UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________

FORM 8-K
___________________

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): May 12, 2015
___________________

RICEBRAN TECHNOLOGIES
(Exact Name of Registrant as Specified in Charter)
___________________

California
0-32565
87-0673375
(State or other jurisdiction of incorporation)
(Commission File Number)
(IRS Employer Identification No.)

6720 N. Scottsdale Road, Suite 390
Scottsdale, AZ
85253
(Address of Principal Executive Offices)
(Zip Code)

Registrant’s telephone number, including area code: (602) 522-3000

(Former name or Former Address, if Changed Since Last Report.)
___________________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 
Section 1 – Registrant’s Business and Operations

Item 1.01 Entering into a Material Definitive Agreement

Senior Secured Revolving Credit Facility Agreement

Effective May 12, 2015, RiceBran Technologies (the "Company"), as borrower, entered into a Loan, Guarantor and Security Agreement with Full Circle Capital Corporation as agent and lender ("Lender") and certain of Company’s subsidiaries (the “Subsidiary Guarantors”) as joint and several guarantors (“Credit Agreement”), pursuant to which Company was extended a senior secured credit facility comprised of a $3,500,000 revolving loan and an initial $2,500,000 term loan, which term loan can be increased by up to $2,000,000 within 24 months. The funds will be used for general corporate purposes and to provide working capital to facilitate future growth. Under the Credit Agreement, the Company may borrow under the revolving loan up to the lesser of the Borrowing Base (as defined in the Credit Agreement) and the revolving loan commitment of $3,500,000. The loan matures on June 1, 2018, subject to two one-year maturity extensions. This credit facility is subject to certain financial and non-financial covenants.

The loan bears interest at a variable interest rate based on LIBOR, with a 0.75% floor and 1.25% cap, plus 10.75% per annum, and the Company will pay certain fees, as set forth in the Credit Agreement. As part of the agreement, the Lender received warrants to purchase a total of 300,000 shares of Company’s common stock at an exercise price per share of $5.25, exercisable over a five-year term.

The loan is guaranteed by the Subsidiary Guarantors and is secured by substantially all of the assets of the Company and Subsidiary Guarantors other than fifty percent of the Company’s interest in RBT-Pro, LLC and Nutra SA, LLC.

The Credit Agreement imposes certain restrictions on the Company and Guarantors, including on its ability to (i) incur indebtedness, (ii) incur liens, (iii) make investments, (iv) permit a Change in Control (as defined in the Credit Agreement) or dispose of all or substantially all of its assets, (v) make capital expenditures not in the ordinary course of its business, (vi) issue or distribute capital stock, (vii) make distributions to its shareholders, (viii) engage in any line of business other than the business engaged in on the date of the Credit Agreement and businesses reasonably related thereto, and (ix) enter into transactions with any affiliates. Each of these restrictions is subject to certain exceptions, as specified in the Credit Agreement.

The loan may be accelerated upon the occurrence and during the continuation of a Default (as defined in the Credit Agreement).

Amended Note and Warrant Purchase Agreement

On May 12, 2015, the Company entered into an Amendment to Loan Documents with certain investors under the Note and Warrant Purchase Agreement, originally dated January 17, 2012, as amended thereafter (“ Amendment ”) . Pursuant to the Amendment, the terms of the promissory notes held by electing investors extend the maturity dates from July 31, 2015 to May 31, 2018, and change the interest rate from 10% per annum to an annual interest rate of Base Rate (determined as a function of LIBOR and as defined in the Amendment) plus 11%. Subordinated note holders representing approximately 97% of the principal due have agreed to the amendment to their notes. These participating noteholders will receive warrants to acquire approximately 289,670 shares of common stock in the aggregate, which will be split pro rata among them based upon the principal amounts of their promissory notes. Each participating holder also signed a subordination agreement, pursuant to which they subordinated their security interest to Senior Lender. Further, the participating investors and the Company enter into a Third Amended and Restated Security Agreement, which secured the notes under the Note and Warrant Purchase Agreement, subordinate to Senior Lender.
 
The foregoing is qualified in its entirety by reference to the agreements and instruments that are filed as Exhibits hereto.

Section 2 – Financial Information

Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information set forth above in Item 1.01 is incorporated by reference.

Section 3 – Financial Information

Item 3.02. Unregistered Sales of Equity Securities.

The information set forth above in Item 1.01 is incorporated by reference.

Item 3.03. Material Modification to Rights of Security Holders.

The information set forth above in Item 1.01 is incorporated by reference.

Section 9 – Financial Statement and Exhibits

Item 9.01. Financial Statements and Exhibits

(d) Exhibits

10.1            Loan, Guarantor and Security Agreement with Full Circle Capital Corporation, dated as of May 12, 2015 by and among RiceBran Technologies, NutraCea, LLC, Rice Rx, LLC, Rice Science LLC, SRB-MERM, LLC, SRB-LC, LLC, SRB-MT, LLC, SRB-WS, LLC SRB-IP, LLC, Healthy Natural, Inc., The RiceX Company and Full Circle Capital Corporation.

10.2            Term Loan Note, dated as of May 12, 2015, issued by RiceBran Technologies to Full Circle Capital Corporation.

10.3             Revolving Loan Note, dated as of May 12, 2015, issued by RiceBran Technologies to Full Circle Capital Corporation.

10.4            Intellectual Property Security Agreement , dated as of May 12, 2015 by and among RiceBran Technologies, NutraCea, LLC, Rice Rx, LLC, Rice Science LLC, SRB-MERM, LLC, SRB-LC, LLC, SRB-MT, LLC, SRB-WS, LLC SRB-IP, LLC, Healthy Natural, Inc., The RiceX Company, and Full Circle Capital Corporation.
 
10.5            Pledge Agreement dated as of May 12, 2015, by and among RiceBran Technologies and Full Circle Capital Corporation.

10.6            Lender Warrant dated as of May 12, 2015.

10.7            Subordination Agreement, dated as of May 12, 2015 by and among, certain subordinated note and warrant holders and Full Circle Capital Corporation.

10.8            Amendment to Loan Documents, dated as of May 12, 2015 by and among, RiceBran Technologies and certain subordinated note and warrant holders listed therein.

10.9            Third Amended and Restated Security Agreement, dated as of May 12, 2015, by and among, RiceBran Technologies and certain subordinated note and warrant holders listed therein

99.1            Press Release
 
SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 
RICEBRAN TECHNOLOGIES
     
Date: May 14, 2015
By:
/s/ J. Dale Belt
   
Jerry Dale Belt
   
Chief Financial Officer
   
(Duly Authorized Officer)

 
Exhibit 10.1
 
LOAN, GUARANTY AND SECURITY AGREEMENT

Dated as of May 12, 2015

Among

RICEBRAN TECHNOLOGIES

(Borrower)

The Guarantors

and

FULL CIRCLE CAPITAL CORPORATION

(As Agent and as Lender)
 
TABLE OF CONTENTS

1.
DEFINITIONS.
1
 
2.
BORROWING.
12
 
3.
INTEREST AND FEES.
17
 
4.
REPRESENTATIONS AND WARRANTIES OF GRANTORS
18
 
5.
COLLATERAL.
21
 
6.
FINANCIAL COVENANTS.
22
 
7.
COLLATERAL COVENANTS.
22
 
8.
NEGATIVE COVENANTS.
25
 
9.
REPORTING AND INFORMATION.
27
 
10.
INSPECTION RIGHTS; EXPENSES; ETC.
30
 
11.
RIGHTS OF SETOFF, APPLICATION OF PAYMENTS, ETC.
30
 
12.
ATTORNEY-IN-FACT
30
 
13.
DEFAULTS AND REMEDIES.
31
 
14.
INDEMNIFICATION.
34
 
15.
GUARANTY.
34
 
16.
GENERAL PROVISIONS.
40
 
17.
AGENT.
48
 
Attachments:

Schedule

Exhibit A – Form of Borrowing Base Certificate
Exhibit B – Form of Compliance Certificate
 
LOAN, GUARANTY AND SECURITY AGREEMENT

This LOAN, GUARANTY AND SECURITY AGREEMENT (this “ Agreement ”) is entered into as of May 12, 2015 between RiceBran Technologies , a California corporation, (“ Borrower ”), NutraCea, LLC (“ NutraCea ”), Rice Rx, LLC (“ Rice ”), Rice Science LLC (“ Rice Science ”), SRB-MERM, LLC (“ MERM ”), SRB-LC, LLC (“ LC ”), SRB-MT, LLC (“ MT ”), SRB-WS, LLC (“ WS ”) SRB-IP, LLC (“ IP ”), each of the foregoing a Delaware limited liability company, Healthy Natural, Inc. , a Nevada corporation (“ H&N ”), The   RiceX Company , a Delaware corporation, (“ RiceX ”) and RiceX Nutrients, Inc. , a Montana corporation (“ Nutrients ,” and together with NutraCea, Rice, Rice Science, MERM, LC, MT, WS, IP, H&N and RiceX, each a  “ Guarantor ” and collectively, the “ Guarantors ”, and Borrower and Guarantors are collectively referred to as the “ Grantors” ) and Full Circle Capital Corporation, a Maryland corporation (" Agent " and a “ Lender ”).

RECITALS:

WHEREAS, the Grantors have requested that Lenders provide Borrower with a secured lending facility; and

WHEREAS, the Grantors acknowledge that the proceeds of the Term Loan and Revolving Loan made hereunder to the Borrower will, directly and indirectly, materially benefit Borrower and each Grantor; and

WHEREAS, Lenders are willing to provide a secured lending facility to Borrower on the terms set forth in this Agreement.

NOW, THEREFORE, Borrower, Agent and Lenders hereby agree as follows:

1.               Definitions .   For purposes of this Agreement:
 
“ Accounts ” means all presently existing or hereafter arising accounts receivable due to any Grantor (including medical and health-care-insurance receivables), book debts, notes, drafts and acceptances and other forms of obligations now or hereafter owing to any Grantor, whether or not arising from the sale or lease of goods or the rendition of services by any Grantor (including any obligation that might be characterized as an account, contract right, general intangible or chattel paper under the UCC), all of each Grantor’s rights in, to and under all purchase orders now or hereafter received by such Grantor for goods and services, all proceeds from the sale of Inventory, all monies due or to become due to any Grantor under all contracts for the sale or lease of goods or the rendition of services by such Grantor (whether or not yet earned) (including the right to receive the proceeds of said purchase orders and contracts), all collateral security and guarantees of any kind given by any Loan Party with respect to any of the foregoing, all amounts payable to any Grantor under any insurance policy and all goods returned to or reclaimed by any Grantor that correspond to any of the foregoing.
 
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“ Adjusted EBITDA ” means, for any period, EBITDA plus   (i) share based compensation expense (stock option grants and stock grants), (ii) gain or loss for sale of fixed assets, (iii) losses from impairment of long lived assets, (iv) financing expenses related to debt issuances with derivative rights, (v) losses from extinguishment of debt, (vi) foreign currency gains and losses, (vii) derivative warrant liability expense or income, and (viii) non-recurring severance payments, provided that such non-recurring severance payments do not exceed $50,000, plus any other items or amounts agreed to by Agent in its sole discretion (“ Agent Adjustments ”).  Adjusted EBITDA shall be calculated on a trailing twelve month basis. For any period ending on or before June 30, 2016, Adjusted EBITDA shall be annualized for the period commencing as of July 1, 2015 to the date of measurement. Adjusted EBITDA shall exclude Borrower’s Brazil segment.

“ Affiliate ” means, with respect to a Person, (a) any family member, executive officer or director of such Person, and (b) any Person (i) that, directly or indirectly, through one or more intermediaries, controls, or is controlled by, or is under common control with, such given Person, (ii) that, directly or indirectly beneficially owns or holds 10% or more of any class of voting stock, membership interests, partnership interests or other interest of such Person or any subsidiary of such Person, or (iii) 10% or more of the voting stock, membership interests, partnership interests or other interest of which is directly or indirectly beneficially owned or held by such Person or a subsidiary of such Person.  The term “control” means the possession of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting stock, membership interests, partnership interests or other interest, by con­tract or otherwise.

“ Borrower ” has the meaning set forth in the preamble hereto.

“ Borrower Pledge Agreement ” means the agreement dated as of the date hereof executed by Borrower with respect to the equity of its wholly-owned subsidiaries and 50% of its equity interest in Nutra SA, LLC, a Delaware limited liability company (“ Nutra ”).

“ Borrowing Base ” has the meaning set forth in Item 1 of the Schedule .
 
“ Borrowing Base Certificate ” means the certificate, substantially in the form of Exhibit A , with appropriate insertions, to be submitted to Lenders by Borrower pursuant to this Agreement and certified as true and correct in all material respects by the Chief Executive Officer or the Chief Financial Officer of Borrower.

“ Business Day ” means any day excluding Saturday, Sunday, and any day which is a legal holiday under the laws of the State of New York or which is a day on which a Lender is otherwise closed for transacting business with the public.

" Capital Expenditures " mean with respect to any Person, the aggregate of all expenditures by such Person for the acquisition or leasing (pursuant to a capital lease) of fixed or capital assets, software or additions to Equipment (including replacements, capitalized repairs and improvements) which are required to be capitalized under GAAP on a balance sheet of such Person.
 
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“ Change of Control ” means the occurrence of one or more of the following events: (1) the acquisition after the date of this Agreement, directly or indirectly, by any Person or group (within the meaning of Sections 13(d)(3) of the Securities Exchange Act of 1934, as amended) of the beneficial ownership of securities of Borrower possessing more than 20% of the total combined voting power of all outstanding securities of Borrower; (2) individuals who on the date hereof constitute the Board of Directors of the Borrower (together with any new directors whose election by the Board of Directors or whose nomination for election by the Borrower’s stockholders was approved by a vote of at least a majority of the members of the Board of Directors then in office who were either members of the Board of Directors on the date hereof or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the members of the Board of Directors then in office; or (3) the sale, transfer or other disposition (in one transaction or a series of related transactions) of all or substantially all of the assets of Borrower.

“ Closing Date ” means the date as of which this Agreement is dated.

“ Collateral ” has the meaning set forth in Section 5(a) .

“ Customer ” means any customer of any Grantor.

“ Default ” has the meaning set forth in Section 13(a) .

" EBITDA ” shall equal the Loan Parties’ consolidated net income (excluding extraordinary gains or losses) before provision for interest expense, taxes, depreciation and amortization.

“ Eligible Accounts ” means those Accounts arising from the sale of Inventory, sale of Extruders, or performance of services in the ordinary course of any Borrower's business, net of all credits and rebates; provided , however , that Eligible Accounts shall not include the following:

(a)             any Account which has remained unpaid for more than the number of days specified in Item 2(a) of the Schedule ;
 
(b)             Accounts with respect to which the Customer is an Affiliate of a Grantor;

(c)              Accounts with respect to which services or goods are placed on consignment, guaranteed sale, or other terms by reason of which the payment by the Customer may be conditional;

(d)             Accounts with respect to which the Customer (i) does not maintain its chief executive office in the United States, or (ii) is not organized under the laws of the United States of America or any state thereof; or (iii) is the government of any foreign country or of any state, province, municipality, or other political subdivision thereof; except to the extent that such Account is secured or payable by a letter of credit satisfactory to Agent and Lenders in their discretion;

(e)             Accounts as to which the perfection, enforceability, or validity of Agent’s Collateral or security interest in such Account, or Agent’s right or ability to obtain direct payment to Lenders of the proceeds of such Account, is governed by any federal or state statutory requirements other than those of the Uniform Commercial Code, including any Account subject to the Federal Assignment of Claims Act of 1940; provided , however , that an Account shall not be deemed ineligible by reason of this clause (e) if Borrower has completed all of the steps necessary, in the discretion of Agent, to comply with the Federal Assignment of Claims Act of 1940 with respect to such Account;
 
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(f)              Accounts which may be subject to any offset, recoupment or dispute by the Customer, whether as the result of goods sold or services rendered by the Customer to any Grantor, any contractual arrangement between the Customer and such Grantor (including any lease) or otherwise, but only to the extent of any such offset, recoupment or dispute, as demonstrated by a report prepared by Borrower in form and substance satisfactory to Agent;

(g)             all of the Accounts owed by a Customer if the percentage of the aggregate outstanding dollar amount of such Accounts owed by such Customer not considered as Eligible Accounts under clause (a) above, determined as a percentage of all Accounts, is equal to or greater than the Cross Aging Percentage specified in Item 2(b) of the Schedule ;

(h)             Accounts for which services have not yet been rendered to the Customer or the goods sold have not yet been delivered to the Customer (commonly referred to as “pre-billed accounts”);

(i)               Accounts owed by a Customer not previously approved in writing by Lenders where the dollar value for the aggregate amount of Accounts owed by such Customer is greater than the percentage of any Grantor’s Eligible Accounts specified in Item 2(c) of the Schedule , but only to the extent of such excess;

(j)               any Account with respect to all or part of which a check, promissory note, draft, trade acceptance, or other instrument for the payment of money has been received, presented for payment, and returned uncollected for any reason;

(k)             any Account with respect to which any Grantor has extended the time for payment other than in the ordinary course of its business without the consent of Lenders;

(l)               any Account with respect to which any one or more of the following events has occurred to the Customer on such Account:  death or judicial declaration of incompetency of a Customer who is an individual; the filing by or against the Customer of a request or petition for liquidation, reorganization, arrangement, adjustment of debts, adjudication as a bankrupt, winding-up, or other relief under the bankruptcy, insolvency, or similar laws of the United States, any state or territory thereof, or any foreign jurisdiction, now or hereafter in effect; the making of any general assignment by the Customer for the benefit of creditors; the appointment of a receiver or trustee for the Customer or for any of the assets of the Customer, including, without limitation, the appointment of or taking possession by a “custodian,” as defined in the Bankruptcy Code; the institution by or against the Customer of any other type of insolvency proceeding (under the bankruptcy laws of the United States or otherwise) or of any formal or informal proceeding for the dissolution or liquidation of, settlement of claims against, or winding up of affairs of, the Customer; the sale, assignment, or transfer of all or any material part of the assets of the Customer; the nonpayment generally by the Customer of its debts as they become due; or the cessation of the business of the Customer as a going concern;

(m)            any Account which arises out of finance or similar charges;
 
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(n)             any Account in which Agent does not have a duly perfected, first priority security interest, subject to no other Lien other than Permitted Liens;

(o)             any Account which arises under a contract or arrangement covered by a performance or surety bond on behalf of any Grantor, unless the Person providing such performance or surety bond has delivered a reasonably acceptable Lien waiver to Agent; or

(p)             any Account which is evidenced by a note, draft, trade acceptance, or other instrument for the payment of money where such instrument, document, chattel paper, note, draft, trade acceptance or other instrument has not been endorsed and delivered by any Grantor to Agent.

(q)             Those Accounts where Agent, at Agent’s reasonable discretion, has notified Borrower that such Account or Customer is not acceptable to Agent.

(r)              any Account which arises from the sale of Extruders in excess of $250,000 in the aggregate at any time.

“ Eligible Inventory ” means and includes that Inventory (other than packaging materials, labels, supplies and Extruders) of Grantors located in the continental United States.  Without limiting the generality of the foregoing, no Inventory shall be Eligible Inventory unless:

(a)             it is raw materials or finished goods scheduled;

(b)             at all times it strictly complies with all of Grantors’ warranties, covenants and representations to Lender set forth in Section 4(b) hereof;

(c)             it is in good, new and salable condition and has not been returned by any Customer;

(d)             it is not slow moving, obsolete or unmerchantable, in Agent’s discretion;

(e)             it is not within 90 days of its stated expiration or “best before” date;

(f)              it meets all standards imposed by any governmental agency or authority such that any Customer that is a governmental agency or authority would have no grounds to refuse delivery or payment on the basis of failure to such standards;

(g)             it is at all times subject to Agent’s duly perfected, first-priority security interest and there exists no other Lien thereon other than Permitted Liens;

(h)             it is in Grantors’ possession and control situated at a location disclosed to Agent in compliance with this Agreement, the Inventory is not in transit, Grantors’ books reflect the Inventory, the Inventory is insured under insurance policies maintained in accordance with Section 7(f) , and the insurance policy lists Agent as lender’s loss payee;

(i)               it is not in the hands of any third party, including a warehouseman, finisher, consignee, bailor, etc., unless such arrangement is fully disclosed to Agent in writing and Grantors shall have provided to Agent such waivers, acknowledgments and other items requested by Agent in its discretion;
 
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(j)               it is not subject to any license or other agreement that limits, conditions, or restricts Grantors’ or Agent’s right to sell or otherwise dispose of such Inventory;

(k)             Grantors own such Inventory and such Inventory is not in Grantors’ possession based upon any consignment, guaranteed sale, or similar basis; and

(l)               it is not of a type that Agent, in its reasonable discretion, has determined is not Eligible Inventory.

“ Equipment ” means all of each Grantor’s machinery, apparatus, equipment, motor vehicles, tractors, trailers, rolling stock, fittings, fixtures and other tangible personal property of every kind and description, together with all parts, accessories and special tools and all increases and accessions thereto and substitutions and replacements therefor, including without limitation Extruders when used in the operation of any Grantor’s business.

“ Excluded Collateral ” shall mean, with respect to any Grantor:

(i) any intent-to-use trademark applications unless and until a statement of use or amendment to allege use is filed and accepted by the United States Patent and Trademark Office;

(ii) interests in joint ventures and non-wholly owned subsidiaries that cannot be pledged without the consent of any Person other than the Grantors; and

(iii) assets as to which it is determined by Agent, that the burden and cost of perfecting a security interest therein outweighs the benefit to the Agent and Lenders of the security to be afforded thereby.

“ Extruders ” shall mean Borrower’s proprietary extruders which may be either (i) used in the operation of Borrower’s business, and therefor constitute Equipment from time to time or (ii) held by Borrower for the purpose of sale, lease or being furnished under a contract of service, and therefor constitute Inventory from time to time.

“ Fixed Charges ” means for any period the sum of Total Debt Service, Capital Expenditures and cash taxes, but excluding the same from Borrower’s Brazil segment.

“ GAAP ” means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board that are applicable to the circumstances as of the date of determination and applied on a consistent basis.

“ General Intangibles ” means all of each Grantor’s present and future general intangibles and all other presently owned or hereafter acquired intangible personal property of each Grantor (including payment intangibles, all rights under insurance policies and any and all choses or things in action, goodwill, patents and patent applications, tradenames, servicemarks, trademarks and trademark applications, copyrights, blueprints, drawings, purchase orders, customer lists, monies due or recoverable from pension funds, route lists, infringement claims, software, computer programs, computer discs, computer tapes, literature, reports, catalogs, deposit accounts, tax refunds and tax refund claims) other than Goods and Accounts, as well as each Grantor’s books and records relating to any of the foregoing.
 
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“ Goods ” means all of each Grantor’s present and hereafter acquired goods, as defined in the UCC, wherever located, including imbedded software to the extent included in “goods” as defined in the UCC.

“ Guarantor ” means each of the entities identified as Guarantors in the Recitals hereto and any other Person that has guaranteed all or any part of the Obligations, and “ Guarantors ” means all such Persons collectively.

“ Indebtedness ” as applied to any Person, means, without duplication, (i) all indebtedness for borrowed money; (ii) that portion of obligations with respect to capital leases that is properly classified as a liability on a balance sheet in conformity with GAAP; (iii) notes payable and drafts accepted representing extensions of credit whether or not representing obligations for borrowed money; (iv) any obligation owed for all or any part of the deferred purchase price of property or services (excluding any such obligations incurred under ERISA and trade payables entered into in the ordinary course of business of such Person), which purchase price is (a) due more than six months from the date of incurrence of the obligation in respect thereof or (b) evidenced by a note or similar written instrument; (v) all indebtedness secured by any Lien on any property or asset owned or held by that Person regardless of whether the indebtedness secured thereby shall have been assumed by that Person; (vi) the face amount of any letter of credit issued for the account of that Person or as to which that Person is otherwise liable for reimbursement of drawings; (vii) the direct or indirect guaranty, endorsement (otherwise than for collection or deposit in the ordinary course of business), co-making, discounting with recourse or sale with recourse by such Person of the indebtedness of another; (viii) any obligation of such Person the primary purpose or intent of which is to provide assurance to an obligee that the obligation of the obligor thereof will be paid or discharged, or any agreement relating thereto will be complied with, or the holders thereof will be protected (in whole or in part) against loss in respect thereof; and (ix) any liability of such Person for the obligation of another through any agreement (contingent or otherwise) (a) to purchase, repurchase or otherwise acquire such obligation or any security therefor, or to provide funds for the payment or discharge of such obligation (whether in the form of loans, advances, stock purchases, capital contributions or otherwise) or (b) to maintain the solvency or any balance sheet item, level of income or financial condition of another if, in the case of any agreement described under subclauses (a) or (b) of this clause (ix), the primary purpose or intent thereof is as described in clause (viii) above; (x) obligations of such Person in respect of any exchange traded or over the counter derivative transaction (xi) the Subordinated Debt.

“ Inventory ” means all of each Grantor’s inventory as defined in the UCC, together with all of each Grantor’s present and future inventory, including goods held for sale or lease or to be furnished under a contract of service and all of each Grantor’s present and future raw materials, work in process, finished goods, shelving and racking upon which the inventory is stored and packing and shipping materials, wherever located, and any documents of title representing any of the above.
 
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 “ Irgovel ” means Industria Riograndese de Oleos Vegetais Ltda, a limited liability company organized under the laws of the Federative Republic of Brazil.

“ Irgovel Escrow Account ” means that certain escrow account established by U.S. Bank National Association in San Francisco, California under that certain Escrow Agreement, dated as of February 18, 2008, which was entered into by Borrower, the selling security holders and U.S. Bank National Association in connection with Borrower’s purchase of 100% of the total capital stock of Irgovel.

“ Irgovel Investments ” shall mean investments, loans and advances made after the date hereof from Borrower to Irgovel or from Borrower to Nutra, but investments, loans and advances from Borrower to Nutra shall only constitute Irgovel Investments to the extent Nutra disburses such funds to Irgovel.

“ Lien ” means any security interest, security title, mortgage, deed to secure debt, deed of trust, lien, pledge, charge, conditional sale or other title retention agreement, or other encumbrance of any kind in respect of any property, including the interest of each lessor under any capital lease and the interest of any bondsman under any payment or performance bond, in, of or on any assets or properties of a Person, whether now owned or hereafter acquired and whether arising by agreement or operation of law.

“ Loans ” means the Revolving Loan, the Term Loan and any other extensions of credit made pursuant to Section 2(g) hereunder.

“ Loan Documents ” means, collectively, this Agreement and all other agreements, instruments, certificates and other documents executed and/or delivered in connection with this Agreement, including collateral documents, security agreements, pledges, guaranties, mortgages, deeds of trust, assignments, subordination agreements, intercreditor agreements and all other agreements executed and/or delivered by any Loan Party or any Affiliate of any Loan Party pursuant hereto or in connection herewith, in each case as the same may be amended, restated, supplemented, or otherwise modified from time to time.

“ Loan Party ” means each Grantor, any Guarantor, any other Person primarily or secondarily, directly or indirectly, liable on any of the Obligations, or any other Person which has granted a Lien on any assets of such Person as collateral for any of the Obligations, and “ Loan Parties ” means all of the foregoing Persons collectively.

“ Material Adverse Effect ” means a material adverse effect on: (a) the business, financial condition, prospects, assets or liabilities of the Borrower and Guarantors, taken as a whole, (b) the ability of any Borrower to perform its material obligations under any Loan Document to which it is a party, or (c) the validity or enforceability of this Agreement or the other Loan Documents or the rights or remedies of the Lenders hereunder or thereunder; provided, however, in the case of (a), (i) a material adverse effect shall be deemed not to have occurred if the effect at any time on the items listed in (a) would not be a material adverse effect under (a) if compared to the business, financial condition, assets or liabilities of the Borrower and Guarantors, taken as a whole, as the date of this Agreement, and (ii) any adverse effect caused by changes in GAAP shall be disregarded.
 
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“ Maturity Date ” means the date specified on Item 7 of the Schedule .

“ Maximum Revolver Amount ” means the lesser of (i) the Revolver Commitment and (ii) the Borrowing Base.

“ Mortgages ” means mortgage or similar institutions of the real property of NutraCea located at 179 Court 15 th Street, Mermentau, LA 70556 and at 3512 E. Bench Road, Dillon, MT 59725.

“ Negotiable Collateral ” means all of each Grantor's present and future letters of credit, advises of credit, notes, drafts, instruments, and documents, including, without limitation, bills of lading, leases, and chattel paper, and Grantor's books and records relating to any of the foregoing.

“ Obligations ” means all Indebtedness, obligations and liabilities of each Grantor to the Agent and Lenders under this Agreement and under each other Loan Document of every kind and description, direct or indirect, secured or unsecured, joint or several, absolute or contingent, due or to become due, including any overdrafts, whether for payment or performance, now existing or hereafter arising, whether presently contemplated or not, regardless of how the same arise, or by what instrument, agreement or book account they may be evidenced, or whether evidenced by any instrument, agreement or book account, including, but not limited to, all loans (including any loan by modification, renewal or extension), all undertakings to take or refrain from taking any action, and all interest, taxes, fees, charges, expenses and attorney’s fees  chargeable to any Grantor or incurred by a Lender pursuant to this Agreement or any other Loan Document.

“ OFAC ” means the U.S. Department of the Treasury’s Office of Foreign Assets Control.

“ Patriot Act ” means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, P.L. 107-56, as amended.
 
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“ Permitted Liens ” means (a) Liens or charges for current taxes, assessments or other governmental charges which are not delinquent or remain payable without any penalty, or the validity of which is contested in good faith by appropriate proceedings upon stay of execution of the enforcement thereof and for which appropriate reserves have been established in accordance with GAAP on the books and records of the Grantors; (b) letters of credit, deposits or pledges to secure (i) statutory obligations, (ii) surety or appeal bonds, (iii) bonds for release of attachment, stay of execution or injunction, or as otherwise may be required pursuant to applicable rule, regulation, statute or interpretation by any governmental authority; (c) statutory Liens on property arising in the ordinary course of business which, in the aggregate, do not materially impair the use of such property or materially detract from the value of such property; (d) Liens existing on the Closing Date and described on Item 3 of the Schedule   including   replacement Liens on the assets subject to such Liens; (e) Liens consisting of judgment or judicial attachment liens (other than the Liens described in clause (a) above) that do not constitute a Default hereunder; (f) Liens consisting of pledges or deposits required in the ordinary course of business in connection with workers’ compensation, unemployment insurance, and other types of social security (g) Liens on Equipment securing all or part of the purchase price of such Equipment; provided , however , that (i) such Lien is created contemporaneously with the acquisition of such Equipment, (ii) such Lien attaches only to such specific items of Equipment so acquired, and (iii) such Lien secures only the indebtedness incurred to acquire such Equipment; (h) Liens in favor of the Agent or any Lender securing the Obligations, (i) attachments, judgments and other similar Liens arising in connection with court proceedings that do not constitute a Default, (j) easements, rights of way, restrictions (including zoning restrictions and covenants or conditions contained in licenses or agreements), encroachments, minor defects or irregularities in title and other similar Liens not interfering in any material respect with the ordinary conduct of the business of Grantors, (k) any interest or title of lessor under any lease or sublease not prohibited hereby, in each case, pertaining to assets that are not owned by any Grantor and to the extent such lease or sublease has been entered into by Grantors in the ordinary course of their business and covering only the assets so leased, (l) Liens (A) arising in the ordinary course of business of collection of a collection bank arising under Section 4-210 of the UCC on items in the course of collection and (B) in favor of a banking institution arising as a matter of law encumbering deposits including brokers Liens, bankers Liens, rights of set-off and other similar Liens which are within the general parameters customary in the banking industry, (m) Liens arising by operation of law under Article 2 of the Uniform Commercial Code in favor of a reclaiming seller of goods or buyer of goods, (n) leases, subleases, licenses, sub-licenses and other similar encumbrances incurred in the ordinary course of business that do not materially interfere with the ordinary conduct of the business of Grantors, (o) Liens in favor of customs and revenue authorities arising as a matter of law which secure payment of customs duties in connection with the importation of goods in the ordinary course of business, (p) workmens’, materialmens’ or other similar Liens, (q) Liens consisting of licenses of intellectual property to third parties in the ordinary course of business to the extent otherwise permitted hereunder, and (r) mechanic’s Liens, carrier’s Liens and other Liens to secure the performance of tenders, statutory obligations, contract bids, government contracts, performance and return of money bonds and other similar obligations, incurred in the ordinary course of business, provided that such Liens are pursuant to statutory requirements and/or common law, (s) Liens on rebates of premiums in connection with the financing of premiums for ordinary course insurance policies , and (t) those Liens that are expressly subordinated to the Liens of Agent and Senior Lender as set forth in a Subordination Agreement in form and substance acceptable to Agent.

“ Person ”   means an individual, corporation, partnership, limited liability company, association, trust, unincorporated organization, government or any agency or political subdivision thereof, or any other entity.

“ Required Lenders ” means, at any time, those Lenders holding in excess of a majority of the Revolver Commitment, the outstanding principal amount of the Term Loan and any additional loans pursuant to Section 2(g) hereof, in the aggregate.

“ Revolver Commitment ” means $3,500,000.
 
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“ Revolving Loans ” have the meaning set forth in Section 2(a)(i) hereof.

“ Run-Rate EBITDA ” means the greater of (i) the Borrower’s most recent quarter’s Adjusted EBITDA multiplied by 4 and (ii) the Borrower’s two most recent quarter’s Adjusted EBITDA multiplied by 2, in each case excluding Borrower’s Brazil segment.

“ Sanctioned Entity ” means (a) an agency of the government of, (b) an organization directly or indirectly controlled by, or (c) a person resident in a country that is subject to a sanctions program identified on the list maintained by OFAC and available at http://www.treas.gov/offices/enforcement/ofac/programs, or as otherwise published from time to time as such program may be applicable to such agency, organization or person.

“ Sanctioned Person ” means a person named on the list of Specially Designated Nationals or Blocked Persons maintained by OFAC available at http://www.treas.gov/offices/enforcement/ofac/sdn/index.html, or as otherwise published from time to time.

“ Senior Debt ” means the Obligations under this Agreement, including the then outstanding Revolving Loan balance, the Term Loan and any additional loans advanced under Section 2(g) hereof.

“ Subordinated Debt ” means that certain subordinated debt of the Borrower in the original principal amount of $6,500,000.

“ Subordination Agreement ” means that certain subordination agreement with respect to the Subordinated Debt, among the Agent, the Borrower, and the subordinated creditors named therein, dated on or about the date hereof.

“ Subsidiary Pledge Agreement ” means the agreements dated as of the date hereof executed by NutraCea, LLC, SRB-LC, LLC and RiceX Company with respect to the equity of their respective subsidiaries.

“ Term Loan ” shall have the meaning set forth in Section 2(b)(i) hereof.

“ Term Loan Commitment ” means $2,500,000.00.

“ Total Debt ” means as at any date of determination, the aggregate stated balance sheet amount of consolidated Indebtedness of Borrower, but excluding the Indebtedness of Borrower’s Brazil segment .

“ Total Debt Service ” means interest, with respect to any applicable period plus scheduled payments of principal with respect to Total Debt.

“ UCC ” means the Uniform Commercial Code, as in effect from time to time, of the State of New York or of any other state the laws of which are required as a result thereof to be applied in connection with the issue of perfection of security interests; provided , however , that to the extent that the UCC is used to define any term herein or in any other documents and such term is defined differently in different Articles or Divisions of the UCC, the definition of such term contained in Article or Division 9 shall govern.
 
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“ Validity Agreement ” means, collectively, the information and support agreement by each Grantor as of the date hereof, in favor of Agent, together with any additional or replacement validity agreements executed after the date hereof.

“ Warrant ” means those certain warrants issued by Borrower in favor of each Lender or its respective Affiliate on the Closing Date.

Other Definitional Provisions .   References to the “Schedule” or any “Section” or “Exhibit” refer to the Schedule or a section or exhibit, respectively, of this Agreement unless otherwise specifically provided.  Any of the terms defined in Section 1 may, unless the context otherwise requires, be used in the singular or the plural depending on the reference.  In this Agreement: words importing any gender include the other genders; the words “including”, “includes” and “include” shall be deemed to be followed by the words “without limitation”; references to agreements and other contractual instruments shall be deemed to include subsequent amendments, assignments, and other modifications thereto, but only to the extent such amendments, assignments and other modifications are not prohibited by the terms of this Agreement; references to any Person includes their respective permitted successors and assigns or people succeeding to the relevant functions of such Persons; any and all terms which are defined in the UCC and are not defined herein shall be construed and defined in accordance with the definition of such terms under the UCC; accounting terms not defined herein shall have the respective meanings given them under GAAP; all accounting computations and presentations shall be performed in accordance with GAAP; all references to statutes and related regulations shall include any amendments of same and any successor statutes and regulations; all references to time of day shall refer to New York, New York time; and all references to Obligations of Borrower shall mean the joint and several obligations of the Grantors, including the Borrower.

2.               Borrowing.

(a)             Revolving Loan .  From time to time Borrower may request, and Lenders will, severally and not jointly, subject to the other terms and conditions of this Agreement, lend to Borrower, in a minimum amount of $100,000, up to an amount equal to the Maximum Revolver Amount at any time (the “Revolving Loan”).  Any request for a Revolving Loan hereunder must be received by Agent, together with the accompanying Borrowing Base Certificate and all other required information, no later than 11:00 a.m., New York, New York time on a Business Day in order for such loan to be made on the following Business Day.  Borrower may repay amounts owed under the Revolving Loan at any time, and such amounts that are repaid may be reborrowed upon the terms and conditions of this Agreement. Subject to the terms and conditions herein, $1,000,000 of Revolving Loans shall be requested by Borrower and made available by Lenders to or for the benefit of Borrower on the Closing Date.
 
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(b)             Term Loan .

(i)              Subject to the terms and conditions of this Agreement, Lenders shall lend the Term Loan Commitment on the Closing Date to or for the benefit of Borrower, in one advance (the “Term Loan”).

(ii)            Amounts borrowed under this Section 2(b) and repaid or prepaid may not be reborrowed.

(c)             Maturity.   The entire unpaid balance of the Revolving Loan, the Term Loan and all other Obligations shall be due and payable on the Maturity Date.

(d)             Standards .  Subject to the definitions of the terms Eligible Accounts, Agent will determine eligibility and the loan value of Collateral, in its sole discretion, consistent with Agent’s experience, prudent business judgment and standards of commercial reasonableness applicable to asset-based credits and in good faith.  Any Loans requested by a Borrower and made by Agent or at any time outstanding in excess of the Borrowing Base or any other limitation set forth in this Agreement will, nevertheless, be subject to the terms of this Agreement, will constitute Obligations for all purposes and be entitled to the benefits of the Collateral.

(e)              Persons Authorized to Request Loans .  Borrower hereby authorizes and directs Agent and Lender to make Loans to or for the benefit of Borrower upon receipt of instructions from any of the persons listed on Item 4 of the Schedule .  Agent shall have no liability whatsoever to Borrower or any other Person for acting upon any such instructions which Agent, in good faith, believes were given by any such person, and Agent shall have no duty to inquire as to the propriety of any disbursement.  Agent is hereby authorized to make the Loans provided for herein based on instructions received by facsimile, electronic mail, telephone or other method of communication from any of such persons.  Although Agent shall make a reasonable effort to determine the person’s identity, Agent shall not be responsible for determining the authenticity of any such instructions, and Agent may act on the instructions of anyone it perceives to be one of the persons authorized to request Loans pursuant to Item 4 of the Schedule .  Agent shall have the right to accept the instructions of any of the foregoing persons unless and until Agent actually receives from a Borrower (in accordance with the notice provisions of this Agreement) written notice of termination of the authority of that person.  Borrower may change persons designated to give Agent borrowing instructions only by delivering to Agent written notice of such change.  Borrower will ensure that each telephone instruction from any person designated in or pursuant to this paragraph shall be followed by written confirmation of the request for disbursement in such form as Agent makes available to Borrower from time to time for such purpose; provided, however, that Borrower’s failure to provide written confirmation of any telephonic instruction shall not invalidate such telephonic instruction.

(f)              Application of Remittances .  Each Grantor shall have entered into deposit account control agreements in the forms attached hereto as Exhibits D and E or any other form reasonably acceptable to Agent and Borrower (“ Control Agreement ”) with respect to each Grantor’s bank accounts naming Agent as an authorized person of such accounts.  Each Grantor will cause the proceeds of Accounts to be forwarded by all Customers directly to a lockbox designated by Agent.  Such lockbox shall be maintained by a bank designated by Agent and all payments received in such lockbox shall be deposited in a bank account in Grantor’s name and owned by Grantor at such bank designated by Agent for application to the Obligations.  All checks, cash or other remittances received by each Grantor, whether for application to Accounts or otherwise, will be received by each Grantor in trust for Agent, as provided in the Control Agreement, and each Grantor will turn over to Agent the identical remittances as speedily as possible, appropriately endorsed, if necessary, to be used as set forth in the Control Agreement.  Each Grantor will account fully and faithfully for and promptly pay or turn over to Agent proceeds in whatever form received of the sale or other disposition of any Collateral as provided in the Control Agreement, and each Grantor agrees that the inclusion of proceeds in “Collateral” will not be deemed to mean that Agent consents to each Grantor's disposition of Collateral other than in accordance with the terms of this Agreement.
 
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(g)             Additional Loans . At any time within twenty-four (24) months after the Closing Date, Borrower shall be entitled to request that Lenders provide an increase in the Term Loan Commitment in a minimum increment of $500,000 and a total maximum of $2,000,000.  Any such increase shall be at the sole and absolute discretion of the Lenders but in any event shall (i) be secured by the Collateral on a pari passu basis with the then existing Obligations, (ii) not be granted if a Default is then occurring and continuing or would be caused thereby, (iii) not cause a violation of any financial covenant set forth in Item 21 of the Schedule ; and (iv) be subject to the upfront fees set forth in Item 10(e) of the Schedule .

(h)             Conditions to Obligation to Make Loans .  Borrower acknowledges that each Lender’s obligation to make the Loans to Borrower is subject to the following terms and conditions:

(i)              Each Lender has no obligation to make the Revolving Loan or the Term Loan to Borrower or to extend any other financial accommodation to Borrower unless and until (A) each Grantor delivers to Lenders, in form and substance satisfactory to each Lender in its discretion, each agreement, instrument, legal opinion and other document specified on Item 6 of the Schedule ,   as applicable, unless waived by the Lenders, and (B) each other condition precedent specified on Item 6 of the Schedule   has been satisfied or waived in a manner satisfactory to each Lender in its discretion.

(ii)            Each Lender’s obligation to make any Loans to Borrower and extend other financial accommodations to Borrower (including the initial Loans made on the Closing Date) is subject to the conditions that, as of the date of any such Loan or other accommodation, no Default will have occurred and be continuing hereunder, the Borrower shall be in compliance with the financial covenants set forth on Item 21 of the Schedule both before and after giving effect to the proposed borrowing, there will have occurred no Material Adverse Effect and Borrower’s representations and warranties set forth in this Agreement (including any amendment, modification, supplement or extension hereof), and the other Loan Documents will be true and correct in all material respects as if made on and as of the date of each subsequent credit request unless such representations and warranties expressly relate to an earlier date, in which case such representations and warranties shall be true and correct in all material respects as of such earlier date.  Each request for a borrowing or other financial accommodation by Borrower will be deemed to be a reaffirmation of each Grantor's warranties and representations hereunder.
 
