PURCHASE AND OPTION AGREEMENT
EXHIBIT
99.1
This
Purchase and Option Agreement (“Agreement”) is
entered into as of March 2, 2010, by and between Socius XX XX, Ltd., a Bermuda
exempted company (“Purchaser”), and
Xxxxx United, LLC, a Delaware limited liability company (“Creditor”), and, as
to the Acknowledgment at the end of this Agreement, by Pacific Ethanol, Inc., a
Delaware corporation (“PEI”).
RECITALS
A. PEI is
indebted to Creditor pursuant to the terms of that certain Amended and Restated
Promissory Note, payable to Creditor, dated November 7, 2008, in the principal
amount of $30,000,000 (the “Note”).
B. The
obligations of PEI to Creditor under the Note are secured and/or credit enhanced
by the terms of (i) that certain Security Agreement dated as of November 7, 2008
between Pacific Ag. Products, LLC, a California limited liability company and
indirectly wholly-owned subsidiary of PEI, and Creditor (the “Security Agreement”),
(ii) that certain Irrevocable Joint Instruction Letter dated November 7, 2008
among PEI, Pacific Ethanol California, Inc., a California corporation and
wholly-owned subsidiary of PEI, and Creditor (the “Instruction Letter”),
(iii) that certain Unconditional Guaranty dated November 7, 2008 by Pacific Ag.
Products, LLC in favor of Creditor (the “PacAg Guaranty”), and
(iv) that certain Limited Recourse Guaranty dated November 7, 2008 by
Pacific Ethanol California, Inc. in favor of Creditor (the “PEC Guaranty”) (the
Security Agreement, Instruction Letter, PacAg Guaranty and PEC Guaranty
hereinafter are collectively referred to as the “Credit Enhancement
Documents”).
C. As of the
date of this Agreement, PEI is in default under the Note. PEI is also
indebted to Creditor for accrued and unpaid interest, late fees and costs, and
reimbursable fees or expenses related to the Note and the defaults thereunder,
for a total amount due and payable by PEI to Creditor of $33,345,009
(consisting of $30,000,000 principal amount, plus $2,945,009 in unpaid interest
accrued through February 28, 2010, plus $400,000 in reimbursable fees or
expenses) as of the date hereof (such total amount, plus all additional interest
that accrues on the unpaid principal balance under the Note on and after
February 28, 2010, plus any additional reimbursable fees or expenses incurred or
arising after February 28, 2010, being collectively referred to herein as the
“Indebtedness”).
D. Creditor
desires to sell, transfer and assign to Purchaser its right to receive payment
on a portion of the Indebtedness, namely $5 million of principal amount of and
under the Note (the “Subject $5 Million
Claim”), and Purchaser desires to purchase the Subject $5 Million Claim,
all subject to the terms and conditions set forth below.
E. Creditor
and Purchaser desire Creditor to have the option in the future, to be exercised
at the sole and absolute discretion of Creditor, if at all, to sell, transfer
and assign to Purchaser the right of Creditor to receive payment on additional
portions of Creditor’s claim against PEI in respect of the
Indebtedness, in tranches of $5 million each except as otherwise set forth
herein (each such tranche, an “Additional Claim”),
up to the full amount of the then-outstanding Indebtedness, or such lesser
amount as may be determined by Creditor in its sole and absolute
discretion. If any such option is exercised by Creditor in its sole
and absolute discretion with respect to one or more Additional Claims, then
Purchaser desires to purchase such Additional Claims, all subject to the terms
and conditions set forth below.
NOW,
THEREFORE, in consideration of the agreements contained herein and for other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto hereby agree as follows:
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1. Purchase and Sale of Subject
$5 Million Claim; Excluded Rights: Purchase Price.
(a) Upon the
terms of this Agreement and subject only to the conditions subsequent set forth
in Section 2 below, Purchaser hereby purchases from Creditor, and Creditor
hereby sells, transfers, conveys and assigns to Purchaser, for the consideration
specified below, all right, title and interest in and to the Subject $5 Million
Claim. It is expressly understood and agreed by the parties that the
Subject $5 Million Claim does not include, and the Purchaser under this
Agreement is not purchasing or otherwise obtaining, (i) any rights under the
Credit Enhancement Documents, which Creditor hereby expressly retains and
preserves for its own benefit, (ii) any and all claims for accrued and unpaid
interest owing to Creditor by PEI as of the date hereof under or in connection
with the Note, including, without limitation, all accrued and unpaid interest on
the Subject $5 Million Claim as of the date hereof, all of which claims are
expressly retained and preserved by Creditor for its own benefit, and (iii) any
and all claims of Creditor against PEI for reimbursable fees or expenses under
or in connection with the Note, which are expressly retained and preserved by
Creditor for its own benefit.
(b) The total
consideration to be paid by Purchaser to Creditor for the Subject $5 Million
Claim shall be Five Million Dollars ($5,000,000) (the “Purchase
Price”). The Purchase Price shall be due and payable by
Purchaser to Creditor by wire transfer on the date set forth in sub-paragraph
(b) of Section 2 below.
2. Conditions
Subsequent.
(a) Notice of Filing of Action
and Settlement Motion. No later than close of business
on the third business day after the date of this Agreement, Purchaser shall
provide written notice to Creditor that (i) Purchaser has filed an action (the
“Action”)
against PEI in the Superior Court of the State of California for the County of
Los Angeles (the “Court”) for
collection of the Subject $5 Million Claim, specifying the date that the Action
was commenced (the “Action Commencement
Date”), and (ii) a motion in the Action has been filed seeking Court
approval of the settlement of the Action on terms acceptable to Purchaser and in
accordance with Section 3(a)(10) of the Securities Act of 1933, as amended (the
“Settlement”). If
such written notice is not provided by Purchaser to Creditor by the close of
business on the third business day after the date of this Agreement, then this
Agreement (including, without limitation, the provisions in the
remainder of this Section 2) shall be deemed void ab initio and of no
further force or effect, and no sale or assignment of the Subject $5 Million
Claim shall have occurred or be deemed to have occurred.
(b) Court Approval
Notice. Purchaser shall provide written notice to Creditor
reasonably promptly after the Court has entered an order in form and substance
acceptable to Purchaser approving the Settlement (such written notice being
hereinafter referred to as the “Court Approval
Notice”). In all events and circumstances,
if Purchaser has not provided the Court Approval Notice by the close
of business on the tenth business day after the Action Commencement Date
(regardless of whether Purchaser has simply overlooked providing such notice by
such tenth business day, is not in a position to provide such notice by such
tenth business day because the Court has not entered an order approving the
Settlement by such tenth business day, or for any other reason
in Purchaser’s sole discretion Purchase has failed to timely provide
the Court Approval Notice), then Creditor shall have the right to terminate and
cancel this Agreement by providing written notice of termination to Purchaser at
any time prior to receiving the Court Approval Notice from
Purchaser. If such termination is so effected by Creditor, then this
Agreement shall be deemed void ab initio and of no
further force or effect, and no sale or assignment of the Subject $5 Million
Claim shall have occurred or be deemed to have occurred.
