EXHIBIT 10.49
MEMBER INTEREST PLEDGE AGREEMENT
This MEMBER INTEREST PLEDGE AGREEMENT, dated April 13, 2006
(this "AGREEMENT"), is made by PACIFIC ETHANOL HOLDING CO. LLC, a Delaware
limited liability company ("PLEDGOR"), in favor of XXXXXX UNITED CAPITAL, A
DIVISION OF TD BANKNORTH, N.A., a national banking association, as the
Administrative Agent to the Lenders (as defined below) (together with its
successors and permitted assigns in such capacity, the "ADMINISTRATIVE AGENT").
W I T N E S S E T H:
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WHEREAS, Pacific Ethanol Madera LLC, a Delaware limited
liability company ("Borrower"), was formed to develop, own and operate an
approximately 35 million gallon-per-year dry mill ethanol production facility to
be located in Madera, California (the "PROJECT"), and other related businesses;
WHEREAS, Borrower has entered into the Construction and Term
Loan Agreement, dated April 10, 2006 (as the same may be amended, modified or
supplemented from time to time, the "LOAN AGREEMENT"), by and among Borrower,
the lenders from time to time party thereto (the "LENDERS") and the
Administrative Agent, pursuant to which the Lenders have agreed to make certain
loans to Borrower; and
WHEREAS, it is a condition precedent to the Lenders making any
loans pursuant to the Loan Agreement that Pledgor enter into this Agreement;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants contained herein, and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, and in order to
induce the Lenders to make the loans pursuant to the Loan Agreement, the parties
hereto agree as follows:
Section 1. DEFINITIONS. Capitalized terms used and not
otherwise defined in this Agreement have the meanings given to those terms in
Schedule X hereto, and the rules of construction set forth in Schedule X govern
this Agreement. In the event of any inconsistency expressed or implied between
this Agreement and the Loan Agreement, the Loan Agreement will govern the
interpretation and implementation of this Agreement.
Section 2. PLEDGE. As security for the prompt and complete
payment and performance when due of:
(a) the Obligations (whether due because of stated maturity,
acceleration, mandatory prepayment or otherwise); and
(b) all obligations of Pledgor under this Agreement;
(in each case, including the payment of amounts that would become due but for
the operation of the automatic stay under Section 362(a) of the Bankruptcy Code)
(collectively, the "SECURED OBLIGATIONS"), and to induce the Lenders to make the
Loans, Pledgor hereby pledges and grants to the Administrative Agent on behalf
of the Lenders a continuing First-Priority Lien on and security interest in the
following (collectively, the "PLEDGED COLLATERAL"):
(i) all of Pledgor's membership interests in Borrower (the
"PLEDGED INTERESTS"), and all of Pledgor's rights, privileges,
authority and powers as an owner of the Pledged Interests;
(ii) all additional membership interests, shares, securities
and/or equity interests in Borrower, and all warrants, rights and
options to purchase or receive any membership interests, shares,
securities and/or equity interests in Borrower, in each case that
Pledgor at any time owns or acquires or in which Pledgor at any time
obtains any right, title or interest;
(iii) all certificates, instruments or other writings, whether
now existing or hereafter arising, representing or evidencing the
Pledged Interests or other equity interests described in clauses (i)
and (ii) above;
(iv) the right to receive any distribution in respect of the
property described in clauses (i) and (ii) above, whether now owned or
hereafter acquired, including without limitation the rights to receive
any payment in connection with the declaration or payment of any
dividend or distribution in respect of any such property, or the
purchase, redemption or other retirement of any Pledged Interests or
other equity interests of any class in Borrower, or of options,
warrants or other rights for the purchase of such Pledged Interests or
other equity interests, directly or indirectly through a subsidiary or
parent or otherwise;
(v) all of Pledgor's capital or ownership interest, including
any capital accounts, in Borrower, and all of Pledgor's accounts,
deposits or credits of any kind with Borrower; and
(vi) any and all additions and accessions to any of the
foregoing, all improvements thereto, all substitutions and replacements
therefor and all products and proceeds thereof (including without
limitation whatever is received upon the sale, exchange, collection or
other disposition of the Pledged Collateral or proceeds, including
insurance payable by reason of loss, damage or other event affecting
the Pledged Collateral, and all "proceeds," as such term is defined in
the UCC) and all dividends, interest, revenues, income, distributions
and proceeds of any kind, whether cash, instruments, securities or
other property, received by or distributable to Pledgor in respect of,
or in exchange for, the Pledged Interests or any other Pledged
Collateral;
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PROVIDED, that any distributions or payments (whether in the form of cash,
instruments or otherwise) properly made by Borrower to Pledgor in accordance
with the Loan Documents will not constitute Pledged Collateral and will be free
and clear of the Administrative Agent's Liens (as defined below) for all
purposes.
The security interest granted to the Administrative Agent pursuant to this
Agreement extends to all Pledged Collateral of the kind that is the subject of
this Agreement that Pledgor may acquire at any time during the continuation of
this Agreement, whether such Pledged Collateral is in transit or in Pledgor's,
the Administrative Agent's or any other Person's constructive, actual or
exclusive control or possession.
Section 3. CONTINUING SECURITY INTEREST. This Agreement
creates a continuing security interest in the Pledged Collateral and will remain
in full force and effect until the payment or satisfaction in full of the
Secured Obligations (exclusive of any indemnification or other obligations which
are expressly stated in any Loan Document to survive termination of the Loan
Documents). If, at any time for any reason (including the insolvency,
bankruptcy, dissolution, liquidation or reorganization of Pledgor or Borrower,
or the appointment of any intervener or conservator of, or agent or similar
official for, Pledgor, Borrower or any of their respective properties), any
payment received by the Administrative Agent or the Lenders in respect of the
Secured Obligations is rescinded or must otherwise be restored or returned by
the Administrative Agent or the Lenders, this Agreement will continue to be
effective or will be reinstated, if necessary, as if such payment had not been
made.
Section 4. DELIVERY OF CERTIFICATES. Pledgor agrees to deliver
to the Administrative Agent, promptly upon receipt thereof, all certificates and
instruments evidencing or representing the Pledged Interests or any other
Pledged Collateral, in each case properly endorsed in blank and in suitable form
for transfer by delivery and accompanied by undated instruments of transfer
endorsed in blank, in form and substance reasonably satisfactory to the
Administrative Agent. The Administrative Agent will hold such certificates and
instruments until the Secured Obligations have been paid and satisfied in full
(exclusive of any indemnification or other obligations which are expressly
stated in any Loan Document to survive termination of the Loan Documents), at
which time such certificates and instruments will be promptly returned to
Pledgor. Upon the occurrence and during the continuance of an Event of Default
(other than an Event of Default caused solely by Borrower's failure to comply
with Section 5.1(p) of the Loan Agreement), the Administrative Agent will have
the right to exchange certificates or instruments evidencing or representing the
Pledged Interests or any other Pledged Collateral for certificates or
instruments of smaller or larger denominations.
Section 5. CONTRACTUAL OBLIGATIONS. Pledgor agrees that:
(a) its liabilities and obligations in respect of the Pledged
Collateral will not be affected by this Agreement or any other Document to which
Pledgor is a party (this Agreement and such other Documents are herein referred
to, collectively, as the "PLEDGOR DOCUMENTS"), the Lien on the Pledged
Collateral created in favor of the Administrative Agent pursuant to this
Agreement (the "ADMINISTRATIVE AGENT'S LIEN") or the exercise by the
Administrative Agent of any of its rights under and in accordance with any
Pledgor Document;
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(b) unless expressly agreed in writing, neither the
Administrative Agent nor the Lenders will have any liabilities or obligations of
Pledgor as a result of any Pledgor Document, the exercise by the Administrative
Agent of its rights under and in accordance with any Pledgor Document or
otherwise; and
(c) the Administrative Agent has no obligation to enforce any
obligation, liability or claim with respect to the Pledged Collateral, or to
take any other action with respect to the Pledged Collateral, except as
expressly set forth in this Agreement.
