Exhibit 10.1
 

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CREDIT AGREEMENT
 
dated as of February 27, 2007
 
among
 
PACIFIC ETHANOL HOLDING CO. LLC,
PACIFIC ETHANOL MADERA LLC,
PACIFIC ETHANOL COLUMBIA, LLC,
PACIFIC ETHANOL STOCKTON, LLC,
PACIFIC ETHANOL IMPERIAL, LLC, and
PACIFIC ETHANOL MAGIC VALLEY, LLC,
as Borrowers,
 
PACIFIC ETHANOL HOLDING CO. LLC,
as Borrowers' Agent,
 
THE LENDERS REFERRED TO HEREIN,
 
WESTLB AG, NEW YORK BRANCH,
as Administrative Agent for the Lenders,
 
WESTLB AG, NEW YORK BRANCH,
as Collateral Agent for the Senior Secured Parties,
 
UNION BANK OF CALIFORNIA, N.A.,
as Accounts Bank,
 
WESTLB AG, NEW YORK BRANCH,
as Lead Arranger and Sole Bookrunner,
 
MIZUHO CORPORATE BANK, LTD.,
as Lead Arranger and Co-Syndication Agent,
 
CIT SECURITIES LLC,
as Lead Arranger and Co-Syndication Agent,
 
COÖPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK B.A.,
"RABOBANK NEDERLAND", NEW YORK BRANCH,
as Lead Arranger and Co-Documentation Agent,
 
and
 
BANCO SANTANDER CENTRAL HISPANO S.A, NEW YORK BRANCH,
as Lead Arranger and Co-Documentation Agent
 

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TABLE OF CONTENTS
 

    Page       
ARTICLE I
DEFINITIONS AND INTERPRETATION
2      
Section 1.01
Defined Terms 
2
Section 1.02
Principles of Interpretation 2
Section 1.03
UCC Terms      3
Section 1.04
Accounting and Financial Determinations    3 Section 1.05 Joint and Several    
3      
ARTICLE II
COMMITMENTS AND BORROWING 4       Section 2.01 Construction Loans  4 Section
2.02 Term Loans  7 Section 2.03 Working Capital Loans  8 Section 2.04 Letters of
Credit  8 Section 2.05 Notice of Fundings  10
Section 2.06
Funding of Loans 
11
Section 2.07
Evidence of Indebtedness  
13
Section 2.08
Termination or Reduction of Commitments 
14
Section 2.09
Tranche Reallocation  15
Section 2.10
Additional Greenfield Plant 
16      
ARTICLE III
REPAYMENTS, PREPAYMENTS, INTEREST AND FEES
16      
Section 3.01
Repayment of Construction Loan Fundings 
16
Section 3.02
Repayment of Term Loan Fundings 
16
Section 3.03
Repayment of Working Capital Loan Fundings 
17
Section 3.04
Interest Payment Dates 
17
Section 3.05
Interest Rates 
17
Section 3.06
Default Interest Rate 
18
Section 3.07
Interest Rate Determination 
19
Section 3.08
Computation of Interest and Fees  19
Section 3.09
Optional Prepayment 
19
Section 3.10
Mandatory Prepayment 
21
Section 3.11
Time and Place of Payments 
23
Section 3.12
Fundings and Payments Generally 
23
Section 3.13
Fees  24
Section 3.14
Pro Rata Treatment 
24
Section 3.15
Sharing of Payments 
25
Section 3.16
Termination of Interest Rate Protection Agreement in Connection with Any
Prepayment 
26

 
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ARTICLE IV
EURODOLLAR RATE AND TAX PROVISIONS
26       Section 4.01
Eurodollar Rate Lending Unlawful 
26
Section 4.02
Inability to Determine Eurodollar Rates 
27
Section 4.03
Increased Eurodollar Loan Costs 
27
Section 4.04
Obligation to Mitigate 
28
Section 4.05
Funding Losses 
28
Section 4.06
Increased Capital Costs 
29
Section 4.07
Taxes  29      
ARTICLE V
REPRESENTATIONS AND WARRANTIES
31      
Section 5.01
Organization; Power and Compliance with Law 
31
Section 5.02
Due Authorization; Non-Contravention  31
Section 5.03
Governmental Approvals 
32
Section 5.04
Investment Company Act  34
Section 5.05
Validity of Financing Documents  34
Section 5.06
Financial Information  34
Section 5.07
No Material Adverse Effect  34
Section 5.08
Project Compliance  34
Section 5.09
Litigation  35
Section 5.10
Sole Purpose Nature; Business  35
Section 5.11
Contracts 
35
Section 5.12
Collateral 
37
Section 5.13
Ownership of Properties 
39
Section 5.14
Taxes 
40
Section 5.15
Patents, Trademarks, Etc 
40
Section 5.16
ERISA Plans 
40
Section 5.17
Property Rights, Utilities, Supplies Etc 
40
Section 5.18
No Defaults 
41
Section 5.19
Environmental Warranties 
41
Section 5.20
Regulations T, U and X 
42
Section 5.21
Accuracy of Information 
42
Section 5.22
Indebtedness 
43
Section 5.23
Separateness  44
Section 5.24
Required LLC Provisions 
44
Section 5.25
Subsidiaries 
45
Section 5.26
Foreign Assets Control Regulations, Etc 
45
Section 5.27
Employment Matters 
45
Section 5.28
Solvency 
46
Section 5.29
Legal Name and Place of Business 
46
Section 5.30
No Brokers 
46
Section 5.31
Insurance 
46
Section 5.32
Accounts 
47

 
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ARTICLE VI
CONDITIONS PRECEDENT
47      
Section 6.01
Conditions to Closing 
47
Section 6.02
Conditions to Madera Funding 
54
Section 6.03
Conditions to Boardman Funding 
57
Section 6.04
Conditions to First Funding for Each Greenfield Plant 
60
Section 6.05
Conditions to All Greenfield Plant Construction Loan Fundings  67
Section 6.06
Conditions to Greenfield Plant Top-Up Funding  69
Section 6.07
Conditions to Term Loan Funding 
70
Section 6.08
Conditions to All Fundings  71      
ARTICLE VII
COVENANTS
73      
Section 7.01
Affirmative Covenants 
73
Section 7.02
Negative Covenants 
82
Section 7.03
Reporting Requirements 
92
Section 7.04
Release of Borrower 
97      
ARTICLE VIII
PROJECT ACCOUNTS
98      
Section 8.01
Establishment of Project Accounts 
98
Section 8.02
Deposits into and Withdrawals from Project Accounts  100
Section 8.03
Escrow Account 
102
Section 8.04
Construction Holding Account 
102
Section 8.05
Stockton Construction Account 
103
Section 8.06
Brawley Construction Account 
105
Section 8.07
Burley Construction Account 
106
Section 8.08
Revenue Account 
108
Section 8.09
Operating Account 
113
Section 8.10
Maintenance Capital Expense Account 
114
Section 8.11
Working Capital Reserve Account 
114
Section 8.12
Debt Service Reserve Account 
116
Section 8.13
Prepayment Holding Account 
118
Section 8.14
Insurance and Condemnation Proceeds Accounts 
118
Section 8.15
Extraordinary Proceeds Account 
120
Section 8.16
Warranty Accounts 
122
Section 8.17
Representations, Warranties and Covenants of Accounts Bank 
122
Section 8.18
Project Accounts 
124
Section 8.19
Project Accounts as Deposit Account 
125
Section 8.20
Duties of Accounts Bank 
126
Section 8.21
Subordination 
126
Section 8.22
Borrower Acknowledgments 
127
Section 8.23
Agreement to Hold In Trust 
127
Section 8.24
Interest and Investments 
127
Section 8.25
Accounts Bank Information 
128
Section 8.26
Notices of Suspension of Accounts 
129

 
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ARTICLE IX
DEFAULT AND ENFORCEMENT
130      
Section 9.01
Events of Default 
130
Section 9.02
Action Upon Bankruptcy 
137
Section 9.03
Action Upon Other Event of Default 
137
Section 9.04
Application of Proceeds 
138      
ARTICLE X
THE AGENTS
139      
Section 10.01
Appointment and Authority 
139
Section 10.02
Rights as a Lender or Interest Rate Protection Provider 
141
Section 10.03
Exculpatory Provisions 
141
Section 10.04
Reliance by Agents 
142
Section 10.05
Delegation of Duties 
142
Section 10.06
Resignation or Removal of Agent 
142
Section 10.07
No Amendment to Duties of Agent Without Consent 
143
Section 10.08
Non-Reliance on Agent and Other Lenders 
144
Section 10.09
No Lead Arranger, Syndication Agent, Bookrunner Duties 
144
Section 10.10
Collateral Agent May File Proofs of Claim 
144
Section 10.11
Collateral Matters 
145
Section 10.12
Copies 
145      
ARTICLE XI
MISCELLANEOUS PROVISIONS
146      
Section 11.01
Amendments, Etc 
146
Section 11.02
Applicable Law; Jurisdiction; Etc 
147
Section 11.03
Assignments 
149
Section 11.04
Benefits of Agreement 
152
Section 11.05
Borrowers' Agent 
153
Section 11.06
Consultants 
153
Section 11.07
Costs and Expenses 
153
Section 11.08
Counterparts; Effectiveness 
154
Section 11.09
Indemnification by the Borrowers 
154
Section 11.10
Interest Rate Limitation 
155
Section 11.11
No Waiver; Cumulative Remedies 
155
Section 11.12
Notices and Other Communications 
155
Section 11.13
Patriot Act Notice 
159
Section 11.14
Payments Set Aside 
159
Section 11.15
Right of Setoff 
159
Section 11.16
Severability 
159
Section 11.17
Survival 
160
Section 11.18
Treatment of Certain Information; Confidentiality 
160
Section 11.19
Waiver of Consequential Damages, Etc  161
Section 11.20
Waiver of Litigation Payments  161

 

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SCHEDULES
 
Schedule 1.01(a) – Commitments
Schedule 2.08(e) – Buy Down Calculation
Schedule 2.09 Tranche Reallocation Eligible Lenders and Commitments
Schedule 5.11 – Contracts
Part A - First Funding Contracts
Part B - Deferred Contracts
Schedule 5.12 – UCC Filing Offices
Schedule 5.13(a) - Site Descriptions
Schedule 5.19(d)(iii) - Underground Storage Tanks
Schedule 5.23 – Separateness Provisions
Schedule 5.29 – Legal Names and Places of Business
Schedule 5.30 - Broker Fees
Schedule 6.01(g)(i) - Existing Liens
Schedule 6.01(q) - Drawdown Schedules
Schedule 6.02(e)(i) – Acceptable Project Parties
Schedule 6.02(e)(iv) – Project Party Consents
Schedule 7.01(h) – Insurance
Schedule 7.01(k)-A - Performance Guarantee
Schedule 7.01(k)-B - Approved Performance Test Protocols
Schedule 7.02(f) - Storage Facilities
Schedule 7.02(t) – Construction Budgets
Schedule 8.08(c)(xiii) – Target Balance Amount
Schedule 11.12 – Notice Information
 
EXHIBITS
 
Exhibit A – Defined Terms
Exhibit 2.04 – Issuance Request
Exhibit 2.05-A – Form of Working Capital Funding Notice
Exhibit 2.05-B – Form of Construction Funding Notice
Exhibit 2.07 – Form of Note
Exhibit 2.09 - Form of Tranche Conversion Notice
Exhibit 3.05 – Form of Interest Period Notice
Exhibit 4.07 – Form of Non-U.S. Lender Statement
Exhibit 6.01(k) – Form of Insurance Consultant's Certificate
Exhibit 6.01(v) – Financial Model
Exhibit 6.02(a) – Form of Commercial Operation Date Certificate
Exhibit 6.02(g) - Form of Title Endorsement
Exhibit 6.04(g)-A- Form of Deed of Trust
Exhibit 6.04(g)-B - Form of Pledge Agreement
Exhibit 6.04(g)-C -Form of Security Agreement
Exhibit 6.05(c) – Form of Independent Engineer's Certificate
Exhibit 7.01(y) – Form of Final Completion Certificate
Exhibit 7.02(i) – Form of Blocked Account Agreement
Exhibit 7.02(s) – Form of Restricted Payment Certificate
Exhibit 7.03(g) – Form of Monthly Progress Report
 
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Exhibit 7.03(n) – Form of Borrowing Base Certificate
Exhibit 7.03(p) – Form of Operating Statement
Exhibit 8.04 – Form of Construction Holding Withdrawal Certificate
Exhibit 8.05 – Form of Construction Withdrawal Certificate
Exhibit 8.08-A – Form of Revenue Account Withdrawal Certificate (Before
Conversion Date)
Exhibit 8.08-B – Form of Revenue Account Withdrawal Certificate (After
Conversion Date)
Exhibit 8.09 – Form of Operating Account Withdrawal Certificate
Exhibit 8.11 – Form of Working Capital Transfer Certificate
Exhibit 8.12 – Form of Debt Service Reserve Letter of Credit
Exhibit 8.14 – Form of Insurance and Condemnation Proceeds Request Certificate
Exhibit 8.15 – Form of Extraordinary Proceeds Release Notice
Exhibit 8.16 – Form of Warranty Proceeds Request Certificate
Exhibit 11.03 – Form of Lender Assignment Agreement
 
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This CREDIT AGREEMENT (this "Agreement"), dated as of February 27, 2007, is by
and among Pacific Ethanol Holding Co. LLC, a Delaware limited liability company
("Pacific Holding"), Pacific Ethanol Madera LLC, a Delaware limited liability
company ("Madera"), Pacific Ethanol Columbia, LLC, a Delaware limited liability
company ("Boardman"), Pacific Ethanol Stockton, LLC, a Delaware limited
liability company ("Stockton"), Pacific Ethanol Imperial, LLC, a Delaware
limited liability company ("Brawley") and Pacific Ethanol Magic Valley, LLC, a
Delaware limited liability company ("Burley" and, together with Pacific Holding,
Madera, Boardman, Stockton, and Brawley, the "Borrowers"), Pacific Holding, as
Borrowers' Agent, each of the Lenders from time to time party hereto, WESTLB AG,
NEW YORK BRANCH, as administrative agent for the Lenders, WESTLB AG, NEW YORK
BRANCH as collateral agent for the Senior Secured Parties, UNION BANK OF
CALIFORNIA, N.A., as accounts bank, WESTLB AG, NEW YORK BRANCH, as lead arranger
and sole bookrunner, MIZUHO CORPORATE BANK, LTD., as lead arranger and
co-syndication agent, CIT CAPITAL SECURITIES LLC as lead arranger and
co-syndication agent, COÖPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK B.A.,
"RABOBANK NEDERLAND", NEW YORK BRANCH, as lead arranger and co-documentation
agent, and BANCO SANTANDER CENTRAL HISPANO S.A, NEW YORK BRANCH, as lead
arranger and co-documentation agent.
 
RECITALS
 
WHEREAS, the Borrowers have requested that the Lenders establish a credit
facility the proceeds of which are to be used to (a) finance the ownership and
operation of two (2) denatured ethanol production facilities located in or near
Madera, California and Boardman, Oregon, each of which is expected to produce
approximately forty (40) million gallons-per-year, and the ownership,
development, engineering, construction, testing and operation of three
(3) denatured ethanol production facilities to be located in or near Stockton,
California, Brawley, California and Burley, Idaho, each with a design basis
capacity of approximately fifty (50) million gallons-per-year, (b) fund certain
reserves and (c) pay certain fees and expenses associated with this Agreement
and the Loans, in each case as further described herein; and
 
WHEREAS, the Lenders are willing to make such credit facility available to the
Borrowers upon and subject to the terms and conditions hereinafter set forth;
 
 

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NOW, THEREFORE, the parties hereto agree as follows:
 
ARTICLE I
 
DEFINITIONS AND INTERPRETATION
 
Section 1.01 Defined Terms.  Capitalized terms used in this Agreement, including
its preamble and recitals, shall, except as otherwise defined herein or where
the context otherwise requires, have the meanings provided in Exhibit A.
 
Section 1.02 Principles of Interpretation.  (a)  Unless otherwise defined or the
context otherwise requires, terms for which meanings are provided in this
Agreement shall have the same meanings when used in each Financing Document,
notice and other communication delivered from time to time in connection with
any Financing Document.
 
(b) Unless the context requires otherwise, any reference in this Agreement to
any Transaction Document shall mean such Transaction Document and all schedules,
exhibits and attachments thereto.
 
(c) All the agreements, contracts or documents defined or referred to herein
shall mean such agreements, contracts or documents as the same may from time to
time be supplemented or amended or the terms thereof waived or modified to the
extent permitted by, and in accordance with, the terms thereof and this
Agreement, and shall disregard any supplement, amendment or waiver made in
breach of this Agreement.
 
(d) Any reference in any Financing Document relating to a Default or an Event of
Default that has occurred and is continuing (or words of similar effect) shall
be understood to mean that (i) in the case of a Default only, such Default has
not been cured or remedied, or has not been waived by the Required Lenders,
before becoming an Event of Default and (ii) in the case of an Event of Default,
such Event of Default has not been cured or remedied or has not been waived by
the Required Lenders.
 
(e) The term "knowledge" in relation to the Borrowers, and any other similar
expressions, shall mean knowledge of each of the Borrowers after due inquiry.
 
(f) Defined terms in this Agreement shall include in the singular number the
plural and in the plural number the singular.
 
(g) The words "herein," "hereof" and "hereunder" and words of similar import
when used in this Agreement shall, unless otherwise expressly specified, refer
to this Agreement as a whole and not to any particular provision of this
Agreement and all references to Articles, Sections, Exhibits and Schedules shall
be references to Articles, Sections, Exhibits and Schedules of this Agreement,
unless otherwise specified.
 
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(h) The words "include," "includes" and "including" are not limiting.
 
(i) The word "or" is not exclusive.
 
(j) Any reference to any Person shall include its permitted successors and
permitted assigns in the capacity indicated, and in the case of any Governmental
Authority, any Person succeeding to its functions and capacities.
 
Section 1.03 UCC Terms.  Unless otherwise defined herein, terms used herein that
are defined in the UCC shall have the respective meanings given to those terms
in the UCC.
 
Section 1.04 Accounting and Financial Determinations.  Unless otherwise
specified, all accounting terms used in any Financing Document shall be
interpreted, all accounting determinations and computations hereunder or
thereunder shall be made, and all financial statements required to be delivered
hereunder or thereunder shall be prepared, in accordance with GAAP.
 
Section 1.05 Joint and Several.  (a)  Subject to Section 1.05(b), the
Obligations of each Borrower under this Agreement and each other Financing
Document to which any Borrower is a party shall constitute the joint and several
obligations of all Borrowers.  All representations, warranties, undertakings,
agreements and obligations of each Borrower expressed or implied in this
Agreement or any other Financing Document shall, unless the context requires
otherwise, be deemed to be made, given or assumed by the Borrowers jointly and
severally.
 
(b) Each of the Borrowers, the Administrative Agent and the Lenders hereby
confirms that it is the intention of all such Persons that this Agreement and
the other Financing Documents and the Obligations of each Borrower hereunder and
thereunder not constitute a fraudulent transfer or conveyance for purposes of
any Debtor Relief Laws, the Uniform Fraudulent Conveyance Act, the Uniform
Fraudulent Transfer Act or any similar foreign, federal or state law, to the
extent applicable to this Agreement or such other Financing Document and the
Obligations of each Borrower hereunder and thereunder.  To effectuate the
foregoing intention, the Administrative Agent, the Lenders and the Borrowers
hereby irrevocably agree that the Obligations of each Borrower at any time shall
be limited to the maximum amount as will result in the Obligations of such
Borrower not constituting a fraudulent transfer or conveyance.
 
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ARTICLE II
 
COMMITMENTS AND BORROWING
 
On the terms, subject to the conditions and relying upon the representations and
warranties herein set forth:
 
Section 2.01 Construction Loans.  (a) Each Tranche B Lender agrees, severally
and not jointly, on the terms and conditions of this Agreement, to fund the full
amount of such Tranche B Lender's Tranche B Construction Loan Commitment to the
Escrow Account on or after the Closing Date and in accordance with
Section 2.01(s).
 
(b) On the terms and conditions of this Agreement, loans shall be released from
the Escrow Account (each such loan, an "In-Progress Plant 1 Construction Loan")
to the Borrowers, once on the Funding Date for In-Progress Plant 1, for transfer
to the Construction Holding Account in an aggregate principal amount not in
excess of the In-Progress Plant 1 Aggregate Construction Loan Commitment.
 
(c) On the terms and conditions of this Agreement, (i) loans shall be released
from the Escrow Account (each such loan, an "In-Progress Plant 2 Tranche B
Construction Loan") to the Borrowers for transfer to the Construction Holding
Account and (ii) each Tranche A Lender agrees, severally and not jointly, to
make a loan (each such loan, an "In-Progress Plant 2 Tranche A Construction
Loan") to the Borrowers, once on the Funding Date for In-Progress Plant 2, in an
aggregate principal amount, when taken together, not in excess of the
In-Progress Plant 2 Aggregate Construction Loan Commitment.
 
(d) On the terms and conditions of this Agreement, (i) loans shall be released
from the Escrow Account (each such loan, a "Greenfield Plant 1 Tranche B
Construction Loan") to the Borrowers for transfer to the Construction Account
for Greenfield Plant 1 and (ii) and each Tranche A Lender agrees, severally and
not jointly, on the terms and conditions of this Agreement, to make loans (each
such loan, a "Greenfield Plant 1 Tranche A Construction Loan") to the Borrowers
in each such case for Project Costs with respect to Greenfield Plant 1 or to
make a Sponsor Support Reimbursement Funding or Greenfield Plant Top-Up Funding,
from time to time, but not more frequently than once each calendar month (except
for Loans made on the Conversion Date), until the Construction Loan Maturity
Date; provided, however, that (i) the aggregate principal amount of the
Greenfield Plant 1 Construction Loans shall not exceed the Greenfield Plant 1
Aggregate Construction Loan Commitment, (ii) the aggregate principal amount of
Greenfield Plant 1 Construction Loans disbursed prior to the Commercial
Operation Date of Greenfield Plant 1 (taken together with the Working Capital
Plant Commitment for Greenfield Plant 1) shall not exceed the lesser of
(x) forty percent (40%) of budgeted Project Costs for Greenfield Plant 1 (as set
forth in the then-current Construction Budget for such Plant) and (y) forty-five
million Dollars ($45,000,000), (iii) the aggregate principal amount of all
Greenfield Plant 1 Construction Loans disbursed on or prior to the Conversion
Date (taken together with the Working Capital Plant Commitment for such Plant)
shall not exceed sixty-five percent (65%) of the aggregate actual and documented
Project Costs for Greenfield Plant 1 and (iv)  the aggregate principal amount of
Greenfield Plant 1 Construction Loans disbursed as Greenfield Plant Top-Up
Fundings shall not exceed the corresponding Excess Construction Loan Commitment.
 
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(e) Each Tranche A Lender agrees, severally and not jointly, on the terms and
conditions of this Agreement, to make loans (each such loan, a "Greenfield Plant
2 Construction Loan") to the Borrowers for Project Costs with respect to
Greenfield Plant 2 or to make a Sponsor Support Reimbursement Funding or
Greenfield Plant Top-Up Funding, from time to time but not more frequently than
once each calendar month (except for Loans made on the Conversion Date), until
the Construction Loan Maturity Date; provided, however, that (i) the aggregate
principal amount of the Greenfield Plant 2 Construction Loans shall not exceed
the Greenfield Plant 2 Aggregate Construction Loan Commitment, (ii) the
aggregate principal amount of Greenfield Plant 2 Construction Loans disbursed
prior to the Commercial Operation Date of such Plant (taken together with the
Working Capital Plant Commitment for such Plant) shall not exceed the lesser of
(x) forty percent (40%) of budgeted Project Costs for Greenfield Plant 2 (as set
forth in the then-current Construction Budget for such Plant and (y) forty-five
million Dollars ($45,000,000), (iii) the aggregate principal amount of all
Greenfield Plant 2 Construction Loans disbursed on or prior to the Conversion
Date (taken together with the Working Capital Plant Commitment for such Plant)
shall not exceed sixty-five percent (65%) of the aggregate actual and documented
Project Costs for Greenfield Plant 2 and (iv) the aggregate principal amount of
Greenfield Plant 2 Construction Loans disbursed as Greenfield Plant Top-Up
Fundings shall not exceed the corresponding Excess Construction Loan Commitment.
 
(f) Each Tranche A Lender agrees, severally and not jointly, on the terms and
conditions of this Agreement, to make loans (each such loan, a "Greenfield Plant
3 Construction Loan") to the Borrowers for Project Costs with respect to
Greenfield Plant 3 or to make a Sponsor Support Reimbursement Funding or
Greenfield Plant Top-Up Funding, from time to time but not more frequently than
once each calendar month (except for Loans made on the Conversion Date), until
the Construction Loan Maturity Date; provided, however, that (i) the aggregate
principal amount of the Greenfield Plant 3 Construction Loans shall not exceed
the Greenfield Plant 3 Aggregate Construction Loan Commitment, (ii) the
aggregate principal amount of Greenfield Plant 3 Construction Loans disbursed
prior to the Commercial Operation Date of such Plant (taken together with the
Working Capital Plant Commitment for such Plant) shall not exceed the lesser of
(x) forty percent (40%) of budgeted Project Costs for Greenfield Plant 3 (as set
forth in the then-current Construction Budget for such Plant) and (y) forty-five
million Dollars ($45,000,000), (iii) the aggregate principal amount of all
Greenfield Plant 3 Construction Loans disbursed prior to the Conversion Date
(taken together with the Working Capital Plant Commitment for such Plant) shall
not exceed sixty-five percent (65%) of the aggregate actual and documented
Project Costs for Greenfield Plant 3 and (iv) the aggregate principal amount of
Greenfield Plant 3 Construction Loans disbursed as Greenfield Plant Top-Up
Fundings shall not exceed the corresponding Excess Construction Loan Commitment.
 
(g) The aggregate principal amount of the Construction Loans shall not exceed
the Aggregate Construction Loan Commitment.  The aggregate principal amount of
the Construction Loans made by each Lender shall not exceed the Construction
Loan Commitment of such Lender.
 
(h) There shall be no more than one (1) Greenfield Plant Top-Up Funding for each
Greenfield Plant.
 
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(i) Sponsor Support Reimbursement Fundings may only be requested to the extent
that payments by Pacific Ethanol under the Sponsor Support Agreement are
eligible for reimbursement as described in Section 2.04(g) (Sponsor's Deficiency
Funding Obligation) of the Sponsor Support Agreement.
 
(j) Proceeds of each Tranche B Construction Loan shall be deposited into the
Escrow Account for further release and application in accordance with this
Agreement.
 
(k) Proceeds of each In-Progress Plant 1 Construction Loan and each In-Progress
Plant 2 Tranche B Construction Loan (if any) shall be released from the Escrow
Account and transferred to the Construction Holding Account to be applied solely
in accordance with this Agreement and shall be used solely for the payment of
Project Costs (including the partial funding of the Debt Service Reserve
Requirement).
 
(l) Proceeds of each In-Progress Plant 2 Tranche A Construction Loan (if any)
shall be deposited into the Construction Holding Account and applied solely in
accordance with this Agreement and shall be used solely for the payment of
Project Costs (including the partial funding of the Debt Service Reserve
Requirement).
 
(m) Proceeds of the Greenfield Plant 1 Tranche B Construction Loans (if any)
shall be released from the Escrow Account and applied solely in accordance with
this Agreement and shall be used solely for the payment of Project Costs for
Greenfield Plant 1 (including, if applicable, for reimbursement of Project Costs
pursuant to a Sponsor Support Reimbursement Funding).
 
(n) Proceeds of the Greenfield Plant 1 Tranche A Construction Loans shall be
applied solely in accordance with this Agreement and, other than in the case of
Greenfield Plant Top-Up Fundings or Sponsor Support Reimbursement Fundings,
shall be deposited into the Construction Account for Greenfield Plant 1 or
applied directly to the payment of Debt Service and shall be used solely for the
payment of Project Costs for Greenfield Plant 1.
 
(o) Proceeds of the Greenfield Plant 2 Construction Loans shall be applied
solely in accordance with this Agreement and, other than in the case of
Greenfield Plant Top-Up Fundings or Sponsor Support Reimbursement Fundings,
shall be deposited into the Construction Account for Greenfield Plant 2 or
applied directly to the payment of Debt Service and shall be used solely for the
payment of Project Costs for Greenfield Plant 2.
 
(p) Proceeds of the Greenfield Plant 3 Construction Loans shall be applied
solely in accordance with this Agreement and, other than in the case of
Greenfield Plant Top-Up Fundings or Sponsor Support Reimbursement Fundings,
deposited into the Construction Account for Greenfield Plant 3 or applied
directly to the payment of Debt Service and shall be used solely for the payment
of Project Costs for Greenfield Plant 3.
 
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(q) Proceeds of Greenfield Plant Top-Up Fundings shall be deposited into the
Construction Holding Account and shall be used and applied solely in accordance
with this Agreement.
 
(r) Proceeds of Sponsor Support Reimbursement Fundings may be paid directly to
the Sponsor in accordance with Section 2.04(g) (Sponsor's Deficiency Funding
Obligation) of the Sponsor Support Agreement.
 
(s) Each of the Tranche B Lenders shall fund their pro rata portion of the
Tranche B Escrow Disbursement on or before March 7, 2007.  Unless or until
otherwise elected pursuant to a properly delivered Interest Period Notice, the
Tranche B Loans made pursuant to the Tranche B Escrow Disbursement shall bear
interest as Base Rate Loans.
 
(t) Construction Loans repaid or prepaid may not be reborrowed.
 
Section 2.02 Term Loans.  (a)  Each Tranche A Lender agrees, severally and not
jointly, on the terms and conditions of this Agreement, to make loans (each such
loan, a "Tranche A Term Loan") to the Borrowers for the repayment of the
Tranche A Construction Loans, on the Conversion Date, in an aggregate principal
amount not in excess of such Tranche A Lender's Tranche A Term Loan Commitment;
provided, however, that the aggregate principal amount of the Tranche A Term
Loans shall not exceed the Aggregate Tranche Commitment for Tranche A Term Loans
or the aggregate outstanding Tranche A Construction Loans (including all Tranche
A Construction Loans made on the Conversion Date).
 
(b) Each Tranche B Lender agrees, severally and not jointly, on the terms and
conditions of this Agreement, to make loans (each such loan, a "Tranche B Term
Loan") to the Borrowers for the repayment of the Tranche B Construction Loans,
on the Conversion Date, in an aggregate principal amount not in excess of such
Tranche B Lender's Tranche B Term Loan Commitment; provided, however, that the
aggregate principal amount of the Tranche B Term Loans shall not exceed the
Aggregate Tranche Commitment for the Tranche B Term Loans or the aggregate
outstanding Tranche B Construction Loans (including all Tranche B Construction
Loans made on the Conversion Date).
 
(c) Proceeds of the Tranche A Term Loans shall be used solely for the payment of
amounts due in respect of the Tranche A Construction Loans made by the Tranche A
Lenders (including all Tranche A Construction Loans made on the Conversion
Date).
 
(d) Proceeds of the Tranche B Term Loans shall be used solely for the payment of
amounts due in respect of the Tranche B Construction Loans made by the Tranche B
Lenders (including all Tranche B Construction Loans made on the Conversion
Date).
 
(e) Term Loans repaid or prepaid may not be reborrowed.
 
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Section 2.03 Working Capital Loans.  (a)  Each Working Capital Lender agrees,
severally and not jointly, on the terms and conditions of this Agreement, to
make loans (each such loan, a "Working Capital Loan") to the Borrowers for
Working Capital Expenses, from time to time but not more frequently than two (2)
times each calendar month, until the Working Capital Maturity Date, in an
aggregate principal amount from time to time outstanding not in excess of the
Working Capital Loan Commitment of such Working Capital Lender; provided,
however, that the aggregate principal amount of the Working Capital Loans at any
one time outstanding, plus the aggregate Stated Amounts of all issued and
outstanding Letters of Credit, shall not exceed the Aggregate Working Capital
Loan Commitment or, subject to the grace period provided in Section 3.10(c)
(Mandatory Prepayments), the then-applicable Working Capital Loan Availability.
 
(b) Each Funding of Working Capital Loans shall be in the aggregate minimum
amount of five hundred thousand Dollars ($500,000) and in integral multiples of
one hundred thousand Dollars ($100,000) in excess thereof.
 
(c) Proceeds of each Working Capital Loan for (i) Project Costs relating to the
initial start-up and testing of a Plant shall be deposited into the Construction
Account specified in the relevant Funding Notice, (ii) Operation and Maintenance
Expense shall be deposited into the Operating Account, and (iii) Maintenance
Capital Expenses shall be deposited into the Maintenance Capital Expense
Account, and in each such case shall be applied solely in accordance with this
Agreement and shall be used solely for the payment of Working Capital
Expenses.  Fundings of Working Capital Loans for Operation and Maintenance
Expenses and for Maintenance Capital Expenses shall be subject to the Permitted
Operating Budget Deviation Levels.
 
(d) Within the limits set forth in Section 2.03(a), the Borrowers may pay or
prepay and reborrow Working Capital Loans.
 
Section 2.04 Letters of Credit.  (a) The Issuing Bank agrees at any time on or
after the First Escrow Release Date, and from time to time on the terms and
conditions of this Agreement, upon receipt from the Borrowers of an Issuance
Request, to issue a Letter of Credit on behalf of any Borrower on the date and
in the amount set forth in such Issuance Request; provided, that (i) Letters of
Credit may only be for issued Plants with respect to which the initial Funding
has been made (or will be made simultaneously with the issuance of such Letter
of Credit), (ii) the aggregate Stated Amounts of all issued and outstanding
Letters of Credit shall not exceed the LC Cap and (iii) the aggregate Stated
Amount of all issued and outstanding Letters of Credit plus the aggregate
outstanding principal amount of all Working Capital Loans at any one time
outstanding shall not exceed the Aggregate Working Capital Loan Commitment or
the then-applicable Working Capital Loan Availability.
 
(b) The Borrower shall give the Administrative Agent at least five (5) Business
Days irrevocable prior written notice (such notice, in substantially the form of
Exhibit 2.04, an "Issuance Request") (effective upon receipt) specifying the
date (which shall be a day that is no later than thirty (30) days preceding the
Working Capital Maturity Date) a Letter of Credit is requested to be issued,
describing in reasonable detail the nature of the transactions or obligations
proposed to be supported thereby (which shall be of the nature described in
Section 2.04(i)(iii)) and the Stated Amount of such Letter of Credit, which
shall be no less than four hundred thousand Dollars ($400,000)).  Upon receipt
of an Issuance Request, the Administrative Agent shall promptly advise the
Issuing Bank of the contents thereof.
 
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(c) Each Working Capital Lender (other than the Issuing Bank) agrees that, upon
the issuance of any Letter of Credit hereunder, it shall automatically acquire a
participation in the Issuing Bank's liability thereunder in an amount equal to
such Lender's Working Capital Loan Commitment Percentage of such liability, and
each Working Capital Lender (other than the Issuing Bank) thereby shall
absolutely, unconditionally and irrevocably assume, as primary obligor and not
as surety, and shall be unconditionally obligated to the Issuing Bank to pay and
discharge when due, its Working Capital Loan Commitment Percentage of the
Issuing Bank's liability under each Letter of Credit.
 
(d) Upon receipt from a beneficiary under a Letter of Credit of a demand for
payment thereunder, in proper form to accomplish a draw in accordance with the
terms thereof, the Issuing Bank (through the Administrative Agent) shall
promptly notify each other Working Capital Lender and the Borrowers of the
amount to be paid by the Issuing Bank as a result of such demand and the date on
which payment is to be made by the Issuing Bank to such beneficiary in respect
of such demand.  Immediately following such demand by a beneficiary of payment
under a Letter of Credit, the Administrative Agent shall give each Working
Capital Lender prompt notice of the amount of the actual demand for payment,
specifying such Lender's Working Capital Loan Commitment Percentage of the
amount of such demand.
 
(e) Upon receipt by the Issuing Bank of a demand as described in
Section 2.04(d), each Working Capital Lender (other than the Issuing Bank) shall
pay to the Administrative Agent for the account of the Issuing Bank in Dollars
and in immediately available funds the amount of such Lender's Working Capital
Loan Commitment Percentage of any payment under the Letter of Credit.  Each
Working Capital Lender's obligation to make such payments to the Administrative
Agent for account of the Issuing Bank under this Section 2.04(e), and the
Issuing Bank's right to receive the same, shall be absolute and unconditional
and shall not be affected by any circumstance whatsoever, including (i) the
failure of any other Working Capital Lender to make its payment under this
Section 2.04(e), (ii) the financial condition of the Borrowers, (iii) the
existence of any Default or Event of Default or (iv) the termination of the
Commitments.  Each such payment to the Issuing Bank shall be made without any
offset, abatement, withholding or reduction whatsoever.
 
(f) To the extent that any Working Capital Lender fails to pay any amount
required to be paid pursuant to Section 2.04(e) on the date such amounts are due
to be paid, such Lender shall pay interest to the Issuing Bank (through the
Administrative Agent) on such amount from and including such due date to but
excluding the date such payment is made at a rate per annum equal to the greater
of the Federal Funds Effective Rate and a rate determined by the Administrative
Agent in accordance with banking industry rules on interbank compensation plus
(in either such case) two percent (2%).
 
(g) Each drawing honored by the Issuing Bank under a Letter of Credit shall
reduce the Maximum Available Amount under such Letter of Credit by the amount of
such drawing.
 
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(h) Notwithstanding anything herein to the contrary (including
Section 6.08 (Conditions to All Fundings)), any payments by the Issuing Bank
under any Letter of Credit shall automatically be considered to be a Working
Capital Loan to the Borrowers from the Issuing Bank and the other Working
Capital Lenders making payments to the Issuing Bank in accordance with
Section 2.04(e) in an amount equal to such Issuing Bank's and such other Working
Capital Lenders' Working Capital Loan Commitment Percentage of the amount of the
drawing on the Letter of Credit.  All such Working Capital Loans shall be repaid
or prepaid by the Borrower in accordance with the provisions of Article III
(Repayments, Prepayments, Interest and Fees).  Such Working Capital Loan shall
initially be made as a Base Rate Loan.
 
(i) The issuance of each Letter of Credit shall, in addition to the conditions
precedent set forth in Section 6.08 (Conditions to All Fundings), be subject to
the conditions precedent that (i) the First Escrow Release Date shall have
occurred, (ii) such Letter of Credit shall be in such form and contain such
terms as shall be reasonably satisfactory to the Issuing Bank consistent with
its then-current practices and procedures with respect to letters of credit of
the same type, (iii) such Letter of Credit shall be issued to satisfy a
Borrower's obligation to provide a letter of credit under a Contractual
Obligation or Necessary Project Approval, and (iv) the term of each Letter of
Credit shall expire no later than the Working Capital Maturity Date.
 
Section 2.05 Notice of Fundings.  (a) From time to time, but not more frequently
than once per calendar month (except for the Loans made on the Conversion Date),
the Borrowers may propose a Funding by delivering to the Administrative Agent a
properly completed Funding Notice not later than 12:00 noon, New York City time,
five (5) Business Days prior to the proposed Funding Date.  Each Funding Notice
delivered pursuant to this Section 2.05 shall be irrevocable and shall refer to
this Agreement and specify (i) whether such Funding is requested to be of
Eurodollar Loans and/or Base Rate Loans, (ii) the requested Funding Date (which
shall be a Business Day), (iii) the amount of such requested Funding, (iv) the
Loan(s) with respect to which such Funding is requested (and, in the case of the
Conversion Date Funding, shall include both Construction Loans and Term Loans),
and (v) if applicable, whether such requested Funding includes a Greenfield
Top-Up Funding or a Sponsor Support Reimbursement Funding; provided, that no
Funding Notice shall be required in connection with the Tranche B Escrow
Disbursement as provided in Section 2.01(s) (Construction Loans)
 
(b) The Administrative Agent shall promptly advise (i) each Construction/Term
Lender of any Construction Funding Notice (including the Conversion Date Funding
Notice) and (ii) each Working Capital Lender of any Working Capital Funding
Notice, in each case given pursuant to this Section 2.05, and of each such
Lender's portion of the requested Funding.
 
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Section 2.06 Funding of Loans.  (a)  Subject to Section 2.06(d) and except as
otherwise provided in Section 2.09 (Tranche Reallocation), each Funding (or the
Tranche B Escrow Disbursement, as the case may be) shall consist of Loans made
by the Lenders ratably in accordance with their respective applicable Commitment
Percentages and shall consist of Eurodollar Loans or Base Rate Loans as the
Borrowers may request pursuant to Section 2.05 (Notice of Fundings) (or, with
respect to the Tranche B Escrow Disbursement as provided in Section 2.01(s)
(Construction Loans)); provided, however, that the failure of any Lender to make
any Loan shall not in itself relieve any other Lender of its obligation to lend
hereunder (it being understood, however, that no Lender shall be responsible for
the failure of any other Lender to make any Loan required to be made by such
other Lender).
 
(b) Subject to Section 4.04 (Obligation to Mitigate), each Lender may (without
relieving any Borrower of its obligation to repay a Loan in accordance with the
terms of this Agreement and the Notes) at its option fulfill its Commitment with
respect to any such Loan by causing any domestic or foreign branch or Affiliate
of such Lender to make such Loan; provided that the use of such domestic or
foreign branch does not result in any increased costs payable by any of the
Borrowers hereunder.
 
(c) Subject to Section 2.06(d), (i) each Tranche A Lender shall make a Loan in
the amount of its applicable Commitment Percentage of each Construction Loan
Funding and Term Loan Funding hereunder on the proposed Funding Date by wire
transfer of immediately available funds to the Administrative Agent, not later
than 11:00 a.m., New York City time, and the Administrative Agent shall in the
case of (A) any Construction Loans, deposit the amounts so received (except to
the extent applied directly to the payment of Debt Service as specified in the
applicable Funding Notice) into (1) in the case of the Greenfield Plant 1
Construction Loans (other than Greenfield Plant Top-Up Fundings and Sponsor
Support Reimbursement Fundings), the Construction Account for such Plant, (2) in
the case of the Greenfield Plant 2 Construction Loans (other than Greenfield
Plant Top-Up Fundings and Sponsor Support Reimbursement Fundings), the
Construction Account for such Plant, (3) in the case of the Greenfield Plant 3
Construction Loans (other than Greenfield Plant Top-Up Fundings and Sponsor
Support Reimbursement Fundings), the Construction Account for such Plant, (4) in
the case of any Greenfield Plant Top-Up Fundings, the Construction Holding
Account, (5) in the case of any Sponsor Support Reimbursement Fundings, directly
to the Sponsor as provided for in the Sponsor Support Agreement, and (6) in the
case of any In-Progress Plant 2 Tranche A Construction Loans, the Construction
Holding Account, (B) in the case of any Tranche A Term Loans, apply the proceeds
of such Tranche A Term Loan solely to repay outstanding Tranche A Construction
Loans (and the Tranche A Lenders shall not be obligated to pay the proceeds of
any Tranche A Term Loan to, or upon the direction of, any Borrower, and the
Borrowers shall not be entitled to receive such proceeds), (ii) each Tranche B
Lender shall make a Loan in the amount of its applicable Commitment Percentage
of the Aggregate Tranche Commitment for Tranche B Construction Loans hereunder
in accordance with Section 2.01(s) (Construction Loans) (or, if later, on the
Tranche
 
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Conversion Date) and on the Conversion Date by wire transfer of immediately
available funds to the Administrative Agent, not later than 11:00 a.m., New York
City time, and the Administrative Agent shall, (A) in the case of any Tranche B
Construction Loans, deposit the amounts so received into the Escrow Account and
(B) in the case of any Tranche B Term Loans, apply the proceeds of such
Tranche B Term Loan solely to repay outstanding Tranche B Construction Loans
(and the Tranche B Lenders shall not be obligated to pay the proceeds of any
Tranche B Term Loan to, or upon the direction of, the Borrowers, and the
Borrowers shall not be entitled to receive such proceeds), and (iii) each
Working Capital Lender shall make a Loan in the amount of its applicable
Commitment Percentage of each Working Capital Loan Funding hereunder on the
proposed Funding Date by wire transfer of immediately available funds to the
Administrative Agent, not later than 11:00 a.m. New York City time, and the
Administrative Agent shall (except as otherwise provided in Section 2.04
(Letters of Credit) deposit the amounts so received into the Account specified
in the relevant Funding Notice; provided, that if a Funding does not occur on
the proposed Funding Date because any condition precedent to such requested
Funding herein specified has not been met, the Administrative Agent shall return
the amounts so received to the respective Lenders without interest.
 
(d) Unless the Administrative Agent has been notified in writing by (i) any
Tranche A Lender prior to a proposed Funding Date that such Tranche A Lender
will not make available to the Administrative Agent its portion of the Funding
proposed to be made on such date, (ii) any Tranche B Lender prior to the date
set forth in Section 2.01(s) (Construction Loans) or the Conversion Date (as
applicable) that such Tranche B Lender will not make available to the
Administrative Agent its portion of the Funding or the Tranche B Escrow
Disbursement or any Tranche B Conversion Disbursement, as the case may be,
proposed to be made on such date, or (iii) any Working Capital Lender prior to a
proposed Funding Date that such Working Capital Lender will not make available
to the Administrative Agent its portion of the Funding proposed to be made on
such date, the Administrative Agent may assume that such Lender has made such
amounts available to the Administrative Agent on such date and the
Administrative Agent in its sole discretion may, in reliance upon such
assumption, make available to the Borrowers a corresponding amount.  If such
corresponding amount is not in fact made available to the Administrative Agent
by such Lender and the Administrative Agent has made such amount available to
the Borrowers, the Administrative Agent shall be entitled to recover such
corresponding amount on demand from such Lender and, if such Lender pays such
amount (together with the interest noted below), then the amount so paid shall
constitute such Lender's Loan included in such Funding (or the Tranche B Escrow
Disbursement or Tranche B Conversion Disbursement, as the case may be).  If such
Lender does not pay such corresponding amount forthwith upon the Administrative
Agent's demand, the Administrative Agent shall promptly notify the Borrowers and
the Borrowers shall immediately repay such corresponding amount to the
Administrative Agent.  The Administrative Agent shall also be entitled to
recover from such Lender or the Borrowers, as the case may be, interest on such
corresponding amount in respect of each day from the date such corresponding
amount was made available by the Administrative Agent to the Borrowers to the
date such corresponding amount is recovered by the Administrative Agent, at an
interest rate per annum equal to (i) in the case of a payment made by such
Lender, the greater of the Federal Funds Effective Rate and a rate determined by
the Administrative Agent in accordance with banking industry rules on interbank
compensation and (ii) in the case of a payment made by the Borrowers, the Base
Rate plus the Applicable Margin.  Nothing herein shall be deemed to relieve any
Lender from its obligation to fulfill its commitment hereunder.  Notwithstanding
anything to the contrary in this Agreement or any other Financing Document, the
Administrative Agent may, subject to the rights of the other Senior Secured
Parties under the Security Documents and with prior notice to the Borrowers,
apply all funds and proceeds of Collateral available for the payment of any
Obligation to repay any amount owing by any Lender to the Administrative Agent
as a result of such Lender's failure to fund its applicable share of any Funding
or the Tranche B Escrow Disbursement or any Tranche B Conversion Disbursement,
as the case may be, hereunder.  A notice of the Administrative Agent to any
Lender or the Borrowers with respect to any amounts owing under this
Section 2.06(d) shall be conclusive, absent manifest error.
 
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(e) On the Conversion Date, the Lenders shall, to the extent required to pay the
amounts specified below (and in accordance with the Conversion Date Funding
Notice), disburse any unused portion of the Aggregate Construction Loan
Commitment, and any amounts on deposit in or standing to the credit of the
Construction Accounts and the Escrow Account on the Conversion Date shall be
applied, in the following order of priority:
 
(i) 
first, for deposit into the Debt Service Reserve Account in an amount which,
when taken together with all other amounts then on deposit in or credited to the
Debt Service Reserve Account, equals fifty percent (50%) of the then-current
Debt Service Reserve Requirement;

 
(ii) 
second, to the Borrowers for the payment of any remaining Project Costs;

 
(iii) 
third, to Pacific Ethanol, the amount of any Sponsor Support Reimbursement
Funding requested to be made on the Conversion Date;

 
(iv) 
fourth, to Pacific Ethanol, an amount equal to the aggregate amount of (A) all
Greenfield Plant Top-Up Fundings that have not been utilized to fund Required
Equity Contributions or Project Costs plus (B) all undisbursed Excess
Construction Loan Commitments; provided, that after giving effect to any
Construction Loan Fundings made on the Conversion Date and any payments under
this Section 2.06(e)(iii) the total aggregate amounts disbursed under the
Construction Loans and the Aggregate Working Capital Loan Commitment does not
exceed sixty-five percent (65%) of the aggregate actual and documented Project
Costs for all Greenfield Plants that have achieved their respective Commercial
Operation Dates and with respect to which any funding has been made; and

 
(v) 
fifth, remaining amounts (if any) on deposit in or standing to the credit of any
Construction Account, to the Revenue Account.

 
Section 2.07 Evidence of Indebtedness.  (a) Each Loan made by each Lender shall
be evidenced by one or more accounts or records maintained by such Lender and by
the Administrative Agent in the ordinary course of business, including the
Register for the recordation of the Loans maintained by the Administrative Agent
in accordance with the provisions of Section 11.03(c) (Assignments).  The
accounts or records maintained by the Administrative Agent and each Lender shall
be conclusive evidence, absent manifest error, of the amount of the Loans made
by the Lenders to the Borrowers and the interest and payments thereon.  Any
failure to so record or any error in doing so shall not, however, limit or
otherwise affect the obligation of the Borrowers hereunder to pay any amount
owing with respect to the Obligations.  In the event of any conflict between the
accounts and records maintained by any Lender and the accounts and records of
the Administrative Agent in respect of such matters, the accounts and records of
the Administrative Agent shall control in the absence of manifest error.
 
(b) The Borrowers agree that in addition to the Register and any other accounts
and records maintained pursuant to Section 2.07(a), the Loans made by each
Lender shall be evidenced, in each case when requested by a Lender, by a Note or
Notes duly executed on behalf of each Borrower, dated the Closing Date (or, if
later, the date of any such request), in the case of the Construction Loans and
the Working Capital Loans, and dated the Conversion Date (or, if later, the date
of any such request), in the case of the Term Loans, payable to the order of
such Lender in a principal amount equal to such Lender's Tranche B Construction
Loan Commitment, Tranche A Construction Loan Commitment, Working Capital Loan
Commitment, Tranche A Term Loan Commitment or Tranche B Term Loan Commitment, as
applicable.  Each Lender may attach schedules to its Note and endorse thereon
the date, amount and maturity of its Loan and payments with respect thereto.
 
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Section 2.08 Termination or Reduction of Commitments.  (a)  Any unused
Construction Loan Commitments shall be automatically and permanently terminated
on the earlier to occur of the Conversion Date and the Conversion Date Certain,
in each case after giving effect to all Construction Loans, if any, to be made
on such day.
 
(b) Any unused Term Loan Commitments shall be automatically and permanently
terminated on the earlier to occur of the Conversion Date and the Conversion
Date Certain, in each case after giving effect to all Term Loans, if any, to be
made on such day.
 
(c) The Construction Loan Commitments, the Term Loan Commitments and the Working
Capital Loan Commitments shall be automatically and permanently terminated in
full, and any amounts on deposit in or standing to the credit of the Escrow
Account shall be released and reimbursed to the Tranche B Lenders, if the First
Escrow Release Date has not occurred on or before December 31, 2007.
 
(d) If each of the In-Progress Plant 1 Construction Loan Funding Date and the
In-Progress Plant 2 Construction Loan Funding Date has not occurred on or before
December 31, 2007 or, if earlier, either of Boardman or Madera is released
pursuant to Section 7.04 (Release of Borrower), all unused Construction Loan
Commitments, all Term Loan Commitments (other than an amount of the Term Loan
Commitments equal to any Construction Loans then outstanding) and all unused
Working Capital Loan Commitments (other than the Working Capital Plant
Commitment for any Plant whose Loans have been funded) shall be automatically
and permanently terminated in full and all funds on deposit in or standing to
the credit of the Escrow Account shall be released and reimbursed to the Tranche
B Lenders.
 
(e) In the event that any Plant achieves its Commercial Operation Date and fails
to meet such Plant's Performance Guarantee, both the Construction Loan
Commitments for such Plant and the Term Loan Commitments shall be automatically
and permanently reduced on the Commercial Operation Date for such Plant in the
amounts required in accordance with Schedule 2.08(e).
 
(f) The Working Capital Loan Commitments shall be automatically and permanently
terminated on the applicable Working Capital Maturity Date (with respect to each
applicable Working Capital Lender).
 
(g) In the event of any prepayment of the Construction Loans pursuant to
Section 3.09 (Optional Prepayment) or Section 3.10 (Mandatory Prepayment), or
any termination of Construction Loan Commitments pursuant to Section 2.08(j),
the Term Loan Commitments shall be automatically and permanently reduced in an
amount equal to such prepayment.
 
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(h) In the event that all Construction Loan Commitments and Term Loan
Commitments have been cancelled or terminated in full and all outstanding
Construction Loans and Term Loans have been repaid in full, the Working Capital
Loan Commitments of each Working Capital Lender shall be automatically and
permanently terminated in full upon written notice of such Working Capital
Lender delivered to the Administrative Agent and the Borrowers' Agent within
ninety (90) days following such occurrence.
 
(i) Any unused Construction Loan Commitments, Term Loan Commitments and Working
Capital Loan Commitments shall be terminated, and any amounts on deposit in or
standing to the credit of the Escrow Account shall be released and reimbursed to
the Tranche B Lenders, upon the occurrence of an Event of Default if and to the
extent required pursuant to Section 9.02 (Action upon Bankruptcy) or
Section 9.03 (Action Upon Other Event of Default) in accordance with the terms
thereof.
 
(j) In the event of a release of any Borrower in accordance with Section 7.04
(Release of Borrower), all Construction Loan Commitments with respect to such
Borrower's Plant, and Working Capital Loan Commitments in the amount equal to
the Working Capital Plant Commitment for each such Plant that has been released
shall, on the date of such release, be automatically and permanently terminated
in full.
 
(k) If, on the Conversion Date, any amounts are released and reimbursed to the
Tranche B Lenders from the Escrow Account, the Tranche B Term Loan Commitments
shall be automatically and permanently reduced in an amount equal to such
reimbursement.
 
Section 2.09 Tranche Reallocation.  (a) At any time, and from time to time,
until the earlier to occur of (x) the date that is six (6) months from the date
of this Agreement and (y) the Business Day immediately following the date of the
Funding Notice for In-Progress Plant 2, any Tranche Reallocation Eligible Lender
may, by delivery of a Tranche Conversion Notice to the Administrative Agent and
the Borrowers' Agent, convert all or any of its Tranche Reallocation Eligible
Commitments that are Tranche A Commitments to Tranche B Commitments.  Any
conversion of Tranche Reallocation Eligible Commitments made pursuant to this
Section 2.09 shall be in a minimum amount of two million five hundred thousand
Dollars ($2,500,000) (or, if less, the aggregate total amount of all Tranche
Reallocation Eligible Commitments of any single Tranche Reallocation Eligible
Lender).
 
(b) Any conversion described in Section 2.09(a) shall become effective on the
date that is five (5) Business Days from such notice (or, if earlier, the
Funding Date for In-Progress Plant 2) (each such date, a "Tranche Conversion
Date").
 
(c) On the Tranche Conversion Date (provided that no Default or Event of Default
has occurred and is continuing (and has not been waived by the Required
Lenders)), the applicable Tranche Reallocation Eligible Lender shall fund such
converted Loans to the Escrow Account in accordance with the funding procedures
set forth in Section 2.06 (Funding of Loans).  If a Default or Event of Default
has occurred and is continuing (and has not been waived by the Required Lenders)
on such Tranche Conversion Date, the funding of such converted Loans described
in this Section 2.09(c) shall occur on the fifth (5th) Business Day following
receipt by the applicable Tranche Reallocation Eligible Lender of written notice
confirming that no Default or Event of Default is then continuing.
 
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(d) Each Tranche B Construction Loan funded pursuant to this Section 2.09 on a
Funding Date shall bear interest as a Eurodollar Loan or Base Rate Loan, and
have an initial Interest Period, in each such case as specified in the
applicable Funding Notice.  Each Tranche B Construction Loan funded pursuant to
this Section 2.09 on a date that is not a Funding Date shall bear interest as a
Eurodollar Loan or Base Rate Loan, and have an initial Interest Period, in each
such case as specified in an Interest Period Notice delivered with respect to
such Tranche B Construction Loan in accordance with Section 3.05 (Interest
Periods) or, if no such Interest Period Notice is delivered, shall bear interest
as a Base Rate Loan.
 
(e) In the event that any Tranche Reallocation Eligible Lender has previously
received a Note with respect to its Tranche Reallocation Eligible Commitment, on
any Tranche Conversion Date applicable to such Commitments, at the request of
such Lender, replacement Notes shall be issued reflecting such conversion.
 
Section 2.10 Additional Greenfield Plant.  The Borrowers and the Lenders
acknowledge that the Borrowers may (but shall not be obligated to), in the
future, request that the Lenders consider making available an additional senior
loan to finance the construction of an additional ethanol facility to be owned
and operated by a wholly-owned Subsidiary of Pacific Holding subject to (a) the
satisfaction of all due diligence inquiries of each Lender, (b) the prior
written approval of all of the Lenders, and (c) the execution and delivery of
all amendments to the then-existing Financing Documents and all additional
financing documents as the Lenders may require.  The Borrowers acknowledge and
agree that this Section 2.10 does not constitute a commitment or obligation on
the part of any Lender to provide funding for any such additional ethanol
facility.
 
ARTICLE III
 
REPAYMENTS, PREPAYMENTS, INTEREST AND FEES
 
Section 3.01 Repayment of Construction Loan Fundings.  The Construction Loans
shall be repaid in full on the Conversion Date with the proceeds of the Term
Loans.
 
Section 3.02 Repayment of Term Loan Fundings.  (a)  The Borrowers
unconditionally and irrevocably promise to pay to the Administrative Agent for
the ratable account of each applicable Construction/Term Lender the aggregate
outstanding principal amount of the Term Loans on the Initial Quarterly Payment
Date and on each Quarterly Payment Date thereafter, in an amount equal to (i) in
the case of the Tranche A Term Loans, one and one-half percent (1.5%) of the
aggregate total amount of the Tranche A Term Loans made on the Conversion Date
and (ii) in the case of the Tranche B Term Loans, one and one-half percent
(1.5%) of the aggregate total amount of the Tranche B Term Loans made on the
Conversion Date (which amounts shall, in each such case, be reduced as a result
of any prepayments of the Term Loans made in accordance with Section 3.09
(Optional Prepayment) or Section 3.10 (Mandatory Prepayment) in accordance with
the terms set forth therein and shall be reduced as a result of any reduction in
the Term Loan Commitments pursuant to Section 2.08(b), (i) or (k)(Termination or
Reduction of Commitments) on a pro rata basis):
 
(b) Notwithstanding anything to the contrary set forth in Section 3.02(a), the
final principal repayment installment on the Final Maturity Date shall in any
event be in an amount equal to the aggregate principal amount of all Term Loans
outstanding on such date.
 
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Section 3.03 Repayment of Working Capital Loan Fundings.  The Borrowers
unconditionally and irrevocably promise to pay in full to the Administrative
Agent, for the ratable account of each Working Capital Lender, the aggregate
outstanding principal amount of the Working Capital Loans on the Working Capital
Maturity Date.
 
Section 3.04 Interest Payment Dates.  (a) Interest accrued on each Loan shall be
payable, without duplication:
 
(i) 
on the Maturity Date for such Loan;

 
(ii) 
with respect to Eurodollar Loans, the last day of each applicable Interest
Period (and, if such Interest Period exceeds three months, on the day three
months after such Eurodollar Loan is made or continued) or, if applicable, any
date on which such Eurodollar Loan is converted to a Base Rate Loan;

 
(iii) 
with respect to Base Rate Loans, on each Quarterly Payment Date or, if
applicable, any date on which such Base Rate Loan is converted to a Eurodollar
Loan; and

 
(iv) 
with respect to any Loan, on any date when such Loan is prepaid hereunder.

 
(b) Interest accrued on the Loans or other monetary Obligations after the date
such amount is due and payable (whether on the Maturity Date for such Loan, any
Quarterly Payment Date, any Interest Payment Date, upon acceleration or
otherwise) shall be payable upon demand.
 
(c) Interest hereunder shall be due and payable in accordance with the terms
hereof, before and after judgment, regardless of whether an Insolvency
Proceeding exists in respect of any Borrower, and to the fullest extent
permitted by law, the Lenders shall be entitled to receive post-petition
interest during the pendancy of an Insolvency Proceeding.
 
Section 3.05 Interest Rates.  (a) Pursuant to each properly delivered Funding
Notice and Interest Period Notice, (i) the Eurodollar Loans shall accrue
interest at a rate per annum during each Interest Period applicable thereto
equal to the sum of the Eurodollar Rate for such Interest Period plus the
Applicable Margin and (ii) each Base Rate Loan shall accrue interest at a rate
per annum during each Quarterly Period equal to the sum of the Base Rate for
such Quarterly Period plus the Applicable Margin.
 
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(b) On or before 12:00 noon, New York City time, at least four (4) Business Days
prior to the end of each Interest Period for each Eurodollar Loan, the Borrowers
shall, and at least four (4) Business Days prior to the end of any Quarterly
Period for any Base Rate Loans, the Borrowers may, deliver to the Administrative
Agent an Interest Period Notice setting forth the Borrowers' election (i) to
continue any such Eurodollar Loan as (or convert any such Base Rate Loan to) a
Eurodollar Loan and setting forth the Borrowers' election with respect to the
duration of the next Interest Period applicable to such continued or converted
Eurodollar Loan, which Interest Period shall be one (1), two (2), three (3) or
six (6) months in length or (ii) to convert any such Eurodollar Loan to a Base
Rate Loan at the end of the then-current Interest Period; provided, that if an
Event of Default has occurred and is continuing, all Eurodollar Loans shall
automatically convert into Base Rate Loans at the end of the then-current
Interest Periods.  Upon the waiver or cure of such Event of Default, the
Borrowers shall have the option to continue such Loans as Base Rate Loans and/or
to convert such Loans to Eurodollar Loans (by delivery of an Interest Period
Notice), subject to the notice periods set forth above.  Notwithstanding
anything to the contrary, any portion of the Loans maturing in less than one
month may not be continued as, or converted to, Eurodollar Loans and will
automatically convert to Base Rate Loans at the end of the then-current Interest
Period.
 
(c) If the Borrowers fail to deliver an Interest Period Notice in accordance
with Section 3.05(b) with respect to any Eurodollar Loan, such Eurodollar Loan
shall automatically continue as a Eurodollar Loan with an Interest Period of one
(1) month.
 
(d) All Eurodollar Loans shall bear interest from and including the first day of
the applicable Interest Period to (and excluding) the last day of such Interest
Period at the interest rate determined as applicable to such Eurodollar Loan.
 
(e) Notwithstanding anything to the contrary, the Borrowers shall have, in the
aggregate, no more than seven (7) separate Eurodollar Loans outstanding at any
one time prior to the Conversion Date or four (4) separate Eurodollar Loans
outstanding at any one time after the Conversion Date.  For purposes of the
foregoing, (i) Eurodollar Loans having different Interest Periods, regardless of
whether they commence on the same date, shall be considered separate Eurodollar
Loans and (ii)  all Eurodollar Loans having the same Interest Period and
commencing on the same date shall be considered to be a single Eurodollar Loan.
 
(f) All Base Rate Loans shall bear interest from and including the first day of
each Quarterly Period (or the day on which Eurodollar Loans are converted to
Base Rate Loans as required under Section 3.05(b) or under Article IV
(Eurodollar Rate and Tax Provisions)) to (and including) the next succeeding
Quarterly Payment Date at the interest rate determined as applicable to such
Base Rate Loan.
 
Section 3.06 Default Interest Rate.  If all or a portion of (i) the principal
amount of any Loan is not paid when due (whether on the Maturity Date for such
Loan, by acceleration or otherwise), such overdue amount shall bear interest at
a rate per annum equal to the rate that would otherwise be applicable thereto
plus two percent (2%) or (ii) any Obligation (other than principal on the Loans)
is not paid when due (whether on the Maturity Date, by acceleration or
otherwise), such overdue amount shall bear interest at a rate per annum equal to
the rate then applicable to Base Rate Loans plus two percent (2%) (the rate in
effect plus such two percent (2%) per annum, the "Default Rate"), in each case,
with respect to clauses (i) and (ii) above, from the date of such non-payment
until such amount is paid in full (after as well as before judgment).
 
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Section 3.07 Interest Rate Determination.  The Administrative Agent shall
determine the interest rate applicable to the Loans in accordance with the terms
of this Agreement, and shall give prompt notice to the Borrowers and the Lenders
of such determination, and its determination thereof shall be conclusive in the
absence of manifest error.
 
Section 3.08 Computation of Interest and Fees.  (a)  All computations of
interest for Base Rate Loans when the Base Rate is determined by WestLB's "prime
rate" shall be made on the basis of a year of 365 or 366 days, as the case may
be, and actual days elapsed.  All computations of interest for Eurodollar Loans
and for Base Rate Loans when the Base Rate is determined by the Federal Funds
Effective Rate shall be made on the basis of a 360-day year and actual days
elapsed.
 
(b) Interest shall accrue on each Loan for the day on which the Loan is made,
and shall not accrue on a Loan, or any portion thereof, for the day on which the
Loan or such portion is paid; provided, that any Loan that is repaid on the same
day on which it is made shall bear interest for one (1) day.
 
(c) Each determination by the Administrative Agent of an interest rate or fee
hereunder shall be conclusive and binding for all purposes, absent manifest
error.
 
Section 3.09 Optional Prepayment.  (a)  The Borrowers shall have the right at
any time, and from time to time, to prepay the Loans, in whole or in part, upon
not fewer than three (3) Business Days' prior written notice to the
Administrative Agent; provided, that any optional prepayment prior to the
Conversion Date shall be subject to receipt by the Administrative Agent of
satisfactory evidence, certified by the Borrowers and confirmed by the
Independent Engineer, that sufficient funds will be available to achieve the
Commercial Operation Date for each Plant with respect to which Commitments
remain outstanding.
 
(b) Any partial prepayment of the Loans shall be in a minimum amount of five
hundred thousand Dollars ($500,000) and in integral multiples of one hundred
thousand Dollars ($100,000) in excess thereof.
 
(c) Each notice of prepayment given by the Borrowers under this Section 3.09
shall specify the prepayment date, the portion of the principal amount of the
Loans to be prepaid and whether such prepayment shall be applied to Construction
Loans or Term Loans and/or Working Capital Loans.  All prepayments under this
Section 3.09 shall be made by the Borrowers to the Administrative Agent for the
account of the applicable Lenders and shall be accompanied by accrued interest
on the principal amount being prepaid to but excluding the date of payment and
by any additional amounts required to be paid under Section 4.05 (Funding
Losses).
 
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(d) Amounts of principal prepaid under this Section 3.09 shall:
 
(i) 
in the case of prepayments on the Construction Loans, be allocated by the
Administrative Agent pro rata between the Tranche A Loans and the Tranche B
Loans based on their respective outstanding principal amounts on the date of
such prepayment (and then pro rata between the In-Progress Plant 1 Construction
Loans, In-Progress Plant 2 Construction Loans, Greenfield Plant 1 Construction
Loans, Greenfield Plant 2 Construction Loans and Greenfield Plant 3 Construction
Loans of such Tranche then outstanding);

 
(ii) 
in the case of partial prepayments on the Term Loans, be applied by the
Administrative Agent pro rata between the Tranche A Loans and the Tranche B
Loans based on their respective outstanding principal amounts on the date of
such prepayment (and then on a pro rata basis to the remaining outstanding
installments of principal of the Term Loans of each such Tranche); and

 
(iii) 
in the case of any prepayment of the Working Capital Loans, shall be applied
(A) first, to repay outstanding amounts of the Working Capital Loans and
(B) second, at the Borrowers' option, to reduce the Working Capital Loan
Commitment by depositing an amount equal to such reduction in the Working
Capital Reserve Account.

 
(e) Any optional prepayment of Tranche B Loans (i) on or prior to the first
anniversary of the Conversion Date shall be made at one hundred two percent
(102%) of the principal amount of the Tranche B Loans being prepaid at such
time; (ii) after the first anniversary of the Conversion Date and until the
second anniversary of the Conversion Date, shall be made at one hundred one
percent (101%) of the principal amount of the Tranche B Loans being prepaid at
such time; and (iii) thereafter, any optional prepayment of the Tranche B
Loans  shall be made without penalty or premium.
 
(f) Amounts prepaid pursuant to this Section 3.09 (other than pursuant to
Section 3.09(d)(iii)(A)) may not be reborrowed.
 
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Section 3.10 Mandatory Prepayment.  (a)  The Borrowers shall be required to
prepay the Loans:
 
(i) 
upon receipt by any of the Borrowers of Insurance Proceeds, as required pursuant
to Sections 8.14(d)(ii) and (e) (Insurance and Condemnation Proceeds Accounts);

 
(ii) 
upon receipt by any of the Borrowers of Condemnation Proceeds, as required
pursuant to Sections 8.14(d)(ii) and (e) (Insurance and Condemnation Proceeds
Accounts);

 
(iii) 
upon receipt of any Project Document Termination Payments, as required pursuant
to Section 8.14(d)(ii) (Extraordinary Proceeds Account); and

 
(iv) 
upon receipt of proceeds of any asset disposal (other than proceeds received
from the sale of Products) that are not used for replacement in accordance with
Section 7.02(f) (Negative Covenants - Asset Dispositions), as required pursuant
to Section 8.14(c)(ii) (Extraordinary Proceeds Account).

 
(b) The Borrowers shall be required to prepay the Term Loans and the Working
Capital Loans:
 
(i) 
on each Quarterly Payment Date, as required pursuant to Sections 8.08(c)(xi) and
(xiii) (Revenue Account); provided, that such amounts will be applied first to
the Tranche A Term Loans (until all amounts outstanding under the Tranche A Term
Loans have been paid in full) and then to the Tranche B Term Loans; and

 
(ii) 
on any Quarterly Payment Date, if the Historical Debt Service Coverage Ratio on
such Quarterly Payment Date is less than 1.5:1, as required pursuant to
Section 8.08(c)(xiv) (Revenue Account) and Section 8.13(b)(ii) (Prepayment
Holding Account).

 
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(c) If at any time after any Plant has achieved its Commercial Operation Date a
Borrowing Base Certificate demonstrates that the then-outstanding principal
amount of the Working Capital Loans exceeds the then-effective Aggregate Working
Capital Commitment or the then-applicable Working Capital Loan Availability,
then the Borrowers shall, within three (3) Business Days following the delivery
of such Borrowing Base Certificate, prepay the Working Capital Loans in the
amount of such excess.
 
(d) All prepayments under this Section 3.10 shall be made by the Borrowers to
the Administrative Agent for the account of the applicable Lenders and shall be
accompanied by accrued interest on the principal amount being prepaid to but
excluding the date of payment and by any additional amounts required to be paid
under Section 4.05 (Funding Losses).
 
(e) Amounts of principal prepaid under this Section 3.10 (other than pursuant to
Section 3.10(c)) shall be allocated by the Administrative Agent:
 
(i) 
in the case only of prepayment made pursuant to Section 3.10(a) prior to the
Conversion Date, first, pro rata between the Tranche A Loans and the Tranche B
Loans based on their respective outstanding principal amounts on the date of
such prepayment (and then pro rata between the In-Progress Plant 1 Construction
Loans, the In-Progress Plant 2 Construction Loans, the Greenfield Plant 1
Construction Loans, the Greenfield Plant 2 Construction Loans and the Greenfield
Plant 3 Construction Loans of each such Tranche then outstanding), second, in an
amount equal to the Maximum Available Amounts under all Letters of Credit then
outstanding, to a sub-account of the Working Capital Reserve Account as cash
collateral to secure the repayment of any Working Capital Loans that may result
from a draw on any such Letter of Credit, third, to the outstanding principal
amount of the Working Capital Loans, and fourth, all remaining amounts shall be
deposited into the Working Capital Reserve Account (up to an amount such that
following such deposit, the Working Capital Reserve Account is fully funded to
the then-current Working Capital Reserve Required Amount); or

 
(ii) 
in the case of a prepayment made after the Conversion Date, first, to the Term
Loans (except as otherwise provided in Section 3.10(b)(i)) pro rata between the
Tranche A Loans and the Tranche B Loans based on their respective outstanding
principal amounts on the date of such prepayment and, in the event of a partial
prepayment of the Term Loans, to the remaining outstanding installments of
principal of the Term Loans of each Tranche in inverse order of maturity,
second, in an amount equal to the Maximum Available Amounts under all Letters of
Credit then outstanding, to the Working Capital LC Collateral Sub-Account as
cash collateral to secure the repayment of any Working Capital Loans that may
result from a draw on any such Letter of Credit, third, to the outstanding
principal amount of the Working Capital Loans, and fourth, all remaining amounts
shall be deposited in the Working Capital Reserve Account (up to an amount such
that following such deposit, the Working Capital Reserve Account is fully funded
to the then-current Working Capital Reserve Required Amount).

 
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(f) Amounts prepaid pursuant to this Section 3.10 (other than with respect to
the Working Capital Loans) may not be reborrowed.
 
Section 3.11 Time and Place of Payments.  (a)  The Borrowers shall make each
payment (including any payment of principal of or interest on any Loan or any
Fees or other Obligations) hereunder and under any other Financing Document
without setoff, deduction or counterclaim not later than 12:00 noon New York
City time on the date when due in Dollars in immediately available funds to the
Administrative Agent at the following account:  JPMorgan Chase Bank - NY, Acct.
#920-1-060663, for the Account of WestLB AG-NY Branch, ABA #021-000-021, Ref:
Pacific Ethanol, Attention: Andrea Bailey, or at such other office or account as
may from time to time be specified by the Administrative Agent to the
Borrowers.  Funds received after 12:00 noon New York City time shall be deemed
to have been received by the Administrative Agent on the next succeeding
Business Day.
 
(b) The Administrative Agent shall promptly remit in immediately available funds
to each Senior Secured Party its share, if any, of any payments received by the
Administrative Agent for the account of such Senior Secured Party.
 
(c) Whenever any payment (including any payment of principal of or interest on
any Loan or any Fees or other Obligations) hereunder or under any other
Financing Document shall become due, or otherwise would occur, on a day that is
not a Business Day, such payment shall (except as otherwise required by the
proviso to the definition of "Interest Period" with respect to Eurodollar Loans)
be made on the immediately succeeding Business Day, and such increase of time
shall in such case be included in the computation of interest or Fees, if
applicable.
 
Section 3.12 Fundings and Payments Generally.  (a) Unless the Administrative
Agent has received notice from the Borrowers prior to the date on which any
payment is due to the Administrative Agent for the account of the Lenders
hereunder that the Borrowers will not make such payment, the Administrative
Agent may assume that the Borrowers have made such payment on such date in
accordance with this Agreement and may, in reliance upon such assumption,
distribute to the Lenders the amount due.  If the Borrowers have not in fact
made such payment, then each of the Lenders severally agrees to repay to the
Administrative Agent forthwith on demand the amount so distributed to such
Lender in immediately available funds with interest thereon, for each day from
and including the date such amount is distributed to it to but excluding the
date of payment to the Administrative Agent, at the greater of (i) the Federal
Funds Effective Rate and (ii) a rate determined by the Administrative Agent in
accordance with banking industry rules on interbank compensation.  A notice of
the Administrative Agent to any Lender with respect to any amount owing under
this Section 3.12(a) shall be conclusive, absent manifest error.
 
(b) Nothing herein shall be deemed to obligate any Lender to obtain funds for
any Loan in any particular place or manner or to constitute a representation by
any Lender that it has obtained or will obtain funds for any Loan in any
particular place or manner.
 
(c) The Borrowers hereby authorize each Lender, if and to the extent payment
owed to such Lender is not made when due under this Agreement or under the Notes
held by such Lender, to charge from time to time against any or all of any
Borrower's accounts with such Lender (other than, in the event that the Account
Bank is also a Lender, any Project Account) any amount so due.
 
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Section 3.13 Fees.  (a)  From and including the date hereof until the
Construction Loan Maturity Date, the Borrowers agree to pay to the
Administrative Agent, for the account of the applicable Lenders, on each
Quarterly Payment Date, a commitment fee (a "Commitment Fee") equal to one-half
of one percent (0.50%) per annum on (i) the average daily amount by which the
Aggregate Tranche Commitment for Tranche A Construction Loans exceeds the
outstanding amount of the Tranche A Construction Loans and (ii) the average
daily amount by which the Aggregate Working Capital Loan Commitment exceeds the
sum of (x) the outstanding amount of Working Capital Loans plus (y) the Stated
Amounts of all outstanding Letters of Credit, in each case, during the calendar
quarter or portion thereof then ended.  All Commitment Fees shall be computed on
the basis of the actual number of days elapsed in a year of 365 or 366 days, as
pro-rated for any partial quarter, as applicable.
 
(b) Upon the issuance of each Letter of Credit pursuant to Section 2.04 (Letters
of Credit) and until the termination, cancellation or expiration of such Letter
of Credit, the Borrowers agree to pay to the Administrative Agent, on each
Quarterly Payment Date and on the date on which such Letter of Credit expires,
is cancelled or terminates, (i) for the account of the Working Capital Lenders,
an availability fee (the "Letter of Credit Availability Fee") at a rate per
annum equal to the Working Capital Applicable Margin for Eurodollar Loans on the
average daily Maximum Available Amount under such Letter of Credit during the
calendar quarter or portion thereof then ended and (ii) for the account of the
Issuing Bank, a fronting fee (the "Letter of Credit Fronting Fee") equal to the
greater of (x) fifteen hundred Dollars ($1,500) or (y) an amount calculated at a
rate per annum equal to fifteen-hundredths of one percent (0.15%) of the average
daily Maximum Available Amount under such Letter of Credit during the calendar
quarter or portion thereof then ended.  All Letter of Credit Availability Fees
and Letter of Credit Fronting Fees shall be computed on the basis of the actual
number of days elapsed in a year of 360 days, as pro-rated for any partial
quarter, as applicable.
 
(c) Each Borrower agrees to pay to the Administrative Agent for the account of
the Lead Arrangers, the Lenders and the Agents, additional fees in the amounts
and at the times from time and time agreed to in writing by the Borrowers and
the Administrative Agent, including pursuant to the Fee Letters.
 
(d) All Fees shall be paid on the dates due, in immediately available
funds.  Once paid, none of the Fees shall be refundable under any circumstances.
 
Section 3.14 Pro Rata Treatment.  (a) Except as otherwise expressly provided
herein (including Section 4.01 (Eurodollar Rate Lending Unlawful), Section 2.08
(Termination or Reduction of Commitments) and Section 2.09 (Tranche
Reallocation)), each Funding of Tranche A Loans and Tranche B Loans, each
Tranche B Escrow Disbursement and each reduction of commitments of any type,
shall be allocated by the Administrative Agent as set forth below:
 
(i) 
first, (A) in the case of any Funding or the Tranche B Escrow Disbursement, to
the Tranche B Loans (until such amounts have been fully funded) and then to the
Tranche A Loans or (B) in the case of any reduction, pro rata between the
Tranche A Loans and the Tranche B Loans related to such reduction; and

 
(ii) 
second, pro rata among the applicable Tranche A Lenders and Tranche B Lenders,
as the case may be, in accordance with their respective applicable Commitment
Percentages.

 
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(b) Except as required under Section 3.09 (Optional Prepayment), Section 3.10
(Mandatory Prepayment) or Article IV (Eurodollar Rate and Tax Provisions), each
payment or prepayment of principal of the Loans shall be allocated by the
Administrative Agent pro rata among the applicable Lenders in accordance with
the respective principal amounts of their outstanding Loans of the type being
repaid, each payment of interest on the Loans shall be allocated by the
Administrative Agent pro rata among the applicable Lenders in accordance with
the respective interest amounts outstanding on their outstanding Loans of the
type in respect of which interest is being paid, and each payment of fees on the
Commitments and/or the Letters of Credit shall be allocated by the
Administrative Agent pro rata among the applicable Lenders in accordance with
their respective Commitments of the type to which such fees relate.
 
(c) Each Lender agrees that in computing such Lender's portion of any Funding or
the Tranche B Escrow Disbursement or any Tranche B Conversion Disbursement to be
made hereunder, the Administrative Agent may, in its discretion, round each
Lender's percentage of such Funding or the Tranche B Escrow Disbursement or
Tranche B Conversion Disbursement, as the case may be, to the next higher or
lower whole Dollar amount.
 
Section 3.15 Sharing of Payments.  (a)  If any Lender shall obtain any payment
or other recovery (whether voluntary, involuntary, by application of setoff or
otherwise) on account of any Loan (other than pursuant to the terms of
Article IV (Eurodollar Rate and Tax Provisions)) in excess of its pro rata share
of payments then or therewith obtained by all Lenders holding Loans of such
type, such Lender shall purchase from the other Lenders such participations in
Loans made by them as shall be necessary to cause such purchasing Lender to
share the excess payment or other recovery ratably with each of them; provided,
however, that if all or any portion of the excess payment or other recovery is
thereafter recovered from such purchasing Lender, the purchase shall be
rescinded and each Lender that has sold a participation to the purchasing Lender
shall repay to the purchasing Lender the purchase price to the ratable extent of
such recovery together with an amount equal to such selling Lender's ratable
share (according to the proportion of (x) the amount of such selling Lender's
required repayment to the purchasing Lender to (y) the total amount so recovered
from the purchasing Lender) of any interest or other amount paid or payable by
the purchasing Lender in respect of the total amount so recovered.  Each
Borrower agrees that any Lender so purchasing a participation from another
Lender pursuant to this Section 3.15 may, to the fullest extent permitted by
law, exercise all its rights of payment (including pursuant to Section 11.15
(Rights of Setoff)) with respect to such participation as fully as if such
Lender were the direct creditor of the Borrowers in the amount of such
participation.
 
(b) If under any applicable bankruptcy, insolvency or other similar law, any
Lender receives a secured claim in lieu of a setoff to which this Section 3.15
applies, such Lender shall, to the extent practicable, exercise its rights in
respect of such secured claim in a manner consistent with the rights of the
Lenders entitled under this Section 3.15 to share in the benefits of any
recovery on such secured claim.
 
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Section 3.16 Termination of Interest Rate Protection Agreement in Connection
with Any Prepayment.  The Borrowers shall, in connection with any prepayment
made by the Borrowers pursuant to Section 3.09 (Optional Prepayment) or
Section 3.10 (Mandatory Prepayment), terminate an aggregate notional amount
under the Interest Rate Protection Agreements equal to the amount (if any) by
which the aggregate notional amount under the Interest Rate Protection
Agreements would exceed the aggregate outstanding principal amount of the
Construction Loans or Term Loans, as the case may be, immediately after giving
effect to such prepayment; and in each case, such termination shall be made
within five (5) Business Days of the date of such prepayment (or, to the extent
that the aggregate notional amount under the Interest Rate Protection Agreements
exceeds the aggregate outstanding principal of the Construction Loans or the
Term Loans, as applicable, by no more than ten percent (10%), within thirty (30)
days following such prepayment).  The amount of any Swap Termination Value due
in respect of the Interest Rate Protection Agreements terminated in accordance
with the immediately foregoing sentence shall be made by the Borrowers from
amounts available with which to make such prepayment.
 
ARTICLE IV
 
EURODOLLAR RATE AND TAX PROVISIONS
 
Section 4.01 Eurodollar Rate Lending Unlawful.  (a) If any Lender reasonably
determines (which determination shall, upon notice thereof to the Borrowers and
the Administrative Agent, be conclusive and binding on the Borrowers absent
manifest error) that the introduction of or any change in or in the
interpretation of any Law after the date hereof makes it unlawful, or any
central bank or other Governmental Authority asserts after the date hereof that
it is unlawful, for such Lender to make, maintain or fund any Loan as a
Eurodollar Loan, the obligations of such Lender to make, maintain or fund any
Loan as a Eurodollar Loan shall, upon such determination, forthwith be suspended
until such Lender shall notify the Administrative Agent that the circumstances
causing such suspension no longer exist, and all Eurodollar Loans of such Lender
shall automatically convert into Base Rate Loans at the end of the then-current
Interest Periods with respect thereto or sooner, if required by such Law or
assertion.  Upon any such conversion the Borrowers shall pay any accrued
interest on the amount so converted and, if such conversion occurs on a day
other than the last day of the then-current Interest Period for such affected
Eurodollar Loans, such Lender shall be entitled to make a request for, and the
Borrowers shall pay, compensation for breakage costs under Section 4.05 (Funding
Losses).
 
(b) If such Lender notifies the Borrowers that the circumstances giving rise to
the suspension described in Section 4.01(a) no longer apply, the Borrowers may
elect (by delivering an Interest Period Notice) to convert the principal amount
of any such Base Rate Loan to a Eurodollar Loans in accordance with this
Agreement.
 
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Section 4.02 Inability to Determine Eurodollar Rates.  (a) In the event, and on
each occasion, that on or before the day that is three (3) Business Days prior
to the commencement of any Interest Period for any Eurodollar Loan, the
Administrative Agent shall have determined in good faith that (i) Dollar
deposits in the amount of such Loan and with an Interest Period similar to such
Interest Period are not generally available in the London interbank market, or
(ii) the rate at which such Dollar deposits are being offered will not
adequately and fairly reflect the cost to any Lender of making, maintaining or
funding the principal amount of such Loan during such Interest Period, or
(iii) adequate and reasonable means do not exist for ascertaining LIBOR, the
Administrative Agent shall forthwith notify the Borrowers and the Lenders of
such determination, whereupon each such Eurodollar Loan will automatically, on
the last day of the then-existing Interest Period for such Eurodollar Loan,
convert into a Base Rate Loan.  In the event of any such determination pursuant
to Section 4.02(a)(i) or (iii), any Funding Notice delivered by the Borrowers
shall be deemed to be a request for a Base Rate Loan until the Administrative
Agent determines that the circumstances giving rise to such notice no longer
exist.  In the event of any determination pursuant to Section 4.02(a)(ii), each
affected Lender shall, and is hereby authorized by the Borrowers to, fund its
portion of the Loans as a Base Rate Loan.  Each determination by the
Administrative Agent hereunder shall be conclusive absent manifest error.
 
(b) Upon the Administrative Agent's determination that the condition that was
the subject of a notice under Section 4.02(a) has ceased, the Administrative
Agent shall forthwith notify the Borrower and the Lenders of such determination,
whereupon the Borrowers may elect (by delivering an Interest Period Notice) to
convert any such Base Rate Loan to a Eurodollar Loan on the last day of the
then-current Quarterly Period in accordance with this Agreement.
 
Section 4.03 Increased Eurodollar Loan Costs.  If after the date hereof, the
adoption of any applicable Law or any change therein, or any change in the
interpretation or administration thereof by any Governmental Authority charged
with the interpretation or administration thereof, or compliance by any Lender
(or its Eurodollar Office) with any request or directive (whether or not having
the force of law) of any Governmental Authority would increase the cost (other
than with respect to Taxes, which are addressed in Section 4.07 (Taxes)) to such
Lender of, or result in any reduction in the amount of any sum receivable by
such Lender (whether of principal, interest or any other amount) in respect of,
making, maintaining or funding (or of its obligation to make, maintain or fund)
the Loans as Eurodollar Loans, then the Borrowers agree to pay to the
Administrative Agent for the account of such Lender the amount of any such
increase or reduction.  Such Lender shall promptly notify the Administrative
Agent and the Borrowers in writing of the occurrence of any such event, such
notice to state in reasonable detail the reasons (including the basis for
determination) therefor and the additional amount required to compensate fully
such Lender for such increased cost or reduced amount.  Such additional amounts
shall be payable by the Borrowers directly to such Lender within thirty (30)
days of delivery of such notice, and such notice shall be binding on the
Borrowers absent manifest error.
 
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Section 4.04 Obligation to Mitigate.  (a)  Each Lender agrees after it becomes
aware of the occurrence of an event that would entitle it to give notice
pursuant to Section 4.0l (Eurodollar Rate Lending Unlawful), 4.03 (Increased
Eurodollar Loan Costs), or 4.06 (Increased Capital Costs) or to receive
additional amounts pursuant to Section 4.07 (Taxes), such Lender shall use
reasonable efforts to make, fund or maintain its affected Loan through another
lending office if as a result thereof the increased costs would be avoided or
materially reduced or the illegality would thereby cease to exist and if, in the
opinion of such Lender, the making, funding or maintaining of such Loan through
such other lending office would not be disadvantageous to such Lender, contrary
to such Lender's normal banking practices or violate any applicable Law.
 
(b) No change by a Lender in its Domestic Office or Eurodollar Office made for
such Lender's convenience shall result in any increased cost to the Borrowers.
 
(c) If any Lender demands compensation pursuant to Section 4.03 (Increased
Eurodollar Loan Costs) or 4.06 (Increased Capital Costs) with respect to any
Eurodollar Loan, the Borrowers may, at any time upon at least three (3) Business
Day's prior notice to such Lender through the Administrative Agent, elect to
convert such Loan into a Base Rate Loan.  Thereafter, unless and until such
Lender notifies the Borrowers that the circumstances giving rise to such notice
no longer apply, all such Eurodollar Loans by such Lender shall bear interest as
Base Rate Loans.  If such Lender notifies the Borrowers that the circumstances
giving rise to such notice no longer apply, the Borrowers may elect (by
delivering an Interest Period Notice) to convert the principal amount of each
such Base Rate Loan to a Eurodollar Loans in accordance with this Agreement.
 
Section 4.05 Funding Losses.  In the event that any Lender incurs any loss or
expense (including any loss or expense incurred by reason of the liquidation or
redeployment of deposits or other funds acquired by such Lender to make,
continue or maintain any portion of the principal amount of any Loan as a
Eurodollar Loan, and any customary administrative fees charged by such Lender in
connection with the foregoing, but excluding any lost profits) as a result of
(a) any conversion or repayment or prepayment of the principal amount of any
Loans on a date other than the scheduled last day of the Interest Period
applicable thereto, whether pursuant to Section 3.09 (Optional Prepayment), 3.10
(Mandatory Prepayment), 4.01(a) Eurodollar Rate Lending Unlawful) or otherwise
or (b) the Borrowers failing to make a Funding or the Tranche B Escrow
Disbursement in accordance with any Funding Notice; then, upon the written
notice (including the basis for determination) of such Lender to the Borrowers
(with a copy to the Administrative Agent), the Borrowers shall, within thirty
(30) days of receipt thereof, pay to the Administrative Agent for the account of
such Lender such amount as will (in the reasonable determination of such Lender)
reimburse such Lender for such loss or expense.  Such written notice shall be
binding on the Borrowers absent manifest error.
 
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Section 4.06 Increased Capital Costs.  If after the date hereof any change in,
or the introduction, adoption, effectiveness, interpretation, reinterpretation
or phase-in of, any applicable Law or guideline, or request (whether or not
having the force of law) of any Governmental Authority affects the amount of
capital required to be maintained by any Lender, and such Lender reasonably
determines that the rate of return on its capital as a consequence of its Loan
is reduced to a level below that which such Lender could have achieved but for
the occurrence of any such circumstance then, in any such case upon notice from
time to time by such Lender to the Borrowers, the Borrowers shall pay within
thirty (30) days after such demand directly to such Lender additional amounts
sufficient to compensate such Lender for such reduction in rate of return.  A
statement of such Lender as to any such additional amount or amounts (including
the basis for determination) shall be binding on the Borrowers absent manifest
error.
 
Section 4.07 Taxes.
 
(a) Payments Free of Taxes.  Any and all payments by or on account of any
Obligations shall be made free and clear of, and without deduction for, any
Taxes, unless required by Law; provided that if any Borrower shall be required
to deduct any Indemnified Taxes from any such payment, then (i) the sum payable
shall be increased as necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this
Section 4.07) the Agent or Lender (as the case may be) receives an amount equal
to the sum it would have received had no such deductions been made, (ii) the
Borrowers shall make such deductions and (iii) the Borrowers shall pay the full
amount deducted to the relevant Governmental Authority in accordance with
applicable Law.
 
(b) Payment of Other Taxes by the Borrowers.  In addition, the Borrowers shall
timely pay any Indemnified Taxes arising from any payment made under any
Financing Document or from the execution, delivery or enforcement of, or
otherwise with respect to, any Financing Document and not collected by
withholding at the source as contemplated by Section 4.07(a) to the relevant
Governmental Authority in accordance with applicable Law.
 
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(c) Indemnification by the Borrowers.  The Borrowers shall indemnify each Agent
and each Lender, within thirty (30) days after written demand therefor, for the
full amount of any Indemnified Taxes (including Indemnified Taxes imposed or
asserted on or attributable to amounts payable under this Section 4.07) paid by
such Agent or Lender, as the case may be, and any penalties, interest, additions
to tax and reasonable expenses arising therefrom or with respect thereto (other
than those resulting from the gross negligence or willful misconduct of such
Agent or Lender), whether or not such Indemnified Taxes were correctly or
legally imposed or asserted by the relevant Governmental Authority.  A
certificate as to the amount of such payment or liability (including the basis
of determination) delivered to the Borrowers by a Lender or Agent, as the case
may be, shall be conclusive absent manifest error.
 
(d) Evidence of Payments.  As soon as reasonably practicable after any payment
of Indemnified Taxes by any Borrower to a Governmental Authority, such Borrower
shall deliver to the Administrative Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy of
the return reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.
 
(e) Foreign Lenders.  Each Lender (including any Participant and any other
Person to which any Lender transfers its interests in this Agreement as provided
under Section 11.03 (Assignments)) that is not a United States Person (a
"Non-U.S. Lender") shall deliver to the Borrowers and the Administrative Agent
two (2) copies of U.S. Internal Revenue Service Form W-8ECI, Form W-8BEN or
Form W-8IMY (with supporting documentation), or any subsequent versions thereof
or successors thereto, properly completed and duly executed by such Non-U.S.
Lender claiming complete exemption from, or a reduced rate of, U.S. federal
withholding tax on all payments of interest by the Borrowers under the Financing
Documents, together with, in the case of a Non-U.S. Lender that is relying on an
exemption pursuant to Section 871(h) or 881(c) of the Code, a statement
substantially in the form of Exhibit 4.07 certifying that such Lender is not a
bank described in Section 881(c)(3)(A) of the Code.  Such forms shall be
delivered by each Non-U.S. Lender on or before the date it becomes a party to
this Agreement.  In addition, each Non-U.S. Lender shall deliver such forms
promptly upon the obsolescence or invalidity of any form previously delivered by
such Non-U.S. Lender.  Each Non-U.S. Lender shall promptly notify the Borrowers
and the Administrative Agent at any time it determines that it is no longer in a
position to provide any previously delivered certificate to the Borrowers (or
any other form of certification adopted by U.S. taxing authorities for such
purpose).  The Borrowers shall not be obligated to pay any additional amounts in
respect of U.S. federal income taxes pursuant to this Section 4.07 (or make an
indemnification payment pursuant to this Section 4.07) to any Lender (or any
Participant or other Person to which any Lender transfers its interests in this
Agreement as provided under Section 11.03 (Assignments)) if the obligation to
pay such additional amounts (or such indemnification) would not have arisen but
for a failure by such Lender to comply with this Section 4.07(e).
 
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ARTICLE V
 
REPRESENTATIONS AND WARRANTIES
 
In order to induce each Agent, each Lender and each other party hereto (other
than the Borrowers and the Borrowers' Agent) to enter into this Agreement and to
induce each Lender to make the Loans hereunder, each Borrower represents and
warrants to each Agent and each Lender as set forth in this Article V on the
date hereof, on the Closing Date, on the date of each Funding Notice and
Issuance Request, on each Funding Date and on the Conversion Date (in each case,
except to the extent such representations and warranties expressly relate to a
future date or as otherwise provided in Article VI (Conditions Precedent)).
 
Section 5.01 Organization; Power and Compliance with Law.  Each of the Borrowers
(a) is a limited liability company duly formed, validly existing and in good
standing under the laws of the State of Delaware, (b) is duly qualified to do
business as is now being conducted and as is proposed to be conducted by such
Borrower and is in good standing as a foreign limited liability company in each
jurisdiction where the nature of its business requires such qualification (other
than any such failure to be so qualified or in good standing that could not
reasonably be expected to have a Material Adverse Effect) and (c) has all
requisite limited liability company power and authority required as of the date
this representation is made or deemed repeated to enter into and perform its
obligations under each Transaction Document to which it is a party and to
conduct its business as currently conducted by it.
 
Section 5.02 Due Authorization; Non-Contravention.  The execution, delivery and
performance by each of the Borrowers of each Transaction Document to which it is
a party are within such Borrower's limited liability company powers, have been
duly authorized by all necessary limited liability company action, and do not:
 
(a) contravene such Borrower's Organic Documents (including its Borrower LLC
Agreement);
 
(b) contravene in any material respect any Law binding on or affecting such
Borrower;
 
(c) with respect to Pacific Holding or any other Borrower with respect to whose
Plant a Funding has been made or is being requested, (i) in the case of any
Financing Document, contravene any Contractual Obligation binding on or
affecting such Borrower or (ii) in the case of any Project Document, contravene
any Contractual Obligation binding on or affecting such Borrower (other than in
the case of this Section 5.02(c)(ii) any contravention which could not
reasonably be expected to have a Material Adverse Effect);
 
(d) require any consent or approval under such Borrower's Organic Documents that
has not been obtained;
 
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(e) with respect to Pacific Holding or any other Borrower with respect to whose
Plant a Funding has been made or is being requested, require any consent or
approval under any Contractual Obligations binding on or affecting such Borrower
other than any approvals or consents which have been obtained (and, in the case
only of the execution, delivery and performance of the Project Documents, any
other approvals or consents the failure of which to obtain could not reasonably
be expected to have a Material Adverse Effect); or
 
(f) result in, or require the creation or imposition of, any Lien on any of such
Borrower's properties other than Permitted Liens.
 
Section 5.03 Governmental Approvals.  The representations and warranties made in
this Section 5.03 shall apply only on and after the Closing Date and then only
with respect to Pacific Holding and each other Borrower with respect to whose
Plant a Funding has been made or is being requested.
 
(a) All material Governmental Approvals that are required to be obtained by any
Borrower in connection with (i) the due execution, delivery and performance by
such Borrower of the Financing Documents to which it is a party and (ii) the
grant by the Borrowers and the Pledgor of the Liens granted under the Security
Documents and the validity, perfection and enforceability thereof have been
obtained, are in full force and effect, are properly in the name of the
appropriate Person, and are final and Non-Appealable.
 
(b) As of the initial Funding Date for each Plant:
 
(i) 
all material Governmental Approvals that are required under applicable Law to be
obtained by any Borrower in connection with the construction and operation of
the applicable Plant as contemplated by the Transaction Documents (together with
the Governmental Approvals described in Section 5.03(a) the "Necessary Project
Approvals"), are listed on the Governmental Approvals Update Schedule for such
Plant;

 
(ii) 
the Necessary Project Approvals listed in Part A of each applicable Governmental
Approvals Update Schedule have been obtained, are in full force and effect, are
properly in the name of the appropriate Person, are final and Non-Appealable;

 
(iii) 
the Necessary Project Approvals listed on Part B of each applicable Governmental
Approvals Update Schedule are not required under applicable Laws to be obtained
prior to the initial Funding Date for such Plant (collectively, the "Deferred
Approvals") and have not yet been obtained;  and

 
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(iv) 
Part B of each applicable Governmental Approvals Update Schedule specifies the
date by which, or stage of construction or operation for which, each Deferred
Approval included therein is required to be obtained.

 
(c) On each Funding Date after the initial Funding Date of a Plant, (i) all
Necessary Project Approvals are in full force and effect, are properly in the
name of the appropriate Person, and are final and Non-Appealable, and (ii) all
Deferred Approvals which as of such Funding Date are required to be obtained,
have been obtained, are in full force and effect, are properly in the name of
the appropriate Person, and are final and Non-Appealable (except as set forth on
Part C of each applicable Governmental Approvals Update Schedule).
 
(d) For the avoidance of doubt, the Borrowers' right to provide Governmental
Approvals Update Schedules includes the right to update such schedules to
correct any reference to a Governmental Approval that has been replaced in
accordance with applicable Law.
 
(e) The information set forth in each application (including any updates or
supplements thereto) submitted by or on behalf of any Borrower in connection
with each Necessary Project Approval that has been obtained as of the date this
representation is made or deemed repeated was accurate and complete in all
material respects at the time of submission and continues to be accurate in all
material respects and complete in all respects to the extent required for the
issuance or continued effectiveness of such Necessary Project Approval (except,
with respect to continued effectiveness, for Necessary Project Approvals that
are subject to a supplemental filing shown on Part B of any applicable
Governmental Approvals Update Schedule that has not yet been filed), and none of
the Borrowers has any knowledge of any event, act, condition or state of facts
inconsistent with such information (except, in each case, for such inaccuracies
and omissions as could not reasonably be expected to result in a material delay
to the issuance of any Necessary Project Approval or as could not otherwise be
expected to have a Material Adverse Effect with respect to the relevant Plant).
 
(f) The Borrowers reasonably believe that each Necessary Project Approval that
remains to be obtained will be obtained in a final and Non-Appealable form in
the ordinary course without undue delay or material expense and without
unanticipated expensive or burdensome conditions prior to the time it is
required to be obtained under applicable Law.
 
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Section 5.04 Investment Company Act.  None of the Borrowers is, and after giving
effect to the Loans and the application of the proceeds of the Loans as
described herein none of the Borrowers will be, an "investment company" or a
company "controlled" by an "investment company," within the meaning of the
Investment Company Act of 1940, as amended.
 
Section 5.05 Validity of Financing Documents.  Each Financing  Document to which
any Borrower is a party has been duly authorized, validly executed and
delivered, and constitutes the legal, valid and binding obligations of such
Borrower enforceable in accordance with its respective terms, except as the
enforceability hereof or thereof may be limited by (a) bankruptcy, insolvency,
reorganization, or other similar laws affecting the enforcement of creditors'
rights generally and (b) general equitable principles (whether considered in a
proceeding in equity or at law).
 
Section 5.06 Financial Information.  Each of the financial statements of Pacific
Holding delivered pursuant to Section 6.01(h) (Conditions to Closing - Financial
Statements) and Sections 7.03(a) and (b) (Reporting Requirements) has been
prepared in accordance with GAAP, and fairly presents in all material respects
the consolidated financial condition of the Borrowers as at the dates thereof
and the results of their operations for the period then ended (subject, in the
case of unaudited financial statements, to changes resulting from audit and
normal year-end adjustments and the absence of footnotes).
 
Section 5.07 No Material Adverse Effect.  Since September 30, 2006 no Material
Adverse Effect has occurred and is continuing.
 
Section 5.08 Project Compliance.  (a) Each Plant with respect to which a Funding
has been made or is being requested is and will continue to be owned, developed,
constructed and maintained in material compliance with all applicable Laws and
the requirements of all Necessary Project Approvals.
 
(b) Each Plant with respect to which a Funding has been made or is being
requested is and will continue to be owned, developed, constructed and
maintained in compliance in all material respects with all of the Borrowers'
Contractual Obligations (including the Project Documents applicable to such
Plant, taking into account any cure or grace periods thereunder and the
Borrower's right to replace Project Documents as set forth in Section 9.01(j)
(Events of Default - Project Document Defaults; Termination)) (except, in the
case of Contractual Obligations other than Project Documents, to the extent such
failure to comply could not reasonably be expected to result in a Material
Adverse Effect with respect to such Plant or Borrower).
 
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Section 5.09 Litigation.  (a) No action, suit, proceeding or investigation has
been instituted or threatened against any of Pacific Holding, the Pledgor, or
any Plant or Borrower with respect to whose Plant any Funding has been made or
is being requested (including in connection with any Necessary Project Approval)
that, individually or in the aggregate, has had or could reasonably be expected
to have a Material Adverse Effect any Plant or Borrower; and
 
(b) no action, suit, proceeding or investigation has been instituted or
threatened against any Major Project Party that is party to any Project Document
with Pacific Holding or that relates to any Borrower or Plant with respect to
which a Funding has been made or is being requested that, individually or in the
aggregate, has had or could reasonably be expected to have a Material Adverse
Effect.
 
Section 5.10 Sole Purpose Nature; Business.  None of the Borrowers has conducted
nor is conducting any business or activities other than businesses and
activities relating to the ownership, development, testing, financing,
construction, operation and maintenance of the Project as contemplated by the
Transaction Documents.
 
Section 5.11 Contracts.  The representations and warranties made in this
Section 5.11 shall apply only on and after the Closing Date and then only with
respect to Pacific Holding and each other Borrower with respect to whose Plant a
Funding has been made or is being requested.  Each reference in this Section
5.11 to Schedule 5.11 shall be deemed to be a reference to Schedule 5.11, as
updated from time to time by the delivery of any Contract Disclosure Updates.
 
(a) As of the Closing Date, all contracts, agreements, instruments, letters,
understandings, or other documentation to which any Borrower is a party or by
which it or any of its properties is bound as of the date hereof (other than the
Financing Documents), including the Project Documents and any Subordinated Debt
Agreements (including all documents amending, supplementing, interpreting or
otherwise modifying or clarifying such agreements and instruments) are listed in
Schedule 5.11.
 
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(b) As of the initial Funding Date for each Plant:
 
(i) 
all material contracts, agreements, instruments, letters, understandings, or
other documentation that are required under to be obtained by any Borrower in
connection with the construction and operation of the applicable Plant as
contemplated by the Transaction Documents (collectively for all Plants, the
"Necessary Project Contracts"), are listed in Schedule 5.11;

 
(ii) 
the Necessary Project Contracts listed in Part A of Schedule 5.11 have been
obtained and are in full force and effect;

 
(iii) 
the Necessary Project Contracts listed on Part B of Schedule 5.11 are not
required to be obtained prior to the initial Funding Date for such Plant
(collectively, the "Deferred Contracts") and have not yet been obtained;  and

 
(iv) 
Part B of Schedule 5.11 specifies the date by which, or stage of construction or
operation for which, each Deferred Contract included therein is required to be
obtained.

 
(c) On each Funding Date after the initial Funding Date of a Plant, (i) all
Necessary Project Contracts are in full force and effect (other than any such
failures which are not material to such Plant), and (ii) all Deferred Contracts
which as of such Funding Date are required to be obtained, have been obtained
and are in full force and effect (other than any such failures which are not
material to such Plant).
 
(d) Nothing herein shall limit the Borrowers' right to replace or substitute
contracts, agreements, instruments, letters, understandings, or other
documentation to the extent permitted by this Agreement (and Schedule 5.11 shall
be automatically updated to reflect any such replacement or substitution).
 
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(e) The following representations and warranties shall apply on and after the
Closing Date and only with respect to Pacific Holding and each other Borrower
with respect to whose Plant a Funding has been made or is being requested:
 
(i) 
To the knowledge of each Borrower, all representations, warranties and other
factual statements made by each Project Party in each of the Project Documents
to which such Project Party is a party are true and correct as of the date(s)
made or deemed repeated (other than any such inaccuracies that could not
reasonably be expected to have a Material Adverse Effect on the relevant Plant).

 
(ii) 
As of any date (after the date hereof) on which this representation is made or
deemed repeated, there are no material contracts, agreements, instruments, or
documents between any Borrower and any other Person relating to any Borrower or
the Project other than (i) the Transaction Documents, (ii) the agreements listed
in Schedule 5.11, and (iii) any other agreements permitted by this Agreement.

 
(iii) 
There have been no Change Orders under any Construction Contract for any
Greenfield Plant with respect to which a Funding has been made or is being
requested, other than in accordance with Section 7.02(m)(ii) (Negative Covenants
- Change Orders).

 
(iv) 
All conditions precedent to the obligations of the respective parties under the
Project Documents that have been executed as of the date this representation is
made or deemed repeated have been satisfied or waived by the parties thereto
except for such conditions precedent that do not and cannot be satisfied until a
later stage of development of the relevant Plant, and each Borrower has no
reason to believe that any such condition precedent (other than any condition
precedent that can be waived by any Borrower without any material adverse
result) cannot be satisfied on or prior to the commencement of the appropriate
stage of development of such Plant.

 
Section 5.12 Collateral.  (a)  On and after the Closing Date, the Collateral
includes all of the Equity Interests in and all of the tangible and intangible
assets of each of Pacific Holding, Madera and Boardman (except, with respect to
all assets, as otherwise provided in the applicable Security Agreement).  On and
after the date of the initial Stockton Funding, the Collateral includes all of
the Equity Interests in and all of the tangible and intangible assets of
Stockton (except, with respect to all assets, as otherwise provided in the
applicable Security Agreement).  On and after the date of the initial Burley
Funding, the Collateral includes all of the Equity Interests in and all of the
tangible and intangible assets of Burley (except, with respect to all assets, as
otherwise provided in the applicable Security Agreement).  On and after the date
of the initial Brawley Funding, the Collateral includes all of the Equity
Interests in and all of the tangible and intangible assets of Brawley (except,
with respect to all assets, as otherwise provided in the applicable Security
Agreement).
 
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(b) On and after the Closing Date (or, with respect to Local Accounts, the
initial Funding Date), the respective Liens and security interests granted to
the Collateral Agent (for the benefit of the Senior Secured Parties) pursuant to
the Security Documents in effect on each date this representation is made or
deemed repeated (i) constitute, as to personal property included in the
Collateral, a valid first-priority security interest in such personal property
and (ii) constitute, as to the Mortgaged Property included in the Collateral, a
valid first-priority Lien of record in the Mortgaged Property, in each case
subject only to Permitted Liens.
 
(c) The security interest granted to the Collateral Agent (for the benefit of
the Senior Secured Parties) pursuant to the Security Documents relating to
assets of or equity in Pacific Holding or each other Borrower with respect to
whose Plant a Funding has been made or is being requested in the Collateral
consisting of personal property will be perfected (i) with respect to any
property that can be perfected by filing, upon the filing of UCC financing
statements in the filing offices identified in Schedule 5.12, (ii) with respect
to any Project Account or Local Account Collateral that can be perfected solely
by control, upon execution of this Agreement and the Blocked Account Agreements
and (iii) with respect to any property (if any) that can be perfected solely by
possession, upon the Collateral Agent receiving possession thereof, and in each
case such security interest will be, as to Collateral perfected under the UCC or
otherwise as aforesaid, superior and prior to the rights of all third Persons
now existing or hereafter arising whether by way of mortgage, lien, security
interests, encumbrance, assignment or otherwise, in each case subject only to
Permitted Liens.  On and after the Closing Date (or, with respect to Local
Accounts, the initial Funding Date), all such action as is necessary has been
taken to establish and perfect the Collateral Agent's rights in and to the
Collateral covered by the Security Documents relating to assets of or equity in
Pacific Holding or each other Borrower with respect to whose Plant a Funding has
been made or is being requested in effect on the date this representation is
made or deemed repeated to the extent the Collateral Agent's security interest
can be perfected by filing, including any recordation, filing, registration,
giving of notice or other similar action.  No filing, recordation, re-filing or
re-recording other than those listed on Schedule 5.12 (as the same may be
updated at the written request of the Borrowers' Agent, with the written
agreement of the Administrative Agent, following any change in applicable law)
is necessary to perfect (or maintain the perfection of) the interest, title or
Liens of the Security Documents (to the extent the Collateral Agent's security
interest can be perfected by filing or recording), and on and as of each
relevant date which this representation and warranty is made or deemed repeated,
all such filings or recordings have been made with respect to each Security
Document then in effect.  On and after the Closing Date, the Borrowers and the
Pledgor have properly delivered or caused to be delivered to the Collateral
Agent, or provided the Collateral Agent control of, all Collateral relating to
assets of or equity in Pacific Holding or each other Borrower with respect to
whose Plant a Funding has been made or is being requested that requires
perfection of the Liens and security interests described above by possession or
control.  On and after the Closing Date, all or substantially all of the
Collateral relating to assets of or equity in Pacific Holding or each other
Borrower with respect to whose Plant a Funding has been made or is being
requested (other than the Project Account Collateral, the Local Account
Collateral, certificates, securities, investments, chattel paper, books and
records and general intangibles), including the Mortgaged Property, is or will
(when acquired) be located on the Sites.
 
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Section 5.13 Ownership of Properties.  (a)  Madera has a good and valid fee
ownership interest in the Site for the Madera Plant (except as contemplated by
Section 7.02(f) (Negative Covenants - Asset Dispositions)).  Boardman has a good
and valid leasehold interest or valid fee ownership in the Site for the Boardman
Plant (except as contemplated by Section 7.02(f)).  On and after the date of the
initial Funding Notice for the Burley Plant, Burley has a good and valid fee
ownership interest in the Site for the Burley Plant (except as contemplated by
Section 7.02(f)).  On and after the date of the initial Funding Notice for the
Brawley Plant, Brawley has a good and valid fee ownership interest in the Site
for the Brawley Plant (except as contemplated by Section 7.02(f)).  On and after
the date of the initial Funding Notice for the Stockton Plant, Stockton has a
good and valid leasehold interest or valid fee ownership in the Site for the
Stockton Plant (except as contemplated by Section 7.02(f)).
 
(b) On and after the Closing Date, (except as contemplated by Section 7.02(f)
(Negative Covenants - Asset Dispositions)) the Borrowers have a good and valid
ownership interest, leasehold interest, license interest or other right of use
in all other property and assets (tangible and intangible) included in the
Collateral relating to assets of or equity in Pacific Holding and each other
Borrower with respect to whose Plant a Funding has been made or is being
requested (other than the collateral pledged pursuant to the Pacific Holding
Pledge Agreement) under each Security Document that has been executed as of the
date this representation is made or deemed repeated.  Such ownership interests,
leasehold interest, license interest or other rights of use are and will be,
together with any other assets or interests contemplated to be acquired pursuant
to the applicable Construction Budget, sufficient to permit construction and
operation of the Plants with respect to which a Funding has been made or is
being requested by the relevant Borrowers, substantially in accordance with the
Project Documents applicable to each such Plant.  None of said properties or
assets of or equity in Pacific Holding or any other Borrower with respect to
whose Plant a Funding has been made or is being requested are subject to any
Liens or, to the knowledge of each Borrower, any other claims of any Person,
including any easements, rights of way or similar agreements affecting the use
or occupancy of the Project, any Plant or any Site, other than Permitted Liens
and, with respect to claims, to the extent permitted by Section 5.09(c)
(Litigation).
 
(c) All Equity Interests in each of Madera, Boardman, Stockton, Brawley and
Burley are owned by Pacific Holding.
 
(d) All Equity Interests in Pacific Holding are owned by the Pledgor.
 
(e) The properties and assets of each of the Borrowers are separately
identifiable and are not commingled with the properties and assets of any other
Person (other than any Borrower) and are readily distinguishable from one
another (except to the extent otherwise contemplated by the Transaction
Documents).
 
(f) None of Pacific Holding or any other Borrower with respect to whose Plant a
Funding has been made or is being requested has any leasehold interest in, and
none of the Borrowers is lessee of, any real property other than the Leased
Premises or other leasehold interests acquired by the Borrowers with the prior
written approval of the Administrative Agent.
 
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Section 5.14 Taxes.  (a)  Each Borrower has (i) filed all Tax Returns required
by law to have been filed by it and (ii) has paid all Taxes thereby shown to be
owing, as and when the same are due and payable, other than in the case of this
Section 5.14(a)(ii), (A) Taxes that are subject to a Contest or (B) the
nonpayment of immaterial Taxes in an aggregate amount not in excess of
twenty-five thousand Dollars ($25,000) at any one time outstanding (taking into
account any interest and penalties that could accrue or be applicable to such
past-due Taxes), and provided that such Taxes are no more than forty-five (45)
days past due.
 
(b) None of the Borrowers is or will be taxable as a corporation for federal,
state or local tax purposes.
 
(c) No Borrower is a party to any tax sharing agreement with any Person
(including the Pledgor or any other Affiliate of any Borrower).
 
Section 5.15 Patents, Trademarks, Etc.  Pacific Holding and each other Borrower
with respect to whose Plant a Funding has been made or is being requested has
obtained and holds in full force and effect all material patents, trademarks,
copyrights and other such material rights or adequate licenses therein, free
from unduly burdensome restrictions, that are necessary for the ownership,
construction, operation and maintenance of the Project.
 
Section 5.16 ERISA Plans.  None of the Borrowers nor any ERISA Affiliate has (or
within the five year period immediately preceding the date hereof had) any
liability in respect of any Plan or Multiemployer Plan.  None of the Borrowers
has any contingent liability with respect to any post-retirement benefit under
any "welfare plan" (as defined in Section 3(1) of ERISA), other than liability
for continuation coverage under Part 6 of Title I of ERISA.
 
Section 5.17 Property Rights, Utilities, Supplies Etc.  (a) On and after the
Closing Date, all material property interests, utility services, means of
transportation, facilities and other materials necessary for the development,
engineering, construction, testing, start-up, use and operation of the Project
(including, as necessary, gas, roads, rail transport, electrical, water and
sewage services and facilities) are, or will be when needed, available to each
Plant with respect to which a Funding has been made or is being requested and
arrangements in respect thereof have been made.
 
(b) There are no material materials, supplies or equipment necessary for
construction and, from and after the Commercial Operation Date for the
respective Plant, operation or maintenance of each Plant with respect to which a
Funding has been made or is being requested that are not expected to be
available at the relevant Site on commercially reasonable terms consistent with
the Construction Schedule and the Construction Budget, or the Operating Budget,
for the respective Plant, as applicable.
 
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Section 5.18 No Defaults.  (a) No Funding Default has occurred and is
continuing.
 
(b) None of Pacific Holding or any other Borrower with respect to whose Plant a
Funding has been made or is being requested is in any breach of, or in any
default under, any of such Borrower's Contractual Obligations (other than the
Project Documents) that has had or could reasonably be expected to have a
Material Adverse Effect with respect to such Borrower or Plant).
 
Section 5.19 Environmental Warranties.  The following representations and
warranties shall apply on and after the Closing Date and only with respect to
Pacific Holding, each other Borrower with respect to whose Plant a Funding has
been made or is being requested and each such Plant:
 
(a) (i) Each Borrower is in compliance in all material respects with all
applicable Environmental Laws, (ii) each Borrower has all Environmental
Approvals required to operate its business as presently conducted or as
reasonably anticipated to be conducted and is in compliance in all material
respects with the terms and conditions thereof, (iii)  no Borrower nor any of
its Environmental Affiliates has received any written communication (other than
any such communication that the Administrative Agent has agreed in writing is
not materially adverse) from a Governmental Authority that alleges that any
Borrower or any Environmental Affiliate is not in compliance in all material
respects with all Environmental Laws and Environmental Approvals, and (iv) there
are no circumstances that may prevent or interfere in the future with any
Borrower's compliance in all material respects with all applicable Environmental
Laws and Environmental Approvals.
 
(b) There is no Environmental Claim pending against any Borrower.  No
Environmental Affiliate has taken any action or violated any Environmental Law
that to the knowledge of the Borrowers could reasonably be expected to result in
an Environmental Claim.
 
(c) There are no present or past actions, activities, circumstances, conditions,
events or incidents, including the release, emission, discharge, presence or
disposal of any Material of Environmental Concern, that could reasonably be
expected to form the basis of any Environmental Claim against any Borrower or
any Environmental Affiliate.
 
(d) Without in any way limiting the generality of the foregoing, (i) there are
no on-site or off-site locations in which any Borrower or, to the knowledge of
each Borrower, any Environmental Affiliate has stored, disposed or arranged for
the disposal of Materials of Environmental Concern that could reasonably be
expected to form the basis of an Environmental Claim, (ii) none of the Borrowers
knows of any underground storage tanks located or to be located on property
owned or leased by any Borrower except as identified on Schedule 5.19(d)(ii) (as
the same may be updated in writing by the Borrowers' Agent with the written
approval of the Administrative Agent), (iii) there is no asbestos or lead paint
contained in or forming part of any building, building component, structure or
office space owned or leased by any Borrower except in such form, condition and
quantity as could not reasonably be expected to result in an Environmental
Claim, and (iv) no polychlorinated biphenyls (PCBs) are or will be used or
stored at any property owned or leased by any Borrower, except in such form,
condition and quantity as could not reasonably be expected to result in an
Environmental Claim.
 
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(e) None of the Borrowers has received any letter or request for information
under Section 104 of the CERCLA, or comparable state laws, and to the knowledge
of the Borrowers, none of the operations of the Borrowers is the subject of any
investigation by a Governmental Authority evaluating whether any remedial action
is needed to respond to a release or threatened release of any Material of
Environmental Concern at any Plant or Site or at any other location, including
any location to which any Borrower has transported, or arranged for the
transportation of, any Material of Environmental Concern with respect to the
Project.
 
Section 5.20 Regulations T, U and X.  None of the Borrowers is engaged in the
business of extending credit for the purpose of purchasing or carrying margin
stock, and no proceeds of any Loan will be used for any purpose that violates,
or would be inconsistent with, F.R.S. Board Regulation T, U or X.  Terms for
which meanings are provided in F.R.S. Board Regulation T, U or X or any
regulations substituted therefore, as from time to time in effect, are used in
this Section 5.20 with such meanings.
 
Section 5.21 Accuracy of Information.  (a)  As of the Closing Date, all factual
information heretofore or contemporaneously furnished by or on behalf of Pacific
Holding or any other Borrower with respect to whose Plant a Funding has been
made or is being requested in this Agreement, in any other Transaction Document
or otherwise in writing to any Senior Secured Party, any Consultant, or counsel
for purposes of or in connection with this Agreement and the other Financing
Documents or any transaction contemplated hereby or thereby (other than
projections, budgets and other "forward-looking" information that have been
prepared on a reasonable basis and in good faith by the Borrowers) is, when
taken as a whole (and after giving effect to any supplement of such information)
and as of the date furnished, true and accurate in every material respect and
such information is not, when taken as a whole (and after giving effect to any
supplement of such information) as of the date furnished, incomplete by omitting
to state any material fact necessary to make such information not misleading in
any material respect.
 
(b) As of the date of the Madera Funding Notice and the Madera Funding Date, all
factual information furnished from and after the Closing Date (including any
information provided in connection with such Funding Notice) by or on behalf of
the Borrowers with respect to Madera or the Madera Plant, in any Transaction
Document or otherwise in writing to any Senior Secured Party, any Consultant, or
counsel for purposes of or in connection with this Agreement and the other
Financing Documents or any transaction contemplated hereby or thereby (other
than projections, budgets and other "forward-looking" information that have been
prepared on a reasonable basis and in good faith by the Borrowers) is, when
taken as a whole (and after giving effect to any supplement of such information)
and as of the date furnished, true and accurate in every material respect and
such information is not, when taken as a whole (and after giving effect to any
supplement of such information) as of the date furnished, incomplete by omitting
to state any material fact necessary to make such information not misleading in
any material respect.
 
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(c) As of the date of the Boardman Funding Notice and the Boardman Funding Date,
all factual information furnished from and after the Closing Date (including any
information provided in connection with such Funding Notice) by or on behalf of
the Borrowers with respect to Boardman or the Boardman Plant, in any Transaction
Document or otherwise in writing to any Senior Secured Party, any Consultant, or
counsel for purposes of or in connection with this Agreement and the other
Financing Documents or any transaction contemplated hereby or thereby (other
than projections, budgets and other "forward-looking" information that have been
prepared on a reasonable basis and in good faith by the Borrowers) is, when
taken as a whole (and after giving effect to any supplement of such information)
and as of the date furnished, true and accurate in every material respect and
such information is not, when taken as a whole (and after giving effect to any
supplement of such information) as of the date furnished, incomplete by omitting
to state any material fact necessary to make such information not misleading in
any material respect.
 
(d) As of the date of the initial Funding Notice for each Greenfield Plant and
the initial Funding Date for such Greenfield Plant, all factual information
furnished from and after the Closing Date (including any information provided in
connection with such Funding Notice) by or on behalf of the Borrowers with
respect to such Greenfield Plant or the Borrower that owns such Greenfield
Plant, in any Transaction Document or otherwise in writing to any Senior Secured
Party, any Consultant, or counsel for purposes of or in connection with this
Agreement and the other Financing Documents or any transaction contemplated
hereby or thereby (other than projections, budgets and other "forward-looking"
information that have been prepared on a reasonable basis and in good faith by
the Borrowers) is, when taken as a whole (and after giving effect to any
supplement of such information) and as of the date furnished, true and accurate
in every material respect and such information is not, when taken as a whole
(and after giving effect to any supplement of such information) as of the date
furnished, incomplete by omitting to state any material fact necessary to make
such information not misleading in any material respect.
 
(e) The assumptions constituting the basis on which the Borrowers prepared each
Construction Budget, Construction Schedule, Operating Budget and the Financial
Model that is in effect on each date this representation is made or deemed
repeated and the numbers set forth therein were developed and consistently
utilized in good faith and are reasonable and represent the Borrowers' best
judgment as of the date prepared as to the matters contained therein, based on
all information known to the Borrowers.
 
(f) On and after the Closing Date, the Borrowers reasonably believe that the
Conversion Date will occur on or before the Conversion Date Certain and that the
cost to complete the Project will not exceed the funds available to the
Borrowers (including funds available under this Agreement, the Required Equity
Contributions and any Subordinated Debt Agreements).
 
(g) On and after the Closing Date, the Borrowers reasonably believe that the
development, engineering, construction, testing, start-up, use, ownership,
operation and maintenance of the Project are economically feasible and
technically feasible.
 
Section 5.22 Indebtedness.  The Obligations are, after giving effect to the
Financing Documents and the transactions contemplated thereby, the only
outstanding Indebtedness of the Borrowers other than Permitted
Indebtedness.  The Obligations rank at least pari passu with all other
Indebtedness of any Borrower.
 
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Section 5.23 Separateness.  (a)  Each Borrower maintains separate bank accounts
and separate books of account from each other Borrower and from the Pledgor
(other than the Project Accounts maintained in accordance with this
Agreement).  The separate liabilities of each Borrower are readily
distinguishable from the liabilities of each Affiliate of the Borrowers,
including the Pledgor (except to the extent otherwise contemplated by the
Transaction Documents).
 
(b) Each Borrower conducts its business solely in its own name in a manner not
misleading to other Persons as to its identity.
 
(c) Each Borrower is in compliance with the provisions set forth on
Schedule 5.23.
 
Section 5.24 Required LLC Provisions.  Each Borrower LLC Agreement includes each
of the following terms (collectively, the "Required LLC Provisions"):
 
(a) in the case of Pacific Holding, requires that it have, at all times, one
Independent Member or Independent Manager;
 
(b) in the case of Pacific Holding, requires a one hundred percent
(100%) affirmative vote or written consent of one hundred percent (100%) of all
members or managers, as the case may be, including the Independent Member or the
Independent Manager, as applicable, in connection with any of the following
matters:  in order to authorize (i) the filing of any insolvency or
reorganization case or proceeding, instituting proceedings to have Pacific
Holding adjudicated bankrupt or insolvent, instituting proceedings under any
applicable insolvency Law, seeking any relief under any Law relating to relief
from debts or the protection of debtors, consenting to the filing or institution
of bankruptcy or insolvency proceedings against Pacific Holding, filing a
petition seeking or consenting to reorganization, liquidation or relief with
respect to Pacific Holding under any applicable federal or state law relating to
bankruptcy, reorganization or insolvency, seeking or consenting to the
appointment of a receiver, liquidator, assignee, trustee, sequestrator,
custodian, or any similar official for Pacific Holding or a substantial part of
its property, making any assignment for the benefit of creditors, admitting in
writing Pacific Holding's inability to pay its debts as they become due, or
taking action in furtherance of any of the foregoing, or (ii) merging,
consolidating or combining Pacific Holding or any subsidiary of Pacific Holding
with any other entity, dissolving or winding-up Pacific Holding, selling,
transferring or otherwise disposing of all or substantially all of Pacific
Holding's assets or approving any plan or agreement to engage in any of the
foregoing actions;
 
(c) includes a statement that the only Indebtedness such Borrower is allowed to
incur is Permitted Indebtedness;
 
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(d) includes a statement that all interests in such Borrower shall be securities
governed by Article 8 of the Uniform Commercial Code and shall be evidenced by
certificates.  The certificated interests shall be in registered form within the
meaning of Article 8 of the Uniform Commercial Code; and
 
(e) includes each of the provisions set forth in Schedule 5.23.
 
Section 5.25 Subsidiaries.  Madera, Boardman, Stockton, Brawley and Burley have
no Subsidiaries.  Pacific Holding has no Subsidiaries other than Madera,
Boardman, Stockton, Brawley and Burley (or the owner of any Substitute
Facility).
 
Section 5.26 Foreign Assets Control Regulations, Etc.  (a)  The use of the
proceeds of the Loan by the Borrowers will not violate the Trading with the
Enemy Act, as amended, or any of the foreign assets control regulations of the
United States Treasury Department (31 C.F.R., Subtitle B, Chapter V, as amended)
or any enabling legislation or executive order relating thereto.
 
(b) None of the Borrowers:
 
(i) 
is or will become a Person or entity described by section 1 of Executive Order
13224 of September 24, 2001 Blocking Property and Prohibiting Transactions With
Persons Who Commit, Threaten to Commit, or Support Terrorism (12 C.F.R. 595),
and none of the Borrowers engages in dealings or transactions with any such
Persons or entities; or

 
(ii) 
is in violation of the Patriot Act.

 
Section 5.27 Employment Matters.  None of the Borrowers has or has had any
employee or former employees.
 
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Section 5.28 Solvency.  Each of the Borrowers is and, upon the incurrence of any
Obligations by the Borrowers and after giving effect to the transactions
contemplated hereby, will be, Solvent.
 
Section 5.29 Legal Name and Place of Business.  (a) The exact legal name and
jurisdiction of formation of each Borrower is as set forth below, and none of
the Borrowers has had any other legal names in the previous five (5) years
except as set forth on Schedule 5.29:
 
(i) 
Pacific Holding:  Pacific Ethanol Holding Co. LLC, a limited liability company
organized and existing under the laws of the State of Delaware;

 
(ii) 
Madera:  Pacific Ethanol Madera LLC, a limited liability company organized and
existing under the laws of the State of Delaware;

 
(iii) 
Boardman:  Pacific Ethanol Columbia, LLC, a limited liability company organized
and existing under the laws of the State of Delaware;

 
(iv) 
Stockton:  Pacific Ethanol Stockton, LLC, a limited liability company organized
and existing under the laws of the State of Delaware;

 
(v) 
Brawley:  Pacific Ethanol Imperial, LLC, a limited liability company organized
and existing under the laws of the State of Delaware; and

 
(vi) 
Burley:  Pacific Ethanol Magic Valley, LLC, a limited liability company
organized and existing under the laws of the State of Delaware.

 
(b) The sole place of business and chief executive office of each Borrower is as
set forth on Schedule 5.29.
 
The information set forth in Sections 5.29(a) and (b) and on Schedule 5.29 may
be changed from time to time by the Borrowers upon thirty (30) days' prior
written notice to the Administrative Agent and the Collateral Agent, subject in
each case to the Borrowers' obligations hereunder to provide the Collateral
Agent with a perfected first-priority Lien on the Collateral (subject to
Permitted Liens).
 
Section 5.30 No Brokers.  None of the Borrowers has any obligation to pay any
finder's, advisory, brokers or investment banking fee, except for the fees
payable pursuant to Section 3.13 (Fees) and those identified on Schedule 5.30.
 
Section 5.31 Insurance.  All insurance required to be obtained and maintained
pursuant to the Transaction Documents by Pacific Holding and each other Borrower
with respect to whose Plant a Funding has been made or is being requested is in
full force and effect as of each date this representation is made or deemed
repeated and complies with the insurance requirements set forth on
Schedule 7.01(h).  All premiums then due and payable on all such insurance have
been paid.  To the knowledge of each Borrower, all insurance required to be
obtained and maintained by any Major Project Party with respect to any Plant
with respect to which a Funding has been made or is being requested to protect,
directly or indirectly, against loss or liability to any Borrower, any Plant or
any Senior Secured Party (including in connection with construction obligations
of such Major Project Party), as of the date this representation is made or
deemed repeated, pursuant to any Project Document relating to any such Plant has
been obtained, is in full force and effect and complies with the insurance
requirements set forth on Schedule 7.01(h) (where applicable) and is otherwise
in all material respects in accordance with such Project Document.
 
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Section 5.32 Accounts.  On and after the Closing Date (with respect to Pacific
Holding) or the initial Funding Date for its Plant (with respect to each other
Borrower), no Borrower has, nor is the beneficiary of, any bank account other
than the Project Accounts and any Local Account with respect to which a Blocked
Account Agreement has been duly executed and delivered.
 
ARTICLE VI
 
CONDITIONS PRECEDENT
 
Section 6.01 Conditions to Closing.  In addition to the conditions set forth in
Section 6.08 (Conditions to All Fundings), the occurrence of the Closing Date is
subject to the satisfaction of each of the following conditions precedent.
 
(a) Delivery of Financing Documents.  The Administrative Agent shall have
received each of the following fully executed documents, each of which shall be
originals, portable document format ("pdf") or facsimiles (followed promptly by
originals), duly executed and delivered by each party thereto and each (other
than items (xiii) and (xiv)) in form and substance reasonably satisfactory to
each Lender:
 
(i) 
this Agreement;

 
(ii) 
the original Construction Notes, duly executed and delivered by an Authorized
Officer of each Borrower in favor of each requesting Construction/Term Lender;

 
(iii) 
the original Working Capital Notes, duly executed and delivered by an Authorized
Officer of each Borrower in favor of each requesting Working Capital Lender;

 
(iv) 
the Sponsor Support Agreement;

 
(v) 
the Pacific Holding Security Agreement;

 
(vi) 
the Madera Security Agreement;

 
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(vii) 
the Boardman Security Agreement;

 
(viii) 
the Pacific Holding Pledge Agreement;

 
(ix) 
the Madera Pledge Agreement;

 
(x) 
the Boardman Pledge Agreement;

 
(xi) 
the Madera Deed of Trust;

 
(xii) 
the Boardman Deed of Trust;

 
(xiii) 
the Fee Letters; and

 
(xiv) 
the Interest Rate Protection Agreement(s) in respect of the In-Progress Plant 1
Construction Loans and the In-Progress Plant 2 Construction Loans.

 
(b) Delivery of Project Documents.  The Administrative Agent shall have received
true, correct and complete copies of (i) each Project Document in effect as of
the Closing Date, each of which shall be in form and substance reasonably
satisfactory to the Administrative Agent and the Independent Engineer and
(ii) each Subordinated Debt Agreement, if any, in effect as of the Closing Date
which, in the case of each of Sections 6.01(b)(i) and (ii), has been duly
authorized, executed and delivered by the parties thereto and is in full force
and effect, and (iii) a copy of each other agreement identified on
Schedule 5.11-A reasonably requested by the Administrative Agent.
 
(c) Officer's Certificates.  The Administrative Agent shall have received the
following certificates, dated as of the Closing Date, upon which the
Administrative Agent and each Lender may conclusively rely:
 
(i) 
a duly executed certificate of an Authorized Officer of the Borrowers' Agent
certifying that (A) all conditions set forth in this Section 6.01 have been
satisfied on and as of the Closing Date and (B) all representations and
warranties made by any Borrower, the Pledgor or Pacific Ethanol in this
Agreement and each other Financing Document to which any Borrower, the Pledgor
or Pacific Ethanol is a party are true and correct in all material respects on
and as of the Closing Date; and

 
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(ii) 
a duly executed certificate of an Authorized Officer of the Borrowers' Agent
certifying that (A) the copies of each document delivered pursuant to
Section 6.01(b) are true, correct and complete copies of such documents,
(B) such documents are in full force and effect and no term or condition of any
such Project Document has been amended from the form thereof delivered to the
Administrative Agent, (C) each of the conditions precedent set forth in each
Project Document delivered pursuant to Section 6.01(b)(i) and (ii) (other than
Project Documents relating to any of the Greenfield Facilities) that are
required to be satisfied on or before the Closing Date have been satisfied or
waived by the parties thereto and (D) no material breach, material default or
material violation by any Borrower, or to the knowledge of each Borrower, any
Project Party under any such Project Document (other than Project Documents
relating to any of the Greenfield Facilities) has occurred and is continuing.

 
(d) Resolutions, Incumbency, LLC Agreements.  The Administrative Agent shall
have received from each of the Borrowers, the Pledgor and Pacific Ethanol a
certificate of an Authorized Officer dated as of the Closing Date, upon which
the Administrative Agent and each Lender may conclusively rely, as to:
 
(i) 
reasonably satisfactory resolutions of its members, managers or directors, as
the case may be, then in full force and effect authorizing the execution,
delivery and performance of each Transaction Document to which it is party and
the consummation of the transactions contemplated therein (including, in the
case of each Borrower, the appointment of the Borrowers' Agent);

 
(ii) 
the incumbency and signatures of those of its officers and representatives duly
authorized to execute and otherwise act with respect to each Financing Document
to which it is party; and

 
(iii) 
such Person's Organic Documents which, in the case of each Borrower, shall be in
form and substance reasonably satisfactory to the Administrative Agent and shall
include the Required LLC Provisions, and in every case certifying that (A) such
documents are in full force and effect and no term or condition thereof has been
amended from the form thereof delivered to the Administrative Agent and (B) no
material breach, material default or material violation thereunder has occurred
and is continuing.

 
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(e) Authority to Conduct Business.  The Administrative Agent shall have received
satisfactory evidence, including certificates of good standing from the
Secretaries of State of each relevant jurisdiction, dated no more than eight
(8) days (or such other time period reasonably acceptable to the Administrative
Agent) prior to the Closing Date, that:
 
(i) 
each Borrower is duly authorized as a limited liability company to carry on its
business, and is duly formed, validly existing and in good standing in each
jurisdiction (including, in the case of Madera, Stockton and Brawley, the State
of California, in the case of Boardman, the State of Oregon, and in the case of
Burley, the State of Idaho) in which it is required to be so authorized; and

 
(ii) 
each of the Pledgor and Pacific Ethanol is duly authorized as a corporation to
carry on its business, and is duly organized, validly existing and in good
standing in each jurisdiction in which it is required to be so authorized.

 
(f) Opinions of Counsel.  The Administrative Agent shall have received the
following legal opinions, addressed to the Senior Secured Parties, and each in
form and substance reasonably satisfactory to the Administrative Agent:
 
(i) 
the opinion of Latham & Watkins LLP, New York and California counsel to the Loan
Parties (and covering customary matters under Delaware law); and

 
(ii) 
the opinion of Tonkon Torp LLP, Oregon counsel to the Loan Parties.

 
(g) Lien Search; Perfection of Security.  The Collateral Agent shall have been
granted a first priority perfected security interest in all Collateral relating
to Pacific Holding, Madera, Boardman, the Madera Plant and the Boardman Plant,
and the Administrative Agent shall have received satisfactory copies or
evidence, as the case may be, of the following actions in connection with the
perfection of the Security:
 
(i) 
completed requests for information or lien search reports, dated no more than
eight (8) days (or such other time period reasonably acceptable to the
Administrative Agent) before the Closing Date, listing all effective UCC
financing statements, fixture filings or other filings evidencing a security
interest filed in Delaware, California, Oregon, Idaho, and any other
jurisdictions reasonably requested by the Administrative Agent that name any
Borrower or the Pledgor as a debtor, together with copies of each such UCC
financing statement, fixture filing or other filings, which shall show no Liens
other than Permitted Liens and the Liens identified in Schedule 6.01(g)(i),
which (in the case of Liens identified on Schedule 6.01(g)(i)) will be released
and terminated on or before the initial Funding Date;

 
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(ii) 
UCC financing statements and other filings and recordations (other than fixture
filings or recordation of any Mortgage), in proper form for filing in all
jurisdictions that the Administrative Agent may deem necessary or desirable in
order to perfect and protect the first priority Liens and security interests
created under the Security Documents covering the Collateral with respect to
each of Madera, Boardman, Pacific Holding, the Madera Plant and the Boardman
Plant, as described therein and each such UCC financing statement and other
filing or recordation shall be duly filed on the Closing Date;

 
(iii) 
the original certificates representing all Equity Interests in each of Madera,
Boardman and Pacific Holding shall have been delivered to the Collateral Agent,
in each case together with a duly executed transfer power in the form attached
to the Pledge Agreement relating to such Equity Interests; and

 
(iv) 
with respect to each of Madera, Boardman, Pacific Holding, the Madera Plant and
the Boardman Plant, evidence of the making (which may be on the Closing Date) of
all other actions, recordings and filings of or with respect to the Security
Documents delivered pursuant to Section 6.01(a) (Conditions to Closing -
Delivery of Financing Documents) that the Administrative Agent may deem
necessary or desirable in order to perfect and protect the first-priority Liens
created thereunder.

 
(h) Financial Statements.  The Administrative Agent shall have received accurate
and complete copies of the audited annual financial statements of Pacific
Ethanol for the most recent Fiscal Year then available and the unaudited
quarterly financial statements of Pacific Ethanol for September 30, 2006.  Such
financial statements shall be on a consolidated basis.
 
(i) Third Party Approvals.  The Administrative Agent shall have received
reasonably satisfactory documentation of any approval by any Person required in
connection with any transaction contemplated by this Agreement or any other
Financing Document that the Administrative Agent has reasonably requested in
connection herewith.
 
(j) Establishment of Project Accounts.  Each of the Project Accounts shall have
been established to the reasonable satisfaction of the Administrative Agent.
 
(k) Insurance.  The Administrative Agent shall have received:
 
(i) 
reasonably satisfactory evidence that the insurance requirements set forth on
Schedule 7.01(h) with respect to the Borrowers and the Plants have been
satisfied, including binders or certificates evidencing the commitment of
insurers to provide each insurance policy required by Schedule 7.01(h), evidence
of the payment of all premiums then due and owing in respect of such insurance
policies and a certificate of the Insurance Consultant and the Borrowers'
insurance broker (or insurance carrier) certifying that all such insurance
policies are in full force and effect; and

 
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(ii) 
a report of the Insurance Consultant in form and substance reasonably
satisfactory to the Administrative Agent discussing, among other matters that
the Administrative Agent may require, the adequacy of the insurance coverage for
the Project, together with a duly executed certificate of the Insurance
Consultant in the form of Exhibit 6.01(k), appropriately completed to the
satisfaction of the Administrative Agent;

 
provided, that with respect to Sections 6.01(k)(i) and (ii) if, on the Closing
Date, the insurance coverage for any of the Plants does not satisfy the
requirements set forth on Schedule 7.01(h), any such deficiencies shall be
satisfactorily resolved, as certified by the Insurance Consultant, as a
condition precedent to the first Funding for such Plant.
 
(l) Independent Engineer's Report.  The Administrative Agent shall have received
the report of the Independent Engineer, dated December 5, 2006.
 
(m) Environmental Site Assessments.  The Administrative Agent shall have
received an Environmental Site Assessment Report with respect to each Site,
accompanied by a corresponding reliance letter (to the extent such report does
not permit reliance thereon by the Lenders), each in form and substance
reasonably satisfactory to the Administrative Agent.
 
(n) Ethanol Market Report.  The Administrative Agent shall have received the
report of the Ethanol Market Consultant, dated December 1, 2006.
 
(o) Agricultural Market Report.  The Administrative Agent shall have received
the report of the Agricultural Market Consultant, dated December 1, 2006.
 
(p) Appraisal.  The Administrative Agent shall have received an appraisal with
respect to each of the Madera Plant and the Boardman Plant, each in form and
substance reasonably satisfactory to the Administrative Agent.
 
(q) Budgets and Schedules.
 
(i) 
The Administrative Agent shall have received the Construction Budget for each
Plant (other than the Madera Plant), accompanied by a certificate of an
Authorized Officer of the Borrowers' Agent, dated as of the Closing Date,
certifying as to the reasonableness of the underlying assumptions and the
conclusions on which each such Construction Budget is based, each in form and
substance reasonably satisfactory to the Administrative Agent; provided, that
any Construction Budget consistent with the Financial Model shall be deemed to
be satisfactory.

 
 
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(ii) 
The Administrative Agent shall have received a Drawdown Schedule for each Plant
(other than the Madera Plant), each in form and substance reasonably
satisfactory to the Administrative Agent; provided, that any Drawdown Schedule
consistent with the Financial Model shall be deemed to be satisfactory.

 
(iii) 
The Administrative Agent shall have a received an Operating Budget for the
remaining months of the 2007 calendar year for the Madera Plant, accompanied by
a certificate of an Authorized Officer of the Borrowers' Agent, dated as of the
Closing Date, certifying as to the reasonableness of the underlying assumptions
and the conclusions on which such Operating Budget is based, each in form and
substance reasonably satisfactory to the Administrative Agent.

 
(r) Title Insurance.
 
