Document:

ex10_6.htm

 

PLEDGE AGREEMENT

BETWEEN

RICEBRAN TECHNOLOGIES,

as Pledgor

and

TCA GLOBAL CREDIT MASTER FUND, LP,

as Pledgee

 

April 30, 2013

 

  

  

  

 

PLEDGE AGREEMENT

 

THIS PLEDGE AGREEMENT (as may be amended, restated or modified from time to time, this “Pledge Agreement”), dated as of April 30, 2013, is made by and between RICEBRAN TECHNOLOGIES, a corporation incorporated under the laws of the State of California, as pledgor (the “Pledgor”), and TCA GLOBAL CREDIT MASTER FUND, LP, a limited partnership organized and existing under the laws of the Cayman Islands, as pledgee (the “Pledgee”).

W I T N E S S E T H:

 

WHEREAS, pursuant to that certain senior secured revolving credit facility agreement, dated as of the date hereof (the “Credit Agreement”), by and among the Pledgor, as borrower (the “Borrower”), certain other subsidiaries of the Borrower, and the Pledgee, as lender, the Pledgee has agreed to advance an aggregate principal amount of up to Eight Million and No/100 United States Dollars (US$8,000,000) (the “Loan”) to the Borrower, which Loan is further evidenced by revolving promissory notes to be issued by the Borrower in favor of the Pledgee (the “Notes”);

 

WHEREAS, as of the date hereof, the Pledgor is the registered and beneficial owner of [Ÿ] issued and outstanding shares of capital stock (equal to [Ÿ]% of the total issued and outstanding common stock) (the “Pledged Shares”) of [Ÿ] (in such capacity, the “Pledged Company”), and the Pledged Shares are represented by a share certificate bearing certificate number 1 (the “Certificate”);

 

WHEREAS, it is a condition precedent to the Pledgee making the Loan available to the Borrower under the Credit Agreement that the Pledgor execute and deliver to the Pledgee, as security for the obligations of the Borrower to the Pledgee, a pledge of all of the Pledgor’s right, title and interest in and to the Pledged Shares; and

 

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 Pledgor and the Pledgee agree as set forth below:

 

SECTION 1.  Defined Terms.  Except as otherwise defined herein, terms defined in the Credit Agreement shall have the same meaning when used herein.

 

SECTION 2.  Grant of Security.  As security for the Obligations  , the Pledgor hereby pledges, assigns, transfers and delivers to the Pledgee the Pledged Shares and hereby grants to the Pledgee a first priority lien on and a first priority security interest in the following (collectively, the “Pledged Collateral”):

 

(i)            the Pledged Shares and all capital, revenue, profit, income, gain or other property or proceeds, return on contribution or otherwise with respect to the Pledged Shares;

 

(ii)           all securities, moneys or property representing dividends or interest on any of the Pledged Shares, or representing a distribution in respect of the Pledged Shares, or resulting from a split-up, revision, reclassification or other like change of the Pledged Shares or otherwise received in exchange therefor, and any subscription warrants, rights or options issued to the holders of, or otherwise in respect of, the Pledged Shares (exclusive of any equity holder loan);

 

  

  

  

 

(iii)          all right, title and interest of Pledgor in, to and under any policy of insurance payable by reason of loss or damage to the Pledged Shares and any other Pledged Collateral;

 

(iv)          all other payments due or to become due to the Pledgor in respect of the Pledged Shares whether under any organizational document or otherwise, whether as contractual obligations, damages or otherwise;

 

(v)           all “accounts”, “general intangibles”, “instruments” and “investment property” (in each case as defined in the Uniform Commercial Code of the State of New York (the “UCC”)) constituting or relating to the foregoing;

 

(vi)          all Proceeds of any of the foregoing property of Pledgor (including, without limitation, any proceeds of insurance thereon, all “accounts”, “general intangibles”, “instruments” and “investment property”, in each case as defined in the UCC, constituting or relating to the foregoing); and

 

(vii)         all other property hereafter delivered in substitution for or in addition to any of the foregoing, all certificates and instruments representing or evidencing such other property and all cash, securities, interest, dividends, rights and other property at any time and from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all thereof.

 

SECTION 3.  Pledge Documents.  Concurrently with the execution of this Pledge Agreement and upon the circumstances described in Section 6 hereof, the Pledgor shall execute and deliver to the Pledgee an irrevocable proxy in favor of the Pledgee in respect of the Pledged Shares of the Pledged Company in the form set out in Exhibit A hereto (the “Irrevocable Proxy”) and shall deliver to the Pledgee the Certificate together with a signed, undated instrument of transfer in the form set out in Exhibit B hereto (an “Instrument of Transfer”) pertaining thereto duly executed in blank.

