Exhibit 10.29

 

SECURITY AGREEMENT

 

THIS SECURITY AGREEMENT (this “Security Agreement”) dated as of NOVEMBER 3,
2016, is made by VINTAGE STOCK, INC., a Missouri corporation (“Debtor”), with
its principal office and mailing address at 202 E. 32nd Street, Joplin, MO
64804, in favor of TEXAS CAPITAL BANK, NATIONAL ASSOCIATION, whose office
address is at 2000 McKinney Avenue, Suite 700, Dallas (Dallas County), TX 75201
(together with its successors and assigns, “Secured Party”).

 

WITNESSETH:

 

A.       Debtor has requested that Secured Party make a loan or loans to or for
the account of Debtor pursuant to that certain LOAN AGREEMENT by and between
Debtor and Secured Party of even date herewith (as renewed, modified, amended or
restated from time to time, the “Agreement”).

 

B.       Secured Party has conditioned its agreement to make such loan or loans
under the Agreement upon Debtor’s execution and delivery of this Security
Agreement.

 

NOW, THEREFORE, to induce Secured Party to make a loan or loans to or for the
account of Debtor, and other good and valuable considerations, the receipt and
sufficiency of which are hereby acknowledged, Debtor hereby agrees with Secured
Party, as follows:

 

ARTICLE I
GENERAL

 

Section 1.01       Terms Defined in Agreement and Code. All terms used herein
which are not otherwise defined shall mean as in the Agreement; terms not
defined in the Agreement and defined in the Code shall have the same meaning
herein unless otherwise defined herein or the context otherwise requires. “Code”
shall mean the Uniform Commercial Code as presently in effect in the State of
Texas, Texas Business & Commerce Code Annotated, Sections 1.101 through 11.108.

 

ARTICLE II
SECURITY INTEREST

 

Section 2.01       Grant of Security Interest. Debtor hereby grants and confirms
that it has granted to Secured Party a security interest in, a general lien
upon, and a right of set-off against the following described collateral, except
to the extent expressly prohibited by a document relating to a Permitted Lien
(the “Collateral”):

 

(a)               all of Debtor’s accounts of any kind (including all leases)
whether now existing or hereafter arising (herein called the “Accounts”); all
chattel paper (including electronic chattel paper, hereinafter collectively
referred to as “chattel papers”), documents and instruments whether now existing
or hereafter arising relating to the Accounts; all rights now or hereafter
existing in and to all security agreements, leases and other contracts securing
or otherwise relating to any Accounts or any such chattel papers, documents and
instruments; and all returned or repossessed goods arising therefrom or relating
to any Accounts, or other proceeds of any sale or other disposition of
inventory;

 

 

 

 

 

 1 

 

 

(b)               all of Debtor’s investment property, payment intangibles,
letter of credit rights and general intangibles of any kind whether now existing
or hereafter arising including, without limitation the following (herein called
the “General Intangibles”):

 

(i)                 all leases of personal property;

 

(ii)              all copyrights, trademarks, trademark registrations and
applications for registration, trade names, corporate names, trade styles,
service marks, logos, other source and business identifying marks, together with
any goodwill associated therewith, and all patents, patent applications, and all
renewals, extensions and continuations in part of the above, any written
agreement granting any right to use any copyright, trademark, trademark
application or registration, patent, patent application or registration, and the
right to sue for past, present and future infringements of the foregoing
including the intellectual property collateral set forth on Schedule 3.20 to the
Agreement attached thereto; and

 

(iii)            all chattel papers, documents and instruments whether now
existing or hereafter arising relating to the General Intangibles; and all
rights now or hereafter existing in and to all security agreements, leases,
licenses and other contracts securing or otherwise relating to any General
Intangibles or such chattel papers, documents and instruments;

 

(c)               all of Debtor’s inventory, goods, machinery, equipment,
furniture, fixtures and parts in all of their forms, whether now owned or
hereafter acquired and wherever located, all parts thereof and all accessions or
additions thereto and products thereof, whether now owned or hereafter acquired
(any and all such inventory, goods, machinery, equipment, furniture, fixtures,
parts, accessions, additions and products herein called the “Goods”); and
including, without limiting the foregoing, the Goods located at Debtor’s places
of business listed on Schedule 3.01 to the Agreement; all chattel papers,
documents and instruments whether now existing or hereafter arising relating to
the Goods; and all rights now or hereafter existing in and to all security
agreements, leases and other contracts securing or otherwise relating to any
Goods or any such chattel papers, documents and instruments;

 

(d)               all of Debtor’s chattel papers, letters of credit, notes,
documents and instruments (herein called the “Instruments”) whether now existing
or hereafter arising; and all rights now or hereafter existing in and to all
security agreements, leases and other contracts securing or otherwise relating
to any such chattel papers, documents and instruments;

 

(e)               any additional Property from time to time delivered to or
deposited with Secured Party or any agent bank of Secured Party, whether as
security for the Indebtedness or otherwise;

 

 

 

 

 

 

 2 

 

 

(f)                all commercial tort claims, deposit accounts, money letter of
credit rights, payment intangibles or software; and

 

(g)               the proceeds, products, additions, substitutions and
accessions of and to any and all of the foregoing property or assets and all
supporting obligations relating thereto; and all of Debtor’s books, records,
reports, memoranda and data compilations, in any form (including, without
limitation, corporate and other business records, customer lists, credit files,
computer programs, printouts and any other computer materials and records), of
Debtor pertaining to any and all of the foregoing property or assets.