(i) 
The Administrative Agent shall have received a paid policy or policies of
mortgage title insurance (the "Title Insurance Policy") with respect to the
Madera Site and the Boardman Site, in an aggregate amount equal to ninety-two
million Dollars ($92,000,000) on a Form 1992 extended coverage lender's policy,
containing such endorsements (including an endorsement deleting the creditor's
rights exception) as the Administrative Agent may request and otherwise in form
and substance reasonably satisfactory to the Administrative Agent, from the
Title Insurance Company, containing no exception for mechanics' or materialmen's
Liens and no other exceptions (printed or otherwise) other than those approved
by the Administrative Agent (such approval not to be unreasonably withheld), and
insuring that the Collateral Agent has a good, valid and enforceable first Lien
of record on the corresponding Mortgaged Property free and clear of all defects
and encumbrances (other than Permitted Liens); provided, that if the
Title Insurance Policy with respect to either such Plant contains any survey
exceptions, such exceptions shall be satisfactorily discharged as a condition to
the first Funding for such Plant.

 
(ii) 
The Title Insurance Policy shall confirm that (A) Madera has good, marketable
title to the Madera Site subject to no Liens (other than Liens in favor of the
Collateral Agent or other Permitted Liens) and (B) Boardman has a valid and
subsisting leasehold estate in and to the Boardman Leased Premises subject to no
Liens (other than Liens in favor of the Collateral Agent or other Permitted
Liens).

 
(s) Bank Regulatory Requirements.  The Administrative Agent shall have received
at least five (5) Business Days prior to the Closing Date all documentation and
other information required by bank regulatory authorities under applicable "know
your customer" and anti-money-laundering rules and regulations, including the
Patriot Act.
 
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(t) Closing Fees; Expenses.  The Administrative Agent shall have received for
its own account, or for the account of each Lender, Lead Arranger and Agent
entitled thereto, all fees due and payable pursuant to Section 3.13 (Fees) and
all reasonable costs and expenses (including reasonable and documented legal
fees and expenses) for which invoices have been presented, in each case,
required to be paid on or before the Closing Date.
 
(u) Process Agent.  The Administrative Agent shall have received, in form and
substance reasonably satisfactory to the Administrative Agent, acceptances from
the Process Agent for the Borrowers, the Pledgor and Pacific Ethanol appointed
under Section 11.02(d) (Applicable Law; Jurisdiction; Etc. – Appointment of
Process Agent and Service of Process) and as required under each other Financing
Document in effect on the Closing Date.
 
(v) Financial Model.  The Administrative Agent shall have received a certificate
of a Financial Officer of the Borrowers' Agent, dated as of the Closing Date,
certifying that the Financial Model attached to Exhibit 6.01(v) has not been
amended or modified (or, in the event of any amendment or modification thereto,
such amendments or modification shall not, in the reasonable opinion of the
Administrative Agent, reflect any adverse changes) and certifying as to the
reasonableness of the underlying assumptions and the conclusions on which the
Financial Model is based.
 
(w) Loan Pay-Off.  The Administrative Agent shall have received satisfactory
evidence of the termination of the United Capital Loan Facility and the release
of the Liens granted in connection therewith.
 
(x) Equator Principles.  The Administrative Agent shall have received all
documentation requested by the Administrative Agent that is necessary to
evidence compliance, and otherwise required in connection, with the Equator
Principles.
 
Section 6.02 Conditions to Madera Funding.  In addition to the conditions set
forth in Section 6.08 (Conditions to All Fundings), the release of any
Construction Loan funds deposited in or standing to the credit of the Escrow
Account for the Madera Plant for transfer to the Construction Holding Account
(which, in the event that the Madera Plant is In-Progress Plant 1, shall be the
In-Progress Plant 1 Construction Loans or, in the event that the Madera Plant is
In-Progress Plant 2, shall be the In-Progress Plant 2 Tranche B Construction
Loans), and, in the event that the Madera Plant is In-Progress Plant 2, the
obligation of the Tranche A Lenders to make available the Funding of the
In-Progress Plant 2 Tranche A Construction Loans, is subject to the satisfaction
of each of the following conditions precedent.
 
(a) Madera Plant Completion.  The Commercial Operation Date for the Madera Plant
shall have occurred on or before December 31, 2007.
 
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(b) Lien Searches.  The Administrative Agent shall have received completed
requests for information or lien search reports, dated no more than eight
(8) days (or such other time period reasonably acceptable to the Administrative
Agent) before the date of such Funding, listing all effective UCC financing
statements, fixture filings or other filings evidencing a security interest
filed in Delaware or California, and any other jurisdictions reasonably
requested by the Administrative Agent, that name Madera or the Pledgor as a
debtor, together with copies of each such UCC financing statement, fixture
filing or other filings, which shall show no Liens (other than Permitted Liens
(or Liens that were Permitted Liens on or before the date of the applicable
Funding Notice, in which case the Administrative Agent shall have received
satisfactory evidence of the release and termination of all such Liens prior to
the applicable Funding Date) and, in the event that the Madera Funding is the
first Construction Loan Funding, Liens identified in Schedule 6.01(g)(i) and in
such case the Administrative Agent shall have received satisfactory evidence of
the release and termination of all such Liens identified on Schedule
6.01(g)(i)).
 
(c) Good Standing.  The Administrative Agent shall have received satisfactory
certificates of good standing from the Secretaries of State of each of Delaware
and California, dated no more than eight (8) days (or such other time period
reasonably acceptable to the Administrative Agent) prior to the requested
Funding Date, with respect to Madera.
 
(d) Madera Survey.  The Administrative Agent shall have received a current
Survey of the Madera Site showing all real property rights for the Madera Plant
required hereunder, which shall be satisfactory to the Title Insurance Company
insuring the Collateral Agent's interest in the Madera Mortgaged Property (and
shall be sufficient to enable the Title Insurance Company to either (i) remove
any survey exceptions from the Madera Title Insurance Policy or (ii) replace
such survey exceptions with survey exceptions that do not identify any matters
other than Permitted Liens), shall not show any encumbrances other than
Permitted Liens, and shall be certified to the Collateral Agent, the
Administrative Agent, the Lenders and such Title Insurance Company.
 
(e) Madera Project Documents; Contracts; Consents.
 
(i) 
The Administrative Agent shall have received a copy of each Project Document, or
amendment thereto, for the Madera Facility that has been entered into after the
Closing Date (which shall include the Pacific Ethanol Guarantees for the
applicable Madera Project Documents), each of which shall be in full force and
effect and shall have been approved by the required Project Document Approval
Level.

 
(ii) 
The Administrative Agent shall have received a true, correct and complete copy
(certified as such by Madera) of each agreement evidencing Contractual
Obligations of Madera or otherwise relating to the Madera Plant reasonably
requested by, and not previously delivered to, the Administrative Agent.

 
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(iii) 
The Administrative Agent shall have received a duly executed certificate of an
Authorized Officer of Madera certifying that (A) the copies of each document
delivered pursuant to Section 6.02(e)(i) and (ii) are true, correct and complete
copies of such documents, (B) such documents are in full force and effect and no
term or condition of any such Project Document has been amended from the form
thereof delivered to the Administrative Agent, (C) each of the conditions
precedent set forth in each Project Document delivered pursuant to Section
6.02(e)(i) that are required to be satisfied on or before the date of such
requested Funding, if any, have been satisfied, or waived by the parties
thereto, and (D) no material breach, material default or material violation by
any Borrower, or to the knowledge of each Borrower, any Major Project Party
under any such Project Document has occurred and is continuing.

 
(iv) 
The Administrative Agent shall have received a Consent, in form and substance
reasonably satisfactory to the Administrative Agent, with respect to each Madera
Project Document identified on Schedule 6.02(e)(iv) (which, in the case of
Consents from non-Affiliate Project Parties, may be delivered on or before the
Funding Date).

 
(f) Opinions of Counsel.  The Administrative Agent shall have received (on or
before the Madera Funding Date) the following legal opinions, addressed to the
Senior Secured Parties, and each in form and substance reasonably satisfactory
to the Administrative Agent:
 
(i) 
the opinion of Latham & Watkins LLP, New York and California counsel to the Loan
Parties (and covering customary matters under Delaware law and permitting
matters relating to the Madera Plant) covering customary matters and matters
reasonably requested by the Administrative Agent that in each such case were not
addressed in the opinions delivered on the Closing Date; and

 
(ii) 
if reasonably requested by the Administrative Agent, opinions of reasonably
acceptable counsel to the Major Project Parties that are parties to the Madera
Project Documents identified on Schedule 6.02(e)(iv) with respect to which a
Consent has been delivered.

 
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(g) Title Insurance.  The Administrative Agent shall have received (on or before
the Madera Funding Date) an ALTA 122 Endorsement to the Title Insurance Policy
with respect to the Madera Site.
 
(h) Independent Engineer's Report.  The Administrative Agent shall have received
a supplemental report of the Independent Engineer, updating those matters
relating to the Madera Plant addressed in the report of the Independent Engineer
dated December 5, 2006 as the Administrative Agent may reasonably request, which
report shall be in form and substance reasonably satisfactory to the
Administrative Agent and the Required Lenders (provided that any Lender who does
not object to a request for approval of such report within fifteen (15) days
following receipt by such Lender of such written request and a copy of such
report shall be deemed to have approved such report).
 
(i) Insurance.  Any deficiencies with respect to the insurance for the Madera
Plant identified in the report delivered pursuant to Section 6.01(k) (Conditions
to Closing - Insurance) shall have been addressed in a manner reasonably
satisfactory to the Administrative Agent and the Insurance Consultant and the
Administrative Agent shall have received a reasonably satisfactorily completed
certificate of the Insurance Consultant in substantially the form of
Exhibit 6.01(k) confirming such matters.
 
(j) Governmental Approvals.  Madera shall have all Necessary Project Approvals
required as of the date of such requested Funding to operate the Madera Plant,
and the Administrative Agent shall have received a duly executed certificate of
an Authorized Officer of Madera certifying that (i) attached to such certificate
are true, correct and complete copies of each such Necessary Project Approval,
(ii) each such Necessary Project Approval is in full force and effect and is
final and Non-Appealable, (iii) all Necessary Project Approvals required for the
Madera Plant at a later date will be obtained in due course prior to the time
when needed, and (iv) each applicable Governmental Approvals Update Schedule
accurately identifies all Necessary Project Approvals necessary for the Madera
Plant.
 
Section 6.03 Conditions to Boardman Funding.  In addition to the conditions set
forth in Section 6.08 (Conditions to All Fundings), the release of any
Construction Loan funds deposited in or standing to the credit of the Escrow
Account for the Boardman Plant for transfer to the Construction Holding Account
(which, in the event that the Boardman Plant is In-Progress Plant 1, shall be
the In-Progress Plant 1 Construction Loans or, in the event that the Boardman
Plant is In-Progress Plant 2, shall be the In-Progress Plant 2 Tranche B
Construction Loans), and, in the event that the Boardman Plant is In-Progress
Plant 2, the obligation of the Tranche A Lenders to make available the Funding
of the In-Progress Plant 2 Tranche A Construction Loans, is subject to the
satisfaction of each of the following conditions precedent.
 
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(a) Boardman Completion.
 
(i) 
On or before December 31, 2007, the Commercial Operation Date for the Boardman
Plant shall have occurred.

 
(ii) 
The Administrative Agent shall have received an Operating Budget for the
Boardman Plant for the remaining months of the 2007 calendar year, which budget
shall be reasonably satisfactory to the Administrative Agent and the Independent
Engineer.

 
(b) Lien Searches.  The Administrative Agent shall have received completed
requests for information or lien search reports, dated no more than eight
(8) days (or such other time period reasonably acceptable to the Administrative
Agent) before the date of such Funding, listing all effective UCC financing
statements, fixture filings or other filings evidencing a security interest
filed in Delaware or Oregon, and any other jurisdictions reasonably requested by
the Administrative Agent that name Boardman or the Pledgor as a debtor, together
with copies of each such UCC financing statement, fixture filing or other
filings, which shall show no Liens (other than Permitted Liens (or Liens that
were Permitted Liens prior to the date of the applicable Funding Notice, in
which case the Administrative Agent shall have received satisfactory evidence of
the release and termination of all such Liens on or before the applicable
Funding Date) and, in the event that the Boardman Funding is the first
Construction Loan Funding, other Liens identified in Schedule 6.01(g)(i) and in
such case the Administrative Agent shall have received satisfactory evidence of
the release and termination of all such Liens identified as Schedule
6.01(g)(i)).
 
(c) Good Standing.  The Administrative Agent shall have received satisfactory
certificates of good standing from the Secretaries of State of each of Delaware
and Oregon, dated no more than eight (8) days (or such other time period
reasonably acceptable to the Administrative Agent) prior to the requested
Funding Date, with respect to Boardman.
 
(d) Boardman Survey.  The Administrative Agent shall have received a current
Survey of the Boardman Site, which shall be satisfactory to the Title Insurance
Company insuring the Collateral Agent's interest in the Boardman Mortgaged
Property and shall not show any encumbrances other than Permitted Liens (and
shall be sufficient to enable the Title Insurance Company to either (i) remove
any survey exceptions from the Boardman Title Insurance Policy or (ii) replace
such survey exceptions with survey exceptions that do not identify any matters
other than Permitted Liens), and certified to the Collateral Agent, the
Administrative Agent, the Lenders and such Title Insurance Company.
 
(e) Boardman Project Documents; Contracts; Consents.
 
(i) 
The Administrative Agent shall have received a copy of each Project Document, or
amendment thereto, for the Boardman Facility that has been entered into after
the Closing Date (which shall include the Pacific Ethanol Guarantees for the
applicable Boardman Project Documents), each of which shall be in full force and
effect and shall have been approved by the required Project Document Approval
Level.

 
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(ii) 
The Administrative Agent shall have received a true, correct and complete copy
(certified as such by Boardman) of each agreement evidencing Contractual
Obligations of Boardman or otherwise relating to the Boardman Plant reasonably
requested by, and not previously delivered to, the Administrative Agent.

 
(iii) 
The Administrative Agent shall have received a duly executed certificate of an
Authorized Officer of Boardman certifying that (A) the copies of each document
delivered pursuant to Section 6.03(e)(i) and (ii) are true, correct and complete
copies of such documents, (B) such documents are in full force and effect and no
term or condition thereof has been amended from the form thereof delivered to
the Administrative Agent, (C) each of the conditions precedent set forth in each
Project Document delivered pursuant to Section 6.03(e)(i) that are required to
be satisfied on or before the date of such requested Funding, if any, have been
satisfied, or waived by the parties thereto, and (D) no material breach,
material default or material violation by any Borrower, or to the knowledge of
each Borrower, any Major Project Party under any such Project Document has
occurred and is continuing.

 
(iv) 
The Administrative Agent shall have received a Consent, in form and substance
reasonably satisfactory to the Administrative Agent, with respect to each
Boardman Project Document identified on Schedule 6.02(e)(iv) (which, in the case
of Consents from non-Affiliate Project Parties, may be delivered on or before
the Funding Date).

 
(f) Opinions of Counsel.  The Administrative Agent shall have received (on or
before the Boardman Funding Date) the following legal opinions, addressed to the
Senior Secured Parties, and each in form and substance reasonably satisfactory
to the Administrative Agent:
 
(i) 
the opinion of Latham & Watkins LLP (or such other legal counsel reasonably
acceptable to the Administrative Agent), as New York and California counsel to
the Loan Parties (and covering customary matters under Delaware law) covering
customary matters and matters reasonably requested by the Administrative Agent
that in each such case were not addressed in the opinions delivered on the
Closing Date;

 
(ii) 
the opinion of Tonkon Torp LLP (or such other legal counsel reasonably
acceptable to the Administrative Agent), as Oregon counsel to the Loan Parties,
covering customary matters and matters reasonably requested by the
Administrative Agent (including permitting matters relating to the Boardman
Plant), that in each such case were not addressed in the opinions delivered on
the Closing Date; and

 
(iii) 
if reasonably requested by the Administrative Agent, opinions of reasonably
acceptable counsel to the Major Project Parties that are parties to the Boardman
Project Documents identified on Schedule 6.02(e)(iv) with respect to which a
Consent has been delivered.

 
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(g) Title Insurance.  The Administrative Agent shall have received an ALTA 122
Endorsement to the Title Insurance Policy with respect to the Boardman Site.
 
(h) Independent Engineer's Report.  The Administrative Agent shall have received
a supplemental report of the Independent Engineer, updating those matters
relating to the Boardman Plant addressed in the report of the Independent
Engineer dated December 5, 2006 as the Administrative Agent may reasonably
request, which report shall be in form and substance reasonably satisfactory to
the Administrative Agent and the Required Lenders (provided that any Lender who
does not object to a request for approval of such report within fifteen (15)
days following receipt by such Lender of such written request and a copy of such
report shall be deemed to have approved such report).
 
(i) Insurance.  Any deficiencies with respect to the insurance for the Boardman
Plant identified in the report delivered pursuant to Section 6.01(k) (Conditions
to Closing - Insurance) shall have been addressed in a manner reasonably
satisfactory to the Administrative Agent and the Insurance Consultant and the
Administrative Agent shall have received a reasonably satisfactorily completed
certificate of the Insurance Consultant in substantially the form of
Exhibit 6.01(k) confirming such matters.
 
(j) Governmental Approvals.  Boardman shall have all Necessary Project Approvals
required as of the date of such requested Funding to operate the Boardman Plant,
and the Administrative Agent shall have received a duly executed certificate of
an Authorized Officer of Boardman certifying that (i) attached to such
certificate are true, correct and complete copies of each such Necessary
Governmental Project Approval, (ii) each such Necessary Project Approval is in
full force and effect and is final and Non-Appealable, (iii) all Necessary
Project Approvals required for the Boardman Plant at a later date will be
obtained in due course prior to the time when needed, and (iv) each applicable
Governmental Approvals Update Schedule accurately identifies all Necessary
Project Approvals necessary for the Boardman Plant.
 
Section 6.04 Conditions to First Funding for Each Greenfield Plant.  In addition
to the conditions set forth in Section 6.05 (Conditions to All Greenfield Plant
Construction Loan Fundings) and Section 6.08 (Conditions to All Fundings), the
obligation of each Tranche A Lender to make available the first Funding of each
of the Greenfield Plant 1 Construction Loans, the Greenfield Plant 2
Construction Loans and the Greenfield Plant 3 Construction Loans, and the
initial release of any funds deposited in or standing to the credit of the
Escrow Account for transfer to the applicable Greenfield Plant Construction
Account, is subject to the satisfaction of each of the following conditions
precedent.
 
(a) Equity.  The Administrative Agent shall have received reasonably
satisfactory evidence that the relevant Required Equity Contributions have been
made to Pacific Holding, contributed to the Borrower with respect to whose Plant
such Funding is requested, and fully applied to pay Project Costs for such Plant
(as verified by the Independent Engineer).
 
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(b) Lien Searches.  The Administrative Agent shall have received completed
requests for information or lien search reports, dated no more than eight
(8) days (or such other time period reasonably acceptable to the Administrative
Agent) prior to the requested Funding Date, listing all effective UCC financing
statements, fixture filings or other filings evidencing a security interest
filed in Delaware or the jurisdiction where the Plant for which such Funding is
requested is located, and any other jurisdictions reasonably requested by the
Administrative Agent that name the relevant Borrower or the Pledgor as a debtor,
together with copies of each such UCC financing statement, fixture filing or
other filings, which shall show no Liens other than Permitted Liens (or Liens
that were Permitted Liens prior to the date of the applicable Funding Notice, in
which case the Administrative Agent shall have received satisfactory evidence of
the release and termination of all such Liens prior to the applicable Funding
Date).
 
(c) Good Standing.  The Administrative Agent shall have received satisfactory
certificates of good standing from the Secretaries of State of each of Delaware
and the state where the relevant Plant is located, dated no more than eight
(8) days (or such other time period reasonably acceptable to the Administrative
Agent) prior to the requested Funding Date, with respect to the Borrower whose
Plant is the subject of the requested Funding.
 
(d) Resolutions.  The Administrative Agent shall have received from the Borrower
whose Plant is the subject of such requested Funding (and, if required, from the
Pledgor and Pacific Ethanol) a certificate of an Authorized Officer dated as of
the date of such requested Funding, upon which the Administrative Agent and each
Lender may conclusively rely, as to reasonably satisfactory resolutions of its
members, managers or directors, as the case may be, then in full force and
effect authorizing the execution, delivery and performance of each Transaction
Document to which it is party and the consummation of the transactions
contemplated therein to the extent that resolutions authorizing such Transaction
Document or such transactions were not provided pursuant to Section 6.01(d)
(Conditions to Closing – Resolutions, Incumbency, LLC Agreements).
 
(e) Survey.  The Administrative Agent shall have received a current Survey of
the Site for the Plant with respect to which such Funding is being requested,
which shall be satisfactory to the Title Insurance Company insuring the
Collateral Agent's interest in the Mortgaged Property for such Plant and shall
not show any encumbrances other than Permitted Liens, and shall be certified to
the Collateral Agent, the Administrative Agent, the Lenders and such Title
Insurance Company.
 
(f) Title Insurance.
 
(i) 
The Administrative Agent shall have received (on or before the date of such
requested Funding) a paid Title Insurance Policy with respect to the Site for
the Plant with respect to which such Funding is requested, in an aggregate
amount equal to sixty-nine million Dollars ($69,000,000) on a Form 1992 extended
coverage lender's policy, containing such endorsements (including an endorsement
deleting the creditor's rights exception) as the Administrative Agent may
reasonably request and otherwise in form and substance reasonably satisfactory
to the Administrative Agent from the Title Insurance Company, containing no
exception for mechanics' or materialmen's Liens and no other exceptions (printed
or otherwise) other than those approved by the Administrative Agent (such
approval not to be unreasonably withheld), and insuring that the Collateral
Agent has a good, valid and enforceable first Lien of record on the
corresponding Mortgaged Property free and clear of all defects and encumbrances
(other than Permitted Liens).

 
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(ii) 
In the case of Brawley or Burley, the Title Insurance Policy shall confirm that
Brawley or Burley, as the case may be, has good, marketable title to the Brawley
Site or Burley Site subject to no Liens (other than Permitted Liens).

 
(iii) 
In the case of Stockton, the Title Insurance Policy shall confirm that Stockton
has a valid and subsisting leasehold estate in and to the Stockton Leased
Premises subject to no Liens (other than Permitted Liens).

 
(g) Collateral.
 
(i) 
The Mortgage, Pledge Agreement and Security Agreement for the Plant (and related
Borrower) with respect to which such Funding has been requested shall have been
duly executed and delivered (or will be delivered on the requested Funding Date
prior to or simultaneously with the requested Funding), and the Collateral Agent
shall have been granted (prior to or simultaneously with the requested Funding)
a first priority perfected security interest in the Collateral described
therein.

 
(ii) 
The Collateral Agent shall have been designated as the payee under (or shall
have received a dual obligee rider with respect to) each Performance Bond and
each Payment Bond issued under any Construction Contract for the Plant with
respect to which such Funding has been requested with a value greater than one
million Dollars ($1,000,000).

 
(iii) 
The Administrative Agent shall have received:

 
(A)     
UCC financing statements and other filings and recordations (other than fixture
filings or recordation of any Mortgage), in proper form for filing in all
jurisdictions that the Administrative Agent may deem necessary or desirable in
order to perfect and protect the first priority Liens and security interests
created under such Security Documents covering the Collateral described therein
and each such UCC financing statement and other filing or recordation shall be
duly filed on or before such Funding Date, prior to or simultaneously with the
requested Construction Loan Funding;

 
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(B)      
the original certificates representing all Equity Interests in the Borrower
whose Plant is the subject of such requested Funding shall have been delivered
(prior to or simultaneously with the requested Funding) to the Collateral Agent,
in each case together with a duly executed transfer power in the form attached
to the Pledge Agreement relating to such Equity Interests; and

 
(C)      
satisfactory evidence of the making (which may be simultaneous with such
Funding) of all other actions, recordings and filings of or with respect to the
Security Documents for such Plant and such Borrower that the Administrative
Agent may deem necessary or desirable in order to perfect and protect the
first-priority Liens created thereunder.

 
(h) Construction Schedule and Updated Budget.
 
(i) 
The Administrative Agent shall have received, for the Plant with respect to
which such Funding is requested, a certificate of the Borrowers' Agent, together
with a confirmation and approval in respect of thereof from the Independent
Engineer, (A) that no changes need be made to the Construction Budget for such
Plant delivered under Section 6.01(q) (Conditions to Closing –Budgets and
Schedules) or (B) an updated Construction Budget for such Plant, certified as to
the reasonableness of the underlying assumptions and the conclusions on which
such budget is based by an Authorized Officer of the relevant Borrower and
demonstrating aggregate Project Costs for such Plant equal to or less than the
amount provided for in the Construction Budget for such Plant delivered under
Section 6.01(q) (Conditions to Closing –Budgets and Schedules); provided, that
if there was an increase in costs between the Construction Budget provided on
the Closing Date and such updated Construction Budget, an amount adequate to
cover all such increased costs shall have been deposited in the Construction
Account or previously applied to pay Project Costs with respect to such Plant
(from sources other than the Loans, Cash Flow or the Sponsor Support Agreement),
as verified by the Independent Engineer.

 
(ii) 
The Administrative Agent shall have received a Construction Schedule for such
Plant, which shall have been reasonably approved by the Independent Engineer and
the Administrative Agent.

 
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(i) Independent Engineer's Report.
 
(i) 
The Administrative Agent shall have received an updated report of the
Independent Engineer, addressing the adequacy of utility arrangements and each
of the other matters set forth below for the Plant with respect to which such
Funding is being requested, identifying any material changes from the report of
the Independent Engineer dated December 5, 2006 in costs, adequacy of
contingency or other matters addressed therein, which updated report shall not
include any materially adverse conclusions by the Independent Engineer, and a
duly executed certificate of the Independent Engineer and shall be in form and
substance reasonably satisfactory to the Administrative Agent and the Required
Lenders (provided that any Lender who does not object to a request for approval
of such report within fifteen (15) days following receipt by such Lender of such
written request and a copy of such report shall be deemed to have approved such
report).

 
(ii) 
The Independent Engineer shall have certified to the Administrative Agent that
the Independent Engineer believes that the Commercial Operation Date for the
Plant with respect to which such Funding is requested will occur on or prior to
the Conversion Date Certain.

 
(j) Insurance.  The Administrative Agent shall have received binders or
certificates evidencing the commitment of insurers to provide the applicable
insurance policies then required under by Section 7.01(h) (Affirmative Covenants
- Insurance) with respect to the Borrowers for the Plant with respect to which
such Funding is requested, together with evidence of the payment of all premiums
then due and payable in respect of such insurance policies, a certificate of the
Borrowers' insurance broker (or insurance carrier) certifying that all such
insurance policies are in full force and effect and an updated report of the
Insurance Consultant confirming compliance with the insurance requirements for
such Plant set forth on Schedule 7.01(h) and material insurance requirements set
forth in the Project Documents for such Plant (including the satisfaction of any
deficiencies identified with respect to such Plant on the Closing Date),
accompanied by a duly executed certificate of the Insurance Consultant in the
form of Exhibit 6.01(k) appropriately completed to the reasonable satisfaction
of the Administrative Agent.
 
(k) Appraisal.  The Administrative Agent shall have received an appraisal of the
Site for the Plant with respect to which such Funding has been requested, in
form and substance reasonably satisfactory to the Administrative Agent.
 
(l) Opinions of Counsel.  The Administrative Agent shall have received (on or
before the date of such requested Funding) the following legal opinions,
addressed to the Senior Secured Parties, and each in form and substance
reasonably satisfactory to the Administrative Agent, covering customary matters
and matters reasonably requested by the Administrative Agent that in each such
case were not addressed in the opinions delivered on the Closing Date:
 
(i) 
the opinion of Latham & Watkins LLP (or such other legal counsel reasonably
acceptable to the Administrative Agent), as New York counsel to the Loan Parties
(and covering customary matters under Delaware law);

 
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(ii) 
in the case of the initial Funding of the Construction Loans for the Stockton
Plant or the Brawley Plant, the opinion of Latham & Watkins LLP (or such other
legal counsel reasonably acceptable to the Administrative Agent), as California
counsel to the Borrowers (covering, among other matters, the applicable Mortgage
and customary permitting opinions for the applicable Plant);

 
(iii) 
in the case of the initial Funding of the Construction Loans for the Burley
Plant, the opinion of Idaho counsel to the Loan Parties reasonably satisfactory
to the Administrative Agent (covering, among other matters, the Burley Deed of
Trust and customary permitting opinions for Burley); and

 
(iv) 
if reasonably requested by the Administrative Agent, opinions of reasonably
acceptable counsel to the Major Project Parties that are parties to the Project
Documents identified on Schedule 6.02(e)(iv) relating to the Plant whose initial
Funding has been requested and with respect to which a Consent has been
delivered.

 
(m) Project Documents; Contracts; Consents.
 
(i) 
The Administrative Agent shall have received a copy of each Project Document,
and each amendment thereto, for the Plant with respect to which such Funding is
requested that has been entered into after the Closing Date (which shall include
the Pacific Ethanol Guarantees for the applicable Project Documents for such
Greenfield Plant), each of which shall be in full force and effect and shall
have been approved by the required Project Document Approval Level.

 
(ii) 
The Administrative Agent shall have received a true, correct and complete copy
(certified as such by such Borrower) of each agreement evidencing Contractual
Obligations of such Borrower or otherwise relating to such Plant reasonably
requested by, and not previously delivered to, the Administrative Agent.

 
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(iii) 
The Administrative Agent shall have received a duly executed certificate of an
Authorized Officer of such Borrower certifying that (A) the copies of each
document delivered pursuant to Section 6.04(m)(i) and (ii) are true, correct and
complete copies of such documents, (B) such documents are in full force and
effect and no term or condition of any such Project Document has been amended
from the form thereof delivered to the Administrative Agent, (C) each of the
conditions precedent set forth in each Project Document delivered pursuant to
Section 6.04(m)(i), and each other Project Document then in effect and relating
to the Plant with respect to which such Funding is requested, that are required
to be satisfied on or before the date of such requested Funding, if any, have
been satisfied, or waived by the parties thereto, and (D) no material breach,
material default or material violation by any Borrower, or to the knowledge of
each Borrower, any Major Project Party under any such Project Document described
in clause (C) has occurred and is continuing.

 
(iv) 
The Administrative Agent shall have received a Consent, in form and substance
reasonably satisfactory to the Administrative Agent, with respect to each
Project Document, for the Plant with respect to which such Funding is requested,
identified on Schedule 6.02(e)(iv) (which, in the case of Consents from
non-Affiliate Project Parties, may be delivered on or before the Funding Date).

 
(n) Construction Contract Schedules.  The Administrative Agent shall have
received (i) a copy of each Work Schedule provided for in any Construction
Contract for the Plant with respect to which such Funding is requested and
(ii) a copy of each Schedule of Values provided for in any such Construction
Contract, in each such case in form and substance reasonably satisfactory to the
Independent Engineer and the Administrative Agent and certified by an Authorized
Officer of the Borrowers' Agent.
 
(o) Option.  With respect to the Brawley Site or the Burley Site, the
Administrative Agent shall have received satisfactory evidence from the Borrower
whose Plant is the subject of such requested Funding that the option under the
Brawley Option Agreement and/or the Burley Option Agreement, as the case may be,
has been duly exercised and the Borrower owns good and marketable title to the
Brawley Site and/or the Burley Site.
 
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(p) Governmental Approvals.  The Borrower whose Plant is the subject of such
requested Funding shall have all Necessary Project Approvals required as of the
date of such requested Funding for its Plant, and the Administrative Agent shall
have received a duly executed certificate of an Authorized Officer of such
Borrower certifying that (i) attached to such certificate are true, correct and
complete copies of each such Necessary Project Approval, (ii) each such
Necessary Project Approval is in full force and effect and is final and
Non-Appealable, (iii) all Necessary Project Approvals required for such Plant at
a later date will be obtained in due course prior to the time when needed, and
(iv) each applicable Governmental Approvals Update Schedule accurately
identifies all Necessary Project Approvals necessary for such Plant.
 
(q) Process Agent.  The Administrative Agent shall have received, in form and
substance reasonably satisfactory to the Administrative Agent, acceptances from
the Process Agent appointed under each additional Financing Document delivered
as a condition to such requested Funding pursuant to which a Process Agent is
required to be appointed.
 
(r) Burley Site Assessment.  With respect to the first Funding for the Burley
Plant, the Administrative Agent shall have received an Environmental Site
Assessment Report for the Site for such Plant, accompanied by a corresponding
reliance letter (to the extent such report does not permit reliance thereon by
the Lenders), each in form and substance reasonably satisfactory to the
Administrative Agent and the Lenders (provided that any Lender who does not
object to a request for approval of such report and such reliance letter within
fifteen (15) days following receipt by such Lender of such written request for
approval and a copy of such report and such reliance letter shall be deemed to
have given its approval, and provided that such written request specifies that
any Lender who fails to respond within such time period shall be deemed to have
approved such request).
 
Section 6.05 Conditions to All Greenfield Plant Construction Loan Fundings.  In
addition to the conditions set forth in Section 6.08 (Conditions to All
Fundings), the obligation of each Tranche A Lender to make available each
Funding of its Construction Loans for the Greenfield Plants, and the release of
any Construction Loan funds deposited in or standing to the credit of the Escrow
Account for transfer to the applicable Greenfield Plant Construction Account,
shall be subject to the fulfillment of the following conditions precedent.
 
(a) Madera and Boardman Fundings.  Each of the Madera Funding and the Boardman
Funding shall have occurred.
 
(b) Funding Notice.  The Administrative Agent shall have received a Funding
Notice, as required by and in accordance with Section 2.05 (Notice of Fundings),
together with each of the documents described below (for each Plant with respect
to which a Funding is then being requested):
 
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(i) 
to the extent requested by the Independent Engineer, all invoices for Project
Costs with respect to which such Funding is requested, each of which shall be
certified as true, correct and complete by the Borrowers' Agent and the relevant
Construction Contractor and substantiated by the Independent Engineer;

 
(ii) 
conditional sworn Lien waiver statements in form and substance reasonably
satisfactory to the Administrative Agent and the Independent Engineer evidencing
receipt of payment by each Construction Contractor, subcontractors, and all
other Persons who were paid from the proceeds of the then-last preceding Funding
for the relevant Plant (which may exclude Lien waiver statements for amounts
less than one million Dollars ($1,000,000) on an aggregate basis); provided,
that if there has been no such then-last preceding Funding, such Lien waiver
statements shall evidence receipt of all payments made prior to the date
thereof, or then due and payable, by the Borrowers to each Construction
Contractor and all subcontractors and all other Persons (which may exclude Lien
waiver statements for amounts less than one million Dollars ($1,000,000) on an
aggregate basis).  Such Lien waiver statements shall (A) be dated on or about
the date of the Funding Notice (or, if earlier, on or about the date that the
relevant construction work was completed) and (B) cover all work done and all
sums received through the date of the then-last preceding Funding for the
relevant Plant (or if there has been no such then last preceding Funding to make
payments to a particular Construction Contractor or other payee, the date
hereof).  Each such Lien waiver statement shall be certified as true, correct
and complete by the Borrowers' Agent and shall be verified by the Independent
Engineer;

 
(iii) 
a list of all Change Orders for such Plant to the date of such Funding Notice
identifying those Change Orders for such Plant, identifying those Change Orders
that were not previously submitted to the Administrative Agent, together with a
statement by the Borrowers' Agent that copies of the same have been submitted to
the Independent Engineer prior to the date of such Funding Notice and a list of
all contemplated Change Orders for such Plant that have not yet been entered
into, together with confirmation that each such Change Order (other than any
contemplated Change Order which has not been agreed to by the relevant Borrower)
is in compliance with Section 7.02(m)(iii) (Negative Covenants – Project
Documents); and

 
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(iv) 
to the extent requested by the Independent Engineer or the Administrative Agent,
evidence (which shall include the Lien waiver statements required under
Section 6.05(b)(iii) and a detailed receipt for payments itemized by Line Item
in the Construction Budget for such Plant) reasonably satisfactory to the
Independent Engineer that the full amount of the proceeds of the then-last
preceding Funding for such Plant has been paid out by the Borrowers or the
Construction Contractors to the Persons with respect to whom such Funding
proceeds were disbursed and otherwise in accordance with this Agreement;
provided that if there has been no such then-last preceding Funding for such
Plant, such evidence shall (if requested by the Administrative Agent or the
Independent Engineer) confirm receipt of all payments due and payable with
respect to such Plant by the Borrowers to the Construction Contractors, all
subcontractors and all other Persons since the date hereof.

 
(c) Independent Engineer's Certification.  The Administrative Agent shall have
received an Independent Engineer's Certificate in respect of such Funding
Notice, reasonably satisfactorily completed and duly executed by the Independent
Engineer, and confirming that (i) the Commercial Operation Date for such Plant
is capable of being completed on or before the Conversion Date Certain and
(ii) sufficient funds remain available to the Borrowers, including under this
Agreement and under the Sponsor Support Agreement, to complete such Plant in
accordance with the applicable Construction Schedule and the Transaction
Documents, and any exceptions set forth on the Exhibits thereto shall be
reasonably satisfactory to the Required Lenders.
 
(d) Title Insurance.  With respect to such Plant, the Administrative Agent shall
have received (on or before the date of such requested Funding) an ALTA 122
Endorsement to the Title Insurance Policy relating to such Plant.
 
Section 6.06 Conditions to Greenfield Plant Top-Up Funding.  In addition to the
conditions set forth in Section 6.08 (Conditions to All Fundings), the
obligation of each Tranche A Lender to make available each Greenfield Plant
Top-Up Funding shall be subject to the fulfillment of the following conditions
precedent.
 
(a) Commercial Operations.  The Commercial Operation Date for the relevant Plant
shall have occurred.
 
(b) Operating Budget.  The Administrative Agent shall have received an Operating
Budget for the relevant Plant for the remaining months of the then-current
calendar year, which budget shall be reasonably satisfactory to the
Administrative Agent and the Independent Engineer.
 
(c) Title Insurance.  With respect to the Greenfield Plant whose Excess
Construction Loan Commitments are requested to be drawn, the Administrative
Agent shall have received (on or before the date of the requested Funding) an
ALTA 122 Endorsement to the Title Insurance Policy relating to such Plant.
 
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Section 6.07 Conditions to Term Loan Funding.  In addition to the conditions set
forth in Section 6.08 (Conditions to All Fundings), the obligation of each
Lender to make its Term Loans shall be subject to the fulfillment of the
following conditions precedent.
 
(a) Term Notes.  Each requesting Construction/Term Lender shall have received a
Term Note payable to such Lender in the amount of such Lender's Term Loan
Commitment, duly executed by each Borrower and otherwise complying with the
provisions of Section 2.07 (Evidence of Indebtedness).
 
(b) Construction Loan Payoff.  All of the Construction Loans shall have been or
shall simultaneously be repaid with the proceeds of such Term Loans.
 
(c) Commercial Operation Date.  The Commercial Operation Date for each Plant
whose owner has not been released pursuant to Section 7.04 (Release of Borrower)
shall have occurred.
 
(d) Insurance.  The Administrative Agent shall have received binders or
certificates evidencing the commitment of insurers to provide the insurance
policies required by Section 7.01(h) (Affirmative Covenants - Insurance),
together with evidence of the payment of all premiums then due and payable in
respect of such insurance policies and a certificate of the Borrowers' insurance
broker (or insurance carrier) certifying that all such insurance policies are in
full force and effect, and the Administrative Agent shall have received a
certificate of the Insurance Consultant in substantially the form of
Exhibit 6.01(k) with respect thereto.
 
(e) Title Insurance.  The Administrative Agent shall have received (on or before
the date of the requested Funding) an ALTA 122 Endorsement to each
Title Insurance Policy.
 
(f) Security.  The Administrative Agent shall have received evidence that
(i) the Collateral Agent continues to have a perfected first priority security
interest in all right, title and interest of each Borrower and the Pledgor in
and to the Collateral prior to all other Liens thereon and subject only to
Permitted Liens, and (ii) all Governmental Approvals that are necessary or
desirable in order to establish, protect, preserve and perfect the Collateral
Agent's Liens have been duly made or taken and are in full force and effect.
 
(g) Operating Budget and Plan.  The Administrative Agent shall have received a
copy of the then-current Operating Budget for the Project, which shall include
all Plants which respect to which any Fundings have been disbursed, in form and
substance reasonably satisfactory to the Administrative Agent.
 
(h) Project Accounts.  The Project Accounts shall continue to be maintained in
accordance with this Agreement and shall contain all amounts, if any, required
to be deposited therein as of the Conversion Date, including the amount on
deposit in or standing to the credit of the Debt Service Reserve Account which
shall be at, or shall be funded on the Conversion Date up to, a level no less
than fifty percent (50%) of the Debt Service Reserve Requirement.
 
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(i) Legal Opinions.  The Administrative Agent shall have received (on or before
the date of such requested Funding) legal opinions from counsel to the Loan
Parties, each in form and substance reasonably satisfactory to the
Administrative Agent, addressing those matters relating to the Project, the
Transaction Documents and the transactions contemplated therein, and the
Collateral as are customarily provided in connection with "term conversions" and
as the Administrative Agent may reasonably request.
 
Section 6.08 Conditions to All Fundings.  The obligation of each Lender to make
available each Funding of its Loans (including the release of any Tranche B
Construction Loan funds deposited into or standing to the credit of the Escrow
Account for transfer to any Construction Account), the occurrence of the Closing
Date and the issuance of any Letter of Credit, shall be subject to the
fulfillment of the following conditions precedent.
 
(a) Funding Notice.  The Administrative Agent shall have received a duly
executed Funding Notice (except in connection with the occurrence of the Closing
Date or the issuance of a Letter of Credit), as required by and in accordance
with Section 2.05 (Notice of Fundings), which shall certify that:
 
(i) 
the Borrowers are in compliance with all conditions set forth in this
Section 6.08, and each other applicable Section of this Article VI, on and as of
the proposed Funding Date, before and after giving effect to such Funding and to
the application of the proceeds therefrom (provided that, to the extent
reasonably acceptable to the Administrative Agent, such compliance may be
demonstrated by the Borrowers' delivery of certain conditions to the relevant
Funding, as identified in such Funding Notice, to the Administrative Agent to be
held in escrow until the Funding Date);

 
(ii) 
all Funding Representations and Warranties made by each of the Borrowers, the
Pledgor and Pacific Ethanol in this Agreement and each of the Financing
Documents to which it is a party are true and correct in all material respects
on and as of such Funding Date (except with respect to representations and
warranties that expressly refer to an earlier date), before and after giving
effect to such Funding and to the application of the proceeds therefrom; and

 
(iii) 
since September 30, 2006, no Material Adverse Effect has occurred and is
continuing.

 
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(b) Government Approvals.  Pacific Holding and each other Borrower with respect
to whose Plant a Funding is being requested shall have all Necessary Project
Approvals required as of the date of such requested Funding for such Plant, and
the Administrative Agent shall have received a duly executed certificate of an
Authorized Officer of the relevant Borrowers certifying that (i) attached to
such certificate are true, correct and complete copies of each such Necessary
Project Approval not previously delivered to the Administrative Agent, (ii) each
such Necessary Project Approval is in full force and effect and is final and
Non-Appealable, (iii) all Necessary Project Approvals required for such Plant at
a later date will be obtained in due course prior to the time when needed, and
(iv) each applicable Governmental Approvals Update Schedule accurately
identifies all Necessary Project Approvals necessary for such Plant.
 
(c) No Default or Event of Default.  No Event of Default or Funding Default has
occurred and is continuing, or would result from such Funding.
 
(d) No Litigation.
 
(i) 
No action, suit, proceeding or investigation shall have been instituted or
threatened against any of Pacific Holding, the Pledgor, or any Plant or Borrower
with respect to whose Plant any Funding has been made or is being requested
that, individually or in the aggregate, has had or could reasonably be expected
to have a Material Adverse Effect; and

 
(ii) 
no action, suit, proceeding or investigation shall have been instituted or
threatened against any Project Party that is party to any Project Document with
Pacific Holding or that relates to any Borrower or Plant with respect to which a
Funding has been made or is being requested that, individually or in the
aggregate, has had or could reasonably be expected to have a Material Adverse
Effect.

 
(e) Abandonment, Taking, Total Loss.  (i) No Event of Abandonment or Event of
Total Loss shall have occurred and be continuing with respect to any Plant for
which a Funding is being requested, (ii) no Event of Taking relating to any
Equity Interests in Pacific Holding or any other Borrower with respect to which
any Funding is being requested shall have occurred and be continuing, or
(iii) no Event of Taking with respect to a material part of any Plant with
respect to which any Funding is being requested shall have occurred.
 
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(f) Fees; Expenses.  The Administrative Agent shall have received for its own
account, or for the account of each Lender and Agent entitled thereto, all fees
due and payable as of the date of such Funding pursuant to Section 3.13 (Fees),
and all costs and expenses (including reasonable and documented costs, fees and
expenses of legal counsel) for which invoices have been presented.
 
(g) Working Capital Loan Fundings.  With respect to the Funding of any Working
Capital Loan (other than those resulting from a draw on a Letter of Credit):
 
(i) 
The Administrative Agent shall have received a duly executed Funding Notice, as
required by and in accordance with Section 2.05 (Notice of Fundings),
accompanied by certified evidence of the Working Capital Expenses with respect
to which such Funding has been requested.  For the purposes of this
Section 6.08(g), on and after the Conversion Date (or, if earlier, the
Conversion Date Certain) any reference in this Section 6.08 to (i) "each Plant
with respect to which such Funding is requested" (or any similar reference)
shall be deemed to be a reference to all Plants with respect to which any
Funding has (since the date hereof) been made or is being requested, (ii) a
"Funding Default" shall be deemed to be a reference to a "Default", and (iii) a
"Funding Representation and Warranty" shall be deemed to be a reference to a
"representation and warranty".

 
(ii) 
From and after Commercial Operation Date for the relevant Plant, the
Administrative Agent shall have received the most recent Borrowing Base
Certificate required to be delivered pursuant to Section 7.03(n) (Reporting
Requirements), executed by the Borrowers' Agent, together with supporting
schedules, which certificate shall be in form and substance reasonably
satisfactory to the Administrative Agent.

 
ARTICLE VII
 
COVENANTS
 
Section 7.01 Affirmative Covenants.  Each Borrower agrees with each Agent and
each Lender that, until the Discharge Date, each of the Borrowers will perform
the obligations set forth in this Section 7.01 applicable to it.
 
(a) Compliance with Laws.  Each Borrower shall comply in all material respects
with all Laws (other than Environmental Laws) applicable to it or to its
business or property.
 
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(b) Environmental Matters.
 
(i) 
The Borrowers shall (A) comply in all material respects with all Environmental
Laws, (B) keep the Project free of any Lien imposed pursuant to any
Environmental Law, (C) pay or cause to be paid when due and payable by any
Borrower any and all costs required in connection with any Environmental Laws,
including the cost of identifying the nature and extent of the presence of any
Materials of Environmental Concern in, on or about the Project or on any real
property owned or leased by any Borrower or on the Mortgaged Property, and the
cost of delineation, management, remediation, removal, treatment and disposal of
any such Materials of Environmental Concern, and (D) use their best efforts to
ensure that no Environmental Affiliate takes any action or violates any
Environmental Law that could reasonably be expected to result in an
Environmental Claim.

 
(ii) 
The Borrowers shall not use or allow the Project to generate, manufacture,
refine, produce, treat, store, handle, dispose of, transfer, process or
transport Materials of Environmental Concern other than in compliance in all
material respects with Environmental Laws.

 
(c) Operations and Maintenance.  On and after the date of the initial Funding
Notice with respect to any Plant, the applicable Borrower shall own, construct,
operate and maintain (or cause to be operated and maintained) each such Plant in
all material respects in accordance with (i) the terms and provisions of the
Transaction Documents, (ii) all applicable Governmental Approvals and Laws and
(iii) Prudent Ethanol Operating Practice.
 
(d) Construction and Completion of Project; Maintenance of Properties.
 
(i) 
On and after the date of the initial Funding Notice with respect to any Plant,
the applicable Borrower shall keep, or cause to be kept, in good working order
and condition, ordinary wear and tear excepted, all of its material properties
and equipment related to each such Plant that are necessary or useful in the
proper conduct of its business.

 
(ii) 
On and after the date of the initial Funding Notice with respect to each Plant,
and except as required in connection with the construction of the Project, the
Borrowers shall not permit any such Plant or any material portion thereof to be
removed, demolished or materially altered, unless such material portion that has
been removed, demolished or materially altered has been replaced or repaired as
permitted under this Agreement.

 
(iii) 
On and after the date of the initial Funding Notice, Pacific Holding and each
other Borrower with respect to whose Plant a Funding has been made or is being
requested shall do or cause to be done all things necessary to preserve and keep
in full force and effect (A) its limited liability company existence and (B) its
material patents, trademarks, trade names, copyrights, franchises and similar
rights.

 
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(e) Payment of Obligations.  Each Borrower shall pay and discharge as the same
shall become due and payable (i) all tax liabilities, assessments and
governmental charges or levies upon it or its properties or assets, (A) unless
the same are subject to a Contest or (B) other than the nonpayment of immaterial
Taxes in an aggregate amount not in excess of twenty-five thousand Dollars
($25,000) at any one time outstanding (taking into account any interest and
penalties that could accrue or be applicable to such past-due Taxes), and
provided that such Taxes are no more than forty-five (45) days past due, (ii)
all of its obligations and liabilities under its Contractual Obligations (other
than any such failure that could not reasonably be expected to have a Material
Adverse Effect and that would not otherwise result in an Event of Default) and
(iii) all lawful claims that, if unpaid, would by law become a Lien upon its
properties (other than Permitted Liens), unless the same are subject to a
Contest.
 
(f) Governmental Approvals.  On and after the date of the initial Funding
Notice, Pacific Holding and each other Borrower with respect to whose Plant a
Funding has been made or is being requested shall maintain in full force and
effect, in the name of the relevant Borrower, all Necessary Project Approvals
and obtain all Deferred Approvals (all of which shall be reasonably satisfactory
to the Administrative Agent) prior to the time it is required to be obtained
hereunder, including as set forth on Part B of any Governmental Approvals Update
Schedule, but in any event no later than the date required to be obtained under
applicable Law (other than any such failure to maintain or obtain that could not
reasonably be expected to have a Material Adverse Effect on the relevant
Borrower or Plant).
 
(g) Use of Proceeds and Cash Flow.
 
(i) 
Except in the case of Excess Construction Loan Commitments (A) all proceeds of
the In-Progress Plant 1 Construction Loans and the In-Progress Plant 2
Construction Loans shall be applied to (1) fund that portion of the Debt Service
Reserve Requirement required to be funded with such Loans (which amount shall be
agreed upon by the Administrative Agent and the Borrowers' Agent, acting
reasonably, prior to the Funding Date for such Plant and is intended to
represent fifty percent (50%) of the Debt Service Reserve Requirement allocable
to the Loans for such Plant following the Conversion Date) and (2) to Project
Costs for the Greenfield Plants and (B) all proceeds of the Greenfield Plant
Construction Loans shall be applied to Project Costs (or, in the case of Sponsor
Support Reimbursement Fundings, for reimbursement of Project Costs) for the
Greenfield Plant with respect to which such Funding was requested.  All Loans
proceeds shall be applied in accordance with the Funding Notice pursuant to
which such Loans were funded.

 
(ii) 
All proceeds of the Greenfield Plant Top-Up Fundings shall be applied to Project
Costs, Required Equity Contributions or otherwise as permitted under this
Agreement.

 
(iii) 
All proceeds of the Term Loans shall be applied to repay the Construction Loans.

 
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(iv) 
All proceeds of Working Capital Loans (other than those resulting from a draw on
a Letter of Credit) shall be applied to Working Capital Expenses.

 
(v) 
All proceeds of the Required Equity Contributions shall be applied to Project
Costs.

 
(vi) 
The Borrowers shall cause all Cash Flow, Insurance Proceeds and Condemnation
Proceeds to be applied in accordance with Article VIII (Project Accounts).

 
(h) Insurance.  Without cost to any Senior Secured Party, on and after the date
of the initial Funding Notice for each Plant, the applicable Borrower shall at
all times obtain and maintain, or cause to be obtained and maintained, the types
and amounts of insurance listed and described on Schedule 7.01(h), in accordance
with the terms and provisions set forth therein for each such Plant and the
applicable Borrower, and shall obtain and maintain in all material respects such
other insurance as may be required pursuant to the terms of any Transaction
Document.  In the event the Borrowers fail to take out or maintain the full
insurance coverage required by this Section 7.01(h), the Administrative Agent
may (but shall not be obligated to) take out the required policies of insurance
and pay the premiums on the same.  All amounts so advanced by the Administrative
Agent shall become an Obligation and the Borrowers shall forthwith pay such
amounts to the Administrative Agent, together with interest from the date of
payment by the Administrative Agent at the Default Rate.
 
(i) Books and Records; Inspections.  Each Borrower shall keep proper books of
record and account in which complete, true and accurate entries in conformity
with GAAP and all requirements of Law shall be made of all financial
transactions and matters involving the assets and business of such Borrower, and
shall maintain such books of record and account in material conformity with
applicable requirements of any Governmental Authority having regulatory
jurisdiction over such Borrower.  Each Borrower shall keep books and records
separate from the books and records of any other Person (including any
Affiliates of the Borrowers) that accurately reflect all of its business
affairs, transactions and the documents and other instruments that underlie or
authorize all of its limited liability company actions.  On and after the date
of the initial Funding Notice (other than the Funding Notice requesting the
Tranche B Escrow Disbursement), Pacific Holding and each other Borrower with
respect to whose Plant a Funding has been made or is being requested shall
permit officers and designated representatives of the Administrative Agent or
Consultant to visit and inspect any of the properties of such Borrower
(including the respective Plant), to examine its limited liability, financial
and operating records, and make copies thereof or abstracts therefrom, and to
discuss its affairs, finances and accounts with its members, managers,
directors, officers and independent public accountants, all at the expense of
the Borrowers (provided that so long as no Default or Event of Default has
occurred and is continuing, such visits or inspections shall be at the expense
of the Borrowers only once per Quarterly Period for each such Person) and at
such reasonable times during normal business hours and as often as may be
reasonably desired, upon reasonable advance notice to such Borrower; provided
that if a Default or Event of Default has occurred and is continuing, any Agent,
or Consultant (or, in the case of any Event of Default, any Lender) (or any of
their respective officers or designated representatives) may do any of the
foregoing at the expense of the Borrowers at any time during normal business
hours and without advance notice.
 
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(j) Operating Budgets.
 
(i) 
The Borrowers shall, not later than thirty (30) days before the Commercial
Operation Date for any Plant, adopt an Operating Budget with respect to such
Plant and an updated aggregate Operating Budget for the Project from such date
to the conclusion of the calendar year immediately following the then-current
calendar year and provide a copy of such operating plan and budget at such time
to the Administrative Agent.

 
(ii) 
No less than sixty (60) days in advance of the beginning of each calendar year
with respect to each Plant that has achieved its Commercial Operation Date, the
Borrowers shall similarly adopt an operating plan and a budget setting forth in
reasonable detail the projected requirements for Operation and Maintenance
Expenses and Maintenance Capital Expenses for the ensuing two (2) calendar years
for each Plant that has achieved its Commercial Operation Date and an aggregate
operating plan and budget for the Project and provide a copy of each such
operating plan and budget at such time to the Administrative Agent.  (Each such
operating plan and budget is herein called an "Operating Budget").

 
(iii) 
Each Operating Budget shall include the same items and detail as provided in the
Financial Model and be prepared in accordance with a form similar to the Madera
Operating Budget delivered on the Closing Date (or a form otherwise approved by
the Administrative Agent) and shall become effective upon approval of the
Administrative Agent (acting in consultation with the Consultants if the
Administrative Agent reasonably determines that such consultation is necessary
or desirable).  The Administrative Agent's approval of such updated Operating
Budgets shall not be unreasonably withheld or delayed.

 
(iv) 
If the Borrowers have not adopted an annual Operating Budget covering the
applicable two-year period for each Plant that has achieved its Commercial
Operation Date and for the Project before the beginning of any calendar year
following the Madera Funding or any Operating Budget adopted by the Borrowers
has not been accepted by the Administrative Agent before the beginning of any
upcoming calendar year, the Operating Budget for each relevant Plant for the
preceding calendar year shall, until the adoption of an annual Operating Budget
by the Borrowers and acceptance of such Operating Budget by the Administrative
Agent, be deemed to be in force and effective as the annual Operating Budget for
such Plant for such upcoming calendar year; provided that if the initial
Operating Budget for any Plant is not approved by the Administrative Agent, the
Borrowers may use a budget for such Plant that is consistent with the Financial
Model until an initial Operating Budget is approved, and the Borrowers shall
work diligently to prepare an initial Operating Budget for each Plant that is
acceptable to the Administrative Agent.

 
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(v) 
If either the actual Operation and Maintenance Expenses or Maintenance Capital
Expenses for any Fiscal Quarter is in excess of the applicable Permitted
Operating Budget Deviation Levels, the Borrowers may deliver to the
Administrative Agent and the Consultants a proposed updated Operating Budget(s),
which shall be subject to approval by the Administrative Agent.  Such proposed
updated Operating Budget(s) shall not become effective until approved by the
Administrative Agent.

 
(vi) 
Each Operating Budget delivered to the Administrative Agent pursuant to this
Section 7.01(j) shall be accompanied by a memorandum addressing all material
deviations from the Financial Model.

 
(k) Performance Tests.
 
(i) 
The Administrative Agent and the Independent Engineer have the right to witness
and verify any Performance Tests.  The Borrowers shall give the Administrative
Agent and the Independent Engineer notice regarding each proposed Performance
Test no less than five (5) Business Days prior to any Performance Test.  If,
upon completion of any Performance Tests, the Borrowers have decided to use such
Performance Tests as the basis for declaring the Commercial Operation Date for
any Plant, they shall so notify the Administrative Agent and the Independent
Engineer and shall deliver a copy of all test results supporting the results of
such Performance Test, accompanied by supporting data and calculations including
a report that indicates the Borrowers' preliminary opinions as to results the
Performance Tests (each a "Performance Test Report") and the Independent
Engineer will, upon a thorough review of such Performance Test Report, certify
in writing to the Administrative Agent, within five (5) Business Days of the
receipt of such Performance Test Report, the results of the Performance Tests
and confirming that such Performance Tests were performed in accordance with
applicable ethanol industry standards or deliver a report to the Administrative
Agent and the Borrowers' Agent setting forth in reasonable detail any objections
of the Independent Engineer to such Performance Test Report.  If any such valid
objections are made, then the Borrowers shall be permitted to address such
objections to the reasonable satisfaction of the Independent Engineer or conduct
additional Performance Tests in accordance with this Section 7.01(k).

 
(ii) 
Each Performance Test shall be conducted in accordance with the Approved
Performance Test Protocols.

 
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(l) Project Documents.
 
(i) 
On and after the Closing Date, Pacific Holding and each other Borrower with
respect to whose Plant a Funding has been made or is being requested shall
maintain in full force and effect, shall defend their material rights and shall
exercise all material rights, discretion and remedies under each Project
Document to which it is a party, if any, in accordance with its terms and in a
manner consistent with (and subject to) such Borrower's obligations under the
Financing Agreements; provided, that the relevant Borrower(s) shall not be
required to undertake any enforcement actions against any Project Party pursuant
to this Section 7.01(l)(i) that, in the Borrowers' reasonable business judgment,
is not necessary or advisable, unless otherwise instructed by the Administrative
Agent, acting reasonably.

 
(ii) 
On and after the Closing Date, promptly upon execution of any Project Document
by Pacific Holding or any other Borrower with respect to whose Plant a Funding
has been made or is being requested, the Borrowers shall deliver to the
Administrative Agent certified copies of such Project Document and, if
reasonably requested by the Administrative Agent, any Ancillary Documents
related thereto.

 
(iii) 
If, at any time, the Madera DG Offtake Agreement is scheduled to expire in
accordance with its terms within ninety (90) days or less, the Borrower shall
ensure that a replacement contract, on terms and conditions reasonably
satisfactory to the Administrative Agent, is entered into with a counterparty
reasonably acceptable to the Administrative Agent, no less than thirty (30) days
prior to its expiration (it being acknowledged that an agreement with Pacific Ag
Products on terms and conditions substantially similar to the DG Offtake
Agreement for the Boardman Plant shall be deemed to be satisfactory).

 
(iv) 
No Borrower shall, without the prior approval of the Administrative Agent, agree
to extend the period of time provided for pick-up and taking of (A) ethanol
provided for in Section 2.2 of each Ethanol Offtake Agreement with Kinergy or
(B) Distillers Grains provided for in Section 2.2 of each DG Offtake Agreement
with Pacific Ag Products.

 
(m) Preservation of Title; Acquisition of Additional Property.
 
(i) 
The provisions of this Section 7.01(m)(i) shall apply to Pacific Holding and to
each other Borrower with respect to whose Plant a Funding has been made or is
being requested.  On and after the date of the initial Funding Notice (other
than the Funding Notice requesting the Tranche B Escrow Disbursement), and
subject to Section 7.02(f)(vii) (Negative Covenants – Asset Dispositions) with
respect to the Storage Facilities, the Borrowers shall preserve and maintain
(A) good, marketable and insurable fee interest in each Site (excluding the
Leased Premises) and valid easement interest to its easement interest in each
Site (excluding the Leased Premises), (B) a good, legal and valid leasehold
interest in the Leased Premises, and (C) good, legal and valid title to all of
its other respective material properties and assets, in each case free and clear
of all Liens other than Permitted Liens.  If any Borrower shall at any time
acquire any real property or leasehold or other interest in real property
(including, to the extent reasonably requested by the Administrative Agent, with
respect to any material easement or right-of-way not covered by any Mortgage),
such Borrower shall promptly upon such acquisition, execute, deliver and record
a supplement to the relevant Mortgage, reasonably satisfactory in form and
substance to the Administrative Agent, subjecting such real property or
leasehold or other interest to the Lien and security interest created by such
Mortgage.  If reasonably requested by the Administrative Agent, the Borrowers
shall obtain an appropriate endorsement or supplement to, as applicable, the
Title Insurance Policy insuring the Lien of the Security Documents in such
additional property, subject only to Permitted Liens.

 
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(ii)
Prior to the acquisition or lease of any such additional real property interests
(other than easements that do not involve soil disturbance), the Borrowers shall
deliver to the Administrative Agent an Environmental Site Assessment Report(s)
with respect to such real property (if, in the reasonable determination of the
Administrative Agent, acting in consultation with the Independent Engineer, such
Environmental Site Assessment Report(s) with respect to such real property
interests is warranted), in each case, along with a corresponding reliance
letter from the consultant issuing such report(s) (to the extent such report(s)
does not permit reliance thereon by the Lenders).  Each such environmental
report shall be in form and substance reasonably satisfactory to the
Administrative Agent.

 
(n) Maintenance of Liens; Creation of Liens on Newly Acquired Property.
 
(i)  
On and after the date of the initial Funding Notice (other than the Funding
Notice requesting the Tranche B Escrow Disbursement), the applicable Borrowers
shall take or cause to be taken all action necessary or desirable to maintain
and preserve the Lien of the Security Documents that have been executed as of
such date and the first-ranking priority thereof.

 
(ii)  
On and after the date of the initial Funding Notice for each Plant (or in the
case of Pacific Holding, the initial Funding), the applicable Borrowers shall
take all actions required to cause each Additional Project Document relating to
such Plant (or to which Pacific Holding is a party) to be or become subject to
the Lien of the Security Documents (whether by amendment to any Security
Agreement or otherwise).

 
(iii)  
Simultaneously with the making of any investment in Cash Equivalents, Pacific
Holding (after the Closing Date) and each other Borrower (after the initial
Funding Date for such Borrower's Plant) shall take or cause to be taken all
actions to require such Cash Equivalent in the Project Accounts or any Local
Account with respect to which a Blocked Account Agreement has been entered into
to be or become subject to a first priority perfected the Lien in favor of the
Senior Secured Parties.

 
(o) Certificate of Formation.  Each Borrower shall observe in all material
respects all of the separateness and other provisions and procedures of its
certificate of formation and Borrower LLC Agreement.
 
(p) Separateness.  Each Borrower shall comply at all times with the separateness
provisions set forth on Schedule 5.23.
 
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(q) Further Assurances.  Upon written request of the Administrative Agent, the
Borrowers shall promptly perform or cause to be performed any and all acts and
execute or cause to be executed any and all documents (including UCC financing
statements and UCC continuation statements):
 
(i) 
that are necessary or advisable for compliance with Section 7.01(n)(i)
(Affirmative Covenants - Maintenance of Liens; Creation of Liens on Newly
Acquired Property);

 
(ii) 
for the purposes of ensuring the validity and legality of this Agreement or any
other Financing Document and the rights of the Lenders and the Agents hereunder
or thereunder; and

 
(iii) 
for the purposes of facilitating the proper exercise of rights and powers
granted to the Lenders or the Agents under this Agreement or any other Financing
Document.

 
(r) First Priority Ranking.  The Borrowers shall cause their payment obligations
with respect to the Loans to constitute direct senior secured obligations of
each Borrower and to rank no less than pari passu in priority of payment, in
right of security and in all other respects to all other Indebtedness (other
than as contemplated by Sections 8.08(b) and (c) (Revenue Account) with respect
to payment priorities) of the Borrowers.
 
(s) Quarterly Calculations.
 
(i) 
Not more than three (3) Business Days prior to each Quarterly Payment Date, the
Borrowers shall provide to the Administrative Agent a calculation of the Debt
Service Reserve Requirement, certified by a Financial Officer of the Borrowers'
Agent.

 
(ii) 
Not more than three (3) Business Days prior to each Quarterly Payment Date on
which there are funds standing to the credit of the Prepayment Holding Account,
the Borrowers shall calculate the Historical Debt Service Coverage Ratio and the
Prospective Debt Service Coverage Ratio, and shall provide written evidence to
the Accounts Bank of such calculations certified by a Financial Officer of the
Borrowers' Agent.  Each such calculation shall be subject to review by the
Administrative Agent.

 
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(t) Interest Rate Protection Agreement.  From the date of the initial Funding
Notice for each Plant (other than the Funding Notice requesting the Tranche B
Escrow Disbursement), the Borrowers shall have in place Interest Rate Protection
Agreements with respect to at least fifty percent (50%) of the aggregate
principal amount of all Loans projected to be outstanding with respect to each
such Plant (or, after the Conversion Date, with respect to the Term Loans) from
time to time; provided, that the Borrowers may not enter into Interest Rate
Protection Agreements for notional amounts, in the aggregate at the time of the
execution thereof, in excess of the aggregate principal amount of the
Construction Loans or Term Loans, as applicable, outstanding on the date of such
transaction.
 
(u) Surveys.  The Borrowers shall deliver to the Administrative Agent a
reasonably satisfactory as-built Survey for each Plant within ninety (90) days
following Final Completion for such Plant, which Survey shall show that such
Plant has all real property interests required by the Financing Documents and
shall show no Liens other than Permitted Liens.
 
(v) Commodity Hedging Programs.  On or before the Closing Date, the
Administrative Agent has received a master Commodity Risk Management Plan for
the Project which has been approved by the Administrative Agent.  The Borrowers
may, from time to time, amend such Commodity Risk Management Plant; provided
that any material changes thereto shall require the prior written approval of
the Administrative Agent.
 
(w) Debt Service Reserve.  The Borrowers shall ensure that the Debt Service
Reserve Account is fully funded to the required amount within one (1) year
following the Conversion Date.
 
(x) The Commercial Operation Date.  The Borrowers shall cause the Commercial
Operation Date for each Greenfield Plant with respect to which a Funding has
been made to occur on or before the Conversion Date Certain.
 
(y) Final Completion.  The Borrowers shall cause Final Completion for each Plant
with respect to which a Funding has been made to occur on or before the date
that is (i) in the case of the Madera Plant and the Boardman Plant, one hundred
twenty (120) days after such Plant has achieved its Commercial Operation Date
and (ii) in the case of each of the Greenfield Plants, ninety (90) days after
such Plant shall have achieved its Commercial Operation Date.
 
Section 7.02 Negative Covenants.  Each Borrower agrees with each Agent and each
Lender that, until the Discharge Date, each of the Borrowers will perform the
obligations set forth in this Section 7.02 applicable to it.
 
(a) Restrictions on Indebtedness of the Borrowers.  The Borrowers will not
create, incur, assume or suffer to exist any Indebtedness except:
 
(i) 
the Obligations;

 
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(ii) 
Indebtedness under the Permitted Commodity Hedging Arrangements;

 
(iii) 
to the extent constituting Indebtedness, contingent obligations under or in
respect of performance bonds, bid bonds, appeal bonds, indemnification
obligations, obligations to pay insurance premiums, take or pay obligations and
similar obligations in each case incurred in the ordinary course of business and
otherwise permitted under this Agreement and not in connection with Indebtedness
for borrowed money, with respect to bonds, in an aggregate amount not to exceed
two million Dollars ($2,000,000) at any one time outstanding;

 
(iv) 
to the extent constituting Indebtedness, Indebtedness arising from the honoring
by a bank or other financial institution of a check, draft or similar instrument
drawn against insufficient funds in the ordinary course of business or other
cash management services in the ordinary course of business; provided that such
Indebtedness is extinguished within ten (10) Business Days of its incurrence and
the aggregate amount of all such Indebtedness does not exceed, at any time, one
hundred thousand Dollars ($100,000);

 
(v)
Capitalized Lease Liabilities with respect to office equipment with payments in
any Fiscal Year, taken in the aggregate for the Project, in an amount not to
exceed two million Dollars ($2,000,000) and, with respect to each Plant, in an
aggregate amount not to exceed four hundred thousand Dollars ($400,000);

 
(vi) 
Indebtedness in the nature of any Guaranty of any Borrower made on behalf of any
other Borrower, to the extent the underlying guaranteed obligation is permitted
under the Financing Documents; and

 
(vii) 
Project Company Subordinated Debt in an amount not to exceed, in the aggregate,
fifty million Dollars ($50,000,000) and which shall, in all cases, be unsecured.

 
(b) Liens.  No Borrower shall create, incur, assume or suffer to exist any Lien
upon any of its property, revenues or assets (including its Equity Interests),
whether now owned or hereafter acquired, except:
 
(i) 
Liens in favor, or for the benefit, of the Collateral Agent pursuant to the
Security Documents;

 
(ii) 
Liens for taxes, assessments and other governmental charges that are not yet due
or the payment of which is the subject of a Contest;

 
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(iii) 
Liens of carriers, warehousemen, mechanics and materialmen incurred in the
ordinary course of business (A) for sums not yet due or the payment of which is
the subject of a Contest, (B) with respect to any Plant with respect to which no
Funding has been made or is being requested, with respect only to sums that are
not past due more than sixty (60) days or (C) otherwise during the construction
period for any Plant, in amounts not in excess of one million Dollars
($1,000,000) in the aggregate for sums that are not more than sixty (60) days
past due; provided that the applicable Title Insurance Policies remain free from
mechanics' liens exceptions as contemplated by the ALTA 122 Endorsement;

 
(iv) 
minor defects or irregularities in title and similar matters if the same do not
materially detract from the operation or use of such property in the ordinary
conduct of the business of the applicable Borrower, including any such
exceptions and encumbrances which are approved by the Administrative Agent
(including pursuant to the title commitment and survey conditions precedent set
forth in Sections 6.01(r) (Conditions to Closing - Title Insurance) and 6.04(f)
(Conditions to First Funding for Each Greenfield Plant - Title Insurance));

 
(v) 
cash collateral for bonds permitted under Section 7.02(a)(iii) (Negative
Covenants - Restrictions on Indebtedness of the Borrowers) or otherwise, but
only to the extent that the amount of such cash collateral is below the minimum
issuance amount for Letters of Credit as provided in Section 2.04(b) (Letters of
Credit) and provided that such cash collateral does not exceed two million
Dollars ($2,000,000) in the aggregate and, with respect to cash collateral other
than in connection with such bonds, one million Dollars ($1,000,000) in the
aggregate;

 
(vi) 
Liens arising with respect to a Local Account for which a Blocked Account
Agreement has been entered into or otherwise arising by virtue of any statutory
or common law provisions relating to banker's liens, rights of set-off or
similar rights; provided that such Liens either (A) are subordinated to the
Liens of the Senior Secured Parties or (B) with respect only to Local Accounts
for which a Blocked Account Agreement has been entered into, are in an aggregate
total amount not in excess of one hundred thousand Dollars ($100,000);

 
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(vii) 
easements granted by any Borrower to any utility serving such Borrower's Plant
as required for the construction or operation of such Plant; provided, that in
each such case:

 
(A)     
such easement will not adversely affect the costs under any Construction
Contract or any other Project Costs;

 
(B)      
such easement will not adversely affect the operations of any Plant; and

 
(C)      
such easement has been approved by the Independent Engineer;

 
(viii) 
with the prior written approval of the Independent Engineer and the
Administrative Agent, licenses or leases of a portion of the Site for any Plant;
provided, that such license or lease could not reasonably be expected to have
any adverse impact on the construction or operations of such Plant or its
related transportation plans and facilities; and

 
(ix) 
purported Liens evidenced by the filing of precautionary UCC financing
statements relating solely to operating leases of personal property entered into
in the ordinary course of business and otherwise permitted under this Agreement.

 
(c) Permitted Investments.  The Borrowers shall not make any investments, loans
or advances (whether by purchase of stocks, bonds, notes or other securities,
loans, extensions of credit, advances or otherwise) except for investments in
(i) Cash Equivalents, (ii) investments received in connection with the
bankruptcy of suppliers or customers of the Borrowers (provided that such
investments are subject to a first priority perfected Lien in favor of the
Collateral Agent) and (iii) in the case of Pacific Holding, investments in the
other Borrowers.
 
(d) Change in Business.  No Borrower shall (i) enter into or engage in any
business other than the ownership, operation, maintenance, development,
start-up, testing, use and financing of the Plants or the Project and all
activities related thereto or (ii)  change in any material respect the scope of
any Plant or the Project from that which is contemplated as of the date hereof.
 
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(e) Equity Issuances.  No Borrower shall issue any Equity Interests unless such
Equity Interests are immediately pledged to the Collateral Agent (for the
benefit of the Senior Secured Parties) on a first priority perfected basis
pursuant to the Pledge Agreements or, if necessary, a supplement thereto or a
pledge and security agreement in substantially the form of the Pledge
Agreements.
 
(f) Asset Dispositions.  Following the occurrence of the initial Funding Date
with respect to each Plant (or, in the case of Pacific Holding, the initial
Funding) the applicable Borrowers shall not sell, lease, assign, transfer or
otherwise dispose of assets of such Plant or Borrower (other than Products),
whether now owned or hereafter acquired, except:
 
(i) 
disposal of assets that are promptly replaced in accordance with the
then-current Operating Budgets;

 
(ii) 
to the extent that such assets are uneconomical, obsolete or no longer useful or
no longer usable in connection with the operation or maintenance of the Project;

 
(iii) 
the liquidation or use of Cash Equivalents;

 
(iv) 
sales or discounts, excluding any such sale or discount to any Affiliate of the
Borrowers (under any Affiliated Project Document or otherwise), without recourse
of accounts receivable arising in the ordinary course of business in connection
with the compromise or collection thereof;

 
(v) 
disposal of assets with a fair market value, or at a disposal price, of less
than one million Dollars ($1,000,000) in the aggregate per Plant during any
Fiscal Year; provided, that such disposal does not, and would not reasonably be
expected to, adversely affect the construction, operation or maintenance of such
Plant;

 
(vi) 
with the prior written approval of the Independent Engineer, the disposal or
loss of an immaterial portion of the Site for any Plant; provided, that such
disposal or loss could not reasonably be expected to have any adverse impact on
the construction or operations of such Plant or its related transportation plans
and facilities; or

 
(vii) 
the Storage Facilities owned by the Borrowers may be transferred to an Affiliate
of the Borrowers; provided, that each of the following conditions is satisfied:

 
(A)     
such Affiliate is Solvent;

 
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(B)      
the relevant Borrower and such Affiliate shall have entered into a lease
agreement with respect to such Storage Facility, in form and substance
reasonably satisfactory to the Administrative Agent, the Collateral Agent and
the Independent Engineer;

 
(C)      
the relevant Borrower shall have executed and delivered a leasehold mortgage for
the benefit of the Collateral Agent, in form and substance reasonably
satisfactory to the Collateral Agent and the Administrative Agent;

 
(D)      
the Administrative Agent shall have received: (1) completed requests for
information or lien search reports, dated no more than eight (8) days (or such
other period of time reasonably acceptable to the Administrative Agent) before
the date of such leasehold mortgage, listing all effective UCC financing
statements, fixture filings or other filings evidencing a security interest
filed in Delaware, the location of such Storage Facility and any other
jurisdictions reasonably requested by the Administrative Agent that name the
relevant Borrower or the owner of such Storage Facility as a debtor, together
with copies of each such UCC financing statement, fixture filing or other
filings, which shall show no Liens other than Permitted Liens,
(2) acknowledgement copies or stamped receipt copies of proper UCC financing
statements (other than fixture filings or leasehold mortgage recordations), duly
filed in all jurisdictions that the Administrative Agent may deem necessary or
desirable in order to perfect and protect the first priority Liens and security
interests created under such leasehold mortgage, and (3) evidence of the
completion of all other actions, recordings and filings of or with respect to
the leasehold mortgage that the Administrative Agent may deem necessary or
desirable in order to perfect and protect the first priority lien created
thereunder;

 
(E)      
the Administrative Agent shall have received a paid Title Insurance Policy or
Policies with respect such leasehold mortgage, in the aggregate amount
reasonably requested by the Administrative Agent, on a Form 1992 extended
coverage lender's policy;

 
(F)      
the Administrative Agent shall have received a current Survey with respect to
such leasehold mortgage for the Storage Facilities which shall be reasonably
satisfactory to the Title Insurance Company;

 
(G)      
the Administrative Agent shall have received reasonably satisfactory evidence
that such leased premises have been legally and satisfactorily partitioned in
accordance with all applicable State and local Laws, including, in the case of
any Plant in California, the California Subdivision Map Act, and, in the case of
any Plant in any other jurisdiction, all comparable statutes or other applicable
Laws; and

 
(H)     
the Administrative Agent shall have received reasonably satisfactory evidence
that all requisite insurance identified on Schedule 7.01(h) with respect to any
such leased premises is in place.

 
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(g) Consolidation, Merger.  No Borrower will (i) directly or indirectly
liquidate, wind up, terminate, reorganize or dissolve itself (or suffer any
liquidation, winding up, termination, reorganization or dissolution) or
otherwise wind up; or (ii) acquire (in one transaction or a series of related
transactions) all or any substantial part of the assets, property or business
of, or any assets that constitute a division or operating unit of, the business
of any Person or otherwise merge or consolidate with or into any other Person.
 
(h) Transactions with Affiliates.  No Borrower shall enter into or cause, suffer
or permit to exist any arrangement or contract with any of its Affiliates or any
other Person that owns, directly or indirectly, any Equity Interest in any
Borrower unless such arrangement or contract (i) is fair and reasonable to such
Borrower and (ii) is an arrangement or contract that is on arm's-length basis
and contains terms no less favorable than those that would be entered into by a
prudent Person in the position of such Borrower with a Person that is not one of
its Affiliates (it being acknowledged that (1) each of the Affiliate Project
Documents are in compliance with this Section 7.02(h) and (2) the transactions
contemplated by the Sponsor Support Agreement and the Security Documents are in
compliance with this Section 7.02(h)).
 
(i) Accounts.  (i) In the case of Pacific Holding, from and after the Closing
Date, and in the case of each other Borrower, from and after the initial Funding
Date for such Borrower's Plant, the Borrowers shall not maintain, establish or
use any deposit account, securities account (as each such term is defined in the
UCC) or other banking account other than the Project Accounts and no more than
five (5) Local Accounts, each of which shall be subject to a Blocked Account
Agreement (provided that for any Local Account opened prior to the initial
Funding Date, such Blocked Account Agreement may be executed on or before the
initial Funding Date).  (ii) The Borrowers shall not change the name or account
number of any of the Project Accounts or Local Accounts without the prior
written consent of the Administrative Agent.
 
(j) Subsidiaries.  Pacific Holding shall not create or acquire any Subsidiary
other than Madera, Boardman, Stockton, Brawley or Burley (or the owner of any
Substitute Facility) nor enter into any partnership or joint venture.  Each of
Madera, Boardman, Stockton, Brawley and Burley shall not create or acquire any
Subsidiary or enter into any partnership or joint venture.
 
(k) ERISA.  No Borrower will engage in any prohibited transactions under
Section 406 of ERISA or under Section 4975 of the Code.  No Borrower will incur
any obligation or liability in respect of any Plan, Multiemployer Plan or
employee welfare benefit plan providing post-retirement welfare benefits (other
than a plan providing continue coverage under Part 6 of Title I of ERISA) in
each such case without the prior written consent of the Administrative Agent
(unless the aggregate total obligations or liabilities of the Borrowers that
could reasonably be expected to arise, due to no fault of the Borrowers, in
connection therewith would not exceed five hundred thousand Dollars ($500,000)).
 
(l) Taxes.  No Borrower shall make any election to be treated as an association
taxable as a corporation for federal, state or local tax purposes.
 
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(m) Project Documents.
 
(i) 
Subject to Section 7.02(m)(iii), on and after the date of the initial Funding
Notice for the relevant Plant (or, in the case of Pacific Holding, the initial
Funding), no Borrower shall direct or consent or agree to any amendment,
modification, supplement, or waiver to or in respect of any provision of any
Project Document to which it is a party (other than any Project Document that
relates only to a Plant with respect to which no Funding has been made nor is
being requested) without all applicable approvals at the relevant Project
Document Approval Level.

 
(ii) 
On and after the date of the initial Funding Notice for the relevant Plant (or,
in the case of Pacific Holding, the initial Funding), and except for collateral
assignments under the Security Documents, no Borrower shall assign any of its
rights under any Project Document to which it is a party (other than any Project
Document that relates only to a Plant with respect to which no funding has been
made nor is being requested) to any Person, or consent to the assignment of any
obligations under any such Project Document by any other party thereto.

 
(iii) 
On and after the date of the initial Funding Notice for the relevant Plant, no
Borrower shall enter into or approve any Change Orders for any such Plant
without the approval of the Administrative Agent (acting in consultation with
the Independent Engineer), such approval not to be unreasonably withheld or
delayed, unless each of the following conditions is satisfied:

 
(A)     
the cost of such Change Order does not exceed one million Dollars ($1,000,000)
or, when, taken together with all prior Change Orders for the same Plant that
have not previously been approved by the Administrative Agent, does not exceed
five million Dollars ($5,000,000);

 
(B)      
such Change Order would not reasonably be expected to prevent any Plant with
respect to which a Funding has been made or is being requested from achieving
its Commercial Operation Date on or before the Conversion Date Certain;

 
(C)      
such Change Order would not reasonably be expected to present a material risk of
revocation or material modification of any Governmental Approval;

 
(D)      
such Change Order would not reasonably be expected to cause any Borrower or any
Plant not to comply or lessen the ability of any Borrower or any Plant to comply
in all material respects with any Law applicable to it;

 
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(E)      
such Change Order could not reasonably be expected to result in a Default or an
Event of Default; and

 
(F)      
the Administrative Agent has received a certificate, duly executed by an
Authorized Officer of the Borrowers' Agent, confirming that the proposed Change
Order will comply with each of the conditions set forth in clauses (A)-(E) above
.

 
(n) Subordinated Debt Agreements.  No Borrower shall enter into, except in
connection with Indebtedness of such Borrower permitted by Section 7.02(a)
(Negative Covenants-Permitted Indebtedness), any Subordinated Debt Agreement.
 
(o) Additional Project Documents.  None of Pacific Holding or any other Borrower
with respect to whose Plant a Funding has been made or is being requested shall
enter into any Additional Project Document except with the prior written
approval of the Administrative Agent.
 
(p) Suspension or Abandonment.  On and after the date of the initial Funding
Notice for the relevant Plant, the applicable Borrower shall not (i) permit or
suffer to exist an Event of Abandonment or (ii) order or consent to any
suspension of work in excess of sixty (60) days under any Project Document
relating to such Plant, in each such case without the prior written approval of
the Required Lenders.
 
(q) Use of Proceeds; Margin Regulations.  No Borrower shall use any proceeds of
any Loan other than in accordance with the provisions of Article II (Commitments
and Funding) and Section 7.01(g) (Affirmative Covenants - Use of Proceeds and
Cash Flow).  No Borrower shall use any part of the proceeds of any Loan to
purchase or carry any Margin Stock (as defined in Regulation U) or to extend
credit to others for the purpose of purchasing or carrying any Margin Stock.  No
Borrower shall use the proceeds of any Loan in a manner that could violate or be
inconsistent with the provisions of Regulations T, U or X.
 
(r) Environmental Matters.  Except to the extent that the following could not
reasonably be expected to result in an Environmental Claim (and provided that
the following are done only in compliance with all applicable Laws), the
Borrowers shall not permit (i) any underground storage tanks to be located on
any property owned or leased by any Borrower, (ii) any asbestos to be contained
in or form part of any building, building component, structure or office space
owned by any Borrower, (iii) any polychlorinated biphenyls (PCBs) to be used or
stored at any property owned by any Borrower, (iv) any other Materials of
Environmental Concern to be used, stored or otherwise be present at any property
owned by any Borrower, other than Materials of Environmental Concern necessary
for the operation of the Project and used in accordance with Prudent Ethanol
Operating Practice or (v) any other Materials of Environmental Concern to be
used, stored or otherwise be present at any property leased by any Borrower.
 
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(s) Restricted Payments.  Except as otherwise permitted under Section 2.06(e)
(Funding of Loans) the Borrowers shall not make any Restricted Payments unless
each of the conditions set forth below has been satisfied.
 
(i) 
the Conversion Date shall have occurred;

 
(ii) 
such Restricted Payment is made on, or within thirty (30) days following, a
Quarterly Payment Date (provided that such Restricted Payment is made only from
funds on deposit in or standing to the credit of the Revenue Account or the
Prepayment Holding Account, as the case may be, on such Quarterly Payment Date);

 
(iii) 
no Default or Event of Default has occurred and is continuing or would occur as
a result of such Restricted Payment;

 
(iv) 
each of the Debt Service Reserve Account and the Working Capital Reserve Account
is fully funded to any applicable required level;

 
(v) 
each of the Historical Debt Service Coverage Ratio and the Prospective Debt
Service Coverage Ratio, calculated as of such Quarterly Payment Date, are
greater than or equal to 1.5:1;

 
(vi) 
the most recent update of the Operating Budgets required pursuant to
Section 7.01(j) (Affirmative Covenants - Operating Budget) shall have been
approved by the Administrative Agent; and

 
(vii) 
the Administrative Agent has received a Restricted Payment Certificate, duly
executed by an Authorized Officer of the Borrowers' Agent, confirming that each
of the conditions set forth in clauses (i) through (vi) of this Section 7.02(s)
have been satisfied on and as of the date such Restricted Payment is requested
to be made, and setting forth a detailed calculation of each of the Historical
Debt Service Coverage Ratio and Prospective Debt Service Coverage Ratio.

 
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(t) Construction Budget.  From and after the date of the initial Funding Notice
for each Plant, the Borrowers, without the prior written approval of the
Administrative Agent and the Independent Engineer, may not reallocate any
portion of any Line Item of the Construction Budget for such Plant except to
(i) reallocate the Contingency Line Item to pay for Change Orders permitted
under this Agreement, (ii) pay for fees and expenses of advisors and consultants
(including legal counsel) incurred in connection with the transactions
contemplated by the Transaction Documents in excess of the amounts then
budgeted, up to ten thousand Dollars ($10,000) in any calendar month or one
hundred thousand Dollars ($100,000) in any calendar year, (iii) apply
cost-savings from any completed Line Item (which completion has been confirmed
by the Independent Engineer) to one or more other Line Items, (iv) reflect
increased costs funded under the Sponsor Support Agreement or other documented
voluntary equity contributions made to the Borrowers to pay for such increased
costs, (v) reallocate no more than fifteen percent (15%) in the aggregate of the
total value of any Line Item to one or more other Line Items, or (vi) in
addition to the reallocation permitted pursuant to Sections 7.02(t)(i)-(v),
reallocate amounts from the Contingency Line Item to other Line Items with the
prior written consent of the Independent Engineer.
 
(u) Commodity Hedging Arrangements.  The Borrowers shall not enter into any
Commodity Hedging Arrangements that:
 
(i) 
are not in accordance with the Commodity Risk Management Plans; or

 
(ii) 
are for speculative purposes.

 
(v) Accounting Changes.  No Borrower shall make any change in (i) its accounting
policies or reporting practices, except as required by GAAP or as otherwise
notified to the Administrative Agent in writing (provided that the Borrowers
shall provide an historical reconciliation for the prior audited period
addressing any such change in accounting practices), or (ii) its Fiscal Year
without the prior written consent of the Administrative Agent.
 
Section 7.03 Reporting Requirements.  The Borrowers will furnish to the
Administrative Agent, who shall distribute copies of the following to each
Lender:
 
(a) as soon as available and in any event within forty-five (45) days after the
end of the first three Fiscal Quarters of each Fiscal Year, consolidated balance
sheets of Pacific Ethanol, consolidated and consolidating balance sheets of
Pacific Holding, consolidated statements of income and cash flows of Pacific
Ethanol and consolidated and consolidating statements of income and cash flows
of Pacific Holding for such Fiscal Quarter and for the period commencing at the
end of the previous Fiscal Year and ending with the end of such Fiscal Quarter;
 
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(b) as soon as available and in any event within ninety (90) days after the end
of each Fiscal Year, a copy of the annual audit report for such Fiscal Year for
each of Pacific Ethanol and Pacific Holdings including therein balance sheets as
of the end of such Fiscal Year and statements of income and cash flows of each
of Pacific Ethanol (on a consolidated basis) and Pacific Holding (on a
consolidated and consolidating basis) for such Fiscal Year, and accompanied by
an unqualified opinion of the Auditors stating that all such financial
statements present fairly in all material respects the financial position of
Pacific Ethanol or each Borrower (as applicable) for the periods indicated in
conformity with GAAP applied on a basis consistent with prior periods (except as
otherwise contemplated by Section 7.02(v) (Negative Covenants - Accounting
Changes)), which report and opinion shall not be subject to any "going concern"
or like qualification or exception or any qualification or exception as to the
scope of such audit;
 
(c) concurrently with the delivery of the financial statements referred to in
Sections 7.03(a) and (b) a certificate, executed by a Financial Officer of the
applicable Loan Party stating that:
 
(i) 
such financial statements fairly present in all material respects the financial
condition and results of operations of such Person on the dates and for the
periods indicated in accordance with GAAP subject, in the case of interim
financial statements, to the absence of notes and normally recurring year-end
adjustments;

 
(ii) 
such Financial Officer has reviewed the terms of the Financing Documents and has
made, or caused to be made under his or her supervision, a review in reasonable
detail of the business and financial condition of such Person during the
accounting period covered by such financial statements; and

 
(iii) 
as a result of such review such Financial Officer has concluded that no Default
or Event of Default has occurred during the period covered by such financial
statements through and including the date of such certificate or, if any Default
or Event of Default has occurred, specifying the nature and extent thereof and,
if continuing, the action that the Borrowers have taken and propose to take in
respect thereof;

 
(d) as soon as possible and in any event within five (5) days after the
occurrence of any Default or Event of Default, a statement of an Authorized
Officer of the Borrowers' Agent setting forth details of such Default or Event
of Default and the action that the Borrowers have taken and propose to take with
respect thereto;
 
(e) within five (5) days after any Borrower obtains knowledge thereof a
statement of an Authorized Officer of the Borrowers' Agent setting forth details
of:
 
(i) 
any litigation or governmental proceeding pending or threatened in writing
against any Borrower or the Pledgor;

 
(ii) 
any litigation or governmental proceeding pending or threatened in writing
against any Project Party that has or could reasonably be expected to have a
Material Adverse Effect;

 
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(iii) 
any other event, act or condition that has or could reasonably be expected to
have a Material Adverse Effect;

 
(iv) 
notification of any event of force majeure or similar event under a Project
Document which is expected to continue for more than five (5) days or, to the
knowledge of the Borrowers, result in increased costs of at least five hundred
thousand Dollars ($500,000); or

 
(v) 
notification of any other change in circumstances that could reasonably be
expected to result in an increase of more than one million Dollars ($1,000,000)
in Project Costs for any Plant;

 
(f) promptly after delivery or receipt thereof, copies of all material notices
or documents given or received by Pacific Holding or, from and after the initial
Funding for such Borrower's Plant, each other Borrower, pursuant to any of the
Project Documents or any Subordinated Debt Agreement including:
 
(i) 
any Change Orders or any written requests for Change Orders that are anticipated
to be accepted by the applicable Borrower;

 
(ii) 
any written notice alleging any breach or default thereunder; and

 
(iii) 
any written notice regarding, or request for consent to, any assignment,
termination, modification, waiver or variation thereof;

 
(g) within five (5) days following the end of each calendar month until the
Conversion Date, the Borrowers shall deliver a Monthly Progress Report to the
Administrative Agent for each Plant with respect to which any Funding has been
made and that has not yet achieved its Commercial Operation Date;
 
(h) within three (3) days following receipt thereof, the Borrowers shall deliver
to the Administrative Agent any monthly or other periodic report provided to any
Borrower under any Construction Contract related to any Plant with respect to
which any Funding has been made, which shall be subject to review by the
Independent Engineer;
 
(i) as soon as possible and in any event within five (5) Business Days after any
Borrower knows, or has reason to know, that any of the events described below
have occurred, a duly executed certificate of an Authorized Officer of the
Borrowers' Agent setting forth the details of each such event and the action
that the Borrowers propose to take with respect thereto, together with a copy of
any notice or filing from the PBGC, Internal Revenue Service, Department of
Labor or that may be required by the PBGC or other U.S. Governmental Authority
with respect to each such event:
 
(i) 
any Termination Event with respect to an ERISA Plan or a Multiemployer Plan has
occurred or will occur that could reasonably be expected to result in any
material liability to any Borrower;

 
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(ii) 
any condition exists with respect to a Plan that presents a material risk of
termination of a Plan (other than a standard termination under Section 4041(b)
of ERISA) or imposition of an excise tax or other material liability on any
Borrower;

 
(iii) 
an application has been filed for a waiver of the minimum funding standard under
Section 412 of the Code or Section 302 of ERISA under any Plan;

 
(iv) 
any Borrower or any Plan fiduciary has engaged in a "prohibited transaction," as
defined in Section 4975 of the Code or as described in Section 406 of ERISA,
that is not exempt under Section 4975 of the Code and Section 408 of ERISA that
could reasonably be expected to result in material liability to any Borrower;

 
(v) 
there exists any Unfunded Benefit Liabilities under any ERISA Plan;

 
(vi) 
any condition exists with respect to a Multiemployer Plan that presents a risk
of a partial or complete withdrawal (as described in Section 4203 or 4205 of
ERISA) from a Multiemployer Plan that could reasonably be expected to result in
any liability to any Borrower;

 
(vii) 
a "default" (as defined in Section 4219(c)(5) of ERISA) occurs with respect to
payments to a Multiemployer Plan and such default could reasonably be expected
to result in any liability to any Borrower;

 
(viii) 
a Multiemployer Plan is in "reorganization" (as defined in Section 418 of the
Code or Section 4241 of ERISA) or is "insolvent" (as defined in Section 4245 of
ERISA);

 
(ix) 
any Borrower and/or any ERISA Affiliate has incurred any potential withdrawal
liability (as defined in accordance with Title IV of ERISA); or

 
(x) 
there is an action brought against any Borrower or any ERISA Affiliate under
Section 502 of ERISA with respect to its failure to comply with Section 515 of
ERISA;

 
(j) as soon as possible and in any event within five (5) Business Days after the
receipt by any Borrower of a demand letter from the PBGC notifying such Borrower
of its final decision finding liability and the date by which such liability
must be paid, a copy of such letter, together with a duly executed certificate
of the president or chief financial officer of such Borrower setting forth the
action that such Borrower proposes to take with respect thereto;
 
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(k) promptly and in any event within five (5) Business Days after the existence
of any of the following conditions, a duly executed certificate of an Authorized
Officer of the Borrowers' Agent specifying in detail the nature of such
condition and, if applicable, the Borrowers' proposed response thereto:
 
(i) 
receipt by any Borrower of any written communication from a Governmental
Authority or any written communication from any other Person or other source of
written information, including (to the extent not privileged) reports prepared
by any Borrower, that alleges or indicates that any Borrower or an Environmental
Affiliate is not in compliance in all material respects with applicable
Environmental Laws or Environmental Approvals;

 
(ii) 
any Borrower obtains knowledge that there exists any Environmental Claim pending
or threatened in writing against any Borrower or an Environmental Affiliate;

 
(iii) 
any Borrower obtains knowledge of any release, threatened release, emission,
discharge or disposal of any Material of Environmental Concern or obtains
knowledge of any material non-compliance with any Environmental Law that, in
either such case, could reasonably be expected to form the basis of an
Environmental Claim against any Borrower or any Environmental Affiliate; or

 
(iv) 
any Removal, Remedial or Response action taken by any Borrower or any other
person in response to any Material of Environmental Concern in, at, on or under,
a part of or about the Borrowers' properties or any other property or any
notice, claim or other information that any of the Borrowers might be subject to
an Environmental Claim;

 
(l) the Borrowers will maintain and make available for inspection by the
Administrative Agent, the Consultants and, if an Event of Default has occurred
and is continuing, the Lenders, and each of their respective agents and
employees, on reasonable notice during regular business hours, accurate and
complete records of all non-privileged correspondence, investigations, studies,
sampling and testing conducted, and any and all remedial actions taken, by any
Borrower or, to the best of any Borrower's knowledge and to the extent obtained
by any Borrower, by any Governmental Authority or other Person in respect of
Materials of Environmental Concern that could reasonably be expected to form the
basis of an Environmental Claim on or affecting any Plant or the Project;
 
(m) promptly after receipt thereof, copies of each Deferred Approval obtained by
any Borrower, together with such documents relating thereto as any Lender may
request through the Administrative Agent, certified as true, complete and
correct by an Authorized Officer of the Borrowers' Agent;
 
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(n) as soon as available, but not later than fifteen (15) days after the end of
each calendar month, the Borrowers shall deliver to the Administrative Agent a
Borrowing Base Certificate as of the last Business Day of the immediately
preceding calendar month; and
 
(o) other information reasonably requested by the Administrative Agent or any
Lender, through the Administrative Agent.
 
(p) Operating Statements.  After the Commercial Operation Date for each Plant,
within forty-five (45) days after the end of each Fiscal Quarter, the Borrowers
shall furnish to the Administrative Agent an Operating Statement regarding the
operation and performance of each such Plant for each monthly, quarterly and, in
the case of the last quarterly Operating Statement for each year, annual
period.  Such Operating Statements shall contain (i) line items corresponding to
each Operating Budget Category of the then-current Operating Budget for each
Plant showing in reasonable detail by Operating Budget Category all actual
expenses related to the operation and maintenance of each such Plant compared to
the budgeted expenses for each such Operating Budget Category for such period,
(ii) information showing the amount of ethanol and other Products produced by
each such Plant during such period and (iii) information showing (A) the amount
of ethanol sold by the Borrowers from each such Plant to pursuant to the Ethanol
Offtake Agreements, (B) the amount of Distillers Grains sold by the Borrowers
from each such Plant pursuant to the DG Offtake Agreements, and (C) the amount,
if any, of other sales of ethanol and/or Distillers Grains, together with an
explanation of any such sale and identification of the purchaser, and (D) the
amount, if any, of other Products sold by the Borrowers from the Plants,
together with an explanation of any such sale and identification of the
purchaser.  The Operating Statements shall be certified as complete and correct
by an Authorized Officer of the Borrowers' Agent.
 
Section 7.04 Release of Borrower.  (a) Upon the written request of the
Borrowers' Agent, any Borrower that owns a Plant with respect to which no
Fundings have been made may be released from its obligations under, and cease to
be subject to the terms of, this Agreement and the other Financing Documents
(i) on the Conversion Date or (ii) prior to the Conversion Date if the
Administrative Agent and the Borrowers have determined and agree, in good faith,
that the conditions to funding for such Plant will not be able to be
satisfied.  Notwithstanding anything to the contrary herein, (A) on the  date of
any such release, the Administrative Agent and the Collateral Agent, at the
expense of the Borrowers, shall execute and deliver all acknowledgements, lien
releases, amendments and other instruments necessary to effectuate such release
as the Borrowers may reasonably request, (B) from and after the date of any such
release, such released "Borrower" shall no longer be a "Borrower" or a "Loan
Party" under the Financing Documents, (C) such released "Borrower's" Plant shall
no longer be a Plant or part of the Project under the Financing Documents, (D)
all provisions (including any representation, warranty, condition precedent,
covenant and default) in any of the Financing Documents relating to such
released "Borrower" or "Plant" shall no longer apply to such released "Borrower"
or released "Plant", and (E) any existing Defaults or Events of Default which
solely relate to such released "Borrower" or its "Plant" shall be deemed to be
waived.
 
(b) Following the occurrence of the Commercial Operation Date for each Plant
whose owner has not been released as a Borrower pursuant to Section 7.04(a), the
Borrowers shall use their best commercially reasonable efforts to cause the
Conversion Date to occur as promptly as practicable thereafter.
 
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ARTICLE VIII
 
PROJECT ACCOUNTS
 
Section 8.01 Establishment of Project Accounts.  On or prior to the Closing
Date, the Accounts Bank shall establish and maintain, in the name of the
Borrower's Agent and on the books and records of the Accounts Bank's offices
located in Monterey Park, California the accounts set forth below:
 
(a) a special, segregated, Dollar-denominated account entitled "UBOC Control -
Pacific Ethanol Holding Co. LLC Escrow Account", Account No. 4430003491 (the
"Escrow Account");
 
(b) a special, segregated, Dollar-denominated account entitled "UBOC Control -
Pacific Ethanol Holding Co. LLC Construction Holding Account", Account
No. 4430003211 (the "Construction Holding Account");
 
(c) a special, segregated, Dollar-denominated account entitled "UBOC Control -
Pacific Ethanol Holding Co. LLC Stockton Construction Account", Account
No. 4430003254 (the "Stockton Construction Account");
 
(d) a special, segregated, Dollar-denominated account entitled "UBOC Control -
Pacific Ethanol Holding Co. LLC Brawley Construction Account", Account
No. 4430003262 (the "Brawley Construction Account");
 
(e) a special, segregated, Dollar-denominated account entitled "UBOC Control -
Pacific Ethanol Holding Co. LLC Burley Construction Account", Account
No. 4430003270 (the "Burley Construction Account");
 
(f) a special, segregated, Dollar-denominated account entitled "UBOC Control -
Pacific Ethanol Holding Co. LLC Revenue Account", Account No. 4430003289 (the
"Revenue Account");
 
(g) a special, segregated, Dollar-denominated account entitled "UBOC Control -
Pacific Ethanol Holding Co. LLC Operating Account", Account No. 4430003297 (the
"Operating Account");
 
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(h) a special, segregated, Dollar-denominated account entitled "UBOC Control -
Pacific Ethanol Holding Co. LLC Maintenance Capital Expense Account", Account
No. 4430003300 (the "Maintenance Capital Expense Account");
 
(i) a special, segregated, Dollar-denominated account entitled "UBOC Control -
Pacific Ethanol Holding Co. LLC Working Capital Reserve Account", Account
No. 4430003319 (the "Working Capital Reserve Account");
 
(j) a special, segregated, Dollar-denominated account entitled "UBOC Control -
Pacific Ethanol Holding Co. LLC Debt Service Reserve Account", Account
No. 4430003327 (the "Debt Service Reserve Account");
 
(k) a special, segregated, Dollar-denominated account entitled "UBOC Control -
Pacific Ethanol Holding Co. LLC Prepayment Holding Account", Account
No. 4430003335 (the "Prepayment Holding Account");
 
(l) a special, segregated, Dollar-denominated account entitled "UBOC Control -
Pacific Ethanol Holding Co. LLC Madera Insurance and Condemnation Proceeds
Account", Account No. 4430003343 (the "Madera Insurance and Condemnation
Proceeds Account");
 
(m) a special, segregated, Dollar-denominated account entitled "UBOC Control -
Pacific Ethanol Holding Co. LLC Boardman Insurance and Condemnation Proceeds
Account", Account No. 4430003351 (the "Boardman Insurance and Condemnation
Proceeds Account");
 
(n) a special, segregated, Dollar-denominated account entitled "UBOC Control -
Pacific Ethanol Holding Co. LLC Stockton Insurance and Condemnation Proceeds
Account", Account No. 4430003408 (the "Stockton Insurance and Condemnation
Proceeds Account");
 
(o) a special, segregated, Dollar-denominated account entitled "UBOC Control -
Pacific Ethanol Holding Co. LLC Brawley Insurance and Condemnation Proceeds
Account", Account No. 4430003416 (the "Brawley Insurance and Condemnation
Proceeds Account");
 
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(p) a special, segregated, Dollar-denominated account entitled "UBOC Control -
Pacific Ethanol Holding Co. LLC Burley Insurance and Condemnation Proceeds
Account", Account No. 4430003424 (the "Burley Insurance and Condemnation
Proceeds Account");
 
(q) a special, segregated, Dollar-denominated account entitled "UBOC Control -
Pacific Ethanol Holding Co. LLC Extraordinary Proceeds Account", Account
No. 4430003432 (the "Extraordinary Proceeds Account");
 
(r) a special, segregated, Dollar-denominated account entitled "UBOC Control -
Pacific Ethanol Holding Co. LLC Madera Warranty Account", Account No. 4430003440
(the "Madera Warranty Account");
 
(s) a special, segregated, Dollar-denominated account entitled "UBOC Control -
Pacific Ethanol Holding Co. LLC Boardman Warranty Account", Account
No. 4430003459 (the "Boardman Warranty Account");
 
(t) a special, segregated, Dollar-denominated account entitled "UBOC Control -
Pacific Ethanol Holding Co. LLC Stockton Warranty Account", Account
No. 4430003467 (the "Stockton Warranty Account");
 
(u) a special, segregated, Dollar-denominated account entitled "UBOC Control -
Pacific Ethanol Holding Co. LLC Brawley Warranty Account", Account
No. 4430003475 (the "Brawley Warranty Account"); and
 
(v) a special, segregated, Dollar-denominated account entitled "UBOC Control -
Pacific Ethanol Holding Co. LLC Burley Warranty Account", Account No. 4430003483
(the "Burley Warranty Account").
 
Section 8.02 Deposits into and Withdrawals from Project Accounts.  (a) Amounts
shall be deposited into and withdrawn from the Project Accounts in strict
accordance with this Article VIII.
 
(b) The Accounts Bank will only be required to transfer funds hereunder on a
"same day" basis if it has received written notice of such proposed transfer,
together with all certificates, notices, directions and other documents required
under this Agreement to be delivered to the Accounts Bank relating thereto, not
later than 12:00 noon New York City time on the Business Day of such transfer
and, if such notice or any such related document is received by the Accounts
Bank after such time, such transfer will be undertaken prior to 12:00 noon New
York City time on the next Business Day succeeding the date of receipt by
Accounts Bank of all such documentation.
 
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(c) If any transfer, withdrawal, deposit, investment or payment of any funds by
the Accounts Bank or any other action to be taken by the Accounts Bank under
this Agreement is to be made or taken on a day other than a Business Day, such
transfer, withdrawal, deposit, investment, payment or other action will be made
or taken on the next succeeding Business Day.
 
(d) Any instruction, direction, notice, certificate, request or requisition
given to the Accounts Bank by any Borrower with respect to the transfer,
withdrawal, deposit, investment or payment of any funds under this Agreement or
with respect to any other obligations to be performed by the Accounts Bank under
this Agreement (i) must be in writing and signed by an Authorized Officer of the
Borrowers' Agent, (ii) in referencing any of the Project Accounts, must refer to
the specific Project Account name and number, (iii) shall constitute a
representation by the Borrowers that all conditions set forth in this Agreement
for such withdrawal have been satisfied, whether or not those conditions are
explicitly stated to be so satisfied and (iv) shall be copied to the
Administrative Agent and the Collateral Agent.  Notwithstanding anything
contained in this Agreement or any other Financing Document to the contrary, the
Accounts Bank may rely and shall be protected in acting or refraining from
acting upon any instruction, direction, notice, certificate, request or
requisition of Borrowers' Agent, the Administrative Agent or the Collateral
Agent.
 
(e) None of the Project Accounts shall go into overdraft, and the Accounts Bank
shall not comply with any request or direction to the extent that it would cause
any of the Project Accounts to do so.
 
(f) Each Borrower hereby acknowledges that it has (or will, prior to the initial
Funding for the applicable Plant) irrevocably instructed each Project Party, and
agrees that it shall so instruct each future Project Party, to make all payments
due and payable to any Borrower under any Project Document, directly to the
Accounts Bank for deposit in, or to be credited in the manner set forth in this
Article VIII.  Each Borrower further agrees that it shall (or will, prior to the
initial funding for the applicable Plant) irrevocably instruct each other Person
from whom such Borrower is entitled to receive Cash Flow, Insurance Proceeds and
Condemnation Proceeds, to make all payments due and payable to any Borrower from
such Person directly to the Accounts Bank for deposit, and to be credited, in
the manner set forth in this Article VIII.
 
(g) The Accounts Bank shall not be charged with knowledge of any Notice of
Suspension, Default or Event of Default unless the Accounts Bank has received
such Notice of Suspension or other written notice of such Default or Event of
Default from the Administrative Agent, the Collateral Agent or an Authorized
Officer of the Borrowers' Agent or any Borrower.  The Accounts Bank shall not be
charged with the knowledge that the Conversion Date has occurred unless it has
received written notice thereof from the Administrative Agent.
 
(h) The Accounts Bank shall not be charged with the knowledge that any transfer
or withdrawal from any Project Account would result in the occurrence of a
Default or Event of Default, unless it has received written notice thereof from
the Administrative Agent, the Collateral Agent or an Authorized Officer of the
Borrowers' Agent or any Borrower.
 
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(i) Notwithstanding anything contained in this Agreement or any other Financing
Document to the contrary, the Accounts Bank shall have no obligation to (i) make
any payment, transfer or withdrawal from any Project Account until it has
received written direction to make such payment, transfer or withdrawal from the
Collateral Agent, the Administrative Agent or, if this Agreement explicitly
provides that any such direction may be made by the Borrowers' Agent, the
Borrowers' Agent or (ii) determine whether any payment, transfer or withdrawal
from any Project Account made in accordance with any written direction from the
Collateral Agent, the Administrative Agent or the Borrowers' Agent complies with
the terms of this Agreement.  The Accounts Bank shall have no liability for, nor
any responsibility or obligation to confirm, the use or application by any
Borrower, Borrowers' Agent, Administrative Agent, Collateral Agent or any other
recipient of amounts withdrawn or transferred from any Project Account.
 
Section 8.03 Escrow Account.  (a) On the date of the Tranche B Escrow
Disbursement and on any Tranche Conversion Date, the Administrative Agent shall
cause all proceeds of the Tranche B Construction Loans received by the
Administrative Agent from the Tranche B Lenders to be deposited in or credited
to the Escrow Account.
 
(b) Unless a Notice of Suspension is in effect or a Default or Event of Default
would occur after giving effect to any application of funds contemplated hereby,
the Administrative Agent shall, on each Funding Date and subject to the
satisfaction of the conditions set forth in Section 6.02 (Conditions to Madera
Funding), Section 6.03 (Conditions to Boardman Funding), Section 6.04
(Conditions to First Funding for Each Greenfield Plant), Section 6.05
(Conditions to All Greenfield Plant Construction Loan Fundings) and Section 6.08
(Conditions to All Fundings), as applicable, instruct the Accounts Bank in
writing to release from the Escrow Account and transfer to the Debt Service
Reserve Account, the Construction Holding Account or any other Construction
Account, as applicable, on such Funding Date, the aggregate amount of Tranche B
Construction Loans to be disbursed on such Funding Date, as requested by the
Borrowers in the relevant Funding Notice; provided, that in the case of any
Funding of In-Progress Plant 2 Construction Loans or Greenfield Plant 1
Construction Loans, all available amounts on deposit in or standing to the
credit of the Escrow Account shall be released from the Escrow Account prior to
any Funding of In-Progress Plant 2 Construction Loans or Greenfield Plant 1
Construction Loans from Tranche A Construction Loans.
 
(c) If at any time any outstanding Construction Loan Commitments and Term Loan
Commitments are terminated or reduced in accordance with any of
Sections 2.08(c), (d) , (i) or (k) (Termination or Reduction of Commitments),
the Administrative Agent shall instruct the Accounts Bank in writing to release
from the Escrow Account the amount required to be so released in accordance with
such Sections to reimburse to the Tranche B Lenders such amounts pro rata in
accordance with their respective Commitment Percentages.
 
(d) On the Conversion Date, at the written instruction of the Administrative
Agent, any amounts on deposit in or standing to the credit of the Escrow Account
shall be released and reimbursed to the Tranche B Lenders pro rata in accordance
with their respective Commitment Percentages.
 
Section 8.04 Construction Holding Account.  (a) The Borrowers (or, with respect
to Loan proceeds, the Administrative Agent) shall cause the following amounts to
be paid into the Construction Holding Account:
 
(i) 
all amounts required to be deposited into the Construction Holding Account
pursuant to Section 8.03(b) (Escrow Account);

 
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(ii) 
all proceeds of the Greenfield Plant Top-Up Fundings; and

 
(iii) 
all amounts required to be deposited into the Construction Holding Account
pursuant to Section 4.01 (Acceleration of Senior Debt Obligations) of the
Sponsor Support Agreement.

 
(b) Unless a Notice of Suspension is in effect or a Default or Event of Default
would occur after giving effect to any application of funds contemplated hereby,
the Borrowers may direct the transfer or withdrawal of funds standing to the
credit of the Construction Holding Account to the Stockton Construction Account,
the Burley Construction Account and/or the Brawley Construction Account to be
applied towards Required Equity Contributions and/or to pay Project Costs that
are or will become due and payable during the immediately succeeding calendar
month strictly in accordance with the relevant Construction Budget by delivering
a Construction Holding Withdrawal Certificate to the Accounts Bank (with a copy
to the Administrative Agent and the Independent Engineer).
 
(c) On the Conversion Date, all amounts on deposit in or standing to the credit
of the Construction Holding Account shall be withdrawn at the written
instruction of the Borrowers' Agent or the Administrative Agent and applied by
the Administrative Agent in accordance with Section 2.06(e) (Funding of Loans)
and the final Construction Loan Funding Notice (a copy of which shall be
delivered to the Accounts Bank).
 
Section 8.05 Stockton Construction Account.  (a) From and after the initial
Funding Date for the Stockton Plant and until (and including) the Conversion
Date, the Borrowers (or, with respect to Loan proceeds, the Administrative
Agent) shall cause the following amounts to be paid into the Stockton
Construction Account:
 
(i) 
all amounts required to be deposited into the Stockton Construction Account
pursuant to Section 8.03(b) (Escrow Account);

 
(ii) 
all amounts required to be deposited into the Stockton Construction Account
pursuant to Section 8.04(b) (Construction Holding Account);

 
(iii) 
all proceeds of the Construction Loans for the Stockton Plant (except for
proceeds of Fundings of any Excess Construction Loan Commitment with respect to
the Stockton Plant, any Sponsor Support Reimbursement Fundings, or any Fundings
applied directly to the payment of Debt Service or as otherwise applied on the
Conversion Date in accordance with Section 2.06(e) (Funding of Loans));

 
(iv) 
all proceeds of Working Capital Loans for start-up costs for the Stockton Plant;

 
(v) 
until the Conversion Date, all equity contributions received by Stockton
(including the Required Equity Contribution for the Stockton Plant);

 
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(vi) 
all proceeds of any Stockton Performance Bond;

 
(vii) 
all damages payable under any Stockton Construction Contract (other than
performance liquidated damages permitted to be paid to Pacific Ethanol in
accordance with Section 4.02(d) (Adjustments to Warranty Funding Cap and Sponsor
Funding Cap) of the Sponsor Support Agreement or in connection with any Buy-Down
L.D. Reimbursement);

 
(viii) 
all amounts required to be deposited into the Stockton Construction Account
pursuant to Section 8.08(b)(x) (Revenue Account); and

 
(ix) 
all amounts required to be deposited into the Stockton Construction Account
pursuant to Section 2.04 (Sponsor's Deficiency Funding Obligation) of the
Sponsor Support Agreement.

 
(b) Prior to the date of the first Funding of Stockton Construction Loans, the
Borrowers may direct the transfer or withdrawal of funds standing to the credit
of the Stockton Construction Account to pay Stockton Project Costs by delivering
a Stockton Construction Withdrawal Certificate to the Accounts Bank (with a copy
to the Administrative Agent and the Independent Engineer).
 
(c) From and after the date of the first Funding of Stockton Construction Loans,
unless a Notice of Suspension is in effect or a Default or Event of Default
would occur after giving effect to any application of funds contemplated hereby,
the Borrowers may direct the transfer or withdrawal of funds standing to the
credit of the Stockton Construction Account to pay Stockton Project Costs then
due and owing strictly in accordance with the Stockton Construction Budget by
delivering a Stockton Construction Withdrawal Certificate to the Accounts Bank
(with a copy to the Administrative Agent and the Independent Engineer) which, in
the case of any Loan proceeds, shall be for application strictly in accordance
with the relevant Funding Notice.  All payments from the Stockton Construction
Account shall be made by the Accounts Bank pursuant to instructions set forth in
the relevant Stockton Construction Withdrawal Certificate directly to the
payee.  In the event that the Borrowers fail to deliver such a Stockton
Construction Withdrawal Certificate, the Administrative Agent is hereby
authorized to direct, in writing, the Accounts Bank to transfer or withdraw the
amounts necessary to pay Stockton Project Costs that are, from time to time, due
and payable.
 
(d) On the Conversion Date, all amounts on deposit in or standing to the credit
of the Stockton Construction Account shall be withdrawn and such account shall
be terminated and closed at the written instruction of the Borrowers' Agent or
the Administrative Agent and such amounts shall be applied by the Administrative
Agent in accordance with Section 2.06(e) (Funding of Loans) and the final
Construction Loan Funding Notice (a copy of which shall be delivered to the
Accounts Bank).
 
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Section 8.06 Brawley Construction Account.  (a)  From and after the initial
Funding Date for the Brawley Plant and until (and including) the Conversion
Date, the Borrowers shall cause the following amounts to be paid into the
Brawley Construction Account:
 
(i) 
all amounts required to be deposited into the Brawley Construction Account
pursuant to Section 8.03(b) (Escrow Account);

 
(ii) 
all amounts required to be deposited into the Brawley Construction Account
pursuant to Section 8.04(b) (Construction Holding Account);

 
(iii) 
all proceeds of the Construction Loans for the Brawley Plant (except for
proceeds of Fundings of any Excess Construction Loan Commitment with respect to
the Brawley Plant, any Sponsor Support Reimbursement Fundings, any Fundings
applied directly to the payment of Debt Service or as otherwise applied on the
Conversion Date in accordance with Section 2.06(e) (Funding of Loans));

 
(iv) 
all proceeds of Working Capital Loans for start-up costs for the Brawley Plant;

 
(v) 
until the Conversion Date, all equity contributions received by Brawley
(including the Required Equity Contribution for the Brawley Plant);

 
(vi) 
all proceeds of any Brawley Performance Bond;

 
(vii) 
all damages payable under the Brawley Construction Contracts (other than
performance liquidated damages permitted to be paid to Pacific Ethanol in
accordance with Section 4.02(d) (Adjustments to Warranty Funding Cap and Sponsor
Funding Cap) of the Sponsor Support Agreement or in connection with any Buy-Down
L.D. Reimbursement);

 
(viii) 
all amounts required to be deposited into the Brawley Construction Account
pursuant to Section 8.08(b)(x) (Revenue Account); and

 
(ix) 
all amounts required to be deposited into the Brawley Construction Account
pursuant to Section 2.04 (Sponsor's Deficiency Funding Obligation) of the
Sponsor Support Agreement.

 
(b) Prior to the date of the first Funding of Brawley Construction Loans, the
Borrowers may direct the transfer or withdrawal of funds standing to the credit
of the Brawley Construction Account to pay Brawley Project Costs by delivering a
Brawley Construction Withdrawal Certificate to the Accounts Bank (with a copy to
the Administrative Agent and the Independent Engineer).
 
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(c) From and after the date of the first Funding of Brawley Construction Loans,
unless a Notice of Suspension is in effect or a Default or Event of Default
would occur after giving effect to any application of funds contemplated hereby,
the Borrowers may direct the transfer or withdrawal of funds standing to the
credit of the Brawley Construction Account to pay Brawley Project Costs then due
and owing strictly in accordance with the Brawley Construction Budget by
delivering a Brawley Construction Withdrawal Certificate to the Accounts Bank
(with a copy to the Administrative Agent and the Independent Engineer) which, in
the case of any Loan proceeds, shall be for application strictly in accordance
with the relevant Funding Notice.  All payments from the Brawley Construction
Account shall be made by the Accounts Bank pursuant to instructions set forth in
the relevant Brawley Construction Withdrawal Certificate directly to the
payee.  In the event that the Borrowers fail to deliver such a Brawley
Construction Withdrawal Certificate, the Administrative Agent is hereby
authorized to direct, in writing, the Accounts Bank to transfer or withdraw the
amounts necessary to pay Brawley Project Costs that are, from time to time, due
and payable.
 
(d) On the Conversion Date, all amounts on deposit in or standing to the credit
of the Brawley Construction Account shall be withdrawn and such account shall be
terminated and closed at the written instruction of the Borrowers' Agent or the
Administrative Agent and such amounts shall be applied by the Administrative
Agent in accordance with Section 2.06(e) (Funding of Loans) and the final
Construction Loan Funding Notice (a copy of which shall be delivered to the
Accounts Bank).
 
Section 8.07 Burley Construction Account.  (a) From and after the initial
Funding Date for the Burley Plant and until (and including) the Conversion Date,
the Borrowers shall cause the following amounts to be paid into the Burley
Construction Account:
 
(i) 
all amounts required to be deposited into the Burley Construction Account
pursuant to Section 8.03(b) (Escrow Account);

 
(ii) 
all amounts required to be deposited into the Burley Construction Account
pursuant to Section 8.04(b) (Construction Holding Account);

 
(iii) 
all proceeds of the Construction Loans for the Burley Plant (except for proceeds
of Fundings of any Excess Construction Loan Commitment with respect to the
Burley Plant, any Sponsor Support Reimbursement Fundings, any Fundings applied
directly to the payment of Debt Service or as otherwise applied on the
Conversion Date in accordance with Section 2.06(e) (Funding of Loans));

 
(iv) 
all proceeds of Working Capital Loans for start-up costs for the Brawley Plant;

 
(v) 
until the Conversion Date, all equity contributions received by Burley
(including the Required Equity Contribution for the Burley Plant);

 
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(vi) 
all proceeds of any Burley Performance Bond;

 
(vii) 
all damages payable under the Burley Construction Contracts (other than
performance liquidated damages permitted to be paid to Pacific Ethanol in
accordance with Section 4.02(d) (Adjustments to Warranty Funding Cap and Sponsor
Funding Cap) of the Sponsor Support Agreement or in connection with any Buy-Down
L.D. Reimbursement);

 
(viii) 
all amounts required to be deposited into the Burley Construction Account
pursuant to Section 8.08(b)(x) (Revenue Account); and

 
(ix) 
all amounts required to be deposited into the Burley Construction Account
pursuant to Section 2.04 (Sponsor's Deficiency Funding Obligation) of the
Sponsor Support Agreement.

 
(b) Prior to the date of the first Funding of Burley Construction Loans, the
Borrowers may direct the transfer or withdrawal of funds standing to the credit
of the Burley Construction Account to pay Burley Project Costs by delivering a
Burley Construction Withdrawal Certificate to the Accounts Bank (with a copy to
the Administrative Agent and the Independent Engineer).
 
(c) From and after the date of the first Funding of Burley Construction Loans,
unless a Notice of Suspension is in effect or a Default or Event of Default
would occur after giving effect to any application of funds contemplated hereby,
the Borrowers may direct the transfer or withdrawal of funds standing to the
credit of the Burley Construction Account to pay Burley Project Costs then due
and owing strictly in accordance with the Burley Construction Budget by
delivering a Burley Construction Withdrawal Certificate to the Accounts Bank
(with a copy to the Administrative Agent and the Independent Engineer) which, in
the case of any Loan proceeds, shall be for application strictly in accordance
with the relevant Funding Notice.  All payments from the Burley Construction
Account shall be made by the Accounts Bank pursuant to instructions set forth in
the relevant Burley Construction Withdrawal Certificate directly to the
payee.  In the event that the Borrowers fail to deliver such a Burley
Construction Withdrawal Certificate, the Administrative Agent is hereby
authorized to direct, in writing, the Accounts Bank to transfer or withdraw the
amounts necessary to pay Burley Project Costs that are, from time to time, due
and payable (unless such Burley Project Costs are in dispute).
 
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(d) On the Conversion Date, all amounts on deposit in or standing to the credit
of the Burley Construction Account shall be withdrawn and such account shall be
terminated and closed at the written instruction of the Borrowers' Agent or the
Administrative Agent and such amounts shall be applied by the Administrative
Agent in accordance with Section 2.06(e) (Funding of Loans) and the final
Construction Loan Funding Notice.
 
Section 8.08 Revenue Account.  (a) From and after the initial Construction Loan
Funding Date, in the case of Pacific Holding and the Borrower whose Plant is
being funded (and for such Plant), and from and after the initial Funding Date
for each other Borrower and such Borrower's Plant, the applicable Borrower shall
cause the following amounts to be paid into the Revenue Account:
 
(i) 
all Cash Flow;

 
(ii) 
except as set forth in Section 8.15(a)(i) (Extraordinary Proceeds Account), all
proceeds from the sale or disposition of any assets of any Borrower;

 
(iii) 
any other income received by or on behalf of any Borrower that is not required
to be deposited in or credited to another Project Account, or applied directly
to the Obligations, in accordance with this Agreement; and

 
(iv) 
amounts transferred to the Revenue Account pursuant to Section 2.06(e) (Funding
of Loans), Section 8.11(c) (Working Capital Reserve Account), Section 8.12(d)
(Debt Service Reserve Account) and Sections 8.15(b)(i) and (c)(i) (Extraordinary
Proceeds Account).

 
(b) Until the Conversion Date, unless a Notice of Suspension is in effect or a
Default or Event of Default would occur after giving effect to any application
of funds contemplated hereby, upon receipt of a Revenue Account Withdrawal
Certificate duly executed by a Financial Officer of the Borrowers' Agent, the
Accounts Bank shall, in accordance with the directions set forth therein, cause
funds held in the Revenue Account to be withdrawn or transferred to pay the
following amounts on the dates and at the priorities indicated below:
 
(i) 
first, on each Monthly Date, (A) to Pacific Ethanol as payment of any Sponsor
Support Reimbursements then due and owing in accordance with the Sponsor Support
Agreement and (B) to the Operating Account, the amount certified by the
Borrowers' Agent in such Revenue Account Withdrawal Certificate as required to
pay Operation and Maintenance Expenses that, in each such case, are or will
become due and payable during the immediately succeeding calendar month;
provided, that the amount of such transfer of funds pursuant to clause (B)
(excluding any amounts transferred to the Operating Account to cover the cost of
corn, natural gas, electricity, insurance premiums and Borrower Taxes) does not
exceed the Permitted Operating Budget Deviation Levels;

 
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(ii) 
second, on each Monthly Date, to the Maintenance Capital Expense Account, in the
amount certified by the Borrowers' Agent in such Revenue Account Withdrawal
Certificate as necessary to pay Maintenance Capital Expenses that, in each such
case, are or will become due and payable during the immediately succeeding
calendar month; provided, that the amount of such transfer of funds does not
exceed the Permitted Operating Budget Deviation Levels;

 
(iii) 
third, on any date when due and payable, to the Administrative Agent, for the
account of the Senior Secured Parties, in the amount certified by the Borrowers'
Agent in such Revenue Account Withdrawal Certificate or otherwise instructed in
writing to the Accounts Bank by the Administrative Agent as necessary to pay
Fees, costs and expenses then due and payable under the Financing Documents;

 
(iv) 
fourth, on any date when due and payable, to the Administrative Agent, for the
account of the Senior Secured Parties, in the amount certified by the Borrowers'
Agent in such Revenue Account Withdrawal Certificate or otherwise instructed in
writing to the Accounts Bank by the Administrative Agent as necessary to pay any
interest with then due and payable under the Financing Documents and any fees,
expenses or Net Swap Payments owing to any Interest Rate Protection Provider;

 
(v) 
fifth, on each Monthly Date when due and payable, to the Administrative Agent,
for the account of the Interest Rate Protection Providers, on a pro rata basis,
the amount certified by the Borrowers' Agent in such Revenue Account Withdrawal
Certificate or otherwise instructed in writing to the Accounts Bank by the
Administrative Agent as payments of Swap Termination Value then due and payable
by the Borrowers with respect to any Interest Rate Protection Agreements;

 
(vi) 
sixth, on each Monthly Date, to the Working Capital Reserve Account, in the
amount certified by the Borrowers' Agent in such Revenue Account Withdrawal
Certificate or otherwise instructed in writing to the Accounts Bank by the
Administrative Agent as equal to the difference between (A) the Working Capital
Reserve Required Amount and (B) the funds on deposit in or standing to the
credit of the Working Capital Reserve Account on such Monthly Date;

 
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(vii) 
seventh, on any date when required pursuant to Section 3.10(c) (Mandatory
Prepayment), or otherwise at the option of the Borrowers, to the Administrative
Agent in the amount certified by the Borrowers' Agent in such Revenue Account
Withdrawal Certificate or otherwise instructed in writing to the Accounts Bank
by the Administrative Agent, for application as a prepayment of the Working
Capital Loans;

 
(viii) 
eighth, provided that no Default or Event of Default has occurred and is
continuing, on each Quarterly Payment Date, in the amount certified by an
Authorized Officer of the Borrowers' Agent in such Revenue Account Withdrawal
Certificate to the Persons or accounts specified in such Revenue Account
Withdrawal Certificate, as Current Priority Subordinated Interest for the
Quarterly Period ending on such Quarterly Payment Date in an amount not to
exceed, on any such Quarterly Payment Date, one million Dollars ($1,000,000);

 
(ix) 
ninth, provided that no Default or Event of Default has occurred and is
continuing, on each Quarterly Payment Date, in an amount certified by the
Borrowers' Agent in such Revenue Account Withdrawal Certificate, to the Persons
or accounts specified in such Revenue Account Withdrawal Certificate (including,
if required to be paid directly to any taxing authority, to such taxing
authority), for payment of any Permitted Tax Distribution; and

 
(x) 
tenth, on each Monthly Date, to any Construction Account, the amount certified
by the Borrowers' Agent in such Revenue Account Withdrawal Certificate as
required to pay Project Costs that, in each such case, are or will become due
and payable during the immediately succeeding calendar month and with respect to
which funds are not available in such Construction Account.

 
(c) Commencing on the Conversion Date, unless a Notice of Suspension is in
effect or a Default or Event of Default would occur after giving effect to any
application of funds contemplated hereby, upon receipt of a Revenue Account
Withdrawal Certificate duly executed by a Financial Officer of the Borrowers'
Agent, the Accounts Bank shall, in accordance with the directions set forth
therein, cause funds held in the Revenue Account to be withdrawn or transferred
to pay the following amounts on the dates and at the priorities indicated below:
 
(i) 
first, on each Monthly Date, (A) to Pacific Ethanol, as payment of any Sponsor
Support Reimbursements then due and owing in accordance with the Sponsor Support
Agreement and (B) to the Operating Account, the amount certified by the
Borrowers' Agent in such Revenue Account Withdrawal Certificate as required to
pay Operation and Maintenance Expenses that, in each such case, are or will
become due and payable during the immediately succeeding calendar month;
provided, that the amount of such transfer of funds pursuant to clause (B)
(excluding any amounts transferred to the Operating Account to cover the cost of
corn, natural gas, electricity, insurance premiums and Borrower Taxes) does not
exceed the Permitted Operating Budget Deviation Levels;

 
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(ii) 
second, on each Monthly Date, to the Maintenance Capital Expense Account, in the
amount certified by the Borrowers' Agent in such Revenue Account Withdrawal
Certificate as necessary to pay Maintenance Capital Expenses that, in each such
case, are or will become due and payable during the immediately succeeding
calendar month; provided, that the amount of such transfer of funds does not
exceed the Permitted Operating Budget Deviation Levels;

 
(iii) 
third, on any date when due and payable, to the Administrative Agent, for the
account of the Senior Secured Parties, in the amount certified by the Borrowers'
Agent in such Revenue Account Withdrawal Certificate or otherwise instructed in
writing to the Accounts Bank by the Administrative Agent as necessary to pay
Fees, costs and expenses then due and payable under the Financing Documents;

 
(iv) 
fourth, on any date when due and payable, to the Administrative Agent, for the
account of the Senior Secured Parties, in the amount certified by the Borrowers'
Agent in such Revenue Account Withdrawal Certificate or otherwise instructed in
writing to the Accounts Bank by the Administrative Agent as necessary to pay any
interest then due and payable under the Financing Documents and any fees,
expenses or Net Swap Payments owing to any Interest Rate Protection Provider;

 
(v) 
fifth, on any date when required pursuant to Section 3.10(c) (Mandatory
Prepayment), to the Administrative Agent in the amount certified by the
Borrowers' Agent in such Revenue Account Withdrawal Certificate or otherwise
instructed in writing to the Accounts Bank by the Administrative Agent, for
application as a prepayment of the Working Capital Loans;

 
(vi) 
sixth, on each Monthly Date, to pay, to the Administrative Agent, for the
account of the Senior Secured Parties, on a pro rata basis, the amount certified
by the Borrowers' Agent in such Revenue Account Withdrawal Certificate or
otherwise instructed in writing to the Accounts Bank by the Administrative Agent
as (A) the principal amounts due and payable with respect to the Term Loans and
(B) the payments of Swap Termination Value then due and payable by the Borrowers
with respect to any Interest Rate Protection Agreements;

 
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(vii) 
seventh, on each Monthly Date, to the Working Capital Reserve Account, in the
amount certified by the Borrowers' Agent in such Revenue Account Withdrawal
Certificate or otherwise instructed in writing to the Accounts Bank by the
Administrative Agent as equal to the difference between (A) the Working Capital
Reserve Required Amount and (B) the funds on deposit in or standing to the
credit of the Working Capital Reserve Account on such Monthly Date;

 
(viii) 
eighth, on any Monthly Date and on the Working Capital Maturity Date, to pay to
the Administrative Agent, for the account of the Working Capital Lenders, the
amount certified by the Borrowers' Agent in such Revenue Account Withdrawal
Certificate or otherwise instructed in writing to the Accounts Bank by the
Administrative Agent as the aggregate principal amount due and payable with
respect to the Working Capital Loans, or otherwise at the option of the
Borrowers, to repay principal amounts with respect to the Working Capital Loans;

 
(ix) 
ninth, on each Monthly Date, to the Debt Service Reserve Account, in the amount
certified by the Borrowers' Agent in such Revenue Account Withdrawal Certificate
or otherwise instructed in writing to the Accounts Bank by the Administrative
Agent as equal to the difference between (A) the Debt Service Reserve
Requirement and (B) the funds on deposit in or standing to the credit of the
Debt Service Reserve Account (including the Stated Amount of any Debt Service
Reserve Letter of Credit) on such Monthly Date;

 
(x) 
tenth, provided that no Default or Event of Default has occurred and is
continuing, on each Quarterly Payment Date, in the amount certified by an
Authorized Officer of the Borrowers' Agent in such Revenue Account Withdrawal
Certificate to the Persons or accounts specified in such Revenue Account
Withdrawal Certificate, as Current Priority Subordinated Interest for the
Quarterly Period ending on such Quarterly Payment Date in an amount not to
exceed on any such Quarterly Payment Date, one million Dollars ($1,000,000);

 
(xi) 
eleventh, on each Quarterly Payment Date, to the Administrative Agent in the
amount certified by the Borrowers in such Revenue Account Withdrawal Certificate
or otherwise instructed in writing to the Accounts Bank by the Administrative
Agent, for application as a prepayment of the Term Loans in accordance with
Section 3.10 (Mandatory Prepayment) in an amount equal to fifty percent (50%) of
the cash remaining in the Revenue Account after the transfer required pursuant
to priority tenth, if any;

 
(xii) 
twelfth, provided that no Default or Event of Default has occurred and is
continuing, on each Quarterly Payment Date, in an amount certified by the
Borrowers' Agent in such Revenue Account Withdrawal Certificate to the Persons
or accounts specified in such Revenue Account Withdrawal Certificate (including,
if required to be paid directly to any taxing authority, to such taxing
authority) for payment of any Permitted Tax Distribution;

 
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(xiii) 
thirteenth, on each Quarterly Payment Date, to the Administrative Agent, in the
amount certified by the Borrowers in such Revenue Account Withdrawal Certificate
or otherwise instructed in writing to the Accounts Bank by the Administrative
Agent, for application as a prepayment of the Term Loans in accordance with
Section 3.10 (Mandatory Prepayment) in an amount equal to the greater of (x) an
amount such that after such prepayment the then-outstanding principal amount of
the Term Loans is equal to the Target Balance Amount for such Quarterly Payment
Date and (y) on and after the second anniversary of the Conversion Date,
twenty-five percent (25%) of the cash remaining in the Revenue Account after the
transfer required pursuant to priority tenth, if any (in each case, to the
extent funds are available at this priority thirteenth);

 
(xiv) 
fourteenth, on each Quarterly Payment Date (A) if the Historical Debt Service
Coverage Ratio as of such Quarterly Payment Date is less than 1.5:1, to the
Administrative Agent, all amounts on deposit in or standing to the credit of the
Revenue Account after the transfer required to be made pursuant to priority
thirteenth, for application as a prepayment of the Term Loans in accordance with
Section 3.10 (Mandatory Prepayment) or (B) if the Historical Debt Service
Coverage Ratio as of such Quarterly Payment Date is greater than or equal to
1.5:1 and the Prospective Debt Service Coverage Ratio as of such Quarterly
Payment Date is less than 1.5:1, as certified by the Borrowers' Agent in such
Revenue Account Withdrawal Certificate or instructed in writing to the Accounts
Bank by the Administrative Agent, to the Prepayment Holding Account, all amounts
on deposit in or standing to the credit of the Revenue Account after the
transfer required pursuant to priority thirteenth; and

 
(xv) 
fifteenth, subject to the satisfaction of the conditions set forth in
Section 7.02(s) (Negative Covenants - Restricted Payments), (A) in the amount
certified in the Restricted Payment Certificate by an Authorized Officer of the
Borrowers' Agent, to the Persons or accounts specified in the Restricted Payment
Certificate, for the payment of amounts then due and owing with respect to the
Subordinated Loans and (B) thereafter, to the Pledgor in the amount certified by
the Borrowers in a Restricted Payment Certificate by an Authorized Officer of
the Borrowers' Agent and confirmed by the Administrative Agent in writing.

 
Section 8.09 Operating Account.  (a) Funds shall be deposited into the Operating
Account pursuant to Sections 8.08(b)(i) and (c)(i) (Revenue Account).
 
(b) Unless a Notice of Suspension is in effect or a Default or Event of Default
would occur after giving effect to any application of funds contemplated hereby,
and so long as adequate funds are then available in the Operating Account, the
Borrowers:
 
(i) 
may, by written instruction to the Accounts Bank (with a copy to the Collateral
Agent), withdraw or transfer funds from the Operating Account from time to time
as may be necessary to pay directly any amounts owed by the Borrowers for
Operation and Maintenance Expenses; and

 
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(ii) 
may direct the transfer of funds to the Local Accounts from time to time, by
delivery of an Operating Account Withdrawal Certificate to the Accounts Bank;
provided, that the funds on deposit in and standing to the credit of all Local
Accounts with respect to which a Blocked Account Agreement has been executed and
is in full force and effect do not exceed, in the aggregate at any one time, two
hundred thousand Dollars ($200,000) for each Plant that has achieved its
Commercial Operation Date, as certified by the Borrowers' Agent in such
Operating Account Withdrawal Certificate.

 
Section 8.10 Maintenance Capital Expense Account.  (a) Funds shall be deposited
into the Maintenance Capital Expense Account pursuant to Sections 8.08(b)(ii)
and (c)(ii) (Revenue Account).
 
(b) Unless a Notice of Suspension is in effect or a Default or Event of Default
would occur after giving effect to any application of funds contemplated hereby,
and so long as adequate funds are then available in the Maintenance Capital
Expense Account, the Borrowers may, by written instruction to the Accounts Bank
(with a copy to the Collateral Agent), withdraw or transfer funds from the
Maintenance Capital Expense Account from time to time as may be necessary to pay
directly any amounts owed by the Borrowers for Maintenance Capital Expenses in
accordance with the most recent Revenue Account Withdrawal Certificate.
 
Section 8.11 Working Capital Reserve Account.  (a) Funds shall be deposited into
the Working Capital Reserve Account in accordance with Sections 8.08(b)(vi) and
(c)(viii) (Revenue Account), Section 3.09(d)(iii)(B) (Optional Prepayments) and
Section 3.10(e) (Mandatory Prepayments).  Amounts deposited into the Working
Capital Reserve Account pursuant to priority item second of
Sections 3.10(d)(e)(i) and (ii) shall be deposited into a sub-account (the
"Working Capital LC Collateral Sub-Account").
 
(b) Unless a Notice of Suspension is in effect or a Default or Event of Default
would occur after giving effect to any application of funds contemplated hereby,
the Borrowers may direct, by delivery of a Working Capital Transfer Certificate
to the Accounts Bank (with a copy to the Administrative Agent), the transfer or
withdrawal of amounts standing to the credit of the Working Capital Reserve
Account (other than amounts standing to the credit of the Working Capital LC
Collateral Sub-Account) to pay directly:
 
(i) 
amounts due and owing for Operation and Maintenance Expenses in accordance with
the Operating Budget, but only to the extent that adequate funds are not
available for the payment of such Operation and Maintenance Expenses in the
Operating Account; provided, that the amount of such transfer of funds, when
taken together with the amounts transferred to the Operating Account during such
month pursuant to Section 8.08(b)(i) (Revenue Account) or Section 8.08(c)(i)
(Revenue Account) (excluding any amounts transferred to the Operating Account to
cover the cost of corn, natural gas, electricity, insurance premiums and
Borrower Taxes), does not exceed the Permitted Operating Budget Deviation
Levels;

 
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(ii) 
amounts due and owing for Maintenance Capital Expenses in accordance with the
Operating Budget, but only to the extent that adequate funds are not available
for the payment of such Maintenance Capital Expenses in the Maintenance Capital
Expense Account; provided, that the amount of such transfer of funds, when taken
together with the amounts transferred to the Maintenance Capital Expense Account
during such month pursuant to Section 8.08(b)(ii) (Revenue Account) or
Section 8.08(c)(ii) (Revenue Account), does not exceed the Permitted Operating
Budget Deviation Levels; and

 
(iii) 
amounts due and owing for start-up costs with respect to the Greenfield Plants.

 
(c) If, on any Quarterly Payment Date, the funds on deposit in or standing to
the credit of the Working Capital Reserve Account (other than amounts standing
to the credit of the Working Capital LC Collateral Sub-Account) are in excess of
the Working Capital Reserve Required Amount, unless a Notice of Suspension is in
effect or a Default or Event of Default would occur after giving effect to such
transfer, the Borrowers may direct, by delivery of a Working Capital Transfer
Certificate to the Accounts Bank (with a copy to the Administrative Agent), the
transfer to the Revenue Account of an amount equal to the difference between
(x) the aggregate total amount of all funds on deposit in or standing to the
credit of the Working Capital Reserve Account and (y) the Working Capital
Reserve Required Amount, as certified by the Borrowers' Agent and confirmed by
the Administrative Agent in such Working Capital Transfer Certificate.
 
(d) Following the funding of the Working Capital LC Collateral Sub-Account, the
Borrowers or the Administrative Agent may direct in writing, in the case of the
Borrowers by delivery of a Working Capital Transfer Certificate to the Accounts
Bank (with a copy to the Administrative Agent), the transfer of amounts standing
to the credit of the Working Capital LC Collateral Sub-Account to pay to the
Administrative Agent, for the account of the Working Capital Lenders, the amount
of such Working Capital Loans then due and payable.
 
(e) If at any time the amounts standing to the credit of the Working Capital LC
Collateral Sub-Account are in excess of the aggregate Maximum Available Amounts
under all Letters of Credit then outstanding, the Borrowers may direct, by
delivery of a Working Capital Transfer Certificate to the Accounts Bank (with a
copy to the Administrative Agent), the transfer to the Working Capital Reserve
Account of an amount equal to the difference between (x) the aggregate total
amount of all funds on deposit in or standing to the credit of the Working
Capital LC Collateral Sub-Account and (y) the aggregate of all such Maximum
Available Amounts, as certified by the Borrowers' Agent.
 
