Exhibit
      10.2


     

     

    Sponsor
      Support Agreement

     

     

    among

     

     

    PACIFIC
      ETHANOL HOLDING CO. LLC,

    as
      the
      Borrowers' Agent,

     

     

    PACIFIC
      ETHANOL, INC.,

    as
      the
      Sponsor, 

     

     

    and

     

     

    WESTLB
      AG, NEW YORK BRACH

    as
      the
      Administrative Agent

     

     

    Dated
      as of February 27, 2007

     

     

     

    
      
        
           

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
           

        

      

    



    TABLE
      OF CONTENTS

    
 

    
      
        	 	Page
	 	 
	ARTICLE
                I              
                DEFINITIONS
                AND INTERPRETATION	2
	 	 	 
	
                Section
                  1.01.

              	
                Definitions

              	
                2

              
	
                Section
                  1.02.

              	
                Credit
                  Agreement Definitions

              	
                5

              
	
                Section
                  1.03.

              	
                Rules
                  of Interpretation

              	
                5

              
	
                Section
                  1.04.

              	
                Release

              	
                5

              
	 	 	 
	
                ARTICLE
                  II            
                   PROJECT
                  COMPLETION DEFICIENCY

              	
                6

              
	 	 	 
	
                Section
                  2.01.

              	
                Sponsor's
                  Completion Undertaking

              	
                6

              
	
                Section
                  2.02.

              	
                Action
                  to be Taken by the Borrowers

              	
                6

              
	
                Section
                  2.03.

              	
                Deficiency
                  Notices

              	
                6

              
	
                Section
                  2.04.

              	
                Sponsor's
                  Deficiency Funding Obligation

              	
                7

              
	
                Section
                  2.05.

              	
                No
                  Obligation of the Administrative Agent

              	
                8

              
	
                Section
                  2.06.

              	
                Termination
                  of Sponsor's Funding Obligations

              	
                8

              
	 	 	 
	
                ARTICLE
                  III           
                  WARRANTY
                  OBLIGATIONS

              	
                8

              
	 	 	 
	
                Section
                  3.01.

              	
                Sponsor's
                  Warranty Undertaking

              	
                8

              
	
                Section
                  3.02.

              	
                Action
                  to be Taken by the Borrowers

              	
                9

              
	
                Section
                  3.03.

              	
                Warranty
                  Notices

              	
                9

              
	
                Section
                  3.04.

              	
                Sponsor's
                  Warranty Performance Obligations

              	
                10

              
	
                Section
                  3.05.

              	
                Sponsor's
                  Warranty Funding Obligations

              	
                10

              
	
                Section
                  3.06.

              	
                Independent
                  Obligations

              	
                11

              
	
                Section
                  3.07.

              	
                No
                  Obligation of the Administrative Agent

              	
                11

              
	
                Section
                  3.08.

              	
                Termination
                  of Sponsor's Warranty Obligations; Cap

              	
                11

              
	 	 	 
	
                ARTICLE
                  IV           
                   PROVISIONS
                  APPLICABLE TO ALL FUNDINGS

              	
                11

              
	 	 	 
	
                Section
                  4.01.

              	
                Acceleration
                  of Senior Debt Obligations

              	
                11

              
	
                Section
                  4.02.

              	
                Adjustments
                  to Warranty Funding Cap and Sponsor Funding Cap

              	
                12

              
	 	 	 
	
                ARTICLE
                  V             
                  REPRESENTATIONS,
                  WARRANTIES AND COVENANTS

              	
                13

              
	 	 	 
	
                Section
                  5.01.

              	
                Sponsor's
                  Representations and Warranties

              	
                13

              
	
                Section
                  5.02.

              	
                Survival
                  and Administrative Agent Reliance

              	
                14

              
	
                Section
                  5.03.

              	
                Rights
                  and Remedies not Limited

              	
                14

              
	
                Section
                  5.04.

              	
                Sponsor
                  Obligations

              	
                14

              
	
                Section
                  5.05.

              	
                Accounting
                  Matters

              	
                14

              
	 	 	 


      

       

      
        
          
          

        

        
          i

          
            

          

        

        
          
          

        

      

       

      
        	 	 	Page
	 	 	 
	
                ARTICLE
                  VI            
                  SAVING
                  PROVISIONS

              	
                15

              
	 	 	 
	
                Section
                  6.01.

              	
                Additional
                  Security

              	
                15

              
	
                Section
                  6.02.

              	
                Taxes

              	
                15

              
	
                Section
                  6.03.

              	
                Subrogation

              	
                15

              
	
                Section
                  6.04.

              	
                Waiver
                  of Defenses

              	
                16

              
	
                Section
                  6.05.

              	
                Continuing
                  and Unconditional Obligations

              	
                18

              
	
                Section
                  6.06.

              	
                Bankruptcy

              	
                19

              
	 	 	 
	
                ARTICLE
                  VII          
                  MISCELLANEOUS

              	
                20

              
	 	 	 
	
                Section
                  7.01.

              	
                Amendments,
                  Etc

              	
                20

              
	
                Section
                  7.02.

              	
                Applicable
                  Law; Jurisdiction; Etc

              	
                20

              
	
                Section
                  7.03.

              	
                Benefits
                  of Agreement

              	
                22

              
	
                Section
                  7.04.

              	
                Expenses

              	
                22

              
	
                Section
                  7.05.

              	
                Interest

              	
                22

              
	
                Section
                  7.06.

              	
                Counterparts;
                  Effectiveness

              	
                22

              
	
                Section
                  7.07.

              	
                Entire
                  Agreement

              	
                23

              
	
                Section
                  7.08.

              	
                No
                  Waiver; Cumulative Remedies

              	
                23

              
	
                Section
                  7.09.

              	
                Notices
                  and Other Communications

              	
                23

              
	
                Section
                  7.10.

              	
                Reinstatement

              	
                24

              
	
                Section
                  7.11.

              	
                Rights
                  of the Administrative Agent

              	
                25

              
	
                Section
                  7.12.

              	
                Severability

              	
                25

              
	
                Section
                  7.13.

              	
                Successions
                  and Assignments

              	
                25

              
	
                Section
                  7.14.

              	
                Survival

              	
                25

              
	
                Section
                  7.15.

              	
                Time

              	
                25

              
	
                Section
                  7.16.

              	
                Waiver
                  of Litigation Payments

              	
                25

              
	
                Section
                  7.17.

              	
                Term
                  of Agreement

              	
                25

              


      

    

    

      Exhibit A-1 Form
        of
        Deficiency Notice Issued by the Administrative Agent

       

      Exhibit
        A-2 Form
        of
        Deficiency Notice Issued by Borrower

       

      Exhibit B-1 Form
        of
        Warranty Notice Issued by the Administrative Agent

       

      Exhibit
        B-2 Form
        of
        Warranty Notice Issued by Borrower

       

    

     

    
      
        
        

      

      
        ii

        
          

        

      

      
        
        

      

    

    
 

    SPONSOR
      SUPPORT AGREEMENT

     

    This
      SPONSOR
      SUPPORT AGREEMENT,
      dated
      as of February 27, 2007 (this "Agreement"),
      is
      entered into by and among PACIFIC ETHANOL HOLDING CO. LLC, a Delaware limited
      liability company (the "Borrowers'
      Agent"),
      PACIFIC ETHANOL, INC., a Delaware corporation (the "Sponsor")
      and
      WESTLB AG, NEW YORK BRANCH, in its capacity as administrative agent for the
      Lenders (together with its successors, designees and assigns in such capacity,
      the "Administrative
      Agent").

     

    RECITALS

     

    WHEREAS,
      the Borrowers' Agent, 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 the Borrowers' Agent, Madera, Boardman, Stockton, and Brawley,
      the
      "Borrowers")
      have
      entered into that certain Credit Agreement, dated as of the date hereof (as
      amended, amended and restated, restated, supplemented or otherwise modified
      from
      time to time, the "Credit
      Agreement"),
      among
      the Borrowers, the Borrowers' Agent, each of the Lenders from time to time
      party
      thereto, the Administrative Agent, WESTLB AG, NEW YORK BRANCH, as collateral
      agent for the Lenders, 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, CÖÖPERATIEVE 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, pursuant to which,
      among other things, the Lenders have made loans to, and for the benefit of,
      the
      Borrowers;

     

    WHEREAS,
      as of the date hereof, the Sponsor indirectly owns one hundred percent (100%)
      of
      all issued and outstanding membership interests in the Borrowers;
      and

     

    WHEREAS,
      it is a requirement under the Credit Agreement that the parties hereto 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 for other good and valuable consideration,
      the receipt and adequacy of which are hereby acknowledged, and intending to
      be
      legally bound, the Borrowers' Agent and the Sponsor hereby agree with the
      Administrative Agent, for the benefit of the Lenders, as follows:

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      I

     

    Definitions
      and Interpretation

     

    Section
      1.01. Definitions.
      The
      following terms when used in this Agreement, including its preamble and
      recitals, shall have the following meanings:

     

    "Administrative
      Agent"
      has the
      meaning provided in the preamble
      to this
      Agreement.

     

    "Boardman"
      has the
      meaning provided in the recitals
      to this
      Agreement.

     

    "Borrowers"
      has the
      meaning provided in the recitals
      to this
      Agreement.

     

    "Borrowers'
      Agent"
      has the
      meaning provided in the recitals
      to this
      Agreement.

     

    "Brawley"
      has the
      meaning provided in the recitals
      to this
      Agreement.

     

    "Burley"
      has the
      meaning provided in the recitals
      to this
      Agreement.

     

    "Completion
      Adjustment"
      means,
      with respect to each Greenfield Plant, on the Commercial Operation Date for
      such
      Greenfield Plant, an amount equal to twenty-five percent (25%) of any difference
      (whether positive or negative) between (x) the aggregate total amount of
      Construction Project Costs set forth for such Greenfield Plant in the
      Construction Budget for such Greenfield Plant delivered and approved pursuant
      to
      Section 6.04(h) (Conditions
      to First Funding for Each Greenfield Plant)
      of the
      Credit Agreement minus
      (y) the aggregate total amount of actual and documented Construction
      Project Costs for such Greenfield Plant through and including the Commercial
      Operation Date (after taking into account any Construction Project Costs
      reserved for in accordance with clause (vi) of the definition of Commercial
      Operation Date). 

     

    "Closing
      Construction Budget"
      means,
      with respect to each Greenfield Plant, the Construction Budget for such
      Greenfield Plant delivered to, and approved by, the Administrative Agent on
      the
      Closing Date.

     

    "Construction
      Funding Adjustment"
      means,
      with respect to each Greenfield Plant, an amount equal to twenty-five percent
      (25%) of any positive difference between (x) the aggregate total amount of
      Construction Project Costs set forth for such Greenfield Plant in the
      Construction Budget for such Greenfield Plant delivered and approved pursuant
      to
      Section 6.04(h) (Conditions
      to First Funding for Each Greenfield Plant)
      of the
      Credit Agreement minus
      (y) the aggregate total amount of Construction Project Costs set forth for
      such Greenfield Plant in the Closing Construction Budget for such Greenfield
      Plant.