 

Notwithstanding anything to the contrary contained herein, the security
interests and Liens granted under this Agreement shall not extend to, and the
term “Collateral” shall not include, any Excluded Property, and to the extent
that any Collateral later becomes Excluded Property, the Lien and security
interest granted hereunder will automatically be deemed to have been terminated
and released; provided further that, if and when any property shall cease to be
Excluded Property, a Lien on and security interest in such property shall
automatically be deemed granted therein. As used in this Security Agreement,
“Excluded Property” means: (i) any leasehold interests in real property; (ii)
all cars, trucks, trailers and other vehicles or assets subject to certificates
of title under the laws of any state; (iii) any assets with respect to which
Secured Party determines, in its sole discretion, that the burden or costs of
creating and/or perfecting such a security interest therein is excessive in
relation to the benefit to Secured Party of the security to be afforded thereby;
(iv) payroll and other employee wage and benefit accounts, tax accounts,
including, without limitation, sales tax accounts, and fiduciary or trust
accounts; (v) any permit, lease, license, contract or other Instrument of Debtor
to the extent the grant of a security interest in such permit, lease, license,
contract or other Instrument in the manner contemplated by this Security
Agreement, under the terms thereof or under applicable law, is prohibited and
would result in the termination thereof or give the other parties thereto the
right to terminate, accelerate or otherwise alter Debtor’s rights, titles and
interests thereunder (including upon the giving of notice or the lapse of time
or both); provided that any such limitation on the security interests granted
hereunder shall only apply to the extent that any such prohibition or right to
terminate or accelerate or alter Debtor’s rights could not be rendered
ineffective pursuant to the Code or any other applicable law (including
bankruptcy and debtor relief laws) or principles of equity; provided, further,
that in the event of the termination or elimination of any such prohibition or
right or the requirement for any consent contained in any applicable law,
permit, lease, license, contract or other Instrument, to the extent sufficient
to permit any such item to become Collateral hereunder, or upon the granting of
any such consent, or waiving or terminating any requirement for such consent, a
security interest in such permit, lease, license, contract or other Instrument
shall be automatically and simultaneously granted hereunder and shall not be
included as Excluded Property hereunder; (vi) any United States intent-to-use
trademark applications to the extent that, and solely during the period in which
the grant of a security interest therein would impair the validity or
enforceability of or render void or result in the cancellation of, any
registration issued as a result of such intent-to-use trademark applications
under applicable law; provided that upon submission and acceptance by the USPTO
of an amendment to allege pursuant to 15 U.S.C. Section 1060(a) or any successor
provision, such intent-to-use trademark application shall be considered
Collateral; (vii) any voting capital stock in excess of 65% of the issued and
outstanding voting capital stock of any foreign Subsidiary; or (viii) margin
stock; provided, that the security interest granted to Secured Party under this
Agreement shall attach immediately to any asset of Debtor at such time as such
asset ceases to be “Excluded Property” described in any of the foregoing clauses
(i) through (viii) above; provided, further, Excluded Property shall not include
any proceeds, products, substitutions or replacements of any Excluded Property
(unless such proceeds, products, substitutions or replacements would themselves
otherwise constitute Excluded Property).

 

 

 3 

 

 

Section 2.02       Indebtedness Secured. The security interest in, general lien
upon, and right of set-off against the Collateral is granted to Secured Party to
secure the Indebtedness.

 

Section 2.03       License. Secured Party is hereby granted a non-exclusive
license or other right to use, following the occurrence and during the
continuance of an Event of Default, without charge, Debtor’s labels, patents,
copyrights, rights of use of any name, trade secrets, trade names, trademarks,
service marks, customer lists and advertising matter, or any property of a
similar nature, as it pertains to the Collateral, in completing production of,
advertising for sale, and selling any Collateral, and, following the occurrence
and during the continuance of an Event of Default, Debtor’s rights under all
licenses and all franchise agreements shall inure to Secured Party’s benefit to
the extent assignable and to the extent Debtor has such rights. In addition,
Debtor hereby irrevocably agrees that Secured Party may, following the
occurrence and during the continuance of an Event of Default, sell any of
Debtor’s inventory directly to any Person, including without limitation Persons
who have previously purchased Debtor’s inventory from Debtor and in connection
with any such sale or other enforcement of Secured Party’s rights under this
Security Agreement, may sell inventory which bears any trademark owned by or
licensed to Debtor and any inventory that is covered by any copyright owned by
or licensed to Debtor and Secured Party may finish any work in process and affix
any trademark owned by or licensed to Debtor and sell such inventory as provided
herein.

