Document:

Exhibit 10.10

 

RESTATED SUBORDINATION AGREEMENT

THIS RESTATED SUBORDINATION AGREEMENT (“Agreement”), dated as of May 24, 2013 is made by and among Gregory J. Vislocky, Brian Rick Delamarter, Harold Guy Delamarter, Baruch Halpern and Shoshana Halpern as trustees for The Shoshana Shapiro Halpern Revocable Trust UA June 13, 2006, Weintraub Partners, a California general partnership, W. John Short and Karen A. Wilson, Edward McMillan as trustee for the The Revocable Trust of Edward L. McMillan Revocable Trust U/D/T dated February 17, 1999, Zanesville Partners Fund, LLC, a limited liability company, Alon Gibli, Michael Geliebter, and Pensco Trust Co., FBO Baruch Halpern IRA (collectively the “Subordinated Creditors”), TCA Global Credit Master Fund, LP, a limited partnership organized and existing under the laws of the Cayman Islands (“TCA”) and Hillair Capital Investments, L.P., a a limited partnership organized and existing under the laws of the Cayman Islands (“Hillair”) (with its participants, successors and assigns, TCA and Hillair are sometimes referred to herein as the “Preferred Lenders”, and together with the Subordinated Creditors, the “Parties”). For all purposes herein, the “Borrower” means RiceBran Technologies, a California corporation.

BACKGROUND

 

A.                Pursuant to that certain Securities Exchange Agreement, dated as of July 31, 2012, between the Borrower and Hillair (“Exchange Agreement”), the Borrower issued to Hillair an aggregate of $1,299,200 in principal amount of Original Issue Discount Senior Secured Convertible Debentures Due January 1, 2014 (the “Exchange Debentures”) in exchange for $870,000 in principal amount of the  Original Issue Discount Senior Secured Convertible Debentures Due July 1, 2013 held by Hillair (the “Prior Debentures”).

 

B.                 Pursuant to that certain Securities Purchase Agreement, dated as July 31, 2012, between the Borrower and Hillair, the Borrower issued to Hillair an aggregate of $290,000 in principal amount of the Original Issue Discount Senior Secured Convertible Debentures Due January 1, 2014 (the “New Debentures” and, collectively with the Exchange Debentures, the “Debentures”);

     

C.                 Borrower previously entered into that certain Note and Warrant Purchase Agreement dated January 17, 2012, and as amended on July 31, 2012 (the “Purchase Agreement”) with each of the Subordinated Creditors. In connection with the transactions contemplated by the Purchase Agreement, the Borrower issued to the Subordinated Creditors an aggregate of $6,187,602.94 in principal amount of Subordinated Notes (as defined below);

 

D.                 As a condition under the Purchase Agreement, the Subordinated Creditors, Borrower and Hillair entered into Subordination Agreements (collectively “Prior Subordination Agreements”) to subordinate the Subordinated Creditors’ respective security interests granted under the Security Agreements entered into by the Subordinated Creditors and the Borrower, dated of even date with the Purchase Agreements, (the “Security Agreements”) to the Preferred Lenders Debt (as defined herein); and

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E.                 TCA, Borrower, 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, SRB-MERM, 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 have entered into a Senior Secured Revolving Credit Facility Agreement dated as of this same date (“TCA Credit Agreement”). In connection therewith, Borrower has executed and delivered to TCA a Revolving Convertible Promissory Note dated this same date (“TCA Note”).

 

G.                 In connection with the foregoing, TCA and Hillair wish to set forth, and coordinate, their rights pursuant to this Agreement.

 

F.                 In consideration of the capital provided or to be provided by TCA pursuant to the TCA Credit Agreement and the TCA Note, the agreement of Hillair hereunder and other financial accommodations that have been made and may hereafter be made by the Preferred Lenders for the benefit of the Borrower, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Subordinated Creditors hereby agree to the terms hereof.

 

AGREEMENT

 

1.                  Definitions.  As used herein, the following terms have the meanings set forth below:

 

“Borrower Default” means any Event of Default as defined in the TCA Credit Agreement and the Debentures.

 

“Lien” means any security interest, mortgage, deed of trust, pledge, lien, charge, encumbrance, title retention agreement or analogous instrument or device, including the interest of each lessor under any capitalized lease and the interest of any bondsman under any payment or performance bond, in, of or on any assets or properties of a person, whether now owned or hereafter acquired and whether arising by agreement or operation of law.

