Document:

Unassociated Document

AMENDED AND RESTATED SECURITY AGREEMENT

 

THIS AMENDED AND RESTATED SECURITY AGREEMENT (this “Security Agreement”) is made as of July 8, 2011 by and between Infusion Brands International, Inc. (f/k/a OmniReliant Holdings, Inc.), a Nevada corporation (“Debtor”), and Vicis Capital Master Fund (“Vicis”), a sub-trust of Vicis Capital Series Master Trust, a unit trust organized and existing under the laws of the Cayman Islands, and amends and restates that certain Security Agreement between Debtor and Vicis dated June 30, 2010 (the “June Security Agreement”).

 

R E C I T A L S

 

WHEREAS, pursuant to a Securities Purchase Agreement of even date herewith by and between Vicis and Debtor (as amended or modified from time to time, the “July Purchase Agreement”), Vicis has made an investment (the “Investment”) in 3,000,000 shares of Debtor’s Series G Convertible Preferred Stock, par value $.00001 per share (such 3,000,000 shares, together with 5,000,000 shares of such Series G Convertible Preferred Stock acquired by Vicis pursuant to that certain Securities Purchase Agreement dated June 30, 2010 by and between Debtor and Vicis (the “Purchase Agreement”), the “Preferred Shares”).

 

WHEREAS, it is a condition to Vicis making the Investment that Debtor execute and deliver to Vicis an amended and restated security agreement in the form hereof.

 

WHEREAS, this Security Agreement is the Security Agreement referred to in the Purchase Agreement and the July Purchase Agreement.

 

NOW, THEREFORE, in consideration of the Recitals and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Debtor hereby agrees with Vicis as follows:

 

ARTICLE I

DEFINITIONS

 

Capitalized terms not defined herein shall have the meaning given to them in the Purchase Agreement.  Capitalized terms not otherwise defined herein and defined in the UCC shall have, unless the context otherwise requires, the meanings set forth in the UCC as in effect on the date hereof (except that the term “document” shall only have the meaning set forth in the UCC for purposes of clause (d) of the definition of Collateral), the recitals and as follows:

 

1.1         Accounts.  “Accounts” shall mean all accounts, including without limitation all rights to payment for goods sold or services rendered that are not evidenced by instruments or chattel paper, whether or not earned by performance, and any associated rights thereto.

 

1.2         Collateral.  “Collateral” shall mean all personal properties and assets of Debtor, wherever located, whether tangible or intangible, and whether now owned or hereafter acquired or arising, including without limitation:

 

(a)           all Inventory and documents relating to Inventory;

 

  

  

  

(b)           all Accounts and documents relating to Accounts;

 

(c)           all equipment, fixtures and other goods, including without limitation machinery, furniture, vehicles and trade fixtures;

 

(d)           all general intangibles (including without limitation payment intangibles, software, customer lists, sales records and other business records, contract rights, causes of action, and licenses, permits, franchises, patents, copyrights, trademarks, and goodwill of the business in which the trademark is used, trade names, or rights to any of the foregoing), promissory notes, contract rights, chattel paper, documents, letter-of-credit rights and instruments;

 

(e)           all motor vehicles;

 

(f)           (i) all deposit accounts and (ii) all cash and cash equivalents deposited with or delivered to Vicis from time to time and pledged as additional security for the Obligations;

 

(g)           all investment property;

 

(h)           all commercial tort claims; and

 

(i)           all additions and accessions to, all spare and repair parts, special tools, equipment and replacements for, and all supporting obligations, proceeds and products of, any and all of the foregoing assets described in Sections (a) through (h), inclusive, above.

 

1.3         Event of Default.  “Event of Default” means an Event of Default (as such term is defined in the Purchase Agreement) and an Event of Default (as such term is defined in the July Purchase Agreement).

 

1.4         Inventory.  “Inventory” shall mean all inventory, including without limitation all goods held for sale, lease or demonstration or to be furnished under contracts of service, goods leased to others, trade-ins and repossessions, raw materials, work in process and materials used or consumed in Debtor’s business, including, without limitation, goods in transit, wheresoever located, whether now owned or hereafter acquired by Debtor, and shall include such property the sale or other disposition of which has given rise to Accounts and which has been returned to or repossessed or stopped in transit by Debtor.

 

1.5         Obligations.  “Obligations” shall mean (a) Debtor’s obligation to pay dividends on, and redeem at the Maturity Date, the Preferred Shares as required by the terms thereof; (b) all obligations of the Debtor associated with any renewal, extension, refinancing, or amendment to the terms of the Preferred Shares; and (c) all other debts, liabilities, obligations, covenants and agreements of Debtor contained in the Transaction Documents.

 

1.6         Person.  “Person” shall mean and include an individual, partnership, corporation, trust, unincorporated association and any unit, department or agency of government.

 

  

2

  

1.7         Security Agreement.  “Security Agreement” shall mean this Amended and Restated Security Agreement, together with the schedules attached hereto, as the same may be amended, supplemented or otherwise modified from time to time in accordance with the terms hereof.  This Security Agreement amends and restates the June Security Agreement.

 

1.8         Security Interest.  “Security Interest” shall mean the security interest of Vicis in the Collateral granted by Debtor pursuant to this Security Agreement.

 

1.9         Transaction Documents.  “Transaction Documents” shall mean (i) the Transaction Documents (as defined in the Purchase Agreement), and (ii) the Transaction Documents (as defined in the July Purchase Agreement).

 

1.10       UCC.  “UCC” shall mean the Uniform Commercial Code as adopted in the State of Nevada and in effect from time to time.

