amendedandrestatedpledge






                                                                   CONFORMED COPY                          Incorporating Amendment No. 2 to Credit Agreement, dated March 5, 2020                                                                              EXHIBIT E                                                                     CONFORMED COPY                                       Incorporating Amendment No. 2, dated March 5, 2020; and                                                       Amendment No. 3, dated July 23, 2020            AMENDED AND RESTATED PLEDGE AND SECURITY AGREEMENT         THIS AMENDED AND RESTATED PLEDGE AND SECURITY AGREEMENT (as the same may  be  amended,  restated,  supplemented  or  otherwise  modified  from  time  to  time,  this  “Security Agreement ”)  is  entered  into  as  of  November  6,  2018  by  and  among  Farmer  Bros.  Co.,  a  Delaware corporation  (the  “Borrower ”),  Boyd  Assets  Co.,  a  Delaware  corporation  (“Boyd   Assets ”),  China  Mist Brands,  Inc.,  a  Delaware  corporation  (“China   Mist ”),  Coffee  Bean  International,  Inc.,  an  Oregon corporation (“Coffee Bean ”), FBC Finance Company, a California corporation (“FBC ”), and Coffee Bean Holding Co., Inc., a Delaware corporation (“Coffee   Bean   Holdings ”, and together with the Borrower, Boyd Assets, China Mist, Coffee Bean, and FBC, each an “Initial  Grantor ”; the Initial Grantors, together with any additional Subsidiaries, whether now existing or hereafter formed or acquired which become parties  to  this  Security  Agreement  from  time  to  time,  in  accordance  with  the  terms  of  the  Credit Agreement (as defined below), by executing a Supplement hereto in substantially the form of Annex  I (each, a “Security  Agreement  Supplement ”), collectively, the “Grantors ”), and JPMorgan Chase Bank, N.A., in its capacity as administrative agent (the “Administrative  Agent ”) for itself and for the Secured Parties (as defined in the Credit Agreement identified below).                               PRELIMINARY STATEMENTS         WHEREAS,  the  Initial  Grantors,  the  Lenders  party  thereto  and  the  Administrative  Agent  are entering into an Amended and Restated Credit Agreement dated as of November 6, 2018 (as the same may  be  amended,  restated,  supplemented  or  otherwise  modified  from  time  to  time,  the  “Credit Agreement ”), which  Credit  Agreement  amends  and  restates  in  its  entirety  the  Existing  Credit  Agreement (as defined in the Credit Agreement) ;         WHEREAS,   the  Credit  Agreement,  among  other  things,  re-evidences  the  Borrower’s  outstanding obligations   under   the   Existing   Credit   Agreement   and  provides,  subject  to  the  terms  and  conditions thereof, for extensions of credit and other financial accommodations to be made by the Lenders to or for the benefit of the Borrower ;         WHEREAS,    as   a   condition   precedent   to   the   effectiveness   of   the   Existing   Credit   Agreement, certain  of  the  Initial  Grantors  entered  into  the  Pledge  and  Security  Agreement,  dated  as  of  March  2,  2015 with  the  Administrative  Agent  (as  amended,  restated,  supplemented  or  otherwise  modified  prior  to  the date hereof, the “ Existing Security Agreement ”); and         WHEREAS, the Initial Grantors wish to reaffirm their obligations under the Existing Security Agreement, amend and restate the Existing Security Agreement and continue to secure their obligations to the Secured Parties pursuant to the terms of this Security Agreement;         ACCORDINGLY, to induce the Administrative Agent and the Lenders to enter into and extend credit to the Borrower under the Credit Agreement, the Grantors and the Administrative Agent, on behalf of the Secured Parties, hereby agree as follows:   - 254669812v.1ACTIVE 254669812v.9





 






                                      ARTICLE I                                     DEFINITIONS        1.1.   Terms  Defined  in  Credit  Agreement .  All capitalized terms used herein and not otherwise defined shall have the meanings assigned to such terms in the Credit Agreement.        1.2.   Terms  Defined  in  UCC .  The following terms are used herein as defined in Article 9 of the UCC:  Accounts, Chattel Paper, Commercial Tort Claims, Deposit Accounts, Documents, Equipment, Farm Products, General Intangibles, Goods, Instruments, Inventory, Investment Property, Letter-of-Credit Rights,  Supporting  Obligations  and  Tangible  Chattel  Paper.   The  terms  “Securities”  and  “Securities Accounts” are used herein as defined in Article 8 of the UCC.         1.3.  Definitions   of   Certain   Terms   Used   Herein .   As  used  in  this  Security  Agreement,  in addition to the terms defined above and in the Preliminary Statements, the following terms shall have the following meanings:         “Article ”  means  a  numbered  article  of  this  Security  Agreement,  unless  another  document  is specifically referenced.         “Collateral ” shall have the meaning set forth in Article II .        “Collateral   Access   Agreement ”  means  any  landlord  waiver  or  other  agreement,  in form  and substance reasonably  satisfactory  to  the  Administrative  Agent   in   its   Permitted   Discretion ,  among  the Administrative  Agent,  the  applicable  Grantor  and  any  third  party  (including  any  bailee,  consignee, customs  broker,  or  other  similar  Person)  in  possession  of  any  Collateral  or  any  landlord  of  any  real property where any Collateral is located, as such landlord waiver or other agreement may be amended, restated, supplemented or otherwise modified from time to time.         “Collateral  License ” means any written inbound license or agreement under which a Grantor is authorized to use intellectual property in connection with any manufacture, marketing, distribution or disposition of Inventory.        “Collateral  Report ” means any certificate  (including  any  Borrowing  Base  Certificate) , report or other document delivered by any Grantor to the Administrative Agent or any Lender with respect to the Collateral pursuant to any Loan Document.         “Control ” shall have the meaning set forth in Article 8 or, if applicable, in Section 9-104, 9-105, 9-106 or 9-107 of Article 9 of the UCC.         “Copyright  Security  Agreement ” means each Copyright Security Agreement, substantially in the form  attached  as  Exhibit J ,  executed  and  delivered  by  the  Grantors,  or  any  of  them,  and  the Administrative Agent.         “Copyrights ” means, with respect to any Person, all of such Person’s right, title, and interest in and to the following:  (a) all copyrights, rights and interests in copyrights, works protectable by copyright, copyright  registrations,  and  copyright  applications;  (b) all  renewals  of  any  of  the  foregoing;  (c) all income,  royalties,  damages,  and  payments  now  or  hereafter  due  and/or  payable  under  any  of  the foregoing, including, without limitation, damages or payments for past or future infringements for any of the foregoing; (d) the right to sue for past, present, and future infringements of any of the foregoing; and (e) all rights corresponding to any of the foregoing throughout the world.                                             2- -





 






       “Default ” means any event or condition which constitutes an Event of Default or which upon notice, lapse of time or both would, unless cured or waived, become an Event of Default.         “Deposit  Account  Control  Agreement ” means an agreement, in form and substance reasonably satisfactory  to  the  Administrative  Agent   in   its   Permitted   Discretion ,  among  any  Grantor,  a  banking institution holding such Grantor’s funds, and the Administrative  Agent  with  respect  to  collection  and control of all deposits and balances held in a deposit  account  maintained  by  such  Grantor  with  such banking institution.         “Excluded  Accounts ” means  a , collectively,  Deposit Account Accounts  and/ or Securities Account containing not more than $50,000 at any one time; provided , however , that the aggregate amount of funds and  the  fair  market  value  of  all  other  assets  contained  in  Accounts  having  a  30-day  average  balance  of less  than  $100,000  in  the  aggregate  for  all such Deposit Accounts and/ or Securities Accounts  referred  to above shall not exceed $ 250,000 at any one time .         “Excluded  Collateral ” means, collectively, (a) [intentionally  omitted],  (b)  Intentionally Omitted, (b)  voting  Equity  Interests  of  any  CFC  or  Domestic  Subsidiary  HoldCo,  solely  to  the  extent  that  (i)  such Equity   Interests   represent   more   than   65%   of   the   outstanding   voting   Equity   Interests   of   such   CFC   or Domestic  Subsidiary  HoldCo,  and  (ii)  pledging  or  hypothecating  more  than  65%  of  the  total  outstanding voting   Equity   Interests   of   such   CFC   or   Domestic   Subsidiary   HoldCo   would   result   in   adverse   tax consequences  (as  reasonably  determined  by  the  Borrower  in  consultation  with  the  Administrative  Agent ) or the costs to any of the Grantors of providing such pledge are unreasonably excessive (as determined by the   Administrative   Agent   in  consultation   with   the   Borrower)   in   relation   to   the   benefits   to   the Administrative  Agent,  the  other  Lenders  of  the  security  afforded  thereby  (which  pledge,  if  reasonably requested   by   the   Administrative   Agent,   shall   be   governed   by   the   laws   of   the   jurisdiction  of   such Subsidiary); (c) any rights or interest in any contract, lease, permit, license, or license agreement covering real or personal property if under the terms of such contract, lease, permit, license, or license agreement, or  applicable  law  with  respect  thereto, the grant of a security interest or lien therein is prohibited  or restricted  as  a  matter  of  law  or  under  the  terms  of  such  contract,  lease,  permit,  license,  or  license agreement, or would invalidate any such contract, lease, permit, license or license agreement, and such prohibition or restriction has not been waived or the consent of the other party to such contract, lease, permit, license, or license agreement has not been obtained (provided  that, (i) the foregoing exclusions of this clause (c) shall in no way be construed (A) to apply to the extent that any described prohibition or restriction is ineffective under Section 9-406, 9-407, 9-408, or 9-409 of the UCC or other applicable law, or  (B) to  apply  to  the  extent  that  any  consent  or  waiver  has  been  obtained  that  would  permit  the Administrative Agent’s security interest or lien to attach notwithstanding the prohibition or restriction on the pledge of such contract, lease, permit, license, or license agreement and (ii) the foregoing exclusions of clauses  (b)  and this  clause  (c) shall in no way be construed to limit, impair, or otherwise affect any of the Administrative Agent’s or any Lender’s continuing security interests in and liens upon any rights or interests  of  any  Grantor  in  or  to  (A) monies  due  or  to  become  due  under  or  in  connection  with  any described contract, lease, permit, license, license agreement, or Equity Interests (including any Accounts or Equity Interests), or (B) any proceeds from the sale, license, lease, or other dispositions of any such contract, lease, permit, license, license agreement, or Equity Interests); (d) any United States intent-to-use trademark or service mark applications to the extent that, and solely during the period in which, the grant of a security interest therein would impair the validity or enforceability of a registration issuing from such intent-to-use  trademark  or  service  mark  applications  under  applicable  federal  law,  provided  that  upon submission and acceptance by the United States Patent and Trademark Office of an amendment to allege use pursuant to 15 U.S.C. Section 1051(c) or a statement of use pursuant to 15 U.S.C. Section 1051(d) (or any successor provisions), such intent-to-use trademark or service mark application shall be considered                                             3- -





 






