Document:

EXHIBIT
10.11

 

FIRST AMENDMENT TO
CREDIT AGREEMENT

 

THIS AMENDMENT TO CREDIT
AGREEMENT (this “Amendment”) is entered into as of February 26, 2010, by
and between S&W SEED COMPANY, a California general partnership (“Borrower”),
and WELLS FARGO BANK, NATIONAL ASSOCIATION (“Bank”).

 

RECITALS

 

WHEREAS, Borrower is
currently indebted to Bank pursuant to the terms and conditions of that certain
Credit Agreement between Borrower and Bank dated as of December 26, 2008,
as amended from time to time (“Credit Agreement”).

 

WHEREAS, Bank and
Borrower have agreed to certain changes in the terms and conditions set forth
in the Credit Agreement and have agreed to amend the Credit Agreement to
reflect said changes.

 

NOW, THEREFORE, for
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree that the Credit Agreement shall be
amended as follows:

 

1.             Section 1.1.(a) is hereby
amended by deleting “March 1, 2010” as the last day on which Bank will
make advances under the Line of Credit, and by substituting for said date “April 1,
2011,” with such change to be effective upon the execution and delivery to Bank
of a promissory note dated as of February 26, 2010 (which promissory note
shall replace and be deemed the Line of Credit Note defined in and made
pursuant to the Credit Agreement) and all other contracts, instruments and
documents required by Bank to evidence such change.

 

2.             Section 4.3.(c) is hereby
deleted in its entirety, and the following substituted therefor:

 

“(c)             not later than 90 days after and as
of the end of each fiscal year, a compiled financial statement of Seed Holding,
Ltd. and Yellowjacket, LP, prepared by a certified public accountant acceptable
to Bank, to include balance sheet, income statement, and statement of cash
flow, and within 30 days after filing, but in no event later than each November 15,
copies of Seed Holding, Ltd. and Yellowjacket, LP’s filed federal income tax
returns for such year;

 

(d)             not
later than 90 days after and as of the end of each calendar year, a financial
statement of Grover T. Wickersham and Paul F. Shoen, Trustee of The Paul F.
Shoen Revocable Trust, prepared by Grove T. Wickersham and Paul F. Shoen,
Trustee of The Paul F. Shoen Revocable Trust, to include all assets and liabilities,
and within 30 days after filing, but in no event later than each November 15,
copies of Grover T. Wickersharm and Paul F. Shoen, Trustee of The Paul F. Shoen
Revocable Trust’s filed federal income tax returns for such year;

 

(e)             from
time to time such other information as Bank may reasonably request.”

 

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3.             Section 6.1. is hereby deleted
in its entirety, and the following substituted therefor:

 

“SECTION 6.1.       The
occurrence of any of the following shall constitute an “Event of
Default” under this Agreement:

 

(a)             Borrower
shall fail to pay when due any principal, interest, fees or other amounts
payable under any of the Loan Documents.

 

(b)             Any
financial statement or certificate furnished to Bank in connection with, or any
representation or warranty made by Borrower or any other party under this
Agreement or any other Loan Document shall prove to be incorrect, false or
misleading in any material respect when furnished or made.

 

(c)             Any
default in the performance of or compliance with any obligation, agreement or
other provision contained herein or in any other Loan Document (other than
those specifically described as an “Event of Default” in this section 6.1), and
with respect to any such default that by its nature can be cured, such default
shall continue for a period of twenty (20) days from its occurrence.

 

(d)             Any
default in the payment or performance of any obligation, or any defined event
of default, under the terms of any contract, instrument or document (other than
any of the Loan Documents) pursuant to which Borrower, any guarantor hereunder
or any general partner or joint venturer in Borrower if a partnership or joint
venture (with each such guarantor; general partner and/or joint venturer
referred to herein as a “Third Party Obligor”) has incurred any debt or other
liability to any person or entity, including Bank.

