paceth_10q-ex1002.htm


    Exhibit
10.2

     

    
      

    


    
      DEBTOR-IN-POSSESSION
CREDIT AGREEMENT

      


    

    dated
as of May 19, 2009

     

    among

     

    PACIFIC
ETHANOL HOLDING CO. LLC,

    PACIFIC
ETHANOL MADERA LLC,

    PACIFIC
ETHANOL COLUMBIA, LLC,

    PACIFIC
ETHANOL STOCKTON, LLC, and

    PACIFIC
ETHANOL MAGIC VALLEY, LLC,

    as
Borrowers,

     

    PACIFIC
ETHANOL HOLDING CO. LLC,

    as
Borrower Agent,

     

    THE
LENDERS REFERRED TO HEREIN,

     

    WESTLB
AG, NEW YORK BRANCH,

    as
Administrative Agent for the Lenders,

     

    WESTLB
AG, NEW YORK BRANCH,

    as
Collateral Agent for the Senior Secured Parties,

     

    and

     

    AMARILLO
NATIONAL BANK,

    as
Accounts Bank

     

    
      


       

    

    



    
      
        
           

        

         


      

      
         


        
          

        

      

      
         


      

    


    TABLE OF
CONTENTS

     

    
      
        	 
      	 	 
      	
                Page

              
	 	 	 	 
	
                ARTICLE
      I

              	DEFINITIONS
      AND INTERPRETATION	
                2

              
	 	 	 	 
	
                Section
      1.01

              	 	
                Defined
      Terms

              	
                2

              
	
                Section
      1.02

              	 	
                Principles
      of Interpretation

              	
                2

              
	
                Section
      1.03

              	 	
                UCC
      Terms

              	
                3

              
	
                Section
      1.04

              	 	
                Accounting
      and Financial Determinations

              	
                3

              
	
                Section
      1.05

              	 	
                Joint
      and Several

              	
                3

              
	 	 	 	 
	
                ARTICLE
      II

              	COMMITMENTS
      AND BORROWING	
                3

              
	 	 	 	 
	
                Section
      2.01

              	 	
                Revolving
      Loans

              	
                3

              
	
                Section
      2.02

              	 	
                Roll
      Up Loans

              	
                4

              
	
                Section
      2.03

              	 	
                Notice
      of Fundings

              	
                4

              
	
                Section
      2.04

              	 	
                Funding
      of Loans

              	
                4

              
	
                Section
      2.05

              	 	
                Evidence
      of Indebtedness

              	
                5

              
	
                Section
      2.06

              	 	
                Termination
      or Reduction of Commitments

              	
                6

              
	
                Section
      2.07

              	 	
                Defaulting
      Lenders

              	
                6

              
	
                Section
      2.08

              	 	
                Security
      Interest

              	
                7

              
	
                Section
      2.09

              	 	
                Super-Priority
      Nature of Obligations.

              	
                7

              
	
                Section
      2.10

              	 	
                Payment
      of Obligations.

              	
                8

              
	
                Section
      2.11

              	 	
                Liens.

              	
                8

              
	
                Section
      2.12

              	 	
                No
      Discharge; Survival of Claims.

              	
                8

              
	
                Section
      2.13

              	 	
                Release.

              	
                9

              
	
                Section
      2.14

              	 	
                Waiver
      of Priming Rights.

              	
                9

              
	
                Section
      2.15

              	 	
                Priority
      of Claim.

              	
                9

              
	 	 	 	 
	
                ARTICLE
      III

              	REPAYMENTS,
      PREPAYMENTS, INTEREST AND FEES	
                10

              
	 	 	 	 
	
                Section
      3.01

              	 	
                Repayment
      of Loans

              	
                10

              
	
                Section
      3.02

              	 	
                Interest
      Payment Dates

              	
                10

              
	
                Section
      3.03

              	 	
                Interest
      Rates

              	
                10

              
	
                Section
      3.04

              	 	
                Default
      Interest Rate

              	
                11

              
	
                Section
      3.05

              	 	
                Interest
      Rate Determination

              	
                12

              
	
                Section
      3.06

              	 	
                Computation
      of Interest and Fees

              	
                12

              
	
                Section
      3.07

              	 	
                Optional
      Prepayment

              	
                12

              
	
                Section
      3.08

              	 	
                Mandatory
      Prepayment

              	
                13

              
	
                Section
      3.09

              	 	
                Time
      and Place of Payments

              	
                14

              
	
                Section
      3.10

              	 	
                Fundings
      and Payments Generally

              	
                15

              
	
                Section
      3.11

              	 	
                Fees

              	
                15

              
	
                Section
      3.12

              	 	
                Pro
      rata Treatment

              	
                15

              
	
                Section
      3.13

              	 	
                Sharing
      of Payments

              	
                16

              


         

        
          
            
            

          

          
            i

            
              

            

          

          
            
            

          

        

         

        	
                ARTICLE
      IV

              	EURODOLLAR
      RATE AND TAX PROVISIONS	
                
                  17

                

              
	 	 	 	 
	
                Section
      4.01

              	 	
                Eurodollar
      Rate Lending Unlawful

              	
                
                  17

                

              
	
                Section
      4.02

              	 	
                Inability
      to Determine Eurodollar Rates

              	
                17

              
	
                Section
      4.03

              	 	
                Increased
      Eurodollar Loan Costs

              	
                
                  18

                

              
	
                Section
      4.04

              	 	
                Obligation
      to Mitigate

              	
                18

              
	
                Section
      4.05

              	 	
                Funding
      Losses

              	
                18

              
	
                Section
      4.06

              	 	
                Increased
      Capital Costs

              	
                19

              
	
                Section
      4.07

              	 	
                Taxes.

              	
                19

              
	 	 	 	 
	
                ARTICLE
      V

              	REPRESENTATIONS
      AND WARRANTIES	
                20

              
	 	 	 	 
	
                Section
      5.01

              	 	
                Organization;
      Power and Compliance with Law

              	
                21

              
	
                Section
      5.02

              	 	
                Due
      Authorization; Non-Contravention

              	
                21

              
	
                Section
      5.03

              	 	
                Governmental
      Approvals.

              	
                21

              
	
                Section
      5.04

              	 	
                Investment
      Company Act

              	
                22

              
	
                Section
      5.05

              	 	
                Validity
      of Financing Documents

              	
                22

              
	
                Section
      5.06

              	 	
                Financial
      Information

              	
                22

              
	
                Section
      5.07

              	 	
                Project
      Compliance

              	
                22

              
	
                Section
      5.08

              	 	
                Litigation

              	
                22

              
	
                Section
      5.09

              	 	
                Sole
      Purpose Nature; Business

              	
                23

              
	
                Section
      5.10

              	 	
                Contracts.

              	
                23

              
	
                Section
      5.11

              	 	
                Collateral

              	
                23

              
	
                Section
      5.12

              	 	
                Ownership
      of Properties

              	
                24

              
	
                Section
      5.13

              	 	
                Taxes

              	
                24

              
	
                Section
      5.14

              	 	
                Patents,
      Trademarks, Etc

              	
                25

              
	
                Section
      5.15

              	 	
                ERISA
      Plans

              	
                25

              
	
                Section
      5.16

              	 	
                Property
      Rights, Utilities, Supplies Etc

              	
                25

              
	
                Section
      5.17

              	 	
                No
      Defaults

              	
                25

              
	
                Section
      5.18

              	 	
                Environmental
      Warranties.

              	
                25

              
	
                Section
      5.19

              	 	
                Regulations
      T, U and X

              	
                26

              
	
                Section
      5.20

              	 	
                Accuracy
      of Information

              	
                26

              
	
                Section
      5.21

              	 	
                Indebtedness

              	
                27

              
	
                Section
      5.22

              	 	
                Required
      LLC Provisions

              	
                27

              
	
                Section
      5.23

              	 	
                Subsidiaries

              	
                27

              
	
                Section
      5.24

              	 	
                Foreign
      Assets Control Regulations, Etc

              	
                27

              
	
                Section
      5.25

              	 	
                Employment
      Matters

              	
                27

              
	
                Section
      5.26

              	 	
                Legal
      Name and Place of Business

              	
                
                  28

                

              
	
                Section
      5.27

              	 	
                No
      Brokers

              	
                28

              
	
                Section
      5.28

              	 	
                Insurance

              	
                28

              
	
                Section
      5.29

              	 	
                Accounts

              	
                28

              
	
                Section
      5.30

              	 	
                SEC
      Compliance

              	
                29

              
	
                Section
      5.31

              	 	
                Reorganization
      Matters.

              	
                29

              
	 	 	 	 
	
                ARTICLE
      VI

              	CONDITIONS
      PRECEDENT	
                30

              
	 	 	 	 
	
                Section
      6.01

              	 	
                Conditions
      to Closing

              	
                
                  30

                

              
	
                Section
      6.02

              	 	
                Conditions
      to All Fundings

              	
                33

              
	 	 	 	 
	
                ARTICLE
      VII

              	 	
                COVENANTS

              	
                35

              
	 	 	 	 
	
                Section
      7.01

              	 	
                Affirmative
      Covenants

              	
                35

              
	
                Section
      7.02

              	 	
                Negative
      Covenants

              	
                40

              
	
                Section
      7.03

              	 	
                Reporting
      Requirements

              	
                47

              


         

        
          
            
            

          

          
            ii

            
              

            

          

          
            
            

          

        

         

        	
                ARTICLE
      VIII

              	[INTENTIONALLY
      OMITTED]	
                51

              
	 	 	 	 
	
                ARTICLE
      IX

              	DEFAULT
      AND ENFORCEMENT	
                51

              
	 	 	 	 
	
                Section
      9.01

              	 	
                Events
      of Default

              	
                51

              
	
                Section
      9.02

              	 	
                Action
      Upon Event of Default.

              	
                57

              
	
                Section
      9.03

              	 	
                Remedies

              	
                58

              
	
                Section
      9.04

              	 	
                Minimum
      Notice Period

              	
                60

              
	
                Section
      9.05

              	 	
                Sale
      of Collateral

              	
                60

              
	
                Section
      9.06

              	 	
                Actions
      Taken by Collateral Agent

              	
                61

              
	
                Section
      9.07

              	 	
                Private
      Sales

              	
                61

              
	
                Section
      9.08

              	 	
                Access
      to Land

              	
                61

              
	
                Section
      9.09

              	 	
                Compliance
      With Limitations and Restrictions

              	
                61

              
	
                Section
      9.10

              	 	
                No
      Impairment of Remedies

              	
                62

              
	
                Section
      9.11

              	 	
                Attorney-In-Fact

              	
                62

              
	
                Section
      9.12

              	 	
                Application
      of Proceeds

              	
                
                  62

                

              
	 	 	 	 
	
                ARTICLE
      X

              	THE
      AGENTS	
                63

              
	 	 	 	 
	
                Section
      10.01

              	 	
                Appointment
      and Authority

              	
                63

              
	
                Section
      10.02

              	 	
                Rights
      as a Lender

              	
                65

              
	
                Section
      10.03

              	 	
                Exculpatory
      Provisions

              	
                65

              
	
                Section
      10.04

              	 	
                Reliance
      by Agents

              	
                66

              
	
                Section
      10.05

              	 	
                Delegation
      of Duties

              	
                66

              
	
                Section
      10.06

              	 	
                Resignation
      or Removal of Agent

              	
                66

              
	
                Section
      10.07

              	 	
                No
      Amendment to Duties of Agent Without Consent

              	
                67

              
	
                Section
      10.08

              	 	
                Non-Reliance
      on Agent and Other Lenders

              	
                68

              
	
                Section
      10.09

              	 	
                Collateral
      Agent May File Proofs of Claim

              	
                68

              
	
                Section
      10.10

              	 	
                Collateral
      Matters

              	
                69

              
	
                Section
      10.11

              	 	
                Copies

              	
                69

              
	 	 	 	 
	
                ARTICLE
      XI

              	MISCELLANEOUS
      PROVISIONS	
                69

              
	 	 	 	 
	
                Section
      11.01

              	 	
                Amendments,
      Etc

              	
                69

              
	
                Section
      11.02

              	 	
                Applicable
      Law; Jurisdiction; Etc

              	
                71

              
	
                Section
      11.03

              	 	
                Assignments

              	
                72

              
	
                Section
      11.04

              	 	
                Benefits
      of Agreement

              	
                75

              
	
                Section
      11.05

              	 	
                Borrower
      Agent

              	
                75

              
	
                Section
      11.06

              	 	
                Consultants

              	
                76

              
	
                Section
      11.07

              	 	
                Costs
      and Expenses

              	
                76

              
	
                Section
      11.08

              	 	
                Counterparts;
      Effectiveness

              	
                76

              
	
                Section
      11.09

              	 	
                Indemnification
      by the Borrowers

              	
                77

              
	
                Section
      11.10

              	 	
                Interest
      Rate Limitation

              	
                78

              
	
                Section
      11.11

              	 	
                No
      Waiver; Cumulative Remedies

              	
                78

              
	
                Section
      11.12

              	 	
                Notices
      and Other Communications

              	
                79

              
	
                Section
      11.13

              	 	
                Patriot
      Act Notice

              	
                81

              
	
                Section
      11.14

              	 	
                Marshalling;
      Payments Set Aside

              	
                81

              
	
                Section
      11.15

              	 	
                Right
      of Setoff

              	
                82

              
	
                Section
      11.16

              	 	
                Severability

              	
                82

              
	
                Section
      11.17

              	 	
                Survival

              	
                82

              
	
                Section
      11.18

              	 	
                Treatment
      of Certain Information; Confidentiality

              	
                83

              
	
                Section
      11.19

              	 	
                Waiver
      of Consequential Damages, Etc

              	
                84

              
	
                Section
      11.20

              	 	
                Waiver
      of Litigation Payments

              	
                84

              
	
                Section
      11.21

              	 	
                Section
      552(b)

              	
                84

              


      

    

    


    
      
        
        

      

      
        iii

        
          

        

      

      
        
        

      

    

    


    
    

    
      


      
        	
                SCHEDULES

              	 
      
	 
      	 
      
	
                Schedule
      1.01

              	
                 Commitments

              
	
                Schedule
      2.01

              	
                 Form
      of Interim Order

              
	
                Schedule
      5.07

              	
                 Project
      Compliance

              
	
                Schedule
      5.08

              	
                 Litigation

              
	
                Schedule
      5.10

              	
                 Contracts

              
	
                Schedule
      5.18(a)(i)

              	
                 Environmental
      Warranties

              
	
                Schedule
      5.18(d)(ii)

              	
                 Underground
      Storage Tanks

              
	
                Schedule
      5.26

              	
                 Legal
      Names and Places of Business

              
	
                Schedule
      5.27

              	
                 Broker
      Fees

              
	
                Schedule
      5.29

              	
                 Local
      Accounts

              
	
                Schedule
      6.01(n)

              	
                 Initial
      DIP Budget

              
	
                Schedule
      7.01(h)

              	
                 Insurance

              
	
                Schedule
      11.12

              	
                 Notice
      Information

              
	 
      	 
      


      

      


      


      
        	
                EXHIBITS

              	 
      
	 
      	 
      
	
                Exhibit
      A

              	
                 Defined
      Terms

              
	
                Exhibit
      2.03

              	
                 Form
      of Funding Notice

              
	
                Exhibit
      2.05

              	
                 Form
      of Note

              
	
                Exhibit
      3.03

              	
                 Form
      of Interest Period Notice

              
	
                Exhibit
      4.07

              	
                 Form
      of Non-U.S. Lender Statement

              
	
                Exhibit
      11.03

              	
                 Form
      of Lender Assignment
Agreement

              


      

    

    
 

    
      
         


      

      
        iv

        
          

        

      

      
         


      

    


    This
DEBTOR-IN-POSSESSION CREDIT AGREEMENT (this “Agreement”), dated as
of May 19, 2009, is by and among Pacific Ethanol Holding Co. LLC, a Delaware
limited liability company and a debtor-in-possession under Chapter 11 of the
Bankruptcy Code (as defined below) (“Pacific Holding”),
Pacific Ethanol Madera LLC, a Delaware limited liability company and a
debtor-in-possession under Chapter 11 of the Bankruptcy Code (“Madera”), Pacific
Ethanol Columbia, LLC, a Delaware limited liability company and a
debtor-in-possession under Chapter 11 of the Bankruptcy Code (“Boardman”), Pacific
Ethanol Stockton, LLC, a Delaware limited liability company and a
debtor-in-possession under Chapter 11 of the Bankruptcy Code (“Stockton”), and
Pacific Ethanol Magic Valley, LLC, a Delaware limited liability company and a
debtor-in-possession under Chapter 11 of the Bankruptcy Code (“Burley” and, together
with Pacific Holding, Madera, Boardman and Stockton, the “Borrowers”), Pacific
Holding, as Borrower Agent, each of the Lenders from time to time party hereto,
WESTLB AG, NEW YORK BRANCH, as administrative agent for the Lenders, WESTLB AG,
NEW YORK BRANCH as collateral agent for the Senior Secured Parties and AMARILLO
NATIONAL BANK, as accounts bank.

     

    RECITALS

     

    WHEREAS, on May 17, 2009
(the “Petition
Date”), each Borrower (collectively, the “Debtors”) commenced
Chapter 11 Case Nos. 09-11713 through 09-11717 (each a “Chapter 11 Case” or a
“Case” and collectively, the “Chapter 11 Cases” or
the “Cases”) by filing voluntary petitions for reorganization under the
Bankruptcy Code with the United States Bankruptcy Court for the District of
Delaware (the “Bankruptcy
Court”).  The Borrowers continue to operate their businesses
and manage their properties as debtors and debtors-in-possession pursuant to
Sections 1107(a) and 1108 of the Bankruptcy Code;

     

    WHEREAS, prior to the Petition
Date, certain Lenders provided financing to each Borrower pursuant to the Credit
Agreement, dated as of February 27, 2007, among each Borrower, the other parties
signatory thereto, and each such Lender (as amended, modified or supplemented
through the Petition Date, the “Pre-Petition Credit
Agreement”);

     

    WHEREAS, each Borrower has
requested that the Lenders provide a senior secured, superpriority credit
facility to the Borrowers to fund the working capital requirements of the
Borrowers and for other purposes permitted under this Agreement during the
pendency of the Chapter 11 Cases;

     

    WHEREAS, each Lender is
willing to make certain Post-Petition (as defined below) loans and other
extensions of credit to each Borrower of up to such amount upon the terms and
conditions set forth herein;

     

    WHEREAS, each Debtor has
agreed to secure all the Obligations by granting to the Collateral Agent a
security interest in and Lien upon substantially all its existing and
after-acquired personal and real property; and

     

    WHEREAS, each Borrower
acknowledges that they each will receive substantial direct and indirect
benefits by reason of the making of loans and other financial accommodations to
the Borrowers as provided in this Agreement;

     

    NOW, THEREFORE, the parties
hereto agree as follows:

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    ARTICLE
I


     

    DEFINITIONS
AND INTERPRETATION

     

    Section
1.01  Defined
Terms.  Capitalized terms used in this Agreement, including its
preamble and recitals, shall, except as otherwise defined herein or where the
context otherwise requires, have the meanings provided in Exhibit
A.

     

    Section
1.02  Principles of
Interpretation.  a)  Unless otherwise defined or the
context otherwise requires, terms for which meanings are provided in this
Agreement shall have the same meanings when used in each Financing Document,
notice and other communication delivered from time to time in connection with
any Financing Document.

     

    
      (b)          
 Unless the context requires otherwise, any reference in this Agreement to
any Transaction Document shall mean such Transaction Document and all schedules,
exhibits and attachments thereto.

       

      (c)          
 All the agreements, contracts or documents defined or referred to herein
shall mean such agreements, contracts or documents as the same may from time to
time be supplemented or amended or the terms thereof waived or modified to the
extent permitted by, and in accordance with, the terms thereof and this
Agreement, and shall disregard any supplement, amendment or waiver made in
breach of this Agreement.

       

      (d)            Any
reference in any Financing Document relating to a Default or an Event of Default
that has occurred and is continuing (or words of similar effect) shall be
understood to mean that (i) in the case of a Default only, such Default has not
been cured or remedied, or has not been waived by the Required Lenders, before
becoming an Event of Default and (ii) in the case of an Event of Default, such
Event of Default has not been cured or remedied or has not been waived by the
Required Lenders.

       

      (e)      
     The term “knowledge” in relation to a Borrower,
and any other similar expressions, shall mean knowledge of such Borrower after
due inquiry.

       

      (f)          
  Defined terms in this Agreement shall include in the singular number
the plural and in the plural number the singular.

       

      (g)       
    The words “herein,” “hereof” and “hereunder” and words
of similar import when used in this Agreement shall, unless otherwise expressly
specified, refer to this Agreement as a whole and not to any particular
provision of this Agreement and all references to Articles, Sections, Exhibits
and Schedules shall be references to Articles, Sections, Exhibits and Schedules
of this Agreement, unless otherwise specified.

       

      (h)         
  The words “include,” “includes” and “including” are not
limiting.

       

      (i)           
 The word “or” is not exclusive.

       

      (j)          
  Any reference to any Person shall include its permitted successors
and permitted assigns in the capacity indicated, and in the case of any
Governmental Authority, any Person succeeding to its functions and
capacities.

       

    

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

     

    Section
1.03  UCC
Terms.  Unless otherwise defined herein, terms used herein that
are defined in the UCC shall have the respective meanings given to those terms
in the UCC.

     

    Section
1.04  Accounting and Financial
Determinations.  Unless otherwise specified, all accounting
terms used in any Financing Document shall be interpreted, all accounting
determinations and computations hereunder or thereunder shall be made, and all
financial statements required to be delivered hereunder or thereunder shall be
prepared, in accordance with GAAP.

     

    Section
1.05  Joint and
Several.    The Obligations of each Borrower under
this Agreement and each other Financing Document to which any Borrower is a
party shall constitute the joint and several obligations of all Borrowers. All
representations, warranties, undertakings, agreements and obligations of each
Borrower expressed or implied in this Agreement or any other Financing Document
shall, unless the context requires otherwise, be deemed to be made, given or
assumed by the Borrowers jointly and severally.

     

    ARTICLE
II


     

    COMMITMENTS
AND BORROWING

     

    On the
terms, subject to the conditions and relying upon the representations and
warranties herein set forth:

     

    Section
2.01  Revolving
Loans.  i)  Each Revolving Lender agrees, severally
and not jointly, on the terms and conditions of this Agreement, to make loans
(each such loan, a “Revolving Loan”) to
the Borrowers, from time to time but not more frequently than six (6) times each
calendar month, until the last Business Day immediately preceding the Maturity
Date, in an aggregate principal amount from time to time outstanding not in
excess of (i) during the period from the date of entry of the Interim Order by
the Bankruptcy Court through the date of entry of the Final Order by the
Bankruptcy Court, the product of (A) seven million Dollars ($7,000,000) and (B)
the Revolving Loan Commitment Percentage of such Revolving Lender and (ii) from
the date of entry of the Final Order by the Bankruptcy Court to the Maturity
Date, the Revolving Loan Commitment of such Revolving Lender.

     

    (b)          
 Each Funding of Revolving Loans shall be in the minimum amount of one
hundred thousand Dollars ($100,000).

     

    (c)          
Proceeds of each Revolving Loan shall be deposited into the Revenue Account (or
as otherwise agreed by the Administrative Agent and specified in the relevant
Funding Notice) and applied solely in accordance with this Agreement and shall
be used solely in accordance with the then-current DIP Budget.

     

    (d)          
 Within the limits set forth in Section 2.01(a), the
Borrowers may pay or prepay and reborrow Revolving Loans.

     

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

     

    Section
2.02  Roll Up
Loans.  ii)  Concurrent
with the funding by a Revolving Lender of a Revolving Loan, an amount of such
Lender's (or an Affiliate of such Lender) Pre-Petition Term Loan equal to 150%
of the amount of such Revolving Loan will be converted into a roll up loan
(each  a “Roll Up Loan”); provided that (i) repayment of a Revolving Loan will not reduce
the amount of the outstanding Roll Up Loans and (ii) the aggregate Roll Up Loans
will not exceed the Aggregate Roll Up Commitment.

     

    (b)           Each
party hereto acknowledges that pursuant to Section 2.02(b) the
amount of Pre-Petition Term Loans held by each Roll Up Lender (or Affiliate of
such Roll Up Lender) shall be reduced by an amount equal to the amount of Roll
Up Loans made by such Roll Up Lender.

     

    (c)         
  All Roll Up Loans shall have the
benefit of Section 364(e) of the Bankruptcy Code.

     

    (d)           Roll
Up Loans paid or prepaid may not be reborrowed.

     

    Section
2.03  Notice of
Fundings.  iii)  From time to time, but not more
frequently than six (6) times each calendar month, the Borrowers may propose a
Funding by delivering to the Administrative Agent a properly completed Funding
Notice not later than 12:00 noon, New York City time, five (5) Business Days
prior to the proposed Funding Date; provided, however, that such
prior notice period shall not apply to the initial Funding.  Each
Funding Notice delivered pursuant to this Section 2.03 shall be
irrevocable and shall refer to this Agreement and specify (i) whether such
Funding is requested to be of Eurodollar Loans and/or Base Rate Loans, (ii) the
requested Funding Date (which shall be a Business Day), and (iii) the amount of
such requested Funding.

     

    (b)          The
Administrative Agent shall promptly advise each Lender of any Funding Notice
given pursuant to this Section 2.03, and of
each such Lender’s portion of the requested Funding.

     

    Section
2.04  Funding of
Loans.  iv)  Subject to Section 2.04(d), each
Funding shall consist of Revolving Loans made by the Lenders ratably in
accordance with their respective applicable Commitment Percentages and shall
consist of Eurodollar Loans or Base Rate Loans as the Borrowers may request
pursuant to Section
2.03 (Notice
of Fundings); provided, however, that the
failure of any Lender to make any Revolving Loan shall not in itself relieve any
other Lender of its obligation to lend hereunder (it being understood, however,
that no Lender shall be responsible for the failure of any other Lender to make
any Revolving Loan required to be made by such other Lender).

     

    (b)           Subject
to Section 4.04
(Obligation
to Mitigate), each Lender may
(without relieving any Borrower of its obligation to repay a Revolving Loan in
accordance with the terms of this Agreement and the Notes) at its option fulfill
its Commitment with respect to any such Revolving Loan by causing any domestic
or foreign branch or Affiliate of such Lender to make such Revolving Loan; provided that the use
of such domestic or foreign branch does not result in any increased costs
payable by any of the Borrowers hereunder.

     

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

     

    (c)           Subject
to Section
2.04(d), each Lender shall make a Revolving Loan in the amount of its
applicable Commitment Percentage of each Funding hereunder on the proposed
Funding Date by wire transfer of immediately available funds to the
Administrative Agent, not later than 11:00 a.m. New York City time, and the
Administrative Agent shall deposit the amounts so received into the Revenue
Account; provided, that
if a Funding does not occur on the proposed Funding Date because any condition
precedent to such requested Funding herein specified has not been met, the
Administrative Agent shall return the amounts so received to the respective
Lenders without interest.

     

    (d)           Unless
the Administrative Agent has been notified in writing by any Lender prior to a
proposed Funding Date that such Lender will not make available to the
Administrative Agent its portion of the Funding proposed to be made on such
date, the Administrative Agent may assume that such Lender has made such amounts
available to the Administrative Agent on such date and the Administrative Agent
in its sole discretion may, in reliance upon such assumption, make available to
the Borrowers a corresponding amount.  If such corresponding amount is
not in fact made available to the Administrative Agent by such Lender and the
Administrative Agent has made such amount available to the Borrowers, the
Administrative Agent shall be entitled to recover such corresponding amount on
demand from such Lender and, if such Lender pays such amount (together with the
interest noted below), then the amount so paid shall constitute such Lender’s
Revolving Loan included in such Funding.  If such Lender does not pay
such corresponding amount forthwith upon the Administrative Agent’s demand, the
Administrative Agent shall promptly notify the Borrowers and the Borrowers shall
immediately repay such corresponding amount to the Administrative
Agent.  The Administrative Agent shall also be entitled to recover
from such Lender or the Borrowers, as the case may be, interest on such
corresponding amount in respect of each day from the date such corresponding
amount was made available by the Administrative Agent to the Borrowers to the
date such corresponding amount is recovered by the Administrative Agent, at an
interest rate per annum
equal to (i) in the case of a payment made by such Lender, the greater of the
Federal Funds Effective Rate and a rate determined by the Administrative Agent
in accordance with banking industry rules on interbank compensation and (ii) in
the case of a payment made by the Borrowers, the Base Rate plus the Applicable
Margin.  Nothing herein shall be deemed to relieve any Lender from its
obligation to fulfill its commitment hereunder.  Notwithstanding
anything to the contrary in this Agreement or any other Financing Document, the
Administrative Agent may, with prior notice to the Borrowers, apply all funds
and proceeds of Collateral available for the payment of any Obligation to repay
any amount owing by any Lender to the Administrative Agent as a result of such
Lender’s failure to fund its applicable share of any Funding
hereunder.  A notice of the Administrative Agent to any Lender or the
Borrowers with respect to any amounts owing under this Section 2.04(d) shall
be conclusive, absent manifest error.

     

    Section
2.05  Evidence of
Indebtedness.  v)  Each Loan made by each Lender
shall be evidenced by one or more accounts or records maintained by such Lender
and by the Administrative Agent in the ordinary course of business, including
the Register for the recordation of the Loans maintained by the Administrative
Agent in accordance with the provisions of Section 11.03(c)
(Assignments).  The
accounts or records maintained by the Administrative Agent and each Lender shall
be conclusive evidence, absent manifest error, of the amount of the Loans made
by the Lenders to the Borrowers and the interest and payments
thereon.  Any failure to so record or any error in doing so shall not,
however, limit or otherwise affect the obligation of the Borrowers hereunder to
pay any amount owing with respect to the Obligations.  In the event of
any conflict between the accounts and records maintained by any Lender and the
accounts and records of the Administrative Agent in respect of such matters, the
accounts and records of the Administrative Agent shall control in the absence of
manifest error.

     

    (b)           The
Borrowers agree that in addition to the Register, the Loans made by each Lender
shall be evidenced, in each case when requested by a Lender, by a Note or Notes
duly executed on behalf of each Borrower, dated the Closing Date (or, if later,
the date of any such request) payable to the order of such Lender in a principal
amount equal to such Lender’s Revolving Loan Commitment or Roll Up Loan
Commitment, as applicable.  Each Lender may attach schedules to its
Note and endorse thereon the date, amount and maturity of its Loan and payments
with respect thereto.

     

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    Section
2.06  Termination or Reduction of
Commitments.  vi)  Any Commitments shall be
automatically and permanently terminated on the Maturity Date.

     

    (b)           Any
unused Commitments shall be terminated upon the occurrence of an Event of
Default if and to the extent required pursuant to Section 9.02 (Action
Upon Event of Default) in accordance with
the terms thereof.

     

    (c)           The
Aggregate Commitment shall be automatically reduced to the extent and in the
amount of any prepayment of the Loans pursuant to Section 3.08
(Mandatory Prepayment) . 

     

    Section
2.07  Defaulting
Lenders.  Anything contained herein to the contrary
notwithstanding, in the event that any Lender, other than at the direction or
request of any regulatory agency or authority or due to a temporary disruption
in the financial markets generally, defaults (a “Defaulting Lender”)
in its obligation to fund (a “Funding Default”) any
Loan (in each case, a “Defaulted Loan”),
then (i) during any Default Period with respect to such Defaulting Lender, such
Defaulting Lender shall be a Non-Voting Lender; and (ii) to the extent permitted
by applicable law, during any Default Period and until such time as the Default
Excess with respect to such Defaulting Lender shall have been reduced to zero,
(A) any voluntary prepayment of the Loans shall be applied to the outstanding
Loans of Lenders other than Defaulting Lenders prior to the outstanding Loans of
the Defaulting Lenders, (B) any mandatory prepayment of the Loans shall be
applied to the outstanding Loans of Lenders other than Defaulting Lenders prior
to the outstanding Loans of the Defaulting Lenders, (C) such Defaulting Lender
shall not be entitled to receive any Commitment Fee pursuant to Section 3.11 (Fees) with respect to
such Defaulting Lender’s Commitment; and (D) availability of Loans pursuant to
Section 2.01(a)
(Loans) shall, as at any
date of determination, be calculated as if such Defaulting Lender had funded all
Defaulted Loans of such Defaulting Lender. No Commitment of any Lender shall be
increased or otherwise affected, and, except as otherwise expressly provided in
this Section
2.07, performance by the Borrowers of their obligations hereunder and the
other Financing Documents shall not be excused or otherwise modified as a result
of any Funding Default or the operation of this Section 2.07. The
rights and remedies against a Defaulting Lender under this Section 2.07 are in
addition to other rights and remedies which the Borrowers may have against such
Defaulting Lender with respect to any Funding Default and which the
Administrative Agent or any Lender may have against such Defaulting Lender with
respect to any Funding Default.

     

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

     

    Section
2.08  Security
Interest.  b)  In order to supplement the Orders
without in any way diminishing or limiting the effect of the Orders or the
security interest, pledge, lien, mortgage or deed of trust granted thereunder,
to secure the timely payment in full when due (whether at stated maturity, upon
acceleration or optional or mandatory prepayment) in cash and performance in
full of all the Obligations, each Debtor does hereby collaterally assign, grant
and pledge to the Collateral Agent, for the benefit of the Collateral Agent,
each other Agent and each Lender, all the estate, right, title and interest of
such Debtor in, to and under, whether now owned or hereafter existing or
acquired, and howsoever its interest therein may arise or appear, the
Collateral.

     

    (b)           The
Liens and security interests granted hereunder shall continue to be valid and
perfected and with the specified priority without the necessity that financing
statements be filed or that any other action be taken or document or instrument
registered or delivered, under applicable non-bankruptcy law.

     

    (c)           Notwithstanding
any failure on the part of any Debtor or the Collateral Agent to perfect,
maintain, protect or enforce the Liens and security interests in the Collateral
granted hereunder, the Orders shall automatically, and without further action by
any Person, perfect such Liens and security interests against the
Collateral.

     

    Section
2.09  Super-Priority Nature of
Obligations.

     

    (a)           All
Obligations shall constitute administrative expenses of the Borrowers in the
Chapter 11 Cases, with administrative priority and senior secured status
under Sections 364(c) and 364(d) of the Bankruptcy Code.  Subject
to the Carve-Out, such administrative claim shall have priority over all other
costs and expenses of the kinds specified in, or ordered pursuant to,
Sections 105, 326, 328, 330, 331, 503(b), 506(c), 507(a), 507(b), 546(c),
726, 1113, 1114 or any other provision of the Bankruptcy Code or otherwise, and
shall at all times be senior to the rights of the Borrowers, the estates of
the Borrowers, and any successor trustee or estate representative in the
Chapter 11 Cases or any subsequent proceeding or case under the Bankruptcy
Code.

     

    (b)           All
Obligations shall at all times, subject to the Carve-Out, (i) subject to Section
364(d)(1) of the Bankruptcy Code, be secured by fully perfected first priority,
valid, binding, enforceable, non-avoidable and automatically perfected priming
security interest in and Liens upon (the “Priming Liens”) the
Collateral (as such term is defined in the Pre-Petition Credit Agreement) and
(ii) pursuant to Section 364(c)(2) of the Bankruptcy Code, be secured by fully
perfected first priority, valid, binding, enforceable, non-avoidable and
automatically perfected security interest in and liens upon the Collateral
(other than Collateral referenced in clause (i)) whether created, existing or
acquired prior or subsequent to the commencement of the Cases (the “First Liens” and,
together with the Priming Liens, the “DIP
Liens”).  The DIP Liens, and the priorities accorded to the
Obligations, shall have the priority and senior secured status afforded by
Sections 364(c) and 364(d)(l) of the Bankruptcy Code, all as more fully set
forth in the Interim Order and Final Order.

     

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

     

    (c)           The
DIP Liens under Sections 364(c)(2),(c)(3) and (d) of the Bankruptcy Code,
and the administrative claims under Section 364(c)(1) of the Bankruptcy
Code, in each case afforded the Obligations, shall also have priority over any
claims arising under Section 506(c) of the Bankruptcy Code subject and
subordinate only to the Carve-Out.

     

    Section
2.10  Payment of
Obligations.

     

    On the
Maturity Date, the Senior Secured Parties shall be entitled to immediate payment
of all outstanding Obligations without further application to or order of the
Bankruptcy Court.

     

    Section
2.11  Liens.

     

    (a)           The
Debtors covenant and agree that the DIP Facility and all Obligations will at all
times be secured by the DIP Liens as set forth in the Interim Order and the
Final Order, as applicable.

     

    (b)           The
DIP Liens on Collateral of the Debtors will not be subject to challenge and will
attach and become valid and perfected upon entry of the Interim Order without
any requirement of any further action by the Collateral Agent.  Other
than the DIP Liens, the Collateral will be free and clear of all Liens, claims
and encumbrances other than Permitted Liens.

     

    (c)           The
Orders are sufficient and conclusive evidence of the creation, validity,
perfection and priority of the DIP Liens without the necessity of filing,
recording or delivering any financing statement or other instrument or document
that may otherwise be required under the law of any jurisdiction or the taking
of any action (including entering into any deposit control agreement or
delivering original certificates representing pledged Equity Interests that
constitute “Certificated Securities” under the UCC) to validate or perfect the
DIP Liens or to entitle the Collateral Agent to the priorities granted by or
pursuant to this Agreement, any Financing Document or any of the
Orders.  Notwithstanding the foregoing, the Collateral Agent may take
any and all actions without further order of the Bankruptcy Court, and shall be
granted relief from the automatic stay, to evidence, confirm, validate or
perfect or to insure the contemplated priority of, the DIP Liens granted to the
Collateral Agent for the benefit of the Senior Secured Parties and each Debtor
shall execute and deliver to the Collateral Agent all such financing statements,
mortgages, notices or other documents and instruments as the Collateral Agent
may request in connection therewith.

     

    Section
2.12  No Discharge; Survival of
Claims.

     

    The
Borrowers agree that (i) the Obligations hereunder shall not be discharged
by the entry of an order confirming a plan of reorganization in any
Chapter 11 Case (and the Borrowers, pursuant to Section 1141(d)(4) of
the Bankruptcy Code, hereby waive any such discharge) and (ii) the
super-priority administrative claim granted pursuant to the Interim Order and
Final Order and described in Section 2.09
(Super-Priority
Nature of Obligations) and the Liens granted to the Collateral Agent
pursuant to the Interim Order and Final Order and described in Section 2.09
(Super-Priority
Nature of Obligations) shall not be affected in any manner by the entry
of an order confirming a plan of reorganization in any Chapter 11
Case.

     

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    Section
2.13  Release.

     

    The
Borrowers hereby acknowledge, effective upon entry of the Interim Order and
subject to the terms thereof, that the Borrowers have no defense, counterclaim,
offset, recoupment, cross-complaint, claim or demand of any kind or nature
whatsoever that can be asserted to reduce or eliminate all or any part of the
Borrowers’ liability to repay the Senior Secured Parties as provided in this
Agreement or any other Financing Document or to seek affirmative relief or
damages of any kind or nature from any Senior Secured Party.  Subject
to the Orders, the Borrowers, each in their own right on behalf of their
bankruptcy estates, and on behalf of all their successors, assigns, and any
Affiliates and any Person acting for and on behalf of, or claiming through them,
(collectively, the “Releasing Parties”),
hereby fully, finally and forever release and discharge  each Senior
Secured Party, its Affiliates, and their respective past and present officers,
directors, servants, agents, attorneys, assigns, heirs, parents, subsidiaries,
and each Person acting for or on behalf of any of them (collectively, the “Released Parties”) of
and from any and all past and present actions, causes of action, demands, suits,
claims, liabilities, Liens, lawsuits, adverse consequences, amounts paid in
settlement, costs, damages, debts, deficiencies, diminution in value,
disbursements, expenses, losses and other obligations of any kind or nature
whatsoever (the “Released Claims”),
whether in law, equity or otherwise (including, without limitation, those
arising under Sections 541 through 550 of the Bankruptcy Code and interest
or other carrying costs, penalties, legal, accounting and other professional
fees and expenses, and incidental, consequential and punitive damages,
including, without limitation, those payable to third parties), whether known or
unknown, fixed or contingent, direct, indirect, or derivative, asserted or
unasserted, foreseen or unforeseen, suspected or unsuspected, now existing or
which may heretofore accrue against any of the Released Parties, whether held in
a personal or representative capacity, and which are based on any act, fact,
event or omission or other matter, cause or thing occurring at or from any
time prior to and including the date hereof in any way, directly or indirectly
arising out of, connected with or relating to this Agreement, any other
Financing Document, the Interim Order, the Final Order or the transactions
contemplated hereby, and all other agreements, certificates, instruments and
other documents and statements (whether written or oral) related to any of the
foregoing.

     

    Section
2.14  Waiver of Priming
Rights.

     

    Upon the
Closing Date, and on behalf of themselves and their estates, and for so long as
any Obligations shall be outstanding, the Borrowers hereby irrevocably waive any
right, pursuant to Sections 364(c) and 364(d) of the Bankruptcy Code or
otherwise, to grant any Lien of equal or greater priority than the Liens
securing the Obligations, or to approve a claim of equal or greater priority
than the Obligations, other than with respect to adequate protection Liens
approved by order of the Bankruptcy Court in the Interim Order or the Final
Order.

     

    Section
2.15  Priority of
Claim.

     

    The
Debtors covenant and agree that the Obligations at all times will
constitute DIP Administrative Claims, subject only to the
Carve-Out.

     

     

    
      
        
        

      

      
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    ARTICLE
III


     

    REPAYMENTS,
PREPAYMENTS, INTEREST AND FEES

     

    Section
3.01  Repayment of
Loans.  The Borrowers unconditionally and irrevocably promise
to pay in full to the Administrative Agent, for the ratable account of each
Lender, the aggregate outstanding principal amount of the Loans on the Maturity
Date; provided,
that upon the effectiveness of an Approved Plan the aggregate outstanding
principal amount of the Roll Up Loans shall be payable in accordance with the
terms of such Approved Plan.

     

    Section
3.02  Interest Payment
Dates.  i)  Interest accrued on each Revolving Loan
shall be payable, without duplication:

     

    
      	
               
      

            	
              (i)

            	
              on
      the Maturity Date;

            


    

     

    
      	
               
      

            	
              (ii)

            	
              with
      respect to Eurodollar Loans, the last day of each applicable Interest
      Period or, if applicable, any date on which such Eurodollar Loan is
      converted to a Base Rate Loan;

            


    

     

    
      	
               
      

            	
              (iii)

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

            


    

     

    
      	
               
      

            	
              (iv)

            	
              with
      respect to any Revolving Loan, on any date when such Revolving Loan is
      prepaid hereunder.

            


    

     

    (b)           Interest
accrued on each Roll Up Loan shall be payable on the Maturity Date; provided,
however, that upon the effectiveness of an Approved Plan the interest accrued on
each Roll Up Loan shall be payable in accordance with the terms of such Approved
Plan.

     

    (c)           Interest
accrued on the Loans or other monetary Obligations after the date such amount is
due and payable (whether on the Maturity Date for such Loan, any Monthly Payment
Date, any Interest Payment Date, upon acceleration or otherwise) shall be
payable upon demand.

     

    (d)           Interest
hereunder shall be due and payable in accordance with the terms hereof, before
and after judgment, regardless of whether an insolvency proceeding exists in
respect of any Borrower, and to the fullest extent permitted by law, the Lenders
shall be entitled to receive post-petition interest during the pendency of an
insolvency proceeding.

     

    Section
3.03  Interest
Rates.  ii)  Pursuant to each properly delivered
Funding Notice, (i) the Eurodollar Loans shall accrue interest at a rate per annum during each
Interest Period applicable thereto equal to the sum of the Eurodollar Rate for
such Interest Period plus the Applicable Margin, (ii) each Base Rate Loan shall
accrue interest at a rate per
annum during each Monthly Period equal to the sum of the Base Rate for
such Monthly Period plus the Applicable Margin and (iii) the Roll Up Loans shall
accrue interest in accordance with the terms of the Pre-Petition Credit
Agreement applicable to the Pre-Petition Term Loans that are Base Rate Loans (as
such term is defined therein) without giving effect to any Event of Default (as
such term is defined therein).

     

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    (b)           On
or before 12:00 noon, New York City time, at least four (4) Business Days prior
to the end of each Interest Period for each Eurodollar Loan, the Borrowers
shall, and at least four (4) Business Days prior to the end of any Monthly
Period for any Base Rate Loans, the Borrowers may, deliver to the Administrative
Agent an Interest Period Notice setting forth the Borrowers’ election (i) to
continue any such Eurodollar Loan as (or convert any such Base Rate Loan to) a
Eurodollar Loan or (ii) to convert any such Eurodollar Loan to a Base Rate Loan
at the end of the then-current Interest Period; provided, that if an Event of
Default has occurred and is continuing, all Eurodollar Loans shall automatically
convert into Base Rate Loans at the end of the then-current Interest
Periods.  Upon the waiver or cure of such Event of Default, the
Borrowers shall have the option to continue such Loans as Base Rate Loans and/or
to convert such Loans to Eurodollar Loans (by delivery of an Interest Period
Notice), subject to the notice periods set forth
above.  Notwithstanding anything to the contrary, any portion of the
Loans maturing in less than one month may not be continued as, or converted to,
Eurodollar Loans and will automatically convert to Base Rate Loans at the end of
the then-current Interest Period.

     

    (c)           If
the Borrowers fail to deliver an Interest Period Notice in accordance with Section 3.03(b) with
respect to any Eurodollar Loan, such Eurodollar Loan shall automatically
continue as a Eurodollar Loan.

     

    (d)           All
Eurodollar Loans shall bear interest from and including the first day of the
applicable Interest Period to (and excluding) the last day of such Interest
Period at the interest rate determined as applicable to such Eurodollar
Loan.

     

    (e)           Notwithstanding
anything to the contrary, the Borrowers shall have, in the aggregate, no more
than  eight (8) separate Eurodollar Loans outstanding at any one
time.  For purposes of the foregoing, all Eurodollar Loans commencing
on the same day of a month (notwithstanding that such Eurodollar Loans commence
in different months) shall be considered a single Eurodollar Loan.

     

    (f)           All
Base Rate Loans shall bear interest from and including the first day of each
Monthly Period (or the day on which Eurodollar Loans are converted to Base Rate
Loans as required under Section 3.03(b) or
under Article IV
(Eurodollar
Rate and Tax Provisions)) to (and including)
the next succeeding Monthly Payment Date at the interest rate determined as
applicable to such Base Rate Loan.

     

    Section
3.04  Default Interest
Rate.  (a) If all or a portion of (i) the principal amount of
any Loan is not paid when due (whether on the Maturity Date, by acceleration or
otherwise), such overdue amount shall bear interest at a rate per annum equal to the rate
that would otherwise be applicable thereto plus two percent (2%)
or (ii) any Obligation (other than principal on the Loans) is not paid when due
(whether on the Maturity Date, by acceleration or otherwise), such overdue
amount shall bear interest at a rate per annum equal to the rate
then applicable to Base Rate Loans plus two percent (2%)
(the applicable rate in effect plus such two percent (2%) per annum, the “Default Rate”), in
each case, with respect to clauses (i) and (ii) above, from the date of such
non-payment until such amount is paid in full (after as well as before
judgment).

     

    (b) Upon
the occurrence and during the continuance of any Event of Default (other than an
Event of Default specified in Section 3.04(a)), the
Borrowers shall pay interest (after as well as before judgment) on the Loans at
a rate per annum equal to the rate then applicable to Base Rate Loans plus two percent (2%)
until such Event of Default is cured or waived.

     

    
      
        
        

      

      
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    Section
3.05  Interest Rate
Determination.  The Administrative Agent shall determine the
interest rate applicable to the Loans in accordance with the terms of this
Agreement, and shall give prompt notice to the Borrowers and the Lenders of such
determination, and its determination thereof shall be conclusive in the absence
of manifest error.

     

    Section
3.06  Computation of Interest and
Fees.  iii)  All computations of interest for Base
Rate Loans when the Base Rate is determined by WestLB’s “prime rate” shall be
made on the basis of a year of 365 or 366 days, as the case may be, and actual
days elapsed.  All computations of interest for Eurodollar Loans and
for Base Rate Loans when the Base Rate is determined by the Federal Funds
Effective Rate shall be made on the basis of a 360-day year and actual days
elapsed.

     

    (b)           Interest
shall accrue on each Loan for the day on which the Loan is made, and shall not
accrue on a Loan, or any portion thereof, for the day on which the Loan or such
portion is paid; provided, that any Loan that
is repaid on the same day on which it is made shall bear interest for one (1)
day.

     

    (c)           Each
determination by the Administrative Agent of an interest rate or fee hereunder
shall be conclusive and binding for all purposes, absent manifest
error.

     

    Section
3.07  Optional
Prepayment.  iv)  The Borrowers shall have the right
at any time, and from time to time, to prepay the Revolving Loans, in whole or
in part, upon not fewer than three (3) Business Days’ prior written notice to
the Administrative Agent.

     

    (b)           Each
notice of prepayment given by the Borrowers under this Section 3.07 shall
specify the prepayment date and the portion of the principal amount of the
Revolving Loans to be prepaid.  All prepayments under this Section 3.07 shall be
made by the Borrowers to the Administrative Agent for the account of the
applicable Revolving Lenders and shall be accompanied by accrued interest on the
principal amount being prepaid to but excluding the date of payment and by any
additional amounts required to be paid under Section 4.05 (Funding
Losses).

     

    (c)           Amounts
of principal prepaid under this Section 3.07 shall be
allocated by the Administrative Agent first, to the payment of all
costs, fees, expenses and indemnities then due and payable to the Senior Secured
Parties, including fees and expenses of attorneys and Consultants reimbursable
hereunder; second, to the
payment of all accrued and unpaid interest then due and payable on the Revolving
Loans pro rata among
the Lenders (other than any Defaulting Lender) based on their respective
outstanding principal amounts on the date of such prepayment; third, to the payment
of principal of Revolving Loans pro rata among the Lenders
(other than any Defaulting Lender) based on their respective outstanding
principal amounts on the date of such prepayment but without a reduction in the
Commitments; fourth, to the
payment of all accrued and unpaid interest then due and payable on the Revolving
Loans pro rata among the Defaulting Lenders based on their respective
outstanding principal amounts on the date of such prepayment; and fifth, to the payment
of principal of Revolving Loans pro rata among the Defaulting Lenders based on
their respective outstanding principal amounts on the date of such
prepayment.

     

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

     

    (d)           Subject
to Section 3.7 (c) first, amounts
prepaid pursuant to this Section
3.07  may be reborrowed.

     

    Section
3.08  Mandatory
Prepayment.  v)  The Borrowers shall be required to
prepay the Loans:

     

    
      	
               
      

            	
              (i)

            	
              within
      three (3) Business Days of  receipt by any Borrower of any
      Project Document Termination Payments, an amount equal to such Project
      Document Termination Payments;

            


    

     

    
      	
               
      

            	
              (ii)

            	
              within
      three (3) Business Days of receipt by any Borrower of any Condemnation
      Proceeds, an amount equal to such Condemnation
  Proceeds;

            


    

     

    
      	
               
      

            	
              (iii)

            	
              within
      three (3) Business Days of receipt by any Borrower of any Insurance
      Proceeds,  an amount equal to such Insurance
      Proceeds;

            


    

     

    
      	
               
      

            	
              (iv)

            	
              within
      three (3) Business Days of receipt by any Borrower of any Net Cash
      Proceeds (not constituting Insurance Proceeds or Condemnation Proceeds) of
      any Disposition (including the sale of all or substantially all the assets
      of the Debtors) an amount equal to such Net Cash Proceeds;
    and

            


    

     

    
      	
               
      

            	
              (v)

            	
              within
      one (1) Business Day of receipt of the Net Cash Proceeds
      derived  from the following occurrence, if at any time prior to
      the repayment in full of all Obligations, including subsequent to the
      confirmation of any reorganization plan, any of the Debtors, any trustee,
      any examiner with enlarged powers or any responsible officer subsequently
      appointed, shall incur Indebtedness in violation of the terms of the
      Interim Order, the Final Order or this
  Agreement.

            


    

     

    (b)           All
prepayments under this Section 3.08 shall be
made by the Borrowers to the Administrative Agent for the account of the Lenders
and shall be accompanied by accrued interest on the principal amount being
prepaid to but excluding the date of payment and by any additional amounts
required to be paid under Section 4.05 (Funding
Losses).

     

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    (c)           Amounts
of principal prepaid under this Section
3.08  shall be allocated by the Administrative Agent first, to the payment of all
costs, fees, expenses and indemnities then due and payable to the Senior Secured
Parties, including fees and expenses of attorneys and Consultants reimbursable
hereunder; second, to the
payment of all accrued and unpaid interest then due and payable on the Revolving
Loans pro rata among
the Lenders (other than any Defaulting Lender) based on their respective
outstanding principal amounts on the date of such prepayment; third, to the payment
of principal of Revolving Loans pro rata among the Lenders
(other than any Defaulting Lender) based on their respective outstanding
principal amounts on the date of such prepayment and a corresponding reduction
in the Revolving Loan Commitments; fourth, to the
payment of all accrued and unpaid interest then due and payable on the Revolving
Loans pro rata among
the Defaulting Lenders based on their respective outstanding principal amounts
on the date of such prepayment; fifth, to the payment
of principal of Revolving Loans pro rata among the Defaulting
Lenders based on their respective outstanding principal amounts on the date of
such prepayment; sixth, to the payment of all
accrued and unpaid interest then due and payable on the Roll Up Loans pro rata among the Lenders
(other than any Defaulting Lender) based on their respective outstanding
principal amounts on the date of such prepayment; seventh, to the
payment of principal of the Roll Up Loans pro rata among the Lenders
(other than any Defaulting Lender) based on their respective outstanding
principal amounts on the date of such prepayment and a corresponding reduction
in the Roll Up Loan Commitments; eighth, to the payment of all
accrued and unpaid interest then due and payable on the Roll Up Loans pro rata among the Defaulting
Lenders based on their respective outstanding principal amounts on the date of
such prepayment; and ninth, to the payment
of principal of the Roll Up Loans pro rata among the Defaulting
Lenders based on their respective outstanding principal amounts on the date of
such prepayment.

     

    (d)           Amounts
prepaid pursuant to this Section
3.08  may not be reborrowed.

     

    Section
3.09  Time and Place of
Payments.  vi)  The Borrowers shall make each payment
(including any payment of principal of or interest on any Loan or any Fees or
other Obligations) hereunder and under any other Financing Document without
setoff, deduction or counterclaim not later than 12:00 noon New York City time
on the date when due in Dollars in immediately available funds to the
Administrative Agent at the following account:  JPMorgan Chase Bank -
NY, Acct. #920-1-060663, for the Account of WestLB AG-NY Branch, ABA
#021-000-021, Ref: Pacific Ethanol DIP Loan, Attention: Andrea Bailey, or at
such other office or account as may from time to time be specified by the
Administrative Agent to the Borrowers.  Funds received after 12:00
noon New York City time shall be deemed to have been received by the
Administrative Agent on the next succeeding Business Day.