(c) Payment of Purchase
Price. If the Court Approval Notice is provided by Purchaser
to Creditor before Creditor has exercised any termination right set forth in
sub-paragraph (b) immediately above, then no later than close of business on the
second business day after the date the Court Approval Notice is provided by
Purchaser to Creditor, Purchaser shall pay the Purchase Price to Creditor by
wire transfer to Creditor pursuant to the following wire transfer instructions
(the date upon which the Purchase Price has been so timely paid by Purchaser to
Creditor being hereinafter referred to as the “Payment
Date”):
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| Wire To: | ||
|
Bank
of New York Mellon
Xxx
Xxxx Xx.
Xxx
Xxxx, XX 00000
Telephone: (000)
000-0000
|
||
| ABA: | xxx-xxx-xxx | |
| F/C/O: | Pershing LLC | |
| F/A/O: | xxx-xxxxxx-x | |
| F/F/C: | Xxxxx United, LLC | |
| F/F/A: | xxx-xxxxxx | |
If
payment of the Purchase Price is not so timely made by Purchaser to Creditor on
the Payment Date, then Creditor shall have the right to terminate and cancel
this Agreement by providing written notice of termination to Purchaser at any
time prior to payment of the Purchase Price. If such termination is
so effected by Creditor, then this Agreement shall be deemed void ab initio and of no
further force or effect, and no sale or assignment of the Subject $5 Million
Claim shall have occurred or be deemed to have occurred.
3. Upon (and
only upon) the occurrence of the following three conditions
subsequent: (i) the written notice of the Action Commencement Date
and of the filing of the motion for Court approval of the Settlement having been
timely provided to Creditor by Purchaser pursuant to sub-paragraph (a) of
Section 2 above, (ii) the Court Approval Notice having been provided by
Purchaser to Creditor before Creditor has exercised any termination right
pursuant to sub-paragraph (b) of Section 2 above, and (iii) the payment of the
Purchase Price to Creditor before Creditor has exercised any termination right
pursuant to sub-paragraph (c) of Paragraph 2 above,
(a) All
conditions subsequent shall have been satisfied and the sale and assignment of
the Subject $5 Million Claim shall be complete and indefeasible;
and
(b) Prior to
the close of business on the second business day after the occurrence of the
three conditions subsequent described above in this Section 3, Creditor shall
execute for the benefit of PEI and attach to the Note an Allonge/Amendment No. 1
to the Note, in the form of Exhibit 1 hereto,
attesting to the reduction of the principal amount of the Note by $5,000,000 on
and as of the Payment Date (but preserving all claims to accrued and unpaid
interest, including, without limitation, all accrued and unpaid interest on such
$5,000,000 up to the Payment Date). Creditor agrees that this
sub-paragraph (b) is for the protection and benefit of PEI, and accordingly
agrees that in the event that the conditions subsequent described above in this
Section 3 are satisfied (including that the Purchase Price is timely paid on the
Payment Date), (i) Creditor will supply a copy of the executed Allonge/Amendment
No. 1 to PEI promptly following its execution, and (ii) Creditor’s
obligation to execute the Allonge/Amendment No. 1 and supply a copy thereof to
PEI shall be enforceable by PEI as a third-party beneficiary of this
provision.
4. Representations and
Warranties of Creditor. Creditor hereby represents and warrants to
Purchaser as follows:
(a) Creditor
is the owner of the Subject $5 Million Claim, free and clear of all liens and
encumbrances. Creditor has not previously transferred, encumbered or
released all or any part of the Subject $5 Million Claim.
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(b) Creditor
will at all times promptly withhold and pay any federal, state, local or foreign
taxes legally due and payable by Creditor as a result of payment of the Purchase
Price, including without limitation all income taxes, self employment taxes and
foreign entity withholding taxes.
(c) Creditor
has all necessary power and authority to (i) execute, deliver and perform all of
its obligations under this Agreement, and (ii) sell and transfer the Subject $5
Million Claim. Creditor has such knowledge and experience in business and
financial matters that it is able to protect its own interests and evaluate the
risks and benefits of entering into this Agreement. Creditor
acknowledges and agrees that it has had an opportunity to conducts its own due
diligence and consult with its own counsel, tax and financial advisors, and that
Creditor is not relying in that regard on Purchaser. Creditor
acknowledges that except as expressly set forth in Section 5 below, Purchaser is
not making any representations or warranties, including, without limitation,
about PEI.
(d) The
execution, delivery and performance of this Agreement by Creditor has been duly
authorized by all requisite action on the part of Creditor, and has been duly
executed and delivered by Creditor.
(e) Except as
expressly stated herein, Creditor is not, directly or indirectly, receiving any
consideration from or being compensated in any manner by, and will not at any
time in the future accept any consideration or compensation from, PEI, any
affiliate of PEI, or any other person for entering into this Agreement or
selling the Subject $5 Million Claim.
(f) As to any
Option that is exercised by Creditor, the representations and warranties of
Creditor contained in sub-paragraphs (a) through (e) of this Section 4 shall be
deemed to apply to the Additional Claim that is covered by the applicable Option
Exercise Notice and to speak as of the date and time immediately before the
purchase of such Additional Claim by Purchaser is consummated (so that, with
respect to such Additional Claim, each reference to the “Subject $5 Million
Claim” in sub-paragraphs (a) through (e) of this Section 4 instead shall be read
as a reference to such Additional Claim).
5. Representations and
Warranties of Purchaser. Purchaser hereby represents and warrants
to Creditor as follows:
(a) Purchaser has
all necessary power and authority to execute, deliver and perform all of its
obligations under this Agreement.
(b) The
execution, delivery and performance of this Agreement by Purchaser has been duly
authorized by all requisite action on the part of Purchaser, and has been duly
executed and delivered by Purchaser.
(c) Purchaser is
an “accredited investor” as defined in Rule 501(a) of Regulation D of the
Securities Act and has such knowledge and experience in business and financial
matters that it is able to protect its own interests and evaluate the risks and
benefits of entering into this Agreement and purchasing the Subject $5 Million
Claim. Purchaser acknowledges and agrees that it has had an
opportunity to conducts its own due diligence and consult with its own counsel,
tax and financial advisors, and that Purchaser is not relying in that regard on
Creditor. Purchaser acknowledges that (i) except as expressly
set forth in Section 4 above, Creditor is not making any representations or
warranties about the Claim, and (ii) Creditor is not making any representations
or warranties about PEI.
(d) With respect
to any Additional Claim that is purchased by Purchaser from Creditor following
the exercise of an Option by Purchaser, the representations and warranties of
Purchaser contained in sub-paragraphs (a) through (c) of this Section 5 shall be
deemed to apply to the Additional Claim that is covered by the applicable Option
Exercise Notice and to speak as of the date and time immediately before the
purchase of such Additional Claim by Purchaser is consummated (so that, with
respect to such Additional Claim, each reference to the “Subject $5 Million
Claim” in sub-paragraphs (a) through (c) of this Section 5 instead shall be read
as a reference to such Additional Claim).
