EXHIBIT 10.48
ASSIGNMENT AND SECURITY AGREEMENT
This ASSIGNMENT AND SECURITY AGREEMENT, dated April 13, 2006
(this "AGREEMENT"), is by and between PACIFIC ETHANOL MADERA LLC, a Delaware
limited liability company ("BORROWER"), and ▇▇▇▇▇▇ UNITED CAPITAL, A DIVISION OF
TD BANKNORTH, N.A., a national banking association, as the Administrative Agent
for 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 :
- - - - - - - - - -
WHEREAS, 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 Borrower 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 to the Loan Agreement, and the rules of construction set forth in
such Schedule X govern this Agreement. For purposes of this Agreement, all other
undefined terms used herein, whether capitalized or not, that are defined in
Article 8 or Article 9 of the UCC, will have their respective meanings as
therein defined. 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. GRANT OF SECURITY INTEREST.
(a) COLLATERAL. As security for the prompt and complete
payment and performance when due (whether at stated maturity, by acceleration or
otherwise) of the Obligations (as defined below) now existing or hereafter
arising, and howsoever evidenced, Borrower hereby collaterally assigns, conveys,
mortgages, pledges, hypothecates and transfers to the Administrative Agent on
behalf of the Lenders, and grants and creates a lien on and First-Priority
security interest (the "SECURITY INTEREST") in favor of the Administrative Agent
on behalf of the Lenders in, all right, title and interest of Borrower in, to
and under the following, whether now existing or hereafter arising or acquired
(collectively, the "COLLATERAL"):
(i) each Project Document to which Borrower is or becomes a
party or by which it is bound (and any and all accounts, general
intangibles, instruments and contract rights arising thereunder or
related thereto), including the Project Documents listed on Schedule A
hereto, as each may be amended, modified or supplemented from time to
time (such Project Documents, as amended, supplemented or otherwise
modified, being individually referred to herein as an "ASSIGNED
AGREEMENT" and collectively referred to herein as the "ASSIGNED
AGREEMENTS"), including in each case, (A) all rights of Borrower, now
or hereafter existing, to receive moneys thereunder, whether or not
earned by performance or for property that has been or is to be sold,
leased, licensed, assigned or otherwise disposed of pursuant to the
Assigned Agreements, (B) all rights of Borrower, now or hereafter
existing, to receive proceeds of any performance, payment or completion
bond, insurance, indemnity, warranty or guaranty with respect to the
Assigned Agreements, (C) all claims of Borrower, now or hereafter
existing, for damages arising out of or for breach of or default under
the Assigned Agreements, (D) all supporting obligations in favor of
Borrower and incurred pursuant to the Assigned Agreements, (E) all
rights of Borrower, now or hereafter existing, to request that funds be
disbursed in the form of loans or equity contributions under the
Assigned Agreements, and (F) all rights of Borrower, now or hereafter
existing, to take any action to terminate, amend, supplement, modify or
waive performance of the Assigned Agreements, to perform thereunder and
to compel performance and otherwise exercise all remedies thereunder;
PROVIDED, that unless 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) has occurred and is continuing and the
Administrative Agent has given notice to Borrower, Borrower may
exercise all rights, interests and benefits under the Assigned
Agreements in any lawful manner not prohibited by this Agreement, the
Loan Agreement or any of the other Loan Documents;
(ii) all investment property, including certificated
securities, uncertificated securities, securities accounts, financial
assets and security entitlements, all promissory notes and other
indebtedness payable to Borrower, and all deposit accounts and all
other bank accounts and sub-accounts, including without limitation the
Construction Draw Account, the Project Revenues Account, the Debt
Service Account, the Debt Service Reserve Account and any other
Security Accounts established and maintained by Disbursement Agent or
the DSRA Agent in the name of the Administrative Agent in accordance
with Article II of the Disbursement Agreement (each of the securities
accounts, deposit accounts, other bank accounts and sub-accounts being
individually referred to herein as an "ACCOUNT" and collectively
referred to herein as the "ACCOUNTS"), together with all funds, cash,
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monies, financial assets, investments, instruments, certificates of
deposit, promissory notes and any other property (including any
Permitted Investments deposited therein or credited thereto) at any
time on deposit therein or credited to any of the foregoing, all rights
to payment or withdrawal therefrom and all income, profits, gains and
interest thereon;
(iii) all Approvals now or hereafter held in the name or for
the benefit of Borrower (it being understood that in no event will the
security interest and Lien granted under this Section 2(a) attach to
any such Approval if the grant of such security interest or Lien is
prohibited by Law or would constitute or result in either (x) the
voiding, invalidation or unenforceability of such Approval or (y) in a
breach or termination pursuant to the terms of, or a default under,
such Approval);
(iv) all equipment, accounts, agreements, contract rights,
inventory (including fuel supplies, corn and other feedstocks, ethanol,
dried and wet distillers grain solubles, and other products), goods,
accessions, chattel paper, electronic chattel paper, documents,
instruments, letter-of-credit rights, promissory notes, general
intangibles, payment intangibles, software and related licenses,
supporting obligations, commercial tort claims, fixtures, trade
fixtures, money, after-acquired property and other assets owned by
Borrower or in which Borrower has rights, including the improvements,
equipment and fixtures associated with the Project, the Site, and the
Grain Facilities, designs, plans and specifications relating to the
Project, the Site, and the Grain Facilities, all pollution allowances,
offsets and similar rights under the Clean Air Act Amendments of 1990
and any implementing Law, and any right, title or interest of Borrower
under any insurance, indemnity, warranty or guaranty and any rents,
revenues, incomes and profits (including payments and the rights to
receive such payments from Government Instrumentalities);
(v) all proceeds, products, offsprings, rents, profits,
income, benefits, substitutions, replacements and accessions of and to
any and all of the foregoing Collateral, including whatever is received
upon any collection, exchange, sale or other disposition, or
distribution on account of any of the Collateral, any property into
which any of the Collateral is converted or any rights arising out of
the Collateral, whether cash or non-cash proceeds and any and all other
amounts paid or payable or in connection with any of the Collateral;
and
(vi) to the extent not included in the foregoing, any other
personal or fixture property of Borrower, of every kind and nature,
whether now existing or hereafter arising or acquired;
PROVIDED, that (A) any distributions, payments or releases (whether in the form
of cash, instruments or otherwise) properly made by or to Borrower pursuant to
Articles III and IV of the Disbursement Agreement will be released from the
Security Interest granted hereunder and will no longer be part of the Collateral
upon the making of such distribution and (B) any physical asset that is the
subject of a sale, transfer or other disposition of the Collateral permitted by
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the Loan Agreement will be released from the Security Interest granted hereunder
and will no longer be part of the Collateral upon consummation of such sale or
other disposition. The Collateral is intended to include all of the
above-described assets, wheresoever the same may be now or hereafter located.
