Item
1.01 Entry into a Material Definitive Agreement.
Amendment
No. 9 to Credit Agreement and Waiver
On
December 18, 2020, Pacific Ethanol Pekin, LLC (“PE Pekin”), an indirect wholly-owned subsidiary of Pacific Ethanol,
Inc. (the “Company’), entered into Amendment No. 9 to Credit Agreement and Waiver (“Amendment No. 9”)
dated December 18, 2020 by and among PE Pekin, Compeer Financial, PCA, a federally-chartered instrumentality of the United States
(“Compeer”), successor by merger to 1st Farm Credit Services, PCA, and CoBank, ACB, a federally-chartered
instrumentality of the United States (“CoBank”), further amending that certain Credit Agreement (as amended, the “Pekin
Credit Agreement”) dated December 15, 2016 by and among PE Pekin, 1st Farm Credit Services, PCA and CoBank.
Under
Amendment No. 9, Compeer and CoBank agreed to waive certain covenant defaults under the Pekin Credit Agreement, including the
covenant requiring PE Pekin, collectively with Illinois Corn Processing, LLC (“ICP”), an indirect wholly-owned subsidiary
of the Company, to pay an aggregate of $40.0 million (the “Paydown Amount”) to the lenders under the Pekin Credit
Agreement (the “Pekin Lenders”) and the lenders under that certain Credit Agreement (the “ICP Lenders”)
dated September 15, 2017 by and among ICP, Compeer and CoBank (as amended, the “ICP Credit Agreement”) on or before
September 30, 2020. The parties also agreed to amend the Pekin Credit Agreement to provide that, notwithstanding the requirement
that the Pekin Lenders and ICP Lenders receive the Paydown Amount, upon receipt by CoBank for the benefit of the Pekin Lenders
and ICP Lenders of an aggregate amount of $24.9 million on or prior to December 21, 2020 (the “December 2020 Paydown Amount”),
the requirement that the Pekin Lenders and ICP Lenders receive the Paydown Amount shall be deemed satisfied. $19,920,000 of the
December 2020 Paydown Amount shall be allocated to the Pekin Lenders, and $4,980,000 of the December 2020 Paydown Amount shall
be allocated to the ICP Lenders. On December 18, 2020, PE Pekin and ICP, collectively, paid the December 2020 Paydown Amount in
full. Following receipt by the Pekin Lenders and ICP Lenders of the December 2020 Paydown Amount, (i) any additional proceeds
arising from any sale of any assets of Pacific Ethanol Central, LLC (“PEC”), a wholly-owned subsidiary of the Company,
or certain specified litigation will be allocated 33%/34%/33% among (a) the Pekin Lenders and ICP Lenders, collectively, (b) the
senior noteholders and (c) the Company, respectively; and (ii) any net cash sales proceeds of the Company’s western assets
shall be allocated first to the senior noteholders up to $20.0 million and then allocated 33%/34%/33% among (a) the Pekin Lenders
and ICP Lenders, collectively, (b) the senior noteholders, and (c) the Company, respectively.
Amendment
No. 9 also contains customary representations and warranties and other customary terms and conditions.
The
description of Amendment No. 9 does not purport to be complete and is qualified in its entirety by reference to Amendment No.
9, which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by this reference.
Fourth
Amended and Restated Revolving Term Note
On
December 18, 2020, PE Pekin entered into a Fourth Amended and Restated Revolving Term Note in favor of Compeer (the “Fourth
Amended and Restated Revolving Term Note”) in the principal amount of $20,580,000 having a maturity date of February 20,
2022. The Fourth Amended and Restated Revolving Term Note also contains other customary terms and conditions.
The
description of the Fourth Amended and Rested Revolving Term Note does not purport to be complete and is qualified in its entirety
by reference to the Fourth Amended and Restated Revolving Term Note, which is filed as Exhibit 10.2 to this Current Report on
Form 8-K and is incorporated herein by this reference.
First
Amendment to Pekin Guaranty
On
December 18, 2020, PE Pekin entered into a First Amendment to Guaranty (the “First Amendment to Pekin Guaranty”) dated
December 18, 2020 in favor of Compeer and CoBank amending that certain Guaranty (the “Original Pekin Guaranty”) dated
December 20, 2019 in favor of Compeer and CoBank. The First Amendment to Pekin Guaranty amends the Original Pekin Guaranty by
amending the term “Guaranteed Amount” to mean the Obligations (as defined in the Pekin Credit Agreement) instead of
the Paydown Amount.
The
First Amendment to Pekin Guaranty also contains customary representations and warranties and other customary terms and conditions.