     

    "Construction
      Project Costs"
      means,
      with respect to any Greenfield Plant, Project Costs corresponding to the
      following Line Items in the applicable Construction Budget: Engineering /
      Procurement / Land & Sitework ; Site Utilities / Buildings / Other
      Improvements; Grain Systems & Rail Infrastruacture; Concrete Earthwork /
      Foundations; Structural Steel / Piping Materials; Pipe Installation / Valves;
      Equipment & Installation; Field & Shop Fabricated Tanks; Evaporators /
      Vessels / Columns; Electrical / Control Systems / Instrumentation; Final Product
      Handling / Fire Safety / Other.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    "Credit
      Agreement"
      has the
      meaning provided in the recitals
      to this
      Agreement.

     

    "Deficiency
      Notice"
      means a
      notice delivered by the Administrative Agent and/or a Borrower to the Sponsor
      substantially in the form of Exhibit A-1
      or
Exhibit A-2,
      as the
      case may be, with respect to any Project Completion Deficiency which, in the
      case of a Borrower, shall be subject to any approval required of the Independent
      Engineer pursuant to Section 2.03(a)
      (Deficiency
      Notices).

     

    "Deficiency
      Support Availability Period"
      means,
      with respect to each Greenfield Plant, the period commencing on the initial
      Funding Date for such Greenfield Plant and terminating on the earlier to occur
      of (a) the Commercial Operation Date for such Greenfield Plant and
      (b) the date on which (i) the aggregate amount of all Sponsor
      Deficiency Payments made with respect to such Greenfield Plant equal the Sponsor
      Funding Cap for such Greenfield Plant and (ii) if such Greenfield Plant is
      an
      Eligible Plant,  no Excess Amount remains available for funding Sponsor
      Deficiency Payments for such Eligible Plant.

     

    "Eligible
      Plant"
      means,
      on the Commercial Operation Date for any Greenfield Plant (or as otherwise
      provided in Section 4.02
      (Adjustments
      to Warranty Funding Cap and Sponsor Funding Cap)),
      any
      other Greenfield Plant (a) that has not achieved its Commercial Operation
      Date and (b) that has drawn and applied fifty percent (50%) or more of the
      aggregate total amount available under (i) the Contingency Line Item in the
      Closing Construction Budget for such Greenfield Plant and (ii) the Sponsor
      Funding Cap for such Greenfield Plant on the Closing Date.

     

    "Excess
      Amount"
      means,
      with respect to any Greenfield Plant, on the Commercial Operation Date for
      such
      Greenfield Plant, the difference between (a) the Sponsor Funding Cap for
      such Greenfield Plant and (b) the aggregate total amount of all Sponsor
      Deficiency Payments made with respect to such Greenfield Plant (which Excess
      Amounts will be applied in accordance with this Agreement without
      duplication).

     

    "Madera"
      has the
      meaning provided in the recitals
      to this
      Agreement.

     

    "PECA"
      means
      the Pledgor.

     

    "Project
      Completion Deficiency"
      means,
      with respect to any Greenfield Plant, any shortfall of funds required by the
      Borrowers to:

     

    
      	 	
              (i)

            	
              achieve
                the Commercial Operation Date for such Greenfield Plant by the Conversion
                Date Certain; or

            


    

     

    
      	 	
              (ii)

            	
              pay
                Project Costs (other than Debt Service) for such Greenfield Plant
                as and
                when they become due and payable.

            


    

     

    "Sponsor"
      has the
      meaning provided in the preamble
      to this
      Agreement.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    "Sponsor
      Deficiency Payments "
      means a
      dollar amount paid by the Sponsor for the purpose of funding a Project
      Completion Deficiency in accordance with a Deficiency Notice.

     

    "Sponsor
      Funding Cap"
      means:

     

    (a) with
      respect to the Stockton Plant, fourteen million six hundred thirty-three
      thousand seven hundred sixty-six Dollars ($14,633,766);

     

    (b) with
      respect to the Brawley Plant, fourteen million three hundred thirty-one thousand
      one hundred forty-four Dollars ($14,331,144); and 

     

    (c) with
      respect to the Burley Plant, thirteen million four hundred forty-nine thousand
      two hundred seven Dollars ($13,449,207);

     

    in
      each
      such case subject to the following adjustments:

     

    (x) on
      the
      date of the initial Funding for the relevant Plant, by adding to such amount
      the
      Construction Funding Adjustment for such Plant;

     

    (y) on
      the
      Commercial Operation Date for the relevant Plant, (i) in the event that the
      Completion Adjustment for such Plant is a positive amount, by subtracting from
      such amount such Completion Adjustment or (ii) in the event that the Completion
      Adjustment for such Plant is a negative amount, by adding to such amount the
      absolute value of such Completion Adjustment; and

     

    (z) such
      other adjustments required pursuant to Section 4.02
      (Adjustments
      to Warranty Funding Cap and Sponsor Funding Cap).
      

     

    "Sponsor
      Payment"
      means
      any Sponsor Warranty Payment or any Sponsor Deficiency Payment.

     

    "Sponsor
      Warranty Payments"
      means,
      as the context requires, (a) a dollar amount paid by the Sponsor for the purpose
      of funding a Warranty Payment Claim in accordance with a Warranty Notice or
      (b)
      costs and expenses incurred by the Sponsor (or any of its Affiliates other
      than
      the Borrowers or, in the case of PECA, other than as required pursuant to any
      Construction Management Services Agreement or any Operation and Maintenance
      Agreement) to satisfy any Warranty Performance Claim.

     

    "Stockton"
      has the
      meaning provided in the recitals
      to this
      Agreement.

     

    "Warranty
      Availability Period"
      means,
      with respect to each Warranty Plant, the period commencing on the Commercial
      Operation Date for such Warranty Plant and terminating on the date that is
      twelve (12) months from the Commercial Operation Date for such Warranty Plant;
      provided,
      that if
      any Warranty Work is performed on such Warranty Plant, then the "Warranty
      Availability Period" with respect to such Warranty Work shall extend until
      the
      later of (i) twelve (12) months from the date of completion of such
      Warranty Work and (ii) the expiration of the original Warranty Availability
      Period, but in no event shall such Warranty Availability Period extend beyond
      twenty-four (24) months after the Commercial Operation Date of such
      Warranty Plant.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    "Warranty
      Claim"
      means
      any Warranty Performance Claim or any Warranty Payment Claim.

     

    "Warranty
      Funding Cap"
      means
      (a) with respect to the Greenfield Plants, the aggregate of all Excess Amounts
      and (b) with respect to the Boardman Plant, ten million Dollars ($10,000,000)
      or, if less, the aggregate Sponsor Funding Cap, in each case as adjusted
      pursuant to Section 4.02
      (Adjustments
      to Warranty Funding Cap and Sponsor Funding Cap).

     

    "Warranty
      Notice"
      means a
      notice delivered by the Administrative Agent and/or a Borrower to the Sponsor
      substantially in the form of Exhibit
      B-1
      or
Exhibit
      B-2,
      as the
      case may be, with respect to any Warranty Claim which, in the case of a
      Borrower, shall be subject to any approval required of the Independent Engineer
      pursuant to Section
      3.03(a) (Warranty
      Notices).

     

    "Warranty
      Payment Claim"
      has the
      meaning provided in Section
      3.04(b) (Sponsor's
      Warranty Performance Obligations).

     

    "Warranty
      Performance Claim"
      means,
      with respect to any Warranty Plant, a claim under and in accordance with the
      warranty provided in Section
      3.01(c) (Sponsor's
      Warranty Undertaking)
      for the
      repair, replacement or correction for any failure, defect or deficiency related
      to such Warranty Plant.

     

    "Warranty
      Plants"
      means,
      collectively, the Boardman Plant and the Greenfield Plants. 

     

    "Warranty
      Work"
      means
      any work required to be performed, or caused to be performed, in respect of
      a
      Warranty Performance Claim.

     

    Section
      1.02. Credit
      Agreement Definitions.
      Unless
      otherwise defined herein or unless the context requires, terms used in this
      Agreement, including its preamble and recitals, have the meanings provided
      in
      the Credit Agreement.

     

    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.

     

    Section
      1.04. Release.
      If a
      Borrower is released from its obligations under the Financing Documents pursuant
      to Section 7.04 (Release
      of Borrower)
      of the
      Credit Agreement, then (a) the Sponsor shall be released of all of its
      obligations hereunder with respect to such Borrower and the Plant owned by
      such
      Borrower, and (b) such Borrower and Plant shall be disregarded for all purposes
      hereunder, including for the purpose of calculating the Sponsor Funding Cap,
      the
      Warranty Funding Cap and Excess Amounts.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      II

     

    PROJECT
      COMPLETION DEFICIENCY

     

    Section
      2.01. Sponsor's
      Completion Undertaking.
      Subject
      to Section
      2.04(f) (Sponsor's
      Deficiency Funding Obligation),
      the
      Sponsor hereby agrees, for the benefit of each Borrower that owns a Greenfield
      Plant and the Administrative Agent (on behalf and for the benefit of the
      Lenders), to pay, or cause to be paid, at any time and from time to time during
      the Deficiency Support Availability Period, all Projects Costs (other than
      Debt
      Service) relating to each Greenfield Plant, if and to the extent that there
      are
      insufficient funds available to the Borrower that owns any such Greenfield
      Plant
      (taking into account the Construction Loan Commitments that would be able to
      be
      funded for such Greenfield Plant in accordance with the Credit Agreement,
      Required Equity Contributions for such Greenfield Plant, liquidated damage
      proceeds for such Greenfield Plant, Business Interruption Insurance Proceeds
      for
      such Greenfield Plant, and funds on deposit in the Construction Account for
      such
      Greenfield Plant) to cover any Project Completion Deficiency.

     

    Section
      2.02. Action
      to be Taken by the Borrowers.
      At any
      time during the Deficiency Support Availability Period, if any Borrower at
      any
      time, and from time to time, determines that a Project Completion Deficiency
      exists or has reasonable cause to believe that a Project Completion Deficiency
      may exist, such Borrowers shall promptly notify the Administrative Agent in
      writing of such Project Completion Deficiency and of the Borrowers' opinion
      as
      to the reason for such Project Completion Deficiency.

