Exhibit
10.2
AMENDMENT NO.
1
TO
CONSTRUCTION AND TERM LOAN
AGREEMENT
AND
AGREEMENT AS TO FUTURE
FINANCING TRANSACTIONS
This AMENDMENT NO. 1 TO CONSTRUCTION AND TERM
LOAN AGREEMENT AND AGREEMENT AS TO FUTURE FINANCING TRANSACTIONS,
dated September 29, 2006 (this “ Amendment ”),
is by and among PACIFIC ETHANOL MADERA LLC, a Delaware limited
liability company (“ Borrower ”), the lenders
named on the signature pages to this Amendment, TD BANKNORTH, N.A.,
a national banking association, as administrative agent for the
Lenders (as defined below) (the “ Administrative Agent
”), and PACIFIC ETHANOL, INC., a Delaware corporation
(“ PEI ”), and amends to the extent stated
herein the Construction and Term Loan Agreement, dated April 10,
2006 (the “ Original Loan Agreement ”), among
Borrower, the Lenders and the Administrative Agent. Capitalized
terms used and not defined herein have the meanings ascribed to
them in Schedule X of the Original Loan Agreement.
RECITALS :
WHEREAS, Borrower, the Lenders and the
Administrative Agent are all of the parties to the Original Loan
Agreement;
WHEREAS, the business requirements of Borrower
have changed in a manner that has caused Borrower to determine that
it is not in its best interest to utilize certain of the Loans made
available by the Lenders to Borrower pursuant to the Original Loan
Agreement;
WHEREAS, the Administrative Agent and the
Lenders are willing to amend the Original Loan Agreement (including
Schedule X thereto) so as to enable Borrower to pursue its
preferred financing arrangements; and
WHEREAS, in consideration of the willingness of
the Administrative Agent and the Lenders to amend the Original Loan
Agreement, PEI and Borrower are willing to grant to the Lenders the
right to participate in certain future financing transactions
involving the Project;
NOW, THEREFORE, in consideration of the premises
and the mutual covenants contained herein, and other good and
valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I
AMENDMENTS AND CONSENTS TO
THE
ORIGINAL LOAN AGREEMENT AND OTHER
LOAN DOCUMENTS
Section 1.1. Amendment to Reflect No Obligation to Borrow
Construction Loans .
Section 2.1 of the Original Loan Agreement is hereby amended to
include the following new subsection (c):
“(c) No Obligation to Borrow Construction
Loans . Notwithstanding
the foregoing or any other contrary provision of the Loan
Documents, Borrower will have no obligation to borrow any
Construction Loan at any time.”
Section 1.2. Amendments to Reflect Mandatory Term Loan
Borrowing .
(a) Amendment to Section 2.2(b) of the Original Loan
Agreement . Section
2.2(b)(i) of the Original Loan Agreement is hereby amended by
adding the words “(if any)” after the words “and
the repayment in full of all Construction Loans” in the third
sentence thereof.
(b) Amendment to Section 2.7(b) of the Original Loan
Agreement . Section
2.7(b) of the Original Loan Agreement is hereby amended to be and
read in its entirety as follows:
“(b) Term Loans . Proceeds of the Term Loans may be used only to
(i) refinance the principal of and accrued and unpaid interest
on all Construction Loans outstanding on the Term Loan Conversion
Date, if any, (ii) pay interest, fees and other expenses
payable pursuant to Section 2.3, Section 2.5, Section
2.10 and Section 8.11, if any, and (iii) after the payment in full
of all amounts described in the preceding clauses (i) and (ii),
finance a distribution or dividend (directly or indirectly) to PEI
(it being acknowledged and agreed that the amount of such
distribution or dividend shall not exceed the amount of capital
contributions made (directly or indirectly) by PEI to Borrower
after the Closing Date in connection with or related to the
development, construction, installation, start-up or testing of the
Project). To the extent that proceeds of the Term Loans are not
sufficient to pay in full all of the amounts described in clauses
(i), (ii) and (iii) of the preceding sentence, such proceeds will
be applied first to the amounts described in clause (i) of
the preceding sentence, second to the amounts described in
clause (ii) of the preceding sentence and third to the
amounts described in clause (iii) of the preceding sentence until
all of such proceeds have been disbursed. Any amount described in
clauses (i) and (ii) of the first sentence of this paragraph not
paid with the proceeds of the Term Loans will be payable in full by
or on behalf of Borrower on the date on which the Term Loans are
disbursed.”
