exv4w31






Exhibit 4.31




GENERAL SECURITY AGREEMENT




	 	 	 
	DATED AS OF:

	 	September 12, 2007
	 
	 	 
	DEBTOR:

	 	Corgi USA, Inc., a Delaware corporation, (“Client”)
	 

	 	201 North Civic Drive, Suite 239, Walnut Creek, CA 94596, and
	 
	 	 
	SECURED PARTY:

	 	GATEWAY TRADE FINANCE, LLC.
	 

	 	801 West Riverside, Suite 444
	 

	 	Spokane, Washington 99201






1. GRANT OF SECURITY INTEREST




Debtor hereby grants to Secured Party a continuing security interest in the following described
property of Debtor, and any additions, attachments and accessions thereto and all products and
proceeds thereof, together with all guarantees, liens and securities in connection therewith
(collectively, the “Collateral”):




All assets, including all inventory, accounts, accounts receivable, chattel paper,
documents, instruments, contract rights, insurance proceeds, trademarks, tradenames and
other general intangibles, furniture, fixtures, equipment, and all proceeds thereof, now
owned and hereafter acquired.



2. OBLIGATIONS SECURED



2.1 The security interest granted hereby is to secure payment and performance of all liabilities
and obligations of Debtor to Secured Party of every kind and description, direct or indirect,
absolute or contingent, due or to become due, now existing or hereafter arising, including but not
limited to indebtedness and obligations with respect to Gateway Trade Finance, LLC, Inc.
Agreements, Addenda thereto, notes, advances, letters of credit, acceptances, foreign exchange
contracts, suretyships, guaranties, endorsements, and checks drawn with non-sufficient funds,
together with any and all extensions, renewals and modifications thereof (collectively,
“Obligations”), and whether or not any Obligation is related to any other Obligation by class or
kind or is contemplated by the parties at the time this Security Agreement is executed.



2.2 In addition to the provisions of Section 2.1, the Obligations secured hereunder shall include
all amounts payable by Debtor to Secured Party under this Security Agreement and all amounts paid
or liabilities incurred by Secured Party in connection with protecting or enforcing its rights
under this Security Agreement, including but not limited to amounts described in Sections 12, 13,
16 and 20.8, and interest on any such amounts at a per annum rate which is eight percentage points
in excess of the Prime Rate, as such rate may vary from time to time. As used herein, “Prime Rate”
means the rate of interest that the Wall Street Journal from time to time identifies as the
“Prime Rate” in its “Money Rates” section, and is not necessarily the lowest rate a bank may offer
to any borrower or group of borrowers.



3. PURCHASE MONEY SECURITY INTEREST



If Debtor at any time acquires any Collateral with the proceeds of any advance from Secured Party,
Debtor authorizes Secured Party to disburse proceeds in the amount of the purchase price of such
Collateral directly to, or Debtor shall remit such proceeds directly to, the seller of such
Collateral. Secured Party shall have both a purchase money security interest and a non-purchase
money security interest under the Uniform Commercial Code in such Collateral.



4. TITLE; ADVERSE LIENS



Debtor warrants that Debtor is and shall be the lawful owner of the Collateral, free of all adverse
liens, encumbrances and security interests except as previously disclosed in writing to Secured
Party, with the right to sell, assign, pledge, transfer, and grant a security interest therein.
Except as expressly permitted hereunder, or under the Agreement dated as of September 12, 2007,
between Debtor and Secured Party (hereinafter referred to as the “GATEWAY Agreement”) Debtor shall
not sell, assign, pledge, transfer or grant a security interest in any of the Collateral to any
person other than Secured Party. Debtor shall defend all Collateral against the claims and demands
of all persons.



5. CORPORATE STATUS AND AUTHORITY



If a corporation, (i) Debtor is duly organized and existing under the laws of Delaware and
is duly qualified and in good standing in every other state or jurisdiction in which it is doing
business; and (ii) the execution, delivery, and performance hereof are within Debtor’s corporate
powers and have been duly authorized, and are not in contravention of law or the terms of Debtor’s
charter, bylaws or other incorporation papers, or of any indenture, agreement or undertaking to
which Debtor is a party or by which it is bound.



6. PERMITS AND LICENSES



Debtor has and shall keep in force all licenses, permits and authorizations necessary to the proper
conduct of its business in any state or jurisdiction in which Debtor conducts business, and shall
promptly obtain all such additional licenses, permits and authorizations as hereafter may become
necessary for such purposes.