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“Preferred Lenders Debt”, used herein in its most comprehensive sense, means the TCA Credit Agreement, the TCA Notes, the Debentures and any and all advances, debts, obligations and liabilities of the Borrower to either or both of the Preferred Lenders, heretofore, now or hereafter made, incurred or created, whether voluntary or involuntary and however arising, whether due or not due, absolute or contingent, liquidated or unliquidated, determined or undetermined, including under any swap, derivative, foreign exchange, hedge, deposit, treasury management or other similar transaction or arrangement at any time entered into by the Borrower with either or both of the Preferred Lenders, and whether the Borrower may be liable individually or jointly with others, or whether recovery upon such amounts may be or hereafter become unenforceable.

 

“Subordinated Indebtedness” means all obligations arising under the Subordinated Notes and each and every other debt, liability and obligation of every type and description which the Borrower or any of its subsidiaries may now or at any time hereafter owe to one or more of the Subordinated Creditors, whether such debt, liability or obligation now exists or is hereafter created or incurred, and whether it is or may be direct or indirect, due or to become due, absolute or contingent, primary or secondary, liquidated or unliquidated, or joint, several or joint and several.

 

“Subordinated Notes” means Borrower’s Secured Convertible Promissory Notes, dated July 31, 2012, payable to the order of the Subordinated Creditors in the original aggregate principal amount of Six Million One Hundred Eighty Seven Thousand Six Hundred Two Dollars and Ninety Four Cents ($6,187,602.94), together with all renewals, extensions and modifications thereof and any note or notes issued in substitution therefor.

 

2.                  Intercreditor Terms.

 

2.1.              Equal Priority.  The Preferred Lenders agree that the security interests granted by Borrower and its subsidiaries to each Preferred Lender shall be of equal priority, as between TCA and Hillair.  TCA and Hillair further acknowledge that, because of the nature of the filing of the applicable Mortgages, Deeds of Trust, UCC-1 Financing Statements, and other instruments filed to perfect the Preferred Lenders Debt, the security interests of TCA and Hillair necessarily will be perfected at different times.  Each of the Preferred Lenders agrees that, regardless of the time of perfection of each of their security interests, the Preferred Lenders shall have equal priority as if such security interests were perfected simultaneously.

 

2.2.              Coordinated Efforts.

 

(a)                          The Preferred Lenders each agree to use commercially reasonable efforts to coordinate efforts, cooperate and act in a manner likely to obtain maximum liquidation value and return to each of the Preferred Lenders in the event of any Borrower Default, including in the exercise of any foreclosure, liquidation, enforcement or other rights and remedies as a Preferred Lender (whether in an action initiated by any Preferred Lender after any Preferred Lender Standstill Period or otherwise), and in and the exercise and enforcement of the Preferred Lenders rights under this Agreement.

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(b)                          In the event of a Borrower Default or a breach by any Subordinated Creditor of its obligations hereunder, the Preferred Lenders each agree not to commence any action or proceeding against the Borrower to recover all or any part of the Preferred Lender Debt, or join with any creditor (unless the Preferred Lenders shall both so join) in bringing any proceeding against the Borrower under any bankruptcy, reorganization, readjustment of debt, arrangement of debt receivership, liquidation or insolvency law or statute of the federal or any state government, or take possession of, sell, or dispose of any item that comprises “Collateral” pursuant to the terms of any of the Security Agreements entered into with respect to the Preferred Lender Debt (“Collateral”), or exercise or enforce any right or remedy available to a Preferred Lender with respect to any such Collateral.  Notwithstanding anything to the contrary set forth in this Section 2.2, upon five (5) business days’ prior written notice to the other Preferred Lender after expiration of the Preferred Lender Standstill Period (as defined below), either Preferred Lender may exercise any rights or remedies they may have against Borrower whether by judicial or non-judicial foreclosure or otherwise; provided, that the non-initiating Preferred Lender shall have the right, but not the obligation, to join any such action as a co-plaintiff (or other co-moving party, however denominated), at its own expense. “Preferred Lender Standstill Period” means the period beginning on the occurrence of an event of default under any of the agreements between the Preferred Lenders and Borrower and ending on the date that is thirty (30) days following the date after either Preferred Lender shall have given notice to the other Preferred Lender and to Borrower that such event of default shall have occurred and be continuing and of the intent of any of said Preferred Lender to exercise its  rights and remedies.  In addition, it is expressly acknowledged and agreed by and amongst the parties hereto that an event of default under any one of the agreements between the Preferred Lenders and Borrower shall constitute and event of default under all agreements between the Preferred Lenders and the Borrower.