     

    (b)           The
Administrative Agent shall promptly remit in immediately available funds to each
Senior Secured Party its share, if any, of any payments received by the
Administrative Agent for the account of such Senior Secured Party.

     

    (c)           Whenever
any payment (including any payment of principal of or interest on any Loan or
any Fees or other Obligations) hereunder or under any other Financing Document
shall become due, or otherwise would occur, on a day that is not a Business Day,
such payment shall (except as otherwise required by the proviso to the
definition of “Interest Period” with respect to Eurodollar Loans) be made on the
immediately succeeding Business Day, and such increase of time shall in such
case be included in the computation of interest or Fees, if
applicable.

     

     

    
      
        
        

      

      
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    Section
3.10  Fundings and Payments
Generally.  vii)  Unless the Administrative Agent has
received notice from the Borrowers prior to the date on which any payment is due
to the Administrative Agent for the account of the Lenders hereunder that the
Borrowers will not make such payment, the Administrative Agent may assume that
the Borrowers have made such payment on such date in accordance with this
Agreement and may, in reliance upon such assumption, distribute to the Lenders
the amount due.  If the Borrowers have not in fact made such payment,
then each of the Lenders severally agrees to repay to the Administrative Agent
forthwith on demand the amount so distributed to such Lender in immediately
available funds with interest thereon, for each day from and including the date
such amount is distributed to it to but excluding the date of payment to the
Administrative Agent, at the greater of (i) the Federal Funds Effective Rate and
(ii) a rate determined by the Administrative Agent in accordance with banking
industry rules on interbank compensation.  A notice of the
Administrative Agent to any Lender with respect to any amount owing under this
Section 3.10(a)
shall be conclusive, absent manifest error.

     

    (b)           Nothing
herein shall be deemed to obligate any Lender to obtain funds for any Loan in
any particular place or manner or to constitute a representation by any Lender
that it has obtained or will obtain funds for any Loan in any particular place
or manner.

     

    Section
3.11  Fees.  viii)  On
the date of the first Funding, the Borrowers shall pay to the Administrative
Agent, for the account of the Lenders, a facility fee equal to two percent
(2.0%) of the Aggregate Revolving Loan Commitment.

     

    (b)           On
the date of the first Funding, the Borrowers shall pay to the Administrative
Agent, for the account of the Administrative Agent, a structuring fee equal to
one percent (1.0%) of the Aggregate Revolving Loan Commitment.

     

    (c)           From
and including the date hereof until the Maturity Date, the Borrowers agree to
pay to the Administrative Agent, for the account of the Lenders, on each Monthly
Payment Date, a commitment fee (the “Commitment Fee”)
equal to two percent (2.0%) per annum on the average
daily amount by which the Aggregate Revolving Loan Commitment exceeds the
outstanding amount of the Revolving Loans during the immediately preceding
month.  All Commitment Fees shall be computed on the basis of the
actual number of days elapsed in a year of 365 or 366 days, as pro-rated for any
partial month, as applicable.

     

    (d)           All
Fees shall be paid on the dates due, in immediately available
funds.  Once paid, none of the Fees shall be refundable under any
circumstances.

     

    Section
3.12  Pro rata
Treatment.  ix)  Except as otherwise expressly
provided herein (including Section 4.01 (Eurodollar
Rate Lending Unlawful) and Section 2.07 (Defaulting
Lenders)), each Funding of
Revolving Loans, making of Roll Up Loans and reduction of commitments of any
type shall be allocated by the Administrative Agent pro rata among the Lenders in
accordance with their respective applicable Commitment Percentages.

     

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

     

    (b)           Except
as required under Section 2.07 (Defaulting
Lenders),
Section 3.07 (Optional
Prepayment), Section 3.08
(Mandatory
Prepayment) or Article IV (Eurodollar
Rate and Tax Provisions), each payment or
prepayment of principal of the Loans shall be allocated by the Administrative
Agent pro rata among
the applicable Lenders in accordance with the respective principal amounts of
their outstanding Loans of the type being repaid, each payment of interest on
the Loans shall be allocated by the Administrative Agent pro rata among the applicable
Lenders in accordance with the respective interest amounts outstanding on their
outstanding Loans of the type in respect of which interest is being paid, and
each payment of fees on the Commitments shall be allocated by the Administrative
Agent pro rata among
the applicable Lenders in accordance with their respective Commitments of the
type to which such fees relate.

     

    (c)           Each
Lender agrees that in computing such Lender’s portion of any Funding to be made
hereunder, the Administrative Agent may, in its discretion, round each Lender’s
percentage of such Funding to the next higher or lower whole Dollar
amount.

     

    Section
3.13  Sharing of
Payments.  x)  If any Lender shall obtain any payment
or other recovery (whether voluntary, involuntary, by application of setoff or
otherwise) on account of any Loan (other than pursuant to the terms of Article IV (Eurodollar
Rate and Tax Provisions)) in excess of its
pro rata share of
payments then or therewith obtained by all Lenders holding Loans of such type,
such Lender shall purchase from the other Lenders such participations in Loans
made by them as shall be necessary to cause such purchasing Lender to share the
excess payment or other recovery ratably with each of them; provided, however, that if
all or any portion of the excess payment or other recovery is thereafter
recovered from such purchasing Lender, the purchase shall be rescinded and each
Lender that has sold a participation to the purchasing Lender shall repay to the
purchasing Lender the purchase price to the ratable extent of such recovery
together with an amount equal to such selling Lender’s ratable share (according
to the proportion of (x) the amount of such selling Lender’s required repayment
to the purchasing Lender to (y) the total amount so recovered from the
purchasing Lender) of any interest or other amount paid or payable by the
purchasing Lender in respect of the total amount so recovered.  Each
Borrower agrees that any Lender so purchasing a participation from another
Lender pursuant to this Section 3.13 may, to
the fullest extent permitted by law, exercise all its rights of payment
(including pursuant to Section 11.15 (Right of
Setoff)) with respect to such participation as fully as if such Lender
were the direct creditor of the Borrowers in the amount of such
participation.

     

    (b)           If
under any applicable bankruptcy, insolvency or other similar law, any Lender
receives a secured claim in lieu of a setoff to which this Section 3.13 applies,
such Lender shall, to the extent practicable, exercise its rights in respect of
such secured claim in a manner consistent with the rights of the Lenders
entitled under this Section 3.13 to share
in the benefits of any recovery on such secured claim.

     

    


    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    ARTICLE
IV


     

    EURODOLLAR
RATE AND TAX PROVISIONS

     

    Section
4.01  Eurodollar Rate Lending
Unlawful.  xi)  If any Lender reasonably determines
(which determination shall, upon notice thereof to the Borrowers and the
Administrative Agent, be conclusive and binding on the Borrowers absent manifest
error) that the introduction of or any change in or in the interpretation of any
Law after the date hereof makes it unlawful, or any central bank or other
Governmental Authority asserts after the date hereof that it is unlawful, for
such Lender to make, maintain or fund any Loan as a Eurodollar Loan, the
obligations of such Lender to make, maintain or fund any Loan as a Eurodollar
Loan shall, upon such determination, forthwith be suspended until such Lender
shall notify the Administrative Agent that the circumstances causing such
suspension no longer exist, and all Eurodollar Loans of such Lender shall
automatically convert into Base Rate Loans at the end of the then-current
Interest Periods with respect thereto or sooner, if required by such Law or
assertion.  Upon any such conversion the Borrowers shall pay any
accrued interest on the amount so converted and, if such conversion occurs on a
day other than the last day of the then-current Interest Period for such
affected Eurodollar Loans, such Lender shall be entitled to make a request for,
and the Borrowers shall pay, compensation for breakage costs under Section 4.05 (Funding
Losses).

     

    (b)           If
such Lender notifies the Borrowers that the circumstances giving rise to the
suspension described in Section 4.01(a) no
longer apply, the Borrowers may elect (by delivering an Interest Period Notice)
to convert the principal amount of any such Base Rate Loan to a Eurodollar Loans
in accordance with this Agreement.

     

    Section
4.02  Inability to Determine
Eurodollar Rates.  xii)  In the event, and on each
occasion, that on or before the day that is three (3) Business Days prior to the
commencement of any Interest Period for any Eurodollar Loan, the Administrative
Agent shall have determined in good faith that (i) Dollar deposits in the amount
of such Loan and with an Interest Period similar to such Interest Period are not
generally available in the London interbank market, or (ii) the rate at which
such Dollar deposits are being offered will not adequately and fairly reflect
the cost to any Lender of making, maintaining or funding the principal amount of
such Loan during such Interest Period, or (iii) adequate and reasonable means do
not exist for ascertaining LIBOR, the Administrative Agent shall forthwith
notify the Borrowers and the Lenders of such determination, whereupon each such
Eurodollar Loan will automatically, on the last day of the then-existing
Interest Period for such Eurodollar Loan, convert into a Base Rate
Loan.  In the event of any such determination pursuant to Section 4.02(a)(i) or
(iii), any
Funding Notice delivered by the Borrowers shall be deemed to be a request for a
Base Rate Loan until the Administrative Agent determines that the circumstances
giving rise to such notice no longer exist.  In the event of any
determination pursuant to Section 4.02(a)(ii),
each affected Lender shall, and is hereby authorized by the Borrowers to, fund
its portion of the Loans as a Base Rate Loan.  Each determination by
the Administrative Agent hereunder shall be conclusive absent manifest
error.

     

    (b)           Upon
the Administrative Agent’s determination that the condition that was the subject
of a notice under Section 4.02(a) has
ceased, the Administrative Agent shall forthwith notify the Borrower and the
Lenders of such determination, whereupon the Borrowers may elect (by delivering
an Interest Period Notice) to convert any such Base Rate Loan to a Eurodollar
Loan on the last day of the then-current Monthly Period in accordance with this
Agreement.

     

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

    Section
4.03  Increased Eurodollar Loan
Costs.  If after the date hereof, the adoption of any
applicable Law or any change therein, or any change in the interpretation or
administration thereof by any Governmental Authority charged with the
interpretation or administration thereof, or compliance by any Lender (or its
Eurodollar Office) with any request or directive (whether or not having the
force of law) of any Governmental Authority would increase the cost (other than
with respect to Taxes, which are addressed in Section 4.07 (Taxes)) to such Lender of,
or result in any reduction in the amount of any sum receivable by such Lender
(whether of principal, interest or any other amount) in respect of, making,
maintaining or funding (or of its obligation to make, maintain or fund) the
Loans as Eurodollar Loans, then the Borrowers agree to pay to the Administrative
Agent for the account of such Lender the amount of any such increase or
reduction.  Such Lender shall promptly notify the Administrative Agent
and the Borrowers in writing of the occurrence of any such event, such notice to
state in reasonable detail the reasons (including the basis for determination)
therefor and the additional amount required to compensate fully such Lender for
such increased cost or reduced amount.  Such additional amounts shall
be payable by the Borrowers directly to such Lender within thirty (30) days of
delivery of such notice, and such notice shall be binding on the Borrowers
absent manifest error.

     

    Section
4.04  Obligation to
Mitigate.  xiii)  Each Lender agrees after it becomes
aware of the occurrence of an event that would entitle it to give notice
pursuant to Section
4.01 (Eurodollar
Rate Lending Unlawful), 4.03 (Increased
Eurodollar Loan Costs), or 4.06 (Increased
Capital Costs) or to receive
additional amounts pursuant to Section 4.07 (Taxes), such Lender shall
use reasonable efforts to make, fund or maintain its affected Loan through
another lending office if as a result thereof the increased costs would be
avoided or materially reduced or the illegality would thereby cease to exist and
if, in the opinion of such Lender, the making, funding or maintaining of such
Loan through such other lending office would not be disadvantageous to such
Lender, contrary to such Lender’s normal banking practices or violate any
applicable Law.

     

    (b)           No
change by a Lender in its Domestic Office or Eurodollar Office made for such
Lender’s convenience shall result in any increased cost to the
Borrowers.

     

    (c)           If
any Lender demands compensation pursuant to Section 4.03 (Increased
Eurodollar Loan Costs) or 4.06 (Increased
Capital Costs) with respect to any
Eurodollar Loan, the Borrowers may, at any time upon at least three (3) Business
Day’s prior notice to such Lender through the Administrative Agent, elect to
convert such Loan into a Base Rate Loan.  Thereafter, unless and until
such Lender notifies the Borrowers that the circumstances giving rise to such
notice no longer apply, all such Eurodollar Loans by such Lender shall bear
interest as Base Rate Loans.  If such Lender notifies the Borrowers
that the circumstances giving rise to such notice no longer apply, the Borrowers
may elect (by delivering an Interest Period Notice) to convert the principal
amount of each such Base Rate Loan to a Eurodollar Loans in accordance with this
Agreement.

     

    Section
4.05  Funding
Losses.  In the event that any Lender incurs any loss or
expense (including any loss or expense incurred by reason of the liquidation or
redeployment of deposits or other funds acquired by such Lender to make,
continue or maintain any portion of the principal amount of any Loan as a
Eurodollar Loan, and any customary administrative fees charged by such Lender in
connection with the foregoing, but excluding any lost profits) as a result of
(a) any conversion or repayment or prepayment of the principal amount of any
Loans on a date other than the scheduled last day of the Interest Period
applicable thereto, whether pursuant to Section 3.07 (Optional
Prepayment), 3.08 (Mandatory
Prepayment), 4.01(a) (Eurodollar
Rate Lending Unlawful) or otherwise or (b)
the Borrowers failing to make a Funding in accordance with any Funding Notice;
then, upon the written notice (including the basis for determination) of such
Lender to the Borrowers (with a copy to the Administrative Agent), the Borrowers
shall, within thirty (30) days of receipt thereof, pay to the Administrative
Agent for the account of such Lender such amount as will (in the reasonable
determination of such Lender) reimburse such Lender for such loss or
expense.  Such written notice shall be binding on the Borrowers absent
manifest error.

     

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

     

    Section
4.06  Increased Capital
Costs.  If after the date hereof any change in, or the
introduction, adoption, effectiveness, interpretation, reinterpretation or
phase-in of, any applicable Law or guideline, or request (whether or not having
the force of law) of any Governmental Authority affects the amount of capital
required to be maintained by any Lender, and such Lender reasonably determines
that the rate of return on its capital as a consequence of its Loan is reduced
to a level below that which such Lender could have achieved but for the
occurrence of any such circumstance then, in any such case upon notice from time
to time by such Lender to the Borrowers, the Borrowers shall pay within thirty
(30) days after such demand directly to such Lender additional amounts
sufficient to compensate such Lender for such reduction in rate of
return.  A statement of such Lender as to any such additional amount
or amounts (including the basis for determination) shall be binding on the
Borrowers absent manifest error.

     

    Section
4.07  Taxes.

     

    (a)           Payments Free of
Taxes.  Any and all payments by or on account of any
Obligations shall be made free and clear of, and without deduction for, any
Taxes, unless required by Law; provided that if any
Borrower shall be required to deduct any Indemnified Taxes from any such
payment, then (i) the sum payable shall be increased as necessary so that after
making all required deductions (including deductions applicable to additional
sums payable under this Section 4.07) the
Agent or Lender (as the case may be) receives an amount equal to the sum it
would have received had no such deductions been made, (ii) the Borrowers shall
make such deductions and (iii) the Borrowers shall pay the full amount deducted
to the relevant Governmental Authority in accordance with applicable
Law.

     

    (b)           Payment of Other Taxes by
the Borrowers.  In addition, the Borrowers shall timely pay any
Indemnified Taxes arising from any payment made under any Financing Document or
from the execution, delivery or enforcement of, or otherwise with respect to,
any Financing Document and not collected by withholding at the source as
contemplated by Section 4.07(a)
to the relevant Governmental Authority in accordance with applicable
Law.

     

    (c)           Indemnification by the
Borrowers.  The Borrowers shall indemnify each Agent and each
Lender, within thirty (30) days after written demand therefor, for the full
amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted
on or attributable to amounts payable under this Section 4.07) paid by
such Agent or Lender, as the case may be, and any penalties, interest, additions
to tax and reasonable expenses arising therefrom or with respect thereto (other
than those resulting from the gross negligence or willful misconduct of such
Agent or Lender), whether or not such Indemnified Taxes were correctly or
legally imposed or asserted by the relevant Governmental Authority.  A
certificate as to the amount of such payment or liability (including the basis
of determination) delivered to the Borrowers by a Lender or Agent, as the case
may be, shall be conclusive absent manifest error.

     

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

     

    (d)           Evidence of
Payments.  As soon as reasonably practicable after any payment
of Indemnified Taxes by any Borrower to a Governmental Authority, such Borrower
shall deliver to the Administrative Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy of
the return reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.

     

    (e)           Foreign
Lenders.  Each Lender (including any Participant and any other
Person to which any Lender transfers its interests in this Agreement as provided
under Section 11.03
(Assignments)) that is not a
United States Person (a “Non-U.S. Lender”)
shall deliver to the Borrowers and the Administrative Agent two (2) copies of
U.S. Internal Revenue Service Form W-8ECI, Form W-8BEN or Form W 8IMY (with
supporting documentation), or any subsequent versions thereof or successors
thereto, properly completed and duly executed by such Non-U.S. Lender claiming
complete exemption from, or a reduced rate of, U.S. federal withholding tax on
all payments of interest by the Borrowers under the Financing Documents,
together with, in the case of a Non-U.S. Lender that is relying on an exemption
pursuant to Section 871(h) or 881(c) of the Code, a statement substantially in
the form of Exhibit
4.07 certifying that such Lender is not a bank described in Section
881(c)(3)(A) of the Code.  Such forms shall be delivered by each
Non-U.S. Lender on or before the date it becomes a party to this
Agreement.  In addition, each Non-U.S. Lender shall deliver such forms
promptly upon the obsolescence or invalidity of any form previously delivered by
such Non-U.S. Lender.  Each Non-U.S. Lender shall promptly notify the
Borrowers and the Administrative Agent at any time it determines that it is no
longer in a position to provide any previously delivered certificate to the
Borrowers (or any other form of certification adopted by U.S. taxing authorities
for such purpose).  The Borrowers shall not be obligated to pay any
additional amounts in respect of U.S. federal income taxes pursuant to this
Section 4.07
(or make an indemnification payment pursuant to this Section 4.07) to any
Lender (or any Participant or other Person to which any Lender transfers its
interests in this Agreement as provided under Section 11.03 (Assignments)) if the obligation
to pay such additional amounts (or such indemnification) would not have arisen
but for a failure by such Lender to comply with this Section
4.07(e).

     

    ARTICLE
V


     

    REPRESENTATIONS
AND WARRANTIES

     

    In order
to induce each Agent, each Lender and each other party hereto (other than the
Borrowers) to enter into this Agreement and to induce each Lender to make the
Loans hereunder, each Borrower represents and warrants to each Agent and each
Lender as set forth in this Article V on the date
hereof, on the Closing Date, on the date of each Funding Notice and on each
Funding Date (in each case, except to the extent such representations and
warranties expressly relate to a future date or as otherwise provided in Article VI (Conditions
Precedent)).

     

     

    
      
        
        

      

      
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    Section
5.01  Organization; Power and
Compliance with Law.  Each Borrower (a) is a duly formed,
validly existing and in good standing under the laws of its jurisdiction of
organization, (b) is duly qualified to do business as is now being conducted and
as is proposed to be conducted by such Borrower and is in good standing in each
jurisdiction where the nature of its business requires such qualification (other
than any such failure to be so qualified or in good standing that could not
reasonably be expected to have a Material Adverse Effect) and (c) subject to the
entry of the Orders, has all requisite entity power and authority required as of
the date this representation is made or deemed repeated to enter into and
perform its obligations under each Transaction Document to which it is a party
and to conduct its business as currently conducted by it.

     

    Section
5.02  Due Authorization;
Non-Contravention.  Subject to the entry of the Orders, the
execution, delivery and performance by each Borrower of each Transaction
Document to which it is a party are within such Borrower’s organizational
powers, have been duly authorized by all necessary action, and do
not:

     

    (a)           contravene
such Borrower’s Organic Documents;

     

    (b)           contravene
in any material respect any Law binding on or affecting such
Borrower;

     

    (c)           contravene
any Contractual Obligation binding on or affecting such Borrower;

     

    (d)           require
any consent or approval under such Borrower’s Organic Documents that has not
been obtained;

     

    (e)           require
any consent or approval under any Contractual Obligations binding on or
affecting such Borrower other than any approvals or consents which have been
obtained; or

     

    (f)           result
in, or require the creation or imposition of, any Lien on any of such Borrower’s
properties other than Permitted Liens.

     

    Section
5.03  Governmental
Approvals.

     

    (a)           Subject
to the entry of the Orders, all material Governmental Approvals that are
required to be obtained by any Borrower in connection with (i) the due
execution, delivery and performance by such Borrower of the Financing Documents
to which it is a party and (ii) the grant by the Debtors of the DIP Liens and
the validity, perfection and enforceability thereof have been obtained, are in
full force and effect, are properly in the name of the appropriate Person, and
are final and Non-Appealable.

     

    (b)           All
Necessary Project Approvals are in full force and effect, are properly in the
name of the appropriate Person, and are final and Non-Appealable except as a
result of the Cold Shutdown of the Madera Plant, the Magic Valley Plant, the
Stockton Plant and, after the Boardman CS Date, the Boardman
Plant.  There is no action, suit, investigation or proceeding pending
or to the knowledge of each Borrower, threatened that could reasonably be
expected to result in the modification, rescission, termination or suspension of
any Necessary Project Approval that could reasonably be expected to have a
Material Adverse Effect.

     

    (c)           The
information set forth in each application (including any updates or supplements
thereto) submitted by or on behalf of any Borrower in connection with each
Necessary Project Approval was accurate and complete in all material respects at
the time of submission and continues to be accurate in all material respects and
complete in all respects to the extent required for the continued effectiveness
of such Necessary Project Approval.

     

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

     

     

    Section
5.04  Investment Company
Act.  No Borrower is, and after giving effect to the Loans and
the application of the proceeds of the Loans as described herein no Borrower
will be, an “investment company” or a company “controlled” by an “investment
company,” within the meaning of the Investment Company Act of 1940, as
amended.

     

    Section
5.05  Validity of Financing
Documents.  Each Financing Document to which any Borrower is a
party has been duly authorized, validly executed and delivered, and constitutes
the legal, valid and binding obligations of such Borrower enforceable in
accordance with its respective terms.

     

    Section
5.06  Financial
Information.  Each of the financial statements of Pacific
Ethanol delivered pursuant to Section 6.01(g)
(Conditions
to Closing – Financial Statements) and Sections 7.03(a) and (b)
(Reporting
Requirements) has been prepared
in accordance with GAAP, and fairly presents in all material respects the
consolidated financial condition of the Borrowers as at the dates thereof and
the results of their operations for the period then ended (subject, in the case
of unaudited financial statements, to changes resulting from audit and normal
year-end adjustments and the absence of footnotes).

     

    Section
5.07  Project
Compliance.  xiv)  Except as set forth on Schedule 5.07, Each
Plant conforms in all material respects to and complies in material respects
with all federal, state and local zoning, environmental, land use and other
applicable Laws and the requirements of all Necessary Project
Approvals.  Each Plant is and will continue to be owned and maintained
in material compliance  with all applicable Laws and the requirements
of all Necessary Project Approvals.

     

    (b)           Each
Plant is and will continue to be owned and maintained in compliance in all
material respects with all of the Borrowers’ Contractual Obligations (including
the Project Documents applicable to such Plant, taking into account any cure or
grace periods thereunder) (except, (i) in the case of Contractual Obligations
other than Project Documents, to the extent such failure to comply could not
reasonably be expected to result in a Material Adverse Effect with respect to
such Plant or Borrower and (ii) the cessation of operations and Cold Shutdown of
the Madera Plant, the Magic Valley Plant, the Stockton Plant and, after the
Boardman CS Date, the Boardman Plant).

     

    Section
5.08  Litigation.  xv)   Except
as set forth on Schedule 5.08, no
action, suit, proceeding or investigation has been instituted and not stayed
pursuant to the Bankruptcy Code or threatened against any Borrower (including in
connection with any Necessary Project Approval) that, individually or in the
aggregate, has had or could reasonably be expected to have a Material Adverse
Effect on any Plant or any Borrower;

     

    (b)           Except
as set forth on Schedule 5.08, no
action, suit, proceeding or investigation has been instituted and not stayed
pursuant to the Bankruptcy Code or threatened against any Major Project Party
that is an Affiliate of a Borrower and that is party to any Project Document
with Pacific Holding or that relates to any Borrower or Plant that, individually
or in the aggregate, has had or could reasonably be expected to have a Material
Adverse Effect; and

     

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

     

     

    (c)           to
the knowledge of each Borrower, no action, suit, proceeding or investigation has
been instituted and not stayed pursuant to the Bankruptcy Code or threatened
against any Major Project Party that is not an Affiliate of a Borrower and that
is party to any Project Document with Pacific Holding or that relates to any
Borrower or Plant that, individually or in the aggregate, has had or could
reasonably be expected to have a Material Adverse Effect.

     

    Section
5.09  Sole Purpose Nature;
Business.  None of the Borrowers has conducted nor is
conducting any business or activities other than businesses and activities
relating to the ownership, development, testing, financing, construction,
operation and maintenance of the Project as contemplated by the Transaction
Documents.

     

    Section
5.10  Contracts.

     

    (a)           All
contracts, agreements, instruments, letters, understandings, or other
documentation to which any Borrower is a party or by which it or any of its
properties is bound as of the date hereof (other than the Financing Documents),
including the Project Documents (including all documents amending,
supplementing, interpreting or otherwise modifying or clarifying such agreements
and instruments) are listed in Schedule
5.10.

     

    (b)           All
Necessary Project Contracts are in full force and effect except such Necessary
Projects Contracts the invalidity of which could not reasonably be expected to
have a Material Adverse Effect.

     

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

     

    Section
5.11  Collateral.  xvi)  The
Collateral includes all of the Equity Interests owned by and all of the tangible
and intangible assets of each Debtor (except as otherwise provided in this
Agreement).

     

    (b)           The
respective Liens and security interests (i) granted to the Collateral Agent (for
the benefit of the Senior Secured Parties) pursuant to the Bankruptcy Code
constitute, as to personal property included in the Collateral, a valid
first-priority security interest in such personal property and (ii) as to the
Mortgaged Property, constitute a valid first-priority Lien of record in the
Mortgaged Property, in each case subject only to Permitted Liens.

     

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

     

     

    (c)           The
security interest granted to the Collateral Agent (for the benefit of the Senior
Secured Parties) pursuant hereto will be perfected upon entry of the Interim
Order without any requirement of any further action by the Collateral
Agent.

     

    Section
5.12  Ownership of
Properties.  xvii)  Madera has a good and valid fee
ownership interest in the Site for the Madera Plant.  Boardman has a
good and valid leasehold interest or valid fee ownership in the Site for the
Boardman Plant.  Burley has a good and valid fee ownership interest in
the Site for the Burley Plant.  Stockton has a good and valid
leasehold interest or valid fee ownership in the Site for the Stockton
Plant.

     

    (b)           The
Borrowers have a good and valid ownership interest, leasehold interest, license
interest or other right of use in all their property and assets (tangible and
intangible) included in the Collateral except for any such rights the absence of
which in the aggregate would not be material.  Such ownership
interests, leasehold interest, license interest or other rights of
use  are and will be sufficient to permit operation of the Plants
substantially in accordance with the Project Documents applicable to each such
Plant.  None of said properties or assets are subject to any Liens or,
to the knowledge of each Borrower, any other claims of any Person, including any
easements, rights of way or similar agreements affecting the use or occupancy of
the Project, any Plant or any Site, other than Permitted Liens and, with respect
to claims, to the extent permitted by Section 5.08 (Litigation).

     

    (c)           All
Equity Interests in each of Madera, Boardman, Stockton and Burley are owned by
Pacific Holding.

     

    (d)           All
Equity Interests in Pacific Holding are owned by PEC.

     

    (e)           The
properties and assets of each of the Borrowers are separately identifiable and
are not commingled with the properties and assets of any other Person and are
readily distinguishable from one another.

     

    (f)           None
of Pacific Holding or any other Borrower has any leasehold interest in, and none
of the Borrowers is lessee of, any real property other than the Leased Premises
or other leasehold interests acquired by the Borrowers in accordance with the
Pre-Petition Credit Agreement.

     

    Section
5.13  Taxes.  xviii)  Each
Borrower has (i) filed all Tax Returns required by law to have been filed by it
and (ii) has paid all Taxes thereby shown to be owing, as and when the same are
due and payable, other than in the case of this Section 5.13(a)(ii),
(A) Taxes that are subject to a Contest or (B) the nonpayment of immaterial
Taxes in an aggregate amount not in excess of twenty-five thousand Dollars
($25,000) at any one time outstanding (taking into account any interest and
penalties that could accrue or be applicable to such past-due Taxes), and
provided that such Taxes are no more than forty-five (45) days past
due.

     

    (b)           No
Borrower is or will be taxable as a corporation for federal, state or local tax
purposes.

     

    (c)           No
Borrower is a party to any tax sharing agreement with any Person.

     

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

     

     

    Section
5.14  Patents, Trademarks,
Etc.  Pacific Holding and each other Borrower has obtained and
holds in full force and effect all material patents, trademarks, copyrights and
other such material rights or adequate licenses therein, free from unduly
burdensome restrictions, that are necessary for the ownership, operation and
maintenance of the Project.

     

    Section
5.15  ERISA
Plans.  None of the Borrowers nor any ERISA Affiliate has (or
within the five year period immediately preceding the date hereof had) any
liability in respect of any Plan or Multiemployer Plan.  None of the
Borrowers has any contingent liability with respect to any post-retirement
benefit under any “welfare plan” (as defined in Section 3(1) of ERISA), other
than liability for continuation coverage under Part 6 of Title I of
ERISA.

     

    Section
5.16  Property Rights, Utilities,
Supplies Etc.  xix)  All material property interests,
utility services, means of transportation, facilities and other materials
necessary for the use and operation of the Project (including, as necessary,
gas, roads, rail transport, electrical, water and sewage services and
facilities) are available to each Plant.

     

    (b)           There
are no material materials, supplies or equipment necessary for operation or
maintenance of each Plant that are not available at the relevant Site on
commercially reasonable terms consistent with the DIP Budget.

     

    Section
5.17  No
Defaults.  xx)  No Event of Default has occurred and
is continuing.

     

    (b)           None
of Pacific Holding or any other Borrower is in any breach of, or in any default
under, any of such Borrower’s Contractual Obligations (other than a breach
resulting from the Cases or the Cold Shutdown of the Madera Plant, the Magic
Valley Plant, the Stockton Plant and, after the Boardman CS Date, the Boardman
Plant) that has had or could reasonably be expected to have a Material Adverse
Effect with respect to such Borrower, in each case with respect to which
enforcement of remedies is not stayed by means of the Chapter 11
Cases.

     

    Section
5.18  Environmental
Warranties.

     

    (a)           (i)
Except as set forth on Schedule 5.18(a)(i),
each Borrower is in compliance in all material respects with all applicable
Environmental Laws, (ii) each Borrower has all Environmental Approvals required
to operate its business as presently conducted or as reasonably anticipated to
be conducted and is in compliance in all material respects with the terms and
conditions thereof, (iii) no Borrower nor any of its Environmental Affiliates
has received any written communication from a Governmental Authority that
alleges that any Borrower or any Environmental Affiliate is not in compliance in
all material respects with all Environmental Laws and Environmental Approvals,
and (iv) there are no circumstances that may prevent or interfere in the future
with any Borrower’s compliance in all material respects with all applicable
Environmental Laws and Environmental Approvals.

     

    (b)           There
is no Environmental Claim pending, or to the knowledge of each Borrower,
threatened  against any Borrower.  No Environmental
Affiliate has taken any action or violated any Environmental Law that to the
knowledge of a Borrower could reasonably be expected to result in an
Environmental Claim.

     

     

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

     

     

    (c)           There
are no present or past actions, activities, circumstances, conditions, events or
incidents, including the release, emission, discharge, presence or disposal of
any Material of Environmental Concern, that could reasonably be expected to form
the basis of any Environmental Claim against any Borrower or any Environmental
Affiliate.

     

    (d)           Without
in any way limiting the generality of the foregoing, (i) there are no on-site or
off-site locations in which any Borrower or, to the knowledge of a Borrower, any
Environmental Affiliate has stored, disposed or arranged for the disposal of
Materials of Environmental Concern that could reasonably be expected to form the
basis of an Environmental Claim, (ii) no Borrower knows of any underground
storage tanks located or to be located on property owned or leased by any
Borrower except as identified on Schedule 5.18(d)(ii)
(as the same may be updated in writing by the Borrower Agent with the written
approval of the Administrative Agent), (iii) there is no asbestos or lead paint
contained in or forming part of any building, building component, structure or
office space owned or leased by any Borrower except in such form, condition and
quantity as could not reasonably be expected to result in an Environmental
Claim, and (iv) no polychlorinated biphenyls (PCBs) are or will be used or
stored at any property owned or leased by any Borrower, except in such form,
condition and quantity as could not reasonably be expected to result in an
Environmental Claim.

     

    (e)           No
Borrower has received any letter or request for information under Section 104 of
the CERCLA, or comparable state laws, and to the knowledge of each Borrower,
none of the operations of each Borrower is the subject of any investigation by a
Governmental Authority evaluating whether any remedial action is needed to
respond to a release or threatened release of any Material of Environmental
Concern at any Plant or Site or at any other location, including any location to
which any Borrower has transported, or arranged for the transportation of, any
Material of Environmental Concern with respect to the Project.

     

    Section
5.19  Regulations T, U and
X.  None of the Borrowers is engaged in the business of
extending credit for the purpose of purchasing or carrying margin stock, and no
proceeds of any Loan will be used for any purpose that violates, or would be
inconsistent with, F.R.S. Board Regulation T, U or X.  Terms for which
meanings are provided in F.R.S. Board Regulation T, U or X or any regulations
substituted therefore, as from time to time in effect, are used in this Section 5.22 with
such meanings.

     

    Section
5.20  Accuracy of
Information.  xxi)  All factual information
heretofore or contemporaneously furnished by or on behalf of any Borrower in
this Agreement, in any other Transaction Document or otherwise in writing to any
Senior Secured Party, any Consultant, or counsel for purposes of or in
connection with this Agreement and the other Financing Documents or any
transaction contemplated hereby or thereby (other than projections, budgets and
other “forward-looking” information all of which has been prepared on a
reasonable basis and in good faith) was, as of the date furnished, when taken as
a whole (and after giving effect to any supplement of such information) (i) true
and accurate in every material respect and (ii) not incomplete by omitting to
state any material fact necessary to make such information not misleading in any
material respect.

     

    (b)           The
assumptions constituting the basis on which the Borrowers prepared the DIP
Budget that is in effect on each date this representation is made or deemed
repeated and the numbers set forth therein were developed and consistently
utilized in good faith and are reasonable and represent each Borrower’s best
judgment as of the date prepared as to the matters contained therein, based on
all information known to the Borrowers.

     

     

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

     

     

    (c)           The
Borrowers reasonably believe that the use, ownership, operation and maintenance
of the Project are technically feasible and, except for factors effecting the
ethanol industry in general and not relating specifically to the Project,
economically feasible.

     

    Section
5.21  Indebtedness.  The
Obligations are, after giving effect to the Financing Documents and the
transactions contemplated thereby, the only outstanding Indebtedness of the
Borrowers other than Permitted Indebtedness.  The Obligations have the
ranking given to them in Section 2.09 (Super-Priority
Nature of Objectives).

     

    Section
5.22  Required LLC
Provisions.  Each limited liability company interest of each
Borrower that is a limited liability company is a security governed by Article 8
of the Uniform Commercial Code and is evidenced by a certificate.  The
certificated interests are in registered form within the meaning of Article 8 of
the Uniform Commercial Code

     

    Section
5.23  Subsidiaries.  Madera,
Boardman, Stockton and Burley have no Subsidiaries.  Pacific Holding
has no Subsidiaries other than Madera, Boardman, Stockton and
Burley.

     

    Section
5.24  Foreign Assets Control
Regulations, Etc.  xxii)  The use of the proceeds of
the Loan by the Borrowers will not violate the Trading with the Enemy Act, as
amended, or any of the foreign assets control regulations of the United States
Treasury Department (31 C.F.R., Subtitle B, Chapter V, as amended) or any
enabling legislation or executive order relating thereto.

     

    (b)           No
Borrower:

     

    
      	
               
      

            	
              (i)

            	
              is
      or will become a Person or entity described by section 1 of Executive
      Order 13224 of September 24, 2001 Blocking Property and Prohibiting
      Transactions With Persons Who Commit, Threaten to Commit, or Support
      Terrorism (12 C.F.R. 595), and no Borrower engages in dealings or
      transactions with any such Persons or entities;
  or

            


    

     

    
      	
               
      

            	
              (ii)

            	
              is
      in violation of the Patriot Act.

            


    

     

    Section
5.25  Employment
Matters.  None of the Borrowers has or has had any employee or
former employees.

     

     

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

     

     

    Section
5.26  Legal Name and Place of
Business.  xxiii)  The exact legal name and
jurisdiction of formation of each Borrower is as set forth below, and no
Borrower has had any other legal names in the previous five (5) years except as
set forth on Schedule
5.26:

     

    
      	
               
      

            	
              (i)

            	
              Pacific
      Holding:  Pacific Ethanol Holding Co. LLC, a limited liability
      company organized and existing under the laws of the State of
      Delaware;

            


    

     

    
      	
               
      

            	
              (ii)

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

            


    

     

    
      	
               
      

            	
              (iii)

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

            


    

     

    
      	
               
      

            	
              (iv)

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

            


    

     

    
      	
               
      

            	
              (v)

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

            


    

     

    (b)           The
sole place of business and chief executive office of each Borrower is as set
forth on Schedule
5.26.

     

    The
information set forth in Sections 5.26(a) and
(b) and on
Schedule 5.26
may be changed from time to time by the Borrowers upon thirty (30) days’ prior
written notice to the Administrative Agent and the Collateral Agent, subject in
each case to the obligations of the Borrowers hereunder to provide the
Collateral Agent with a perfected first-priority Lien on the Collateral (subject
to Permitted Liens).

     

    Section
5.27  No
Brokers.  No Borrower has any obligation to pay any finder’s,
advisory, brokers or investment banking fee, except for the fees payable
pursuant to Section
3.11 (Fees) and those
identified on Schedule
5.27.

     

    Section
5.28  Insurance.  All
insurance required to be obtained and maintained pursuant to the Transaction
Documents by Pacific Holding and each other Borrower is in full force and effect
as of each date this representation is made or deemed repeated and complies with
the insurance requirements set forth on Schedule
7.01(h).  All premiums then due and payable on all such
insurance have been paid.  To the knowledge of each Borrower, all
insurance required to be obtained and maintained by any Major Project Party, to
protect, directly or indirectly, against loss or liability to any Borrower, any
Plant or any Senior Secured Party, as of the date this representation is made or
deemed repeated, pursuant to any Project Document has been obtained, is in full
force and effect and complies with the insurance requirements set forth on Schedule 7.01(h)
(where applicable) and is otherwise in all material respects in accordance with
such Project Document.

     

    Section
5.29  Accounts.  The
Project Accounts exist at the Account Bank in accordance with the terms of the
Pre-Petition Credit Agreement.  No Borrower has, nor is the
beneficiary of, any bank account other than the Project Accounts and any Local
Account set forth on Schedule 5.29 with
respect to which a Blocked Account Agreement has been duly executed and
delivered.

     

     

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

     

     

    Section
5.30  SEC
Compliance.  Pacific Ethanol has made all filings required to
be made by Pacific Ethanol pursuant to the
Securities Exchange Act of 1934 and all factual information heretofore or
contemporaneously furnished by Pacific Ethanol in any such filing (other than
projections, budgets and other “forward-looking” information all of which has
been prepared on a reasonable basis and in good faith by Pacific Ethanol) is,
when taken as a whole (and after giving effect to any supplement of such
information) and as of the date furnished, true and accurate in every material
respect and such information is not, when taken as a whole (and after giving
effect to any supplement of such information) as of the date furnished,
incomplete by omitting to state any material fact necessary to make such
information not misleading in any material respect.

     

    Section
5.31  Reorganization
Matters.

     

    (a)           The
Chapter 11 Cases were commenced on the Petition Date in accordance with
applicable law and proper notice thereof and the proper notice for (i) the
motion seeking approval of the Financing Documents and the Interim Order and
Final Order, (ii) the hearing for the approval of the Interim Order, and
(iii) the hearing for the approval of the Final Order.

     

    (b)           After
the entry of the Interim Order, and pursuant to and solely to the extent
permitted in the Interim Order and the Final Order, the Obligations will
constitute allowed administrative expense claims in the Chapter 11 Cases
having priority over all administrative expense claims and unsecured claims
against the Borrowers now existing or hereafter arising, of any kind whatsoever,
including, without limitation, all administrative expense claims of the kind
specified in Sections 105, 326, 330, 331, 503(b), 506(c), 507(a), 507(b),
546(c), 726, 1113, 1114 or any other provision of the Bankruptcy Code or
otherwise, as provided under Section 364(c)(l) of the Bankruptcy Code,
subject, as to priority only, to the Carve-Out.

     

    (c)           After
the entry of the Interim Order and pursuant to and to the extent provided in the
Interim Order and the Final Order, the Obligations will be secured by a valid
and perfected Lien having the priority described in the Orders.

     

    (d)           The
Interim Order (with respect to the period prior to entry of the Final Order) or
the Final Order (with respect to the period on and after entry of the Final
Order), as the case may be, is in full force and effect and has not been
modified or amended without the consent of the Administrative Agent and the
Lenders, or reversed or stayed.

     

     

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

     

    ARTICLE
VI


     

    CONDITIONS
PRECEDENT

     

    Section
6.01  Conditions to
Closing.  The occurrence of the Closing Date is subject to the
satisfaction of each of the following conditions precedent.

     

    (a)           Delivery of Financing
Documents and Orders.  The Administrative Agent shall have
received each of the following fully executed documents, each of which shall be
originals, portable document format (“pdf”) or facsimiles
(followed promptly by originals), duly executed and delivered by each party
thereto and each in form and substance satisfactory to each Lender:

     

    
      	
               
      

            	
              (i)

            	
              this
      Agreement;

            


    

     

    
      	
               
      

            	
              (ii)

            	
              the
      New Mortgages;

            


    

     

    
      	
               
      

            	
              (iii)

            	
              the
      PEC Pledge Agreement;

            


    

     

    
      	
               
      

            	
              (iv)

            	
              the
      Asset Management Agreement;

            


    

     

    
      	
               
      

            	
              (v)

            	
              the
      AMA Consent;

            


    

     

    
      	
               
      

            	
              (vi)

            	
              the
      original Revolving Notes, duly executed and delivered by an Authorized
      Officer of each Borrower in favor of each requesting
    Lender;

            


    

     

    
      	
               
      

            	
              (vii)

            	
              the
      original Roll Up Notes, duly executed and delivered by an Authorized
      Officer of each Borrower in favor of each requesting
    Lender;

            


    

     

    
      	
               
      

            	
              (viii)

            	
              the
      Interim Order; and

            


    

     

    
      	
               
      

            	
              (ix)

            	
              a
      document setting forth a cash management system for the Debtors consistent
      with the existing cash management system of the Debtors and subject to the
      existing account control agreements to which the Debtors are
      party.

            


    

     

    (b)           Delivery of Other
Documents.  The Administrative Agent shall have received true,
correct and complete copies of each agreement identified on Schedule
5.10  reasonably requested by the Administrative
Agent.

     

    (c)           Officer’s
Certificates.  The Administrative Agent shall have received a
duly executed certificate of an Authorized Officer of the Borrower Agent, dated
as of the Closing Date, upon which the Administrative Agent and each Lender may
conclusively rely certifying that (A) all conditions set forth in this Section 6.01 have
been satisfied on and as of the Closing Date and (B) all representations and
warranties made by any Borrower in this Agreement and each other Financing
Document to which any Borrower is a party are true and correct in all material
respects on and as of the Closing Date

     

     

    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

    

     

     

    (d)           Resolutions, Incumbency,
Organic Documents.  The Administrative Agent shall have
received from each Borrower a certificate of an Authorized Officer dated as of
the Closing Date, upon which the Administrative Agent and each Lender may
conclusively rely, as to:

     

    
      	
               
      

            	
              (i)

            	
              reasonably
      satisfactory resolutions of its members, managers or directors, as the
      case may be, then in full force and effect authorizing the execution,
      delivery and performance of each Financing Document to which it is party
      and the consummation of the transactions contemplated therein (including
      the appointment of the Borrower
Agent);

            


    

     

    
      	
               
      

            	
              (ii)

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

            


    

     

    
      	
               
      

            	
              (iii)

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

            


    

     

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

     

    (f)           Lien Search; Protection of
Security.  The Administrative Agent shall have received
satisfactory copies or evidence, as the case may be, of the following actions in
connection with the perfection of the DIP Liens:

     

    
      	
               
      

            	
              (i)

            	
              completed
      requests for information or lien search reports, dated no more than five
      (5) Business Days before the date of such Funding or such longer period
      satisfactory to the Administrative Agent, listing all effective UCC
      financing statements, fixture filings or other filings evidencing a
      security interest filed in such jurisdictions reasonably requested by the
      Administrative Agent that name any Borrower as a debtor, together with
      copies of each such UCC financing statement, fixture filing or other
      filings; and

            


    

     

    
      	
               
      

            	
              (ii)

            	
              acknowledgment
      copies or stamped receipt copies or confirmation of submission for filing
      of proper UCC financing statements, fixture filings and other filings and
      recordations, each in form and substance satisfactory to the
      Administrative Agent and the Collateral Agent, duly filed in all
      jurisdictions that the Administrative Agent and the Collateral Agent may
      deem necessary, or that are reasonably requested by the Collateral Agent
      or the Administrative Agent, in order to perfect or protect the DIP Liens
      created hereunder and pursuant to the Orders and the priority
      thereof.

            


    

     

     

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

     

     

    (g)           Financial
Statements.  The Administrative Agent shall have received
accurate and complete copies of the audited annual financial statements of
Pacific Ethanol for the 2008 Fiscal Year.  Such financial statements
shall be on a consolidated basis.

     

    (h)           Third Party
Approvals.  The Administrative Agent shall have received
reasonably satisfactory documentation of any approval by any Person required in
connection with any transaction contemplated by this Agreement or any other
Financing Document that the Administrative Agent has reasonably requested in
connection herewith.

     

    (i)     
      Insurance.  The
Administrative Agent shall have received reasonably satisfactory evidence that
the insurance requirements set forth on Schedule 7.01(h) with
respect to the Borrowers and the Plants have been satisfied, including binders
or certificates evidencing the commitment of insurers to provide each insurance
policy required by Schedule 7.01(h),
evidence of the payment of all premiums then due and owing in respect of such
insurance policies and a certificate of the Borrowers’ insurance broker (or
insurance carrier) certifying that all such insurance policies are in full force
and effect.

     

    (j)         
  Bank
Regulatory Requirements.  The Administrative Agent shall have
received all documentation and other information required by bank regulatory
authorities under applicable “know your customer” and anti-money-laundering
rules and regulations, including the Patriot Act.

     

    (k)           Closing Fees;
Expenses.  The Administrative Agent shall have received for its
own account, or for the account of each Lender and Agent entitled thereto, all
fees due and payable pursuant to Section 3.11 (Fees) and all reasonable
costs and expenses (including reasonable and documented legal fees and expenses)
for which invoices have been presented, in each case, required to be paid on or
before the Closing Date.  The Pre-Petition Administrative Agent shall
have received all fees due and payable to it pursuant to the Pre-Petition Credit
Agreement and all reasonable costs and expenses (including reasonable and
documented legal fees and expenses) for which invoices have been presented, in
each case, required to be paid on or before the Closing Date.

     

    (l)         
  Certain
Orders.   The entry of all “first day orders,” including
all employee-related orders and critical vendor orders entered at or about
the time of the commencements of the Chapter 11 Cases each in form and
substance reasonably satisfactory to the Administrative Agent and each
Lender.

     

    (m)           Rating.  The
Borrowers shall have obtained a rating of the Loans from S&P or
Moody’s.

     

    (n)           Other
Information.  The Lenders shall have received the Initial DIP
Budget and all other information reasonably requested from the
Borrowers.

     

     

    
      
        
        

      

      
        32

        
          

        

      

      
        
        

      

    

     

     

    Section
6.02  Conditions to All
Fundings.  The obligation of each Lender to make available each
Funding of its Revolving Loans shall be subject to the fulfillment of the
following conditions precedent.

     

    (a)           Funding
Notice.  The Administrative Agent shall have received a duly
executed Funding Notice as required by and in accordance with Section 2.03 (Notice
of Fundings), which shall
certify that:

     

    
      	
               
      

            	
              (i)

            	
              the
      Borrowers are in compliance with all conditions set forth in this Section 6.02,
      and each other applicable Section of this Article VI,
      on and as of the proposed Funding Date, before and after giving effect to
      such Funding and to the application of the proceeds therefrom (provided
      that, to the extent reasonably acceptable to the Administrative Agent,
      such compliance may be demonstrated by delivery of evidence of
      satisfaction of certain conditions to the relevant Funding, as identified
      in such Funding Notice, to the Administrative Agent to be held in escrow
      until the Funding Date);

            


    

     

    
      	
               
      

            	
              (ii)

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

            


    

     

    
      	
               
      

            	
              (iii)

            	
              no
      Default or Event of Default has occurred and is continuing or would result
      from such Borrowing.

            


    

     

    (b)           Certain
Orders.

     

    
      	
               
      

            	
              (i)

            	
              The
      Interim Order shall be entered and in full force and effect and shall not
      have been appealed, stayed, reversed, vacated or otherwise modified
      without the consent of the Administrative Agent and the Lenders;
      or

            


    

     

    
      	
               
      

            	
              (ii)

            	
              If
      (x) the date of such requested Funding is more than 45 days after the
      Closing Date or (y) the amount of such requested Funding, together with
      the outstanding principal amount of the Revolving Loans, shall exceed the
      maximum amount authorized pursuant to the Interim Order, the Final Order
      shall be entered and in full force and effect and shall not have been
      appealed, stayed, reversed, vacated or otherwise modified without the
      consent of the Administrative Agent and the
  Lenders.

            


    

     

    (c)           Government
Approvals.  Each Borrower shall have all Necessary Project
Approvals required as of the date of such requested Funding, and the
Administrative Agent shall have received a duly executed certificate of an
Authorized Officer of the relevant Borrowers certifying that each such Necessary
Project Approval is in full force and effect and is final and
Non-Appealable.

     

     

    
      
        
        

      

      
        33

        
          

        

      

      
        
        

      

    

     

     

    (d)           No Default or Event of
Default.  No Default or Event of Default has occurred and is
continuing, or would result from such Funding.

     

    (e)           No
Litigation.

     

    
      	
               
      

            	
              (i)

            	
              Except
      as set forth on Schedule 5.08, no action, suit, proceeding or
      investigation shall have been instituted and not stayed pursuant to the
      Bankruptcy Code or threatened against any Borrower that, individually or
      in the aggregate, has had or could reasonably be expected to have a
      Material Adverse Effect; and

            


    

     

    
      	
               
      

            	
              (ii)

            	
              Except
      as set forth on Schedule 5.08, no action, suit, proceeding or
      investigation shall have been instituted or threatened against any Project
      Party that, individually or in the aggregate, has had or could reasonably
      be expected to have a Material Adverse
Effect.

            


    

     

    (f)           Abandonment, Taking, Total
Loss.  (i) No Event of Abandonment or Event of Total Loss shall
have occurred and be continuing with respect to any Plant, (ii) no Event of
Taking relating to any Equity Interests comprising Collateral shall have
occurred and be continuing, or (iii) no Event of Taking with respect to a
material part of any Plant shall have occurred.

     

    (g)           Closing
Date.  The Closing Date shall have occurred.

     

    (h)           Representations and
Warranties.   Each representation and warranty made by
each Borrower in this Agreement and each of the Financing Documents to which it
is a party shall be true and correct in all material respects on and as of such
Funding Date (except with respect to representations and warranties that
expressly refer to an earlier date), before and after giving effect to such
Funding and to the application of the proceeds therefrom.

     

    (i)       
    Fees;
Expenses.  The Administrative Agent shall have received for its
own account, or for the account of each Lender and Agent entitled thereto, all
fees due and payable as of the date of such Funding pursuant to Section 3.11 (Fees), and all costs and
expenses (including reasonable and documented costs, fees and expenses of legal
counsel) for which invoices have been presented.  The Pre-Petition
Administrative Agent shall have received all fees due and payable to it pursuant
to the Pre-Petition Credit Agreement and all reasonable costs and expenses
(including reasonable and documented legal fees and expenses) for which invoices
have been presented.

     

    (j)          
 Additional
Information.  The Lenders shall have received all information
reasonably requested from the Borrowers.

     

     

    
      
        
        

      

      
        34

        
          

        

      

      
        
        

      

    

     

    ARTICLE
VII

     

    COVENANTS

     

    Section
7.01  Affirmative
Covenants.  Each Borrower agrees with each Agent and each
Lender that, until the Discharge Date, each Borrower will perform the
obligations set forth in this Section 7.01
applicable to it.

     

    (a)           Compliance with
Laws.  Each Borrower shall comply in all material respects with
all Laws (other than Environmental Laws) applicable to it or to its business or
property.

     

    (b)           Environmental
Matters.

     

    
      	
               
      

            	
              (i)

            	
              The
      Borrowers shall (A) comply in all material respects with all Environmental
      Laws, (B) keep the Project free of any Lien imposed pursuant to any
      Environmental Law, (C) pay or cause to be paid when due and payable by any
      Borrower any and all costs required in connection with any Environmental
      Laws, including the cost of identifying the nature and extent of the
      presence of any Materials of Environmental Concern in, on or about the
      Project or on any real property owned or leased by any Borrower or on the
      Mortgaged Property, and the cost of delineation, management, remediation,
      removal, treatment and disposal of any such Materials of Environmental
      Concern, and (D) use their best efforts to ensure that no Environmental
      Affiliate takes any action or violates any Environmental Law that could
      reasonably be expected to result in an Environmental
  Claim.

            


    

     

    
      	
               
      

            	
              (ii)

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

            


    

     

    (c)           Operations and Maintenance;
Conduct of Business.  Each Borrower owing a Plant shall own,
operate and maintain (or cause to be operated and maintained) such Plant in all
material respects in accordance with (i) the terms and provisions of the
Transaction Documents except as a result of the Cases, the Cold Shutdown of the
Madera Plant, the Magic Valley Plant, the Stockton Plant and, after the Boardman
CS Date, the Boardman Plant, (ii) all applicable Governmental Approvals and Laws
and (iii) Prudent Ethanol Operating Practice.  Pacific Holding shall
conduct its business in all material respects in accordance with all applicable
Governmental Approvals and Laws.

     

    (d)           Maintenance of
Properties.

     

    
      	
               
      

            	
              (i)

            	
              Each
      Borrower shall keep, or cause to be kept, in good working order and
      condition, ordinary wear and tear excepted, all of its material properties
      and equipment that are necessary or useful in the proper conduct of its
      business.