 

ARTICLE II

THE SECURITY INTEREST; REPRESENTATIONS AND WARRANTIES

 

2.1         The Security Interest.  To secure the full and complete payment and performance when due (whether at maturity, by acceleration, or otherwise) of each of the Obligations, Debtor hereby grants to Vicis a security interest in all of Debtor’s right, title and interest in and to the Collateral.

 

2.2         Representations and Warranties.  Debtor hereby represents and warrants to Vicis that:

 

(a)           The records of Debtor with respect to the Collateral are presently located only at the address(es) listed on Schedule 1 attached to this Security Agreement.

 

(b)           The Collateral is presently located only at the location(s) listed on Schedule 1 attached to this Security Agreement.

 

(c)           The chief executive office and chief place(s) of business of Debtor are presently located at the address(es) listed on Schedule 1 to this Security Agreement.

 

(d)           Debtor is a Nevada corporation and its exact legal name is set forth in the definition of “Debtor” in the introductory paragraph of this Security Agreement.  The organization identification number of Debtor is listed on Schedule 1 to this Security Agreement.

 

(e)           All of Debtor’s present patents and trademarks, if any, including those which have been registered with, or for which an application for registration has been filed in, the United States Patent and Trademark Office are listed on Schedule 2 attached to this Security Agreement.  All of Debtor’s present copyrights registered with, or for which an application for registration has been filed in, the United States Copyright Office or any similar office or agency of any state or any other country are listed on Schedule 2 attached to this Security Agreement.

 

(f)           Debtor has good title to, or valid leasehold interest in, all of the Collateral and there are no Liens on any of the Collateral except Permitted Liens.

 

  

3

  

 

2.3         Authorization to File Financing Statements.  Debtor hereby irrevocably authorizes Vicis at any time and from time to time to file in any UCC jurisdiction any initial financing statements and amendments thereto that (a) indicate the Collateral (i) as all assets of Debtor or words of similar effect, regardless of whether any particular asset comprised in the Collateral falls within the scope of Article 9 of the UCC or such other jurisdiction, or (ii) as being of an equal or lesser scope or with greater detail, and (b) contain any other information required by Part 5 of Article 9 of the UCC for the sufficiency of filing office acceptance of any financing statement or amendment, including whether Debtor is an organization, the type of organization and any state or federal organization identification number issued to Debtor.  Debtor agrees to furnish any such information to Vicis promptly upon request.  Debtor also ratifies its authorization for Vicis to have filed in any UCC jurisdiction any like initial financing statements or amendments thereto if filed prior to the date hereof.

 

ARTICLE III

AGREEMENTS OF DEBTOR

 

From and after the date of this Security Agreement, and until all of the Obligations are paid in full, Debtor shall:

 

3.1         Sale of Collateral.  Not sell, lease, transfer or otherwise dispose of Collateral or any interest therein, except as provided for in the Purchase Agreement and the July Purchase Agreement, and for sales of Inventory in the ordinary course of business.

 

3.2         Maintenance of Security Interest.

 

(a)           At the expense of Debtor, defend the Security Interest against any and all claims of any Person adverse to Vicis and take such action and execute such financing statements and other documents as Vicis may from time to time request to maintain the perfected status of the Security Interest.  Debtor shall not further encumber or grant a security interest in any of the Collateral except as provided for in the Purchase Agreement and the July Purchase Agreement.

 

(b)           Take any other action requested by Vicis to ensure the attachment, perfection and first priority (to the extent Vicis has not subordinated its interest in any of the Collateral to a third party) of, and the ability of Vicis to enforce its security interest in any and all of the Collateral including, without limitation, (i) executing, delivering and, where appropriate, filing financing statements and amendments relating thereto under the UCC, to the extent, if any, that Debtor’s signature thereon is required therefor, (ii) complying with any provision of any statute, regulation or treaty of the United States as to any Collateral if compliance with such provision is a condition to attachment, perfection or priority of, or ability of Vicis to enforce, its security interest in such Collateral, (iii) taking all actions required by any earlier versions of the UCC (to the extent applicable) or by other law, as applicable in any relevant UCC jurisdiction, or by other law as applicable in any foreign jurisdiction, and (iv) obtaining waivers from landlords where any of the tangible Collateral is located in form and substance satisfactory to Vicis.

 

  

4

  

3.3         Locations.  Give Vicis at least thirty (30) days prior written notice of Debtor’s intention to relocate the tangible Collateral (other than Inventory in transit) or any of the records relating to the Collateral from the locations listed on Schedule 1 attached to this Security Agreement, in which event Schedule 1 shall be deemed amended to include the new location.  Any additional filings or refilings requested by Vicis as a result of any such relocation in order to maintain the Security Interest in the Collateral shall be at Debtor’s expense.

 