 

SECTION 4.  Representations and Warranties.  The Pledgor represents and warrants that:

 

(a)           it is the legal and beneficial owner of, and has good and marketable title to, the Pledged Collateral, subject to no pledge, lien, mortgage, hypothecation, security interest, charge, option or other encumbrance whatsoever, except any Permitted Liens or the lien and security interest created and contemplated by this Pledge Agreement;

 

(b)           it has full power, authority and legal right to execute, deliver and perform its obligations under this Pledge Agreement and to create the lien and security interest contemplated by this Pledge Agreement;

 

(c)           the Pledged Shares of the Pledged Company (1) have been duly and validly created pursuant to the relevant organizational documents of the Pledged Company, (2) constitute [Ÿ] ([Ÿ]%) of the total issued and outstanding capital stock of the Pledged Company and (3) to the extent the Pledged Company is a corporation, are evidenced by the Certificate;

 

  

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(d)           as of the date hereof, except as set forth in the articles of incorporation, bylaws, certificate of incorporation, certificate of formation, operating agreement or limited liability company agreement of the Pledged Company, as applicable, no Person has entered into any options, warrants or other agreements to acquire additional capital stock in the Pledged Company and there are no voting trusts or other member agreements or arrangements relating to any Pledged Collateral;

 

(e)           this Pledge Agreement constitutes a valid obligation of the Pledgor, legally binding upon it and enforceable in accordance with its terms;

 

(f)            the pledge, hypothecation, assignment of the Pledged Collateral and the delivery of the Pledged Shares to Pledgee (together with the Instrument of Transfers) pursuant to and/or described in this Pledge Agreement create a valid and perfected first priority security interest in the Pledged Collateral;

 

(g)           other than consents or approvals obtained which are in full force and effect, no consent of any other party (including equity interest holders of the Pledgor) is required in connection with the execution, delivery, performance, validity, enforceability or enforcement of this Pledge Agreement, and no consent, license, approval or authorization of, or registration or declaration with, any governmental authority, bureau or agency is required in connection with the execution, delivery, performance, validity, enforceability or enforcement of this Pledge Agreement;

 

(h)           the execution, delivery and performance of this Pledge Agreement will not violate or contravene any provision of any existing law or regulation or decree of any court, governmental authority, bureau or agency having jurisdiction in the premises or of the organizational documents of the Pledgor or of any mortgage, indenture, security agreement, contract, undertaking or other agreement to which the Pledgor is a party or which purports to be binding upon it or any of its properties or assets and will not result in the creation or imposition of any lien, charge or encumbrance on, or security interest in, any of its properties or assets pursuant to the provisions of any such mortgage, indenture, security agreement, contract, undertaking or other agreement; and

 

(i)            its chief executive office is located at 6720 North Scottsdale Road, Suite 390, Scottsdale, AZ 85253; and

 

SECTION 5.  Covenants.  The Pledgor hereby covenants that during the continuance of this Pledge Agreement:

 

(a)           it shall warrant and defend the right and title of the Pledgee conferred by this Pledge Agreement in and to the Pledged Collateral at the cost of the Pledgor against the claims and demands of all persons whomsoever;

 

  

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(b)           it shall not sell, assign, transfer, charge, pledge or encumber in any manner any part of the Pledged Collateral or suffer to exist any encumbrance on the Pledged Collateral except for the Permitted Liens;

 

(c)           it shall not amend or modify any organizational document of the Pledged Company without the written consent of the pledgee, which consent shall not be unreasonably withheld;

 

(d)           it shall not vote the Pledged Shares of the Pledged Company in favor of the consolidation, merger, dissolution, liquidation or any other corporate reorganization of the Pledged Company unless in connection with such transaction the outstanding principal and accrued interest under the Revolving Notes (as defined in the Credit Agreement) are satisfied at the closing of such transaction;

 

(e)           it shall not take from the Pledged Company any undertaking or security in respect of its liability hereunder or in respect of any other liability of the Pledged Company to the Pledgor and the Pledgor shall not prove nor have the right of proof, in competition with the Pledgee, for any monies whatsoever owing from the Pledged Company to the Pledgor, in any insolvency or liquidation, or analogous proceedings under any applicable law, of the Pledgor;

 

(f)            subject to the terms and conditions contained in the Credit Agreement and the Company’s ability to control such action, there shall not be issued any additional shares of capital stock in the Pledged Company nor any options, warrants or other agreements to do so issued or entered into;

 

(g)           it shall not release, transfer or otherwise dispose of any shares of capital stock held by the Pledged Company as treasury stock or otherwise;

 

(h)           it shall furnish to Pledgee from time to time statements and schedules further identifying and describing the Pledged Collateral as Pledgee reasonably requests, all in reasonable detail;

 

(i)            it shall give at least thirty (30) days’ prior written notice to Pledgee of any (i) change of the location of Pledgor’s chief executive office from that specified in Section 4(j) hereof, (ii) change of Pledgor’s name, identity or structure or (iii) reorganization or reincorporation of Pledgor under the laws of another jurisdiction; and

 

(j)            it shall indemnify the Pledgee from, and hold it harmless against, any and all liabilities with respect to, or resulting from any delay in paying, any and all stamp, excise, sales or other taxes which may be payable or determined to be payable with respect to any of the Pledged Collateral or in connection with the transaction contemplated by this Pledge Agreement.

 

SECTION 6.  Delivery of Additional Collateral.  If the Pledgor shall become entitled to receive or shall receive any equity interests, option or rights, whether as an addition to, in substitution of, or in exchange for any of the Pledged Shares, the Pledgor agrees to accept the same as the agent of the Pledgee and to hold the same in trust for the benefit of the Pledgee and to deliver the same forthwith to the Pledgee in the exact form received, with the endorsement of the Pledgor when necessary and/or appropriate undated Instruments of Transfer duly executed in blank, and Irrevocable Proxies for any shares of capital stock so received, in substantially the forms attached hereto to be held by the Pledgee, subject to the terms hereof, as additional collateral security for the Obligations.  Pledgee understands and agrees that certain membership interests of Pledgor in Nutra SA, LLC, a Delaware limited liability Company, will not be subject this Pledge Agreement and Pledgee shall have no pledge or security interest in such membership interests.

