Document:

EXHIBIT 10.4

 

REVOLVING LINE OF CREDIT
NOTE

 

	
  $2,500,000.00

  	
  Fresno, California

  December 26, 2008

  

 

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

 

DEFINITIONS:

 

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

 

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

 

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

 

(c)                                  “LIBOR” means the rate per annum (rounded upward,
if necessary, to the nearest whole 1/8 of 1%) and determined pursuant to the
following formula:

 

	
   

  	
  LIBOR =

  	
  Base LIBOR

  	
   

  
	
   

  	
   

  	
  100% - LIBOR Reserve
  Percentage

  	
   

  

 

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

 

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

 

INTEREST:

 

(a)                                                       Interest.  The outstanding principal
balance of this Note shall bear interest (computed on the basis of a 360-day
year, actual days elapsed) at a fluctuating rate per annum

 

 

determined
by Bank to be three percent (3.0%) above Daily One Month LIBOR in effect from
time to time. Each change in the rate of interest hereunder shall become
effective on each Business Day a change in Daily One Month LIBOR is announced
within Bank. Bank is hereby authorized to note the date and interest rate
applicable to this Note and any payments made thereon on Bank’s books and
records (either manually or by electronic entry) and/or on any schedule
attached to this Note, which notations shall be prima fade evidence of the
accuracy of the information noted.

 

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

 

(c)                                  Payment
of Interest. 
Interest accrued on this Note shall be payable on the 1st day of each
month, commencing February 1, 2009.

 

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

 

BORROWING
AND REPAYMENT:

 

(a)                                       Borrowing
and Repayment. 
Borrower may from time to time during the term of this Note borrow,
partially or wholly repay its outstanding borrowings, and reborrow, subject to
all of the limitations, terms and conditions of this Note and of any document
executed in connection with or governing this Note; provided however, that the
total outstanding borrowings under this Note shall not at any time exceed the
principal amount stated above. The unpaid principal balance of this obligation
at any time shall be the total amounts advanced hereunder by the holder hereof
less the amount of principal payments made hereon by or for Borrower, which
balance may be endorsed hereon from time to time by the holder. The outstanding
principal balance of this Note shall be due and payable in full on December 1,
2009.

 

(b)                                      Advances.  Advances hereunder, to the total amount of
the principal sum stated above, may be made by the holder at the oral or
written request of (i) Gregory D. Ransdell or Donald W. McCollister, any
one acting 

 

 

alone,
who are authorized to request advances and direct the disposition of any
advances until written notice of the revocation of such authority is received
by the holder at the office designated above, or (ii) any person, with
respect to advances deposited to the credit of any deposit account of Borrower,
which advances, when so deposited, shall be conclusively presumed to have been
made to or for the benefit of Borrower regardless of the fact that persons
other than those authorized to request advances may have authority to draw against such account.
The holder shall have no obligation to determine whether any person requesting
an advance is or has been authorized by Borrower.

 

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

 

EVENTS
OF DEFAULT:

 

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

 

MISCELLANEOUS

 

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

 

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

 

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

 

 

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

 

	
  S&W Seed Company

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/Harry B. Hansen

  	
   

  
	
   

  	
  Harry B. Hansen

  	
   

  
	
   

  	
  Managing PartnerEXHIBIT 10.5

 

	
   

  	
  CONTINUING SECURITY AGREEMENT

  
	
  WELLS
  FARGO

  	
  RIGHTS TO PAYMENT AND INVENTORY

  

 

