SECURITY AGREEMENT
SECURITY AGREEMENT (this "Security Agreement") dated as of 7th day of
March, 2008, by and between Total Luxury Group, Inc. (the "Company" or the
"Debtor"), for the benefit of Accelerant Partners LLC (the "Holder" or the
"Secured Party").
Recitals
A. Pursuant to the Stock Purchase Agreement, dated as of the date hereof
(including all annexes, exhibits and schedules thereto, as from time to time
amended, restated, supplemented or otherwise modified, the "Purchase
Agreement"), between the Debtor, as purchaser of certain shares of Petals
Decorative Accents, Inc. common stock (the "Shares") and the Secured Partner, as
the seller of the Shares, the Debtor, as partial consideration for its purchase
of Shares, has agreed to issue to the Secured Party, the Debtor's Senior Secured
9% convertible promissory note in the aggregate principal amount of $19,000,000
(together with all renewals, extensions and modifications thereof and any note
or notes issued in substitution or exchange therefor, the "Note"); and
B. As a condition to the Secured Party's obligation to enter into the
Purchase Agreement and to accept the Note as partial consideration for its sale
of the Shares, the Debtor has agreed to execute and deliver this Security
Agreement to provide collateral security for the obligations of the Debtor under
the Purchase Agreement, the Note, this Security Agreement and any other
agreements entered into, now or in the future by the Debtor in connection with
the Purchase Agreement (hereinafter collectively referred to as the "Transaction
Documents").
Agreement
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Defined Terms. Terms not otherwise defined in this Security Agreement
(including Annex A hereto), unless the context indicates otherwise, have the
meanings set forth in the Purchase Agreement, or if not defined in the Purchase
Agreement, then as provided for by the Code to the extent the same are used or
defined therein.
2. Grant Of Lien.
(a) To secure the prompt and complete payment, performance and
observance when due (whether at stated maturity, by acceleration or
otherwise) of all of the Secured Obligations, the Debtor hereby grants,
assigns, conveys, mortgages, pledges, hypothecates and transfers to the
Secured Party, security interests in all of its right, title and interest
in, to and under all personal property and other assets described below,
whether now owned by or owing to, or hereafter acquired by or arising in
favor of the Debtor, and whether owned or consigned by or to, or leased
from or to, the Debtor, and regardless of where located (all of which being
hereinafter collectively referred to as the "Collateral"): (i) all
Accounts; (ii) all General Intangibles; (iii) all goods, including, without
limitation, Inventory and Equipment; (iv) all real property and fixtures;
(v) all Chattel Paper; (vi) all Instruments (including all promissory
notes); (vii) all documents; (viii) all Deposit Accounts, including all
deposits therein; (ix) all money, cash or cash equivalents of the Debtor;
(x) all books and records pertaining to the Collateral; (xi) all investment
property (including securities, whether certificated or uncertificated,
securities accounts, security entitlements, commodity contracts or
commodity accounts); (xii) all Trademarks, Patents or Copyrights or other
Intellectual Property; (xiii) to the extent not otherwise included, all
Proceeds, tort claims, insurance claims and other rights to payments not
otherwise included in the foregoing and products of the foregoing and all
accessions to, substitutions and replacements for, and rents and profits
of, each of the foregoing.
(b) In addition, to secure the prompt and complete payment,
performance and observance of the Secured Obligations and in order to
induce the Secured Party as aforesaid, the Debtor hereby grants to the
Secured Party, a right of setoff against the property of the Debtor held by
the Secured Party, consisting of property described above in Section 2(a)
now or hereafter in the possession or custody of or in transit to the
Secured Party, for any purpose, including safekeeping, collection or
pledge, for the account of the Debtor, or as to which the Debtor may have
any right or power.
3. Representations and Warranties. The Debtor represents and warrants that:
(a) The Debtor is a corporation duly organized and in good standing
under the laws of the jurisdiction of its incorporation. The execution and
delivery, and performance of this Security Agreement, the other Transaction
Documents to which it is a party and the transactions contemplated
hereunder and thereunder (i) are all within the Debtor's corporate powers,
(ii) have been duly authorized, (iii) are not in contravention of law or
the terms of the Debtor's certificates of incorporation or by-laws, or
other organizational documentation, or any indenture, agreement or
undertaking to which the Debtor is a party or by which its property is
bound and (iv) will not result in the creation or imposition of, or require
or give rise to any obligation to grant, any lien, security interest,
charge or other encumbrance upon any property of the Debtor other than in
favor of the Secured Party. This Security Agreement and the other
Transaction Documents to which the Debtor is a party constitute legal,
valid and binding obligations of the Debtor enforceable in accordance with
their respective terms.
(b) As of the date hereof and after the creation of the Secured
Obligations and the security interest of the Secured Party, the Debtor (i)
owns assets and property whose fair saleable value is greater than the
amount that is likely to be required to pay all of its liabilities
(including contingent liabilities as and when they become due); (ii) are
able to pay all of its liabilities as such liabilities mature; (iii) have
capital sufficient to carry on its business and transactions and all
business and transactions in which it is about to engage; and (iv) are not
"insolvent" within the meaning of Section 101(32) of the Bankruptcy Code.
(c) Except as may be set forth on Schedule I hereto, the Debtor has
rights in and the power to transfer, and is the sole beneficial owners of,
each item of the Collateral upon which it purports to xxxxx x Xxxx
hereunder free and clear of any and all Liens.
(d) No effective security agreement, financing statement, equivalent
security or Lien instrument or continuation statement covering all or any
part of the Collateral is on file or of record in any public office.
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(e) This Security Agreement is effective to create a valid and
continuing Lien on and, upon the filing of appropriate financing statements
with the governmental offices listed on Schedule II hereto, a perfected
Lien in favor of the Secured Party, on the Collateral with respect to which
a Lien may be perfected by filing pursuant to Article 9 of the Code. As of
the Closing, such Lien will be prior to all other Liens, and is enforceable
as such against any and all creditors of and purchasers from the Debtor.
(f) The Debtor's name as it appears in official filings in the
jurisdiction of its incorporation or other organization, the type of entity
of Debtor (including corporation, partnership, limited partnership or
limited liability company), organizational identification number issued by
the Debtor's jurisdiction of incorporation or organization or a statement
that no such number has been issued, the Debtor's jurisdiction of
organization or incorporation, the location of the Debtor's chief executive
offices, principal places of business, offices and premises where
Collateral is stored or located, and the locations of its books and records
concerning the Collateral are set forth on Schedule III hereto. The Debtor
has only one state of incorporation or organization. The Debtor has not,
during the five years prior to the date of this Security Agreement, been
known by or used any other corporate or fictitious name or been party to
any merger or consolidation, or acquired all or substantially all of the
assets of any Person, or acquired any of its property or assets out of the
ordinary course of business, except as set forth on Schedule III hereto.
The Debtor has not (i) within the period of four months prior to the date
hereof, changed its location (as defined in Section 9-307 of the Code),
(ii) except as specified on Schedule III hereto, heretofore changed its
name, or (iii) except as specified on Schedule III hereto, heretofore
became "new debtor" (as defined in Section 9-102(a)(56) of the Code) with
respect to a currently effective security agreement previously entered into
by any other Person.
(g) The Debtor does not own or license any Trademarks, Patents or
Copyrights or other Intellectual Property, except as set forth on Schedule
IV hereto.
