COMMERCIAL PLEDGE AGREEMENT
Exhibit
10.4
|
Principal
|
Loan
Date
|
Maturity
|
Loan
No
|
Call/Coll
|
Account
|
Officer
|
Initials
|
|
|
$1,000,000.00
|
05-16-2008
|
05-16-2009
|
42431
|
10270
|
||||
| References
in the boxes above are for Xxxxxx's use only and do not limit the
applicability of this document to any particular loan or item. Any item
above containing " * * *" has been omitted due to text length limitations.
|
||||||||
|
Borrower:
|
XXXX
X. XXXXXX
0000
XXXXXXX XXXXX XXXXX 000
XXXXXXX,
XX 00000
|
|
Lender:
|
First
National Bank Canyon Branch
00
00 Xxxxxx Xxxx.
Boulder,
CO 80302-51 21
|
|
Grantor:
|
XXXX
X. XXXXXX
0000
XXX XXXX XXXX
XXXXXXX,
XX 00000
|
|||
THIS COMMERCIAL PLEDGE AGREEMENT dated May 16, 2008, is made and executed
among XXXX X. XXXXXX
("Grantor"); AEROGROW
INTERNATIONAL, INC.; and XXXX X. XXXXXX ("Borrower");
and First National Bank ("Lender").
GRANT OF SECURITY INTEREST.
For valuable consideration, Grantor grants to Lender a security interest in the
Collateral to secure the lndebtedness and agrees that Lender shall have the
rights stated in this Agreement with respect to the Collateral, in addition to
all other rights which Lender may have by law.
COLLATERAL DESCRIPTION. The
word "Collateral" as used in this Agreement means Grantor's present and future
rights, title and interest in and to the following described investment
property, together with any and all present and future additions thereto,
substitutions therefor, and replacements thereof, and further together with all
lncome and Proceeds as described herein:
FIRST
NATIONAL BANK INVESTMENT, MANAGEMENT AND TRUST IMA # 4001008195
CROSS-COLLATERALIZATION. In
addition to the Note, this Agreement secures all obligations, debts and
liabilities, plus interest thereon, of either Grantor or Borrower to Lender, or
any one or more of them, as well as all claims by Lender against Borrower and
Grantor or any one or more of them, whether now existing or hereafter arising,
whether related or unrelated to the purpose of the Note, whether voluntary or
otherwise, whether due or not due, direct or indirect, determined or
undetermined, absolute or contingent, liquidated or unliquidated, whether
Borrower or Grantor may be liable individually or jointly with others, whether
obligated as guarantor, surety, accommodation party or otherwise, and whether
recovery upon such amounts may be or hereafter may become barred by any statute
of limitations, and whether the obligation to repay such amounts may be or
hereafter may become otherwise unenforceable.
XXXXXXXX'S WAIVERS AND
RESPONSIBILITIES. Except as otherwise required under this Agreement or by
applicable law, (A) Borrower agrees that Lender need not tell Borrower about any
action or inaction Lender takes in connection with this Agreement; (B) Borrower
assumes the responsibility for being and keeping informed about the Collateral;
and (C) Borrower waives any defenses that may arise because of any action or
inaction of Lender, including without limitation any failure of Lender to
realize upon the Collateral or any delay by Lender in realizing upon the
Collateral; and Xxxxxxxx agrees to remain liable under the Note no matter what
action Lender takes or fails to take under this Agreement.
XXXXXXX'S REPRESENTATIONS AND
WARRANTIES. Grantor warrants that: (A) this Agreement is executed at
Borrower's request and not at the request of Xxxxxx; (6) Grantor has the full
right, power and authority to enter into this Agreement and to pledge the
Collateral to Lender; (C) Grantor has established adequate means of obtaining
from Borrower on a continuing basis information about Borrower's financial
condition; and (D) Lender has made no representation to Grantor about Borrower
or Xxxxxxxx's creditworthiness.
GRANTOR'S WAIVERS. Grantor
waives all requirements of presentment, protest, demand, and notice of dishonor
or non-payment to Borrower or Grantor, or any other party to the lndebtedness or
the Collateral. Lender may do any of the following with respect to any
obligation of any Borrower, without first obtaining the consent of Grantor: (A)
grant any extension of time for any payment, (B) grant any renewal, (C) permit
any modification of payment terms or other terms, or (D) exchange or release any
Collateral or other security. No such act or failure to act shall affect
Xxxxxx's rights against Grantor or the Collateral.
RIGHT OF SETOFF. To the extent
permitted by applicable law, Lender re<xxxxx a right of setoff in all
Grantor's accounts with Lender (whether checking, savings, or some other
account). This includes all accounts Grantor holds jointly with someone else and
all accounts Grantor may open in the future. However, this does not include any
IRA or Xxxxx accounts, or any trust accounts for which setoff would be
prohibited by law. Grantor authorizes Xxxxxx, to the extent permitted by
applicable law, to charge or setoff all sums owing on the lndebtedness against
any and all such accounts, and, at Xxxxxx's option, to administratively freeze
all such accounts to allow Lender to protect Xxxxxx's charge and setoff rights
provided in this paragraph.