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6. Options to Sell Additional
Claims
(a) Options; Exercise of
Options. If (and only if) all of the conditions subsequent set
forth in Section 2 above are met with respect to the Subject $5 Million Claim,
then Creditor shall have successive options (each an “Option”), to be
exercised at the sole and absolute discretion of Creditor, if at all, to sell,
transfer and assign to Purchaser one or more Additional Claims (which may
include any combination of principal, interest or reimbursable fees or expenses
comprising part of the then-outstanding Indebtedness) in the amount
of $5 million each (or, with respect to any Option exercise as to the
last tranche after the outstanding Indebtedness has been paid down to below $5
million, the remaining amount of the outstanding
Indebtedness). In order to exercise an Option, Creditor shall
provide Purchaser with (i) written notice of its exercise of such
Option, substantially in the form attached as Exhibit 2 (an “Option Exercise
Notice”), specifically identifying the dollar amount of the Additional
Claim covered by the Option Exercise Notice and specifically identifying what
portion of such Additional Claim constitutes principal, what portion constitutes
accrued and unpaid interest, and what portion constitutes reimbursable fees or
expenses, and (ii) a new Purchase Agreement, substantially in the form attached
as Exhibit 3 (a
“New Purchase
Agreement”), pertaining to such Additional Claim covered by such Option
Exercise Notice (each of which can be provided by email or fax pursuant to
Section 10 below).
(b) Purchase of One or More
Additional Claims; Excluded Rights; Purchase Price. Upon any
exercise of an Option by Creditor, Purchaser shall purchase from Creditor, and
Creditor shall sell, transfer, convey and assign to Purchaser, for the
consideration specified in the last sentence of this sub-paragraph (b), all
right, title and interest in and to the Additional Claim covered by the
applicable Option Exercise Notice, subject only to the conditions subsequent set
forth in sub-paragraph (f) of this Section 1. It is expressly
understood and agreed by the parties that such Additional Claim shall not
include, and the Purchaser under this Agreement shall not be purchasing or
otherwise obtaining, unless expressly included in
such Additional Claim as described in the applicable Option Exercise
Notice: (i) any rights under the Credit Enhancement Documents, which
Creditor hereby expressly retains and preserves for its own benefit, (ii) any
and all claims for accrued and unpaid interest owing to Creditor by PEI as of
the date hereof under or in connection with the Note, including,
without limitation, all accrued and unpaid interest on the Additional Claim as
of the date of Purchaser’s purchase of the Additional Claim, all of which claims
are expressly retained and preserved by Creditor for its own benefit, and
(iii) any and all claims of Creditor against PEI for reimbursable fees or
expenses under or in connection with the Note, which are expressly retained and
preserved by Creditor for its own benefit. As to each Additional
Claim, the purchase price (the “New Purchase Price”)
shall be $5,000,000 or such lesser amount as may be specified in the
applicable Option Exercise Notice.
(c) Counterpart Signatures on
New Purchase Agreement; Notice of Filing of Action and Settlement
Motion. With respect to any Additional Claim, no later
than close of business on the third business day after Creditor has provided to
Purchaser the Option Exercise Notice and New Purchase Agreement pertaining to
such Additional Claim,
(i) Purchaser
shall provide to Creditor such New Purchase Agreement executed by Purchaser as a
party thereto (which can be provided by email or fax pursuant to Xxxxxxx 00
xxxxx),
(xx) Purchaser
shall provide to Creditor a new “Acknowledgment by PEI” executed by PEI (which
can be provided by email or fax pursuant to Section 10 below), similar in form
to the “Acknowledgment by PEI” at the end of this Agreement but modified to
refer to and reflect such Additional Claim and expressly stating that it is made
and effective as of the Option Exercise Date and the New Payment Date with
respect to such Additional Claim; and
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(iii) Purchaser
shall provide written notice to Creditor that (i) Purchaser has filed an action
(the “New
Action”) against PEI in the Court for collection of such Additional
Claim, specifying the date that the New Action was commenced (the “New Action Commencement
Date”), and (ii) a motion in the New Action has been filed seeking Court
approval of the settlement of the New Action on terms acceptable to Purchaser
and in accordance with Section 3(a)(10) of the Securities Act of 1933, as
amended (the “Applicable
Settlement”).
If the
foregoing three items have not been provided by Purchaser to Creditor by the
close of business on the third business day after the date Creditor has provided
to Purchaser the Option Exercise Notice and New Purchase Agreement pertaining to
such Additional Claim, then this Agreement shall be deemed void ab initio and of no
further force or effect as to such Additional Claim, and no Option exercise with
respect to such Additional Claim, or sale or assignment of such Additional
Claim, shall have occurred or be deemed to have occurred.
(d) Court Approval
Notice. With respect to any Additional Claim, Purchaser shall
provide written notice to Creditor reasonably promptly after the Court has
entered an order in form and substance acceptable to Purchaser approving the
Applicable Settlement (such written notice being hereinafter referred to as the
“New Court Approval
Notice”). In all events and circumstances,
if Purchaser has not provided the New Court Approval Notice by the
close of business on the tenth business day after the New Action Commencement
Date pertaining to such Additional Claim (regardless of whether Purchaser has
simply overlooked providing such notice by such tenth business day, is not in a
position to provide such notice by such tenth business day because the Court has
not entered an order approving the Applicable Settlement by such tenth business
day, or for any other reason in Purchaser’s sole discretion Purchase
has failed to timely provide the Court Approval Notice ), then Creditor shall
have the right to terminate and cancel this Agreement as to such Additional
Claim by providing written notice of termination to Purchaser at any time prior
to receiving the New Court Approval Notice from Purchaser. If
such termination is so effected by Creditor, then this Agreement shall be deemed
void ab initio
and of no further force or effect as to such Additional Claim, and no Option
exercise with respect to such Additional Claim, or sale or assignment of such
Additional Claim, shall have occurred or be deemed to have
occurred.
(e) Payment of New
Purchase Price. As to any Additional Claim, if the applicable
New Court Approval Notice is provided by Purchaser to Creditor before Creditor
has exercised any termination right set forth in sub-paragraph (d) immediately
above pertaining to such new Additional Claim, then no later than close of
business on the second business day after the date such New Court Approval
Notice is provided by Purchaser to Creditor, Purchaser shall pay the
New Purchase Price to Creditor by wire transfer to Creditor pursuant to the same
wire transfer instructions set forth in sub-paragraph (c) of Section 3 above
(the date upon which the New Purchase Price has been so timely paid by Purchaser
to Creditor being hereinafter referred to as the “New Payment
Date”). If payment of the New Purchase Price is not so timely
made by Purchaser to Creditor on the New Payment Date applicable to such
Additional Claim, then Creditor shall have the right to terminate and cancel
this Agreement as to such Additional Claim by providing written notice of
termination to Purchaser at any time prior to payment of the New Purchase Price
pertaining to such Additional Claim. If such termination is so
effected by Creditor, then this Agreement shall be deemed void ab initio and of no
further force or effect as to such Additional Claim, and no Option exercise with
respect to such Additional Claim, or sale or assignment of such Additional
Claim, shall have occurred or be deemed to have occurred.
