<PAGE>
EXHIBIT 10.18
INTERCREDITOR AGREEMENT
THIS
INTERCREDITOR AGREEMENT ("Agreement") is entered into as of
September
11, 2002, by and between BANK
OF THE WEST and CoBANK, ACB.
Recitals
A. Bank of the West has made
available to Diamond Walnut Growers, Inc., an
incorporated non-profit
agricultural marketing association ("Borrower"), on an
unsecured basis, a short-term
revolving line of credit providing for advances
and the creation and discount
of acceptances for Borrower's account not to
exceed at any time an
aggregate principal amount of $25,000,000 (the "Bank of
the West
Indebtedness").
B. CoBank, ACB has made
available to Borrower, all on an unsecured basis (except
for certain stock collateral
described in Paragraph 1 below), (a) a term loan in
the original principal amount
of $10,000,000 evidenced by a promissory note
dated March 13, 1991, and (b)
short-term revolving seasonal line of credit
providing for loans or
advances not to exceed at any time an aggregate
principal
amount of $50,000,000
(collectively the "CoBank, ACB Indebtedness"). (The Bank
of the West Indebtedness and
the CoBank, ACB Indebtedness, and any other
indebtedness of Borrower to
the parties hereto for new short-term or long-term
and/or to refinance any
outstanding long-term debt are sometimes hereinafter
collectively referred to as
the "Bank Indebtedness").
C. Bank of the West and
CoBank, ACB (each individually, a "Bank" and
collectively, the "Banks")
desire to enter into certain agreements with respect
to the Bank
Indebtedness.
D. As used herein, the term
"short-term" shall mean borrowings which mature in
one year or less and the term
"long-term" shall mean borrowings which mature
after one year.
NOW,
THEREFORE, in consideration of the mutual covenants
hereinafter
contained, Bank of the West
and CoBank, ACB hereby agree as follows:
1. Agreements With Respect to
Taking Collateral. Each Bank hereby agrees not to
take any collateral of any
kind as security for any short-term Bank Indebtedness
owing to such Bank, whether
now existing or hereafter arising. In addition, each
Bank hereby agrees not to
take any personal property collateral of any kind,
excluding equipment and
fixtures, as security for any long-term Bank
Indebtedness owing to such
Bank, whether now existing or hereafter arising. Each
Bank hereby further agrees
that either Bank may obtain a lien on any real
property, fixtures and
equipment as security for any long-term Bank
Indebtedness
owing to such Bank.
Notwithstanding the foregoing, CoBank, ACB shall have
and
shall maintain an exclusive
security interest in CoBank's equities and patronage
dividends owned by Borrower
as security for any indebtedness of Borrower to
CoBank, ACB.
2. Notice of Default. Each
Bank hereby agrees to notify promptly the other Bank
of any def