Collateral; (e) [intentionally omitted]; (f) motor vehicles, aircraft and other assets subject to certificates of title; (g) Excluded Deposit and Securities Accounts; and (h) margin stock (as defined in Regulation U).         “Excluded   Deposit   and   Securities   Accounts ”  means  the  collective  reference  to:  (a) Deposit Accounts of Grantors specially and exclusively used for payroll, payroll taxes, trust or fiduciary purposes and other employee wage and benefit payments to or for  the  Grantors’  employees  (provided   that  the amount  on deposit in such accounts does not exceed the then current amount of such payroll, payroll taxes  and  other  employee  wage  and  benefit  obligations),  and  (b) Deposit  Accounts  specially  and exclusively used for taxes, including sales taxes (provided  that the amount on deposit in such accounts does not exceed the then current amount of such tax obligations).         “Exhibit ”  refers  to  a  specific  exhibit  to  this  Security  Agreement,  unless  another  document  is specifically referenced.        “Fixtures ” shall have the meaning set forth in Article 9 of the UCC.         “Gem  Note”  means  that  certain  Broker  Agreement  and  Note  dated  as  of  April  1,  2019 , by  and between  the Borrower and Florida Seminole Coffee Company, Inc.         “Lenders ” means the lenders party to the Credit Agreement and their successors and assigns.         “Licenses ” means, with respect to any Person, all of such Person’s right, title, and interest in and to  (a) any  and  all  written  licensing  agreements  or other  grants  of  rights  with  respect  to  its  Patents, Copyrights, or Trademarks, (b) all income, royalties, damages, claims, and payments now or hereafter due or payable under and with respect thereto, including, without limitation, damages and payments for past and future breaches thereof, and (c) all rights to sue for past, present, and future breaches thereof.         “Patent   Security   Agreement ”  shall  mean  each  Patent  Security  Agreement,  substantially  in  the form  attached  as  Exhibit K ,  executed  and  delivered  by  the  Grantors,  or  any  of  them,  and  the Administrative Agent.         “Patents ” means, with respect to any Person, all of such Person’s right, title, and interest in and to:  (a) any and all patents and patent applications; (b) all inventions and improvements claimed therein; (c) all reissues, divisions, continuations, renewals, extensions, and continuations-in-part thereof; (d) all income, royalties, damages, claims, and payments now or hereafter due or payable under and with respect thereto, including, without limitation, damages and payments for past and future infringements thereof; (e) all rights to sue for past, present, and future infringements thereof; and (f) all rights corresponding to any of the foregoing throughout the world.        “Pledged   Collateral ”  means  all  Instruments,  Securities  and  other  Investment  Property  of  the Grantors to the extent constituting Collateral, whether or not physically delivered to the Administrative Agent pursuant to this Security Agreement.         “Receivables ” means the Accounts, Chattel Paper, Documents, Investment Property, Instruments and any other rights or claims to receive money which are General Intangibles or which are otherwise included as Collateral.         “Section ”  means  a  numbered  section  of  this  Security  Agreement,  unless  another  document  is specifically referenced.        “Stock   Rights ”  means  all  dividends,  instruments  or  other  distributions  and  any  other  right  or property which the Grantors shall receive or shall become entitled to receive for any reason whatsoever                                            4- -





 






invoices  and  Collateral  Reports  with  respect  thereto  furnished  to  the  Administrative  Agent  by  such Grantor from time to time.               (b)    As of the Effective Date, no Grantor has any Collateral evidenced or represented by any Tangible Chattel Paper in excess of $250,000 individually or $500,000 in the aggregate other than the Tangible Chattel Paper listed on Exhibit C .  All action required under Section 4.4  of this Security Agreement has been duly taken by such Grantor.               (c)    As   to   Accounts   of  the   Borrower  and   the   Domestic   Subsidiary   Guarantors included   as   Eligible   Accounts  in   the  Borrowing   Base   Certificate   most   recently  delivered   to   the Administrative  Agent  pursuant  to  Section  5.01(h)  of  the  Credit  Agreement,  except  (x)  as  disclosed  on  the most  recent  Collateral  Report  and  (y)  as  it  relates  to  any  eligibility  criteria  subject  to  the  Administrative Agent’s  discretion,  (i) to  each  Grantor’s  knowledge,  such  Accounts  are  Eligible  Accounts  and  (ii) such Accounts   represent   bona fide   sales   of   Inventory   or   rendering   of   services   to   Account   Debtors   in   the ordinary course of such Grantor’s business.               (d)    In  addition,  to  each  Grantor’s  knowledge,  with  respect  to  all  of  its  Accounts,  the amounts  shown  on  all  invoices,  statements  and  Collateral  Reports  with  respect  thereto  are  actually  and absolutely owing to such Grantor as indicated thereon and are not  in any way contingent.        3.9.   Inventory .  All Inventory of such Grantor (i) is of good and merchantable quality and free from known defects (other than defects arising in the ordinary course of such Grantor’s business) except , solely in the case of (x) any Inventory that was not identified by the Borrower as Eligible Inventory in the most  recent  Collateral  Report  and  (y)  as  it  relates  to  any  eligibility  criteria  subject  to  the  Administrative Agent’s  discretion,  to the extent the failure of which would not reasonably be expected to have a Material Adverse Effect, (ii) as of the Effective Date, is (other than Inventory in transit) located at one of such Grantor’s  locations  set  forth  on  Exhibit A   or  at  any  other  location  permitted  by  Section 4.1(g) ,  and (iii) has been produced in all material respects in accordance with the Federal Fair Labor Standards Act of 1938, as amended, and all rules, regulations and orders thereunder.        3.10.  Intellectual  Property .  As of the Effective Date, such Grantor does not have any interest in, or title to, any registered Patent, Trademark or Copyright (or application for such registration) except as  set  forth  in  Exhibit D .   This  Security  Agreement  and  each  Copyright  Security  Agreement,  Patent Security Agreement and Trademark Security Agreement is effective to create a valid and continuing Lien and, upon filing of appropriate financing statements in the offices listed on Exhibit H , Copyright Security Agreements with the United States Copyright Office,  and  Patent  Security  Agreements  and  Trademark Security Agreements with the United States Patent and Trademark Office, perfected first priority security interests (subject only to Liens permitted by Section 4.1(e) ) in favor of the Administrative Agent on such Grantor’s  United  States  Patents,  Trademarks  and  Copyrights  and  such  perfected  security  interests  are enforceable in accordance with their terms as such as against any and all creditors of and purchasers from such Grantor subject to applicable bankruptcy law and general principles of equity.         3.11. Filing  Requirements .  None of the Collateral owned by it is of a type for which security interests or liens may be perfected by filing under any federal statute except:  (a) for Patents, Trademarks and  Copyrights  held  by  such  Grantor  and  described  in  Exhibit D ;  (b) for  Patents,  Trademarks  and Copyrights  acquired  after  the date   hereof Effective   Date   and  disclosed  to  Administrative  Agent  in accordance  with  Section 4.7(c) ;  and  (c) to  the  extent  notified  in  writing  to  the Administrative  Agent within  five  (5) Business  Days  of  any  Grantor  acquiring  any  such  assets.   Notwithstanding  anything contained in the Loan Documents to the contrary, no Grantor shall be required to take any action required                                             8- -





 






                                     ARTICLE IV                                      COVENANTS        From  the  date  of  this  Security  Agreement  and  thereafter  until  this  Security  Agreement  is terminated pursuant to the terms hereof, each of the Initial Grantors agrees that, and from and after the effective date of any Security Agreement Supplement applicable to any Grantor (and after giving effect to supplements to each of the Exhibits hereto with respect to such subsequent Grantor as attached to such Security Agreement Supplement) and thereafter until this Security Agreement is terminated pursuant to the terms hereof, each such subsequent Grantor agrees that:         4.1.  General .               (a)    Collateral Records .  Such Grantor will maintain complete and accurate books and records  with  respect  to  the  Collateral  owned  by  it consistent  with  past  practices,  and  furnish  to  the Administrative Agent, with sufficient copies for each of the Secured Parties, such reports relating to such Collateral as the Administrative Agent shall from time to time reasonably request.               (b)    Authorization  to  File  Financing  Statements;  Ratification .  Such Grantor hereby authorizes the Administrative Agent to file, and if requested (subject to the exceptions and qualifications otherwise set forth herein and in any other Loan Document) will deliver to the Administrative Agent, all financing  statements  and  other  documents  and  take  such  other  actions  as  may  from  time  to  time reasonably  be  requested  by  the  Administrative  Agent  in  order  to  maintain  a  first  priority  perfected security interest in and, if applicable, Control of, the Collateral owned by such Grantor, subject to Liens permitted under Section 4.1(e) , provided  that nothing herein shall be deemed to constitute an agreement to subordinate any of the Liens of the Administrative Agent under the Loan Documents to any Liens otherwise  permitted  under  Section 4.1(e) .  Any financing statement filed by the Administrative  Agent may  be  filed  in  such  offices  as  the  Administrative Agent  reasonably  determines  to  be  appropriate  to perfect  the  security  interest  of  the  Administrative  Agent  under  this  Security  Agreement  and  may (i) indicate  or  describe  such  Grantor’s  Collateral (1) as all assets of such Grantor 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 of such jurisdiction, or (2) by any other description which reasonably approximates the description contained in this Security Agreement, and (ii) contain any other information required by part 5 of Article 9 of the UCC for the sufficiency or filing office acceptance of any financing statement or amendment,  including  whether  such  Grantor  is  an  organization,  and  the  type  of  such  Grantor’s organization.   Such  Grantor  also  agrees  to  furnish any  such  information  described  in  the  foregoing sentence to the Administrative Agent promptly upon request.  Such Grantor also ratifies its authorization for the Administrative Agent to have filed in any UCC jurisdiction any initial financing statements or amendments thereto if filed prior to the date hereof Effective Date .               (c)    Further   Assurances .   Such  Grantor  also  agrees  to  take  any  and  all  actions necessary to defend title to the Collateral against all persons and to defend the security interest of the Administrative Agent in its Collateral and the priority thereof against any Lien not expressly permitted hereunder.               (d)    Disposition  of  Collateral .  Such Grantor will not sell, lease or otherwise dispose of the Collateral owned by it except for Dispositions specifically permitted pursuant to Section 6.05 of the Credit Agreement.               (e)    Liens .  Such Grantor will not create, incur, or suffer to exist any Lien on the Collateral owned by it except (i) the security interest created by this Security Agreement, and (ii) other Liens  permitted  under  Section 6.02  of  the  Credit  Agreement;  provided ,  that  nothing  herein  shall  be                                            10 - -