     

    Section
      2.03. Deficiency
      Notices.
      (a)  Each
      Borrower may, from time to time during the Deficiency Support Availability
      Period, issue a Deficiency Notice, to the Sponsor (with a copy to the
      Administrative Agent) if any of the Borrowers determines that a Project
      Completion Deficiency exists or is likely to exist within twenty (20)
      Business Days immediately following the date of such Deficiency Notice which
      Deficiency Notice shall describe in reasonable detail the extent and nature
      of
      such Project Completion Deficiency; provided,
      that
      any such Deficiency Notice shall be subject to the reasonable approval of the
      Independent Engineer for any request (or series of requests related to the
      same
      Project Completion Deficiency) in an amount greater than one million Dollars
      ($1,000,000) or if, after taking into account the Sponsor Deficiency Payment
      requested pursuant to such Deficiency Notice, the aggregate amount of all
      Sponsor Deficiency Payments not previously approved by the Independent Engineer
      would exceed five million Dollars ($5,000,000).

     

    (b) The
      Administrative Agent may, from time to time during the Deficiency Support
      Availability Period, issue a Deficiency Notice to the Sponsor if the
      Administrative Agent determines (after consultation with the Independent
      Engineer and the Sponsor) that a Project Completion Deficiency exists or is
      reasonably expected to exist within fifteen (15) Business Days immediately
      following the date of such Deficiency Notice.

     

    (c) In
      the
      event of any conflict between any Deficiency Notice delivered by a Borrower
      under Section 2.03(a)
      and any
      Deficiency Notice delivered by the Administrative Agent under Section 2.03(b),
      the
      Deficiency Notice (and the terms thereof) delivered by the Administrative Agent
      shall prevail.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Section
      2.04. Sponsor's
      Deficiency Funding Obligation.
      (a)  Upon
      receipt of a Deficiency Notice from the Administrative Agent and/or from a
      Borrower, the Sponsor shall, no later than 1:00 p.m. New York City time on
      the
      later of (i) the date that is three (3) Business Days following receipt of
      such
      Deficiency Notice and (ii) the Business Day immediately following the date
      on
      which such Deficiency Notice has been approved by the Independent Engineer
      (if
      such approval is required under Section
      2.03(a) (Deficiency
      Notices)),
      provide
      or cause to be provided a Sponsor Deficiency Payment in an amount equal to
      the
      total Project Completion Deficiency specified in such Deficiency
      Notice. 

     

    (b) At
      the
      time that any Sponsor Deficiency Payment is provided, the Sponsor shall provide
      the Administrative Agent and the Borrowers' Agent with a written notice setting
      forth the amount of such funding that has been provided.

     

    (c) The
      proceeds of each Sponsor Deficiency Payment for any Project Completion
      Deficiency shall be deposited into the Construction Account for the Greenfield
      Plant with respect to which it was provided.

     

    (d) Any
      determination of the existence of a Project Completion Deficiency and any
      calculation of the amount of such Project Completion Deficiency made by the
      Administrative Agent shall, in the absence of manifest error, be conclusive
      and
      binding on the Sponsor, the Borrowers and the Borrowers' Agent.

     

    (e) The
      obligations of the Sponsor to provide any Sponsor Deficiency Payment required
      under this Article II
      are
      separate and distinct from, and in addition to, (i) any Required Equity
      Contributions required to be made in accordance with the Credit Agreement and
      the other Financing Documents, (ii) the Sponsor's obligations under Article III
      (Warranty
      Obligations),
      and
      (iii) any other equity contributions made to any Borrower.

     

    (f) The
      Sponsor's obligation to provide Sponsor Deficiency Payments with respect to
      Project Completion Deficiencies hereunder shall not exceed, in the aggregate
      with respect to any Greenfield Plant, the Sponsor Funding Cap for such
      Greenfield Plant plus,
      in the
      case of any Eligible Plant, any Excess Amounts not otherwise depleted in
      accordance with this Agreement.

     

    (g) If,
      during any period when Construction Loans are not available to the Borrowers
      as
      a result of a failure to meet any of the applicable conditions to funding set
      forth in Article VI (Conditions
      Precedent)
      of the
      Credit Agreement, the Sponsor makes Sponsor Deficiency Payments, then, at such
      later date when such conditions to funding are satisfied and Construction Loans
      for the Greenfield Plant with respect to which such Sponsor Deficiency Payments
      were made are available for funding to the Borrowers, the Borrowers shall be
      entitled to request (subject to and in accordance with the provisions of the
      Credit Agreement) a Funding of Construction Loans for such Greenfield Plant
      in
      the amount of such Sponsor Deficiency Payments (but in no event in excess of
      the
      applicable undisbursed Construction Loan Commitment) and the proceeds of such
      Funding may be paid to the Sponsor to reimburse such Sponsor Deficiency Payment.
      

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Section
      2.05. No
      Obligation of the Administrative Agent.
      The
      Administrative Agent may call for the provision of funds to meet a Project
      Completion Deficiency in accordance with Section 2.03(b)
      (Deficiency
      Notices),
      but
      shall have no obligation to do so, nor shall the Administrative Agent be liable
      to any Person for any action taken or not taken by the Administrative Agent
      or
      any other party under this Agreement.

     

    Section
      2.06. Termination
      of Sponsor's Funding Obligations.
      Subject
      to Section 4.02
      (Adjustments
      to Warranty Funding Cap and Sponsor Funding Cap)
      and
Section 7.10
      (Reinstatement),
      the
      Sponsor's obligations under this Article II
      with
      respect to Project Completion Deficiencies for each Greenfield Plant shall
      remain in full force and effect until the termination of the Deficiency Support
      Availability Period for such Greenfield Plant.

     

     

    ARTICLE
      III

     

    WARRANTY
      obligations

     

    Section
      3.01. Sponsor's
      Warranty Undertaking.
      (a)
      During
      the Warranty Availability Period, the Sponsor warrants to each Borrower that
      owns a Warranty Plant and to the Administrative Agent (on behalf and for the
      benefit of the Lenders) that:

     

    
      	 	
              (i)

            	
              all
                equipment and materials installed in a Warranty Plant will be (A) new
                (other than specific items of equipment or materials that the Independent
                Engineer has agreed may be refurbished) and of good quality and (B)
                free
                from defect or improper workmanship; and

            


    

     

    
      	 	
              (ii)

            	
              all
                design, construction, procurement and engineering work related to
                each
                Warranty Plant will (A) conform with professional standards and
                skill, expertise and diligence of design, construction, procurement
                or
                engineering (as the case may be) professionals regularly involved
                in major
                ethanol projects similar to such Warranty Plant and (B) be free from
                any
                defect or improper workmanship;

            


    

     

    provided,
      that
      the Sponsor's warranty obligations hereunder (i) shall not extend to
      Warranty Work that the Sponsor or any Borrower determines, and the Independent
      Engineer verifies in writing, is immaterial to the operation of the relevant
      Warranty Plant (based on the operating levels contemplated by the then-current
      Operating Budget) and (ii) in the event that the Borrowers are no longer in
      control of any Plant as a direct result of a foreclosure or related action
      pursuant to which the Senior Secured Parties (or any of them, or any transferee
      in foreclosure or such related action) are controlling such Plant, shall not
      apply to the extent that Warranty Work arises directly from a failure of such
      Senior Secured Parties (or such transferee) to maintain and operate such Plant
      in accordance with Prudent Ethanol Operating Practices.

     

    (b) OTHER
      THAN AS SET FORTH IN THIS ARTICLE
      III,
      THE SPONSOR MAKES NO OTHER WARRANTIES EXPRESS OR IMPLIED OR GUARANTEES EXPRESS
      OR IMPLIED RELATING TO THE WORK, MACHINERY, EQUIPMENT, MATERIALS, SYSTEMS,
      SUPPLIES OR OTHER ITEMS AND THE SPONSOR DISCLAIMS ANY IMPLIED WARRANTIES OR
      WARRANTIES IMPOSED BY LAW (INCLUDING WARRANTIES OF MERCHANTABILITY OR FITNESS
      FOR A PARTICULAR PURPOSE). PERFORMANCE BY THE SPONSOR OF ITS OBLIGATIONS UNDER
      THIS ARTICLE
      III
      SHALL BE THE BORROWERS' AND THE LENDERS' EXCLUSIVE REMEDY AGAINST THE SPONSOR
      AND THE SPONSOR'S SOLE LIABILITY FOR ANY DEFECTS OR DEFICIENCIES IN THE DESIGN,
      WORK, MACHINERY, EQUIPMENT, MATERIALS SYSTEMS, SUPPLIES OR OTHER ITEMS RELATED
      TO THE PROJECT.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (c) Notwithstanding
      anything to the contrary herein or in any other Financing Document, (i) if
      and
      to the extent the Sponsor makes any Sponsor Warranty Payments and any Borrower,
      any Secured Party or any Affiliate thereof receives any payments or
      reimbursements from any Project Party in respect thereof, then such Borrower,
      Secured Party or Affiliate (as applicable) shall promptly turn over any such
      payments or reimbursements to the Sponsor (and any such turn over shall be
      deemed to not be a Restricted Payment), (ii) if a Borrower fails to pursue
      any
      warranty claims against any Project Party, then such Borrower shall assign
      all
      of its rights to pursue such claims to the Sponsor and the Sponsor may pursue
      such claims (and related damage payments and expense reimbursements) and the
      Sponsor shall be entitled to keep all proceeds therefrom, and (iii) for the
      avoidance of doubt, the Sponsor is not guaranteeing or warranting to the
      continued satisfaction or maintenance of the Minimum Performance Criteria or
      Performance Guarantees. 

     

    Section
      3.02. Action
      to be Taken by the Borrowers.
      At any
      time during the Warranty Availability Period, if any Borrower at any time,
      and
      from time to time, determines that a Warranty Claim exists or has reasonable
      cause to believe that a Warranty Claim may exist, such Borrower shall promptly
      notify the Administrative Agent in writing of such Warranty Claim and of the
      Borrowers' opinion as to the reason for such Warranty Claim and the status
      of
      the Borrowers' request for such Warranty Claim to be addressed by any relevant
      Construction Contractor.

     

    Section
      3.03. Warranty
      Notices.
      (a)  Each
      Borrower may, from time to time during the Warranty Availability Period, issue
      a
      Warranty Notice to the Sponsor (with a copy to the Administrative Agent) if
      such
      Borrower determines that a Warranty Claim exists and will not be addressed
      in a
      timely manner by any relevant Construction Contractor and shall describe in
      reasonable detail the extent and nature of such Warranty Claim; provided,
      that
      any such Warranty Notice shall be subject to the reasonable approval of the
      Independent Engineer for any request (or series of requests related to the
      same
      Warranty Work) greater than one million Dollars ($1,000,000) or if, after taking
      into account the Sponsor Warranty Payment requested pursuant to such Warranty
      Notice, the aggregate amount of all Sponsor Warranty Payments not previously
      approved by the Independent Engineer would exceed five million Dollars
      ($5,000,000).