3.4         Insurance.  Keep the Collateral consisting of tangible personal property insured against loss or damage to the Collateral under a policy or policies covering such risks as are ordinarily insured against by similar businesses, but in any event including fire, lightning, windstorm, hail, explosion, riot, riot attending a strike, civil commotion, damage from aircraft, smoke and uniform standard extended coverage and vandalism and malicious mischief endorsements, limited only as may be provided in the standard form of such endorsements at the time in use in the applicable state.  Such insurance shall be for amounts not less than the actual replacement cost of the Collateral.  No policy of insurance shall be so written that the proceeds thereof will produce less than the minimum coverage required by the preceding sentence, by reason of co-insurance provisions or otherwise, without the prior consent thereto in writing by Vicis.  Debtor will obtain lender’s loss payable endorsements on applicable insurance policies in favor of Vicis and will provide certificates of such insurance to Vicis.  Debtor shall cause each insurer to agree, by endorsement on the policy or policies or certificates of insurance issued by it or by independent instrument furnished to Vicis, that such insurer will give thirty (30) days written notice to Vicis before such policy will be altered or canceled.  No settlement of any insurance claim shall be made without Vicis’s prior consent.  In the event of any insured loss, Debtor shall promptly notify Vicis thereof in writing, and Debtor hereby authorizes and directs any insurer concerned to make payment of such loss directly to Vicis as its interest may appear.  Vicis is authorized, in the name and on behalf of Debtor, to make proof of loss and to adjust, compromise and collect, in such manner and amounts as it shall determine, all claims under all policies; and Debtor agrees to sign, on demand of Vicis, all receipts, vouchers, releases and other instruments which may be necessary or desirable in aid of this authorization.  The proceeds of any insurance from loss, theft, or damage to the Collateral shall be held in a segregated account established by Vicis and disbursed and applied at the discretion of Vicis, either in reduction of the Obligations or applied toward the repair, restoration or replacement of the Collateral.

 

3.5         Name; Legal Status.  (a) Without providing at least 30 days prior written notice to Vicis, Debtor will not change its name, its place of business or, if more than one, chief executive office, or its mailing address or organizational identification number if it has one, (b) if Debtor does not have an organizational identification number and later obtains one, Debtor shall forthwith notify Vicis of such organizational identification number, and (c) Debtor will not change its type of organization or jurisdiction of organization.

 

ARTICLE IV

RIGHTS AND REMEDIES

 

4.1         Right to Cure.  In case of failure by Debtor to procure or maintain insurance, or to pay any fees, assessments, charges or taxes arising with respect to the Collateral, Vicis shall have the right, but shall not be obligated, to effect such insurance or pay such fees, assessments, charges or taxes, as the case may be, and, in that event, the cost thereof shall be payable by Debtor to Vicis immediately upon demand, together with interest at an annual rate equal to 10% from the date of disbursement by Vicis to the date of payment by Debtor.

 

  

5

  

4.2         Rights of Parties.  Upon the occurrence and during the continuance of an Event of Default, in addition to all the rights and remedies provided in the Transaction Documents or in Article 9 of the UCC and any other applicable law, Vicis may (but is under no obligation so to do):

 

(a)           require Debtor to assemble the Collateral at a place designated by Vicis, which is reasonably convenient to the parties; and

 

(b)           take physical possession of Inventory and other tangible Collateral and of Debtor’s records pertaining to all Collateral that are necessary to properly administer and control the Collateral or the handling and collection of Collateral, and sell, lease or otherwise dispose of the Collateral in whole or in part, at public or private sale, on or off the premises of Debtor; and

 

(c)           collect any and all money due or to become due and enforce in Debtor’s name all rights with respect to the Collateral; and

 

(d)           settle, adjust or compromise any dispute with respect to any Account; and

 

(e)           receive and open mail addressed to Debtor; and

 

(f)           on behalf of Debtor, indorse checks, notes, drafts, money orders, instruments or other evidences of payment.

 

4.3         Power of Attorney.  Upon the occurrence and during the continuance of an Event of Default, Debtor does hereby constitute and appoint Vicis as Debtor’s true and lawful attorney with full power of substitution for Debtor in Debtor’s name, place and stead for the purposes of performing any obligation of Debtor under this Security Agreement and taking any action and executing any instrument which Vicis may deem necessary or advisable to perform any obligation of Debtor under this Security Agreement, which appointment is irrevocable and coupled with an interest, and shall not terminate until the Obligations are paid in full.

 

4.4         Right to Collect Accounts.  Upon the occurrence and during the continuance of an Event of Default and without limiting Debtor’s obligations under the Transaction Documents:  (a) Debtor authorizes Vicis to notify any and all debtors on the Accounts to make payment directly to Vicis (or to such place as Vicis may direct); (b) Debtor agrees, on written notice from Vicis, to deliver to Vicis promptly upon receipt thereof, in the form in which received (together with all necessary endorsements), all payments received by Debtor on account of any Account; (c) Vicis may, at its option, apply all such payments against the Obligations or remit all or part of such payments to Debtor; and (d) Vicis may take any actions in accordance with Section 4.7 of this Agreement.

 

4.5         Reasonable Notice.  Written notice, when required by law, sent in accordance with the provisions of Section 5.4 of the Purchase Agreement and given at least ten (10) business days (counting the day of sending) before the date of a proposed disposition of the Collateral shall be reasonable notice.

 

  

6

  

4.6         Limitation on Duties Regarding Collateral.  The sole duty of Vicis with respect to the custody, safekeeping and physical preservation of the Collateral in its possession, under Section 9-207 of the UCC or otherwise, shall be to deal with it in the same manner as Vicis deals with similar property for its own account.  Neither Vicis nor any of its directors, officers, employees or agents, shall be liable for failure to demand, collect or realize upon any of the Collateral or for any delay in doing so or shall be under any obligation to sell or otherwise dispose of any Collateral upon the request of Debtor or otherwise.

