PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (this "Agreement"), dated as of March 7, 2008, is
executed by and between Total Luxury Group, Inc., a Indiana corporation (the
"Pledgor" or the "Company"), and Accelerant Partners LLC, a Delaware limited
liability company (the "Pledgee").
Background
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 Company, as purchaser of certain shares of Petals
Decorative Accents, Inc. common stock (the "Shares") and the Pledgee, as the
seller of the Shares, the Company, as partial consideration for its purchase of
Shares, has agreed to issue to the Pledgee, the Company'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"). Capitalized
terms used herein and not otherwise defined herein shall have the respective
meanings ascribed to such terms in the Purchase Agreement.
B. Pledgor is the legal and beneficial owner, as more fully described on Exhibit
A attached hereto, of 38,000,000 Shares of Petals Decorative Accents Inc.
(sometimes hereinafter referred to as "Issuer"), and may from time to time
hereafter acquire additional shares of common stock or other equity securities
of Issuer. Pledgor, as an equity holder of Issuer, acknowledges that (i) it will
receive direct and indirect benefits from the Pledgee pursuant to the Purchase
Agreement and the other Transaction Documents and (ii) Pledgor's execution of
this Agreement is a condition precedent to Pledgee entering into the Purchase
Agreement and fulfilling its covenants thereunder and consummating the
transactions contemplated thereby.
C. In order to further secure the payment and performance of the covenants
of Pledgor in favor of Pledgee under the Purchase Agreement or any other
Transaction Document (collectively, the "Obligations"), Pledgor has agreed to
pledge to Pledgee, for the benefit of Pledgee, all of the equity securities of
Issuer, in each case, now or hereafter owned by Pledgor.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants set forth herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
1. Pledge. Pledgor hereby pledges and grants to Pledgee, for the benefit of
Pledgee, a lien on and security interest in all of Pledgor's right, title and
interest in and to the following property and interests in property of Pledgor,
whether now owned or hereafter acquired and wherever located (the "Pledged
Collateral"):
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(a) all common stock and equity securities and all general intangibles
relating to the ownership of such common stock and equity securities of
Issuer now or at any time or times hereafter owned by Pledgor, including,
without limitation, all of such equity securities (and general intangibles
related thereto) or other securities described on Exhibit A hereto
(collectively, the "Pledged Interests");
(b) all warrants, options and other rights to acquire, and rights in
and to, the common stock or other equity securities of Issuer now or at any
time or times hereafter owned by Pledgor (collectively, the "Rights");
(c) all other property now or at any time or times hereafter received,
receivable or otherwise distributed in respect of or in exchange or
substitution for any or all of the Pledged Interests and/or the Rights, and
all of Pledgor's rights thereto, including, without limitation, all
dividends, cash and other payments and distributions of any kind
whatsoever; and
(d) all proceeds of all of the foregoing.
Pledgor agrees to execute and deliver to Pledgee (i) assignments separate
from certificate substantially in the form of Exhibit B hereto, undated and
appropriately endorsed in blank, with respect to any certificated Pledged
Interests and any warrants or options for the purchase of common stock or other
equity securities of Issuer included in the Rights and (ii) such other documents
of transfer as Pledgee may from time to time reasonably request to enable
Pledgee to transfer, after the occurrence and during the continuance of an Event
of Default, the Pledged Collateral into its name or the name of its nominee (all
of the foregoing are hereinafter collectively referred to as the "Powers").
2. Security for the Obligations. The Pledged Collateral secures the prompt
and complete payment, performance and observance of the Obligations (including,
without limitation, all obligations and liabilities of Pledgor hereunder).
3. Perfection of Security Interest. Pledgor agrees to (a) promptly deliver
to Pledgee or Pledgee's nominee all certificates or other instruments evidencing
any of the Pledged Collateral, if any, (b) execute and deliver to Pledgee such
financing statements as Pledgee may reasonably request with respect to the
Pledged Collateral (or, if execution by Pledgor is not required pursuant to the
applicable Uniform Commercial Code, Pledgor hereby authorizes Pledgee to file
all financing statements deemed necessary by Pledgee to perfect the security
interests granted hereunder), and (c) take such other steps as Pledgee may from
time to reasonably request to perfect Pledgee's security interest in the Pledged
Collateral or any part thereof under applicable law.