            


    

     

     

    
      
        
        

      

      
        35

        
          

        

      

      
        
        

      

    

     

     

    
      	
               
      

            	
              (ii)

            	
              The
      Borrowers shall not permit any Plant or any material portion thereof to be
      removed, demolished or materially altered, unless such material portion
      that has been removed, demolished or materially altered has been replaced
      or repaired as permitted under this
Agreement.

            


    

     

    
      	
               
      

            	
              (iii)

            	
              Each
      Borrower shall do or cause to be done all things necessary to preserve and
      keep in full force and effect (A) its existence and (B) its material
      patents, trademarks, trade names, copyrights, franchises and similar
      rights.

            


    

     

    (e)           Payment of
Obligations.  Each Borrower shall pay and discharge as the same
shall become due and payable all its Post-Petition obligations and liabilities
of whatever nature except (i) where such payment, discharge or satisfaction is
prohibited by the Bankruptcy Code, the Bankruptcy Rules or an order of the
Bankruptcy Court, or by this Agreement or the then-current DIP Budget, (ii)
where any such failure could not reasonably be expected to have a Material
Adverse Effect and would not otherwise result in an Event of Default or (iii)
where the amount or validity is subject to a Contest.

     

    (f)           Governmental
Approvals.  Pacific Holding and each other Borrower shall
maintain in full force and effect, in the name of the relevant Borrower, all
Necessary Project Approvals (other than any such failure to maintain that could
not reasonably be expected to have a Material Adverse Effect on the relevant
Borrower or Plant).

     

    (g)           Use of
Proceeds.

     

    
      	
               
      

            	
              (i)

            	
              All
      proceeds of the Loans shall be used solely to fund, in each case only to
      the extent specified in the DIP Budget (subject to the Permitted
      Variance), (a) operating expenses, limited capital expenditures and other
      amounts for general and ordinary course purposes of the Debtors, (b)
      current interest and fees payable pursuant to the Financing Documents and
      (c) such other administrative payments, including the budgeted
      professional fees, as may be authorized and approved by the Administrative
      Agent and the Lenders under the Interim Order, the Final Order or any
      subsequent order of the Bankruptcy
Court.

            


    

     

    
      	
               
      

            	
              (ii)

            	
              No
      portion of the proceeds of the Loans, the Collateral or the Carve-Out
      shall be used to (a) challenge the validity, perfection, priority, extent
      or enforceability of the DIP Facility, the Pre-Petition Obligations, or
      the Liens on the assets of the Debtors securing the DIP Facility or the
      Pre-Petition Obligations or (b) assert any claim against the
      Administrative Agent, the Lenders or the Pre-Petition Senior Secured
      Parties; provided, however, that (x) the proceeds of the Loans may be
      used to seek a Section 506(a) Determination
      and (y) up to $15,000 of the proceeds of the Loans may be used by
      the Committee to investigate potential claims arising out of, or in
      connection with, the Pre-Petition Credit Agreement or the security
      interests and liens securing the Pre-Petition Obligations.  The
      Carve-Out shall be reduced by an amount equal to all proceeds of the Loans
      used pursuant to the foregoing
proviso.

            


    

     

     

    
      
        
        

      

      
        36

        
          

        

      

      
        
        

      

    

     

     

    
      	
               
      

            	
              (iii)

            	
              Prior
      to the Carve-Out Date, subject to entry of an appropriate order of the
      Bankruptcy Court (in form and substance acceptable to the Administrative
      Agent and the Lenders), proceeds of the Loans may be used to pay
      professional fees and expenses of the Debtors and of the Committee allowed
      and payable under sections 330 and 331 of the Bankruptcy Code in
      accordance with the DIP Budget and the Carve-Out shall not be reduced by
      the amount of any such compensation and reimbursement of expenses paid or
      incurred (to the extent ultimately allowed by the Bankruptcy Court) prior
      to the occurrence of the Carve-Out
Date.

            


    

     

    
      	
               
      

            	
              (iv)

            	
              On
      and after the Carve-Out Date, any amounts paid to professionals of the
      Debtors and of the Committee by any means will reduce the Carve-Out on a
      dollar-for-dollar basis and the Carve-Out will be limited to the maximum
      amount of $250,000;
      provided, that
      nothing herein shall be construed to impair the ability of any party to
      object to any of the fees, expenses, reimbursement, or compensation sought
      by the professionals retained by the Debtors or any statutory committee in
      the Chapter 11 Cases.

            


    

     

    (h)           Insurance.  Without
cost to any Senior Secured Party, the applicable Borrower shall at all times
obtain and maintain, or cause to be obtained and maintained, the types and
amounts of insurance listed and described on Schedule 7.01(h), in
accordance with the terms and provisions set forth therein for each such Plant
and the applicable Borrower, and shall obtain and maintain in all material
respects such other insurance as may be required pursuant to the terms of any
Transaction Document.   If the Borrowers fail to take out or
maintain the full insurance coverage required by this Section 7.01(h), the
Administrative Agent may (but shall not be obligated to) take out the required
policies of insurance and pay the premiums on the same.  All amounts
so advanced by the Administrative Agent shall become an Obligation and the
Borrowers shall forthwith pay such amounts to the Administrative Agent, together
with interest from the date of payment by the Administrative Agent at the
Default Rate.

     

    (i)           Books and Records;
Inspections.  Each Borrower shall keep proper books of record
and account in which complete, true and accurate entries in conformity with GAAP
and all requirements of Law shall be made of all financial transactions and
matters involving the assets and business of such Borrower, and shall maintain
such books of record and account in material conformity with applicable
requirements of any Governmental Authority having regulatory jurisdiction over
such Borrower.  Each Borrower shall keep books and records separate
from the books and records of any other Person (including any Affiliates of such
Borrower) that accurately reflect all of its business affairs, transactions and
the documents and other instruments that underlie or authorize all of its
actions. Each Borrower shall permit officers and designated representatives of
the Administrative Agent or Consultant to visit and inspect any of the
properties of such Borrower (including the Plants), to examine its financial and
operating records, and make copies thereof or abstracts therefrom, and to
discuss its affairs, finances and accounts with its members, managers,
directors, officers and independent public accountants, all at the expense of
the Borrowers at any time during normal business hours and without advance
notice.

     

     

    
      
        
        

      

      
        37

        
          

        

      

      
        
        

      

    

     

     

    (j)           Project
Documents.  Each Borrower shall use its reasonable best efforts
to preserve, protect and defend its rights under each Project Document to which
it is a party except where the failure to do so (i) results from the Effect of
Bankruptcy, the Cold Shutdown of the Madera Plant, the Magic Valley Plant, the
Stockton Plant and, after the Boardman CS Date, the Boardman Plant or (ii) could
not reasonably be expected to have a Material Adverse Effect. Each Borrower
shall use its reasonable best efforts to exercise all material rights,
discretion and remedies under each Project Document in accordance with its terms
and in a manner consistent with and subject to such Borrower’s obligations under
the Financing Documents except where the failure to do so exercise such rights,
discretion or remedies results from the Cases, the Cold Shutdown of the Madera
Plant, the Magic Valley Plant, the Stockton Plant and, after the Boardman CS
Date, the Boardman Plant.

     

    (k)           Maintenance of
Existence. Each Borrower will continue to preserve, renew and keep in
full force and effect its entity status in the jurisdiction of its formation and
take all actions to maintain its rights, privileges and franchises necessary or
desirable in the normal course of its business.

     

    (l)           DIP
Budgets.

     

    
      	
               
      

            	
              (i)

            	
              The
      Borrowers, not later than seven (7) days before the date that is the first
      day of the fifth week covered by the DIP budget and each date falling
      every twenty-eighth (28th) day thereafter (each such date, a “Period Start
      Date”), shall adopt a budget containing, among other things,
      rolling cash flow forecast, setting forth in reasonable detail the
      projected cash flow for each Plant and on an aggregate basis for the
      Project for the period starting on the then current Period Start Date and
      ending on the earlier of (A) thirteen (13) weeks after the then current
      Period Start Date and (B) the scheduled Maturity Date, and provide a copy
      of such forecast at such time to the Administrative Agent.  Each
      such forecast shall become effective upon approval of the Administrative
      Agent and the Required Lenders (acting in consultation with the Financial
      Advisor) (each such approved forecast, and the Initial DIP Budget, a
      “DIP
      Budget).”

            


    

     

    
      	
               
      

            	
              (ii)

            	
              Each
      DIP budget delivered to the Administrative Agent pursuant to this Section 7.01(l)
      shall be accompanied by a memorandum or worksheet detailing all changes in
      material assumptions used in the preparation of such Budget, shall contain
      a line item for each expense category reasonably requested by the
      Administrative Agent or the Required Lenders (provided that items on the
      DIP Budget that are subject to Bankruptcy Court approval shall not be
      funded until approved by the Bankruptcy Court, and inclusion and
      acceptance of any such item is not a waiver of any party’s objection
      thereto), shall specify for each week and for each such expense category
      the amount budgeted for such category for such
  week.

            


    

     

    
      	
               
      

            	
              (iii)

            	
              Subject
      to Section
      7.02(w), the Borrowers shall comply with the DIP Budget subject to
      the Permitted Variance.

            


    

     

     

    
      
        
        

      

      
        38

        
          

        

      

      
        
        

      

    

     

     

    (m)           Preservation of Title;
Acquisition of Additional Property.

     

    
      	
               
      

            	
              (i)

            	
              The
      Borrowers shall preserve and maintain (A) good, marketable and insurable
      fee interest in each Site (excluding the Leased Premises) and valid
      easement interest to its easement interest in each Site (excluding the
      Leased Premises), (B) a good, legal and valid leasehold interest in the
      Leased Premises, and (C) good, legal and valid title to all of its other
      respective material properties and assets, in each case free and clear of
      all Liens other than Permitted
Liens.

            


    

     

    
      	
               
      

            	
              (ii)

            	
              No
      Borrower shall acquire or commence to lease any real property interests
      without the prior written consent of the Lenders and the Administrative
      Agent.

            


    

     

    (n)           Maintenance of Liens;
Creation of Liens. (i) The Borrowers shall take or cause to be taken all
actions necessary or reasonably requested by the Administrative Agent for the
Collateral Agent to maintain and preserve the DIP Liens and the priority
thereof.

     

    (ii) The Borrowers shall take promptly
all actions reasonably requested by the Administrative Agent to cause each
Additional Project Document to become subject to the DIP Liens, shall deliver
certified copies of such Additional Project Document to the Administrative Agent
and, if requested by the Administrative Agent, shall deliver any Ancillary
Documents related thereto.

     

    (o)           Reorganization
Matters.  The Borrowers shall give, on a timely basis as
specified in the Interim Order or the Final Order all notices required to be
given to all parties specified in the Interim Order or Final
Order.  The Borrowers shall provide to the Administrative Agent copies
of all pleadings, motions, applications and other documents or information (i)
filed by or on behalf of any Borrower with the Bankruptcy Court or (ii) provided
to any creditors’ committee appointed in the Chapter 11 Cases.  The
Borrowers shall provide the Administrative Agent with drafts of all pleadings,
motions and applications to be filed by or on behalf of any Borrower at least
three (3) Business Days in advance of such filing.

     

    (p)           Professional
Fees.  Promptly following receipt thereof, the Borrowers shall
deliver to the Administrative Agent all monthly fee statements detailing the
fees of all its professionals (including counsel and financial advisors) for
such month delivered in accordance with the interim compensation procedures
approved by the Bankruptcy Court.

     

     

    
      
        
        

      

      
        39

        
          

        

      

      
        
        

      

    

     

     

    (q)           Bank
Accounts.  Each bank account of a Borrower shall at all times
be (i) held as Collateral to secure the repayment and/or performance of the
Obligations, (ii) held at a financial institution at which such Borrower
maintains its bank accounts on the Petition Date under the terms of the
Pre-Petition Financing Documents, or otherwise as selected by such Borrower from
a list of approved financial institutions approved by the Required Lenders and
(iii) subject to a perfected Priming Lien in favor of the Collateral Agent on
behalf of the Senior Secured Parties, with all rights and remedies in respect
thereto as set forth in the Orders and the other Financing Documents. No
Borrower may open a new bank account or any other account at a financial
institution without the prior written consent of the Required Lenders, which
approval may be withheld in their sole discretion.

     

    (r)           Monthly
Meetings.  At least once per calendar month, upon request of
the Administrative Agent, at mutually acceptable times (and with telephonic
conferences being acceptable), the Borrower Agent shall, and shall procure that
representatives of the Borrower’s professionals (including counsel and financial
advisors) as may be requested by the Administrative Agent, meet together with
the Administrative Agent to update the Administrative Agent on the status of the
Cases and to discuss any other issues in connection therewith as may be
requested by the Administrative Agent.

     

    (s)           Further
Assurances.  Upon written request of the Administrative Agent,
each Borrower shall promptly perform or cause to be performed any and all acts
and execute or cause to be executed any and all documents (including UCC
financing statements and UCC continuation statements) reasonably requested by
the Administrative Agent for the purposes of ensuring the validity and legality
of this Agreement or any other Financing Document and the rights of the Lenders
and the Agents hereunder or thereunder and facilitating the proper exercise of
rights and powers granted to the Lenders or the Agents under this Agreement or
any other Financing Document.

     

    Section
7.02  Negative
Covenants.  Each Borrower agrees with each Agent and each
Lender that, until the Discharge Date, each Borrower will perform the
obligations set forth in this Section 7.02
applicable to it.

     

    (a)           Restrictions on
Indebtedness.  The Borrowers will not create, incur, assume or
suffer to exist any Indebtedness except:

     

    
      	
               
      

            	
              (i)

            	
              the
      Obligations;

            


    

     

    
      	
               
      

            	
              (ii)

            	
              the
      Pre-Petition Obligations;

            


    

     

    
      	
               
      

            	
              (iii)

            	
              to
      the extent constituting Indebtedness, contingent obligations under or in
      respect of performance bonds, bid bonds, appeal bonds, indemnification
      obligations, obligations to pay insurance premiums, take or pay
      obligations and similar obligations in each case incurred in the ordinary
      course of business and otherwise permitted under this Agreement and not in
      connection with Indebtedness for borrowed money, with respect to bonds, in
      an aggregate amount not to exceed $50,000 at any one time
      outstanding;

            


    

     

     

    
      
        
        

      

      
        40

        
          

        

      

      
        
        

      

    

     

     

    
      	
               
      

            	
              (iv)

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

            


    

     

    
      	
               
      

            	
              (v)

            	
              Capitalized
      Lease Liabilities with respect to office equipment with payments in any
      Fiscal Year, taken in the aggregate for the Project, in an amount not to
      exceed one hundred thousand Dollars
($100,000);

            


    

     

    
      	
               
      

            	
              (vi)

            	
              the
      PE Imperial Leases; and

            


    

     

    
      	
               
      

            	
              (vii)

            	
              Pre-Petition
      Indebtedness existing on the Petition Date to the extent not prohibited by
      the Pre-Petition Credit Agreement.

            


    

     

    (b)           Liens.  No
Borrower shall create, incur, assume or suffer to exist any Lien upon any of its
property, revenues or assets (including its Equity Interests), whether now owned
or hereafter acquired, except:

     

    
      	
               
      

            	
              (i)

            	
              Liens
      in favor, or for the benefit, of the Collateral Agent and the Senior
      Secured Parties;

            


    

     

    
      	
               
      

            	
              (ii)

            	
              Liens
      in favor, or for the benefit, of the Pre-Petition Collateral Agent and the
      Pre-Petition Senior Secured
Parties;

            


    

     

    
      	
               
      

            	
              (iii)

            	
              Liens
      for taxes, assessments and other governmental charges that are not yet due
      or the payment of which is the subject of a Contest or taxes that are
      otherwise not yet delinquent or for taxes as to which payment and
      enforcement is stayed under the Bankruptcy Code or pursuant to orders of
      the Bankruptcy Court;

            


    

     

    
      	
               
      

            	
              (iv)

            	
              Liens
      of carriers, warehousemen, mechanics and materialmen incurred in the
      ordinary course of business for sums not yet due or the payment of which
      is the subject of a Contest or for amounts as to which payment and
      enforcement is stayed under the Bankruptcy Code or pursuant to orders of
      the Bankruptcy Court;

            


    

     

     

    
      
        
        

      

      
        41

        
          

        

      

      
        
        

      

    

     

     

    
      	
               
      

            	
              (v)

            	
              minor
      defects or irregularities in title and similar matters if the same do not
      materially detract from the operation or use of such property in the
      ordinary conduct of the business of the applicable Borrower, including any
      such exceptions and encumbrances which are approved by the Administrative
      Agent;

            


    

     

    
      	
               
      

            	
              (vi)

            	
              cash
      collateral for bonds permitted under Section 7.02(a)(iii)
      (Negative
      Covenants – Restrictions on Indebtedness) or otherwise
      provided that such cash collateral does not exceed $50,000 in the
      aggregate;

            


    

     

    
      	
               
      

            	
              (vii)

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

            


    

     

    
      	
               
      

            	
              (viii)

            	
              easements
      existing on the date hereof and previously disclosed to the Pre-Petition
      Administrative Agent or granted by any Borrower to any utility serving
      such Borrower’s Plant as required for the operation of such Plant; provided, that in each
      such case:

            


    

     

    
      	
               
      

            	
              (A)

            	
              such
      easement will not adversely affect the costs under the then-current DIP
      Budget

            


    

     

    
      	
               
      

            	
              (B)

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

            


    

     

    
      	
               
      

            	
              (C)

            	
              such
      easement has been approved by the Administrative
  Agent;

            


    

     

    
      	
               
      

            	
              (ix)

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

            


    

     

    
      	
               
      

            	
              (x)

            	
              Liens
      in respect of Capitalized Lease Liabilities with respect to office
      equipment permitted by Section
      7.02(a)(v)(Negative
      Covenants-Restrictions on
Indebtedness);

            


    

     

     

    
      
        
        

      

      
        42

        
          

        

      

      
        
        

      

    

     

     

    
      	
               
      

            	
              (xi)

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

            


    

     

    
      	
               
      

            	
              (xii)

            	
              Liens
      in respect of Pre-Petition Indebtedness existing on the Petition Date to
      the extent not prohibited by the Pre-Petition Credit
      Agreement.

            


    

     

    (c)           Permitted
Investments.  The Borrowers shall not make any investments,
loans or advances (whether by purchase of stocks, bonds, notes or other
securities, loans, extensions of credit, advances or otherwise) except for
investments (i) in Cash Equivalents, (ii) in connection with the bankruptcy of
suppliers or customers of the Borrowers (provided that such investments are
subject to a first priority perfected Lien in favor of the Collateral Agent) and
(iii) existing on the date hereof in Subsidiaries. The Borrowers shall select
Cash Equivalents having such maturities as shall cause the Project Accounts to
have a cash balance as of any day sufficient to cover the transfers made from
the Project Accounts on such day in accordance with this Agreement, the other
Financing Documents, the Project Documents and any Additional Project
Documents.

     

    (d)           Change in
Business.  No Borrower shall (i) enter into or engage in any
business other than the ownership, operation (including the Cold Shutdown of the
Madera Plant, the Magic Valley Plant, the Stockton Plant and, after the Boardman
CS Date, the Boardman Plant), maintenance, use and financing of the Plants or
the Project and all activities related thereto or (ii) change in any material
respect the scope of any Plant or the Project from that which exists as of the
date hereof.

     

    (e)           Equity
Issuances.  No Borrower shall issue any Equity Interests unless
such Equity Interests are immediately pledged to the Collateral Agent (for the
benefit of the Senior Secured Parties) on a first priority perfected
basis.

     

    (f)           Asset
Dispositions.   No Borrower shall sell, lease, assign,
transfer or otherwise dispose of any assets (other than Products), whether now
owned or hereafter acquired, except:

     

    
      	
               
      

            	
              (i)

            	
              disposal
      of assets that are promptly replaced in accordance with the then-current
      DIP Budget;

            


    

     

    
      	
               
      

            	
              (ii)

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

            


    

     

    
      	
               
      

            	
              (iii)

            	
              disposal
      of assets with a fair market value of, or, if greater, at a disposal price
      of, less than fifty thousand Dollars ($50,000) in the aggregate during any
      Fiscal year; provided, that
      such disposal does not, and would not reasonably be expected to, adversely
      effect the operation or maintenance of any
  Plant;

            


    

     

     

    
      
        
        

      

      
        43

        
          

        

      

      
        
        

      

    

     

     

    
      	
               
      

            	
              (iv)

            	
              transfers
      of assets among the Plants; provided, that
      (A) the aggregate total fair market value of all such transferred assets
      does not exceed five hundred thousand Dollars ($500,000) in any Fiscal
      Year, and (B) each such transfer does not, and would not reasonably be
      expected to, adversely affect the operations of the Plant from which such
      assets are transferred;

            


    

     

    
      	
               
      

            	
              (v)

            	
              the
      transfer or other Disposition by any Borrower in settlement of any amount
      owed by such Borrower effected in the ordinary course of business and
      approved by the Bankruptcy Court;
or

            


    

     

    
      	
               
      

            	
              (vi)

            	
              as
      permitted by Section 7.02(c)
      (Negative
      Covenants-Permitted
      Investments).

            


    

     

    (g)           Consolidation,
Merger.  No Borrower will (i) directly or indirectly liquidate,
wind up, terminate, reorganize (except for the Cases or pursuant to an order of
the Bankruptcy Court) or dissolve (or suffer any liquidation, winding up,
termination, reorganization (except for the Cases or pursuant to an order of the
Bankruptcy Court) or dissolution) or otherwise wind up; or (ii) acquire (in one
transaction or a series of related transactions) all or any substantial part of
the assets, property or business of, or any assets that constitute a division or
operating unit of, the business of any Person or otherwise merge or consolidate
with or into any other Person.

     

    (h)           Transactions with
Affiliates.  No Borrower shall enter into or cause, suffer or
permit to exist any arrangement or contract with any of its Affiliates or any
other Person that owns, directly or indirectly, any Equity Interest in such
Borrower except Affiliated Project Documents.

     

    (i)          
 Accounts.  The
Borrowers shall not maintain, establish or use any deposit account, securities
account (as each such term is defined in the UCC) or other banking account other
than the Project Accounts and any Local Account set forth on Schedule 5.29, each
of which shall be subject to a Blocked Account Agreement.  The
Borrowers shall not change the name or account number of any of the Project
Accounts or Local Accounts without the prior written consent of the
Administrative Agent.

     

    (j)          
 Subsidiaries.  Pacific
Holding shall not create or acquire any Subsidiary other than Madera, Boardman,
Stockton or Burley nor enter into any partnership or joint
venture.  Each of Madera, Boardman, Stockton and Burley shall not
create or acquire any Subsidiary or enter into any partnership or joint
venture.

     

    (k)           ERISA.  No
Borrower will engage in any prohibited transactions under Section 406 of ERISA
or under Section 4975 of the Code.  No Borrower will incur any
obligation or liability in respect of any Plan, Multiemployer Plan or employee
welfare benefit plan providing post-retirement welfare benefits (other than a
plan providing continue coverage under Part 6 of Title I of ERISA) in each such
case without the prior written consent of the Administrative Agent (unless the
aggregate total obligations or liabilities of the Borrowers that could
reasonably be expected to arise, due to no fault of the Borrowers, in connection
therewith would not exceed five hundred thousand Dollars
($500,000)).

     

     

    
      
        
        

      

      
        44

        
          

        

      

      
        
        

      

    

     

     

    (l)          
 Taxes.  No
Borrower shall make any election to be treated as an association taxable as a
corporation for federal, state or local tax purposes.

     

    (m)           Project
Documents.  Other than changes that individually and in the
aggregate could not reasonably be expected to have a Material Adverse Effect, no
Borrower shall direct or consent or agree to (i) any amendment, modification,
supplement, or waiver to, or (ii) any termination, repudiation, cancellation or
rejection of, any Project Document to which it is a party and that is
contemplated by the then-current DIP Budget without the prior written consent of
the Required Lenders.  Except for collateral assignments to the
Collateral Agent, no Borrower shall assign any of its rights under any Project
Document to which it is a party to any Person, or consent to the assignment of
any obligations under any such Project Document by any other party
thereto.

     

    (n)           Accounting
Changes.  No Borrower shall make any change in (i) its
accounting policies or reporting practices, except as required by GAAP or as
otherwise notified to the Administrative Agent in writing (provided that the
Borrowers shall provide an historical reconciliation for the prior audited
period addressing any such change in accounting practices), or (ii) its Fiscal
Year without the prior written consent of the Administrative Agent.

     

    (o)           Additional Project
Documents.  None of Pacific Holding or any other Borrower shall
enter into any Additional Project Document that is not contemplated by the
then-current DIP Budget except with the prior written approval of the
Administrative Agent.

     

    (p)           Suspension or
Abandonment.  No Borrower owning a Plant shall (i) permit or
suffer to exist an Event of Abandonment relating to such Plant or (ii) order or
consent to any suspension of work in excess of sixty (60) days under any Project
Document relating to such Plant, in each such case without the prior written
approval of the Required Lenders.

     

    (q)           Use of Proceeds; Margin
Regulations.  No Borrower shall use any proceeds of any Loan
other than in accordance with the provisions of Article II (Commitments
and Borrowing) and Section 7.01(g)
(Affirmative
Covenants – Use of Proceeds).  No
Borrower shall use any part of the proceeds of any Loan to purchase or carry any
Margin Stock (as defined in Regulation U) or to extend credit to others for the
purpose of purchasing or carrying any Margin Stock.  No Borrower shall
use the proceeds of any Loan in a manner that could violate or be inconsistent
with the provisions of Regulations T, U or X.

     

    (r)        
   Environmental
Matters.  Except to the extent not reasonably expected to
result in an Environmental Claim and in compliance with all applicable Laws, the
Borrowers shall not permit (i) any underground storage tanks to be located on
any property owned or leased by any Borrower, (ii) any asbestos to be contained
in or form part of any building, building component, structure or office space
owned by any Borrower, (iii) any polychlorinated biphenyls (PCBs) to be used or
stored at any property owned by any Borrower, (iv) any other Materials of
Environmental Concern to be used, stored or otherwise be present at any property
owned by any Borrower, other than Materials of Environmental Concern necessary
for the operation of the Project and used in accordance with Prudent Ethanol
Operating Practice or (v) any other Materials of Environmental Concern to be
used, stored or otherwise be present at any property owned or leased by any
Borrower.

     

     

    
      
        
        

      

      
        45

        
          

        

      

      
        
        

      

    

     

     

    (s)          
Restricted
Payments.  The Borrowers shall not make any Restricted Payments
except for Restricted Payments (i) among Debtors solely in accordance with the
then-current DIP Budget or (ii) with the prior consent of the Required
Lenders.

     

    (t)            Commodity Hedging
Arrangements.  The Borrowers shall not enter into any Commodity
Hedging Arrangements.

     

    (u)           Chapter 11
Claims.  Except for the Carve-Out, no Debtor shall incur,
create, assume, suffer to exist or permit any super-priority administrative
claim against such Debtor which is pari passu with or
senior to the claims of the Senior Secured Parties against the Debtors, except
as set forth in Section 2.09
(Super-Priority
Nature of Obligations).

     

    (v)          
DIP
Budgets.  No Borrower shall make any change in the DIP Budget
without the prior written consent of the Administrative Agent and the Required
Lenders.

     

    (w)          Financial
Covenants.

     

    
      	
               
      

            	
              (i)

            	
              The
      Borrowers shall not permit amounts disbursed pursuant to the category in
      the DIP Budget entitled “Asset Management Agreement” (excluding the line
      item entitled “Asset Management Fee”) in any Monthly Budget Period to
      exceed the amounts set forth in the line item entitled “Total Asset
      Management Agreement” (excluding “Asset Management Fee”) for such Monthly
      Budget Period in the Initial DIP Budget by more than ten percent
      (10%).

            


    

     

    
      	
               
      

            	
              (ii)

            	
              The
      Borrowers shall not permit professional fees (other than the fees and
      expenses of the advisors and consultants working on behalf of the Senior
      Secured Parties) in any period of time measured from the Petition Date to
      exceed the amounts set forth in the line item entitled “Total Professional
      Fees & Administrative Expenses” (excluding “Legal Advisors – DIP
      Lenders” and “Financial Advisors – DIP Lenders”) for such period of time
      in the Initial DIP Budget by more than three hundred thousand Dollars
      ($300,000).

            


    

     

    
      	
               
      

            	
              (iii)

            	
              The
      Borrowers shall not permit amounts disbursed pursuant to the category in
      the DIP Budget entitled “Operating Disbursements” in any Monthly Budget
      Period to exceed the amounts set forth in the line item entitled “Total
      Operating Disbursements” for such Monthly Budget Period in the then
      applicable DIP Budget by more than ten percent
  (10%).

            


    

     

     

    
      
        
        

      

      
        46

        
          

        

      

      
        
        

      

    

     

     

    Section
7.03  Reporting
Requirements.  The Borrowers will furnish to the Administrative
Agent, who shall distribute copies of the following to each Lender:

     

    (a)           on
the second Business Day of each week after the date of this Agreement, an
updated rolling cash flow forecast ending on the earlier of (i) thirteen (13)
weeks after the week in which such cash flow forecast is delivered and (ii) the
scheduled Maturity Date (each such forecast, a “Weekly Cash Flow
Forecast”), in the same form and with the same level of detail as the
then-current DIP Budget (it being understood, however, that approval of the DIP
Budget by the Required Lenders shall only be required once a month in accordance
with Section 7.01(l)
(Affirmative
Covenants – DIP Budgets));

     

    (b)           on
the second Business Day of each week following the date hereof, a report setting
forth, in a form and in sufficient detail satisfactory to the Administrative
Agent, a comparison of actual receipts and expenses to budgeted receipts and
expenses in the then-current DIP Budget for the preceding week;

     

    (c)           as
soon as available and in any event within twenty-five (25) days after the end of
each calendar month, a report setting forth, in each case in a form and in
sufficient detail satisfactory to the Administrative Agent, (x) balance sheets
of each Borrower as of the end of such month, (y) statements of income and cash
flows of each Borrower for such month, and for the period commencing at the end
of the previous Fiscal Year and ending with the end of such month and (z) profit
and loss statements of each Borrower for such month and for the period
commencing at the end of the previous Fiscal Year and ending with the end of
such month, in each case, prepared in accordance with GAAP (subject to the
absence of footnote disclosures and to normal year-end adjustments). Such report
shall be certified as complete and correct by an Authorized Officer of the
Borrower Agent, who also shall certify for each financial covenant set forth in
Section 7.02(w)
(Negative
Covenants - Financial Covenants) that the Borrowers
are in full compliance with each such covenant or, if any of such certifications
cannot be given, stating in reasonable detail the necessary qualifications to
such certifications;

     

    (d)           promptly
upon receipt, copies of any detailed audit reports, management letters or
recommendations submitted to any Borrower (or the audit or finance committee of
any Borrower) by the Auditors in connection with the accounts or books of any
Borrower, or any audit of any Borrower;

     

    (e)           as
soon as possible and in any event within five (5) days after the occurrence of
any Default or Event of Default, a statement of an Authorized Officer of the
Borrower Agent setting forth details of such Default or Event of Default and the
action that the Borrowers have taken and propose to take with respect
thereto;

     

    (f)           within
five (5) days after any Borrower obtains knowledge thereof a statement of an
Authorized Officer of the Borrower Agent setting forth details of:

     

    
      	
               
      

            	
              (i)

            	
              any
      litigation or governmental proceeding pending or threatened in writing
      against any Borrower;

            


    

     

     

    
      
        
        

      

      
        47

        
          

        

      

      
        
        

      

    

     

     

    
      	
               
      

            	
              (ii)

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

            


    

     

    
      	
               
      

            	
              (iii)

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

            


    

     

    
      	
               
      

            	
              (iv)

            	
              notification
      of any event of force majeure or similar event under a Project Document
      which is expected to continue for more than five (5) days or, to the
      knowledge of a Borrower, result in increased costs of at least one hundred
      thousand Dollars ($100,000);

            


    

     

    (g)           promptly
after delivery or receipt thereof, copies of all material notices or documents
given or received by any Borrower, pursuant to any of the Project Documents
including:

     

    
      	
               
      

            	
              (i)

            	
              any
      written notice alleging any breach or default thereunder;
    and

            


    

     

    
      	
               
      

            	
              (ii)

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

            


    

     

    (h)           as
soon as possible and in any event within five (5) Business Days after any
Borrower knows, or has reason to know, that any of the events described below
have occurred, a duly executed certificate of an Authorized Officer of the
Borrower Agent setting forth the details of each such event and the action that
the Borrowers propose to take with respect thereto, together with a copy of any
notice or filing from the PBGC, Internal Revenue Service, Department of Labor or
that may be required by the PBGC or other U.S. Governmental Authority with
respect to each such event:

     

    
      	
               
      

            	
              (i)

            	
              any
      Termination Event with respect to an ERISA Plan or a Multiemployer Plan
      has occurred or will occur that could reasonably be expected to result in
      any material liability to any
Borrower;

            


    

     

    
      	
               
      

            	
              (ii)

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

            


    

     

    
      	
               
      

            	
              (iii)

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

            


    

     

    
      	
               
      

            	
              (iv)

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

            


    

     

     

    
      
        
        

      

      
        48

        
          

        

      

      
        
        

      

    

     

     

    
      	
               
      

            	
              (v)

            	
              there
      exists any Unfunded Benefit Liabilities under any ERISA
    Plan;

            


    

     

    
      	
               
      

            	
              (vi)

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

            


    

     

    
      	
               
      

            	
              (vii)

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

            


    

     

    
      	
               
      

            	
              (viii)

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

            


    

     

    
      	
               
      

            	
              (ix)

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

            


    

     

    
      	
               
      

            	
              (x)

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

            


    

     

    (i)           as
soon as possible and in any event within five (5) Business Days after the
receipt by any Borrower of a demand letter from the PBGC notifying such Borrower
of its final decision finding liability and the date by which such liability
must be paid, a copy of such letter, together with a duly executed certificate
of the president or chief financial officer of such Borrower setting forth the
action that such Borrower proposes to take with respect thereto;

     

    (j)           promptly
and in any event within five (5) Business Days after the existence of any of the
following conditions, a duly executed certificate of an Authorized Officer of
the Borrower Agent specifying in detail the nature of such condition and, if
applicable, the proposed response of the Borrowers thereto:

     

    
      	
               
      

            	
              (i)

            	
              receipt
      by any Borrower of any written communication from a Governmental Authority
      or any written communication from any other Person or other source of
      written information, including (to the extent not privileged) reports
      prepared by any Borrower, that alleges or indicates that any Borrower or
      an Environmental Affiliate is not in compliance in all material respects
      with applicable Environmental Laws or Environmental
    Approvals;

            


    

     

     

    
      
        
        

      

      
        49

        
          

        

      

      
        
        

      

    

     

     

    
      	
               
      

            	
              (ii)

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

            


    

     

    
      	
               
      

            	
              (iii)

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

            


    

     

    
      	
               
      

            	
              (iv)

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

            


    

     

    (k)           on
reasonable notice during regular business hours, accurate and complete records
of all non-privileged correspondence, investigations, studies, sampling and
testing conducted, and any and all remedial actions taken, by any Borrower or,
to the best of any Borrower’s knowledge and to the extent obtained by any
Borrower, by any Governmental Authority or other Person in respect of Materials
of Environmental Concern that could reasonably be expected to form the basis of
an Environmental Claim on or affecting any Plant or the Project;

     

    (l)        
   within twenty-five (25) days after the end of each calendar
month, an Operating Statement certified as complete and correct by an Authorized
Officer of the Borrower Agent regarding the operation and performance of each
Plant for such month.  Such Operating Statements shall contain (i)
line items corresponding to the DIP Budget showing in reasonable detail all
actual expenses related to the operation and maintenance of each Plant compared
to the budgeted expenses for such period, (ii) information showing the amount of
ethanol and other Products produced by each Plant during such period and (iii)
information showing (A) the amount of ethanol sold by the Borrowers from each
Plant to pursuant to the Ethanol Offtake Agreements, (B) the amount of
Distillers Grains sold by the Borrowers from each Plant pursuant to the DG
Offtake Agreements, and (C) the amount, if any, of other sales of ethanol and/or
Distillers Grains, together with an explanation of any such sale and
identification of the purchaser, and (D) the amount, if any, of other Products
sold by the Borrowers from the Plants, together with an explanation of any such
sale and identification of the purchaser; and

     

    (m)           other
information reasonably requested by the Administrative Agent or any Lender,
through the Administrative Agent.

     

    


    
      
        
        

      

      
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    ARTICLE
VIII

     

    [INTENTIONALLY
OMITTED]

     

    


     

    ARTICLE
IX


     

    DEFAULT
AND ENFORCEMENT

     

    Section
9.01  Events of
Default.  Notwithstanding the provisions of Section 362 of
the Bankruptcy Code and without notice, application or motion to, hearing
before, or order of the Bankruptcy Court or any notice to any Borrower, each of
the following events or occurrences described in this Section 9.01 shall
constitute an Event of Default.

     

    (a)           Nonpayment.  Any
Borrower fails to pay (i) any amount of principal of any Loan when the same
becomes due and payable or (ii) any interest on any Loan or any fee or other
Obligation or amount payable hereunder or under any other Financing Document
within three (3) Business Days after the same becomes due and
payable.

     

    (b)           Breach of
Warranty.  Any representation or warranty of any Borrower made
or deemed to be restated or remade in any Financing Document is or shall be
incorrect or misleading in any material respect when made or deemed made; provided that (i) if
such Borrower was not aware that such representation or warranty was incorrect
or misleading at the time such representation or warranty was made or deemed
repeated, (ii) the fact, event or circumstance resulting in such incorrect or
misleading representation or warranty is capable of being cured, corrected or
otherwise remedied, (iii) such fact, event or circumstance resulting in such
incorrect or misleading representation or warranty is cured, corrected or
otherwise remedied within thirty (30) days from the date any Borrower obtains,
or should have obtained, knowledge thereof, and (iv) no Material Adverse Effect
shall have occurred as a result of such representation or warranty being
incorrect or misleading, then such incorrect representation or warranty shall
not constitute an Event of Default.

     

    (c)           Non-Performance of Certain
Covenants and Obligations.  Any Borrower defaults in the due
performance and observance of any of its obligations under any of Sections 7.01(g) (Affirmative
Covenants – Use of Proceeds), 7.01(h) (Affirmative
Covenants – Insurance), 7.02 (Negative
Covenants) and 7.03 (Reporting
Requirements) of this
Agreement.

     

    (d)           Non-Performance of Other
Covenants and Obligations.  Any Borrower defaults in the due
performance and observance of any covenant or agreement (other than covenants
and agreements referred to in Section 9.01(a) or
9.01(c))
contained in any Financing Document, and such default shall continue unremedied
for a period of thirty (30) days after any Borrower obtains, or should have
obtained, knowledge thereof.

     

     

    
      
        
        

      

      
        51

        
          

        

      

      
        
        

      

    

     

     

    (e)           Cross
Defaults.  Any one of the following occurs with respect to any
Borrower (with respect to any Indebtedness entered into (x) Pre-Petition
and which is assumed after the Petition Date or is not subject to the automatic
stay provisions of Section 362 of the Bankruptcy Code or
(y) Post-Petition) in the amount greater than $100,000:

     

    
      	
               
      

            	
              (i)

            	
              a
      default occurs in the payment when due (subject to any applicable grace
      period and notice requirements), whether by acceleration or otherwise, of
      such Indebtedness; or

            


    

     

    
      	
               
      

            	
              (ii)

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

            


    

     

    (f)           Judgments.  (i)
Any judgment or order that has or could reasonably be expected to have a
Material Adverse Effect is rendered against any Borrower or any Major Project
Party, or (ii) any judgment or order is rendered against any or all of the
Borrowers, in an amount in excess of two hundred and fifty thousand Dollars
($250,000) in the aggregate.

     

    (g)           ERISA
Events.  (i) Any Termination Event occurs, (ii) any Plan incurs
an “accumulated funding deficiency” (as defined in Section 412 of the Code or
Section 302 of ERISA), (iii) any Borrower or member of any Borrower’s ERISA
Controlled Group engages in a transaction that is prohibited under Section 4975
of the Code or Section 406 of ERISA, (iv) any Borrower or any ERISA Affiliate
fails to pay when due any amount it has become liable to pay to the PBGC, any
Plan or a trust established under Title IV of ERISA, (v) a condition exists by
reason of which the PBGC would be entitled to obtain a decree adjudicating that
an ERISA Plan must be terminated or have a trustee appointed to administer it,
(vi) any Borrower or any ERISA Affiliate suffers a partial or complete
withdrawal from a Multiemployer Plan or is in “default” (as defined in Section
4219(c)(5) of ERISA) with respect to payments to a Multiemployer Plan, (vii) a
proceeding is instituted against any Borrower to enforce Section 515 of ERISA,
(viii) the aggregate amount of the then “current liability” (as defined in
Section 412(l)(7) of the Code, as amended) of all accrued benefits under such
Plan or Plans exceeds the then current value of the assets allocable to such
benefits by more than two million Dollars ($2,000,000) at such time, or (ix) any
other event or condition occurs or exists with respect to any Plan that would
subject any Borrower to any tax, penalty or other liability.

     

    (h)           Project Document Defaults;
Termination.

     

    
      	
               
      

            	
              (i)

            	
              Any
      Borrower or any other Major Project Party shall be in material breach of
      or otherwise in material default under any Project Document (other than as
      a result of the Cases, the Cold Shutdown of the Madera Plant, the Magic
      Valley Plant, the Stockton Plant and, after the Boardman CS Date, the
      Boardman Plant or any breach or default that has not had and could not
      reasonably be expected to have a Material Adverse Effect) and such breach
      or default has continued beyond any applicable grace period expressly
      provided for in such Project Document (or if no cure period is provided,
      thirty (30) days).

            


    

     

     

    
      
        
        

      

      
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              (ii)

            	
              Any
      Project Document ceases to be in full force and effect prior to its
      scheduled expiration, is repudiated, or its enforceability is challenged
      or disaffirmed by or on behalf of any Borrower or any Project Party
      thereto, except for any Project Document the invalidity of which could not
      reasonably be expected to have a Material Adverse
  Effect.

            


    

     

    (i)           Governmental
Approvals.  Any Borrower fails to obtain, renew, maintain or
comply in all material respects with any Necessary Project Approval or any
Necessary Project Approval is revoked, canceled, terminated, withdrawn or
otherwise ceases to be in full force and effect, or any Necessary Project
Approval is modified without the consent of the Required Lenders in a manner
that, in each case, has, or could reasonably be expected to result in, a
Material Adverse Effect on such Borrower or its Plant.

     

    (j)           Unenforceability of
Pre-Petition Documentation.  Except as a result of an Effect of
Bankruptcy:

     

    
      	
               
      

            	
              (i)

            	
              any
      material provision of any Pre-Petition Financing Document shall cease to
      be in full force and effect;

            


    

     

    
      	
               
      

            	
              (ii)

            	
              any
      Pre-Petition Financing Document is revoked or terminated, becomes unlawful
      or is declared null and void by a Governmental Authority of competent
      jurisdiction; and

            


    

     

    
      	
               
      

            	
              (iii)

            	
              any
      Pre-Petition Financing Document becomes unenforceable, is repudiated or
      the enforceability thereof is contested or disaffirmed by or on behalf of
      any party thereto other than the Pre-Petition Senior Secured
      Parties.

            


    

     

    (k)          Unenforceability of
Documentation.  At any time after the execution and delivery
thereof:

     

    
      	
               
      

            	
              (i)

            	
              any
      material provision of any Financing Document shall cease to be in full
      force and effect;

            


    

     

    
      	
               
      

            	
              (ii)

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

            


    

     

    
      	
               
      

            	
              (iii)

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

            


    

     

    
      	
               
      

            	
              (iv)

            	
              any
      Liens against any of the Collateral cease to be a first priority,
      perfected security interest in favor of the Collateral Agent, or the
      enforceability thereof is contested by any Borrower, or any of this
      Agreement or the Orders ceases to provide the security intended to be
      created thereby with the priority purported to be created
      thereby.

            


    

     

     

    
      
        
        

      

      
        53

        
          

        

      

      
        
        

      

    

     

    (l)           Environmental
Matters.  (i) Any Environmental Claim has occurred with respect
to any Borrower, any Plant or any Environmental Affiliate, (ii) any release,
emission, discharge or disposal of any Material of Environmental Concern occurs,
and such event could reasonably be expected to form the basis of an
Environmental Claim against any Borrower, any Plant or any Environmental
Affiliate, or (iii) any violation or alleged violation of any Environmental Law
or Environmental Approval occurs that would reasonably result in an
Environmental Claim against any Borrower or any Plant or, to the extent any
Borrower may have liability, any Environmental Affiliate, that, in the case of
any of Sections
9.01(m)(i), (ii) or (iii), could
reasonably be expected to result in liability for any Borrower (or the Borrowers
on an aggregate basis) in an amount greater than two hundred thousand Dollars
($200,000) for any single claim or two hundred and fifty thousand Dollars
($250,000) for all such claims during  any twelve (12) month period or
could otherwise reasonably be expected to result in a Material Adverse
Effect.

     

    (m)           Loss of
Collateral.  Any portion of the Collateral (other than a
portion that is immaterial) is damaged, seized or appropriated; provided, that such an
occurrence shall not constitute an Event of Default if the applicable Borrowers
repair, replace, rebuild or refurbish such damaged, seized or appropriated
Collateral with the approval of the Required Lenders, in consultation with the
Independent Engineer.

     

    (n)           Event of
Abandonment.  An Event of Abandonment occurs.

     

    (o)           Taking or Total
Loss.  An Event of Taking with respect to all or a material
portion of any Plant or any Equity Interests comprising the Collateral occurs,
or an Event of Total Loss occurs.

     

    (p)           Reorganization
Matters.  Any of the following occurs in any Chapter 11
Case:

     

    
      	
               
      

            	
              (i)

            	
              the
      bringing of a motion or taking of any action by a
      Debtor:  (w) to obtain additional financing under
      Section 364(c) or (d) of the Bankruptcy Code not otherwise
      permitted pursuant to this Agreement; (x) to grant any Lien other
      than Permitted Lien upon or affecting any Collateral; (y) except as
      provided in the Interim Order, Final Order or DIP Budget, as the case may
      be, to use cash collateral under Section 363(c) of the Bankruptcy
      Code without the prior written consent of the Administrative Agent and the
      Lenders; or

            


    

     

    
      	
               
      

            	
              (ii)

            	
              the
      entry of an order in any of the Chapter 11 Cases confirming a plan or
      plans of reorganization that does not contain a provision for termination
      of the DIP Facility and repayment in full in cash of all the Obligations
      on or before the effective date of such plan or plans;
  or

            


    

     

     

    
      
        
        

      

      
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              (iii)

            	
              the
      entry of an order amending, supplementing, staying, vacating or otherwise
      modifying the Financing Documents or the Interim Order or the Final Order
      without the written consent of the Administrative Agent and the Lenders or
      the filing by a Debtor of a motion for reconsideration with respect to the
      Interim Order or the Final Order;
or

            


    

     

    
      	
               
      

            	
              (iv)

            	
              the
      Interim Order is not entered on or before the date that is 10 days
      after the Petition Date; or

            


    

     

    
      	
               
      

            	
              (v)

            	
              the
      Final Order is not entered on or before the date that is 45 days
      after the date of entry of the Interim Order;
or

            


    

     

    
      	
               
      

            	
              (vi)

            	
              the
      payment of any Pre-Petition claim unless (i) reflected in the DIP Budget
      or (ii) authorized pursuant to an order approved by the Bankruptcy Court
      and made with the written consent of the Administrative Agent and the
      Lenders; or

            


    

     

    
      	
               
      

            	
              (vii)

            	
              the
      allowance of any claim or claims under Sections 506(c) or 552(b) of
      the Bankruptcy Code or otherwise against the Collateral;
  or

            


    

     

    
      	
               
      

            	
              (viii)

            	
              the
      appointment of an interim or permanent trustee in any Chapter 11 Case
      or the appointment of a receiver or an examiner in any Chapter 11
      Case with expanded powers to operate or manage the financial affairs, the
      business, or reorganization of a Debtor;
or

            


    

     

    
      	
               
      

            	
              (ix)

            	
              the
      sale, without the written consent of the Administrative Agent and the
      Lenders, of all or substantially all of a Debtor’s assets either through a
      sale under Section 363 of the Bankruptcy Code, through a confirmed
      plan of reorganization in the Chapter 11 Cases, or otherwise that
      does not provide for payment in full in cash of the Obligations;
      or

            


    

     

    
      	
               
      

            	
              (x)

            	
              the
      dismissal of any Chapter 11 Case, or the conversion of any
      Chapter 11 Case from one under Chapter 11 to one under
      Chapter 7 of the Bankruptcy Code or a Debtor shall file a motion or
      other pleading seeking the dismissal of any Chapter 11 Case under
      Section 1112 of the Bankruptcy Code or otherwise;
  or

            


    

     

     

    
      
        
        

      

      
        55

        
          

        

      

      
        
        

      

    

     

     

    
      	
               
      

            	
              (xi)

            	
              the
      entry of an order by the Bankruptcy Court granting relief from or
      modifying the automatic stay of Section 362 of the Bankruptcy Code to
      allow any creditor other than a Senior Secured Party to proceed against
      any material asset of a Debtor; or

            


    

     

    
      	
               
      

            	
              (xii)

            	
              the
      entry of an order in any Chapter 11 Case avoiding or requiring
      repayment of any portion of the payments made on account of the
      Obligations; or

            


    

     

    
      	
               
      

            	
              (xiii)

            	
              the
      failure of a Debtor to perform any of its obligations under the Interim
      Order or the Final Order; or

            


    

     

    
      	
               
      

            	
              (xiv)

            	
              the
      entry of an order in any of the Chapter 11 Cases granting any other
      super-priority claim or Lien equal or superior to the Lien of the
      Collateral Agent other than adequate protection Liens approved by the
      Bankruptcy Court in the Interim Order or the Final Order;
    or

            


    

     

    
      	
               
      

            	
              (xv)

            	
              a Debtor engages in or supports any challenge to
      the validity, perfection, priority, extent or enforceability of the DIP
      Facility or the Pre-Petition Obligations or the liens on or security
      interests in the assets of such Debtor securing the DIP Facility or the
      Pre-Petition Obligations, including seeking to equitably subordinate or
      avoid the liens securing the Pre-Petition Obligations;
      or

            


    

     

    
      	
               
      

            	
              (xvi)

            	
              a
      Debtor engages in or supports any investigation or asserts any claim or
      cause of action (or supports the assertion of the same) against the
      Administrative Agent, the  Lenders, the Pre-Petition
      Administrative Agent or the Pre-Petition Senior Secured Parties; provided, however, it
      shall not constitute an Event of Default if a Debtor provides basic loan
      information with respect to the Pre-Petition Obligations to a party in
      interest or pursuant to an order of the Bankruptcy Court and provides
      prior written notice to the Administrative Agent and the Lenders of its
      intention or obligation to do so;
or

            


    

     

    
      	
               
      

            	
              (xvii)

            	
              any
      Person shall seek a Section 506(a) Determination with respect to the
      Pre-Petition Obligations that is unacceptable to the Pre-Petition
      Administrative Agent and the Pre-Petition Senior Secured Parties;
      or

            


    

     

    
      	
               
      

            	
              (xviii)

            	
              the entry of an order extending
      any exclusive right that any Debtor may have to propose a plan more than
      120 days after the Petition Date, or to solicit votes or to seek
      confirmation of plan on a date more than 180 days after the Petition Date,
      in either case without the written consent of the Administrative Agent and
      the Lenders; or

            


    

     

     

    
      
        
        

      

      
        56

        
          

        

      

      
        
        

      

    

     

     

    
      	
               
      

            	
              (xix)

            	
              Lyles
      United, LLC (or any Affiliate thereof) or Pacific Ethanol (or any
      Affiliate thereof) shall assert any claim (actual or contingent) (except
      any claim asserted by Pacific Ethanol arising out of the Asset Management
      Agreement) in any Case or shall challenge, contest or interfere, directly
      or indirectly, with any claim of any Senior Secured Party or any
      Pre-Petition Senior Secured Party in any Case;
  or

            


    

     

    
      	
               
      

            	
              (xx)

            	
              any
      Project Document is rejected in any of the Cases without the prior consent
      of the Required Lenders.

            


    

     

    
      (q)           Asset Management
Agreement.  The Asset Management Agreement shall be terminated
as a result of a breach thereunder by Pacific Ethanol or Pacific Ethanol or any
Affiliate of Pacific Ethanol shall challenge the validity or enforceability of
any performance guaranty of the obligations of Pacific Ethanol under the Asset
Management Agreement.

       

    

    (r)           Change of
Control.  A Change of Control occurs.

     

    Section
9.02  Action Upon Event of
Default.

     

    (a)           If
any Event of Default has occurred and is continuing, the Administrative Agent
shall, upon the direction of the Required Lenders, notwithstanding the
provisions of Section 362 of the Bankruptcy Code (the automatic stay of
Section 362 of the Bankruptcy Code shall be deemed modified and vacated to
permit the Senior Secured Parties to exercise their remedies under this
Agreement and the Financing Documents), without any application, motion or
notice to, hearing before, or order from, the Bankruptcy Court:
(i) terminate the DIP Facility; (ii) reduce the Commitment from time
to time; (iii) declare all or any portion of the Obligations due and
payable; (iv) increase the rate of interest applicable to the Obligations
to the Default Rate; (v) direct any or all of the Borrowers to sell or otherwise
dispose of any or all of the Collateral on terms and conditions acceptable to
the Administrative Agent and the Lenders pursuant to Sections 363, 365 and
other applicable provisions of the Bankruptcy Code (and, without limiting the
foregoing, direct any Borrower to assume and assign any lease or executory
contract included in the Collateral to the Collateral Agent’s designees in
accordance with and subject to Section 365 of the Bankruptcy Code),
(vi) enter onto the premises of any Borrower in connection with an orderly
liquidation of the Collateral, and (vii) exercise any rights and remedies
provided to the Senior Secured Parties under the Financing Documents or at law
or equity, including all remedies provided under the UCC and pursuant to the
Interim Order and the Final Order.

     

    (b)           Notwithstanding
anything to the contrary contained herein, the Senior Secured Parties shall not
be permitted to exercise any remedy (other than those described in
clauses (i), (ii), (iii) and (iv) of Section 9.02(a) (Action
Upon Event of Default))  unless the Administrative Agent shall
have given three (3) Business Days written notice
(the “Notice
Period”) to the Debtors, counsel to the
Committee and the Office of the U.S. Trustee during which Notice Period the
Debtors and the Committee may seek relief from the Bankruptcy Court to re-impose
or continue the automatic stay with respect to any remedy other than
those described in clauses (i), (ii), (iii) and (iv) of Section 9.02(a) (Action
Upon Event of Default); provided, that in any hearing after the giving of the
aforementioned notice, the only issue that may be raised by the Debtors and the Committee being whether, in
fact, an Event of Default has occurred and is continuing.