(b) SUFFICIENCY OF COLLATERAL DESCRIPTION. It is the intention
of the parties hereto that the description of the Collateral set forth in
Section 2(a) be sufficient, together with the description of the Site as set
forth in the Mortgage, to enable the Administrative Agent, upon exercise of its
remedies set forth in this Agreement, the Mortgage and the Pledge Agreement, to
take possession of, and foreclose upon, all of the right, title and interest of
Borrower in and to, without limitation, the Project, the Site, the Grain
Facilities, the Project Documents, the Approvals, the Accounts, any insurance
obtained by Borrower, any monies payable to or accruing in favor of Borrower and
any and all other real property and personal property of Borrower, tangible and
intangible, used or usable in connection therewith, and to enable the
Administrative Agent or its designee to operate, sell, lease, license or
otherwise dispose of the entire interest of Borrower in and to the Project,
Site, and the Grain Facilities and such other assets or any part thereof, in
each case 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 subject to the limitations set
forth in this Agreement and the other Loan Documents; PROVIDED, that the
Collateral is assigned to the Administrative Agent solely as security and,
subject to Section 14 below, the Administrative Agent will have no duty,
liability or obligation whatsoever with respect to any of the Collateral, unless
the Administrative Agent so elects in a written notice delivered to Borrower.
(c) OBLIGATIONS. This Agreement secures, in accordance with
the provisions hereof, the following obligations, whether now existing or
hereafter arising (collectively, the "OBLIGATIONS"):
(i) payment and performance of each and every obligation,
indebtedness, covenant and agreement of Borrower, now or hereafter
existing, contained in the Loan Agreement or any other Loan Document,
in each case whether for principal, interest, premium, fees, expenses
or otherwise pursuant thereto, and any amendments or supplements
thereto, extensions or renewals thereof or replacements therefor;
(ii) payment of all sums advanced in accordance herewith or in
accordance with any other Loan Document by or on behalf of the
Administrative Agent (A) to protect, retake, hold or prepare for sale,
lease, license or other disposition of, or realize upon, any of the
Collateral purported to be covered hereby or thereby, including those
fees and expenses described in Section 8.11 of the Loan Agreement or
(B) incurred due to the failure of Borrower to perform or observe any
provision of any Assigned Agreement or any Loan Document, with interest
thereon at a rate PER ANNUM equal to the Default Rate from the date of
demand therefor;
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(iii) performance of every obligation, covenant and agreement
of Borrower contained in any agreement now or hereafter executed by
Borrower that recites that the obligations thereunder are secured by
this Agreement or any other Security Document; and
(iv) without duplication of amounts described in clauses (i)
and (ii) of this Section 2(c), payment of all other sums, with interest
thereon at a rate PER ANNUM equal to the Default Rate from the date of
demand therefor, that becomes due and payable to or for the benefit of
the Administrative Agent pursuant to the terms of this Agreement or any
other Loan Document; in each case whether direct or indirect, joint or
several, absolute or contingent, liquidated or unliquidated, now or
hereafter existing, renewed or restructured, reinstated, created or
incurred and including all indebtedness of Borrower under any
instrument now or hereafter evidencing or securing any of the foregoing
(including, in each and every case, the payment of amounts that would
become due but for the operation of the automatic stay under Section
362(a) of the Bankruptcy Code, 11 U.S.C. ss. 362(a)).
Section 3. PERFECTION OF COLLATERAL. In order to ensure the
attachment, perfection and First-Priority of, and the ability of the
Administrative Agent to enforce, the Security Interest in the Collateral,
Borrower agrees, in each case, at Borrower's sole expense, to take, or authorize
to be taken, the following actions with respect to the Collateral:
(a) FINANCING STATEMENTS. Borrower hereby authorizes the
Administrative Agent to file or cause to be filed, registered and recorded all
financing statements, notices, instruments, agreements, consents and other
documents as are necessary in the reasonable judgment of the Administrative
Agent or required by Law to create, preserve, perfect or validate the Security
Interest in favor of the Administrative Agent. Each such document will be
properly filed, registered or recorded in each jurisdiction in which the filing,
registration or recordation thereof is necessary or required by Law to grant in
favor of the Administrative Agent a perfected security interest in the
Collateral. Without limiting the foregoing, Borrower consents that UCC financing
statements may be filed describing the Collateral as "all assets" or "all
personal property" of Borrower (provided, that no such description shall be
deemed to modify the description of the Collateral set forth in Section 2(a)
hereof).
(b) DELIVERY OF COLLATERAL. With respect to all instruments,
promissory notes, tangible chattel paper, certificated securities and negotiable
documents, whether now existing or hereinafter acquired by or arising in favor
of Borrower, Borrower will deliver the same to the Administrative Agent pursuant
to the terms hereof and of the other Loan Documents. All such instruments,
promissory notes, tangible chattel paper, certificated securities and negotiable
documents will be in suitable form for transfer by delivery or otherwise, or
will be accompanied by duly executed instruments of transfer or assignment in
blank, all in form and substance reasonably satisfactory to the Administrative
Agent, in order to grant in favor of the Administrative Agent a perfected
security interest in such instruments, promissory notes, tangible chattel paper,
certificated securities and negotiable documents; PROVIDED, that unless an Event
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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, Borrower may retain for collection in the ordinary course of
business any instruments, promissory notes, tangible chattel paper and
negotiable documents received by Borrower and the Administrative Agent will,
promptly upon request of Borrower, make appropriate arrangements for making any
instrument, promissory note, tangible chattel paper or negotiable document
pledged by Borrower available to Borrower for purposes of presentation,
collection or renewal.
