Exhibit 10.4
NONRECOURSE PLEDGE AGREEMENT
----------------------------
THIS NONRECOURSE PLEDGE AGREEMENT (this "Pledge Agreement") is
executed effective as of April 8, 2004 by XXXX XXXXX and AL PLANT ("Pledgors")
for the benefit of OXFORD VENTURES, INC., a Nevada corporation ("Secured Party")
as credit support for REV'S @ 101, LLC, an Arizona limited liability company
("Debtor").
RECITALS
--------
A. Debtor has executed that certain Promissory Note of even date herewith
(as amended, modified, restated, or extended from time to time, the "Note") in
the original principal amount of up to $275,000.00 payable to the order of
Secured Party.
B. Pledgors are the sole owners of all of the issued and outstanding
membership interests of Debtor (the "Pledged Membership Interests").
C. It is expressly understood between Pledgors and Secured Party that the
execution and delivery of this Pledge Agreement is a condition precedent to
Secured Party's obligations to extend credit under the terms of the Note.
NOW, THEREFORE, in consideration of the premises which are incorporated
herein for all purposes, and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the parties agree as
follows:
1. Certain Definitions. UNLESS OTHERWISE DEFINED IN THIS PLEDGE AGREEMENT,
ANY CAPITALIZED TERM USED IN THIS PLEDGE AGREEMENT HAS THE MEANING GIVEN THAT
TERM IN THE UCC. If the definition given a term in Chapter 9 of the UCC
conflicts with the definition given that term in any other chapter of the UCC,
the Chapter 9 definition shall control. As used in this Pledge Agreement:
"Business Day" means every day on which banks in Arizona are open
for banking business.
"Collateral" means all of Pledgors' right, title and interest in and
to the Pledged Membership Interests, including after-acquired Collateral and
proceeds of the Collateral.
"Default" means an "Event of Default" hereunder or under the Note.
"Obligation" means all obligations of Pledgors and Debtor under this
Pledge Agreement and Debtor under the Note, including without limitation, full
and final payment of the Note by Debtor.
"Pledge Agreement" means this Pledge Agreement together with all
schedules and annexes attached to this Pledge Agreement, and all amendments and
modifications to this Pledge Agreement, the schedules and exhibits.
"Pledged Membership Interests" has the meaning ascribed above and
all dividends, cash, instruments and other property from time-to-time received,
receivable or otherwise distributed in respect of or in exchange of any Pledged
Membership Interests.
"Pledgors" includes, without limitation, each of the Pledgors as a
debtor-in-possession, and any receiver, trustee, liquidator, conservator,
custodian, or similar party hereafter appointed for either Pledgor or all or
substantially all of such Pledgor's assets pursuant to any liquidation,
conservatorship, bankruptcy, moratorium, rearrangement, receivership,
insolvency, reorganization, or similar law from time to time in effect affecting
the rights of creditors generally.
"Security Interest" means the security interests granted and the
transfers, pledges and collateral assignments made under Section 3 of this
Pledge Agreement.
"UCC" means (a) generally, and with respect to the definitions
above, the Uniform Commercial Code, as adopted in Nebraska, as amended from time
to time, and (b) with respect to rights in states other than Nebraska, the
Uniform Commercial Code as enacted in the applicable state, as amended from time
to time.
2. Promissory Note. This Pledge Agreement is being executed and delivered
to secure the full payment of all of Debtor's obligations under the Note.
3. Security Interest. In order to secure the full and complete payment and
performance of the Obligation when due, each of the Pledgors has delivered a
power signed in blank in the form attached hereto as Exhibit A and hereby grants
to Secured Party a first priority security interest in, and pledges and assigns
to Secured Party: (a) the Collateral, and (b) all present and future accounts,
contract rights, general intangibles, chattel paper, documents, instruments,
cash and noncash proceeds and other rights arising from or by virtue of, or from
the voluntary or involuntary sale or other disposition of, or collections with
respect to, or claims against any other person with respect to, the Collateral.
Such security interest is granted, and such pledge and assignment are made, as
security only.