REPRESENTATIONS AND WARRANTIES WITH
RESPECT TO THE COLLATERAL. Grantor represents and warrants to Lender
that:
Ownership.
Grantor is the lawful owner of the Collateral free and clear of all security
interests, liens, encumbrances and claims of others except as disclosed to and
accepted by Xxxxxx in writing prior to execution of this Agreement.
Right to
Pledge. Grantor has the full right, power and authority to enter into this
Agreement and to pledge the Collateral.
Authority;
Binding Effect. Grantor has the full right, power and authority to enter into
this Agreement and to grant a security interest in the Collateral to Lender.
This Agreement is binding upon Grantor as well as Grantor's successors and
assigns, and is legally enforceable in accordance with its terms. The foregoing
representations and warranties, and all other representations and warranties
contained in this Agreement are and shall be continuing in nature and shall
remain in full force and effect until such time as this Agreement is terminated
or cancelled as provided herein.
No
Further Assignment. Grantor has not, and shall not, sell, assign, transfer,
encumber or otherwise dispose of any of Grantor's rights in the Collateral
except as provided in this Agreement.
No
Defaults. There are no defaults existing under the Collateral, and there are no
offsets or counterclaims to the same. Grantor will strictly and promptly perform
each of the terms, conditions, covenants and agreements, if any, contained in
the Collateral which are to be performed by Grantor.
No
Violation. The execution and delivery of this Agreement will not violate any law
or agreement governing Grantor or to which Grantor is a party.
Financing
Statements. Grantor authorizes Lender to file a UCC financing statement, or
alternatively, a copy of this Agreement to perfect Xxxxxx's security interest.
At Xxxxxx's request, Xxxxxxx additionally agrees to sign all other documents
that are necessary to perfect, protect, and continue Xxxxxx's security interest
in the Property. Grantor will pay all filing fees, title transfer fees, and
other fees and costs involved unless prohibited by law or unless Lender is
required by law to pay such fees and costs. Grantor irrevocably appoints Xxxxxx
to execute documents necessary to transfer title if there is a default. Lender
may file a copy of this Agreement as a financing statement. If Grantor changes
Grantor's name or address, or the name or address of any person granting a
security interest under this Agreement changes, Grantor will promptly notify the
Lender of such change.
XXXXXX'S RIGHTS AND OBLIGATIONS WlTH
RESPECT TO THE COLLATERAL. Lender may hold the Collateral until all
lndebtedness has been paid and satisfied. Thereafter Lender may deliver the
Collateral to Grantor or to any other owner of the Collateral. Lender shall have
the following rights in addition to all other rights Lender may have by
law:
Maintenance
and Protection of Collateral. Lender may, but shall not be obligated to, take
such steps as it deems necessary or desirable to protect, maintain, insure,
store, or care for the Collateral, including paying of any liens or claims
against the Collateral. This may include such things as hiring other people,
such as attorneys, appraisers or other experts. Xxxxxx may charge Grantor for
any cost incurred in so doing. When applicable law provides more than one method
of perfection of Xxxxxx's security interest, Xxxxxx may choose the method(s1 to
be used.
lncome
and Proceeds from the Collateral. Lender may receive all lncome and Proceeds and
add it to the Collateral. Xxxxxxx agrees to deliver to Xxxxxx immediately upon
receipt, in the exact form received and without commingling with other property,
all lncome and Proceeds from the Collateral which may be received by, paid, or
delivered to Grantor or for Grantor's account, whether as an addition to, in
discharge of, in substitution of, or in exchange for any of the
Collateral.
Application
of Cash. At Lender's option, Lender may apply any cash, whether included in the
Collateral or received as lncome and Proceeds or through liquidation, sale, or
retirement, of the Collateral, to the satisfaction of the lndebtedness or such
portion thereof as Lender shall choose, whether or not matured.
Transactions
with Others. Lender may (1)
extend time for payment or other performance, (2) grant a renewal or
change in terms or Loan No Calf
t Coll Account Officer
lnitlals
COMMERCIAL PLEDGE AGREEMENT Loan No:
42431 (Continued) Page 2
conditions,
or (3) compromise, compound or release any obligation, with any one or more
Obligors, endorsers, or Guarantors of the lndebtedness as Lender deems
advisable, without obtaining the prior written consent of Grantor, and no such
act or failure to act shall affect Xxxxxx's rights against Grantor or the
Collateral.
All
Collateral Secures Indebtedness. All Collateral shall be security for the
Indebtedness, whether the Collateral is located at one or more offices or
branches of Lender. This will be the case whether or not the office or branch
where Grantor obtained Grantor's loan knows about the Collateral or relies upon
the Collateral as security.
