**Exhibit 10.6**

 

AMENDMENT NO. 2TOLOAN AND SECURITY AGREEMENT AND CONSENT

 

THIS AMENDMENT NO. 2 TO LOAN AND SECURITYAGREEMENT AND CONSENT (this “Amendment No. 2”), dated as of July 27,2009, is by and among Wachovia Bank, National Association, a national bankingassociation (“Lender”), Farmer Bros. Co., a Delaware corporation (as survivingcorporation of the merger with FBC Realty, LLC formerly known as SL Realty,LLC, a Delaware limited liability company, “Farmer”) and Coffee BeanInternational, Inc., an Oregon corporation (“CBI” and together withFarmer, each individually a “Borrower” and collectively, “Borrowers”), CoffeeBean Holding Co., Inc., a Delaware corporation (“Coffee Holding”), FBCFinance Company, a California corporation (“Finance” and together with CoffeeHolding, each individually a “Guarantor” and collectively, “Guarantors”).

 

W I T N E S S E T H :

 

WHEREAS, Lender, Borrowers and Guarantorshave entered into financing arrangements pursuant to which Lender has made, andmay make, loans and advances and provide other financial accommodations toBorrowers as set forth in the Loan and Security Agreement, dated as of March 2,2009, by and among Lender, Borrowers and Guarantors, the “Loan Agreement”,Amendment No. 1 to Loan and Security Agreement, dated as of March 2,2009, by and among Lender, Borrowers and Guarantors, and together with allagreements, documents and instruments at any time executed or delivered inconnection therewith or related thereto, as from time to time amended andsupplemented, collectively, the “Financing Agreements”);

 

WHEREAS, Borrowers andGuarantors have requested that Lender agree to make certain amendments to theLoan Agreement and agree to certain consents under the Loan Agreement, andLender is willing to agree, subject to the terms and conditions set forthherein, to make such amendments and agree to such consents, as morespecifically set forth herein; and

 

WHEREAS, by this Amendment No. 2,Lender, Borrowers and Guarantors desire and intend to evidence such amendmentsand consents.

 

NOW THEREFORE, in consideration of theforegoing and the mutual agreements and covenants contained herein, the partieshereto agree as follows:

 

# 1.     Definitions.

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## 1.1      Additional Definition. As used herein, the term “Amendment No. 2” shall mean Amendment No. 2to Loan and Security Agreement and Consent, by and between Lender and Borrower,as the same now exists or may hereafter be amended, modified, supplemented,extended, renewed, restated or replaced, and the Loan Agreement and the other Financing

 

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## Agreements shall be deemed and are herebyamended to include, in addition and not in limitation, such definition.

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## 1.2      Eligible Inventory.

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### (a)   The definition of “Eligible Inventory” in Section 1.34 of theLoan Agreement is hereby amended by deleting clause (f)(iii)(A) thereof inits entirety and substituting the following therefor:

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“(A) asto locations which are leased by any Borrower, if Lender shall have received aCollateral Access Agreement from the owner and lessor of such location, dulyauthorized, executed and delivered by such owner and lessor or, if Lender shallnot have received such Collateral Access Agreement (or Lender shall determineto accept a Collateral Access Agreement that does not include all requiredprovisions or provisions in the form otherwise required by Lender), Lender may,at its option, nevertheless consider Inventory at such location to be EligibleInventory to the extent Lender shall have established such Reserves in respectof amounts at any time payable by such Borrower to the owner and lessor thereofas Lender shall determine in good faith,”

 

## 1.3      Interpretation. All capitalized terms used herein shall have the meanings assignedthereto in the other Financing Agreements, unless otherwise definedherein.  All references to the pluralherein shall also mean the singular and all references to the singular hereinshall also mean the plural, in each case unless otherwise required by thecontext of the use thereof.

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# 2.     Additional Representations, Warranties and Covenants.  Borrowers and Guarantors represent, warrantand covenant with and to Lender as follows, which representations, warrantiesand covenants, together with the representations, warranties and covenants inthe other Financing Agreements, are continuing and shall survive the executionand delivery hereof, and the truth and accuracy of, or compliance with each,being a continuing condition of the making of Loans by Lender to Borrowers:

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## 2.1      No action of, or filing with, or consent of any GovernmentalAuthority, and no approval or consent of any other Person, is or will berequired to authorize, or is or will be otherwise required in connection with,the execution, delivery and performance by Borrowers and Guarantors of thisAmendment No. 2.

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## 2.2      This Amendment No. 2 and each other agreement, document orinstrument to be executed and delivered by any Borrower or Guarantor inconnection therewith or herewith has been duly authorized, executed anddelivered by all necessary action on the part of such Borrower or Guarantor,and Amendment No. 2 and each other agreement, document or instrument to beexecuted and delivered by Borrowers and Guarantors in connection therewith orherewith is in full force and effect as of the date of Amendment No. 2 andthe agreements and obligations of Borrowers and Guarantors contained herein andtherein constitute legal, valid and binding obligations of Borrowers andGuarantors enforceable against Borrowers and Guarantors in accordance withtheir respective terms.

 

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## 2.3      Neither the execution and delivery of this Amendment No. 2or the documents, agreements or instruments executed or delivered in connectiontherewith or related thereto, nor the consummation of the transactions hereinor therein contemplated, nor compliance with the provisions hereof or thereofis in contravention of any law or regulation or any order or decree of anycourt or Governmental Authority applicable to Borrowers and Guarantors in anyrespect, or conflicts with or result in the breach of, or constitutes a defaultin any respect under any mortgage, deed of trust, security agreement, agreementor instrument to which any Borrower or Guarantor is a party or may be bound, orviolates any provision of the formation or other organizational documents ofany Borrower or Guarantor.