1.             GRANT OF SECURITY INTEREST. For
valuable consideration, the undersigned S&W
Seed Company, or any of them (“Debtor”), hereby grants and transfers
to WELLS FARGO BANK, NATIONAL ASSOCIATION (“Bank”) a security interest in all
accounts, deposit accounts, chattel paper (whether electronic or tangible),
instruments, promissory notes, documents, general intangibles, payment
intangibles, software, letter of credit rights, health-care insurance
receivables and other rights to payment (collectively called “Rights to
Payments”), now existing or at any time hereafter, and prior to the termination
hereof, arising (whether they arise from the sale, lease or other disposition
of inventory or from performance of contracts for service, manufacture,
construction, repair or otherwise or from any other source whatsoever),
including all securities, guaranties, warranties, indemnity agreements,
insurance policies, supporting obligations and other agreements pertaining to
the same or the property described therein, and in all goods returned by or
repossessed from Debtor’s customers, together with a security interest in all
inventory, goods held for sale or lease or to be furnished under contracts for
service, goods so leased or furnished, raw materials, component parts and
embedded software, work in process or materials used or consumed in Debtor’s
business and all warehouse receipts, bills of lading and other documents
evidencing goods owned or acquired by Debtor, and all goods covered thereby,
now or at any time hereafter, and prior to the termination hereof, owned or
acquired by Debtor, wherever located, and all products thereof (collectively
called “Inventory”), whether in the possession of Debtor, warehousemen, bailees
or any other person, or in process of delivery and whether located at Debtor’s
places of business or elsewhere (with all Rights to Payment and Inventory
referred to herein collectively as the “Collateral”), together with whatever is
receivable or received when any of the Collateral or proceeds thereof are sold,
leased, collected, exchanged or otherwise disposed of, whether such disposition
is voluntary or involuntary, including without limitation, all rights to
payment, including returned premiums, with respect to any insurance relating to
any of the foregoing, and all rights to payment with respect to any claim or
cause of action affecting or relating to any of the foregoing (hereinafter
called “Proceeds”).

 

2.             OBLIGATIONS SECURED. The
obligations secured hereby are the payment and performance of: (a) all
present and future Indebtedness of Debtor to Bank; (b) all obligations of Debtor
and rights of Bank under this Agreement; and (c) all present and future
obligations of Debtor to Bank of other kinds. The word “Indebtedness” is used
herein in its most comprehensive sense and includes any and all advances,
debts, obligations and liabilities of Debtor, or any of them, 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, and whether Debtor may be liable individually or
jointly, or whether recovery upon such Indebtedness may be or hereafter becomes
unenforceable.

 

3.             TERMINATION. This Agreement will
terminate upon the performance of all obligations of Debtor to Bank, including
without limitation, the payment of all Indebtedness of Debtor to Bank, and the
termination of all commitments of Bank to extend credit to Debtor, existing at
the time Bank receives written notice from Debtor of the termination of this
Agreement.

 

4.             OBLIGATIONS OF BANK. Bank has no
obligation to make any loans hereunder. Any money received by Bank in respect
of the Collateral may be deposited, at Bank’s option, into a non-interest
bearing account over which Debtor shall have no control, and the same shall,
for all purposes, be deemed Collateral hereunder.

 

5.             REPRESENTATIONS AND WARRANTIES.
Debtor represents and warrants to Bank that: (a) Debtor’s legal name is
exactly as set forth on the first page of this Agreement, and all of
Debtor’s organizational documents or agreements delivered to Bank are complete
and accurate in every respect; (b) Debtor is the owner and has possession
or control of the Collateral and Proceeds; (c) Debtor has the exclusive
right to grant a security interest in the Collateral and Proceeds; (d) all
Collateral and Proceeds are genuine, free from liens, adverse claims, setoffs,
default, prepayment, defenses and conditions precedent of any kind or
character, except the lien created hereby or as otherwise agreed to by Bank, or
heretofore disclosed by Debtor to Bank, in writing; (e) all statements
contained herein and, where applicable, in the Collateral are true and complete
in all material respects; (f) no financing statement covering any of the
Collateral or Proceeds, and naming any secured party other than Bank, is on
file in any public office; (g) all persons appearing to be obligated on
Rights to Payment and Proceeds have authority and capacity to contract and are
bound as they appear to be; (h) all property subject to

 

 

chattel
paper has been properly registered and filed in compliance with law and to
perfect the interest of Debtor in such property; and (i) all Rights to
Payment and Proceeds comply with all applicable laws concerning form, content
and manner of preparation and execution, including where applicable Federal
Reserve Regulation Z and any State consumer credit laws.