 

4.7         Lock Box; Collateral Account.  This Section 4.7 shall be effective only upon the occurrence and during the continuance of an Event of Default.  If Vicis so requests in writing, Debtor will direct each of its debtors on the Accounts to make payments due under the relevant Account or chattel paper directly to a special lock box to be under the control of Vicis.  Debtor hereby authorizes and directs Vicis to deposit into a special collateral account to be established and maintained by Vicis all checks, drafts and cash payments received in said lock box.  All deposits in said collateral account shall constitute proceeds of Collateral and shall not constitute payment of any Obligation until so applied.  At its option, Vicis may, at any time, apply finally collected funds on deposit in said collateral account to the payment of the Obligations, in the order of application selected in the sole discretion of Vicis, or permit Debtor to withdraw all or any part of the balance on deposit in said collateral account.  If a collateral account is so established, Debtor agrees that it will promptly deliver to Vicis, for deposit into said collateral account, all payments on Accounts and chattel paper received by it.  All such payments shall be delivered to Vicis in the form received (except for Debtor’s indorsement where necessary).  Until so deposited, all payments on Accounts and chattel paper received by Debtor shall be held in trust by Debtor for and as the property of Vicis and shall not be commingled with any funds or property of Debtor.

 

4.8         Application of Proceeds.  Vicis shall apply the proceeds resulting from any sale or disposition of the Collateral in the following order:

 

(a)           to the costs of any sale or other disposition;

 

(b)           to the expenses incurred by Vicis in connection with any sale or other disposition, including attorneys’ fees;

 

(c)           to the payment of the Obligations then due and owing in any order selected by Vicis; and

 

(d)           to Debtor.

 

4.9         Other Remedies.  No remedy herein conferred upon Vicis is intended to be exclusive of any other remedy and each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Security Agreement and the Transaction Documents now or hereafter existing at law or in equity or by statute or otherwise.  No failure or delay on the part of Vicis in exercising any right or remedy hereunder shall operate as a waiver thereof nor shall any single or partial exercise of any right hereunder preclude other or further exercise thereof or the exercise of any other right or remedy.

 

  

7

  

 

ARTICLE V

MISCELLANEOUS

 

5.1         Expenses and Attorneys’ Fees.  Debtor shall pay all fees and expenses incurred by Vicis, including the fees of counsel including in-house counsel, in connection with the protection, administration and enforcement of the rights of Vicis under this Security Agreement or with respect to the Collateral, including without limitation the protection and enforcement of such rights in any bankruptcy.

 

5.2         Setoff.  Debtor agrees that Vicis shall have all rights of setoff and bankers’ lien provided by applicable law.

 

5.3         Assignability; Successors.  Debtor’s rights and liabilities under this Security Agreement are not assignable or delegable, in whole or in part, without the prior written consent of Vicis.  The provisions of this Security Agreement shall inure to the benefit of and be binding upon the successors and assigns of the parties.

 

5.4         Survival.  All agreements, representations and warranties made in this Security Agreement or in any document delivered pursuant to this Security Agreement shall survive the execution and delivery of this Security Agreement, and the delivery of any such document.

 

5.5         Governing Law.  This Security Agreement shall be governed by, and construed and interpreted in accordance with, the laws of the State of New York applicable to contracts made and wholly performed within such state.

 

5.6         Counterparts; Headings.  This Security Agreement may be executed in several counterparts, each of which shall be deemed an original, but such counterparts shall together constitute but one and the same agreement.  The article and section headings in this Security Agreement are inserted for convenience of reference only and shall not constitute a part hereof.

 

5.7         Notices.  All communications or notices required or permitted by this Security Agreement shall be given to Debtor in accordance with Section 5.4 of the Purchase Agreement.

 

5.8         Amendment; No Waiver; Cumulative Remedies.  No amendment of this Security Agreement shall be effective unless in writing and signed by Debtor and Vicis.  Vicis shall not by any act (except by a written instrument signed by Vicis), delay, indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced in any Event of Default or in any breach of any of the terms and conditions hereof.  No failure to exercise, nor any delay in exercising, on the part of Vicis, any right, power or privilege hereunder shall operate as a waiver thereof.  No single or partial exercise of any right, power or privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege.  A waiver by Vicis of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy which Vicis would otherwise have on any future occasion.  The rights and remedies herein provided are cumulative, may be exercised singly or concurrently and are not exclusive of any other rights or remedies provided by law.

 

  

8

  

5.9         Severability.  Any provision of this Security Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions of this Security Agreement in such jurisdiction or affecting the validity or enforceability of any provision in any other jurisdiction.

 

5.10       WAIVER OF RIGHT TO JURY TRIAL.  VICIS AND DEBTOR ACKNOWLEDGE AND AGREE THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS SECURITY AGREEMENT WOULD BE BASED UPON DIFFICULT AND COMPLEX ISSUES AND, THEREFORE, THE PARTIES AGREE THAT ANY LAWSUIT ARISING OUT OF ANY SUCH CONTROVERSY SHALL BE TRIED IN A COURT OF COMPETENT JURISDICTION BY A JUDGE SITTING WITHOUT A JURY.

 

5.11       Submission to Jurisdiction.  As a material inducement to Vicis to make the Investment:

 

(a)           DEBTOR AGREES THAT ALL ACTIONS OR PROCEEDINGS IN ANY MANNER RELATING TO OR ARISING OUT OF THIS SECURITY AGREEMENT MAY BE BROUGHT ONLY IN COURTS OF THE STATE OF NEW YORK OR THE FEDERAL COURTS LOCATED IN NEW YORK AND DEBTOR CONSENTS TO THE JURISDICTION OF SUCH COURTS.  DEBTOR WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH COURT AND ANY RIGHT IT MAY HAVE NOW OR HEREAFTER HAVE TO CLAIM THAT ANY SUCH ACTION OR PROCEEDING IS IN AN INCONVENIENT COURT; AND

 

(b)           Debtor consents to the service of process in any such action or proceeding by certified mail sent to Debtor at the address specified in Section 5.4 of the Purchase Agreement.

 

5.12       Effect of Amendment and Restatement.  This Security Agreement amends and restates the June Security Agreement and shall not be construed to be a substitution or novation of the June Security Agreement.

