AMENDED
AND RESTATED PROMISSORY NOTE
|
$30,000,000
|
Fresno,
California
|
|
|
November
7, 2008
|
FOR VALUE
RECEIVED, the undersigned, PACIFIC ETHANOL, INC., a Delaware corporation, with
its principal place of business at 400 Capitol Mall, Suite 2060, Sacramento,
California 95814 (“Borrower”), hereby
promises to pay to LYLES UNITED, LLC, a Delaware limited liability company, with
its principal place of business at 1210 West Olive Ave., Fresno, California
93728 or its assigns (“Lender”), the
principal sum of Thirty Million Dollars ($30,000,000), together with interest
thereon as hereinafter provided until this Note is paid in full.
1. Principal
and Interest Payments. Interest on the unpaid principal amount hereof
shall accrue at a rate per annum equal to the Prime Rate of interest as reported
from time to time in The Wall
Street Journal, plus three percent (3.00%), computed on the basis of a
360-day year of twelve 30-day months. All accrued and unpaid interest on this
Note shall be due and payable on the first business day of each calendar month
commencing on December 1, 2008 and continuing until the outstanding principal
amount hereof shall have been paid in full. All remaining principal and any
accrued but unpaid interest then owing under this Note shall be due and payable
on March 15, 2009 (the “Maturity Date”)
unless the obligations hereunder are earlier accelerated or satisfied in
accordance with the provisions of this Note. All payments by Borrower
hereunder shall first apply to accrued and unpaid interest and then to the
remaining principal balance under this Note.
2. Prepayment.
Borrower shall have the right to prepay all or any part of the remaining balance
of this Note at any time, without premium or penalty.
3. Payments
and Computations. All payments on account of indebtedness evidenced by
this Note shall be made not later than 5:00 p.m., California time, on the day
when due in lawful money of the United States. Payments are to be made at such
place as Lender may, from time to time, in writing appoint, and in the absence
of such appointment, then at the principal place of business of Lender as set
forth above.
4. Events of
Default. The occurrence of any of the following shall constitute an
“Event of Default” under this Note:
(a) Failure to
Pay. Borrower shall fail to pay (i) when due any principal
payment on the date due hereunder, or (ii) any interest or other payment
required under the terms of this Note on the date due, and any such payment
shall not have been made within five (5) days of Borrower’s receipt of Lender’s
written notice to Borrower of such failure to pay; or
(b) Breach of Note or other
Agreements. Borrower, or any direct or indirect subsidiary of Borrower,
shall fail to comply with any material provision as to which it is obligated
under:
(i) this
Note; or
(ii) that
certain Promissory Note dated October 20, 2008 in the principal amount of One
Million Five Hundred Thousand Dollars ($1,500,000) by Borrower in favor of Lyles
Mechanical Co.; or
(iii) that
certain Loan Restructuring Agreement dated the date hereof by and among Pacific
Ethanol Imperial, LLC, Borrower and Lender; or
(iv) that
certain Irrevocable Joint Instruction Letter dated the date hereof and executed
by Borrower and Lender and acknowledged and agreed to by Pacific Ethanol
California, Inc.; or
(v) the
purchase order or construction contract, still under negotiation, relating to
work performed by Lyles Mechanical Co. in connection with the beer well repair
and other matters, as contemplated by paragraph 4 of that certain Memorandum of
Understanding dated as of October 20, 2008 by and among Borrower, Pacific
Ethanol Stockton, LLC and Lyles Mechanical Co., but only after such purchase
order or construction contract is executed;
and any
such failure to comply shall not have been cured within ten (10) days of
Borrower’s receipt of Lender’s written notice to Borrower of such failure to
comply.
(c) Voluntary Bankruptcy or Insolvency
Proceedings. Borrower shall (i) apply for or consent to the appointment
of a receiver, trustee, liquidator or custodian of itself or of all or a
substantial part of its property, (ii) be unable, or admit in writing its
inability, to pay its debts generally as they mature, (iii) make a general
assignment for the benefit of its or any of its creditors, (iv) be dissolved or
liquidated, (v) become insolvent (as such term may be defined or interpreted
under any applicable statute), (vi) commence a voluntary case or other
proceeding seeking liquidation, reorganization or other relief with respect to
itself or its debts under any bankruptcy, insolvency or other similar law now or
hereafter in effect or consent to any such relief or to the appointment of or
taking possession of its property by any official in an involuntary case or
other proceeding commenced against it, or (vii) take any action for the purpose
of effecting any of the foregoing; or
(d) Involuntary Bankruptcy or Insolvency
Proceedings. Proceedings for the appointment of a receiver, trustee,
liquidator or custodian of Borrower or of all or a substantial part of the
property thereof, or an involuntary case or other proceedings seeking
liquidation, reorganization or other relief with respect to Borrower or the
debts thereof under any bankruptcy, insolvency or other similar law now or
hereafter in effect shall be commenced and an order for relief entered or such
proceeding shall not be dismissed or discharged within sixty (60) days of
commencement.