 

6.
COVENANTS OF DEBTOR.

 

6.1
Debtor Agrees in general: (a) to pay Indebtedness secured hereby when due;
(b) to indemnify Bank against all losses, claims, demands, liabilities and
expenses of every kind caused by property subject hereto; (c) to permit
Bank to exercise its powers; (d) to execute and deliver such documents as
Bank deems necessary to create, perfect and continue the security interests
contemplated hereby; (e) not to change its name, and as applicable, its
chief executive office, its principal residence or the jurisdiction in which it
is organized and/or registered without giving Bank prior written notice
thereof; (f) not to change the places where Debtor keeps any Collateral or
Debtor’s records concerning the Collateral and Proceeds without giving Bank
prior written notice of the address to which Debtor is moving same; and (g) to
cooperate with Bank in perfecting all security interests granted herein and in
obtaining such agreements from third parties as Bank deems necessary, proper or
convenient in connection with the preservation, perfection or enforcement of
any of its rights hereunder.

 

6.2
Debtor agrees with regard to the Collateral and Proceeds, unless Bank agrees
otherwise in writing: (a) that Bank is authorized to file financing
statements in the name of Debtor to perfect Bank’s security interest in
Collateral and Proceeds; (b) to insure Inventory and, where applicable,
Rights to Payment with Bank named as loss payee, in form, substance and
amounts, under agreements, against risks and liabilities, and with insurance
companies satisfactory to Bank; (c) not to use any Inventory for any
unlawful purpose or in any way that would void any insurance required to be
carried in connection therewith; (d) not to remove Inventory from Debtor’s
premises except in the ordinary course of Debtor’s business; (e) not to
permit any security interest in or lien on the Collateral or Proceeds,
including without limitation, liens arising from the storage of Inventory,
except in favor of Bank; (f) not to sell, hypothecate or otherwise dispose
of, nor permit the transfer by operation of law of, any of the Collateral or
Proceeds or any interest therein, except sales of Inventory to buyers in the
ordinary course of Debtor’s business; (g) to furnish reports to Bank of
all acquisitions, returns, sales and other dispositions of the Inventory in
such form and detail and at such times as Bank may require; (h) to permit
Bank to inspect the Collateral at any time; (i) to keep, in accordance
with generally accepted accounting principles, complete and accurate records
regarding all Collateral and Proceeds, and to permit Bank to inspect the same
and make copies thereof at any reasonable time; (j) if requested by Bank,
to receive and use reasonable diligence to collect Rights to Payment and
Proceeds, in trust and as the property of Bank, and to immediately endorse as
appropriate and deliver such Rights to Payment and Proceeds to Bank daily in
the exact form in which they are received together with a collection report in
form satisfactory to Bank; (k) not to commingle Rights to Payment,
Proceeds or collections thereunder with other property; (I) to give only
normal allowances and credits and to advise Bank thereof immediately in writing
if they affect any Rights to Payment or Proceeds in any material respect; (m) on
demand, to deliver to Bank returned property resulting from, or payment equal
to, such allowances or credits on any Rights to Payment or Proceeds or to
execute such documents and do such other things as Bank may reasonably request
for the purpose of perfecting, preserving and enforcing its security interest
in such returned property; (n) from time to time, when requested by Bank,
to prepare and deliver a schedule of all Collateral and Proceeds subject to
this Agreement and to assign in writing and deliver to Bank all accounts,
contracts, leases and other chattel paper, instruments, documents and other
evidences thereof; (o) in the event Bank elects to receive payments of
Rights to Payment or Proceeds hereunder, to pay all expenses incurred by Bank
in connection therewith, including expenses of accounting, correspondence,
collection efforts, reporting to account or contract debtors, filing,
recording, record keeping and expenses incidental thereto; and (p) to
provide any service and do any other acts which may be necessary to maintain,
preserve and protect all Collateral and, as appropriate and applicable, to keep
all Collateral in good and saleable condition in accordance with the standards
and practices adhered to generally by users and manufacturers of like property,
and to keep all Collateral and Proceeds free and clear of all defenses, rights of
offset and counterclaims.

