Document:

Exhibit 10.12

 

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

 

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

 

REVOLVING CONVERTIBLE PROMISSORY NOTE

 

	
Issuance Date: July 18, 2013

	
US$2,400,000 

	
 

	
 

	
Effective Date: July 18, 2013

	
 

 

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

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

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

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

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

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

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

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

 

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

 

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

 

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

 

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

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

 

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

 

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

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

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

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

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

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

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

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

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

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

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

(d)           Adjustments to Conversion Price.

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

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

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

 

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

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

 

[-signature page follows-]

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

 

	
 

	
RICEBRAN TECHNOLOGIES

	
 

	
 

	
 

	
By:/s/ J. Dale Belt

	 	
	
 

	
Name: J. Dale Belt

	
 

	
Title: Chief Financial Officer

 

[Signature Page 1 of Revolving Convertible Promissory Note]

CONSENT AND AGREEMENT

 

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

 

	
NUTRACEA, LLC

	
	
 

	
 

	
 

	
By:

	
/s/ J. Dale Belt

	
 

	
Name:

	
J. Dale Belt

	
	
Title:

	
SRB-IP. LLC

	

 

	
SRB-IP. LLC

	
 

	
 

	
 

	
 

	
By:

	
/s/ J. Dale Belt

	
 

	
Name:

	
J. Dale Belt

	
 

	
Title:

	
Secretary

	
 

 

	
SRB-MERM, LLC

	
 

	
 

	
 

	
 

	
By:

	
/s/J. Dale Belt

	
 

	
Name:

	
/s/ J. Dale Belt

	
 

	
Title:

	
Secretary

 

	
SRB-LC, LLC

	
 

	
 

	
 

	
 

	
By:

	
/s/J. Dale Belt

	
 

	
Name:

	
/s/ J. Dale Belt

	
 

	
Title:

	
Secretary

 

	
SRB-MT, LLC

	
 

	
 

	
 

	
 

	
By:

	
/s/J. Dale Belt

	
 

	
Name:

	
/s/ J. Dale Belt

	
 

	
Title:

	
Secretary

 

[Signature Page 2 of Revolving Convertible Promissory Note]

	
SRB-WS, LLC

	
	 		
	
By:

	
/s/J. Dale Belt

	
	
Name:

	
/s/ J. Dale Belt

	
	
Its:

	
Secretary

	
	 		
	
RICEX COMPANY

	
	 		
	
By:

	
/s/J. Dale Belt

	
	
Name:

	
/s/ J. Dale Belt

	
	
Its:

	
Secretary

	
	 		
	
RICEX NUTRIENTS, INC.

	
	 		
	
By:

	
/s/J. Dale Belt

	
	
Name:

	
/s/ J. Dale Belt

	
	
Its:

	
Secretary

	
	 		
	
RICE SCIENCE, LLC

	
	 	
	
By:

	
/s/J. Dale Belt

	
	
Name:

	
/s/ J. Dale Belt

	
	
Its:

	
Secretary

	
	  		
	
RICE RX, LLC

	
	  		
	
By:

	
/s/J. Dale Belt

	
	
Name:

	
/s/ J. Dale Belt

	
	
Its:

	
Secretary

	

 

[Signature Page 3 of Revolving Convertible Promissory Note]

EXHIBIT A

 

NOTICE OF CONVERSION

 

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

 

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

 

	
Conversion Calculations Date

	
 

	
 

	
of Conversion:

	
 

	
 

	
Conversion Price

	
 

	
 

	
Principal Amount and/or Interest to be Converted:

	
 

	
 

	
Number of Common Shares to be Issued:

	
 

	
 

 

		
[HOLDER]

	
 

	
 

	 	 		
		
By:

	
 

	
 

		
Name:

	
 

	
 

		
Title:

	
 

	
 

		
Address:Exhibits 10.1

		

			 

		

		
			Exhibit 10.1
		

		
			 
		

		
			EMPLOYMENT AGREEMENT
		

		
			 
		

		
			THIS EMPLOYMENT AGREEMENT (this “Agreement”)  is made and entered into this May 22, 2013 among Bank of Hampton Roads, Inc., a banking association organized under the laws of the Commonwealth of Virginia, having its principal place of business at 641 Lynnhaven Parkway, Virginia Beach, Virginia 23452 (“BHR” or the “Employer”), Hampton Roads Bankshares, Inc., a Virginia corporation having its principal place of business at 641 Lynnhaven Parkway, Virginia Beach, Virginia 23452 (“HRB”) and Donna W. Richards (the “Executive”).    BHR is a wholly owned subsidiary of HRB.  
		