4. Pledged Collateral Adjustments. If, during the term of this Agreement:
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(a) any non-cash dividend or distribution, reclassification,
readjustment or other change is declared or made in the capital structure
of Issuer, or any option, warrant or similar instrument included within the
Pledged Collateral is exercised, or both, or
(b) any subscription, warrants, options or other Rights shall be
issued in connection with the Pledged Collateral,
then Pledgor shall (i) promptly deliver all new, substituted and additional
shares, warrants, options, Rights or other equity securities, issued by reason
of any of the foregoing, and all certificates and other instruments evidencing
the same to Pledgee to be held under the terms of this Agreement and shall
constitute Pledged Collateral hereunder and (ii) promptly deliver to Pledgee a
revised Exhibit A, adding such additional Pledged Collateral; provided, that
nothing contained in this Section 4 is intended or shall be deemed or construed
to permit any non-cash dividend or distribution, issuance of additional common
stock, warrants, options or other Rights or other equity securities,
reclassification, readjustment or other change in the capital structure of
Company which is not expressly permitted by the Purchase Agreement.
5. Subsequent Changes Affecting Pledged Collateral. Pledgor hereby
represents and warrants that it has made its own arrangements for keeping itself
informed of changes or potential changes affecting the Pledged Collateral
(including, but not limited to, rights to convert, rights to subscribe, payment
of dividends, reorganization or other exchanges, tender offers and voting
rights), and Pledgor agrees that Pledgee shall not have any obligation to inform
Pledgor of any such changes or potential changes or to take any action or omit
to take any action with respect thereto. Pledgee may, after the occurrence and
during the continuance of an Event of Default, without notice and at its option,
transfer or register the Pledged Collateral or any part thereof into its or its
nominee's name with or without any indication that such Pledged Collateral is
subject to the lien created hereunder. In addition, upon the occurrence and
during the continuance of an Event of Default, Pledgee may at any time exchange
certificates or other instruments representing or evidencing Pledged Collateral
for certificates or other instruments of smaller or larger denominations.
6. Representations and Warranties. Pledgor hereby represents and warrants
as of the effective date hereof to Pledgee as follows:
(a) Pledgor is the sole legal and beneficial owner of the Pledged
Interests owned by Pledgor, free and clear of any lien or encumbrance,
except for the lien created by this Agreement;
(b) The Pledged Interests have been duly authorized and, if such
Pledged Interests are shares of stock, validly issued and are fully paid
and non-assessable;
(c) The Pledged Interests constitute ninety-eight percent (98%) of the
issued and outstanding shares of common stock or other equity securities of
Issuer and there are no outstanding options, warrants or other agreements
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with respect to the Pledged Interests;
(d) Pledgor has full power and authority to enter into this Agreement
and has the right to vote, assign, deposit, pledge and xxxxx x xxxx on or
otherwise transfer all of its rights in the Pledged Collateral free and
clear of any liens;
(e) No consent of any other Person is required under Issuer's
certificate of incorporation, limited liability company operating
agreement, or any other similar constituent document, to the grant of the
liens provided hereby and to the transfer of the Pledged Collateral to, and
to the exercise of any voting or other consensual rights with respect to
the Pledged Collateral by, Pledgee or its designee in connection with the
exercise of any remedies hereunder, including under Section 10 below; and
there are no restrictions contained in Issuer's certificate of
incorporation, limited liability company operating agreement, or any other
similar constituent document which could reasonably be expected to impair
in any material respect Pledgee's ability to exercise any of such or any
other remedies.