-6-
(f) With
respect to any Additional Claim, upon (and only upon) the occurrence of the
following three conditions subsequent: (i) the three items specified
in sub-paragraphs (i) through (iii) of sub-paragraph (c) of this Section 6
having been timely provided to Creditor by Purchaser pursuant to such
sub-paragraph (c), (ii) the New Court Approval Notice pertaining to such
Additional Claim having been provided by Purchaser to Creditor before Creditor
has exercised any termination right pursuant to sub-paragraph (d) of this
Section 6, and (iii) the payment to Creditor of the New Purchase
Price for such Additional Claim before Creditor has exercised any termination
right pursuant to sub-paragraph (e) of this Section 6,
(x) All
conditions subsequent shall have been satisfied and the sale and assignment of
such Additional Claim shall be complete and indefeasible; and
(y) Prior to the
close of business on the second business day after the occurrence of the four
conditions subsequent (as applied to such Additional Claim) described above in
this sub-paragraph (f) of this Section 6, Creditor shall execute for the benefit
of PEI and attach to the Note a new Allonge/Amendment to the Note, similar to
the form of Exhibit
1 hereto but modified to reflect the correct principal reduction of the
Note corresponding to the principal component of such Additional Claim as
specified in the applicable Option Exercise Notice (a “New
Allonge/Amendment”), attesting to the reduction of the principal amount
of the Note by such amount on and as of the Payment Date, acknowledging the
payment of any interest and reimbursable fees or expenses that were included in
such Additional Claim (as specified in the applicable Option Exercise
Notice), and preserving all other claims to accrued and unpaid
interest and reimbursable fees or expenses. Creditor agrees that this
sub-paragraph (y) is for the protection and benefit of PEI, and accordingly
agrees that in the event that the conditions subsequent described above in this
sub-paragraph (y) are satisfied with respect to an Additional Claim (including
that the New Purchase Price for such Additional Claim is timely paid on the New
Payment Date applicable to such Additional Claim), (A) Creditor will supply a
copy of the executed New Allonge/Amendment to PEI promptly following its
execution, and (B) Creditor’s obligation to execute the New
Allonge/Amendment and supply a copy thereof to PEI shall be
enforceable by PEI as a third-party beneficiary of this provision.
(g) Creditor
shall have no obligation whatsoever to exercise any Option, including, without
limitation, any obligation to exercise any further Option after exercising one
or more Options. The provisions of this Section 6 apply to
any Additional Claim as to which an Option has been exercised by Creditor, in
Creditor’s sole and absolute discretion. Creditor has not agreed (and
does not anywhere in this Agreement agree) to exercise any Option or any number
of Options. Unless and until Creditor exercises an Option with
respect to an Additional Claim by providing an Option Exercise Notice with
respect to such Additional Claim, Creditor has in no way restricted itself from
taking any action with respect to, or dealing with and treating with, such
Additional Claim as Creditor sees fit in Creditor’s sole
discretion. In addition, Creditor’s exercise of an option with
respect to an Additional Claim shall in no way restrict Creditor from taking any
action with respect to, or dealing with and treating with, all or any portion of
the remainder of the outstanding the outstanding Indebtedness.
7. Fees and
Expenses. Each of Creditor and Purchaser shall pay the
fees and expenses of its own advisers, counsel, accountants and other experts,
if any, and all other expenses incurred by such party incident to the
negotiation, preparation, execution, delivery and performance of this
Agreement. Creditor understands that Purchaser shall not be liable for any
commissions, selling expenses, orders, purchases, contracts, taxes, withholding,
or obligations of any kind resulting from any of Creditor’s
transactions. Creditor agrees to satisfy any and all of its tax
withholding and other obligations from the Purchase Price, and will
indemnify, defend and hold Purchaser and its affiliates harmless with respect to
all such obligations.
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8. Choice of Law.
This Agreement shall be governed by and construed according to the laws of the
State of California, without giving effect to its choice of law
principles. Creditor agrees that all actions and proceedings arising out
of or relating directly or indirectly to this Agreement or any ancillary
agreement or any other obligations shall be litigated solely and exclusively in
the state or federal courts located in Los Angeles, California, that such courts
are convenient forums, and that Creditor submits to the personal jurisdiction of
such courts for purposes of any such actions or proceedings.
9. Limitation of
Damages. Each of the parties hereby waives any right which it may
have to claim or recover any incidental, special, exemplary, punitive or
consequential damages or any damages other than, or in addition to, actual
damages. Purchaser shall have no liability hereunder for any delay in or
failure to obtain Court Approval or any New Court Approval, or for any other
causes beyond Purchaser’s control.
10. Notices. All
notices and other communications shall be in writing and shall be provided by
the transmitting party to the recipient party by overnight delivery, facsimile
transmission, e-mail or U.S. mail, as follows:
| If to Purchaser: |
Socius XX
XX, Ltd.
00000
Xxxxx Xxxxxx Xxxx., Xxxxx 0000
Xxx
Xxxxxxx, XX 00000
Att’n: Xxxxxx
Xxxxxx
Fax
No.: (000) 000-0000
Email: xxxx@xxxxxxxx.xxx
with
a copy to:
Xxxx
Xxxxxxx Xxxxxxxx & Scripps LLP
000
Xxxxx Xxxxxxxx Xx., Xxxxx 0000
Xxx
Xxxxxxx, XX 00000
Att’n: Xxxx
X. Xxxxxxxx, Esq.
Fax
No.: (000) 000-0000
Email: xxxxxxxxx@xxxx.xxx
|
|
| If to Creditor: |
Xxxxx
United, LLC
0000
X. Xxxxx Xxx.
Xxxxxx,
XX 00000
Att’n: Xxxx
Xxxxx
Fax
No.: (000) 000-0000
Email: xxxxxx@xxxxx.xxx
with
a copy to:
Xxxxxx
Xxxx Nemerovski Xxxxxx Xxxx & Rabkin, P.C.
Three
Xxxxxxxxxxx Xxxxxx, 0xx Xxxxx
Xxx
Xxxxxxxxx, XX 00000
Att’n: Xxxxxxx
X. Xxxxxxxx, Esq.
Fax
No.: (000) 000-0000
Email: xxxxxxxxx@xxxxxxxxxx.xxx
|
-8-
All
notices and communications shall be deemed made and effective as
follows: (i) if transmitted for overnight (next-day) delivery via a
nationally recognized overnight delivery service, the first business day after
being delivered by the transmitting party to such overnight delivery service,
provided that the overnight delivery service maintains a tracking number and can
confirm to the transmitting party that delivery to the recipient party has
occurred (and otherwise upon delivery to the recipient party), (ii) if faxed,
when transmitted in legible form by facsimile machine to the recipient party’s
correct facsimile machine number (provided that the transmitting party has
retained its facsimile machine-generated confirmation of the receipt of such fax
by the recipient party’s facsimile machine), (iii) if by email, when transmitted
by e-mail (provided that the e-mail was sent to the recipient party’s correct
e-mail address and that the e-mail was not returned to the transmitting party as
undeliverable), or (iv) if mailed via regular U.S. mail, upon delivery to the
recipient party. Either party may designate a superseding notice
contact name, street address, e-mail address or fax number by providing the
other party with written notice pursuant to the provisions of this Section
10.
