Document:

Exhibit 10.11

 

AMENDMENT NO. 1

TO

SENIOR SECURED REVOLVING CREDIT FACILITY AGREEMENT

 

IN THE AMOUNT OF US$8,000,000

 

BY AND AMONG

 

RICEBRAN TECHNOLOGIES,

as Borrower,

 

NUTRACEA, LLC,

SRB-IP, LLC,

SRB-MERM, LLC,

SRB-LC, LLC,

SRB-MT, LLC,

SRB-WS, LLC,

RICEX COMPANY,

RICEX NUTRIENTS, INC.,

RICE SCIENCE, LLC,

RICE RX, LLC,

as Joint and Several Guarantors,

 

AND

 

TCA GLOBAL CREDIT MASTER FUND, LP,

as Lender

 

 

July 18, 2013

AMENDMENT NO. 1 TO

SENIOR SECURED REVOLVING CREDIT FACILITY AGREEMENT

 

THIS AMENDMENT NO. 1 TO SENIOR SECURED REVOLVING CREDIT FACILITY AGREEMENT (this “Amendment”) is made as of July 18, 2013 (the “Effective  Date”), by and among (i) RICEBRAN TECHNOLOGIES, a corporation incorporated under the laws of the State of California, as borrower (the “Borrower”), (ii) NUTRACEA, LLC, a limited liability company organized and existing under the laws of the State of Delaware, SRB-IP, LLC, limited liability company organized and existing under the laws of the State of Delaware, SRB­MERM, LLC, a limited liability company organized and existing under the laws of the State of Delaware, SRB-LC, LLC, a limited liability company organized and existing under the laws of the State of Delaware, SRB-MT, LLC, a limited liability company organized and existing under the laws of the State of Delaware, SRB-WS, LLC, a limited liability company organized and existing under the laws of the State of Delaware, RICEX COMPANY, a corporation incorporated under the laws of the State of Delaware, RICEX NUTRIENTS, INC., a corporation incorporated under the laws of the State of Montana, RICE SCIENCE, LLC, a limited liability company organized and existing under the laws of the State of Delaware, and RICE RX, LLC, a limited liability company organized and existing under the laws of the State of Delaware, as joint and several guarantors (together, jointly and severally, the “Guarantors” and together with the Borrower, the “Credit Parties”), and (iii) TCA GLOBAL CREDIT MASTER FUND, LP, a limited partnership organized and existing under the laws of the Cayman Islands, as lender (the “Lender”).

 

WITNESSETH

 

WHEREAS, the Credit Parties and the Lender have entered into that certain senior secured revolving credit facility agreement, dated as of April 30, 2013 (the “Credit Agreement”), pursuant to which the Lender agreed to make available to the Borrower a secured revolving loan in the amount of Eight Million United States Dollars (US$8,000,000), subject to the terms and conditions therein contained, and of this amount, the Lender made an initial principal advance of One Million Four Hundred Thousand United States Dollars (US$1,400,000) to the Borrower;

 

WHEREAS, as of the Effective Date, a total aggregate principal amount of One Million Four Hundred Thousand United States Dollars (US$1,400,000) of principal plus applicable interest are outstanding;

 

WHEREAS, in connection with this Amendment, the Borrower has requested and the Lender has agreed to advance an additional principal amount of One Million United States Dollars (US$1,000,000) (consisting of a principal advance in the amount of Six Hundred Thousand United States Dollars (US$600,000) (the “Second Tranche Advance”) and, subsequently, a principal advance in the amount of Four Hundred Thousand United States Dollars (US$400,000) (the “Third Tranche Advance”)) to the Borrower for working capital financing for Borrower and for any other purposes permitted under the Credit Agreement, as amended hereby;

 

WHEREAS, the parties to this Amendment desire to amend the Credit Agreement (as amended hereby, the “Amended Credit Agreement”), as set forth herein.

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NOW, THEREFORE, in consideration of the premises set forth above, the covenants and agreements hereinafter set forth, and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:

 

1.                   Defined Terms. Unless otherwise defined herein, the capitalized terms used herein shall have the meanings assigned to such terms in the Credit Agreement.

 

2.                  Amendment of the Amended Credit Agreement. Subject to the terms and conditions of this Amendment, the Credit Agreement is hereby amended and supplemented as follows:

 

(a)               all references to the “Senior Secured Revolving Credit Facility Agreement” or the “Agreement” contained in the Credit Agreement shall be deemed to refer to the Credit Agreement as amended hereby;

 

(b)                Section 1.1(hhh) shall be deleted in its entirety and shall be replaced with the text “[Reserved]”.

 

(c)                Section 1.1(mmm) shall be deleted in its entirety and shall be replaced with the following:

 

“Reserve Amount” shall mean an amount, expressed in Dollars, equal to fifteen percent (15%) of the then applicable Revolving Loan Commitment, provided, however that such amount shall be equal to, at a minimum, the following amounts on the following dates:

 

	
US$120,000

	
October 18, 2013

	
US$200,000

	
November 18, 2013

	
US$260,000

	
December 18, 2013

	
US$320,000

	
January 18, 2014

	
US$380,000

	
February 18, 2014

	
US$440,000

	
March 18, 2014

	
US$500,000

	
April 18, 2014

	
US$560,000

	
May 18, 2014

	
US$620,000

	
June 18, 2014

	
US$660,000

	
July 18, 2014

 

(d)                Section 2.1(d)(ii) shall be deleted in its entirety and shall be replaced with the text “[Reserved]”.

 

(e)                Section 2.1(e) shall be revised to replace the text “(5) if at any time the Lender is not holding, in the Lock Box Account, an amount equal to at least the Reserve Amount, then twenty percent (20%) of all Receipts received into the Lock Box Account shall be withheld and applied by Lender to amounts required to establish the Reserve Amount, until the Reserve Amount is reached, which Reserve Amount (or portion thereof) may be kept and maintained in the Lock Box Account during the duration of this Agreement as additional security for the Obligations” with the following text:

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(5) if at any time the Lender is not holding, in the Lock Box Account, an amount equal to at least the Reserve Amount, then the greater of (i) twenty 3percent (20%) of all Receipts received into the Lock Box Account or (ii) such an amount to achieve the Reserve Amount, shall be withheld and applied by Lender to amounts required to establish the Reserve Amount, until the Reserve Amount is reached, which Reserve Amount (or portion thereof) may be kept and maintained in the Lock Box Account during the duration of this Agreement as additional security for the Obligations

 

(f)                 The following shall be added as the final sentence of Section 2.1(e):

 

In the event that the Receipts deposited in the Lock Box Account are insufficient to establish the Reserve Amount pursuant to this Section, the Borrower shall make payment into the Lock Box Account equal to the Reserve Amount such that an amount equal to the Reserve Amount is held in the Lock Box Account by the Lender at all times.

 

(g)                The following shall be added as Section 14.24:

 

Usury Savings Clause. Notwithstanding any provision in this Agreement or the other Loan Documents, the total liability for payments of interest and payments in the nature of interest, including, without limitation, all charges, fees, exactions, or other sums which may at any time be deemed to be interest, shall not exceed the limit imposed by the usury laws of the jurisdiction governing this Agreement or any other applicable law. In the event the total liability of payments of interest and payments in the nature of interest, including, without limitation, all charges, fees, exactions or other sums which may at any time be deemed to be interest, shall, for any reason whatsoever, result in an effective rate of interest, which for any month or other interest payment period exceeds the limit imposed by the usury laws of the jurisdiction governing this Agreement, all sums in excess of those lawfully collectible as interest for the period in question shall, without further agreement or notice by, between, or to any party hereto, be applied to the reduction of the outstanding principal balance of this Agreement immediately upon receipt of such sums by the Lender hereof, with the same force and effect as though the Borrower had specifically designated such excess sums to be so applied to the reduction of such outstanding principal balance and the Lender hereof had agreed to accept such sums as a penalty-free payment of principal; provided, however, that the Lender may, at any time and from time to time, elect, by notice in writing to the Borrower, to waive, reduce, or limit the collection of any sums in excess of those lawfully collectible as interest rather than accept such sums as a prepayment of the outstanding principal balance. It is the intention of the parties that the Borrower do not intend or expect to pay nor does the Lender intend or expect to charge or collect any interest under this Agreement greater than the highest non-usurious rate of interest which may be charged under applicable law.