(c) COLLATERAL IN POSSESSION OF BAILEE; PERFECTION. If any
goods with an aggregate fair market value in excess of $50,000 that Borrower
owns or in which it has a right are now or at any time in the possession of a
bailee, Borrower will promptly notify the Administrative Agent thereof and will
use commercially reasonable efforts to obtain an acknowledgment from such
bailee, in form and substance reasonably satisfactory to the Administrative
Agent, that such bailee holds such Collateral for the benefit of the
Administrative Agent and, if 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) has occurred and is continuing, will act upon instructions from the
Administrative Agent without the further consent of Borrower. If for any reason
the Administrative Agent cannot perfect a Security Interest in the goods in
possession of a bailee, then upon written instructions from the Administrative
Agent, Borrower will promptly transport such items to the Site or to another
location with respect to which the Administrative Agent is or will be able to so
perfect its Security Interest. After written notice from and consultation with
the Administrative Agent, Borrower will obtain such additional insurance on the
Collateral stored at any location other than the Site as the Administrative
Agent reasonably determines is necessary to protect the Administrative Agent's
interests.
(d) ELECTRONIC CHATTEL PAPER AND TRANSFERABLE RECORDS. With
respect to all electronic chattel paper or any "transferable record," as that
term is defined in Section 201 of the Federal Electronic Signatures in Global
and National Commerce Act or in Section 16 of the Uniform Electronic
Transactions Act as in effect in any relevant jurisdiction, now or hereafter
acquired by or arising in favor of Borrower, Borrower will promptly notify the
Administrative Agent thereof and, at the request of the Administrative Agent,
will take such action as the Administrative Agent may reasonably request to vest
in the Administrative Agent "control" (as defined in the UCC) of such electronic
chattel paper or "control" under Section 201 of the Federal Electronic
Signatures in Global and National Commerce Act or, as the case may be, Section
16 of the Uniform Electronic Transactions Act, as so in effect in such
jurisdiction, of such transferable record. The Administrative Agent will
arrange, pursuant to procedures reasonably satisfactory to the Administrative
Agent and so long as such procedures will not result in the Administrative
Agent's loss of control, for Borrower to make alterations to the electronic
chattel paper or transferable record permitted under the UCC or, as the case may
be, Section 201 of the Federal Electronic Signatures in Global and National
Commerce Act or Section 16 of the Uniform Electronic Transactions Act, for a
party in control to make without loss of control, unless 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) has occurred and is continuing or
would occur after taking into account any action by Borrower with respect to
such electronic chattel paper or transferable record.
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(e) LETTER-OF-CREDIT RIGHTS. With respect to any letter of
credit now or hereafter issued in favor of Borrower, Borrower will promptly
notify the Administrative Agent thereof and, at the request and option of the
Administrative Agent, Borrower will, pursuant to an agreement in form and
substance reasonably satisfactory to the Administrative Agent, either (i)
arrange for the issuer and any confirmer of such letter of credit to consent to
an assignment to the Administrative Agent of the proceeds of any drawing under
the letter of credit or (ii) arrange for the Administrative Agent to become the
transferee beneficiary of or nominee under the letter of credit.
(f) COMMERCIAL TORT CLAIMS. With respect to any commercial
tort claim that Borrower may hereafter hold with a value in excess of $100,000,
Borrower will promptly notify the Administrative Agent in a writing signed by
Borrower of the brief details thereof and grant to the Administrative Agent in
such writing a perfected security interest therein and the proceeds thereof, all
upon the terms of this Agreement, with such writing to be in form and substance
reasonably satisfactory to the Administrative Agent.
(g) FURTHER ASSURANCES. To the extent not included in the
foregoing, Borrower will, from time to time at Borrower's expense, promptly
execute and deliver all further agreements, instruments and documents, and take
all further action, that the Administrative Agent reasonably determines to be
necessary, in order to create, perfect or protect any Security Interest granted
or purported to be granted hereby or to enable the Administrative Agent to
exercise and enforce its rights and remedies hereunder with respect to the
Collateral (except to the extent that this Agreement specifically provides that
such action is not required). Without limiting the generality of the foregoing,
Borrower will (i) execute and file such financing and continuation statements,
or amendments thereto and such other instruments, endorsements and notices, as
may be reasonably necessary, or as the Administrative Agent may reasonably
request, in order to perfect and preserve the Security Interest granted or
purported to be granted hereby, including consents, assignments, notices and
other documentation reasonably requested by the Administrative Agent, (ii) 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 at the request of the Administrative Agent,
cause the Administrative Agent's name to be noted as secured party on any
certificate of title for a titled good if such notation is a condition to
attachment, perfection or priority of, or ability of the Administrative Agent to
enforce, the Administrative Agent's Security Interest in such Collateral, (iii)
comply with any provision of any statute, regulation or treaty of the United
States as to any Collateral if compliance with such provision is a condition to
attachment, perfection or priority of, or ability of the Administrative Agent to
enforce, the Administrative Agent's Security Interest in such Collateral, (iv)
use its commercially reasonable efforts to obtain governmental and other
third-party consents and approvals, including any consent of any licensor,
lessor or other Person obligated on Collateral, as the Administrative Agent may
reasonably request, (v) use its commercially reasonable efforts to obtain
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waivers from mortgagees and landlords in form and substance reasonably
satisfactory to the Administrative Agent, (vi) execute any agreement, or deliver
any Collateral to the Administrative Agent, in form and substance reasonably
satisfactory to the Administrative Agent, in order to provide the Administrative
Agent with "control" (as such term is defined in the UCC) with respect to the
relevant Collateral in order for the Administrative Agent to obtain a perfected
security interest in such Collateral and (vii) take all actions required by the
UCC (or part thereof) or by other Law, except in each case to the extent that
this Agreement specifically provides that such action is not required.
Section 4. REPRESENTATIONS AND WARRANTIES. Borrower hereby
represents and warrants as of the date hereof as follows:
(a) REPRESENTATIONS INCORPORATED BY REFERENCE. Borrower hereby
makes each and every representation and warranty made by it in Article IV of the
Loan Agreement to the same extent as if each such representation and warranty
had been set forth in full herein, and each such representation and warranty is
hereby incorporated by reference in this Section 4.
(b) TITLE; NO OTHER LIENS. Borrower is the legal and
beneficial owner of the Collateral in existence on the date hereof free and
clear of any and all Liens or claims of others (other than Permitted Liens) and
Borrower has full power and authority to grant the Security Interest in and to
the Collateral hereunder. Except with respect to Permitted Liens, no security
agreement, financing statement or other public notice with respect to all or any
part of the Collateral is on file or of record in any public office. Further, no
Lien or security interest on or in any membership interests of Borrower has been
registered in the registration book maintained by Borrower in which all
membership interests of Borrower are recorded, except for Permitted Liens.
Borrower further represents that (i) none of the Collateral constitutes, or is
the proceeds of, "farm products" (as defined in the UCC) and (ii) none of the
account debtors or other Persons obligated on any of the Collateral is a
Government Instrumentality subject to the Federal Assignment of Claims Act or
like federal, state or local statute or rule in respect of such Collateral.
