EXHIBIT 10.52
AMENDED AND RESTATED TERM LOAN AGREEMENT
(XXXXX DIVERSIFIED, INC. - PACIFIC ETHANOL MADERA LLC)
THIS AMENDED AND RESTATED TERM LOAN AGREEMENT (this
"Agreement") is made effective as of April 13, 2006, by and between XXXXX
DIVERSIFIED, INC., a California corporation ("Lender") and PACIFIC ETHANOL
MADERA LLC, a Delaware limited liability company ("Borrower").
R E C I T A L S:
- - - - - - - -
A. Pacific Ethanol California, Inc., a California corporation
(formerly known as Pacific Ethanol, Inc., "PEI California") and Borrower are,
respectively, direct and indirect wholly-owned subsidiaries of Pacific Ethanol,
Inc., a Delaware corporation ("PEIX").
B. PEI California and Lender are parties to the Term Loan
Agreement, dated as of June 16, 2003 (the "Original Agreement"); the Original
Agreement was assigned to PEIX by PEI California pursuant to the Assignment of
Term Loan Agreement and Deed of Trust, dated as of March 23, 2005, by and among
PEIX, PEI California, Xxxxxxx X. Xxxxx and Lender.
C. PEI California owns certain real property consisting of
approximately 137 acres located in Madera County, California, on Avenue 12 about
four miles east of Highway 99 (the "Real Property"). The Real Property includes
certain improvements and fixtures, including, but not limited to, a grain
storage and processing facility, an office building, and two railroad sidings.
Concurrently with the execution of this Agreement, PEI California will
contribute the Real Property to Borrower pursuant to a grant deed.
D. Borrower is developing a denatured ethanol production
facility on the Real Property (the "Madera Facility"). Borrower and its
affiliates intend, at some future date, to construct a second ethanol production
facility in California (the "Second Facility"). Borrower has selected X.X. Xxxxx
Co. ("Builder") as the general contractor for the Madera Facility and the Second
Facility. Lender is the parent company of Builder. Borrower and Builder are
parties to the Amended and Restated Phase 1 Design-Build Agreement and the Phase
2 Design-Build Agreement, each dated as of November 2, 2005 (collectively, the
"Design-Build Contract"), pursuant to which Builder is providing design-build
services to Borrower for the construction of the Madera Facility. Borrower or
one of its affiliates and Builder intend, at a later date, to enter into a
second design-build contract for the Second Facility.
E. Borrower will obtain the financing necessary to complete
the construction of the Madera Facility pursuant to the Construction and Term
Loan Agreement of even date herewith (the "HUD Loan Agreement") by and among
Borrower, the lenders from time to time party thereto and Xxxxxx United Capital,
a Division of TD Banknorth, N.A., a national banking association, as
administrative agent for the lenders (the "Administrative Agent").
F In order for Borrower to complete the financing for the
construction of the Madera Facility, Lender has agreed to amend and restate the
Original Agreement to, among other things, (i) transfer the loan from PEIX to
Borrower and (ii) subordinate its rights, remedies and security interest
hereunder and under the Deed of Trust (as defined herein) to the rights,
remedies and security interest of the lenders under the HUD Loan Agreement.
NOW THEREFORE, in consideration of the mutual terms and
conditions contained herein, the parties agree as follows:
SECTION 1
FACILITIES
1.1 THE TERM LOAN: Lender agrees to make a term loan to
Borrower in the amount of $5,100,000.00. The credit facility described in this
Section shall be referred to below as the "Term Loan". Borrower will pay
interest on all amounts owing under the Term Loan until payment in full of any
principal outstanding thereunder. Lender and Borrower acknowledge and agree
that, as of the date hereof, the outstanding principal amount of the term loan
is $3,600,000.
1.2 INITIAL ADVANCE; DEPOSIT: On March 24, 2003 Lender made an
initial advance to Borrower under the Term Loan in the principal amount of
$510,000.00, which PEI California used as a good-faith deposit for the purchase
of the Real Property (the "Deposit"). Interest will accrue from March 24, 2003
on the principal amount of the Deposit, at the rates indicated in Paragraph 1.3
of this Agreement.