(c) Amendment to the Definition of Term Loan
Conversion Date . The
definition of “Term Loan Conversion Date” is hereby
amended to be and read in its entirety as follows:
“ Term Loan Conversion Date ”
means the date on which Borrower borrows Term Loans in the
aggregate initial principal amount equal to the maximum amount
permitted pursuant to the definition of “Aggregate Term Loan
Commitment” following the delivery of a Notice of Borrowing
pursuant to Section 2.2(c) and the satisfaction of the conditions
precedent contained in Section 3.3, which date must occur on or
prior to December 15, 2006.”
Section 1.3. Amendments to Reflect Early Termination and
Prepayment Provisions .
(a) Amendment to Section 2.8(b) of the Original Loan
Agreement . Section
2.8(b) of the Original Loan Agreement is hereby amended to be and
read in its entirety as follows:
“(b) Optional Prepayment . Borrower may, on any Business Day following
the Term Loan Conversion Date, after having given the
Administrative Agent at least ten (10) Business Days’ prior
revocable notice and five (5) Business Days’ prior
irrevocable notice, prepay in full the Term Loans and all other
amounts then-outstanding under the Loan Documents (including
amounts under Section 2.3, Section 2.5, Section 2.10 and
Section 8.11). In connection with such prepayment, Borrower will
pay to the Lenders the prepayment fee calculated in accordance with
Section 2.8(c), if any.”
(b) Addition of New Section 2.11 to the Original
Loan Agreement . A new
Section 2.11 is hereby added to the Original Loan Agreement to be
and read in its entirety as follows:
“Section 2.11 Early Termination and Failure to Borrow Term
Loans .
(a) If the Term Loan Conversion Date has not
occurred on or prior to December 15, 2006, Borrower may at its
option terminate this Agreement and the other Loan Documents by
delivering a written notice of such termination to the
Administrative Agent and paying to the Administrative Agent, in
immediately available funds for distribution to the Lenders in
proportion to their Pro Rata Shares of the Aggregate Term Loan
Commitment, a nonrefundable fee in the amount of $1,020,000.00 (the
“ Early Termination Fee ”) (which shall be the
sole fee required in connection with any such termination) and all
other amounts then due and payable under Section 2.10, Section 8.11
and Section 8.12 of this Agreement and the other Loan
Documents.
(b) Without duplication of Borrower’s
obligations under clause (a) above, if Borrower has not
borrowed Term Loans in the aggregate initial principal amount equal
to at least $34,000,000 on or prior to December 15, 2006, and
Borrower has not exercised its rights under clause (a) above, then
Borrower will pay to the Administrative Agent, in immediately
available funds for distribution to the Lenders in proportion to
their Pro Rata Shares of the Aggregate Term Loan Commitment, a
nonrefundable fee in the amount of the product of (i) $1,020,000.00
and (ii) a fraction, the numerator of which is the aggregate
initial principal amount of Term Loans borrowed by Borrower on or
prior to December 15, 2006, and the denominator of which is
34,000,000, such fee being payable to the Administrative Agent on
December 15, 2006, and upon receipt by the Administrative
Agent of such fee and all other amounts then due and payable under
Section 2.10, Section 8.11 and Section 8.12 of this Agreement and
the other Loan Documents, this Agreement and the other Loan
Documents will terminate.