		
			WITNESSETH:
		

		
			 
		

		
			WHEREAS, the Employer recognizes the Executive’s leadership and contributions to BHR and desires to retain Executive and have the benefit of Executive’s continued loyalty, service and counsel;  and
		

		
			WHEREAS, the Executive and the Employer are entering into this Agreement to set forth and confirm their respective rights and obligations with respect to Executive’s  continued employment by the Employer.
		

		
			NOW, THEREFORE, in consideration of the premises and the mutual covenants contained in this Agreement, the Employer and the Executive, intending to be legally bound hereby, mutually agree as follows:
		

		
			1.        Employment.  
		

		
			(a)      The Employer and Executive agree that Executive shall be employed as President of BHR and shall perform such services for the Employer as may be assigned to Executive by the Employer from time to time in accordance with the terms and conditions set forth in this Agreement.  
		

		
			(b)      The term of this Agreement shall commence on the date hereof (the “Effective Date”) and, subject to Section 5(a), shall expire on the third anniversary of the Effective Date, unless sooner terminated in accordance with the provisions of Section 5.  Executive will not be entitled to any rights or benefits as a result of the expiration of this Agreement.
		

		
			2.        Duties of the Executive.  
		

		
			(a)      The Executive shall serve in the position of President of BHR and perform all duties and services commensurate with that position.  
		

		
			(b)      The Executive shall devote her full time and attention to the discharge of the duties undertaken by her hereunder.  Executive shall comply with all policies, standards and regulations of the Employer now or hereafter promulgated, and shall perform her duties under this Agreement to the 
		

		 

		

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		best of her abilities and in accordance with general business standards of conduct.  
		

		
			(c)      The Executive shall be entitled to vacation during each calendar year in accordance with the vacation policy of the Employer for senior executive officers, to be taken at such time or times as the Executive and the Employer shall mutually determine.  Earned but unused paid time off shall be accrued in accordance with the Employer’s vacation policy.  
		

		
			3.        Compensation.  For all services to be rendered by the Executive under this Agreement, the Employer and the Executive agree as follows:
		

		
			(a)      Base Salary.  The Employer shall pay the Executive a base salary (the “Base Salary”), at an annual rate of $350,000, plus such other compensation as the Employer may, from time to time, determine in its sole discretion.  At such times as determined by the Compensation Committee, as defined below, the Employer shall review the amount of the Executive’s Base Salary, and may increase such Base Salary for the following year to such amount as the Employer may determine in its sole and absolute discretion.  Such Base Salary and other compensation shall be payable in accordance with the Employer’s normal payroll practices as in effect from time to time.
		

		
			(b)      Retention Bonus.  The Executive shall receive a retention bonus as follows within thirty (30) days of the execution of this Agreement:
		

		
			(1)      $50,000, payable in cash; provided, however, that in the event of termination of Executive’s employment within three years of the date such retention bonus is paid Executive shall pay to the Employer an amount equal to $50,000 multiplied by a fraction, the numerator of which is thirty-six less the number of months that have elapsed since such payment and the denominator of which is thirty-six; and provided further, however, the foregoing repayment obligation shall not apply in the event of a termination due to Executive’s death or disability, by Employer other than for Cause, or by Executive for Good Reason,; and
		

		
			(2)      Restricted stock units equal to $50,000 (the “RSUs”), based on the market price of HRB’s common stock on the date of grant.  The RSUs will vest and become nonforfeitable in accordance with the following schedule: 33.33% on the first anniversary of the grant date; 66.67% on the second anniversary of the grant date and 100.00% on the third anniversary of the grant date; provided, however, that in the event of Executive’s death or disability, termination of Executive’s employment by Employer other than for Cause, termination of employment by Executive for Good 
		

		 

		

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		Reason or a Change in Control (as defined in Section 5(g)(2)), all unvested RSUs shall automatically vest.
		