Section 6. REPRESENTATIONS AND WARRANTIES. Pledgor represents
and warrants on the date hereof as follows to the Administrative Agent:
(a) EXISTENCE; AUTHORITY.
(i) Pledgor is a limited liability company duly
formed, validly existing and in good standing under the laws of the
State of Delaware and is duly qualified to do business as a limited
liability company and is in good standing in each jurisdiction in which
such qualification is necessary in view of its current or proposed
business and operations or the ownership of its properties (except to
the extent that such non-qualification could not reasonably be expected
to have a Material Adverse Effect).
(ii) Pledgor has all necessary rights, franchises,
privileges, power and authority to execute, deliver and perform its
obligations under this Agreement, and to conduct its business as
currently conducted and as proposed to be conducted (except to the
extent that such failure could not reasonably be expected to have a
Material Adverse Effect). Pledgor has taken all necessary limited
liability company action to execute, deliver and perform its
obligations under this Agreement and to grant the Lien in favor of the
Administrative Agent created hereby, and this Agreement has been duly
executed and delivered by Pledgor and constitutes the legally valid and
binding obligation of Pledgor, enforceable in accordance with its
terms, except as enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or limiting
creditors' rights generally or by general principles of equity.
(b) PLEDGED INTERESTS; CAPITALIZATION OF BORROWER.
(i) The Pledged Interests constitute all of the
issued and outstanding membership interests, shares or other ownership
interests of any class or character of Borrower and such membership
interests are and have been duly and validly authorized, issued and
subscribed and are fully paid and non-assessable.
(ii) Borrower does not have outstanding (A) any
securities convertible into or exchangeable for any membership
interests of Borrower or (B) any rights to subscribe for or to
purchase, or any options, warrants or other rights to acquire any
membership interests of Borrower or securities convertible into or
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exchangeable or exercisable for any membership interests of Borrower,
or any agreements, arrangements or understandings providing for the
issuance (contingent or otherwise) of, or any calls, commitments or
claims of any character relating to, any membership interests of
Borrower, except for any such rights, options, warrants or other
arrangements made in favor of or exercisable by the Administrative
Agent in accordance with the Documents.
(c) NAME, ADDRESS AND RECORDS. The name of Pledgor set forth
in the first paragraph of this Agreement is the true, correct and complete name
of Pledgor and Pledgor does not conduct business under any other name or
tradestyle. The legal address of Pledgor and the address of its chief executive
office and principal place of business is 0000 X. Xxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxx 00000. Pledgor keeps all of its records and all documents evidencing
or relating to the Pledged Collateral at such address. Borrower keeps all
records and documents relating to the Pledged Collateral at 00000 Xxxxxx 00,
Xxxxxx, Xxxxxxxxxx 00000.
(d) NO VIOLATIONS, DEFAULTS OR LIENS.
(i) Pledgor (A) is not in violation of or default
under any of its or of Borrower's constituent documents, (B) is not in
violation of any Applicable Law, except to the extent that any such
violation could not reasonably be expected to have a Material Adverse
Effect and (C) is not in violation of or default under any Document to
which it is a party, except to the extent that any such violation or
default could not reasonably be expected to have a Material Adverse
Effect.
(ii) Pledgor is the legal and beneficial owner of,
and has good, marketable and valid title to, the Pledged Collateral,
and none of the Pledged Collateral is subject to any Lien other than
the Lien granted in favor of the Administrative Agent hereby, and no
effective mortgage, deed of trust, Financing Statement, security
agreement or other instrument similar in effect that is not a Security
Document is on file or of record in the office of any Government
Instrumentality with respect to any Pledged Collateral.
(iii) The execution, delivery and performance of this
Agreement and the creation and grant of the Lien in favor of the
Administrative Agent hereunder do not and will not (A) violate any
Applicable Law with respect to Pledgor except to the extent that any
such violation could not reasonably be expected to have a Material
Adverse Effect, (B) violate, or result in a default under, the Borrower
LLC Agreement or any other of Borrower's or of Pledgor's constituent
documents, (C) violate, or result in a default under, any Document to
which any of Pledgor or Borrower is a party, except to the extent that
any such violation or default could not reasonably be expected to have
a Material Adverse Effect, (D) result in or require the creation or
imposition of any Lien on the Pledged Collateral other than the Lien in
favor of the Administrative Agent granted hereby or as stated in
(d)(ii) above, or (E) require an Approval from any Person that has not
been obtained or that will not be obtained in due course.
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(e) PLEDGOR REQUIRED APPROVALS. All Approvals required for the
execution, delivery and performance of this Agreement and the creation and grant
of the Lien in favor of the Administrative Agent hereunder (collectively, the
"PLEDGOR REQUIRED APPROVALS"), in each case that are required to be obtained on
or prior to the date hereof have been obtained (except to the extent the failure
to obtain such Approvals could not reasonably be expected to have a Material
Adverse Effect), and Pledgor has no reason to believe that any of the Pledgor
Required Approvals not yet obtained cannot or will not be obtained in the normal
course of business as and when required and without significant expense. Pledgor
has provided the Administrative Agent with a true, correct and complete copy of
each Pledgor Required Approval obtained. All Pledgor Required Approvals obtained
by Pledgor (i) are validly issued, (ii) are in full force and effect, (iii) are
free from any condition or requirement that cannot be met or that could
materially adversely affect Pledgor's ability to execute, deliver and perform
its obligations under this Agreement and (iv) are not subject to pending appeal,
review or cancellation. No proceeding or other action is pending or threatened
in writing with respect to any Pledgor Required Approval.
(f) [RESERVED.]
(g) NO PROCEEDINGS. There is no pending or, to the knowledge
of Pledgor, threatened action, suit, litigation, investigation, arbitration or
other proceeding involving or affecting the Pledged Collateral before any
Government Instrumentality, and the Pledged Collateral is not subject to any
order, writ or injunction. There is no pending or, to the knowledge of Pledgor,
threatened action, suit, litigation, investigation, arbitration or other
proceeding involving or affecting Pledgor or any of its properties or assets
before any Government Instrumentality, that could reasonably be expected to have
a Material Adverse Effect. Pledgor is not subject to any order, writ or
injunction that prohibits, enjoins or limits any aspect of the transactions
contemplated by this Agreement or the Documents or that could reasonably be
expected to have a Material Adverse Effect.
(h) NO ADVERSE AGREEMENTS. Pledgor is not a party to or
affected by any charter, bylaw, partnership agreement, membership agreement or
other constituent document, as the case may be, or any Contractual Obligation
that could reasonably be expected to have a Material Adverse Effect.
(i) INVESTMENT COMPANY REGULATION. Pledgor is not an
"investment company" or a company "controlled" by an "investment company" within
the meaning of the Investment Company Act of 1940, as amended, or an "investment
advisor" within the meaning of the Investment Company Act of 1940, as amended.
(j) [RESERVED.]
(k) ENFORCEABILITY. The description of the Pledged Collateral
contained in this Agreement is true, correct and complete and is sufficient to
describe the Pledged Collateral and to create and attach (and to allow the
perfection of) the Lien intended to be created by this Agreement. As of the date
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hereof, all necessary and appropriate deliveries, notices, recordings, filings
and registrations have been made and effected or will be made and effected to
perfect a First-Priority Lien on the Pledged Collateral in favor of the
Administrative Agent in all relevant jurisdictions, and the Administrative Agent
has and will have a duly and validly created, attached, perfected and
enforceable First-Priority Lien on the Pledged Collateral in all relevant
jurisdictions.