     

    (b) The
      Administrative Agent may, from time to time during the Warranty Availability
      Period, issue a Warranty Notice to the Sponsor if the Administrative Agent
      determines (after consultation with the Independent Engineer and the relevant
      Borrower) that a Warranty Claim exists.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (c) In
      the
      event of any conflict between any Warranty Notice delivered by any Borrower
      under Section 3.03(a)
      and any
      Warranty Notice delivered by the Administrative Agent under Section 3.03(b),
      the
      Warranty Notice (and the terms thereof) delivered by the Administrative Agent
      shall prevail.

     

    (d) Any
      determination of the existence of a Warranty Claim, and any calculation of
      the
      amount of any Warranty Payment Claim, made by the Administrative Agent shall,
      in
      the absence of manifest error, be conclusive and binding on the Sponsor, the
      Borrowers and the Borrowers' Agent.

     

    Section
      3.04. Sponsor's
      Warranty Performance Obligations.
      (a)  Upon
      receipt of a Warranty Notice relating to any Warranty Performance Claim from
      the
      Administrative Agent and/or from any Borrower, the Sponsor shall promptly
      commence, or cause to be commenced, any required Warranty Work within seven
      (7)
      days after delivery of such Warranty Notice (except in the case of an emergency,
      in which event such Warranty Work shall be completed immediately). All such
      Warranty Work shall be completed as promptly as practicable thereafter, and
      the
      Sponsor shall provide the Administrative Agent and the Borrowers' Agent with
      a
      written notice immediately upon completion of such Warranty Work (or upon
      completion of any Warranty Work undertaken by the Sponsor with respect to which
      no Warranty Notice was delivered to the Sponsor), together with evidence of
      all
      costs and expenses incurred by the Sponsor in connection therewith (which costs
      and expenses shall be subject to review and the reasonable approval of the
      Independent Engineer for amounts greater than one million Dollars ($1,000,000)
      with respect to any related Warranty Work or if, after taking into account
      the
      cost of such Warranty Work, the aggregate amount of all prior Sponsor Warranty
      Payments not previously approved by the Independent Engineer would exceed five
      million Dollars ($5,000,000)). The amount of all such costs and expenses (which,
      if required, have been approved by the Independent Engineer in writing) shall
      be
      deemed to be a Sponsor Warranty Payment.

     

    (b) If
      the
      Sponsor fails to diligently commence the necessary steps within the time period
      set forth in Section 3.04(a)
      or fails
      to continue to perform such steps through completion, any Borrowers or the
      Administrative Agent may provide the Sponsor with written notice that the
      applicable Borrower will commence or assume correction of such Warranty Work.
      If, following any such written notice, any Borrower performs, or causes to
      be
      performed, such Warranty Work, the Sponsor shall be responsible for payment
      or
      reimbursement of all costs and expenses (all such amounts, a "Warranty
      Payment Claim")
      incurred by the Borrowers in performing, or causing to be performed, such
      Warranty Claim, in accordance with Section 3.05
      (Sponsor's
      Warranty Funding Obligations).

     

    Section
      3.05. Sponsor's
      Warranty Funding Obligations.
      (a)  Upon
      receipt of a Warranty Notice relating to any Warranty Payment Claim from the
      Administrative Agent and/or from any Borrower, the Sponsor shall, no later
      than
      1:00p.m. New York City time on the later of (i) the date that is three (3)
      Business Days following receipt of such Warranty Notice or (ii) the Business
      Day
      immediately following the date on which such Warranty Notice has been approved
      by the Independent Engineer (if such approval is required pursuant to
Section
      3.04(a) (Sponsor's
      Warranty Performance Obligations),
      provide
      or cause to be provided a Sponsor Warranty Payment in an amount equal to the
      total Warranty Payment Claim set forth in such Warranty Notice. At the time
      that
      any Sponsor Warranty Payment is provided, the Sponsor shall provide the
      Administrative Agent and the Borrowers' Agent with a written notice setting
      forth the amount of such funding that has been provided.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (b) The
      proceeds of each Sponsor Warranty Payment for any Warranty Payment Claim shall
      be deposited into the Warranty Account for the Warranty Plant with respect
      to
      which it was provided.

     

    Section
      3.06. Independent
      Obligations.
      The
      obligations of the Sponsor to perform, or cause to be performed, any Warranty
      Work required under this Article III
      (or, if
      applicable, the obligation of the Sponsor to make any Sponsor Warranty Payments)
      are separate and distinct from, and in addition to, (a) any Required Equity
      Contributions required to be made in accordance with the Credit Agreement and
      the other Financing Documents, (b) the Sponsor's obligations under
Article II
      (Project
      Completion Deficiency),
      (c) any other equity contributions made to any Borrower and (d) any
      work performed or to be performed by PECA under any Construction Management
      Services Agreement or any Operation and Maintenance Agreement.

     

    Section
      3.07. No
      Obligation of the Administrative Agent.
      The
      Administrative Agent may call for the performance or payment of Warranty Work
      or
      the making of any Sponsor Warranty Payment in accordance with Section 3.03(b)
      (Warranty
      Notices)
      but
      shall have no obligation to do so, nor shall the Administrative Agent be liable
      to any Person for any action taken or not taken by the Administrative Agent
      or
      any other party under this Agreement.

     

    Section
      3.08. Termination
      of Sponsor's Warranty Obligations; Cap.
      (a)
      Subject
      to Section 4.02
      (Adjustments
      to Warranty Funding Cap and Sponsor Funding Cap),
      the
      Sponsor's obligation to provide Sponsor Warranty Payments hereunder shall not
      exceed, in the aggregate, the Warranty Funding Cap.

     

    (b) Subject
      to Section 7.10
      (Reinstatement),
      the
      Sponsor's obligations under this Article III
      with
      respect to Warranty Claims for each Warranty Plant shall remain in full force
      and effect until the termination of the Warranty Availability Period for such
      Warranty Plant.

     

     

    ARTICLE
      IV

     

    PROVISIONS
      APPLICABLE TO ALL FUNDINGS

     

    Section
      4.01. Acceleration
      of Senior Debt Obligations.
      (a)
      In the
      event that the Obligations have been, and continue to be, accelerated as
      provided under the Credit Agreement, within three (3) Business Days following
      delivery of a written notice from the Administrative Agent to the Sponsor,
      the
      Sponsor shall (i) deposit into the Construction Holding Account an amount
      equal the aggregate amount of the Sponsor Funding Cap that has not yet been
      funded in accordance with this Agreement or (ii) provide to the
      Administrative Agent a letter of credit from an Acceptable Bank in form and
      substance reasonably satisfactory to the Administrative Agent, or other credit
      support acceptable to the Administrative Agent, in either such case, in an
      amount equal to the aggregate amount of the Sponsor Funding Cap that has not
      yet
      been funded in accordance with this Agreement; provided,
      that,
      if such acceleration occurred following an Event of Default under
      Section 9.01(e) (Event
      of Default - Project Completion)
      of the
      Credit Agreement, the Sponsor shall be required to make the cash deposit
      described in Section 4.01(a)(i).

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (b) The
      Administrative Agent may call for the deposit of funds or provisions of credit
      support in accordance with Section 4.01(a)
      but
      shall have no obligation to do so, nor shall the Administrative Agent be liable
      to any Person for any action taken or not taken by the Administrative Agent
      or
      any other party under this Agreement.

     

    Section
      4.02. Adjustments
      to Warranty Funding Cap and Sponsor Funding Cap.
      (a) Any
      Sponsor Warranty Payments made with respect to the Boardman Plant shall reduce
      the Sponsor Funding Cap for each Greenfield Plant on a pro rata
      basis
      based on the undisbursed amounts available under each such Sponsor Funding
      Cap
      on the date of such calculation (and, if the Commercial Operation Date for
      any
      such Greenfield Plant has occurred before such Sponsor Warranty Payment is
      made,
      the portion allocated to such Greenfield Plant shall reduce
      (i) first,
      the
      Excess Amount for such Greenfield Plant, (ii) second,
      if such
      Excess Amount is reduced to or otherwise equals zero, then the portion allocated
      to such Greenfield Plant shall further reduce the Sponsor Funding Cap for each
      other Greenfield Plant on a pro rata
      basis
      based on the undisbursed amounts available under each such Sponsor Funding
      Cap
      on the date of such calculation and (iii) third,
      thereafter reduce the Excess Amount available for all other Eligible
      Plants).

     

    (b) In
      the
      event that the Sponsor is reimbursed by any Construction Contractor or any
      other
      third party for any Sponsor Warranty Payments or any Sponsor Deficiency Payments
      made pursuant to this Agreement, the Sponsor Funding Cap and/or the Excess
      Amounts, as the case may be, shall be reinstated in an amount equal to such
      reimbursement. 

     

    (c) Following
      any reimbursement of a Sponsor Deficiency Payment in accordance with
Section
      2.04(g) (Sponsor's
      Deficiency Funding Obligation),
      the
      Sponsor Funding Cap and/or the Excess Amounts, as the case may be, shall be
      reinstated in an amount equal to such reimbursement.

     

    (d) In
      the
      event that any Borrower or the Sponsor receives any liquidated damages payments
      from any Construction Contractor, and the reason for the payment of such
      liquidated damages corresponds directly to the reason for the making of any
      Sponsor Payments pursuant to this Agreement, such liquidated damages proceeds
      shall be paid over to the Sponsor and the Sponsor Funding Cap and/or the Excess
      Amounts, as the case may be, shall be reinstated in an amount equal to such
      reimbursement. The Borrowers and the Sponsor shall provide a written accounting
      of any such liquidated damages and corresponding Sponsor Payments to the
      Administrative Agent and the Independent Engineer (which, in the case of amounts
      in excess of one million Dollars ($1,000,000) with respect to any such event
      or
      liquidated damages under this Section 4.02(d)
      in the
      aggregate in excess of five million Dollars ($5,000,000), shall be subject
      to
      the reasonable approval of the Independent Engineer prior to any such
      reimbursement). 

     

    (e) On
      the
      Conversion Date, if amounts are paid to the Sponsor pursuant to Section 2.06(e)
      (Funding
      of Loans)
      of the
      Credit Agreement, the Excess Amounts shall be reinstated in an amount equal
      to
      the aggregate total value of the unutilized amounts of the Contingency Line
      Item
      for all of the Greenfield Plants that are paid to the Sponsors pursuant to
      such
      Section 2.06(e).

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (f) The
      Sponsor shall promptly provide notice to the Administrative Agent and the
      Borrowers' Agent of the Sponsor's receipt of any reimbursement described in
      this
Section 4.02.
      In the
      event of any reinstatement pursuant to this Section 4.02
      following the Commercial Operation Date for any Greenfield Plant (as used in
      this Section 4.02,
      a
      "Completed
      Plant"),
      the
      Excess Amount for such Completed Plant shall be increased accordingly and any
      Greenfield Plant that would have been an Eligible Plant if such reinstatement
      had occurred on or before the Commercial Operation Date for such Completed
      Plant
      shall be deemed to be an Eligible Plant with respect to such reinstated
      amounts.