4. No Assumption or Modification. The Security Interest is given to secure
the prompt, unconditional and complete payment and performance of the Obligation
when due, and is given as security only. Secured Party does not assume and shall
not be liable for any of Pledgors' liabilities, duties, or obligations under or
in connection with the Collateral. Secured Party's acceptance of this Pledge
Agreement, or its taking any action in carrying out this Pledge Agreement, does
not constitute Secured Party's approval of the Collateral or Secured Party's
assumption of any obligation under or in connection with the Collateral. This
Pledge Agreement does not affect or modify Pledgors' obligations with respect to
the Collateral.
5. Representations and Warranties. Debtor hereby represents and warrants
to Secured Party as follows:
(a) The Pledged Membership Interests are duly authorized, validly
issued, fully paid and non-assessable, and their transfer thereof is not subject
to any restrictions other than restrictions imposed by applicable securities and
limited liability company laws.
(b) Pledgors own the Collateral free and clear of all liens.
(c) The information contained in Schedule 1 attached to this Pledge
Agreement is true and accurate and sufficiently describes all of the Pledged
Membership Interests.
6. Covenants. Debtor covenants that it will:
2
(a) Promptly notify Secured Party of any change in any fact or
circumstances represented or warranted by Debtor herein with respect to any of
the Collateral.
(b) Promptly notify Secured Party of any claim, action or proceeding
affecting the Security Interest and the pledge and assignment made under
Paragraph 3 or title to all or any of the Collateral and, at the request of
Secured Party, appear in and defend, at Debtor's expense, any such action or
proceeding.
(c) Not permit Pledgors to sell, assign or otherwise dispose of any
Collateral.
(d) Not permit Pledgors to create, incur or suffer to exist any
other lien upon any of the Collateral except in favor of Secured Party.
(e) At Debtors expense and at Secured Party's request, file or cause
to be filed such applications and take such other actions as Secured Party may
request to obtain the consent or approval of any tribunal to Secured Party's
rights hereunder, including, without limitation, the right to sell all the
Collateral upon a Default without additional consent or approval from such
tribunal (and, because Debtor and Pledgors agree that Secured Party's remedies
at law for failure of Pledgors to comply with this provision would be
inadequate, Debtor and Pledgors agree that the covenants in this provision may
be specifically enforced).
(f) From time to time promptly obtain from Pledgors and deliver to
Secured Party all such other powers, assignments, certificates, supplemental
documents, and financing statements (if appropriate), and do all other acts or
things as Secured Party may reasonably request in order to more fully create,
evidence, perfect, continue and preserve the priority of the Security Interest.
7. Default; Remedies. Upon a breach by Debtor of any representation,
warranty or covenant in the Note or in this Pledge Agreement (each such event, a
"Default") beyond any applicable grace period, if any, Secured Party may, at its
election, exercise any and all rights available to a secured party under the
UCC, in addition to any and all other rights afforded by the Note, at law, in
equity, or otherwise, including, without limitation, exercising the Power
executed in blank by Pledgors in respect of the Pledged Membership Interests, a
form of which is attached as Annex "A" to this Pledge Agreement, or applying by
appropriate judicial proceedings for appointment of a receiver for all or part
of the Collateral (and Pledgors hereby consent to any such appointment).
Notwithstanding any provision of the Note, this Pledge Agreement or otherwise,
the pledge of the Collateral under this Pledge Agreement is made as an
accommodation to Debtor and is without recourse to either Pledgor under any
circumstance, and there shall be no personal liability on Pledgors or on
Debtor's successors in title or assigns of the properties of Debtor, to pay the
indebtedness evidenced by the Note, or for the observance or performance of any
of the covenants, conditions or agreements contained therein or in this Pledge
Agreement, or in any other instrument evidencing or securing the indebtedness
evidenced by the Note, or executed in connection therewith, and Secured Party
and any subsequent holder of the Note will look solely to the Collateral and
will not seek any money judgment, deficiency or otherwise, against Pledgors or
Debtor's successors in title or assigns of the properties of Debtor, in the
event of default in the payment of the indebtedness evidenced by the Note or in
the event of any default under the terms of this Pledge Agreement or any other
instrument evidencing or securing the indebtedness represented by the Note, or
executed in connection therewith.