 

ARTICLE III
REPRESENTATIONS AND WARRANTIES

 

In order to induce Secured Party to accept this Security Agreement, Debtor
represents and warrants to Secured Party (which representations and warranties
will survive the creation of the Indebtedness and any extension of credit
thereunder) that:

 

Section 3.01       Information. All information supplied and statements
(including financial statements), certificates or data furnished or made by
Debtor (or any officer, attorney or accountant of Debtor) to Secured Party
(including, without limitation, any extracts from or copies of the Books and
Records) in connection with the Indebtedness and/or this Security Agreement,
whether contemporaneously with or subsequent to the execution of this Security
Agreement are and shall be true, correct, complete, valid and genuine in all
material respects. No information, statements, certificate, exhibit or report
furnished by Debtor to Secured Party in connection with the Indebtedness and/or
this Security Agreement contains any material misstatement of fact or omitted to
state a material fact necessary to make the statement contained therein not
misleading in light of the circumstances when made.

 

 

 

 

 

 4 

 

 

Section 3.02       Status of Accounts. Each Account now existing represents, and
each Account hereafter arising will represent, the valid and legally enforceable
indebtedness of a bona fide account debtor arising from the sale, lease or
rendition by Debtor of goods and/or services and is not and will not be subject
to contra accounts, set-offs, defenses or counterclaims by or available to
account debtors obligated on the Accounts except as disclosed to Secured Party
in writing; such goods will have been delivered to, or be in the process of
being delivered to, and such services will have been rendered by Debtor to the
account debtor and accepted by the account debtor; and the amount shown as to
each Account on Debtor’s books will be the true amount owing and unpaid thereon,
subject to any discounts, allowances, rebates, credits and adjustments to which
the account debtor has a right and which have been disclosed to Secured Party in
writing.

 

Section 3.03       Status of Related Rights. All Related Rights are, and those
hereafter arising will be, valid and genuine in all material respects. Any
chattel paper included in the Related Rights has, and those hereafter arising
will have, only one duplicate original counterpart which constitutes chattel
paper or collateral within the meaning of the Code or the law of any applicable
jurisdiction. “Related Rights” shall mean all chattel papers, documents and
instruments relating to the Accounts or General Intangibles and all rights now
or hereafter existing in and to all security agreements, leases and other
contracts securing or otherwise relating to any Accounts or General Intangibles
or any such chattel papers, documents and instruments.

 

Section 3.04       Status of Books and Record. All Books and Records have been,
and those entries hereafter made therein will be, made in the regular course of
Debtor’s business; made on the basis of information recorded or transmitted (or
to be recorded or transmitted) by a Person, either an employee or representative
of Debtor, with knowledge of the acts, events, conditions, opinions or diagnoses
recorded therein and in the regular course of Debtor’s business; made at or near
the time of the act, event, condition, opinion or diagnosis recorded therein and
in the regular course of Debtor’s business; and contain full, true and correct
entries, in all material respects, of all dealings or transactions relating to
the Accounts, General Intangibles, Goods, Related Rights and other Collateral,
in accordance with generally accepted accounting principles, consistently
applied. “Books and Records” shall mean all books, records, reports, memoranda,
and/or data compilations, in any form (including, without limitation, corporate
and other business records, customer lists, credit files, computer programs,
printouts and any other computer materials and records), of Debtor pertaining to
any of the Accounts, General Intangibles, Goods, and any other Property included
in the Collateral.

 

Section 3.05       Mobile Goods. In the event any of the Goods are mobile, such
Goods are of a type normally used in more than one jurisdiction, such as motor
vehicles, fuel, trailers, rolling stock, airplanes, shipping containers, road
building and construction machinery and commercial harvesting machinery and the
like.

 

Section 3.06       Certificate of Title. In the event any of the Goods with a
value in excess of $50,000 are covered by a certificate of title, such Goods are
specifically identified on Exhibit A attached hereto.

 

Section 3.07       Collateral Not Covered by Documents. None of the Goods
included in the Collateral are, and at the time the security interest in favor
of Secured Party attaches, none of the after acquired Goods included in the
Collateral will be, covered by any Document (as defined in the Code or in the
Uniform Commercial Code of any state other than Texas where the Goods are (or
will be) located).

 

 

 

 

 5 

 

 

 

Section 3.08       Status of Instruments. Each Instrument now existing is, and
each Instrument hereafter will be, the valid and legally enforceable
indebtedness of a bona fide maker thereof for good and valuable consideration,
of which a Debtor is the owner and holder, and is not and will not be subject to
set-offs, counterclaims or defenses by any maker except as disclosed to Secured
Party in writing; and the amount shown on the relevant Debtor’s books in respect
thereof will be the true amount owing (unless otherwise identified in writing to
Secured Party) and unpaid thereon. Each Instrument with a face amount in excess
of $10,000 is endorsed to Secured Party and is in the possession of Secured
Party, unless (a) Secured Party shall otherwise consent in writing and (b) each
Instrument subject to such consent bears a legend, in form and substance
satisfactory to Secured Party, indicating that such Instrument is subject to a
security interest granted by this Security Agreement.