 

3.                   Second Tranche Advance. On the Effective Date, the Lender shall advance to the Borrower a principal amount equal to Six Hundred Thousand United States Dollars (US$600,000), provided that all conditions precedent contained herein have been satisfied, in the Lender’s sole and absolute discretion.

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4.                  Third Tranche Advance. On that date which is one hundred twenty (120) days following the Effective Date, the Lender may, in its sole and absolute discretion (employing substantially the same analysis and metrics the Lender used when determining to extend credit in connection with the Credit Agreement and in connection with this Amendment), advance to the Borrower a principal amount equal to Four Hundred Thousand United States Dollars (US$400,000). At a minimum, the conditions contained in Section 2.1(a) of the Credit Agreement must be satisfied, in Lender’s sole and absolute discretion, provided, however, that the satisfaction of such conditions shall not guarantee that the Third Tranche Advance shall be made.

 

5.                  Use of Proceeds. Notwithstanding anything which may be contained in the Credit Agreement to the contrary, the advance being made in connection with this Amendment shall be used for general working capital purposes including advances to Nutra SA/Irgovel.

 

6.                  Renewal of Revolving Loan. Pursuant to Section 2.3 of the Amended Credit Agreement, by its execution hereof, the Borrower hereby provides written notice to Lender of Borrower’s election to renew the Revolving Loan Commitment and extend the Revolving Loan Maturity Date for an additional six (6) month period commencing on the Effective Date and terminating on January 18, 2014 (subject to the terms and conditions of the Credit Agreement, as amended hereby) and, by its execution hereof, the Lender hereby consents and agrees to such renewal and extension.

 

7.                  Issuance of Amended Promissory Note. Subject to the terms and conditions of this Amendment, the Borrower shall and does hereby agree to issue to the Lender, simultaneously with the execution of this Amendment, an original promissory note in the principal amount of Two Million Four Hundred Thousand United States Dollars (US$2,400,000), or such lesser principal amount as may be outstanding from time to time, dated as of the Effective Date, in the form attached hereto as Exhibit A (the “Amended Promissory Note”).

 

8.                  Cancellation of Existing Promissory Note. By the Credit Parties’ execution and delivery to the Lender of the Amended Promissory Note, that certain promissory note originally issued by the Borrower in favor of the Lender, dated April 30, 2013, in the original principal amount of One Million Four Hundred Thousand United States Dollars (US$1,400,000) shall be hereby immediately and irrevocably cancelled without further action on the part of the Lender or the Credit Parties. It is the intention of the parties that while the Amended Promissory Note amends, restates, replaces and supersedes the existing promissory note, in its entirety, the issuance of the Amended Promissory Note is not in payment or satisfaction of the existing promissory note, but rather is the substitute of one evidence of debt for another without any intent to extinguish the existing debt.

 

9.                  Representations and Warranties of the Credit Parties. The Credit Parties each represent and warrant to the Lender that immediately after giving effect to this Amendment, the representations and warranties of each Credit Party set forth in the Credit Agreement, as amended hereby, are true and correct in all material respects and no Default or Event of Default shall have occurred and be continuing.

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  10.            Security Interest Confirmation.  The Credit Parties each hereby represent, warrant and covenant that (i) the Lender’s security interests in all of the “Collateral” (as such term is defined in each Security Agreement executed by each of the Credit Parties in connection with the Credit Agreement) are and remain valid, perfected, security interests in such Collateral, (ii) the additional principal amount advanced by the Lender in connection with this Amendment and the Amended Promissory Note and any and all additional obligations incurred by the Credit Parties in connection therewith constitute Obligations (as defined in the Credit Agreement) and such additional principal amount and additional obligations are each secured by Lender’s security interests in all of the Collateral, and (iii) the Credit Parties have not granted any other encumbrances or security interests of any nature or kind in favor of any other Person affecting any of such Collateral, other than Permitted Liens.

 

 11.            No Defaults. Each Credit Party hereby represents and warrants that as of the Effective Date there exists no Event of Default or any condition which, with the giving of notice or passage of time, or both, would constitute an Event of Default.

 

  12.            Covenants. Each Credit Party hereby reaffirms that each has duly performed and observed the covenants and undertakings set forth in the Credit Agreement and each Loan Document, and each covenants and undertakes to continue to duly perform and observe such covenants and undertakings, as amended hereby, so long as the Credit Agreement, as amended hereby, shall remain in effect.

 

  13.            No Other Amendment. All other terms and conditions of the Credit Agreement shall remain in full force and effect and the Credit Agreement shall be read and construed as if the terms of this Amendment were included therein by way of addition or substitution, as the case may be.

 

  14.            Ratification. The Credit Parties hereby acknowledge, represent, warrant and confirm to the Lender that: (i) the Credit Agreement, as amended hereby, and each of the Loan Documents executed by the Credit Parties are valid and binding obligations of the Credit Parties, enforceable against the Credit Parties in accordance with their respective terms; (ii) all obligations of the Credit Parties under the Credit Agreement, as amended hereby, and each of the Loan Documents are, shall be and continue to be secured by and under the respective Security Agreements entered into by the Credit Parties in connection with the Credit Agreement and all other Loan Documents; (iii) there are no defenses, setoffs, counterclaims, cross-actions or equities in favor of the Credit Parties to or against the enforcement of the Credit Agreement, as amended hereby, or any of the Loan Documents, and to the extent the Credit Parties have any defenses, setoffs, counterclaims, cross-actions or equities against the Lender and/or against the enforceability of the Credit Agreement, as amended hereby, or any of the Loan Documents, the Credit Parties acknowledge and agree that same are hereby fully and unconditionally waived; and (iv) no oral representations, statements, or inducements have been made by the Lender or any agents or representatives of the Lender with respect to the Credit Agreement, as amended hereby, or any of the Loan Documents.

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  15.            Fees and Expenses. The Borrower agrees to pay to the Lender, upon the execution hereof, (i) a commitment fee equal to Twelve Thousand United States Dollars (US$12,000), (ii) a legal fee equal to Twelve Thousand Five Hundred United States Dollars (US$12,500), (iii) an asset monitoring fee equal to Two Thousand United States Dollars ($2,000), and (iv) all costs and expenses of the Lender and Lender's counsel in connection with the preparation and execution of this Amendment, including, but not limited to, documentary stamp tax fees, UCC-1 Financing Statement search fees, and Certificate of Good Standing fees. The Lender and the Borrower agree that all fees payable by the Borrower to the Lender upon the execution hereof shall be listed on the closing statement executed in connection herewith.

