE OF TEXAS, EXCEPT TO THE EXTENT THAT THE VALIDITY OR
PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN
RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION
OTHER THAN THE STATE OF TEXAS.
PII SECURITY AGREEMENT
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19
SECTION 7.10. FINAL AGREEMENT. THIS SECURITY AGREEMENT AND THE OTHER
LOAN PAPERS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
IN WITNESS WHEREOF, Grantor has caused this Security Agreement to be
duly executed and delivered by its officer thereunto duly authorized as of the
date first above written.
GRANTOR:
PACKAGED ICE, INC., a Texas corporation
By:
-----------------------------------
Xxxxx X. Xxxxxx, Chief Executive Officer
Address: 0000 Xxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: X.X. Xxxxx, III
Facsimile No.: (000) 000-0000
PII SECURITY AGREEMENT
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20
SCHEDULE I
TO
SECURITY AGREEMENT
ITEM A. LOCATION OF EQUIPMENT AND INVENTORY
SEE ATTACHED LIST
PII SECURITY AGREEMENT
21
SCHEDULE I
TO
SECURITY AGREEMENT
ITEM B. LOCATION OF LOCK BOXES
NONE
PII SECURITY AGREEMENT
22
SCHEDULE I
TO
SECURITY AGREEMENT
ITEM C. LOCATION OF RECORDS CONCERNING RECEIVABLES
0000 Xxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
PII SECURITY AGREEMENT
23
SCHEDULE I
TO
SECURITY AGREEMENT
ITEM D. TRADE NAMES
(1) Packaged Ice, Inc.
(2) First Ice Company
(3) Codorus Leasing Company
PII SECURITY AGREEMENT
24
SCHEDULE II
TO
SECURITY AGREEMENT
ITEM A.
REGISTERED PATENTS
------------------
Country Patent Registration No. Registration Date
------- ------ ---------------- -----------------
United States 1 5,109,651 10/05/90
Taiwan 1 UM-89642 10/15/91
Taiwan 1 UM-87144 10/15/91
Mexico 1 178614 10/04/91
Australia 1 646999 10/01/91
Brazil 1 9106944-0 10/01/91
United States 2 5,458,851 10/29/93
United States 3 5,630,310 10/10/95
United States 4 5,581,982 10/10/95
PENDING PATENT APPLICATIONS
---------------------------
Country Patent Serial No. Filing Date
------- ------ ---------- -----------
China 1 91110837.8 10/05/91
India 1 1006/Del/91 10/22/91
Patent Cooperation Treaty 1 PCT/US91/07214 10/01/91
Canada 1 2093337 10/01/91
European Patent Office 92900332.5 10/01/91
Japan 1 04-501236 10/01/91
Patent Cooperation Xxxxxx 0, 0, & 0 XXX/XX00/00000 00/00/00
Xxxxx 2, 3, & 4 94 1 94331.3 10/29/94
Xxxxxx 0, 0, & 0 00 0000 00/00/00
Xxxxxx 2, 3, & 4 PI 9407927-7 10/29/94
Australia 2, 3, & 4 10850/95 10/29/94
Xxxxx 0, 0, & 0 000000/00 00/00/00
Xxxxxx Xxxxxx 0 08/751,403 11/18/96
1 Automatic Ice Bagger.
2 Automatic Ice Bagger with Self-Contained Sanitizing System.
3 Method for Automatically Bagging Ice Using a Timer and Multi-
Positional Electronic Scale.
4 Method for Automatically Bagging Ice Using a Timer and Multi-
Positional Electronic Scale.
5 Grip for a Grasping Device.
PII SECURITY AGREEMENT
25
PATENT APPLICATIONS IN PREPARATION
----------------------------------
Country Patent Docket No. Expected Filing Process/Machine
------- ------ ---------- Date ---------------
----
NONE
ITEM B. PATENT LICENSES
---------------
Country or Patent Licensor Licensee Effective Expiration
Territory ------ -------- -------- --------- ----------
--------- Date Date
---- ----
United States 5,440,863 Hoshizaki Electric Packaged Ice, Inc. 5/28/93 Perpetual
Co., Ltd. and
Hoshizaki America,
Inc.
United States 5,473,865 Hoshizaki Electric Packaged Ice, Inc. 5/28/93 Perpetual
Co., Ltd. and
Hoshizaki America,
Inc.
United Kingdom 0 518 382 Hoshizaki Electric Packaged Ice, Inc. 5/28/93 Perpetual
Co., Ltd. and
Hoshizaki America,
Inc.
PII SECURITY AGREEMENT
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26
SCHEDULE III
TO
SECURITY AGREEMENT
ITEM A.
REGISTERED TRADEMARKS
---------------------
Country Trademark Registration No. Registration Date
------- --------- ---------------- -----------------
NONE
PENDING TRADEMARK APPLICATIONS
------------------------------
Country Trademark Serial No. Filing Date
------- --------- ---------- -----------
United States Packaged Ice, Inc. 74/695,059 6/26/96
United States Packaged Ice, Inc. (plus design) 74/703,747 7/20/95
TRADEMARK APPLICATIONS IN PREPARATION
-------------------------------------
Country Trademark Docket No. Expected Filing Products/Services
------- --------- ---------- Date -----------------
----
NONE
ITEM B. TRADEMARK LICENSES
------------------
Country or Trademark Licensor Licensee Effective Date Expiration
Territory --------- -------- -------- -------------- Date
--------- ----
NONE
PII SECURITY AGREEMENT
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SCHEDULE IV
TO
SECURITY AGREEMENT
Intellectual Property Licenses
Trade Secret and Know-How Licenses
Country or Licensor Licensee Effective Date Expiration Subject Matter
Territory(1) -------- -------- -------------- Date --------------
--------- -----
Worldwide Hoshizaki Packaged Ice, 5/28/93 Perpetual Know-how
Electric Co., Inc. relating to U.S.
Ltd. and Patent Nos.
Hoshizaki 5,440,863 and
America, Inc. 5,473,865; and
U.K. Patent No.
0,518,382
__________________________________
(1) List items related to the United States first for ease of recordation. List
items related to other countries next, grouped by country and in alphabetical
order by country name.
PII SECURITY AGREEMENT
28
SCHEDULE V
TO
SECURITY AGREEMENT
ITEM A.
REGISTERED COPYRIGHTS/MASK WORKS
--------------------------------
Country Docket No. Filing Date Author(s) Title
------- ---------- ----------- --------- -----
NONE
COPYRIGHTS/MASK WORKS PENDING REGISTRATION APPLICATIONS
-------------------------------------------------------
Country Docket No. Filing Date Author(s) Title
------- ---------- ----------- --------- -----
NONE
COPYRIGHTS/MASK WORKS APPLICATIONS IN PREPARATION
-------------------------------------------------
Country Docket No. Expected Filing Author(s) Title
------- ---------- Date --------- -----
----
NONE
ITEM B. COPYRIGHT/MASK WORKS LICENSES
Country or Licensor Licensee Effective Date Expiration Subject Matter
Territory -------- -------- -------------- Date --------------
--------- ----
NONE
PII SECURITY AGREEMENT