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Section 8.12 Debt Service Reserve Account.  (a) Funds shall be deposited into
the Debt Service Reserve Account:
 
(i) 
on the In-Progress Plant 1 Construction Loan Funding Date, from the Escrow
Account as directed in writing pursuant to Section 8.03(b) (Escrow Account), in
the amount required pursuant to Section 7.01(g) (Affirmative Covenants-Use of
Proceeds) with respect to such Construction Loans to cover the required funding
of fifty percent (50%) of the Debt Service Reserve Requirement;

 
(ii) 
on the In-Progress Plant 2 Construction Loan Funding Date, from the Escrow
Account as directed in writing pursuant to Section 8.03(b) (Escrow Account), and
the proceeds (if any) of In-Progress Plant 2 Tranche A Construction Loans, as
applicable, in the amount required pursuant to Section 7.01(g) (Affirmative
Covenants-Use of Proceeds) with respect to such Construction Loans to cover the
required funding of fifty percent (50%) of the Debt Service Reserve Requirement;

 
(iii) 
on the Conversion Date, pursuant to disbursement priority first as set forth in
Section 2.06(e) (Funding of Loans); and

 
(iv) 
pursuant to Section 8.08(c)(ix) (Revenue Account);

 
provided that, notwithstanding the foregoing, in lieu of cash, the Borrowers may
cause to be delivered to the Accounts Bank one or more Debt Service Reserve
Letters of Credit (each of which shall be accompanied by a Debt Service LC
Waiver Letter), the Stated Amounts of which shall be credited to the Debt
Service Reserve Account.
 
(b) On any date when the amounts available at priorities third through sixth as
set forth in Section 8.08(c) (Revenue Account) are insufficient to pay Debt
Service then due and owing, the Accounts Bank shall (upon written notification
from the Borrowers' Agent or the Administrative Agent setting forth the amount
of such shortfall) withdraw funds from the Debt Service Reserve Account to pay
to the Administrative Agent, for the account of the Senior Secured Parties, the
amount of such shortfall of the Debt Service then due and payable, which funds
shall be applied in the order of priority set forth in priorities third through
sixth of Section 8.08(c) (Revenue Account).  The Accounts Bank shall promptly
notify the Administrative Agent and the Collateral Agent if, at any time, there
are insufficient funds (without taking into account any Debt Service Reserve
Letters of Credit) standing to the credit of the Debt Service Reserve Account to
make the payments required under this Section 8.12(b).
 
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(c) Upon the written instruction of the Administrative Agent, the Collateral
Agent shall make a demand in accordance with the provisions of each Debt Service
Reserve Letter of Credit, drawdown all or a portion of the Stated Amount of any
Debt Service Reserve Letter of Credit that has been delivered in accordance with
this Agreement, and deposit the funds received into the Debt Service Reserve
Account.  The Administrative Agent shall instruct Collateral Agent to make such
demand:
 
(i) 
if amounts are required to be withdrawn from the Debt Service Reserve Account
pursuant to Section 8.12(b), and the amounts to be so withdrawn exceed the
funds, not including the aggregate Stated Amounts of the Debt Service Reserve
Letters of Credit standing to the credit of the Debt Service Reserve Account, in
the amount necessary to make the payments of Debt Service then due and payable;

 
(ii) 
in full, if the commercial bank that issued such Debt Service Reserve Letter of
Credit is no longer an Acceptable Bank; or

 
(iii) 
in full, if (A) no less than thirty (30) days prior to the expiry date of each
such Debt Service Reserve Letter of Credit, the Collateral Agent has not
received notice from the issuing bank that it will extend such expiry date or
renew such Debt Service Reserve Letter of Credit and no substitute or
replacement letter of credit satisfying the requirements of a "Debt Service
Reserve Letter of Credit" has been delivered to the Collateral Agent to replace
the Stated Amount of such expiring Debt Service Reserve Letter of Credit and
(B) excluding the Stated Amount of such Debt Service Reserve Letter of Credit
and the Stated Amount of any other Debt Service Reserve Letter of Credit that
similarly could be drawndown, an amount equal to the Debt Service Reserve
Requirement is not on deposit in or standing to the credit of the Debt Service
Reserve Account on the date of such drawdown.

 
(d) If, on any Quarterly Payment Date, the funds on deposit in or standing to
the credit of the Debt Service Reserve Account (taking into account the Stated
Amounts of any Debt Service Reserve Letters of Credit standing to the credit of
the Debt Service Reserve Account) are in excess of the Debt Service Reserve
Requirement, unless a Notice of Suspension is in effect or a Default or Event of
Default would occur after giving effect to such transfer, the Borrowers may
direct, by delivery of a Debt Service Reserve Release Certificate to the
Accounts Bank (with a copy to the Administrative Agent), the transfer to the
Revenue Account of an amount equal to the difference between (x) the aggregate
total amount of all funds on deposit in or standing to the credit of the Debt
Service Reserve Account (taking into account the Stated Amounts of any Debt
Service Reserve Letters of Credit standing to the credit of the Debt Service
Reserve Account) and (y) the Debt Service Reserve Requirement, as certified by
the Borrowers' Agent and confirmed by the Administrative Agent in such Debt
Service Release Certificate; provided, that if such difference is positive due
to the posting of a Debt Service Reserve Letter of Credit to the Debt Service
Reserve Account to replace or substitute for cash then on deposit, such amount
may be distributed directly to Pacific Ethanol or such other Affiliate of the
Borrowers who provided such Debt Service Reserve Letter of Credit (and such
distribution shall not be treated as a Restricted Payment for purposes of this
Agreement).
 
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Section 8.13 Prepayment Holding Account.  (a) Funds shall be deposited into the
Prepayment Holding Account pursuant to Section 8.08(c)(xiv)(B) (Revenue
Account).
 
(b) The Accounts Bank shall withdraw funds from the Prepayment Holding Account
upon receipt of written instructions from the Borrowers' Agent or the
Administrative Agent in accordance with the terms set forth below.
 
(i) 
If, on any such Quarterly Payment Date, each of the Historical Debt Service
Coverage Ratio and the Prospective Debt Service Coverage Ratio are greater than
or equal to 1.5:1 then, subject to the satisfaction of the conditions set forth
in Section 7.02(s) (Negative Covenants - Restricted Payments), the Borrowers may
submit a Restricted Payment Certificate to the Accounts Bank directing the
transfer of amounts on deposit in and standing to the credit of the Prepayment
Holding Account for Restricted Payments by the Borrowers.

 
(ii) 
If, on any such Quarterly Payment Date, the Historical Debt Service Coverage
Ratio is less than 1.5:1 then all amounts on deposit in and standing to the
credit of the Prepayment Holding Account shall, upon the written instruction of
the Borrowers' Agent or the Administrative Agent, be transferred to the
Administrative Agent for application as a prepayment of the Term Loans in
accordance with Section 3.10 (Mandatory Prepayment).

 
Section 8.14 Insurance and Condemnation Proceeds Accounts.  (a) From and after
the Closing Date, in the case of Pacific Holding, and from and after the initial
Funding Date for each other Borrower and such Borrower's Plant, the applicable
Borrowers shall cause all Insurance Proceeds and all Condemnation Proceeds
payable to each such Borrower, or otherwise relating to the each Plant, to be
deposited in or credited to the Insurance and Condemnation Proceeds Account for
such Plant.
 
(b) The Borrowers shall not make, direct, or request the Accounts Bank to make,
any withdrawals from any Insurance and Condemnation Proceeds Account except as
permitted by this Section 8.14, and provided that no Notice of Suspension has
been delivered that has not been withdrawn and no Default or Event of Default
would occur as a result of such transfer or withdrawal.
 
(c) The Borrowers may apply any Insurance Proceeds and Condemnation Proceeds
deposited into any Insurance and Condemnation Proceeds Account in amounts less
than or equal to two million five hundred thousand Dollars ($2,500,000) arising
from any one claim or any series of claims relating to the same occurrence with
respect to the same Plant directly for the replacement or repair of damaged
assets to which such Insurance Proceeds or Condemnation Proceeds. as the case
may be, relate; provided, that the Borrowers deliver to the Administrative Agent
and the Accounts Bank, no fewer than three (3) Business Days in advance of any
such proposed transfers or withdrawals from such Insurance and Condemnation
Proceeds Account, an Insurance and Condemnation Proceeds Request Certificate
setting forth proposed instructions for such withdrawals or transfers.  A
Financial Officer of the Borrowers' Agent shall certify that each Insurance and
Condemnation Proceeds Request Certificate is being delivered, and the
withdrawals specified therein are being directed, in accordance with this
Agreement and the other Transaction Documents, and shall also certify that the
directed withdrawals or transfers will be used exclusively for repair or
replacement of damaged assets to which such Insurance Proceeds or Condemnation
Proceeds, as the case may be, relate.
 
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(d) Any Insurance Proceeds and Condemnation Proceeds deposited into any
Insurance and Condemnation Proceeds Account in amounts greater than two million
five hundred thousand Dollars ($2,500,000) but less than or equal to fifteen
million Dollars ($15,000,000) arising from any one claim or any series of claims
relating to the same occurrence with respect to the same Plant shall:
 
(i) 
be applied for repair or replacement of damaged assets to which such Insurance
Proceeds or Condemnation Proceeds, as the case may be, relate in accordance with
the Borrowers' direction in an Insurance and Condemnation Proceeds Request
Certificate delivered to the Administrative Agent and the Accounts Bank if,
within sixty (60) days after the occurrence of the Casualty Event or Event of
Taking giving rise to such proceeds, the Borrowers deliver a Restoration or
Replacement Plan to the Administrative Agent and the Independent Engineer with
respect to such Casualty Event or Event of Taking that is based upon, and
accompanied by, each of the following:

 
(A)
a description of the nature and extent of such Casualty Event or Event of
Taking, as the case may be;

 
(B)      
a bona fide assessment (from a contractor reasonably acceptable to the
Independent Engineer) of the estimated cost and time needed to restore or
replace the relevant Plant to substantially the same value and general
performance capability as prior to such event;

 
(C)      
reasonably satisfactory evidence that such Insurance Proceeds or Condemnation
Proceeds, as the case may be, are sufficient to make the necessary restorations
or replacements;

 
(D)     
a certificate of a Financial Officer of the Borrowers' Agent certifying that
(1) all work contemplated to be done under the Restoration or Replacement Plan
can be done within the time periods, if any, required under any Project Document
relating to the relevant Plant; (2) all Governmental Approvals necessary to
perform the work have been obtained (or are reasonably expected to be obtained
without undue delay); and (3) the relevant Plant once repaired/restored will
continue to perform at the levels set forth in the then-current Operating Budget
for such Plant with respect to production volume, yield and utility consumption
(or other levels approved by the Required Lenders);

 
(E)     
the Casualty Event or Event of Taking , as the case may be (including the
non-operation of such Plant during any period of repair or restoration) has not
resulted or would not reasonably be expected to result in a default giving rise
to a termination of, or a materially adverse modification of, one or more of the
Governmental Approvals or Project Documents;

 
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(F)      
after taking into consideration the availability of such Insurance Proceeds or
Condemnation Proceeds, as applicable, and Business Interruption Insurance
Proceeds and any additional documented voluntary equity contributions for the
purpose of covering such costs, there will be adequate amounts available to pay
all ongoing expenses including Debt Service during the period of repair or
restoration;

 
(G)      
construction contractors and vendors of recognized skill, reputation and
creditworthiness and reasonably acceptable to the Administrative Agent have
executed reconstruction contracts, purchase orders or similar arrangements for
the repair, rebuilding or restoration on terms and conditions reasonably
acceptable to the Administrative Agent; and

 
(H)     
a confirmation by the Independent Engineer of its agreement with the matters set
forth in Section 8.14(d)(i)(A)-(G) and its approval of such Restoration or
Replacement Plan; or

 
(ii) 
if (A) the Borrowers do not deliver such Restoration or Replacement Plan and the
accompanying deliveries referred to in Section 8.14(d)(i) within such sixty
(60) day period or (B) after the completion of such Restoration or Replacement
Plan, there are excess Insurance Proceeds or Condemnation Proceeds, as the case
may be, on deposit in or standing to the credit of such Insurance and
Condemnation Proceeds Account, the Accounts Bank shall on the next succeeding
Quarterly Payment Date thereafter, upon the written instruction of the
Borrowers' Agent or the Administrative Agent, transfer to the Administrative
Agent, for the account of the Lenders, an amount equal to such Insurance
Proceeds or Condemnation Proceeds, as the case may be, for mandatory prepayment
of the Loans in accordance with Section 3.10 (Mandatory Prepayments).

 
(e) Any Insurance Proceeds or Condemnation Proceeds deposited into any Insurance
and Condemnation Proceeds Account in amounts greater than fifteen million
Dollars ($15,000,000) arising from any one claim or any series of claims
relating to the same occurrence with respect to the same Plant shall be applied,
at the written instruction of the Administrative Agent, to prepay the Loans or
for repair or replacement of damaged assets, as determined by the Required
Lenders in their sole discretion.
 
Section 8.15 Extraordinary Proceeds Account.  (a) From and after the Closing
Date, in the case of Pacific Holding, and from and after the initial Funding
Date for each other Borrower and such Borrower's Plant, the applicable Borrowers
shall cause (i) all proceeds of asset disposals (other than proceeds from the
sale of Products) that will not be used for replacement in accordance with
Section 7.02(f)(i) (Negative Covenants - Asset Dispositions) and (ii) all
Project Document Termination Payments, in each such case relating to Pacific
Holding or a Plant or Borrower with respect to which a Funding has been made, to
be deposited into the Extraordinary Proceeds Account.
 
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(b) If at any time proceeds of an asset disposal are deposited into the
Extraordinary Proceeds Account, then on any Quarterly Payment Date:
 
(i)       
if such proceeds are in an amount in the aggregate of less than two million five
hundred thousand Dollars ($2,500,000) (taken together with any other proceeds of
asset disposals deposited in the Extraordinary Proceeds Account during the
then-current Fiscal Year) the Borrowers may submit an Extraordinary Proceeds
Release Notice to the Accounts Bank, certified by an Authorized Officer of the
Borrowers' Agent, directing the transfer of such funds to the Revenue Account;
and

 
(ii)       
if such proceeds are in an amount equal to or greater than two million five
hundred thousand Dollars ($2,500,000) (taken together with any other proceeds of
asset disposals deposited in the Extraordinary Proceeds Account during the
then-current Fiscal Year), such amounts shall be transferred, upon the written
instruction of the Borrowers' Agent or the Administrative Agent, to the
Administrative Agent for application as a prepayment of the Loans in accordance
with Section 3.10 (Mandatory Prepayment).

 
(c) If at any time Project Document Termination Payments are deposited into the
Extraordinary Proceeds Account, then on any Quarterly Payment Date:
 
(i) 
if such Project Document Termination Payments are in an amount in the aggregate
of less than five million Dollars ($5,000,000) (taken together with any other
Project Document Termination Payments received during the then-current Fiscal
Year), the Borrowers may submit an Extraordinary Proceeds Release Notice to the
Accounts Bank, certified by an Authorized Officer of the Borrowers' Agent,
directing the transfer of such Project Document Termination Payments to the
Revenue Account; and

 
(ii) 
if such Project Document Termination Payments are in an amount equal to or
greater than five million Dollars ($5,000,000) (taken together with any other
Project Document Termination Proceeds received during the then-current Fiscal
Year), such amounts shall be transferred, upon the written instruction of the
Borrowers' Agent or the Administrative Agent, to the Administrative Agent for
application as a prepayment of the Loans in accordance with Section 3.10
(Mandatory Prepayment).

 
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Section 8.16 Warranty Accounts.  (a)  The Borrowers shall cause all Warranty
Proceeds payable to each Borrower, or otherwise relating to each Plant, to be
deposited in the Warranty Account for such Plant.
 
(b) Unless a Notice of Suspension is in effect or a Default or Event of Default
would occur after giving effect to any application of funds contemplated hereby,
the Borrowers may direct the transfer or withdrawal of funds standing to the
credit of the Warranty Accounts to pay any amounts necessary to cover costs and
expenses incurred by the Borrowers in performing or causing to be performed any
Warranty Work with respect to the Plant to which such Warranty Proceeds relate,
by delivering a Warranty Proceeds Request Certificate to the Accounts Bank (with
a copy to the Administrative Agent and the Independent Engineer), which shall be
for application strictly in accordance with the relevant Warranty Notice.  All
payments from the Warranty Accounts shall be made by the Accounts Bank pursuant
to instructions set forth in the relevant Warranty Proceeds Request
Certificate.  In the event that the Borrowers fail to deliver such a Warranty
Proceeds Request Certificate, the Administrative Agent is hereby authorized to
direct, in writing to the Accounts Bank to transfer or withdraw the funds
necessary to pay any amounts necessary to cover costs and expenses incurred by
the Borrowers in performing or causing to be performed any Warranty Work with
respect to the Plant to which such Warranty Proceeds relate.
 
Section 8.17 Representations, Warranties and Covenants of Accounts Bank.  The
Accounts Bank hereby represents and warrants, covenants and agrees with the
Lenders, the Agents and the Borrowers (and the other parties hereto agree, to
the extent set forth below) as follows:
 
(a) it will act as depositary agent, as "securities intermediary" (within the
meaning of Section 8-102(a)(14) of the UCC) with respect to each of the Project
Accounts that is a "securities account" (within the meaning of Section 8-501 of
the UCC) and the Financial Assets credited to such Project Accounts, and as
"bank" (within the meaning of 9-102(a)(8) of the UCC) with respect to each of
the Project Accounts as described in Section 8.19 (Project Accounts as Deposit
Accounts) and credit balances not constituting Financial Assets credited thereto
and to accept all cash, payments, other amounts and Cash Equivalents to be
delivered to or held by the Accounts Bank pursuant to the terms of this
Agreement.  The Borrowers, the Senior Secured Parties and the Accounts Bank
agree that, for purposes of Articles 8 and 9 of the UCC, notwithstanding
anything to the contrary contained in any other agreement relating to the
establishment and operation of the Project Accounts, the jurisdiction of the
Accounts Bank (in its capacity as the securities intermediary and bank) is the
State of New York;
 
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(b) the Accounts Bank hereby agrees and confirms that it has established and
maintains the Project Accounts as set forth and defined in this Agreement.  The
Accounts Bank agrees that (i) each such Project Account established by the
Accounts Bank is and will be maintained as a "securities account" (within the
meaning of Section 8­501 of the UCC); (ii) the Borrowers' Agent is the
"entitlement holder" (within the meaning of Section 8­102(a)(7) of the UCC) in
respect of the "financial assets" (within the meaning of Section 8­102(a)(9) of
the UCC, the "Financial Assets") credited to such Project Accounts that are
"securities accounts"; (iii) all Financial Assets in registered form or payable
to or to the order of and credited to any such Project Account shall be
registered in the name of, payable to or to the order of, or specially endorsed
to, the Accounts Bank or in blank, or credited to another securities account
maintained in the name of the Accounts Bank ; and (iv) in no case will any
Financial Asset credited to any such Project Account be registered in the name
of, payable to or to the order of, or endorsed to, the Borrowers' Agent, Pacific
Holding or any other Borrower except to the extent the foregoing have been
subsequently endorsed by such Person to the Accounts Bank or in blank.  Each
item of property (including a security, security entitlement, investment
property, instrument or obligation, share, participation, interest or other
property whatsoever) credited to any Project Account shall to the fullest extent
permitted by law be treated as a Financial Asset.  Until the Discharge Date,
this Agreement is intended to provide the Collateral Agent with "control"
(within the meaning of Section 8­106(d)(2) or Section 9-104(a) (as applicable)
of the UCC) of the Project Accounts and each Borrower's "security entitlements"
(within the meaning of Section 8­102(a)(17) of the UCC) with respect to the
Financial Assets credited to the Project Accounts.  The Borrowers' Agent hereby
irrevocably directs, and the Accounts Bank (in its capacity as securities
intermediary) hereby agrees, that the Accounts Bank will comply with all
instructions and orders (including entitlement orders within the meaning of
Section 8-102(a)(8) of the UCC) regarding each Project Account and any Financial
Asset therein originated by the Collateral Agent without the further consent of
the Borrowers' Agent or any other Person.  In the case of a conflict between any
instruction or order originated by the Collateral Agent and any instruction or
order originated by the Borrowers' Agent or any other Person other than a court
of competent jurisdiction, the instruction or order originated by the Collateral
Agent shall prevail.  The Accounts Bank shall not change the name or account
number of any Project Account without the prior written consent of the
Collateral Agent and at least five (5) Business Days' prior notice to the
Borrowers' Agent, and shall not change the entitlement holder;
 
(c) it shall promptly perform all duties imposed upon a securities intermediary
and a bank under the UCC and this Agreement.  In this regard, (i) if the
Accounts Bank has knowledge that an issuer of any Financial Asset is required to
make a payment or distribution in respect of such Financial Asset, the Accounts
Bank shall have fulfilled its duty under applicable Law to take action to obtain
such payment or distribution if (A) it credits such payment or distribution to
the Project Accounts in accordance with this Agreement if such payment or
distribution is made or (B) it notifies the Borrowers' Agent, the Collateral
Agent and the Administrative Agent that such payment or distribution has not
been made, and (ii) if the Accounts Bank is required by applicable Law or this
Agreement to credit to any Project Account any Financial Asset purported to be
transferred or credited to the Accounts Bank pursuant to applicable Law, the
Accounts Bank shall have fulfilled its duty to so credit any Project Account if
it credits as a security entitlement to the applicable party whatever rights the
Accounts Bank purportedly has, in its capacity as Accounts Bank, in the
Financial Asset transferred or credited to the Accounts Bank, in its capacity as
Accounts Bank, and the Accounts Bank shall have no duty to ensure that
applicable Law has been complied with in respect of the transfer of the
Financial Asset or to create a security interest in or Lien on any Financial
Asset purported to be transferred or credited to the Accounts Bank and
subsequently credited to any Project Account;
 
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(d) all Financial Assets acquired by or delivered to the Accounts Bank shall be
held by the Accounts Bank and credited by book entry to the relevant Project
Account or otherwise accepted by the Accounts Bank for credit to the relevant
Project Account;
 
(e) each item of property (including any cash, security, general intangible,
document, instrument or obligation, share, participation, interest or other
property whatsoever) deposited in or credited to any Project Account shall be
treated as a Financial Asset for the purposes of Section 8-102(a)(9)(iii) of the
UCC.  Notwithstanding any provision herein contained to the contrary, any
property contained in the Project Accounts that is not deemed to be a Financial
Asset under applicable Law, to the extent permitted by applicable Law, will be
deemed to be deposited in a deposit account and subject to Section 8.19 (Project
Accounts as Deposit Account);
 
(f) The Collateral Agent shall have control of the security entitlements carried
in the Project Accounts and of the Financial Assets carried in the Project
Accounts, and each Borrower hereby disclaims any entitlement to claim control of
such security entitlements;
 
(g) all property delivered to the Accounts Bank pursuant to this Agreement or
the other Financing Documents will be promptly deposited in or credited to a
Project Account by an appropriate entry in its records in accordance with this
Agreement;
 
(h) if any Person (other than Collateral Agent, on behalf and for the benefit of
the Senior Secured Parties) asserts any lien, encumbrance or adverse claim
(including any writ, garnishment, judgment, warrant of attachment, execution or
similar process) against any Project Account or in any Financial Asset or other
property deposited therein or credited thereto of which the Accounts Bank has
actual knowledge, the Accounts Bank will promptly notify the Collateral Agent,
the Administrative Agent and the Borrowers' Agent in writing thereof; and
 
(i) the Accounts Bank has not entered into and will not enter into any agreement
with respect to the Project Accounts or any Financial Assets or other property
deposited in or credited to any Project Account other than this Agreement and
its Fee Letter.  The Accounts Bank has not entered into and will not enter into
any agreement with any Borrower or any other Person purporting to limit or
condition the obligation of the Accounts Bank to comply with entitlement orders
or any other order originated by the Collateral Agent in accordance with
Sections 8.17(b)(Representations, Warranties and Covenants of Accounts Bank) or
Sections 8.19(b) or (c)(Project Accounts as Deposit Account).
 
Section 8.18 Project Accounts.  (a) The Accounts Property will not constitute
repayment of the Obligations until so applied as payments in accordance with the
terms of this Agreement and the other Financing Documents.
 
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(b) The Accounts Bank shall not have title to the funds on deposit in the
Project Accounts, and shall credit the Project Accounts with all receipts of
interest, dividends and other income received on the property held in the
Project Accounts.  The Accounts Bank shall administer and manage the Project
Accounts in strict compliance with its duties with respect to the Project
Accounts pursuant to this Agreement, and shall be subject to and comply with all
of the obligations that the Accounts Bank owes to the Borrowers' Agent and the
Collateral Agent, on behalf of the Senior Secured Parties, with respect to the
Project Accounts, including all subordination obligations set forth in
Section 8.21 (Subordination) with respect to the Accounts Bank's right of
set-off or recoupment or right to obtain a Lien, pursuant to the terms of this
Agreement.  The Accounts Bank hereby agrees to comply with any and all
instructions originated by the Collateral Agent directing the disbursement,
deposit and/or transfer of any funds and all other property held in the Project
Accounts without any further consent of any Borrower or any other Person and to
comply with any and all instructions originated by the Borrowers' Agent
directing the disbursement, deposit and/or transfer of any funds and all other
property held in the Project Accounts subject to the terms of this Agreement.
 
Section 8.19 Project Accounts as Deposit Account.  (a)  To the extent that the
Project Accounts are not considered securities accounts, the Project Accounts
shall be deemed to be deposit accounts in respect of any property deposited in
or credited to the Project Accounts that is not deemed to be a Financial Asset
under applicable Law.  Such deposit accounts and such property shall be
maintained with the Accounts Bank acting not as a securities intermediary, but
as a bank.
 
(b) The Borrowers' Agent shall be deemed the customer of the Accounts Bank for
purposes of the Project Accounts and, as such, shall be entitled to all of the
rights that customers of banks have under applicable Law with respect to deposit
accounts, including the right to withdraw funds from, or close, the Project
Accounts, in each such case subject to, and in accordance with, the terms of
this Agreement.
 
(c) The parties hereto agree that, to the extent that the Project Accounts are
not considered "securities accounts" (within the meaning of Section 8-501(a) of
the UCC), the Project Accounts shall be deemed to be "deposit accounts" (as
defined in Section 9-102(a)(29) of the UCC) to the extent a security interest
can be granted and perfected under the UCC in the Project Accounts as deposit
accounts, which the Borrowers shall maintain with the Accounts Bank acting not
as a securities intermediary but as a "bank" (within the meaning of Section
9-102(a)(8) of the UCC).  The Accounts Bank shall not have title to the funds on
deposit in the Project Accounts, and shall credit the Project Accounts with all
receipts of interest, dividends and other income received on the property held
in the Project Accounts.  The Accounts Bank shall administer and manage the
Project Accounts in strict compliance with all the terms applicable to the
Project Accounts pursuant to this Agreement, and shall be subject to and comply
with all the obligations that the Accounts Bank owes to the Collateral Agent
with respect to the Project Accounts, including all subordination obligations,
pursuant to the terms of this Agreement.  The Accounts Bank hereby agrees to
comply with any and all instructions originated by the Collateral Agent
directing disposition of funds and all other property in the Project Accounts
without any further consent of the Borrowers or any other Person and to comply
with any and all instructions originated by the Borrowers' Agent directing the
disbursement, deposit and/or transfer of any funds and all other property held
in the Project Accounts, in each such case subject to, and in accordance with,
the terms of this Agreement.
 
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Section 8.20 Duties of Accounts Bank.  (a) The Accounts Bank will also have
those duties and responsibilities expressly set forth in this Agreement, and no
additional duties, responsibilities, obligations or liabilities shall be
inferred from the provisions of this Agreement or imposed on the Accounts
Bank.  The Accounts Bank will act at the written direction of the Collateral
Agent, the Administrative Agent and, as expressly provided in this Agreement,
Borrowers' Agent, but will not be required to take any action that is contrary
to this Agreement or applicable Law or that, in its reasonable judgment, would
involve it in expense or liability, unless it has been furnished with adequate
indemnity against such expense or liability.  The Accounts Bank will have no
responsibility to ensure the performance by any other party of its duties and
obligations hereunder.  The Accounts Bank will use the same care with respect to
the safekeeping and handling of property held in the Project Accounts as the
Accounts Bank uses in respect of property held for its own sole benefit.
 
(b) In performing its functions and duties under this Agreement, the Accounts
Bank will act solely as the depository agent and as securities intermediary or
as a bank, as the case may be, with respect to the Project Accounts.  None of
the Senior Secured Parties or any Borrower will have any rights against the
Accounts Bank hereunder, other than for the Accounts Bank's gross negligence or
willful misconduct as determined by a court of competent jurisdiction by final
and Non-Appealable judgment.  Except as otherwise expressly provided in this
Agreement, the Borrowers will not have any right to direct the Accounts Bank to
distribute or allocate any funds, instruments, securities, Financial Assets or
other assets in the Project Accounts or to withdraw or transfer any funds,
instruments, securities, Financial Assets or other assets from the Project
Accounts.  Except as otherwise expressly provided in this Agreement, the
Collateral Agent will have the sole right to issue directions and instructions
to the Accounts Bank, acting as securities intermediary or bank, as the case may
be, in accordance with this Agreement, and to issue entitlement orders with
respect to the Project Accounts.  It is expressly understood and agreed that any
investment made with funds held in the Project Accounts may be made only in
accordance with the express provisions of Section 8.24 (Interest and
Investments).  The Accounts Bank shall not in any way whatsoever be liable for
any loss or depreciation in the value of the investments made pursuant to the
terms of this Agreement.
 
Section 8.21 Subordination.  (a) The Accounts Bank hereby acknowledges the
security interest granted hereby to the Collateral Agent, on behalf and for the
benefit of the Senior Secured Parties, by the Borrowers.  In the event that the
Accounts Bank has or subsequently obtains by agreement, operation of applicable
Law or otherwise a right of recoupment or set-off or any Lien in any of the
Project Accounts or any Financial Asset or other property deposited therein or
credited thereto or any security entitlement related thereto, the Accounts Bank
hereby agrees that such right of recoupment or set-off and/or any such Lien
shall be subordinate to the security interest of the Collateral Agent, on behalf
of and for the benefit of the Senior Secured Parties.  The Accounts Bank agrees
that it shall not assert or enforce any such right of recoupment or set-off
and/or any Lien until the Discharge Date.
 
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(b) The Financial Assets and other items deposited in or credited to the Project
Accounts and the Accounts Property will not be subject to deduction, set-off,
banker's lien or any other right in favor of any Person other than the
Collateral Agent, on behalf and for the benefit of the Senior Secured Parties.
 
Section 8.22 Borrower Acknowledgments.  (a) Each Borrower acknowledges that
neither any insufficiency of funds in the Project Accounts (or any of them), nor
any inability to apply any funds in the Project Accounts (or any of them)
against any or all amounts owing under any Financing Document, shall at any time
limit, reduce or otherwise affect the Borrowers' obligations under any Financing
Document.
 
(b) Each party to this Agreement acknowledges that the Accounts Bank and the
Collateral Agent shall not incur any obligation or liability in circumstances
where there are insufficient funds deposited in or credited to any Project
Account to make a payment in full that would otherwise have been made pursuant
to the terms of this Agreement, except (i) in the case of the Accounts Bank to
the extent that the loss arises directly from the Accounts Bank's gross
negligence or willful misconduct as determined by a court of competent
jurisdiction by final and Non-Appealable judgment, and (ii) in the case of the
Collateral Agent, to the extent that the loss arises directly from the
Collateral Agent's gross negligence or willful misconduct as determined by a
court of competent jurisdiction by final and Non-Appealable judgment.
 
Section 8.23 Agreement to Hold In Trust.  All payments received directly by any
Borrower that are required to be deposited into the Project Accounts in
accordance with the terms of this Agreement or any other Financing Document
shall be held by such Borrower in trust for the Collateral Agent, on behalf and
for the benefit of the Senior Secured Parties, shall be segregated from other
funds of such Borrower and shall, forthwith upon receipt by such Borrower, be
turned over to the Collateral Agent or its designee in the same form as received
by such Borrower (duly endorsed by such Borrower to the Collateral Agent or the
Accounts Bank, if requested) for deposit and disbursement in accordance with
this Agreement.
 
Section 8.24 Interest and Investments.  (a) Each amount deposited in or credited
to a Project Account from time to time shall, from the time it is so deposited
or credited until the time it is withdrawn from that Project Account (whether
for the purpose of making an investment in Cash Equivalents or otherwise applied
in accordance with the terms of this Agreement), earn interest at such rates as
may be agreed from time to time by Pacific Holding and the Accounts Bank.
 
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(b) Prior to the receipt by the Accounts Bank of a Notice of Suspension, any
amounts held by the Accounts Bank in the Project Accounts shall be invested by
the Accounts Bank from time to time, at the risk and expense of the Borrowers,
solely in such Cash Equivalents as the Borrowers' Agent shall direct in
writing.  The Borrowers shall select Cash Equivalents having such maturities as
shall cause the Project Accounts to have a cash balance as of any day sufficient
to cover the transfers to be made from the Project Accounts on such day in
accordance with this Agreement, the other Financing Documents and the Project
Documents.  Upon delivery by the Collateral Agent to the Accounts Bank of a
Notice of Suspension and until written revocation of such Notice of Suspension
is delivered to the Accounts Bank by the Collateral Agent, any amounts held by
the Accounts Bank in the Project Accounts shall be invested by the Accounts Bank
from time to time, solely in such Cash Equivalents as the Collateral Agent may
direct.
 
(c) In the event that the cash balance in any of the Project Accounts is as of
any day insufficient to cover the transfers to be made from such Project Account
on such day, the Collateral Agent may direct the Accounts Bank to sell or
liquidate the Cash Equivalents standing to the credit of such Project Account
(without regard to maturity date) in such manner as the Collateral Agent may
deem necessary in order to obtain cash at least sufficient to make such
transfers and to pay any expenses and charges incurred in connection with
effecting any such sale or liquidation, which expenses and charges the Accounts
Bank shall be authorized to pay with cash on deposit in such Project
Account.  Neither the Accounts Bank nor any Senior Secured Party shall be liable
to any Person for any loss suffered because of any such sale or liquidation.
 
(d) All interest and other investment income earned from Cash Equivalents made
from amounts in any Project Account shall remain in such Project Account until
transferred from such Project Account in accordance with the terms of this
Article VIII.
 
(e) It is acknowledged by the parties hereto that all investment income earned
on amounts on deposit in or credited to the Project Accounts for all Tax
purposes shall be attributed to and be income of Pacific Holding.  Pacific
Holding shall be responsible for determining any requirements for paying Taxes
or reporting or withholding any payments for Tax purposes hereunder.  Pacific
Holding shall prepare and file all Tax information required with respect to the
Project Accounts.  Each Borrower agrees to indemnify and hold each Senior
Secured Party harmless against all liability for Tax withholding and/or
reporting for any investment income earned on the Project Accounts and payments
in respect thereof.  Such indemnities shall survive the termination or discharge
of this Agreement or resignation of the Accounts Bank.  No Senior Secured Party
shall have any obligation with respect to the making of or the reporting of any
payments for Tax purposes.  From time to time, and as reasonably requested by
the Accounts Bank, Pacific Holding or any other Borrower shall provide to the
Accounts Bank a United States Department of the Treasury Internal Revenue
Service tax Form W-8 or W-8BEN or other appropriate form required with respect
to the withholding or exemption from withholding of income tax on any investment
income earned on the Project Accounts.
 
Section 8.25 Accounts Bank Information.  (a) The Accounts Bank will:
 
(i) 
within five (5) Business Days after the end of the month in which the first
deposit is made into any Project Account and within five (5) Business Days after
the end of each month thereafter, provide the Borrowers' Agent, the Collateral
Agent and the Administrative Agent a report with respect to the Project
Accounts, setting forth in reasonable detail all deposits to and disbursements
from each of the Project Accounts during such month, including the date on which
made, and the balances of and any investments in each of the Project Accounts at
the end of such month, including information regarding categories, amounts,
maturities and issuers of Cash Equivalents; and

 
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(ii) 
within three (3) Business Days after receipt of any written request by the
Borrowers' Agent, the Collateral Agent or the Administrative Agent, provide to
the Borrowers' Agent, the Collateral Agent or the Administrative Agent, as the
case may be, such other information as the Borrowers' Agent, the Collateral
Agent or the Administrative Agent may specify regarding all Cash Equivalents and
any other investments made by the Accounts Bank pursuant hereto and regarding
amounts available in the Project Accounts.

 
Notwithstanding the foregoing, the Accounts Bank will provide the Borrowers'
Agent, the Collateral Agent and the Administrative Agent such additional
information regarding the Project Accounts and the balances and Cash Equivalents
therein as any of them may reasonably request from time to time.
 
(b) The Accounts Bank will maintain all of the Project Accounts and all books
and records with respect thereto as may be necessary to record properly all
transactions carried out by it under this Agreement.
 
(c) If any Cash Equivalent ceases to be a Cash Equivalent, the Accounts Bank
will, as soon as reasonably practicable after becoming aware of such cessation,
notify the Collateral Agent and the Borrowers' Agent in writing of such
cessation and, upon the written direction of the Borrowers' Agent or the
Collateral Agent, as the case may be, will cause the relevant investment to be
replaced by a Cash Equivalent or by cash; provided that this Section 8.25(c)
will not oblige the Accounts Bank to liquidate any investment earlier than its
normal maturity date unless:
 
(i) 
directed to do so under Section 8.24 (Interest and Investments); or

 
(ii) 
the maturity date of the relevant investment exceeds the maturity date that
would enable it to continue to qualify as a Cash Equivalent.

 
Section 8.26 Notices of Suspension of Accounts.  (a) The Collateral Agent may,
but shall not be required to, suspend the right of the Accounts Bank and the
Borrowers' Agent to withdraw or otherwise deal with any funds deposited in or
credited to the Project Accounts at any time during the occurrence and
continuance of an Event of Default by delivering a notice to the Accounts Bank
(with a copy to the Borrowers' Agent and the Administrative Agent) (a "Notice of
Suspension").
 
(b) Notwithstanding any other provision of the Financing Documents, after the
issuance by the Collateral Agent of a Notice of Suspension in accordance with
Section 8.26(a) and until such time as the Collateral Agent advises the Accounts
Bank and the Borrowers' Agent (with a copy to the Administrative Agent) that it
has withdrawn such Notice of Suspension, (which it shall do if such Event of
Default is no longer continuing) no amount may be withdrawn by the Accounts Bank
from any Project Account, including for investment in Cash Equivalents, without
the express prior written consent of the Collateral Agent.
 
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(c) Notwithstanding any other provision of the Financing Documents (but without
limitation of Sections 8.02(g) or (h) (Deposits into and Withdrawals from
Project Accounts), without the express prior written consent of the Required
Lenders, no amount may be withdrawn from any Project Account if a Default or
Event of Default would occur as a result of such withdrawal.
 
(d) On the date of each withdrawal by the Accounts Bank from a Project Account,
the Borrowers' Agent shall be deemed to represent and warrant that no Notice of
Suspension is in effect and that that no Default or Event of Default would occur
as a result of such withdrawal, unless the Required Lenders have previously
consented in writing to such withdrawal, notwithstanding that a Notice of
Suspension is in effect or that a Default or Event of Default would occur as a
result of such withdrawal.
 
ARTICLE IX
 
DEFAULT AND ENFORCEMENT
 
Section 9.01 Events of Default.  Each of the following events or occurrences
described in this Section 9.01 shall constitute an Event of Default.
 
(a) Nonpayment.  (i) Any Borrower fails to pay any amount of principal of any
Loan when the same becomes due and payable or (ii) any Borrower fails to pay any
interest on any Loan or any fee or other Obligation or amount payable hereunder
or under any other Financing Document within three (3) Business Days after the
same becomes due and payable.
 
(b) Breach of Warranty.  Any representation or warranty of any Loan Party or any
Major Project Party made or deemed to be restated or remade in any Financing
Document is or shall be incorrect or misleading in any material respect when
made or deemed made; provided that (i) if such Loan Party or Major Project
Party, as the case may be, was not aware that such representation or warranty
was incorrect or misleading at the time such representation or warranty was made
or deemed repeated, (ii) the fact, event or circumstance resulting in such
incorrect or misleading representation or warranty is capable of being cured,
corrected or otherwise remedied, (iii) such fact, event or circumstance
resulting in such incorrect or misleading representation or warranty is cured,
corrected or otherwise remedied within thirty (30) days from the date any Loan
Party obtains, or should have obtained, knowledge thereof, and (v) no Material
Adverse Effect shall have occurred as a result of such representation or
warranty being incorrect or misleading, then such incorrect representation or
warranty shall not constitute an Event of Default.
 
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(c) Non-Performance of Certain Covenants and Obligations.  Any Borrower defaults
in the due performance and observance of any of its obligations under any of
Sections 7.01(d)(i), (ii) and (iii)(A) (Affirmative Covenants – Construction and
Completion of Project; Maintenance of Properties), 7.01(g) (Affirmative
Covenants – Use of Proceeds and Cash Flow), 7.01(h) (Affirmative Covenants –
Insurance), 7.01(r) (Affirmative Covenants – First Priority Ranking), 7.01 (w)
(Debt Service Reserve), 7.02 (Negative Covenants) and 7.03(e) (Reporting
Requirements) of this Agreement, Sections 5.02 (Limitation of Liens) or 5.06
(Name; Jurisdiction of Organization) of any Security Agreement, or any Borrower
or the Pledgor defaults in the due performance and observance of any of its
obligations under Sections 5.02 (Limitation of Liens), 5.03 (No Sale of
Collateral), 5.04 (No Impairment of Security), 5.05 (Filing of Bankruptcy
Proceedings) or 5.08 (Name; Jurisdiction of Organization) of any Pledge
Agreement, or Pacific Ethanol defaults in the due performance and observance of
any of its obligations under Section 2.04(a) (Sponsor's Deficiency Funding
Obligation), Section 3.04(a) (Sponsor's Warranty Performance Obligations),
Section 3.05(a) (Sponsor's Warranty Funding Obligation), Section 4.01(a)
(Acceleration of Senior Debt Obligations) or Sections 5.05(b) or (c) (Accounting
Matters) of the Sponsor Support Agreement.
 
(d) Non-Performance of Other Covenants and Obligations.  Any Loan Party or any
Major Project Party defaults in the due performance and observance of any
covenant or agreement (other than covenants and agreements referred to in
Section 9.01(a) or 9.01(c)) contained in any Financing Document, and such
default shall continue unremedied for a period of thirty (30) days after any
Borrower obtains, or should have obtained, knowledge thereof; provided, that any
such default by any Major Project Party shall only constitute an Event of
Default hereunder in the event that such default occurs on or after the date of
the initial Funding Notice for the Plant to which such Project Document relates
(or in the case of any Project Document that does not relate to a specific
Plant, the date of the initial Funding Notice).
 
(e) Project Completion.  The Commercial Operation Date for each Plant with
respect to which any Funding has been made does not occur on or before the
Conversion Date Certain.
 
(f) Cross Defaults.  Any one of the following occurs with respect to any
Borrower, the Pledgor, Pacific Ethanol, or any Major Project Party with respect
to Indebtedness (other than the Obligations) (provided that if any such event
has been cured in accordance with the terms of such Indebtedness, it shall serve
as a cure of this Event of Default):
 
(i) 
a default occurs in the payment when due (subject to any applicable grace period
and notice requirements), whether by acceleration or otherwise, of such
Indebtedness; or

 
 
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(ii) 
such Person fails to observe or perform (subject to any applicable grace periods
and notice requirements) any other agreement or condition relating to any such
Indebtedness or contained in any instrument or agreement evidencing, securing or
relating thereto, or any other event occurs, the effect of which default or
other event is to cause, or to permit the holder or holders of such Indebtedness
or the beneficiary or beneficiaries of any Guarantee (or a trustee or agent on
behalf of such holder or holders or beneficiary or beneficiaries) to cause, with
the giving of notice if required, such Indebtedness to be demanded or to become
due or to be repurchased, prepaid, defeased or redeemed (automatically or
otherwise), or an offer to repurchase, prepay, defease or redeem such
Indebtedness to be made, prior to its stated maturity, or such Guarantee to
become payable or cash collateral in respect thereof to be demanded; and

 
(A)     
in the case of the Borrowers, with respect to Indebtedness in an amount greater
than or equal to two million Dollars ($2,000,000) in the aggregate;

 
(B)      
in the case of either of the Pledgor or Kinergy, with respect to Indebtedness in
an amount greater than or equal to two million five hundred thousand Dollars
($2,500,000) in the aggregate;

 
(C)      
in the case of Pacific Ethanol, with respect to Indebtedness in an amount in
excess of five million Dollars ($5,000,000) in the aggregate; and

 
(D)      
in the case of any other Major Project Party only, has or could reasonably be
expected to result in a Material Adverse Effect;

 
provided, that such occurrence shall not constitute an Event of Default with
respect to any Major Project Party if an agreement replacing each Project
Document to which such Major Project Party is a party relating to each Plant
with respect to which any Funding has been made or is being requested (and each
Project Document to which such Major Project Party is a party that does not
relate to a specific Plant), in form and substance reasonably satisfactory
subject to the applicable Project Document Approval Level, is entered into
(together will all applicable Ancillary Documents) within forty-five (45) days
thereof.
 
 
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(g) Judgments.  (i) Any judgment or order that has or could reasonably be
expected to have a Material Adverse Effect is rendered against any Loan Party or
any Major Project Party, or (ii) any judgment or order is rendered against (A)
any or all of the Borrowers, in an amount in excess of two million Dollars
($2,000,000) in the aggregate, (B) either of the Pledgor or Kinergy in an amount
in excess of two million five hundred thousand Dollars ($2,500,000) in the
aggregate or (C) Pacific Ethanol in an amount in excess of five million Dollars
($5,000,000) in the aggregate and, in any such case, (x) enforcement proceedings
are commenced by any creditor upon such judgment or order or (y) there is a
period of sixty (60) consecutive days during which a stay of enforcement of such
judgment is not in effect; provided, that such occurrence shall not constitute
an Event of Default with respect to any Major Project Party if an agreement
replacing each Project Document to which such Major Project Party is a party
relating to each Plant with respect to which any Funding has been made or is
being requested (and each Project Document to which such Major Project Party is
a party that does not relate to a specific Plant), in form and substance
reasonably satisfactory subject to the applicable Project Document Approval
Level, is entered into (together will all applicable Ancillary Documents) within
forty-five (45) days thereof.
 
(h) ERISA Events.  (i) Any Termination Event occurs, (ii) any Plan incurs an
"accumulated funding deficiency" (as defined in Section 412 of the Code or
Section 302 of ERISA), (iii) any Borrower or member of any Borrower's ERISA
Controlled Group engages in a transaction that is prohibited under Section 4975
of the Code or Section 406 of ERISA, (iv) any Borrower or any ERISA Affiliate
fails to pay when due any amount it has become liable to pay to the PBGC, any
Plan or a trust established under Title IV of ERISA, (v) a condition exists by
reason of which the PBGC would be entitled to obtain a decree adjudicating that
an ERISA Plan must be terminated or have a trustee appointed to administer it,
(vi) any Borrower or any ERISA Affiliate suffers a partial or complete
withdrawal from a Multiemployer Plan or is in "default" (as defined in
Section 4219(c)(5) of ERISA) with respect to payments to a Multiemployer Plan,
(vii) a proceeding is instituted against any Borrower to enforce Section 515 of
ERISA, (viii) the aggregate amount of the then "current liability" (as defined
in Section 412(l)(7) of the Code, as amended) of all accrued benefits under such
Plan or Plans exceeds the then current value of the assets allocable to such
benefits by more than two million Dollars ($2,000,000) at such time, or (ix) any
other event or condition occurs or exists with respect to any Plan that would
subject any Borrower to any tax, penalty or other liability.
 
(i) Bankruptcy, Insolvency.  Any Borrower, the Pledgor, Pacific Ethanol or any
Major Project Party:
 
(i) 
generally fails to pay, or admits in writing its inability or unwillingness to
pay, debts as they become due;

 
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(ii) 
applies for, consents to, or acquiesces in, the appointment of a trustee,
receiver, sequestrator or other custodian for such Person or a substantial
portion of its property, or makes a general assignment for the benefit of
creditors;

 
(iii) 
in the absence of such application, consent or acquiescence, permits or suffers
to exist the appointment of a trustee, receiver, sequestrator or other custodian
for such Person or for a substantial part of its property, and such trustee,
receiver, sequestrator or other custodian is not discharged within sixty
(60) days; provided that nothing in the Financing Documents shall prohibit or
restrict any right any Senior Secured Party may have under applicable Law to
appear in any court conducting any relevant proceeding during such sixty
(60) day period to preserve, protect and defend its rights under the Financing
Documents (and such Person shall not object to any such appearance);

 
(iv) 
permit or suffer to exist the commencement of any bankruptcy, reorganization,
debt arrangement or other case or proceeding under any bankruptcy or insolvency
law, or any dissolution, winding up or liquidation proceeding, in respect of
such Person and, if any such case or proceeding is not commenced by such Person,
such case or proceeding is be consented to or acquiesced in by such Person or
results in the entry of an order for relief or remains for sixty (60) days
undismissed; provided that nothing in the Financing Documents shall prohibit or
restrict any right any Senior Secured Party may have under applicable Law to
appear in any court conducting any such case or proceeding during such sixty
(60) day period to preserve, protect and defend its rights under the Financing
Documents (and such Person shall not object to any such appearance);

 
(v)  
takes any action authorizing, or in furtherance of, any of the foregoing; or

 
(vi)  
becomes insolvent;

 
provided, that any such event or occurrence with respect to a Major Project
Party shall only constitute an Event of Default hereunder on or after the date
of the initial Funding Notice for any Plant with respect to which such Major
Project Party is party to a Project Document (or in the case of a Project
Document that does not relate to a specific Plant, the date of the initial
Funding Notice); provided, further, that such occurrence (A) shall only
constitute an Event of Default with respect to a Major Project Party that is not
an Affiliate of any Borrower if such occurrence has had or could reasonably be
expected to have a Material Adverse Effect and (B) shall not constitute an Event
of Default with respect to any Major Project Party if an agreement replacing
each Project Document to which such Major Project Party is a party relating to
each Plant with respect to which any Funding has been made or is being requested
(and each Project Document to which such Major Project Party is a party that
does not relate to a specific Plant), in form and substance reasonably
satisfactory subject to the applicable Project Document Approval Level, is
entered into (together will all applicable Ancillary Documents) within
forty-five (45) days thereof (or, if such bankruptcy or insolvency could not
reasonably be expected to result in a Material Adverse Effect, sixty (60) days).
 
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(j) Project Document Defaults; Termination.
 
(i) 
Any Borrower or any other Major Project Party shall be in material breach of or
otherwise in material default under any Project Document (other than a Project
Document relating exclusively to a Plant with respect to which no Funding has
been made or is being requested) and such breach or default has continued beyond
any applicable grace period expressly provided for in such Project Document (or,
if no such cure period is provided, thirty (30) days), as the same may be
extended pursuant to any Consent (which, in the case of any Major Project Party
that is not an Affiliate of any Borrower (other than, prior to the Commercial
Operation Date for the applicable Plant, any Construction Contractor) has had or
could reasonably be expected to have a Material Adverse Effect with respect to
such Plant or such Borrower); provided, that any such breach or default by any
Major Project Party under any Project Document shall not constitute an Event of
Default if an agreement replacing such Project Document, in form and substance
reasonably satisfactory subject to the applicable Project Document Approval
Level, is entered into (together will all applicable Ancillary Documents) within
forty-five (45) days thereof (or, if such breach or default could not reasonably
be expected to result in a Material Adverse Effect, sixty (60) days); provided,
further, that if such material breach or material default on the part of such
Major Project Party relates to the performance of Warranty Work that is being
performed by Pacific Ethanol, or to a Project Completion Deficiency that is
being funded by Pacific Ethanol, in either such case in accordance with the
Sponsor Support Agreement, then such breach or default shall be deemed to be
cured.

 
(ii) 
Any Project Document (other than a Project Document relating exclusively to a
Plant with respect to which no Funding has been made or is being requested)
ceases to be in full force and effect prior to its scheduled expiration, is
repudiated, or its enforceability is challenged or disaffirmed by or on behalf
of any Borrower or any Major Project Party thereto (which, in the case of any
Major Project Party that is not an Affiliate of any Borrower (other than, prior
to the Commercial Operation Date for the applicable Plant, any Construction
Contractor) has had or could reasonably be expected to have a Material Adverse
Effect with respect to such Plant or such Borrower); provided, that such
occurrence shall not constitute an Event of Default with respect to any Project
Document if an agreement replacing such Project Document, in form and substance
reasonably satisfactory subject to the applicable Project Document Approval
Level, is entered into (together will all applicable Ancillary Documents) within
forty-five (45) days thereof (or, if such occurrence could not reasonably be
expected to result in a Material Adverse Effect, sixty (60) days).

 
(k) Governmental Approvals.  Any Borrower fails to obtain, renew, maintain or
comply in all material respects with any Necessary Project Approval or any
Necessary Project Approval is revoked, canceled, terminated, withdrawn or
otherwise ceases to be in full force and effect, or any Necessary Project
Approval is modified without the consent of the Required Lenders in a manner
that, in each case, has, or could reasonably be expected to result in, a
Material Adverse Effect on such Borrower or its Plant.
 
(l) Unenforceability of Documentation.  At any time after the execution and
delivery thereof:
 
(i) 
any material provision of any Financing Document shall cease to be in full force
and effect;

 
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(ii) 
any Financing Document is revoked or terminated, becomes unlawful or is declared
null and void by a Governmental Authority of competent jurisdiction;

 
(iii) 
any Financing Document becomes unenforceable, is repudiated or the
enforceability thereof is contested or disaffirmed by or on behalf of any party
thereto other than the Senior Secured Parties; and

 
(iv) 
any Liens against any of the Collateral cease to be a first priority, perfected
security interest in favor of the Collateral Agent, or the enforceability
thereof is contested by any Loan Party, or any of the Security Documents ceases
to provide the security intended to be created thereby with the priority
purported to be created thereby.

 
(m) Environmental Matters.  This Section 9.01(m) shall not apply to matters or
occurrences related exclusively to a Plant with respect to which no Funding has
been made or is being requested.  (i) Any Environmental Claim has occurred with
respect to any Borrower, any Plant or any Environmental Affiliate, (ii) any
release, emission, discharge or disposal of any Material of Environmental
Concern occurs, and such event could reasonably be expected to form the basis of
an Environmental Claim against any Borrower, any Plant or any Environmental
Affiliate, or (iii) any violation or alleged violation of any Environmental Law
or Environmental Approval occurs that would reasonably result in an
Environmental Claim against any Borrower or any Plant or, to the extent any
Borrower may have liability, any Environmental Affiliate, that, in the case of
any of Sections 9.01(m)(i), (ii) or (iii), could reasonably be expected to
result in liability for any Borrower (or the Borrowers on an aggregate basis) in
an amount greater than five hundred thousand Dollars ($500,000) for any single
claim or one million Dollars ($1,000,000) for all such claims during any twelve
(12) month period or could otherwise reasonably be expected to result in a
Material Adverse Effect; provided that such occurrence shall not constitute an
Event of Default if (A) the estimated liability associated therewith is
reasonably expected to be less than five million Dollars ($5,000,000) (net of
any Insurance Proceeds that have actually been paid to, and received by, the
Borrowers or the Collateral Agent as loss payee in connection therewith, or as
reduced by taking into account any amounts that the Borrowers demonstrate, to
the reasonable satisfaction of the Administrative Agent, within ten (10)
Business Days following such occurrence, will be available as and when needed,
without conditions, from sources (including Insurance Proceeds and documented
voluntary equity contributions made to the Borrowers for the purpose of covering
such costs) other than Cash Flow or Loan proceeds, to cover such costs) (and
such occurrence could not otherwise reasonably be expected to result in a
Material Adverse Effect) and within ninety (90) days of such occurrence, such
liability is reduced below the threshold set forth above this proviso from
sources other than Cash Flow or Loan proceeds, (B) there have been no more than
two (2) occurrences of the nature described in this Section 9.01(m) during the
immediately preceding twelve (12) month period and (C) during such cure period,
the Borrowers undertake any remedial or responsive actions then required to be
undertaken under applicable Law.
 
(n) Loss of Collateral.  Any portion of the Collateral (other than a portion
that is immaterial) is damaged, seized or appropriated; provided, that such an
occurrence shall not constitute an Event of Default if the applicable Borrowers
repair, replace, rebuild or refurbish such damaged, seized or appropriated
Collateral (i) in accordance with Section 8.14(d)(i) (Insurance and Condemnation
Proceeds Accounts), or (ii) otherwise (provided that such approval is obtained
within sixty (60) days hereafter) with the approval of the Required Lenders, in
consultation with the Independent Engineer.
 
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(o) Event of Abandonment.  An Event of Abandonment occurs.
 
(p) Taking or Total Loss.  An Event of Taking with respect to all or a material
portion of any Plant or any Equity Interests in any Borrower occurs, or an Event
of Total Loss occurs.
 
(q) Change of Control.  A Change of Control occurs.
 
Section 9.02 Action Upon Bankruptcy.  If any Event of Default described in
Section 9.01(i) (Events of Default - Bankruptcy; Insolvency) occurs with respect
to any Borrower, any outstanding Construction Loan Commitments, Term Loan
Commitments or Working Capital Loan Commitments (if not theretofore terminated)
shall automatically terminate, and any amounts on deposit in or standing to the
credit of the Escrow Account shall be released and reimbursed to the Tranche B
Lenders.  The outstanding principal amount of the outstanding Loans and all
other Obligations shall automatically be and become immediately due and payable,
without notice, demand or further act of the Administrative Agent, the
Collateral Agent or any other Senior Secured Party.
 
Section 9.03 Action Upon Other Event of Default.  (a)  If any other Event of
Default occurs and is continuing for any reason, whether voluntary or
involuntary, and is continuing, the Administrative Agent may, or upon the
direction of the Required Lenders shall, by written notice to the Borrowers
declare all or any portion of the outstanding principal amount of the Loans and
other Obligations to be due and payable and/or any outstanding Construction Loan
Commitments, Term Loan Commitments or Working Capital Loan Commitments (if not
theretofore terminated) to be terminated, whereupon the full unpaid amount of
such Loans and other Obligations that has been declared due and payable shall be
and become immediately due and payable, without further notice, demand or
presentment and/or, as the case may be, any outstanding Construction Loan
Commitments, Term Loan Commitments or Working Capital Loan Commitments shall
terminate, and any amounts on deposit in or standing to the credit of the Escrow
Account shall be released and reimbursed to the Tranche B Lenders.  During the
continuance of an Event of Default, the Administrative Agent may, or upon the
direction of the Required Lenders shall, instruct the Collateral Agent to
exercise any or all remedies provided for under this Agreement or the other
Financing Documents.
 
(b) Any declaration made pursuant to Section 9.03(a) may, should the Required
Lenders in their sole and absolute discretion so elect, be rescinded by written
notice to the Borrowers at any time after the principal of the Loans has become
due and payable, but before any judgment or decree for the payment of the monies
so due, or any part thereof, has been entered; provided that no such rescission
or annulment shall extend to or affect any subsequent Event of Default or impair
any right consequent thereon.
 
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Section 9.04 Application of Proceeds.  Any moneys received by the Collateral
Agent after the occurrence and during the continuance of an Event of Default may
be held by the Collateral Agent as Collateral and/or, at the direction of the
Administrative Agent, may be applied in full or in part by the Collateral Agent
against the Obligations in the following order of priority (but without
prejudice to the right of the Collateral Agent to recover any shortfall from the
Borrower):
 
(a) first, to payment of that portion of the Obligations constituting fees,
costs, expenses (and interest owing thereon (if any)) and any other amounts
(including fees, costs and expenses of counsel and amounts payable under
Article IV (Eurodollar Rate and Tax Provisions)) payable to the Agents in their
capacities as such ratably among them in proportion to the amounts described in
this clause first;
 
(b) second, to payment of that portion of the Obligations constituting fees,
costs, expenses (and interest owing thereon (if any)) and any other amounts
(including fees, costs and expenses of counsel and amounts payable under
Article IV (Eurodollar Rate and Tax Provisions)) but excluding principal of and
accrued interest on the Loans or any Interest Rate Protection Agreement payable
to the Lenders and the Interest Rate Protection Providers, ratably among the
Lenders and the Interest Rate Protection Providers in proportion to the amounts
described in this clause second payable to them;
 
(c) third, to payment of the portion of the Obligations constituting accrued and
unpaid interest (including default interest) with respect to the Loans and
Interest Rate Protection Agreement (other than any payments of Swap Termination
Value), ratably among the Lenders and the Interest Rate Protection Providers in
proportion to the respective amounts described in this clause third payable to
them;
 
(d) fourth, to the principal amount of the Loans and any Primary Swap
Obligations payable by the Borrower to the Lenders and Interest Rate Protection
Providers, ratably among the Lenders and the Interest Rate Protection Providers
in proportion to the respective amounts described in this clause fourth held by
them; and
 
(e) last, the balance, if any, after all of the Obligations have been
indefeasibly paid in full, to the Borrowers or as otherwise required by
Applicable Law.
 
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ARTICLE X
 
THE AGENTS
 
Section 10.01 Appointment and Authority.  (a) Each of the Lenders (in its
capacity as Lender and on behalf of itself and its Affiliates as a potential
Interest Rate Protection Provider) hereby irrevocably appoints, designates and
authorizes each Agent to take such action on its behalf under the provisions of
this Agreement and each other Financing Document and to exercise such powers and
perform such duties as are expressly delegated to such Agent by the terms of
this Agreement or any other Financing Document, together with such actions as
are reasonably incidental thereto.  The provisions of this Article X are solely
for the benefit of the Agents and the Lenders, and neither the Borrowers nor any
other Person shall have rights as a third party beneficiary of any of such
provisions.
 
(b) Each Lender hereby appoints WestLB as its Administrative Agent under and for
purposes of each Financing Document to which it is a party.  WestLB hereby
accepts this appointment and agrees to act as the Administrative Agent for the
Lenders in accordance with the terms of this Agreement.  Each Lender appoints
and authorizes the Administrative Agent to act on behalf of such Lender under
each Financing Document to which it is a party and, in the absence of other
written instructions from the Required Lenders received from time to time by the
Administrative Agent (with respect to which the Administrative Agent agrees that
it will comply, except as otherwise provided in this Section 10.01 or as
otherwise advised by counsel), to exercise such powers hereunder and thereunder
as are specifically delegated to or required of the Administrative Agent by the
terms hereof and thereof, together with such powers as may be reasonably
incidental thereto.  Notwithstanding any provision to the contrary contained
elsewhere in any Financing Document, the Administrative Agent shall not have any
duties or responsibilities, except those expressly set forth herein, nor shall
the Administrative Agent have or be deemed to have any fiduciary relationship
with any Lender, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into any Financing Document or
otherwise exist against the Administrative Agent.  Without limiting the
generality of the foregoing sentence, the use of the term "agent" in this
Agreement with reference to the Administrative Agent is not intended to connote
any fiduciary or other implied (or express) obligations arising under agency
doctrine of any applicable Law.  Instead, such term is used merely as a matter
of market custom, and is intended to create or reflect only an administrative
relationship between independent contracting parties.
 
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(c) Each Lender (in its capacity as Lender and on behalf of itself and its
Affiliates as a potential Interest Rate Protection Provider) hereby appoints
WestLB as its Collateral Agent under and for purposes of each Financing Document
to which it is a party.  WestLB hereby accepts this appointment and agrees to
act as the Collateral Agent for the Senior Secured Parties in accordance with
the terms of this Agreement.  Each of the Lenders hereby irrevocably appoints
and authorizes the Collateral Agent to act as the agent of such Lender for
purposes of acquiring, holding and enforcing any and all Liens on Collateral
granted by any of the Borrowers or the Pledgor to the Collateral Agent in order
to secure any of the Obligations, together with such powers and discretion as
are reasonably incidental thereto.  In this connection the Collateral Agent, and
any co-agents, sub-agents and attorneys-in-fact appointed by the Collateral
Agent, as the case may be, pursuant to Section 10.05 (Delegation of Duties) for
purposes of holding or enforcing any Lien on the Collateral (or any portion
thereof) granted under the Security Documents, or for exercising any rights and
remedies thereunder at the direction of the Collateral Agent, as the case may
be, shall be entitled to the benefits of all provisions of this Article X and
Article XI (Miscellaneous Provisions) (including Section 11.09 (Indemnification
by the Borrowers), as though such co-agents, sub-agents and attorneys-in-fact
were the Collateral Agent under the Financing Documents) as if set forth in full
herein with respect thereto.  Notwithstanding any provision to the contrary
contained elsewhere in any Financing Document, the Collateral Agent shall not
have any duties or responsibilities, except those expressly set forth herein or
in the other Financing Documents, nor shall the Collateral Agent have or be
deemed to have any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into any Financing Document or otherwise exist against the Collateral
Agent.  Without limiting the generality of the foregoing sentence, the use of
the term "agent" in this Agreement with reference to the Collateral Agent is not
intended to connote any fiduciary or other implied (or express) obligations
arising under agency doctrine of any applicable Law.  Instead, such term is used
merely as a matter of market custom, and is intended to create or reflect only
an administrative relationship between independent contracting parties.
 
(d) Each Lender hereby appoints and authorizes the Accounts Bank to act as
depository for the Collateral Agent, on behalf of the Senior Secured Parties,
and as the securities intermediary or bank with respect to the Project Accounts
for the benefit of the Collateral Agent, on behalf of the Senior Secured
Parties, with such powers as are expressly delegated to the Accounts Bank by the
terms of this Agreement, together with such other powers as are reasonably
incidental thereto.  The Accounts Bank hereby accepts this appointment and
agrees to act as the depository for the Collateral Agent, on behalf of the
Senior Secured Parties, and as the securities intermediary or bank with respect
to the Project Accounts, for the benefit of the Collateral Agent, on behalf of
the Senior Secured Parties, in accordance with the terms of this Agreement.  The
Accounts Bank further agrees to accept and hold, as securities intermediary or
as a bank, in its custody and in accordance with the terms of this Agreement,
for the Collateral Agent, on behalf of the Senior Secured Parties, the Project
Accounts and the Accounts Property.  Each Lender also appoints and authorizes
the Accounts Bank to act on its behalf for the purpose of the creation and
perfection of a first priority security interest in favor of the Collateral
Agent, on behalf of the Senior Secured Parties, in the Project Accounts to the
extent that they are deemed under applicable Law not to constitute securities
accounts or deposit accounts and in any Accounts Property that is deemed under
applicable Law not to constitute a Financial Asset.  The Accounts Bank accepts
this appointment and agrees to act as the Accounts Bank for the Collateral
Agent, on behalf and for the benefit of the Senior Secured Parties, for such
purpose and to hold and maintain exclusive dominion and control over the Project
Accounts and any such Accounts Property on behalf of the Collateral Agent,
acting on behalf of the Senior Secured Parties.  Notwithstanding any provision
to the contrary contained elsewhere in any Financing Document, the Accounts Bank
shall not have any duties or responsibilities, except those expressly set forth
herein, nor shall the Accounts Bank have or be deemed to have any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into any
Financing Document or otherwise exist against the Accounts Bank.  Without
limiting the generality of the foregoing sentence, the use of the term "agent"
in this Agreement with reference to the Accounts Bank is not intended to connote
any fiduciary or other implied (or express) obligations arising under agency
doctrine of any applicable Law.  Instead, such term is used merely as a matter
of market custom, and is intended to create or reflect only an administrative
relationship between independent contracting parties.
 
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Section 10.02 Rights as a Lender or Interest Rate Protection Provider.  Each
Person serving as Agent hereunder or under any other Financing Document shall
have the same rights and powers in its capacity as a Lender or Interest Rate
Protection Provider, as the case may be, as any other Lender or Interest Rate
Protection Provider, as the case may be, and may exercise the same as though it
were not an Agent.  Each such Person and its Affiliates may accept deposits
from, lend money to, act as the financial advisor or in any other advisory
capacity for and generally engage in any kind of business with any Borrower or
Affiliate thereof as if such Person were not an Agent hereunder and without any
duty to account therefor to the Lenders, any other Agent or the Interest Rate
Protection Provider.
 
Section 10.03 Exculpatory Provisions.  (a) No Agent shall have any duties or
obligations except those expressly set forth herein and in the other Financing
Documents.  Without limiting the generality of the foregoing, no Agent shall:
 
(i) 
be subject to any fiduciary or other implied duties, regardless of whether a
Default or Event of Default has occurred and is continuing;

 
(ii) 
have any duty to take any discretionary action or exercise any discretionary
powers, except discretionary rights and powers expressly contemplated hereby or
by the other Financing Documents that such Agent is required to exercise as
directed in writing by the Required Lenders (or such other number or percentage
of the Lenders as shall be expressly provided for herein or in the other
Financing Documents); provided that such Agent shall not be required to take any
action that, in its opinion or the opinion of its counsel, may expose the Agent
to liability or that is contrary to any Financing Document or applicable Law; or

 
(iii) 
except as expressly set forth herein and in the other Financing Documents, have
any duty to disclose, nor shall any Agent be liable for any failure to disclose,
any information relating to any Borrower or any of its Affiliates that is
communicated to or obtained by the Person serving as an Agent or any of its
Affiliates in any capacity.

 
(b) No Agent shall be liable for any action taken or not taken by it (i) with
the prior written consent or at the request of the Required Lenders (or such
other number or percentage of the Lenders as may be necessary, or as such Agent
may believe in good faith to be necessary, under the circumstances as provided
in Section 10.01 (Appointment and Authority)), (ii) in connection with any
amendment, consent, approval or waiver which it is permitted under the Financing
Documents to enter into, agree to or grant or (iii) in the absence of its own
gross negligence or willful misconduct.  Each Agent shall be deemed not to have
knowledge of any Default or Event of Default unless and until notice describing
such Default or Event of Default is given to such Agent in writing by a Borrower
or a Lender.
 
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(c) No Agent shall be responsible for or have any duty to ascertain or inquire
into (i) any statement, warranty or representation made in or in connection with
this Agreement or any other Financing Document, (ii) the contents of any
certificate, report or other document delivered hereunder or thereunder or in
connection herewith or therewith, (iii) the performance or observance of any of
the covenants, agreements or other terms or conditions set forth herein or
therein or the occurrence or continuance of any Default or Event of Default,
(iv) the validity, enforceability, effectiveness or genuineness of this
Agreement, any other Financing Document or any other agreement, instrument or
document, or the perfection or priority of any Lien or security interest created
or purported to be created by any Security Document, or (v) the satisfaction of
any condition set forth in Article VI (Conditions Precedent) or elsewhere
herein, other than to confirm receipt of items expressly required to be
delivered to any such Agent.
 
Section 10.04 Reliance by Agents.  Each Agent shall be entitled to rely upon,
and shall not incur any liability for relying upon, any notice, request,
certificate, consent, statement, instrument, document or other writing
(including any electronic message, internet or intranet website posting or other
distribution) believed by it to be genuine and to have been signed, sent or
otherwise authenticated by the proper Person.  Each Agent also may rely upon any
statement made to it orally or by telephone and believed by it to have been made
by the proper Person, and shall not incur any liability for relying thereon.  In
determining compliance with any condition hereunder to the making of a Loan that
by its terms must be fulfilled to the satisfaction of a Lender, each Agent may
presume that such condition is satisfactory to such Lender unless such Agent
shall have received notice to the contrary from such Lender prior to the making
of such Loan.  Each Agent may consult with legal counsel (who may be counsel for
the Borrowers), independent accountants and other experts selected by it, and
shall not be liable for any action taken or not taken by it in accordance with
the advice of any such counsel, accountants or experts.
 
Section 10.05 Delegation of Duties.  Each Agent may perform any and all of its
duties and exercise any and all its rights and powers hereunder or under any
other Financing Document by or through any one or more sub-agents appointed by
such Agent.  Each Agent and any such sub-agent may perform any and all of its
duties and exercise its rights and powers by or through their respective Related
Parties.  The exculpatory provisions of this Article X shall apply to any such
sub-agent and to the Related Parties of such Agent and any such sub-agent, and
shall apply to their respective activities in connection with their acting as
Agent.
 
Section 10.06 Resignation or Removal of Agent.  (a)  Any Agent may resign from
the performance of all its functions and duties hereunder and/or under the other
Financing Documents at any time by giving thirty (30) days' prior notice to the
Borrowers and the Lenders.  Any Agent may be removed at any time by the Required
Lenders.  The Accounts Bank may be removed by the Administrative Agent within
six (6) months of the date hereof if the Accounts Bank is not also a Lender
under this Agreement (provided, that any successor Accounts Bank appointed
following a removal of the Accounts Bank pursuant to this sentence shall be
appointed by the Administrative Agent in consultation with the Borrowers' Agent
(so long as no Default or Event of Default has occurred and is
continuing)).  Such resignation or removal shall take effect upon the
appointment of a successor Agent, in accordance with this Section 10.06.
 
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(b) Upon any notice of resignation by any Agent or upon the removal of any Agent
by the Required Lenders, the Required Lenders shall appoint a successor Agent
hereunder and under each other Financing Document who shall be a commercial bank
having a combined capital and surplus of at least two hundred fifty million
Dollars ($250,000,000).
 
(c) If no successor Agent has been appointed by the Required Lenders within
thirty (30) days after the date such notice of resignation was given by such
Agent or the Required Lenders elected to remove such Agent, and provided that no
Default or Event of Default has occurred and is continuing, the Borrowers may
appoint a replacement Agent (who shall be a commercial bank having a combined
capital and surplus of at least two hundred fifty million Dollars
($250,000,000)) within the immediately succeeding fifteen (15) days.
 
(d) If no successor Agent has been appointed within forty-five (45) days (or, if
a Default or Event of Default has occurred and is continuing, within thirty (30)
days) after the date such notice of resignation was given by such Agent or the
Required Lenders elected to remove such Agent, any Senior Secured Party may
petition any court of competent jurisdiction for the appointment of a successor
Agent.  Such court may thereupon, after such notice, if any, as it may deem
proper, appoint a successor Agent, as applicable, who shall serve as Agent,
hereunder and under each other Financing Document until such time, if any, as
the Required Lenders appoint a successor Agent, as provided above.
 
(e) Upon the acceptance of a successor's appointment as Agent hereunder, such
successor shall succeed to and become vested with all of the rights, powers,
privileges and duties of the retiring (or removed) Agent, and the retiring (or
removed) Agent shall be discharged from all of its duties and obligations
hereunder or under the other Financing Documents.  After the retirement or
removal of any Agent hereunder and under the other Financing Documents, the
provisions of this Article X shall continue in effect for the benefit of such
retiring (or removed) Agent, its sub-agents and their respective Related Parties
in respect of any actions taken or omitted to be taken by any of them while the
retiring Agent was acting as Agent.
 
(f) If a retiring or removed Agent is the Accounts Bank, such Accounts Bank will
promptly transfer all of the Project Accounts and the Accounts Property to the
possession or control of the successor Accounts Bank and will execute and
deliver such notices, instructions and assignments as may be reasonably
necessary or desirable to transfer the rights of the Accounts Bank with respect
to the Project Accounts and the Accounts Property to the successor Accounts
Bank.
 
(g) If a retiring or removed Agent is the Collateral Agent, such Collateral
Agent will promptly transfer any Collateral in the possession or control of such
Collateral Agent to the successor Collateral Agent and will execute and deliver
such notices, instructions and assignments as may be reasonably necessary or
desirable to transfer the rights of the Collateral Agent with respect to such
Collateral property to the successor Collateral Agent.
 
Section 10.07 No Amendment to Duties of Agent Without Consent.  No Agent shall
be bound by any waiver, amendment, supplement or modification of this Agreement
or any other Financing Document that affects its rights or duties hereunder or
thereunder unless such Agent shall have given its prior written consent, in its
capacity as Agent, thereto.
 
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Section 10.08 Non-Reliance on Agent and Other Lenders.  Each Lender acknowledges
that it has, independently and without reliance upon any Agent or any other
Lender or any of their Related Parties and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement and make its Loans.  Each Lender also
acknowledges that it will, independently and without reliance upon any Agent or
any other Lender or any of their Related Parties and based on such documents and
information as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based upon this Agreement,
any other Financing Document or any related agreement or any document furnished
hereunder or thereunder.
 
Section 10.09 No Lead Arranger, Syndication Agent, Bookrunner Duties.  Anything
herein to the contrary notwithstanding, no Lead Arranger, Syndication Agent or
Sole Lead Bookrunner shall have any powers, duties or responsibilities under
this Agreement or any of the other Financing Documents, except in its capacity,
as applicable, as an Agent or a Lender hereunder.
 
Section 10.10 Collateral Agent May File Proofs of Claim.  (a) In case of the
pendency of any bankruptcy or insolvency proceeding relative to any Borrower or
the Pledgor (including any event described in Section 9.01(i) (Events of Default
- Bankruptcy; Insolvency), the Collateral Agent (irrespective of whether the
principal of any Loan shall then be due and payable as herein expressed or by
declaration or otherwise and irrespective of whether the Collateral Agent or any
other Senior Secured Party shall have made any demand on any Borrower) shall be
entitled and empowered, but shall not be obligated to, by intervention in such
proceeding or otherwise:
 
(i) 
to file and prove a claim for the whole amount of the principal and interest
owing and unpaid in respect of the Loans and all other Obligations that are
owing and unpaid and to file such other documents as may be necessary or
advisable in order to have the claims of the Senior Secured Parties (including
any claim for the reasonable compensation, expenses, disbursements and advances
of the Senior Secured Parties and their respective agents and counsel and all
other amounts due the Senior Secured Parties under Sections 3.13 (Fees), 11.07
(Costs and Expenses) and 11.09 (Indemnification by the Borrowers)) allowed in
such judicial proceeding;

 
(ii) 
to collect and receive any monies or other property payable or deliverable on
any such claims and to distribute the same; and

 
(iii) 
any custodian, receiver, assignee, trustee, liquidator, sequestrator or other
similar official in any such judicial proceeding is hereby authorized by each
Lender to make such payments to the Collateral Agent and, in the event that the
Collateral Agent may consent to the making of such payments directly to the
Lenders, to pay to the Collateral Agent any amount due for the reasonable
compensation, expenses, disbursements and advances of the Agents and their
respective agents and counsel, and any other amounts due the Agents under
Sections 3.13 (Fees), 11.07 (Costs and Expenses) and 11.09 (Indemnification by
the Borrowers).

 
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(b) Nothing contained herein shall be deemed to authorize the Collateral Agent
to authorize or consent to or accept or adopt on behalf of any Lender any plan
of reorganization, arrangement, adjustment or composition affecting the
Obligations or the rights of any Lender or to authorize the Collateral Agent to
vote in respect of the claim of any Lender in any such proceeding.
 
Section 10.11 Collateral Matters.  (a)  The Lenders irrevocably authorize the
Collateral Agent to release any Lien on any property granted to or held by the
Collateral Agent under any Financing Document (i) upon the occurrence of the
Discharge Date, (ii) if approved, authorized or ratified in writing in
accordance with Section 11.01 (Amendments, Etc.) or (iii) as permitted pursuant
to the terms of the Financing Documents (including as contemplated by Sections
7.02(f) (Negative Covenants-Asset Dispositions) and 7.04 (Release of
Borrowers)).
 
(b) Upon request by the Collateral Agent at any time, the Lenders will confirm
in writing the Collateral Agent's authority to release its interest in
particular types or items of property pursuant to this Section 10.11.  In each
case as specified in this Section 10.11, the Collateral Agent will, at the
Borrowers' expense, execute and deliver to the applicable Borrower or the
Pledgor, as the case may be, such documents as such Person may reasonably
request to evidence the release of such item of Collateral from the assignment
and security interest granted under the Security Documents in accordance with
the terms of the Financing Documents and this Section 10.11.
 
Section 10.12 Copies.  Each Agent shall give prompt notice to each Lender of
each material notice or request required or permitted to be given to such Agent
by the Borrowers pursuant to the terms of this Agreement or any other Financing
Document (other than instructions for the transfer of funds from Project
Accounts pursuant to Article VIII (Project Accounts) or if otherwise
concurrently delivered to the Lenders by the Borrowers).  Each Agent will
distribute to each Lender each document or instrument (including each document
or instrument delivered by any Borrower to such Agent pursuant to Article V
(Representations and Warranties), Article VI (Conditions Precedent) and
Article VII (Covenants)) received for its account and copies of all other
communications received by such Agent from the Borrowers for distribution to the
Lenders by such Agent in accordance with the terms of this Agreement or any
other Financing Document.
 
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ARTICLE XI
 
MISCELLANEOUS PROVISIONS
 
Section 11.01 Amendments, Etc.  No amendment or waiver of any provision of this
Agreement or any other Financing Document, and no consent to any departure by
any Borrower, Borrowers' Agent or any other Loan Party therefrom, shall be
effective unless in writing signed by the Required Lenders (or, if expressly
contemplated hereby, the Administrative Agent) and, in the case of an amendment,
the Borrowers, Borrowers' Agent or, as the case may be, the applicable Loan
Party, and in each such case acknowledged by the Administrative Agent, and each
such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given; provided that no such amendment, waiver or
consent shall:
 
(a) extend or increase the Commitment of any Lender (or reinstate any Commitment
terminated pursuant to Section 9.03(a) (Action Upon Other Event of Default)
without the prior written consent of such Lender (other than any Non-Voting
Lender);
 
(b) postpone any date scheduled for any payment of principal or interest under
Section 3.01 (Repayment of Construction Loan Fundings), 3.02 (Repayment of Term
Loan Fundings),3.03 (Repayment of Working Capital Loan Fundings) or 3.04
(Interest Payment Dates), or any date fixed by the Administrative Agent for the
payment of fees or other amounts due to the Lenders (or any of them) hereunder
or under any other Financing Document without the prior written consent of each
Lender affected thereby (other than any Non-Voting Lender);
 
(c) reduce the principal of, or the rate of interest specified herein on, any
Loan, or any Fees or other amounts (including the Required Cash Sweep or any
other mandatory prepayments under Section 3.10 (Mandatory Prepayment) payable
hereunder or under any other Financing Document to any Lender without the prior
written consent of each Lender directly affected thereby (other than any
Non-Voting Lender); provided that only the prior written consent of the Required
Lenders shall be necessary to amend the definition of Default Rate or to waive
any obligation of the Borrowers to pay interest at the Default Rate;
 
(d) change the order of application of any reduction in the Commitments or any
prepayment of Loans from the application thereof set forth in the applicable
provisions of Section 2.08 (Termination or Reduction of Commitment),
Section 3.09 (Optional Prepayment) or 3.10 (Mandatory Prepayment), respectively,
in any manner without the prior written consent of each Lender affected thereby
(other than any Non-Voting Lender);
 
(e) change any provision of this Section 11.01, the definition of Required
Lenders or any other provision of any Financing Document specifying the number
or percentage of Lenders required to amend, waive or otherwise modify any rights
under any Financing Document (including any such provision specifying the number
or percentage of Lenders required to waive any Event of Default or forbear from
taking any action or pursuing any remedy with respect to any Event of Default),
or make any determination or grant any consent under any Financing Document,
without the prior written consent of each Lender (other than any Non-Voting
Lender); or
 
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(f) other than in accordance with Section 7.04 (Release of Borrower), release
(i) any Borrower from all or substantially all of its obligations under any
Financing Document, or (ii) all or substantially all of the Collateral in any
transaction or series of related transactions, without the prior written consent
of each Lender (other than any Non-Voting Lender);
 
and provided further that (i) no amendment, waiver or consent shall, unless in
writing and signed by an Agent in addition to the Lenders required above, affect
the rights or duties of, or any fees or other amounts payable to, such Agent
under this Agreement or any other Financing Document; and (ii) Section 11.03(h)
(Assignments) may not be amended, waived or otherwise modified without the prior
written consent of each Granting Lender all or any part of whose Loan is being
funded by an SPV at the time of such amendment, waiver or other modification.
 
Notwithstanding the other provisions of this Section 11.01, the Borrowers, the
Borrowers' Agent, the Collateral Agent and the Administrative Agent may (but
shall have no obligation to) amend or supplement the Financing Documents without
the consent of any Lender: (i) to cure any ambiguity, defect or inconsistency;
(ii) to make any change that would provide any additional rights or benefits to
the Lenders; (iii) to make, complete or confirm any grant of Collateral
permitted or required by this Agreement or any of the Security Documents or any
release of any Collateral that is otherwise permitted under the terms of this
Agreement and the Security Documents; or (iv) to update the Schedules in
connection with the initial Funding for each Plant.
 
Section 11.02 Applicable Law; Jurisdiction; Etc.  (a) GOVERNING LAW.  THIS
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK, UNITED STATES OF AMERICA, WITHOUT REFERENCE TO CONFLICTS
OF LAWS (OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW).
 
(b) SUBMISSION TO JURISDICTION.  EACH BORROWER AND THE BORROWERS' AGENT
IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE
NON-EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW
YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF
NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER FINANCING DOCUMENT, OR
FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO
IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH
ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT
OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL
COURT.  EACH OF THE PARTIES HERETO 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.  NOTHING IN THIS AGREEMENT OR IN ANY OTHER FINANCING DOCUMENT SHALL AFFECT
ANY RIGHT THAT ANY SENIOR SECURED PARTY MAY OTHERWISE HAVE TO BRING ANY ACTION
OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER FINANCING DOCUMENT AGAINST
ANY BORROWER OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.
 
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(c) WAIVER OF VENUE.  EACH BORROWER AND THE BORROWERS' AGENT IRREVOCABLY AND
UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION
OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER
FINANCING DOCUMENT IN ANY COURT REFERRED TO IN SECTION 11.02(b).  EACH OF THE
PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH
ACTION OR PROCEEDING IN ANY SUCH COURT.
 
(d) Appointment of Process Agent and Service of Process.  Each of the Borrowers
and the Borrowers' Agent hereby irrevocably appoints CT Corporation System with
an office on the date hereof at 111 Eighth Avenue, New York, New York 10011, as
its agent to receive on behalf of itself services of copies of the summons and
complaint and any other process that may be served in any such action or
proceeding in the State of New York.  If for any reason the Process Agent shall
cease to act as such for any Person, such Person hereby agrees to designate a
new agent in New York City on the terms and for the purposes of this
Section 11.02 reasonably satisfactory to the Administrative Agent.  Such service
may be made by mailing or delivering a copy of such process to such Person in
care of the Process Agent at the Process Agent's above address, and each of the
Borrowers and the Borrowers' Agent hereby irrevocably authorizes and directs the
Process Agent to accept such service on its behalf.  As an alternative method of
service, each of the Borrowers and the Borrowers' Agent also irrevocably
consents to the service of any and all process in any such action or proceeding
by the air mailing of copies of such process to such Person at its then
effective notice addresses pursuant to Section 11.12 (Notices and Other
Communications).  Nothing in this Agreement shall affect any right that any
party may otherwise have to bring any action or proceeding relating to this
Agreement or any other Financing Document in the courts of any jurisdiction.
 
(e) Immunity.  To the extent that any Borrower or the Borrowers' Agent has or
hereafter may acquire any immunity from jurisdiction of any court or from any
legal process (whether through service or notice, attachment prior to judgment,
attachment in aid of execution, execution or otherwise) with respect to itself
or its property, each of the Borrowers and the Borrowers' Agent hereby
irrevocably and unconditionally waives such immunity in respect of its
obligations under the Financing Documents and, without limiting the generality
of the foregoing, agrees that the waivers set forth in this Section 11.02(e)
shall have the fullest scope permitted under the Foreign Sovereign Immunities
Act of 1976 of the United States and are intended to be irrevocable for purposes
of such Act.
 
(f) WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR ANY OTHER FINANCING DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY).  EACH PARTY HERETO (i) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (ii) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE
BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER FINANCING DOCUMENTS BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 11.02.
 
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Section 11.03 Assignments.  (a) The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns permitted hereby, except that neither any Borrower nor
the Borrowers' Agent may assign or otherwise transfer any of its rights or
obligations hereunder without the prior written consent of each Agent and
Lender, and no Lender may assign or otherwise transfer any of its rights or
obligations hereunder except (i) to an Eligible Assignee in accordance with
Section 11.03(b), (ii) by way of participation in accordance with
Section 11.03(d), (iii) by way of pledge or assignment of a security interest
subject to the restrictions of Section 11.03(f), or (iv) to an SPV in accordance
with the provisions of Section 11.03(h) (and any other attempted assignment or
transfer by any party hereto shall be null and void).  Nothing in this
Agreement, express or implied, shall be construed to confer upon any Person
(other than the parties hereto, their respective successors and assigns
permitted hereby, Participants to the extent provided in this Section 11.03 and,
to the extent expressly contemplated hereby, the Related Parties of each Agent
and Lender) any legal or equitable right, remedy or claim under or by reason of
this Agreement.
 
(b)  Any Lender may at any time after the date hereof assign to one or more
Eligible Assignees all or a portion of its rights and obligations under this
Agreement (including all or a portion of its Commitment and the Loans at the
time owing to it); provided that (i) except in the case of an assignment of the
entire remaining amount of the assigning Lender's Commitment and the Loans at
the time owing to it or in the case of an assignment to a Lender or an Affiliate
of a Lender or an Approved Fund with respect to a Lender, the Commitment (which
for this purpose includes the Loans outstanding thereunder) or, if the
applicable Commitment is not then in effect, the principal outstanding balance
of the Loans of the assigning Lender subject to each such assignment, determined
as of the date the Lender Assignment Agreement with respect to such assignment
is delivered to the Administrative Agent or, if "Trade Date" is specified in the
Lender Assignment Agreement, as of the Trade Date, shall not be less than three
million Dollars ($3,000,000) and in integral multiples of one million Dollars
($1,000,000) in excess thereof, unless the Administrative Agent otherwise
consents in writing; (ii) each partial assignment shall be made as an assignment
of a proportionate part of all the assigning Lender's rights and obligations
under this Agreement with respect to the Loan or the Commitment assigned;
(iii) the parties to each assignment shall execute and deliver to the
Administrative Agent a Lender Assignment Agreement, together with a processing
and recordation fee of two thousand five hundred Dollars ($2,500); provided that
(A) no such fee shall be payable in the case of an assignment to a Lender, an
Affiliate of a Lender or an Approved Fund with respect to a Lender and (B) in
the case of contemporaneous assignments by a Lender to one or more Funds managed
by the same investment advisor (which Funds are not then Lenders hereunder),
only a single such two thousand five hundred Dollars ($2,500) fee shall be
payable for all such contemporaneous assignments; (iv) the Eligible Assignee, if
it is not a Lender prior to such assignment, shall deliver to the Administrative
Agent an administrative questionnaire and (v) the assignor shall provide notice
of such assignment to the Borrowers' Agent.  Subject to acceptance and recording
thereof by the Administrative Agent pursuant to Section 11.03(c), on and after
the effective date specified in each Lender Assignment Agreement, the Eligible
Assignee thereunder shall be a party to this Agreement and, to the extent of the
interest assigned by such Lender Assignment Agreement, have the rights and
obligations of a Lender under this Agreement, and the assigning Lender
thereunder shall, to the extent of the interest assigned by such Lender
Assignment Agreement, be released from its obligations under this Agreement
(and, in the case of a Lender Assignment Agreement covering all of the assigning
Lender's rights and obligations under this Agreement, such Lender shall cease to
be a party hereto but shall continue to be entitled to the benefits of
Sections 4.01 (Eurodollar Rate Lending Unlawful), 4.03 (Increased Eurodollar
Loan Costs), 4.05 (Funding Losses), 11.07 (Costs and Expenses) and 11.09
(Indemnification by the Borrowers) with respect to facts and circumstances
occurring prior to the effective date of such assignment).  Upon request, the
Borrowers (at their expense) shall execute and deliver a Note to the assignee
Lender.  Any assignment or transfer by a Lender of rights or obligations under
this Agreement that does not comply with this Section 11.03(b) shall be treated
for purposes of this Agreement as a sale by such Lender of a participation in
such rights and obligations in accordance with Section 11.03(d).
 
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(c) The Administrative Agent, acting solely for this purpose as an agent of the
Borrowers, shall maintain at the Administrative Agent's office a copy of each
Lender Assignment Agreement delivered to it and a register for the recordation
of the names and addresses of the Lenders, and the Commitment of, and principal
amount of the Loans owing to, each Lender pursuant to the terms hereof from time
to time (the "Register").  The entries in the Register shall be conclusive, and
the Borrowers, the Agents and the Lenders may treat each Person whose name is
recorded in the Register pursuant to the terms hereof as a Lender hereunder for
all purposes of this Agreement, notwithstanding notice to the contrary.  The
Register shall be available for inspection by the Borrowers at any reasonable
time and from time to time upon reasonable prior notice.  In addition, at any
time that a request for a consent for a material or other substantive change to
the Financing Documents is pending, any Lender may request and receive from the
Administrative Agent a copy of the Register.
 
(d) Any Lender may at any time, without the consent of, or notice to, the
Borrowers, the Borrowers' Agent or any Agent, sell participations to any Person
(each, a "Participant") in all or a portion of such Lender's rights and/or
obligations under this Agreement (including all or a portion of its Commitment
and/or the Loans owing to it); provided that (i) such Lender's obligations under
this Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (iii) the Borrowers, the Borrowers' Agent, the Agents and the other Lenders
shall continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement.  Any agreement or
instrument pursuant to which a Lender sells such a participation shall provide
that such Lender shall retain the sole right to enforce this Agreement and to
approve any amendment, modification or waiver of any provision of this
Agreement; provided that such agreement or instrument may provide that such
Lender will not, without the consent of the Participant, agree to any amendment,
waiver or other modification described in the first proviso to Section 11.01
(Amendments, Etc.) that directly affects such Participant.  Subject to
Section 11.03(e), the Borrowers agree that each Participant shall be entitled to
the benefits of Sections 4.01 (Eurodollar Rate Lending Unlawful), 4.03
(Increased Eurodollar Loan Costs) and 4.05 (Funding Losses), to the same extent
as if it were a Lender and had acquired its interest by assignment pursuant to
Section 11.03(b).  To the extent permitted by law, each Participant also shall
be entitled to the benefits of Section 11.15 (Right of Setoff) as though it were
a Lender; provided such Participant agrees to be subject to Section 3.15
(Sharing of Payments) as though it were a Lender.
 
(e) A Participant shall not be entitled to receive any greater payment under
Section 4.01 (Eurodollar Rate Lending Unlawful) or 4.03 (Increased Eurodollar
Loan Costs) than the applicable Lender would have been entitled to receive with
respect to the participation sold to such Participant, unless the sale of the
participation to such Participant is made with the prior written consent of the
Borrowers' Agent.
 
(f) Any Lender may at any time pledge or assign a security interest in all or
any portion of its rights under this Agreement (including under its Notes, if
any) to secure obligations of such Lender, including any pledge or assignment to
secure obligations to a Federal Reserve Bank; provided that no such pledge or
assignment shall release such Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto.
 
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(g) The words "execution," "signed," "signature," and words of like import in
any Lender Assignment Agreement shall be deemed to include electronic signatures
or the keeping of records in electronic form, each of which shall be of the same
legal effect, validity or enforceability as a manually executed signature or the
use of a paper-based recordkeeping system, as the case may be, to the extent and
as provided for in any applicable Law, including the Federal Electronic
Signatures in Global and National Commerce Act, the New York State Electronic
Signatures and Records Act, or any other similar state laws based on the Uniform
Electronic Transactions Act.
 
(h) Notwithstanding anything to the contrary contained herein, any Lender (a
"Granting Lender") may grant to a special purpose funding vehicle identified as
such in writing from time to time by the Granting Lender to the Administrative
Agent and the Borrowers (an "SPV") the option to provide all or any part of any
Loan that such Granting Lender would otherwise be obligated to make pursuant to
this Agreement; provided that (i) nothing herein shall constitute a commitment
by any SPV to fund any Loan, and (ii) if an SPV elects not to exercise such
option or otherwise fails to make all or any part of such Loan, the Granting
Lender shall be obligated to make such Loan pursuant to the terms hereof or, if
it fails to do so, to make such payment to the Administrative Agent as is
required under Section 3.15 (Sharing of Payments).  Each party hereto hereby
agrees that (A) neither the grant to any SPV nor the exercise by any SPV of such
option shall increase the costs or expenses or otherwise increase or change the
obligations of the Borrowers under this Agreement (including their obligations
under Section 4.03 (Increased Eurodollar Loan Costs), (B) no SPV shall be liable
for any indemnity or similar payment obligation under this Agreement for which a
Lender would be liable, and (C) the Granting Lender shall for all purposes,
including the approval of any amendment, waiver or other modification of any
provision of any Financing Document, remain the lender of record hereunder.  The
making of a Loan by an SPV hereunder shall utilize the Commitment of the
Granting Lender to the same extent, and as if, such Loan were made by such
Granting Lender.  In furtherance of the foregoing, each party hereto hereby
agrees (which agreement shall survive the termination of this Agreement) that,
prior to the date that is one (1) year and one (1) day after the payment in full
of all outstanding commercial paper or other senior debt of any SPV, it will not
institute against, or join any other Person in instituting against, such SPV any
bankruptcy, reorganization, arrangement, insolvency, or liquidation proceeding
under the laws of the United States or any State thereof.  Notwithstanding
anything to the contrary contained herein, any SPV may (1) with notice to, but
without prior consent of the Borrowers and the Administrative Agent and without
paying any processing fee therefor, assign all or any portion of its right to
receive payment with respect to any Loan to the Granting Lender and (2) disclose
on a confidential basis any non-public information relating to its funding of
any Loan to any rating agency, commercial paper dealer or provider of any surety
or Guarantee or credit or liquidity enhancement to such SPV.
 
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(i) Following the occurrence of a Successful Syndication, the Borrowers will be
permitted, with the approval of the Administrative Agent and the Issuing Bank,
to replace (with one or more replacement Lenders) any Lender that (x) fails to
approve a Substitute Facility upon the Borrowers' written request for such
approval, (y) provides notice under Section 4.01(a) (Eurodollar Rate Lending
Unlawful) that it is unable to make, maintain or fund any Loan as a Eurodollar
Loan or requests reimbursement for, or is otherwise entitled to, amounts owing
pursuant to Section 4.03 (Increased Eurodollar Loan Costs), Section 4.06
(Increased Capital Costs) or Section 4.07(c) (Taxes-Indemnification by
Borrowers) or (z) fails to approve any request for a consent or waiver requested
of the Lenders in writing by the Borrowers; provided, that (i) such replacement
does not conflict with any Law or any determination of an arbitrator or a court
or other Governmental Authority, in each case applicable to any Borrower or such
Lender or to which any Borrower or such Lender or any of their respective
property is subject, (ii) no Default or Event of Default shall have occurred and
be continuing at the time of such replacement, (iii) the replacement Lender
shall purchase, at par, the Loans and all other amounts owing to such replaced
Lender prior to the date of replacement, (iv) the Borrowers shall be liable to
such replaced Lender under Section 4.05 (Funding Losses) if any Eurodollar Loan
owing to such replaced Lender is be prepaid (or purchased) other than on the
last day of the Interest Period relating thereto, (v) until such time as such
replacement is consummated, the Borrowers shall pay all additional amounts (if
any) required pursuant to Section 4.03 (Increased Eurodollar Loan Costs),
Section 4.06 (Increased Capital Costs) or Section 4.07(c) (Taxes-Indemnification
by Borrowers), as the case may be, (vi)the replacement Lender is an Eligible
Assignee, (vii) such replacement is made in accordance with the provisions of
Section 11.03(b) (provided, that the Borrower shall be obligated to pay the
registration and processing fee), (viii) any such replacement shall not be
deemed to be a waiver of any rights that the Borrower, any Agent or any other
Lender may have against the replaced Lender, and (ix) prior to any such
replacement, (A) in the case of any replacement of a Lender that fails to
approve a Substitute Facility, the Lender to be replaced shall have delivered a
written notice indicating that it will not approve such request for a Substitute
Facility, (B) in the case of any replacement of a Lender that has claimed
increased costs, the Lender to be replaced shall not have delivered a notice to
the Borrowers under Section 4.01(b) (Eurodollar Rate Lending Unlawful) that it
is no longer unable to make, maintain or fund any Loan as a Eurodollar Loan and
shall have taken no action under Section 4.04 (Obligation To Mitigate) so as to
eliminate the need for payment of amounts owing pursuant to Section 4.03
(Increased Eurodollar Loan Costs), Section 4.06 (Increased Capital Costs) or
Section 4.07(c) (Taxes-Indemnification by Borrowers), as the case may be or
(C) in the case of any replacement of a Lender that fails to provide a consent
or waiver requested by the Borrowers, the Lender to be replaced shall have
delivered a written notice indicating that it will not grant such request.
 
Section 11.04 Benefits of Agreement.  Nothing in this Agreement or any other
Financing Document, express or implied, shall give to any Person, other than the
parties hereto, and each of their successors and permitted assigns under this
Agreement or any other Financing Document, any benefit or any legal or equitable
right or remedy under this Agreement.
 
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Section 11.05 Borrowers' Agent.  Each Borrower hereby appoints and authorizes
Pacific Holding, and Pacific Holding hereby accepts such appointment, as such
Borrower's Borrowers' Agent to act as agent on such Borrower's behalf and to
make any representations or certifications, deliver and receive any notices or
other communications, and otherwise represent and act on behalf of such Borrower
under the Financing Documents, and to comply with all covenants, conditions and
other provisions of the Financing Documents required to be satisfied by the
Borrowers' Agent.  Each Borrower hereby acknowledges and agrees that it will be
bound by any action or inaction taken by the Borrowers' Agent as if such action
or inaction had been taken by such Borrower.
 
Section 11.06 Consultants.  (a) The Required Lenders or the Administrative Agent
may, in their sole discretion, appoint any Consultant for the purposes specified
herein.  If any of the Consultants is removed or resigns and thereby ceases to
act for purposes of this Agreement and the other Financing Documents, the
Required Lenders or the Administrative Agent, as the case may be, shall
designate a Consultant in replacement.
 
(b) The Borrowers shall reimburse each Consultant appointed hereunder for the
reasonable fees and reasonable and documented out-of-pocket expenses of such
Consultant retained on behalf of the Lenders pursuant to this Section 11.06.
 
(c) In all cases in which this Agreement provides for any Consultant to "agree,"
"approve," "certify" or "confirm" any report or other document or any fact or
circumstance, such Consultant may make the determinations and evaluations
required in connection therewith based upon information provided by the
Borrowers, the Borrowers' Agent or other sources reasonably believed by such
Consultant to be knowledgeable and responsible, without independently verifying
such information; provided that, notwithstanding the foregoing, such Consultant
shall engage in such independent investigations or findings as it may from time
to time deem necessary in its reasonable discretion to support the
determinations and evaluations required of it.
 
Section 11.07 Costs and Expenses.  Each Borrower shall pay (a) all reasonable
and documented out-of-pocket expenses incurred by the Lead Arrangers and the
Agents (including all reasonable fees, costs and expenses of counsel for any
Agent), in connection with the preparation, negotiation, syndication, execution
and delivery of this Agreement and the other Financing Documents (whether or not
the transactions contemplated hereby or thereby are consummated); (b) all
reasonable and documented out-of-pocket expenses incurred by the Agents
(including all reasonable fees, costs and expenses of counsel for any Agent), in
connection with any amendments, modifications or waivers of the provisions of
this Agreement and the other Financing Documents (whether or not the
transactions contemplated hereby or thereby are consummated); (c) all reasonable
and documented out-of-pocket expenses incurred by the Agents (including all
reasonable fees, costs and expenses of counsel for any Agent), in connection
with the administration of this Agreement and the other Financing Documents
(whether or not the transactions contemplated hereby or thereby are
consummated); and (d) all out-of-pocket expenses incurred by the Agents or any
Lender (including all fees, costs and expenses of counsel for any Senior Secured
Party), in connection with the enforcement or protection of its rights in
connection with this Agreement and the other Financing Documents, including its
rights under this Section 11.07, including in connection with any workout,
restructuring or negotiations in respect of the Obligations.
 
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Section 11.08 Counterparts; Effectiveness.  This Agreement may be executed in
counterparts (and by different parties hereto in different counterparts), each
of which shall constitute an original, but all of which when taken together
shall constitute a single contract.  This Agreement shall become effective when
it has been executed by the Administrative Agent and when the Administrative
Agent has received counterparts hereof that, when taken together, bear the
signatures of each of the other parties hereto.  Delivery of an executed
counterpart of a signature page of this Agreement by telecopy or portable
document format ("pdf") shall be effective as delivery of a manually executed
counterpart of this Agreement.
 
Section 11.09 Indemnification by the Borrowers.  (a) Each Borrower hereby agrees
to indemnify each Agent (and any sub-agent thereof), each Lender and each
Related Party of any of the foregoing Persons (each such Person being called an
"Indemnitee") against, and hold each Indemnitee harmless from, any and all
losses, claims, damages, liabilities and related expenses (including all
reasonable and documented fees, costs and out-of-pocket expenses of counsel for
any Indemnitee), incurred by any Indemnitee or asserted against any Indemnitee
by any third party or by any Borrower arising out of, in connection with, or as
a result of:
 
(i) 
the execution or delivery of this Agreement, any other Transaction Document or
any agreement or instrument contemplated hereby or thereby, the performance by
the parties hereto or thereto of their respective obligations hereunder or
thereunder or the consummation of the transactions contemplated hereby or
thereby;

 
(ii) 
any Loan or the use or proposed use of the proceeds therefrom;

 
(iii) 
any actual or alleged presence, release or threatened release of Materials of
Environmental Concern on or from any Plant or any property owned, leased or
operated by any Borrower, or any liability pursuant to an Environmental Law
related in any way to any Plant, any Site or the Borrowers;

 
(iv) 
any actual or prospective claim, litigation, investigation or proceeding
relating to any of the foregoing, whether based on contract, tort or any other
theory, whether brought by a third party or by any Borrower or any of such
Borrower's members, managers or creditors, and regardless of whether any
Indemnitee is a party thereto and whether or not any of the transactions
contemplated hereunder or under any of the other Financing Documents is
consummated, in all cases, whether or not caused by or arising, in whole or in
part, out of the comparative, contributory or sole negligence of the Indemnitee;
and/or

 
(v) 
any claim, demand or liability for broker's or finder's or placement fees or
similar commissions, whether or not payable by the Borrowers, alleged to have
been incurred in connection with such transactions, other than any broker's or
finder's fees payable to Persons engaged by the Lenders or the Agents without
the knowledge of the Borrowers;

 
provided that such indemnity shall not, as to any Indemnitee, be available to
the extent that such losses, claims, damages, liabilities or related expenses
are determined by a court of competent jurisdiction by final and Non-Appealable
judgment to have resulted from the gross negligence or willful misconduct of
such Indemnitee.
 
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(b) To the extent that any of the Borrowers for any reason fails to indefeasibly
pay any amount required under Section 11.09(a) to be paid by it to any Agent (or
any sub-agent thereof) or any Related Party of any of the foregoing, each Lender
severally agrees to pay to such Agent (or any such sub-agent), or such Related
Party, as the case may be, such Lender's ratable share (determined as of the
time that the applicable unreimbursed expense or indemnity payment is sought) of
such unpaid amount; provided that the unreimbursed expense or indemnified loss,
claim, damage, liability or related expense, as the case may be, was incurred by
or asserted against such Agent (or any sub-agent thereof) in its capacity as
such, or against any Related Party of any of the foregoing acting for such Agent
(or any sub-agent thereof) in connection with such capacity.  The obligations of
the Lenders under this Section 11.09(b) are subject to the provisions of
Section 2.06(d) (Funding of Loans).  The obligations of the Lenders to make
payments pursuant to this Section 11.09(b) are several and not joint and shall
survive the payment in full of the Obligations and the termination of this
Agreement.  The failure of any Lender to make payments on any date required
hereunder shall not relieve any other Lender of its corresponding obligation to
do so on such date, and no Lender shall be responsible for the failure of any
other Lender to do so.
 
(c) Except as otherwise provided in Article VI (Conditions Precedent), all
amounts due under this Section 11.09 shall be payable not later than ten
(10) Business Days after demand therefor.
 
Section 11.10 Interest Rate Limitation.  Notwithstanding anything to the
contrary contained in any Financing Document, the interest paid or agreed to be
paid under the Financing Documents shall not exceed the maximum rate of
non-usurious interest permitted by applicable Law (the "Maximum Rate").  If any
Agent or any Lender shall receive interest in an amount that exceeds the Maximum
Rate, the excess interest shall be applied to the principal of the Loans or, if
it exceeds such unpaid principal, refunded to the Borrowers.  In determining
whether the interest contracted for, charged, or received by any Senior Secured
Party exceeds the Maximum Rate, such Person may, to the extent permitted by
applicable Law, (a) characterize any payment that is not principal as an
expense, fee, or premium rather than interest, (b) exclude prepayments and the
effects thereof, and (c) amortize, prorate, allocate, and spread in equal or
unequal parts the total amount of interest throughout the contemplated term of
the Obligations hereunder.
 
Section 11.11 No Waiver; Cumulative Remedies.  No failure by any Senior Secured
Party to exercise, and no delay by any such Person in exercising, any right,
remedy, power or privilege hereunder or under any other Financing Document shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or
privilege.  The rights, remedies, powers and privileges herein provided, and
provided under each other Financing Document, are cumulative and not exclusive
of any rights, remedies, powers and privileges provided by law.
 
Section 11.12 Notices and Other Communications.  (a)  Except in the case of
notices and other communications expressly permitted to be given by telephone
(and except as provided in Section 11.12(b)), all notices and other
communications provided for herein shall be in writing and shall be delivered by
hand or overnight courier service, mailed by certified or registered mail or
sent by telecopier or electronic mail as follows, and all notices and other
communications expressly permitted hereunder to be given by telephone shall be
made to the applicable telephone number, as follows:
 
(i) 
if to the Borrowers, the Borrowers' Agent or any Agent, to the address,
telecopier number, electronic mail address or telephone number specified for
such Person on Schedule 11.12;

 
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(ii) 
if to any Lender, to the address, telecopier number, electronic mail address or
telephone number specified in its administrative questionnaire; and

 
(iii) 
if to any Interest Rate Protection Provider, to the address, telecopier, number,
electronic mail address or telephone number specified on Schedule 11.12.

 
(b) Notices sent by hand or overnight courier service, or mailed by certified or
registered mail, shall be deemed to have been given when received; notices sent
by telecopier shall be deemed to have been given when sent (except that, if not
given during normal business hours for the recipient, shall be deemed to have
been given at the opening of business on the next Business Day for the
recipient).  Notices delivered through electronic communications to the extent
provided in Section 11.12(d) shall be effective as provided in
Section 11.12(d).  Any notice sent to the Borrowers' Agent shall be deemed to
have been given to all Borrowers.
 
(c) Notices and other communications to the Senior Secured Parties hereunder may
be delivered or furnished by electronic communication (including e-mail and
internet or intranet websites) pursuant to procedures approved by the
Administrative Agent; provided that the foregoing shall not apply to notices to
any Lender pursuant to Article II (Commitments and Funding) if such Lender has
notified the Administrative Agent that it is incapable of receiving notices
under such Article II (Commitments and Funding) by electronic
communication.  Each of the Administrative Agent or the Borrowers may, in its
discretion, agree to accept notices and other communications to it hereunder by
electronic communications pursuant to procedures approved by it; provided that
approval of such procedures may be limited to particular notices or
communications.
 
(d) Unless the Administrative Agent otherwise prescribes, (i) notices and other
communications sent to an e-mail address shall be deemed received upon the
sender's receipt of an acknowledgement from the intended recipient (such as by
the "return receipt requested" function, as available, return e-mail or other
written acknowledgement); provided that if such notice or other communication is
not received during the normal business hours of the recipient, such notice or
communication shall be deemed to have been received at the opening of business
on the next Business Day for the recipient, and (ii) notices or communications
posted to an internet or intranet website shall be deemed received upon the
deemed receipt by the intended recipient at its e-mail address as described in
Section 11.12(d)(i) of notification that such notice or communication is
available and identifying the website address therefor.
 
(e) Each of the Borrowers, the Borrowers' Agent and the Agents may change its
address, telecopier or telephone number for notices and other communications
hereunder by notice to the other parties hereto.  Each Lender and Interest Rate
Protection Provider may change its address, telecopier or telephone number for
notices and other communications hereunder by notice to the Borrowers, the
Borrowers' Agent and each Agent.
 
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(f) The Senior Secured Parties shall be entitled to rely and act upon any
written notices purportedly given by or on behalf of the Borrowers or the
Borrowers' Agent even if (i) such notices were not made in a manner specified
herein, were incomplete or were not preceded or followed by any other form of
notice specified herein, or (ii) the terms thereof, as understood by the
recipient, varied from any confirmation thereof.  The Borrowers shall indemnify
each Senior Secured Party and the Related Parties of each of them from all
losses, costs, expenses and liabilities resulting from the reliance by such
Person on each notice purportedly given by or on behalf of the Borrowers or the
Borrowers' Agent (or any one of the Borrowers).  All telephonic notices to and
other telephonic communications with any Agent may be recorded by such Agent,
and each of the parties hereto hereby consents to such recording.
 
(g) So long as WestLB is the Administrative Agent, each Borrower and the
Borrowers' Agent hereby agrees that it will provide to the Administrative Agent
all information, documents and other materials that it is obligated to furnish
to the Administrative Agent pursuant to the Financing Agreements, including all
notices, requests, financial statements, financial and other reports,
certificates and other information materials, but excluding any such
communication that (i) relates to the Funding, (ii) relates to the payment of
any principal or other amount due under this Agreement prior to the scheduled
date therefor, (iii) provides notice of any Default or Event of Default or
(iv) is required to be delivered to satisfy any condition precedent to Funding
(all such non-excluded communications being referred to herein collectively as
"Communications"), by transmitting the Communications in an electronic/soft
medium in a format acceptable to the Administrative Agent to ny_agency
services@westlb.com.  In addition, each Borrower and the Borrowers' Agent agrees
to continue to provide the Communications to the Administrative Agent in the
manner specified in the Financing Agreements but only to the extent requested by
the Administrative Agent.
 
(h) So long as WestLB is the Administrative Agent, each Borrower and the
Borrowers' Agent further agrees that the Administrative Agent may make the
Communications available to the Lenders by posting the Communications on
http: www.intralinks.com (or any replacement or successor thereto) or a
substantially similar electronic transmission systems (the "Platform").
 
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(i) THE PLATFORM IS PROVIDED "AS IS" AND "AS AVAILABLE".  THE AGENTS DO NOT
WARRANT THE ACCURACY OR COMPLETENESS OF THE COMMUNICATIONS, OR THE ADEQUACY OF
THE PLATFORM AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS OR OMISSIONS IN THE
COMMUNICATIONS.  NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY,
INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE,
NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE
DEFECTS, IS MADE BY THE AGENTS IN CONNECTION WITH THE COMMUNICATIONS OR THE
PLATFORM.  IN NO EVENT SHALL THE ADMINISTRATIVE AGENT OR ANY OF ITS AFFILIATES
OR ANY OF THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, ADVISORS OR
REPRESENTATIVES (COLLECTIVELY, "AGENT PARTIES") HAVE ANY LIABILITY TO ANY
BORROWER, THE BORROWERS' AGENT, ANY LENDER OR ANY OTHER PERSON OR ENTITY FOR
DAMAGES OF ANY KIND, INCLUDING DIRECT OR INDIRECT, SPECIAL, INCIDENTAL OR
CONSEQUENTIAL DAMAGES, LOSSES OR EXPENSES (WHETHER IN TORT, CONTRACT OR
OTHERWISE) ARISING OUT OF THE BORROWER'S, THE BORROWERS' AGENTS' OR THE
ADMINISTRATIVE AGENT'S TRANSMISSION OF COMMUNICATIONS THROUGH THE INTERNET,
EXCEPT TO THE EXTENT THE LIABILITY OF ANY AGENT PARTY IS FOUND IN A FINAL
NON-APPEALABLE JUDGMENT BY A COURT OF COMPETENT JURISDICTION TO HAVE RESULTED
PRIMARILY FROM SUCH AGENT PARTY'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.
 
(j) The Administrative Agent agrees that the receipt of the Communications by
the Administrative Agent at its e-mail address set forth in Schedule 11.12 shall
constitute effective delivery of the Communications to the Administrative Agent
for purposes of the Financing Agreements.  Each Lender agrees that notice to it
(as provided in the next sentence) specifying that the Communications have been
posted to the Platform shall constitute effective delivery of the Communications
to such Lender for purposes of the Financing Agreements.  Each Lender agrees to
notify the Administrative Agent in writing (including by electronic
communication) from time to time of such Lender's e-mail address to which the
foregoing notice may be sent by electronic transmission and that the foregoing
notice may be sent to such e-mail address.
 
(k) Notwithstanding clauses (g) to (j) above, nothing herein shall prejudice the
right of any Senior Secured Party to give any notice or other communication
pursuant to any Financing Document in any other manner specified in such
Financing Document.
 
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Section 11.13 Patriot Act Notice.  Each Senior Secured Party (for itself and not
on behalf of any Lender) hereby notifies the Borrowers that pursuant to the
requirements of the Patriot Act, it is required to obtain, verify and record
information that identifies the Borrowers, which information includes the name
and address of the Borrowers and other information that will allow such Senior
Secured Party to identify the Borrowers in accordance with the Patriot Act.
 
Section 11.14 Payments Set Aside.  To the extent that any payment by or on
behalf of any Borrower is made to any Agent or Lender, or any Agent or Lender
exercises its right of setoff, and such payment or the proceeds of such setoff
or any part thereof is subsequently invalidated, declared to be fraudulent or
preferential, set aside or required (including pursuant to any settlement
entered into by such Agent or Lender in its discretion) to be repaid to a
trustee, receiver or any other party, in connection with any bankruptcy or
insolvency proceeding or otherwise, then (a) to the extent of such recovery, the
Obligation or part thereof originally intended to be satisfied shall be revived
and continued in full force and effect as if such payment had not been made or
such setoff had not occurred, and (b) each Lender severally agrees to pay to
each Agent upon demand its applicable share (without duplication) of any amount
so recovered from or repaid by such Agent, plus interest thereon from the date
of such demand to the date such payment is made at a rate per annum equal to the
Federal Funds Effective Rate from time to time in effect.  The obligations of
the Lenders under Section 11.14(b) shall survive the payment in full of the
Obligations and the termination of this Agreement.
 
Section 11.15 Right of Setoff.  Each Lender and each of its respective
Affiliates is hereby authorized at any time and from time to time during the
continuance of an Event of Default, to the fullest extent permitted by
applicable Law, to set off and apply any and all deposits (general or special,
time or demand, provisional or final, in whatever currency) at any time held and
other obligations (in whatever currency) at any time owing by such Lender or any
such Affiliate to or for the credit or the account of any Borrower against any
and all of the obligations of the Borrowers now or hereafter existing under this
Agreement or any other Financing Document to such Lender, irrespective of
whether or not such Lender shall have made any demand under this Agreement or
any other Financing Document and although such obligations of the Borrowers may
be contingent or unmatured or are owed to a branch or office of such Lender
different from the branch or office holding such deposit or obligated on such
indebtedness.  The rights of each Lender and their respective Affiliates under
this Section 11.15 are in addition to other rights and remedies (including other
rights of setoff) that such Lender or their respective Affiliates may
have.  Each Lender agrees to notify the Borrowers' Agent and the Administrative
Agent promptly after any such setoff and application; provided that the failure
to give such notice shall not affect the validity of such setoff and
application.
 
Section 11.16 Severability.  If any provision of this Agreement or any other
Financing Document is held to be illegal, invalid or unenforceable, (a) the
legality, validity and enforceability of the remaining provisions of this
Agreement and the other Financing Documents shall not be affected or impaired
thereby and (b) the parties shall endeavor in good faith negotiations to replace
the illegal, invalid or unenforceable provisions with valid provisions the
economic effect of which comes as close as possible to that of the illegal,
invalid or unenforceable provisions.  The invalidity of a provision in a
particular jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction.
 
159

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Section 11.17 Survival.  Notwithstanding anything in this Agreement to the
contrary, Section 11.07 (Costs and Expenses) and 11.09 (Indemnification by the
Borrowers) shall survive any termination of this Agreement.  In addition, each
representation and warranty made hereunder and in any other Financing Document
or other document delivered pursuant hereto or thereto or in connection herewith
or therewith shall survive the execution and delivery hereof and thereof.  Such
representations and warranties have been or will be relied upon by each Senior
Secured Party, regardless of any investigation made by any Senior Secured Party
or on their behalf and notwithstanding that any Senior Secured Party may have
had notice or knowledge of any Default or Event of Default at the time of the
Funding, and shall continue in full force and effect as long as any Loan or any
other Obligation hereunder or under any other Financing Document shall remain
unpaid or unsatisfied.
 
Section 11.18 Treatment of Certain Information; Confidentiality.  Each of the
Agents and the Lenders agrees to maintain the confidentiality of the
Information, except that Information may be disclosed (a) to its Affiliates and
to its Affiliates' respective partners, directors, officers, employees, agents,
advisors and representatives (it being understood that the Persons to whom such
disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential); (b) to the
extent requested or required by any regulatory authority purporting to have
jurisdiction over it; (c) to the extent required by applicable Law or
regulations or by any subpoena or similar legal process; (d) to any other party
to this Agreement; (e) in connection with the exercise of any remedies hereunder
or any suit, action or proceeding relating to this Agreement or the enforcement
of rights hereunder (including any actual or prospective purchaser of
Collateral); (f) subject to an agreement containing provisions substantially the
same as those of this Section 11.18, to (i) any Eligible Assignee of or
Participant in, or any prospective Eligible Assignee of or Participant in, any
of its rights or obligations under this Agreement, (ii) any direct or indirect
contractual counterparty or prospective counterparty (or such contractual
counterparty's or prospective counterparty's professional advisor) to any credit
derivative transaction relating to obligations of the Borrowers or (iii) any
Person (and any of its officers, directors, employees, agents or advisors) that
may enter into or support, directly or indirectly, or that may be considering
entering into or supporting, directly or indirectly, either (A) contractual
arrangements with such Agent or Lender, or any Affiliates thereof, pursuant to
which all or any portion of the risks, rights, benefits or obligations under or
with respect to any Loan or Financing Document is transferred to such Person or
(B) an actual or proposed securitization or collateralization of, or similar
transaction relating to, all or a part of any amounts payable to or for the
benefit of any Lender under any Financing Document (including any rating
agency); (g) with the consent of any Borrower; (h) to the extent such
Information (i) becomes publicly available other than as a result of a breach of
this Section 11.18 or (ii) becomes available to any Agent, any Lender or any of
their respective Affiliates on a nonconfidential basis from a source other than
the Borrowers; (i) to any state, federal or foreign authority or examiner
(including the National Association of Insurance Commissioners or any other
similar organization) regulating any Lender; or (j) to any rating agency when
required by it (it being understood that, prior to any such disclosure, such
rating agency shall undertake to preserve the confidentiality of any Information
relating to the Borrowers received by it from such Lender).  In addition, any
Agent and the Lenders may disclose the existence of this Agreement and
information about this Agreement to market data collectors, similar service
providers to the lending industry, and service providers to the Agents and the
Lenders in connection with the administration and management of this Agreement,
the other Financing Documents, the Commitments, and the Funding.  For the
purposes of this Section 11.18, "Information" means written information that any
Borrower furnishes to any Agent or Lender after the date hereof (and designated
at the time of delivery thereof in writing as confidential) pursuant to or in
connection with any Financing Document, relating to the assets and business of
such Borrower, but does not include any such information that (i) is or becomes
generally available to the public other than as a result of a breach by such
Agent or Lender of its obligations hereunder, (ii) is or becomes available to
such Agent or Lender from a source other than the Borrowers that is not, to the
knowledge of such Agent or Lender, acting in violation of a confidentiality
obligation with such Borrower or (iii) is independently compiled by any Agent or
Lender, as evidenced by their records, without the use of the Information.  Any
Person required to maintain the confidentiality of Information as provided in
this Section 11.18 shall be considered to have complied with its obligation to
do so if such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information.
 
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Section 11.19 Waiver of Consequential Damages, Etc.  Except as otherwise
provided in Section 11.09 (Indemnification by Borrowers) for the benefit of any
Indemnitee, to the fullest extent permitted by applicable Law, no party hereto
shall assert, and each party hereto hereby waives, any claim against any
Indemnitee, on any theory of liability, for special, indirect, consequential or
punitive damages (as opposed to direct or actual damages) arising out of, in
connection with, or as a result of, this Agreement, any other Financing Document
or any agreement or instrument contemplated hereby, the transactions
contemplated hereby or thereby, any Loan or the use of the proceeds thereof.  No
Indemnitee shall be liable for any damages arising from the use by unintended
recipients of any information or other materials distributed by it through
telecommunications, electronic or other information transmission systems in
connection with this Agreement or the other Financing Documents or the
transactions contemplated hereby or thereby.
 
Section 11.20 Waiver of Litigation Payments.  To the extent that any Borrower or
the Borrowers' Agent may, in any action, suit or proceeding brought in any of
the courts referred to in Section 11.02(b) (Applicable Law; Jurisdiction) or
elsewhere arising out of or in connection with this Agreement or any other
Financing Document to which it is a party, be entitled to the benefit of any
provision of law requiring any Senior Secured Party in such action, suit or
proceeding to post security for the costs of such Person or to post a bond or to
take similar action, each such Person hereby irrevocably waives such benefit, in
each case to the fullest extent now or in the future permitted under the laws of
New York or, as the case may be, the jurisdiction in which such court is
located.
 
[Remainder of page intentionally blank.  Next page is signature page.]
 
 
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IN WITNESS WHEREOF, the parties hereto have caused this Credit Agreement to be
executed by their respective officers as of the day and year first above
written.
 

 

  PACIFIC ETHANOL HOLDING CO. LLC,   as Borrower       
By:  /s/ JEFFREY MANTERNACH           
 
Name: Jeffrey Manternach
 
Title:  Vice President Finance
          PACIFIC ETHANOL MADERA LLC,   as Borrower       
By:  /s/ JEFFREY MANTERNACH            
 
Name: Jeffrey Manternach  
 
Title:  Vice President Finance  
          PACIFIC ETHANOL COLUMBIA, LLC,   as Borrower       
By:  /s/ JEFFREY MANTERNACH              
 
Name: Jeffrey Manternach   
 
Title:  Vice President Finance   
          PACIFIC ETHANOL STOCKTON, LLC,   as Borrower       
By:  /s/ JEFFREY MANTERNACH               
 
Name: Jeffrey Manternach    
 
Title:  Vice President Finance    
          PACIFIC ETHANOL IMPERIAL, LLC,   as Borrower        By:  /s/ JEFFREY
MANTERNACH              
Name: Jeffrey Manternach     
  Title:  Vice President Finance 

 
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  PACIFIC ETHANOL MAGIC VALLEY, LLC,   as Borrower        By:  /s/ JEFFREY
MANTERNACH              
Name: Jeffrey Manternach      
  Title:  Vice President Finance            
PACIFIC ETHANOL HOLDING CO. LLC,
  as Borrowers' Agent       By:  /s/ JEFFREY MANTERNACH                
Name: Jeffrey Manternach       
  Title:  Vice President Finance   

 
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  WESTLB AG, NEW YORK BRANCH,   as Lead Arranger and Sole Bookrunner       
By:  /s/ PAUL VASTOLA                        
 
Name:  Paul Vastola
 
Title:    Director
         
By:   /s/ JAMES R. ANDERSON             
 
Name:  James R. Anderson
 
Title:   Associate Director
          WESTLB AG, NEW YORK BRANCH,    as Administrative Agent       
By:  /s/ PAUL VASTOLA                           
 
Name:  Paul Vastola
 
Title:    Director  
         
By:   /s/ JAMES R. ANDERSON                
 
Name:  James R. Anderson
 
Title:   Associate Director  

 
 
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  WESTLB AG, NEW YORK BRANCH,   as Lender      
By:  /s/ PAUL VASTOLA                        
 
Name:  Paul Vastola
 
Title:    Director
         
By:   /s/ JAMES R. ANDERSON             
 
Name:  James R. Anderson
 
Title:   Associate Director
          WESTLB AG, NEW YORK BRANCH,   as Collateral Agent      
By:  /s/ PAUL VASTOLA                           
 
Name:  Paul Vastola
 
Title:    Director  
         
By:   /s/ JAMES R. ANDERSON                
 
Name:  James R. Anderson
 
Title:   Associate Director  

 
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MIZUHO CORPORATE BANK, LTD.,
 
as Lead Arranger and Co-Syndication Agent
     
By:  /s/ AKIRA TAZUKA                      
 
Name:  Akira Tazuka
 
Title:  General Manager
          MIZUHO CORPORATE BANK, LTD.,   as Lender       
By:  /s/ AKIRA TAZUKA                         
 
Name:  Akira Tazuka  
 
Title:  General Manager  

 
 
 
166

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  CIT CAPITAL SECURITIES LLC,   as Lead Arranger and Co-Syndication Agent       
By:  /s/ ROBERT W. SEXTON                      
 
Name:  Robert W. Sexton
 
Title:  SVP
          CIT CAPITAL USA INC.,   as Lender       
By:  /s/ ROBERT W. SEXTON                         
 
Name:  Robert W. Sexton  
 
Title:  Managing Director

 
 
 
167

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COÖPERATIEVE CENTRALE RAIFFEISEN-
BOERENLEENBANK B.A., "RABOBANK
NEDERLAND", NEW YORK BRANCH,
  as Lead Arranger and Co-Documentation Agent       
By:  /s/ JEFF BLISS                              
 
Name:  Jeff Bliss
 
Title:  Vice President
         
By:   /s/ NICK BAIKIE                          
 
Name:  Nick Baikie
 
Title:  Attorney-in-fact
         
COÖPERATIEVE CENTRALE RAIFFEISEN-
BOERENLEENBANK B.A., "RABOBANK
NEDERLAND", NEW YORK BRANCH,
  as Lender       
By:  /s/ JEFF BLISS                                 
 
Name:  Jeff Bliss  
 
Title:  Vice President  
         
By:   /s/ NICK BAIKIE                             
 
Name:  Nick Baikie  
 
Title:  Attorney-in-fact  

 
 
168

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BANCO SANTANDER CENTRAL HISPANO S.A,
NEW YORK BRANCH,
  as Lead Arranger and Co-Documentation Agent       
By:  /s/ J. RUBEN PEREZ-ROMO                          
 
Name:  J. Ruben Perez-Romo
 
Title:   Vice President
  Global Corporate Banking           
By:  /s/ JOSE CASTELLO                                       
 
Name:  Jose Castello
 
Title:   Managing Director
 
Head of U.S. Global Corporate Banking
         
BANCO SANTANDER CENTRAL HISPANO S.A,
NEW YORK BRANCH,
  as Lender       
By:  /s/ J. RUBEN PEREZ-ROMO                             
 
Name:  J. Ruben Perez-Romo  
 
Title:   Vice President  
  Global Corporate Banking            
By:  /s/ JOSE CASTELLO                                          
 
Name:  Jose Castello  
 
Title:   Managing Director  
 
Head of U.S. Global Corporate Banking  

 
 
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  UNION BANK OF CALIFORNIA, N.A.,   as Accounts Bank       
By: /s/ JESUS SERRANO                             
 
Name:  Jesus Serrano
 
Title:  VP

 
 
 
 
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NORTHWEST FARM CREDIT SERVICE, FLCA,
 
as Lender
     
By:  /s/ CASEY KINSER                                   
 
Name:  Casey Kinser
 
Title:  Account Manager

 
 
 
 
 
 
 
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NORDKAP BANK AG,
 
as Lender
     
By:  /s/ J. OGRIG                                   
 
Name:  J. Ogrig
 
Title:
         
By:  /s/ B. GADOLA                              
 
Name:  B. Gadola
 
Title:

 
 
 
 
 
 
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GREENSTONE FARM CREDIT SERVICES,
ACA/FLCA,
  as Lender       
By:  /s/ BEN MAHLICH                         
 
Name:  Ben Mahlich
 
Title:  Assistant Vice President/Lending Officer

 
 
 
 
 
 
 
 
 
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SHOREBANK PACIFIC,
 
as Lender
     
By:  /s/ RANDELL LEACH                          
 
Name:  Randell Leach
 
Title:  Chief Credit Officer

 
 
 
 
 
 
 
 
 
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NORDDEUTSCHE LANDESBANK
GIROZENTRALE NEW YORK BRANCH,
 
as Lender
     
By:  /s/ BRUNO MEJEAN                                    
 
Name:  Bruno Mejean
 
Title:  Senior Vice President
         
By:  /s/ MARCO BURMESTER                           
 
Name:  Marco Burmester
 
Title:  Analyst

 
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METROPOLITAN LIFE INSURANCE COMPANY,
 
as Lender
     
By:  /s/ JUDITH A. GULOTTA                         
 
Name:  Judith A. Gulotta
 
Title:  Director

 
 
 
 
 
 
 
 
 
 
 
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Exhibit A
 
"Acceptable Bank" means a bank whose long-term unsecured and unguaranteed debt
is rated at least "A-" (or the then-equivalent rating) by S&P or at least "A3"
(or the then-equivalent rating) by Moody's.
 
"Account Debtor" means the Person who is obligated on or under any Account owing
to any Borrower.
 
"Accounts" means all "accounts" as that term is defined in Section 9-102 of the
UCC, now or hereafter owned by any Borrower.
 
"Accounts Bank" means Union Bank of California, N.A., not in its individual
capacity, but solely as depositary bank, bank and securities intermediary
hereunder, and each other Person that may, from time to time, be appointed as
successor Accounts Bank pursuant to Section 10.06 (Resignation or Removal of
Agent).
 
"Accounts Property" means any funds, instruments, securities, financial assets
or other assets from time to time held in any of the Project Accounts or
credited thereto or otherwise in possession or control of the Accounts Bank
pursuant to this Agreement.
 
"Additional Project Document" means each contract, agreement, letter agreement
or other instrument to which Pacific Holding or any Borrower with respect to
whose Plant a Funding has been made or is being requested becomes a party after
the date hereof, other than any document under which any Borrower (or, in the
case of an agreement to which two or more Borrowers are party, such Borrowers on
an aggregate basis) (a) would not reasonably be expected to have obligations or
liabilities in the aggregate in excess of two million Dollars ($2,000,000), or
be entitled to receive revenues in the aggregate in excess of three million
Dollars ($3,000,000), in either case in value in any twelve (12) month period
and (b) a termination of which would not reasonably be expected to result in a
Material Adverse Effect; provided, that for the purposes of this definition, (i)
(A) purchase orders under existing Project Documents relating to the sale of
Products or the purchase of corn and (B) purchases of natural gas, water or
electricity pursuant to standard user agreements, shall not constitute
Additional Project Documents and (ii) any series of related transactions (other
than transactions, including hedging transactions, relating to the sale of
Products or the purchase of corn and natural gas) shall be considered as one
transaction, and all contracts, agreements, letter agreements or other
instruments in respect of such transactions shall be considered as one contract,
agreement, letter agreement or other instrument, as applicable.
 
Exhibit A - 1

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"Administrative Agent" means WestLB, in its capacity as administrative agent for
the Lenders hereunder, and includes each other Person that may, from time to
time, be appointed as successor Administrative Agent pursuant to Section 10.06
(Resignation or Removal of Agent).
 
"Affiliate" of any Person means any other Person that, directly or indirectly,
controls, is controlled by or is under common control with such Person.  A
Person shall be deemed to be "controlled by" any other Person if such other
Person (a) possesses, directly or indirectly, power to direct or cause the
direction of the management and policies of such Person whether by contract or
otherwise or (b) owns at least ten percent (10%) of the Equity Interests in such
Person.
 
"Affiliated Project Documents" means those Project Documents listed in
Schedule 5.11 and identified as Affiliate agreements.
 
"Agents" means, collectively, the Administrative Agent, the Collateral Agent,
and the Accounts Bank.
 
"Aggregate Construction Loan Commitment" means, collectively, the aggregate of
the In-Progress Plant 1 Aggregate Construction Loan Commitment, the In-Progress
Plant 2 Aggregate Construction Loan Commitment, the Greenfield Plant 1 Aggregate
Construction Loan Commitment, the Greenfield Plant 2 Aggregate Construction Loan
Commitment, and the Greenfield Plant 3 Aggregate Construction Loan Commitment.
 
"Aggregate Term Loan Commitment" means three hundred million Dollars
($300,000,000), as the same may be reduced in accordance with Section 2.08
(Termination or Reduction of Commitments).
 
"Aggregate Tranche Commitment" means, (a) with respect to Tranche B Lenders,
 fifty million Dollars ($50,000,000) (as the same may be increased or reduced in
accordance with Section 2.08 (Termination or Reduction of Commitments) and
Section 2.09 (Tranche Reallocation)) and (b) with respect to Tranche A Lenders,
two hundred fifty million Dollars ($250,000,000) (as the same may be reduced in
accordance with Section 2.08 (Termination or Reduction of Commitments) and
Section 2.09 (Tranche Reallocation).
 
"Aggregate Working Capital Loan Commitment" means, as of any date of
determination, the lesser of (a) the sum of the Borrowing Bases for each Plant
(or, prior to the Commercial Operation Date of any Plant, five million Dollars
($5,000,000)) as of such date of determination, and (b) twenty-five million
Dollars ($25,000,000), as the same may be reduced in accordance with
Section 2.08 (Termination or Reduction of Commitments).
 
Exhibit A - 2

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"Agreement" has the meaning set forth in the Preamble.
 
"Agricultural Market Consultant" means Muse, Stancil & Co., or any replacement
agricultural market consultant appointed by the Administrative Agent and, so
long as no Default or Event of Default has occurred and is continuing,
reasonably acceptable to the Borrower's Agent (which acceptance shall not be
unreasonably withheld or delayed).
 
"ALTA 122 Endorsement" means an endorsement in substantially the form of
Exhibit 6.02(g).
 
"Ancillary Documents" means, with respect to each Additional Project Document,
the following, each of which shall be in form and substance reasonably
satisfactory to the Administrative Agent and, in the case of items (i), (ii) and
(iv), the Collateral Agent:
 
(i) 
each security instrument and agreement necessary or desirable to grant to the
Collateral Agent a first priority perfected Lien (subject only to Permitted
Liens) in such Additional Project Document and all property interests received
by any Borrower in connection therewith;

 
(ii) 
all recorded UCC financing statements and other filings required to perfect such
Lien;

 
(iii) 
if reasonably requested by the Administrative Agent, opinions of counsel for the
Borrowers addressing such matters relating to such document, each applicable
Security Document and Lien as the Administrative Agent may reasonably request;

 
(iv) 
if reasonably requested by the Administrative Agent, the Borrowers shall use
their best efforts to obtain a Consent with respect to such Additional Project
Document from each Project Party thereto, and shall use their best efforts to
obtain an opinion of counsel to such Project Party addressing matters relating
to such Additional Project Document and such Consent as the Administrative Agent
may reasonably request; provided, that if such Consent cannot be obtained, the
relevant Additional Project Document shall be freely assignable by the
applicable Borrower(s) to the Collateral Agent and to a transferee in
foreclosure, in each such case without any consent or approval of such Project
Party; and

 
Exhibit A - 3

--------------------------------------------------------------------------------

 
(v) 
if reasonably requested by the Administrative Agent, certified evidence of the
authorization of such Additional Project Document by each Borrower that is a
party thereto.

 
"Applicable Margin" means (i) with respect to the Tranche A Loans, the Tranche A
Applicable Margin, (ii) with respect to the Tranche B Loans, the Tranche B
Applicable Margin, and (iii) with respect to the Working Capital Loans, the
Working Capital Loan Applicable Margin, as the context requires.
 
"Appraiser" means Natwick & Associates or any replacement appraiser appointed by
the Administrative Agent and, so long as no Default or Event of Default has
occurred and is continuing, reasonably acceptable to the Borrowers' Agent (which
acceptance shall not be unreasonably withheld or delayed).
 
"Approved Fund" means, with respect to any Lender that is a fund that invests in
commercial loans, any other fund that invests in commercial loans and is managed
or advised by the same investment advisor as such Lender or by an Affiliate of
such investment advisor.
 
"Approved Performance Test Protocols" means the protocols for conducting
Performance Tests set forth in Schedule 7.01(k)-B as the same may be updated or
amended with the prior written consent of the Independent Engineer and
Administrative Agent.
 
"Auditors" means those nationally recognized independent auditors selected by
the Borrowers (including Hein & Associates) and approved by the Administrative
Agent, acting reasonably; provided, that approval of the Administrative Agent
shall not be required for the appointment of any United States domiciled
accounting firm that (i) ranks among the top sixty-seven (67) accounting firms
in the United States by size and (ii) has total revenues of at least thirty
million Dollars ($30,000,000), of which at least fifty percent (50%) of such
revenues are derived from conducting audit work (in which case the Borrowers'
Agent shall provide a written notice to the Administrative Agent of any such
change in the Auditors).
 
"Authorized Officer" means (i) with respect to any Person that is a corporation,
the president, any vice president, the treasurer or the chief financial officer
of such Person, (ii) with respect to any Person that is a partnership, an
Authorized Officer of a general partner of such Person, (iii) with respect to
any Person that is a limited liability company, any manager, the president, any
vice president, the treasurer or the chief financial officer of such Person, or
an Authorized Officer of the managing member of such Person, or (iv) with
respect to any Person, such other representative of such Person that is approved
by the Administrative Agent in writing who, in each such case, has been named as
an Authorized Officer on a certificate of incumbency of such Person delivered to
the Administrative Agent and the Accounts Bank on or after the date hereof.
 
Exhibit A - 4

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"Bankruptcy Code" means Title 11 of the United States Code entitled "Bankruptcy"
or any successor statute, and all rules promulgated thereunder.
 
"Base Rate" means, for any day, a fluctuating rate per annum equal to the higher
of (i) the Federal Funds Effective Rate plus one-half of one percent (0.50%) and
(ii) the rate of interest in effect for such day as publicly announced from time
to time by WestLB as its "prime rate."  The "prime rate" is a rate set by WestLB
based upon various factors including WestLB's costs and desired return, general
economic conditions and other factors, and is used as a reference point for
pricing some loans, which may be priced at, above, or below such announced
rate.  Any change in such rate announced by WestLB shall take effect at the
opening of business on the day specified in the public announcement of such
change.
 
"Base Rate Loan" means any Loan bearing interest at a rate determined by
reference to the Base Rate and the provisions of Article II (Commitments and
Funding).
 
"Blocked Account Agreement" means an agreement, in substantially the form
attached hereto as Exhibit 7.02(i) (or, if requested by the Borrowers, such
other form reasonably satisfactory to the Administrative Agent and the
Collateral Agent), with respect to a Local Account among the Borrower in whose
name such Local Account has been opened, the bank with whom such Local Account
was opened and the Collateral Agent.
 
"Boardman" has the meaning set forth in the Preamble.
 
"Boardman Deed of Trust" means the Leasehold Trust Deed, Security Agreement,
Financing Agreement, Fixture Filing and Assignment of Leases, Rents and Security
Deposits, in form and substance reasonably satisfactory to the Lenders and the
Collateral Agent, dated on or about the date hereof, be made by Boardman to
Stewart Title Guaranty Company, as trustee, for the benefit of the Collateral
Agent, as beneficiary.
 
"Boardman Insurance and Condemnation Proceeds Account" has the meaning provided
in Section 8.01(m) (Establishment of Project Accounts).
 
"Boardman Lease" means the lease dated April 20, 2006 between the Port of Morrow
and Boardman.
 
Exhibit A - 5

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"Boardman Plant" means the ethanol production facility located at Boardman,
Oregon, with an expected capacity of approximately forty (40) million
gallons-per-year of denatured ethanol, including the Site on which such facility
is located, and all buildings, structures, improvements, easements and other
property related thereto.
 
"Boardman Pledge Agreement" means the Pledge and Security Agreement, in form and
substance reasonably satisfactory to the Lenders and the Collateral Agent, dated
on or about the date hereof, among Pacific Holding, Boardman and the Collateral
Agent, pursuant to which Pacific Holding pledges one hundred percent (100%) of
the Equity Interests in Boardman to the Collateral Agent.
 
"Boardman Security Agreement" means the Assignment and Security Agreement, in
form and substance reasonably satisfactory to the Lenders and the Collateral
Agent, dated on or about the date hereof, made by Boardman in favor of the
Collateral Agent.
 
"Boardman Warranty Account" has the meaning provided in Section 8.01(s)
(Establishment of Accounts).
 
"Borrower LLC Agreements" means, collectively, the Pacific Holding LLC
Agreement, the Madera LLC Agreement, the Boardman LLC Agreement, the Stockton
LLC Agreement, the Brawley LLC Agreement, and the Burley LLC Agreement.
 
"Borrowers" has the meaning set forth in the Preamble.
 
"Borrowers' Agent" means Pacific Holding, in its capacity as agent for the
Borrowers in accordance with Section 11.05 (Borrowers' Agent).
 