 

ARTICLE IV

COVENANTS

 

A deviation from the provisions of this Article IV shall not constitute an event
of default under this Security Agreement if, prior to the occurrence thereof,
such deviation is consented to in writing by Secured Party. Without the prior
written consent of Secured Party, Debtor will at all times comply with the
covenants contained in this Article IV, from the date hereof and for so long as
any part of the Indebtedness (other than contingent indemnification obligations)
is outstanding.

 

Section 4.01       Financing Statement Filings. Debtor authorizes Secured Party
to prepare and file financing statements pertaining to the Collateral with the
central filing office of its jurisdiction of organization, or in any other
jurisdiction in which Secured Party deems such a filing to be necessary or
appropriate. Debtor will notify Secured Party within TEN (10) days of the
occurrence of any condition or event that may change the proper location for the
filing of any financing statements or other public notice or recordings for the
purpose of perfecting security interests in the Collateral. Without limiting the
generality of the foregoing, Debtor will (a) prior to any Collateral becoming so
related to any particular real estate so as to become a fixture on such real
estate, notify Secured Party of the description of such real estate and the name
of the record owner thereof; (b) to the extent required under the Agreement,
upon demand of Secured Party, furnish written consent(s) to Secured Party’s
security interest and/or disclaimer(s) signed by any Person having an interest
in such real estate or other Collateral referred to in clause (a) above; and (c)
not, without at least THIRTY (30) days’ prior written notice to Secured Party,
change Debtor’s name, state of incorporation, identity or corporate structure
without the prior written consent of Lender, which consent shall not be
unreasonably withheld, conditioned or delayed. In any notice furnished pursuant
to this Section, Debtor will expressly state that the notice contains facts that
will or may require additional filings of financing statements or other notices
for the purpose of continuing perfection of Secured Party’s security interest in
the Collateral.

 

Section 4.02       [Reserved].

 

 

 

 

 

 6 

 

 

Section 4.03       Possession of Collateral. Secured Party shall be deemed to
have possession of any of the Collateral in transit to it or set apart for it.
Otherwise, the Collateral shall remain in Debtor’s possession or control at all
times at Debtor’s risk of loss and shall (except for temporary removal
consistent with its normal use) be kept at the locations represented or
permitted pursuant to the Agreement and any other location specified in writing
to Secured Party (other than with respect to mobile Goods (such as phones,
laptop computers and the like) in the possession of employees and consultants in
the ordinary course of business).

 

Section 4.04       Further Assurances. Debtor (i) will not remove a material
portion of any Goods included in the Collateral from the jurisdiction in which
such Goods are located without first notifying the Secured Party other than fuel
inventory and mobile Goods in the ordinary course of business; (ii) will mark
conspicuously any and all chattel paper included in the Collateral and its Books
and Records pertaining to the Collateral with a legend, in form and substance
reasonably satisfactory to Secured Party indicating that such chattel paper or
Collateral is subject to the security interest granted by this Security
Agreement; and (iii) will, in the event any Account, General Intangible or
Related Right is evidenced by a note or other instrument with a face amount in
excess of $10,000, transfer, deliver and assign to Secured Party such note or
other instrument duly endorsed and accompanied by duly executed instruments of
transfer and assignment, all in form and substance reasonably satisfactory to
Secured Party, to be held by Secured Party as Collateral under this Security
Agreement.

 

Section 4.05       Filing Reproductions. At the option of Secured Party, a
carbon, photographic or other reproduction of this Security Agreement or of a
financing statement covering the Collateral shall be sufficient as a financing
statement and may be filed as a financing statement.

 

Section 4.06       [Reserved].

 

Section 4.07       Compromise of Collateral. Debtor will not adjust, settle,
compromise, release (wholly or partially) any account debtor or obligor with
respect to, or allow any credit (other than proceeds subject to Section 4.09(c)
hereof) or discount with respect to any of the Collateral without the prior
written consent of Secured Party, except in the ordinary course of business.

 

Section 4.08       Account Obligations. Debtor will duly perform or cause to be
performed all obligations of Debtor with respect to the goods or services, the
sale or lease or rendition of which gave rise or will give rise to each Account
or Instrument.

 

Section 4.09       Collection and Enforcement of Accounts, General Intangibles
and Related Rights.

 

(a)               Except as otherwise provided in Section 4.09(b) hereof, Debtor
shall continue to collect, at its own expense, all amounts due or to become due
to Debtor with respect to the Accounts, General Intangibles, Instruments and
Related Rights in accordance with the provisions of the Agreement. In connection
with such collections, Debtor may take (and, following the occurrence and during
the continuation of an Event of Default, at Secured Party’s direction, shall
take) such action as Debtor or Secured Party may deem necessary or advisable to
enforce collection of the Accounts, General Intangibles and Related Rights.