3
(a) Notice. Reasonable notification of the time and place of any
public sale of the Collateral, or reasonable notification of the time after
which any private sale or other intended disposition of the Collateral is to be
made, shall be sent to Debtor and each of the Pledgors and to any other person
entitled to notice under the UCC; provided that if any of the Collateral
threatens to decline speedily in value or is of the type customarily sold on a
recognized market, Secured Party may sell or otherwise dispose of the Collateral
without notification, advertisement, or other notice of any kind. It is agreed
that notice sent or given not less than five Business Days prior to the taking
of the action to which the notice relates is reasonable for the purposes of this
subparagraph.
(b) Sales of Securities. In connection with the sale of the
Collateral, Secured Party is authorized, but not obligated, to limit prospective
purchasers to the extent deemed necessary or desirable by Secured Party to
render such sale exempt from the registration requirements of the Securities Act
of 1933, as amended, and any applicable state securities laws, and no sale so
made in good faith by Secured Party shall be deemed not to be "commercially
reasonable" because so made.
(c) Application of Proceeds. Secured Party shall apply the proceeds
of any sale or other disposition of the Collateral under this Paragraph 7 in the
following order: First, to the payment of all of its expenses incurred in
retaking, holding and preparing any of the Collateral for sale(s) or other
disposition, in arranging for such sale(s) or other disposition, and in actually
selling or disposing of the same (all of which are part of the Obligation);
second, toward repayment of amounts expended by Secured Party under Paragraph 8;
third, toward payment of the balance of the Obligation in accordance with the
Note. Any surplus remaining shall be delivered to Pledgors or as a court of
competent jurisdiction may direct.
8. Other Rights of Secured Party.
(a) Performance. In the event Pledgors shall fail to perform any of
their obligations hereunder with respect to the Collateral, then Secured Party
may, at its option, but without being required to do so, take such action which
Pledgors is required, but has failed or refused, to take. Any sum which may be
expended or paid by Secured Party under this subparagraph (including, without
limitation, court costs and attorneys' fees) shall bear interest from the dates
of expenditure or payment at the Default Rate (as specified in the Note) until
paid and, together with such interest, shall be a part of the Obligation secured
by the Collateral.
(b) Collection. Upon notice from Secured Party, each person or
entity obligated with respect to any of the Collateral, whether as an issuer,
account debtor or otherwise (an "Obligor") is hereby authorized and directed by
Pledgors to make payments on any of the Collateral (including, without
limitation, dividends and other ownership distributions) directly to Secured
Party, regardless of whether Pledgors were previously making collections
thereon. Secured Party shall have the right in its own name or in the name of
Pledgors to compromise or extend time of payment with respect to all or any
portion of the Collateral for such amounts and upon such terms as Secured Party
may determine; to demand, collect, receive, receipt for, xxx for, compound and
give acquittances for any and all amounts due or to become due with respect to
Collateral; to take control of cash and other proceeds of any Collateral; to
endorse the name of Pledgors on any notes, acceptances, checks, drafts, money
orders or other evidences of payment on Collateral that may come into the
possession of Secured Party; to send requests for verification of obligations to
any Obligor; and to do all other acts and things necessary to carry out the
intent of this Pledge Agreement. If any Obligor fails or refuses to make payment
on any Collateral when due, Secured Party is authorized, in its sole discretion,
either in its own name or in the name of Pledgors, to take such action as
Secured Party shall deem appropriate for the collection of any such amounts.