"Borrowing Base" means, on any given date and with respect to each Borrower
whose Plant has achieved its Commercial Operation Date, an amount equal to,
eighty percent (80%) of the sum of, without duplication:
 
(i) 
the face amount (less reserves, maximum discounts, credits and allowances that
may be taken by or granted to the Account Debtor thereof in connection
therewith) of all Eligible Accounts for such Plant that are set forth in the
Borrowing Base Certificate then most recently delivered by the Borrowers' Agent
to the Administrative Agent; and

 
Exhibit A - 6

--------------------------------------------------------------------------------

 
(ii) 
the Value of no more than sixty (60) days' Eligible Inventory for such Plant
(less reserves, maximum discounts, credits and allowances that may be taken by
or granted to the Account Debtor thereof in connection therewith) as set forth
in the Borrowing Base Certificate then most recently delivered by the Borrowers'
Agent to the Administrative Agent.

 
"Borrowing Base Certificate" means a certificate setting forth the Borrowing
Base of each Borrower as of the date of such certificate, substantially in the
form of Exhibit 7.03(n).
 
"Brawley" has the meaning set forth in the Preamble.
 
"Brawley Construction Account" has the meaning provided in Section 8.01(d)
(Establishment of Project Accounts).
 
"Brawley Construction Budget" means the budget attached hereto as
Schedule 7.02(t) that sets forth all categories of costs and expenses required
in connection with the development, construction, start-up, and testing of the
Brawley Plant, including all construction costs and non-construction costs, all
costs under the Brawley Construction Contracts, all interest, taxes and other
carrying costs related to the Construction Loans for the Brawley Plant, and
costs related to the construction of the facilities described under the Project
Documents relating to the Brawley Plant, as updated from time to time in
accordance with Section 6.04(h) (Conditions to First Funding for Each Greenfield
Plant –Construction Schedule and Updated Budget) and Section 7.02(t) (Negative
Covenants - Construction Budget).
 
"Brawley Construction Withdrawal Certificate" means a certificate in
substantially the form of Exhibit 8.05, duly executed by an Authorized Officer
of the Borrowers' Agent, directing the transfer or withdrawal of funds from the
Brawley Construction Account.
 
"Brawley Deed of Trust" means the Deed of Trust, Security Agreement, Financing
Statement, Fixture Filing and Assignment of Leases, Rents and Security Deposits,
in substantially the form of Exhibit 6.04(g)-A (or with changes agreed to by the
Borrowers, the Administrative Agent and the Collateral Agent, in each case
acting reasonably), to be made by Brawley to Stewart Title Guaranty Company, as
trustee, for the benefit of the Collateral Agent, as beneficiary.
 
Exhibit A - 7

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"Brawley Equity Contributions" means the aggregate total amount of (i) the
Brawley Required Equity Contribution (following the contribution of such amounts
to Brawley and their application to Brawley Project Costs) and (ii) all other
equity contributed to Brawley and applied to Brawley Project Costs.
 
"Brawley Insurance and Condemnation Proceeds Account" has the meaning provided
in Section 8.01(o) (Establishment of Project Accounts).
 
"Brawley Option Agreement" means that certain option agreement dated August 22,
2005, between Pacific Ethanol and American Grain, LLC for approximately sixty
(60) acres in Imperial, California (which shall be assigned by Pacific Ethanol
to Brawley prior to the initial Funding Date for the Brawley Plant).
 
"Brawley Plant" means the ethanol production facility located at Brawley,
California, with a design basis capacity of approximately fifty (50) million
gallons-per-year of denatured ethanol, including the Site on which such facility
is located, and all buildings, structures, improvements, easements and other
property related thereto.
 
"Brawley Pledge Agreement" means the Pledge and Security Agreement, in
substantially the form of Exhibit 6.04(g)-B (or with changes agreed to by the
Borrowers, the Administrative Agent and the Collateral Agent, in each case
acting reasonably), to be entered into among Pacific Holding, Brawley and the
Collateral Agent, pursuant to which Pacific Holding will pledge one hundred
percent (100%) of the Equity Interests in Brawley to the Collateral Agent.
 
"Brawley Project Costs" means the following costs and expenses incurred by the
Borrowers in connection with the Brawley Plant prior to the Commercial Operation
Date for the Brawley Plant and set forth in the then-current Brawley
Construction Budget or otherwise approved in writing by the Administrative Agent
(in consultation with the Independent Engineer):
 
(i) 
costs incurred by the Borrowers under the Brawley Construction Contracts, and
other costs directly related to the acquisition, site preparation, design,
engineering, construction, installation, start-up, and testing of the Brawley
Plant;

 
(ii) 
fees and expenses incurred by or on behalf of the Borrowers and allocated to the
Brawley Plant in connection with the development of the Project and the
consummation of the transactions contemplated by this Agreement, including
financial, accounting, legal, surveying and consulting fees, and the costs of
preliminary engineering;

 
Exhibit A - 8

--------------------------------------------------------------------------------

 
(iii) 
interest and Fees on the Construction Loans for the Brawley Plant;

 
(iv) 
financing fees and expenses in connection with the Loans and the fees, costs and
expenses of the Agents' counsel, any Interest Rate Protection Provider's counsel
and the Consultants that are allocated to the Brawley Plant;

 
(v) 
insurance premiums with respect to the Title Insurance Policy for the Brawley
Plant and the insurance for the Brawley Plant required pursuant to
Section 7.01(h) (Affirmative Covenants - Insurance);

 
(vi) 
costs of corn and natural gas utilized for commissioning, Performance Tests for,
and operation of, the Brawley Plant prior to its Commercial Operation Date; and

 
(vii) 
all other costs and expenses included in the then-current Brawley Construction
Budget.

 
"Brawley Required Equity Contribution" means, as of the initial Funding Date for
the Brawley Plant, an amount equal to the aggregate total amount of Project
Costs in the Construction Budget for the Brawley Plant approved pursuant to
Section 6.04(h)(i) (Conditions to First Funding for Each Greenfield Plant -
Construction Schedule and Updated Budget) minus (x) five million Dollars
($5,000,000) and (y) the lesser of (A) forty-five million Dollars ($45,000,000)
or (B) an amount equal to forty percent (40%) of such aggregate Project Costs.
 
"Brawley Security Agreement" means the Assignment and Security Agreement,
substantially the form of Exhibit 6.04(g)-C (or with changes agreed to by the
Borrowers, the Administrative Agent and the Collateral Agent, in each case
acting reasonably), to be made by Brawley in favor of the Collateral Agent.
 
"Brawley Warranty Account" has the meaning provided in Section 8.01(u)
(Establishment of Project Accounts).
 
"Burley" has the meaning set forth in the Preamble.
 
"Burley Construction Account" has the meaning provided in Section 8.01(e)
(Establishment of Project Accounts).
 
Exhibit A - 9

--------------------------------------------------------------------------------

 
"Burley Construction Budget" means the budget attached hereto as
Schedule 7.02(t) that sets forth all categories of costs and expenses required
in connection with the development, construction, start-up, and testing of the
Burley Plant, including all construction costs and non-construction costs, all
costs under the Burley Construction Contract, all interest, taxes and other
carrying costs related to the Construction Loans for the Burley Plant, and costs
related to the construction of the facilities described under the Project
Documents relating to the Burley Plant, as updated from time to time in
accordance with Section 6.04(h) (Conditions to First Funding for Each Greenfield
Plant –Construction Schedule and Updated Budget) and Section 7.02(t) (Negative
Covenants - Construction Budget).
 
"Burley Construction Withdrawal Certificate" means a certificate in
substantially the form of Exhibit 8.05, duly executed by an Authorized Officer
of the Borrowers' Agent, directing the transfer or withdrawal of funds from the
Burley Construction Account.
 
"Burley Deed of Trust" means the Mortgage, Security Agreement, Financing
Statement, Fixture Filing and Assignment of Leases, Rents and Security Deposits,
in substantially the form of Exhibit 6.04(g)-A (or with changes agreed to by the
Borrowers, the Administrative Agent and the Collateral Agent, in each case
acting reasonably), to be made by Burley to the Collateral Agent.
 
"Burley Equity Contributions" means the aggregate total amount of (i) the Burley
Required Equity Contribution (following the contribution of such amounts to
Burley and their application to Burley Project Costs) and (ii) all other equity
contributed to Burley and applied to Burley Project Costs.
 
"Burley Insurance and Condemnation Proceeds Account" has the meaning provided in
Section 8.01(p) (Establishment of Project Accounts).
 
"Burley Option Agreement" means that certain option agreement dated July 17,
2006 between Pacific Ethanol and Glen Larson and Carol Larson, as amended by
first amendment dated September 15, 2006, for approximately one hundred sixty
(160) acres in Cassia County, Idaho (which shall be assigned by Pacific Ethanol
to Burley prior to the initial Funding Date for the Burley Plant).
 
"Burley Plant" means the ethanol production facility located at Burley, Idaho,
with a design basis capacity of approximately fifty (50) million
gallons-per-year of denatured ethanol, including the Site on which such facility
is located, and all buildings, structures, improvements, easements and other
property related thereto.
 
Exhibit A - 10

--------------------------------------------------------------------------------

 
"Burley Pledge Agreement" means the Pledge and Security Agreement, in
substantially the form of Exhibit 6.04(g)-B (or with changes agreed to by the
Borrowers, the Administrative Agent and the Collateral Agent, in each case
acting reasonably), to be entered into among Pacific Holding, Burley and the
Collateral Agent, pursuant to which Pacific Holding will pledge one hundred
percent (100%) of the Equity Interests in Burley to the Collateral Agent.
 
"Burley Project Costs" means the following costs and expenses incurred by the
Borrowers in connection with the Burley Plant prior to the Commercial Operation
Date for the Burley Plant and set forth in the then-current Burley Construction
Budget or otherwise approved in writing by the Administrative Agent (in
consultation with the Independent Engineer):
 
(i) 
costs incurred by the Borrowers under the Burley Construction Contracts, and
other costs directly related to the acquisition, site preparation, design,
engineering, construction, installation, start-up, and testing of the Burley
Plant;

 
(ii) 
fees and expenses incurred by or on behalf of the Borrowers and allocated to the
Burley Plant in connection with the development of the Project and the
consummation of the transactions contemplated by this Agreement, including
financial, accounting, legal, surveying and consulting fees, and the costs of
preliminary engineering;

 
(iii) 
interest and Fees on the Construction Loans for the Burley Plant;

 
(iv) 
financing fees and expenses in connection with the Loans and the fees, costs and
expenses of the Agents' counsel, any Interest Rate Protection Provider's counsel
and the Consultants that are allocated to the Burley Plant;

 
(v) 
insurance premiums with respect to the Title Insurance Policy for the Burley
Plant and the insurance for the Burley Plant required pursuant to
Section 7.01(h) (Affirmative Covenants - Insurance);

 
(vi) 
costs of corn and natural gas utilized for commissioning, Performance Tests for,
and operation of, the Burley Plant prior to its Commercial Operation Date; and

 
Exhibit A - 11

--------------------------------------------------------------------------------

 
(vii) 
all other costs and expenses included in the then-current Burley Construction
Budget.

 
"Burley Required Equity Contribution" means, as of the initial Funding Date for
the Burley Plant, an amount equal to the aggregate total amount of Project Costs
in the Construction Budget for the Burley Plant approved pursuant to
Section 6.04(h)(i) (Conditions to First Funding for Each Greenfield Plant -
Construction Schedule and Updated Budget) minus (x) five million Dollars
($5,000,000) and (y) the lesser of (A) forty-five million Dollars ($45,000,000)
or (B) an amount equal to forty percent (40%) of such aggregate Project Costs.
 
"Burley Security Agreement" means the Assignment and Security Agreement, in
substantially the form of Exhibit 6.04(g)-C (or with changes agreed to by the
Borrowers, the Administrative Agent and the Collateral Agent, in each case
acting reasonably), to be made by Burley in favor of the Collateral Agent.
 
"Burley Warranty Account" has the meaning provided in Section 8.01(v)
(Establishment of Project Accounts).
 
"Business Day" means:
 
(i) 
any day that is neither a Saturday or Sunday nor a day on which commercial banks
are authorized or required to be closed in Sacramento, California or New York,
New York; and

 
(ii) 
relative to the making, continuing, prepaying or repaying of any Eurodollar
Loans, any day on which dealings in Dollars are carried on in the London
interbank market.

 
"Business Interruption Insurance Proceeds" means all proceeds of any insurance
policies required pursuant to this Agreement or otherwise obtained with respect
to any Borrower, any Plant or the Project relating to business interruption or
delayed start-up.
 
"Buy-Down L.D. Reimbursement" means, in the event that the Commitments for any
Plant are reduced on such Plant's Commercial Operation Date in accordance with
Section 2.08(e) (Termination or Reduction of Commitments), any performance
liquidated damages paid or payable to the Borrowers (up to, and not in excess
of, any such reduction) with respect to such Plant may be paid or distributed to
Pacific Ethanol.
 
Exhibit A - 12

--------------------------------------------------------------------------------

 
"Capitalized Lease Liabilities" of any Person means all monetary obligations of
such Person under any leasing or similar arrangement that, in accordance with
GAAP, would be classified as capitalized leases on a balance sheet of such
Person or otherwise disclosed as such in a note to such balance sheet and, for
purposes of the Financing Documents, the amount of such obligations shall be the
capitalized amount thereof, determined in accordance with GAAP.
 
"Cash Equivalents" means:
 
(a) readily marketable direct obligations of the government of the United States
or any agency or instrumentality thereof, or obligations unconditionally
guaranteed by the full faith and credit of the government of the United States,
in each case maturing within one (1) year from the date of acquisition thereof;
 
(b) securities issued by any state of the United States of America or any
political subdivision of any such state or any public instrumentality thereof
having maturities of not more than one (1) year from the date of acquisition
thereof and, at the time of acquisition, having a rating of AA- or higher from
S&P or Aa3 or higher from Moody's (or, if at any time neither S&P nor Moody's
shall be rating such obligations, an equivalent rating from another nationally
recognized rating service);
 
(c) investments in commercial paper maturing within 270 days from the date of
acquisition thereof and having, at such date of acquisition, a rating of at
least A-1 or P-1 from either S&P or Moody's (or, if at any time neither S&P nor
Moody's shall be rating such obligations, an equivalent rating from another
nationally recognized rating service);
 
(d) investments in certificates of deposit, banker's acceptances and time
deposits maturing within 270 days from the date of acquisition thereof issued or
guaranteed by or placed with, and money market deposit accounts issued or
offered by, the Administrative Agent or any domestic office of any commercial
bank organized under the laws of the United States of America, any State
thereof, any country that is a member of the Organisation for Economic
Co-Operation and Development or any political subdivision thereof, that has a
combined capital and surplus and undivided profits of not less than
$500,000,000;
 
(e) fully collateralized repurchase agreements with a term of not more than 30
days for securities described in clause (a) above and entered into with a
financial institution satisfying the criteria of clause (d) of this definition;
and
 
(f) investments in "money market funds" within the meaning of Rule 2a-7 of the
Investment Company Act of 1940, as amended, substantially all of whose assets
are invested in investments of the type described in clauses (a) through (e) of
this definition.
 
Exhibit A - 13

--------------------------------------------------------------------------------

 
"Cash Flow" means, for any period, the sum (without duplication) of the
following:  (i) all cash paid to the Borrowers during such period in connection
with the Ethanol Offtake Agreements, DG Offtake Agreements and any other sales
of Products, (ii) all interest and investment earnings paid to the Borrowers or
the Project Accounts during such period on amounts on deposit in the Project
Accounts, (iii) all cash paid to the Borrowers during such period as Business
Interruption Insurance Proceeds or liability insurance proceeds (but only to the
extent that such liability insurance proceeds represent reimbursement of third
party claims already paid by the Borrowers) and (iv) all other cash paid to the
Borrowers during such period; provided, however, that Cash Flow shall not
include any proceeds of the Loans or any other Indebtedness incurred by any
Borrower (other than payments (excluding payments of Swap Termination Value)
made to any Borrower pursuant to any Permitted Commodity Hedging Arrangements);
Insurance Proceeds; Condemnation Proceeds; Required Equity Contributions;
Required Subordinated Debt Disbursements; any amounts paid pursuant to the
Sponsor Support Agreement; any amounts drawn under, or paid pursuant to, any
Debt Service Reserve Letter of Credit; proceeds from any disposition of assets
of any Plant or any Borrower (other than Products); tax refunds; amounts
received, whether by way of a capital contribution or otherwise, from any
holders of Equity Interests of any Borrower (other than payments made under the
Affiliated Project Documents when due and payable in accordance with the terms
thereof and the terms of the Financing Documents); and any other extraordinary
or non-cash income or receipt of any Borrower under GAAP; provided, further,
that any proceeds of Permitted Commodity Hedging Arrangements that are treated
as Cash Flow shall be calculated on a net basis taking into account any related
payments required to be made by the Borrowers.
 
"Cash Flow Available for Debt Service" means, for any period, an amount equal to
the amount of Cash Flow deposited in the Revenue Account during such period
minus all amounts paid during such period (i) prior to the Conversion Date,
pursuant to priorities first and second of Section 8.08(b) (Revenue Account) and
(ii) on and after the Conversion Date, pursuant to priorities first and second
of Section 8.08(c) (Revenue Account).
 
"Casualty Event" means an event that causes any Plant, or any material portion
thereof, to be damaged, destroyed or rendered unfit for normal use for any
reason whatsoever.
 
"CERCLA" means the Comprehensive Environmental Response, Compensation and
Liability Act (42 U.S.C. § 9604, et seq.), as amended, and rules, regulations,
standards guidelines and publications issued thereunder.
 
"Change of Control" means any transaction or series of related transactions
(including any merger or consolidation) the result of which is that (i) Pacific
Holding fails to maintain, directly, legally or beneficially, one hundred
percent (100%) of the Equity Interests of any of Madera, Boardman, Stockton,
Brawley, or Burley, (ii) the Pledgor  fails to maintain directly, legally or
beneficially, one hundred percent (100%) of the Equity Interests of Pacific
Holding (other than any Equity Interest held by an Independent Member),
(iii) Pacific Ethanol fails to maintain, directly or indirectly, legally or
beneficially, fifty-one percent (51%) of the Equity Interests of each of the
Borrowers, or (iv) twenty percent (20%) or more of the Equity Interests of any
Borrower are indirectly, legally or beneficially owned by, or under common
control of, any Person other than those identified in clauses (i) through (iii)
above.
 
Exhibit A - 14

--------------------------------------------------------------------------------

 
"Change Order" means each "Change Order" (if any) as described in any
Construction Contract.
 
"Closing Date" means the date on which all the conditions set forth in
Section 6.01 (Conditions to Closing) have been satisfied or waived.
 
"Code" means the Internal Revenue Code of 1986, as amended.
 
"Collateral" means all assets of and Equity Interests in the Borrowers, whether
now owned or hereinafter acquired, upon which a Lien is purported to be created
by any Security Document then in effect or contemplated to be in effect.
 
"Collateral Agent" means WestLB AG, New York Branch, in its capacity as
collateral agent for the Senior Secured Parties under the Financing Documents,
and includes each other Person that may, from time to time be appointed as
successor Collateral Agent pursuant to Section 10.06 (Resignation or Removal of
Agent).
 
"Commercial Operation Date" means with respect to any Plant, the date (which for
each Plant shall occur on or before the Conversion Date Certain) on which the
following conditions have been satisfied for such Plant, as certified by the
Borrowers' Agent and confirmed in writing by the Independent Engineer in a
Commercial Operation Date Certificate completed to the reasonable satisfaction
of the Administrative Agent:
 
(i) 
construction of such Plant shall have been completed (other than punch list
items) and such Plant shall be ready to grind corn and begin operation for its
intended use as an ethanol production facility at its design basis capacity;

 
(ii) 
the Performance Test, in accordance with the Approved Performance Test Protocols
shall have been completed and shall have demonstrated that such Plant has
achieved the Minimum Performance Criteria, while meeting air emissions
requirements;

 
(iii) 
training shall have been completed for all required Plant personnel in a manner
that is reasonably satisfactory to the Independent Engineer;

 
Exhibit A - 15

--------------------------------------------------------------------------------

 
(iv) 
the Borrowers shall have received a plant operation manual and plant maintenance
manual, associated documents, training manuals, final safety plans, and all
materials and documents provided by the Construction Contractors and other
manufacturers, suppliers and vendors for such Plant, and in each case, shall
have been reviewed by the Independent Engineer;

 
(v) 
the Borrowers shall have received preliminary construction drawings for such
Plant;

 
(vi) 
all construction costs for such Plant, except in an aggregate amount not to
exceed five million Dollars ($5,000,000) and with respect to which the full
amount of such costs has been reserved, shall have been fully paid (other than
amounts that are subject to a Contest) and the Administrative Agent shall have
received reasonably satisfactory evidence (for example, an ALTA 122 Endorsement
to the applicable Title Policy) that there are no mechanic's, workmen's,
materialmen's or other similar Liens or other claims on any part of such Plant,
Site, or other assets relating to the work or services of such Plant provided by
the Construction Contractors or any of their subcontractors (other than Liens
that are subject to a Contest);

 
(vii) 
each Construction Contractor and each subcontractor for such Plant shall have
provided all satisfactory Lien waivers, other than with respect to punch list
items and work done by the Construction Contractor and subcontractors, taken as
a whole, with respect to which payments do not exceed, in the aggregate, one
million Dollars ($1,000,000) (other than Liens that are subject to a Contest);
and

 
(viii) 
all Necessary Project Approvals required to be obtained at such time with
respect to such Plant shall have been obtained.

 
Exhibit A - 16

--------------------------------------------------------------------------------

 
"Commercial Operation Date Certificate" means a certificate of the Independent
Engineer and the Borrowers' Agent, in substantially the form of Exhibit 6.02(a),
confirming that the Commercial Operation Date has occurred.
 
"Commitment Fee" has the meaning provided in Section 3.13(a) (Fees).
 
"Commitment Percentage" means, as to any Lender at any time, such Lender's
Construction Loan Commitment Percentage, Term Loan Commitment Percentage, or
Working Capital Loan Commitment Percentage, as the context may require.
 
"Commitments" means, with respect to each Lender, as applicable, such Lender's
Construction Loan Commitment, Term Loan Commitment or Working Capital Loan
Commitment, as the context may require.
 
"Commodity Hedging Arrangements" means any arrangement to hedge the price of
corn purchases, ethanol sales, Distillers Grains sales or natural gas purchases.
 
"Commodity Risk Management Plans" means risk management plans prepared by the
Borrowers and approved by the Administrative Agent pursuant to Section 7.01(w)
(Affirmative Covenants - Commodity Hedging Programs) setting forth terms and
conditions relating to any Commodity Hedging Arrangements from time to time
proposed to be entered into by the Borrowers, including any updates made to such
risk management plans with the approval of the Administrative Agent.
 
"Condemnation Proceeds" means any amounts and proceeds of any kind (including
instruments) payable in respect of any Event of Taking.
 
"Confidential Information Memorandum" means the information memorandum, dated
December 2006, together with any updates related thereto, describing the
Project.
 
"Consents" means each Consent and Agreement entered into among a Project Party,
the Borrowers, and the Collateral Agent, each in form and substance reasonably
satisfactory to the Administrative Agent and the Collateral Agent.
 
"Construction Accounts" means, collectively, the Construction Holding Account,
the Stockton Construction Account, the Brawley Construction Account and the
Burley Construction Account.
 
Exhibit A - 17

--------------------------------------------------------------------------------

 
"Construction Budgets" means, collectively, the Stockton Construction Budget,
the Brawley Construction Budget and the Burley Construction Budget.
 
"Construction Contractors" means each party, other than the Borrowers, to each
Construction Contract.
 
"Construction Contracts" means collectively, (i) the construction contracts
identified on Schedule 5.11 to which any of Parsons and Delta-T are parties,
(ii) each CMSA, (iii) all material contracts relating to construction of each of
the Greenfield Plants that, individually or in the aggregate, address the same
scope of construction requirements as the Boardman Plant construction contracts
described in clause (i) of this definition, (iv) any additional contracts
relating to the construction of any Greenfield Plant addressing matters that are
critical to the construction of such Greenfield Plant and (v) any Additional
Project Document related to construction matters.
 
"Construction Holding Account" has the meaning set forth in Section 8.01(b)
(Establishment of Project Accounts).
 
"Construction Holding Withdrawal Certificate" means a certificate in
substantially the form of Exhibit 8.04, duly executed by an Authorized Officer
of the Borrowers' Agent, directing the transfer or withdrawal of funds from the
Construction Holding Account.
 
"Construction Loan Commitment" means, with respect to each Construction/Term
Lender, such Lender's Tranche A Construction Loan Commitment and/or Tranche B
Construction Loan Commitment, as applicable.
 
"Construction Loan Commitment Percentage" means, as to any Lender at any time,
the percentage that such Lender's Construction Loan Commitment then constitutes
of the Aggregate Construction Loan Commitment.
 
"Construction Loan Maturity Date" means the earlier of (a) the Conversion Date
and (b) the Conversion Date Certain.
 
"Construction Loans" means, collectively, the In-Progress Plant 1 Construction
Loans, the In-Progress Plant 2 Construction Loans, the Greenfield Plant 1
Construction Loans, the Greenfield Plant 2 Construction Loans, and the
Greenfield Plant 3 Construction Loans.
 
"Construction Manager" means the Pledgor or any successor pursuant to a CMSA (or
any replacement thereof).
 
Exhibit A - 18

--------------------------------------------------------------------------------

 
"CMSA" means each Construction Management Services Agreement between any
Borrower and the Construction Manager.
 
"Construction Notes" means the promissory notes of each Borrower, substantially
in the form of Exhibit 2.07, evidencing Construction Loans.
 
"Construction Schedule" means, with respect to each Greenfield Plant, the
schedule for construction of such Plant, approved in writing by the
Administrative Agent and the Independent Engineer in accordance with
Section 6.04(h) (Conditions to First Funding for Each Greenfield Plant -
Construction Schedule and Updated Budget), as the same may be amended from time
to time with the prior written approval of the Administrative Agent and the
Independent Engineer.
 
"Construction/Term Lenders" means, collectively, the Tranche A Lenders and the
Tranche B Lenders.
 
"Construction Withdrawal Certificate" means a Construction Holding Withdrawal
Certificate, Stockton Construction Withdrawal Certificate, Brawley Construction
Withdrawal Certificate, and/or Burley Construction Withdrawal Certificate, as
the case may be.
 
"Consultants" means the Independent Engineer, the Insurance Consultant, the
Ethanol Market Consultant, and the Agricultural Market Consultant.
 
"Contest" means, with respect to any matter or claim involving any Person, that
such Person is contesting such matter or claim in good faith and by appropriate
proceedings timely instituted; provided, that the following conditions are
satisfied:  (a) such Person has posted a bond or other security (which may
include funds reserved in an appropriate Project Account) reasonably acceptable
to the Administrative Agent (or, prior to the Commercial Operation Date for any
Plant with respect to which a Funding has been made, the Borrowers have
demonstrated to the reasonable satisfaction of the Administrative Agent that
adequate Loan proceeds will be available to cover such claim relating to such
Plant); (b) during the period of such contest, the enforcement of any contested
item is effectively stayed; (c) none of such Person or any of its officers,
directors or employees, or any Senior Secured Party or its respective officers,
directors or employees, is or could reasonably be expected to become subject to
any criminal liability or sanction in connection with such contested items; and
(d) such contest and any resultant failure to pay or discharge the claimed or
assessed amount does not, and would not reasonably be expected to (i) result in
a Material Adverse Effect or (ii) involve a material risk of the sale,
forfeiture or loss of, or the creation, existence or imposition of any Lien
(other than a Permitted Lien) on, any of the Collateral.
 
Exhibit A - 19

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"Contingency Line Item" means the Line Item in each Construction Budget
identified as "contingency" that is intended to cover the eventuality of
unforeseen Project Costs for the relevant Plant.
 
"Contingent Liabilities" means any agreement, undertaking or arrangement by
which any Person guarantees, endorses or otherwise becomes or is contingently
liable upon (by direct or indirect agreement, contingent or otherwise, to
provide funds for payment, to supply funds to, or otherwise to invest in, a
debtor, or otherwise to assure a creditor against loss) the indebtedness,
obligation or any other liability of any other Person (other than by
endorsements of instruments in the course of collection), or guarantees the
payment of dividends or other distributions upon the shares of any other
Person.  The amount of any Person's obligation under any contingent liabilities
shall (subject to any limitation set forth therein) be deemed for purposes of
this Agreement to be the outstanding principal amount of the debt, obligation or
other liability guaranteed thereby; provided, however, that if the maximum
amount of the debt, obligation or other liability guaranteed thereby has not
been established, the amount of such contingent liability shall be the maximum
reasonably anticipated amount of the debt, obligation or other liability;
provided, further, that any agreement to limit the maximum amount of such
Person's obligation under such contingent liability shall not, of and by itself,
be deemed to establish the maximum reasonably anticipated amount of such debt,
obligation or other liability.
 
"Contract Disclosure Update" means a written notice delivered by the Borrowers'
Agent to the Administrative Agent, providing any updates to Schedule 5.11 with
respect to any material contracts, agreements, instruments or other documents
(other than the Financing Documents) to which any Borrower has become a party
after the date hereof.
 
"Contractual Obligation" means, as to any Person, any provision of any security
issued by such Person or of any agreement, instrument or other undertaking to
which such Person is a party or by which it or any of its property is bound.
 
"Conversion Date" means, the Business Day upon which all the conditions
precedent set forth in Section 6.07 (Conditions to Term Loan Funding) shall have
been satisfied (or waived in accordance with the terms of this Agreement) and
the Construction Loans are converted to Term Loans.
 
"Conversion Date Certain" means the date that is twenty (20) months from the
date hereof.
 
"Corn Supplier" means Pacific Ag Products or any other counterparty to a Grain
Supply Agreement.
 
Exhibit A - 20

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"Current Priority Subordinated Interest" means, with respect to any Quarterly
Period, interest that has accrued, and is due and payable, on the Priority
Subordinated Loans during such Quarterly Period, but expressly excluding any
such interest that accrued on the Priority Subordinated Loans in any previous
Quarterly Period.
 
"DDG" means dried distillers grains (if any) produced by the Borrowers at the
Project.
 
"Debt Service" means, for any period, the sum of (i) all fees (including Fees)
scheduled to become due and payable during such period to the Senior Secured
Parties, (ii) interest on the Loans (taking into account any payments received
under Interest Rate Protection Agreements) scheduled to become due and payable
during such period to the Senior Secured Parties, (iii) principal payments of
the Loans (excluding the Required Cash Sweep and any other mandatory
prepayments) scheduled to become due and payable during such period to the
Senior Secured Parties and (iv) all payments due by the Borrowers pursuant to
Section 4.03 (Increased Eurodollar Loan Costs) and Section 4.07(a) (Taxes) with
respect to such scheduled principal, interest and fees.
 
"Debt Service LC Waiver Letter" means, with respect to any Debt Service Reserve
Letter of Credit, a waiver letter from the issuer thereof in substantially the
form of Annex E to Exhibit 8.12.
 
"Debt Service Reserve Account" has the meaning set forth in Section 8.01(j)
(Establishment of Project Accounts).
 
"Debt Service Reserve Letter of Credit" means an irrevocable, standby letter of
credit in substantially the form of Exhibit 8.12, accompanied by a Debt Service
LC Waiver Letter, issued by an Acceptable Bank in favor of the Collateral Agent
which has the following minimum terms:
 
(i) 
a term of not less than three hundred sixty-four (364) days (or, if the Final
Maturity Date is less than three hundred sixty four (364) days from the date
such Debt Service Reserve Letter of Credit is issued, a term ending no earlier
than the date that is five (5) Business Days following the Final Maturity Date);

 
(ii) 
allows the Collateral Agent to make a drawdown of the Stated Amount in each of
the circumstances described in Section 8.12(c) (Debt Service Reserve Account);
and

 
Exhibit A - 21

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(iii) 
the reimbursement and other payment obligations with respect to such letter of
credit are not for the account of any Borrower, any Plant or the Project.

 
"Debt Service Reserve Requirement" means, as of any date, the amount equal to
the projected scheduled Debt Service payable in respect of the succeeding six
(6) months.
 
"Debtor Relief Laws" means the Bankruptcy Code and all other liquidation,
conservatorship, bankruptcy, assignment for the benefit of creditors,
moratorium, rearrangement, receivership, insolvency, reorganization, or similar
debtor relief laws of the United States or other applicable jurisdictions from
time to time in effect and affecting the rights of creditors generally.
 
"Default" means any condition, occurrence or event that, after notice or passage
of time or both, would be an Event of Default.
 
"Default Rate" has the meaning set forth in Section 3.06(b) (Post-Maturity
Interest Rates; Default Interest Rates).
 
"Deferred Approvals" has the meaning set forth in Section 5.03(a) (Governmental
Approvals).
 
"Deferred Contracts" has the meaning provided in Section 5.11(b)(iii)
(Contracts).
 
"Delta-T" Delta-T Corporation, a Virginia corporation.
 
"DG Offtake Agreements" means any agreement relating to the sale or Distillers
Grains by any Borrower with a scheduled term in excess of one year and with
payments thereunder expected to be in excess of three million Dollars
($3,000,000), including the Madera DG Agreement and each agreement between any
Borrower and Pacific Ag Products relating to the sale or marketing of Distillers
Grains.
 
"Discharge Date" means the date on which (a) all outstanding Commitments have
been terminated and (b) all amounts payable in respect of the Obligations have
been irrevocably paid in full in cash (other than obligations under the
Financing Documents that by their terms survive and with respect to which no
claim has been made by the Senior Secured Parties).
 
"Distillers Grains" means DDG, WDG, and any other form of distillers grain
products (including syrup) marketed by any Borrower from time to time.
 
Exhibit A - 22

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"Dollar" and the sign "$" mean lawful money of the United States.
 
"Domestic Office" means, relative to any Lender, the office of such Lender
designated on Schedule 1.01(a) or designated in the Lender Assignment Agreement
pursuant to which such Lender became a Lender hereunder or such other office of
a Lender (or any successor or assign of such Lender) within the United States as
may be designated from time to time by written notice from such Lender, as the
case may be, to the Borrowers' Agent and the Administrative Agent.
 
"Drawdown Schedule" means, with respect to each of the Construction Loans for
the Madera Plant, the Construction Loans for the Boardman Plant, the
Construction Loans for the Stockton Plant, the Construction Loans for the
Brawley Plant, and the Construction Loans for the Burley Plant, the schedule set
forth on Schedule 6.01(q), as the same may be amended from time to time with the
approval of the Administrative Agent and the Independent Engineer.
 
"Eligible Accounts" means, with respect to each Borrower, all Accounts of such
Borrower that meet each of the following requirements:
 
(i) 
it arises from either (i) the delivery of Products or grain storage and
unloading services performed by such Borrower, which services have been fully
performed and, if applicable, acknowledged and/or accepted by the Account Debtor
with respect thereto or (ii) the sale or lease of goods by such Borrower, and if
it arises from the sale of goods, such goods have been shipped or delivered to
the Account Debtor thereof;

 
(ii) 
it is a valid, legally enforceable obligation of the Account Debtor thereunder,
and is not subject to any reserve, discount, credit, allowance (except any
reserve, discount, credit or allowance that has been deducted in computing the
net amount thereof), offset, counterclaim or other defense on such Account
Debtor's part or to any claim on such Account Debtor's part denying liability
thereunder in whole or in part;

 
(iii) 
it is subject to a perfected Lien in the Collateral Agent's favor, for the
benefit of the Senior Secured Parties, and is not subject to any other Lien,
except for Permitted Liens;

 
Exhibit A - 23

--------------------------------------------------------------------------------

 
(iv) 
it is evidenced by an invoice (dated no later than the date of shipment to the
Account Debtor or performance and having a due date not more than sixty (60)
days after the date of such invoice) rendered to such Account Debtor, and is not
evidenced by any instrument or chattel paper;

 
(v) 
it is payable in Dollars;

 
(vi) 
it is not owing by any Governmental Authority;

 
(vii) 
it is not owing by any Account Debtor residing, located or having its principal
activities or place of business outside the United States, unless the sale of
goods giving rise to such Account is credit enhanced by means of a letter of
credit, bankers' acceptance or other credit support that is satisfactory to the
Administrative Agent and, if required by the Administrative Agent, has been
delivered to the Administrative Agent and is directly drawable by the
Administrative Agent;

 
(viii) 
it is not owing by any Account Debtor involved in any Insolvency Proceeding or
with respect to which any Borrower has received notice of an imminent Insolvency
Proceeding or a material impairment of the financial condition of such Account
Debtor;

 
(ix) 
it is not owing by any Affiliate of such Borrower, other than pursuant to an
Affiliated Project Document;

 
(x) 
it is not unpaid more than sixty (60) days after the invoice date;

 
(xi) 
it is not owing by an Account Debtor that has amounts outstanding more than
sixty (60) days after the due date of any invoice;

 
(xii) 
it is not an Account arising in a transaction where goods are sold on
consignment or are sold pursuant to a sale on approval, a bill and hold, or any
other terms by reason of which the payment by the Account Debtor may be
conditional; and

 
Exhibit A - 24

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(xiii) 
it is not an Account as to which the Administrative Agent, at any time or times
hereafter, determines, in its reasonable judgment and in good faith, that the
prospect of payment or performance by the Account Debtor thereof is or will be
impaired in any material respect.

 
An Account of such Borrower that is at any time an Eligible Account, but which
subsequently fails to meet any of the foregoing requirements, shall immediately
cease to be an Eligible Account; provided, that if such an ineligible Account
subsequently meets all of the foregoing requirements, it shall again be deemed
an Eligible Account.
 
"Eligible Assignee" means (a) any Lender, (b) an Affiliate of any Lender, (c) an
Approved Fund, and (d) any other Person (other than a natural person) approved
by the Administrative Agent and, so long as no Default or Event of Default has
occurred and is continuing (and any with respect only to Tranche A Lenders or
Working Capital Lenders, in either such case following the occurrence of a
Successful Syndication) the Borrower's Agent (each such approval not to be
unreasonably withheld or delayed).
 
"Eligible Inventory" means, with respect to each Borrower, the Inventory of such
Borrower that meets each of the following requirements:
 
(i) 
in the case of Inventory consisting of corn or other grain feedstock, or
denaturant, such corn, other grain feedstock or denaturant that is readily
usable for the operation of the relevant Plant in the ordinary course of
business;

 
(ii) 
in the case of Inventory consisting of Products, such Products that are readily
marketable by the relevant Plant in the ordinary course of business;

 
(iii) 
in the case of goods held for sale, the value thereof is adjusted to its
then-current market value;

 
(iv) 
it is owned by the relevant Borrower and is subject to a perfected Lien in the
Collateral Agent's favor, for the benefit of the Senior Secured Parties, and is
not subject to any other Lien, except for Permitted Liens;

 
(v) 
it is not consigned Inventory;

 
(vi) 
it is located only at one of the Sites or at such other location as is approved
in writing by the Administrative Agent; and

 
Exhibit A - 25

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(vii) 
the Administrative Agent, in its reasonable judgment and in good faith, has not
determined that it is unacceptable or should be price-adjusted in any material
respect due to age, type, quality, category and/or quantity.

 
Any of the Inventory of such Borrower that is at any time Eligible Inventory,
but which subsequently fails to meet any of the foregoing requirements, shall
immediately cease to be Eligible Inventory; provided, that if such ineligible
Inventory subsequently meets all of the foregoing requirements, it shall again
be deemed Eligible Inventory.
 
"Environmental Affiliate" means any Person, only to the extent of, and only with
respect to matters or actions of such Person for which, any Borrower could
reasonably be expected to have liability as a result of such Borrower retaining,
assuming, accepting or otherwise being subject to liability for Environmental
Claims relating to such Person, whether the source of such Borrower's obligation
is by contract or operation of Law.
 
"Environmental Approvals" means any Governmental Approvals required under
applicable Environmental Laws.
 
"Environmental Claim" means any written notice, claim, demand or similar written
communication by any Person alleging potential liability or requiring or
demanding remedial or responsive measures (including potential liability for
investigatory costs, cleanup, remediation and mitigation costs, governmental
response costs, natural resources damages, property damages, personal injuries,
fines or penalties) in each such case (x) either (i) with respect to
environmental contamination-related liabilities or obligations with respect to
which any of the Borrowers could reasonably be expected to be responsible that
are, or could reasonably be expected to be, in excess of two hundred thousand
Dollars ($200,000) in the aggregate, or (ii) that has or could reasonably be
expected to result in (A) on or prior to the Conversion Date, a material adverse
effect on Pacific Holding or any other Borrower or Plant with respect to which a
Funding has been made or is being requested, or (B) after the Conversion Date, a
Material Adverse Effect and (y) arising out of, based on or resulting from
(i) the presence, release or threatened release into the environment, of any
Materials of Environmental Concern at any location, whether or not owned by such
Person; (ii) circumstances forming the basis of any violation, or alleged
violation, of any Environmental Laws or Environmental Approvals; or
(iii) exposure to Materials of Environmental Concern.
 
"Environmental Laws" means all Laws applicable to the Project relating to
pollution or protection of human health, safety or the environment (including
ambient air, surface water, ground water, land surface or subsurface strata),
including Laws relating to emissions, discharges, releases or threatened
releases of Materials of Environmental Concern, or otherwise applicable to the
Project relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of Materials of Environmental Concern.
 
Exhibit A - 26

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"Environmental Site Assessment Report" means, with respect to each Plant, a
Phase I environmental site assessment report prepared by an environmental
consulting firm reasonably acceptable to the Administrative Agent, which report
shall comply with ASTM standard 1527-05 (with such modifications thereto as may
reasonably be requested by the Borrowers and are reasonably acceptable to the
Administrative Agent), and a Phase II environmental site assessment reasonably
acceptable to the Administrative Agent, addressing any recognized environmental
conditions or other areas of concern identified in the relevant Phase I report
if in the reasonable determination of the Administrative Agent, acting in
consultation with the Independent Engineer, a Phase II assessment is warranted.
 
"Equator Principles" means The Equator Principles – An Industry Framework for
Financial Institutions to Manage Environmental and Social Issues in Project
Financing (commonly referred to as "The Equator Principles").
 
"Equity Interests" means, with respect to any Person, all of the shares of
capital stock of (or other ownership or profit interests in) such Person, all of
the warrants, options or other rights for the purchase or acquisition from such
Person of shares of capital stock of (or other ownership or profit interests in)
such Person, all of the securities convertible into or exchangeable for shares
of capital stock of (or other ownership or profit interests in) such Person or
warrants, rights or options for the purchase or acquisition from such Person of
such shares (or such other interests), and all of the other ownership or profit
interests in such Person (including partnership, member or trust interests
therein), whether voting or nonvoting, and whether or not such shares, warrants,
options, rights or other interests are outstanding on any date of determination,
in each such case including all voting rights and economic rights related
thereto.
 
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended,
and any successor statute of similar import, together with the regulations
thereunder, in each case as in effect from time to time.  References to sections
of ERISA also refer to any successor sections.
 
"ERISA Affiliate" means any Person, trade or business that, together with any
Borrower, is or was treated as a single employer under Section 414 of the Code
or Section 4001 of ERISA.
 
"ERISA Plan" means any Plan that is not a Multiemployer Plan.
 
Exhibit A - 27

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"Escrow Account" has the meaning set forth in Section 8.01(a) (Establishment of
Project Accounts).
 
"Ethanol Market Consultant" means Muse, Stancil & Co., or any replacement
ethanol market consultant appointed by the Administrative Agent and, so long as
no Default or Event of Default has occurred and is continuing, reasonably
acceptable to the Borrower's Agent (which acceptance shall not be unreasonably
withheld or delayed).
 
"Ethanol Offtake Agreements" means any agreement relating to the sale of ethanol
by any Borrower with a scheduled term in excess of one year and with payments
thereunder expected to be in excess of three million Dollars ($3,000,000),
including each agreement between any Borrower and Kinergy relating to the sale
or marketing of ethanol.
 
"Eurodollar Loan" means any Loan bearing interest at a rate determined by
reference to the Eurodollar Rate and the provisions of Article II (Commitments
and Funding) and Article III (Repayments, Prepayments, Interest and Fees).
 
"Eurodollar Office" means, relative to any Lender, the office of such Lender
designated as such on Schedule 1.01(a) or designated in the Lender Assignment
Agreement pursuant to which such Lender became a Lender hereunder or such other
office of a Lender as designated from time to time by notice from such Lender to
the Borrowers' Agent and the Administrative Agent pursuant to Section 4.04
(Obligation to Mitigate) that shall be making or maintaining Eurodollar Loans of
such Lender hereunder.
 
"Eurodollar Rate" means, for any Interest Period with respect to any Eurodollar
Loan, an interest rate per annum equal to the rate per annum obtained by
dividing (x) LIBOR for such Interest Period and such Eurodollar Loan, by (y) a
percentage equal to (i) 100% minus (ii) the Eurodollar Reserve Percentage for
such Interest Period.
 
"Eurodollar Reserve Percentage" means, for any day during any Interest Period,
the reserve percentage (expressed as a decimal, carried out to five decimal
places) in effect on such day, whether or not applicable to any Lender, under
regulations issued from time to time by the F.R.S. Board for determining the
maximum reserve requirement (including any emergency, supplemental or other
marginal reserve requirement) with respect to eurocurrency funding (currently
referred to as "Eurocurrency Liabilities").  The Eurodollar Rate for each
outstanding Eurodollar Loan shall be adjusted automatically as of the effective
date of any change in the Eurodollar Reserve Percentage.
 
Exhibit A - 28

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"Event of Abandonment" means with respect to any Plant with respect to which any
Funding has been made or is being requested, any of the following shall have
occurred: (i) the abandonment by the applicable Borrower of the development,
construction, operation or maintenance of any such Plant for a period of more
than sixty (60) consecutive days (other than as a result of force majeure, an
Event of Taking or a Casualty Event), (ii) the suspension of all or
substantially all of any Borrower's activities with respect to any such Plant,
other than as the result of a force majeure, Event of Taking  or Casualty Event,
for a period of more than sixty (60) consecutive days, or (iii) any written
acknowledgement by any Borrower of a final decision to take any of the foregoing
actions.
 
"Event of Default" means any one of the events specified in Section 9.01 (Events
of Default).
 
"Event of Taking" means any taking, exercise of rights of eminent domain, public
improvement, inverse condemnation, condemnation or similar action of or
proceeding by any Governmental Authority relating to any material part of any
Plant with respect to which any Funding has been made or is being requested, the
Project, any Equity Interests of Pacific Holding or any Borrower that is the
owner of a Plant with respect to which any Funding has been made or is being
requested, or any other assets thereof.
 
"Event of Total Loss" means the occurrence of a Casualty Event affecting all or
substantially all of any Plant with respect to which any Funding has been made
or is being requested, the Project or the assets of Pacific Holding or any
Borrower that is the owner of a Plant with respect to which any Funding has been
made or is being requested.
 
"Excess Construction Loan Commitment" means, after the Commercial Operation Date
for any Greenfield Plant, with respect to any such Greenfield Plant, the amount
equal to (x) the Greenfield Plant 1 Aggregate Construction Loan Commitment, the
Greenfield Plant 2 Aggregate Construction Loan Commitment or the Greenfield
Plant 3 Aggregate Construction Loan Commitment, as applicable, minus (y) the
aggregate Construction Loans disbursed for such Greenfield Plant on or prior to
such Commercial Operation Date and minus (z) the amount set forth in the
Construction Budget for such Greenfield Plant to cover the required funding of
fifty percent (50%) of the Debt Service Reserve Requirement on the Conversion
Date.
 
"Excluded Taxes" means, with respect to any Agent or any Lender or any other
recipient of any payment to be made by or on account of any Obligation of the
Borrowers hereunder, (a) income or franchise Taxes imposed on (or measured by)
its net income levied as a result of a present or former connection between such
Agent, such Lender or such other recipient and the jurisdiction of the
Governmental Authority imposing such Tax or any political subdivision or taxing
Authority thereof or their (other than such Agent's, such Lender's or such other
recipient's having executed, delivered or preformed its obligations or recovered
a payment under, or enforced, this Agreement), (b)  any branch profits Tax
imposed by the United States, or any similar Tax imposed by any other
jurisdiction described in clause (a) above, or (c) any United States withholding
Tax to the extent that is imposed on amounts payable to such Agent or such
Lender at the time such Agent or such Lender becomes a party to this Agreement.
 
Exhibit A - 29

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"Extraordinary Proceeds Account" has the meaning provided in Section 8.01(q)
(Establishment of Project Accounts).
 
"Extraordinary Proceeds Release Notice" means a certificate in substantially the
form of Exhibit 8.15, duly executed by an Authorized Officer of the Borrowers'
Agent.
 
"F.R.S. Board" means the Board of Governors of the Federal Reserve System or any
successor thereto.
 
"Federal Funds Effective Rate" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) equal to the weighted average
of the rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers on such day, as published on
the next succeeding Business Day by the Federal Reserve Bank of New York, or, if
such rate is not so published for any day that is a Business Day, the average of
the quotations for such day for such transactions received by the Administrative
Agent from three federal funds brokers of recognized standing selected by the
Administrative Agent.
 
"Fee Letters" means (i) that Fee Letter among the Administrative Agent, the
Collateral Agent and the Borrowers, (ii) that Fee Letter among the
Administrative Agent, the Accounts Bank and the Borrowers, and (iii) that Fee
Letter among the Administrative Agent, WestLB and Mizuho Corporate Bank, Ltd.,
as lead arrangers and underwriters, and the Borrowers, each dated as of the date
hereof, setting forth certain fees that will, from time to time, become due and
payable with respect to the Loans and to the Agents.
 
"Fees" means, collectively, each of the fees payable by the Borrowers for the
account of any Lender or Agent pursuant to Section 3.13 (Fees).
 
"Final Completion" means, with respect to each Plant, that each of the following
conditions has been achieved as certified by the Borrowers' Agent and confirmed
in writing by the Independent Engineer in a Final Completion Certificate
completed to the reasonable satisfaction of the Administrative Agent:
 
(i) 
the Commercial Operation Date for such Plant shall have occurred;

 
Exhibit A - 30

--------------------------------------------------------------------------------

 
(ii) 
the Independent Engineer shall have confirmed that the final air emissions test
for such Plant has been satisfactorily completed;

 
(iii) 
insurance required pursuant to Schedule 7.01(h) and, with respect to the
Borrowers, any Project Document shall be in place, as confirmed by the Insurance
Consultant; and

 
(iv) 
all construction costs for such Plant shall have been fully paid (other than
amounts that are subject to a Contest).

 
"Final Completion Certificate" means a certificate of the Independent Engineer
and the Borrowers' Agent, in substantially the form of Exhibit 7.01(y),
confirming that Final Completion has occurred.
 
"Final Completion Date" means, with respect to each Plant, the date on which
such Plant has achieved Final Completion, as certified by the Borrowers' Agent
and the Independent Engineer.
 
"Final Maturity Date" means, with respect to the Term Loans the date that occurs
eighty-four (84) months after the Conversion Date.
 
"Financial Asset" has the meaning provided in Section 8.17(b) (Representations,
Warranties and Covenants of the Accounts Bank).
 
"Financial Model" means the pro forma financial statements and projections of
revenue and expenses and cash flows with respect to the Borrowers and the
Project for each of the calendar years 2007 through 2022, attached hereto as
Exhibit 6.01(v), as the same may be updated by the Borrowers with the prior
written approval of the Administrative Agent.
 
"Financial Officer" means, with respect to any Person, the controller, treasurer
or chief financial officer of such Person.
 
Exhibit A - 31

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"Financing Documents" means:
 
(i) 
this Agreement;

 
(ii) 
the Notes;

 
(iii) 
the Sponsor Support Agreement;

 
(iv) 
the Security Documents;

 
(v) 
the Interest Rate Protection Agreement;

 
(vi) 
the Fee Letters;

 
(vii) 
each Blocked Account Agreement;

 
(viii) 
the other financing and security agreements, documents and instruments delivered
in connection with this Agreement; and

 
(ix) 
each other document designated as a Financing Document by the Borrowers' Agent
and the Administrative Agent.

 
"First Escrow Release Date" means the date on which the first Funding of Tranche
B Construction Loans is made from the Escrow Account.
 
"Fiscal Quarter" means any quarter of a Fiscal Year.
 
"Fiscal Year" means any period of twelve (12) consecutive calendar months ending
on December 31.
 
"Funding" means (a) with respect to the Tranche A Loans, the incurrence of each
Tranche A Loan made by the Tranche A Lenders on a single date, (b) with respect
to the Tranche B Loans, (i) the release to any Construction Account of Tranche B
Construction Loan funds deposited into or standing to the credit of the Escrow
Account on a single date and (ii) the incurrence of the Tranche B Term Loans on
the Conversion Date, and (c) with respect to the Working Capital Loans, the
incurrence of each Working Capital Loan made by the Working Capital Lenders on a
single date, in each case, as the context may require.  For the avoidance of
doubt, this term Funding does not include the Tranche B Escrow Disbursement or
any other disbursement of Tranche B Loans directly to the Escrow Account.
 
Exhibit A - 32

--------------------------------------------------------------------------------

 
"Funding Date" means, with respect to each Funding, the date on which (a) with
respect to the Tranche A Construction Loans, funds are disbursed by the
Administrative Agent, on behalf of the Tranche A Lenders, to the Borrowers in
accordance with Section 2.06 (Funding of Loans), (b) with respect to the Tranche
B Construction Loans, funds are released to the Borrowers from the Escrow
Account, on behalf of the Tranche B Lenders, in accordance with Section 2.06
(Funding of Loans), (c) with respect to the Working Capital Loans, funds are
disbursed by the Administrative Agent, on behalf of the Working Capital Lenders,
to the Borrower in accordance with Section 2.06 (Funding of Loans), and (d) with
respect to the Term Loans, the Term Loans are disbursed in accordance with
Section 2.06 (Funding of Loans) in each case, as the context may require.
 
"Funding Defaults" means, collectively, any Default related solely to Pacific
Holding (and not, for the avoidance of doubt, in connection with any "Plant" or
"Project" with respect to which no Funding has been made or is being requested)
or related to any Borrower (or its Equity Interests or assets) or any Plant (or
any Project Document or Project Party related to such Plant) with respect to
which a Funding has been made or is being requested, and any Default pursuant to
any of Sections 9.01(a) (Events of Default - Nonpayment), 9.01(e) (Events of
Default - Project Completion), 9.01(h) (Events of Default - ERISA Events),
9.01(i) (Events of Default - Bankruptcy - Insolvency) (other than with respect
to Major Project Parties that are not parties to any Project Document to which
Pacific Holding or any Borrower with respect to whose Plant a Funding has been
made or is being requested (or otherwise related to any such Plant)), 9.01(l)
(Events of Default - Unenforceability of Documentation) and 9.01(q) (Events of
Default - Change of Control).
 
"Funding Representation and Warranties" means, collectively, any representation
and warranty (i) related solely to Pacific Holding (and not, for the avoidance
of doubt, in connection with any "Plant" or "Project" with respect to which no
Funding has been made or is being requested), (ii) related to any Borrower (or
its equity interests or assets) or any Plant with respect to which a Funding, or
any issuance of a Letter of Credit, is requested, and (iii) any representation
and warranty made pursuant to any of Sections 5.01 (Organization; Power and
Compliance with Law), 5.02 (Due Authorization; Non-Contravention), 5.04
(Investment Company Act), 5.05 (Validity of Financing Documents), 5.06
(Financial Information), 5.10 (Sole Purpose Nature; Business), 5.12
(Collateral), 5.14 (Taxes), 5.16 (ERISA Plans), 5.18(a) (No Defaults), 5.20
(Regulations T, U and X), 5.21 (Accuracy of Information), 5.22 (Indebtedness),
5.23 (Separateness), 5.24 (Required LLC Provisions), 5.25 (Subsidiaries), 5.26
(Foreign Assets Control Regulations, Etc), 5.27 (Employment Matters), 5.28
(Solvency), 5.29 (Legal Name and Place of Business), and 5.30 (No Brokers).
 
"Funding Notice" means each request for Funding in the form of Exhibit 2.05-A or
Exhibit 2.05-B, as applicable, delivered in accordance with Section 2.05 (Notice
of Fundings).
 
Exhibit A - 33

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"GAAP" means generally accepted accounting principles in effect from time to
time in the United States, applied on a consistent basis.
 
"Governmental Approval" means any authorization, consent, approval, license,
lease, ruling, permit, certification, exemption, filing for registration by or
with any Governmental Authority.
 
"Governmental Approvals Update Schedule" means a written notice delivered by the
Borrowers' Agent to the Administrative Agent and the Independent Engineer, and
accepted and agreed to in writing by the Administrative Agent and the
Independent Engineer, setting forth all Necessary Project Approvals applicable
to the Borrower or the Plant identified therein.  Each Governmental Approvals
Update Schedule may include a Part A (for current approvals), a Part B (for
deferred approvals) and a Part C (for exceptions).
 
"Governmental Authority" means any nation, state, sovereign, or government, any
federal, regional, state, local or political subdivision and any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
 
"Grain Supply Agreements" means any agreement relating to the purchase or supply
of grain to any Borrower with a scheduled term in excess of one year and with
payments thereunder expected to be in excess of two million Dollars
($2,000,000), including the Corn Procurement and Handling Agreement between
Pacific Holding and Pacific Ag Products, dated on or about the date hereof.
 
"Granting Lender" has the meaning provided in Section 11.03(h) (Assignments).
 
"Greenfield Plants" means, collectively, the Stockton Plant, the Brawley Plant
and the Burley Plant (or, if approved by the Lenders in accordance with the
terms hereof, any Substitute Facility).
 
"Greenfield Plant 1" means the first Greenfield Plant with respect to which a
Construction Loan Funding is made.
 
"Greenfield Plant 1 Aggregate Construction Loan Commitment" means sixty-nine
million two hundred thirty thousand seven hundred sixty-nine Dollars
($69,230,769.00), as the same may be reduced in accordance with Section 2.08
(Termination or Reduction of Commitments).
 
"Greenfield Plant 1 Construction Loans" means, together, the Greenfield Plant 1
Tranche A Construction Loans and the Greenfield Plant 1 Tranche B Construction
Loans.
 
"Greenfield Plant 1 Tranche A Construction Loan" has the meaning provided in
Section 2.01(d) (Construction Loans).
 
Exhibit A - 34

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"Greenfield Plant 1 Tranche B Construction Loan" has the meaning provided in
Section 2.01(d) (Construction Loans).
 
"Greenfield Plant 2" means the second Greenfield Plant with respect to which a
Construction Loan Funding is made.
 
"Greenfield Plant 2 Aggregate Construction Loan Commitment" means sixty-nine
million two hundred thirty thousand seven hundred sixty-nine Dollars
($69,230,769.00), as the same may be reduced in accordance with Section 2.08
(Termination or Reduction of Commitments).
 
"Greenfield Plant 2 Construction Loan" has the meaning provided in
Section 2.01(e) (Construction Loans).
 
"Greenfield Plant 3" means the third Greenfield Plant with respect to which a
Construction Loan Funding is made.
 
"Greenfield Plant 3 Aggregate Construction Loan Commitment" means sixty-nine
million two hundred thirty thousand seven hundred sixty-nine Dollars
($69,230,769.00), as the same may be reduced in accordance with Section 2.08
(Termination or Reduction of Commitments).
 
"Greenfield Plant 3 Construction Loan" has the meaning provided in
Section 2.01(f) (Construction Loans).
 
"Greenfield Plant Top-Up Funding" means, with respect to any Greenfield Plant
that has achieved its Commercial Operation Date, a single Construction Loan
Funding for such Greenfield Plant in an aggregate amount not to exceed the
Excess Construction Loan Commitment for such Plant.
 
"Guarantee" means, as to any Person, (a) any obligation, contingent or
otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness or other obligation payable or performable by
another Person (the "primary obligor") in any manner, whether directly or
indirectly, and including any obligation of such Person, direct or indirect,
(i) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness or other obligation, (ii) to purchase or lease property,
securities or services for the purpose of assuring the obligee in respect of
such Indebtedness or other obligation of the payment or performance of such
Indebtedness or other obligation, (iii) to maintain working capital, equity
capital or any other financial statement condition or liquidity or level of
income or cash flow of the primary obligor so as to enable the primary obligor
to pay such Indebtedness or other obligation, or (iv) entered into for the
purpose of assuring in any other manner the obligee in respect of such
Indebtedness or other obligation of the payment or performance thereof or to
protect such obligee against loss in respect thereof (in whole or in part), or
(b) any Lien on any assets of such Person securing any Indebtedness or other
obligation of any other Person, whether or not such Indebtedness or other
obligation is assumed by such Person (or any right, contingent or otherwise, of
any holder of such Indebtedness to obtain any such Lien).
 
Exhibit A - 35

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"Historical Debt Service Coverage Ratio" means, as of any Quarterly Payment
Date, for the four (4) Fiscal Quarters immediately preceding (and not including
the then-current Fiscal Quarter) such Quarterly Payment Date (or, if less than
four (4) Fiscal Quarters have elapsed since the Conversion Date, for such number
of full Fiscal Quarters that has elapsed since the Conversion Date), the ratio
of (i) Cash Flow Available for Debt Service during such period to (ii) Debt
Service during such period.
 
"Indebtedness" means, as to any Person at a particular time, without
duplication, all of the following, whether or not included as indebtedness or
liabilities in accordance with GAAP:
 
(a) all obligations of such Person for or in respect of moneys borrowed or
raised, whether or not for cash by whatever means (including acceptances,
deposits, discounting, letters of credit, factoring, and any other form of
financing which is recognized in accordance with GAAP in such Person's financial
statements as being in the nature of a borrowing or is treated as "off-balance
sheet" financing);
 
(b) all obligations of such Person evidenced by bonds, debentures, notes, loan
agreements or other similar instruments;
 
(c) all obligations of such Person for the deferred purchase price of property
or services;
 
(d) all obligations of such Person under conditional sale or other title
retention agreements relating to property or assets acquired by such Person
(even though the rights and remedies of the seller or lender under such
agreement in the event of default are limited to repossession or sale of such
property or are otherwise limited in recourse);
 
(e) the maximum amount of all direct or contingent obligations of such Person
arising under letters of credit (including standby and commercial), bankers'
acceptances, bank guaranties, surety bonds and similar instruments;
 
(f) all Capitalized Lease Liabilities;
 
(g) net obligations of such Person under any Swap Contract;
 
Exhibit A - 36

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(h) all obligations of such Person to purchase, redeem, retire, defease or
otherwise make any payment in respect of any Equity Interests in such Person or
any other Person or any warrants, rights or options to acquire such Equity
Interests, valued, in the case of redeemable preferred interests, at the greater
of its voluntary or involuntary liquidation preference plus accrued and unpaid
dividends; and
 
(i) all Guarantees of such Person in respect of any of the foregoing.
 
For all purposes hereof, the Indebtedness of any Person shall include the
Indebtedness of any partnership or joint venture (other than a joint venture
that is itself a corporation or limited liability company) in which such Person
is a general partner or a joint venturer, unless such Indebtedness is expressly
made non-recourse to such Person.  The amount of any net obligation under any
Swap Contract on any date shall be deemed to be the Swap Termination Value
thereof as of such date.
 
"Indemnified Taxes" means Taxes other than Excluded Taxes.
 
"Indemnitee" has the meaning provided in Section 11.09 (Indemnification by the
Borrowers).
 
"Independent Engineer" means Luminate, LLC, or any replacement independent
engineer appointed by the Administrative Agent and, so long as no Default or
Event of Default has occurred and is continuing, reasonably acceptable to the
Borrower's Agent (which acceptance shall not be unreasonably withheld or
delayed).
 
"Independent Engineer's Certificate" means a certificate of the Independent
Engineer in substantially the form of Exhibit 6.05(c).
 
"Independent Manager" or "Independent Member" means a Person, who is not at the
time of initial appointment as the Independent Manager or Independent Member or
at any time while serving as the Independent Manager or Independent Member and
has not been at any time during the five (5) years preceding such initial
appointment:
 
(i) 
a direct or indirect owner of any Equity Interest in, member (with the exception
of serving as the Independent Member), officer, employee, partner, director,
manager (with the exception of serving as the Independent Manager) or
contractor, bankruptcy trustee, attorney or counsel of any member of any
Borrower, any Borrower or any Affiliate of any of them;

 
Exhibit A - 37

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(ii) 
a creditor, customer, supplier, or other person (including each Project Party)
who derives any of its purchases or revenues from its activities with any
Borrower, any member of any Borrower or any Affiliate of any of them;

 
(iii) 
a Person controlling or under common control with any Borrower, any member of
any Borrower or any Affiliate of any of them or any Person excluded from serving
as Independent Manager or Independent Member under clause (i) or (ii) of this
definition;

 
(iv) 
a member of the immediate family by blood or marriage of any Person excluded
from being an Independent Manager or Independent Member under clause (i) or
(ii) of this definition; or

 
(v) 
a Person who received, or a member or employee of a firm or business that
received, fees or other income from any Borrower or any Affiliate thereof in the
aggregate in excess of five percent (5%) of the gross income, for any applicable
year, of such Person.

 
"Information" has the meaning provided in Section 11.18 (Treatment of Certain
Information; Confidentiality).
 
"Initial Quarterly Payment Date" means the first Quarterly Payment Date
following the Conversion Date.
 
"In-Progress Plant 1" means the first In-Progress Plant with respect to which a
Construction Loan Funding is made.
 
"In-Progress Plant 1 Aggregate Construction Loan Commitment" means forty-six
million one hundred fifty-three thousand eight hundred forty-six Dollars
($46,153,846.00), as the same may be reduced in accordance with Section 2.08
(Termination or Reduction of Commitments).
 
"In-Progress Plant 1 Construction Loan" has the meaning provided in
Section 2.01(b) (Construction Loans).
 
Exhibit A - 38

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"In-Progress Plant 2" means the second In-Progress Plant with respect to which a
Construction Loan Funding is made.
 
"In-Progress Plant 2 Aggregate Construction Loan Commitment" means forty-six
million one hundred fifty-three thousand eight hundred forty-six Dollars
($46,153,846.00), as the same may be reduced in accordance with Section 2.08
(Termination or Reduction of Commitments).
 
"In-Progress Plant 2 Construction Loans" means, together, the In-Progress
Plant 2 Tranche A Construction Loans and the In-Progress Plant 2 Tranche B
Construction Loans.
 
"In-Progress Plant 2 Tranche A Construction Loan" has the meaning provided in
Section 2.01(c) (Construction Loans).
 
"In-Progress Plant 2 Tranche B Construction Loan" has the meaning provided in
Section 2.01(c) (Construction Loans).
 
"In-Progress Plants" means, collectively, the Madera Plant and the Boardman
Plant.
 
"Insolvency Proceeding" has the meaning provided in the Intercreditor Agreement.
 
"Insurance Consultant" means Moore-McNeil, LLC, or any replacement insurance
consultant appointed by the Administrative Agent and, so long as no Default or
Event of Default has occurred and is continuing, reasonably acceptable to the
Borrower's Agent (which acceptance shall not be unreasonably withheld or
delayed).
 
"Insurance Proceeds" means all proceeds of any insurance policies required
pursuant to this Agreement or otherwise obtained with respect to any Borrower,
any Plant or the Project that are paid or payable to or for the account of any
Borrower, or the Collateral Agent as loss payee, or additional insured (other
than Business Interruption Insurance Proceeds and proceeds of insurance policies
relating to third party liability).
 
"Insurance and Casualty Proceeds Accounts" means, collectively, the Madera
Insurance and Casualty Proceeds Account, the Boardman Insurance and Casualty
Proceeds Account, the  Stockton Insurance and Casualty Proceeds Account, the
Brawley Insurance and Casualty Proceeds Account, and the Burley Insurance and
Casualty Proceeds Account.
 
"Insurance and Condemnation Proceeds Request Certificate" means a certificate,
in substantially the form of Exhibit 8.14, executed by an Authorized Officer of
the Borrowers' Agent and setting forth proposed instructions for the transfer or
withdrawal of Insurance Proceeds or Condemnation Proceeds, as the case may be,
from an Insurance and Condemnation Proceeds Account.
 
Exhibit A - 39

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"Interest Payment Date" means, with respect to any Loan without duplication, the
last day of each Interest Period applicable to each Funding of which such Loan
is a part.
 
"Interest Period" means, with respect to any Eurodollar Loan, the period
beginning on (and including) the date on which such Eurodollar Loan is made
pursuant to Section 2.06 (Funding of Loans) or the date on which each successive
interest period for each such Eurodollar Loan is determined pursuant to
Section 3.05 (Interest Rates) and ending on (and including) the day that
numerically corresponds to such date one (1), two (2), three (3)  or six (6)
months thereafter, in either case as the Borrowers may select in the relevant
Funding Notice or Interest Period Notice; provided, however, that (i) if such
Interest Period would otherwise end on a day that is not a Business Day, such
Interest Period shall end on the next following Business Day (unless such next
following Business Day is in a different a calendar month, in which case such
Interest Period shall end on the next preceding Business Day), (ii) any Interest
Period that begins on the last Business Day of a month (or on a day for which
there is no numerically corresponding day in the month at the end of such
Interest Period) shall end on the last Business Day of the month at the end of
such Interest Period, (iii) the Borrowers may not select any Interest Period
that ends after any Quarterly Payment Date unless, after giving effect to such
selection, the aggregate outstanding principal amount of Eurodollar Loans having
Interest Periods which end on or prior to such Quarterly Payment Date shall be
at least equal to the aggregate principal amount of Eurodollar Loans due and
payable on or prior to such Quarterly Payment Date, and (iv) no Interest Period
may end later than the Maturity Date.
 
"Interest Period Notice" means a notice in substantially the form attached
hereto as Exhibit 3.05, executed by an Authorized Officer of the Borrowers'
Agent.
 
"Interest Rate Protection Agreement" means each interest rate swap, collar, put,
or cap, or other interest rate protection arrangement, with a Qualified
Counterparty, in each such case that is reasonably satisfactory to the
Administrative Agent and is entered into in accordance with Section 7.01(u)
(Affirmative Covenants - Interest Rate Protection Agreement).
 
"Interest Rate Protection Provider" means a Qualified Counterparty that is party
to an Interest Rate Protection Agreement.
 
"Inventory" means "inventory", as that term is defined in the UCC, now or
hereafter owned by any Borrower, including all products, goods, materials and
supplies produced, purchased or acquired by the such Borrower for the purpose of
sale or use in such Borrower's operations in the ordinary course of business.
 
"Issuance Request" means has the meaning provided in Section 2.04(b) (Letters of
Credit).
 
"Issuing Bank" means WestLB.
 
"Kinergy" means Kinergy Marketing, LLC, an Oregon limited liability company.
 
Exhibit A - 40

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"Law" means, with respect to any Governmental Authority, any constitutional
provision, law, statute, rule, regulation, ordinance, treaty, order, decree,
judgment, decision, common law, holding, injunction, Governmental Approval or
requirement of such Governmental Authority.  Unless the context clearly requires
otherwise, the term "Law" shall include each of the foregoing (and each
provision thereof) as in effect at the time in question, including any
amendments, supplements, replacements, or other modifications thereto or
thereof, and whether or not in effect as of the date of this Agreement.
 
"LC Cap" means, with respect to each Plant, two million Dollars ($2,000,000).
 
"Lead Arrangers" means, collectively, WestLB in its capacity as sole lead
bookrunner and lead arranger, Mizuho Corporate Bank, Ltd. in its capacity as
co-syndication agent and lead arranger, CIT Capital USA Inc., in its capacity as
co-syndication agent and lead arranger, Cooperatieve Centrale
Raiffeisen-Boerenleenbank BA., "Rabobank Nederland", New York Branch, in its
capacity as co-documentation agent and lead arranger, and Banco Santander
Central Hispano S.A, New York Branch, in its capacity as co-documentation agent
and lead arranger.
 
"Leased Premises" means, with respect to the Boardman Plant, the Premises, as
defined in the Boardman Lease and, with respect to the Stockton Plant, the
Premises, as defined in the Stockton Lease.
 
"Leases" means, collectively, the Boardman Lease and the Stockton Lease.
 
"Lender Assignment Agreement" means a Lender Assignment Agreement, substantially
in the form of Exhibit 11.03.
 
"Lenders" means the persons identified as "Lenders" and listed on the signature
pages of this Agreement and each other Person that acquires the rights and
obligations of a Lender hereunder pursuant to Section 11.03 (Assignments).
 
"Letter of Credit" means each letter of credit issued by the Issuing Bank
pursuant to Section 2.04 (Letters of Credit).
 
"Letter of Credit Availability Fee" has the meaning provided in Section 3.13(b)
(Fees).
 
"Letter of Credit Fronting Fee" has the meaning provided in Section 3.13(b)
(Fees).
 
Exhibit A - 41

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"LIBOR" means, for any Interest Period for any Eurodollar Loan:
 
(a) the rate per annum equal to the rate determined by the Administrative Agent
to be the offered rate that appears on the page of the Telerate screen (or any
successor thereto) that displays an average British Bankers Association Interest
Settlement Rate for deposits in Dollars (for delivery on the first day of such
Interest Period) with a term equivalent to such Interest Period, determined as
of approximately 11:00 a.m. (London time) two (2) Business Days prior to the
first day of such Interest Period; or
 
(b) if the rate referenced in the preceding clause (a) does not appear on such
page or service or such page or service is not available, the rate per annum
equal to the rate determined by the Administrative Agent to be the offered rate
on such other page or other service that displays an average British Bankers
Association Interest Settlement Rate for deposits in Dollars (for delivery on
the first day of such Interest Period) with a term equivalent to such Interest
Period, determined as of approximately 11:00 a.m. (London time) two (2) Business
Days prior to the first day of such Interest Period; or
 
(c) if the rates referenced in the preceding clauses (a) and (b) are not
available, the rate per annum determined by the Administrative Agent as the rate
of interest at which deposits in Dollars for delivery on the first day of such
Interest Period in same day funds in the approximate amount of the Eurodollar
Loan being made, continued or converted and with a term equivalent to such
Interest Period would be offered by WestLB to major banks in the London
interbank eurodollar market at their request at approximately 4:00 p.m. (London
time) two (2) Business Days prior to the first day of such Interest Period.
 
"Lien" means any security interest, mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, bailment, conditional sales or title retention
agreement, lien (statutory or otherwise), charge against or interest in
property, in each case of any kind, to secure payment of a debt or performance
of an obligation.
 
"Line Item" means a line item of cost or expense set forth in any Construction
Budget.
 
"Loan Parties" means, collectively, each Borrower, Pledgor, Pacific Ethanol
(until the termination of the Sponsor Support Agreement), and each and any
Affiliates thereof that are party to any Financing Document.
 
"Loans" means, collectively, the Construction Loans, the Term Loans and the
Working Capital Loans.
 
Exhibit A - 42

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"Local Account" means any local bank account (other than the Project Accounts)
in the name of any Borrower.
 
"Madera" has the meaning set forth in the Preamble.
 
"Madera Deed of Trust" means the Deed of Trust, Security Agreement, Financing
Statement, Fixture Filing and Assignment of Leases, Rents and Security Deposits,
in form and substance reasonably satisfactory to the Lenders and the Collateral
Agent, dated on or about the date hereof, made by Madera to Stewart Title
Guaranty Company, as trustee, for the benefit of the Collateral Agent, as
beneficiary.
 
"Madera DG Agreement" the WDG Marketing and Services Agreement, dated March 4,
2005, among Madera, Phoenix Bio Industries and Western Milling, LLC.
 
"Madera Insurance and Condemnation Proceeds Account" has the meaning provided in
Section 8.01(l) (Establishment of Project Accounts).
 
"Madera Plant" means the ethanol production facility located at Madera,
California, with an expected capacity of approximately forty (40) million
gallons-per-year of denatured ethanol, including the Site on which such facility
is located, and all buildings, structures, improvements, easements and other
property related thereto.
 
"Madera Pledge Agreement" means the Pledge and Security Agreement, in form and
substance reasonably satisfactory to the Lenders and the Collateral Agent, dated
on or about the date hereof, among, Pacific Holding, Madera and the Collateral
Agent, pursuant to which Pacific Holding pledges one hundred percent (100%) of
the Equity Interests in Madera to the Collateral Agent.
 
"Madera Security Agreement" means the Assignment and Security Agreement, in form
and substance reasonably satisfactory to the Lenders and the Collateral Agent,
dated on or about the date hereof, made by Madera in favor of the Collateral
Agent.
 
"Madera Warranty Account" has the meaning provided in Section 8.01(r)
(Establishment of Project Accounts).
 
Exhibit A - 43

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"Maintenance Capital Expense Account" has the meaning set forth in
Section 8.01(h) (Establishment of Project Accounts).
 
"Maintenance Capital Expenses" means all expenditures by the Borrowers for
regularly scheduled (or reasonably anticipated) major maintenance of the
Project, Prudent Ethanol Operating Practice and vendor and supplier requirements
constituting major maintenance (including teardowns, overhauls, capital
improvements, replacements and/or refurbishments of major components of the
Project).
 
"Major Project Party" means, with respect to any Plant with respect to which a
Funding has been made or is being requested, each of Parsons (until the
Conversion Date), the Construction Manager (until the Conversion Date), Delta-T,
each Offtaker, each Corn Supplier, the Operator, the landlord under each Lease,
the guarantor under any Project Document Guarantee guarantying the obligations
of any other Major Project Party and any other Project Party designated as a
Major Project Party by the Administrative Agent and the Borrowers' Agent.
 
"Mandatory Prepayment" means a prepayment in accordance with Section 3.10
(Mandatory Prepayment).
 
"Material Adverse Effect" means any event, development or circumstance that has
had or could reasonably be expected to have a material adverse effect on (i) the
business, assets, property, condition (financial or otherwise), or construction
or operations (as applicable) of the Borrowers or the Project, taken as a whole,
(ii) the ability of Pacific Holding or any Borrower that is the owner of a Plant
with respect to which any Funding has been made or is being requested, or any
other Loan Party or any Project Party to perform its material obligations under
any Transaction Document (other than Project Documents relating to Plants with
respect to which no Funding has been made and no Funding is being requested) to
which it is a party, (iii) creation, perfection or priority of the Liens
granted, or purported to be granted, in favor, or for the benefit, of the
Collateral Agent pursuant to the Security Documents or (iv) the rights or
remedies of any Senior Secured Party under any Financing Document.  For the
avoidance of doubt, any reference to a Material Adverse Effect with respect to a
Borrower or a Plant shall, with respect to clause (i) or (ii) of this
definition, as the case may be, be deemed to refer to such Borrower or Plant on
an individual basis (and not to the Borrowers or the Project, taken as a whole
or to any other Borrower or Plant on an individual basis).
 
Exhibit A - 44

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"Materials of Environmental Concern" means chemicals, pollutants, contaminants,
wastes, toxic substances and hazardous substances, any toxic mold, radon gas or
other naturally occurring toxic or hazardous substance or organism and any
material that is regulated in any way, or for which liability is imposed,
pursuant to an Environmental Law.
 
"Maturity Date" means, as the context may require, (a) with respect to the
Construction Loans, the Construction Loan Maturity Date, (b) with respect to the
Term Loans, the Final Maturity Date, and (c) with respect to the Working Capital
Loans, the Working Capital Maturity Date.
 
"Maximum Available Amount" means, with respect to any Letter of Credit at any
time, the maximum amount the beneficiary of such Letter of Credit may draw
thereunder at such time, as such amount may be reduced from time to time
pursuant to the terms of such Letter of Credit.
 
"Maximum Rate" has the meaning provided in Section 11.10 (Interest Rate
Limitation).
 
"Minimum Performance Criteria" means, with respect to each Plant, that such
Plant achieved the following performance levels (as demonstrated in a
Performance Test, completed in accordance with the Approved Performance Test
Protocols, while meeting the permitted air emissions requirements as specified
in the Approved Performance Test Protocols):
 
(a) denatured fuel ethanol production rate of (i) in the case of each of the
Madera Plant and the Boardman Plant,  at least 35 million gallons per year and
(ii) in the case of each Greenfield Plant, at least 50 million gallons per year,
in each case based on 351 days of operation per year and on ethanol quality
specifications set forth in the Approved Performance Test Protocols;
 
(b) undenatured fuel ethanol yield, process electrical consumption rate and
process natural gas consumption rate that would result in an aggregate reduction
(if any) of the Term Loan Commitment for such Plant pursuant to Section 2.08(e)
(Termination or Reduction of Commitments) solely due to such performance levels
of not more than (i) in the case of the Madera Plant, three million seven
hundred fourteen thousand two hundred ninety-eight Dollars ($3,714,298), (ii) in
the case of the Boardman Plant, three million seven hundred seventy-nine
thousand twenty-six Dollars ($3,779,026), (iii) in the case of the Stockton
Plant, six million six hundred sixty-eight thousand six hundred eight Dollars
($6,668,608), (iv) in the case of the Brawley Plant, six million six hundred
eighty-eight thousand eight hundred ninety-nine Dollars ($6,688,899) and (v) in
the case of the Burley Plant, five million six hundred thirty-two thousand seven
hundred twenty-nine Dollars ($5,632,729).
 
Exhibit A - 45

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"Monthly Date" means the last Business Day of each calendar month.
 
"Monthly Progress Report" means, with respect to each Plant, a monthly report
for such Plant in substantially the form of Exhibit 7.03(g).
 
"Moody's" means Moody's Investors Service Inc., and any successor thereto that
is a nationally recognized rating agency.
 
"Mortgaged Property" means all real property right, title and interest of each
Borrower that is subject to the relevant Mortgage in favor of the Collateral
Agent.
 
"Mortgages" means, together, the Madera Deed of Trust, the Boardman Deed of
Trust, the Stockton Deed of Trust (when entered into), the Brawley Deed of Trust
(when entered into), and the Burley Deed of Trust (when entered into).
 
"Multiemployer Plan" means a Plan that is a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA.
 
"Necessary Project Approvals" has the meaning set forth in Section 5.03(a)
(Governmental Approvals).
 
"Net Swap Payment" means, with respect to any Interest Rate Protection Agreement
and for any period, all scheduled Obligations due and payable by any Borrower
under such Interest Rate Protection Agreement during such period, after giving
effect to any netting applicable thereto.
 
"Non-Appealable" means, with respect to any specified time period allowing an
appeal of any ruling under any constitutional provision, Law, statute, rule,
regulation, ordinance, treaty, order, decree, judgment, decision, certificate,
holding or injunction that such specified time period has elapsed without an
appeal having been brought.
 
"Non-Voting Lender" means any Lender who (a) is also a Loan Party, a Project
Party or any Affiliate or Subsidiary thereof or (b) has sold a participation in
the Loan held by it to any such Person.
 
Exhibit A - 46

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"Non-U.S. Lender" has the meaning set forth in Section 4.07(e) (Taxes - Foreign
Lenders).
 
"Notes" means the Construction Notes, the Term Notes and the Working Capital
Notes, including any promissory notes issued by any Borrower in connection with
assignments of any Loan of a Lender, in each case substantially in the form of
Exhibit 2.07, as they may be amended, restated, supplemented or otherwise
modified from time to time.
 
"Notice of Suspension" has the meaning provided in Section 8.26 (Notices of
Suspension of Accounts).
 
"O&M Agreements" means each Operation and Maintenance Agreement between any
Borrower and the Operator.
 
"Obligations" means and includes all loans, advances, debts, liabilities,
Indebtedness and obligations, howsoever arising, owed to the Agents, the Lenders
or any other Senior Secured Party of every kind and description (whether or not
evidenced by any note or instrument and whether or not for the payment of
money), direct or indirect (including those acquired by assumption), absolute or
contingent, due or to become due, now existing or hereafter arising and
including interest and fees that accrue after the commencement by or against any
Borrower of any Insolvency Proceeding naming such Borrower as the debtor in such
proceeding, regardless of whether such interest and fees are allowed claims in
such proceeding, pursuant to the terms of this Agreement or any of the other
Financing Documents, including all principal, interest, fees, charges, expenses,
attorneys' fees, costs and expenses, accountants' fees and Consultants' fees
payable by the Borrowers hereunder or thereunder.
 
"Offtaker" means each counterparty to each DG Offtake Agreement and each Ethanol
Offtake Agreement.
 
"Operating Account" has the meaning provided in Section 8.01(g) (Establishment
of Project Accounts).
 
"Operating Account Withdrawal Certificate" means a certificate in substantially
the form of Exhibit 8.09, duly executed by an Authorized Officer of the
Borrowers' Agent, directing the transfer or withdrawal of funds from the
Operating Account.
 
"Operating Budget" has the meaning set forth in Section 7.01(j) (Affirmative
Covenants - Operating Budgets).
 
"Operating Budget Category" means, at any time with respect to each Operating
Budget, each line item set forth in such Operating Budget in effect at such
time.
 
Exhibit A - 47

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"Operating Statement" means an operating statement with respect to each Plant
that has achieved its Commercial Operation Date, in substantially the form of
Exhibit 7.03(p).
 
"Operation and Maintenance Expenses" means (with respect to each Plant that has
achieved its Commercial Operation Date), for any period on or after the
Commercial Operation Date for each such Plant, the sum without duplication of
all (i) reasonable and necessary expenses of administering, managing and
operating, and generating Products for sale from, the Project and maintaining it
in good repair and operating condition, (ii)  costs associated with the supply
and transportation of all corn, natural gas, electricity and other supplies and
raw materials to the Project and distribution and sale of Products from the
Project that any Borrower is obligated to pay, (iii) all reasonable and
necessary insurance costs (other than insurance premiums that are paid as
Project Costs), (iv) property, sales and franchise taxes to the extent that any
Borrower is liable to pay such taxes to the taxing authority (other than taxes
imposed on or measured by income or receipts) to which the Project, may be
subject (or payment in lieu of such taxes to which the Project may be subject),
(v) reasonable and necessary costs and fees incurred in connection with
obtaining and maintaining in effect Necessary Project Approvals for each Plant
on or after the Commercial Operation Date for such Plant, (vi) reasonable and
arm's-length legal, accounting and other professional fees attendant to any of
the foregoing items during such period, (vii) the reasonable costs of
administration and enforcement of the Transaction Documents, (viii) costs
incurred pursuant to the Permitted Commodity Hedging Arrangements, and (ix) all
other costs and expenses included in the then-current Operating Budget for such
Plant.  In no event shall Project Costs or Maintenance Capital Expenses be
considered Operation and Maintenance Expenses.
 
"Operator" means the Pledgor or any successor pursuant to an O&M Agreement (or
any replacement thereof).
 
"Organic Documents" means, with respect to any Person that is a corporation, its
certificate of incorporation, its by-laws and all shareholder agreements, voting
trusts and similar arrangements applicable to any of its authorized shares of
capital stock and, with respect to any Person that is a limited liability
company, its certificate of formation or articles of organization and its
limited liability agreement.
 
"Pacific Ag Products" means Pacific Ag Products LLC, a California limited
liability company.
 
"Pacific Ethanol" means Pacific Ethanol, Inc., a Delaware corporation.
 
"Pacific Ethanol Guarantees" means each guaranty to be made by Pacific Ethanol,
guaranteeing the performance and payment of the obligations of Kinergy or
Pacific Ag Products, as the case may be, under each of the Ethanol Offtake
Agreements, DG Offtake Agreements, and Grain Supply Agreements to which Kinergy
or Pacific Ag Products are party.
 
Exhibit A - 48

--------------------------------------------------------------------------------

 
"Pacific Holding" has the meaning set forth in the Preamble.
 
"Pacific Holding Pledge Agreement" means the Pledge and Security Agreement, in
form and substance reasonably satisfactory to the Lenders and the Collateral
Agent, dated on or about the date hereof, among Pacific Holding, Pledgor and the
Collateral Agent, pursuant to which Pledgor pledges one hundred percent (100%)
of the Equity Interests in Pacific Holding to the Collateral Agent.
 
"Pacific Holding Security Agreement" means the Assignment and Security
Agreement, in form and substance reasonably satisfactory to the Lenders and the
Collateral Agent, dated on or about the date hereof, made by Pacific Holding in
favor of the Collateral Agent.
 
"Parsons" means Parsons RCIE Inc., a corporation organized under the laws of the
State of Washington.
 
"Participant" has the meaning provided in Section 11.03(d) (Assignments).
 
"Patriot Act" means United States Public Law 107-56, Uniting and Strengthening
America by Providing Appropriate Tools Required to Intercept and Obstruct
Terrorism (USA PATRIOT ACT) of 2001, and the rules and regulations promulgated
thereunder from time to time in effect.
 
"Payment Bond" means any payment bond provided for the benefit of any Borrower
under any Construction Contract.
 
"PBGC" means the Pension Benefit Guaranty Corporation and any entity succeeding
to any or all of its functions under ERISA.
 
"Performance Bond" means any performance bond provided for the benefit of any
Borrower under any Construction Contract.
 
"Performance Guarantee" means the guaranteed performance levels set forth on
Schedule 7.01(k)-A.
 
"Performance Test" means, with respect to each Plant, any performance test
conducted by the Borrowers to determine satisfaction of the Minimum Performance
Criteria and the Performance Guarantees.
 
Exhibit A - 49

--------------------------------------------------------------------------------

 
"Performance Test Report" has the meaning provided in Section 7.01(k)
(Affirmative Covenants - Performance Tests).
 
"Permitted Commodity Hedging Arrangements" means those Commodity Hedging
Arrangements entered into by the Borrowers in accordance with Section 7.02(u)
(Negative Covenants - Commodity Hedging Arrangements).
 
"Permitted Indebtedness" means Indebtedness identified in Section 7.02(a)
(Negative Covenants - Restrictions on Indebtedness of the Borrowers).
 
"Permitted Liens" means Liens identified in Section 7.02(b) (Negative Covenants
- Liens).
 
"Permitted Operating Budget Deviation Levels" means, with respect to Operation
and Maintenance Expenses (other than Operation and Maintenance Expenses for the
cost of corn, natural gas, electricity, insurance premiums and Borrower Taxes)
and with respect to Maintenance Capital Expenses, (a) (i) with respect to each
Plant, fifteen percent (15%) of the amount projected for such expenses in the
then-current Operating Budget for such Plant and (ii) for the Project, ten
percent (10%) the amount projected for such expenses in the then-current
Operating Budget for the Project; provided, that in the case of this clause (a),
Operating Budget line items for annual expenses that are paid periodically (for
example, insurance premiums) shall be treated on an annualized basis for the
purposes of determining the amount of such permitted deviation); (b) increased
costs that are paid for with documented voluntary equity contributions made to
the Borrowers for the purpose of paying such increased costs, which may be paid
without regard to any other restrictions in this definition of Permitted
Operating Budget Deviation Levels; and (c) in the event that ethanol production
levels for any Fiscal Quarter for any Plant or the Project, as reported in an
Operating Statement delivered pursuant to Section 7.03(p) (Reporting
Requirements - Operating Statements), exceed the amounts projected in the
then-current Operating Budgets for such Plant or the Project, as the case may
be, for such Fiscal Quarter, by a variation greater than three percent (3%),
then the permitted deviations for the immediately succeeding Fiscal Quarter
shall be increased or decreased, as the case may be, in a percentage equal to
the percentage increase in such ethanol production levels.
 
"Permitted Tax Distribution" means, with respect to any distributee that is
required to pay tax as a result of its direct or indirect ownership of the
Borrowers, an amount equal to (a) the Effective Tax Rate at such time multiplied
by (b) such distributee's estimated share of the taxable income of Pacific
Holding and the other Borrowers (after netting or otherwise taking account of a
distributee's shares of the income, loss, deduction and credit associated with
the distributee's interest in the Borrowers) that the distributee is reasonably
expected to have to report for income tax purposes for the Fiscal Quarter
distributed to the extent necessary to fund a distributee's timely payment to a
Governmental Authority of tax liability (including estimated payments thereof)
and subject to correction as described below.  "Effective Tax Rate" means, as of
any date of calculation, a percentage equal to the sum of (x) such distributee's
then-current federal marginal income tax rate plus (y) such distributee's
then-current applicable state marginal income tax rate, but only to the extent
of the blended rate that would have applied to such income if each state in
which a Borrower was located had imposed its income tax on the taxable earnings
of that Borrower.  Permitted Tax Distributions as estimated for purposes of a
Quarterly Payment Date shall be subject to later correction to reflect amounts
as actually reported on an income tax return by a distributee for federal and
state income tax purposes.  Thus, on any Quarterly Payment Date, the Permitted
Tax Distribution means the amount calculated as the product of (a) and (b),
above, adjusted by the difference, if any, between the Permitted Tax
Distribution for the preceding Quarterly Payment Date as estimated for such date
and the Permitted Tax Distribution for that preceding Quarterly Payment Date as
finally determined.
 
Exhibit A - 50

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"Person" means any natural person, corporation, partnership, limited liability
company, firm, association, trust, government, governmental agency or any other
entity, whether acting in an individual, fiduciary or other capacity.
 
"Plan" means an employee pension benefit plan (as defined in Section 3(3) of
ERISA) subject to Title IV of ERISA or Section 412 of the Code that is sponsored
or maintained by any Borrower or any ERISA Affiliate, or in respect of which any
Borrower or any ERISA Affiliate has any obligation to contribution or Liability.
 
"Plants" means, collectively, the Madera Plant, the Boardman Plant and the
Greenfield Plants.
 
"Pledge Agreements" means, collectively, the Madera Pledge Agreement, the
Boardman Pledge Agreement, the Stockton Pledge Agreement (when entered into),
the Brawley Pledge Agreement (when entered into), the Burley Pledge Agreement
(when entered into) and the Pacific Holding Pledge Agreement.
 
"Pledgor" means Pacific Ethanol California, Inc. a California corporation.
 
"Prepayment Holding Account" has the meaning set forth in Section 8.01(k)
(Establishment of Project Accounts).
 
"Primary Swap Obligations" means, with respect to any Interest Rate Protection
Agreement, all scheduled obligations due and payable by any Person party to such
Interest Rate Protection Agreement (after giving effect to any netting
applicable thereto) and all payments of Swap Termination Value due and payable
by any Person party to such Interest Rate Protection Agreement, but excluding
any amounts owed in respect of Taxes, expenses and indemnification obligation
which do not constitute payments of Swap Termination Value.
 
"Priority Subordinated Loans" means Subordinated Loans up to an initial
aggregate principal amount of fifty million Dollars ($50,000,000).
 
"Process Agent" means any Person appointed as agent by any Borrower or any
Project Party, as required under the Financing Documents, to receive on behalf
of itself and its property services of copies of summons and complaint or any
other process which may be served in connection with any action or proceeding
before any court arising out of or relating to this Agreement or any other
Financing Document to which it is a party, including CT Corporation System.
 
"Products" means ethanol, Distillers Grains, carbon dioxide, and any other
co-product or by-product produced in connection with the production of ethanol
at the Plants.
 
Exhibit A - 51

--------------------------------------------------------------------------------

 
"Project" means, at all times, each Plant with respect to which a Funding has
been made or is being requested and all auxiliary and other facilities
constructed or to be constructed by or on behalf of the applicable Borrowers
pursuant to the Project Documents relating to each such Plant or otherwise,
together with all fixtures and improvements thereto and each Site and all other
real property, easements and rights-of-way held by or on behalf of the
applicable Borrowers and all rights to use easements and rights-of-way of
others.
 
"Project Accounts" means the Escrow Account, the Construction Accounts, Revenue
Account, Operating Account, Prepayment Holding Account, Working Capital Reserve
Account, Maintenance Capital Expense Account, Debt Service Reserve Account,
Insurance and Condemnation Proceeds Accounts, Extraordinary Proceeds Account,
and  Warranty Accounts, including any sub-account within such accounts.
 
"Project Company Subordinated Debt" means unsecured subordinated Indebtedness
incurred or to be incurred by any of the Borrowers on terms and conditions
satisfactory to the Administrative Agent in its sole discretion, or otherwise
reasonably satisfactory to the Required Lenders, and in any such case subject to
the maximum amount set forth in Section 7.02(a)(vii) (Negative Covenants -
Restrictions on Indebtedness of the Borrowers).
 
"Project Completion Deficiency" has the meaning provided in the Sponsor Support
Agreement.
 
"Project Costs" means, collectively, the Stockton Project Costs, the Brawley
Project Costs, and the Burley Project Costs.
 
"Project Document Approval Level" means (i) in the case of any Project Document
entered into on or before the Closing Date and delivered pursuant to
Section 6.01(b)(i) (Conditions to Closing - Delivery of Project Documents) and
any other Project Document entered into after the Closing Date in the form of a
comparable existing Project Document (in each such case together with any
amendment or modification thereto that is in the form of a comparable existing
Project Document), such Project Document, amendment or modification (and, in any
event, any immaterial amendment or modification to any Project Document) shall
be deemed to be approved, (ii) in the case of any Project Document or amendment
or modification thereto entered into after the Closing Date that deviates from
the form of a comparable existing Project Document, any material deviations (or,
if no such comparable Project Document exists, the agreement itself) will
require the approval of the Administrative Agent (in consultation with the
Independent Engineer) and (iii) in the case of any Project Document entered into
after the Closing Date with a counterparty other than an existing Project Party
on the Closing Date, such counterparty shall (A) be subject to the approval
requirements of Schedule 6.02(e)(i) or (B) otherwise be approved by the Required
Lenders.
 
Exhibit A - 52

--------------------------------------------------------------------------------

 
"Project Document Guarantees" means each guarantee (by an Affiliate or
otherwise) of the performance of any Project Party's obligations under a Project
Document, including the Pacific Ethanol Guarantees and any other such guarantee
required as a condition to approval of any Project Document in accordance with
this Agreement.
 
"Project Documents" means:
 
(i) 
the Construction Contracts;

 
(ii) 
the Leases;

 
(iii) 
the Grain Supply Agreements;

 
(iv) 
the Ethanol Offtake Agreements;

 
(v) 
the DG Offtake Agreements;

 
(vi) 
the O&M Agreements;

 
(vii) 
the Borrower LLC Agreements;

 
(viii) 
the Project Document Guarantees;

 
(ix) 
any other documents designated as a Project Document by the Borrowers' Agent and
the Administrative Agent;

 
(x) 
each Additional Project Document; and

 
(xi) 
any replacement agreement for any of such agreements.

 
"Project Document Termination Payments" means all payments that are required to
be paid to or for the account of any Borrower as a result of the termination of
any Project Document.
 
"Project Party" means each Person (other than the Borrowers) who is a party to a
Project Document.
 
Exhibit A - 53

--------------------------------------------------------------------------------

 
"Prospective Debt Service Coverage Ratio" means, for any Quarterly Payment Date,
for the Fiscal Quarter including such Quarterly Payment Date and the three (3)
Fiscal Quarters immediately following such Quarterly Payment Date, the ratio of
(i) Cash Flow Available for Debt Service projected for such period to (ii) Debt
Service projected for such period, in each case based on the then-current
Operating Budget approved in accordance with Section 7.01(j) (Affirmative
Covenants - Operating Budget), as the same has been updated (if necessary) to
reflect the then-current projections for commodity prices, and approved by the
Administrative Agent, acting reasonably.
 
"Prudent Ethanol Operating Practice" means those reasonable practices, methods
and acts that (i) are commonly used in the regions where the Plants are located
to manage, operate and maintain ethanol production, distribution, equipment and
associated facilities of the size and type that comprise the Project safely,
reliably, and efficiently and in compliance with applicable Laws, manufacturers'
warranties and manufacturers' and licensor's recommendations and guidelines, and
(ii) in the exercise of reasonable judgment, skill, diligence, foresight and
care are expected of an ethanol plant operator, in order to efficiently
accomplish the desired result consistent with safety standards, applicable Laws,
manufacturers' warranties, manufacturers' recommendations and, in the case of
the Project, the Project Documents.  Prudent Ethanol Operating Practice does not
necessarily mean one particular practice, method, equipment specifications or
standard in all cases, but is instead intended to encompass a broad range of
acceptable practices, methods, equipment specifications and standards.
 
"Qualified Counterparty" means any of the following:  (i) any Person who is a
Lender, the Administrative Agent, or the Collateral Agent on the date the
relevant Interest Rate Protection Agreement is entered into or (ii) any
Affiliate of any Person listed in clause (i).
 
"Quarterly Payment Date" means each of March 31, June 30, September 30 and
December 31.
 
"Quarterly Period" means each three (3) month period beginning on (and
including) the day immediately following a Quarterly Payment Date and ending on
(and including) the next Quarterly Payment Date.
 
"RCRA" means the Resource Conservation and Recovery Act (42 U.S.C. § 6901 et
seq.), as amended, and all rules, regulations, standards, guidelines, and
publications issued thereunder.
 
"Register" has the meaning set forth in Section 11.03(c) (Assignments).
 
"Related Parties" means, with respect to any Person, such Person's Affiliates
and the partners, directors, officers, employees, agents and advisors of such
Person and of such Person's Affiliates.
 
Exhibit A - 54

--------------------------------------------------------------------------------

 
"Removal," "Remedial" and "Response" actions shall include the types of
activities covered by CERCLA, RCRA, and other comparable Environmental Laws, and
whether the activities are those which might be taken by a Governmental
Authority or those which a Governmental Authority or any other Person might seek
to require of waste generators, handlers, distributors, processors, users,
storers, treaters, owners, operators, transporters, recyclers, reusers,
disposers, or other Persons under "removal," "remedial," or other "response"
actions.
 
"Reportable Event" means a "reportable event" within the meaning of
Section 4043(c) of ERISA.
 
"Required Cash Sweep" means each mandatory prepayment of the Loans made pursuant
to Section 3.10(b)(i) (Mandatory Prepayment).
 
"Required Equity Contributions" means, collectively, the Stockton Required
Equity Contribution, the Brawley Required Equity Contribution and the Burley
Required Equity Contribution.
 
"Required Lenders" means (a) at any time prior to the Conversion Date, Lenders
(excluding all Non-Voting Lenders) holding in excess of fifty percent (50.00%)
of the Construction Loan Commitments and the Working Capital Loan Commitments
(excluding the Construction Loan Commitments and the Working Capital Loan
Commitments of all Non-Voting Lenders) and (b) at any time after the Conversion
Date, Lenders (excluding all Non-Voting Lenders) holding in excess of fifty
percent (50.00%) of an amount equal to (x) the then aggregate outstanding
principal amount of the Loans plus (y) the undisbursed amount of the Aggregate
Working Capital Loan Commitment (excluding the principal amounts of any Loans
made by, and any Working Capital Loan Commitments of,  any Non-Voting Lenders).
 
"Required LLC Provisions" has the meaning provided in Section 5.24 (Required LLC
Provisions).
 
"Restoration or Replacement Plan" means a plan and time schedule, reasonably
satisfactory to the Administrative Agent (in the case of amounts less than or
equal to five million Dollars ($5,000,000) arising from any one claim or any
series of claims relating to the same occurrence with respect to the same Plant)
or the Required Lenders (in the case of amounts greater than five million
Dollars ($5,000,000) arising from any one claim or any series of claims relating
to the same occurrence with respect to the same Plant), and in either such case
reasonably satisfactory to the Independent Engineer, for the application of
Insurance Proceeds or Condemnation Proceeds arising from any Casualty Event or
Event of Taking, as the case may be, and any other funds available to the
Borrowers with which to restore or replace any Plant (or any portion thereof)
affected by such Casualty Event or Event of Taking, as the case may be.
 
Exhibit A - 55

--------------------------------------------------------------------------------

 
"Restricted Payment Certificate" means a certificate in substantially the form
of Exhibit 7.02(s), duly executed by an Authorized Officer of the Borrowers'
Agent.
 
"Restricted Payments" means any (a) dividend or other distribution (whether in
cash, securities or other property), or any payment (whether in cash, securities
or other property), including any sinking fund or similar deposit, on account of
the purchase, redemption, retirement, defeasance, acquisition, cancellation or
termination of any Equity Interests of any Borrower, or on account of any return
of capital to any holder of any such Equity Interest in, or any other Affiliate
of, any Borrower, or any option, warrant or other right to acquire any such
dividend or other distribution or payment, (b) any payment in respect to
Subordinated Debt Obligations (other than the Current Priority Subordinated
Interest), and (c) any payment of any management, consultancy, administrative,
services, or other similar payments to any Person who owns, directly or
indirectly, any Equity Interest in any Borrower, or any Affiliate of any such
Person (provided that (i) payments made under the Affiliated Project Documents
when due and payable in accordance with the terms thereof and the terms of the
Financing Documents, (ii) any Permitted Tax Distributions, (iii) any payment
made to Pacific Ethanol pursuant to Section 3.01(c) (Sponsor's Warranty
Undertaking) or 4.02 (Adjustments to Warranty Funding Cap and Sponsor Funding
Cap) of the Sponsor Support Agreement and (iv) any Sponsor Support Reimbursement
Funding, any Sponsor Support Reimbursement, or any Buy-Down L.D. Reimbursement,
shall each not constitute Restricted Payments).
 
"Revenue Account" has the meaning set forth in Section 8.01(f) (Establishment of
Project Accounts).
 
"Revenue Account Withdrawal Certificate" means a certificate in substantially
the form of Exhibit 8.08-A (prior to the Conversion Date) or Exhibit 8.08-B (on
and after the Conversion Date), in each such case duly executed by an Authorized
Officer of the Borrowers' Agent, directing the transfer or withdrawal of funds
from the Revenue Account.
 
"S&P" means Standard & Poor's Ratings Services, a division of The McGraw-Hill
Companies, Inc., and any successor thereto that is a nationally recognized
rating agency.
 
"Schedule of Values" means, with respect to each Plant, any "schedule of values"
provided in any Construction Contract for such Plant.
 
"Security" means the security created in favor of the Collateral Agent pursuant
to the Security Documents.
 
"Security Agreements" means, collectively, the Madera Security Agreement, the
Boardman Security Agreement, the Stockton Security Agreement (when entered
into), the Brawley Security Agreement (when entered into), the Burley Security
Agreement (when entered into) and the Pacific Holding Security Agreement.
 
Exhibit A - 56

--------------------------------------------------------------------------------

 
"Security Documents" means:
 
(i) 
each Mortgage;

 
(ii) 
this Agreement (to the extent that it relates to the Project Accounts);

 
(iii) 
the Consents;

 
(iv) 
the Pledge Agreements;

 
(v) 
the Security Agreements;

 
(vi) 
any other document designated as a Security Document by the Borrowers' Agent and
the Administrative Agent; and

 
(vii) 
any fixture filings, financing statements, notices, authorization letters, or
other certificates filed, recorded or delivered in connection with the
foregoing.

 
"Senior Secured Parties" means the Lenders, the Agents, any Interest Rate
Protection Provider, and each of their respective successors, transferees and
assigns.
 
"Site" means, with respect to each Plant, those certain parcels described on
Schedule 5.13(a) with respect to such Plant (as such Schedule may be updated
with the prior written approval of the Administrative Agent).
 
"Solvent" means, with respect to any Person, that as of the date of
determination both (i) (A) the then fair saleable value of the property of such
Person is (y) greater than the total amount of liabilities (including Contingent
Liabilities but excluding amounts payable under intercompany loans or promissory
notes) of such Person and (z) not less than the amount that will be required to
pay the probable liabilities on such Person's then existing debts as they become
absolute and matured considering all financing alternatives and potential asset
sales reasonably available to such Person; (B) such Person's capital is not
unreasonably small in relation to its business or any contemplated or undertaken
transaction; and (C) such Person does not intend to incur, or reasonably believe
that it will incur, debts beyond its ability to pay such debts as they become
due; and (ii) such Person is "solvent" within the meaning given that term and
similar terms under applicable Laws relating to fraudulent transfers and
conveyances.  For purposes of this definition, the amount of any Contingent
Liability at any time shall be computed as the amount that, in light of all of
the facts and circumstances existing at such time, represents the amount that
can reasonably be expected to become an actual or matured liability.
 
Exhibit A - 57

--------------------------------------------------------------------------------

 
"Sponsor Support Agreement" means the Sponsor Support Agreement, dated on or
about the date hereof, in form and substance reasonably satisfactory to the
Lenders, pursuant to which Pacific Ethanol agrees to provide support for the
Project on the terms and conditions set forth therein.
 
"Sponsor Support Reimbursement Funding" means any Funding of Construction Loans
for a Greenfield Plant that is applied to reimburse Pacific Ethanol for payments
made under the Sponsor Support Agreement, as contemplated by Section 2.04(g)
(Sponsor's Deficiency Funding Obligation) of the Sponsor Support Agreement.
 
"Sponsor Support Reimbursements" means any reimbursements for Sponsor Deficiency
Payments and/or Sponsor Warranty Payments (each as defined in the Sponsor
Support Agreement) that Pacific Ethanol is entitled to receive pursuant to
Section 2.04(g) (Sponsor's Deficiency Funding Obligation), Section 4.02
(Adjustments to Warranty Funding Cap and Sponsor Funding Cap) and Section
3.01(c) (Sponsor's Warranty Undertaking) of the Sponsor Support Agreement.
 
"SPV" has the meaning provided in Section 11.03(h) (Assignments).
 
"Stated Amount" has the meaning specified for such term in any Letter of Credit
or Debt Service Reserve Letter of Credit, as the case may be.
 
"Stockton" has the meaning set forth in the Preamble.
 
"Stockton Construction Account" has the meaning set forth in Section 8.01(c)
(Establishment of Project Accounts).
 
"Stockton Construction Budget" means the budget attached hereto as
Schedule 7.02(t) that sets forth all categories of costs and expenses required
in connection with the development, construction, start-up, and testing of the
Stockton Plant, including all construction costs and non-construction costs, all
costs under the Stockton Construction Contract, all interest, taxes and other
carrying costs related to the Construction Loans for the Stockton Plant, and
costs related to the construction of the facilities described under the Project
Documents relating to the Stockton Plant, as updated from time to time in
accordance with Section 6.04(h) (Conditions to First Funding for Each Greenfield
Plant –Construction Schedule and Updated Budget) and Section 7.02(t) (Negative
Covenants - Construction Budget).
 
Exhibit A - 58

--------------------------------------------------------------------------------

 
"Stockton Construction Withdrawal Certificate" means a certificate in
substantially the form of Exhibit 8.05, duly executed by an Authorized Officer
of the Borrowers' Agent, directing the transfer or withdrawal of funds from the
Stockton Construction Account.
 
"Stockton Deed of Trust" means the Deed of Trust, Security Agreement, Financing
Statement, Fixture Filing and Assignment of Leases, Rents and Security Deposits,
in substantially the form of Exhibit 6.04(g)-A (or with changes agreed to by the
Borrowers, the Administrative Agent and the Collateral Agent, in each case
acting reasonably), to be made by Stockton to Stewart Title Guaranty Company, as
trustee, for the benefit of the Collateral Agent, as the beneficiary.
 
"Stockton Equity Contributions" means the aggregate total amount of (i) the
Stockton Required Equity Contribution (following the contribution of such
amounts to Stockton and their application to Stockton Project Costs) and (ii)
all other equity contributed to Stockton and applied to Stockton Project Costs.
 
"Stockton Insurance and Condemnation Proceeds Account" has the meaning provided
in Section 8.01(n) (Establishment of Project Accounts).
 
"Stockton Lease" means the lease to be entered into between the Stockton Port
District and Stockton.
 
"Stockton Plant" means the ethanol production facility located at Stockton,
California, with a design basis capacity of approximately fifty (50) million
gallons-per-year of denatured ethanol, including the Site on which such facility
is located, and all buildings, structures, improvements, easements and other
property related thereto.
 
"Stockton Pledge Agreement" means the Pledge and Security Agreement, in
substantially the form of Exhibit 6.04(g)-B (or with changes agreed to by the
Borrowers, the Administrative Agent and the Collateral Agent, in each case
acting reasonably), to be entered into among Pacific Holding, Stockton and the
Collateral Agent, pursuant to which Pacific Holding will pledge one hundred
percent (100%) of the Equity Interests in Stockton to the Collateral Agent.
 
"Stockton Project Costs" means the following costs and expenses incurred by the
Borrowers in connection with the Stockton Plant prior to the Commercial
Operation Date for the Stockton Plant and set forth in the then-current Stockton
Construction Budget or otherwise approved in writing by the Administrative Agent
(in consultation with the Independent Engineer):
 
Exhibit A - 59

--------------------------------------------------------------------------------

 
(i) 
costs incurred by the Borrowers under the Stockton Construction Contracts, and
other costs directly related to the acquisition, site preparation, design,
engineering, construction, installation, start-up, and testing of the Stockton
Plant;

 
(ii) 
fees and expenses incurred by or on behalf of the Borrowers and allocated to the
Stockton Plant in connection with the development of the Project and the
consummation of the transactions contemplated by this Agreement, including
financial, accounting, legal, surveying and consulting fees, and the costs of
preliminary engineering;

 
(iii) 
interest and Fees on the Construction Loans for the Stockton Plant;

 
(iv) 
financing fees and expenses in connection with the Loans and the fees, costs and
expenses of the Agents' counsel, any Interest Rate Protection Provider's counsel
and the Consultants that are allocated to the Stockton Plant;

 
(v) 
insurance premiums with respect to the Title Insurance Policy for the Stockton
Plant and the insurance for the Stockton Plant required pursuant to
Section 7.01(h) (Affirmative Covenants - Insurance);

 
(vi) 
costs of corn and natural gas utilized for commissioning, Performance Tests for,
and operation of, the Stockton Plant prior to its Commercial Operation Date; and

 
(vii) 
all other costs and expenses included in the then-current Stockton Construction
Budget.

 
"Stockton Required Equity Contribution" means, as of the initial Funding Date
for the Stockton Plant, an amount equal to the aggregate total amount of Project
Costs in the Construction Budget for the Stockton Plant approved pursuant to
Section 6.04(h)(i) (Conditions to First Funding for Each Greenfield Plant -
Construction Schedule and Updated Budget) minus (x) five million Dollars
($5,000,000) and (y) the lesser of (A) forty-five million Dollars ($45,000,000)
or (B) an amount equal to forty percent (40%) of such aggregate Project Costs.
 
"Stockton Security Agreement" means the Assignment and Security Agreement, in
substantially the form of Exhibit 6.04(g)-C (or with changes agreed to by the
Borrowers, the Administrative Agent and the Collateral Agent, in each case
acting reasonably), to be made by Stockton in favor of the Collateral Agent.
 
Exhibit A - 60

--------------------------------------------------------------------------------

 
"Stockton Warranty Account" has the meaning provided in Section 8.01(t)
(Establishment of Project Accounts).
 
"Storage Facilities" means the facilities described on Schedule 7.02(f).
 
"Subordinated Debt Agreements" means each agreement with respect to Project
Company Subordinated Debt or Indebtedness of Affiliates of the Borrowers the
proceeds of which will be used exclusively for the payment of Project Costs and
transaction costs associated therewith, each of which shall be in form and
substance satisfactory to the Administrative Agent in its sole discretion or
otherwise reasonably satisfactory to the Required Lenders.
 
"Subordinated Lenders" means any lenders providing financing under any
Subordinated Debt Agreement.
 
"Subordinated Loans" means each loan (or similar funding) made pursuant to any
Subordinated Debt Agreement.
 
"Subsidiary" of any Person means a corporation, partnership, joint venture,
limited liability company or other business entity of which a majority of the
shares of securities or other Equity Interests having ordinary voting power for
the election of directors or other governing body (other than securities or
interests having such power only by reason of the happening of a contingency)
are at the time beneficially owned, or the management of which is otherwise
controlled, directly, or indirectly through one or more intermediaries, or both,
by such Person.
 
"Substitute Facility" means, upon the written request of the Borrowers and
approval by all of the Lenders (which approval shall be based on customary due
diligence, and subject to execution and delivery of mutually satisfactory
amendments to the Financing Documents and additional security documents) an
ethanol production facility in development by a subsidiary of Pacific Holding
that is substituted for one of the Greenfield Facilities (and related
Borrowers); provided that if such proposed replacement facility is an ethanol
facility to be located at Plymouth, Washington with a design basis capacity of
approximately fifty (50) million gallons per year of denatured ethanol, together
with wet and dried distiller's grains and carbon dioxide as described to the
Lead Arrangers prior to the date hereof, the consent of Lenders holding eighty
percent (80%) or more of the Commitments will be required for such approval.
 
"Successful Syndication" has the meaning provided in the Commitment Letter among
WestLB, Mizuho Corporate Bank, Ltd. and Pacific Ethanol, dated as of January 10,
2007.
 
Exhibit A - 61

--------------------------------------------------------------------------------

 
"Survey" means, with respect to any Site, a survey conforming with the ALTA/ACSM
2005 survey standards, including Table A items 6, 8, 10 and 11(a).
 
"Swap Contract" means (a) any and all rate swap transactions, basis swaps,
credit derivative transactions, forward rate transactions, commodity swaps,
commodity options, forward commodity contracts, equity or equity index swaps or
options, bond or bond price or bond index swaps or options or forward bond or
forward bond price or forward bond index transactions, interest rate options,
forward foreign exchange transactions, cap transactions, floor transactions,
collar transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, (b) any and all transactions of
any kind, and the related confirmations, which are subject to the terms and
conditions of, or governed by, any form of master agreement published by the
International Swaps and Derivatives Association, Inc., any International Foreign
Exchange Master Agreement, or any other master agreement, including any such
obligations or liabilities under any such master agreement and (c) for the
avoidance of doubt, includes the Permitted Commodity Hedging Arrangements and
any Interest Rate Protection Agreements and excludes any contract for the
physical sale or purchase of any commodity.
 
"Swap Termination Value" means, in respect of any one or more Swap Contracts
(including any Permitted Commodity Hedging Arrangements or any Interest Rate
Protection Agreements), after taking into account the effect of any legally
enforceable netting agreement relating to such Swap Contracts, (a) for any date
on or after the date such Swap Contracts have been closed out and termination
value(s) determined in accordance therewith, such termination value(s), and
(b) for any date prior to the date referenced in clause (a), the amount(s)
determined as the mark-to-market value(s) for such Swap Contracts, in accordance
with the terms of the applicable Swap Contract, or, if no provision is made
therein, as determined based upon one or more mid-market or other readily
available quotations provided by any recognized dealer in such Swap Contracts
(which may include a Lender or any Affiliate of a Lender).
 
"Target Balance Amount" means the aggregate of all principal payable under the
Loans projected to be outstanding on each Quarterly Payment Date, as set forth
on Schedule 8.08(c)(xiii).
 
"Tax" or "Taxes" means any present or future taxes (including income, gross
receipts, license, payroll, employment, excise, severance, stamp, documentary,
occupation, premium, windfall profits, environmental, capital stock, franchise,
profits, withholding, social security (or similar), unemployment, disability,
real property, personal property, sales, use, transfer, registration,
value-added, ad valorem, alternative or add-on minimum, estimated, or other tax
of any kind whatsoever), levies, imposts, duties, fees or charges (including any
interest, penalty, or addition thereof) imposed by any government or any
governmental agency or instrumentality or any international or multinational
agency or commission.
 
"Tax Return" means all returns, declarations, reports, claims for refund and
information returns and statements of any Person required to be filed with
respect to, or in respect of, any Taxes, including any schedule or attachment
thereto and any amendment thereof.
 
Exhibit A - 62

--------------------------------------------------------------------------------

 
"Term Loan Commitment" means the Tranche A Term Loan Commitment and the Tranche
B Term Loan Commitment, as the context requires.
 
"Term Loan Commitment Percentage" means, as to any Lender at any time, the
percentage that such Lender's Term Loan Commitment then constitutes of the
Aggregate Term Loan Commitment.
 
"Term Loans" means, collectively, the Tranche A Term Loans and the Tranche B
Term Loans.
 
"Term Notes" means the promissory notes of each Borrower, substantially in the
form of Exhibit 2.07, evidencing Term Loans.
 
"Termination Event" means (i) a Reportable Event with respect to any ERISA Plan,
(ii) the initiation of any action by any Borrower, any ERISA Affiliate or any
ERISA Plan fiduciary to terminate an ERISA Plan (other than a standard
termination under Section 4041(b) of ERISA) or the treatment of an amendment to
an ERISA Plan as a termination under Section 4041(e) of ERISA, (iii) the
institution of proceedings by the PBGC under Section 4042 of ERISA to terminate
an ERISA Plan or to appoint a trustee to administer any ERISA Plan, (iv) the
withdrawal of any Borrower or any ERISA Affiliate from a Multiemployer Plan
during a plan year in which such Borrower or such ERISA Affiliate was a
"substantial employer" as defined in Section 4001(a)(2) of ERISA or the
cessation of operations which results in the termination of employment of twenty
percent (20%) of Multiemployer Plan participants who are employees of any
Borrower or any ERISA Affiliate, (v) the partial or complete withdrawal of any
Borrower or any ERISA Affiliate from a Multiemployer Plan, or (vi) any Borrower
or any ERISA Affiliate is in default (as defined in Section 4219(c)(5) of ERISA)
with respect to payments to a Multiemployer Plan.
 
"Title Insurance Company" means Stewart Title Guaranty Company or such other
title insurance company or companies reasonably satisfactory to the
Administrative Agent.
 
"Title Insurance Policy" has the meaning provided in Section 6.01(q) (Conditions
to Closing - Title Insurance).
 
"Tranche" means, as the case may be, the Tranche A Construction Loans, the
Tranche A Term Loans, the Tranche B Construction Loans or the Tranche B Term
Loans.
 
"Tranche A Applicable Margin" means (a) with respect to the Eurodollar Loans
(i) prior to the Conversion Date, three and three-quarters percent (3.75%), and
(ii) on and after the Conversion Date, three and one-quarter percent (3.25%),
and (b) with respect to the Base Rate Loans (i) prior to the Conversion Date,
two and three-quarters percent (2.75%), and (ii) on and after the Conversion
Date, two and one-quarter percent (2.25%).
 
Exhibit A - 63

--------------------------------------------------------------------------------

 
"Tranche A Construction Loan Commitment" means, with respect to each Tranche A
Lender, the commitment of such Tranche A Lender to make Tranche A  Construction
Loans, as set forth opposite the name of such Tranche A Lender in
Schedule 1.01(a), as the same may be reduced in accordance with Section 2.08
(Termination or Reduction of Commitments) and Section 2.09 (Tranche
Reallocation).
 
"Tranche A Construction Loans" means, collectively, the In-Progress Plant 2
Tranche A Construction Loans, the Greenfield Plant 1 Tranche A Construction
Loans, the Greenfield Plant 2 Construction Loans and the Greenfield Plant 3
Construction Loans.
 
"Tranche A Lenders" means those Lenders of Tranche A Loans, as identified on
Schedule 1.01(a) and each other Person that acquires the rights and obligations
of any such Lender pursuant to Section 11.03 (Assignments).
 
"Tranche A Loans" means, collectively, the Tranche A Construction Loans and the
Tranche A Term Loans.
 
"Tranche A Term Loan Commitment" means, with respect to each Tranche A Lender,
the commitment of such Tranche A Lender to make Tranche A Term Loans, as set
forth opposite the name of such Tranche A Lender in Schedule 1.01(a), as the
same may be reduced in accordance with Section 2.08 (Termination or Reduction of
Commitments) and Section 2.09 (Tranche Reallocation).
 
"Tranche A Term Loans" has the meaning provided in Section 2.02(a) (Term Loans).
 
"Tranche B Applicable Margin" means (a) with respect to the Eurodollar Loans,
four and thirty-five hundredths percent (4.35%), and (b) with respect to the
Base Rate Loans, three and thirty-five hundredths percent (3.35%).
 
"Tranche B Construction Loan Commitment" means, with respect to each Tranche B
Lender, the commitment of such Tranche B Lender to make Tranche B Construction
Loans, as set forth opposite the name of such Tranche B Lender in
Schedule 1.01(a), as the same may be reduced or increased in accordance with
Section 2.08 (Termination or Reduction of Commitments) and Section 2.09 (Tranche
Reallocation).
 
Exhibit A - 64

--------------------------------------------------------------------------------

 
"Tranche B Construction Loans" means, collectively, the In-Progress Plant 1
Construction Loans, the In-Progress Plant 2 Tranche B Construction Loans and the
Greenfield Plant 1 Tranche B Construction Loans.
 
"Tranche B Conversion Disbursement" means any funding of Tranche B Loans in
accordance with Section 2.09(c) (Tranche Reallocation).
 
"Tranche B Escrow Disbursement" means the disbursement of the Tranche B
Construction Loans to the Escrow Account following the occurrence of the Closing
Date.
 
"Tranche B Lenders" means those Lenders of Tranche B Loans, as identified on
Schedule 1.01(a) and each other Person that acquires the rights and obligations
of any such Lender pursuant to Section 11.03 (Assignments).
 
"Tranche B Loans" means, collectively, the Tranche B Construction Loans and the
Tranche B Term Loans.
 
"Tranche B Term Loan Commitment" means, with respect to each Tranche B Lender,
the commitment of such Tranche B Lender to make Tranche B Term Loans, as set
forth opposite the name of such Tranche B Lender in Schedule 1.01(a), as the
same may be reduced or increased in accordance with Section 2.08 (Termination or
Reduction of Commitments) Section 2.09 (Tranche Reallocation).
 
"Tranche B Term Loans" has the meaning provided in Section 2.02(b) (Term Loans).
 
"Tranche Commitment Percentage" means, as to any Lender at any time, the
percentage that such Lender's Tranche B Construction Loan Commitment, Tranche B
Term Loan Commitment, Tranche A Construction Loan Commitment or Tranche A Term
Loan Commitment then constitutes of the Aggregate Tranche Commitment for the
applicable Tranche.
 
"Tranche Conversion Date" has the meaning provided in Section 2.09 (Tranche
Reallocation).
 
"Tranche Conversion Notice" means a notice from a Tranche Reallocation Eligible
Lender in substantially the form of Exhibit 2.09.
 
"Tranche Reallocation Eligible Commitments" means the Commitments of the Tranche
Reallocation Eligible Lenders identified on Schedule 2.09, as the same may be
increased or reduced in accordance with Section 2.08 (Termination or Reduction
of Commitments) and Section 2.09 (Tranche Reallocation).
 
Exhibit A - 65

--------------------------------------------------------------------------------

 
"Tranche Reallocation Eligible Lenders" means the Lead Arrangers identified on
Schedule 2.09, or any transferee or assignee of such Lead Arrangers (in their
capacity as Lenders).
 
"Transaction Documents" means, collectively, the Financing Documents and the
Project Documents.
 
"Unfunded Benefit Liabilities" means, with respect to any ERISA Plan at any
time, the amount (if any) by which (i) the present value of all accrued benefits
calculated on an accumulated benefit obligation basis and based upon the
actuarial assumptions used for accounting purposes (i.e., those determined in
accordance with FASB statement No. 35 and used in preparing the ERISA Plan's
financial statements) exceeds (ii) the fair market value of all ERISA Plan
assets allocable to such benefits, determined as of the then most recent
actuarial valuation report for such ERISA Plan.
 
"Uniform Commercial Code" or "UCC" means the Uniform Commercial Code as in
effect from time to time in the State of New York; provided, however, in the
event that, by reason of mandatory provisions of law, any or all of the
perfection or priority of the security interest in any Collateral is governed by
the Uniform Commercial Code as in effect in a jurisdiction other than the State
of New York, the term "UCC" shall mean the Uniform Commercial Code as in effect
in such other jurisdiction for purposes of provisions relating to such
perfection or priority and for purposes of definitions related to such
provisions.
 
"United Capital Loan Facility" means the Construction and Term Loan Agreement,
dated as of April 10, 2006, among Madera, the lenders party thereto from time to
time, TD BankNorth, N.A., as administrative agent, and the other parties
thereto, and all agreements related thereto and all Indebtedness incurred by
Madera thereunder.
 
"United States" or "U.S." means the United States of America, its fifty States
and the District of Columbia.
 
"United States Person" means a "United States person" as defined in
Section 7701(a)(30) of the Code.
 
"Value" means, with respect to any inventory or other goods, the cost thereof to
any Borrower, calculated on a first-in-first-out basis in accordance with GAAP.
 
"Warranty Accounts" means, collectively, the Madera Warranty Account, the
Boardman Warranty Account, the Stockton Warranty Account, the Brawley Warranty
Account, and the Burley Warranty Account.
 
Exhibit A - 66

--------------------------------------------------------------------------------

 
"Warranty Notice" has the meaning set forth in the Sponsor Support Agreement.
 
"Warranty Proceeds" means all amounts required to be paid by Pacific Ethanol
pursuant to Section 3.05(a) (Sponsor's Warranty Funding Obligations) of the
Sponsor Support Agreement.
 
"Warranty Proceeds Request Certificate" means a certificate in substantially the
form of Exhibit 8.16, duly executed by an Authorized Officer of the Borrowers'
Agent and setting forth proposed instructions for the transfer or withdrawal of
Warranty Proceeds from a Warranty Account.
 
"Warranty Work" has the meaning set forth in the Sponsor Support Agreement.
 
"WDG" means wet distillers grains produced by the Borrowers at the Plants.
 
"WestLB" means WestLB AG, New York Branch.
 
"Working Capital Applicable Margin" means (a) with respect to the Eurodollar
Loans (i) prior to the Conversion Date, three and three-quarters percent
(3.75%), and (ii) on and after the Conversion Date, three and one-quarter
percent (3.25%), and (b) with respect to the Base Rate Loans (i) prior to the
Conversion Date, two and three-quarters percent (2.75%), and (ii) on and after
the Conversion Date, two and one-quarter percent (2.25%).
 
"Working Capital Expenses" means, collectively, Project Costs relating to
initial start-up and testing of a Plant, Operation and Maintenance Expenses and
Maintenance Capital Expenses.
 
"Working Capital Funding Notice" means each request for Funding of Working
Capital Loans in the form of Exhibit 2.05-A delivered in accordance with
Section 2.05 (Notice of Fundings).
 
"Working Capital LC Collateral Sub-Account" has the meaning provided in
Section 8.11(a) (Working Capital Reserve Account).
 
"Working Capital Lenders" means those Lenders of Working Capital Loans, as
identified on Schedule 1.01(a), and each other Person that acquires the rights
and obligations of any such Lender pursuant to Section 11.03 (Assignments).
 
"Working Capital Loan" has the meaning provided in Section 2.03 (Working Capital
Loans).
 
Exhibit A - 67

--------------------------------------------------------------------------------

 
"Working Capital Loan Availability" means, on a cumulative basis:
 
(i) 
on or after the Funding of the In-Progress Plant 1 Construction Loans, up to
five million Dollars ($5,000,000);

 
(ii) 
on or after the Funding of the In-Progress Plant 2 Construction Loans, up to
five million Dollars ($5,000,000); and

 
(iii) 
on or after the Commercial Operation Date for each Greenfield Plant (or, prior
to the Conversion Date, if needed for approved start-up costs following the
initial Funding of Construction Loans for such Plant), up to an additional five
million Dollars ($5,000,000) per each Greenfield Plant;

 
provided, that, on and after the initial Commercial Operation Date, the Working
Capital Loan Availability shall at no time exceed the Borrowing Base for the
Project, as certified from time to time by the Borrowers' Agent.
 
"Working Capital Loan Commitment" means, with respect to each Working Capital
Lender, the commitment of such Working Capital Lender to make Working Capital
Loans, as set forth opposite the name of such Working Capital Lender in
Schedule 1.01(a), as the same may be reduced in accordance with Section 2.08
(Termination or Reduction of Commitments).
 
"Working Capital Loan Commitment Percentage" means, as to any Working Capital
Lender at any time, the percentage that such Working Capital Lender's Working
Capital Loan Commitment then constitutes of the Aggregate Working Capital Loan
Commitment.
 
"Working Capital Maturity Date" means (i) the date that occurs twelve (12)
months after the Conversion Date, or (ii) to the extent that some or all of the
Working Capital Lenders decide to extend or renew the Working Capital Loan
Commitment, such date as shall be determined by such Working Capital Lenders. 
 
"Working Capital Notes" means the promissory notes of the Borrower,
substantially in the form of Exhibit 2.07, evidencing Working Capital Loans.
 
Exhibit A - 68

--------------------------------------------------------------------------------

 
"Working Capital Plant Commitment" means, with respect to each Plant, five
million Dollars ($5,000,000).
 
"Working Capital Reserve Account" has the meaning set forth in Section 8.01(i)
(Establishment of Project Accounts).
 
"Working Capital Reserve Required Amount" means, following any termination or
reduction in the Working Capital Loan Commitment in accordance with Section 2.08
(Termination or Reduction of Commitments), an aggregate amount equal to all such
terminations or reductions.
 
"Working Capital Transfer Certificate" means a certificate in substantially the
form of Exhibit 8.11, duly executed by an Authorized Officer of the Borrowers'
Agent.
 
"Work Schedule" means, with respect to each Plant, any "work schedule"
identified in any Construction Contract for such Plant.
 
 
 
 
 
 
Exhibit A - 69

--------------------------------------------------------------------------------

 
EXHIBIT 2.04
 to Credit Agreement
 
[FORM OF]
ISSUANCE REQUEST
 
This issuance request notice (this "Issuance Request"), dated as of [_____],
200[__], is delivered to WESTLB AG, NEW YORK BRANCH, as administrative agent for
the Lenders (the "Administrative Agent") and as the Issuing Bank, pursuant to
Section 2.04 of the Credit Agreement, dated as of February __, 2007 (as amended,
restated, supplemented or otherwise modified from time to time, the "Credit
Agreement"), by and among Pacific Ethanol Holding Co. LLC, a Delaware limited
liability company ("Pacific Holding"), Pacific Ethanol Madera LLC, a Delaware
limited liability company ("Madera"), Pacific Ethanol Columbia, LLC, a Delaware
limited liability company ("Boardman"), Pacific Ethanol Stockton, LLC, a
Delaware limited liability company ("Stockton"), Pacific Ethanol Imperial, LLC,
a Delaware limited liability company ("Brawley") and Pacific Ethanol Magic
Valley, LLC, a Delaware limited liability company ("Burley" and, together with
Pacific Holding, Madera, Boardman, Stockton, and Brawley, the "Borrowers"),
Pacific Holding, as Borrowers' Agent, each of the Lenders from time to time
party thereto, WESTLB AG, NEW YORK BRANCH, as Administrative Agent for the
Lenders, WESTLB AG, NEW YORK BRANCH, as Collateral Agent for the Senior Secured
Parties, UNION BANK OF CALIFORNIA, N.A., as Accounts Bank, WESTLB AG, NEW YORK
BRANCH, as Lead Arranger and Sole Bookrunner, MIZUHO CORPORATE BANK, LTD., as
Lead Arranger and Co-Syndication Agent, CIT CAPITAL SECURITIES LLC, as Lead
Arranger and Co-Syndication Agent, COOPERATIEVE CENTRALE
RAIFFEISEN­BOERENLEENBANK B.A., "RABOBANK NEDERLAND", NEW YORK BRANCH, as Lead
Arranger and Co-Documentation Agent, and BANCO SANTANDER CENTRAL HISPANO S.A,
NEW YORK BRANCH, as Lead Arranger and Co-Documentation Agent. Capitalized terms
used herein but not otherwise defined herein shall have the respective meanings
set forth in the Credit Agreement.
 
WHEREAS, the Borrowers wish to request the issuance of a Letter of Credit under
the Credit Agreement in accordance with Section 2.04 of the Credit Agreement and
on the terms and conditions set forth therein and herein.
 
WHEREAS, to induce the Issuing Bank to provide Letters of Credit under the
Credit Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Borrowers hereby agree as
follows:
 
 
2.04-1

--------------------------------------------------------------------------------

 
Section 1. Credit Issuance Request. (i) The Borrowers hereby irrevocably request
the issuance of a Letter of Credit (the "Proposed Letter of Credit") in the
amount of [____] Dollars ($[____]) for the benefit of [Pacific Holding] [Madera]
[Boardman] [Stockton] [Brawley] [Burley] with respect to the [Madera] [Boardman]
[Stockton] [Brawley] [Burley] Plant and the initial Funding for such Plant has
been made (or will be made simultaneously with the issuance of such Proposed
Letter of Credit).
 
(ii) The Issuance Date proposed for such Proposed Letter of Credit is [______],
200[_] (the "Proposed Letter of Credit Issuance Date"). The Borrowers hereby
certify that this Issuance Request is being delivered to the Administrative
Agent not later than five (5) Business Days prior to the Proposed Letter of
Credit Issuance Date, and that the Proposed Letter of Credit Issuance Date is a
day that is no later than thirty (30) days preceding the Working Capital
Maturity Date.
 
(iii) The term of the Proposed Letter of Credit will expire on [_____], 200[_]
(which date is prior to the Working Capital Maturity Date).
 
(iv) Attached hereto as Annex A is a proposed form for the Proposed Letter of
Credit, which includes the draw conditions for the Proposed Letter of Credit
(which shall be subject to approval of the Issuing Bank pursuant to Section
2.04(i) of the Credit Agreement).
 
Section 2. Certifications. The Borrowers certify that on the date hereof, and as
of the Proposed Letter of Credit Issuance Date:
 
(i) the First Escrow Release Date has occurred or will occur simultaneously with
the issuance of the Proposed Letter of Credit;
 
(ii) each of the conditions to the issuance of the Proposed Letter of Credit set
forth in Article VI of the Credit Agreement has been satisfied (or waived in
accordance with the terms thereof) and the Borrowers are in compliance with each
such condition, before and after giving effect to the issuance of such Proposed
Letter of Credit and to the application of the proceeds therefrom;
 
[(iii) each of the Funding Representations and Warranties made by each of the
Borrowers, Pledgor and Pacific Ethanol in the Financing Documents is true and
correct in all material respects (except with respect to representations and
warranties that expressly refer to an earlier date), before and after giving
effect to the Proposed Letter of Credit;] [To be included prior to the
Conversion Date.]
 
[(iii) each of the representations and warranties made by each of the Borrowers,
Pledgor and Pacific Ethanol in the Financing Documents is true and correct in
all material respects (except with respect to representations and warranties
that expressly
 
 
2.04-2

--------------------------------------------------------------------------------

 
 
refer to an earlier date), before and after giving effect to the Proposed Letter
of Credit;] [To be included after the Conversion Date.]
 
[(iv) no Funding Default or Event of Default has occurred and is continuing or
would occur as a result of the issuance of the Proposed Letter of Credit;] [To
be included prior to the Conversion Date.]
 
[(iv) no Default or Event of Default has occurred and is continuing or would
occur as a result of the issuance of the Proposed Letter of Credit;] [To be
included after the Conversion Date.]
 
(v) since September 30, 2006, no Material Adverse Effect has occurred and is
continuing;
 
(vi) the Proposed Letter of Credit is being requested to satisfy [Pacific
Holding] [Madera] [Boardman] [Stockton] [Brawley] [Burley] obligation to provide
a letter of credit under Section [_____] of the [insert name of Contractual
Obligation or Governmental Approval] relating to the [Madera] [Boardman]
'Stockton] [Brawley] [Burley] Plant;
 
(vii) upon the issuance of the Proposed Letter of Credit, the aggregate Stated
Amounts of all issued and outstanding Letters of Credit shall not exceed the LC
Cap;
 
(viii) upon the issuance of the Proposed Letter of Credit, the aggregate Stated
Amounts of all issued and outstanding Letters of Credit plus the aggregate
outstanding principal amount of all Working Capital Loans shall not exceed the
Aggregate Working Capital Loan Commitment or the current Working Capital Loan
Availability; and
 
(ix) all and each of the statements contained in this Issuance Request are true
and correct.
 
Section 3. Governing Law. This Issuance Request shall be governed by and
construed in accordance with, the laws of the State of New York.
 
Section 4. Execution in Counterparts. This Issuance Request may be executed by
the parties hereto in counterparts (and by different parties hereto in different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single document.
 
The undersigned officers are executing this Issuance Request not in their
individual capacities but in their capacities as Authorized Officers of the
Borrowers.
 
 
2.04-3

--------------------------------------------------------------------------------

 
 
IN WITNESS WHEREOF, the undersigned has caused this Issuance Request to be duly
executed and delivered as of the day and year first written above.
 
 

 
PACIFIC ETHANOL HOLDING CO. LLC,
as Borrower
         
By: _______________________________
 
Name:
 
Title:
             
PACIFIC ETHANOL MADERA LLC,
as Borrower
         
By: _______________________________
 
Name:
 
Title:
         
PACIFIC ETHANOL COLUMBIA, LLC,
as Borrower
         
By: _______________________________
 
Name:
 
Title:
         
PACIFIC ETHANOL STOCKTON, LLC,
as Borrower
         
By: _______________________________
 
Name:
 
Title:

 
 
2.04-4

--------------------------------------------------------------------------------

 
 
 

 
PACIFIC ETHANOL IMPERIAL, LLC,
as Borrower
         
By: _______________________________
 
Name:
 
Title:
             
PACIFIC ETHANOL MAGIC VALLEY, LLC,
as Borrower
         
By: _______________________________
 
Name:
 
Title:
       

 
 
 
 
 
2.04-5

--------------------------------------------------------------------------------

 
Annex A to
Exhibit 2.04
FORM FOR PROPOSED LETTER OF CREDIT
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2.04 - Annex A

--------------------------------------------------------------------------------

 
 
EXHIBIT 2.05-A
to Credit Agreement
 
[FORM OF]
WORKING CAPITAL FUNDING NOTICE
 
This Working Capital funding notice (this "Working Capital Funding Notice"),
dated as of [________], 200[_], is delivered to WESTLB AG, NEW YORK BRANCH, as
administrative agent (the "Administrative Agent"), pursuant to Section 2.05 of
the Credit Agreement, dated as of February __, 2007 (as amended, restated,
supplemented or otherwise modified from time to time, the "Credit  Agreement"),
PACIFIC ETHANOL HOLDING CO. LLC, a Delaware limited liability company, PACIFIC
ETHANOL MADERA LLC, a Delaware limited liability company, PACIFIC ETHANOL
COLUMBIA, LLC, a Delaware limited liability company, PACIFIC ETHANOL STOCKTON,
LLC, a Delaware limited liability company, PACIFIC ETHANOL IMPERIAL, LLC, a
Delaware limited liability company and PACIFIC ETHANOL MAGIC VALLEY, LLC, a
Delaware limited liability company, as Borrowers, PACIFIC ETHANOL HOLDING CO.
LLC, as Borrowers' Agent, each of the Lenders from time to time party hereto,
WESTLB AG, NEW YORK BRANCH, as Administrative Agent for the Lenders, WESTLB AG,
NEW YORK BRANCH, as Collateral Agent for the Senior Secured Parties, UNION BANK
OF CALIFORNIA, N.A. as Accounts Bank, WESTLB AG, NEW YORK BRANCH, as Lead
Arranger and Sole Bookrunner, MIZUHO CORPORATE BANK, LTD., as Lead Arranger and
Co-Syndication Agent, CIT CAPITAL SECURITIES LLC, as Lead Arranger and
Co-Syndication Agent, COOPERATIEVE CENTRALE RAIFFEISEN­BOERENLEENBANK B.A.,
"RABOBANK NEDERLAND", NEW YORK BRANCH, as Lead Arranger and Co-Documentation
Agent, and BANCO SANTANDER CENTRAL HISPANO S.A, NEW YORK BRANCH, as Lead
Arranger and Co-Documentation Agent. This Working Capital Funding Notice sets
forth certain undertakings of the Borrowers with respect to the transactions
contemplated by the Credit Agreement. Capitalized terms used herein but not
otherwise defined herein shall have the respective meanings set forth in the
Credit Agreement.
 
WHEREAS, the Borrowers wish to propose a Working Capital Funding under the
Credit Agreement in accordance with Section 2.05 of the Credit Agreement and on
the terms and conditions set forth therein and herein.
 
WHEREAS, to induce the Lenders to extend credit under the Credit Agreement, and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Borrowers hereby agree as follows:
 
 
2.05-A - 1

--------------------------------------------------------------------------------

 
 
 
Section 1. Funding Request. The Borrowers hereby irrevocably propose a Working
Capital Funding (the "Proposed Working Capital Funding") under each of the Loans
set forth below in the amounts set forth below: [Note: each Working Capital
Funding Notice should only include those provisions applicable to the requested
Funding.]
 
(a) [___] Dollars ($[______]) requested to be funded as [Eurodollar Loans] [and
[____] Dollars ($[____]) requested to be funded as] [Base Rate Loans] for
[Madera] [Boardman] [Stockton] [Brawley] [Burley] Project Costs relating to
initial start-up and testing for such Plant;
 
(b) [____] Dollars ($[_____] requested to be funded as [Eurodollar Loans] [and
[____] Dollars ($[____]) requested to be funded as] [Base Rate Loans] for
[Madera] [Boardman] [Stockton] [Brawley] [Burley] Operation and Maintenance
Expenses;
 
(c) [____] Dollars ($[_____]) requested to be funded as [Eurodollar Loans] [and
[____] Dollars ($[_____]) requested to be funded as] [Base Rate Loans] for
[Madera] [Boardman] [Stockton] [Brawley] [Burley] Maintenance Capital Expenses.
 
The Funding Date proposed for such Proposed Working Capital Funding is [_____],
200[_] (the "Proposed Working Capital Funding Date"). The Borrowers hereby
certify that this Working Capital Funding Notice is being delivered to the
Administrative Agent not later than 12:00 Noon New York City time five (5)
Business Days prior to the Proposed Working Capital Funding Date, and that the
Proposed Working Capital Funding Date is a Business Day.
 
[The duration of the initial Interest Period for the Eurodollar Loans requested
as [part of] the Proposed Working Capital Funding is [_____] ([_____]) months.]
 