 

  

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SECTION 7.  General Authority.  The Pledgor hereby consents that, without the necessity of any reservation of rights against the Pledgor, and without notice to or further assent by the Pledgor, any demand for payment of any of the Obligations made by the Pledgee may be rescinded by the Pledgee and any of the Obligations continued, and the Obligations, or the liability of the Pledgor and/or the Pledged Company upon or for any part thereof, or any other collateral security (including, without limitation, any collateral security held pursuant to any of the other Loan Documents) or right of offset with respect thereto, may, from time to time, in whole or in part, be renewed, extended, modified, accelerated, compromised, waived, surrendered, or released by the Pledgee, and the Loan Documents, any guarantees and any other collateral security documents executed and delivered by the Pledgor and/or the Pledged Company or any other obligors in respect of the Obligations may be amended, modified, supplemented or terminated, in whole or in part, as the Pledgee may deem advisable, from time to time, and any other collateral security at any time held by the Pledgee for the payment of the Obligations (including, without limitation, any collateral security held pursuant to any other collateral security document executed and delivered pursuant to the Loan Documents) may be sold, exchanged, waived, surrendered or released, all without notice to or further assent by the Pledgor or the Pledged Company, which shall remain bound hereunder, notwithstanding any such renewal, extension, modification, acceleration, compromise, amendment, supplement, termination, sale, exchange, waiver, surrender or release.  The Pledgor waives any and all notices of the creation, renewal, extension or accrual of any of the Obligations and notice of or proof of reliance by the Pledgee upon this Pledge Agreement, and the Obligations, and any of them, shall conclusively be deemed to have been created, contracted or incurred in reliance upon this Pledge Agreement, and all dealings between the Pledged Company and the Pledgee shall likewise be conclusively presumed to have been had or consummated in reliance upon this Pledge Agreement.  The Pledgor waives diligence, presentment, protest, demand for payment and notice of default or non-payment to or upon the Pledgor or the Pledged Company with respect to the Obligations.

 

SECTION 8.  Voting Rights.  The Pledgee shall, as the Pledgee and as the holder of the Irrevocable Proxies, receive notice and have the right (but not the obligation) to vote the Pledged Shares at its own discretion at, any annual or special meeting, as the case may be, of the shareholders of the Pledged Company, provided, however, that the Pledgee shall not be entitled to receive notice, or to exercise such right to vote until the occurrence of and during the continuation of an Event of Default or any of the security created by or pursuant to this Pledge Agreement shall be deemed imperiled or jeopardized in a manner by the Pledgee in its sole discretion.

 

SECTION 9.  UCC Filings.  The Pledgor does hereby authorize the Pledgee to do all things the Pledgee may deem to be necessary or advisable in order to perfect or maintain the security interest granted by this Pledge Agreement including, but not limited to, filing any and all Uniform Commercial Code financing statements or renewals thereof.

 

  

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SECTION 10.  Remedies.  At any time after the occurrence of an Event of Default or in the event any of the security created by or pursuant to this Pledge Agreement shall be imperiled or jeopardized in a manner deemed material by the Pledgee in its sole discretion, the Pledgee shall be entitled, without further notice to the Pledgor:

 

(a)           subject to the limitations of Sections 9-610 and 9-615 of the UCC (to the extent applicable), to sell, assign, transfer and deliver at any time the whole, or from time to time any part, of the Pledged Collateral or any rights or interests therein, at public or private sale or in any other manner, at such price or prices and on such terms as the Pledgee may deem appropriate, and either for cash, on credit, for other property or for future delivery, at the option of the Pledgee, upon not less than 30 days’ written notice (which 30 day notice is hereby acknowledged by the Pledgor to be reasonable) addressed to the Pledgor at its last address provided to the Pledgee pursuant to this Pledge Agreement, but without demand, advertisement or other notice of any kind (all of which are hereby expressly waived by the Pledgor).  If any of the Pledged Collateral or any rights or interests thereon are to be disposed of at a public sale, the Pledgee may, without notice or publication, adjourn any such sale or cause the same to be adjourned from time to time by announcement at the time and place fixed for sale, and such sale may, without further notice, occur at the time and place identified in such announcement.  If any of the Pledged Collateral or any rights or interests therein shall be disposed of at a private sale, the Pledgee shall be relieved from all liability or claim for inadequacy of price.  At any such public sale the Pledgee may purchase the whole or any part of the Pledged Collateral or any rights or interests therein so sold.  Each purchaser, including the Pledgee should it acquire the Pledged Collateral, at any public or private sale, shall hold the property sold free from any claim or right of redemption, stay, appraisal or reclamation on the part of the Pledgor which are hereby expressly waived and released to the extent permitted by applicable law.  If any of the Pledged Collateral or any rights or interests therein shall be sold on credit or for future delivery, the Pledged Collateral or rights or interests so sold may be retained by the Pledgee until the selling price thereof shall be paid by the purchaser, but the Pledgee shall not incur any liability in case of failure of the purchaser to take up and pay for the Pledged Collateral or rights or interests therein so sold.  In case of any such failure, the Pledged Collateral or rights or interests therein may again be sold on not less than 10 days’ written notice as aforesaid; and