 

2.3.             Non-transfer.  Neither TCA nor Hillair will transfer, delegate, or assign its rights, duties or obligations hereunder to any person, other than a wholly owned subsidiary, without said transferee and/or assignee first agreeing to be bound by the terms and conditions herein contained and executing a counterpart hereto.

 

2.4.             Expenses.  The Preferred Lenders agree that should any action need to be taken with respect to the enforcement of any rights hereunder, including, but not limited to, declaring a default, instituting foreclosure procedures, and attorney’s fees associated therewith, the Preferred Lenders will each pay such fees and costs in proportion to their outstanding share of the Preferred Lender Debt and, unless otherwise agreed between the Preferred Lenders, any recovery shall be shares between the Preferred Lenders in proportion to the outstanding share of the Preferred Lender Debt.

 

3.                 Subordination.  The payment of all of the Subordinated Indebtedness is hereby expressly subordinated to the extent and in the manner hereinafter set forth to the payment in full of the Preferred Lenders Debt; and regardless of any priority otherwise available to the Subordinated Creditors by law or by agreement, and any Lien claimed therein by the Subordinated Creditors shall be and remain fully subordinate for all purposes to the rights of the Preferred Lenders for all purposes whatsoever. The Subordinated Indebtedness shall continue to be subordinated to the Preferred Lenders Debt even if the Preferred Lenders Debt or any portion thereof is deemed subordinated, avoided or disallowed under the United States Bankruptcy Code or other applicable law.

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4.                  Principal and Interest Payments.

 

4.1.              Principal Payments. Except as set forth in Section 6, until all of the Preferred Lenders Debt has been paid in full, no Subordinated Creditor shall, without the prior written consent of each of the Preferred Lenders, demand, receive or accept any principal payment from the Borrower in respect of the Subordinated Indebtedness, or exercise any right of or permit any setoff in respect of the Subordinated Indebtedness.

 

4.2.             Interest Payments.  A Subordinated Creditor may demand, receive and accept regularly scheduled payments of interest in respect of the Subordinated Indebtedness; provided, that without the prior written consent of each of the Preferred Lenders, the Subordinated Creditor shall not demand, receive or accept any interest payment from the Borrower in respect of the Subordinated Indebtedness so long as any Borrower Default exists or if a Borrower Default will occur as a result of or immediately following such interest payment.

 

5.                  Receipt of Prohibited Payments.  The Subordinated Creditors each agree that if the Subordinated Creditor receives any payment on the Subordinated Indebtedness that the Subordinated Creditor is not entitled to receive under the provisions of this Agreement, the Subordinated Creditor will hold the amount so received in trust for the Preferred Lenders and will forthwith turn over such payment to the Preferred Lenders in the form received (except for the endorsement of the Subordinated Creditor where necessary) for application to then-existing Preferred Lenders Debt (whether or not due), in such manner of application as the Preferred Lenders may deem appropriate.  Such funds or other property shall be deposited in an escrow account established by the Preferred Lenders, to be distributed in proportion to their outstanding share of the Preferred Lender Debt.  If a Subordinated Creditor exercises any right of setoff that the Subordinated Creditor is not permitted to exercise under the provisions of this Agreement, the Subordinated Creditor will promptly pay over to the Preferred Lenders, in immediately available funds, an amount equal to the amount of the claims or obligations offset.  If a Subordinated Creditor fails to make any endorsement required under this Agreement, the Preferred Lenders, or any officer or employee or agent on behalf of the Preferred Lenders, is hereby irrevocably appointed as the attorney-in-fact (which appointment is coupled with an interest) for such Subordinated Creditor to make such endorsement in the Subordinated Creditor’s name.