     

     

    
      
        
        

      

      
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    Section
9.03  Remedies.  Upon
the occurrence and during the continuation of an Event of Default, the
Collateral Agent shall have the right, but not the obligation, subject to the
Orders, to do any of the following:

     

    (a)           vote
or exercise any and all of any Borrower's rights or powers incident to its
ownership of Equity Interests in any Borrower, including any rights or powers to
manage or control such Borrower;

     

    (b)           demand,
sue for, collect or receive any money or property at any time payable to or
receivable by any Borrower on account of or in exchange for all or part of the
Equity Interests pledged by it pursuant to the Orders;

     

    (c)           amend,
terminate, supplement or modify all or any of the Organic Documents of the
Borrowers;

     

    (d)           proceed
to protect and enforce the rights vested in it hereunder and under the
UCC;

     

    (e)           cause
all revenues and all other moneys and other property forming part of the
Collateral to be paid and/or delivered directly to it, and demand, sue for,
collect and receive any such moneys and property;

     

    (f)           cause
any action at law or in equity or other proceeding to be instituted and
prosecuted to collect or enforce any of the Obligations, or rights hereunder or
included in the Collateral, or for specific enforcement of any covenant or
agreement contained herein or in any Project Documents or other agreements
forming part of the Collateral, or in aid of the exercise of any power herein or
therein granted, or for any foreclosure hereunder and sale under a judgment or
decree in any judicial proceeding, or to enforce any other legal or equitable
right vested in it by this Agreement or by Law;

     

    (g)           foreclose
or enforce any other agreement or other instrument by or under or pursuant to
which the Obligations are issued or secured;

     

    (h)           incur
expenses, including attorneys' fees, consultants' fees, and other costs in
connection with the exercise of any right or power under this Agreement or any
other Financing Document;

     

    (i)           perform
any obligation of any Borrower hereunder or under any other Financing Document
or any Project Document or other agreement forming part of the Collateral,
submit renewal notices or exercise any purchase options under leases, and make
payments, purchase, contest or compromise any encumbrance, charge, or lien, and
pay taxes and expenses and insure, process and preserve the Collateral without,
however, any obligation to do so;

     

     

    
      
        
        

      

      
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    (j)           take
possession of the Collateral and of any and all books of account and records of
the Borrowers relating to any of the Collateral and render it usable and repair
and renovate the same without, however, any obligation to do so, and enter upon,
or authorize its designated agent to enter upon, any location where the same may
be located for that purpose (including the right of the Collateral Agent to
exclude the Borrowers and all Persons claiming access through any of the
Borrowers from any access to the Collateral or to any part thereof) and the
Collateral Agent and its representatives are hereby granted an irrevocable
license to enter upon such premises for such purpose, control, manage, operate,
rent and lease the Collateral, either separately or in conjunction with the
Project, collect all rents and income from the Collateral and apply the same to
reimburse the Senior Secured Parties for any reasonable cost or expenses
incurred hereunder or under any of the Financing Documents and to the payment or
performance of any of the Obligations, and apply the balance to the Obligations
as provided herein and any remaining excess balance to whomsoever is legally
entitled thereto;

     

    (k)           make
any reasonable compromise or settlement deemed desirable with respect to any of
the Collateral and extend the time of payment, arrange for payment installments,
or otherwise modify the terms of, any Collateral;

     

    (1)           secure
the appointment of a receiver of the Collateral or any part thereof, whether
incidental to a proposed sale of the Collateral or otherwise, and all
disbursements made by such receiver and the expenses of such receivership shall
be added to and be made a part of the Obligations and, whether or not said
principal sum, including such disbursements and expenses, exceeds the
indebtedness originally intended to be secured hereby, the entire amount of said
sum, including such disbursements and expenses, shall be secured by the DIP
Liens and shall be due and payable upon demand therefor and thereafter shall
bear interest at the Default Rate or the maximum rate permitted by applicable
Law, whichever is less;

     

    (m)           enter
into any extension, reorganization, deposit, merger, consolidation or other
agreement pertaining to, or deposit, surrender, accept, hold or apply other
property in exchange for, the Collateral or any part thereof;

     

    (n)           transfer
the Collateral or any part thereof to the name of the Collateral Agent or to the
name of a Collateral Agent's nominee;

     

    (o)           take
possession of and endorse in the name of any Borrower or in the name of the
Collateral Agent, for the account of any Borrower, any bills of exchange,
checks, drafts, money orders, notes or any other chattel paper, documents or
instruments constituting all or any part of the Collateral or received as
interest, rent or other payment on or on account of the Collateral or any part
thereof or on account of its sale or lease;

     

    (p)           appoint
another Person (who may be an employee, officer or other representative of the
Collateral Agent) to do any of the foregoing, or take any other action permitted
hereunder, on behalf of the Collateral Agent;

     

     

    
      
        
        

      

      
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    (q)           execute
(in the name, place and stead of any Borrower) endorsements, assignments and
other instruments of conveyance or transfer with respect to all or any of the
Collateral;

     

    (r)           take
any other action which the Collateral Agent deems necessary or desirable to
protect or realize upon its security interest in the Collateral or any part
thereof;

     

    (s)           require
each Borrower to assemble the Collateral or any part thereof and to make the
same (to the extent the same is reasonably moveable) available to the Collateral
Agent at a place to be designated by the Collateral Agent which is reasonably
convenient to the Borrowers and the Collateral Agent;

     

    (t)           make
formal application for the transfer of all or any Governmental Approvals of any
Borrower to the Collateral Agent or to any assignee of the Collateral Agent or
to any purchaser of any of the Collateral to the extent the same are assignable
in accordance with their terms and applicable Laws;

     

    (u)           bring
an action or proceeding to foreclose or proceed to sell any real property
pursuant to a power of sale; and/or

     

    (v)           exercise
any other or additional rights or remedies granted to the Collateral Agent under
any other provision of this Agreement or any other Financing Document, or
exercisable by a secured party under the UCC or under any other applicable Law
and without limiting the generality of the foregoing and without notice except
as specified below, sell the Collateral or any part thereof in one or more
parcels at public or private sale, at any exchange or broker's board or
elsewhere, at such price or prices and on such other terms as the Collateral
Agent may deem commercially reasonable in accordance with the UCC.

     

    Section
9.04  Minimum Notice
Period.  If, pursuant to applicable Laws, prior notice of any
action described in Section 9.03 (Remedies) is required to be
given to any Borrower, each Borrower hereby acknowledges that the minimum time
required by such applicable Laws, or, if no minimum time is specified, ten (10)
days shall be deemed a reasonable notice period.

     

    Section
9.05  Sale of
Collateral.  In addition to exercising the foregoing rights,
the Collateral Agent may, to the extent permitted by applicable Laws and subject
to the Orders, arrange for and conduct the sale of the Collateral at a public or
private sale (as the Collateral Agent may elect) which sale may be conducted by
an employee or representative of the Collateral Agent, and any such sale shall
be conducted in a commercially reasonable manner.  The Collateral
Agent may release, temporarily or otherwise, to the applicable Borrower any item
of Collateral of which the Collateral Agent has taken possession pursuant to any
right granted to the Collateral Agent by this Agreement without waiving any
rights granted to the Collateral Agent under this Agreement, the other Financing
Documents or any other agreement related hereto or thereto.  Each
Borrower, in dealing with or disposing of the Collateral or any part thereof,
hereby waives all rights, legal and equitable, it may now or hereafter have to
require marshaling of assets or to require, upon foreclosure, sales of assets in
a particular order.  Each successor of any Borrower under the
Financing Documents agrees that it shall be bound by the above waiver, to the
same extent as if such successor gave the waiver itself.  Each
Borrower also hereby waives, to the full extent it may lawfully do so, the
benefit of all laws providing for rights of appraisal, valuation, stay,
extension or redemption after foreclosure now or hereafter in
force.  If the Collateral Agent sells any of the Collateral upon
credit, the Borrower in respect of such Collateral will be credited only with
payments actually made by the purchaser and received by the Collateral
Agent.  In the event the purchaser fails to pay for the Collateral,
the Collateral Agent may resell the Collateral and the relevant Borrower shall
be credited with the proceeds of the sale in excess of the amounts required to
pay the Obligations in full.  In the event the Collateral Agent bids
at any foreclosure or trustee's sale or at any private sale permitted by Law and
this Agreement or any other Financing Document, the Collateral Agent may bid all
or less than the amount of the Obligations.  The Collateral Agent
shall not be obligated to make any sale of Collateral regardless of whether or
not notice of sale has been given.  The Collateral Agent may adjourn
any public or private sale from time to time by announcement at the time and
place fixed therefor, and such sale may, without further notice, be made at the
time and place to which it was so adjourned.  Each Borrower further
acknowledges and agrees that any offer to sell any part of the Collateral that
has been (i) publicly advertised on a bona fide basis in a newspaper or
other publication of general circulation or (ii) made privately in the
manner described herein to not less than fifteen (15) bona fide offerees shall
be deemed to involve a "public disposition" for the purposes of Section 9-610(c)
of the UCC.

     

     

    
      
        
        

      

      
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    Section
9.06  Actions Taken by Collateral
Agent.  Any action or proceeding to enforce this Agreement or
any Project Document or other agreement forming part of the Collateral may be
taken by the Collateral Agent either in the name of the applicable Borrower or
in the Collateral Agent's name, as the Collateral Agent may deem
necessary.

     

    Section
9.07  Private
Sales.  The Collateral Agent shall incur no liability as a
result of the sale of the Collateral, or any part thereof, at any private sale
made in good faith by Collateral Agent pursuant to Section 9.03 (Remedies) or Section 9.05 (Sale of
Collateral) conducted in a
commercially reasonable manner and in accordance with the requirements of
applicable Laws.  Each Borrower hereby waives any claims against the
Collateral Agent and the other Senior Secured Parties arising by reason of the
fact that the price at which the Collateral may have been sold at such a private
sale was less than the price that might have been obtained at a public sale or
was less than the aggregate amount of the Obligations, even if the Collateral
Agent accepts the first offer received and does not offer the Collateral to more
than one offeree, provided that such private sale is conducted in a commercially
reasonable manner and in accordance with applicable Laws.

     

    Section
9.08  Access to
Land.  In exercising its right to take possession of the
Collateral upon the occurrence and during the continuation of an Event of
Default hereunder, the Collateral Agent, personally or by its agents or
attorneys, and subject to the rights of any tenant under any lease or sublease
of the Collateral and subject to the Orders, to the fullest extent permitted by
Law, may enter upon any land owned or leased by any Borrower without being
guilty of trespass or any wrongdoing, and without liability to such Borrower for
damages thereby occasioned.

     

    Section
9.09  Compliance With Limitations
and Restrictions.  Each Borrower hereby agrees that in respect
of any sale of any of the Collateral pursuant to the terms hereof, the
Collateral Agent is hereby authorized to comply with any limitation or
restriction in connection with such sale as it may be advised by counsel is
necessary in order to avoid any violation of applicable Laws, or in order to
obtain any required approval of the sale or of the purchaser by any Governmental
Authority or official, and each Borrower further agrees that such compliance
shall not result in such sale being considered or deemed not to have been made
in a commercially reasonable manner, nor shall the Collateral Agent be liable or
accountable to such Borrower for any discount allowed by reason of the fact that
such Collateral is sold in compliance with any such limitation or
restriction.

     

     

    
      
        
        

      

      
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    Section
9.10  No Impairment of
Remedies.  If, in the exercise of any of its rights and
remedies hereunder, the Collateral Agent forfeits any of its rights or remedies,
including any right to enter a deficiency judgment against any Borrower or any
other Person, whether because of any applicable Law pertaining to "election of
remedies" or otherwise, each Borrower hereby consents to such action by the
Collateral Agent and, to the extent permitted by applicable Law, waives any
claim based upon such action, even if such action by the Collateral Agent would
result in a full or partial loss of any rights of subrogation, indemnification
or reimbursement which such Borrower might otherwise have had but for such
action by the Collateral Agent or the terms herein.  Any election of
remedies which results in the denial or impairment of the right of the
Collateral Agent to seek a deficiency judgment against any of the parties to any
of the Financing Documents shall not, to the extent permitted by applicable
Laws, impair any Borrower's obligations hereunder.

     

    Section
9.11  Attorney-In-Fact.  (a)
Each Borrower hereby constitutes and appoints the Collateral Agent, acting for
and on behalf of itself and the other Senior Secured Parties and each successor
or permitted assign of the Collateral Agent and the other Senior Secured
Parties, the true and lawful attorney-in-fact of such Borrower, with full power
and authority in the place and stead of such Borrower and in the name of such
Borrower, Collateral Agent or otherwise to enforce all rights, interests and
remedies of such Borrower with respect to the Collateral or enforce all rights,
interests and remedies of the Collateral Agent under this Agreement (including
the rights set forth in this Article IX); provided, however,
that Collateral Agent shall not exercise any of the aforementioned rights unless
an Event of Default has occurred and is continuing and has not been waived or
cured in accordance with this Agreement and the other Financing Documents and
delivery of notice as set forth in Section 9.02(b) and
the Orders.  This power of attorney is a power coupled with an
interest and shall be irrevocable; provided further, however,
that nothing in this Agreement shall prevent any Borrower from, prior to the
exercise by Collateral Agent of any of the aforementioned rights, undertaking
such Borrower's operations in the ordinary course of business in accordance with
the Collateral and the Financing Documents.

     

    (b)           If
any Borrower fails to perform any agreement or obligation contained herein, and
such failure continues for ten (10) days following delivery of written notice by
the Collateral Agent to such Borrower, and subject to the Orders, the Collateral
Agent itself may perform, or cause performance of, such agreement or obligation,
and the reasonable expenses of the Collateral Agent incurred in connection
therewith shall be payable by such Borrower and shall be secured by the
Collateral.

     

    Section
9.12  Application of
Proceeds.  Any moneys received by the Collateral Agent after
the occurrence and during the continuance of an Event of Default may be held by
the Collateral Agent on account of the Obligations without prejudice to any
claim by any Senior Secured Party for any deficiency after such moneys are
received by the Senior Secured Parties, and each Debtor shall remain liable for
any such deficiency.  All such moneys may be applied to such part of
the Obligations as the Senior Secured Parties may direct.  The Senior
Secured Parties may at any time change any such appropriation of any such
moneys received by the Senior Secured Parties and may reapply the same to any
other part of the Obligations as the Senior Secured Parties may from time to
time see fit, notwithstanding any previous application.

     

    


    
      
        
        

      

      
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    ARTICLE
X


     

    THE
AGENTS

     

    Section
10.01  Appointment and
Authority.  xxiv)  Each of the Lenders hereby
irrevocably appoints, designates and authorizes each Agent to take such action
on its behalf under the provisions of this Agreement and each other Financing
Document and to exercise such powers and perform such duties as are expressly
delegated to such Agent by the terms of this Agreement or any other Financing
Document, together with such actions as are reasonably incidental
thereto.  The provisions of this Article X are solely
for the benefit of the Agents and the Lenders, and neither the Borrowers nor any
other Person shall have rights as a third party beneficiary of any of such
provisions.

     

    (b)           Each
Lender hereby appoints WestLB as its Administrative Agent under and for purposes
of each Financing Document to which it is a party.  WestLB hereby
accepts this appointment and agrees to act as the Administrative Agent for the
Lenders in accordance with the terms of this Agreement.  Each Lender
appoints and authorizes the Administrative Agent to act on behalf of such Lender
under each Financing Document to which it is a party and, in the absence of
other written instructions from the Required Lenders received from time to time
by the Administrative Agent (with respect to which the Administrative Agent
agrees that it will comply, except as otherwise provided in this Section 10.01 or as
otherwise advised by counsel), to exercise such powers hereunder and thereunder
as are specifically delegated to or required of the Administrative Agent by the
terms hereof and thereof, together with such powers as may be reasonably
incidental thereto.  Notwithstanding any provision to the contrary
contained elsewhere in any Financing Document, the Administrative Agent shall
not have any duties or responsibilities, except those expressly set forth
herein, nor shall the Administrative Agent have or be deemed to have any
fiduciary relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into any
Financing Document or otherwise exist against the Administrative
Agent.  Without limiting the generality of the foregoing sentence, the
use of the term “agent” in this Agreement with reference to the Administrative
Agent is not intended to connote any fiduciary or other implied (or express)
obligations arising under agency doctrine of any applicable
Law.  Instead, such term is used merely as a matter of market custom,
and is intended to create or reflect only an administrative relationship between
independent contracting parties.

     

     

    
      
        
        

      

      
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    (c)           Each
Lender hereby appoints WestLB as its Collateral Agent under and for purposes of
each Financing Document to which it is a party.  WestLB hereby accepts
this appointment and agrees to act as the Collateral Agent for the Lenders in
accordance with the terms of this Agreement.  Each of the Lenders
hereby irrevocably appoints and authorizes the Collateral Agent to act as the
agent of such Lender for purposes of acquiring, holding and enforcing any and
all Liens on Collateral granted by any Borrower to the Collateral Agent in order
to secure any of the Obligations, together with such powers and discretion as
are reasonably incidental thereto.  In this connection the Collateral
Agent, and any co-agents, sub-agents and attorneys-in-fact appointed by the
Collateral Agent, as the case may be, pursuant to Section 10.05 (Delegation
of Duties) for purposes of
holding or enforcing any Lien on the Collateral (or any portion thereof), or for
exercising any rights and remedies thereunder at the direction of the Collateral
Agent, as the case may be, shall be entitled to the benefits of all provisions
of this Article
X and Article
XI (Miscellaneous
Provisions) (including Section 11.09 (Indemnification
by the Borrowers), as though such
co-agents, sub-agents and attorneys-in-fact were the Collateral Agent under the
Financing Documents) as if set forth in full herein with respect
thereto.  Notwithstanding any provision to the contrary contained
elsewhere in any Financing Document, the Collateral Agent shall not have any
duties or responsibilities, except those expressly set forth herein or in the
other Financing Documents, nor shall the Collateral Agent have or be deemed to
have any fiduciary relationship with any Lender, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into any Financing Document or otherwise exist against the Collateral
Agent.  Without limiting the generality of the foregoing sentence, the
use of the term “agent” in this Agreement with reference to the Collateral Agent
is not intended to connote any fiduciary or other implied (or express)
obligations arising under agency doctrine of any applicable
Law.  Instead, such term is used merely as a matter of market custom,
and is intended to create or reflect only an administrative relationship between
independent contracting parties.

     

    (d)           Each
Lender hereby appoints and authorizes the Accounts Bank to act as depository for
the Collateral Agent, on behalf of the Senior Secured Parties, and as the
securities intermediary or bank with respect to the Project Accounts for the
benefit of the Collateral Agent, on behalf of the Senior Secured Parties, with
such powers as are expressly delegated to the Accounts Bank by the terms of this
Agreement, together with such other powers as are reasonably incidental
thereto.  The Accounts Bank hereby accepts this appointment and agrees
to act as the depository for the Collateral Agent, on behalf of the Senior
Secured Parties, and as the securities intermediary or bank with respect to the
Project Accounts, for the benefit of the Collateral Agent, on behalf of the
Senior Secured Parties, in accordance with the terms of this
Agreement.  The Accounts Bank further agrees to accept and hold, as
securities intermediary or as a bank, in its custody and in accordance with the
terms of this Agreement, for the Collateral Agent, on behalf of the Senior
Secured Parties, the Project Accounts and the Accounts Property.  Each
Lender also appoints and authorizes the Accounts Bank to act on its behalf for
the purpose of the creation and perfection of a first priority security interest
in favor of the Collateral Agent, on behalf of the Senior Secured Parties, in
the Project Accounts to the extent that they are deemed under applicable Law not
to constitute securities accounts or deposit accounts and in any Accounts
Property that is deemed under applicable Law not to constitute a Financial
Asset.  The Accounts Bank accepts this appointment and agrees to act
as the Accounts Bank for the Collateral Agent, on behalf and for the benefit of
the Senior Secured Parties, for such purpose and to hold and maintain exclusive
dominion and control over the Project Accounts and any such Accounts Property on
behalf of the Collateral Agent, acting on behalf of the Senior Secured
Parties.  Notwithstanding any provision to the contrary contained
elsewhere in any Financing Document, the Accounts Bank shall not have any duties
or responsibilities, except those expressly set forth herein, nor shall the
Accounts Bank have or be deemed to have any fiduciary relationship with any
Lender, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into any Financing Document or
otherwise exist against the Accounts Bank.  Without limiting the
generality of the foregoing sentence, the use of the term “agent” in this
Agreement with reference to the Accounts Bank is not intended to connote any
fiduciary or other implied (or express) obligations arising under agency
doctrine of any applicable Law.  Instead, such term is used merely as
a matter of market custom, and is intended to create or reflect only an
administrative relationship between independent contracting
parties.

     

     

    
      
        
        

      

      
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    Section
10.02  Rights as a
Lender.  Each Person serving as Agent hereunder or under any
other Financing Document shall have the same rights and powers in its capacity
as a Lender as any other Lender and may exercise the same as though it were not
an Agent.  Each such Person and its Affiliates may accept deposits
from, lend money to, act as the financial advisor or in any other advisory
capacity for and generally engage in any kind of business with any Borrower or
Affiliate thereof as if such Person were not an Agent hereunder and without any
duty to account therefor to the Lenders or any other Agent.

     

    Section
10.03  Exculpatory
Provisions.  xxv)  No Agent shall have any duties or
obligations except those expressly set forth herein and in the other Financing
Documents.  Without limiting the generality of the foregoing, no Agent
shall:

     

    
      	
               
      

            	
              (i)

            	
              be
      subject to any fiduciary or other implied duties, regardless of whether a
      Default or Event of Default has occurred and is
  continuing;

            


    

     

    
      	
               
      

            	
              (ii)

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

            


    

     

    
      	
               
      

            	
              (iii)

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

            


    

     

    (b)           No
Agent shall be liable for any action taken or not taken by it (i) with the prior
written consent or at the request of the Required Lenders (or such other number
or percentage of the Lenders as may be necessary, or as such Agent may believe
in good faith to be necessary, under the circumstances as provided in Section 10.01 (Appointment
and Authority)), (ii) in
connection with any amendment, consent, approval or waiver which it is permitted
under the Financing Documents to enter into, agree to or grant or (iii) in the
absence of its own gross negligence or willful misconduct.  Each Agent
shall be deemed not to have knowledge of any Default or Event of Default unless
and until notice describing such Default or Event of Default is given to such
Agent in writing by a Borrower or a Lender.

     

     

    
      
        
        

      

      
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    (c)           No
Agent shall be responsible for or have any duty to ascertain or inquire into (i)
any statement, warranty or representation made in or in connection with this
Agreement or any other Financing Document, (ii) the contents of any certificate,
report or other document delivered hereunder or thereunder or in connection
herewith or therewith, (iii) the performance or observance of any of the
covenants, agreements or other terms or conditions set forth herein or therein
or the occurrence or continuance of any Default or Event of Default, (iv) the
validity, enforceability, effectiveness or genuineness of this Agreement, any
other Financing Document or any other agreement, instrument or document, or the
perfection or priority of any Lien or security interest, or (v) the satisfaction
of any condition set forth in Article VI (Conditions
Precedent) or elsewhere
herein, other than to confirm receipt of items expressly required to be
delivered to any such Agent.

     

    Section
10.04  Reliance by
Agents.  Each Agent shall be entitled to rely upon, and shall
not incur any liability for relying upon, any notice, request, certificate,
consent, statement, instrument, document or other writing (including any
electronic message, internet or intranet website posting or other distribution)
believed by it to be genuine and to have been signed, sent or otherwise
authenticated by the proper Person.  Each Agent also may rely upon any
statement made to it orally or by telephone and believed by it to have been made
by the proper Person, and shall not incur any liability for relying
thereon.  In determining compliance with any condition hereunder to
the making of a Loan that by its terms must be fulfilled to the satisfaction of
a Lender, each Agent may presume that such condition is satisfactory to such
Lender unless such Agent shall have received notice to the contrary from such
Lender prior to the making of such Loan.  Each Agent may consult with
legal counsel (who may be counsel for a Borrower), independent accountants and
other experts selected by it, and shall not be liable for any action taken or
not taken by it in accordance with the advice of any such counsel, accountants
or experts.

     

    Section
10.05  Delegation of
Duties.  Each Agent may perform any and all of its duties and
exercise any and all its rights and powers hereunder or under any other
Financing Document by or through any one or more sub agents appointed by such
Agent.  Each Agent and any such sub agent may perform any and all of
its duties and exercise its rights and powers by or through their respective
Related Parties.  The exculpatory provisions of this Article X shall apply
to any such sub agent and to the Related Parties of such Agent and any such sub
agent, and shall apply to their respective activities in connection with their
acting as Agent.

     

    Section
10.06  Resignation or Removal of
Agent.  xxvi)  Any Agent may resign from the
performance of all its functions and duties hereunder and/or under the other
Financing Documents at any time by giving thirty (30) days’ prior notice to the
Borrowers and the Lenders.  Any Agent may be removed at any time by
the Required Lenders.  Such resignation or removal shall take effect
upon the appointment of a successor Agent, in accordance with this Section
10.06.

     

     

    
      
        
        

      

      
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    (b)           Upon
any notice of resignation by any Agent or upon the removal of any Agent by the
Required Lenders, the Required Lenders shall appoint a successor Agent hereunder
and under each other Financing Document who shall be a commercial bank having a
combined capital and surplus of at least two hundred fifty million Dollars
($250,000,000).

     

    (c)           If
no successor Agent has been appointed within thirty (30) days after the date
such notice of resignation was given by such Agent or the Required Lenders
elected to remove such Agent, any Senior Secured Party may petition any court of
competent jurisdiction for the appointment of a successor Agent.  Such
court may thereupon, after such notice, if any, as it may deem proper, appoint a
successor Agent, as applicable, who shall serve as Agent, hereunder and under
each other Financing Document until such time, if any, as the Required Lenders
appoint a successor Agent, as provided above.

     

    (d)           Upon
the acceptance of a successor’s appointment as Agent hereunder, such successor
shall succeed to and become vested with all of the rights, powers, privileges
and duties of the retiring (or removed) Agent, and the retiring (or removed)
Agent shall be discharged from all of its duties and obligations hereunder or
under the other Financing Documents.  After the retirement or removal
of any Agent hereunder and under the other Financing Documents, the provisions
of this Article
X shall continue in effect for the benefit of such retiring (or removed)
Agent, its sub agents and their respective Related Parties in respect of any
actions taken or omitted to be taken by any of them while the retiring Agent was
acting as Agent.

     

    (e)           If
a retiring or removed Agent is the Accounts Bank, such Accounts Bank will
promptly transfer all of the Project Accounts and the Accounts Property to the
possession or control of the successor Accounts Bank and will execute and
deliver such notices, instructions and assignments as may be reasonably
necessary or desirable to transfer the rights of the Accounts Bank with respect
to the Project Accounts and the Accounts Property to the successor Accounts
Bank.

     

    (f)           If
a retiring or removed Agent is the Collateral Agent, such Collateral Agent will
promptly transfer any Collateral in the possession or control of such Collateral
Agent to the successor Collateral Agent and will execute and deliver such
notices, instructions and assignments as may be reasonably necessary or
desirable to transfer the rights of the Collateral Agent with respect to such
Collateral property to the successor Collateral Agent.

     

    Section
10.07  No Amendment to Duties of
Agent Without Consent.  No Agent shall be bound by any waiver,
amendment, supplement or modification of this Agreement or any other Financing
Document that affects its rights or duties hereunder or thereunder unless such
Agent shall have given its prior written consent, in its capacity as Agent,
thereto.

     

     

    
      
        
        

      

      
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    Section
10.08  Non-Reliance on Agent and
Other Lenders.  Each Lender acknowledges that it has,
independently and without reliance upon any Agent or any other Lender or any of
their Related Parties and based on such documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into this
Agreement and make its Loans.  Each Lender also acknowledges that it
will, independently and without reliance upon any Agent or any other Lender or
any of their Related Parties and based on such documents and information as it
shall from time to time deem appropriate, continue to make its own decisions in
taking or not taking action under or based upon this Agreement, any other
Financing Document or any related agreement or any document furnished hereunder
or thereunder.

     

    Section
10.09  Collateral Agent May File
Proofs of Claim.  xxvii)  In case of the pendency of
any bankruptcy or insolvency proceeding relative to any Borrower, the Collateral
Agent (irrespective of whether the principal of any Loan shall then be due and
payable as herein expressed or by declaration or otherwise and irrespective of
whether the Collateral Agent or any other Senior Secured Party shall have made
any demand on any Borrower) shall be entitled and empowered, but shall not be
obligated to, by intervention in such proceeding or otherwise:

     

    
      	
               
      

            	
              (i)

            	
              to
      file and prove a claim for the whole amount of the principal and interest
      owing and unpaid in respect of the Loans and all other Obligations that
      are owing and unpaid and to file such other documents as may be necessary
      or advisable in order to have the claims of the Senior Secured Parties
      (including any claim for the reasonable compensation, expenses,
      disbursements and advances of the Senior Secured Parties and their
      respective agents and counsel and all other amounts due the Senior Secured
      Parties under Sections 3.11
      (Fees), 11.07 (Costs
      and Expenses) and 11.09 (Indemnification
      by the Borrowers)) allowed in
      such judicial proceeding; and

            


    

     

    
      	
               
      

            	
              (ii)

            	
              to
      collect and receive any monies or other property payable or deliverable on
      any such claims and to distribute the
same.

            


    

     

    Any custodian, receiver, assignee,
trustee, liquidator, sequestrator or other similar official in any such judicial
proceeding is hereby authorized by each Lender to make such payments to the
Collateral Agent and, in the event that the Collateral Agent may consent to the
making of such payments directly to the Lenders, to pay to the Collateral Agent
any amount due for the reasonable compensation, expenses, disbursements and
advances of the Agents and their respective agents and counsel, and any other
amounts due the Agents under Sections 3.11 (Fees), 11.07 (Costs
and Expenses) and 11.09 (Indemnification
by the Borrowers).

     

    (b)           Nothing
contained herein shall be deemed to authorize the Collateral Agent to authorize
or consent to or accept or adopt on behalf of any Lender any plan of
reorganization, arrangement, adjustment or composition affecting the Obligations
or the rights of any Lender or to authorize the Collateral Agent to vote in
respect of the claim of any Lender in any such proceeding.

     

     

    
      
        
        

      

      
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    Section
10.10  Collateral
Matters.  xxviii)  The Lenders irrevocably authorize
the Collateral Agent to release any Lien on any property granted to or held by
the Collateral Agent under any Financing Document (i) upon the occurrence of the
Discharge Date, (ii) if approved, authorized or ratified in writing in
accordance with Section 11.01 (Amendments,
Etc.) or
(iii) as permitted pursuant to the terms of the Financing Documents (including
as contemplated by Sections 7.02(f)
(Negative
Covenants-Asset Dispositions).

     

    (b)           Upon
request by the Collateral Agent at any time, the Lenders will confirm in writing
the Collateral Agent’s authority to release its interest in particular types or
items of property pursuant to this Section
10.10.  In each case as specified in this Section 10.10, the
Collateral Agent will, at the Borrowers’ expense, execute and deliver to the
applicable Borrower such documents as such Person may reasonably request to
evidence the release of such item of Collateral in accordance with the terms of
the Financing Documents and this Section
10.10.

     

    Section
10.11  Copies.  Each
Agent shall give prompt notice to each Lender of each material notice or request
required or permitted to be given to such Agent by the Borrowers pursuant to the
terms of this Agreement or any other Financing Document (unless concurrently
delivered to the Lenders by the Borrowers).  Each Agent will
distribute to each Lender each document or instrument (including each document
or instrument delivered by any Borrower to such Agent pursuant to Article V (Representations
and Warranties), Article VI (Conditions
Precedent) and Article VII (Covenants)) received for its
account and copies of all other communications received by such Agent from the
Borrowers for distribution to the Lenders by such Agent in accordance with the
terms of this Agreement or any other Financing Document.

     

    ARTICLE
XI


     

    MISCELLANEOUS
PROVISIONS

     

    Section
11.01  Amendments,
Etc.  No amendment or waiver of any provision of this Agreement
or any other Financing Document, and no consent to any departure by any Borrower
or Borrower Agent therefrom, shall be effective unless in writing signed by the
Required Lenders (or, if expressly contemplated hereby, the Administrative
Agent) and, in the case of an amendment, the Borrowers and Borrower Agent, and
in each such case acknowledged by the Administrative Agent, and each such waiver
or consent shall be effective only in the specific instance and for the specific
purpose for which given; provided that no such
amendment, waiver or consent shall:

     

    (a)           waive
any condition set forth in Section 6.01 (Conditions
to Closing) without the prior consent of all the Lenders (other than the
Non-Voting Lenders);

     

    (b)           extend
or increase the Commitment of any Lender (or reinstate any Commitment terminated
pursuant to Section
9.02 (Action
Upon Event of Default) without the prior
written consent of such Lender (other than any Non-Voting Lender);

     

    (c)           postpone
any date scheduled for any payment of principal or interest under Section 3.01 (Repayment
of Loans) or 3.02 (Interest
Payment Dates), or any date fixed
by the Administrative Agent for the payment of fees or other amounts due to the
Lenders (or any of them) hereunder or under any other Financing Document without
the prior written consent of each Lender affected thereby (other than any
Non-Voting Lender);

     

     

    
      
        
        

      

      
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    (d)           reduce
the principal of, or the rate of interest specified herein on, any Loan, or any
Fees or other amounts (including any mandatory prepayments under Section 3.08 (Mandatory
Prepayment) payable hereunder
or under any other Financing Document to any Lender without the prior written
consent of each Lender directly affected thereby (other than any Non-Voting
Lender); provided that
only the prior written consent of the Required Lenders shall be necessary to
amend the definition of Default Rate or to waive any obligation of the Borrowers
to pay interest at the Default Rate;

     

    (e)           change
the order of application of any reduction in the Commitments or any prepayment
of Loans from the application thereof set forth in the applicable provisions of
Section 2.06
(Termination
or Reduction of Commitment), Section 3.07 (Optional
Prepayment) or 3.08 (Mandatory
Prepayment), respectively, in
any manner without the prior written consent of each Lender affected thereby
(other than any Non-Voting Lender);

     

    (f)           change
any provision of this Section 11.01, the
definition of Required Lenders or any other provision of any Financing Document
specifying the number or percentage of Lenders required to amend, waive or
otherwise modify any rights under any Financing Document (including any such
provision specifying the number or percentage of Lenders required to waive any
Event of Default or forbear from taking any action or pursuing any remedy with
respect to any Event of Default), or make any determination or grant any consent
under any Financing Document, without the prior written consent of each Lender
(other than any Non-Voting Lender); or

     

    (g)           release
(i) any Borrower from all or substantially all of its obligations under any
Financing Document, or (ii) all or substantially all of the Collateral in any
transaction or series of related transactions, without the prior written consent
of each Lender (other than any Non-Voting Lender);

     

    and provided further that (i) no
amendment, waiver or consent shall, unless in writing and signed by an Agent in
addition to the Lenders required above, affect the rights or duties of, or any
fees or other amounts payable to, such Agent under this Agreement or any other
Financing Document; and (ii) Section 11.03(h)
(Assignments) may not be amended,
waived or otherwise modified without the prior written consent of each Granting
Lender all or any part of whose Loan is being funded by an SPV at the time of
such amendment, waiver or other modification.

     

    Notwithstanding
the other provisions of this Section 11.01, the
Borrowers, the Borrower Agent, the Collateral Agent and the Administrative Agent
may (but shall have no obligation to) amend or supplement the Financing
Documents without the consent of any Lender: (i) to cure any ambiguity, defect
or inconsistency; (ii) to make any change that would provide any additional
rights or benefits to the Lenders; or (iii) to make, complete or confirm any
grant of Collateral permitted or required by this Agreement or any release of
any Collateral that is otherwise permitted under the terms of this Agreement or
the Orders.  Notwithstanding anything to
the contrary herein, no Defaulting Lender shall have any right to approve or
disapprove any amendment, waiver or consent hereunder, except that the
Commitment of such Lender may not be increased or extended without the consent
of such Lender.

     

     

    
      
        
        

      

      
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    Section
11.02  Applicable Law;
Jurisdiction; Etc.  xxix)  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)           All
judicial proceedings brought against any Borrower or Borrower Agent arising out
of or relating to this Agreement or any other Financing Document, or nay
Obligations hereunder or thereunder, must be brought in the Bankruptcy Court
and, if the Bankruptcy Court does not have (or abstains from)jurisdiction, such
proceeding may be brought in the courts of the State of New York, the courts of
the Unites States of America for the Southern District of New York and appellate
court of any thereof.

     

    (c)           SUBMISSION TO
JURISDICTION.  EACH BORROWER AND THE BORROWER AGENT IRREVOCABLY
AND UNCONDITIONALLY CONSENTS AND AGREES THAT THE BANKRUPTCY COURT SHALL HAVE
EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN EACH
BORROWER AND THE BORROWER AGENT, ON THE ONE HAND, AND EACH LENDER AND EACH
AGENT, ON THE OTHER HAND, PERTAINING TO THIS AGREEMENT OR ANY OF THE OTHER
FINANCING DOCUMENTS OR TO ANY MATTER ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY OF THE OTHER FINANCING DOCUMENTS; PROVIDED, THAT EACH
BORROWER AND THE BORROWER AGENT ACKNOWLEDGE THAT ANY APPEALS FROM THE BANKRUPTCY
COURT MAY HAVE TO BE HEARD BY A COURT OTHER THAN THE BANKRUPTCY COURT; PROVIDED, FURTHER, THAT,
SUBJECT TO RECEIVING PRIOR APPROVAL FROM THE BANKRUPTCY COURT AUTHORIZING SUCH
ACTION, NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO PRECLUDE EACH
LENDER AND EACH AGENT BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER
JURISDICTION TO REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR THE
OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER.

     

    (d)           WAIVER OF
VENUE.  EACH BORROWER AND THE BORROWER AGENT IRREVOCABLY AND
UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION
OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER
FINANCING DOCUMENT IN ANY COURT REFERRED TO IN SECTION
11.02(b).  EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN
INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH
COURT.

     

     

    
      
        
        

      

      
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    (e)           Immunity.  To
the extent that any Borrower or the Borrower Agent has or hereafter may acquire
any immunity from jurisdiction of any court or from any legal process (whether
through service or notice, attachment prior to judgment, attachment in aid of
execution, execution or otherwise) with respect to itself or its property, each
Borrower and the Borrower Agent hereby irrevocably and unconditionally waives
such immunity in respect of its obligations under the Financing Documents and,
without limiting the generality of the foregoing, agrees that the waivers set
forth in this Section
11.02(e) shall have the fullest scope permitted under the Foreign
Sovereign Immunities Act of 1976 of the United States and are intended to be
irrevocable for purposes of such Act.

     

    (f)           WAIVER OF JURY
TRIAL.  EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR ANY OTHER FINANCING DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY).  EACH PARTY HERETO (i) CERTIFIES THAT NO REPRESENTATIVE,
AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE
THE FOREGOING WAIVER AND (ii) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO
HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER FINANCING DOCUMENTS
BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION
11.02.

     

    Section
11.03  Assignments.  xxx)   The
provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns permitted hereby,
except that neither any Borrower nor the Borrower Agent may assign or otherwise
transfer any of its rights or obligations hereunder without the prior written
consent of each Agent and Lender, and no Lender may assign or otherwise transfer
any of its rights or obligations hereunder except (i) to an Eligible Assignee in
accordance with Section 11.03(b),
(ii) by way of participation in accordance with Section 11.03(d),
(iii) by way of pledge or assignment of a security interest subject to the
restrictions of Section 11.03(f), or
(iv) to an SPV in accordance with the provisions of Section 11.03(h) (and
any other attempted assignment or transfer by any party hereto shall be null and
void).  Nothing in this Agreement, express or implied, shall be
construed to confer upon any Person (other than the parties hereto, their
respective successors and assigns permitted hereby, Participants to the extent
provided in this Section 11.03 and, to
the extent expressly contemplated hereby, the Related Parties of each Agent and
Lender) any legal or equitable right, remedy or claim under or by reason of this
Agreement.

     

     

    
      
        
        

      

      
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    (b)           Any
Lender may at any time after the date hereof assign to one or more Eligible
Assignees all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans at the time owing to
it); provided
that (i) except in the case of an assignment of the entire remaining amount of
the assigning Lender’s Commitment and the Loans at the time owing to it or in
the case of an assignment to a Lender or an Affiliate of a Lender or an Approved
Fund with respect to a Lender, the Commitment (which for this purpose includes
the Loans outstanding thereunder) or, if the applicable Commitment is not then
in effect, the principal outstanding balance of the Loans of the assigning
Lender subject to each such assignment, determined as of the date the Lender
Assignment Agreement with respect to such assignment is delivered to the
Administrative Agent or, if “Trade Date” is specified in
the Lender Assignment Agreement, as of the Trade Date, shall not be less than
one million Dollars ($1,000,000) and such assigning Lender’s entire Commitment,
unless the Administrative Agent otherwise consents in writing; (ii) each partial
assignment shall be made as an assignment of a proportionate part of all the
assigning Lender’s rights and obligations under this Agreement with respect to
the Loan or the Commitment assigned; (iii) the parties to each assignment shall
execute and deliver to the Administrative Agent a Lender Assignment Agreement,
together with a processing and recordation fee of two thousand five hundred
Dollars ($2,500); provided that (A) no
such fee shall be payable in the case of an assignment to a Lender, an Affiliate
of a Lender or an Approved Fund with respect to a Lender and (B) in the case of
contemporaneous assignments by a Lender to one or more Funds managed by the same
investment advisor (which Funds are not then Lenders hereunder), only a single
such two thousand five hundred Dollars ($2,500) fee shall be payable for all
such contemporaneous assignments; (iv) the Eligible Assignee, if it is not a
Lender prior to such assignment, shall deliver to the Administrative Agent an
administrative questionnaire and (v) the assignor shall provide notice of such
assignment to the Borrower Agent.  Subject to acceptance and recording
thereof by the Administrative Agent pursuant to Section 11.03(c), on
and after the effective date specified in each Lender Assignment Agreement, the
Eligible Assignee thereunder shall be a party to this Agreement and, to the
extent of the interest assigned by such Lender Assignment Agreement, have the
rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such Lender
Assignment Agreement, be released from its obligations under this Agreement
(and, in the case of a Lender Assignment Agreement covering all of the assigning
Lender’s rights and obligations under this Agreement, such Lender shall cease to
be a party hereto but shall continue to be entitled to the benefits of Sections 4.01 (Eurodollar
Rate Lending Unlawful), 4.03 (Increased
Eurodollar Loan Costs), 4.05 (Funding
Losses),
11.07 (Costs
and Expenses) and 11.09 (Indemnification
by the Borrowers) with respect to
facts and circumstances occurring prior to the effective date of such
assignment).  Upon request, the Borrowers (at their expense) shall
execute and deliver a Note to the assignee Lender.  Any assignment or
transfer by a Lender of rights or obligations under this Agreement that does not
comply with this Section 11.03(b)
shall be treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with Section
11.03(d).

     

    (c)           The
Administrative Agent, acting solely for this purpose as an agent of the
Borrowers, shall maintain at the Administrative Agent’s office a copy of each
Lender Assignment Agreement delivered to it and a register for the recordation
of the names and addresses of the Lenders, and the Commitment of, and principal
amount of the Loans owing to, each Lender pursuant to the terms hereof from time
to time (the “Register”).  The
entries in the Register shall be conclusive, and the Borrowers, the Agents and
the Lenders may treat each Person whose name is recorded in the Register
pursuant to the terms hereof as a Lender hereunder for all purposes of this
Agreement, notwithstanding notice to the contrary.  The Register shall
be available for inspection by the Borrowers at any reasonable time and from
time to time upon reasonable prior notice.  In addition, at any time
that a request for a consent for a material or other substantive change to the
Financing Documents is pending, any Lender may request and receive from the
Administrative Agent a copy of the Register.

     

     

    
      
        
        

      

      
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    (d)           Any
Lender may at any time, without the consent of, or notice to, the Borrowers, the
Borrower Agent or any Agent, sell participations to any Person (each, a “Participant”) in all
or a portion of such Lender’s rights and/or obligations under this Agreement
(including all or a portion of its Commitment and/or the Loans owing to it);
provided that
(i) such Lender’s obligations under this Agreement shall remain unchanged, (ii)
such Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations and (iii) the Borrowers, the Borrower Agent, the
Agents and the other Lenders shall continue to deal solely and directly with
such Lender in connection with such Lender’s rights and obligations under this
Agreement.  Any agreement or instrument pursuant to which a Lender
sells such a participation shall provide that such Lender shall retain the sole
right to enforce this Agreement and to approve any amendment, modification or
waiver of any provision of this Agreement; provided that such agreement
or instrument may provide that such Lender will not, without the consent of the
Participant, agree to any amendment, waiver or other modification described in
the first proviso to Section 11.01 (Amendments,
Etc.)
that directly affects such Participant.  Subject to Section 11.03(e), the
Borrowers agree that each Participant shall be entitled to the benefits of Sections 4.01 (Eurodollar
Rate Lending Unlawful), 4.03 (Increased
Eurodollar Loan Costs) and 4.05 (Funding
Losses),
to the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to Section
11.03(b).  To the extent permitted by law, each Participant
also shall be entitled to the benefits of Section 11.15 (Right of
Setoff)
as though it were a Lender; provided such Participant agrees to be subject to
Section 3.13
(Sharing
of Payments) as though it were a
Lender.

     

    (e)           A
Participant shall not be entitled to receive any greater payment under Section 4.01 (Eurodollar
Rate Lending Unlawful) or 4.03 (Increased
Eurodollar Loan Costs) than the applicable
Lender would have been entitled to receive with respect to the participation
sold to such Participant, unless the sale of the participation to such
Participant is made with the prior written consent of the Borrower
Agent.

     

    (f)           Any
Lender may at any time pledge or assign a security interest in all or any
portion of its rights under this Agreement (including under its Notes, if any)
to secure obligations of such Lender, including any pledge or assignment to
secure obligations to a Federal Reserve Bank; provided that no such
pledge or assignment shall release such Lender from any of its obligations
hereunder or substitute any such pledgee or assignee for such Lender as a party
hereto.

     

    (g)           The
words “execution,”
“signed,” “signature,” and words of like
import in any Lender Assignment Agreement shall be deemed to include electronic
signatures or the keeping of records in electronic form, each of which shall be
of the same legal effect, validity or enforceability as a manually executed
signature or the use of a paper-based recordkeeping system, as the case may be,
to the extent and as provided for in any applicable Law, including the Federal
Electronic Signatures in Global and National Commerce Act, the New York State
Electronic Signatures and Records Act, or any other similar state laws based on
the Uniform Electronic Transactions Act.

     

     

    
      
        
        

      

      
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    (h)           Notwithstanding
anything to the contrary contained herein, any Lender (a “Granting Lender”) may
grant to a special purpose funding vehicle identified as such in writing from
time to time by the Granting Lender to the Administrative Agent and the
Borrowers (an “SPV”) the option to
provide all or any part of any Loan that such Granting Lender would otherwise be
obligated to make pursuant to this Agreement; provided that (i)
nothing herein shall constitute a commitment by any SPV to fund any Loan, and
(ii) if an SPV elects not to exercise such option or otherwise fails to make all
or any part of such Loan, the Granting Lender shall be obligated to make such
Loan pursuant to the terms hereof or, if it fails to do so, to make such payment
to the Administrative Agent as is required under Section 3.13 (Sharing
of Payments).  Each
party hereto hereby agrees that (A) neither the grant to any SPV nor the
exercise by any SPV of such option shall increase the costs or expenses or
otherwise increase or change the obligations of the Borrowers under this
Agreement (including their obligations under Section 4.03
(Increased
Eurodollar Loan Costs), (B) no SPV shall
be liable for any indemnity or similar payment obligation under this Agreement
for which a Lender would be liable, and (C) the Granting Lender shall for all
purposes, including the approval of any amendment, waiver or other modification
of any provision of any Financing Document, remain the lender of record
hereunder.  The making of a Loan by an SPV hereunder shall utilize the
Commitment of the Granting Lender to the same extent, and as if, such Loan were
made by such Granting Lender.  In furtherance of the foregoing, each
party hereto hereby agrees (which agreement shall survive the termination of
this Agreement) that, prior to the date that is one (1) year and one (1) day
after the payment in full of all outstanding commercial paper or other senior
debt of any SPV, it will not institute against, or join any other Person in
instituting against, such SPV any bankruptcy, reorganization, arrangement,
insolvency, or liquidation proceeding under the laws of the United States or any
State thereof.  Notwithstanding anything to the contrary contained
herein, any SPV may (1) with notice to, but without prior consent of the
Borrowers and the Administrative Agent and without paying any processing fee
therefor, assign all or any portion of its right to receive payment with respect
to any Loan to the Granting Lender and (2) disclose on a confidential basis any
non-public information relating to its funding of any Loan to any rating agency,
commercial paper dealer or provider of any surety or Guarantee or credit or
liquidity enhancement to such SPV.

     

    Section
11.04  Benefits of
Agreement.  Nothing in this Agreement or any other Financing
Document, express or implied, shall give to any Person, other than the parties
hereto, and each of their successors and permitted assigns under this Agreement
or any other Financing Document, any benefit or any legal or equitable right or
remedy under this Agreement.

     

    Section
11.05  Borrower
Agent.  Each Borrower hereby appoints and authorizes Pacific
Holding, and Pacific Holding hereby accepts such appointment, as such Borrower’s
Borrower Agent to act as agent on such Borrower’s behalf and to make any
representations or certifications, deliver and receive any notices or other
communications, and otherwise represent and act on behalf of such Borrower under
the Financing Documents, and to comply with all covenants, conditions and other
provisions of the Financing Documents required to be satisfied by the Borrower
Agent.  Each Borrower hereby acknowledges and agrees that it will be
bound by any action or inaction taken by the Borrower Agent as if such action or
inaction had been taken by such Borrower.

     

     

    
      
        
        

      

      
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    Section
11.06  Consultants.  xxxi)  The
Required Lenders or the Administrative Agent may, in their sole discretion,
appoint any Consultant for the purposes specified herein.  If any of
the Consultants is removed or resigns and thereby ceases to act for purposes of
this Agreement and the other Financing Documents, the Required Lenders or the
Administrative Agent, as the case may be, shall designate a Consultant in
replacement.

     

    (b)           The
Borrowers shall reimburse each Consultant appointed hereunder for the reasonable
fees and reasonable and documented out-of-pocket expenses of such Consultant
retained on behalf of the Lenders pursuant to this Section
11.06.

     

    (c)           In
all cases in which this Agreement provides for any Consultant to “agree,” “approve,” “certify” or “confirm” any report or other
document or any fact or circumstance, such Consultant may make the
determinations and evaluations required in connection therewith based upon
information provided by the Borrowers, the Borrower Agent or other sources
reasonably believed by such Consultant to be knowledgeable and responsible,
without independently verifying such information; provided that,
notwithstanding the foregoing, such Consultant shall engage in such independent
investigations or findings as it may from time to time deem necessary in its
reasonable discretion to support the determinations and evaluations required of
it.

     

    Section
11.07  Costs and
Expenses.  Each Borrower shall pay (a) all reasonable and
documented out of pocket expenses incurred by the Agents or any Lender
(including all reasonable fees, costs and expenses of counsel for any Senior
Secured Party and a financial advisor for the Administrative Agent), in
connection with (i) the preparation, negotiation, syndication, execution and
delivery of this Agreement and the other Financing Documents (whether or not the
transactions contemplated hereby or thereby are consummated), (ii) the
negotiation, preparation and filing and recordation of the Financing Documents,
the Interim Order and the Final Order, (iii) any amendments, modifications or
waivers of the provisions of this Agreement, the other Financing Documents, the
Interim Order and the Final Order, (iv) the administration of this Agreement,
the other Financing Documents, the Interim Order and the Final Order, (v) the
obtaining of approval of the Financing Documents by the Bankruptcy Court, (vi)
the preparation and review of pleadings, documents and reports related to any
Chapter 11 Case or any subsequent case under Chapter 7 of the Bankruptcy Code,
attendance at meetings, court hearings or conferences related to any
Chapter 11 Case or any subsequent case under Chapter 7 of the Bankruptcy
Code and (vii) general monitoring of any Chapter 11 Case or any subsequent case
under Chapter 7 of the Bankruptcy Code and (b) all out-of-pocket expenses
incurred by the Agents or any Lender (including all fees, costs and expenses of
counsel for any Senior Secured Party), in connection with the enforcement or
protection of its rights in connection with this Agreement and the other
Financing Documents, including its rights under this Section 11.07,
including in connection with any workout, restructuring or negotiations in
respect of the Obligations.

     

    Section
11.08  Counterparts;
Effectiveness.  This Agreement may be executed in counterparts
(and by different parties hereto in different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a
single contract.  This Agreement shall become effective when it has
been executed by the Administrative Agent and when the Administrative Agent has
received counterparts hereof that, when taken together, bear the signatures of
each of the other parties hereto.  Delivery of an executed counterpart
of a signature page of this Agreement by telecopy or portable document format
(“pdf”) shall
be effective as delivery of a manually executed counterpart of this
Agreement.

     

     

    
      
        
        

      

      
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    Section
11.09  Indemnification by the
Borrowers.  xxxii)  Each Borrower hereby agrees to
indemnify each Agent (and any sub-agent thereof), each Lender and each Related
Party of any of the foregoing Persons (each such Person being called an “Indemnitee”) against,
and hold each Indemnitee harmless from, any and all losses, claims, damages,
liabilities and related expenses (including all reasonable and documented fees,
costs and out-of-pocket expenses of counsel for any Indemnitee), incurred by any
Indemnitee or asserted against any Indemnitee by any third party or by any
Borrower arising out of, in connection with, or as a result of:

     

    
      	
               
      

            	
              (i)

            	
              the
      execution or delivery of this Agreement, any other Transaction Document or
      any agreement or instrument contemplated hereby or thereby, the
      performance by the parties hereto or thereto of their respective
      obligations hereunder or thereunder or the consummation of the
      transactions contemplated hereby or
thereby;

            


    

     

    
      	
               
      

            	
              (ii)

            	
              any
      Loan or the use or proposed use of the proceeds
  therefrom;

            


    

     

    
      	
               
      

            	
              (iii)

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

            


    

     

    
      	
               
      

            	
              (iv)

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

            


    

     

    
      	
               
      

            	
              (v)

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

            


    

     

    provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses are determined by a
court of competent jurisdiction by final and Non-Appealable judgment to have
resulted from the gross negligence or willful misconduct of such
Indemnitee.