(f) No consent, authorization, approval, or other action by, and no
notice to or filing with, any governmental authority is required either (i)
for the pledge of the Pledged Collateral pursuant to this Agreement or for
the execution or delivery by Pledgor of, or performance by Pledgor under,
this Agreement or (ii) for the exercise by Pledgee of the voting,
consensual or other rights provided for in this Agreement or the remedies
in respect of the Pledged Collateral pursuant to this Agreement;
(g) The pledge of the Pledged Collateral pursuant to this Agreement
creates a valid and perfected first priority security interest in the
Pledged Collateral, in favor of Pledgee, securing the prompt and complete
payment, performance and observance of the Obligations;
(h) Each of the Powers, if any, is duly executed and gives Pledgee the
authority it purports to confer; and
(i) Pledgor's legal name is exactly as it appears on the signature
pages hereto, Pledgor's jurisdiction of organization is the State of
Indiana, and Pledgor will provide Pledgee with thirty (30) days prior
written notice of any change in Pledgor's legal name or jurisdiction of
organization.
7. Voting Rights. During the term of this Agreement, and except as
otherwise provided in this Section 7, Pledgor shall have the right to vote the
Pledged Interests on all questions in a manner not inconsistent with the terms
of the Purchase Agreement, any Transaction Document or this Agreement and
Pledgee will deliver all necessary documents to allow Pledgor to take such
action upon Pledgor's reasonable request. After the occurrence and during the
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continuance of an Event of Default, Pledgee may, at Pledgee's option, (a)
exercise all voting and other consensual rights and powers pertaining to the
Pledged Collateral, including the right to take action by consent and (b)
terminate Pledgor's ability to vote the Pledged Interests by written notice to
Pledgor of such termination. Pledgor hereby agrees to execute all proxies or
other instruments, documents or agreements deemed reasonably necessary by
Pledgee to evidence the right to vote the Pledged Interests as provided
hereunder, and Pledgor agrees that it shall not be entitled to rescind, revoke
or otherwise modify Pledgee's vote executed in accordance with this Section 7.
Any and all proxies executed by Pledgor pursuant to this Section 7 shall be
deemed for all purposes to be a proxy coupled with an interest and shall be
irrevocable until the payment in full, in cash, of all the Obligations and the
fulfillment or termination of all covenants under the Purchase Agreement.
Notwithstanding anything to the contrary contained herein, Pledgor will not, and
will not permit Issuer to "opt-out" of Article 8 of the Uniform Commercial Code.
8. Dividends and Other Distributions. (a) (i) Pledgor shall be entitled to
receive and retain any and all dividends and other distributions paid in respect
of the Pledged Collateral to the extent that such receipt or such distribution
is not prohibited by the terms of the Purchase Agreement or any other
Transaction Document; provided, that any and all
(A) dividends paid or payable other than in cash with
respect to, and instruments and other property received,
receivable or otherwise distributed with respect to, or in
exchange for, any of the Pledged Collateral;
(B) dividends and other distributions paid or payable
in cash with respect to any of the Pledged Collateral on
account of a partial or total liquidation or dissolution or
in connection with a reduction of capital, capital surplus
or paid-in surplus;
(C) cash paid, payable or otherwise distributed with
respect to principal of, or in redemption of, or in exchange
for, any of the Pledged Collateral; and
(D) dividends paid in respect of the Pledged Collateral
that are not permitted pursuant to the terms of the Purchase
Agreement or any other Transaction Document
shall be Pledged Collateral, and shall be forthwith delivered to Pledgee to hold
as Pledged Collateral and shall, if received by Pledgor, be received in trust
for Pledgee, be segregated from the other property or funds of Pledgor, and be
delivered immediately to Pledgee as Pledged Collateral in the same form as so
received (with any necessary endorsements); and
(ii) Pledgee shall promptly execute and deliver (or cause to be
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executed and delivered) to Pledgor all such proxies and other
instruments as Pledgor may reasonably request for the purpose of
enabling Pledgor to receive the dividends or interest payments which
it is authorized to receive and retain pursuant to clause (i) above.
