<PAGE>
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
-1-
<PAGE>
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
-2-
<PAGE>
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
perm
