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EXHIBIT 10.2
CONFIDENTIALITY, NON-COMPETITION, NON-SOLICITATION
AND CONSULTING AGREEMENT
CONFIDENTIALITY, NON-COMPETITION, NON-SOLICITATION AND
CONSULTING
AGREEMENT dated March 23, 2005
("AGREEMENT") by and between, Pacific Ethanol,
Inc., a Delaware corporation (the
"COMPANY") and Philip B. Kart (the
"CONSULTANT").
RECITALS
WHEREAS, Accessity Corp., an 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, pursuant to the Share Exchange Agreement,
is
resigning from Accessity and the Company
and relinquishing certain rights to
receive cash and benefits pursuant to his
employment agreement with Accessity;
and whereas, the Consultant has the ability
and background to effectively
compete in this area subsequent to his
resignation, having spent extensive time,
encompassing more than 10 years, in the
agricultural and corn industry which
provides the basic feedstock for ethanol
and nearly all ethanol businesses are
currently owned by agricultural companies,
and the Consultant has held executive
positions in agricultural corn companies
that grew through acquisition with
Consultant as a key financial officer
engaged in the acquisition and operational
control of such companies, having direct
access to both equity and bank lending
sources, and has retained those contacts,
and the Company has defined a key
strategy to acquire ethanol businesses from
agricultural and other entities; and
WHEREAS, the Company is a defendant in a certain law suit which
have
been brought by Gerald M. Zutler in
connection with Mr. Zutler's previous
employment with Accessity (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
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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
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 and 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
financial
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,
advice for structuring financings and fund
raising issues, broker communications
and investor relations matters, transition
and information related to the
Company's 401(k) pension plan and related
procedures, issues and problems which
have occurred, information regarding the
transferred account balances and
details related thereto, information and
advice related to disclosure
requirements of the Securities Exchange
Commission ("SEC"), Accessity's prior
SEC filings as required under the
Securities Exchange Act of 1934, as amended
(the "EXCHANGE ACT") and advice regarding
cash management and investments
including the strategies regarding the
current invested funds; 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
information constitutes a protectable
business interest of the Company.
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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 o