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6.                 Action on Subordinated Indebtedness.  The Subordinated Creditors each agree not to commence any action or proceeding against the Borrower to recover all or any part of the Subordinated Indebtedness, or join with any creditor (unless the Preferred Lenders shall both so join) in bringing any proceeding against the Borrower under any bankruptcy, reorganization, readjustment of debt, arrangement of debt receivership, liquidation or insolvency law or statute of the federal or any state government, or take possession of, sell, or dispose of any item that comprises “Collateral” pursuant to the terms of any of the Security Agreements entered pursuant to the TCA Credit Agreement or the Exchange Agreement (“Collateral”), or exercise or enforce any right or remedy available to a Subordinated Creditor with respect to any such Collateral, unless and until all Preferred Lenders Debt has been paid in full. Notwithstanding anything to the contrary set forth in this Section 6, if all of Borrower’s obligations to the Preferred Lenders are not fully paid and satisfied, and neither of the Preferred Lenders has initiated a foreclosure or other action against Borrower, upon five (5) business days’ prior written notice to each of the Preferred Lenders after expiration of the Subordinated Creditor Standstill Period (as defined below), the Subordinated Creditors may exercise any rights or remedies they may have against Borrower whether by judicial or non-judicial foreclosure or otherwise provided that the receipt of any payments by the Subordinated Creditors shall be paid over to the Preferred Lenders, in immediately available funds, until payment in full of the obligations to the Preferred Lenders. “Subordinated Creditor Standstill Period” means the period beginning on the occurrence of an event of default under any of the agreements between the Subordinated Creditors and Borrower and ending on the date that is six (6) months following the date after the Subordinated Creditors shall have given notice to each of the Preferred Lenders and to Borrower that such event of default shall have occurred and be continuing and of the intent of any of the Subordinated Creditors to exercise their rights and remedies.

 

7.                  Action Concerning Collateral.

 

7.1.             Remedies. Notwithstanding any Lien now held or hereafter acquired by the Subordinated Creditors, the Preferred Lenders may take possession of, sell, dispose of, and otherwise deal with all or any part of any collateral of the Subordinated Creditors, and may enforce any right or remedy available to it with respect to the Borrower or such collateral, all without notice to or consent of any of the Subordinated Creditors except as specifically required by applicable law.

 

7.2.             Deemed Consent and Release of Lien. In addition, and without limiting the generality of Section 7.1, if (i) a Borrower Default has occurred and is continuing, (ii) the Borrower or any of the Preferred Lenders intends to sell or otherwise dispose of any Collateral of the Preferred Lenders to an unrelated third party outside the ordinary course of business, (iii) Preferred Lenders have each given written notice thereof to the Subordinated Creditors, and (iv) the Subordinated Creditors have failed, within ten (10) days after receipt of such notice, to purchase for cash the Preferred Lenders Debt for the full amount thereof, the Subordinated Creditors shall be deemed to have consented to such sale or disposition, to have released any Lien they may have in such Collateral and to have authorized the Preferred Lenders or their agents to file partial releases (and any related financing statements such as “in lieu” financing statements under Part 7 of Article 9 of the Uniform Commercial Code) with respect to such Collateral.

 

7.3.             No Assumed Duty. The Preferred Lenders shall have no duty to preserve, protect, care for, insure, take possession of, collect, dispose of, or otherwise realize upon any of the assets of Borrower, whether or not they comprise Collateral for the Preferred Lenders, and in no event shall the Preferred Lenders be deemed a Subordinated Creditor’s agent with respect to any assets of Borrower.  All proceeds received by the Preferred Lenders with respect to any of Borrower’s assets may be applied, first, to pay or reimburse the Preferred Lenders for all costs and expenses (including reasonable attorneys’ fees) incurred by the Preferred Lenders (or either of them) in connection with the collection of such proceeds, and, second, to any Preferred Lenders Debt in any order that the Preferred Lenders may choose.