(c) PERFECTION REPRESENTATIONS. The name of Borrower is
Pacific Ethanol Madera LLC. Borrower is a duly formed and validly existing
limited liability company under the laws of the State of Delaware, and its
certificate of formation has been duly filed with the Secretary of State of the
State of Delaware. Borrower's chief executive office is located at ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and the legal description of the Site is as set
forth in the Mortgage.. The Delaware organizational identification number for
Borrower is 3957429.
(d) OTHER PERFECTION MATTERS. Financing statements or other
appropriate instruments have been or will be filed pursuant to the UCC in the
public offices set forth in Schedule B as necessary to perfect the Security
Interest granted or purported to be granted hereby to the extent any such
Security Interest may be perfected by the filing of a financing statement in
such public offices. All other action necessary or reasonably requested by the
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Administrative Agent to protect and perfect the Security Interest in each item
of the Collateral owned by Borrower, or in which Borrower has a right, as of the
date hereof, has been or will be duly taken to the extent required hereunder,
including those actions set forth in Section 3. Subject to the requirements
contained in the UCC with respect to the filing of continuation statements, this
Agreement creates a valid, continuing and perfected security interest in the
Collateral in favor of the Administrative Agent, subject to no other Liens
(other than Permitted Liens), and is enforceable as against creditors of and
purchasers from Borrower and against any owner, lessee or mortgagee of the real
property where any of the Collateral is located or to which any of the
Collateral relates and against any purchaser of such real property or any
present or future creditor obtaining a Lien on such real property (other than
holders of Permitted Liens to the extent of such Liens).
Section 5. COVENANTS AND AGREEMENTS. Borrower hereby covenants
and agrees that it will observe and fulfill, and will cause to be observed and
fulfilled, each and all of the following covenants until all Obligations
(exclusive of any indemnification or other obligations that are expressly stated
in any Loan Document to survive termination of the Loan Documents) have been
paid and performed in full:
(a) NOTICE OF ADVERSE CLAIMS AND CHANGES IN THE COLLATERAL.
Borrower will, promptly, and in no event later than five (5) Business Days after
Borrower becomes aware of any information of (i) any adverse claim against the
Collateral or (ii) any substantial change in a material portion of the
Collateral or of the occurrence of any event, occurrence or condition that could
reasonably be expected to have a Material Adverse Effect, deliver to the
Administrative Agent notice of each such claim, change, event, occurrence or
condition.
(b) LEGAL STATUS. Borrower will not change its name, place of
business or, if more than one, chief executive office, or its mailing address or
organizational identification number if it has one, or change its type of
organization or jurisdiction of organization, except as permitted by the Loan
Documents or with the Administrative Agent's written consent, which will not be
unreasonably withheld or delayed. If Borrower does not have an organizational
identification number and later obtains one, Borrower will promptly notify the
Administrative Agent of such organizational identification number.
(c) PROHIBITION AGAINST TRANSFER OF COLLATERAL. Borrower will
not sell, lease, license, transfer or otherwise dispose of any part of the
Collateral, whether in one or a series of transactions, or otherwise undertake
the sale or disposal of any of the Collateral, except as otherwise permitted
pursuant to this Agreement, the Loan Agreement and the other Loan Documents.
(d) FEES AND EXPENSES. Borrower will upon demand pay or
arrange to pay to the Administrative Agent the amount of any and all reasonable
out-of-pocket costs and expenses (including the reasonable fees and expenses of
counsel, any special consultants reasonably engaged and any local counsel who
might reasonably be retained by the Administrative Agent in connection with the
transactions contemplated hereby) that the Administrative Agent may incur in
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connection with (i) any Event of Default, including the sale, lease, license or
other disposition of, collection from or other realization upon, any of the
Collateral pursuant to the exercise or enforcement of any of its rights
hereunder, (ii) the exercise of the Administrative Agent's rights under this
Agreement, (iii) performance by the Administrative Agent of any obligations of
Borrower that Borrower has failed or refused to perform with respect to the
Collateral, (iv) bankruptcy, insolvency, receivership, foreclosure, winding up
or liquidation proceedings and for the care of the Collateral and defending or
asserting rights and claims of the Administrative Agent in respect thereof, by
litigation or otherwise, including expenses of insurance substantially similar
to the insurance contemplated by Section 5.1(n) of the Loan Agreement or (v) the
execution, delivery and performance of this Agreement, any agreement
supplemental hereto and any instruments of further assurance; PROVIDED, that
Borrower will have no obligation to pay or arrange to pay any amount pursuant to
this Section 5(d) if such amount has already been paid pursuant to Section 8.11
of the Loan Agreement. Any amounts payable by Borrower pursuant to this Section
5(d) will constitute Obligations hereunder together with interest thereon at the
Default Rate from the date of demand thereof and .
(e) FILING FEES, TAXES, ETC. Borrower will pay all filing,
registration and recording fees or re-filing, re-registration and re-recording
fees, and all federal, state, county and municipal stamp taxes and other similar
taxes, duties, imposts, assessments and charges arising out of or in connection
with (i) the Collateral or incurred in connection with the use or operation of
such Collateral and (ii) the execution and delivery of this Agreement, any
agreement supplemental hereto and any instruments of further assurance that no
such tax, duty, impost, assessment or charge need be paid if being contested in
good faith by appropriate proceedings with proper reserves established in
accordance with GAAP.
(f) LIMITATION ON LIENS ON THE COLLATERAL. Borrower will not
create, assume, incur, suffer to exist or permit to be created, assumed,
incurred or suffered to exist, will defend the Collateral against, and will take
such other action as is necessary to remove, any Lien or claim on or to the
Collateral, other than Permitted Liens, and will defend the right, title and
interest of the Administrative Agent in and to any of the Collateral against the
claims and demands of all Persons whomsoever other than with respect to
Permitted Liens.
(g) LOCATION OF COLLATERAL. The Collateral, to the extent (i)
such Collateral (A) is not delivered to the Administrative Agent in accordance
with the terms of this Agreement, (ii) is not mobile goods or (iii) is not in
the possession of a bailee who has executed an acknowledgment that such bailee
holds the Collateral for the benefit of the Administrative Agent as described in
Section 3(c), will be kept at the Site or at Borrower's chief executive office
set forth in Section 4(c), and Borrower will not remove the Collateral (other
than Collateral sold, leased, licensed, transferred or otherwise disposed of in
accordance with the Loan Agreement or Collateral being repaired) from such
location without providing at least ten (10) Business Days' prior written notice
to the Administrative Agent.