 






deemed to constitute an agreement to subordinate any of the Liens of the Administrative Agent under the Loan Documents to any Liens otherwise permitted under Section 6.02 of the Credit Agreement.               (f)    Other  Financing  Statements .  Such Grantor will not authorize the filing of any financing statement naming it as debtor covering all or any portion of the Collateral owned by it, except for  financing  statements  (i) naming  the  Administrative  Agent  on  behalf  of  the  Secured  Parties  as  the secured party, and (ii) in respect to other Liens permitted by Section 4.1(e) .  Such Grantor acknowledges that it is not authorized to file any financing statement covering all or any portion of the Collateral, or any amendment  or  termination  statement  with  respect  to any  financing  statement  referred  to  in  clause (i), above, without the prior written consent of the Administrative Agent, subject to such Grantor’s rights under Section 9-509(d)(2) of the UCC.               (g)    Locations.    Such   Grantor   will   not   (i) maintain   any   Collateral   (other   than Collateral  in  transit  in  the  ordinary  course  of  business)  owned  by  it  in  an  amount  in  excess  of  $1,000,000 in   value   for   all   such   Collateral   at   any   location   other   than   (x) those   locations   listed   on   Exhibit A   and (y) any  locations  notified  to  the  Administrative  Agent  in  a  report  delivered  at  the  time  of  submission  to the   Administrative   Agent   of   the   next   Borrowing   Base   Certificate  in   accordance   with   the   terms   of   the Credit  Agreement  ( and  such  Grantor  will  concurrently  therewith  obtain  a  Collateral  Access  Agreement for each such location to the extent required by Section 4.13), (ii) change its principal place of business or chief  executive  office  from  the  location  identified  on  Exhibit A,  other  than  as  permitted  by  Section 4.15 or (iii) maintain any tangible Collateral  at any locations outside of the United States.         4.2.  Receivables .               (a)    Certain   Agreements   on   Receivables .  Such Grantor will not make or agree to make any discount, credit, rebate or other reduction in the original amount owing on a Receivable or accept  in  satisfaction  of  a  Receivable  less  than  the  original  amount  thereof,  except  that,  prior  to  the occurrence of an Event of Default  that  is  continuing , such Grantor may reduce the amount of Accounts arising from the sale of Inventory or the rendering of services in accordance with its present policies and in the ordinary course of business and as otherwise permitted under the Credit Agreement.               (b)    Collection   of   Receivables .   Except  as  otherwise  provided  in  this  Security Agreement, such Grantor will collect and enforce, at such Grantor’s sole expense, all amounts due or hereafter due to such Grantor under the Receivables owned by it in accordance with past practice and in the ordinary course of business.               (c)    Electronic   Chattel   Paper .   Such  Grantor  shall  take  all  steps  requested  by  the Administrative  Agent  in  its  reasonable  discretion  to  grant  the  Administrative  Agent  Control  of  all electronic chattel paper valued in excess of $500,000 in the aggregate for all such electronic chattel paper in accordance with the UCC and all “transferable records” as defined in each of the Uniform Electronic Transactions Act and the Electronic Signatures in Global and National Commerce Act.               (d)    Delivery   of   Invoices.    Such   Grantor   will   deliver   to   the   Administrative   Agent promptly   upon   its   request   after   the   occurrence   and   during   the   continuation   of   an   Event   of   Default duplicate  invoices  with  respect  to  each  Account  owned  by  it  and,  after  acceleration  of  the  Obligations, bearing such language of assignment  as the Administrative Agent shall specify.               (e)    Disclosure   of   Counterclaims   on   Receivables.    If   (i)   any   discount,   credit   or agreement  to  make  a  rebate  or  to  otherwise  reduce  the  amount  owing  on  any  Receivable  (to  the  extent constituting   an   Eligible   Account)   owned   by   such   Grantor   exists   or   (ii)   if,   to   the   knowledge   of   such Grantor,  any  dispute,  setoff,  claim,  counterclaim  or  defense  exists  or  has  been  asserted  or  threatened  with respect  to  any  such  Receivable  (to  the  extent  constituting  an  Eligible  Account),  then,  in  each  case,  such                                            11 - -





 






Grantor   will,   at   the   time   of   submission   to   the   Administrative   Agent   of   the   next   Borrowing   Base Certificate  in  accordance  with  the  terms  of  the  Credit  Agreement , disclose  such  fact  to  the  Administrative Agent in writing.         4.3.  Intentionally Omitted Inventory .               (a)    Maintenance  of  Goods.   Such  Grantor  will  do  all  things  necessary  to  maintain, preserve,  protect  and  keep  its  Eligible  Inventory  in  good  and  saleable  condition,  except  for  damaged  or defective goods arising in the ordinary course of such Grantor’s business.               (b)    Returned  Inventory.   Such  Grantor  shall  promptly  report  to  the  Administrative Agent   any   return   of   Inventory   (to   the   extent   constituting   Eligible   Inventory)   involving   an   amount   in excess  of  $1,000,000.   Each  such  report  shall  indicate  the  reasons  for  the  returns  and  the  locations  and condition  of  such  returned  Inventory.   Each  such  report  shall  indicate  the  reasons  for  the  returns  and  the locations  and  condition  of  the  returned  Inventory.   In  the  event  any  Account  Debtor  returns  Inventory  to such  Grantor  when  an  Event  of  Default  has  occurred  and  is  continuing , such  Grantor , upon  the  request  of the  Administrative  Agent,  shall:   (i) hold  the  returned  Inventory  in  trust  for  the  Administrative  Agent; (ii) segregate  all  returned  Inventory  from  all  of  its  other  property;  (iii) dispose  of  the  returned  Inventory solely   according   to   the   Administrative   Agent’s   written   instructions;   and   (iv) not   issue   any   credits   or allowances  with  respect  thereto  without  the  Administrative  Agent’s  prior  written  consent.   All  returned Inventory shall be subject to the Administrative Agent’s Liens thereon.  Whenever any Eligible Inventory is   returned,   the   related   Account   shall   be   deemed   ineligible   to   the   extent   of   the   amount   owing   by   the Account  Debtor  with  respect  to  such  returned  Inventory  and  such  returned  Inventory  shall  not  be  Eligible Inventory.               (c)    Inventory   Count;   Perpetual   Inventory   System.    Such   Grantor   will   conduct   a physical   count   of   its   Inventory   at   least   once   per   fiscal   year,   and   upon  the   occurrence  and   during   the continuation  of   an   Event   of   Default ,  at   such   other   times   as   the   Administrative   Agent   requests.    Such Grantor,  at  its  own  expense,  shall  deliver  to  the  Administrative  Agent  the  results  of  such  physical  count once  per  fiscal  year,  and  upon  the  occurrence  and  during  the  continuation  of  an  Event  of  Default,  the results   of   any   additional   physical   counts   requested   by  the   Administrative   Agent .   Such   Grantor   will maintain a perpetual inventory reporting system at all times.         4.4.  Delivery   of   Instruments,   Securities,   Chattel   Paper   and   Documents .  Such Grantor will (a) deliver to the Administrative Agent promptly upon execution of this Security Agreement the originals of all Tangible Chattel Paper, Securities (to the extent certificated) and Instruments constituting Collateral owned by it (if any then exist), in each case solely to the extent such item of Tangible Chattel Paper, Security, or Instrument exceeds $250,000 individually or $500,000 in the aggregate, (b) hold in trust for the Administrative Agent upon receipt and promptly thereafter deliver to the Administrative Agent any such Chattel Paper, Securities (to the extent certificated) and Instruments (other  than  the  Gem  Note  to  the extent   the   aggregate   outstanding   principal   amount   thereunder   does  not   exceed   $ 300,000)   constituting Collateral, in each case solely to the extent such item of Chattel Paper, Security, or Instrument exceeds $250,000  individually  or  $500,000  in  the  aggregate and  (c) upon  the  Administrative  Agent’s  request, deliver to the Administrative Agent (and thereafter hold in trust for the Administrative Agent upon receipt and promptly deliver to the Administrative Agent) any Document evidencing or constituting Collateral.         4.5.  Uncertificated  Pledged  Collateral .  Such Grantor will permit the Administrative Agent from  time  to  time  to  cause  the  appropriate  issuers (and,  if  held  with  a  securities  intermediary,  such securities intermediary) of uncertificated securities or other types of Pledged Collateral owned by it not represented by certificates to mark their books and records with the numbers and face amounts of all such uncertificated  securities  or  other  types  of  Pledged  Collateral  not  represented  by  certificates  and  all                                            12 - -





 






a first priority security interest (subject only to Liens permitted by Section 4.1(e) ) in such commercial tort claim.        4.9.   Letter-of-Credit Rights .  If such Grantor is or becomes the beneficiary of a letter of credit not constituting a Supporting Obligation in respect of any Collateral (other than any such letters of credit not in excess of $250,000 individually or $500,000 in the aggregate), it shall promptly, and in any event within five (5) Business Days after becoming a beneficiary, notify the Administrative Agent thereof and upon the reasonable request of the Administrative Agent, use commercially reasonable efforts to cause the issuer and/or confirmation bank to (i) consent to the assignment of any Letter-of-Credit Rights to the Administrative  Agent  and  (ii) agree  to  direct  all  payments  thereunder  to  a  Deposit  Account  at  the Administrative Agent or subject to a Deposit Account Control Agreement for application to the Secured Obligations,  in  accordance  with  Section 2.18  of  the  Credit  Agreement,  all  in  form  and  substance reasonably satisfactory to the Administrative Agent.         4.10. Federal,   State   or   Municipal   Claims .   Such  Grantor  will  promptly  notify  the Administrative Agent of any Collateral with a face value in excess of $250,000 individually or $500,000 in  the  aggregate  which  constitutes  a  claim  against the United States government or any state or local government  or  any  instrumentality  or  agency  thereof,  the  assignment  of  which  claim  is  restricted  by federal, or, to the knowledge of such Grantor, state or municipal law.        4.11.  Intentionally Omitted .         4.12. Insurance .               (a)  In   the   event   any  Collateral   is   located  in   any  area   that   has   been   designated   by   the Federal  Emergency  Management  Agency  as  a  “Special  Flood  Hazard  Area” , such  Grantor  shall  purchase and  maintain  flood  insurance  on  such  Collateral  (including  any  personal  property  which  is  located  on  any real  property  leased  by  such  Grantor  within  a  “Special  Flood  Hazard  Area”).   The  minimum  amount  of flood  insurance  required  by  this  Section  shall  be  in  an  amount  equal  to  the  lesser  of  the  aggregate  of  all Lenders’ Commitments or the total replacement cost value of such Collateral.               (a)    [Reserved].               (b)    All insurance policies required hereunder and under Section 5.10 of the Credit Agreement shall, within 45 days of the date  hereof Effective  Date  (or such longer period as agreed by the Administrative  Agent  in  its  sole  discretion),  name the  Administrative  Agent  (for  the  benefit  of  the Administrative  Agent  and  the  Secured  Parties)  as  an  additional  insured  or  as  lender  loss  payee,  as applicable, and shall contain lender loss payable clauses, through endorsements in form and substance reasonably satisfactory to the Administrative Agent, which provide that:  (i) all proceeds thereunder with respect to any Collateral shall be payable to the Administrative Agent; (ii) no such insurance shall be affected by any act or neglect of the insured or owner  of  the  property  described  in  such  policy;  and (iii) such policy and lender loss payable or mortgagee clauses may be canceled, amended, or terminated only upon at least thirty (30) days’ prior written notice given to the Administrative Agent.               (c)    All premiums on any such insurance shall be paid when due (subject to any grace periods provided by the terms of such policy) by such Grantor, and copies of the policies delivered to the Administrative  Agent.   If  such  Grantor  fails  to  obtain  any  insurance  as  required  by  this  Section,  the Administrative  Agent  may  obtain  such  insurance  at  the  Borrower’s  expense.   By  purchasing  such insurance, the Administrative Agent shall not be deemed to have waived any Default arising from any Grantor’s failure to maintain such insurance or pay any premiums therefor.                                             15 - -