11. General. The
headings herein are for convenience only, do not constitute a part of this
Agreement and shall not be deemed to limit or affect any of the provisions
hereof. The language used in this Agreement will be deemed to be the
language chosen by the parties to express their mutual intent, and no rules of
strict construction will be applied against any party. This Agreement is
intended for the benefit of Creditor and Purchaser and their respective
successors and permitted assigns and is not for the benefit of, nor may any
provision hereof be enforced by, any other person (except for the provision in
sub-paragraph (b) of Section 3 above and in subparagraph (y) of subparagraph (f)
of Section 6 above that is expressly stated to be for the benefit of, and
enforceable by, PEI). The representations and warranties contained
herein shall survive the closing of the transaction contemplated herein and the
assignment of the Subject $5 Million Claim or any Additional Claim, as
applicable. This Agreement may be executed in two or more counterparts, by
facsimile or electronic transmission, all of which when taken together shall be
considered one original.
12. Amendments and
Waivers. No provision of this Agreement may be waived or amended
except in a written instrument signed, in the case of an amendment, by both
Creditor and Purchaser, or, in the case of a waiver, by the party against whom
enforcement of any such waiver is sought. No waiver of any default with
respect to any provision, condition or requirement of this Agreement shall be
deemed to be a continuing waiver in the future or a waiver of any subsequent
default or a waiver of any other provision, condition or requirement hereof, nor
shall any delay or omission of either Creditor or Purchaser to exercise any
right hereunder in any manner impair the exercise of any such
right.
13. Entire
Agreement. This Agreement, together with the exhibits hereto,
contains the entire agreement and understanding between Creditor and Purchaser,
and supersedes all prior and contemporaneous agreements, term sheets, letters,
discussions, communications and understandings, both oral and written, between
Creditor and Purchaser concerning the sale and assignment of the Subject $5
Million Claim and any Additional Claim, as applicable, which Creditor and
Purchaser acknowledge have been merged into this Agreement. No party,
representative, attorney or agent has relied upon any collateral contract,
agreement, assurance, promise, understanding or representation not expressly set
forth hereinabove. The parties hereby expressly waive all rights and
remedies, at law and in equity, directly or indirectly arising out of or
relating to, or which may arise as a result of, any person or entity’s reliance
on any such assurance.
-9-
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed on the day and year first above written.
|
PURCHASER:
|
SOCIUS XX
XX, LTD.,
|
|
a
Bermuda exempted company
|
|
|
By:
/S/ XXXXX
XXXXXX
Xxxxx
Xxxxxx, Managing Director
|
|
|
CREDITOR:
|
XXXXX
UNITED, LLC,
a
Delaware limited liability company
|
|
By:
/S/ X.X. XXXXX
XX
X. X. Xxxxx XX, Vice President
|
-10-
ACKNOWLEDGMENT BY
PEI
PEI
hereby acknowledges and agrees as follows:
(1) The recitals
in Recital Paragraphs A, B and C on the first page of the foregoing Agreement
are true and correct;
(2) The sale and
assignment of the Subject $5 Million Claim only covers and includes $5,000,000
of principal amount of the Note, Creditor reserves and preserves all of its
other claims and interests under or in connection with the Note (including,
without limitation, all interest on such $5,000,000 principal amount that is
accrued and unpaid as of immediately before the sale and assignment of the
Subject $5 Million Claim pursuant to the foregoing Agreement), and Creditor’s
sale and assignment of the Subject $5 Million Claim does not and shall not in
any way prejudice or have any adverse effect on such other claims and interests
of Creditor under or in connection with the Note;
(3) The
execution, delivery and performance of the foregoing Agreement by Creditor and
Purchaser does not and will not (a) conflict with, violate or cause a breach or
default under the Note, any of the Credit Enhancement Documents, or any other
agreement or document related to the debt comprising the Subject $5 Million
Claim, or (b) require any waiver, consent or other action of PEI or any
affiliate of PEI;
(4) The Note is
valid, outstanding and enforceable in accordance with its terms, and is not
subject to any defense or offset, and shall not become subject to any defense or
offset (other than reduction of the principal amount of the Note by $5 million
when and as provided in sub-paragraph (b) of Paragraph 3 of the foregoing
Agreement) by virtue of the consummation of the sale and assignment under the
foregoing Agreement; and Creditor has, and shall continue to have after the
consummation of the sale and assignment under the foregoing Agreement, a valid,
enforceable and perfected security interest in and liens upon the property of
PEI or any of its affiliates in which Creditor has been granted a security
interest pursuant to any of the Credit Enhancement Documents to secure all
outstanding obligations under the Note or any of the Credit Enhancement
Documents; and
(5) Creditor is
relying on the foregoing acknowledgments and agreements by PEI in entering into
this Agreement and in selling and assigning the Subject $5 Million Claim, and
Purchaser is relying on the foregoing acknowledgments and agreements by PEI in
entering into this Agreement and in purchasing and taking assignment of the
Subject $5 Million Claim.
|
a
Delaware corporation
By:
/S/ XXXX X.
XXXXXXX
Xxxx X. Xxxxxxx, Chief Executive
Officer
|
-11-
EXHIBIT 1 (FORM OF ALLONGE/AMENDMENT
NO. 1)
ALLONGE/AMENDMENT
NO. 1 TO AMENDED AND RESTATED PROMISSORY
NOTE
This
Allonge/Amendment No. 1 To Amended And Restated Promissory Note (“this
Allonge/Amendment”) is made and entered into on and effective as
of [fill in the Payment Date, as defined in the foregoing Purchase
and Option Agreement] (the “Operative Date”) with reference to the following
facts:
A Pacific
Ethanol, Inc., a Delaware corporation (“PEI”), is the maker of and Borrower
under that certain Amended And Restated Promissory Note dated as of November 7,
2008 in the face principal amount of $30,000,000 (the “Note”) payable to Xxxxx
United, LLC, a Delaware limited liability company (the “Lender”);
and
B. Lender, by
its receipt of $5,000,000 from Socius XX XX, Ltd., a Bermuda exempted company
“the “Purchaser”), has consummated the sale and assignment to Purchaser of a
claim for $5,000,000 of the $30,000,000 principal amount of the Note on and as
of the Operative Date, and therefore enters into this Allonge/Amendment to
evidence the reduction of the outstanding principal amount of the Note owing by
PEI to Lender by $5,000,000, thereby reducing the outstanding
principal amount of the Note owing by PEI to Lender from $30,000,000 to
$25,000,000. Such sale and assignment by Lender to Purchaser
expressly excluded (i) any accrued and unpaid interest, or any reimbursable fees
or expenses owing under the Note as of immediately before the Operative Date,
and accordingly all such accrued and unpaid interest and any such fees or
expenses are unaffected by such sale/assignment to Purchaser, and remain owing
to Lender under the Note, and (ii) any and all security interests or other
credit enhancements in favor of Lender in connection with the Note, and
accordingly all such security interests and any other credit enhancements
granted to Lender in connection with the Note are unaffected by such
sale/assignment to Purchaser and remain the sole property rights and interests
of Lender.