(l) PLEDGED INTERESTS AS SECURITY. The Pledged Interests (i)
are represented by a certificate in bearer or registered form, or the transfer
of which may be registered upon books maintained for that purpose by or on
behalf of Borrower and (ii) are, or are of a type of, securities governed by
Article 8 of the UCC.
(m) FULL DISCLOSURE. To Pledgor's knowledge, the
representations and warranties contained in this Agreement are true, correct and
complete in all material respects as of the date made, except to the extent such
representations and warranties specifically relate to an earlier date, in which
case such representations and warranties are true, correct and complete as of
such earlier date.
Section 7. AFFIRMATIVE COVENANTS. Pledgor covenants and agrees
that, until the payment or satisfaction in full of the Secured Obligations
(exclusive of any indemnification or other obligations which are expressly
stated in any Loan Document to survive termination of the Loan Documents), it
will perform and observe each of the following covenants:
(a) EXISTENCE. Pledgor will preserve and maintain in full
force and effect its legal existence as a Delaware limited liability company,
and qualify and remain qualified as a foreign limited liability company in each
jurisdiction in which such qualification is necessary in view of its ownership
of its interest in Borrower and any other of its property constituting Pledged
Collateral, except to the extent that any non-qualification could not reasonably
be expected to have a Material Adverse Effect.
(b) COMPLIANCE WITH LAWS, APPROVALS AND OBLIGATIONS. Pledgor
will comply with this Agreement and all Pledgor Required Approvals and will
comply in all material respects with all Applicable Laws and the other Documents
to which it is a party. Pledgor will obtain and maintain in full force and
effect all Pledgor Required Approvals required from time to time for the
execution, delivery, performance or enforcement of this Agreement or the Lien
created and granted in favor of the Administrative Agent hereunder. Pledgor will
furnish the Administrative Agent with true, correct and complete copies of all
Pledgor Required Approvals promptly after receipt thereof.
(c) PLEDGED COLLATERAL.
(i) Pledgor will maintain good and marketable title
to the Pledged Collateral and will at all times warrant and defend its
title to, and the Administrative Agent's Lien on, the Pledged
Collateral against all claims other than the Administrative Agent's
Lien thereon and Liens for Taxes permitted by the first sentence of
Section 8(d).
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(ii) Pledgor will take all actions necessary to
ensure that the Administrative Agent has and continues to have in all
relevant jurisdictions a duly and validly created, attached, perfected
and enforceable First-Priority Lien on the Pledged Collateral
(including after-acquired Pledged Collateral). Pledgor will deliver
possession of any Pledged Collateral, or cause control over any Pledged
Collateral to be given, to the Administrative Agent or its designee
promptly upon acquiring rights therein, to the extent the
Administrative Agent is required to take or maintain possession or
control thereof in order to perfect its security interest in such
Pledged Collateral.
(d) [RESERVED.]
(e) RECORDS AND INSPECTION RIGHTS. Pledgor will keep and
maintain at its address indicated in Section 6(c) true, correct and complete
books and records related to the Pledged Interests. At any reasonable time and
from time to time during normal business hours and upon at least seven days'
advance notice to Pledgor by the Administrative Agent, Pledgor will permit the
Administrative Agent and its representatives to examine and make copies of and
abstracts from such books and records, and to discuss the affairs, finances and
accounts of Pledgor directly with Pledgor's officers or managers, if any;
PROVIDED, that, notwithstanding anything to the contrary herein provided, (i) so
long as no Default or Event of Default has occurred and is continuing, Pledgor
shall only be required to reimburse the Administrative Agent for costs with
respect to one visit or inspection per calendar year and shall not be required
to reimburse Lenders for costs with respect to visits or inspections.
(f) NOTICE REQUIREMENTS. Promptly and in any event within
three (3) Business Days after Pledgor obtains knowledge thereof, Pledgor will
give the Administrative Agent notice of the occurrence of any of the following
events of which Pledgor has or acquires knowledge:
(i) any pending or threatened in writing claim,
action, attachment, proceeding, suit, litigation, investigation or
arbitration by any Person or before any Government Instrumentality
involving or affecting Pledgor or any Pledged Collateral or, to
Pledgor's knowledge, Borrower, that could reasonably be expected to
have a Material Adverse Effect;
(ii) any termination, revocation, suspension or
modification of any Pledgor Required Approval, or any action or
proceeding that could reasonably be expected to result in any of the
foregoing; or
(iii) any event or circumstance that could reasonably
be expected to have a Material Adverse Effect.
In each notice delivered pursuant to this Section 7(f), Pledgor will include
reasonable details concerning the occurrence that is the subject of such notice
as well as Pledgor's proposed course of action, if any. Delivery of a notice
pursuant to this Section 7(f) will not affect Pledgor's obligations under any
other provision of any Document to which it is a party.
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(g) LITIGATION. In any claim, action, suit, litigation,
investigation, arbitration or other proceeding involving the Pledged Collateral
that is brought by any Person other than the Administrative Agent, Pledgor will
use commercially reasonable efforts to make all filings and responses in a
timely manner, pursue all remedies and appeals, defend its rights and properties
therein with diligence and take all lawful action to avoid impairment of the
Administrative Agent's Lien or material impairment of the Administrative Agent's
other rights under this Agreement.
(h) COSTS. Pledgor will bear all costs and expenses involved
in complying with its obligations under Section 7 and Section 8 hereof.
Section 8. NEGATIVE COVENANTS. Pledgor covenants and agrees
that, until the payment or satisfaction in full of the Secured Obligations
(exclusive of any indemnification or other obligations which are expressly
stated in any Loan Document to survive termination of the Loan Documents), it
will perform and observe each of the following covenants:
(a) BUSINESS. Pledgor will not (i) make any material change in
the nature of its business, or (ii) change the jurisdiction of its formation,
without the Administrative Agent's prior written consent, which consent will not
be unreasonably withheld or delayed.
(b) MERGERS AND SALES OF ASSETS. Except as otherwise permitted
by the Loan Agreement, Pledgor will not:
(i) merge or consolidate with any Person, or
liquidate or dissolve, or sell, assign, lease or otherwise dispose of
(whether in one transaction or in a series of transactions), such a
portion of its assets as would cause Pledgor's liabilities to exceed
its assets or Pledgor otherwise to become insolvent; or
(ii) sell, convey, exchange, dispose of, assign,
transfer, pledge or encumber, or grant any option, warrant or right
with respect to, any of the Pledged Collateral, or agree or contract to
do any of the foregoing except as may be specifically permitted by this
Agreement.
(c) CONSTITUENT DOCUMENTS AND CONTRACTUAL OBLIGATIONS. Without
the prior written consent of the Administrative Agent, which will not be
unreasonably withheld or delayed, Pledgor will not (i) amend its articles of
organization, operating agreement or other constituent documents in any material
respect, (ii) amend any Document to which it is a party in any material respect
or (iii) waive any provision of any of the foregoing.
(d) LIENS. Pledgor will not, and will not knowingly permit any
other Person to, create, incur, assume or suffer to exist any Lien upon or with
respect to any of the Pledged Collateral other than (i) the Lien created in
favor of the Administrative Agent hereunder and (ii) Liens for Taxes if such
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Taxes (A) are not at the time delinquent and thereafter can be paid without
penalty or (B) are being contested in good faith by appropriate proceedings with
reserves established in accordance with GAAP and such Liens have been bonded
over or do not involve any risk that a significant interest in or right to any
Pledged Collateral may be sold, lost or forfeited or that the Lien created by
this Agreement may be impaired. If foreclosure or enforcement of any Lien upon
any of the Pledged Collateral (other than the Administrative Agent's Lien) is at
any time initiated, the Administrative Agent will have the right, but not the
obligation, to take any action it deems appropriate, including payment of the
obligation secured by such Lien, and Pledgor will promptly upon demand reimburse
or arrange to reimburse the Administrative Agent for all reasonable documented
sums expended by the Administrative Agent in taking any such action.