 

  16.          Share Issuance. The Borrower shall pay to Lender a fee for investment banking and advisory services provided by the Lender to the Borrower on or prior to the date of the Second Tranche Advance by issuing to Lender in an unregistered offering that number of shares of the Borrower’s Common Stock equal to a dollar amount of Two Hundred Eighty Thousand United States Dollars (US$280,000.00) (the “Share Value”). The parties agree that the number of shares initially issuable to Lender on or prior to the date of the Second Tranche Advance (such date, the “Valuation Date”) shall be Four Million (4,000,000) shares of Common Stock (the “Shares”). The Borrower shall instruct its transfer agent to issue certificates representing the Shares on the Valuation Date and shall cause its transfer agent (the “Transfer  Agent”) to deliver such certificates to Lender within five (5) Business Days from the Valuation Date. In the event such certificates representing the Shares issuable hereunder shall not be delivered to the Lender within five (5) Business Days of the Valuation Date, same shall be an immediate default under this Amendment, the Credit Agreement, as amended hereby, and the other Loan Documents. The Shares, when issued, shall be deemed to be validly issued, fully paid, and non-assessable. The Shares shall be deemed fully earned as of the date of the Second Tranche Advance, in consideration therefore, regardless of the amount or number of Revolving Loans made hereafter.

 

(a)          Adjustment to Shares. In the event that a mandatory redemption has not occurred pursuant to the immediately subsequent Section, it is the intention of the Borrower and Lender that by a date that is twelve (12) months after the Valuation Date (the “Twelve Month Valuation Date”) the Lender shall have generated net proceeds from the sale of the Shares equal to the Share Value. Subject to the restrictions contained herein, the Lender shall have the right to sell the Shares in the Principal Trading Market or otherwise, at any time in accordance with applicable securities laws. At any time the Lender may elect after the Twelve Month Valuation Date (or prior to such Twelve Month Valuation Date, if Lender has sold all the Shares prior to such Twelve Month Valuation Date) but before that date which is thirty-six (36) months following the Valuation Date (the “Expiration Date”), the Lender may deliver to the Borrower a reconciliation statement showing the net proceeds actually received by the Lender from the sale of the Shares, which net proceeds for purposes of this Agreement shall equal the total purchase price of those shares in the open market, less any broker’s fees paid to execute the orders for such sales (the “Sale Reconciliation”). If, as of the date of the delivery by Lender of the Sale Reconciliation (“Sale Reconciliation Date”), the Lender has not realized net proceeds from the sale of such Shares equal to at least the Share Value after the sale of all Shares in its possession, as shown on the Sale Reconciliation, then the Borrower shall immediately take all required action necessary or required in order to cause the issuance of additional shares of Common Stock to the Lender, at the Lender’s sole discretion, in an amount sufficient such that, when sold and the net proceeds thereof are added to the net proceeds from the sale of any of the previously issued and sold Shares, the Lender shall have received total net funds equal to the Share Value. If additional shares of Common Stock are issued pursuant to the immediately preceding sentence, and after the sale of such additional issued shares, the Lender still has not received net proceeds equal to at least the Share Value, then the Borrower shall again be required to immediately take all action necessary or advisable in order to cause the issuance of additional shares of Common Stock to the Lender as contemplated above, and such additional issuances shall continue from time to time until the earlier of the Expiration Date or until the Lender has received net proceeds from the sale of such Common Stock equal to the Share Value. In the event the Lender receives net proceeds from the sale of Shares equal to the Share Value, and the Lender still holds any Shares, the Lender shall return all such remaining Shares to the Borrower. In the event additional Common Stock is required to be issued as outlined above, the Borrower shall instruct its Transfer Agent to issue certificates representing such additional shares to the Lender immediately subsequent to the Lender’s notification to the Borrower that additional shares are issuable hereunder, and the Borrower shall in any event cause its Transfer Agent to deliver such certificates to Lender within five (5) Business Days following the date Lender notifies the Borrower that additional shares are to be issued hereunder. In the event such certificates representing such additional shares issuable hereunder shall not be delivered to the Lender within said five (5) Business Day period, same shall be an immediate default under this Amendment, the Credit Agreement, as amended hereby, and the Loan Documents.

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(b)               Mandatory Redemption. On each of the following dates (the “Redemption Dates”), the Borrower shall redeem one-quarter (1/4) of the Shares then in Lender’s possession for Seventy Thousand United States Dollars (US$70,000) per quarter: (i) eighteen (18) months following the Valuation Date; (ii) twenty four (24) months following the Valuation Date; (iii) thirty (30) months following the Valuation Date; and (iv) thirty-six (36) months following the Valuation Date (such final date, the “Final Redemption Date”). In the event that the Lender has sold any Shares prior to the Final Redemption Date, any cash proceeds received by the Lender from any sales of such Shares shall be deducted from the amount to be paid by the Borrower on the Final Redemption Date and, if such amount is greater than the amount to be paid by the Borrower on the Final Redemption Date, any excess cash proceeds received by the Lender from any sales of Shares shall be deducted from the amount to be paid by the Borrower on the immediately prior Redemption Date and such application of proceeds shall continue in reverse chronological order.

 

(c)               Optional Redemption. At any time the Shares shall become unrestricted or saleable under Rule 144 (assuming the holders thereof are not affiliates of Borrower) and remain unsold, the Borrower may redeem any unsold Shares, or any portion thereof, for a price equal to the Share Value or, if applicable, that fractional portion of the Share Value equal to the fraction of the Shares which have not be resold as of the date of such request for redemption. Upon Lender’s receipt of such cash payment in accordance with the immediately preceding sentence, the Lender shall return any then remaining Shares in its possession back to the Borrower and otherwise undertake any required actions reasonably requested by Borrower to have such then remaining redeemed Shares returned to Borrower. Any cash proceeds received by the Lender from any optional redemption of Shares shall be deducted from the amount to be paid by the Borrower on the Final Redemption Date and, if such amount is greater than the amount to be paid by the Borrower on the Final Redemption Date, any excess cash proceeds received by the Lender from any optional redemption of Shares shall be deducted from the amount to be paid by the Borrower on the immediately prior Redemption Date and such application of proceeds shall continue in reverse chronological order.

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(d)               Observer Rights. Until an amount equal to the Share Value has been received by the Lender Pursuant to this Section 16, one representative of Lender (“Observer”) shall have the right to attend, at Lender’s sole expense, all regular and special meetings of the board of directors of Borrower (“Board”), in a nonvoting observer capacity and, in this respect, the Company shall provide such representative copies of all notices, minutes, consents and all other materials provided to the Board members, at the time such materials are provided to the Board members; provided that Observer shall enter into a confidentiality agreement with the Company in a form reasonably satisfactory to the Company.

Notwithstanding anything to the contrary herein, the Company reserves the right to withhold any information from any Observer if (A) access to such information or attendance at such meeting could adversely affect the attorney-client privilege between the Company and its counsel, (B) access to such information or attendance at such meeting could cause the Company to violate the Company’s obligations with respect to confidential or proprietary information of third parties, (C) if the information or meetings are relating to Borrower’s obligations under the Credit Agreement, or (D) such Observer is affiliated with a competitor of the Company.

 

  17.            Conditions Precedent. The effectiveness of this Amendment shall be expressly subject to the following conditions precedent:

 

(a)               Amendment. Each Credit Party shall have executed and delivered to the Lender this Amendment;

 

(b)               Amended Promissory Note. Each Credit Party shall have executed and delivered to the Lender the Amended Promissory Note;

 

(c)               Acknowledgement and Consent to Subordination Agreement. The Lender shall have received such acknowledgements and consents to this Amendment from any parties to the Subordination Agreement as the Lender shall require.