 

(e)             Borrower
or any Third Party Obligor shall become insolvent, or, shall suffer or consent
to or apply for the appointment of a receiver, trustee, custodian or liquidator
of itself or any of its property, or shall generally fail to pay its debts as
they become due, or shall make a general assignment for the benefit of
creditors; Borrower or any Third Party Obligor shall file a voluntary petition
in bankruptcy, or seeking reorganization, in order to effect a plan or other
arrangement with creditors or any other relief under the Bankruptcy Reform Act,
Title 11 of the United States Code, as amended or recodified from time to time
(“Bankruptcy Code”), or under any state or federal law granting relief to
debtors, whether now or hereafter in effect; or Borrower or any Third Party
Obligor shall file an answer admitting the jurisdiction of the court and the
material allegations of any involuntary petition; or Borrower or any Third
Party Obligor shall be adjudicated a bankrupt, or an order for relief shall be
entered against Borrower or any Third Party Obligor by any court of competent
jurisdiction under the Bankruptcy Code or any other applicable state or federal
law relating to bankruptcy, reorganization or other relief for debtors.

 

(f)              The
filing of a notice of judgment lien against Borrower or any Third Party
Obligor; or the recording of any abstract of judgment

 

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against Borrower or any
Third Party Obligor in any county in which Borrower or such Third Party Obligor
has an interest in real property; or the service of a notice of levy and/or of
a writ of attachment or execution, or other like process, against the assets of
Borrower or any Third Party Obligor; or the entry of a judgment against
Borrower or any Third Party Obligor; or any involuntary petition or proceeding
pursuant to the Bankruptcy Code or any other applicable state or federal law relating
to bankruptcy, reorganization or other relief for debtors is filed or commenced
against Borrower or any Third Party Obligor.

 

(g)             There
shall exist or occur any event or condition that Bank in

 

good faith believes
impairs, or is substantially to impair, the prospect of payment or performance
by Borrower, any Third Party Obligor, or the general partner of either if such
entity is a partnership, of its obligations under any of the Loan Documents.

 

(h)             The
death or incapacity of Borrower or any Third Party Obligor if an individual.
The dissolution or liquidation of Borrower or any Third Party Obligor if a
corporation, partnership, joint venture or other type of entity; or Borrower or
any such Third Party Obligor, or any of its directors, stockholders or members,
shall take action seeking to effect the dissolution or. liquidation of Borrower
or such Third Party Obligor.

 

(i)              The
withdrawal, resignation or expulsion of any one or more of the general partners
in Borrower; or any change in control of Borrower or any entity or combination
of entities that directly or indirectly control Borrower, with “control”
defined as ownership of an aggregate of twenty-five percent (25%) or more of
the common stock, members’ equity or other ownership interest (other than a limited
partnership interest).”

 

4.             Except as specifically provided
herein, all terms and conditions of the Credit Agreement remain in full force
and effect, without waiver or modification. All terms defined in the Credit
Agreement shall have the same meaning when used in this Amendment. This
Amendment and the Credit Agreement shall be read together, as one document.

 

5.             Borrower hereby remakes all
representations and warranties contained in the Credit Agreement and reaffirms
all covenants set forth therein. Borrower further certifies that as of the date
of this Amendment there exists no Event of Default as defined in the Credit
Agreement, nor any condition, act or event which with the giving of notice or
the passage of time or both would constitute any such Event of Default.

 

IN WITNESS WHEREOF, the
parties hereto have caused this Amendment to be executed as of the day and year
first written above.

 

	
   

  	
   

  	
  WELLS FARGO BANK,

  
	
  S&W SEED COMPANY

  	
   

  	
  NATIONAL
  ASSOCIATION

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Harry B. Hansen

  	
   

  	
  By:

  	
  /s/
  Russell A. Ragsdale

  
	
   

  	
  Harry B. Hansen

  	
   

  	
   

  	
  Russell A. Ragsdale

  
	
   

  	
  Managing Partner

  	
   

  	
   

  	
  Vice President

  

 

3EXHIBIT 10.12

 

REVOLVING LINE OF CREDIT NOTE

 

	
  $2,500,000.00

  	
   

  	
  Fresno, California 

  
	
   

  	
   

  	
  February 26, 2010

  

 

FOR
VALUE RECEIVED, the undersigned S&W SEED COMPANY (“Borrower”) promises to
pay to the order of WELLS FARGO BANK, NATIONAL ASSOCIATION (“Bank”) at its
office at Fresno Regional Commercial Banking Office, 8405 N. Fresno Street, Suite #200,
Fresno, California 93720, or at such other place as the holder hereof may
designate, in lawful money of the United States of America and in immediately
available funds, the principal sum of Two Million Five Hundred Thousand Dollars
($2,500,000.00), or so much thereof as may be advanced and be outstanding, with
interest thereon, to be computed on each advance from the date of its
disbursement as set forth herein.