 






       4.13. Collateral   Access   Agreements .   After  the  occurrence  of  an  Event  of  Default  that  is continuing, upon request by the Administrative Agent, such Grantor shall use commercially reasonable efforts to obtain a Collateral Access Agreement from the lessor of each leased property, mortgagee of owned property or bailee or consignee with respect to any warehouse, processor or converter facility or other location where Inventory in excess of $ 5,000,000 1,000,000  is stored or located, which agreement or letter  shall  provide  access  rights,  contain  a  waiver  or  subordination  of  all  Liens  or  claims  that  the landlord,  mortgagee,  bailee  or  consignee  may  assert  against  the  Inventory  at  that  location,  and  shall otherwise be reasonably satisfactory in form and substance to the Administrative Agent.         4.14. Deposit Account Control Agreements .  After the occurrence of an Event of Default that is continuing, such Such  Grantor will provide to the Administrative Agent promptly upon the Administrative Agent’s   reasonable   request,  a  Deposit  Account  Control  Agreement  or  a  securities  account  control agreement (in each case in form and substance reasonably  satisfactory to the Administrative Agent  in  its Permitted   Discretion ),  as  applicable,  duly  executed  on  behalf  of  each  financial  institution  holding  a Deposit Account or Securities Account of such Grantor as set forth in this Security Agreement; provided , however , that no such Deposit Account Control Agreement or securities account control agreement shall be required (a)  in respect of any Excluded Account or any Excluded Deposit and Securities Account ., (b) for   the   60   day   period   (or   such   longer   period   as   agreed   by  the   Administrative   Agent  in   its   sole discretion)  after  the  Third  Amendment  Effective  Date  in  respect  of  any  Deposit  Account  or  Securities Account (other than any Excluded Account or any Excluded Deposit and Securities Account) in existence on  the  Third  Amendment  Effective  Date,  or  (c) for  the  60  day  period  (or  such  longer  period  as  agreed  by the   Administrative   Agent   in  its   sole   discretion)   after   (x) the   establishment   thereof   in   respect   of   any Deposit  Account  or  Securities  Account  (other  than  any  Excluded  Account  or  any  Excluded  Deposit  and Securities  Account)  not  in  existence  on  the  Third  Amendment  Effective  Date,  (y) the  date  any  Grantor becomes  a  party  to  this  Agreement  pursuant  to  Section  5.11  of  the  Credit  Agreement  in  respect  of  any Deposit  Account  or  Securities  Account  (other  than  any  Excluded  Account  or  any  Excluded  Deposit  and Securities  Account)  of  such  Grantor,  or  (z)  the  date  the  applicable  Deposit  Account  or  Securities  Account is no longer an Excluded Account or an Excluded Deposit Account or Securities Account.         4.15. Change  of  Name  or  Location .  Such Grantor shall not (a) change its name as it appears in official  filings  in  the  state  of  its  incorporation or  organization,  (b) change  its  chief  executive  office, principal place of business, mailing address, corporate offices, or the location of its records concerning the Collateral as set forth in this Security Agreement, (c) change the type of entity that it is, (d) change its federal employer identification number or organization identification number, if any, issued by its state of incorporation or other organization, or (e) change its state of incorporation or organization, in each case, unless the Administrative Agent shall have received at least ten (10) days’ prior written notice of such change  and  the  Administrative  Agent  shall  have  acknowledged (such   acknowledgment   not   to   be unreasonably withheld or delayed by Administrative Agent)  in writing that either (1) such change will not adversely affect the validity, perfection or priority of the Administrative Agent’s security interest in the Collateral, or (2) any reasonable action requested by the Administrative Agent in connection therewith has been completed or taken (including any action to continue the perfection of any Liens in favor of the Administrative Agent, on behalf of the Secured Parties, in any Collateral) or will be taken within any time period reasonably specified by the Administrative Agent, provided  that, any new location shall be in the continental U.S.         4.16. Securities .  Each Grantor shall ensure that any Equity Interest which is included within the Collateral shall at no time constitute a Security and the issuer of any such Equity Interest shall at no time  take  any  action  to  have  such  interests  treated  as  a  Security  unless  (i) all  certificates  or  other documents constituting such Security have been delivered to the Administrative Agent and such Security is properly defined as such under Article 8 of the UCC of the applicable jurisdiction, whether as a result of actions by the issuer thereof or otherwise, or (ii) the Administrative Agent has entered into a control                                            16 - -





 






records relating thereto, or both, and to conduct sales of the Collateral, without any obligation to pay any Grantor for such use and occupancy;               (c)    Intentionally omitted;               (d)    take,  or  cause  an  issuer  of  Pledged  Collateral  to  take,  any  and  all  actions necessary to enable the Administrative Agent to consummate a sale or other disposition of the Pledged Collateral;  provided , that, no Grantor shall be required to take any actions  to  register  or  qualify  any Pledged Collateral under any federal or state securities laws or any other similar or equivalent rules or regulations; and               (e)    at  its  own  expense,  cause  the  independent  certified  public  accountants  then engaged by each Grantor to prepare and deliver to the Administrative Agent and each Secured Party, at any time, and from time to time, promptly upon the Administrative Agent’s request, the following reports with respect to the applicable Grantor:  (i) a reconciliation of all Accounts; (ii) an aging of all Accounts; (iii) trial balances; and (iv) a test verification of such Accounts.         5.4.  Grant  of  Intellectual  Property  License .  For the purpose of enabling the Administrative Agent to exercise the rights and remedies under this Article V  at such time as the Administrative Agent shall  be  lawfully  entitled  to  exercise  such  rights and  remedies,  each  Grantor  hereby  (a) grants  to  the Administrative  Agent,  for  the  benefit  of  the  Administrative  Agent  and  the  other  Secured  Parties,  an irrevocable  (subject  to  termination  under  Section 8.14 ),  nonexclusive  license  (exercisable  without payment of royalty or other compensation or charge to any Grantor) or other right to use, license or sublicense, following the occurrence and during the continuance of an Event of Default, each Grantor’s labels, Patents, Copyrights, rights of use of any name, trade secrets, trade names, Trademarks, service marks, customer lists, advertising matter and any other intellectual property rights or any property of a similar nature, as it pertains to the Collateral, in completing production of, advertising for sale, and selling any Collateral, now owned or hereafter acquired by such Grantor, and wherever the same may be located, and including in such license access to all media in which any of the licensed items may be recorded or stored  and  to  all  computer  software  and  programs  used  for  the  compilation  or  printout  thereof  and (b) irrevocably agrees that the Administrative Agent may sell any of such Grantor’s Inventory directly to any  person,  including  without  limitation  persons  who  have  previously  purchased  such  Grantor’s Inventory  from  such  Grantor  and  in  connection  with any  such  sale  or  other  enforcement  of  the Administrative  Agent’s  rights  under  this  Security  Agreement,  may  sell  Inventory  which  bears  any Trademark owned by or licensed to such Grantor and any Inventory that is covered by any Copyright owned by or licensed to such Grantor and the Administrative Agent may (but shall have no obligation to) finish any work in process and affix any Trademark owned by or licensed to such Grantor and sell such Inventory as provided herein.                                       ARTICLE VI                ACCOUNT VERIFICATION; ATTORNEY IN FACT; PROXY         6.1.  Account Verification .  The Administrative Agent may at any time during the continuance of  an  Event  of  Default,  in  the  Administrative  Agent’s  own  name,  in  the  name  of  a  nominee  of  the Administrative  Agent,  or  in  the  name  of  any  Grantor  communicate  (by  mail,  telephone,  facsimile  or otherwise) with the account  debtors Account  Debtors  of any such Grantor, parties to contracts with any such Grantor and obligors in respect of Instruments of any such Grantor to verify with such Persons, to the Administrative Agent’s satisfaction, the existence, amount, terms of, and any other matter relating to, Accounts, Instruments, Chattel Paper, payment intangibles and/or other Receivables.                                             19 - -





 






       6.2.  Authorization for Administrative Agent to Take Certain Action .                (a)   Subject  to  paragraph (b)  below,  each  Grantor  irrevocably  authorizes  the Administrative Agent at any time and from time to time in the sole discretion of the Administrative Agent  and  appoints  the  Administrative  Agent  as  its attorney  in  fact  (i) to  execute  on  behalf  of  such Grantor as debtor and to file financing statements necessary or desirable in the Administrative Agent’s sole  discretion  to  perfect  and  to  maintain  the  perfection  and  priority  of  the  Administrative  Agent’s security  interest  in  the  Collateral,  (ii) when  an  Event  of  Default  has  occurred  and  is  continuing,  to endorse  and  collect  any  cash  proceeds  of  the  Collateral,  (iii) to  file  a  carbon,  photographic  or  other reproduction of this Security Agreement or any financing statement with respect to the Collateral as a financing statement and to file any other financing  statement  or  amendment  of  a  financing  statement (which does not add new collateral or add a debtor) in such offices as the Administrative Agent in its sole discretion deems necessary or desirable to perfect and to maintain the perfection and priority of the Administrative  Agent’s  security  interest  in  the  Collateral,  (iv) to  contact  and  enter  into  one  or  more agreements with the issuers of uncertificated securities which are Pledged Collateral or with securities  intermediaries holding Pledged Collateral as may be necessary or advisable to give the Administrative  Agent Control over such Pledged Collateral, (v) to apply the proceeds of any Collateral received by the  Administrative Agent to the Secured Obligations as provided in Section 7.2 , (vi) to discharge past due  taxes, assessments, charges, fees or Liens on the Collateral (except for such Liens that are specifically permitted hereunder), (vii) to contact account  debtors Account  Debtors  for any reason, (viii) to demand payment or enforce payment of the Receivables in the name of the Administrative Agent or such Grantor  and to endorse any and all checks, drafts, and other instruments for the payment of money relating to the  Receivables, (ix) to sign such Grantor’s name on any invoice or bill of lading relating to the Receivables,  drafts  against  any account   debtor Account   Debtor   of  such  Grantor,  assignments  and  verifications  of  Receivables, (x) to exercise all of such Grantor’s rights and remedies with respect to the collection of the  Receivables and any other Collateral, (xi) to settle, adjust, compromise, extend or renew the Receivables,  (xii) to  settle,  adjust  or  compromise  any  legal  proceedings  brought  to  collect  Receivables,  (xiii) to prepare, file and sign such Grantor’s name on a proof of claim in bankruptcy or similar document against  any account  debtor Account  Debtor  of such Grantor, (xiv) to prepare, file and sign such Grantor’s name  on any notice of Lien, assignment or satisfaction of Lien or similar document in connection with the  Receivables, (xv) to change the address for delivery of mail addressed to such Grantor to such address as  the Administrative Agent may designate and to receive, open and dispose of all mail addressed to such  Grantor, and (xvi) to do all other acts and things necessary to carry out this Security Agreement; and  such Grantor agrees to reimburse the Administrative Agent on demand for any payment made or any  expense incurred by the Administrative Agent in connection with any of the foregoing; provided  that, this authorization shall not relieve such Grantor of any of its obligations under this Security Agreement, the Credit Agreement or any other Loan Document.               (b)    All  acts  of  said  attorney  or  designee  are  hereby  ratified  and  approved.   The powers conferred on the Administrative Agent, for the benefit of the Administrative Agent and the other Secured Parties, under this Section 6.2  are solely to protect the Administrative Agent’s interests in the Collateral and shall not impose any duty upon the Administrative Agent or any other Secured Party to exercise  any  such  powers.   The  Administrative  Agent  agrees  that,  except  for  the  powers  granted  in Section 6.2(a)(i) -(v)   and  Section 6.2(a)(xvi) , it shall not exercise any power or authority granted  to  it unless an Event of Default has occurred and is continuing.         6.3.  Proxy .   EACH  GRANTOR  HEREBY  IRREVOCABLY  CONSTITUTES  AND APPOINTS THE ADMINISTRATIVE AGENT AS ITS PROXY AND ATTORNEY-IN-FACT (AS SET FORTH  IN  SECTION 6.2    ABOVE)  WITH  RESPECT  TO  ITS  PLEDGED  COLLATERAL, INCLUDING  THE  RIGHT  TO  VOTE  ANY  OF  THE  PLEDGED  COLLATERAL,  WITH  FULL POWER OF SUBSTITUTION TO DO SO.  IN ADDITION TO THE RIGHT TO VOTE ANY OF THE                                            20 - -