1.3 REPAYMENT TERMS:
(a) INTEREST RATE. Interest under the Term Loan will
accrue at the following rates:
(1) A rate of five percent (5.00%) per annum
through June 19, 2004.
(2) A rate per annum equal to the "Wall
Street Journal Prime Rate" (as defined in Section 1.2(b)) plus
two percentage points (2.00%) from June 20, 2004 until the
Maturity Date (as defined in Section 1.3(d)).
(b) DEFINITION OF WALL STREET JOURNAL PRIME RATE. The
"Wall Street Journal Prime Rate" for any day is a fluctuating rate of
interest equal to the highest rate published from time to time in the
"Money Rates" section of The Wall Street Journal as the Prime Rate for
such day (or, if such source is not available, such alternate source as
determined by Lender).
(c) COMPUTATION AND PAYMENT OF INTEREST. Interest
shall be based on a 365 day year and compounded monthly. Interest shall
be paid monthly commencing on June 20, 2004, and continuing on the
twentieth (20th) day of each month thereafter. If interest is not paid
as it becomes due, it may be added to, become and be treated as a part
of the principal, and shall thereafter bear like interest.
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(d) PRINCIPAL PAYMENTS/MATURITY DATE. One third of
the principal outstanding on June 20, 2006 shall be paid on that date.
Half of the principal outstanding on June 20, 2007 shall be paid on
that date. All remaining outstanding principal, together with any
accrued interest thereon, shall be due and payable on June 20, 2008,
(the "Maturity Date").
(e) ADDITIONAL PRINCIPAL PAYMENTS. Borrower shall be
required to prepay the principal owing under the Term Loan in the
following circumstances:
(i) should the construction cost for the
Madera Facility to be constructed on the Real Property be less
than $42.6 million then Borrower shall promptly pay lender the
difference between the actual construction cost and $42.6
million; and
(ii) should Borrower or any of its
affiliates obtain construction funding for the Second
Facility, Borrower shall promptly pay Lender all principal and
accrued interest then outstanding.
1.4 PREPAYMENT: Borrower may prepay any amount owing under the
Term Loan, in whole or in part, at any time and without penalty, provided,
however, that any partial prepayment shall first be applied, at Lender's option,
to accrued and unpaid interest and next to the outstanding principal balance.
1.5 [INTENTIONALLY OMITTED.]
1.6 PAYMENT: If any payment required to be made by Borrower
hereunder becomes due and payable on a day other than a Business Day (as defined
below), the due date thereof shall be extended to the next succeeding Business
Day and interest thereon shall be payable at the then applicable rate during
such extension. Both principal and interest are payable in lawful money of the
United States of America in same day funds at any place that Lender may, from
time to time, in writing designate. "Business Day" shall mean a day, other than
a Saturday or Sunday, on which commercial Lenders are open for business in
California.
1.7 DEFAULT RATE: If any amount owing under the Term Loan is
not paid when due, whether at stated maturity, by acceleration, or otherwise,
will bear interest from the date on which that amount is due until the amount is
paid in full, payable on demand, at a rate which is two percent (2.00%) in
excess of the rate or rates then in effect (the "Default Rate").
1.8 LATE PAYMENT: In addition to any other rights Lender may
have hereunder, if any payment of principal or interest, or any portion thereof,
under this Agreement is not paid in accordance with the terms herein, a late
payment charge equal to five percent (5%) of such past due payment may be
assessed and shall be immediately payable.
SECTION 2
COLLATERAL, SUBORDINATION AND GUARANTY
2.1 REAL PROPERTY SECURITY: Borrower agrees to execute and
deliver to Lender a deed of trust dated concurrently with this Agreement (the
"Deed of Trust") granting to Lender a security interest in the Real Property
(the "Collateral"), to secure the payment and performance of the obligations
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hereunder. Notwithstanding any provision to the contrary herein, Lender
acknowledges and agrees that the lien created by the Deed of Trust is subject
and subordinate to the lien created by that certain Deed of Trust, Assignment of
Lease and Rents and Security Agreement of even date herewith, made by Borrower
to Chicago Title Company, as trustee, for the benefit of the Administrative
Agent, as beneficiary.