 

 

 

 7 

 

 

(b)               Notwithstanding the provisions of Section 4.09(a) hereof,
Secured Party shall have the right at any time and from time to time, whether
with or without written notice to Debtor of its intention to do so, following
the occurrence and during the continuation of an Event of Default, to contact
account debtors or obligors under any or all of the Accounts, General
Intangibles, Instruments or Related Rights in order to verify information about
Debtor’s accounts, to notify such account debtors or obligors of the assignment
and security interest of Secured Party in such Accounts, General Intangibles,
Instruments or Related Rights and to direct such account debtors or obligors to
make payment of all amounts due or to become due Debtor thereunder directly to
Secured Party. Upon exercising such right following the occurrence and during
the continuation of an Event of Default, Secured Party may additionally, at the
expense of Debtor, enforce collection of any or all of the Accounts, General
Intangibles, Instruments and Related Rights and may adjust, settle or compromise
the amount or payment thereof, in the same manner and to the same extent as
Debtor might have done.

 

(c)               During the term of the Agreement, (i) all amounts and proceeds
(including chattel paper, notes and instruments) received by Debtor in respect
of the Accounts, General Intangibles, Instruments and Related Rights (1)
collected and deposited in a deposit account of Debtor as required under the
Agreement; and (ii) upon notice by Secured Party to Debtor that Secured Party
either intends to exercise the rights and remedies granted in Section 4.09(b)
hereof following the occurrence and during the continuation of an Event of
Default or that it has so exercised one or more of the rights or remedies
granted to it in Section 4.09(b) hereof, as the case may be (it being understood
and agreed that the foregoing shall not in any fashion require the Secured Party
to give notice of its intent to exercise, or its exercise of, the right and
remedies granted to it in Section 4.09(b) hereof), Debtor shall forthwith
deliver to Secured Party, to be maintained under the control of Secured Party,
the Books and Records relating to the Accounts, the General Intangibles, the
Instruments and the Related Rights for the purpose of enabling Secured Party to
exercise its rights and remedies under this Security Agreement.

 

Section 4.10       Proceeds. To the extent required under the Agreement, Debtor
will deliver to Secured Party promptly upon receipt, all proceeds received by
Debtor from the sale or other disposition of the Collateral in the exact form in
which they are received, or in such other form as Secured Party may from time to
time direct. To evidence Secured Party’s rights in this regard, following the
occurrence and during the continuation of an Event of Default, Debtor will
assign or endorse proceeds to Secured Party as Secured Party requests. Upon
request of Secured Party following the occurrence and during the continuation of
an Event of Default, Debtor will notify obligors on all of the Collateral to
make payments directly to Secured Party, and Secured Party may endorse as
Debtor’s agent any checks, instruments, chattel paper or other documents
connected with the Collateral, take control of proceeds of the Collateral and
may hold the proceeds as part of the Collateral and may use cash proceeds to
reduce any part of the Indebtedness, or otherwise, and take any action necessary
to obtain, preserve and enforce the security interests and liens granted
hereunder and maintain and preserve the Collateral.

 

 

 

 8 

 

 

 

ARTICLE V
RIGHTS AND REMEDIES

 

Section 5.01       With Respect to Collateral. Following the occurrence and
during the continuation of an Event of Default, Secured Party is hereby fully
authorized and empowered (without necessity of any further consent or
authorization from Debtor) and the right is expressly granted to Secured Party,
and Debtor hereby constitutes, irrevocably appoints and makes Secured Party
Debtor’s true and lawful attorney-in-fact and agent for Debtor and in Debtor’s
name, place and stead, which appointment is coupled with an interest in the
Collateral, with full power of substitution, in Secured Party’s name or Debtor’s
name or otherwise, for Secured Party’s sole use and benefit, but at Debtor’s
cost and expense, to exercise without notice, all or any of the following powers
at any time with respect to all or any of the Collateral:

 

(a)               to demand, sue for, collect, receive and give acquittance for
any and all monies due or to become due by virtue thereof and otherwise deal
with proceeds;

 

(b)               to receive, take, endorse, assign and deliver any and all
checks, notes, drafts, documents and other negotiable and nonnegotiable
instruments and chattel paper taken or received by Secured Party in connection
therewith;

 

(c)               to settle, compromise, compound, prosecute or defend any
action or proceeding with respect thereto;

 

(d)               to sell, transfer, assign or otherwise deal in or with the
same or the proceeds or avails thereof or the relative goods, as fully and
effectually as if Secured Party were the absolute owner thereof;

 

(e)               to extend the time of payment of any or all thereof and to
grant waivers and make any allowance or other adjustment with reference thereto;
and

 

(f)                to enter any post office box and take all items therefrom, to
open the same and, after taking all remittances, to return any remaining items
to Debtor and to change any post office box to any address or post office box
Secured Party chooses;

 

provided, however, that Secured Party shall be under no obligation or duty to
exercise any of the powers hereby conferred upon it and shall be without
liability for any act or failure to act in connection with the collection of, or
the preservation of any rights under, any Collateral.