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## 2.4      After giving effect to this Amendment No. 2, no Event ofDefault or act, condition or event which with notice or passage of time or bothwould constitute an Event of Default exists or has occurred and is continuingon the date of Amendment No. 2.

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# 3.     Conditions Precedent. The effectiveness of the amendments and consents contained herein shallbe subject to the receipt by Lender of each of the following, in form andsubstance satisfactory to Lender:

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## 3.1      an original of this Amendment No. 2, duly authorized,executed and delivered by the parties hereto;

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## 3.2      a true and correct copy of any consent, waiver or approval toor of this Amendment No. 2, which any Borrower or Guarantor is required toobtain from any other Person; and

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## 3.3      after giving effect to this Amendment No. 2, no Event ofDefault or act, condition or event which with notice or passage of time or bothwould constitute an Event of Default exists or has occurred and is continuingon the date of this Amendment No. 2.

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# 4.     Effect of this Amendment. Except as expressly set forth herein, no other amendments, consents,changes or modifications to the Financing Agreements are intended or implied,and in all other respects the Financing Agreements are hereby specificallyratified, restated and confirmed by all parties hereto as of the effective datehereof and Borrowers and Guarantors shall not be entitled to any other orfurther amendment or consent by virtue of the provisions of this Amendment No. 2or with respect to the subject matter of this Amendment No. 2.  To the extent of conflict between the termsof this Amendment No. 2 and the other Financing Agreements, the terms ofthis Amendment No. 2 shall control. The Loan Agreement and this Amendment No. 2 shall be read andconstrued as one agreement.

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# 5.     Further Assurances. The parties hereto shall execute and deliver such additional documentsand take such additional action as may be necessary or desirable to effectuatethe provisions and purposes of this Amendment No. 2.

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# 6.     Governing Law.  Thevalidity, interpretation and enforcement of this Amendment No. 2 and theother Financing Agreements and any dispute arising out of the relationshipbetween the parties hereto whether in contract, tort, equity or otherwise,shall be governed by the internal laws of the State of California but excludingany principles of conflict of laws or other rule of 

 

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# law that would cause the application of thelaw of any jurisdiction other than the laws of the State of California.

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# 7.     Waiver, Modification, Etc.  No provision or term hereof may be modified,altered, waived, discharged or terminated orally, but only by an instrument inwriting executed by the party against whom such modification, alteration,waiver, discharge or termination is sought to be enforced.

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# 8.     Entire Agreement. This Amendment No. 2 represents the entire agreement andunderstanding concerning the subject matter hereof among the parties hereto,and supersedes all other prior agreements, understandings, negotiations anddiscussions, representations, warranties, commitments, proposals, offers andcontracts concerning the subject matter hereof, whether oral or written.

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# 9.     Binding Effect. This Amendment No. 2 shall be binding upon and inure to the benefitof each of the parties hereto and their respective successors and assigns.

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# 10.   Severability.  Anyprovision of this Agreement held by a court of competent jurisdiction to beinvalid or unenforceable shall not impair or invalidate the remainder of thisAgreement and the effect thereof shall be confirmed to the provision so held tobe invalid or unenforceable.

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# 11.   Headings.  Theheadings listed herein are for convenience only and do not constitute mattersto be construed in interpreting this Amendment No. 2.

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# 12.   Counterparts.  ThisAmendment No. 2 may be executed in any number of counterparts, each ofwhich shall be an original, but all of which taken together shall constituteone and-the same agreement.  Delivery ofan executed counterpart of this Amendment No. 2 by telefacsimile or otherelectronic method of transmission shall have the same force and effect as thedelivery of an original executed counterpart of this Amendment No. 2.  Any party delivering an executed counterpartof this Amendment No. 2 by telefacsimile or other electronic method oftransmission shall also deliver an original executed counterpart of thisAmendment No. 2, but the failure to do so shall not affect the validity,enforceability or binding effect of such agreement.

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IN WITNESS WHEREOF, the parties hereto havecaused this Amendment No. 2 to be duly executed and delivered by theirauthorized officers as of the day and year first above written.

 
| LENDER                               |                 | BORROWERS         |
|--------------------------------------|----------------------|-------------------|
|                                 |                 |              |
| WACHOVIA  BANK, NATIONAL ASSOCIATION |                 | FARMER  BROS. CO. |
|                                 |                 |              |   |
| By:                                  | /s/  Gary Whitaker   |              | By: | /s/  John E. Simmons |
| Name:                                | Gary  Whitaker       |              | Name: | John  E. Simmons |
| Title:                               | Director             |              | Title: | Treasurer  and CFO |
|                                 |                 |              |   |   |   |
|                                 |                 |              |   | COFFEE  BEAN INTERNATIONAL, INC. |
|                                 |                 |              |   |   |   |
|                                 |                 |              |   | By: | /s/  John E. Simmons |
|                                 |                 |              |   | Name: | John  E. Simmons |
|                                 |                 |              |   | Title: | Director |
|                                 |                 |              |   |   |   |
| GUARANTORS                           |                 |              |   |
|                                 |                 |              |   |   |   |
| COFFEE  BEAN HOLDING CO., INC.       |                 |              |   |
|                                 |                 |              |   |   |   |
| By:                                  | /s/  John E. Simmons |              |   |   |
| Name:                                | John  E. Simmons     |              |   |   |
| Title:                               | Treasurer  and CFO   |              |   |   |
|                                 |                 |              |   |   |   |
| FBC  FINANCE COMPANY                 |                 |              |   |
|                                 |                 |              |   |   |   |
| By:                                  | /s/  John E. Simmons |              |   |   |
| Name:                                | John  E. Simmons     |              |   |   |
| Title:                               | Director             |              |   |   |

 

[AmendmentNo. 2 to Loan and Security Agreement]

 

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