 

(d)               Closing Statement. The Borrower shall have executed and delivered to the Lender a closing statement in form and substance satisfactory to the Lender;

 

(e)               Opinion of Counsel. The Lender shall have received a customary opinion of the Credit Parties’ counsel, in form and substance satisfactory to the Lender in its sole discretion;

 

(f)                Corporate Documents. The Lender shall have received such evidence as it may require as to the authority of the officers or attorneys-in-fact executing this Amendment and such other corporate documents it may request, including, but not limited to, approval of the board of directors or managers of each of the Credit Parties, resolutions of the shareholders of the Subsidiaries of the Borrower, and an officer’s certificate of each Credit Party, each in form and substance satisfactory to the Lender in its sole discretion;

 

(g)               Search Results. The Lender shall have received copies of UCC search reports dated such a date as is reasonably acceptable to Lender, listing all effective financing statements which name the Credit Parties and/or their subsidiaries, under their present name and any previous names, as debtors, together with copies of such financing statements;

 

(h)               Certificate of Good Standing. The Lender shall have received a Certificate of Good Standing from the Secretary of State of the state of organization of each Credit Party, and each subsidiary thereof, evidencing the good standing thereof;

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(i)                  Fees Paid. The Lender or its counsel shall have received payment in full of all fees and expenses due under this Amendment; and

 

(j)                Eligible Accounts. The Borrower shall have delivered such evidence to the Lender as the Lender shall request evidencing the amount of Eligible Accounts and the Lender shall be satisfied, in its sole discretion, with such amount and that such amount permits an additional principal advance hereunder;

 

(k)               No Event of Default; Representations and Warranties. The Lender shall be satisfied, and shall have received a certificate signed by a duly authorized officer of each Credit Party, dated such a date as is reasonably acceptable to Lender, that (i) no Event of Default or event which, with the passage of time, giving of notice or both would become an Event of Default have occurred and be continuing; and (ii) the representations and warranties of the Borrower contained in the Credit Agreement, as amended and supplemented hereby, shall be true on and as of the Effective Date (except to the extent such representation or warranty expressly relates to an earlier date).

 

18.            Advisory Agreement. Within ten (10) Business Days of the Effective Date, the Borrower and the Lender, or an affiliate or representative thereof, shall execute and deliver to the Lender an advisory agreement, in form and substance acceptable to the Lender in its sole discretion.

 

19.            Execution in Counterparts. This Amendment may be executed in one or more counterparts, all of which taken together shall be deemed and considered one and the same Amendment, and same shall become effective when counterparts have been signed by each party and each party has delivered its signed counterpart to the other party. In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format file or other similar format file, such signature shall be deemed an original for all purposes and shall create a valid and binding obligation of the party executing same with the same force and effect as if such facsimile or “.pdf”signature page was an original thereof.

 

20.            Authority and Approval of Agreement; Binding Effect. The execution and delivery by the Credit Parties of this Amendment, and the documents executed and delivered in connection herewith, and the performance by Credit Parties of all of its obligations hereunder and thereunder, have been duly and validly authorized and approved by the Credit Parties and its boards of directors pursuant to all applicable laws, and other than the corporate action or resolutions delivered by the Credit Parties in connection with this Amendment, no other corporate action or consent on the part of the Credit Parties, its board of directors, stockholders or any other Person is necessary or required by the Credit Parties to execute this Amendment, and the documents executed and delivered in connection herewith and therewith, to consummate the transactions contemplated herein and therein, or perform all of the Credit Parties’ obligations hereunder and thereunder. This Amendment, and each of the documents executed and delivered in connection herewith and therewith, have been duly and validly executed by the Credit Parties (and the officer executing this Amendment and all such other documents is duly authorized to act and execute same on behalf of the Credit Parties) and constitute the valid and legally binding agreements of the Credit Parties, enforceable against the Credit Parties in accordance with their respective terms.

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21.              GOVERNING LAW. EXCEPT IN THE CASE OF THE MANDATORY FORUM SELECTION CLAUSE SET FORTH HEREIN, THIS AMENDMENT, THE CREDIT AGREEMENT, AS AMENDED HEREBY, THE LOAN DOCUMENTS AND THE AMENDED PROMISSORY NOTE SHALL BE SHALL BE CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEVADA WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS.

 

22.               MANDATORY FORUM SELECTION. ANY DISPUTE ARISING UNDER, RELATING TO, OR IN CONNECTION WITH THE AMENDMENT OR RELATED TO ANY MATTER WHICH IS THE SUBJECT OF OR INCIDENTAL TO THE AMENDMENT (WHETHER OR NOT SUCH CLAIM IS BASED UPON BREACH OF CONTRACT OR TORT) SHALL BE SUBJECT TO THE EXCLUSIVE JURISDICTION AND VENUE OF THE STATE AND/OR FEDERAL COURTS LOCATED IN BROWARD COUNTY, FLORIDA. THIS PROVISION IS INTENDED TO BE A “MANDATORY” FORUM SELECTION CLAUSE AND GOVERNED BY AND INTERPRETED CONSISTENT WITH FLORIDA LAW..

 

23.               Amendment Effective Date. All references in any Loan Document to the Credit Agreement on and after the date hereof shall be deemed to refer to the Credit Agreement as amended hereby, and the parties hereto agree that on and after the Effective Date, the Credit Agreement, as amended hereby, is in full force and effect.

 

[signature pages follow]

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed and delivered by their duly authorized officers as of the Effective Date.

 

	
BORROWER:

	 
	
RICEBRAN TECHNOLOGIES

	 
	
By: /s/ J. Dale Belt

	 
	
Name: J. Dale Belt

	
Title: Chief Financial Officer

 

	
LENDER:

	
	 	
	
TCA GLOBAL CREDIT MASTER FUND, LP

	
 

	 		
	
By: 

	
TCA Global Credit Fund GP, Ltd.

	
 

	
Its:

	
General Partner

	
 

	 		
	
By:

	
 

	
 

	
Name:     

	
Robert Press

	
 

	
Title:       

	
Director

	
 

 

[ signature page 1 of 3 ]

CONSENT AND AGREEMENT

 

The undersigned, referred to in the foregoing amendment no. 1 to the senior secured revolving credit facility agreement (the “Amendment”) as a guarantor, hereby consents and agrees to said Amendment and to the payment of the amounts contemplated therein, documents contemplated thereby and to the provisions contained therein relating to conditions to be fulfilled and obligations to be performed by it pursuant to or in connection with said Amendment.

 

	
GUARANTORS:

	
 

	 	
	
NUTRACEA, LLC

	
	
 

	
 

	
 

	
By:

	
/s/ J. Dale Belt

	
 

	
Name:

	
J. Dale Belt

	
	
Title:

	
SRB-IP. LLC

	

 

	
SRB-IP. LLC

	
 

	
 

	
 

	
 

	
By:

	
/s/ J. Dale Belt

	
 

	
Name:

	
J. Dale Belt

	
 

	
Title:

	
Secretary

	
 

 

	
SRB-MERM, LLC

	
 

	
 

	
 

	
 

	
By:

	
/s/J. Dale Belt

	
 

	
Name:

	
/s/ J. Dale Belt

	
 

	
Title:

	
Secretary

 

	
SRB-LC, LLC

	
 

	
 

	
 

	
 

	
By:

	
/s/J. Dale Belt

	
 

	
Name:

	
/s/ J. Dale Belt

	
 

	
Title:

	
Secretary

 

	
SRB-MT, LLC

	
 

	
 

	
 

	
 

	
By:

	
/s/J. Dale Belt

	
 

	
Name:

	
/s/ J. Dale Belt

	
 

	
Title:

	
Secretary

 

 [ signature page 2 of 3 ]

	 	
SRB-WS, LLC

	 		
	 	
By:

	
/s/J. Dale Belt

	 	
Name:

	
/s/ J. Dale Belt

	 	
Its:

	
Secretary

	 		
	 	
RICEX COMPANY

	 		
	 	
By:

	
/s/J. Dale Belt

	 	
Name:

	
/s/ J. Dale Belt

	 	
Its:

	
Secretary

	 		
	 	