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(i)              Repayment of Loans .  Upon termination of this Agreement, or upon written demand by Agent upon the occurrence and during the continuance of a Default, Grantors will jointly and severally repay upon demand all of the Obligations.  If no demand is earlier made, Borrower will repay all Obligations in full, without demand or notice, on the termination date of this Agreement provided for in Item 7 of the Schedule .  If at any time for any reason, the aggregate outstanding principal amount of (i) the Revolving Loan exceeds the Maximum Revolver Amount or (ii) the Term Loan exceeds the Term Loan Commitment, Borrower will immediately, without notice or demand, repay the portion of the outstanding principal amount of the Revolving Loan and the Term Loan as the case may be, together with accrued and unpaid interest on the amount repaid, in an amount equal to such excess (it being understood that such excess amount, regardless of how it arose, shall nevertheless constitute an Obligation hereunder and be secured by all of the Collateral).  Borrower shall make each payment required hereunder or under any other Loan Document without setoff, deduction or counterclaim.

Upon the occurrence and during the continuance of a Default and acceleration of the Revolving Loan and the Term Loan by the Lenders, Borrower shall pay all of the Obligations at the prepayment premiums set forth in Item 10(d) of the Schedule upon demand (except in the case of a Default specified in Section 13(a)(vi) in which case such amounts shall become automatically due immediately upon such occurrence).

(j)               Maturity .  This Agreement will continue in full force and effect from the Closing Date until the termination date provided for in Item 7 of the Schedule .

(k)             Prepayments , Voluntary Termination .

(i)              Borrower may elect to prepay the Term Loan in increments of $500,000 at any time upon at least thirty (30) days’ prior written notice to Agent, together with the applicable prepayment fees as set forth in Item 10(d) of the Schedule .  Any prepayment in part shall be applied to the principal amount of the Term Loan payable at maturity and shall not affect the amortization pursuant to Section 2(o)(ii) hereof.  In the case of prepayment in whole, on the date specified in such notice, termination of this Agreement will be effective so long as the Borrower has paid to Lenders, in same day funds, an amount equal to the aggregate principal amount of the Term Loan and Revolving Loan outstanding on such date, together with accrued interest thereon, all other Obligations outstanding and unpaid have been paid in full in cash, and Borrower shall have executed and delivered to Agent and Lenders a payoff letter (containing indemnification provisions reasonably satisfactory to Agent and Lenders) and such other documentation as Agent shall reasonably require.

(l)              Termination on Default .  Notwithstanding the foregoing, should a Default occur and be continuing (giving effect to applicable grace periods and cure rights), the Required Lenders will have the right to terminate this Agreement at any time without prior notice.

(m)            Survival .  Notwithstanding termination of this Agreement, all the terms, conditions, and provisions hereof (including Agent’s security interest in the Collateral) will continue to be fully operative until all Obligations have been fully disposed of, concluded, paid and satisfied.  Agent shall have no obligation to release its Liens on any Collateral until (i) the Obligations have been repaid in full in cash in immediately available funds and (ii) the Borrower shall have executed and delivered to Lenders a payoff letter containing indemnification provisions reasonably satisfactory to Agent and Lenders and such other documentation as Lenders shall reasonably require. Notwithstanding anything herein to the contrary, upon the fulfillment of the preceding conditions in this Section 2(m), the Borrower’s obligations under the Warrant shall not constitute “Obligations” under this Agreement or any other Loan Document.
 
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(n)             Payments as Loans .  If Agent, with the consent of Lenders, determines in its discretion that extensions of credit are necessary to protect the Collateral or to enhance the likelihood of repayment in full of the Obligations, Agent is hereby authorized, but not required, to make such extensions of credit and charge them to Borrower’s loan account whereupon such extension of credit shall be deemed part of the Obligations secured by the Collateral.

(o)             Mandatory Repayment .

(i)              Sales of Assets; Insurance Proceeds; Indebtedness .  Borrower shall be required to promptly prepay the Term Loan in an amount equal to one hundred percent (100%) of the net proceeds from (x) any sale or other disposition of assets outside the ordinary course of business, (y) from casualty insurance claims and (z) from incurrence or issuance of Indebtedness not permitted hereunder, but excluding for the avoidance of doubt operating leases, insurance premium financing and similar arrangements incurred in the ordinary course in an amount not to exceed $150,000 per transaction, and any such prepayments are subject to prepayment pricing as set forth in Item 10(d) of the Schedule .  Notwithstanding the foregoing, Borrower shall not be required to prepay the Term Loan provided that no Default has occurred and is continuing and (x) such proceeds do not exceed $100,000 in the aggregate during the term of this Agreement or (y) such proceeds are from the sale of the Borrower’s building, machinery and equipment located in Lake Charles, Louisiana, (“Lake Charles Assets”), provided that from the proceeds from the sale of the Lake Charles Assets, Borrower shall fund into escrow with the Agent, to be used to pay scheduled interest and principal under the Subordinated Debt in an aggregate amount not to exceed $225,000 and, after payment of such amounts, 50% of the remaining proceeds shall be used to prepay the Term Loan and the other 50% of the remaining proceeds may be retained by Borrower. For the avoidance of doubt, “net proceeds” as used in this Section shall mean those gross proceeds resulting from any transaction described in foregoing clauses (x) and (y) less reasonable brokerage, legal, accounting, tax and other fees and expenses, to the extent actually paid or payable by any Grantor.  In addition to the foregoing, the Borrower shall, at the request of the Agent and Lenders, repay the Loans in an amount equal to 50% of the net proceeds of any sale of equity, including upon the exercise of any warrants.

So long as a Default is not then continuing, if Borrower sells all or any portion of the Lake Charles Assets and the proceeds from such sale are used in accordance with this Section 2(o)(i), Agent and Lenders shall, in accordance with Section 17(e) of this Agreement, authorize Borrower to take all necessary actions to reflect the termination of any Lien against the Lake Charles Assets pursuant to this Agreement, including without limitation the filing of any termination statements and the recording of any modification to a mortgage. Agent and the Lenders shall cooperate with Borrower to effect the foregoing termination.

(ii)             Amortization .  Commencing in October 2016, Borrower shall be required to repay the original principal balance of the Term Loan (in addition to any increase in the Term Loan pursuant to Section 2(g) hereof) to Lenders on the last Business Day of the 1 st , 4 th , 7 th and 10 th month of each calendar year in an amount equal to five percent (5%) of the original principal amount of the Term Loan (as recalculated from time to time to give effect to the increase of any additional Loans pursuant to Section 2(g) hereof).
 
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(p)             Application of Amounts .  Except as otherwise specified herein, all payments and any other amounts received by the Agent from or for the benefit of Borrower shall be applied first to any outstanding fees, expenses and interest, hereunder and then to reduce the principal amount of the Revolving Loan. If there is no principal amount outstanding under the Revolving Loan, all payments and any other amounts received by the Agent from or for the benefit of Borrower shall be applied ratably to the remaining scheduled amortization payments of the Term Loan, in the inverse order or maturity.  Upon the occurrence and during the continuance of a Default, Agent shall be entitled to apply any and all proceeds of any payments and any other amounts received by the Agent from or for the benefit of Borrower in its sole and absolute discretion.

3.               Interest and Fees.

(a)             Interest on Loans .  Borrower will pay Lenders, or at Lenders’ option, Agent may charge Borrower’s loan account with interest on the average daily principal amount of Revolving Loan and Term Loan, respectively, outstanding hereunder, calculated monthly and payable in arrears on the first Business Day of each calendar quarter by 11:00 am New York City time, at a rate (computed on the basis of the actual number of days elapsed over a year of 365 days) equal to the sum of (i) LIBOR (as defined below), plus (ii) the interest margin specified in Item 8 of the Schedule (the “ Interest Margin ”).  LIBOR may not be the lowest or best rate at which Agent calculates interest or extends credit.  LIBOR for each calendar month shall be adjusted (if necessary) on the first day of such calendar month and shall be equal to LIBOR in effect as of the close of business on the last Business Day of the immediately preceding calendar month.  As used herein, “LIBOR” means , at any time, an interest rate per annum equal to the interest rate per annum (rounded upwards, if necessary, to the nearest 1/100 th of 1%) as published in the “Money Rates” section of The Wall Street Journal (or another national publication selected by Agent) as the one-month London Interbank Offered Rate for United States dollar deposits (or, if such page shall cease to be publicly available or, if the information/description contained on such page, in Agent’s sole judgment, shall cease to accurately reflect such London Interbank Offered Rate, then such rate as reported by any publicly available recognized source of similar market data selected by Agent that, in Agent’s reasonable judgment, accurately reflects such London Interbank Offered Rate). Notwithstanding the foregoing, in no event shall LIBOR at any time be less than 0.75% or greater than 1.25%.

(b)             Market Disruption Event .  If, at any time, a Lender reasonably determines (which determination shall be conclusive and binding) that (i) by reason of circumstances affecting the London interbank market generally, adequate and fair means do not exist for ascertaining LIBOR for the following month as provided in subsection (a) hereof, or (ii) disruptions in the short term money markets have materially and adversely affected such Lender’s cost of funds such that the interest rate hereunder does not adequately or fairly reflect such Lender’s cost of making, funding or maintaining the Loans hereunder, a “Market Disruption Event” will be deemed to have occurred and such Lender shall promptly notify Borrower thereof.  The rate of interest hereunder (the “Adjusted Rate of Interest”) shall be adjusted and shall thereafter be a rate equal to the sum of (x) the rate that such Lender reasonably determines (which reasonable determination shall be conclusive and binding) expressed as a percentage rate per annum, to be the cost to such Lender of funding the loan from its primary leverage provider, plus (y) the Interest Margin. Provided, however, in no event shall the Adjusted Rate of Interest exceed a rate of 12% per annum. Such Lender shall give prompt notice to Borrower of the Adjusted Rate of Interest.  Borrower shall begin to be charged interest at the Adjusted Rate of Interest effective as of the first day of the month following the month in which such Lender provides notice thereof to Borrower.
 
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(c)             Default Interest .  To the extent permitted by law and without limiting any other right or remedy of Lenders hereunder, whenever there is a Default occurring and continuing under this Agreement, the rate of interest on the unpaid principal balance of the Obligations may, at the option of the Agent, and shall, at the option of the Required Lenders, be increased by adding the default margin identified on Item 9 of the Schedule to the interest rate otherwise in effect hereunder.  Lenders may charge such default interest rate retroactively beginning on the date the applicable Default first occurred or existed and for the period it is continuing.  Borrower acknowledges that:  (i) such additional rate is a material inducement to Lenders to make the Loans described herein; (ii) Lenders would not have made the Loans in the absence of the agreement of Borrower to pay such additional rate; (iii) such additional rate represents compensation for increased risk to Lenders that the Loans will not be repaid; and (iv) such rate is not a penalty and represents a reasonable estimate of (A) the cost to Lenders in allocating its resources (both personnel and financial) to the ongoing review, monitoring, administration and collection of the Loans, and (B) compensation to Lenders for losses that are difficult to ascertain.  In the event of termination of this Agreement by either party hereto, Lenders’ entitlement to this charge will continue until all Obligations are paid in full.

(d)             Fees .  Borrower will pay to Lenders the fees set forth in Item 10 of the Schedule .

(e)              No Usury .  Borrower acknowledges that Lenders do not intend to reserve, charge or collect interest on money borrowed under this Agreement at any rate in excess of the rates permitted by applicable law and that, should any interest rate provided for in this Agreement exceed the legally permissible rate(s), the rate will automatically be reduced to the maximum rate permitted under applicable law.  If Lenders should collect any amount from Borrower which, if it were interest, would result in the interest rate charged hereunder exceeding the maximum rate permitted by applicable law, such amount will be applied to reduce principal of the Obligations or, if no Obligations remain outstanding, will be refunded to Borrower.

(f)              Monthly Statements .   Agent   will render a statement to Borrower each month for borrowings of Loans, payments, and other transactions pursuant to this Agreement, and such statement rendered by Agent will be binding upon Borrower unless Agent is notified in writing to the contrary within 30 days after the date such statement is rendered.

4.              Representations and Warranties of Grantors . Except as set forth in the disclosure letter separately delivered by the Grantors to Agent on even date herewith (“ Disclosure Letter ”), the Grantors hereby jointly and severally represent and warrant to Agent and Lenders that:
 
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(a)              Authority, Compliance with Laws, Litigation, No Material Adverse Change, Etc.     (i) each Grantor’s exact legal name, type of organization, state of organization and organizational identification number are fully and accurately set forth on Item 11 of the Schedule , and each Grantor is duly organized and validly existing under the laws of such state of organization or incorporation; (ii) the execution, delivery, and performance of this Agreement and the other Loan Documents (A) are within each Grantor’s corporate or limited liability company powers, (B) have been duly authorized, (C) do not violate such Grantor’s charter documents, (D) (x) do not violate any law or regulation, including, without limitation, any law or regulation relating to occupational health and safety or protection of the environment applicable to such Grantor, or (y) any indenture, agreement, or other undertaking to which such Grantor is a party or by which such Grantor or such Grantor’s property is bound, except in the case of this clause (D) as would not cause a Material Adverse Effect; (iii) this Agreement and the other Loan Documents to which each Grantor is a party constitute valid, binding and enforceable obligations of such Grantor in accordance with the terms hereof and thereof, except as enforceability may be limited by bankruptcy, insolvency, fraudulent conveyance, moratorium or other similar laws applicable to creditors’ rights generally or by generally applicable equitable principles affecting the enforcement of creditors’ rights; (iv) each Grantor has no direct or indirect subsidiaries or other investments in other Persons, except as set forth on Item 12 of the Schedule ; (v) each Grantor is in compliance in all material respects with all laws, rules and regulations applicable to such Grantor, including laws, rules or regulations concerning the environment, occupational health and safety and pensions or other employee benefits; (vi) except as set forth on Item 13 of the Schedule , there is no litigation or investigation pending against such Grantor (or, so far as such Grantor is aware, threatened in writing) which could reasonably be expected to have a Material Adverse Effect (taking into account any insurance coverage that has been acknowledged by the insurer); (vii) other than debt that is to be repaid from the proceeds of the first advance hereunder, each Grantor is not indebted to any other Person for money borrowed nor has any Grantor issued any guaranty of payment or performance by any other Person, except as permitted hereunder or as set forth on Item 14 of the Schedule ; (viii) since December 31, 2014, there has been no Material Adverse Effect; and (ix) each Grantor is, and after giving effect to the initial Loans under this Agreement and the application of the proceeds of such Loans such Grantor will be, solvent and has sufficient revenues to pay such Grantor’s obligations as they come due and adequate capital with which to conduct such Grantor’s business.

(b)             Title to Assets, Other Collateral Matters .  (i) each Grantor has good and valid title to the Collateral, free of all Liens except for Permitted Liens, and no financing statement, mortgage, notice of Lien, deed of trust, security agreement, or any other agreement or instrument creating or giving notice of any Lien against any of the Collateral has been signed, authorized or delivered by such Grantor, except in a Lender’s favor or with respect to Permitted Liens; (ii) with regard to each Account as it arises, such Grantor will have made delivery of the goods or will have rendered the services ordered; (iii) all Inventory is in good condition, meets all applicable material governmental and industry standards and is currently usable or saleable in the ordinary course of such Grantor’s business; (iv) all Equipment is in good condition and state of repair, ordinary wear and tear excepted; (v) all Collateral meets applicable material government standards in all material respects; (vi) in the past five years, except as set forth on Item 15 of the Schedule (A) such Grantor has not used any other legal, trade or fictitious names, and (B) such Grantor has not been a party to any merger or purchased assets from any other Person other than in the ordinary course of business; and (vii) each of such Grantor’s chief executive office and principal place of business, all Inventory, all Equipment and all other Collateral is located at the addresses (including the county) set forth on Item 16 of the Schedule .
 
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(c)             Ownership Structure .   (i) Item 17 of the Schedule accurately describes the authorized and outstanding   capital stock, membership interests or other equity interests for each Grantor, and (ii) the individual(s) or entities listed on Item 17 of the Schedule have, directly or indirectly, voting and managerial control of Borrower.

(d)             Additional Representations .  (i) no Grantor is engaged as one of its principal activities in owning, carrying or financing the purchase or ownership by others of “margin stock” (as defined in Regulation U of the Board of Governors of the Federal Reserve System); (ii) no Grantor owns real property or leases real property other than as listed on Item 18 of the Schedule ; and (iii) a list and brief description of all bank accounts maintained by any Grantor with any bank or financial institution is set forth on Item 19 of the Schedule .

(e)             Intellectual Property .  (i) Item 19A of the Schedule sets out a complete and accurate list of patents, trademarks, trade names and copyrights that each Grantor owns, is licensed or otherwise has the lawful right to use that is material to its business, (ii) each Grantor owns, is licensed or otherwise has the lawful right to use the permits and other governmental approvals, patents, trademarks, trade names, copyrights, technology, know-how and processes necessary and sufficient for the conduct of its business as currently conducted which are material to its business, (iii) there are no claims pending or, to Grantor's knowledge, threatened in writing, that any Grantor is infringing or otherwise adversely affecting the rights of any Person with respect to such permits and other governmental approvals, patents, trademarks, trade names, copyrights, technology, know-how and processes, except for such claims and infringements as do not, in the aggregate, give rise to any liability on the part of any Grantor, which has or is reasonably likely to have a Material Adverse Effect and (iv) the consummation of the transactions contemplated by the Loan Documents will not impair any Grantor's ownership of or rights under (or the license or other right to use, as the case may be) any permits and governmental approvals, patents, trademarks, trade names, copyrights, technology, know-how or processes in any manner which has or is reasonably likely to have a Material Adverse Effect.

(f)              Foreign Assets Control Regulations and Anti-Money Laundering .

(i)              No Loan Party or any Affiliate thereof: (a) is a Sanctioned Person, (b) has any assets in Sanctioned Entities, or (c) derives any operating income from investments in, or transactions with Sanctioned Persons or Sanctioned Entities.  The proceeds of the Loans will not be used and have not been used to fund any operations in, finance any investments or activities in, or make any payments to, a Sanctioned Person or a Sanctioned Entity.

(ii)             Each Grantor is in compliance, in all material respects, with the Patriot Act.  No part of the proceeds of the Loans will be used, directly or indirectly, for any payments to any governmental official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977, as amended.
 
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(g)             Labor .  Except as disclosed on Item 19B of the Schedule :

(i)              There is no collective bargaining agreement or relationship between any Grantor and any labor organization;

(ii)             no labor organization or group of employees has filed any representation petition or made any written or oral demand for recognition with any Grantor;

(iii)           to the knowledge of the Grantors, no union organizing or decertification efforts are underway or threatened and no other question concerning representation exists; and

(iv)           no labor strike, work stoppage, slowdown, or other material labor dispute has occurred, and none is underway or, to the knowledge of Borrower, threatened.

(h)             Assurances .  This Agreement, together with all exhibits and schedules hereto, the Loan Documents, and the agreements and financial statements furnished to the Lenders by any Grantor do not, when taken as a whole, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained herein or therein, in the light of the circumstances under which they were made, not misleading.

(i)              No Material Adverse Effect .  To the knowledge of the Grantors, there is no fact which the Grantors have not disclosed to the Lenders in writing which could reasonably be expected to have a Material Adverse Effect.

5.               Collateral.

(a)             Grant of Security Interest .  To induce Lenders to accept this Agreement and to make Loans to Borrower from time to time pursuant to its terms, each Grantor hereby grants to Agent, for the benefit of Lenders, a security interest in, and assigns, mortgages and pledges to each Lender, for itself and as agent for any Affiliate of such Lender, all of such Grantor's right, title and interest in and to the following property of such Grantor, whether real or personal, tangible or intangible, now owned or existing or hereafter acquired or arising (collectively, the “Collateral”):

(i)              all Accounts, Inventory, Equipment, Goods, General Intangibles and Negotiable Collateral;

(ii)             all investment property, securities and securities accounts and financial assets, as well as all bank and depository accounts and all funds on deposit therein;

(iii)           all chattel paper (whether tangible or electronic) and contract rights;

(iv)           all guaranties, collateral, Liens on real or personal property, leases, letters of credit, supporting obligations, and all other rights, agreements, and property securing or relating to payment of Accounts or any other Collateral;

(v)            all documents, books and records relating to any Collateral or to each Grantor's business;
 
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(vi)           all other property of each Grantor now or hereafter in the possession or control of a Lender or any of such Lender’s Affiliates (including cash, money, credits and balances of Borrower held by or on deposit with a Lender or any Affiliate of a Lender);

(vii)         all of each Grantor's commercial tort claims listed on (A) Item 20 of the Schedule   (which each Grantor represents and warrants is a true, accurate and complete list of all of such Grantor’s commercial tort claims as of the Closing Date) or (B) any other writing provided to Lenders pursuant to Section 7(e) ;

(viii)       all patents, trademarks, royalty rights, copyrights, technology, know-how and other intellectual property, which shall be listed on Item 19A of the Schedule ;

(ix )           all other property of each Grantor whether governed by Article 9 of the UCC or other law; and

(x)             all proceeds and products of all of the foregoing in any form, including amounts payable under any policies of insurance insuring all or any of the foregoing against loss or damage, all parts, accessories, attachments, special tools, additions, replacements, substitutions and accessions to or for all or any of the foregoing, all condemnation or requisition payments with respect to all or any of the foregoing and all increases and profits received from all or any of the foregoing.

Notwithstanding any other provision of this Agreement or the Loan Documents, the Collateral shall not include, Borrower shall not be required to pledge, and Agent and the Lenders shall have no security interest in (i) Borrower’s membership interest in RBT PRO, LLC and (ii) any amount greater than 50% of Borrower’s membership interest in Nutra.
 
(b)             Obligations .  Such grant, assignment, mortgage and transfer is made for the purpose of securing and the Collateral secures and will continue to secure all of the Obligations.

6.               Financial Covenants.

Grantors shall, unless Agent waives compliance therewith in writing, comply with each of the financial covenants set forth on Item 21 of the Schedule until the Termination Date.

7.               Collateral Covenants.

(a)              Accounts .  Agent may, at any time and from time to time contact Customers to verify Accounts and/or to notify Customers of Agent’s security interest in the Accounts and to instruct such customers to pay such Accounts to a lockbox specified by Agent.  All of the Grantors’ books and records concerning Accounts and a copy of each Grantor's general ledger will be maintained at the address of Borrower’s chief executive office set forth on Item 16 of the Schedule .  All Accounts included on any Borrowing Base Certificate will be bona fide   and existing obligations of Customers arising out of the sale of goods and/or the rendering of services by Grantors in the ordinary course of Grantor's business, owned by and owing to Grantors will be subject to a perfected, first-priority security interest in Agent’s favor, for the benefit of Lenders, and will be free and clear of all other Liens except Permitted Liens.  Upon the occurrence and during the continuance of any Default, Agent will have the right at all times to exercise any of actions described under this Section 7(a) with notice but without any demand, presentment or consent of Borrower of any kind.
 
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(b)             Inventory .  All Inventory (other than Inventory with an aggregate value of less than $50,000, or in-transit Inventory) will at all times be located at one of the Inventory locations set forth on Item 16 of the Schedule as the current location of Borrower’s chief executive office or a current location of other Collateral, will be subject to a perfected, first-priority security interest in Agent’s favor, for the benefit of Lenders, and will be free and clear of all other Liens except Permitted Liens.

(c)             Equipment .  Grantors will maintain all Equipment used or useful in Grantor's business in working condition, ordinary wear and tear excepted, subject to a perfected, first-priority security interest in Agent’s favor, for the benefit of Lenders, and free and clear of all other Liens (other than Permitted Liens and Equipment constituting Extruders, the Liens of which shall terminate upon sale of the Extruders to an unaffiliated third party pursuant to an arms-length transaction), at one of the locations set forth on Item 16 of the Schedule as the current location of Borrower’s chief executive office or a current location of other Collateral.

(d)             Defense of Title .  All Collateral will at all times be owned by a Grantor, and each Grantor will defend its title to the Collateral against the claims of third parties in accordance with its reasonable business judgment.  Each Grantor will at all times keep accurate and complete records of the Collateral.

(e)              Perfection; Further Assurances .  Each Grantor shall not change its name, state of organization, type of organization or organizational identification number without giving Agent at least ten (10) days’ prior written notice thereof.  Each Grantor will give Agent at least twenty (20) days’ prior written notice of any change in the location of its principal place of business or chief executive office, any change in the locations of its Inventory or Equipment to a location not previously disclosed to Agent hereunder or from time to time during the tenor of this Agreement, and any acquisition by it of any interest in real property.  Each Grantor will, at its expense, promptly execute and deliver from time to time at Agent’s request and pay the costs of filing such additional financing statements, mortgages, or other evidences of Liens as may be necessary to perfect or continue perfection of Agent’s security interest in such Grantor’s property or, at Agent’s reasonable request, to create and perfect a Lien on newly acquired real property.  Each Grantor will use commercially reasonable efforts to obtain from any landlord, warehouseman, processor or other third party operator of premises on which material Collateral is located a reasonably acceptable Lien waiver or subordination agreement in Agent’s favor with respect to such Collateral.  In the event that any Collateral, including proceeds, is evidenced by or consists of Negotiable Collateral valued in excess of $10,000 individually and $25,000 in the aggregate, each Grantor shall, immediately upon written request therefor from Agent, endorse and assign such Negotiable Collateral over to Agent and deliver actual physical possession of the Negotiable Collateral to Agent.  Each Grantor shall at any time and from time to time use commercially reasonable efforts upon Agent’s request for Agent (i) to obtain an acknowledgment, in form and substance reasonably satisfactory to Agent, of any bailee having possession of any of the Collateral that such bailee holds such Collateral for Agent, (ii) to obtain “control” of any investment property, letter-of-credit rights and chattel paper (including electronic chattel paper) in accordance with Article 9 of the UCC, with any agreements establishing control to be in form and substance satisfactory to Agent, (iii) to have Agent’s Lien noted on each certificate of title evidencing any Collateral and (iv) otherwise to insure the continued perfection and priority of Agent’s security interest in any of the Collateral and of the preservation of its rights therein. The Agent, on behalf of the Lenders, shall not perfect its security interest with respect to the Excluded Collateral.
 
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(f)              Insurance .  Borrower will obtain and maintain in full force and effect insurance covering the Collateral against all risks to which the Collateral is exposed, including loss, damage, fire, theft, and all other such risks, in such amounts, with such companies, under such policies and in such form as will be reasonably satisfactory to Agent, which policies will name Agent as an additional insured and provide that loss thereunder will be payable to Agent as Agent’s interests may appear upon an Agent's loss payee endorsement acceptable to Agent.  Borrower will also obtain and maintain in full force and effect liability insurance and such other types of insurance as Agent may reasonably require (such as business interruption insurance), in each case against such risks, in such amounts, with such companies, under such policies and in such form as will be reasonably satisfactory to Agent.   All proceeds of any such insurance will be paid over to Agent directly, and Agent may apply such proceeds to payment of the Obligations then due or, in Agent’s sole discretion, apply such proceeds, in whole or in part, to the replacement, restoration or rebuilding of the lost or damaged property.  Upon Agent’s request, Borrower will provide to Agent from time to time certificates showing such coverage in effect and, at Agent’s request, the underlying policies that have been amended by Borrower as of the Closing Date to reflect agent's endorsement as an additional insured and Agent's loss payee, as applicable.

(g)             Commercial Tort Claims .  If a Grantor shall at any time acquire a commercial tort claim with an asserted value of $50,000 or more, such Grantor shall immediately notify Agent in a writing signed by such Grantor of the details thereof and grant to Agent in such writing a security interest therein and in the proceeds thereof, all upon the terms of this Agreement, with such writing to be in form and substance satisfactory to Agent.

(h)             Financing Statements .  Agent may at any time and from time to time file financing statements, continuation statements and amendments thereto that describe the Collateral as “all assets” or “all assets whether now owned or hereafter acquired” of each Grantor or words of similar effect and which contain any other information required by Part 5 of Article 9 of the UCC for the sufficiency or filing office acceptance of any financing statement, continuation statement or amendment, including whether a Grantor is an organization, the type of organization and any organization identification number issued to a Grantor, and each Grantor hereby ratifies and re-authorizes all such financing statements filed by Lenders or Agent on or prior to the Closing Date.  Each Grantor agrees to furnish any such information to Lenders promptly upon request.  Any such financing statements, continuation statements or amendments may be filed by Lenders without the signature of each Grantor and may be filed at any time in any jurisdiction.  Each Grantor acknowledges that it is not authorized to file any financing statement or amendment or termination statement with respect to any financing statement naming each Grantor as the debtor and Agent or Lenders as the secured party without the prior written consent of Agent or Lenders (which consent shall not be unreasonably withheld or delayed), and each Grantor agrees that it shall not do so without such prior written consent of Agent or Lenders.
 
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8.                Negative Covenants.

(a)              No Merger or Disposition of Assets .  No Grantor will merge or consolidate with any other Person, or purchase all or substantially all of the assets of any other Person, or sell, transfer, lease, abandon, or otherwise dispose of a substantial portion of its assets or any of the Collateral or any interest therein, except that, (i) upon not less than ten (10) days prior written notice to Agent, any Loan Party may merge with, or dissolve or liquidate into, or convey, transfer or lease or otherwise dispose of all or substantially all of its assets, in each case, to another Loan Party; provided that all actions required to maintain perfected Liens on the assets of the surviving entity and other Collateral in favor of Agent shall have been completed and (ii) each Grantor may (A) sell Inventory or sell Extruders in the ordinary course of its business, (B) dispose of assets provided that the net proceeds thereof are applied in accordance with Section 2(o) hereof, (C) license or sublicense intellectual property and related general intangibles and licenses and lease or sublease real property in each case in the ordinary course of its business and to the extent the same does not materially interfere with the business of any Grantor and that such licenses, sublicenses or subleases are not otherwise prohibited hereunder, (D) abandon, cancel or dispose of any intellectual property in the ordinary course of business, and (E) transfer assets between Grantors.

(b)             No Debt or Liens; Limitations on Equity; Taxes .  No Grantor will obtain from any Person any loans, advances, or other financial accommodations or Indebtedness of any kind, nor will a Grantor enter into any direct or indirect guaranty of any obligation of another Person, other than (i) Indebtedness in connection with purchase money security interests constituting Permitted Liens (and capital leases) not to exceed, in aggregate principal amount among all Grantors, the amount set forth on Item 22 of the Schedule at any one time outstanding, (ii) Indebtedness arising out of the issuance of letters of credit, surety, stay or performance bonds and performance and completion guarantees, in each case, incurred in the ordinary course of business of the Grantors, (iii) other Indebtedness, including corporate credit cards and other lines of credit, not to exceed $150,000 in the aggregate, (iv) the Indebtedness existing on the date hereof set forth on Item 14 of the Schedule , (v) the Subordinated Debt, (vi) financing of ordinary course insurance premiums consistent with Grantors’ past practice, (vii) equipment leases, and (viii) the Obligations hereunder. No Grantor will permit any of its assets to be subject to any Lien other than Permitted Liens. No Grantor shall issue any equity securities that would (A) result in a Change of Control or (B) require cash dividends or distributions or redemption at the option of the holder.  Each Grantor shall pay when due (or before the expiration of any extension period) any material tax or other assessment (including all required payments or deposits with respect to withholding taxes) except such taxes, if any, as are being contested in good faith by appropriate proceedings and as to which adequate reserves have been established and maintained on the books and records of the Grantors in accordance with GAAP, and each Grantor will, upon request by Agent, promptly furnish Agent with proof satisfactory to Agent that it has made such payments and deposits.

(c)              No Distributions .  (i) No Grantor will retire, repurchase or redeem any of its capital stock or other ownership interest in any other Grantor, nor declare or pay any dividend in cash or other property (other than dividends or distributions to Borrower) on its capital stock or other ownership interest, to any owner or direct or indirect holder of Borrower’s shares or other ownership interest, except: Grantors may make distributions to any other Grantor, including Borrower, for the purposes of payment of principal or interest when due and payable under this Agreement.
 
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(ii)             None of Borrower or Borrower’s subsidiaries shall pay (A) any fees or compensation to any member of its Board of Directors or other governing body in excess of the fee structure for the Board of Directors for the Borrower’s 2015 fiscal year, with annual increases not to exceed 5% per annum, other than (i) payments to reimburse reasonable and customary travel and other expenses incurred in connection with serving as a member of its Board of Directors and (ii) equity compensation or (B) any management or similar fees to any owner or direct or indirect holder (or any Affiliate thereof) of any Grantor’s shares or other ownership interest other than payment of such fees to a Grantor.

(d)             No ERISA Liabilities .  Each Grantor will make timely payments of all contributions required to meet the minimum funding standards for Grantor's employee benefit plans subject to the Employee Retirement Income Security Act of 1974 (as amended, “ ERISA ”) and will promptly report to Agent the occurrence of any reportable event (as defined in ERISA) and any giving or receipt by Grantors of any governmental notice (other than routine requests for information) in respect of any such plan.

(e)              Transactions with Affiliates .  No Grantors will engage in any transaction with any of its or any other Grantor's, officers, directors, employees, owners (having a 5% interest or more in such Grantor) or other Affiliates, except for (i) transactions between or among Borrower and its subsidiaries that are Grantors, (ii) any “arms-length” transaction on terms no less favorable to such Grantor than would be granted to such Grantor in a transaction with a Person who is not an Affiliate which transaction shall be approved by such Grantor’s disinterested members or managers, as applicable, and shall require Lenders’ prior written consent for transactions having a value in excess of $100,000, (iii) arms-length compensatory arrangements between a Grantor and its employees, consistent with past practice, and (iv) any other transactions specifically permitted hereunder and under the Loan Documents, including for the avoidance of doubt those transactions permitted by Section 8(f).

(f)              Loans/Investments .  No Grantors will make any loans or advances to or extend any credit to any Person except (i) the extension of trade credit in the ordinary course of business, (ii) advances to directors, officers and other employees not to exceed an aggregate outstanding amount at any time of $50,000 at any one time outstanding for all directors, officers and other employees of all Grantors and (iii) those loans described in clause “(J)” of the immediately following sentence.  No Grantor shall purchase, acquire or otherwise invest in any Person except: (A) existing investments in Grantors’ subsidiaries described on Item 12 of the Schedule ; (B) direct obligations of the United States of America maturing within one year from the acquisition thereof; (C) certificates of deposit issued by, or investment accounts in, banks or financial institutions having a net worth of not less than $50,000,000; (D) commercial paper rated A-1 by Standard & Poor’s Ratings Group or P-1 by Moody’s Investors Service, Inc.; (E) bank deposits in the ordinary course of business; (F) investments in securities of Customers received pursuant to any plan of reorganization or similar arrangement upon the bankruptcy or insolvency of such Customers; (G) extension of trade credit in the ordinary course of business; (H) investments acquired in connection with the settlement of delinquent Accounts in the ordinary course of business or in connection with the bankruptcy or reorganization of suppliers or Customers; (I) investments by any Loan Party in any other Loan Party, and (J) providing that the Borrower will be in in compliance with Item 21(e) of the Schedule immediately before and after Borrower makes an Irgovel Investment, Irgovel Investments (1) of funds received from the Irgovel Escrow Account and (2) up to an additional $2,000,000 of funds.  Without limiting the generality of the foregoing, except as expressly set forth in clause “(J)” above, Grantors shall not create any new subsidiary or make loans to, transfer any money or other assets to or otherwise invest in any subsidiary that is not a Borrower or Guarantor.
 
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(g)             Capital Expenditures .  Grantors shall not make or incur Capital Expenditures in excess of the amount set forth on Item 21(c) of the Schedule during any fiscal year.

(h)             Amendments of Documents .  Except as otherwise provided herein, no Grantor shall amend or modify its articles or certificate of incorporation, by-laws or other constituent documents in each case in any way which could reasonably be expected to materially adversely affect the interests of the Agent or Lenders.

(i)              Use of Proceeds .  Borrower shall not use the proceeds of any Loans hereunder for any purpose other than to pay the fees and expenses incurred in connection with the Loan Documents and the transactions contemplated therein, for working capital and other general corporate uses, including capital investments in Borrower’s USA reporting segment and loans or equity investments to fund operations in Borrower’s Brazil reporting segment; provided that such capital investments, loans and equity investments do not otherwise violate this Agreement.

(j)              Business Activities . The Grantors shall engage solely in the businesses of food ingredients, nutritional supplement, and animal nutrition and any other lawful activity related or incidental thereto.

(k)             Equity Interests . Borrower covenants and agrees not to transfer, convey or assign, or create or allow the creation or imposition of any security interests, liens or other encumbrances on its equity interests in RBT PRO, LLC and/or Nutra without the prior written consent of Agent.
 
9.               Reporting and Information.

(a)         Financial Statements .    Borrower will furnish to the Agent :

(i)              as soon as available, but in any event not later than the earlier of (y) 90 days after the end of each fiscal year of the Borrower and (z) the date the Borrower files its annual financial statements in accordance with the Securities Exchange Act of 1934, as amended (the “Exchange Act”), a copy of:

(A)              the audited consolidated balance sheet of the Borrower as at the end of  such year and unaudited consolidating balance sheet of the Borrower ;

(B)               the related audited consolidated statements of income of the Borrower unaudited consolidating statements of income of the Borrower ; and
 
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(C)               the related audited consolidated statements of cash flows of the Borrower for such year;

setting forth in each case in comparative form the figures for the previous year, reported on without a “going concern” or like qualification or exception, or qualification arising out of the scope of the audit, by independent registered public accountants of nationally recognized standing; and

(ii)             with respect to each of the first three quarterly periods of each fiscal year of the Borrower, as soon as available, but in any event not later than the earlier of (y) 45 days after the end of each such quarterly period and (z) the date that the Borrower files its quarterly financial statements in accordance with the Exchange Act on Form 10-Q for each such quarterly period, a copy of:

(A)              the unaudited consolidating and consolidated balance sheet of the Borrower as at the end of such quarter;

(B)              the related unaudited consolidating and consolidated statements of income of the Borrower ; and

(C)              the related unaudited consolidated statement of cash flows of the Borrower for such quarter and the portion of the fiscal year through the end of such quarter;

setting forth in each case in comparative form the figures for the previous year, certified by the Borrower’s Chief Financial Officer as being fairly stated in all material respects (subject to normal year-end audit adjustments).

All such financial statements shall be complete and correct in all material respects and shall be prepared in reasonable detail and in accordance with GAAP applied consistently throughout the periods reflected therein and with prior periods (except as approved by such accountants or officer, as the case may be, and disclosed therein).

(b)            Monthly Financial Statements .  Borrower will submit to Lenders as soon as available, and in any case not later than thirty (30) days after the end of each month, operating statements, a balance sheet,  a detailed analysis of Capital Expenditures, and a detailed statement of profit and loss, in each case certified by Borrower’s chief financial or accounting officer, as presenting fairly in all material respects, in accordance with GAAP and Borrower’s consolidated financial condition as of the last day of such month and Borrower’s consolidated results of operations for such month and for the portion of Borrower’s’ fiscal year ending with such month, which reports shall include a brief commentary thereon and analysis thereof.  All such financial statements shall be presented in columns showing for each line item, actual monthly, actual year to date, prior year monthly and year to date and current budgeted monthly and year to date figures.
 
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(c)             Certification; Tax .  Together with each monthly and annual financial statement, Borrower will deliver to Agent and Lenders the certification of Borrower’s chief financial or accounting officer, in the form of Exhibit B attached hereto, to the effect that Borrower is in compliance with the terms and conditions of this Agreement, and setting forth in detail the calculation of all financial covenants, or, if Borrower is not in compliance, describing the nature of any noncompliance and the steps Borrower is taking or proposes to take to remedy the same.  Borrower will also submit to Agent and Lenders a copy of each Federal income tax return filed by it within seven days of the date of such filing.  Borrower shall also provide, (i) copies of any material contracts and amendments thereto, (ii) Borrower’s bank statements, and (iii) any other information that may be reasonably requested by Agent for periodic review.

(d)            Collateral Reports .  Concurrent with the execution of this Agreement by Borrower and concurrent with each request for a Revolving Loan pursuant to Section 2(a) , but no less frequently than as required by Item 26 of the Schedule , Borrower shall deliver to Lenders a fully completed Borrowing Base Certificate certified by the Chief Executive Officer or Chief Financial Officer of Borrower, as being true and correct in all material respects.  Concurrent with the delivery of each such Borrowing Base Certificate, Borrower shall provide a written report to Lenders of all materially significant disputes and claims, together with sales and other reports relating to the Accounts as required by Lenders. Borrower shall deliver to Agent and Lenders within ten (10) days after the end of each month a report, reflecting the status as of the end of each month and certified by the Chief Executive Officer or Chief Financial Officer of Borrower on behalf of Borrower, in each case, as being true and correct, containing (i) a current detailed aging, by total and by Customer, of Borrower’s Accounts and (ii) a current detailed aging, by total and by vendor, of Borrower’s accounts payable, in each case in a form and containing such information as is acceptable to Agent and the Lenders.

(e)          Bank Accounts .  Borrower shall at all times provide Agent with electronic “view-only” access to all their bank accounts.

(f)              Other Information .  Borrower will notify Agent and Lenders promptly (i) of any Default of which Borrower is aware, (ii) upon receipt by any Grantor of written notice from any governmental authority that it intends to commence an audit or that a Grantor has or may have violated any law, rule or regulation applicable to it or the terms or conditions of any permit or license it holds or is required to hold in connection with the conduct of its business, (iii) any amendment to its charter documents and any change in its management or authorized capital stock, (iv) upon receipt of any default notices under any Indebtedness, (v) any material labor and employment events, and (vi) upon the commencement of any material litigation, claim or action against it.  Borrower will provide to Agent and Lenders such other information (including non-financial information) as Lenders may from time to time reasonably request.

(g)         Non-Public Information . Agent and Lenders understand and agree that the information provided by Borrower pursuant to this Section 9 and certain other sections of this Agreement may constitute material non-public information, and Agent and Lenders agree that they will not use such information in violation of applicable law.
 
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10.            Inspection Rights; Expenses; Etc.

(a)             Field Examinations; Inspections .  Agent shall have the right, for not more than two times per year (unless a Default exists and is continuing hereunder, in which case the limitations of this Section 10(a) shall not apply), without hindrance or delay to conduct field examinations to inspect the Collateral, all other assets of any Grantor or any portion thereof, Grantor’s books and records and all other aspects of Grantor’s business, and to examine and make copies of Grantor’s records, the Collateral and all other assets of any Grantor or any portion thereof, in each case wherever located, and Agent may enter upon any Grantor’s premises for such purposes, in each case during normal business hours and following two business days’ notice.  Each Grantor will assist Agent in whatever way reasonable to make each such examination and inspection, and each Grantor agrees to pay for such examinations as more fully described on Item 27 of the Schedule .  Agent may discuss Grantor’s financial condition with Grantor’s independent accountants without liability to Lenders or such accountants.  Agent shall have full access to all records available to Grantors from any credit reporting service, bureau or similar service and shall have the right to examine and make copies of any such records.  Agent may provide a copy of this Agreement to such service and such service shall be entitled to rely on the provisions hereof in providing access to Agent as provided herein.

(b)             Performance by Agent .  Agent may, from time to time in Agent’s reasonable discretion for the benefit of the Lenders, perform any agreement of Borrower hereunder which Borrower fails to perform and take any other action reasonably necessary for the maintenance or preservation of any of the Collateral or Agent’s interest therein for the benefit of the Lenders, and Borrower agrees to reimburse Agent within ten days following written demand to Borrower for all of Agent’s reasonable expenses in connection with the foregoing (including, without being limited to, reasonable fees and expenses of legal counsel).

