EXHIBIT 10.3
AMENDMENT # 2 TO LOAN AGREEMENT
THIS AMENDMENT TO LOAN AGREEMENT (the "LOAN AGREEMENT") is made this
28th day of December, 2004, by and between XXXXX DIVERSIFIED, INC., a California
corporation ("XXXXX") and PACIFIC ETHANOL, INC., a California corporation
("PEI").
R E C I T A L S
A. The parties entered into that certain Term Loan Agreement ("LOAN
AGREEMENT") dated June 16, 2003.
B. As amended by the "Amendment to Loan Agreement" signed by both
parties and dated July 29, 0000, Xxxxxxxxx 1.5 of the Loan Agreement granted
Xxxxx the right to purchase up to a total of $1,500,000 worth of common shares
of PEI at the fixed price of One and 50/100 Dollars ($1.50) per share up to and
including March 31, 2005. The parties now desire to extend that date up until
which Xxxxx may purchase common shares until June 30, 2005.
NOW, THEREFORE, the parties agree as follows:
1. CLARIFICATION OF PARAGRAPH 1.5: The parties hereby amend Paragraph 1.5 and
Paragraph 8.1l of the Loan Agreement to state in its entirety as follows:
1.5 RIGHT TO PURCHASE COMMON STOCK OR CONVERT DEBT TO COMMON
STOCK: Lender shall have the right, at Lender's option, to purchase
common stock or to convert up to $1,500,000 of the principal owing to
common shares of Borrower. Any principal converted shall be considered
paid on the date of conversion and shall cease to accrue interest as of
that date. Lender may purchase for cash or by conversion of debt up to
a total of $1,500,000 worth of common shares at the fixed price of One
and 50/100 Dollars ($1.50) per share. Lender shall have no right
pursuant to this Agreement to purchase common stock or convert debt to
stock ownership after the loan has BEEN FULLY REPAID. The expiration
date for the rights granted in this paragraph cannot be extended
irrespective of any performance, or lack of performance, of Borrower
under the Loan Documents. If Borrower intends to prepay the principal
prior to maturity, Lender shall have the option to exercise its right
to convert debt to common stock (as of the date of the proposed
prepayment) in lieu of accepting the prepayment for up to the AMOUNT OF
CONVERSION STILL REMAINING UNDER THIS CLAUSE.
8.11 INTEGRATED AGREEMENT: The Loan Documents constitute the
entire and integrated agreement between Lendor and Borrower relating to
the Term Loan and all matters addressed herein and supersede all prior
negotiations, communications, understandings and commitments relating
thereto, whether written or oral. Should Borrower fail to complete a
merger or share exchange agreement with a public company OR FAIL TO
FUND THE ETHANOL PLANT CONSTRUCTION AT MADERA BY APRIL 1, 2005, the
parties agree that the terms of the loan shall revert to the terms set
out in the Letter of Intent dated March 10, 2003, however, if such a
merger OR PLANT funding does occur the Summary of Terms with Secured
Debt with Equity shall be of no force or effect.
2. NO FURTHER AMENDMENTS: Parties do not intend any additional
amendments to the Loan Agreement. All its terms and conditions shall continue in
full force and effect unless and until they are amended according to its terms.
IN WITNESS WHEREOF, the parties hereto have caused this Loan Agreement
to be executed as of the date first above written.
LENDER: BORROWER:
XXXXX DIVERSIFIED, INC., PACIFIC ETHANOL, INC.,
a California corporation a California corporation
By: /S/ XXXXXXX X. XXXXX By: /S/ XXXX XXXXXXX
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Xxxxxxx X. Xxxxx, President Xxxx Xxxxxxx, CEO
By: /S/ XXXX XXXXX By: /S/ XXXX XXXXXX
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Xxxx Xxxxx, Vice President Xxxx Xxxxxx, Secretary/COO
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