2.2 SUBORDINATION TO FINANCING: Notwithstanding any provision
to the contrary herein, Lender acknowledges and agrees that all of its rights
and remedies under this Agreement shall be governed by, and subject to, that
certain Intercreditor and Collateral Sharing Agreement of even dated herewith by
and between Lender and the Administrative Agent.
2.3 [INTENTIONALLY OMITTED.]
2.4 ADDITIONAL CONSIDERATION: As additional consideration,
Borrower agrees it will, or will cause its affiliates to engage Lender at the
appropriate time, on mutually acceptable terms substantially similar to the
Design-Build Contract for the Madera Facility, on a design-build agreement for
the Second Facility irrespective of whether the Term Loan is repaid at the time
Borrower or its affiliates is prepared to contract for the design and
construction of that facility.
SECTION 3
CONDITIONS OF LENDING
3.1 CONDITIONS PRECEDENT TO THE EFFECTIVENESS OF THIS
AGREEMENT: The effectiveness of this Agreement is subject to the conditions
precedent that Lender shall have received, before making such Term Loan, all of
the following, in form and substance satisfactory to Lender:
(a) Evidence that the execution, delivery and
performance by Borrower of the "Loan Documents" (as defined below) have
been duly authorized. The term "Loan Documents" shall mean this
Agreement, the Deed of Trust, and all other documents or instruments
entered into between either Borrower and Lender, or by Borrower in
favor of, or for the benefit of Lender, that recite that they are to
secure the Obligations;
(b) The executed Deed of Trust;
(c) Lender holds a duly authorized, created and
perfected security interest in the Collateral; and
(d) The representations contained in Section 4 and in
any other document, instrument or certificate delivered to Lender
hereunder are true, correct and complete.
3.2 CONSENT OF OBLIGEES: As long as any principal amount of
the Term Loan remains due and owing to Lender, consent of at least a majority of
the obligees thereunder shall be required for any action that:
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(a) alters or changes the rights, preferences or
privileges of such obligees; or
(b) amends or waives any provision contained in any
document evidencing Borrower's corporate existence, including, but not
limited to, articles of incorporation and by-laws, related to the
Obligations hereunder.
SECTION 4
REPRESENTATIONS AND WARRANTIES
Borrower hereby makes the representations and warranties to
Lender set forth in this Section. Borrower agrees that each representation and
warranty is continuing.
4.1 STATUS: Borrower is a limited liability company, duly
formed and validly existing under the laws of the State of Delaware.
4.2 AUTHORITY: The execution, delivery and performance by
Borrower of the Loan Documents have been duly authorized and do not and will
not: (i) violate any provision of any law, rule, regulation, order, writ,
judgment, injunction, decree, determination or award presently in effect having
application to Borrower, or (ii) result in a breach of or constitute a default
under any material indenture or loan or credit agreement or other material
agreement, lease or instrument to which Borrower is a party or by which it or
its properties may be bound or affected.
4.3 LEGAL EFFECT: The Loan Documents, and any instrument,
document or agreement required thereunder, when delivered to Lender, will
constitute, legal, valid and binding obligations of Borrower and are enforceable
against Borrower in accordance with their respective terms.
4.4 FINANCIAL STATEMENTS: All financial statements,
information and other data which may have been or which may hereafter be
submitted by Borrower to Lender are true, accurate and correct and have been or
will be prepared in accordance with generally accepted accounting principles
consistently applied and accurately represent the financial condition or, as
applicable, the other information disclosed therein. Since the most recent
submission of such financial information or data to Lender, Borrower represents
and warrants that no material adverse change in Borrower's financial condition
or operations has occurred which has not been fully disclosed to Lender in
writing.