 

(b)           to exercise all voting and other equity interest rights at any meeting of any Pledged Company and exercise any and all rights of conversion, exchange, subscription or any other rights, privileges or options pertaining to the Pledged Shares of the Pledged Company as if it was the absolute owner thereof, including, without limitation, the right to exchange at its discretion, such Pledged Shares upon the merger, consolidation, reorganization, recapitalization or other readjustment of the Pledged Company or, upon the exercise by the Pledged Company or the Pledgee of any right, privilege or option pertaining to such Pledged Share, and in connection therewith, to deposit and deliver such Pledged Shares with any committee, depository, transfer agent, registrar or other designated agency upon such terms and conditions as it may determine, all without liability except to account for property actually received by it.

 

  

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SECTION 11.  No Duty on Pledgee.  The Pledgee shall have no duty to exercise any of the aforesaid rights, privileges or options and shall not be responsible for any failure to do so or delay in so doing.

 

SECTION 12.  Application of Proceeds.  All moneys collected or received by the Pledgee pursuant to this Pledge Agreement shall be applied as provided in the Credit Agreement.

 

SECTION 13.  Miscellaneous.

 

13.1  Further Assurances.  The Pledgor agrees that if this Pledge Agreement shall, in the reasonable opinion of the Pledgee, at any time be deemed by the Pledgee, for any reason, insufficient in whole or in part to carry out the true intent and spirit hereof, it shall execute or cause to be executed such other documents or deliver or cause to be delivered such further assurances as in the reasonable opinion of the Pledgee may be required in order to more effectively accomplish the purposes of this Pledge Agreement including, without limitation, an alternative pledge or such other alternative security as the Pledgee shall require.

 

13.2  Remedies Cumulative and Not Exclusive; No Waiver.  Each and every right, power and remedy herein given to the Pledgee shall be cumulative and shall be in addition to every other right, power and remedy of the Pledgee now or hereafter existing at law, in equity or by statute, and each and every right, power and remedy, whether herein given or otherwise existing, may be exercised from time to time, in whole or in part, and as often and in such order as may be deemed expedient by the Pledgee, and the exercise or the beginning of the exercise of any right, power or remedy shall not be construed to be a waiver of the right to exercise at the same time or thereafter any other right, power or remedy.  No failure, delay or omission by the Pledgee in the exercise of any right or power or in the pursuance of any remedy accruing upon any breach or default by the Pledgor or any Credit Party shall impair any such right, power or remedy or be construed to be a waiver of any such right, power or remedy or to be an acquiescence therein; nor shall the acceptance by the Pledgee of any security or of any payment of or on account of any of the amounts due from the Pledgor or any Credit Party to the Pledgee and maturing after any breach or default or of any payment on account of any past breach or default be construed to be a waiver of any right with respect to any future breach or default or of any past breach or default not completely cured thereby.  In addition to the rights and remedies granted to it in this Pledge Agreement and in any other instrument or agreement securing, evidencing or relating to any of the Obligations, the Pledgee shall have rights and remedies of a secured party under the UCC.

 

13.3  Successors and Assigns. This Pledge Agreement and all obligations of the Pledgor hereunder shall be binding upon the successors and assigns of the Pledgor and shall, together with the rights and remedies of the Pledgee hereunder, inure to the benefit of the Pledgee, its respective successors and assigns.

 

13.4  Waiver; Amendment.  None of the terms and conditions of this Pledge Agreement may be changed, waived, modified or varied in any manner whatsoever unless in writing duly signed by the Pledgor and the Pledgee.

 

  

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13.5  Invalidity.  If any provision of this Pledge Agreement shall at any time, for any reason, be declared invalid, void or otherwise inoperative by a court of competent jurisdiction, such declaration or decision shall not affect the validity of any other provision or provisions of this Pledge Agreement, or the validity of this Pledge Agreement as a whole and, to the fullest extent permitted by law, the other provisions hereof shall remain in full force and effect in such jurisdiction and shall be liberally construed in favor of the Pledgee in order to carry out the intentions of the parties hereto as nearly as may be possible.  The invalidity and unenforceability of any provision hereof in any jurisdiction shall not affect the validity or enforceability of such provision in any other jurisdiction.

 

13.6  Notices.  Any notice, request or other communication to be given or made under this Pledge Agreement to the Pledgor or the Pledgee shall be in writing.  Such notice, request or other communication shall be deemed to have been duly given or made when it shall be delivered by hand, international courier (confirmed by facsimile), or facsimile (with a hard copy delivered within two (2) Business Days) to the Pledgor or the Pledgee to which it is required or permitted to be given or made at such party’s address specified below or at such other address as such party shall have designated by notice to the party given or making such notice, request or other communication, it being understood that the failure to deliver a copy of any notice, request or other communication to a party to whom copies are to be sent shall not affect the validity of any such notice, request or other communication or constitute a breach of this Pledge Agreement.

 

If to the Pledgor:                           RiceBran Technologies

  6720 North Scottsdale Road, Suite 390

  Scottsdale, AZ 85253

  with a copy (which shall not constitute notice) to:

  Weintraub Tobin Chediak Coleman Grodin

  400 Capitol Mall, 11th Floor

  Sacramento, CA 95814

  Facsimile:  (916) 446-1611

  Attention:  Chris Chediak, Esq.