 






PLEDGED COLLATERAL, THE APPOINTMENT OF THE ADMINISTRATIVE AGENT AS PROXY AND ATTORNEY-IN-FACT SHALL INCLUDE THE RIGHT TO EXERCISE ALL OTHER RIGHTS, POWERS, PRIVILEGES AND REMEDIES TO WHICH A HOLDER OF ANY OF THE PLEDGED COLLATERAL  WOULD  BE  ENTITLED  (INCLUDING  GIVING  OR  WITHHOLDING  WRITTEN CONSENTS OF SHAREHOLDERS, CALLING SPECIAL MEETINGS           OF SHAREHOLDERS AND VOTING  AT  SUCH  MEETINGS).   SUCH  PROXY  SHALL BE EFFECTIVE,  AUTOMATICALLY AND WITHOUT THE NECESSITY OF ANY ACTION (INCLUDING ANY TRANSFER OF ANY OF THE PLEDGED COLLATERAL ON THE RECORD BOOKS OF THE ISSUER THEREOF) BY ANY PERSON (INCLUDING THE ISSUER OF THE PLEDGED COLLATERAL OR ANY OFFICER OR AGENT  THEREOF),  UPON  THE  OCCURRENCE  AND  DURING  THE      CONTINUATION  OF  AN EVENT OF DEFAULT.         6.4.  Nature   of   Appointment;   Limitation   of   Duty .   THE  APPOINTMENT  OF  THE  ADMINISTRATIVE  AGENT  AS  PROXY  AND  ATTORNEY-IN-FACT        IN  THIS  ARTICLE VI   IS  COUPLED  WITH  AN  INTEREST  AND  SHALL  BE  IRREVOCABLE  UNTIL  THE  DATE  ON  WHICH  THIS  SECURITY  AGREEMENT  IS  TERMINATED  IN  ACCORDANCE  WITH  SECTION 8.14 .   NOTWITHSTANDING  ANYTHING  CONTAINED  HEREIN,  NONE         OF  THE ADMINISTRATIVE AGENT, ANY LENDER, ANY OTHER SECURED PARTY, ANY OF THEIR RESPECTIVE  AFFILIATES,  OR  ANY  OF  THEIR  OR  THEIR  AFFILIATES’  RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, AGENTS OR REPRESENTATIVES SHALL HAVE ANY DUTY TO EXERCISE ANY RIGHT OR POWER GRANTED HEREUNDER OR OTHERWISE OR TO PRESERVE THE SAME AND SHALL NOT BE LIABLE FOR ANY FAILURE TO DO SO OR FOR  ANY  DELAY  IN  DOING  SO,  EXCEPT  IN  RESPECT  OF  DAMAGES  ATTRIBUTABLE SOLELY TO ITS OWN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT AS DETERMINED BY  A  COURT  OF  COMPETENT  JURISDICTION  IN  A  FINAL  AND  NON-APPEALABLE JUDGMENT; PROVIDED      THAT, IN NO EVENT SHALL THEY BE LIABLE FOR ANY PUNITIVE, EXEMPLARY, INDIRECT OR CONSEQUENTIAL DAMAGES.                                       ARTICLE VII  COLLECTION AND APPLICATION OF COLLATERAL PROCEEDS; DEPOSIT ACCOUNTS         7.1.  Collection   of   Receivables .   The  Administrative  Agent  may  at  any  time  after  the occurrence  and  during  the  continuance  of  an  Event  of  Default,  by  giving  each  Grantor  prior  written notice, elect to require that the Receivables be paid directly to the Administrative Agent for the benefit of the Secured Parties.  In such event, each Grantor shall, and shall permit the Administrative Agent to, promptly notify the account  debtors Account  Debtors  or obligors under the Receivables owned by such Grantor of the Administrative Agent’s interest therein and direct such account debtors or Account Debtors or  obligors to make payment of all amounts then or thereafter due under such Receivables directly to the Administrative Agent.  Upon receipt of any such notice from the Administrative Agent, each Grantor shall thereafter hold in trust for the Administrative Agent, on behalf of the Secured Parties, all amounts and proceeds received by it with respect to the Receivables and immediately and at all times thereafter deliver  to  the  Administrative  Agent  all  such  amounts  and  proceeds  in  the  same  form  as  so  received, whether by cash, check, draft or otherwise, with any necessary endorsements.  The Administrative Agent shall hold and apply funds so received as provided by the terms of Section 7.2  hereof.         7.2.  Application   of   Proceeds;   Deficiency .   The  Administrative  Agent  may require all cash proceeds of the Collateral to be deposited in a special non-interest bearing cash collateral account with the Administrative Agent and held there as security for the Secured Obligations.  No Grantor shall have any control  whatsoever  over  such  cash  collateral  account.   Any  such  proceeds  of  the  Collateral  shall  be applied  in  the  order  set  forth  in  Sections 2.18  and  7.02  of  the  Credit  Agreement  unless  a  court  of competent jurisdiction shall otherwise direct.  The balance, if any, after all of the Secured Obligations                                            21 - -





 






have been satisfied and applied in accordance with Sections 2.18 and 7.02 of the Credit Agreement, shall be  deposited  by  the  Administrative  Agent  into  such Grantor’s  general  operating  account  with  the Administrative Agent or as instructed in writing by such Grantor. The Grantors shall remain liable, jointly and  severally,  for  any  deficiency  if  the  proceeds  of  any  sale  or  disposition  of  the  Collateral  are insufficient to pay all Secured Obligations, including any attorneys’ fees and other expenses incurred by the Administrative Agent or any other Secured Party to collect such deficiency.                                      ARTICLE VIII                                 GENERAL PROVISIONS         8.1.  Waivers .  Each Grantor hereby waives notice of the time and place of any public sale or the time after which any private sale or other disposition of all or any part of the Collateral may be made. To the extent such notice may not be waived under applicable law, any notice made shall be deemed reasonable if sent to the Grantors, addressed as set forth in Article IX , at least ten days prior to (i) the date of any such public sale or (ii) the time after which any such private sale or other disposition may be made. To  the  maximum  extent  permitted  by  applicable  law, each  Grantor  waives  all  claims,  damages,  and demands against the Administrative Agent or any other Secured Party arising out of the repossession, retention  or  sale  of  the  Collateral,  except  such  as  arise  solely  out  of  the  gross  negligence  or  willful misconduct  of  the  Administrative  Agent  or  such  other  Secured  Party  as  determined  by  a  court  of competent jurisdiction in a final and non-appealable judgment.  To the extent it may lawfully do so, each Grantor absolutely and irrevocably waives and relinquishes the benefit and advantage of, and covenants not to assert against the Administrative Agent or any other Secured Party, any valuation, stay, appraisal, extension, moratorium, redemption or similar laws and any and all rights or defenses it may have as a surety now or hereafter existing which, but for this provision, might be applicable to the sale of any Collateral made under the judgment, order or decree of any court, or privately under the power of sale conferred by this Security Agreement, or otherwise.  Except as otherwise specifically provided herein, each  Grantor  hereby  waives  presentment,  demand,  protest  or  any  notice  (to  the  maximum  extent permitted by applicable law) of any kind in connection with this Security Agreement or any Collateral.  Without  limiting  any  other  waiver  or  provision , each  Grantor  waives,  to  the  maximum  extent  permitted by  law,  (a)  all  benefits  or  defenses  directly  or  indirectly  arising  under  California  Civil  Code  §§  2787, 2799,  2808,  2815,  2819,  2820,  2821,  2822,  2838,  2839,  2847,  2848,  and  2855,  Chapter  2  of  Title  14  of the  California  Civil  Code,  and  California  Code  of  Civil  Procedure  §§  580a,  580b,  580c,  580d,  and  726  or any  similar  laws  of  any  other  applicable  jurisdiction,  (b)  all  rights  and  defenses  arising  out  of  an  election of  remedies  by  the  creditor,  even  though  that  election  of  remedies,  such  as  a  nonjudicial  foreclosure  with respect  to  security  for  a  guaranteed  obligation,  has  destroyed  the  guarantor’s  rights  of  subrogation  and reimbursement   against   the   principal   by   the   operation   of   Section   580d   of   the   California   Code   of   Civil Procedure  or  otherwise  and  (c)  any  defense  arising  by  reason  of  or  deriving  from  (i)  any  claim  or  defense based   upon   an   election   of   remedies   by   the  Secured   Parties  or   (ii)   any   election   by  the  Secured  Parties under   the   Bankruptcy   Code,   to   limit   the   amount   of,   or   any   collateral   securing,   its   claim   against   any Grantor.         8.2.  Limitation  on  Administrative  Agent’s  and  Other  Secured  Parties’  Duty  with  Respect  to the  Collateral .  The Administrative Agent shall have no obligation to clean-up or otherwise prepare the Collateral for sale.  The Administrative Agent and each other Secured Party shall use reasonable care with respect to the Collateral in its possession or under its control.  Neither the Administrative Agent nor any other Secured Party shall have any other duty as to any Collateral in its possession or control or in the possession or control of any agent or nominee of the Administrative Agent or such other Secured Party, or  any  income  thereon  or  as  to  the  preservation  of rights  against  prior  parties  or  any  other  rights pertaining  thereto.   To  the  extent  that  applicable law  imposes  duties  on  the  Administrative  Agent  to exercise remedies in a commercially reasonable manner, each Grantor acknowledges and agrees that it is                                            22 - -