(b) After the occurrence and during the continuance of an Event of
Default:
(i) All rights of Pledgor to receive the dividend payments which
it would otherwise be authorized to receive and retain pursuant to
Section 8(a)(i) hereof shall cease, and all such rights shall
thereupon become vested in Pledgee, which shall thereupon have the
sole right to receive and hold as Pledged Collateral such dividends
and interest payments;
(ii) All dividends and interest payments which are received by
Pledgor contrary to the provisions of clause (i) of this Section 8(b)
shall be received in trust for Pledgee, shall be segregated from other
funds of such Pledgor and shall be paid over immediately to Pledgee as
Pledged Collateral in the same form as so received (with any necessary
endorsements); and
(iii) Pledgor shall, upon the request of Pledgee, at Pledgor's
expense, do or cause to be done all such other acts and things as may
reasonably be necessary to make such sale of the Pledged Collateral or
any part thereof valid and binding and in compliance with applicable
law.
9. Transfers and Other Liens. Pledgor agrees that it will not (a) sell or
otherwise dispose of, or grant any option or other Rights with respect to, any
of the Pledged Collateral without the prior written consent of Pledgee, and that
upon any sale or disposition of Pledged Collateral as permitted under this
Section 9, it shall reimburse Pledgee for all reasonable expenses incurred by
Pledgee in connection with the release of any lien in connection with such
permitted sale or disposition or (b) create or permit to exist any lien upon or
with respect to any of the Pledged Collateral or the assets of Issuer, except
for the lien created by this Agreement. Pledgor agrees that it will not vote to
enable, and will not otherwise permit, Issuer to (x) issue any shares of common
stock or other equity or securities of any nature in addition to or in exchange
or substitution for the Pledged Interests issued by Company unless such shares
of common stock or other equity securities are pledged and delivered to Pledgee
as provided herein, or (y) unless specifically permitted by the terms of the
Purchase Agreement, dissolve, liquidate, retire any of its shares of common
stock or other equity interests or reduce its capital or merge or consolidate
with any other Person.
10. Remedies.
(a) Pledgee shall have, in addition to any other rights given under
this Agreement, the Purchase Agreement or any other Transaction Document or
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by applicable law, all of the rights and remedies with respect to the
Pledged Collateral of a Pledgee under the Uniform Commercial Code as in
effect from time to time in the State of Delaware. In addition, after the
occurrence and during the continuance of an Event of Default, Pledgee shall
have such powers of sale and other powers as may be conferred by applicable
law. With respect to the Pledged Collateral or any part thereof which shall
then be in or shall thereafter come into the possession or custody of
Pledgee, or which Pledgee shall otherwise have the ability to transfer
under applicable law, Pledgee may, in its sole discretion, without notice
except as specified below, after the occurrence and during the continuance
of an Event of Default, sell or cause the same to be sold at any exchange,
broker's board or at public or private sale, in one or more sales or lots,
at such price as Pledgee may deem best, for cash or on credit or for future
delivery, without assumption of any credit risk, and the purchaser of any
or all of the Pledged Collateral so sold shall thereafter own the same,
absolutely free and clear from any subordinate claim, encumbrance or right
of any kind whatsoever. Pledgee may, in its own name, or in the name of a
designee or nominee, buy the Pledged Collateral at any public sale and, if
permitted by applicable law, buy the Pledged Collateral at any private
sale. Pledgor will pay to Pledgee all expenses (including, without
limitation, court costs and reasonable attorneys' fees and expenses) of, or
incident to, the enforcement of any of the provisions hereof by Pledgee.
Pledgee agrees to apply any proceeds of the sale of the Pledged Collateral
to the Obligations in accordance with the terms of the Purchase Agreement,
and, to the extent any surplus remains after the repayment in full in cash
of the Obligations, Pledgee agrees to distribute any such proceeds as
required by law.