4. Covenants. The Debtor covenants and agrees with the Secured Party, that
from and after the date of this Security Agreement and until the Termination
Date:
(a) Further Assurances.
(i) At any time and from time to time (including upon any written
request of the Secured Party), at the sole expense of the Debtor, the
Debtor shall promptly and duly execute and deliver any and all such
further instruments and documents and take such further actions as may
be necessary or desirable or reasonably requested by the Secured Party
to obtain the full benefits of this Security Agreement and of the
rights and powers herein granted, including (A) using all reasonable
efforts to secure all consents and approvals necessary or appropriate
to enforce the security interests granted hereunder; and (B) filing
any financing statements, mortgages, continuation statements,
assignments and amendments with respect to the Liens granted hereunder
as to those jurisdictions that are not Uniform Commercial Code
jurisdictions.
(ii) The Debtor hereby irrevocably and unconditionally authorizes
the Secured Party at any time and from time to time to file in any
filing office in any Uniform Commercial Code jurisdiction any initial
financing statements, continuation statements, assignments and
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amendments thereto that (a) indicate the Collateral, and (b) contain
any other information required by Article 9 of the Code for the
sufficiency or filing office acceptance of any financing statement or
amendment. The Debtor agrees to furnish any such information to the
Secured Party promptly upon request. The Debtor also ratifies its
authorization for the Secured Party to have filed in any Uniform
Commercial Code jurisdiction any initial financing statements or
amendments thereto if filed prior to the date hereof and ratifies and
confirms the authorization of the Secured Party to file such financing
statements (and amendments, if any). The Debtor hereby authorizes the
Secured Party to adopt on behalf of the Debtor any symbol required for
authenticating any electronic filing. In the event that the
description of the collateral in any financing statement naming the
Secured Party or its designee as the secured party and the Debtor as
debtors includes assets and properties of the Debtor that do not at
any time constitute Collateral, whether hereunder, under any of the
other Transaction Documents or otherwise, the filing of such financing
statement shall nonetheless be deemed authorized by the Debtor to the
extent of the Collateral included in such description and it shall not
render the financing statement ineffective as to any of the Collateral
or otherwise affect the financing statement as it applies to any of
the Collateral.
(iii) The Debtor shall take all steps necessary to grant the
Secured Party control of and a perfected Lien on all Chattel Paper,
Instruments, Deposit Accounts, Investment Property, investment
accounts, security accounts, commodity accounts, letters of credit or
banker's acceptance constituting Collateral (including, without
limitation, the delivery to the Secured Party of all such Collateral,
accompanied by such instruments of transfer or assignment duly
executed in black, the delivery of a deposit or investment property
control agreement executed by the Debtor and any applicable financial
institution).
(iv) The Debtor shall, upon the occurrence and during the
continuance of any Event of Default, upon request of the Secured
Party, promptly notify (and the Debtor hereby authorizes the Secured
Party so to notify) each Account Debtor in respect of any Accounts of
the Debtor that such Collateral has been assigned to the Secured Party
hereunder, and that any payments due or to become due in respect
thereof are to be made directly to the Secured Party.
(b) Maintenance of Records. The Debtor shall keep and maintain, at its
own cost and expense, satisfactory and complete records of the Collateral,
including a record of any and all payments received and any and all credits
granted with respect to the Collateral in the same manner such records are
presently kept and maintained.
(c) Limitation on Liens on Collateral. The Debtor will not create,
permit or suffer to exist, and the Debtor will defend the Collateral
against, and take such other action as is necessary to remove, any Lien on
the Collateral, and will defend the right, title and interest of the
Secured Party in and to any of the Debtor's rights under the Collateral
against the claims and demands of all Persons whomsoever.
(d) Limitations on Disposition. The Debtor will not sell, license,
lease, transfer or otherwise dispose of any of the Collateral (other than
Inventory in the ordinary course of business), or attempt or contract to do
so.
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(e) Further Identification of Collateral. The Debtor will, if so
requested by the Secured Party, furnish to the Secured Party, as often as
the Secured Party reasonably requests, statements and schedules further
identifying and describing the Collateral and such other reports in
connection with the Collateral as the Secured Party may reasonably request,
all in such detail as the Secured Party may reasonably specify.
(f) Notices. The Debtor will advise the Secured Party promptly, in
reasonable detail, (i) of any Lien or written claim made or asserted
against any of the Collateral, and (ii) of the occurrence of any other
event which could have a material adverse effect on the value of the
Collateral or on the Liens created hereunder.
(g) No Reincorporation; No Name Change. The Debtor shall not
reincorporate or reorganize itself under the laws of any jurisdiction other
than the jurisdictions in which it is incorporated or organized as of the
date hereof without the prior written consent of the Secured Party. The
Debtor shall not change its legal names without first giving 30 days prior
written notice of its intent to do so to the Secured Party.
5. Secured Party's Appointment As Attorney-in-fact. On the Closing Date,
the Debtor shall execute and deliver to the Secured Party a power of attorney
(the "Power of Attorney") substantially in the form attached hereto as Exhibit
A. The power of attorney granted pursuant to the Power of Attorney is a power
coupled with an interest and shall be irrevocable until the Termination Date.
The powers conferred on the Secured Party, for the benefit of the Secured Party,
under the Power of Attorney are solely to protect the Secured Party's interests
in the Collateral and shall not impose any duty upon the Secured Party to
exercise any such powers. The Secured Party agrees with the Purchaser that (a)
except for the powers granted in clause (h) of the Power of Attorney, it shall
not exercise any power or authority granted under the Power of Attorney unless
an Event of Default has occurred and is continuing, (b) it shall not exercise
any power or authority under the Power of Attorney unless such action has been
approved in writing by the holders of a majority in principal amount of the
Notes outstanding (the "Required Holders"), and (c) the Secured Party shall
account for any moneys received by the Secured Party in respect of any
foreclosure on or disposition of Collateral pursuant to the Power of Attorney
provided that the Secured Party shall not have any duty as to any Collateral,
and the Secured Party shall be accountable only for amounts that it actually
receives as a result of the exercise of such powers. NEITHER THE SECURED PARTY
NOR ITS AFFILIATES, OFFICERS, DIRECTORS, EMPLOYEES, AGENTS OR REPRESENTATIVES
SHALL BE RESPONSIBLE TO THE DEBTOR FOR ANY ACT OR FAILURE TO ACT UNDER ANY POWER
OF ATTORNEY OR OTHERWISE, EXCEPT IN RESPECT OF DAMAGES ATTRIBUTABLE SOLELY TO
ITS OWN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT AS FINALLY DETERMINED BY A COURT
OF COMPETENT JURISDICTION.