11.            Rights of Setoff, Application of Payments, Etc.   Agent and Lenders will be entitled to hold or set off all sums and all other property of each Grantor at any time to such Grantor’s credit or in Agent’s or Lenders’ possession by pledge or otherwise or upon or in which Agent or Lenders may have a Lien, as security for any and all of the Obligations.  Agent will have the right and is hereby irrevocably authorized and directed to charge to Borrower’s account the amounts of any and all such Obligations.  Recourse to the Collateral or other security for the Obligations will not at any time be required and Borrower hereby waives any right of marshalling Borrower may have.  Borrower’s obligation to pay or repay the Obligations is unconditional.  Borrower agrees that Agent may take such reasonable action with regard to the custody and collection of Accounts assigned to Agent as Agent may deem necessary.  Borrower irrevocably waives the right to direct the application of any and all payments and collections at any time or times hereafter received by Agent from or on behalf of Borrower, and Borrower hereby irrevocably agrees that Agent shall have the continuing exclusive right to apply and reapply any and all such payments and collections received at any time or times hereafter by Agent or its agent against the Obligations, in such manner and in such order as Agent may deem advisable.

12.            Attorney-in-Fact
 
(a)             Borrower hereby appoints and constitutes Agent as such Borrower’s attorney-in-fact: (i) to send verifications of Accounts to Customers: (ii) to endorse Borrower’s name upon any notes, acceptances, checks, drafts, money orders, and other evidences of payment that come into Agent’s or Lenders’ possession and to deposit or otherwise collect the same; (iii) to execute in Borrower’s name any financing statements, affidavits and notices with regard to any and all Lien rights; and (iv) to receive, open, and dispose of all mail addressed to Borrower that is delivered to Agent.
 
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(b)             During the continuance of Default, Borrower hereby appoints and constitutes Agent as such Borrower’s attorney-in-fact: (i) to notify the postal authorities to change the address and delivery of mail addressed to Borrower to such address as Agent may designate; (i) to sign Borrower’s name on any invoice or bill of lading relating to the Collateral, on drafts against Customers, and notices to Customers; (ii) to sign any agreement or certificate in connection with any insurance policy of such Borrower (including any documentation to receive benefit payments due thereunder or to cancel such insurance policy and receive a refund of the unearned premium with respect thereto); and (iii) to do all other acts and things necessary to carry out this Agreement.  All acts of said attorney-in-fact are hereby authorized, ratified and approved, and said attorney-in-fact will not be liable for any errors or mistake of fact or law, absent gross negligence.  This power, being coupled with an interest, is irrevocable while any of the Obligations remain unpaid or a Lender has any commitment to Borrower under this Agreement or otherwise.

13.            Defaults and Remedies.

(a)             Defaults .  For purposes of this Agreement, “Default” means the occurrence of any of the following events:

(i)              non-payment when due of principal or interest due and owing under the Loan;

(ii)             breach of any covenant or failure to perform any agreement or failure to meet any of Borrower’s or any other Loan Party’s obligations contained herein, in any other Loan Document or in any other agreement out of which any of the Obligations arose and, if curable, continuance of such breach or failure for twenty-five (25) days following the date of such breach or failure;

(iii)         any material statement, representation, or warranty made in writing in this Agreement, any other Loan Document or in any other writing or statement at any time furnished or made or deemed furnished or made by a Borrower or any other Loan Party pursuant to this Agreement or any other Loan Document to Agent or Lenders proves to have been untrue in any respect as of the date furnished or made or deemed furnished or made;

(iv)           Borrower’s default under any agreement for borrowed money which causes the acceleration of debt thereunder, provided that the amount of debt accelerated equals or exceeds the amount set forth on Item 28 of the Schedule or Borrower’s default under any other agreement involving more than the amount set forth on Item 28 of the Schedule ;

(v)            suspension of the operation of Borrower’s present business;

(vi)           any Loan Party becomes insolvent or unable to pay its debts as they mature, or admits in writing that it is insolvent or unable to pay its debts, makes an assignment for the benefit of creditors (other than Agent or Lenders), makes a fraudulent conveyance as to creditors under any state or federal law, or a petition under any provision of Title 11 of the United States Code, as amended, is filed (a) by any Loan Party or (b) by or against any Loan Party and not dismissed or discharged within sixty (60) days after such filing;
 
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(vii)         entry of any judgment by a court of competent jurisdiction in excess of the amount set forth on Item 29 of the Schedule against any Loan Party or creation, assertion, or filing of any judgment Lien or tax Lien against the property of any Loan Party in excess of such amount, which in the case of any such judgment remains undischarged for 30 days after such entry or filing;

(viii)        any Change of Control;

(ix)            termination, unenforceability or withdrawal of any Validity Agreement or other guaranty for the Obligations, or failure of any Loan Party to perform any of its material obligations under such a guaranty or assertion by any Loan Party that it has no liability or obligation under such a guaranty;

(x)             appointment of a receiver for the Collateral;

(xi)            seizure of a material portion of the Collateral by any Person other than Lenders;

(xii)          the occurrence of any act, omission, event or circumstance which has or will have with the passage of time a Material Adverse Effect (taking into account, together with all relevant considerations, any insurance coverage that has been acknowledged by the insurer);

(xiii)        the Pension Benefit Guaranty Corporation or the Department of Labor commences proceedings under ERISA to terminate any Borrower’s employee pension benefit plans; or

(xiv)        payment by the Borrower on any Subordinated Debt in violation of the applicable subordination agreement.

(b)             Remedies .  Upon the occurrence and during the continuance of a Default, the Agent may, and, upon the written request of the Required Lenders, shall, by written notice to the Borrower, take any or all of the following actions, without prejudice to the rights of the Agent or any Lender to enforce its claims against the Borrower or any Grantor, except as otherwise specifically provided for in this Agreement (provided, that, upon the occurrence of a Default specified in Section 13(a)(vi) hereof, the actions provided for in clauses (i) and (ii) below shall occur automatically without the giving of any notice):

(i)             terminate commitments, if any, to make Loans or to extend other financial accommodations to Borrower, and declare the entire principal amount of all Loans outstanding hereunder, all interest thereon, any unpaid fees and all other Obligations of any kind or nature to be, and thereupon the same will immediately become, due and payable in full;

(ii)             notify Customers that the Accounts have been assigned to Agent and that Agent has a security interest therein, collect them directly, and charge the collection costs and expenses to Borrower’s loan account;
 
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(iii)            (A) exercise any of its remedies under any other Loan Document, (B) apply any cash collateral to the Obligations (without limiting the foregoing, Agent may instruct any bank or other financial institution holding any cash, certificate of deposit or other Collateral to pay over such Collateral to Agent), and (C) draw on any letter of credit issued for the benefit of Agent in connection with this Agreement or any other Loan Document and apply the proceeds thereof to the Obligations;

(iv)           make such payments and do such acts as Agent considers necessary or reasonable to protect its security interest in the Collateral.  Borrower authorizes Agent to enter each premises where any Collateral is located, take and maintain possession of the Collateral, or any part of it, and to pay, purchase, contest or compromise any Lien which in Agent’s opinion appears to be prior or superior to its security interest and to pay all expenses incurred in connection therewith;

(v)            ship, reclaim, recover, store, finish, maintain, repair, prepare for sale, advertise for sale and sell the Collateral.  Any such sale may be either a public or private sale, or both, by way of one or more contracts or transactions, for cash or on terms.  It is not necessary that the Collateral be present at any such sale;

(vi)           without regard to any waste, adequacy of the security or solvency of Borrower, apply for the appointment of a receiver of the Collateral, to which appointment Borrower hereby consents, whether or not foreclosure or repossession proceedings have been commenced hereunder or under any other Loan Document and whether or not a foreclosure sale or secured party sale has occurred;

(vii)        cancel any insurance policy of Borrower’s in exchange for a refund of the unearned premium with respect thereto, and Borrower hereby authorizes any insurance company which has issued any such policy to make such payment directly to Agent for application to the Obligations; and

(viii)        exercise any of the remedies available to Agent as a secured party under the Uniform Commercial Code as in effect in any applicable jurisdiction, or otherwise available to Agent under applicable law.  Borrower agrees, upon Default and written notice thereof by Agent, to cease the sale or other disposition of the Collateral, except with Agent’s prior written consent, and to assemble at Borrower’s expense all the Collateral at a convenient place acceptable to Agent.  Agent may charge to Borrower’s loan account and Borrower will pay Agent upon demand all costs and expenses, including reasonable attorneys’ fees, in connection with:  (A) the liquidation of any Collateral; (B) obtaining or enforcing payment of the Obligations; (C) the settlement, adjustment, compromise, or litigation of Customer disputes; or (D) the prosecution or defense of any action or proceeding either against Agent or Lenders or against Borrower concerning any matter growing out of or in connection with this Agreement and/or any Collateral and/or any Obligations.  If at any time Agent pays any state, city, local, federal, or other tax or levy attributable to the Collateral, Borrower will repay to Agent the amount of tax so paid by Agent.  Borrower agrees that Agent may apply any proceeds from disposition of the Collateral first to satisfy obligations secured by Liens prior to Agent’s security interest.  Borrower will remain liable and will pay on demand any deficiencies arising upon the liquidation of any Collateral held by Agent.
 
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(c)              Notices .  If any notice of intended disposition of the Collateral or of any other act by Lenders is required by law and a specific time period is not stated therein, such notice, if given ten (10) days before such disposition or act, in accordance with the provisions of Section 15(a) , will be deemed reasonably and properly given.

(d)              License .  Borrower grants to Agent a non-exclusive license or other right to use, without charge, Borrower’s labels, patents, copyrights, rights of use of any name, trade secrets, trade names, trademarks and advertising matter, or any property of a similar nature, as it pertains to the Collateral, in completing production of, advertising for sale and selling any Collateral in connection with the exercise of remedies hereunder.

(e)              Remedies Cumulative .  Agent’s and Lenders’ rights and remedies under this Agreement and all other Loan Documents shall be cumulative.  Agent and Lenders shall have all other rights and remedies not inconsistent herewith as provided under the UCC, by law, or in equity.  No exercise by Agent or Lenders of one right or remedy shall be deemed an election, and no waiver by Agent or Lenders of any default on any Borrower’s part shall be deemed a continuing waiver.  No delay by Agent or Lenders shall constitute a waiver, election or acquiescence by it.

14.            Indemnification.   Grantors jointly and severally agree to defend, indemnify, and hold harmless Agent, Lenders and each of Agent’s and Lenders’ respective directors, officers, employees, Affiliates, representatives, attorneys and agents (each an “ Indemnified Person ”) from and against any and all penalties, fines, liabilities, damages, costs, or expenses of whatever kind or nature asserted against any such Indemnified Person, arising out of, or in any way related to this Agreement or any other Loan Document, or the transactions contemplated hereby or thereby, including by reason of the violation of any law or regulation relating to the protection of the environment or the presence, generation, disposal, release, or threatened release of any hazardous materials in connection with Grantors business on, at or from any property at any time owned or operated by a Grantor, including, without limitation, reasonable attorneys’ and consultants’ fees, investigation and laboratory fees, court costs, and litigation expenses actually incurred; provided that the foregoing indemnity will not apply to losses or related expenses to the extent the same are determined by a court of competent jurisdiction to have resulted from an Indemnified Person’s willful misconduct, gross negligence or bad faith.  Without limiting the foregoing, Grantors represent and warrant that no Grantor engaged or consulted with a loan broker or investment banker in connection with the transactions contemplated hereby other than the Maxim Group and Grantors agree to indemnify and hold Agent and Lenders harmless from any claim of compensation payable to any loan broker or investment banker engaged or otherwise associated with a Grantor in connection with the transactions contemplated hereby.

15.            Guaranty.

(a)             Guaranty of the Obligations. Subject to the provisions of clause (b), each Guarantor hereby irrevocably and unconditionally guaranties to Agent, for the benefit of Lenders, the due and punctual payment in full of all Obligations of the Borrower when the same shall become due, whether at stated maturity, by required prepayment, declaration, acceleration, demand or otherwise (including amounts that would become due but for the operation of the automatic stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. § 362(a)) (collectively, the "Guaranteed Obligations" ) .
 
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(b)            Payment by Each Guarantor.   Each Guarantor agrees, in furtherance of the foregoing and not in limitation of any other right which any Agent or Lenders may have at law or in equity against any Credit Party by virtue hereof, that upon the failure of Borrower to pay any of the Guaranteed Obligations when and as the same shall become due, whether at stated maturity, by required prepayment, declaration, acceleration, demand or otherwise (including amounts that would become due but for the operation of the automatic stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. § 362(a)), each Guarantor will upon demand pay, or cause to be paid, in cash, to Agent for the ratable benefit of Lenders, an amount equal to the sum of the unpaid principal amount of all Guaranteed Obligations then due as aforesaid, accrued and unpaid interest on such Guaranteed Obligations (including interest which, but for a Borrower’s becoming the subject of a case under the Bankruptcy Code, would have accrued on such Guaranteed Obligations, whether or not a claim is allowed against a Borrower for such interest in the related bankruptcy case) and all other Guaranteed Obligations then owed to Agent and Lenders as   aforesaid.

(c)             Liability of Guarantor Absolute.   Each Guarantor agrees that its obligations hereunder are irrevocable, absolute, independent and unconditional and shall not be affected by any circumstance which constitutes a legal or equitable discharge of a guarantor or surety other than payment in full of the Guaranteed Obligations. In furtherance of the foregoing and without limiting the generality thereof, each Guarantor agrees as follows:

(i)              this Guaranty is a guaranty of payment when due and not of collectability.  This Guaranty is a primary obligation of each Guarantor and not merely a contract of surety;

(ii)             Agent or the Required Lenders may enforce this Guaranty upon the occurrence and during the continuation of a Default notwithstanding the existence of any dispute between a Borrower and Agent or a Lender with respect to the existence of such Default;

(iii)           the obligations of each Guarantor hereunder are independent of the obligations of each other Loan Party (including any other Loan Party, as a Borrower or otherwise), of the obligations of Borrower, and a separate action or actions may be brought and prosecuted against each Guarantor whether or not any action is brought against a Borrower or any of such other Loan Parties and whether or not a Borrower is joined in any such action or actions;

(iv)           payment by each Guarantor of a portion, but not all, of the Guaranteed Obligations shall in no way limit, affect, modify or abridge each Guarantor's liability for any portion of the Guaranteed Obligations which has not been paid. Without limiting the generality of the foregoing, if Agent is awarded a judgment in any suit brought to enforce each Guarantor's covenant to pay a portion of the Guaranteed Obligations, such judgment shall not be deemed to release such Guarantor from its covenant to pay the portion of the Guaranteed Obligations that is not the subject of such suit, and such judgment shall not, except to the extent satisfied by each Guarantor, limit, affect, modify or abridge any other Guarantor's liability hereunder in respect of the Guaranteed Obligations;
 
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(v)            Agent or Lenders (and Borrower to the extent such consent is required), upon such terms as each deems appropriate, without notice or demand and without affecting the validity or enforceability hereof or giving rise to any reduction, limitation, impairment, discharge or termination of each Guarantor's liability hereunder, from time to time may (1) renew, extend, accelerate, increase the rate of interest on, subject to the terms of this Agreement or otherwise change the time, place, manner or terms of payment of the Guaranteed Obligations; (2) settle, compromise, release or discharge, or accept or refuse any offer of performance with respect to, or substitutions for, the Guaranteed Obligations or any agreement relating thereto and/or subordinate the payment of the same to the payment of any other obligations; (3) request and accept other guaranties of the Guaranteed Obligations and take and hold security for the payment hereof of the Guaranteed Obligations; (4) release, surrender, exchange, substitute, compromise, settle, rescind, waive, alter, subordinate or modify, with or without consideration, any security for payment of the Guaranteed Obligations, any other guaranties of the Guaranteed Obligations, or any other obligation of any Person (including any other Guarantor) with respect to the Guaranteed Obligations; (5) enforce and apply any security now or hereafter held by or for the benefit of Agent or Lenders in respect hereof or the Guaranteed Obligations and direct the order or manner of sale thereof, or exercise any other right or remedy that Agent or Lenders may have against any such security, in each case as Agent or Lenders in its discretion may determine consistent herewith and any applicable security agreement, including foreclosure on any such security pursuant to one or more judicial or nonjudicial sales, whether or not every aspect of any such sale is commercially reasonable, and even though such action operates to impair or extinguish any right of reimbursement or subrogation or other right or remedy of each Guarantor against a Borrower or any security for the Guaranteed Obligations; and (6) exercise any other rights available to it under the Loan Documents; and

(vi)          this Guaranty and the obligations of each Guarantor hereunder shall be valid and enforceable and shall not be subject to any reduction, limitation, impairment, discharge or termination for any reason (other than payment in full of the Guaranteed Obligations), including the occurrence of any of the following, whether or not each Guarantor shall have had notice or knowledge of any of them: (1) any failure or omission to assert or enforce, or the stay or enjoining, by order of court, by operation of law or otherwise, of the exercise or enforcement of, any claim or demand or any right, power or remedy (whether arising under the Loan Documents, at law, in equity or otherwise) with respect to the Guaranteed Obligations or any agreement relating thereto, or with respect to any other guaranty of or security for the payment of the Guaranteed Obligations; (2) any amendment or modification of, or any consent to departure from, any of the terms or provisions (including provisions relating to events of default) hereof, any of the other Loan Documents or any agreement or instrument executed pursuant thereto, or of any other guaranty or security for the Guaranteed Obligations, in each case whether or not in accordance with the terms hereof or such Loan Document, or any agreement relating to such other guaranty or security; (3) the Guaranteed Obligations, or any agreement relating thereto, at any time being found to be illegal, invalid or unenforceable in any respect; (4) the application of payments received from any source (other than payments received pursuant to the other Loan Documents or from the proceeds of any security for the Guaranteed Obligations, except to the extent such security also serves as collateral for Indebtedness other than the Guaranteed Obligations) to the payment of Indebtedness other than the Guaranteed Obligations, even though Agent or Lenders might have elected to apply such payment to any part or all of the Guaranteed Obligations; (5) Agent or Lenders’ consent to the change, reorganization or termination of the corporate structure or existence of Borrower or any of its Subsidiaries and to any corresponding restructuring of the Guaranteed Obligations; (6) any failure to perfect or continue perfection of a security interest in any collateral which secures any of the Guaranteed Obligations; (7) any defenses, set-offs or counterclaims which Borrower may allege or assert against Agent or Lenders in respect of the Guaranteed Obligations, including failure of consideration, breach of warranty, payment, performance, statute of frauds, statute of limitations, accord and satisfaction and usury, and (8) any other act or thing or omission, or delay to do any other act or thing, which may or might in any manner or to any extent vary the risk of each Guarantor as an Loan Party in respect of the Guaranteed Obligations.
 
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(d)             Waivers by Each Guarantor .  Each Guarantor hereby waives to the maximum extent permissible by law, for the benefit of Agent and Lenders: (i) any right to require Agent or Lenders, as a condition of payment or performance by each Guarantor, to (1) proceed against any Borrower, any other Loan Party of the Guaranteed Obligations or any other Person, (2) proceed against or exhaust any security held from such Borrower, any such other Guarantor or any other Person, (3) proceed against or have resort to any balance of any Deposit Account or credit on the books of Agent or Lenders in favor of such Borrower or any other Person, or (4) pursue any other remedy in the power of Agent or Lenders whatsoever; (ii) any defense arising by reason of the incapacity, lack of authority or any disability or other defense of such Borrower or any other Loan Party including any defense based on or arising out of the lack of validity or the unenforceability of the Guaranteed Obligations or any agreement or instrument relating thereto or by reason of the cessation of the liability of such Borrower or any other Loan Party from any cause other than payment in full of the Guaranteed Obligations; (iii) any defense based upon any statute or rule of law which provides that the obligation of a surety must be neither larger in amount nor in other respects more burdensome than that of the principal; (iv) any defense based upon Agent or Lenders’ errors or omissions in the administration of the Guaranteed Obligations, except behavior which amounts to bad faith, gross negligence or willful misconduct; (v) (1) any principles or provisions of law, statutory or otherwise, which are or might be in conflict with the terms hereof and any legal or equitable discharge of each Guarantor's obligations hereunder, (2) the benefit of any statute of limitations affecting each Guarantor's liability hereunder or the enforcement hereof, (3) any rights to set-offs, recoupments and counterclaims, and (4) promptness, diligence and any requirement that Agent or Lenders protect, secure, perfect or insure any security interest or lien or any property subject thereto; (vi) notices, demands, presentments, protests, notices of protest, notices of dishonor and notices of any action or inaction, including acceptance hereof, notices of default hereunder or any agreement or instrument related thereto, notices of any renewal, extension or modification of the Guaranteed Obligations or any agreement related thereto, notices of any extension of credit to such Borrower and notices of any of the matters referred to in clause (d) and any right to consent to any thereof; and (vii) any defenses or benefits that may be derived from or afforded by law which limit the liability of or exonerate each Guarantor or sureties, or which may conflict with the terms hereof.
 
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(e)             Guarantor’s Rights of Subrogation, Contribution, etc.   Until the Guaranteed Obligations shall have been indefeasibly paid in full and this Agreement shall have terminated, each Guarantor hereby waives, any claim, right or remedy, direct or indirect, that each Guarantor now has or may hereafter have against any Borrower or any other Loan Party or any of its assets in connection with this Guaranty or the performance by each Guarantor of its obligations hereunder, in each case whether such claim, right or remedy arises in equity, under contract, by statute, under common law or otherwise and including without limitation (i) any right of subrogation, reimbursement or indemnification that each Guarantor now has or may hereafter have against such Borrower with respect to the Guaranteed Obligations, (ii) any right to enforce, or to participate in, any claim, right or remedy that Agent or Lenders now has or may hereafter have against such Borrower, and (iii) any benefit of, and any right to participate in, any collateral or security now or hereafter held by Agent or Lenders. In addition, until the Guaranteed Obligations shall have been indefeasibly paid in full and this Agreement shall have terminated, each Guarantor shall withhold exercise of any right of contribution each Guarantor may have against any other Loan Party (including any other Guarantor) of the Guaranteed Obligations, including, without limitation, any such right of contribution as contemplated by clause (b) of this Section 15.   Each Guarantor further agrees that, to the extent the waiver or agreement to withhold the exercise of its rights of subrogation, reimbursement, indemnification and contribution as set forth herein is found by a court of competent jurisdiction to be void or voidable for any reason, any rights of subrogation, reimbursement or indemnification each Guarantor may have against such Borrower or against any collateral or security, and any rights of contribution each Guarantor may have against any such other Loan Party, shall be junior and subordinate to any rights Agent or Lenders may have against such Borrower, to all right, title and interest Agent or Lenders may have in any such collateral or security, and to any right Agent or Lenders may have against such other Loan Party. If any amount shall be paid to a Guarantor on account of any such subrogation, reimbursement, indemnification or contribution rights at any time when all Guaranteed Obligations shall not have been finally and indefeasibly paid in full, such amount shall be held in trust for Agent on behalf of Lenders and shall forthwith be paid over to Agent for the benefit of Lenders to be credited and applied against the Guaranteed Obligations, whether matured or unmatured, in accordance with the terms hereof.

(f)              Subordination of Other Obligations.   Any Indebtedness of any Borrower or any Grantor now or hereafter held by each Guarantor (the " Obligee Grantor ")   is hereby subordinated in right of payment to the Guaranteed Obligations, and any such indebtedness collected or received by the Obligee Grantor after a Default has occurred and is continuing shall be held in trust for Agent on behalf of Lenders and shall forthwith be paid over to Agent for the benefit of Lenders to be credited and applied against the Guaranteed Obligations but without affecting, impairing or limiting in any manner the liability of the Obligee Grantor under any other provision hereof.

(g)            Continuing Guaranty.   This Guaranty is a continuing guaranty and shall remain in effect until all of the Guaranteed Obligations shall have been paid in full and this Agreement shall have terminated. Each Guarantor hereby irrevocably waives, any right to revoke this Guaranty as to future transactions giving rise to any Guaranteed Obligations.

(h)            Financial Condition of Borrower .   Any Loan may be made to Borrower from time to time without notice to or authorization from any Guarantor regardless of the financial or other condition of a Borrower at the time of any such grant. Neither Agent nor Lenders shall have any obligation to disclose or discuss with each Guarantor its assessment, or each Guarantor's assessment, of the financial condition of Borrower. Each Guarantor has adequate means to obtain information from such Borrower on a continuing basis concerning the financial condition of such Borrower and its ability to perform its obligations under the Loan Documents, and each Guarantor assumes the responsibility for being and keeping informed of the financial condition of such Borrower and of all circumstances bearing upon the risk of nonpayment of the Guaranteed Obligations. Each Guarantor hereby waives and relinquishes, solely to the extent permitted by applicable law, any duty on the part of Agent or Lenders to disclose any matter, fact or thing relating to the business, operations or conditions of such Borrower now known or hereafter known by Agent or Lenders.
 
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(i)              Bankruptcy, etc.    So long as any Guaranteed Obligations remain outstanding, each Guarantor shall not, without the prior written consent of Agent acting pursuant to the instructions of Lenders, commence or join with any other Person in commencing any bankruptcy, reorganization or insolvency case or proceeding of or against such Borrower or any other Loan Party. The obligations of each Guarantor hereunder shall not be reduced, limited, impaired, discharged, deferred, suspended or terminated by any case or proceeding, voluntary or involuntary, involving the bankruptcy, insolvency, receivership, reorganization, liquidation or arrangement of any Borrower or any other Loan Party or by any defense which such Borrower or any other Loan Party may have by reason of the order, decree or decision of any court or administrative body resulting from any such proceeding.

Each Guarantor acknowledges and agrees that any interest on any portion of the Guaranteed Obligations which accrues after the commencement of any case or proceeding referred to in clause (i) above (or, if interest on any portion of the Guaranteed Obligations ceases to accrue by operation of law by reason of the commencement of such case or proceeding, such interest as would have accrued on such portion of the Guaranteed Obligations if such case or proceeding had not been commenced) shall be included in the Guaranteed Obligations because it is the intention of each Guarantor, Agent and the Lenders that the Guaranteed Obligations which are guaranteed by each Guarantor pursuant hereto should be determined without regard to any rule of law or order which may relieve any Borrower of any portion of such Guaranteed Obligations. Each Guarantor will permit any trustee in bankruptcy, receiver, debtor in possession, assignee for the benefit of creditors or similar person to pay Agent, or allow the claim of Agent in respect of, any such interest accruing after the date on which such case or proceeding is commenced.

In the event that all or any portion of the Guaranteed Obligations are paid by Borrower, the obligations of each Guarantor hereunder shall continue and remain in full force and effect or be reinstated, as the case may be, in the event that all or any part of such payment(s) are rescinded or recovered directly or indirectly from Agent or Lenders as a preference, fraudulent transfer or otherwise, and any such payments which are so rescinded or recovered shall constitute Guaranteed Obligations for all purposes hereunder.
 
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16.           General Provisions.

(a)              Notices .  All notices and communications hereunder and thereunder will be in writing.  Notices will be delivered personally or sent by overnight courier service, by certified or registered mail, postage pre-paid, or by facsimile or e-mail transmission and will be deemed received, in the case of personal delivery, when delivered; in the case of overnight courier service, on the next Business Day after delivery to such service; in the case of mailing, on the fourth Business Day after mailing; and, in the case of facsimile transmission, upon transmittal, with receipt confirmed. .  Any such notices shall be delivered or sent to the addresses set forth on Item 31 of the Schedule , or at the most recent address specified by the addressee through written notice under this provision.  Additionally, any notice under this Agreement via an email sent to the email address set forth in Item 31 of the Schedule , if sent by a system that will verify the date and time of delivery, and such email will be deemed received when the recipient’s server associated with the designated email address receives the email.

(b)             No Waiver .  No waiver hereunder will be valid unless in writing signed by Agent and the Required Lenders and then only to the extent therein stated.  No delay or failure on Agent’s and Lenders’ part in the exercise of any right or remedy hereunder will operate as a waiver thereof or of Lender’s right to exercise any other right or remedy.

(c)              Time of Essence .  Time is of the essence of this Agreement.

(d)              Severability .  Wherever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement will be prohibited by or invalid under applicable law, such provision will be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement.

(e)              Successors and Assigns .  Borrower’s, Agent’s and Lenders’ rights and obligations hereunder and under the other Loan Documents will inure to the benefit of Borrower’s, Agent’s and Lenders’ respective successors and assigns; provided, however, that Borrower acknowledges and agrees that without Agent’s and each Lender’s prior written consent, which may be withheld for any reason or no reason, Borrower may not assign its rights or obligations or any part thereof hereunder or under any other Loan Document to any other Person.  Notwithstanding anything herein to the contrary, Agent and Lenders may, without the consent of Borrower or any other Loan Party, grant a security interest in, sell or assign, grant or sell participations or otherwise transfer all or any portion of its rights and obligations hereunder and/or under one or more other Loan Documents to one or more other Persons.

(f)              Governing Law; Submission to Jurisdiction; Service; Etc.   This Agreement and the other Loan Documents shall be governed by and construed in accordance with the substantive laws (other than conflict of law provisions and principles) of the State of New York.  Each party hereto hereby consents to the non-exclusive jurisdiction of any United States Federal Court sitting in or with direct or indirect jurisdiction over the Southern District of New York or any New York state court sitting in New York, New York in any action, suit or other proceeding arising out of or relating to this Agreement or any of the other Loan Documents, and party hereto irrevocably agrees that all claims and demands in respect of any such action, suit or proceeding may be heard and determined in any such court and irrevocably waives, solely to the extent permitted by applicable law, any objection it may now or hereafter have as to the venue of any such action, suit or proceeding brought in any such court or that such court is an inconvenient forum.  Each party hereto waives personal service of any and all process upon it.  Each Grantor consents that all such service of process may be made by registered mail (return receipt requested) directed to each Grantor at Borrower’s address for notices pursuant to this Agreement, and service so made shall be deemed to be completed five (5) days after the same shall have been so deposited in the United States mails. Nothing herein shall limit the right of Agent or Lenders to bring proceedings against any Grantor or any of their respective Affiliates in the courts of any other jurisdiction.  Any judicial proceeding commenced by any party hereto involving, directly or indirectly, any matter in any way arising out of, related to or connected with any Loan Document shall be brought only in a United States Federal Court sitting in or with direct jurisdiction over the Southern District of New York or any New York state court sitting in New York, New York.  Nothing in this Agreement shall be deemed to operate or affect the right of Agent and Lenders to serve legal process in any other manner permitted by law or to preclude the enforcement by Lenders of any judgment or order obtained in such forum or the taking of any action under this Agreement or any other Loan Document to enforce same in any other appropriate forum or jurisdiction.
 
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(g)             Waiver of Jury Trial .  TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, EACH GRANTOR, AGENT AND LENDERS EACH HEREBY IRREVOCABLY AND EXPRESSLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM (WHETHER BASED UPON CONTRACT, TORT, OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT, THE OBLIGATIONS OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY OR ANY PARTY’S ACTIONS IN THE NEGOTIATION, ADMINISTRATION, OR ENFORCEMENT HEREOF OR THEREOF.  EACH GRANTOR, AGENT AND LENDERS EACH ACKNOWLEDGES THAT SUCH WAIVER IS MADE WITH FULL KNOWLEDGE AND UNDERSTANDING OF THE NATURE OF THE RIGHTS AND BENEFITS WAIVED HEREBY, AND WITH THE BENEFIT OF ADVICE OF COUNSEL OF ITS CHOOSING.

(h)             Expenses .  Borrower shall pay on demand all of Agent’s and Lenders’ costs and expenses in connection with underwriting and performing due diligence with respect to the transactions contemplated hereby and the preparation, negotiation, execution and delivery of this Agreement, including the reasonable fees and out-of-pocket expenses of Agent’s counsel.  Furthermore, shall pay on demand all of Agent’s and Lenders’ costs and expenses in connection with the administration and enforcement of this Agreement.  In addition, Borrower shall pay any and all stamp and other taxes and recording and filing fees payable in connection with the execution and delivery of all other instruments and documents to be delivered hereunder.  Such amounts may be charged by Agent to Borrower’s account as one or more Loans hereunder.  All provisions in this Agreement providing for the payment or reimbursement of Agent’s and Lenders’ attorneys’ fees and expenses shall be payable and shall include, without limitation, such fees and expenses incurred pursuant to or in connection with proceedings brought under 11 U.S.C., the Federal Bankruptcy Code.

(i)              Limitation of Liability for Certain Damages .  In no event shall Agent, Lenders or their respective Affiliates or any of their respective officers, directors, employees or agents be liable on any theory of liability for any special, indirect, consequential, exemplary or punitive damages (including any loss of profits, business or anticipated savings) in connection with this Agreement or any of the transactions contemplated hereby.  Each Borrower hereby waives, releases and agrees not to sue upon any such claim for any special, indirect, consequential or punitive damages, whether or not accrued and whether or not known or suspected to exist in its favor.
 
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(j)              Execution in Counterparts; Execution by Fax or E-Mail; Waiver of Acceptance .  This Agreement may be executed in separate counterparts, all of which shall constitute one and the same agreement.  Delivery of an executed counterpart of this Agreement or any other Loan Document by facsimile or e-mail shall be equally as effective as delivery of an original executed counterpart of this Agreement or such other Loan Document.  Any party delivering an executed counterpart of this Agreement or any other Loan Document by facsimile or e-mail also shall deliver an original executed counterpart of this Agreement or such other Loan Document, but the failure to deliver an original executed counterpart shall not affect the validity, enforceability, and binding effect of this Agreement or such other Loan Document.  To the fullest extent permitted by applicable law, each Borrower waives notice of Agent’s acceptance of this Agreement and the other Loan Documents.

(k)              No Third-Party Beneficiaries .  Neither (i) any stockholder or owner of any other equity interest in any Grantor, (ii) any Grantor’s employees or creditors (other than Lenders and each Lender’s Affiliates), nor (iii) any other Person claiming by or through any Grantor shall be entitled to rely on this Agreement or have any rights, remedies or claims against Agent, Lenders or any Affiliate of Agent or a Lender under or in connection with this Agreement.

(l)              Entire Agreement .  This Agreement and the other Loan Documents embody the entire agreement and understanding between Agent, Lenders and Borrower and supersede all prior agreements and understandings relating to the subject matter hereof.

(m)            Publication . Agent and any Lender may use and disclose any Grantor’s name, the amounts of the Loans, and general information on the purposes of the Loans in advertising and promotional materials. Subject to the requirements of law, FINRA and NASDAQ, Grantors shall not make public disclosure of any proposal by Agent or Lenders without the consent of Agent and Lenders, which consent shall not be unreasonably withheld or delayed.

(n)              Treatment of Certain Information .  To the extent requested or required by any regulatory authority, governmental or quasi governmental authority, or stock exchange or other self-regulatory organization purporting to have jurisdiction over a party hereto, such party shall be permitted to disclose information in connection with this Agreement, to the extent required by applicable law or regulations or by any subpoena or similar legal process.

(o)              Amendments to Loan Documents; Waivers .  No amendment or modification of any provision of this Agreement or any Loan Document shall be effective without the written agreement of the Required Lenders (after notice to all Lenders, which notice may be oral) and the Borrower, and no termination or waiver of any provision of this Agreement, or consent to any departure by the Borrower therefrom, shall in any event be effective without the written concurrence of the Required Lenders (after notice to all Lenders, which notice may be oral), which the Required Lenders shall have the right to grant or withhold in their sole discretion.  The Required Lenders, the Agent and the Borrower may, from time to time enter into written supplemental agreements to this Agreement or the other Loan Documents, for the purpose of adding or deleting any provisions or otherwise changing, varying or waiving in any manner the rights of the Agent, the Lenders, or the Borrower thereunder or the conditions, provisions or terms thereof or waiving any Default thereunder. Each such amendment, modification, waiver or supplemental agreement approved by or entered into by the Required Lenders and the Agent shall be binding upon each Lender.  Notwithstanding the foregoing, (a) the Agent, in its sole discretion, without the consent of the Required Lenders, may extend the Borrower’s time to comply with any non-financial covenants for up to an additional thirty (30) Business Days; and (b) the waiver of an Default described in Section 13(a)(i) or any Default relating to the Borrower’s financial covenants under Section 6 , or any amendment, modification or waiver of any provision relating to any of the following (each a “ Major Event ”) shall be effective only if consented to or approved by or on behalf of all Lenders:
 
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(i)              any increase of the Commitment, any Lenders’ pro rata share of the Commitment or the final maturity of the Loans, except as provided pursuant to Section 2(f) hereof;

(ii)             any reduction of interest rates applicable to the Loans;

(iii)           the forgiveness of any amount payable or receivable by the Lenders under Sections  2 and 3 hereof;

(iv)           the definition of “Required Lenders”;

(v)            release any Collateral from the Agent’s Lien, excluding any Collateral which is permitted to be sold or otherwise disposed of by the Borrower pursuant to this Agreement or any other Loan Document;

(vi)          the consent required to release any Guarantor;

(vii)         any change to Section 16(e) hereof permitting the Borrower to assign any of its rights or obligations hereunder without the consent of fewer than all of the Lenders;

(viii)        any modification of any duties or obligations of the Agent hereunder; and

(ix)            the provisions contained in this Section 16(o) .

No amendment, modification, termination or waiver of any provision of Section 17 hereof or any other provision referring to the Agent shall be effective without the written concurrence of the Agent. The Agent may, but shall have no obligation to, with the concurrence of any Lender, execute amendments, modifications, waivers or consents on behalf of such Lender.  Any waiver or consent shall be effective only in the specific instance and for the specific purpose for which it was given.  No notice to or demand on the Borrower in any case shall entitle the Borrower to any further notice or demand in similar or other circumstances.  Any amendment, modification, termination, waiver or consent effected in accordance with this Section 16(o) shall be binding on each Lender and each assignee, transferee or recipient of the Agent’s or any Lenders’ pro rata share of the Commitment or the Loans at the time outstanding.
 
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(p)             Ratable Sharing . Subject to Sections 2(a) and 17(h) of this Agreement and unless otherwise specifically stated herein, the Lenders agree among themselves that (i) with respect to all amounts received by them which are applicable to the payment of the Obligations, equitable adjustment will be made so that, in effect, all such amounts will be shared among them ratably in accordance with their pro rata shares, whether received by voluntary payment, by the exercise of the right of set off or banker’s lien, by counterclaim or cross action or by the enforcement of any or all of the Obligations or the Collateral, (ii) if any of them shall by voluntary payment or by the exercise of any right of counterclaim, set-off, banker’s lien or otherwise  (all of  which rights are expressly acknowledged by the Borrower), receive payment of a proportion of the aggregate amount of the obligations held by it which is greater than its pro rata share of the payments on account of the Obligations, the Lender receiving such excess payment shall purchase, without recourse or warranty, an undivided interest and participation (which it shall be deemed to have done simultaneously upon the receipt of such payment) in such obligations owed to the other Lenders so that all such recoveries with respect to such Obligations shall be applied ratably in accordance with their pro rata shares; provided, that if all or part of such excess payment received by the purchasing party is thereafter recovered from it, those purchases shall be rescinded and the purchase prices paid for such participation shall be returned to that party to the extent necessary to adjust for such recovery, but without interest except to the extent the purchasing party is required to pay interest in connection with such recovery.  The Borrower agrees that any Lender so purchasing a participation from another Lender pursuant to this Section 16(p) may, to the fullest extent permitted by law, exercise all of its rights of payment with respect to such participation as fully as if such Lender were the direct creditor of the Borrower in the amount of such participation.

(q)             Construction .  The parties have participated jointly in the negotiation and drafting of this Agreement and the other Loan Documents.  If an ambiguity or question of intent or interpretation arises as to any aspect of this Agreement or any other Loan Document, then it will be construed as if drafted jointly by the parties and no presumption or burden of proof will arise favoring or disfavoring any party by virtue of the authorship of any provision of this Agreement or any other Loan Document.

(r)              Confidentiality .  Each of the Agent and the Lenders agrees to maintain the confidentiality of the Information (as defined below) and to not use the Information for any purpose except in connection with the Loan Documents, except that Information may be disclosed (i) to its and its Affiliates’ directors, officers, employees, and agents, including accountants, legal counsel and other professionals, experts or advisors, or to any credit insurance provider relating to the Borrower and its obligations, in each case whom it reasonably determines needs to know such information in connection with this Agreement and the transactions contemplated hereby and who are informed of the confidential nature of such Information and instructed to keep such Information confidential, (ii) to any lender or other leverage provider to a Lender, and such lender or other leverage provider’s director, officers, employees,  and agents, including accountants, legal counsel and other professionals, experts or advisors, or to any credit insurance provider relating to the Borrower and its obligations, in each case whom it reasonably determines needs to know such information in connection with this Agreement and the transactions contemplated hereby and who are informed of the confidential nature of such Information and instructed to keep such Information confidential, (iii) to the extent requested by any rating agency or regulatory authority, examiner regulating banks or banking, or other self-regulatory authority having or claiming oversight over Agent, any Lender or any of their respective Affiliates, (iv) pursuant to the order of any court or administrative agency or in any pending legal, judicial or administrative proceeding, or otherwise as required by applicable laws or regulations or by any subpoena or similar legal process based on the advice of counsel (in which case the Agent or such Lender, as applicable, agrees, to the extent permitted by applicable law, to inform the Borrower promptly thereof), (v) to any other party to this Agreement, (vi) in connection with the exercise of any remedies hereunder or any suit, action or proceeding relating to this Agreement or the enforcement of rights hereunder, (vii) subject to an agreement containing provisions substantially the same as those of this Section, to any assignee, or any prospective assignee of, any of its rights or obligations under this Agreement, (viii) with the consent of the Borrower, (ix) to the extent such Information (A) becomes publicly available other than as a result of a breach of this Section, (B) becomes available to the Agent or any Lender on a nonconfidential basis from a source other than the Borrower or (C) is independently developed by the Agent or a Lender or (ix) for purposes of establishing a “due diligence” defense. In addition, the Agent and each Lender may disclose the existence of this Agreement and the information about this Agreement to market data collectors, similar services providers to the lending industry, and service providers to the Agent and the Lenders in connection with the administration and management of this Agreement and the other Loan Documents. For the purposes of this Section, “ Information ” means all memoranda or other information received from or on behalf of the Borrower relating to the Borrower or its business that is clearly identified by the Borrower as confidential, other than any such information that is available to the Agent or any Lender on a nonconfidential basis prior to disclosure by the Borrower. Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.
 
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EACH LENDER AND AGENT ACKNOWLEDGES THAT INFORMATION AS DEFINED IN THIS SECTION 16(R) FURNISHED TO IT PURSUANT TO THIS AGREEMENT MAY INCLUDE MATERIAL NON-PUBLIC INFORMATION CONCERNING THE BORROWER AND ITS RELATED PARTIES OR THEIR RESPECTIVE SECURITIES, AND CONFIRMS THAT IT HAS DEVELOPED COMPLIANCE PROCEDURES REGARDING THE USE OF MATERIAL NON-PUBLIC INFORMATION AND THAT IT WILL HANDLE SUCH MATERIAL NON-PUBLIC INFORMATION IN ACCORDANCE WITH THOSE PROCEDURES AND APPLICABLE LAW, INCLUDING FEDERAL AND STATE SECURITIES LAWS.