7. PLACES OF BUSINESS AND CERTAIN LOCATIONS



The street address of Debtor’s chief executive office from which Debtor manages the main part of
its operation, keeps all Collateral, and all records concerning accounts, contract rights, and
chattel paper is: shown above. If Debtor (i) has one or more places of business at any
location other than its chief executive office or (ii) keeps Collateral or records concerning
accounts, contract rights and chattel paper at any location other than its chief executive office,
such other locations include:



8. CHANGE OF NAME, STRUCTURE AND LOCATION



Without the prior written consent of Secured Party, Debtor shall not (i) merge or consolidate with
or into any person, or (ii) remove any Collateral from the state(s) or jurisdiction(s) indicated in
this Security Agreement. Without limiting the foregoing, Debtor shall give Secured Party at least
30 days prior written notice of any change of Debtor’s name, identity or corporate structure and
any addition to, change in or discontinuance of its mailing address, its business locations, and
any locations concerning the Collateral as indicated in this Security Agreement.



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9. IDENTIFICATION AND DELIVERY OF COLLATERAL; COLLATERAL REPORTS



Debtor shall mark and identify all Collateral and all books and records pertaining to the
Collateral as required by Secured Party. Debtor shall deliver to Secured Party at Secured Party’s
request, all original instruments, documents and title documents, leases, contracts, securities,
licenses, records, and other chattel paper (together with any related certificates of title)
included in the Collateral, each assigned or endorsed as Secured Party may require, and all
original and duplicate invoices representing sales and delivery of goods or performance of services
(each of which shall bear and assignment stamp acceptable to Secured Party) together with evidence
of delivery as may be required by Secured Party Debtor shall deliver to Secured Party at Secured
Party’s request such reports concerning the Collateral on such dates and in such detail as Secured
Party from time to time may require. The value of all inventory reflected on the reports shall be
the lesser of cost or market value.



10. FINANCIAL AND OTHER INFORMATION



Debtor shall furnish to Secured Party from time to time such financial statements and other
financial data as Secured Party may require, each in form and detail acceptable to Secured Party.
Debtor warrants that all information concerning the Collateral, all financial statements, balance
sheets and other financial data, and all other information furnished by Debtor to Secured Party
are, or at the time furnished shall be, accurate and correct in all material respects and as
complete as necessary to give Secured Party true and accurate knowledge of the subject matter. All
financial information furnished by Debtor to Secured Party shall be prepared in accordance with
generally accepted accounting principles consistently applied.



11. INSPECTIONS



Debtor shall at all reasonable times allow Secured Party by or through its nominees (i) to examine
and inspect the Collateral; (ii) to verify the Collateral directly with applicable third parties
such as account debtors or by any other methods; and (iii) to examine, inspect and take extracts
from Debtor’s books and records.



12. USE AND ADVERSE LIENS



Debtor shall not use or permit the Collateral to be used in violation of any law or regulation,
waste or destroy the Collateral, or permit anything to be done that may impair the value of the
Collateral. Debtor shall promptly pay when due all taxes and assessments on the Collateral, or for
its use or operation, and shall keep the Collateral free from any adverse lien, security interest
or encumbrance. At its option, Secured Party may discharge taxes, liens, security interests or
encumbrances at any time levied or placed on the Collateral and may pay for the maintenance and
preservation of the Collateral, and Debtor shall pay to Secured Party on demand all such amounts.



13. INSURANCE



Unless expressly waived by Secured Party, Debtor shall provide, maintain and deliver to Secured
Party policies insuring the Collateral against loss or damage by such risks, in such form and
amount, for such periods and by such companies as may be satisfactory to Secured Party. All
policies of insurance shall include a standard loss payable endorsement and such other endorsements
as Secured Party may request. If Debtor fails to obtain such insurance, Secured Party shall have
the right, but not the obligation, to obtain such insurance and Debtor shall pay to Secured Party
on demand the cost thereof. Secured Party is hereby appointed Debtor’s attorney-in-fact to obtain,
adjust, settle and cancel such insurance in Secured Party’s sole discretion. Debtor hereby assigns
to Secured Party all rights to receive proceeds of insurance to the full extent of the amount of
all Obligations secured hereunder, directs any insurer to pay all proceeds directly to Secured
Party, and authorizes Secured Party to endorse any check for proceeds.