NOW
THEREFORE, for good and valuable consideration, the adequacy and receipt of
which are hereby acknowledged, Borrower and Lender hereby agree as
follows:
1. As of the
Operative Date, the outstanding principal balance of the Note owing from PEI to
Lender is reduced from Thirty Million Dollars ($30,000,000) to Twenty-Five
Million Dollars ($25,000,000).
2. Any and all
accrued and unpaid interest and any reimbursable fees or expenses under the Note
as of immediately before the Operative
Date (including accrued and unpaid interest on the full
$30,000,000 original face principal amount of the Note) remains due and
payable to Lender under the Note and is not affected by (i) the
above-described assignment and sale, or (ii) the reduction of the principal
amount of the Note to $25,000,000 as of the Operative
Date. From on and after the Operative Date, interest on and
under the Note in favor of Lender shall accrue on the reduced (i.e.,
$25,000,000) principal amount of the Note in favor of Lender.
3. Except as
expressly set forth in this Allonge/Amendment, all terms and conditions of the
Note shall remain in full force and effect. Without limiting
the generality of the foregoing, this Allonge/Amendment does not encompass or
constitute a waiver of any outstanding default under the Note or any type of
extension of the maturity date or any payment due date under the
Note.
-12-
4. On and
effective as of the Operative Date, this Allonge/Amendment shall be attached to
the Note and shall be deemed an integral part of the Note.
|
BORROWER: |
a
Delaware corporation
By:
Its:___________________________________________
|
|
LENDER:
|
XXXXX
UNITED, LLC,
a
Delaware limited liability company
|
|
By:
Its:___________________________________________
|
-13-
EXHIBIT
2 (FORM OF OPTION EXERCISE NOTICE)
OPTION
EXERCISE NOTICE
Reference
is made to that certain Purchase and Option Agreement by and between Socius XX
XX, Ltd., a Bermuda exempted company (“Purchaser”) and Xxxxx United, LLC, a
Delaware limited liability company (“Creditor”), dated as of March 2, 2010 (the
“Agreement”). All capitalized words and terms used herein shall have
the meanings ascribed to them in the Purchase Agreement.
1. This Option
Exercise Notice is made and executed by Creditor
on ______________ pursuant to Section 6 of the
Agreement.
2. Creditor
hereby exercises an Option with respect to the following portion
of the Indebtedness outstanding as of the date hereof:
| a. | Principal: | $ __________________ | ||
| b. | Accrued and Unpaid Interest: | $ __________________ | ||
| c. | Reimbursable Fees or Expenses: | $ __________________ | ||
| TOTAL: | $ 5,000,000.00* |
3. The portion
of the outstanding Indebtedness set forth in Section 2 above is the Additional
Claim that is the subject of and covered by this Option Exercise Notice (“the
Subject Claim”).
4. By this
Option Exercise Notice, Creditor hereby elects and exercises its option to sell,
transfer, convey and assign to Purchaser all of Creditor’s right, title and
interest to the Subject Claim (subject to the satisfaction of the conditions
subsequent set forth in Section 6 of the Purchase Agreement), and provides to
Purchaser herewith a New Purchase Agreement pertaining to the Subject
Claim.
|
|
XXXXX
UNITED, LLC,
a
Delaware limited liability company
By:
Its:___________________________________________
|
* The Additional Claim covered by each
Option and corresponding Option Exercise Notice will be $5,000,000 except for
the final Option that may be exercised and corresponding Option Exercise Notice
that may be generated when the then-outstanding Indebtedness is less than
$5,000,000, in which final case the amount of the Additional Claim will be the
amount of the then-outstanding Indebtedness.
-14-
EXHIBIT 3 (FORM OF NEW PURCHASE
AGREEMENT)
PURCHASE
AGREEMENT
This
Purchase Agreement (“Agreement”) is
entered into as of
[ ],
2010, by and between Socius XX XX, Ltd., a Bermuda exempted company (“Purchaser”), and
Xxxxx United, LLC, a Delaware limited liability company (“Creditor”), and, as
to the Acknowledgment at the end of this Agreement, by Pacific Ethanol, Inc., a
Delaware corporation (“PEI”).
RECITALS
A. Purchaser and
Creditor are parties to (and PEI has executed the “Acknowledgment By PEI” with
respect to) that certain Purchase and Option Agreement dated as of March 2, 2010
(the “Master
Agreement”); except as otherwise expressly stated herein, all capitalized
words and terms used herein have the meanings ascribed to them in the Master
Agreement;
B. PEI is
indebted to Creditor pursuant to the terms of that certain Amended and Restated
Promissory Note, payable to Creditor, dated November 7, 2008, in the principal
amount of $30,000,000 (the “Note”).
C. The
obligations of PEI to Creditor under the Note are secured and/or credit enhanced
by the terms of (i) that certain Security Agreement dated as of November 7, 2008
between Pacific Ag. Products, LLC, a California limited liability company and
indirectly wholly-owned subsidiary of PEI, and Creditor (the “Security Agreement”),
(ii) that certain Irrevocable Joint Instruction Letter dated November 7, 2008
among PEI, Pacific Ethanol California, Inc., a California corporation and
wholly-owned subsidiary of PEI, and Creditor (the “Instruction Letter”),
(iii) that certain Unconditional Guaranty dated November 7, 2008 by Pacific Ag.
Products, LLC in favor of Creditor (the “PacAg Guaranty”), and
(iv) that certain Limited Recourse Guaranty dated November 7, 2008 by
Pacific Ethanol California, Inc. in favor of Creditor (the “PEC Guaranty”) (the
Security Agreement, Instruction Letter, PacAg Guaranty and PEC Guaranty
hereinafter are collectively referred to as the “Credit Enhancement
Documents”).
D. As of the
date of this Agreement, PEI is in default under the Note, and is indebted to
Creditor for unpaid principal in the amount of $________________. PEI
is also indebted to Creditor for accrued and unpaid interest, late fees and
costs, and reimbursable fees or expenses related to the Note and the defaults
thereunder, for a total amount due and payable by PEI to Creditor
of $______________ (consisting of
$__________________ principal amount, plus $______________in unpaid
interest accrued through ________________, plus ______________ in reimbursable
fees or expenses as of the date hereof (such total amount, plus all additional
interest that accrues on the unpaid principal balance under the Note on and
after _____________________, being collectively referred to herein as
the “Indebtedness”).