Regardless of any other provision hereof, however, Secured Party shall never be
liable for its failure to collect, or for its failure to exercise diligence in
the collection of, any amounts owed with respect to Collateral, nor shall it be
under any duty whatever to anyone except Pledgors to account for funds that it
shall actually receive hereunder. Without limiting the generality of the
foregoing, Secured Party shall have no responsibility for ascertaining any
maturities, calls, conversions, exchanges, offers, tenders or similar matters
relating to any Collateral, or for informing Pledgors with respect to any of
such matters (irrespective of whether Secured Party actually has, or may be
deemed to have, knowledge thereof). The receipt of Secured Party to any Obligor
shall be a full and complete release, discharge and acquittance to such Obligor,
to the extent of any amount so paid to Secured Party. The rights granted Secured
Party under this subparagraph may be exercised at any time while a Default has
occurred and is continuing.
4
(c) Record Ownership of Securities. If a Default has occurred and is
continuing, Secured Party at any time may have the Collateral registered in its
name, or in the name of its nominee or nominees, as pledgee.
(d) Voting of Securities. So long as no Default has occurred,
Pledgors shall be entitled to exercise all voting rights pertaining to the
Collateral. After the occurrence and during the continuance of a Default, the
right to vote the Collateral shall be vested exclusively in Secured Party. To
this end, Pledgors and each of them irrevocably appoint Secured Party the proxy
and attorney-in-fact of Pledgors, with full power of substitution, to vote and
to act with respect to the Collateral, subject to the understanding that such
proxy may not be exercised unless a Default has occurred and is continuing. The
proxy herein granted is coupled with an interest, is irrevocable, and shall
continue until the Obligation has been paid and performed in full.
(e) Certain Proceeds. Any and all cash dividends, equity dividends
or distributions in respect to ownership, whether in cash or property, made on
or in respect of the Collateral, and any proceeds of the Collateral, whether
such dividends, distributions, or proceeds result from a subdivision,
combination or reclassification of the outstanding membership interests of
Debtor or which may be distributable to Pledgors in their capacity as owners of
the Pledged Membership Interests, shall be part of the Collateral hereunder, and
shall be, if received by Pledgors, held in trust for the benefit of Secured
Party, and shall forthwith be delivered to Secured Party (accompanied by proper
instruments of assignment and/or stock and/or bond powers executed by Pledgors
in accordance with Secured Party's instructions) to be held subject to the terms
hereof. Any cash proceeds of Collateral which come into the possession of
Secured Party may, at Secured Party's option, be applied in whole or in part to
the Obligation (to the extent then due), be released in whole or in part to or
on the written instructions of Pledgors for any general or specific purpose, or
be retained in whole or in part by Secured Party as additional Collateral.
9. Miscellaneous.
(a) Term. Upon full and final payment of the Obligation and without
Secured Party having exercised its rights under this Pledge Agreement, this
Pledge Agreement shall terminate; provided that no Obligor on any of the
Collateral shall be obligated to inquire as to the termination of this Pledge
Agreement, but shall be fully protected in making payment directly to Secured
Party, which payment shall be promptly paid over to Pledgors after termination
of this Pledge Agreement.
(b) Notices. Any notice, demand or document which either party is
required or may desire to give hereunder shall be in writing and, except to the
extent provided in the other provisions of this Pledge Agreement, given by
messenger, telecopy or other electronic transmission, or United States
registered or certified mail, postage prepaid, return receipt requested,
addressed to such party at its address and telecopy number shown below, or at
such other address as either party shall have furnished to the other by notice
given in accordance with this provision.
5
If to Secured Party, to:
Xxxxxx X. Xxxxxxx
00000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
FAX (manual): 000-000-0000
If to Pledgors and/or Debtor, to:
Al Plant
0000 Xxxx Xxxxxxx Xxxxxx
Xxxx, XX 00000
FAX (manual): 000-000-0000
and
Xxxx Xxxxx
00000 Xxxx Xxxxxxxx Xxxxx
Xxxxxx, XX 00000
FAX (manual): 000-000-0000
Any notice delivered or made by messenger, telecopy, or United States mail shall
be deemed to be given on the date of actual delivery as shown by messenger
receipt, the addressor's telecopy machine confirmation or other verifiable
electronic receipt, or the registry or certification receipt. Secured Party need
not delay action on notice transmitted orally by Pledgors to Secured Party until
receipt of written confirmation of such notice. In the event that a discrepancy
exists between the notice received by Secured Party orally and the written
confirmation, or in the absence of a written confirmation, the oral notice, as
understood by Secured Party will be deemed the controlling and proper notice.