(s)              Representations of Agent and Lenders .  Each of Agent and the Lenders (collectively, “Lending Party”) represents and warrants for the benefit of the Grantors as follows:

(i)              Organization; Authority . Lending Party is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization with the requisite power and authority to enter into and to consummate the transactions contemplated by the Loan Documents to which it is a party and otherwise to carry out its obligations hereunder and thereunder.

(ii)             No Public Sale or Distribution . Lending Party is and will acquire each Warrant and any shares of Borrower’s capital stock issued or issuable under the Loan Documents (“Borrower Securities”) for its own account and not with a view towards, or for resale in connection with, the public sale or distribution thereof, except pursuant to sales registered or exempted under the Securities Act of 1933, as amended (“Securities Act”).  Lending Party does not have any agreement or understanding, directly or indirectly, with any Person to distribute any of the Borrower Securities.
 
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(iii)           Lender Status. At the time Lending Party was offered the Borrower Securities, it met, and as of the date hereof it meets, the definition of “accredited investor” as defined in Rule 501 promulgated under the Securities Act. Lending Party is not required to be registered as a broker-dealer under Section 15 of the Exchange Act.

(iv)          Reliance on Exemptions . Lending Party understands that the Borrower Securities are being offered and sold to it in reliance on specific exemptions from the registration requirements of United States federal and state securities laws and that Borrower is relying in part upon the truth and accuracy of, and Lending Party’s compliance with, the representations, warranties, agreements, acknowledgments and understandings of Lending Party set forth herein in order to determine the availability of such exemptions and the eligibility of Lending Party to acquire the Borrower Securities.

(v)            Information . Lending Party and its advisors, if any, have been furnished with all materials relating to the business, finances and operations of Borrower and materials relating to the offer and sale of the Borrower Securities which have been requested by Lending Party as of the date hereof.  Lending Party and its advisors, if any, have been afforded the opportunity to ask questions of Borrower.  Neither such inquiries nor any other due diligence investigations conducted by Lending Party or its advisors, if any, or its representatives shall modify, amend or affect Lending Party’s right to rely on Borrower’s representations and warranties contained herein or any representations and warranties contained in any other Loan Document or any other document or instrument executed and/or delivered in connection with this Agreement or the consummation of the transaction contemplated hereby. Lending Party understands that its investment in the Borrower Securities involves a high degree of risk. Lending Party has sought such accounting, legal and tax advice as it has considered necessary to make an informed investment decision with respect to its acquisition of the Borrower Securities.

(vi)          No Governmental Review .  Lending Party understands that no United States federal or state agency or any other government or governmental agency has passed on or made any recommendation or endorsement of the Borrower Securities or the fairness or suitability of the investment in the Borrower Securities nor have such authorities passed upon or endorsed the merits of the offering of the Borrower Securities.

(vii)         Transfer or Resale . Lending Party understands that the Borrower Securities have not been registered under the Securities Act or any state securities laws, and may not be offered for sale, sold, assigned or transferred unless (A) subsequently registered thereunder, (B) Lending Party shall have delivered to Borrower (or Borrower’s counsel has delivered to Borrower) an opinion of counsel to Lending Party, in a form reasonably acceptable to Borrower, to the effect that such Borrower Securities to be sold, assigned or transferred may be sold, assigned or transferred pursuant to an exemption from such registration, or (C) Lending Party provides Borrower with reasonable assurance that such Borrower Securities can be sold, assigned or transferred pursuant to Rule 144 promulgated under the Securities Act.
 
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(viii)       Validity; Enforcement .  This Agreement has been duly and validly authorized, executed and delivered on behalf of Lending Party and constitutes the legal, valid and binding obligations of Lending Party enforceable against Lending Party in accordance with their respective terms, except as such enforceability may be limited by general principles of equity or to applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and other similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies.

(ix)           No Conflicts .  The execution, delivery and performance by Lending Party of this Agreement and the other Loan Documents to which Lending Party is a party and the consummation by Lending Party of the transactions contemplated hereby and thereby will not (i) result in a violation of the organizational documents of Lending Party or (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which Lending Party is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment  or decree (including federal and state securities laws) applicable to Lending Party.

(x)             Residency . Lending Party’s residence, if an individual, or principal place of business, if an entity, is that jurisdiction specified on the signature page hereto next to Lending Party’s signature.

(xi)           General Solicitation . Lending Party is not purchasing the Borrower Securities as a result of any advertisement, article, notice or other communication regarding the Borrower Securities published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar.

(xii)          Legends . Lending Party understands that the certificates or other instruments representing the Borrower Securities have been and will be issued pursuant to an exemption from registration or qualification under the Securities Act and applicable state securities laws and, during any time that the resale of the Borrower Securities consisting of Borrower capital stock are not registered under the Securities Act or are not eligible for sale pursuant to Rule 144, the stock certificates representing such Borrower Securities shall bear any legend as required by the “blue sky” laws of any state and a restrictive legend in substantially the following form (and a stop-transfer order may be placed against transfer of such stock certificates):

THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS.  THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED, PLEDGED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL TO THE HOLDER, IN A FORM REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD OR ELIGIBLE TO BE SOLD PURSUANT TO RULE 144 UNDER SAID ACT.
 
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17.            Agent.

(a)             Appointment .  Each Lender hereby designates and appoints Full Circle Capital Corporation as its agent under this Agreement and the Loan Documents, and each Lender hereby irrevocably authorizes Agent to take such action or to refrain from taking such action on its behalf under the provisions of this Agreement and the Loan Documents and to exercise such powers as are set forth herein or therein, together with such other powers as are reasonably incidental thereto.  Agent is authorized and empowered to amend, modify, or waive any provisions of this Agreement or the other Loan Documents on behalf of Lenders. The provisions of this Section 17 are solely for the benefit of Agent and Lenders and neither Borrower nor any of its Affiliates shall have any rights as a third party beneficiary of any of the provisions hereof.  In performing its functions and duties under this Agreement, Agent shall act solely as an administrative representative of Lenders and does not assume and shall not be deemed to have assumed any obligation toward or relationship of agency or trust with or for Lenders, Borrower or any Loan Party.  Agent may perform any of its duties hereunder, or under the Loan Documents, by or through its agents or employees.

(b)             Reliance .  Agent shall be entitled to rely upon any written notices, statements, certificates, orders or other documents or any telephone message or other communication (in­cluding any writing, telex, telecopy or telegram) believed by it in good faith to be genuine and correct and to have been signed, sent or made by the proper Person, and with respect to all matters pertaining to this Agreement or any of the Loan Documents and its duties hereunder or thereunder, upon advice of counsel selected by it.  Agent shall be entitled to rely upon the advice of legal counsel, independent accountants, and other experts selected by Agent in its sole discretion.

(c)             Agent Individually .  With respect to the Loans made by it, Agent shall have and may exercise the same rights and powers hereunder and is subject to the same obligations and liabilities as and to the extent set forth herein for any other Lenders.  The terms “Required Lenders” or any similar terms shall, unless the context clearly otherwise indicates, include Agent in its individual capacity as a Lender or one of the Required Lenders.  Agent may lend money to, and generally engage in any kind of banking, trust or other business with any Loan Party as if it were not acting as Agent pursuant hereto.

(d)             Successor Agent .

(i)              Resignation.  Agent may resign from the performance of all its functions and duties hereunder at any time by giving at least thirty (30) Business Days' prior written notice to Borrower and Lenders.  Such resignation shall take effect upon the acceptance by a successor Agent of appointment pursuant to clause (ii) below or as otherwise provided below.

(ii)             Appointment of Successor.  Upon any such notice of resignation pursuant to clause (e)(i) above, the Required Lenders shall, upon receipt of Borrower’s prior consent which shall not unreasonably be withheld, appoint a successor Agent.  If a successor Agent shall not have been so appointed within said thirty (30) Business Day period, the retiring Agent, upon notice to Borrower, shall then appoint a successor Agent who shall serve as Agent until such time, as the Required Lenders, upon receipt of Borrower’s prior written consent which shall not be unreasonably withheld, appoint a successor Agent as provided above.
 
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(iii)           Successor Agent.  Upon the acceptance of any appointment as Agent under the Loan Documents by a successor Agent, such successor Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Agent, and the retiring Agent shall be discharged from its duties and obligations under the Loan Documents. The former Agent shall promptly transfer all Collateral held by it as Agent to the successor Agent.

(iv)          Notwithstanding anything to the contrary set forth herein, the Lenders holding not less than a majority of the outstanding amount of the principal of the Loans (excluding for purposes of this determination, amounts held by the Agent or its Affiliates) may remove the Agent if: (i) the Agent commits fraud, is grossly negligent or engages in willful misconduct in the performance of its duties under the Loan Documents, (ii) an Insolvency Event occurs with respect to the Agent or (iii) the Agent materially breaches its duties and such breach is continuing, provided that, in the cases of clause (i) and (iii) above, the Lenders shall have provided Agent with a detailed description of the activities that the Agent is alleged to have performed or failed to perform and the Agent shall have not cured or otherwise established that no such action or failure to act has occurred.

(v)            For purposes hereof, “Insolvency Event” shall mean that the Agent shall (i) have an order for relief entered with respect to it under any federal, state or foreign bankruptcy, insolvency, receivership, liquidation or similar law as now or hereafter in effect, (ii) make an assignment for the benefit of creditors, (iii) apply for, seek, consent to, or acquiesce in, the appointment of a receiver, custodian, trustee, examiner, liquidator or similar official for it or any substantial part of its property, (iv) institute any proceeding seeking an order for relief under any federal, state or foreign bankruptcy, insolvency, receivership, liquidation or similar law as now or hereafter in effect seeking to adjudicate it a bankrupt or insolvent, or seeking dissolution, winding up, liquidation, reorganization, arrangement, adjustment or composition of it or its debts under any such law relating to bankruptcy, insolvency or reorganization or relief of debtors, fail to file an answer or other pleading denying the material allegations of any such proceeding filed against it or file an answer admitting the material allegations of a petition filed against itself in any such proceeding, (v) dissolve, wind up or liquidate, (vi) take any corporate, organizational or similar action to authorize or effect any of the foregoing actions, or (vii) fail to contest in good faith any appointment or proceeding described in the foregoing.

(e)             Confirmation of Authority; Execution of Releases .  Without in any manner limiting Agent's authority to act without any specific or further authorization or consent by Lenders, Lenders agree to confirm in writing, upon request by Borrower, the authority to release any property covered by this Agreement or the Loan Documents.  So long as no Default is then continuing, upon receipt by Agent of confirmation from the Required Lenders, of its authority to release any particular item or types of property covered by this Agreement or the Loan Documents, and upon at least five (5) Business Days prior written request by Borrower, Agent shall (and is hereby irrevocably authorized by Lenders to) execute such documents as may be necessary to evidence the release of the Liens granted to Agent for the benefit of Lenders herein or pursuant hereto upon such Collateral; provided , however , that (i) Agent shall not be required to execute any such document on terms which, in Agent's opinion, would expose Agent to liability or create any obligation or entail any consequence other than the release of such Liens without recourse or warranty, and (ii) such release shall not in any manner discharge, affect or impair the Obligations or any Liens upon (or obligations of any Loan Party, in respect of), all interests retained by any Loan Party, including, without limitation, the proceeds of any sale, all of which shall continue to constitute part of the property covered by this Agreement or the Loan Documents.
 
49
(f)              Assignment to Agent .  In the event that the Agent requests the consent of a Lender hereunder and such consent is denied, then the Agent may, in its sole discretion, require such Lender to assign all of its rights and interests hereunder (including, without limitation, all or a portion of its Commitments owing to it), to the Agent or a designated Lender for a price equal to such Lender’s pro rata share of the outstanding Commitments plus accrued and unpaid interest and fees due to such Lender, which interest and fees shall be paid to such Lender when collected from the Borrower. If the Agent elects to require any Lender to assign its rights and interest to the Agent or a designated Lender, the Agent shall so notify such Lender within forty-five (45) days following such Lender’s denial of such consent, and such Lender shall assign its rights and interest by no later than five (5) Business Days following receipt of such notice by execution and delivery of an Assignment and Acceptance.

(g)             Discretionary Advances . The Agent is hereby authorized by the Borrower and the Lenders, from time to time in the Agent’s sole discretion, after the occurrence and during the continuation of a Default, to make Loans to the Borrower on behalf of the Lenders which the Agent, in its reasonable business judgment, deems necessary or desirable (a) to preserve or protect the Collateral, or any portion thereof, (b) to enhance the likelihood of, or maximize the amount of, repayment of the Loans and other Obligations, or (c) to pay any other amount chargeable to the Borrower pursuant to the terms of this Agreement or any other Loan Document; provided, that at any time after giving effect to any such Loans, the outstanding Loans do not exceed the Term Loan Commitment.

(h)             Distribution; Application; Apportionment . Not less than once per month, or more frequently at the Agent’s election (each a “ Settlement Date ”), the Agent shall advise each Lender by telephone, telecopy or email of the amount of each Lender’s pro rata share of all principal, interest and fees received by the Agent for the ratable account of the Lenders since the prior Settlement Date.  Such payments received by the Agent shall be paid to the Lenders not later than 4:00 p.m. (New York time) on the Business Day following each payment by or on behalf of Borrower.  Payments received by the Agent after 12:00 noon (New York time) shall be deemed to have been received by the Agent on the next Business Day.  So long as there does not exist a Default, all payments of principal and interest in respect of outstanding Loans and any late charges with respect thereto, all payments of the fees described in this Agreement, and all payments in respect of any other Obligations shall be allocated among such of the Lenders as are entitled thereto, in proportion to their respective pro rata shares or otherwise as provided herein.  The Agent shall promptly distribute to each Lender at its primary address set forth on the appropriate counterpart signature page hereof or on the Assignment and Acceptance, or at such other address as a Lender may request in writing, such funds as it may be entitled to receive, provided, that, the Agent shall in any event not be bound to inquire into or determine the validity, scope or priority of any interest or entitlement of any Lender and may suspend all payments and seek appropriate relief (including without limitation instructions from the Required Lenders or an action in the nature of interpleader) in the event of any doubt or dispute as to any apportionment or distribution contemplated hereby.  The order of priority herein is set forth solely to determine the rights and priorities of the Lenders as among themselves and may at any time or from time to time be changed by the Lenders as they may elect, in writing, without necessity of notice to or consent of or approval by the Borrower or any other Person.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
 
50
IN WITNESS WHEREOF, Grantors, Agent and Lenders have executed this Loan, Guaranty and Security Agreement as of the day and year first above written.
 
GRANTORS:
   
   
SRB-MT, LLC
RICEBRAN TECHNOLOGIES
   
       
   
By:
/s/ J. Dale Belt
By:
/s/ J. Dale Belt
Name: J. Dale Belt
Name: J. Dale Belt
Title: Secretary & VP  
Title: Secretary & Exec. VP/CFO
   
   
SRB-WS, LLC  
NUTRACEA, LLC
   
       
   
By:
/s/ J. Dale Belt
By:
/s/ J. Dale Belt
Name: J. Dale Belt  
Name: J. Dale Belt  
Title: Secretary & VP  
Title: Secretary & VP  
   
   
SRB-IP, LLC  
RICE RX, LLC
   
       
   
By:
/s/ J. Dale Belt
By:
/s/ J. Dale Belt
Name: J. Dale Belt  
Name: J. Dale Belt
Title: Secretary & VP  
Title: Secretary & VP
   
   
HEALTHY NATURAL, INC.  
RICE SCIENCE LLC
   
       
   
By:
/s/ J. Dale Belt
By:
/s/ J. Dale Belt
Name: J. Dale Belt  
Name: J. Dale Belt
Title: Secretary & VP  
Title: Secretary & VP
   
   
THE RICEX COMPANY
SRB-MERM, LLC
   
 
   
By:
/s/ J. Dale Belt
By:
/s/ J. Dale Belt
Name: J. Dale Belt  
Name: J. Dale Belt
Title: Secretary & VP  
Title: Secretary & VP
   
 
SRB-LC, LLC
RICEX NUTRIENT, INC.  
 
       
By:
/s/ J. Dale Belt
By:
/s/ J. Dale Belt
Name: J. Dale Belt
Name: J. Dale Belt  
Title: Secretary & VP
Title: Secretary & VP  
 
[Signature Page  to Loan Agreement]
 
 
Agreed to and accepted this 12th day of May, 2015.
 
AGENT AND LENDER
 
FULL CIRCLE CAPITAL CORPORATION
     
By:
/s/ Gregg Felton
 
Name: 
Gregg Felton
 
Title:
President and Chief Executive Officer

[Signature Page  to Loan Agreement]
 
SCHEDULE

1.                       Borrowing Base
"Borrowing Base" means, at any time, an amount equal to:
 
(A)
90% of the dollar amount of Eligible Accounts;
 
plus
 
 
(B)
60% of the dollar amount of Eligible Inventory (not to exceed 85% of net orderly liquidation value);
 
minus
 
 
(C)
the sum of such reserves as Agent may reasonably establish from time to time in its discretion.
 
2.                      Accounts Eligibility
 
(a)              Accounts Age:  Any Account with respect to which more than sixty (60) days have elapsed since the date of the original invoice therefor;

(b)              Cross-Aging Percentage:   20%

(c)              Concentration Limit:   20%, but 35% with respect to Zurvita and its Affiliates

3.                     Permitted Liens

Existing Liens and financing statements:

Entity
Date
Lienholder
Number
Rice Science, LLC
1/18/12
Subordinated Creditors*
12-20208381
Rice Science, LLC
1/20/12
Harold Guy Delemarter, Brian Rick Delamarter, and Greg Vislocky*
12-20253957
The RiceX Company
1/18/12
Subordinated Creditors*
12-20208134
The RiceX Company
1/20/12
Harold Guy Delemarter, Brian Rick Delamarter, and Greg Vislocky*
12-20253957
The RiceX Company
1/20/12
Harold Guy Delemarter, Brian Rick Delamarter, and Greg Vislocky*
20127298013063
Rice Science, LLC
1/20/12
Harold Guy Delemarter, Brian Rick Delamarter, and Greg Vislocky*
20127298013063
* The term "Subordinated Creditors" is defined in the Subordination Agreement. Each of Harold Guy Delemarter, Brian Rick Delamarter, and Greg Vislocky is a party to the Subordination Agreement and is a subordinated creditor under the Subordination Agreement.
 
4.                     Persons Authorized to Request Loans
Dale Belt
John Short
Dennis Dykes

5.                      Omitted

6.                      Conditions To Initial Loans

Items listed below are required to be delivered, in form and substance satisfactory to Agent in its sole discretion, and the other conditions described below are required to be satisfied in a manner satisfactory to Agent in its sole discretion, in each case as a condition to each Lender's obligation to fund the initial Loans on the Closing Date to Borrower under this Agreement.

Certified certificate of incorporation of each Grantor or other equivalent constituent document.

Bylaws or Operating Agreements of each Grantor

Secretary's certificate as to constituent documents, operating agreements, authorizing action (e.g., corporate resolutions) and incumbency of officers/status and specimen signatures of authorized signers

Good Standing Certificate (state of organization and all other states in which each Borrower is qualified to do business, except as would not result in a Material Adverse Effect)

UCC lien search results

Payoff letter from any lender whose loans are to be refinanced from proceeds of Loans made under this Agreement

Lien termination documents from existing lender, any other creditor whose filings are to be terminated, etc.

Mortgages

Collateral Assignment of Agreements

Pledge Agreements

Assignment of Intellectual Property Rights

Fee Letter

Validity Agreements
 
Subordination Agreements

Warrants

Financial statements

Minimum total liquidity of $1,000,000 at closing, inclusive of cash on hand and availability of Revolving Loans

Quality of Earnings Report and Appraisal Report satisfactory to Agent in its sole discretion

UCC-1 financing statements

Evidence of insurance and delivery of certificates and endorsements naming Agent and Lenders as additional insured and lender's loss payee

Landlord waivers

Officer's certificate as to representations, warranties and no defaults

Opinion letter of Borrower's legal counsel

Post-Closing letter (which shall include the requirement to obtain landlord waivers)

All other items described on the Schedule of Closing Documents previously delivered by Agent or Agent's counsel to Borrower or Borrower's legal counsel

Such other agreements, documents, instruments, certificates and other items as Agent or its counsel may reasonably request

7.                      Termination Date

This Agreement will terminate on June 1, 2018; provided that the Borrower may request, not later than ninety (90) days prior to the then scheduled maturity date, and the Agent and Lender in their sole discretion may grant up to two (2) one-year extensions of the maturity date, subject to the payment of extension fee equal to 2% of the then outstanding Term Loan and Revolving Commitment for each one-year extension.

8.                      Interest Margin : 10.75%

9.                     Default Margin : 3.0%

10.                  Fees

a.                     Upon execution of this Agreement, in consideration of Agent's structuring, approving and committing to this Agreement, but without affecting Borrower's obligation to reimburse Agent for costs associated with this Agreement and the transactions contemplated hereby as provided elsewhere in this Agreement, Borrower agrees to pay Agent a fee in the amount of 3.0% of the Term Loan Commitment and the Revolver Commitment, which will be fully earned on the Closing Date and non-refundable when paid.
 
b.                     For services performed by Agent in connection with Agent's continuing administration hereof, Borrower shall pay to Agent an annual fee in an amount equal to 0.25% of the average unused portion of the Revolver Commitment, payable monthly in arrears on the first Business Day of each month.

c.                     In consideration of Agent's collateral monitoring activities, Borrower will pay Agent a fee in an amount equal to 0.25% per annum of the sum of (i) on the Revolver Commitment, (ii) the outstanding principal balance of the Term Loan and (iii) the outstanding principal balance of any additional liens under Section 2(g) hereof, payable monthly in arrears on the first Business Day of each calendar month and on the Maturity Date or other termination date of this Agreement (with the portion of such fee payable on the Maturity Date or other termination date to be calculated for the period from the first day of the month during which the Maturity Date or other termination date occurs through the Maturity Date or other termination date), beginning on the first such date following the Closing Date.

d.                     In the event that the Term Loan is prepaid for any reason, or the Revolver Commitment is reduced or terminated, Borrower will pay to Agent on or prior to the effective date of such termination or prepayment at the following premiums expressed as a percentage of the amount terminated or prepaid based upon the event triggering such prepayment or termination:

Pay Date
 
Premium
 
Prior to June 1, 2016
 
No call
 
June 1, 2016 to May 31, 2017
   
101%
 
Thereafter
   
100%
 

e.                      Upon any advance of additional loans pursuant to Section 2(g) hereof, the Borrower shall pay to the Agent for the benefit of the Lender or Lenders making such advance, a fee equal to 3.0% of such advance.

All of the foregoing fees constitute compensation to Agent and Lenders for services rendered and are not interest or a charge for the use of money.  Each installment of such fees shall be fully earned when due and payable and shall not be subject to refund or rebate.

11.                  Organizational Information

Exact Legal Name of Grantor:  RiceBran Technologies
State of Organization: California
Type of Organization:  Corporation
Organizational Identification Number:  C2082847

Exact Legal Name of Grantor:  Healthy Natural Inc.
State of Organization:  Nevada
Type of Organization:  Corporation
Organizational Identification Number: E0257892008-6
 
Exact Legal Name of Grantor:  NutraCea, LLC
State of Organization:  Delaware
Type of Organization:  Limited Liability Company
Organizational Identification Number:  5104887

Exact Legal Name of Grantor:   Rice Rx, LLC
State of Organization:  Delaware
Type of Organization:  Limited Liability Company
Organizational Identification Number: 4479497

Exact Legal Name of Grantor: Rice Science, LLC
State of Organization: Delaware
Type of Organization:  Limited Liability Company
Organizational Identification Number:  4479495

Exact Legal Name of Grantor:  The RiceX Company
State of Organization:  Delaware
Type of Organization:  Corporation
Organizational Identification Number: 2890978

Exact Legal Name of Grantor: RiceX Nutrients, Inc.
State of Organization:  Montana
Type of Organization:  Corporation
Organizational Identification Number:  D088913

Exact Legal Name of Grantor:   SRB-MERM, LLC
State of Organization:  Delaware
Type of Organization:  Limited Liability Company
Organizational Identification Number: 5104876

Exact Legal Name of Grantor:   SRB-LC, LLC
State of Organization: Delaware
Type of Organization:  Limited Liability Company
Organizational Identification Number:  5104880

Exact Legal Name of Grantor:   SRB-MT, LLC
State of Organization:  Delaware
Type of Organization:  Limited Liability Company
Organizational Identification Number: 5104881

Exact Legal Name of Grantor:  SRB-WS, LLC
State of Organization: Delaware
Type of Organization:  Limited Liability Company
Organizational Identification Number:  5104883

Exact Legal Name of Grantor:  SRB-IP, LLC
State of Organization:  Delaware
Type of Organization:  Limited Liability Company
Organizational Identification Number: 5104886
 
12.                  Subsidiaries and Investments in Other Persons :

Subsidiaries of the Registrant
State or Other Jurisdiction of Incorporation
Grain Enhancement, LLC (2) (6)
Delaware limited liability company
Nutra SA, LLC (3)
Delaware limited liability company
Healthy Natural Inc. (1)
Nevada
Industria Riograndens De Oleos Vegetais Ltda (4)
Limited liability company organized under the laws of the
 
Federative Republic of Brazil
NutraCea, LLC (1)
Delaware limited liability company
RBT PRO, LLC (8)
Delaware limited liability company
Rice Rx, LLC (1)
Delaware limited liability company
Rice Science LLC (1)
Delaware limited liability company
The RiceX Company (1)
Delaware corporation
RiceX Nutrients, Inc. (5)
Montana corporation.
SRB- MERM, LLC (7)
Delaware limited liability company
SRB-LC, LLC (7)
Delaware limited liability company
SRB-MT, LLC (7)
Delaware limited liability company
SRB-WS, LLC (7)
Delaware limited liability company
SRB- IP, LLC (7)
Delaware limited liability company

(1)                    wholly owned subsidiary of RiceBran Technologies
(2)                    47.5% interest
(3)                   66.1% interest
(4)                   wholly owned subsidiary of Nutra SA, LLC
(5)                   wholly owned subsidiary of The RiceX Company
(6)                    inactive
(7)                   wholly owned subsidiary of NutraCea, LLC
(8)                   50.0 % interest

13.                  Pending Litigation :
None.

14.                  Existing Debt and Guarantees :
The Subordinated Debt

15.                  Prior Legal Names : NutraCea.

Prior or Current Trade or Fictitious Names :  None.


16.                  Locations of Offices and Collateral :

Current Chief Executive Office of Borrower :
6720 N. Scottsdale Road, Suite # 390
Scottsdale, Arizona 85253
 
Other Current Collateral Locations :
1575 East Bench Rd., Dillon, MT 59725
3512 E. Bench Road, Dillon, MT 59725
179 Court 15 th Street, Mermentau, LA 70556
170 South 13 th Street, Mermentau, LA 70556
3000, 3002, 3010 Skyway Circle N, Irving, TX 75038
2224 Industrial Boulevard, West Sacramento, CA 95691
2928 Ramco Street, Suite 120, West Sacramento, CA 95691
1603 Old Highway 99, Arbuckle, CA 95912
5029 Joe Spears Rd., Iowa, LA 70647

17.                  Ownership Structure :
Common stock is publicly traded.

18.                  Owned Real Property :
1575 East Bench Rd., Dillon, MT 59725
170 South 13 th Street, Mermentau, LA 70556
5029 Joe Spears Rd., Iowa, LA 70647

Leased Real Property (including legal name of landlord and monthly rent) :
Amended Lease Dated May 16, 2017 between Sacramento Southport LLC, as Landlord, and RiceBran Technologies, as tenant, related to the 27,203 sq. ft. of warehouse and office area located at 2928 Ramco Street, West Sacramento, California.

Amended Office Lease dated November 23, 2009 between Scottsdale Spectrum, LLC, as Landlord, and RiceBran Technologies, as tenant, related to the 256,670 rentable sq. ft. located at 6720 North Scottsdale Road, Scottsdale, Arizona.

Warehouse Lease dated April 15, 2007 between Farmer's Rice Milling Company, Inc., as landlord, RiceBran Technologies, as tenant, related to the approximately 12,000 square feet of land, Joe Spears Road, Lake Charles, Louisiana.

Amended Ground Lease dated November 1, 2008 between Farmer's Rice Milling Company, Inc., as landlord, and RiceBran Technologies, as tenant, related to the 5.107 acres, South of Joe Spears Road, Lake Charles, Louisiana.

Warehousemen, processors, consignees or other bailees in possession or control of any Inventory (include name, address where Inventory is stored and description of the arrangement) :
None

19.                  Bank Accounts : Grantors maintain the following deposit accounts:

Borrower/Bank
Account Number

 
19A.              Intellectual Property :

Patents:
THE RICEX COMPANY:
Patent #
Reel/Frame
5512287
030591/0960
5985344
030591/0960
6126943
030591/0960
6303586
030591/0960
6350473
030591/0960
6558714
030591/0960
6733799
030591/0960

NUTRACEA / RICEBRAN TECHNOLOGIES:

Patent #
Reel/Frame
5512287
030591/0960
5985344
030591/0960
6126943
030591/0960
6303586
030591/0960
6350473
030591/0960
6558714
030591/0960
6733799
030591/0960
6902739
030591/0960
6902739
030591/0933

Trademarks:

THE RICEX COMPANY:

Ser#
Reg#
Reel/Frame
Mark
78769744
3317370
5044/0485
RICE X

NUTRACEA / RICEBRAN TECHNOLOGIES:

Ser#
Reg#
Reel/Frame
Mark
76045704
2461604
5044/0485
RISOLUBLES
76070970
2461745
5044/0485
NutraStar Incorporated
76313803
2658784
5044/0485
NutraStar Incororated
77187242
3375432
5044/0485
MAX-E-BRAN SRB
77383574
3581499
5044/0485
RIBALANCE

77396048
3501581
5044/0485
NUTRACEA STABILIZED RICE BRAN
77597273
3652856
5044/0485
PELOTAS
77670444
3948284
5044/0485
RIPROSPORT
78075504
2659543
5044/0485
EQUINE SHINE STABILIZED RICE BRAN
78288835
2979145
5044/0485
CEA 100
78596468
3256988
5044/0485
DR. VETZ
78769744
3317370
5044/0485
RICE X
78777214
3229286
5044/0485
THE RICE PATTY COLLECTION
78791191
3410639
5044/0485
SERVING MANKIND
85451243
4266719
5044/0485
NUTRITION BY NATURE
8573998
4512804
5044/0485
RICEBRAN TECHOLOGIES
85741574
NONE
5044/0485
RICEBRAN TECH
85741584
4573008
5044/0485
RICEBRANTECH
85799060
NONE
5044/0485
STABILIZED RICE BRAN
85882576
4683405
5044/0485
PRORYZA
85882594
NONE
5044/0485
RIBRANPRO

19B.              Labor Matters .
None

20.                 Commercial Tort Claims :
None

21.                 Financial Covenants :

(a)                   Total Debt to Adjusted EBITDA:  Borrower shall maintain at all times, on a consolidated basis, Total Debt to Adjusted EBITDA not to exceed the following as of the end of each month in the following quarterly periods:

Qtr. Ended
Ratio
Covenant
6/30/2015
5.00x
9/30/2015
4.00x
12/31/2015
4.00x
3/31/2016
3.50x
6/30/2016
3.00x
9/30/2016
2.50x
12/31/2016
2.50x
3/31/2017
2.00x
6/30/2017
2.00x
9/30/2017
2.00x

(b)                   Senior Debt to Adjusted EBITDA:  Borrower shall maintain at all times, on a consolidated basis, Senior Debt to Adjusted EBITDA not to exceed the following as of the end of each month in the following quarterly periods.

Qtr. Ended
Ratio
Covenant
6/30/2015
3.00x
9/30/2015
2.50x
12/31/2015
2.00x
3/31/2016
2.00x
6/30/2016
2.00x
9/30/2016
2.00x
12/31/2016
2.00x
3/31/2017
1.50x
6/30/2017
1.50x
9/30/2017
1.50x
 
(c)                   Adjusted EBITDA to Fixed Charges: Borrower shall maintain at all times, on a consolidated basis, Adjusted EBITDA to Fixed Charges of not less than the following as of the end of each month in the following quarterly periods:

Qtr. Ended
Ratio
Covenant
6/30/2015
1.50x
9/30/2015
1.50x
12/31/2015
1.50x
3/31/2016
2.00x
6/30/2016
2.00x
9/30/2016
2.00x
12/31/2016
2.00x
3/31/2017
2.50x
6/30/2017
2.50x
9/30/2017
2.50x

(d)                   Maximum Capital Expenditures: For the year ended December 31, 2015, the Grantors may incur Capital Expenditures funded solely with the proceeds of the Term Loan A (the "Funded CapEx") in an amount up to $2,500,000, provided that to the extent the entire Funded Capex is not spent in 2015, and remaining amount may be spent prior to June 30, 2016.  The Funded CapEx shall not be included in the calculation of Fixed Charges and any Funded CapEx spent prior to June 30, 2016 shall not limit the amount of Capital Expenditures that may be incurred in 2016 in accordance with the following sentence. For the year ended December 31, 2016, the Grantors shall not incur Capital Expenditures funded by internal cash flow in excess of $600,000 per calendar year.

(e)                   Minimum Liquidity.  The Grantors shall at all times maintain cash on hand, including availability under the Revolving Commitment, of not less than $2,000,000, provided that at least $1,000,000 of such amount must be in the form of cash on hand.
 
(f)                    Max Leverage Ratio. Solely with respect to determining whether additional loans shall be advanced pursuant to Section 2(g) hereof, after giving effect to such additional loans, the ratio (the "Max Leverage Ratio") of Senior Debt to Run-Rate EBITDA shall not exceed 2.5x.

Qtr. Ended
Max Lev.
Ratio
6/30/2015
2.50x
9/30/2015
2.50x
12/31/2015
2.50x
3/31/2016
2.50x
6/30/2016
2.50x
9/30/2016
2.50x
12/31/2016
2.50x
3/31/2017
2.50x
6/30/2017
2.50x
9/30/2017
2.50x

22.                 Permitted Purchase Money Debt :     $200,000.

23.                 Omitted

24.                  Omitted

25.                  Omitted

26.                 Borrowing Base Certificates :   Borrower shall deliver to Agent a Borrowing Base Certificate no less frequently than monthly (by the tenth day of each month and determined as of the close of business on the last Business Day of the immediately preceding month).

27.                  Field Examinations :  Borrower agrees to pay to Agent customary fees and disbursements relating to field examinations of the Collateral, Borrower, Borrower's business and Borrower's books and records, which, as of the Closing Date, are $1,000.00 per day per examiner plus all of the reasonable, documented out-of-pocket examination costs and travel and other expenses incurred by such examiners. Absent a Default, Agent may perform up to two (2) field examinations per calendar year.  Borrower hereby agrees that Agent may perform additional field examinations as required in Agent's reasonable discretion, but absent a Default hereunder the cost of any such field examinations shall be borne by Agent.

28.                 Cross Default Amount :  $175,000

29.                  Judgment Cross Default Amount : $175,000

30.                  Omitted
 
31.                 Notice Addresses :

 
If to Grantors :
 
c/o RiceBran Technologies
 
6720 N. Scottsdale Road, Suite # 390
 
Scottsdale, Arizona 85253
 
Attn: Office of the CFO
 
Email: dbelt@ricebrantech.com

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

 
Weintraub Tobin
 
400 Capitol Mall, 11 th Flr
 
Sacramento, CA 95814
 
Attn: Christopher Chediak
 
Email: Chediak@weintraub.com


If to Agent or Lenders :
Full Circle Capital Corporation, as Agent
 
102 Greenwich Avenue,
 
2 nd Floor
 
Greenwich, CT  06830
 
Attn.: Gregg J. Felton
 
Email:  gfelton@fcfcapital.com

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

 
LeClairRyan, A Professional Corporation
 
One Riverfront Plaza
 
1037 Raymond Boulevard, Sixteenth Floor
 
Newark, NJ 07102
 
Attn:  James T. Seery
 
Facsimile No.:  973-491-3415
 
Email:  james.seery@leclairryan.com

EXHIBIT A

Form of Borrowing Base Certificate

RiceBran Technologies
Borrowing Base Certificate
Report Date:  Month Day, Year
Certificate Date: Month Day, Year
Certificate #  Input Number

I.
Gross Accounts Receivable
 
$
-
 
II.
Less: Ineligible
   
-
 
III.
Eligible Accounts Receivable
   
-
 
           
IV.
Eligible Accounts Receivable
 
$
-
 
V.
Advance Rate
   
90.00
%
VI.
Net Eligible A/R Collateral - (Eligible A/R Collateral x Advance Rate)
   
-
 
           
VII.
Less: Reserves
   
-
 
           
VIII.
Gross Inventory
 
$
   
IX.
Less:  Ineligible
   
-
 
X.
Eligible Inventory
 
$
   
           
XI.
Eligible Inventory
 
$
   
XII
Advance Rate
   
60.00
%
XIII.
Net Eligible Inventory Collateral - (Eligible Inventory Collateral x Advance Rate)
   
-
 
           
XIV.
Total Eligible Collateral
 
$
-
 
           
XV.
Obligation Limit - the lesser of:
       
 
(a) Borrowing Limit
 
$
3,500,000
 
 
(b) Eligible Collateral
   
-
 
 
Obligation Limit
   
-
 
           
XVI.
Obligation Amount
       
 
Beginning Principal Balance (Prior Certificate)
 
$
-
 
 
Plus: Advances
   
-
 
 
Less: Principal Payments (net of interest/adjustments)
   
-
 
           
 
Obligation Amount
   
-
 
           
XVII.
Borrowing Base Surplus / (Borrowing Base Deficiency)
 
$
-
 
           
XVII . 
Advance Request
 
$
-
 

The undersigned hereby represents and warrants that this report is true and accurate as of the date hereof, in accordance with the terms and conditions of the Loan, Guaranty and Security Agreement ("LGSA") dated ___________, 2015.   Capitalized terms used herein and otherwise defined herein shall have the meanings specified in the LGSA.
 
By :
Name:
Title:
Date:

EXHIBIT B

FORM OF COMPLIANCE CERTIFICATE

[to be provided on Borrower's letterhead]

__________________, 201__
 
Full Circle Capital Corporation
102 Greenwich Avenue
2 nd Floor
Greenwich, CT  06830

The undersigned, the [__________] of RiceBran Technologies certifies in [his/her] official capacity as [__________] and not individually, to Full Circle Capital Corporation, a Maryland corporation, as Agent and as Lender under that certain Loan, Guaranty and Security Agreement dated as of __________, 2015 between Borrower, Agent, Lender and certain other parties (as the same may be amended, restated, amended and restated, supplemented or otherwise modified from time to time, the " Loan Agreement ").  Capitalized terms used in this Certificate, unless otherwise defined herein, shall have the meanings ascribed to them in the Loan Agreement.

No Default exists on the date hereof, other than: [__________] [if none, so state].

Set forth on Appendix 1 attached hereto is a correct calculation with respect to the financial covenants of Borrower under the Loan Agreement as of [__________].

 
Yours truly,
   
 
RICEBRAN TECHNOLOGIES
   
 
By:
 
 
Name:
 
 
Title:
 


[Covenant Calculations]
 
 
Exhibit 10.2
 
TERM LOAN NOTE

$2,500,000
May 12, 2015
 
New York, New York

FOR VALUE RECEIVED, the undersigned,   RICEBRAN TECHNOLOGIES , a California corporation (“ Borrower ”), HEREBY UNCONDITIONALLY PROMISES TO PAY to FULL CIRCLE CAPITAL CORPORATION , as agent on behalf of the Lenders (as defined in the Agreement referred to herein), and its successors and assigns (“ Agent ”), for its account, on behalf of Lenders (as defined in the Agreement referred to herein), on the Maturity Date (as defined in the Agreement referred to herein), TWO MILLION FIVE HUNDRED THOUSAND AND 00/100 DOLLARS ($2,500,000), as set forth in the Agreement.

Borrower promises to pay interest on the unpaid principal amount hereunder from the date hereof until such principal amount is paid in full, at the interest rates as provided in the Agreement.

Both principal and interest are payable, at such times as are specified in the Agreement, in lawful money of the United States of America and in immediately available funds at Agent’s office at 102 Greenwich Avenue, 2 nd Floor, Greenwich, Connecticut 06830, or at such other place as Agent may from time to time designate in writing.

This Term Loan Note is the evidence of the Term Loan referred to in, and is subject to and is entitled to the benefits of, that certain Loan, Guaranty and Security Agreement, dated as of May 12, 2015 (as same may be amended, restated, amended and restated, supplemented, renewed, extended, replaced, or otherwise modified from time to time, the “ Agreement ”), by and among Borrower, Agent and Lenders.  The Agreement, among other things, contains provisions for acceleration of the maturity hereof upon the happening of certain stated events and also for prepayments on account of principal hereof prior to the maturity hereof upon the terms and conditions therein specified.

The Term Loan made by Agent, for the benefit of Lenders, to Borrower pursuant to the Agreement may, but is not required to be, endorsed by Agent on the schedule attached hereto, or on a continuation of such schedule attached to and made a part hereof.

This Term Loan Note shall be governed by and construed in accordance with the substantive laws (other than conflict of law provisions and principles) of the State of New York.

All capitalized terms herein shall have the same meaning as set forth in the Agreement, except as otherwise specifically defined herein.

 [ Remainder of Page Intentionally Left Blank
Signature Page Follows.]
 
IN WITNESS WHEREOF, the undersigned Borrower has executed this Term Loan Note as of the date set forth above.

 
RICEBRAN TECHNOLOGIES,
 
a California corporation
   
 
By:
/s/ J. Dale Belt
 
J. Dale Belt, CFO and Executive VP

 
Exhibit 10.3
 
REVOLVING LOAN NOTE

$3,500,000.00
May 12, 2015
 
New York, New York

FOR VALUE RECEIVED, the undersigned,   RICEBRAN TECHNOLOGIES , a California corporation (“ Borrower ”), HEREBY UNCONDITIONALLY PROMISES TO PAY to FULL CIRCLE CAPITAL CORPORATION , as agent on behalf of the Lenders (as defined in the Agreement referred to herein), and its successors and assigns (“ Agent ”), for its account, on behalf of Lenders (as defined in the Agreement referred to herein), on the Maturity Date (as defined in the Agreement referred to herein), THREE MILLION FIVE HUNDRED THOUSAND AND 00/100 DOLLARS ($3,500,000), as set forth in the Agreement.

Borrower promises to pay interest on the unpaid principal amount hereunder from the date hereof until such principal amount is paid in full, at the interest rates as provided in the Agreement.

Both principal and interest are payable, at such times as are specified in the Agreement, in lawful money of the United States of America and in immediately available funds at Agent’s office at 102 Greenwich Avenue, 2 nd Floor, Greenwich, Connecticut 06830, or at such other place as Agent may from time to time designate in writing.

This Revolving Loan Note is the evidence of the Revolving Loan referred to in, and is subject to and is entitled to the benefits of, that certain Loan, Guaranty and Security Agreement, dated as of May 12, 2015 (as same may be amended, restated, amended and restated, supplemented, renewed, extended, replaced, or otherwise modified from time to time, the “ Agreement ”), by and among Borrower, Agent and Lenders.  The Agreement, among other things, contains provisions for acceleration of the maturity hereof upon the happening of certain stated events and also for prepayments on account of principal hereof prior to the maturity hereof upon the terms and conditions therein specified.

The Revolving Loan made by Agent, for the benefit of Lenders, to Borrower pursuant to the Agreement may, but is not required to be, endorsed by Agent on the schedule attached hereto, or on a continuation of such schedule attached to and made a part hereof.

