EXHIBIT 10.2

AMENDED AND RESTATED PROMISSORY NOTE
 

$30,000,000
Fresno, California
 
November 7, 2008

 
FOR VALUE RECEIVED, the undersigned, PACIFIC ETHANOL, INC., a Delaware
corporation, with its principal place of business at 400 Capitol Mall, Suite
2060, Sacramento, California 95814 (“Borrower”), hereby promises to pay to LYLES
UNITED, LLC, a Delaware limited liability company, with its principal place of
business at 1210 West Olive Ave., Fresno, California 93728 or its assigns
(“Lender”), the principal sum of Thirty Million Dollars ($30,000,000), together
with interest thereon as hereinafter provided until this Note is paid in full.
 
1. Principal and Interest Payments. Interest on the unpaid principal amount
hereof shall accrue at a rate per annum equal to the Prime Rate of interest as
reported from time to time in The Wall Street Journal, plus three percent
(3.00%), computed on the basis of a 360-day year of twelve 30-day months. All
accrued and unpaid interest on this Note shall be due and payable on the first
business day of each calendar month commencing on December 1, 2008 and
continuing until the outstanding principal amount hereof shall have been paid in
full. All remaining principal and any accrued but unpaid interest then owing
under this Note shall be due and payable on March 15, 2009 (the “Maturity Date”)
unless the obligations hereunder are earlier accelerated or satisfied in
accordance with the provisions of this Note.  All payments by Borrower hereunder
shall first apply to accrued and unpaid interest and then to the remaining
principal balance under this Note.
 
2. Prepayment. Borrower shall have the right to prepay all or any part of the
remaining balance of this Note at any time, without premium or penalty.
 
3. Payments and Computations. All payments on account of indebtedness evidenced
by this Note shall be made not later than 5:00 p.m., California time, on the day
when due in lawful money of the United States. Payments are to be made at such
place as Lender may, from time to time, in writing appoint, and in the absence
of such appointment, then at the principal place of business of Lender as set
forth above.
 
4. Events of Default. The occurrence of any of the following shall constitute an
“Event of Default” under this Note:
 
(a) Failure to Pay.  Borrower shall fail to pay (i) when due any principal
payment on the date due hereunder, or (ii) any interest or other payment
required under the terms of this Note on the date due, and any such payment
shall not have been made within five (5) days of Borrower’s receipt of Lender’s
written notice to Borrower of such failure to pay; or
 
(b) Breach of Note or other Agreements. Borrower, or any direct or indirect
subsidiary of Borrower, shall fail to comply with any material provision as to
which it is obligated under:

 
 

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(i) this Note; or
 
(ii) that certain Promissory Note dated October 20, 2008 in the principal amount
of One Million Five Hundred Thousand Dollars ($1,500,000) by Borrower in favor
of Lyles Mechanical Co.; or
 
(iii) that certain Loan Restructuring Agreement dated the date hereof by and
among Pacific Ethanol Imperial, LLC, Borrower and Lender; or
 
(iv) that certain Irrevocable Joint Instruction Letter dated the date hereof and
executed by Borrower and Lender and acknowledged and agreed to by Pacific
Ethanol California, Inc.; or
 
(v) the purchase order or construction contract, still under negotiation,
relating to work performed by Lyles Mechanical Co. in connection with the beer
well repair and other matters, as contemplated by paragraph 4 of that certain
Memorandum of Understanding dated as of October 20, 2008 by and among Borrower,
Pacific Ethanol Stockton, LLC and Lyles Mechanical Co., but only after such
purchase order or construction contract is executed;
 
and any such failure to comply shall not have been cured within ten (10) days of
Borrower’s receipt of Lender’s written notice to Borrower of such failure to
comply.
 
(c) Voluntary Bankruptcy or Insolvency Proceedings. Borrower shall (i) apply for
or consent to the appointment of a receiver, trustee, liquidator or custodian of
itself or of all or a substantial part of its property, (ii) be unable, or admit
in writing its inability, to pay its debts generally as they mature, (iii) make
a general assignment for the benefit of its or any of its creditors, (iv) be
dissolved or liquidated, (v) become insolvent (as such term may be defined or
interpreted under any applicable statute), (vi) commence a voluntary case or
other proceeding seeking liquidation, reorganization or other relief with
respect to itself or its debts under any bankruptcy, insolvency or other similar
law now or hereafter in effect or consent to any such relief or to the
appointment of or taking possession of its property by any official in an
involuntary case or other proceeding commenced against it, or (vii) take any
action for the purpose of effecting any of the foregoing; or
 
(d) Involuntary Bankruptcy or Insolvency Proceedings. Proceedings for the
appointment of a receiver, trustee, liquidator or custodian of Borrower or of
all or a substantial part of the property thereof, or an involuntary case or
other proceedings seeking liquidation, reorganization or other relief with
respect to Borrower or the debts thereof under any bankruptcy, insolvency or
other similar law now or hereafter in effect shall be commenced and an order for
relief entered or such proceeding shall not be dismissed or discharged within
sixty (60) days of commencement.