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Section 6. BORROWER'S OBLIGATIONS.
(a) All payments received by Borrower under or in connection
with any of the Collateral will be held by Borrower in trust for the
Administrative Agent, will be segregated from other funds of Borrower and will,
promptly upon receipt by Borrower, be turned over to the Administrative Agent or
its designee in the same form as received by Borrower (duly endorsed by Borrower
to the Administrative Agent, if requested) (except to the extent that this
Agreement or any other Loan Document specifically provides that such action is
not required).
(b) Any and all payments described in clause (a) above that
are received by the Administrative Agent or its designee (whether from Borrower
or otherwise) will be deposited into the appropriate Security Account as
required by the Disbursement Agreement or, upon the occurrence and during the
continuance of an Event of Default, any such payments will be applied in whole
or in part by the Administrative Agent or its designee in the manner specified
in the Disbursement Agreement.
Section 7. REMEDIES; RIGHTS UPON EVENT OF 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 do one or more of
the following:
(a) In addition to and without limiting any rights arising out
of the Loan Agreement and the other Loan Documents, take the following
enforcement actions with respect to the Security Accounts and any other
securities account or deposit account constituting part of the Collateral,
without being required to give any notice to Borrower: (i) direct Disbursement
Agent and any other securities intermediary or bank, or Borrower (as
applicable), to deliver the same to the Administrative Agent at any place or
places designated by the Administrative Agent, it being understood that such
obligations are of the essence under this Agreement and that, accordingly, upon
application to a court of equity having jurisdiction, the Administrative Agent
will be entitled to a decree requiring specific performance by Disbursement
Agent, any other securities intermediary or bank or Borrower, as the case may
be, of such obligations; (ii) withdraw any and all cash and liquidate any and
all Permitted Investments, other financial assets and other property not
constituting cash in any of the Security Accounts or any other securities
account or deposit account constituting part of the Collateral, and apply such
cash and the liquidation proceeds of Permitted Investments, financial assets or
other property, if any, then held in any Security Account or any other
securities account or deposit account constituting part of the Collateral in
satisfaction of all or any part of the Obligations then due and payable in the
manner specified in Section 8 hereof; and (iii) sell, assign or otherwise
liquidate the Security Accounts or any other securities account or deposit
account constituting part of the Collateral, or any part thereof, at a public or
private disposition, for cash, upon credit, or for future delivery, and at such
prices as the Administrative Agent may deem satisfactory, and take possession of
the proceeds of any such sale or liquidation. Borrower acknowledges that if 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) has occurred and is
continuing, the Administrative Agent is entitled to apply amounts standing to
the credit of any Security Account or any other securities account or deposit
account constituting part of the Collateral as contemplated in this Section
7(a).
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(b) Make such payments and do such acts as the Administrative
Agent may reasonably deem necessary to protect, perfect or continue the
perfection of the Security Interest in the Collateral, including (i) paying,
purchasing, contesting or compromising any Lien that is, or purports to be,
prior to or superior to the Security Interest granted hereunder, (ii) 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, (iii) commencing, appearing or otherwise participating in or
controlling any action or proceeding purporting to affect the Security Interest
in or ownership of the Collateral and (iv) 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.
(c) Foreclose on the Collateral as herein provided or in any
manner permitted by Law and exercise any and all of the rights and remedies
conferred upon the Administrative Agent by the Assigned Agreements (taking into
account the Consents to Assignment) either concurrently or in such order as the
Administrative Agent may determine without affecting the rights or remedies to
which the Administrative Agent may be entitled under the Loan Agreement or any
other Loan Document. Borrower hereby waives, to the extent permitted by Law,
notice 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 Collateral, including any and all prior judicial notice and hearing for any
prejudgment remedy or remedies and any such right that Borrower would otherwise
have under the constitution or any statute or other law of the United States of
America or of any state thereof.
(d) Require Borrower to, and Borrower hereby agrees that it
will, at its expense and upon request of the Administrative Agent, forthwith
assemble all or part of the Collateral as directed by the Administrative Agent
and make it available to the Administrative Agent at the Site or, with respect
to any Collateral that is movable, such other location directed by the
Administrative Agent that is reasonably convenient to both the Administrative
Agent and Borrower.
(e) Without notice or demand or legal process (to the extent
permitted by Law), enter upon any premises of Borrower and take possession of
the Collateral, whereupon the Administrative Agent may use or operate the
Collateral (i) for the purpose of preserving the Collateral or its value or (ii)
as permitted by an order of a court having competent jurisdiction.
(f) Without notice, except as specified below, sell, lease,
license or otherwise dispose of the Collateral, or any part thereof, in its then
present condition or following any commercially reasonable preparation or
processing. Any such disposition of the Collateral may be made by one or more
contracts, in one or more parcels, at public or private disposition at any of
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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. Borrower agrees that, to the extent notice of any such
disposition will be required by Law, at least ten (10) Business Days' written
notice to Borrower of the time and the 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 Collateral at a
public disposition, or at a private disposition only if the Collateral is of a
kind that is customarily sold on a recognized market or the subject of widely
distributed standard price quotations. The Administrative Agent will not be
obligated to make any disposition of the 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 Collateral, or any
part thereof, at any private disposition conducted in a commercially reasonable
manner. Borrower hereby waives, to the extent permitted by Law, any claims
against the Administrative Agent arising by reason of the fact that the price at
which the 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 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 Collateral to more than one offeree. To the extent
permitted by Law, Borrower hereby specifically waives all rights of redemption,
stay or appraisal that it has or may have under any Law now existing or
hereafter enacted. Borrower authorizes the Administrative Agent, at any time and
from time to time, to execute, in connection with a disposition of the
Collateral pursuant to the provisions of this Agreement or the other Loan
Documents, any endorsements, assignments or other instruments of conveyance or
transfer with respect to the Collateral.
(g) Accept the Collateral in full or partial satisfaction of
the Obligations.
(h) Exercise in respect of the 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 Law in any jurisdiction.