14. POSSESSION, USE AND SALE OF COLLATERAL



Until default, Debtor may retain possession of all Collateral composed of equipment and fixtures
and may use them in any lawful manner not inconsistent with the terms and conditions of this
Security Agreement. Debtor shall not sell, lease, transfer or otherwise dispose of any interest in
any such Collateral without the prior written consent of Secured Party. Until default, Debtor may
use any Collateral composed of inventory in any lawful manner not inconsistent with the terms and
conditions of this Security Agreement and the GATEWAY Agreement, and may consume any raw materials
and supplies comprising such Collateral as may be necessary to carry on Debtor’s business. Debtor
may also sell such Collateral but only in the ordinary course of business. A sale in the ordinary
course of business does not include a transfer in bulk or as security for or in total or partial
satisfaction of a money debt.



15. COLLECTION OF ACCOUNTS



Subject to the following sentence, Debtor shall make collections from the account debtors on all
Collateral composed of accounts, chattel paper and general intangibles as directed by Secured
Party. Secured Party may before or after any default hereunder without prior notice to Debtor, and
Debtor shall at Secured Party’s request and in such form as Secured Party may require, notify the
account debtors that the Collateral has been assigned to and payment thereon shall be made directly
to Secured Party.



16. FINANCING STATEMENTS; FURTHER ASSURANCE



At Secured Party’s request, Debtor shall execute and pay the costs of filing one or more financing
statements and any other documents required by the Uniform Commercial Code or other applicable laws
or regulations. A carbon, photographic or other reproduction of this Security Agreement or of any
related financing statement shall be sufficient as a financing statement. At the request of
Secured Party, Debtor shall do, make, execute and deliver all such additional and further acts,
deeds, assurances and instruments as Secured Party from time to time may require to more completely
vest in and assure to Secured Party its rights hereunder and in or to the Collateral, all at
Debtor’s expense. Secured Party hereby is appointed Debtor’s attorney-in-fact with power to do all
acts and things which Secured Party may deem necessary to perfect and continue perfected its
security interest in the Collateral, and to protect the Collateral. Without the prior written
consent of Secured Party, Debtor shall not grant a security interest in the Collateral to any
person other than Secured Party, and shall not allow any financing statement or other security
instrument covering Collateral or its proceeds to be on file in any public office.



17. EVENTS OF DEFAULT



Time is of the essence of this Security Agreement. The occurrence of any of the following shall,
at the discretion of Secured Party, be an Event of Default hereunder:



17.1 Default in the payment or performance of any Obligation, in any covenant or liability
contained or referred to herein, in the Agreement and/or Addenda thereto, in any note, or in any
other agreement between Debtor and Secured Party;



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17.2 Any warranty, representation or statement (including but not limited to financial statements)
made or furnished to Secured Party by or on behalf of Debtor or any guarantor of any of the
Obligations (“Guarantor”) proves to have been false in any material respect when made or furnished;



17.3 Any indebtedness of Debtor under any note, indenture, agreement, undertaking or obligation of
any kind to any person, including Secured Party, becomes due by acceleration or otherwise and is
not paid;



17.4 Default by Debtor under any lease or other arrangement whereby Debtor occupies, or stores
Collateral in, any premises owned by any person other than Debtor;



17.5 Any default under any security agreement or other instrument executed by any person which
secures any of the Obligations or under any guaranty of any Guarantor:



17.6 Any guaranty of any Guarantor shall cease to be, or shall be asserted by any person not to be,
in full force and effect;



17.7 Loss, theft, damage, destruction, sale (except as expressly permitted under this Security
Agreement) or encumbrance to or of any of the Collateral, or the making of any levy, seizure or
attachment thereof or thereon;



17.8 Death, dissolution, termination of existence, insolvency, business failure, appointment of a
receiver for any part of the property of, assignment for the benefit of creditors by, entry of any
judgment against or the commencement of any proceeding under any bankruptcy or insolvency laws by
or against, Debtor, and Guarantor or any surety for Debtor, or failure of Debtor, any Guarantor or
any such surety to provide Secured Party with financial information promptly when requested;



17.9 Sale, transfer, or other disposition of all or a substantial part of the assets of Debtor or
any Guarantor other than in the ordinary course of business;