This Revolving Loan Note shall be governed by and construed in accordance with the substantive laws (other than conflict of law provisions and principles) of the State of New York.

All capitalized terms herein shall have the same meaning as set forth in the Agreement, except as otherwise specifically defined herein.
 
[ Remainder of Page Intentionally Left Blank
Signature Page Follows.]
 
IN WITNESS WHEREOF, the undersigned Borrower has executed this Revolving Loan Note as of the date set forth above.

 
RICEBRAN TECHNOLOGIES,
 
a California corporation
     
 
By:
/s/ J. Dale Belt
   
J. Dale Belt, CFO and Executive Vice President
 

Exhibit 10.4
 
INTELLECTUAL PROPERTY SECURITY AGREEMENT
 
This INTELLECTUAL PROPERTY SECURITY AGREEMENT (“IP Security Agreement”) is made and entered into on the terms and conditions hereinafter set forth, by and between RiceBran Technologies, NutraCea, LLC, SRB-IP, LLC, SRB-MERM, LLC,  SRB-LC, LLC, SRB-MT, LLC, SRB-WS, LLC, RiceX Company, RiceX Nutrients, Inc., Rice Science, LLC, Rice Rx, LLC and Healthy Natural, Inc. (collectively, “Grantor”), and Full Circle Capital Corporation, a Maryland corporation (“Agent” and a “Lender”), as of May 12, 2015.

RECITALS:

WHEREAS, the Grantor has requested that Agent and Lenders provide Grantor with a secured lending facility; and

WHEREAS, the Grantor acknowledges that the proceeds of the Loans made under the Loan, Guaranty and Security Agreement between Grantor, Agent and Lenders of even date herewith (the “Agreement”), will, directly and indirectly, materially benefit Grantor; and

WHEREAS, as a condition to Lenders’ making the Loans to Grantor, Grantor has executed and delivered to Agent and Lenders the Agreement;
 
WHEREAS, under the terms of the Agreement, Grantor has granted to Agent and Lenders a security interest in, among other property, certain intellectual property of Grantor and has agreed to execute and deliver this IP Security Agreement for recording with national, federal and state government authorities, including, but not limited to, the United States Patent and Trademark Office and the United States Copyright Office.
 
NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Grantor, Agent and Lenders agree as follows:
 
1.                      Grant of Security . Grantor hereby pledges and grants to Agent and Lenders a security interest in and to all of the right, title and interest of Grantor in, to and under the following, wherever located, and whether now existing or hereafter arising or acquired from time to time (the “ IP Collateral ”):
 
(a)                      the patents and patent applications set forth in Schedule 1 hereto and all reissues, divisions, continuations, continuations-in-part, renewals, extensions and reexaminations thereof and amendments thereto (the “ Patents ”);
 
(b)                     the trademark registrations and applications set forth in Schedule 2 hereto, together with the goodwill connected with the use of and symbolized thereby and all extensions and renewals thereof (the “ Trademarks ”), excluding only United States intent-to-use trademark applications to the extent that and solely during the period in which the grant of a security interest therein would impair, under applicable federal law, the registrability of such applications or the validity or enforceability of registrations issuing from such applications;
 
(c)                      the copyright registrations, applications and copyright registrations and applications exclusively licensed to Grantor set forth in Schedule 3 hereto, and all extensions and renewals thereof (the “ Copyrights ”);
 
(d)                      all rights of any kind whatsoever of Grantor accruing under any of the foregoing provided by applicable law of any jurisdiction, by international treaties and conventions and otherwise throughout the world;
 
(e)                      any and all royalties, fees, income, payments and other proceeds now or hereafter due or payable with respect to any and all of the foregoing; and
 
(f)                      any and all claims and causes of action, with respect to any of the foregoing, whether occurring before, on or after the date hereof, including all rights to and claims for damages, restitution and injunctive and other legal and equitable relief for past, present and future infringement, dilution, misappropriation, violation, misuse, breach or default, with the right but no obligation to sue for such legal and equitable relief and to collect, or otherwise recover, any such damages
 
2.                      Recordation . Grantor authorizes the Commissioner for Patents, the Commissioner for Trademarks and the Register of Copyrights and any other government officials to record and register this IP Security Agreement upon request by Agent, on behalf of Lenders. Lenders covenant to file the with the foregoing government officials and authorize Grantors to execute and file, on their behalf upon, the documents necessary to release the IP Collateral upon termination of the Agreement.
 
3.                      Loan Documents . This IP Security Agreement has been entered into pursuant to and in conjunction with the Agreement, which is hereby incorporated by reference. The provisions of the Agreement shall supersede and control over any conflicting or inconsistent provision herein. The rights and remedies of Agent on behalf of Lenders with respect to the IP Collateral are as provided by the Agreement and related documents, and nothing in this IP Security Agreement shall be deemed to limit such rights and remedies. Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Loan Agreement.
 
4.                      Execution in Counterparts . This IP Security Agreement may be executed in any number of counterparts and by different parties to this IP Security Agreement in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same IP Security Agreement.  Facsimile and electronic signatures shall be acceptable and shall have the same effect as original signatures, and signatures may be transmitted by telecopy, electronic mail, or otherwise.
 
5.                     Successors and Assigns . Whenever in this IP Security Agreement one of the parties hereto is named or referred to, the heirs, legal representatives, successors, successors-in-title and assigns of such parties shall be included, and all covenants and agreements contained in this IP Security Agreement by or on behalf of Grantor or by or on behalf of Agent or Lenders shall bind and inure to the benefit of their respective heirs, legal representatives, successors-in-title and assigns, whether so expressed or not; provided that Grantor may not assign or otherwise transfer any of its rights or obligations under this IP Security Agreement without the prior written consent of Agent on behalf of Lenders.
 
6.                     Governing Law . This IP Security Agreement and any claim, controversy, dispute or cause of action (whether in contract or tort or otherwise) based upon, arising out of or relating to this IP Security Agreement and the transactions contemplated hereby and thereby shall be governed by, and construed in accordance with, the laws of the United States and the State of New York, without giving effect to any choice or conflict of law provision or rule (whether of the State of New York or any other jurisdiction).

 [Signatures appear on the following page(s)]
 
IN WITNESS WHEREOF, the parties hereto have executed or have caused this Intellectual Property Security Agreement to be executed by their duly authorized officers as of the date first set forth above.
 
RICEBRAN TECHNOLOGIES
 
SRB-MT, LLC
     
By:
/s/ J. Dale Belt
  By:
/s/ J. Dale Belt
Name:
J. Dale Belt
  Name:
J. Dale Belt
Title:
Secretary & Exec. VP/CFO
  Title:
Secretary & VP
     
NUTRACEA, LLC
 
SRB-WS, LLC
     
By:
/s/ J. Dale Belt
  By:
/s/ J. Dale Belt
Name:
J. Dale Belt
  Name:
J. Dale Belt
Title:
Secretary & VP
  Title:
Secretary & VP
     
RICE RX, LLC
 
SRB-IP, LLC
     
By:
/s/ J. Dale Belt
  By:
/s/ J. Dale Belt
Name:
J. Dale Belt
  Name:
J. Dale Belt
Title:
Secretary & VP
  Title:
Secretary & VP
     
RICE SCIENCE LLC
 
HEALTHY NATURAL, INC.
     
By:
/s/ J. Dale Belt
  By:
/s/ J. Dale Belt
Name:
J. Dale Belt
  Name:
J. Dale Belt
Title:
Secretary & VP
  Title:
Secretary & VP
     
SRB-MERM, LLC
 
THE RICEX COMPANY
     
By:
/s/ J. Dale Belt
  By:
/s/ J. Dale Belt
Name: 
J. Dale Belt
  Name: 
J. Dale Belt
Title:
Secretary & VP
  Title:
Secretary & VP
     
SRB-LC, LLC
 
RICEX NUTRIENT, INC.
     
By:
/s/ J. Dale Belt
  By:
/s/ J. Dale Belt
Name:
J. Dale Belt
  Name:
J. Dale Belt
Title:
Secretary & VP
  Title:
Secretary & VP
 
 
AGENT
     
 
FULL CIRCLE CAPITAL CORPORATION
     
 
By:
/s/ Gregg Felton
 
Name: 
Gregg Felton
 
Title:
President and Chief Executive Officer

 
Exhibit 10.5
 
PLEDGE AGREEMENT
 
THIS PLEDGE AGREEMENT (" Agreement "), dated as of May 12, 2015, is executed and delivered by RiceBran Technologies (" Pledgor ") in favor of the Agent (as defined below).RECITALS:
 
WHEREAS, Pledgor is the holder of record of the Equity Interests described in Exhibit A hereto (the " Pledged Securities ") issued by Nutra SA, LLC, a Delaware limited liability company, in which Pledgor owns a majority interest, and those wholly owned subsidiaries of Pledgor, all as further described in Exhibit A (each, an " Issuer " and collectively, the " Issuers ");
 
WHEREAS, Pledgor and Full Circle Capital Corporation, a Maryland corporation (herein referred to as " Agent "), are parties to a Loan, Guaranty and Security Agreement dated of even date herewith (as may be amended, modified, restated, supplemented, extended or renewed from time to time, the " Loan Agreement ") wherein Agent has agreed, subject to the terms and conditions specified therein and in the Loan Documents, on behalf of the Lender thereto, to extend in favor of Pledgor a senior secured credit facility; and
 
WHEREAS, Pledgor holds the Equity Interests of the Issuers described in Exhibit A hereto and will benefit directly from the loans made to Pledgor under the Loan Agreement; and
 
WHEREAS, as additional security for all of the Obligations, the Agent requires that the Pledgor execute and deliver this Agreement and grant the security interests contemplated hereby.
 
NOW, THEREFORE, in consideration of the premises and the covenants hereinafter contained, and to induce the Lender to enter into the Loan Agreement and make the loans under the Loan Agreement, it is agreed as follows:
 
1.                 Definitions .  Unless otherwise defined herein, terms defined in the Loan Agreement are used herein as therein defined, and the following shall have (unless otherwise provided elsewhere in this Agreement) the following respective meanings (such meanings being equally applicable to both the singular and plural form of the terms defined):
 
 " Agreement " shall mean this Pledge Agreement, including all amendments, modifications and supplements and any exhibits or schedules to any of the foregoing, and shall refer to the Agreement as the same may be in effect at the time such reference becomes operative.
 
" Bankruptcy Code " shall mean Title 11, United States Code, as amended from time to time, and any successor statute thereto.
 
"Equity Interests" means any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any and all equivalent ownership interests in a Person (other than a corporation), including, without limitation, partnership interests and membership interests, and any and all warrants, rights or options to purchase or other arrangements or rights to acquire any of the foregoing.
 
1
" Event of   Default " shall mean any of the following events:
 
(a)              there shall occur any "Default" under the Loan Agreement, as such term is defined therein;
 
(b)              any of the Pledged Collateral shall be attached or levied upon or seized in any legal proceedings, or held by virtue of any Lien or distress, which, in each case, shall continue undischarged or unstayed for sixty (60) days;
 
(c)              breach of any covenant or failure to perform any agreement or obligation set forth in this Agreement not cured within 15 days following the date of written notice of such breach; or
 
(d)              Pledgor makes any representations or warranties in this Agreement or in any certificate or statement furnished at any time hereunder or thereunder or in connection herewith or therewith which proves to have been untrue or misleading in any material respect when made or furnished and which continues to be untrue or misleading in any material respect.
 
"Person" means an individual, corporation, partnership, limited liability company, association, trust, unincorporated organization, government or any agency or political subdivision thereof, or any other entity.
 
"Pledge Amendment" has the meaning assigned to such term in Section 6.4 hereof.
 
" Pledged Collateral " shall have the meaning assigned to such term in Section 2 hereof.
 
"Pledged Securities" shall have the meaning assigned to such term in the Recitals hereof.
 
"Pledgor" shall have the meaning assigned to such term in the Preamble hereof.
 
"Securities Laws" shall have the meaning assigned to such term in Section 8.4 hereof.
 
2.                Pledge .  Pledgor hereby pledges, conveys, hypothecates, mortgages, assigns, sets over, delivers and grants to the Agent, on behalf of the Lender, a security interest in all of the following (collectively, the " Pledged Collateral "):
 
2.1              All of the issued and outstanding Equity Interests of the Issuers owned by Pledgor including, without limitation, (i) the Pledged Securities and the certificates representing such Pledged Securities, and (ii) upon and during the continuation of an Event of Default, all dividends, distributions, cash, instruments and other property or proceeds from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of such Equity Interests; and
 
2.2              Any additional Equity Interests of the Issuers or other options or rights with respect to any such Equity Interests from time to time acquired by Pledgor in any manner (which Equity Interests shall be deemed to be part of the Pledged Securities).
 
2
3.                 Security for Obligations .  This Agreement secures, and the Pledged Collateral is security for, the payment and performance of all of the Obligations.
 
4.                Delivery of Pledged Collateral .  All certificates representing or evidencing the Pledged Securities (if any) shall be delivered to and held by the Agent pursuant hereto and shall be accompanied by duly executed instruments of transfer or assignment in blank, all in form and substance reasonably satisfactory to the Agent.  The Agent shall have the right, in its reasonable discretion and without notice to the Pledgor at any time upon the occurrence and continuance of an Event of Default, to transfer to or to register in the name of the Agent, or any of its nominees, subject to the terms of this Agreement, any or all of the Pledged Securities.  In addition, the Agent shall have the right at any time following and during the continuance of an undisputed Event of Default to exchange certificates or instruments representing or evidencing Pledged Securities (if any) for certificates or instruments of smaller or larger denominations.
 
5.                 Representations and Warranties .  Pledgor represents and warrants to the Agent that:
 
5.1              Pledgor is, and at the time of delivery of the Pledged Securities to the Agent pursuant to Section 4 hereof will be, the only holder of record of the Pledged Collateral free and clear of any Lien thereon or affecting the title thereto except for the Lien created by this Agreement, any Lien that is a Permitted Liens under the Loan Agreement, and any liens consented to in writing by Agent (the " Permitted Liens ").
 
5.2              As of the date hereof, the Pledged Securities included in the Pledged Collateral constitute the percentage of the issued and outstanding Equity Interests of the Issuers as is set forth on Exhibit A attached hereto.  All of the Pledged Securities have been duly authorized, validly issued and are fully paid and non-assessable.
 
5.3              Pledgor has the right and requisite authority to pledge, assign, transfer, deliver, deposit and set over the Pledged Collateral to the Agent as provided herein.
 
5.4              None of the Pledged Securities of Pledgor has been issued or transferred in violation of the securities registration, securities disclosure or similar laws of any jurisdiction to which such issuance or transfer may be subject.  Pledgor's execution and delivery of this Agreement and the pledge of the Pledged Collateral hereunder does not, directly or indirectly, violate or result in a violation of any such laws.
 
5.5              None of the Pledged Securities of Pledgor included in the Pledged Collateral is, as of the date of this Agreement, Margin Stock (as such term is defined in 12 C.F.R. Section 207), and Pledgor shall, promptly after learning thereof, notify the Agent of any Pledged Collateral which is or becomes Margin Stock and execute and deliver in favor of the Agent any and all instruments, documents and agreements (including, but not limited to Form U‑1) necessary to cause the pledge of such Margin Stock to comply with all applicable laws, rules and regulations.
 
3
5.6              No   consent, approval, authorization or other order of any Person and no consent, authorization, approval, or other action by, and no notice to or filing with, any governmental departments, commissions, boards, bureaus, agencies or other instrumentalities, domestic or foreign, is required to be made or obtained by Pledgor either (a) for the pledge of the Pledged Collateral pursuant to this Agreement or for the execution, delivery or performance of this Agreement by Pledgor or (b) for the exercise by the Agent of the voting or other rights provided for in this Agreement or the remedies in respect of the Pledged Collateral of Pledgor pursuant to this Agreement, except (i) for the filing of Uniform Commercial Code (" UCC ") financing statements and other actions, notices or filings as may be necessary to perfect the security interests granted hereby and (ii) as may be required in connection with such disposition by laws affecting the offering and sale of securities generally.
 
5.7              The pledge, assignment and delivery of the Pledged Collateral pursuant to this Agreement will create a valid Lien on and, subject to Pledgee's compliance with applicable law, a perfected security interest in the Pledged Collateral pledged by Pledgor, and the proceeds thereof, securing the payment of the Obligations.
 
5.8              This Agreement has been duly authorized, executed and delivered by Pledgor and constitutes a legal, valid and binding obligation of Pledgor enforceable in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, or other similar laws affecting the rights of creditors generally or by the application of general equity principles.
 
The representations and warranties set forth in this Section 5 shall survive the execution and delivery of this Agreement.
 
6.                 Covenants .  Pledgor covenants and agrees that until the payment in full of the Obligations and the termination of the Lender's commitment to advance funds under the Loan Agreement:
 
6.1              Except as provided herein or as permitted under the Loan Agreement, without the prior written consent of the Agent, Pledgor will not sell, assign, transfer, pledge, or otherwise encumber any of its rights in or to the Pledged Collateral or any unpaid dividends or other unpaid distributions or payments with respect thereto or grant a Lien therein.
 
6.2              Pledgor will, at its expense, promptly execute, acknowledge and deliver all such instruments and take all such action as the Agent from time to time may reasonably request in order to ensure to the Agent, on behalf of the Lender, the benefits of the Liens in and to the Pledged Collateral intended to be created by this Agreement, including the filing of any necessary or desirable UCC financing statements, which may be filed by the Agent with or without the signature of Pledgor, and will cooperate with the Agent, at Pledgor's expense, in obtaining all necessary approvals and making all necessary filings under federal or state law in connection with such Liens or, if any Event of Default shall exist, any sale or transfer of the Pledged Collateral.
 
6.3              Pledgor has and will defend the title to the Pledged Collateral and the Liens of the Agent thereon against the claim of any Person (other than Permitted Liens) and will maintain and preserve such Liens.
 
6.4              Pledgor will, upon obtaining any additional Equity Interests of the Issuers which are not already Pledged Collateral, promptly (and in any event within three (3) Business Days) deliver to the Agent a Pledge Amendment, duly executed by Pledgor, in substantially the form of Exhibit B hereto (a " Pledge Amendment "), to confirm the pledge of such additional Pledged Securities pursuant to this Agreement; provided , however , that the failure of Pledgor to execute and deliver any such Pledge Amendment shall not prevent such additional Pledged Securities from being subject to the Lien created by this Agreement.  Pledgor hereby authorizes the Agent to attach each Pledge Amendment to this Agreement and agrees that all Equity Interests on any Pledge Amendment delivered to the Agent shall for all purposes hereunder be considered Pledged Securities hereunder and shall be included in the Pledged Collateral.
 
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6.5              Pledgor will pay all taxes, assessments and charges levied, assessed or imposed upon the Pledged Collateral owned by it before the same become delinquent or become Liens upon any of the Pledged Collateral except where such taxes, assessments and charges may be contested in good faith by appropriate proceedings and appropriate reserves have been established on Pledgor's books in accordance with GAAP.
 
6.6              Pledgor will not create, grant or suffer to exist any Lien on any of the Pledged Collateral except those in favor of the Agent and Permitted Liens.
 
7.                 Distributions; Etc .
 
7.1              Right of Pledgor to Receive Distributions .  For so long as no Event of Default exists and is continuing, Pledgor shall have the right to receive cash distributions declared and paid with respect to the Pledged Collateral, to the extent such distributions are permitted by the Loan Agreement.  Any and all Equity Interests or liquidating distributions, other distributions in property, return of capital or other distributions made on or in respect of the Pledged Collateral, whether resulting from a subdivision, combination or reclassification of the outstanding Equity Interests of each Issuer or received in exchange for the Pledged Collateral or any part thereof or as a result of any merger, consolidation, acquisition or other exchange of assets to which such Issuer may be a party or otherwise, shall be and become part of the Pledged Collateral pledged hereunder and, if received by Pledgor, shall be received in trust for benefit of the Agent on behalf of the Lender, be segregated from the other property and funds of Pledgor, and shall forthwith be delivered to the Agent to be held subject to the terms of this Agreement.
 
7.2              Holding Pledged Collateral; Exchanges .  The Agent may hold any of the Pledged Collateral, endorsed or assigned in blank, and during the continuance of an Event of Default, may deliver any of the Pledged Collateral to the Issuer thereof for the purpose of making denominational exchanges or registrations or transfers or for such other reasonable purpose in furtherance of this Agreement as the Agent may deem necessary.  The Agent shall have the right, if necessary to perfect its security interest on behalf of the Lender, to transfer to or register in the name of the Agent or any of its nominees, any or all of the Pledged Collateral; provided that notwithstanding the foregoing, until any transfer of beneficial ownership with respect to the Pledged Collateral pursuant to any exercise of remedies under Section 8 hereof, Pledgor shall continue to be the direct or indirect owner of the Pledged Collateral.  In addition, the Agent shall have the right at any time during an Event of Default to exchange certificates or instruments representing or evidencing Pledged Collateral for certificates or instruments of smaller or larger denominations.
 
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7.3              Termination of Pledgor's Right to Receive Distributions .  Upon the occurrence and continuance of any Event of Default, all rights of Pledgor to receive any cash distributions pursuant to Section 7.1 hereof shall cease, and all such rights shall thereupon become vested in the Agent, and the Agent shall have the sole and exclusive right to receive and retain the distributions which Pledgor would otherwise be authorized to receive and retain pursuant to Section 7.1 hereof.  In such event, Pledgor shall pay over to the Agent any distributions received by it with respect to the Pledged Collateral and any and all money and other property paid over to or received by the Agent pursuant to the provisions of this Section 7.3 shall be retained by the Agent as Pledged Collateral hereunder and/or shall be applied to the repayment of the Obligations in accordance with the provisions of the Loan Agreement.
 
8.                 Remedies .  Upon the occurrence and continuance of any Event of Default, the Agent shall have the following rights and remedies:
 
8.1              Secured Creditor .  All of the rights and remedies of a secured party under the UCC of the State where such rights and remedies are asserted, or under other applicable law, all of which rights and remedies shall be cumulative, and none of which shall be exclusive, to the extent permitted by law, in addition to any other rights and remedies contained in this Agreement.
 
8.2              Right of Sale .  During the continuance of an Event of Default, the Agent may, without demand and without advertisement, notice or legal process of any kind (except as is required in Section 8.3 below and as may be required by law), all of which Pledgor waives (except with respect to notice required in Section 8.3 below), at any time or times (a) apply any cash distributions received by the Agent pursuant to Section 7.3 hereof to the Obligations and (b) if following such application there remains outstanding any Obligations, sell the remaining Pledged Collateral, or any part thereof at public or private sale or at any broker's board or on any securities exchange, for cash, upon credit or for future delivery as the Agent shall deem appropriate, subject to Agent's duties owed to Pledgor.  The Agent shall be authorized at any such sale (if, on the advice of counsel, it deems it advisable to do so) to restrict the prospective bidders or purchasers to Persons who will represent and agree that they are purchasing the Pledged Collateral for their own account for investment and not with a view to the distribution or resale thereof, and upon consummation of any such sale the Agent shall have the right to assign, transfer and deliver to the purchaser or purchasers thereof the Pledged Collateral so sold.  Each such purchaser at any such sale shall hold the property sold absolutely free from any claim or right on the part of Pledgor, and Pledgor hereby waives (to the extent permitted by law) all rights of redemption, stay and/or appraisal which Pledgor now has or may have at any time in the future under any rule of law or statute now existing or hereafter enacted.  The proceeds realized from the sale of any Pledged Collateral shall be applied as set forth in the Loan Agreement.
 
8.3              Notice; Right of Pledgor to Participate in Sale .  In addition thereto, Pledgor further agrees that in the event that notice is necessary under applicable law, written notice mailed in the manner specified in Section 16 hereof twenty (20) days prior to the date of the proposed sale or disposition of the Pledged Collateral subject to the security interest created herein at any such public sale or sale at any broker's board or on any such securities exchange, or prior to the date after which private sale or any other disposition of said Pledged Collateral will be made, shall constitute commercially reasonable and fair notice.  Notwithstanding any other provision of this Agreement, in the event of the exercise of any remedies by Agent under this Agreement, Pledgor shall be entitled to twenty (20) days written notice prior to any sale or other disposition of any of the Pledged Collateral and Pledgor shall be entitled to participate in such sale or other disposition and to bid on the purchase of any or all of the Pledged Collateral in any such sale or other disposition.
 
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8.4              Securities Act, etc .  If, at any time when the Agent shall determine to exercise its right to sell the whole or any part of the Pledged Collateral hereunder, such Pledged Collateral or the part thereof to be sold shall not, for any reason whatsoever, be effectively registered under the Securities Act of 1933, as now or hereafter in effect, or any similar statute now or hereafter in effect in any jurisdiction (collectively, the " Securities Laws "), the Agent may, in its discretion (subject only to applicable requirements of law), sell such Pledged Collateral or part thereof by private sale in such manner and under such circumstances as the Agent may deem necessary or advisable, but subject to the other requirements of this Section 8 , and shall not be required to effect such registration or to cause the same to be effected.  Without limiting the generality of the forego­ing, in any such event, the Agent, in its discretion (a) may, in accordance with applicable Securities Laws, proceed to make such private sale notwithstanding that a registration statement for the purpose of registering such Pledged Collateral or part thereof could be or shall have been filed under any applicable Securities Law, (b) may approach and negotiate with a single possible purchaser to effect such sale, and (c) may restrict such sale to a purchaser who will represent and agree that such purchaser is purchasing for its own account, for investment and not with a view to the distribution or sale of such Pledged Collateral or part thereof.  In addition to a private sale as provided above in this Section 8 , if any of the Pledged Collateral shall not be freely distributable to the public without registration under applicable Securities Laws at the time of any proposed sale pursuant to this Section 8 , then the Agent shall not be required to effect such registration or cause the same to be effected but, in its discretion (subject only to applicable requirements of law), may require that any sale hereunder (including a sale at auction) be conducted subject to restrictions (i) as to the financial sophistication and ability of any Person permitted to bid or purchase at any such sale, (ii) as to the content of legends to be placed upon any certificates representing the Pledged Collateral sold in such sale, including restrictions on future transfer thereof, (iii) as to the representations required to be made by each Person bidding or purchasing at such sale relating to that Person's access to financial information about Pledgor and such Person's intentions as to the holding of the Pledged Collateral so sold for investment, for its own account, and not with a view to the distribution thereof, and (iv) as to such other matters as the Agent may, in its discretion, deem necessary or appropriate in order that such sale (notwithstanding any failure so to register) may be effected in compliance with the Bankruptcy Code and other laws affecting the enforcement of creditors' rights and all applicable Securities Laws.
 
8.5              Registration .  Pledgor acknowledges that notwithstanding the legal availability of a private sale or a sale subject to the restrictions described above in Section 8.4 , the Agent may, in its discretion, elect to register any or all of the Pledged Collateral under applicable Securities Laws.  Pledgor, however, recognizes that the Agent may be unable to effect a public sale of any or all the Pledged Collateral and may be compelled to resort to one or more private sales thereof.  Pledgor also acknowledges that any such private sale may result in prices and other terms less favorable to Pledgor than if such sale were a public sale and agrees that any such private sale shall not be deemed to have been made in a commercially unreasonable manner because such price or terms are less favorable than may have been obtained in a public sale.  The Agent shall be under no obligation to delay a sale of any of the Pledged Collateral for the period of time necessary to permit the registrant to register such securities for public sale under applicable Securities Laws, even if Pledgor would agree to do so.
 
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8.6              Waiver of Certain Rights .  Pledgor agrees that upon the occurrence and continuance of any Event of Default, it will not at any time plead, claim or take the benefit of any appraisal, valuation, stay, extension, moratorium or redemption law now or hereafter in force in order to prevent or delay the enforcement of this Agreement, or the absolute sale of the whole or any part of the Pledged Collateral or the possession thereof by any purchaser at any sale hereunder, and Pledgor waives the benefit of all such laws to the extent it lawfully may do so.  Pledgor agrees that it will not interfere with any right, power or remedy of the Agent provided for in this Agreement or now or hereafter existing at law or in equity or by statute or otherwise, or the exercise or beginning of the exercise by the Agent of any one or more of such rights, powers or remedies.  No failure or delay on the part of the Agent to exercise any such right, power or remedy and no notice or demand which may be given to or made upon Pledgor by the Agent with respect to any such remedies shall operate as a waiver thereof, or limit or impair the Agent's right to take any action or to exercise any power or remedy hereunder, without notice or demand, or prejudice its rights as against Pledgor in any respect.
 
8.7              Specific Performance .  Pledgor further agrees that a breach of any of the covenants contained in this Agreement will cause irreparable injury to the Agent, that the Agent has no adequate remedy at law in respect of such breach, and, as a consequence, agrees that each and every covenant contained in this Agreement shall be specifically enforceable against Pledgor, and Pledgor hereby waives and agrees not to assert any defenses against an action for specific performance of such covenants except for a defense that the Obligations are not then due and payable in accordance with the agreements and instruments governing and evidencing such obligations.
 
9.                 Power of Attorney; Proxy .
 
9.1              Upon the occurrence and continuance of an Event of Default and following ten (10) days prior written notice from Agent to Pledgor, and further only for so long as such Event of Default exists, Pledgor irrevocably (but subject to the foregoing automatic revocation) designates, makes, constitutes and appoints the Agent (and all Persons designated by the Agent) as its true and lawful attorney (and agent‑in‑fact) and the Agent, or its agent may, without further notice to Pledgor, and at such time or times thereafter as the Agent or said agent, in its discretion, may determine, in the name of the Pledgor or the Agent: (a) transfer the Pledged Collateral on the books of the Issuers thereof, with full power of substitution in the premises; and (b) endorse the name of Pledgor upon any checks, notes, acceptance, money orders, certificates, drafts or other forms of payment of security that come into the Agent's possession to the extent they constitute Pledged Collateral.
 
9.2              Provided that at least ten (10) days prior written notice has been given, upon the occurrence and continuance of an Event of Default, the Agent, or its nominee, shall have the sole and exclusive right to exercise all voting powers pertaining to any and all of the Pledged Collateral (and to give written consents in lieu of voting thereon) and may exercise such power in such manner as the Agent, in its sole discretion, shall determine.  THIS PROXY IS COUPLED WITH AN INTEREST AND IS IRREVOCABLE, except it shall automatically revoke upon the curing of the Event of Default.  The exercise by the Agent of any of its rights and remedies under this Section shall not be deemed a disposition of the Pledged Collateral, in whole or in part, under Article 9 of the UCC nor an acceptance by the Agent of any of the Pledged Collateral in satisfaction of any of the Obligations.
 
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10.              Waiver .  No delay on the Agent's part in exercising any power of sale, Lien, option or other right hereunder for the benefit of the Lender, and no notice or demand which may be given to or made upon Pledgor by the Agent with respect to any power of sale, Lien, option or other right hereunder, shall constitute a waiver thereof, or limit or impair the Agent's right to take any action or to exercise any power of sale, Lien, option, or any other right hereunder for the benefit of the Lender, without notice or demand, or prejudice the Agent's rights as against Pledgor in any respect.
 
11.              Assignment .  The Agent may assign, endorse or transfer any instrument evidencing all or any part of the Obligations as provided in, and in accordance with, the Loan Agreement, and the holder of such instrument shall be entitled to the benefits of this Agreement.
 
12.              Termination .  This Agreement shall terminate and be of no further force or effect at such time as the Obligations shall be paid and performed in full and the Lender's commitment to lend under the Loan Agreement shall have been terminated.  Upon such termination of this Agreement, the Agent shall deliver to Pledgor the Pledged Collateral at the time subject to this Agreement and then in the Agent's possession or control and all instruments of assignment executed in connection therewith, free and clear of the Liens hereof and, except as otherwise provided herein, all of the Pledgor's obligations hereunder shall at such time terminate.  At the request of Pledgor and at Pledgor's sole expense, Agent shall execute and deliver to Pledgor any other documents that Pledgor shall reasonably request to evidence such termination.
 
13.              Reinstatement .  This Agreement shall remain in full force and effect and continue to be effective should any petition be filed by or against any Issuer for liquidation or reorganization, should any Issuer become insolvent or make an assignment for the benefit of creditors or should a receiver or trustee be appointed for all or any significant part of such Issuer's assets, and shall continue to be effective or be reinstated, as the case may be, if at any time payment and performance of the Obligations, or any part thereof, is, pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored or returned by any obligee of the Obligations, whether as a "voidable preference", "fraudulent conveyance", or otherwise, all as though such payment or performance had not been made.  In the event that any payment, or any part thereof, is rescinded, reduced, restored or returned, the Obligations shall be reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored or returned.
 
14.              Miscellaneous .  This Agreement shall be binding upon Pledgor and its successors and assigns, and shall inure to the benefit of, and be enforceable by, the Agent and its successors and assigns, and none of the terms or provisions of this Agreement may be waived, altered, modified or amended except in writing duly signed by the Agent and Pledgor.
 
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15.              Severability .  If for any reason any provision or provisions hereof are determined to be invalid and contrary to any existing or future law, such invalidity shall not impair the operation of or affect those portions of this Agreement which are valid.
 
16.              Notices .  Except as otherwise provided herein, whenever it is provided herein that any notice, demand, request, consent, approval, declaration or other communication shall or may be given to or served upon any of the parties by any other party, or whenever any of the parties desires to give or serve upon any other a communication with respect to this Agreement, each such notice, demand, request, consent, approval, declaration or other communication shall be in writing and shall be delivered in accordance with the terms of Section 17(a) of the Loan Agreement.  Notices to Pledgor will be sent to the address as set forth under the signature block to this Agreement.
 
17.              Section Titles .  The Section titles contained in this Agreement are and shall be without substantive meaning or content of any kind whatsoever and are not a part of the agreement between the parties hereto.
 
18.              Counterparts .  This Agreement may be executed in separate counterparts, all of which shall constitute one and the same agreement.  Delivery of an executed counterpart of this Agreement by facsimile or e-mail shall be equally as effective as delivery of an original executed counterpart of this Agreement.  Any party delivering an executed counterpart of this Agreement by facsimile or e-mail also shall deliver an original executed counterpart of this Agreement, but the failure to deliver an original executed counterpart shall not affect the validity, enforceability, and binding effect of this Agreement.
 
19.              Governing Law; Submission to Jurisdiction; Service; Etc .  This Agreement shall be governed by and construed in accordance with the substantive laws (other than conflict of law provisions and principles) of the State of New York.  The parties hereto hereby consent to the non-exclusive jurisdiction of any United States Federal Court sitting in or with direct or indirect jurisdiction over the Southern District of New York or any New York state court located in New York County in any action, suit or other proceeding arising out of or relating to this Agreement or any of the other Loan Documents, and the parties irrevocably agree that all claims and demands in respect of any such action, suit or proceeding may be heard and determined in any such court and irrevocably waives any objection it may now or hereafter have as to the venue of any such action, suit or proceeding brought in any such court or that such court is an inconvenient forum.  The parties each waive personal service of any and all process upon it and consents that all such service of process may be made by registered mail (return receipt requested) directed to the relevant party at its address for notices pursuant to this Agreement, and service so made shall be deemed to be completed as of the date of delivery as evidenced by the return receipt or by the returned envelope marked "Refused".  Nothing herein shall limit the right of the Agent to bring proceedings against Pledgor or any of its Affiliates in the courts of any other jurisdiction.  Nothing in this Agreement shall be deemed or operate to affect the right of the Agent to serve legal process in any other manner permitted by law or to preclude the enforcement by the Agent of any judgment or order obtained in such forum or the taking of any action under this Agreement to enforce same in any other appropriate forum or jurisdiction.
 
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20.              Waiver of Jury Trial .  TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, PLEDGOR AND AGENT HEREBY IRREVOCABLY AND EXPRESSLY WAIVE ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM (WHETHER BASED UPON CONTRACT, TORT, OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT, THE OBLIGATIONS OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY OR EITHER PARTY'S ACTIONS IN THE NEGOTIATION, ADMINISTRATION, OR ENFORCEMENT HEREOF OR THEREOF.  EACH OF THE PLEDGOR AND AGENT ACKNOWLEDGE THAT SUCH WAIVER IS MADE WITH FULL KNOWLEDGE AND UNDERSTANDING OF THE NATURE OF THE RIGHTS AND BENEFITS WAIVED HEREBY, AND WITH THE BENEFIT OF ADVICE OF COUNSEL OF ITS CHOOSING.

[signature page follows]
 
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IN WITNESS WHEREOF, this Agreement has been duly executed as of the date first written above.
 
 
PLEDGOR :
 
 
RICEBRAN TECHNOLOGIES
     
 
By: 
/s/ W. John Short
   
W. John Short, CEO and President
     
 
Address:
 
6720 N. Scottsdale Rd.
 
Suite 390
 
Scottsdale, AZ 85253
 
[Signature Page to Pledge Agreement]
 
Agreed to and accepted this 12th day of May, 2015.

FULL CIRCLE CAPITAL CORPORATION

By: 
/s/ Gregg Felton
 
Name: Gregg Felton
Title:   President and Chief Executive Officer
 
 [Signature Page to Pledge Agreement]
 
EXHIBIT A
to the Pledge Agreement
 
Attached to and forming a part of that certain Pledge Agreement dated as of May 12, 2015 executed and delivered by Pledgor to the Agent.

Pledgor
Issuer
Class of
Equity
Certificate
Number(s)
Number or
percentage of 
ownership
Number of
Units/Shares
Issued &
Outstanding
RiceBran Technologies
NutraCea, LLC
Membership Interests
N/A
100%
N/A
RiceBran Technologies
Nutra SA, LLC
Membership Interests
N/A
49% of the units owned by Pledgor
N/A
RiceBran Technologies
Healthy Natural, Inc.
Common Stock
8
100%
100,000
RiceBran Technologies
Rice Science, LLC
Membership Interests
N/A
100%
N/A
RiceBran Technologies
Rice Rx, LLC
Membership Interests
N/A
100%
N/A
RiceBran Technologies
The RiceX Company
Common Stock
1
100%
100
 
EXHIBIT B
to the Pledge Agreement
 
PLEDGE AMENDMENT
 
This Pledge Amendment, dated ________________, is delivered pursuant to Section 6.5 of the Pledge Agreement referred to below.  The undersigned hereby (a) pledges, conveys, hypothecates, mortgages, assigns, sets over, delivers and grants to the Agent on behalf of the Lender a security interest in the Equity Interests set forth below (the " Additional Securities ") and all dividends, distributions, cash, instruments and other property or proceeds from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of the Additional Securities, all on the terms and conditions set forth in that certain Pledge Agreement, dated as of April [___], 2015 (the " Pledge Agreement "), executed and delivered by the undersigned, as Pledgor, to the Agent, which terms and conditions are hereby incorporated herein by reference; (b) agrees that this Pledge Amendment may be attached to the Pledge Agreement; and (c) agrees that the Additional Securities listed on this Pledge Amendment shall be deemed to be a part of the Pledged Securities under the Pledge Agreement, shall become a part of the Pledged Collateral referred to in the Pledge Agreement and shall secure all Obligations referred to in the Pledge Agreement.  Capitalized terms used herein but not defined shall have the meanings ascribed to such terms in the Pledge Agreement.
 
RICEBRAN TECHNOLOGIES,
 
a California corporation
     
 
By:
   
 
Name:
   
 
Title:
   

Pledgor
Issuer
Class of Equity
Certificate
Number(s)
Number or
percentage of 
ownership
Number of
Units/Shares
Issued &
Outstanding
           
           
           
 

Exhibit 10.6

WARRANT
 
NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS.  THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL SELECTED BY THE HOLDER, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE ISSUER, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT.  NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED TO AN "ACCREDITED INVESTOR" AS DEFINED IN RULE 501 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

RICEBRAN TECHNOLOGIES
 
Warrant To Purchase Common Stock
 
Warrant No.: W-1
Number of Shares of Common Stock:  300,000
Date of Issuance:  May 12, 2015 (" Issuance Date ")
 
RiceBran Technologies, a California corporation (the " Company "), hereby certifies that, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Full Circle Capital Corporation, the registered holder hereof or its permitted assigns (the " Holder "), is entitled, subject to the terms set forth below, to purchase from the Company, at the Exercise Price (as defined below) then in effect, at any time or times on or after the Issuance Date, but not after 11:59 p.m., New York time, on the Expiration Date, (as defined below), three hundred thousand (300,000) fully paid nonassessable shares of Common Stock, subject to adjustment as provided herein   (the " Warrant Shares ").  Except as otherwise defined herein, capitalized terms in this Warrant to Purchase Common Stock (including any Warrants to Purchase Common Stock issued in exchange, transfer or replacement hereof, this " Warrant "), shall have the meanings set forth in Section 20.  This Warrant is one of the Warrants to purchase Common Stock (collectively, the " Loan, Guaranty and Security Agreement Warrants ") issued pursuant to that certain Loan Guaranty and Security Agreement, dated as of May 12, 2015 (the " Loan, Guaranty and Security Agreement "), by and among the Company and Full Circle Capital Corporation, as Agent and a Lender (" Agent " and a " Lender ").  Capitalized terms used herein and not otherwise defined shall have the definitions ascribed to such terms in the Loan, Guaranty and Security Agreement.  For the avoidance of doubt, this Warrant constitutes a Loan Document.  Receipt of this Warrant by the Holder shall constitute Holder's acceptance of and agreement to all of the terms and conditions contained herein.
 
1.                     EXERCISE OF WARRANT .
 
(a)         Mechanics of Exercise .  Subject to the terms and conditions hereof (including, without limitation, the limitations set forth in Section 1(f)), this Warrant may be exercised by the Holder at any time or times on or after the Issuance Date , in whole or in part, by (i) delivery of a duly completed written notice, in the form attached hereto as Exhibit A (the " Exercise Notice "), of the Holder's election to exercise this Warrant and (ii) (A) payment to the Company of an amount equal to the applicable Exercise Price multiplied by the number of Warrant Shares as to which this Warrant is being exercised (the " Aggregate Exercise Price ") in cash or by wire transfer of immediately available funds or (B) if the provisions of Section 1(d) are applicable, by notifying the Company that this Warrant is being exercised pursuant to a Cashless Exercise (as defined in Section 1(d)).  The Holder shall not be required to deliver the original Warrant in order to effect an exercise hereunder.  Execution and delivery of the Exercise Notice with respect to less than all of the Warrant Shares shall have the same effect as cancellation of the original Warrant and issuance of a new Warrant evidencing the right to purchase the remaining number of Warrant Shares.  On or before the first (1 st ) Trading Day following the date on which the Company has received the Exercise Notice, the Company shall transmit by facsimile or electronic mail an acknowledgment of confirmation of receipt of the Exercise Notice to the Holder and the Company's transfer agent (the " Transfer Agent ").  On or before the third (3rd) Trading Day following the latest of (i) the date on which the Company has received the Exercise Notice and (ii)  Holder's delivery of the Aggregate Exercise Price (or notice of a Cashless Exercise) (the " Share Delivery Date "), the Company shall (X) provided that the Transfer Agent is participating in The Depository Trust Company (" DTC ") Fast Automated Securities Transfer Program, the Holder's broker has delivered a DWAC instruction to the Company's transfer agent and either (A) the Warrant Shares are subject to an effective resale registration statement in favor of the Holder or (B) if this Warrant is exercised via Cashless Exercise, at a time when Rule 144 would be available for immediate resale of the Warrant Shares by the Holder, credit such aggregate number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the Holder's or its designee's balance account with DTC through its Deposit / Withdrawal At Custodian (" DWAC ") system, or (Y) if the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program or (A) the Warrant Shares are not subject to an effective resale registration statement in favor of the Holder and (B) if this Warrant is exercised via Cashless Exercise, at a time when Rule 144 would not be available for immediate resale of the Warrant Shares by the Holder, issue and dispatch by overnight courier to the address as specified in the Exercise Notice, a certificate, registered in the Company's share register in the name of the Holder or its designee, for the number of Warrant Shares to which the Holder is entitled pursuant to such exercise, which certificate shall bear a restrictive legend similar to that set forth on the first page of this Warrant.  The Company shall be responsible for all fees and expenses of the Transfer Agent and all fees and expenses with respect to the issuance of Warrant Shares via DTC, if any.  Upon delivery of the Exercise Notice and payment therefor (including by cashless exercise), the Holder shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date such Warrant Shares are credited to the Holder's DTC account or the date of delivery of the certificates evidencing such Warrant Shares, as the case may be.  If this Warrant is submitted in connection with any exercise pursuant to this Section 1(a) and the number of Warrant Shares represented by this Warrant submitted for exercise is greater than the number of Warrant Shares being acquired upon an exercise, and the Holder requests in writing,  the Company shall as soon as practicable thereafter and in no event later than three (3) Trading Days after such request and exercise and at its own expense, issue a new Warrant (in accordance with Section 7(d)) representing the right to purchase the number of Warrant Shares issuable immediately prior to such exercise under this Warrant, less the number of Warrant Shares with respect to which this Warrant is exercised.  No fractional Warrant Shares are to be issued upon the exercise of this Warrant, but rather the number of Warrant Shares to be issued shall be rounded up to the nearest whole number.  The Company shall pay any and all taxes which may be payable with respect to the issuance and delivery of Warrant Shares upon exercise of this Warrant.
 