(c) Governing Law. THIS PLEDGE AGREEMENT SHALL BE CONSTRUED--AND ITS
PERFORMANCE ENFORCED UNDER ARIZONA LAW.
(d) Conflict with Note. In the event of any conflict or
inconsistency between the terms hereof (including without limitation the rights
and obligations of the parties hereunder) and the Note, the terms of this Pledge
Agreement shall be controlling.
(e) Actions Not Releases. The Security Interest and Pledgors' pledge
and Secured Party's rights under this Pledge Agreement shall not be released,
diminished, impaired or adversely affected by the occurrence of any one or more
of the following events: (i) the taking or accepting of any other security or
assurance for any or all of the Obligation; (ii) any release, surrender,
exchange, subordination or loss of any security or assurance at any time
existing in connection with any or all of the Obligation; (iii) the modification
of, amendment to, or waiver of compliance with, any terms of the Note without
the consent of Pledgors, except as required therein; (iv) the insolvency,
bankruptcy or lack of corporate or trust power of any party at any time liable
for the payment of any or all of the Obligation, whether now existing or
hereafter occurring; (v) any renewal, extension or rearrangement of the payment
of any or all of the Obligation, either with or without notice to or consent of
Pledgors, or any adjustment, indulgence, forbearance or compromise that may be
granted or given by Secured Party to Debtor; (vi) any neglect, delay, omission,
failure or refusal of Secured Party to take or prosecute any action in
connection with the Note; (vii) any failure of Secured Party to notify Pledgors
(A) of any assignment of the Obligation or any part thereof, (B) of any other
action taken or refrained from being taken by Secured Party against Debtor or
(C) any new agreement between Secured Party and Debtor, it being understood
that, except as expressly required by the Note, Secured Party shall not be
required to give Pledgors any notice of any kind under any circumstances
whatsoever with respect to or in connection with the Obligation, including,
without limitation, notice of acceptance of this Pledge Agreement or any
Collateral ever delivered to or for the account of Secured Party under this
Pledge Agreement; (viii) the illegality, invalidity or unenforceability of all
or any part of the Obligation against Debtor by reason of the fact that the
Obligation, or the interest paid or payable with respect thereto, exceeds the
amount permitted by law; or (ix) if any payment by any party obligated with
respect thereto is held to constitute a preference under applicable laws or for
any other reason Secured Party is required to refund such payment or pay the
amount thereof to someone else.
6
(f) Waivers. Debtor and Pledgors waive (i) any Right to require
Secured Party to proceed against any other person, to exhaust Secured Party's
rights in the Collateral, or to pursue any other right which Secured Party may
have; (ii) with respect to the Obligation, presentment and demand for payment,
protest, notice of protest and nonpayment, notice of acceleration, and notice of
the intention to accelerate; and (iii) all rights of marshaling in respect of
any and all of the Collateral.
(g) Financing Statement. Secured Party shall be entitled at any time
to file this Pledge Agreement, or a carbon, photographic or other reproduction
of this Pledge Agreement, as a financing statement, but the failure of Secured
Party to do so shall not impair the validity or enforceability of this
Agreement.
(h) Amendments. This Pledge Agreement may only be amended by a
writing executed by Pledgors, Debtor and Secured Party.
(i) Multiple Counterparts. This Pledge Agreement may be executed in
any number of identical counterparts with the same effect as if all signatories
had signed the same document. In making proof of this Pledge Agreement, it shall
not be necessary to produce or account for more than one set of counterpart
signatures. Delivery of the executed signature pages by facsimile transmission
shall constitute effective and binding execution and delivery of this Pledge
Agreement.