17.10 Interruption or cessation of a material portion of Debtor’s ordinary business operations;



17.11 Secured Party in good faith believes the Collateral inadequate, unsafe, or in danger of misuse;



17.12 Secured Party deems itself insecure with respect to repayment of any of the Obligations.



18. RIGHTS AND REMEDIES



Upon the occurrence of any Event of Default and at any time thereafter, Secured Party at its option
and not withstanding any time or credit allowed by any instrument evidencing any Obligation or
related thereto, may without notice declare any and all Obligations immediately due and payable and
terminate any commitment to extend credit to Debtor. In such event, Secured Party shall have all
the rights and remedies provided herein and in all other instruments or writings, executed by
Debtor or any other person in connection with the Obligations, and as otherwise provided by law.
Without limiting the foregoing, Secured Party may do any one or more of the following: (i) enter
upon any premises where the Collateral may be located and remove there from the Collateral, and
with respect to accounts, may remove any records which Secured Party deems necessary for collection
thereof; (ii) require Debtor to assemble the Collateral and make it available to Secured Party at a
place designated by Secured Party; and (iii) establish a field warehouse under the control of
Secured Party on Debtor’s premises and place the Collateral therein. Secured Party in its sole
discretion, without notice and without bringing suit on the Obligations, may apply for and secure
appointment of a receiver, receiver-manager, or receiver and manager (“receiver”) for the
undersigned to take possession of Debtor’s business and the Collateral, and the incomes, rents and
proceeds thereof. Debtor hereby expressly waives any requirement that Secured Party or the
receiver post a bond upon such appointment. Any receiver appointed by Secured Party, so far as
concerns responsibility for its acts, shall he deemed the agent of the undersigned and not of
Secured Party. All Secured Party’s rights and remedies, whether evidenced hereby or by any other
agreement, instrument or writing shall be cumulative and may be exercised singularly or
concurrently.



19. ADDITIONAL SECURITY AND COLLATERAL AGREEMENT




As additional security and collateral for the Obligations, Debtor hereby grants to Secured Party a
security interest in all instruments, documents, notes, bills of exchange, title or documents of
title, policies and certificates of insurance, securities, stock certificates, bonds, goods,
accounts receivable, deposits, choses in action, chattel paper, cash, property and the proceeds
thereof (whether or not the same are Collateral hereunder) owned by Debtor or in which Debtor has
an interest, which now or hereafter are at any time in the possession or control of Secured Party
at any of its offices or in transit by mail or carrier to or from Secured Party or in the
possession of any third party acting in Secured Party’s behalf, without regard to whether Secured
Party received the same in pledge, for safekeeping, as agent for collection or transmission or
otherwise or whether Secured Party has conditionally released the same, shall constitute additional
security and collateral for the Obligations and may at any time be collected, negotiated, sold,
assigned, set off or applied against any Obligations which are then due whether by acceleration or
otherwise.



20. GENERAL




20.1 Nothing contained in this Security Agreement shall be construed to obligate Secured Party to
extend credit to Debtor, or enter into any foreign exchange contracts or other contracts of any
nature with Debtor.



20.2 Without notice to Debtor and without diminishing or affecting Secured Party’s rights or
Debtor’s obligations hereunder, Secured Party may deal in any manner with any person who at any
time is liable for, or provides and real or personal property collateral for (i) any of the
Obligations; or (ii) any obligations constituting Collateral. Without limiting the foregoing,
Secured Party may, in its sole discretion: (a) provide secured or unsecured credit to Debtor;
(b) agree to any number of waivers, modifications, extensions and renewals of any length of any
Obligations and of any obligations constituting Collateral; (c) impair, release (with or without
substitution of new collateral) and fail to perfect a security interest in, any collateral provided
by any person, whether with respect to the Obligations or any obligations constituting Collateral;
(d) sue, fail to sue, agree not to sue, release, and settle or compromise with, any person.



20.3 This Security Agreement and all rights and liabilities hereunder and in and to any and all
Obligations and Collateral or other security shall inure to the benefit of Secured Party and its
successors and assigns, and shall be binding upon Debtor and its successors and assigns.



20.4 If at any time or times by assignment or otherwise Secured Party transfers any Obligations and
Collateral or other security therefore, the transferee shall become vested with Secured Party’s
rights and powers hereunder with respect to the Obligations, Collateral and other security
transferred, whether or not specifically referred to in the transfer. To the extent that Secured
Party retains any Obligations and Collateral or other security therefore, Secured Party’s rights
and powers hereunder shall continue with respect thereto.



20.5 Secured Party shall not be deemed to have waived any of Secured Party’s rights hereunder or
under any other agreement, instrument or writing signed by Debtor unless such waiver be in writing
and signed by Secured Party. No delay or omission on the part of Secured Party in exercising any
right shall operate as a waiver of such right or any other right. A waiver on any one occasion
shall not be construed as a bar or waiver of any right or remedy on any future occasion.



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20.6 Any demand upon or notice to Debtor that Secured Party may give shall be effective when served
personally or deposited in the mails or by facsimile or courier addressed to the address shown
above, such other address as may be designated in writing to Secured Party from time to time, or to
any address at which Secured Party customarily communicates with Debtor.