4.5 LITIGATION: Except as have been disclosed to Lender in
writing, there are no actions, suits or proceedings pending or, to the knowledge
of Borrower, threatened against or affecting Borrower or its properties before
any court or administrative agency which, if determined adversely to Borrower,
would have a material adverse effect on Borrower's financial condition or
operations or on the Collateral.
4.6 TITLE TO ASSETS; PERMITTED LIENS: Borrower has good and
marketable title to all of its assets and the same are not subject to any
security interest, encumbrance, lien or claim of any third person other than:
(i) liens and security interests securing indebtedness owed by Borrower to
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Lender; (ii) liens for taxes, assessments or similar charges either not yet due
or being duly contested in good faith; (iii) liens of mechanics, materialmen,
warehousemen or other like liens arising in the ordinary course of business and
securing obligations which are not yet delinquent; (iv) liens and security
interests which, as of the date of this Agreement, have been disclosed to and
approved by Lender in writing; (v) purchase money liens or purchase money
security interests upon or in any property acquired or held by Borrower in the
ordinary course of business to secure indebtedness outstanding on the date
hereof or permitted to be incurred hereunder; (vi) liens in favor of any lender
providing annual crop financing to Borrower; (vii) those liens and security
interests which in the aggregate constitute an immaterial and insignificant
monetary amount with respect to the net value of Borrower's assets, and (viii)
liens permitted under the HUD Loan Agreement (collectively "Permitted Liens").
SECTION 5
COVENANTS
Borrower covenants and agrees that, during the term of this
Agreement, and so long thereafter as Borrower is indebted to Lender under this
Agreement, Borrower will, unless Lender shall otherwise consent in writing:
5.1 [INTENTIONALLY OMITTED.]
5.2 REPORTING AND CERTIFICATION REQUIREMENTS: Borrower shall
deliver or cause to be delivered to Lender, so long as five percent of the total
amount of the Term Loan (principal and accrued interest) remains outstanding,
the following financial and other information:
(a) Not later than 120 days after the end of each of
Borrower's fiscal years, a copy of Borrower's annual financial report
for such year.
(b) Not later than 60 days after the end of each of
Borrower's fiscal quarters, a copy of Borrower's financial report for
that quarter.
(c) Not later than February 15 of any year, provide
monthly cash flow and budget projections for such calendar year
beginning.
5.3 PRESERVATION OF EXISTENCE; COMPLIANCE WITH APPLICABLE
LAWS: Maintain and preserve the existence of its business and all rights and
privileges now enjoyed; and conduct its business and operations in accordance
with all applicable laws, rules and regulations.
5.4 MAINTENANCE OF INSURANCE: Maintain insurance in such
amounts and covering such risks as is usually carried by companies engaged in
similar businesses and owning similar properties in the same general areas in
which Borrower owns property. With respect to insurance covering properties in
which Lender maintains a security interest or lien, such insurance shall name
Lender as loss payee pursuant to a loss payable endorsement satisfactory to
Lender and shall not be altered or canceled except upon 30 days' prior written
notice to Lender.
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5.5 INSPECTION RIGHTS: Lender may, at any reasonable time and
from time to time, conduct inspections and audits of the Collateral.
5.6 [INTENTIONALLY OMITTED.]
5.7 [INTENTIONALLY OMITTED.]
5.8 NOTICE: Give Lender prompt written notice of any and all
(i) Events of Default; (ii) litigation, arbitration or administrative
proceedings to which Borrower is a party or which affects the Collateral, and in
which the claim or liability exceeds $500,000.00; (iii) other matters which have
resulted in, or might result in a material adverse change in the Collateral or
the financial condition or business operations of Borrower.
SECTION 6
EVENTS OF DEFAULT
Any one or more of the following described events shall
constitute an event of default (an "Event of Default") under this Agreement:
6.1 NON-PAYMENT: Borrower shall fail to pay any Obligations
when due.
6.2 NON-PERFORMANCE: Borrower shall fail in any material
respect to perform or observe any term, covenant or agreement contained in the
Loan Documents and any such failure shall continue unremedied for more than 60
days after the occurrence thereof.