 

7.             POWERS OF BANK. Debtor appoints
Bank its true attorney-in-fact to perform any of the following powers, which
are coupled with an interest, are irrevocable until termination of this
Agreement and may be exercised from time to time by Bank’s officers and
employees, or any of them, whether or not Debtor is in default: (a) to
perform any obligation of Debtor hereunder in Debtor’s name or otherwise; (b) to
give notice to account debtors or others of Bank’s rights in the Collateral and
Proceeds, to enforce or forebear from enforcing the same and make extension or
modification agreements with respect thereto; (c) to release persons
liable on Proceeds and to give receipts and acquittances and compromise
disputes in connection therewith; (d) to release or substitute security; (e) to
resort to security in any order; (f) to prepare, execute, file, record or
deliver notes, assignments, schedules,

 

 

designation
statements, financing statements, continuation statements, termination statements,
statements of assignment, applications for registration or like papers to
perfect, preserve or release Bank’s interest in the Collateral and Proceeds; (g) to
receive, open and read mail addressed to Debtor; (h) to take cash,
instruments for the payment of money and other property to which Bank is
entitled; (i) to verify facts concerning the Collateral and Proceeds by
inquiry of obligors thereon, or otherwise, in its own name or a fictitious
name; (j) to endorse, collect, deliver and receive payment under
instruments for the payment of money constituting or relating to Proceeds; (k) to
prepare, adjust, execute, deliver and receive payment under insurance claims,
and to collect and receive payment of and endorse any instrument in payment of
loss or returned premiums or any other insurance refund or return, and to apply
such amounts received by Bank, at Bank’s sole option, toward repayment of the
Indebtedness or replacement of the Collateral; (I) to exercise all rights,
powers and remedies which Debtor would have, but for this Agreement, with
respect to all Collateral and Proceeds subject hereto; (m) to enter onto
Debtor’s premises in inspecting the Collateral; (n) to make withdrawals
from and to close deposit accounts or other accounts with any financial institution,
wherever located, into which Proceeds may have been deposited, and to apply
funds so withdrawn to payment of the Indebtedness; (o) to preserve or
release the interest evidenced by chattel paper to which Bank is entitled
hereunder and to endorse and deliver any evidence of title incidental thereto;
and (p) to do all acts and things and execute all documents in the name of
Debtor or otherwise, deemed by Bank as necessary, proper and convenient in
connection with the preservation, perfection or enforcement of its rights
hereunder.

 

8.             PAYMENT OF PREMIUMS, TAXES,
CHARGES, LIENS AND ASSESSMENTS. Debtor agrees to pay, prior to delinquency, all
insurance premiums, taxes, charges, liens and assessments against the
Collateral and Proceeds, and upon the failure of Debtor to do so, Bank at its
option may pay any of them and shall be the sole judge of the legality or
validity thereof and the amount necessary to discharge the same. Any such
payments made by Bank shall be obligations of Debtor to Bank, due and payable
immediately upon demand, together with interest at a rate determined in
accordance with the provisions of this Agreement, and shall be secured by the
Collateral and Proceeds, subject to all terms and conditions of this Agreement.

 

9.             EVENTS OF DEFAULT. The occurrence
of any of the following shall constitute an “Event of Default” under this
Agreement: (a) any default in the payment or performance of any
obligation, or any defined event of default, under (i) any contract or
instrument evidencing any Indebtedness, or (ii) any other agreement
between Debtor and Bank, including without limitation any loan agreement,
relating to or executed in connection with any Indebtedness; (b) any
representation or warranty made by Debtor herein shall prove to be incorrect,
false or misleading in any material respect when made; (c) Debtor shall
fail to observe or perform any obligation or agreement contained herein; (d) any
impairment of the rights of Bank in any Collateral or Proceeds or any
attachment or like levy on any property of Debtor; and (e) Bank, in good
faith, believes any or all of the Collateral and/or Proceeds to be in danger of
misuse, dissipation, commingling, loss, theft, damage or destruction, or
otherwise in jeopardy or unsatisfactory in character or value.

 

10.           REMEDIES. Upon the occurrence of any
Event of Default, Bank shall have the right to declare immediately due and
payable all or any Indebtedness secured hereby and to terminate any commitments
to make loans or otherwise extend credit to Debtor. Bank shall have all other
rights, powers, privileges and remedies granted to a secured party upon default
under the California Uniform Commerical Code or otherwise provided by law,
including without limitation, the right (a) to contact all persons
obligated to Debtor on any Collateral or Proceeds and to instruct such persons
to deliver all Collateral and/or Proceeds directly to Bank, and (b) to
sell, lease, license or otherwise dispose of any or all Collateral. All rights,
powers, privileges and remedies of Bank shall be cumulative. No delay, failure
or discontinuance of Bank in exercising any right, power, privilege or remedy
hereunder shall affect or operate as a waiver of such right, power, privilege
or remedy; nor shall any single or partial exercise of any such right, power,
privilege or remedy preclude, waive or otherwise affect any other or further
exercise thereof or the exercise of any other right, power, privilege or
remedy. Any waiver, permit, consent or approval of any kind by Bank of any
default hereunder, or any such waiver of any provisions or conditions hereof,
must be in writing and shall be effective only to the extent set forth in
writing. It is agreed that public or private sales or other dispositions, for
cash or on credit, to a wholesaler or retailer or investor, or user of property
of the types subject to this Agreement, or public auctions, are all
commercially reasonable since differences in the prices generally realized in
the different kinds of dispositions are ordinarily offset by the differences in
the costs and credit risks of such dispositions.