(b) Unless any of the Pledged Collateral threatens to decline speedily
in value or is or becomes of a type sold on a recognized market, Pledgee
will give Pledgor reasonable notice of the time and place of any public
sale thereof, or of the time after which any private sale or other intended
disposition is to be made. Any sale of the Pledged Collateral conducted in
conformity with reasonable commercial practices of banks, commercial
finance companies, insurance companies or other financial institutions
disposing of property similar to the Pledged Collateral shall be deemed to
be commercially reasonable. Notwithstanding any provision to the contrary
contained herein, Pledgor agrees that any requirements of reasonable notice
shall be met if such notice is received by Pledgor as provided in Section
21 below at least ten (10) days before the time of the sale or disposition;
provided, that Pledgee may give any shorter notice that is commercially
reasonable under the circumstances. Any other requirement of notice, demand
or advertisement for sale is waived by Pledgor, to the extent permitted by
law.
(c) In view of the fact that federal and state securities laws may
impose certain restrictions on the method by which a sale of the Pledged
Collateral may be effected after an Event of Default, Pledgor agrees that
after the occurrence and during the continuance of an Event of Default,
Pledgee may, from time to time, attempt to sell all or any part of the
Pledged Collateral by means of a private placement restricting the bidders
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and prospective purchasers to those who are qualified and will represent
and agree that they are purchasing for investment only and not for
distribution. In so doing, Pledgee may solicit offers to buy the Pledged
Collateral, or any part of it, from one or more investors deemed by
Pledgee, in its reasonable judgment, to be financially responsible parties
who might be interested in purchasing the Pledged Collateral. The
acceptance by Pledgee of the highest and best offer obtained therefrom
shall be deemed to be a commercially reasonable method of disposing of such
Pledged Collateral.
(d) Pledgor agrees to waive any and all rights of subrogation it may
have against Issuer upon the sale or other disposition of all or any
portion of the Pledged Interests of Issuer by Pledgee pursuant to the terms
of this Agreement.
11. Security Interest Absolute. The respective rights of Pledgee, the liens
created hereunder and all obligations and liabilities of Pledgor, in each case
hereunder, shall be absolute and unconditional irrespective of:
(a) any lack of validity or enforceability of the Purchase Agreement
or any other Transaction Document;
(b) any change in the time, manner or place of payment of, or in any
other term of, all or any part of the Obligations, or any other amendment
or waiver of or any consent to any departure from the Purchase Agreement or
any other Transaction Document;
(c) any exchange, release or non-perfection of any other collateral,
or any release or amendment or waiver of or consent to departure from any
guaranty, for all or any part of the Obligations; or
(d) any other circumstance which might otherwise constitute a defense
available to, or a discharge of, Pledgor in respect of the Obligations or
of this Agreement.
12. Pledgee Appointed Attorney-in-Fact. Pledgor hereby appoints Pledgee as
its attorney-in-fact, with full authority, in the name of Pledgor or otherwise,
after the occurrence and during the continuance of an Event of Default, from
time to time in Pledgee's sole discretion, to take any action and to execute any
instrument which Pledgee may deem necessary to accomplish the purposes of this
Agreement, including, without limitation, to receive, endorse and collect all
instruments made payable to Pledgor representing any dividend, interest payment
or other distribution in respect of the Pledged Collateral or any part thereof
and to give full discharge for the same and to arrange for the transfer of all
or any part of the Pledged Collateral on the books of Company to the name of
Pledgee or Pledgee's nominee. The power of attorney granted pursuant to this
Section 12 is a power coupled with an interest and shall be irrevocable until
the payment in full, in cash, of all Obligations and fulfillment or termination
of all covenants under the Purchase Agreement.
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13. Waivers. To the extent permitted by applicable law, Pledgor waives
presentment and demand for payment of any of the Obligations, protest and notice
of dishonor or the occurrence of any default with respect to any of the
Obligations, and all other notices to which Pledgor might otherwise be entitled,
except as otherwise expressly provided herein, in the Purchase Agreement or in
any other Transaction Document.