 

DEFINITIONS:

 

As used herein, the
following terms shall have the meanings set forth after each, and any other
term defined in this Note shall have the meaning set forth at the place
defined:

 

(a)           “Business Day” means any day except a
Saturday, Sunday or any other day on which commercial banks in California are
authorized or required by law to close.

 

(b)           “Daily One Month LIBOR” means, for
any day, the rate of interest equal to LIBOR then in effect for delivery for a
one (1) month period.

 

(c)           “LIBOR” means the rate per annum
determined pursuant to the following formula:

 

	
  LIBOR =

  	
  Base LIBOR

  	
   

  
	
   

  	
  100% - LIBOR
  Reserve Percentage

  	
   

  

 

(i)            “Base LIBOR” means the rate per
annum for United States dollar deposits quoted by Bank as the Inter-Bank Market
Offered Rate, with the understanding that such rate is quoted by Bank for the
purpose of calculating effective rates of interest for loans making reference
thereto, for delivery of funds for one (1) month in an amount equal to the
outstanding principal balance of this Note. Borrower understands and agrees
that Bank may base its quotation of the Inter-Bank Market Offered Rate upon
such offers or other market indicators of the Inter-Bank Market as Bank in its
discretion deems appropriate including, but not limited to, the rate offered
for U.S. dollar deposits on the London Inter-Bank Market.

 

(ii)           “LIBOR Reserve Percentage” means the
reserve percentage prescribed by the Board of Governors of the Federal Reserve
System (or any successor) for “Eurocurrency Liabilities” (as defined in Regulation
D of the Federal Reserve Board, as amended), adjusted by Bank for expected
changes in such reserve percentage during the term of this Note.

 

INTEREST:

 

(a)               Interest. The outstanding
principal balance of this Note shall bear interest (computed on the basis of a
360-day year, actual days elapsed) at a fluctuating rate per annum determined
by Bank to be three percent (3.00%) above Daily One Month LIBOR in effect from

 

1

 

time to time. Each change
in the rate of interest hereunder shall become effective on each Business Day a
change in Daily One Month LIBOR is announced within Bank. Bank is hereby
authorized to note the date and interest rate applicable to this Note and any
payments made thereon on Bank’s books and records (either manually or by
electronic entry) and/or on any schedule attached to this Note, which notations
shall be prima facie evidence of the accuracy of the information noted.

 

(b)           Taxes and Regulatory Costs.
Borrower shall pay to Bank immediately upon demand, in addition to any other
amounts due or to become due hereunder, any and all (i) withholdings,
interest equalization taxes, stamp taxes or other taxes (except income and
franchise taxes) imposed by any domestic or foreign governmental authority and
related in any manner to LIBOR, and (ii) future, supplemental, emergency
or other changes in the LIBOR Reserve Percentage, assessment rates imposed by
the Federal Deposit Insurance Corporation, or similar requirements or costs
imposed by any domestic or foreign governmental authority or resulting from
compliance by Bank with any request or directive (whether or not having the
force of law) from any central bank or other governmental authority and related
in any manner to LIBOR to the extent they are not included in the calculation
of LIBOR. In determining which of the foregoing are attributable to any LIBOR
option available to Borrower hereunder, any reasonable allocation made by Bank
among its operations shall be conclusive and binding upon Borrower.

 

(c)           Payment of Interest. Interest
accrued on this Note shall be payable on the 1st day of each month, commencing March 1,
2010.