 

While
an Event of Default exists: (a) Debtor will deliver to Bank from time to
time, as requested by Bank, current lists of all Collateral and Proceeds; (b) Debtor
will not dispose of any Collateral or Proceeds except on terms approved by
Bank; (c) at Bank’s request, Debtor will assemble and deliver all
Collateral and Proceeds, and books and records pertaining thereto, to Bank at a
reasonably convenient place designated by Bank; and (d) Bank may,

 

 

without
notice to Debtor, enter onto Debtor’s premises and take possession of the
Collateral. With respect to any sale by Bank of any Collateral subject to this
Agreement, Debtor hereby expressly grants to Bank the right to sell such
Collateral using any or all of Debtor’s trademarks, trade names, trade name
rights and/or proprietary labels or marks. Debtor further agrees that Bank
shall have no obligation to process or prepare any Collateral for sale or other
disposition.

 

11.           DISPOSITION OF COLLATERAL AND
PROCEEDS; TRANSFER OF INDEBTEDNESS. In disposing of Collateral hereunder, Bank
may disclaim all warranties of title, possession, quiet enjoyment and the like.
Any proceeds of any disposition of any Collateral or Proceeds, or any part
thereof, may be applied by Bank to the payment of expenses incurred by Bank in
connection with the foregoing, including reasonable attorneys’ fees, and the
balance of such proceeds may be applied by Bank toward the payment of the
Indebtedness in such order of application as Bank may from time to time elect.
Upon the transfer of all or any part of the Indebtedness, Bank may transfer all
or any part of the Collateral or Proceeds and shall be fully discharged
thereafter from all liability and responsibility with respect to any of the
foregoing so transferred, and the transferee shall be vested with all rights
and powers of Bank hereunder with respect to any of the foregoing so
transferred; but with respect to any Collateral or Proceeds not so transferred
Bank shall retain all rights, powers, privileges and remedies herein given.

 

12.           STATUTE OF LIMITATIONS. Until all
Indebtedness shall have been paid in full and all commitments by Bank to extend
credit to Debtor have been terminated, the power of sale or other disposition
and all other rights, powers, privileges and remedies granted to Bank hereunder
shall continue to exist and may be exercised by Bank at any time and from time
to time irrespective of the fact that the Indebtedness or any part thereof may
have become barred by any statute of limitations, or that the personal
liability of Debtor may have ceased, unless such liability shall have ceased
due to the payment in full of all Indebtedness secured hereunder.

 

13.           MISCELLANEOUS. When there is more
than one Debtor named herein: (a) the word “Debtor” shall mean all or any
one or more of them as the context requires; (b) the obligations of each
Debtor hereunder are joint and several; and (c) until all Indebtedness
shall have been paid in full, no Debtor shall have any right of subrogation or
contribution, and each Debtor hereby waives any benefit of or right to
participate in any of the Collateral or Proceeds or any other security now or
hereafter held by Bank. Debtor hereby waives any right to require Bank to (i) proceed
against Debtor or any other person, (ii) marshal assets or proceed against
or exhaust any security from Debtor or any other person, (iii) perform any
obligation of Debtor with respect to any Collateral or Proceeds, and (d) make
any presentment or demand, or give any notice of nonpayment or nonperformance,
protest, notice of protest or notice of dishonor hereunder or in connection
with any Collateral or Proceeds. Debtor further waives any right to direct the
application of payments or security for any Indebtedness of Debtor or
indebtedness of customers of Debtor.