The Borrowers hereby request that on the Proposed Working Capital Funding Date
the Administrative Agent deliver by wire transfer, in immediately available
funds, the proceeds of such Proposed Working Capital Funding in the following
amounts, which are subject to the limits set forth in Section 2.03(a) and
Section 2.03(b) of the Credit Agreement, as specified below:
 
(a) [____] Dollars ($[____]) to the [Madera] [Boardman] [Stockton] [Brawley]
[Burley] Construction Account, Account No. [_______________];
 
(b) [____] Dollars ($[____]) to the Operating Account, Account No. [_____]; and
 
 
2.05-A - 2

--------------------------------------------------------------------------------

 
 
 
(c) [_____] Dollars ($[____]) to the Maintenance Capital Expense Account,
Account No. [_____].
 
Section 3. Certifications. The Borrowers certify that as of the Proposed Working
Capital Funding Date:
 
(i) each of the conditions to the Proposed Funding set forth in Article VI of
the Credit Agreement have been satisfied;
 
(ii) the Borrowers are in compliance with all applicable conditions set forth in
Article VI of the Credit Agreement, on and as of the Proposed Working Capital
Funding Date, before and after giving effect to such Proposed Working Capital
Funding and to the application of the proceeds therefrom;
 
(iii) [each of the Funding Representations and Warranties made by each of the
Borrowers, the Pledgor and Pacific Ethanol in the Financing Documents is true
and correct in all material respects (except with respect to representations and
warranties that expressly refer to an earlier date), before and after giving
effect to the Proposed Working Capital Funding and to the application of the
proceeds of such Proposed Working Capital Funding]; [Applicable for Funding
Notices delivered prior to the Conversion Date or Conversation Date Certain.]
 
(iv) [each of the representations and warranties made by each of the Borrowers,
the Pledgor and Pacific Ethanol in the Financing Documents is true and correct
in all material respects (except with respect to representations and warranties
that expressly refer to an earlier date), before and after giving effect to the
Proposed Working Capital Funding and to the application of the proceeds of such
Proposed Working Capital Funding]; [Applicable to Funding Notices delivered
after the Conversion Date or Conversation Date Certain.]
 
(v) the Borrowers have delivered to the Administrative Agent the most recent
Borrowing Base Certificate required to be delivered pursuant to Section 7.03(n)
(Reporting Requirements) on [insert date];
 
(vi) [no Funding Default or Event of Default has occurred and is continuing or
would occur as a result of the Proposed Working Capital Funding]; [Applicable
for Funding Notices delivered prior to the Conversion Date or Conversation Date
Certain.]
 
(vii) [no Default or Event of Default has occurred and is continuing or would
occur as a result of the Proposed Working Capital Funding; [Applicable to
Funding Notices delivered after the Conversion Date or Conversation Date
Certain.]
 
 
2.05-A - 3

--------------------------------------------------------------------------------

 
 
(viii) since September 30, 2006, no Material Adverse Effect has occurred and is
continuing;
 
(ix) the Working Capital Loans requested pursuant to paragraph [( )] above will
be used to pay to Project Costs that are due and owing for start-up costs with
respect to the [Stockton] [Brawley] [Brawley] Plant;
 
(x) the Working Capital Loans requested pursuant to paragraph [( )] above are
equal to amounts due and owing for Operation and Maintenance Expenses in
accordance with the Operating Budget; it being hereby certified that adequate
funds are not available for the payment of such Operation and Maintenance
Expenses in the Operating Account and the amount of such Working Capital Loans,
taken together with all amounts transferred to the Operating Account for the
current calendar month, pursuant to Section 18.08(b)(i)] 18.08(c)(i)] and
Section 8.11(b)(i) of the Credit Agreement (excluding any amounts so transferred
to cover the cost of corn, natural gas, electricity, insurance premiums and
Borrower Taxes), does not exceed the Permitted Operating Budget Deviation
Levels;
 
(xi) the Working Capital Loans requested pursuant to paragraph [( )] above are
equal to amounts due and owing for Maintenance Capital Expenses in accordance
with the Operating Budget; it being hereby certified that adequate funds are not
available for the payment of such Maintenance Capital Expenses in the
Maintenance Capital Expense Account and the amount of such Working Capital
Loans, taken together with all amounts transferred to the Maintenance Capital
Expense Account for the current calendar month pursuant to Section [8.08(b)(ii)]
[8.08(c)(ii)] and Section 8.08(b)(ii) of the Credit Agreement, does not exceed
the Permitted Operating Budget Deviation Levels;
 
(xii) after giving effect to the Working Capital Loans requested hereunder, the
aggregate principal amount of the Working Capital Loans, plus the aggregate
Stated Amounts of all issued and outstanding Letters of Credit, will not exceed
either (A) the Aggregate Working Capital Loan Commitment or (B) the Working
Capital Availability as of the Proposed Working Capital Funding Date; and
 
(xiii) all and each of the statements contained in this Working Capital Funding
Notice are true and correct.
 
Section 4. Governing Law. This Working Capital Funding Notice, and the rights
and obligations of the parties under this Agreement shall be governed by, and
construed and interpreted in accordance with, the laws of the State of New York.
 
Section 5. Execution in Counterparts. This Working Capital Funding Notice may be
executed by the parties hereto in counterparts (and by different parties
 
 
2.05-A - 4

--------------------------------------------------------------------------------

 
 
 
hereto in different counterparts), each of which shall constitute an original,
but all of which when taken together shall constitute a single document.
 
The undersigned are executing this Working Capital Funding Notice not in their
individual capacities but in their respective capacities as Authorized Officers
of the Borrowers.
 
[The remainder of this page is intentionally blank. The next page is the
signature page.]
 
 
 
 
 
 
 
 
 
 
 
2.05-A - 5

--------------------------------------------------------------------------------

 
 
IN WITNESS WHEREOF, the undersigned have caused this Working Capital Funding
Notice to be duly executed and delivered as of the day and year first written
above.
 
 
 

 
PACIFIC ETHANOL HOLDING CO. LLC
         
By: _______________________________
 
Name:
 
Title:
             
PACIFIC ETHANOL MADERA LLC
         
By: _______________________________
 
Name:
 
Title:
         
PACIFIC ETHANOL COLUMBIA, LLC
         
By: _______________________________
 
Name:
 
Title:
         
PACIFIC ETHANOL STOCKTON, LLC
         
By: _______________________________
 
Name:
 
Title:

 
 
2.05-A - 6

--------------------------------------------------------------------------------

 
 
 
 

 
PACIFIC ETHANOL IMPERIAL, LLC
         
By: _______________________________
 
Name:
 
Title:
             
PACIFIC ETHANOL MAGIC VALLEY, LLC
         
By: _______________________________
 
Name:
 
Title:
       

 
 
 
 
 
 
 
 
 
 
 
 
 
2.05-A - 7

--------------------------------------------------------------------------------

 
EXHIBIT 2.05-B
to Credit Agreement
 
[FORM OF]
CONSTRUCTION FUNDING NOTICE
 
This construction funding notice (this "Construction Funding Notice"), dated as
of [______], 200[_], is delivered to WESTLB AG, NEW YORK BRANCH, as
administrative agent (the "Administrative Agent"), pursuant to Section 2.05 of
the Credit Agreement, dated as of February __, 2007 (as amended, restated,
supplemented or otherwise modified from time to time, the "Credit Agreement"),
PACIFIC ETHANOL HOLDING CO. LLC, a Delaware limited liability company, PACIFIC
ETHANOL MADERA LLC, a Delaware limited liability company, PACIFIC ETHANOL
COLUMBIA, LLC, a Delaware limited liability company, PACIFIC ETHANOL STOCKTON,
LLC, a Delaware limited liability company, PACIFIC ETHANOL IMPERIAL, LLC, a
Delaware limited liability company and PACIFIC ETHANOL MAGIC VALLEY, LLC, a
Delaware limited liability company, as Borrowers, PACIFIC ETHANOL HOLDING CO.
LLC, as Borrowers' Agent, each of the Lenders from time to time party thereto,
WESTLB AG, NEW YORK BRANCH, as Administrative Agent for the Lenders, WESTLB AG,
NEW YORK BRANCH, as Collateral Agent for the Senior Secured Parties, UNION BANK
OF CALIFORNIA, N.A., as Accounts Bank, WESTLB AG, NEW YORK BRANCH, as Lead
Arranger and Sole Bookrunner, MIZUHO CORPORATE BANK, LTD., as Lead Arranger and
Co-Syndication Agent, CIT CAPITAL SECURITIES LLC, as Lead Arranger and
Co-Syndication Agent, COOPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK B.A.,
"RABOBANK NEDERLAND", NEW YORK BRANCH, as Lead Arranger and Co-Documentation
Agent, and BANCO SANTANDER CENTRAL HISPANO S.A, NEW YORK BRANCH, as Lead
Arranger and Co-Documentation Agent. This Construction Funding Notice sets forth
certain undertakings of the Borrowers with respect to the transactions
contemplated by the Credit Agreement. Capitalized terms used herein but not
otherwise defined herein shall have the respective meanings set forth in the
Credit Agreement.
 
WHEREAS, the Borrowers wish to propose a Construction Funding under the Credit
Agreement in accordance with Section 2.05 of the Credit Agreement and on the
terms and conditions set forth therein and herein;
 
[WHEREAS the [Stockton] [Brawley] [Burley] Plant is [Greenfield Plant I]
[Greenfield Plant 2] [Greenfield Plant 3];] [To be included when applicable]
 
 
2.05-B - 1

--------------------------------------------------------------------------------

 
 
 
[WHEREAS the [Madera] [Boardman] Plant is [In Progress Plant 1] [In Progress
Plant 2];] [To be included when applicable] and
 
WHEREAS, to induce the Lenders to extend credit under the Credit Agreement, and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Borrowers hereby agree as follows:
 
Section 1. Funding Request. [Note: each Construction Funding Notice should only
include those provisions applicable to the requested Funding.]
 
The Borrowers hereby irrevocably propose a Construction Funding (the "Proposed
Construction Funding") under each of the Loans set forth below in the amounts
set forth below:
 
(a) [____] Dollars ($([____]), requested to be funded as [Eurodollar Loans] [and
[____] Dollars ($[____]) requested to be funded as] [Base Rate Loans] under the
In-Progress Plant 1 Construction Loans;
 
(b) [____] Dollars ($[____]), requested to be funded as [Eurodollar Loans] [and
[____] Dollars ($[____]) requested to be funded as] [Base Rate Loans] under the
In-Progress Plant 2 Construction Loans;
 
(c) [____] Dollars ($[____]), requested to be funded as [Eurodollar Loans] [and
[____] Dollars ($[____]) requested to be funded as] [Base Rate Loans] under the
Greenfield Plant 1 Construction Loans [for Stockton Project Costs] [for a
Sponsor Support Reimbursement Funding] [for a Greenfield Top-up Funding, which
amount is less than or equal to the Excess Construction Loan Commitment for the
Stockton Plant] [on the Conversion Date for application in accordance with
Section 2.06(e) of the Credit Agreement];
 
(d) [____] Dollars ($[____]), requested to be funded as [Eurodollar Loans] [and
[____] Dollars ($[____]) requested to be funded as] [Base Rate Loans] under the
Greenfield Plant 2 Construction Loans [for Brawley Project Costs] [for a Sponsor
Support Reimbursement Funding] [for a Greenfield Top-up Funding, which amount is
less than or equal to the Excess Construction Loan Commitment for the Brawley
Plant] [on the Conversion Date for application in accordance with Section
2.06(e) of the Credit Agreement]; and
 
(e) [____] Dollars ($[____]), requested to be funded as [Eurodollar Loans] [and
[____] Dollars ($[____]) requested to be funded as] [Base Rate Loans] under the
Greenfield Plant 3 Construction Loans [for Burley Project Costs] [for a Sponsor
Support Reimbursement Funding] [for a Greenfield Top-up Funding, which amount
less than or is equal to the Excess Construction Loan Commitment for the Brawley
Plant] [on the Conversion Date for application in accordance with Section
2.06(e) of the Credit Agreement].
 
 
2.05-B - 2

--------------------------------------------------------------------------------

 
 
 
 
The funding date proposed for such Proposed Construction Funding is [____],
200[_] [(the "Proposed Construction Funding Date"). The Borrowers hereby certify
that this Construction Funding Notice is being delivered to the Administrative
Agent not later than 12:00 Noon New York City time five (5) Business Days prior
to the Proposed Construction Funding Date, and that the Proposed Construction
Funding Date is a Business Day.
 
[The duration of the initial Interest Period for the Eurodollar Loans requested
as [part of] the Proposed Construction Funding is [____] ([__]) months.]
 
The Borrowers hereby request that on the Proposed Construction Funding Date the
Administrative Agent deliver by wire transfer, in immediately available funds,
the proceeds of such Proposed Construction Funding in the following amounts as
specified below:
 
[The Proposed Construction Funding Date is a date other than the Conversion
Date, and the proceeds of the Proposed Construction Funding are requested to be
disbursed in the manner set forth below:
 
(a) [____]Dollars ($[____]) to the Stockton Construction Account, Account No
[____];
 
(b) [____]Dollars ($[____]) to the Brawley Construction Account, Account No
[____];
 
(c) [____]Dollars ($[____]) to the Burley Construction Account, Account No
[____];
 
(d) [____]Dollars ($[____]) to the Construction Holding Account, Account No
[____];
 
(e) [____]Dollars ($[____]) to the Administrative Agent, for the account of the
Lenders, for the payment of interest and Fees due and owing on the Loans;
 
(f) [____] Dollars ($[____]) to Pacific Ethanol as a Sponsor Support
Reimbursement Funding to pay amounts due and payable to Pacific Ethanol pursuant
to Section 2.04(g) of the Sponsor Support Agreement;
 
(g) [____] Dollars ($[____]) to the Debt Service Reserve Account for funding of
the Debt Service Reserve Requirement.]
 
[The Proposed Construction Funding Date is the Conversion Date, and the proceeds
of the Proposed Construction Funding are requested to be disbursed in the manner
set forth in Section 2 (Use of Proceeds) below.]
 
Section 2. Use of Proceeds. [The Proposed Construction Funding Date is a date
other than the Conversion Date and the Borrowers shall use the proceeds of the
Proposed Construction Funding as set forth below:
 
 
2.05-B - 3

--------------------------------------------------------------------------------

 
 
(a) [____] Dollars ($[____]), for the payment of Stockton Project Costs payable
under invoices attached hereto as Exhibit A1;
 
(b) [____] Dollars ($[____]), for the payment of Brawley Project Costs payable
under invoices attached hereto as Exhibit A1;
 
(a) [____] Dollars ($[____]), for the payment of Burley Project Costs payable
under invoices attached hereto as Exhibit A1;
 
(d) [____] Dollars ($[____]), for the payment of Fees due and owing on the
Loans;
 
(e) [____] Dollars ($[____]), for the payment of interest due and owing on the
Loans;
 
(f) [____] Dollars ($[____]), to the Construction Holding Account;
 
(g) [____] Dollars ($[____]), to Pacific Ethanol as a Sponsor Support Funding
for payment in accordance with the Sponsor Support Agreement;
 
(h) [____] Dollars ($[____]), to the Debt Service Reserve Account for funding of
the Debt Service Reserve Requirement; and
 
(i) [____] Dollars ($[____]), for the payment of the additional Project Costs
set forth below in the amounts set forth below:
 
[insert description of Project Costs (other than interest and Fees on the Loans)
that are not included in the attached invoices and that will be paid with
proceeds of the Proposed Construction Funding.]
 
[The Proposed Construction Fundings are requested to be made on the Conversion
Date and shall be applied (together with any amount on deposit it or standing to
the credit of the Construction Accounts on the Conversion Date) in the manner
set forth below:
 
first, [____] Dollars ($[____]) for deposit into the Debt Service Reserve
Account, which amount, when taken together with all other amounts then on
deposit in or credited to the Debt Service Reserve Account, equals fifty percent
(50%) of the Debt Service Reserve Requirement as of the Conversion Date;
 
_______________
1 To be included if invoices are requested by the Independent Engineer.
 
 
2.05-B - 4

--------------------------------------------------------------------------------

 
 
second, (i) [____] Dollars ($[____]) to ] for the payment of remaining Stockton
Project Costs, (ii) [____] Dollars ($[____]) to [____] for the payment of
remaining Brawley Project Costs and (iii) [____] Dollars ($[____]) to [____] for
the payment of remaining Burley Project Costs;
 
third, [____] Dollars ($[____]) to Pacific Ethanol, which amount is equal to all
Sponsor Support Reimbursement Fundings requested to be made on the Conversion
Date;
 
fourth, [____] Dollars ($[____]) to Pacific Ethanol, which amount is equal to
the aggregate amount of (A) all Greenfield Plant Top-Up Fundings that have not
been utilized to fund Required Equity Contributions or Project Costs plus (B)
all undisbursed Excess Construction Loan Commitments; and
 
fifth, [____] Dollars ($[____]), to the Revenue Account.
 
Section 3. Certifications. The Borrowers certify that on the date hereof, and as
of the Proposed Construction Funding Date: [Note: each Construction Funding
Notice should only include those provisions applicable to the requested
Funding.]
 
(a) the aggregate principal amount of Greenfield Plant 1 Construction Loans
disbursed prior to the Commercial Operation Date of Greenfield Plant 1 (taken
together with the Working Capital Plant Commitment for Greenfield Plant 1),
after giving effect to any Greenfield Plant 1 Fundings requested hereunder, does
not exceed the lesser of (x) forty percent (40%) of budgeted Project Costs for
Greenfield Plant 1 (as set forth in the current Construction Budget for such
Plant) and (y) forty-five million Dollars ($45,000,000);
 
(b) the aggregate principal amount of all Greenfield Plant 1 Construction Loans
disbursed on or prior to the Conversion Date (taken together with the Working
Capital Plant Commitment for such Plant), after giving effect to any Greenfield
Plant 1 Fundings requested hereunder, does not exceed sixty-five percent (65%)
of the aggregate actual and documented Project Costs for Greenfield Plant 1;
 
(c) the Proposed Construction Funding is the Greenfield Plant Top-Up Funding for
Greenfield Plant 1 (and Greenfield Plant 1 has achieved its Commercial Operation
Date), the amount of such Proposed Construction Funding is less than or equal to
the Excess Construction Loan Commitment for such Plant, and no Top-Up Funding
has previously been requested for such Plant;
 
(d) the aggregate principal amount of Greenfield Plant 2 Construction Loans
disbursed prior to the Commercial Operation Date of such Plant (taken together
with the Working Capital Plant Commitment for such Plant), after giving effect
to any
 
 
2.05-B - 5

--------------------------------------------------------------------------------

 
 
 
Greenfield Plant 2 Fundings requested hereunder, does not exceed the lesser of
(x) forty percent (40%) of budgeted Project Costs for Greenfield Plant 2 (as set
forth in the current Construction Budget for such Plant and (y) forty-five
million Dollars ($45,000,000);
 
(e) the aggregate principal amount of all Greenfield Plant 2 Construction Loans
disbursed on or prior to the Conversion Date (taken together with the Working
Capital Plant Commitment for such Plant), after giving effect to any Greenfield
Plant 2 Fundings requested hereunder, does not exceed sixty-five percent (65%)
of the aggregate actual and documented Project Costs for Greenfield Plant 2;
 
(f) the Proposed Construction Funding is the Greenfield Plant Top-Up Funding for
Greenfield Plant 2 (and Greenfield Plant 2 has achieved its Commercial Operation
Date), the amount of such Proposed Construction Funding is less than or equal to
the Excess Construction Loan Commitment for such Plant, and no Top-Up Funding
has previously been requested for such Plant;
 
(g) the aggregate principal amount of Greenfield Plant 3 Construction Loans
disbursed prior to the Commercial Operation Date of such Plant (taken together
with the Working Capital Plant Commitment for such Plant), after giving effect
to any Greenfield Plant 3 Fundings requested hereunder, does not exceed the
lesser of (x) forty percent (40%) of budgeted Project Costs for Greenfield Plant
3 (as set forth in the current Construction Budget for such Plant) and (y)
forty-five million Dollars ($45,000,000);
 
(h) the aggregate principal amount of all Greenfield Plant 3 Construction Loans
disbursed on or prior to the Conversion Date (taken together with the Working
Capital Plant Commitment for such Plant), after giving effect to any Greenfield
Plant 3 Fundings requested hereunder, does not exceed sixty-five percent (65%)
of the aggregate actual and documented Project Costs for Greenfield Plant 3;
 
(i) the Proposed Construction Funding is the Greenfield Plant Top-Up Funding for
Greenfield Plant 3 (and Greenfield Plant 3 has achieved its Commercial Operation
Date), the amount of such Proposed Construction Funding is less than or equal to
the Excess Construction Loan Commitment for such Plant, and no Top-Up Funding
has previously been requested for such Plant;
 
(j) assuming that the Agents and Lead Arrangers are satisfied with or have
approved each of the matters, documents and other deliverables that, in
accordance with Article VI of the Credit Agreement are required to be
satisfactory to such Agent or Lead Arranger, each of the conditions to the
Proposed Construction Funding set forth in Article VI of the Credit Agreement
have been satisfied (other than on the date of this notice those conditions that
may be satisfied on the Proposed Construction Funding Date, which the Borrowers
hereby confirm will be satisfied prior to the Proposed Construction
 
 
2.05-B - 6

--------------------------------------------------------------------------------

 
 
 
Funding [; provided, that [(i) the deliverables required to satisfy the
conditions set forth in Sections [insert relevant section references] of the
Credit Agreement are being delivered to the Administrative Agent on the date
hereof to hold in escrow pending automatic release and delivery on the Funding
Date for the Proposed Construction Funding and (ii) in the case of the approval
of the Independent Engineer's updated report required pursuant to Section
6.04(i)(i) of the Credit Agreement, such updated report has been delivered to
the Lenders at least ten (10) days prior to the date hereof and, as of the date
hereof, the Borrowers have not received objections to such report from fifty
percent (50%) or more of the Lenders];
 
(k) the Borrowers are in compliance with all applicable conditions set forth in
Article VI of the Credit Agreement that are required to be satisfied as of the
date of this representation, on and as of the Proposed Construction Funding
Date, before and after giving effect to such Proposed Construction Funding and
to the application of the proceeds therefrom;
 
(l) each of the Funding Representations and Warranties made by each of the
Borrowers, the Pledgor and Pacific Ethanol in each of the Financing Documents to
which it is a party is true and correct in all material respects (except with
respect to representations and warranties that expressly refer to an earlier
date), before and after giving effect to the Proposed Construction Funding and
to the application of the proceeds of such Proposed Construction Funding;
 
(m) [after giving effect to any Construction Loan Fundings requested to be made
on the Conversion Date and any payments under Section 2.06(e)(iii) of the Credit
Agreement, the total aggregate amounts disbursed under the Construction Loans
taken together with the Aggregate Working Capital Loan Commitment do not exceed
sixty-five percent (65%) of the aggregate actual and documented Project Costs
for all Greenfield Plants that have achieved their respective Commercial
Operation Dates and with respect to which any funding has been made;]2
 
(n) no Funding Default or Event of Default has occurred and is continuing or
would occur as a result of the Construction Funding;
 
_____________
2 To be included only for Fundings requested on the Conversion Date.
 
 
2.05-B - 7

--------------------------------------------------------------------------------

 
 
(o) since September 30, 2006, no Material Adverse Effect has occurred and is
continuing;
 
(p) [the amounts of all previous Construction Fundings for the [____] Plant have
been (or will be) applied to approved Project Costs for such Plant in a manner
consistent with the relevant Construction Funding Notice(s);]3
 
(q) [each of the Madera Funding and the Boardman Funding has occurred];4
 
(r) all and each of the statements contained in this Construction Funding Notice
are true and correct.
 
Section 4. Delivery of Additional Documents.5 On the date hereof, together with
this Construction Funding Notice, the Borrowers are delivering to the
Administrative Agent the following documents as additional conditions precedent
to the Proposed Construction Funding:
 
(a) [attached hereto as Exhibit A, invoices requested by the Independent
Engineer for all Project Costs (other than interest and Fees on the Loans)
requested by the Independent Engineer and that are proposed to be paid with
proceeds of the Proposed Construction Funding, each of which has been certified
as true and correct in all material respects by the Borrowers' Agent and the
relevant Construction Contractor;] [To be included if requested by the
Independent Engineer.]
 
(b) attached hereto as Exhibit B, conditional sworn Lien waiver statements
evidencing receipt of payment by the Construction Contractors, all
subcontractors, and all other Persons [who were paid from the proceeds of the
last preceding Construction Loan Funding] [with respect to all payments due and
payable by
 
 
_______
3 To be included only for Greenfield Plant Fundings prior to the Commercial
Operation Date for each Plant.
 
4 To be included with respect to each Greenfield Plant Funding.
 
5 These documents are required to be delivered only in connection with
Construction Fundings (other than for Sponsor Support Reimbursement Fundings)
for Greenfield Plants prior to their Commercial Operation Date.
 
 
2.05-B - 8

--------------------------------------------------------------------------------

 
 
 
 
the Borrowers since the date of the Credit Agreement to any Person to be paid
with the proceeds of the Proposed Construction Funding], [(excluding Lien waiver
statements for amounts less than one million Dollars ($1,000,000) on an
aggregate basis)] in each such case for the Plant with respect to which such
Proposed Construction Funding is being requested. Each such Lien waiver
statement (i) is dated on or about the date of this Construction Funding Notice
(or, in the case of Lien Waivers relating to work done at an earlier date, may
be dated on or about the date that such work was completed), and (ii) covers all
work done and all sums received by such contractor through the date [of the last
preceding Construction Loan Funding for such Plant] [the Credit Agreement], each
of which is hereby certified as true and correct and complete by the Borrowers'
Agent and has been verified by the Independent Engineer;
 
(c) attached hereto as Exhibit C, a list, for each Plant with respect to which
such Proposed Construction Funding is being requested, of (i) all Change Orders
that have not previously been submitted to the Administrative Agent, copies of
which have been submitted to the Independent Engineer prior to the date of this
Construction Funding Notice, (ii) all Change Orders to the date of this
Construction Funding Notice, and (iii) all contemplated Change Orders, each of
which is (other than contemplated Change Orders that have not yet been agreed to
by the relevant Borrower) in compliance with Section 7.02(m)(iii) of the Credit
Agreement;
 
(d) [attached hereto as Exhibit D, for each Plant with respect to which such
Proposed Construction Funding is being requested, a detailed receipt for payment
itemized by Line Item in such Plant's Construction Budget evidencing [that the
full amount of the proceeds of the last preceding Construction Funding has been
paid out by the Borrowers or the Construction Contractors to the Persons with
respect to whom such Construction Loan proceeds were disbursed and otherwise in
accordance with the Credit Agreement] [receipt of all payments due and payable
by the Borrowers to the Construction Contractors, all subcontractors, and all
other Persons since the date of the Credit Agreement] .]6
 
Section 5.Governing Law. This Construction Funding Notice shall be governed by,
and construed in accordance with, the laws of the State of New York, United
States of America.
 
______
6 To be included if such evidence has been requested by the Administrative Agent
or the Independent Engineer.
 
 
2.05-B - 9

--------------------------------------------------------------------------------

 
 
Section 6.Execution in Counterparts. This Construction Funding Notice may be
executed by the parties hereto in counterparts (and by different parties hereto
in different counterparts), each of which shall constitute an original, but all
of which when taken together shall constitute a single document.
 
The undersigned are executing this Construction Funding Notice not in their
individual capacities but in their respective capacities as Authorized Officers
of the Borrowers.
 
[The remainder of this page is intentionally blank. The next page is the
signature page.]
 
 
 
 
 
 
 
 
 
 
 
2.05-B - 10

--------------------------------------------------------------------------------

 
 
 
IN WITNESS WHEREOF, the undersigned have caused this Construction Funding Notice
to be duly executed and delivered as of the day and year first written above.
 
 
 

 
PACIFIC ETHANOL HOLDING CO. LLC
         
By: _______________________________
 
Name:
 
Title:
             
PACIFIC ETHANOL MADERA LLC
         
By: _______________________________
 
Name:
 
Title:
         
PACIFIC ETHANOL COLUMBIA, LLC
         
By: _______________________________
 
Name:
 
Title:
         
PACIFIC ETHANOL STOCKTON, LLC
         
By: _______________________________
 
Name:
 
Title:

 
 
2.05-B - 11

--------------------------------------------------------------------------------

 
 
 
 

 
PACIFIC ETHANOL IMPERIAL, LLC
         
By: _______________________________
 
Name:
 
Title:
             
PACIFIC ETHANOL MAGIC VALLEY, LLC
         
By: _______________________________
 
Name:
 
Title:
       

 
 
 
 
 
 
 
 
 
 
 
2.05-B - 12

--------------------------------------------------------------------------------

 
 
Exhibit A
to Construction Funding Notice
 
INVOICES FOR ADDITIONAL PAYMENTS
[If requested]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2.05-B - Exhibit

--------------------------------------------------------------------------------

 
Exhibit B
to Construction Funding Notice
 
LIEN WAIVER STATEMENTS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2.05-B - Exhibit

--------------------------------------------------------------------------------

 
 
Exhibit C
to Construction Funding Notice
 
CHANGE ORDERS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2.05-B - Exhibit

--------------------------------------------------------------------------------

 
Exhibit D
to Construction Funding Notice
 
RECEIPTS OF PAYMENT
 
 
[If requested]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2.05-B - Exhibit

--------------------------------------------------------------------------------

 
 
EXHIBIT 2.07
to Credit Agreement
 
[FORM OF NOTE]
 
[Tranche A Construction] [Tranche B Construction] [Working Capital]
[Tranche A Term] [Tranche B Term] Note
 
$[____]
 
[________]
[____]. [__]

 
 
FOR VALUE RECEIVED, PACIFIC ETHANOL HOLDING CO. LLC, PACIFIC ETHANOL MADERA LLC,
PACIFIC ETHANOL COLUMBIA, LLC, PACIFIC ETHANOL STOCKTON, LLC, PACIFIC ETHANOL
IMPERIAL, LLC, AND PACIFIC ETHANOL MAGIC VALLEY, LLC (collectively, the
"Borrowers"), HEREBY JOINTLY AND SEVERALLY PROMISE TO PAY to the order of
[________], a [________] (the "Lender"), at its offices located at [________],
the principal sum of [____] Dollars ($[____]) or, if less, the aggregate unpaid
principal amount of the [Tranche A Construction] [Tranche B Construction]
[Working Capital] [Tranche A Term] [Tranche B Term] Loans made by the Lender to
the Borrowers under the Credit Agreement, dated as of February __, 2007 (as
amended, restated, supplemented or otherwise modified from time to time, the
"Credit Agreement") among the Borrowers, jointly and severally, Pacific Holding,
as Borrowers' Agent, each of the Lenders from time to time party thereto, WESTLB
AG, NEW YORK BRANCH, as Administrative Agent for the Lenders, WESTLB AG, NEW
YORK BRANCH, as Collateral Agent for the Senior Secured Parties, UNION BANK OF
CALIFORNIA, N.A., as Accounts Bank, WESTLB AG, NEW YORK BRANCH, as Lead Arranger
and Sole Bookrunner, MIZUHO CORPORATE BANK, LTD., as Lead Arranger and
Co-Syndication Agent, CIT CAPITAL SECURITIES LLC, as Lead Arranger and
Co-Syndication Agent, COOPERATIEVE CENTRALE RAIFFEISEN­BOERENLEENBANK B.A.,
"RABOBANK NEDERLAND", NEW YORK BRANCH, as Lead Arranger and Co-Documentation
Agent, and BANCO SANTANDER CENTRAL HISPANO S.A, NEW YORK BRANCH, as Lead
Arranger and Co-Documentation Agent. Capitalized terms used herein but not
otherwise defined herein shall have the respective meanings set forth in the
Credit Agreement.
 
The Borrowers also jointly and severally promise to pay (i) interest on the
unpaid principal amount hereof from the date hereof until paid in full at the
rates and at the times provided in the Credit Agreement and (ii) fees at such
times and at such rates and amounts as specified in the Credit Agreement.
 
 
 
2.07 - 1

--------------------------------------------------------------------------------

 
 
 
Principal, interest and fees are payable in lawful money of the United States of
America and in immediately available funds, at the times and in the amounts
provided in the Credit Agreement.
 
This [Tranche A Construction] ]Tranche B Construction] [Working Capital]
[Tranche A Term] [Tranche B Term] Note is entitled to the benefits and is
subject to the terms and conditions of the Credit Agreement, and is entitled to
the benefits of the security provided under the Security Documents. As provided
in the Credit Agreement, this [Tranche A Construction] [Tranche B Construction]
[Working
 
Capital] [Tranche A Term] [Tranche B Term] Note is subject to mandatory
prepayment and voluntary prepayment, in whole or in part. The Borrowers jointly
and severally agree to make prepayment of principal on the dates and in the
amounts specified in the Credit Agreement.
 
The Credit Agreement, among other things, contains provisions for acceleration
of the maturity hereof upon the happening of certain stated events.
 
The Lender is hereby authorized, at its option, either (i) to endorse on the
schedule attached hereto (or on a continuation of such schedule attached to this
[Tranche A Construction] [Tranche B Construction] [Working Capital] [Tranche A
Term] [Tranche B Term] Note and made a part hereof) an appropriate notation
evidencing the date and amount of the [Tranche A Construction] [Tranche B
Construction] [Working Capital] [Tranche A Term] [Tranche B Term] Loans
evidenced hereby and the date and amount of each principal payment in respect
thereof, or (ii) to record such [Tranche A Construction] [Tranche B
Construction] [Working Capital] [Tranche A Term] [Tranche B Term] Loans and such
payments in its books and records. Such schedule or such books and records, as
the case may be, shall constitute prima facie evidence of the accuracy of the
information contained therein, but in no event shall any failure by the Lender
to endorse or record pursuant to clauses (i) and (ii) be deemed to relieve any
Borrower from any of its obligations.
 
To the extent provided under the Credit Agreement and to the maximum extent
permitted by Law, each Borrower hereby waives presentment, demand, protest or
notice of any kind in connection with this [Tranche A Construction] [Tranche B
Construction] [Working Capital] [Tranche A Term] [Tranche B Term] Note. All
amounts payable under this [Tranche A Construction] [Tranche B Construction]
[Working Capital] [Tranche A Term] [Tranche B Term] Note are payable without
relief from valuation and appraisement Laws.
 
The Borrowers jointly and severally agree to pay all costs and expenses,
including without limitation attorneys' fees, incurred in connection with the
interpretation or enforcement of this [Tranche A Construction] [Tranche B
Construction] [Working
 
 
2.07 - 2

--------------------------------------------------------------------------------

 
 
Capital] [Tranche A Term] [Tranche B Term] Note, in accordance with and to the
extent provided by the Credit Agreement.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2.07 - 3

--------------------------------------------------------------------------------

 
 
 
THIS [TRANCHE A CONSTRUCTION] [TRANCHE B CONSTRUCTION] [WORKING CAPITAL]
[TRANCHE A TERM] [TRANCHE B TERM] NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, UNITED STATES OF AMERICA,
WITHOUT REFERENCE TO CONFLICTS OF LAWS (OTHER THAN SECTION 5-1401 OF THE NEW
YORK GENERAL OBLIGATIONS LAW).
 
 
PACIFIC ETHANOL HOLDING CO. LLC,
a Delaware limited liability company
 
By: ___________________________
Name:
Title:
 
 
PACIFIC ETHANOL MADERA LLC,
a Delaware limited liability company
 
By: ___________________________
Name:
Title:
 
 
 
PACIFIC ETHANOL COLUMBIA, LLC,
a Delaware limited liability company
 
By: ___________________________
Name:
Title:
 
 
 
 
2.07 - 4

--------------------------------------------------------------------------------

 
 
PACIFIC ETHANOL STOCKTON, LLC,
a Delaware limited liability company
 
By: ___________________________
Name:
Title:
 
 
PACIFIC ETHANOL IMPERIAL, LLC,
a Delaware limited liability company
 
By: ___________________________
Name:
Title:
 
 
PACIFIC ETHANOL MAGIC VALLEY, LLC,
a Delaware limited liability company
 
By: ___________________________
Name:
Title:
 
 
 
2.07 - 5

--------------------------------------------------------------------------------

 
 
Schedule to
[Tranche A Construction] [Tranche B Construction] [Working Capital] [Tranche A
Term] [Tranche B Term] Note
 
 
LOANS, MATURITIES AND PAYMENTS OF PRINCIPAL
 
Date
Amount of Loan
Maturity of Loan
Amount of Principal
Paid or Prepaid
Unpaid Principal
Balance
Notation Made By
           

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2.07 - 6

--------------------------------------------------------------------------------

 
EXHIBIT 2.09-B
to Credit Agreement
 
[FORM OF]
TRANCHE CONVERSION NOTICE
 
Date: [____ __, ____]
 
[ADMINISTRATIVE AGENT]
[ADDRESS]
 
[BORROWERS' AGENT]
[ADDRESS]
 
This notice (this "Tranche Conversion Notice") is being delivered by [_____], a
lender (a "Tranche Reallocation Eligible Lender") pursuant to Section 2.09 of
the Credit Agreement (as amended, modified or otherwise supplemented from time
to time in accordance with its terms, the "Credit Agreement"), dated as of
February [_], 2007, by and among PACIFIC ETHANOL HOLDING CO. LLC, a Delaware
limited liability company, PACIFIC ETHANOL MADERA LLC, a Delaware limited
liability company, PACIFIC ETHANOL COLUMBIA, LLC, a Delaware limited liability
company, PACIFIC ETHANOL STOCKTON, LLC, a Delaware limited liability company,
PACIFIC ETHANOL IMPERIAL, LLC, a Delaware limited liability company and PACIFIC
ETHANOL MAGIC VALLEY, LLC, a Delaware limited liability company, as Borrowers,
PACIFIC ETHANOL HOLDING CO. LLC, as Borrowers' Agent, each of the Lenders from
time to time party thereto, WESTLB AG, NEW YORK BRANCH, as Administrative Agent
for the Lenders, WESTLB AG, NEW YORK BRANCH, as Collateral Agent for the Senior
Secured Parties, UNION BANK OF CALIFORNIA, N.A., as Accounts Bank, WESTLB AG,
NEW YORK BRANCH, as Lead Arranger and Sole Bookrunner, MIZUHO CORPORATE BANK,
LTD., as Lead Arranger and Co-Syndication Agent, CIT CAPITAL SECURITIES LLC, as
Lead Arranger and Co-Syndication Agent, C(EPERATIEVE CENTRALE
RAIFFEISEN­BOERENLEENBANK B.A., "RABOBANK NEDERLAND", NEW YORK BRANCH, as Lead
Arranger and Co-Documentation Agent, and BANCO SANTANDER CENTRAL HISPANO S.A,
NEW YORK BRANCH, as Lead Arranger and Co-Documentation Agent. Capitalized terms
used herein but not otherwise defined herein shall have the respective meanings
set forth in the Credit Agreement.
 
 
 
2.09 - 1

--------------------------------------------------------------------------------

 
 
 
As of the date of this Tranche Conversion Notice (the "Tranche Conversion Notice
Date"), the undersigned hereby provides notice that1:
 
1. it is exercising its right to convert the amount of its Tranche Reallocation
Eligible Commitments set forth in Annex A hereto;
 
2. such conversion shall become effective on [insert date that is five (5)
Business Days from the Tranche Conversion Notice Date] [the Funding Date for
In-Progress Plant 2, which, as set forth in the most recent Funding Notice, is
expected to be [____], which date is less than five (5) Business Days after the
date hereof,] (the "Tranche Conversion Date");
 
3. the Tranche Reallocation Eligible Lender will fund such converted Tranche B
Loans to the Escrow Account as required pursuant to Section 2.09(c) of the
Credit Agreement and in accordance with the funding procedures set forth in
Section 2.06 (Funding of Loans) of the Credit Agreement; and
 
4. [the Tranche Reallocation Eligible Lender has previously received a Note with
respect to its Tranche Reallocation Eligible Commitment and hereby requests
that, on the Tranche Conversion Date, a replacement Note be issued reflecting
the conversion to be made hereunder.]
 
[The remainder of this page is intentionally blank. The next page is the
signature page.]
 
 
 
_______
1 The conversions contemplated by this Tranche Conversion Notice may take place
no later than the earlier to occur of (x) the date that is six (6) months from
the date of the Credit Agreement and (y) the Business Day immediately following
the date of the Funding Notice for In-Progress Plant 2.
 
 
 
2.09 - 2

--------------------------------------------------------------------------------

 
Annex A
to Tranche Conversion Notice
 
Tranche Reallocation Eligible Commitments
 
Loan
Undisbursed
Tranche A
Commitments
Undisbursed
Tranche B
Commitments
Pre- Conversion
$
$
Post- Conversion
$
$

 
 
 
 
 
 
 
 
 
 
 
2.09 - 3

--------------------------------------------------------------------------------

 
 
EXHIBIT 3.05
to Credit Agreement
 
[FORM OF]
INTEREST PERIOD NOTICE
 
WestLB AG, New York Branch,
as Administrative Agent for the Lenders
1211 Avenue of the Americas
NY, New York 10036
Attention: Yolette Salnave / Andrea Bailey
Facsimile: 212-302-7946
Email: ny_agency services@westlb.com
 
Re:
PACIFIC ETHANOL HOLDING CO. LLC, PACIFIC ETHANOL MADERA LLC, PACIFIC ETHANOL
COLUMBIA, LLC, PACIFIC ETHANOL STOCKTON, LLC, PACIFIC ETHANOL IMPERIAL, LLC, AND
PACIFIC ETHANOL MAGIC VALLEY, LLC

 
Ladies and Gentlemen:
 
The undersigned, PACIFIC ETHANOL HOLDING CO. LLC, PACIFIC ETHANOL MADERA LLC,
PACIFIC ETHANOL COLUMBIA, LLC, PACIFIC ETHANOL STOCKTON, LLC, PACIFIC ETHANOL
IMPERIAL, LLC, and PACIFIC ETHANOL MAGIC VALLEY, LLC (collectively, the
"Borrowers"), refer to the Credit Agreement, dated as of February __, 2007 (as
amended, restated, supplemented or otherwise modified from time to time, the
"Credit Agreement") among the Borrowers, PACIFIC ETHANOL HOLDING CO. LLC, as
Borrowers' Agent, each of the Lenders from time to time party thereto, WESTLB
AG, NEW YORK BRANCH, as Administrative Agent for the Lenders, WESTLB AG, NEW
YORK BRANCH, as Collateral Agent for the Senior Secured Parties, UNION BANK OF
CALIFORNIA, N.A., as Accounts Bank, WESTLB AG, NEW YORK BRANCH, as Lead Arranger
and Sole Bookrunner, MIZUHO CORPORATE BANK, LTD., as Lead Arranger and
Co-Syndication Agent, CIT CAPITAL SECURITIES LLC, as Lead Arranger and
Co-Syndication Agent, COOPERATIEVE CENTRALE RAIFFEISEN­BOERENLEENBANK B.A.,
"RABOBANK NEDERLAND", NEW YORK BRANCH, as Lead Arranger and Co-Documentation
Agent, and BANCO SANTANDER CENTRAL HISPANO S.A, NEW YORK BRANCH, as Lead
Arranger and Co-Documentation Agent. Capitalized terms used herein but not
otherwise defined herein shall have the respective meanings set forth in the
Credit Agreement.
 
 
 
 
3.05 - 1

--------------------------------------------------------------------------------

 
 
 
The Borrowers hereby deliver to the Administrative Agent this irrevocable notice
pursuant to Section 3.05 of the Credit Agreement and irrevocably request the
duration set forth below for the immediately succeeding Interest Period for the
Loans identified herein.
 
[The Borrowers hereby elect to continue Eurodollar Loans as Eurodollar Loans for
the next Interest Period applicable to such continued Eurodollar Loans] [[,] to
convert Base Rate Loans to Eurodollar Loans at the end of the current Quarterly
Period [and] [to convert Eurodollar Loans to Base Rate Loans at the end of the
current Interest Period for such Eurodollar Loans], in each case as set forth on
Schedule 1 hereto.
 
The Borrowers hereby certify that this Interest Period Notice is being delivered
[prior to the Conversion Date and, after giving effect to the immediately
succeeding Interest Periods set forth on Schedule 1, there will be no more than
seven (7) separate Eurodollar Loans outstanding] [on and after the Conversion
Date and, after giving effect to the immediately succeeding Interest Periods set
forth on Schedule 1, there will be no more than four (4) separate Eurodollar
Loans outstanding].
 
In connection herewith, the Borrowers hereby further certify that no Event of
Default has occurred and is continuing. This Interest Period Notice is being
delivered on or before 12:00 noon. New York City time at least four (4) Business
Days prior to the end of each Interest Period set forth on Schedule 1 hereto.
 
[The remainder of this page is intentionally blank. The next page is the
signature page.]
 
 
 
 
 
 
3.05 - 2

--------------------------------------------------------------------------------

 
 
 
IN WITNESS WHEREOF, the undersigned have caused this Interest Period Notice to
be duly executed by an Authorized Officer as of the date first above written.
 
 
PACIFIC ETHANOL HOLDING CO, LLC
 
 
By: ________________________
Name:
Title:
 
 
PACIFIC ETHANOL MADERA, LLC
 
By: ________________________
Name:
Title:
 
 
PACIFIC ETHANOL COLUMBIA, LLC
 
By: ________________________
Name:
Title:
 
 
PACIFIC ETHANOL STOCKTON, LLC
By: ________________________
Name:
Title:
 
 
 
 
 
 
3.05 - 3

--------------------------------------------------------------------------------

 
 
PACIFIC ETHANOL IMPERIAL, LLC
 
By: ________________________
Name:
Title:
 
 
PACIFIC ETHANOL MAGIC VALLEY, LLC
 
By: ________________________
Name:
Title:
 
 
 
 
 
 
 
 
 
3.05 - 4

--------------------------------------------------------------------------------

 
 
Schedule 1
to Interest Period Notice
 
LOAN
(specify loan
type, including
whether loan is
Base Rate Loan
or Eurodollar
Loan, and
tranche)
PRINCIPAL
AMOUNT
CURRENT
INTEREST
PERIOD
DURATION
(for Eurodollar
Loans only)
CURRENT
INTEREST
PERIOD OR
QUARETERLY
PERIOD ENDS
ON
DURATION OF
IMMEDIATELY
SUCCEEDING
INTEREST
PERIOD'
(for Eurodollar
Loans only)
 
$
       
$
     

 
 
 
 
 
 
 
 
________
1 At the Borrowers' election, the duration of such Interest Period shall be
either one (1), two (2), three (3) or six (6) months.
 
 
 
3.05 - 5

--------------------------------------------------------------------------------

 
 
EXHIBIT 4.07
to Credit Agreement
 
FORM OF NON-U.S. LENDER STATEMENT
 
Reference is made to the Credit Agreement (as amended, modified or otherwise
supplemented from time to time in accordance with its terms, the
"Credit  Agreement"), dated as of February [__], 2007, by and among PACIFIC
ETHANOL HOLDING CO. LLC, a Delaware limited liability company, PACIFIC ETHANOL
MADERA LLC, a Delaware limited liability company, PACIFIC ETHANOL COLUMBIA, LLC,
a Delaware limited liability company, PACIFIC ETHANOL STOCKTON, LLC, a Delaware
limited liability company, PACIFIC ETHANOL IMPERIAL, LLC, a Delaware limited
liability company and PACIFIC ETHANOL MAGIC VALLEY, LLC, a Delaware limited
liability company, as Borrowers, PACIFIC ETHANOL HOLDING CO. LLC, as Borrowers'
Agent, each of the Lenders from time to time party thereto, WESTLB AG, NEW YORK
BRANCH, as Administrative Agent for the Lenders, WESTLB AG, NEW YORK BRANCH, as
Collateral Agent for the Senior Secured Parties, UNION BANK OF CALIFORNIA, N.A.,
as Accounts Bank, WESTLB AG, NEW YORK BRANCH, as Lead Arranger and Sole
Bookrunner, MIZUHO CORPORATE BANK, LTD., as Lead Arranger and Co-Syndication
Agent, CIT CAPITAL SECURITIES LLC, as Lead Arranger and Co-Syndication Agent,
COOPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK B.A., "RABOBANK NEDERLAND", NEW
YORK BRANCH, as Lead Arranger and Co-Documentation Agent, and BANCO SANTANDER
CENTRAL HISPANO S.A, NEW YORK BRANCH, as Lead Arranger and Co-Documentation
Agent. Capitalized terms used herein but not otherwise defined herein shall have
the respective meanings set forth in the Credit Agreement.
 
The undersigned Non-U.S. Lender hereby certifies as follows:
 
1. The Non-U.S. Lender is the beneficial owner of any and all interests in the
Obligations that it holds.
 
2. The Non-U.S. Lender is not a "United States person" as defined in Code
Section 7701(a)(30). Code Section 7701(a)(30) defines a United States person as
a citizen or resident of the United States; a domestic partnership; a domestic
corporation; an estate (other than a foreign estate); and a trust if a court
within the United States is able to exercise primary supervision over the
administration of the trust and one or more United States persons have the
authority to control all substantial decisions of the trust.
 
 
 
 
 
4.07 - 1

--------------------------------------------------------------------------------

 
 
 
3. The Non-U.S. Lender is not a "bank" described in Section 881(c)(3)(A) of the
Code.
 
4. The Non-U.S. Lender undertakes to notify the Borrowers and Administrative
Agent promptly upon the obsolescence or invalidity of this Non-U.S. Lender
Statement if, following the execution date hereof, any statement herein ceases
to be true at any time while the Non-U.S. Lender is entitled to payments of
interest by the Borrowers under the Financing Documents.
 
The undersigned Non-U.S. Lender acknowledges that this Non-U.S. Lender Statement
is executed and delivered in order to substantiate its entitlement to an
exemption from U.S. withholding tax under the Code. Further, the undersigned
individual certifies that it has the requisite authority to execute and deliver
this document for the Non-U.S. Lender.
 
 
 
[NAME OF NON-U.S. LENDER]
 
By: ________________________
 
Print Name:
Title:
Date:
 
 
 
 
 
 
 
 
 
 
4.07 - 2

--------------------------------------------------------------------------------

 
EXHIBIT 6.01(k)
to Credit Agreement
 
INSURANCE CONSULTANT'S CERTIFICATE
 
 
Moore
McNeil
 
[DATE]
 
WestLB AG, New York Branch,
as Administrative Agent for the Lenders
1211 Ave of Americas
New York, NY 10036
Attention: Yolette Salnave / Andrea Bailey
Facsimile: 212-302-7946
Email: ny_agency services@westlb.com
 
              Re:
PACIFIC ETHANOL HOLDING CO. LLC, PACIFIC ETHANOL MADERA LLC, PACIFIC ETHANOL
COLUMBIA, LLC, PACIFIC ETHANOL STOCKTON, LLC, PACIFIC ETHANOL IMPERIAL, LLC, AND
PACIFIC ETHANOL MAGIC VALLEY, LLC

 
 
Ladies and Gentlemen:
 
The undersigned has acted as Insurance Consultant for the Lenders with respect
to PACIFIC ETHANOL HOLDING CO. LLC ("Pacific Holding"), a Delaware limited
liability company, PACIFIC ETHANOL MADERA LLC ("Madera"), a Delaware limited
liability company, PACIFIC ETHANOL COLUMBIA, LLC ("Boardman"), a Delaware
limited liability company, PACIFIC ETHANOL STOCKTON, LLC ("Stockton"), a
Delaware limited liability company, PACIFIC ETHANOL IMPERIAL, LLC ("Brawley"), a
Delaware limited liability company and PACIFIC ETHANOL MAGIC VALLEY, LLC
("Burley"), a Delaware limited liability company (together, the "Borrowers") in
connection with that certain Credit Agreement (as amended, supplemented or
otherwise modified from time to time, the  "Credit Agreement") ,dated as of
February __, 2007, by and among the Borrowers, PACIFIC ETHANOL HOLDING CO. LLC,
as Borrowers' Agent, each of the Lenders from time to time party thereto, WESTLB
AG, NEW YORK BRANCH, as Administrative Agent for the Lenders, WESTLB AG, NEW
YORK BRANCH, as Collateral Agent for the Senior Secured Parties, UNION BANK OF
CALIFORNIA, N.A., as Accounts Bank, WESTLB AG, NEW YORK BRANCH, as Lead
 
 
 
6.01(k) - 1

--------------------------------------------------------------------------------

 
 
Arranger and Sole Bookrunner, MIZUHO CORPORATE BANK, LTD., as Lead Arranger and
Co-Syndication Agent, CIT CAPITAL SECURITIES LLC, as Lead Arranger and
Co-Syndication Agent, COOPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK B.A.,
"RABOBANK NEDERLAND", NEW YORK BRANCH, as Lead Arranger and Co-Documentation
Agent, and BANCO SANTANDER CENTRAL HISPANO S.A, NEW YORK BRANCH, as Lead
Arranger and Co-Documentation Agent. Capitalized terms used herein but not
defined herein shall have the respective meanings assigned to such terms in the
Credit Agreement.
 
The Insurance Consultant acknowledges that pursuant to the Credit Agreement, the
Lenders will be providing financing to the Borrowers for the construction of the
Project and in so doing will be relying on this certificate and the Insurance
Consultant's report dated [___________]. The Insurance Consultant certifies that
attached hereto as Exhibit A is a true, correct and complete copy of such
report, and that such report represents the Insurance Consultant's professional
opinion as of the date thereof. Further, since the date of the aforementioned
Insurance Consultant's report, nothing has come to our attention that would
cause us to change that report.
 
The Insurance Consultant hereby further certifies to the Administrative Agent
that:
 
(i)
[except as set forth in Exhibit B attached hereto,1 [the Borrowers have]]
[[Madera] [Boardman/ [Stockton] [Brawley] [Burley] [has]]2 evidenced all
insurance binders required pursuant to and in accordance with Section 7.01(h) of
the Credit Agreement, and its [insurance broker] [insurance carrier] has
executed a letter confirming that all such insurance policies are in full force
and effect;

 
(ii) 
[the deficiencies with respect to the insurance for the [Madera] [Boardman]
[Stockton] [Brawley] [Burley] Plant identified in the Insurance Consultant's
report delivered on the Closing Date have been satisfactorily addressed;] 3 and

 
(iii) 
each such insurance policy is placed with insurance carriers with an AM Best, A
"X" or equivalent credit rating or are otherwise acceptable to the Insurance
Consultant;

 
 
__________
1 To be included (if applicable) only at closing.
 
2 For the first Funding for each Plant, only the applicable Plant will be
covered.
 
3 Only applicable for the first Funding for that Plant.
 
 
 
6.01(k) - 2

--------------------------------------------------------------------------------

 
The Borrowers' [insurance broker] [insurance carrier] has evidenced binders and
has confirmed that:
 
·       
each such insurance policy has been endorsed with the Administrative Agent and
the Senior Secured Parties as Additional Insured and First Loss Payee (where
applicable);

 
·       
each such insurance policy permits a waiver of subrogation for the benefit of
the Senior Secured Parties;

 
·       
each such insurance policy is primary (without contribution from any other
policies the Senior Secured Parties may hold);

 
·       
each such insurance policy (where legally allowed) contains non-vitiation
language to ensure such insurance policy will remain in full force and effect
for the benefit of the Senior Secured Parties;

 
·       
each such insurance policy contains a non-invalidation endorsement that provides
the ability (but not the obligation) for the Senior Secured Parties to pay
premium and continue coverage in the event that any Borrower fails to make
premium payments; and

 
·       
each such insurance policy provides a minimum of 30-days' written notice of
cancellation to Administrative Agent, except for cancellation based on
non­payment of premium which provides for 10 days' prior written notice.

 
It is our opinion that on the basis of the binders and information evidenced to
us by the Borrowers and its [insurance broker] [insurance carrier], the
insurance evidenced is in compliance with the material insurance requirements of
the Project Documents and with the requirements of the Credit Agreement [other
than as noted on Exhibit B hereto].
 
A copy of the Borrowers' [insurance broker's] [insurance carrier's] certificate
confirming the matters set forth above is attached hereto as Exhibit C.
 
[The remainder of this page is intentionally blank. The next page is the
signature page.]
 
 
 
 
6.01(k) - 3

--------------------------------------------------------------------------------

 
IN WITNESS WHEREOF, the undersigned has caused this Insurance Consultant's
Certificate to be duly executed by an authorized officer as of the date first
above written.
 
 
 
MOORE-MCNEIL, LLC
 
 
 
By: ____________________________
Name:
Title:
 
 
 
 
 
 
 
 
 
 
 
6.01(k) - 4

--------------------------------------------------------------------------------

 
EXHIBIT A
to Insurance Consultant's Certificate
 
INSURANCE CONSULTANT'S REPORT
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
6.01(k) - 5

--------------------------------------------------------------------------------

 
EXHIBIT B
to Insurance Consultant's Certificate
 
 
 
 
INSURANCE DEFICIENCIES
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
6.01(k) - 6

--------------------------------------------------------------------------------

EXHIBIT C
to Insurance Consultant's Certificate
 
CERTIFICATE OF BORROWERS' [INSURANCE BROKER] [INSURANCE CARRIER]
 
 
To: [Insurance Consultant]
 
WestLB AG, New York Branch,
as Administrative Agent for the Lenders
1211 Ave of Americas
New York, NY 10036
Attention: Yolette Salnave / Andrea Bailey
Facsimile: 212-302-7946
Email: ny_agency services@westlb.com
 
The undersigned has acted as [insurance broker] [insurance carrier] for PACIFIC
ETHANOL HOLDING CO. LLC ("Pacific Holding"), a Delaware limited liability
company, PACIFIC ETHANOL MADERA LLC ("Madera"), a Delaware limited liability
company, PACIFIC ETHANOL COLUMBIA, LLC ("Boardman"), a Delaware limited
liability company, PACIFIC ETHANOL STOCKTON, LLC ("Stockton"), a Delaware
limited liability company, PACIFIC ETHANOL IMPERIAL, LLC ("Brawley"), a Delaware
limited liability company and PACIFIC ETHANOL MAGIC VALLEY, LLC ("Burley"), a
Delaware limited liability company (together, the "Borrowers") in connection
with that certain Credit Agreement (as amended, supplemented or otherwise
modified from time to time, the "Credit Agreement"), dated as of February __,
2007, by and among the Borrowers, PACIFIC ETHANOL HOLDING CO. LLC, as Borrowers'
Agent, each of the Lenders from time to time party hereto, WESTLB AG, NEW YORK
BRANCH, as Administrative Agent for the Lenders, WESTLB AG, NEW YORK BRANCH, as
Collateral Agent for the Senior Secured Parties, UNION BANK OF CALIFORNIA,
N.A.,, as Accounts Bank, WESTLB AG, NEW YORK BRANCH, as Lead Arranger and Sole
Bookrunner, MIZUHO CORPORATE BANK, LTD., as Lead Arranger and Co-Syndication
Agent, CIT CAPITAL SECURITIES LLC, as Lead Arranger and Co-Syndication Agent,
COOPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK B.A., "RABOBANK NEDERLAND", NEW
YORK BRANCH, as Lead Arranger and Co-Documentation Agent, and BANCO SANTANDER
CENTRAL HISPANO S.A, NEW YORK BRANCH, as Lead Arranger and Co-Documentation
Agent. Capitalized terms used herein but not defined herein shall have the
respective meanings assigned to such terms in the Credit Agreement.
 
 
 
 
 
 
 
 
6.01(k) - 7

--------------------------------------------------------------------------------

 
 
[OPTION A:]4 [The undersigned confirms that:
 
(i) 
[except as set forth in Exhibit B attached hereto, the Borrowers
have]5 [[Madera] [Boardman] [Stockton] [Brawley] [Burley] [has]16 evidenced all
insurance binders required pursuant to and in accordance with Section 7.01(h) of
the Credit Agreement;

 
(ii)
all premiums due and payable with respect to each such insurance policy have
been paid or that Borrowers are not in arrears on any such premium due;

 
(iii) 
each such insurance policy is placed with insurance carriers with an AM Best, A
"X" or equivalent credit rating or as otherwise set forth on Annex A hereto;

 
(iv) 
each such insurance policy has been endorsed with the Administrative Agent and
the Senior Secured Parties as Additional Insured and First Loss Payee (where
applicable);

 
(v) 
each such insurance policy permits a waiver of subrogation for the benefit of
the Senior Secured Parties;

 
(vi) 
each such insurance policy is primary (without contribution from any other
policies the Senior Secured Parties may hold);

 
(vii) 
each such insurance policy (where legally allowed) contains non-vitiation
language to ensure such insurance policy will remain in full force and effect
for the benefit of the Senior Secured Parties;

 
(viii) 
each such insurance policy contains a non-invalidation endorsement that provides
the ability (but not the obligation) for the Senior Secured Parties to pay
premium and continue coverage in the event that any Borrower fails to make
premium payments; and

 
(ix) 
each such insurance policy provides a minimum of 30-days' written notice of
cancellation to Administrative Agent, except for cancellation based on
non-payment of premium which provides for 10 days' prior written notice.]

 
 
____________
 
4 Insurance Broker/Insurance Carrier to select either Option A or Option B. If
multiple Insurance Carriers submit certificates, then each may limit their
certifications to the types of coverages they provide so long as the sum of such
certifications satisfies the requirements of Schedule 7.01(h), in the
determination of the Insurance Consultant.
 
5 To be included (if applicable) only at closing.
 
6 For the first Funding for each Plant, only the applicable Plant will be
covered.
 
 
 
 
 
 
6.01(k) - 8

--------------------------------------------------------------------------------

 
 
 
[OPTION B:] [The undersigned hereby confirms that the attached [description of
policy] insurance policy maintained by [the applicable Borrowers] as of the date
hereof satisfies the requirements set forth on Schedule 7.01(h) of the Credit
Agreement (with respect to [description of coverage]) and is in full force and
effect.]
 
[The remainder of this page is intentionally blank. The next page is the
signature page.]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
6.01(k) - 9

--------------------------------------------------------------------------------

 
 
 
IN WITNESS WHEREOF, the undersigned has caused this Certificate of Borrowers'
[Insurance Broker] [Insurance Carrier] to be duly executed by an authorized
officer as of the date first above written.
 
 
 
[Insurance Broker] [Insurance Carrier]
 
 
By: ____________________________
Name:
Title:
 
 
 
 
 
 
 
 
 
6.01(k) - 10

--------------------------------------------------------------------------------

 
 
ANNEX A
to Exhibit C to Insurance Consultant's Certificate
 
[INSURANCE CARRIERS' SPECIFICATIONS]7
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
_________________
7 Only if applicable.
 
 
 
 
6.01(k) - 11

--------------------------------------------------------------------------------

 
EXHIBIT 6.01(q)
to Credit Agreement
 
 
 
 
 
 
DRAWDOWN SCHEDULES
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
6.01(q) - 1

--------------------------------------------------------------------------------

 
Pacific Ethanol, Inc.
Projected Senor Debt Drawdown Schedule

 
 
Month/Year
 
Madera
   
Boardman
   
Burley
   
Stockton
   
Brawley
   
Total
                                       
Mar-07
  $ 51,153,846     $ -     $ -     $ -     $ -     $ 51,153,846  
Apr-07
    -       -       -       -       -       -  
May-07
    -       -       -       -       -       -  
Jun-07
    -       -       -       -       -       -  
Jul-07
    -       -       -       -       -       -  
Aug-07
    -       51,153,846       -       -       -       51,153,846  
Sep-07
    -       -       9,000,000       -       -       9,000,000  
Oct-07
    -       -       9,000,000       9,000,000       10,350,000       28,350,000
 
Nov-07
    -       -       9,000,000       9,900,000       10,800,000       29,700,000
 
Dec-07
    -       -       9,000,000       9,000,000       9,450,000       27,450,000  
Jan-08
    -       -       9,000,000       8,100,000       8,100,000       25,200,000  
Feb-08
    -       -       -       9,000,000       6,300,000       15,300,000  
Mar-08
    -       -       29,230,769       -       -       29,230,769  
Apr-08
    -       -       -       -       -       -  
May-08
    -       -       -       29,230,769       -       29,230,769  
Jun-08
    -       -       -       -       29,230,769       29,230,769  
Jul-08
    -       -       -       -       -       -  
Aug-08
    -       -       -       -       -       -  
Sep-08
    -       -       -       -       -       -  
Oct-08
    -       -       -       -       -       -  
Total draws
  $ 51,153,846     $ 51,153,846     $ 74,230,769     $ 74,230,769     $
74,230,769     $ 325,000,000  

 
 
 
6.01(q) - 2

--------------------------------------------------------------------------------

EXHIBIT 6.01(v)
to Credit Agreement
 
 
 
 
FINANCIAL MODEL
 
 
 
 
Delivered under separate cover.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
6.01(v) - 1

--------------------------------------------------------------------------------

 
 
EXHIBIT 6.02(a)
 to Credit Agreement
 
[FORM OF]
COMMERCIAL OPERATION DATE CERTIFICATE
 
 
To: WESTLB AG, NEW YORK BRANCH,
as Administrative Agent under the Credit Agreement
referred to below
 
Date: [______________]
 
 
Re: [Madera] [Boardman] [Stockton] [Brawley] (Burley] Plant
 
Reference is made to the Credit Agreement dated as of February __, 2007 (as
amended, restated, supplemented or otherwise modified from time to time, the
"Credit  Agreement"), by and among PACIFIC ETHANOL HOLDING CO. LLC, a Delaware
limited liability company, PACIFIC ETHANOL MADERA LLC, a Delaware limited
liability company, PACIFIC ETHANOL COLUMBIA, LLC, a Delaware limited liability
company, PACIFIC ETHANOL STOCKTON, LLC, a Delaware limited liability company,
PACIFIC ETHANOL IMPERIAL, LLC, a Delaware limited liability company and PACIFIC
ETHANOL MAGIC VALLEY, LLC, a Delaware limited liability company, as Borrowers,
PACIFIC ETHANOL HOLDING CO. LLC, as Borrowers' Agent, each of the Lenders from
time to time party thereto, WESTLB AG, NEW YORK BRANCH, as Administrative Agent
for the Lenders, WESTLB AG, NEW YORK BRANCH, as Collateral Agent for the Senior
Secured Parties, UNION BANK OF CALIFORNIA, N.A. as Accounts Bank, WESTLB AG, NEW
YORK BRANCH, as Lead Arranger and Sole Bookrunner, MIZUHO CORPORATE BANK, LTD.,
as Lead Arranger and Co-Syndication Agent, CIT CAPITAL SECURITIES LLC, as Lead
Arranger and Co-Syndication Agent, COOPERATIEVE CENTRALE
RAIFFEISEN­BOERENLEENBANK B.A., "RABOBANK NEDERLAND", NEW YORK BRANCH, as Lead
Arranger and Co-Documentation Agent, and BANCO SANTANDER CENTRAL HISPANO S.A,
NEW YORK BRANCH, as Lead Arranger and Co-Documentation Agent. Capitalized terms
used herein but not otherwise defined herein shall have the respective meanings
set forth in the Credit Agreement.
 
 
 
 
 
 
 
 
 
6.02(a) - 1

--------------------------------------------------------------------------------

 
 
 
This Commercial Operation Date Certificate is the Commercial Operation Date
Certificate for the [Madera] [Boardman] [Stockton] [Brawley] [Burley] Plant, and
is delivered to the Administrative Agent pursuant to the Credit Agreement.
 
The undersigned, on behalf of the Borrowers' Agent, hereby represents and
certifies as follows:
 
1. the individual executing this Commercial Operation Date Certificate on behalf
of the Borrowers' Agent is a duly Authorized Officer of the Borrowers' Agent;
 
2. construction of such Plant has been completed (other than punch list items)
and such Plant is ready to grind corn and begin operation for its intended use
as an ethanol production facility at its design basis capacity;
 
3. the Performance Test for such Plant has been completed in accordance with the
Approved Performance Test Protocols, and has demonstrated that such Plant has
achieved the Minimum Performance Criteria, while meeting air emissions
requirements;
 
4. training has been completed for all required personnel of such Plant;
 
5. the Borrowers have received a plant operation manual and plant maintenance
manual, associated documents, training manuals, final safety plans, and all
materials and documents provided by the Construction Contractors and other
manufacturers, suppliers and vendors for such Plant;
 
6. the Borrowers shall have received preliminary construction drawings for such
Plant;
 
7. all construction costs for such Plant have been fully paid other than amounts
that are subject to a Contest and the costs identified on Annex 1 hereto, which
amounts are not in excess of five million Dollars ($5,000,000) and with respect
to which full reserves have been established;
 
8. attached hereto as Annex 2 is evidence (which may include an ALTA 122
Endorsement to the applicable Title Insurance Policy) that there are no
mechanic's, workmen's, materialmen's or other similar Liens or other claims on
any part of such Plant, the Site for such Plant, or other assets relating to the
work or services of such Plant (other than Liens that are subject to a Contest);
 
9. attached hereto as Annex 3 are Lien waivers from each Construction Contractor
and each subcontractor for such Plant, other than with respect to (a) punch list
items and work identified on Annex 4, which constitutes work done by the
Construction Contractors and subcontractors with respect to which payments do
not exceed, in the
 
 
 
 
6.02(a) - 2

--------------------------------------------------------------------------------

 
 
aggregate, one million Dollars ($1,000,000) and (b) Liens that are subject to a
Contest; and
 
10. all Necessary Project Approvals required to be obtained as of the date
hereof with respect to such Plant have been obtained.
 
The undersigned, on behalf of the Independent Engineer, hereby represents and
certifies as follows:
 
1. the individual executing this Commercial Operation Date Certificate on behalf
of the Independent Engineer is a duly authorized representative of the
Independent Engineer;
 
2. based on the Independent Engineer's diligence in accordance with the scope of
the Independent Engineer's professional services agreement with the Secured
Parties, it is the professional opinion of the Independent Engineer that
construction of such Plant has been completed (other than punch list items) and
such Plant is ready to grind corn and begin operation for its intended use as an
ethanol production facility at its design basis capacity;
 
3. based on information provided by the Borrowers, third-party air emissions
test results, and the Independent Engineer's visit to the Site for such Plant
and observation of the Performance Test, the Performance Test has been completed
in accordance with the Approved Performance Test Protocols; provided that the
entire Performance Test was conducted in accordance with the protocol witnessed
during the Independent Engineer's site visit, and has demonstrated that such
Plant has achieved the Minimum Performance Criteria, while meeting tested air
emissions requirements;
 
4. to the reasonable satisfaction of the Independent Engineer, based on its best
knowledge, training has been completed for all required personnel of such Plant;
 
5. the Independent Engineer has reviewed, in accordance with the scope of the
Independent Engineer's professional services agreement with the Secured Parties,
the plant operation manuals and plant maintenance manuals, associated documents,
training manuals, final safety plans, and all materials and documents provided
to the Borrowers by the Construction Contractors and other manufacturers,
suppliers and vendors for such Plant;
 
6. based on documentation requested by the Independent Engineer and received
from the Borrowers, all construction costs for such Plant payable to the
Construction Contractors, and for all other material construction work with
respect to which the Independent Engineer has requested evidence of payment,
have been fully paid
 
 
 
 
 
 
6.02(a) - 3

--------------------------------------------------------------------------------

 
 
 
other than (a) amounts that (based on documentation received from the Borrowers)
are subject to a Contest and (b) the costs identified on Annex 1 hereto, which
amounts are not in excess of five million Dollars ($5,000,000) and with respect
to which full reserves have been established;
 
7. attached hereto as Annex 2 is evidence (which may include an ALTA 122
Endorsement to the applicable Title Insurance Policy) that there are no
mechanic's, workmen's, materialmen's or other similar Liens or other claims on
any part of such Plant, the Site for such Plant, or other assets relating to the
work or services of such Plant (other than Liens that (based on documentation
received from the Borrowers) are subject to a Contest);
 
8. attached hereto as Annex 3 are Lien waivers from each Construction Contractor
and each subcontractor for such Plant, other than with respect to (a) punch list
items and work identified on Annex 4, which constitutes work done by the
Construction Contractors and subcontractors with respect to which payments do
not exceed, in the aggregate, one million Dollars ($1,000,000) and (b) Liens
that (based on documentation received from the Borrowers) are subject to a
Contest; and
 
9. all key Necessary Project Approvals required to be obtained for the operation
of such Plant as of the date hereof have been obtained.
 
[The remainder of this page is intentionally blank. The next page is the
signature page.]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
6.02(a) - 4

--------------------------------------------------------------------------------

 
 
IN WITNESS WHEREOF, the undersigned have caused this Commercial Operation Date
Certificate to be duly executed as of the date first above written.
 
 
 
PACIFIC ETHANOL HOLDING CO. LLC,
as Borrowers' Agent
 
 
By: _____________________________
Name:
Title:
 
 
 
[_____________]
as Independent Engineer
 
 
By: _____________________________
Name:
Title:
 
 
 
 
 
 
 
6.02(a) - 5

--------------------------------------------------------------------------------

 
 
Annex 1
to Commercial Operation Date Certificate
 
UNPAID CONSTRUCTION COSTS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
6.02(a) - Annex 1

--------------------------------------------------------------------------------

 
 
Annex 2
to Commercial Operation Date Certificate
 
EVIDENCE OF NO
MECHANIC'S, WORKMEN'S, MATERIALMEN'S LIENS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
6.02(a) - Annex 2

--------------------------------------------------------------------------------

 
 
Annex 3
to Commercial Operation Date Certificate
 
LIEN WAIVERS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
6.02(a) - Annex 3

--------------------------------------------------------------------------------

 
Annex 4
to Commercial Operation Date Certificate
 
WORK DONE FOR WHICH LIEN WAIVERS ARE NOT PROVIDED
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
6.02(a) - Annex 4

--------------------------------------------------------------------------------

 
Exhibit 6.02(g)
to the Credit Agreement
 
[FORM OF]
 
TITLE ENDORSEMENT
 
Endorsement 122
 
ENDORSEMENT
 
Attached to Policy No.
 
Issued by
 
STEWART TITLE GUARANTY COMPANY
 
HEREIN CALLED THE COMPANY
 
Provided an advance is made by the insured pursuant to the Credit Agreement
described in the insured mortgage to or for the benefit of [insert applicable
project entity] in the sum of $________________ , which is a portion of the
indebtedness evidenced by the "Financing Documents" (as defined in the Credit
Agreement), the Company hereby insures the owner of the indebtedness secured by
the insured mortgage against loss or damage which the insured shall sustain by
reason of:
 
 
(1) The Company's assurance that, except as otherwise expressly provided herein,
there are no liens, encumbrances or other matters shown by the public records
affecting the estate or interest referred to in Schedule A, other than those
shown in said policy, except:
 
(2) The existence of any subsisting tax or governmental assessment lien which is
prior to the insured mortgage, except the following described subsisting tax or
governmental assessment lien(s) to the extent that same have priority over the
insured mortgage by operation of law:
 
(3) Title to the estate or interest referred to in Schedule A being vested other
than as shown in Schedule A according to the public records;
 
 
 
6.02(g) - 1

--------------------------------------------------------------------------------

 
(4) The failure of the advance identified above to be secured by the insured
mortgage;
 
(5) Lack of priority of the insured mortgage with respect to such advance, over
any liens, encumbrances or other matters shown by the public records, affecting
the estate or interest referred to in Schedule A, other than those shown in
Schedule B as prior to the insured mortgage and in paragraph (2) herein, and/or
 
(6) Lack of priority of the lien of the insured mortgage over any statutory lien
for services, labor or material arising out of the work or improvement under
construction or completed at the date hereof.
 
This endorsement is made a part of the policy and is subject to all of the terms
and provisions thereof and of any prior endorsements thereto. Except to the
extent expressly stated, it neither modifies any of the terms and provisions of
the policy and any prior endorsements, nor does it extend the effective date of
the policy and any prior endorsements, nor does it increase the face amount
thereof.
 
 
 
STEWART TITLE GUARANTY COMPANY
 
 
 
By: _____________________________________
 
 
 
 
 
6.02(g) - 2

--------------------------------------------------------------------------------

 
EXHIBIT 6.04(g)-A
to Credit Agreement
 
[FORM OF DEED OF TRUST]
 
Upon recording return to:
Chadbourne & Parke LLP
30 Rockefeller Plaza
New York, NY 10112
Attn: Thomas E. Charbonneau, Esq.
 
The tax account number of the property
subject to the Lien or in which the interest
is created is [__________].
 
 

--------------------------------------------------------------------------------

Space above this line for Recorder
 
LEASEHOLD TRUST DEED, LINE OF CREDIT INSTRUMENT, SECURITY AGREEMENT, FINANCING
STATEMENT, FIXTURE FILING AND ASSIGNMENT OF LEASES, RENTS AND SECURITY DEPOSITS
 
Dated as of February , 2007
 
by
 
PACIFIC ETHANOL COLUMBIA, LLC
Grantor
 
to
 
STEWART TITLE GUARANTY COMPANY, as Trustee
 
for the benefit of
 
 
[_______________________________], as Collateral Agent, as Beneficiary [This is
a Construction Mortgage, as defined in the Uniform Commercial Code.]
 
 
MAXIMUM AMOUNT TO BE ADVANCED PURSUANT TO THE CREDIT AGREEMENT (as defined in
ORS 86.155): $[_____________]
 
TERM OR MATURITY DATE OF CREDIT AGREEMENT (as defined in ORS 86.155):
[_______________]
 
 
6.04(g)-A -1

--------------------------------------------------------------------------------

 
TABLE OF CONTENTS
 
 
ARTICLE I DEFINITIONS
7
   
1.1 DEFINITIONS
7
1.2 PRINCIPLES OF CONSTRUCTION
13
   
ARTICLE II GENERAL RIGHTS OF BENEFICIARY
14
   
ARTICLE III LEASED PREMISES
14
   
3.1 THE PORT LEASE
 14
3.2 NEW LEASE WITH BENEFICIARY
 17
3.3 No MERGER OF FEE AND LEASEHOLD ESTATES
 18
   
ARTICLE IV ABSOLUTE ASSIGNMENT OF LEASES AND RENTS
18
   
4.1 ABSOLUTE ASSIGNMENT OF LEASES AND RENTS
18
   
ARTICLE V SECURITY AGREEMENT
22
   
5.1 RIGHTS TO UCC COLLATERAL UNDER THE UNIFORM COMMERCIAL CODE
  22
5.2 FIXTURE FILING FINANCING STATEMENTS
22
   
ARTICLE VI REPRESENTATIONS OF GRANTOR
23
   
6.1 REPRESENTATIONS AND WARRANTIES
23
   
ARTICLE VII DEFAULT AND FORECLOSURE
23
   
7.1 REMEDIES
23
7.2 RESCISSION OF NOTICE OF EVENT OF DEFAULT
28
7.3 APPLICATION OF PROCEEDS
28
7.4 ADDITIONAL SECURITY
29
7.5 REMEDIES CUMULATIVE
29
7.6 ATTORNEY-IN-FACT
30
7.7 WAIVER OF NOTICE
30
7.8 PAYMENT OF COSTS AND EXPENSES
30
7.9 GRANTOR'S WAIVERS
30
   
ARTICLE VIII MISCELLANEOUS
32
   
8.1 PERFORMANCE AT GRANTOR'S EXPENSE
32
8.2 BENEFICIARY'S RIGHT TO PERFORM THE OBLIGATIONS
32
8.3 SURVIVAL OF OBLIGATIONS
33
8.4 NOTICES
33
8.5 DELAY NOT A WAIVER
34
8.6 COVENANTS RUNNING WITH THE LAND
34
8.7 INTENTIONALLY OMITTED
34
8.8 SEVERABILITY
34
8.9 ENTIRE AGREEMENT AND MODIFICATION
34

 
 
6.04(g)-A -2

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8.10 GOVERNING LAW
35
8.11 LIMITATION ON BENEFICIARY'S RESPONSIBILITY
35
8.12 HEADINGS
35
8.13 MARSHALLING
35
8.14 WAIVER OF JURY TRIAL AND CONSENT TO JURISDICTION
36
8.15 MAXIMUM INDEBTEDNESS AND FUTURE ADVANCES
36
8.16 LIEN ABSOLUTE; MULTIPLE COLLATERAL TRANSACTION
37
8.17 DISCHARGE OF TRUST DEED
37
8.18 RENEWAL OR EXTENSION OF NOTES; SUBSTITUTE NOTES
38
8.19 CONFLICTS
38
8.20 ASSUMPTION NOT A NOVATION
38
8.21 ACKNOWLEDGMENT OF RECEIPT OF COPIES OF DEBT INSTRUMENT
38
8.22 INSURANCE WARNING
38
8.23 USE NOTICE
39
8.24 STATUTE OF FRAUDS NOTICE
39

 
 
6.04(g)-A -3

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LEASEHOLD TRUST DEED, LINE OF CREDIT INSTRUMENT, SECURITY
AGREEMENT, FINANCING STATEMENT, FIXTURE FILING AND ASSIGNMENT
OF LEASES, RENTS
AND SECURITY DEPOSITS
 
THIS Leasehold Trust Deed, Line of Credit Instrument, Security Agreement,
Financing Statement, Fixture Filing and Assignment of Leases, Rents and Security
Deposits, dated as of February ____, 2007 (as amended, restated, replaced,
supplemented or otherwise modified from time to time, this "Trust Deed"),
encumbers both real and personal property, contains an after-acquired property
clause and secures present and future loans and advances.
 
THIS Trust Deed is executed by PACIFIC ETHANOL COLUMBIA, LLC, a Delaware limited
liability company, as Grantor ("Grantor"), to STEWART TITLE GUARANTY COMANY, as
trustee ("Trustee") for the benefit of [_________________________], having an
address at [___________________], as Collateral Agent for the Senior Secured
Parties as described under the Credit Agreement referred to below, as
beneficiary (together with its successors and assigns, "Beneficiary").
WITNESSETH:
 
WHEREAS, Grantor has a leasehold estate in certain real property in Morrow
County, Oregon more particularly described on Exhibit A annexed hereto (the
"Leased Premises") created by the Lease dated April 20, 2006 between Port of
Morrow, as lessor, and Grantor, as lessee (as amended, modified and in effect
from time to time, the "Port Lease"), a memorandum of which has been recorded
October 5, 2006, as Microfilm No. 2006-17758, Morrow County Microfilm Records.
 
WHEREAS, Grantor has entered or will enter into certain Financing Documents
providing for, among other things, the ownership, financing, development,
engineering, construction, testing and operation of the Project as hereinafter
defined.
 
WHEREAS, Grantor has requested that the Lenders extend loans to the Grantor and
the other Borrowers referenced in the Credit Agreement in the aggregate
principal amount not to exceed at any one time the sum of
[___________________________] ($_______________________) (the "Loans") the
proceeds of which are to be used to finance the ownership, development,
engineering, construction, testing and operation of the Project near Boardman,
Oregon and the other Projects as further described in and pursuant to that
certain Credit Agreement (as amended, restated, supplemented or otherwise
modified from time to time, the " Credit  Agreement"), dated as of the date
hereof among Grantor and the other Borrowers, the
 
 
6.04(g)-A -4

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Lenders party thereto (the "Lenders"), Beneficiary, as Collateral Agent for the
Senior Secured Parties, WESTLB AG, NEW YORK BRANCH, as lead arranger and sole
lead bookrunner, IVIIZUHO CORPORATE BANK, LTD., as lead arranger and
co-syndication agent, CIT CAPITAL SECURITIES LLC, as lead arranger and
co-syndication agent, COOPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK B.A.,
"RABOBANK NEDERLAND", NEW YORK BRANCH, as lead arranger and co-documentation
agent, and BANCO SANTANDER CENTRAL HISPANO S.A, NEW YORK BRANCH, as lead
arranger and co-documentation agent.
 
WHEREAS, this Trust Deed is given pursuant to the Credit Agreement, and payment,
fulfillment, and performance by Grantor of its obligations thereunder and under
the other Financing Documents to which it is a party are secured hereby, and
each and every term and provision of the Credit Agreement, including the rights,
remedies, obligations, covenants, conditions, agreements, indemnities,
representations and warranties of the parties therein, is hereby incorporated by
reference herein as though set forth in full and shall be considered a part of
this Trust Deed;
 
WHEREAS, all of the obligations of Grantor under the Credit Agreement and the
Financing Documents shall become due and payable in any event no later than the
Discharge Date;
 
WHEREAS, the Credit Agreement contemplates the execution, delivery and
implementation of this Trust Deed and it is a condition precedent to the making
of the Loans under the Credit Agreement that Grantor shall have executed and
delivered this Trust Deed to Beneficiary on behalf of the Senior Secured
Parties;
 
WHEREAS, the Grantor has duly authorized the execution, delivery and performance
of this Trust Deed; and
 
WHEREAS, except as otherwise expressly provided herein, capitalized terms used
in this Trust Deed shall have the meanings given thereto in Section 1.01 of the
Credit Agreement. Except as otherwise expressly provided herein, the rules of
interpretation set forth in Section 1.02 of the Credit Agreement shall apply to
this Trust Deed.
 
NOW, THEREFORE, with reference to the foregoing Recitals, and for good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged and intending to be legally bound hereby:
 
Grantor does hereby irrevocably grant, bargain, sell, convey, confirm, release,
warrant, assign and transfer to Trustee, IN TRUST, WITH POWER OF SALE, for the
benefit and security of Beneficiary, as Collateral Agent on behalf of the Senior
Secured
 
 
6.04(g)-A -5

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Parties, the following property, whether now owned or hereafter acquired by
Grantor (collectively, the ""Trust Property") for the purpose of securing the
payment and performance of the Obligations (as hereinafter defined):
 
(i)  
all of Grantor's right, title and interest in and to the Leased Premises, and
any rights, privileges and appurtenances thereunto belonging or in any way
pertaining thereto, all reversions, remainders, dower and right of dower,
curtesy and right of curtesy, and all of Grantor's right, title and interest in
and to all transferable development rights arising therefrom or transferred
thereto, and, to the extent assignable, all appurtenances to such property,
including any now or hereafter belonging or in any way appertaining thereto, and
all claims or demands of Grantor, either at law or in equity, in possession or
expectancy, now or hereafter acquired, of, in or to the same;

 
(ii)  
all of Grantor's right, title and interest in and to the Port Lease and the
leasehold estate created thereunder and all modifications, extensions and
renewals of the Port Lease and all credits, deposits, options, purchase options,
privileges and rights of the Grantor under the Port Lease , including but not
limited to, the right, if any, to renew or extend the Port Lease for a
succeeding term or terms, or to acquire fee title to or other interest in all or
any portion of the Leased Premises;

 
(iii)  
all of Grantor's right, title and interest in and to the Improvements, including
any alterations thereto or replacements thereof, now or hereafter erected upon
the Leased Premises;

 
(iv)  
all of Grantor's right, title and interest in and to all Fixtures now or at any
time hereafter affixed to, attached to, placed upon or used in any way in
connection with the use, occupancy, enjoyment, development, operation or
ownership of the Leased Premises or the Improvements, together with any and all
replacements thereof and additions thereto;

 
(v)  
all of Grantor's right, title and interest in and to all Equipment and
Personalty now or at any time hereafter located at the Leased Premises or the
Improvements, together with any and all replacements thereof and additions
thereto;

 
(vi)  
all of Grantor's right, title and interest in and to all extensions,
improvements, betterments, renewals, substitutes and replacements of, and all
additions and appurtenances to, the Real Property and the Equipment, hereafter
acquired by or released to Grantor or constructed, assembled or

 
 
 
 
6.04(g)-A -6

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placed by Grantor on the Real Property, and all conversions of the security
constituted thereby; immediately upon such acquisition, release, construction,
assembling, placement or conversion, as the case may be, and in each such case,
without any further mortgage, conveyance, assignment or other act by Grantor,
any of such extensions, improvements, betterments, renewals, substitutes and
replacements shall become subject to the lien of this Trust Deed as fully and
completely, and with the same effect, as though now owned by Grantor and
specifically described herein;
 
(vii)  
all of Grantor's right, title and interest in and to all easements (including
all easements entered into pursuant to the Port Lease), streets, roads, alleys,
passages, rights of way, air rights, lateral support, drainage rights, options
to purchase, water rights (whether riparian, appropriative, or otherwise),
utility rights, privileges, franchises, servitudes, easements, tenements,
hereditaments, and appurtenances now or hereafter belonging or appertaining to
any of the foregoing or to the Leased Premises all mineral, mining, gravel, oil,
gas, hydrocarbon substances and other rights to produce or share in the
production of anything related to such property, all drainage, crop, timber,
agricultural, and horticultural rights with respect to such property, and all of
Grantor's right, title and interest in and to any streets, ways, alleys,
roadbeds, inclines, tunnels, culverts, strips or gores of land adjoining or
serving the Leased Premises or any part thereof, whether now owned or hereafter
acquired by Grantor;

 
(viii)  
all of Grantor's right, title and interest in and to all of the real estate and
personal property tax refunds or rebates or charges in lieu of Taxes now or
hereafter assessed or levied against the Real Property or any other part of the
Trust Property, including interest thereon, and the right to receive the same,
whether such refunds or rebates relate to fiscal periods before or during the
term of this Trust Deed, payable to Grantor with respect to the Leased Premises
or the Improvements, and refunds, credits or reimbursements payable with respect
to bonds, escrow accounts or other sums payable in connection with the use,
occupation, enjoyment, development, or operation of the Leased Premises or
Improvements;

 
(ix)  
all of Grantor's right, title and interest in and to all Leases affecting the
use of the Leased Premises now or hereafter entered into and Rents;

 
(x)  
all of Grantor's right, title and interest in and to all insurance policies and
the proceeds thereof, now or hereafter in effect with respect to the Real
Property or the UCC Collateral, including any and all title and property
insurance proceeds, and all unearned premiums and premium refunds,

 
 
 
6.04(g)-A -7

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accrued, accruing or to accrue under such insurance policies, and all of
Grantor's right, title and interest in and to all proceeds, judgments, claims,
compensation, awards or payments made for any taking of or damage to all or any
part of the Real Property or the UCC Collateral by eminent domain or
condemnation, or by any purchase in lieu thereof, and all awards resulting from
a change of grade of streets or for severance damages, and all other proceeds of
the conversion, voluntary or involuntary, of any of the Trust Property into cash
or other liquidated claims, and all judgments, damages, awards, settlements and
compensation (including interest thereon) heretofore or hereafter made to the
present and all subsequent owners of the Trust Property or any part thereof for
any injury to or decrease in the value thereof for any reason;
 
(xi)  
to the extent assignable, and with respect to contracts and agreements,
excluding those which by their terms or by operation of Law prohibit or do not
allow assignment or which would become void or terminable by the counterparty
thereto solely by virtue of the grant made herein (the "Excluded Contracts"),
all of Grantor's right, title and interest in and to all abstracts of title,
plans, specifications, operating manuals, computer programs, computer data,
maps, surveys, studies, reports, permits and licenses, records, plans, designs,
drawings, surveys, title insurance policies, agreements, contract rights,
approvals (but excluding any Governmental Approval which by its terms or by
operation of Law would become void, voidable, terminable or revocable if
mortgaged, pledged or assigned hereunder or if a security interest therein was
granted hereunder is expressly excepted and excluded from the Lien and terms of
this Trust Deed to the extent necessary so as to avoid such voidness,
avoidability, terminability or revocability), actions, appraisals,
architectural, engineering and construction contracts, books of account,
insurance policies and other documents, of whatever kind or character, relating
to the Real Property;

 
(xii)  
all of Grantor's right, title and interest in and to all present and future
Leases, Property Agreements, Contracts (in each case other than Excluded
Contracts), including all Contracts entered into pursuant to the Port Lease, and
all Proceeds and Receivables, the proceeds from the sale, transfer, disposition,
conveyance or refinancing of all or any portion of the Trust Property and other
benefits paid or payable and to become due or payable to Grantor in respect of
the use, occupancy, license or possession of any portion or portions of the
Trust Property;

 
 
 
 
6.04(g)-A -8

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(xiii)  
all of Grantor's right, as and to the extent set forth in the Credit Agreement,
in the name and on behalf of Grantor, to appear in and defend any action or
proceeding brought with respect to the Trust Property, and to commence any
action or proceeding to protect the interest of Grantor in the Trust Property;

 
(xiv)  
rights, titles, interests, estates or other claims, both in law and in equity,
which Grantor now has or may hereafter acquire in the Real Property or in and to
any greater estate in the Real Property or in and to any greater estate in the
Trust Property;

 
(xv)  
all of Grantor's right, title and interest in and to all property hereafter
acquired or constructed by Grantor located at or used in connection with the
Leased Premises of the type described in the foregoing granting clauses which
shall forthwith, upon acquisition or construction thereof by Grantor and without
any act or deed by Grantor or Beneficiary, become subject to the lien of this
Trust Deed as if such property were now owned by Grantor and were specifically
described in this Trust Deed and were specifically conveyed or encumbered
hereby;

 
(xvi)  
all of Grantor's right, title and interest in and to accessions, additions or
attachments to, and all receipts, issues, profits, proceeds and products arising
from, any of the foregoing and any and all proceeds of the conversion, voluntary
or involuntary, of any of the foregoing into cash or liquidated claims;

 
(xvii)  
all of Grantor's right, title and interest in and to all Inventory now or at any
time hereafter located at the Leased Premises or the Improvements or used in any
way in connection with the use, occupancy, enjoyment, development or operation
of the Leased Premises or the Improvements, together with any and all
replacements thereof and additions thereto, together with all of Grantor's
right, title and interest in and to all Accounts; and

 
(xviii)  
Grantor's interest, if any, in and to all pipelines and pipeline gathering
systems used in connection with the Project lying on, in or across lands or any
part thereof located in Morrow County, Oregon, together with all equipment,
fittings, fixtures, pipe, machinery, pumps, appliances, valves, meters, tanks
and other personal or real property appertaining to said pipeline gathering
systems and all tenements, hereditaments and appurtenances now owned or
hereafter acquired in connection therewith

 
 
6.04(g)-A -9

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together with all rights of way, servitudes, easements and permits for said
pipeline gathering systems.
 
"Trust Property," including each component thereof, shall be expressly
interpreted as meaning all or, where the context permits or requires, any
portion of the above, and all or, where the context permits or requires, any
interest of Grantor therein.
 
AND without limiting any of the other provisions of this Trust Deed, Grantor
expressly grants to Beneficiary, as secured party for itself and for the ratable
benefit of the Senior Secured Parties, a security interest in the portion of the
Trust Property which is or may be subject to the provisions of the Uniform
Commercial Code as in effect from time to time in the state in which the Leased
Premises is located (as the same may have been or may hereafter be amended, the
"Uniform Commercial Code"") which are applicable to secured transactions; it
being understood and agreed that the Improvements and Fixtures are part and
parcel of the Real Property and appropriated to the use thereof and, whether
affixed or annexed to the Real Property or not, shall for the purposes of this
Trust Deed be deemed conclusively to be real estate and conveyed hereby.
 
TO HAVE AND TO HOLD as provided herein, the above granted and described Trust
Property unto and to the Trustee for the proper use and benefit of Beneficiary,
and the successors and assigns of the Beneficiary, forever, for itself and for
the ratable benefit of the Senior Secured Parties and their respective assigns
and successors forever, in each case subject to the provisions of Section 8.17
hereof
 
AND TO PROTECT THE SECURITY OF THIS TRUST DEED, Grantor hereby agrees as
follows:
 
ARTICLE I
 
DEFINITIONS
 
1.1 Definitions. Capitalized terms used herein without definition shall have the
respective meanings ascribed to them in the Credit Agreement. As used herein,
the following terms shall have the following meanings:
 
"Accounts" shall mean all Grantor's accounts whether now existing or hereafter
arising and resulting from the sale or other disposition of Inventory or from
the services performed at the Project or any other accounts however arising and
all chattel paper, documents and instruments relating to the Accounts or
constituting the proceeds thereof
 
"Administrative Agent" shall have the meaning set forth in the Credit Agreement.
 
 
6.04(g)-A -10

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"Trust Property" shall have the meaning set forth in the granting clauses of
this Trust Deed.
 
"Business Day" shall have the meaning set forth in the Credit Agreement.
"Collateral" shall have the meaning set forth in the Credit Agreement.
 
"Collateral Agent" shall have the meaning set forth in the Credit Agreement.
"Contest" shall have the meaning set forth in the Credit Agreement.
 
"Contracts" means all contracts to which the Grantor now is, or hereafter will
be, bound, or a party, beneficiary or assignee, including exhibits thereto, and
all other instruments, agreements and documents executed and delivered with
respect to such contracts, all consents, and all revenues, rentals, Proceeds and
other sums of money due and to become due from any of the foregoing, as the same
may be modified, supplemented or amended from time to time in accordance with
their terms.
 
"Default" shall have the meaning set forth in the Credit Agreement.
 
"Default Rate" shall mean the interest rate described in Section 3.06 of the
Credit Agreement.
 
"Discharge Date" shall have the meaning set forth in the Credit Agreement.
"Distiller's Grains" shall have the meaning set forth in the Credit Agreement.
 
"Equipment" means all "equipment," as such term is defined in Article 9 of the
Uniform Commercial Code, now owned or hereafter acquired by Grantor, which is
used at or in connection with the Improvements or the Leased Premises or is
located thereon or therein (including all machinery, appliances, apparatus,
fittings, materials, equipment, pipes, pipelines (including meters, connections,
values and associated equipment), tanks, mains, lines, pumps, cables, lines,
wires, conduits, poles and related equipment, loading and unloading equipment,
motors, switchboards, cleaning, fire prevention, fire extinguishing, cooling and
ventilation equipment, furnishings, and electronic data-processing and other
office equipment now owned or hereafter acquired by Grantor and any and all
additions, substitutions and replacements of any of the foregoing), together
with all attachments, components, parts, equipment and accessories installed
thereon or affixed thereto. Notwithstanding the foregoing, Equipment shall not
include any property belonging to tenants under leases except to the extent that
Grantor shall have any right or interest therein.
 
"Event of Default" shall have the meaning set forth in the Credit Agreement.
 
 
 
6.04(g)-A -11

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"Financing Documents" shall have the meaning set forth in the Credit Agreement.
 
"Fixtures" means all Equipment now owned, or the ownership of which is hereafter
acquired, by Grantor which is so related to the Leased Premises or the
Improvements forming part of the Trust Property that it is deemed fixtures or
real property under the law of the state in which the Leased Premises is
located, including all building or construction materials intended for
construction, reconstruction, alteration or repair of or installation on the
Trust Property, construction equipment, appliances, machinery, plant equipment,
fittings, apparatuses, fixtures and other items now or hereafter attached to,
installed in or used in connection with (temporarily or permanently) any of the
Improvements or the Leased Premises, including engines, devices for the
operation of pumps, pipes, plumbing, cleaning, call and sprinkler systems, fire
extinguishing apparatuses and equipment, heating, ventilating, plumbing,
laundry, incinerating, electrical, air conditioning and air cooling equipment
and systems, gas and electric machinery, appurtenances and equipment, pollution
control equipment, security systems, disposals, cables, wires, pipelines
(including meters, connections, valves and other associated equipment),
conduits, mains, lines, ducts, fences, lighting fixtures, recreational equipment
and facilities of all kinds, and water, gas, electrical, storm and sanitary
sewer facilities, utility lines and electric transmission equipment (whether
owned individually or jointly with others, and, if owned jointly, to the extent
of Grantor's interest therein) and all other utilities whether or not situated
in easements, all water tanks, water supply, water power sites, fuel stations,
fuel tanks, fuel supply, and all other structures, together with all accessions,
appurtenances, additions, replacements, betterments and substitutions for any of
the foregoing and the proceeds thereof.
 
"Governmental Approvals" shall have the meaning set forth in the Credit
Agreement.
 
"Governmental Authority" shall have the meaning set forth in the Credit
Agreement.
 
"Impositions" means all taxes (including, without limitation, all ad valorem,
sales (including those imposed on lease rentals), use, gross receipts, value
added, intangible transaction, privilege or license or similar taxes; and
excluding mortgage recording taxes, transfer taxes, transfer gains taxes, gift
and inheritance taxes, franchise taxes and analogous taxes on non-corporate
entities, and income taxes), assessments (including, without limitation, all
assessments for public improvements or benefits, whether or not commenced or
completed prior to the date hereof and whether or not commenced or completed
within the term of this Trust Deed), water, sewer or other rents and charges,
excises, levies, fees (including, without limitation, license, permit,
inspection, authorization and similar fees), and all other governmental charges,
in each case whether general or special, ordinary or extraordinary, or foreseen
or unforeseen, of every
 
 
 
6.04(g)-A -12

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character in respect of the Trust Property and/or any Rents (including all
interest and penalties thereon), which at any time prior to, during or in
respect of the term hereof shall be assessed or imposed on or in respect of or
be a lien upon (a) Grantor that are in the nature of a real estate tax, whether
in addition to, or in lieu of, real estate taxes, (b) the Trust Property, or any
other collateral delivered or pledged to Beneficiary under the Security
Documents, or any part thereof, or any Rents therefrom or any estate, right,
title or interest therein, or (c) any occupancy, operation, use or possession
of, or sales from, or activity conducted on, or in connection with the Trust
Property or the leasing or use of all or any part thereof.
 
"Improvements" means any and all buildings, structures, foundations, storage and
other tanks, utility sheds, workrooms, towers, retention basins, generating
units, pump stations, transformers, retaining walls, pipes, cables, landscaping,
irrigation and drainage pipes and facilities, open parking areas, and all other
structures, improvements and fixtures of every kind whatsoever, whether above or
below the land surface, and whether permanent or temporary, and any and all
additions, alterations, betterments or appurtenances thereto, and all renewals,
substitutions or replacements now or at any time owned, or hereafter acquired by
Grantor and situated, placed or constructed on, over or under the Leased
Premises or any part thereof.
 
"Inventory" means all of Grantor's inventory of ethanol, Distiller's Grains,
carbon dioxide and any other co-product or by-product in connection with the
production of ethanol; feedstock, including but not limited to corn,
denaturants, enzymes, natural gas, natural lime, plant consumables, and other
Products.
 
"Law" shall have the meaning set forth in the Credit Agreement.
 
"Leases" means, collectively, any lease or ground lease (other than the Port
Lease), or, to the extent of the interest therein of Grantor, any sublease or
subsublease, license, concession or other agreement (whether written or oral and
whether now or hereafter in effect) pursuant to which Grantor holds the interest
of lessor, sublessor, subsublessor or licensor, as the case may be, and pursuant
to which any Person is granted a possessory interest in, or right to use or
occupy all or any portion of the Trust Property, and every modification,
amendment or other agreement relating to such lease, ground lease, sublease,
subsublease, license, concession or other agreement entered into in connection
therewith, and every guarantee of the performance and observance of the
covenants, conditions and agreements to be performed and observed by the other
party or parties thereto.
 
"Lenders" shall have the meaning set forth in the Credit Agreement. "Loans"
shall have the meaning set forth in the Credit Agreement.
 
 
 
6.04(g)-A -13

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"Notes" shall have the meaning set forth in the Credit Agreement. "Obligations"
shall have the meaning set forth in the Credit Agreement.
 
"Permitted Liens" shall have the meaning set forth in the Credit Agreement.
"Person" shall have the meaning set forth in the Credit Agreement.
 
"Personalty" means all furniture, furnishings, machinery, goods, inventory,
tools, supplies, appliances, general intangibles, contract rights, accounts
(including, without limitation, the Accounts), accounts receivable, franchises,
reserve accounts, escrows, documents, instruments, chattel paper, claims,
deposits, licenses, trade names, trademarks, symbols, service marks, books,
records, business names, company names, trade secrets, certificates and permits,
and all other personal property of any kind or character whatsoever (as defined
in and subject to the provisions of the Uniform Commercial Code), which are now
or hereafter owned by Grantor and which are related to the Real Property,
together with all accessories, replacements and substitutions thereto or
therefor and the proceeds thereof.
 
"Proceeds" means "proceeds" as such term is defined in the Uniform Commercial
Code as in effect in any relevant jurisdiction or under other relevant law and,
in any event, shall include, but shall not be limited to, (i) any and all
proceeds of any insurance, indemnity, warranty or guaranty payable to Grantor
from time to time, and claims for insurance, indemnity, warranty or guaranty
effected or held for the benefit of Grantor, with respect to any of the
Collateral, (ii) any and all payments (in any form whatsoever) made or due and
payable to Grantor from time to time in connection with any requisition,
confiscation, condemnation, seizure or forfeiture of all or any part of the
Collateral by any Governmental Authority (or any person acting under color of
Governmental Authority) and (iii) any and all other amounts from time to time
paid or payable under or in connection with any of the Collateral.
 
"Products" means ethanol, dried distiller's grains, wet distiller's grains, and
any other form of distiller's grain products marketed by the Grantor and/or
refined therefrom and from time to time located in storage or transportation
facilities in or near the Leased Premises or in railroad cars, tank trucks or
other facilities owned, operated or used by Grantor in connection with the Trust
Property.
 
"Project" shall have the meaning set forth in the Credit Agreement.
 
"Property Agreements" means all material option agreements, purchase and sale
agreements, construction contracts, architect contracts, engineering contracts,
service contracts, utility contracts, equipment leases, equipment maintenance
contracts and
 
 
6.04(g)-A -14

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equipment warranties, purchase contracts, purchase orders and similar agreements
and all amendments thereto now or hereafter relating to any portion of the Trust
Property and entered into or assumed by or on behalf of Grantor.
 
"Real Property" means, collectively the Leased Premises, the Improvements and
the Fixtures.
 
"Receivables" means any "account" as such term is defined in the Uniform
Commercial Code and in any event shall include, but not be limited to, all of
the Grantor's rights to payment for goods sold or leased, or services performed,
by the Grantor, whether now in existence or arising from time to time hereafter,
including, without limitation, rights evidenced by an account, note, contract,
contract rights (including any and all rights to liquidated damage payments),
security agreement, chattel paper, or other evidence of indebtedness or
security, together with (i) all security pledged, assigned, hypothecated or
granted to the Grantor to secure the foregoing, (ii) all the Grantor's right,
title and interest in and to any goods, the sale of which gave rise thereto,
(iii) all guarantees, warranties, endorsements, indemnifications or collateral
on, or of, any of the foregoing, (iv) all powers of attorney for the execution
of any evidence of indebtedness or security or other writing in connection
therewith, (v) all books, correspondence, credit files, records, ledger cards,
invoices, and other papers relating thereto, including without limitation all
similar information stored on a magnetic medium or other similar storage device
and other papers and documents in the possession or under the control of the
Grantor or any computer bureau from time to time acting for the Grantor, (vi)
all evidences of the filing of financing statements and other statements and the
registration of other instruments in connection therewith and amendments
thereto, notices to other creditors or Secured Parties, and certificates from
filing or other registration officers, (vii) all credit information, reports and
memoranda relating thereto, and (viii) all other writings related in any way to
the foregoing.
 
"Rents" means all rents, issues, revenues, income, proceeds, profits, royalties,
security (including all oil and gas or other hydrocarbon substances, earnings,
receipts, revenues, accounts, accounts receivable, security deposits and other
deposits (subject to the prior right of the tenants making such deposits)) and
income, including fixed, additional and percentage rents, operating expense
reimbursements, reimbursements for increases in Taxes, sums paid by tenants to
Grantor to reimburse Grantor for amounts originally paid or to be paid by
Grantor or Grantor's agents or affiliates for which such tenants were liable,
as, for example, tenant improvements costs in excess of any work letter, lease
takeover costs, moving expenses and tax and operating expense pass-throughs for
which a tenant is solely liable, parking, maintenance, common area, tax,
insurance, utility and service charges and contributions, deficiency rents and
liquidated damages, and other benefits now or hereafter derived from any portion
of the Real Property or the use, enjoyment, development, operation, ownership or
occupancy
 
 
 
6.04(g)-A -15

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thereof and all cash or security deposits, advance rentals, and all deposits or
payments of a similar nature relating thereto, now or hereafter, including
during any period of redemption, derived from the Real Property or any other
portion of the Trust Property, in each case pursuant to the Leases, and all
proceeds from the cancellation, surrender, sale or other disposition of the
Leases and other benefits paid or payable and to become due or payable to
Grantor in respect of the use, occupation, enjoyment, development, operation or
ownership of any portion or portions of the Trust Property pursuant to the
Leases.
 
"Security Agreement" shall have the meaning set forth in the Credit Agreement.
 
"Senior Secured Parties" shall have the meaning set forth in the Credit
Agreement.
 
"Security Documents" shall have the meaning set forth in the Credit Agreement.
"Taxes" shall have the meaning set forth in Section 2.1(h) hereof.
 
"Transfer" shall have the meaning set forth in Section 2.1(i) hereof.
 
"Trust Deed" means this Leasehold Trust Deed, Line of Credit Instrument,
Security Agreement, Financing Statement, Fixture Filing and Assignment of
Leases, Rents and Security Deposits, as the same may be amended, restated,
replaced, supplemented or otherwise modified from time to time.
 
"UCC Collateral" shall have the meaning set forth in Section 5.1 hereof.
 
"Uniform Commercial Code" shall have the meaning set forth in the Granting
Clauses hereof.
 
1.2 Principles of Construction. All references to sections, schedules and
exhibits are to sections, schedules and exhibits in or to this Trust Deed unless
otherwise specified. Unless otherwise specified, the words "hereof," "herein"
and "hereunder" and words of similar import when used in this Trust Deed shall
refer to this Trust Deed as a whole and not to any particular provision of this
Trust Deed. The words and phrases "including," "shall include," "inclusive of
and words and phrases of similar import shall be deemed to be followed by
"without limitation" or "but not limited to." Unless otherwise specified, all
meanings attributed to defined terms herein shall be equally applicable to both
the singular and plural forms of the terms so defined. All persons stated in the
masculine, feminine or neuter gender shall include other genders as appropriate.
 
 
 
6.04(g)-A -16

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ARTICLE II
 
GENERAL RIGHTS OF BENEFICIARY
 
Grantor hereby agrees with Beneficiary that Beneficiary may at any time and from
time to time, without liability therefor, without notice and without affecting
the liability of any person, including, without limitation, Grantor, for the
payment or performance of any indebtedness secured by this Trust Deed, or the
lien of this Trust Deed on the Trust Property or any portion thereof: (i)
release any person liable for the payment of any Obligations, extend the time or
otherwise alter the terms of payment of any Obligations and make compositions or
other arrangements with any debtor in relation thereto, alter, substitute, or
release any portion of the Trust Property or any other collateral securing any
Obligations, and grant such other indulgences as Beneficiary may determine in
its sole discretion; and (ii) consent to the making of any map or plat of the
Real Property, join in granting any easements or creating any restrictions on
the Real Property and join in any extension agreement or any agreement
subordinating the lien or charge of this Trust Deed.
 
ARTICLE III
 
LEASED PREMISES
 
 
3.1 The Port Lease.
 
(a) The Grantor shall: (i) pay all rents, additional rents and other sums
required to be paid by the Grantor as lessee under and pursuant to the
provisions of the Port Lease, (ii) diligently perform and observe all of the
material terms, covenants and conditions of the Port Lease on the part of the
Grantor, as lessee thereunder, to be performed and observed, unless such
performance or observance shall be waived in writing or not required in writing
by the lessor under the Port Lease, to the end that all things shall be done
which are necessary to keep unimpaired the rights of the Grantor, as lessee,
under the Port Lease, (iii) promptly notify the Beneficiary in writing of any
default by the Grantor or lessor under the Port Lease in the performance or
observance of any of the material terms, covenants or conditions on the part of,
respectively, the Grantor or lessor to be performed or observed under the Port
Lease, (iv) promptly notify the Beneficiary of the giving of any notice by the
lessor under the Port Lease to the Grantor (other than notices customarily sent
on a regular basis or notices concerning matters of an immaterial nature) and of
any notice noting or claiming any default by the Grantor in the performance or
observance of any of the material terms, covenants or conditions of the Port
Lease on the part of the Grantor, as lessee thereunder, to be performed or
observed and deliver to the Beneficiary a true copy of each such notice, (v)
promptly notify the Beneficiary in writing of any request made by either party
to the
 
 
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Port Lease for arbitration proceedings pursuant to the Port Lease and of the
institution of any arbitration proceedings, as well as of all proceedings
thereunder, and promptly deliver to the Beneficiary a copy of the determination
of the arbitrators in each such arbitration proceeding, it being acknowledged
and agreed that the Beneficiary shall have the right to participate in such
arbitration proceedings in association with the Grantor or on its own behalf as
an interested party, (vi) furnish to the Beneficiary, within ten (10) days after
demand, proof of payment of all items which are required to be paid by the
Grantor pursuant to the Port Lease, and (vii) not consent to the subordination
of the Port Lease to any mortgage of the fee interest of the lessor in the Trust
Property except such as agreed to by the Beneficiary.
 
(b) The Grantor shall not, without the prior written consent of the Beneficiary,
surrender the leasehold estate created by the Port Lease or terminate or cancel
the Port Lease or modify, change, supplement, alter or amend the Port Lease, in
any material respect, either orally or in writing, and the Grantor hereby
assigns to the Beneficiary, as further security for the payment of the
Obligations and for the performance and observance of the terms, covenants and
conditions of this Trust Deed, all of the rights, privileges and prerogatives of
the Grantor, as lessee under the Port Lease, to surrender the leasehold estate
created by the Port Lease or to terminate, cancel, modify, change, supplement,
alter or amend the Port Lease in any material respect, and any such surrender of
the leasehold estate created by the Port Lease or termination, cancellation,
modification, change, supplement, alteration or amendment of the Port Lease in
any material respect without the prior written consent of the Beneficiary shall
be void and of no force and effect.
 
(c) Supplementing the provisions of subparagraph (b) above, it is understood and
agreed that the Grantor shall not, without the Beneficiary's prior written
consent, elect to treat the Port Lease as terminated under Section 365(h)(1) of
the Bankruptcy Code. Any such election made without the Beneficiary's prior
written consent shall be void. The Grantor hereby unconditionally assigns,
transfers and sets over to the Beneficiary all of the Grantor's claims and
rights to the payment of damages arising under the Bankruptcy Code from any
rejection by the lessor under the Port Lease. The Beneficiary shall have the
right to proceed in its own name or in the name of the Grantor in respect of any
claim, suit, action or proceeding relating to the rejection of the Port Lease,
including, without limitation, the right to file and prosecute, to the exclusion
of the Grantor, any proofs of claim, complaints, motions, applications, notices
and other documents, in any case in respect of such lessor under the Bankruptcy
Code. This assignment constitutes a present, irrevocable and unconditional
assignment of the foregoing claims, rights and remedies, and shall continue in
effect until all of the indebtedness and obligations secured by this Trust Deed
shall have been satisfied and discharged in full. Any amounts received by the
Beneficiary as damages arising out of the rejection of the Port Lease as
aforesaid shall be applied first to all reasonable costs
 
 
 
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and expenses of the Beneficiary (including, without limitation, reasonable
attorneys' fees) incurred in connection with the exercise of any of its rights
or remedies under this paragraph and then shall be applied against the
Obligations in such order, priority and proportion as the Beneficiary shall
determine. If any action, motion or notice shall be commenced or filed in
respect of the Grantor, as lessee under the Port Lease, or all or any portion of
the Trust Property in connection with any case under the Bankruptcy Code, the
Grantor shall give the Beneficiary prompt written notice thereof and the
Beneficiary shall have the option, to the exclusion of the Grantor, exercisable
upon notice from the Beneficiary to the Grantor, to conduct and control any such
litigation with counsel of the Beneficiary's choice. The Beneficiary may proceed
in its own name or in the name of the Grantor in connection with any such
litigation, and the Grantor agrees to execute any and all powers,
authorizations, consents and other documents required by the Beneficiary in
connection therewith. The Grantor shall, upon demand, pay to the Beneficiary all
costs and expenses (including attorneys' fees) paid or incurred by the
Beneficiary in connection with the prosecution or conduct of any such
proceedings. Any such costs or expenses not paid by the Grantor as aforesaid
shall be secured by the lien of this Trust Deed and shall be added to the
Obligations. The Grantor shall not commence any action, suit, proceeding or
case, or file any application or make any motion, in respect of the Port Lease
in any such case under the Bankruptcy Code without the prior written consent of
the Beneficiary. The Grantor shall, immediately after obtaining knowledge
thereof, notify the Beneficiary, by telecopy to the numbers set forth in Section
8.4, of any filing by or against the lessor under the Port Lease of a petition
under the Bankruptcy. Code. The Grantor shall thereafter forthwith give written
notice of such filing to the Beneficiary, setting forth the date of such filing,
the court in which the petition was filed and the relief sought therein. The
Grantor shall promptly deliver to the Beneficiary, following receipt, any and
all notices, summonses, pleadings, applications and other documents received by
the Grantor in connection with any such petition and any proceedings relating
thereto.
 
(d) If the Grantor shall default in the performance or observance of any
material term, covenant or condition of the Port Lease on the part of the
Grantor, as lessee thereunder, to be performed or observed, then, without
limiting the generality of the other provisions of this Trust Deed and without
waiving or releasing the Grantor from any of its obligations hereunder, the
Beneficiary shall have the right, but shall be under no obligation, to pay any
sums and to perform any act or take any action as may be appropriate to cause
all of the terms, covenants and conditions of the Port Lease on the part of the
Grantor, as lessee thereunder, to be performed or observed on behalf of the
Grantor, to the end that the rights of the Grantor in, to and under the Port
Lease shall be kept unimpaired and free from default. If the Beneficiary shall
make any payment or perform any act or take action in accordance with the
preceding sentence, the Beneficiary will notify the Grantor of the making of any
such payment, the performance of any such
 
 
6.04(g)-A -19

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act, or the taking of any such action. All sums so paid by the Beneficiary and
all costs and expenses incurred by the Beneficiary in connection with the
performance of any such act shall be paid by the Grantor to the Beneficiary upon
demand with interest at the Default Rate from the date of the payment or
incurrence thereof, and the same shall be deemed to be secured by this Trust
Deed and shall be a lien on the Trust Property prior to any right, title to,
interest in or claim upon the Trust Property attaching subsequent to the lien of
this Mortgage. In any such event, subject to the rights, if any, of lessees and
other occupants under the Leases, the Beneficiary and any person designated by
the Beneficiary shall have, and are hereby granted, the right to enter upon the
Trust Property at any time and from time to time for the purpose of taking any
such action. If the lessor under the Port Lease shall deliver to the Beneficiary
a copy of any notice of default sent by said lessor to the Grantor, as lessee
under the Port Lease, such notice shall constitute full protection to the
Beneficiary for any action taken or omitted to be taken by the Beneficiary, in
good faith, in reliance thereon.
 
(e) Upon the occurrence and during the continuation of an Event of Default, the
Grantor hereby irrevocably appoints the Beneficiary its true and lawful
attorney-in-­fact in its name or otherwise to do any and all acts and to execute
any and all documents which in the reasonable opinion of the Beneficiary may be
necessary or desirable to preserve any rights of the Grantor in, to or under the
Port Lease, or any occupancy lease, license or concession, including, without
limitation, the right (but not the obligation) to cure any defaults of the
Grantor as lessee under the Port Lease, preserve any rights of the Grantor
whatsoever in respect of any part of the Trust Property or to execute an
extension or renewal of the Port Lease as hereinafter set forth. The Grantor
shall, within twenty (20) days of request by the Beneficiary, use its
commercially reasonable efforts to obtain from the lessor under the Port Lease
such certificates of estoppel with respect to compliance by the Grantor with the
terms of the Port Lease as may be requested by the Beneficiary. The Grantor
shall exercise each individual option, if any, to extend or renew the term of
the Port Lease upon demand by the Beneficiary made at any time at least six (6)
months prior to the last day upon which any such option may be exercised.
 
(f) The generality of the provisions of this paragraph relating to the Port
Lease shall not be limited by other provisions of this Trust Deed, or any other
agreement between the Beneficiary and the Grantor, setting forth particular
obligations of the Grantor which are also required of the Grantor as tenant
under the Port Lease.
 
 
3.2 New Lease with Beneficiary. If the Port Lease shall be terminated prior to
the natural expiration of its term due to an event of default thereunder, and if
pursuant to any provision of the Port Lease, the Beneficiary or its designee
shall acquire from the lessor under the Port Lease a new lease of the Leased
Premises, the Grantor shall have no right, title or interest in or to such new
lease or the leasehold estate created thereby, or renewal privileges therein
contained.
 
 
 
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3.3 No Merger of Fee and Leasehold Estates. So long as any portion of the
Obligations shall remain unpaid, and unless the Beneficiary shall otherwise
consent, the fee title to the Leased Premises and the leasehold estate therein
created pursuant to the provisions of the Port Lease shall not merge, but shall
always be kept separate and distinct, notwithstanding the union of such estates
in the Grantor or in any other person, by purchase, operation of law or
otherwise. If the Beneficiary shall acquire the fee title to the Leased Premises
and the leasehold estate therein created pursuant to the provisions of the Port
Lease, by foreclosure of this Trust Deed or otherwise, such estates shall not
merge as a result of such acquisition and shall remain separate and distinct for
all purposes after such acquisition unless and until the Beneficiary shall elect
to merge such estates. Without limitation or derogation of the foregoing, if the
Grantor acquires the fee interest (including any reversionary interest) in the
Leased Premises or any portion thereof (including, without limitation, pursuant
to a conveyance of such fee interest pursuant to the Port Lease), or any other
interest in the Premises or any portion thereof, the lien of this Trust Deed
shall, ipso facto, without the necessity of any further assignment, mortgage or
conveyance, simultaneously with such acquisition, be spread to cover said fee or
other interest and, as so spread, shall be prior to the lien of any mortgage
placed on said fee or other interest subsequent to the date of this Trust Deed.
Without limitation or derogation of the foregoing sentence, the Grantor
nevertheless agrees to execute all instruments and documents which the
Beneficiary may reasonably require to ratify, confirm and further evidence the
Beneficiary's lien on the fee interest.
 
ARTICLE IV
 
ABSOLUTE ASSIGNMENT OF LEASES AND RENTS
 
 
4.1 Absolute Assignment of Leases and Rents. Grantor absolutely and
unconditionally assigns, transfers and sets over to Beneficiary all right, title
and interest in and to all Rents and all other right, title and interest of
Grantor created under or by virtue of any and all Leases and, with respect to
the foregoing:
 
(a) Beneficiary grants to Grantor a license to collect, subject to the
provisions herein, all Rents as they respectively become due, but not more than
thirty (30) days in advance, and to enforce the agreements of the Leases, so
long as an Event of Default has not occurred and is continuing;
 
(b) This absolute and present assignment shall be fully operative without any
further action on the part of Grantor or Beneficiary and, specifically,
Beneficiary shall be entitled, at its sole option, to all Rents whether or not
Beneficiary takes possession of the Trust Property, including, without
limitation, all Rents in Grantor's possession or control. Upon the occurrence
and during the continuation of an Event of Default and whether before or after
the institution of legal proceedings to foreclose this Trust Deed by action
 
 
 
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in any court or by exercise of the power of sale herein contained or before or
after sale thereunder or during any period of redemption, Beneficiary, without
regard to waste, adequacy of the security for the Obligations secured by this
Trust Deed or the solvency of Grantor, may revoke the license granted Grantor
hereunder to collect the Rents, and may, at its option, without notice and with
or without taking possession of or entering the Trust Property, either: (i) in
person or by agent, with or without any action or proceeding, (A) enter upon,
take possession of, manage and operate the Trust Property or any part thereof,
in its own name or in the name of Grantor (provided, however, such entering upon
and taking possession of the Trust Property shall not be a condition precedent
or limitation of Beneficiary's right to collect the Rents); (B) give, or require
Grantor to give, notice to any or all tenants under any Leases authorizing and
directing the tenants to pay such Rents to Beneficiary; (C) sue for or otherwise
collect all of the Rents (including those past due and unpaid or which are in
Grantor's possession or control at the time of such Event of Default) and apply
the Rents as hereinafter provided; (D) enforce the payment of the Rents and
exercise all of the rights of the landlord under the Leases and all of the
rights of Beneficiary hereunder; (E) cancel, enforce or modify the Leases, and
fix or modify Rents; (F) do any acts which Beneficiary deems proper to protect
the security; (G) take all steps which may be desirable in Beneficiary's
judgment to complete any unfinished construction, and to operate and manage the
Trust Property; and (H) perform such other reasonable acts or repairs or
protections as may be reasonably necessary or proper in Beneficiary's sole
judgment to conserve the value thereof; or (ii) apply for the appointment of a
receiver in accordance with applicable Law, which receivership Grantor hereby
consents to, who shall collect the Rents, and all other income of any kind;
manage the Trust Property so to prevent waste; execute Leases within or beyond
the period of receivership, perform any of the other activities set forth in
Section 4.1(b)(i) above and perform the other terms and conditions contained in
this Trust Deed, the other Financing Documents and apply the Rents as
hereinafter provided. The entering upon and taking of possession of the Trust
Property, the appointment of a receiver, and/or the collection and application
of the Rents shall not cure or waive any Event of Default or notice of default
hereunder or invalidate any act done pursuant to such notice. The purchaser at
any foreclosure sale, including Beneficiary, shall have the right, at any time
and without limitation as provided to advance money to any receiver appointed
hereunder to pay any part or all of the items which the receiver would otherwise
be authorized to pay if cash were available from the Trust Property and the sum
so advanced, with interest at the Default Rate, shall be a part of the sum
required to be paid to redeem from any judicial foreclosure sale, in each case
to the fullest extent permitted by applicable Law. The rights hereunder shall in
no way be dependent upon and shall apply without regard to whether the Trust
Property is in danger of being lost, materially injured or damaged or whether
the Trust Property is adequate to discharge the Obligations secured by this
Trust Deed.
 
 
 
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(c) Any Rents collected pursuant to the terms of Section 4.1(b) above shall be
applied in the following order: (i) to payment of all fees of any receiver
appointed hereunder; (ii) to payment when due of prior or current real estate
taxes or special assessments with respect to the Trust Property or, if this
Trust Deed so requires, to the periodic escrow for payment of real estate taxes
or special assessments then due; (iii) to payment when due of insurance premiums
of the type required by this Trust Deed or, if this Trust Deed so requires, to
the periodic escrow for the payment of insurance premiums then due; and (iv) to
payment of all expenses for normal maintenance of the Trust Property. Any Rents
remaining after application of the above items shall be applied to the
Obligations secured by this Trust Deed on a monthly basis. If the Trust Property
shall be foreclosed and sold pursuant to a judicial or non-judicial foreclosure
sale, then in such event, the Rents, after application first to the items set
forth in Section 4.1(c)(i) through (iv) above shall be applied, to the fullest
extent permitted by Law, as follows:
 
(A) if Beneficiary is the purchaser at the foreclosure sale, the Rents shall be
paid to Beneficiary to be applied to the extent of any deficiency remaining
after the sale, the balance to be retained by Beneficiary, and if the Trust
Property be redeemed by Grantor or any other party entitled to redeem, to be
applied as a credit against the redemption price with any remaining excess Rents
to be paid to Grantor, provided, that if the Trust Property shall not be
redeemed, all Rents shall belong to Beneficiary, whether or not a deficiency
exists; or
 
(B) if Beneficiary is not the purchaser at the foreclosure sale, the Rents shall
be paid to Beneficiary to be applied first, to the extent of any deficiency
remaining after the sale, the balance to be retained by the purchaser, and if
the Trust Property be redeemed by Grantor or any other party entitled to redeem,
the Rents shall be applied as a credit against the redemption price with any
remaining excess Rents to be paid to Grantor; provided, that if the Trust
Property shall not be redeemed, any remaining excess Rents shall be paid first,
to the purchaser at the foreclosure sale in an amount equal to the interest
accrued upon the sale price pursuant to Oregon law (if any), then to Beneficiary
to the extent of any deficiency remaining unpaid and the remainder to the
purchaser.
 
 
 
 
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(d) Notwithstanding the right to collect the Rents, following the occurrence and
during the continuation of an Event of Default, Grantor agrees that Beneficiary,
and not Grantor, shall be and be deemed to be the creditor of each tenant with
respect to assignments for the benefit of creditors and bankruptcy, arrangement,
reorganization, insolvency, dissolution or receivership proceedings affecting
such tenant, but without obligation on the part of Beneficiary, however, to file
or make timely filings of claims in such proceedings or otherwise to pursue
creditor's rights therein.
 
(e) Grantor irrevocably consents that the tenant(s) under the Leases, upon
demand and notice from Beneficiary to such tenant(s) of an Event of Default,
shall pay all Rents under the Leases to Beneficiary without liability of the
tenant(s) for the determination of the actual existence of any Event of Default
claimed by Beneficiary. Grantor hereby irrevocably authorizes and directs the
tenant(s), upon receipt of any notice of Beneficiary stating that an Event of
Default exists, to pay to Beneficiary the Rents due and to become due under the
Leases. Grantor agrees that the tenant(s) shall have the right to rely upon any
such notices of Beneficiary and that tenant(s) shall pay such Rents to
Beneficiary, without any obligation or without any right to inquire whether such
Event of Default actually exists and notwithstanding any claim of or notice by
Grantor to the contrary. Grantor shall have no claim against tenant(s) for any
Rents paid by such tenant(s) to Beneficiary;
 
(f) Beneficiary shall have the right to assign Beneficiary's right, title and
interest in the Leases to any subsequent holder of this Trust Deed and to any
person acquiring title to any of the Real Property through foreclosure or
otherwise. After Grantor shall have been barred and foreclosed of all right,
title, interest in the Leased Premises, no assignee of Grantor's interest in the
Leases shall be liable to account to Grantor for the Rents thereafter accruing;
 
(g) Nothing herein contained shall be construed to bind Beneficiary to the
performance of any of the terms or provisions contained in the Leases, or
otherwise to impose any obligation on Beneficiary whatsoever. Prior to actual
entry and taking possession of the Real Property by Beneficiary, this assignment
shall not operate to make Beneficiary a "mortgagee-in-possession" or to place
any responsibility for the control, care, management, or repair of the Real
Property upon Beneficiary;
 
(h) The Leases shall remain in full force and effect irrespective of any merger
of the interest of the lessor and any tenant thereunder. Grantor shall, at the
request of Beneficiary, execute such further assignments to Beneficiary of all
Leases and Rents, as Beneficiary shall reasonably require, and provide to
Beneficiary true and correct copies of all Leases and documents and instruments,
executed in connection therewith; and
 
(i) It is the expressed intention of Grantor and Beneficiary that this
 
 
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Section 4.1 establish an absolute transfer and assignment of the Leases and
Rents, and is not intended or given as additional security for the Obligations.
 
ARTICLE V
 
SECURITY AGREEMENT
 
5.1 Rights to UCC Collateral under the Uniform Commercial Code. This Trust Deed
is both a real property deed of trust and a "security agreement" within the
meaning of the Uniform Commercial Code. The Trust Property includes both real,
leased and personal property and all other rights and interests, whether
tangible or intangible in nature, of Grantor in the Trust Property. Grantor, by
executing and delivering this Trust Deed, has granted and does hereby grant to
Beneficiary as security for the Obligations, a continuing first priority
security interest in the Trust Property to the full extent that the Trust
Property may be subject to the Uniform Commercial Code (said portion of the
Trust Property so subject to the Uniform Commercial Code, the "UCC Collateral").
If an Event of Default shall occur and be continuing, Beneficiary, in addition
to any other rights and remedies which it may have, shall have, and may exercise
immediately and without demand, any and all rights and remedies granted to a
secured party under the Uniform Commercial Code, including the right to take
possession of the UCC Collateral or any part thereof, and to take such other
measures as Beneficiary may deem necessary for the care, protection and
preservation of the UCC Collateral. Upon request or demand of Beneficiary,
Grantor shall, at its expense, assemble the UCC Collateral and make it available
to Beneficiary at a convenient place acceptable to Beneficiary. Grantor shall
pay to Beneficiary on demand any and all expenses, including legal expenses and
attorneys' fees, incurred or paid by Beneficiary in protecting its interest in
and to the UCC Collateral and in enforcing its rights hereunder with respect to
the UCC Collateral. Any notice of sale, disposition or other intended action by
Beneficiary with respect to the UCC Collateral sent to Grantor in accordance
with the provisions hereof at least fifteen (15) Business Days prior to such
action, shall, except as otherwise provided by applicable Law, constitute
reasonable notice to Grantor. The proceeds of any disposition of the UCC
Collateral, or any part thereof, may, except as otherwise required by applicable
Law, be applied by Beneficiary to the payment of the Obligations in such
priority and proportions set forth in the Credit Agreement. Grantor's (the
debtor's) address and principal place of business and the address of Beneficiary
(the secured party) are as set forth in Section 8.4 hereof.
 
5.2 Fixture Filing Financing Statements. Portions of the Trust Property are
goods that are or are to become fixtures. The address of Grantor (the debtor)
and the address of Beneficiary (the secured party) are as set forth in Section
8.4 hereof. Port of Morrow is the record owner of the Leased Premises.
Information concerning the security interest created by this Trust Deed may be
obtained from the Beneficiary, as secured party, at its
 
 
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address set forth in Section 8.4 hereof. The organizational number of Grantor is
DE4114340. This document covers goods that are or are to become fixtures.
 
ARTICLE VI
 
REPRESENTATIONS OF GRANTOR
 
6.1 Representations and Warranties. Grantor represents, covenants and warrants
that:
 
(a) all Improvements now or hereafter located on the Trust Property are, or will
be, located entirely within the boundaries of the Trust Property or on property
in which Grantor now or hereafter possesses a valid interest;
 
(b) no portion of the Trust Property is being used or occupied as the personal
residence of Grantor and no residential units are located on the Trust Property;
and
 
(c)  Grantor is not using the Trust Property for farming operations.
 
ARTICLE VII
 
DEFAULT AND FORECLOSURE
 
7.1 Remedies. Following the occurrence and during the continuation of an Event
of Default, Trustee and/or Beneficiary may, at Beneficiary's election, take such
action permitted at law or in equity, without notice or demand, as it deems
advisable to protect and enforce its rights and the rights of the other Senior
Secured Parties against Grantor and in and to the Trust Property, in accordance
with the requirements of applicable Law. Without limitation of the foregoing,
Beneficiary may take any one or more of the following actions, each of which may
be pursued concurrently or otherwise, at such time and in such order as
Beneficiary may determine in its sole discretion, without impairing or otherwise
affecting the other rights and remedies of Beneficiary and without impairing any
notice of default or election to cause the Trust Property to be sold or any sale
proceeding predicated thereon:
 
(a) demand, collect or realize upon all or any part of the Trust Property and
assemble or require Grantor to assemble all or any part of the Trust Property;
 
(b) commence, appear in or defend any action or proceeding purporting to affect
all or any part of the Trust Property or the interests, rights, powers or duties
of any Senior Secured Party therein, whether brought by or against Grantor,
Beneficiary or any Senior Secured Party;
 
(c) pay, purchase, contest or compromise any claim, debt, lien, charge or
 
 
 
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encumbrance which in the reasonable judgment of Beneficiary may adversely affect
the Trust Property or the interest, rights, powers or duties of any Senior
Secured Party therein;
 
(d) in such manner and to such extent as Beneficiary may deem necessary to
protect the Trust Property or the interests, rights, powers or duties of any
Senior Secured Party therein, Beneficiary may by itself, its agents or
attorneys, enter into and upon the Trust Property or any part thereof or any
other property at which the Trust Property may be located without being deemed a
"mortgagee-in-possession" and take and hold exclusive possession of all or any
part of the Trust Property (which Grantor agrees to surrender) and exclude
Grantor from the Trust Property, and with or without the appointment of a
receiver, whether appointed pursuant to Section 7.1(j) hereof or otherwise, (i)
operate and manage the Trust Property or any part thereof either itself or by
other Persons, (ii) rent and lease the same, (iii) perform such acts of repair
or protection as may be necessary or proper to conserve the value of the Trust
Property, (iv) make such useful additions, alterations, betterments and
improvements to the Trust Property as Beneficiary may deem advisable, (v)
collect any and all income, Rents, issues, profits and proceeds from the Trust
Property, the same being hereby assigned and transferred to Beneficiary, and
(vi) from time to time apply or accumulate such income, Rents, issues, profits
and proceeds in such order and manner as Beneficiary shall determine, it being
understood that the collection or receipt of income, Rents, issues, profits or
proceeds from the Trust Property after an Event of Default and election to cause
the Trust Property to be sold under and pursuant to the terms of this Trust Deed
shall not affect or impair any Event of Default or election to cause the Trust
Property to be sold or any sale proceedings predicated thereon, but such
proceedings may be conducted and sale effected notwithstanding the collection or
receipt of any such income, Rents, issues, profits and proceeds;
 
(e) proceed by suit or suits at law or in equity or by any other appropriate
proceedings or remedy to enforce payment of the Obligations or the performance
of any other term hereof or any other right and the Grantor hereby authorizes
and fully empowers the Beneficiary to request the Trustee to foreclose this
Trust Deed by action in any court or by exercise of the power of sale contained
herein or by advertisement with full authority and power to sell the Trust
Property at public auction and convey the same to the purchaser in fee simple,
either in one parcel or separate lots and parcels, all in accordance with and in
the manner prescribed by applicable Law, and out of the proceeds arising from
sale and foreclosure to retain the principal and interest due on the Loans and
the other Obligations together with all such sums of money as the Trustee or
Beneficiary shall have expended or advanced pursuant to this Trust Deed or
pursuant to statute together with interest thereon as herein provided and all
costs and expenses of such non-judicial or judicial foreclosure, including
lawful attorneys' fees, with the balance, if any, to be paid to the persons
entitled thereto by law. In the event of any non-judicial or
 
 
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judicial foreclosure sale by Beneficiary, Grantor shall be deemed a tenant
holding over and shall forthwith deliver possession to the purchaser or
purchasers at such sale or be summarily dispossessed according to provisions of
Law applicable to tenants holding over.
 
Without limiting the foregoing, Trustee may and upon the request of Beneficiary
shall, elect to cause the Trust Property or any part thereof to be sold as
follows:
 
(i) In connection with any sale or sales hereunder, Trustee shall be entitled to
elect to treat any of the Trust Property which consists of a right in action or
which is property that can be severed from the Real Property covered hereby or
any Improvements without causing structural damage thereto as if the same were
personal property, and dispose of the same in accordance with applicable Law,
separate and apart from the sale of Real Property. Where the Trust Property
consists of Real Property and Personalty, whether or not such Personalty is
located on or within the Real Property, Trustee shall be entitled to elect to
exercise rights and remedies against any or all of the Real Property and
Personalty in such order, at such times and in such manner as is now or
hereafter permitted by applicable Law;
 
(ii) Trustee shall be entitled to elect to proceed against any or all of the
Real Property or Personalty in any manner permitted under applicable Law; and if
Trustee so elects pursuant to applicable Law, the power of sale herein granted
shall be exercisable with respect to all or any of the Real Property and
Personalty, as designated by Trustee, and Trustee is hereby authorized and
empowered to conduct any such sale of any Real Property and Personalty in
accordance with the procedures applicable to Real Property;
 
(iii) If the Trust Property consists of several lots, parcels or items of
property, Trustee, subject to applicable Law, may and upon the request of
Beneficiary shall, (A) designate the order in which such lots, parcels or items
shall be offered for sale or sold, or (B) elect to sell such lots, parcels or
items through a single sale, or through two or more successive sales, or in any
other manner Trustee designates. Any person, including Grantor or Beneficiary,
but excluding Trustee, may purchase at any sale hereunder. Should Trustee desire
that more than one sale or other disposition of the Trust Property be conducted,
Trustee shall, subject to applicable Law, cause such sales or dispositions to be
conducted simultaneously, or successively, on the same day, or at such different
days or times and in such order as Trustee may designate, and no such sale shall
terminate or otherwise affect the lien and security title of this Trust Deed on
any part of the Trust Property not sold until all the Obligations have been paid
in full. In the event Trustee elects to dispose of the Trust Property through
more than one
 
 
 
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sale, Grantor agrees to pay the costs and expenses of each such sale and of any
judicial or non-judicial proceedings wherein such sale may be made;
 
(iv) Trustee may and upon the request of Beneficiary shall, from time to time
postpone or adjourn any sale by it to be made under or by virtue of this Trust
Deed by announcement at the time and place appointed for such sale or for such
adjourned sale or sales; and, except as otherwise provided by any applicable
provision of Law, Trustee may and upon the request of Beneficiary shall, without
further notice or publication, make such sale at the time and place to which the
same shall be so adjourned, or the Trustee may and upon the request of
Beneficiary shall, give a new notice of sale;
 
(v) Upon any sale made under or by virtue of this Section 7.1(e)  (whether made
under the power of sale herein granted or under or by virtue of judicial
proceedings or of a judgment or decree of foreclosure and sale), Beneficiary may
bid for and acquire the Trust Property or any part thereof and in lieu of paying
cash therefor may make settlement for the purchase price by crediting upon the
Obligations the net sales price after deducting therefrom the expenses of the
sale and the costs of the action and any other sums which Beneficiary is
authorized to deduct under this Trust Deed, or other Financing Document;
 
(vi) No recovery of any judgment by Beneficiary and no levy of an execution
under any judgment upon the Trust Property or upon any other property of Grantor
shall affect in any manner or to any extent, the Lien of this Trust Deed upon
the Trust Property or any part thereof, or any Liens, titles, rights, powers or
remedies of Trustee and/or Beneficiary hereunder, under any other Financing
Document, but such Liens, titles, rights, powers and remedies of Trustee and/or
Beneficiary shall continue unimpaired as before;
 
(vii) Grantor agrees, to the fullest extent permitted by Law, that upon the
occurrence and during the continuation of an Event of Default, neither Grantor
nor anyone claiming through or under Grantor shall or will set up, claim or seek
to take advantage of any appraisement, valuation, stay, extension, homestead,
exemption or redemption laws now or hereafter in force, in order to prevent or
hinder the enforcement or judicial or non-judicial foreclosure of this Trust
Deed, or the absolute sale of the Trust Property, or the final and absolute
putting into possession thereof, immediately after such sale, of the purchasers
thereat, and Grantor, for itself and all who may at any time claim through or
under it, hereby waives to the fullest extent that it may lawfully so do, the
benefit of all such laws, and any and all right to have the assets comprised in
the security intended to be created hereby marshaled upon any judicial or
non-judicial foreclosure of the Lien
 
 
 
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hereof; and
 
(viii) Trustee may with and upon the request of Beneficiary shall, foreclose,
this Trust Deed subject to the rights of any tenants of the Trust Property, and
the failure to make any such tenants parties to any such foreclosure proceedings
and to foreclose such tenants' rights will not be, nor be asserted to be by
Grantor, a defense to any proceedings instituted by Trustee and/or Beneficiary
to collect the sums secured hereby.
 
(f) take over and direct collection of the Rents, the Proceeds and the
Receivables that are included in the Trust Property and the proceeds thereof,
give notice of the lien of this Trust Deed upon the Rents, the Proceeds and the
Receivables and the proceeds thereof to any or all Persons obligated to Grantor
thereon, direct such Persons to make payment of all moneys paid or payable
thereon directly to Beneficiary (and, at the request of Beneficiary, Grantor
shall indicate on all billings that payments thereon are to be made to
Beneficiary) and give any Person so notified and directed the receipt of
Beneficiary for any such payment as full release for the amount so paid;
 
(g) take control of any and all of the Rents, Proceeds and Receivables,
accounts, contractual and other rights that are included in the Trust Property
and proceeds arising from any such contractual and other rights, and enforce
collection, either in the name of Beneficiary or in the name of Grantor, of any
or all of the Rents, Proceeds and Receivables, accounts, contractual and other
rights that are included in the Trust Property and proceeds thereof by suit or
otherwise, and receive, surrender, release or exchange all or any part thereof
or compromise, settle, extend or renew (whether or not longer than the original
period) any indebtedness thereunder;
 
(h) endorse in the name of Grantor any instrument, howsoever received by
Beneficiary, representing Trust Property, or proceeds of any of the Trust
Property;
 
(i) subject to the provisions of Article V hereof, exercise all the rights and
remedies granted to a secured party under Article 9 of the Uniform Commercial
Code in effect in the jurisdiction where the Trust Property is located and all
other rights and remedies given to Beneficiary by this Trust Deed or any other
Financing Document otherwise available at law or in equity; and
 
(j) to the fullest extent permitted by applicable Law, without further notice to
Grantor, as a matter of right without notice and without giving bond and without
regard to the solvency or insolvency of Grantor, whether waste has occurred or
is occurring to the Trust Property, value of the Trust Property or adequacy of
the security of the Trust Property, to apply to any court having jurisdiction
for the appointment of a receiver or receivers for the Trust Property, and
Grantor does hereby irrevocably consent to such
 
 
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appointment. Notwithstanding the foregoing, Grantor hereby waives any right to
require appointment of a receiver.
 
Trustee and/or Beneficiary shall not be under any obligation to make any of the
payments or do any of the acts referred to in this Section 7.1 and, except as
otherwise required by law, any of the actions referred to in this Section 7.1
may be taken irrespective of whether any election to sell has been given
hereunder and without regard to the adequacy of the security for the
Obligations. To the fullest extent permitted by applicable Law, Grantor hereby
expressly waives any and all rights of redemption from sale under any order or
judgment of judicial foreclosure of the Lien of this Trust Deed on behalf of
Grantor and each and every person acquiring any interest in or title to the
Trust Property subsequent to the date of this Trust Deed and on behalf of any
other Persons. The reasonable costs and expenses (including reasonable
attorneys' fees and disbursements) of Trustee and/or Beneficiary incurred in
connection with the preservation, collection and enforcement of this Trust Deed
or of the Lien granted hereby, including any amounts advanced by Beneficiary to
protect or preserve the Trust Property, shall be secured by this Trust Deed, and
Grantor covenants and agrees to pay them to the order of Trustee and/or
Beneficiary promptly upon demand.
 
