Credit Agreement [Amendment No. 3] (2015)Full Document 

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THIRD AMENDMENT TO CREDIT AGREEMENT

THIS THIRD AMENDMENT TO CREDIT AGREEMENT (this "Amendment") is entered into as of February 27, 2015, by and between S&W SEED COMPANY ("Borrower"), and WELLS FARGO BANK, NATIONAL ASSOCIATION ("Bank").

RECITALS

A. Borrower is currently indebted to Bank pursuant to the terms and conditions of that certain Credit Agreement between Borrower and Bank dated as of February 1, 2014 as amended from time to time ("Credit Agreement").

B. Pursuant to the Credit Agreement, Borrower remains indebted to Bank under a line of credit in the maximum principal amount of Four Million Dollars ($4,000,000.00) (the "Line of Credit"), which is evidenced by that certain Revolving Line of Credit Note dated February 1, 2014, as modified from time to time (the "Prior Line of Credit Note"). The Prior Line of Credit Note matures and becomes due and payable in full on April 1, 2015 and as of the date hereof, the outstanding principal balance under the Prior Line of Credit is $0, plus accrued but unpaid interest.

C. Bank and Borrower have agreed to certain changes in the terms and conditions set forth in the Credit Agreement and have agreed to amend the Credit Agreement to reflect said changes.

NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which are hereby acknowledged, subject to the terms and conditions described herein, the parties hereto agree that the Credit Agreement shall be amended as follows; provided, however, that nothing shall terminate any security interests, guaranties, subordinations or other documents in favor of Bank, all of which shall remain in full force and effect unless expressly amended hereby:

1. Amendment to Section 1.1. Section 1.1 is hereby amended by deleting "April 1, 2015" as the last day on which Bank will make advances under the Line of Credit, and by substituting for said date "July 1, 2015," with such change to be effective upon the execution and delivery to Bank of a promissory note substantially in the form of Exhibit A attached hereto (the "Line of Credit Note") (which Note shall replace and be deemed the Line of Credit Note defined in and made pursuant to the Credit Agreement) and all other contracts, instruments and documents required by Bank to evidence such change; provided, however, that advances made under the Prior Line of Credit Note shall be deemed made under the Line of Credit Note.

2. Amendment to Section 3.2(d). The following is hereby added to the Credit Agreement as a new Section 3.2(d):

"SECTION 3.2(d) Pro Forma Asset Coverage Ratio. Bank shall have received a certificate, in form and substance acceptable to Bank, signed by Borrower's Chief Financial Officer which certifies to the accuracy of an attached pro forma calculation of the Asset Coverage Ratio calculated as of the date of the requested advance with the information contained therein calculated as of the date of the requested advance and with the


principal amount outstanding under the Line of Credit calculated assuming the requested advance is made and outstanding under the Line of Credit."

3. Amendment to Section 4.9(d). Section 4.9(d) of the Credit Agreement is hereby deleted in its entirety, and the following substituted therefor:

"(d) Net income after taxes not less than $1.00, measured on a consolidated rolling 4-quarter basis as of each fiscal quarter end; provided, however, Borrower is permitted to exclude one-time crop losses incurred during fiscal year 2013 up to a maximum of $2,333,123.00 for the reporting period ending March 31, 2014 only; provided further, Borrower is permitted to have net income after taxes of not less than negative $1,600,000 for the four fiscal quarter period ending as of March 31, 2015."

4. Amendment to Section 4.9(e). Section 4.9(e) of the Credit Agreement is hereby deleted in its entirety, and the following substituted therefor:

"(e) Asset Coverage Ratio not less than 1.75 to 1.0 at any time, with "Asset Coverage Ratio" defined as gross domestic accounts receivable (due from U.S. account debtors) plus the lesser of Domestic Inventory or gross domestic accounts receivable multiplied by 1.50, to the principal amount outstanding under the Line of Credit. "Domestic Inventory" is defined as total gross inventory, minus the gross amount of export inventory applied to the

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