E. Pursuant to
Section 6 of the Master Agreement, Creditor has exercised an Option to sell,
transfer and assign to Purchaser its right to receive payment on a portion of
the Indebtedness, which portion is specified in the Option Exercise Notice
provided by Creditor to Purchaser herewith (such portion of the
Indebtedness being hereinafter referred to as the “Subject
Claim”). Pursuant to such exercise by
Creditor, Purchaser desires to purchase the Subject Claim, all
subject to the terms and conditions set forth below.
-15-
NOW,
THEREFORE, in consideration of the agreements contained herein and for other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto hereby agree as follows:
1. Purchase and Sale of Subject
Claim; Excluded Rights: Purchase Price.
(a) Upon
the terms of this Agreement and subject only to the conditions subsequent set
forth in Section 2 below, Purchaser hereby purchases from Creditor, and Creditor
hereby sells, transfers, conveys and assigns to Purchaser, for the consideration
specified below, all right, title and interest in and to the Subject
Claim. It is expressly understood and agreed by the parties that the
Subject Claim does not include, and the Purchaser under this Agreement is not
purchasing or otherwise obtaining, (i) any rights under the Credit Enhancement
Documents, which Creditor hereby expressly retains and preserves for its own
benefit, (ii) except to the extent (if at all) expressly made part of the
Subject Claim pursuant to the specific described components of the Subject Claim
set forth in the Option Exercise Notice, any and all claims for accrued and
unpaid interest owing to Creditor by PEI as of the date hereof under or in
connection with the Note, including, without limitation, all accrued and unpaid
interest on the Subject Claim as of the date hereof, all of which claims are
expressly retained and preserved by Creditor for its own benefit, and (iii)
except to the extent (if at all) expressly made part of the Subject Claim
pursuant to the specific described components of the Subject Claim set forth in
the Option Exercise Notice, any and all claims of Creditor against PEI for
reimbursable fees or expenses under or in connection with the Note, which are
expressly retained and preserved by Creditor for its own benefit.
(b) The total
consideration to be paid by Purchaser to Creditor for the Subject Claim shall be
[Five Million Dollars ($5,000,000)]1 (the “Purchase
Price”). The Purchase Price shall be due and payable by
Purchaser to Creditor by wire transfer on the date set forth in sub-paragraph
(b) of Section 2 below.
2. Conditions
Subsequent.
(a) Notice of Filing of Action
and Settlement Motion. No later than close of business
on the third business day after the date of this Agreement, Purchaser shall
provide written notice to Creditor that (i) Purchaser has filed an action (the
“Action”)
against PEI in the Superior Court of the State of California for the County of
Los Angeles (the “Court”) for
collection of the Subject Claim, specifying the date that the Action was
commenced (the “Action
Commencement Date”), and (ii) a motion in the Action has been filed
seeking Court approval of the settlement of the Action on terms acceptable to
Purchaser and in accordance with Section 3(a)(10) of the Securities Act of 1933,
as amended (the “Settlement”). If
such written notice is not provided by Purchaser to Creditor by the close of
business on the third business day after the date of this Agreement, then this
Agreement (including, without limitation, the provisions in the
remainder of this Section 2) shall be deemed void ab initio and of no
further force or effect, and no sale or assignment of the Subject Claim shall
have occurred or be deemed to have occurred.
(b) Court Approval
Notice. Purchaser shall provide written notice to Creditor
reasonably promptly after the Court has entered an order in form and substance
acceptable to Purchaser approving the Settlement (such written notice being
hereinafter referred to as the “Court Approval
Notice”). In all events and circumstances,
if Purchaser has not provided the Court Approval Notice by the close
of business on the tenth business day after the Action Commencement Date
(regardless of whether Purchaser has simply overlooked providing such notice by
such tenth business day, is not in a position to provide such notice by such
tenth business day because the Court has not entered an order approving the
Settlement by such tenth business day, or for any other reason
in Purchaser’s sole discretion Purchase has failed to timely provide
the Court Approval Notice), then Creditor shall have the right to terminate and
cancel this Agreement by providing written notice of termination to Purchaser at
any time prior to receiving the Court Approval Notice from
Purchaser. If such termination is so effected by Creditor, then this
Agreement shall be deemed void ab initio and of no
further force or effect, and no sale or assignment of the Subject Claim shall
have occurred or be deemed to have occurred.
1 The Subject Claim and the Purchase Price
thereof will be $5,000,000 except for the final Option that may be exercised and
corresponding Option Exercise Notice that may be generated when the
then-outstanding Indebtedness is less than $5,000,000, in which final case the
amount of the Subject Claim and the Purchase Price thereof will be the amount of
the then-outstanding Indebtedness.
-16-
(c) Payment of Purchase
Price. If the Court Approval Notice is provided by Purchaser
to Creditor before Creditor has exercised any termination right set forth in
sub-paragraph (b) immediately above, then no later than close of business on the
second business day after the date the Court Approval Notice is provided by
Purchaser to Creditor, Purchaser shall pay the Purchase Price to Creditor by
wire transfer pursuant to the wire transfer instructions set forth in
sub-paragraph (c) of Section 2 of the Master Agreement, as the same may be
amended or superseded by Creditor from time to time by written notice pursuant
to Section 10 of the Master Agreement (the date upon which the Purchase Price
has been so timely paid by Purchaser to Creditor being hereinafter referred to
as the “Payment
Date”).
If
payment of the Purchase Price is not so timely made by Purchaser to Creditor on
the Payment Date, then Creditor shall have the right to terminate and cancel
this Agreement by providing written notice of termination to Purchaser at any
time prior to payment of the Purchase Price. If such termination is
so effected by Creditor, then this Agreement shall be deemed void ab initio and of no
further force or effect, and no sale or assignment of the Subject Claim shall
have occurred or be deemed to have occurred.
3. Upon (and only upon) the
occurrence of the following four conditions subsequent: (i) the
items specified in sub-paragraphs (i) and (ii) of subparagraph (c) of Section 6
of the Master Agreement, as such items pertain to this Agreement, having been
timely provided by Purchaser to Creditor, (ii) written notice of the Action
Commencement Date and of the filing of the motion for Court approval of the
Settlement having been timely provided to Creditor by Purchaser pursuant to
sub-paragraph (a) of Section 2 above, (iii) the Court Approval Notice having
been provided by Purchaser to Creditor before Creditor has exercised any
termination right pursuant to sub-paragraph (b) of Section 2 above, and (iv) the
payment of the Purchase Price to Creditor before Creditor has exercised any
termination right pursuant to sub-paragraph (c) of Paragraph 2
above,
(a) All
conditions subsequent shall have been satisfied and the sale and assignment of
the Subject Claim shall be complete and indefeasible, and
(b) Prior to
the close of business on the second business day after the occurrence of the
four conditions subsequent described above in this Section 3, Creditor shall
take the actions set forth in sub-paragraph (y) of sub-paragraph (f) of Section
6 of the Master Agreement with respect to a New Allonge/Amendment that gives
effect to the consummation of the sale and assignment of the Subject Claim to
Purchaser.