Collection
of Collateral. Xxxxxxx agrees that Xxxxxx may, at any time and for any reason,
whether or not Borrower and Grantor are then in default under any indebtedness,
collect the lncome and Proceeds directly from the Obligors. Grantor authorizes
and directs the Obligors, if Xxxxxx decides to collect the lncome and Proceeds,
to pay and deliver to Lender all lncome and Proceeds from the Collateral and to
accept Xxxxxx's receipt for the payments.
Power of
Attorney. Grantor irrevocably appoints Lender as Grantor's attorney-in-fact,
with full power of substitution, (a) to demand, collect, receive, receipt for,
sue and recover all lncome and Proceeds and other sums of money and other
property which may now or hereafter become due, owing or payable from the
Obligors in accordance with the terms of the Collateral; (b) to execute, sign
and endorse any and all instruments, receipts, checks, drafts and warrants
issued in payment for the Collateral; (c) to settle or compromise any and all
claims arising under the Collateral, and in the place and stead of Grantor,
execute and deliver Grantor's release and acquittance for Grantor; (d) to file
any claim or claims or to take any action or institute or take part in any
proceedings, either in Xxxxxx's own name or in the name of Grantor, or
otherwise, which in the discretion of Lender may seem to be necessary or
advisable; and (e) to execute in Grantor's name and to deliver to the Obligors
on Grantor's behalf, at the time and in the manner specified by the Collateral,
any necessary instruments or documents.
Perfection
of Security Interest. Upon Xxxxxx's request, Grantor will deliver to Lender any
and all of the documents evidencing or constituting the Collateral. When
applicable law provides more than one method of perfection of Xxxxxx's security
interest, Xxxxxx may choose the method(s1 to be used. Upon Xxxxxx's request,
Grantor will sign and deliver any writings necessary to perfect Xxxxxx's
security interest. Grantor hereby appoints Xxxxxx as Xxxxxxx's irrevocable
attorney-in-fact for the purpose of executing any documents necessary to
perfect, amend, or to continue the security interest granted in this Agreement
or to demand termination of filings of other secured parties. This is a
continuing Security Agreement and will continue in effect even though all or any
part of the lndebtedness is paid in full and even though for a period of time
Borrower may not be indebted to Lender.
XXXXXX'S EXPENDITURES. If any
action or proceeding is commenced that would materially affect Xxxxxx's interest
in the Collateral or if Grantor fails to comply with any provision of this
Agreement or any Related Documents, including but not limited to Grantor's
failure to discharge or pay when due any amounts Grantor is required to
discharge or pay under this Agreement or any Related Documents, Lender on
Grantor's behalf may (but shall not be obligated to) take any action that Lender
deems appropriate, including but not limited to discharging or paying all taxes,
liens, security interests, encumbrances and other claims, at any time levied or
placed on the Collateral and paying all costs for insuring, maintaining and
preserving the Collateral. All such expenditures incurred or paid by Lender for
such purposes will then bear interest at the rate charged under the Note from
the date incurred or paid by Lender to the date of repayment by Grantor. All
such expenses will become a part of the lndebtedness and, at Lender's option,
will (A) be payable on demand; (B) be added to the balance of the Note and be
apportioned among and be payable with any installment payments to become due
during either (1) the
term of any applicable insurance policy; or (2) the remaining term of the Note;
or (C) be treated as a balloon payment which will be due and payable at the
Note's maturity. The Agreement also will secure payment of these amounts. Such
right shall be in addition to all other rights and remedies to which Xxxxxx may
be entitled upon Default.
LlMlTATlONS ON OBLIGATIONS OF
LENDER. Lender shall use ordinary reasonable care in the physical
preservation and custody of the Collateral in Xxxxxx's possession, but shall
have no other obligation to protect the Collateral or its value. In particular,
but without limitation, Lender shall have no responsibility for (A) any
depreciation in value of the Collateral or for the collection or protection of
any lncome and Proceeds from the Collateral, (B) preservation of rights against
parties to the Collateral or against third persons, (C) ascertaining any
maturities, calls, conversions, exchanges, offers, tenders, or similar matters
relating to any of the Collateral, or (D) informing Grantor about any of the
above, whether or not Lender has or is deemed to have knowledge,of such matters.
Except as provided above, Lender shall have no liability for depreciation or
deterioration of the Collateral.
DEFAULT. Each of the following
shall constitute an Event of Default under this Agreement:
Payment
Default. Borrower fails to make any payment when due under the
Indebtedness.
Other
Defaults. Borrower or Grantor fails to comply with or to perform any other term,
obligation, covenant or condition contained in this Agreement or in any of the
Related Documents or to comply with or to perform any term, obligation, covenant
or condition contained in any other agreement between Lender and Borrower or
Grantor.
