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Exhibit 10.1
TEMPORARY AMENDMENT TO LOAN AND SECURITY AGREEMENT
THIS TEMPORARY AMENDMENT TO LOAN AND SECURITY AGREEMENT
("Amendment") is made and effective this 1st day of January, 2009
by and among AEROGROW INTERNATIONAL, INC. (“Borrower”),
JACK J. WALKER (“Guarantor”; Borrower and Guarantor are
collectively referred to herein as “Obligors”) and FCC,
LLC d/b/a First Capital ("Lender").
WHEREAS, Lender and Borrower are parties to a certain Loan and
Security Agreement, dated June 23, 2008 (as amended from time to
time, the "Agreement") pursuant to which Lender makes loans and
other extensions of credit to Borrower, which loans and extensions
of credit are secured by security interests upon the
Collateral, and guaranteed unconditionally by Guarantor;
and
WHEREAS, the Agreement establishes a secured lending facility
limited to a Borrowing Base, which limits the amount that Borrower
may borrow under the Agreement (“Original Borrowing
Base”); and
WHEREAS, the parties desire to increase temporarily the Original
Borrowing Base as hereinafter set forth in order to permit Borrower
to borrow increased funds under the Agreement.
NOW THEREFORE, in consideration of the mutual conditions and
agreements set forth in the Agreement and this Amendment, and other
good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto hereby agree as
follows:
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1.
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Definitions. Capitalized terms used in this
Amendment, unless otherwise defined herein, shall have the meaning
ascribed to such term in the Agreement.
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2.
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Temporary Amendments. The amendments herein shall
only be applicable beginning January 1, 2009 and ending
January 31, 2009 (“Temporary Amendment
Period”). On February 1, 2009, the increase to the
Original Borrowing Base herein shall become null and void and the
Borrowing Base shall revert to the Original Borrowing Base.
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3.
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Temporary Increase to the Original Borrowing
Base. This Amendment represents a temporary increase in
the Original Borrowing Base. As such, on February 1,
2009 Borrower shall repay the loans under the Agreement in an
amount sufficient to comply with the Original Borrowing Base in
effect. Subject to the conditions set forth below, the
Agreement is amended for the term of the Temporary Amendment Period
by deleting Item 1(a)(ii)(B)(2) of the Schedule to the Agreement
and replacing it with the following:
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(i) from January 1, 2009 through January 31, 2009 Item
1(a)(ii)(B)(2) of the Schedule shall read:
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(2)
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60% of the dollar value (determined at the lower of cost or
market value)of Eligible Inventory.
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provided, however, that the aggregate principal amount available
to be borrowed against Eligible Inventory under this clause (B)
shall not exceed 70% of the Obligations outstanding at any
time.
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4. Conditions. The effectiveness of this
Amendment is subject to the following conditions precedent (unless
specifically waived in writing by Lender):
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(a)
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Borrower shall have executed and delivered such other documents
and instruments as Lender may require.
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(b)
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All proceedings taken in connection with the transactions
contemplated by this Amendment and all documents, instruments and
other legal matters incident thereto shall be satisfactory to
Lender and its legal counsel.
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(c)
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No Default shall be continuing.
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(d)
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There shall have occurred no material adverse change in the
business, operations, financial condition, profits or prospects of
Borrower, or in the Collateral.
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(e)
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Borrower shall pay a document fee to Lender in the amount of
$2,000.00 (“Document Fee”). The Document Fee
shall shall be earned at closing of this Amendment and is
non-refundable.
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(f)
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Guarantor shall execute and deliver to Lender a Limited Guaranty
of Individual in form and substance substantially similar to the
agreement attached to this Amendment as Exhibit
“A.”
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5. Representations
and Warranties of Obligors. Each Obligor represents and
warrants that (a) no Default exists under the Agreement; (b) the
representations and warranties of Borrower contained in the
Agreement were true and correct in all material respects when made
and continue to be true and correct in all material respects on the
date hereof; (c) t
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