(e) DISTRIBUTIONS. Pledgor will not take any action to cause
Borrower to make, declare or pay any distributions, dividends or returns of
capital, or purchase, redeem or otherwise acquire for value any membership
interests or other ownership interests in Borrower now or hereafter outstanding,
or make any distribution of assets or property to its members as such, except to
the extent permitted by the Loan Documents.
(f) CAPITAL STOCK AND CHANGES IN CONTROL. Except as permitted
pursuant to the terms of the Loan Agreement, Pledgor will not (i) permit
Borrower to cancel or change the terms of the Pledged Interests, (ii) permit
Borrower to authorize, create or issue any additional membership interests or
ownership interests in Borrower, (iii) effect or permit any change of control of
Borrower, except a change of control reflecting the Administrative Agent's
acquisition of any ownership or other interests in Borrower in accordance with
the Documents or (iv) approve or consent to the sale, conveyance, exchange,
disposition, assignment, transfer, pledge or encumbrance of any ownership
interest in Borrower by any Person, except for any sale, conveyance, exchange,
disposition, assignment, transfer, pledge or encumbrance of any ownership
interest in Borrower to or for the benefit of the Administrative Agent in
accordance with the Documents.
Section 9. NATURE OF PLEDGOR'S OBLIGATIONS. Pledgor's
obligations under this Agreement are independent of any obligation of Borrower,
and separate action or actions may be brought and prosecuted against Pledgor
whether or not such action or actions are brought or prosecuted against Borrower
or any other Person and whether or not Borrower or any other Person is joined in
any such action or actions. Upon the occurrence and during the continuance of an
Event of Default (other than an Event of Default caused solely by Borrower's
failure to comply with Section 5.1(p) of the Loan Agreement), the Administrative
Agent may proceed against the Pledged Collateral to collect and recover the full
amount or any portion of the Secured Obligations so due and payable, without
first proceeding against Borrower or against any other security or Collateral
provided by Borrower or any other Person with respect to the Secured
Obligations. Pledgor's obligations hereunder are independent of, and not in
consideration of or contingent upon, the existence of any other guaranty of any
or all of the Secured Obligations, and the release or cancellation of any such
other guaranty will not affect Pledgor's obligations hereunder. Pledgor's
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obligations hereunder are in addition to its obligations under any other
existing or future guaranties or agreements, each of which will remain in full
force and effect until it is expressly modified or revoked by the Administrative
Agent in writing or otherwise in accordance with its terms.
Section 10. AUTHORIZATIONS.
(a) Pledgor irrevocably and unconditionally authorizes the
Administrative Agent to:
(i) approve or consent to any amendment, renewal,
restatement, termination, modification or revision of any Loan
Document;
(ii) modify, amend, supplement or waive any provision
of any Loan Document, including changing the terms and conditions of
disbursement of Loan proceeds, renewing, compromising, extending or
accelerating, or otherwise changing the time for payment of, or
increasing or decreasing the rate of interest on the Loans or any part
thereof;
(iii) advance additional funds, extend additional
credit or afford other financial accommodations to or for Borrower;
(iv) accelerate or postpone the time for performance
of, or otherwise modify, amend, supplement or waive, any of the Secured
Obligations, or grant a forbearance with respect thereto;
(v) take and hold other security for the performance
of any Secured Obligation, accept additional or substituted security
for the same and exchange, enforce, waive, release, compromise, fail to
perfect and sell or otherwise dispose of any such security;
(vi) apply any security for the performance of any
Secured Obligation and direct the order or manner of sale thereof as
the Administrative Agent, in its sole discretion, may determine;
(vii) release or discharge Borrower; and
(viii) accept, add, settle, compromise with, release
or substitute endorsers, guarantors or other obligors of or with
respect to the Secured Obligations.
(b) Pledgor authorizes the Administrative Agent, at any time
and from time to time, without notice to or demand upon Pledgor, irrespective of
any change in the financial condition of Borrower or Pledgor, and without
affecting Pledgor's obligations hereunder, to perform any or all of the
foregoing acts. Pledgor agrees that its obligations hereunder will not be
impaired or affected by the performance by the Administrative Agent of any of
such acts and that Pledgor will not be released by any act or event that might
otherwise be deemed a legal or equitable discharge of a surety, it being the
purpose and intent of the parties to this Agreement that the obligations of
Pledgor hereunder will be absolute and unconditional under any and all
circumstances.
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(c) Nothing in this Section 10 will impair the rights of
Borrower under the Loan Agreement.
Section 11. REINSTATEMENT. This Agreement will continue to be
effective or be reinstated, as the case may be, if at any time any amount
received by the Administrative Agent or the Lenders in respect of the Secured
Obligations is rescinded or must otherwise be restored or returned by the
Administrative Agent and the Lenders upon the insolvency, bankruptcy,
dissolution, liquidation or reorganization of Pledgor or Borrower or upon the
appointment of any intervener or conservator of, or agent or similar official
for, Pledgor or Borrower or any of their respective assets, or otherwise, all as
though such payments had not been made.
Section 12. ELECTION OF REMEDIES. Pledgor acknowledges and
agrees that the exercise by the Administrative Agent of certain rights and
remedies contained in the Loan Documents may affect or eliminate Pledgor's right
of subrogation and reimbursement against Borrower and that Pledgor may therefore
incur a partially or wholly nonreimbursable liability hereunder. It is the
intent and purpose of Pledgor that its obligations under this Agreement will be
absolute, independent and unconditional under all circumstances. Accordingly,
Pledgor (a) expressly authorizes the Administrative Agent to pursue its rights
and remedies with respect to the Secured Obligations in any order or fashion it
deems appropriate, in its sole and absolute discretion, and (b) to the extent
permitted by Applicable Law, waives any defense arising out of the absence,
impairment or loss of any or all rights of recourse, reimbursement, contribution
or subrogation or any other rights or remedies of Pledgor against Borrower, any
other Person or any security, except any defense of payment in full of the
Secured Obligations, whether resulting from an election by the Administrative
Agent to foreclose on any real property security by trustee's sale rather than
judicial foreclosure, or from any other election of rights or remedies by the
Administrative Agent or otherwise.
Section 13. INFORMATION CONCERNING BORROWER. Pledgor
represents and warrants to the Administrative Agent that Pledgor owns all of the
membership interests in Borrower and is in a position to have access to any and
all relevant information bearing upon the present and continuing
creditworthiness of Borrower and the risk that Borrower will be unable to pay
the Secured Obligations when due. Pledgor waives any requirement that the
Administrative Agent advise Pledgor of information known to the Administrative
Agent regarding the financial condition or business of Borrower, or any other
circumstance bearing upon the risk of non-performance of the Secured
Obligations, and Pledgor assumes sole responsibility for keeping informed of
each such condition and circumstance.
Section 14. SUBORDINATION. Pledgor subordinates all present
and future indebtedness of Borrower to Pledgor (the "SUBORDINATED INDEBTEDNESS")
to the Secured Obligations. Upon the occurrence and during the continuance of an
Event of Default (other than an Event of Default caused solely by Borrower's
failure to comply with Section 5.1(p) of the Loan Agreement), the Administrative
12
Agent is authorized and empowered, in its sole and absolute discretion, to
collect, enforce and submit claims in the name and on behalf of Pledgor in
respect of the Subordinated Indebtedness and to apply any amounts received
thereon to the Secured Obligations, and to require Pledgor to collect, enforce
and submit claims in respect of the Subordinated Indebtedness and to remit any
amounts received thereon to the Administrative Agent. All amounts received by
Pledgor on account of any Subordinated Indebtedness after the occurrence and
during the continuance of an Event of Default (other than an Event of Default
caused solely by Borrower's failure to comply with Section 5.1(p) of the Loan
Agreement) will be held in trust for the Administrative Agent and will, upon
request of the Administrative Agent, be paid over to the Administrative Agent as
security for or application to the Secured Obligations (whether such obligations
are unmatured, contingent or otherwise) in accordance with the terms of the Loan
Documents.