 
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5. Rights of Lender upon Default. Upon the occurrence or existence of any Event
of Default (other than an Event of Default, referred to in Paragraphs 5(c) and
5(d)) and at any time thereafter during the continuance of such Event of
Default, Lender may, by written notice to Borrower, immediately declare all
outstanding obligations payable by Borrower hereunder to be immediately due and
payable without presentment, demand, protest or any other notice of any kind,
all of which are hereby expressly waived, anything contained herein to the
contrary notwithstanding. Upon the occurrence or existence of any Event of
Default described in Paragraphs 5(c) and 5(d), immediately and without notice,
all outstanding obligations payable by Borrower hereunder shall automatically
become immediately due and payable, without presentment, demand, protest or any
other notice of any kind, all of which are hereby expressly waived, anything
contained herein to the contrary notwithstanding. Upon the occurrence of an
Event of Default, the interest rate on this Note shall increase to a rate per
annum equal to the Prime Rate of interest as reported from time to time in The
Wall Street Journal, plus six percent (6.00%), simple interest, per annum until
such default is cured, and is payable together with the principal amount hereof
in accordance with the payment terms set forth herein. In addition to the
foregoing remedies, upon the occurrence or existence of any Event of Default,
Lender may exercise any other right, power or remedy permitted by law, either by
suit in equity or by action at law, or both.
 
6. Notices. All notices, requests, demands, approvals, consents, waivers and
other communications required or permitted to be given hereunder shall be in
writing, with copies to all the other parties hereto, and shall be deemed to
have been duly given when (i) if delivered by hand, upon receipt, (ii) if sent
by nationally recognized overnight delivery service (receipt requested), the
next business day or (iii) if mailed by first-class registered or certified
mail, return receipt requested, postage prepaid, four days after posting in the
U.S. mails, in each case if delivered to the following addresses:
 
If to Borrower:                                      Pacific Ethanol, Inc.
400 Capitol Mall, Suite 2060
Sacramento, California 95814
Attn:  Chief Financial Officer
AND
Attn:  General Counsel
 
If to Lender:                                          Lyles United, LLC
1210 West Olive Ave.
Fresno, California 93728
Attn:  Will Lyles, Vice President
 
or such other address or facsimile number as either party may designate to the
other party hereto in accordance with the aforesaid procedure. Each party shall
provide notice to the other party of any change in address or facsimile number.

 
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7. Applicable Law. This Note shall be construed in accordance with the laws of
the State of California, without regard to conflicts of laws
principles.  Borrower irrevocably submits to the exclusive jurisdiction of any
California State or United States Federal court sitting in Fresno County,
California over any action or proceeding arising out of or relating to this
Note, and irrevocably agrees that all claims in respect of such action or
proceeding may be heard and determined in such California State or Federal
court.  Borrower agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law.  Borrower waives any objection
to venue in the State of California and any objection to an action or proceeding
in the State of California on the basis of forum non conveniens.
 
8. Severability. The parties hereto intend and believe that each provision in
this Note comports with all applicable local, state and federal laws and
judicial decisions. However, if any provision or provisions, or if any portion
of any provision or provisions, of this Note is found by a court of law to be in
violation of any applicable local, state or federal ordinance, statute, law,
administrative or judicial decision, or public policy, and if the court should
declare that portion, provision or provisions to be illegal, invalid, unlawful,
void or unenforceable as written, then it is the intent of Borrower and Lender
that such portion, provision or provisions be given force to the fullest
possible extent that they are legal, valid and enforceable, that the remainder
of this Note shall be construed as if the illegal, invalid, unlawful, void or
unenforceable portion, provision or provisions were not contained herein, and
that the rights, obligations and interest of Borrower and Lender under the
remainder of this Note shall continue in full force and effect.
 
9. Usury. In the event any interest is paid on this Note which is deemed to be
in excess of the then legal maximum rate, then that portion of the interest
payment representing an amount in excess of the then legal maximum rate shall be
deemed a payment of principal and applied against the principal of this Note.
 
10. Expenses; Waiver. If action is instituted to collect this Note, the Borrower
shall pay all costs and expenses, including, without limitation, reasonable
attorneys’ fees and costs, incurred in connection with such action. In addition,
the successful or prevailing party in any proceeding shall be entitled to
recover reasonable attorneys’ fees and other costs incurred in such proceeding.
Borrower and all parties now or hereafter liable for the payment hereof, whether
as endorser, guarantor, surety or otherwise, generally waive demand, presentment
for payment, notice of dishonor, protest and notice of protest, notice of intent
to accelerate and notice of acceleration, diligence in collecting or bringing
suit against any party hereto, and all other notices, and agree to all
extensions, renewals, indulgences, releases or changes which from time to time
may be granted by the Lender hereof and to all partial payments hereon, with or
without notice before or after maturity.
 
11. Successors and Assigns. The rights and obligations hereunder of Borrower and
Lender shall be binding upon and benefit the permitted successors, assigns,
heirs, administrators and transferees of the parties.
 
12. Waiver and Amendment. Any provision of this Note may be amended, waived or
modified only upon the prior written consent of Borrower and Lender.

 
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13. Headings. The headings of the Paragraphs of this Note are inserted for
convenience only and shall not be deemed to constitute part of this Note or to
affect the construction hereof.
 
14. Time of the Essence. Time is of the essence as to all dates set forth
herein.
 
Borrower has executed and delivered this Note as of the day and year first set
forth above.

 

 
PACIFIC ETHANOL, INC.,
a Delaware corporation
 
 
By: /s/ NEIL M. KOEHLER                    

Neil M. Koehler, CEO

 
 
 
 
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