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EXHIBIT 4.1
CONFIDENTIALITY, NON-COMPETITION, NON-SOLICITATION
AND CONSULTING AGREEMENT
CONFIDENTIALITY, NON-COMPETITION AND NON-SOLICITATION AGREEMENT
dated
March 23, 2005 by and between, Pacific Ethanol, Inc., a Delaware
corporation
(the "COMPANY") and Barry Siegel (the "CONSULTANT").
RECITALS
WHEREAS, Accessity Corp., a New York corporation ("ACCESSITY"),
has
entered into a Share Exchange Agreement (the "SHARE EXCHANGE
AGREEMENT") by and
among Accessity; Pacific Ethanol, Inc., a California corporation
("PEI");
Kinergy Marketing, LLC, an Oregon limited liability company
("KINERGY");
ReEnergy, LLC, a California limited liability company
("REENERGY," and together
with PEI and Kinergy, the "ACQUIRED COMPANIES"); each of the
shareholders of PEI
(collectively, the "PEI SHAREHOLDERS"); each of the holders of
options or
warrants to acquire shares of common stock of PEI (collectively,
the "PEI
WARRANTHOLDERS"); each of the limited liability company members
of Kinergy
identified on the signature pages hereof (collectively, the
"KINERGY Members");
each of the limited liability company members of ReEnergy
identified on the
signature pages hereof (collectively, the "REENERGY MEMBERS");
and
WHEREAS, immediately prior to the closing of the Share
Exchange
Agreement, Accessity will merge with and into the Company;
and
WHEREAS, the Consultant, as a condition to and pursuant to the
Share
Exchange Agreement, the parties have requested that the
Consultant resign from
Accessity and the Company and relinquishing certain rights
pursuant to his
employment agreement with Accessity to receive cash and
benefits; and, whereas,
the Consultant has the ability and background to effectively
compete with the
Company subsequent to his resignation having spent extensive
time, encompassing
more than 15 years, as CEO of a public company operational
control of such
companies, extensive contacts with both equity and bank lending
sources; and,
whereas the Company has as a key strategy to manufacture and
market ethanol and
other alternative fuels; and
WHEREAS, Accessity and Consultant are defendants in a certain
law suit
which have been brought by Gerald M. Zutler in connection with
Mr. Zutler's
previous employment with the Company (the "ZUTLER ACTION") and
the events that
occurred during Consultant's period of employment with Accessity
and of which
the Consultant has certain direct knowledge; and
WHEREAS, Accessity has filed suit against Mercator Group LLC,
Global
Taurus LLC, et al, for in excess of $100 million (the "MERCATOR
ACTION") related
to a transaction that was contemplated by Accessity during the
period of the
Consultant's employment with Accessity with the Consultant
holding unique
knowledge that may be key to the successful prosecution of this
suit; and
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WHEREAS, the Company and the Consultant desire to enter into
this
Agreement under which the Consultant will provide consulting
services and
cooperation in connection with the Zutler Action and Mercator
Action or any
other related litigation or disputes that may subsequently be
brought arising
out of events that occurred during the period that the
Consultant was employed
by Accessity; and
WHEREAS, the Consultant has many years of experience as chief
executive
officer of a public company and by using this experience can
assist in the
transition of the new management following the closing of the
Share Exchange
Agreement by assisting with review and advice regarding press
releases,
discussions with the new senior management regarding Nasdaq
listing matters,
management of a public company, dealings with the Securities and
Exchange
Commission ("SEC"), advice for structuring debt financings,
broker
communications, investor and public relations matters, strategic
acquisition
evaluation and negotiation, negotiations for acquisitions,
divestitures and
other contractual relationships, the search and the evaluation
of management
talent, evaluation and selection of professional, marketing and
sales advice;
and
WHEREAS, the Company wishes to protect the confidential
information of
the Company and to protect against the Consultant's skills,
knowledge,
experience, ideas and influence being used for the benefit of a
competitor of
the Company. Consultant is willing to enter into an agreement to
provide such
protection to the Company upon the terms and conditions set
forth in this
Agreement.
NOW, THEREFORE, in consideration of the foregoing and the
mutual
agreements herein contained, the parties agree as follows.
1. CONFIDENTIALITY, NON-COMPETITION AND NON-SOLICITATION.
(a) Consultant acknowledges that: the business of acquiring
manufacturing, distributing, reselling and brokering Ethanol
and/or other
alternative fuels (the "BUSINESS") is intensely competitive and
Consultant's
former and current position with Accessity and the Company has
exposed the
Consultant to knowledge of confidential information of the
Company; the direct
and indirect disclosure of any such confidential information to
existing or
potential competitors of the Company would place the Company at
a competitive
disadvantage and would do damage, monetary or otherwise, to the
Company's
Business; and the engaging by Consultant in any of the
activities prohibited by
this Agreement may constitute improper appropriation and/or use
of such
information and trade secrets. Consultant expressly acknowledges
the trade
secret status of the confidential information and that the
confidential
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information constitutes a protectable business interest of the
Company.
Confidential information and trade secrets include, but are not
limited to,
customer and client lists, price lists, marketing and sales
strategies and
procedures, operational and equipment techniques, business plans
and systems,
quality control procedures and systems, special projects and
technological
research, including projects, research and reports for any
entity or client or
any project, research, report or the like concerning sales or
manufacturing or
new technology, employee compensation plans and any other
information relating
thereto, and any other records, files, drawings, inventions,
discoveries,
applications or processes which are not in the public domain
(all the foregoing
shall be referred to herein as the "CONFIDENTIAL
INFORMATION").
(b) For purposes of this Agreement, the term "COMPANY" shall
be construed to include the Company and its current and future
subsidiaries and
affiliates engaged in the Business.
(c) From and after the Closing of the Share Exchange
Agreement
(the "EFFECTIVE TIME"), Consultant shall not, directly or
indirectly, whether
individually, as a director, stockholder, owner, partner,
employee, principal or
agent of any business, or in any other capacity, make known,
disclose, furnish,
make available or utilize any of the confidential information of
the Company
other than in the proper performance of the duties contemplated
thereafter, or
as required by a court of competent jurisdiction or other
administrative or
legislative body; PROVIDED THAT, prior to disclosing any of the
confidential
information to a court or other administrative or legislative
body, Consultant
shall promptly notify the Company so that it may seek a
protective order or
other appropriate remedy. Consultant agrees to return all
confidential
information, including all photocopies, extracts and summaries
thereof, and any
such information stored electronically on tapes, computer disks
or in any other
manner to the Company at any time upon request by the Company
and upon the
termination of his engagement for any reason.
(d) From the Effective Time until the fifth anniversary of
the
Effective Time (the "NON-COMPETITION Period"), Consultant shall
not engage in
Competition (as defined below) with the Company. For purposes of
this Agreement,
"COMPETITION" by Consultant shall mean Consultant's engaging in,
or otherwise
directly or indirectly being employed by or acting as a the
Consultant or lender
to, or being a director, officer, employee, principal, licensor,
trustee,
broker, agent, stockholder, member, owner, joint venturer or
partner of, or
permitti
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