Section 8. APPLICATION OF PROCEEDS. The net proceeds of any
enforcement, foreclosure, collection, recovery, receipt, appropriation or
realization on or any sale, lease, license or other disposition of the
Collateral will be applied in the following order:
(a) to the repayment of the reasonable documented costs and
expenses of retaking, holding and preparing for the collection or enforcement
with respect to, or sale, lease, license or other disposition of, the Collateral
(including attorneys' fees and expenses, court costs and those amounts payable
13
pursuant to this Agreement and the other Loan Documents) and the discharge of
all assessments, encumbrances, charges or Liens, if any, on the Collateral prior
to the Lien created pursuant to this Agreement;
(b) to the payment in full of the Obligations in accordance
with the priority of application specified in Section 2.9(b) of the Loan
Agreement; and
(c) if all Obligations have been paid, satisfied and
discharged in full, any surplus then remaining will be paid to Borrower, subject
to the satisfaction of obligations secured by any subordinate security interest
in or other Lien on the Collateral if Administrative Agent receives an
authenticated demand for proceeds before distribution of the proceeds to
Borrower is contemplated.
Section 9. ASSIGNMENT OF APPROVALS. Borrower will, 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), at the request of the Administrative Agent,
contemporaneously with and at any other time following any foreclosure by the
Administrative Agent on any part of the Collateral or any part of the Site,
assign, transfer or otherwise furnish or arrange to assign, transfer or
otherwise furnish to the Administrative Agent or to any transferee of the
interest of the Administrative Agent (to the extent so assignable or
transferable), all of Borrower's rights and interest in, to and under any
Approvals, including all offsets, allowances and similar rights issued under or
in connection with Law that are required to permit the Project to be operated in
accordance with all Law. Upon the request of the Administrative Agent, following
collection, enforcement, foreclosure, sale, lease, license or other disposition
by the Administrative Agent on or with respect to the Collateral or any part of
the Site, Borrower agrees to use its best efforts to assist the Administrative
Agent in renewing or extending in the name of the Administrative Agent (or any
other Person operating the Project) or otherwise obtaining the benefits of all
of the Borrower's Approvals and other rights referred to in the immediately
preceding sentence to the extent that such Approvals and other rights are not
assignable or transferable.
Section 10. SECURITY INTEREST ABSOLUTE. All the rights of the
Administrative Agent hereunder respecting Borrower and the Security Interest and
all obligations of Borrower hereunder will be absolute and unconditional
irrespective of:
(a) any lack of validity or enforceability of any of the
Documents or any of the Collateral or any other agreement or instrument relating
thereto;
(b) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Obligations, or any other amendment or
waiver of or any consent to any departure from any Document or any of the
Collateral or any other agreement or instrument related thereto;
(c) any exchange or release of any Collateral or any other
collateral, or the non-perfection of any of the Security Interests or any
release or amendment or waiver of or consent to or departure from any guaranty,
for all or any of the Obligations; or
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(d) to the fullest extent permitted by Law, any other
circumstance that might otherwise constitute a defense available to, or a
discharge of, Borrower or any third-party pledgor other than payment in full of
the Obligations.
Section 11. ADMINISTRATIVE AGENT APPOINTED ATTORNEY-IN-FACT.
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), Borrower irrevocably constitutes and
appoints the Administrative Agent and any officer or agent thereof, with full
power of substitution, as its true and lawful attorney-in-fact (which
appointment as attorney-in-fact will be coupled with an interest), with full
authority in the place and stead of Borrower and in the name of Borrower or
otherwise, from time to time in the Administrative Agent's discretion, to take
any action and to execute any and all documents and instruments that the
Administrative Agent may reasonably deem necessary to accomplish the purposes of
this Agreement in a commercially reasonable manner to the extent required by the
UCC, without notice to (except as specified below) or assent by Borrower,
including, without limitation:
(a) to receive, endorse and collect all instruments, chattel
paper or letter-of-credit rights made payable to Borrower or investment property
in which Borrower has an interest, in each case representing any dividends,
interest payments or other distributions constituting Collateral or any part
thereof and to give full discharge for the same and, upon notice to Borrower, to
file any claim or to take any other action or proceeding in any court of law or
equity or otherwise deemed appropriate by the Administrative Agent for the
purpose of collecting any and all of such dividends, payments or other
distributions;
(b) to enforce the rights of Borrower under any provision of
any Assigned Agreement to the extent permitted thereunder and under the terms of
this Agreement and the applicable Consent to Assignment;
(c) to pay or discharge taxes and Liens levied or placed on
the Collateral;
(d) (i) to direct any party liable for any payment under or
with respect to any of the Collateral to make payment of any and all moneys due
or to become due thereunder or with respect thereto directly to the
Administrative Agent or as the Administrative Agent may direct, including
drawing under any letter of credit rights, (ii) to ask or demand for, collect,
receive payment of and receipt for, any and all moneys, claims and other amounts
due or to become due at any time in respect of or arising out of any Collateral,
(iii) to commence and prosecute any suits, actions or proceedings at law or in
equity in any court of competent jurisdiction to collect the Collateral or any
part thereof and to enforce any other right in respect of any Collateral, (iv)
to defend any suit, action or proceeding brought against Borrower with respect
to any Collateral, (v) to settle, compromise or adjust any suit, action or
proceeding described in clauses (iii) and (iv) above and, in connection
therewith, to give such discharges or releases as the Administrative Agent may
deem appropriate and (vi) generally, to sell, transfer, pledge and make any
agreement with respect to or otherwise deal with any of the Collateral as fully
and completely as though the Administrative Agent were the absolute owner
thereof for all purposes;
15
(e) (i) to execute, in connection with any sale, lease,
license or other disposition permitted to be made by the Administrative Agent
hereunder, any endorsements, assignments, transfer statements or other
instruments of conveyance or transfer with respect to the Collateral and to file
or register the same if required by Law, (ii) to communicate in its own name
with any party to any agreement or instrument included in the Collateral, at any
reasonable time, with regard to any matter relating to such agreement or
instrument or (iii) to the fullest extent permitted by Law, to file one or more
financing or continuation statements, and amendments thereto, relative to all or
any part of the Collateral without the signature of Borrower (PROVIDED, that the
Administrative Agent will give notice to Borrower promptly after taking any
action described in this Section 11(e) but failure to give such notice will not
subject the Administrative Agent to liability); and
(f) to take any action that the Administrative Agent may, in
its reasonable discretion and at Borrower's expense, deem necessary (i) to
perfect, maintain and enforce any Security Interest created in favor of the
Administrative Agent, (ii) to create, perfect, maintain and enforce any Security
Interest granted or purported to be granted hereby or (iii) to otherwise
accomplish the purposes of this Agreement.