7.2 Rescission of Notice of Event of Default. Beneficiary, at any time before
any sale pursuant to Section 7.1, may rescind, or direct Trustee to rescind, any
notice of an Event of Default and/or of election to cause any portion of the
Trust Property to be sold. The exercise by Beneficiary of such right of
rescission shall not (unless otherwise expressly provided by the terms of such
rescission) constitute a waiver of any Event of Default then existing or
subsequently occurring, shall not impair the right of Beneficiary to cause any
portion of the Trust Property to be sold thereafter and shall not otherwise
affect any provision, agreement, covenant or condition of this Trust Deed, the
Credit Agreement or any other Financing Document or the rights, obligations or
remedies of the parties hereunder or thereunder.
 
7.3 Application of Proceeds.
 
(a) To the fullest extent permitted by applicable Law, all proceeds received by
Beneficiary from the sale or other disposition of any portion of the Trust
Property pursuant to this Trust Deed shall be applied by Beneficiary in
accordance with the provisions of Section 8.08 of the Credit Agreement.
 
(b) If Beneficiary shall be ordered, in connection with any bankruptcy,
insolvency or reorganization of Grantor, to restore or repay to or for the
account of Grantor or its creditors any amount theretofore received under this
Section 7.3, the amount of such restoration or repayment shall be deemed to be
an Obligation so as to place Beneficiary in the position it would have been in
had such amount never been
 
 
 
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received by Beneficiary.
 
7.4 Additional Security. Subject to the provisions of the Credit Agreement, if
Beneficiary at any time shall have a security interest securing any Obligation
in addition to the lien created hereby on the Trust Property, Beneficiary may
enforce the terms of the Security Documents or otherwise realize upon the Trust
Property, at its option, either before or concurrently with the exercise of
remedies as to such other security or after a sale is made of such other
security, and may apply the proceeds to the Obligations without affecting the
status of or waiving any right to exhaust all or any other security, including
the Trust Property, and without waiving any breach or Event of Default or any
right or power whether exercised under the Financing Documents contained in the
Financing Documents or provided for in respect of any such other security.
 
7.5 Remedies Cumulative. The rights, powers and remedies of Beneficiary under
this Trust Deed, or any other security agreement, or any other Financing
Document shall be cumulative and not exclusive of any other right, power or
remedy which Beneficiary may have against Grantor pursuant to this Trust Deed or
the other Financing Documents or existing at law or in equity or otherwise.
Beneficiary's rights, powers and remedies shall be cumulative and concurrent and
may be pursued independently, singly, successively, together or otherwise, at
such time and in such order as Beneficiary may determine to the fullest extent
permitted by law, without impairing or otherwise affecting the other rights and
remedies of Beneficiary permitted by law, equity or contract or as set forth
herein or in the other Financing Documents. No delay or omission to exercise any
remedy, right or power accruing upon an Event of Default shall impair any such
remedy, right or power or shall be construed as a waiver thereof, but any such
remedy, right or power may be exercised from time to time and as often as may be
deemed expedient. A waiver of one Default or Event of Default shall not be
construed to be a waiver of any subsequent Default or Event of Default or to
impair any remedy, right or power consequent thereon. The obtaining of a
judgment or decree on any of the Notes shall not in any manner affect the Lien
of this Trust Deed upon the Trust Property, and any judgment or decree so
obtained shall be secured hereby to the same extent as the Notes are now
secured. In case Beneficiary shall have proceeded to enforce any right or remedy
under this Trust Deed by receiver, entry or otherwise, and such proceeding shall
have been discontinued or abandoned for any reason or shall have been determined
adversely to Beneficiary, then and in every such case, but subject to applicable
Law, Grantor and Beneficiary shall be restored to their former positions and
rights hereunder, and all rights, powers and remedies of Beneficiary shall
continue as if no such proceeding had been taken. In the event of any
foreclosure sale hereunder, all net proceeds shall be available for application
to the Obligations whether or not such proceeds exceed the value of the Trust
Property for recordation, tax, insurance or other purposes. The only limitation
upon the foregoing agreements as to the exercise of Beneficiary's remedies is
that there shall be but one full and complete satisfaction of the Obligations.
 
 
 
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7.6 Attorney-in-Fact. Upon the occurrence and during the continuation of an
Event of Default, Grantor hereby appoints Beneficiary attorney-in-fact of
Grantor for the purpose of carrying out the provisions of this Trust Deed and
taking any action and executing any instrument that Beneficiary may deem
reasonably necessary or advisable to accomplish the purposes hereof, at
Grantor's expense, which appointment is coupled with an interest and cannot be
revoked.
 
7.7 Waiver of Notice. TO THE MAXIMUM EXTENT PERMITTED BY LAW, GRANTOR HEREBY
WAIVES ANY RIGHT GRANTOR MAY HAVE UNDER THE LAWS OF THE STATE OF IN WHICH THE
LEASED PREMISES IS LOCATED OR THE LAWS OF THE UNITED STATES OF AMERICA TO
NOTICE, OTHER THAN EXPRESSLY PROVIDED FOR IN THIS TRUST DEED, THE CREDIT
AGREEMENT OR THE OTHER FINANCING DOCUMENTS, OR TO A JUDICIAL HEARING PRIOR TO
THE EXERCISE OF ANY RIGHT OR REMEDY PROVIDED BY THIS TRUST DEED TO BENEFICIARY,
AND GRANTOR WAIVES GRANTOR'S RIGHTS, IF ANY, TO SET ASIDE OR INVALIDATE ANY SALE
DULY CONSUMMATED IN ACCORDANCE WITH THE PROVISIONS OF THIS TRUST. DEED ON THE
GROUNDS (IF SUCH BE THE CASE) THAT THE SALE WAS CONSUMMATED WITHOUT A PRIOR
JUDICIAL HEARING. GRANTOR FURTHER UNDERSTANDS THAT UPON THE OCCURRENCE AND
DURING THE CONTINUATION OF AN EVENT OF DEFAULT, BENEFICIARY MAY ALSO ELECT ITS
RIGHTS UNDER THE UNIFORM COMMERCIAL CODE AND TAKE POSSESSION OF THE COLLATERAL
AND DISPOSE OF THE SAME BY SALE OR OTHERWISE IN ONE OR MORE PARCELS PROVIDED
THAT AT LEAST FIFTEEN (15) BUSINESS DAYS' PRIOR NOTICE OF SUCH DISPOSITION MUST
BE GIVEN, ALL AS PROVIDED FOR BY THE UNIFORM COMMERCIAL CODE, AS HEREAFTER
AMENDED OR BY ANY SIMILAR OR REPLACEMENT STATUTE HEREAFTER ENACTED. ALL WAIVERS
BY GRANTOR IN THIS PARAGRAPH HAVE BEEN MADE VOLUNTARILY, INTELLIGENTLY AND
KNOWINGLY, AFTER GRANTOR HAS BY GRANTOR'S ATTORNEY BEEN FIRST APPRISED OF AND
COUNSELED WITH RESPECT TO GRANTOR'S POSSIBLE ALTERNATIVE RIGHTS.
 
7.8 Payment of Costs and Expenses. Grantor shall promptly reimburse Beneficiary
and the other Senior Secured Parties for reasonable costs and expenses incurred
under this Trust Deed in accordance with the provisions of the Credit Agreement.
 
7.9 Grantor's Waivers.
 
(a) Grantor has read and hereby approves the Credit Agreement, the other
Financing Documents, and all other agreements and documents relating thereto.
Grantor acknowledges that it has been represented by counsel of its choice to
review this Trust
 
 
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Deed, the Financing Documents, and all other documents relating thereto and said
counsel has explained and Grantor understands the provisions thereof.
 
(b) To the fullest extent permitted by applicable Law, Grantor hereby expressly
waives diligence, demand, presentment, protest and notice of every kind and
nature whatsoever (unless as otherwise required under this Trust Deed) and
waives any right to require Beneficiary or any other Senior Secured Party to
enforce any remedy against any guarantor, endorser or other person whatsoever
prior to the exercise of its rights and remedies hereunder or otherwise. To the
fullest extent permitted by applicable Law, Grantor waives any right to require
Trustee, Beneficiary or any other Senior Secured Party to: (i) proceed or
exhaust any collateral security given or held by Beneficiary or any other Senior
Secured Party in connection with the Obligations; or (ii) pursue any other
remedy in Trustee's, Beneficiary's or any other Senior Secured Party's power
whatsoever.
 
(c) To the fullest extent permitted by applicable Law, until all Obligations
shall have been paid in full, Grantor: (i) shall not have any right of
subrogation to any of the rights of Beneficiary or any other Senior Secured
Party against any guarantor, maker or endorser; (ii) waives any right to enforce
any remedy which Trustee, Beneficiary or other Senior Secured Party now has or
may hereafter have against any other guarantor, maker or endorser; and (iii)
waives any benefit of, and any other right to participate in, any collateral
security for the Obligations or any guaranty of the Obligations now or hereafter
held by Beneficiary or any other Senior Secured Party.
 
(d) Subject to any applicable provisions of the Credit Agreement, Grantor hereby
authorizes and empowers Beneficiary in its sole discretion, without any notice
(except as expressly otherwise provided herein) or demand and without affecting
the lien and charge of this Trust Deed, to exercise any right or remedy which
Beneficiary or any other Senior Secured Party may have available to it,
including, but not limited to, judicial foreclosure, or exercise of rights of
power of sale without judicial action as to any collateral security for the
obligations, whether real, personal or intangible property.
 
(e) To the fullest extent permitted by applicable Law, the Grantor waives all
rights and defenses arising out of an election of remedies by the creditor, even
though that election of remedies, such as nonjudicial foreclosure with respect
to security for a guaranteed obligation, has destroyed the Grantor's rights of
subrogation and reimbursement against the principal by the operation of the laws
and court rules of the State in which the Leased Premises is located.
 
(f) To the full extent permitted by Law, Grantor hereby covenants and agrees
that it shall not at any time insist upon or plead, or in any manner whatsoever
claim or take any advantage of, any stay, exemption or extension law or any
so-called
 
 
 
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"moratorium law" now or at any time hereafter in force, nor claim, take or
insist upon any benefit or advantage of or from any law now or hereafter in
force providing for the valuation or appraisement of the Trust Property, or any
part thereof, prior to any sale or sales thereof to be made pursuant to any
provisions herein contained, or to any decree, judgment or order of any court of
competent jurisdiction; or after such sale or sales claim or exercise any rights
under any statute now or hereafter in force to redeem the property so sold, or
any part thereof, to the extent such covenant and agreement is permitted by
applicable Law, or relating to the marshaling thereof, upon foreclosure sale or
other enforcement hereof. To the full extent permitted by Law, Grantor hereby
expressly waives any and all rights it may have to require that the Trust
Property be sold as separate tracts or units in the event of foreclosure. To the
full extent permitted by Law, Grantor hereby expressly waives any and all rights
of redemption after sale under any order or decree of foreclosure of this Trust
Deed, on its own behalf, on behalf of all Persons claiming or having an interest
(direct or indirect) by, through or under Grantor and on behalf of each and
every Person acquiring any interest in or title to the Real Property subsequent
to the date hereof, it being the intent hereof that any and all such rights of
redemption of Grantor and of all other Persons, are and shall be deemed to be
hereby waived to the full extent permitted by applicable Law. To the full extent
permitted by law, Grantor agrees that it shall not, by invoking or utilizing any
applicable Law or laws or otherwise, hinder, delay or impede the exercise of any
right, power or remedy herein or otherwise granted or delegated to Beneficiary
or any other Senior Secured Party, but shall suffer and permit the exercise of
every such right, power and remedy as though no such law or laws have been or
will have been made or enacted.
 
ARTICLE VIII
 
MISCELLANEOUS
 
8.1 Performance at Grantor's Expense. Except as expressly provided herein or in
the other Financing Documents to the contrary, no portion of the cost and
expense of performing or complying with any of the obligations imposed on
Grantor by this Trust Deed shall be borne by Trustee, Beneficiary or any other
Senior Secured Party, and no portion of such cost and expense shall be, in any
way or to any extent, credited against the aggregate amounts payable by Grantor
pursuant to the Credit Agreement or any other Financing Document.
 
8.2 Beneficiary's Right to Perform the Obligations. If Grantor shall fail,
refuse or neglect to make any payment or to perform any act required of it by
this Trust Deed, or any other Financing Document, then at any time after the
occurrence of any Event of Default or as otherwise expressly permitted by the
terms of the Credit Agreement, or any other Financing Document, without waiving
or releasing any other right, remedy or recourse Beneficiary may have because of
same, Beneficiary may (but shall not be
 
 
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obligated to) make such payment or perform such act for the account of and at
the expense of Grantor. All sums paid by Beneficiary pursuant to this Section
8.2 and all other sums expended by Beneficiary in respect of which it shall be
entitled to indemnity, together with interest thereon from the date of such
payment or expenditure, shall constitute additions to the Obligations, and shall
be secured by this Trust Deed, and Grantor covenants and agrees to pay them to
the order of Beneficiary upon demand.
 
8.3 Survival of Obligations. Except as otherwise provided in the Credit
Agreement, all and every portion of the Obligations shall survive the execution
and delivery of this Trust Deed and the other Financing Documents, the
foreclosure or other exercise of remedies hereunder and the consummation of the
transactions called for therein and herein until the Obligations shall be
satisfied in full. This Trust Deed secures, and until the Obligations shall be
paid and satisfied in full, shall secure the entire amount of the Obligations.
The total amount of the indebtedness secured by this Trust Deed may increase or
decrease from time to time.
 
8.4 Notices. Notices and other communications provided for herein shall be in
writing and shall be delivered by hand or overnight courier service, mailed or
sent by facsimile as follows:
 
(a)   if to Grantor,
 
Pacific Ethanol Columbia, LLC
_______________________
_______________________
 
Attn: __________________
Fax No.: ________________
 
 
(b)   if to Trustee,
Stewart Title Guaranty Company
100 Pine Street, Suite 450
San Francisco, California 94111
Attn: Shelley Norman
Fax No.: 415-986-5973
 
(c)   if to Beneficiary,
 
[________________________________________]
 
 
 
 
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Attn:
Fax No.:
 
All notices and other communications given to any party hereto in accordance
with the provisions of this Trust Deed shall be deemed to have been given on the
date of receipt if delivered by hand or overnight courier service or sent by
facsimile, or on the date five (5) Business Days after dispatch by certified or
registered mail if mailed, in each case delivered, sent or mailed (properly
addressed) to such party as provided in this Section 8.4 or in accordance with
the latest unrevoked direction from such party given in accordance with this
Section 8.4.
 
8.5 Delay not a Waiver. Neither any failure nor any delay on the part of
Beneficiary in insisting upon strict performance of any term, condition,
covenant or agreement, or exercising any right, power, remedy or privilege
hereunder, or under the Notes, or under any other Financing Document, or any
other instrument given as security therefor, shall operate as or constitute a
waiver thereof, nor shall a single or partial exercise thereof preclude any
other future exercise, or the exercise of any other right, power, remedy or
privilege. In particular, and not by way of limitation, by accepting payment
after the due date of any amount payable under this Trust Deed, the Notes, or
any other Financing Document, Beneficiary shall not be deemed to have waived any
right either to require prompt payment when due of all other amounts due under
this Trust Deed, the Notes, or the other Financing Documents, or to declare a
default for failure to effect prompt payment of any such other amount.
 
8.6 Covenants Running with the Land. The Obligations and all obligations
hereunder are intended by the parties to be, and shall be construed as,
covenants running with the Real Property until such Real Property has been
released from the Lien of this Trust Deed.
 
8.7 Intentionally Omitted.
 
8.8 Severability. If any provision of this Trust Deed or the application thereof
to any Person or circumstance, for any reason and to any extent, becomes invalid
or unenforceable, then neither the remainder of this Trust Deed nor the
application of such provision to other Persons or circumstances nor the other
instruments referred to hereinabove shall be affected thereby, but rather shall
be enforced to the greatest extent permitted by applicable Law.
 
8.9 Entire Agreement and Modification. This Trust Deed and the other Financing
Documents contain the entire agreement of the parties hereto and thereto in
respect of the transactions contemplated hereby and thereby, and all prior
agreements among or
 
 
6.04(g)-A -37

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between such parties, whether oral or written, are superseded by the terms of
this Trust Deed and the other Financing Documents.
 
8.10 Governing Law. This Trust Deed shall be governed, construed, applied and
enforced in accordance with the laws of the State of Oregon and applicable laws
of the United States of America.
 
8.11 Limitation on Beneficiary's Responsibility. No provision of this Trust Deed
shall operate to place any obligation or liability for the control, care,
management or repair of the Trust Property upon Trustee, Beneficiary or any
other Senior Secured Party, nor shall it operate to make Trustee, Beneficiary or
any other Senior Secured Party responsible or liable for any waste committed on
the Trust Property by the tenants or any other Person, or for any dangerous or
defective condition of the Trust Property, or for any negligence of any other
Person in the management, upkeep, repair or control of the Trust Property
resulting in loss or injury or death to any tenant, licensee, employee or
stranger. Nothing herein contained shall be construed as constituting
Beneficiary or any other Senior Secured Party "mortgagee in possession."
 
8.12 Headings. The Article and/or Section headings and the Table of Contents
herein are included for convenience of reference only and shall not constitute a
part of this Trust Deed for any other purpose.
 
8.13 Marshalling. Notwithstanding anything herein to the contrary, Grantor will
not: (a) at any time insist upon, or plead, or in any manner whatever claim or
take any benefit or advantage of any stay or extension or moratorium law, any
exemption from execution or sale of the Trust Property or any part thereof,
whenever or wherever enacted, which may affect the covenants and terms of
performance of this Trust Deed; (b) claim, take or insist upon any benefit or
advantage of any law now or hereafter in force providing for the valuation or
appraisal of the Trust Property, or any part thereof, prior to any sale or sales
thereof which may be made pursuant to any provision herein, or pursuant to the
decree, judgment or order of any court of competent jurisdiction; or (c) after
any such sale or sales, claim or exercise any right under any statute heretofore
or hereafter enacted to reinstate the Trust Deed or to redeem the property so
sold or any part thereof. Additionally, Grantor hereby expressly waives all
benefit or advantage of any such law or laws. Grantor, for itself and all who
may claim under it, waives, to the extent that it lawfully may, all right to
have the Trust Property marshaled upon any foreclosure hereof. Beneficiary shall
have the right to determine the order in which any or all portions of the
Obligations are satisfied from the proceeds realized upon the exercise of the
remedies provided herein. Grantor, any party who consents to this Trust Deed and
any party who now or hereafter acquires a lien or security interest in any of
the Trust Property and who has actual or constructive notice hereof hereby
waives any and all right to require the
 
 
6.04(g)-A -38

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marshalling of assets in connection with the exercise of any of the remedies
permitted by applicable Law or provided herein.
 
8.14 Waiver of Jury Trial and Consent to Jurisdiction. GRANTOR HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT
IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY
ARISING OUT OF OR RELATING TO THIS TRUST DEED, ANY OTHER FINANCING DOCUMENT, OR
THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT
OR ANY OTHER THEORY). GRANTOR (i) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (ii) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE
BEEN INDUCED TO ENTER INTO THIS TRUST DEED AND THE OTHER FINANCING DOCUMENTS BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 8.14.
In the event of litigation, this Trust Deed may be filed as a written consent to
a trial by the court. Grantor hereby irrevocably submits to the jurisdiction of
any court of competent jurisdiction located in the state in which any portion of
the Trust Property is located in connection with any proceeding arising out of
or relating to this Trust Deed involving such portion of the Trust Property.
 
8.15 Maximum Indebtedness and Future Advances. This Trust Deed shall secure not
only existing Obligations, but also such future advances, whether such advances
are obligatory or are to be made at the option of Beneficiary or the Senior
Secured Parties or otherwise related to or in connection with the Credit
Agreement, or the other Financing Documents, as are made by Beneficiary and/or
the Senior Secured Parties to Grantor to the same extent as if such future
advances were made on the date of the execution of this Trust Deed, including
(a) any and all additional advances made by Beneficiary or the Senior Secured
Parties to protect or preserve the Trust Property or the Lien hereof on the
Trust Property, or to pay taxes, to pay premiums on insurance on the Trust
Property (whether or not the original Grantor remains the owner of the Trust
Property at the time of such advances and whether or not the original
Beneficiary remains the Collateral Agent); (b) any and all expenses incident to
the collection of the Obligations and the foreclosure hereof by action in any
court or by exercise of the power of sale herein contained; (c) any and all
amounts now owing or which may hereafter be owing by Grantor to Beneficiary,
and/or the Senior Secured Parties pursuant to the Financing Documents, however
and whenever incurred or evidenced, whether direct or indirect, absolute or
contingent, due or to become due, together with any and all renewal or renewals
and extension or extensions of the Obligations; and (d) the full and prompt
payment and performance of any and all obligations or covenants of Grantor to
 
 
6.04(g)-A -39

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Beneficiary and/or the Senior Secured Parties under the terms of any other
agreements, assignments or other instruments now or hereafter evidencing,
securing or otherwise relating to the Obligations, including the Financing
Documents.
 
8.16 Lien Absolute; Multiple Collateral Transaction. Grantor acknowledges that
this Trust Deed, the other Financing Documents, and those documents required by
the Financing Documents together secure the Obligations. Grantor agrees that the
Lien of this Trust Deed and all Obligations shall be absolute and unconditional
and shall not in any manner be affected or impaired by any lack of validity or
enforceability of the Credit Agreement or any other Financing Document, any
agreement with respect to any of the Obligations or any other agreement or
instrument relating to any of the foregoing, and the lien hereof shall not be
impaired by any acceptance by Beneficiary of any security for or guarantees of
any of the Obligations, or by any failure, neglect or omission on the part of
Beneficiary to realize upon or protect any of the Obligations or any collateral
security therefor, including the Financing Documents, or due to any other
circumstance which might otherwise constitute a defense available to, or a
discharge of Grantor in respect of the Obligations or this Trust Deed (other
than the indefeasible payment in full of all the Obligations). The lien hereof
shall not in any manner be impaired or affected by any change in the time,
manner or place of payment of, or in any other term of, all or any of the
Obligations or by any release (except as to the property released), sale,
pledge, surrender, compromise, settlement, nonperfection, renewal, extension,
indulgence, alteration, exchange, modification or disposition of any of the
Obligations or of any of the collateral security therefor, or any amendment or
waiver of or any consent to any departure from the Credit Agreement, or any
other Financing Document or of any guaranty thereof, if any, and Beneficiary
may, in Beneficiary's discretion, foreclose, exercise any power of sale, or
exercise any other remedy available under any or all of the Financing Documents
without first exercising or enforcing any other rights and remedies hereunder.
Such exercise of rights and remedies under any or all of the Financing Documents
shall not in any manner impair the Obligations or the Lien of this Trust Deed,
and any exercise of any rights or remedies hereunder shall not impair the Lien
of any of the other Financing Documents or any rights and remedies of any Senior
Secured Party thereunder. Grantor specifically consents and agrees that
Beneficiary may exercise any rights and remedies hereunder and under the other
Financing Documents separately or concurrently and in any order that Beneficiary
may deem appropriate.
 
8.17 Discharge of Trust Deed. Upon written request of Grantor and upon payment
in full and performance of all of the Obligations, and upon payment in full to
Beneficiary of its fees, costs and expenses incurred or to be incurred thereby,
this Trust Deed shall be discharged and satisfied or, at Grantor's option,
assigned to Grantor or to any other person at Grantor's direction, without
warranty, representation by, or recourse to, Beneficiary (except that
Beneficiary shall be deemed to have represented that Beneficiary has not
assigned or encumbered this Trust Deed). Concurrently with such release and
 
 
6.04(g)-A -40

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satisfaction or assignment of this Trust Deed, Beneficiary, on the written
request and at the expense of Grantor, will execute and deliver such instruments
of conveyance, assignment and release (including appropriate UCC-3 terminations)
prepared by Grantor and as may reasonably be requested by Grantor to evidence
such release and satisfaction, or assignment.
 
8.18 Renewal or Extension of Notes; Substitute Notes. This Trust Deed and all
other instruments evidencing or securing the Notes shall likewise secure any
extension, modification, renewal, substitution or replacement of the Notes and
any term note or term notes which may be executed and delivered in substitution
or replacement for the Notes. The lien of this Trust Deed shall in no manner be
affected by any such extension, modification, renewal, substitution or
replacement.
 
8.19 Conflicts. In the event of any conflict or inconsistency between the terms
of this Trust Deed and those of the Credit Agreement, the terms of the Credit
Agreement shall control. Grantor hereby acknowledges that it was represented by
counsel in connection with the negotiation and drafting of this Trust Deed and
that this Trust Deed and the other Financing Documents shall not be subject to
the principle of construing their meaning against the party which drafted the
same.
 
8.20 Assumption Not a Novation. Beneficiary's acceptance of an assumption of the
obligations of this Trust Deed and the Notes, and the release of Grantor hereof,
shall not constitute a novation.
 
8.21 Acknowledgment of Receipt of Copies of Debt Instrument. Grantor hereby
acknowledges the receipt of a copy of this Trust Deed and the Credit Agreement,
together with a copy of each other agreement, document or instrument executed in
connection with this Trust Deed.
 
8.22 INSURANCE WARNING. UNLESS YOU (GRANTOR) PROVIDE US (BENEFICIARY) WITH
EVIDENCE OF THE INSURANCE COVERAGE AS REQUIRED BY OUR CONTRACT OR LOAN
AGREEMENT, WE MAY PURCHASE INSURANCE AT YOUR EXPENSE TO PROTECT OUR INTEREST.
THIS INSURANCE MAY, BUT NEED NOT, ALSO PROTECT YOUR INTEREST. IF THE COLLATERAL
BECOMES DAMAGED, THE COVERAGE WE PURCHASE MAY NOT PAY ANY CLAIM YOU MAKE OR ANY
CLAIM MADE AGAINST YOU. YOU MAY LATER CANCEL THIS COVERAGE BY PROVIDING EVIDENCE
THAT YOU HAVE OBTAINED PROPERTY COVERAGE ELSEWHERE.
 
YOU ARE RESPONSIBLE FOR THE COST OF ANY INSURANCE PURCHASED BY US. THE COST OF
THIS INSURANCE MAY BE ADDED TO YOUR CONTRACT OR LOAN BALANCE. IF THE COST IS
ADDED TO YOUR
 
 
6.04(g)-A -41

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CONTRACT OR LOAN BALANCE, THE INTEREST RATE ON THE UNDERLYING CONTRACT OR LOAN
WILL APPLY TO THIS ADDED AMOUNT. THE EFFECTIVE DATE OF COVERAGE MAY BE THE DATE
YOUR PRIOR COVERAGE LAPSED OR THE DATE YOU FAILED TO PROVIDE PROOF OF COVERAGE.
 
THIS COVERAGE WE PURCHASE MAY BE CONSIDERABLY MORE EXPENSIVE THAN INSURANCE YOU
CAN OBTAIN ON YOUR OWN AND MAY NOT SATISFY ANY NEED FOR PROPERTY DAMAGE COVERAGE
OR ANY MANDATORY LIABILITY INSURANCE REQUIREMENTS IMPOSED BY APPLICABLE LAW.
 
8.23 USE NOTICE. BEFORE SIGNING OR ACCEPTING THIS INSTRUMENT, THE PERSON
TRANSFERRING FEE TITLE SHOULD INQUIRE ABOUT THE PERSON'S RIGHTS, IF ANY, UNDER
ORS 197.352. THIS INSTRUMENT DOES NOT ALLOW USE OF THE PROPERTY DESCRIBED IN
THIS INSTRUMENT IN VIOLATION OF APPLICABLE LAND USE LAWS AND REGULATIONS. BEFORE
SIGNING OR ACCEPTING THIS INSTRUMENT, THE PERSON ACQUIRING FEE TITLE TO THE
PROPERTY SHOULD CHECK WITH THE APPROPRIATE CITY OR COUNTY PLANNING DEPARTMENT TO
VERIFY APPROVED USES, TO DETERMINE ANY LIMITS ON LAWSUITS AGAINST FARMING OR
FOREST PRACTICES AS DEFINED IN ORS 30.930, AND TO INQUIRE ABOUT THE RIGHTS OF
NEIGHBORING PROPERTY OWNERS, IF ANY, UNDER ORS 197.352.
 
8.24 STATUTE OF FRAUDS NOTICE. UNDER OREGON LAW, MOST AGREEMENTS, PROMISES AND
COMMITMENTS MADE BY US (BENEFICIARY) CONCERNING LOANS AND OTHER CREDIT
EXTENSIONS WHICH ARE NOT FOR PERSONAL, FAMILY OR HOUSEHOLD PURPOSES OR SECURED
SOLELY BY THE BORROWER'S RESIDENCE MUST BE IN WRITING, EXPRESS CONSIDERATION AND
BE SIGNED BY US TO BE ENFORCEABLE.
 
IN WITNESS WHEREOF, Grantor has caused this Trust Deed to be signed by Grantor's
duly authorized representative as of the day and year first above written.
 
GRANTOR:
 
PACIFIC ETHANOL COLUMBIA, LLC
 
 
By: ______________________________
Name:
Title:
 
 
6.04(g)-A -42

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STATE OF ________________   )
                                                             :     ss.:
COUNTY OF ______________   )
 
 
On this ____ day of ______, 2007, before me, a Notary Public in and for the
aforesaid County and State, personally appeared ________________, to me
personally known, who being by me duly sworn, did say that he is
the _______________ of [___________________], the said limited liability
company; that said instrument was signed on behalf of [________________] by
authority of its managers, and that the said ________________________________ of
[____________________], acknowledged the execution of said instrument to be the
voluntary act and deed of said limited liability company, by it and by him
voluntarily executed.
 
 
_____________________________________
Notary Public in and for said County and State
 
Printed Name: ___________________________
 
My Commission Expires: ___________________
 
 
 
 
6.04(g)-A -43

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EXHIBIT A
 
LEASED PREMISES
 
 
 
 
 
6.04(g)-A -44

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EXHIBIT 6.04(g)-B
to Credit Agreement
 
 
[FORM OF PLEDGE AGREEMENT]
 

--------------------------------------------------------------------------------

 
PLEDGE AND SECURITY AGREEMENT
 
 
among
 

 
[__________________],
as Pledgor
 
 
 
[__________________],
as Company
 
 
and
 
 
[__________________],
as Collateral Agent
 
 
 
Dated as of [______], 2007
 
 

--------------------------------------------------------------------------------

This draft document is not a contract or an offer to enter into a contract. Only
the document as executed by the parties hereto will contain the terms that bind
them. Until the document is executed by each of the parties hereto, none of them
intends to be bound hereby.
 
6.04(g)-B - 1

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TABLE OF CONTENTS
 

    Page       ARTICLE I    DEFINITIONS   2       Section 1.01 Defined Terms 2
Section 1.02 Credit Agreement and UCC Definitions 2 Section 1.03 Rules of
Interpretation 2       ARTICLE II   PLEDGE AND GRANT OF SECURITY INTEREST   2  
    Section 2.01  Granting Clause   2 Section 2.02  Delivery of Collateral   3
Section 2.03  Retention of Certain Rights  4 Section 2.04  Obligations
Unconditional   4 Section 2.05  Waiver   5       ARTICLE III  EVENTS OF
DEFAULT   6       Section 3.01 Events of Default   6       ARTICLE IV 
REPRESENTATIONS AND WARRANTIES   6       Section 4.01 Organization; Power;
Compliance with Law and Contractual Obligations  7 Section 4.02 Due
Authorization; Non-Contravention   7 Section 4.03 Validity   7 Section 4.04
Beneficial Ownership; Pledged Equity Interests 7 Section 4.05 Name 7 Section
4.06   Organizational Number  7 Section 4.07  Capital Adequacy; Etc   8      
ARTICLE V  COVENANTS OF PLEDGOR   8       Section 5.01  Defense of Collateral  
8 Section 5.02   Limitation of Liens  8 Section 5.03   No Sale of Collateral  8
Section 5.04  No Impairment of Security  8 Section 5.05  Filing of Bankruptcy
Proceedings   8 Section 5.06   Distributions  9 Section 5.07  Maintenance of
Records 9 Section 5.08  Name; Jurisdiction of Organization 9 Section 5.09 
Amendments to Organizational Documents   9 Section 5.10 Perfection   9 Section
5.11 Information Concerning Collateral  10 Section 5.12 Payment of Taxes   10  
    ARTICLE VI   REMEDIES UPON AN EVENT OF DEFAULT   10       Section 6.01
Remedies Upon an Event of Default   10 Section 6.02 Minimum Notice Period  11
Section 6.03 Sale of Collateral   12

 
6.04(g)-B - 2

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 Section 6.04  Actions Taken by Collateral Agent  12  Section 6.05  Private
Sales  12  Section 6.06  Compliance With Limitations and Restrictions  13
 Section 6.07  No Impairment of Remedies 13       ARTICLE VII  FURTHER
ASSURANCES    13        Section 7.01 Attorney-in-Fact   13  Section 7.02
Delivery of Collateral; Proxy    14  Section 7.03 Place of Business; Location of
Records    14  Section 7.04 Waiver of Transfer Restrictions    14  Section 7.05
The Company's Consent and Covenant  14  Section 7.06 Foreclosure 14  Section
7.07 Waiver of Rights of Subrogation   15  Section 7.08 Application of
Proceeds    15  Section 7.09 Collateral Agent May Perform  15  Section 7.10
Limitation on Duty of Collateral Agent with Respect to the Collateral  15
 Section 7.11 Termination of Security Interest  15       ARTICLE VIII  
MISCELLANEOUS    16       Section 8.01 Amendments, Etc   16 Section 8.02
Applicable Law; Jurisdiction; Etc   16 Section 8.03 Counterparts; Effectiveness
 18 Section 8.04 Delay Not Waiver; Separate Causes of Action  18 Section 8.05
Entire Agreement    18 Section 8.06 Expenses 18 Section 8.07 Headings
Descriptive   18 Section 8.08 Interest    18 Section 8.09 Notices    18 Section
8.10 No Waiver; Cumulative Remedies    19 Section 8.11 Reinstatement  19 Section
8.12 Remedies Cumulative    20 Section 8.13 Rights of Collateral Agent    20
Section 8.14 Severability    20 Section 8.15  Successions and Assignments   20
Section 8.16  Survival of Provisions  20 Section 8.17   Third Party Rights    21
Section 8.18  Time  21 Section 8.19   Waiver of Consequential Damages, Etc   21
Section 8.20  Waiver of Litigation Payments 21 Section 8.21   [Scope of
Liability]  21

 
6.04(g)-B - 3

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EXHIBITS
 
Exhibit A        -        Irrevocable Proxy
Exhibit B         -       Transfer Document
Exhibit C         -       Schedule of Security Filings
Schedule I      -       Description of Pledged Equity Interests
 
 
6.04(g)-B - 4

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PLEDGE AND SECURITY AGREEMENT
 
This PLEDGE AND SECURITY AGREEMENT, dated as of [___________], 2007 (this
"Agreement") is entered into by and among [___________], a [limited liability
company] organized and existing under the Laws of the State of [Delaware] (the
"Pledgor"), [___________], a limited liability company organized and existing
under the Laws of the State of Delaware, (the "Company"), and [___________], in
its capacity as collateral agent (together with its successors, designees and
assigns in such capacity, the "Collateral Agent") for the Senior Secured
Parties.
 
RECITALS
 
WHEREAS, the Company has entered into that certain Credit Agreement, dated as of
[___________], 2007 (as amended, amended and restated, restated, supplemented or
otherwise modified from time to time, the "Credit Agreement") among the Pledgor,
[___________], a Delaware limited liability company ("[___________]"),
[___________], a Delaware limited liability company ("[___________]"),
[___________], a Delaware limited liability company ("[___________]"),
[___________], a Delaware limited liability company ("[___________]"),
[___________], a Delaware limited liability company ("[___________]"), and,
together with [___________], [the Pledgor], [___________], [___________],
and [___________], the "Borrowers"), Pacific Holding as the Borrowers' Agent,
each of the Lenders from time to time party thereto, the Administrative Agent,
as collateral agent for the Lenders, [___________], as accounts bank, WESTLB AG,
NEW YORK BRANCH, as lead arranger and sole lead bookrunner, MIZUHO CORPORATE
BANK, LTD., as lead arranger and co-syndication agent, CIT CAPITAL SECURITIES
LLC, as lead arranger and co-syndication agent, COOPERATIEVE CENTRALE
RAIFFEISEN-BOERENLEENBANK BA., "RABOBANK NEDERLAND", NEW YORK BRANCH, as lead
arranger and co-documentation agent, and BANCO SANTANDER CENTRAL HISPANO S.A,
NEW YORK BRANCH, as lead arranger and co-documentation agent, pursuant to which,
among other things, the Lenders have [made] [agreed to make] loans to, and for
the benefit of, the Borrowers;
 
WHEREAS, certain Lenders or their affiliates may, from time to time, enter into
interest rate hedging agreements with the Company as permitted under the Credit
Agreement; and
 
WHEREAS, as of the date hereof, the Pledgor is the sole member and owns one
hundred (100%) of the Equity Interests of the Company and will obtain benefits
as a result of the Loans, and it is a requirement under the Credit Agreement
that the Pledgor execute and deliver this Agreement;
 
AGREEMENT
 
NOW, THEREFORE, in consideration of the promises contained herein, and to induce
the Lenders to enter into the Credit Agreement and to make the advances of
credit to the Borrowers contemplated thereby, and to induce the Interest Rate
Protection Providers to enter into the Interest Rate Protection Agreements and
to provide the interest rate hedges contemplated thereby, and for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, intending to be legally bound, the Company and the Pledgor hereby
agree with the Collateral Agent, for the benefit of the Senior Secured Parties,
as follows:
 
6.04(g)-B - 5

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ARTICLE I
 
DEFINITIONS
 
Section 1.01 Defined Terms. The following terms (whether or not underscored)
when used in this Agreement, including its preamble and recitals, shall have the
following meanings:
 
"Collateral Agent" has the meaning given in the preamble to this Agreement.
"Collateral" has the meaning given in Section 2.01 (Granting Clause).
 
"Company" has the meaning given in the preamble to this Agreement.
 
"Credit Agreement" has the meaning given in the recitals to this Agreement.
 
"Non-Recourse Party" has the meaning given in Section 8.21 (Scope of Liability).
 
"Pledged Equity Interests" has the meaning given in Section 2.01 (Granting
Clause).
 
"Pledgor" has the meaning given in the preamble to this Agreement.
 
Section 1.02 Credit Agreement and UCC Definitions. Unless otherwise defined
herein or unless the context otherwise requires, terms used in this Agreement,
including its preamble and recitals, have the meanings provided in the Credit
Agreement or, if not defined therein, the UCC.
 
Section 1.03 Rules of Interpretation. The rules of interpretation set forth in
Section 1.02 (Principles of Interpretation) of the Credit Agreement shall apply
to this Agreement, including its preamble and recitals.
 
ARTICLE II
 
PLEDGE AND GRANT OF SECURITY INTEREST
 
Section 2.01 Granting Clause. To secure the timely payment in full when due
(whether at stated maturity, by acceleration or otherwise) in cash and
performance in full of the Obligations, the Pledgor hereby collaterally assigns,
grants and pledges to the Collateral Agent, for the benefit of the Senior
Secured Parties, a continuing security interest and Lien in all the estate,
right, title and interest of the Pledgor, now owned or hereafter existing or
acquired, and howsoever its interest therein may arise or appear (whether by
ownership, security interest, Lien, claim or otherwise), including all the
estate, right, title and interest of the Pledgor in, to and under the following
(the "Collateral"):
 
6.04(g)-B - 6

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(a) Any and all of the Pledgor's right(s), title(s) and interest(s), whether now
owned or hereafter existing or acquired, in the Company, and all of the Equity
Interests of the Company related thereto, whether or not evidenced or
represented by any certificated security or other instrument, (the "Pledged
Equity Interests"), including the membership interests described on Schedule I
hereto and the Pledgor's share of
 
(i) 
all rights to receive income, gain, profit, dividends and other distributions
allocated or distributed to the Pledgor in respect of or in exchange for all or
any portion of the Pledged Equity Interests;

 
(ii) 
all of the Pledgor's capital or ownership interest or other Equity Interest,
including capital accounts, in the Company;

 
(iii) 
all of the Pledgor's voting rights in or rights to control or direct the affairs
of the Company;

 
(iv) 
all other rights, title and interest in or to the Company derived from the
Pledged Equity Interests;

 
(v) 
all indebtedness or other obligations of the Company owed to the Pledgor;

 
(vi) 
all claims of the Pledgor for damages arising out of, or for any breach or
default relating to, the Pledged Equity Interests;

 
(vii) 
all securities, notes, certificates and other instruments representing or
evidencing any of the foregoing rights and interests or the ownership thereof
and any interest of the Pledgor reflected in the books of any financial
intermediary pertaining to such rights and interests;

 
(viii) 
all distributions, non-cash dividends, cash, options, warrants, stock splits,
reclassifications, rights, instruments or other investment property and other
property or proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such rights and
interests; and

 
(ix) 
all security entitlements of the Pledgor in any and all of the foregoing; and

 
(b) all proceeds (including proceeds of proceeds) of the foregoing Collateral,
whether cash or non-cash; provided, however, that "Collateral" shall not include
any cash or other property distributed to the Pledgor following a distribution
made in accordance with Section 7.02(s) (Negative Covenants — Restricted
Payments) of the Credit Agreement.
 
Section 2.02 Delivery of Collateral.
 
(a) All certificates, notes and other instruments representing or evidencing any
Collateral shall be delivered to and held by or on behalf of, and, in the case
of notes, endorsed to the order of, the Collateral Agent, or its designee
pursuant hereto, in the manner set forth in Section 7.02 (Delivery of
Collateral: Proxy).
 
6.04(g)-B - 7

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(b) If any Collateral consists of security entitlements, the Pledgor shall
transfer such security entitlements to the Collateral Agent (or its custodian,
nominee or other designee) or cause the applicable securities intermediary to
agree that it will comply with entitlement orders by the Collateral Agent
without further consent by the Pledgor.
 
Section 2.03 Retention of Certain Rights. So long as the Collateral Agent has
not elected to exercise remedies under this Agreement in connection with an
Event of Default that has occurred and is continuing, the Pledgor reserves the
right to exercise all voting and other rights, title and interest with respect
to the Collateral (except as limited by the Financing Documents) and, to the
extent permitted under the Credit Agreement, to receive all income, gains,
profits, dividends and other distributions from the Collateral whether non-cash
dividends, cash, options, warrants, stock splits, reclassifications, rights,
instruments or other investment property or other property or proceeds from time
to time received, receivable or otherwise distributed in respect of or in
exchange for any or all of such rights and interests.
 
Section 2.04 Obligations Unconditional. The obligations of the Pledgor in this
Agreement shall be continuing, irrevocable, primary, absolute and unconditional
irrespective of the value, genuineness, validity, regularity or enforceability
of any Financing Document or any other agreement or instrument referred to
therein, or any substitution, release or exchange of any guarantee of or
security for any of the Obligations and, to the fullest extent permitted by
applicable Law, irrespective of any other circumstance whatsoever that might
otherwise constitute a legal or equitable discharge or defense of a surety or
guarantor, other than the occurrence of the Discharge Date and other than any
defense that the underlying obligation has been satisfied in accordance with the
terms of the Financing Documents, it being the intent of this Section 2.04 that
the obligations of the Pledgor hereunder shall be absolute and unconditional
under any and all circumstances. Without limiting the generality of the
foregoing, it is agreed that the occurrence of any one or more of the following
shall not alter or impair the liability of the Pledgor hereunder, which shall
remain absolute and unconditional as described above without regard to and not
be released, discharged or in any way affected (whether in full or in part) by:
 
(a) at any time or from time to time, without notice to the Pledgor, the time
for any performance of or compliance with any of the Obligations is extended, or
such performance or compliance is waived;
 
(b) any Financing Document is amended or modified or there is a departure from,
or waiver of, any of the terms of any Financing Document;
 
(c) the maturity of any of the Obligations is accelerated, or any of the
Obligations is modified, supplemented and/or amended in any respect, or any
right under any Financing Document or any other agreement or instrument referred
to therein is waived or any guarantee of any of the Obligations or any security
therefore is released or exchanged in whole or in part or otherwise dealt with;
 
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(d) any lien granted to, or in favor of, the Collateral Agent as security for
any of the Obligations fails to be perfected; or
 
(e) any proceeding, voluntary or involuntary, involving the bankruptcy,
insolvency, receivership, reorganization, liquidation or arrangement of the
Pledgor or by any defense which the Pledgor may have by reason of the order,
decree or decision of any court or administrative body resulting from any such
proceeding. The Pledgor acknowledges and agrees that the Obligations include
interest on the Obligations at the applicable rate therefor under the Financing
Documents which accrues after the commencement of any such proceeding (or, if
interest on any portion of the Obligations ceases to accrue by operation of Law
by reason of the commencement of said proceeding, such Obligations include the
interest which would have accrued on such portion of the Obligations if said
proceedings had not been commenced), since it is the intention of the parties
that the amount of the Obligations secured pursuant to this Agreement should be
determined without regard to any rule of Law or order which may relieve the
Pledgor of any portion of the Obligations. The Pledgor will permit any trustee
in bankruptcy, receiver, debtor in possession, assignee for the benefit of
creditors or similar person to pay the Collateral Agent, or allow the claim of
the Collateral Agent in respect of, interest which would have accrued after the
date on which such proceeding is commenced.
 
Section 2.05 Waiver. The enforceability and effectiveness of this Agreement and
the liability of the Pledgor, and the rights, remedies, powers and privileges of
the Collateral Agent, under this Agreement shall not be affected, limited,
reduced, discharged or terminated, and the Pledgor hereby expressly waives, to
the extent permitted by applicable Laws, to the fullest extent permitted by Law
any defense now or in the future arising, by reason of:
 
(a) the illegality, invalidity or unenforceability of all or any part of the
Obligations, any Financing Document or any agreement, security document,
guarantee or other instrument relating to all or any part of the Obligations;
 
(b) the illegality, invalidity or unenforceability of any security or guarantee
for all or any part of the Obligations or the lack of perfection or continuing
perfection or failure of the priority of any lien or encumbrance on any
collateral for all or any part of the Obligations;
 
(c) the cessation, for any cause whatsoever, of the liability of any Person that
is a guarantor of all or any part of the Obligations (other than by the
occurrence of the Discharge Date);
 
(d) any judicial or nonjudicial foreclosure or sale of, or other election of
remedies with respect to, any interest in real property or other Collateral
serving as security for all or any part of the Obligations, even though such
foreclosure, sale or election of remedies may impair the subrogation rights of
either the other Borrowers, or the Pledgor or may preclude the other Borrowers
or the Pledgor from obtaining reimbursement, contribution, indemnification or
other recovery from the other Borrowers or any other Person and even though the
other Borrowers or the Pledgor may not, as a result of such foreclosure, sale or
election of remedies, be liable for any deficiency;
 
6.04(g)-B - 9

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(e) any act or omission of the Collateral Agent or any other Person that
directly or indirectly results in or aids the discharge or release of the
Pledgor or any part of the Obligations or any security or guarantee (including
any letter of credit) for all or any part of the Obligations by operation of Law
or otherwise (other than the occurrence of the Discharge Date);
 
(f) any Law which provides that the obligation of a surety or the Pledgor must
neither be larger in amount nor in other respects more burdensome than that of
the principal or which reduces a surety's or the Pledgor's obligation in
proportion to the principal obligation;
 
(g) any bankruptcy, insolvency, reorganization, arrangement, readjustment of
debt, liquidation or dissolution proceeding commenced by or against any Person,
including any discharge of, or bar or stay against collecting, all or any part
of the Obligations (or any interest on all or any part of the Obligations) in or
as a result of any such proceeding, any failure of the Collateral Agent to file
a claim in any such proceeding, or the occurrence of any of the following: (i)
the election by the Collateral Agent, in any bankruptcy proceeding of any
Person, of the application or non-application of Section 1111(b)(2) of the
Bankruptcy Code, (ii) any extension of credit or the grant of any lien or
encumbrance under Section 364 of the Bankruptcy Code, (iii) any use of cash
collateral under Section 363 of the Bankruptcy Code, or (iv) any agreement or
stipulation with respect to the provision of adequate protection in any
bankruptcy proceeding of any Person; or
 
(h) any action taken by the Collateral Agent that is authorized by this Section
2.05 or otherwise in this Agreement or by any other provision of any Financing
Document or any omission to take any such action.
 
ARTICLE III
 
EVENTS OF DEFAULT
 
Section 3.01 Events of Default. The occurrence of an Event of Default, whatever
the reason for such Event of Default and whether it is voluntary or involuntary
or is effected by operation of Law or pursuant to any judgment, decree or order
of any court or any order, rule or regulation of any Governmental Authority,
shall constitute a default hereunder. Any such Event of Default shall be
considered cured or waived for the purposes of this Agreement when it has been
cured or waived in accordance with the Credit Agreement.
 
ARTICLE IV
 
REPRESENTATIONS AND WARRANTIES
 
The Pledgor represents and warrants to and in favor of the Collateral Agent and
the Senior Secured Parties, as of the date hereof, as of the Closing Date and as
of each Funding Date, as of the date of each Funding Notice, as of the date of
each Issuance Request, and as of the Conversion Date, as follows:
 
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Section 4.01 Organization; Power; Compliance with Law and Contractual
Obligations. The Pledgor (a) is a [limited liability company] validly organized
and existing and in good standing under the Laws of the State of [Delaware], (b)
is duly qualified to do business as is now being conducted and as is proposed to
be conducted and is in good standing as a [limited liability company] in each
jurisdiction where the nature of its business requires such qualification (other
than any such failure to be so qualified or in good standing that could not
reasonably be expected to have a Material Adverse Effect) and (c) has all
requisite [limited liability company] power and authority and holds all
Governmental Approvals required as of the date of this representation is made or
deemed repeated to enter into and perform its obligations under this Agreement.
 
Section 4.02 Due Authorization; Non-Contravention.
 
(a) The execution, delivery and performance by the Pledgor of this Agreement are
within the Pledgor's [limited liability company powers], have been duly
authorized by all necessary [limited liability company] action, and do not
contravene in any material respect (i) the Pledgor's Organic Documents, or (ii)
any applicable Law or any Contractual Obligation binding on or affecting the
Pledgor.
 
(b) The exercise by the Collateral Agent of any of its rights and remedies with
respect to the Collateral in accordance with the terms of this Agreement will
not contravene in any material respect any applicable Law or any Contractual
Obligation binding on or affecting the Pledgor or any of the properties of the
Pledgor and will not result in or require the creation of any Lien (other than
Permitted Liens) upon or with respect to any of the Collateral other than
pursuant to this Agreement.
 
Section 4.03 Validity. This Agreement constitutes the legal, valid and binding
obligations of the Pledgor enforceable in accordance with its terms, except as
the enforceability hereof may be limited by (a) bankruptcy, insolvency,
reorganization, or other similar Laws affecting the enforcement of creditors'
rights generally and (b) general equitable principles (whether considered in a
proceeding in equity or at Law).
 
Section 4.04 Beneficial Ownership; Pledged Equity Interests. The Pledgor is the
lawful and beneficial owner of and has full right, title and interest in, to and
under all rights and interests comprising the Collateral, subject to no Liens,
no prior assignments, no effective UCC financing statements, no security
agreements and no other instruments similar in effect (other than this
Agreement, the Liens created hereunder and other Permitted Liens). The Pledged
Equity Interests (a) have been duly authorized and validly issued, (b) are fully
paid and non-assessable and (c) constitute one hundred percent (100%) of the
outstanding Equity Interests of the Company.
 
Section 4.05 Name. The name of the Pledgor is [________], as indicated in the
public records of the State of [Delaware], and it has not had any other names
within the past five (5) years [other than [________]].
 
Section 4.06 Organizational Number. The Pledgor's federal employee
identification number is [________] and Pledgor's organizational number is
[________].
 
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Section 4.07 Capital Adequacy; Etc.
 
(a) The Pledgor is, and after giving effect to the transactions contemplated
hereby will be, Solvent.
 
(b) The Pledgor is not executing this Agreement with any intention to hinder,
delay or defraud any present or future creditor or creditors of the Pledgor.
 
ARTICLE V
 
COVENANTS OF PLEDGOR
 
The Pledgor covenants to and in favor of the Collateral Agent and the Senior
Secured Parties as follows:
 
Section 5.01 Defense of Collateral. The Pledgor shall, until the Discharge Date,
defend its title to the Collateral and the interest of the Collateral Agent (for
the benefit of itself and the other Senior Secured Parties) in the Collateral
pledged hereunder against the claims and demands of all other Persons, provided
that nothing in this Section 5.01 shall limit the Pledgor's right to dispose of
the Collateral in accordance with the Financing Documents.
 
Section 5.02 Limitation of Liens. The Pledgor shall not create, incur, assume or
suffer to exist any Liens (including authorizing the filing of any financing
statements under the UCC or any like statement relating to the Collateral) on or
with respect to all or any part of the Collateral (other than Permitted Liens).
The Pledgor shall at its own cost and expense promptly take such action as may
be necessary to discharge any such Liens (other than Permitted Liens).
 
Section 5.03 No Sale of Collateral. Except as permitted by the terms of the
Financing Documents, the Pledgor shall not cause, suffer or permit the sale,
assignment, conveyance, pledge or other transfer of all or any portion of the
Pledgor's Equity Interest in the Company or any other portion of the Collateral.
 
Section 5.04 No Impairment of Security. The Pledgor shall not take any action
that, or fail to take any action if such failure would, impair in any manner the
enforceability of the Collateral Agent's security interest in and Lien on any
Collateral.
 
Section 5.05 Filing of Bankruptcy Proceedings. To the extent it may do so under
applicable Law, the Pledgor, for itself, its successors and assigns, shall not
cast any vote as an owner in the Company or otherwise (a) in favor of the
commencement of a voluntary case or other proceeding seeking liquidation,
reorganization, rehabilitation or other relief with respect to the Company or
its debts under any bankruptcy, insolvency or other similar Law now or hereafter
in effect in any jurisdiction or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of the owners of the Company or
any substantial part of the Company's property, (b) to authorize the Company to
consent to any such aforesaid relief or to the appointment of or taking
possession by any such aforesaid official in an involuntary case or other
proceeding commenced against the Company or (c) to authorize the Company to make
a general assignment for the benefit of creditors.
 
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Section 5.06 Distributions. If the Pledgor in its capacity as an owner of the
Company receives any income, dividend or other distribution of money or property
of any kind from the Company (other than in accordance with the Financing
Documents), the Pledgor shall hold such income or distribution as trustee for
and shall promptly deliver the same to the Collateral Agent in the exact form
received by the Pledgor (or duly endorsed by the Pledgor to the Collateral
Agent, if required). To the extent that any such income, dividend or other
distribution is made in compliance with the terms of the Financing Documents,
then the further distribution or payment of such monies shall not give rise to
any claims or cause of action on the part of any of the Senior Secured Parties
against the Company or the Pledgor seeking the return or disgorgement of any
such distributions or other payments unless the distributions or payments
involve or result from the fraud or willful misconduct of the Company or the
Pledgor.
 
Section 5.07 Maintenance of Records. The Pledgor shall, at all times, keep
accurate and complete records of the Collateral. The Pledgor shall permit
officers and designated representatives of the Collateral Agent to examine the
Pledgor's books and records pertaining to the Collateral, and make copies
thereof or abstracts therefrom, all at the expense of the Pledgor and at such
reasonable times during normal business hours and as often as may be reasonably
desired, upon reasonable advance notice to the Pledgor; provided, that if a
Default or an Event of Default has occurred and is continuing, the Collateral
Agent (or any of its officers or designated representatives) may do any of the
foregoing at any time during normal business hours and without advance notice.
Upon the occurrence and during the continuation of any Event of Default, at the
Collateral Agent's request, the Pledgor shall promptly deliver to the Collateral
Agent copies of any and all of the records mentioned above.
 
Section 5.08 Name; Jurisdiction of Organization. The Pledgor shall not change
its name, its jurisdiction of organization, the location of its principal place
of business or its organization identification number without written notice to
the Collateral Agent at least thirty (30) days prior to such change. In the
event of such change, the Pledgor shall (at its expense) execute and deliver
such instruments and documents as may be required by the Collateral Agent or
applicable Law to maintain a first priority perfected security interest in the
Collateral.
 
Section 5.09 Amendments to Organizational Documents. Except as expressly
permitted by this Agreement or the other Financing Documents, the Pledgor shall
not (a) terminate or cancel the Organic Documents of the Company or (b) in any
material respect, amend, supplement or otherwise modify the Organic Documents of
the Company.
 
Section 5.10 Perfection.
 
(a)The Pledgor agrees that from time to time, at the expense of the Pledgor, the
Pledgor shall promptly execute and deliver all further instruments and
documents, and take all further action, that may be reasonably necessary or
desirable in order to perfect, to ensure the continued perfection of, and to
protect the assignment and security interest granted or intended to be granted
hereby or to enable the Collateral Agent to exercise and enforce its rights and
remedies hereunder with respect to any Collateral. Without limiting the
generality of the foregoing, the Pledgor shall (i) deliver any of the Collateral
represented by a certificate or other instrument to the Collateral Agent,
accompanied by such duly executed instruments of transfer or assignment as the
Collateral Agent may reasonably request, and (ii) authorize, execute and file
such financing or continuation statements, or amendments thereto, and such other
instruments, endorsements or notices, as may be reasonably necessary or
desirable in order to perfect and preserve the assignments and security
interests granted or purported to be granted hereby.
 
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(b)The Pledgor hereby authorizes the filing of any financing statements or
continuation statements, and amendments to financing statements, or any similar
document in any jurisdictions and with any filing offices as the Collateral
Agent may reasonably determine are necessary or advisable to perfect the
security interest granted to the Collateral Agent, for the benefit of the Senior
Secured Parties, herein. Such financing statements may describe the Collateral
in the same or similar and consistent manner as described herein.
 
Section 5.11 Information Concerning Collateral. The Pledgor shall, promptly upon
request and at its own expense, provide to the Collateral Agent all information
and evidence the Collateral Agent may reasonably request concerning the
Collateral to enable the Collateral Agent to enforce the provisions of this
Agreement.
 
Section 5.12 Payment of Taxes. The Pledgor shall pay or cause to be paid, before
any fine, penalty, interest or cost attaches thereto, all Taxes and other
non-governmental charges or levies (other than those Taxes or levies that are
subject to a Contest and immaterial Taxes in an aggregate amount not in excess
of twenty-five thousand Dollars ($25,000) at any one time outstanding (taking
into account any interest and penalties that could accrue or be applicable to
such past-due Taxes), and provided that such Taxes are no more than forty-five
(45) days past due)) now or hereafter assessed or levied against the Collateral
pledged by it hereunder and shall retain copies of and, upon request, permit the
Collateral Agent or any Senior Secured Party to examine receipts showing payment
of any of the foregoing.
 
ARTICLE VI
 
REMEDIES UPON AN EVENT OF DEFAULT
 
Section 6.01 Remedies Upon an Event of Default. Upon the occurrence and during
the continuation of an Event of Default, the Collateral Agent shall have the
right, but not the obligation, to do any of the following:
 
(a) vote or exercise any and all of the Pledgor's rights or powers incident to
its ownership of the Pledged Equity Interests, including any rights or powers to
manage or control the Company and receive dividends or distributions;
 
(b) demand, sue for, collect or receive any money or property at any time
payable to or receivable by the Pledgor on account of or in exchange for all or
any part of the Collateral;
 
(c) cause any action at Law or suit in equity or other proceeding to be
instituted and prosecuted to collect or enforce any obligation or exercise any
right hereunder or included in the Collateral, including specific enforcement of
any covenant or agreement contained herein, or to foreclose or enforce the
security interest in all or any part of the Collateral granted herein, or to
enforce any other legal or equitable right vested in it by this Agreement or by
applicable Law;
 
(d) amend, terminate, supplement or modify all or any of the Company's Organic
Documents;
 
6.04(g)-B - 14

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(e) incur expenses, including attorneys' fees, consultants' fees, and other
costs in connection with the exercise of any right or power under this
Agreement;
 
(f) perform any obligation of the Pledgor hereunder;
 
(g) secure the appointment of a receiver of the Collateral or any part thereof,
whether incidental to a proposed sale of the Collateral or otherwise, and all
disbursements made by such receiver and the expenses of such receivership shall
be added to and be made a part of the Obligations, and, whether or not the
principal sum of the Obligations, including such disbursements and expenses,
exceeds the indebtedness originally intended to be secured hereby, the entire
amount of said sum, including such disbursements and expenses, shall be secured
by this Agreement and shall be due and payable upon demand therefor and
thereafter shall bear interest at the Default Rate or the maximum rate permitted
by applicable Law, whichever is less;
 
(h) transfer the Collateral, or any part thereof, to the name of the Collateral
Agent or to the name of any nominee of the Collateral Agent;
 
(i) exercise any other or additional rights or remedies granted to the
Collateral Agent under any other provision of this Agreement or any other
Financing Document, or exercisable by a secured party under the UCC or under any
other applicable Law and, without limiting the generality of the foregoing and
without notice except as specified below, sell the Collateral or any part
thereof in one or more parcels at public or private sale, at any exchange or
broker's board or elsewhere, at such price or prices and on such other terms as
the Collateral Agent may deem commercially reasonable in accordance with the
UCC;
 
(j) take any other lawful action that the Collateral Agent deems necessary or
desirable to protect or realize upon its security interest in the Collateral or
any part thereof; and/or
 
(k) appoint another Person (who may be an employee, officer or other
representative of the Collateral Agent) to do any of the foregoing, or take any
other action permitted hereunder, on behalf of the Collateral Agent.
 
Section 6.02 Minimum Notice Period. If, pursuant to applicable Law requirements,
prior notice of any action described in Section 6.01 (Remedies Upon an Event of
Default)), including the sale of the Collateral pursuant to Section 6.03 (Sale
of Collateral), is required to be given to the Pledgor or the Company, the
Pledgor and the Company hereby acknowledge and agree that the minimum time
required by such applicable Law, or if no minimum time is specified, ten (10)
days, shall be deemed a reasonable notice period under such applicable Law.
 
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Section 6.03 Sale of Collateral. In addition to exercising the foregoing rights,
the Collateral Agent may, to the extent permitted by applicable Law, arrange for
and conduct a sale of the Collateral at a public or private sale (as the
Collateral Agent may elect) which sale may be conducted by an employee or
representative of the Collateral Agent, and any such sale shall be conducted in
a commercially reasonable manner. The Collateral Agent may release, temporarily
or otherwise, to the Pledgor any item of the Collateral of which the Collateral
Agent has taken possession pursuant to any right granted to the Collateral Agent
by this Agreement without waiving any rights granted to the Collateral Agent
under this Agreement, the Credit Agreement or the other Financing Documents or
any other agreement related hereto or thereto. The Pledgor, in dealing with or
disposing of the Collateral or any part thereof, hereby waives all rights, legal
and equitable, it may now or hereafter have to require marshaling of assets or
to require, upon foreclosure, sales of assets in a particular order. The Pledgor
also waives its right to challenge the reasonableness of any disclaimer of
warranties, title and the like made by the Collateral Agent in connection with a
sale of the Collateral. Each successor of the Pledgor under the Financing
Documents shall be deemed to have agreed, by virtue of its succession thereto,
that it shall be bound by the above waiver, to the same extent as if such
successor gave such waiver itself The Pledgor also hereby waives, to the full
extent it may lawfully do so, the benefit of all Laws providing for rights of
appraisal, valuation, stay or extension or of redemption after foreclosure now
or hereafter in force. If the Collateral Agent sells any of the Collateral upon
credit, the Pledgor will be credited only with payments actually made by the
purchaser and received by the Collateral Agent. In the event the purchaser fails
to pay for the Collateral, the Collateral Agent may resell the Collateral and
the Pledgor shall be credited with the proceeds of any such sales or resales
only in excess of the amounts required to pay the Obligations in full. In the
event the Collateral Agent bids at any foreclosure or trustee's sale or at any
private sale permitted by Law and this Agreement or any other Financing
Document, the Collateral Agent may bid all or less than the amount of the
Obligations. The Collateral Agent shall not be obligated to make any sale of the
Collateral regardless of whether or not notice of sale has been given. The
Collateral Agent may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was so adjourned. The
Pledgor further acknowledges and agrees that any offer to sell any part of the
Collateral that has been (i) publicly advertised on a bona fide basis in a
newspaper or other publication of general circulation or (ii) made privately in
the manner described herein to not less than fifteen (15) bona fide offerees
shall be deemed to involve a "public disposition" for the purposes of Section 9
610(c) of the UCC.
 
Section 6.04 Actions Taken by Collateral Agent. Any action or proceeding to
enforce this Agreement may be taken by the Collateral Agent either in the
Pledgor's name or in the Collateral Agent's name, as the Collateral Agent may
deem necessary.
 
Section 6.05 Private Sales. The Collateral Agent shall incur no liability as a
result of the sale of the Collateral, or any part thereof, at any private sale
made in good faith by the Collateral Agent pursuant to this Article VI conducted
in a commercially reasonable manner and in accordance with the requirements of
applicable Laws. The Pledgor hereby waives any claims against the Collateral
Agent and the Senior Secured Parties arising by reason of the fact that the
price at which the Collateral may have been sold at such a private sale was less
than the price that might have been obtained at a public sale or was less than
the aggregate amount of the Obligations, even if the Collateral Agent accepts
the first offer received and does not offer the Collateral to more than one
offeree, provided that such private sale is conducted in a commercially
reasonable manner and in accordance with applicable Laws.
 
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Section 6.06 Compliance With Limitations and Restrictions. The Pledgor hereby
agrees that in respect of any sale of any of the Collateral pursuant to the
terms hereof, the Collateral Agent is hereby authorized to comply with any
limitation or restriction in connection with such sale as the Collateral Agent
may be advised by counsel is necessary in order to avoid any violation of
applicable Law, or in order to obtain any required approval of the sale or of
the purchaser by any Governmental Authority or official, and the Pledgor further
agrees that such compliance shall not result in such sale being considered or
deemed not to have been made in a commercially reasonable manner, nor shall the
Collateral Agent be liable or accountable to the Pledgor for any discount
allowed by reason of the fact that such Collateral is sold in compliance with
any such limitation or restriction.
 
Section 6.07 No Impairment of Remedies. If, in the exercise of any of its rights
and remedies under this Agreement, the Collateral Agent forfeits any of its
rights or remedies, including any right to enter a deficiency judgment against
the Pledgor or any other Person, whether because of any applicable Law
pertaining to "election of remedies" or otherwise, the Pledgor hereby consents
to such action by the Collateral Agent and, to the extent permitted by
applicable Law, waives any claim based upon such action, even if such action by
the Collateral Agent would result in a full or partial loss of any rights of
subrogation, indemnification or reimbursement that the Pledgor might otherwise
have had but for such action by the Collateral Agent or the terms herein. Any
election of remedies that results in the denial or impairment of the right of
the Collateral Agent to seek a deficiency judgment against any of the parties to
any of the Financing Documents shall not, to the extent permitted by applicable
Law, impair the Pledgor's obligations hereunder.
 
ARTICLE VII
 
FURTHER ASSURANCES
 
Section 7.01 Attorney-in-Fact.
 
(a) The Pledgor hereby constitutes and appoints the Collateral Agent, acting for
and on behalf of itself and the Senior Secured Parties and each successor or
permitted assign of the Collateral Agent and the Senior Secured Parties, the
true and lawful attorney-in-fact of the Pledgor, with full power and authority
in the place and stead of the Pledgor and in the name of the Pledgor, the
Collateral Agent or otherwise, to enforce all rights, interests and remedies of
the Pledgor with respect to the Collateral or enforce all rights, interests and
remedies of the Collateral Agent under this Agreement (including the rights set
forth in Article VI (Remedies  Upon an Event of Default)); provided, however,
that the Collateral Agent shall not exercise any of the aforementioned rights
unless an Event of Default has occurred and is continuing and has not been
waived or cured in accordance with the Financing Documents. This power of
attorney is a power coupled with an interest and shall be irrevocable; provided,
however, that nothing in this Agreement shall prevent the Pledgor from, prior to
the exercise by the Collateral Agent of any of the aforementioned rights,
undertaking the Pledgor's operations in the ordinary course of business with
respect to the Collateral, in accordance with the Financing Documents.
 
(b) In addition to the provisions of Section 7.01(a), if the Pledgor fails to
perform any agreement or obligation contained herein to protect or preserve the
Collateral, and such failure continues for ten (10) days following delivery of
written notice by the Collateral Agent to the Pledgor, the Collateral Agent
itself may perform, or cause performance of, such agreement or obligation, and
the reasonable expenses of the Collateral Agent incurred in connection therewith
shall be payable by the Pledgor and shall be secured by the Collateral.
 
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Section 7.02 Delivery of Collateral; Proxy. All certificates or instruments
representing or evidencing the Collateral shall be delivered to and held by or
on behalf of the Collateral Agent pursuant hereto. All such certificates or
instruments shall be in suitable form for transfer by delivery, or shall be
accompanied by duly executed instruments of transfer or assignment in blank, all
in form and substance reasonably acceptable to the Collateral Agent. The
Collateral Agent shall have the right, at any time in its discretion and without
prior notice to the Pledgor or the Company, following the occurrence and during
the continuation of an Event of Default, to transfer to or to register in the
name of the Collateral Agent or any of its nominees any or all of the Collateral
and to exchange certificates or instruments representing or evidencing the
Collateral for certificates or instruments of smaller or larger denominations.
In furtherance of the foregoing, the Pledgor shall further execute and deliver
to the Collateral Agent a proxy in the form of Exhibit A and an irrevocable
power in the form of Exhibit B with respect to the ownership interests of the
Company owned by the Pledgor.
 
Section 7.03 Place of Business; Location of Records. Unless the Pledgor provides
notice to the Collateral Agent in accordance with Section 5.08 (Name;
Jurisdiction of Organization), the chief executive office and principal place of
business of the Pledgor is, and all records of the Pledgor concerning the
Collateral are and will be, located at the address set forth in Section 8.09
(Notices).
 
Section 7.04 Waiver of Transfer Restrictions. Notwithstanding anything to the
contrary contained in the Company's Organic Documents, the Pledgor hereby waives
any requirement contained in the Company's Organic Documents that it consent to
a transfer of any Equity Interest in the Company in connection with a
foreclosure on such Equity Interest under the Financing Documents.
 
Section 7.05 The Company's Consent and Covenant. The Company hereby consents to
the assignment of and grant of a security interest in the Collateral to the
Collateral Agent (for the benefit of the Senior Secured Parties) and to the
exercise by the Collateral Agent of all rights and powers assigned or delegated
to the Collateral Agent by the Pledgor hereunder, including the rights upon and
during the continuation of an Event of Default to exercise the Pledgor's voting
rights and other rights to manage or control the Company, all in accordance with
the Financing Documents.
 
Section 7.06 Foreclosure. The Pledgor agrees that upon the occurrence and during
the continuation of an Event of Default, the Collateral Agent may elect to non
judicially or judicially foreclose against any real or personal property
security it holds for the Obligations or any part thereof, or to exercise any
other remedy against the Company or any other Person, any security or any
guarantor, even if the effect of that action is to deprive the Pledgor of the
right to collect reimbursement from the Company or any other Person for any sums
paid by the Pledgor to the Collateral Agent or any Senior Secured Party.
 
6.04(g)-B - 18

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Section 7.07 Waiver of Rights of Subrogation. Until the Discharge Date, (a) the
Pledgor shall not exercise any right of subrogation and shall not enforce any
remedy that the Senior Secured Parties now have or may hereafter have against
the Company, and waives the benefit of, and all rights to participate in, any
security now or hereafter held by the Collateral Agent or any Senior Secured
Party from the Company and (b) the Pledgor agrees not to exercise any claim,
right or remedy that the Pledgor may now have or hereafter acquire against the
Company that arises hereunder and/or from the performance by the Pledgor
hereunder, including any claim, remedy or right of subrogation, reimbursement,
exoneration, contribution, indemnification, or participation in any claim, right
or remedy of the Senior Secured Parties against the Company, or any security
that the Senior Secured Parties now have or hereafter acquire, whether or not
such claim, right or remedy arises in equity, under contract, by statute, under
common Law or otherwise. Any amount paid to the Pledgor on account of any such
subrogation rights prior to the Discharge Date shall be held in trust for the
benefit of the Collateral Agent and shall immediately thereafter be paid to the
Collateral Agent, for the benefit of the Senior Secured Parties.
 
Section 7.08 Application of Proceeds. Upon the occurrence and during the
continuation of an Event of Default, the proceeds of any sale of or other
realization upon all or any part of the Collateral shall be applied in
accordance with Section 9.04 (Application of Proceeds) of the Credit Agreement.
 
Section 7.09 Collateral Agent May Perform. Upon the occurrence and during the
continuance of an Event of Default, if the Pledgor fails to perform any
agreement contained herein, the Collateral Agent may itself perform, or cause
performance of, such agreement, and the reasonable expenses of the Collateral
Agent incurred in connection therewith shall be part of the Obligations.
 
Section 7.10 Limitation on Duty of Collateral Agent with Respect to the
Collateral. The powers conferred on the Collateral Agent hereunder are solely to
protect its interest and the interests of the Senior Secured Parties in the
Collateral and shall not impose any duty on the Collateral Agent or any of its
designated agents to exercise any such powers. Except for (a) the safe custody
of any Collateral in its possession, (b) the accounting for monies actually
received by it hereunder, (c) the exercise of reasonable care in the custody and
preservation of the Collateral in its possession, and (d) any duty expressly
imposed on the Collateral Agent by applicable Law with respect to any Collateral
that has not been waived hereunder, the Collateral Agent shall have no duty with
respect to any Collateral and no implied duties or obligations shall be read
into this Agreement against the Collateral Agent. The Collateral Agent shall be
deemed to have exercised reasonable care in the custody and preservation of the
Collateral in its possession if the Collateral is accorded treatment that is
substantially equivalent to that which the Collateral Agent accords its own
property, it being expressly agreed, to the maximum extent permitted by
applicable Law, that the Collateral Agent shall have no responsibility for (i)
taking any necessary steps to preserve rights against any parties with respect
to any Collateral, or (ii) taking any action to protect against any diminution
in value of the Collateral, but in each case, the Collateral Agent may do so and
all expenses reasonably incurred in connection therewith shall be part of the
Obligations.
 
Section 7.11 Termination of Security Interest. Upon the Discharge Date, this
Agreement and the security interest and all other rights granted hereby shall
terminate and all rights to the Collateral shall revert to the Pledgor. Upon any
such termination, the Collateral Agent will, at the Pledgor's sole expense and
upon its written direction, promptly return all certificates and other
instruments previously delivered to the Collateral Agent representing the
Pledged Equity Interests or any other Collateral and, execute and, subject to
Section 8.11 (Reinstatement), deliver to the Pledgor such documents (including
UCC-3 termination statements) as the Company or the Pledgor shall reasonably
request to evidence such termination, to release all security interest on the
Collateral and to return such Collateral to the Pledgor.
 
6.04(g)-B - 19

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ARTICLE VIII
 
MISCELLANEOUS
 
Section 8.01 Amendments, Etc. This Agreement may not be amended, modified or
supplemented, except in a writing signed by each of the parties hereto and
otherwise in accordance with the provisions of Section 11.01 (Amendments, Etc.)
of the Credit Agreement.
 
Section 8.02 Applicable Law; Jurisdiction; Etc.
 
(a)            GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, UNITED STATES OF AMERICA
WITHOUT REFERENCE TO CONFLICTS OF LAWS (OTHER THAN SECTION 5-1401 OF THE NEW
YORK GENERAL OBLIGATIONS LAW).
 
(b)            SUBMISSION TO JURISDICTION. EACH OF THE PLEDGOR AND THE COMPANY
IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE
NON-EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW
YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF
NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER FINANCING DOCUMENT, OR
FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO
IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH
ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT
OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT.
EACH OF THE PARTIES HERETO 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. NOTHING IN THIS
AGREEMENT OR IN ANY OTHER FINANCING DOCUMENT SHALL AFFECT ANY RIGHT THAT THE
COLLATERAL AGENT OR ANY OTHER SENIOR SECURED PARTY MAY OTHERWISE HAVE TO BRING
ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER FINANCING
DOCUMENT AGAINST THE PLEDGOR, THE COMPANY OR ANY OTHER LOAN PARTY OR ITS
PROPERTIES IN THE COURTS OF ANY JURISDICTION.
 
(c)            WAIVER OF VENUE. EACH OF THE PLEDGOR AND THE COMPANY IRREVOCABLY
AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER
FINANCING DOCUMENT IN ANY COURT REFERRED TO IN SECTION 8.02(b). EACH OF THE
PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH
ACTION OR PROCEEDING IN ANY SUCH COURT.
 
6.04(g)-B - 20

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(d)            Appointment of Process Agent and Service of Process. Each of the
Pledgor and the Company hereby irrevocably appoints CT Corporation System with
an office on the date hereof at 111 Eighth Avenue, New York, New York 10011, as
its agent to receive on behalf of itself and its property services of copies of
the summons and complaint and any other process that may be served in any such
action or proceeding in the State of New York. If for any reason the Process
Agent shall cease to act as such for either of the Pledgor or the Company, the
Pledgor or the Company, as the case may be, hereby agrees to designate a new
agent in New York City on the terms and for the purposes of this Section 8.02
reasonably satisfactory to the Collateral Agent. Such service may be made by
mailing or delivering a copy of such process to the Pledgor or the Company, as
the case may be, in care of the Process Agent at the Process Agent's above
address, and each of the Pledgor and the Company hereby irrevocably authorizes
and directs the Process Agent to accept such service on its behalf. As an
alternative method of service, each of the Pledgor and the Company also
irrevocably consents to the service of any and all process in any such action or
proceeding by the air mailing of copies of such process to the Pledgor or the
Company, as the case may be, at its then effective notice addresses pursuant to
Section 8.09 (Noticed.
 
(e)            Immunity. To the extent that either the Pledgor or the Company
has or hereafter may acquire any immunity from jurisdiction of any court or from
any legal process (whether through service or notice, attachment prior to
judgment, attachment in aid of execution, execution or otherwise) with respect
to itself or its property, each of the Pledger and the Company hereby
irrevocably and unconditionally waives such immunity in respect of its
obligations under the Financing Documents and, without limiting the generality
of the foregoing, agrees that the waivers set forth in this Section 8.02(e)
shall have the fullest scope permitted under the Foreign Sovereign Immunities
Act of 1976 of the United States and are intended to be irrevocable for purposes
of such Act.
 
(f)            WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER
BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (i) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (ii) ACKNOWLEDGES THAT IT
AND THE OTHER PARTY HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND
THE OTHER FINANCING DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 8.02(f).
 
6.04(g)-B - 21

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Section 8.03 Counterparts., Effectiveness. This Agreement may be executed in
counterparts (and by different parties hereto in different counterparts), each
of which shall constitute an original, but all of which when taken together
shall constitute a single contract. This Agreement shall become effective when
it has been executed by the Collateral Agent and when the Collateral Agent has
received counterparts hereof that bear the signatures of the each of the Pledgor
and the Company. Delivery of an executed counterpart of a signature page of this
Agreement by telecopy or portable document format ("pdf') shall be effective as
delivery of a manually executed counterpart of this Agreement.
 
Section 8.04 Delay Not Waiver; Separate Causes of Action. No delay or omission
to exercise any right, power or remedy accruing to the Collateral Agent upon the
occurrence of any Event of Default shall impair any such right, power or remedy
of the Collateral Agent, nor shall it be construed to be a waiver of any such
Event of Default, or an acquiescence therein, or of or in any other breach or
default thereafter occurring, nor shall any waiver of any other breach or
default under this Agreement or any other Financing Document be deemed a waiver
of any other breach or default theretofore or thereafter occurring. Any waiver,
permit, consent or approval of any kind or character on the part of the
Collateral Agent of any breach or default under this Agreement, or any waiver on
the part of the Senior Secured Parties or the Collateral Agent of any provision
or condition of this Agreement, must be in writing and shall be effective only
to the extent specifically set forth in such writing. Each and every default by
the Pledgor or the Company in payment hereunder shall give rise to a separate
cause of action hereunder, and separate suits may be brought hereunder as each
cause of action arises.
 
Section 8.05 Entire Agreement. This Agreement, together with the other Financing
Documents, is intended by the parties as a final expression of their agreement
and is intended as a complete and exclusive statement of the terms and
conditions thereof.
 
Section 8.06 Expenses. Each of the Pledgor and the Company agrees to pay on
demand to the Collateral Agent all costs and expenses incurred by the Collateral
Agent (including fees, expenses and disbursements of counsel) incident to its
enforcement, exercise, protection or preservation of any of its rights, remedies
or claims (or the rights or claims of any Senior Secured Party) under this
Agreement.
 
Section 8.07 Headings Descriptive. Article and Section headings have been
inserted in this Agreement as a matter of convenience for reference only and it
is agreed that such article and section headings are not a part of this
Agreement and shall not be used in the interpretation of any provision of this
Agreement.
 
Section 8.08 Interest. Any amount required to be paid by the Pledgor or the
Company pursuant to the terms hereof that is not paid when due shall bear
interest at the Default Rate or the maximum rate permitted by Law, whichever is
less, from the date due until paid in full in cash.
 
Section 8.09 Notices.
 
(a) All notices, requests, demands or other communications provided for herein
(including, without limitation, any modifications of, or waivers or consents
under, this Agreement) shall be given or made in writing in the manner set out
in Section 11.12 (Notices and Other Communications) of the Credit Agreement and
to the addresses set forth below:
 
6.04(g)-B - 22

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If to the Pledgor:
 
[ADDRESS]
 
Attention: 
[________]

Telephone: 
[________]

Facsimile: 
[________]

E-mail: 
[________]

 
If to the Company:
 
[ADDRESS]
 
Attention: 
[________]

Telephone: 
[________]

Facsimile: 
[________]

E-mail: 
[________]

 
If to the Collateral Agent:
 
[ADDRESS]
 
Attention: 
[________]

Telephone: 
[________]

Facsimile: 
[________]

E-mail: 
[________]

 
(b) Each of the parties hereto may change its address, telecopier or telephone
number or e-mail address for notices and other communications hereunder by
notice to the other parties hereto.
 
Section 8.10 No Waiver., Cumulative Remedies. No failure by the Collateral Agent
to exercise, and no delay by the Collateral Agent in exercising, any right,
remedy, power or privilege hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise of any right, remedy, power or privilege
hereunder preclude any other or further exercise thereof or the exercise of any
other right, remedy, power or privilege.
 
Section 8.11 Reinstatement. This Agreement and the obligations of the Pledgor
and the Company hereunder shall automatically be reinstated if and to the extent
that for any reason any payment made pursuant to this Agreement is rescinded or
must otherwise be restored or returned, whether as a result of any proceedings
in bankruptcy or reorganization or otherwise with respect to the Pledgor, the
Company or any other Person or as a result of any settlement or compromise with
any Person (including the Pledgor or the Company) in respect of such payment,
and the Pledgor or the Company shall pay the Collateral Agent on demand all of
its reasonable costs and expenses (including reasonable fees, expenses and
disbursements of counsel) incurred by the Collateral Agent in connection with
such rescission or restoration.
 
6.04(g)-B - 23

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Section 8.12 Remedies Cumulative. No right, power or remedy herein conferred
upon or reserved to the Collateral Agent hereunder is intended to be exclusive
of any other right, power or remedy, and every such right, power and remedy
shall, to the extent permitted by applicable Law, be cumulative and in addition
to every other right, power and remedy given hereunder or under any other
Financing Document now or hereafter existing at Law or in equity or otherwise.
The assertion or employment of any right or remedy hereunder, or otherwise,
shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy. Resort to any or all security now or hereafter held
by the Collateral Agent or any other Senior Secured Party, may be taken
concurrently or successively and in one or several consolidated or independent
judicial actions or lawfully taken nonjudicial proceedings, or both.
 
Section 8.13 Rights of Collateral Agent. The Collateral Agent shall be entitled
to the rights, protections, immunities and indemnities set forth in the Credit
Agreement as if specifically set forth herein. With respect to the duties,
obligations and rights of the Collateral Agent, if any conflict between the
terms of this Agreement and the terms of the Credit Agreement arises, the terms
of the Credit Agreement shall govern and control.
 
Section 8.14 Severability. If any provision of this Agreement is held to be
illegal, invalid or unenforceable, (a) the legality, validity and enforceability
of the remaining provisions of this Agreement shall not be affected or impaired
thereby and (b) the parties shall endeavor in good faith negotiations to replace
the illegal, invalid or unenforceable provisions with valid provisions the
economic effect of which comes as close as possible to that of the illegal,
invalid or unenforceable provisions. The invalidity of a provision in a
particular jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction.
 
Section 8.15 Successions and Assignments. This Agreement shall create a
continuing pledge and assignment of and security interest in the Collateral and
shall (a) remain in full force and effect until the Discharge Date and as
otherwise provided in Section 8.16 (Survival of Provisions); (b) be binding upon
the Company, the Pledgor, and their respective successors and assigns; and (c)
inure, together with the rights and remedies of the Collateral Agent, to the
benefit of the Collateral Agent, the Senior Secured Parties and their respective
successors and permitted assigns. The release of the security interest in any of
the Collateral, the taking or acceptance of additional security, or the resort
by the Collateral Agent to any security it may have in any order it may deem
appropriate, shall not affect the liability of any Person on the indebtedness
secured hereby, except for release of the Collateral upon the Discharge Date.
The Pledgor is not entitled to assign its obligations hereunder to any other
Person without the written consent of the Collateral Agent, and any purported
assignment in violation of this provision shall be void.
 
Section 8.16 Survival of Provisions. All agreements, representations and
warranties made herein shall survive the execution and delivery of this
Agreement and the Financing Documents and the making of the Loans and extensions
of credit under the Credit Agreement. Notwithstanding anything in this Agreement
or implied by Law to the contrary, the agreements of each of the Pledgor and the
Company set forth herein shall terminate at the same time as the security
interest and other rights granted hereunder shall terminate pursuant to Section
7.11 (Termination of Security Interest).
 
6.04(g)-B - 24

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Section 8.17 Third Party Rights. Nothing in this Agreement, expressed or
implied, is intended or shall be construed to confer upon, or give to any
Person, other than the Pledgor, the Collateral Agent and the Senior Secured
Parties, any security, rights, remedies or claims, legal or equitable, under or
by reason hereof, or any covenant or condition hereof; and this Agreement and
the covenants and agreements herein contained are and shall be held to be for
the sole and exclusive benefit of the Pledgor, the Collateral Agent and the
Senior Secured Parties.
 
Section 8.18 Time. Time is of the essence of this Agreement.
 
Section 8.19 Waiver of Consequential Damages, Etc. To the fullest extent
permitted by applicable Law, neither the Pledgor or the Company shall assert,
and each of the Pledgor and the Company hereby waives, any claim against any
Indemnitee, on any theory of liability, for special, indirect, consequential or
punitive damages (as opposed to direct or actual damages) arising out of, in
connection with, or as a result of, this Agreement, any other Financing Document
or any agreement or instrument contemplated hereby, the transactions
contemplated hereby or thereby, any Loan or the use of the proceeds thereof No
Indemnitee shall be liable for any damages arising from the use by unintended
recipients of any information or other materials distributed by it through
telecommunications, electronic or other information transmission systems in
connection with this Agreement or the other Financing Documents or the
transactions contemplated hereby or thereby.
 
Section 8.20 Waiver of Litigation Payments. To the extent that the Pledgor or
the Company may, in any action, suit or proceeding brought in any of the courts
referred to in Section 8.02 (Applicable Law; Jurisdiction: Etc.) or elsewhere
arising out of or in connection with this Agreement or any other Financing
Document to which it is a party, be entitled to the benefit of any provision of
Law requiring the Collateral Agent or any Senior Secured Party in such action,
suit or proceeding to post security for the costs of such Pledgor or Company or
to post a bond or to take similar action, each of the Pledgor and the Company
hereby irrevocably waives such benefit, in each case to the fullest extent now
or in the future permitted under the Laws of New York or, as the case may be,
the jurisdiction in which such court is located.
 
Section 8.21 [Scope of Liability]. ['Except as provided herein and in any other
Transaction Document to which any Non-Recourse Party is a party, there shall be
no recourse against the Pledgor or any of its Affiliates (except the Borrowers),
or the stockholders or other owners, officers, directors or employees of any of
them (each, a "Non-Recourse Party"), for any liability to the Lenders arising in
connection with any breach or default under this Agreement, and the Lenders
shall look solely to the Borrowers (but not to any Non-Recourse Party or to any
distribution received by any Non-Recourse Party in compliance with the terms of
the Financing Documents), the Collateral and the rents, issues, profits,
proceeds and products of the Collateral, in enforcing rights and obligations
under and in connection with the Financing Documents; provided that (a) the
foregoing provisions of this Section 8.21 shall not constitute a waiver,
 
__________________
1 The provisions of this Section 8.21 (Scope of Liability) only apply to Pacific
Ethanol California, Inc.
 
6.04(g)-B - 25

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release or discharge of any of the indebtedness, or of any of the terms,
covenants, conditions, or provisions of this Agreement, the Notes, any Security
Document or any other Financing Document (but without personal liability to the
Non-Recourse Parties except as provided herein and therein), and the same shall
continue until the Discharge Date; (b) the foregoing provisions of this Section
8.21 shall not limit or restrict the right of any Senior Secured Party to name
any Borrower or any other Person (including any Non-Recourse Party) as a
defendant in any action or suit for a judicial foreclosure or for the exercise
of any other remedy under or with respect to this Agreement, any Security
Document or any other Financing Document, or otherwise, or for injunction or
specific performance, so long as (subject to the last sentence of this Section
8.21) no judgment in the nature of a deficiency judgment shall be enforced
against any Non-Recourse Party out of any property, assets or funds other than
the Collateral and the rents, issues, profits, proceeds or products of the
Collateral, and any other property or assets of any Borrower; (c) the foregoing
provisions of this Section 8.21 (including this proviso) shall not affect or
diminish or constitute a waiver, release or discharge of any specific written
obligation, covenant, or agreement made by any of the Non-Recourse Parties or
any security granted by any of the Non-Recourse Parties in support of the
obligations of such Persons under any guarantee or similar undertaking or as
security for the obligations of any Borrower; and (d) the foregoing provisions
of this Section 8.21 shall not constitute a waiver of any of the terms,
covenants, conditions, or provisions of any Project Document (but without
personal liability to the Non-Recourse Parties except as provided herein and
therein), and shall not limit or restrict the right of any Senior Secured Party
under any Project Document, to the extent provided therein or in any other
Transaction Document, to name any Borrower or any other Person (including any
Non-Recourse Party) party to such Project Document as a defendant in any action
or suit for the exercise of remedies under or with respect to any such Project
Document, or for injunction or specific performance thereunder. Notwithstanding
the foregoing, it is expressly understood and agreed that nothing contained in
this Section 8.21 shall be deemed to (i) limit or restrict any right or remedy
of the Senior Secured Parties (or any assignee or beneficiary thereof or
successor thereto) with respect to (and the Pledgor and all of the Non-Recourse
Parties and other Persons described above shall remain fully liable to the
extent that such Person would otherwise be liable for its own actions with
respect to) any breach, default, fraud or willful misconduct by the Pledgor, any
Non-Recourse Party or any Borrower; or (ii) limit in any respect the
enforceability against the Pledgor, any Non-Recourse Party or any Borrower of
any Transaction Document to which such Person is a party in accordance with its
terms (including, with respect to the Pledgor, this Agreement) (provided, that
the liability of any Non-Recourse Party under any Project Document to which it
is a party shall be subject to any limitations on liability expressly set forth
in such Project Document)]
 
[The remainder of this page is intentionally blank. The next page is the
signature page.]
 
 
6.04(g)-B - 26

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IN WITNESS WHEREOF, the parties hereto, by their officers duly authorized,
intending to be legally bound, have caused this Pledge and Security Agreement to
be duly executed and delivered as of the date first above written.
 

  [_________________________________],   as Pledgor           
By:_______________________________
  Name:    Title:            [_________________________________],    as Company 
         
By:_______________________________
  Name:     Title:             [_________________________________],    as
Collateral Agent            By:_______________________________    Name:     
Title:   

 
6.04(g)-B - 27

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EXHIBIT A
IRREVOCABLE PROXY
 
The undersigned hereby appoints [________], not in its individual capacity but
solely as "Collateral Agent" under the Credit Agreement (the "Collateral
Agent"), as Proxy with full power of substitution, and hereby authorizes the
Collateral Agent to represent and vote all of the membership interests of
[________], a limited liability company organized and existing under the Laws of
the State of Delaware, owned by the undersigned on the date of exercise hereof
during the continuance of an Event of Default under, and as defined in, the
Pledge and Security Agreement, dated as of [________], 2007 among [________],
[________], and the Collateral Agent at any meeting or at any other time chosen
by the Collateral Agent in its sole discretion.
 

Date:  _________________________________________             [________]        
By:  _________________________________   Name:    Title: 

 
 
 
 
 
 
 
6.04(g)-B - 28

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EXHIBIT B
TRANSFER DOCUMENT
 
FOR VALUE RECEIVED, [________] I hereby sells, assigns and transfers unto
__________________ all of its ownership interests in [________], a limited
liability company organized and existing under the Laws of the State of
Delaware, standing in its name on the books of [________], represented by the
following certificate(s): ___________, and irrevocably appoints _____________ as
attorney to transfer the ownership interests with full power of substitution in
the premises.
 

Date:  _________________________________________             [________]        
By:  _________________________________   Name:    Title:         
In the presence of:
 
____________________ 
 

 
 
 
 
 
6.04(g)-B - 29

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EXHIBIT C
SCHEDULE OF SECURITY FILINGS
 
1. 
UCC-1 financing statement naming the Pledgor as debtor and the Collateral Agent
as the secured party, against the Pledged Equity Interests of the Pledgor in the
Company, to be filed with the [Delaware] Secretary of State.

 
 
 
 
 
 
 
 
6.04(g)-B - 30

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SCHEDULE I
DESCRIPTION OF PLEDGED EQUITY INTERESTS
 
 
Description: 
 
100% of the membership interests of [_____________________], represented by
Certificate No. [________]
 

 
 

 
 
 
 
 
 
6.04(g)-B - 31

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EXHIBIT 6.04(g)-C
to Credit Agreement
 
[FORM OF SECURITY AGREEMENT]
 
 
 
 

--------------------------------------------------------------------------------

 
 
 
 
ASSIGNMENT AND SECURITY AGREEMENT
 
between
 
[____________________],
as Grantor
 
and
 
[____________________],
as Collateral Agent
 
 
Dated as of [____________], 2007
 
 

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This draft document is not a contract or an offer to enter into a contract.
Only  the document as executed by the parties hereto will contain the terms that
bind them. Until the document is executed by each of the parties hereto, none of
them intends to be bound  hereby.
 
6.04(g)-C - 1

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TABLE OF CONTENTS

 

      Page         ARTICLE I  DEFINITIONS 2           Section 1.01 Defined Terms
2   Section 1.02 Credit Agreement and UCC Definitions 2   Section 1.03 Rules of
Interpretation 2         ARTICLE II  PLEDGE AND GRANT OF SECURITY INTEREST 2    
      Section 2.01 Granting Clause 2   Section 2.02 Delivery of and Performance
under Assigned Agreements 5   Section 2.03 Continuing Liability under Assigned
Agreements and Governmental Approvals 6   Section 2.04 Defaults under Assigned
Agreements; Cure Rights 6   Section 2.05 Destruction of Collateral 6   Section
2.06 Intellectual Property 6   Section 2.07 Obligations Unconditional 7  
Section 2.08 Waiver 8         ARTICLE III  EVENTS OF DEFAULT 9           Section
3.01 Events of Default 9         ARTICLE IV  REPRESENTATIONS AND WARRANTIES 9  
        Section 4.01 Representations and Warranties 9         ARTICLE
V  COVENANTS OF GRANTOR 10           Section 5.01 Defense of Collateral 10  
Section 5.02 Limitation of Liens 10   Section 5.03 No Sale of Collateral 10  
Section 5.04 No Impairment of Security 10   Section 5.05 Maintenance of Records
10   Section 5.06 Name; Jurisdiction of Organization 10   Section 5.07
Perfection 11   Section 5.08 Notices; Information 11   Section 5.09 Security
Entitlements 11         ARTICLE VI  REMEDIES UPON AN EVENT OF DEFAULT 11        
  Section 6.01 Remedies Upon an Event of Default 11   Section 6.02 Minimum
Notice Period 14   Section 6.03 Sale of Collateral 14   Section 6.04 Actions
Taken by Collateral Agent 14   Section 6.05 Private Sales 15   Section 6.06
Access to Land 15   Section 6.07 Compliance With Limitations and Restrictions 15
  Section 6.08 No Impairment of Remedies 15

 
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ARTICLE VII  FURTHER ASSURANCES 16           Section 7.01 Attorney-in-Fact 16  
Section 7.02 Filing of Financing and Continuation Statements 16   Section 7.03
Termination of Security Interest 16   Section 7.04 Limitation on Duty of
Collateral Agent with Respect to the Collateral 17   Section 7.05 Rights of
Collateral Agent 17   Section 7.06 Application of Proceeds 17   Section 7.07
Collateral Agent May Perform 17         ARTICLE VIII  MISCELLANEOUS 17          
Section 8.01 Amendments; Etc 17   Section 8.02 Applicable Law; Jurisdiction; Etc
17   Section 8.03 Counterparts; Effectiveness 17   Section 8.04 Delay Not
Waiver; Separate Causes of Action 19   Section 8.05 Entire Agreement 19  
Section 8.06 Expenses 20   Section 8.07 Headings Descriptive 20   Section 8.08
Interest 20   Section 8.09 Notices 20   Section 8.10 No Waiver; Cumulative
Remedies 20   Section 8.11 Reinstatement 21   Section 8.12 Remedies Cumulative
21   Section 8.13 Rights of Collateral Agent 21   Section 8.14 Severability 21  
Section 8.15 Successions and Assignments 22   Section 8.16 Survival of
Provisions 22   Section 8.17 Third Party Rights 22   Section 8.18 Time 22  
Section 8.19 Waiver of Consequential Damages, Etc 22   Section 8.20 Waiver of
Litigation Payments 22

 
6.04(g)-C - 3

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SCHEDULES
 
Schedule 2.01 - Assigned Agreements
 
6.04(g)-C - 4

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ASSIGNMENT AND SECURITY AGREEMENT
 
 
THIS ASSIGNMENT AND SECURITY AGREEMENT, dated as of [_____________], 2007 (as
amended, amended and restated, supplemented or otherwise modified from time to
time, this "Agreement"), is entered into by and among, [_____________], a
limited liability company organized and existing under the Laws of the State of
Delaware, (the "Grantor"), and [_______], a [_______] banking corporation, in
its capacity as collateral agent (together with its successors, designees and
assigns in such capacity, the "Collateral Agent") for the Senior Secured
Parties.
 
RECITALS
 
WHEREAS, the Grantor has entered into that certain Credit Agreement, dated as of
[_____________], 2007 (as amended, amended and restated, restated, supplemented
or otherwise modified from time to time, the "Credit Agreement") among the
Grantor, [_____________], a Delaware limited liability company
("[_____________]"), [_____________], a Delaware limited liability company
("[_____________]"), [_____________], a Delaware limited liability company
("[_____________]"), [_____________], a Delaware limited liability
company ("[_____________]"), [_____________], a Delaware limited liability
company ("[_____________]" and, together with [_____________], the
Grantor, [_____________], [_____________] and [_____________], the "Borrowers"),
Pacific Holding as the Borrowers' Agent, each of the Lenders from time to time
party thereto, the Administrative Agent, as collateral agent for the Lenders,
[_____________], as accounts bank, WESTLB AG, NEW YORK BRANCH, as lead arranger
and sole lead bookrunner, MIZUHO CORPORATE BANK, LTD., as lead arranger and
co-syndication agent, CIT CAPITAL SECURITIES LLC, as lead arranger and
co-syndication agent, COOPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK BA.,
"RABOBANK NEDERLAND", NEW YORK BRANCH, as lead arranger and co-documentation
agent, and BANCO SANTANDER CENTRAL HISPANO S.A, NEW YORK BRANCH, as lead
arranger and co-documentation agent, pursuant to which, among other things, the
Lenders have [made] [agreed to make] loans to, and for the benefit of, the
Borrowers;
 
WHEREAS, certain Lenders or their affiliates may, from time to time, enter into
interest rate hedging agreements with the Grantor as permitted under the Credit
Agreement; and
 
WHEREAS, the Grantor will obtain benefits as a result of the Loans, and it is a
requirement under the Credit Agreement that the Grantor execute and deliver this
Agreement.
 
AGREEMENT
 
NOW, THEREFORE, in consideration of the promises contained herein, and to induce
the Lenders to enter into the Credit Agreement and to make the advances of
credit to the Grantor and the other Borrowers contemplated thereby, and to
induce the Interest Rate Protection Providers to enter into the Interest Rate
Protection Agreements and to provide the interest rate hedges contemplated
thereby, and for other good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged, and intending to be legally bound, the Grantor
hereby agrees with the Collateral Agent, for the benefit of the Senior Secured
Parties, as follows:
 
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ARTICLE I
DEFINITIONS
 
Section 1.01 Defined Terms. The following terms (whether or not underscored)
when used in this Agreement, including its preamble and recitals, shall have the
following meanings:
 
"Agreement" has the meaning given in the preamble.
 
"Assigned Agreement" and "Assigned Agreements" have the meaning given in Section
2.01(a).
 
"Collateral" has the meaning given in Section 2.01.
 
"Collateral Agent" has the meaning given in the preamble to this Agreement.
 
"Credit Agreement" has the meaning given in the recitals to this Agreement.
 
"Grantor" has the meaning given in the preamble to this Agreement.
 
"UCC" means the Uniform Commercial Code as the same may, from time to time, be
in effect in the State of New York; provided, however, in the event that, by
reason of mandatory provisions of Law, any or all of the perfection or priority
of the security interest in any Collateral is governed by the Uniform Commercial
Code as in effect in a jurisdiction other than the State of New York the term
"UCC" shall mean the Uniform Commercial Code as in effect in such other
jurisdiction for purposes of the provisions hereof relating to such perfection
or priority and for purposes of definitions related to such provisions.
 
Section 1.02 Credit Agreement and UCC Definitions. Unless otherwise defined
herein or unless the context otherwise requires, terms used in this Agreement,
including its preamble and recitals, have the meanings provided in the Credit
Agreement or, if not defined therein, the UCC.
 
Section 1.03 Rules of Interpretation. The rules of interpretation set forth in
Section 1.02 (Principles of Interpretation) of the Credit Agreement shall apply
to this Agreement, including its preamble and recitals.
 
ARTICLE II
PLEDGE AND GRANT OF SECURITY INTEREST
 
Section 2.01 Granting Clause. To secure the timely payment in full when due
(whether at stated maturity, by acceleration or otherwise) in cash and
performance in full of the Obligations, the Grantor does hereby collaterally
assign, grant and pledge to the Collateral Agent, for the benefit of the
Collateral Agent and each other Senior Secured Party, a continuing security
interest and Lien in all the Grantor's estate, right, title and interest in, to
and under all assets of the Grantor, whether now owned or hereafter existing or
acquired, and howsoever its interest therein may arise or appear (whether by
ownership, security interest, Lien, claim or otherwise), including all the
estate, right, title and interest of the Grantor in, to and under the following
(collectively, the "Collateral"):
 
6.04(g)-C - 6

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(a)  all contracts, agreements and documents (individually, an "Assigned
Agreement" and collectively, the "Assigned Agreements"), including the Project
Documents listed on Schedule 2.01 hereto, as amended, amended and restated,
supplemented or otherwise modified from time to time, and all of the Grantor's
rights thereunder, and all other agreements, including Additional Project
Documents, other Project Documents, easement agreements, lease and sublease
agreements, vendor warranties and guaranties, running to the Grantor or assigned
to the Grantor, relating to the leasing, use, maintenance, improvement,
operation or acquisition of the Projects or any part or parts thereof, or
transport of material, equipment and other parts of the Projects or any part or
parts thereof, and any replacement agreement for any of such agreements;
 
(b)  to the extent permitted by Law and the terms of the Grantor's Governmental
Approvals, all of the Grantor's Governmental Approvals;
 
(c)  the insurance policies maintained by the Grantor, including any such
policies insuring against loss of revenues by reason of interruption of the
operation of the [_____________] Plant or the Project or any part or parts
thereof and all proceeds and other amounts payable to the Grantor thereunder,
and all eminent domain proceeds;
 
(d)  all rents, profits, income, royalties and revenues derived in any other
manner by the Grantor as a result of its leasing or ownership of
the [_____________] Plant, the Project or any part thereof and the use or
operation of the [_____________] Plant, the Project or any part thereof,
including all Cash Flow;
 
(e)  all other personal property and fixtures, wherever located and whenever
acquired, whether or not of a type that may be subject to a security interest
under the UCC, including all machinery, tools, engines, appliances, mechanical
and electrical systems, wells, elevators, lighting, alarm systems, fire control
systems, furnishings, furniture, service equipment, motor vehicles, building or
maintenance equipment, building or maintenance materials, supplies, goods and
property covered by any warehouse receipts or bills of lading or other such
documents, spare parts, maps, plans, specifications, architectural, engineering,
construction or shop drawings, manuals or similar documents, copyrights,
patents, trademarks, trade names and other intellectual property of any kind,
and all good will associated with the foregoing, and any replacements, renewals
or substitutions for any of the foregoing or additional tangible or intangible
personal property hereafter acquired by the Grantor;
 
(f)  all goods (including inventory, equipment and any accessions thereto),
money, instruments (including promissory notes), securities and all other
investment property, security entitlements, financial assets, accounts
(including health-care-insurance receivables), contract rights, documents,
deposit accounts, chattel paper (whether tangible or electronic),
letter-of-credit rights (whether or not the letter of credit is evidenced by a
writing), commercial tort claims and supporting obligations;
 
6.04(g)-C - 7

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(g)  all general intangibles, including, to the extent assignable, all
construction, service, engineering, consulting, architectural and other similar
contracts concerning the design, construction, operation, occupancy, maintenance
and/or use of the [_____________] Plant or the Project, all architectural
drawings, plans, specifications, soil tests, appraisals, route surveys,
engineering reports and similar materials relating to all or any portion of
the [_____________] Plant or the Project and all payment and performance bonds
or warranties or guarantees relating to the [_____________] Plant or the
Project, all rights under and in patents, patent licenses, rights in
intellectual property, trademarks, trade names, corporate names, company names,
business names, fictitious business names, trade styles, trade secrets, service
marks, logos, other source and business identifiers, trademark registrations and
applications for registration used exclusively at or relating exclusively to any
part of the Grantor's business, all good will associated with the foregoing, all
renewals, extensions and continuations-in-part of the items referred to above,
any written agreements granting to the Grantor any right to use any trademark or
trademark registration at or in connection with the Grantor's business, and the
right of the Grantor to sue for past, present and future infringements of the
foregoing, and the right in the name and on behalf of the Grantor to appear in
and defend any action or proceeding brought with respect to any part of the
Grantor's real or personal property and to commence any action or proceeding to
protect the interest of the Grantor in such Collateral;
 
(h)  all books, records, writings, design documents, computer programs,
printouts and other computer materials and records, data bases, software,
information and other property relating to, used or useful in connection with,
the Grantor's business;
 
(i)  each of the Project Accounts including any sub-accounts within such Project
Accounts and including all Cash Equivalents at any time held in, required to be
held in or credited to any of the Project Accounts, and all interest, dividends
and other income derived from any such Cash Equivalents;
 
(j)  the Accounts Property;
 
(k)  all statements, certificates, instruments and investment property
representing or evidencing any Project Account and all Cash Equivalents and
other property from time to time received, receivable or otherwise distributed
in respect of such Cash Equivalents and held in or credited to any Project
Account;
 
(1)  all Local Accounts in the name, or for the benefit of, the Grantor, and all
interest and other income derived from any such Local Accounts;
 
(m)  all statements, certificates, instruments and investment property
representing or evidencing any such Local Account; and
 
(n)  the proceeds (including proceeds of proceeds) of all of the foregoing
collateral, whether cash or non-cash, including (i) all rights of the Grantor to
receive moneys due and to become due under or pursuant to the Collateral, (ii)
all rights of the Grantor to receive return of any premiums for or proceeds of
any insurance, indemnity, warranty or guaranty with respect to the Collateral or
to receive condemnation proceeds, (iii) all claims of the Grantor for damages
arising out of or for breach of or default under the Assigned Agreements or any
other Collateral, (iv) all rights of the Grantor to terminate, amend,
supplement, modify or waive performance under the Assigned Agreements, to
perform thereunder
 
6.04(g)-C - 8

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and to compel performance and otherwise exercise all remedies thereunder, (v)
all rights of the Grantor under each such contract or agreement to make
determinations, to exercise any election (including the election of remedies) or
option or to give or receive any notice, consent, waiver, or approval, together
with full power and authority with respect to any contract or agreement to
demand, receive, enforce, collect or provide receipt for any of the foregoing
rights or any property the subject of any of the contracts or agreements, to
enforce or execute any checks, or other instruments or orders, to file any
claims and to take any action that may be reasonably necessary or advisable in
connection with any of the foregoing, (vi) all rights of the Grantor to payment
for Products or other goods or other property sold or leased or services
performed by the Grantor, (vii) to the extent not included in the foregoing, all
proceeds receivable or received when any and all of the foregoing Collateral is
sold, collected, exchanged or otherwise disposed of, whether voluntarily or
involuntarily, and (viii) any and all additions and accessions to the
Collateral, and all proceeds thereof, including proceeds of the conversion,
voluntary or involuntary, of any of the foregoing into cash or liquidated
claims, including all awards, all insurance proceeds, including any unearned
premiums or refunds of premiums on any insurance policies covering all or any
part of the Collateral and the right to receive and apply the proceeds of any
insurance, or of any judgments or settlements made in lieu thereof for damage to
or diminution of the Collateral; provided, however, that "Collateral" shall not
include any property that has been sold or disposed of in accordance with
Section 7.02(f) (Negative Covenants - Asset Dispositions) of the Credit
Agreement, any Restricted Payments that have been made in compliance with
Sections 7.02(s) (Negative Covenants - Restricted Payments) and 8.08(c)(xv)
(Revenue Account) of the Credit Agreement, or any Permitted Tax Distributions or
Sponsor Support Reimbursements made in accordance with the Financing Documents.
 
It being understood, however, that in no event shall the security interest
granted under this Section 2.01 attach to any lease, license, contract, property
rights or agreement to which the Grantor is a party or any other part of the
Collateral (or to any of its rights or interests thereunder) if the grant of
such security interest would constitute or result in a breach or termination
pursuant to the terms of, or a default under, any such lease, license, contract,
property rights or agreement (other than, to the extent that any such term would
be rendered ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the
UCC); provided, that such security interest shall automatically attach upon the
granting of consent to such security interest by the counterparty to any such
lease, license, contract, property rights or agreement or the occurrence of any
other event that would permit the granting of such security interest.
 
Section 2.02 Delivery of and Performance under Assigned Agreements. The Grantor
shall deliver to the Collateral Agent a copy of an executed counterpart of each
Additional Project Document, and any amendments and supplements to the foregoing
or to any other Project Document, as they are entered into by the Grantor
promptly upon the execution thereof So long as the Collateral Agent has not
elected to exercise remedies under this Agreement in connection with an Event of
Default that has occurred and is continuing, the Grantor may exercise all
rights, interests and benefits under the Assigned Agreements in any manner
consistent with the terms of the Financing Documents.
 
6.04(g)-C - 9

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Section 2.03 Continuing Liability under Assigned Agreements and Governmental
Approvals. Except as otherwise expressly permitted under the Financing
Documents, the Grantor shall remain liable under each of the Assigned Agreements
to which it is a party and its Governmental Approvals, and shall perform in all
material respects all of the obligations undertaken by it thereunder, all in
accordance with and pursuant to the terms and provisions thereof, and the
Collateral Agent shall have no obligation or liability under any of such
Assigned Agreements or Governmental Approvals by reason of or arising out of
this Agreement or any other document related thereto (except as expressly
provided for in any applicable Consent), nor shall the Collateral Agent be
required or obligated in any manner to perform or fulfill any obligations of the
Grantor thereunder or to make any payment, or to make any inquiry as to the
nature or sufficiency of any payment received by it, or present or file any
claim, or take any action to collect or enforce the payment of any amounts that
may have been assigned to it or to that it may be entitled at any time or times.
 
Section 2.04 Defaults under Assigned Agreements; Cure Rights. Unless prohibited
by the terms of any Assigned Agreement (taking into account any Consent relating
to such Assigned Agreement), if any default by the Grantor under any of the
Assigned Agreements occurs and is continuing, the Collateral Agent may, at its
option (but shall not be obligated to), remedy any such default, in which event
it shall give written notice of its intent to do so to the Grantor and to the
parties to each Assigned Agreement under which the Grantor is in default. Any
curing by the Collateral Agent of any such default shall not be construed as an
assumption by the Collateral Agent or any other Senior Secured Party of any
obligations, covenants or agreements of the Grantor under such Assigned
Agreements, and the Collateral Agent shall not incur any liability to the
Grantor or any other Person as a result of any actions undertaken by the
Collateral Agent in curing or attempting to cure any such default. This
Agreement shall not be deemed to release or to affect in any way the obligations
of the Grantor under the Assigned Agreements.
 
Section 2.05 Destruction of Collateral. No injury to, or loss or destruction of,
the Collateral or any part thereof shall relieve the Grantor of any of its
obligations hereunder or any of its obligations under any other Financing
Documents.
 
Section 2.06 Intellectual Property. For the purpose of enabling the Collateral
Agent to exercise its rights, remedies, powers and privileges under Article VI
(Remedies Upon an Event of Default) at such time or times as the Collateral
Agent is lawfully entitled to exercise those rights, remedies, powers and
privileges, and for no other purpose, the Grantor hereby grants to the
Collateral Agent, to the extent assignable or licensable, an irrevocable,
nonexclusive license (exercisable without payment of royalty or other
compensation to the Grantor) to use, assign, license or sublicense any of the
Grantor's general intangibles collaterally assigned, granted and pledged to the
Collateral Agent, for the benefit of the Collateral Agent and each other Senior
Secured Parties, under Section 2.01(g) (Granting Clause), together with
reasonable access to all media in which any of the licensed items may be
recorded or stored and to all computer programs used for the compilation or
printout of those items.
 
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Section 2.07 Obligations Unconditional. The obligations of the Grantor in this
Agreement shall be continuing, irrevocable, primary, absolute and unconditional
irrespective of the value, genuineness, validity, regularity or enforceability
of any Financing Document or any other agreement or instrument referred to
therein, or any substitution, release or exchange of any guarantee of or
security for any of the Obligations and, to the fullest extent permitted by
applicable Law, irrespective of any other circumstance whatsoever that might
otherwise constitute a legal or equitable discharge or defense of a surety or
guarantor, other than the occurrence of the Discharge Date and other than any
defense that the underlying obligation has been satisfied in accordance with the
terms of the Financing Documents, it being the intent of this Section 2.07 that
the obligations of the Grantor hereunder shall be absolute and unconditional
under any and all circumstances. Without limiting the generality of the
foregoing, it is agreed that the occurrence of any one or more of the following
shall not alter or impair the liability of the Grantor hereunder, which shall
remain absolute and unconditional as described above without regard to and not
be released, discharged or in any way affected (whether in full or in part) by:
 
(a)  at any time or from time to time, without notice to the Grantor, the time
for any performance of or compliance with any of the Obligations is extended, or
such performance or compliance is waived;
 
(b)  any Financing Document is amended or modified or there is a departure from,
or waiver of, any of the terms of any Financing Document;
 
(c)  the maturity of any of the Obligations is accelerated, or any of the
Obligations is modified, supplemented and/or amended in any respect, or any
right under any Financing Document or any other agreement or instrument referred
to therein is waived or any guarantee of any of the Obligations or any security
therefore is released or exchanged in whole or in part or otherwise dealt with;
 
(d)  any lien granted to, or in favor of, the Collateral Agent as security for
any of the Obligations fails to be perfected; or
 
(e)  any proceeding, voluntary or involuntary, involving the bankruptcy,
insolvency, receivership, reorganization, liquidation or arrangement of the
Grantor or by any defense which the Grantor may have by reason of the order,
decree or decision of any court or administrative body resulting from any such
proceeding. The Grantor acknowledges and agrees that the Obligations include
interest on the Obligations at the applicable rate therefor under the Financing
Documents which accrues after the commencement of any such proceeding (or, if
interest on any portion of the Obligations ceases to accrue by operation of Law
by reason of the commencement of said proceeding, such Obligations include the
interest which would have accrued on such portion of the Obligations if said
proceedings had not been commenced), since it is the intention of the parties
that the amount of the Obligations secured pursuant to this Agreement should be
determined without regard to any rule of Law or order which may relieve the
Grantor of any portion of the Obligations. The Grantor will permit any trustee
in bankruptcy, receiver, debtor in possession, assignee for the benefit of
creditors or similar person to pay the Collateral Agent, or allow the claim of
the Collateral Agent in respect of, interest which would have accrued after the
date on which such proceeding is commenced. Notwithstanding the above, so long
as any Obligation remains outstanding, the Grantor shall not, without the prior
written consent of the Collateral Agent, commence or join with any other Person
in commencing any bankruptcy, reorganization or insolvency proceedings of or
against any of the Borrowers.
 
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Section 2.08 Waiver. The enforceability and effectiveness of this Agreement and
the liability of the Grantor, and the rights, remedies, powers and privileges of
the Collateral Agent, under this Agreement shall not be affected, limited,
reduced, discharged or terminated, and the Grantor hereby expressly waives, to
the extent permitted by applicable Laws, to the fullest extent permitted by Law
any defense now or in the future arising, by reason of:
 
(a)  the illegality, invalidity or unenforceability of all or any part of the
Obligations, any Financing Document or any agreement, security document,
guarantee or other instrument relating to all or any part of the Obligations;
 
(b)  the illegality, invalidity or unenforceability of any security or guarantee
for all or any part of the Obligations or the lack of perfection or continuing
perfection or failure of the priority of any lien or encumbrance on any
collateral for all or any part of the Obligations;
 
(c)  the cessation, for any cause whatsoever, of the liability of any Person
that is a guarantor of all or any part of the Obligations (other than by the
occurrence of the Discharge Date);
 
(d)  any judicial or nonjudicial foreclosure or sale of, or other election of
remedies with respect to, any interest in real property or other Collateral
serving as security for all or any part of the Obligations, even though such
foreclosure, sale or election of remedies may impair the subrogation rights of
either the other Borrowers, or the Grantor or may preclude the other Borrowers
or the Grantor from obtaining reimbursement, contribution, indemnification or
other recovery from the other Borrowers or any other Person and even though the
other Borrowers or the Grantor may not, as a result of such foreclosure, sale or
election of remedies, be liable for any deficiency;
 
(e)  any act or omission of the Collateral Agent or any other Person that
directly or indirectly results in or aids the discharge or release of the
Grantor or any part of the Obligations or any security or guarantee (including
any letter of credit) for all or any part of the Obligations by operation of Law
or otherwise (other than the occurrence of the Discharge Date);
 
(f)  any Law which provides that the obligation of a surety or the Grantor must
neither be larger in amount nor in other respects more burdensome than that of
the principal or which reduces a surety's or the Grantor's obligation in
proportion to the principal obligation;
 
(g)  any bankruptcy, insolvency, reorganization, arrangement, readjustment of
debt, liquidation or dissolution proceeding commenced by or against any Person,
including any discharge of, or bar or stay against collecting, all or any part
of the Obligations (or any interest on all or any part of the Obligations) in or
as a result of any such proceeding, any failure of the Collateral Agent to file
a claim in any such proceeding, or the occurrence of any of the following: (i)
the election by the Collateral Agent, in any bankruptcy proceeding of any
Person, of the application or non-application of Section 1111(b)(2) of the
Bankruptcy Code, (ii) any extension of credit or the grant of any lien or
encumbrance under Section 364 of the Bankruptcy Code, (iii) any use of cash
collateral under Section 363 of the Bankruptcy Code, or (iv) any agreement or
stipulation with respect to the provision of adequate protection in any
bankruptcy proceeding of any Person; or
 
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(h)  any action taken by the Collateral Agent that is authorized by this Section
2.08 or otherwise in this Agreement or by any other provision of any Financing
Document or any omission to take any such action.
 
ARTICLE III
EVENTS OF DEFAULT
 
Section 3.01 Events of Default. The occurrence of an Event of Default, whatever
the reason for such Event of Default and whether it is voluntary or involuntary
or is effected by operation of Law or pursuant to any judgment, decree or order
of any court or any order, rule or regulation of any Governmental Authority,
shall constitute a default hereunder. Any such Event of Default shall be
considered cured or waived for the purposes of this Agreement when it has been
cured or waived in accordance with the Credit Agreement.
 
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
 
Section 4.01 Representations and Warranties. The Grantor hereby makes each and
every representation and warranty made by it in Article V (Representations and
Warranties) of the Credit Agreement to the same extent as if each such
representation and warranty had been set forth in full herein, and each such
representation and warranty is hereby incorporated fully by reference in this
Agreement. The Grantor also hereby represents and warrants as of the date hereof
and as of each Funding Date, as of the date of each Funding Notice, as of the
date of each Issuance Request, and as of the Conversion Date, as follows:
 
(a)  this Agreement constitutes the legal, valid and binding obligations of the
Grantor enforceable in accordance with its respective terms, except as the
enforceability hereof or thereof may be limited by (i) bankruptcy, insolvency,
reorganization, or other similar Laws affecting the enforcement of creditors'
rights generally and (ii) general equitable principles (whether considered in a
proceeding in equity or at Law);
 
(b)  the exercise by the Collateral Agent of any of its rights and remedies with
respect to the Collateral in accordance with the terms of this Agreement will
not contravene any Contractual Obligation binding on or affecting the Grantor or
any of the properties of the Grantor and will not result in or require the
creation of any Lien (other than Permitted Liens) upon or with respect to any of
the Collateral other than as pursuant to this Agreement;
 
(c)  its name is [_____________], as indicated in the public records of the
State of Delaware, and it has not had any other names within the past five (5)
years [other than [_____________]];
 
(d)  its federal employee identification number is [_____________] and its
organizational number is [_____________];
 
(e)  its chief executive office and the place where the Grantor's records
concerning the Collateral are kept is: [_____________];
 
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(f)  the Grantor is, and after giving effect to the transactions contemplated
hereby will be, Solvent; and
 
(g)  it is not executing this Agreement with any intention to hinder, delay or
defraud any present or future creditor.
 
ARTICLE V
COVENANTS OF GRANTOR
 
The Grantor covenants to and in favor of the Collateral Agent and the other
Senior Secured Parties as follows:
 
Section 5.01 Defense of Collateral. The Grantor shall, until the Discharge Date,
defend its title to the Collateral and the interest of the Collateral Agent (for
the benefit of itself and the other Senior Secured Parties) in the Collateral
pledged hereunder against the claims and demands of all other Persons, provided
that nothing in this Section 5.01 shall limit the Grantor's right to dispose of
the Collateral in accordance with the Financing Documents.
 
Section 5.02 Limitation of Liens. The Grantor shall not create, incur, assume or
suffer to exist any Liens (including authorizing the filing of any financing
statements under the UCC or any like statement relating to the Collateral) on or
with respect to all or any part of the Collateral (other than Permitted Liens).
The Grantor shall at its own cost and expense promptly take such action as may
be necessary to discharge any such Liens (other than Permitted Liens).
 
Section 5.03 No Sale of Collateral. Except as permitted by the terms of the
Financing Documents, the Grantor shall not cause, suffer or permit the sale,
assignment, conveyance, pledge or other transfer of all or any portion of the
Collateral.
 
Section 5.04 No Impairment of Security. The Grantor shall not take any action
that, or fail to take any action if such failure would, impair in any manner the
enforceability of the Collateral Agent's security interest in and Lien on any
Collateral.
 
Section 5.05 Maintenance of Records. The Grantor shall, at all times, keep
accurate and complete records of the Collateral. The Grantor shall permit
officers and designated representatives of the Collateral Agent to examine the
Grantor's books and records pertaining to the Collateral, and make copies
thereof or abstracts therefrom, all at the expense of the Grantor and at such
reasonable times during normal business hours and as often as may be reasonably
desired, upon reasonable advance notice to the Grantor; provided, that if a
Default or an Event of Default has occurred and is continuing, the Collateral
Agent (or any of its officers or designated representatives) may do any of the
foregoing at any time during normal business hours and without advance notice to
the Grantor. Upon the occurrence and during the continuation of any Event of
Default, at the Collateral Agent's request, the Grantor shall promptly deliver
to the Collateral Agent copies of any and all of the records mentioned above.
 
Section 5.06 Name; Jurisdiction of Organization. The Grantor shall not change
its name, its jurisdiction of organization, the location of its principal place
of business or its organization identification number without written notice to
the Collateral Agent at least thirty (30) days prior to such change. In the
event of such change, the Grantor shall (at its expense) execute and deliver
such instruments and documents as may be required by the Collateral Agent or
applicable Law to maintain a first priority perfected security interest in the
Collateral.
 
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Section 5.07 Perfection. Whether with respect to the Collateral as of the date
of this Agreement or any Collateral in which the Grantor acquires rights in the
future, from time to time and at the expense of the Grantor, the Grantor shall
promptly execute and deliver all further instruments and documents, and take all
further action, that may be reasonably necessary (including under applicable Law
and, in any event, under Section 9-106 of the UCC), or that the Collateral Agent
may reasonably request, in order to create, perfect, establish and preserve the
validity, perfection and priority of the liens granted by this Agreement in any
and all of the Collateral, protect the assignment and security interest granted
or intended to be granted hereby, or to enable the Collateral Agent to exercise
and enforce its rights, powers, privileges and remedies hereunder with respect
to any Collateral. Without limiting the generality of the foregoing, the Grantor
shall: (a) if any Collateral is evidenced by a promissory note or other
instrument, deliver and pledge to the Collateral Agent such note or instrument
duly endorsed (without recourse) and accompanied by duly executed instruments of
transfer or assignment, all in form and substance reasonably satisfactory to the
Collateral Agent; and (b) authorize, execute and file such UCC financing
statements or continuation statements, or amendments thereto, and such other
instruments, endorsements or notices, as may be reasonably necessary or
desirable, or as the Collateral Agent may reasonably request or as required by
applicable Law, in order to perfect and preserve the assignments and security
interests granted or purported to be granted hereby. If the Grantor at any time
acquires a commercial tort claim, as defined in the UCC, with a fair market
value in excess of five hundred thousand Dollars ($500,000), the Grantor shall
promptly notify the Collateral Agent and Administrative Agent, in a writing
signed by an Authorized Officer of the Grantor, of the brief details thereof and
grant to the Collateral Agent in such writing a security interest therein and in
the proceeds thereof, all upon the terms of this Agreement, with such writing to
be in form and substance reasonably satisfactory to the Collateral Agent.
 
Section 5.08 Notices; Information. The Grantor shall, promptly upon request and
at its own expense, provide to the Collateral Agent all information and evidence
the Collateral Agent may reasonably request concerning the Collateral to enable
the Collateral Agent to enforce the provisions of this Agreement.
 
Section 5.09 Security Entitlements. If any Collateral consists of security
entitlements, the Grantor shall transfer such security entitlements to the
Collateral Agent (or its custodian, nominee or other designee) or cause the
applicable securities intermediary to agree that it will comply with entitlement
orders by the Collateral Agent without further consent by the Grantor.
 
ARTICLE VI
REMEDIES UPON AN EVENT OF DEFAULT
 
Section 6.01 Remedies Upon an Event of Default. Upon the occurrence and during
the continuation of an Event of Default, the Collateral Agent shall have the
right, but not the obligation, to do any of the following:
 
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(a)  proceed to protect and enforce the rights vested in it by this Agreement
and under the UCC;
 
(b)  cause all revenues hereby pledged as security and all other moneys and
other property pledged hereunder to be paid and/or delivered directly to it, and
demand, sue for, collect and receive any such moneys and property;
 
(c)  cause any action at Law in equity or other proceeding to be instituted and
prosecuted to collect or enforce any of the Obligations, or exercise any rights
hereunder or included in the Collateral, or for specific enforcement of any
covenant or agreement contained herein or in any of the Assigned Agreements, or
in aid of the exercise of any power herein or therein granted, or for any
foreclosure hereunder and sale under a judgment or decree in any judicial
proceeding, or to enforce any other legal or equitable right vested in it by
this Agreement or by Law;
 
(d)  foreclose or enforce any other agreement or other instrument by or under or
pursuant to which the Obligations are issued or secured;
 
(e)  incur expenses, including attorneys' fees, consultants' fees, and other
costs in connection with the exercise of any right or power under this
Agreement;
 
(f)  perform any obligation of the Grantor hereunder or under any other
Financing Document or Assigned Agreement, submit renewal notices or exercise any
purchase options, and make payments, purchase, contest or compromise any
encumbrance, charge, or lien, and pay taxes and expenses and insure, process and
preserve the Collateral without, however, any obligation to do so;
 
(g)  take possession of the Collateral (and of any and all books of account and
records of the Grantor relating to any of the Collateral) and render it usable
and repair and renovate the same without, however, any obligation to do so, and
enter upon, or authorize its designated agent to enter upon, any location where
the same may be located for that purpose (including the right of the Collateral
Agent to exclude the Grantor and all Persons claiming access through the Grantor
from any access to the Collateral or to any part thereof) and the Collateral
Agent and its representatives are hereby granted an irrevocable license to enter
upon such premises for such purpose, control, manage, operate, rent and lease
the Collateral, either separately or in conjunction with
the [_____________] Plant, collect all rents and income from the Collateral and
apply the same to reimburse the Senior Secured Parties for any reasonable cost
or expenses incurred hereunder or under any of the Financing Documents and to
the payment or performance of the Grantor's obligations hereunder or under any
of the Financing Documents, and apply the balance to the Obligations as provided
for in the Credit Agreement and any remaining excess balance to whomsoever is
legally entitled thereto;
 
(h)  make any reasonable compromise or settlement deemed desirable with respect
to any of the Collateral and extend the time of payment, arrange for payment
installments, or otherwise modify the terms of, any Collateral;
 
(i)  secure the appointment of a receiver of the Collateral or any part thereof,
whether incidental to a proposed sale of the Collateral or otherwise, and all
disbursements made by such receiver and the expenses of such receivership shall
be added to and be made a part of the Obligations and, whether or not the
principal sum of the Obligations, including such disbursements and expenses,
exceeds the indebtedness originally intended to be secured hereby, the entire
amount of said sum, including such disbursements and expenses, shall be secured
by this Agreement and shall be due and payable upon demand therefor and
thereafter shall bear interest at the Default Rate or the maximum rate permitted
by applicable Law, whichever is less;
 
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(j)  enter into any extension, reorganization, deposit, merger, consolidation or
other agreement pertaining to, or deposit, surrender, accept, hold or apply
other property in exchange for, the Collateral or any part thereof;
 
(k)  transfer the Collateral, or any part thereof, to the name of the Collateral
Agent or to the name of any nominee of the Collateral Agent;
 
(1)  take possession of and endorse in the name of the Grantor or in the name of
the Collateral Agent, for the account of the Grantor, any bills of exchange,
checks, drafts, money orders, notes or any other chattel paper, documents or
instruments constituting all or any part of the Collateral or received as
interest, rent or other payment on or on account of the Collateral or any part
thereof or on account of its sale or lease;
 
(m)  appoint another (who may be an employee, officer or other representative of
the Collateral Agent) to do any of the foregoing, or take any other action
permitted hereunder, on behalf of the Collateral Agent;
 
(n)  execute (in the name, place and stead of the Grantor) endorsements,
assignments and other instruments of conveyance or transfer with respect to all
or any of the Collateral;
 
(o)  require the Grantor to assemble the Collateral or any part thereof and to
make the same (to the extent the same is reasonably moveable) available to the
Collateral Agent at a place to be designated by the Collateral Agent which is
reasonably convenient to the Collateral Agent;
 
(p)  make formal application for the transfer of all or any of the Grantor's
Governmental Approvals to the Collateral Agent or to any assignee of the
Collateral Agent or to any purchaser of any of the Collateral to the extent the
same are assignable in accordance with their terms and applicable Laws; and/or
 
(q)  take any other lawful action that the Collateral Agent deems necessary or
desirable to protect or realize upon its security interest in the Collateral or
any part thereof, or exercise any other or additional rights or remedies granted
to the Collateral Agent under any other provision of this Agreement or any other
Financing Document, or exercisable by a secured party under the UCC or under any
other applicable Law and without limiting the generality of the foregoing and
without notice except as specified below, sell the Collateral or any part
thereof in one or more parcels at public or private sale, at any exchange or
broker's board or elsewhere, at such price or prices and on such other terms as
the Collateral Agent may deem commercially reasonable in accordance with the
UCC.
 
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Section 6.02 Minimum Notice Period. If, pursuant to applicable Law requirements,
prior notice of any action described in Section 6.01 (Remedies Upon an Event of
Default), including the sale of the Collateral pursuant to Section 6.03 (Sale of
Collateral), is required to be given to the Grantor, the Grantor hereby
acknowledges and agrees that the minimum time required by such applicable Law,
or, if no minimum time is specified, ten (10) days shall be deemed a reasonable
notice period under such applicable Law.
 
Section 6.03 Sale of Collateral. In addition to exercising the foregoing rights,
the Collateral Agent may, to the extent permitted by applicable Law, arrange for
and conduct a sale of the Collateral at a public or private sale (as the
Collateral Agent may elect) which sale may be conducted by an employee or
representative of the Collateral Agent, and any such sale shall be conducted in
a commercially reasonable manner. The Collateral Agent may release, temporarily
or otherwise, to the Grantor any item of the Collateral of which the Collateral
Agent has taken possession pursuant to any right granted to the Collateral Agent
by this Agreement without waiving any rights granted to the Collateral Agent
under this Agreement, the Credit Agreement, the other Financing Documents or any
other agreement related hereto or thereto. The Grantor, in dealing with or
disposing of the Collateral or any part thereof, hereby waives all rights, legal
and equitable, it may now or hereafter have to require marshaling of assets or
to require, upon foreclosure, sales of assets in a particular order. The Grantor
also waives its right to challenge the reasonableness of any disclaimer of
warranties, title and the like made by the Collateral Agent in connection with a
sale of the Collateral. Each successor of the Grantor under the Financing
Documents shall be deemed to have agreed, by virtue of its succession thereto,
that it shall be bound by the above waiver, to the same extent as if such
successor gave such waiver itself. The Grantor also hereby waives, to the full
extent it may lawfully do so, the benefit of all Laws providing for rights of
appraisal, valuation, stay, or extension or of redemption after foreclosure now
or hereafter in force. If the Collateral Agent sells any of the Collateral upon
credit, the Grantor will be credited only with payments actually made by the
purchaser and received by the Collateral Agent. In the event the purchaser fails
to pay for the Collateral, the Collateral Agent may resell the Collateral and
the Grantor shall be credited with the proceeds of any such sales or resales
only in excess of the amounts required to pay the Obligations in full. In the
event the Collateral Agent bids at any foreclosure or trustee's sale or at any
private sale permitted by Law and this Agreement or any other Financing
Document, the Collateral Agent may bid all or less than the amount of the
Obligations. The Collateral Agent shall not be obligated to make any sale of the
Collateral regardless of whether or not notice of sale has been given. The
Collateral Agent may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was so adjourned. The
Grantor further acknowledges and agrees that any offer to sell any part of the
Collateral that has been (i) publicly advertised on a bona fide basis in a
newspaper or other publication of general circulation or (ii) made privately in
the manner described herein to not less than fifteen (15) bona fide offerees
shall be deemed to involve a "public disposition" for the purposes of Section
9-610(c) of the UCC.
 
Section 6.04 Actions Taken by Collateral Agent. Any action or proceeding to
enforce this Agreement or any Assigned Agreement may be taken by the Collateral
Agent either in the Grantor's name or in the Collateral Agent's name, as the
Collateral Agent may deem necessary.
 
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Section 6.05 Private Sales. The Collateral Agent shall incur no liability as a
result of the sale of the Collateral, or any part thereof, at any private sale
made in good faith by the Collateral Agent pursuant to this Article VI conducted
in a commercially reasonable manner and in accordance with the requirements of
applicable Laws. The Grantor hereby waives any claims against the Collateral
Agent and the Senior Secured Parties arising by reason of the fact that the
price at which the Collateral may have been sold at such a private sale was less
than the price that might have been obtained at a public sale or was less than
the aggregate amount of the Obligations, even if the Collateral Agent accepts
the first offer received and does not offer the Collateral to more than one
offeree, provided that such private sale is conducted in a commercially
reasonable manner and in accordance with applicable Laws.
 
Section 6.06 Access to Land. In exercising its right to take possession of the
Collateral upon the occurrence and during the continuation of an Event of
Default, the Collateral Agent, personally or by its agents or attorneys, and
subject to the rights of any tenant under any lease or sublease of the
Collateral, to the fullest extent permitted by Law, may enter upon any land
owned or leased by the Grantor without being guilty of trespass or any
wrongdoing, and without liability to the Grantor for damages thereby occasioned.
 
Section 6.07 Compliance With Limitations and Restrictions. The Grantor hereby
agrees that in respect of any sale of any of the Collateral pursuant to the
terms hereof, the Collateral Agent is hereby authorized to comply with any
limitation or restriction in connection with such sale as the Collateral Agent
may be advised by counsel is necessary in order to avoid any violation of
applicable Laws, or in order to obtain any required approval of the sale or of
the purchaser by any Governmental Authority or official, and the Grantor further
agrees that such compliance shall not result in such sale being considered or
deemed not to have been made in a commercially reasonable manner, nor shall the
Collateral Agent be liable or accountable to the Grantor for any discount
allowed by reason of the fact that such Collateral is sold in compliance with
any such limitation or restriction.
 
Section 6.08 No Impairment of Remedies. If, in the exercise of any of its rights
and remedies hereunder, the Collateral Agent forfeits any of its rights or
remedies, including any right to enter a deficiency judgment against the Grantor
or any other Person, whether because of any applicable Law pertaining to
"election of remedies" or otherwise, the Grantor hereby consents to such action
by the Collateral Agent and, to the extent permitted by applicable Law, waives
any claim based upon such action, even if such action by the Collateral Agent
would result in a full or partial loss of any rights of subrogation,
indemnification or reimbursement that the Grantor might otherwise have had but
for such action by the Collateral Agent or the terms herein. Any election of
remedies that results in the denial or impairment of the right of the Collateral
Agent to seek a deficiency judgment against any of the parties to any of the
Financing Documents shall not, to the extent permitted by applicable Law, impair
the Grantor's obligations hereunder.
 
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ARTICLE VII
FURTHER ASSURANCES
 
Section 7.01 Attorney-in-Fact. (a) The Grantor hereby constitutes and appoints
the Collateral Agent, acting for and on behalf of itself and the Senior Secured
Parties and each successor or permitted assign of the Collateral Agent and the
Senior Secured Parties, the true and lawful attorney-in-fact of the Grantor,
with full power and authority in the place and stead of the Grantor and in the
name of the Grantor, the Collateral Agent or otherwise to enforce all rights,
interests and remedies of the Grantor with respect to the Collateral or enforce
all rights, interests and remedies of the Collateral Agent under this Agreement
(including the rights set forth in Article VI (Remedies Upon an Event of
Default); provided, however, that the Collateral Agent shall not exercise any of
the aforementioned rights unless an Event of Default has occurred and is
continuing and has not been waived or cured in accordance with the Financing
Documents. This power of attorney is a power coupled with an interest and shall
be irrevocable; provided, however, that nothing in this Agreement shall prevent
the Grantor from, prior to the exercise by the Collateral Agent of any of the
aforementioned rights, undertaking the Grantor's operations in the ordinary
course of business with respect to the Collateral, in accordance with the
Collateral and the Financing Documents.
 
(b)  In addition to the provisions of Section 7.01(a), if the Grantor fails to
perform any agreement or obligation contained herein to protect or preserve the
Collateral, and such failure continues for ten (10) days following delivery of
written notice by the Collateral Agent to the Grantor, the Collateral Agent
itself may perform, or cause performance of, such agreement or obligation, and
the reasonable expenses of the Collateral Agent incurred in connection therewith
shall be payable by the Grantor and shall be secured by the Collateral.
 
Section 7.02 Filing of Financing and Continuation Statements. The Grantor hereby
authorizes the filing of any financing statements or continuation statements,
and amendments to financing statements, or any similar document in any
jurisdictions and with any filing offices as the Collateral Agent or any Senior
Secured Party may determine, in its sole discretion, are necessary or advisable
to perfect, or preserve the validity, perfection or priority of, the security
interest granted to the Collateral Agent, for the benefit of the Senior Secured
Parties, herein. Such financing statements may describe the Collateral in the
same manner as described herein or may contain an indication or description of
the Collateral that describes such property in any other manner as the
Collateral Agent may determine, in its sole discretion, is necessary, advisable
or prudent to ensure the perfection of the security interest in the Collateral
granted to the Collateral Agent herein, including describing such property as
"all assets" or "all personal property", whether now owned or hereafter
acquired.
 
Section 7.03 Termination of Security Interest. Upon the Discharge Date, this
Agreement and the security interest and all other rights granted hereby shall
terminate on the Discharge Date and all rights to the Collateral shall revert to
the Grantor. Upon any such termination, the Collateral Agent shall, at the
Grantor's expense and upon its written direction, promptly return all
instruments previously delivered to the Collateral Agent representing any
Collateral and execute and, subject to Section 8.11 (Reinstatement), deliver to
the Grantor such documents (including UCC-3 termination statements) as the
Grantor shall reasonably request to evidence such termination, to release all
security interest on the Collateral and to return such Collateral to the
Grantor.
 
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Section 7.04 Limitation on Duty of Collateral Agent with Respect to the
Collateral. The powers conferred on the Collateral Agent hereunder are solely to
protect its interest and the interests of the Senior Secured Parties in the
Collateral and shall not impose any duty on the Collateral Agent or any of its
designated agents to exercise any such powers. Except for (a) the safe custody
of any Collateral in its possession, (b) the accounting for monies actually
received by it hereunder, (c) the exercise of reasonable care in the custody and
preservation of the Collateral in its possession, and (d) any duty expressly
imposed on the Collateral Agent by applicable Law with respect to any Collateral
that has not been waived by the Grantor hereunder, the Collateral Agent shall
have no duty with respect to any Collateral and no implied duties or obligations
shall be read into this Agreement against the Collateral Agent. The Collateral
Agent shall be deemed to have exercised reasonable care in the custody and
preservation of the Collateral in its possession if the Collateral is accorded
treatment that is substantially equivalent to that which the Collateral Agent
accords its own property, it being expressly agreed, to the maximum extent
permitted by applicable Law, that the Collateral Agent shall have no
responsibility for (i) taking any necessary steps to preserve rights against any
parties with respect to any Collateral or (ii) taking any action to protect
against any diminution in value of the Collateral, but, in each case, the
Collateral Agent may do so and all expenses reasonably incurred in connection
therewith shall be part of the Obligations.
 
Section 7.05 Rights of Collateral Agent. The Collateral Agent shall be entitled
to the rights, protections, immunities and indemnities set forth in the Credit
Agreement as if specifically set forth herein.
 
Section 7.06 Application of Proceeds. Upon the occurrence and during the
continuation of an Event of Default, the proceeds of any sale of, or other
realization upon, all or any part of the Collateral shall be applied in
accordance with Section 9.04 (Application of Proceeds) of the Credit Agreement.
The Grantor shall remain liable for any deficiency in accordance with the
respective Financing Documents to which it is a party.
 
Section 7.07 Collateral Agent May Perform. Upon the occurrence and during the
continuance of an Event of Default, if the Grantor fails to perform any
agreement contained herein, the Collateral Agent may itself perform, or cause
performance of, such agreement, and the reasonable expenses of the Collateral
Agent incurred in connection therewith shall be part of the Obligations.
 
ARTICLE VIII
MISCELLANEOUS
 
Section 8.01 Amendments; Etc. This Agreement may not be amended, modified or
supplemented, except in a writing signed by each of the parties hereto and
otherwise in accordance with the provisions of Section 11.01 (Amendments, Etc.)
of the Credit Agreement.
 
Section 8.02 Applicable Law; Jurisdiction; Etc. (a) GOVERNING LAW. THIS
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK, UNITED STATES OF AMERICA WITHOUT REFERENCE TO CONFLICTS
OF LAWS (OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW).
 