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(b)         Exercise Price .  For purposes of this Warrant, " Exercise Price " means $5.25, subject to adjustment as provided herein.
 
(c)         Company's Failure to Timely Deliver Securities .  If the Company shall fail for any reason or for no reason to issue to the Holder on or prior to the Share Delivery Date (I) if the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program or the Warrant Shares are not subject to an effective resale registration statement in favor of the Holder or, if exercised via Cashless Exercise, at a time when Rule 144 would not be available for immediate resale of the Warrant Shares by the Holder, a certificate for the number of shares of Common Stock to which the Holder is entitled and register such shares of Common Stock on the Company's share register,  or (II) if the Transfer Agent is participating in the DTC Fast Automated Securities Transfer Program and the Warrant Shares are subject to an effective resale registration statement in favor of the Holder or, if exercised via Cashless Exercise, at a time when Rule 144 would be available for immediate resale of the Warrant Shares by the Holder, to credit the Holder's balance account with DTC, as applicable, for such number of shares of Common Stock to which the Holder is entitled upon the Holder's exercise of this Warrant (an event described in either clause (I) or (II), an " Exercise Failure "), then, in addition to all other remedies available to the Holder, (X) the Company shall pay in cash to the Holder on each day after the Share Delivery Date and during such Exercise Failure an amount equal to 1.0% of the product of (A) the sum of the number of shares of Common Stock not issued to the Holder on or prior to the Share Delivery Date and to which the Holder is entitled, and (B) the Closing Sale Price of the Common Stock on the Trading Day immediately preceding the last possible date which the Company could have issued such shares of Common Stock to the Holder without violating Section 1(a) (the " Exercise Failure Damages "), and (Y) the Holder, upon written notice to the Company, may void its Exercise Notice with respect to, and retain or have returned, as the case may be, any portion of this Warrant that has been exercised pursuant to such Exercise Notice; provided that the voiding of an Exercise Notice shall not affect the Company's obligations to make any payments which have accrued (pursuant to this Section 1(c) or otherwise) prior to the date of such notice.  In addition to the foregoing, if on or prior to the Share Delivery Date at a time when the Warrant Shares are subject to an effective resale registration statement in favor of the Holder that is available for use by the Holder or, if this Warrant is exercised via Cashless Exercise, at a time when Rule 144 would be available for immediate resale of the Warrant Shares by the Holder, (1) if the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program, the Company shall fail to issue and deliver a certificate to the Holder without restrictive legend and register such shares of Common Stock on the Company's share register or, (2) if the Transfer Agent is participating in the DTC Fast Automated Securities Transfer Program, credit the Holder's balance account with DTC for the number of shares of Common Stock to which the Holder is entitled upon the Holder's exercise hereunder or pursuant to the Company's obligation pursuant to clause (ii) below, and if on or after such Trading Day the Holder purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Holder of shares of Common Stock issuable upon such exercise that the Holder anticipated receiving from the Company (a " Buy-In "), then the Company shall, within three (3) Trading Days after the Holder's request and in the Holder's discretion, either (i) pay cash to the Holder in an amount equal to the Holder's total purchase price (including brokerage commissions and other out-of-pocket expenses, if any) for the shares of Common Stock so purchased (the " Buy-In Price "), at which point (i) the Company's obligation to deliver such certificate (and to issue such shares of Common Stock) or credit such Holder's balance account with DTC, as applicable, for such shares of Common Stock shall terminate and Exercise Failure Damages shall cease to accrue, or (ii) promptly honor its obligation to deliver to the Holder a certificate or certificates representing such shares of Common Stock or credit such Holder's balance account with DTC and pay cash to the Holder in an amount equal to the excess (if any) of the Buy-In Price over the product of (A) such number of shares of Common Stock, times (B) the Closing Bid Price on the date of exercise. Nothing shall limit the Holder's right to pursue any other remedies available to it hereunder, at law or in equity, including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company's failure to timely deliver certificates representing shares of Common Stock (or to electronically deliver such shares of Common Stock) upon the exercise of this Warrant as required pursuant to the terms hereof.
 
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(d)         Cashless Exercise .   Notwithstanding anything contained herein to the contrary, the Holder may, at any time, in its sole discretion, exercise this Warrant in whole or in part and, in lieu of making the cash payment otherwise contemplated to be made to the Company upon such exercise in payment of the Aggregate Exercise Price, elect instead to receive upon such exercise the "Net Number" of shares of Common Stock determined according to the following formula (a " Cashless Exercise "):
 
Net Number = (A x B) - (A x C)
D
For purposes of the foregoing formula:
 
 
A=
the total number of shares with respect to which this Warrant is then being exercised.
 
B=
the arithmetic average of the Closing Sale Prices of the Common Stock for the five (5) consecutive Trading Days ending on the date immediately preceding the date of the Exercise Notice.
 
C=
the Exercise Price then in effect for the applicable Warrant Shares at the time of such exercise.
 
D=
the Closing Sale Price of the Common Stock on the date of the Exercise Notice.
 
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For purposes of Rule 144(d) promulgated under the 1933 Act, as in effect on the date hereof, it is intended that the Warrant Shares issued in a Cashless Exercise shall be deemed to have been acquired by the Holder, and the holding period for the Warrant Shares shall be deemed to have commenced, on the date this Warrant was originally issued pursuant to the Loan, Guaranty and Security Agreement.
 
(e)         Disputes .  In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the Warrant Shares, the Company shall promptly issue to the Holder the number of Warrant Shares that are not disputed and resolve such dispute in accordance with Section 12.
 
(f)          Limitation on   Beneficial Ownership . Notwithstanding anything to the contrary contained herein, the Company shall not effect the exercise of any portion of this Warrant, and the Holder shall not have the right to exercise any portion of this Warrant, pursuant to the terms and conditions of this Warrant and any such exercise shall be null and void and treated as if never made, to the extent that after giving effect to such exercise, the Holder together with the other Attribution Parties collectively would beneficially own in excess of 4.99% (the " Maximum Percentage ") of the number of shares of Common Stock outstanding immediately after giving effect to such exercise. For purposes of the foregoing sentence, the aggregate number of shares of Common Stock beneficially owned by the Holder and the other Attribution Parties shall include the number of shares of Common Stock held by the Holder and all other Attribution Parties plus the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which the determination of such sentence is being made, but shall exclude the number of shares of Common Stock which would be issuable upon (A) exercise of the remaining, unexercised portion of this Warrant beneficially owned by the Holder or any of the other Attribution Parties and (B) exercise or conversion of the unexercised or unconverted portion of any other securities of the Company (including, without limitation, any convertible notes or convertible preferred stock or warrants, including the other Loan, Guaranty and Security Agreement Warrants) beneficially owned by the Holder or any other Attribution Party subject to a limitation on conversion or exercise analogous to the limitation contained in this Section 1(f). For purposes of this Section 1(f), beneficial ownership shall be calculated in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the " 1934 Act "). For purposes of this Warrant, in determining the number of outstanding shares of Common Stock the Holder may acquire upon the exercise of this Warrant without exceeding the Maximum Percentage, the Holder may rely on the number of outstanding shares of Common Stock as reflected in (x) the Company's most recent Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K or other public filing with the Securities and Exchange Commission (the " SEC "), as the case may be, (y) a more recent public announcement by the Company or (3) any other written notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding (the " Reported Outstanding Share Number "). If the Company receives an Exercise Notice from the Holder at a time when the actual number of outstanding shares of Common Stock is less than the Reported Outstanding Share Number, the Company shall (i) notify the Holder in writing of the number of shares of Common Stock then outstanding and, to the extent that such Exercise Notice would otherwise cause the Holder's beneficial ownership, as determined pursuant to this Section 1(f), to exceed the Maximum Percentage, the Holder must notify the Company of a reduced number of Warrant Shares to be purchased pursuant to such Exercise Notice (the number of shares by which such purchase is reduced, the " Reduction Shares ") and (ii) as soon as reasonably practicable, the Company shall return to the Holder any exercise price paid by the Holder for the Reduction Shares. For any reason at any time, upon the written or oral request of the Holder, the Company shall within two (2) Business Days confirm orally and in writing or by electronic mail to the Holder the number of shares of Common Stock then outstanding. In any case, other than with respect to the Company's notification to Holder of the number of outstanding shares of Common Stock at any time, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder and any other Attribution Party since the date as of which the Reported Outstanding Share Number was reported. In the event that the issuance of shares of Common Stock to the Holder upon exercise of this Warrant results in the Holder and the other Attribution Parties being deemed to beneficially own, in the aggregate, more than the Maximum Percentage of the number of outstanding shares of Common Stock (as determined under Section 13(d) of the 1934 Act), the number of shares so issued by which the Holder's and the other Attribution Parties' aggregate beneficial ownership exceeds the Maximum Percentage (the " Excess Shares ") shall be deemed null and void and shall be cancelled ab initio , and the Holder shall not have the power to vote or to transfer the Excess Shares. As soon as reasonably practicable after the issuance of the Excess Shares has been deemed null and void, the Company shall return to the Holder the exercise price paid by the Holder for the Excess Shares. Upon delivery of a written notice to the Company, the Holder may from time to time increase (with such increase not effective until the sixty-first (61 st ) day after delivery of such notice) or decrease the Maximum Percentage to any other percentage not in excess of 9.99% as specified in such notice; provided that (i) any such increase in the Maximum Percentage will not be effective until the sixty-first (61 st ) day after such notice is delivered to the Company and (ii) any such increase or decrease will apply only to the Holder and the other Attribution Parties and not to any other holder of Loan, Guaranty and Security Agreement Warrants that is not an Attribution Party of the Holder. For purposes of clarity, the shares of Common Stock issuable pursuant to the terms of this Warrant in excess of the Maximum Percentage shall not be deemed to be beneficially owned by the Holder for any purpose including for purposes of Section 13(d) or Rule 16a-1(a)(1) of the 1934 Act. No prior inability to exercise this Warrant pursuant to this paragraph shall have any effect on the applicability of the provisions of this paragraph with respect to any subsequent determination of exercisability. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 1(f) to the extent necessary to correct this paragraph or any portion of this paragraph which may be defective or inconsistent with the intended beneficial ownership limitation contained in this Section 1(f) or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitation contained in this paragraph may not be waived and shall apply to a successor holder of this Warrant.
 
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(g)         Insufficient Authorized Shares .  The Company shall at all times reserve for issuance upon exercise of this Warrant at least such number of shares of Common Stock equal to 100% of the number of shares of Common Stock as shall from time to time be necessary to effect the exercise of all of this Warrant then outstanding (the " Required Reserve Amount ").   If at any time while this Warrant remains outstanding the Company fails to have such sufficient number of authorized and unreserved shares of Common Stock to satisfy its Required Reserve Amount obligation   (such failure to have such sufficient number of authorized and unreserved shares of Common Stock, an " Authorized Share Failure "), then the Company shall immediately take all action necessary to increase the Company's authorized shares of Common Stock to an amount sufficient to allow the Company to reserve the Required Reserve Amount for this Warrant then outstanding.  Without limiting the generality of the foregoing sentence, as soon as practicable after the date of the occurrence of an Authorized Share Failure, but in no event later than sixty (60) days after the occurrence of such Authorized Share Failure, the Company shall hold a meeting of its shareholders for the approval of an increase in the number of authorized shares of Common Stock.  In connection with such meeting, the Company shall provide each shareholder with a proxy statement and shall use its best efforts to solicit its shareholders' approval of such increase in authorized shares of Common Stock and to cause its board of directors to recommend to the shareholders that they approve such proposal.  Notwithstanding the foregoing, if at any such time of an Authorized Share Failure, the Company is able to obtain the written consent of a majority of the shares of its issued and outstanding Common Stock to approve the increase in the number of authorized shares of Common Stock, the Company may satisfy this obligation by obtaining such consent and submitting for filing with the SEC an Information Statement on Schedule 14C.
 
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2.                      ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES .  The Exercise Price and the number of Warrant Shares shall be adjusted from time to time as follows:
 
(a)         Voluntary Adjustment By Company .  The Company may at any time during the term of this Warrant voluntarily reduce the then current Exercise Price to any amount and for any period of time deemed appropriate by the Board of Directors of the Company.
 
(b)         Adjustment Upon Subdivision or Combination of Shares of Common Stock .  If the Company at any time on or after the Closing Date subdivides (by any stock split, stock dividend, recapitalization or otherwise) one or more classes of its outstanding shares of Common Stock into a greater number of shares, the Exercise Price in effect immediately prior to such subdivision will be proportionately reduced and the number of Warrant Shares will be proportionately increased.  If the Company at any time on or after the Closing Date combines (by combination, reverse stock split, or otherwise) one or more classes of its outstanding shares of Common Stock into a smaller number of shares, the Exercise Price in effect immediately prior to such combination will be proportionately increased and the number of Warrant Shares will be proportionately decreased.  Any adjustment under this Section 2(b) shall become effective at the close of business on the date the subdivision or combination becomes effective.
 
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(c)         Most Favored Nations Anti-Dilution Adjustment . If, at any time or times on or after the Issuance Date but prior to 11:59 p.m. New York time, on the Expiration Date, the Company issues or sells any Options or Convertible Securities, (collectively, " Common Stock Rights " and the documentation relating thereto, including, without limitation, the securities themselves, are referred to as " Other Common Stock Rights Documentation "), that contain any anti-dilution provisions providing for the adjustment of the exercise price, conversion price or other price or rate at which shares of Common Stock thereunder may be purchased, acquired or converted, and/or any upward adjustment in the number of shares of Common Stock issuable thereunder, based upon future issuance or sales, or deemed future issuances or sales, of Common Stock (including, without limitation, price protection anti-dilution provisions, whether based upon a weighted average anti-dilution formula or a full ratchet anti-dilution formula, or otherwise), that individually is or, collectively are, more favorable to the holder of the applicable Common Stock Rights than those provided for herein or are not provided for herein, as the case may be, then and in such event the Company shall give written notice thereof to the Holder on the earlier of the date on which such Other Common Stock Rights Documentation is to be entered into and the date the Common Stock Rights are issued, together with a true, correct and complete copy of such anti-dilution provisions and all definitions relating thereto, provided that in each case that such information shall be made known to the public prior to or in conjunction with such notice being provided to the Holder.  Effective immediately following the earlier of the date of the execution of such Other Common Stock Rights Documentation or the issuance of any such Common Stock Rights, such anti-dilution provisions and related definitions (collectively, the " Incorporated Anti-Dilution Provisions ") shall  be deemed to have been incorporated herein and any adjustment pursuant to such provisions shall be deemed to be an adjustment hereunder subject to all applicable terms and provisions of this Agreement.  For the avoidance of doubt, and notwithstanding anything to the contrary contained herein, any adjustments to the exercise price and the number of Warrant Shares issuable hereunder based on the Incorporated Anti-Dilution Provisions, shall be adjustments made by applying the terms of such Anti-Dilution Provisions to the Exercise Price then in effect.  (For example: if after the Issuance Date, the Company issues warrants, having an initial exercise price of $4.00 per share of Common Stock, with full ratchet anti-dilution provisions providing for adjustment of the exercise price of such warrants, if any shares of Common Stock are issued or deemed issued at a price below such $4.00 per share, to equal such lower price per share, with a concomitant increase in the number of shares issuable upon exercise of such warrants, such full ratchet anti-dilution provisions will become Incorporated Anti-Dilution Provisions hereunder and will be applied utilizing the then applicable Exercise Price; assuming the Exercise Price had not previously been adjusted, if the Company subsequently issues or is deemed to have issued shares of Common Stock at a price of $4.50 per share of Common Stock, the Exercise Price would be reduced from $5.25 to $4.50 and the number of shares of Common Stock that could be purchased under this Warrant would be increased from 300,000 shares to 350,000 shares).  Without limiting the foregoing, any amendment or termination of any such Incorporated anti-dilution provisions in accordance with the terms of the related Other Common Stock Rights Documentation or Common Stock Rights shall mutatis mutandis constitute an amendment or the termination, as the case may be, of such Incorporated Anti-Dilution Provisions hereunder, provided that in no event: (i) shall any such Incorporated Anti-Dilution Provision or the amendment or termination thereof under the related Other Common Stock Rights Documentation or Common Stock Rights otherwise modify, amend or affect the other terms and provisions of this Agreement, (ii) shall any such amendment or termination be effective to modify the Incorporated Anti-Dilution Provisions until written notice describing such amendment or termination (together with a copy of documentation relating thereto) has been provided to the Holder; and (iii) no such amendment or termination shall affect the exercise of price or number of shares of Common Stock issuable upon exercise of this Warrant effectuated by the Holder thereof prior to its receipt of the notice referred to in clause (ii).  If Common Stock Rights are issued under two or more sets of Other Common Stock Rights Documentation or Common Stock Rights, this Section 2(c) shall apply to the Incorporated Anti-Dilution provisions or combination thereof, that is or are most favorable to the Holder.  No adjustment pursuant to this Section 2(c) shall result in an increase of the Exercise Price or decrease in the number of Warrant Shares that would otherwise be applicable without giving effect to this Section 2(c).
 
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3.                     RIGHTS UPON PRO RATA DISTRIBUTION OF ASSETS .  If the Company shall declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock as a class, by way of return of capital or otherwise (including, without limitation, any distribution of cash, stock or other securities, property, options, evidence of indebtedness or any other assets by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a " Distribution "), at any time after the issuance of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations or restrictions on exercise of this Warrant, including without limitation, the Maximum Percentage) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution ( provided , however , that to the extent that the Holder's right to participate in any such Distribution would result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, then the Holder shall not be entitled to participate in such Distribution to such extent (and shall not be entitled to beneficial ownership of such shares of Common Stock as a result of such Distribution (and beneficial ownership) to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time or times as its right thereto would not result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, at which time or times the Holder shall be granted such Distribution (and any Distributions declared or made on such initial Distribution or on any subsequent Distribution held similarly in abeyance) to the same extent as if there had been no such limitation).
 
4.                  PURCHASE RIGHTS; FUNDAMENTAL TRANSACTIONS .
 
(d)         Purchase Rights .  In addition to any adjustments pursuant to Section 2 above, if at any time the Company grants, issues or sells any Options, Convertible Securities or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of Common Stock as a class (the " Purchase Rights "), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations or restrictions on exercise of this Warrant, including without limitation, the Maximum Percentage) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights ( provided , however , that to the extent that the Holder's right to participate in any such Purchase Right would result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, then the Holder shall not be entitled to participate in such Purchase Right to such extent (and shall not be entitled to beneficial ownership of such shares of Common Stock as a result of such Purchase Right (and beneficial ownership) to such extent) and such Purchase Right to such extent shall be held in abeyance for the benefit of the Holder until such time or times as its right thereto would not result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, at which time or times the Holder shall be granted such right (and any Purchase Right granted, issued or sold on such initial Purchase Right or on any subsequent Purchase Right held similarly in abeyance) to the same extent as if there had been no such limitation) .
 
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(e)         Fundamental Transactions .  The Company shall not enter into or be party to a Fundamental Transaction unless (i) the Successor Entity assumes in writing all of the obligations of the Company under this Warrant and the other Loan Documents related to this Warrant in accordance with the provisions of this Section 4(b), pursuant to written agreements in form and substance reasonably satisfactory to the Required Holders prior to such Fundamental Transaction, including agreements , if so requested by the Holder, to deliver to each holder of the Loan, Guaranty and Security Agreement Warrants in exchange for such Loan, Guaranty and Security Agreement Warrants a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Warrant including, without limitation, an adjusted exercise price equal to the value for the shares of Common Stock reflected by the terms of such Fundamental Transaction, and exercisable for a corresponding number of shares of capital stock equivalent to the shares of Common Stock acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and reasonably satisfactory to the Required Holders, and with an exercise price which applies the exercise price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital stock, such adjustments to the number of shares of capital stock and such exercise price being for the purpose of protecting the economic value of this Warrant immediately prior to the occurrence or consummation of such Fundamental Transaction), and (ii) the Successor Entity (including its Parent Entity) is a publicly traded corporation whose common stock is quoted on or listed for trading on an Eligible Market.  Any security issuable or potentially issuable to the Holder pursuant to the terms of this Warrant on the consummation of a Fundamental Transaction shall be registered and freely tradable by the Holder without any restriction or limitation or the requirement to be subject to any holding period pursuant to any applicable securities laws.  Upon the occurrence or consummation of any Fundamental Transaction, and it shall be a required condition to the occurrence or consummation of such Fundamental Transaction that, the Company and the Successor Entity or Successor Entities, jointly and severally, shall succeed to, and the Company shall cause any Successor Entity or Successor Entities to jointly and severally succeed to, and be added to the term "Company" under this Warrant (so that from and after the date of such Fundamental Transaction, each and every provision of this Warrant referring to the "Company" shall refer instead to each of the Company and the Successor Entity or Successor Entities, jointly and severally), and the Company and the Successor Entity or Successor Entities, jointly and severally, may exercise every right and power of the Company prior thereto and shall assume all of the obligations of the Company prior thereto under this Warrant with the same effect as if the Company and such Successor Entity or Successor Entities, jointly and severally, had been named as the Company in this Warrant, and, solely at the request of the Holder, if the Successor Entity and/or Successor Entities is a publicly traded corporation whose common stock is quoted on or listed for trading on an Eligible Market, shall deliver (in addition to and without limiting any right under this Warrant) to the Holder in exchange for this Warrant a security of the Successor Entity and/or Successor Entities evidenced by a written instrument substantially similar in form and substance to this Warrant and exercisable for a corresponding number of shares of capital stock of the Successor Entity and/or Successor Entities (the " Successor Capital Stock ") equivalent to the shares of Common Stock acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction (such corresponding number of shares of Successor Capital Stock to be delivered to the Holder shall be equal to the quotient of (i) the aggregate dollar value of all consideration (including cash consideration and any consideration other than cash (" Non-Cash Consideration "), in such Fundamental Transaction, as such values
 
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 are reflected in any definitive agreement for the Fundamental Transaction that has been executed at the time of the first public announcement of the Fundamental Transaction or, if no such value is determinable from such definitive agreement, as determined in accordance with Section 12 with the term "Non-Cash Consideration" being substituted for the term "Exercise Price") that the Holder would have been entitled to receive upon the happening of such Fundamental Transaction or the record, eligibility or other determination date for the event resulting in such Fundamental Transaction, had this Warrant been exercised immediately prior to such Fundamental Transaction or the record, eligibility or other determination date for the event resulting in such Fundamental Transaction (without regard to any limitations on the exercise of this Warrant) divided by (ii) the per share Closing Sale Price of such corresponding capital stock on the Trading Day immediately prior to the consummation or occurrence of the Fundamental Transaction), and such security shall be reasonably satisfactory to the Holder, and with an identical total exercise price to the total Exercise Price hereunder (such adjustments to the number of shares of capital stock and such exercise price being for the purpose of protecting after the consummation or occurrence of such Fundamental Transaction the economic value of this Warrant that was in effect immediately prior to the consummation or occurrence of such Fundamental Transaction, as elected by the Holder solely at its option).  Upon occurrence or consummation of a Fundamental Transaction and it shall be a required condition to the occurrence or consummation of such Fundamental Transaction that, the Company and the Successor Entity or Successor Entities shall deliver to the Holder confirmation that there shall be issued upon exercise of this Warrant at any time after the occurrence or consummation of the Fundamental Transaction, as elected by the Holder solely at its option, shares of Common Stock, Successor Capital Stock or, in lieu of the shares of Common Stock or Successor Capital Stock (or other securities, cash, assets or other property purchasable upon the exercise of this Warrant prior to such Fundamental Transaction), such shares of stock, securities, cash, assets or any other property whatsoever (including warrants or other purchase or subscription rights), which for purposes of clarification may continue to be shares of Common Stock, if any, that the Holder would have been entitled to receive upon the happening of such Fundamental Transaction or the record, eligibility or other determination date for the event resulting in such Fundamental Transaction, had this Warrant been exercised immediately prior to such Fundamental Transaction or the record, eligibility or other determination date for the event resulting in such Fundamental Transaction (without regard to any limitations on the exercise of this Warrant), as adjusted in accordance with the provisions of this Warrant.  In addition to and not in substitution for any other rights hereunder, prior to the occurrence or consummation of any Fundamental Transaction pursuant to which holders of shares of Common Stock are entitled to receive securities, cash, assets or other property with respect to or in exchange for shares of Common Stock (a " Corporate Event "), the Company shall make appropriate provision to insure that, and any applicable Successor Entity or Successor Entities shall ensure that, and it shall be a required condition to the occurrence or consummation of such Corporate Event that, the Holder will thereafter have the right to receive upon exercise of this Warrant at any time after the occurrence or consummation of the Corporate Event, shares of Common Stock or Successor Capital Stock or, if so elected by the Holder, in lieu of the shares of Common Stock (or other securities, cash, assets or other property) purchasable upon the exercise of this Warrant prior to such Corporate Event (but not in lieu of such items still issuable under Sections 3 and 4(a), which shall continue to be receivable on the Common Stock or on the such shares of stock, securities, cash, assets or any other property otherwise receivable with respect to or in exchange for shares of Common Stock), such shares of stock, securities, cash, assets or any other property whatsoever (including warrants or other purchase or subscription rights and any shares of Common Stock) which the Holder would have been entitled to receive upon the occurrence or consummation of such Corporate Event or the record, eligibility or other determination date for the event resulting in such Corporate Event, had this Warrant been exercised immediately prior to such Corporate Event or the record, eligibility or other determination date for the event resulting in such Corporate Event (without regard to any limitations on exercise of this Warrant).  Provision made pursuant to the preceding sentence shall be in a form and substance reasonably satisfactory to the Holder.  The provisions of this Section 4(b) shall apply similarly and equally to successive Fundamental Transactions and Corporate Events.
 
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(c)         Notwithstanding the foregoing, if a Fundamental Transaction is announced or is scheduled to occur on or prior to the thirtieth month following the Issuance Date, at the request of the Holder delivered before the ninetieth (90th) day after the occurrence or consummation of such Fundamental Transaction, the Company (or the Successor Entity) shall purchase this Warrant from the Holder by paying to the Holder, within five (5) Business Days after such request (or, if later, on the effective date of the Fundamental Transaction), cash in an amount equal to (if positive) 100% of the product of (A) the difference between (1) the arithmetic average of the Closing Sale Prices of the Common Stock for the last five (5) Trading Days ending on the date of the request of the Holder, and (2) the then existing Exercise Price, and (B) the maximum number of Warrant Shares then issuable upon exercise on this Warrant (without regard to any limitations on exercise of this Warrant.
 
5.                     NONCIRCUMVENTION .  The Company hereby covenants and agrees that the Company will not, by amendment of its Articles of Incorporation or Bylaws, or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, and will at all times in good faith carry out all of the provisions of this Warrant and take all action as may be required to protect the rights of the Holder.  Without limiting the generality of the foregoing, the Company (i) shall not increase the par value of any shares of Common Stock receivable upon the exercise of this Warrant above the Exercise Price then in effect, (ii) shall take all such actions as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock upon the exercise of this Warrant, and (iii) shall, so long as any of the Loan, Guaranty and Security Agreement Warrants are outstanding, take all action necessary to reserve and keep available out of its authorized and unissued shares of Common Stock, solely for the purpose of effecting the exercise of the Loan, Guaranty and Security Agreement Warrants, the number of shares of Common Stock as shall from time to time be necessary to effect the exercise of the Loan, Guaranty and Security Agreement Warrants then outstanding (without regard to any limitations on exercise).  The Company will take all such reasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of the Principal Market or any other trading market upon which the Common Stock may be listed. The Company covenants that all Warrant Shares which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented by this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges created by the Company in respect of the issue thereof.
 
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6.                     WARRANT HOLDER NOT DEEMED A STOCKHOLDER .  Except as otherwise specifically provided herein, the Holder, solely in such Person's capacity as a holder of this Warrant, shall not be entitled to vote or receive dividends or be deemed the holder of share capital of the Company for any purpose, nor shall anything contained in this Warrant be construed to confer upon the Holder, solely in such Person's capacity as the Holder of this Warrant, any of the rights of a stockholder of the Company or any right to vote, give or withhold consent to any corporate action (whether any reorganization, issue of stock, reclassification of stock, consolidation, merger, conveyance or otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise, prior to the issuance to the Holder of the Warrant Shares which such Person is then entitled to receive upon the due exercise of this Warrant.  In addition, nothing contained in this Warrant shall be construed as imposing any liabilities on the Holder to purchase any securities (upon exercise of this Warrant or otherwise) or as a stockholder of the Company, whether such liabilities are asserted by the Company or by creditors of the Company.  Notwithstanding this Section 6, the Company shall provide the Holder with copies of the same notices and other information given to the stockholders of the Company generally, contemporaneously with the giving thereof to the stockholders.  Notice filings made by the Company on the SEC's EDGAR filing system shall constitute delivery of notice to Holder, so long as such filings are contemporaneously filed on the SEC's EDGAR filing system at the same time such notice is mailed or otherwise delivered to the Company's stockholders and, any time the Company also mails a physical copy of such notice to Company's stockholders, written notice of the availability thereof is delivered to the Holder contemporaneously with such filing.
 
7.                     REISSUANCE OF WARRANTS .
 
(f)          Transfer of Warrant .  If this Warrant is to be transferred, the Holder shall surrender this Warrant to the Company, whereupon the Company will forthwith, subject to the Holder and the transferee complying with the transfer restrictions contained herein (including without limitation Section 14 hereof), issue and deliver upon the order of the Holder a new Warrant (in accordance with Section 7(d)), registered as the Holder may request, representing the right to purchase the number of Warrant Shares being transferred by the Holder and, if less than the total number of Warrant Shares then underlying this Warrant is being transferred, a new Warrant (in accordance with Section 7(d)) to the Holder representing the right to purchase the number of Warrant Shares not being transferred.
 
(g)         Lost, Stolen or Mutilated Warrant .  Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant, and, in the case of loss, theft or destruction, of any indemnification undertaking by the Holder to the Company in customary form and, in the case of mutilation, upon surrender and cancellation of this Warrant, the Company shall execute and deliver to the Holder a new Warrant (in accordance with Section 7(d)) representing the right to purchase the Warrant Shares then underlying this Warrant.
 
(h)         Exchangeable for Multiple Warrants .  This Warrant is exchangeable, upon the surrender hereof by the Holder at the principal office of the Company, for a new Warrant or Warrants (in accordance with Section 7(d)) representing in the aggregate the right to purchase the number of Warrant Shares then underlying this Warrant, and each such new Warrant will represent the right to purchase such portion of such Warrant Shares as is designated by the Holder at the time of such surrender; provided , however , that no Loan, Guaranty and Security Agreement Warrants for fractional Warrant Shares shall be given.
 
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(i)          Issuance of New Warrants .  Whenever the Company is required to issue a new Warrant pursuant to the terms of this Warrant, such new Warrant (i) shall be of like tenor with this Warrant, (ii) shall represent, as indicated on the face of such new Warrant, the right to purchase the Warrant Shares then underlying this Warrant (or in the case of a new Warrant being issued pursuant to Section 7(a) or Section 7(c), the Warrant Shares designated by the Holder which, when added to the number of shares of Common Stock underlying the other new Warrants issued in connection with such issuance, does not exceed the number of Warrant Shares then underlying this Warrant), (iii) shall have an issuance date, as indicated on the face of such new Warrant which is the same as the Issuance Date, and (iv) shall have the same rights and conditions as this Warrant.
 
8.                    NOTICES .  Whenever notice is required to be given under this Warrant, unless otherwise provided herein, such notice shall be given in writing in accordance with Section 16(a) of the Loan, Guaranty and Security Agreement.  For the avoidance of doubt, and notwithstanding the foregoing, if any Holder is not also a Lender under the Loan, Guaranty and Security Agreement, notices to such Holder shall be given in accordance with Section 16(a) to such address as such Holder may specify in a written notice delivered to the Company in accordance with said Section 16(a), which section shall be deemed incorporated herein and shall apply mutatis mutandis to such other Holder.  The Company will give written notice to the Holder (i) immediately upon any adjustment of the Exercise Price, setting forth in reasonable detail, and certifying, the calculation of such adjustment and (ii) at least fifteen (15) days prior to the date on which the Company closes its books or takes a record (A) with respect to any dividend or distribution upon the shares of Common Stock, (B) with respect to any grants, issuances or sales of any Options, Convertible Securities or rights to purchase stock, warrants, securities or other property to holders of shares of Common Stock or (C) for determining rights to vote with respect to any Fundamental Transaction, dissolution or liquidation; provided in each case that such information shall be made known to the public prior to or in conjunction with such notice being provided to the Holder.
 
9.                     AMENDMENT AND WAIVER .  This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company and the Holder.  This Warrant also may be modified or amended or the provisions hereof waived with the written consent of the Company and the Required Holders as of the date such consent is sought; provided, however, that (i) no such amendment shall adversely affect any Holder differently than it affects all other Holders, unless such Holder consents thereto, and (ii) no amendment may increase the Exercise Price, decrease the number or shares or class of shares obtainable upon exercise of this Warrant or decrease the time period in which this Warrant can be exercised without the written consent of the Holder.
 
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10.                  GOVERNING LAW; JURISDICTION; JURY TRIAL .  This Warrant shall be governed by and construed and enforced in accordance with, and all questions concerning the construction, validity, interpretation and performance of this Warrant shall be governed by, the internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New York. Subject to the provisions of Section 12, the Company hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in The City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper.  The Company hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to the Company at the address set forth in Section 16(a) of the Loan, Guaranty and Security Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law.  Nothing contained herein shall be deemed or operate to preclude the Holder from bringing suit or taking other legal action against the Company in any other jurisdiction to collect on the Company's obligations to the Holder, to realize on any collateral or any other security for such obligations, or to enforce a judgment or other court ruling in favor of the Holder.  THE COMPANY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS WARRANT OR ANY TRANSACTION CONTEMPLATED HEREBY.

11.                  CONSTRUCTION; HEADINGS .  This Warrant shall be deemed to be jointly drafted by the Company and Agent and Lenders and shall not be construed against any Person as the drafter hereof.  The headings of this Warrant are for convenience of reference and shall not form part of, or affect the interpretation of, this Warrant.
 
12.                  DISPUTE RESOLUTION .  In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the Warrant Shares, the Company shall submit the disputed determinations or arithmetic calculations via facsimile or electronic mail within two (2) Business Days of receipt of the Exercise Notice giving rise to such dispute, as the case may be, to the Holder.  If the Holder and the Company are unable to agree upon such determination or calculation of the Exercise Price or the Warrant Shares within three (3) Business Days of such disputed determination or arithmetic calculation being submitted to the Holder, then the Company shall, within two (2) Business Days submit via facsimile or electronic mail (a) the disputed determination of the Exercise Price to an independent, reputable investment bank mutually acceptable to the Company and the Holder  or (b) the disputed arithmetic calculation of the Warrant Shares to an independent, outside accountant mutually acceptable to the Company and the Holder.  The Company and Holder shall jointly cause at their mutual expense the investment bank or the accountant, as the case may be, to perform the determinations or calculations and notify the Company and the Holder of the results no later than ten (10) Business Days from the time it receives the disputed determinations or calculations.  Such investment bank's or accountant's determination or calculation, as the case may be, shall be binding upon all parties absent demonstrable error.
 
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13.                  REMEDIES, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF .  The remedies provided in this Warrant shall be cumulative and in addition to all other remedies available under this Warrant and the other Loan Documents, at law or in equity (including a decree of specific performance and/or other injunctive relief), and nothing herein shall limit the right of the Holder to pursue actual damages for any failure by the Company to comply with the terms of this Warrant.  The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder and that the remedy at law for any such breach may be inadequate.  The Company therefore agrees that, in the event of any such breach or threatened breach, the holder of this Warrant shall be entitled, in addition to all other available remedies, to an injunction restraining any breach, without the necessity of showing economic loss and without any bond or other security being required.
 
14.                  TRANSFER .   This Warrant and the Warrant Shares (collectively, the " Securities ") may only be transferred in compliance with state and federal securities laws.  In connection with any transfer of Securities other than pursuant to an effective registration statement or pursuant to Rule 144, to the Company or to an Affiliate of a Holder or in connection with a pledge to an accredited investor as contemplated in Section 1(D) of Exhibit B hereto, the Company may require the transferor thereof to provide to the Company an opinion of counsel selected by the transferor and reasonably acceptable to the Company, the form and substance of which opinion shall be reasonably satisfactory to the Company, to the effect that such transfer does not require registration of such transferred Securities under the 1933 Act.  As a condition to transferring this Warrant, any transferee shall (i) agree in writing to be bound by the terms of this Warrant and Exhibit B to this Warrant, (ii) if the transfer is not made (A) pursuant to an effective registration statement or (B) in a transfer not involving a change of beneficial ownership, make the representations set forth in Section 1 of Exhibit B hereto (other than Sections 1(C), (G), and (I)), as of the date of the transfer for the benefit of the Company.  If such conditions are satisfied, such transferee shall have the rights and obligations of a Holder and Lender under this Warrant.
 
15.                  SEVERABILITY . If any provision of this Warrant is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect the validity of the remaining provisions of this Warrant so long as this Warrant as so modified continues to express, without material change, the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or unenforceability of the provision(s) in question does not substantially impair the respective expectations or reciprocal obligations of the parties or the practical realization of the benefits that would otherwise be conferred upon the parties.  The parties will endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s).
 
16.                  LIMITATION OF LIABILITY . No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase Warrant Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.
 
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17.                  ACCEPTANCE . Receipt of this Warrant by the Holder shall constitute acceptance of and agreement to all of the terms and conditions contained herein, including, without limitation, the provisions of Exhibit B to the extent applicable.
 
18.                  INTENTIONALLY LEFT BLANK .
 
19.                  INCORPORATION OF EXHIBIT B TERMS .  The terms and provisions of Exhibit B are incorporated by reference into this Warrant as if set forth herein.
 
20.                  CERTAIN DEFINITIONS .  For purposes of this Warrant, the following terms shall have the following meanings:
 
(a)           " 1933 Act " means the Securities Act of 1933, as amended.
 
(b)          " Affiliate " means, with respect to any Person, any other Person that directly or indirectly controls, is controlled by, or is under common control with, such Person, it being understood for purposes of this definition that "control" of a Person means the power directly or indirectly either to vote 10% or more of the stock having ordinary voting power for the election of directors of such Person or direct or cause the direction of the management and policies of such Person whether by contract or otherwise.
 
(c)           " Attribution Parties " means, collectively, the following Persons and entities: (i) any investment vehicle, including, any funds, feeder funds or managed accounts, currently, or from time to time after the Issuance Date, directly or indirectly managed or advised by the Holder's investment manager or any of its Affiliates or principals, (ii) any direct or indirect Affiliates of the Holder or any of the foregoing, (iii) any Person acting or who could be deemed to be acting as a Group together with the Holder or any of the foregoing and (iv) any other Persons whose beneficial ownership of the Company's Common Stock would or could be aggregated with the Holder's and the other Attribution Parties for purposes of Section 13(d) of the 1934 Act.  For clarity, the purpose of the foregoing is to subject collectively the Holder and all other Attribution Parties to the Maximum Percentage.
 
(d)        " Bloomberg " means Bloomberg Financial Markets.
 
(e)         " Business Day " means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized or required by law to remain closed.
 
(f)         " Closing Bid Price " and " Closing Sale Price " means, for any security as of any date, the last closing bid price and last closing trade price, respectively, for such security on the Principal Market, as reported by Bloomberg, or, if the Principal Market begins to operate on an extended hours basis and does not designate the closing bid price or the closing trade price, as the case may be, then the last bid price or the last trade price, respectively, of such security prior to 4:00:00 p.m., New York time, as reported by Bloomberg, or, if the Principal Market is not the principal securities exchange or trading market for such security, the last closing bid price or last trade price, respectively, of such security on the principal securities exchange or trading market where such security is listed or traded as reported by Bloomberg, or if the foregoing do not apply, the last closing bid price or last trade price, respectively, of such security in the over-the-counter market on the electronic bulletin board for such security as reported by Bloomberg, or, if no closing bid price or last trade price, respectively, is reported for such security by Bloomberg, the average of the bid prices, or the ask prices, respectively, of any market makers for such security as reported in the OTC Link or "pink sheets" by OTC Markets Group Inc. (formerly Pink OTC Markets Inc.).  If the Closing Bid Price or the Closing Sale Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Closing Bid Price or the Closing Sale Price, as the case may be, of such security on such date shall be the fair market value as mutually determined by the Company and the Holder.  If the Company and the Holder are unable to agree upon the fair market value of such security, then such dispute shall be resolved pursuant to Section 12.  All such determinations to be appropriately adjusted for any stock dividend, stock split, stock combination, reclassification or other similar transaction during the applicable calculation period.
 
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(g)         " Common Stock " means (i) the Company's shares of Common Stock, no par value, and (ii) any share capital into which such Common Stock shall have been changed or any share capital resulting from a reclassification of such Common Stock.
 
(h)         " Convertible Securities " means any stock or securities (other than Options) directly or indirectly convertible into or exercisable or exchangeable for shares of Common Stock.
 
(i)          " Eligible Market " means the Principal Market, the NYSE MKT LLC, The NASDAQ Global Market, The NASDAQ Capital Market, The NASDAQ Global Select Market or The New York Stock Exchange, Inc.
 
(j)         " Expiration Date " means the date sixty (60) months after the Issuance Date or, if such date falls on a day other than a Business Day or on which trading does not take place on the Principal Market (a " Holiday "), the next day that is not a Holiday.
 