Section 15. DIVIDEND AND VOTING RIGHTS.
(a) As long as no Event of Default (other than an Event of
Default caused solely by Borrower's failure to comply with Section 5.1(p) of the
Loan Agreement) has occurred and is continuing, Pledgor will be entitled to
exercise any and all voting and other consensual rights with respect to the
Pledged Collateral for any purpose not inconsistent with the terms of this
Agreement and the other Loan Documents and to receive and retain any and all
dividends and other payments in respect of the Pledged Collateral.
(b) Upon the occurrence and during the continuance of an Event
of Default (other than an Event of Default caused solely by Borrower's failure
to comply with Section 5.1(p) of the Loan Agreement), and after the
Administrative Agent has given notice of such Event of Default to Pledgor, all
rights of Pledgor to exercise voting and other consensual rights with respect to
the Pledged Collateral and to receive dividends and other payments in respect of
the Pledged Collateral will be suspended, and all such rights will immediately
become vested solely in the Administrative Agent or its nominees. After the
occurrence and during the continuance of an Event of Default (other than an
Event of Default caused solely by Borrower's failure to comply with Section
5.1(p) of the Loan Agreement), and after the Administrative Agent has given
notice of such Event of Default to Pledgor, any dividends and other payments in
respect of the Pledged Collateral received by Pledgor will be held in trust for
the Administrative Agent, and Pledgor will keep all such amounts separate and
apart from all other funds and property so as to allow identification of such
amounts as the property of the Administrative Agent, and will deliver such
amounts at such time as the Administrative Agent may reasonably request to the
Administrative Agent in the identical form received, properly endorsed or
assigned when required to enable the Administrative Agent to complete collection
thereof.
Section 16. THE ADMINISTRATIVE AGENT'S RIGHTS UPON DEFAULT.
Upon the occurrence and during the continuance of an Event of Default (other
than an Event of Default caused solely by Borrower's failure to comply with
Section 5.1(p) of the Loan Agreement), the Administrative Agent may, in its sole
13
discretion and in addition to any other right or remedy provided for herein or
otherwise available to it, take any or all of the following actions, in each
case at Pledgor's expense and without prior notice to Pledgor except as required
under Applicable Law:
(a) Declare, without presentment, demand, protest or notice of
any kind (except as specifically required by any Loan Document), all of which
Pledgor hereby expressly waives, the entire amount of Secured Obligations to be
immediately due and payable, whereupon all of such Secured Obligations declared
due and payable will be and become immediately due and payable.
(b) Exercise the powers of attorney set forth in Section 17 of
this Agreement to manage (or designate another Person to manage) the operations,
business and affairs of Borrower to the extent that Pledgor was theretofore
entitled to manage such operations, business and affairs.
(c) Make such payments and do such acts as the Administrative
Agent may deem necessary to protect, perfect or continue the perfection of the
Administrative Agent's Lien on and against the Pledged Collateral, including (i)
paying, purchasing, contesting or compromising any Lien that is, or purports to
be, prior to or superior to the Administrative Agent's Lien, (ii) filing a copy
of this Agreement and other documents in the office in which a record of the
Lien on the Site created by the Mortgage is recorded, (iii) filing any transfer
statement necessary to entitle the transferee to the transfer of record of all
rights of Borrower in the Collateral referenced in such transfer statement and
(iv) commencing, appearing or otherwise participating in or controlling any
action or proceeding purporting to affect the Administrative Agent's Lien.
(d) Foreclose on the Pledged Collateral as herein provided and
in any manner permitted by Applicable Law. Pledgor hereby waives, to the extent
permitted by Applicable Law, notice (other than notices expressly provided for
hereunder) and judicial hearing in connection with the Administrative Agent's
taking possession or commencing any collection, recovery, receipt,
appropriation, repossession, retention, set-off, sale, leasing, licensing,
conveyance, assignment, transfer or other disposition of or realization upon any
or all of the Pledged Collateral, including any and all prior notice (other than
notices expressly provided for hereunder) and hearing for any prejudgment remedy
or remedies and any such right that Pledgor would otherwise have under the
constitution or any statute or other law of the United States of America, the
state of New York or any other state.
(e) Without notice, except as specified below or contemplated
by any Loan Document, sell, lease, license or otherwise dispose of the Pledged
Collateral, or any part thereof, in its then present condition or following any
commercially reasonable preparation or processing. Any such disposition of the
Pledged Collateral may be made by one or more contracts, in one or more parcels,
at public or private disposition at any of the Administrative Agent's offices or
elsewhere, at such time or times, for cash, on credit or for future delivery,
and at such price or prices and upon such other terms that the Administrative
Agent reasonably believes are commercially reasonable. Pledgor agrees that, to
the extent notice of any such disposition is required by Applicable Law, at
14
least 10 Business Days' written notice to Pledgor of the time and place of any
public disposition or the time after which any private disposition is to be made
will constitute reasonable notification. The Administrative Agent may purchase
the Pledged Collateral at a public disposition or at a private disposition. The
Administrative Agent will not be obligated to make any disposition of the
Pledged Collateral regardless of notice of disposition having been given. The
Administrative Agent may adjourn any public or private disposition from time to
time by announcement at the time and place fixed therefor, and such disposition
may, without further notice, be made at the time and place to which it was so
adjourned. The Administrative Agent will incur no liability as a result of the
manner of disposition of the Pledged Collateral, or any part thereof, at any
private disposition conducted in a commercially reasonable manner. Pledgor
hereby waives, to the extent permitted by Applicable Law, any claims against the
Administrative Agent arising by reason of the fact that the price at which the
Pledged Collateral, or any part thereof, may have been disposed of at a private
disposition was less than the price that might have been obtained at a public
disposition or was less than the aggregate amount of the Secured Obligations,
even if the Administrative Agent accepts the first offer received that the
Administrative Agent deems to be commercially reasonable under the circumstances
and does not offer the Pledged Collateral to more than one offeree. To the full
extent permitted by Applicable Law, Pledgor will have the burden of proving that
any such disposition of the Pledged Collateral was conducted in a commercially
unreasonable manner. To the extent permitted by Applicable Law, Pledgor hereby
specifically waives all rights of redemption, stay or appraisal that it has or
may have under any Applicable Law now existing or hereafter enacted. Pledgor
authorizes the Administrative Agent, at any time and from time to time, to
execute, in connection with a disposition of the Pledged Collateral pursuant to
the provisions of this Agreement, any endorsements, assignments or other
instruments of conveyance or transfer with respect to the Pledged Collateral.
(f) In accordance with Applicable Law, accept the Pledged
Collateral in full or partial satisfaction of the Secured Obligations.
(g) Exercise in respect of the Pledged Collateral, in addition
to other rights and remedies provided for herein or otherwise available to it,
all the rights and remedies of a secured party after default under the UCC and
any relevant Applicable Law in any jurisdiction.
Section 17. POWER OF ATTORNEY.