     

     

    
      
        
        

      

      
        77

        
          

        

      

      
        
        

      

    

     

     

    (b)           To
the extent that any Borrower for any reason fails to indefeasibly pay any amount
required under Section
11.09(a) to be paid by it to any Agent (or any sub-agent thereof) or any
Related Party of any of the foregoing, each Lender severally agrees to pay to
such Agent (or any such sub-agent), or such Related Party, as the case may be,
such Lender’s ratable share (determined as of the time that the applicable
unreimbursed expense or indemnity payment is sought) of such unpaid amount;
provided that
the unreimbursed expense or indemnified loss, claim, damage, liability or
related expense, as the case may be, was incurred by or asserted against such
Agent (or any sub-agent thereof) in its capacity as such, or against any Related
Party of any of the foregoing acting for such Agent (or any sub-agent thereof)
in connection with such capacity.  The obligations of the Lenders
under this Section
11.09(b) are subject to the provisions of Section 2.04(d)
(Funding
of Loans).  The
obligations of the Lenders to make payments pursuant to this Section 11.09(b) are
several and not joint and shall survive the payment in full of the Obligations
and the termination of this Agreement.  The failure of any Lender to
make payments on any date required hereunder shall not relieve any other Lender
of its corresponding obligation to do so on such date, and no Lender shall be
responsible for the failure of any other Lender to do so.

     

    (c)           Except
as otherwise provided in Article VI (Conditions
Precedent), all amounts due
under this Section
11.09 shall be payable not later than ten (10) Business Days after demand
therefor.

     

    Section
11.10  Interest Rate
Limitation.  Notwithstanding anything to the contrary contained
in any Financing Document, the interest paid or agreed to be paid under the
Financing Documents shall not exceed the maximum rate of non-usurious interest
permitted by applicable Law (the “Maximum
Rate”).  If any Agent or any Lender shall receive interest in
an amount that exceeds the Maximum Rate, the excess interest shall be applied to
the principal of the Loans or, if it exceeds such unpaid principal, refunded to
the Borrowers.  In determining whether the interest contracted for,
charged, or received by any Senior Secured Party exceeds the Maximum Rate, such
Person may, to the extent permitted by applicable Law, (a) characterize any
payment that is not principal as an expense, fee, or premium rather than
interest, (b) exclude prepayments and the effects thereof, and (c) amortize,
prorate, allocate, and spread in equal or unequal parts the total amount of
interest throughout the contemplated term of the Obligations
hereunder.

     

    Section
11.11  No Waiver; Cumulative
Remedies.  No failure by any Senior Secured Party to exercise,
and no delay by any such Person in exercising, any right, remedy, power or
privilege hereunder or under any other Financing Document shall operate as a
waiver thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege.  The
rights, remedies, powers and privileges herein provided, and provided under each
other Financing Document, are cumulative and not exclusive of any rights,
remedies, powers and privileges provided by law.

     

     

    
      
        
        

      

      
        78

        
          

        

      

      
        
        

      

    

     

     

    Section
11.12  Notices and Other
Communications.  xxxiii)  Except in the case of
notices and other communications expressly permitted to be given by telephone
(and except as provided in Section 11.12(b)),
all notices and other communications provided for herein shall be in writing and
shall be delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopier or electronic mail as follows, and all
notices and other communications expressly permitted hereunder to be given by
telephone shall be made to the applicable telephone number, as
follows:

     

    
      	
               
      

            	
              (i)

            	
              if
      to a Borrower, the Borrower Agent or any Agent, to the address, telecopier
      number, electronic mail address or telephone number specified for such
      Person on Schedule 11.12;
      and

            


    

     

    
      	
               
      

            	
              (ii)

            	
              if
      to any Lender, to the address, telecopier number, electronic mail address
      or telephone number specified in its administrative
      questionnaire.

            


    

     

    (b)           Notices
sent by hand or overnight courier service, or mailed by certified or registered
mail, shall be deemed to have been given when received; notices sent by
telecopier shall be deemed to have been given when sent (except that, if not
given during normal business hours for the recipient, shall be deemed to have
been given at the opening of business on the next Business Day for the
recipient).  Notices delivered through electronic communications to
the extent provided in Section 11.12(d)
shall be effective as provided in Section
11.12(d).  Any notice sent to the Borrower Agent shall be
deemed to have been given to each Borrower.

     

    (c)           Notices
and other communications to the Senior Secured Parties hereunder may be
delivered or furnished by electronic communication (including e mail and
internet or intranet websites) pursuant to procedures approved by the
Administrative Agent; provided that the
foregoing shall not apply to notices to any Lender pursuant to Article II (Commitments
and Funding) if such Lender has
notified the Administrative Agent that it is incapable of receiving notices
under such Article II
(Commitments
and Funding) by electronic
communication.  Each of the Administrative Agent or a Borrower may, in
its discretion, agree to accept notices and other communications to it hereunder
by electronic communications pursuant to procedures approved by it; provided that approval of
such procedures may be limited to particular notices or
communications.

     

    (d)           Unless
the Administrative Agent otherwise prescribes, (i) notices and other
communications sent to an e-mail address shall be deemed received upon the
sender’s receipt of an acknowledgement from the intended recipient (such as by
the “return receipt
requested” function, as available, return e-mail or other written
acknowledgement); provided that if such
notice or other communication is not received during the normal business hours
of the recipient, such notice or communication shall be deemed to have been
received at the opening of business on the next Business Day for the recipient,
and (ii) notices or communications posted to an internet or intranet website
shall be deemed received upon the deemed receipt by the intended recipient at
its e-mail address as described in Section 11.12(d)(i)
of notification that such notice or communication is available and identifying
the website address therefor.

     

    (e)           Each
Borrower, the Borrower Agent and the Agents may change its address, telecopier
or telephone number for notices and other communications hereunder by notice to
the other parties hereto.  Each Lender may change its address,
telecopier or telephone number for notices and other communications hereunder by
notice to the Borrowers, the Borrower Agent and each Agent.

     

     

    
      
        
        

      

      
        79

        
          

        

      

      
        
        

      

    

     

     

    (f)           The
Senior Secured Parties shall be entitled to rely and act upon any written
notices purportedly given by or on behalf of a Borrower or the Borrower Agent
even if (i) such notices were not made in a manner specified herein, were
incomplete or were not preceded or followed by any other form of notice
specified herein, or (ii) the terms thereof, as understood by the recipient,
varied from any confirmation thereof.  Each Borrower shall indemnify
each Senior Secured Party and the Related Parties of each of them from all
losses, costs, expenses and liabilities resulting from the reliance by such
Person on each notice purportedly given by or on behalf of a Borrower or the
Borrower Agent.  All telephonic notices to and other telephonic
communications with any Agent may be recorded by such Agent, and each of the
parties hereto hereby consents to such recording.

     

    (g)           So
long as WestLB is the Administrative Agent, each Borrower and the Borrower Agent
hereby agrees that it will provide to the Administrative Agent all information,
documents and other materials that it is obligated to furnish to the
Administrative Agent pursuant to the Financing Documents, including all notices,
requests, financial statements, financial and other reports, certificates and
other information materials, but excluding any such communication that (i)
relates to the Funding, (ii) relates to the payment of any principal or other
amount due under this Agreement prior to the scheduled date therefor, (iii)
provides notice of any Default or Event of Default or (iv) is required to be
delivered to satisfy any condition precedent to Funding (all such non-excluded
communications being referred to herein collectively as “Communications”), by
transmitting the Communications in an electronic/soft medium in a format
acceptable to the Administrative Agent to ny_agency
services@westlb.com.  In addition, each Borrower and the Borrower
Agent agrees to continue to provide the Communications to the Administrative
Agent in the manner specified in the Financing Documents but only to the extent
requested by the Administrative Agent.

     

    (h)           So
long as WestLB is the Administrative Agent, each Borrower and the Borrower Agent
further agrees that the Administrative Agent may make the Communications
available to the Lenders by posting the Communications on http:
www.intralinks.com (or any replacement or successor thereto) or a substantially
similar electronic transmission systems (the “Platform”).

     

    (i)       
    THE PLATFORM IS PROVIDED “AS IS” AND “AS
AVAILABLE”.  THE AGENTS DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF
THE COMMUNICATIONS, OR THE ADEQUACY OF THE PLATFORM AND EXPRESSLY DISCLAIM
LIABILITY FOR ERRORS OR OMISSIONS IN THE COMMUNICATIONS.  NO WARRANTY
OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD
PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY THE
AGENTS IN CONNECTION WITH THE COMMUNICATIONS OR THE PLATFORM.  IN NO
EVENT SHALL THE ADMINISTRATIVE AGENT OR ANY OF ITS AFFILIATES OR ANY OF THEIR
RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, ADVISORS OR REPRESENTATIVES
(COLLECTIVELY, “AGENT
PARTIES”) HAVE ANY LIABILITY TO ANY BORROWER, THE BORROWER AGENT, ANY
LENDER OR ANY OTHER PERSON OR ENTITY FOR DAMAGES OF ANY KIND, INCLUDING DIRECT
OR INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES, LOSSES OR EXPENSES
(WHETHER IN TORT, CONTRACT OR OTHERWISE) ARISING OUT OF THE BORROWER’S, THE
BORROWER AGENT’S OR THE ADMINISTRATIVE AGENT’S TRANSMISSION OF COMMUNICATIONS
THROUGH THE INTERNET, EXCEPT TO THE EXTENT THE LIABILITY OF ANY AGENT PARTY IS
FOUND IN A FINAL NON-APPEALABLE JUDGMENT BY A COURT OF COMPETENT JURISDICTION TO
HAVE RESULTED PRIMARILY FROM SUCH AGENT PARTY’S GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT.

     

     

    
      
        
        

      

      
        80

        
          

        

      

      
        
        

      

    

     

     

    (j)           The
Administrative Agent agrees that the receipt of the Communications by the
Administrative Agent at its e-mail address set forth in Schedule 11.12 shall
constitute effective delivery of the Communications to the Administrative Agent
for purposes of the Financing Documents.  Each Lender agrees that
notice to it (as provided in the next sentence) specifying that the
Communications have been posted to the Platform shall constitute effective
delivery of the Communications to such Lender for purposes of the Financing
Documents.  Each Lender agrees to notify the Administrative Agent in
writing (including by electronic communication) from time to time of such
Lender’s e-mail address to which the foregoing notice may be sent by electronic
transmission and that the foregoing notice may be sent to such e-mail
address.

     

    (k)           Notwithstanding
clauses (g) to
(j) above, nothing herein shall prejudice the right of any Senior Secured
Party to give any notice or other communication pursuant to any Financing
Document in any other manner specified in such Financing Document.

     

    Section
11.13  Patriot Act
Notice.  Each Senior Secured Party (for itself and not on
behalf of any Lender) hereby notifies the Borrowers that pursuant to the
requirements of the Patriot Act, it is required to obtain, verify and record
information that identifies the Borrowers, which information includes the name
and address of the Borrowers and other information that will allow such Senior
Secured Party to identify the Borrowers in accordance with the Patriot
Act.

     

    Section
11.14  Marshalling; Payments Set
Aside.  Neither any Agent nor any Lender shall be under any
obligation to marshal any assets in favor of any Borrower or any other Person or
against or in payment of any or all the Obligations. To the extent that any
payment by or on behalf of any Borrower is made to any Agent or Lender, or any
Agent or Lender exercises its right of setoff, and such payment or the proceeds
of such setoff or any part thereof is subsequently invalidated, declared to be
fraudulent or preferential, set aside or required (including pursuant to any
settlement entered into by such Agent or Lender in its discretion) to be repaid
to a trustee, receiver or any other party, in connection with any bankruptcy or
insolvency proceeding or otherwise, then (a) to the extent of such recovery, the
Obligation or part thereof originally intended to be satisfied shall be revived
and continued in full force and effect as if such payment had not been made or
such setoff had not occurred, and (b) each Lender severally agrees to pay to
each Agent upon demand its applicable share (without duplication) of any amount
so recovered from or repaid by such Agent, plus interest thereon from the date
of such demand to the date such payment is made at a rate per annum equal to the
Federal Funds Effective Rate from time to time in effect.  The
obligations of the Lenders under Section 11.14(b)
shall survive the payment in full of the Obligations and the termination of this
Agreement.

     

     

    
      
        
        

      

      
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    Section
11.15  Right of
Setoff.  Each Lender and each of its respective Affiliates is
hereby authorized at any time and from time to time during the continuance of an
Event of Default, to the fullest extent permitted by applicable Law, to set off
and apply any and all deposits (general or special, time or demand, provisional
or final, in whatever currency) at any time held and other obligations (in
whatever currency) at any time owing by such Lender or any such Affiliate to or
for the credit or the account of any Borrower against any and all of the
obligations of each Borrower now or hereafter existing under this Agreement or
any other Financing Document to such Lender, irrespective of whether or not such
Lender shall have made any demand under this Agreement or any other Financing
Document and although such obligations of the Borrowers may be contingent or
unmatured or are owed to a branch or office of such Lender different from the
branch or office holding such deposit or obligated on such
indebtedness.  The rights of each Lender and their respective
Affiliates under this Section 11.15 are in
addition to other rights and remedies (including other rights of setoff) that
such Lender or their respective Affiliates may have.  Each Lender
agrees to notify the Borrower Agent and the Administrative Agent promptly after
any such setoff and application; provided that the
failure to give such notice shall not affect the validity of such setoff and
application.

     

    Section
11.16  Severability.  If
any provision of this Agreement or any other Financing Document is held to be
illegal, invalid or unenforceable, (a) the legality, validity and enforceability
of the remaining provisions of this Agreement and the other Financing Documents
shall not be affected or impaired thereby and (b) the parties shall endeavor in
good faith negotiations to replace the illegal, invalid or unenforceable
provisions with valid provisions the economic effect of which comes as close as
possible to that of the illegal, invalid or unenforceable
provisions.  The invalidity of a provision in a particular
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

     

    Section
11.17  Survival.  Notwithstanding
anything in this Agreement to the contrary, Section 11.07 (Costs
and Expenses) and 11.09 (Indemnification
by the Borrowers) shall survive any
termination of this Agreement.  In addition, each representation and
warranty made hereunder and in any other Financing Document or other document
delivered pursuant hereto or thereto or in connection herewith or therewith
shall survive the execution and delivery hereof and thereof.  Such
representations and warranties have been or will be relied upon by each Senior
Secured Party, regardless of any investigation made by any Senior Secured Party
or on their behalf and notwithstanding that any Senior Secured Party may have
had notice or knowledge of any Default or Event of Default at the time of the
Funding, and shall continue in full force and effect as long as any Loan or any
other Obligation hereunder or under any other Financing Document shall remain
unpaid or unsatisfied.

     

     

    
      
        
        

      

      
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    Section
11.18  Treatment of Certain
Information; Confidentiality.  Each of the Agents and the
Lenders agrees to maintain the confidentiality of the Information, except that
Information may be disclosed (a) to its Affiliates and to its Affiliates’
respective partners, directors, officers, employees, agents, advisors and
representatives (it being understood that the Persons to whom such disclosure is
made will be informed of the confidential nature of such Information and
instructed to keep such Information confidential); (b) to the extent requested
or required by any regulatory authority purporting to have jurisdiction over it;
(c) to the extent required by applicable Law or regulations or by any subpoena
or similar legal process; (d) to any other party to this Agreement; (e) in
connection with the exercise of any remedies hereunder or any suit, action or
proceeding relating to this Agreement or the enforcement of rights hereunder
(including any actual or prospective purchaser of Collateral); (f) subject to an
agreement containing provisions substantially the same as those of this Section 11.18, to (i)
any Eligible Assignee of or Participant in, or any prospective Eligible Assignee
of or Participant in, any of its rights or obligations under this Agreement,
(ii) any direct or indirect contractual counterparty or prospective counterparty
(or such contractual counterparty’s or prospective counterparty’s professional
advisor) to any credit derivative transaction relating to the Obligations or
(iii) any Person (and any of its officers, directors, employees, agents or
advisors) that may enter into or support, directly or indirectly, or that may be
considering entering into or supporting, directly or indirectly, either (A)
contractual arrangements with such Agent or Lender, or any Affiliates thereof,
pursuant to which all or any portion of the risks, rights, benefits or
obligations under or with respect to any Loan or Financing Document is
transferred to such Person or (B) an actual or proposed securitization or
collateralization of, or similar transaction relating to, all or a part of any
amounts payable to or for the benefit of any Lender under any Financing Document
(including any rating agency); (g) with the consent of any Borrower; (h) to the
extent such Information (i) becomes publicly available other than as a result of
a breach of this Section 11.18 or (ii)
becomes available to any Agent, any Lender or any of their respective Affiliates
on a nonconfidential basis from a source other than a Borrower; (i) to any
state, federal or foreign authority or examiner (including the National
Association of Insurance Commissioners or any other similar organization)
regulating any Lender; or (j) to any rating agency when required by it (it being
understood that, prior to any such disclosure, such rating agency shall
undertake to preserve the confidentiality of any Information relating to a
Borrower received by it from such Lender).  In addition, any Agent and
the Lenders may disclose the existence of this Agreement and information about
this Agreement to market data collectors, similar service providers to the
lending industry, and service providers to the Agents and the Lenders in
connection with the administration and management of this Agreement, the other
Financing Documents, the Commitments, and the Funding.  For the
purposes of this Section 11.18, “Information” means
written information that any Borrower furnishes to any Agent or Lender after the
date hereof (and designated at the time of delivery thereof in writing as
confidential) pursuant to or in connection with any Financing Document, relating
to the assets and business of such Borrower, but does not include any such
information that (i) is or becomes generally available to the public other than
as a result of a breach by such Agent or Lender of its obligations hereunder,
(ii) is or becomes available to such Agent or Lender from a source other than a
Borrower that is not, to the knowledge of such Agent or Lender, acting in
violation of a confidentiality obligation with such Borrower or (iii) is
independently compiled by any Agent or Lender, as evidenced by their records,
without the use of the Information.  Any Person required to maintain
the confidentiality of Information as provided in this Section 11.18 shall
be considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential
information.

     

     

    
      
        
        

      

      
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    Section
11.19  Waiver of Consequential
Damages, Etc.  Except as otherwise provided in Section 11.09 (Indemnification
by the Borrowers) for the benefit of
any Indemnitee, to the fullest extent permitted by applicable Law, no party
hereto shall assert, and each party hereto hereby waives, any claim, on any
theory of liability, for special, indirect, consequential or punitive damages
(as opposed to direct or actual damages) arising out of, in connection with, or
as a result of, this Agreement, any other Financing Document or any agreement or
instrument contemplated hereby, the transactions contemplated hereby or thereby,
any Loan or the use of the proceeds thereof.  No Indemnitee shall be
liable for any damages arising from the use by unintended recipients of any
information or other materials distributed by it through telecommunications,
electronic or other information transmission systems in connection with this
Agreement or the other Financing Documents or the transactions contemplated
hereby or thereby.

     

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

     

    Section
11.21  Section
552(b).  The Lenders and the Agents shall be entitled to all of
the rights and benefits of section 552(b) of the Bankruptcy Code, and the
“equities of the case” exception under section 552(b) of the Bankruptcy Code
shall not apply to the Lenders or the Agents with respect to proceeds, products,
offspring or profits of any of the Collateral.

     

    [Remainder
of page intentionally blank.  Next page is signature
page.]

     

     

     

     

     


    
      
         


      

      
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    IN
WITNESS WHEREOF, the parties hereto have caused this Debtor-In-Possession Credit
Agreement to be executed by their respective officers as of the day and year
first above written.

     

    
      
        	 	
                PACIFIC
      ETHANOL HOLDING CO. LLC,

                as
      Borrower

              	 
	 	 	 	 
	
              	
                By:
      

              	/s/
      JOHN T. MILLER	 
	 	 	
                Name:  John
      T. Miller

              	 
	 	 	
                Title:  COO

              	 
	 	 	 	 


      

    

     

    
      
        	 	
                PACIFIC
      ETHANOL MADERA LLC,

                as
      Borrower

              	 
	 	 	 	 
	
                 

              	
                By:
      

              	/s/
      JOHN T. MILLER	 
	 	 	
                Name:  John
      T. Miller

              	 
	 	 	
                Title:  COO

              	 
	 	 	 	 


      

    

    
       

      
        
          	 	
                  PACIFIC
      ETHANOL COLUMBIA, LLC,

                  as
      Borrower

                	 
	 	 	 	 
	
                   

                	
                  By:
      

                	/s/
      JOHN T. MILLER	 
	 	 	
                  Name:  John
      T. Miller

                	 
	 	 	
                  Title:  COO

                	 
	 	 	 	 


        

      

      
        
           

          
            
              	 	
                      
                        PACIFIC
      ETHANOL STOCKTON, LLC,
as
      Borrower

                    	 
	 	 	 	 
	
                       

                    	
                      By:
      

                    	/s/
      JOHN T. MILLER	 
	 	 	
                      Name:  John
      T. Miller

                    	 
	 	 	
                      Title:  COO

                    	 
	 	 	 	 


            

          

          
            
               

              
                
                  	 	
                          
                            
                              PACIFIC
      ETHANOL MAGIC VALLEY, LLC,
as
      Borrower

                          

                        	 
	 	 	 	 
	
                           

                        	
                          By:
      

                        	/s/
      JOHN T. MILLER	 
	 	 	
                          Name:  John
      T. Miller

                        	 
	 	 	
                          Title:  COO

                        	 
	 	 	 	 


                

              

              
                
                   

                  
                    
                      	 	
                              
                                
                                  
                                    PACIFIC
      ETHANOL HOLDING CO. LLC,

                                    as
      Borrower Agent

                                  

                                

                              

                            	 
	 	 	 	 
	
                               

                            	
                              By:
      

                            	/s/
      JOHN T. MILLER	 
	 	 	
                              Name:  John
      T. Miller

                            	 
	 	 	
                              Title:  COO

                            	 
	 	 	 	 


                    

                  

                   

                  
                    
                      
                         


                      

                      
                        85

                        
                          

                        

                      

                      
                         


                      

                    

                  

                

              

            

          

        

      

    

     

     

     

    
      
        	 	
                WESTLB
      AG, NEW YORK BRANCH,

                
                  as Administrative Agent

                

              	 
	 	 	 	 
	
                 

              	
                By:
      

              	/s/
      RONALD SPITZER	 
	 	 	Name:  Ronald
      Spitzer	 
	 	 	Title:  Executive
      Director	 
	 	 	 	 


      



    
      
        	 	 	 	 
	
                 

              	
                By:
      

              	/s/ DOMINICK
      D’ASCOLI	 
	 	 	Name:  Dominick
      D’Ascoli	 
	 	 	Title:  Director	 
	 	 	 	 


      

    

     

     

     


    
      
         


      

      
        86

        
          

        

      

      
         


      

    

     

     

    
       

      
        
          	 	
                  WESTLB
      AG, NEW YORK BRANCH,

                  
                    as Lender

                  

                	 
	 	 	 	 
	
                   

                	
                  By:
      

                	/s/
      RONALD SPITZER	 
	 	 	Name:  Ronald
      Spitzer	 
	 	 	Title:  Executive
      Director	 
	 	 	 	 


        



      
        
          	 	 	 	 
	
                   

                	
                  By:
      

                	/s/ DOMINICK
      D’ASCOLI	 
	 	 	Name:  Dominick
      D’Ascoli	 
	 	 	Title:  Director	 
	 	 	 	 


        

      

       

      
        
          	 	
                  WESTLB
      AG, NEW YORK BRANCH,

                  
                    as Collateral
    Agent

                  

                	 
	 	 	 	 
	
                   

                	
                  By:
      

                	/s/
      RONALD SPITZER	 
	 	 	Name:  Ronald
      Spitzer	 
	 	 	Title:  Executive
      Director	 
	 	 	 	 


        



      
        
          	 	 	 	 
	
                   

                	
                  By:
      

                	/s/ DOMINICK
      D’ASCOLI	 
	 	 	Name:  Dominick
      D’Ascoli	 
	 	 	Title:  Director	 
	 	 	 	 


        

      

       

    

     


    
      
         


      

      
        87

        
          

        

      

      
         


      

    

     

     

     

    
      
        	 	
                AMARILLO
      NATIONAL BANK,

                
                  as
      Accounts Bank

                

              	 
	 	 	 	 
	
                 

              	
                By:
      

              	/s/ CRAIG
      L. SANDERS	 
	 	 	Name:  Craig
      L. Sanders	 
	 	 	Title:  Executive
      Vice President	 
	 	 	 	 


      

       

      
        	 	
                AMARILLO
      NATIONAL BANK,

                
                  as
      Senior Secured Party

                

              	 
	 	 	 	 
	
                 

              	
                By:
      

              	/s/ CRAIG
      L. SANDERS	 
	 	 	Name:  Craig
      L. Sanders	 
	 	 	Title:  Executive
      Vice President	 
	 	 	 	 


      

      

 

      
 

      
        
          
             


          

          
            88

            
              

            

          

          
             


          

        

      

       

       

      
 

      
        
          	 	
                  CIFC
      FUNDING 2007-III LTD.,

                  as Senior Secured Party

                	 
	 	 	 	 
	
                   

                	
                  By:
      

                	Signature
      Illegible	 
	 	 	Name 	 
	 	 	Title 	 
	 	 	 	 


        

      

    

     

    
      
        
          	 	
                  
                    CIFC
      FUNDING 2007-IV LTD.,
as
      Senior Secured Party

                	 
	 	 	 	 
	
                   

                	
                  By:
      

                	Signature
      Illegible	 
	 	 	Name 	 
	 	 	Title 	 
	 	 	 	 


        

      

       

       

    

     


    
      
         


      

      
        89

        
          

        

      

      
         


      

    

     

     

     

    
      
        	 	
                CIT
      CAPITAL SECURITIES LLC,

                as Lead Arranger and Co-Syndication Agent
      Senior Secured Party

              	 
	 	 	 	 
	
                 

              	
                By:
      

              	/s/ DREW
      CARLETON	 
	 	 	Name:
      Drew Carleton	 
	 	 	Title:  Vice
      President	 
	 	 	 	 


      

    

     

    
      
        	 	
                
                  CIT
      CAPITAL USA INC.,

                  as
      Senior Secured Party

                

              	 
	 	 	 	 
	
                 

              	
                By:
      

              	/s/ JASON
      B. STEWART	 
	 	 	Name:
      Jason B. Stewart	 
	 	 	Title:  Managing
      Director	 
	 	 	 	 


      

    

     

     

     


    
      
         


      

      
        90

        
          

        

      

      
         


      

    

     

     

     

    
      
        	 	
                CREDIT
      SUISSE CANDLEWOOD SPECIAL SITUATIONS MASTER FUND, LTD.

                By: Credit Suisse Alternative Capital, Inc. as
      investment manager

              	 
	 	 	 	 
	
                 

              	
                By:
      

              	/s/
      DAVID KOENIG	 
	 	 	
                Name:
      David Koenig

              	 
	 	 	Title:  Authorized
      Signatory	 
	 	 	 	 


      

    

     

     

     


    
      
         


      

      
        91

        
          

        

      

      
         


      

    

     

    
 

    
      
        	 	
                GREENSTONE
      FARM CREDIT SERVICES, ACA/FLCA,

                as Senior Secured Party

              	 
	 	 	 	 
	
                 

              	
                By:
      

              	/s/ ALFRED
      S. COMPTON, JR.	 
	 	 	
                Name:
      Alfred S. Compton, Jr.

              	 
	 	 	Title:  Sr.
      Vice President/Managing Director	 
	 	 	 	 


      

    

     

     

     


    
      
         


      

      
        92

        
          

        

      

      
         


      

    


     

    

      
        
          	 	
                  
                    METROPOLITAN
      LIFE INSURANCE COMPANY,
as
      Senior Secured Party

                	 
	 	 	 	 
	
                   

                	
                  By:
      

                	/s/ DAVID
      YU	 
	 	 	
                  
                    Name:
      David Yu

                  

                	 
	 	 	Title:  	 
	 	 	 	 


        

      

       

    

     

     


    
      
         


      

      
        93

        
          

        

      

      
         


      

    


    
       

      

        
          
            	 	
                    
                      
                        NORDKAP
      BANK AG,

                        as
      Senior Secured Party

                      

                    

                  	 
	 	 	 	 
	
                     

                  	
                    By:
      

                  	/s/
      ERIC W. SIEVERS	 
	 	 	
                    
                      
                        Name:
      Eric W. Sievers

                      

                    

                  	 
	 	 	
                    Title:  SVP

                  	 
	 	 	 	 
	 	 	 	 
	 	
                    By:
      

                  	/s/
      STEFAN GERIG	 
	 	 	Name:
      Stefan GERIG	 
	 	 	Title:  CIO	 
	 	 	 	 


          

        

         

      

    

     

    
 

    
      
         


      

      
        94

        
          

        

      

      
         


      

    


    
       

      

        
          
            	 	
                    
                      
                        
                          NORDDEUTSCHE
      LANDESBANK

                          GIROZENTRALE
      NEW YORK BRANCH,
as
      Senior Secured Party

                      

                    

                  	 
	 	 	 	 
	
                     

                  	
                    By:
      

                  	/s/
      JOSEF HAAS 	 
	 	 	
                    
                      
                        Name:
      Josef Haas

                      

                    

                  	 
	 	 	
                    
                      Title:  Senior
      Director

                    

                  	 
	 	 	 	 
	 	 	 	 
	 	
                    By:
      

                  	/s/
      STEFANIE SCHOLZ	 
	 	 	
                    Name:
      Stefanie Scholz

                  	 
	 	 	Title:  Managing
      Director	 
	 	 	 	 


          

        

         

      

    

     

     


    
      
         


      

      
        95

        
          

        

      

      
         


      

    

     

     

    
      

        
          
            	 	
                    
                      
                        
                          
                            NORTHWEST
      FARM CREDIT SERVICES, FLCA,

                          
as
      Senior Secured Party

                      

                    

                  	 
	 	 	 	 
	
                     

                  	
                    By:
      

                  	/s/
      CASEY KINZER	 
	 	 	
                    
                      
                        
                          Name:
      Casey Kinzer

                        

                      

                    

                  	 
	 	 	
                    
                      Title:  Account
      Manager

                    

                  	 
	 	 	 	 


          

        

        
           

           

           

        

      

    

    
      
         


      

      
        96

        
          

        

      

      
         


      

    

     

    
 

    
      
        
          
            	 	
                    
                      
                        
                          
                            COOPERATIEVE
      CENTRALE

                            RAIFFEISEN-BOERENLEENBANK
      B.A.,

                            “RABOBANK
      NEDERLAND”, NEW YORK BRANCH,
as
      Senior Secured Party

                        

                      

                    

                  	 
	 	 	 	 
	
                     

                  	
                    By:
      

                  	/s/
      ANDREW SHERMAN	 
	 	 	
                    
                      
                        
                          Name:
      Andrew Sherman

                        

                      

                    

                  	 
	 	 	
                    
                      
                        Title:  Executive
      Director

                      

                    

                  	 
	 	 	 	 
	 	 	 	 
	 	
                    By:
      

                  	/s/ JOHN MCMAHON  	 
	 	 	
                    
                      Name:
      John McMahon

                    

                  	 
	 	 	
                    Title:  Managing
      Director

                  	 
	 	 	 	 


          

        

         

      

    

     

     


    
      
         


      

      
        97

        
          

        

      

      
         


      

    


    

      
        

          
            
              	 	
                      
                        
                          
                            
                              
                                SHOREBANK
      PACIFIC,
as
      Senior Secured Party

                            

                          

                        

                      

                    	 
	 	 	 	 
	
                       

                    	
                      By:
      

                    	/s/
      MATTHEW MYLET  	 
	 	 	
                      
                        
                          
                            
                              Name:
      Matthew Mylet

                            

                          

                        

                      

                    	 
	 	 	
                      
                        Title:  Assistant
      Vice President

                      

                    	 
	 	 	 	 


            

          

          
             

             

          

        

      

    

    


    
      
        
           


        

        
          98

          
            

          

        

        
           


        

      

    

    


    SCHEDULE
1.01 

    to DIP Credit
Agreement

     

    LENDERS, LOAN COMMITMENTS
AND OFFICES 

     

    I. REVOLVING AND
ROLL UP LOANS

    
      	 	 	 	 	 
	
              REVOLVING
      LENDER

            	
              REVOLVING
      LOAN COMMITMENT

            	
              ROLL
      UP LOAN COMMITMENT

            	
              DOMESTIC
      OFFICE

            	
              EURODOLLAR
      OFFICE

            
	
              WestLB
      AG, New York Branch

            	
              $1,485,606.38

            	
              $2,228,409.53

            	
              WestLB
      AG, New York Branch

              1211
      Avenue of the Americas 

              New
      York, NY 10036

               

              Attention:
      Cheryl Wilson 

              Telephone:
      212-852-6152 

              Facsimile:
      212-302-7946

            	
              WestLB
      AG, New York Branch 

              1211
      Avenue of the Americas 

              New
      York, NY 10036

               

              Attention:
      Cheryl Wilson 

              Telephone:
      212-852-6152

              Facsimile:
      212-302-7946

            
	
              Amarillo
      National Bank

            	
              $805,589.60

            	
              $1,208,384.41

            	
              Amarillo
      National Bank 

              410
      South Taylor Street 

              Amarillo,
      TX 79101

               

              Attention:
      Nelda Fox

              Telephone:
      806-378-8185 

              Facsimile:
      806-345-1663

            	
              Amarillo
      National Bank 

              410
      South Taylor Street 

              Amarillo,
      TX 79101

               

              Attention:
      Nelda Fox 

              Telephone:
      806-378-8185 

              Facsimile:
      806-345-1663

            
	
              CIFC
      Funding 2007-III Ltd.

            	
              $391,677.47

            	
              $587,516.21

            	
              CIFC
      Funding 2007-III, Ltd. 

              250
      Park Avenue, 5th
      Floor

              New
      York, NY 10177

               

              Attention:
      Maxum Tomaszewski 

              Telephone:
      312-992-5351 

              Facsimile:
      312-276-8816

              
                Email:
      cifc.funding.clo5@abnamro.com

              

            	 
      


    

    


     

    


    
      
        
           


        

        
          1.01 -
1

          
            

          

        

        
           


        

      

    

    


    


     

     

    


    
      	 	 	 	 	 
	
              REVOLVING
      LENDER

            	
              REVOLVING
      LOAN COMMITMENT

            	
              ROLL
      UP LOAN COMMITMENT

            	
              DOMESTIC
      OFFICE

            	
              EURODOLLAR
      OFFICE

            
	
              CIFC
      Funding 2007-IV, Ltd.

            	
              $652,795.68

            	
              $979,193.52

            	
              CIFC
      Funding 2007-IV, Ltd. 

              250
      Park Avenue, 5th
      Floor

              New
      York, NY 10177

               

              Attention:
      Marcum Tomaszewski 

              Telephone:
      312-992-5351 

              Facsimile:
      312-276-8816

              Email: cifc.funding.clo5@abnamro.com

            	 
	
              CIT
      Capital USA Inc.

            	
              $3,300,137.73

            	
              $4,950,206.60

            	
              CIT
      Capital USA Inc.

              1
      CIT Drive

              Livingston
      NJ 07039

               

              Attention:
      Gary Conza 

              Telephone:
      212-461-7829 

              Facsimile:
      212-461-7825

            	
              CIT
      Capital USA Inc. 

              1
      CIT Drive

              Livingston
      NJ 07039

               

              Attention:
      Gary Conza 

              Telephone:
      212-461-7829 

              Facsimile:
      212-461-7825

            
	
              Credit
      Suisse

              Candlewood
      Special Situations Master Fund, Ltd.

            	
              $4,864,148.59

            	
              $7,296,222.89

            	
              Credit
      Suisse Candlewood 

              Special
      Situations Master Fund, Ltd.

              C/o
      Credit Suisse Alternative Capital, Inc.

              Eleven
      Madison Avenue, 

              New
      York, NY 10010 

               

              Attention:
      Peter Dowling 

              Telephone:
      212-538-5198 

              Facsimile:
      646-935-8749

            	 
      


    

    


     

    


    
      
        
           


        

        
          1.01 -
2

          
            

          

        

        
           


        

      

    

    


    


    
      	 	 	 	 	 
	
              REVOLVING
      LENDER

            	
              REVOLVING
      LOAN COMMITMENT

            	
              ROLL
      UP LOAN COMMITMENT

            	
              DOMESTIC
      OFFICE

            	
              EURODOLLAR
      OFFICE

            
	
              Coöperatieve
      Centrale Raiffeisen-

              Boerenleenbank
      B.A., “Rabobank Nederland,” 
      New York Branch

            	
              $1,989,529.19

            	
              $2,984,293.78

            	
              Coöperatieve
      Centrale Raiffeisen-Boerenleenbank B.A., “Rabobank
Nederland,”

              245
      Park Avenue

              New
      York, NY 10167

               

              Attention:
      Siu Chu

              Telephone:
      201-499-5496 

              Facsimile:
      888-506-1179

            	
              Coöperatieve
      Centrale Raiffeisen-Boerenleenbank B.A.,  “Rabobank
      Nederland,”

              245
      Park Avenue

              New
      York, NY 10167 

               

              Attention:
      Siu Chu 

              Telephone:
      201-499-5496 

              Facsimile:
      888-506-1179

            
	
              Metropolitan
      Life Insurance Company

            	
              $1,701,944.26

            	
              $2,552,916.40

            	
              Metropolitan
      Life Insurance Company

              10
      Park Avenue

              Morristown,
      NJ 07962 

              Attention:
      Neil Fredricks 

              Telephone:
      813-983-4455 

              Facsimile:
      212-251-1604

            	
              n/a

            
	
              Norddeutsche

              Landesbank

              Girozentrale
      New York Branch

            	
              $1,871,279.73

            	
              $2,806,919.60

            	
              Nord/LB
      New York Branch 

              1114
      Avenue of the Americas,
      37th
      Floor

              New
      York, NY 10036

               

              Credit
      Issues

              
                Attention:
      Josef Haas 

                Telephone:
      212-812-6805 

                Facsimile:
      212-812-6860 

                 

                Funding
      Notices

                Attention:
      Arcadio Diaz 

                
                  Telephone:
      212-812-6809 

                  Facsimile:
      212-812-6860

                

              

            	
              Nord/LB
      Cayman Island Branch

              1114
      Ave. of the Americas, 37th
      Floor

              New
      York, NY 10036

               

              Credit
      Issues

              
                Attention:
      Josef Haas 

                Telephone:
      212-812-6805 

                Facsimile:
      212-812-6860 

                 

                Funding
      Notices

                
                  Attention:
      Arcadio Diaz 

                  Telephone:
      212-812-6809 

                  Facsimile:
      212-812-6860

                

              

            


    

    


     

    


    
      
        
           


        

        
          1.01 -
3

          
            

          

        

        
           


        

      

    

    


     

    


    
      	 	 	 	 	 
	
              REVOLVING
      LENDER

            	
              REVOLVING
      LOAN COMMITMENT

            	
              ROLL
      UP LOAN COMMITMENT

            	
              DOMESTIC
      OFFICE

            	
              EURODOLLAR
      OFFICE

            
	
              GreenStone
      Farm Credit Services, ACA/FLCA

            	
              $547,061.33

            	
              $820,591.99

            	
              GreenStone
      Farm Credit Services, 

              ACA/FLCA
      

              1760
      Abbey Road, Ste. 320

              East
      Lansing, MI 48823 

               

              Attention:
      Nichole Ross 

              Telephone:
      517-324-0273 

              Facsimile:
      517-324-0211

               

              Attention:
      Amber Selle 

              Telephone:
      517-324-0211 

              Facsimile:
      517-318-1240

            	
              GreenStone
      Farm Credit Services, ACA/FLCA 

              1760
      Abbey Road, Ste. 320

              East
      Lansing, MI 48823 

               

              Attention:
      Nichole Ross 

              Telephone:
      517-324-0273 

              Facsimile:
      517-324-0211

               

              Attention:
      Amber Selle 

              Telephone:
      517-324-0211 

              Facsimile:
      517-318-1240

               

            
	
              Nordkap
      Bank AG

            	
              $1,588,972.09

            	
              $2,383,458.14

            	
              n/a

            	
              Nordkap
      Bank AG

              Thurgauerstrasse
      54

              8050
      Zurich, Switzerland-CH

               

              Attention:
      Isabelle Scherer 

              Telephone:
      011-41-1-3 06-4922 

              Facsimile:
      011-41-44-306-4911 

              Email:
      isabelle.scherer@nordkapbank.com

               

            
	
              Northwest
      Farm Credit Services, FLCA

            	
              $547,061.33

            	
              $820,591.99

            	
              Northwest
      Farm Credit Services, FLCA

              1700
      South Assembly St. 

              Spokane,
      WA 99224

               

              Attention: Sophia
      Conley 

              Telephone:
      800-216-4535 

              Facsimile
      509-340-5508 

              Email:
      tech_acctg@farm- credit.com

            	
              Northwest
      Farm Credit Services, FLCA

              1700
      South Assembly St. 

              Spokane,
      WA 99224

               

              Attention: Sophia
      Conley 

              Telephone:
      800-216-4535 

              Facsimile
      509-340-5508 

              Email: tech_acctg@farm­credit.com

               

            


    

    


     

    


    
      
        
           


        

        
          1.01 -
4

          
            

          

        

        
           


        

      

    

    


     

    


    
      	 	 	 	 	 
	
              REVOLVING
      LENDER

            	
              REVOLVING
      LOAN COMMITMENT

            	
              ROLL
      UP LOAN COMMITMENT

            	
              DOMESTIC
      OFFICE

            	
              EURODOLLAR
      OFFICE

            
	
              ShoreBank
      Pacific

            	
              $254,196.62

            	
              $381,294.94

            	
              ShoreBank
      Pacific

              203
      Howerton Way SE,

              PO
      Box 400

              Ilwaco,
      WA 98624 

               

              Attention:
      Susan Day 

              Telephone:
      503-916-1552 

              Facsimile:
      503-827-5003

               

              Attention:
      Rebecca Tuccio 

              Telephone:
      503-916-1552 

              Facsimile:
      503-827-5003

            	
              n/a

            


    

    


     

    


    
      
        
           


        

        
          1.01 -
5

          
            

          

        

        
           


        

      

    

    


    SCHEDULE
2.01

    to DIP Credit
Agreement

     

     

    UNITED
STATES BANKRUPTCY COURT

    FOR
THE DISTRICT OF DELAWARE

     

    
      	
              In
      re:

               

              PACIFIC
      ETHANOL HOLDING CO. LLC, et al.,1

               

              
                Debtors.

                 

              

            	
              Chapter
      11

               

              Case
      No. 09- (_____)

               

              
                Joint
      Administration Requested

              

            
	
            	
            


    

     

    INTERIM
ORDER (I) AUTHORIZING THE DEBTORS TO (A) OBTAIN

    POSTPETITION
FINANCING PURSUANT TO 11 U.S.C. §§ 105, 361, 362, 363(c),

    363(e),
364(c), 364(d)(1) AND 364(e) AND (B) UTILIZE CASH COLLATERAL

    OF
PREPETITION SECURED ENTITIES, (II) GRANTING

    ADEQUATE
PROTECTION TO PREPETITION SECURED ENTITIES,

    (III)
SCHEDULING A FINAL HEARING PURSUANT TO BANKRUPTCY

    RULES 4001(b) AND 4001(c),
AND (IV) GRANTING RELATED RELIEF

     

    
      
        This
matter is before the Court on the motion dated May __, 2009 (the “Motion”)2 of Pacific Ethanol Holding Co.
LLC (“Holding”)
and its affiliated debtors, as debtors-in­possession (collectively, the “Debtors”) in the
above-referenced chapter 11 cases (collectively, the “Chapter 11 Cases”), for
entry of an interim order (this “Interim Order”)
and a final order (“Final Order”), under
sections 105, 361, 362, 363(c), 363(e), 364(c), 364(d)(1) and 364(e) of title 11
of the United States Code, 11 U.S.C. §§ 101-1532 (as amended, the “Bankruptcy Code”),
and Rules 2002, 4001 and 9014 of the Federal Rules of Bankruptcy Procedure (as
amended, the “Bankruptcy Rules”)
and Rule 4001-2 of the Local Rules of Bankruptcy Practice and
Procedure

         

          
            

          

        

      

    

    
      	
              1

            	
              The
      Debtors are: Pacific Ethanol Holding Co. LLC (Tax ID No. XX-XXX6981),
      Pacific Ethanol Stockton, LLC (Tax ID No. XX-XXX8349), Pacific Ethanol
      Columbia, LLC (Tax ID No. XX-XXX9392), Pacific Ethanol Madera, LLC (Tax
      ID. No. XX-XXX3339), Pacific Ethanol Magic Valley, LLC (Tax ID. No.
      XX­XXX7391),. The mailing address for Pacific Ethanol Holding Co.,
      LLC. is 400 Capitol Mall, Suite 2060, Sacramento, CA
  95814.

            
	 
      	 
      
	
              2

            	
              All
      defined terms shall have the meaning ascribed to them in the Motion or DIP
      Documents (as defined below) unless otherwise defined
    herein.

            


    

    


    


    
      
        
           


        

        
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    of the
United States Bankruptcy Court for the District of Delaware (the “Local Rules”), seeking, among
other things:

    (1)           
authorization for Holding, Pacific Ethanol Stockton, LLC (“Stockton”), Pacific Ethanol
Columbia, LLC (“Columbia”), Pacific Ethanol
Madera, LLC (“Madera”), and Pacific Ethanol
Magic Valley, LLC (“Magic Valley” and together with
Holding, Stockton, Columbia and Madera, each as a Debtor, the “Borrowers”) to obtain
post-petition financing (the “DIP Facility”) consisting of:
(a) a super priority non- amortizing revolving credit facility (the “DIP Revolving Loans”) in an
aggregate principal amount not to exceed $20 million (the “DIP Revolving Commitment”), of
which up to $10 million shall be available upon entry of this Interim Order
(“DIP Revolving
Interim Commitment”), and (b) a 1.50:1.00 dollar conversion
(calculated on the basis of a one and one-half dollar of DIP Roll-Up Loans (as
defined below) for each dollar of DIP Revolving Loans provided by the DIP
Lenders) in respect of the outstanding term loans under the Prepetition Credit
Facility beneficially owned by each applicable DIP Lender (as defined below) (or
an affiliate) at 5 p.m. (prevailing Eastern time) on May 15, 2009 (the “DIP Roll-Up Loans”) in an
aggregate principal amount not to exceed $30 million (the “DIP Roll-Up Amount”) of which
up to $15 million shall convert concurrently with the funding of the DIP
Revolving Interim Commitment upon entry of this Interim Order, each subject to
the terms and conditions of the DIP Facility Documents (as defined below), with
WestLB AG, New York Branch (“WestLB”), as administrative
agent and collateral agent (collectively, the “DIP Agent”) for itself and a
syndicate of financial institutions (together with WestLB, the “DIP Lenders”) and Amarillo
National Bank (“DIP Accounts Bank”), pursuant
to the terms of this Interim

     

    


    
      
        
           


        

        
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    Order and
that certain Debtor-in-Possession Credit Agreement, by and among the Borrowers,
DIP Agent and DIP Lenders (as the same may be amended, restated, supplemented or
otherwise modified from time to time pursuant to the terms thereof, the “DIP
Agreement,” and together with any related documents and
instruments delivered pursuant to or in connection therewith (including the
“Financing Documents” referenced therein), the “DIP
Documents”), as generally summarized by the Debtor-In-Possession
Credit Facility Term Sheet, attached hereto as Exhibit
A (the “DIP
Term Sheet”);

    (2)            authorization
for the Debtors to execute and enter into the DIP Documents (which shall be in
form and substance acceptable to the DIP Agent and the DIP Lenders) and to
perform such other and further acts as may be required in connection with the
DIP Documents;

    (3)            authorization
for the Debtors to grant (i) security interests and liens (including
liens pursuant to sections 364(c)(2) and 364(c)(3) of the Bankruptcy Code and
limited priming liens pursuant to section 364(d) of the Bankruptcy Code) to the
DIP Agent, for the benefit of the DIP Agent and the DIP Lenders, to secure all
obligations of the Debtors under and with respect to the DIP Facility
(collectively, the “DIP
Obligations”),
and (ii) superpriority claims (including a superpriority administrative claim
pursuant to section 364(c)(1) of the Bankruptcy Code) to the DIP Agent and the
DIP Lenders, with respect to the DIP Obligations, as more fully set forth in
this Interim Order;

    (4)           
authorization for the Debtors’ use of cash collateral, as such term is
defined
in section 363(a) of the Bankruptcy Code (as so defined, “Cash
Collateral”), on the terms and conditions set forth in this
Interim Order;

     

    


    
      
        
           


        

        
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    (5)            authorization
to provide adequate protection of the liens and

    security
interests (such liens and security interests, the “Prepetition
Liens”) granted for the benefit of the prepetition senior secured lenders
(such lenders in such capacities, the “Prepetition
Lenders”) under that certain Credit Agreement, dated as of February 27,
2007 (as amended, restated, supplemented or otherwise modified from time to time
and in effect on the date hereof, the “Prepetition
Credit Agreement”), among the Borrowers, the Prepetition Lenders, WestLB,
as Administrative Agent (in such capacity and in the capacity of Collateral
Agent under the security documents for the Prepetition Obligations (as defined
herein) on behalf of the Prepetition Lenders, the “Prepetition
Agent”) and as a Prepetition Lender, and Amarillo National Bank, as
accounts bank (the “Prepetition
Accounts
Bank”), securing the Borrowers’ obligations (the “Prepetition
Obligations”) under the Prepetition Credit Agreement, the Prepetition
Security Documents (as defined below) and all collateral and ancillary documents
executed or delivered in connection therewith (the “Prepetition
Facility Documents”), as more fully set forth in this Interim
Order;

    (6)            an
emergency interim hearing (the “Interim
Hearing”) on the

    Motion
for this Court to consider entry of this Interim Order, which, among other
things, (i) authorizes the Debtors, on an interim basis, to obtain from the DIP
Lenders under the DIP Facility up to an aggregate principal amount not to exceed
$20 million (of which $10 million shall be available upon the entry of this
Interim Order) in DIP Revolving Commitments and convert up to an aggregate
principal amount of $30 million in DIP Roll-Up Amounts (of which $15 million
shall convert upon entry of this Interim Order), pursuant to the terms of, and
on the conditions contained in, the DIP Agreement and this

     

    


    
      
        
           


        

        
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    Interim
Order; (ii) authorizes each Borrower to guarantee the DIP Obligations of each
other Borrower; (iii) authorizes the Debtors’ use of the Cash Collateral; and
(iv) grants the adequate protection described herein;

    (7)            the
scheduling of a final hearing (the “Final
Hearing”) on the Motion no
later than July 1, 2009 to consider entry of a Final Order authorizing the
borrowings under the DIP Documents on a final basis and approve the form of
notice procedures with respect thereto; and

    (8)            modification
of the automatic stay imposed under section 362 of the
Bankruptcy Code to the extent necessary to permit the (a) Debtors, (b) DIP Agent
and DIP
Lenders, and (c) Prepetition Lenders and Prepetition Agent (together, the
“Prepetition
Secured Entities,”
and collectively with the DIP Agent and the DIP Lenders, the “Secured
Lending Entities”) to implement the terms of this Interim
Order.

    This
Court having found that, under the circumstances, due and sufficient notice of
the Motion and Interim Hearing was provided by the Debtors as set forth in
Paragraph K below, and having held the Interim Hearing on May __, 2009 after
considering all the pleadings filed with this Court; and having overruled all
unresolved objections to the relief requested in the Motion; and upon the record
made by the Debtors at the Interim Hearing and the Affidavit of Christopher W.
Wright, Vice President of Pacific Ethanol Holding Co. LLC, in Support of First
Day Motions, and after due deliberation and consideration and good and
sufficient cause appearing therefore:

    THE COURT HEREBY FINDS AND CONCLUDES
AS FOLLOWS:

    A. Filing
of Petition. On May 17, 2009 (the “Petition
Date”), each Debtor filed a
voluntary petition (collectively, the “Petitions”)
with this Court commencing a case under

     

    


    
      
        
           


        

        
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    chapter
11 of the Bankruptcy Code. The Debtors are continuing to operate their
respective businesses and manage their respective properties as debtors in
possession pursuant to sections 1107 and 1108 of the Bankruptcy
Code.

     

    B.            Jurisdiction;
Venue. This Court has subject matter jurisdiction to consider
this
matter pursuant to 28 U.S.C. §§ 157 and 1334. This is a core proceeding pursuant
to 28 U.S.C. § 157(b). The statutory predicates for the relief sought herein are
sections 105, 361, 362, 363 and 364 of the Bankruptcy Code and Bankruptcy Rules
2002, 4001(b) and 9014. Venue of the Chapter 11 Cases and the Motion in this
District is proper pursuant to 28 U.S.C. §§ 1408 and 1409.

     

    C.            Debtors’
Stipulations. Subject to the limitations thereon described below
in
Paragraph 15, the Debtors hereby agree and stipulate that:

     

    (i)            as
of the Petition Date, Holding, Stockton, Columbia, Madera and Magic
Valley (collectively, the “Prepetition
Credit Parties”) were truly and justly indebted to the Prepetition
Lenders pursuant to the Prepetition Facility Documents in the aggregate
principal amount of $247,307,091, plus accrued and unpaid interest with respect
thereto and any additional fees, costs and expenses as provided under the
Prepetition Facility Documents (the “Prepetition
Indebtedness”)
3;

     

    (ii)            pursuant
to certain security agreements, blocked account, lockbox and
pledged account control agreements, mortgages, deeds of trust, assignments, and
other collateral documents and agreements (as amended, restated, supplemented or
otherwise modified from time to time and in effect on the date hereof,
collectively, the

     

     

     

      
        

      

    

    3
Pacific Ethanol California, Inc. (“PECA”),
the intermediate holding company for Holding, is not included as a Borrower or
Guarantor under the Prepetition Credit Agreement but has provided a secured
accommodation pledge of its ownership interest in Holding pursuant to the terms
of the Prepetition Credit Agreement. PECA is not a debtor in these
proceedings.

     

    


    


    
      
        
           


        

        
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    “Prepetition
Security Documents”), and the other Prepetition Facility Documents, the
Prepetition Credit Parties granted to and/or for the benefit of the Prepetition
Secured Entities a first priority valid, perfected and enforceable security
interest in certain real and personal property of the Prepetition Credit Parties
(the “Prepetition
Collateral”); and

    (iii) (a)
the Prepetition Obligations constitute legal, valid and binding Obligations (as
defined in the Prepetition Credit Agreement) of each of the Prepetition Credit
Parties; (b) no offsets, defenses or counterclaims to the Prepetition
Obligations exist; (c) no portion of the Prepetition Obligations is subject to
avoidance, disallowance, reduction or subordination pursuant to the Bankruptcy
Code or applicable non- bankruptcy law; (d) the Prepetition Facility Documents
are valid and enforceable by the Prepetition Secured Entities against each of
the applicable Prepetition Credit Parties; (e) the Prepetition Liens constitute
valid, binding, enforceable and perfected liens in and to the Prepetition
Collateral, having the priority set forth in the Prepetition Facility Documents
and subject only to the liens described in the Prepetition Facility Documents,
and are not subject to avoidance, reduction, disallowance, disgorgement,
counterclaim, surcharge or subordination pursuant to the Bankruptcy Code or
applicable non- bankruptcy law; (f) the Prepetition Obligations constitute
allowed secured claims against the applicable Debtors’ estates; and (g) no claim
of or cause of action held by the Debtors exists against the Prepetition Agent,
Prepetition Lenders or their agents, whether arising under applicable state or
federal law (including, without limitation, any recharacterization,
subordination, avoidance or other claims arising under or pursuant to sections
105, 510 or 542 through 553 of the Bankruptcy Code), or whether arising under or
in connection with any of the Prepetition Facility Documents (or the
transactions

     

     

    


    
      
        
           


        

        
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    contemplated
thereunder), Prepetition Obligations or Prepetition Liens, including without
limitation, any right to assert any disgorgement or recovery.