		
			(c)      Incentive Bonus Plans.  The Executive will be eligible to participate in any of the Employer’s long-term or short-term incentive plans on the same terms and conditions and in relative magnitude to other senior executive officers of BHR and HRB, subject to annual bonus performance metrics and other terms and conditions of awards adopted in the sole and absolute discretion of the Compensation Committee of the HRB’s Board of Directors (the “Compensation Committee”) on an annual basis.
		

		
			(d)      Other Benefits.  Subject to any applicable eligibility requirements, from and after the Effective Date and throughout Executive’s employment hereunder, except as otherwise expressly provided in the Agreement, the Executive shall be entitled to participate in all cash and non-cash employee benefit plans maintained by the Employer or HRB for senior executive officers or employees generally, including but not limited to (i) a 401(k) retirement program, (ii) long-term disability, (iii) extended medical leave, (iv) paid-time off and (v) health insurance, dental insurance and life insurance coverage as are provided to the class of employees that includes the Executive.
		

		
			4.        Expenses.  The Employer shall promptly reimburse the Executive for (a) all reasonable expenses the Executive pays or incurs in connection with the performance of the Executive’s duties and responsibilities under this Agreement, upon presentation of expense vouchers or other appropriate documentation for such expenses and (b) all reasonable professional expenses, such as licenses and dues and professional educational expenses, the Executive pays or incurs during her employment hereunder, all of the above in accordance with Employer’s policies with respect thereto.  
		

		
			5.        Termination of Employment; Change in Control.
		

		
			(a)      Notwithstanding the termination of this Agreement or the termination of Executive’s employment for any reason, the parties shall be required to carry out any provisions of this Agreement which contemplate performance by them subsequent to such termination.  In addition, no termination of this Agreement shall affect any liability or other obligation of either party which shall have accrued prior to such termination, including, but not limited to, any liability, loss or damage on account of breach.  No termination of employment shall terminate the obligation of the Employer to make payments of any vested benefits provided hereunder or the obligations of Executive under Section 6 of this Agreement.  The existence of any claim or cause of action of the Executive against the Employer, whether predicated on this Agreement or not, shall not constitute a defense to the enforcement by the Employer of the restrictions, covenants and agreements contained in this Agreement.
		

		

		

		 

		

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		(b)      Executive’s employment hereunder may be terminated by Executive upon thirty (30) days written notice to the Employer or at any time by mutual agreement in writing.  It shall not constitute a breach of this Agreement for the Employer to suspend Executive’s duties and to place Executive on a paid leave during the thirty (30) day notice period.
		

		
			(c)      This Agreement shall terminate upon death of Executive; provided, however, that in such event the Employer shall pay to the estate of Executive the compensation, including salary and accrued but unused paid-time off in accordance with Employer’s policies with respect thereto, which otherwise would be payable to Executive through the end of the  month in which her death occurs.  Such amounts shall be paid at the end of the payroll period that follows the payroll period in which her employment terminates due to death.  Additionally, there shall be paid to the Executive’s estate (i) any bonus or other short term incentive compensation earned, but not yet paid, for any year prior to the year in which her death occurs and (ii) any bonus or other short term incentive compensation for the year in which her death occurs that she would have been eligible to receive if she had lived, multiplied by a fraction, the numerator of which is the number of days in the year that precede the date on which her death occurs and the denominator of which is three hundred sixty-five.
		

		
			Any bonus or other short term incentive compensation payable under this Section 5(c) shall be paid (i) on the date of payment to other employees eligible for bonuses or other short term incentive compensation under the same plan or plans, or, (ii) if no date or time frame for payment is specified in those plans, by March 15 of the calendar year following the calendar year in which the compensation is earned.
		

		
			(d)      (1)    The Employer may terminate Executive’s employment other than for “Cause”, as defined in Section 5(e), at any time upon written notice to Executive, which termination shall be effective immediately.  Executive may resign thirty (30) days after notice to the Employer for “Good Reason”, as hereafter defined.  In the event the Executive’s employment terminates pursuant to this Section 5(d)(1), Executive shall receive, at the end of the payroll period that follows the payroll period in which her employment terminates, her salary earned through the date of termination and accrued but unused paid-time off.  In the event the Executive’s employment terminates pursuant to this Section 5(d)(1), Executive shall also receive the following items on the later of the applicable date set forth below or the 60th day following her termination of employment, provided that Executive signs a release and waiver of claims reasonably satisfactory to the Employer that becomes irrevocable within 60 days of her termination of employment, and provided further that any portion of the premium due to be paid by the Employer during such 60-day period under 
		

		 

		

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		item (iv) below shall be paid by the Employer on the due date whether or not the release and waiver has been signed:
		

		
			(i)      An amount equal to 300% of her current rate of annual salary in effect immediately preceding such termination; and
		

		
			(ii)         Any bonus or other short term incentive compensation earned, but not yet paid, for any year prior to the year in which her employment terminates; and
		

		
			(iii)        Any bonus or other short term incentive compensation for the year in which her employment terminates that she would have been eligible to receive if her employment had not terminated, multiplied by a fraction, the numerator of which is the number of days in the year that precede the date on which she is notified of the termination of her employment and the denominator of which is three hundred sixty-five; and
		

		
			(iv)         If Executive timely elects COBRA coverage, her current benefits under group health and dental plans will continue.  In such case, for the longer of one year or the remainder of the term of this Agreement: (a) Executive will receive such benefits at the rates paid by active participants, and (b) the Employer will continue to pay its portion of such health and dental premiums.  In no event shall such benefits continue beyond the period permitted by COBRA, and periods of coverage under this Agreement shall offset Executive’s period of coverage under COBRA.
		

		
			Any amount due under Section 5(d)(1)(ii) or (iii) shall be paid on (i) the date of payment to other employees eligible for bonuses or other short term incentive compensation under the same plan or plans or, (ii) if no date or time frame for payment is specified in those plans, by March 15 of the calendar year following the calendar year in which the compensation is earned.  
		

		
			If Executive is a “specified employee” under Section 409A on the date of her termination of employment, payment of amounts due under Section 5(d)(1) shall be made six months and one day after the date her employment terminates to the extent required by Section 409A.  
		

		
			(2)      Notwithstanding anything in this Agreement to the contrary, if Executive breaches Section 6 of this Agreement, Executive will not thereafter be entitled to receive any further compensation or benefits pursuant to this Section 5(d)(1).
		

		

		

		 

		

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		                        (3)  For purposes of this Agreement, Good Reason shall mean:
		

		
			(i)      The continued assignment of duties to the Executive by the Employer which result in the Executive having significantly less authority or responsibility than contemplated in Section 2 hereof or ceasing to report directly to the Chief Executive Officer of HRB without her express written consent;
		

		
			(ii)    The relocation of the Executive to any other primary place of employment which might require the Executive to move the Executive’s residence which, for this purpose, includes any reassignment to a place of employment located more than fifty (50) miles from the Executive’s initially assigned place of employment, without the Executive’s express written consent to such relocation; provided, however, this subsection (ii) shall not apply in connection with the relocation of the Executive if the Employer decides to relocate its headquarters; or 
		

		
			(iii)         The Employer’s failure to comply with any material term of this Agreement after being advised in writing of such failure and having been given a reasonable opportunity and period to remedy such failure, if such failure can be remedied.
		

		
			(e)       The Employer shall have the right to terminate Executive’s employment under this Agreement at any time for Cause, which termination shall be effective immediately.  Termination for “Cause” shall mean material failure of the Executive to perform her duties under this Agreement due to the gross negligence or gross misconduct of the Executive, unlawful business conduct, theft, commission of a felony, a material violation of the Employer’s work rules or policies or a breach of Executive’s fiduciary duties.  In the event Executive’s employment under this Agreement is terminated for Cause, Executive shall thereafter have no right to receive compensation or other benefits under this Agreement.
		

		
			(f)      If Executive is suspended and/or temporarily prohibited from participating in the conduct of the Employer’s affairs by a notice served pursuant to the Federal Deposit Insurance Act, the Employer’s obligations under this Agreement shall be suspended as of the date of service unless stayed by appropriate proceedings.  If the charges in the notice are dismissed, the Employer may in its discretion (i) pay Executive all or part of  the compensation withheld while its contract obligations were suspended, and (ii) reinstate (in whole or in part) any of its obligations which were suspended.
		

		
			(g)      (1)  If Executive’s employment is terminated without Cause within one year after a Change in Control shall have occurred or if she resigns for Good Reason within one year after a Change in Control shall have 
		

		 

		

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		occurred, then Executive shall receive, at the end of the payroll period that follows the payroll period in which her employment terminates, her salary earned through the date of termination and accrued but unused paid-time off.  In the event the Executive’s employment terminates pursuant to this Section 5(g)(1), Executive shall also receive the following items:
		

		
			(i)      An amount equal to 300% of her current rate of annual salary in effect immediately preceding such termination; and
		

		
			(ii)         Any bonus or other short term incentive compensation earned, but not yet paid, for any year prior to the year in which her employment terminates; and
		

		
			(iii)        Any bonus or other short term incentive compensation for the year in which her employment terminates that she would have been eligible to receive if her employment had not terminated, multiplied by a fraction, the numerator of which is the number of days in the year that precede the date on which she is notified of the termination of her employment and the denominator of which is three hundred sixty-five; and
		

		
			(iv)         If Executive timely elects COBRA coverage, her current benefits under group health and dental plans will continue.  In such case, for the longer of one year or the remainder of the term of this Agreement: (a) Executive will receive such benefits at the rates paid by active participants, and (b) the Employer will continue to pay its portion of such health and dental premiums.  In no event shall such benefits continue beyond the period permitted by COBRA, and periods of coverage under this Agreement shall offset Executive’s period of coverage under COBRA.
		

		
			Any amount due under Section 5(g)(1)(i) shall be paid within thirty (30) days after the date her employment terminates.  Any amount due under Section 5(g)(1)(ii) or (iii) shall be paid on (i) the date of payment to other employees eligible for bonuses or other short term incentive compensation under the same plan or plans or, (ii) if no date or time frame for payment is specified in those plans, by March 15 of the calendar year following the calendar year in which the compensation is earned.  If Executive is a “specified employee” under Section 409A on the date of her termination of employment, payment shall be made six months and one day after the date her employment terminates to the extent required by Section 409A.  Payment under this Section 5(g)(1) shall be in lieu of any amount that it is or might be due under Section 5(d).
		

		
			(2)    For purposes of this Agreement, “Change in Control” is defined as the date that (i) any one person, or more than one person, acting as a group, acquires ownership of stock of HRB that, together with 
		

		 

		

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		stock held by such person or group constitutes more than 50% of the total fair market value or total voting power of the stock of HRB, (b) during any period of twelve consecutive months, individuals who at the beginning of such period constituted the Board of Directors of HRB (the “Board”) and any new directors, whose election by the Board or nomination for election by the HRB’s stockholders was approved by a vote of at least three-fourths (3/4ths) of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority of the Board, or (c) during any period of twelve consecutive months, (i) any one person, or more than one person, acting as a group, acquires ownership of stock of HRB that, together with stock held by such person or group constitutes more than 30% of the total voting power of the stock of HRB, and (ii) individuals who at the beginning of such period constituted the Board cease in connection with such 30% change in voting stock ownership, cease to constitute a majority of the Board.  For purposes of this Section, “group” shall have the meaning set forth in Treasury Regulation Section 1.409A-3(i)(5), or any successor thereto in effect at the time a determination of whether a Change in Control has occurred is being made.
		

		
			(3)      It is the intention of the parties that no payment be made or benefit provided to Executive pursuant to this Agreement that would constitute an “excess parachute payment” within the meaning of Section 280G of the Code and any regulations thereunder, thereby resulting in a loss of an income tax deduction by the Employer or the imposition of an excise tax on Executive under Section 4999 of the Code.  If the independent accountants serving as auditors for the Employer on the date of a Change in  Control (or any other accounting firm designated by the Employer) determine that some or all of  the payments or benefits scheduled under this Agreement, as well as any other payments or benefits on a Change in  Control, would be nondeductible by the Company under Section 280G of  the Code, then the payments scheduled under this Agreement will be reduced to one dollar less than the maximum amount which may be paid without causing any such payment or benefit to be nondeductible.  The determination made as to the reduction of benefits or payments required hereunder by the independent accountants shall be binding on the parties.  Executive shall have the right to designate within a reasonable period, which payments or benefits will be reduced provided, however, that if no direction is received from Executive, the Employer shall implement the reductions in its discretion; provided, however, that no reduction shall be permitted that results in a deferral prohibited by Section 409A.
		

		

		

		 

		

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		(4)      Notwithstanding anything in this Agreement to the contrary, if Executive breaches Section  6 of this Agreement, Executive will not thereafter be entitled to receive any further compensation or benefits pursuant to this Section 5(g)(1).
		

		
			(h)      Notwithstanding anything contained in this Section 5, the Employer and HRB shall not be obligated to make any payment or provide any benefit, pursuant to this Section 5 if either HRB or BHR is prohibited from making any “golden parachute payments” (as defined in 12 C.F.R. 359.1) to the Executive, unless the Board of Governors of the Federal Reserve System, or other appropriate Federal banking agency, with the written concurrence of the Federal Deposit Insurance Corporation, if required, determines that such payments and benefits, or portions thereof, under Section 5 are permissible after a written request is filed in accordance with 12 C.F.R. 359.6 to provide such payments and benefits.  The Employer  will use its reasonable good faith efforts to prepare and file such written request in a timely manner.  The Executive acknowledges that HRB and BHR, as of the date of this Agreement, are considered to be in a “troubled condition” and are subject to the limitations on “golden parachute payments” set forth in 12 C.F.R. part 359.  If and when HRB and BHR are no longer considered to be in a “troubled condition” or otherwise subject to the restrictions of this subsection, the Employer shall, upon the request of the Executive, ratify and re-affirm the Agreement in writing.
		

		
			6.        Confidential Information.  The Executive understands that in the course of the Executive’s employment by the Employer the Executive will receive confidential information concerning the business of BHR and HRB and that the Employer desires to protect the confidentiality of such information.  The Executive agrees that the Executive will not at any time during or after the period of the Executive’s employment by the Employer reveal to anyone outside the Employer, or use for the Executive’s own benefit, any such information that has been designated as confidential by the BHR or HRB or that the Executive understood to be confidential without prior specific written authorization by the Employer.  Upon termination of this Agreement, and upon the request of the Employer, the Executive shall promptly deliver to the Employer any and all written or electronic materials, records and documents, including all copies of this Agreement, made by the Executive or coming into the Executive’s possession during her employment hereunder and that the Executive retained containing or concerning confidential information of BHR or HRB and all other written or electronic materials furnished to and retained by the Executive by the Employer for the Executive’s use during her employment, excluding all copies of this Agreement, whether of a confidential nature or otherwise. 
		

		
			7.        Representation and Warranty of the Executive.  The Executive represents and warrants to the Employer that the Executive is not under any obligation, contractual or otherwise, to any other firm or corporation, which would prevent the Executive from entering into the employ of the Employer under this 
		

		 

		

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		Agreement or prevent the Executive from performing the terms of this Agreement.  
		

		
			8.        Regulatory Compliance.  Notwithstanding anything contained in this Agreement to the contrary, it is understood and agreed that the Employer (or any of its successors in interest) shall not be obligated to make any payment, accrue any obligation for, or take any action under this Agreement if:
		

		
			(a)      such payment or action is prohibited by any governmental agency having jurisdiction over HRB or any of its subsidiaries (hereinafter referred to as “Regulatory Authority”) because HRB or any of its subsidiaries is declared by such Regulatory Authority to be insolvent, in default or operating in an unsafe or unsound matter; or
		

		
			(b)      such payment or action (i) would be prohibited by or would violate any provision of state or federal law applicable to BHR or HRB, including, without limitation, the Emergency Economic Stabilization Act of 2008 and the Federal Deposit Insurance Act, as either is now in effect or hereafter amended, (ii) would be prohibited by or would violate any applicable rules, regulations, orders or statements of policy, whether now existing or hereafter promulgated, of any Regulatory Authority, or (iii) otherwise would be prohibited by any Regulatory Authority.
		

		
			The Employer shall, upon the request of the Executive, ratify and re-affirm the Agreement in writing if, when and each time any of the following occurs: (i) HRB and BHR are no longer subject to the Emergency Economic Stabilization Act of 2008; (ii) HRB and BHR are no longer considered to be in a “troubled condition” or otherwise subject to the restrictions of Section 5(h); or (iii) any other condition, applicable provision of state or federal law or any applicable rules, regulations, orders or statements of policy that would prohibit any payment or action pursuant to this Section 8 ceases to apply to HRB and BHR. 
		

		
			 
		

		
			9.        Clawback.  Notwithstanding anything contained in this Agreement to the contrary, Executive agrees that any payment under this Agreement will be subject to any clawback or recovery policy of Employer as may be adopted from time to time or as may be required to be made pursuant to law, government regulation, order, or stock exchange listing requirement applicable to BHR or HRB.
		

		
			10.      Entire Agreement; Amendment.  This Agreement contains the entire agreement between BHR, HRB and the Executive with respect to the subject matter of this Agreement, and this Agreement may not be amended, waived, changed, modified or discharged except by an instrument in writing executed by BHR, HRB and the Executive.
		

		
			11.      Assignability.  The services of the Executive under this Agreement are personal in nature, and the Employer may not assign this Agreement nor the rights or obligations of the Employer under this Agreement, whether by operation of law or 
		

		 

		

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		otherwise, without the Executive’s prior written consent.  This Agreement shall be binding upon, and inure to the benefit of, the Employer and its permitted successors and assigns under this Agreement.  The Executive may not assign this Agreement, but the Executive’s benefits under this Agreement shall inure to the benefit of the Executive’s heirs, executors, administrators and legal representatives to the extent this Agreement expressly provides.
		

		
			12.      Notice.  Any notice that may be given under this Agreement shall be in writing and be deemed given when hand delivered and acknowledged or, if mailed, one day after mailing by registered or certified mail, return receipt requested, or if delivered by an overnight delivery service, one day after the notice is delivered to such service, to any party to this Agreement at its respective address stated above, or at such other address as any party may by similar notice designate.
		

		
			13.      Specific Performance.  The parties agree that irreparable damage would occur in the event that any of the provisions of Section  6 of this Agreement were not performed in accordance with their specific terms or were otherwise breached.  The parties accordingly agree that each of the parties to this Agreement shall be entitled to an injunction or injunctions to prevent breaches of Section 6 of this Agreement and to enforce specifically the terms and provisions of Section 6 of this Agreement, and that such injunctive relief shall be in addition to any other remedy to which any party is entitled at law or in equity.
		

		
			14.      No Third Party Beneficiaries.  Nothing in this Agreement, express or implied, is intended to confer upon any person or entity other than BHR, HRB and the Executive and the heirs, executors, administrators and personal representatives of the Executive any rights or remedies of any nature under or by reason of this Agreement.
		

		
			15.      Successor Liability.  The Employer shall require any subsequent successor, whether direct or indirect, by purchase, merger, consolidation or otherwise, to all or substantially all of the business or assets of the Employer to assume expressly and agree to perform this Agreement in the same manner and to the same extent that the Employer would be required to perform it if no such succession had taken place.
		

		
			16.      Mitigation.  The Executive shall not be required to mitigate the amount of any payment provided for in this Agreement by seeking other employment or otherwise, nor shall the amount of any payment or benefit provided for in this Agreement be reduced by any compensation earned by the Executive as the result of employment by another employer or by retirement benefits payable after the termination of this Agreement, except that the Employer shall not be required to provide the Executive and the Executive’s eligible dependents with medical insurance coverage as long as the Executive and the Executive’s eligible dependents are receiving comparable medical insurance coverage from another employer.
		

		

		

		 

		

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		17.      Waiver of Breach.  The failure at any time to enforce or exercise any right under any of the provisions of this Agreement or to require at any time performance by the other parties of any of the provisions of this Agreement shall in no way be construed to be a waiver of such provisions or to affect either the validity of this Agreement or any part of this Agreement, or the right of any party hereafter to enforce or exercise its rights under each and every provision in accordance with the terms of this Agreement.
		

		
			18.      No Attachment.  Except as required by law, no right to receive payments under this Agreement shall be subject to anticipation, commutation, alienation, sale, assignment, encumbrance, charge, pledge or hypothecation or to execution, attachment, levy or similar process or assignment by operation of law, and any attempt, voluntary or involuntary, to effect any such action shall be null, void and of no effect; provided, however, that nothing in this Section 18 shall preclude the assumption of such rights by executors, administrators or other legal representatives of the Executive or the Executive's estate and their assigning any rights under this Agreement to the person or persons entitled hereto.
		

		
			19.      Severability.  The invalidity or unenforceability of any term, phrase, clause, paragraph, section, restriction, covenant, agreement or other provision of this Agreement shall in no way affect the validity or enforceability of any other provision, or any part of this Agreement, but this Agreement shall be construed as if such invalid or unenforceable term, phrase, clause, paragraph, section, restriction, covenant, agreement or other provision had never been contained in this Agreement unless the deletion of such term, phrase, clause, paragraph, section, restriction, covenant, agreement or other provision would result in such a material change as to cause the covenants and agreements contained in this Agreement to be unreasonable or would materially and adversely frustrate the objectives of the parties as expressed in this Agreement.
		

		
			20.      Survival of Benefits.  Any provision of this Agreement that provides a benefit to the Executive and that by the express terms of this Agreement does not terminate upon the expiration of her employment hereunder shall survive the expiration the term of her employment and shall remain binding upon the Employer until such time as such benefits are paid in full to the Executive or the Executive’s estate.
		

		
			21.      Construction.  This Agreement shall be governed by and construed in accordance with the internal laws of the Commonwealth of Virginia, to the extent not inconsistent with federal law, without giving effect to principles of conflict of laws.  All headings in this Agreement have been inserted solely for convenience of reference only, are not to be considered a part of this Agreement and shall not affect the interpretation of any of the provisions of this Agreement.
		

		
			22.      Jury Waiver. Employer and Executive agree that in any litigation action or proceeding arising out of or relating to this Agreement or Executive’s employment with Employer, trial shall be in a court of competent jurisdiction without a jury.  Employer and Executive irrevocably waive any right each may 
		

		 

		

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		have to a jury trial and a copy of this Agreement may be introduced as written evidence of the waiver of the right to trial by jury.  Employer has not made and Executive has not relied on, any oral representation regarding the enforceability of this provision.  Employer and Executive have read and understand the effect of this jury waiver provision.
		

		
			23.      Venue. Employer and Executive hereby expressly consent to be subject to the jurisdiction of the Commonwealth of Virginia to determine any disputes regarding this Agreement and further agree that the exclusive venue for any such dispute shall be in Norfolk, Virginia.  Employer and Executive agree to accept the jurisdiction of any such court and each waives any claim and warrants that he or it will not argue or contend that any such court does not have jurisdiction, is not an appropriate forum or venue or that such a forum is inconvenient.
		

		
			IN WITNESS WHEREOF, each of HRB, BHR and the Executive have executed this Agreement as of the date first written above.
		

			
					
						 

					
						 

					
						_____________

					
						 

					
						 

					
						 

					
						 

					
						_____________

					
						 

					
						 

					
						 

					
						s__________________

					
						 

					
						 

					
						 

				
	
					
						HAMPTON ROADS BANKSHARES, INC.

					
						 

					
						 

					
						By:  /s/ Douglas J. Glenn_____________

					
						 

					
						THE BANK OF HAMPTON ROADS

					
						 

					
						 

					
						By:  /s/ Douglas J. Glenn_____________

					
						 

					
						 

					
						 

					
						/s/ Donna W. Richards__________________

					
						Donna W. Richards

					
						 

				
	
					
						 

				

		
			 
		

		
			 
		

		
			20900439_10 
		

		 

		

			13

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"}]]