If to the Pledgee:

  TCA Global Credit Master Fund, LP

  1404 Rodman Street

  Hollywood, FL 33020

  Facsimile: (786) 323-1651

Attention: Robert Press

 

with a copy (which shall not constitute notice) to:

 

Lucosky Brookman LLP

101 Wood Avenue South, 5th Floor

Woodbridge, NJ 08830

Facsimile:  (732) 395-4401

Attention:  Seth A. Brookman, Esq.

 

  

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13.7  Counterparts; Electronic Delivery.  This Pledge Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all such counterparts together shall constitute one and the same instrument.  Delivery of an executed counterpart of this Pledge Agreement by facsimile or electronic transmission shall be deemed as effective as delivery of an originally executed counterpart.  In the event that the Pledgor delivers an executed counterpart of this Pledge Agreement by facsimile or electronic transmission, the Pledgor shall also deliver an originally executed counterpart as soon as practicable, but the failure of the Pledgor to deliver an originally executed counterpart of this Pledge Agreement shall not affect the validity or effectiveness of this Pledge Agreement.

 

13.8  References.  References herein to Sections, Exhibits and Schedules are to be construed as references to sections of, exhibits to, and schedules to, this Pledge Agreement, unless the context otherwise requires.

 

13.9  Headings.  In this Pledge Agreement, Section headings are inserted for convenience of reference only and shall not be taken into account in the interpretation of this Pledge Agreement.

 

13.10  Termination.  When all of the Obligations shall have been fully satisfied, the Pledgee agrees that it shall forthwith release the Pledgor from its Obligations hereunder and the Pledgee, at the request and expense of the Pledgor, shall promptly execute and deliver to the Pledgor a proper instrument or instruments acknowledging the satisfaction and termination of this Pledge Agreement, and the Irrevocable Proxies shall terminate forthwith and be delivered to the Pledgor forthwith together with the other items furnished to the Pledgee pursuant to this Pledge Agreement.

 

SECTION 14.  Applicable Law, Jurisdiction and Waivers.

 

14.1  Governing Law.  Except in the case of the Mandatory Forum Selection clause set forth in Section 14.2 hereof, this Pledge Agreement shall be governed by and construed in accordance with the laws of the Nevada, without regard to principles of conflicts of laws thereof.

 

14.2  MANDATORY FORUM SELECTION.  ANY DISPUTE ARISING UNDER, RELATING TO, OR IN CONNECTION WITH THE AGREEMENT OR RELATED TO ANY MATTER WHICH IS THE SUBJECT OF OR INCIDENTAL TO THE AGREEMENT (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.

 

  

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14.3  WAIVER OF IMMUNITY. TO THE EXTENT THAT THE PLEDGOR HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM SUIT, JURISDICTION OF ANY COURT OR ANY LEGAL PROCESS (WHETHER THROUGH ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION, EXECUTION OF A JUDGMENT, OR FROM ANY OTHER LEGAL PROCESS OR REMEDY) WITH RESPECT TO ITSELF OR ITS PROPERTY, THE PLEDGOR HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS PLEDGE AGREEMENT.

 

14.4  WAIVER OF JURY TRIAL.  EACH OF THE PLEDGOR AND THE PLEDGEE HEREBY WAIVES TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY ANY PARTY HERETO OR ANY BENEFICIARY HEREOF ON ANY MATTER WHATSOEVER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS PLEDGE AGREEMENT.

 

[-signature page follows-]

 

  

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IN WITNESS WHEREOF, the parties hereto have caused this Pledge Agreement to be duly executed the day and year first above written.

 

	  	
PLEDGOR:

	  	  	  
	  	
RICEBRAN TECHNOLOGIES

	  	  	  
	  	
By:

	
/s/ W. John Short

	  	
Name:

	
W. John Short

	  	
Title:

	
Chief Executive Officer

	  	
PLEDGEE

	  	  	  
	  	
TCA GLOBAL CREDIT MASTER FUND, LP

	  	  	  
	  	
By:

	
TCA Global Credit Fund GP, Ltd.

	  	
Its:

	
General Partner

	  	  	  
	  	
By:

	
/s/ 

	  	
Name:

	 
	  	
Title:

	 

[ signature page to Pledge Agreement ]

 

  

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EXHIBIT A

IRREVOCABLE PROXY

 

The undersigned, the registered and beneficial owner of the below described capital stock of [Ÿ], a limited liability company organized and existing under the laws of the State of Delaware, hereby makes, constitutes and appoints, TCA Global Credit Master Fund, LP, a limited partnership organized and existing under the laws of the Cayman Islands (the “Pledgee”), upon and during such times that an Event of Default is continuing, with full power to appoint a nominee or nominees to act hereunder from time to time, the true and lawful attorney and proxy of the undersigned to vote one hundred percent (100%) of the capital stock of [Ÿ] owned by the undersigned, at all annual and special meetings of [Ÿ] or take any action by written consent with the same force and effect as the undersigned might or could do, hereby ratifying and confirming all that the said attorney or its nominee or nominees shall do or cause to be done by virtue hereof.