     

     

    ARTICLE
      V

     

    Representations,
      Warranties AND COVENANTS

     

    Section
      5.01. Sponsor's
      Representations and Warranties.
      The
      Sponsor hereby represents and warrants for itself, as of the date hereof, as
      of
      each Funding Date and as of the date of any Deficiency Notice, any Warranty
      Notice and any Sponsor Payment delivered or made under this Agreement,
      that:

     

    (a) it is
      duly
      organized and validly existing under the laws of its jurisdiction of
      incorporation, has the corporate power and has obtained all required
      Governmental Approvals (each of which is in full force and effect and is not
      subject to review by any Governmental Authority) to comply with and perform
      its
      respective obligations under and enter into this Agreement;

     

    (b) this
      Agreement has been duly authorized and executed by it and constitutes its valid
      and legally binding obligation enforceable in accordance with its terms, except
      as enforceability hereof may be limited by bankruptcy, moratorium, insolvency
      or
      other similar laws affecting the enforcement of creditor's rights
      generally;

     

    (c) neither
      the execution and delivery of this Agreement nor the compliance with its terms
      will conflict with or result in a breach of any of the terms, conditions or
      provisions of, or constitute a default or require any consent which has not
      been
      obtained under, any indenture, mortgage, agreement or other instrument or
      arrangement to which it is a party or by which it or any of its properties
      or
      assets are bound, or violate any of the terms or provisions of its Organic
      Documents or any Governmental Approval, judgment, decree or order or any other
      applicable Law; 

     

    (d) it
      is,
      and after giving effect to the transactions contemplated under this Agreement
      will be, Solvent; and 

     

    (e) it
      is not
      executing this Agreement with any intention to hinder, delay or defraud any
      of
      its present or future creditor or creditors.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Section
      5.02. Survival
      and Administrative Agent Reliance.
      (a)  All
      representations, warranties and indemnities made in this Agreement are deemed
      material and shall survive the execution and delivery of this
      Agreement.

     

    (b) The
      Sponsor acknowledges that it makes the representations and warranties in
Section 5.01
      (Sponsor's
      Representations and Warranties),
      with
      the intention of inducing the Administrative Agent to enter into this Agreement
      and the Lenders to make the investment in the Borrowers under the Credit
      Agreement and that the Administrative Agent enters into this Agreement and
      the
      other Financing Documents (and the Senior Secured Parties will enter into the
      Financing Documents) on the basis of, and in full reliance on, each of such
      representations.

     

    Section
      5.03. Rights
      and Remedies not Limited.
      The
      rights and remedies of the Administrative Agent, on behalf and for the benefit
      of the Senior Secured Parties, in relation to any misrepresentation or breach
      of
      warranty on the part of the Sponsor are not prejudiced by:

     

    (a) any
      investigation by or on behalf of the Administrative Agent or any other Senior
      Secured Party into the affairs of any such party;

     

    (b) the
      execution or the performance of this Agreement; or

     

    (c) any
      other
      act or thing that may be done by or on behalf of the Administrative Agent or
      any
      other Senior Secured Party in connection with this Agreement and that might,
      apart from this Section 5.03,
      prejudice such rights or remedies.

     

    Section
      5.04. Sponsor
      Obligations.
      (a)
      Subject
      to Section 5.04(b),
      the
      Sponsor shall not create or grant any Liens on any of its assets for the benefit
      of third parties or enter into any secured credit enhancement arrangements
      with
      respect to obligations owed to third parties, unless the Sponsor simultaneously
      creates or grants such Liens for the benefit of, or enters into such credit
      enhancement arrangement with, the Senior Secured Parties, in each case, on
      terms
      no less favorable that those extended to such third parties (it being
      acknowledged and agreed that the amount secured by any such Liens in favor
      of
      the Senior Secured Parties, or the amount of any such secured credit
      enhancements made for the benefit of the Senior Secured Parties, shall not
      be
      any greater than the amounts so secured or provided to such third
      parties). 

     

    (b) The
      Sponsor may provide Liens to secure obligations to third parties and/or provide
      secured credit enhancements for the benefit of third parties, up to an aggregate
      total amount that is less than ten million Dollars ($10,000,000) without being
      required to grant such Liens, or provide such the secured credit enhancements,
      to the Senior Secured Parties pursuant to Section 5.04(a).
      

     

    Section
      5.05. Accounting
      Matters.
      Except
      as otherwise agreed in writing by Lenders (other than any Non-Voting Lender)
      holding (x) at any time prior to the Conversion Date, an amount in excess
      of sixty-six and two-thirds percent (66.66%) 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 (y) at any time after the Conversion Date, an amount in excess
      of sixty-six and two-thirds percent (66.66%) 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):

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (a) on
      or
      before May 15, 2007, the Sponsor shall hire a Chief Financial Officer and a
      Controller, and the person(s) hired as Chief Financial Officer and Controller
      shall have customary duties and responsibilities for chief financial officers
      or
      controllers (as applicable) of public-companies similar to the Sponsor;


     

    (b) the
      Sponsor agrees that in connection with its regular quarterly report on Form
      10-Q
      filed with the Securities and Exchange Commission in respect of the calendar
      quarter ending June 30, 2007, such report, or any certification delivered by
      the
      Sponsor or any of its officers in connection therewith (including Section 302(a)
      of the Sarbanes-Oxley Act of 2002), shall contain a statement by the Sponsor
      to
      the effect that it is unaware of any "material weaknesses in its internal
      controls"; and

     

    (c) the
      Sponsor agrees that in connection with its regular annual report on Form 10-K
      filed with the Securities and Exchange Commission in respect of the calendar
      year ending December 31, 2007, (i) such report, or any certification delivered
      by the Sponsor or any of its officers in connection therewith (including Section
      302(a) of the Sarbanes-Oxley Act of 2002), shall contain a statement by the
      Sponsor to the effect that it is unaware of any "material weaknesses in its
      internal controls" and (ii) the Sponsor's auditors shall have confirmed in
      writing such statement (subject to any customary qualifications).

     

     

    ARTICLE
      VI

     

    Saving
      Provisions

     

    Section
      6.01. Additional
      Security.
      This
      Agreement is in addition to, and is not in any way prejudiced by, any Security
      now or hereafter held by the Collateral Agent for the benefit of the Senior
      Secured Parties, nor shall such Security held by the Collateral Agent for the
      benefit of the Senior Secured Parties or the liability of any Person for all
      or
      any part of the Obligations be in any manner prejudiced or affected by this
      Agreement.

     

    Section
      6.02. Taxes.
      Any and
      all payments by or on account of any obligations under this Agreement shall
      be
      made free and clear of, and without deduction for, any Taxes, unless required
      by
      Law; provided,
      that if
      the Sponsor is 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 6.02)
      any
      Senior Secured Party or any other Person (as the case may be) receives an amount
      equal to the sum it would have received had no such deductions been made,
      (ii) the Sponsor shall make such deductions and (iii) the Sponsor
      shall pay the full amount deducted to the relevant Governmental Authority in
      accordance with applicable Law.

     

    Section
      6.03. Subrogation.
      Notwithstanding any payment or payments made by the Sponsor or the exercise
      by
      the Administrative Agent of any of the remedies provided under this Agreement
      or
      any set-off or application of funds of the Sponsor by the Administrative Agent,
      the Sponsor hereby waives all rights of subrogation until all of the Obligations
      have been paid in full. Notwithstanding the foregoing, if any amount shall
      be
      paid to the Sponsor on account of such subrogation, such amount shall be held
      by
      the Sponsor in trust 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    for
      the
      Administrative Agent, segregated from other funds of the Sponsor, and shall
      be
      turned over to the Administrative Agent, in the exact form received by the
      Sponsor (or duly endorsed by the Sponsor to the Administrative Agent, if
      required) to be applied against such amounts in such order as the Administrative
      Agent may elect. Nothing in this Section 6.03
      shall
      limit the Sponsor's express rights hereunder to receive reimbursements for
      Sponsor Deficiency Payments and/or Sponsor Warranty Payments as provided for
      in
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).

     

    Section
      6.04. Waiver
      of Defenses.
      The
      Sponsor hereby unconditionally and irrevocably waives and relinquishes, to
      the
      maximum extent permitted by applicable Laws, all rights and remedies accorded
      to
      sureties or guarantors and agrees not to assert or take advantage of any such
      rights or remedies, including: 

     

    (a) any
      right
      to require the Administrative Agent or the Senior Secured Parties to proceed
      against any Borrower, any guarantor or any other Person or to proceed against
      or
      exhaust any security or collateral held by the Collateral Agent or any other
      Senior Secured Party at any time or to pursue any other remedy in the
      Administrative Agent's or any other Senior Secured Party's power before
      proceeding against the Sponsor; 

     

    (b) any
      defense that may arise by reason of the incapacity, lack of power or authority,
      death, dissolution, merger, termination or disability of the Sponsor, any
      guarantor, any Borrower, or any other Person or the failure of the
      Administrative Agent or any other Senior Secured Party to file or enforce a
      claim against the estate (in administration, bankruptcy or any other proceeding)
      of the Sponsor, any guarantor, any Borrower, or any other Person;

     

    (c) promptness,
      diligence, demand, presentment, protest and notice of any kind (other than
      any
      notices required hereby), including notice of the existence, creation or
      incurring of any new or additional indebtedness or obligation or of any action
      or non-action on the part of any Borrower, the Administrative Agent, the Senior
      Secured Parties, any endorser or creditor of the foregoing, any guarantor or
      on
      the part of any other Person under this or any other instrument in connection
      with any obligation or evidence of indebtedness held by the Administrative
      Agent
      or the Senior Secured Parties as collateral or in connection with any amounts
      due under this Agreement or any other Financing Document;

     

    (d) any
      defense based upon 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 amounts due under
      any
      Financing Document, even though such foreclosure, sale or election of remedies
      may impair the subrogation rights of the Sponsor or may preclude the Sponsor
      from obtaining reimbursement, contribution, indemnification or other recovery
      from any Borrower or any other Person and even though the Sponsor may not,
      as a
      result of such foreclosure, sale or election of remedies, be liable for any
      deficiency; 

     

    (e) any
      defense based on any offset against any amounts which may be owed by any Person
      to the Sponsor for any reason whatsoever;

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (f) any
      defense based on any act, failure to act, delay or omission whatsoever on the
      part of any Borrower or any of the Affiliates of any Borrower or the failure
      by
      any Borrower or any of the Affiliates of any Borrower to do any act or thing
      or
      to observe or perform any covenant, condition or agreement to be observed or
      performed by it under any Financing Document;

     

    (g) any
      defense based upon any statute or rule of law which provides that the obligation
      of a surety or guarantor must be neither larger in amount nor in other respects
      more burdensome than that of the principal;

     

    (h) any
      defense of setoff or counterclaim which may at any time be available to or
      asserted by any Borrower or any of the Affiliates of any Borrower against the
      Administrative Agent, the Senior Secured Parties or any other Person under
      any
      Financing Document;

