FOR
VALUE RECEIVED, the undersigned, PACIFIC ETHANOL, INC., a Delaware corporation
(“Borrower”), hereby promises to
pay to WILLIAM L. JONES or his assigns (“Lender”), the principal sum of
One Million Dollars ($1,000,000) (or such lesser amount as shall equal the
aggregate unpaid principal amount loaned hereunder by Lender) together with
interest thereon as hereinafter provided until this Note is paid in
full.
1. Loans.
Borrower may from time to time request in writing, and thereafter Lender
shall
make, by the next business day following such written request, loans hereunder
in an aggregate amount of up to One Dollars ($1,000,000). The aggregate
principal amount of the loans made at any time under this Note shall never
exceed the face amount of this Note.
2. Principal
and Interest Payments. Interest on the
unpaid principal amount hereof shall
accrue at a rate per annum equal to eight percent (8.0%). All principal and
accrued and unpaid interest then owing under this Note shall be due and payable
on the first (1st)
anniversary of the date first set forth above (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.
3. 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.
4. 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 in Paragraph
7 below.
5.
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. Borrower, or
any direct or indirect subsidiary of Borrower,
shall fail to comply with any material provision as to which it is obligated
under this Note 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) make a general
assignment for the benefit of its creditors, (iii) be dissolved or liquidated,
(iv) 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 (v) 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.
6. 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 by three percent (3.00%) per annum until such
default is cured. 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.
7. Notices. All notices,
requests, demands, approvals, consents, waivers and other communications
required or permitted to be given hereunder shall be in writing 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:
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If to
Borrower: |
Pacific Ethanol,
Inc. |
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400
Capitol Mall, Suite 2060
Sacramento,
California 95814
Attn:
General Counsel
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If to
Lender: |
William
L. Jones
5705 N. West Avenue
Fresno, CA 93711
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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.
8.
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.
9.
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.
10. 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.
11. 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.
12. 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.
13. Waiver
and Amendment. Any provision of this Note may be amended, waived
or
modified only upon the prior written consent of Borrower and
Lender.
14. 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.
15. Time of
the Essence. Time is of the essence as to all dates set forth
herein.
Borrower
and Lender have executed and delivered this Note as of the day and year first
set forth above.
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PACIFIC
ETHANOL, INC.
a
Delaware corporation
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By:
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/s/ John
T. Miller |
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John
T. Miller, Chief Operating Officer |
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/s/ William L.
Jones |
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WILLIAM L.
JONES |
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