 

The said capital stock has been pledged (the “Pledge”) to the Pledgee pursuant and subject to a Pledge Agreement, dated as of April 30, 2013, by and between the undersigned and the Pledgee (the “Pledge Agreement”).  This Irrevocable Proxy is subject to the terms and conditions of the Pledge Agreement.

 

This power and proxy is coupled with an interest and is irrevocable and shall remain irrevocable so long as the Pledge is outstanding and is in full force and effect.

 

IN WITNESS WHEREOF, the undersigned has caused this instrument to be duly executed on April 30, 2013.

 

	  	
RICEBRAN TECHNOLOGIES

	  	  	  
	  	
By:

	
/s/ W. John Short

	  	
Name:

	
W. John Short

	  	
Title:

	
Chief Executive Officer

  

  

  

EXHIBIT B

INSTRUMENT OF TRANSFER

	
FOR VALUE RECEIVED:

	  

 

	  
	  	
PLEASE INSERT SOCIAL SECURITY OR OTHER

IDENTIFYING NUMBER OR ASSIGNEE

	  
	
hereby sells, assigns and transfers unto

	  	
  

 

	  	  
	
  

 

	
  

 

 

	  	  	
[Ÿ] shares

	
  Of

	
[Ÿ]

	  	
standing in my (our) name(s)

	
on the books of said corporation represented by Certificate(s) No.(s).

	
[Ÿ]

	
herewith, and do hereby irrevocably constitute and appoint

	  
	  	
attorney to transfer the

	
 

said stock on the books of said corporation with full power of substitution in the premises, This Instrument is given for collateral purposes only pursuant to  that certain Pledge Agreement between the undersigned and TCA Global Credit Master Fund, LP dated April 30, 2013.

 

	
Dated

	  	  

	  	  	  

 

	
In presence of

	  	  	  	  
	  	  	
Name:

Title:ex10_7.htm

Exhibit 10.7

 

AMENDMENT AND WAIVER AGREEMENT

THIS AMENDMENT AND WAIVER AGREEMENT (this “Amendment Agreement”), dated as of May 24, 2013 (“Effective Date”) is entered into by and between RiceBran Technologies, a California corporation (the “Company”) and the holder identified on the signature page hereof (the “Holder”). Capitalized terms used herein, but not otherwise defined, shall have the meanings ascribed to such terms in the Debentures (as defined below).

WHEREAS, reference is made to that certain Original Issue Discount Senior Secured Convertible Debenture, due January 1, 2014, with an aggregate of $1,009,200 in principal amount issued by the Company to the Holder (the “Exchange Debenture”) and that certain Original Issue Discount Senior Secured Convertible Debenture, due January 1, 2014, with an aggregate of $290,000 in principal amount issued by the Company to the Holder (“New Debenture”, and together with the Exchange Debenture, the “Debentures”);

WHEREAS, further reference is made to that certain Senior Secured Revolving Credit Facility Agreement of even date herewith among the Company, TCA Global Credit Master Fund, LP, a limited partnership organized and existing under the laws of the Cayman Islands (“TCA”), the Company and certain of the Company’s subsidiaries (“Credit Agreement”), and in the form attached hereto as Exhibit B.

WHEREAS, further reference is made to that certain Amended and Restated Note and Warrant Purchase Agreement, of even date herewith, by and between the Company and each of the investors listed on Schedule I thereto (“Purchase Agreement”), and in the form attached hereto as Exhibit C.

WHEREAS, immediately prior to the consummation of the transaction contemplated hereby, the outstanding principal amount on the Exchange Debenture is $601,527.27 and the outstanding principal amount on the New Debenture is $193,333.33.

WHEREAS, the parties wish to amend and waive certain terms of the Debentures, subject to the terms and conditions of this Amendment Agreement.

NOW, THEREFORE, in consideration of the terms and conditions contained in this Amendment Agreement, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties, intending to be legally bound hereby, agree as follows:

1.         Waiver of Covenants under the Transaction Documents.  Solely for the purpose of (i) enabling the Company to issue promissory notes and incur debt pursuant to the terms of the Credit Agreement and the Purchase Agreement, (ii) enabling the Company and the Company’s subsidiaries to grant security interests in their assets as contemplated by the Credit Agreement, the Purchase Agreement and the security agreements attached thereto, and (iii) enabling certain parties, including the Holder and the Company, to enter into that certain Restated Subordination Agreement, in the form attached hereto as Exhibit D (the “Restated Subordination Agreement”), the Holder hereby waives those provisions of the Transaction Documents (as defined in the Securities Exchange Agreement) that would conflict with the foregoing.

 

  

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2.         Amendments to Exchange Debenture.

 

a.       Amendment to Monthly Redemption Date.  On the Effective Date, the Company and the Holder hereby agree to amend the date of commencement of the Monthly Redemptions.  As such, the definition of “Monthly Redemption Date” in the Exchange Debentures shall be amended and restated in its entirety to read as follows:

 

“’Monthly Redemption Date’ means the first day of each month, commencing on July 1, 2013, and terminating upon the full redemption of this Debenture.”

 

b.      Amendment to Monthly Redemption Amount.  On the Effective Date, the Company and the Holder hereby agree to amend the monthly principal amount of the Debentures to be redeemed by the Company.  As such, the definition of “Monthly Redemption Amount” in the Exchange Debenture shall be amended and restated in its entirety to read as follows:

 

“’Monthly Redemption Amount’ means, as to a Monthly Redemption, $32,476.77, plus liquidated damages, interest and any other amounts then owing to the Holder in respect of this Debenture.”

