SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF
THE
SECURITIES EXCHANGE ACT OF 1934
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Date
of Report (Date of earliest event reported)
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September
6, 2006
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(Exact
name of registrant as specified in its charter)
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Delaware
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000-21467
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41-2170618
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(State
or other jurisdiction of incorporation)
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(Commission
File Number)
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(IRS
Employer Identification No.)
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5711
N. West Avenue, Fresno, California
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93711
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(Address
of principal executive offices)
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(Zip
Code)
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| Registrant’s
telephone number, including area code: |
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(559)
435-1771 |
(Former
name or former address, if changed since last report)
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see
General
Instruction A.2. below):
o Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
o Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item
1.01. Entry
Into a Material Definitive Agreement.
Engineering,
Procurement and Technology License Agreement dated September 6, 2006 by and
between Delta-T Corporation and PEI Columbia, LLC
On
September 6, 2006, PEI Columbia, LLC (“PEI Columbia”), a wholly-owned subsidiary
of Pacific Ethanol, Inc. (the “Company”), entered into an Engineering,
Procurement and Technology License Agreement (the “Agreement”) dated September
6, 2006 with Delta-T Corporation (“Delta-T”).
The
Agreement relates to the construction of PEI Columbia’s ethanol plant in
Boardman, Oregon and provides that that Delta-T is to furnish and perform
certain engineering and procurement services to support the construction and
start-up of that plant (the “Work”). The Work is required to be performed in
accordance with a detailed Work schedule. The schedule is subject to extension
as a result of various factors, including change orders requested by PEI
Columbia, force
majeure
and
other events. Delta-T is also required to have its representatives or other
employees or assistants instruct PEI Columbia’s personnel in the installation of
plant equipment. PEI Columbia is required to furnish to Delta-T various
documents, drawings, equipment, specifications, information, personnel and
services to allow Delta-T to perform its obligations under the
Agreement.
Delta-T
is required, at its own expense, to obtain all necessary permits that it is
required to procure by applicable law in connection with its performance of
the
Work. All other permits required by applicable law in connection with the plant
or in connection with any equipment are to be obtained by PEI Columbia at its
own expense.
PEI
Columbia is entitled to issue change orders requiring changes in the Work;
provided, that such change orders may cause adjustments in the Work schedule
and
in the amounts payable to Delta-T under the Agreement. Delta-T will not be
required to proceed with certain changes until mutual agreement is obtained
regarding those change orders—specifically, those change orders that, in
Delta-T’s judgment, would have a detrimental impact on performance of the plant
or if the amount of the change order exceeds 1% of the amounts payable to
Delta-T under the Agreement.
The
Agreement provides for PEI Columbia to pay Delta-T: (a) a fixed fee in respect
of the services to be performed by Delta-T, which is subject to adjustment
based
on the actual services ordered by PEI Columbia; (b) a license fee for a
non-exclusive, paid-up, non-transferable right to use in perpetuity Delta-T’s
technology associated with the plant; and (c) a procurement fee calculated
as a
percentage of the cost of all procured equipment. The aggregate amount to be
paid to Delta-T under the Agreement is estimated to be between $5.6 and $6.6
million.
Under
the
Agreement, Delta-T grants to PEI Columbia a non-exclusive, paid-up,
non-transferable license to use in perpetuity Delta-T’s technology associated
with the plant to use such technology at the plant and maintain and optimize
or
enhance the plant.
The
Agreement may be terminated, subject to certain notice and cure provisions,
upon
customary events such as the bankruptcy of one party, material breaches of
the
Agreement or failure to pay amounts owed. In the event that Delta-T terminates
the Agreement, PEI Columbia will be required to pay a pro rata portion of the
total fees payable based on the Work successfully completed plus 15% of the
remainder of the total fees.
Delta-T
provides various customary representations and warranties under the Agreement,
including warranties pertaining to errors in the Work which appear within a
period of 12 months following mechanical completion of the plant. Delta-T is
required, at its own expense, to obtain and maintain insurance policies
satisfying certain specified coverages and amounts. Delta-T has also agreed
to
customary obligations to indemnify PEI Columbia and certain of its affiliates
for liabilities associated with bodily injury and property damage and also
with
respect to PEI Columbia’s use of Delta-T’s intellectual property associated with
its technology. Each of PEI Columbia and Delta-T have also agreed to certain
customary confidentiality obligations.
Engineering,
Procurement and Technology License Agreements dated September 6, 2006 by and
between Delta-T Corporation and Pacific Ethanol, Inc.
On
September 6, 2006, the Company entered into three Engineering, Procurement
and
Technology License Agreements (the “Additional Agreements”) dated September 6,
2006 with Delta-T. The Additional Agreements relate to the construction of
three
additional ethanol plants at unspecified locations to be designated by the
Company in the future and provide that Delta-T is to furnish and perform certain
engineering and procurement services to support the construction and start-up
of
those plants. The terms and conditions of the Additional Agreements are
substantially the same as the Agreement, except that the fees payable under
each
agreement are different. The differences in the fees from agreement to agreement
are based upon differences in design from plant to plant, and upon expected
economies derived from re-using engineering and design from one plant in
subsequent projects.
Item
9.01. Financial
Statements and Exhibits.
(a) Financial
Statements of Businesses Acquired.
None.
(b) Pro
Forma Financial Information.
None.
(c) Exhibits.
None.
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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| Date:
September 12, 2006 |
PACIFIC
ETHANOL,
INC. |
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By: |
/s/ WILLIAM
G. LANGLEY |
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William
G. Langley
Chief Financial
Officer
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