 

Section 5.02       [Reserved].

 

Section 5.03       Default, Events. At the option of Secured Party and without
necessity of demand or notice, all or any part of the Indebtedness shall
immediately become due and payable irrespective of any agreed maturity and any
obligation of Secured Party for further financial accommodation shall terminate
upon the happening of any “Event of Default” under the Agreement.

 

 

 

 

 9 

 

 

Section 5.04       Default, Remedies. If all or any part of the Indebtedness
shall become due and payable as specified in Section 5.03 hereof following the
occurrence and during the continuation of an Event of Default, Secured Party may
then, or at any time thereafter apply, set off, sell in one or more sales, lease
or otherwise dispose of, any or all of the Collateral, in its then condition or
following any commercially reasonable preparation or processing, in such order
as Secured Party may elect, and any such sale may be made either at public or
private sale at its place of business or elsewhere, either for cash or upon
credit or for future delivery, at such price as Secured Party may reasonably
deem fair, and Secured Party may be the purchaser of any or all Collateral so
sold and hold the same thereafter in its own right free from any claim of Debtor
or right of redemption. No such purchase or holding by Secured Party shall be
deemed a retention by Secured Party in satisfaction of the Indebtedness. All
demands, notices and advertisements, and the presentment of property at sale,
are hereby waived. If, notwithstanding the foregoing provisions, any applicable
provision of the Code or other law requires Secured Party to give reasonable
notice of any such sale or disposition or other action, Debtor agrees that TEN
(10) days’ prior written notice shall constitute reasonable notice. Secured
Party may require Debtor to assemble the Collateral and make it available to
Secured Party at a place designated by Secured Party which is reasonably
convenient to Secured Party and Debtor. Any sale hereunder may be conducted by
an auctioneer or any officer or agent of Secured Party.

 

Section 5.05       Proceeds. The proceeds of any sale or other disposition of
the Collateral and all sums received or collected by Secured Party from or on
account of the Collateral shall be applied by Secured Party in the manner set
forth in Section 9.615 of the Code as presently in effect.

 

Section 5.06       Deficiency. Debtor shall remain liable to Secured Party for
any Indebtedness, advances, costs, charges and expenses, together with interest
thereon remaining unpaid and upon demand following the occurrence and during the
continuation of an Event of Default, shall pay the same immediately to Secured
Party at Secured Party’s offices.

 

Section 5.07       Secured Party’s Duties. The powers and remedies conferred
upon Secured Party by this Security Agreement are solely to protect its interest
in the Collateral and shall not impose any duty upon Secured Party to exercise
any such power or remedy except as required by applicable law. Secured Party
shall be under no duty whatsoever to make or give any presentment, demand for
performance, notice of nonperformance, protest, notice of protest, notice of
dishonor, or other notice or demand in connection with the Collateral or the
Indebtedness, or to take any steps necessary to preserve any rights against
prior parties. Secured Party shall not be liable for failure to collect or
realize upon any or all of the Indebtedness or Collateral, or for any delay in
so doing, nor shall Secured Party be under any duty to take any action
whatsoever with regard thereto. Secured Party shall use reasonable care in the
custody and preservation of any Collateral in its possession but need not take
any steps to keep the Collateral identifiable. Secured Party shall have no duty
to comply with any recording, filing or other legal requirements necessary to
establish or maintain the validity, priority or enforceability of, or Secured
Party’s rights in or to, any of the Collateral.

 

 

 

 10 

 

 

Section 5.08       Secured Party’s Actions. Debtor waives any right to require
Secured Party to proceed against any Person, exhaust any Collateral, or have any
Other Liable Party joined with Debtor in any suit arising out of the
Indebtedness or this Security Agreement or pursue any other remedy in Secured
Party’s power; waives any and all notice of acceptance of this Security
Agreement or of creation, modification, renewal or extension for any period of
any of the Indebtedness from time to time; and waives any defense arising by
reason of any disability or other defense of Debtor or of any Other Liable
Party, or by reason of the cessation from any cause whatsoever of the liability
of Debtor or of any Other Liable Party. All dealings between Debtor and Secured
Party, whether or not resulting in the creation of Indebtedness, shall
conclusively be presumed to have been had or consummated in reliance upon this
Agreement. Until all Indebtedness shall have been indefeasibly paid in full,
Debtor shall not have any right to subrogation, and Debtor waives any right to
enforce any remedy which Secured Party now has or may hereafter have against
Debtor or any Other Liable Party and waives any benefit of and any right to
participate in any Collateral or security whatsoever now or hereafter held by
Secured Party. Debtor authorizes Secured Party, without notice or demand and
without any reservation of rights against Debtor and without affecting Debtor’s
liability hereunder or on the Indebtedness, from time to time to (a) take and
hold any other Property as collateral, other than the Collateral, for the
payment of any or all of the Indebtedness, and exchange, enforce, waive and
release any or all of the Collateral or such other Property; (b) following the
occurrence and during the continuation of an Event of Default apply the
Collateral or such other Property and direct the order or manner of sale thereof
as Secured Party in its discretion may determine; (c) renew and/or extend for
any period, accelerate, modify, compromise, settle or release the obligation of
Debtor or any Other Liable Party with respect to any or all of the Indebtedness
or Collateral; and (d) release or substitute Debtor or any Other Liable Party.
“Other Liable Party” shall mean any Person other than Debtor, primarily or
secondarily liable for any of the Indebtedness or who grants Secured Party a
lien upon and/or a security interest on any Property as security for any of the
Indebtedness.