RICE SCIENCE LLC

	 		
	 	
By:

	
/s/J. Dale Belt

	 	
Name:

	
/s/ J. Dale Belt

	 	
Its:

	
Secretary

	 		
	 	
RICE RX, LLC

	 	
	 	
By:

	
/s/J. Dale Belt

	 	
Name:

	
/s/ J. Dale Belt

	 	
Its:

	
Secretary

 

[ signature page 3 of 3 ]

EXHIBIT A

 

AMENDED PROMISSORY NOTEExhibit 10.12

 

NEITHER THIS NOTE NOR THE SECURITIES THAT ARE ISSUABLE TO THE HOLDER UPON CONVERSION HEREOF (COLLECTIVELY, THE "SECURITIES") HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THE SECURITIES NOR ANY INTEREST OR PARTICIPATION THEREIN MAY BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED: (I) IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE 1933 ACT OR APPLICABLE STATE SECURITIES LAWS; OR (II) IN THE ABSENCE OF AN OPINION OF COUNSEL, IN A FORM REASONABLY ACCEPTABLE TO THE ISSUER, THAT REGISTRATION IS NOT REQUIRED UNDER THE 1933 ACT OR; (Ill) UNLESS SOLD, TRANSFERRED OR ASSIGNED PURSUANT TO RULE 144 UNDER THE 1933 ACT.

 

BY ACCEPTING THIS OBLIGATION, THE HOLDER REPRESENTS AND WARRANTS THAT IT IS NOT A UNITED STATES PERSON (OTHER THAN AN EXEMPT RECIPIENT DESCRIBED IN SEC 6049(B)(4) OF THE INTERNAL REVENUE CODE AND REGULATIONS THEREUNDER) AND THAT IT IS NOT ACTING FOR OR ON BEHALF OF A UNITES STATES PERSON (OTHER THAN AN EXEMPT RECIPIENT DESCRIBED IN SEC. 6049(B)(4) OF THE INTERNAL REVENUE CODE AND THE REGULATIONS THEREUNDER).

 

REVOLVING CONVERTIBLE PROMISSORY NOTE

 

	
Issuance Date: July 18, 2013

	
US$2,400,000 

	
 

	
 

	
Effective Date: July 18, 2013

	
 

 

FOR VALUE RECEIVED, RICEBRAN TECHNOLOGIES, a corporation incorporated under the laws of the State of California, whose address is 6720 North Scottsdale Road, Suite 390, Scottsdale, AZ 85253 (the “Borrower”), promises to pay to the order of TCA GLOBAL CREDIT MASTER FUND, LP (hereinafter, together with any holder hereof, “Lender”), whose address is 1404 Rodman Street, Hollywood, Florida 33020, on or before the six (6) month anniversary of the Effective Date or such later date as agreed upon after the date hereof in a signed writing by the Lender (the “Revolving Loan Maturity Date”), the lesser of: (i) Two Million Four Hundred Thousand and No/100 United States Dollars (US$2,400,000); or (ii) the aggregate principal amount outstanding under and pursuant to that certain senior secured revolving credit facility agreement, dated as of April 30, 2013, as amended by amended no 1. thereto dated as of the Effective Date (“Amendment No. 1”), executed by and among the Borrower, as borrower, certain subsidiaries of the Borrower, as joint and several guarantors, and the Lender, as lender (as amended, restated, supplemented or modified from time to time, the “Credit Agreement”), together with interest (computed on the actual number of days elapsed on the basis of a 360 day year) on the aggregate principal amount of all Revolving Loans outstanding from time to time, as provided in the Credit Agreement. Capitalized words and phrases not otherwise defined herein shall have the meanings assigned thereto in the Credit Agreement.

This revolving convertible promissory note (the “Note”) amends, restates, replaces and supercedes, in its entirely, that certain revolving convertible promissory note, issued as of April 30, 2013 and effective as of May 24, 2013 (the “Original Note”), issued by the Borrower in favor of the Lender, in the principal amount of One Million Four Hundred Thousand and No/100 United States Dollars (US$1,400,000). The obligations contained in the Original Note shall be referred to herein as the “Original Obligations”. It is the intention of the Borrower and Lender that while this Note amends, restates, replaces and supersedes the Original Note, in its entirety, it is not in payment or satisfaction of the Original Obligations, but rather is the substitute of one evidence of debt for another without any intent to extinguish the old. Should there be any conflict between any of the terms of the Original Note, and the terms of this Note, the terms of this Note shall control. This Note is not a novation.

This Note evidences a portion of the aggregate Revolving Loans incurred by Borrower under and pursuant to the Credit Agreement, to which reference is hereby made for a statement of the terms and conditions under which the Revolving Loan Maturity Date or any payment hereon may be accelerated.

As of the Effective Date, Two Million and No/100 United States Dollars (US$2,000,000) has been advanced by the Lender to the Borrower, consisting of One Million Four Hundred Thousand and No/100 United States Dollars (US$1,400,000) advanced on May 24, 2013 and Six Hundred Thousand and No/100 United States Dollars (US$600,000) advanced on the Effective Date. An additional Four Hundred Thousand an No/100 United States Dollars may be hereafter advanced by the Lender to the Borrower, subject to the satisfaction of the conditions precedent and other terms and conditions contained in Amendment No. 1, to the satisfaction of the Lender in its sole discretion.

The holder of this Note is entitled to all of the benefits and security provided for in the Loan Documents, of even date herewith. All Revolving Loans shall be repaid by Borrower, or any person liable for the payment of this Note, on the Revolving Loan Maturity Date, unless payable sooner pursuant to the provisions of the Credit Agreement.

Principal and interest shall be paid to Lender as set forth in the Credit Agreement, or at such other place as the holder of this Note shall designate in writing to Borrower. Each Revolving Loan evidenced hereby and made by Lender, and all payments on account of the principal and interest hereunder shall be recorded on the books and records of Lender and the principal balance as shown on such books and records, or any copy thereof certified by an officer of Lender, shall be rebuttable presumptive evidence of the principal amount owing hereunder.

This Note is being issued in connection with Amendment No. 1 and is also secured by the Security Agreements and all other Loan Documents. All of the agreements, conditions, covenants, provisions, representations, warranties and stipulations contained in any of the Loan Documents which are to be kept and performed by the Borrower or any other Credit Party are hereby made a part of this Note to the same extent and with the same force and effect as if they were fully set forth herein, and the Borrower and each Credit Party covenants and agrees to keep and perform them, or cause them to be kept or performed, strictly in accordance with their terms.

Except for such notices as may be required under the terms of the Credit Agreement, the Borrower, or any person liable for the payment of this Note, waives presentment, demand, notice, protest, and all other demands, or notices, in connection with the delivery, acceptance, performance, default, or enforcement of this Note, and assents to any extension or postponement of the required time of payment or any other indulgence.

 

Borrower shall be solely responsible for the payment of any and all documentary stamps and other taxes applicable to the full face amount of this Note, but specifically excluding any income or capital gains taxes.

 

The Revolving Loan evidenced hereby has been made and/or issued and this Note has been delivered at Lender's main office set forth above. This Note shall be governed and construed in accordance with the laws of the State of Nevada, in which state it shall be performed, and shall be binding upon Borrower, or any person liable for the payment of this Note, and its legal representatives, successors, and assigns. Wherever possible, each provision of the Credit Agreement and this Note shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of the Credit Agreement or this Note shall be prohibited by or be invalid under such law, such provision shall be severable, and be ineffective to the extent of such prohibition or invalidity, without invalidating the remaining provisions of the Credit Agreement or this Note.