Section 12. ADMINISTRATIVE AGENT MAY PERFORM. 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, without releasing
Borrower from any obligation, covenant or condition hereof, itself may (but will
have no obligation to) make any payment or perform, or cause the performance of,
any such obligation, covenant, condition or agreement or any other action in
such manner and to such extent as the Administrative Agent may reasonably deem
necessary to protect, perfect or continue the perfection of the Security
Interest. The Administrative Agent will notify Borrower that it intends to take,
or has taken, any such actions; PROVIDED, that any failure to provide such
notice will not affect the right of the Administrative Agent to take such
actions or the validity and enforceability of such actions. Any reasonable
documented costs or expenses incurred by the Administrative Agent in connection
with the foregoing will be governed by the Loan Documents, constitute a part of
the Obligations secured by the Security Documents, bear interest at a rate per
annum equal to the Default Rate and be payable by Borrower upon demand by the
Administrative Agent.
Section 13. NO DUTY ON THE ADMINISTRATIVE AGENT'S PART;
LIMITATION ON THE ADMINISTRATIVE AGENT'S OBLIGATIONS.
(a) The powers conferred on the Administrative Agent hereunder
are solely to protect the Administrative Agent's interests in the Collateral and
will not impose any duty upon the Administrative Agent to exercise any such
powers, including without limitation any calls, conversions, maturities, tenders
or other matters relating to the Collateral. The Administrative Agent will be
accountable only for amounts that it receives as a result of the exercise of
such powers.
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(b) Except as provided in the next sentence, anything herein
to the contrary notwithstanding, Borrower will remain liable under the Assigned
Agreements and any other agreements included in the Collateral to the extent set
forth therein to perform all of its duties and obligations thereunder to the
same extent as if this Agreement had not been executed. The exercise by the
Administrative Agent of any of the rights or remedies hereunder will not release
Borrower from any of its duties or obligations under the Assigned Agreements or
any other agreements included in the Collateral unless expressly assumed by the
Administrative Agent in writing. All of the Collateral is hereby assigned to the
Administrative Agent solely as security, and the Administrative Agent will have
no duty, liability or obligation whatsoever with respect to any of the
Collateral, including without limitation the filing of any continuation
statements, unless the Administrative Agent so elects in writing consistent with
its rights under this Agreement or fails to act in a commercially reasonable
manner to the extent required by the UCC.
Section 14. REASONABLE CARE; STANDARDS FOR EXERCISING
REMEDIES; MARSHALLING 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. The Administrative Agent will be deemed to
have exercised reasonable care in the custody and preservation of the Collateral
in its possession if the Collateral is accorded treatment substantially equal to
that which the Administrative Agent accords or would accord property held by the
Administrative Agent in similar transactions for its own account; PROVIDED, that
it is expressly understood that the Administrative Agent will not have
responsibility for taking any steps to preserve rights against any parties with
respect to the Collateral. In furtherance of the foregoing, to the extent Law
imposes on the Administrative Agent an obligation to exercise remedies in a
commercially reasonable manner, Borrower 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
Collateral for disposition or otherwise to complete raw material or work in
process into finished goods or other finished products for disposition, (ii) to
fail to obtain third-party consents for access to Collateral to be disposed of,
or to obtain or, if not required by other Law, to fail to obtain governmental or
third-party consents for the collection or disposition of Collateral to be
collected or disposed of, (iii) to fail to exercise collection remedies against
account debtors or other Persons obligated on Collateral or to remove Liens or
encumbrances on or any adverse claims against Collateral, (iv) to exercise
collection remedies against account debtors and other Persons obligated on
Collateral directly or through the use of collection agencies and other
collection specialists, (v) to advertise dispositions of Collateral through
publications or media of general circulation, whether or not the Collateral is
of a specialized nature, (vi) contact other Persons, whether or not in the same
business as Borrower, for expressions of interest in acquiring all or any
portion of the Collateral, (vii) to hire one or more professional auctioneers to
17
assist in the disposition of Collateral, whether or not the Collateral is of a
specialized nature, (viii) to dispose of Collateral by utilizing internet sites
that provide for the auction of assets of the types included in the 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 Collateral or (xii) to the extent reasonably deemed
appropriate by the Administrative Agent, to obtain the services of other
qualified brokers, investment bankers, consultants and other professionals to
assist the Administrative Agent in the collection or disposition of any of the
Collateral.
(b) Without limiting the generality of the foregoing, the
Administrative Agent will not be required to marshal any collateral, including
the Collateral subject to the Security Interest created hereby, or to resort to
any item of Collateral in any particular order, and all of the Administrative
Agent's rights hereunder and in respect of such Collateral will be cumulative
and in addition to all other rights, however existing or arising. To the extent
that Borrower lawfully may, Borrower hereby (i) agrees that it will not invoke
any Law relating to the marshaling of collateral 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 Obligations or under which
any of the Obligations is outstanding or by which any of the Obligations is
secured 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 Collateral.
Section 15. ROLE OF THE ADMINISTRATIVE AGENT. The rights,
duties, liabilities and immunities of the Administrative Agent, and the
appointment and replacement, will be governed by this Agreement and the
provisions contained in the other Loan Documents.
Section 16. ABSENCE OF FIDUCIARY RELATIONSHIP. The
Administrative Agent undertakes to perform or to observe only such of its
agreements and obligations as are specifically set forth in this Agreement or
any other Loan Document, and no implied agreements, covenants or obligations
with respect to Borrower, any Affiliate of Borrower or any other party to any of
the Assigned Agreements may be read into this Agreement against the
Administrative Agent or the Lenders. None of the Administrative Agent or the
Lenders is a fiduciary of or will owe or be deemed to owe any fiduciary duty to
Borrower, any Affiliate of Borrower or any other party to any of the Assigned
Agreements, except as otherwise specifically required by Law.
Section 17. [RESERVED.]
Section 18. 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 must be in writing and
must be given in accordance with Section 8.20 of the Loan Agreement.
18
Section 19. 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
Borrower will by itself entitle Borrower 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 Law.
Section 20. SEVERABILITY. Any provision of this Agreement that
is invalid or prohibited in any jurisdiction will, as to such jurisdiction, be
ineffective and severable from the rest of this Agreement to the extent of such
invalidity or prohibition, without impairing or affecting in any way the
validity of any other provision of this Agreement, or of such provision in other
jurisdictions. The parties agree to replace any provision that is ineffective by
operation of this Section 20 with an effective provision that as closely as
possible corresponds to the spirit and purpose of such ineffective provision and
this Agreement as a whole.
