Amendment to General Statement of Beneficial Ownership — Schedule 13D
Filing Table of Contents
Document/Exhibit Description Pages Size
1: SC 13D/A Amendment to General Statement of Beneficial 11 50K
Ownership
2: EX-1 Underwriting Agreement 5± 39K
3: EX-2 Plan of Acquisition, Reorganization, Arrangement, 45 194K
Liquidation or Succession
4: EX-3 Articles of Incorporation/Organization or By-Laws 11 43K
5: EX-4 Instrument Defining the Rights of Security Holders 6 23K
6: EX-5 Opinion re: Legality 9 34K
7: EX-6 Opinion re: Discount on Capital Shares 7 26K
8: EX-7 Opinion re: Liquidation Preference 14 42K
9: EX-8 Opinion re: Tax Matters 8 31K
10: EX-9 Voting Trust Agreement 10 37K
11: EX-10 Material Contract 24 98K
12: EX-11 Statement re: Computation of Earnings Per Share 7 18K
EX-6 — Opinion re: Discount on Capital Shares
| EX-6 | 1st Page of 7 | TOC | ↑Top | Previous | Next | ↓Bottom | Just 1st |
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EXHIBIT 6
PATENT AND TRADEMARK SECURITY AGREEMENT - PARENT
AGREEMENT made as of this 6th day of June, 2001, by Select
Comfort Corporation, a Minnesota corporation (hereinafter called "Debtor"),
in favor of St. Paul Venture Capital VI, LLC, a Delaware limited liability
company, as collateral agent for the holders of the Notes referred to below
(the "Secured Party").
In order to secure the payment of the principal of and
interest on the Senior Secured Convertible Notes of Debtor payable to the
Purchasers named in Schedule 1 of the Note Purchase Agreement referred to
below, as such Schedule 1 is amended or deemed amended from time to time in
accordance with the terms of the Note Purchase Agreement (the "Purchasers"),
or registered assigns, in the aggregate original principal amount of up to
$12,000,000 (which notes, together with any notes issued in substitution or
exchange therefor, are herein collectively called the "Notes"), issued
pursuant to the terms of that certain Note Purchase Agreement dated the date
hereof among Debtor and the Purchasers (as amended, modified or supplemented
from time to time, the "Note Purchase Agreement"), and to secure the payment
and performance of each and every other debt, liability and obligation of
every type and description which Debtor or any of its Subsidiaries (as
defined in the Note Purchase Agreement) may now or at any time hereafter owe
to the holders of the Notes, or any of them, under this Agreement, that
certain Security Agreement-Parent dated as of the date hereof by Debtor in
favor of the Secured Party (the "Security Agreement"), the Note Purchase
Agreement or any of the other Transaction Documents (as defined in the Note
Purchase Agreement), whether such debt, liability or obligation now exists or
is hereafter created or incurred and whether such debt, liability or
obligation is or may be direct or indirect, due or to become due, absolute or
contingent, primary or secondary, liquidated or unliquidated, or sole, joint,
several or joint and several (the principal of and interest on the Notes,
together with all such other debts, liabilities and obligations, being herein
collectively called the "Obligations"), the Debtor has granted the Secured
Party a security interest in substantially all of its personal property
(including without limitation all of its general intangibles) pursuant to the
Security Agreement;
As a further condition to entering into the Note Purchase
Agreement and the Security Agreement, the Secured Party has required the
execution and delivery of this Agreement by the Debtor.
ACCORDINGLY, in consideration of the mutual covenants
contained in the Note Purchase Agreement, the Security Agreement and herein,
the parties hereby agree as follows:
1. DEFINITIONS. All terms defined in the recitals hereto,
in the Security Agreement or in Note Purchase Agreement that are not
otherwise defined herein shall have the meanings given to them therein. In
addition, the following terms have the meanings set forth below:
"Patents" means all of the Debtor's right, title and interest
in and to: (i) patents or applications for patents, (ii) licenses, fees
or royalties with respect to each, (iii) the right to sue for past,
present and future infringement and damages therefor, (iv) and licenses
thereunder, all as presently existing or hereafter arising or acquired,
including without limitation the patents listed on Exhibit A.