3.          Prepayment of Debenture.  Subject to the terms and conditions of this Amendment Agreement, the Company hereby agrees to pay, and Holder agrees to accept payment of, a total of $300,000 as a prepayment of the principal amount of the Debentures and $120,000 as a prepayment premium, for a total payment of $420,000 (the “Prepayment Amount”).  The Company shall pay $300,000 of the Prepayment Amount by one or more wire transfers of immediately available funds to the Holder pursuant to the wire transfer instructions set forth on the signature pages attached hereto on the Effective Date.  Of this $300,000, $193,333.33 shall be used to satisfy the entire outstanding amounts under the New Debenture and $106,667.67 shall be used to prepay outstanding principal under the Exchange Debenture.  The Company shall pay $120,000 of the Prepayment Amount by issuing to Holder 1,714,286 shares of the Company’s Common Stock (“Prepayment Shares”), at an effective price of $0.07 per Prepayment Share.  The Company shall issue and deliver the Prepayment Shares to Holder through The Depository Trust Company Deposit or Withdrawal at Custodian system for credit to the Holder’s account set forth on the signature page hereto on the Effective Date.

4.          Partial Conversion of Exchange Debenture.  Subject to the terms and conditions of this Amendment Agreement, the parties hereby agree that Holder will convert $300,000 in principal amount of the Exchange Debenture into shares of Common Stock at an effective Conversion Price of $0.07 per share.  As such, the Company shall deliver 4,285, 714 shares of Common Stock (the “Conversion Shares”) to the Holder through The Depository Trust Company Deposit or Withdrawal at Custodian system for credit to the Holder’s account set forth on the signature page hereto on the Effective Date.

 

  

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5.          Issuance of Common Stock.  As consideration for the concessions provided by Holder herein, the Company hereby agrees to issue to Holder, and Holder hereby agrees to acquire from the Company, 2,857,143 shares of the Company’s Common Stock (“Shares”).  The Shares shall be issued to Holder on the Effective Date.  Within five (5) trading days of the Effective Date, the Company shall deliver to Holder a stock certificate representing Holder’s ownership of the Shares.

 

6.          Representations and Warranties of the Company.  The Company hereby makes the representations and warranties set forth below to the Holder as of the date of its execution of this Amendment Agreement:

 

(a)          Authorization; Enforcement.  The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by this Amendment Agreement and otherwise to carry out its obligations hereunder in accordance with the terms hereof.  The execution and delivery of this Amendment Agreement by the Company and the consummation by it of the transactions contemplated hereby have been duly authorized by all necessary action on the part of the Company and no further action is required by the Company, its Board of Directors or its stockholders in connection therewith.  This Amendment Agreement has been duly executed by the Company and, when delivered in accordance with the terms hereof, will constitute the valid and binding obligation of the Company enforceable against the Company in accordance with its terms except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors' rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.

 

(b)          No Conflicts.  The execution, delivery and performance of this Amendment Agreement by the Company and the consummation by the Company of the transactions contemplated hereby, subject to the terms hereof, do not and will not: (i) conflict with or violate any provision of the Company's or any Subsidiary's certificate or articles of incorporation, bylaws or other organizational or charter documents, or (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation of any Lien upon any of the properties or assets of the Company or any Subsidiary, or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Company or Subsidiary debt or otherwise) or other understanding to which the Company or any Subsidiary is a party or by which any property or asset of the Company or any Subsidiary is bound or affected, or (iii) conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company or a Subsidiary is subject (including federal and state securities laws and regulations), or by which any property or asset of the Company or a Subsidiary is bound or affected; except in the case of each of clauses (ii) and (iii), such as could not have or reasonably be expected to result in a Material Adverse Effect (as defined in the Securities Purchase Agreement).

 

  

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(c)          Issuance of the Securities.  The Conversion Shares and the Prepayment Shares are duly authorized and, when issued and paid for in accordance with this Amendment Agreement, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company other than restrictions on transfer provided for in the Transaction Documents.  [Note:  EGS to provide the opinion regarding issuance of shares without legends.] The Shares are duly authorized and, when issued in accordance with this Amendment Agreement, will be duly and validly issued, fully paid and nonassessable, fee and clear of all Liens imposed by the Company other than restrictions on transfer provided for herein.

7.          Representations and Warranties of Holder.  Holder hereby makes the representation and warranty set forth below to the Company as of the date of its execution of this Amendment Agreement:

 

(a)          Organization; Authority.  Holder is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization with full right, corporate or partnership power and authority to enter into and to consummate the transactions contemplated hereby and otherwise to carry out its obligations hereunder. The execution and delivery of this Amendment Agreement and performance by Holder of the transactions contemplated hereby have been duly authorized by all necessary corporate or similar action on the part of Holder.  This Amendment Agreement has been duly executed by Holder, and when delivered by Holder in accordance with the terms hereof, will constitute the valid and legally binding obligation of Holder, enforceable against it in accordance with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.