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8.                  Bankruptcy and Insolvency.  In the event of any receivership, insolvency, bankruptcy, assignment for the benefit of creditors, reorganization or arrangement with creditors, whether or not pursuant to bankruptcy law, the sale of all or substantially all of the assets of the Borrower, dissolution, liquidation or any other marshalling of the assets or liabilities of the Borrower, the Subordinated Creditors will file all claims, proofs of claim or other instruments of similar character necessary to enforce the obligations of the Borrower in respect of the Subordinated Indebtedness and will hold in trust for the Preferred Lenders and promptly pay over to the Preferred Lenders in the form received (except for the endorsement of the Subordinated Creditors where necessary) for application to the then-existing Preferred Lenders Debt, any and all moneys, dividends or other assets received in any such proceedings on account of the Subordinated Indebtedness, unless and until the Preferred Lenders Debt has been paid in full. If a Subordinated Creditor shall fail to take any such action, the Preferred Lenders, as attorney-in-fact for the Subordinated Creditor, may take such action on the Subordinated Creditor’s behalf.  The Subordinated Creditors each hereby irrevocably appoints the Preferred Lenders, or any officers or employees of a Preferred Lender designated by the Preferred Lenders, as the attorney-in-fact for the Subordinated Creditors (which appointment is coupled with an interest) with the power but not the duty to demand, sue for, collect and receive any and all such moneys, dividends or other assets and give acquittance therefor and to file any claim, proof of claim or other instrument of similar character, to vote claims comprising Subordinated Indebtedness to accept or reject any plan of partial or complete liquidation, reorganization, arrangement, composition or extension and to take such other action in the Preferred Lenders’ name or in the name of the Subordinated Creditors as the Preferred Lenders may deem necessary or advisable for the enforcement of the agreements contained herein; and the Subordinated Creditors will each execute and deliver to the Preferred Lenders such other and further powers-of-attorney or instruments as the Preferred Lenders may request in order to accomplish the foregoing. If the Preferred Lenders desire to permit the use of cash collateral or to provide post-petition financing to the Borrower, the Subordinated Creditors shall not object to the same or assert that its interests are not being adequately protected.

 

9.                  Restrictive Legend; Transfer of Subordinated Indebtedness.  The Subordinated Creditors will cause the Subordinated Notes and all other notes, bonds, debentures or other instruments evidencing the Subordinated Indebtedness or any part thereof to contain a specific statement (in the form attached hereto as Exhibit A) thereon to the effect that the indebtedness thereby evidenced is subject to the provisions of this Agreement, and the Subordinated Creditors will mark their books conspicuously to evidence the subordination effected hereby.  The Subordinated Creditors each represents and warrants to the Preferred Lenders that each such Subordinated Creditor is the lawful holder of the applicable Subordinated Note and has not transferred any interest therein to any other person or entity.  In the event of the transfer in any manner of the Subordinated Indebtedness by the Subordinated Creditors to any person who is not a party to this Agreement, the transferring party shall obtain, as a condition to and upon such transfer, the written consent of the transferee to become a party to and be bound by the terms of this Agreement and to the placing of the legend as required by this Section 9 upon the notes, bonds, debentures or other instruments evidencing the Subordinated Indebtedness.

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10.                Continuing Effect.  This Agreement shall constitute a continuing agreement of subordination, and the Preferred Lenders may, without notice to or consent by the Subordinated Creditors, and except as set forth in Section 2, modify any term of the Preferred Lenders Debt in reliance upon this Agreement.  Without limiting the generality of the foregoing, the Preferred Lenders may, at any time and from time to time, without the consent of or notice to the Subordinated Creditors and without incurring responsibility to the Subordinated Creditors or impairing or releasing any of the Preferred Lenders’ rights or the Subordinated Creditors’ obligations hereunder:

 

(a)            change the amount of payment or extend the time for payment or renew or otherwise alter the terms of any Preferred Lenders Debt or any instrument evidencing the same in any manner;

 

(b)            if applicable, sell, exchange, release or otherwise deal with any property at any time securing payment of all or any portion of the Preferred Lenders Debt or any part thereof;

 

(c)            release anyone liable in any manner for the payment or collection of the Preferred Lenders Debt or any part thereof;

 

(d)            exercise or refrain from exercising any right against the Borrower or any other person (including the Subordinated Creditors); and

 

(e)            apply any sums received by the Preferred Lenders, by whomsoever paid and however realized, to the Preferred Lenders Debt in such manner as the Preferred Lenders shall deem appropriate.

 

11.                No Commitment.  None of the provisions of this Agreement shall be deemed or construed to constitute or imply any commitment or obligation on the part of the Preferred Lenders to make any future loans or other extensions of credit or financial accommodations to the Borrower. Each of the Subordinated Creditors hereby waives any and all right to require the marshalling of assets in connection with the exercise of any of the Preferred Lenders’ remedies permitted by applicable law or agreement.

