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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