(k)          "Fundamental Transaction " means (A) that the Company shall, directly or indirectly, including through the use of subsidiaries, Affiliates or otherwise to accomplish the same, in one or more related transactions, (i) consolidate or merge with or into (whether or not the Company is the surviving corporation) another Subject Entity, or (ii) sell, assign, lease, license, transfer, convey or otherwise dispose of all or substantially all of the properties or assets of the Company to one or more related Subject Entities, or (iii) make, or allow one or more Subject Entities to make, or allow the Company to be subject to or have its Common Stock be subject to or party to one or more Subject Entities making a purchase, tender or exchange offer that is accepted by the holders of at least either (x) 50% of the outstanding shares of Common Stock, (y) 50% of the outstanding shares of Common Stock calculated as if any shares of Common Stock held by all Subject Entities making or party to, or Affiliated with any Subject Entities making or party to, such purchase, tender or exchange offer were not outstanding, and offeror consummates the acquisition; or (z) such number of shares of Common Stock such that all Subject Entities making or party to, or Affiliated with any Subject Entity making or party to, such purchase, tender or exchange offer, become collectively the beneficial owners (as defined in Rule 13d-3 under the 1934 Act) of at least 50% of the outstanding shares of Common Stock, or (iv) consummate a stock purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with one or more Subject Entities whereby all such related Subject Entities, individually or in the aggregate, acquire, either (x) at least 50% of the outstanding shares of Common Stock, (y) at least 50% of the outstanding shares of Common Stock calculated as if any shares of Common Stock held by all the Subject Entities making or party to, or Affiliated with any Subject Entity making or party to, such stock purchase agreement or other business combination were not outstanding; or (z) such number of shares of Common Stock such that the Subject Entities become collectively the beneficial owners (as defined in Rule 13d-3 under the 1934 Act) of at least 50% of the outstanding shares of Common Stock, or (v) reorganize, recapitalize or reclassify its Common Stock, or (B) the Company shall, directly or indirectly, including through subsidiaries, Affiliates or otherwise, in one or more related transactions, issue or enter into any other instrument or transaction structured in a manner to circumvent, or that circumvents, the intent of this definition in which case this definition shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this definition to the extent necessary to correct this definition or any portion of this definition which may be defective or inconsistent with the intended treatment of such instrument or transaction.
 
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(l)         " Group " means a "group" as that term is used in Section 13(d) of the 1934 Act and as defined in Rule 13d-5 thereunder.
 
(m)         " Options " means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible Securities.
 
(n)        " Parent Entity " of a Person means an entity that, directly or indirectly, controls the applicable Person, including such entity whose common stock or equivalent equity security is quoted or listed on an Eligible Market (or, if so elected by the Required Holders, any other market, exchange or quotation system), or, if there is more than one such Person or such entity, the Person or Parent Entity designated by the Required Holders or in the absence of such designation, such Person or entity with the largest public market capitalization as of the date of consummation of the Fundamental Transaction.
 
(o)          " Person " means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization, any other entity and a government or any department or agency thereof.
 
(p)         " Principal Market " means the NASDAQ Capital Market.
 
(q)          " Required Holders " means the holders of the Loan, Guaranty and Security Agreement Warrants representing at least a majority of the shares of Common Stock underlying the Loan, Guaranty and Security Agreement Warrants then outstanding.
 
(r)      " Subject Entity " means any Person, Persons or Group or any Affiliate of any such Person, Persons or Group.  "Subject Entities" shall mean individual Subject Entities acting in concert as a Group.
 
(s)     " Successor Entity " means one or more Person or Persons (or, if so elected by the Holder, the Parent Entity) which may be the entity formed by, resulting from or surviving any Fundamental Transaction or one or more Person or Persons (or, if so elected by the Holder, the Company or the Parent Entity) with which such Fundamental Transaction shall have been entered into.
 
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(t)      " Trading Day " means any day on which the Common Stock is traded on the Principal Market, or, if the Principal Market is not the principal trading market for the Common Stock, then on the principal securities exchange or securities market on which the Common Stock is then traded; provided that "Trading Day" shall not include any day on which the Common Stock is scheduled to trade on such exchange or market for less than 4.5 hours or any day that the Common Stock is suspended from trading during the final hour of trading on such exchange or market (or if such exchange or market does not designate in advance the closing time of trading on such exchange or market, then during the hour ending at 4:00:00 p.m., New York time).
 
[Signature Page Follows]
 
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IN WITNESS WHEREOF, the Company has caused this Warrant to Purchase Common Stock to be duly executed as of the Issuance Date set out above.

 
RICEBRAN TECHNOLOGIES
     
 
By:
/s/ J. Dale Belt
 
Name:
J. Dale Belt
 
Title:
Exec. VP & Secretary
 

 
Exhibit 10.7
 
Executive Version
 
SUBORDINATION AGREEMENT
 
THIS SUBORDINATION AGREEMENT (" Agreement "), dated as of May 12, 2015 is made by and among the undersigned (collectively the " Subordinated Creditors "), Full Circle Capital Corporation, a Maryland corporation (" FCCC ") (with its participants, successors and assigns, FCCC is sometimes referred to herein as the " Preferred Lender ", and together with the Subordinated Creditors, the " Parties "). For all purposes herein, the " Borrower " means RiceBran Technologies, a California corporation.
BACKGROUND
 
A.             Borrower previously entered into that certain Note and Warrant Purchase Agreement dated January 17, 2012 (as amended thereafter, including without limitation pursuant to that Second Amended and Restated Note and Warrant Purchase Agreement dated as of November 13, 2013) (the " Purchase Agreement ") with each of the Subordinated Creditors. In connection with the transactions contemplated by the Purchase Agreement, the Borrower issued to the Subordinated Creditors an aggregate of $6,187,602.94 in principal amount of Subordinated Notes (as defined below). Borrowers concurrent herewith are amending the Purchase Agreement with that certain Amendment to Loan Documents dated as of May 12, 2015 (" Amendment to SubDebt Loan Documents "), pursuant to which the Subordinated Creditors will acquire either an Early Investor Restated Note (as defined therein) or Subsequent Investor Restated Note (as defined therein) and a warrant to acquire the Company's common stock; and
 
B.              FCCC, Borrower, NutraCea, LLC, a limited liability company organized and existing under the laws of the State of Delaware, SRB-IP, LLC, limited liability company organized and existing under the laws of the State of Delaware, SRB-MERM, LLC, a limited liability company organized and existing under the laws of the State of Delaware, SRB-LC, LLC, a limited liability company organized and existing under the laws of the State of Delaware, SRB-MT, LLC, a limited liability company organized and existing under the laws of the State of Delaware, SRB-WS, LLC, a limited liability company organized and existing under the laws of the State of Delaware, RiceX Company, a corporation incorporated under the laws of the State of Delaware, RiceX Nutrients, Inc., a corporation incorporated under the laws of the State of Montana, Rice Science, LLC, a limited liability company organized and existing under the laws of the State of Delaware, Rice RX, LLC, a limited liability company organized and existing under the laws of the State of Delaware, and Healthy Naturals, Inc., a corporation incorporated under the laws of the State of Nevada, expect to enter into a Loan, Guaranty and Security Agreement dated as of this same date (" FCC   Credit Agreement "). In connection therewith, Borrower shall execute and deliver to FCCC a Term Loan Note and Revolving Loan Note, each dated this same date (collectively, the " Notes ").
 
C.              In consideration of the capital to be provided by FCCC pursuant to the FCCC Credit Agreement and the Notes, and other financial accommodations that have been made and may hereafter be made by the Preferred Lender for the benefit of the Borrower, which in turn benefits the Subordinated Creditors, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Subordinated Creditors hereby agree to the terms hereof.
 
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AGREEMENT
1.                Definitions .  As used herein, the following terms have the meanings set forth below:
 
" Borrower Default " means any Default as defined in the FCCC Credit Agreement.
 
" Lien " means any security interest, mortgage, deed of trust, pledge, lien, charge, encumbrance, title retention agreement or analogous instrument or device, including the interest of each lessor under any capitalized lease and the interest of any bondsman under any payment or performance bond, in, of or on any assets or properties of a person, whether now owned or hereafter acquired and whether arising by agreement or operation of law.
 
" Preferred Lender Debt ", used herein in its most comprehensive sense, means the FCCC Credit Agreement, the Notes and any and all advances, debts, obligations and liabilities of the Borrower to the Preferred Lender, heretofore, now or hereafter made, incurred or created, whether voluntary or involuntary and however arising, whether due or not due, absolute or contingent, liquidated or unliquidated, determined or undetermined, including under any swap, derivative, foreign exchange, hedge, deposit, treasury management or other similar transaction or arrangement at any time entered into by the Borrower with the Preferred Lender, and whether the Borrower may be liable individually or jointly with others, or whether recovery upon such amounts may be or hereafter become unenforceable.
 
" Subordinated Indebtedness " means all obligations arising under the Subordinated Notes and each and every other debt, liability and obligation of every type and description which the Borrower or any of its subsidiaries may now or at any time hereafter owe to one or more of the Subordinated Creditors, whether such debt, liability or obligation now exists or is hereafter created or incurred, and whether it is or may be direct or indirect, due or to become due, absolute or contingent, primary or secondary, liquidated or unliquidated, or joint, several or joint and several.

" Subordinated Notes " means Borrower's Second Amended and Restated Secured Promissory Notes, dated May 12, 2015 and/or Amended and Restated Secured Promissory Note dated May 12, 2015, payable to the order of the Subordinated Creditors in the original aggregate principal amount of Six Million Three Hundred Nine Thousand Five Hundred Twenty Seven Dollars ($6,309,527), together with all renewals, extensions and modifications thereof and any note or notes issued in substitution therefor.

2.                Subordinated Indebtedness . The Borrower and the Subordinated Creditors have delivered to the Preferred Lender true and complete copies of the Purchase Agreement, Amendment to SubDebt Loan Documents, the Subordinated Notes, and any and all other documents governing the terms of the Subordinated Indebtedness in effect on the date hereof (collectively, the " Subordinated Indebtedness Documents "). No purported amendment, modification, waiver or restatement of the Subordinated Indebtedness Documents shall be effective without the express prior written consent of the Preferred Lender.
 
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3.                Subordination .  The payment of all of the Subordinated Indebtedness is hereby expressly subordinated to the extent and in the manner hereinafter set forth to the payment in full of the Preferred Lender Debt; and regardless of any priority otherwise available to the Subordinated Creditors by law or by agreement, and any Lien claimed therein by the Subordinated Creditors shall be and remain fully subordinate for all purposes to the rights of the Preferred Lenders for all purposes whatsoever. The Subordinated Indebtedness shall continue to be subordinated to the Preferred Lenders Debt even if the Preferred Lenders Debt or any portion thereof is deemed subordinated, avoided or disallowed under the United States Bankruptcy Code or other applicable law.
 
4.                Principal and Interest Payments .
 
4.1.            Principal Payments . Except as expressly set forth in this Section 4.1 or in Section 6, until all of the Preferred Lender Debt has been paid in full, no Subordinated Creditor shall, without the prior written consent of the Preferred Lender, demand, receive or accept any principal payment from the Borrower in respect of the Subordinated Indebtedness, or exercise any right of or permit any setoff in respect of the Subordinated Indebtedness. Notwithstanding the foregoing, provided that no Borrower Default exists will occur as a result of or immediately following such payment, commencing as of November 30, 2016 and thereafter on the last Business Day of each of the 2 nd , 5 th , 8 th and 11 th month of each calendar year, the Borrower may pay, and the Subordinated Creditors may accept, principal of the Subordinated Indebtedness in an amount equal to five percent (5%) of the original principal amount of the Subordinated Indebtedness. In addition, the Borrower may pay, and the Subordinated Creditors may accept, payment of principal of the Subordinated Indebtedness with up to 25% of the net proceeds of any common equity offering, including proceeds upon the exercise of outstanding warrants.
 
4.2.           Interest Payments .  A Subordinated Creditor may demand, receive and accept regularly scheduled payments of interest in respect of the Subordinated Indebtedness; provided, that without the prior written consent of the Preferred Lender, the Subordinated Creditor shall not demand, receive or accept any interest payment from the Borrower in respect of the Subordinated Indebtedness so long as any Borrower Default exists or if a Borrower Default will occur as a result of or immediately following such interest payment.
 
5.                Receipt of Prohibited Payments .  The Subordinated Creditors each agree that if the Subordinated Creditor receives any payment on the Subordinated Indebtedness that the Subordinated Creditor is not entitled to receive under the provisions of this Agreement, the Subordinated Creditor will hold the amount so received in trust for the Preferred Lender and will forthwith turn over such payment to the Preferred Lender in the form received (except for the endorsement of the Subordinated Creditor where necessary) for application to then-existing Preferred Lender Debt (whether or not due), in such manner of application as the Preferred Lender may deem appropriate.  If a Subordinated Creditor exercises any right of setoff that the Subordinated Creditor is not permitted to exercise under the provisions of this Agreement, the Subordinated Creditor will promptly pay over to the Preferred Lender, in immediately available funds, an amount equal to the amount of the claims or obligations offset.  If a Subordinated Creditor fails to make any endorsement required under this Agreement, the Preferred Lender, or any officer or employee or agent on behalf of the Preferred Lender, is hereby irrevocably appointed as the attorney-in-fact (which appointment is coupled with an interest) for such Subordinated Creditor to make such endorsement in the Subordinated Creditor's name.
 
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6.               Action on Subordinated Indebtedness .  The Subordinated Creditors each agree not to commence any action or proceeding against the Borrower to recover all or any part of the Subordinated Indebtedness, or join with any creditor (unless the Preferred Lender shall so join) in bringing any proceeding against the Borrower under any bankruptcy, reorganization, readjustment of debt, arrangement of debt receivership, liquidation or insolvency law or statute of the federal or any state government, or take possession of, sell, or dispose of any item that comprises "Collateral" pursuant to the terms of any of the FCCC Credit Agreement or any related Loan Document (" Collateral "), or exercise or enforce any right or remedy available to a Subordinated Creditor with respect to any such Collateral, unless and until all Preferred Lender Debt has been paid in full. Notwithstanding anything to the contrary set forth in this Section 6 , if all of Borrower's obligations to the Preferred Lender are not fully paid and satisfied, and the Preferred Lender has not initiated a foreclosure or other action against Borrower, upon five (5) business days' prior written notice to the Preferred Lender after expiration of the Subordinated Creditor Standstill Period (as defined below), the Subordinated Creditors may exercise any rights or remedies they may have against Borrower whether by judicial or non-judicial foreclosure or otherwise provided that the receipt of any payments by the Subordinated Creditors shall be paid over to the Preferred Lender, in immediately available funds, until payment in full of the obligations to the Preferred Lender. " Subordinated Creditor   Standstill Period " means the period beginning on the occurrence of an event of default under any of the agreements between the Subordinated Creditors and Borrower and ending on the date that is six (6) months following the date after the Subordinated Creditors shall have given notice to each of the Preferred Lender and to Borrower that such event of default shall have occurred and be continuing and of the intent of any of the Subordinated Creditors to exercise their rights and remedies.
 
7.                Action Concerning Collateral .
 
7.1.           Remedies . Notwithstanding any Lien now held or hereafter acquired by the Subordinated Creditors, the Preferred Lender may take possession of, sell, dispose of, and otherwise deal with all or any part of any collateral of the Subordinated Creditors, and may enforce any right or remedy available to it with respect to the Borrower or such collateral, all without notice to or consent of any of the Subordinated Creditors except as specifically required by applicable law.
 
7.2.           Deemed Consent and Release of Lien . In addition, and without limiting the generality of Section 7.1 , if (i) a Borrower Default has occurred and is continuing, (ii) the Borrower or any of the Preferred Lender intends to sell or otherwise dispose of any Collateral of the Preferred Lender to an unrelated third party outside the ordinary course of business, (iii) Preferred Lenders have each given written notice thereof to the Subordinated Creditors, and (iv) the Subordinated Creditors have failed, within ten (10) days after receipt of such notice, to purchase for cash the Preferred Lender Debt for the full amount thereof, the Subordinated Creditors shall be deemed to have consented to such sale or disposition, to have released any Lien they may have in such Collateral and to have authorized the Preferred Lender or its agents to file partial releases (and any related financing statements such as "in lieu" financing statements under Part 7 of Article 9 of the Uniform Commercial Code) with respect to such Collateral.
 
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7.3.           No Assumed Duty . The Preferred Lender shall have no duty to preserve, protect, care for, insure, take possession of, collect, dispose of, or otherwise realize upon any of the assets of Borrower, whether or not they comprise Collateral for the Preferred Lender, and in no event shall the Preferred Lender be deemed a Subordinated Creditor's agent with respect to any assets of Borrower.  All proceeds received by the Preferred Lender with respect to any of Borrower's assets may be applied, first, to pay or reimburse the Preferred Lender for all costs and expenses (including reasonable attorneys' fees) incurred by the Preferred Lender (or either of them) in connection with the collection of such proceeds, and, second, to any Preferred Lender Debt in any order that the Preferred Lender may choose.
 
8.               Bankruptcy and Insolvency .  In the event of any receivership, insolvency, bankruptcy, assignment for the benefit of creditors, reorganization or arrangement with creditors, whether or not pursuant to bankruptcy law, the sale of all or substantially all of the assets of the Borrower, dissolution, liquidation or any other marshalling of the assets or liabilities of the Borrower, the Subordinated Creditors will file all claims, proofs of claim or other instruments of similar character necessary to enforce the obligations of the Borrower in respect of the Subordinated Indebtedness and will hold in trust for the Preferred Lender and promptly pay over to the Preferred Lender in the form received (except for the endorsement of the Subordinated Creditors where necessary) for application to the then-existing Preferred Lender Debt, any and all moneys, dividends or other assets received in any such proceedings on account of the Subordinated Indebtedness, unless and until the Preferred Lender Debt has been paid in full. If a Subordinated Creditor shall fail to take any such action, the Preferred Lenders, as attorney-in-fact for the Subordinated Creditor, may take such action on the Subordinated Creditor's behalf.  The Subordinated Creditors each hereby irrevocably appoints the Preferred Lender, or any officers or employees of the Preferred Lender designated by the Preferred Lender, as the attorney-in-fact for the Subordinated Creditors (which appointment is coupled with an interest) with the power but not the duty to demand, sue for, collect and receive any and all such moneys, dividends or other assets and give acquaintance therefor and to file any claim, proof of claim or other instrument of similar character, to vote claims comprising Subordinated Indebtedness to accept or reject any plan of partial or complete liquidation, reorganization, arrangement, composition or extension and to take such other action in the Preferred Lender's name or in the name of the Subordinated Creditors as the Preferred Lender may deem necessary or advisable for the enforcement of the agreements contained herein; and the Subordinated Creditors will each execute and deliver to the Preferred Lender such other and further powers-of-attorney or instruments as the Preferred Lender may request in order to accomplish the foregoing. If the Preferred Lender desires to permit the use of cash collateral or to provide post-petition financing to the Borrower, the Subordinated Creditors shall not object to the same or assert that its interests are not being adequately protected.
 
9.               Restrictive Legend; Transfer of Subordinated Indebtedness .  The Subordinated Creditors will cause the Subordinated Notes and all other notes, bonds, debentures or other instruments evidencing the Subordinated Indebtedness or any part thereof to contain a specific statement (in the form attached hereto as Exhibit A ) thereon to the effect that the indebtedness thereby evidenced is subject to the provisions of this Agreement, and the Subordinated Creditors will mark their books conspicuously to evidence the subordination effected hereby.  The Subordinated Creditors each represents and warrants to the Preferred Lender that each such Subordinated Creditor is the lawful holder of the applicable Subordinated Note and has not transferred any interest therein to any other person or entity.  In the event of the transfer in any manner of the Subordinated Indebtedness by the Subordinated Creditors to any person who is not a party to this Agreement, the transferring party shall obtain, as a condition to and upon such transfer, the written consent of the transferee to become a party to and be bound by the terms of this Agreement and to the placing of the legend as required by this Section 9 upon the notes, bonds, debentures or other instruments evidencing the Subordinated Indebtedness.
 
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10.             Continuing Effect .  This Agreement shall constitute a continuing agreement of subordination, and the Preferred Lender may, without notice to or consent by the Subordinated Creditors, and except as set forth in Section 2 , modify any term of the Preferred Lender Debt in reliance upon this Agreement.  Without limiting the generality of the foregoing, the Preferred Lenders may, at any time and from time to time, without the consent of or notice to the Subordinated Creditors and without incurring responsibility to the Subordinated Creditors or impairing or releasing any of the Preferred Lender's rights or the Subordinated Creditors' obligations hereunder:
 
(a)            change the amount of payment or extend the time for payment or renew or otherwise alter the terms of any Preferred Lenders Debt or any instrument evidencing the same in any manner;
 
(b)             if applicable, sell, exchange, release or otherwise deal with any property at any time securing payment of all or any portion of the Preferred Lenders Debt or any part thereof;
 
(c)              release anyone liable in any manner for the payment or collection of the Preferred Lenders Debt or any part thereof;
 
(d)             exercise or refrain from exercising any right against the Borrower or any other person (including the Subordinated Creditors); and
 
(e)         apply any sums received by the Preferred Lender, by whomsoever paid and however realized, to the Preferred Lender Debt in such manner as the Preferred Lender shall deem appropriate.
 
11.             No Commitment .  None of the provisions of this Agreement shall be deemed or construed to constitute or imply any commitment or obligation on the part of the Preferred Lender to make any future loans or other extensions of credit or financial accommodations to the Borrower. Each of the Subordinated Creditors hereby waives any and all right to require the marshalling of assets in connection with the exercise of any of the Preferred Lender's remedies permitted by applicable law or agreement.
 
12.             Notices .  Any notice or other communication required or permitted to be given or made under this Agreement (i) shall be in writing, (ii) may be delivered by hand delivery, First Class U.S. Mail (regular, certified, registered or expedited delivery), FedEx, UPS Overnight, Airborne or other nationally recognized delivery service, fax, or electronic transmission, and (iii) shall be delivered or transmitted to the appropriate address as set forth herein. Each notice or other communication shall be delivered or addressed to a party at its address set forth below.  A party's address for notice may be changed from time to time by notice given to the other party.
 
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If to the Subordinated Creditors:
 
 
If to the Preferred Lender:
Full Circle Capital Corporation, as Agent
 
102 Greenwich Avenue,
 
2nd Floor
 
Greenwich, CT 06830
 
Attn.: Gregg J. Felton
 
Email: gfelton@fcfcapital.com
 
With a copy to (which shall not constitute notice):

 
LeClairRyan, A Professional Corporation
 
One Riverfront Plaza
 
1037 Raymond Boulevard, Sixteenth Floor
 
Newark, NJ 07102
 
Attn: James T. Seery
 
Facsimile No.: 973-491-3415
 
Email: james.seery@leclairryan.com

If to the Borrower:
6720 North Scottsdale Road, Suite 390
 
Scottsdale, AZ 85253
 
Attention: W. John Short
 
Facsimile: (480) 315-8275
 
 
With a copy to:
Weintraub Tobin Chediak Coleman Grodin
(which shall not constitute notice)
400 Capitol Mall, 11 th Floor
 
Sacramento, CA 95814
 
Attention: Chris Chediak, Esq.
 
Facsimile: (916) 446-1611
 
Absent fraud or manifest error, a receipt signed by the addressee or its authorized representative, a certified or registered mail receipt, a signed delivery service confirmation or a fax or e-mail confirmation of transmission shall constitute proof of delivery.  Any notice actually received by the addressee shall constitute delivery notwithstanding the failure to comply with any provisions of this subsection. A notice delivered by regular First Class U.S. Mail shall be deemed to have been delivered on the third (3 rd ) business day after its post-mark.  Any other notice shall be deemed to have been received on the date and time of the signed receipt or confirmation of delivery or transmission thereof, unless that receipt or confirmation date and time is not a business day or is after 5:00 p.m. local time on a business day, in which case such notice shall be deemed to have been received on the next succeeding business day.
 
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13.            Conflict in Agreements .  If the subordination provisions of any instrument evidencing Subordinated Indebtedness conflict with the terms of this Agreement, the terms of this Agreement shall govern the relationship between the Preferred Lender and the Subordinated Creditors.
 
14.            No Waiver .  No waiver shall be deemed to be made by any Party of any of its rights hereunder unless the same shall be in writing signed on behalf of the Party, and each such waiver, if any, shall be a waiver only with respect to the specific matter or matters to which the waiver relates and shall in no way impair the rights of the Party or the obligations of the other Parties in any other respect at any time.
 
15.            Binding Effect; Acceptance .  This Agreement shall be binding upon the Parties and their respective heirs, legal representatives, successors and assigns and shall inure to the benefit of the Parties and their respective participants, successors and assigns irrespective of whether this or any similar agreement is executed by any other creditor of the Borrower.  Notice of acceptance of this Agreement or of reliance upon this Agreement is hereby waived by each of the Parties.
 
16.            Miscellaneous .  The Section and paragraph headings herein are included for convenience of reference only and shall not constitute a part of this Agreement for any other purpose.  This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which together shall constitute one instrument.
 
17.            Governing Law; Consent to Jurisdiction and Venue .  This Agreement shall be governed by and construed in accordance with the substantive laws (other than conflict laws) of the State of California.  Each party consents to the personal jurisdiction of the state and federal courts located in the State of California in connection with any controversy related to this Agreement, waives any argument that venue in any such forum is not convenient, and agrees that any litigation initiated by any of them in connection with this Agreement may be venued in either the state or federal courts located in Sacramento County, California.
 
18.            Waiver of Jury Trial .  To the extent permissible under law, the parties hereto, each after consulting or having had the opportunity to consult with legal counsel, knowingly, voluntarily and intentionally waive any right they may have to a trial by jury in any litigation.  No party shall seek to consolidate, by counterclaim or otherwise, any litigation in which a jury trial has been waived with any other litigation in which a jury trial cannot be or has not been waived.  This provision shall be deemed to be enforceable to the fullest extent of the law as it may exist at the time any litigation is commenced.
 
[ Remainder of Page Intentionally Left Blank; Signature Pages Follow ]
 
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The Parties have executed this Subordination Agreement as of the date and year first above-written.
 
FULL CIRCLE CAPITAL CORPORATION
 
 
By:  /s/
  
 
 
Name:
                      
 
Title:
                             
 
 
SUBORDINATED CREDITORS:
 
 
/s/ Greg Vislocky
 
(Greg Vislocky)
 
[Signature Page to Subordination Agreement]
 
Continued Signature Page for Subordinated Creditors

 
/s/ Brian Rick Delamarter
 
(Brian Rick Delamarter)
 
[Signature Page to Subordination Agreement]
 
Continued Signature Page for Subordinated Creditors

 
/s/ Harold Guy Delamarter
 
(Harold Guy Delamarter)
 
[Signature Page to Subordination Agreement]
 
Continued Signature Page for Subordinated Creditors

Walter John Short and Karen A. Wilson
   
 
/s/ W. John Short
 
(W. John Short)
 
 
/s/ Karen A. Wilson
 
(Karen A. Wilson)
 
[Signature Page to Subordination Agreement]
 
Continued Signature Page for Subordinated Creditors
 
 
The Shoshana Shapiro Halpern Revocable Trust UA June 13, 2006
     
 
By:
/s/ Baruch Halpern
 
Name: 
Baruch Halpern
 
Its:
Trustee
     
 
By:
/s/ Shoshana Halpern
 
Name: 
Shoshana Halpern
 
Its:
Trustee
     
  Pensco Trust Co., FBO Baruch Halpern IRA
     
 
/s/ Baruch Halpern
 
(Baruch Halpern)
 
[Signature Page to Subordination Agreement]
 
Continued Signature Page for Subordinated Creditors

 
Weintraub Partners
   
  By:
/s/ Chris Chediak
  Name: 
Chris Chediak
  Title:
Partner
 
[Signature Page to Subordination Agreement]
 
Continued Signature Page for Subordinated Creditors
 
 
 
 
(Alon Gibli)
 
[Signature Page to Subordination Agreement]
 
ACKNOWLEDGMENT BY BORROWER
 
The undersigned, being the Borrower referred to in the foregoing Subordination Agreement (" Agreement "), hereby (i) acknowledges receipt of a copy thereof, (ii) agrees to all of the terms and provisions thereof, (iii) agrees to and with the Preferred Lender that it shall make no payment on the Subordinated Indebtedness that the Subordinated Creditors would not be entitled to receive under the provisions of the Agreement, (iv) agrees that any such payment will constitute a default under the Preferred Lender Debt, and (v) agrees to mark its books conspicuously to evidence the subordination of the Subordinated Indebtedness effected hereby.
 
RICEBRAN TECHNOLOGIES
 
     
By:
/s/ W. John Short
 
Name: 
W. John Short
 
Title:
Chief Executive Officer
 
 
ACKNOWLEDGMENT BY SUBSIDIARY GRANTORS
 
Each of the undersigned hereby (i) acknowledges receipt of a copy of the Subordination Agreement dated as of May 12, 2015 made by and among Gregory J. Vislocky, Brian Rick Delamarter, Harold Guy Delamarter, Baruch Halpern and Shoshana Halpern as trustees for The Shoshana Shapiro Halpern Revocable Trust UA June 13, 2006, Weintraub Partners, W. John Short and Karen A. Wilson, Edward McMillan as trustee for The Revocable Trust of Edward L. McMillan Revocable Trust U/D/T dated February 17, 1999, Zanesville Partners Fund, LLC, Alon Gibli, Michael Geliebter, and Pensco Trust Co., FBO Baruch Halpern IRA (collectively the " Subordinated Creditors "), Full Circle Capital Corporation, a Maryland corporation (with its participants, successors and assigns, FCCC is sometimes referred to herein as the " Preferred Lender ") (the " Agreement "), (ii) agrees to all of the terms and provisions of the Agreement, (iii) agrees to and with the Preferred Lender that it shall make no payment on the Subordinated Indebtedness that the Subordinated Creditors would not be entitled to receive under the provisions of the Agreement, (iv) agrees that any such payment will constitute a default under the Preferred Lender Debt, and (v) agrees to mark its books conspicuously to evidence the subordination of the Subordinated Indebtedness effected hereby.

NUTRACEA, LLC,
SRB-IP, LLC,
SRB-MERM, LLC,
SRB-LC, LLC,
SRB-MT, LLC,
SRB-WS, LLC,
RICEX COMPANY,
RICEX NUTRIENTS, INC.,
RICE SCIENCE, LLC,
RICE RX, LLC
HEALTHY NATURALS, INC.

Each by: 
/s/ J. Dale Belt
Name:
J. Dale Belt
Title:
Secretary
 
EXHIBIT A
 
Legend
 
"THIS INSTRUMENT IS SUBJECT TO THE TERMS OF A SUBORDINATION AGREEMENT BY _____________ IN FAVOR OF FULL CIRCLE CAPITAL CORPORATION, DATED MAY 12, 2015."
 
 
Exhibit A - 1
Exhibit 10.8
 
Execution Version

AMENDMENT TO LOAN DOCUMENTS
 
This Amendment to Loan Documents (" Amendment "), dated as of May 12, 2015 (" Effective Date "), is entered into by and among RiceBran Technologies, a California corporation (the " Company "), and the persons and entities listed on the schedule of investors attached hereto as Schedule I (each an " Investor " and, collectively, the " Investors "). The parties agree as follows:
 
RECITALS
 
A.                   The Company and those Investors listed on Schedule I hereto are parties to a Note and Warrant Purchase Agreement, originally dated January 17, 2012 (as amended thereafter, including without limitation pursuant to that Second Amended and Restated Note and Warrant Purchase Agreement dated as of November 13, 2013, " Purchase Agreement "), pursuant to which the Investors purchased from the Company convertible promissory notes (as amended, the " Notes ").
 
B.                    The Company and the Investors are parties to a Second Amended and Restated Security Agreement, dated as of November 13, 2013 (" Existing Security Agreement "), which secures the Company's obligations under the Notes.
 
C.                    The Company has entered into a Loan, Guaranty and Security Agreement of even date herewith (" Loan Agreement ") with Full Circle Capital Corporation relating to an $8,000,000 senior secured credit facility that may increase to $10,000,000 (" Credit Facility ").
 
D.                    As a condition to closing the transactions contemplated by the Credit Facility, the lenders require that the Investors agree to subordinate their Notes and their security interests under the Security Agreement to the obligations and security interests relating to the Credit Facility (" Subordination ").
 
E.                     As consideration for the Subordination described herein, the undersigned Investors require that the Company (i) amend the Notes as provided herein and (ii) issue to the Investors warrants to purchase shares of the Company's common stock as provided herein.
 
F.                    Capitalized terms used herein that are not defined herein shall have the meanings given to them in the Purchase Agreement.
 
AGREEMENT
 
In consideration of the above recitals and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties agree as follows:
 

1.                      Notes .
 
(a)              Amendment of Notes .  As of the Effective Date, each of the undersigned Investors (" Early Participating Investors ") that are Early Investors under the Purchase Agreement has executed an amended and restated promissory note in the form attached hereto as Exhibit A (" Early Investor   Restated Notes ").  Each of the undersigned Investors that are Subsequent Investors under the Purchase Agreement (" Subsequent Participating Investors ", and together with the Early Participating Investors, the " Participating Investors ") has executed an amended and restated promissory note in the form attached hereto as Exhibit B (" Subsequent Investor Restated Notes ", and together with the Early Investor Restated Notes, the " Restated Notes ").  Each Early Investor Restated Note executed by an Early Participating Investor amends and restates all Initial Notes held by such Early Participating Investor, effective as of the Effective Date.  Each Subsequent Investor Restated Note executed by a Subsequent Participating Investor amends and restates all Subsequent Notes held by such Subsequent Participating Investor, effective as of the Effective Date.  The parties agree and acknowledge that (i) the principal amount outstanding under an Early Investor Restated Note held by an Early Participating Investor shall be, as of the Effective Date, the same as the total principal amount outstanding under all Early Notes held by such Early Participating Investor immediately prior to the Effective Date, (ii) the principal amount outstanding under a Subsequent Investor Restated Note held by an Subsequent Participating Investor shall be, as of the Effective Date, the same as the principal amount outstanding under all Subsequent Notes held by such Subsequent Participating Investor immediately prior to the Effective Date, (iii) the Restated Notes reflect the principal amount listed next to the Participating Investor's name on Schedule 1 hereto, and (iv) the accrued but unpaid interest on the Initial Notes and the Subsequent Notes immediately prior to the Effective Date shall continue to be accrued but unpaid interest on the Restated Notes as of the Effective Date.  Upon the Effective Date, all physical Notes currently held by the Participating Investors shall be cancelled and terminated automatically and have no further force or effect.  Upon the Effective Date, each Participating Investor shall destroy any physical Notes held by such Participating Investor.
 
(b)              Impact on Notes .  Each Early Investor Restated Note shall constitute an "Initial Note" that was issued under the Purchase Agreement and amended as provided herein, each Subsequent Investor Restated Note shall constitute a "Subsequent Note" that was issued under the Purchase Agreement and amended as provided herein and each Restated Note shall constitute a "Note" issued pursuant to the Purchase Agreement
 
2.                    Issuance of Warrants .  Effective as of the Effective Date, the Company shall issue to each Participating Investor a warrant to purchase shares of the Company's common stock in the form attached hereto as Exhibit C (each, a " Participation Warrant ", and collectively, the " Participation Warrants ").  The number of shares of the Company's common stock that will underlie each Participation Warrant to be issued to a Participating Investor shall equal the product of (i) such Participating Investor's Pro Rata Share and (ii) 300,000 (subject to adjustment for stock splits, stock dividends, recapitalizations and the like) shares of the Company's common stock.  For purposes of this Amendment, a " Participating Investor's Pro Rata Share " shall mean the fraction determined by dividing (a) the total outstanding principal amount as of the Effective Date of the Restated Notes held by a Participating Investor divided by (b) the total outstanding principal amount as of the Effective Date of all Restated Notes held by Participating Investors and non-participating Investors.  The Company shall deliver the Participation Warrants to the Participating Investors within five (5) business days after the Effective Date.
 
3.                  Security Agreement .  Effective as of the Effective Date, (i) the Existing Security Agreement shall be amended and restated in its entirety in its entirety to read as set forth on Exhibit D (as amended, the " Security Agreement "), (ii) each of the Participating Investors shall execute and deliver the Security Agreement to the other parties thereto and (iii) the Security Agreement shall be binding on all Investors.  Each of the undersigned Investors has executed and delivered the Security Agreement to the Company.
 
4.                     Representations and Warranties of the Company . The Company represents and warrants to each Investor, as follows:
 
(a)                Authority . The execution, delivery and performance by the Company of this Amendment and the consummation of the transactions contemplated hereby (i) are within the power of the Company and (ii) have been duly authorized by all necessary actions on the part of the Company.
 
(b)              Enforceability .  This Amendment has been duly executed and delivered by the Company and constitutes a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as limited by bankruptcy, insolvency or other laws of general application relating to or affecting the enforcement of creditors' rights generally and general principles of equity.
 
(c)              Non-Contravention . The authorization, execution and delivery by the Company of this Amendment and the performance and consummation of the transactions contemplated thereby do not and will not (i) violate the Company's Articles of Incorporation or Bylaws (" Charter Documents ") or any material judgment, order, writ, decree, statute, rule or regulation applicable to the Company; or (ii) violate any provision of, or result in the breach or the acceleration of, or entitle any other Person to accelerate (whether after the giving of notice or lapse of time or both), any material mortgage, indenture, agreement, instrument or contract to which the Company is a party or by which it is bound.
 
5.                     Representations and Warranties of Investors . Each undersigned Investor, for that Investor alone, represents and warrants to the Company as follows:
 
(a)             Information on Company .   The Investor has been furnished with information regarding the business, operations and financial condition of the Company, has had the opportunity to review the Company's most recent Annual Report on Form 10-K filed with the Commission before the Effective Date, all Quarterly Reports on Form 10-Q and all Current Reports on Form 8-K filed by the Company with the United States Securities and Exchange Commission ("Commission") subsequent to such Form 10-K, all exhibits filed with such Forms 10-K, 10-Q and/or 8-K, and all filings made with the Commission available at the EDGAR website.  In addition, the Investor has received such other information concerning the Company's operations, financial condition and other matters as the Investor has requested in writing, and considered all factors the Investor deems material in deciding on the advisability of entering into the transactions contemplated hereby.
 
(b)               Review of Amendment .  The Investor has carefully read Exhibits hereto, as applicable to such Investor, and understands how the terms of the Notes will be affected by the amendments described herein.
 
(c)              Priority; Consent .  The Investor has read and understands the terms of the Security Agreement and understands that the Notes and the Restated Notes and the security interests granted to the Investors under the Security Agreement with respect to the Notes and the Restated Notes are junior to the security interests granted to the investors in the Credit Facility.  By entering into this Amendment, the Investor consents to such prior interests of the lenders under the Credit Facility.
 
(d)             Accredited Investor .  The Investor is an "accredited investor" as defined in Rule 501(a) of Regulation D promulgated under the Securities Act.  Such Investor is experienced in investments and business matters and, with its representatives, has such knowledge and experience in financial, tax and other business matters as to enable the Investor to utilize the information made available by the Company to evaluate the merits and risks of and to make an informed investment decision with respect to the proposed transactions contemplated hereby.
 
(e)               Investment .  The Investor will acquire a Warrant and the Restated Note, in each case as principal for its own account for investment only and not as a nominee or agent and not with a view towards or for resale in connection with the distribution thereof.
 
(f)               Compliance with Securities Act .  The Investor understands and agrees that any security of the Company acquired by the Investor hereunder and the underlying securities thereof are "restricted securities" and have not been registered under the Securities Act or any applicable state securities laws, by reason of their issuance in a transaction that does not require registration under the Securities Act (based in part on the accuracy of the representations and warranties of Investor contained herein), and that such securities must be held indefinitely unless a subsequent disposition is registered under the Securities Act or any applicable state securities laws or is exempt from such registration.  Such Investor is aware that the Company is under no obligation to effect any such registration with respect to the Restated Notes, the Warrants, or the securities underlying the Warrant.
 
(g)              Outstanding Amounts .  The aggregate amounts of principal outstanding under the Note(s) held by such Investor as of March 31, 2015 are accurately described on Schedule 1 hereto, and the Investor has been paid all interest that has accrued on the Note(s) held by such Investor through March 31, 2015.
 
(h)              Organization; Authority .  If an entity, such Investor is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization with full right, corporate or partnership power and authority to enter into and to consummate the transactions contemplated by this Amendment and otherwise to carry out its obligations hereunder.
 
(i)                Authority; Enforceability .  This Amendment has been duly authorized, executed and delivered by the Investor and is a valid and binding agreement, enforceable against Investor in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights generally and to general principles of equity; and Investor has full corporate power and authority necessary to enter into this Amendment and to perform its obligations hereunder.
 
(j)               No Tax or Legal Advice .  Such Investor understands that nothing in this Amendment, any other agreement or any other materials presented to such Investor in connection with the transactions contemplated hereby constitutes legal, tax or investment advice.  Such Investor has consulted such legal, tax and investment advisors as it, in its sole discretion, has deemed necessary or appropriate in connection with its decision to enter into this Amendment.
 
(k)               No Prior Transfer .  No person other than such Investor has any rights to payment under any Notes issued to such Investor, and such Investor has not transferred or assigned, or agreed to transfer or assign, any of such Investor's rights under any Note acquired by such Investor.
 
6.                     Consent to Loan .  The Investors hereby consent to the Credit Facility.
 
7.                     Confidentiality .  The Investors understand that the existence and terms of the Loan Agreement constitute nonpublic information that is confidential and that the Investors will not disclose such information to third parties who are not under duties of confidentiality (such as attorneys) or use such information in violation of law.
 
8.                     Intentionally Omitted .
 
9.                     Miscellaneous .
 
(a)              No Further Amendment .  The parties hereto acknowledge and agree that there are no other amendments, changes, waivers of modifications to the Purchase Agreement, the Security Agreement or the Notes other than as set forth in this Amendment, and all other terms of such agreements and instruments shall remain in full force and effect upon the Effective Date except as expressly modified or waived herein.
 
(b)            Waivers and Amendments .  Except as expressly provided otherwise herein, this Amendment may not be amended, waived, discharged or terminated other than by a written instrument referencing this Amendment and signed by the Company and Investors holding a Majority in Interest.  Any such amendment, waiver, discharge or termination effected in accordance with this paragraph shall be binding upon each current and future holder of any of the Notes and upon any current or future assignee of rights under the Purchase Agreement or the Security Agreement.
 
(c)               Governing Law . This Amendment and all actions arising out of or in connection with this Amendment shall be governed by and construed in accordance with the laws of the State of California, without regard to the conflicts of law provisions of the State of California or of any other state.
 
(d)              Survival . The representations, warranties, covenants and agreements made herein shall survive the execution and delivery of this Amendment.
 
(e)              Successors and Assigns . The rights and obligations of the Company and the Investors shall be binding upon and benefit the successors, assigns, heirs, administrators and transferees of the parties.
 
(f)                 Assignment by the Company . The rights, interests or obligations hereunder may not be assigned, by operation of law or otherwise, in whole or in part, by the Company without the prior written consent of Investors holding a Majority in Interest.
 
(g)              Entire Agreement . This Amendment together with the Notes, the Purchase Agreement and the Security Agreement constitute and contain the entire agreement among the Company and Investors regarding the subject matter hereof and supersede any and all prior agreements, negotiations, correspondence, understandings and communications among the parties, whether written or oral, respecting the subject matter hereof.
 
(h)              Notices . All notices, requests, demands, consents, instructions or other communications required or permitted hereunder shall be in writing and faxed, mailed or delivered to each party as provided in the Purchase Agreement.
 