 






commercially reasonable for the Administrative Agent (i) to fail to incur expenses deemed significant by the Administrative Agent to prepare Collateral for disposition or otherwise to transform raw material or work in process into finished goods or other finished products for disposition, (ii) to fail to obtain third party consents for access to Collateral to be disposed of, or to obtain or, if not required by other law, to fail to obtain governmental or third party consents for the collection or disposition of Collateral to be collected  or  disposed  of,  (iii) to  fail  to  exercise  collection  remedies  against account   debtors Account Debtors  or other Persons obligated on Collateral or to remove Liens on or any adverse claims against Collateral, (iv) to exercise collection remedies against account  debtors Account  Debtors  and other Persons obligated on Collateral directly or through the use of collection agencies and other collection specialists, (v) to advertise dispositions of Collateral through publications or media of general circulation, whether or not the Collateral is of a specialized nature, (vi) to contact other Persons, whether or not in the same business as such Grantor, for expressions of interest in acquiring all or any portion of the Collateral, (vii) to hire one or more professional auctioneers to assist in the disposition of Collateral, whether or not the  Collateral  is  of  a  specialized  nature,  (viii) to  dispose  of  Collateral  by  utilizing  Internet  sites  that provide  for  the  auction  of  assets  of  the  types  included  in  the  Collateral  or  that  have  the  reasonable capacity of doing so, or that match buyers and sellers  of assets, (ix) to dispose of assets in wholesale rather  than  retail  markets,  (x) to  disclaim  disposition  warranties,  such  as  title,  possession  or  quiet enjoyment, (xi) to purchase insurance or credit enhancements to insure the Administrative Agent against risks of loss, collection or disposition of Collateral or to provide to the Administrative Agent a guaranteed return from the collection or disposition of Collateral, or (xii) to the extent deemed appropriate by the Administrative Agent, to obtain the services of other brokers, investment bankers, consultants and other professionals to assist the Administrative Agent in the collection or disposition of any of the Collateral. Each Grantor acknowledges that the purpose of this Section 8.2  is to provide non-exhaustive indications of  what  actions  or  omissions  by  the  Administrative Agent  would  be  commercially  reasonable  in  the Administrative Agent’s exercise of remedies against the Collateral and that other actions or omissions by the Administrative Agent shall not be deemed commercially unreasonable solely on account of not being indicated in this Section 8.2 .  Without limitation upon the foregoing, nothing contained in this Section 8.2 shall be construed to grant any rights to any Grantor or to impose any duties on the Administrative Agent that would not have been granted or imposed by this Security Agreement or by applicable law in the absence of this Section 8.2 .         8.3.  Compromises  and  Collection  of  Collateral .  The Grantors and the Administrative Agent recognize that setoffs, counterclaims, defenses and other claims may be asserted by obligors with respect to certain of the Receivables, that certain of the Receivables may be or become uncollectible in whole or in part and that the expense and probability of success in litigating a disputed Receivable may exceed the amount that reasonably may be expected to be recovered with respect to a Receivable.  In view of the foregoing, each Grantor agrees that the Administrative Agent may at any time and from time to time, if an Event of Default has occurred and is continuing, compromise with the obligor on any Receivable, accept in full payment of any Receivable such amount as the Administrative Agent in its sole discretion shall determine  or  abandon  any  Receivable,  and  any  such  action  by  the  Administrative  Agent  shall  be commercially reasonable so long as the Administrative Agent acts in good faith based on information known to it at the time it takes any such action.         8.4.  Secured  Party  Performance  of  Debtor  Obligations .  Without having any obligation to do so, the Administrative Agent may perform or pay any obligation which any Grantor has agreed to perform or pay in this Security Agreement and the Grantors shall reimburse the Administrative Agent for any amounts  paid  by  the  Administrative  Agent  pursuant  to  this  Section 8.4 .   The  Grantors’  obligation  to reimburse the Administrative Agent pursuant to the preceding  sentence  shall  be  a  Secured  Obligation payable on demand.                                             23 - -





 






setoff), is rescinded, reduced, restored or returned, the Secured Obligations shall be reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored or returned.         8.10. Benefit   of   Agreement .  The terms and provisions of this Security Agreement  shall  be binding upon and inure to the benefit of the Grantors, the Administrative Agent and the other Secured Parties and their respective successors and assigns (including all persons who become bound as a debtor to this Security Agreement), except that no Grantor shall have the right to assign its rights or delegate its obligations under this Security Agreement or any interest herein, without the prior written consent of the Administrative Agent.  No sales of participations, assignments, transfers, or other dispositions of any agreement  governing  the  Secured  Obligations  or  any portion  thereof  or  interest  therein  shall  in  any manner impair the Lien granted to the Administrative Agent, for the benefit of the Administrative Agent and the other Secured Parties, hereunder.         8.11. Survival of Representations .  All representations and warranties of the Grantors contained in this Security Agreement shall survive the execution and delivery of this Security Agreement.         8.12. Taxes  and  Expenses .  Any taxes (including income taxes) payable or ruled payable by Federal or State authority in respect of this Security Agreement shall be paid by the Grantors, together with interest and penalties, if any.  The Grantors shall reimburse the Administrative Agent for any and all out-of-pocket expenses and internal charges (including reasonable attorneys’, auditors’ and accountants’ fees  and  reasonable  time  charges  of  attorneys,  paralegals,  auditors  and  accountants  who  may  be employees of the Administrative Agent) paid or incurred by the Administrative Agent in connection with the  preparation,  execution,  delivery,  administration,  collection  and  enforcement  of  this  Security Agreement and in the audit, analysis, administration, collection, preservation or sale of the Collateral (including the expenses and charges associated with any periodic or special audit of the Collateral).  Any and all costs and expenses incurred by the Grantors in the performance of actions required pursuant to the terms hereof shall be borne solely by the Grantors.         8.13. Headings .   The  title  of  and  section  headings  in  this  Security  Agreement  are  for convenience of reference only, and shall not govern the interpretation of any of the terms and provisions of this Security Agreement.         8.14. Termination .  This Security Agreement shall continue in effect (notwithstanding the fact that  from  time  to  time  there  may  be  no  Secured  Obligations  outstanding)  until  (i) any  and  all commitments to extend credit under the Loan Documents have terminated, and the Credit Agreement has terminated pursuant to its express terms and (ii) all of the Secured Obligations have been paid in cash and performed in full (or with respect to any outstanding Letters of Credit, a cash deposit or at the discretion of  the  Administrative  Agent,  a  back-up  standby  Letter  of  Credit  reasonably  satisfactory  to  the Administrative Agent and the Issuing Bank, has been delivered to the Administrative Agent as required by the Credit Agreement) and no commitments of the Administrative Agent or the other Secured Parties which would give rise to any Secured Obligations are outstanding.        8.15.  Entire   Agreement .   This  Security  Agreement  embodies  the  entire  agreement  and understanding  between  the  Grantors  and  the  Administrative  Agent  relating  to  the  Collateral  and supersedes all prior agreements and understandings between the Grantors and the Administrative Agent relating to the Collateral.         8.16. CHOICE   OF  LAW .  THIS SECURITY AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK.                                             25 - -





 






References  to  the  California  Civil  Code  or  the  California  Code  of  Civil  Procedure  shall  not  mean that California law is applicable to  this Security Agreement.         8.17. CONSENT    TO  JURISDICTION  .  EACH GRANTOR HEREBY IRREVOCABLY SUBMITS,  FOR  ITSELF  AND  ITS  PROPERTY,  TO  THE  EXCLUSIVE  JURISDICTION  OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK SITTING  IN  THE  BOROUGH  OF  MANHATTAN  (OR  IF  SUCH  COURT  LACKS  SUBJECT MATTER  JURISDICTION,  THE  SUPREME  COURT  OF  THE  STATE  OF  NEW YORK SITTING  IN  THE  BOROUGH  OF  MANHATTAN),  AND  ANY  APPELLATE  COURT  FROM ANY THEREOF IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS  SECURITY  AGREEMENT  OR  ANY  OTHER  LOAN  DOCUMENT,  OR  FOR RECOGNITION  OR  ENFORCEMENT  OF  ANY  JUDGMENT,  AND  EACH  GRANTOR HEREBY  IRREVOCABLY  AND  UNCONDITIONALLY  AGREES  THAT              ALL  CLAIMS  IN RESPECT OF SUCH ACTION OR PROCEEDING MAY (AND ANY SUCH CLAIMS, CROSS- CLAIMS  OR  THIRD  PARTY  CLAIMS  BROUGHT  AGAINST  THE  ADMINISTRATIVE AGENT OR ANY OF ITS RELATED PARTIES MAY ONLY) BE HEARD AND DETERMINED IN  SUCH  FEDERAL  (TO  THE  EXTENT  PERMITTED  BY  LAW)  OR  NEW YORK  STATE COURT,  AND  IRREVOCABLY  AND  UNCONDITIONALLY  WAIVES,            TO  THE  FULLEST EXTENT IT MAY LEGALLY AND EFFECTIVELY DO SO, ANY OBJECTION IT MAY NOW OR  HEREAFTER  HAVE  AS  TO  THE  VENUE  OF  ANY  SUCH  SUIT,  ACTION  OR PROCEEDING  BROUGHT  IN  SUCH  A  COURT  OR  THAT  SUCH  COURT  IS  AN INCONVENIENT  FORUM.   EACH  OF  THE  PARTIES  HERETO  AGREES  THAT  A  FINAL JUDGMENT  IN  ANY  SUCH  ACTION  OR  PROCEEDING  SHALL  BE         CONCLUSIVE  AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE  JUDGMENT  OR  IN ANY  OTHER  MANNER  PROVIDED  BY  LAW.   NOTHING  HEREIN  OR  IN  ANY  OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE ADMINISTRATIVE AGENT, THE ISSUING BANK, OR ANY LENDER MAY OTHERWISE HAVE TO BRING ANY ACTION OR  PROCEEDING  RELATING  TO  THIS  SECURITY  AGREEMENT  AGAINST  ANY GRANTOR OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.         8.18. WAIVER     OF   JURY   TRIAL .   EACH  GRANTOR,  THE  ADMINISTRATIVE AGENT AND EACH LENDER HEREBY WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT THEY MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS  SECURITY  AGREEMENT,  ANY  OTHER  LOAN  DOCUMENT  OR  THE TRANSACTIONS  CONTEMPLATED  HEREBY  OR  THEREBY  (WHETHER  BASED  ON CONTRACT, TORT OR ANY OTHER THEORY).  EACH GRANTOR (A) CERTIFIES THAT NO REPRESENTATIVE, OTHER AGENT (INCLUDING ANY ATTORNEY) OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER  AND  (B) ACKNOWLEDGES  THAT  IT  AND  THE  OTHER  GRANTORS  PARTY HERETO  HAVE  BEEN  INDUCED  TO  ENTER  INTO  THIS  SECURITY  AGREEMENT  BY, AMONG  OTHER  THINGS,  THE  MUTUAL  WAIVERS  AND  CERTIFICATIONS  IN  THIS SECTION.         8.19. Service   of   Process .   Each  party  to  this  Security  Agreement  irrevocably  consents  to service of process in the manner provided for notices in Article IX of this Security Agreement, and each of the Grantors hereby appoints the Borrower as its agent for service of process.  Nothing in this Security Agreement or any other Loan Document will affect the right of any party to this Security Agreement to serve process in any other manner permitted by law.                                            26 - -





 






                         EXHIBIT F   Exhibit A to Security Agreement          [See attached.]                  