 

Nothing herein contained, nor in any instrument or transaction relating hereto, shall be construed or so operate as to require the Borrower, or any person liable for the payment of this Note, to pay interest in an amount or at a rate greater than the highest rate permissible under applicable law. By acceptance hereof, Lender hereby warrants and represents to Borrower that Lender has no intention of charging a usurious rate of interest. Should any interest or other charges paid by Borrower, or any parties liable for the payments made pursuant to this Note result in the computation or earning of interest in excess of the highest rate permissible under applicable law, any and all such excess shall be and the same is hereby waived by the holder hereof. Lender shall make adjustments in the Note or Credit Agreement, as applicable, as necessary to ensure that Borrower will not be required to pay further interest in excess of the amount permitted by applicable law. All such excess shall be automatically credited against and in reduction of the outstanding principal balance. Any portion of such excess which exceeds the outstanding principal balance shall be paid by the holder hereof to the Lender and any parties liable for the payment of this Note, it being the intent of the parties hereto that under no circumstances shall Borrower, or any party liable for the payments hereunder, be required to pay interest in excess of the highest rate permissible under applicable law.

 

THE HOLDER IS A NON-U.S. PERSON AS THAT TERM IS DEFINED IN THE UNITED STATES INTERNAL REVENUE CODE. IT IS HEREBY AGREED AND UNDERSTOOD THAT THE OBLIGATIONS HEREUNDER MAY BE SOLD OR RESOLD ONLY TO NON-U.S. PERSONS. THE INTEREST PAYABLE HEREUNDER IS PAYABLE ONLY OUTSIDE THE UNITED STATES. ANY U.S. PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAW.

Notwithstanding any provision in this Note or the other Loan Documents, the total liability for payments of interest and payments in the nature of interest, including, without limitation, all charges, fees, exactions, or other sums which may at any time be deemed to be interest, shall not exceed the limit imposed by the usury laws of the jurisdiction governing this Note or any other applicable law. In the event the total liability of payments of interest and payments in the nature of interest, including, without limitation, all charges, fees, exactions or other sums which may at any time be deemed to be interest, shall, for any reason whatsoever, result in an effective rate of interest, which for any month or other interest payment period exceeds the limit imposed by the usury laws of the jurisdiction governing this Note, all sums in excess of those lawfully collectible as interest for the period in question shall, without further agreement or notice by, between, or to any party hereto, be applied to the reduction of the outstanding principal balance of this Note immediately upon receipt of such sums by the Lender, with the same force and effect as though the Borrower had specifically designated such excess sums to be so applied to the reduction of such outstanding principal balance and the Lender had agreed to accept such sums as a penalty-free payment of principal; provided, however, that the Lender may, at any time and from time to time, elect, by notice in writing to the Borrower, to waive, reduce, or limit the collection of any sums in excess of those lawfully collectible as interest rather than accept such sums as a prepayment of the outstanding principal balance. It is the intention of the parties that the Borrower do not intend or expect to pay nor does the Lender intend or expect to charge or collect any interest under this Note greater than the highest non-usurious rate of interest which may be charged under applicable law.

 

At any time and from time to time while this Note is outstanding, this Note may be, at the sole option of the Lender, convertible into shares of the common stock, no par value per share (the “Common Stock”) of Borrower, in accordance with the terms and conditions set forth below.

 

(a) Voluntary Conversion. At any time while this Note is outstanding, the Lender may, upon the occurrence of an Event of Default or if mutually agreed upon by the parties, convert all or any portion of the outstanding principal, accrued and unpaid interest, and any other sums due and payable hereunder or under the Credit Agreement (such total amount, the “Conversion Amount”) into shares of Common Stock of the Borrower (the “Conversion Shares”) at a price equal to: (i) the Conversion Amount (the numerator); divided by (ii) eighty-five percent (85%) of the lowest daily volume weighted average price of the Borrower's Common Stock during the five (5) Business Days immediately prior to the Conversion Date, which price shall be indicated in the conversion notice (in the form attached hereto as Exhibit A, the “Conversion Notice”) (the denominator) (the “Conversion Price”). The Lender shall submit a Conversion Notice indicating the Conversion Amount, the number of Conversion Shares issuable upon such conversion, and where the Conversion Shares should be delivered.

(b) The Lender's Conversion Limitations. The Borrower shall not affect any conversion of this Note, and the Lender shall not have the right to convert any portion of this Note, to the extent that after giving effect to the conversion set forth on the Conversion Notice submitted by the Lender, the Lender (together with the Lender's Affiliates and any Persons acting as a group together with the Lender or any of the Lender's Affiliates) would beneficially own shares of Common Stock in excess of the Beneficial Ownership Limitation (as defined herein). To ensure compliance with this restriction, prior to delivery of any Conversion Notice, the Lender shall have the right to request that the Borrower provide to the Lender a written statement of the number of outstanding shares of the Borrower's Common Stock as of a requested date . The Borrower shall, within three (3) Business Days of such request, provide Lender with such requested information in a written statement, and the Lender shall be entitled to rely on such written statement from the Borrower in issuing its Conversion Notice and ensuring that its ownership of the Borrower's Common Stock is not in excess of the Beneficial Ownership Limitation. The restriction described in this Section may be waived by Lender, in whole or in part, upon notice from the Lender to the Borrower to increase such percentage.

For purposes of this Note, the “Beneficial Ownership Limitation” shall be 4.99% of the number of shares of Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon conversion of this Note. The limitations contained in this Section shall apply to a successor holder of this Note. For purposes of this Note, “Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization or a government or any department or agencythereof.

(c) Mechanics of Conversion. The conversion of this Note shall be conducted in the following manner, to the extent Lender has the right to convert this Note into shares of Common Stock:

(1) To convert this Note into shares of Common Stock on any date set forth in the Conversion Notice by the Lender (the “Conversion Date”), the Lender shall transmit by facsimile or electronic mail (or otherwise deliver) a copy of the fully executed Conversion Notice to the Borrower (or, under certain circumstances as set forth below, by delivery of the Conversion Notice to the Borrower's transfer agent).

(2) Upon receipt by the Borrower of a copy of a Conversion Notice, the Borrower shall as soon as practicable, but in no event later than two (2) Business Days after receipt of such Conversion Notice, send, via facsimile or electronic mail (or otherwise deliver) a confirmation of receipt of such Conversion Notice (the “Conversion Confirmation”) to the Lender indicating that the Borrower will process such Conversion Notice in accordance with the terms herein. In the event the Borrower fails to issue its Conversion Confirmation within said two (2) Business Day time period, the Lender shall have the absolute and irrevocable right and authority to deliver the fully executed Conversion Notice to the Borrower's transfer agent, and pursuant to the terms of the Credit Agreement, the Borrower's transfer agent shall issue the applicable Conversion Shares to Lender as hereby provided. Within five (5) Business Days after the date of the Conversion Confirmation (or the date of the Conversion Notice, if the Borrower fails to issue the Conversion Confirmation), provided that the Borrower's transfer agent is participating in the Depository Trust Company’s (“DTC”) Fast Automated Securities Transfer (“FAST”) program, and legends are not required under the terms of the Credit Agreement, the Borrower shall, subject to Lender timely providing all information required regarding Lender’s prime broker with DTC, cause the transfer agent to (or, if for any reason the Borrower fails to instruct or cause its transfer agent to so act, then pursuant to the Irrevocable Transfer Agent Instructions, the Lender may request the Borrower's transfer agent to) electronically transmit the applicable Conversion Shares to which the Lender shall be entitled by crediting the account of the Lender's prime broker with DTC through its Deposit Withdrawal Agent Commission (“DWAC”) system, and provide proof satisfactory to the Lender of such delivery. In the event that the Borrower's transfer agent is not participating in the DTC FAST program and is not otherwise DWAC eligible, within five (5) Business Days after the date of the Conversion Confirmation (or the date of the Conversion Notice, if the Borrower fails to issue the Conversion Confirmation), the Borrower shall instruct and cause its transfer agent to (or, if for any reason the Borrower fails to instruct or cause its transfer agent to so act, then pursuant to the Irrevocable Transfer Agent Instructions, the Lender may request the Borrower's transfer agent to) issue and surrender to a nationally recognized overnight courier for delivery to the address specified in the Conversion Notice, a certificate, registered in the name of the Lender, or its designees, for the number of Conversion Shares to which the Lender shall be entitled. To effect conversions hereunder, the Lender shall not be required to physically surrender this Note to the Borrower unless the entire principal amount of this Note, plus all accrued and unpaid interest thereon, has been so converted. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Note in an amount equal to the applicable conversion. The Lender and the Borrower shall maintain records showing the principal amount(s) converted and the date of such conversion(s). The Lender, and any assignee by acceptance of this Note, acknowledge and agree that, by reason of the provisions of this paragraph, following conversion of a portion of this Note, the unpaid and unconverted principal amount of this Note may be less than the amount stated on the face hereof.