 

12.                Notices.  Any notice or other communication required or permitted to be given or made under this Agreement (i) shall be in writing, (ii) may be delivered by hand delivery, First Class U.S. Mail (regular, certified, registered or expedited delivery), FedEx, UPS Overnight, Airborne or other nationally recognized delivery service, fax, or electronic transmission, and (iii) shall be delivered or transmitted to the appropriate address as set forth herein. Each notice or other communication shall be delivered or addressed to a party at its address set forth below.  A party’s address for notice may be changed from time to time by notice given to the other party.

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If to the Subordinated Creditors:

	
 

	 	
		
Gregory J. Vislocky

	
 

	
7700 NE Parkway Drive, Suite 300

		
Vancouver, WA 98662

		
Fax:(360) 823-0126

	
 

	
 

	
 

	
Brian Rick Delamarter

	
 

	
3396 Stoneridge Lane

		
Los Angeles, CA 90077

	
 

	
 

		
Harold Guy Delamarter

		
7700 NE Parkway Drive, Suite 300

		
Vancouver, WA 98662

		
Fax:(360) 823-0126

	
 

	
 

		
The Shoshana Shapiro Halpern Revocable Trust UA June 13, 2006

		
20900 NE 30th Ave, Suite 200

		
Aventura, FL 33180

		
Attention:  Baruch Halpern

	
 

	
 

		
Weintraub Partners

		
400 Capitol Mall, 11th Floor

	
 

	
400 Capitol Mall, 11th Floor

		
Attention: Chris Chediak, Esq.

	
 

	
Attention: Chris Chediak, Esq.

	
 

	
 

		
W. John Short and Karen A Wilson

		
c/o RiceBran Technologies

		
6720 N. Scottsdale Road, Suite 390

		
Scottsdale, AZ 85253

	
 

	
 

		
The Revocable Trust of Edward L. McMillan 

	 	Revocable Trust U/D/T dated February 17, 1999
		
c/o RiceBran Technologies

		
6720 N. Scottsdale Road, Suite 390

		
Scottsdale, AZ 85253

	
 

	
 

		
Zanesville Partners Fund, LLC

		
c/o RiceBran Technologies

		
6720 N. Scottsdale Road, Suite 390

		
Scottsdale, AZ 85253

	
 

	
 

		
Alon Gibli

		
9 Great Jones Street #3

		
New York, NY 10012

	
 

	
 

		
Michael Geliebter

		
10553 Rocca Place

		
Los Angeles, CA

		
 

		
Pensco Trust Co., FBO Baruch Halpern IRA

		
20900 NE 30th Ave, Suite 200

		
Aventura, FL 33180

		
Attention:  Baruch Halpern

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If to the Preferred Lenders:

	
Hillair Capital Investments L.P.

		
c/o Hillair Capital Management LLC

		
330 Primrose Road, Suite 660

		
Burlingame, CA 94010

		
Attention:  Sean M. McAvoy

	 	
	
 

	
TCA Global Credit Master Fund, LP

		
1404 Rodman Street Hollywood, FL 33020 Attention: Robert Press

		
Facsimile: (786) 323-1651

	 	
	
With a copy to:

	
Lucosky Brookman LLP

	
(which shall not constitute notice)

	
101 Wood Avenue South, 5th Floor Woodbridge, NJ 08830

	 	
Attention: Seth A. Brookman, Esq.

	 	
Facsimile: (732) 395-4401

	 	
	
If to the Borrower:

	
6720 North Scottsdale Road, Suite 390

	 	
Scottsdale, AZ 85253

	 	
Attention: W. John Short

	 	
Facsimile: [•]

	 	
	
With a copy to:

	
Weintraub Tobin Chediak Coleman Grodin

	
(which shall not constitute notice)

	
400 Capitol Mall, 11th Floor

	 	
Sacramento, CA 95814

	 	
Attention: Chris Chediak, Esq.

	 	
Facsimile: (916) 446-1611

 

Absent fraud or manifest error, a receipt signed by the addressee or its authorized representative, a certified or registered mail receipt, a signed delivery service confirmation or a fax or e-mail confirmation of transmission shall constitute proof of delivery.  Any notice actually received by the addressee shall constitute delivery notwithstanding the failure to comply with any provisions of this subsection. A notice delivered by regular First Class U.S. Mail shall be deemed to have been delivered on the third (3rd) business day after its post-mark.  Any other notice shall be deemed to have been received on the date and time of the signed receipt or confirmation of delivery or transmission thereof, unless that receipt or confirmation date and time is not a business day or is after 5:00 p.m. local time on a business day, in which case such notice shall be deemed to have been received on the next succeeding business day.