6.3 REPRESENTATIONS AND WARRANTIES; FINANCIAL STATEMENTS: Any
representation or warranty made by Borrower under or in connection with the Loan
Documents or any financial statement given by Borrower, or any representation
made by Borrower in any other document, instrument or certificate provided to
Lender, shall prove to have been incorrect in any material respect when made or
given or when deemed to have been made or given.
6.4 INSOLVENCY: Borrower shall: (i) become insolvent or be
unable to pay its debts as they mature; (ii) make an assignment for the benefit
of creditors or to an agent authorized to liquidate any substantial amount of
its properties and assets; (iii) file a voluntary petition in Lenderruptcy or
seeking reorganization or to effect a plan or other arrangement with creditors;
(iv) file an answer admitting the material allegations of an involuntary
petition relating to Lenderruptcy or reorganization or join in any such
petition; (v) become or be adjudicated a Lenderrupt; (vi) apply for or consent
to the appointment of, or consent that an order be made, appointing any
receiver, custodian or trustee, for itself or any of its properties, assets or
businesses; or (vii) any receiver, custodian or trustee shall have been
appointed for all or substantial part of its properties, assets or businesses
and shall not be discharged within 60 days after the date of such appointment.
6.5 EXECUTION: Any writ of execution or attachment or any
judgment lien shall be issued against any property of either Obligor and shall
not be discharged or bonded against or released within 60 days after the
issuance or attachment of such writ or lien.
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6.6 SUSPENSION: Borrower shall voluntarily suspend the
transaction of business or allow to be suspended, terminated, revoked or expired
any permit, license or approval of any governmental body necessary to conduct
Borrower's business as now conducted.
SECTION 7
REMEDIES ON DEFAULT
Upon the occurrence of any Event of Default, Lender may, at
its sole and absolute election, without demand and only upon such notice as may
be required by law:
7.1 ACCELERATION: Declare any or all of Borrower's
indebtedness owing to Lender, whether under this Agreement or any other
document, instrument or agreement, immediately due and payable, whether or not
otherwise due and payable.
7.2 PROTECTION OF SECURITY INTEREST: Make such payments and do
such acts as Lender, in its sole judgment, considers necessary and reasonable to
protect its security interest or lien in the Collateral. Borrower hereby
irrevocably authorizes Lender to pay, purchase, contest or compromise any
encumbrance, lien or claim which Lender, in its sole judgment, deems to be prior
or superior to its security interest.
7.3 FORECLOSURE: Enforce any security interest or lien given
or provided for under this Agreement or under any security agreement, mortgage,
deed of trust or other document, in such manner and such order, as to all or any
part of the properties subject to such security interest or lien, as Lender, in
its sole judgment, deems to be necessary or appropriate and Borrower hereby
waives any and all rights, obligations or defenses now or hereafter established
by law relating to the foregoing.
SECTION 8
MISCELLANEOUS
8.1 FURTHER ASSURANCES: From and after the date of this
Agreement, Lender and Borrower agree to do such things, perform such acts, and
make, execute, acknowledge and deliver such documents as may be reasonably
necessary or proper and usual to carry out the purpose of the Loan Documents in
accordance with their terms.
8.2 SURVIVAL OF REPRESENTATIONS: All representations,
warranties, covenants, agreements, terms and conditions made herein shall
survive the execution, delivery and closing of this Agreement and all
transactions contemplated hereunder.
8.3 NOTICES: Any notice herein required or permitted to be
given shall be in writing and may be (i) personally served, (ii) sent by United
States mail and shall be deemed to have been given when deposited in the United
States mail, registered or certified, with return receipt requested, with
postage prepaid and properly addressed or (iii) sent by an established
commercial courier service with written acknowledgment of receipt requested. For
the purposes hereof, the addresses of the parties hereto (until notice of a
change thereof is served as provided in this section) shall be as follows:
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To Borrower: To Lender:
PACIFIC ETHANOL MADERA LLC XXXXX DIVERSIFIED, INC.