(3) The Person(s) entitled to receive the shares of Common Stock issuable upon a conversion of this Note shall be treated for all purposes as the record holder(s) of such shares of Common Stock as of the Conversion Date.

(4) If in the case of any Conversion Notice, the certificate or certificates required hereunder to be delivered are not delivered to or as directed by the Lender by the date required hereby, the Lender shall be entitled to elect by written notice to the Borrower at any time on or before its receipt of such certificate or certificates, to rescind such Conversion Notice, in which event the Borrower shall promptly return to the Lender any original Note delivered to the Borrower and the Lender shall promptly return to the Borrower the Common Stock certificates representing the principal amount of this Note unsuccessfully tendered for conversion to the Borrower.

(5) The Borrower's obligations to issue and deliver the Conversion Shares upon conversion of this Note in accordance with the terms hereof are absolute and, unless specified otherwise herein, unconditional, irrespective of any action or inaction by the Lender to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against any person or entity or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Lender or any other person or entity of any obligation to the Borrower or any violation or alleged violation of law by the Lender or any other person or entity, and irrespective of any other circumstance which might otherwise limit such obligation of the Borrower to the Lender in connection with the issuance of such Conversion Shares; provided, however, that such delivery shall not operate as a waiver by the Borrower of any such action the Borrower may have against the Lender. In the event the Lender of this Note shall elect to convert any or all of the outstanding principal amount hereof and accrued but unpaid interest thereon in accordance with the terms of this Note, the Borrower may not refuse conversion based on any claim that the Lender or anyone associated or affiliated with the Lender has been engaged in any violation of law, agreement or for any other reason, unless an injunction from a court, on notice to Lender, restraining and or enjoining conversion of all or part of this Note shall have been sought and obtained, and the Borrower posts a surety bond for the benefit of the Lender in the amount of 150% of the outstanding principal amount of this Note, which is subject to the injunction, which bond shall remain in effect until the completion of arbitration/litigation of the underlying dispute and the proceeds of which shall be payable to such Lender to the extent it obtains judgment. In the absence of such injunction, the Borrower shall issue Conversion Shares upon a properly noticed conversion. If the Borrower fails for any reason to deliver to the Lender such certificate or certificates representing Conversion Shares pursuant to timing and delivery requirements of this Note, the Borrower shall pay to such Lender, in cash, as liquidated damages and not as a penalty, for each $1,000 of principal amount being converted, $1.00 per Business Day for each Business Day after the date by which such certificates should have been delivered until such certificates are delivered. Nothing herein shall limit a Lender's right to pursue actual damages or declare an Event of Default pursuant to the Credit Agreement, this Note or any agreement securing the indebtedness under this Note for the Borrower's failure to deliver Conversion Shares within the period specified herein and such Lender shall have the right to pursue all remedies available to it hereunder, at law or in equity, including, without limitation, a decree of specific performance and/or injunctive relief. The exercise of any such rights shall not prohibit the Lender from seeking to enforce damages pursuant to any other Section hereof or under applicable law. Nothing herein shall prevent the Lender from having the Conversion Shares issued directly by the Borrower's transfer agent in accordance with the Irrevocable Transfer Agent Instructions, in the event for any reason the Borrower fails to issue or deliver, or cause its transfer agent to issue and deliver, the Conversion Shares to the Lender upon exercise of Lender's conversion rights hereunder.

(6)            The issuance of certificates for shares of the Common Stock on conversion of this Note shall be made without charge to the Lender hereof for any documentary stamp or similar taxes, or any other issuance or transfer fees of any nature or kind that may be payable in respect of the issue or delivery of such certificates, any such taxes or fees, if payable, to be paid by the Borrower, provided that Borrower shall not be responsible for any income, capital gains or similar tax imposed on Lender.

(7)            Borrower shall take all action reasonably necessary to at all times have authorized, and reserved for the purpose of issuance, such number of shares of Common Stock as shall be necessary to effect the full conversion of the Note in accordance with its terms (the “Share Reserve”). If at any time the Share Reserve is insufficient to effect the full conversion of the Note then outstanding, Borrower shall increase the Share Reserve accordingly. If Borrower does not have sufficient authorized and unissued shares of Common Stock available to increase the Share Reserve, Borrower shall call and hold a special meeting of the shareholders within forty-five (45) days of such occurrence, or take action by the written consent of the holders of a majority of the outstanding shares of Common Stock, if possible, for the sole purpose of increasing the number of shares authorized to an amount of shares equal to three (3) times the Conversion Shares. Borrower’s management shall recommend to the shareholders to vote in favor of increasing the number of shares of Common Stock authorized.

(d)           Adjustments to Conversion Price.

(1)            If the Borrower, at any time while this Note is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions payable in shares of Common Stock on outstanding shares of Common Stock, (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of a reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issues, in the event of a reclassification of shares of Common Stock, any shares of capital stock of the Borrower, then the Conversion Price shall be multiplied by a fraction, the numerator of which shall be the number of shares of Common Stock (excluding any treasury shares of the Borrower) outstanding immediately before such event, and the denominator of which shall be the number of shares of Common Stock outstanding immediately after such event. Any adjustment made pursuant to this Section shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination, or re-classification.

(2)            If, at any time while this Note is outstanding: (i) the Borrower effects any merger or consolidation of the Borrower with or into another Person, (ii) the Borrower effects any sale of all or substantially all of its assets in one transaction or a series of related transactions, (iii) any tender offer or exchange offer (whether by the Borrower or another Person) is completed pursuant to which holders of Common Stock are permitted to tender or exchange their shares for other securities, cash or property, or (iv) the Borrower effects any reclassification of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property (in any such case, a “Fundamental Transaction”), then upon any subsequent conversion of this Note, the Lender shall have the right to receive, for each Conversion Share that would have been issuable upon such conversion immediately prior to the occurrence of such Fundamental Transaction, the same kind and amount of securities, cash or property as it would have been entitled to receive upon the occurrence of such Fundamental Transaction if it had been, immediately prior to such Fundamental Transaction, the holder of one (1) share of Common Stock (the “Alternate  Consideration”). For purposes of any such conversion, the determination of the Conversion Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one (1) share of Common Stock in such Fundamental Transaction, and the Borrower shall apportion the Conversion Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Lender shall be given the same choice as to the Alternate Consideration it receives upon any conversion of this Note following such Fundamental Transaction. To the extent necessary to effectuate the foregoing provisions, any successor to the Borrower or surviving entity in such Fundamental Transaction shall issue to the Lender a new note consistent with the foregoing provisions and evidencing the Lender's right to convert such note into Alternate Consideration. The terms of any agreement pursuant to which a Fundamental Transaction is effected shall include terms requiring (i) any such successor or surviving entity to comply with the provisions of this Section and insuring that this Note (or any such replacement security) will be similarly adjusted upon any subsequent transaction analogous to a Fundamental Transaction or (ii) the satisfaction of all outstanding principal and interest hereunder.