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13.            Conflict in Agreements.  If the subordination provisions of any instrument evidencing Subordinated Indebtedness conflict with the terms of this Agreement, the terms of this Agreement shall govern the relationship between the Preferred Lenders and the Subordinated Creditors.

 

14.            No Waiver.  No waiver shall be deemed to be made by any Party of any of its rights hereunder unless the same shall be in writing signed on behalf of the Party, and each such waiver, if any, shall be a waiver only with respect to the specific matter or matters to which the waiver relates and shall in no way impair the rights of the Party or the obligations of the other Parties in any other respect at any time.

 

15.            Binding Effect; Acceptance.  This Agreement shall be binding upon the Parties and their respective heirs, legal representatives, successors and assigns and shall inure to the benefit of the Parties and their respective participants, successors and assigns irrespective of whether this or any similar agreement is executed by any other creditor of the Borrower.  Notice of acceptance of this Agreement or of reliance upon this Agreement is hereby waived by each of the Parties.

 

16.            Miscellaneous.  The Section and paragraph headings herein are included for convenience of reference only and shall not constitute a part of this Agreement for any other purpose.  This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which together shall constitute one instrument.

 

17.            Governing Law; Consent to Jurisdiction and Venue.  This Agreement shall be governed by and construed in accordance with the substantive laws (other than conflict laws) of the State of California.  Each party consents to the personal jurisdiction of the state and federal courts located in the State of California in connection with any controversy related to this Agreement, waives any argument that venue in any such forum is not convenient, and agrees that any litigation initiated by any of them in connection with this Agreement may be venued in either the state or federal courts located in Sacramento County, California.

 

18.            Waiver of Jury Trial.  To the extent permissible under law, the parties hereto, each after consulting or having had the opportunity to consult with legal counsel, knowingly, voluntarily and intentionally waive any right they may have to a trial by jury in any litigation.  No party shall seek to consolidate, by counterclaim or otherwise, any litigation in which a jury trial has been waived with any other litigation in which a jury trial cannot be or has not been waived.  This provision shall be deemed to be enforceable to the fullest extent of the law as it may exist at the time any litigation is commenced.

 

 [Remainder of Page Intentionally Left Blank; Signature Pages Follow]

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The Parties have executed this Restated Subordination Agreement as of the date and year first above-written.

 

	
HILLAIR CAPITAL INVESTMENTS, L.P.

	
 

	
 

	
 

	
 

	
By:

	
/s/ Scott D. Kaufman

	
 

	
Name:

	Scott D. Kaufman	
 

	
Title:

	
Managing Partner of Hillair Capital Management LLC as investment advisor to Hillair Capital Investments LP

	
 

 

	
TCA GLOBAL CREDIT MASTER FUND, LP

	
 

	 		
	
By: 

	
TCA Global Credit Fund GP, Ltd.

	
 

	
Its:

	
General Partner

	
 

	 		
	
By:

	
 

	
 

	
Name:     

	
Robert Press

	
 

	
Title:       

	
Director

	
 

		
SUBORDINATED CREDITORS:

	
 

	
 

	
 

	
/s/ Greg Vislocky

		
(Greg Vislocky)

	
 

	
 

	
 

	
/s/ Brian Rick Delamarter

	
 

	
(Brian Rick Delamarter)

	
 

	
 

	
 

	/s/ Harold Guy Delamarter
	
 

	
(Harold Guy Delamarter)

 

[SIGNATURE PAGE 1 OF 3 TO SUBORDINATION AGREEMENT]

	
 

	
Walter John Short and Karen A. Wilson

	
 

	
 

	
 

	/s/ W. John Short
	
 

	
(W. John Short)

	 	
	 	/s/ Karen A. Wilson
	 	
(Karen A. Wilson)

 

	 	
The Shoshana Shapiro Halpern Revocable Trust UA June 13, 2006

	 		
	 	
By:

	
/s/ Baruch Halpern

	 	
Name:

	
Baruch Halpern

	 	
Its:

	
Trustee

	 		
	 	
By:

	
/s/ Shoshana Halpern

	 	
Name:

	
Shoshana Halpern

	 	
Its:

	
Trustee

	 		
	 	
Weintraub Partners

	 		
	 	
By:

	
/s/ Chris Chediak

	 	
Name:

	Chris Chediak
	 	
Its:

	Partner
	 		
	 	
Zanesville Partners Fund, LLC

	 	
	 	
By:

	
/s/ James C. Lintzenich

	 	
Name:

	
James C. Lintzenich

	 	
Its:

	Member

[SIGNATURE PAGE 2 OF 3 TO SUBORDINATION AGREEMENT]

	 	
The Revocable Trust of Edward L. McMillan Revocable 

	 	Trust U/D/T dated February 17, 1999
	 		
	 	
By:

	
/s/ Edward L. McMillan

	 	
Name:

	
Edward L. McMillan

	 	
Its:

	
Trustee

	 		
	 	
Pensco Trust Co., FBO Baruch Halpern IRA

	 	
	 	
/s/ Baruch Halpern

	 	
(Baruch Halpern)

	 		
	 	
/s/ Alon Gibli

	 	
(Alon Gibli)

	 	
	 	
/s/ Michael Geliebter

	 	
(Michael Geliebter)

 

[SIGNATURE PAGE 3 OF 3 TO SUBORDINATION AGREEMENT]

ACKNOWLEDGMENT BY BORROWER

 

The undersigned, being the Borrower referred to in the foregoing Restated Subordination Agreement (“Agreement”), hereby (i) acknowledges receipt of a copy thereof, (ii) agrees to all of the terms and provisions thereof, (iii) agrees to and with the Preferred Lenders that it shall make no payment on the Subordinated Indebtedness that the Subordinated Creditors would not be entitled to receive under the provisions of the Agreement, (iv) agrees that any such payment will constitute a default under the Preferred Lenders Debt, and (v) agrees to mark its books conspicuously to evidence the subordination of the Subordinated Indebtedness effected hereby.

	
RICEBRAN TECHNOLOGIES

	
	
 

	
 

	
	
By:

	
/s/ W. John Short

	
	
Name:    

	
W. John Short

	
	
Title: 

	
Chief Executive Officer

	

ACKNOWLEDGMENT BY SUBSIDIARY GRANTORS

 

Each of the undersigned hereby (i) acknowledges receipt of a copy of the Restated Subordination Agreement dated as of May __, 2013 made by and among Gregory J. Vislocky, Brian Rick Delamarter, Harold Guy Delamarter, Baruch Halpern and Shoshana Halpern as trustees for The Shoshana Shapiro Halpern Revocable Trust UA June 13, 2006, Weintraub Partners, W. John Short and Karen A. Wilson, Edward McMillan as trustee for The Revocable Trust of Edward L. McMillan Revocable Trust U/D/T dated February 17, 1999, Zanesville Partners Fund, LLC, Alon Gibli, Michael Geliebter, and Pensco Trust Co., FBO Baruch Halpern IRA (collectively the “Subordinated Creditors”), TCA Global Credit Master Fund, LP, a limited partnership organized and existing under the laws of the Cayman Islands (“TCA”) and Hillair Capital Investments, L.P., a Delaware limited partnership(“Hillair”) (with its participants, successors and assigns, TCA and Hillair are sometimes referred to herein as the “Preferred Lenders”) (the “Agreement”), (ii) agrees to all of the terms and provisions of the Agreement, (iii) agrees to and with the Preferred Lenders that it shall make no payment on the Subordinated Indebtedness that the Subordinated Creditors would not be entitled to receive under the provisions of the Agreement, (iv) agrees that any such payment will constitute a default under the Preferred Lenders Debt, and (v) agrees to mark its books conspicuously to evidence the subordination of the Subordinated Indebtedness effected hereby.

	
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,

	
 

 

	
Each by:

	
/s/ J. Dale Belt

	
	
Name:    

	
J. Dale Belt

	
	
Title:

	
Secretary

	

EXHIBIT A

Legend

 

“THIS INSTRUMENT IS SUBJECT TO THE TERMS OF A RESTATED SUBORDINATION AGREEMENT BY _____________ IN FAVOR OF TCA GLOBAL CREDIT MASTER FUND, LP AND THE HILLAIR CAPITAL INVESTMENTS, L.P., DATED ____________________.”

 

 

Exhibit A - 1Exhibit 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.

7

(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.

8

(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;

9

(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.

10

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]

11

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 NOTE

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00220-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00220-of-00352.parquet"}]]