 

[SIGNATURE PAGE TO FOLLOW]

 

  

9

  

IN WITNESS WHEREOF, this Amended and Restated Security Agreement has been executed as of the day and year first above written.

 

	
INFUSION BRANDS INTERNATIONAL, INC.

	  
	
By:

	  
	
Name: Robert DeCecco

	
Title: Chief Executive Officer

	  
	
VICIS CAPITAL MASTER FUND

	
By: Vicis Capital LLC

	  
	
By:

	  
	
Name:

	
Title:

 

Signature Page to Amended and Restated Security AgreementAMENDED AND RESTATED GUARANTY AGREEMENT

THIS AMENDED AND RESTATED GUARANTY AGREEMENT (this “Guaranty”) dated July 8, 2011, amends and restates that certain Guaranty Agreement dated as of June 30, 2010 by and between Infusion Brands, Inc. (f/k/a Omniresponse, Inc.), a Nevada corporation, OmniReliant Acquisition Sub, Inc., a Nevada corporation,. Designer Liquidator, Inc., a Nevada corporation, OmniResponse Cleaning Solutions, Inc., a Florida corporation, Dual Saw, Inc., a Florida corporation, OmniResponse Safety Solutions, Inc., a Florida corporation and OmniReliant Corp., a Florida corporation, and Vicis Capital Master Fund (“Vicis”), a sub-trust of Vicis Capital Series Master Trust, a unit trust organized and existing under the laws of the Cayman Islands.  Each of OmniReliant Acquisition Sub, Inc., OmniResponse Cleaning Solutions, Inc., Designer Liquidator, Inc., Dual Saw, Inc., OmniResponse Safety Solutions, Inc. and OmniReliant Corp. has been released from its obligations hereunder pursuant to a release previously executed by Vicis.  Fashion Safari, Inc., a Nevada corporation, shall be included as a party to this Guaranty and, along with Infusion Brands, Inc., shall be collectively referred to herein as the “Guarantor”.

 

RECITALS

 

WHEREAS, each Guarantor is a wholly owned subsidiary of Infusion Brands International, Inc., a Nevada corporation (f/k/a OmniReliant Holdings, Inc.) (“Issuer”).

 

WHEREAS, pursuant to a Securities Purchase Agreement of even date herewith by and between Vicis and Issuer (as amended or modified from time to time, the “July Purchase Agreement”), Issuer has issued (i) 3,000,000 shares of the Issuer’s Series G Convertible Preferred Stock, par value $.00001 per share (such 3,000,000 shares, together with 5,000,000 shares of such Series G Convertible Preferred Stock acquired by Vicis pursuant to that certain Securities Purchase Agreement dated June 30, 2010 by and between Debtor and Vicis (the “Purchase Agreement”), the “Preferred Shares”), to Vicis.

 

WHEREAS, in connection with the transactions contemplated by the Purchase Agreement, the parties entered into a Guaranty Agreement dated as of June 30, 2010 (the “2010 Guaranty Agreement”).

 

WHEREAS, since the date of the 2010 Guaranty Agreement, Vicis has released each of OmniReliant Acquisition Sub, Designer Liquidator, Inc. Omniresponse Cleaning Solutions, Inc., Dual Saw, Inc., OmniResponse Safety Solutions, Inc. and OmniReliant Corp. from its obligations under the 2010 Guaranty Agreement , and the Issuer has formed Fashion Safari, Inc., a Nevada corporation and wholly owned subsidiary of the Issuer.

 

WHEREAS, it is a condition precedent to Vicis entering into the Purchase Agreement and the July Purchase Agreement and acquiring the Preferred Shares that the Guarantor execute and deliver to Vicis a guaranty in the form hereof.

 

WHEREAS, as consideration for the transactions contemplated under the July Purchase Agreement, Vicis and Infusion Brands, Inc. (f/k/a OmniResponse, Inc.) desire to amend and restate the 2010 Guaranty Agreement as described herein.

 

  

  

  

 

WHEREAS, this is the Guaranty Agreement referred to in the Purchase Agreement and the July Purchase Agreement.

 

NOW, THEREFORE, in consideration of the recitals and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Guarantor hereby agrees with Vicis as follows:

 

ARTICLE 1

DEFINITIONS

 

When used in this Guaranty, capitalized terms shall have the meanings specified in the Purchase Agreement, the preamble, the recitals and as follows:

 

1.1         Event of Default.  “Event of Default” means an Event of Default (as defined in the Purchase Agreement) and an Event of Default (as defined in the July Purchase Agreement).

 

1.2         Guaranty.  “Guaranty” shall mean this Guaranty, as the same shall be amended from time to time in accordance with the terms hereof.

 

1.3         Law.  “Law” shall mean any federal, state, local or other law, rule, regulation or governmental requirement of any kind, and the rules, regulations, interpretations and orders promulgated thereunder.

 

1.4         Obligations.  “Obligations” shall mean (a) the redemption of, and payment of dividends on, the Preferred Shares, and any renewal, extension or refinancing thereof; (b) all debts, liabilities, obligations, covenants and agreements of the Issuer and the Guarantor contained in the Transaction Documents; and (c) any and all other debts, liabilities and obligations of the Guarantor and of Issuer to Vicis.  As used in this Guaranty, “Transaction Documents” means (i) the Transaction Documents (as defined in the Purchase Agreement), and (ii) the Transaction Documents (as defined in the July Purchase Agreement).

 

1.5         Person.  “Person” shall mean and include an individual, partnership, corporation, trust, unincorporated association and any unit, department or agency of government.