(3)            Whenever the Conversion Price is adjusted pursuant to any provision of this Note, the Borrower shall promptly deliver to Lender a notice setting forth the Conversion Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment.

 

(4)            If: (A) the Borrower shall declare a dividend (or any other distribution in whatever form) on the Common Stock, (B) the Borrower shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the Borrower shall authorize the granting to all holders of the Common Stock of rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights, (D) the approval of any stockholders of the Borrower shall be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Borrower is a party, any sale or transfer of all or substantially all of the assets of the Borrower, of any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property, or (E) the Borrower shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Borrower, then, in each case, the Borrower shall cause to be filed at each office or agency maintained for the purpose of conversion of this Note, and shall cause to be delivered to the Lender at its last address as it shall appear upon the Borrower's records, at least ten (10) calendar days prior to the applicable record or effective date hereinafter specified, a notice stating: (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined, or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange, provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified in such notice.

(e) Make-Whole Rights. Upon liquidation by the Lender of Conversion Shares issued pursuant to a Conversion Notice, provided that the Lender realizes a net amount from such liquidation equal to less than the Conversion Amount specified in the relevant Conversion Notice (such net realized amount, the “Realized Amount”), the Borrower shall issue to the Lender additional shares of the Borrower’s Common Stock equal to: (i) the Conversion Amount specified in the relevant Conversion Notice; minus (ii) the Realized Amount, as evidenced by a reconciliation statement from the Lender (a “Sale Reconciliation”) showing the Realized Amount from the sale of the Conversion Shares; divided by (iii) the average volume weighted average price of the Borrower’s Common Stock during the five (5) Business Days immediately prior to the date upon which the Lender delivers notice (the “Make-Whole Notice”) to the Borrower that such additional shares are requested by the Lender (the “Make-Whole Stock Price”) (such number of additional shares to be issued, the “Make-Whole Shares”). Upon receiving the Make-Whole Notice and Sale Reconciliation evidencing the number of Make-Whole Shares requested, the Borrower shall instruct its transfer agent to issue certificates representing the Make-Whole Shares, which Make Whole Shares shall be issued and delivered in the same manner and within the same time frames as set forth herein. The Make-Whole Shares, when issued, shall be deemed to be validly issued, fully paid, and non-assessable shares of the Borrower’s Common Stock. Following the sale of the Make-Whole Shares by the Lender: (i) in the event that the Lender receives net proceeds from such sale which, when added to the Realized Amount from the prior relevant Conversion Notice, is less than the Conversion Amount specified in the relevant Conversion Notice, the Lender shall deliver an additional Make-Whole Notice to the Borrower following the procedures provided previously in this paragraph, and such procedures and the delivery of Make-Whole Notices shall continue until the Conversion Amount has been fully satisfied; (ii) in the event that the Lender received net proceeds from the sale of Make-Whole Shares in excess of the Conversion Amount specified in the relevant Conversion Notice, such excess amount shall be applied to satisfy any and all amounts owed hereunder in excess of the Conversion Amount specified in the relevant Conversion Notice.

 

[-signature page follows-]

IN WITNESS WHEREOF, the Borrower has executed this Note as of the date set forth above.

 

	
 

	
RICEBRAN TECHNOLOGIES

	
 

	
 

	
 

	
By:/s/ J. Dale Belt

	 	
	
 

	
Name: J. Dale Belt

	
 

	
Title: Chief Financial Officer

 

[Signature Page 1 of Revolving Convertible Promissory Note]

CONSENT AND AGREEMENT

 

The undersigned, referred to in the foregoing revolving convertible promissory note as a guarantor, hereby consents and agrees to said revolving convertible promissory note and to the payment of the amounts contemplated therein, documents contemplated thereby and to the provisions contained therein relating to conditions to be fulfilled and obligations to be performed by it pursuant to or in connection with said revolving convertible promissory note to the same extent as if the undersigned were a party to said revolving convertible promissory note.

 

	
NUTRACEA, LLC

	
	
 

	
 

	
 

	
By:

	
/s/ J. Dale Belt

	
 

	
Name:

	
J. Dale Belt

	
	
Title:

	
SRB-IP. LLC

	

 

	
SRB-IP. LLC

	
 

	
 

	
 

	
 

	
By:

	
/s/ J. Dale Belt

	
 

	
Name:

	
J. Dale Belt

	
 

	
Title:

	
Secretary

	
 

 

	
SRB-MERM, LLC

	
 

	
 

	
 

	
 

	
By:

	
/s/J. Dale Belt

	
 

	
Name:

	
/s/ J. Dale Belt

	
 

	
Title:

	
Secretary

 

	
SRB-LC, LLC

	
 

	
 

	
 

	
 

	
By:

	
/s/J. Dale Belt

	
 

	
Name:

	
/s/ J. Dale Belt

	
 

	
Title:

	
Secretary

 

	
SRB-MT, LLC

	
 

	
 

	
 

	
 

	
By:

	
/s/J. Dale Belt

	
 

	
Name:

	
/s/ J. Dale Belt

	
 

	
Title:

	
Secretary

 

[Signature Page 2 of Revolving Convertible Promissory Note]

	
SRB-WS, LLC

	
	 		
	
By:

	
/s/J. Dale Belt

	
	
Name:

	
/s/ J. Dale Belt

	
	
Its:

	
Secretary

	
	 		
	
RICEX COMPANY

	
	 		
	
By:

	
/s/J. Dale Belt

	
	
Name:

	
/s/ J. Dale Belt

	
	
Its:

	
Secretary

	
	 		
	
RICEX NUTRIENTS, INC.

	
	 		
	
By:

	
/s/J. Dale Belt

	
	
Name:

	
/s/ J. Dale Belt

	
	
Its:

	
Secretary

	
	 		
	
RICE SCIENCE, LLC

	
	 	
	
By:

	
/s/J. Dale Belt

	
	
Name:

	
/s/ J. Dale Belt

	
	
Its:

	
Secretary

	
	  		
	
RICE RX, LLC

	
	  		
	
By:

	
/s/J. Dale Belt

	
	
Name:

	
/s/ J. Dale Belt

	
	
Its:

	
Secretary

	

 

[Signature Page 3 of Revolving Convertible Promissory Note]

EXHIBIT A

 

NOTICE OF CONVERSION

 

The undersigned hereby elects to convert principal and/or interest under the Revolving Convertible Promissory Note (the “Note”) of RiceBran Technologies, a corporation incorporated under the laws of the State of California (the “Company”), into shares of common stock, no par value per share (the “Common Shares”), of the Company in accordance with the conditions of the Note, as of the date written below.

 

In reliance on the number of outstanding shares reported by the Company to Holder, the undersigned represents and warrants to the Company that its beneficial ownership of shares of the Company’s Common Stock, including the Common Shares does not exceed the Beneficial Ownership Limitation as specified under the Note.

 

	
Conversion Calculations Date

	
 

	
 

	
of Conversion:

	
 

	
 

	
Conversion Price

	
 

	
 

	
Principal Amount and/or Interest to be Converted:

	
 

	
 

	
Number of Common Shares to be Issued:

	
 

	
 

 

		
[HOLDER]

	
 

	
 

	 	 		
		
By:

	
 

	
 

		
Name:

	
 

	
 

		
Title:

	
 

	
 

		
Address:

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