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(b)  SUBMISSION TO JURISDICTION. THE GRANTOR IRREVOCABLY AND UNCONDITIONALLY
SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NON­EXCLUSIVE JURISDICTION OF THE
COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED
STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE
COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR ANY OTHER FINANCING DOCUMENT, OR FOR RECOGNITION OR
ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND
UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT. EACH OF THE
PARTIES HERETO 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. NOTHING IN THIS AGREEMENT OR IN
ANY OTHER FINANCING DOCUMENT SHALL AFFECT ANY RIGHT THAT THE COLLATERAL AGENT OR
ANY OTHER SENIOR SECURED PARTY MAY OTHERWISE HAVE TO BRING ANY ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER FINANCING DOCUMENT AGAINST
THE GRANTOR OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.
 
(c)  WAIVER OF VENUE. THE GRANTOR IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR ANY OTHER FINANCING DOCUMENT IN ANY COURT
REFERRED TO IN SECTION 8.02(b). EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN
INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH
COURT.
 
(d)  Appointment of Process Agent and Service of Process. Appointment of Process
Agent and Service of Process. The Grantor hereby irrevocably appoints CT
Corporation System with an office on the date hereof at 111 Eighth Avenue, New
York, New York 10011, as its agent to receive on behalf of itself and its
property services of copies of the summons and complaint and any other process
that may be served in any such action or proceeding in the State of New York. If
for any reason the Process Agent shall cease to act as such for the Grantor, the
Grantor hereby agrees to designate a new agent in New York City on the terms and
for the purposes of this Section 8.02 reasonably satisfactory to the Collateral
Agent. Such service may be made by mailing or delivering a copy of such process
to the Grantor, in care of the Process Agent at the Process Agent's above
address, and the Grantor hereby irrevocably authorizes and directs the Process
Agent to accept such service on its behalf. As an alternative method of service,
the Grantor also irrevocably consents to the service of any and all process in
any such action or proceeding by the air mailing of copies of such process to
the Grantor, at its then effective notice addresses pursuant to Section 8.09
(Notices).
 
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(e)  Immunity. To the extent that the Grantor has or hereafter may acquire any
immunity from jurisdiction of any court or from any legal process (whether
through service or notice, attachment prior to judgment, attachment in aid of
execution, execution or otherwise) with respect to itself or its property, the
Grantor hereby irrevocably and unconditionally waives such immunity in respect
of its obligations under the Financing Documents and, without limiting the
generality of the foregoing, agrees that the waivers set forth in this Section
8.02(e) shall have the fullest scope permitted under the Foreign Sovereign
Immunities Act of 1976 of the United States and are intended to be irrevocable
for purposes of such Act.
 
(f)  WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON
CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (i) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (ii) ACKNOWLEDGES THAT IT AND THE OTHER
PARTY HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER
FINANCING DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 8.02(f).
 
Section 8.03 Counterparts; Effectiveness. This Agreement may be executed in
counterparts (and by different parties hereto in different counterparts), each
of which shall constitute an original, but all of which when taken together
shall constitute a single contract. This Agreement shall become effective when
it has been executed by the Collateral Agent and when the Collateral Agent has
received counterparts hereof that bear the signature of the Grantor. Delivery of
an executed counterpart of a signature page of this Agreement by telecopy or
portable document format ("pdf') shall be effective as delivery of a manually
executed counterpart of this Agreement.
 
Section 8.04 Delay Not Waiver; Separate Causes of Action. No delay or omission
to exercise any right, power or remedy accruing to the Collateral Agent upon the
occurrence of any Event of Default shall impair any such right, power or remedy
of the Collateral Agent, nor shall it be construed to be a waiver of any such
Event of Default, or an acquiescence therein, or of or in any other breach or
default thereafter occurring, nor shall any waiver of any other breach or
default under this Agreement or any other Financing Document be deemed a waiver
of any other breach or default theretofore or thereafter occurring. Any waiver,
permit, consent or approval of any kind or character on the part of the
Collateral Agent of any breach or default under this Agreement, or any waiver on
the part of the Senior Secured Parties or the Collateral Agent of any provision
or condition of this Agreement, must be in writing and shall be effective only
to the extent specifically set forth in such writing. Each and every default by
the Grantor in payment hereunder shall give rise to a separate cause of action
hereunder, and separate suits may be brought hereunder as each cause of action
arises.
 
6.04(g)-C - 23

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Section 8.05 Entire Agreement. This Agreement, together with the other Financing
Documents, is intended by the parties as a final expression of their agreement
and is intended as a complete and exclusive statement of the terms and
conditions thereof.
 
Section 8.06 Expenses. The Grantor agrees to pay on demand to the Collateral
Agent all costs and expenses incurred by the Collateral Agent (including fees,
expenses and disbursements of counsel) incident to its enforcement, exercise,
protection or preservation of any of its rights, remedies or claims (or the
rights or claims of any Senior Secured Party) under this Agreement.
 
Section 8.07 Headings Descriptive. Article and Section headings have been
inserted in this Agreement as a matter of convenience for reference only and it
is agreed that such article and section headings are not a part of this
Agreement and shall not be used in the interpretation of any provision of this
Agreement.
 
Section 8.08 Interest. Any amount required to be paid by the Grantor pursuant to
the terms hereof that is not paid when due shall bear interest at the Default
Rate or the maximum rate permitted by Law, whichever is less, from the date due
until paid in full in cash.
 
Section 8.09 Notices. (a) All notices, requests, demands or other communications
provided for herein (including, without limitation, any modifications of or
waivers or consents under, this Agreement) shall be given or made in writing in
the manner set out in Section 11.12 (Notices and Other Communications) of the
Credit Agreement and to the addresses set forth below:
 
If to the Grantor:
 
[ADDRESS]

 

  Attention: [_____________]   Telephone: [_____________]   Facsimile:
[_____________]   E-mail: [_____________]

 
If to the Collateral Agent: [ADDRESS]
 

  Attention: [_____________]   Telephone: [_____________]   Facsimile:
[_____________]   E-mail: [_____________]

 
6.04(g)-C - 24

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(b)  Each of the parties hereto may change its address, telecopier or telephone
number or e-mail address for notices and other communications hereunder by
notice to the other parties hereto.
 
Section 8.10 No Waiver; Cumulative Remedies. No failure by the Collateral Agent
to exercise, and no delay by the Collateral Agent in exercising, any right,
remedy, power or privilege hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise of any right, remedy, power or privilege
hereunder preclude any other or further exercise thereof or the exercise of any
other right, remedy, power or privilege.
 
Section 8.11 Reinstatement. This Agreement and the obligations of the Grantor
hereunder shall automatically be reinstated if and to the extent that for any
reason any payment made pursuant to this Agreement is rescinded or must
otherwise be restored or returned, whether as a result of any proceedings in
bankruptcy or reorganization or otherwise with respect to the Grantor or any
other Person or as a result of any settlement or compromise with any Person
(including the Grantor) in respect of such payment, and the Grantor shall pay
the Collateral Agent on demand all of its reasonable costs and expenses
(including reasonable fees, expenses and disbursements of counsel) incurred by
the Collateral Agent in connection with such rescission or restoration.
 
Section 8.12 Remedies Cumulative. No right, power or remedy herein conferred
upon or reserved to the Collateral Agent hereunder is intended to be exclusive
of any other right, power or remedy, and every such right, power and remedy
shall, to the extent permitted by applicable Law, be cumulative and in addition
to every other right, power and remedy given hereunder or under any other
Financing Document now or hereafter existing at Law or in equity or otherwise.
The assertion or employment of any right or remedy hereunder, or otherwise,
shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy. Resort to any or all security now or hereafter held
by the Collateral Agent or any other Senior Secured Party, may be taken
concurrently or successively and in one or several consolidated or independent
judicial actions or lawfully taken nonjudicial proceedings, or both.
 
Section 8.13 Rights of Collateral Agent. The Collateral Agent shall be entitled
to the rights, protections, immunities and indemnities set forth in the Credit
Agreement as if specifically set forth herein. With respect to the duties,
obligations and rights of the Collateral Agent, if any conflict between the
terms of this Agreement and the terms of the Credit Agreement arises, the terms
of the Credit Agreement shall govern and control.
 
Section 8.14 Severability. If any provision of this Agreement is held to be
illegal, invalid or unenforceable, (a) the legality, validity and enforceability
of the remaining provisions of this Agreement shall not be affected or impaired
thereby and (b) the parties shall endeavor in good faith negotiations to replace
the illegal, invalid or unenforceable provisions with valid provisions the
economic effect of which comes as close as possible to that of the illegal,
invalid or unenforceable provisions. The invalidity of a provision in a
particular jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction.
 
6.04(g)-C - 25

--------------------------------------------------------------------------------

 
Section 8.15 Successions and Assignments. This Agreement shall create a
continuing pledge and assignment of and security interest in the Collateral and
shall (a) remain in full force and effect until the Discharge Date and as
otherwise provided in Section 8.16 (Survival of Provisions); (b) be binding upon
the Grantor and its successors and assigns; and (c) inure, together with the
rights and remedies of the Collateral Agent, to the benefit of the Collateral
Agent, the Senior Secured Parties and their respective successors and permitted
assigns. The release of the security interest in any of the Collateral, the
taking or acceptance of additional security, or the resort by the Collateral
Agent to any security it may have in any order it may deem appropriate, shall
not affect the liability of any Person on the indebtedness secured hereby,
except for release of Collateral upon the Discharge Date. The Grantor is not
entitled to assign its obligations hereunder to any other Person without the
written consent of the Collateral Agent, and any purported assignment in
violation of this provision shall be void.
 
Section 8.16 Survival of Provisions. All agreements, representations and
warranties made herein shall survive the execution and delivery of this
Agreement and the Financing Documents and the making of the Loans and extensions
of credit under the Credit Agreement. Notwithstanding anything in this Agreement
or implied by Law to the contrary, the agreements of the Grantor set forth
herein shall terminate at the same time as the security interest and other
rights granted hereunder shall terminate pursuant to Section 7.03 (Termination
of Security Interest).
 
Section 8.17 Third Party Rights. Nothing in this Agreement, expressed or
implied, is intended or shall be construed to confer upon, or give to any
Person, other than the Grantor, the Collateral Agent and the Senior Secured
Parties, and each of their successors and permitted assigns under this Agreement
or any other Financing Document, any security, rights, remedies or claims, legal
or equitable, under or by reason hereof, or any covenant or condition hereof;
and this Agreement and the covenants and agreements herein contained are and
shall be held to be for the sole and exclusive benefit of the Grantor, the
Collateral Agent and the Senior Secured Parties, and each of their successors
and permitted assigns under this Agreement or any other Financing Document.
 
Section 8.18 Time. Time is of the essence of this Agreement.
 
Section 8.19 Waiver of Consequential Damages, Etc. To the fullest extent
permitted by applicable Law, the Grantor shall not assert, and the Grantor
hereby waives, any claim against any Indemnitee, on any theory of liability, for
special, indirect, consequential or punitive damages (as opposed to direct or
actual damages) arising out of, in connection with, or as a result of, this
Agreement, any other Financing Document, or any agreement or instrument
contemplated hereby, the transactions contemplated hereby or thereby, any Loan
or the use of the proceeds thereof. No Indemnitee shall be liable for any
damages arising from the use by unintended recipients of any information or
other materials distributed by it through telecommunications, electronic or
other information transmission systems in connection with this Agreement or the
other Financing Documents or the transactions contemplated hereby or thereby.
 
Section 8.20 Waiver of Litigation Payments. To the extent that the Grantor may,
in any action, suit or proceeding brought in any of the courts referred to in
Section 8.02 (Applicable Law; Jurisdiction; Etc.) or elsewhere arising out of or
in connection with this Agreement or any other Financing Document to which it is
a party, be entitled to the benefit of any provision of Law requiring the
Collateral Agent or any Senior Secured Party in such action, suit or proceeding
to post security for the costs of such Grantor or to post a bond or to take
similar action, the Grantor hereby irrevocably waives such benefit, in each case
to the fullest extent now or in the future permitted under the Laws of New York
or, as the case may be, the jurisdiction in which such court is located.
 
[The remainder of this page is intentionally blank. The next page is the
signature page.]
 
6.04(g)-C - 26

--------------------------------------------------------------------------------

 
IN WITNESS WHEREOF, the parties hereto, by their officers duly authorized,
intending to be legally bound, have caused this Assignment and Security
Agreement to be duly executed and delivered as of the date first above written.
 

 

 
[____________________________________],
as Grantor
            By: ______________________________      Name:     Title:            
             
[____________________________________],
as Collateral Agent
              By: ______________________________      Name:     Title:

 
6.04(g)-C - 27

--------------------------------------------------------------------------------

 
Schedule 2.01
to the Assignment and Security Agreement
 
ASSIGNED AGREEMENTS
 
[To be provided]
 
 
 
 
 
 
6.04(g)-C - 28

--------------------------------------------------------------------------------

 
 
EXHIBIT 6.05(c)
to Credit Agreement
 
[FORM OF]
INDEPENDENT ENGINEER'S CERTIFICATE
 
[Letterhead of Independent Engineer]

[DATE]

WestLB AG, New York Branch,
as Administrative Agent for the Lenders
1211 Avenue of the Americas
NY, New York 10036
Attention: Yolette Salnave / Andrea Bailey
Facsimile: 212-302-7946
Email: ny_agency services@westlb.com

Re:
[PACIFIC ETHANOL STOCKTON, LLC] [PACIFIC ETHANOL IMPERIAL, LLC]
[PACIFIC ETHANOL MAGIC VALLEY, LLC]

 
Ladies and Gentlemen:

The undersigned, a duly authorized representative of [__________] (the
"Independent Engineer"), hereby provides this letter to you in accordance with
Section 6.05(c) of that certain Credit Agreement (as amended, supplemented or
otherwise modified from time to time, the "Credit Agreement"), dated as of
February __, 2007, by and among PACIFIC ETHANOL HOLDING CO. LLC, a Delaware
limited liability company, PACIFIC ETHANOL MADERA LLC, a Delaware limited
liability company, PACIFIC ETHANOL COLUMBIA, LLC, a Delaware limited liability
company, PACIFIC ETHANOL STOCKTON, LLC, a Delaware limited liability company,
PACIFIC ETHANOL IMPERIAL, LLC, a Delaware limited liability company and PACIFIC
ETHANOL MAGIC VALLEY, LLC, a Delaware limited liability company, as Borrowers,
PACIFIC ETHANOL HOLDING CO. LLC, as Borrowers' Agent, each of the Lenders from
time to time party thereto, WESTLB AG, NEW YORK BRANCH, as Administrative Agent
for the Lenders, WESTLB AG, NEW YORK BRANCH, as Collateral Agent for the Senior
Secured Parties, UNION BANK OF CALIFORNIA, as Accounts Bank, WESTLB AG, NEW YORK
BRANCH, as Lead Arranger and Sole Bookrunner, MIZUHO CORPORATE BANK, LTD., as
Lead Arranger and Co-Syndication Agent, CIT CAPITAL SECURITIES LLC, as Lead
Arranger and Co-Syndication Agent, COOPERATIEVE CENTRALE
RAIFFEISEN-BOERENLEENBANK B.A., "RABOBANK NEDERLAND", NEW YORK BRANCH, as Lead
Arranger and Co-Documentation Agent, and BANCO SANTANDER CENTRAL HISPANO S.A,
NEW YORK BRANCH, as Lead Arranger and Co-Documentation Agent. Capitalized terms
used herein but not otherwise defined herein shall have the respective meanings
set forth in the Credit Agreement.
 
6.05(c) – 1

--------------------------------------------------------------------------------

 
The Independent Engineer acknowledges that pursuant to the Credit Agreement, the
Lenders will be providing financing to the Borrowers for the construction of the
Project and in so doing will be relying on this certificate and the Independent
Engineer's report dated [________]. [This Independent Engineer's Certificate is
being delivered as a condition to the initial Funding for the [Stockton]
[Brawley] [Burley] Plant and the Independent Engineer's report attached hereto
as Exhibit A represents the Independent Engineer's professional opinion based on
the documentation provided by the Borrowers. The Independent Engineer certifies
that (i) the copy of the Independent Engineer's report attached hereto as
Exhibit A is true, correct and complete, (ii) such report represents the
Independent Engineer's professional opinion as of the date thereof and (iii)
since the date of such report, nothing has come to our attention that would
cause us to change such report.]1
 
The Independent Engineer certifies that it has reviewed the Funding Notice dated
[_______, 200[_]] (the "Current Funding Notice") and the reports and documents
attached thereto and other material relating to the Project as it believes are
necessary to establish the accuracy of this certificate. The Independent
Engineer's review and observations were performed within the scope of our
professional service agreement with the Administrative Agent and in accordance
with generally accepted technical consulting practice, including such
investigations, observations and review as we in our professional capacity
deemed necessary under the circumstances. Based on the foregoing review and
review procedures and on the understanding and assumption that we have been
provided true, correct, and complete information from the Borrowers (including
all information provided by contractors or subcontractors and attached to the
Current Funding Notice) as to the matters covered by the Current Funding Notice,
as of the date of the Current Funding Notice, we are providing the
certifications and opinions herein.
 
The Independent Engineer further certifies that:
 
(i)  the Independent Engineer believes that the Commercial Operation Date for
the [Stockton] [Brawley] [Burley] Plant will occur on or prior to the Conversion
Date Certain;
 
(ii)  it is the opinion of the Independent Engineer that sufficient funds remain
available to the Borrowers, including under this Agreement and under the Sponsor
Support Agreement, to complete such Plant in accordance with the applicable
Construction Schedule and the Transaction Documents', except as set forth in
Exhibit B hereto];
 
(iii)  it is the opinion of the Independent Engineer, based on our best
knowledge, that the statements contained in the Current Funding Notice are true
and correct[, except as set forth on Exhibit B hereto];
 
_______________________________________
 
1 Note: to be included only for the initial Funding Notice with respect to each
Greenfield Plant.

6.05(c) – 2

--------------------------------------------------------------------------------

 
[(iv)  [it is the opinion of the Independent Engineer that as of the date
hereof, no changes are required to the Construction Budget for the [Stockton]
[Brawley] [Burley] Plant delivered pursuant to Section 6.01(q) (Conditions to
Closing —Budgets and Schedules) of the Credit Agreement;] [it is the opinion of
the Independent Engineer that the increase in costs between the Construction
Budget delivered pursuant to such Section 6.01(q) of the Credit Agreement and
the updated Construction Budget delivered pursuant to such Section 6.04(h) of
the Credit Agreement is equal to [___________] Dollars ($[_________]) and, to
the best of the Independent Engineer's knowledge, such amount has been deposited
into the Construction Account for such Plant or has previously been applied to
pay Project Costs for such Plant (in each case, from sources other than the
Loans, Cash Flow or the Sponsor Support Agreement);]] [Note: Select one.]
 
[(v)  the Independent Engineer has received a copy of (a) each Work Schedule
provided for in any Construction Contract for the [Stockton] [Brawley] [Burley]
Plant and (b) each Schedule of Values provided for in any such Construction
Contract, each of which is in form and substance reasonably satisfactory to the
Independent Engineer;]1 [Note: if applicable] and
 
(vi)  in addition, the Independent Engineer further certifies that, except as
set forth in Exhibit B hereto, it has no knowledge of any event of force majeure
under any Project Document nor of any Funding Default or Event of Default that
has occurred and is continuing.
 
 
[The remainder of this page is intentionally blank. The next page is the
signature page.]

 
6.05(c) – 3

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the undersigned has caused this Independent Engineer's
Certificate to be duly executed by an authorized offer as of the date first
above written.
 
 

  [___________],            By:  _____________________________________    Name: 
  Title: 

 

 

 
6.05(c) – 4

--------------------------------------------------------------------------------

EXHIBIT A
to Independent Engineer's Certificate

INDEPENDENT ENGINEER'S REPORT

[Note: to be included only with respect to the initial Funding for each
Greenfield Plant.]

 
 
 
6.05(c) - Exhibit A

--------------------------------------------------------------------------------

EXHIBIT B
to Independent Engineer's Certificate
 
[EXCEPTIONS]

 

 
 
 
6.05(c) - Exhibit B

--------------------------------------------------------------------------------

 
EXHIBIT 7.01(y)
to Credit Agreement
 
[FORM OF]
FINAL COMPLETION CERTIFICATE

To:
WESTLB AG, NEW YORK BRANCH,
as Administrative Agent under the Credit Agreement
referred to below

 

Date: [_________]

Re:
[Madera] [Boardman] [ Stockton] [Brawley] [Burley] Plant

Reference is hereby made to the Credit Agreement (as amended, supplemented or
otherwise modified from time to time, the "Credit Agreement"), dated as of
February __, 2007 by and among PACIFIC ETHANOL HOLDING CO. LLC, a Delaware
limited liability company, PACIFIC ETHANOL MADERA LLC, a Delaware limited
liability company, PACIFIC ETHANOL COLUMBIA, LLC, a Delaware limited liability
company, PACIFIC ETHANOL STOCKTON, LLC, a Delaware limited liability company,
PACIFIC ETHANOL IMPERIAL, LLC, a Delaware limited liability company and PACIFIC
ETHANOL MAGIC VALLEY, LLC, a Delaware limited liability company, as Borrowers,
PACIFIC ETHANOL HOLDING CO. LLC, as Borrowers' Agent, each of the Lenders from
time to time party thereto, WESTLB AG, NEW YORK BRANCH, as Administrative Agent
for the Lenders, WESTLB AG, NEW YORK BRANCH, as Collateral Agent for the Senior
Secured Parties, UNION BANK OF CALIFORNIA, N.A. as Accounts Bank, WESTLB AG, NEW
YORK BRANCH, as Lead Arranger and Sole Bookrunner, MIZUHO CORPORATE BANK, LTD.,
as Lead Arranger and Co-Syndication Agent, CIT CAPITAL SECURITIES LLC, as Lead
Arranger and Co-Syndication Agent, COOPERATIEVE CENTRALE
RAIFFEISEN­BOERENLEENBANK B.A., "RABOBANK NEDERLAND", NEW YORK BRANCH, as Lead
Arranger and Co-Documentation Agent, and BANCO SANTANDER CENTRAL HISPANO S.A,
NEW YORK BRANCH, as Lead Arranger and Co-Documentation Agent. Capitalized terms
used herein but not otherwise defined herein shall have the respective meanings
set forth in the Credit Agreement.

 
7.01(y) – 1

--------------------------------------------------------------------------------

This Final Completion Certificate is the Final Completion Certificate for the
[Madera] [Boardman] [Stockton] [Brawley] [Burley] Plant, and is delivered to the
Administrative Agent pursuant to Section 7.01(y) of the Credit Agreement.
 
The undersigned, on behalf of the Borrowers' Agent, hereby represents and
certifies as follows:
 
1.  the individual executing this Final Completion Certificate on behalf of the
Borrowers' Agent is an Authorized Officer of the Borrowers' Agent;
 
2.  the Commercial Operation Date for such Plant occurred on [insert date];
 
3.  the final air emissions test for such Plant has been satisfactorily
completed;
 
4.  the insurance required pursuant to Schedule 7.01(h) with respect to such
Plant, and required of the Borrowers under any Project Document relating to such
Plant, is in place, as confirmed by the Insurance Consultant; and
 
5.  all construction costs for such Plant have been fully paid (other than
amounts that are subject to a Contest).
 
The undersigned, on behalf of the Independent Engineer, hereby represents and
certifies as follows:
 
1.  the individual executing this Final Completion Certificate on behalf of the
Independent Engineer is an authorized representative of the Independent
Engineer;
 
2.  the Independent Engineer has previously executed the Commercial Operation
Date Certificate for such Plant, which certificate was dated as of [insert
date];
 
3.  based on information provided by the Borrowers and third-party air emissions
test results reviewed by the Independent Engineer, it is the opinion of the
Independent Engineer that the final air emissions test for such Plant has been
completed in a manner satisfactory to the Independent Engineer; and
 
4.  based on documentation requested by the Independent Engineer and received
from the Borrowers, all construction costs for such Plant payable to the
Construction Contractors, and all other material construction work with respect
to which the Independent Engineer has requested evidence of payment, have been
fully paid other than amounts that (based on documentation received from the
Borrowers) are subject to a Contest.
 
 
7.01(y) – 2

--------------------------------------------------------------------------------

 
Each undersigned person is executing this Final Completion Certificate not in an
individual capacity but in its capacity as an Authorized Officer of the
Borrowers' Agent or as an authorized representative of the Independent Engineer,
as applicable.

 
[The remainder of this page is intentionally blank. The next page is the
signature page.]

 
7.01(y) – 3

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the undersigned have caused this Final Completion
Certificate to be duly executed as of the date first above written.
 
 

 
PACIFIC ETHANOL HOLDING CO. LLC,
as Borrowers' Agent

By:  __________________________________
Name:
Title:

[_________________]
as Independent Engineer
 
By:  __________________________________
Name:
Title:

 

 

 
7.01(y) – 4

--------------------------------------------------------------------------------

 
Exhibit 7.02(i)
to the Credit Agreement
 
SPECIAL DEPOSIT ACCOUNT CONTROL AGREEMENT
(Security Interest in Deposit Account-Contingency)

To:
[Insert Name and Address of Local Bank]

Re:
Borrower:[______________]

Secured Party: WestLB AG, New York Branch, as Collateral Agent for the Senior
Secured Parties

Account Numbers: [Insert Account Numbers]

Dear [__________]:

1.  Security Interest in Special Deposit Account. This shall serve as notice to
[_________] ("Bank") that the Borrowers named above (jointly and severally, the
"Borrower") has assigned and granted to the Secured Party named above ("Secured
Party") a security interest in certain assets of Borrower, including among other
things, all checks, drafts, and other instruments deposited in the accounts
(collectively and individually, the "Special Deposit Account") designated above
maintained by Borrower with Bank, and any and all future deposits thereto, and
any and all proceeds thereof, including any interest earned thereon.
 
2.  Bank Acknowledgment. Bank acknowledges that Bank has received notice of
Secured Party's security interest in the Special Deposit Account. For so long as
this Agreement remains in effect, Bank subordinates its rights of chargeback,
setoff and/or banker's lien against the Special Deposit Account, provided,
however, that nothing herein constitutes a subordination or waiver of, and Bank
expressly reserves all of, its present and future rights (whether described as
rights of setoff, banker's lien, chargeback or otherwise and whether available
to Bank at law, in equity, under the Commercial Code, under any other agreement
between Bank and Borrower concerning the Special Deposit Account or otherwise)
with respect to (a) Items (as defined in section 6 of this Agreement) deposited
to the Special Deposit Account that are returned unpaid, whether for
insufficient funds or for any other reason; (b) claims of breach of any of the
warranties set forth in Sections 3416, 3417, 4207, 4208 or 4209 of the
California Commercial Code; (c) overdrafts in the Special Deposit Account; (d)
Bank's usual and customary charges for services rendered in connection with the
Special Deposit Account; and (e) obligations and liabilities arising out of any
cash management or deposit services provided by Bank or third party vendors in
connection with the Special Deposit Account including, but not limited to,
Automated Clearing House transactions ("ACH"), payroll services, and controlled
disbursement services. Secured Party acknowledges and agrees that its security
interest in the Special Deposit Account is subordinate to the rights reserved by
Bank in this paragraph.
 
7.02(i) – 1

--------------------------------------------------------------------------------

 
3.  Returned Items and Fees. Bank will charge the Special Deposit Account for
Items deposited to the Special Deposit Account that are returned unpaid or
returned for any reason and for Bank's fees and charges relating to the Special
Deposit Account. Bank reserves the right to place a hold on funds deposited to
the Special Deposit Account to the extent permitted by Federal Reserve
Regulation CC. Following Bank's receipt of a written Notice of Control (as
defined in Section 4 of this Agreement), Secured Party agrees to reimburse Bank
upon demand for Bank's fees, charges, and returned Items if there are
insufficient funds in the Special Deposit Account to cover such fees, charges,
and returned Items.
 
4.  Control of Special Deposit Account by Secured Party. Bank, Secured Party and
Borrower agree that Bank will comply with written instructions ("Orders")
originated by Secured Party for the disposition of funds in the Special Deposit
Account without further consent from Borrower and without regard to any
inconsistent or conflicting Orders given by Borrower to Bank. Notwithstanding
the foregoing, unless and until Secured Party delivers to the Banking Office
Orders directing Bank not to act on Borrower's Orders ("Notice of Control"), and
until such time as the Secured Party revokes in writing such Notice of Control
(which the Secured Party shall promptly do once the applicable Event of Default
ceases to exist under the Credit Agreement, dated as of February , 2007 (the
"Credit Agreement"), among the Borrowers, the Secured Party and the other
parties thereto)), Bank may continue to comply with Orders originated by
Borrower. Secured Party may only deliver such Notice of Control during the
continuance of an Event of Default (as defined in the Credit Agreement). Bank
shall have no liability in the event Borrower breaches this covenant to Secured
Party.
 
5.  Release of Security Interest; Termination of Agreement. This Agreement shall
remain in full force and effect until Bank receives at the Banking Office
Secured Party's written notice of release of its interest in, or assignment to
Borrower of, the Special Deposit Account ("Secured Party's Release") (which the
Secured Party agrees to deliver upon the occurrence of the Discharge Date).
Notwithstanding the foregoing, any of Secured Party, Borrower or Bank may
terminate this Agreement by giving 30 days' written notice to the other parties.
However, in the event that the Special Deposit Account is not handled in a
satisfactory manner by any Borrower or Secured Party, Bank reserves the right to
terminate the Agreement upon 10 day's prior written notice to Borrower and
Secured Party. Following such termination Bank shall pay any balance of funds in
the Special Deposit Account to the Revenue Account (as defined in the Credit
Agreement), or as otherwise directed by, or with the approval of, Secured Party.
Termination shall not affect the duties or responsibilities of any party hereto
arising out of transactions occurring prior to termination.
 
6.  Deposits by Borrower or Secured Party. For so long as this Agreement remains
in force, Bank may accept for deposit into the Special Deposit Account, any
checks, electronic or paper drafts, electronic payment orders and credits or
other instruments for the payment of money (as used in this Agreement, each an
"Item" and collectively "Items") payable or endorsed to Borrower, to Secured
Party, to both of them, or to cash or bearer, whether endorsed or unendorsed.
 
7.02(i) – 2

--------------------------------------------------------------------------------

 
7.  Wire Transfers. Upon Bank's receipt of a written Notice of Control, unless
Secured Party directs Bank in writing to the contrary, Borrower, Secured Party
and Bank hereby agree Bank will wire, on each business day, collected balances
in the Special Deposit Account to the Revenue Account (as defined in the Credit
Agreement), or as otherwise designated in writing by the Secured Party to Bank.
 
Secured Party and Borrower acknowledge notice that under the California
Commercial Code division 11-207(c)(2) if a beneficiary of a funds transfer is
designated by both name and account number the payment may be made according to
the account number even if the name and account number are inconsistent and
identify different parties.
 
8.  Documentation. Secured Party agrees that before it attempts to give Bank any
orders or instructions concerning withdrawals or transfers from the Special
Deposit Account, Secured Party shall deliver to the Banking Office such
documentation as the Bank may reasonably require to evidence the authority of
persons acting on behalf of Secured Party to give such instructions.
 
9.  Bank's Disclaimers; Scope. Secured Party and Borrower acknowledge and agree
that; (a) Bank makes no representations or warranties, express or implied,
concerning the validity, perfection, or priority of Secured Party's security
interest in the Special Deposit Account; and (b) this Agreement applies only to
the Special Deposit Account designated above, but not to any other deposit
account, securities, bills, bonds or investment which Borrower may now or
hereafter maintain with Bank.
 
10.  Indemnification of Bank by Borrower. Borrower agrees to defend, indemnify
and hold Bank, its directors, officers, employees, attorneys, successors and
assigns, harmless from and against any and all loss, liability, cost, damage and
expense, including, without limitation, legal and accounting fees and expenses,
arising in any manner whatsoever out of (a) the acts, errors or omissions of
Borrower or Secured Party or the agent of either; and (b) Bank's acting in
accordance with the provisions of this Agreement, excepting only liability
occasioned solely by Bank's gross negligence or willful misconduct. In no event
shall any party hereto be liable for any consequential, indirect, punitive, or
special damage relating to its performance of its duties under this Agreement.
 
11.  Indemnification of Bank by Secured Party. Secured Party agrees to
indemnify, release, and hold Bank, its directors, officers, employees,
attorneys, successors and assigns, harmless from and against any and all loss,
liability, cost, damage and expense including, without limitation, legal and
accounting fees and expenses, arising in any manner whatsoever out of Bank's
acting on any notice, orders or instructions concerning the Special Deposit
Account given to Bank by Secured Party.
 
 
7.02(i) – 3

--------------------------------------------------------------------------------

 
12.  Bankruptcy; Legal Process. In the event that Borrower becomes subject to
voluntary or involuntary proceedings under the U.S. Bankruptcy Code, or if the
Bank is served with legal process which the Bank in good faith believes affects
the Special Deposit Account, Bank shall have the right to place a hold on funds
deposited to the Special Deposit Account until such time as the Bank receives an
appropriate court order or other assurances satisfactory to Bank establishing
that the funds may be disbursed according to the provisions of this Agreement.
Bank shall immediately provide Borrower and Secured Party notice of any hold
placed by Bank under this paragraph.
 
13.  Notices. Any notice given by any party under this Agreement shall be
effective only if (a) given in writing and (b) personally delivered, sent by
United States mail, postage prepaid, or sent by telecopier or other
authenticated message, charges prepaid and addressed to the address set forth
herein or in Bank's records for Borrower and Secured Party, respectively. If
notice is sent by telecopier, an originally executed notice will be sent by
overnight courier as a follow-up. Either Secured Party, Borrower, or Bank may
change the place to which notices, requests, and other communications are to be
sent by giving written notice of such change to the others.
 
Notwithstanding the foregoing, Bank shall have no obligation to act upon any
Orders, Notice of Control, Secured Party's Release, or other notices or
instructions given to Bank hereunder until received in writing at the Banking
Office address below.
 
[Insert Notice Addresses]
 
14.  Successors and Assigns; No Third Party Rights; Entire Agreement;
Amendments; California Law; Counterparts; Captions; Non-Waiver; Rights
Cumulative; Corporate/Partnership  Authority. The provisions of this Agreement
shall be binding upon and inure to the benefit of Bank, Secured Party and
Borrower and their respective successors and assigns and to no other person,
firm or entity; provided, however, that no party hereto may assign any of its
rights hereunder without the other parties' prior written consent (except that a
successor to Secured Party as Collateral Agent under the Credit Agreement shall
automatically succeed to Secured Party's rights hereunder). This Agreement
constitutes the entire agreement between Bank, on the one hand, and Secured
Party and Borrower on the other hand, concerning the subject matter hereof.
Except to the extent inconsistent herewith, all other agreements between Bank
and Secured Party or Borrower concerning the Special Deposit Account shall
remain in full force and effect. This Agreement shall be construed and
interpreted in accordance with California law. This Agreement may be executed in
counterparts, each of which shall be an original, and all of which shall
constitute but one and the same instrument. Each person signing on behalf of a
party hereto warrants that such party has performed all corporate or partnership
actions necessary to make this Agreement a binding obligation, enforceable in
accordance with its terms. No modification, amendment or alteration of this
Agreement will be effective against any party hereto unless specifically agreed
upon in a writing signed by that party.
 
 
7.02(i) – 4

--------------------------------------------------------------------------------

 
15.  Disputes. To the extent permitted by law, in connection with any claim,
cause of action, proceeding or other dispute concerning the Special Deposit
Account (each a "Claim"), the parties to this Agreement, expressly,
intentionally, and deliberately waive any right each may otherwise have to trial
by jury. In the event the waiver of jury trial set forth in the previous
sentence is not enforceable under the law applicable to this Agreement, the
parties to this Agreement agree that any Claim, including any question of law or
fact relating thereto, shall, at the written request of any party, be determined
by Judicial Reference pursuant to the state law applicable to this Agreement
("Reference"). The parties shall select a single neutral referee, who shall be a
retired state or federal judge. In the event that the parties cannot agree upon
a referee, the court shall appoint the referee. The referee shall report a
statement of decision to the court. Nothing in this paragraph shall limit the
right of any party at any time to exercise self-help remedies, foreclose against
collateral or obtain provisional remedies. The parties shall bear the fees and
expenses of the referee equally, unless the referee orders otherwise. The
referee shall also determine all issues relating to the applicability,
interpretation, and enforceability of this paragraph. The parties acknowledge
that if a referee is selected to determine the Claims, then the Claims will not
be decided by jury.
 
16.  Termination. Unless earlier terminated pursuant to Section 5 above, this
Agreement will continue in full force and effect until the Discharge Date (as
defined in the Credit Agreement). Termination shall not affect the duties or
responsibilities of any party hereto arising out of transactions occurring prior
to termination.

[Remainder of this page intentionally left blank.]

7.02(i) – 5

--------------------------------------------------------------------------------

 
The foregoing is hereby acknowledged and agreed to, effective this ___ day of
_________.
 
WestLB AG, New York Branch,
WestLB AG, New York Branch,
as Collateral Agent for the Senior Secured Parties
as Collateral Agent for the Senior Secured Parties
(SECURED PARTY)
(SECURED PARTY)
   
By: _________________________
By: _______________________
Name:
Name:
Title:
Title:
Date: _______________________
Date: _____________________
       
[________________________]
 
(BORROWER)
     
By: _________________________
 
Name:
 
Title:
 
Date: _______________________
         
[INSERT NAME OF LOCAL BANK]
(BANK)
[INSERT NAME OF LOCAL BANK]
(BANK)
   
By: _________________________
By: _______________________
Name:
Name:
Title:
Title:
Date: _______________________
Date: ______________________

 
7.02(i) – 6

--------------------------------------------------------------------------------

 
EXHIBIT 7.02(s)
to Credit Agreement

[FORM OF]
RESTRICTED PAYMENT CERTIFICATE

Date: [_____  __, ____]

[ACCOUNTS BANK]

[ADDRESS]
 
Reference is made to Section 7.02(s) and [8.08(c)] [8.13(b)] of the Credit
Agreement (as amended, supplemented or otherwise modified from time to time, the
"Credit Agreement"), dated as of February [__], 2007, by and among PACIFIC
ETHANOL HOLDING CO. LLC, a Delaware limited liability company, PACIFIC ETHANOL
MADERA LLC, a Delaware limited liability company, PACIFIC ETHANOL COLUMBIA, LLC,
a Delaware limited liability company, PACIFIC ETHANOL STOCKTON, LLC, a Delaware
limited liability company, PACIFIC ETHANOL IMPERIAL, LLC, a Delaware limited
liability company and PACIFIC ETHANOL MAGIC VALLEY, LLC, a Delaware limited
liability company, as Borrowers, PACIFIC ETHANOL HOLDING CO. LLC, as Borrowers'
Agent, each of the Lenders from time to time party thereto, WESTLB AG, NEW YORK
BRANCH, as Administrative Agent for the Lenders, WESTLB AG, NEW YORK BRANCH, as
Collateral Agent for the Senior Secured Parties, UNION BANK OF CALIFORNIA, N.A.,
as Accounts Bank, WESTLB AG, NEW YORK BRANCH, as Lead Arranger and Sole
Bookrunner, MIZUHO CORPORATE BANK, LTD., as Lead Arranger and Co-Syndication
Agent, CIT CAPITAL SECURITIES LLC, as Lead Arranger and Co-Syndication Agent,
COOPERATIEVE CENTRALE RAIFFEISEN­BOERENLEENBANK B.A., "RABOBANK NEDERLAND", NEW
YORK BRANCH, as Lead Arranger and Co-Documentation Agent, and BANCO SANTANDER
CENTRAL HISPANO S.A, NEW YORK BRANCH, as Lead Arranger and Co-Documentation
Agent.
 
Capitalized terms used herein but not otherwise defined herein shall have the
respective meaning set forth in the Credit Agreement.

The Borrowers hereby direct the Accounts Bank to withdraw and pay from the
account entitled [____], No. [____] [(the "Revenue Account")] [(the "Prepayment
Holding Account")], on [_____], 20[__] (the "Restricted Payment Date"), the
amounts and to the payees, in each case as set forth on Schedule 1 attached
hereto.
 
In support of such direction, the undersigned, on behalf of the Borrowers,
hereby represents and certifies, as of the date hereof and as of the Restricted
Payment Date, as follows:
 
(a)  The undersigned is an Authorized Officer of the Borrowers' Agent.
 
(b)  The Conversion Date has occurred.
 
7.02(s) - 1

--------------------------------------------------------------------------------

 
(c)  This Restricted Payment Certificate is being delivered to the Accounts Bank
with a copy to the Administrative Agent not later than 12:00 noon New York City
time on the Restricted Payment Date, and the Restricted Payment Date is a
Quarterly Payment Date or another Business Day that is within thirty (30) days
following a Quarterly Payment Date.
 
(d)  All conditions set forth in the Credit Agreement (including Section
7.02(s)) for the withdrawal(s) requested hereby have been satisfied.
 
(e)  No Notice of Suspension is in effect and no Default or Event of Default has
occurred and is continuing or would occur as a result of the Restricted
Payment(s) to be made with the proceeds of the withdrawals requested hereby.
 
(f)  The Debt Service Reserve Account is fully funded in the amount of the Debt
Service Reserve Requirement. The Working Capital Reserve Account is fully funded
in the amount of the Working Capital Reserve Required Amount, if any.
 
(g)  Each of the Historical Debt Service Coverage Ratio and the Prospective Debt
Service Coverage Ratio, calculated as of the current Quarterly Payment Date, is
greater than or equal to 1.5:1, and a detailed calculation of such Historical
Debt Service Coverage Ratio and such Prospective Debt Service Coverage Ratio is
set forth in Schedule 2 attached hereto.
 
(h)  The most recent update of the Operating Budgets required pursuant to
Section 7.01(j) (Affirmative Covenants - Operating Budget) of the Credit
Agreement has been approved by the Administrative Agent.
 
[(i)  All of the transfers and payments set forth in priorities first through
fourteenth of Section 8.08(c) of the Credit Agreement have been made, or will be
made, before the consummation of the withdrawals requested hereby and in
accordance with the terms of each Revenue Account Withdrawal Certificate issued
or to be issued as of the Restricted Payment Date.]1
 
The undersigned officer is executing this Restricted Payment Certificate not in
an individual capacity but in its capacity as an Authorized Officer of the
Borrower's Agent.
 
[The remainder of this page is intentionally blank. The next page is the
signature page.]
 
CC: ADMINISTRATIVE AGENT

_____________________________________
 
1 To be included only in certificates issued in connection with transfers
pursuant to Section 8.08(c)(xv) of the Credit Agreement.

7.02(s) - 2

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the undersigned has caused this Restricted Payment
Certificate to be executed and delivered as of the day and year first above
written.

 

  PACIFIC ETHANOL HOLDING CO. LLC,
as Borrowers' Agent

By:  _________________________________
Name:
Title:

 
 
 

7.02(s) - 3

--------------------------------------------------------------------------------

Schedule 1 to
Restricted Payment Certificate
 
WITHDRAWALS [REVENUE ACCOUNT] [PREPAYMENT HOLDING ACCOUNT]

[details to be attached]

 
I.  Withdrawals from [Revenue Account] [Prepayment Holding Account] for the
making of Restricted Payments.

Payee
Amount
Wire Instructions
           
$
   

 
 
7.02(s) - Schedule 1

--------------------------------------------------------------------------------

Schedule 2 to
Restricted Payment Certificate
 
HISTORICAL DEBT SERVICE COVERAGE RATIO AND PROSPECTIVE
DEBT SERVICE COVERAGE RATIO CALCULATIONS

7.02(s) - Schedule 2

--------------------------------------------------------------------------------

 
EXHIBIT 7.03(g)
to Credit Agreement
 
 
FORM OF MONTHLY
PROGRESS REPORT
 
 
Monthly Progress Report
with respect to the
[Stockton] [Brawley] [Burley]
Ethanol Plant,
 
Delivered to
WESTLB AG, NEW YORK BRANCH,
as Administrative Agent for the Lenders
 
and
 
[______________]
as Independent Engineer for the Lenders
 
 
[Date]

 
7.03(g) – 1

--------------------------------------------------------------------------------

Section 1.  GENERAL PROVISIONS

Reference is made to Section 7.03(g) of the Credit Agreement (as amended,
supplemented or otherwise modified from time to time, the "Credit Agreement"),
dated as of February [__], 2007, by and among PACIFIC ETHANOL HOLDING CO. LLC, a
Delaware limited liability company, PACIFIC ETHANOL MADERA LLC, a Delaware
limited liability company, PACIFIC ETHANOL COLUMBIA, LLC, a Delaware limited
liability company, PACIFIC ETHANOL STOCKTON, LLC, a Delaware limited liability
company, PACIFIC ETHANOL IMPERIAL, LLC, a Delaware limited liability company and
PACIFIC ETHANOL MAGIC VALLEY, LLC, a Delaware limited liability company, as
Borrowers, PACIFIC ETHANOL HOLDING CO. LLC, as Borrowers' Agent, each of the
Lenders from time to time party thereto, WESTLB AG, NEW YORK BRANCH, as
Administrative Agent for the Lenders, WESTLB AG, NEW YORK BRANCH, as Collateral
Agent for the Senior Secured Parties, UNION BANK OF CALIFORNIA, N.A., as
Accounts Bank, WESTLB AG, NEW YORK BRANCH, as Lead Arranger and Sole Bookrunner,
MIZUHO CORPORATE BANK, LTD., as Lead Arranger and Co-Syndication agent, CIT
CAPITAL SECURITIES LLC, as Lead Arranger and Co-Syndication Agent, COOPERATIEVE
CENTRALE RAIFFEISEN­BOERENLEENBANK B.A., "RABOBANK NEDERLAND", NEW YORK BRANCH,
as Lead Arranger and Co-Documentation Agent, and BANCO SANTANDER CENTRAL HISPANO
S.A, NEW YORK BRANCH, as Lead Arranger and co-documentation agent. Capitalized
terms used herein but not otherwise defined herein shall have the respective
meanings set forth in the Credit Agreement.
 
Pursuant to Section 7.03(g) of the Credit Agreement, within five (5) days
following the end of each calendar month until the Conversion Date, the
Borrowers are required to deliver a Monthly Progress Report to the
Administrative Agent for each Greenfield Plant with respect to which any Funding
has been made.
 
The Borrowers have reviewed the status of each significant aspect of
construction and development for the [Stockton] [Brawley] [Burley] Plant as of
the date of this report. The Borrowers have [not identified any matters that
could reasonably be expected to adversely affect the Construction Schedule for
such Plant, or the ability of such Plant to achieve its Commercial Operation
Date on or before the Conversion Date Certain] [identified the following matters
which, in the Borrowers' reasonable judgment, are expected to adversely affect
the Construction Schedule for such Plant, or the ability of such Plant to
achieve its Commercial Operation Date on or before the Conversion Date
Certain:].

 
7.03(g) – 2

--------------------------------------------------------------------------------

SECTION 2.  CONSTRUCTION OVERVIEW

2.1. Major activities to be performed for each aspect of the Project during the
current calendar month.

Please provide a brief summary of the Major1 activities to be performed for each
of the following aspects of the [Stockton] [Brawley] [ Burley] during the
current calendar month:

2.1.1 Design

2.1.2 Property Acquisition

2.1.3 Engineering

2.1.4 Major Equipment procurement

2.1.5 Construction

2.1.6. Utility Interconnections

2.1.7. Permitting (See Section 3.0 below)

2.1.8. O&M Mobilization

2.1.9. Startup Testing and Commissioning

2.1.10. Miscellaneous

2.2. Major activities scheduled to be performed in the previous calendar month
but not completed as scheduled.
 
________________________________
 
1    For Purposes of this report, "Major" shall mean any activity, event, or
occurrence which may have a material adverse effect on the construction of the
[Stockton] [Brawley] [Burley] Plant or completion of the Project on a timely
basis if such activity, event, or occurrence occurs or if such activity, event,
or occurrence fails to occur as anticipated or scheduled, which material adverse
effect includes, but is not limited to, the inability to achieve the Commercial
Operation Date on or before the Conversion Date Certain.

 
7.03(g) – 3

--------------------------------------------------------------------------------

Please provide a brief summary of the Major activities that were scheduled to be
performed in the previous calendar month and their status, including those
activities that were not completed as scheduled:

2.2.1 Design

2.2.2 Property Acquisition

2.2.3 Engineering

2.2.4 Major Equipment procurement

2.2.5 Construction

2.2.6 Utility Interconnections

2.2.7 Permitting

2.2.8 O&M Mobilization

2.2.9 Startup Testing and Commissioning

2.2.10 Miscellaneous

2.3.  Critical Path Items.

Please provide a detailed list of all critical path construction work for the
current calendar month, including a comparison of the current construction
progress as compared against the baseline Construction Schedule.

[___________________________]

2.3.  Construction Schedule.
 
Please provide a detailed schedule for construction work for the current
calendar month.

[______________________]
 
SECTION 3.  PERMITTING
 
The following describes each of the Necessary Project Approvals required for the
construction of the [Stockton] [Brawley] [Burley] Plant and the status thereof

7.03(g) – 4

--------------------------------------------------------------------------------

 
GOVERNMENTAL APPROVALS
STATUS
                           

 
SECTION 4.  SAFETY AND HEALTH REPORTS

4.1.  Please list all accidents from the previous calendar month:

4.2.  Please list any work stoppage from the previous calendar month:

Please described any impact on construction of the [Stockton] [Brawley] [Burley]
Plant resulting from any such accidents or work stoppage.
 
 
[The remainder of this page is intentionally blank. The next page is the
signature page.]

 
7.03(g) – 5

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the undersigned has caused this Monthly Progress Report to
be executed and delivered as of the day and year first above written.
 
 

 
PACIFIC ETHANOL HOLDING CO. LLC,
as Borrowers' Agent

By:  ___________________________________
Name:
Title:

 

 
7.03(g) – 6

--------------------------------------------------------------------------------

EXHIBIT 7.03(n)
 to Credit Agreement
 
[FORM OF]
BORROWING BASE CERTIFICATE

[DATE]

WestLB AG, New York Branch,
as Administrative Agent for the Lenders
1211 Avenue of the Americas
NY, New York 10036
Attention: Yolette Salnave / Andrea Bailey
Facsimile: 212-302-7946
Email: ny_agency services@westlb.com

This Borrowing Base Certificate is furnished pursuant to Section 7.03(n) of the
Credit Agreement dated as of February ____________, 2007 (as amended, restated,
supplemented or otherwise modified from time to time, the "Credit Agreement"),
by and among Pacific Ethanol Holding Co. LLC, a Delaware limited liability
company ("Pacific Holding"), Pacific Ethanol Madera LLC, a Delaware limited
liability company ("Madera"), Pacific Ethanol Columbia, LLC, a Delaware limited
liability company ("Boardman"), Pacific Ethanol Stockton, LLC, a Delaware
limited liability company ("Stockton"), Pacific Ethanol Imperial, LLC, a
Delaware limited liability company ("Brawley") and Pacific Ethanol Magic Valley,
LLC, a Delaware limited liability company ("Burley" and, together with Pacific
Holding, Madera, Boardman, Stockton, and Brawley, the "Borrowers"), Pacific
Holding, as Borrowers' Agent, each of the Lenders from time to time party
thereto, WESTLB AG, NEW YORK BRANCH, as Administrative Agent for the Lenders,
WESTLB AG, NEW YORK BRANCH, as Collateral Agent for the Senior Secured Parties,
UNION BANK OF CALIFORNIA, N.A., as Accounts Bank, WESTLB AG, NEW YORK BRANCH, as
Lead Arranger and Sole Bookrunner, MIZUHO CORPORATE BANK, LTD., as Lead Arranger
and Co-Syndication Agent, CIT CAPITAL SECURITIES LLC, as Lead Arranger and
Co-Syndication Agent, COOPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK B.A.,
"RABOBANK NEDERLAND", NEW YORK BRANCH, as Lead Arranger and Co-Documentation
Agent, and BANCO SANTANDER CENTRAL HISPANO S.A, NEW YORK BRANCH, as Lead
Arranger and Co-Documentation Agent.
 
 
7.03(n) – 1

--------------------------------------------------------------------------------

 
Capitalized terms used herein but not otherwise defined herein shall have the
respective meanings set forth in the Credit Agreement.
 
This Borrowing Base Certificate sets forth the Borrowing Base for [Madera]
[Boardman] [Stockton] [Brawley] [Burley] as of the date hereof.
 
ACCOUNTS FOR [insert name of relevant Plant]:1

1.    All Eligible Accounts
$__________
   
2.    Less: ineligible accounts
     
a)    reserves
$__________
   
b)    maximum discounts
$__________
   
c)    credits
$__________
   
d)    allowances
$__________
   
3.   Total ineligible accounts (sum of line 2a through 2d)
$__________
   
4.   Total Eligible Accounts (line 1 — line 3)
$__________

 
INVESTORY FOR [Insert Name of Relevant Plant]:1

5.    All Eligible Inventory
$__________
   
6.   Less: ineligible inventory
     
a)    reserves
$__________
   
b)    maximum discounts
$__________
   
c)    credits
$__________
   
d)    allowances
$__________
   
7.   Total ineligible inventory (sum of line 6a through 6d)
$__________
   
8.   Total Eligible Inventory (line 5 — line 7)
$__________

_________________________

1 Calculations herein to be made separately for each relevant Plant.

7.03(n) – 2

--------------------------------------------------------------------------------

 
TOTAL BORROWING BASE FOR [Insert Name of Relevant Plant]:1

80% x (line 4 + line 8)
$__________

 
 
AGGREGATE TOTAL BORROWING BASE FOR ALL PLANTS
$__________

 
The undersigned hereby represent, warrant and certify to the Administrative
Agent that the information set forth above is true and correct.
 
The undersigned officers are executing this Borrowing Base Certificate not in
their individual capacities but in their capacities as Authorized Officers of
the Borrowers.
 

 

 
PACIFIC ETHANOL HOLDING CO. LLC,
as Borrowers' Agent

By:  _________________________________
Name:
Title:

[Insert Name of Borrower2],
as Borrower

By:  _________________________________
Name:
Title:

 

_________________________
2  "Borrower" refers to the Borrower whose Borrowing Base is being calculated
herein.

 
7.03(n) – 3

--------------------------------------------------------------------------------

 
EXHIBIT 7.03(p)
to Credit Agreement
 
 
[FORM OF]
OPERATING STATEMENT
 
WestLB AG, New York Branch,
as Administrative Agent for the Lenders
1211 Ave of Americas
NY, New York 10036
Attention: Yolette Salnave / Andrea Bailey
Facsimile: 212-302-7946
Email: ny_agency services@westlb.com
 
Date: [____________________]
 
Reference is hereby made to the Credit Agreement, dated as of February_____,
2007 (as amended, restated, supplemented or otherwise modified from time to
time, the "Credit Agreement"), by and among PACIFIC ETHANOL HOLDING CO. LLC, a
Delaware limited liability company, PACIFIC ETHANOL MADERA LLC, a Delaware
limited liability company, PACIFIC ETHANOL COLUMBIA, LLC, a Delaware limited
liability company, PACIFIC ETHANOL STOCKTON, LLC, a Delaware limited liability
company, PACIFIC ETHANOL IMPERIAL, LLC, a Delaware limited liability company and
PACIFIC ETHANOL MAGIC VALLEY, LLC, a Delaware limited liability company (the
"Borrowers"), PACIFIC ETHANOL HOLDING CO. LLC, as Borrowers' Agent, each of the
Lenders from time to time party hereto, WESTLB AG, NEW YORK BRANCH, as
Administrative Agent for the Lenders, WESTLB AG, NEW YORK BRANCH, as Collateral
Agent for the Senior Secured Parties, UNION BANK OF CALIFORNIA, as Accounts
Bank, WESTLB AG, NEW YORK BRANCH, as Lead Arranger and Sole Bookrunner, MIZUHO
CORPORATE BANK, LTD., as Lead Arranger and Co-Syndication Agent, CIT CAPITAL
SECURITIES LLC, as Lead Arranger and Co-Syndication Agent, COOPERATIEVE CENTRALE
RAIFFEISEN-BOERENLEENBANK B.A., "RABOBANK NEDERLAND", NEW YORK BRANCH, as Lead
Arranger and Co-Documentation Agent, and BANCO SANTANDER CENTRAL HISPANO S.A,
NEW YORK BRANCH, as Lead Arranger and Co-Documentation Agent. Capitalized terms
used herein but not defined herein shall have the respective meanings assigned
to such terms in the Credit Agreement.
 
The Borrowers hereby represent and certify as follows:
 
7.03(p) - 1

--------------------------------------------------------------------------------

 
1.    This Operating Statement is the Operating Statement described in the
Credit Agreement, and it is delivered to the Administrative Agent pursuant to
Section 7.03(p) of the Credit Agreement.
 
2.    The individual executing this Operating Statement is an Authorized Officer
of the Borrowers' Agent.
 
3.    This Operating Statement is being delivered to the Administrative Agent
within forty-five (45) days after the end of the Fiscal Quarter ending on
[_____], 20[__].
 
4.    The ethanol, Distillers Grains, and other products produced and sold [[by
each Plant] by [Madera] [Boardman] [Stockton] [Brawley] [Burley]] during the
periods noted below are as follows:
 
7.03(p) - 2

--------------------------------------------------------------------------------

 

 
Most Recent
Fiscal Quarter
Month 1 of
Most Recent
Fiscal Quarter
Month 2 of
Most Recent
Fiscal Quarter
Month 3 of
Most Recent
Fiscal Quarter
Year-to-Date
[Note: only for
year-end statements]
   
Actual
Budget
Actual
Budget
Actual
Budget
Actual
Budget
Actual
Budget
Variance
AMOUNT OF ETHANOL PRODUCED BY:
                     
MADERA
                     
BOARDMAN
                     
STOCKTON
                     
BRAWLEY
                     
BURLEY
                      AMOUNT OF DISTILLERS GRAINS PRODUCED:                    
          MADERA                                BOARDMAN                      
        STOCKTON                               BRAWLEY                      
        BURLEY                      
AMOUNT OF OTHER PRODUCTS PRODUCED BY:
                     
MADERA
                     
BOARDMAN
                     
STOCKTON
                     
BRAWLEY
                     
BURLEY
                     
AMOUNT OF ETHANOL
                     

7.03(p) - 3

--------------------------------------------------------------------------------

 

 
Most Recent
Fiscal Quarter
Month 1 of
Most Recent
Fiscal Quarter
Month 2 of
Most Recent
Fiscal Quarter
Month 3 of
Most Recent
Fiscal Quarter
Year-to-Date
[Note: only for
year-end statements]
   
Actual
Budget
Actual
Budget
Actual
Budget
Actual
Budget
Actual
Budget
Variance
SOLD BY:
                     
    MADERA
Pursuant to Ethanol Offtake Agreements
                     
    BOARDMAN
Pursuant to Ethanol Offtake Agreements
                     
    STOCKTON
Pursuant to Ethanol Of take Agreements
                     
    BRAWLEY
Pursuant to Ethanol Offtake Agreements
                     
    BURLEY
Pursuant to Ethanol Offtake Agreements
                     
AMOUNT OF DISTILLERS GRAINS SOLD BY:
                     
    MADERA
                     

7.03(p) - 4

--------------------------------------------------------------------------------

 

 
Most Recent
Fiscal Quarter
Month 1 of
Most Recent
Fiscal Quarter
Month 2 of
Most Recent
Fiscal Quarter
Month 3 of
Most Recent
Fiscal Quarter
Year-to-Date
[Note: only for
year-end statements]
   
Actual
Budget
Actual
Budget
Actual
Budget
Actual
Budget
Actual
Budget
Variance
Pursuant to DG Offtake Agreements
                     
    BOARDMAN
Pursuant to DG Offtake Agreements
                     
    STOCKTON
Pursuant to DG Offtake Agreements
                     
    BRAWLEY
Pursuant to DG Offtake Agreements
                     
    BURLEY
Pursuant to DG Offtake Agreements
                                             
THE AMOUNT, IF ANY, OF OTHER SALES OF ETHANOL AND/OR DISTILLERS GRAINS BY:
                     
    MADERA
                     
    BOARDMAN
                     

 
7.03(p) - 5

--------------------------------------------------------------------------------

 

 
Most Recent
Fiscal Quarter
Month 1 of
Most Recent
Fiscal Quarter
Month 2 of
Most Recent
Fiscal Quarter
Month 3 of
Most Recent
Fiscal Quarter
Year-to-Date
[Note: only for
year-end statements]
   
Actual
Budget
Actual
Budget
Actual
Budget
Actual
Budget
Actual
Budget
Variance
STOCKTON
                     
BRAWLEY
                     
BURLEY
                     
THE AMOUNT, IF ANY, OF SALES OF OTHER PRODUCTS BY:
                     
MADERA
                     
BOARDMAN
                     
STOCKTON
                     
BRAWLEY
                     
BURLEY
                     

7.03(p) - 6

--------------------------------------------------------------------------------

 
5.    The actual expenses reflected in the chart below for each month, quarter
and (if applicable) the year to date do not exceed the provision for such period
contained in the Operating Budget currently in effect [if this certification
cannot be made, Borrowers' Agent to provide detailed explanation].
 
[Note: the categories set forth in the chart below are by way of example only,
and will be updated or revised when this Operating Statement is delivered from
time to time to conform to the then-effective Operating Budget]
 

 
Most Recent
Fiscal Quarter
Month 1 of
Most Recent
Fiscal Quarter
Month 2 of
Most Recent
Fiscal Quarter
Month 3 of
Most Recent
Fiscal Quarter
Year-to-Date
[Note: only for
year-end statements]
   
Actual
Budget
Actual
Budget
Actual
Budget
Actual
Budget
Actual
Budget
Variance
OPERATION AND MAINTENANCE EXPENSES FOR THE PLANTS
                     
MADERA
                     
BOARDMAN
                     
STOCKTON
                     
BRAWLEY
                     
BURLEY
                     
Expenses of administering, managing and operating the Plants
                     
MADERA
                     
BOARDMAN
                     
STOCKTON
                     
BRAWLEY
                     
BURLEY
                     

7.03(p) - 7

--------------------------------------------------------------------------------

 

 
Most Recent
Fiscal Quarter
Month 1 of
Most Recent
Fiscal Quarter
Month 2 of
Most Recent
Fiscal Quarter
Month 3 of
Most Recent
Fiscal Quarter
Year-to-Date
[Note: only for
year-end statements]
   
Actual
Budget
Actual
Budget
Actual
Budget
Actual
Budget
Actual
Budget
Variance
BURLEY
                     
Expenses for maintaining the Plants in good repair and operating condition
                     
MADERA
                     
BOARDMAN
                     
STOCKTON
                     
BRAWLEY
                     
BURLEY
                     
Costs associated with supply and transportation of all supplies and raw
materials to the Plants
                     
MADERA
                     
BOARDMAN
                     
STOCKTON
                     
BRAWLEY
                     
BURLEY
                     
Costs associated with supply and transportation of all supplies and raw
materials to the Plants
                     
MADERA
                     
BOARDMAN
                     
STOCKTON
                     
BRAWLEY
                     
BURLEY
                     

 
7.03(p) - 8

--------------------------------------------------------------------------------

 
Most Recent
Fiscal Quarter
Month 1 of
Most Recent
Fiscal Quarter
Month 2 of
Most Recent
Fiscal Quarter
Month 3 of
Most Recent
Fiscal Quarter
Year-to-Date
[Note: only for
year-end statements]
   
Actual
Budget
Actual
Budget
Actual
Budget
Actual
Budget
Actual
Budget
Variance
Insurance Costs [(other than insurance premiums that are paid as Project Costs)]
                     
MADERA
                     
BOARDMAN
                     
STOCKTON
                     
BRAWLEY
                     
BURLEY
                     
Property, sales and franchise taxes (other than taxes imposed on or measured by
income or receipts) or payment in lieu of such taxes with respect to the Plants
                     
MADERA
                     
BOARDMAN
                     
STOCKTON
                     
BRAWLEY
                     
BURLEY
                     
Costs and fees regarding Necessary Project Approvals incurred on or after the
Closing Date for all Plants
                     

7.03(p) - 9

--------------------------------------------------------------------------------

 

 
Most Recent
Fiscal Quarter
Month 1 of
Most Recent
Fiscal Quarter
Month 2 of
Most Recent
Fiscal Quarter
Month 3 of
Most Recent
Fiscal Quarter
Year-to-Date
[Note: only for
year-end statements]
   
Actual
Budget
Actual
Budget
Actual
Budget
Actual
Budget
Actual
Budget
Variane
MADERA
                     
BOARDMAN
                     
STOCKTON
                     
BRAWLEY
                     
BURLEY
                     
Legal, accounting and other professional fees attendant to any of the foregoing
items
                     
MADERA
                     
BOARDMAN
                     
STOCKTON
                     
BRAWLEY
                     
BURLEY
                     
Costs incurred pursuant to Swap Contracts
                     
MADERA
                     
BOARDMAN
                     
STOCKTON
                     
BRAWLEY
                     
BURLEY
                     
Other costs and expenses included in the Operating Budget
                     
MADERA
                     
BOARDMAN
                     

7.03(p) - 10

--------------------------------------------------------------------------------

 

 
Most Recent
Fiscal Quarter
Month 1 of
Most Recent
Fiscal Quarter
Month 2 of
Most Recent
Fiscal Quarter
Month 3 of
Most Recent
Fiscal Quarter
Year-to-Date
[Note: only for year-end statements]
   
Actual
Budget
Actual
Budget
Actual
Budget
Actual
Budget
Actual
Budget
Variance
STOCKTON
                     
BRAWLEY
                     
BURLEY
                     
MAINTENANCE CAPITAL EXPENSES
                     
MADERA
                     
BOARDMAN
                     
STOCKTON
                     
BRAWLEY
                     
BURLEY
                                             
REVENUE
                     
MADERA
                     
BOARDMAN
                     
STOCKTON
                     
BRAWLEY
                     
BURLEY
                                             
Total Revenue
                     
MADERA
                     
BOARDMAN
                     
STOCKTON
                     
BRAWLEY
                     
BURLEY
                     

7.03(p) - 11

--------------------------------------------------------------------------------

 

 
Most Recent
Fiscal Quarter
Month 1 of
Most Recent
Fiscal Quarter
Month 2 of
Most Recent
Fiscal Quarter
Month 3 of
Most Recent
Fiscal Quarter
Year-to-Date
[Note: only for
year-end statements]
   
Actual
Budget
Actual
Budget
Actual
Budget
Actual
Budget
Actual
Budget
Variance
COST OF GOODS SOLD
                     
MADERA
                     
BOARDMAN
                     
STOCKTON
                     
BRAWLEY
                     
BURLEY
                     
Inputs
                     
MADERA
                     
BOARDMAN
                     
STOCKTON
                     
BRAWLEY
                     
BURLEY
                                             
Total [       ] Cost
                     
MADERA
                     
BOARDMAN
                     
STOCKTON
                     
BRAWLEY
                     
BURLEY
                                             
Total Other Inputs
                     
MADERA
                     

 
7.03(p) - 12

--------------------------------------------------------------------------------

 
 

 
Most Recent
Fiscal Quarter
Month 2 of
Most Recent
Fiscal Quarter
Month 2 of
Most Recent
Fiscal Quarter
Month 3 of
Most Recent
Fiscal Quarter
Year-to-Date
[Note: only for
year-end statements]
   
Actual
Budget
Actual
Budget
Actual
Budget
Actual
Budget
Actual
Budget
Variance
BOARDMAN
                     
STOCKTON
                     
BRAWLEY
                     
BURLEY
                                                                     
Change in Inventory
                     
MADERA
                     
BOARDMAN
                     
STOCKTON
                     
BRAWLEY
                     
BURLEY
                                             
Total Inputs
                     
MADERA
                     
BOARDMAN
                     
STOCKTON
                     
BRAWLEY
                     
BURLEY
                                             
Labor
                     
MADERA
                     
BOARDMAN
                     
STOCKTON
                     
BRAWLEY
                     

 
7.03(p) - 13

--------------------------------------------------------------------------------

 
 

 
Most Recent
Fiscal Quarter
Month 1 of
Most Recent
Fiscal Quarter
Month 2 of
Most Recent
Fiscal Quarter
Month 3 of
Most Recent
Fiscal Quarter
Year-to-Date
[Note: only for
year-end statements]
   
Actual
Budget
Actual
Budget
Actual
Budget
Actual
Budget
Actual
Budget
Variance
BURLEY
                     
Process/Tech Labor
                     
MADERA
                     
BOARDMAN
                     
STOCKTON
                     
BRAWLEY
                     
BURLEY
                     
Maintenance Labor
                     
MADERA
                     
BOARDMAN
                     
STOCKTON
                     
BRAWLEY
                     
BURLEY
                     
Total Labor
                     
MADERA
                     
BOARDMAN
                     
STOCKTON
                     
BRAWLEY
                     
BURLEY
                                             
Other Project Overhead
                     
MADERA
                     
BOARDMAN
                     
STOCKTON
                     
BRAWLEY
                     

 
7.03(p) - 14

--------------------------------------------------------------------------------

 
 

 
Most Recent
Fiscal Quarter
Month 1 of
Most Recent
Fiscal Quarter
Month 2 of
Most Recent
Fiscal Quarter
Month 3 of
Most Recent
Fiscal Quarter
Year-to-Date
[Note: only for
year-end statements]
   
Actual
Budget
Actual
Budget
Actual
Budget
Actual
Budget
Actual
Budget
Variance
BURLEY
                     
Maintenance Parts and Supplies
                     
MADERA
                     
BOARDMAN
                     
STOCKTON
                     
BRAWLEY
                     
BURLEY
                     
Safety Supplies
                     
MADERA
                     
BOARDMAN
                     
STOCKTON
                     
BRAWLEY
                     
BURLEY
                     
Other Operating Supplies
                     
MADERA
                     
BOARDMAN
                     
STOCKTON
                     
BRAWLEY
                     
BURLEY
                                             
Contract Labor
                     
MADERA
                     
BOARDMAN
                     
STOCKTON
                     

 
7.03(p) - 15

--------------------------------------------------------------------------------

 
 

 
Most Recent
Fiscal Quarter
Month 1 of
Most Recent
Fiscal Quarter
Month 2 of
Most Recent
Fiscal Quarter
Month 3 of
Most Recent
Fiscal Quarter
Year-to-Date
[Note: only for
year-end statements]
   
Actual
Budget
Actual
Budget
Actual
Budget
Actual
Budget
Actual
Budget
Variance
BRAWLEY
                     
BURLEY
                     
Plant Management and Administration Labor
                     
MADERA
                     
BOARDMAN
                     
STOCKTON
                     
BRAWLEY
                     
BURLEY
                     
Office Supplies
                     
MADERA
                     
BOARDMAN
                     
STOCKTON
                     
BRAWLEY
                     
BURLEY
                     
Communication Expense
                     
MADERA
                     
BOARDMAN
                     
STOCKTON
                     
BRAWLEY
                     
BURLEY
                                             
Travel
                     
MADERA
                     
BOARDMAN
                     
STOCKTON
                     

 
7.03(p) - 16

--------------------------------------------------------------------------------

 
 

 
Most Recent
Fiscal Quarter
Month 1 of
Most Recent
Fiscal Quarter
Month 2 of
Most Recent
Fiscal Quarter
Month 3 of
Most Recent
Fiscal Quarter
Year-to-Date
[Note: only for
year-end statements]
   
Actual
Budget
Actual
Budget
Actual
Budget
Actual
Budget
Actual
Budget
Variance
BRAWLEY
                     
BURLEY
                     
Training & Other
                     
MADERA
                     
BOARDMAN
                     
STOCKTON
                     
BRAWLEY
                     
BURLEY
                     
Fuel
                     
MADERA
                     
BOARDMAN
                     
STOCKTON
                     
BRAWLEY
                     
BURLEY
                     
Rental Equipment
                     
MADERA
                     
BOARDMAN
                     
STOCKTON
                     
BRAWLEY
                     
BURLEY
                                             
Environmental Testing
                     
MADERA
                     
BOARDMAN
                     
STOCKTON
                     
BRAWLEY
                     

 
7.03(p) - 17

--------------------------------------------------------------------------------

 
 

 
Most Recent
Fiscal Quarter
Month 1 of
Most Recent
Fiscal Quarter
Month 2 of
Most Recent
Fiscal Quarter
Month 3 of
Most Recent
Fiscal Quarter
Year-to-Date
[Note: only for
year-end statements]
   
Actual
Budget
Actual
Budget
Actual
Budget
Actual
Budget
Actual
Budget
Variance
BURLEY
                     
Plant Level Consultants
                     
MADERA
                     
BOARDMAN
                     
STOCKTON
                     
BRAWLEY
                     
BURLEY
                     
Total Other Project Overhead
                     
MADERA
                     
BOARDMAN
                     
STOCKTON
                     
BRAWLEY
                     
BURLEY
                     
Total Cost of Goods Sold
                     
MADERA
                     
BOARDMAN
                     
STOCKTON
                     
BRAWLEY
                     
BURLEY
                                             
Sales Expenses
                     
MADERA
                     
BOARDMAN
                     

 
7.03(p) - 18

--------------------------------------------------------------------------------

 
 

 
Most Recent
Fiscal Quarter
Month 1 of
Most Recent
Fiscal Quarter
Month 2 of
Most Recent
Fiscal Quarter
Month 3 of
Most Recent
Fiscal Quarter
Year-to-Date
[Note: only for
year-end statements]
   
Actual
Budget
Actual
Budget
Actual
Budget
Actual
Budget
Actual
Budget
Variance
STOCKTON
                     
BRAWLEY
                     
BURLEY
                                             
Marketing Fees (Including Discounts)
                     
MADERA
                     
BOARDMAN
                     
STOCKTON
                     
BRAWLEY
                     
BURLEY
                     
Cost of Goods Sold
                     
MADERA
                     
BOARDMAN
                     
STOCKTON
                     
BRAWLEY
                     
BURLEY
                                             
Total Sales Expenses
                     
MADERA
                     
BOARDMAN
                     
STOCKTON
                     
BRAWLEY
                     
BURLEY
                     

 
7.03(p) - 19

--------------------------------------------------------------------------------

 
 

 
Most Recent
Fiscal Quarter
Month 1 of
Most Recent
Fiscal Quarter
Month 2 of
Most Recent
Fiscal Quarter
Month 3 of
Most Recent
Fiscal Quarter
Year-to-Date
[Note: only for
year-end statements]
   
Actual
Budget
Actual
Budget
Actual
Budget
Actual
Budget
Actual
Budget
Variance
SG&A
                     
MADERA
                     
BOARDMAN
                     
STOCKTON
                     
BRAWLEY
                     
BURLEY
                     
Corporate Salaries
                     
MADERA
                     
BOARDMAN
                     
STOCKTON
                     
BRAWLEY
                     
BURLEY
                     
Corporate (Plant Level) - Salaries
                     
MADERA
                     
BOARDMAN
                     
STOCKTON
                     
BRAWLEY
                     
BURLEY
                                             
Corporate Expense
                     
MADERA
                     
BOARDMAN
                     
STOCKTON
                     

 
7.03(p) - 20

--------------------------------------------------------------------------------

 
 

 
Most Recent
Fiscal Quarter
Month 1 of
Most Recent
Fiscal Quarter
Month 2 of
Most Recent
Fiscal Quarter
Month 3 of
Most Recent
Fiscal Quarter
Year-to-Date
[Note: only for
year-end statements]
   
Actual
Budget
Actual
Budget
Actual
Budget
Actual
Budget
Actual
Budget
Variance
BRAWLEY
                     
BURLEY
                     
Plant Mgmt Expense (PECA)
                     
MADERA
                     
BOARDMAN
                     
STOCKTON
                     
BRAWLEY
                     
BURLEY
                     
Mgmt Fees
                     
MADERA
                     
BOARDMAN
                     
STOCKTON
                     
BRAWLEY
                     
BURLEY
                     
Prop Taxes
                     
MADERA
                     
BOARDMAN
                     
STOCKTON
                     
BRAWLEY
                     
BURLEY
                                             
Total SG&A
                     
MADERA
                     
BOARDMAN
                     
STOCKTON
                     
BRAWLEY
                     

 
7.03(p) - 21

--------------------------------------------------------------------------------

 
 

 
Most Recent
Fiscal Quarter
Month 1 of
Most Recent
Fiscal Quarter
Month 2 of
Most Recent
Fiscal Quarter
Month 3 of
Most Recent
Fiscal Quarter
Year-to-Date
[Note: only for
year-end statements]
   
Actual
Budget
Actual
Budget
Actual
Budget
Actual
Budget
Actual
Budget
Variance
BURLEY
                                             
Interest and Depreciation
                     
MADERA
                     
BOARDMAN
                     
STOCKTON
                     
BRAWLEY
                     
BURLEY
                     
Interest Expense
                     
MADERA
                     
BOARDMAN
                     
STOCKTON
                     
BRAWLEY
                     
BURLEY
                     
Depreciation & Amortization
                     
MADERA
                     
BOARDMAN
                     
STOCKTON
                     
BRAWLEY
                     
BURLEY
                     

 

 
7.03(p) - 22

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the undersigned has caused this Operating Statement to be
duly executed as of the date first above written.
 
 

 
PACIFIC ETHANOL HOLDING CO. LLC as Borrowers' Agent
 
By:                                                           
Name:
Title:

 
 

 

 

 
 
 

 
7.03(p) - 23

--------------------------------------------------------------------------------

 
 
 

EXHIBIT 8.04
 to Credit Agreement
 
[FORM OF]
CONSTRUCTION HOLDING WITHDRAWAL CERTIFICATE
 
Date: [________ __, ____]

 
[ACCOUNTS BANK]
 
 [ADDRESS]
 
Reference is made to Section 8.04(b) of the Credit Agreement dated as of
February __, 2007 (as amended, restated, supplemented or otherwise modified from
time to time, the "Credit Agreement"), by and among Pacific Ethanol Holding Co.
LLC, a Delaware limited liability company ("Pacific Holding"), Pacific Ethanol
Madera LLC, a Delaware limited liability company ("Madera"), Pacific Ethanol
Columbia, LLC, a Delaware limited liability company ("Boardman"), Pacific
Ethanol Stockton, LLC, a Delaware limited liability company ("Stockton"),
Pacific Ethanol Imperial, LLC, a Delaware limited liability company ("Brawley")
and Pacific Ethanol Magic Valley, LLC, a Delaware limited liability company
("Burley" and, together with Pacific Holding, Madera, Boardman, Stockton, and
Brawley, the "Borrowers"), Pacific Holding, as Borrowers' Agent, each of the
Lenders from time to time party thereto, WESTLB AG, NEW YORK BRANCH, as
Administrative Agent for the Lenders, WESTLB AG, NEW YORK BRANCH, as Collateral
Agent for the Senior Secured Parties, UNION BANK OF CALIFORNIA, N.A., as
Accounts Bank, WESTLB AG, NEW YORK BRANCH, as Lead Arranger and Sole Bookrunner,
MIZUHO CORPORATE BANK, LTD., as Lead Arranger and Co-Syndication Agent, CIT
CAPITAL SECURITIES LLC, as Lead Arranger and Co- Syndication Agent, COOPERATIEVE
CENTRALE RAIFFEISEN-BOERENLEENBANK B.A., "RABOBANK NEDERLAND", NEW YORK BRANCH,
as Lead Arranger and Co- Documentation Agent, and BANCO SANTANDER CENTRAL
HISPANO S.A, NEW YORK BRANCH, as Lead Arranger and Co-Documentation Agent.
 
Capitalized terms used herein but not otherwise defined herein shall have the
respective meanings set forth in the Credit Agreement.
 
The Borrowers hereby direct the Accounts Bank to withdraw and transfer from the
account entitled [_______], No. [_____] (the "Construction Holding Account"), on
[______], 200[_] (the "Construction Account Withdrawal Date"), amounts and to
the accounts entitled [____], No. [_________] (the "[Stockton] [Brawley]
[Burley] Construction Account") to be applied towards [Stockton] [Brawley]
[Burley] Required Equity Contributions (as set forth on Part A of Schedule 1
attached hereto) and/or to pay [Stockton] [Brawley] [Burley] Project Costs (as
set forth on Part B of Schedule 1 attached hereto).
 

 
8.04 - 1

--------------------------------------------------------------------------------

 

In support of such direction, the undersigned, on behalf of the Borrowers,
hereby represents and certifies, as of the date hereof and as of the
Construction Account Withdrawal Date, as follows:
 
(a) The undersigned is an Authorized Officer of the Borrowers' Agent.
 
(b) This Construction Withdrawal Certificate is being delivered to the Accounts
Bank with a copy to the Administrative Agent and the Independent Engineer not
later than 12:00 noon. New York City time on the Construction Account Withdrawal
Date, and the Construction Account Withdrawal Date is a Business Day.
 
(c) All conditions set forth in the Credit Agreement for the withdrawal
requested hereby have been satisfied.
 
[(d) The funds to be withdrawn from the Construction Holding Account pursuant to
this Construction Withdrawal Certificate will be applied to pay [Stockton]
[Brawley] [Burley] Project Costs that will become due and payable during the
immediately succeeding calendar month strictly in accordance with the
[Stockton][Brawley][Burley] Construction Budget.1]
 
(e) No Notice of Suspension is in effect and no Default or Event of Default
would occur after giving effect to the application of funds contemplated hereby.
 
The undersigned officer is executing this Construction Holding Withdrawal
Certificate not in an individual capacity but in its capacity as an Authorized
Officer of the Borrower's Agent.
 
[The remainder of this page is intentionally blank. The next page is the
signature page.]
 
CC:
ADMINISTRATIVE AGENT
 
INDEPENDENT ENGINEER

 
_____________________
1 To be included only for a transfer described in Part B of Schedule 1.
 

 
8.04 - 2

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the undersigned has caused this Construction Holding
Withdrawal Certificate to be executed and delivered as of the day and year first
above written.
 

 

 
PACIFIC ETHANOL HOLDING CO. LLC, as Borrowers' Agent
 
By:                                                    
Name:
Title:

 

 
 
 
 
 
 
 
 
 
 

 
 
8.04 - 3

--------------------------------------------------------------------------------

 

Schedule 1 to
Construction Holding Withdrawal Certificate
 
WITHDRAWALS FROM CONSTRUCTION HOLDING ACCOUNT
 
[details to be attached]
 
Part A.
 
[Withdrawals from Construction Holding Account to apply towards [Stockton]
[Brawley] [Burley] Required Equity Contributions].
 
 
Beneficiary
Amount
[Stockton] [Brawley] [Burley]
$

 
Part B.
 
[Withdrawals from Construction Holding Account for payment of [Stockton]
[Brawley] [Burley] Project Costs].
 
Amount
 
$
 

 
8.04 - 4

--------------------------------------------------------------------------------

 

 
EXHIBIT 8.05
to Credit Agreement
 
[FORM OF]
[STOCKTON] [BRAWLEY] IBURLEY]
CONSTRUCTION WITHDRAWAL CERTIFICATE
 
Date: [  __________ __, ____ ]

 
[ACCOUNTS BANK]
 
[ADDRESS]
 
Reference is made to Section [8.05[(b)][(c)j [8.06[(b)][(c)] [8.07[(b)][(c)]] of
the Credit Agreement dated as of February___,  2007 (as amended, restated,
supplemented or otherwise modified from time to time, the "Credit Agreement"),
by and among Pacific Ethanol Holding Co. LLC, a Delaware limited liability
company ("Pacific Holding"), Pacific Ethanol Madera LLC, a Delaware limited
liability company ("Madera"), Pacific Ethanol Columbia, LLC, a Delaware limited
liability company ("Boardman"), Pacific Ethanol Stockton, LLC, a Delaware
limited liability company ("Stockton"), Pacific Ethanol Imperial, LLC, a
Delaware limited liability company ("Brawley") and Pacific Ethanol Magic Valley,
LLC, a Delaware limited liability company ("Burley" and, together with Pacific
Holding, Madera, Boardman, Stockton, and Brawley, the "Borrowers"), Pacific
Holding, as Borrowers' Agent, each of the Lenders from time to time party
hereto, WESTLB AG, NEW YORK BRANCH, as Administrative Agent for the Lenders,
WESTLB AG, NEW YORK BRANCH, as Collateral Agent for the Senior Secured Parties,
UNION BANK OF CALIFORNIA, N.A., as Accounts Bank, WESTLB AG, NEW YORK BRANCH, as
Lead Arranger and Sole Bookrunner, MIZUHO CORPORATE BANK, LTD., as Lead Arranger
and Co-Syndication Agent, CIT CAPITAL SECURITIES LLC, as Lead Arranger and
Co-Syndication Agent, COOPERATIEVE CENTRALE RAIFFEISEN­BOERENLEENBANK B.A.,
"RABOBANK NEDERLAND", NEW YORK BRANCH, as Lead Arranger and Co-Documentation
Agent, and BANCO SANTANDER CENTRAL HISPANO S.A, NEW YORK BRANCH, as Lead
Arranger and Co-Documentation Agent.
 
Capitalized terms used herein but not otherwise defined herein shall have the
respective meanings set forth in the Credit Agreement.
 
The Borrowers hereby direct the Accounts Bank to withdraw and transfer from the
account entitled [_____], No. [____] (the "[Stockton] [Brawley] [Burley]
[Construction Account"), on [__], 20011 (the "Construction Account Withdrawal
Date"), the amounts and to the payees set forth on Schedule I attached hereto.

 
8.05 - 1

--------------------------------------------------------------------------------

 

In support of such direction, the undersigned, on behalf of the Borrowers,
hereby represents and certifies, as of the date hereof and as of the
Construction Account Withdrawal Date, as follows:
 
(a)      The undersigned is an Authorized Officer of the Borrowers' Agent.
 
(b)      This Construction Withdrawal Certificate is being delivered to the
Accounts Bank with a copy to the Administrative Agent and the Independent
Engineer not later than 12:00 noon New York City time on the Construction
Account Withdrawal Date, and the Construction Account Withdrawal Date is a
Business Day.
 
[(c)        All conditions set forth in the Credit Agreement for the withdrawal
requested hereby have been satisfied.] [To be included for all withdrawals after
the date of the initial Funding Notice for the relevant Plant.]
 
[(d)        The funds to be withdrawn from the [Stockton] [Brawley] [Burley]
Construction Account pursuant to this Construction Withdrawal Certificate will
be applied to pay Project Costs due and owing. [To be included for withdrawals
prior to the date of the initial Funding Notice for the relevant Plant.]
 
[(e)        The funds to be withdrawn from the [Stockton] [Brawley] [Burley]
Construction Account pursuant to this Construction Withdrawal Certificate will
be applied to pay Project Costs due and owing strictly in accordance with the
[Stockton] [Brawley] [Burley] Construction Budget and in the case of Loan
proceeds, the most recent Funding Notice for the [Stockton] [Brawley] [Burley]
Construction Loan, which Funding Notice is dated as of [insert date]] [To be
included for all withdrawals after the date of the initial Funding Notice for
the relevant Plant.]
 
[(f)       No Notice of Suspension is in effect and no Default or Event of
Default would occur after giving effect to the application of funds contemplated
hereby.] [To be included for all withdrawals after the date of the initial
Funding Notice for the relevant Plant.]
 
The undersigned officer is executing this Construction Withdrawal Certificate
not in an individual capacity but in its capacity as an Authorized Officer of
the Borrower's Agent.
 
[The remainder of this page is intentionally blank. The next page is the
signature page.]
 
CC:
ADMINISTRATIVE AGENT
 
INDEPENDENT ENGINEER

 

 
8.05 - 2

--------------------------------------------------------------------------------

 

 
IN WITNESS WHEREOF, the undersigned has caused this Construction Withdrawal
Certificate to be executed and delivered as of the day and year first above
written.
 
 

 

 
PACIFIC ETHANOL HOLDING CO. LLC, as Borrowers' Agent
 
By:                                                    
Name:
Title:

 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
8.05 - 3

--------------------------------------------------------------------------------

 

Schedule 1 to
[Stockton] [Brawley] [Burley)
Construction Withdrawal Certificate
 
WITHDRAWALS FROM [STOCKTON] [BRAWLEY] [BURLEY]
CONSTRUCTION ACCOUNT
 
[details to be attached]
 
Withdrawals from [Stockton] [Brawley] [Burley] Construction Account for direct
payment of [Stockton) [Brawley] [Burley] Project Costs.
 
Payee
Amount
Wire Instructions
 
$
 

 

 
 
 
 
 
 

 
8.05 - 4

--------------------------------------------------------------------------------

 

EXHIBIT 8.08-A
 to Credit Agreement
 
[FORM OF]
PRE-CONVERSION DATE
REVENUE ACCOUNT WITHDRAWAL CERTIFICATE
 
Date: [________ __, ____]

 
[ACCOUNTS BANK]
 
[ADDRESS]
 
Reference is made to Section 8.08(b) of the Credit Agreement (as amended,
supplemented or otherwise modified from time to time, the "Credit Agreement"),
dated as of February _____, 2007, by and among PACIFIC ETHANOL HOLDING CO. LLC,
a Delaware limited liability company, PACIFIC ETHANOL MADERA LLC, a Delaware
limited liability company, PACIFIC ETHANOL COLUMBIA, LLC, a Delaware limited
liability company, PACIFIC ETHANOL STOCKTON, LLC, a Delaware limited liability
company, PACIFIC ETHANOL IMPERIAL, LLC, a Delaware limited liability company and
PACIFIC ETHANOL MAGIC VALLEY, LLC, a Delaware limited liability company, as.
Borrowers, PACIFIC ETHANOL HOLDING CO. LLC, as Borrowers' Agent, each of the
Lenders from time to time party thereto, WESTLB AG, NEW YORK BRANCH, as
Administrative Agent for the Lenders, WESTLB AG, NEW YORK BRANCH, as Collateral
Agent for the Senior Secured Parties, UNION BANK OF CALIFORNIA, N.A., as
Accounts Bank, WESTLB AG, NEW YORK BRANCH, as Lead Arranger and Sole Bookrunner,
MIZUHO CORPORATE BANK, LTD., as Lead Arranger and Co-Syndication Agent, CIT
CAPITAL SECURITIES LLC, as Lead Arranger and Co-Syndication Agent, COOPERATIEVE
CENTRALE RAIFFEISEN­BOERENLEENBANK B.A., "RABOBANK NEDERLAND", NEW YORK BRANCH,
as Lead Arranger and Co-Documentation Agent, and BANCO SANTANDER CENTRAL HISPANO
S.A, NEW YORK BRANCH, as Lead Arranger and Co-Documentation Agent. Capitalized
terms used herein but not otherwise defined herein shall have the respective
meanings set forth in the Credit Agreement.
 
The Borrowers hereby direct the Accounts Bank to withdraw and transfer, from the
account entitled [_____] No. [_____] (the "Revenue Account"), on [_____], 20[__]
(the "Revenue Account Withdrawal Date"), the following amounts: [Note: each
Revenue Account Withdrawal Certificate should only include those priorities
relevant on the given withdrawal date.]

 
8.08-A - 1

--------------------------------------------------------------------------------

 

 

 
(i) in accordance with Section 8.08(b)(i) of the Credit Agreement, (A) [_______]
Dollars ($[_____]) to Pacific Ethanol for payment of Sponsor Support
Reimbursements due and owing, and (B) [_______]  Dollars ($[____]) to the
Operating Account; 1
 
(ii) in accordance with Section 8.08(b)(ii) of the Credit Agreement,
[__________]  Dollars ($[______]) to the Maintenance Capital Expense Account; 1
 
(iii) in accordance with Section 8.08(b)(iii) of the Credit Agreement,
[__________]  Dollars ($[______]) to the Administrative Agent, for the account
of the Senior Secured Parties, for payment of Fees, costs and expenses due and
payable under the Financing Documents; 2
 
(iv) in accordance with Section 8.08(b)(iv) of the Credit Agreement, to the
Administrative Agent, for the account of the Senior Secured Parties,
(A) [__________]  Dollars ($[______])  for payment of interest due and payable
under the Financing Documents and (B) [_____] Dollars ($[_____] for payment of
fees, expenses and Net Swap Payments owing to the Interest Rate Protection
Providers;2
 
(v) in accordance with Section 8.08(b)(v) of the Credit Agreement, [__________]
 Dollars ($[______]) to the Administrative Agent, for the account of the
Interest Rate Providers, for payment of Swap Termination Value due and payable
with respect to the Interest Rate Protection Agreements;3
 
(vi) in accordance with Section 8.08(b)(vi) of the Credit Agreement,
[__________]  Dollars ($[______]) ) to the Working Capital Reserve Account;3
 
(vii) in accordance with Section 8.08(b)(vii) of the Credit Agreement,
[__________]  Dollars ($[______]) to the Administrative Agent, for the account
of the Working Capital Lenders, as a prepayment of the Working Capital Loans [in
an amount equal to a Mandatory Prepayment of the Working Capital Loans required
to be made pursuant to Section 3.10(c) of the Credit Agreement] [in an amount
equal to a prepayment on the Working Capital Loans being made at the option of
the Borrowers pursuant to Section 3.09 of the Credit Agreement];
 
(viii) in accordance with Section 8.08(b)(viii) of the Credit Agreement,
[__________]  Dollars ($[______])  to [__________________]  for payment of
Current Priority Subordinated Interest;5
 
___________________________
 
1 To be included in certificates for each Monthly Date.
2 To be included in certificates for any date on which such amounts are due and
payable.
3 To be included in certificates for each Monthly Date when applicable.
4 To be inserted in certificates on any date when required pursuant to Section
3.10(c) (Mandatory Prepayment) of the Credit Agreement, or otherwise at the
option of the Borrowers.
5 May be inserted in certificates on each Quarterly Payment Date, when no
Default or Event of Default has occurred and is continuing.
 

 
8.08-A - 2

--------------------------------------------------------------------------------

 

(ix) in accordance with Section 8.08(b)(ix) of the Credit Agreement,[__________]
 Dollars ($[______])  to [insert name of relevant taxing authority(ies) or
Affiliate(s)] for payment of a Permitted Tax Distribution;5 and
 
(x) in accordance with Section 8.08(b)(x) of the Credit Agreement,  (A)
[__________]  Dollars ($[______])  to the Stockton Construction Account, (B)
[__________]  Dollars ($[______])  to the Brawley Construction Account,
(C)  [__________]  Dollars ($[______])   to the Burley  Construction Account for
payment of Project Costs due and payable. 1
 
In support of such direction, the undersigned, on behalf of the Borrowers,
hereby represents and certifies, as of the date hereof and as of the Revenue
Account Withdrawal Date, as follows:
 
(a) the undersigned is a Financial Officer of the Borrowers' Agent;
 
(b) this Revenue Account Withdrawal Certificate is being delivered to the
Accounts Bank not later than 12:00 Noon New York City time on the Revenue
Account Withdrawal Date, and the Revenue Account Withdrawal Date is a [Business
Day] [Monthly Date] [Quarterly Payment Date];
 
(c) all conditions set forth in the Credit Agreement for the withdrawals 
requested hereby have been satisfied; and
 
(d) no Notice of Suspension is in effect and no Default or Event of
Default would occur after giving effect to any application of funds contemplated
hereby.
 
The undersigned is executing this Revenue Account Withdrawal Certificate not in
an individual capacity but in its capacity as an Authorized Officer of the
Borrowers' Agent.
 
[The remainder of this page is intentionally blank. The next page is the
signature page.]
 
CC:          ADMINISTRATIVE AGENT
 

 
8.08-A - 3

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the undersigned has caused this Revenue Account Withdrawal
Certificate to be executed and delivered as of the day and year first above
written.
 
 
 

 
PACIFIC ETHANOL HOLDING CO. LLC, as Borrowers' Agent
 
By:                                                    
Name:
Title:

 

 
8.08-A - 4

--------------------------------------------------------------------------------

 

EXHIBIT 8.08-B
to Credit Agreement
 
[FORM OF]
POST-CONVERSION DATE
REVENUE ACCOUNT WITHDRAWAL CERTIFICATE
 
Date: [________ __, ____]

 
[ACCOUNTS BANK]
 
[ADDRESS]
 
Reference is made to Section 8.08(c) of the Credit Agreement (as amended,
supplemented or otherwise modified from time to time, the "Credit Agreement"),
dated as of February __, 2007, by and among PACIFIC ETHANOL HOLDING CO. LLC, a
Delaware limited liability company, PACIFIC ETHANOL MADERA LLC, a Delaware
limited liability company, PACIFIC ETHANOL COLUMBIA, LLC, a Delaware limited
liability company, PACIFIC ETHANOL STOCKTON, LLC, a Delaware limited liability
company, PACIFIC ETHANOL IMPERIAL, LLC, a Delaware limited liability company and
PACIFIC ETHANOL MAGIC VALLEY, LLC, a Delaware limited liability company, as
Borrowers, PACIFIC ETHANOL HOLDING CO. LLC, as Borrowers' Agent, each of the
Lenders from time to time party thereto, WESTLB AG, NEW YORK BRANCH, as
Administrative Agent for the Lenders, WESTLB AG, NEW YORK BRANCH, as Collateral
Agent for the Senior Secured Parties, UNION BANK OF CALIFORNIA, N.A., as
Accounts Bank, WESTLB AG, NEW YORK BRANCH, as Lead Arranger and Sole Bookrunner,
MIZUHO CORPORATE BANK, LTD., as Lead Arranger and Co-Syndication Agent, CIT
CAPITAL SECURITIES LLC, as Lead Arranger and Co-Syndication Agent, COOPERATIEVE
CENTRALE RAIFFEISEN­BOERENLEENBANK B.A., "RABOBANK NEDERLAND", NEW YORK BRANCH,
as Lead Arranger and Co-Documentation Agent, and BANCO SANTANDER CENTRAL HISPANO
S.A, NEW YORK BRANCH, as Lead Arranger and Co-Documentation Agent. Capitalized
terms used herein but not otherwise defined herein shall have the respective
meanings set forth in the Credit Agreement.
 
The Borrowers hereby direct the Accounts Bank to withdraw and transfer, from the
account entitled [____], No. ____ (the "Revenue Account"), on [____], 20[__]
(the "Revenue Account Withdrawal Date"), the following amounts: [Note: each
Revenue Account Withdrawal Certificate should only include those priorities
relevant on the given withdrawal date.]

 
8.08-B - 1

--------------------------------------------------------------------------------

 

 

 
(i)   in accordance with Section 8.08(c)(i) of the Credit Agreement, (A) [_____]
[Dollars ($[_____]) to Pacific Ethanol for payment of Sponsor Support
Reimbursements due and owing, and (B) [_______] Dollars ($[_____]) to the
Operating Account ; 1
 
(ii)   in accordance with Section 8.08(c)(ii) of the Credit Agreement, [
_________] Dollars ($[_____ ]) to the Maintenance Capital Expense Account; 1
 
(iii) in accordance with Section 8.08(c)(iii) of the Credit Agreement, [______]
Dollars ($[_____]) to the Administrative Agent, for the account of the Senior
Secured Parties, for payment of Fees, costs and expenses due and payable under
the Financing Documents, 2
 
(iv) in accordance with Section 8.08(c)(iv) of the Credit Agreement, to the
Administrative Agent, for the account of the Senior Secured Parties, (A) [_____]
Dollars ($[_____]) for payment of interest due and payable under the Financing
Documents and (B) [_____] Dollars ($[_____]) for payment of fees, expenses or
Net Swap Payments owing to the Interest Rate Protection Providers;2
 
(v)  in accordance with Section 8.08(c)(v) of the Credit Agreement, [_____]
Dollars ($[_______]) to the Administrative Agent, for the account of the Working
Capital Lenders, as a prepayment of the Working Capital Loans pursuant to
Section 3.10(c) of the Credit Agreement, 2
 
(vi)   in accordance with Section 8.08(c)(vi) of the Credit Agreement, [_____]
Dollars ($[ _______]) to the Administrative Agent (A) for the account of the
Construction/Term Lenders, for payment of principal due and payable with respect
to the Term Loans and (B) for the account of the Interest Rate Providers, for
payment of Swap Termination Value due and payable with respect to the Interest
Rate Protection Agreements;3
 
(vii)  in accordance with Section 8.08(c)(vii) of the Credit Agreement, [
Dollars ($[_______]) to the Working Capital Reserve Account;3
 
(viii) in accordance with Section 8.08(c)(viii) of the Credit Agreement, [_____
Dollars ($[_____]) to the Administrative Agent, for the account of the Working
Capital Lenders, as a prepayment of the Working Capital Loans in an amount equal
to [all outstanding principal amounts of Working Capital Loans on the Working
Capital Maturity Date] [a prepayment on the Working Capital Loans being made at
the option of the Borrowers pursuant to Section 3.09 of the Credit Agreement] ;4
 
 
______________________
 
1 To be included in certificates for each Monthly Date.
2 To be included in certificates for any date on which such amounts are due and
payable.
3 To be included in certificates for each Monthly Date when applicable.
4 To be included on the Working Capital Maturity Date and on any Monthly Date at
the option of the Borrowers.

 
8.08-B - 2

--------------------------------------------------------------------------------

 

(ix)  in accordance with Section 8.08(c)(ix) of the Credit Agreement [_____]
Dollars ($[_____]) to [_____] to Debt Service Reserve Account; 3
 
(x)  in accordance with Section 8.08(c)(x) of the Credit Agreement [_____]
Dollars ($[_____]) to [_____] for payment of Current Priority Subordinated
Interest; 5
 
(xi)  in accordance with Section 8.08(c)(xi) of the Credit Agreement, [_____]
Dollars ($[_____]) to the Administrative Agent, for the account of the Term
Lenders, for a Mandatory Prepayment of the Term Loans in an amount equal to
fifty percent (50%) of the cash remaining in the Revenue Account after the
transfer, if any, required pursuant to priority tenth of Section 8.08(c) of the
Credit Agreement; 6
 
(xii) in accordance with Section 8.08(c)(xii) of the Credit Agreement, [_____]
Dollars ($[_____]) to [insert name of relevant taxing authority(ies) or
Affiliate(s)] for payment of a Permitted Tax Distribution; 5
 
(xiii)  in accordance with Section 8.08(c)(xiii) of the Credit Agreement,
[_____] Dollars ($[_____]) to the Administrative Agent, for the account of the
Lenders, as a Mandatory Prepayment in an amount [such that, after giving effect
to such prepayment, the outstanding principal amount of the Term Loans is equal
to the Target Balance Amount for the Revenue Account Withdrawal Date] [equal to
the greater of (x) an amount such that, after giving effect to such prepayment,
the outstanding principal amount of the Term Loans is equal to the Target
Balance Amount for the Revenue Account Withdrawal Date, and (y) twenty-five
percent (25%) of the cash remaining in the Revenue Account after the transfer
required pursuant to priority tenth of Section 8.08(c) of the Credit
Agreement]; 7 and
 
(xiv) in accordance with Section 8.08(c)(xiv) of the Credit Agreement, [_____]
Dollars ($[_____]) [to the Administrative Agent as a Mandatory Prepayment of the
Term Loans] [to the Prepayment Holding Account].8
 
In support of such direction, the undersigned, on behalf of the Borrowers,
hereby represents and certifies, as of the date hereof and as of the Revenue
Account Withdrawal Date, as follows:
 
(a)     the undersigned is a Financial Officer of the Borrowers' Agent;
 
 
5 May be inserted in certificates on each Quarterly Payment Date, when no
Default or Event of Default has occurred and is continuing.
6 To be inserted in certificates on each Quarterly Payment Date.
7 To be inserted in certificates on each Quarterly Payment Date. The first
option for clause (xiii) of this form to be included prior to the second
anniversary of the Conversion Date. The second option for clause (xiii) of this
form to be included on and after the second anniversary of the Conversion Date.
8 To be inserted in certificates on each Quarterly Payment Date when applicable.
The first option for clause (xiv) of this form to be included if the Historical
Debt Service Coverage Ratio as of the Revenue Account Withdrawal Date is less
than 1.5:1. The second option for clause (xiv) of this form to be included if
the Historical Debt Service Coverage Ratio as of the Revenue Account Withdrawal
Date is greater than or equal to 1.5:1 and the Prospective Debt Service Coverage
Ratio as of the Revenue Account Withdrawal Date is less than 1.5:1.
 

 
8.08-B - 3

--------------------------------------------------------------------------------

 

 (b)  this Revenue Account Withdrawal Certificate is being delivered to the
Accounts Bank not later than 12:00 Noon New York City time on the Revenue
Account Withdrawal Date, and the Revenue Account Withdrawal Date is a [Business
Day] [Monthly Date] [Quarterly Payment Date];
 
(c)  all conditions set forth in the Credit Agreement for the withdrawals
requested hereby have been satisfied; and
 
(d)  on the date hereof, the Conversion Date has occurred, no Notice of
Suspension is in effect and no Default or Event of Default would occur after
giving effect to any application of funds contemplated hereby.
 
The undersigned is executing this Revenue Account Withdrawal Certificate not in
an individual capacity but in its capacity as an Authorized Officer of the
Borrowers' Agent.
 
[The remainder of this page is intentionally blank. The next page is the
signature page.]
 
CC:       ADMINISTRATIVE AGENT
 

 
8.08-B - 4

--------------------------------------------------------------------------------

 
 
 
 
 
IN WITNESS WHEREOF, the undersigned has caused this Revenue Account Withdrawal
Certificate to be executed and delivered as of the day and year first above
written.
 
 
 

 
PACIFIC ETHANOL HOLDING CO. LLC, as Borrowers' Agent
 
By:                                                    
Name:
Title:

 

 
 
 
 
 
 
 
 
 
 

 
8.08-B - 5

--------------------------------------------------------------------------------

 

 

 
 

--------------------------------------------------------------------------------

 

EXHIBIT 8.09
 to Credit Agreement
 
[FORM OF]
OPERATING ACCOUNT WITHDRAWAL CERTIFICATE
 
Date: [________ __, ____]

 
[ACCOUNTS BANK]
 
[ADDRESS]
 
Reference is made to Section 8.09(b)(ii) of the Credit Agreement (as amended,
supplemented or otherwise modified from time to time, the "Credit Agreement"),
dated as of [__________], by and among PACIFIC ETHANOL HOLDING CO. LLC, a
Delaware limited liability company, PACIFIC ETHANOL MADERA LLC, a Delaware
limited liability company, PACIFIC ETHANOL COLUMBIA, LLC, a Delaware limited
liability company, PACIFIC ETHANOL STOCKTON, LLC, a Delaware limited liability
company, PACIFIC ETHANOL IMPERIAL, LLC, a Delaware limited liability company and
PACIFIC ETHANOL MAGIC VALLEY, LLC, a Delaware limited liability company, as
Borrowers, PACIFIC ETHANOL HOLDING CO. LLC, as Borrowers' Agent, each of the
Lenders from time to time party thereto, WESTLB AG, NEW YORK BRANCH, as
Administrative Agent for the Lenders, WESTLB AG, NEW YORK BRANCH, as Collateral
Agent for the Senior Secured Parties, UNION BANK OF CALIFORNIA, N.A., as
Accounts Bank, WESTLB AG, NEW YORK BRANCH, as Lead Arranger and Sole Bookrunner,
MIZUHO CORPORATE BANK, LTD., as Lead Arranger and Co-Syndication Agent, CIT
CAPITAL SECURITIES LLC, as Lead Arranger and Co-Syndication Agent, COOPERATIEVE
CENTRALE RAIFFEISEN­BOERENLEENBANK B.A., "RABOBANK NEDERLAND", NEW YORK BRANCH,
as Lead Arranger and Co-Documentation Agent, and BANCO SANTANDER CENTRAL HISPANO
S.A, NEW YORK BRANCH, as Lead Arranger and Co-Documentation Agent.
 
Capitalized terms used herein but not otherwise defined herein shall have the
respective meanings set forth in the Credit Agreement.
 
The Borrowers hereby direct the Accounts Bank to withdraw and transfer from the
account entitled [_____], No. [____] (the "Operating Account"), on [____],
20[___] (the "Operating Account Withdrawal Date"), the amounts and to the
account's', in each case as set forth on Schedule 1 attached hereto.
 
In support of such direction, the undersigned, on behalf of the Borrowers,
hereby represents and certifies, as of the date hereof and as of the Operating
Account Withdrawal Date, as follows:
 
(a) The undersigned is an Authorized Officer of the Borrowers' Agent.
 

 
8.09 - 1

--------------------------------------------------------------------------------

 

 
 (b)  This Operating Account Withdrawal Certificate is being delivered to the
Accounts Bank not later than 12:00 noon New York City time on the Operating
Account Withdrawal Date, and the Operating Account Withdrawal Date is a Business
Day.
 
 
(c)  All conditions set forth in the Credit Agreement for the withdrawal
requested hereby have been satisfied.
 
(d)  The funds to be withdrawn from the Operating Account pursuant to this
Operating Account Withdrawal Certificate will be transferred to the Local
Account(s) identified on Schedule 1 hereto, for further application to the
payment of amounts due and owing by the Borrowers for Operation and Maintenance
Expenses.
 
(e)  A Blocked Account Agreement with respect to each Local Account identified
on Schedule 1 hereto has been executed and delivered and is in full force and
effect.
 
(f)  After giving effect to the transfers requested hereby, the amounts on
deposit in and standing to the credit of all Local Accounts permitted pursuant
to Section 7.02(i) of the Credit Agreement will not exceed, in the aggregate,
two hundred thousand Dollars ($200,000) for each Plant that has achieved its
Commercial Operation Date.
 
(g)  No Notice of Suspension is in effect and no Default or Event of Default
would occur after giving effect to the application of funds contemplated hereby.
 
The undersigned officer is executing this Operating Account Withdrawal
Certificate not in an individual capacity but in its capacity as an Authorized
Officer of the Borrower's Agent.
 
[The remainder of this page is intentionally blank. The next page is the
signature page.]
 
CC:       ADMINISTRATIVE AGENT
 

 
8.09 - 2

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the undersigned has caused this Operating Account Withdrawal
Certificate to be executed and delivered as of the day and year first above
written.
 
 

 
PACIFIC ETHANOL HOLDING CO. LLC, as Borrowers' Agent
 
By:                                                    
Name:
Title:

 
 

 
 
 
 
 
 
 
 
8.09 - 3

--------------------------------------------------------------------------------

 

Schedule 1 to
Operating Account
Withdrawal Certificate
 
WITHDRAWALS FROM OPERATING ACCOUNT
 
[details to be attached]
 
I.          Withdrawals from Operating Account to permitted Local Account(s).
 
Local Account:                                                   Amount         
Wire Instructions
 
   $
 
 
 
 
 
 
 
 
 
 
 

 
 
8.09 - 4

--------------------------------------------------------------------------------

 

EXHIBIT 8.11
to Credit Agreement
 
[FORM OF]
WORKING CAPITAL TRANSFER CERTIFICATE
 
Date: [______ __, ____]

 
[ACCOUNTS BANK]
 
[ADDRESS]
 
Reference is made to Section 8.111(b)11(c)1[(d)][(e)] of the Credit Agreement
(as amended, supplemented or otherwise modified from time to time, the "Credit
Agreement"), dated as of February __, 2007, by and among PACIFIC ETHANOL HOLDING
CO. LLC, a Delaware limited liability company, PACIFIC ETHANOL MADERA LLC, a
Delaware limited liability company, PACIFIC ETHANOL COLUMBIA, LLC, a Delaware
limited liability company, PACIFIC ETHANOL STOCKTON, LLC, a Delaware limited
liability company, PACIFIC ETHANOL IMPERIAL, LLC, a Delaware limited liability
company and Pacific Ethanol Magic Valley, LLC, a Delaware limited liability
company, as Borrowers, PACIFIC ETHANOL HOLDING CO. LLC, as Borrowers' Agent,
each of the Lenders from time to time party thereto, WESTLB AG, NEW YORK BRANCH,
as Administrative Agent for the Lenders, WESTLB AG, NEW YORK BRANCH, as
Collateral Agent for the Senior Secured Parties, UNION BANK OF CALIFORNIA, N.A.,
as Accounts Bank, WESTLB AG, NEW YORK BRANCH, as Lead Arranger and Sole
Bookrunner, MIZUHO CORPORATE BANK, LTD., as Lead Arranger and Co-Syndication
Agent, CIT CAPITAL SECURITIES LLC, as Lead Arranger and Co-Syndication Agent,
COOPERATIEVE CENTRALE RAIFFEISEN­BOERENLEENBANK B.A., "RABOBANK NEDERLAND", NEW
YORK BRANCH, as Lead Arranger and Co-Documentation Agent, and BANCO SANTANDER
CENTRAL HISPANO S.A, NEW YORK BRANCH, as Lead Arranger and Co-Documentation
Agent. Capitalized terms used herein but not otherwise defined herein shall have
the respective meanings set forth in the Credit Agreement.
 
The Borrowers hereby direct the Accounts Bank to withdraw and transfer, from the
account entitled [_____], No. [____] (the "Working Capital Reserve Account"), on
[_____], 20[_] (the "Working Capital Withdrawal Date"):
 
(i)       In accordance with Section 8.I1(b)(i) of the Credit Agreement,
[_____] Dollars ($[_____ ]) to the payees as set forth on Schedule 1 attached
hereto for the payment of amounts due and owing with respect to Operation and
Maintenance Expenses;
 
(ii)     In accordance with Section 8.11(b)(ii) of the Credit Agreement, [_____]
Dollars ($[_____]) to the payees as set forth on Schedule l attached hereto for
the payment of amounts due and owing with respect to Maintenance Capital
Expenses;

 
8.11 - 1

--------------------------------------------------------------------------------

 

(iii) In accordance with Section 8.11(b)(iii) of the Credit Agreement; [_____]
Dollars ($[_____]]) to the payees as set forth on Schedule 1 attached hereto for
the payment of amounts due and owing for start-up costs with respect to the
[Stockton] [Brawley] [Brawley] Plant; 1
 
(iii)  In accordance with Section 8.11(c) of the Credit Agreement, [_____]
Dollars ($[_____]) for deposit into the Revenue Account;2
 
(iv) In accordance with Section 8.11(d) of the Credit Agreement, [_____] Dollars
($[_____]) from the Working Capital LC Collateral Sub-Account to the
Administrative Agent, for the account of the Working Capital Lenders;
 
(v)  In accordance with Section 8.11(e) of the Credit Agreement, [____] Dollars
($[_____]) from the Working Capital LC Collateral Sub-Account to the Working
Capital Reserve Account.
 
In support of such direction, the undersigned, on behalf of the Borrowers,
hereby represents and certifies, as of the date hereof and as of the Working
Capital Withdrawal Date, as follows:
 
(a)            The undersigned is an Authorized Officer of the Borrowers' Agent.
 
(b)            This Working Capital Transfer Certificate is being delivered to
the Accounts Bank with a copy to the Administrative Agent not later than 12:00
Noon New York City time on the Working Capital Withdrawal Date, and the Working
Capital Withdrawal Date is a Business Day.
 
(c)            All conditions set forth in the Credit Agreement for the
withdrawals requested hereby have been satisfied.
 
(d)            The funds to be withdrawn from the Working Capital Reserve
Account pursuant to this Working Capital Transfer Certificate will:
 
[(i)     in the case of transfers requested pursuant to Section 8.11(b)(i) of
the Credit Agreement, be applied directly to the payment of amounts due and
owing for Operation and Maintenance Expenses in accordance with the Operating
Budget; it being hereby certified that adequate funds are not available for the
payment of such Operation and Maintenance Expenses in the Operating Account and
the amount of such transfer of funds, when taken together with the amounts
transferred to the Operating Account for the current calendar month pursuant to
Section 18.08(b)(i)] [8.08(c)(i)] of the Credit Agreement and any other
transfers pursuant to Section 8.11(b)(i) of the Credit Agreement during the
current calendar month (excluding any amounts so transferred to cover the cost
of corn, natural gas, electricity, insurance premiums and Borrower Taxes), does
not exceed the Permitted Operating Budget Deviation Levels.]
 
[(ii)    in the case of transfers requested pursuant to Section 8.11(b)(ii) of
the Credit Agreement, be applied directly to the payment of amounts due and
owing for Maintenance Capital Expenses in accordance with the Operating Budget;
it being hereby certified that adequate funds are not available for the payment
of such Maintenance Capital Expenses in the Maintenance Capital Expense Account
and the amount of such transfer of funds, when taken together with the amounts
transferred to the Maintenance Capital Expense Account for the current calendar
month pursuant to Section [8.08(b)(01[8.08(c)(ii)] of the Credit Agreement and
any other transfers pursuant to Section 8.11(b)(ii) of the Credit Agreement
during the current calendar month, does not exceed the Permitted Operating
Budget Deviation Levels.]

_____________
 
1 Certificate may provide for transfers to pay start-up costs for multiple
Greenfield Plants.
2 May only be requested on a Quarterly Payment Date.

 
8.11 - 2

--------------------------------------------------------------------------------

 
 
 
[(iii)    in the case of transfers requested pursuant to Section 8.11(b)(iii) of
the Credit Agreement, be applied directly to the payment of amounts due and
owing for start-up costs with respect to the to [Stockton][Brawley][Brawley]
Plant.]
 
[(iv)     The funds to be withdrawn from the Working Capital Reserve Account in
accordance with Section 8.11(c) of the Credit Agreement, will be transferred to
the Revenue Account; it being hereby certified that as of the Working Capital
Withdrawal Date (A) the Working Capital Reserve Required Amount is [_____]
Dollars ($[_____]), (B) the funds on deposit in or standing to the credit of the
Working Capital Reserve Account (other than amounts standing to the credit of
the Working Capital LC Collateral Sub-Account) are [_____] Dollars ($[_____]),
and (C) the amount set forth in (B) is greater than (A) and the amount to be so
transferred to the Revenue Account is equal to the positive difference of (A)
minus (B).
 
[(e)  The funds to be withdrawn from the Working Capital LC Collateral Sub-
Account in accordance with Section 8.11(d) of the Credit Agreement will be paid
to the Administrative Agent, for the account of the Working Capital Lenders, in
an amount equal to the Working Capital Loans made as a result of a draw under a
Letter of Credit that are then due and payable.]
 
[(f)  The funds to be withdrawn from the Working Capital LC Collateral Sub-
Account in accordance with Section 8.11(e) of the Credit Agreement will be
transferred to the Working Capital Reserve Account; it being hereby certified
that the amounts standing to the credit of the Working Capital LC Collateral
Sub-Account are in excess of the aggregate Maximum Available Amounts under all
current Letters of Credit, and such Maximum Available Amounts are set forth on
Annex A attached hereto.]
 
[(h)  No Notice of Suspension is in effect and no Default or Event of Default
has occurred and is continuing or would occur as a result of the withdrawals
requested hereby.)
 
The undersigned officer is executing this Working Capital Transfer Certificate
not in its individual capacity but in its capacity as an Authorized Officer of
the Borrowers' Agent.
 
[The remainder of this page is intentionally blank. The next page is the
signature page.]
 
CC:      ADMINISTRATIVE AGENT
 
_________________________
3  This certification does not need to be made for transfers requested pursuant
to Sections 8.11(d) and (e) of the Credit Agreement.

 
8.11 - 3

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the undersigned has caused this Working Capital Transfer
Certificate to be executed and delivered as of the day and year first above
written.
 
 
 

 
PACIFIC ETHANOL HOLDING CO. LLC, as Borrowers' Agent
 
By:___________________________
Name:
Title:

 
 

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

 
 
 
 

 
8.11 - 4

--------------------------------------------------------------------------------

 

Schedule 1 to Working Capital Transfer Certificate
 
TRANSFERS FROM WORKING CAPITAL ACCOUNT
 
[details to be attached]
 
I.          Transfers from the Working Capital Account for the direct payment of
Operation and Maintenance expenses due and owing.
 
Payee                                          AmountWire Instructions
 
$
 
ILTransfers from the Working Capital Account for the direct payment of
Maintenance Capital Expenses due and owing.
 
Payee                                          AmountWire Instructions
 
$
 
 
III.         Transfers from the Working Capital Account for the direct payment
of start­up costs due and owing with respect to IStocktonliBrawleylIBurlevl.
 
Payee                                         AmountWire Instructions
 
$
 

 

 
8.11 - 5

--------------------------------------------------------------------------------

 

Annex A
to Working Capital
Transfer Certificate
 
  MAXIMUM AVAILABLE AMOUNTS UNDER OUTSTANDING LETTERS OF CREDIT
(details to be attached]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 
8.11 - 6

--------------------------------------------------------------------------------

 

 
EXHIBIT 8.12
to Credit Agreement
 
[FORM OF]
DEBT SERVICE RESERVE LETTER OF CREDIT
 
[INSERT NAME OF BANK]
[INSERT ADDRESS OF BANK]
 
IRREVOCABLE STANDBY LETTER OF CREDIT
 
No. __________
 
 
[Issuance Date]
 
WestLB AG, New York Branch,
as Collateral Agent
1211 Ave of Americas
New York, New York 10036
Attention: Richard Garbarino
Tel.: 212-597-1307
Fax: 212-597-1490
Email: Richard_Garbarino@westlb.com
 
Ladies and Gentlemen:
 
At the request and for the account of [(the "Account Party"), we hereby
establish this Irrevocable and Transferable Standby Letter of Credit (this
"Letter of Credit") for the Stated Amount (as defined below) in your favor as
Collateral Agent (the "Collateral Agent") under the Credit Agreement (as
amended, modified or otherwise supplemented from time to time in accordance with
its terms, the "Credit Agreement"), dated as of February , 2007, by and among
Pacific Ethanol Holding Co. LLC, a Delaware limited liability company ("Pacific
Holding"), Pacific Ethanol Madera LLC, a Delaware limited liability company
("Madera"), Pacific Ethanol Columbia, LLC, a Delaware limited liability company
("Boardman"), Pacific Ethanol Stockton, LLC, a Delaware limited liability
company ("Stockton"), Pacific Ethanol Imperial, LLC, a Delaware limited
liability company ("Brawley") and Pacific Ethanol Magic Valley, LLC, a Delaware
limited liability company ("Burley" and, together with Pacific Holding, Madera,
Boardman, Stockton, and Brawley, the "Borrowers"), Pacific Holding, as
Borrowers' Agent, each of the Lenders from time to time party hereto, WESTLB AG,
NEW YORK BRANCH, as Administrative Agent for the Lenders, WESTLB AG, NEW YORK
BRANCH, as Collateral Agent, UNION BANK OF CALIFORNIA, N.A., as Accounts Bank,
WESTLB AG, NEW YORK BRANCH, as Lead Arranger and Sole Bookrunner, MIZUHO
CORPORATE BANK, LTD., as Lead Arranger and Co-Syndication Agent, CIT CAPITAL
SECURITIES LLC, as Lead Arranger and Co-Syndication Agent, COOPERATIEVE CENTRALE
RAIFFEISEN­BOERENLEENBANK B.A., "RABOBANK NEDERLAND", NEW YORK BRANCH, as Lead
Arranger and Co-Documentation Agent, and BANCO SANTANDER CENTRAL HISPANO S.A,
NEW YORK BRANCH, as Lead Arranger and Co-Documentation Agent. Capitalized terms
used herein but not otherwise defined herein shall have the respective meanings
set forth in the Credit Agreement.
 
8.12 - 1

--------------------------------------------------------------------------------

 
As used in this Letter of Credit, "Dollars" and "$" mean the lawful currency of
the United States of America.
 
"Stated Amount" means, as of any date, (a) [__________] Dollars ($[________])
less (b) the sum of (i) any amounts paid by us to the Collateral Agent under
this Letter of Credit prior to such date and (ii) the aggregate amount of all
Reduction Amounts (as defined below) set forth in all Reduction Notices (as
defined below) received by us prior to such date.
 
This Letter of Credit is valid and effective immediately and, on and after the
date hereof, drawings hereunder may be made by you from time to time by
presentation to us in [New York, New York] in the manner described below at
[INSERT NAME OF ISSUING BANK], [INSERT ADDRESS OF ISSUING BANK], [New York, NY]
of your certificate in the form of Annex A or Annex B hereto, in each case
appropriately completed and signed by one of your authorized officers. We shall
not be obligated to confirm the authenticity of such signature. Our only
obligation with regard to a drawing under this Letter of Credit shall be to
examine the certificate presented and to pay in accordance therewith, and we
shall not be obligated to make any inquiry in connection with the presentation
of such certificate.
 
Drawings hereunder may be made by you from time to time prior to the expiration
hereof at any time during our business hours at the aforementioned address in
[New York, New York], on any Business Day (as defined below). If a drawing
hereunder is presented by you (a) at or prior to [11:00] AM (New York time) on
any Business Day, we hereby agree to honor each such drawing on or before [3:001
PM (New York time) on the same day and (b) after [11:00] AM (New York time) on
any Business Day, we hereby agree to honor each such drawing on or before
[10:00] AM (New York time) on the next succeeding Business Day; provided that,
in the case of clauses (a) and (b) above, such drawing is made in accordance
with the foregoing sentence and the documents presented in connection therewith
conform to the terms and conditions of this Letter of Credit. "Business Day"
means any day that is neither a Saturday or Sunday nor a day on which commercial
banks are authorized or required to be closed in New York, New York.
 
8.12 - 2

--------------------------------------------------------------------------------

 
If a demand for payment made by you hereunder does not, in any instance, conform
to the terms and conditions of this Letter of Credit, we shall give you notice
promptly (but in any event no later than one (1) Business Day after such demand)
that the demand for payment was not effected in accordance with the terms and
conditions of this Letter of Credit, stating the reasons therefor and that we
will upon your instructions hold any documents at your disposal or return the
same to you. Upon being notified that the demand for payment was not effected in
conformity with this Letter of Credit, you may attempt to correct any such
non-conforming demand prior to 12:00 PM (New York time) on the Expiration Date
(as defined below).
 
All payments to be made by us under this Letter of Credit shall be made with our
own funds (and not, directly or indirectly, with any funds or collateral
deposited or pledged with us, or for our account, in each case, by any
Borrower), in immediately available funds, by wire transfer to the account
specified by you in the applicable certificate in the form of Annex A or Annex B
hereto (as the case may be), free and clear of, and without deduction for, any
taxes, duties, fees, liens, set-offs or other deductions of any kind and
regardless of any objection of any third party (including, without limitation,
the Account Party).
 
The Stated Amount shall be permanently reduced as provided in the third
paragraph of this Letter of Credit upon our receipt of a notice from you, in the
form of Annex C attached hereto (a "Reduction Notice"), by the Dollar amount set
forth in each such notice (each such amount being a "Reduction Amount").
 
Only you may make drawings under this Letter of Credit. Multiple drawings may be
made under this Letter of Credit. Upon payment of any such drawing, the Stated
Amount shall be reduced by the amount of such drawing. Upon any drawing in the
amount of the full Stated Amount pursuant to a certificate in the form of Annex
A or Annex B signed by one of your authorized officers, the Stated Amount shall
be reduced to zero and shall not be reinstated. No drawing hereunder shall
exceed the then-applicable Stated Amount. The failure to make a drawing for any
payment required by the Credit Agreement shall not result in this Letter of
Credit ceasing to be available for future such drawings.
 
Unless extended by us in our sole and absolute discretion, this Letter of Credit
shall expire at our close of business on [______________] (the "Expiration
Date") and shall be promptly surrendered to us upon such expiration.
 
Communications with respect to this Letter of Credit, including, without
limitation, the delivery of any Reduction Notice, shall be made in writing and
shall be addressed to us at [INSERT NAME OF ISSUING BANK], [INSERT ADDRESS OF
ISSUING BANK], New York, New York, Attn: _________________, fax number:
___________, and presented to us by facsimile or physical delivery at such
address or, if to you, at the address set forth above, and shall, in either
case, specifically refer to the number of this Letter of Credit.
 
8.12 - 3

--------------------------------------------------------------------------------

 
This Letter of Credit sets forth in full the terms of our undertaking, and this
undertaking shall not in any way be modified, amended, amplified or limited by
reference to any document, instrument or agreement referred to or to which this
Letter of Credit relates, except for the Annexes attached hereto; and any such
reference shall not be deemed to incorporate hereby by reference any such
document, instrument or agreement except for such Annexes.
 
This Letter of Credit is transferable in its entirety (but not in part) to any
transferee that has succeeded you as Collateral Agent under the Credit Agreement
and the other Financing Documents (as defined in the Credit Agreement) and may
be successively transferred to subsequent successor Collateral Agents under the
Credit Agreement and the other Financing Documents (as defined in the Credit
Agreement). Transfers of this Letter of Credit to any such transferee shall be
accompanied by a certificate substantially in the form of Annex D hereto, but
you shall not be required to pay any bank charges in connection with any such
transfer.
 
This Letter of Credit shall be subject to the provisions (to the extent that
such provisions are not inconsistent with this Letter of Credit) of the Uniform
Customs and Practice for Documentary Credits, 1993 Revision, International
Chamber of Commerce Publication No. 500 and, to the extent not inconsistent
therewith, the laws of the State of New York, including, without limitation, the
Uniform Commercial Code as in effect in the State of New York.
 
 

 
Very truly yours,
 
[NAME OF ISSUING BANK]
         
 
By:
        Name:       Title:      
 
Address:
 

 
8.12 - 4

--------------------------------------------------------------------------------

 
ANNEX A
to Debt Service Reserve Letter of Credit
 
CERTIFICATE FOR DRAWING IN CONNECTION
 
WITH A SHORTFALL OF DEBT SERVICE RESERVE AMOUNTS
 
[DATE]
 
[INSERT NAME OF ISSUING BANK]
[INSERT ADDRESS OF ISSUING BANK]
 
Irrevocable Standby Letter of Credit
No. __________
 
WESTLB AG, NEW YORK BRANCH, as Collateral Agent for the Senior Secured Parties
(the "Collateral Agent") under the Credit Agreement (as amended, modified or
otherwise supplemented from time to time in accordance with its terms, the
"Credit Agreement"), dated as of February , 2007, by and among PACIFIC ETHANOL
HOLDING CO. LLC, a Delaware limited liability company ("Pacific Holding"),
PACIFIC ETHANOL MADERA LLC, a Delaware limited liability company ("Madera"),
PACIFIC ETHANOL COLUMBIA, LLC, a Delaware limited liability company
("Boardman"), PACIFIC ETHANOL STOCKTON, LLC, a Delaware limited liability
company ("Stockton"), PACIFIC ETHANOL IMPERIAL, LLC, a Delaware limited
liability company ("Brawley") and PACIFIC ETHANOL MAGIC VALLEY, LLC, a Delaware
limited liability company ("Burley" and, together with Pacific Holding, Madera,
Boardman, Stockton, and Brawley, the "Borrowers"), Pacific Holding, as
Borrowers' Agent, each of the Lenders from time to time party thereto, WESTLB
AG, NEW YORK BRANCH, as Administrative Agent for the Lenders, WESTLB AG, NEW
YORK BRANCH as Collateral Agent, UNION BANK OF CALIFORNIA, N.A., as Accounts
Bank, WESTLB AG, NEW YORK BRANCH, as Lead Arranger and Sole Bookrunner, MIZUHO
CORPORATE BANK, LTD., as Lead Arranger and Co-Syndication Agent, CIT CAPITAL
SECURITIES LLC, as Lead Arranger and Co-Syndication Agent, COOPERATIEVE CENTRALE
RAIFFEISEN­BOERENLEENBANK B.A., "RABOBANK NEDERLAND", NEW YORK BRANCH, as Lead
Arranger and Co-Documentation Agent, and BANCO SANTANDER CENTRAL HISPANO S.A,
NEW YORK BRANCH, as Lead Arranger and Co-Documentation Agent. Capitalized terms
used herein but not otherwise defined herein shall have the respective meanings
set forth in the Credit Agreement, hereby certifies to [INSERT NAME OF ISSUING
BANK], with reference to the Irrevocable Standby Letter of Credit No. [_____]
(the "Letter of Credit"), that:
 
8.12 - 5

--------------------------------------------------------------------------------

 
1.   The Collateral Agent is the "Collateral Agent" under and as defined in the
Credit Agreement.
 
2.   The undersigned is duly authorized to execute and deliver this certificate
on behalf of the Collateral Agent.
 
3.    The Collateral Agent is making a drawing under the Letter of Credit in the
amount of [________] Dollars ($[_______]) pursuant to Section 8.12(c)(i) of the
Credit Agreement. Such drawing does not exceed the Stated Amount (as defined in
the Letter of Credit).
 
You are hereby directed to make payment of the requested drawing to [_______],
as Collateral Agent at [____________________] ABA No. [__________] for further
credit to Account No. [____________] Re: [_______________] Attention:
[___________] (the "Debt Service Reserve Account").
 
 
 
[The remainder of this page is intentionally blank. The next page is the
signature page.]
 
8.12 - 6

--------------------------------------------------------------------------------

 
IN WITNESS WHEREOF, the Collateral Agent has executed and delivered this
certificate as of the ___ day of ____________, 20___.
 
 

 
WESTLB AG, NEW YORK BRANCH,
as Collateral Agent
         
 
By:
        Name:       Title:      
 
 

 
8.12 - 7

--------------------------------------------------------------------------------

 
ANNEX B
to Debt Service Reserve Letter of Credit
 
CERTIFICATE FOR DRAWING
 
UPON EXPIRATION OF LETTER OF CREDIT/CESSATION OF ISSUER AS
ACCEPTABLE BANK
 
[DATE]
 
[INSERT NAME OF ISSUING BANK]
[INSERT ADDRESS OF ISSUING BANK]
 
Irrevocable Standby Letter of Credit
No. __________
 
WESTLB AG, NEW YORK BRANCH, as Collateral Agent for the Senior Secured Parties
(the "Collateral Agent") under the Credit Agreement (as amended, modified or
otherwise supplemented from time to time in accordance with its terms, the
"Credit Agreement"), dated as of February , 2007, by and among PACIFIC ETHANOL
HOLDING CO. LLC, a Delaware limited liability company ("Pacific Holding"),
PACIFIC ETHANOL MADERA LLC, a Delaware limited liability company ("Madera"),
PACIFIC ETHANOL COLUMBIA, LLC, a Delaware limited liability company
("Boardman"), PACIFIC ETHANOL STOCKTON, LLC, a Delaware limited liability
company ("Stockton"), PACIFIC ETHANOL IMPERIAL, LLC, a Delaware limited
liability company ("Brawley") and PACIFIC ETHANOL MAGIC VALLEY, LLC, a Delaware
limited liability company ("Burley" and, together with Pacific Holding, Madera,
Boardman, Stockton, and Brawley, the "Borrowers"), Pacific Holding, as
Borrowers' Agent, each of the Lenders from time to time party thereto, WESTLB
AG, NEW YORK BRANCH, as Administrative Agent for the Lenders, WESTLB AG, NEW
YORK BRANCH as Collateral Agent, UNION BANK OF CALIFORNIA, N.A., as Accounts
Bank, WESTLB AG, NEW YORK BRANCH, as Lead Arranger and Sole Bookrunner, MIZUHO
CORPORATE BANK, LTD., as Lead Arranger and Co-Syndication Agent, CIT CAPITAL
SECURITIES LLC, as Lead Arranger and Co-Syndication Agent, COOPERATIEVE CENTRALE
RAIFFEISEN­BOERENLEENBANK B.A., "RABOBANK NEDERLAND", NEW YORK BRANCH, as Lead
Arranger and Co-Documentation Agent, and BANCO SANTANDER CENTRAL HISPANO S.A,
NEW YORK BRANCH, as Lead Arranger and Co-Documentation Agent. Capitalized terms
used herein but not otherwise defined herein shall have the respective meanings
set forth in the Credit Agreement., hereby certifies to [INSERT NAME OF ISSUING
BANK], with reference to the Irrevocable Standby Letter of Credit No. [_____]
(the "Letter of Credit"), that:
 
8.12 - 8

--------------------------------------------------------------------------------

 
1.   The Collateral Agent is the "Collateral Agent "under and as defined in the
Credit Agreement.
 
2.   The undersigned is duly authorized to execute and deliver this certificate
on behalf of the Collateral Agent.
 
3    The Collateral Agent is making a drawing under the Letter of Credit in the
amount of [_________] Dollars ($[_________]) pursuant to Section
8.12(c)[(ii)][(iii)] of the Credit Agreement. The drawing made hereunder is
equal to the Stated Amount.
 
You are hereby directed to make payment of the requested drawing to [_________],
as Collateral Agent at [_____________________] ABA No. [____________] for
further credit to Account No. [____________] Re: [____________]
Attention: [____________] (the "Debt Service Reserve Account").
 
 
[The remainder of this page is intentionally blank. The next page is the
signature page.]
 
8.12 - 9

--------------------------------------------------------------------------------

 
IN WITNESS WHEREOF, the Collateral Agent has executed and delivered this
certificate as of the ___ day of ___________, 20___.
 
 

 
WESTLB AG, NEW YORK BRANCH,
as Collateral Agent
         
 
By:
        Name:       Title:          

 

 
 
         
 
By:
        Name:       Title:  

 
8.12 - 10

--------------------------------------------------------------------------------

 
ANNEX C
to Debt Service Reserve Letter of Credit
 
REDUCTION NOTICE
 
[DATE]
 
[INSERT NAME OF ISSUING BANK]
[INSERT ADDRESS OF ISSUING BANK]
 
Irrevocable Standby Letter of Credit
No. __________
 
WESTLB AG, NEW YORK BRANCH, as Collateral Agent for the Senior Secured Parties
(the "Collateral Agent") under the Credit Agreement (as amended, modified or
otherwise supplemented from time to time in accordance with its terms, the
"Credit Agreement"), dated as of February , 2007, by and among PACIFIC ETHANOL
HOLDING CO. LLC, a Delaware limited liability company ("Pacific Holding"),
PACIFIC ETHANOL MADERA LLC, a Delaware limited liability company ("Madera"),
PACIFIC ETHANOL COLUMBIA, LLC, a Delaware limited liability company
("Boardman"), PACIFIC ETHANOL STOCKTON, LLC, a Delaware limited liability
company ("Stockton"), PACIFIC ETHANOL IMPERIAL, LLC, a Delaware limited
liability company ("Brawley") and PACIFIC ETHANOL MAGIC VALLEY, LLC, a Delaware
limited liability company ("Burley" and, together with Pacific Holding, Madera,
Boardman, Stockton, and Brawley, the "Borrowers"), Pacific Holding, as
Borrowers' Agent, each of the Lenders from time to time party thereto, WESTLB
AG, NEW YORK BRANCH, as Administrative Agent for the Lenders, WESTLB AG, NEW
YORK BRANCH as Collateral Agent, UNION BANK OF CALIFORNIA, N.A., as Accounts
Bank, WESTLB AG, NEW YORK BRANCH, as Lead Arranger and Sole Bookrunner, MIZUHO
CORPORATE BANK, LTD., as Lead Arranger and Co-Syndication Agent, CIT CAPITAL
SECURITIES LLC, as Lead Arranger and Co-Syndication Agent, COOPERATIEVE CENTRALE
RAIFFEISEN­BOERENLEENBANK B.A., "RABOBANK NEDERLAND", NEW YORK BRANCH, as Lead
Arranger and Co-Documentation Agent, and BANCO SANTANDER CENTRAL HISPANO S.A,
NEW YORK BRANCH, as Lead Arranger and Co-Documentation Agent. Capitalized terms
used herein but not otherwise defined herein shall have the respective meanings
set forth in the Credit Agreement, hereby certifies to [INSERT NAME OF ISSUING
BANK], with reference to the Irrevocable Standby Letter of Credit No. [______]
(the "Letter of Credit"), that:
 
1.    The Collateral Agent is the "Collateral Agent" under and as defined in the
Credit Agreement.
 
8.12 - 11

--------------------------------------------------------------------------------

 
2.   The undersigned is duly authorized to execute and deliver this certificate
on behalf of the Collateral Agent.
 
3.   As of the date of this certificate and prior to giving effect to any
reduction in the Stated Amount (as defined in the Letter of Credit) pursuant to
this certificate, the balance in the Debt Service Reserve Account (as defined in
the Credit Agreement) exceeds the current Debt Service Reserve Requirement (as
defined in the Credit Agreement) for such date by an amount equal
to [__________] Dollars ($[_____]).
 
4.    With effect from the date of this certificate, the Stated Amount is
reduced by [__________] Dollars ($[_____]), which amount set forth in this
paragraph 4 is equal to or less than the amount set forth in paragraph 3 of this
certificate.
 
 
[The remainder of this page is intentionally blank. The next page is the
signature page.]
 
8.12 - 12

--------------------------------------------------------------------------------

 
IN WITNESS WHEREOF, the Collateral Agent has executed and delivered this
certificate as of the ___ day of __________, 20__.
 
 

 
WESTLB AG, NEW YORK BRANCH,
as Collateral Agent
         
 
By:
        Name:       Title:          

 

 
 
         
 
By:
        Name:       Title:  

 
8.12 - 13

--------------------------------------------------------------------------------

 
ANNEX D
to Debt Service Reserve Letter of Credit
 
TRANSFER CERTIFICATE
 
[INSERT NAME OF ISSUING BANK]
[INSERT ADDRESS OF ISSUING BANK]
 
Irrevocable and Standby Letter of Credit
No. __________
 
The undersigned, a duly authorized officer of the undersigned beneficiary of the
Irrevocable Standby Letter of Credit No. [____] (the "Letter of Credit"),
irrevocably instructs [INSERT NAME OF ISSUING BANK], as issuer of the Letter of
Credit, as follows:
 
1.   For value received, the undersigned beneficiary hereby irrevocably
transfers to:
 
[NAME OF TRANSFEREE]
[ADDRESS OF TRANSFEREE]
 
all rights of the undersigned beneficiary to draw under the Letter of Credit in
its entirety. The transferee has succeeded the undersigned as Collateral Agent
under the Credit Agreement (as defined in the Letter of Credit).
 
2.   By this transfer, all rights of the undersigned beneficiary in the Letter
of Credit are transferred to the transferee and the transferee shall have the
sole rights as beneficiary thereof.
 
3.    The Letter of Credit is returned with this certificate and, in accordance
with the Letter of Credit, the undersigned requests that this transfer be
effective and that you transfer the Letter of Credit to the transferee or that,
if so requested by the transferee, you issue a new irrevocable letter of credit
in favor of the transferee in the form of the Letter of Credit.
 
8.12 - 14

--------------------------------------------------------------------------------

 

 
Very truly yours,
 
WESTLB AG, NEW YORK BRANCH,
as Collateral Agent
         
 
By:
        Name:       Title:          

 

 
 
         
 
By:
        Name:       Title:  

 
8.12 - 15

--------------------------------------------------------------------------------

 
ANNEX E
to Debt Service Reserve Letter of Credit
 
FORM OF WAIVER LETTER (LETTER OF CREDIT)
 
To [NAME OF ISSUING BANK]
[ADDRESS OF ISSUING BANK]
 
Ladies and Gentlemen:
 
We refer to (a) the Letter of Credit, No. _________ (the "Letter of Credit"),
issued by [INSERT NAME OF ISSUING BANK] (the "Issuing Bank") in favor of [_____]
as Collateral Agent, and for the account of [_____] (the "Account Party"), dated
as of [_____]; and (b) the [_____] letter of credit reimbursement agreement[s]
listed on Schedule I hereto (the "Reimbursement Agreement[s]") executed by the
Account Party.
 
The undersigned, each of them Delaware limited liability companies [which are
majority owned, directly or indirectly, by the Account Party], have entered into
a Credit Agreement (as amended, modified or otherwise supplemented from time to
time in accordance with its terms, the "Credit Agreement"), dated as of February
____, 2007, with PACIFIC ETHANOL HOLDING CO. LLC, as Borrowers' Agent, each of
the Lenders from time to time party hereto, WESTLB AG, NEW YORK BRANCH, as
Administrative Agent for the Lenders, WESTLB AG, NEW YORK BRANCH, as Collateral
Agent, UNION BANK OF CALIFORNIA, N.A., as Accounts Bank, WESTLB AG, NEW YORK
BRANCH, as Lead Arranger and Sole Bookrunner, MIZUHO CORPORATE BANK, LTD., as
Lead Arranger and Co-Syndication Agent, CIT CAPITAL SECURITIES LLC, as Lead
Arranger and Co-Syndication Agent, COOPERATIEVE CENTRALE
RAIFFEISEN-BOERENLEENBANK B.A., "RABOBANK NEDERLAND", NEW YORK BRANCH, as Lead
Arranger and Co-Documentation Agent, and BANCO SANTANDER CENTRAL HISPANO S.A,
NEW YORK BRANCH, as Lead Arranger and Co- Documentation Agent. Capitalized terms
used herein but not otherwise defined herein shall have the respective meanings
set forth in the Credit Agreement.
 
As a condition to the provision or maintenance of the financing contemplated
under the Credit Agreement, the undersigned are required to obtain from the
Issuing Bank a waiver of any and all rights, powers and remedies against the
undersigned and all of their respective property and assets (whether now or
hereinafter owned or acquired) in connection with (a) the Letter of Credit, (b)
the obligation of the Account Party under the Reimbursement Agreement's], or (c)
otherwise, including any and all rights of the Issuing Bank pursuant to Section
5-117 of the Uniform Commercial Code as in effect in the State of New York
("NYUCC") or, if the NYUCC is revised, any successor provision thereto. We
hereby request that you waive any and all such rights, powers and remedies by
signing below in order to permit us to complete the transactions contemplated by
the Credit Agreement.
 
8.12 - 16

--------------------------------------------------------------------------------

 
This Waiver Letter (the "Waiver Letter") shall become effective as of the date
first above written when, and only when, the Issuing Bank has countersigned this
Waiver Letter .
 
The execution, delivery and effectiveness of this Waiver Letter shall not
operate as a waiver of any right, power or remedy of the Issuing Bank against
the Account Party under the Reimbursement Agreement's].
 