 

ARTICLE 2

THE GUARANTY

 

2.1         The Guaranty.  The Guarantor, for itself, its successors and assigns, hereby unconditionally and absolutely guarantees to Vicis the full and complete payment and performance when due (whether at stated maturity, by acceleration or otherwise) of each of the Obligations.  This is a guaranty of payment and performance and not of collection.

  

-2-

  

2.2         Waivers and Consents.

 

(a)           The Guarantor acknowledges that the obligations undertaken herein involve the guaranty of obligations of a Person other than the Guarantor and, in full recognition of that fact, the Guarantor consents and agrees that Vicis may, at any time and from time to time, without notice or demand, and without affecting the enforceability or continuing effectiveness hereof:  (i) supplement, modify, amend, extend, renew, accelerate or otherwise change the time for payment or the other terms of the Obligations or any part thereof, including without limitation any increase or decrease of the principal amount thereof or the rate(s) of interest thereon; (ii) supplement, modify, amend or waive, or enter into or give any agreement, approval or consent with respect to, the Obligations or any part thereof, or any of the Transaction Documents or any additional security or guaranties, or any condition, covenant, default, remedy, right, representation or term thereof or thereunder; (iii) accept new or additional instruments, documents or agreements in exchange for or relative to any of the Transaction Documents or the Obligations or any part thereof; (iv) accept partial payments on the Obligations; (v) receive and hold additional security or guaranties for the Obligations or any part thereof; (vi) release, reconvey, terminate, waive, abandon, fail to perfect, subordinate, exchange, substitute, transfer and/or enforce any security or guaranties, and apply any security and direct the order or manner of sale thereof as Vicis in its sole and absolute discretion may determine; (vii) release any Person from any personal liability with respect to the Obligations or any part thereof; (viii) settle, release on terms satisfactory to Vicis or by operation of applicable Law or otherwise, liquidate or enforce any Obligations and any security or guaranty in any manner, consent to the transfer of any security and bid and purchase at any sale; and/or (ix) consent to the merger, change or any other restructuring or termination of the corporate existence of Issuer or any other Person, and correspondingly restructure the Obligations, and any such merger, change, restructuring or termination shall not affect the liability of the Guarantor or the continuing effectiveness hereof, or the enforceability hereof with respect to all or any part of the Obligations.

 

(b)           Upon the occurrence and during the continuance of any Event of Default, Vicis may enforce this Guaranty independently of any other remedy, guaranty or security Vicis at any time may have or hold in connection with the Obligations, and it shall not be necessary for Vicis to marshal assets in favor of Issuer, any other guarantor of the Obligations or any other Person or to proceed upon or against and/or exhaust any security or remedy before proceeding to enforce this Guaranty.  The Guarantor expressly waives any right to require Vicis to marshal assets in favor of Issuer or any other Person or to proceed against Issuer or any other guarantor of the Obligations or any collateral provided by any Person, and agrees that Vicis may proceed against any obligor and/or the collateral in such order as it shall determine in its sole and absolute discretion.  Vicis may file a separate action or actions against the Guarantor, whether action is brought or prosecuted with respect to any security or against any other Person, or whether any other Person is joined in any such action or actions.  The Guarantor agrees that Vicis and Issuer may deal with each other in connection with the Obligations or otherwise, or alter any contracts or agreements now or hereafter existing between them, in any manner whatsoever, all without in any way altering or affecting the security of this Guaranty.

 

(c)           The rights of Vicis hereunder shall be reinstated and revived, and the enforceability of this Guaranty shall continue, with respect to any amount at any time paid on account of the Obligations which thereafter shall be required to be restored or returned by Vicis upon the bankruptcy, insolvency or reorganization of any Person, all as though such amount had not been paid.  The rights of Vicis created or granted herein and the enforceability of this Guaranty shall remain effective at all times to guarantee the full amount of all the Obligations even though the Obligations, including any part thereof or any other security or guaranty therefor, may be or hereafter may become invalid or otherwise unenforceable as against Issuer or any other guarantor of the Obligations and whether or not Issuer or any other guarantor of the Obligations shall have any personal liability with respect thereto.

  

-3-

  

(d)           To the extent permitted by applicable law, the Guarantor expressly waives any and all defenses now or hereafter arising or asserted by reason of:  (i) any disability or other defense of Issuer or any other guarantor for the Obligations with respect to the Obligations (other than full payment and performance of all of the Obligations); (ii) the unenforceability or invalidity of any security for or guaranty of the Obligations or the lack of perfection or continuing perfection or failure of priority of any security for the Obligations; (iii) the cessation for any cause whatsoever of the liability of Issuer or any other guarantor of the Obligations (other than by reason of the full payment and performance of all Obligations); (iv) any failure of Vicis to marshal assets in favor of Issuer or any other Person; (v) any failure of Vicis to give notice of sale or other disposition of collateral to Issuer or any other Person or any defect in any notice that may be given in connection with any sale or disposition of collateral; (vi) any failure of Vicis to comply with applicable Laws in connection with the sale or other disposition of any collateral or other security for any Obligation, including, without limitation, any failure of Vicis to conduct a commercially reasonable sale or other disposition of any collateral or other security for any Obligation; (vii) any act or omission of Vicis or others that directly or indirectly results in or aids the discharge or release of Issuer or any other guarantor of the Obligations, or of any security or guaranty therefor by operation of Law or otherwise; (viii) any Law which provides that the obligation of a surety or guarantor must neither be larger in amount nor in other respects more burdensome than that of the principal or which reduces a surety’s or guarantor’s obligation in proportion to the principal obligation; (ix) any failure of Vicis to file or enforce a claim in any bankruptcy or other proceeding with respect to any Person; (x) the election by Vicis, in any bankruptcy proceeding of any Person, of the application or non-application of Section 1111(b)(2) of the United States Bankruptcy Code; (xi) any extension of credit or the grant of any lien under Section 364 of the United States Bankruptcy Code; (xii) any use of collateral under Section 363 of the United States Bankruptcy Code; (xiii) any agreement or stipulation with respect to the provision of adequate protection in any bankruptcy proceeding of any Person; (xiv) the avoidance of any lien or security interest in favor of Vicis for any reason; (xv) any bankruptcy, insolvency, reorganization, arrangement, readjustment of debt, liquidation or dissolution proceeding commenced by or against any Person, including without limitation any discharge of, or bar or stay against collecting, all or any of the Obligations (or any interest thereon) in or as a result of any such proceeding; or (xvi) any action taken by Vicis that is authorized by this Section or any other provision of any Transaction Document.  Until all of the Obligations have been paid in full, the Guarantor expressly waives all presentments, demands for payment or performance, notices of nonpayment or nonperformance, protests, notices of protest, notices of dishonor and all other notices or demands of any kind or nature whatsoever with respect to the Obligations, and all notices of acceptance of this Guaranty or of the existence, creation or incurrence of new or additional Obligations.