 






                                                                                                                                EXHIBIT A                    (See Sections 3.2, 3.3, 3.4, 3.9 and 9.1 of Security Agreement)                           NOTICE ADDRESS FOR ALL GRANTORS                           FARMER BROS. CO.                          1912 Farmer Brothers Drive                          Northlake, Texas 76262                          Attention:  Scott Drake                          E-mail: sdrake@farmerbros.com             INFORMATION AND COLLATERAL LOCATIONS OF FARMER BROS. CO.   I.     Name of Grantor :  Farmer Bros. Co.   II.    State of Incorporation or Organization :  Delaware   III.   Type of Entity :  Corporation   IV.    Organizational Number assigned by State of Incorporation or Organization :  3742785   V.    Federal Identification Number :  95-0725980   VI.    Place  of  Business   (if  it  has  only one) or  Chief  Executive  Office  (if  more  than one place of        business) and Mailing Address :         1912 Farmer Brothers Drive        Northlake, Texas 76262        Attention:  Scott Drake   VII.   Locations of Collateral :            (a)   Properties Owned by the Grantor:                See Attachment I.          (b)   Properties Leased by the Grantor (include Landlord’s Name):                See Attachment I.          (c)   Public Warehouses or other Locations pursuant to Bailment or Consignment Arrangements               (include name of Warehouse Operator or other Bailee or Consignee):                            Warehouse            Address             City     State   Zip                        Operator/ Bailee                                           Code                    1.  Goodson Bros.  4700 Industrial Park Drive  Lenior City  TN  37771                        Coffee Co.                    2.  Millard        730 Spreckles Ave        Manteca     CA    95336                        Refrigerated                        Service                    3.  DBA J&D        12300 SE Carpenter Dr.   Clackamas   OR    97015                        Refrigerated                        Services Inc.      US-DOCS\116984916.3 





 






4.   Americold        1415 North Raymond Avenue   Anaheim       CA     92801       Anaheim  5.   TransDock Cold   350 Garden Acres Dr         Fort Worth    TX     76140       Storage  6.   Cadeco Industries 5610 Clinton Dr            Houston       TX      77020  7.   Cadeco Industries 5800 Clinton Dr            Houston       TX      77020  8.   Cadeco Industries 200 Emile Street           Houston       TX      77020  9.   Dupuy Storage,       LLC              4300 Jourdan Rd             New Orleans   LA      70126  10.  Dupuy Storage,       LLC              7703 Cannon St.             Houston       TX      77021  11.  Costa Oro       International    4901 NE 185th Dr.           Portland      OR      97230  12.  East Bay Logistics  1900 West Winton Ave     Hayward       CA      94545  13.  East Bay Logistics  1800 Merced St           San Leandro   CA      94577  14.  East Bay Logistics  25503 Industrial Blvd    Hayward       CA      94545  15.  East Bay Logistics  4800 East Valley         Sumner        WA      98390  16.  East Bay Logistics  18924 S. Laurel Park Rd  Compton       CA      90220  17.  Green Room Inc   1302 29th Street NW         Auburn        WA      98001  18.  Royal Coffee     6201 Coliseum Way, Unit A   Oakland       CA      94621  19.  RPM Warehouse    1500 Rahway Ave             Avenel        NJ       7001  20.  RPM Warehouse    2900 Woodbridge Ave         Edison        NJ       8837  21.  RPM Warehouse    201 Dexter St. West         Chesapeake    VA      23324  22.  All Jays       Warehouse        600 N Union Ave             Hillside      NJ       7205  23.  Annex  Warehouse  1951 B Fairway Dr          San Leandro   CA      94577  24.  Annex  Warehouse  1345 A Doolittle Dr        San Leandro   CA      94577  25.  Continental       Terminals Inc    200 Middlesex Ave           Carteret      NJ       7008  26.  Continental       Terminals Inc    1032 Cavalier Blvd          Chesapeake    VA      23323  27.  Continental       Terminals Inc    201 Luken Rd                Goose Creek   SC      29445                                  





 






                                                                    ATTACHMENT I – OWNED AND LEASED PROPERTIES                       FARMER BROS. CO       . – OWNED and LEASED PROPERTIES         Owned = O   Bran     Warehouse               Address               City      State   Zip        Leased = L  ch #                                                                     Code   28.  O          2      San Diego        7855 Ostrow St.             San Diego     CA     92111   29.  O          3      Lake Havasu      1105 Aviation Dr            Lake Havasu   AZ     86404   30.  L           4     Hayward          20677 Corsair Blvd.         Hayward       CA     94545   31.  L           5     Tempe (Phoenix)  455 W. Diamond Drive        Tempe         AZ     85282   32.  O          6      Tucson           3818 S. Evans Blvd.         Tucson        AZ     85714   33.  L           7     San Luis Obispo    3450 Broad St   Suite  109   San Luis   CA     93401                                                                       Obispo   34.  O          8      Stockton         4243 Arch Rd.               Stockton      CA     95215   35.  O          9      Fresno           4576 N. Bendel Lane         Fresno        CA     93722   36.  O          10     Sacramento       2450 Boatman Ave.           Sacramento    CA     95691   37.  O          11     Bakersfield      8802 Swigert Ct.            Bakersfield   CA     93311   38.  L           12    Eureka           417 W. Wabash Ave.          Eureka        CA     95501   39.  Storage     14    Santa Rosa       3001 S. State Street        Ukiah         CA     95482   40.  O          15     Castroville      11460 Commercial Pkwy.      Castroville   CA     95012   41.  O          16     Idaho Falls      805 S. Saturn Ave.          Idaho Falls   ID     83402   42.  Storage     16    Idaho Falls      3400 South Hwy 89, Unit #30  Jackson      WY     83001   43.  O          17     Carson City      3880 Technology Way         Carson City   NV     89706   44.  O          18     Albuquerque      5911 Office Blvd.           Albuquerque   NM     87109   45.  O          19     Chico (Leased to 480 Ryan Ave. Ste. 100      Chico         CA     95973                          Little Red Hen                          Nursery)   46.  O          20     Valley           9373 Remick Ave.            Arleta        CA     91331   47.  O          22     Flagstaff        2385 N. Walgreen St.        Flagstaff     AZ     86004   48.  O          24     Victorville      17190 Yuma St.              Victorville   CA     92395   49.  O          26     Salt Lake City   2230 So. 2000 West          Salt Lake City  UT   84119   50.  L           28    Springfield      3430 Constitution  Dr.      Springfield   IL     62711   51.  O          30     El Paso          1325 Don Haskins Dr.        El Paso       TX     79936   52.  O          31     Bishop           324 E. Clarke St.           Bishop        CA     93514   53.  L           32    Medford          777 E. Vilas Rd.            Central Point  OR    97502   54.  L           33    Amarillo         2100 SE 10th Ave            Amarillo      TX     79101   55.  L           34    Roswell          710 E. College              Roswell       NM     88201   56.  L           36    Little Rock      7630 Hardin Dr.             Little Rock   AR     72117   57.  L           37    Bismarck         2001 3rd  Street SE         Mandan        ND     58554   58.  O          38     Santa Ana        3921 W. Segerstrom Ave.     Santa Ana     CA     92704   59.  O          39     Billings         2625 Enterprise Ave.        Billings      MT     59102   60.  L           41    Odessa           2017 W. 7 th  Street        Odessa        TX     79763   61.  L           42    Kent             19815 85th Avenue South     Kent          WA     98031   62.  L           43    Moline           2950 38th Ave.              Moline        IL     61265   63.  O          44     Spokane          E 10915 Montgomery Dr.      Spokane       WA     99206   64.  O          46     Yakima           2301 S. 18th St.            Union Gap     WA     98903   65.  Storage     46    Yakima           5031 W Clearwater Avenue    Kennewick     WA     99336   66.  L           47    Eugene           2495 Unit C Prairie Road    Eugene        OR     97402   67.  L           49    Madison                      4021     Owl Creek Drive   Madison  WI  53718   68.  O          50     Portland         7515 NE 33rd Dr.            Portland      OR     97211                                                       US-DOCS\116984916.3 





 






    69.  O          52     Elko             P.O.Box 67 89803 460 S. A St.  Elko       NV     89801    70.  O          53     Grand Junction   2848 Chipeta                Grand Junction  CO   81501   71.  O          55     Omaha            3217 Nebraska Ave.          Council Bluffs  IA   51501   72.  L           56    Fargo            710 38th St. N.W. Unit B. C. D  Fargo     ND     58102    73.  L           57    Casper           2080 Fairgrounds, Ste 6     Casper        WY     82604   74.  L           58    Denver           5595 Joliet St.             Denver        CO     80239   75.  Storage     58    N. Platte ( Denver)  603 Sioux Meadow        North Platte  NE     69101   76.  L           59    Corpus Christi   3909 Wow Rd.                Corpus Christi  TX   78413   77.  L           60    Boise            7235 Bethel Street          Boise         ID     83704   78.  L           62    Wichita Falls    1404 Beverly Drive          Wichita Falls  TX    76309   79.  Storage     62    Wichita Falls-   4209 Spindletop Drive Unit 34  Abilene    TX     79602                          Abilene   80.  O          63     Memphis          5753 E. Shelby Dr. Ste. 1   Memphis       TN     38141   81.  O          66     San Antonio      4930 Center Park Blvd.      San Antonio   TX     78218   82.  O          67     Palm Springs     72205 Corporate Way         Thousand      CA     92276                                                                       Palms   83.  L           69    Rochester        7700 Air Commerce Dr #104   Rochester     MN     55902    84.  O          72     St. Louis        12832 Pennridge Dr.         Bridgeton     MO     63044   85.  O          73     Rapid City       2030 Creek Drive            Rapid City    SD     57703   86.  O          74     Kansas City      9 N.E. Skyline Dr.          Lee's Summit  MO     64086   87.  O          75     Blaine           3074 84 th Lane N.E.        Blaine        MN.    55449   88.  O          81     Austin (Round    2004 Lamar Drive            Round Rock    TX     78664                          Rock)   89.  L           83    Shreveport       4113 Metro Dr.              Shreveport    LA     71109   90.  O          85     McAllen          1312 E. Laurel              McAllen       TX     78501   91.  L           88    Springdale                   543      Madison  Street  Springdale   AR  72762   92.  L           101   Missoula         2720 Palmer St. Unit E      Missoula      MT     59808   93.  L           105   Sioux Falls      926 West Cherokee           Sioux Falls   SD     57104   94.  L           108   Evansville       1905 N. Kentucky Ave.       Evansville    IN     47711   95.  L           111   Duluth           4314 Enterprise Cr.         Duluth        MN     55811   96.  O          117    Santa Fe Springs   9901 Bell Ranch Dr.       Sante Fe      CA     90670                                                                       Springs   97.  O          124    Rialto           2751 S. Lilac Ave.          Bloomington   CA     92316   98.  L           140   Houston          6300 West by NW Blvd, Ste. 400  Houston   TX     77040   99.  L           204   Northlake-DC (Br 120 Whitehall Ave           Northlake     IL     60164                          137)                   100.  L          210   Moonachie-DC     75 State Street             Moonachie     NJ     07074                          (Br 134)   101.  L          213   Merrillville –   1503 E. 91st Drive          Merrillville  IN     46410                          Truck Storage   102.  L          216   Little Chute     1004 Randolph Drive         Little Chute  WI     54140                          (Weston move)   103.  L          218   Grand Rapids   / 3322 Lousma Southeast Ste. 503 Wyoming    MI     49548                          Wyoming          & 504   104.  L          219   Saginaw          3691 Fashion Square Blvd.   Saginaw       MI     48603   105.  L          222   Grand Forks      2402 N. 43rd  St.           Grand Forks   ND     58201   106.  L          226   Lima             1658 West Breese            Lima          OH     45806   107.  L          229   Tulsa            11529-31 E. Pine            Tulsa         OK     74128   108.  L          230   Wichita          427 S. Washington           Wichita       KS     67202      US-DOCS\116984916.3 