If you agree to the terms and provisions of this Waiver Letter , please evidence
such agreement by executing and returning at least [_____(__)]counterparts of
this Waiver Letter .
 
This Waiver Letter may be executed in any number of counterparts and by the
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be an original, but all the counterparts together
shall constitute one and the same instrument. Delivery of an executed
counterpart of a signature page to this Waiver Letter by telecopy or portable
document format ("pdf') shall be effective as delivery of a manually executed
counterpart of this Waiver Letter .
 
This Waiver Letter shall be governed by, and construed in accordance with, the
laws of the State of New York.
 

 
Very truly yours,
 
PACIFIC ETHANOL HOLDING CO. LLC,
         
 
By:
        Name:       Title:          

 
 

 
PACIFIC ETHANOL MADERA LLC,
         
 
By:
        Name:       Title:  

 
 

 
PACIFIC ETHANOL COLUMBIA, LLC,
         
 
By:
        Name:       Title:  

 
8.12 - 17

--------------------------------------------------------------------------------

 

 
PACIFIC ETHANOL STOCKTON, LLC,
         
 
By:
        Name:       Title:  

 
 

 
PACIFIC ETHANOL IMPERIAL, LLC,
         
 
By:
        Name:       Title:  

 
 

 
PACIFIC ETHANOL MAGIC VALLEY, LLC,
         
 
By:
        Name:       Title:  

 
8.12 - 18

--------------------------------------------------------------------------------

 
Agreed as of the date first above written:
 
[NAME OF ISSUING BANK]
 
 
By: ______________________________
 
Name:
Title:
 
Attachment — Schedule I Reimbursement Agreement[s]
 
8.12 - 19

--------------------------------------------------------------------------------

 
Schedule 1 to
Waiver Letter (Letter of Credit)
 
REIMBURSEMENT AGREEMENT[S]
 
 
8.12 - Schedule 1

--------------------------------------------------------------------------------

 
EXHIBIT 8.14
to Credit Agreement
 
[FORM OF]
INSURANCE AND CONDEMNATION PROCEEDS REQUEST CERTIFICATE
 
 

      Date: [___________  __, ____ ]

 
 
[ACCOUNTS BANK]
 
[ADDRESS]
 
WestLB AG, New York Branch,
as Administrative Agent for the Lenders
1211 Ave of Americas
New York, NY 10036
Attention: Yolette Salnave / Andrea Bailey
Facsimile: 212-302-7946
Email: ny_agency services@westlb.com
 
 
Reference is made to Section 8.14[(c)] [(d)] of the Credit Agreement (as
amended, supplemented or otherwise modified from time to time, the "Credit
Agreement"), dated as of February _________, 2007, by and among PACIFIC ETHANOL
HOLDING CO. LLC, a Delaware limited liability company, PACIFIC ETHANOL MADERA
LLC, a Delaware limited liability company, PACIFIC ETHANOL COLUMBIA, LLC, a
Delaware limited liability company, PACIFIC ETHANOL STOCKTON, LLC, a Delaware
limited liability company, PACIFIC ETHANOL IMPERIAL, LLC, a Delaware limited
liability company and PACIFIC ETHANOL MAGIC VALLEY, LLC, a Delaware limited
liability company, as Borrowers, PACIFIC ETHANOL HOLDING CO. LLC, as Borrowers'
Agent, each of the Lenders from time to time party thereto, WESTLB AG, NEW YORK
BRANCH, as Administrative Agent for the Lenders, WESTLB AG, NEW YORK BRANCH, as
Collateral Agent for the Senior Secured Parties, UNION BANK OF CALIFORNIA, N.A.,
as Accounts Bank, WESTLB AG, NEW YORK BRANCH, as Lead Arranger and Sole
Bookrunner, MIZUHO CORPORATE BANK, LTD., as Lead Arranger and Co-Syndication
Agent, CIT CAPITAL SECURITIES LLC, as Lead Arranger and Co-Syndication Agent,
COOPERATIEVE CENTRALE RAIFFEISEN­BOERENLEENBANK B.A., "RABOBANK NEDERLAND", NEW
YORK BRANCH, as Lead Arranger and Co-Documentation Agent, and BANCO SANTANDER
CENTRAL HISPANO S.A, NEW YORK BRANCH, as Lead Arranger and Co-Documentation
Agent.
 
Capitalized terms used herein but not otherwise defined herein shall have the
respective meanings set forth in the Credit Agreement.
 
8.14 -1

--------------------------------------------------------------------------------

 
The Borrowers hereby direct the Accounts Bank to withdraw and pay from the
account entitled [______], No. [______] (the "[Madera] [Boardman] [Stockton]
[Brawley] [Burley] Insurance and Condemnation Proceeds Account"), on
[__________], 20[___] (the "Insurance and Condemnation Proceeds Withdrawal
Date"), the amounts and to the payees, in each case as set forth on Schedule 1
attached hereto.
 
In support of such direction, the undersigned, on behalf of the Borrowers,
hereby represents and certifies, as of the date hereof and as of the Insurance
and Condemnation Proceeds Withdrawal Date, as follows:
 
(a)   the undersigned is a Financial Officer of the Borrowers' Agent;
 
(b)   this Insurance and Condemnation Proceeds Request Certificate is being
delivered to the Accounts Bank and the Administrative Agent [in connection with
a transfer or withdrawal of funds pursuant to Section 8.14(c) of the Credit
Agreement, no fewer than three (3) Business Days in advance of] [in connection
with a transfer or withdrawal of funds pursuant to Section 8.14(d) of the Credit
Agreement not later than 12:00 Noon New York City time on] the Insurance and
Condemnation Proceeds Withdrawal Date and the Insurance and Condemnation
Proceeds Withdrawal Date is a Business Day;
 
(c)   all conditions set forth in the Credit Agreement for the withdrawals
requested hereby have been satisfied;
 
(d)   the funds to be withdrawn from the [Madera] [Boardman] [Stockton]
[Brawley] [Burley] Insurance and Condemnation Proceeds Account pursuant to this
Insurance and Condemnation Proceeds Request Certificate will be applied directly
for the replacement or repair of damaged assets relating to the [Madera]
[Boardman] [Stockton] [Brawley] [Burley] Plant to which such [Insurance
Proceeds] [Condemnation Proceeds] relate, in accordance with [Section 8.14(c) of
the Credit Agreement] [Section 8.14(d) of the Credit Agreement and the
Restoration or Replacement Plan attached hereto, which has been approved by [the
Administrative Agent (in the case of amounts less than or equal to fifteen
million Dollars ($15,000,000) arising from any one claim or any series of claims
relating to the same occurrence with respect to the same Plant)] [the Required
Lenders (in the case of amounts greater than fifteen million Dollars
($15,000,000) arising from any one claim or any series of claims relating to the
same occurrence with respect to the same Plant)] and by the Independent Engineer
in accordance with Section 8.14(d)(i) of the Credit Agreement];
 
(e)   no withdrawal has been made from any other Project Account to pay the
amounts requested hereby;
 
(f)   this Insurance and Condemnation Proceeds Request Certificate is being
delivered, and the withdrawals specified herein are being requested, in
accordance with the Credit Agreement and the other Transaction Documents; and
 
(g)    no Notice of Suspension has been delivered that has not been withdrawn
and no Default or Event of Default would occur as a result of the transfers or
withdrawals requested hereby.
 
The undersigned officer is executing this Insurance Proceeds Request Certificate
not in a individual capacity but in its capacity as an Authorized Officer of the
Borrowers' Agent.
 
8.14 -2

--------------------------------------------------------------------------------

[The remainder of this page is intentionally blank. The next page is the
signature page.]
 
8.14 -3

--------------------------------------------------------------------------------

 
IN WITNESS WHEREOF, the undersigned has caused this Insurance and Condemnation
Proceeds Request Certificate to be executed and delivered as of the day and year
first above written.
 
 

 
PACIFIC ETHANOL HOLDING CO. LLC,
as Borrowers' Agent
         
 
By:
        Name:       Title: Financial Officer          

 
8.14 -4

--------------------------------------------------------------------------------

 
Schedule 1 to
Insurance and Condemnation Proceeds Request Certificate
 
WITHDRAWALS FROM IMADERA1 [BOARDMAN] [STOCKTON]
IBRAWLEYI [BURLEY'
 
INSURANCE AND CONDEMNATION PROCEEDS ACCOUNT
 
[details to be attached]
 
I.    Withdrawals from [Madera] [Boardman] [Stockton] [Brawley] [Burley]
Insurance and Condemnation Proceeds Account for the replacement or repair of
damaged assets.
 

 

Payee                                          Amount Wire Instructions   $  

 
8.14 - Schedule 1

--------------------------------------------------------------------------------

 
EXHIBIT 8.15
to Credit Agreement
 
[FORM OF]
EXTRAORDINARY PROCEEDS RELEASE NOTICE
 
 

      Date: [___________  __, ____ ]

 
 
[ACCOUNTS BANK]
 
[ADDRESS]
 
 
Reference is made to Section 8.15[(b)][(c)](i) of the Credit Agreement (as
amended, supplemented or otherwise modified from time to time, the "Credit
Agreement"), dated as of [___________________________], by and among PACIFIC
ETHANOL HOLDING CO. LLC, a Delaware limited liability company, PACIFIC ETHANOL
MADERA LLC, a Delaware limited liability company, PACIFIC ETHANOL COLUMBIA, LLC,
a Delaware limited liability company, PACIFIC ETHANOL STOCKTON, LLC, a Delaware
limited liability company, PACIFIC ETHANOL IMPERIAL, LLC, a Delaware limited
liability company and PACIFIC ETHANOL MAGIC VALLEY, LLC, a Delaware limited
liability company, as Borrowers, PACIFIC ETHANOL HOLDING CO. LLC, as Borrowers'
Agent, each of the Lenders from time to time party thereto, WESTLB AG, NEW YORK
BRANCH, as Administrative Agent for the Lenders, WESTLB AG, NEW YORK BRANCH, as
Collateral Agent for the Senior Secured Parties, UNION BANK OF CALIFORNIA, N.A.,
as Accounts Bank, WESTLB AG, NEW YORK BRANCH, as Lead Arranger and Sole
Bookrunner, MIZUHO CORPORATE BANK, LTD., as Lead Arranger and Co-Syndication
Agent, CIT CAPITAL SECURITIES LLC, as Lead Arranger and Co-Syndication Agent,
COOPERATIEVE CENTRALE RAIFFEISEN­BOERENLEENBANK B.A., "RABOBANK NEDERLAND", NEW
YORK BRANCH, as Lead Arranger and Co-Documentation Agent, and BANCO SANTANDER
CENTRAL HISPANO S.A, NEW YORK BRANCH, as Lead Arranger and Co-Documentation
Agent.
 
Capitalized terms used herein but not otherwise defined herein shall have the
respective meanings set forth in the Credit Agreement.
 
The Borrowers hereby direct the Accounts Bank to withdraw and transfer, from the
account entitled [______], No. [______] (the "Extraordinary Proceeds Account"),
on [__________], 20[___]  (the "Extraordinary Proceeds Release Date"), [______]
Dollars ([$______]) for deposit into the Revenue Account.
 
In support of such direction, the undersigned, on behalf of the Borrowers,
hereby represents and certifies, as of the date hereof and as of the
Extraordinary Proceeds Release Date, as follows:
 
(a)    The undersigned is an Authorized Officer of the Borrowers' Agent.
 
8.15 - 1

--------------------------------------------------------------------------------

 
(b)   This Extraordinary Proceeds Release Notice is being delivered to the
Accounts Bank not later than 12:00 Noon New York City time on the Extraordinary
Proceeds Release Date, and the Extraordinary Proceeds Release Date is a Business
Day.
 
(c)   All conditions set forth in the Credit Agreement for the transfer
requested hereby have been satisfied.
 
[(d)    In the case of transfers requested pursuant to Section 8.15(b)(i) of the
Credit Agreement, the aggregate total amount of all proceeds of asset disposals
deposited in or credited to the Extraordinary Proceeds Account during the Fiscal
Year in which this request is being made is less than two million five hundred
thousand Dollars ($2,500,000) (including any amounts previously withdrawn from
the Extraordinary Proceeds Account during this Fiscal Year in accordance with
Section 8.15(b)(i) of the Credit Agreement pursuant to any previous
Extraordinary Proceeds Release Notice).]
 
[(d)    In the case of transfers requested pursuant to Section 8.15(c)(i) of the
Credit Agreement, the aggregate total amount of all Project Document Termination
Payments deposited in or credited to the Extraordinary Proceeds Account during
the Fiscal Year in which this request is being made is less than five million
Dollars ($5,000,000) (including any amounts previously withdrawn from the
Extraordinary Proceeds Account during this Fiscal Year in accordance with
Section 8.15(c)(i) of the Credit Agreement pursuant to any previous
Extraordinary Proceeds Release Notice).]
 
(e)    No Notice of Suspension is in effect and no Default or Event of Default
would occur after giving effect to any application of funds contemplated hereby.
 
The undersigned officer is executing this Extraordinary Proceeds Release Notice
not in an individual capacity but in its capacity as an Authorized Officer of
the Borrower's Agent.
 
[The remainder of this page is intentionally blank. The next page is the
signature page.]
 
CC:    ADMINISTRATIVE AGENT
 
8.15 - 2

--------------------------------------------------------------------------------

 
IN WITNESS WHEREOF, the undersigned has caused this Extraordinary Proceeds
Release Notice to be executed and delivered as of the day and year first above
written.
 
 

 
PACIFIC ETHANOL HOLDING CO. LLC,
as Borrowers' Agent
         
 
By:
        Name:       Title:          

 
8.15 - 3

--------------------------------------------------------------------------------

 
EXHIBIT 8.16
to Credit Agreement
 
[FORM OF]
WARRANTY PROCEEDS REOUEST CERTIFICATE
 

      Date: [___________  __, ____ ]

 
 
[ACCOUNTS BANK]
 
[ADDRESS]
 
 
Reference is made to Section 8.16(b) of the Credit Agreement (as amended,
supplemented or otherwise modified from time to time, the "Credit Agreement"),
dated as of [___________________________], by and among PACIFIC ETHANOL HOLDING
CO. LLC, a Delaware limited liability company, PACIFIC ETHANOL MADERA LLC, a
Delaware limited liability company, PACIFIC ETHANOL COLUMBIA, LLC, a Delaware
limited liability company, PACIFIC ETHANOL STOCKTON, LLC, a Delaware limited
liability company, PACIFIC ETHANOL IMPERIAL, LLC, a Delaware limited liability
company and PACIFIC ETHANOL MAGIC VALLEY, LLC, a Delaware limited liability
company, as Borrowers, PACIFIC ETHANOL HOLDING CO. LLC, as Borrowers' Agent,
each of the Lenders from time to time party thereto, WESTLB AG, NEW YORK BRANCH,
as Administrative Agent for the Lenders, WESTLB AG, NEW YORK BRANCH, as
Collateral Agent for the Senior Secured Parties, UNION BANK OF CALIFORNIA, N.A.,
as Accounts Bank, WESTLB AG, NEW YORK BRANCH, as Lead Arranger and Sole
Bookrunner, MIZUHO CORPORATE BANK, LTD., as Lead Arranger and Co-Syndication
Agent, CIT CAPITAL SECURITIES LLC, as Lead Arranger and Co-Syndication Agent,
COOPERATIEVE CENTRALE RAIFFEISEN­BOERENLEENBANK B.A., "RABOBANK NEDERLAND", NEW
YORK BRANCH, as Lead Arranger and Co-Documentation Agent, and BANCO SANTANDER
CENTRAL HISPANO S.A, NEW YORK BRANCH, as Lead Arranger and Co-Documentation
Agent.
 
Capitalized terms used herein but not otherwise defined herein shall have the
respective meanings set forth in the Credit Agreement.
 
The Borrowers hereby direct the Accounts Bank to withdraw and pay from the
account entitled [______], No. [______] (the "[Madera] [Boardman] [Stockton]
[Brawley] [Burley] Warranty Account"), on [__________], 20[___]  (the "Warranty
Proceeds Withdrawal Date"), the amounts and to the payees, in each case as set
forth on Schedule 1 attached hereto.
 
In support of such direction, the undersigned, on behalf of the Borrowers,
hereby represents and certifies, as of the date hereof and as of the Warranty
Proceeds Withdrawal Date, as follows:
 
8.16 - 1

--------------------------------------------------------------------------------

 
(a)   This Warranty Proceeds Request Certificate is being delivered to the
Accounts Bank not later than 12:00 noon New York City time on the Warranty
Proceeds Withdrawal Date, and the Warranty Proceeds Withdrawal Date is a
Business Day.
 
(b)   The undersigned is an Authorized Officer of the Borrowers' Agent.
 
(c)   All conditions set forth in the Credit Agreement for the withdrawals
requested hereby have been satisfied.
 
(d)   The funds to be withdrawn from the [Madera] [Boardman] [Stockton]
[Brawley] [Burley] Warranty Account pursuant to this Warranty Proceeds Request
Certificate will be applied directly to costs and expenses due and owing with
respect to Warranty Work to which such Warranty Proceeds relate that has been
performed by or on behalf of the Borrowers with respect to the [Madera]
[Boardman] [Stockton] [Brawley] [Burley] Plant, and the nature of such Warranty
Work is described on Schedule 2 hereto.
 
(e)   No withdrawal has been made from any other Project Account to pay the
amounts requested hereby.
 
(f)   No Notice of Suspension is in Effect and no Default or Event of Default
has occurred and is continuing or would occur as a result of the withdrawals
requested hereby.
 
CC:         Administrative Agent
 
Independent Engineer
 
 
[The remainder of this page is intentionally blank. The next page is the
signature page.]
 
8.16 - 2

--------------------------------------------------------------------------------

 
IN WITNESS WHEREOF, the undersigned has caused this Warranty Proceeds Request
Certificate to be executed and delivered as of the day and year first above
written.
 
 

 
PACIFIC ETHANOL HOLDING CO. LLC,
as Borrowers' Agent
         
 
By:
        Name:       Title: Financial Officer          

 
8.16 - 3

--------------------------------------------------------------------------------

 
Schedule 1 to
Warranty Proceeds Request Certificate
 
WITHDRAWALS FROM [MADERA] [BOARDMAN] [STOCKTON]
 
[BRAWLEY] [BURLEY]
 
WARRANTY ACCOUNT
 
[details to be attached]
 
I.    Withdrawals from [Madera] [Boardman] [Stockton] [Brawley] [Burley]
Warranty
 
Proceeds Account for the payment of amounts due and owing for warranty work.
 

 

Payee                                          Amount Wire Instructions   $  

 
8.16 - 4

--------------------------------------------------------------------------------

 
Schedule 2 to
Warranty Proceeds Request Certificate
 
DESCRIPTION OF WARRANTY WORK
 
[Details to be attached]
 
 
8.16 - 5

--------------------------------------------------------------------------------

 
EXHIBIT 11.03
to Credit Agreement
 
[FORM OF]
LENDER ASSIGNMENT AGREEMENT
 
This LENDER ASSIGNMENT AGREEMENT (this "Agreement"), dated as of
[_____________], is by and between [_____________] (the "Assignor")
and [_____________]  (the "Assignee").
 
RECITALS
 
WHEREAS, the Assignor is party to the Credit Agreement (as amended, restated,
supplemented or otherwise modified from time to time, the "Credit Agreement"),
dated as of February ______, 2007, by and among PACIFIC ETHANOL HOLDING CO. LLC,
a Delaware limited liability company, PACIFIC ETHANOL MADERA LLC, a Delaware
limited liability company, PACIFIC ETHANOL COLUMBIA, LLC, a Delaware limited
liability company, PACIFIC ETHANOL STOCKTON, LLC, a Delaware limited liability
company, PACIFIC ETHANOL IMPERIAL, LLC, a Delaware limited liability company and
PACIFIC ETHANOL MAGIC VALLEY, LLC, a Delaware limited liability company, as
Borrowers, PACIFIC ETHANOL HOLDING CO. LLC, as Borrowers' Agent, each of the
Lenders from time to time party hereto, WESTLB AG, NEW YORK BRANCH, as
Administrative Agent for the Lenders, WESTLB AG, NEW YORK BRANCH, as Collateral
Agent for the Senior Secured Parties, UNION BANK OF CALIFORNIA, N.A., as
Accounts Bank, WESTLB AG, NEW YORK BRANCH, as Lead Arranger and Sole Bookrunner,
MIZUHO CORPORATE BANK, LTD., as Lead Arranger and Co-Syndication Agent, CIT
CAPITAL SECURITIES LLC, as Lead Arranger and Co-Syndication Agent, COOPERATIEVE
CENTRALE RAIFFEISEN­BOERENLEENBANK B.A., "RABOBANK NEDERLAND", NEW YORK BRANCH,
as Lead Arranger and Co-Documentation Agent, and BANCO SANTANDER CENTRAL HISPANO
S.A, NEW YORK BRANCH, as Lead Arranger and Co- Documentation Agent;
 
WHEREAS, Assignor desires to assign certain of its interests under the Credit
Agreement to Assignee in accordance with Section 11.03(b) thereof;
 
WHEREAS, as provided under the Credit Agreement, Assignor is a Lender of
[Tranche A Construction Loans] [Tranche B Construction Loans] [Working Capital
Loans] [Tranche A Term Loans] [Tranche B Term Loans] and, as such, as of the
date hereof has the outstanding Commitments and has disbursed the outstanding
Loans as set forth in Annex A hereto;
 
11.03 - 1

--------------------------------------------------------------------------------

 
WHEREAS, Assignor proposes to sell, assign and transfer to the Assignee, and the
Assignee proposes to accept and assume from the Assignor, a ([___] percent
([___]%) interest in all of the rights and obligations of the Assignor under the
Credit Agreement and the other Financing Documents (which includes the
outstanding Loans disbursed by and owing to, and the undisbursed Commitments of,
Assignor and Assignor's participation in the Issuing Bank's liability under each
outstanding Letter of Credit), all on the terms and subject to the conditions of
this Agreement (such interest in such rights and obligations being hereinafter
referred to as the "Assigned Interest"); and
 
WHEREAS, after giving effect to the assignment and assumption under this
agreement, the respective Loans and Commitments of Assignor and Assignee shall
be in the amounts set forth on Annex A.
 
NOW, THEREFORE, in consideration of the foregoing and the mutual agreements
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
 
Section 1. Definitions. All capitalized terms not otherwise defined herein shall
have the respective meanings set forth in the Credit Agreement.
 
Section 2. Assignment.
 
(a)   As of the effective date set forth on the signature page to this Agreement
(the "Effective Date"), subject to and in accordance with the Credit Agreement,
the Assignor irrevocably sells, transfers, conveys and assigns, without
recourse, representation or warranty (except as expressly set forth herein), to
Assignee, and the Assignee irrevocably purchases from the Assignor, the Assigned
Interest, which shall include (i) all of Assignor's rights and obligations in
its capacity as a Lender with respect to the Assigned Interest under the Credit
Agreement, each other Financing Document, and any other documents or instruments
delivered pursuant thereto or in connection therewith to the extent related to
the Assigned Interest and (ii) to the extent permitted to be assigned under
applicable Law, all claims, suits, causes of action and any other right of the
Assignor (in its capacity as a Lender), to the extent related to the Assigned
Interest, against any Person, whether known or unknown, arising under or in
connection with the Credit Agreement, each other Financing Document, and any
other documents or instruments delivered pursuant thereto or the loan
transactions governed thereby or in any way based on or related to any of the
foregoing, including, but not limited to, contract claims, tort claims,
malpractice claims, statutory claims and all other claims at law or in equity
(the foregoing rights, obligations and interests, collectively, the "Assigned
Rights").
 
(b)   Upon acceptance and recording of the assignment and assumption made
pursuant to this Agreement by the Administrative Agent, from and after the
Effective Date, the Administrative Agent shall make all payments in respect of
the Assigned Interest and the Assigned Rights (including all payments of
principal, interest, fees and other amounts) to the Assignor for amounts that
have accrued prior to the Effective Date and to the Assignee for amounts that
have accrued from and including the Effective Date. The Assignor and the
Assignee shall make all appropriate adjustments in payments by the
Administrative Agent for periods prior to the Effective Date or with respect to
the making of this assignment directly between themselves. Each of the Assignor
and the Assignee agrees that if it receives any amount under the Credit
Agreement or any other Financing Document that is for the account of the other,
it shall hold the same for the other to the extent of the other's interest
therein and shall pay promptly the same to the other.
 
11.03 - 2

--------------------------------------------------------------------------------

 
Section 3. Payments. [(a)] As consideration for the sale, assignment and
transfer contemplated in Section 2 hereof, the Assignee shall pay to the
Assignor, on the Effective Date, in the lawful currency of the United States and
in immediately available funds, an amount equal to [_________] Dollars
($[____]), without set-off, counterclaim or deduction of any kind. [(b) As a
condition to the Effective Date, Assignee shall pay to the Administrative Agent
in the lawful currency of the United States and in immediately available funds
the processing and recordation fee of two thousand five hundred Dollars
($2,500), without set-off, counterclaim or deduction of any kind.]
 
Section 4. Representations, Warranties and Undertakings.
 
(a)   The Assignor (i) represents and warrants that (A) it is the legal and
beneficial owner of the Assigned Interest and such Assigned Interest is free and
clear of any Lien or adverse claim and (B) it has full power and authority, and
has taken all action necessary, to execute and deliver this Agreement and to
consummate the transactions contemplated hereby; and (ii) makes no
representation or warranty and assumes no responsibility with respect to (A) any
statements, warranties or representations made in or in connection with the
Credit Agreement or the other Financing Documents or the execution, legality,
validity, enforceability or genuineness, or sufficiency of value of the Credit
Agreement, the other Financing Documents, or any other instrument or document
furnished pursuant thereto or in connection therewith or (B) the financial
condition of any Borrower, any other Loan Party or any Project Party or the
performance or observance by any Borrower or any other Person of any of its
obligations under the Credit Agreement, any other Financing Document, or any
other instrument or document furnished pursuant thereto or in connection
therewith.
 
(b)   The Assignee (i) represents and warrants that it (A) has full power and
authority, and has taken all action necessary, to execute and deliver this
Agreement and to consummate the transactions contemplated hereby and to become a
Lender under the Credit Agreement and the other Financing Documents, and (B)
meets all requirements of an Eligible Assignee, (ii) acknowledges and confirms
that it has received a copy of the Credit Agreement, each other Financing
Document and such other documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into this Agreement and to
purchase the Assigned Interest and assume the Assigned Rights, on the basis of
which it has made such analysis and decision independently and without reliance
on the Administrative Agent or any other Senior Secured Party, (iii) agrees that
it will, independently and without reliance upon the Administrative Agent, any
Borrower, or any other Senior Secured Party and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the Credit Agreement or
any other Financing Document, (iv) appoints and authorizes each Agent to take
such action as agent on its behalf and to exercise such powers under the Credit
Agreement or the other Financing Documents as are delegated to such Agent by the
terms thereof, together with such powers as are reasonably incidental thereto
and (v) will perform in accordance with their terms all of the obligations that
by the terms of the Financing Documents are required to be performed by it as a
Lender. The Assignee further confirms and agrees that in becoming a Lender and
in making its Loans under the Credit Agreement, such actions have and will be
made without recourse to, or representation or warranty, by any Senior Secured
Party.
 
11.03 - 3

--------------------------------------------------------------------------------

 
(c)    The Assignee further agrees to furnish the tax form required by Section
4.07(e) (if so required) of the Credit Agreement no later than the Effective
Date.
 
Section 5. Effectiveness.
 
(a)   The effectiveness of the sale, assignment and transfer hereunder is
subject to (i) the due execution and delivery of this Agreement by the Assignor
and the Assignee, (ii) the receipt by the Assignor of the payment provided for
in Section 3(a) hereof, (iii) consent by the Administrative Agent to this
Agreement and the assignment contemplated hereby, (iv) the receipt by the
Administrative Agent of the processing and recordation fee provided for in
Section 3(b) hereof, [and] (v) the registration of such assignment by the
Administrative Agent in the Register in accordance with Section 11.03 of the
Credit Agreement [, and (vi) consent by the Borrowers' Agent to this Agreement
and the assignment contemplated hereby]1.
 
(b)   Simultaneously with the execution and delivery by the parties hereto of
this Agreement to the Administrative Agent for its recording in the Register,
the Assignor shall deliver its Note (if any) to the Administrative Agent and may
request that new Notes be executed and delivered to [the Assignor and] the
Assignee and reflecting [the respective amounts of the reduced undisbursed
Commitment and outstanding principal of Assignor and] the assigned and assumed
outstanding principal and undisbursed Commitment of the Assignee (plus, if the
Assignee is already a Lender, the amount of its outstanding principal and
undisbursed Commitment immediately prior to the assignment effected hereby). Any
such new Note shall carry the rights to unpaid accrued interest that were
carried by any applicable superseded Note(s) such that no loss of interest shall
result therefrom. Any applicable new Note executed and delivered in accordance
with the foregoing shall have set forth thereon a legend substantially in the
following form:
 
 

--------------------------------------------------------------------------------

1 The Acknowledgment of this Agreement by the Borrowers' Agent is required only
if the Assignor transfers or assigns its rights or obligations under any Tranche
A Loan or any Working Capital Loan, and such transfer or assignment follows a
Successful Syndication, provided no Default or Event of Default has occurred and
is continuing.
 
11.03 - 4

--------------------------------------------------------------------------------

 
"This Note is issued in replacement of [describe replaced note] and,
notwithstanding the date of this Note, this Note carries all of the rights to
unpaid interest that were carried by such replaced Note, such that no loss of
interest shall result from any such replacement."
 
If the Assignee is already a Lender, it shall (promptly following its receipt of
such new Note payable to it) return to the Borrower the prior Note, if any, held
by it.
 
(c)    Except as otherwise provided in the Credit Agreement, effective as of the
Effective Date:
 
(i)   the Assignee shall be deemed automatically to have become a party to, and
the Assignee agrees that it will be bound by the terms and conditions set forth
in, the Credit Agreement, and shall have all the rights and obligations of a
"Lender" under the Credit Agreement and the other Financing Documents as if it
were an original signatory thereto or an original Lender thereunder with respect
to the Assigned Interest and the Assigned Rights; and
 
(ii)   the Assignor shall relinquish its rights (but shall continue to be
entitled to the benefits of Sections 11.07 (Costs and Expenses) and 11.09
(Indemnification by the Borrowers) of the Credit Agreement) and be released from
its obligations under the Credit Agreement and the other Financing Documents to
the extent specified herein.
 
Section 6. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York, United States of America.
 
Section 7. Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed to be an original and all
of which taken together shall constitute one and the same agreement. Delivery of
an executed counterpart of this Agreement by telecopy or portable document
format ("pdf') shall be effective as delivery of a manually executed counterpart
of this Agreement.
 
11.03 - 5

--------------------------------------------------------------------------------

 
Section 8. Further Assurances. The Assignor and the Assignee hereby agree to
execute and deliver such other instruments, and take such other action, as
either party or the Administrative Agent may reasonably request in connection
with the transactions contemplated by this Agreement including, without
limitation, the delivery of any notices to the Borrowers or the Agents that may
be required in connection with the assignment contemplated hereby.
 
Section 9. Binding Effect; Amendment. This Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors and assigns,
subject, however, to the provisions of the Credit Agreement. No provision of
this Agreement may be amended, waived or otherwise modified except by an
instrument in writing signed by each party hereto and by the Administrative
Agent.
 
Section 10. Administrative Agent Enforcement. The Administrative Agent shall be
entitled to rely upon and enforce this Agreement against the Assignor and the
Assignee in all respects.
 
 
[The remainder of this page is intentionally blank. The next page is the
signature page.]
 
11.03 - 6

--------------------------------------------------------------------------------

 
IN WITNESS WHEREOF, the Assignor and the Assignee have caused this Lender
Assignment Agreement to be executed by their duly authorized officers.
 
The effective date for this Agreement is [the date this Agreement is
acknowledged and accepted by the Administrative Agent [and the Borrowers'
Agent]] [___________, 20[___] (the "Trade Date")].
 
 

 
[ASSIGNOR]
         
 
By:
        Name:       Title:          

 

 
[ASSIGNEE]
         
 
By:
        Name:       Title:          

 
 
Accepted and Acknowledged
this ___ day of _______, 20___
 
 
WESTLB AG, NEW YORK BRANCH,
as Administrative Agent
 
By: ______________________________
Name:
Title:
 
By: ______________________________
Name:
Title:
 
11.03 - 7

--------------------------------------------------------------------------------

 
[(If Applicable)
 
PACIFIC ETHANOL HOLDING CO. LLC,
as Borrowers' Agent
 
By: ______________________________
Name:
Title:]
 
11.03 - 8

--------------------------------------------------------------------------------

 
Annex A
to Lender Assignment Agreement
 
[Note: Include only those Loans that Assignor has an interest in.]
 
Loan
Assignor's
Undisbursed
Commitment
Pre-
Assignment
Assignor's Outstanding
Loans Pre-
Assignment
Percentage
(of Assignor's
interests)
Assigned
Assignor's
Undisbursed
Commitment
Post-
Assignment
Assignor's Outstanding
Loans Post- Assignment
Assignee's
Undisbursed
Commitment
Post-
Assignment*
Assignee's Outstanding
Loans Post-
Assignment*
Tranche A Construction Loans
$
$
%
$
$
$
$
Tranche B Construction Loans
$
$
%
$
$
$
$
Working Capital Loans
$
$
%
$
$
$
$
Tranche A Term Loans
$
$
%
$
$
$
$
Tranche B Term Loans
$
$
%
$
$
$
$

 

--------------------------------------------------------------------------------

If Assignee is already a Lender, this number should be calculated taking into
account only the Commitments and Loans assumed by Assignee pursuant to this
Agreement.
 
11.03 - 9

--------------------------------------------------------------------------------

 
 

SCHEDULE 1.01(a)
to Credit Agreement
 
LENDERS, LOAN COMMITMENTS AND OFFICES
 
 I. TRANCHE A LOANS
 
TRANCHE A
LENDER
TRANCHE A
CONSTRUCTION
LOAN COMMITMENT
TRANCHE A
TERM LOAN COMMITMENT
DOMESTIC OFFICE
EURODOLLAR
OFFICE
 
WestLB AG, New York Branch
$33,128,000.00
$33,128,000.00
WestLB AG, New York Branch
1211 Avenue of the Americas
New York, NY 10036
Attention: Cheryl Wilson
Telephone: 212-852-6152
Facsimile: 212-302-7946
WestLB AG, New York Branch
1211 Avenue of the Americas
New York, NY 10036
Attention: Cheryl Wilson
Telephone: 212-852-6152
Facsimile: 212-302-7946
Mizuho Corporate Bank, Ltd.
$33,128,000.00
$33,128,000.00
Mizuho Corporate Bank, Ltd.
1251 Avenue of the Americas
New York, NY 10020
Mizuho Corporate Bank, Ltd.
1251 Avenue of the Americas
New York, NY 10020
Banco Santander Central Hispano, S.A.
$33,128,000.00
$33,128,000.00
Banco Santander Central Hispano, S.A.
45 East 53rd St.
New York, NY 10022
Attention: Ligia Castro
Telephone: 212-350-3677
Facsimile: 212-350-3647
Banco Santander Central Hispano, S.A.
45 East 53rd St.
New York, NY 10022
Attention: Ligia Castro
Telephone: 212-350-3677
Facsimile: 212-350-3647

 
 
 
1.01(a)-1

--------------------------------------------------------------------------------

 
 

 
TRANCHE A
LENDER
TRANCHE A
CONSTRUCTION
LOAN COMMITMENT
TRANCHE A
TERM LOAN COMMITMENT
DOMESTIC OFFICE
 
EURODOLLAR
OFFICE
CIT Capital USA Inc.
$33,128,000.00
$33,128,000.00
CIT Capital USA Inc.
505 Fifth Ave., 10th Floor
New York, NY 10017
Attention: Robert Sexton,
Managing Director
Telephone: 212-771-6006
Facsimile: 212-771-6023
CIT Capital USA Inc.
505 Fifth Ave., 10th Floor
New York, NY 10017
Attention: Robert Sexton,
Managing Director
Telephone: 212-771-600
 Facsimile: 212-771-6023
Cooperatieve Centrale Raiffeisen-
Boerenleenbank B.A., "Rabobank
Nederland," New York Branch
$23,128,000.00
$23,128,000.00
Cooperatieve Centrale Raiffeisen-
Boerenleenbank B.A., "Rabobank Nederland," New York Branch
123 North Wacker Drive, Ste. 2100
Chicago, IL 60606
Attention: Brad Peterson
Telephone: 312-408-8222
Facsimile: 312-408-8240
Cooperatieve Centrale Raiffeisen-
Boerenleenbank B.A., "Rabobank Nederland," New York Branch
123 North Wacker Drive, Ste. 2100
Chicago, IL 60606
Attention: Brad Peterson
Telephone: 312-408-8222
Facsimile: 312-408-8240
Metropolitan Life Insurance Company
$27,270,000.00
$27,270,000.00
JPMorgan Chase Bank
4 New York Plaza
New York, NY 10005
Attention: Michael T. Foresta
Telephone: 212-552-2845
Facsimile: 212-552-0422
n/a
Norddeutsche Landesbank
Girozentrale New York Branch and/or Cayman Island Branch
$27,270,000.00
$27,270,000.00
Nord/LB New York Branch
1114 Avenue of the Americas,
37th Floor
New York, NY 10036
Nord/LB Cayman Island Branch
114 Ave. of the Americas,
37th
New York, NY 10036

 
 
1.01(a)-2

--------------------------------------------------------------------------------

 
 
TRANCHE A
LENDER
TRANCHE A
CONSTRUCTION
LOAN COMMITMENT
TRANCHE A
TERM LOAN COMMITMENT
DOMESTIC OFFICE
 
EURODOLLAR OFFICE
GreenStone Farm Credit Services, ACA/FLCA
$9,090,000.00
$9,090,000.00
GreenStone Farm Credit Services, ACA/FLCA
1760 Abbey Road, Ste. 320
East Lansing, MI 48823
Attention: Ben Mahlich
Telephone: 517-318-4110
Facsimile: 517-318-4148
GreenStone Farm Credit Services, ACA/FLCA
1760 Abbey Road, Ste. 320
East Lansing, MI 48823
Attention: Ben Mahlich
Telephone: 517-318-4110
Facsimile: 517-318-4148
Nordkap Bank AG
$9,090,000.00
$9,090,000.00
n/a
Nordkap Bank AG Thurgauerstrasse 54
8050 Zurich, Switzerland- CH
Attention: Batchimeg Gadola
Telephone: 41-44-306­4920
Facsimile: 41-44-306-
4911
Northwest Farm Credit Services, FLCA
$9,090,000.00
$9,090,000.00
Northwest Farm Credit Services, FLCA
1700 South Assembly
St. Spokane, WA 99224
Attention: Jim Allen
Telephone: 509-340-5555
Facsimile 509-340-5503
Northwest Farm Credit Services, FLCA
1700 South Assembly
St. Spokane, WA 99224
Attention: Jim Allen
Telephone: 509-340-5555
Facsimile 509-340-5503
ShoreBank Pacific
$2,550,000.00
$2,550,000.00
ShoreBank Pacific
203 Howerton Way SE,
PO Box 400
Ilwaco, WA 98631
Attention: Randell Leach
Telephone: 503-916-1552
Facsimile: 503-493-9604
n/a

 
 

 
1.01(a)-3

--------------------------------------------------------------------------------

 

II. TRANCHE B LOANS
 

 
TRANCHE B
LENDER
TRANCHE B
CONSTRUCTION
LOAN COMMITMENT
TRANCHE B
TERM LOAN COMMITMENT
DOMESTIC OFFICE
 
EURODOLLAR OFFICE
WestLB AG, New York Branch
$50,000,000.00
$50,000,000.00
WestLB AG, New York Branch
1211 Avenue of the Americas
New York, NY 10036
Attention: Cheryl Wilson
Telephone: 212-852-6152
Facsimile: 212-302-7946
WestLB AG, New York Branch
1211 Avenue of the Americas
New York, NY 10036
Attention: Cheryl Wilson
Telephone: 212-852-6152
Facsimile: 212-302-7946
Cooperatieve Centrale Raiffeisen-
Boerenleenbank B.A., "Rabobank Nederland," New York Branch
$10,000,000.00
$10,000,000.00
Cooperatieve Centrale Raiffeisen-
Boerenleenbank B.A., "Rabobank Nederland," New York Branch
123 North Wacker Drive, Ste. 2100
Chicago, IL 60606
Attention: Brad Peterson
Telephone: 312-408-8222
Facsimile: 312-408-8240
Cooperatieve Centrale Raiffeisen-
Boerenleenbank B.A., "Rabobank Nederland," New York Branch
123 North Wacker Drive, Ste. 2100
Chicago, IL 60606
Attention: Brad Peterson
Telephone: 312-408-8222
Facsimile: 312-408-8240

 
 

 
1.01(a)-4

--------------------------------------------------------------------------------

 

III. WORKING CAPITAL LOANS
 
WORKING CAPITAL
LENDER
WORKING CAPITAL
CONSTRUCTION
LOAN COMMITMENT
DOMESTIC OFFICE
EURODOLLAR OFFICE
WestLB AG, New York Branch
$3,312,000.00
WestLB AG, New York Branch
1211 Avenue of the Americas
New York, NY 10036
Attention: Cheryl Wilson
Telephone: 212-852-6152 Facsimile: 212-302-7946
WestLB AG, New York Branch
1211 Avenue of the Americas
New York, NY 10036
Attention: Cheryl Wilson
Telephone: 212-852-6152
Facsimile: 212-302-7946
Mizuho Corporate Bank, Ltd.
$3,312,000.00
Mizuho Corporate Bank, Ltd.
1251 Ave. of the Americas
New York, NY 10020
Mizuho Corporate Bank, Ltd.
1251 Ave. of the Americas
New York, NY 10020
Banco Santander Central Hispano, S.A.
$3,312,000.00
Banco Santander Central Hispano, S.A.
45 East 53rd St.
New York, NY 10022
Attention: Ligia Castro
Telephone: 212-350-3677 Facsimile: 212-350-3647
Banco Santander Central Hispano, S.A. 45 East 53rd St.
New York, NY 10022
Attention: Ligia Castro
Telephone: 212-350-3677
Facsimile: 212-350-3647
CIT Capital USA Inc.
$3,312,000.00
C1T Capital USA Inc.
505 Fifth Ave., 10th
Floor New York, NY 10017
Attention: Robert Sexton,
Managing Director
Telephone: 212-771-6006
Facsimile: 212-771-6023
C1T Capital USA Inc.
505 Fifth Ave., 10th Floor
New York, NY 10017
Attention: Robert Sexton, Managing Director
Telephone: 212-771-6006
Facsimile: 212-771-6023
Cooperatieve Centrale Raiffeisen-
Boerenleenbank B.A., "Rabobank Nederland," New York Branch
$3,312,000.00
Cooperatieve Centrale Raiffeisen- Boerenleenbank B.A., "Rabobank Nederland," New
York Branch
123 North Wacker Drive, Ste. 2100
Chicago, IL 60606
Attention: Brad Peterson
Telephone: 312-408-8222
Facsimile: 312-408-8240
CoOperatieve Centrale Raiffeisen­Boerenleenbank B.A., "Rabobank Nederland," New
York Branch
123 North Wacker Drive, Ste. 2100 Chicago, IL 60606
Attention: Brad Peterson
Telephone: 312-408-8222
Facsimile: 312-408-8240

 
 

 
1.01(a)-5

--------------------------------------------------------------------------------

 

 

WORKING CAPITAL
LENDER
WORKING CAPITAL
CONSTRUCTIO
 LOAN COMMITMENT
DOMESTIC OFFICE
EURODOLLAR OFFICE
Metropolitan Life Insurance Company
$2,730,000.00
JPMorgan Chase Bank
4 New York Plaza
New York, NY 10005
Attention: Michael T. Foresta
Telephone: 212-552-2845
Facsimile: 212-552-0422
n/a
Norddeutsche
Landesbank
Girozentrale New York Branch and/or Cayman Island Branch
$2,730,000.00
Nord/LB New York Branch
1114 Ave. of the Americas, 37th Floor
New York, NY 10036
Nord/LB Cayman Island Branch
1114 Ave. of the Americas, 37th Floor
New York, NY 10036
GreenStone Farm Credit Services, ACA/FLCA
$910,000.00
GreenStone Farm Credit Services, ACA/FLCA
1760 Abbey Road, Suite 320
East Lansing, MI 48823
Attention: Ben Mahlich
Telephone: 517-318-4110
Facsimile: 517-318-4148
GreenStone Farm Credit Services, ACA/FLCA
1760 Abbey Road, Suite 320
East Lansing, M1 48823
Attention: Ben Mahlich
Telephone: 517-318-4110
Facsimile: 517-318-4148
Nordkap Bank AG
$910,000.00
n/a
Nordkap Bank AG
Thurgauerstrasse 54
8050 Zurich, Switzerland-CH
Attention: Batchimeg Gadola
Telephone: 41-44-306-4920
Facsimile: 41-44-306-4911
Northwest Farm Credit Services, FLCA
$910,000.00
Northwest Farm Credit Services, FLCA 1700 South Assembly St.
Spokane, WA 99224
Attention: Jim Allen
Telephone: 509-340-5555
Facsimile 509-340-5503
Northwest Farm Credit Services, FLCA
1700 South Assembly St.
Spokane, WA 99224
Attention: Jim Allen
Telephone: 509-340-5555
Facsimile 509-340-5503

 
 

 
1.01(a)-6

--------------------------------------------------------------------------------

 

 

 
WORKING CAPITALLENDER
WORKING CAPITAL
CONSTRUCTION
LOAN COMMITMENT
DOMESTIC OFFICE
EURODOLLAR OFFICE
ShoreBank Pacific
 
$250,000.00
ShoreBank Pacific
203 Howerton Way SE, PO Box 400
 Ilwaco, WA 98631
Attention: Randell Leach
Telephone: 503-916-1552
 Facsimile: 5 03 -493-9604
 
n/a

 

 
1.01(a)-7

--------------------------------------------------------------------------------

 

SCHEDULE 2.08(e)
 
1. Ethanol Production Capacity. In the event that any Plant achieves its
Commercial Operation Date and fails to meet such Plant's Performance Guarantee
for ethanol production capacity, then both the Construction Loan Commitments for
such Plant and the Term Loan Commitments shall be automatically and permanently
reduced on the Commercial Operation Date for such Plant by $1.15384615 for each
denatured gallon (or which equals $1.21153846 for each undenatured gallon) per
year of deviation below the Performance Guarantee for ethanol production
capacity for such Plant.
 
2. Other Performance Criteria. In the event that any Plant achieves its
Commercial Operation Date and fails to meet such Plant's Performance Guarantees
for corn yield, electricity consumption or natural gas consumption, both the
Construction Loan Commitments for such Plant and the Term Loan Commitments shall
be automatically and permanently reduced on the Commercial Operation Date for
such Plant in the manner set forth below.
 
The impact of deviations from each Plant's Performance Guarantees for corn
yield, electricity consumption or natural gas consumption shall be calculated on
an aggregate basis for such Plant, and the impact of performance better than the
level of such Performance Guarantees shall be set off against the impact of
performance lower than the level of such Performance Guarantees; provided,
however, in no event shall this result in an increase in either the Construction
Loan Commitments for such Plant or the Term Loan Commitments.
 
A. Madera Plant
 
Performance Criteria
Impact on Commitment
   
Corn Yield
$225,908 per 0.01 undenatured gallon/bushel of deviation from the Performance
Guarantee for corn yield for the Madera Plant
Electricity Consumption
$64,214 per 0.01 kWh/undenatured gallon of deviation from the Performance
Guarantee for electricity consumption for the Madera Plant
Natural Gas Consumption
$61,035 per 100 natural gas BTUs/undenatured gallon of deviation from the
Performance Guarantee for natural gas consumption for the Madera Plant

 
 

2.08(e)-1

--------------------------------------------------------------------------------

 
 
B.      Boardman Plant
 
Performance Criteria
Impact on Commitment
   
Corn Yield
$226,319 per 0.01 undenatured gallon/bushel of deviation from the Performance
Guarantee for corn yield for the Boardman Plant
Electricity Consumption
$39,452 per 0.01 kWh/undenatured gallon of deviation from the Performance
Guarantee for electricity consumption for the Boardman Plant
Natural Gas Consumption
$58,592 per 100 natural gas BTUs/undenatured gallon of deviation from the
Performance Guarantee for natural gas consumption for the Boardman Plant

 
C.       Stockton Plant
 
Performance Criteria
Impact on Commitment
   
Corn Yield
$406,449 per 0.01 undenatured gallon/bushel of deviation from the Performance
Guarantee for corn yield for the Stockton Plant
Electricity Consumption
$108,778 per 0.01 kWh/undenatured gallon of deviation from the Performance
Guarantee for electricity consumption for the Stockton Plant
Natural Gas Consumption
$108,835 per 100 natural gas BTUs/undenatured gallon of deviation from the
Performance Guarantee for natural gas consumption for the Stockton Plant

 
 

 
2.08(e)-2

--------------------------------------------------------------------------------

 

 
D. Brawley Plant
 
Performance Criteria
Impact on Commitment
   
Corn Yield
$413,714 per 0.01 undenatured gallon/bushel of deviation from the Performance
Guarantee for corn yield for the Brawley Plant
Electricity Consumption
$104,089 per 0.01 kWh/undenatured gallon of deviation from the Performance
Guarantee for electricity consumption for the Brawley Plant
Natural Gas Consumption
$109,929 per 100 natural gas BTUs/undenatured gallon of deviation from the
Performance Guarantee for natural gas consumption for the Brawley Plant

 
 

 
2.08(e)-3

--------------------------------------------------------------------------------

 

E. Burley Plant
 
Corn Yield
$344,122 per 0.01 undenatured gallon/bushel of deviation from the Performance
Guarantee for corn yield for the Burley Plant
Electricity Consumption
$42,739 per 0.01 kWh/undenatured gallon of deviation from the
Performance Guarantee for electricity consumption for the Burley Plant
Natural Gas Consumption
$92,480 per 100 natural gas BTUs/undenatured gallon of deviation from the
Performance Guarantee for natural gas consumption for the Burley Plant

 
 
 

 
2.08(e)-4

--------------------------------------------------------------------------------

 

SCHEDULE 2.09
 to Credit Agreement
 
TRANCHE REALLOCATION ELIGIBLE
 
 
LENDERS AND COMMITMENTS
 
TRANCHE REALLOCATION ELIGIBLE LENDER
TRANCHE REALLOCATION - ELIGIBLE COMMITMENTS
WestLB AG, New York Branch
$10,000,000.00
Mizuho Corporate Bank, Ltd.
$10,000,000.00
Banco Santander Central Hispano, S.A.
$10,000,000.00
CIT Capital USA Inc.
$10,000,000.00

 
 
 

 
2.09-1

--------------------------------------------------------------------------------

 

SCHEDULE 5.11
 to Credit Agreement
 
CONTRACTS
 
PART A
 
I. Pacific Ethanol Madera LLC Project Documents
 
1.
Amended and Restated Phase 1 Design-Build Agreement, dated November 2, 2005,
between Pacific Ethanol Madera LLC and W.M. Lyles Co.

 
2.
Phase 2 Design-Build Agreement, dated November 2, 2005, between Pacific Ethanol
Madera LLC and W.M. Lyles Co.

 
3.
Second Amended and Restated Ethanol Marketing Agreement (Madera Project), dated
the Closing Date, between Pacific Ethanol Madera LLC and Kinergy Marketing, LLC
*

 
4.
WDG Marketing and Services Agreement, dated March 4, 2005, among Pacific
Ethanol, Inc., Phoenix Bio Industries and Western Milling LLC

 
5.
Second Amended and Restated Operation and Maintenance Agreement (Madera), dated
the Closing Date, between Pacific Ethanol Madera LLC and Pacific Ethanol
California, Inc. *

 
6.
License of Technology, dated November 3, 2005, between Pacific Ethanol Madera
LLC and Delta-T Corporation

 
7.
Payoff Letter, dated the Closing Date, among Pacific Ethanol Madera LLC, Hudson
United Capital, a Division of TD Banknorth, N.A. and Comerica Bank

 
8.
Each of the contracts, agreements, instruments, letters, understandings, or
other documentation to which Pacific Ethanol Madera LLC is a party or by which
it or any of its properties is bound which are listed on the Title Insurance
Policy for the Madera Site delivered on the Closing Date pursuant to Section
6.01(r) of the Credit Agreement.

 
II. Pacific Ethanol Columbia, LLC Project Documents
 
1.
Construction Agreement for the Boardman Project, dated August 28, 2006, between
Pacific Ethanol Columbia, LLC and Parsons RCIE Inc.

 
2.
Engineering, Procurement and Technology License Agreement, dated September 6,
2006, between Pacific Ethanol Columbia, LLC and Delta-T Corporation

 

 
5.11-1

--------------------------------------------------------------------------------

 

3.
Construction Management Agreement (Boardman Project), dated the Closing Date,
between Pacific Ethanol Columbia, LLC and Pacific Ethanol California, Inc. *

 
4.
Construction Contract (Boardman Grain Facilities), dated June 9, 2006, between
Pacific Ethanol Columbia, LLC and the Ken Bratney Company

 
5.
Construction Contract, dated May 18, 2006, between Pacific Ethanol Columbia, LLC
and Swaggart Brothers, Inc.

 
6.
Ethanol Marketing Agreement (Boardman Project), dated the Closing Date, between
Pacific Ethanol Columbia, LLC and Kinergy Marketing, LLC *

 
7.
Distillers Grains Marketing Agreement (Boardman Project), dated the Closing
Date, between Pacific Ethanol Columbia, LLC and Pacific Ag. Products, LLC *

 
8.
Port of Morrow Lease, dated April 20, 2006, between Pacific Ethanol Columbia,
LLC and the Port of Morrow

 
9.
Operation and Maintenance Agreement (Boardman Project), dated the Closing Date,
between Pacific Ethanol Columbia, LLC and Pacific Ethanol California, Inc. *

 
10.
Transportation and Dock Services Agreement, dated February 15, 2007, among
Pacific Ethanol Columbia, LLC, Tidewater Terminal Co. and Tidewater Barge Lines,
Inc.

 
11.
Deposit Escrow Agreement, dated February 15, 2007, among Pacific Ethanol
Columbia, LLC, U.S. Bank National Association, Tidewater Terminal Co. and
Tidewater Barge Lines, Inc.

 
12.
Each of the contracts, agreements, instruments, letters, understandings, or
other documentation to which Pacific Ethanol Columbia, LLC is a party or by
which it or any of its properties is bound which are listed on the Title
Insurance Policy for the Boardman Plant delivered on the Closing Date pursuant
to Section 6.01(r) of the Credit Agreement.

 
HI. Pacific Ethanol Stockton, LLC Project Documents
 
1.
Construction Management Agreement (Stockton Project), dated the Closing Date,
between Pacific Ethanol Stockton, LLC and Pacific Ethanol California, Inc.*

 
2.
Ethanol Marketing Agreement (Stockton Project), dated the Closing Date, between
Pacific Ethanol Stockton, LLC and Kinergy Marketing, LLC *

 
3.
Distillers Grains Marketing Agreement (Stockton Project), dated the ClosingDate,
between Pacific Ethanol Stockton, LLC and Pacific Ag. Products, LLC *

 

 
5.11-2

--------------------------------------------------------------------------------

 

4.
Operation and Maintenance Agreement (Stockton Project), dated the Closing Date,
between Pacific Ethanol Stockton, LLC and Pacific Ethanol California, Inc.*

 
5.
Engineering, Procurement and Technology License Agreement, General Conditions
(Plant No. 3), dated September 6, 2006, between Pacific Ethanol Stockton, LLC
(as assignee of Pacific Ethanol, Inc.) and Delta-T Corporation

 
IV. Pacific Ethanol Imperial, LLC Project Documents
 
1.
Construction Management Agreement (Brawley Project), dated the Closing Date,
between Pacific Ethanol Imperial, LLC and Pacific Ethanol California, Inc. *

 
2.
Ethanol Marketing Agreement (Brawley Project), dated the Closing Date, between
Pacific Ethanol Imperial, LLC and Kinergy Marketing, LLC *

 
3.
Distillers Grains Marketing Agreement (Brawley Project), dated the Closing Date,
between Pacific Ethanol Imperial, LLC and Pacific Ag. Products, LLC *

 
4.
Operation and Maintenance Agreement (Brawley Project), dated the Closing Date,
between Pacific Ethanol Imperial, LLC and Pacific Ethanol California, Inc.*

 
5.
Engineering, Procurement and Technology License Agreement, General Conditions
(Plant No. 5), dated September 6, 2006, between Pacific Ethanol Imperial, LLC
(as assignee of Pacific Ethanol, Inc.) and Delta-T Corporation

 
 
V. Pacific Ethanol Magic Valley, LLC Project Documents
 
1.
Construction Management Agreement (Burley Project), dated the Closing Date,
between Pacific Ethanol Magic Valley, LLC and Pacific Ethanol California, Inc. *

 
2.
Ethanol Marketing Agreement (Burley Project), dated the Closing Date, between
Pacific Ethanol Magic Valley, LLC and Kinergy Marketing, LLC *

 
3.
Distillers Grains Marketing Agreement (Burley Project), dated the Closing Date,
between Pacific Ethanol Magic Valley, LLC and Pacific Ag. Products, LLC *

 
4.
Operation and Maintenance Agreement (Burley Project), dated the Closing Date,
between Pacific Ethanol Magic Valley, LLC and Pacific Ethanol California, Inc. *

 
5.
Engineering, Procurement and Technology License Agreement, General Conditions
(Plant No. 4), dated September 6, 2006, between Pacific Ethanol Magic Valley,
LLC (as assignee of Pacific Ethanol, Inc.) and Delta-T Corporation

 

VI. Pacific Ethanol Holding Co. LLC Project Documents
 

 
5.11-3

--------------------------------------------------------------------------------

 

1.
Indemnity and Fee Agreement, dated the Closing Date, among Pacific Ethanol
Holding Co. LLC, Michael C. Doyle and Stewart Management Company

 
2.
Corn Procurement and Handling Agreement, dated the Closing Date, between Pacific
Ethanol Holding Co. LLC and Pacific Ag. Products, LLC *

 
 
PART B
 
Not applicable.
 
* All agreements marked with an * are Affiliate agreements.
 
 

 
5.11-4

--------------------------------------------------------------------------------

 

SCHEDULE 5.12
 to Credit Agreement
 
UCC FILING OFFICES
 
UCC Filing Offices
 
Pacific Ethanol California, Inc.
Office of the Secretary of State of the State of California
 
Pacific Ethanol Holding Co. LLC
Office of the Secretary of State of the State of Delaware
 
Pacific Ethanol Madera LLC
Office of the Secretary of State of the State of Delaware
 
Pacific Ethanol Columbia, LLC
Office of the Secretary of State of the State of Delaware
 
Pacific Ethanol Stockton, LLC
Office of the Secretary of the State of the State of Delaware, on the date of
initial Funding for the Stockton Plant
 
Pacific Ethanol Imperial, LLC
Office of the Secretary of the State of the State of Delaware, on the date of
initial Funding for the Brawley Plant
 
Pacific Ethanol Magic Valley, LLC
 
Office of the Secretary of the State of the State of Delaware, on the date of
initial Funding for the Burley Plant
 
Mortgage Recording Offices
 
Pacific Ethanol Madera LLC
County Recorder's Office for the County of Madera (California)
 
Pacific Ethanol Columbia, LLC
Morrow County Recorder's Office (Oregon)
 
Pacific Ethanol Stockton, LLC
County of San Joaquin Office of the Assessor-Recorder-County Clerk (California)
 
Pacific Ethanol Imperial, LLC
Imperial County Recorder's Office (California)
 
 
 
 
5.12-1

--------------------------------------------------------------------------------

 

Pacific Ethanol Magic Valley, LLC  
Cassia County Recorder's Office (Idaho)
 
**With respect to the filings to be made in the Office of the Secretary of State
of the State of Delaware and in the Office of the Secretary of State of the
State of California, pursuant to Section 9-515 of the Uniform Commercial Code as
now in effect in the State of Delaware and the State of California,
respectively, the effectiveness of a filed financing statement lapses on the
expiration of the date that is five years after the date of filing, unless
before the lapse a continuation statement is filed in accordance with Section
9-515(d) within the six-month period prior to the expiration of the applicable
five-year period.
 
 
 
 
 
 
 

 
5.12-2

--------------------------------------------------------------------------------

 

SCHEDULE 5.13(a)
to Credit Agreement
 
SITE DESCRIPTIONS
 
MADERA
PARCEL A:
 
A PARCEL OF LAND LYING IN THE NORTH 'A OF SECTION 2, TOWNSHIP 12 SOUTH, RANGE 18
EAST, MOUNT DIABLO BASE AND MERIDIAN ACCORDING TO THE OFFICIAL PLAT THEREOF,
BEING ALSO A PORTION OF PARCEL 1 OF PARCEL MAP NO. 1121, RECORDED IN BOOK 23 OF
MAPS, AT PAGE 11, MADERA COUNTY RECORDS, MORE PARTICULARLY DESCRIBED AS FOLLOWS:
 
BEGINNING AT THE SOUTHWEST CORNER OF SAID PARCEL I; THENCE NORTH 00° 31' 16"
EAST ALONG THE WEST LINE OF SAID PARCEL 1 A DISTANCE OF 2,412.82 FEET TO THE
NORTHWEST CORNER OF SAID PARCEL 1; THENCE SOUTH 89° 16' 26" EAST ALONG THE NORTH
LINE OF SAID PARCEL I A DISTANCE OF 874.08 FEET TO A POINT ON THE SOUTHWESTERLY
LINE OF THE ATCHESON TOPEKA AND SANTA FE RAILROAD COMPANY'S RIGHT-OF-WAY; THENCE
SOUTH 35° 19' 16" EAST ALONG SAID RAILROAD RIGHT-OF-WAY LINE A DISTANCE OF
2,457.39 FEET; THENCE SOUTH 89° 55' 38" WEST AND PARALLEL WITH THE SOUTH LINE OF
SAID PARCEL 1 A DISTANCE OF 855.09 FEET; THENCE SOUTH 00° 27' 17" WEST A
DISTANCE OF 393.68 FEET TO A POINT ON THE SOUTH LINE OF SAID PARCEL 1, SAID
POINT BEING ALSO THE NORTHWEST CORNER OF PARCEL 1 OF PARCEL MAP NO. 2031,
RECORDED IN BOOK 27 OF MAPS, AT PAGE 140, MADERA COUNTY RECORDS; THENCE SOUTH
89° 55' 38" WEST ALONG THE SOUTH LINE OF PARCEL 1 OF SAID PARCEL MAP NO. 1121 A
DISTANCE OF 643.46 FEET TO THE CENTER OF SAID SECTION 2; THENCE CONTINUING SOUTH
89° 55' 38" WEST ALONG THE SOUTH LINE OF LAST SAID PARCEL 1 A DISTANCE OF 815.04
FEET TO THE POINT OF BEGINNING.
 
APN: 047-130-020 (PORTION)
 
PARCEL B:
 
A PARCEL OF LAND IN SECTION 2, TOWNSHIP 12 SOUTH, RANGE 18 EAST, MOUNT DIABLO
BASE AND MERIDIAN ACCORDING TO THE OFFICIAL PLAT THEREOF, MORE PARTICULARLY
DESCRIBED AS FOLLOWS:

 
5.13(a)-1

--------------------------------------------------------------------------------

 

 
BEGINNING AT THE NORTHWEST CORNER OF PARCEL I OF PARCEL MAP NO. 2031, RECORDED
IN BOOK 27 OF MAPS AT PAGE 140, MADERA COUNTY RECORDS; THENCE SOUTH 89° 55' 38"
WEST ALONG THE NORTHERLY BOUNDARY LINE OF PARCEL 2 OF SAID PARCEL MAP NO. 2031 A
DISTANCE OF 643.46 FEET TO THE CENTER OF SAID SECTION 2; THENCE CONTINUING SOUTH
89° 55' 38" WEST A DISTANCE OF 815.04 FEET; THENCE SOUTH 0° 31' 16" WEST A
DISTANCE OF 653.00 FEET; THENCE NORTH 89° 55' 38" EAST A DISTANCE OF 1459.26
FEET TO A POINT ON THE WEST LINE OF SAID PARCEL 1; THENCE CONTINUING NORTH 89°
55' 38" EAST, PARALLEL TO THE NORTH LINE OF SAID PARCEL I A DISTANCE OF 1343.48
FEET TO A POINT ON THE EAST LINE OF SAID PARCEL 1; THENCE NORTH 0° 28' 16" EAST
ALONG THE EAST LINE OF SAID PARCEL 1 A DISTANCE OF 365.46 FEET TO A POINT ON THE
SOUTHWESTERLY LINE ON THE ATCHESON, TOPEKA AND SANTA FE RAILROAD COMPANY'S
RIGHT-OF-WAY; THENCE NORTH 35° 25' 56" WEST ALONG SAID RAILROAD RIGHT-OF-WAY
LINE A DISTANCE OF 352.56 FEET TO THE NORTHEASTERLY CORNER OF SAID PARCEL I;
THENCE NORTH 35° 19' 16" WEST CONTINUING ALONG SAID RAILROAD RIGHT-OF-WAY LINE A
DISTANCE OF 482.04 FEET; THENCE SOUTH 89° 55' 38" WEST, PARALLEL TO THE NORTH
LINE OF SAID PARCEL I A DISTANCE OF 855.09 FEET TO A POINT ON THE NORTHERLY
EXTENSION OF THIS WEST LINE OF SAID PARCEL 1; THENCE SOUTH 0° 27' 17" WEST, A
DISTANCE OF 393.68 FEET, TO THE POINT OF BEGINNING.
 
APN: 047-130-020 (PORTION)
 
BOARDMAN
 
A LEASEHOLD ESTATE, FOR THE TERM AND UPON THE TERMS, CONDITIONS AND PROVISIONS
AS CONTAINED IN THAT CERTAIN MEMORANDUM OF GROUND LEASE, INCLUDING THE TERMS AND
PROVISIONS THEREOF, BY AND BETWEEN THE PORT OF MORROW, A MUNICIPAL CORPORATION
OF THE STATE OF OREGON, AS LESSOR, AND PACIFIC ETHANOL COLUMBIA, LLC, A DELAWARE
LIMITED LIABILITY COMPANY, AS LESSEE, REOCRDED OCTOBER 5, 2006 AS 2006-17758,
MORROW COUNTY MIRCOFILM RECORDS, ON THE FOLLOWING DESCRIBED PROPERTY:
 
A PARCEL OF LAND LOCATED IN SECTION 2, TOWNSHIP 4 NORTH, RANGE 25 EAST OF THE
WILLAMETTE MERIDIAN, IN THE COUNTY OF MORROW, STATE OF OREGON, DESCRIBED AS
FOLLOWS:
 
BEGINNING AT A POINT ON THE NORTH RIGHT 0 WAY LINE OF CENTER LOOP DRIVE BEING
NORTH 04°45'10" WEST A DISTANCE OF 1,666.80 FEET FROM THE SOUTH QUARTER CORNER
OF SECTION 2, IN TOWNSHIP 4 NORTH, RANGE 25 EWM; THENCE NORTHWESTERLY ALONG THE
NORTH RIGHT OF WAY OF SAID CENTER LOOP DRIVE, ALONG A 530.26 FOOT CURVE TO THE
LEFT, SAID CURVE HAVING A RADIUS OF 470.00 FEET, AN INTERNAL ANGLE OF 64°38'29"
AND A CHORD WHICH BEARS NORTH 80°21'18" WEST A DISTANCE OF 502.58 FEET; THENCE
CONTINUING ALONG THE NORTH RIGHT OF WAY LINE OF CENTER LOOP DRIVE SOUTH
67°19'28" WEST A DISTANCE OF 80.00 FEET; THENCE NORTH 22°40'32" WEST A DISTANCE
OF 10.00 FEET; THENCE NORTHWESTERLY ALONG A 419.11 FOOT CURVE TO THE LEFT, SAID
CURVE HAVING A RADIUS OF 595.00 FEET, AN INTERNAL ANGLE OF 40°21'29" AND A CHORD
WHICH BEARS NORTH 42°51'17" WEST A DISTANCE OF 410.50 FEET; THENCE NORTH
38°56'09" EAST A DISTANCE OF 1,258.00 FEET; THENCE SOUTH 51°03'51" EAST A
DISTANCE OF 970.00 FEET; THENCE SOUTH 43°24'17" WEST A DISTANCE OF 1,008.18 FEET
TO THE NORTH RIGHT OF WAY LINE OF CENTER LOOP DRIVE AND THE POINT OF BEGINNING.

 
5.13(a)-2

--------------------------------------------------------------------------------

 

 
STOCKTON
 
With respect to the Stockton Site, the real property interests to be set forth
in the Title Insurance Policy to be provided upon the initial Funding with
respect to the Stockton Plant or as otherwise reasonably satisfactory to the
Administrative Agent.
 
BRAWLEY
 
With respect to the Brawley Site, the real property interests to be set forth in
the Title Insurance Policy to be provided upon the initial Funding with respect
to the Brawley Plant or as otherwise reasonably satisfactory to the
Administrative Agent.
 
BURLEY
 
With respect to the Burley Site, the real property interests to be set forth in
the Title Insurance Policy to be provided upon the initial Funding with respect
to the Burley Plant or as otherwise reasonably satisfactory to the
Administrative Agent.
 

 
5.13(a)-3

--------------------------------------------------------------------------------

 
 
SCHEDULE 5.19(d)(iii)
to Credit Agreement

UNDERGROUND STORAGE TANKS
 
Under Ground Storage Tanks at the Madera Plant
 
Nine underground storage tanks ("USTs") have been used at Madera. Two USTs of
undetermined volume were filled with cement and abandoned in place. Three USTs
of undetermined volume were filled with sand and abandoned in place. Four USTs
were removed from the site approximately 20 years ago. Inspection records and
soil sample analyses did not indicate fuel releases into soil at the UST
locations. The Madera County Environmental Health Department has granted closure
for the USTs.
 
Under Ground Storage Tanks at the Burley Plant
 
Three USTs have been used at Burley. One 300-gallon gasoline UST and one
500-gallon diesel UST were removed from the site approximately 10 years ago. The
tanks were in good condition and did not show any signs of corrosion or leaks at
the time of removal. One 500-gallon heating oil UST remains on the property,
located near the back door of the on-site residence. The heating system in the
residence was converted to natural gas approximately three years ago.
 
 

 
5.19(d)(iii)-1

--------------------------------------------------------------------------------

 

SCHEDULE 5.23
to Credit Agreement
 
SEPARATENESS PROVISIONS
 
In the case of Pacific Holding:
 
(1)       The board of directors and each entity holding membership interests in
Pacific Holding (other than the Independent Member) (the "Pacific Holding
Member") shall cause Pacific Holding to do or cause to be done all things
necessary to preserve and keep in full force and effect its existence, rights
(charter and statutory) and franchises; provided, however, that Pacific Holding
shall not be required to preserve any such right or franchise if the board of
directors shall determine that the preservation thereof is no longer desirable
for the conduct of its business and that the loss thereof is not disadvantageous
in any material respect to Pacific Holding. For so long as any Obligation
remains outstanding, the board of directors also shall cause Pacific Holding to:
 
(a) maintain its own separate books and records and bank accounts (other than
the Project Accounts);
 
(b) at all times conduct its business solely in its own name in a manner not
misleading to other Persons as to its identity;
 
(c) have a board of directors separate from that or those of the Pacific Holding
Member(s) and any other Person;
 
(d) file its own tax returns, if any, as may be required under applicable law,
to the extent (1) not part of a consolidated group filing a consolidated return
or returns or (2) not treated as a division for tax purposes of another
taxpayer, and pay any taxes so required to be paid under applicable law;
 
(e)  not commingle its assets with assets of any other Persons and hold all of
its assets in its own name (except to the extent otherwise provided in the
Financing Documents);
 
(f) strictly comply with all organizational formalities to maintain its separate
existence;
 
(g) maintain separate financial statements, showing its assets and liabilities
separate and apart from those of any other Person (other than any of Pacific
Holding's subsidiaries), and not have its assets listed on any financial
statement of any other Person; provided, however, that Pacific Holding's assets
may be included in consolidated financial statements of one of its Affiliates,
provided that for financial statements covering fiscal quarters ending on and
after March 31, 2007 (i) appropriate disclosure within the consolidated
financial statements or footnotes thereto shall be made to indicate the
separateness of Pacific Holding from such Affiliate and to indicate that Pacific
Holding's assets and credit are not available to satisfy the debts and other
obligations of such Affiliate or any other Person and (ii) such assets shall
also be listed on Pacific Holding's own separate balance sheet; provided,
further that nothing herein shall be construed to require that such separate
balance sheet be disclosed in public reports filed with the Securities and
Exchange Commission;

 
5.23-1

--------------------------------------------------------------------------------

 

 

 
(h) pay its own liabilities only out of its own funds or from the Project
Accounts, provided, however, the foregoing shall not require any member of
Pacific Holding to make any additional capital contributions to Pacific Holding;
 
(i) maintain an arm's-length relationship with its Affiliates and the member of
Pacific Holding and enter into transactions with Affiliates and any such member
only on a commercially reasonable basis and on terms similar to those of an
arm's-length transaction (except to the extent it may (i) guarantee the
obligations of another Borrower as permitted under the Financing Documents or
(ii) enter into any contract or any other Affiliate transaction permitted under
the Credit Agreement);
 
(j) correct any known misunderstanding regarding its separate identity and not
identify itself as a division of any other Person;
 
(k) maintain adequate capital in light of its contemplated business purpose,
transactions and liabilities; provided, however, the foregoing shall not require
any member of Pacific Holding to make any additional capital contributions to
Pacific Holding; and
 
(l) cause the directors, officers, agents and other representatives of Pacific
Holding to act at all times with respect to Pacific Holding consistently and in
furtherance of the foregoing and in the best interests of Pacific Holding.
 
B.                In the case of each other Borrower:
 
(1)        Such Borrower shall maintain separate bank accounts and separate
books   of account from each other Borrower and the Pledgor (other than the
Project Accounts maintained in accordance with the Credit Agreement). The
separate liabilities of such Borrower shall be readily distinguishable from the
liabilities of each of its Affiliates, including the Pledgor (except to the
extent otherwise contemplated by the Transaction Documents). Such Borrower shall
conduct its business solely in its own name in a manner not misleading to other
Persons as to its identity.
 
(2)        Such Borrower shall not, so long as any Obligation is outstanding and
to the extent restricted by the Financing Documents, amend, alter or change the
terms of its limited liability company agreements in any material respect unless
the Administrative Agent consents.
 

 
5.23-2

--------------------------------------------------------------------------------

 

(3)        For so long as any Obligation remains outstanding, the board of
directors shall cause such Borrower to:
 
(a) maintain its own separate books and records and bank accounts (other than
the Project Accounts);
 
(b) have a board of directors separate from that or those of each entity holding
membership interests in such Borrower and any other Person;
 
(c) file its own tax returns, if any, as may be required under applicable law,
to the extent (1) not part of a consolidated group filing a consolidated return
or returns or (2) not treated as a division for tax purposes of another
taxpayer, and pay any taxes so required to be paid under applicable law;
 
(d) not commingle its assets with assets of any other Persons and hold all of
its assets in its own name (except to the extent otherwise provided in the
Financing Documents);
 
(e) strictly comply with all organizational formalities to maintain its separate
existence;
 
(f) pay its own liabilities only out of its own funds or from the Project
Accounts, provided, however, the foregoing shall not require the member of such
Borrower to make any additional capital contributions to such Borrower;
 
(g) maintain an arm's-length relationship with its Affiliates and the member of
such Borrower and enter into transactions with Affiliates and the member of such
Borrower only on a commercially reasonable basis and on terms similar to those
of an arm's-length transaction (except to the extent it may (1) guarantee the
obligations of another Borrower as permitted under the Financing Documents or
(2) enter into any contract or any other Affiliate transaction permitted under
the Credit Agreement);
 
(h) correct any known misunderstanding regarding its separate identity and not
identify itself as a division of any other Person;
 
(i) maintain adequate capital in light of its contemplated business purpose,
transactions and liabilities; provided, however, the foregoing shall not require
the member of such Borrower to make any additional capital contributions to such
Borrower; and
 
(j) cause the directors, officers, agents and other representatives of such
Borrower to act at all times with respect to such Borrower consistently and in
furtherance of the foregoing and in the best interests of such Borrower.

 
5.23-3

--------------------------------------------------------------------------------

 

SCHEDULE 5.29
 to Credit Agreement
 
LEGAL NAMES AND PLACE OF BUSINESS
 
Legal Names
 
Pacific Holding: Pacific Ethanol Holding Co. LLC, a Delaware limited liability
company.
 
Madera: Pacific Ethanol Madera LLC, a Delaware limited liability company.
 
Boardman: Pacific Ethanol Columbia, LLC, a Delaware limited liability company.
 
Stockton: Pacific Ethanol Stockton, LLC, a Delaware limited liability company.
 
Brawley: Pacific Ethanol Imperial, LLC, a Delaware limited liability company.
 
Burley: Pacific Ethanol Magic Valley, LLC, a Delaware limited liability company.
 
Sole Place of Business and Chief Executive Office of Each Borrower
 
5711 N. West Avenue
Fresno, California 93711
 
The Chief Executive Office may change (subject to Section 5.29 of the Credit
Agreement) to:
 
4060 Capital Mall, Suite 2060
Sacramento, California 95814
 

 
5.29-1

--------------------------------------------------------------------------------

 

SCHEDULE 5.30
to Credit Agreement
 
BROKER FEES
 
None.
 
 
 
 
 
 
 
 
 
 
 
 
5.30-1

--------------------------------------------------------------------------------

 
 
SCHEDULE 6.01(g)(i)
 to Credit Agreement
 
 
EXISTING LIENS
 
 
1.
Lien granted by Pacific Ethanol Holding Co. LLC in favor of Hudson United
Capital, a division of TD Banknorth, N.A., pursuant to that certain Member
Interest Pledge Agreement, dated as of April 10, 2006, between Pacific Ethanol
Madera LLC and Hudson United Capital, a division of TD Banknorth, N.A., which
Lien will be released and terminated on the Closing Date.

 
2.
Lien granted by Pacific Ethanol Madera LLC in favor of Hudson United Capital, a
division of TD Banknorth, N.A., pursuant to that certain Assignment and Security
Agreement, dated as of April 10, 2006, between Pacific Ethanol Madera LLC and
Hudson United Capital, a division of TD Banknorth, N.A., which Lien will be
released and terminated on the Closing Date.

 
 
 
 
 
 
 
 
 
 
 
6.01(g)(i)-1

--------------------------------------------------------------------------------

 
 
 
Schedule 6.01(q)
to Credit Agreement
 
DRAWDOWN SCHEDULES
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
6.01(q)-1

--------------------------------------------------------------------------------

 
 
 
 
 
 
6.01(q) - 2

--------------------------------------------------------------------------------

Schedule 6.02(e)(i)
 to the Credit Agreement
 
Acceptable Project Parties
 
Any Person, other than a process technology provider, (a) having (i) industry-
specific experience and positive reputation reasonably acceptable to the
Administrative Agent (which shall be deemed to be acceptable if such experience
and positive reputation are equal to or greater than the experience and
reputation of a Project Party party to any comparable Project Document (whether
such agreement is then or was previously in effect) on the date such Project
Document was approved hereunder) and (ii) credit, or credit support (which may
include a Project Document Guarantee), reasonably acceptable to the
Administrative Agent (which shall be deemed to be acceptable if such credit or
credit support are equal to or greater than the credit or credit support of a
Project Party party to any comparable Project Document (whether such agreement
is then or was previously in effect) on the date such Project Document was
approved hereunder) or (b) with respect to any counterparty that is not a Major
Project Party, that is otherwise reasonably acceptable to the Administrative
Agent.
 
For the avoidance of doubt, if the process technology provider for any Plant is
a Person other than Delta-T, such Project Party will be subject to approval by
the Required Lenders.
 
The parties hereto acknowledge and agree that (i) the Stockton Port District, as
landlord under the Stockton Lease, shall be an acceptable Project Party and (ii)
W.M. Lyles Co. and its Affiliates shall each be an acceptable Project Party as a
Construction Contractor so long as such party provides credit or credit support
(which may include a Project Document Guarantee or payment and performance
bonds) reasonably acceptable to the Administrative Agent (which shall be deemed
to be acceptable if such credit or credit support is equal to or greater than
the credit or credit support of a Project Party party to a comparable
Construction Contract on the date such Construction Contract was approved
hereunder).
 
 
 
 
 
 
 
 
 
 
 
6.02(e)(i)-1

--------------------------------------------------------------------------------

 
 
Schedule 6.02(e)(iv)
to the Credit Agreement
 
Project Party Consents
 
As a condition to the first Funding for each Plant, Consents are required with
respect to each Project Document related to such Plant to which a Major Project
Party is a party (other than the following, with respect to which no Consent
shall be required: (1) the Construction Contract with Parsons relating to the
Boardman Plant, (ii) the Madera DG Agreement, (iii) the Borrower LLC Agreements
and (iv) any lease that contains provisions for the benefit and protection of a
mortgagee (including the Collateral Agent) (whether in such lease or leasehold
mortgage, nondisturbance agreement, estoppel certificate, or similar document
executed in connection therewith in favor of the Collateral Agent, for the
benefit of the Senior Secured Parties) in form and substance reasonably
satisfactory to the Administrative Agent and the Collateral Agent).
 
 
 
 
 
 
 
 
 
 
 
 
6.02(e)(iv)-1

--------------------------------------------------------------------------------

 
 

SCHEDULE 7.01(h)
to Credit Agreement
 
INSURANCE
 
Note: the requirements of this Insurance Schedule apply to each Plant (and the
Borrower that owns such Plant) from and after the date of the initial Funding
Notice with respect to such Plant, and apply to Pacific Holding from and after
the date of the initial Funding Notice. Notwithstanding the above, the report of
the Insurance Consultant delivered on the Closing Date shall address these
requirements of this Insurance Schedule as they apply to each Plant and each
Borrower.
 
1.
GENERAL PROVISIONS

 
1.1.     The Borrowers shall at all times carry and maintain or cause to be
carried and maintained, at their own expense, the minimum insurance coverage set
forth in this Schedule 7.01(h). The terms and conditions of all insurance
policies (including the amount, scope of coverage, deductibles, and self-insured
retentions) shall be reasonably acceptable to the Administrative Agent (in
consultation with the Insurance Consultant) in all respects as of the date of
the initial Funding. After the date of the initial Funding and until the
Discharge Date, the terms and conditions of all insurance policies (including
the amount, scope of coverage, deductibles, and self-insured retentions) shall
be acceptable in all respects in the reasonable judgment of the Administrative
Agent (acting in consultation with the Insurance Consultant), and the
Administrative Agent (acting in consultation with the Insurance Consultant) may
require that such terms be modified if (i) a state of facts or circumstances
exists with respect to any Plant or the Project that was not foreseen by the
Administrative Agent on the date of this Agreement and which, in the reasonable
judgment of the Administrative Agent (acting in consultation with the Insurance
Consultant), renders such coverage inadequate, and (ii) the requested coverage
is available on commercially reasonable terms taking into account, with respect
to any Plant that has not achieved its Commercial Operation Date, the
Construction Budget for such Plant. All insurance carried pursuant to this
Schedule 7.01(h) shall conform to the relevant provisions of the respective
Project Documents and be with insurance companies that are rated "A-, X" or
better by Best's Insurance Guide and Key Ratings, or other insurance companies
of recognized responsibility satisfactory to the Administrative Agent (acting in
consultation with the Insurance Consultant). None of the Agents or the other
Senior Secured Parties shall have any obligation or liability for premiums,
commissions, assessments or calls in connection with any insurance policy
required under this Schedule 7.01(h).
 
Capitalized terms used in this Schedule 7.01(h) not otherwise defined herein
shall have the meanings set forth in this Agreement, or if not defined therein,
as such terms are used in the common practice of the insurance industry.
 
The insurance carried in accordance with this Schedule 7.01(h) shall be endorsed
as follows: The Collateral Agent shall be sole loss payee with respect to all
First Party policies including the Builders Risk, Delay in Start Up, Marine and
inland Transit and Delay in Start Up, Property All Risk and Business
Interruption, Leasehold Interest Property All Risk and Business Interruption
(where such Leasehold insurance exists) hereof using a Standard Lenders Loss
Payable Clause reasonably acceptable to the Administrative Agent (acting in
consultation with the Insurance Consultant). The Administrative Agent, in its
capacity and on behalf of the Lenders, and the Collateral Agent, on behalf of
the Senior Secured Parties, shall be additional insureds with respect to all of
the Borrowers' insurance (where legally allowed);

 
7.01(h)-1

--------------------------------------------------------------------------------

 

 
 
(a)           The insurance policies provided by the Borrowers shall allow that
the interest of the Administrative Agent, Collateral Agent and the other Senior
Secured Parties shall not be invalidated by any action or inaction of any of the
Borrowers or the Insureds and shall insure the Administrative Agent, Collateral
Agent and the other Senior Secured Parties regardless of any breach or violation
by the any of the Borrowers or the Insured of any warranties, declarations or
conditions in such policies or any foreclosure or change in ownership of any
Plant or the Project;
 
(b)           The insurer thereunder shall waive all rights or subrogation
against the Administrative Agent, Collateral Agent and the other Senior Secured
Parties and their respective officers, employees, agents, successors and assigns
and shall waive any right of setoff and counterclaim and any other right to
deduction whether by attachment or otherwise;
 
(c)           Such insurance shall be primary without right of contribution of
any other insurance carried by or on behalf of any of Administrative Agent,
Collateral Agent and the other Senior Secured Parties with respect to its
interest as such in the Project and each policy insuring against liability to
third parties shall contain a severability of interests or cross liability
provision; and
 
(d)           Any insurance carried under this Schedule 7.01(h) that is written
to cover more than one insured shall provide that all terms, conditions,
insuring agreements and endorsements, with the exception of limits of liability
(which shall be applicable to all insureds as a group) and liability for
premiums (which shall be solely a liability of the Borrowers), shall operate in
the same manner as if there were a separate policy covering such insured.
 
1.2.      Adjustment of Losses.
 
(a)            The loss, if any, under any insurance required to be carried
hereunder shall be adjusted with the insurance companies or otherwise collected,
including the filing in a timely manner of appropriate proceedings, by the
Borrowers, subject to the reasonable approval of the Administrative Agent
(acting in consultation with the Insurance Consultant) as it pertains to losses
under the Builders Risk, Delay in Start Up, Transit, Property, Business
Interruption, Leasehold Property and Business Interruption and other applicable
first party policies only. In addition, the Borrowers shall take all other steps
necessary or reasonably requested by the Administrative Agent to collect from
insurers any loss covered by any of the insurance policies herein. All such
policies shall provide that the loss, if any, and coverage afforded under such
insurance shall be adjusted and paid as provided in this Schedule 7.01(h).
 
(b)            The Borrowers shall promptly notify the Administrative Agent of
any property damage loss covered by any insurance. The Borrowers shall cooperate
and consult with the Administrative Agent in all matters pertaining to the
settlement or adjustment of any and all claims and demands for damages on
account of any taking or condemnation of any Plant or the Project or pertaining
to the settlement, compromising or arbitration of any claim on account of any
damage or destruction of any Plant or the Project or any portion thereof.
Without the prior written consent of the Administrative Agent (acting in
consultation with the Insurance Consultant), no Borrower will settle, or consent
to the settlement of, any proceeding arising out of any damage, destruction or
condemnation of any Plant or the Project or any portion thereof.
 

 
7.01(h)-2

--------------------------------------------------------------------------------

 

1.3.      Application of Payments. All payments with respect to the insurance
policies required by this Schedule 7.01(h) shall promptly be deposited in the
relevant Insurance Proceeds Account or the Revenue Account as required pursuant
to Article VIII (Project Accounts) for application in accordance with the
provisions of this Agreement.
 
1.4.      Evidence of Insurance. On the Closing Date, on an annual basis no more
than ten (10) days following each policy anniversary, and otherwise as required
under the Credit Agreement, the Borrowers shall furnish to the Administrative
Agent with approved certification of all required insurance. An authorized
representative of each insurer shall execute such certificates. Such
certificates shall identify underwriters, the type of insurance, the insurance
limits, the risks covered thereby and the policy term, and the insurance broker
or insurance carrier providing such certificates shall specifically state
(either in such certificate or otherwise) that the special provisions enumerated
for such insurance herein are provided by such insurance. The Borrowers shall
certify that the premiums on all such policies have been paid in full for the
current year or will be paid when due. Upon request, the Borrowers will promptly
furnish to the Administrative Agent copies of all insurance policies, binders
and cover notes or other evidence of such insurance relating to the Project.
 
1.5.      No Duty to Verify. No provision of this Schedule 7.01(h) or any
provision of any Transaction Document shall impose on the Administrative Agent,
Collateral Agent or any Senior Secured Party any duty or obligation to verify
the existence or adequacy of the insurance coverage maintained by the Borrowers,
nor shall the Administrative Agent, Collateral Agent or any Senior Secured Party
be responsible for any representations or warranties made by or on behalf of any
Borrower to any insurance company or underwriter.
 
2.
CONSTRUCTION PERIOD INSURANCE

 
2.1.      Coverage. The following coverages shall be maintained as required
below.
 
(a)            Commercial General Liability.
 
Commercial general liability insurance for each Plant, written on "occurrence"
policy forms, including coverage for premises/operations, products/completed
operations, broad form property damage, blanket contractual liability,
independent contractor's and personal injury, with no exclusions for explosion,
or collapse and underground perils, with primary coverage limits of no less than
one million Dollars ($1,000,000) for injuries or death to one or more persons or
damage to property resulting from any one occurrence and a two million Dollar
($2,000,000) annual aggregate limit. The commercial general liability policy
shall also include a severability of interest clause and a cross liability
clause in the event more than one entity is "named insured" under the liability
policy. Deductibles in excess of two hundred fifty thousand Dollars ($250,000)
shall be subject to review and reasonable approval by the Administrative Agent
(acting in consultation with the Insurance Consultant). This policy shall also
be endorsed to include fire legal liability and (where the exposure exists) rail
road protective with limits no less than replacement cost of the value of any
real property covered under any rail agreement entered into by any Borrower.
 
(b)            Automobile Liability.
 
Automobile liability insurance, including coverage for owned, non-owned and
hired automobiles for both bodily injury and property damage in accordance with
statutory legal requirements, with combined single limits of no less than one
million Dollars ($1,000,000) per accident with respect to bodily injury,
property damage or death. Automobile insurance shall include the Motor Carrier
Act Endorsement encompassing Hazardous Materials Cleanup (MCS­90), if
applicable.

 
7.01(h)-3

--------------------------------------------------------------------------------

 

 
(c)           Workers Compensation.
 
Workers compensation insurance to statutory limits and employer's liability with
a limit of not less than one million Dollars ($1.000,000) per occurrence and in
the aggregate and such other forms of insurance that any Borrower or the
Construction Contractor is required by law to provide during construction of any
Plant or the Project, providing statutory benefits and covering loss resulting
from injury, sickness, disability or death of the employees of any Borrower,
Construction Contractor and subcontractors who are working on such Plant or the
Project.
 
(d)           Umbrella or Excess Liability.
 
Umbrella or excess liability insurance of not less than twenty million Dollars
($20,000,000) per occurrence and in the aggregate in respect of products and
completed operations liability which may be satisfied during the construction
period through a combination of the Construction Contractor, and the Borrowers'
insurance policies. Such coverages shall be on a per occurrence basis and
inclusive of coverage provided by the policies described in Sections 2.1(a) and
(b) of this Schedule 7.01(h) and, with respect to employer's liability, Section
2.1(c) of this Schedule 7.01(h), the limits on which shall apply toward the
limit set forth in this section. If the policy or policies provided under this
Section 2.1(d) contain(s) aggregate limits applying to other operations of the
Borrowers, other than the relevant Plant, and such limits are diminished below
fifteen million Dollars ($15,000,000) by any incident, occurrence, claim,
settlement or judgment against such insurance that has caused the insurer to
establish a reserve, the Borrowers shall, within five (5) Business Days after
obtaining knowledge of such event, inform the Administrative Agent, and within
thirty (30) Business Days after the occurrence of such event shall purchase an
additional umbrella/excess liability insurance policy satisfying the
requirements of this Section 2.1(d).
 
(e)            Aircraft Liability.
 
Aircraft liability insurance, to the extent exposure exists, in an amount not
less than ten million Dollars ($10,000,000) for all owned, non-owned and hired
aircraft, fixed wing or rotary, used in connection with the construction of the
Project.
 
(f)            Builder's Risk.
 
The Borrowers are to evidence the following insurance for each Plant prior to
the date of the initial Funding Notice for the Construction Loans for such Plant
(the "Builder's Risk  Effective Date").

 
7.01(h)-4

--------------------------------------------------------------------------------

 

 
From the Builder's Risk Effective Date until such time as coverage is replaced
under permanent cover as set forth in Section 3.1(d) of this Schedule 7.01(h),
builder risk insurance, as such term is used in the common practice of the
insurance industry, on a replacement cost basis with windstorm, flood and
earthquake (including sinkhole and subsidence) and providing coverage for each
Plant including land transit, removal of debris, insuring the buildings,
structures, machinery (including resultant damage from design, workmanship or
material defect with coverage restrictions not more onerous than LEG2/DE4 or the
equivalent), equipment, facilities, fixtures and other properties constituting a
part of each Plant in a minimum amount not less one hundred percent (100%) of
the full replacement cost of such Plant. Such coverage will include strike,
vandalism, and malicious mischief to the extent it is commercially and
reasonably available. Sub limits are permitted as respects the perils of
professional fees ($250,000), debris removal (the greater of $5,000,000 or 25%
of loss), inland and (if applicable) marine transit (in an amount sufficient to
satisfy replacement cost values of any shipment in conveyance), offsite storage
($5,000,000 per storage area), extra and/or expediting expense ($5,000,000 per
occurrence), earthquake (25% of the replacement cost of the asset), flood (25%
of the replacement cost of the asset) and local authorities regulations
($1,000,000). The Builder's Risk policy shall contain coverage for operational
testing and startup and, to the extent applicable, full replacement cover for
machinery breakdown and electrical injury. All such policies may have
deductibles of not greater than two hundred fifty thousand Dollars ($250,000)
per loss for physical damage and five hundred thousand Dollars ($500,000) for
machinery breakdown, including for hot testing, commissioning, defects and
maintenance, windstorm, flood and lightening with a maximum deductible of five
hundred thousand Dollars ($500,000), or two percent (2%) of values at risk for
earthquake (5% for California earthquake). This coverage shall not include any
annual or term aggregate limits of liability or any clause requiring the payment
of additional premium to reinstate the limits after loss except as regards the
insurance applicable to the perils of flood, windstorm and earth movement.
 
(g)            Delay in Startup.
 
From the date of the initial Funding Notice, delay in startup insurance, on an
"all risks" basis (as such term is used in common practice of the insurance
industry on the date of this Agreement) including operational testing, and
startup (machinery breakdown and electrical injury) coverage, during the
construction period with limits of no less than twelve (12) months of projected
scheduled debt service requirements and continuing expenses with the twelve (12)
month indemnification period being exclusive of the deductible waiting period.
The deductible or waiting period shall not exceed thirty (30) days from the
planned Final Completion Date. This coverage shall not include any annual or
term aggregate limits of liability or clause requiring the payment of additional
premium to reinstate the limits after loss except with regards to the insurance
applicable to the perils of flood and earth movement.
 
(h)            Marine Cargo (to the extent exposure exists).
 
At least thirty (30) days prior to the shipment of equipment manufactured
outside the United States, ocean cargo coverage shall be secured in an amount
not less than the full replacement costs of equipment shipped with certificates
of insurance being evidenced to the Administrative Agent. Such coverage shall
apply to all equipment destined for the Project that is valued in excess of two
hundred fifty thousand Dollars ($250,000) and/or that is considered critical and
has a lead time to replace exceeding one (1) month. The ocean cargo policy shall
attach coverage at the point of loading for departure from the premises of the
manufacturer and shall continue in force until the shipment arrives at the
relevant Plant including sixty (60) days storage, or until it is insured under
the erection all risk policy. Delay in opening shall be insured in an amount
equivalent to twelve (12) months indemnity of continuing expenses and Debt
Service subject to a deductible of thirty (30) days commencing from the
scheduled completion date as defined in the policy. Deductibles applying to
marine cargo shall not exceed one hundred thousand Dollars ($100,000).
 
(i)             Pollution Legal Liability.

 
7.01(h)-5

--------------------------------------------------------------------------------

 

 
Sudden and Accidental pollution legal liability insurance on a named perils
basis with a limit commensurate (in the reasonable opinion of the Insurance
Consultant) with industry practice for like construction projects, sufficient to
meet contractual requirements but not less than three million Dollars
($3,000,000). Such coverage can be included in the commercial general liability
and umbrella or excess liability covers or provided separately. Claims made
coverage forms and deductibles of up to two hundred fifty thousand Dollars
($250,000) are acceptable.
 
(j)             Contractors and Subcontractors.
 
All contractors and subcontractors shall, to the extent not included in any
Borrower-controlled insurance program, prior to performing work for any Plant,
supply proper evidence of the types of insurance as set forth in their
respective contracts and will include, where applicable, Professional Liability
and Pollution Liability insurance. Such insurance supplied by the parties shall,
with the exception of workers compensation, where contractually able:
 
(i) 
add Borrowers, Administrative Agent, Collateral Agent and the other Senior
Secured Parties as additional insured;

 
(ii) 
be primary as respects insurance provided Borrowers, Administrative Agent,
Collateral Agent and the other Senior Secured Parties as additional insured;

 
(iii) 
waive rights of subrogation against Borrowers, Administrative Agent, Collateral
Agent and the other Senior Secured Parties as additional insured; and

 
(iv) 
continue in force until obligations of contractor and subcontractor are
fulfilled.

 
3.
OPERATING PERIOD INSURANCE

 
3.1.       Coverage. The following coverages shall be placed into effect for the
benefit of each Plant, including grain elevators at the earlier of the expiry of
the Builders Risk insurance policy for such Plant or the Commercial Operation
Date for such Plant and shall be maintained in effect at all times until the
Discharge Date.
 
(a) Commercial General Liability.
 
Commercial general liability insurance for such Plant , written on "occurrence"
policy forms, including coverage for premises/operations, products/completed
operations, broad form property damage, blanket contractual liability, and
personal injury, with no exclusions for explosion, collapse and underground
perils, and fire with primary coverage limits of no less than one million
Dollars ($1,000,000) per occurrence and two million Dollars ($2,000,000) in the
annual aggregate for injuries or death to one or more persons or damage to
property resulting from any one occurrence, and a products and completed
operations liability aggregate limit of not less than one million Dollars
($1,000,000). The commercial general liability policy shall also include a
severability of interest clause and a cross liability clause in the event more
than one entity is "named insured" under the liability policy. Deductibles in
excess of two hundred fifty thousand Dollars ($250,000) shall be subject to
review and reasonable approval by the Administrative Agent (in consultation with
the Insurance Consultant).

 
7.01(h)-6

--------------------------------------------------------------------------------

 

 
(b)            Automobile Liability.
 
Automobile liability insurance, including coverage for owned, non-owned and
hired automobiles for both bodily injury and property damage in accordance with
statutory legal requirements, with combined single limits of no less than one
million Dollars ($1,000,000) per accident with respect to bodily injury,
property damage or death. Automobile insurance shall include the Motor Carrier
Act Endorsement encompassing Hazardous Materials Cleanup (MCS­90), if
applicable.
 
(c)            Workers Compensation.
 
Workers compensation insurance to statutory limits and employer's liability with
a limit of not less than one million Dollars ($1,000,000) per occurrence and in
the aggregate such other forms of insurance required by law with respect to any
Plant or the Project, providing statutory benefits and covering loss resulting
from injury, sickness, disability or death of employees (if any) of any
Borrower. To the extent applicable, insurance shall cover Jones Act, Longshore
and Harbor Workers Act and Continental Shelf Land Act.
 
(d)           Property / Machinery Breakdown.
 
Prior to or at expiry date of the Builders Risk Policy and ensuring no gap in
coverage through the testing and commissioning period and not later than the
Commercial Operations Date for each Plant, property "all risk" insurance, as
such term is used in the common practice of the insurance industry on the date
of this Agreement, including machinery breakdown, the perils of flood and
earthquake, strike, vandalism and malicious mischief subject to terms that are
consistent with current industry practice insuring all real and personal
property of the Project at each Plant for an amount of not less than full
replacement cost of such Plant. Sub limits are permitted as respects to the
following perils:(i) debris removal (the greater of $5,000,000 or 25% of loss),
(ii) expediting or extra expense ($5,000,000), (iii) increased costs due to
orders by law and demolition costs of undamaged portion due to enforcement of by
law ($2,000,000), flood (25% of replacement cost) and earthquake (25% of
replacement cost) and (iv) such other coverages customarily sub-limited in
reasonable amounts consistent with current industry practice with respect to
similar risks and reasonably acceptable to the Administrative Agent (acting in
consultation with the Insurance Consultant).
 
Such policy shall include: (i) an automatic reinstatement of limits following
each loss (except for the perils of earthquake and flood) and (ii) a replacement
cost endorsement with no deduction for depreciation. Unless provided under the
all risk policy, boiler and machinery coverage (including consequence of design,
workmanship or material defect) on a "comprehensive" basis including breakdown
and repair on a replacement cost basis with limits not less than the full
replacement cost of the insured objects. In the event all risk property cover
and the boiler and machinery cover is not written in the same policy, each
policy shall contain a joint loss agreement.
 

 
7.01(h)-7

--------------------------------------------------------------------------------

 

All such policies may have deductibles of not greater than two hundred fifty
thousand Dollars ($250,000) and two percent (2%) of values at risk, five percent
(5%) for California Earthquake for natural hazard perils (such as flood and
earthquake).
 
(e)           Business Interruption.
 
Borrowers shall also maintain or caused to be maintained, with respect to each
Plant, business interruption insurance on all ''all risk" basis (as such term is
used in common practice of the insurance industry on the date of this
Agreement), including machinery breakage, in an amount necessary to satisfy
policy coinsurance conditions, but with limits not less than the equivalent of
twelve (12) months projected scheduled Debt Service, continuing expenses and an
amount equivalent to the principal payments necessary for the Borrowers to reach
the Target Balance Amount at the end of the twelve (12)-month period as
indicated in this Agreement or in other amounts reasonably acceptable to the
Administrative Agent (acting in consultation with the Insurance Consultant). The
deductible or waiting period shall not exceed thirty (30) days. Borrowers shall
also maintain or cause to be maintained contingent business interruption as
respects the suppliers and vendors in an amount of not less than six (6) months
projected scheduled Debt Service, continuing expenses and replacement ethanol
extra expense in amounts acceptable to the Lenders, where the exposure exists.
 
(f)            Umbrella or Excess.
 
Umbrella or excess liability insurance of not less than twenty million Dollars
($20,000,000) per occurrence and annual aggregate during operations. Such
coverages shall be on a per occurrence or claims made basis and over and above
coverage provided by the policies described in Sections 3.1(a), (b) and, with
respect to employer's liability, (c).of this Schedule 7.01(h), whose limits
shall apply toward the twenty million Dollars ($20,000,000) limit set forth in
this Section 3.1(f). If the policy or policies provided under this Section
3.1(f) contain(s) aggregate limits applying to other operations other than the
Project, and such limits are diminished below fifteen million Dollars
($15,000,000) by any incident, occurrence, claim, settlement or judgment against
such insurance that has caused the insurer to establish a reserve, Borrowers,
within five (5) Business Days after obtaining knowledge of such event shall
inform the Administrative Agent, and within thirty (30) Business Days after the
occurrence of such event shall purchase an additional umbrella/excess liability
insurance policy satisfying the requirements of this Section 3.1(f).
 
(g)            Aircraft Liability.
 
Aircraft liability, (to the extent exposure exists) in an amount not less than
ten million Dollars ($10,000,000) for all owned, non-owned and hired aircraft,
fixed wing or rotary, used in connection with the operation of the Project.
 
(h)            Pollution Legal Liability.
 
Including Onsite Cleanup and sudden and accidental pollution legal liability
insurance on a named perils basis with a limit commensurate (in the reasonable
opinion of the Insurance Consultant) with industry practice for like projects,
sufficient to meet contractual requirements but not less than three million
Dollars ($3,000,000). Such coverage can be included in the commercial general
liability and umbrella or excess liability covers or provided separately. Claims
made coverage forms and deductibles of up to two hundred fifty thousand Dollars
($250,000) are acceptable.

 
7.01(h)-8

--------------------------------------------------------------------------------

 

4.
LEASEHOLD INTEREST INSURE

 
Unless otherwise covered under the operational Property All Risk Insurance
described above or otherwise maintained by Pacific Ethanol, until the Discharge
Date, each Borrower shall also insure, or cause to be insured its leasehold
interests in the Leased Premises and provide Property Damage, Business
Interruption/Extra Expense and Liability insurance in amounts reasonably
satisfactory to the Administrative Agent (acting in consultation with the
Insurance Consultant).
 
5. 
DIRECTORS AND OFFICERS INSURANCE (to the extent exposure exists)

 
Until the Discharge Date, the Borrowers shall maintain, or cause to be
maintained, Directors and Officers Insurance (including Employment Practices
Liability) with limits in accordance with industry practice.
 
6.
GENERAL CONDITIONS APPLYING TO ALL INSURANCE

 
6.1.      The Borrowers shall promptly notify the Administrative Agent of any
loss in excess of two hundred fifty thousand Dollars ($250,000) covered by any
insurance maintained pursuant to Sections 2.1(f), (g) and (h) and Sections
3.1(e) and (f) of this Schedule 7.01(h).
 
6.2.       All policies of insurance required to be maintained pursuant to
Sections 2.1(f), (g) and (h) and 3.1(d) and (e) of this Schedule 7.01(h).  shall
provide that the proceeds of such policies shall be payable solely to the
Collateral Agent pursuant to a standard first mortgage endorsement substantially
equivalent to the Lenders Loss Payable Endorsement 438BFU or New York Standard
Mortgage Endorsement without contribution. All policies (where allowed by law)
shall insure the interests of the Senior Secured Parties regardless of any
breach or violation by any Borrower of warranties, declarations or conditions
contained in such policies, any action or inaction of any Borrower or any other
Person, or any foreclosure relating to any Plant or any change in ownership of
all or any portion of any Plant (the foregoing may he accomplished by the use of
the Lender Loss Payable Endorsement 438BFU required above).
 
6.3.      A loss under any insurance required to be carried under Sections
2.1(f), (g) and (h) and 3.1(d) and () of this Schedule 7.01(h), shall be
adjusted with the insurance companies, including the filing in a timely manner
of appropriate proceedings, by the Borrowers, together with the Administrative
Agent. In addition the Borrowers may, in their reasonable judgment, consent to
the settlement of any loss; provided that in the event that the amount of any
such loss exceeds two hundred fifty thousand Dollars ($250,000) the terms of
such settlement are concurred with by the Administrative Agent (acting in
consultation with the Insurance Consultant).
 
6.4.       All policies of insurance required to be maintained pursuant to this
Schedule 7.01(h) shall be endorsed so that if at any time any such policy should
be cancelled, or coverage under any such policy should be reduced, such
cancellation or reduction in coverage shall not be effective for thirty (30)
days following delivery of written notice thereof to the Administrative Agent,
except for cancellation or reduction in coverage due to non-payment of premium,
which shall not be for effective for ten (10) days following delivery of written
notice thereof to the Administrative Agent.

 
7.01(h)-9

--------------------------------------------------------------------------------

 

7.           REPORT
 
7.1.   On the initial Funding Date and annually thereafter, the Borrowers shall
furnish the Administrative Agent with a report of an independent insurance
broker, signed by an officer of such broker, stating that all premiums then due
have been paid and that, in the opinion of such broker, the insurance then
carried or to be renewed is in accordance with the terms of this Schedule 7.0104
In addition the Borrowers will advise the Administrative Agent in writing
promptly of any default in the payment of any premium and of any other act or
omission on the part of any Borrower that may invalidate or render
unenforceable, in whole or in part, any insurance being maintained by any
Borrower pursuant to this Schedule 7.01(h).
 
8.           "CLAIMS MADE" POLICIES FOR CERTAIN TYPES OF INSURANCE
 
8.1.   If any liability insurance required under the provisions of this Schedule
7.01(h) is allowed to be written on a "claims made" basis, then such insurance
shall include the following:
 
(a)           The retroactive date (as such term is specified in each of such
policies) shall be no later than the date on which construction is commenced or
the Commercial Operations Date for the relevant Plant (as applicable).
 
(b)            Each time any policy written on a "claims made" basis is not
renewed or the retroactive date of such policy is to be changed, the Borrowers
shall obtain or cause to be obtained for each such policy or policies the
broadest extended reporting period coverage, or "tail", reasonably available in
the commercial insurance market for each such policy or policies.
 
9.              UNAVAILABILITY OF INSURANCE
 
If any insurance (including the limits or deductibles thereof) hereby required
to be maintained is not reasonably available and commercially feasible in the
commercial insurance market, the Administrative Agent (acting in consultation
with the Insurance Consultant) shall not unreasonably withhold their agreement
to waive such requirement to the extent the maintenance thereof is not so
available; provided, however, that the Borrowers shall first request any such
waiver in writing to the Administrative Agent, which request shall be
accompanied by a written report prepared by an insurance broker of nationally
recognized standing, certifying that such insurance required is not reasonably
available and commercially feasible (and, in any case where the required amount
is not so available, certifying as to the maximum amount which is so available)
and explaining in detail the basis for such conclusions. If after reviewing such
evidence with the Insurance Consultant, the Administrative Agent concurs with
such report, the Borrowers shall not be required to maintain such insurance
until such time as such insurance is again available on commercially reasonable
terms. At any time after the granting of any such waiver, but not more often
than once a year, the Administrative Agent or the Lenders may request, and the
Borrowers shall furnish to the Administrative Agent within fifteen (15) days
after such request, supplemental reports reasonably acceptable to the
Administrative Agent from such independent insurance broker or the Insurance
Consultant updating their prior reports and reaffirming such conclusion. It is
understood that the failure of the Borrowers to timely furnish any such
supplemental report shall be conclusive evidence that such waiver is no longer
effective because such condition no longer exists, but that such failure is not
the only way to establish such non-existence. For the purposes of this Section
9.1, insurance will be considered "not reasonably available and commercially
feasible" when it is obtainable only at excessive costs that are not justified
in terms of the risk to be insured and is generally not being carried by or
applicable to projects or operations similar to the relevant Plant because of
such excessive costs.
 

 
7.01(h)-10

--------------------------------------------------------------------------------

 
 
 
10.
EROSION OF LIMIT

 
In the event that the insurance program evidenced for the benefit of any Plant
is being provided through an insurance policy that also insures other assets
owned by the Borrowers and the limits or sub limits are eroded or exhausted due
to a loss at another Plant or location the Borrowers will immediately cause
limits to be reinstated (where applicable) or replaced for the benefit of such
Plant.
 

 
7.01(h)-11

--------------------------------------------------------------------------------

 
 
 
Schedule 7.01(k) - A
to Credit Agreement
 
 
PERFORMANCE GUARANTEE
 
Anhydrous Undenatured Ethanol Production Specification
 
Anhydrous Fuel Ethanol Production Rate
Minimum 4,522.23 (Madera and Boardman)  or 6,783.34 (Stockton, Brawley and
Burley) US undenatured gallons per hour (average over the seven day test, see
below) based on a minimum feedstock specification of 56 lb/bushel test weight
corn containing a maximum of 14.5% moisture (by weight), a minimum of 72% dry
fermentable starch (by weight) and a maximum of 1% foreign material (by weight).
 
Undenatured ethanol will meet specifications per ASTM D4806-06c.

 
 
 
40MGY1
60MGY2
Unit
4,522.23
6,783.34
ugal/hr
24
24
hrs/day
108,533
162,800
ugal/day
351
351
days/yr
38,095,238
  57,142,857   ugal/yr
5.00%
5.00%
denaturant %
1,904,762
2,857,143
 denaturant/yr
40,000,000
60,000,000
dgal/yr
 
Notes
1.     Madera and Boardman plants
2.     Stockton, Burley and Brawley plants
   

 

 
Anhydrous
Fuel Ethanol Yield:
Minimum 2.68 gallons undenatured ethanol per bushel of corn feed based on a
minimum feedstock specification of 56 lb/bushel test weight No. 2 Yellow Dent
corn containing a maximum of 14.5% moisture (wgt), minimum 72% dry, trash-free
starch, maximum 1% (wgt) foreign material.

 
 
 
7.01(k)-A-1

--------------------------------------------------------------------------------

 
 
Utility Consumption Specification
 
Process Electrical
Consumption:
Maximum 0.80 kWh per gallon (average) of undenatured fuel ethanol produced when
operating at the nameplate capacity. This number includes process equipment
components in mash preparation, liquefaction and cook, yeast mix and
propagation, fermentation, distillation, dehydration and acid reduction,
evaporation, separation and stillage, process condensate, chemical storage, CO,
scrubbing, compressed air, closed seal water system, WDGS transfer and handling,
ethanol storage and loadout, cooling tower and chiller including cooling and
chilled water circulation, condensate return, process sumps, and heat tracing,
regenerative thermal oxidizer, cold lime water softening, boilers, and CO2
recovery equipment installed at PLANT (minor equipment related only to transfer
of CO2). The indicated consumption does not include grain receiving, . grain
storage, grain milling, CO2 processing, CO2 pressurizing, or CO2 liquification.
. This guarantee is based on the use of extra high efficiency motors in all
applications and 4160 volt motors for applications over 200 HP.
Process Natural Gas
Consumption:
Maximum 27,059 actual natural gas BTUs per gallon (average) of undenatured fuel
ethanol produced (as calculated in Section 2.5 of Schedule 7.01(k)-B to the
Credit Agreement). This number includes the natural gas to all process
components except grain receiving, grain storage and grain milling.
 
 

 
 
 
7.01(k)-A-2

--------------------------------------------------------------------------------

 
 
Schedule 7.01(k) - B
to Credit Agreement
 
APPROVED PERFORMANCE TEST PROTOCOLS

1.          Performance Test Protocols

1.1       Pre-Test Preparation

1.1.1 - Before commencement of PERFORMANCE TEST, OWNER shall notify INDEPENDENT
ENGINEER in writing at least seven (7) days prior to planned commencement of the
PERFORMANCE TEST that all pre-test conditions have been satisfied, including the
following:

 
 
·
Adequate and competent supervision, personnel and resources for effective
operation, maintenance and performance analysis of the PLANT, including
laboratory analysis, temporary meters or other measuring devices and
instrumentation specified as to accuracy and reproducibility by OWNER in advance
of the PERFORMANCE TEST required to conduct and evaluate the PERFORMANCE TEST
shall have been furnished. The PLANT shall be operated and maintained in
accordance with the technical advice and instruction from the Operations Manual
and otherwise within generally accepted practices within the fuel ethanol
industry.

 
 
·
The PLANT, its machinery, equipment, instrumentation and piping, shall all be
clean lubricated where appropriate, leak tight, and ready to operate according
to design specifications. All systems and appropriate checkouts and calibrations
shall have been completed and documented by responsible PLANT technicians,
contractors, and/or vendors. Analytical and any special test equipment and
reagents will have been calibrated and made accurate.

 
 
·
Cleaning (CIP) of the process equipment has been accomplished seven (7) days or
less before the PERFORMANCE TEST and standard procedures set out in the
Operations Manual. All ingredients and supplies required to complete the test
are on hand. This includes, but is not limited to, feedstock of corn (meeting
specifications listed in Annex A, Section 1.2.1) supplied in stable quantities
sufficient to support PLANT operation at a rate up to 125% of the design-basis
fuel ethanol production rate, as well as sufficient steam and other utilities,
enzymes, chemicals, and other ingredients of the type specified by in the
Operations Manual and supplies to support PLANT operation at a rate up to 125%
of the design-basis fuel ethanol production rate.

 
 
·
Adequate operation, analytical, and maintenance support shall be scheduled for
the test period.

 

 
 
7.01(k)-B-1

--------------------------------------------------------------------------------

 

1.2       Coordination
 

1.2.1 -  OWNER shall coordinate, direct and supervise the Performance Test
during the 24 hour/day seven day PERFORMANCE TEST period.

1.2.2 - OWNER shall supply, or cause to be supplied, all feedstock, utilities
and other supplies and services required to conduct the PERFORMANCE TEST, as
specified under Section 1.1.1 above, throughout the entire PLANT during all
PERFORMANCE TESTS.
 
1.3        Conducting the Test

1.3.1 - At the scheduled start time of the PERFORMANCE TEST, the OWNER will
signal that the test has formally begun and will direct operators to take the
initial test measurements. The test will be conducted over a seven-day (168
hour) period of operation. OWNER'S personnel shall operate the PLANT in
compliance with manufacturers' recommendations, the Operations Manual,
including, without limitation, adjustments in temperatures, pressures, feedstock
rates, steam flow, and other process control inputs, provided these adjustments
do not result in unsafe operating conditions. PLANT operators will monitor and
record operating data according to standard procedures and in addition will
record the supplemental data specified in this protocol on data sheets. Records
will be developed from permanent plant equipment that is calibrated immediately
prior to test. If the Performance Guarantees have been met, then OWNER shall,
within five (5) days of completion of the PERFORMANCE TESTS, issue a notice to
the INDEPENDENT ENGINEER to such effect. OWNER will also provide the air
emissions test data to INDEPENDENT ENGINEER as quickly as possible. If the
PERFORMANCE TESTS have not been met, then OWNER shall issue a written notice to
the INDEPENDENT ENGINEER within five (5) days of completion of the PERFORMANCE
TESTS indicating in what manner such PERFORMANCE TESTS have not been
successfully completed.

1.3.2 - If the 168-hour test period is interrupted for any reason within the
OWNER'S control, a new 168-hour test period will resume after the cause for the
interruption has been corrected and the PLANT has achieved an acceptable
operating capacity at substantially the same rate immediately prior to the
interruption. If the 168-hour test period is interrupted for any reason outside
of the OWNER'S control, such as any earthquake, fire, flood, hurricane, storm,
tornado or other act of God, war (declared or not), terrorism, hostilities,
blockade, revolution, strike (of a general or national nature), insurrection,
riot, disruption of service by the electric energy supplier and/or disruption of
service by natural gas supplier, the seven-day test period will resume after the
cause for the interruption has been corrected and the PLANT has achieved an
acceptable operating capacity at substantially the same rate immediately prior
to the interruption. If it becomes obvious that the PERFORMANCE TEST cannot be
carried out to a satisfactory conclusion in the current attempt, OWNER shall
stop the PERFORMANCE TEST if it becomes obvious that it cannot be carried to a
satisfactory conclusion in the current attempt.

1.3.3 - OWNER shall conduct the PERFORMANCE TEST described herein in such a
manner so that at all times during such PERFORMANCE TEST the PLANT is operating
in compliance with its air permits.

 
7.01(k)-B-2

--------------------------------------------------------------------------------

 

1.3.4 - The PERFORMANCE TEST is to be run with a normal complement of PLANT
employees and under normal operating conditions with essential equipment in
automatic control. No automatic controls or safety protections may be
temporarily bypassed nor may any temporary equipment or procedures be used
during the PERFORMANCE TEST. Permanently installed plant instruments are to be
utilized as applicable for performance testing and data is to be accessed
through the DCS. Instruments are to be calibrated by OWNER.
 
2.          Analytical/Calculation Protocols
 
2.1        Undenatured Fuel Ethanol Quality
 
METHOD:
Analyze samples according to OWNER provided procedures. The last test result
before emptying day tank into main storage tank shall determine the quality for
the batch. The average of all batch test results over the test period shall be
used in determining the quality for the PERFORMANCE TEST.
 
If the fuel ethanol in the day tank does not meet the quality specifications of
Annex A, Section 1.2.1, OWNER has the discretion to send it on to the main
storage tank on the theory that the blended product in the main storage tank
will meet the quality specifications. The average of all batch test results
shall be used to establish the blended quality. If the blended fuel ethanol does
not meet quality specifications as a result of below quality product measured in
one or more day tank batches the volume of the batch(s) shall not be included in
ethanol production "rate" quantities used in calculating liquidated damages.

 
 
 
SAMPLE POINT:
Undenatured Fuel Ethanol Day Tank Storage
SAMPLE SIZE:
250 mls.
SAMPLE CONTAINER:
Nalgene
FREQUENCY:
Once per three (3) hours
SAMPLES RETAINED:
All
PREPARATION:
Standardize test reagents. Clean glassware and sample containers. Assure that
reagents are of sufficient quality.
DOCUMENTATION:
Log results on a PERFORMANCE TEST Data Sheet (Annex B).

 
2.2        Undenatured Fuel Ethanol Production Rate
 
 
7.01(k)-B-3

--------------------------------------------------------------------------------

 

METHOD:
The day tank will be manually measured every three (3) hours to serve as the
principal method of measurement of production volume, along with a final
measurement of the day tank before, the contents are sent to the main storage
tank(s). In addition, flow totalizer readings will be taken from product meter
or other measuring device by OWNER at regular intervals as backup verification
of the manual measurements. The total volume from the test meters will be
adjusted to a volume equivalent 99.50wt% ethanol at 60°F. Divide by the total
number of test hours to determine the average rate over the test period.

 
 

SAMPLE POINT: Product volumetric totalizing meter (with computer monitoring)
after Product Receiver.
SAMPLE SIZE:
N/A
SAMPLE CONTAINER:
N/A
FREQUENCY:
Once per three (3) hours and at the end of each Day Tank batch.
SAMPLES RETAINED:
N/A
PREPARATION:
Certify that the flow meter is properly calibrated.
DOCUMENTATION:
Log results on a PERFORMANCE TEST Data Sheet (Annex B).

 
2.3        Undenatured Fuel Ethanol Yield
 
BASIS:
56 lb. per bushel corn containing 14.5% moisture and 72% dry fermentable starch
and a maximum of I% foreign material (by weight).

 
METHOD: 
Record Bliss rotary valve readings to measure the accumulated meal weight.
Measure the sample moisture. Convert total undenatured ethanol volume from the
Rate Test to weight at 60°F. Divide the calculated mass quantity of undenatured
ethanol by the calculated corn mass quantity of total starch fed over the time
period to determine yield. In addition, this Bliss rotary valve total should be
cross checked by totaling all corn receipts and taking into account the current
corn bin volumes. Starch content will be tested at the Front Range Energy, LLC
ethanol production facility and one sample will be taken every twelve hours.

 
 
TEST POINT:
Bliss rotary valve
FREQUENCY:
Once per three (3) hours (weight, moisture), Once per twelve (12) hours (starch
content)

 
7.01(k)-B-4

--------------------------------------------------------------------------------

 
 
PREPARATION:
Certify that the Bliss rotary valve is properly calibrated
DOCUMENTATION:
Log results on "PERFORMANCE. TEST Data Sheet" (Annex B)

 
2.4        Process Electrical Consumption
 
 METHOD:
Record electric meter readings at beginning of test and at the required
frequency thereafter. Divide total kWh for test period by total volume of
undenatured ethanol produced to determine average kWh per gallon. Average
results of all calculations for test periods to determine the process electrical
power consumption value for PERFORMANCE TEST.

 
TEST POINT:
Electric power meter types and locations as established by OWNER, and as
necessary to isolate process consumption. Note that electricity consumption from
grain receiving, grain storage, and grain milling will not be included in PLANT
electricity consumption. Electricity consumption from the boilers, regenerative
thermal oxidizer, and cold lime water softening system will be included in PLANT
usage, and the calculations for such usage will be reported isolated and removed
for ethanol plant kWh usage, though both the total and net readings will be
provided.
   
FREQUENCY:
Once per three (3) hours
PREPARATION:
Isolate process electrical consumption activities during test period.
DOCUMENTATION:
Log results on a PERFORMANCE TEST Data Sheet (Annex B)

 
2.5        Process Natural Gas Consumption
 
 
METHOD: Record natural gas flowrate from the flowmeter to the Process
consumption points. Divide the natural gas/hr value by the average gal/hr
undenatured ethanol produced during the test period to determine mmbtu of
natural gas per gallon of undenatured ethanol production. Average results of all
calculations for test period to determine natural gas consumption value for
PERFORMANCE TEST.

 

 
7.01(k)-B-5

--------------------------------------------------------------------------------

 
 
 
TEST POINT:
Natural gas supply flow meter(s) and locations as established by OWNER, and as
necessary to isolate process consumption.
   
FREQUENCY:
Once per three (3) hours
   
PREPARATION:
Certify natural gas flowmeter, and any other measuring devices are properly
calibrated and suspend all non- process use of natural gas. Note that grain
receiving, grain storage and grain milling will be isolated and removed for
ethanol plant natural gas usage. Total plant usage and usage net of regenerative
thermal oxidizer will be measured. If necessary, an mmbtu/cubic foot correction
may be made.
   
DOCUMENTATION:
Log results on a "Performance Test Data Sheet" (Annex B)
   

 
 
2.6        CALCULATION PROTOCOL
 
All calculations will be based on actual measured data taken during the test
period. For any given sample period, the average value during that period will
be determined by the average of the measured data points
 
 
 
 
 
 

 
 
7.01(k)-B-6

--------------------------------------------------------------------------------

 

 
Annex A
to Approved Performance
Test Protocols
 
 
Specifications
 
1.2.1     Anhydrous Undenatured Ethanol Production Specification
 
Anhydrous Undenatured Ethanol Production Specification
 
Anhydrous Fuel Ethanol Production Rate
Minimum 4,522.23 (Madera and Boardman)  or 6,783.34 (Stockton, Brawley and
Burley) US undenatured gallons per hour (average over the seven day test, see
below) based on a minimum feedstock specification of 56 lb/bushel test weight
corn containing a maximum of 14.5% moisture (by weight), a minimum of 72% dry
fermentable starch (by weight) and a maximum of 1% foreign material (by weight).
 
Undenatured ethanol will meet specifications per ASTM D4806-06c.

 
 
 
40MGY1
60MGY2
Unit
4,522.23
6,783.34
ugal/hr
24
24
hrs/day
108,533
162,800
ugal/day
351
351
days/yr
38,095,238
  57,142,857   ugal/yr
5.00%
5.00%
denaturant %
1,904,762
2,857,143
 denaturant/yr
40,000,000
60,000,000
dgal/yr
 
Notes
1.     Madera and Boardman plants
2.     Stockton, Burley and Brawley plants
   

 

 
Anhydrous
Fuel Ethanol Yield:
Minimum 2.68 gallons undenatured ethanol per bushel of corn feed based on a
minimum feedstock specification of 56 lb/bushel test weight No. 2 Yellow Dent
corn containing a maximum of 14.5% moisture (wgt), minimum 72% dry, trash-free
starch, maximum 1% (wgt) foreign material.

 
 

 
 

 
7.01(k)-B-7

--------------------------------------------------------------------------------

 

1.2.2     Utility Consumption Specification
 
Process Electrical Consumption:
 
Maximum 0.80 kWh per gallon (average) of undenatured fuel ethanol produced when
operating at the nameplate capacity. This number includes process equipment
components in mash preparation, liquefaction and cook,
Yeast mix and propagation,   fermentation, distillation, dehydration and acid
reduction, evaporation, separation and stillage, processcondensate, chemical
storage, CO2scrubbing, compressed air, closed seal water system, WDGS transfer
and handling, ethanol storage and loadout, cooling tower and chiller including
cooling and chilled water circulation, condensate return, process sumps, and
heat tracing, regenerative thermal oxidizer, cold lime water softening, boilers,
and CO2 recovery equipment installed at PLANT (minor equipment related only to
transfer of CO2). The indicated consumption does not include grain receiving,
grain storage, grain milling, CO2 processing, CO2 pressurizing, or CO2
liquification. . This guarantee is based on the use of extra high efficiency
motors in all applications and 4160 volt motors for applications over 200 HP.

 
 
Process Natural Gas Consumption:
Maximum 27,059 actual natural gasBTUs per gallon (average) of undenatured fuel
ethanol produced (as calculated in Section 2.5 of the Approved Performance Test
Protocols). This number includes the natural gas to all process components
except grain receiving, grain storage and grain milling.

 
 
7.01(k)-B-8

--------------------------------------------------------------------------------

 

Annex B

to Approved Performance
Test Protocols
Friday, 2/16/07

0600
                 
0900
                 
1200
                 
1500
                 
1800
                 
1200
                 

 

 
7.01(k)-B-9

--------------------------------------------------------------------------------

 

Annex C
to Approved Performance

Test Protocols
 
Additional Measurements
 
Water Consumption (once per day)
Syrup production (once per day)
Beginning inventory of WDG
Ending inventory of WDG
Amount of WDG shipped (per weight certificates) during testing period
Beginning corn inventory (by silo)
Ending corn inventory (by silo)
Beginning ethanol inventory (by tank)
Ending ethanol inventory (by tank)
Denatured ethanol (once per day)
 

 

 
7.01(k)-B-10

--------------------------------------------------------------------------------

 

Annex D

to Approved Performance

 
Test Protocols
 
Additional Deliverables to Independent Engineer
Air emissions test protocol (NRG coordinating Avogadro labs running tests)
Copy of letter to State of California (or appropriate Agency thereof) notifying
of emissions test Details of 2/8/07 shutdown (CIP, etc)
Details of testing equipment calibration
List of personnel running and overseeing plant, roles
Corn starch sample 2x per day, send to FRE
Send FRE corn starch sampling SOP
Adjust financial model for non-scope elec, nat gas, if necessary
Elec consumption readings on CLS, RTO — adjust .77 kWh up in financial model,
guarantee
 

 
7.01(k)-B-11

--------------------------------------------------------------------------------

 

SCHEDULE 7.02(f)
to Credit Agreement
 
STORAGE FACILITIES
 
Madera Grain Mill
 
The grain mill and associated storage facilities at the Madera Site, consisting
of three grain rolling mills, each capable of producing approximately 35 tons
per hour of rolled grain, eight associated silos, three interstices (spaces
between the silos) with a combined storage capacity of approximately 50,000 tons
of grain, and several outbuildings at the Madera Site, including a large pole
barn for transloading of commodities that are deemed part of the grain milling
operations.
 
Proposed Stockton Ethanol Tank Farm
 
PECA plans to construct a tank farm at or adjacent to the Stockton Site at the
Port of Stockton. The five million gallon tank farm is expected to have
associated rail and truck unloading facilities capable of unloading a unit train
of ethanol. A portion of the Stockton Plant's output is expected to be pipelined
directly to the tank farm.
 
Proposed Burley Grain Milling Facilities
 
PECA may construct grain storage and grain milling facilities adjacent to the
Burley Site. Any such facilities would be in excess of that required for normal
operation of the Burley Plant. PECA may also construct facilities to mix the
distillers grains from the Burley Plant with rolled or ground grain from the
proposed grain mill.
 
 
 
7.02(f)-1

--------------------------------------------------------------------------------

 
Schedule 7.02(t)
to Credit Agreement
 
CONSTRUCTION BUDGETS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
7.02(t)-1

--------------------------------------------------------------------------------

 
 
Pacific Ethanol Columbia, LLC (Boardman, Oregon)
Summary Construction and Project Cost Budget
 
Construction Costs:
     
Engineering / Procurement / Land & Sitework
  $ 6,555,948  
Site Utilities I Buildings / Other Improvements
    4,645,616  
Grain Systems & Rail Infrastruacture
    6,088,000  
Concrete Earthwork / Foundations
    5,560,215  
Structural Steel I Piping Materials
    7,759,049  
Pipe Installation / Valves
    6,660,880  
Equipment & Installation
    8,798,917  
Field & Shop Fabricated Tanks
    8,938,947  
Evaporators / Véssels / Columns
    5,125,286  
Electrical / Control Systems / Instrumentation
    4,627,370  
Final Product Handling / Fire Safety / Other
    7,303,500  
Total construction cost
    72,063,728            
Inventory:
       
Corn
    2,915,400  
Ethanol
    880,116  
WDGs
    72,561  
Denaturant
    149,451  
Chemicals/enzymes/yeast
    241,709  
Spare parts
    550,000  
Total inventory
    4,809,237            
Financing:
       
Capitalized interest
    310,000  
Capitalized fees
    2,125,000  
Debt service reserve account
    1,679,000  
Interest income offset
    -   
Total financing
    4,114,000            
Other Capital Costs:
       
Other working capital (AIR - NP)
    1,329,574  
Operating expenses
    1,744,401  
Contingency
    7,892,440  
Total other capital costs
    10,966,415            
Total Project Cost
  $ 91,953,380  

 
 
 
7.02(t)-2

--------------------------------------------------------------------------------

 
 
Pacific Ethanol Imperial, LW (Brawley, California)
Summary Construction and Project Cost Budget
 
Construction Costs:
     
Engineering / Procurement / Land & Sitework
  $ 12,124,440  
Site Utilities I Buildings / Other Improvements
    11,820,000  
Grain Systems & Rail Infrastruacture
    6,000,000  
Concrete Earthwork / Foundations
    6,650,000  
Structural Steel I Piping Materials
    10,000,000  
Pipe Installation / Valves
    9,750,000  
Equipment & Installation
    14,529,000  
Field & Shop Fabricated Tanks
    10,520,000  
Evaporators / Vessels / Columns
    7,425,000  
Electrical / Control Systems / Instrumentation
    8,150,000  
Final Product Handling I Fire Safety / Other
    7,707,000  
Total construction cost
    104,675,440            
Inventory:
       
Corn
    2,942,552  
Ethanol
    1,329,592  
WDGs
    109,385  
Denaturant
    224,176  
Chemicals/enzymes/yeast
    241,709  
Spare parts
    650,000  
Total inventory
    5,497,414            
Financing:
       
Capitalized interest
    2,399,900  
Capitalized fees
    2,655,000  
Debt service reserve account
    2,002,500  
Interest income offset
       
Total financing
    7,057,400            
Other Capital Costs:
       
Other working capital (A/R - A/P)
    1,770,872  
Operating expenses
    2,402,994  
Contingency
    11,836,804  
Total other capital costs
    16,010,671  
Total Project Cost
  $ 133,240,925  

 
 
 
7.02(t)-3

--------------------------------------------------------------------------------

 
Pacific Ethanol Magic Valley, LLC (Burley, Idaho)
Summary Construction and Project Cost Budget
 
Construction Costs:
     
Engineering / Procurement I Land & Sitework
  $ 9,382,440  
Site Utilities / Buildings / Other Improvements
    8,920,000  
Grain Systems & Rail Infrastruacture
    8,700,000  
Concrete Earthwork / Foundations
    6,650,000  
Structural Steel / Piping Materials
    10,200,000  
Pipe Installation / Valves
    9,750,000  
Equipment & Installation
    10,829,000  
Field & Shop Fabricated Tanks
    10,520,000  
Evaporators / Vessels / Columns
    7,425,000  
Electrical / Control Systems / Instrumentation
    8,150,000  
Final Product Handling / Fire Safety / Other
    7,907,000  
Total construction cost
    98,433,440            
Inventory:
       
Corn
    2,831,994  
Ethanol
    1,299,618  
WDGs
    99,554  
Denaturant
    228,659  
Chemicals/enzymes/yeast
    244,126  
Spare parts
    650,000  
Total inventory
    5,353,951            
Financing:
       
Capitalized interest
    1,539,083  
Capitalized fees
    2,815,000  
Debt service reserve account
    2,002,500  
Interest income offset
       
Total financing
    6,356,583            
Other Capital Costs:
       
Other working capital (A/R - NP)
    1,940,409  
Operating expenses
    1,793,384  
Contingency
    11,158,702  
Total other capital costs
    14,892,494            
Total Project Cost
  $ 125 036,469  

 

7.02(t)-4

--------------------------------------------------------------------------------

 
Pacific Ethanol Stockton, LLC (Stockton, California) Summary Construction and
Project Cost Budget
 
Construction Costs:
     
Engineering I Procurement / Land & Sitework
  $ 14,252,440  
Site Utilities / Buildings / Other Improvements
    9,520,000  
Grain Systems & Rail Infrastruacture
    12,150,000  
Concrete Earthwork / Foundations
    6,650,000  
Structural Steel / Piping Materials
    10,200,000  
Pipe Installation / Valves
    9,750,000  
Equipment & Installation
    10,829,000  
Field & Shop Fabricated Tanks
    10,520,000  
Evaporators / Vessels / Columns
    7,425,000  
Electrical / Control Systems / Instrumentation
    8,150,000  
Final Product Handling / Fire Safety / Other
    7,307,000  
Total construction cost
    106,753,440            
Inventory:
       
Corn
    3,019,093  
Ethanol
    1,322,641  
WDGs
    116,689  
Denaturant
    224,176  
Chemicals/enzymes/yeast
    241,709  
Spare parts
    650,000  
Total inventory
    5,574,308            
Financing:
       
Capitalized interest
    1,927,233  
Capitalized fees
    2,655,000  
Debt service reserve account
    2,002,500  
Interest income offset
    -   
Total financing
    6,584,733            
Other Capital Costs:
       
Other working capital (A/R - NP)
    1,755,365  
Operating expenses
    2,481,126  
Contingency
    12,053,548  
Total other capital costs
    16,290,039            
Total Project Cost
  $ 135,202,520  

 

 
7.02(t)-5

--------------------------------------------------------------------------------

 
 
Schedule 8.08(c)(xiii)
to the Credit Agreement
 
Target Balance Amounts
 
On the Conversion Date, the Target Balance Amount shall be an amount equal to
the aggregate principal amount of Term Loans disbursed on the Conversion Date
and, on each Quarterly Payment Date after the Conversion Date, the Target
Balance Amount shall be reduced by an amount equal to one twentieth (1/20) of
the aggregate principal amount of the Term Loans disbursed on the Conversion
Date.
 
If an Event of Total Loss with respect to any Plant or an Event of Taking with
respect to all or substantially all of any Plant or a sale, transfer or other
disposition with respect to all or substantially all of any Plant occurs, then
the Target Balance Amount for each Quarterly Payment Date will be reduced by an
amount equal to a ratio equal to the number of Plants affected by such
occurrence to the number of Plants with respect to which a Funding has been
made.
 
 
 
 
 
 
8.08(c)(xiii)-1

--------------------------------------------------------------------------------

 
 
SCHEDULE 11.12
to Credit Agreement
 
 
NOTICE INFORMATION
I. 
BORROWERS
 
PACIFIC ETHANOL HOLDING CO. LLC
 c/o Pacific Ethanol, Inc.
5711 N. West Avenue Fresno, California 93711
Attn: Jeff Manternach
Telephone: (559) 435-1771
Facsimile: (559) 435-1478
 
with a copy to:
 
Pacific Ethanol Holding Co. LLC
c/o Pacific Ethanol, Inc.
400 Capital Mall, Suite 2060
Sacramento, CA 95814
Attn: General Counsel
Telephone: (916) 403-2130
Facsimile: (916) 446-3937
 
PACIFIC ETHANOL MADERA LLC
c/o Pacific Ethanol, Inc.
5711 N. West Avenue
Fresno, California 9371 1
Attn: Jeff Manternach
Telephone: (559) 435-1771
Facsimile: (559) 435-1478
 
with a copy to:
 
Pacific Ethanol Madera LLC
c/o Pacific Ethanol, Inc.
400 Capital Mall, Suite 2060
Sacramento, CA 95814
Attn: General Counsel
Telephone: (916) 403-2130
Facsimile: (916) 446-3937

 
 
11.12-1

--------------------------------------------------------------------------------

 
 
I. 
PACIFIC ETHANOL COLUMBIA, LLC
c/o Pacific Ethanol, Inc.
5711 N. West Avenue
Fresno, California 93711
Attn: Jeff Manternach
Telephone: (559) 435-1771
Facsimile: (559) 435-1478
 
with a copy to:
 
Pacific Ethanol Columbia, LLC
c/o Pacific Ethanol, Inc.
400 Capital Mall, Suite 2060
Sacramento, CA 95814
Attn: General Counsel
Telephone: (916) 403-2130
Facsimile: (916) 446-3937
 
PACIFIC ETHANOL STOCKTON, LLC
c/o Pacific Ethanol, Inc.
5711 N. West Avenue
Fresno, California 93711
Attn: Jeff Manternach
Telephone: (559) 435-1771
Facsimile: (559) 435-1478
 
with a copy to:
 
Pacific Ethanol Stockton, LL
c/o Pacific Ethanol, Inc.
400 Capital Mall, Suite 2060
Sacramento, CA 95814
Attn: General Counsel
Telephone: (916) 403-2130
Facsimile: (916) 446-3937

 
 
11.12-2

--------------------------------------------------------------------------------

 
I. 
PACIFIC ETHANOL IMPERIAL, LLC
c/o Pacific Ethanol, Inc. 5711 N. West Avenue
Fresno, California 93711
Attn: Jeff Manternach
Telephone: (559) 435-1771
Facsimile: (559) 435-1478
 
with a copy to:
 
Pacific Ethanol Imperial, LLC
c/o Pacific Ethanol, Inc.
400 Capital Mall, Suite 2060
Sacramento, CA 95814
Attn: General Counsel
Telephone: (916) 403-2130
Facsimile: (916) 446-3937
 
PACIFIC ETHANOL MAGIC VALLEY, LLC
c/o Pacific Ethanol, Inc.
5711 N. West Avenue
Fresno, California 93711
Attn: Jeff Manternach
Telephone: (559) 435-1771
Facsimile: (559) 435-1478
 
with a copy to:
 
Pacific Ethanol Magic Valley, LL
 c/o Pacific Ethanol, Inc.
400 Capital Mall, Suite 2060
Sacramento, CA 95814
Attn: General Counsel
Telephone: (916) 403-2130
Facsimile: (916) 446-3937

 
 
 
11.12-3

--------------------------------------------------------------------------------

 
 
II. 
BORROWERS' AGENT
 
PACIFIC ETHANOL HOLDING CO. LLC
400 Capitol Mall, Suite 2060
Sacramento, CA 95814
Attention: General Counsel
Telephone: (559) 435-1771
Facsimile: (559) 435-1478

 
 
 
III. 
ADMINISTRATIVE AGENT, LEAD ARRANGER AND SOLE BOOKRUNNER
 
WESTLB AG, NEW YORK BRANCH
1211 Avenue of the Americas
New York, NY 10036
Attention: Yolette Salnave / Andrea Bailey
Phone: 212-852-5994 / 212-597-1158
Facsimile: 212-302-7946
E-mail Address: NYC_Agency_Services@WestLB.com

 
 
IV. 
COLLATERAL AGENT
 
WESTLB AG, NEW YORK BRANCH
1211 Avenue of the Americas,
New York, New York 10036
Attention: Richard Garbarino
Telephone: 212 852-5994
Facsimile: (212) 597-1490

 
 
V. 
ACCOUNTS BANK
 
UNION BANK OF CALIFORNIA, N.A.
Power & Utilities Group
445 S. Figueroa Street, 15th Floor
Los Angeles, CA 90071
 
 
Attention: Jesus Serrano, VP
Telephone: (213) 236-4194
Facsimile: (213) 236-4096

 
 
 
11.12-4

--------------------------------------------------------------------------------

 
 
Attention: Susan Johnson, VP
Telephone: (213) 236-4125
Facsimile: (213) 236-409

 
 
VI. 
LEAD ARRANGERS AND CO-SYNDICATION AGENTS
 
MIZUHO CORPORATE BANK, LTD
1251 Ave. of the Americas
New York, NY 10020
 
CIT CAPITAL SECURTIES LLC
c/o CIT ENERGY
505 Fifth Avenue, 10th Floor
New York, NY 10017
Attn: Thomas Scifo, Assistant Vice President
Telephone: 212-771-1756
Facsimile: 212-771-9675

 
 
 
VII. 
LEAD ARRANGERS AND CO-DOCUMENTATION AGENTS
 
COOOPERATIVE CENTRALE RAIFFEISEN­BOERENLEENBANK BA., "RABOBANK NEDERLAND", NEW
YORK BRACH
U.S. Counsel
245 Park Avenue
New York, NY 10167
Attn: Andrew Sherman
Telephone: 212-808-2513
Facsimile: 212-916-7880
 
with a copy to:
 
Executive Director
123 North Wacker Drive, Ste. 2100 Chicago, IL 60606
Attn: Brad Peterson
Telephone: 312-408-8222
Facsimile: 312-408-8240

 
 
11.12-5

--------------------------------------------------------------------------------

 
 
BANCO SANTANDER CENTRAL HISPANO S.A., NEW YORK BRANCH
45 East 53rd Street
New York, NY 1022
Attn: Felipe Gonzalez
Telephone: 212-407-0997
Facsimile: 212-350-0740

 
 
IX.
INTEREST RATE PROTECTION PROVIDER
 
WESTLB AG, NEW YORK BRANCH
1211 Avenue of the Americas New York, NY 10036
Attention: Lawrence Vassallo Phone: 212-597-8500
Facsimile: 212-597-3977
E-mail Address: lawrence_vassallo@westlb.com

 
 
 
 
 
 
 
 
 
 
 
 
 
 
11.12-6

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