6. Remedies: Rights Upon Default.
(a) In addition to all other rights and remedies granted to it under
this Security Agreement, the other Transaction Documents and under any
other instrument or agreement securing, evidencing or relating to any of
the Secured Obligations, if any Event of Default shall have occurred and be
continuing, the Secured Party may exercise all rights and remedies of a
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secured party under the Code. Without limiting the generality of the
foregoing, the Debtor expressly agrees that in any such event the Secured
Party, without demand of performance or other demand, advertisement or
notice of any kind (except the notice specified below of time and place of
public or private sale) to or upon the Debtor or any other Person (all and
each of which demands, advertisements and notices are hereby expressly
waived to the maximum extent permitted by the Code and other applicable
law), may forthwith enter upon the premises of the Debtor where any
Collateral is located through self-help, without judicial process, without
first obtaining a final judgment or giving the Debtor or any other Person
notice and opportunity for a hearing on the Secured Party's claim or action
and may collect, receive, assemble, process, appropriate and realize upon
the Collateral, or any part thereof, and may forthwith sell, lease,
license, assign, give an option or options to purchase, or sell or
otherwise dispose of and deliver said Collateral (or contract to do so), or
any part thereof, in one or more parcels at a public or private sale or
sales, at any exchange at such prices as it may deem acceptable, for cash
or on credit or for future delivery without assumption of any credit risk.
The Secured Party shall have the right upon any such public sale or sales
and, to the extent permitted by law, upon any such private sale or sales,
to purchase the whole or any part of said Collateral so sold, free of any
right or equity of redemption, which equity of redemption the Debtor hereby
releases. Such sales may be adjourned and continued from time to time with
or without notice. The Secured Party shall have the right to conduct such
sales on the Debtor's premises or elsewhere and shall have the right to use
the Debtor's premises without charge for such time or times as the Secured
Party deems necessary or advisable.
If any Event of Default shall have occurred and be continuing, the
Debtor further agrees, at the Secured Party's request, to assemble the
Collateral and make it available to the Secured Party at a place or places
designated by the Secured Party which are reasonably convenient to the
Secured Party and the Debtor, whether at the Debtor's premises or
elsewhere. Until the Secured Party is able to affect a sale, lease, or
other disposition of Collateral, the Secured Party shall have the right to
hold or use Collateral, or any part thereof, to the extent that it deems
appropriate for the purpose of preserving Collateral or its value or for
any other purpose deemed appropriate by the Secured Party. The Secured
Party shall have no obligation to the Debtor to maintain or preserve the
rights of the Debtor as against third parties with respect to Collateral
while Collateral is in the possession of the Secured Party. The Secured
Party may, if it so elects, seek the appointment of a receiver or keeper to
take possession of Collateral and to enforce any of the Secured Party's
remedies, with respect to such appointment without prior notice or hearing
as to such appointment. The Secured Party shall apply the net proceeds of
any such collection, recovery, receipt, appropriation, realization or sale
to the Secured Obligations as provided in the Transaction Documents, and
only after so paying over such net proceeds, and after the payment by the
Secured Party of any other amount required by any provision of law, need
the Secured Party account for the surplus, if any, to the Debtor. To the
maximum extent permitted by applicable law, the Debtor hereby waives all
claims, damages, and demands against the Secured Party and the Secured
Party arising out of the repossession, retention or sale of the Collateral
except such as arise solely out of the gross negligence or willful
misconduct of such Secured Party as finally determined by a court of
competent jurisdiction. The Debtor agrees that ten (10) days prior notice
by the Secured Party of the time and place of any public sale or of the
time after which a private sale may take place is reasonable notification
of such matters. The Debtor shall remain liable for any deficiency if the
proceeds of any sale or disposition of the Collateral are insufficient to
pay all Secured Obligations, including any attorneys' fees and other
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expenses incurred by the Secured Party to collect such deficiency.
(b) Except as otherwise specifically provided herein, the Debtor
hereby waives presentment, demand, protest or any notice (to the maximum
extent permitted by applicable law) of any kind in connection with this
Security Agreement or any Collateral.
(c) To the extent that applicable law imposes duties on the Secured
Party to exercise remedies in a commercially reasonable manner, the Debtor
acknowledges and agrees that it is not commercially unreasonable for the
Secured Party (i) to fail to incur expenses reasonably deemed significant
by the Secured Party to prepare Collateral for disposition or otherwise to
complete raw material or work in process into finished goods or other
finished products for disposition, (ii) to fail to obtain third party
consents for access to Collateral to be disposed of, or to obtain or, if
not required by other law, to fail to obtain governmental or third party
consents for the collection or disposition of Collateral to be collected or
disposed of, (iii) to fail to exercise collection remedies against Account
Debtors or other Persons obligated on Collateral or to remove Liens on or
any adverse claims against Collateral, (iv) to exercise collection remedies
against Account Debtors and other Persons obligated on Collateral directly
or through the use of collection agencies and other collection specialists,
(v) to advertise dispositions of Collateral through publications or media
of general circulation, whether or not the Collateral is of a specialized
nature, (vi) to contact other Persons, whether or not in the same business
as the Debtor, for expressions of interest in acquiring all or any portion
of such Collateral, (vii) to hire one or more professional auctioneers to
assist in the disposition of Collateral, whether or not the Collateral is
of a specialized nature, (viii) to dispose of Collateral by utilizing
internet sites that provide for the auction of assets of the types included
in the Collateral or that have the reasonable capacity of doing so, or that
match buyers and sellers of assets, (ix) to dispose of assets in wholesale
rather than retail markets, (x) to disclaim disposition warranties, such as
title, possession or quiet enjoyment, (xi) to purchase insurance or credit
enhancements to insure the Secured Party against risks of loss, collection
or disposition of Collateral or to provide to the Secured Party a
guaranteed return from the collection or disposition of Collateral, or
(xii) to the extent deemed appropriate by the Secured Party, to obtain the
services of other brokers, investment bankers, consultants and other
professionals to assist the Secured Party in the collection or disposition
of any of the Collateral. The Debtor acknowledges that the purpose of this
Section 6(c) is to provide non-exhaustive indications of what actions or
omissions by the Secured Party would not be commercially unreasonable in
the Secured Party's exercise of remedies against the Collateral and that
other actions or omissions by the Secured Party shall not be deemed
commercially unreasonable solely on account of not being indicated in this
Section 6(c). Without limitation upon the foregoing, nothing contained in
this Section 6(c) shall be construed to grant any rights to the Debtor or
to impose any duties on the Secured Party that would not have been granted
or imposed by this Security Agreement or by applicable law in the absence
of this Section 6(c).
(d) The Secured Party shall not be required to make any demand upon,
or pursue or exhaust any of their rights or remedies against, the Debtor,
any other obligor, guarantor, pledgor or any other Person with respect to
the payment of the Secured Obligations or to pursue or exhaust any of their
rights or remedies with respect to any Collateral therefor or any direct or
indirect guarantee thereof. The Secured Party shall not be required to
marshal the Collateral or any guarantee of the Secured Obligations or to
resort to the Collateral or any such guarantee in any particular order, and
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all of its and their rights hereunder or under any other Document shall be
cumulative. To the extent it may lawfully do so, the Debtor absolutely and
irrevocably waives and relinquishes the benefit and advantage of, and
covenant not to assert against the Secured Party, any valuation, stay,
appraisement, extension, redemption or similar laws and any and all rights
or defenses it may have as sureties now or hereafter existing which, but
for this provision, might be applicable to the sale of any Collateral made
under the judgment, order or decree of any court, or privately under the
power of sale conferred by this Security Agreement, or otherwise.