The
description of the First Amendment to Pekin Guaranty does not purport to be complete and is qualified in its entirety by reference
to the First Amendment to Pekin Guaranty, which is filed as Exhibit 10.3 to this Current Report on Form 8-K and is incorporated
herein by this reference.
Pekin
Intercompany Note
On
December 18, 2020, PE Pekin entered into an Intercompany Revolving Demand Note in favor of ICP (the “Pekin Intercompany
Note”) under which PE Pekin agreed to pay to ICP, on demand, the aggregate unpaid principal amount of all loans made by
PE Pekin to ICP. The Pekin Intercompany Note accrues interest at such rate per annum as shall be agreed upon from time to time
by PE Pekin and ICP. The Pekin Intercompany Note also contains other customary terms and conditions.
The
description of the Pekin Intercompany Note does not purport to be complete and is qualified in its entirety by reference to the
Pekin Intercompany Note, which is filed as Exhibit 10.4 to this Current Report on Form 8-K and is incorporated herein by this
reference.
Amendment
No. 3 to Credit Agreement and Waiver
On
December 18, 2020, ICP entered into Amendment No. 3 to Credit Agreement and Waiver (“Amendment No. 3”) dated December
18, 2020 by and among ICP, Compeer and CoBank, further amending the ICP Credit Agreement.
Under
Amendment No. 3, Compeer and CoBank agreed to waive certain covenant defaults under the ICP Credit Agreement, including the covenant
requiring ICP, collectively with PE Pekin, to pay the Paydown Amount to the Pekin Lenders and the ICP Lenders on or before September
30, 2020. The parties also agreed to amend the ICP Credit Agreement to provide that, notwithstanding the requirement that the
Pekin Lenders and ICP Lenders receive the Paydown Amount, upon receipt by CoBank for the benefit of the Pekin Lenders and ICP
Lenders of the December 2020 Paydown Amount, the requirement that the Pekin Lenders and ICP Lenders receive the Paydown Amount
shall be deemed satisfied. $19,920,000 of the December 2020 Paydown Amount shall be allocated to the Pekin Lenders, and $4,980,000
of the December 2020 Paydown Amount shall be allocated to the ICP Lenders. On December 18, 2020, PE Pekin and ICP, collectively,
paid the December 2020 Paydown Amount in full. Following receipt by the Pekin Lenders and ICP Lenders of the December 2020 Paydown
Amount, (i) any additional proceeds arising from any sale of any assets of PEC or certain specified litigation will be allocated
33%/34%/33% among (a) the Pekin Lenders and ICP Lenders, collectively, (b) the senior noteholders and (c) the Company, respectively;
and (ii) any net cash sales proceeds of the Company’s western assets shall be allocated first to the senior noteholders
up to $20.0 million and then allocated 33%/34%/33% among (a) the Pekin Lenders and ICP Lenders, collectively, (b) the senior noteholders,
and (c) the Company, respectively.
Amendment
No. 3 also contains customary representations and warranties and other customary terms and conditions.
The
description of Amendment No. 3 does not purport to be complete and is qualified in its entirety by reference to Amendment No.
3, which is filed as Exhibit 10.5 to this Current Report on Form 8-K and is incorporated herein by this reference.
Second
Amended and Restated Revolving Term Note
On
December 18, 2020, ICP entered into a Second Amended and Restated Revolving Term Note in favor of Compeer (the “Second Amended
and Restated Revolving Term Note”) in the principal amount of $9,420,000 having a maturity date of September 1, 2022. The
Second Amended and Restated Revolving Term Note also contains other customary terms and conditions.
The
description of the Second Amended and Rested Revolving Term Note does not purport to be complete and is qualified in its entirety
by reference to the Second Amended and Restated Revolving Term Note, which is filed as Exhibit 10.6 to this Current Report on
Form 8-K and is incorporated herein by this reference.
First
Amendment to ICP Guaranty
On
December 18, 2020, ICP entered into a First Amendment to Guaranty (the “First Amendment to ICP Guaranty”) dated December
18, 2020 in favor of Compeer and CoBank amending that certain Guaranty (the “Original ICP Guaranty”) dated December
20, 2019 in favor of Compeer and CoBank. The First Amendment to ICP Guaranty amends the Original ICP Guaranty by amending the
term “Guaranteed Amount” to mean the Obligations (as defined in the ICP Credit Agreement) instead of the Paydown Amount.
The
First Amendment to ICP Guaranty also contains customary representations and warranties and other customary terms and conditions.
The
description of the First Amendment to ICP Guaranty does not purport to be complete and is qualified in its entirety by reference
to the First Amendment to ICP Guaranty, which is filed as Exhibit 10.7 to this Current Report on Form 8-K and is incorporated
herein by this reference.