(a) Upon the occurrence and during the continuance of an Event
of Default (other than an Event of Default caused solely by Borrower's failure
to comply with Section 5.1(p) of the Loan Agreement), Pledgor irrevocably
constitutes and appoints the Administrative Agent, with full power of
substitution, as Pledgor's true and lawful attorney-in-fact, in the name of
Pledgor or the Administrative Agent or otherwise, and at the expense of Pledgor,
to take any or all of the following actions, without notice to or the consent of
Pledgor:
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(i) take any or all of the actions described in
Section 15 and Section 16 of this Agreement, and exercise any other
right or power granted to the Administrative Agent under this Agreement
or any other Pledgor Document;
(ii) transfer to, or register in the name of, the
Administrative Agent or its nominees any or all of the Pledged
Collateral;
(iii) perform or comply with any obligation or
agreement that constitutes part of the Pledged Collateral;
(iv) endorse or execute and deliver any check, draft,
note, acceptance or instrument, document, contract, agreement, receipt,
release, xxxx of lading, invoice, endorsement, assignment, xxxx of
sale, deed or instrument of conveyance or transfer constituting or
relating to any Pledged Collateral;
(v) pay or discharge Taxes and Liens which are levied
or placed on the Pledged Collateral and which are or are purported to
be superior to the Administrative Agent's Lien;
(vi) assert, institute, file, defend, settle,
compromise or adjust any claim constituting or relating to any Pledged
Collateral; and
(vii) do any and all things necessary and proper to
carry out the purposes of this Agreement or any other Pledgor Document.
(b) Pledgor recognizes and agrees that the power of attorney
granted pursuant to this Section 17 is coupled with an interest and is not
revocable. Pledgor ratifies and confirms all actions taken by the Administrative
Agent or its agents pursuant to and in accordance with this power of attorney;
PROVIDED that no such ratification will apply to acts of or on behalf of the
Administrative Agent that constitute gross negligence or willful misconduct.
Section 18. OTHER RIGHTS OF THE ADMINISTRATIVE AGENT.
(a) The Administrative Agent will have, with respect to the
Pledged Collateral, in addition to the rights and remedies set forth in this
Agreement, all of the rights and remedies available to a secured party under
Applicable Law and under the UCC as in effect in the State of New York or the
State of Delaware, whichever is applicable, as if such rights and remedies were
fully set forth in this Agreement.
(b) The Administrative Agent may at any time and from time to
time release or relinquish any right, remedy or Lien it has with respect to a
particular item of Pledged Collateral without thereby releasing, relinquishing
or in any way affecting its rights, remedies or Lien with respect to any other
item of Pledged Collateral.
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Section 19. REASONABLE CARE; STANDARDS FOR EXERCISING
REMEDIES; MARSHALING COLLATERAL.
(a) The Administrative Agent will exercise the same degree of
care hereunder as it exercises or would exercise in connection with similar
transactions for its own account, but in all events reasonable care. The
Administrative Agent will be deemed to have exercised reasonable care in the
custody and preservation of the Pledged Collateral in its possession if the
Pledged Collateral is accorded treatment substantially equal to that which the
Administrative Agent accords or would accord collateral held by the
Administrative Agent in similar transactions for its own account; PROVIDED, that
it is expressly understood that the Administrative Agent will have no
responsibility for taking any steps to preserve rights against any parties with
respect to the Pledged Collateral. In furtherance of the foregoing, to the
extent Applicable Law imposes on the Administrative Agent an obligation to
exercise remedies in a commercially reasonable manner, Pledgor acknowledges and
agrees that it is not commercially unreasonable for the Administrative Agent (i)
to fail to incur expenses reasonably deemed significant by the Administrative
Agent to prepare the Pledged Collateral for disposition, (ii) to fail to obtain
third-party consents for access to Pledged Collateral to be disposed of, or to
obtain or, if not required by other Applicable Law, fail to obtain governmental
or third-party consents for the collection or disposition of Pledged Collateral
to be collected or disposed of, (iii) to fail to exercise collection remedies
against account debtors or other Persons obligated on Pledged Collateral or to
remove Liens or encumbrances on or any adverse claims against Pledged
Collateral, (iv) to exercise collection remedies against account debtors and
other Persons obligated on Pledged Collateral directly or through the use of
collection agencies and other collection specialists, (v) to advertise
dispositions of Pledged Collateral through publications or media of general
circulation, whether or not the Pledged Collateral is of a specialized nature,
(vi) to contact other Persons, whether or not in the same business as Pledgor,
in connection with expressions of interest in acquiring all or any portion of
the Pledged Collateral, (vii) to hire one or more professional auctioneers to
assist in the disposition of Pledged Collateral, whether or not the Pledged
Collateral is of a specialized nature, (viii) to dispose of Pledged Collateral
by utilizing internet sites that provide for the auction of assets of the types
included in the Pledged Collateral or that have reasonable capability of doing
so, or that match buyers and sellers of assets, (ix) to dispose of assets in
wholesale rather than retail markets, (x) to disclaim disposition warranties,
(xi) to purchase insurance or credit enhancements to insure the Administrative
Agent against the risk of loss, collection or disposition of Pledged Collateral
or (xii) to the extent deemed appropriate by the Administrative Agent, to obtain
the services of other brokers, investment bankers, consultants and other
professionals to assist the Administrative Agent in the collection or
disposition of any of the Pledged Collateral.
(b) Without limiting the generality of the foregoing and
except as otherwise provided by Applicable Law, the Administrative Agent will
not be required to marshal any of the Pledged Collateral, or to resort to any
item of Pledged Collateral in any particular order, and all of the
Administrative Agent's rights hereunder and in respect of such Pledged
Collateral will be cumulative and in addition to all other rights, however
existing or arising. To the extent that Pledgor lawfully may, Pledgor hereby (i)
agrees that it will not invoke any Law relating to the marshaling of collateral
17
that might cause delay in or impede the enforcement of the Administrative
Agent's rights under this Agreement or under any other instrument evidencing any
of the Secured Obligations or under which any of the Secured Obligations is
outstanding or by which any of the Secured Obligations is secured or guaranteed
and (ii) irrevocably waives the benefits of all laws and any and all rights to
equity of redemption or other rights of redemption that it may have in equity or
at law with respect to the Pledged Collateral.
Section 20. APPLICATION OF PROCEEDS. Any cash held by the
Administrative Agent as Pledged Collateral and all cash proceeds received by the
Administrative Agent from any realization upon Pledged Collateral may, in
accordance with this Agreement and the other Loan Documents and in the sole
discretion of the Administrative Agent, be held by the Administrative Agent as
collateral security for the payment of the Secured Obligations or applied by the
Administrative Agent in accordance with the Loan Agreement and the Loan
Documents.
Section 21. THE ADMINISTRATIVE AGENT'S DUTIES. The grant to
the Administrative Agent under this Agreement of any right or power does not
impose upon the Administrative Agent any duty to exercise such right or power.
The Administrative Agent will have no obligation to take any steps to preserve
any claim or other right against any Person or with respect to any Pledged
Collateral.
Section 22. EXCULPATORY PROVISIONS; RELIANCE BY THE
ADMINISTRATIVE AGENT.
(a) EXCULPATORY PROVISIONS. Neither the Administrative Agent
nor any of its officers, directors, employees, agents, attorneys-in-fact or
Affiliates will be liable to Pledgor for any action taken or omitted to be taken
by it under or in connection with this Agreement or any other Loan Document, or
responsible in any manner to any Person for any recitals, statements,
representations or warranties made by Pledgor or any officer thereof contained
in this Agreement or any other Loan Document or in any certificate, report,
statement or other document referred to or provided for in, or received by the
Administrative Agent under or in connection with, this Agreement or any other
Loan Document or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Loan Document or
for any failure of Borrower or Pledgor, as applicable, to perform any of the
Obligations. The Administrative Agent will not be under any obligation to any
Person to ascertain or to inquire as to the observance or performance of any of
the agreements contained in, or conditions of, this Agreement or any other Loan
Document or to inspect the properties or records of Pledgor. Notwithstanding
anything to the contrary contained herein, neither the Administrative Agent nor
any of its officers, directors, employees, agents, attorneys-in-fact or
Affiliates will be exonerated from any liability arising from its or their own
gross negligence or willful misconduct.