Default
in Favor of Third Parties. Borrower or Grantor defaults under any loan,
extension of credit, security agreement, purchase or sales agreement, or any
other agreement, in favor of any other creditor or person that may materially
affect any of Borrower's or Grantor's property or ability to perform their
respective obligations under this Agreement or any of the Related
Documents.
False
Statements. Any warranty, representation or statement made or furnished to
Lender by Borrower or Grantor or on Borrower's or Grantor's behalf, or made by
Guarantor, or any other guarantor, endorser, surety, or accommodation party,
under this Agreement or the Related Documents in connection with the obtaining
of the lndebtedness evidenced by the Note or any security document directly or
indirectly securing repayment of the Note is false or misleading in any material
respect, either now or at the time made or furnished or becomes false or
misleading at any time thereafter.
Defective
Collateralization. This Agreement or any of the Related Documents ceases to be
in full force and effect (including failure of any collateral document to create
a valid and perfected security interest or lien) at any time and for any
reason.
Death or
Interdiction. The death of Borrower or Grantor or the dissolution or termination
of Xxxxxxxx's or Grantor's existence as a going business, the insolvency of
Borrower or Grantor, the appointment of a receiver for any part of Xxxxxxxx's or
Grantor's property, any assignment for the benefit of creditors, any type of
creditor workout, or the commencement of any proceeding under any bankruptcy or
insolvency laws by or against Borrower or Grantor.
Creditor
or Forfeiture Proceedings. Commencement of foreclosure or forfeiture
proceedings, whether by judicial proceeding, self-help, repossession or any
other method, by any creditor of Borrower or Grantor or by any governmental
agency against any collateral securing the Indebtedness. This includes a
garnishment of any of Borrower's or Grantor's accounts, including deposit
accounts, with Lender. However, this Event of Default shall not apply if there
is a good faith dispute by Borrower or Grantor as to the validity or
reasonableness of the claim which is the basis of the creditor or forfeiture
proceeding and if Borrower or Grantor gives Xxxxxx written notice of the
creditor or forfeiture proceeding and deposits with Lender monies or a surety
bond for the creditor or forfeiture proceeding, in an amount determined by
Lender, in its sole discretion, as being an adequate reserve or bond for the
dispute.
Execution;
Attachment. Any execution or attachment is levied against the Collateral, and
such execution or attachment is not set aside, discharged or stayed within
thirty (30) days after the same is levied.
Change in
Zoning or Public Restriction. Any change in any zoning ordinance or regulation
or any other public restriction is enacted, adopted or implemented, that limits
or defines the uses which may be made of the Collateral such that the present or
intended use of the Collateral, as specified in the Related Documents, would be
in violation of such zoning ordinance or regulation or public restriction, as
changed.
Default
Under Other Lien Documents. A default occurs under any other mortgage, deed of
trust or security agreement covering all or any portion of the
Collateral.
Judgment.
Unless adequately covered by insurance in the opinion of Xxxxxx, the entry of a
final judgment for the payment of money involving more than ten thousand dollars
($10,000.00) against Borrower or Grantor and the failure by Borrower or Grantor
to discharge the same, or cause it to be discharged, or bonded off to Lender's
satisfaction, within thirty (30) days from the date of the order, decree or
process under which or pursuant to which such judgment was entered.
Events
Affecting Guarantor. Any of the preceding events occurs with respect to any
Guarantor, or any other guarantor, endorser, surety, or accommodation party of
any of the lndebtedness or Guarantor, or any other guarantor, endorser, surety,
or accommodation party dies or becomes incompetent or revokes or disputes the
validity of, or liability under, any Guaranty of the Indebtedness.
Adverse
Change. A material adverse change occurs in Borrower's or Grantor's financial
condition, or Xxxxxx believes the prospect of payment or performance of the
lndebtedness is impaired.
Insecurity.
Lender in good faith believes itself insecure.
Loan No: 42431 COMMERCIAL PLEDGE
AGREEMENT (Continued) Page 3
RIGHTS AND REMEDIES ON
DEFAULT. If an Event of Default occurs under this Agreement, at any time
thereafter, Lender may exercise any one or more of the following rights and
remedies:
Accelerate
Indebtedness. Declare all Indebtedness, including any prepayment penalty which
Borrower would be required to pay, immediately due and payable, without notice
of any kind to Borrower or Grantor.
Collect
the Collateral. Collect any of the Collateral and, at ~ender'so ption and to the
extent permitted by applicable law, retain possession of the Collateral while
suing on the Indebtedness.