     

    D.   
  Budget
for DIP Facility. Attached hereto as Exhibit
B is a rolling 13-week cashflow
budget setting forth all projected cash receipts and cash disbursements (by line
item) on a weekly basis for the time period from May 17, 2009 through and
including July 1, 2009 (the “Initial Approved Budget”). The
Initial Approved Budget may be modified or supplemented from time to time by
additional budgets (covering any time period covered by a prior budget or
covering additional time periods) prepared by the Debtors, without subsequent
notice to or order of the Court (each such additional budget, a “Supplemental Approved Budget”
and together with the Initial Approved Budget, the “Approved Budget”).
The Initial Approved Budget is an integral part of this Interim Order and has
been relied upon by the DIP Agent and the DIP Lenders in deciding to agree to
this Interim Order, to provide the DIP Facility and to permit the use of the
Cash Collateral. The Debtors represent and warrant to the DIP Agent, the DIP
Lenders and this Court that the Approved Budget includes and contains the
Debtors’ best estimate of all operational receipts and all operational
disbursements, fees, costs and other expenses that will be payable, incurred
and/or accrued by any of the Debtors during the period covered by the Approved
Budget and that such operational disbursements, fees, costs and other expenses
will be timely paid in the ordinary course of business pursuant to and in
accordance with the Approved Budget unless such operational disbursements, fees,
costs and other expenses are not incurred or otherwise payable. The Debtors
shall be permitted a variance between the aggregate actual cash receipts and
disbursements on a consolidated basis and the amounts projected in the Approved
Budget of 10% in the aggregate, measured on a rolling four-week
basis.

     

     

    


    
      
        
           


        

        
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    E.            Immediate Need for
Funding. Based upon the pleadings and proceedings of record
in the Chapter 11 Cases, the Debtors do not have sufficient available sources of
working capital and financing to carry on the operation of their businesses
without the DIP Facility. As a result of the Debtors’ financial condition, the
use of Cash Collateral alone would be insufficient to meet the Debtors’
immediate postpetition liquidity needs. The Debtors’ ability to maintain
business relationships with their vendors, suppliers and customers, pay their
employees, purchase and supply new inventory and otherwise finance their
operations is essential to the Debtors’ continued viability. In addition, (i)
the Debtors’ critical need for financing is immediate; (ii) in the absence of
the DIP Facility, the continued maintenance and limited operation of the
Debtors’ businesses would not be possible and serious and irreparable harm to
the Debtors and their estates would occur; and (iii) the preservation,
maintenance and enhancement of the going concern value of the Debtors are of the
utmost significance and importance to a successful reorganization of the
Debtors.

    F.            No Alternate
Financing. The Debtors are unable to obtain sufficient interim
and long-term financing from sources other than the DIP Lenders on terms more
favorable than under the DIP Facility and the DIP Documents, and are not able to
obtain unsecured credit allowable as an administrative expense under section
503(b)(1) of the Bankruptcy Code. The Debtors are also unable to obtain secured
credit allowable under sections 364(c)(1), 364(c)(2) and 364(c)(3) of the
Bankruptcy Code for the purposes set forth in the DIP Agreement without the
Debtors (i) granting to the DIP Agent and the DIP Lenders, subject to the
Carve-Out as provided herein, (x) the DIP Superpriority Claims (as defined
below) and (y) the DIP Liens (as defined below) in the DIP Collateral (as
defined below), as provided herein and in the DIP Documents and (ii) allowing
any DIP Lender to convert its respective pro rata share of

     

    


    
      
        
           


        

        
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    outstanding
Prepetition Indebtedness into DIP Roll-Up Loans on a basis of one and one-half
dollar of DIP Roll-Up Loans for each dollar of DIP Revolving Loans provided by
such DIP Lender.

    G.            Reasonable; Good
Faith. Based upon the pleadings and proceedings of record in
the Chapter 11 Cases, (i) the terms and conditions of the DIP Facility are fair
and reasonable, reflect the Debtors’ exercise of prudent business judgment
consistent with their fiduciary duty and are supported by reasonably equivalent
value and fair consideration, (ii) the DIP Facility has been negotiated in good
faith and at arm’s length among the Debtors, the DIP Agent and the DIP Lenders
and (iii) any credit extended, loans made and other financial accommodations
extended to the Debtors by the DIP Lenders have been extended, issued or made,
as the case may be, in “good faith” within the meaning of section 364(e) of the
Bankruptcy Code.

    H.            Use of Cash
Collateral. An immediate and
critical need exists for the Debtors
to use the Cash Collateral (in addition to the DIP Facility) to continue to
operate their businesses in the ordinary course, pay wages, maintain business
relationship with vendors, suppliers and customers, make capital expenditures,
make adequate protection payments, generally conduct their business affairs so
as to avoid immediate and irreparable harm to their estates and the value of
their assets, and afford the Debtors adequate time to finalize and execute
documents under the DIP Facility (subject to and within the limits imposed by
the terms of this Interim Order).

    I.     Consent by Prepetition Lenders.
The Prepetition Lenders have consented to (i)
the financing arrangements contemplated by this Interim Order and the DIP
Documents and (ii) Debtors’ proposed use of their Cash Collateral, on the terms
and conditions set forth in this

     

    


    
      
        
           


        

        
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    Interim
Order. The consent of the Prepetition Lenders is expressly limited to the
postpetition financing being provided by the DIP Lenders (as contemplated by
this Interim Order and the DIP Documents) and the provision of adequate
protection herein, and shall not extend to any other postpetition financing or
to any modified version of the DIP Facility.

    J.            Adequate Protection. The
adequate protection provided to the Prepetition Agent and
the Prepetition Lenders for any diminution in the value of such parties’
respective interest in the Prepetition Collateral from and after the Petition
Date, including, without limitation, from the DIP Facility and use of the Cash
Collateral, pursuant to the provisions of this Interim Order, is consistent with
and authorized by the Bankruptcy Code and is offered by the Debtors to protect
such parties’ interests in the Prepetition Collateral in accordance with
sections 361, 362 and 363 of the Bankruptcy Code. The consent of the Prepetition
Agent and the Prepetition Lenders to the priming of their liens by the DIP Liens
does not constitute, and shall not be construed as constituting, an
acknowledgment or stipulation by the Prepetition Agent or the Prepetition
Lenders that their respective interests in the Prepetition Collateral are
adequately protected pursuant to this Interim Order or otherwise. The adequate
protection provided herein and other benefits and privileges contained herein
are necessary in order to obtain the foregoing consents and agreements and the
non-objection of such parties.

    K.            Notice.
Notice of the Interim Hearing and the entry of this Interim Order
has been provided to: (i)
the largest unsecured creditors on a consolidated basis, as listed and filed
with the Petition; (ii) the Office of the United States Trustee for the District
of Delaware (the “U.S. Trustee”); (iii) the
Securities and Exchange Commission; (iv) counsel to the DIP Agent; (v) counsel
to the Prepetition Agent; (vi) the Internal Revenue Service; (vii) the
Prepetition Lenders; and (x) any other parties requesting such notice
(collectively, the “Notice

     

     

     

    


    
      
        
           


        

        
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Parties”). Requisite
notice of the Motion and the relief requested thereby and this Interim Order has
been provided in accordance with Bankruptcy Rule 4001, and no other notice need
be provided for entry of this Interim Order.

    L.            Good Cause Shown; Best
Interest. The Debtors have requested immediate entry of
this Interim Order pursuant to Bankruptcy Rules 4001(b)(2) and 4001(c)(2).
Absent entry of this Interim Order, the Debtors’ businesses, properties and
estates will be immediately and irreparably harmed. This Court concludes that
good cause has been shown and that entry of this Interim Order is in the best
interest of the Debtors’ respective estates and creditors as its implementation
will, among other things, allow for the continued operation of the Debtors’
existing businesses and enhance the Debtors’ prospects for successful
reorganization.

    M.            No Liability to Third
Parties. The Debtors stipulate and the Court finds that in making
decisions to advance loans to the Debtors, in administering any loans, in
permitting the Debtors to use Cash Collateral, in accepting the Interim Approved
Budget or any future Supplemental Approved Budget or in taking any other actions
permitted by this Interim Order or the DIP Documents, none of the DIP Agent nor
DIP Lenders shall be deemed to be in control of the operations of the Debtors or
to be acting as a “responsible person” or “owner or operator” with respect to
the operation or management of the Debtors.

    Based on
the foregoing, and upon the record made before this Court at the Interim
Hearing, and good and sufficient cause appearing therefore,

    IT IS HEREBY ORDERED, ADJUDGED AND
DECREED THAT:

    1.           
Approval of Interim
Order. The Motion is approved on the terms and conditions
set forth in this Interim Order. Any objections that have not previously
been

     

     

    


    
      
        
           


        

        
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    withdrawn
are hereby overruled. This Interim Order shall become effective immediately upon
its entry.

    2.            Approval of DIP Documents;
Authority Thereunder. The Debtors are hereby
authorized to enter into the DIP Documents, including the DIP Agreement, and
such additional documents, instruments and agreements as may be required or
requested by the DIP Agent and the DIP Lenders to implement the terms or
effectuate the purposes of this Interim Order. The terms and conditions of the
DIP Documents are hereby approved and (i) the Borrowers are authorized to comply
with and perform all of the terms and conditions contained therein, and (ii)
each Borrower is directed to repay amounts borrowed, together with interest and
premiums (as applicable) thereon and any other outstanding DIP Obligations to
the DIP Lenders in accordance with and subject to the terms and conditions set
forth in the DIP Documents and this Interim Order.

    3.            Authorization
to Borrow/Use of Cash Collateral. Upon finalizing and executing
the DIP Agreement and the other DIP Documents, the Debtors are immediately
authorized (a) to borrow from the DIP Lenders under the DIP Facility up to an
aggregate principal amount not to exceed $20 million (with up to $10 million
available upon the entry of this Interim Order) under the DIP Revolving Loans
and (b) to effectuate a 1.50:1.00 dollar conversion (calculated on the basis of
a one and one-half dollars of DIP Roll-Up Loans for each dollar of DIP Revolving
Loans provided by the DIP Lenders) in respect of the outstanding term loans
under the Prepetition Credit Facility beneficially owned by the applicable DIP
Lender (or an affiliate) at 5 p.m. (prevailing Eastern time) on May 15, 2009, in
an aggregate principal amount not to exceed $30 million (of which up to $15
million shall convert concurrently with the funding of the DIP Revolving Interim
Commitment upon entry of this Interim Order), each

     

    


    
      
        
           


        

        
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    subject
to the terms and conditions of the DIP Documents, provided, however,
that if any DIP Agent and/or DIP Lender in its sole discretion advances funds in
excess of these limitations or any other limitations or restrictions set forth
herein, such advances shall constitute DIP Obligations and shall be entitled to
the benefits of the DIP Documents and this Interim Order. The Debtors are
authorized to use the proceeds of the DIP Revolving Loans and the Cash
Collateral in the operation of the Debtors’ businesses, provided, that any
proposed DIP Revolving Loan or use of Cash Collateral is consistent with the
terms of the DIP Documents, the Approved Budget and this Interim
Order.

    4.            Payment of Adequate
Protection. Upon finalizing and executing the DIP Agreement
and the other DIP Documents, the Debtors are authorized to use the proceeds of
the DIP Revolving Loans, in part, to make certain limited adequate protection
payments to the Prepetition Lenders in accordance with the terms and conditions
of the DIP Agreement, the Approved Budget and this Interim Order (including
Paragraph 12 of this Interim Order).

    5.            Interest on DIP
Loans. The rate of interest to be charged for the DIP Revolving Loans,
the DIP Roll-Up Loans and other extensions of credit to the Debtors pursuant to
the DIP Agreement shall be the rates set forth in the DIP Agreement and shall be
payable at the times set forth in the DIP Agreement.

    6.           
Payment of DIP
Fees and Expenses. Subject to and in accordance with the
Approved
Budget, the Debtors are hereby authorized and directed to pay upon demand all
reasonable fees, costs, expenses and other amounts payable under the terms of
the DIP Documents and all other reasonable, out-of-pocket costs and expenses of
the DIP Agent, the DIP Lenders, the Prepetition Agent and the Prepetition
Lenders in accordance with the terms of the DIP Documents (including, without
limitation, the reasonable, out-of-pocket prepetition and

     

    
 

    
      
        
           


        

        
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    postpetition
fees, costs and expenses of legal counsel, financial advisors and third-party
appraisers, advisors and consultants advising the DIP Agent, the DIP Lenders,
the Prepetition Agent or the Prepetition Lenders); provided, however,
the Debtors shall only be required to pay to the Prepetition Agent and the
Prepetition Lenders such amounts that have accrued and are outstanding on or
prior to the Petition Date, except as otherwise permitted in Paragraph 12(i).
None of such fees, costs and expenses shall be subject to Court approval or U.S.
Trustee guidelines, and no recipient of any such payment shall be required to
file with respect thereto any interim or final fee application with this Court.
In addition, the Debtors are hereby authorized and directed to indemnify the DIP
Agent and DIP Lenders (and each of their respective directors, officers,
employees, agents, representatives, attorneys, consultants, advisors and
controlling persons) against any liability arising in connection with the DIP
Documents, to the extent set forth in the DIP Documents. All such unpaid fees,
costs and expenses and indemnities of the DIP Agent and DIP Lenders shall be
secured by the DIP Collateral and afforded all of the priorities and protections
afforded to the DIP Obligations under this Interim Order and the DIP
Documents.

    7.           
Validity of DIP
Documents. Upon execution and delivery of the DIP Documents,
the DIP Documents shall constitute, and are hereby deemed to be the legal, valid
and binding obligations of the Debtors party thereto, enforceable against each
such Debtor in accordance with the terms of the DIP Documents. Any DIP Revolving
Loans advanced under the DIP Agreement until the Final Hearing will be made only
to fund the Debtors’ working capital and general corporate needs, in each case
in the ordinary course of business to the extent permitted under the DIP
Agreement, and to pay such other amounts as are required or permitted to be paid
pursuant to the DIP Agreement, this Interim Order and any other orders of this
Court,

     

     

    
      
        
           


        

        
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    all
subject to and in accordance with the Approved Budget. No obligation, payment,
transfer or grant of security under the DIP Documents or this Interim Order
shall be stayed, restrained, voided, voidable or recoverable under the
Bankruptcy Code or under any applicable non- bankruptcy law, or subject to any
defense, reduction, setoff, recoupment or counterclaim.

    8.            Perfection in Debtors’
Cash. From the Petition Date until the DIP Obligations have been paid in
full in cash, all cash receipts, Cash Collateral and all proceeds from the sale
or other disposition of the DIP Collateral or Prepetition Collateral and all
other proceeds of such collateral of any kind which is now or shall come into
the possession or control of any of the Debtors, or to which any of the Debtors
is now or shall become entitled, shall be promptly deposited only into accounts
upon which the Prepetition Agent has perfected Prepetition Liens and such
collections and proceeds shall remain subject to all of the security interests
and liens of the DIP Agent and DIP Lenders (subject to any further orders of the
Court) and shall be treated in accordance with this Interim Order. Subject to
the Carve-Out and other provisions of this Interim Order, all financial
institutions in which the Debtors’ accounts are located are authorized and
directed to comply with any request of the DIP Agent to turn over to the DIP
Agent all funds therein without offset or deduction of any kind to the extent
necessary to pay the outstanding indebtedness in full under the DIP Facility,
and the Debtors are authorized and directed to enter into such blocked account
agreements with cash dominion with the DIP Agent and such financial institutions
as the DIP Agent may require.

    9.            DIP Superpriority
Claims. In accordance with Bankruptcy Code sections 364(c)(1)
and 364(d), the DIP Obligations shall constitute superpriority administrative
expense claims (the “DIP Superpriority
Claims”) against each of the Debtors with priority in payment over any
and all administrative expenses, adequate protection claims, diminution claims
and all

     

    


    
      
        
           


        

        
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    other
claims of against the Debtors, now existing or hereafter arising, of any kind
whatsoever, including, without limitation, all administrative expenses of the
kind specified in sections 503(b) and 507(b) of the Bankruptcy Code, and over
any and all administrative expenses or other claims of the kinds specified or
ordered pursuant to any provision of the Bankruptcy Code, including, but not
limited to, Bankruptcy Code sections 105, 326, 328, 330, 331, 503(b), 506(c),
507(a), 507(b), 546, 726, 1113 and 1114 or otherwise, including those resulting
from the conversion of any of the Chapter 11 Cases pursuant to section 1112 of
the Bankruptcy Code, whether or not such expenses or claims may become secured
by a judgment lien or other non-consensual lien, levy or attachment; provided, however,
that the DIP Superpriority Claims shall be subject to the Carve-Out (as defined
below).

    10.          
DIP Liens. As
security for the DIP Obligations, the DIP Agent and the DIP
Lenders are hereby granted (effective upon the date of this Interim Order,
without the necessity of the execution by the Debtors or the filing or
recordation of mortgages, security agreements, lock box or control agreements,
financing statements, or any other instruments or otherwise) valid, binding and
fully perfected, security interests in, and liens upon (the “DIP Liens”), all present
and after-acquired property of the Debtors of any nature whatsoever, including,
without limitation, all cash and cash equivalents contained in any account
maintained by any of the Debtors, and all Avoidance Actions (as defined below)
of the Debtors or their estates (collectively with all proceeds and products of
any or all of the foregoing, the “DIP Collateral”), subject
only to the payment of the Carve-Out, which shall consist of:

    (a)         
 First Lien on
Cash Balances and Unencumbered Property.  Pursuant
to section 364(c)(2) of the Bankruptcy Code, a continuing, enforceable, first
priority,
fully-perfected lien and security interest upon all of the Debtors’ right, title
and

     

    
 

    
      
        
           


        

        
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    interest
in, to and under all DIP Collateral that is not otherwise encumbered by a
validly perfected security interest or lien on the Petition Date as permitted by
the Prepetition Credit Agreement (collectively, the “Unencumbered Property”).
Subject only to and effective upon entry of the Final Order, Unencumbered
Property shall also include the Debtors’ claims and causes of action under
sections 502(d), 544, 545, 547, 548, 549, 550, and 553 of the Bankruptcy Code
and any other avoidance actions under the Bankruptcy Code and the proceeds
thereof and property received thereby whether by judgment, settlement or
otherwise, whether pursuant to federal law or applicable state law
(collectively, “Avoidance Actions”).

    (b)           Liens
Junior to Certain Other Liens. Pursuant to section 364(c)(3)
of the
Bankruptcy Code, a junior, perfected lien and security interest (other than as
set forth in clause (c) below) upon all of the Debtors’ right, title and
interest in, to and under all DIP Collateral which is subject to (A) any validly
perfected security interest or lien in existence as of the Petition Date that is
not subject to section 552(a) of the Bankruptcy Code, or (B) any valid security
interest or lien perfected (but not granted) after the Petition Date (to the
extent such perfection in respect of a pre-Petition Date claim is expressly
permitted under the Bankruptcy Code) that is not subject to section 552(a) of
the Bankruptcy Code.

    (c)           Liens
Priming Prepetition Secured Entities’ Liens. Pursuant to
section
364(d)(1) of the Bankruptcy Code, a first priority, senior, priming, perfected
lien and security interest upon all of the Debtors’ right, title and interest
in, to and under the DIP Collateral, subject only to a valid perfected lien that
is a “Permitted Lien” (as defined in the DIP Agreement) and expressly permitted
in the DIP Agreement to be senior to the

     

    
      
        
          
          

        

        
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        DIP Liens
granted to the DIP Agent and the DIP Lenders in this Interim Order to secure the
DIP Obligations. Such security interest shall be senior to and prime the
Prepetition Liens and the Adequate Protection Liens (as defined below), but
shall be junior to any valid, perfected, enforceable and unavoidable security
interests and liens of other parties, if any, on such property existing
immediately prior to the Petition Date otherwise permitted by the Prepetition
Credit Agreement.

        (d)         
Liens
Senior to Certain Other Liens. The DIP Liens and the Adequate
Protection Liens shall not be subject or subordinate to (i) any lien or security
interest that is avoided and preserved for the benefit of the Debtors and their
estates under section 551 of the Bankruptcy Code, (ii) any liens arising after
the Petition Date including, without limitation, any liens or security interests
granted in favor of any federal, state, municipal or other governmental unit,
commission, board or court for any liability of the Debtors, or (iii) any
intercompany or affiliate liens of the Debtors.

        11.            Priority
of DIP Liens. Notwithstanding anything to the contrary herein, the DIP
Liens granted hereunder to the DIP Lenders under the DIP Roll-Up Loans shall be
pari
passu
to the DIP Liens granted hereunder to the DIP Lenders under the DIP Revolving
Loans in respect of the DIP Collateral.

        12.            Prepetition
Credit Facility Adequate Protection. As adequate protection for the
interests of the Prepetition Agent and the Prepetition Lenders on account of the
Prepetition Liens as a result of (a) the provisions of this Interim Order
granting first priority and/or priming liens on such Prepetition Collateral to
the DIP Agent and DIP Lenders; (b) authorizing the use of Cash Collateral; (c)
the imposition of the automatic stay pursuant to section 362 of the Bankruptcy
Code; or (d) otherwise, pursuant to sections 361(a), 363(c) and

         

        
 

        
          
            
               


            

            
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        364(d)(1)
of the Bankruptcy Code, the Prepetition Agent and Prepetition Lenders are hereby
granted, solely to the extent of the diminution in value of the Prepetition
Liens in the Prepetition Collateral from and after the Petition Date, the
following (collectively, the “Adequate
Protection Obligations”):

        (i)            Fees
and Expenses. Subject to and in accordance with the Approved
Budget, the Prepetition Agent, on behalf of the Prepetition Lenders, is hereby
granted payments in cash from the Debtors on a current basis of all fees, costs
and expenses of payable to the Prepetition Agent under the Prepetition Credit
Agreement as in effect on the Petition Date, including but not limited to, the
reasonable fees and disbursements of counsel, financial and other third party
advisors, appraisers and consultants for the Prepetition Agent promptly upon
receipt of invoices therefor (subject in all respects to applicable privilege or
work product doctrines) and without the necessity of filing motions or fee
applications, including such amounts arising (A) before the Petition Date and
(B) after the Petition Date to the extent such amounts arise in connection with
the enforcement of the protections granted to the Prepetition Lenders pursuant
to this Order; provided,
however, if and to the extent that any payment(s) is challenged by a
party in interest under section 506(b) of the Bankruptcy Code and ultimately not
allowed under such provision, such payment(s) may be recharacterized as a
payment of principal on the Prepetition Obligations.;

        (ii)           Adequate
Protection Liens. The Prepetition Agent, on behalf of the
Prepetition Lenders, is hereby granted valid, enforceable, unavoidable and fully
perfected replacement liens and security interests, subject to the Carve-Out, in
the collateral of the same nature and type as the Prepetition Collateral, on the
same basis and

         

         

        


        
          
            
               


            

            
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        in the
same relative priority as the Prepetition Liens, which, with respect to the
Prepetition Collateral and the DIP Collateral, shall be junior in all respects
to the DIP Liens (the “Adequate
Protection Liens”). The Adequate Protection Liens shall be deemed to be
legal, valid, binding, enforceable, perfected liens, not subject to
subordination or avoidance, for all purposes in the Chapter 11 Cases. Except as
otherwise set forth in this Paragraph 12 or otherwise in this Interim Order, the
Adequate Protection Liens shall not be subordinated or be made pari
passu with any other lien under section 364(d) of the Bankruptcy Code or
otherwise. The Adequate Protection Liens shall be deemed to be perfected
automatically upon the entry of this Interim Order, without the necessity of
filing of any UCC-1 financing statement, state or federal notice, mortgage or
other similar instrument or document in any state or public record or office and
without the necessity of taking possession or control of any DIP
Collateral.

        (iii)        
503
and 507 Claims. The Prepetition Agent, on behalf of the Prepetition
Lenders, is hereby granted, subject to the payment of the Carve-Out,
superpriority administrative expense claims (the “Prepetition
Superpriority Claims”) under sections 503 and 507 of the Bankruptcy Code
against the Debtors’ estates to the extent that the Adequate Protection Liens do
not adequately protect against the diminution in value of the Prepetition Liens,
which Prepetition Superpriority Claims, if any, shall have priority in payment
over any and all administrative expenses of the kinds specified or ordered
pursuant to any provision of the Bankruptcy Code, including, but not limited to,
Bankruptcy Code sections 105, 326, 328, 330, 331, 503(b), 506(c), 507(a),
507(b), 726, 1113 and 1114, or otherwise and including those resulting from the
conversion of any of the Chapter 11 Cases pursuant to section 1112 of the
Bankruptcy

         

         

        


        
          
            
               


            

            
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        Code;
provided that
at all times while such claim is in full force and effect pursuant to this
Interim Order, the Prepetition Superpriority Claims shall be junior in all
respects to the DIP Superpriority Claims;

        (iv)          Monitoring of
Collateral. The Prepetition Agent shall be permitted to retain expert
consultants and financial advisors at the expense of the Debtors, which
consultants and advisors shall be given reasonable access for purposes of
monitoring the business of the Debtors and the value of the DIP Collateral;
and

        (v)           Financial Reporting.
The Debtors shall provide the Prepetition Agent
with financial and other reporting as described in the Prepetition Credit
Agreement; provided, however,
that this Interim Order is without prejudice to, and does not constitute a
waiver of, expressly or implicitly, the rights of the Prepetition Agent or the
Prepetition Lenders to seek additional forms of adequate protection at any
time.

        13.         
No Waiver of Prepetition Credit
Agreement Provisions; Reservation of Rights. Except as otherwise
specifically provided in this Interim Order, nothing contained in this Interim
Order shall be deemed a waiver or constitute a consent to the modification of
any provision contained in the Prepetition Credit Agreement by the Prepetition
Agent or the Prepetition Lenders, including, but not limited to, the incurrence
or issuance of any indebtedness by the Debtors, the incurrence of any lien in
connection therewith or the making of any payment by the Debtors. Under the
circumstances and given that the above-described adequate protection is
consistent with the Bankruptcy Code, including section 506(b) thereof, the Court
finds that the adequate protection provided herein is reasonable and sufficient
to protect the interests of the Prepetition Agent and Prepetition
Lenders.

         

         

        


        
          
            
               


            

            
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        14.         
Carve-Out. Upon
the occurrence of the earlier of (the “Carve-Out Event”) (i) an
Event of Default (as such term is defined in the DIP Agreement) and continuance
thereof and (ii) the Maturity Date (as defined in the Credit Agreement), to the
extent unencumbered funds are not available to pay administrative expenses in
full, the DIP Liens, DIP Superpriority Claims, Prepetition Superpriority Claims,
Adequate Protection Liens, and Prepetition Liens, shall be subject to the
payment of (x) the aggregate amount of any budgeted and unpaid fees, costs and
expenses that were accrued or incurred prior to the Carve-Out Event by the
professionals retained by the Debtors or any professionals retained by any
official unsecured creditors’ committee (the “Committee”)
(collectively, the “Professionals”)
to the extent allowed by an order of this Court, plus (y) those fees, costs and
expenses incurred by Professionals after the Carve-Out Event and subsequently
allowed by order of this Court and in compliance with the DIP Budget in an
amount not to exceed $250,000 in the aggregate, plus (z) fees required to be
paid to the Clerk of the Court and to the U.S. Trustee pursuant to 28 U.S.C. §
1930 (collectively, the “Carve-Out”);
providedfurther that following a
Carve-Out Event any amounts paid to Professionals by any means will reduce the
Carve-Out on a dollar-for-dollar basis; and provided, further,
that no portion of the Carve-Out, DIP Facility, DIP Collateral, Prepetition
Collateral or Cash Collateral shall include, apply to, or be available for any
fees, costs or expenses incurred by any party, including the Debtors or the
Committee, in connection with (i) the initiation or prosecution of any claims,
causes of action, adversary proceedings, or other litigation against any of the
Secured Lending Entities, including, without limitation, (a) challenging the
amount, validity, extent, perfection, priority, or enforceability of, or
asserting any defense, counterclaim, or offset to the DIP Obligations, DIP
Superpriority Claims or security interests and liens of the DIP Agent or DIP
Lenders in respect thereof, (b) challenging the amount, validity,
extent,

         

        


        
          
            
               


            

            
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        perfection,
priority, or enforceability of, or asserting any defense, counterclaim, or
offset to the Prepetition Obligations, Prepetition Superpriority Claims or
security interests and liens of the Prepetition Agent or Prepetition Lenders in
respect thereof or (ii) asserting any claims or causes of action, including,
without limitation, claims or actions to hinder or delay the DIP Agent’s or DIP
Lenders’ assertion, enforcement or realization on the DIP Collateral in
accordance with the DIP Facility Documents or this Interim Order; provided, further,
however, that no more than $15,000 of the proceeds of the DIP Facility or
any proceeds of the DIP Collateral may be used to fund a reasonable
investigation by the Committee into the existence of any causes of action or
other type of litigation against the Prepetition Secured Entities with respect
to the Prepetition Obligations. Notwithstanding the foregoing, so long as a
Carve-Out Event has not occurred: (i) the Debtors shall be permitted to pay,
subject to and in accordance with the Approved Budget, administrative expenses
allowed and payable under sections 330 and 331 of the Bankruptcy Code, as the
same may become due and payable; and (ii) such payments shall not be applied to
reduce the Carve-Out (to the extent such payments are ultimately permitted by
the Court). Nothing contained herein is intended to constitute, nor should be
construed as consent to, the allowance of any Professional’s fees, costs or
expenses by any party and shall not affect the right of the Debtors, DIP Agent,
DIP Lenders, Prepetition Agent, Prepetition Lenders, Committee, U.S. Trustee, or
any other party-in-interest to object to the allowance and payment or any
amounts incurred or requested.

        15.  
Investigation Rights. The Committee
shall have a maximum of sixty (60) days from
the date of its appointment, but in no event later than seventy-five (75) days
from the Petition Date, and in the event no Committee is appointed, all
non-debtor parties-in-interest (including a trustee, if appointed or elected
prior to the Investigation Termination Date, as

         

        
        

        
 

        
          
            
               


            

            
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        defined
herein) shall have seventy-five (75) days from the Petition Date (the “Investigation  Termination
Date”) to investigate the validity, perfection and enforceability of the
Prepetition Liens and the Prepetition Obligations, or to assert any other claims
or causes of action against the Prepetition Secured Entities. If any Committee,
or any non-debtor party-in-interest hereafter vested with authority by this
Court, determines that there may be a challenge to the Prepetition Secured
Entities by the Investigation Termination Date, then upon three (3) days’
written notice to the Debtors and the Prepetition Secured Entities, such
Committee or other non-debtor party­in-interest hereafter vested with
authority by this Court shall be permitted to file and prosecute an objection or
claim related thereto (each, a “Challenge”),
and shall have only until the Investigation Termination Date to file such
objection or otherwise initiate an appropriate action on behalf of the Debtors’
estates setting forth the basis of any such challenge, claim or cause of action.
If a Challenge is not filed on or before the Investigation Termination Date: (a)
the agreements, acknowledgements and stipulations contained in Paragraph C of
this Interim Order, shall be irrevocably binding on the Debtors, the Committee
and all parties-in-interest and any and all successors-in-interest as to any of
the foregoing, without further action by any party or this Court, and any
Committee and any other party-in-interest and any and all
successors-in­interest as to any of the foregoing, shall thereafter be
forever barred from bringing any Challenge; (b) the liens and security interests
of the Prepetition Agent and Prepetition Lenders shall be deemed to constitute
valid, binding, enforceable and perfected liens and security interests not
subject to avoidance or disallowance pursuant to the Bankruptcy Code or
applicable non-bankruptcy law; (c) the Prepetition Indebtedness shall be deemed
to be finally allowed claims for all purposes in the Chapter 11 Cases and any
subsequent chapter 7 cases, in the amounts set forth in Paragraph C and shall
not be subject to challenge by any party-in-interest as

         

         

        


        
          
            
               


            

            
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        to
validity, priority or otherwise; and (d) the Debtors shall be deemed to have
released, waived and discharged the Prepetition Secured Entities (whether in
their prepetition or postpetition capacity), together with their respective
officers, directors, employees, agents, attorneys, professionals, affiliates,
subsidiaries, assigns and/or successors, from any and all claims and causes of
action arising out of, based upon or related to, in whole or in part, the
Prepetition Obligations. The Prepetition Agent shall cooperate in all reasonable
requests for information in order to assist the Committee in its investigation
under this Paragraph 15. Notwithstanding anything to the contrary herein: (a) if
any such Challenge is timely commenced, the stipulations contained in Paragraph
C of this Interim Order shall nonetheless remain binding on all
parties-in­interest and preclusive except to the extent that such
stipulations are expressly and successfully challenged in such Challenge; and
(b) the Prepetition Secured Entities reserve all of their rights to contest on
any grounds any Challenge.

        16.         
Protection of DIP
Lenders’ Rights. So long as there are any DIP Revolving
Loans, DIP Roll-Up Loans or other amounts outstanding, the DIP Lenders have any
Commitment (as defined in the DIP Agreement) under the DIP Agreement or any
other DIP Obligations are outstanding, the Prepetition Secured Entities (i)
shall not take any action to foreclose upon or recover in connection with their
respective liens and security interests, other agreements, or operation of law
of this Interim Order, or otherwise exercise remedies against any DIP
Collateral, except to the extent authorized by an order of this Court, (ii)
shall be deemed to have consented to any release of DIP Collateral authorized
under the DIP Facility Documents, (iii) shall not file any further financing
statements, trademark filings, copyright filings, patent filings, mortgages,
notices of lien or similar instruments, enter into any control agreement, or
otherwise take any action to perfect their security interests in the DIP
Collateral unless, solely as

         

        


        
          
            
               


            

            
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        to this
clause (iii), the DIP Agent files financing statements or other documents to
perfect the liens granted pursuant to this Interim Order, or as may be required
by applicable state law to continue the perfection of valid and unavoidable
liens or security interests as of the Petition Date and (iv) not seek to
terminate or modify the use of Cash Collateral.

        17.           Asset
Dispositions. The Debtors shall immediately pay, or cause to be
paid to,
the DIP Agent for application to the DIP Obligations, to the extent required by
and in the order set forth in the DIP Agreement, all of the proceeds of any
sale, lease or other disposition of any DIP Collateral outside of the ordinary
course of business (an “Asset
Disposition”) and shall comply with all other provisions in the DIP
Facility Documents and this Interim Order in connection with any such Asset
Disposition. Except to the extent otherwise expressly provided in the DIP
Facility Documents, the Debtors shall not sell or otherwise dispose of any DIP
Collateral outside the ordinary course of business without the prior written
consent of the DIP Agent and the number and/or percentage of DIP Lenders
required pursuant to the DIP Agreement and order of the Court after notice and a
hearing. The rights of the DIP Agent, the DIP Lenders, the Prepetition Agent and
the Prepetition Lenders to credit bid all or any portion of their Indebtedness
in connection with any proposed Asset Disposition of DIP Collateral (other than
the sale of the Debtors’ inventory in the ordinary course of Debtors’ business)
shall be preserved through the closing of such sale. All proceeds of any Asset
Disposition shall be applied in accordance with the terms and conditions of the
DIP Agreement.

        18.           Further
Assurances. The Debtors shall execute and deliver to the DIP
Agent,
DIP Lenders, Prepetition Agent and the Prepetition Lenders all such agreements,
financing statements, instruments and other documents as the DIP Agent, DIP
Lenders Prepetition Agent or the Prepetition Lenders may reasonably request to
evidence, confirm,

         

         

         

        
          
            
               


            

            
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        validate
or perfect the DIP Liens or the Adequate Protection Liens granted pursuant
hereto. Further, the Debtors are authorized and directed to do and perform all
acts, to make, execute and deliver all instruments and documents (including,
without limitation, the execution of additional security agreements, pledge
agreements, control agreements, mortgages and financing statements), and shall
pay fees and expenses that may be required or necessary for the Debtors’
performance under the DIP Facility Documents, including, without limitation, (i)
the execution of the DIP Facility Documents and (ii) the payment of the fees,
costs and other expenses described in the DIP Facility Documents as such become
due. None of the reasonable attorneys’, financial advisers’ and accountants’
fees and disbursements incurred by the DIP Agent or DIP Lenders and reimbursable
by the Debtors shall be subject to the approval of this Court or the U.S.
Trustee guidelines, and no recipient of any such payment shall be required to
file with respect thereto any interim or final fee application with this Court.
Notwithstanding the foregoing, the Debtors shall, promptly after payment of
invoices for any such fees and disbursements, provide copies of same to counsel
for the Prepetition Agent. In addition, the Debtors are hereby authorized and
directed to indemnify the DIP Agent and DIP Lenders against any liability
arising in connection with the DIP Facility Documents to the extent provided in
the DIP Facility Documents. All such fees, expenses and indemnities of the DIP
Agent and DIP Lenders shall constitute DIP Obligations and shall be secured by
the DIP Liens and afforded all of the priorities and protections afforded to the
DIP Obligations under this Interim Order and the other DIP Facility
Documents.

        19.          
506(c)
Waiver. Upon the entry of the Final Order, the Debtors shall irrevocably
waive and shall be prohibited from asserting any surcharge claim, under section
506(c) of the Bankruptcy Code or otherwise, for any costs and expenses incurred
in connection

         

        


        
          
            
               


            

            
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        with the
preservation, protection or enhancement of, or realization by the Secured
Lending Entities upon the DIP Collateral or the Prepetition Collateral (as
applicable). In no event shall the Secured Lending Entities be subject to the
equitable doctrine of “marshaling” or any other similar doctrine with respect to
the DIP Collateral or the Prepetition Collateral (as applicable).

        20.           Restrictions on Granting
Post-Petition Liens. Other than the Carve-Out, or as otherwise provided
in this Interim Order, no claim having a priority superior or pari passu
with those granted by this Interim Order to the Secured Lending Entities shall
be granted or permitted by any order of this Court heretofore or hereafter
entered in the Chapter 11 Cases, while (i) any portion of the DIP Facility (or
refinancing thereof), any DIP Revolving Loan, any DIP Roll-Up Loan or any other
DIP Facility Obligations are outstanding or (ii) the DIP Lenders have any
Commitment (as defined in the DIP Agreement) under the DIP Agreement. Except as
expressly permitted by the DIP Facility Documents, the Debtors will not, at any
time during the Chapter 11 Cases, grant mortgages, security interests or liens
in the DIP Collateral (or any portion thereof) to any other parties pursuant to
section 364(d) of the Bankruptcy Code or otherwise.

        21.           Return of
Inventory. The Debtors shall not, without the consent of the
DIP
Agent, DIP Lenders, Prepetition Agent and Prepetition Lenders: (i) enter into
any agreement to return any inventory to any of their creditors for application
against any prepetition indebtedness under section 546(h) of the Bankruptcy
Code; or (ii) consent to any creditor taking any set-off against any of its
prepetition indebtedness based upon any such return pursuant to section
553(b)(1) of the Bankruptcy Code or otherwise.

        22.         
 Automatic Effectiveness of Liens.
The DIP Liens and Adequate Protection
Liens shall not be subject to challenge and shall attach and become valid,
perfected,

         

        
 

        
          
            
               


            

            
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        enforceable,
non-avoidable and effective by operation of law as of the Petition Date without
any further action by the Debtors, the Secured Lending Entities and without the
necessity of execution by the Debtors, or the filing or recordation, of any
financing statements, security agreements, vehicle lien applications, mortgages,
filings with the U.S. Patent and Trademark Office or the Library of Congress, or
other documents or the taking of any other actions. All DIP Collateral shall be
free and clear of other liens, claims and encumbrances, except as provided in
the DIP Facility Documents and this Interim Order. If the DIP Agent or the
Prepetition Agent hereafter requests that the Debtors execute and deliver to the
DIP Agent or the Prepetition Agent financing statements, security agreements,
collateral assignments, mortgages, or other instruments and documents considered
by such agent to be reasonably necessary or desirable to further evidence the
perfection of the DIP Liens or the Adequate Protection Liens, as applicable, the
Debtors are hereby authorized and directed to execute and deliver such financing
statements, security agreements, mortgages, collateral assignments, instruments,
and documents, and the DIP Agent or the Prepetition Agent is hereby authorized
to file or record such documents in its discretion without seeking modification
of the automatic stay under section 362 of the Bankruptcy Code, in which event
all such documents shall be deemed to have been filed or recorded at the time
and on the date of entry of this Interim Order.

        23.         
Automatic Stay. As provided herein,
subject only to the provisions of the DIP
Agreement and without further order from this Court, the automatic stay
provisions of section 362 of the Bankruptcy Code are vacated and modified to the
extent necessary to permit the DIP Agent and DIP Lenders to exercise, upon the
occurrence and during the continuance of any Event of Default, all rights and
remedies provided for in the DIP Facility Documents, and to take any or all of
the following actions, so long as the DIP Agent has provided three (3)
business

         

         

        
          
            
               


            

            
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        days
prior written notice to the Debtors, their bankruptcy counsel, counsel to the
Committee, counsel to the respective Secured Lender Entities and the U.S.
Trustee as provided for in Section 11.12 of the DIP Agreement: (a) immediately
terminate the Debtors’ use of Cash Collateral and cease making any advances
under the DIP Revolving Loans to the Debtors; (b) declare all DIP Obligations to
be immediately due and payable; (c) charge the default rate of interest provided
for under the DIP Agreement; (d) freeze monies or balances in the Debtors’
accounts; (e) immediately set off any and all amounts in accounts maintained by
the Debtors with the DIP Agent or any of the DIP Lenders against the DIP
Obligations, or otherwise enforce rights against the DIP Collateral in the
possession of any of the DIP Lenders for application towards the DIP
Obligations; and (f) take any other actions or exercise any other rights or
remedies permitted under this Interim Order, the DIP Facility Documents or
applicable law to effect the repayment of the DIP Obligations. Following the
giving of written notice by the DIP Agents of the occurrence of an Event of
Default, the Debtors and any Committee in the Cases shall be entitled to an
emergency hearing before this court solely for the purpose of contesting whether
an Event of Default has occurred. Upon entry of this Interim Order, no
party-in-interest shall have the right to contest the enforcement of the
remedies set forth in this Interim Order and the DIP Facility Documents on any
basis other than an assertion that no Event of Default has occurred, and, except
with respect to such an assertion, no party-in-interest shall have the right to
enjoin any such enforcement under section 105 of the Bankruptcy Code or
otherwise, or to seek any injunctive relief inconsistent with the provisions of
this Interim Order or the DIP Facility Documents. The rights and remedies of the
DIP Agent and DIP Lenders specified herein are cumulative and not exclusive of
any rights or remedies that the DIP Agent and DIP Lenders may have under the DIP
Facility Documents or otherwise. The Debtors shall cooperate fully with
the

         

         

        
          
            
               


            

            
              2.01 -
31

              
                

              

            

            
               


            

          

        

        


        DIP Agent
and DIP Lenders in their exercise of rights and remedies, whether against the
DIP Collateral or otherwise. This Court shall retain exclusive jurisdiction to
hear and resolve any disputes and enter any orders required by the provisions of
this paragraph and relating to the application, re-imposition or continuance of
the automatic stay as provided hereunder.

        24.            Limitations in Respect of
the DIP Roll-Up Loans. The DIP Roll-Up Loans may not be required to be
repaid in cash on the Maturity Date (as defined in the DIP Agreement), provided
that the Debtors shall use reasonable endeavors to procure the same. Any
repayment of a DIP Revolving Loan will not reduce the amount of the outstanding
DIP Roll-Up Loans. Upon the vote of the DIP Roll-Up Loan class to accept a
chapter 11 plan in accordance with section 1126 of the Bankruptcy Code or,
failing to obtain same, pursuant to section 1 129(b) of the Bankruptcy Code, the
Debtors’ chapter 11 plan of reorganization may require that the DIP Roll-Up
Loans be refinanced or otherwise replaced with other securities or financial
instruments with a present value equal to the accrued principal and interest due
in respect of the DIP Roll-Up Loans as of the effective date of the plan; provided that the
relative lien position of the DIP Lenders under the DIP Revolving Loans in
respect of the DIP Roll-Up Loans is maintained; and provided further, the
relative position of the DIP Lenders under the DIP Roll-Up Loans in respect of
the Prepetition Obligations is maintained. Upon conversion of the DIP Roll-Up
Loans in connection with the funding of the Revolving Loans, the DIP Roll-Up
Loans shall cease to be Prepetition Indebtedness and shall be deemed DIP
Obligations in all respects including for purposes of having the benefit of
Section 364(e) of the Bankruptcy Code.

        25.            Binding Effect. The
provisions of this Interim Order shall be binding upon and
inure to the benefit of the Secured Lending Entities, the Debtors, any Committee
appointed in these Cases, and their respective successors and assigns (including
any chapter 7 or

         

         

        


        
          
            
               


            

            
              2.01 -
32

              
                

              

            

            
               


            

          

        

        


        chapter
11 trustee hereinafter appointed or elected for the estate of the Debtors, an
examiner appointed pursuant to section 1104 of the Bankruptcy Code or any other
fiduciary appointed as a legal representative of any of the Debtors or with
respect to the property of the estate of any of the Debtors). To the extent
permitted by applicable law, this Interim Order shall bind any trustee hereafter
appointed for the estate of any of the Debtors, whether in these Chapter 11
Cases or in the event of the conversion of any of the Chapter 11 Cases to a
liquidation under chapter 7 of the Bankruptcy Code. Such binding effect is an
integral part of this Interim Order.

        26.          
 Survival. The provisions of this Interim Order and any
actions taken pursuant
hereto shall survive the entry of any order: (i) confirming any plan of
reorganization in any of the Chapter 11 Cases (and, to the extent not satisfied
in full in cash, the DIP Obligations shall not be discharged by the entry of any
such order, pursuant to section 1141(d)(4) of the Bankruptcy Code, each of the
Debtors having hereby waived such discharge); (ii) converting any of the Chapter
11 Cases to a chapter 7 case; or (iii) dismissing any of the Chapter 11 Cases,
and the terms and provisions of this Interim Order as well as the DIP
Superpriority Claims and the DIP Liens in the DIP Collateral granted pursuant to
this Interim Order and the DIP Facility Documents (and with respect to the entry
of any order as set forth in (ii) or (iii) herein, the Adequate Protection Liens
and Prepetition Superpriority Claims) shall continue in full force and effect
notwithstanding the entry of any such order. Such claims and liens shall
maintain their priority as provided by this Interim Order and the DIP Facility
Documents, and to the maximum extent permitted by law, until all of the DIP
Obligations are indefeasibly paid in full and discharged. In no event shall any
plan of reorganization be allowed to alter the terms of repayment of any of the
DIP Obligations from those set forth in the DIP Facility Documents.

         

        


        
          
            
               


            

            
              2.01 -
33

              
                

              

            

            
               


            

          

        

        


        27.            Modifications of DIP
Facility Documents. The Debtors, DIP Agent and DIP
Lenders are hereby authorized to implement, in accordance with the terms of the
DIP Facility Documents, any non-material modifications (including without
limitation, any change in the number or composition of the DIP Lenders) of the
DIP Facility Documents without further Order of this Court, or any other
modifications to the DIP Facility Documents; provided, however, that notice
of any material modification or amendment to the DIP Facility Documents shall be
provided to counsel to any Committee, to the U.S. Trustee, Prepetition Agent,
each of whom shall have three (3) days from the date of such notice within which
to object in writing to such modification or amendment. If any Committee or the
U.S. Trustee timely objects to any material modification or amendment to the DIP
Facility Documents, such modification or amendment shall only be permitted
pursuant to an order of this Court.

        28.            Insurance Policies.
Upon entry of this Interim Order, the DIP Agent and DIP
Lenders shall be, and shall be deemed to be, without any further action or
notice, named as additional insureds and loss payees, as applicable, on each
insurance policy maintained by the Debtors which in any way relates to the DIP
Collateral. The Debtors are authorized and directed to take any actions
necessary to have the DIP Agent, on behalf of the DIP Lenders, be added as an
additional insured and loss payee on each insurance policy.

        29.          
Restriction on Use of
DIP Lenders’ Funds. None of the Debtors shall be permitted
to use the proceeds of the DIP Revolving Loans: (a) for the payment of interest
and principal with respect to any indebtedness that is subordinated to the DIP
Facility except as expressly set forth herein, (b) to finance in any way any
adversary action, suit, arbitration, proceeding, application, motion, other
litigation, examination or investigation of any type relating to or in
connection with the DIP Facility Documents, including, without limitation,
any

         

        


        
          
            
               


            

            
              2.01 -
34

              
                

              

            

            
               


            

          

        

        


        challenges
to the Prepetition Obligations, or the validity, perfection, priority, or
enforceability of any Prepetition Lien securing such claims or any payment made
thereunder, (c) to finance in any way any action, suit, arbitration, proceeding,
application, motion, other litigation, examination or investigation of any type
adverse to the interests of the DIP Agents and the DIP Lenders or their rights
and remedies under the DIP Agreement, the other DIP Facility Documents, this
Interim Order or the Final Order without the prior written consent of the DIP
Agent, (d) to make any distribution under a plan of reorganization in any
Chapter 11 Case, and (e) to make any payment in settlement of any claim, action
or proceeding, before any court, arbitrator or other governmental body without
the prior written consent of the DIP Agent. Notwithstanding anything herein to
the contrary, for so long as the Debtors are authorized to use the Prepetition
Lenders’ Cash Collateral with the consent of the Prepetition Lenders, no Cash
Collateral of the Prepetition Lenders may be used directly or indirectly by any
of the Debtors, any Committee or any other person or entity to object to or
contest in any manner the Prepetition Obligations or Prepetition Liens, or to
assert or prosecute any actions, claims or causes of action against any of the
Prepetition Agents or Prepetition Lenders without the consent of the applicable
Prepetition Agents and Prepetition Lenders.

        30.          
Release of
Claims and Defenses. Each Debtor hereby releases and discharges
the DIP Agent, the DIP Lenders, the Prepetition Agent and the Prepetition
Lenders, together with their respective affiliates, agents, attorneys, officers,
directors and employees (collectively, the “Released
Parties”), from any and all claims and causes of action arising out of,
based upon or related to, in whole or in part, any of the Prepetition Facility
Documents or the DIP Facility Documents, any aspect of the prepetition
relationship between the Debtors, on the one hand, and any or all of the
Released Parties, on the other hand, relating to any of the

         

         

         

        
          
            
               


            

            
              2.01 -
35

              
                

              

            

            
               


            

          

        

        


        Prepetition
Facility Documents or the DIP Facility Documents or any transaction contemplated thereby or
any other acts or omissions by any or all of the Released Parties in connection
with any of the Prepetition Facility Documents or the DIP Facility Documents or
their pre-petition relationship with such Debtor or any Affiliate thereof
relating to any of the Prepetition Facility Documents or the Postpetition
Facility or any transaction contemplated thereby, including, without limitation,
any claims or defenses as to the extent, validity, priority, or enforceability
of the Prepetition Liens or the Prepetition Obligations, any claims or defenses
under chapter 5 of the Bankruptcy Code or any other causes of action
(collectively, the “Claims
and Defenses”).

        31.          
Protection Under
Section 364(e). If any or all of the provisions of this Interim Order are
hereafter reversed, modified, vacated or stayed, such reversal, modification,
vacation or stay shall not affect the (i) validity of any DIP Obligations, or
Adequate Protection Obligations owing to the Prepetition Secured Entities
incurred prior to the actual receipt by the DIP Agent or Prepetition Agent, as
applicable, of written notice of the effective date of such reversal,
modification, vacation or stay, or (ii) validity or enforceability of any claim,
lien, security interest or priority authorized or created hereby or pursuant to
the DIP Facility Documents with respect to any DIP Obligations, or Adequate
Protection Obligations owing to the Prepetition Secured Entities.
Notwithstanding any such reversal, modification, vacation or stay, any use of
Cash Collateral or the incurrence of DIP Obligations, or Adequate Protection
Obligations owing to the Prepetition Secured Entities by the Debtors prior to
the actual receipt by the DIP Agent or Prepetition Agent, as applicable, of
written notice of the effective date of such reversal, modification, vacation or
stay, shall be governed in all respects by the provisions of this Interim Order,
and the Secured Lending Entities shall be entitled to all of the rights,
remedies, protections and benefits granted under section 364(e) of the
Bankruptcy Code, this

         

        


        
          
            
               


            

            
              2.01 -
36

              
                

              

            

            
               


            

          

        

        


        Interim
Order, and the DIP Facility Documents with respect to all uses of Cash
Collateral and the incurrence of DIP Obligations, and Adequate Protection
Obligations owing to the Prepetition Secured Entities.

        32.          
Effect of
Dismissal of Chapter 11 Cases. If the Chapter 11 Cases are
dismissed,
converted or substantively consolidated, then neither the entry of this Interim
Order nor the dismissal, conversion or substantive consolidation of these
Chapter 11 Cases shall affect the rights of the Secured Lending Entities under
their respective DIP Facility Documents, Prepetition Facility Documents or this
Interim Order, and all of the respective rights and remedies thereunder of the
Secured Lending Entities shall remain in full force and effect as if the Chapter
11 Cases had not been dismissed, converted, or substantively consolidated. If an
order dismissing any of the Chapter 11 Cases is at any time entered, such order
shall provide (in accordance with Sections 105 and 349 of the Bankruptcy Code)
that: (i) the DIP Liens and DIP Superpriority Claims granted to and conferred
upon the DIP Agent and DIP Lenders and the protections afforded to the DIP Agent
and/or the DIP Lenders pursuant to this Interim Order and the DIP Facility
Documents shall continue in full force and effect and shall maintain their
priorities as provided in this Interim Order until all DIP Obligations shall
have been paid and satisfied in full (and that such DIP Liens, DIP Superpriority
Claims and other protections shall, notwithstanding such dismissal, remain
binding on all interested parties); (ii) those primed or unprimed (as the case
may be) Prepetition Liens, Adequate Protection Liens and Prepetition
Superpriority Claims granted to and conferred upon the Prepetition Agent and
Prepetition Lenders shall continue in full force and effect and shall maintain
their priorities as provided in this Interim Order until all Prepetition
Indebtedness shall have been paid and satisfied in full (and that such
Prepetition Superpriority Claims shall, notwithstanding such dismissal,
remain

         

        


        
          
            
               


            

            
              2.01 -
37

              
                

              

            

            
               


            

          

        

        


        binding
on all interested parties); (iii) this Court shall retain jurisdiction,
notwithstanding such dismissal, for the purpose of enforcing the DIP Liens,
Prepetition Liens, DIP Superpriority Claims and Prepetition Superpriority Claims
referred to herein; and (iv) the effectiveness of any order dismissing the
Chapter 11 Cases shall not occur until sixty (60) days after it is entered in
order to give the Secured Lending Entities the opportunity to perfect their
respective security interests and liens in the collateral under non-bankruptcy
law, including, without limitation, the filing or recording of financing
statements, mortgages, deeds of trust, security deeds, leasehold mortgages,
notices of lien or similar instruments in any jurisdiction (including trademark,
copyright, tradename or patent assignment filings with the United States Patent
and Trademark Office, Copyright Office or any similar United States entity) and
the procurement of waivers from any landlord, tenant, mortgagee, bailee or
warehouseman and consents from any licensor or similar
party-in-interest.