(b) RELIANCE BY THE ADMINISTRATIVE AGENT. The Administrative
Agent will be fully protected in relying upon any note, writing, resolution,
notice, consent, certificate, affidavit, letter, electronic mail, cablegram,
telegram, telecopy, telex or teletype message, statement, order or other
document or conversation believed by it in good faith to be genuine and correct
18
and to have been signed, sent or made by the proper Person or Persons and upon
advice and statements of legal counsel (including without limitation counsel to
Pledgor and counsel to Borrower), independent accountants and other experts
selected by the Administrative Agent. The Administrative Agent will have no
obligation to any Person to act or refrain from acting or exercising any of its
rights under this Agreement; PROVIDED, that anything to the contrary contained
herein notwithstanding, the Administrative Agent will be liable for its own
gross negligence or willful misconduct.
Section 23. COUNTERPARTS. This Agreement may be executed in
any number of 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 24. INTEGRATION. This Agreement and the other Pledgor
Documents contain the complete agreement between Pledgor and the Administrative
Agent with respect to the matters contained herein and therein and supersede all
prior commitments, agreements and understandings, whether written or oral, with
respect to the matters contained herein and therein.
Section 25. SEVERABILITY. Any provision of this Agreement or
any other Pledgor Document that is invalid or prohibited in any jurisdiction
will, as to such jurisdiction, be ineffective and severable from the rest of
this Agreement or such other Pledgor Document 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 such other Pledgor Document, or of such
provision in other jurisdictions. The parties agree to replace any provision
that is ineffective by operation of this Section 25 with an effective provision
that as closely as possible corresponds to the spirit and purpose of such
ineffective provision and this Agreement and the other Pledgor Documents as a
whole.
Section 26. FURTHER ASSURANCES. At any time and from time to
time upon the request of the Administrative Agent, Pledgor will execute and
deliver such further documents and instruments and do such other acts as the
Administrative Agent may reasonably request in order to effect fully the
purposes of this Agreement, to create, perfect, maintain and preserve the
Administrative Agent's First Priority Lien on the Pledged Collateral, to
facilitate any sale of or other realization upon Pledged Collateral in
accordance with this Agreement and the other Loan Documents, to make any sale of
or other realization upon Pledged Collateral in accordance with this Agreement
and the other Loan Documents valid, binding and in compliance with Applicable
Law, and to provide for the payment of the Secured Obligations in accordance
with the terms of the Loan Documents (except, in each case, to the extent that
this Agreement specifically provides that such action is not required). Pledgor
will execute, acknowledge where appropriate and deliver, and cause to be
executed, acknowledged where appropriate and delivered, from time to time
promptly at the request of any successor Administrative Agent hereunder, such
restatements and/or amendments to this Agreement or other instruments or
documents as, in the reasonable determination of the successor Administrative
Agent, are necessary to carry out the intent and purpose of this Agreement.
19
Pledgor irrevocably constitutes and appoints the Administrative Agent, with full
power of substitution, as Pledgor's true and lawful attorney-in-fact, in the
name and on behalf of Pledgor, and at Pledgor's expense, to execute and deliver
any documents and instruments and to do and to perform any acts referred to in
this Section 26, upon the occurrence and during the continuance of an Event of
Default (other than an Event of Default caused solely by Borrower's failure to
comply with Section 5.1(p) of the Loan Agreement) and in the event that Pledgor
does not do so promptly upon the Administrative Agent's request therefor. This
power of attorney is a power coupled with an interest and cannot be revoked.
Section 27. AMENDMENTS AND WAIVERS. No amendment or waiver of
any provision of this Agreement, or consent to any departure by Pledgor from the
terms hereof, will be effective unless it is in writing and signed by Pledgor
and the Administrative Agent. A waiver or consent granted pursuant to this
Section 27 will be effective only in the specific instance and for the specific
purpose for which it is given.
Section 28. NO WAIVER; REMEDIES CUMULATIVE. The waiver of any
right, breach or default under this Agreement by the Administrative Agent must
be made specifically and in writing. Subject to the foregoing, no failure on the
part of the Administrative Agent to exercise, and no forbearance or delay in
exercising, any right under this Agreement will operate as a waiver thereof; no
single or partial exercise of any right under this Agreement will preclude any
other or further exercise thereof or the exercise of any other right; and no
waiver of any breach of or default under any provision of this Agreement will
constitute or be construed as a waiver of any subsequent breach of or default
under that or any other provision of this Agreement. No notice to or demand upon
Pledgor will entitle Pledgor to any further, subsequent or other notice or
demand in similar or any other circumstances. Each of the rights and remedies of
the Administrative Agent under this Agreement is cumulative and not exclusive of
any other right or remedy provided or existing by agreement or under Applicable
Law.
Section 29. SUCCESSORS AND ASSIGNS.
(a) This Agreement will be binding upon and inure to the
benefit of the parties hereto and all future holders of the Notes and their
respective successors and permitted assigns. Pledgor will execute, acknowledge
where appropriate and deliver, and cause to be executed, acknowledged where
appropriate and delivered, from time to time promptly at the request of any
successor Administrative Agent hereunder such restatements and/or amendments to
this Agreement or other instruments or documents as in the reasonable
determination of such successor Administrative Agent are necessary to carry out
the intent and purpose of this Agreement. In the event of any assignment or
transfer by any instrument evidencing all or any part of the Obligations, the
holder of such instrument will be entitled to the benefits of this Agreement to
the extent of the Secured Obligation so assigned or transferred.
(b) Pledgor has no right to assign its rights or interest, or
delegate its duties or obligations, under this Agreement without the prior
written consent of the Administrative Agent, which consent will not be
unreasonably withheld or delayed.
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(c) The Administrative Agent has the right to transfer,
assign, pledge and grant participations in its rights and interests in and under
this Agreement as described in Section 8.7(c) of the Loan Agreement.
Section 30. NO AGENCY. Pledgor is not a representative of the
Administrative Agent, and is not authorized to act on behalf of or bind the
Administrative Agent in any way.
Section 31. NO THIRD PARTY BENEFICIARIES. Except as otherwise
expressly stated herein, this Agreement is intended to be solely for the benefit
of the parties hereto and their respective successors and permitted assigns and
is not intended to and will not confer any rights or benefits on any third
party.
Section 32. [RESERVED.]
Section 33. INDEMNIFICATION. Pledgor will defend, indemnify
and hold harmless the Administrative Agent and its officers, directors,
employees, agents and advisors from and against any and all costs, expenses,
disbursements, liabilities, obligations, losses, damages, injunctions,
judgments, suits, actions, causes of action, fines, penalties, claims and
demands, of every kind or nature (including without limitation reasonable
attorneys' fees and expenses) (herein collectively called the "INDEMNIFIED
LIABILITIES") that are occasioned by or result from or in connection with any of
the terms, agreements or covenants to be performed by Pledgor or any party
thereto under this Agreement, other than Indemnified Liabilities to the extent
resulting from the Administrative Agent's gross negligence or willful
misconduct; PROVIDED that, this indemnity will expire three (3) years after the
repayment in full of the Obligations.