5. Rights of
Lender upon Default. Upon the occurrence or existence of any Event of
Default (other than an Event of Default, referred to in Paragraphs 5(c) and
5(d)) and at any time thereafter during the continuance of such Event of
Default, Lender may, by written notice to Borrower, immediately declare all
outstanding obligations payable by Borrower hereunder to be immediately due and
payable without presentment, demand, protest or any other notice of any kind,
all of which are hereby expressly waived, anything contained herein to the
contrary notwithstanding. Upon the occurrence or existence of any Event of
Default described in Paragraphs 5(c) and 5(d), immediately and without notice,
all outstanding obligations payable by Borrower hereunder shall automatically
become immediately due and payable, without presentment, demand, protest or any
other notice of any kind, all of which are hereby expressly waived, anything
contained herein to the contrary notwithstanding. Upon the occurrence of an
Event of Default, the interest rate on this Note shall increase to a rate per
annum equal to the Prime Rate of interest as reported from time to time in The
Wall Street Journal, plus six percent (6.00%), simple interest, per annum until
such default is cured, and is payable together with the principal amount hereof
in accordance with the payment terms set forth herein. In addition to the
foregoing remedies, upon the occurrence or existence of any Event of Default,
Lender may exercise any other right, power or remedy permitted by law, either by
suit in equity or by action at law, or both.
6. Notices.
All notices, requests, demands, approvals, consents, waivers and other
communications required or permitted to be given hereunder shall be in writing,
with copies to all the other parties hereto, and shall be deemed to have been
duly given when (i) if delivered by hand, upon receipt, (ii) if sent by
nationally recognized overnight delivery service (receipt requested), the next
business day or (iii) if mailed by first-class registered or certified mail,
return receipt requested, postage prepaid, four days after posting in the U.S.
mails, in each case if delivered to the following addresses:
If to
Borrower: Pacific
Ethanol, Inc.
400 Capitol Mall, Suite
2060
Sacramento, California
95814
Attn: Chief
Financial Officer
AND
Attn: General
Counsel
If to
Lender: Lyles
United, LLC
1210 West Olive Ave.
Fresno, California 93728
Attn: Will
Lyles, Vice President
or such
other address or facsimile number as either party may designate to the other
party hereto in accordance with the aforesaid procedure. Each party shall
provide notice to the other party of any change in address or facsimile
number.
7. Applicable
Law. This Note shall be construed in accordance with the laws of the
State of California, without regard to conflicts of laws
principles. Borrower irrevocably submits to the exclusive
jurisdiction of any California State or United States Federal court sitting in
Fresno County, California over any action or proceeding arising out of or
relating to this Note, and irrevocably agrees that all claims in respect of such
action or proceeding may be heard and determined in such California State or
Federal court. Borrower agrees that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by
law. Borrower waives any objection to venue in the State of
California and any objection to an action or proceeding in the State of
California on the basis of forum non conveniens.
8. Severability.
The parties hereto intend and believe that each provision in this Note comports
with all applicable local, state and federal laws and judicial decisions.
However, if any provision or provisions, or if any portion of any provision or
provisions, of this Note is found by a court of law to be in violation of any
applicable local, state or federal ordinance, statute, law, administrative or
judicial decision, or public policy, and if the court should declare that
portion, provision or provisions to be illegal, invalid, unlawful, void or
unenforceable as written, then it is the intent of Borrower and Lender that such
portion, provision or provisions be given force to the fullest possible extent
that they are legal, valid and enforceable, that the remainder of this Note
shall be construed as if the illegal, invalid, unlawful, void or unenforceable
portion, provision or provisions were not contained herein, and that the rights,
obligations and interest of Borrower and Lender under the remainder of this Note
shall continue in full force and effect.
9. Usury.
In the event any interest is paid on this Note which is deemed to be in excess
of the then legal maximum rate, then that portion of the interest payment
representing an amount in excess of the then legal maximum rate shall be deemed
a payment of principal and applied against the principal of this
Note.
10. Expenses;
Waiver. If action is instituted to collect this Note, the Borrower shall
pay all costs and expenses, including, without limitation, reasonable attorneys’
fees and costs, incurred in connection with such action. In addition, the
successful or prevailing party in any proceeding shall be entitled to recover
reasonable attorneys’ fees and other costs incurred in such proceeding. Borrower
and all parties now or hereafter liable for the payment hereof, whether as
endorser, guarantor, surety or otherwise, generally waive demand, presentment
for payment, notice of dishonor, protest and notice of protest, notice of intent
to accelerate and notice of acceleration, diligence in collecting or bringing
suit against any party hereto, and all other notices, and agree to all
extensions, renewals, indulgences, releases or changes which from time to time
may be granted by the Lender hereof and to all partial payments hereon, with or
without notice before or after maturity.
11. Successors
and Assigns. The rights and obligations hereunder of Borrower and Lender
shall be binding upon and benefit the permitted successors, assigns, heirs,
administrators and transferees of the parties.
12. Waiver
and Amendment. Any provision of this Note may be amended, waived or
modified only upon the prior written consent of Borrower and
Lender.
13. Headings.
The headings of the Paragraphs of this Note are inserted for convenience only
and shall not be deemed to constitute part of this Note or to affect the
construction hereof.
14. Time of
the Essence. Time is of the essence as to all dates set forth
herein.
Borrower
has executed and delivered this Note as of the day and year first set forth
above.