14. Term. This Agreement shall remain in full force and effect until all
the Obligations have been indefeasibly paid and satisfied in full in cash and
all covenants under the Purchase Agreement are fulfilled or terminated. Upon the
termination of this Agreement as provided above (other than as a result of the
sale of the Pledged Collateral), Pledgee will promptly upon the request of
Pledgor, release the security interest created hereunder and, if it then has
possession of the Pledged Interests, will deliver the Pledged Interests and the
Powers to the Pledgor free and clear of all liens granted in favor of Pledgee.
15. Definitions. The singular shall include the plural and vice versa and
any gender shall include any other gender as the context may require.
16. Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of Pledgor, Pledgee and their respective successors and assigns.
Pledgor's successors and assigns shall include, without limitation, a receiver,
trustee or debtor-in-possession of or for Pledgor.
17. GOVERNING LAW. ALL QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY,
ENFORCEMENT AND INTERPRETATION OF THIS PLEDGE 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
PERSONALLY SUBJECT TO THE JURISDICTION OF ANY SUCH COURT, THAT SUCH SUIT, ACTION
OR PROCEEDING IS IMPROPER. NOTHING IN THIS PLEDGE AGREEMENT SHALL BE DEEMED OR
OPERATE TO PRECLUDE THE PLEDGEE FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION
IN ANY OTHER JURISDICTION TO REALIZE ON THE PLEDGED COLLATERAL OR ANY OTHER
SECURITY FOR THE OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN
FAVOR OF THE PLEDGEE. 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
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OVERNIGHT DELIVERY (WITH EVIDENCE OF DELIVERY) TO SUCH PARTY AT THE ADDRESS IN
EFFECT FOR NOTICES TO IT UNDER THIS PLEDGE 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.
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 PLEDGEE, THE PLEDGOR AND ISSUER ARISING OUT OF,
CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED IN
CONNECTION WITH, THIS PLEDGE AGREEMENT OR ANY OF THE OTHER TRANSACTION DOCUMENTS
OR THE TRANSACTIONS RELATED HERETO OR THERETO.
19. Severability. Whenever possible, each provision of this Agreement shall
be interpreted in such manner as to be effective and valid under applicable law,
but, if any provision of this Agreement shall be held to be prohibited or
invalid under applicable law, such provision shall be ineffective only to the
extent of such prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Agreement.
20. Further Assurances. Pledgor agrees that it will cooperate with Pledgee
and will execute and deliver, or cause to be executed and delivered, all such
other assignments separate from certificate, proxies, instruments and documents,
and will take all such other actions, including, without limitation, the
execution and filing of financing statements, as Pledgee may reasonably request
from time to time in order to carry out the provisions and purposes of this
Agreement.
21. Duty of Care. Pledgee shall not be liable for any acts, omissions,
errors of judgment or mistakes of fact or law, including, without limitation,
acts, omissions, errors or mistakes with respect to the Pledged Collateral,
except for those arising out of or in connection with such Person's or that
Person's employees' or officers' gross negligence or willful misconduct as
determined by a court of competent jurisdiction pursuant to a final,
non-appealable order. Without limiting the generality of the foregoing, Pledgee
shall not be under any obligation to take any steps necessary to preserve rights
in the Pledged Collateral against any other Persons but may do so at its option.
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All expenses incurred in connection therewith shall be for the sole account of
Pledgor, and shall constitute part of the Obligations secured hereby.
22. Notices. Except as otherwise provided herein, whenever it is provided
herein that any notice, demand, request, consent, approval, declaration or other
communications shall or may be given to or served upon any of the parties by any
other party, or whenever any of the parties desires to give or serve upon any
other communication with respect to this Agreement, each such notice, demand,
request, consent, approval, declaration or other communication shall be in
writing and shall be given (and deemed to have been given) to the address on
record with the sending party and otherwise in accordance with and subject to
the terms of Section 7.4 of the Purchase Agreement.
23. Amendments, Waivers and Consents. No amendment to, modification or
waiver of, or consent with respect to, any provision of this Agreement shall in
any event be effective unless the same shall be in writing and signed and
delivered by Pledgee and Pledgor, and then any such amendment, modification,
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given.