ICP
Intercompany Note
On
December 18, 2020, ICP entered into an Intercompany Revolving Demand Note in favor of PE Pekin (the “ICP Intercompany Note”)
under which ICP agreed to pay to PE Pekin, on demand, the aggregate unpaid principal amount of all loans made by ICP to PE Pekin.
The ICP Intercompany Note accrues interest at such rate per annum as shall be agreed upon from time to time by ICP and PE Pekin.
The ICP Intercompany Note also contains other customary terms and conditions.
The
description of the ICP Intercompany Note does not purport to be complete and is qualified in its entirety by reference to the
ICP Intercompany Note, which is filed as Exhibit 10.8 to this Current Report on Form 8-K and is incorporated herein by this reference.
Second
Amendment to Security Agreement
On
December 18, 2020, PEC entered into a Second Amendment to Security Agreement (the “Second Amendment to Security Agreement”)
dated December 18, 2020 by and between PEC and CoBank, further amending that certain Security Agreement (as amended, the “Security
Agreement”) dated March 20, 2019 by and between PEC and CoBank.
The
Second Amendment to Security Agreement amends the termination provisions of the Security Agreement by providing that the Security
Agreement shall terminate automatically upon the date that payment in full of the obligations under the Pekin Credit Agreement
and ICP Credit Agreement has occurred. Upon such termination date, CoBank shall duly assign, transfer and deliver to or at the
direction of PEC such collateral as may then remain in possession of CoBank, together with any monies at the time held by CoBank,
and execute and deliver to PEC proper instruments acknowledging the satisfaction and termination of the Security Agreement. Until
the termination date, the sale of any of PEC, PE Pekin, ICP and their respective subsidiaries shall be subject to the consent
of the Pekin Lenders and ICP Lenders, which shall not be unreasonably withheld, conditioned or delayed.
The
Second Amendment to Security Agreement also contains customary representations and warranties and other customary terms and conditions.
The
description of the Second Amendment to Security Agreement does not purport to be complete and is qualified in its entirety by
reference to the Second Amendment to Security Agreement, which is filed as Exhibit 10.9 to this Current Report on Form 8-K and
is incorporated herein by this reference.
First
Amendment to Intercreditor Agreement
On
December 18, 2020, the Pekin Lenders and ICP Lenders entered into a First Amendment to Intercreditor Agreement (the “First
Amendment to Intercreditor Agreement”) dated December 18, 2020 by and among the Pekin Lenders and the ICP Lenders, amending
that certain Intercreditor Agreement (the “Intercreditor Agreement”) dated March 20, 2020 by and among the Pekin Lenders
and ICP Lenders.
The
First Amendment to Intercreditor Agreement amends the Intercreditor Agreement by deleting certain references to Paydown Amount
and by requiring that, until the December 2020 Paydown Amount is received in full, rather than the Paydown Amount as set forth
in the Intercreditor Agreement, the Pekin Lenders shall receive 80% of any paydown proceeds received by the Pekin Lenders and/or
ICP Lenders and shall apply such funds first to pay down the principal of the term loan under the Pekin Credit Agreement until
paid in full, and then to the revolving term loan under the Pekin Credit Agreement. The ICP Lenders shall receive the remaining
20% of such paydown proceeds and shall apply such funds to the principal paydown of the term loan under the ICP Credit Agreement
until paid in full, and then to the revolving term loan under the ICP Credit Agreement.
The
First Amendment to Intercreditor Agreement also contains other customary terms and conditions.
The
description of the First Amendment to Intercreditor Agreement does not purport to be complete and is qualified in its entirety
by reference to the First Amendment to Intercreditor Agreement, which is filed as Exhibit 10.10 to this Current Report on Form
8-K and is incorporated herein by this reference.
First
Amendment to Assignment of Notes and Deeds of Trust
On
December 18, 2020, PEC and CoBank entered into a First Amendment to Assignment of Notes and Deeds of Trust (the “First Amendment
to Assignment”) dated December 18, 2020 by and between PEC and CoBank, amending that certain Assignment of Notes and Deeds
of Trust (the “Original Assignment”) dated April 15, 2020 by and among PEC, Pacific Aurora, LLC and CoBank.
The
First Amendment to Assignment amends the Original Assignment by deleting certain references to Paydown Amount and by making payment
in full of the obligations under the Pekin Credit Agreement and ICP Credit Agreement, rather than payment in full of the Paydown
Amount, a condition upon which CoBank shall reassign to PEC the notes and deeds of trust subject to the Original Assignment.
The
First Amendment to Assignment also contains other customary terms and conditions.
The
description of the First Amendment to Assignment does not purport to be complete and is qualified in its entirety by reference
to the First Amendment to Assignment, which is filed as Exhibit 10.11 to this Current Report on Form 8-K and is incorporated herein
by this reference.