Sell the
Collateral. Sell the Collateral, at Xxxxxx's discretion, as a unit or in
parcels, at one or more public or private sales. Unless the Collateral is
perishable or threatens to decline speedily in value or is of a type customarily
sold on a recognized market, Lender shall give or mail to Grantor, and other
persons as required by law, notice at least ten (10) days in advance of the time
and place of any public sale, or of the time after which any private sale may be
made. Xxxxxxx, no notice need be provided to any person who, after an Event of
Default occurs, enters into and authenticates an agreement waiving that person's
right to notification of sale. Grantor agrees that any requirement of reasonable
notice as to Grantor is satisfied if Lender mails notice by ordinary mail
addressed to Grantor at the last address Grantor has given Lender in writing. If
a public sale is held,
there shall be sufficient compliance with all requirements of notice to the
public by a single publication in any newspaper of general circulation in the
county where the Collateral is located, setting forth the time and place of sale
and a brief description of the property to be sold. Lender may be a purchaser at
any public sale.
Sell
Securities. Sell any securities included in the Collateral in a manner
consistent with applicable federal and state securities laws. If, because of
restrictions under such laws, Xxxxxx is unable, or believes Xxxxxx is unable, to
sell the securities in an open market transaction, Grantor agrees that Lender
will have no obligation to delay sale until the securities can be registered.
Then Lender may make a private sale to one or more persons or to a restricted
group of persons, even though such sale may result in a price that is less
favorable than might be obtained in an open market transaction. Such a sale will
be considered commercially reasonable. If any securities held as Collateral are
"restricted securities" as defined in the Rules of the Securities and Exchange
Commission (such as Regulation D or Rule 144) or the rules of state securities
departments under state "Blue Sky" laws, or if Grantor or any other owner of the
Collateral is an affiliate of the issuer of the securities, Xxxxxxx agrees that
neither Grantor, nor any member of Grantor's family, nor any other person
signing this Agreement will sell or dispose of any securities of such issuer
without obtaining Xxxxxx's prior written consent.
Foreclosure.
Maintain a judicial suit for foreclosure and sale of the
Collateral.
Specific
Performance. Lender may, in addition to or in lieu of the foregoing remedies, in
Xxxxxx's sole discretion, commence an appropriate action against Grantor seeking
specific performance of any covenant contained in this Agreement or in aid of
the execution or enforcement of any power in this Agreement
granted.
Transfer
Title. Effect transfer of title upon sale of all or part of the Collateral. For
this purpose, Xxxxxxx irrevocably appoints Xxxxxx as Xxxxxxx's attorney-in-fact
to execute endorsements, assignments and instruments in the name of Grantor and
each of them (if more than one) as shall be necessary or
reasonable.
Other
Rights and Remedies. Have and exercise any or all of the rights and remedies of
a secured creditor under the provisions of the Uniform Commercial Code, at law,
in equity, or otherwise.
Application
of Proceeds. Apply any cash which is part of the Collateral, or which is
received from the collection or sale of the Collateral, to reimbursement of any
expenses, including any costs for registration of securities, commissions
incurred in connection with a sale, attorneys' fees and court costs, whether or
not there is a lawsuit and including any fees on appeal, incurred by Lender in
connection with the collection and sale of such Collateral and to the payment of
the Indebtedness of Borrower to Lender, with any excess funds to be paid to
Grantor as the interests of Grantor may appear. Xxxxxxxx agrees, to the extent
permitted by law, to pay any deficiency after application of the proceeds of the
Collateral to the Indebtedness.
Election
of Remedies. Except as may be prohibited by applicable law, all of Xxxxxx's
rights and remedies, whether evidenced by this Agreement, the Related Documents,
or by any other writing, shall,be cumulative and may be exercised singularly or
concurrently. Election by Xxxxxx to pursue any remedy shall not exclude pursuit
of any other remedy, and an election to make expenditures or to take action to
perform an obligation of Grantor under this Agreement, after Xxxxxxx's failure
to perform, shall not affect Xxxxxx's right to declare a default and exercise
its remedies.
MISCELLANEOUS PROVISIONS. The
following miscellaneous provisions are a part of this Agreement:
Amendments.
This Agreement, together with any Related Documents, constitutes the entire
understanding and agreement of the parties as to the matters set forth in this
Agreement. No alteration of or amendment to this Agreement shall be effective
unless given in writing and signed by the party or parties sought to be charged
or bound by the alteration or amendment.
Attorneys'
Fees: Expenses. Xxxxxxx agrees to pay upon demand all of Xxxxxx's reasonable
costs and expenses, including Xxxxxx's attorneys' fees and Xxxxxx's legal
expenses, incurred in connection with the enforcement of this Agreement. Lender
may hire or pay someone else to help enforce this Agreement, and Grantor shall
pay the reasonable costs and expenses of such enforcement. Costs and expenses
include Xxxxxx's attorneys' fees and legal expenses whether or not there is a
lawsuit, including attorneys' fees and legal expenses for bankruptcy proceedings
(including efforts to modify or vacate any automatic stay or injunction),
appeals, and any anticipated post-judgment collection services. Grantor also
shall pay all court costs and such additional fees as may be directed by the
court.