 

(b)          Own Account.  Holder understands that the Shares are “restricted securities” and have not been registered under the Securities Act and is acquiring the Shares as principal for its own account and not with a view to or for distributing or reselling the Shares or any part thereof in violation of the Securities Act or any applicable state securities law, has no present intention of distributing any of the Shares in violation of the Securities Act or any applicable state securities law and has no direct or indirect arrangement or understandings with any other persons to distribute or regarding the distribution of the Shares (this representation and warranty not limiting Holder’s right to sell the Shares in compliance with applicable federal and state securities laws) in violation of the Securities Act or any applicable state securities law.

 

(c)          Holder Status.  Holder is either: (i) an “accredited investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act or (ii) a “qualified institutional buyer” as defined in Rule 144A(a) under the Securities Act.

 

  

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8.          Transfer Restrictions.

(a)          The Shares may only be disposed of in compliance with state and federal securities laws.  In connection with any transfer of the Shares other than pursuant to an effective registration statement, the Company may require the transferor thereof to provide to the Company an opinion of counsel selected by the transferor and reasonably acceptable to the Company, the form and substance of which opinion shall be reasonably satisfactory to the Company, to the effect that such transfer does not require registration of such transferred Shares under the Securities Act.  As a condition of transfer prior to a resale under a registration statement or Rule 144, any such transferee shall agree in writing to be bound by the terms of this Section 8 and shall make the representations set forth in Section 7 hereof. No such agreement shall be required after the Shares have been resold pursuant to a registration statement or Rule 144.

(b)          The share certificate evidencing the Shares issued hereunder shall be endorsed with the following legend:

THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.

 

(c)          The legends on any certificates representing the Shares shall be removed and the Company shall issue a certificate without such legend to Holder if (i) the Shares are registered under the Securities Act, or (ii) following any sale of such Shares pursuant to, and in compliance with, Rule 144 under the Securities Act, or (iii) Holder provides the Company with reasonable assurances that Holder is not an Affiliate of the Company and that the Shares may be sold pursuant to Rule 144 under the Securities Act without volume limitations or current information requirements.

 

9.          Fees and Expenses.  The Company agrees to reimburse Hillair Capital Management LLC $40,000 for its legal fees and expenses in connection herewith; payable on the Effective Date.  Except as expressly set forth in this Amendment Agreement to the contrary, each party shall pay the fees and expenses of its advisors, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Amendment Agreement.

 

  

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10.        Public Disclosure.  On or before 8:30 am (Eastern Time) on the second Trading Day immediately following the Effective Date, the Company shall file a Current Report on Form 8-K, reasonably acceptable to the Holder disclosing the material terms of the transactions contemplated hereby. The Company shall consult with the Holder in issuing any other press releases with respect to the transactions contemplated hereby.

 

11.        Effect on Debentures. Except as expressly set forth above, all of the terms and conditions of the Debentures shall continue in full force and effect after the execution of this Amendment Agreement and shall not be in any way changed, modified or superseded by the terms set forth herein, including, but not limited to, any other obligations the Company may have to the Holder under the Debentures.  Notwithstanding the foregoing, this Amendment Agreement shall be deemed for all purposes as an amendment to the Debentures as required to serve the purposes hereof, and in the event of any conflict between the terms and provisions of the Debentures and the other Transaction Documents, on the one hand, and the terms and provisions of this Amendment Agreement, on the other hand, the terms and provisions of this Amendment Agreement shall prevail.

12.        Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be provided as set forth in the Purchase Agreement.

 

13.        Governing Law.  All questions concerning the construction, validity, enforcement and interpretation of the Debentures shall be governed by the terms of the Debentures.

 

14.        Execution and Counterparts. This Amendment Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need not sign the same counterpart.  In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf” signature page were an original thereof.

 

15.        Conditions to Effectiveness of Amendment Agreement. This Amendment Agreement shall become effective contemporaneously with (i) the funding by TCA of the sum of $1,400,000 pursuant to the Credit Agreement (ii) the Company has raised at least $400,000 on or after May 9, 2013 under the Purchase Agreement from the sale of promissory notes and warrants to purchase Company common stock at Subsequent Closings (as defined in the Purchase Agreement) , and (iii) the receipt by Holder of evidence reasonably satisfactory to Holder that the members of NutraSA, a Delaware limited liability company (“NutraSA”), will accept the sum of $1,250,000 from the Company on or after April 1, 2013 as the Company’s co-investment in NutraSA.

 

 [SIGNATURE PAGE FOLLOWS]

 

  

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.

 

	  	
RICEBRAN TECHNOLOGIES

	  	  
	  	
By: /s/ W. John Short

	  	
Name: W. John Short, Chief Executive Officer

 

 

********************

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

SIGNATURE PAGE FOR HOLDERS FOLLOW]

 

  

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[HOLDER'S SIGNATURE PAGE TO RIBT AMENDMENT AGREEMENT]

 

IN WITNESS WHEREOF, the undersigned has caused this Amendment Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.

 

Name of Holder: Hillair Capital Investments L.P.

Signature of Authorized Signatory of Holder: /s/ Scott D. Kaufman

Name of Authorized Signatory: Scott D. Kaufman

Title of Authorized Signatory: Managing Partner of Hillair Capital Management LLC as investment advisor to Hillair Capital Investments LP

Wire Instructions:

 

The Conversion Shares and Prepayment Shares shall be delivered to the following DWAC Account Number:

	  	 	  
	  	  	  
	  	
 

	  
	  	  	  
	  	 	  

 

 

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