"Trademarks" means all of the Debtor's right, title and
interest in and to: (i) trademarks, service marks, collective
membership marks, registrations and applications for registration for
each, and the respective goodwill associated with each, (ii) licenses,
fees or royalties with respect to each, (iii) the right to sue for
past, present and future infringement, dilution and damages therefor,
(iv) and licenses thereunder, all as presently existing or hereafter
arising or acquired, including, without limitation, the marks listed on
Exhibit B.
2. GRANT OF SECURITY INTEREST. The Debtor hereby
irrevocably pledges and assigns to, and grants the Secured Party a security
interest (the "Security Interest") in, with power of sale to the extent
permitted by law, the Patents and the Trademarks to secure payment and
performance of the Obligations. As is set forth in greater detail in the
Security Agreement, the Security Interest in the Trademarks is coupled with a
security interest in substantially all of the assets (other than real
property) of the Debtor.
3. REPRESENTATIONS, WARRANTIES AND AGREEMENTS. The Debtor
represents, warrants and agrees that:
(a) EXISTENCE; AUTHORITY. Debtor is a corporation duly
organized, validly existing and in good standing under the laws of its
state of incorporation, and this Agreement has been duly and validly
authorized by all necessary corporate action on the part of Debtor.
(b) PATENTS. Exhibit A accurately lists all Patents owned or
controlled by the Debtor as of the date hereof, or to which the Debtor
has a right as of the date hereof to have assigned to it, and
accurately reflects the existence and status of applications and
letters patent pertaining to the Patents as of the date hereof. If
after the date hereof the Debtor owns, controls or has a right to have
assigned to it any Patents not listed on Exhibit A, or if Exhibit A
ceases to accurately reflect the existence and status of applications
and letters patent pertaining to the Patents, then the Debtor shall
within 60 days provide written notice to the Secured Party with a
replacement Exhibit A, which upon acceptance by the Secured Party shall
become part of this Agreement.
(c) TRADEMARKS. Exhibit B accurately lists all Trademarks
owned or controlled by the Debtor as of the date hereof and accurately
reflects the existence and status of Trademarks and all applications
and registrations pertaining thereto as of the date hereof; provided,
however, that Exhibit B need not list common law marks (i.e.,
Trademarks for which there are no applications or registrations) which
are not
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material to the Debtor's or Subsidiaries' business(es). If after the
date hereof the Debtor owns or controls any Trademarks not listed
on Exhibit B (other than common law marks which are not material
to the Debtor's or Subsidiaries' business(es)), or if Exhibit B ceases
to accurately reflect the existence and status of applications and
registrations pertaining to the Trademarks, then the Debtor shall
promptly provide written notice to the Secured Party with a replacement
Exhibit B, which upon acceptance by the Secured Party shall become part
of this Agreement.
(d) SUBSIDIARIES. As of the date hereof, no Subsidiary owns,
controls, or has a right to have assigned to it any items that would,
if such item were owned by the Debtor, constitute Patents or
Trademarks. If after the date hereof any Subsidiary owns, controls, or
has a right to have assigned to it any such items, then the Debtor
shall promptly either: (i) cause such Subsidiary to assign all of its
rights in such item(s) to the Debtor; or (ii) notify the Secured Party
of such item(s) and cause such Subsidiary to execute and deliver to the
Secured Party a patent and trademark security agreement substantially
in the form of this Agreement.
(e) TITLE. To the best of the Debtor's knowledge, the Debtor
has absolute title to each Patent and each Trademark listed on Exhibits
A and B, free and clear of all security interests, liens and
encumbrances, except the Security Interest and Permitted Liens (as
defined in the Note Purchase Agreement) and except as initially
disclosed on the relevant exhibit (i.e., replacement exhibits may
include exceptions only for newly acquired Patents and Trademarks, not
for Patents and Trademarks which were listed on a prior version of the
exhibits). The Debtor: (i) will have, at the time the Debtor acquires
any rights in Patents or Trademarks hereafter arising, absolute title
to each such Patent or Trademark free and clear of all security
interests, liens and encumbrances, except the Security Interest and
Permitted Liens, and (ii) will keep all Patents and Trademarks free and
clear of all security interests, liens and encumbrances, except the
Security Interest and Permitted Liens.
(f) NO SALE. The Debtor will not sell, encumber or otherwise
dispose of the Patents or Trademarks, or any interest therein, without the prior
written consent of the Secured Party.
(g) DEFENSE. The Debtor will at its own expense, and using its
commercially reasonable efforts, protect and defend the Patents and
Trademarks against all claims or demands of all persons other than the
Secured Party and any holders of Permitted Liens.
(h) MAINTENANCE. The Debtor will at its own expense maintain
the Patents and the Trademarks to the extent reasonably advisable in
its business including, but not limited to, filing all applications to
obtain letters patent or trademark registrations and all affidavits,
maintenance fees, annuities, and renewals possible with respect to
letters patent, trademark registrations and applications therefor. The
Debtor covenants that it will not abandon nor fail to pay any
maintenance fee or annuity due
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and payable on any Patent or Trademark, nor fail to file any required
affidavit or renewal in support thereof, without first providing the
Secured Party: (i) sufficient written notice, of at least 30 days, to
allow the Secured Party to timely pay any such maintenance fees or
annuities which may become due on any of said Patents or Trademarks, or
to file any affidavit or renewal with respect thereto, and (ii) a
separate written power of attorney or other authorization to pay such
maintenance fees or annuities, or to file such affidavit or renewal,
should such be necessary or desirable.
(i) SECURED PARTY'S RIGHT TO TAKE ACTION. If the Debtor fails
to perform or observe any of its covenants or agreements set forth in
this Section 3, and if such failure continues for a period of 10 days
after the Secured Party gives the Debtor written notice thereof (or, in
the case of the agreements contained in subsection (h), immediately
upon the occurrence of such failure, without notice or lapse of time),
or if the Debtor notifies the Secured Party that it intends to abandon
a Patent or Trademark, the Secured Party may (but need not) perform or
observe such covenant or agreement or take steps to prevent said
intended abandonment on behalf and in the name, place and stead of the
Debtor (or, at the Secured Party's option, in the Secured Party's own
name) and may (but need not) take any and all other actions which the
Secured Party may reasonably deem necessary to cure or correct such
failure or prevent said intended abandonment.
(j) COSTS AND EXPENSES. Except to the extent that the effect
of such payment would be to render any loan or forbearance of money
usurious or otherwise illegal under any applicable law, the Debtor
shall pay the Secured Party on demand the amount of all moneys expended
and all costs and expenses (including reasonable attorneys' fees and
disbursements) incurred by the Secured Party in connection with or as a
result of the Secured Party's taking action under subsection (i) or
exercising its rights under Section 6, together with interest thereon
from the date expended or incurred by the Secured Party at the highest
rate then applicable to any of the Obligations.
(k) POWER OF ATTORNEY. To facilitate the Secured Party's
taking action under subsection (i) and exercising its rights under
Section 6, the Debtor hereby irrevocably appoints (which appointment is
coupled with an interest) the Secured Party, or its delegate, as the
attorney-in-fact of the Debtor with the right (but not the duty) from
time to time to create, prepare, complete, execute, deliver, endorse or
file, in the name and on behalf of the Debtor, any and all instruments,
documents, applications, and other agreements and writings required to
be obtained, executed, delivered or endorsed by the Debtor under this
Section 3, or necessary for the Secured Party, after the occurrence and
during the continuance of an Event of Default, to enforce or use the
Patents or Trademarks or to grant or issue any exclusive or
non-exclusive license under the Patents or Trademarks to any third
party, or to sell, assign, transfer, pledge, encumber or otherwise
transfer title in or dispose of the Patents or Trademarks to any third
party. The Debtor hereby ratifies all that such attorney shall lawfully
do or cause
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to be done by virtue hereof. The power of attorney granted herein
shall terminate upon final and indefeasible payment and performance
of all Obligations.
4. DEBTOR'S USE OF THE PATENTS AND TRADEMARKS. The Debtor
shall be permitted to control and manage the Patents and Trademarks,
including the right to exclude others from making, using or selling items
covered by the Patents and Trademarks and any licenses thereunder, in the
same manner and with the same effect as if this Agreement had not been
entered into, so long as no Event of Default occurs and remains uncured.
5. EVENTS OF DEFAULT. Each of the following occurrences
shall constitute an event of default under this Agreement (herein called
"Event of Default"): (a) an Event of Default, as defined in the Note Purchase
Agreement or the Security Agreement, shall occur; (b) the Debtor shall fail
promptly to observe or perform any covenant or agreement herein binding on it
and such failure shall continue for a period of 15 days after written notice
thereof shall have been given by the Secured Party to the Debtor; or (c) any
of the representations or warranties contained in Section 3 shall prove to
have been incorrect in any material respect when made.
6. REMEDIES. Upon the occurrence of an Event of Default and
at any time during the continuance thereof, the Secured Party may, at its
option, take any or all of the following actions:
(a) exercise any or all remedies available under the Security
Agreement;
(b) sell, assign, transfer, pledge, encumber or otherwise
dispose of the Patents and Trademarks; or
(c) enforce the Patents and Trademarks and any licenses
thereunder, and if the Secured Party shall commence any suit for such
enforcement, the Debtor shall, at the request of the Secured Party, do
any and all lawful acts and execute any and all proper documents
required by the Secured Party in aid of such enforcement.
7. MISCELLANEOUS. This Agreement can be waived, modified,
amended, terminated or discharged, and the Security Interest can be released,
only explicitly in a writing signed by the Secured Party. A waiver signed by
the Secured Party shall be effective only in the specific instance and for
the specific purpose given. Mere delay or failure to act shall not preclude
the exercise or enforcement of any of the Secured Party's rights or remedies.
All rights and remedies of Secured Party shall be cumulative and may be
exercised singularly or concurrently, at Secured Party's option, and the
exercise or enforcement of any one such right or remedy shall neither be a
condition to nor bar the exercise or enforcement of any other. All notices to
be given to Debtor under this Agreement shall be given in the manner and with
the effect provided in the Note Purchase Agreement. The Secured Party shall
not be obligated to preserve any rights Debtor may have against prior
parties, to realize on the Patents and the Trademarks at all or in any
particular manner or order, or to apply any cash proceeds of Patents and the
Trademarks in any particular order of application. This
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Agreement shall be binding upon and inure to the benefit of Debtor and the
Secured Party and their respective successors and assigns (including without
limitation any successor Collateral Agent under and as defined in the Note
Purchase Agreement), and shall take effect when signed by Debtor and
delivered to Secured Party, and Debtor waives notice of the Secured Party's
acceptance thereof. Except to the extent otherwise required by law, this
Agreement shall be governed by the internal laws of the State of Minnesota.
If any provision or application of this Agreement is held unlawful or
unenforceable in any respect, such illegality or unenforceability shall not
affect other provisions or applications which can be given effect, and this
Agreement shall be construed as if the unlawful or unenforceable provision or
application had never been contained herein or prescribed hereby. All
representations and warranties contained in this Agreement shall survive the
execution, delivery and performance of this Agreement and the creation and
payment of the Obligations. The Secured Party may execute this Agreement if
appropriate for the purpose of filing, but the failure of the Secured Party
to execute this Agreement shall not affect or impair the validity or
effectiveness of this Agreement. A carbon, photographic or other reproduction
of this Agreement or of any financing statement signed by the Debtor shall
have the same force and effect as the original for all purposes of a
financing statement.
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IN WITNESS WHEREOF, the Debtor has executed this Agreement
as of the day and year first above written.
SELECT COMFORT CORPORATION
By: /s/ Mark A. Kimball
---------------------------------
Name: Mark A. Kimball
---------------------------------
Title: Senior Vice President
------------------------------
STATE OF MINNESOTA )
)
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this
6th day of June, 2001, by Mark A. Kimball, the Senior Vice President of
Select Comfort Corporation, a Minnesota corporation, on behalf of the
corporation.
/s/ Sharon Stuckmayer
-----------------------------------
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