20.7 If there is more than one Debtor hereunder, all references to “Debtor” shall mean all or any
one or more of them.



20.8 Whether or not litigation is commenced, Debtor shall pay to Secured Party on demand any and
all costs and expenses reasonably incurred or expended by Secured Party in the repossession,
protection, storage, maintenance, and liquidation of any Collateral and other security, in the
collection or attempted collection of the Collateral and in protecting and enforcing the rights of
Secured Party hereunder, including such additional sums as any court or arbitrator(s) shall adjudge
reasonable as attorney fees, including but not limited to costs and attorney fees incurred in any
appellate proceeding, proceeding under the bankruptcy code or receivership.



20.9 This Security Agreement shall be effective when signed by Debtor and delivered to Secured
Party. Subject to Section 20.10 Whenever there is no outstanding Obligation and no commitment on
the part of Secured Party under any agreement which might give rise to an Obligation, Debtor may
terminate this Security Agreement by notice in writing delivered to Secured Party at the office of
Secured Party to which this Security Agreement was delivered. Prior to such termination, this
shall be a continuing agreement in every respect.



20.10 Even if this Security Agreement and any security interest granted herein has been terminated
in whole or in part (pursuant to Section 20.9 or otherwise), if any payment or other transfer to
Secured Party on account of any Obligation(s) is avoided or set aside under any applicable
bankruptcy, insolvency or fraudulent conveyance law or law for the relief of debtors or on any
other basis, or if Secured Party in its sole discretion consents in good faith to any such
avoidance or set aside, such Obligation(s) and the security interest granted herein shall be deemed
to continue or be reinstated to the extent of such payment or transfer.



20.11 Any disputes claims, counterclaims, and defenses, including those based on or arising from
any alleged tort (“Claims”) relating in any way to this Security Agreement, or breach thereof,
shall be settled in accordance with the laws of the State of Washington, and shall be commenced in
the city and county of Spokane, Washington. The fees and expenses of any action shall be borne by
the losing party. The prevailing party shall be entitled to recover from the losing party the
expenses of its witnesses and reasonable attorney fees. In addition, each has the right before,
during, and after any action to exercise any number of the following remedies, in any order or
concurrently: (i) setoff; (ii) self-help repossession; (iii) judicial or non judicial foreclosure
against real or personal property collateral; and (iv) provisional remedies, including injunction,
appointment of receiver, attachment, claim and delivery and replevin.



20.12 This Security Agreement shall be governed by and construed and enforced in accordance with
the laws of the State of Washington without regard to conflict of law principles. Notwithstanding,
any legal action taken in connection with this Security Agreement shall be commenced in Spokane,
Washington, and the parties agree that they will be subject to the jurisdictions of the Courts of
Spokane County, Washington.



20.13 If anything in this Security Agreement is held to be illegal, then only that portion is void
and not the entire Security Agreement.



20.14 Secured Party shall use ordinary reasonable care in the physical preservation and custody of
the Collateral in its possession, but shall have no other obligation to protect the Collateral or
its value, and in particular, Secured Party shall have no responsibility for the collection or
protection of any income on the Collateral; preservation of rights against parties thereto or
against third persons; ascertaining any maturities, calls, conversions, exchanges, offers, tenders,
or similar matters relating to any of the Collateral; nor for informing the undersigned with
respect to any of the above, whether or not Secured Party has or is deemed to have knowledge
thereof. The undersigned hereby waives presentment, protest, demand, or notice of non-payment to
the undersigned, or to any maker, endorser, surety, guarantor, or other person who is a party to
any of the Collateral, and agrees that Secured Party shall have no obligations to commence
litigation, notify debtor or take any other action to prevent the running of any statute of
limitations. Further, the undersigned waives presentment, protest, demand, or notice of
non-payment to the undersigned of any portion of the indebtedness and Secured Party may grant an
extension of time to or renew any obligation of the undersigned or any one or more of them, or
exchange or release any Collateral or other security without first obtaining the consent of the
undersigned.



21. GATEWAY AGREEMENT AND ADDENDA




This Security Agreement supports and backs the GATEWAY Agreement dated as of September 12,
2007 and all Addenda thereto.



Signed and Delivered to Secured Party as of the day and year first written above.




Corgi USA, Inc.




	 	 	 	 	 
	By:
	 	 	 	 
	Title:

	 	 

	 	 
	 

	 	 	 	 






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