Caption
Headings. Caption headings in this Agreement are for convenience purposes only
and are not to be used to interpret or define the provisions of this
Agreement.
Governing
Law. This Agreement will be governed by federal law applicable to Lender and, to
the extent not preempted by federal law, the laws of the State of Colorado
without regard to its conflicts of law provisions. This Agreement has been
accepted by Xxxxxx in the State of Colorado.
Choice of
Venue. If there is a lawsuit, Xxxxxxx agrees upon Xxxxxx's request to submit to
the jurisdiction of the courts of Boulder County, State of
Colorado.
Joint and
Several Liability. All obligations of Borrower and Grantor under this Agreement
shall be joint and several, and all references to Grantor shall mean each and
every Grantor, and all references to Borrower shall mean each and every
Borrower. This means that each Borrower and Grantor signing below is responsible
for all obligations in this Agreement.
No Waiver
by Xxxxxx. Lender shall not be deemed to have waived any rights under this
Agreement unless such waiver is given in writing and signed by Xxxxxx. No delay
or omission on the part of Lender in exercising any right shall operate as a
waiver of such right or any other right. A waiver by Xxxxxx of a provision of
this Agreement shall not prejudice or constitute a waiver of Lender's right
otherwise to demand strict compliance with that provision or any other provision
of this Agreement. No prior waiver by Xxxxxx, nor any course of dealing between
Xxxxxx and Grantor, shall constitute a waiver of any of Lender's rights or of
any of Grantor's obligations as to any future transactions. Whenever the consent
of Lender is required under this Agreement, the granting of such consent by
Lender in any instance shall not constitute continuing consent to subsequent
instances where such consent is required and in all cases such consent may be
granted or withheld in the sole discretion of Lender.
Non-Liability
of Lender. The relationship between Xxxxxxxx and Grantor and Xxxxxx created by
this Agreement is strictly a debtor and creditor relationship and not fiduciary
in nature, nor is the relationship to be construed as creating any partnership
or joint venture between Xxxxxx and Xxxxxxxx and Grantor. Borrower and Grantor
are exercising Xxxxxxxx's and Xxxxxxx's own judgment with respect to Xxxxxxxx's
and Xxxxxxx's business. All information supplied to Lender is for Xxxxxx's
protection only and no other party is entitled to rely on such information.
There is no duty for Lender to review, inspect, supervise or inform Xxxxxxxx and
Grantor of any matter with respect to Xxxxxxxx's and Xxxxxxx's business. Xxxxxx
and Xxxxxxxx and Grantor intend that Lender may reasonably rely on ail
information supplied by Borrower and Grantor to Lender, together with all
representations and warranties given by Borrower and Grantor to Lender, without
investigation or confirmation by Xxxxxx and that any investigation or failure to
investigate will not diminish Xxxxxx's right to so rely.
Notices.
Any notice required to be given under this Agreement shall be given in writing,
and shall be effective when actually delivered, when actually received by
telefacsimile (unless otherwise required by law), when deposited with a
nationally recognized overnight courier, or, if mailed, when deposited in the
United States mail, as first class, certified or registered mail postage
prepaid, directed to the addresses shown near the beginning of this Agreement.
Any party may change its address for notices under this Agreement by giving
formal written notice to the other parties, specifying that the purpose of the
notice is to change the party's address. For notice purposes, Xxxxxxx agrees to
keep Xxxxxx informed at all times of Xxxxxxx's current address. Unless otherwise
provided or required by law, if there is more than one Grantor, any notice given
by Lender to any Grantor is deemed to be notice given to all
Grantors.
Severability.
If a court of competent jurisdiction finds any provision of this Agreement to be
illegal, invalid, or unenforceable as to any
COMMERCIAL PLEDGE AGREEMENT Loan No:
42431 (Continued) Page 4
circumstance,
that finding shall not make the offending provision illegal, invalid, or
unenforceable as to any other circumstance. If feasible, the offending provision
shall be considered modified so that it becomes legal, valid and enforceable. If
the offending provision cannot be so modified, it shall be considered deleted
from this Agreement. Unless otherwise required by law, the illegality,
invalidity, or unenforceability of any provision of this Agreement shall not
affect the legality, validity or enforceability of any other provision of this
Agreement.
Sole
Discretion of Lender. Whenever Xxxxxx's consent or approval is required under
this Agreement, the decision as to whether or,not to consent or approve shall be
in the sole and exclusive discretion of Lender and Xxxxxx's decision shall be
final and conclusive.
Successors
and Assigns. Subject to any limitations stated in this Agreement on transfer of
Grantor's interest, this Agreement shall be binding upon and inure to the
benefit of the parties, their successors and assigns. If ownership of the
Collateral becomes vested in a person other than Grantor, Lender, without notice
to Grantor, may deal with Grantor's successors with reference to this Agreement
and the lndebtedness by way of forbearance or extension without releasing
Grantor from the obligations of this Agreement or liability under the
Indebtedness.