0000 Xxxxx Xxxx Xxxxxx Post Office Box 4376
Fresno, California 93711 Xxxxxx, Xxxxxxxxxx 00000
Fax: (000) 000-0000 Fax: (000) 000-0000
8.4 DESCRIPTIVE HEADINGS: The descriptive headings of the
several sections of this Agreement are inserted for convenience and shall not be
deemed to affect the meaning or construction of any of the provisions hereof.
8.5 COSTS AND EXPENSES: Lender and Borrower shall each pay
their own respective costs and expenses incurred, or to be incurred, by said
party in negotiating and preparing this Agreement, and all exhibits hereto, and
in closing and carrying out the transactions contemplated by this Agreement
(including, without limitation, attorneys', paralegals', and other
professionals' fees and costs).
8.6 SEVERABILITY: In case any provision in this Agreement
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
8.7 AMENDMENT PROVISION: The term "Agreement" or "this
Agreement" and all reference thereto as used throughout this instrument shall
mean this instrument as originally executed or, if later amended or
supplemented, then as so amended or supplemented. Any amendment to this
Agreement must be in writing signed by the party to be charged.
8.8 COUNTERPARTS: This Agreement may be executed in
counterparts, each of which shall be an original, but all of which shall
constitute one and the same Agreement.
8.9 APPLICABLE LAW: The Loan Documents and the rights and
obligations of the parties thereto shall be governed by the laws of the State of
California except to the extent that Lender has greater rights or remedies under
federal law, in which case such choice of California law shall not be deemed to
deprive Lender of such rights and remedies as may be available under federal
law.
8.10 ASSIGNABILITY: The Loan Documents shall be binding upon
the parties hereto and their respective successors and assigns, and shall inure
to the benefit of the parties hereto and the successors and assigns of Lender.
Lender may transfer or assign all or part of its interest hereunder to one or
more of Lender's affiliated partnerships or funds managed by it or any of their
respective directors, officers or partners.
8.11 INTEGRATED AGREEMENT: The Loan Documents constitute the
entire and integrated agreement between Lender and Borrower relating to the Term
Loan and all matters addressed herein and supersede all prior negotiations,
communications, understandings and commitments relating thereto, whether written
or oral.
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8.12 JURY TRIAL WAIVER; REFERENCE: In any judicial action or
proceeding arising from or relating to this Agreement or the other Loan
Documents, including any action or proceeding involving a claim based on or
arising from an alleged tort, (i) Lender and Borrower hereby waive any right it
or they may have to request or demand a trial by jury and (ii) if the action is
before a court of any judicial district of the State of California, either
Lender or Borrower may elect to have all decisions of fact and law determined by
a reference in accordance with California Code of Civil Procedure section 638 ET
SEQ. If such an election is made, the parties shall designate to the court
referee or referees selected under the auspices of the American Arbitration
Association in the same manner as arbitrators are selected in
Association-sponsored proceedings. The presiding referee of the panel, or the
referee if there is a single referee, shall be an active attorney or retired
judge. Judgment upon the award rendered by such referee or referees shall be
entered in the court in which such proceeding was commenced in accordance with
California Code of Civil Procedure sections 644 and 645.
8.13 VENUE: Venue for any action hereunder shall be in an
appropriate court in Fresno, California, selected by Lender to which Borrower
hereby.
[SIGNATURES ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, the parties hereto have caused this
Amended and Restated Term Loan Agreement to be executed as of the date first
above written.
LENDER: BORROWER:
XXXXX DIVERSIFIED, INC., a California PACIFIC ETHANOL MADERA LLC, a
corporation Delaware limited liability company
By: /S/ XXXXXXX X. XXXXX, XX By: /S/ XXXX XXXXXX
--------------------------------------------- --------------------------------------------
Name: Xxxxxxx X. Xxxxx, XX Name:
Title: Vice President Title:
By: /S/ XXXXXXX X. XXXXXX By: /S/ XXXXXXX XXXXXXXXXX
--------------------------------------------- --------------------------------------------
Name: Xxxxxxx X. Xxxxxx Name:
Title: Vice President/CFO Title:
