EXHIBIT 10.50
INTERCREDITOR AND
COLLATERAL SHARING AGREEMENT
This INTERCREDITOR AND COLLATERAL SHARING AGREEMENT, dated
April 13, 2006 (as amended, modified or supplemented, this "AGREEMENT"), is by
and among XXXXXX UNITED CAPITAL, A DIVISION OF TD BANKNORTH, N.A., a national
banking association ("XXXXXX UNITED CAPITAL"), as the agent pursuant to the
Construction and Term Loan Agreement, dated the date hereof (the "SENIOR LOAN
AGREEMENT"), among Pacific Ethanol Madera LLC, a Delaware limited liability
company ("BORROWER"), the lenders from time to time party thereto (the "SENIOR
LENDERS"), and Xxxxxx United Capital, as administrative agent for the Senior
Lenders (in such capacity, together with its successors and assigns, the "SENIOR
AGENT"), XXXXX DIVERSIFIED, INC., a California corporation, as lender (in such
capacity, together with its permitted successors and assigns, the "JUNIOR
LENDER" and, together with the Senior Lenders, the "LENDERS"), pursuant to the
Amended and Restated Term Loan Agreement, dated as of April 13, 2006 (the
"JUNIOR LOAN AGREEMENT"), by and between the Junior Lender and Borrower, and
PACIFIC ETHANOL MADERA LLC, a Delaware limited liability company.
RECITALS
WHEREAS, pursuant to the Senior Loan Agreement, the Senior
Lenders have agreed to make certain construction and term loans (the "SENIOR
LOANS") to Borrower;
WHEREAS, the Senior Loans are and will be secured by first
priority pledges of, mortgages on and security interests in the Collateral (as
defined below);
WHEREAS, pursuant to the Junior Loan Agreement, Junior Lender
has made one or more loans to Borrower in the aggregate original principal
amount of $5,100,000 (such loans and all other obligations of Borrower to Junior
Lender pursuant to the Junior Loan Agreement, the "JUNIOR LOAN");
WHEREAS, the obligations of Borrower in respect of the Junior
Loan have been secured by liens on a portion of the Collateral, which liens are
intended to be junior to the liens securing the Senior Loans; and
WHEREAS, the Senior Agent and the Junior Lender desire by
entering into this Agreement to define the rights and responsibilities as
between them concerning the Collateral;
NOW, THEREFORE, in consideration of the premises and the
mutual agreements contained herein, and other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, the parties hereto
agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 DEFINITIONS. Capitalized terms used and not
otherwise defined in this Agreement have the meanings given to those terms in
Schedule X hereto.
ARTICLE II
SENIOR AGENT'S RIGHT TO FORECLOSE
Section 2.1 SENIOR AGENT'S RIGHT TO FORECLOSE. Junior Lender
hereby agrees that nothing in the Junior Loan Agreement or the related security
documents or this Agreement will restrict any right of the Senior Agent or the
Senior Lenders to foreclose on or exercise any other right or remedy with
respect to the Senior Agent's and the Senior Lenders' security interests in the
Collateral, and the Senior Agent or any Senior Lender may foreclose on or
exercise any other right or remedy with respect to the Collateral, to the
exclusion of any similar right or remedy that the Junior Lender many have, in
any manner or order and at any time.
ARTICLE III
RIGHTS OF THE LENDERS
Section 3.1 LIEN PRIORITY. The Junior Lender acknowledges and
agrees that (x) it does not have, and will not assert, any Lien against any
asset of Borrower other than the Junior Lender Collateral and (y) the Liens on
the Collateral granted to the Senior Agent for the benefit of the Senior Lenders
pursuant to the security documents executed in connection with the Senior Loan
Agreement will at all times be superior in priority to any Lien on the
Collateral, including the Junior Lender Collateral, granted to the Junior Lender
pursuant to the security documents executed in connection with the Junior Loan
Agreement, regardless of the order or time of the granting of any Lien, the
order or time as to which any Lien attached to any or all of the Collateral or
the order or time of any UCC filing or other filing or recording.
Section 3.2 SUBORDINATION.
(a) The Junior Lender may not commence any action or
proceeding against Borrower to exercise remedies under the documents relating to
the Junior Obligations with respect to any Collateral, or receive any proceeds
from the sale or disposition thereof, unless and until the Senior Obligations
have been paid in full.
(b) The Senior Agent and the Senior Lenders may, at any time
and from time to time, without the consent of or notice to the Junior Lender,
without incurring responsibility or liability to the Junior Lender and without
impairing or releasing any right or obligation of the Senior Agent or the Senior
Lenders hereunder:
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(i) amend the Senior Loan Agreement in any manner or
enter into or amend in any manner any other agreement relating to the
Senior Obligations;
(ii) sell, exchange, release or otherwise deal with
any property by whomsoever at any time pledged or mortgaged to secure,
or howsoever securing, the Senior Obligations;
(iii) release any Person liable in any manner for the
payment or collection of the Senior Obligations, including without
limitation Borrower;
(iv) exercise or refrain from exercising any right
against Borrower or any other Person; and
(v) apply any sum by whomsoever paid or however
realized to the Senior Obligations.
(c) Subject to the payment in full of the Senior Obligations
in cash, the Junior Lender will be subrogated to the Senior Agent's and the
Senior Lenders' rights to receive payments or distributions in cash or property
applicable to the Senior Obligations and, as among Borrower and its creditors
other than the Senior Agent, the Senior Lenders and the Junior Lender, no such
payment or distribution made to the Senior Agent or the Senior Lenders by virtue
of this Agreement that otherwise would have been made to the Junior Lender will
be deemed to be a payment by Borrower on account of the Junior Obligations, it
being understood that the provisions of this Section 3.2(c) are intended solely
for the purpose of defining the relative rights of the Junior Lender, the Senior
Agent and the Senior Lenders.
(d) The Junior Lender will not sell, assign, transfer or
otherwise dispose of the Junior Obligations to any Person that is not an
Affiliate of the Junior Lender without the prior written consent of the Senior
Agent, which consent will not be unreasonably withheld or delayed.
Section 3.3 NOTICES. The Junior Lender agrees that it will
provide the Senior Agent with prompt notice of any default under the Junior Loan
Agreement of which the Junior Lender has knowledge.
ARTICLE IV
APPLICATION OF COLLATERAL
Section 4.1 PAYMENTS. Except as otherwise expressly provided
in this Agreement, all amounts received by or available to the Senior Agent, the
Senior Lenders or the Junior Lender in respect of proceeds from the disposition
of any Collateral on which the Junior Lender has a lien will be applied as
follows:
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FIRST: Payment of all fees, costs and expenses of the Senior
Agent in accordance with the Senior Loan Agreement to the
extent not paid by Borrower;
SECOND: Payment of all accrued and unpaid interest on the
Senior Loans;
THIRD: Payment of all other Senior Obligations due and owing
to the Senior Lenders;
FOURTH: Payment of all Junior Obligations due and owing to the
Junior Lender; and
FIFTH: As required by applicable law, payment of any remaining
balance to Borrower or as Borrower may direct in writing.
Section 4.2 RETURN OF COLLATERAL. The Junior Lender hereby
agrees that (a) if at any time it receives proceeds from the disposition of any
Collateral (other than in accordance with this Agreement), it will promptly pay
or deliver the same to the Senior Agent for application in accordance with this
Agreement and (b) it will not take or cause to be taken any action, including
the commencement of any legal or equitable proceeding, if the purpose is to give
it any preference or priority with respect to any Collateral.
ARTICLE V
TERMINATION
Section 5.1 TERMINATION. This Agreement will terminate and
cease to be of further effect upon the payment in full in cash of the Senior
Obligations.
ARTICLE VI
MISCELLANEOUS PROVISIONS
Section 6.1 BENEFIT OF AGREEMENT; COMPLIANCE WITH JUNIOR LOAN
AGREEMENT.
(a) Nothing in this Agreement, expressed or implied, gives or
may be construed to give to any Person other than the Senior Agent and the
Junior Lender any legal or equitable right, remedy or claim under this
Agreement, or under any covenant or provision herein contained, all such
covenants and provisions being for the sole benefit of the Senior Agent and the
Junior Lender; PROVIDED, that Borrower will be entitled to rely on and benefit
from the provisions of Sections 2.1, 3.2(a), 3.2(d) and 5.1 and Article VI of
this Agreement.
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(b) The Junior Lender acknowledges and agrees that none of (i)
Borrower's execution of and compliance with the terms of this Agreement, (ii)
Borrower's entering into the Senior Loan Agreement and the related loan and
security documents and (iii) the grant and pledge by Borrower and its member of
real and personal property as collateral security to the Senior Agent for the
benefit of the Senior Lenders will result in a default under the Junior Loan
Agreement and all such acts are taken (or will be deemed to have been taken) by
Borrower in compliance with the Junior Loan Agreement.
Section 6.2 SUCCESSORS OR ASSIGNS. This Agreement will be
binding upon and inure to the benefit of and be enforceable by and against the
respective permitted successors and assigns of the Senior Agent and the Junior
Lender.
Section 6.3 NOTICES. All notices, consents, certificates,
waivers, documents and other communications required or permitted to be
delivered to any party under the terms of this Agreement (a) must be in writing,
(b) must be personally delivered, transmitted by a recognized courier service or
transmitted by facsimile, and (c) must be directed to such party at its address
or facsimile number set forth below. All notices will be deemed to have been
duly given and received on the date of delivery if delivered personally, three
(3) days after delivery to the courier if transmitted by courier, or the date of
transmission with confirmation if transmitted by facsimile, whichever occurs
first. Any party may change its address or facsimile number for purposes hereof
by notice to all other parties.
Addresses: Senior Agent: Xxxxxx United Capital,
a division of TD Banknorth, N.A.
000 Xxxx Xxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attn: Xx. Xxxxxx X. Xxxxxx, Xx.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Junior Lender: Xxxxx Diversified
Xxxx Xxxxxx Xxx 0000
Xxxxxx, Xxxxxxxxxx 00000
Attn: Xxxx Xxxxx
Facsimile: (000) 000-0000
Borrower: Pacific Ethanol Madera LLC
00000 Xxxxxx 00
Xxxxxx, Xxxxxxxxxx 00000
Attn: Xxxx Xxxxxxxxxx
Facsimile: (000) 000-0000
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Section 6.4 COUNTERPARTS. This Agreement may be executed in
counterparts and by the different parties hereto in separate counterparts, each
of which when so executed will be deemed to be an original and all of which
taken together will constitute one and the same instrument.
Section 6.5 HEADINGS DESCRIPTIVE. The headings of the several
Articles and Sections of this Agreement are inserted for convenience only and
will not in any way affect the meaning or construction of any provision of this
Agreement.
SECTION 6.6 GOVERNING LAW. THIS AGREEMENT WILL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO THE CONFLICT OF LAW PROVISIONS THEREOF (OTHER THAN SECTION 5.1401 OF
THE GENERAL OBLIGATIONS LAW AND ANY SUCCESSOR STATUTE THERETO).
Section 6.7 NO WAIVER; CUMULATIVE REMEDIES. No failure or
delay on the part of any party in exercising any right, power or privilege
hereunder will impair any such right, power or privilege or operate as a waiver
thereof, nor will any single or partial exercise of any right, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, power or privilege hereunder or thereunder. The
rights, powers and remedies herein or provided in this Agreement are cumulative
and not exclusive of any right, power or remedy which any party would otherwise
have.
Section 6.8 SEVERABILITY. Any provision of this Agreement that
is invalid or prohibited in any jurisdiction will, as to such jurisdiction, be
ineffective and severable from the rest of this Agreement to the extent of such
invalidity or prohibition, without impairing or affecting in any way the
validity of any other provision of this Agreement or of such provision in other
jurisdictions. The parties agree to replace any provision that is ineffective by
operation of this Section 6.8 with an effective provision which as closely as
possible corresponds to the spirit and purpose of such ineffective provision and
this Agreement as a whole.
Section 6.9 AMENDMENTS. Neither this Agreement nor any of the
terms hereof may be changed, waived, discharged or terminated unless such
change, waiver, discharge or termination is in writing signed by each party
hereto.
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IN WITNESS WHEREOF, the parties hereto, intending to be
legally bound, have caused this Intercreditor and Collateral Sharing Agreement
to be signed on the date first above written.
XXXXXX UNITED CAPITAL, A DIVISION OF TD BANKNORTH, N.A.
as Senior Agent
By /S/ XXXXXX X. XXXXXX, XX.
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Name: Xxxxxx X. Xxxxxx, Xx.
Title: Senior Vice President
XXXXX DIVERSIFIED, INC.
as Junior Lender
By /S/ XXXXXXX X. XXXXXX
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Name: Xxxxxxx X. Xxxxxx
Title: Vice President/CFO
PACIFIC ETHANOL MADERA LLC,
as Borrower
By /S/ XXXX XXXXXX
--------------------------------------------------
Name:
Title:
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Schedule X
to Intercreditor and
Collateral Sharing Agreement
----------------------------
Definitions
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When used in the Intercreditor and Collateral Sharing Agreement,
the following capitalized defined terms have the meanings set forth below:
"AFFILIATE" means, with respect to any Person, any other Person
(a) directly or indirectly controlling, controlled by, or under common control
with, such Person, (b) directly or indirectly owning or holding or receiving any
equity interest or other economic interest or benefit in such Person in excess
of fifty percent (50%) or (c) in which such Person directly or indirectly
controls any voting stock or other equity interest in excess of fifty percent
(50%). For purposes of this definition, "control" (including with correlative
meanings the terms "controlling," "controlled by" and "under common control
with") means the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of a Person, whether through
the ownership of voting securities, by contract or otherwise.
"COLLATERAL" means, collectively, the "Collateral," as such term
is defined in the Senior Security Agreement, the "Pledged Collateral," as such
term is defined in the Senior Pledge Agreement and the "Mortgaged Property," as
such term is defined in the Senior Mortgage, together with all other property,
rights and interests from time to time subject, or purported to be subject, to
the liens securing the payment of the Senior Obligations.
"JUNIOR LENDER COLLATERAL" means the "Collateral," as defined in
the Junior Loan Agreement.
"JUNIOR OBLIGATIONS" means and includes the principal of, premium,
if any, and interest on all liabilities of Borrower to the Junior Lender,
together with all costs and expenses relating thereto, direct or contingent, now
or hereafter existing, due or to become due to, or held or to be held by, the
Junior Lender, whether created directly or acquired by assignment or otherwise,
including without limitation all indebtedness of Borrower for principal of,
premium, if any, and interest on the Junior Loans.
"LIEN" means any lien, mortgage, pledge, security interest, charge
or encumbrance of any kind (including any conditional sale or other title
retention agreement, any lease in the nature thereof and any agreement to give
any security interest).
Schedule X
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"PERSON" means and includes natural persons, corporations, limited
partnerships, general partnerships, limited liability companies, joint stock
companies, joint ventures, associations, companies, trusts, banks, trust
companies and other organizations, whether or not legal entities, and
governments and agencies and political subdivisions thereof.
"SENIOR MORTGAGE" means the Deed of Trust, Assignment of Leases
and Rents, Security Agreement and Fixture Filing to be entered into by and
between Borrower and a trustee for the benefit of the Senior Agent.
"SENIOR OBLIGATIONS" means and includes the principal amount of,
premium, if any, and interest on all liabilities of Borrower to the Senior Agent
and the Senior Lenders, together with all costs and expenses relating thereto,
whether direct or contingent, now or hereafter existing, due or to become due
to, or held or to be held by, the Senior Agent or the Senior Lenders, whether
created directly or acquired by assignment or otherwise, including without
limitation all indebtedness of Borrower for principal of, premium, if any, and
interest on the Senior Loans.
"SENIOR PLEDGE AGREEMENT" means the Membership Interest Pledge
Agreement entered into between Pacific Ethanol Holding Co. LLC, on the one hand,
and the Senior Agent, on the other hand.
"SENIOR SECURITY AGREEMENT" means the Assignment and Security
Agreement entered into between Borrower and the Senior Agent.
"UCC" means the Uniform Commercial Code in effect in the State of
New York or any other applicable jurisdiction from time to time.
Schedule X
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