     

    (i) any
      duty
      on the part of the Administrative Agent or any Senior Secured Party to disclose
      to the Sponsor any facts any Senior Secured Party may now or hereafter know
      about any Borrower or any of the Greenfield Plants, regardless of whether the
      Administrative Agent or any Senior Secured Party has reason to believe that
      any
      such facts materially increase the risk beyond that which the Sponsor intends
      to
      assume, or have reason to believe that such facts are unknown to the Sponsor,
      or
      have a reasonable opportunity to communicate such facts to the Sponsor, since
      the Sponsor acknowledges that the Sponsor is fully responsible for being and
      keeping informed of the financial condition of all Borrowers and the Greenfield
      Plants and of all circumstances bearing on the risk of non-payment of any
      amounts due or non-performance of any obligations under this Agreement or any
      other Financing Document;

     

    (j) any
      defense based on any change in the time, manner or place of any payment or
      performance under, or in any other term of, any Financing Document, or any
      other
      amendment, renewal, extension, acceleration, compromise or waiver of or any
      consent or departure from the terms of any Financing Document;

     

    (k) any
      defense arising by reason of 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 amounts due under this Agreement
      or
      any other Financing Document (or any interest on all or any part of the amounts
      due under this Agreement or any other Financing Document) in or as a result
      of
      any such proceeding, any failure of the Administrative Agent to file a claim
      in
      any such proceeding, or the occurrence of any of the following: (i) the
      election by the Administrative 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; and 

     

    (l) any
      other
      circumstance (including any statute of limitations), any act or omission by
      any
      Borrower or any existence of or reliance on any representation by the
      Administrative Agent, any Borrower, or any Senior Secured Party that might
      otherwise constitute a defense available to, or discharge of, any guarantor
      or
      surety, defense of payment or performance of the applicable amounts due under
      this Agreement or any other Financing Document) (other than the defense that
      the
      Sponsor has performed its obligations hereunder or that the underlying
      obligation has been performed).

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Section
      6.05. Continuing
      and Unconditional Obligations.
      (a)  The
      Sponsor's obligations hereunder are primary obligations of the Sponsor and
      are
      an absolute, unconditional, continuing and irrevocable guaranty of payment
      and
      performance of the obligations of any and all Borrowers hereunder and not of
      collectibility, and are in no way conditioned on or contingent upon any attempt
      to enforce in whole or in part any liabilities and obligations of any Borrower
      or any liabilities and obligations of any of the Affiliates of any Borrower
      to
      the Senior Secured Parties. Each failure by the Sponsor to pay or perform,
      as
      the case may be, any amounts due or any obligations under this Agreement shall
      give rise to a separate cause of action hereunder, and separate suits may be
      brought hereunder as each cause of action arises.

     

    (b) The
      Senior Secured Parties may, at any time and from time to time (whether or not
      after revocation or termination of this Agreement) without the consent of or
      notice to the Sponsor, except such notice as may be required by the Financing
      Documents or applicable law which cannot be waived, without incurring
      responsibility to the Sponsor, without impairing or releasing the obligations
      of
      the Sponsor hereunder, upon or without any terms or conditions and in whole
      or
      in part:

     

    (i) change
      the manner, place and terms of payment or performance of, or renew or alter,
      any
      obligations and liabilities (including any of those hereunder) incurred directly
      or indirectly in respect thereof or hereof, or in any manner modify, amend
      or
      supplement the terms of the Financing Documents or any documents, instruments
      or
      agreements executed in connection therewith, in each case with the consent
      of
      the relevant Borrower(s), the Sponsor (in each case, only as and to the extent
      expressly required by the applicable Financing Document), and the agreements
      herein made shall apply to such obligations as changed, extended, renewed,
      modified, amended, supplemented or altered in any manner; 

     

    (ii) exercise
      or refrain from exercising any rights against any Borrower or others (including
      the Sponsor) or otherwise act or refrain from acting; 

     

    (iii) add
      or
      release any other guarantor or surety from its obligations without affecting
      or
      impairing the obligations of the Sponsor hereunder; 

     

    (iv) settle
      or
      compromise any amounts, obligations or liabilities (including any of those
      hereunder) incurred directly or indirectly in respect thereof or hereof, and
      may
      subordinate the payment or performance of all or any part thereof to the payment
      or performance of any amounts, obligations or liabilities which may be due
      to
      the Senior Secured Parties or others; 

     

    (v) sell,
      exchange, release, surrender, realize upon or otherwise deal with in any manner
      or in any order any property by whomsoever pledged or mortgaged to secure or
      securing any amounts, liabilities or obligations (including any of those
      hereunder) incurred directly or indirectly in respect thereof or hereof and/or
      any offset thereagainst; 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (vi) apply
      any
      sums by whomsoever paid or howsoever realized to any obligations and liabilities
      of any Borrower or any guarantor or surety to the Senior Secured Parties under
      the Financing Documents in the manner provided therein regardless of what
      obligations and liabilities remain unpaid, except that sums paid by the Sponsor
      hereunder shall be deemed to have been paid in respect of the applicable
      obligation of the Sponsor hereunder;

     

    (vii) consent
      to or waive any breach of, or any act, omission or default under, the Financing
      Documents or otherwise amend, modify or supplement (with the consent of the
      Sponsor, any Borrower and any other guarantor or surety, only as and to the
      extent expressly required by the Financing Documents) the Financing Documents
      or
      any of such other instruments or agreements; and/or 

     

    (ix) act
      or
      fail to act in any manner referred to in this Agreement which may deprive the
      Sponsor of its right to subrogation against any Borrower or any other guarantor
      or surety to recover full indemnity for any payments or performances made
      pursuant to this Agreement or of its right of contribution against any other
      party.

     

    (c) No
      invalidity, irregularity or unenforceability of any obligations and liabilities
      Financing Document or invalidity, irregularity, unenforceability or
      non-perfection of any collateral therefor, shall affect, impair or be a defense
      to this Agreement, which is a primary obligation of the Sponsor.

     

    (d) This
      is a
      continuing guaranty and all obligations to which it applies or may apply under
      the terms hereof shall be conclusively presumed to have been created in reliance
      hereon. In the event that, notwithstanding the provisions of this Section 6.05,
      this
      Agreement shall be deemed revocable in accordance with applicable law, then,
      to
      the fullest extent permitted by applicable law, any such revocation shall become
      effective only upon receipt by the Collateral Agent of written notice of
      revocation signed by the Sponsor. To the extent permitted by applicable law,
      no
      revocation or termination hereof shall affect, in any manner, rights arising
      under this Agreement with respect to obligations and liabilities arising prior
      to receipt by the Collateral Agent of written notice of such revocation or
      termination. Any such revocation or termination shall be deemed to be an Event
      of Default.

     

    Section
      6.06. Bankruptcy.
      The
      Sponsor hereby irrevocably waives, to the extent it may do so under applicable
      Laws, any protection to which it may be entitled under Sections 365(c)(1),
      365(c)(2) and 365(e)(2) of the Bankruptcy Code or equivalent provisions of
      the
      laws or regulations of any other jurisdiction with respect to any proceedings,
      or any successor provision of law of similar import, in the event of any
      Bankruptcy Event with respect to any Borrower or any other guarantor or surety.
      Specifically, in the event that the trustee (or similar official) in a
      Bankruptcy Event with respect to the relevant Borrower(s) or any other guarantor
      or surety or the debtor-in-possession takes any action (including the
      institution of any action, suit or other proceeding for the purpose of enforcing
      the rights of the relevant Borrower(s), or any other guarantor or surety under
      this Agreement or any other Financing Document), the Sponsor shall,

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     to
      the fullest extent it may do so under applicable law, not assert any defense,
      claim or counterclaim denying liability hereunder on the basis that this
      Agreement or any other Financing Document is an executory contract or a
      "financial accommodation" that cannot be assumed, assigned or enforced or on
      any
      other theory directly or indirectly based on Sections 365(c)(1), 365(c)(2)
      or 365(e)(2) of the Bankruptcy Code, or equivalent provisions of the law or
      regulations of any other jurisdiction with respect to any proceedings or any
      successor provision of law of similar import. If a Bankruptcy Event with respect
      to any Borrower or any other guarantor or surety shall occur, the Sponsor
      agrees, after the occurrence of such Bankruptcy Event, to reconfirm in writing,
      to the extent permitted by applicable Laws, its pre-petition waiver of any
      protection to which it may be entitled under Sections 365(c)(1), 365(c)(2)
      and 365(e)(2) of the Bankruptcy Code or equivalent provisions of the laws or
      regulations of any other jurisdiction with respect to proceedings and, to give
      effect to such waiver, the Sponsor consents, to the fullest extent it may do
      so
      under applicable law, to the assumption and enforcement of each provision of
      this Agreement and any other Financing Document by the debtor-in-possession
      or
      the trustee in bankruptcy of the relevant Borrower(s) or of any other guarantor
      or surety, as the case may be; and

     

    ARTICLE
      VII

     

    Miscellaneous

     

    Section
      7.01. Amendments,
      Etc.
      No
      amendment or waiver of any provision of this Agreement, and no consent to any
      departure by any of the Sponsor or the Borrowers' Agent from this Agreement,
      shall be effective unless in writing signed by the Administrative Agent, the
      Sponsor and the Borrowers' Agent, and each such waiver or consent shall be
      effective only in the specific instance and for the specific purpose for which
      given.

     

    Section
      7.02. 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 BORROWERS' AGENT AND THE SPONSOR 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, ANY OTHER FINANCING DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT
      OF
      ANY JUDGMENT, AND EACH OF THE BORROWERS' AGENT AND THE SPONSOR IRREVOCABLY
      AND
      UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR
      PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH STATE OR, TO THE FULLEST EXTENT
      PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT. EACH OF THE BORROWERS'
      AGENT
      AND THE SPONSOR 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 OF THE BORROWERS'
      AGENT, THE SPONSOR, THE ADMINISTRATIVE 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 BORROWERS' AGENT, THE SPONSOR OR
      ANY
      OTHER LOAN PARTY OR ITS PROPERTIES IN THE COURTS OF ANY
      JURISDICTION.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (c) WAIVER
      OF VENUE.
      EACH OF
      THE BORROWERS' AGENT AND THE SPONSOR 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, ANY OTHER FINANCING DOCUMENT IN ANY COURT
      REFERRED TO IN SECTION 7.02(b).
      EACH OF
      THE BORROWERS' AGENT AND THE SPONSOR 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' Agent and the Sponsor hereby irrevocably appoints CT Corporation
      System with an office on the date hereof at 111 Eighth Avenue, New York, New
      York 10011, United States, 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 the Borrowers' Agent or the
      Sponsor, each of the Borrowers' Agent and the Sponsor, as the case may be,
      hereby agrees to designate a new agent in the State of New York on the terms
      and
      for the purposes of this Section 7.02
      reasonably satisfactory to the Administrative Agent. Such service may be made
      by
      mailing or delivering a copy of such process to the Borrowers' Agent or the
      Sponsor in care of the Process Agent at the Process Agent's above address,
      and
      the each of the Borrowers' Agent and the Sponsor, as the case may be, 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' Agent
      and the Sponsor, as the case may be, 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 Borrowers' Agent or the Sponsor at its then
      effective notice address pursuant to Section 7.09
      (Notices
      and Other Communications).
      