        33.            Findings of Fact and
Conclusions of Law. This Interim Order constitutes, where
applicable, findings of fact and conclusions of law and shall take effect and be
fully enforceable immediately upon the execution thereof.

        34.            Choice of Law;
Jurisdiction. The DIP Facility and the DIP Facility Documents
(and the rights and obligations of the parties thereto) shall be governed by,
and construed and interpreted in accordance with, the laws of the State of New
York, including, without limitation, Sections 5-1401 and 5-1402 of the New York
General Obligations Law, and, to the extent applicable, the Bankruptcy Code. The
Bankruptcy Court shall have exclusive jurisdiction with respect to any and all
disputes or matters under, or arising out of or in connection with, either the
DIP Facility or the DIP Facility Documents.

         

        
 

        
          
            
               


            

            
              2.01 -
38

              
                

              

            

            
               


            

          

        

        


        35.            Authorized
Signatories. The signature of any Authorized Officer (as defined
in the Debtor’s corporate resolutions filed with the Petition) or Debtors’
attorneys, appearing on any one or more of the DIP Facility Documents shall be
sufficient to bind the Debtors. No board of directors or other approval shall be
necessary.

        36.            Order Effective. This
Interim Order shall be effective as of the date of the signature
by the Court.

        37.        
   No
Requirement to Accept Title to Collateral. The Prepetition Agent, the
Prepetition
Lenders, the DIP Agent and the DIP Lenders shall not be obligated to accept
title to any portion of the Prepetition Collateral or DIP Collateral in payment
of the indebtedness owed to such party by the Debtors, in lieu of payment in
cash or cash equivalents, nor shall any of the Prepetition Agent, Prepetition
Lenders, DIP Agent or DIP Lenders be obligated to accept payment in cash or cash
equivalents that is encumbered by any interest of any person or entity other
than the Prepetition Agent, Prepetition Lenders, DIP Agent or DIP
Lenders.

        38.            Controlling Effect of
Interim Order. To the extent any provision of this Interim
Order conflicts with any provision of the Motion, any prepetition agreement or
any DIP Facility Document, the provisions of this Interim Order shall
control.

        39.           
Final Hearing.
A final hearing on the Motion shall be heard before this Court on
July __, 2009 at a.m. in Courtroom ____ at the United States Bankruptcy
Court,
824 Market Street, Wilmington, DE 19801.

         

        Dated:
May ___, 2009.

         

         

        
          
            	 	
                     

                    
                      
      

                  	 
	 	
                     

                    
                      
      

                    United
      States Bankruptcy Judge

                  	 


          

        

         

        


        
          
            
               


            

            
              2.01 -
39

              
                

              

            

            
               


            

          

        

        


        SCHEDULE
5.07 

        to DIP Credit
Agreement

         

        PROJECT
COMPLIANCE EXCEPTION SCHEDULE

         

        Pacific
Ethanol Stockton, LLC has not completed the following permits:

         

        #07-352: Wet Cake
Building

        #08-545: Fire Alarm
System

        #08-546: Fire Sprinklers

        #08-547: Foam Fire System for Truck
Load Out 

        #08-215: Ammonia Detection
System

         

        These
permits will be required prior to restarting the facility.

         

         

         

        
          
            
               


            

            
              
              

              
                

              

            

            
               


            

          

        

        


        SCHEDULE
5.08 

        to
DIP Credit Agreement

         

        LITIGATION

         

        
          	 	 	 	 	 
	
                  Claimant

                	
                  Defendants

                	
                  Date
      of

                  Complaint

                	
                  Nature
      of Claim

                	
                  $
      amount sought

                  (if
      applicable)

                
	
                  Barry
      Spiegel

                	
                  Former
      directors of PEI's predecessor company

                	
                  12/23/2005

                	
                  Breach
      of fiduciary
      duty, fraud, 

                  securities
      violations

                	
                  Unspecified

                
	
                  Shaw
      Group

                	
                  PEIMP,
      PEI

                	
                  5/9/2008

                	
                  Collection

                	
                  $ 426,215

                
	
                  OneSource
      Distributors, LLC

                	
                  PEIMP,
      PEI

                	
                  5/9/2008

                	
                  Collection

                	
                  $ 131,486

                
	
                  Delta-T
      Corp.

                	
                  PEI,
      PES, PEIMP, PECOL, PEMV, and PEM

                	
                  8/18/2008

                	
                  Breach
      of contract

                	
                  $6.5
      million of claims in total; $2,163,504 against PES; $4,174,247 against
      PEIMP.

                
	
                  Delta-T
      Corp.

                	
                  PEIMP,
      PEI

                	 
      	
                  Cross-Complaint
      (G EAWestphalia)

                	 
      
	
                  Delta-T
      Corp.

                	
                  PEIMP,
      PEI

                	 
      	
                  Cross-Complaint
      (One Source)

                	 
      
	
                  Campbell
      Sevey, Inc.

                	
                  PEIMP,
      PEI

                	
                  12/8/2008

                	
                  Collection

                	
                  $ 1,638,478

                
	
                  Western
      Ethanol Company LLC

                	
                  Kinergy

                	
                  1/9/2009

                	
                  Breach
      of contract, anticipatory repudiation

                	
                  $ 3,684,750

                
	
                  Creditors
      Bureau USA 

                  (Assignee
      of Basic Chemical Solutions claim)

                	
                  PECA

                	
                  4/24/2009

                	
                  Breach
      of Contract

                	
                  $ 83,517

                


        

        


         

        


        
          
            
               


            

            
              5.08 -
1

              
                

              

            

            
               


            

          

        

        


        HR
Related claims

         

        
          	 	 	 	 
	
                  Claimant

                	
                  Defendants

                	
                  Case
      #

                	
                  Agency

                
	
                  Chris
      Chase

                	
                  Pacific
      Ethanol, Inc.

                	
                  113000444

                	
                  California
      JAMS

                
	
                  Lee
      Penn

                	
                  Pacific
      Ethanol, Inc.

                	
                  State
      Case No.

                  8691-SJRCI

                	
                  California
      Labor Commission

                
	
                  Lee
      Penn

                	
                  Pacific
      Ethanol, Inc.

                	
                  485-2008-00230

                	
                  EEOC

                
	
                  Ron
      Vick

                	
                  Pacific
      Ethanol, Inc. and Liberty Mutual Ins. Co.

                	
                  Currently
      Unassigned

                	
                  Workers
      Compensation
      Appeals Board

                


        

        


         

        
          
            
               


            

            
              5.08 -
2

              
                

              

            

            
               


            

          

        

        SCHEDULE 5.10

        to DIP Credit
Agreement

         

        CONTRACTS

        
          
            	 	 	 	 	 	 	 
	
                    Counterparty(ies)

                  	
                    PE
      Contracting Entity

                  	
                    Document
      Type

                  	
                    Title

                  	
                    Subject
      Matter / Notes

                  	
                    Date
      of Execution

                  	
                    Date
      Effective

                  


          

          
            	
                    Pacific
      Ethanol, Inc.

                  	
                    Pacific
      Ethanol Holding Co. LLC; 

                    Pacific
      Ethanol Madera LLC; 

                    Pacific
      Ethanol Columbia
      LLC; 

                    Pacific
      Ethanol Stockton LLC; 

                    Pacific
      Ethnaol Magic Valley LLC

                  	
                    Asset
      Management Agreement

                  	
                    Asset
      Management Agreement

                  	
                    Subsidiaries
      engage PEI to provide certain management services.

                  	
                    5/14/2009

                  	
                    5/14/2009

                  
	
                    Pacific
      Ethanol, Inc.

                  	
                    Pacific
      Ethanol Holding Co. LLC; 

                    Pacific
      Ethanol Madera LLC; 

                    Pacific
      Ethanol Columbia
      LLC; 

                    Pacific
      Ethanol Stockton LLC; 

                    Pacific
      Ethnaol Magic Valley LLC

                  	
                    Reimbursement
      Agreement

                  	
                    PEI
      entitled to reimbursement

                  	
                    Reimbursement
      of Professional Fees Paid by Pacific Ethanol, Inc.

                  	
                    5/14/2009

                  	
                    5/14/2009

                  
	
                    Stewart
      Management Company

                  	
                    PEHC
      = Pacific Ethanol Holding Co. LLC (DE)

                  	
                    Corporate
      Agreement

                  	
                    Indemnity
      and Fee Agreement

                  	
                    Agreement
      for independent Director services for Michael C. Doyle

                  	
                    2/27/2007

                  	
                    2/27/2007

                  
	
                    Pacific
      Ag. Products, LLC

                  	
                    PEHC
      = Pacific Ethanol Holding Co. LLC (DE)

                  	
                    Amendment

                  	
                    Amendment
      to Corn Procurement and Handling Agreement

                  	
                    Amendment
      to Corn Procurement & Handling Agmt. adding Grain Handling Fee
      definition

                  	
                    2/27/2007

                  	
                    2/27/2007

                  
	
                    Pacific
      Ag. Products, LLC

                  	
                    PEHC
      = Pacific Ethanol Holding Co. LLC (DE)

                  	
                    Commodity
      Agreement

                  	
                    Corn
      Procurement and Handling Agreement

                  	
                    Provides
      grain services for denatured fuel ethanol production

                  	
                    2/27/2007

                  	
                    2/27/2007

                  
	
                    Pacific
      Ag. Products, LLC

                  	
                    PEHC
      = Pacific Ethanol Holding Co. LLC (DE)

                  	
                    Services
      Agreement

                  	
                    Distillers
      Grains Marketing Agreement (Boardman Project)

                  	
                    Provide
      marketing services for Distillers Grain

                  	
                    2/27/2007

                  	
                    2/27/2007

                  
	
                    Pacific
      Ag. Products, LLC

                  	
                    PEHC
      = Pacific Ethanol Holding Co. LLC (DE)

                  	
                    Services
      Agreement

                  	
                    Distillers
      Grains Marketing Agreement (Brawley Project)

                  	
                    Provide
      marketing services for Distillers Grain

                  	
                    2/27/2007

                  	
                    2/27/2007

                  
	
                    Pacific
      Ag. Products, LLC

                  	
                    PEHC
      = Pacific Ethanol Holding Co. LLC (DE)

                  	
                    Services
      Agreement

                  	
                    Distillers
      Grains Marketing Agreement (Burley Project)

                  	
                    Provide
      marketing services for Distillers Grain

                  	
                    2/27/2007

                  	
                    2/27/2007

                  
	
                    Pacific
      Ag. Products, LLC

                  	
                    PEHC
      = Pacific Ethanol Holding Co. LLC (DE)

                  	
                    Services
      Agreement

                  	
                    Distillers
      Grains Marketing Agreement (Stockton Project)

                  	
                    Provide
      Distillers Grain marketing services

                  	
                    2/27/2007

                  	
                    2/27/2007

                  
	
                    West
      LB

                  	
                    PEHC
      = Pacific Ethanol Holding Co. LLC (DE)

                  	
                    Finance
      Agreement

                  	
                    Letter
      Request for Administrative Agent Approval of Amendment to Corn Procurement
      and Handling Agreement

                  	
                    Request
      for creditors' approval of Administrative Agent to enter into Amendment to
      Corn Procurement & Handling Agreement

                  	
                    3/20/2007

                  	
                    3/20/2007

                  
	
                    West
      LB

                  	
                    PEHC
      = Pacific Ethanol Holding Co. LLC (DE)

                  	
                    Finance
      Agreement

                  	
                    Assignment
      and Security Agreement

                  	
                    Assignment
      and security agreement to Credit Agreement

                  	
                    2/27/2007

                  	
                    2/27/2007

                  
	
                    West
      LB

                  	
                    PEHC
      = Pacific Ethanol Holding Co. LLC (DE)

                  	
                    Finance
      Agreement

                  	
                    Closing
      Certificate for Pacific Ethanol Holding Co., LLC

                  	
                    Closing
      Certificate in relation to Credit Agreement

                  	
                    2/27/2007

                  	
                    2/27/2007

                  


             

          

        

        
          
            
               


            

            
              5.10 -
1

              
                

              

            

            
               


            

          

        

        SCHEDULE 5.10

        to DIP Credit
Agreement

         

        CONTRACTS

        
          	 	 	 	 	 	 	 
	
                  West
      LB

                	
                  PEHC
      = Pacific Ethanol Holding Co. LLC (DE)

                	
                  Finance
      Agreement

                	
                  ISDA
      Master Agreement

                	
                  Master
      agreement for transactions entered into concerning Credit
      Agreement

                	
                  2/26/2007

                	
                  2/26/2007

                
	
                  West
      LB

                	
                  PEHC
      = Pacific Ethanol Holding Co. LLC (DE)

                	
                  Finance
      Agreement

                	
                  Pledge
      and Security Agreement

                	
                  Pledge
      and Security Agreement re Credit Agreement

                	
                  2/27/2007

                	
                  2/27/2007

                
	
                  West
      LB

                	
                  PEHC
      = Pacific Ethanol Holding Co. LLC (DE)

                	
                  Finance
      Agreement

                	
                  Schedule
      to the Master Agreement

                	
                  Schedule
      to Master Agreement re Credit Agreement

                	
                  2/26/2007

                	
                  2/26/2007

                
	
                  West
      LB

                	
                  PEHC
      = Pacific Ethanol Holding Co. LLC (DE)

                	
                  Finance
      Agreement

                	
                  Pledge
      and Security Agreement

                	
                  Pledge
      and Security Agreement

                	
                  8/7/2008

                	
                  8/7/2008

                
	
                  West
      LB

                	
                  PEHC
      = Pacific Ethanol Holding Co. LLC (DE)

                	
                  Proxy
      Agreement

                	
                  Irrevocable
      Proxy

                	
                  Irrevocable
      Proxy

                	 
      	
                  8/31/2008

                
	
                  West
      LB

                	
                  PEHC
      = Pacific Ethanol Holding Co. LLC (DE)

                	
                  Proxy
      Agreement

                	
                  Irrevocable
      Proxy

                	
                  Irrevocable
      Proxy appointing WestLB as Proxy for PE Stockton for continuance of an
      Event of Default under the Pledge and Security Agreement

                	 
      	
                  8/1/2008

                


        

        
          	
                  Air
      Liquide

                	
                  PEM
      = Pacific Ethanol Madera LLC (DE)

                	
                  Commodity
      Agreement

                	
                  Carbon
      Dioxide Sales Agreement

                	
                  Sale
      of crude gaseous carbon dioxide to Air Liquide

                	
                  4/4/2007
 	
                  4/4/2007
 
	
                  Counterparty(ies)

                	
                  PE
      Contracting Entity

                	
                  Document
      Type

                	
                  Title

                	
                  Subject
      Matter / Notes

                	
                  Date
      of Execution

                	
                  Date
      Effective

                


        

        
          	
                  Air
      Liquide

                	
                  PEM
      = Pacific Ethanol Madera LLC (DE)

                	
                  Services
      Agreement

                	
                  License
      Agreement

                	
                  PEM
      grants license to use and occupy the property described on Ex.
      A

                	
                  4/4/2007

                	
                  4/4/2007

                
	
                  Comerica
      Bank

                	
                  PEM
      = Pacific Ethanol Madera LLC (DE)

                	
                  Letter
      Agreement

                	
                  Letter
      Agreement

                	
                  Interest
      rate cap 5.50 percent

                	
                  5/22/2006

                	
                  5/31/2006

                
	
                  Comerica
      Bank

                	
                  PEM
      = Pacific Ethanol Madera LLC (DE)

                	
                  Letter
      Agreement

                	
                  Letter
      Agreement

                	
                  Interest
      rate cap 6.00 percent

                	
                  5/22/2006

                	
                  5/31/2006

                
	
                  Brand
      Energy Services 

                  of
      CA, Inc.

                	
                  PEM
      = Pacific Ethanol Madera LLC (DE)

                	
                  Operations
      Contract

                	
                  Brand
      Scaffolding

                	
                  Provide
      supervision, labor and materials to build and dismantle scaffolding for
      three evaporators

                	
                  3/25/2009

                	
                  3/17/2009

                
	
                  Inergy
      Propane LLC

                	
                  PEM
      = Pacific Ethanol Madera LLC (DE)

                	
                  Guarantee
      Agreement

                	
                  Guarantee

                	
                  PEI
      guarantees liability of PE Madera for up to $190,000.

                	
                  6/11/2008

                	
                  6/11/2008

                
	
                  Delta-T

                	
                  PEM
      = Pacific Ethanol Madera LLC (DE)

                	
                  Construction
      Contract

                	
                  License
      of Technology Between Delta-T Corporation and Pacific Ethanol
      
Madera
      LLC

                	
                  Provide
      engineering and related services related to construction of the Plant
      based on Delta-T's proprietary technology under sub. w/Lyles, but only on
      condition that PEM enter into a license agreement w/Delta T for use of
      technology embodied therein.

                	
                  9/1/2005

                	
                  9/1/2005

                
	
                  U.S.
      Department of Agriculture

                	
                  PEM
      = Pacific Ethanol Madera LLC (DE)

                	
                  Indemnity
      Agreement

                	
                  Agreement
      to Indemnify

                	
                  Agreement
      to Indemnify

                	
                  6/3/2008

                	
                  6/3/2008

                


           

          
            
              
              

            

            
              5.10 -
2

              
                

              

            

            
              
              

            

          

           

          
            	 	 	 	 	 	 	 
	
                    Novozymes
      North America, Inc.

                  	
                    PEM
      = Pacific Ethanol Madera LLC (DE)

                  	
                    Operations
      Contract

                  	
                    Enzyme
      Supply Agreement

                  	
                    Enzyme
      Supply Agreement

                  	 
      	
                    5/1/2008

                  
	
                    Envent
      Corporation

                  	
                    PEM
      = Pacific Ethanol Madera LLC (DE)

                  	
                    Operations
      Contract

                  	
                    Envent
      MPSA

                  	
                    Degassing
      Ethanol Storage Tanks

                  	
                    3/3/2009

                  	
                    3/2/2009

                  
	
                    Atlas
      Copco

                  	
                    PEM
      = Pacific Ethanol Madera LLC (DE)

                  	
                    Operations
      Contract

                  	
                    Compressor
      Maintenance

                  	
                    Compressor
      maintenance contract

                  	
                    5/1/2008

                  	
                    5/1/2008

                  
	
                    Pacific
      Ethanol Imperial, LLC

                  	
                    PEM
      = Pacific Ethanol Madera LLC (DE)

                  	
                    Lease
      Agreement: Equipment

                  	
                    Intercompany
      equipment lease agreement. PE Madera leasing certain PE Imperial
      equipment.

                  	
                    Equipment
      Lease Agreement

                  	
                    11/4/2008

                  	
                    2/1/2008

                  
	
                    Kinergy
      Marketing, LLC

                  	
                    PEM
      = Pacific Ethanol Madera LLC (DE)

                  	
                    Services
      Agreement

                  	
                    Ethanol
      Marketing Agreement (Madera Project)

                  	
                    Provide
      marketing services for Distillers Grain

                  	
                    11/4/2005

                  	
                    11/4/2005

                  
	
                    Pacific
      Ag. Products, LLC

                  	
                    PEM
      = Pacific Ethanol Madera LLC (DE)

                  	
                    Commodity
      Agreement

                  	
                    Corn
      Procurement and Processing Agreement (Madera Project)

                  	
                    PAP
      to solicit, negotiate, enter into and administer in the name of PEM corn
      supply arrangements necessary and sufficient to allow PEM to procure corn
      necessary to operate the Facility.

                  	
                    11/7/2005

                  	
                    11/7/2005

                  
	
                    Kinergy
      Marketing, LLC

                  	
                    PEM
      = Pacific Ethanol Madera LLC (DE)

                  	
                    Commodity
      Agreement

                  	
                    Second
      Amended and Restated Ethanol Marketing Agreement (Madera

                    Project)

                  	
                    Amends
      and restates in its entirety that certain Amended and Restated Ethanol
      Marketing Agreement, dated March 16, 2006.

                  	
                    2/27/2007

                  	 
      
	
                    Port
      of Morrow

                  	
                    PECOL
      = Pacific Ethanol Columbia, LLC (DE)

                  	
                    Lease
      Agreement: Ground

                  	
                    Lease

                  	
                    Lease
      of land consisting of 25 acres

                  	
                    4/20/2006

                  	
                    5/1/2006

                  
	
                    Umatilla
      Electric Cooperative

                  	
                    PECOL
      = Pacific Ethanol Columbia, LLC (DE)

                  	
                    Operations
      Contract

                  	
                    Agreement
      for Electric Service and Purchase of Power

                  	
                    Agreement
      to deliver electric power and energy to Boardman Plant

                  	
                    3/29/2007

                  	
                    3/29/2007

                  
	
                    Tidewater
      Barge Lines, Inc.

                  	
                    PECOL
      = Pacific Ethanol Columbia, LLC (DE)

                  	
                    Services
      Agreement

                  	
                    Transportation
      and Dock Services Agreement

                  	
                    Barging
      and transporting ethanol on Columbia river

                  	
                    2/15/2007

                  	
                    2/15/2007

                  
	
                    City
      of Boardman Oregon

                  	
                    PECOL
      = Pacific Ethanol Columbia, LLC (DE)

                  	
                    Governmental/Permitting

                  	
                    Oregon
      Enterprise Zone Authorization Application

                  	
                    Application
      for property tax exemption for years 2007-2011

                  	
                    5/15/2006

                  	
                    5/15/2006

                  
	
                    City
      of Boardman Oregon

                  	
                    PECOL
      = Pacific Ethanol Columbia, LLC (DE)

                  	
                    
                      Governmental/Permitting

                    

                  	
                    Enterprise
      Zone Abatement Agreement

                  	
                    Property
      tax exemption agreement

                  	
                    4/26/2006

                  	
                    4/19/2006

                  
	
                    Northstar
      Chemical Inc.

                  	
                    PECOL
      = Pacific Ethanol Columbia, LLC (DE)

                  	
                    Operations
      Contract

                  	
                    Sodium
      Hypochlorite Product and Tank

                  	
                    Product
      and Equipment Agreement for 12.5% Sodium Hypochlorite and
    tank

                  	
                    11/17/2008
 	
                    11/17/2008
 
	
                    PPI
      Technology Services L.P.

                  	
                    PECOL
      = Pacific Ethanol Columbia, LLC (DE)

                  	
                    Operations
      Contract

                  	
                    PPI
      Technology Agreement

                  	
                    Control
      System Technical Support

                  	
                    12/10/2008
 	
                    11/3/2008
 
	
                    Port
      of Morrow

                  	
                    PECOL
      = Pacific Ethanol Columbia, LLC (DE)

                  	
                    Easement
      Agreement

                  	
                    Easement
      for Roadway Purposes

                  	
                    Grants
      Port of Morrow an easement onto PEI leased property.

                  	
                    12/21/2007
 	
                    12/21/2007
 


          

        

        
          
          

        

         

        
          
            
               


            

            
              5.10 -
3

              
                

              

            

            
               


            

          

        

         

        SCHEDULE 5.10

        to DIP Credit
Agreement

         

        
          CONTRACTS

        

        
          
            	 	 	 	 	 	 	 
	
                    Port
      of Morrow

                  	
                    PECOL
      = Pacific Ethanol Columbia, LLC (DE)

                  	
                    Finance
      Agreement

                  	
                    Estoppel
      Certificate

                  	
                    Estoppel
      Certificate for appeasement of lenders West LB AG, NY
    Branch

                  	
                    12/21/2007

                  	
                    12/21/2007

                  
	
                    U.S.
      Department of Agriculture

                  	
                    PECOL
      = Pacific Ethanol Columbia, LLC (DE)

                  	
                    Indemnity
      Agreement

                  	
                    Agreement
      to Indemnify

                  	
                    Agreement
      to Indemnify

                  	
                    6/3/2008

                  	
                    6/3/2008

                  
	
                    Port
      of Morrow

                  	
                    PECOL
      = Pacific Ethanol Columbia, LLC (DE)

                  	
                    Lease
      Agreement: Ground

                  	
                    Pipeline
      Easement Agreement

                  	
                    Port
      of Morrow Pipeline Easement Agreement

                  	
                    2/1/2007

                  	
                    2/1/2007

                  
	
                    Port
      of Morrow

                  	
                    PECOL
      = Pacific Ethanol Columbia, LLC (DE)

                  	
                    Lease
      Agreement: Ground

                  	
                    Easement
      for Roadway Purposes

                  	
                    PEI
      grants to Port a 10 foot easement across the Leased
    Property.

                  	 
      	
                    12/21/2007

                  
	
                    Tidewater
      Barge Lines, Inc.

                  	
                    PECOL
      = Pacific Ethanol Columbia, LLC (DE)

                  	
                    Letter
      Agreement

                  	
                    Deposit
      Escrow Agreement

                  	
                    Deposit
      Escrow Agreement

                  	
                    2/15/2007

                  	
                    2/15/2007

                  
	
                    PPM
      Energy Inc.

                  	
                    PECOL
      = Pacific Ethanol Columbia, LLC (DE)

                  	
                    Operations
      Contract

                  	
                    Base
      Contract for Sale and Purchase of Natural Gas

                  	
                    Base
      Contract for Sale and Purchase of Natural Gas

                  	
                    6/7/2007

                  	
                    6/7/2007

                  
	
                    Novozymes
      North America, Inc.

                  	
                    PECOL
      = Pacific Ethanol Columbia, LLC (DE)

                  	
                    Operations
      Contract

                  	
                    Enzyme
      Supply Agreement

                  	
                    Enzyme
      Supply Agreement

                  	 
      	
                    5/1/2008

                  
	
                    Cascade
      Natural Gas Corporation

                  	
                    PECOL
      = Pacific Ethanol Columbia, LLC (DE)

                  	
                    Services
      Agreement

                  	
                    Agreement
      for ServicePlus Program Services

                  	
                    gas
      piping and installation at Boardman

                  	
                    4/13/2007

                  	
                    3/27/2007

                  
	
                    Tidewater
      Barge Lines, Inc.

                  	
                    PECOL
      = Pacific Ethanol Columbia, LLC (DE)

                  	
                    Services
      Agreement

                  	
                    Environmental
      Services Agreement

                  	
                    Agreement
      that covers emergency spill services.

                  	
                    7/20/2007

                  	
                    7/20/2007

                  
	
                    US
      Energy

                  	
                    PECOL
      = Pacific Ethanol Columbia, LLC (DE)

                  	
                    Services
      Agreement

                  	
                    Energy
      Management Agreement

                  	
                    Provision
      of Energy Management Services

                  	
                    4/4/2006

                  	
                    4/1/2006

                  
	
                    Union
      Pacific Railroad

                  	
                    PECOL
      = Pacific Ethanol Columbia, LLC (DE)

                  	
                    Services
      Agreement

                  	
                    Agreement
      and Consent to Joint Use of Track

                  	
                    UP
      consents to grant rail service on the track to PECOL and Port of
      Morrow

                  	
                    2/22/2006

                  	
                    2/22/2006

                  
	
                    Pacific
      Ethanol Imperial, LLC

                  	
                    PECOL
      = Pacific Ethanol Columbia, LLC (DE)

                  	
                    Lease
      Agreement: Equipment

                  	
                    Intercompany
      equipment lease agreement. PE Columbia leasing certain PE Imperial
      equipment.

                  	
                    Equipment
      Lease Agreement

                  	
                    11/4/2008

                  	
                    7/22/2008

                  
	
                    Pacific
      Ethanol California, Inc.

                  	
                    PECOL
      = Pacific Ethanol Columbia, LLC (DE)

                  	
                    Construction
      Contract

                  	
                    Provide
      construction management services

                  	
                    Construction
      Management Agreement (Boardman Project)

                  	
                    2/27/2007

                  	
                    2/27/2007

                  
	
                    Kinergy
      Marketing, LLC

                  	
                    PECOL
      = Pacific Ethanol Columbia, LLC (DE)

                  	
                    Services
      Agreement

                  	
                    Ethanol
      Marketing Agreement (Boardman Project)

                  	
                    Provide
      denatured fuel ethanol production

                  	
                    2/27/2007

                  	
                    2/27/2007

                  
	
                    Pacific
      Ethanol California, Inc.

                  	
                    PECOL
      = Pacific Ethanol Columbia, LLC (DE)

                  	
                    Operations
      Contract

                  	
                    Operation
      and Maintenance Agreement (Boardman Project)

                  	
                    Perform
      all tasks to operate and maintain facility

                  	
                    2/27/2007

                  	
                    2/27/2007

                  
	
                    City
      of Burley

                  	
                    PEMV
      = Pacific Ethanol Magic Valley, LLC (DE

                  	
                    Services
      Agreement

                  	
                    Municipal
      Water and Sewer Services Contract

                  	
                    City
      to sell and deliver all water required to project site and provide sole
      source of water supply; in addition City will provide all wastewater
      service.

                  	
                    2/5/2008

                  	
                    2/5/2008

                  
	
                    Intermountain
      Gas

                  	
                    PEMV
      = Pacific Ethanol Magic Valley, LLC (DE

                  	
                    Commodity
      Agreement

                  	
                    Intermountain
      Gas Company T-4 Natural Gas Service Contract

                  	
                    Transportation
      (T-4) Firm Distribution Only Transportation Service for a Maximum Daily
      Firm Quantity (MDFQ) of 50,000 therms per day during the Agreement
      period.

                  	
                    10/1/2007
 	 10/1/2007
	
                    Basic
      Chemical Solutions LLC

                  	
                    PEMV
      = Pacific Ethanol Magic Valley, LLC (DE

                  	
                    Operations
      Contract

                  	
                    BCS
      - Sulfuric Acid Sales Agreement

                  	
                    Sulfuric
      Acid, Technical Grade 93% solution

                  	
                    3/31/2008
 	
                    3/15/2008
 


          

        

         

        
          
            
               


            

            
              5.10 -
4

              
                

              

            

            
               


            

          

        

        


        SCHEDULE 5.10

        to DIP Credit
Agreement

         

        
          
            CONTRACTS

            
              	 	 	 	 	 	 	 
	
                      Basic
      Chemical Solutions LLC

                    	
                      PEMV
      = Pacific Ethanol Magic Valley, LLC (DE

                    	
                      Operations
      Contract

                    	
                      BCS
      - Sodium Hypochlorite Product Agreement

                    	
                      Sodium
      HypoChlorite, Technical Grade 12.5% solution

                    	
                      3/17/2008
 	
                      3/17/2008

                    
	
                      PPI
      Technology Services L.P.

                    	
                      PEMV
      = Pacific Ethanol Magic Valley, LLC (DE

                    	
                      Operations
      Contract

                    	PPI
      Technology Agreement	
                      Control
      System Technical Support

                    	
                      12/10/2008
 	
                      11/3/2008
 
	
                      Basic
      Chemical Solutions LLC

                    	
                      PEMV
      = Pacific Ethanol Magic Valley, LLC (DE

                    	
                      Operations
      Contract

                    	
                      BCS
      - Phosphoric Acid Product Agreement

                    	
                      Phosphoric
      Acid, Technical Grade 75% solution

                    	
                      3/17/2008
 	
                      3/17/2008
 
	
                      Counterparty(ies)

                    	
                      PE
      Contracting Entity

                    	
                      Document
      Type

                    	
                      Title

                    	
                      Subject
      Matter / Notes

                    	
                      Date
      of Execution

                    	
                      Date
      Effective

                    


            

          

        

        
          
            	
                    PPM
      Energy Inc.

                  	
                    PEMV
      = Pacific Ethanol Magic Valley, LLC (DE)

                  	
                    Commodity
      Agreement

                  	
                    Base
      Contract for Sale and Purchase of Natural Gas

                  	
                    Base
      Contract for Sale and Purchase of Natural Gas

                  	
                    3/31/2008

                  	
                    3/31/2008

                  
	
                    PPM
      Energy Inc.

                  	
                    PEMV
      = Pacific Ethanol Magic Valley, LLC (DE)

                  	
                    Commodity
      Agreement

                  	
                    Special
      Provisions to the Base Contract

                  	
                    Special
      Provisions to the PEMV Base Contract

                  	
                    3/31/2008

                  	
                    3/31/2008

                  
	
                    US
      Water Services

                  	
                    PEMV
      = Pacific Ethanol Magic Valley, LLC (DE)

                  	
                    Construction
      Contract

                  	
                    Engineered
      Equipment Purchase Order

                  	
                    Agreement
      covering the design, manufacture, supply, and installation of Water
      Treatment Equipment and Supplies for Burley Plant.

                  	
                    9/19/2007

                  	
                    9/19/2007

                  
	
                    Burley
      Development Authority

                  	
                    PEMV
      = Pacific Ethanol Magic Valley, LLC (DE)

                  	
                    Construction
      Contract

                  	
                    Development
      Agreement For The Use of Tax Increment Financing

                  	
                    agreement
      sets forth the terms concerning the installation of certain infrastructure
      for the Burley project and to agree upon other matters with regards to the
      Project

                  	
                    6/21/2007

                  	
                    6/11/2007

                  
	
                    U.S.
      Department of Agriculture

                  	
                    PEMV
      = Pacific Ethanol Magic Valley, LLC (DE)

                  	
                    Indemnity
      Agreement

                  	
                    Agreement
      to Indemnify

                  	
                    Agreement
      to Indemnify

                  	
                    6/3/2008

                  	
                    6/3/2008

                  
	
                    United
      Electric Co-Op, Inc.

                  	
                    PEMV
      = Pacific Ethanol Magic Valley, LLC (DE)

                  	
                    Lease
      Agreement: Ground

                  	
                    Right
      of Way and Access Easement

                  	
                    PEMV
      grants to UEC a non-exclusive perpetual right of way and easement to
      property located in Burley, ID (see Ex. A and B) for the purpose of
      vehicle access from UEC's substation and the erection of utility
      lines.

                  	
                    10/2/2007

                  	
                    10/2/2007

                  
	
                    Novozymes
      North America, Inc.

                  	
                    PEMV
      = Pacific Ethanol Magic Valley, LLC (DE)

                  	
                    Operations
      Contract

                  	
                    Enzyme
      Supply Agreement

                  	
                    Enzyme
      Supply Agreement

                  	 
      	
                    5/1/2008

                  
	
                    United
      Electric Co-Op, Inc.

                  	
                    PEMV
      = Pacific Ethanol Magic Valley, LLC (DE)

                  	
                    Services
      Agreement

                  	
                    Substation
      Agreement

                  	
                    Agreement
      for construction of electrical substation at Burley plant by UEC.
      Substation to be paid by Burley Development Authority but PEMV is primary
      obligor backed by payment Guarantee by PEI.

                  	
                    3/21/2008

                  	
                    3/21/2008

                  
	
                    United
      Electric Co-Op, Inc.

                  	
                    PEMV
      = Pacific Ethanol Magic Valley, LLC (DE)

                  	
                    Services
      Agreement

                  	
                    Revised
      Memorandum

                  	
                    Intended
      to replace and supersede version executed on Feb 27, 2008. This version
      lays out the 8 year payment plan for Substation costs.

                  	
                    3/28/2008

                  	
                    3/28/2008

                  
	
                    Pacific
      Ethanol California, Inc.

                  	
                    PEMV
      = Pacific Ethanol Magic Valley, LLC (DE)

                  	
                    Construction
      Contract

                  	
                    Construction
      Management Agreement 

                    (Burley
      Project)

                  	
                    Provide
      construction management services

                  	
                    2/27/2007

                  	
                    2/27/2007

                  
	
                    Kinergy
      Marketing, LLC

                  	
                    PEMV
      = Pacific Ethanol Magic Valley, LLC (DE)

                  	
                    Services
      Agreement

                  	
                    Ethanol
      Marketing Agreement (Burley Project)

                  	
                    Provide
      marketing services for Distillers Grain

                  	
                    2/27/2007

                  	
                    2/27/2007

                  


          

           

        

         

        
          
            
               


            

            
              5.10 -
5

              
                

              

            

            
               


            

          

        

        


        SCHEDULE 5.10

        to DIP Credit
Agreement

         

        CONTRACTS

         

        
        

        
          	Pacific
      Ethanol California, Inc.	
                  PEMV
      = Pacific Ethanol Magic Valley, LLC (DE)

                	Operations
      Contract	Operation
      and Maintenance Agreement 

                  (Burley
      Project)

                	Perform
      all tasks to operate and maintain facility	
                  2/27/2007
 	
                  2/27/2007
 
	Pacific
      Ethanol Imperial, LLC	
                  PEMV
      = Pacific Ethanol Magic Valley, LLC (DE)

                	 Lease
      Agreement: Equipment	Intercompany
      equipment lease agreement. PE Magic Valley leasing certain PE Imperial
      equipment.	Equipment
      Lease Agreement	
                  11/4/2008
 	
                  10/1/2007
 
	
                  Stockton
      Port District

                	
                  PES
      = Pacific Ethanol Stockton, LLC (DE)

                	
                  Lease
      Agreement: Ground

                	
                  Memorandum
      of Lease

                	
                  Memorandum
      of Lease

                	 	
                  8/1/2008
 
	
                  Stockton
      Port District

                	
                  PES
      = Pacific Ethanol Stockton, LLC (DE)

                	
                  Lease
      Agreement: Ground

                	
                  Lease
      by the Stockton Port District

                	
                  Approx.
      30 acres for the use of construction, operation and maintenance of the
      Facility.

                	 	
                  2/6/2007
 
	 
      

                  Stockton
      Port District

                	 
      

                  PES
      = Pacific Ethanol Stockton, LLC (DE)

                	 
      

                  Easement
      Agreement

                	 
      

                  Rail
      and Access Easement Agreement

                	 
      

                  Port
      grants to PES easement for construction, maintenance and operation of Rail
      Improvements.

                	
                  8/1/2008
 	
                  8/1/2008
 
	
                  Stockton
      Port District

                	
                  PES
      = Pacific Ethanol Stockton, LLC (DE)

                	
                  Easement
      Agreement

                	
                  Pipeline
      Easement Agreement

                	
                  Port
      grants to PES easement for construction, maintenance and operation of the
      Pipeline Improvements.

                	
                  8/1/2008

                	
                  8/1/2008

                
	
                  Stockton
      Port District

                	
                  PES
      = Pacific Ethanol Stockton, LLC (DE)

                	
                  Guarantee
      Agreement

                	
                  Guaranty
      of Lease

                	
                  PEI
      guaranty of PES liability related to lease of Port of
    Stockton

                	
                  2/5/2007

                	
                  2/5/2007

                
	
                  Stockton
      Port District

                	
                  PES
      = Pacific Ethanol Stockton, LLC (DE)

                	
                  Lease
      Agreement: Ground

                	
                  Lease
      by the Stockton Port District to Pacific Ethanol Stockton,
    LLC

                	
                  Lease
      Agreement

                	
                  2/5/2007

                	
                  2/5/2007

                
	
                  North
      American Bioproducts Corporation

                	
                  PES
      = Pacific Ethanol Stockton, LLC (DE)

                	
                  Operations
      Contract

                	
                  NABC
      Product Supply Agreement

                	
                  Yeast
      and antimicrobial product purchase

                	
                  7/16/2008

                	
                  8/5/2008

                
	
                  PPI
      Technology Services L.P.

                	
                  PES
      = Pacific Ethanol Stockton, LLC (DE)

                	
                  Operations
      Contract

                	
                  PPI
      Technology Agreement

                	
                  Control
      System Technical Support

                	
                  12/10/2008

                	
                  11/3/2008

                
	
                  Iberdrola
      Renewables, Inc.

                	
                  PES
      = Pacific Ethanol Stockton, LLC (DE)

                	
                  Commodity
      Agreement

                	
                  Base
      Contract for Sale and Purchase of Natural Gas

                	
                  Base
      Contract for Sale and Purchase of Natural Gas for Stockton
      plant

                	
                  9/18/2008

                	
                  9/18/2008

                
	
                  Stockton
      Port District

                	
                  PES
      = Pacific Ethanol Stockton, LLC (DE)

                	
                  Lease
      Agreement: Ground

                	
                  Right
      of Entry

                	
                  Right
      of Entry Agreement

                	
                  1/16/2007

                	
                  1/16/2007

                
	
                  Port
      of Stockton

                	
                  PES
      = Pacific Ethanol Stockton, LLC (DE)

                	
                  Lease
      Agreement: Ground

                	
                  First
      Addendum to Lease (Ordinance No. 218)

                	
                  First
      Addendum to Lease (Ordinance No. 218)

                	
                  8/1/2008

                	
                  8/1/2008

                
	
                  Novozymes
      North America, Inc.

                	
                  PES
      = Pacific Ethanol Stockton, LLC (DE)

                	
                  Operations
      Contract

                	
                  Enzyme
      Supply Agreement

                	
                  Enzyme
      Supply Agreement

                	 
      	
                  5/1/2008

                
	
                  HJ
      Heinz Company, L.P.

                	
                  PES
      = Pacific Ethanol Stockton, LLC (DE)

                	
                  Sewer
      Capacity Credits Purchase Agreement

                	
                  Sewer
      Capacity Credits Purchase Agreement

                	
                  Purchase
      of 4.5 million gallons per month of Sewer Capacity and 1,130 / Pounds of
      B.O.D. and 1,130 / Pounds of T.S.S. from Heinz to the City of
      Stockton.

                	
                  7/31/2008

                	
                  8/11/2008

                
	
                  The
      Ken Bratney Company

                	
                  PES
      = Pacific Ethanol Stockton, LLC (DE)

                	
                  System
      Design and Equipment Supply

                	
                  Grain
      Handling System design and equipment supply

                	
                  Grain
      Handling System Design and Grain Handling Equipment Supply

                	 
      	
                  3/31/2008

                


        

         

        
          
            
               


            

            
              5.10 -
6

              
                

              

            

            
               


            

          

        

         

        
 

        SCHEDULE
5.18(a)(i) 

        to DIP Credit
Agreement

         

        ENVIRONMENTAL
WARRANTIES

         

        Pacific
Ethanol Magic Valley, LLC (“Magic Valley”) is in the process of entering into
consent order with the Idaho Department of Environmental Quality with respect to
its Air Emission Permit. Specifically Magic Valley performance test report
indicated combined formaldehyde emissions in excess of its air permit limits.
Magic Valley is making equipment modifications and testing plans to demonstrate
compliance with the air permit upon restart of the facility.

         

         

        
          
            
               


            

            
               


              
                

              

            

            
               


            

          

        

        SCHEDULE
5.18(d)(ii) 

        to DIP Credit
Agreement

         

        UNDERGROUND STORAGE
TANKS

         

        None.

         

         

         

        


        
          
            
               


            

            
               


              
                

              

            

            
               


            

          

        

         

         SCHEDULE
5.26 

        to DIP Credit
Agreement

         

        LEGAL NAMES AND PLACE OF
BUSINESS

         

        Legal
Names

         

        
          
            	
                    Pacific
      Holding:

                  	
                    Pacific
      Ethanol Holding Co. LLC, a Delaware limited liability company.
      

                  
	 	 
	Madera:
      	Pacific
      Ethanol Madera LLC, a Delaware limited liability company.
	 	 
	
                    Boardman:

                  	
                    Pacific
      Ethanol Columbia, LLC, a Delaware limited liability company. This entity
      was known as PE Columbia Ethanol, LLC from its formation until March
      2006.

                  
	 	 
	
                    Stockton:

                  	
                    Pacific
      Ethanol Stockton, LLC, a Delaware limited liability company. This entity
      was known as Pacific Ethanol Visalia LLC from its formation until June
      2006.

                  
	 	 
	
                    Burley:

                  	
                    Pacific
      Ethanol Magic Valley, LLC, a Delaware limited liability
      company.

                  


          

        

         

        Sole
Place of Business and Chief Executive Office of Each Borrower

         

        400
Capitol Mall, Suite 2060 Sacramento, California 95814

         

        
          
            
               


            

            
              
              

              
                

              

            

            
               


            

          

        

         

        SCHEDULE
5.27 

        to DIP Credit
Agreement

         

        BROKER
FEES

         

        None.

         

        


        
          
            
               


            

            
              
              

              
                

              

            

            
               


            

          

        

         

        SCHEDULE
5.29

        Project
Accounts and


        Local
Accounts

        
          
            	 
      	 
      	 
      	 
      	 
      
	
                    Amarillo
      National Bank

                  	
                    PEHC

                  	
                    Operating
      Account

                  	
                    xxx872

                  	
                    Active

                  
	
                    Address:

                  	
                    410
      S. Taylor

                  	
                    PEHC

                  	
                    Revenue
      Account

                  	
                    xxx864

                  	
                    Active

                  
	 
      	
                    PO
      Box 1

                  	 
      	 
      	 
      	 
      
	 
      	
                    Amarillo,
      TX 79105

                  	 
      	 
      	 
      	 
      
	
                    Contacts:

                  	
                    Darren
      Jenks, VP (806) 378-8339

                  	 
      	 
      	 
      	 
      
	 
      	
                    Sally
      Frierson, (806) 378-8230

                  	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      
	
                    US
      Bank

                  	 
      	
                    PECOL

                  	
                    Escrow
      Account

                  	
                    xxxx60000

                  	
                    Active

                  
	
                    Address:

                  	
                    111
      SW Fifth Avenue, Sixth Floor

                  	
                    Note
      Acct Title per statement:

                  	 
      	 
      
	 
      	
                    Portland,
      OR 97204

                  	
                    Pacific
      Ethanol Columbia LLC/Tidewater Barge Lines Inc/Tidewater Terminal Company
      Inc Escrow

                  
	
                    Contacts:

                  	
                    Cheryl
      K Nelson (503) 275-5708

                  	 
      	 
      
	 
      	 
      	 
      	 
      


          

        

         

        
 

        
          
            
               


            

            
               


              
                

              

            

            
               


            

          

        

        


        
          
            	
                    Pacific
      Ethanol Holdco 

                    Debtor
      In Possession Financing Budget 

                    May
      18, 2009

                  	
                    SCHEDULE
      6.01(n) to
      

                    DIP
      Credit Agreement

                  


          

        

         

        
          	 	 	 	 	 	
                  INITIAL
      DIP BUDGET

                	 	 	 	 
	 	 	
                  MAY

                	 	 	JUNE	 	 	JULY	 
	 	 	
                  Filing

                	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	
                  week
      1

                  05/18
      - 

                  05/22

                	 	 	
                  week
      2

                  05/25
      -05/29

                	 	 	
                  week
      3

                  06/01-06/05

                	 	 	
                  week
      4

                  06/08-06/12

                	 	 	
                  week
      5

                  06/15-06/19

                	 	 	
                  week
      6

                  06/22-06/26

                	 	 	
                  week
      7

                  06/29-07/03

                	 	 	
                  week
      8

                  07/06-07/10

                	 	 	
                  week
      9

                  07/13-07/17

                	 	 	
                  week
      10

                  07/20-07/24

                	 	 	
                  week
      11

                  07/27-07/31

                	 
	
                  Beginning
      Cash Balance

                	 	$	2,235	 	 	$	500,000	 	 	$	500,000	 	 	$	500,000	 	 	$	500,000	 	 	$	500,000	 	 	$	1,134,664	 	 	$	500,000	 	 	$	500,000	 	 	$	1,257,037	 	 	$	500,000	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                  Cash
      Inflows

                	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                  Revenue
      - Ethanol (Kinergy)

                	 	 	449,709	 	 	 	949,709	 	 	 	949,709	 	 	 	1,202,965	 	 	 	1,202,965	 	 	 	1,202,965	 	 	 	1,202,965	 	 	 	1,202,965	 	 	 	1,202,965	 	 	 	1,202,965	 	 	 	1,202,965	 
	
                  Revenue
      - WDG (PAP)

                	 	 	324,745	 	 	 	324,745	 	 	 	392,569	 	 	 	392,569	 	 	 	392,569	 	 	 	392,569	 	 	 	392,569	 	 	 	392,569	 	 	 	392,569	 	 	 	392,569	 	 	 	392,569	 
	
                  Total
      Cash Inflows

                	 	 	774,454	 	 	 	1,274,454	 	 	 	1,342,278	 	 	 	1,595,534	 	 	 	1,595,534	 	 	 	1,595,534	 	 	 	1,595,534	 	 	 	1,595,534	 	 	 	1,595,534	 	 	 	1,595,534	 	 	 	1,595,534	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                  Disbursements

                	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                  Operating
      Disbursements

                	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                  Corn

                	 	 	(2,081,000	)	 	 	(1,919,700	)	 	 	-	 	 	 	(1,919,700	)	 	 	(1,919,700	)	 	 	-	 	 	 	(1,896,000	)	 	 	(1,896,000	)	 	 	-	 	 	 	(1,896,000	)	 	 	(1,896,000	)
	
                  Natural
      Gas

                	 	 	-	 	 	 	(183,144	)	 	 	-	 	 	 	-	 	 	 	-	 	 	 	(145,145	)	 	 	-	 	 	 	-	 	 	 	-	 	 	 	(163,660	)	 	 	(15,730	)
	
                  Lease
      Payments

                	 	 	-	 	 	 	(106,470	)	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	(17,745	)	 	 	-	 	 	 	-	 	 	 	-	 	 	 	(17,745	)
	
                  Insurance

                	 	 	-	 	 	 	-	 	 	 	(190,000	)	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 
	
                  Property
      Tax

                	 	 	-	 	 	 	-	 	 	 	(658,329	)	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 
	
                  Electricity

                	 	 	(18,000	)	 	 	(127,294	)	 	 	-	 	 	 	-	 	 	 	(18,000	)	 	 	(12,000	)	 	 	(89,706	)	 	 	-	 	 	 	-	 	 	 	(27,000	)	 	 	(112,294	)
	
                  Ethanol
      freight

                	 	 	(24,528	)	 	 	(24,528	)	 	 	(31,068	)	 	 	(31,068	)	 	 	(31,068	)	 	 	(31,068	)	 	 	(31,068	)	 	 	(31,068	)	 	 	(31,068	)	 	 	(31,068	)	 	 	(31,068	)
	
                  Co-product
      freight

                	 	 	(49,639	)	 	 	(49,639	)	 	 	(62,877	)	 	 	(62,877	)	 	 	(62,877	)	 	 	(62,877	)	 	 	(62,877	)	 	 	(62,877	)	 	 	(62,877	)	 	 	(62,877	)	 	 	(62,877	)
	
                  Grain
      procurement and handling w/ PAP

                	 	 	-	 	 	 	(47,972	)	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	(60,765	)	 	 	-	 	 	 	-	 	 	 	-	 	 	 	(60,765	)
	
                  One
      time shutdown costs

                	 	 	(59,325	)	 	 	(59,325	)	 	 	(59,325	)	 	 	(59,325	)	 	 	(59,325	)	 	 	(59,325	)	 	 	(59,325	)	 	 	(20,663	)	 	 	-	 	 	 	-	 	 	 	-	 
	
                  Plant
      Supplies & Maintenance

                	 	 	(216,653	)	 	 	(223,881	)	 	 	(215,041	)	 	 	(215,041	)	 	 	(215,241	)	 	 	(218,719	)	 	 	(218,791	)	 	 	(209,997	)	 	 	(210,865	)	 	 	(214,743	)	 	 	(214,615	)
	
                  Total
      Operating Disbursements

                	 	 	(2,449,145	)	 	 	(2,741,953	)	 	 	(1,216,641	)	 	 	(2,288,011	)	 	 	(2,306,211	)	 	 	(529,135	)	 	 	(2,436,277	)	 	 	(2,220,605	)	 	 	(304,810	)	 	 	(2,395,347	)	 	 	(2,411,094	)
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                  Asset
      Management Agreement

                	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                  Direct
      Reimbursement

                	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                  Payroll
      & Benefits - Plants & Plant Operations

                	 	 	(186,133	)	 	 	-	 	 	 	(199,243	)	 	 	-	 	 	 	(173,082	)	 	 	-	 	 	 	(131,351	)	 	 	(26,160	)	 	 	(173,861	)	 	 	-	 	 	 	(173,861	)
	
                  Leases

                	 	 	-	 	 	 	-	 	 	 	(101,990	)	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	(101,990	)	 	 	-	 	 	 	-	 	 	 	-	 
	
                  Other
      Direct Expenses

                	 	 	(8,300	)	 	 	 	 	 	 	(31,300	)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(31,300	)	 	 	 	 	 	 	 	 	 	 	 	 
	
                  Bankrupcy
      Preparation Fees

                	 	 	 	 	 	 	(1,020,000	)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                  Asset
      Management Fee

                	 	 	(97,500	)	 	 	-	 	 	 	(195,000	)	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	(195,000	)	 	 	-	 	 	 	-	 	 	 	-	 
	
                  Total
      Asset Management Agreement

                	 	 	(291,933	)	 	 	(1,020,000	)	 	 	(527,533	)	 	 	-	 	 	 	(173,082	)	 	 	-	 	 	 	(131,351	)	 	 	(354,451	)	 	 	(173,861	)	 	 	-	 	 	 	(173,861	)
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                  Disbursements
      Related to Prepetition Debts - First Day Motions

                	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                  Goods
      Sold in Last 20 Days

                	 	 	(118,569	)	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 
	
                  Shippers
      & Warehouseman

                	 	 	(98,500	)	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 
	
                  Prepetition
      Priority Taxes

                	 	 	(382,147	)	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 
	
                  Utility
      Deposit

                	 	 	-	 	 	 	(692,644	)	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 
	
                  Total
      Disbursements Related to Prepetition Debts

                	 	 	(599,216	)	 	 	(692,644	)	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                  Professional
      Fees & Administrative Expenses

                	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                  Legal
      Advisors - Debtor

                	 	 	(93,750	)	 	 	(93,750	)	 	 	(82,500	)	 	 	(82,500	)	 	 	(82,500	)	 	 	(82,500	)	 	 	(82,500	)	 	 	(107,500	)	 	 	(107,500	)	 	 	(107,500	)	 	 	(107,500	)
	
                  Legal
      Advisors - DIP Lenders

                	 	 	(50,000	)	 	 	(50,000	)	 	 	(50,000	)	 	 	(50,000	)	 	 	(50,000	)	 	 	(50,000	)	 	 	(50,000	)	 	 	(50,000	)	 	 	(50,000	)	 	 	(50,000	)	 	 	(50,000	)
	
                  Financial
      Advisor Debtor

                	 	 	(75,000	)	 	 	(75,000	)	 	 	(75,000	)	 	 	(75,000	)	 	 	(75,000	)	 	 	(75,000	)	 	 	(75,000	)	 	 	(100,000	)	 	 	(100,000	)	 	 	(100,000	)	 	 	(100,000	)
	
                  Financial
      Advisors - DIP Lenders

                	 	 	(50,000	)	 	 	(50,000	)	 	 	(50,000	)	 	 	(50,000	)	 	 	(50,000	)	 	 	(50,000	)	 	 	(50,000	)	 	 	(50,000	)	 	 	(50,000	)	 	 	(50,000	)	 	 	(50,000	)
	