 

(e)           Condition of Issuer.  The Guarantor represents and warrants to Vicis that it has established adequate means of obtaining from Issuer, on a continuing basis, financial and other information pertaining to the business, operations and condition (financial and otherwise) of Issuer and its assets and properties.  The Guarantor hereby expressly waives and relinquishes any duty on the part of Vicis (should any such duty exist) to disclose to the Guarantor any matter, fact or thing related to the business, operations or condition (financial or otherwise) of Issuer or its assets or properties, whether now known or hereafter known by Vicis during the life of this Guaranty.  With respect to any of the Obligations, Vicis need not inquire into the powers of Issuer or agents acting or purporting to act on its behalf, and all Obligations made or created in good faith reliance upon the professed exercise of such powers shall be guaranteed hereby.

  

-4-

  

(f)           Continuing Guaranty.  This is a continuing guaranty and shall remain in full force and effect as to all of the Obligations until all amounts owing by Issuer to Vicis on the Obligations shall have been paid in full.

 

(g)           Subrogation; Subordination.  The Guarantor expressly waives any claim for reimbursement, contribution, indemnity or subrogation which the Guarantor may have against Issuer as a guarantor of the Obligations and any other legal or equitable claim against Issuer arising out of the payment of the Obligations by the Guarantor or from the proceeds of any collateral for this Guaranty, until all amounts owing to Vicis under the Obligations shall have been paid in full and all commitments to lend have been terminated or expired.  In furtherance, and not in limitation, of the foregoing waiver, until all amounts owing to Vicis under the Obligations shall have been paid in full, the Guarantor hereby agrees that no payment by the Guarantor pursuant to this Guaranty shall constitute the Guarantor a creditor of Issuer.  Until all amounts owing to Vicis under the Obligations shall have been paid in full, no Guarantor shall seek any reimbursement from Issuer in respect of payments made by the Guarantor in connection with this Guaranty, or in respect of amounts realized by Vicis in connection with any collateral for the Obligations, and the Guarantor expressly waives any right to enforce any remedy that Vicis now has or hereafter may have against any other Person and waives the benefit of, or any right to participate in, any collateral now or hereafter held by Vicis.  No claim which any Guarantor may have against any other guarantor of any of the Obligations or against Issuer, to the extent not waived pursuant to this Section, shall be enforced nor any payment accepted until the Obligations are paid in full and all such payments are not subject to any right of recovery.

 

ARTICLE 3

REPRESENTATIONS AND WARRANTIES OF GUARANTOR

 

Each Guarantor hereby represents and warrants to Vicis as follows:

 

3.1         Authorization.  The Guarantor is a corporation duly and validly organized and existing under the laws of its state of organization, has the corporate power to own its owned assets and properties and to carry on its business, and is duly licensed or qualified to do business in all jurisdictions in which failure to do so would have a material adverse effect on its business or financial condition.  The making, execution, delivery and performance of this Guaranty, and compliance with its terms, have been duly authorized by all necessary corporate action of the Guarantor.

 

3.2         Enforceability.  This Guaranty is the legal, valid and binding obligation of the Guarantor, enforceable against the Guarantor in accordance with its terms.

 

3.3         Absence of Conflicting Obligations.  The making, execution, delivery and performance of this Guaranty, and compliance with its terms, do not violate any existing provision of Law; the articles of incorporation or bylaws of any Guarantor; or any agreement or instrument to which the Guarantor is a party or by which it or any of its assets is bound.

  

-5-

  

3.4         Consideration for Guaranty.  The Guarantor acknowledges and agrees with Vicis that but for the execution and delivery of this Guaranty by the Guarantor, Vicis would not have acquired the Preferred Shares.  The Guarantor acknowledges and agrees that the proceeds of the sale of the Preferred Shares will result in significant benefit to the Guarantor who is the wholly-owned subsidiary of Issuer and the intended beneficiary of such proceeds.

 

ARTICLE 4

COVENANTS OF THE GUARANTOR

 

4.1         Actions by Guarantor.  No Guarantor shall take or permit any act, or omit to take any act, that would:  (a) cause Issuer to breach any of the Obligations; (b) impair the ability of Issuer to perform any of the Obligations; or (c) cause an Event of Default under the Purchase Agreement or the July Purchase Agreement.

 

4.2         Reporting Requirements.  The Guarantor shall furnish, or cause to be furnished, to Vicis such information respecting the business, assets and financial condition of the Guarantor as Vicis may reasonably request.