 

(d)           Default Interest. From and
after the maturity date of this Note, or such earlier date as all principal
owing hereunder becomes due and payable by acceleration or otherwise, or at
Bank’s option upon the occurrence, and during the continuance of an Event of
Default, the outstanding principal balance of this Note shall bear interest at
an increased rate per annum (computed on the basis of a 360-day year, actual
days elapsed) equal to four percent (4%) above the rate of interest from time
to time applicable to this Note.

 

BORROWING AND REPAYMENT:

 

(a)           Borrowing and Repayment.
Borrower may from time to time during the term of this Note borrow, partially
or wholly repay its outstanding borrowings, and reborrow, subject to all of the
limitations, terms and conditions of this Note and of any document executed in
connection with or governing this Note; provided however, that the total
outstanding borrowings under this Note shall not at any time exceed the
principal amount stated above. The unpaid principal balance of this obligation
at any time shall be the total amounts advanced hereunder by the holder hereof
less the amount of principal payments made hereon by or for Borrower, which
balance may be endorsed hereon from time to time by the holder. The outstanding
principal balance of this Note shall be due and payable in full on April 1,
2011.

 

(b)           Advances. Advances hereunder,
to the total amount of the principal sum stated above, may be made by the
holder at the oral or written request of (i) Mark Grewal, Matt Szot,
Grover Wickersham or Harry Hansen, any one acting alone, who are authorized to
request advances and direct the disposition of any advances until written
notice of the revocation of such authority is received by the holder at the
office designated above, or (ii) any person, with respect to advances
deposited to the credit of any deposit account of Borrower, which advances,
when so deposited, shall be conclusively presumed to have been made to or for
the benefit of Borrower regardless of the fact that persons other than those
authorized to request advances may have

 

2

 

authority to draw against
such account. The holder shall have no obligation to determine whether any
person requesting an advance is or has been authorized by Borrower.

 

(c)             Application of Payments.
Each payment made on this Note shall be credited first, to any interest then
due and second, to the outstanding principal balance hereof.

 

EVENTS OF DEFAULT:

 

This Note is made
pursuant to and is subject to the terms and conditions of that certain Credit
Agreement between Borrower and Bank dated as of December 26, 2008, as
amended from time to time (the “Credit Agreement”). Any default in the payment
or performance of any obligation under this Note, or any defined event of
default under the Credit Agreement, shall constitute an “Event of Default”
under this Note.

 

MISCELLANEOUS:

 

(a)           Remedies. Upon the occurrence
of any Event of Default, the holder of this Note, at the holder’s option, may
declare all sums of principal and interest outstanding hereunder to be
immediately due and payable without presentment, demand, notice of
nonperformance, notice of protest, protest or notice of dishonor, all of which
are expressly waived by Borrower, and the obligation, if any, of the holder to
extend any further credit hereunder shall immediately cease and terminate.
Borrower shall pay to the holder immediately upon demand the full amount of all
payments, advances, charges, costs and expenses, including reasonable attorneys’
fees (to include outside counsel fees and all allocated costs of the holder’s
in-house counsel), expended or incurred by the holder in connection with the
enforcement of the holder’s rights and/or the collection of any amounts which
become due to the holder under this Note, and the prosecution or defense of any
action in any way related to this Note, including without limitation, any
action for declaratory relief, whether incurred at the trial or appellate
level, in an arbitration proceeding or otherwise, and including any of the
foregoing incurred in connection with any bankruptcy proceeding (including
without limitation, any adversary proceeding, contested matter or motion
brought by Bank or any other person) relating to Borrower or any other person
or entity.

 

(b)           Obligations Joint and Several.
Should more than one person or entity sign this Note as a Borrower, the
obligations of each such Borrower shall be joint and several.

 

(c)           Governing Law. This Note shall
be governed by and construed in accordance with the laws of the State of
California.

 

IN WITNESS WHEREOF, the
undersigned has executed this Note as of the date first written above.

 

S&W SEED COMPANY

 

 

	
  By:

  	
  /s/ Harry B. Hansen

  	
   

  
	
   

  	
  Harry B. Hansen

  	
   

  
	
   

  	
  Managing Partner

  	
   

  

 

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