 






    109.  L          240   Springfield      540 A N. Cederbrook         Springfield   MO     65802   110.  L          245   Pewaukee         W 232 N 2960 Roundy Circle  Pewaukee      WI     53072                                           West   111.  L          247   Indianapolis (Indy)  5777 Decatur Blvd, Ste 250  Indianapolis  IN  46241    112.  L          255   E. Syracuse      6838  Ellicott Drive, Ste. 4  E. Syracuse  NY    13057   113.  L          256   Waterbury                54 Great Hills  Road   Naugatuck  CT     06770-                                                                                           2224   114.  L          259   Medley           9021 NW 105th Way           Medley        FL     33178   115.  L          265   Lakeland         3810 Drane Field Rd         Lakeland      FL     33811   116.  L          266   Atlanta          1400 Northbrook Pkwy  Ste. 370  Suwanee   GA     30024   117.  L          272   Las Vegas        1051 Mary Crest, Ste. J     Henderson     NV     89074   118.  L          276   Runnemede        190 Ninth Ave   Unit B      Runnemede     NJ     08078   119.  O         278    Oklahoma City            13131           N. Broadway Ext.  Oklahoma City  OK  73114   120.  Truck      285   Houston          5800 Clinton Drive          Houston       TX     77020   121.  L          286   Houston-Plant    235 North Norwood Street    Houston       TX     77011   122.  L          302   Cleveland        9200 Market Place, Building B  Broadview  OH     44147                                                                       HTC   123.  L          303   Plymouth         9260 General                Plymouth      MI     48170   124.  L          304   Pittsburgh       215 Commerce Park Dr.       Cranberry     PA     16066                          (Cranberry )                                 Twnshp   125.  L          305   Baltimore (Jessup)  8268 Preston Court     Unit  H  Jessup  MD    20794    126.  L          306   Columbus         2543 Westbelt Drive         Columbus      OH     43228   127.  L          311   Boston           29 Esquire Road  Unit B     North Billerica  MA  01862   128.  O         503/   NTX Distribution 1916/1912 Farmer Brothers Drive  Northlake  TX   76262                    509   Center  and                          Manufacturing                          Plant   129.  L          520   Portland-PLANT         9120         NE       Alderwood  Road  Portland   OR  97220   130.  O         789    Fort Worth - HQ  1912 Farmer Brothers Drive  Northlake     TX     76262   131.  Retail     5007  Public Domain            603    SW Broadway Street    Portland   OR  97205   132.  L – West    7003  Hillsboro       21400 N.W. Mauzey Rd.       Hillsboro     OR     97124       Cost Coffee       -Plant   133.  L – West   7003  Eugene           3843 W. 11th (Units 31,33, & 35)  Eugene   OR    97402       Coast Coffee       property    134.  L – West   7003  Fortuna          608 L. Street               Fortuna       CA     95540       Coast Coffee       property    135.  L – West   7003  Livermore        2416 Research Dr.           Livermore     CA     94550       Coast Coffee       property    136.  L – West   7003  Woodland         1250 Harter Ave. Ste. B     Woodland      CA     95776       Coast Coffee       property    137.  L – West   7003  Las Vegas        6625 S. Valley View Blvd.   Las Vegas     NV     89118       Coast Coffee       property    138.  L – West   7003  Bakersfield      4205 Resnik Ct. Ste. #3b    Bakersfield   CA     93313       Coast Coffee       property    139.  L          9002  Gastonia - CBE   935 N. New Hope Rd #C21112  Gastonia      NC     28054                          Coffee Equipment      US-DOCS\116984916.3 





 






    140.  L          9003  La Crosse (Coffee 1629 Caledonia St. Bldg.-21,Unit La Crosse  WI  54603                          Equipment)       #6-Q4                             Owned building that are vacant and (1) vacant parcel   141.     O        24      Victorville          17190 Yuma St.         Victorville   CA.  92395      US-DOCS\116984916.3 





 






                                               INFORMATION AND COLLATERAL LOCATIONS OF COFFEE BEAN INTERNATIONAL, INC.   1.    Name of Grantor:  COFFEE BEAN INTERNATIONAL, INC.       II.   State of Incorporation or Organization:  Oregon    III.   Type of Entity:  Corporation    IV.   Organizational Number assigned by State of Incorporation or Organization:  129369-10    V.    Federal Identification Number:  93-0714098   VI.    Place  of  Business (if  it  has  only  one) or  Chief  Executive  Office (if  more  than  one  place  of        business) and Mailing Address:         1912 Farmer Brothers Drive        Northlake, Texas 76262        Attention:  Scott Drake     VII.   Locations of Collateral:            (a)   Properties Owned by the Grantor:                None.          (b)   Properties Leased by the Grantor (include Landlord’s Name):                 None.          (c)   Public Warehouses or other Locations pursuant to Bailment or Consignment Arrangements               (include name of Warehouse Operator or other Bailee or Consignee):                 9120 NE Alderwood Road               Portland, OR 97220               Name of Landlord:  Kidder Mathews                                                       US-DOCS\116984916.3 





 






          INFORMATION AND COLLATERAL LOCATIONS OF FBC FINANCE COMPANY   I.     Name of Grantor:  FBC FINANCE COMPANY      II.    State of Incorporation or Organization:  California    III.   Type of Entity:  Corporation    IV.    Organizational Number assigned by State of Incorporation or Organization:  0905697    V.     Federal Identification Number:  95-3428785    VI.    Place  of  Business (if  it  has  only  one) or  Chief  Executive  Office (if  more  than  one  place  of        business) and Mailing Address:         1912 Farmer Brothers Drive        Northlake, Texas 76262        Attention:  Scott Drake     VII.   Locations of Collateral:           (a)   Properties Owned by the Grantor:                None.          (b)   Properties Leased by the Grantor (include Landlord’s Name):                None.           (c)   Public Warehouses or other Locations pursuant to Bailment or Consignment Arrangements               (include name of Warehouse Operator or other Bailee or Consignee):                None.      US-DOCS\116984916.3 





 






   INFORMATION AND COLLATERAL LOCATIONS OF COFFEE BEAN HOLDING CO., INC.    I.     Name of Grantor :  COFFEE BEAN HOLDING CO., INC.   II.    State of Incorporation or Organization :  Delaware   III.   Type of Entity :  Corporation   IV.    Organizational Number assigned by State of Incorporation or Organization :  3781157   V.    Federal Identification Number :  56-2488947   VI.    Place  of  Business   (if  it  has  only one) or  Chief  Executive  Office  (if  more  than one place of        business) and Mailing Address :         1912 Farmer Brothers Drive        Northlake, Texas 76262        Attention:  Scott Drake    VII.  Locations of Collateral:           (a)    Properties Owned by the Grantor:                 None.          (b)   Properties Leased by the Grantor (include Landlord’s Name):                 None.          (c)   Public Warehouses or other Locations pursuant to Bailment or Consignment Arrangements               (include name of Warehouse Operator or other Bailee or Consignee):                 None.         US-DOCS\116984916.3 





 






   INFORMATION AND COLLATERAL LOCATIONS OF CHINA MIST BRANDS, INC.    I.     Name of Grantor :  CHINA MIST BRANDS, INC.   II.    State of Incorporation or Organization :  Delaware   III.   Type of Entity :  Corporation   IV.    Organizational Number assigned by State of Incorporation or Organization :  61339189   V.    Federal Identification Number :  81-3861172   VI.    Place  of  Business   (if  it  has  only one) or  Chief  Executive  Office  (if  more  than one place of        business) and Mailing Address :          1912 Farmer Brothers Drive        Northlake, Texas 76262        Attention:  Scott Drake    VII.  Locations of Collateral:            (a)   Properties Owned by the Grantor:                 None.          (b)   Properties Leased by the Grantor (include Landlord’s Name):                 None.           (c)  Public Warehouses or other Locations pursuant to Bailment or Consignment Arrangements               (include name of Warehouse Operator or other Bailee or Consignee):                None.                                      US-DOCS\116984916.3 





 






   INFORMATION AND COLLATERAL LOCATIONS OF BOYD ASSETS CO.    I.     Name of Grantor :  BOYD ASSETS CO.   II.    State of Incorporation or Organization :  Delaware   III.   Type of Entity :  Corporation   IV.    Organizational Number assigned by State of Incorporation or Organization :  6498468   V.    Federal Identification Number :  82-2659061   VI.    Place  of  Business   (if  it  has  only one) or  Chief  Executive  Office  (if  more  than one place of        business) and Mailing Address :         1912 Farmer Brothers Drive        Northlake, Texas 76262        Attention:  Scott Drake          VII.  Locations of Collateral:            (a)   Properties Owned by the Grantor:                 None.          (b)   Properties Leased by the Grantor (include Landlord’s Name):                 None.          (c)   Public Warehouses or other Locations pursuant to Bailment or Consignment Arrangements               (include name of Warehouse Operator or other Bailee or Consignee):                 None.       US-DOCS\116984916.3 





 






                         EXHIBIT G   Exhibit G to Security Agreement          [See attached.]                   





 






                                                                                    EXHIBIT G            (See Section 3.13 of Security Agreement and Definition of “Pledged Collateral”)       LIST OF PLEDGED COLLATERAL, SECURITIES AND OTHER INVESTMENT PROPERTY                                          STOCKS    Name of Grantor    Issuer     Certificate Number of    Class of Stock   Percentage of                                 Number(s)     Shares                   Outstanding Shares   Farmer Bros. Co.  FBC Finance 1          10,000        Common         100%                  Company  Farmer Bros. Co.  Coffee Bean 10         1,000         Common         100%                  Holding Co.,                  Inc.  Coffee Bean     Coffee Bean   1          100           Common         100%  Holding Co., Inc. International,                  Inc.  Farmer Bros. Co.   Boyd Assets 2         100           Common         100%                  Co.  Farmer Bros. Co.  China Mist  C-01       100           Common         100%                  Brands, Inc.   Farmer Bros. Co.  Coffee Bean N/A        N/A           Membership     100%                   International                          interests                   LLC                                             BONDS    Name of Grantor    Issuer      Number    Face Amount    Coupon Rate       Maturity   None.                                                                                    GOVERNMENT SECURITIES    Name of Grantor    Issuer      Number     Type   Face Amount   Coupon Rate   Maturity   None.                                                                OTHER SECURITIES OR OTHER INVESTMENT PROPERTY                           (CERTIFICATED AND UNCERTIFICATED)       Name of Grantor           Issuer        Description of Collateral  Percentage Ownership                                                                           Interest  None.                                                                                 INSTRUMENTS       Name of Grantor                              Description  Farmer Bros. Co.      Broker Agreement and Note, dated as of April 1, 2019, by and between Florida                        Semoinole Coffee Company, Inc. and Farmer Bros. Co.