 

Section 5.09       [Reserved].

 

Section 5.10       Cumulative Security. The execution and delivery of this
Security Agreement in no manner shall impair or affect any other security (by
endorsement or otherwise) for the payment of the Indebtedness. No security taken
hereafter as security for payment of the Indebtedness shall impair in any manner
or affect this Security Agreement. All such present and future additional
security is to be considered as cumulative security.

 

Section 5.11       Continuing Agreement. This is a continuing agreement and all
the rights, powers and remedies of Secured Party hereunder shall continue to
exist until the Indebtedness (other than contingent indemnification obligations)
is indefeasibly paid in full as the same becomes due and payable; until Secured
Party has no further obligation to advance monies to Debtor or any Other Liable
Party. Furthermore, it is contemplated by the parties hereto that there may be
times when no Indebtedness is owing; but notwithstanding such occurrence, this
Security Agreement shall remain valid and shall be in full force and effect as
to subsequent Indebtedness; provided that Secured Party has not executed a
written termination statement. Otherwise this Security Agreement shall continue
irrespective of the fact that the personal liability of any Other Liable Party
may have ceased, and notwithstanding the bankruptcy or incapacity of Debtor or
the death, incapacity or bankruptcy of any Other Liable Party or any other event
or proceeding affecting Debtor or Other Liable Party.

 

 

 

 

 11 

 

 

Section 5.12       Cumulative Rights. The rights, powers and remedies of Secured
Party hereunder shall be in addition to all rights, powers and remedies given by
statute or rule of law and are cumulative. The exercise of any one or more of
the rights, powers and remedies provided herein shall not be construed as a
waiver of any of the other rights, powers and remedies of Secured Party.
Furthermore, regardless of whether or not the Uniform Commercial Code is in
effect in the jurisdiction where such rights, powers and remedies are asserted,
Secured Party shall have the rights, powers and remedies of a secured party
under the Code, as amended.

 

Section 5.13       Exercise of Right. Time shall be of the essence for the
performance of any act under this Security Agreement or the Indebtedness by
Debtor or any Other Liable Party, but neither Secured Party’s acceptance of
partial or delinquent payment nor any forbearance, failure or delay by Secured
Party in exercising any right, power or remedy shall be deemed a waiver of any
obligation of Debtor or any Other Liable Party or of any right, power or remedy
of Secured Party or preclude any other or further exercise thereof; and no
single or partial exercise of any right, power or remedy shall preclude any
other or further exercise thereof, or of the exercise of any other right, power
or remedy.

 

Section 5.14       Remedy and Waiver. Secured Party may remedy any default and
may waive any default without waiving the default remedied or waiving any prior
or subsequent default.

 

Section 5.15       Non-Judicial Remedies. Secured Party may enforce its rights
hereunder without resort to prior judicial process or judicial hearing, and
Debtor expressly waives, renounces and knowingly relinquishes any and all legal
rights which might otherwise require Secured Party to enforce its rights by
judicial process. In so providing for non-judicial remedies, Debtor recognizes
and concedes that such remedies are consistent with the usage of the trade, are
responsive to commercial necessity and are the result of bargaining at arm’s
length. Nothing herein is intended to prevent Secured Party or Debtor from
resorting to judicial process at either party’s option.

 

ARTICLE VI
MISCELLANEOUS

 

Section 6.01       Debtor. The term “Debtor” as used throughout this Security
Agreement shall include the respective successors, legal representatives, heirs
and assigns of Debtor.

 

Section 6.02       Preservation of Liability. Neither this Security Agreement
nor the exercise by Secured Party (or any failure to so exercise) of any right,
power or remedy conferred herein or by law shall be construed as relieving any
Person liable on the Indebtedness from full liability on the Indebtedness and
for any deficiency thereon.

 

Section 6.03       Notices. Any notice or demand to Debtor under this Security
Agreement or in connection with this Security Agreement may be given and shall
conclusively be deemed and considered to have been given and received upon the
deposit thereof, in writing, duly stamped and addressed to Debtor at the address
of Debtor appearing on the records of the Secured Party, in the U.S. Mail, but
actual notice, however given or received, shall always be effective.