     

    (e) Immunity.
      To the
      extent that either the Borrowers' Agent or the Sponsor 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' Agent and the Sponsor 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 7.02(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, 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, THE OTHER FINANCING DOCUMENTS BY, AMONG OTHER THINGS,
      THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 7.02(f).

     

    Section
      7.03. 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 the Senior Secured
      Parties, 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.

     

    Section
      7.04. Expenses.
      Each of
      the Borrowers and the Sponsor agree to pay on demand to the Administrative
      Agent
      (a) all reasonable costs and reasonable and documented expenses incurred by
      the
      Administrative Agent (including the reasonable and documented fees, expenses
      and
      disbursements of counsel) incident to its exercise of any of its rights (or
      the
      rights of any other Senior Secured Party) under this Agreement and (b) all
      costs
      and expenses incurred by the Administrative Agent (including the fees, expenses
      and disbursements of counsel) incident to its enforcement, protection or
      preservation of any of its rights, remedies or claims (or the rights or claims
      of any other Senior Secured Party) under this Agreement.

     

    Section
      7.05. Interest.
      Any
      amount required to be paid by the Borrowers or the Sponsor 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
      7.06. 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 each of the 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
      7.07. Entire
      Agreement.
      This
      Agreement, together with each other Financing Document, 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
      7.08. No
      Waiver; Cumulative Remedies.
      No
      failure by the Administrative Agent to exercise, and no delay by the
      Administrative 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. 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
      7.09. Notices
      and Other Communications.
      (a)  Except
      as provided in Section 7.09(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:

     

    If
      to the
      Administrative Agent:

     

    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

    


    If
      to the
      Borrowers' Agent:

     

    Pacific
      Ethanol Holding Co. LLC

    c/o
      Pacific Ethanol, Inc.

    5711
      N.
      West Avenue

    Fresno,
      CA 83711 

    Attention:
      Jeff Manternach

    Telephone:
      (559) 435-1771

    Facsimile:
       (559)
      435-1478

    


    with
      a
      copy to:

    


    Pacific
      Ethanol, Inc.

    400
      Capital Mall, Suite 2060

    Sacramento,
      CA 95814

    Attention:
      General Counsel

    Telephone:
      (916) 403-2130

    Facsimile:
      (916) 446-3937

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    If
      to the
      Sponsor:

    


    Pacific
      Ethanol, Inc. 

    5711
      N.
      West Avenue

    Fresno,
      CA 83711 

    Attention:
      Jeff Manternach

    Telephone:
      (559) 435-1771

    Facsimile:
       (559)
      435-1478

    


    with
      a
      copy to:

    


    Pacific
      Ethanol, Inc.

    400
      Capital Mall, Suite 2060

    Sacramento,
      CA 95814

    Attention:
      General Counsel

    Telephone:
      (916) 403-2130

    Facsimile:
      (916) 446-3937

     

    


     

    (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).

     

    (c) Each
      of
      the parties hereto may change its address, telecopier or telephone number for
      notices and other communications hereunder by notice to the other parties
      hereto.

     

    Section
      7.10. Reinstatement.
      This
      Agreement and the Sponsor's obligations hereunder shall continue to be effective
      or be automatically reinstated, as the case may be, if at any time (a) any
      payment pursuant to this Agreement or (b) in the event that this Agreement
      or any obligations hereunder were terminated as a result of the repayment in
      full of the Loans, any amount of such payment, in either such case is rescinded,
      invalidated, declared to be fraudulent or preferential, set aside or must
      otherwise be restored or returned upon the insolvency, bankruptcy,
      reorganization, liquidation of any of the Borrowers, the Sponsor or any other
      Person party to a Financing Document or upon the dissolution of, or appointment
      of any intervenor or conservator of, or trustee or similar official for, any
      of
      the Borrowers, the Sponsor any other Person party to a Financing Document or
      any
      substantial part of any of any Borrower's, the Sponsor's or any other such
      Person's assets, or otherwise, all as though such payments had not been made,
      and the Borrowers' Agent and the Sponsor shall pay the Administrative Agent
      on
      demand all reasonable costs and out-of-pocket expenses (including reasonable
      fees, expenses and disbursements of counsel) incurred by the Administrative
      Agent in connection with such rescission or restoration.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Section
      7.11. Rights
      of the Administrative Agent.
      The
      Administrative Agent shall be entitled to the rights, protections, immunities
      and indemnities set forth in the Credit Agreement, and the Financing Documents,
      as if specifically set forth herein.

     

    Section
      7.12. 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.

     

    Section
      7.13. Successions
      and Assignments.
      This
      Agreement shall (a) be binding upon the Borrowers, the Borrowers' Agent,
      the Sponsor, the Administrative Agent and their respective successors and
      assigns; and (b) inure, together with the rights and remedies of the
      Administrative Agent, to the benefit of the Administrative Agent, the Senior
      Secured Parties and their respective successors and permitted
      assigns.

     

    Section
      7.14. Survival.
      Notwithstanding anything in this Agreement to the contrary, Section 7.04
      (Expenses)
      and
Section 7.05
      (Interest)
      shall
      survive the termination of this Agreement. 

     

    Section
      7.15. Time.
      Time is
      of the essence of this Agreement.

     

    Section
      7.16. Waiver
      of Litigation Payments.
      To the
      extent that the Borrowers' Agent or the Sponsor may, in any action, suit or
      proceeding brought in any of the courts referred to in Section 7.02(b)
      (Applicable
      Law; Jurisdiction; Etc.)
      or
      elsewhere arising out of or in connection with this Agreement or any other
      Financing Document, be entitled to the benefit of any provision of law requiring
      the Administrative Agent or any other Senior Secured Party in such action,
      suit
      or proceeding to post security for the costs of the Borrowers' Agent or the
      Sponsor or to post a bond or to take similar action, each of the Borrowers'
      Agent and the Sponsor hereby irrevocably waives such benefit, in each case
      to
      the fullest extent now or in the future permitted under the laws of the State
      of
      New York or, as the case may be, the jurisdiction in which such court is
      located.

     

    Section
      7.17. Term
      of Agreement.
      Subject
      to Section 7.10
      (Reinstatement)
      and as
      otherwise provided in Section 7.14
      (Survival),
      this
      Agreement shall remain in effect until the earliest to occur of (a) the
      Discharge Date, (b) the expiration of the final Warranty Period for the
      Warranty Plants and (c) the date on which the Sponsor's obligations under
Article
      II
      have
      terminated in accordance with Section 2.06
      (Termination
      of Sponsor's Funding Obligations)
      (subject
      to any reinstatement as described in such Section 2.06)
      and the
      aggregate amount of all Sponsor Warranty Payments equals the Warranty Funding
      Cap (subject to any reinstatement of the Warranty Funding Cap in accordance
      with
Section 4.02
      (Adjustments
      to Warranty Funding Cap and Sponsor Funding Cap)).

     

    (remainder
      of this page intentionally left blank)

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF, the parties, acting through their duly authorized
      representatives, have caused this Sponsor Support Agreement to be executed
      in
      their respective names as of the day and year first written above.

     

    

      
        	 	
                PACIFIC
                  ETHANOL HOLDING CO. LLC,

              
	 	
                as
                  the Borrowers' Agent,

                 

              
	 	
                 

                By:
                  /s/
                  JEFFREY MANTERNACH

              
	 	
                Name:
                  Jeffrey Manternach

              
	 	
                Title:
                  Vice President Finance

                 

              
	 	
                PACIFIC
                  ETHANOL, INC.,

              
	 	
                as
                  the Sponsor

                 

              
	 	
                 

                By:
                  /s/
                  JEFFREY MANTERNACH

              
	 	
                Name:
                  Jeffrey Manternach

              
	 	
                Title:
                  Vice President Finance

                 

              
	 	
                WESTLB
                  AG, NEW YORK BRANCH,

              
	 	
                as
                  the Administrative Agent

                 

              
	 	
                 

                By:
                  /s/
                  JAMES R. ANDERSON

              
	 	
                Name:
                  James R. Anderson

              
	 	
                Title:
                  Associate Director

                 

              
	 	
                 

                By:
                  /s/
                  PAUL VASTOLA

              
	 	
                Name:
                  Paul Vastola

              
	 	
                Title:
                  Director

                 

              


      

    

    


     


    
      
        
           

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
           

        

      

    

    
 

    Exhibit
      A-1


    [FORM
      OF] 

    DEFICIENCY
      NOTICE

     

    [Administrative
      Agent Letterhead]

     

    [Date]

     

    Pacific
      Ethanol, Inc. 

    5711
      N.
      West Avenue

    Fresno,
      CA 83711 

    Attention:
      Jeff Manternach

    


    with
      a
      copy to:

    


    Pacific
      Ethanol, Inc.

    400
      Capital Mall, Suite 2060

    Sacramento,
      CA 95814

    Attention:
      General Counsel

    


     

    
      	 	
              Re:

            	
              Deficiency
                Notice

            


    

     

    Ladies
      and Gentlemen:

     

    Reference
      is made to the Sponsor Support Agreement, dated as of [_________],
      2007
      (the "Agreement"),
      among
      PACIFIC ETHANOL HOLDING CO. LLC, a Delaware limited liability company (the
      "Borrowers'
      Agent"),
      PACIFIC ETHANOL, INC., a Delaware corporation (the "Sponsor")
      and
      WESTLB AG, NEW YORK BRANCH, in its capacity as administrative agent for the
      Lenders (together with its successors, designees and assigns in such capacity,
      the "Administrative
      Agent").
      Capitalized terms used and not otherwise defined in this Deficiency Notice
      have
      the meanings provided in the Agreement.

     

    In
      accordance with Section 2.03(b) of the Agreement, the Administrative Agent
      has determined that [that
      a
      Project Completion Deficiency exists]
      [that
      specified amounts will become due and payable by or on behalf of one or more
      of
      the Borrowers within the fifteen (15) Business Days immediately following
      the date hereof and, if not paid when due, such failure to pay could result
      in a
      Project Completion Deficiency, and the Administrative Agent reasonably believes
      that the Borrowers will not have funds available to pay such amounts when
      due].
      The
      Project Completion Deficiency relates to [Project
      Costs or other costs associated with the [Stockton
      Plant] [Brawley
      Plant] [Burley
      Plant]].
      The
      Administrative Agent has determined that such Project Completion Deficiency
      amounts to [____]
      Dollars
      ($[_____])
      (the
      "Project
      Completion Deficiency Amount").
      The
      Sponsor is hereby instructed to fund the Project Completion Deficiency Amount
      in
      the form of a Sponsor Deficiency Payment directly to the [Stockton] [Brawley] [Burley]
      Construction Account on or before [insert
      date that is three (3) Business Days from the date of this
      notice]
      in
      accordance with Section 2.04(a) of the Agreement.