(j) Parties Bound. This Pledge Agreement shall be binding on and
inure to the benefit of the parties hereto and their respective heirs,
successors, permitted assigns and other legal representatives. Delivery or other
accounting of the Collateral to Pledgors shall discharge Secured Party of all
liability therefor.
(k) Assignment. Pledgors may not assign any rights, duties, or
obligations under this Pledge Agreement without Secured Party's prior written
consent, which consent shall not be unreasonably withheld. In the event of an
assignment of all or part of the Obligation, the Security Interest and other
rights and benefits under this Pledge Agreement, to the extent applicable to the
part of the Obligation so assigned, may be transferred with the Obligation, as
the case may be.
(l) Severability. If any provision of this Pledge Agreement is held
to be illegal, invalid or unenforceable under present or future laws, the
legality, validity and enforceability of the remaining provisions of this Pledge
Agreement shall not be affected thereby, and this Pledge Agreement shall be
liberally construed so as to carry out the intent of the parties to it. Any
waiver contained in this Pledge Agreement is subject to the overriding and
controlling rule that it shall be effective only if and to the extent that (a)
it is not prohibited by applicable law and (b) applicable law neither provides
for nor allows any material sanctions to be imposed against Secured Party for
having bargained for and obtained it.
7
(m) FINAL AGREEMENT. THIS PLEDGE AGREEMENT AND THE NOTE REPRESENT
THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BETWEEN THE PARTIES. THERE
ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.
* * * Signatures appear on next page * * *
8
EXECUTED effective as of the date set forth in the preamble above.
PLEDGORS:
/s/ Al Plant
-----------------------------------
Al Plant
/s/ Xxxx Xxxxx
-----------------------------------
Xxxx Xxxxx
SECURED PARTY:
OXFORD VENTURES, INC.
By /s/ Xxxxxx X. Xxxxxxx
-----------------------------------
Xxxxxx X. Xxxxxxx, President
DEBTOR:
REV'S @ 101, LLC
By /s/ Xxxx Xxxxx
-----------------------------------
Xxxx Xxxxx, Member
9
SCHEDULE 1
TO
PLEDGE AGREEMENT
Pledged Membership Interests
Pledged Certificate
Liens Membership Interests Number(s) Other Issuer
----- -------------------- --------- ------------
Rev's @ 101, LLC A 50% Membership None None
Interest
Rev's @ 101, LLC A 50% Membership None None
Interest
ANNEX "A"
TO
PLEDGE AGREEMENT
FORM OF POWER
FOR VALUE RECEIVED, the undersigned does hereby sell, assign and transfer
_________________________________________________________ all of his/her right
title and interest in and to his/her __% membership interest in Rev's @ 101,
LLC, an Arizona limited liability company (the "Company"), registered in his/her
name on the books of the Company, and does hereby irrevocably constitute and
appoint ___________________________________ as his/her attorney to transfer said
shares on the books of the Company with full power of substitution in the
premises.
Dated: April 8, 2004
PLEDGOR
By ___________________________________
_________________
POWER
FOR VALUE RECEIVED, the undersigned does hereby sell, assign and transfer
unto _________________________________________________________ all of his/her
right title and interest in and to his/her 50% membership interest in Rev's @
101, LLC, an Arizona limited liability company (the "Company"), registered in
his/her name on the books of the Company, and does hereby irrevocably constitute
and appoint ___________________________________ as his/her attorney to transfer
said shares on the books of the Company with full power of substitution in the
premises.
Dated: April 8, 2004
PLEDGOR
By____________________________________
Al Plant
POWER
FOR VALUE RECEIVED, the undersigned does hereby sell, assign and transfer
unto _________________________________________________________ all of his/her
right title and interest in and to his/her 50% membership interest in Rev's @
101, LLC, an Arizona limited liability company (the "Company"), registered in
his/her name on the books of the Company, and does hereby irrevocably constitute
and appoint ___________________________________ as his/her attorney to transfer
said shares on the books of the Company with full power of substitution in the
premises.
Dated: April 8, 2004
PLEDGOR
By____________________________________
Xxxx Xxxxx