 

14.           NOTICES. All notices, requests and
demands required under this Agreement must be in writing, addressed to Bank at
the address specified in any other loan documents entered into between Debtor
and Bank and to Debtor at the address of its chief executive office (or
principal residence, if applicable) specified below or to such other address as
any party may designate by written notice to each other party, and shall be
deemed to have been given or made as follows: (a) if personally delivered,
upon delivery; (b) if sent by mail, upon the earlier of the date of
receipt or 3 days after deposit in the U. S. mail, first class and postage
prepaid; and (c) if sent by telecopy, upon receipt.

 

15.           COSTS, EXPENSES AND ATTORNEYS’ FEES.
Debtor shall pay to Bank immediately upon demand the full amount of all
payments, advances, charges, costs and expenses, including reasonable attorneys’
fees (to include outside counsel fees and all allocated costs of Bank’s
in-house counsel), expended or incurred by Bank in connection with (a) the
perfection and preservation of the Collateral or Bank’s interest therein, and (b) the
realization, enforcement and exercise of any right, power, privilege or remedy
conferred by this Agreement, whether incurred at the trial or appellate level,
in an arbitration proceeding or otherwise, and including any of the foregoing
incurred in connection with any bankruptcy proceeding (including without
limitation, any adversary proceeding, contested matter or motion brought by
Bank or any other person) relating to Debtor or in any way affecting any of the
Collateral or Bank’s ability to exercise any of its rights or remedies with
respect thereto. All of the foregoing shall be paid by Debtor with interest
from the date of demand until paid in full at a rate per annum equal to the
greater of ten percent (10%) or Bank’s Prime Rate in effect from time to time.

 

16.           SUCCESSORS; ASSIGNS; AMENDMENT. This
Agreement shall be binding upon and inure to the benefit of the heirs,
executors, administrators, legal representatives, successors and assigns of the
parties, and may be amended or modified only in writing signed by Bank and
Debtor.

 

 

17.           OBLIGATIONS OF MARRIED PERSONS. Any
married person who signs this Agreement as Debtor hereby expressly agrees that
recourse may be had against his or her separate property for all his or her
Indebtedness to Bank secured by the Collateral and Proceeds under this
Agreement.

 

18.           SEVERABILITY OF PROVISIONS. If any
provision of this Agreement shall be held to be prohibited by or invalid under
applicable law, such provision shall be ineffective only to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or any remaining provisions of this Agreement.

 

19.           GOVERNING LAW. This Agreement shall
be governed by and construed in accordance with the laws of the State of
California.

 

Debtor
warrants that its chief executive office (or principal residence, if
applicable) is located at the following address: 25552 S.
Butte Avenue, Five Points, CA 93624

 

Debtor
warrants that the Collateral (except goods in transit) is located or domiciled
at the following additional addresses: NONE

 

IN
WITNESS WHEREOF, this Agreement has been duly executed as of December 26, 2008. 

 

S&W
Seed Company

 

 

	
  By:

  	
  /s/
  Harry B. Hansen

  	
   

  
	
   

  	
  Harry
  B. Hansen, Managing Partner

  

 

 

EXHIBIT A 

TO 

UCC FINANCING STATEMENT

 

This
Exhibit A is attached to and made a part of that certain UCC Financing
Statement naming S&W Seed Company as Debtor,
and WELLS FARGO BANK, NATIONAL ASSOCIATION as Secured Party.

 

The
following is hereby incorporated into said UCC Financing Statement as the
description of the collateral subject thereto:

 

All
accounts, chattel paper (whether electronic or tangible), instruments,
promissory notes, documents, general intangibles, payment intangibles,
software, letter of credit rights, health-care insurance receivables and other
rights to payment of every kind now or at any time hereafter arising out of the
business of Debtor, and all goods returned by or repossessed from Debtor’s
customers.

 

All
inventory, raw materials, component parts and embedded software, work in
process and/or materials now or at any time hereafter used or consumed in
Debtor’s business, and all warehouse receipts, bills of lading and other
documents evidencing goods now owned or hereafter acquired by Debtor, and all
goods covered thereby, including all accessions, additions and improvements
thereto and products thereof, wherever located, whether in the possession of
Debtor or any warehouseman, bailee or any other person, or in process of
delivery.

 

All
proceeds of any of the foregoing, including without limitation, all rights to
payment with respect to any insurance, including returned premiums, or any
claim or cause of action relating to any

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