Section 21. [RESERVED.]
Section 22. AMENDMENT. No amendment or waiver of any provision
of this Agreement, or consent to any departure by Borrower therefrom, will be
effective unless it is in writing and signed by the Administrative Agent. A
waiver or consent granted pursuant to this Section 22 will be effective only in
the specific instance and for the specific purpose for which it is given.
Section 23. SUCCESSORS AND ASSIGNS.
(a) This Agreement will be binding upon and inure to the
benefit of Borrower, the Administrative Agent and their respective successors
and permitted assigns. Borrower 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 all such restatements and/or amendments to this Agreement or other
instruments or documents as in the reasonable opinion 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, subject to the Loan Agreement, be entitled to the benefits of this
Agreement.
19
(b) Borrower 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.
(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 of the Loan Agreement.
Section 24. 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 25. WAIVER OF JURY TRIAL. BORROWER AND THE
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 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 from contract, arising by
law, based on tort or otherwise. BORROWER AND THE 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 26. CONSENT TO JURISDICTION. Borrower 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 Borrower 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. Borrower
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. Borrower hereby irrevocably appoints the
Process Agent as its agent to receive on behalf of Borrower 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
20
delivering a copy of such process to Borrower at the address of the Process
Agent and Borrower hereby irrevocably authorizes and directs the Process Agent
to accept such service on its behalf. In addition and as an alternative method
of service, Borrower 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 Borrower at its address set forth in Section 18. Borrower 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 26 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 Borrower 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, Borrower agrees immediately to appoint a replacement Process
Agent satisfactory to the Administrative Agent.
Section 27. 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 28. CONTINUING SECURITY INTEREST; TERMINATION. This
Agreement creates a continuing Security Interest in the Collateral and will
remain in full force and effect for the benefit of the Administrative Agent
until all Obligations have been paid and performed in full or released
(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 the Security Interest granted hereby will terminate. Upon such
termination, the Administrative Agent will, promptly upon its receipt of a
request from Borrower and at the expense of Borrower, (a) pay to Borrower or
deposit into a deposit account in Borrower's name the balance on deposit in any
Security Account that is a deposit account, (b) communicate the authoritative
copy of any electronic chattel paper constituting part of the Collateral to
Borrower or its designated custodian, (c) send to each Person having an
unfulfilled obligation to pay or deliver to the Administrative Agent proceeds
arising from any letter of credit right constituting Collateral an authenticated
release from any further obligation to pay or deliver to the Administrative
Agent proceeds arising from any such letter of credit right and (d) execute and
deliver to Borrower such documents as Borrower may reasonably request to
evidence such termination or expiration, including UCC-3 termination
statement(s) for any financing statement on file with respect to the Collateral
and a statement terminating any Consent to Assignment then in effect.
Section 29. PAYMENTS SET ASIDE. To the extent that Borrower or
any other Person on behalf of Borrower makes a payment of the Obligations to the
Administrative Agent, or the Administrative Agent enforces its rights hereunder
or exercises its rights of set-off, and such payment or payments or the proceeds
of such enforcement or set-off or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside and/or required to be
repaid to a trustee, receiver or any other party under any bankruptcy law, state
or federal law, common law or equitable cause, then to the extent of such
21
recovery, the Obligations or any part thereof originally intended to be
satisfied, and this Agreement and all Security Interests, rights and remedies
therefor, will be revived and continued in full force and effect as if such
payment had not been made or such enforcement or set-off had not occurred.
Section 30. NO CONSEQUENTIAL DAMAGES. Borrower agrees,
regardless of cause, not to assert any claim whatsoever against the
Administrative Agent for loss of anticipatory profits or consequential damages.
[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 Assignment and Security Agreement to be signed
on the date first above written.
PACIFIC ETHANOL MADERA LLC
By /S/ ▇▇▇▇ ▇▇▇▇▇▇
------------------------------------------------
Name:
Title:
▇▇▇▇▇▇ UNITED CAPITAL, A DIVISION OF TD BANKNORTH, N.A.,
as the Administrative Agent
By /S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
------------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Title: Senior Vice President
23
Schedule A to
Assignment and Security Agreement
---------------------------------
PROJECT DOCUMENTS AND ASSIGNED APPROVALS
----------------------------------------
As each of the following may be amended, modified or supplemented from time to
time in accordance with the provisions of the Loan Documents:
Amended and Restated Corn Procurement Agreement, dated March 30, 2006, between
Pacific Ethanol Madera LLC, a Delaware limited liability company ("BORROWER"),
and Pacific Ag. Products, LLC, a California limited liability company ("PAP").
Amended and Restated Ethanol Marketing Agreement, dated March 16, 2006, between
Kinergy Marketing LLC, an Oregon limited liability company, and Borrower.
Amended and Restated Operation and Maintenance Services Agreement, dated March
16, 2006, between Pacific Ethanol California, Inc., a California corporation
("PEC"), and Borrower.
Amended and Restated Phase I Design-Build Contract, dated November 2, 2005,
between Borrower and ▇.▇. ▇▇▇▇▇ Co., a California corporation ("▇▇▇▇▇").
Assignment and Assumption Agreement, dated November 4, 2005, between PEC and
Borrower.
1st Amendment to the Assignment and Assumption Agreement, dated November 11,
2005, between PEC and Borrower.
2nd Amendment to the Assignment and Assumption Agreement, dated November 11,
2005, between PEC and Borrower.
Construction Performance and Completion Bond, dated November 4, 2005, issued by
Travelers Casualty and Surety Company of America, with Dual-Obligee Rider, dated
February 24, 2006, issued by Travelers Casualty and Surety Company.
Grain Mill Operation and Maintenance Agreement, dated March 30, 2006, between
Borrower and PAP.
License of Technology, dated September 1, 2005, between Delta-T Corporation, a
Virginia corporation, and Borrower.
Phase II Design-Build Contract, dated November, 2, 2005, between Borrower and
▇▇▇▇▇.
WDG Marketing and Services Agreement, dated March 4, 2005, between Western
Milling LLC, a California limited liability company, and Borrower, as assignee
of PEC.
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Schedule B to
Assignment and Security Agreement
---------------------------------
FINANCING STATEMENT FILINGS
---------------------------
Debtor: Pacific Ethanol Madera LLC
Secured Party: ▇▇▇▇▇▇ United Capital, a division of TD Banknorth,
N.A., as Administrative Agent
Jurisdiction: Secretary of State of the State of Delaware
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