(i)                Separability of Agreements; Severability of this Amendment . Any invalidity, illegality or limitation on the enforceability of the Amendment or any part thereof, by any Investor whether arising by reason of the law of the respective Investor's domicile or otherwise, shall in no way affect or impair the validity, legality or enforceability of this Amendment with respect to other Investors.  If any provision of this Amendment shall be judicially determined to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
 
(j)                Counterparts . This Amendment may be executed in one or more counterparts, each of which will be deemed an original, but all of which together will constitute the same agreement.  Electronic copies of signed signature pages will be deemed binding originals.
 
[Signature Page Follows]
 
The parties have caused this Amendment to Loan Documents to be duly executed and delivered as of the date and year first written above.

COMPANY:
INVESTORS
 
RICEBRAN TECHNOLOGIES
a California corporation
/s/ Gregory J. Vislocky
 
Gregory J. Vislocky
 
By:
/s/ J. Dale Belt
 
 
J. Dale Belt, Chief Financial Officer
The Shoshana Shapiro Halpern
   
Revocable Trust UA June 13, 2006
       
   
By: 
/s/ Baruch Halpern
     
Baruch Halpern, Trustee
       
   
By: 
/s/ Shoshana Halpern
     
Shoshana Halpern, Trustee
       
   
Pensco Trust Co., FBO Baruch Halpern IRA
 
   
/s/ Baruch Halpern
   
Baruch Halpern

[Signature Page for Amendment to Loan Documents]
 
Continued Signature Page for Investors

 
/s/ Brian Rick Delamarter
 
(Brian Rick Delamarter)

[Signature Page for Amendment to Loan Documents]
 

Continued Signature Page for Investors

 
/s/ Harold Guy Delamarter
 
(Harold Guy Delamarter)

[Signature Page for Amendment to Loan Documents]
 

Continued Signature Page for Investors
 
 
Walter John Short and Karen A. Wilson
   
 
/s/ W. John Short
 
(W. John Short)
   
 
/s/ Karen A. Wilson
 
(Karen A. Wilson)

[Signature Page for Amendment to Loan Documents]
 

Continued Signature Page for Investors

 
Weintraub Partners
   
  By:
/s/ Chris Chediak
  Name:  
Chris Chediak
  Title:
Partner

[Signature Page for Amendment to Loan Documents]
 

Continued Signature Page for Investors
 
     
 
(Alon Gibli)

[Signature Page for Amendment to Loan Documents]
 

SCHEDULE I
 
OUTSTANDING NOTE BALANCES
 
For each Investor, the table below sets forth as of March 31, 2015 the total principal amount outstanding under all Notes held by the Investor
 
Investor
 
Principal Outstanding
 
The Shoshana Shapiro Halpern Revocable Trust UA June 13, 2006
 
$
2,500,000
 
Gregory J. Vislocky (1)
 
$
2,099,205
 
Brian Rick Delamarter
 
$
500,000
 
Harold Guy Delamarter
 
$
500,000
 
Weintraub Partners
 
$
282,041
 
Alon Gibli
 
$
275,000
 
Michael Geliebter
 
$
150,000
 
Baruch Halpern IRA
 
$
100,000
 
W. John Short and Karen A Wilson
 
$
53,281
 
Zanesville Partners Fund, LLC
 
$
50,000
 
Edward L McMillan Revocable Trust
 
$
25,000
 
Total
 
$
6,534,527.00
 

(1)              $1,599,205 of the principal outstanding relates to Initial Notes and $500,000 of the Principal Outstanding relates to Subsequent Notes.
 
 
Exhibit 10.9
 
THIRD AMENDED AND RESTATED SECURITY AGREEMENT
 
This Third Amended and Restated Security Agreement (as amended, modified or otherwise supplemented from time to time, this " Security Agreement "), dated as of May 12, 2015 (" Effective Date "), is executed by RiceBran Technologies, a California corporation (" RBT "), The RiceX Company, a Delaware corporation (" RiceX "), and Rice Science, LLC, a Delaware limited liability company (" Rice Science ", and together with RiceX and RBT, the " Company "), in favor of Collateral Agent (as herein defined) on behalf of the Investors listed on Schedule I hereto (each, an " Investor ", and collectively, the " Investors ").
 
RECITALS
 
A.                    RBT and the Collateral Agent entered into a Second Amended and Restated Security Agreement (" Existing Agreement "), dated as of November 13, 2013, in favor of the Investors.
 
B.                    RBT and the Investors are parties to (i) a Second Amended and Restated Note and Warrant Purchase Agreement, dated as of November 13, 2013 (as amended, the " Purchase Agreement "), pursuant to which the Company issued promissory notes in favor of the Investors, and (ii) an Amendment to Loan Documents (" Loan Document Amendment "), of even date herewith, pursuant to which the terms of certain of these promissory notes were amended and restated  (each a " Note " and collectively, the " Notes ").
 
C.                    The Notes that were issued before November 13, 2013, including such Notes that were amended and restated pursuant to the Loan Document Amendment, are referred to herein as the " Initial Notes ", and all Notes that are not Initial Notes are referred to herein as the " Subsequent Notes ").
 
D.                    This Security Agreement amends and restates the Existing Agreement in its entirety and accordingly represents a Transaction Document (as defined in the Notes).
 
E.                    The Investors executing this Security Agreement constitute a Majority in Interest of the Investors, and such Investors, together with the Company, may amend the Existing Agreement as provided in this Security Agreement.
 
AGREEMENT
 
NOW, THEREFORE, in consideration of the above recitals and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, Company hereby agrees with Collateral Agent and the Investors as follows:
 
1.          Definitions and Interpretation .  When used in this Security Agreement, the following terms have the following respective meanings:
 
" Collateral " means all right, title and interest of the Company in and to the following assets :
 
(a)              all accounts, deposit accounts, accounts receivable, contract rights, chattel paper, instruments, documents, general intangibles, including, without limitation, all forms of payment, all present and future incomes, rents, revenues, issues and profits, goodwill, licenses and license rights, bailment or leasehold interests, whether as lessor or lessee, all choses in action and recoveries for any loss in value of the real estate of Company or items of property described herein, rights in and to security agreements and other contracts or assignments providing security to Company, book debts, credits, indemnities, warranties or guarantees payable to Company upon loss or damage of property, all patents, patent rights (and applications and registrations therefor), trademarks and service marks (and applications and registrations therefor), inventions, copyrights, mask works (and applications and registrations therefor), trade names, trade styles, software and computer programs, trade secrets, methods, processes, know how, drawings, specifications, descriptions, and all memoranda, notes, and records with respect to any research and development, goodwill, license agreements, franchise agreements, blueprints, drawings, purchase orders, customer lists, route lists, infringements, claims, computer programs, computer disks, computer tapes, literature, reports, catalogs, design rights, income tax refunds, business and accounting records, including all ledger account cards, in all cases whether now owned or hereafter created or acquired by Company or in which Company may now have or may hereafter acquire an interest and whether in tangible or intangible form or contained on magnetic media readable by machine together with all such magnetic media;
 
(b)              all inventory, goods held for sale or lease or to be furnished under contracts for service, or goods so leased or furnished, raw materials, component parts, work in process and other materials used or consumed in Company's business, now or at any time hereafter owned or acquired by Company, wherever located, and all products thereof, whether in the possession of Company, any warehousemen, any bailee or any other person and whether located at Company's places of business or elsewhere;
 
(c)              all money and property heretofore, now or hereafter delivered to or deposited with Collateral Agent or otherwise coming into the possession, custody or control of Collateral Agent in any manner or for any purpose whatsoever during the existence of this Security Agreement and whether held in a general or special account or deposit for safekeeping or otherwise;
 
(d)              all right, title and interest of Company under licenses, guaranties, warranties, management agreements, marketing or sales agreements, escrow contracts, indemnity agreements, insurance policies, service agreements, maintenance agreements and other similar contracts of every kind in which Company now has or at any time hereafter shall have an interest;
 
(e)              all of Company's goods, tools, machinery, furnishings, furniture and other equipment and fixtures of every kind now existing or hereafter acquired, and improvements, replacements, accessions and additions thereto, whether located on any property owned or leased by Company or elsewhere, including without limitation, any of the foregoing now or at any time hereafter located at or installed on the land or in the improvements at any of the real property owned or leased by Company, and all such goods after they have been severed and removed from any of said real property; and
 
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(f)               all of Company's investment property, including, without limitation, all of the Company's equity interests in its subsidiaries (except to the extent limited below with respect to the equity interests of the Company in RBT PRO, LLC, a Delaware limited liability company (" RBT Pro ") and NutraSA);
 
together with whatever is receivable or received when any of the foregoing or the 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 cause of action affecting or relating to any of the foregoing.
 
Notwithstanding anything to the contrary set forth above, the Collateral does not include (i) one-half of RBT's interest in NutraSA, regardless of the size of the interest in NutraSA held by RBT now or in the future (" Excluded NutraSA Interest "), or (ii) RBT's entire interest in RBT Pro.  The parties understand and agree that the Excluded NutraSA Interest is the same interest in NutraSA that was not pledged to the FCC Lenders and their agent pursuant to the FCC Credit Facility and that the portion of RBT's interest in NutraSA that constitutes Collateral hereunder is the same portion of RBT's interest in NutraSA that constitutes collateral pursuant to the FCC Credit Facility.
 
" FCC Credit Facility " shall mean, collectively, any credit facility that may be established involving the loaning of funds to the Company by Full Circle Capital Corporation and other lenders, but only to the extent that the total principal outstanding under such credit facility does not exceed $10,000,000.
 
" FCC Lenders " shall mean the lenders under the FCC Credit Facility.
 
" Irgovel " shall mean Industria Riograndese de Oleos Vegetais Ltda, a limited liability company organized under the laws of the Federative Republic of Brazil.
 
" Lake Charles Assets " means the buildings, improvements, equipment, machinery, tools and assets used or located at RBT's facility in Lake Charles, Louisiana.
 
" NutraSA " means Nutra SA, LLC, a Delaware limited liability company.
 
" NutraSA Liquidity Transaction " shall mean any of the following transactions that results in cash being paid to RBT in respect and as a result thereof:  (i) the sale of all or substantially all the assets of Irgovel or NutraSA to a third party unaffiliated with RBT, (ii) the sale of all the membership interests of NutraSA or all of the equity of Irgovel to a third party unaffiliated with RBT or (iii) a merger or consolidation transaction involving Irgovel or NutraSA that results in RBT no longer holding an equity interest in the surviving entity or a parent entity of the surviving entity.
 
" NutraSA Proceeds " shall mean the net cash proceeds received by RBT from a NutraSA Liquidity Transaction, less any applicable taxes that are paid or payable by RBT in connection with such NutraSA Liquidity Transaction.
 
" Obligations " shall mean the Company's obligations to pay principal, accrued interest and expenses to the Collateral Agent and the Investors under the Notes and the Security Agreement, and all other obligations of the Company under the Transaction Documents, including, without limitation, the obligations of RBT set forth in Section 10 of this Security Agreement.
 
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" Permitted Liens " means (a) Liens for taxes not yet delinquent or Liens for taxes being contested in good faith and by appropriate proceedings for which adequate reserves have been established; (b) Liens in respect of property or assets imposed by law which were incurred in the ordinary course of business, such as carriers', warehousemen's, materialmen's and mechanics' Liens and other similar Liens arising in the ordinary course of business which are not delinquent or remain payable without penalty or which are being contested in good faith and by appropriate proceedings; (c) Liens incurred or deposits made in the ordinary course of business in connection with workers' compensation, unemployment insurance and other types of social security, and mechanic's Liens, carrier's Liens and other Liens to secure the performance of tenders, statutory obligations, contract bids, government contracts, performance and return of money bonds and other similar obligations, incurred in the ordinary course of business, whether pursuant to statutory requirements, common law or consensual arrangements; (d) Liens in favor of the Collateral Agent; (e) Liens upon any equipment acquired by Company or any of its Subsidiaries after January 17, 2012 to secure the purchase price of such equipment or indebtedness incurred solely for the purpose of financing the acquisition of such equipment, so long as such Lien extends only to the equipment financed, and any accessions, replacements, substitutions and proceeds (including insurance proceeds) thereof or thereto; (f) Liens in favor of customs and revenue authorities arising as a matter of law to secure payments of customs duties in connection with the importation of goods (g) Liens which constitute rights of setoff of a customary nature or banker's liens, whether arising by law or by contract; (h) Liens on insurance   proceeds in favor of insurance companies granted solely as security for financed premiums; (i) leases or subleases and licenses or sublicenses granted in the ordinary course of Company's business; and (j) Liens in favor of the Senior Lenders under the Senior Debt Facility.
 
" Releasable Assets " shall mean the real property used by RBT in Dillon, Montana, Mermentau, Louisiana, and Lake Charles, Louisiana, the improvements thereon and the equipment, machinery, tools and assets used and located at such properties.
 
" Replacement Credit Facility " shall mean any credit facility entered into by the Company that is used to replace the FCC Credit Facility, but only to the extent that the total principal outstanding under such credit facility does not exceed $9,000,000.
 
 " Senior Debt Facility " shall mean, collectively, the FCC Credit Facility and the Replacement Credit Facility.
 
" Senior Lenders " shall mean the FCC Lenders, their successors and assigns, and the lenders under any Replacement Debt Facility and their successors and assigns.
 
" SRB Business " shall mean RBT's stabilized rice bran business, which does not include (i) RBT's business operated through Nutra SA, LLC, a Delaware limited liability company, Industria Riograndese de Oleos Vegetais Ltda, a limited liability company organized under the laws of the Federative Republic of Brazil (" Irgovel   Business "), (ii) RBT's rice bran oil business (" Non-Irgovel RBO Business ") and (iii) RBT's business operated through RiceRx, LLC and RiceScience, LLC (" NFF Business ").
 
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" Transaction Documents " means this Security Agreement, the Notes, the Warrants, and the Purchase Agreement.
 
" UCC " means the Uniform Commercial Code as in effect in the State of California from time to time.
 
All capitalized terms not otherwise defined herein shall have the respective meanings given in the Notes. Unless otherwise defined herein, all terms defined in the UCC have the respective meanings given to those terms in the UCC.
 
2.           Grant of Security Interest .  As security for the Obligations, Company hereby pledges to Collateral Agent and grants to Collateral Agent a security interest in the Collateral, whether now existing or hereafter from time to time acquired; provided however, that such pledge and security interest shall be subject to any bona fide intellectual property licenses granted by the Company in the ordinary course of business, and Collateral Agent (when exercising Collateral Agent's rights and duties hereunder) and any successor to the Company with respect to such bona fide licenses shall be bound by the terms and conditions of such licenses.  The security interests granted herein to Investors purchasing Subsequent Notes are senior to the security interests granted herein to all other Investors to the extent of the principal and accrued interest on the Subsequent Notes.  To the extent thereof, the Company shall not pay any amounts in respect of the Initial Notes until all amounts that are then due and payable on the Subsequent Notes have been paid in full.  The Investors understand and agree that one of the Collateral Agents hereunder, Gregory J. Vislocky, has agreed to purchase one or more Subsequent Notes, and the Investors hereby consent to any purchase of Subsequent Notes by Gregory J. Vislocky.
 
3.          Subordination .  The Collateral Agent and the Investors understand that the security interests granted herein are junior to the security interests of the Senior Lenders under the Senior Debt Facility.  The Investors understand and agree that RBT and a Majority in Interest of the Investors may amend the terms of this Security Agreement in the future, and that such amendments could provide that loans incurred by the Company in the future (" Future Loans ") and the security interests in the Collateral and the Mortgages (as defined in the Purchase Agreement) that may be granted under such future loans (collectively, " Future Security Interests ") be senior to the obligations under the Notes and the security interests granted hereunder and under the Mortgages.  If RBT and a Majority in Interest of the Investors agree to so amend this Security Agreement to effect such Future Loan transactions, each Investor agrees to enter into such agreements as are reasonably requested by RBT and a Majority in Interest to subordinate the Obligations and the security interests granted hereunder and under the Mortgages to the obligations and Future Security Interests arising under the Future Loans.  To reflect that the repayment obligations and the security interests of the lenders under the FCC Credit Facility are senior to the payment obligations of the Company under the Notes, this Agreement and the Mortgages and the security interests granted to the Investors pursuant to this Agreement and the Mortgages, each of the Investors (i) agrees to be and shall be bound by the Terms of Subordination attached hereto as Exhibit A , which Terms of Subordination are incorporated by reference into this Agreement, (ii) will execute such real property documents as are needed to subordinate the real property interests of the Investors in Company real property to the real property interests of the Senior Lender in Company real property and (iii) authorizes the Company to make such other filings as are needed to reflect such subordination, including without limitation such UCC filings and United States Patent and Trademark Office filings that the Senior Lender or the Company determine are advisable.  In addition, the Investors agree to subordinate their rights to repayment and their security interests and mortgages on RBT property to the rights of lenders under any Replacement Debt Facility on terms substantially similar to those contained on Exhibit A and this Section 3.
 
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4.          Release of Releasable Assets .  If a Majority in Interest of the Investors provide their prior written consent to the sale, which consent may not be withheld unreasonably, the Collateral Agent shall take all actions reasonably required to release and terminate the Collateral Agent's Lien and Mortgage (as defined in the Purchase Agreement) on any Releasable Assets that have been sold by RBT or the SRB Holding Company (as defined below) or for which RBT or the SRB Holding Company has entered into an agreement to sell such assets.  Such release and termination shall be effective immediately upon such sale.  So long as no Event of Default is then continuing, if RBT establishes an operating facility outside of the United States using the Lake Charles Assets, enters into a joint venture using the Lake Charles Assets, sells all or any portion of the Lake Charles Assets or enters into an agreement to do the same, Collateral Agent's Lien on such Lake Charles Assets shall immediately and automatically terminate.  RBT may take all necessary actions to reflect the foregoing, including without limitation the filing of any termination statements and the recording of any modification to a Mortgage.  The Collateral Agent and the Investors shall cooperate with RBT and execute any documents reasonably requested by RBT to effect the foregoing.  If any of the Releasable Assets are sold by RBT or the SRB Holding Company, the Collateral Agent may require RBT to, subject to the Senior Debt Facility, prepay any portion of the Notes from the net proceeds actually received by RBT or the SRB Holding Company in such transaction, but only after application of the portion of such proceeds required to satisfy tax obligations or obligations under mechanics' liens.
 
5.          General Representations and Warranties .  Company represents and warrants to Collateral Agent and the Investors that (a) Company is the owner of the Collateral (or, in the case of after-acquired Collateral, at the time Company acquires rights in the Collateral, will be the owner thereof) and that no other Person has (or, in the case of after-acquired Collateral, at the time Company acquires rights therein, will have) any right, title, claim or interest (by way of Lien or otherwise) in, against or to the Collateral, other than Permitted Liens; and (b) upon the filing of UCC-1 financing statements (" Financing Statement ") with the Secretaries of State of the State of California and the State of Delaware, Collateral Agent has (or in the case of after-acquired Collateral, at the time Company acquires rights therein, will have) a first priority perfected security interest in the Collateral to the extent that a security interest in the Collateral can be perfected by such filing, except for Permitted Liens and any Liens in favor of the Senior Lenders.  The filing of the Financing Statement's as described above shall perfect Collateral Agent's Lien on the Company's issued patents and the Company's registered trademarks.  Company hereby advises Collateral Agent that a bona fide purchaser for value who has recorded an assignment with the United States Patent and Trademark Office (" USPTO ") may defeat the earlier security interest of a secured party in an issued patent or a registered trademark that only files a UCC-1 in the appropriate offices and that does not record such Lien with the USPTO.  Company hereby advises Collateral agent that a security interest in money and a security interest in a deposit account may only be perfected by control, and not by the filing of a Financing Statement.  The filing of the Financing Statements as provided above will perfect Collateral Agent's security interests in the stock and membership interests of RBT's subsidiaries organized in any State in the United States.
 
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6.          Covenants Relating to Collateral .  Company hereby agrees (a) to perform all acts that may be necessary to maintain, preserve, protect and perfect the Collateral, the Lien granted to Collateral Agent therein and the perfection and first priority of such Lien, except for Permitted Liens; (b) not to use or permit any Collateral to be used (i) in violation in any material respect of any applicable law, rule or regulation, or (ii) in violation of any policy of insurance covering the Collateral; (c) to pay promptly when due all taxes and other governmental charges, all Liens and all other charges now or hereafter imposed upon or affecting any Collateral; (d) without 30 days' written notice to Collateral Agent, (i) not to change Company's name or place of business (or, if Company has more than one place of business, its chief executive office), or the office in which Company's records relating to accounts receivable and payment intangibles are kept, and (ii) not to change Company's state of incorporation, and (e) to procure, execute and deliver from time to time any endorsements, assignments, financing statements and other writings reasonably deemed necessary or appropriate by Collateral Agent to perfect, maintain and protect its Lien hereunder and the priority thereof.
 
7.          Authorized Action by Collateral Agent .  Company hereby irrevocably appoints Collateral Agent as its attorney-in-fact (which appointment is coupled with an interest) and agrees that Collateral Agent may, except as otherwise provided herein, perform (but Collateral Agent shall not be obligated to and shall incur no liability to Company or any third party for failure so to do) any act which Company is obligated by this Security Agreement to perform, and to exercise such rights and powers as Company might exercise with respect to the Collateral, including the right to (a) collect by legal proceedings or otherwise and endorse, receive and receipt for all dividends, interest, payments, proceeds and other sums and property now or hereafter payable on or on account of the Collateral; (b) make any compromise or settlement, and take any action it deems advisable, with respect to the Collateral; (c) insure, process and preserve the Collateral; (d) pay any indebtedness of Company relating to the Collateral; and (e) execute UCC financing statements and other documents, instruments and agreements required hereunder; provided, however , that Collateral Agent shall not exercise any such powers granted pursuant to subsections (a) through (d) prior to the occurrence of an Event of Default and shall only exercise such powers during the continuance of an Event of Default.  Company agrees to reimburse Collateral Agent upon demand for any reasonable costs and expenses, including attorneys' fees, Collateral Agent may incur while acting as Company's attorney-in-fact hereunder, all of which costs and expenses are included in the Obligations.  It is further agreed and understood between the parties hereto that such care as Collateral Agent gives to the safekeeping of its own property of like kind shall constitute reasonable care of the Collateral when in Collateral Agent's possession; provided, however , that Collateral Agent shall not be required to make any presentment, demand or protest, or give any notice and need not take any action to preserve any rights against any prior party or any other person in connection with the Obligations or with respect to the Collateral.
 
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8.          Default and Remedies .
 
(a) Default .  Company shall be deemed in default under this Security Agreement upon the occurrence and during the continuance of an Event of Default (as defined in the Notes).
 
(b) Remedies .  Upon the occurrence and during the continuance of any such Event of Default, Collateral Agent shall, except as otherwise provided herein, have the rights of a secured creditor under the UCC, all rights granted by this Security Agreement and by law.  Company hereby agrees that ten (10) days' notice of any intended sale or disposition of any Collateral is reasonable.
 
(c) Application of Collateral Proceeds .  The proceeds and/or avails of the Collateral or the Real Property (as defined below), or any part thereof, and the proceeds and the avails of any remedy hereunder and under the Mortgages (as well as any other amounts of any kind held by Collateral Agent at the time of, or received by Collateral Agent after, the occurrence of an Event of Default) shall be paid to and applied as follows:
 
(i)           First , to the payment to each Senior Lender of the amount owed or owing to such Senior Lender under the Senior Loan Facility;
 
(ii)         Second , to the payment of reasonable costs and expenses, including all amounts expended to preserve the value of the Collateral and the Real Property, of foreclosure or suit, if any, and of such sale and the exercise of any other rights or remedies, and of all proper fees, expenses, liability and advances, including reasonable legal expenses and attorneys' fees, incurred or made hereunder by Collateral Agent;
 
(iii)          Third ,   to the payment to each Subsequent Investor of the amount then owing or unpaid on such Investor's Subsequent Note;
 
(iv)           Fourth , to the payment to each Investor of the amount then owing or unpaid on such Investor's Initial Note(s), and in case such proceeds shall be insufficient to pay in full the whole amount so due, owing or unpaid upon such Initial Note(s), then its Pro Rata Share of the amount remaining to be distributed (to be applied first to accrued interest and second to outstanding principal);
 
(v)          Fifth , to the payment of other amounts then payable to each Investor under any of the Transaction Documents, and in case such proceeds shall be insufficient to pay in full the whole amount so due, owing or unpaid under such Transaction Documents, then its Pro Rata Share of the amount remaining to be distributed; and
 
(vi)         Sixth , to the payment of the surplus, if any, to RBT, its successors and assigns, or to whomsoever may be lawfully entitled to receive the same.
 
For purposes of this Security Agreement, the term " Pro Rata Share " shall mean, when calculating an Investor's portion of any distribution or amount, that distribution or amount (expressed as a percentage) equal to a fraction (i) the numerator of which is the original outstanding principal amount of such Investor's Initial Note(s) and (ii) the denominator of which is the original aggregate outstanding principal amount of all Initial Notes issued under the Purchase Agreement.  In the event that an Investor receives payments or distributions in excess of its Pro Rata Share, then such Investor shall hold in trust all such excess payments or distributions for the benefit of the other Investors and shall pay such amounts held in trust to such other Investors upon demand by such Investors.
 
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9.          Collateral Agent .
 
(a) Appointment and Removal .  The Investors hereby appoint Baruch Halpern and Greg Vislocky as collateral agents for the Investors under this Security Agreement (in such capacities, and any successors thereto, collectively, the " Collateral Agent ") and as agents for the Investors with respect to the Mortgages, to serve from January 17, 2012 until the termination of the Security Agreement and the Mortgages or until one or both of such individuals serving as the Collateral Agent resigns or is removed as provided in this Section 9(a).  A Majority in Interest of Investors may remove a new Collateral Agent or replace a Collateral Agent.  If for any reason there is less than two individuals serving as Collateral Agent, a Majority in Interest of the Investors shall promptly appoint a new individual to serve as Collateral Agent.  The Collateral Agent may only act if the action is an affirmative action of all individuals serving collectively as the Collateral Agent; provided, however, that if both individuals serving as the Collateral Agent are unable to agree upon an action to be taken by the Collateral Agent, either individual may deliver to the other individual a written notice of such disagreement, stating in reasonably detail the substance of the disagreement(s) (the " Disputed Items " and such notice, the " Notice of Dispute "). Upon delivery of the Notice of Dispute, the two individuals shall discuss such Disputed Items in good faith.  If the individuals cannot resolve such Disputed Items on or prior to 10 Business Days after delivery of the Notice of Dispute (an " Unresolved Dispute Item "), then the individuals shall use commercially reasonable efforts to cause a mutually agreeable third party workout specialist (the " Referee ") to determine, within 20 Business Days following such date of hire, the Unresolved Dispute Items. If the individuals can't agree on a Referee on or prior to 20 Business Days after delivery of the Notice of Dispute, the individual that did not deliver the Notice of Dispute will prepare a list of three third party workout specialists, the other individual will eliminate two of the names, and the remaining name on the list will be the Referee. The individuals each shall provide the Referee with all necessary documents.  The Referee shall determine only those Unresolved Dispute Items.  After the 20 Business Days period following hire, the Referee shall render its opinion as to the Unresolved Dispute Items and shall submit to both individuals a written determination of such Unresolved Dispute Items.  The determination of the Referee shall, with respect to such Unresolved Dispute Items, be final, conclusive, binding and non-appealable.  Either individual serving as Collateral Agent may take action in accordance with the determination of the Referee without the approval of the other individual serving as Collateral Agent .
 
(b) Powers and Duties of Collateral Agent, Indemnity by Investors .
 
(i)      Each Investor hereby irrevocably authorizes the Collateral Agent to take such action and to exercise such powers hereunder as provided herein or as requested in writing by the Investors of a Majority in Interest in accordance with the terms hereof, together with such powers as are reasonably incidental thereto.  Collateral Agent may execute any of its duties hereunder and under the Mortgages by or through agents or employees and shall be entitled to request and act in reliance upon the advice of counsel concerning all matters pertaining to its duties hereunder and thereunder and shall not be liable for any action taken or omitted to be taken by it in good faith in accordance therewith.
 
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(ii)      Neither the Collateral Agent nor any of its directors, officers or employees shall be liable or responsible to any Investor or to Company for any action taken or omitted to be taken by Collateral Agent or any other such person hereunder, under the Mortgages or under any related agreement, instrument or document, except in the case of gross negligence or willful misconduct on the part of the Collateral Agent, nor shall the Collateral Agent or any of its directors, officers or employees be liable or responsible for (i) the validity, effectiveness, sufficiency, enforceability or enforcement of the Notes, this Security Agreement, the Mortgages or any instrument or document delivered hereunder or relating hereto; (ii) the title of Company to any of the Collateral or the real property and fixtures securing the Obligations under the Mortgages (collectively, the " Real Property ") or the freedom of any of the Collateral or Real Property from any prior or other liens or security interests; (iii) the determination, verification or enforcement of Company's compliance with any of the terms and conditions of this Security Agreement or the Mortgages; (iv) the failure by Company to deliver any instrument or document required to be delivered pursuant to the terms hereof or the Mortgages; or (v) the receipt, disbursement, waiver, extension or other handling of payments or proceeds made or received with respect to the Collateral or the Real Property, the servicing of the Collateral or the Real Property or the enforcement or the collection of any amounts owing with respect to the Collateral or the Real Property.
 
(iii)                    In the case of this Security Agreement and the transactions contemplated hereby and the Mortgages and any related document relating to any of the Collateral or the Real Property, each of the Investors agrees to pay to the Collateral Agent, on demand, its Pro Rata Share of all reasonable fees and all reasonable expenses incurred in connection with the operation and enforcement of this Security Agreement, the Mortgages, the Notes or any related agreement to the extent that such fees or expenses have not been paid by Company.  In the case of this Security Agreement and each instrument and document relating to any of the Collateral or the Real Property, each of the Investors and the Company hereby agrees to hold the Collateral Agent harmless, and to indemnify the Collateral Agent from and against any and all loss, damage, expense or liability which may be incurred by the Collateral Agent under this Security Agreement, the Mortgages and the transactions contemplated hereby and any related agreement or other instrument or document, as the case may be, unless such liability shall be caused by the willful misconduct or gross negligence of the Collateral Agent.
 
10.       NutraSA .
 
(a)      Negative Pledge .  So long as any Obligations are outstanding, RBT shall not sell, transfer, assign, pledge, or grant a security interest in any of the membership interests held by RBT in NutraSA other than to the Senior Lenders.
 
(b)      Prepayment .  If a NutraSA Liquidity Transaction is completed, the Collateral Agent may require RBT to prepay any portion of the Notes from the NutraSA Proceeds, subject to the terms of any subordination agreement with the Senior Lenders.
 
11.       Miscellaneous .
 
(a)      Notices .  Except as otherwise provided herein, all notices, requests, demands, consents, instructions or other communications to or upon Company or Collateral Agent under this Security Agreement shall be in writing and faxed, mailed or delivered to each party to the facsimile number or its address set forth below (or to such other facsimile number or address as the recipient of any notice shall have notified the other in writing).  All such notices and communications shall be effective (a) when sent by Federal Express or other overnight service of recognized standing, on the business day following the deposit with such service; (b) when mailed, by registered or certified mail, first class postage prepaid and addressed as aforesaid through the United States Postal Service, upon receipt; (c) when delivered by hand, upon delivery; and (d) when faxed, upon confirmation of receipt.
 
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Collateral Agent :
Gregory J. Vislocky
7700 NE Parkway Dr. Suite 300
Vancouver, WA 98662
Telephone: (360) 735-7155, Ext. 257
Email: gvislocky@prestigecare.com

And:
Baruch Halpern
20900 NE 30 th Ave., Suite 200
Aventura, FL 33180
Telephone:   (786) 528-1400
Email: bhalpern@halperncapital.com

Any Company :
Ricebran Technologies
6720 N. Scottsdale Road, Suite 390
Scottsdale, AZ 85253
Attention: W. John Short, CEO
Telephone: (602) 522-3000
Facsimile: (602) 522-3001
 
with a copy to :
Weintraub Tobin Chediak Coleman Grodin Law Corporation
400 Capitol Mall, 11th Floor
Sacramento, CA 95814
Attention: Chris Chediak, Esq.
Telephone: (916) 558-6016
Facsimile: (916) 446-1611
Email: cchediak@weintraub.com
 
(b)      Nonwaiver .  No failure or delay on Collateral Agent's part in exercising any right hereunder shall operate as a waiver thereof or of any other right nor shall any single or partial exercise of any such right preclude any other further exercise thereof or of any other right.
 
(c)      Amendments and Waivers .  Except as expressly provided herein, this Security Agreement may not be amended or modified, nor may any of its terms be waived, except by written instruments signed by RBT and a Majority in Interest of the Investors; provided , however , that Investors purchasing Notes in a Closing after the Initial Closing (as defined in the Purchase Agreement) may become Investors under this Security Agreement, by executing a counterpart of this Security Agreement without any amendment of this Security Agreement pursuant to this paragraph or any consent or approval of a Majority in Interest of the Investors. Each waiver or consent under any provision hereof shall be effective only in the specific instances for the purpose for which given.
 
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(d)      Assignments . This Security Agreement shall be binding upon and inure to the benefit of Collateral Agent and Company and their respective successors and assigns; provided, however , that Company may not sell, assign or delegate rights and obligations hereunder without the prior written consent of Collateral Agent.
 
(e)       Cumulative Rights, etc .  The rights, powers and remedies of Collateral Agent under this Security Agreement shall be in addition to all rights, powers and remedies given to Collateral Agent by virtue of any applicable law, rule or regulation of any governmental authority, any Transaction Document or any other agreement, all of which rights, powers, and remedies shall be cumulative and may be exercised successively or concurrently without impairing Collateral Agent's rights hereunder.  Company waives any right to require Collateral Agent to proceed against any person or entity or to exhaust any Collateral or to pursue any remedy in Collateral Agent's power.
 
(f)       Payments Free of Taxes, Etc .  All payments made by Company under the Transaction Documents shall be made by Company free and clear of and without deduction for any and all present and future taxes, levies, charges, deductions and withholdings.  In addition, Company shall pay upon demand any stamp or other taxes, levies or charges of any jurisdiction with respect to the execution, delivery, registration, performance and enforcement of this Security Agreement.  Upon request by Collateral Agent, Company shall furnish evidence satisfactory to Collateral Agent that all requisite authorizations and approvals by, and notices to and filings with, governmental authorities and regulatory bodies have been obtained and made and that all requisite taxes, levies and charges have been paid.
 
(g)      Partial Invalidity .  If at any time any provision of this Security Agreement is or becomes illegal, invalid or unenforceable in any respect under the law of any jurisdiction, neither the legality, validity or enforceability of the remaining provisions of this Security Agreement nor the legality, validity or enforceability of such provision under the law of any other jurisdiction shall in any way be affected or impaired thereby.
 
(h)      Construction .  Each of this Security Agreement and the other Transaction Documents is the result of negotiations among, and has been reviewed by, Company, Investors, Collateral Agent and their respective counsel.  Accordingly, this Security Agreement and the other Transaction Documents shall be deemed to be the product of all parties hereto, and no ambiguity shall be construed in favor of or against Company, Investors or Collateral Agent.
 
(i)       Entire Agreement .  This Security Agreement taken together with the other Transaction Documents constitute and contain the entire agreement of Company, Investors and Collateral Agent and supersede any and all prior agreements, negotiations, correspondence, understandings and communications among the parties, whether written or oral, respecting the subject matter hereof.  This Security Agreement amended and restates the Existing Agreement in its entirety as of the Effective Date.
 
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(j)        Other Interpretive Provisions .   References in this Security Agreement and each of the other Transaction Documents to any document, instrument or agreement (a) includes all exhibits, schedules and other attachments thereto, (b) includes all documents, instruments or agreements issued or executed in replacement thereof, and (c) means such document, instrument or agreement, or replacement or predecessor thereto, as amended, modified and supplemented from time to time and in effect at any given time.  The words "hereof," "herein" and "hereunder" and words of similar import when used in this Security Agreement or any other Transaction Document refer to this Security Agreement or such other Transaction Document, as the case may be, as a whole and not to any particular provision of this Security Agreement or such other Transaction Document, as the case may be.  The words "include" and "including" and words of similar import when used in this Security Agreement or any other Transaction Document shall not be construed to be limiting or exclusive.
 
(k)       Governing Law .  This Security Agreement shall be governed by and construed in accordance with the laws of the State of California without reference to conflicts of law rules (except to the extent governed by the UCC).
 
(l)        Counterparts . This Security Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which together shall be deemed to constitute one instrument.
 
[The remainder of this page is intentionally left blank]
 
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The parties below have caused this Third Amended and Restated Security Agreement to be executed as of the day and year first above written.

RICEBRAN TECHNOLOGIES
 
THE RICEX COMPANY
   
a Delaware corporation
       
By:
/s/ J. Dale Belt
 
By:
/s/ W. John Short
J. Dale Belt, Chief Financial Officer
   
W. John Short, President
       
RICE SCIENCE, LLC
     
a Delaware limited liability company
     
             
 
By:
RiceBran Technologies, its member
     
             
   
By:
/s/ J. Dale Belt
     
     
J. Dale Belt, Chief Financial Officer
     

[Signature Page to Third Amended and Restated Security Agreement]
 

Signature Page for Collateral Agents and Investors

Collateral Agents
Investors
   
/s/ Baruch Halpern
/s/ Gregory J. Vislocky
Baruch Halpern
Gregory J. Vislocky
   
/s/ Gregory J. Vislocky
The Shoshana Shapiro Halpern
Gregory J. Vislocky
Revocable Trust UA June 13, 2006
   
 
By:
/s/ Baruch Halpern
   
  Baruch Halpern, Trustee
   
 
By:
/s/ Shoshana Halpern
   
  Shoshana Halpern, Trustee
   
 
Pensco Trust Co., FBO Baruch Halpern IRA
 
 
/s/ Baruch Halpern
 
Baruch Halpern

[Signature Page to Third Amended and Restated Security Agreement]


Continued Signature Page for Investors

 
/s/ Brian Rick Delamarter
 
(Brian Rick Delamarter)

[Signature Page to Third Amended and Restated Security Agreement]
 

Continued Signature Page for Investors

 
/s/ Harold Guy Delamarter
 
(Harold Guy Delamarter)

[Signature Page to Third Amended and Restated Security Agreement]
 

Continued Signature Page for Investors
 
 
Walter John Short and Karen A. Wilson
   
 
/s/ W. John Short
 
(W. John Short)
   
 
/s/ Karen A. Wilson
 
(Karen A. Wilson)

[Signature Page to Third Amended and Restated Security Agreement]

 
Continued Signature Page for Investors
 
  Weintraub Partners
 
 
By: 
/s/ Chris Chediak
 
Name: Chris Chediak
 
Title: Partner

[Signature Page to Third Amended and Restated Security Agreement]
 

Continued Signature Page for Investors
 
 
Zanesville Partners Fund, LLC
     
 
By: 
                          
 
Name: James C. Lintzenich
 
Title: Member

[Signature Page to Third Amended and Restated Security Agreement]
 

Continued Signature Page for Investors

 
The Revocable Trust of Edward L. McMillan Revocable Trust U/D/T dated February 17, 1999
     
 
By:
                           
 
Name: 
Edward L. McMillan
 
Its:
Trustee

[Signature Page to Third Amended and Restated Security Agreement]
 

Continued Signature Page for Investors
 
                    
 
(Alon Gibli)

[Signature Page to Third Amended and Restated Security Agreement]
 

Continued Signature Page for Investors

                            
 
(Michael Geliebter)

[Signature Page to Third Amended and Restated Security Agreement]
 
Schedule I
 
Investors

Gregory J. Vislocky
 
Brian Rick Delamarter
 
Harold Guy Delamarter
 
The Shoshana Shapiro Halpern Revocable Trust UA June 13, 2006
 
Weintraub Partners
 
W. John Short and Karen A Wilson
 
Edward McMillan
 
Zanesville Partners Fund, LLC
 
Alon Gibli
 
Michael Geliebter
 
Baruch Halpern IRA
 
 
Exhibit 99.1
 

RiceBran Technologies Closes on $8 million Three Year Debt Facility from Full Circle Capital

Company to use proceeds to fuel revenue growth of its proprietary rice bran-based Nutritional and Functional Food and Nutri-Cosmetics products

Scottsdale, Arizona – May 14, 2015 – RiceBran Technologies (NASDAQ: RIBT and RIBTW) (the “Company” or “RBT”), a global leader in the production and marketing of value added products derived from rice bran, announced today that it has closed on an $8 million three year debt facility with Full Circle Capital (“Full Circle Capital”) to provide working capital and term loans to facilitate future growth. The financing will take the form of a $3.5 million senior secured revolving working capital facility (“Revolver”), a $2.5 million term loan (“Term Loan A”) and up to $2 million of additional term loans (“Term Loan B”).  A full description of the financing can be found in the Company's SEC filings.

Dale Belt, Chief Financial Officer, commented: "We are pleased to have closed on this important funding from Full Circle Capital.  This financing represents an important inflection point for our company that we believe will help us capitalize on the significant investments we have already made in plant capacity upgrades and product development.  We intend to put these funds to work in both our USA and Brazil segments to help drive significant top and bottom line growth at RBT in the quarters and years to come."

The Company intends to use the proceeds from this financing as working capital and for capital expenditures to support revenue growth of its proprietary rice bran-based ingredients and turnkey product solutions from its USA Segment as well as its rice bran oil and derivatives production in Brazil.

Gregg J Felton, President & CEO of Full Circle Capital, commented, "Full Circle Capital is pleased to have closed this important financing with RiceBran Technologies.  RBT has established a position as a unique provider of healthy whole food nutrition products and we look forward helping the Company grow throughout 2015 and in the years to come."

About RiceBran Technologies

RiceBran Technologies is a human food ingredient and animal nutrition company focused on the procurement, bio-refining and marketing of numerous products derived from rice bran. RiceBran Technologies has proprietary and patented intellectual property that allows us to convert rice bran, one of the world's most underutilized food sources, into a number of highly nutritious human food ingredient and animal nutrition products.  Our target markets are human food ingredients and animal nutrition manufacturers and retailers, as well as natural food, functional food and nutritional supplement manufacturers and retailers, both domestically and internationally. More information can be found in the Company's filings with the SEC and by visiting our website at http://www.ricebrantech.com .
 
About Full Circle Capital Corporation

Full Circle Capital Corporation ( www.fccapital.com ) is a closed-end investment company that has elected to be treated as a business development company under the Investment Company Act of 1940. Full Circle lends to and invests in senior secured loans and, to a lesser extent, mezzanine loans and equity securities issued by lower middle-market companies that operate in a diverse range of industries. Full Circle's investment objective is to generate both current income and capital appreciation through debt and equity investments. For additional information visit the company's website www.fccapital.com .

Forward-Looking Statements

This release contains forward-looking statements, including, but not limited to, statements about RiceBran Technologies' expectations regarding the this financing agreement with Full Circle Capital. These statements are made based upon current expectations that are subject to known and unknown risks and uncertainties.  RiceBran Technologies does not undertake to update forward-looking statements in this news release to reflect actual results, changes in assumptions or changes in other factors affecting such forward-looking information.  Assumptions and other information that could cause results to differ from those set forth in the forward-looking information can be found in this press release and in RiceBran Technologies' filings with the Securities and Exchange Commission, including its most recent periodic reports.

Investor Contact:
Ascendant Partners, LLC
Fred Sommer
(732) 410-9810
fred@ascendantpartnersllc.com