24. Section Headings. The section headings in this Agreement are inserted
for convenience of reference and shall not be considered a part of this
Agreement or used in its interpretation.
25. Execution in Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be an original, but all of which shall
together constitute one and the same agreement. Any such counterpart which may
be delivered by facsimile transmission shall be deemed the equivalent of an
originally signed counterpart and shall be fully admissible in any enforcement
proceedings regarding this Agreement.
26. Merger. This Agreement represents the final agreement of Pledgor with
respect to the matters contained herein and may not be contradicted by evidence
of prior or contemporaneous agreements, or subsequent oral agreements, between
Pledgor and Pledgee.
27. Inconsistency. In the event of any of inconsistency between the
provisions of this Agreement and the provisions of the Purchase Agreement or any
other Transaction Document, the provisions of this Agreement shall control.
[Remainder of Page In6tentionally Left Blank; Signature Page Follows]
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IN WITNESS WHEREOF, Pledgor and Pledgee have each caused this Agreement
to be executed and delivered by its duly authorized officer as of the date first
set forth above.
PLEDGOR:
--------
TOTAL LUXURY GROUP, INC.
By: __________________________
Name: __________________________
Its: __________________________
PLEDGEE:
--------
ACCELERANT PARTNERS LLC
By: __________________________
Name: __________________________
Title: __________________________
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ACKNOWLEDGMENT
The undersigned hereby (i) acknowledges receipt of a copy of the Pledge
Agreement dated as of March 7, 2008 (the "Pledge Agreement") by and among Total
Luxury Group, Inc., a Indiana corporation ("Pledgor") and Accelerant Partners
LLC, a Delaware limited liability company (the "Pledgee") and (ii) agrees
promptly to note on its books and records the transfer of the security interest
in the Pledged Interests (as defined in the Pledge Agreement), including the
following legend (or such other legend as may be required and/or effective
pursuant to the corporate code, limited liability company act or other
applicable law of the jurisdiction of organization of the undersigned):
Total Luxury Group, Inc., a Indiana corporation (the
"Pledgor"), has under certain circumstances empowered
Accelerant Partners LLC (the "Pledgee"), under that certain
Pledge Agreement dated as of March 7, 2008 (as amended,
restated, supplemented or otherwise modified and in effect
from time to time, the "Pledge Agreement") between Pledgor
and Pledgee, to vote all of the shares of common stock of
this entity held of record from time to time by Pledgor
pursuant to the Pledge Agreement.
Dated as of: March 7, 2008
PETALS DECORATIVE ACCENTS INC.
By: ______________________________
Name: ______________________________
Its: ______________________________
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EXHIBIT A
PLEDGED INTERESTS
-----------------
Number and
Class of Certificate Percentage
Issuer Shares Number of Shares
Petals Decorative Accents Inc. Common 98%
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EXHIBIT B
FORM OF ASSIGNMENT SEPARATE FROM CERTIFICATE
--------------------------------------------
FOR VALUE RECEIVED, the undersigned, Total Luxury Group, Inc., does hereby sell,
assign and transfer to __________________________________, ______________ (__)
shares of ____________ common stock of Petals Decorative Accents Inc., a company
organized under the laws of the State of Indiana, represented by Certificate No.
__ (the "Shares"), standing in the name of the undersigned on the books of said
company and does hereby irrevocably constitute and appoint Accelerant Partners
LLC, as the undersigned's true and lawful attorney, for it and in its name and
stead, to sell, assign and transfer all or any of the Shares, and for that
purpose to make and execute all necessary acts of assignment and transfer
thereof; and to substitute one or more persons with like full power, hereby
ratifying and confirming all that said attorney or substitute or substitutes
shall lawfully do by virtue hereof.
Dated: ______________
[_____________________, a ___________ ________________]
By: ______________________________________________
Name: ______________________________________________
Its: ______________________________________________
15