Time is
of the Essence. Time is of the essence in the performance of this Agreement.
Waive
Jury. All parties to this Agreement hereby waive the right to any jury trial in
any action, proceeding, or counterclaim brought by any party against any other
party.
DEFINITIONS.
The following capitalized words and terms shall have the /allowing meanings when
used in this Agreement. Unless specifically stated to the contrary, all
references to dollar amounts shall mean amounts in lawful money of the United
States of America. Words and terms used in the singular shall include the
plural, and the plural shall include the singular, as the context may require.
Words and terms not otherwise defined in this Agreement shall have the meanings
attributed to such terms in the Uniform Commercial Code:
Agreement.
The word "Agreement" means this Commercial Pledge Agreement, as this Commercial
Pledge Agreement may be amended or modified from time to time, together with all
exhibits and schedules attached to this Commercial Pledge Agreement from time to
time.
Borrower.
The word "Borrower" means AEROGROW INTERNATIONAL, INC.;
and XXXX X. XXXXXX and
includes all co-signers and co-makers signing the Note and all their successors
and assigns.
Collateral.
The word "Collateral" means all of Grantor's right, title and interest in and to
all the Xxxxxxxxxx.xx described in the Collateral Description section of this
Agreement.
Default.
The word "Default" means the Default set forth in this Agreement in the section
titled "Default".
Event of
Default. The words "Event of Default" mean individually, collectively, and
interchangeably any of the events of default set forth in this Agreement in the
default section of this Agreement.
Grantor.
The word "Grantor" means XXXX X. XXXXXX.
Guarantor.
The word "Guarantor" means any guarantor, surety, or accommodation party of any
or all of the Indebtedness, and, in each case, Xxxxxxx's successors, assigns,
heirs, personal representatives, executors and administrators of any guarantor,
surety, or accommodation party.
Guaranty.
The word "Guaranty" means the guaranty from Guarantor, or any other guarantor,
endorser, surety, or accommodation party to Lender, including without limitation
a guaranty of all or part of the Note.
lncome
and Proceeds. The words "lncome and Proceeds" mean all present and future
income, proceeds, earnings, increases, and substitutions from or for the
Collateral of every kind and nature, including without limitation all payments,
interest, profits, distributions, benefits, rights, options, warrants,
dividends, stock dividends, stock splits, stock rights, regulatory dividends,
subscriptions, monies, claims for money due and to become due, proceeds of any
insurance on the Collateral, shares of stock of different par value or no par
value issued in substitution or exchange for shares included in the Collateral,
and all other property Grantor is entitled to receive on account of such
Collateral, including accounts, documents, instruments, chattel paper,
investment property, and general intangibles.
Indebtedness.
The word "lndebtedness" means the indebtedness evidenced by the Note or Related
Documents, including all principal and interest together with all other
indebtedness and costs and expenses for which Borrower is responsible under this
Agreement or under any of the Related Documents. Specifically, without
limitation, lndebtedness includes all amounts that may be indirectly secured by
the Cross-Collateralization provision of this Agreement.
Lender.
The word "Lender" means First National Bank, its successors and
assigns.
Note. The
word "Note" means the Note executed by AEROGROW INTERNATIONAL, INC.;
and XXXX X. XXXXXX in
the principal amount of $1,000,000.00 dated May 16, 2008, together with all
renewals of, extensions of, modifications of, refinancings of, consolidations
of, and substitutions for the note or credit agreement.
Obligor.
The word "Obligor" means individually, collectively and interchangeably without
limitation any and all persons obligated to pay money or to perform some other
act under the Collateral.
Property.
The word "Property" means all of Grantor's right, title and interest in and to
all the Property as described in the "Collateral Description" section of this
Agreement.
Related
Documents. The words "Related Documents" mean all promissory notes, credit
agreements, loan agreements, environmental agreements, guaranties, security
agreements, mortgages, deeds of trust, security deeds, collateral mortgages, and
all other instruments, agreements and documents, whether now or hereafter
existing, executed in connection with the Indebtedness.
BORROWER
AND GRANTOR HAVE READ AND UNDERSTOOD ALL THE PROVISIONS OF THlS COMMERCIAL
PLEDGE AGREEMENT AND AGREE TO ITS TERMS. THlS AGREEMENT IS DATED MAY 16, 2008.