     

    (remainder
      of this page intentionally left blank)

     


    
      
        A1-1

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


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

     

    

      
        	 	
                WESTLB
                  AG, NEW YORK BRANCH, 

              
	 	
                as
                  the Administrative Agent

                 

              
	 	
                 

                By:
                  

              	 
	 	 	
                Name:

              
	 	 	
                Title:

                 

              
	 	
                 

                By:
                  

              	 
	 	 	
                Name:

              
	 	 	
                Title:

              


      

    

     

    
 

    
      
        
          A1-2

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
           

        

      

    



    Exhibit
      A-2

     


    [FORM
      OF] 

    DEFICIENCY
      NOTICE

     

    [Borrower's
      Letterhead]

     

    [Date]

     

    Pacific
      Ethanol, Inc. 

    5711
      N.
      West Avenue

    Fresno,
      CA 83711 

    Attention:
      Jeff Manternach

    


    with
      a
      copy to:

    


    Pacific
      Ethanol, Inc.

    400
      Capital Mall, Suite 2060

    Sacramento,
      CA 95814

    Attention:
      General Counsel

    


    
      	 	
              Re:

            	
              Deficiency
                Notice

            


    

     

    Ladies
      and Gentlemen:

     

    Reference
      is made to the Sponsor Support Agreement, dated as of [_________],
      2007
      (the "Agreement"),
      among
      PACIFIC ETHANOL HOLDING CO. LLC, a Delaware limited liability company (the
      "Borrowers'
      Agent"),
      PACIFIC ETHANOL, INC., a Delaware corporation (the "Sponsor")
      and
      WESTLB AG, NEW YORK BRANCH, in
      its
      capacity as administrative agent for the Lenders (together with its successors,
      designees and assigns in such capacity, the "Administrative
      Agent").
      Capitalized terms used and not otherwise defined in this Deficiency Notice
      have
      the meanings provided in the Agreement.

     

    In
      accordance with Section 2.03(a) of the Agreement, the undersigned Borrower
      has determined that [a
      Project
      Completion Deficiency exists]
      [specified
      amounts will become due and payable by or on behalf of one or more of the
      Borrowers within the twenty (20) Business Days immediately following the
      date hereof and, if not paid when due, such failure to pay could result in
      a
      Project Completion Deficiency, and the undersigned Borrower reasonably believes
      that it will not have funds available to pay such amounts when due].
      The
      Project Completion Deficiency relates to [Project
      Costs or other costs associated with the [Stockton
      Plant] [Brawley
      Plant] [Burley
      Plant]
      and
[insert
      more detailed description]].
      The
      undersigned Borrower has determined that such Project Completion Deficiency
      amounts to [____]
      Dollars
      ($[_____])
      (the
      "Project
      Completion Deficiency Amount").
      The
      Sponsor is hereby instructed to fund the Project Completion Deficiency Amount
      in
      the form of a Sponsor Deficiency Payment directly to the [Stockton] [Brawley] [Burley]
      Construction Account on or before [insert
      date that is three (3) Business Days from the date of this
      notice]
      (or, if
      later, the Business Day immediately following the Independent Engineer's
      approval of this Deficiency Notice) in accordance with Section 2.04(a) of
      the Agreement.

     

    (remainder
      of this page intentionally left blank)

     


    
      
        A2-1

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


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

     

    

      
        	 	
                [_____________________],

              
	 	
                as
                  Borrower

                 

              
	 	
                 

                By:
                  

              	 
	 	
                 

              	
                Name:

              
	 	
                 

                 

              	
                Title:

                 

              


      

    

     

    


    


    [Accepted
      and Approved as of

    ___________.
      20___ by:

    


    [_____________________________],

    as
      the
      Independent Engineer

     

    


     

    By:
      _____________________

    Name:

     

    Title:

     

     

    By:
      _____________________

    Name:

     

    Title:]

     

    [Note:
      IE Signature block to be included if required pursuant to Section
      2.03(a)]

     

    


    



    
      
        
          A2-2

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
           

        

      

    


    Exhibit
      B-1

     



    [FORM
      OF] 

    WARRANTY
      NOTICE

     

    [Administrative
      Agent Letterhead]

     

    [Date]

     

    Pacific
      Ethanol, Inc. 

    5711
      N.
      West Avenue

    Fresno,
      CA 83711 

    Attention:
      Jeff Manternach

    


    with
      a
      copy to:

    


    Pacific
      Ethanol, Inc.

    400
      Capital Mall, Suite 2060

    Sacramento,
      CA 95814

    Attention:
      General Counsel

    


    
      	 	
              Re:

            	
              Warranty
                Notice

            


    

     

    Ladies
      and Gentlemen:

     

    Reference
      is made to the Sponsor Support Agreement, dated as of [_________],
      2007
      (the "Agreement"),
      among
      PACIFIC ETHANOL HOLDING CO. LLC, a Delaware limited liability company (the
      "Borrowers'
      Agent"),
      PACIFIC ETHANOL, INC., a Delaware corporation (the "Sponsor")
      and
      WESTLB AG, NEW YORK BRANCH, in its capacity as administrative agent for the
      Lenders (together with its successors, designees and assigns in such capacity,
      the "Administrative
      Agent").
      Capitalized terms used and not otherwise defined in this Warranty Notice have
      the meanings provided in the Agreement.

     

    In
      accordance with Section 3.03(b) of the Agreement, the Administrative Agent
      has determined that a Warranty Claim exists with respect to the [Boardman
      Plant] [Stockton
      Plant] [Brawley
      Plant] [Burley
      Plant].
      

     

    [Such
      Warranty Claim is a Warranty Performance Claim and relates to
      [insert description]. The
      Sponsor is hereby instructed to perform, or cause to be performed, all Warranty
      Work related to this Warranty Claim in accordance with Section 3.04(a) of the
      Agreement.] [To
      be included for Warranty Performance Claims.]

     

    [Such
      Warranty Claim is a Warranty Payment Claim in the amount of [____]
      Dollars
      ($[_____])
      (the
      "Warranty
      Payment Amount")
      and
      relates to
      [insert description]. The
      Sponsor is hereby instructed to fund the Warranty Payment Amount in the form
      of
      a Sponsor Warranty Payment directly to the [Boardman] [Stockton] [Brawley] [Burley]
      Warranty
      Account on or before [insert
      date that is three (3) Business Days from the date of this
      notice]
      in
      accordance with Section 3.05(a) of the Agreement.] [To
      be included for Warranty Payment Claims.]

     

    (remainder
      of this page intentionally left blank)

     


    
      
        B1-1

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


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

     

    
      

        
          	 	
                  WESTLB
                    AG, NEW YORK BRANCH, 

                
	 	
                  as
                    the Administrative Agent

                   

                
	 	
                   

                  By:
                    

                	 
	 	 	
                  Name:

                
	 	 	
                  Title:

                   

                
	 	
                   

                  By:
                    

                	 
	 	 	
                  Name:

                
	 	 	
                  Title:

                


        

         

        


        
          
            
              
                B1-2

              

              
              

            

            
              
              

              
                

              

            

            
              
              

              
                 

              

            

          

        

        
Exhibit
          B-2


      

    

    [FORM
      OF] 

    WARRANTY
      NOTICE

     

    [Borrower's
      Letterhead]

     

    [Date]

     

    Pacific
      Ethanol, Inc. 

    5711
      N.
      West Avenue

    Fresno,
      CA 83711 

    Attention:
      Jeff Manternach

    


    with
      a
      copy to:

    


    Pacific
      Ethanol, Inc.

    400
      Capital Mall, Suite 2060

    Sacramento,
      CA 95814

    Attention:
      General Counsel

    


    
      	 	
              Re:

            	
              Warranty
                Notice

            


    

     

    Ladies
      and Gentlemen:

     

    Reference
      is made to the Sponsor Support Agreement, dated as of [_________],
      2007
      (the "Agreement"),
      among
      PACIFIC ETHANOL HOLDING CO. LLC, a Delaware limited liability company (the
      "Borrowers'
      Agent"),
      PACIFIC ETHANOL, INC., a Delaware corporation (the "Sponsor")
      and
      WESTLB AG, NEW YORK BRANCH, in
      its
      capacity as administrative agent for the Lenders (together with its successors,
      designees and assigns in such capacity, the "Administrative
      Agent").
      Capitalized terms used and not otherwise defined in this Warranty Notice have
      the meanings provided in the Agreement.

     

    In
      accordance with Section 3.03(a) of the Agreement, the undersigned Borrower
      has determined that a Warranty Claim exists with respect to the [Boardman
      Plant] [Stockton
      Plant] [Brawley
      Plant] [Burley
      Plant].
      

     

    [Such
      Warranty Claim is a Warranty Performance Claim and relates to
      [insert description]. The
      Sponsor is hereby instructed to perform, or cause to be performed, all Warranty
      Work related to this Warranty Claim in accordance with Section 3.04(a) of the
      Agreement.] [To
      be included for Warranty Performance Claims.]

     

    [Such
      Warranty Claim is a Warranty Payment Claim in the amount of [____]
      Dollars
      ($[_____])
      (the
      "Warranty
      Payment Amount")
      and
      relates to
      [insert description]. The
      Sponsor is hereby instructed to fund the Warranty Payment Amount in the form
      of
      a Sponsor Warranty Payment directly to the [Boardman] [Stockton] [Brawley] [Burley]
      Warranty
      Account on or before [insert
      date that is three (3) Business Days from the date of this
      notice]
      (or, if
      later, the Business Day immediately following the Independent Engineer's
      approval of this Warranty Notice) in accordance with Section 3.05(a) of the
      Agreement.] [To
      be included for Warranty Payment Claims.]

     

    (remainder
      of this page intentionally left blank)

     


    
      
        B2-1

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


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

     

     

    
      

        
          	 	
                  [_____________________],

                
	 	
                  as
                    Borrower

                   

                
	 	
                   

                  By:
                    

                	 
	 	
                   

                	
                  Name:

                
	 	
                   

                   

                	
                  Title:

                   

                


        

      

       

      


      


      [Accepted
        and Approved as of

      ___________.
        20___ by:

      


      [_____________________________],

      as
        the
        Independent Engineer

       

      


       

      By:
        _____________________

      Name:

       

      Title:

       

       

      By:
        _____________________

      Name:

       

      Title:]

       

      [Note:
        IE Signature block to be included if required pursuant to Section
        3.03(a)]

    

     

     

     

    B2-2