 

ARTICLE 5

MISCELLANEOUS

 

5.1         Expenses and Attorneys’ Fees.  Guarantor shall pay all reasonable fees and expenses incurred by Vicis, including the reasonable fees of counsel, in connection with the protection or enforcement of its rights under this Guaranty, including without limitation the protection and enforcement of such rights in any bankruptcy, reorganization or insolvency proceeding involving Issuer or any Guarantor, both before and after judgment.

 

5.2         Revocation.  This is a continuing guaranty and shall remain in full force and effect with respect to a Guarantor until Vicis receives written notice of revocation signed by the Guarantor.  Upon revocation by written notice, this Guaranty shall continue in full force and effect as to all Obligations contracted for or incurred before revocation, and as to them Vicis shall have the rights provided by this Guaranty as if no revocation had occurred.  Any renewal, extension, or increase in the interest rate(s) of any such Obligation, whether made before or after revocation, shall constitute an Obligation contracted for or incurred before revocation.  Obligations contracted for or incurred before revocation shall also include credit extended after revocation pursuant to commitments made before revocation.

 

5.3         Assignability; Successors.  The Guarantor’s rights and liabilities under this Guaranty are not assignable or delegable, in whole or in part, without the prior written consent of Vicis.  The provisions of this Guaranty shall be binding upon the Guarantor, its successors and permitted assigns and shall inure to the benefit of Vicis, its successors and assigns.

 

5.4         Survival.  All agreements, representations and warranties made herein or in any document delivered pursuant to this Guaranty shall survive the execution and delivery of this Guaranty and the delivery of any such document.

  

-6-

  

5.5         Governing Law.  This Guaranty and the documents issued pursuant to this Guaranty shall be governed by, and construed and interpreted in accordance with, the Laws of the State of New York applicable to contracts made and wholly performed within such state.

 

5.6         Execution; Headings.  This Guaranty may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need not sign the same counterpart.  In the event that any signature is delivered by facsimile transmission, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile signature page were an original thereof.  The article and section headings in this Guaranty are inserted for convenience of reference only and shall not constitute a part hereof.

 

5.7         Notices.  All notices, requests and demands to or upon Vicis or any Guarantor (to be delivered care of Issuer) shall be delivered in the manner set forth in Section 12.6 of the Purchase Agreement.

 

5.8         Amendment.  No amendment of this Guaranty shall be effective unless in writing and signed by the Guarantor and Vicis.

 

5.9         Severability.  Any provision of this Guaranty which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions of this Guaranty in such jurisdiction or affecting the validity or enforceability of any provision in any other jurisdiction.

 

5.10       Taxes.  If any transfer or documentary taxes, assessments or charges levied by any governmental authority shall be payable by reason of the execution, delivery or recording of this Guaranty, Guarantor shall pay all such taxes, assessments and charges, including interest and penalties, and the Guarantor hereby indemnifies Vicis against any liability therefor.

 

5.11       WAIVER OF RIGHT TO JURY TRIAL.  THE GUARANTOR ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS GUARANTY WOULD BE BASED UPON DIFFICULT AND COMPLEX ISSUES AND, THEREFORE, THE GUARANTOR AGREES THAT ANY LAWSUIT ARISING OUT OF ANY SUCH CONTROVERSY SHALL BE TRIED IN A COURT OF COMPETENT JURISDICTION BY A JUDGE SITTING WITHOUT A JURY.

 

  

  

  

 

5.12       SUBMISSION TO JURISDICTION; SERVICE OF PROCESS.  AS A MATERIAL INDUCEMENT TO VICIS TO ENTER INTO THIS TRANSACTION:

 

THE GUARANTOR AGREES THAT ALL ACTIONS OR PROCEEDINGS IN ANY MANNER RELATING TO OR ARISING OUT OF THIS GUARANTY OR THE OTHER DOCUMENTS EXECUTED IN CONNECTION HEREWITH MAY BE BROUGHT ONLY IN COURTS OF THE STATE OF NEW YORK OR THE FEDERAL COURTS LOCATED IN NEW YORK AND THE GUARANTOR CONSENTS TO THE JURISDICTION OF SUCH COURTS.  THE GUARANTOR WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH COURT AND ANY RIGHT IT MAY HAVE NOW OR HEREAFTER HAVE TO CLAIM THAT ANY SUCH ACTION OR PROCEEDING IS IN AN INCONVENIENT COURT; AND

 

the Guarantor consents to the service of process in any such action or proceeding by certified mail sent to the address specified in Section 5.7. Nothing contained herein shall affect the right of Vicis to serve process in any other manner permitted by law or to commence an action or proceeding in any other jurisdiction.

  

-8-

  

IN WITNESS WHEREOF the undersigned has executed this Guaranty as of the day and year first above written.

 

	  	
Infusion Brands, Inc.

	  	  	  
	  	
By:

	  
	  	  	
Name: Robert DeCecco

	  	  	
Title:   Chief Executive Officer/President

	  	  	  
	  	
Fashion Safari, Inc.

	  	  	  
	  	
By:

	  
	  	  	
Name: Robert DeCecco

	  	  	
Title:   President

ACCEPTANCE BY VICIS

 

This Amended and Restated Guaranty Agreement is accepted by Vicis Capital Master Fund.

 

	  	
VICIS CAPITAL MASTER FUND

	  	
By:  Vicis Capital LLC

	  	  	  
	  	
By:

	  
	  	  	
Name:

	  	  	
Title:

 

Acceptance Page to Amended and Restated Guaranty

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00191-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00191-of-00352.parquet"}]]