 

Section 6.04       Construction. This Security Agreement has been made in and
the security interest granted hereby is granted in and both shall be governed by
the laws of the State of Texas (except to the extent that the laws of any other
jurisdiction govern the perfection and priority of the security interest granted
hereby) and of the United States of America, as applicable, in all respects,
including matters of construction, validity, enforcement and performance.

 

 

 

 12 

 

 

Section 6.05       Amendment and Waiver. This Security Agreement may not be
amended, altered, or modified (nor may any of its terms be waived) except in a
writing duly signed by an authorized officer of Secured Party and by Debtor.

 

Section 6.06       Invalidity. If any provision of this Security Agreement is
rendered or declared invalid, illegal or unenforceable by reason of any existing
or subsequently enacted legislation or by a judicial decision which shall have
become final, Debtor and Secured Party shall promptly meet and negotiate
substitute provisions for those rendered invalid, illegal or unenforceable, but
all of the remaining provisions shall remain in full force and effect.

 

Section 6.07       Successors and Assigns. The covenants, representations,
warranties and agreements herein set forth shall be binding upon Debtor and
shall inure to the benefit of Secured Party, its successors and assigns.

 

Section 6.08       Survival of Agreements. All representations and warranties of
Debtor herein, and all covenants and agreements herein not fully performed
before the effective date of this Security Agreement, shall survive such date.

 

Section 6.09       Titles of Articles and Sections. All titles or headings to
articles, sections or other divisions of this Security Agreement are only for
the convenience of the parties and shall not be construed to have any effect or
meaning with respect to the other content of such articles, sections or other
divisions, such other content being controlling as to the agreement between the
parties hereto.

 

Section 6.10       Exhibits. All exhibits to this Security Agreement are
incorporated herein by reference for all purposes.

 

Section 6.11       Conflict of Terms. If any provision contained in this
Security Agreement is in direct conflict with, or inconsistent with, any
provision of the Agreement, the provision in the Agreement shall govern and
control.

 

Section 6.12       Disclosure Relating to Collateral Protection Insurance. As of
the date of this disclosure, Debtor and Secured Party have or shall have
consummated a transaction pursuant to which Secured Party has agreed to make
Loans to Debtor. Debtor has pledged Collateral to secure the Indebtedness in
accordance with the Security Instruments. This notice relates to Debtor’s
obligations with respect to insuring the Collateral against damage. To this end,
Debtor must do the following:

 

(a)               Keep the Collateral insured against damage as required in the
Agreement;

 

(b)               Purchase the insurance from an insurer that is authorized to
do business in Texas or an eligible surplus lines insurer;

 

(c)               Name Secured Party the person to be paid under the policy in
the event of loss; and

 

 

 

 13 

 

 

(d)               Deliver to Secured Party a copy of the policy and proof of the
payment of premiums.

 

Secured Party may obtain collateral protection insurance on behalf of Debtor at
Debtor’s expense if Debtor fails to meet any of the foregoing requirements.

 

Section 6.13       Multiple Originals. This Security Agreement may be executed
in any number of counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument. This
Security Agreement may be executed by facsimile or “pdf” and each party has the
right to rely upon a facsimile or “pdf ‘ counterpart of this Security Agreement
signed by the other party to the same extent as if such party had received an
original counterpart.

 

Section 6.14       Intercreditor Agreement. Notwithstanding anything in the
Security Instruments to the contrary, the liens and security interests granted
to Lender pursuant to this Security Agreement and the exercise of any right or
remedy Lender hereunder are subject to the provisions of that certain
Intercreditor Agreement dated as of the date hereof, among Lender, WILMINGTON
TRUST, NATIONAL ASSOCIATION, as agent, and Debtor (as the same may be amended,
supplemented, modified or replaced from time to time) (the “Intercreditor
Agreement”). In the event of any conflict between the terms of the Intercreditor
Agreement and this Security Agreement, the terms of the Intercreditor Agreement
shall govern.

 

 

REMAINDER OF PAGE LEFT INTENTIONALLY BLANK

 

 

 

 

 

 

 

 14 

 

 

IN WITNESS WHEREOF, Debtor has executed this Security Agreement as of the date
set forth hereinabove.

 

DEBTOR:

 

VINTAGE STOCK, INC.

 

/s/ Rodney Spriggs                           

Rodney Spriggs

CEO and President

 

 

ACCEPTED and acknowledged by:

 

 

SECURED PARTY:

 

TEXAS CAPITAL BANK, NATIONAL ASSOCIATION

 

By: ___________________________

Name: _________________________

Title: __________________________

 

 

 

 

 

 

 

 

 

 

 

 

 

 15 

 

 

EXHIBIT A

 

GOODS COVERED BY CERTIFICATE OF TITLE

 

 

 

NONE.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 16