4. Representations and
Warranties of Creditor. The representations and warranties made by
Creditor to Purchaser in Section 4 of the Master Agreement shall apply to this
Agreement as set forth in sub-paragraph (f) of Section 4 of the Master
Agreement.
5. Representations and
Warranties of Purchaser. The representations and warranties made by
Purchaser to Creditor in Section 5 of the Master Agreement shall apply to this
Agreement as set forth in sub-paragraph (d) of Section 5 of the Master
Agreement.
-17-
6. Fees and
Expenses. Each of Creditor and Purchaser shall pay the
fees and expenses of its own advisers, counsel, accountants and other experts,
if any, and all other expenses incurred by such party incident to the
negotiation, preparation, execution, delivery and performance of this
Agreement. Creditor understands that Purchaser shall not be liable for any
commissions, selling expenses, orders, purchases, contracts, taxes, withholding,
or obligations of any kind resulting from any of Creditor’s
transactions. Creditor agrees to satisfy any and all of its tax
withholding and other obligations from the Purchase Price, and will
indemnify, defend and hold Purchaser and its affiliates harmless with respect to
all such obligations.
7. Choice of Law.
This Agreement shall be governed by and construed according to the laws of the
State of California, without giving effect to its choice of law
principles. Creditor agrees that all actions and proceedings arising out
of or relating directly or indirectly to this Agreement or any ancillary
agreement or any other obligations shall be litigated solely and exclusively in
the state or federal courts located in Los Angeles, California, that such courts
are convenient forums, and that Creditor submits to the personal jurisdiction of
such courts for purposes of any such actions or proceedings.
8. Limitation of
Damages. Each of the parties hereby waives any right which it may
have to claim or recover any incidental, special, exemplary, punitive or
consequential damages or any damages other than, or in addition to, actual
damages. Purchaser shall have no liability hereunder for any delay in or
failure to obtain Court Approval or for any other causes beyond Purchaser’s
control.
9. Notices. All
notices and other communications under this Agreement shall be provided as set
forth in Section 10 of the Master Agreement.
10. General. The
headings herein are for convenience only, do not constitute a part of this
Agreement and shall not be deemed to limit or affect any of the provisions
hereof. The language used in this Agreement will be deemed to be the
language chosen by the parties to express their mutual intent, and no rules of
strict construction will be applied against any party. This Agreement is
intended for the benefit of Creditor and Purchaser and their respective
successors and permitted assigns and is not for the benefit of, nor may any
provision hereof be enforced by, any other person (except for the provision in
sub-paragraph (b) of Section 3 above that is expressly stated to be for the
benefit of, and enforceable by, PEI). The representations and
warranties contained herein shall survive the closing of the transaction
contemplated herein and the assignment of the Subject Claim. This
Agreement may be executed in two or more counterparts, by facsimile or
electronic transmission, all of which when taken together shall be considered
one original.
11. Amendments and
Waivers. No provision of this Agreement may be waived or amended
except in a written instrument signed, in the case of an amendment, by both
Creditor and Purchaser, or, in the case of a waiver, by the party against whom
enforcement of any such waiver is sought. No waiver of any default with
respect to any provision, condition or requirement of this Agreement shall be
deemed to be a continuing waiver in the future or a waiver of any subsequent
default or a waiver of any other provision, condition or requirement hereof, nor
shall any delay or omission of either Creditor or Purchaser to exercise any
right hereunder in any manner impair the exercise of any such
right.
12. Entire
Agreement. This Agreement and the Master Agreement, together with
the exhibits hereto and thereto, contain the entire agreement and understanding
between Creditor and Purchaser, and supersede all prior and contemporaneous
agreements, term sheets, letters, discussions, communications and
understandings, both oral and written, between Creditor and Purchaser concerning
the sale and assignment of the Subject Claim, which Creditor and Purchaser
acknowledge have been merged herein and therein. (To avoid any unintended
ambiguity, the parties expressly acknowledge and agreement that this Agreement,
although later in point in time than the Master Agreement, does not supersede
the Master Agreement.) No party, representative, attorney or agent
has relied upon any collateral contract, agreement, assurance, promise,
understanding or representation not expressly set forth hereinabove. The
parties hereby expressly waive all rights and remedies, at law and in equity,
directly or indirectly arising out of or relating to, or which may arise as a
result of, any person or entity’s reliance on any such
assurance.
-18-
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed on the day and year first above written.
|
PURCHASER:
|
SOCIUS
XX XX, LTD.,
a
Bermuda exempted company
By:___________________________________________
Its:___________________________________________
|
|
CREDITOR:
|
XXXXX
UNITED, LLC,
a
Delaware limited liability company
|
|
By:___________________________________________
Its:___________________________________________
|
-19-
(Form of
Acknowledgment By PEI for New Purchase Agreement)
ACKNOWLEDGMENT BY
PEI
PEI
hereby acknowledges and agrees as follows as of the Action Commencement Date (as
defined in the foregoing Agreement) and as of the Payment Date (as defined in
the foregoing Agreement):
(1) The
recitals in Recital Paragraphs A, B, C and D on the first page of the foregoing
Agreement are true and correct;
(2) The
sale and assignment of the Subject Claim only covers and includes
$________________, Creditor reserves and preserves all of its other claims and
interests under or in connection with the Note, and Creditor’s sale and
assignment of the Subject Claim does not and shall not in any way prejudice or
have any adverse effect on such other claims and interests of Creditor under or
in connection with the Note;
(3) The
execution, delivery and performance of the foregoing Agreement by Creditor and
Purchaser does not and will not (a) conflict with, violate or cause a breach or
default under the Note, any of the Credit Enhancement Documents, or any other
agreement or document related to the debt comprising the Subject Claim, or (b)
require any waiver, consent or other action of PEI or any affiliate of
PEI;
(4) The
Note is valid, outstanding and enforceable in accordance with its terms, and is
not subject to any defense or offset, and shall not become subject to any
defense or offset (other than reduction of the Indebtedness by the
amount of the Subject Claim when and as provided in sub-paragraph (b) of
Paragraph 3 of the foregoing Agreement) by virtue of the consummation of the
sale and assignment under the foregoing Agreement; and Creditor has, and shall
continue to have after the consummation of the sale and assignment under the
foregoing Agreement, a valid, enforceable and perfected security interest in and
liens upon the property of PEI or any of its affiliates in which Creditor has
been granted a security interest pursuant to any of the Credit Enhancement
Documents to secure all outstanding obligations under the Note or any of the
Credit Enhancement Documents; and
(5) Creditor
is relying on the foregoing acknowledgments and agreements by PEI in entering
into the foregoing Agreement and in selling and assigning the Subject Claim, and
Purchaser is relying on the foregoing acknowledgments and agreements by PEI in
entering into the foregoing Agreement and in purchasing and taking assignment of
the Subject Claim.
|
|
a
Delaware corporation
By:___________________________________________
Its:___________________________________________
|
-20-