Section 34. 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 35. WAIVER OF JURY TRIAL. PLEDGOR AND ADMINISTRATIVE
AGENT, AS BETWEEN THEM, WAIVE ANY RIGHTS THEY MAY HAVE TO A JURY TRIAL OF ANY
CLAIM OR CAUSE OF ACTION BASED ON OR ARISING FROM THIS AGREEMENT, ANY
TRANSACTION CONTEMPLATED HEREBY OR EFFECTED PURSUANT HERETO, ANY DEALINGS OR
COURSE OF DEALING BETWEEN THEM RELATING IN ANY WAY TO THE SUBJECT MATTER OF THIS
AGREEMENT OR ANY STATEMENTS OR ACTIONS OF ANY OF THEM OR THEIR AFFILIATES. Each
of the parties acknowledges and agrees that this waiver is a material inducement
to enter into the business relationship contemplated by this Agreement and that
each has relied on this waiver in entering into this Agreement to which it is a
party and will continue to rely on this waiver in its future dealings with the
other parties. The scope of this waiver is intended to be all-encompassing, and
this waiver will apply to all Claims, of any nature whatsoever, whether deriving
21
from contract, arising by law, based on tort or otherwise. PLEDGOR AND
ADMINISTRATIVE AGENT HAVE MADE THIS WAIVER KNOWINGLY AND VOLUNTARILY, AND THIS
WAIVER WILL BE IRREVOCABLE. THIS WAIVER WILL ALSO APPLY TO ALL AMENDMENTS,
SUPPLEMENTS, RESTATEMENTS, EXTENSIONS AND MODIFICATIONS OF THIS AGREEMENT. In
the event of litigation, relevant portions of this Agreement may be filed as a
written consent to a trial by the court.
Section 36. CONSENT TO JURISDICTION. Pledgor hereby
irrevocably submits to the jurisdiction of any New York state or United States
federal court sitting in the Borough of Manhattan over any action or proceeding
arising out of or relating to any Claim, and Pledgor hereby irrevocably agrees
that all Claims in respect of such action or proceeding may be heard and
determined in such New York state or United States federal court. Pledgor
irrevocably waives any objection that it may now or hereafter have to the laying
of venue in such forums and agrees not to plead or claim that any such action or
proceeding brought in any such New York state or United States federal court has
been brought in an inconvenient forum. Pledgor hereby irrevocably appoints the
Process Agent as its agent to receive on behalf of Pledgor and its property
service of copies of the summons and complaint and any other process that may be
served in any such action or proceeding. Such service may be made by mailing or
delivering a copy of such process to Pledgor at the address of the Process Agent
and Pledgor hereby irrevocably authorizes and directs the Process Agent to
accept such service on its behalf. In addition and as an alternative method of
service, Pledgor also irrevocably consents to the service of any and all process
in any such action or proceeding by the mailing of copies of such process to
Pledgor at its address set forth in Section 38. Pledgor agrees that a final
judgment in any such action or proceeding will be conclusive and may be enforced
in other jurisdictions by suit on the judgment or in any other manner provided
by Law. Nothing in this Section 36 will affect the right of the Administrative
Agent to serve legal process in any other manner permitted by Law or affect the
right of the Administrative Agent to bring any action or proceeding against
Pledgor or its property in the courts of any other jurisdiction. If for any
reason the Process Agent ceases to be available to act as Process Agent, Pledgor
agrees promptly upon receiving knowledge of that fact to appoint a replacement
Process Agent satisfactory to the Administrative Agent.
Section 37. CONFIDENTIALITY. The Administrative Agent and
Pledgor agree to use reasonable efforts to keep confidential the Documents and
each document and all information delivered to them by the other party to this
Agreement and marked "confidential." Notwithstanding the foregoing, each party
will be permitted to disclose confidential documents and information (a) to
another party, (b) to its Affiliates, advisers and consultants, (c) to
prospective participants or prospective purchasers or transferees of interests
in Notes and their respective affiliates, advisers and consultants, (d) to any
Government Instrumentality having jurisdiction over such party, (e) in response
to any subpoena or other legal process or to comply with Law, (f) to the extent
reasonably required in connection with any litigation to which such party is a
party, (g) to the extent reasonably required in connection with the exercise of
its rights or remedies under any Loan Document or (h) to the extent such
documents or information already have been publicly disclosed by another Person.
Each prospective participant, purchaser and transferee and each adviser and
consultant to which confidential documents or information is disclosed will be
required to execute a confidentiality agreement containing the provisions of
this Section 37.
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Section 38. 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 an internationally 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 Business Day of delivery if
delivered personally, three (3) days after delivery to the courier if
transmitted by courier, or the date of transmission with telephone 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.
For Pledgor: Pacific Ethanol Holding Co. LLC
0000 X. Xxxx Xxxxxx
Xxxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
With a copy to: Xxxxxx & Xxxxxxx LLP
000 Xxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxxxxx, Esq.
Facsimile: (000) 000-0000
For the Administrative
Agent: Xxxxxx United Capital, A Division of TD
Banknorth, N.A.
000 Xxxx Xxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xx. Xxxxxx X. Xxxxxx, Xx.
Facsimile: (000) 000-0000
Section 39. RELEASE OF LIENS. Upon the payment or satisfaction
in full of all Secured Obligations (exclusive of any indemnification or other
obligations which are expressly stated in any Loan Document to survive
termination of the Loan Documents), or as otherwise mutually agreed, the
Administrative Agent will, promptly upon the written request of Pledgor and at
Pledgor's expense, take all reasonable measures, or authorize the taking of such
measures, to effect or evidence the release of the Pledged Collateral from the
Lien created hereby.
Section 40. WAIVER OF DEFENSES. To the extent permitted by
Applicable Law, Pledgor unconditionally and irrevocably waives:
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(a) any right to require the Administrative Agent to proceed
against Borrower, to proceed against any other Person, to proceed against or
exhaust any security held by the Administrative Agent or to pursue any other
remedy in the Administrative Agent's power before proceeding against the Pledged
Collateral or Pledgor or exercising the Administrative Agent's rights and
remedies under Pledgor Documents;
(b) any defense arising by reason of any disability or other
similar defense of Borrower or by reason of any invalidity, ineffectiveness or
unenforceability of any or all of the Secured Obligations or any Loan Document;
(c) diligence, presentment, demand for performance, notice of
nonperformance, protest, notice of protest, notice of dishonor, notice of the
creation or incurring of new or additional indebtedness of Borrower to the
Administrative Agent, notice of acceptance of this Agreement and notices of any
other kind whatsoever;
(d) the filing of any claim with any court in the event of a
receivership or bankruptcy;
(e) the benefit of any statute of limitations affecting
Pledgor's obligations under any Pledgor Document or the enforcement thereof;
(f) any defense based upon any taking, modification,
impairment or release of any collateral or guaranty for any Secured Obligation,
or any failure to perfect any security interest in or any other act or omission
with respect to any collateral or guaranty securing payment or performance of
any Secured Obligation;
(g) any defenses or benefits that may be derived from or
afforded by Applicable Law that limit the disability of or exonerate guarantors
or sureties, or that may conflict with the terms of this Agreement; and
(h) any offset or counterclaim or other right, defense or
claim based on, or in the nature of, any obligation now or hereafter owed to
Pledgor by Borrower or the Administrative Agent.
[THE REMAINDER OF THIS PAGE WAS LEFT BLANK INTENTIONALLY.]
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IN WITNESS WHEREOF, the parties hereto, intending to be
legally bound, have caused this Member Interest Pledge Agreement to be signed on
the date first above written.
PACIFIC ETHANOL HOLDING CO. LLC,
as Pledgor
By /S/ XXXX XXXXXX
------------------------------------------------
Name:
Title:
XXXXXX UNITED CAPITAL, A DIVISION OF TD BANKNORTH,
N.A., as the Administrative Agent
By /S/ XXXXXX X. XXXXXX, XX.
------------------------------------------------
Name: Xxxxxx X. Xxxxxx, Xx.
Title: Senior Vice President
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