7. Grant Of Licenses To Use Intellectual Property Collateral. For the
purpose of enabling the Secured Party to exercise rights and remedies under
Section 6 hereof (including, without limiting the terms of Section 6 hereof, in
order to take possession of, hold, preserve, process, assemble, prepare for
sale, market for sale, sell or otherwise dispose of Collateral) at such time as
the Secured Party shall be lawfully entitled to exercise such rights and
remedies, the Debtor hereby grants to the Secured Party, irrevocable,
nonexclusive licenses (exercisable without payment of royalty or other
compensation to the Debtor) to use, license or sublicense any Intellectual
Property now owned or hereafter acquired by the Debtor, and wherever the same
may be located, and including in such licenses access to all media in which any
of the licensed items may be recorded or stored and to all computer software and
programs used for the compilation or printout thereof.
8. Indemnity; Expenses; Limitation On Secured Party's Duty In Respect Of
Collateral.
(a) Whether or not the transactions contemplated hereby are
consummated, the Debtor shall indemnify and hold the Secured Party and its
Affiliates, directors, officers, agents and employees (collectively, the
"Indemnified Persons") harmless from and against any and all liabilities,
obligations, losses, damages, penalties, claims, demands, actions,
judgments, suits, costs, charges, expenses and disbursements (including
reasonable attorneys fees and expenses) of any kind or nature whatsoever
which may at any time (including at any time following the termination of
the Secured Obligations or any assignment by a Secured Party) be imposed
on, incurred by or asserted against any such Indemnified Person in any way
relating to or arising out of or in connection with the execution,
delivery, enforcement, performance or administration of this Security
Agreement, the other Transaction Documents or any other agreement, letter
or instrument delivered in connection with the transactions contemplated
hereby or the consummation of the transactions contemplated hereby or any
actual or prospective claim, litigation, investigation or proceeding
relating to any of the foregoing, whether based on contract, tort or any
other theory (including any investigation of, preparation for, or defense
of any pending or threatened claim, investigation, litigation or
proceeding) and regardless of whether any Indemnified Person is a party
thereto (all the foregoing, collectively, the "Indemnified Liabilities"),
in all cases, whether or not caused by or arising, in whole or in part, out
of the negligence of any Indemnified Person; provided that such indemnity
shall not, as to any Indemnified Person, be available to the extent that
such Indemnified Liabilities are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the
gross negligence or willful misconduct of such Indemnified Person. In the
case of an investigation, litigation or other proceeding to which the
indemnity in this Section 8 applies, such indemnity shall be effective
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whether or not such investigation, litigation or proceeding is brought by
the Debtor, its directors, shareholders or creditors or an Indemnified
Party or any other Person, whether or not an Indemnified Person is
otherwise a party thereto and whether or not any of the transactions
contemplated hereunder or under any of the other Transaction Documents are
consummated. All amounts due under this Section 8 shall be payable within
five Business Days after demand therefor. The agreements in this Section 8
shall survive the assignment by the Secured Party and the repayment,
satisfaction or discharge of all the other Secured Obligations. In the
event that any investigation, litigation or proceeding is asserted or
threatened in writing or instituted against any Indemnified Person, or any
remedial, removal or response action which is requested of it or any other
Indemnified Person, for which such Indemnified Person may desire indemnity
or defense hereunder, such Indemnified Person shall notify the Debtor in
writing of such event; provided that failure to so notify the Debtor shall
not affect the right of any Indemnified Person to seek indemnification
under this Section 8.
(b) The Debtor will upon demand pay to the Secured Party the amount of
any and all reasonable expenses, including, without limitation, the fees
and expenses of its counsel and of any experts and agents, that the Secured
Party 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 of the
Debtor, (iii) the exercise or enforcement of any of the rights of the
Secured Party hereunder or (iv) the failure by the Debtor to perform or
observe any of the provisions hereof.
(c) The Secured Party shall use reasonable care with respect to the
Collateral in their possession or under its control. The Secured Party
shall not have any other duty as to any Collateral in its possession or
control or in the possession or control of any agent or nominee of the
Secured Party, or any income thereon or as to the preservation of rights
against prior parties or any other rights pertaining thereto.
9. Reinstatement. This Security Agreement shall remain in full force and
effect and continue to be effective should any petition be filed by or against
the Debtor for liquidation or reorganization, should the Debtor become insolvent
or make an assignment for the benefit of any creditor or creditors or should a
receiver or trustee be appointed for all or any significant part of the Debtor's
assets, and shall continue to be effective or be reinstated, as the case may be,
if at any time payment and performance of the Secured Obligations, or any part
thereof, is, pursuant to applicable law, rescinded or reduced in amount, or must
otherwise be restored or returned by any obligee of the Secured Obligations,
whether as a "voidable preference," "fraudulent conveyance," or otherwise, all
as though such payment or performance had not been made. In the event that any
payment, or any part thereof, is rescinded, reduced, restored or returned, the
Secured Obligations shall be reinstated and deemed reduced only by such amount
paid and not so rescinded, reduced, restored or returned.
10. Notices. Any notice required or permitted hereunder shall be given in
writing (unless otherwise specified herein) and shall be deemed effectively
given upon (i) personal delivery, (ii) two business days after deposit with
Federal Express or another nationally recognized overnight courier service,
(iii) five business days after deposit in the United States Postal Service, sent
certified mail return receipt requested, addressed to each of the other parties
thereunto entitled at the following addresses, or at such other addresses as a
party may designate by ten days advance written notice to each of the other
parties hereto, or (iv) the same day upon transmission by means of facsimile
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transmission or electronic mail (if attached in a commonly readable format and
the sender has received no generated notice that the email message has not been
successfully delivered).
If to the Company: Total Luxury Group, Inc.
00000 Xxxxxxxx Xxxx Xxxxx #000
Xxxxx, Xxxxxxx 00000
Attention: Chief Executive Officer
Tel. No.: 000-000-0000
Fax No.: 000-000-0000
If to the Secured Party: Accelerant Partners LLC
Executive Pavilion
00 Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxx, 00000
Attn: _______________
Facsimile: ___________
Email: ____________
with copies to: Xxxxxxx Xxxxxx LLP
000 Xxxxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxxxx, Esq.
Tel. No.: (000) 000-0000
Fax No.: (000) 000-0000
Email: xxxxxxxxxx@xxxxxxxxxxxxx.xxx
Any party hereto may from time to time change its address for notices by
giving at least ten (10) days written notice of such changed address to the
other parties hereto.
11. Severability. Whenever possible, each provision of this Security
Agreement shall be interpreted in a 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 applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity without invalidating
the remainder of such provision or the remaining provisions of this Security
Agreement. This Security Agreement is to be read, construed and applied together
with the Purchase Agreement and the other Transaction Documents which, taken
together, set forth the complete understanding and agreement of the Secured
Party and the Debtor with respect to the matters referred to herein and therein.
12. No Waiver; Cumulative Remedies. The Secured Party shall not by any act,
delay, omission or otherwise be deemed to have waived any of its rights or
remedies hereunder, and no waiver shall be valid unless in writing, signed by
the Secured Party and then only to the extent therein set forth. A waiver by the
Secured Party of any right or remedy hereunder on any one occasion shall not be
construed as a bar to any right or remedy which the Secured Party would
10
otherwise have had on any future occasion. No failure to exercise nor any delay
in exercising on the part of the Secured Party, any right, power or privilege
hereunder, shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, power or privilege hereunder preclude any other or future
exercise thereof or the exercise of any other right, power or privilege. The
rights and remedies hereunder provided are cumulative and may be exercised
singly or concurrently, and are not exclusive of any rights and remedies
provided by law. None of the terms or provisions of this Security Agreement may
be waived, altered, modified or amended except by an instrument in writing, duly
executed by the Secured Party and the Debtor.
13. Limitation By Law. All rights, remedies and powers provided in this
Security Agreement may be exercised only to the extent that the exercise thereof
does not violate any applicable provision of law, and all the provisions of this
Security Agreement are intended to be subject to all applicable mandatory
provisions of law that may be controlling and to be limited to the extent
necessary so that they shall not render this Security Agreement invalid, or
unenforceable, in whole or in part, or not entitled to be recorded, registered
or filed under the provisions of any applicable law.
14. Termination Of This Security Agreement. Subject to Section 9 hereof,
this Security Agreement shall terminate upon the Termination Date.
15. Successors And Assigns. This Security Agreement and all obligations of
the Debtor hereunder shall be binding upon the successors and assigns of the
Debtor (including any debtor-in-possession on behalf of the Debtor) and shall,
together with the rights and remedies of the Secured Party, hereunder, inure to
the benefit of the Secured Party and all future holders of any instrument
evidencing any of the Secured Obligations and their respective successors and
assigns. No sales of participations, other sales, assignments, transfers or
other dispositions of any agreement governing or instrument evidencing the
Secured Obligations or any portion thereof or interest therein shall in any
manner impair the Lien granted to the Secured Party hereunder. The Debtor may
not assign, sell, hypothecate or otherwise transfer any interest in or
obligation under this Security Agreement.
16. Counterparts. This Security Agreement may be authenticated in any
number of separate counterparts, each of which shall collectively and separately
constitute one agreement. This Security Agreement may be authenticated by manual
signature, facsimile or electronic means, all of which shall be equally valid.
17. Governing Law. ALL QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY,
ENFORCEMENT AND INTERPRETATION OF THIS SECURITY AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE,
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. EACH PARTY HEREBY IRREVOCABLY
SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS
SITTING IN THE CITY OF NEW YORK, BOROUGH OF MANHATTAN, FOR THE ADJUDICATION OF
ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR WITH ANY TRANSACTION
CONTEMPLATED HEREBY OR DISCUSSED HEREIN, AND HEREBY IRREVOCABLY WAIVES, AND
AGREES NOT TO ASSERT IN ANY SUIT, ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT
11
PERSONALLY SUBJECT TO THE JURISDICTION OF ANY SUCH COURT, THAT SUCH SUIT, ACTION
OR PROCEEDING IS IMPROPER. NOTHING IN THIS SECURITY AGREEMENT SHALL BE DEEMED OR
OPERATE TO PRECLUDE THE SECURED PARTY FROM BRINGING SUIT OR TAKING OTHER LEGAL
ACTION IN ANY OTHER JURISDICTION TO REALIZE ON THE COLLATERAL OR ANY OTHER
SECURITY FOR THE SECURED OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER COURT
ORDER IN FAVOR OF THE SECURED PARTY. EACH PARTY HEREBY IRREVOCABLY WAIVES
PERSONAL SERVICE OF PROCESS AND CONSENTS TO PROCESS BEING SERVED IN ANY SUCH
SUIT, ACTION OR PROCEEDING BY MAILING A COPY THEREOF VIA REGISTERED OR CERTIFIED
MAIL OR OVERNIGHT DELIVERY (WITH EVIDENCE OF DELIVERY) TO SUCH PARTY AT THE
ADDRESS IN EFFECT FOR NOTICES TO IT UNDER THIS SECURITY AGREEMENT AND AGREES
THAT SUCH SERVICE SHALL CONSTITUTE GOOD AND SUFFICIENT SERVICE OF PROCESS AND
NOTICE THEREOF. NOTHING CONTAINED HEREIN SHALL BE DEEMED TO LIMIT IN ANY WAY ANY
RIGHT TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW. THE COMPANY HEREBY WAIVES
ALL RIGHTS TO A TRIAL BY JURY.
18. Waiver Of Jury Trial. BECAUSE DISPUTES ARISING IN CONNECTION WITH
COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN
EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND FEDERAL
LAWS TO APPLY, THE PARTIES DESIRE THAT DISPUTES ARISING HEREUNDER OR RELATING
HERETO BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO
ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF
ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
SUIT OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER SOUNDING IN CONTRACT,
TORT, OR OTHERWISE, AMONG THE SECURED PARTY AND THE DEBTOR ARISING OUT OF,
CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED IN
CONNECTION WITH, THIS SECURITY AGREEMENT OR ANY OF THE OTHER NOTES DOCUMENTS OR
THE TRANSACTIONS RELATED HERETO OR THERETO.
19. Expenses. The Debtor agrees to reimburse the Secured Party for all
costs and expenses it incurred it (including, without limitation, the fees and
expenses of legal counsel) in connection with (i) any Default or Event of
Default and any enforcement or collection proceeding resulting therefrom,
including, without limitation, all manner of participation in or other
involvement with (w) performance by the Secured Party of any obligations of the
Debtor in respect of the Collateral that the Debtor has failed or refused to
perform, (x) bankruptcy, insolvency, receivership, foreclosure, winding up or
liquidation proceedings, or any actual or attempted sale, or any exchange,
enforcement, collection, compromise or settlement in respect of any of the
Collateral, and for the care of the Collateral and defending or asserting rights
and claims of the Secured Party in respect thereof, by litigation or otherwise,
including expenses of insurance, (y) judicial or regulatory proceedings and (z)
workout, restructuring or other negotiations or proceedings (whether or not the
workout, restructuring or transaction contemplated thereby is consummated) and
(ii) the enforcement of this Section 19, and all such costs and expenses shall
12
be Secured Obligations entitled to the benefits of the collateral security
provided pursuant to Section 2.
20. Section Titles. The Section titles contained in this Security Agreement
are and shall be without substantive meaning or content of any kind whatsoever
and are not a part of the agreement among the parties hereto.
21. No Strict Construction. The parties hereto have participated jointly in
the negotiation and drafting of this Security Agreement. In the event an
ambiguity or question of intent or interpretation arises, this Security
Agreement shall be construed as if drafted jointly by the parties hereto and no
presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any provisions of this Security Agreement.
22. Benefit Of Secured Party. All Liens granted or contemplated hereby
shall be for the benefit of the Secured Party, and all proceeds or payments
realized from Collateral in accordance herewith shall be applied to the Secured
Obligations in the manner determined by the Secured Party in its sole
discretion.
[remainder of page intentionally left blank]
13
IN WITNESS WHEREOF, each of the parties hereto has caused this Security
Agreement to be executed and delivered by its duly authorized officer as of the
date first set forth above.
The Debtor:
TOTAL LUXURY GROUP, INC.
By:_____________________
Name:
Title:
The Secured Party:
ACCELERANT PARTNERS LLC
By:_____________________
Name:
Title:
14
ANNEX A
-------
to
SECURITY AGREEMENT
DEFINITIONS
-----------
Capitalized terms used in the Security Agreement shall have the following
respective meanings, and all references to Sections, Exhibits, Schedules or
Annexes in the following definitions shall refer to Sections, Exhibits,
Schedules or Annexes of or to the Security Agreement:
"Account Debtor" means any Person who may become obligated to the Debtor
under, with respect to, or on account of, an Account.
"Accounts" means all "accounts," as such term is defined in the Code, now
owned or hereafter acquired by the Debtor, including (as the context may
reasonably permit) (a) all accounts receivable, other receivables, book debts
and other forms of obligations (other than forms of obligations evidenced by
Chattel Paper, or Instruments), (including any such obligations that may be
characterized as an account or contract right under the Code), (b) all of the
Debtor's rights in, to and under all purchase orders or receipts for goods or
services, (c) all of the Debtor's rights to any goods represented by any of the
foregoing (including unpaid sellers' rights of rescission, reclamation and
stoppage in transit and rights to returned, reclaimed or repossessed goods), (d)
all rights to payment due to the Debtor for property sold, leased, licensed,
assigned or otherwise disposed of, for a policy of insurance issued or to be
issued, for a secondary obligation incurred or to be incurred, for energy
provided or to be provided, for the use or hire of a vessel under a charter or
other contract, arising out of the use of a credit card or charge card, or for
services rendered or to be rendered by the Debtor or in connection with any
other transaction (whether or not yet earned by performance on the part of the
Debtor), (e) all health care insurance receivables and (f) all collateral
security of any kind, given by any Account Debtor or any other Person with
respect to any of the foregoing.
"Bankruptcy Code" means the provisions of Title 11 of the United States
Code, 11 U.S.C. xx.xx. 101 et seq.
"Business Day" means any day that is not a Saturday, a Sunday or a day on
which banks are required or permitted to be closed in the City of New York.
"Chattel Paper" means any "chattel paper," as such term is defined in the
Code, including electronic chattel paper, now owned or hereafter acquired by the
Debtor.
"Code" means the Uniform Commercial Code as the same may, from time to
time, be enacted and in effect in the State of New York; provided, that to the
extent that the Code is used to define any term herein and such term is defined
differently in different Articles of the Code, the definition of such term
contained in Article 9 of the Code shall govern; provided further, that in the
event that, by reason of mandatory provisions of law, any or all of the
attachment, perfection or priority of, or remedies with respect to, the Lien on
any Collateral under the Security Agreement is governed by the Uniform
Commercial Code as enacted and in effect in a jurisdiction other than the State
of New York, the term "Code" shall mean the Uniform Commercial Code as enacted
and in effect in such other jurisdiction solely for purposes of the provisions
thereof relating to such attachment, perfection, priority or remedies and for
purposes of definitions related to such provisions.
"Collateral" has the meaning ascribed to it in Section 2(a).
"Copyright License" means any and all rights now owned or hereafter
acquired by the Debtor under any written agreement granting any right to use any
Copyright or Copyright registration.
"Copyrights" means all of the following now owned or hereafter adopted or
acquired by the Debtor: (a) all copyrights, all General Intangibles of like
nature (whether registered or unregistered), all registrations and recordings
thereof, and all applications in connection therewith, including all
registrations, recordings and applications in the United States Copyright Office
or in any similar office or agency of the United States, any state or territory
thereof, or any other country or any political subdivision thereof, (b) all
reissues, extensions or renewals thereof, (c) the right to recover for all past,
present and future infringements thereof and (d) all other rights of any kind
whatsoever accruing thereunder as pertaining thereto.
"Default" means any condition or event which is, or, with notice or lapse
of time or both, would become, an Event of Default.
"Deposit Accounts" means all "deposit accounts" as such term is defined in
the Code, now or hereafter held in the names of the Debtor.
"Event of Default" means any event of default under, or any failure by the
Parties to perform, keep, or observe any covenant or agreement contained in, the
Purchase Agreement, this Security Agreement or any other Note Document,
including, without limitation, the Notes.
"General Intangibles" means all "general intangibles," as such term is
defined in the Code, now owned or hereafter acquired by the Debtor, including
(as the context may reasonably permit) all right, title and interest that the
Debtor may now or hereafter have in or under any Contract, all payment
intangibles, customer lists, Licenses, Copyrights, Trademarks, Patents, and all
applications therefor and reissues, extensions or renewals thereof, rights in
Intellectual Property, interests in partnerships, joint ventures and other
business associations, licenses, permits, copyrights, trade secrets, proprietary
or confidential information, inventions (whether or not patented or patentable),
technical information, procedures, designs, knowledge, know-how, software, data
bases, data, skill, expertise, experience, processes, models, drawings,
materials and records, goodwill (including the goodwill associated with any
Trademark or Trademark License), all rights and claims in or under insurance
policies (including insurance for fire, damage, loss and casualty, whether
covering personal property, real property, tangible rights or intangible rights,
all liability, life, key man and business interruption insurance, and all
unearned premiums), choses in action, rights to receive tax refunds and other
payments, rights to receive dividends, distributions, cash, Instruments and
other property in respect of or in exchange for any pledged Investment Property,
rights of indemnification, all books and records, correspondence, credit files,
invoices and other papers, including without limitation all tapes, cards,
computer runs and other papers and documents in the possession or under the
control of the Debtor or any computer bureau or service company from time to
time acting for the Debtor.
"Instruments" means all "instruments," as such term is defined in the Code,
now owned or hereafter acquired by the Debtor, wherever located, and, in any
event, including all certificates of deposit, and all promissory notes and other
evidences of indebtedness, other than instruments that constitute, or are a part
of a group of writings that constitute, Chattel Paper.
"Intellectual Property" means collectively, all Copyrights, all Patents and
all Trademarks, together with (a) all inventions, processes, production methods,
proprietary information, know-how and trade secrets; (b) all Copyright Licenses,
Patent Licenses and Trademark Licenses; (c) all information, customer lists,
identification of suppliers, data, plans, blueprints, specifications, designs,
drawings, recorded knowledge, surveys, engineering reports, test reports,
manuals, materials standards, processing standards, performance standards,
catalogs, computer and automatic machinery software and programs; (d) all field
repair data, sales data and other information relating to sales or service of
products now or hereafter manufactured; (e) all accounting information and all
media in which or on which any information or knowledge or data or records may
be recorded or stored and all computer programs used for the compilation or
printout of such information, knowledge, records or data; (f) all licenses,
consents, permits, variances, certifications and approvals of governmental
agencies now or hereafter held by the Debtor and (g) all clauses of action,
claims, and warranties now or hereafter owned or acquired by the Debtor in
respect of any of the items listed above.
"Inventory" means all "inventory," as such term is defined in the Code, now
owned or hereafter acquired by the Debtor, wherever located, and in any event
including (as the context may reasonably permit) inventory, merchandise, goods
and other personal property that are held by or on behalf of the Debtor for sale
or lease or are furnished or are to be furnished under a contract of service, or
that constitute raw materials, work in process, finished goods, returned goods,
or materials or supplies of any kind, nature or description used or consumed or
to be used or consumed in the Debtor's business or in the processing,
production, packaging, promotion, delivery or shipping of the same, including
all supplies and embedded software.
"Investment Property" means all "investment property" as such term is
defined in the Code now owned or hereafter acquired by the Debtor, wherever
located, including (as the context may reasonably permit) (i) all securities,
whether certificated or uncertificated, including stocks, bonds, interests in
limited liability companies, partnership interests, treasuries, certificates of
deposit, and mutual fund shares; (ii) all securities entitlements of the Debtor,
including the rights of the Debtor to any securities account and the financial
assets held by a securities intermediary in such securities account and any free
credit balance or other money owing by any securities intermediary with respect
to that account; (iii) all securities accounts of the Debtor; (iv) all commodity
contracts of the Debtor; and (v) all commodity accounts held by the Debtor.
"License" means any Copyright License, Patent License, Trademark License or
other license of rights or interests now held or hereafter acquired by the
Debtor.
"Lien" means any mortgage or deed of trust, pledge, hypothecation,
assignment, deposit arrangement, lien, charge, claim, security interest,
easement or encumbrance, or preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including any lease
or title retention agreement, any financing lease having substantially the same
economic effect as any of the foregoing, and the filing of, or agreement to
give, any financing statement perfecting a security interest under the Code or
comparable law of any jurisdiction).
"Patent License" means rights under any written agreement now owned or
hereafter acquired by the Debtor granting any right with respect to any
invention on which a Patent is in existence.
"Patents" means all of the following in which the Debtor now holds or
hereafter acquires any interest: (a) all letters patent of the United States or
of any other country, all registrations and recordings thereof, and all
applications for letters patent of the United States or of any other country,
including registrations, recordings and applications in the United States Patent
and Trademark Office or in any similar office or agency of the United States,
any State, or any other country, (b) all reissues, continuations,
continuations-in-part or extensions thereof, (c) all income, royalties, damages
and payments now or hereafter due and/or payable under and with respect thereto,
including, without limitation, damages and payments for past or future
infringements thereof, (d) the right to xxx for past, present and future
infringements thereof, and (e) all rights corresponding thereto throughout the
world.
"Person" means a corporation, an association, a partnership, an
organization, a business, an individual, a government or political subdivision
thereof or governmental authority.
"Proceeds" means "proceeds," as such term is defined in the Code, including
(as the context may reasonably permit) (a) any and all proceeds of any
insurance, indemnity, warranty or guaranty payable to the Debtor from time to
time with respect to any of the Collateral, (b) any and all payments (in any
form whatsoever) made or due and payable to the Debtor from time to time in
connection with any requisition, confiscation, condemnation, seizure or
forfeiture of all or any part of the Collateral by any governmental authority
(or any Person acting under color of governmental authority), (c) any claim of
the Debtor against third parties (i) for past, present or future infringement of
any Patent or Patent License, or (ii) for past, present or future infringement
or dilution of any Copyright, Copyright License, Trademark or Trademark License,
or for injury to the goodwill associated with any Trademark or Trademark
License, (d) any recoveries by the Debtor against third parties with respect to
any litigation or dispute concerning any of the Collateral including claims
arising out of the loss or nonconformity of, interference with the use of,
defects in, or infringement of rights in, or damage to, Collateral, (e) all
amounts collected on, or distributed on account of, other Collateral, including
dividends, interest, distributions and Instruments with respect to Investment
Property, and (f) any and all other amounts, rights to payment or other property
acquired upon the sale, lease, license, exchange or other disposition of
Collateral and all rights arising out of Collateral.
"Secured Obligations" means any and all obligations, liabilities and
indebtedness of every kind, nature and description owing by the Debtor or any
obligor to the Secured Party under the Transaction Documents, including
principal, interest, charges, fees, premiums, indemnities and expenses, however
evidenced, whether as principal, surety, endorser, a debtor or otherwise,
whether arising under this Agreement or otherwise, whether now existing or
hereafter arising, whether direct or indirect, absolute or contingent, joint or
several, due or not due, primary or secondary, liquidated or unliquidated,
secured or unsecured, and whether arising directly or howsoever acquired by the
Secured Party.
"Security Agreement" means this Security Agreement, as the same may be
amended, supplemented, restated or otherwise modified from time to time.
"Termination Date" means the date on which all obligations of the Debtor to
the Secured Party or its assigns under the Transaction Documents, and the
obligations of the Debtor under this Security Agreement and each other Note
Document to which it is a party, have been indefeasibly satisfied.
"Trademark License" means rights under any written agreement now owned or
hereafter acquired by the Debtor granting any right to use any Trademark.
"Trademarks" means all of the following now owned or hereafter existing or
adopted or acquired by the Debtor: (a) all trademarks, trade names, corporate
names, business names, trade styles, service marks, logos, other source or
business identifiers, prints and labels on which any of the foregoing have
appeared or appear, designs and General Intangibles of like nature (whether
registered or unregistered), 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
office or agency of the United States, any state or territory thereof, or any
other country or any political subdivision thereof, (b) all reissues, extensions
or renewals thereof, (c) all rights corresponding thereto throughout the world
(d) the right to recover for all past, present and future infringements thereof
and (e) all other rights of any kind whatsoever accruing thereunder or
pertaining thereto, together, in each case, with the product lines and goodwill
of the business connected with the use of, and symbolized by, any of the
foregoing.
The words "herein," "hereof" and "hereunder" and other words of similar
import refer to the Security Agreement as a whole, including all Annexes,
Exhibits and Schedules, as the same may from time to time be amended, restated,
modified or supplemented, and not to any particular section, subsection or
clause contained in the Security Agreement or any such Annex, Exhibit or
Schedule.
Wherever from the context it appears appropriate, each term stated in
either the singular or plural shall include the singular and the plural, and
pronouns stated in the masculine, feminine or neuter gender shall include the
masculine, feminine and neuter genders. The words "including", "includes" and
"include" shall be deemed to be followed by the words "without limitation"; the
word "or" is not exclusive; references to Persons include their respective
successors and assigns or, in the case of governmental Persons, Persons
succeeding to the relevant functions of such Persons; and all references to
statutes and related regulations shall include any amendments of the same and
any successor statutes and regulations. Whenever any provision in this Security
Agreement refers to the knowledge (or an analogous phrase) of the Debtor, such
words are intended to signify that the Debtor has actual knowledge or awareness
of a particular fact or circumstance or the Debtor, if it had exercised
reasonable diligence, would have known or been aware of such fact or
circumstance.
SCHEDULE I
----------
to
SECURITY AGREEMENT
[identify factor]
SCHEDULE II
-----------
to
SECURITY AGREEMENT
FILING JURISDICTIONS
Debtor Jurisdiction
------ ------------
Total Luxury Group, Inc. Secretary of State of Indiana
SCHEDULE III
------------
to
SECURITY AGREEMENT
SCHEDULE OF OFFICES, LOCATIONS OF COLLATERAL
AND RECORDS CONCERNING DEBTOR'S COLLATERAL
I. The Debtor's official names:
II. Types of entity (e.g. corporation, partnership, business trust, limited
partnership, limited liability company):
Corporation
III. Organizational identification number issued by the Debtor's
jurisdiction of incorporation or organization or a statement that no
such number has been issued:
IV. Jurisdiction of Incorporation or Organization of the Debtor:
V. Chief Executive Offices and principal places of business of the Debtor:
VI. Other Premises at which Collateral is Stored or Located:
SCHEDULE IV
to
SECURITY AGREEMENT
SCHEDULE OF INTELLECTUAL PROPERTY
A. Trademarks
----------
1. Owned
-----
------------------------------------- -------------------------- ------------------------- -------------------------
Registration Registration Expiration
Trademark Number Date Date
------------------------------------- -------------------------- ------------------------- -------------------------
------------------------------------- -------------------------- ------------------------- -------------------------
------------------------------------------ ----------------------------------- -------------------------------------
Trademark Application/Serial Application
Application Number Date
------------------------------------------ ----------------------------------- -------------------------------------
------------------------------------------ ----------------------------------- -------------------------------------
2. Licensed
--------
----------------------- ------------------------ ------------------------ --------------------- --------------------
Registration Registration Expiration Owner/
Trademark Number Date Date Licensor
----------------------- ------------------------ ------------------------ --------------------- --------------------
----------------------- ------------------------ ------------------------ --------------------- --------------------
------------------------------------- ---------------------------------------- -------------------------------------
Trademark Application/Serial Application
Application Number Date
------------------------------------- ---------------------------------------- -------------------------------------
------------------------------------- ---------------------------------------- -------------------------------------
B. Patents
-------
1. Owned
-----
------------------------------ ---------------------------- --------------------------- ----------------------------
Patent Registration Registration Expiration
Description Number Date Date
------------------------------ ---------------------------- --------------------------- ----------------------------
------------------------------ ---------------------------- --------------------------- ----------------------------
------------------------------------- ---------------------------------------- -------------------------------------
Patent Application/Serial Application
Application Number Date
------------------------------------- ---------------------------------------- -------------------------------------
------------------------------------- ---------------------------------------- -------------------------------------
2. Licensed
--------
-------------------------- --------------------------- -------------------------- -------------------- -----------------
Patent Registration Registration Expiration Owner/
Description Number Date Date Licensor
-------------------------- --------------------------- -------------------------- -------------------- -----------------
-------------------------- --------------------------- -------------------------- -------------------- -----------------
------------------------------------- ---------------------------------------- -------------------------------------
Patent Application/Serial Application
Application Number Date
------------------------------------- ---------------------------------------- -------------------------------------
------------------------------------- ---------------------------------------- -------------------------------------
C. Copyrights
----------
1. Owned
-----
--------------------------------------------- ------------------------------------- -----------------------------
Registration Registration
Copyright Number Date
--------------------------------------------- ------------------------------------- -----------------------------
--------------------------------------------- ------------------------------------- -----------------------------
2. Licensed
--------
------------------------------ ---------------------------- ------------------------ --------------------- ---------------------
Patent Registration Registration Expiration Owner/
Description Number Number Date Licensor
------------------------------ ---------------------------- ------------------------ --------------------- ---------------------
------------------------------ ---------------------------- ------------------------ --------------------- ---------------------
D. Other
-----
EXHIBIT A
---------
FORM OF
POWER OF ATTORNEY
This Power of Attorney is executed and delivered by TOTAL LUXURY GROUP,
INC., an Indiana corporation (the "Grantor") to ACCELERANT PARTNERS LLC
(hereinafter referred to the "Attorney"), as the Secured PartY under a Security
Agreement, dated as of __________, 2008 and other related documents collectively
(the "Documents"). No person to whom this Power of Attorney is presented, as
authority for the Attorney to take any action or actions contemplated hereby,
shall be required to inquire into or seek confirmation from the Grantor as to
the authority of the Attorney to take any action described below, or as to the
existence of or fulfillment of any condition to this Power of Attorney, which is
intended to grant to the Attorney unconditionally the authority to take and
perform the actions contemplated herein. The power of attorney granted hereby is
coupled with an interest, and may not be revoked or canceled by the Grantor
without the Attorney's written consent.
The Grantor hereby irrevocably constitutes and appoints the Attorney (and
all officers, employees or agents designated by the Attorney), with full power
of substitution, as the Grantor's true and lawful attorney-in-fact with full
irrevocable power and authority in the place and stead of the Grantor and in the
name of the Grantor or in its own name, from time to time in the Attorney's
discretion, without notice to or assent by the Grantor, and at any time in the
case of clause (h) below and at any time an Event of Default (as defined in the
Security Agreement) has occurred and is continuing in the case of (a), (b), (c),
(d), (e), (f), (g), (i) and (j) below, to do the following: (a) change the
mailing address of the Grantor, open a post office box on behalf of the Grantor,
open mail for Grantor, and ask, demand, collect, give acquittances and receipts
for, take possession of, endorse any invoices, freight or express bills, bills
of lading, storage or warehouse receipts, drafts against debtors, assignments,
verifications, and notices in connection with any property of the Grantor
constituting Collateral; (b) effect any repairs to any asset of the Grantor, or
continue or obtain any insurance and pay all or any part of the premiums
therefor and costs thereof, and make, settle and adjust all claims under such
policies of insurance, and make all determinations and decisions with respect to
such policies; (c) pay or discharge any taxes, liens, security interests, or
other encumbrances levied or placed on or threatened against the Grantor or its
property constituting Collateral; (d) defend any suit, action or proceeding
brought against the Grantor if the Grantor does not defend such suit, action or
proceeding or if the Attorney believes that the Grantor is not pursuing such
defense in a manner that will maximize the recovery to the Attorney, and settle,
compromise or adjust any suit, action, or proceeding described above and, in
connection therewith, give such discharges or releases as the Attorney may deem
appropriate; (e) file or prosecute any claim, litigation, suit or proceeding in
any court of competent jurisdiction or before any arbitrator, or take any other
action otherwise deemed appropriate by the Attorney for the purpose of
collecting any and all such moneys due to the Grantor whenever payable and to
enforce any other right in respect of the Grantor's property constituting
Collateral; (f) cause the certified public accountants then engaged by the
Grantor to prepare and deliver to the Attorney at any time and from time to
time, promptly upon the Attorney's request, the following reports: (1) a
reconciliation of all accounts, (2) an aging of all accounts, (3) trial
balances, (4) test verifications of such accounts as the Attorney may request,
and (5) the results of each physical verification of inventory; (g) communicate
in its own name with any party to any contract with regard to the assignment of
the right, title and interest of the Grantor in and under the contracts and
other matters relating thereto; (h) file such financing statements with respect
to the aforesaid Security Agreement, with or without the Grantor's signatures,
or to file a photocopy of the Security Agreement in substitution for a financing
statement, as the Secured Party may deem appropriate and to execute in the
Grantor's name such financing statements and amendments thereto and continuation
statements which may require the Grantor's signature; (i) execute, in connection
with any sale provided for in any Document, any endorsements, assignments or
other instruments of conveyance or transfer with respect to the Collateral and
to otherwise direct such sale or resale, all as though the Attorney were the
absolute owner of the property of the Grantor for all purposes, and (j) at the
Attorney's option and the Grantor's expense, at any time or from time to time,
all acts and other things that the Attorney reasonably deems necessary to
perfect, preserve, or realize upon the Grantor's property or assets and the
Secured Party's Liens thereon, all as fully and effectively as the Grantor might
do. The Grantor hereby ratifies, to the extent permitted by law, all that said
Attorney shall lawfully do or cause to be done by virtue hereof.
[signature page follows]
IN WITNESS WHEREOF, this Power of Attorney is executed by the Grantor, and
the Grantor has caused its seals to be affixed pursuant to the authority of its
board of directors this ___ day of _________, 2008.
The Grantor:
TOTAL LUXURY GROUP, INC.
By:_________________________
Name:
Title:
NOTARY PUBLIC CERTIFICATES
On this _____ day of ___________, 2008, ___________________ [name] who is
personally known to me appeared before me in his/her capacity as the
_________________[title] of TOTAL LUXURY GROUP, INC. and executed on behalf of
such entity the Power of Attorney in favor of ACCELERANT PARTNERS LLC to which
this Certificate is attached.
____________________________
Notary Public