GRANTOR:
X
XXXX
X. XXXXXX, Individually
BORROWER:
By:
XXXXXX
X. XXXXXXX, President of AEROGROW INTERNATIONAL, INC.
X
XXXX
X. XXXXXX, Individually
ADDENDUM
to
between
AEROGROW
INTERNATIONAL, INC. and XXXX X. XXXXXX (collectively the “Borrower”)
and
FIRST
NATIONAL BANK (“Lender”)
Dated
May 19, 2008
The
provisions of this Addendum shall be considered additional provisions to that
certain Commercial Pledge Agreement (the “Agreement”)
of even date herewith and incorporated therein. To the extent that
the provisions of this Addendum conflict with the provisions of the Agreement,
the provisions of this Addendum shall govern. Capitalized terms not
defined herein shall have the meanings ascribed to them in the
Agreement.
1. The
subsection of the Agreement entitled “DEFAULT” is amended and restated to read
in its entirety as follows:
|
|
Default. Each
of the following shall constitute an Event of Default under this
Agreement:
|
|
|
Payment
Default. Borrower fails to make any payment when due
under this Note.
|
|
|
Other
Defaults. Borrower fails to comply with or to perform
any other term, obligation, covenant or condition contained in the
Business Loan Agreement (the “Agreement”)
between the Borrowers and the Lender of even date herewith or in any of
the Related Documents (as defined in the Agreement) or to comply with or
to perform any term, obligation, covenant or condition contained in any
other agreement between Borrowers and the Lender and such failure to
comply or perform remains uncured for a period of three (3)
days.
|
|
|
Default in Favor of
Third Parties. Borrowers or any Guarantor defaults under
any loan, extension of credit, security agreement, purchase or sales
agreement, or any other agreement, in favor of any other creditor or
person that may materially affect any of Borrower’s or any Guarantor’s
property or Borrower’s or any Guarantor’s ability to repay the Loans or
perform their respective obligations under the Agreement or any of the
Related Documents and such default remains uncured for a period of three
(3) days.
|
|
|
False
Statements. Any warranty, representation or statement
made, or furnished to Lender by Borrowers or on Borrowers’ behalf under
the Agreement or the Related Documents is false or misleading in any
material respect, either now or at the time made or furnished or becomes
false or misleading at any time
thereafter.
|
|
|
Insolvency. The
dissolution or termination of Aerogrow International, Inc existence as a
going business, the insolvency of Borrowers, the appointment of a receiver
for any part of Borrowers’ property, any assignment for the benefit of
creditors, any type of creditor workout, or the commencement of any
proceeding under any bankruptcy or insolvency laws by or against Borrowers
and such proceeding under any bankruptcy or insolvency laws remains
unstayed for a period of forty five (45)
days.
|
|
|
Defective
Collateralization. The Agreement or any of the Related
Documents ceases to be in full force and effect (including failure of any
collateral document to create a valid and perfected security interest or
lien) at any time and for any
reason.
|
|
|
Creditor or Forfeiture
Proceedings. Commencement of foreclosure or forfeiture
proceedings, whether by judicial proceeding, self-help, repossession or
any other method, by any creditor of a Borrower or by any governmental
agency against any collateral securing the obligations arising under this
Note or the Agreement or Related Documents. This includes a
garnishment of any of a Borrowers’ accounts, including deposit accounts,
with Lender. However, this Event of Default shall not apply if
there is a good faith dispute by Xxxxxxxxx as to the validity or
reasonableness of the claim which is the basis of the creditor or
forfeiture proceeding and if Borrowers give Lender written notice of the
creditor or forfeiture proceeding and deposits with Lender monies or a
surety bond for the creditor or forfeiture proceeding, in an amount
determined by Lender, in its sole discretion, as being an adequate reserve
or bond for the dispute.
|
|
|
Events Affecting
Guarantor. Any of the preceding events occurs with
respect to any Guarantor of any of the indebtedness or any Guarantor dies
or becomes incompetent, or revokes or disputes the validity of, or
liability under, any Guaranty of the
Indebtedness.
|
|
|
Change in
Ownership. Any change in ownership of fifty percent
(50%) or more of the common stock of AeroGrow International,
Inc.
|
|
|
Adverse
Change. A material adverse change occurs in any
Borrower’s financial condition, or Xxxxxx believes the prospect or payment
or performance of the Note or the obligations arising under the Loan
Agreement and Related Documents is impaired and such condition remains
uncured for a period of three (3) days after notice from the
Borrower.
|
|
|
Insecurity. Lender
in good faith believes itself insecure and such belief remains uncured for
a period of three (3) days after notice to the
Borrowers.
|
2.
All other terms and conditions
of the Agreement remain the same.
In Witness Whereof, Grantor, Xxxxxxxx and Xxxxxx agree to and acknowledge the terms of this Addendum.
BORROWER: LENDER:
AEROGROW INTERNATIONAL,
INC. FIRST
NATIONAL BANK
By: ____________________________ By: ________________________
Xxxxxx X.
Xxxxxxx
Xxx X. Xxxxxx
President Vice
President
____________________________________________
XXXX X.
XXXXXX, individually
GRANTOR:
____________________________
XXXX X.
XXXXXX