                  Creditors
      Committee Legal & Financial Advisors

                	 	 	(52,326	)	 	 	(52,326	)	 	 	(52,326	)	 	 	(52,326	)	 	 	(52,326	)	 	 	(52,326	)	 	 	(52,326	)	 	 	(52,326	)	 	 	(52,326	)	 	 	(52,326	)	 	 	(52,326	)
	
                  Claims
      Agent

                	 	 	(50,000	)	 	 	-	 	 	 	(50,000	)	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	(50,000	)
	
                  Trustee
      Fees

                	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	(30,000	)
	
                  Total
      Professional Fees & Administrative Expenses

                	 	 	(371,076	)	 	 	(321,076	)	 	 	(359,826	)	 	 	(309,826	)	 	 	(309,826	)	 	 	(309,826	)	 	 	(309,826	)	 	 	(359,826	)	 	 	(359,826	)	 	 	(359,826	)	 	 	(439,826	)
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                  DIP
      Interest & Fees

                	 	 	(600,000	)	 	 	(52,490	)	 	 	-	 	 	 	-	 	 	 	-	 	 	 	(121,909	)	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	(151,796	)
	
                  Total
      Disbursements

                	 	 	(4,311,369	)	 	 	(4,828,162	)	 	 	(2,103,999	)	 	 	(2,597,837	)	 	 	(2,789,119	)	 	 	(960,869	)	 	 	(2,877,453	)	 	 	(2,934,881	)	 	 	(838,497	)	 	 	(2,755,173	)	 	 	(3,176,576	)
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                  DIP
      Funding

                	 	 	4,034,680	 	 	 	3,553,709	 	 	 	761,721	 	 	 	1,002,303	 	 	 	1,193,586	 	 	 	-	 	 	 	647,255	 	 	 	1,339,348	 	 	 	-	 	 	 	402,603	 	 	 	1,581,043	 
	
                  Ending
      Cash Balance

                	 	$	500,000	 	 	$	500,000	 	 	$	500,000	 	 	$	500,000	 	 	$	500,000	 	 	$	1,134,664	 	 	$	500,000	 	 	$	500,000	 	 	$	1,257,037	 	 	$	500,000	 	 	$	500,000	 


        

        


        
          Draft - Subject to
Review 6.01(n) - 1

        

        
          
            
            

          

          
            6.01(n) -
1

            
              

            

          

          
            
            

          

        

         

        
          	
                  Pacific
      Ethanol Holdco 

                  Debtor
      In Possession Financing Budget 

                  May
      18, 2009

                	
                  SCHEDULE
      6.01(n) 

                  to
      DIP Credit Agreement

                


        

        


         

        INITIAL
DIP BUDGET

        
          	 	 	AUGUST	 	 	SEPTEMBER	 	 	OCTOBER	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
      	 	
                  week
      12

                  08/03-08/07

                	 	 	
                  week
      13

                  08/10-

                  08/14

                	 	 	
                  week
      14

                  08/17-

                  08/21

                	 	 	
                  week
      15

                  08/24-

                  08/28

                	 	 	
                  week
      16

                  08/31-

                  09/04

                	 	 	
                  week
      17

                  09/07-

                  09/11

                	 	 	
                  week
      18

                  09/14-

                  09/18

                	 	 	
                  week
      19

                  09/21-

                  09/25

                	 	 	
                  week
      20

                  09/28-

                  10/02

                	 	 	
                  week
      21

                  10/05-

                  10/09

                	 	 	
                  week
      22

                  10/12-

                  10/16

                	 	 	
                  week
      23

                  10/19-

                  10/23

                	 	 	
                  week
      24

                  10/26-

                  10/30

                	 
	
                  Beginning
      Cash Balance

                	 	$	500,000	 	 	$	1,131,503	 	 	$	500,000	 	 	$	500,000	 	 	$	829,038	 	 	$	500,000	 	 	$	500,000	 	 	$	758,233	 	 	$	1,312,623	 	 	$	1,934,069	 	 	$	1,504,772	 	 	$	1,034,428	 	 	$	500,000	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                  Cash
      Inflows

                	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                  Revenue
      - Ethanol (Kinergy)

                	 	 	1,202,965	 	 	 	1,202,965	 	 	 	1,293,188	 	 	 	1,293,188	 	 	 	1,293,188	 	 	 	1,202,965	 	 	 	1,202,965	 	 	 	1,202,965	 	 	 	1,202,965	 	 	 	2,248,405	 	 	 	-	 	 	 	-	 	 	 	-	 
	
                  Revenue
      - WDG (PAP)

                	 	 	392,569	 	 	 	392,569	 	 	 	392,569	 	 	 	392,569	 	 	 	392,569	 	 	 	392,569	 	 	 	392,569	 	 	 	392,569	 	 	 	392,569	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 
	
                  Total
      Cash Inflows

                	 	 	1,595,534	 	 	 	1,595,534	 	 	 	1,685,756	 	 	 	1,685,756	 	 	 	1,685,756	 	 	 	1,595,534	 	 	 	1,595,534	 	 	 	1,595,534	 	 	 	1,595,534	 	 	 	2,248,405	 	 	 	-	 	 	 	-	 	 	 	-	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                  Disbursements

                	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                  Operating
      Disburse-ments

                	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                  Corn

                	 	 	-	 	 	 	(1,896,000	)	 	 	(1,919,700	)	 	 	-	 	 	 	(1,919,700	)	 	 	(1,919,700	)	 	 	(729,000	)	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 
	
                  Natural
      Gas

                	 	 	-	 	 	 	-	 	 	 	-	 	 	 	(179,390	)	 	 	-	 	 	 	-	 	 	 	-	 	 	 	(179,390	)	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	(179,390	)
	
                  Lease
      Payments

                	 	 	-	 	 	 	-	 	 	 	-	 	 	 	(17,745	)	 	 	-	 	 	 	-	 	 	 	-	 	 	 	(1,494	)	 	 	(16,251	)	 	 	-	 	 	 	-	 	 	 	-	 	 	 	(17,745	)
	
                  Insurance

                	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 
	
                  Property
      Tax

                	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	(1,600,000	)	 	 	-	 	 	 	-	 	 	 	(370,000	)
	
                  Electricity

                	 	 	-	 	 	 	-	 	 	 	(15,000	)	 	 	(124,294	)	 	 	-	 	 	 	-	 	 	 	-	 	 	 	(25,000	)	 	 	(112,294	)	 	 	-	 	 	 	-	 	 	 	(15,000	)	 	 	(124,794	)
	
                  Ethanol
      freight

                	 	 	(31,068	)	 	 	(33,398	)	 	 	(33,398	)	 	 	(33,398	)	 	 	(31,068	)	 	 	(31,068	)	 	 	(31,068	)	 	 	(31,068	)	 	 	(58,068	)	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 
	
                  Co-product
      freight

                	 	 	(62,877	)	 	 	(62,877	)	 	 	(62,877	)	 	 	(62,877	)	 	 	(62,877	)	 	 	(62,877	)	 	 	(62,877	)	 	 	(62,877	)	 	 	(62,877	)	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 
	
                  Grain
      procure-ment and handling w/ PAP

                	 	 	-	 	 	 	-	 	 	 	-	 	 	 	(60,765	)	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	(60,765	)	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 
	
                  One
      time shutdown costs

                	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	(17,442	)	 	 	(17,442	)	 	 	(17,442	)	 	 	(17,442	)
	
                  Plant
      Supplies & Main-tenance

                	 	 	(205,810	)	 	 	(206,010	)	 	 	(206,210	)	 	 	(213,438	)	 	 	(204,530	)	 	 	(204,530	)	 	 	(204,530	)	 	 	(208,408	)	 	 	(208,280	)	 	 	(143,077	)	 	 	(143,077	)	 	 	(143,277	)	 	 	(150,505	)
	
                  Total
      Operating Disburse-ments

                	 	 	(299,755	)	 	 	(2,198,285	)	 	 	(2,237,185	)	 	 	(691,907	)	 	 	(2,218,175	)	 	 	(2,218,175	)	 	 	(1,027,475	)	 	 	(508,236	)	 	 	(518,534	)	 	 	(1,760,519	)	 	 	(160,519	)	 	 	(175,719	)	 	 	(859,875	)
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                  Asset
      Management Agreement

                	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                  Direct
      Reimburse-ment

                	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                  Payroll
      & Benefits - Plants & Plant Operat-ions

                	 	 	(26,160	)	 	 	(173,082	)	 	 	-	 	 	 	(173,082	)	 	 	(26,160	)	 	 	(173,082	)	 	 	-	 	 	 	(173,082	)	 	 	78,481	 	 	 	(279,067	)	 	 	-	 	 	 	(252,907	)	 	 	-	 
	
                  Leases

                	 	 	(101,990	)	 	 	-	 	 	 	-	 	 	 	-	 	 	 	(101,990	)	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	(101,990	)	 	 	-	 	 	 	-	 	 	 	-	 
	
                  Other
      Direct Expenses

                	 	 	(31,300	)	 	 	-	 	 	 	-	 	 	 	-	 	 	 	(31,300	)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(31,300	)	 	 	 	 	 	 	 	 	 	 	 	 
	
                  Bankrupcy
      Prepara-tion Fees

                	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                  Asset
      Manage-ment Fee

                	 	 	(195,000	)	 	 	-	 	 	 	-	 	 	 	-	 	 	 	(195,000	)	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	(195,000	)	 	 	-	 	 	 	-	 	 	 	-	 
	
                  Total
      Asset Management Agreement

                	 	 	(354,451	)	 	 	(173,082	)	 	 	-	 	 	 	(173,082	)	 	 	(354,451	)	 	 	(173,082	)	 	 	-	 	 	 	(173,082	)	 	 	78,481	 	 	 	(607,358	)	 	 	-	 	 	 	(252,907	)	 	 	-	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                  Disbursements
      Related to Prepetition Debts - First Day M

                	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                  Goods
      Sold in Last 20 Days

                	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 
	
                  Shippers
      & Ware-house-man

                	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 
	
                  Prepetition
      Priority Taxes

                	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 
	
                  Utility
      Deposit

                	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                  Total
      Disburse-ments Related to Prepetition Debts

                	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                  Professional
      Fees & Adminis-trative Expenses

                	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                  Legal
      Advisors - Debtor

                	 	 	(82,500	)	 	 	(82,500	)	 	 	(82,500	)	 	 	(82,500	)	 	 	(82,500	)	 	 	(82,500	)	 	 	(82,500	)	 	 	(82,500	)	 	 	(82,500	)	 	 	(82,500	)	 	 	(82,500	)	 	 	(82,500	)	 	 	(82,500	)
	
                  Legal
      Advisors - DIP Lenders

                	 	 	(50,000	)	 	 	(50,000	)	 	 	(50,000	)	 	 	(50,000	)	 	 	(50,000	)	 	 	(50,000	)	 	 	(50,000	)	 	 	(50,000	)	 	 	(50,000	)	 	 	(50,000	)	 	 	(50,000	)	 	 	(50,000	)	 	 	(50,000	)
	
                  Financial
      Advisor Debtor

                	 	 	(75,000	)	 	 	(75,000	)	 	 	(75,000	)	 	 	(75,000	)	 	 	(75,000	)	 	 	(75,000	)	 	 	(75,000	)	 	 	(75,000	)	 	 	(75,000	)	 	 	(75,000	)	 	 	(75,000	)	 	 	(75,000	)	 	 	(75,000	)
	
                  Financial
      Advisors - DIP Lenders

                	 	 	(50,000	)	 	 	(50,000	)	 	 	(50,000	)	 	 	(50,000	)	 	 	(50,000	)	 	 	(50,000	)	 	 	(50,000	)	 	 	(50,000	)	 	 	(50,000	)	 	 	(50,000	)	 	 	(50,000	)	 	 	(50,000	)	 	 	(50,000	)
	
                  Creditors
      Comm-ittee Legal & Financial Advisors

                	 	 	(52,326	)	 	 	(52,326	)	 	 	(52,326	)	 	 	(52,326	)	 	 	(52,326	)	 	 	(52,326	)	 	 	(52,326	)	 	 	(52,326	)	 	 	(52,326	)	 	 	(52,326	)	 	 	(52,326	)	 	 	(52,326	)	 	 	(52,326	)
	
                  Claims
      Agent

                	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	(50,000	)	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 
	
                  Trustee
      Fees

                	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	(20,000	)	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 
	
                  Total
      Profession-al Fees & Admini-strative Expenses

                	 	 	(309,826	)	 	 	(309,826	)	 	 	(309,826	)	 	 	(309,826	)	 	 	(309,826	)	 	 	(309,826	)	 	 	(309,826	)	 	 	(359,826	)	 	 	(329,826	)	 	 	(309,826	)	 	 	(309,826	)	 	 	(309,826	)	 	 	(309,826	)
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                  DIP
      Interest & Fees

                	 	 	-	 	 	 	-	 	 	 	-	 	 	 	(181,903	)	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	(204,208	)	 	 	-	 	 	 	-	 	 	 	-	 	 	 	(210,875	)
	
                  Total
      Disburse-ments

                	 	 	(964,031	)	 	 	(2,681,193	)	 	 	(2,547,011	)	 	 	(1,356,718	)	 	 	(2,882,451	)	 	 	(2,701,083	)	 	 	(1,337,300	)	 	 	(1,041,144	)	 	 	(974,087	)	 	 	(2,677,702	)	 	 	(470,345	)	 	 	(738,452	)	 	 	(1,380,576	)
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                  DIP
      Funding

                	 	 	-	 	 	 	454,157	 	 	 	861,255	 	 	 	-	 	 	 	867,656	 	 	 	1,105,549	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	204,024	 	 	 	1,380,576	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                  Ending
      Cash Balance

                	 	$	1,131,503	 	 	$	500,000	 	 	$	500,000	 	 	$	829,038	 	 	$	500,000	 	 	$	500,000	 	 	$	758,233	 	 	$	1,312,623	 	 	$	1,934,069	 	 	$	1,504,772	 	 	$	1,034,428	 	 	$	500,000	 	 	$	500,000	 


        

        


        Draft - Subject to
Review

        
          
            
               


            

            
              6.01(n) -
2

              
                

              

            

            
               


            

          

        

        


        SCHEDULE
7.01(h) 

        to DIP Credit
Agreement

         

        INSURANCE

         

        Note: the
requirements of this Insurance Schedule apply to each Plant (and the Borrower
that owns such Plant) from and after the date of the initial Funding Notice with
respect to such Plant, and apply to Pacific Holding from and after the date of
the initial Funding Notice. Notwithstanding the above, the report of the
Insurance Consultant delivered on the Closing Date shall address these
requirements of this Insurance Schedule as they apply to each Plant and each
Borrower.

         

        1.            
GENERAL PROVISIONS

         

        1.1           The
Borrowers shall at all times carry and maintain or cause to be carried and
maintained,
at their own expense, the minimum insurance coverage set forth in this Schedule 7.01(h). The
terms and conditions of all insurance policies (including the amount,
scope of
coverage, deductibles, and self-insured retentions) shall be reasonably
acceptable to the Administrative Agent (in consultation with the Insurance
Consultant) in all respects as of the date of the initial Funding. After the
date of the initial Funding and until the Discharge Date, the terms and
conditions of all insurance policies (including the amount, scope of coverage,
deductibles, and self-insured retentions) shall be acceptable in all respects in
the reasonable judgment
of the Administrative Agent (acting in consultation with the Insurance
Consultant), and the Administrative Agent (acting in consultation with the
Insurance Consultant) may require that such terms be modified if (i) a state of
facts or circumstances exists with respect to any Plant or the Project that was
not foreseen by the Administrative Agent on the date of this Agreement and
which, in the reasonable judgment of the Administrative Agent (acting in
consultation with the Insurance Consultant), renders such coverage inadequate,
and (ii) the requested coverage is available on commercially reasonable terms
taking into account the DIP Budget. All insurance carried pursuant to this Schedule 7.01(h)
shall conform to the relevant provisions of the respective Project Documents and
be with insurance companies that are rated “A-, X” or better by Best’s Insurance
Guide and Key Ratings, or other insurance companies of recognized responsibility
satisfactory to the Administrative Agent (acting in consultation with the
Insurance Consultant). None of the Agents or the other Senior Secured Parties
shall have any obligation or liability for premiums, commissions, assessments or
calls in connection with any insurance policy required under this Schedule 7.01
(h).

         

        Capitalized
terms used in this Schedule 7.01(h) not
otherwise defined herein shall have the meanings set forth in this Agreement, or
if not defined therein, as such terms are used in the common practice of the
insurance industry.

         

        The
insurance carried in accordance with this Schedule 7.01(h)
shall be endorsed as follows: The Collateral Agent shall be sole loss payee with
respect to all First Party policies using a Standard Lenders Loss Payable Clause
reasonably acceptable to the Administrative Agent (acting in consultation with
the Insurance Consultant). The Administrative Agent, in its capacity and on
behalf of the Lenders, and the Collateral Agent, on behalf of the Senior
Secured

         

        


        
          
            
               


            

            
              
              

              
                

              

            

            
               


            

          

        

        


        Parties,
shall be additional insureds with respect to all of the Borrowers’ insurance
(where legally allowed);

         

        (a)            The
insurance polices provided by the Borrowers shall allow that theinterest
of the Administrative Agent, Collateral Agent and the other Senior Secured
Parties shall not be invalidated by any action or inaction of any of the
Borrowers or the Insureds and shall insure the Administrative Agent, Collateral
Agent and the other Senior Secured Parties regardless of any breach or violation
by the any of the Borrowers or the Insured of any warranties, declarations or
conditions in such policies or any foreclosure or change in ownership of any
Plant or the Project;

         

        (b)            The
insurer thereunder shall waive all rights or subrogation against the
Administrative
Agent, Collateral Agent and the other Senior Secured Parties and their
respective officers, employees, agents, successors and assigns and shall waive
any right of setoff and counterclaim and any other right to deduction whether by
attachment or otherwise;

         

        (c)            Such
insurance shall be primary without right of contribution of any other
insurance
carried by or on behalf of any of Administrative Agent, Collateral Agent and the
other Senior Secured Parties with respect to its interest as such in the Project
and each policy insuring against liability to third parties shall contain a
severability of interests or cross liability provision; and

         

        (d)            Any
insurance carried under this Schedule 7.01(h) that
is written to cover more than
one insured shall provide that all terms, conditions, insuring agreements and
endorsements, with the exception of limits of liability (which shall be
applicable to all insureds as a group) and liability for premiums (which shall
be solely a liability of the Borrowers), shall operate in the same manner as if
there were a separate policy covering such insured.

         

        1.2           
Adjustment of
Losses.

         

        (a)            The
loss, if any, under any insurance required to be carried hereunder shall
be
adjusted with the insurance companies or otherwise collected, including the
filing in a timely manner of appropriate proceedings, by the Borrowers, subject
to the reasonable approval of the Administrative Agent (acting in consultation
with the Insurance Consultant) as it pertains to losses under the party policies
only. In addition, the Borrowers shall take all other steps necessary or
reasonably requested by the Administrative Agent to collect from insurers any
loss covered by any of the insurance policies herein. All such policies shall
provide that the loss, if any, and coverage afforded under such insurance shall
be adjusted and paid as provided in this Schedule
7.01(h).

         

        (b)            The
Borrowers shall promptly notify the Administrative Agent of any property
damage loss covered by any insurance. The Borrowers shall cooperate and consult
with the Administrative Agent in all matters pertaining to the settlement or
adjustment of any and all claims and demands for damages on account of any
taking or condemnation of any Plant or the Project or pertaining to the
settlement, compromising or arbitration of any claim on account of any damage or
destruction of any Plant or the Project or any portion thereof. Without the
prior written consent of the Administrative Agent (acting in consultation with
the Insurance

         

        


        
          
            
               


            

            
              7.01(h) -
2

              
                

              

            

            
               


            

          

        

        


        Consultant),
no Borrower will settle, or consent to the settlement of, any proceeding arising
out of any damage, destruction or condemnation of any Plant or the Project or
any portion thereof.

         

        1.3           
Application of
Payments. All payments with respect to the insurance policies
required
by this Schedule
7.01(h) shall promptly be deposited in the Revenue Account for
application in accordance with the provisions of this Agreement.

         

        1.4           
Evidence of
Insurance. On the Closing Date, on an annual basis no more than ten
(10) days
following each policy anniversary, and otherwise as required under the Credit
Agreement, the Borrowers shall furnish to the Administrative Agent with approved
certification of all required insurance. An authorized representative of each
insurer shall execute such certificates. Such certificates shall identify
underwriters, the type of insurance, the insurance limits, the risks covered
thereby and the policy term, and the insurance broker or insurance carrier
providing such certificates shall specifically state (either in such certificate
or otherwise) that the special provisions enumerated for such insurance herein
are provided by such insurance. The Borrowers shall certify that the premiums on
all such policies have been paid in full for the current year or will be paid
when due. Upon request, the Borrowers will promptly furnish to the
Administrative Agent copies of all insurance policies, binders and cover notes
or other evidence of such insurance relating to the Project.

         

        1.5           
No Duty to
Verify. No provision of this Schedule 7.01(h) or
any provision of any Transaction
Document shall impose on the Administrative Agent, Collateral Agent or any
Senior Secured Party any duty or obligation to verify the existence or adequacy
of the insurance coverage maintained by the Borrowers, nor shall the
Administrative Agent, Collateral Agent or any Senior Secured Party be
responsible for any representations or warranties made by or on behalf of any
Borrower to any insurance company or underwriter.

         

        2. OPERATING
PERIOD INSURANCE

         

        2.1           
Coverage. The
following coverages shall be placed into effect for the benefit of each
Plant, including grain elevators and shall be maintained in effect at all times
until the Discharge Date.

         

        (a) Commercial
General Liability.

         

        Commercial
general liability insurance for such Plant, written on “occurrence” policy
forms, including coverage for premises/operations, products/completed
operations, broad form property damage, blanket contractual liability, and
personal injury, with no exclusions for explosion, collapse and underground
perils, and fire with primary coverage limits of no less than one million
Dollars ($1,000,000) per occurrence and two million Dollars ($2,000,000) in the
annual aggregate for injuries or death to one or more persons or damage to
property resulting from any one occurrence, and a products and completed
operations liability aggregate limit of not less than one million Dollars
($1,000,000). The commercial general liability policy shall also include a
severability of interest clause and a cross liability clause in the event more
than one entity is “named insured” under the liability policy. Deductibles in
excess of two hundred fifty thousand Dollars ($250,000) shall be subject to
review and reasonable approval by the Administrative Agent (in consultation with
the Insurance Consultant).

         

         

        
          
            
               


            

            
              7.01(h) -
3

              
                

              

            

            
               


            

          

        

        


        (b)            Automobile
Liability.

         

        Automobile
liability insurance, including coverage for owned, non-owned and hired
automobiles for both bodily injury and property damage in accordance with
statutory legal requirements, with combined single limits of no less than one
million Dollars ($1,000,000) per accident with respect to bodily injury,
property damage or death. Automobile insurance shall include the Motor Carrier
Act Endorsement encompassing Hazardous Materials Cleanup (MCS­90), if
applicable.

         

        (c)            Workers
Compensation.

         

        Workers
compensation insurance to statutory limits and employer’s liability with a limit
of not less than one million Dollars ($1,000,000) per occurrence and in the
aggregate such other forms of insurance required by law with respect to any
Plant or the Project, providing statutory benefits and covering loss resulting
from injury, sickness, disability or death of employees (if any) of any
Borrower. To the extent applicable, insurance shall cover Jones Act, Longshore
and Harbor Workers Act and Continental Shelf Land Act.

         

        (d)            Property
/ Machinery Breakdown.

         

        Property
“all risk” insurance, as such term is used in the common practice of the
insurance industry on the date of this Agreement, including machinery breakdown,
the perils of flood and earthquake, strike, vandalism and malicious mischief
subject to terms that are consistent with current industry practice insuring all
real and personal property of the Project at each Plant for an amount of not
less than full replacement cost of such Plant. Sub limits are permitted as
respects to the following perils: (i) debris removal (the greater of $5,000,000
or 25% of loss), (ii) expediting or extra expense ($5,000,000), (iii) increased
costs due to orders by law and demolition costs of undamaged portion due to
enforcement of by law ($2,000,000), flood (25% of replacement cost) and
earthquake (25% of replacement cost) and (iv) such other coverages customarily
sub-limited in reasonable amounts consistent with current industry practice with
respect to similar risks and reasonably acceptable to the Administrative Agent
(acting in consultation with the Insurance Consultant).

         

        Such
policy shall include: (i) an automatic reinstatement of limits following each
loss (except for the perils of earthquake and flood) and (ii) a replacement cost
endorsement with no deduction for depreciation. Unless provided under the all
risk policy, boiler and machinery coverage (including consequence of design,
workmanship or material defect) on a “comprehensive” basis including breakdown
and repair on a replacement cost basis with limits not less than the full
replacement cost of the insured objects. In the event all risk property cover
and the boiler and machinery cover is not written in the same policy, each
policy shall contain a joint loss agreement.

         

        All such
policies may have deductibles of not greater than two hundred fifty thousand
Dollars ($250,000) and two percent (2%) of values at risk, five percent (5%) for
California Earthquake for natural hazard perils (such as flood and
earthquake).

         

        (e)            Business
Interruption.

         

         

        
          
            
               


            

            
              7.01(h) -
4

              
                

              

            

            
               


            

          

        

        


        Borrowers
shall also maintain or caused to be maintained, with respect to each Plant,
business interruption insurance on all “all risk” basis (as such term is used in
common practice of the insurance industry on the date of this Agreement),
including machinery breakage, in an amount necessary to satisfy policy
coinsurance conditions, but with limits not less than the equivalent of twelve
(12) months projected scheduled debt service, continuing expenses and an amount
equivalent to the principal payments necessary for the Borrowers to reach the
Target Balance Amount at the end of the twelve (12)-month period as indicated in
this Agreement or in other amounts reasonably acceptable to the Administrative
Agent (acting in consultation with the Insurance Consultant). The deductible or
waiting period shall not exceed thirty (30) days. Borrowers shall also maintain
or cause to be maintained contingent business interruption as respects the
suppliers and vendors in an amount of not less than six (6) months projected
scheduled Debt Service, continuing expenses and replacement ethanol extra
expense in amounts acceptable to the Lenders, where the exposure
exists.

         

        (f)            Umbrella
or Excess.

         

        Umbrella
or excess liability insurance of not less than twenty million Dollars
($20,000,000) per occurrence and annual aggregate during operations. Such
coverages shall be on a per occurrence or claims made basis and over and above
coverage provided by the policies described in Sections 3.1(a), (b)
and, with respect to employer’s liability, (c) of this Schedule  7.01(h),
whose limits shall apply toward the twenty million Dollars ($20,000,000) limit
set forth in this Section 2.1(f). If
the policy or policies provided under this Section 2.1(f)
contain(s) aggregate limits applying to other operations other than the Project,
and such limits are diminished below fifteen million Dollars ($15,000,000) by
any incident, occurrence, claim, settlement or judgment against such insurance
that has caused the insurer to establish a reserve, Borrowers, within five (5)
Business Days after obtaining knowledge of such event shall inform the
Administrative Agent, and within thirty (30) Business Days after the occurrence
of such event shall purchase an additional umbrella/excess liability insurance
policy satisfying the requirements of this Section
2.1(f).

         

        (g)            Aircraft
Liability.

         

        Aircraft
liability, (to the extent exposure exists) in an amount not less than ten
million Dollars ($10,000,000) for all owned, non-owned and hired aircraft, fixed
wing or rotary, used in connection with the operation of the
Project.

         

        (h) Pollution
Legal Liability.

         

        Including
Onsite Cleanup and sudden and accidental pollution legal liability insurance on
a named perils basis with a limit commensurate (in the reasonable opinion of the
Insurance Consultant) with industry practice for like projects, sufficient to
meet contractual requirements but not less than three million Dollars
($3,000,000). Such coverage can be included in the commercial general liability
and umbrella or excess liability covers or provided separately. Claims made
coverage forms and deductibles of up to two hundred fifty thousand Dollars
($250,000) are acceptable.

         

         

        
          
            
               


            

            
              7.01(h) -
5

              
                

              

            

            
               


            

          

        

        


        3.          
  LEASEHOLD INTEREST INSURE

         

        Unless
otherwise covered under the operational Property All Risk Insurance described
above or otherwise maintained by Pacific Ethanol, until the Discharge Date, each
Borrower shall also insure, or cause to be insured its leasehold interests in
the Leased Premises and provide Property Damage, Business Interruption/Extra
Expense and Liability insurance in amounts reasonably satisfactory to the
Administrative Agent (acting in consultation with the Insurance
Consultant).

         

        4.            
DIRECTORS AND OFFICERS INSURANCE (to the extent exposure exists)

         

        Until the
Discharge Date, the Borrowers shall maintain, or cause to be maintained,
Directors and Officers Insurance (including Employment Practices Liability) with
limits in accordance with industry practice.

         

        5.             GENERAL
CONDITIONS APPLYING TO ALL INSURANCE

         

        5.1           
The Borrowers shall promptly notify the Administrative Agent of any loss in
excess of
two hundred fifty thousand Dollars ($250,000) covered by any insurance
maintained pursuant to Sections 2.1(f), (g)
and (h) and Sections
3.1(e) and (f) of this Schedule
7.01(h).

         

        5.2           
All policies of insurance required to be maintained pursuant to Sections 2.1(d)
and (e)
of this Schedule
7.01(h), shall provide that the proceeds of such policies shall be
payable solely to the Collateral Agent pursuant to a standard first mortgage
endorsement substantially equivalent to the Lenders Loss Payable Endorsement
438BFU or New York Standard Mortgage Endorsement without contribution. All
policies (where allowed by law) shall insure the interests of the Senior Secured
Parties regardless of any breach or violation by any Borrower of warranties,
declarations or conditions contained in such policies, any action or inaction of
any Borrower or any other Person, or any foreclosure relating to any Plant or
any change in ownership of all or any portion of any Plant (the foregoing may be
accomplished by the use of the Lender Loss Payable Endorsement 438BFU required
above).

         

        5.3           
A loss under any insurance required to be carried under Sections 2.1(d) and
(e) of this
Schedule
7.01(h), shall be adjusted with the insurance companies, including the
filing in a timely manner of appropriate proceedings, by the Borrowers, together
with the Administrative Agent. In addition the Borrowers may, in their
reasonable judgment, consent to the settlement of any loss; provided that in the
event that the amount of any such loss exceeds two hundred fifty thousand
Dollars ($250,000) the terms of such settlement are concurred with by the
Administrative Agent (acting in consultation with the Insurance
Consultant).

         

        5.4           
All policies of insurance required to be maintained pursuant to this Schedule 7.01(h) shall be
endorsed so that if at any time any such policy should be cancelled, or coverage
under any such policy should be reduced, such cancellation or reduction in
coverage shall not be effective for thirty (30) days following delivery of
written notice thereof to the Administrative Agent, except for cancellation or
reduction in coverage due to non-payment of premium, which shall not be for
effective for ten (10) days following delivery of written notice thereof to the
Administrative Agent.

         

        


        
          
            
               


            

            
              7.01(h) -
6

              
                

              

            

            
               


            

          

        

        


        6.         
   REPORT

         

        6.1           
On the initial Funding Date and annually thereafter, the Borrowers shall furnish
the
Administrative Agent with a report of an independent insurance broker, signed by
an officer of such broker, stating that all premiums then due have been paid and
that, in the opinion of such broker, the insurance then carried or to be renewed
is in accordance with the terms of this Schedule 7.01(h). In
addition the Borrowers will advise the Administrative Agent in writing promptly
of any default in the payment of any premium and of any other act or omission on
the part of any Borrower that may invalidate or render unenforceable, in whole
or in part, any insurance being maintained by any Borrower pursuant to this
Schedule
7.01(h).

         

        7.            “CLAIMS
MADE” POLICIES FOR CERTAIN TYPES OF INSURANCE

         

        7.1           
If any liability insurance required under the provisions of this Schedule 7.01(h) is
allowed
to be written on a “claims made” basis, then such insurance shall include the
following:

         

        (a)            The
retroactive date (as such term is specified in each of such policies)
shall be
no later than the commercial operations date for the relevant
Plant.

         

        (b)            Each
time any policy written on a “claims made” basis is not renewed or the
retroactive date of such policy is to be changed, the Borrowers shall obtain or
cause to be obtained for each such policy or policies the broadest extended
reporting period coverage, or “tail”, reasonably available in the commercial
insurance market for each such policy or policies.

         

        8. UNAVAILABILITY
OF INSURANCE

         

        If any
insurance (including the limits or deductibles thereof) hereby required to be
maintained is not reasonably available and commercially feasible in the
commercial insurance market, the Administrative Agent (acting in consultation
with the Insurance Consultant) shall not unreasonably withhold their agreement
to waive such requirement to the extent the maintenance thereof is not so
available; provided,
however, that the Borrowers shall first request any such waiver in
writing to the Administrative Agent, which request shall be accompanied by a
written report prepared by an insurance broker of nationally recognized
standing, certifying that such insurance required is not reasonably available
and commercially feasible (and, in any case where the required amount is not so
available, certifying as to the maximum amount which is so available) and
explaining in detail the basis for such conclusions. If after reviewing such
evidence with the Insurance Consultant, the Administrative Agent concurs with
such report, the Borrowers shall not be required to maintain such insurance
until such time as such insurance is again available on commercially reasonable
terms. At any time after the granting of any such waiver, but not more often
than once a year, the Administrative Agent or the Lenders may request, and the
Borrowers shall furnish to the Administrative Agent within fifteen (15) days
after such request, supplemental reports reasonably acceptable to the
Administrative Agent from such independent insurance broker or the Insurance
Consultant updating their prior reports and reaffirming such conclusion. It is
understood that the failure of the Borrowers to timely furnish any such
supplemental report shall be conclusive evidence that such waiver is no longer
effective because such condition no longer exists, but that such failure is not
the only way to establish such non-existence. For the purposes of this Section
8, insurance will be considered “not

         

         

        
          
            
               


            

            
              7.01(h) -
7

              
                

              

            

            
               


            

          

        

         

         

        reasonably
available and commercially feasible” when it is obtainable only at excessive
costs that are not justified in terms of the risk to be insured and is generally
not being carried by or applicable to projects or operations similar to the
relevant Plant because of such excessive costs.

         

        9.         
EROSION OF LIMIT

         

        In the
event that the insurance program evidenced for the benefit of any Plant is being
provided through an insurance policy that also insures other assets owned by the
Borrowers and the limits or sub limits are eroded or exhausted due to a loss at
another Plant or location the Borrowers will immediately cause limits to be
reinstated (where applicable) or replaced for the benefit of such
Plant.

         

         

         

         

        
          
            
               


            

            
              7.01(h) -
8

              
                

              

            

            
               


            

          

        

        


        SCHEDULE
11.12

         to DIP Credit
Agreement

         

        NOTICE
INFORMATION

         

        I.
BORROWERS

         

        PACIFIC ETHANOL HOLDING CO. LLC


        400
Capitol Mall, Suite 2060

        Sacramento,
California 95814

        Attn:
General Counsel and Chief Operating Officer 

        Telephone:
(916) 403-2130

        Facsimile:
(916) 446-3937

         

        and a
copy to:

         

        Cooley
Godward Kronish LLC

        1114
Avenue of the Americas

        New York,
NY 10036

        
          
            	
                    Attn:
      Richard S. Kanowitz, Esq.

                  	
                    and

                  	
                    Attn:
      Lawrence C. Gottlieb, Esq.

                  
	
                    Telephone:
      (212) 479-6000

                  	 
      	
                    Telephone:
      (212) 479-6000

                  
	
                    Facsimile:
      (212) 479-6275

                  	 
      	
                    Facsimile:
      (212) 479-6275

                  


          

        

        
        

        PACIFIC
ETHANOL MADERA LLC

        400
Capitol Mall, Suite 2060

        Sacramento,
California 95814

        Attn:
General Counsel and Chief Operating Officer 

        Telephone:
(916) 403-2130

        Facsimile:
(916) 446-3937

         

        and a
copy to:

         

        Cooley
Godward Kronish LLC

        1114
Avenue of the Americas

        New York,
NY 10036

        
          
            
              	
                      Attn:
      Richard S. Kanowitz, Esq

                    	
                      and

                    	
                      Attn:
      Lawrence C. Gottlieb, Esq.

                    
	
                      Telephone:
      (212) 479-6000

                    	 
      	
                      Telephone:
      (212) 479-6000

                    
	
                      Facsimile:
      (212) 479-6275

                    	 
      	
                      Facsimile:
      (212) 479-6275

                    


            

          

        

        
        

         

        PACIFIC ETHANOL COLUMBIA, LLC


        400
Capitol Mall, Suite 2060

        Sacramento,
California 95814

        Attn:
General Counsel and Chief Operating Officer 

        Telephone:
(916) 403-2130

        Facsimile:
(916) 446-3937

         

        and a
copy to:

         

        
          
            
               


            

            
              11.12 -
1

              
                

              

            

            
               


            

          

        

        


        Cooley
Godward Kronish LLC

        1114
Avenue of the Americas

        New York,
NY 10036

        
          
            	
                    Attn:
      Richard S. Kanowitz, Esq

                  	
                    and

                  	
                    Attn:
      Lawrence C. Gottlieb, Esq.

                  
	
                    Telephone:
      (212) 479-6000

                  	 
      	
                    Telephone:
      (212) 479-6000

                  
	
                    Facsimile:
      (212) 479-6275

                  	 
      	
                    Facsimile:
      (212) 479-6275

                  


          

        

         

        PACIFIC ETHANOL STOCKTON, LLC


        400
Capitol Mall, Suite 2060

        Sacramento,
California 95814

        Attn:
General Counsel and Chief Operating Officer 

        Telephone:
(916) 403-2130

        Facsimile:
(916) 446-3937

         

        and a
copy to:

         

        Cooley
Godward Kronish LLC

        1114
Avenue of the Americas

        New York,
NY 10036

        
          
            	
                    Attn:
      Richard S. Kanowitz, Esq

                  	
                    and

                  	
                    Attn:
      Lawrence C. Gottlieb, Esq.

                  
	
                    Telephone:
      (212) 479-6000

                  	 
      	
                    Telephone:
      (212) 479-6000

                  
	
                    Facsimile:
      (212) 479-6275

                  	 
      	
                    Facsimile:
      (212) 479-6275

                  


          

        

         

        PACIFIC ETHANOL MAGIC VALLEY, LLC


        400
Capitol Mall, Suite 2060

        Sacramento,
California 95814

        Attn:
General Counsel and Chief Operating Officer 

        Telephone:
(916) 403-2130

        Facsimile:
(916) 446-3937

         

        and a
copy to:

         

        Cooley
Godward Kronish LLC

        1114
Avenue of the Americas

        New York,
NY 10036

        
          
            	
                    Attn:
      Richard S. Kanowitz, Esq

                  	
                    and

                  	
                    Attn:
      Lawrence C. Gottlieb, Esq.

                  
	
                    Telephone:
      (212) 479-6000

                  	 
      	
                    Telephone:
      (212) 479-6000

                  
	
                    Facsimile:
      (212) 479-6275

                  	 
      	
                    Facsimile:
      (212) 479-6275

                  


          

        

         

         

        
          
            
               


            

            
              11.12 -
2

              
                

              

            

            
               


            

          

        

        


        
          II.
BORROWER AGENT

           

          PACIFIC ETHANOL HOLDING CO. LLC


          400
Capitol Mall, Suite 2060

          Sacramento,
California 95814

          Attn:
General Counsel and Chief Operating Officer 

          Telephone:
(916) 403-2130

          Facsimile: (916) 446-3937 

           

          and a copy to:

           

        

        Cooley
Godward Kronish LLC

        1114
Avenue of the Americas

        New York,
NY 10036

        
          
            	
                    Attn:
      Richard S. Kanowitz, Esq

                  	
                    and

                  	
                    Attn:
      Lawrence C. Gottlieb, Esq.

                  
	
                    Telephone:
      (212) 479-6000

                  	 
      	
                    Telephone:
      (212) 479-6000

                  
	
                    Facsimile:
      (212) 479-6275

                  	 
      	
                    Facsimile:
      (212) 479-6275

                  


          

        

        
        

         

        III. ADMINISTRATIVE
AGENT

         

        WESTLB
AG, NEW YORK BRANCH

        1211
Avenue of the Americas

        New York,
NY 10036

        Attention:
Yolette Salnave / Andrea Bailey

        Telephone:
(212) 852-5994 / (212) 597-1158

        Facsimile:
(212) 302-7946

        E-mail
Address: NYC—Agency—Services@WestLB.com

         

        IV. COLLATERAL
AGENT

         

        WESTLB
AG, NEW YORK BRANCH

        1211
Avenue of the Americas 

        New York,
NY 10036

        Attention:
Richard Garbarino 

        Telephone:
(212) 852-5994 

        Facsimile:
(212) 597-1490

         

         

        
          
            
            

          

          
            11.12 -
3

            
              

            

          

          
            
            

          

        

         

        V.
ACCOUNTS BANK

         

        AMARILLO
NATIONAL BANK

        P.O. Box
1

        Amarillo,
Texas 79105

        Attn:
Craig Sanders, Executive Vice President 

        Telephone:
(806) 378-8244

        Facsimile:
(806) 345-1663

        E-mail
Address: craig.sanders@anb.com

         

        For
overnight delivery:

         

        Amarillo
National Bank 

        410 S.
Taylor

        Amarillo,
Texas 79101

        Attn:
Craig Sanders, Executive Vice President 

        Telephone:
(806) 378-8244

        Facsimile:
(806) 345-1663

        
          E-mail
Address: craig.sanders@anb.com

        

        


        
          
            
               


            

            
              11.12 -
4

              
                

              

            

            
               


            

          

        

        
EXHIBIT A


          “Accounts” has the
meaning set forth in Section 9-102 of the UCC.

           

          “Accounts Bank” means
Amarillo National Bank, not in its individual capacity, but solely as depositary
bank, bank and securities intermediary hereunder, and each other Person that
may, from time to time, be appointed as successor Accounts Bank pursuant to
Section 10.06
(Resignation
or Removal of Agent).

           

          “Accounts Property”
means any funds, instruments, securities, financial assets or other assets from
time to time held in any of the Project Accounts or credited thereto or
otherwise in possession or control of the Accounts Bank pursuant to this
Agreement.

           

          “Additional Project
Document” means each contract, agreement, letter agreement or other
instrument to which any Borrower becomes a party after the date hereof, other
than (a) any document which does not extend beyond the six-month anniversary of
the date hereof (i) under which any Borrower would not reasonably be expected to
have obligations or liabilities in the aggregate in excess of five hundred
thousand Dollars ($500,000), or be entitled to receive revenues in the aggregate
in excess of one million Dollars ($1,000,000), in either case in value during
such period and (ii) a termination of which would not reasonably be expected to
result in a Material Adverse Effect, or (b) any agreement for the sale of all or
substantially all the assets of the Borrowers entered into in connection with
the sale process set forth in Section 7.02(f) (Sale of
Substantially All Assets); provided, that for
the purposes of this definition, (i) (A) purchase orders under existing Project
Documents relating to the sale of Products or the purchase of corn and (B)
purchases of natural gas, water or electricity pursuant to standard user
agreements, shall not constitute Additional Project Documents and (ii) any
series of related transactions (other than transactions, including hedging
transactions, relating to the sale of Products or the purchase of corn and
natural gas) shall be considered as one transaction, and all contracts,
agreements, letter agreements or other instruments in respect of such
transactions shall be considered as one contract, agreement, letter agreement or
other instrument, as applicable.

           

          “Administrative Agent”
means WestLB, in its capacity as administrative agent for the Lenders hereunder,
and includes each other Person that may, from time to time, be appointed as
successor Administrative Agent pursuant to Section 10.06
(Resignation
or Removal of Agent).

           

          “Affiliate” of any
Person means any other Person that, directly or indirectly, controls, is
controlled by or is under common control with such Person.  A Person
shall be deemed to be “controlled by” any other Person if such other Person (a)
possesses, directly or indirectly, power to direct or cause the direction of the
management and policies of such Person whether by contract or otherwise or (b)
owns at least ten percent (10%) of the Equity Interests in such
Person.  Notwithstanding the foregoing, Pacific Ethanol Imperial LLC
shall not be an Affiliate of any Borrower.

           

          “Affiliated Project
Documents” means those Project Documents listed in Schedule 5.10
and identified as Affiliate agreements.

           

          “Agents” means,
collectively, the Administrative Agent, the Collateral Agent, and the Accounts
Bank.

           


          
            
               


            

            
              Exhibit A
- 1

              
                

              

            

            
               


            

          

          


           

          “Aggregate Commitment”
means fifty million Dollars ($50,000,000), as the same may be reduced in
accordance with Section 2.06
(Termination
or Reduction of Commitments).

           

          “Aggregate Revolving Loan
Commitment” means twenty million Dollars ($20,000,000), as the same may
be reduced in accordance with Section 2.06
(Termination
or Reduction of Commitments).

           

          “Aggregate Roll Up Loan
Commitment” means thirty million Dollars ($30,000,000), as the same may
be reduced in accordance with Section 2.06
(Termination
or Reduction of Commitments).

           

          “AMA Consent” means a
Consent and Agreement regarding the Asset Management Agreement entered into
among Pacific Ethanol, the Borrowers, and the Pre-Petition Collateral Agent, in
form and substance reasonably satisfactory to the Administrative Agent and the
Collateral Agent.

           

          “Agreement” has the
meaning set forth in the Preamble.

           

          “Ancillary Documents”
means, with respect to each Additional Project Document, the following, each of
which shall be in form and substance reasonably satisfactory to the
Administrative Agent and, in the case of items (i), (ii) and (iv), the
Collateral Agent:

           

          
            	
                     
      

                  	
                    (i)

                  	
                    each
      security instrument and agreement necessary or desirable to grant to the
      Collateral Agent a first priority perfected Lien (subject only to
      Permitted Liens) in such Additional Project Document and all property
      interests received by any Borrower in connection
  therewith;

                  


          

           

          
            	
                     
      

                  	
                    (ii)

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

                  


          

           

          
            	
                     
      

                  	
                    (iii)

                  	
                    if
      reasonably requested by the Administrative Agent, opinions of counsel for
      the Borrowers addressing such matters relating to such document, as the
      Administrative Agent may reasonably
request;

                  


          

           

          
            	
                     
      

                  	
                    (iv)

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

                  


          

           


          
            
               


            

            
              Exhibit A
- 2

              
                

              

            

            
               


            

          


          
            	
                     
      

                  	
                    (v)

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

                  


          

           

          “Applicable Margin”
means ten percent (10%).

           

          “Approved Fund” means,
with respect to any Lender that is a fund that invests in commercial loans, any
other fund that invests in commercial loans and is managed or advised by the
same investment advisor as such Lender or by an Affiliate of such investment
advisor.

           

          “Approved Plan” means
a plan of reorganization of the Debtors approved by the Roll Up Lenders in
accordance with section 1126 of the Bankruptcy Code providing that the Roll Up
Loans be refinanced or otherwise replaced with other securities or financial
instruments with a present value equal to the accrued principal and interest due
in respect of the Roll Up Loans as of the effective date of such plan; provided that under
such plan (i) the relative lien position of the Revolving Lenders in respect of
the Roll Up Loans is maintained and (ii) the relative lien position of the Roll
Up Lenders in respect of the Pre-Petition Obligations is
maintained.

           

          “Asset Management
Agreement” means the Asset Management Agreement, dated on or about the
date hereof, among Pacific Ethanol and the Borrowers.

           

          “Auditors” means those
nationally recognized independent auditors selected by the Borrowers (including
Hein & Associates) and approved by the Administrative Agent.

           

          “Authorized Officer”
means (i) with respect to any Person that is a corporation, the president, any
vice president, the treasurer, the chief financial officer or chief
restructuring officer of such Person, (ii) with respect to any Person that is a
partnership, an Authorized Officer of a general partner of such Person, (iii)
with respect to any Person that is a limited liability company, any manager, the
president, any vice president, the treasurer, the chief financial officer or
chief restructuring officer of such Person, or any person who serves in such
capacity in respect of the managing member of such Person, or (iv) with respect
to any Person, such other representative of such Person that is approved by the
Administrative Agent in writing who, in each such case, has been named as an
“Authorized Officer” on a certificate of incumbency of such Person delivered to
the Administrative Agent and the Accounts Bank on or after the date
hereof.

           

          “Bankruptcy Code”
means Title 11 of the United States Code entitled “Bankruptcy” or any successor
statute, and all rules promulgated thereunder.

           

          “Bankruptcy Court” has
the meaning set forth in the Recitals.

           

          “Bankruptcy Rules”
means the Federal Rules of Bankruptcy Procedure and local rules of the
Bankruptcy Court, each as amended, and applicable to the Cases.

           

          “Base Rate” means, for
any day, a fluctuating rate per annum equal to the highest of (i) the Federal
Funds Effective Rate plus one-half of one percent (0.50%), (ii) the rate of
interest in effect for such day as publicly announced from time to time by
WestLB as its “prime rate” and (iii) LIBOR plus one percent (1%). The “prime
rate” is a rate set by WestLB based upon various factors including WestLB’s
costs and desired return, general economic conditions and other factors, and is
used as a reference point for pricing some loans, which may be priced at, above,
or below such announced rate.  Any change in such rate announced by
WestLB shall take effect at the opening of business on the day specified in the
public announcement of such change.

           


          
            
               


            

            
              Exhibit A
- 3

              
                

              

            

            
               


            

          

          


           

          “Base Rate Loan” means
any Revolving Loan bearing interest at a rate determined by reference to the
Base Rate and the provisions of Article II (Commitments
and Borrowing).

           

          “Blocked Account
Agreement” means an agreement, in substantially the form attached to the
Pre-Petition Credit Agreement as Exhibit 7.02(i)
(or, if requested by the Borrowers, such other form reasonably satisfactory to
the Administrative Agent and the Collateral Agent), with respect to a Local
Account among the Borrower in whose name such Local Account has been opened, the
bank with whom such Local Account was opened and the Collateral Agent or the
Pre-Petition Collateral Agent.

           

          “Boardman” has the
meaning set forth in the Preamble.

           

          “Boardman CS Date”
means the first to occur of (i) September 30, 2009 and (ii) such earlier date as
may be agreed to by Boardman and the Administrative Agent.

           

          “Boardman Deed of
Trust” means the Leasehold Trust Deed, Security Agreement, Financing
Agreement, Fixture Filing and Assignment of Leases, Rents and Security Deposits
made by Boardman to Stewart Title Guaranty Company, as trustee, for the benefit
of the Pre-Petition Collateral Agent, as beneficiary.

           

          “Boardman Lease” means
the lease dated April 20, 2006 between the Port of Morrow and
Boardman.

           

          “Boardman Plant” means
the ethanol production facility located at Boardman, Oregon, with an expected
capacity of approximately forty (40) million gallons-per-year of denatured
ethanol, including the Site on which such facility is located, and all
buildings, structures, improvements, easements and other property related
thereto.

           

          “Boardman Pledge
Agreement” means the Pledge and Security Agreement, dated on or about the
date of the Pre-Petition Credit Agreement, among Pacific Holding, Boardman and
the Pre-Petition Collateral Agent.

           

          “Boardman Security
Agreement” means the Assignment and Security Agreement,  dated
on or about the date of the Pre-Petition Credit Agreement, made by Boardman in
favor of the Pre-Petition Collateral Agent.

           

          “Borrower Agent” means
Pacific Holding, in its capacity as agent for the Borrowers in accordance with
Section 11.05
(Borrower
Party Agent).

           

          “Borrower LLC
Agreements” means, collectively, the Pacific Holding LLC Agreement, the
Madera LLC Agreement, the Boardman LLC Agreement, the Stockton LLC Agreement and
the Burley LLC Agreement.

           

          “Borrowers” has the
meaning set forth in the Preamble.

           

          “Burley” has the
meaning set forth in the Preamble.

           


          
            
               


            

            
              Exhibit A
- 4

              
                

              

            

            
               


            

          


           

          “Burley Deed of Trust”
means the Mortgage, Security Agreement, Financing Statement, Fixture Filing and
Assignment of Leases, Rents and Security Deposits, in substantially the form of
Exhibit 6.04(g)-A
to the Pre-Petition Credit Agreement.

           

          “Burley Plant” means
the ethanol production facility located at Burley, Idaho, with a design basis
capacity of approximately fifty (50) million gallons-per-year of denatured
ethanol, including the Site on which such facility is located, and all
buildings, structures, improvements, easements and other property related
thereto.

           

          “Burley Pledge
Agreement” means the Pledge and Security Agreement, in substantially the
form of Exhibit 6.04(g)-B
to the Pre-Petition Credit Agreement.

           

          “Burley Security
Agreement” means the Assignment and Security Agreement, in substantially
the form of Exhibit 6.04(g)-C
to the Pre-Petition Credit Agreement.

           

          “Business Day”
means:

           

          
            	
                     
      

                  	
                    (i)

                  	
                    any
      day that is neither a Saturday or Sunday nor a day on which commercial
      banks are authorized or required to be closed in Sacramento, California or
      New York, New York; and

                  


          

           

          
            	
                     
      

                  	
                    (ii)

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

                  


          

           

          “Business Interruption
Insurance Proceeds” means all proceeds of any insurance policies required
pursuant to this Agreement or otherwise obtained with respect to any Borrower,
any Plant or the Project relating to business interruption or delayed
start-up.

           

          “Capitalized Lease
Liabilities” of any Person means all monetary obligations of such Person
under any leasing or similar arrangement that, in accordance with GAAP, would be
classified as capitalized leases on a balance sheet of such Person or otherwise
disclosed as such in a note to such balance sheet and, for purposes of the
Financing Documents, the amount of such obligations shall be the capitalized
amount thereof, determined in accordance with GAAP.

           

          “Carve-Out” means the
sum of (i) the aggregate amount of any budgeted and unpaid fees, costs and
expenses that were accrued or incurred prior to the Carve-Out Date by the
professionals retained by the Debtors or any professionals retained by the
Committee (collectively, the “Professionals”) to
the extent allowed by an order of the Bankruptcy Court, plus (ii) those fees,
costs and expenses incurred by Professionals after the Carve-Out Date and
subsequently allowed by order of the Bankruptcy Court and in compliance with the
DIP Budget in an amount not to exceed $250,000 in the aggregate, plus (iii) fees
required to be paid to the Clerk of the Bankruptcy Court and to the U.S. Trustee
pursuant to 28 U.S.C. § 1930; provided that
following the Carve-Out Date any amounts paid to Professionals by any means will
reduce the Carve-Out on a dollar-for-dollar basis.

           

          “Carve-Out Date” means
the earlier of (i) the date on which any Event of
Default occurs and (ii) the Maturity Date.

           


          
            
               


            

            
              Exhibit A
- 5

              
                

              

            

            
               


            

          


           

          “Cash Equivalents”
means:

           

          (a)           readily
marketable direct obligations of the government of the United States or any
agency or instrumentality thereof, or obligations unconditionally guaranteed by
the full faith and credit of the government of the United States, in each case
maturing within one (1) year from the date of acquisition thereof;

           

          (b)           securities
issued by any state of the United States of America or any political subdivision
of any such state or any public instrumentality thereof having maturities of not
more than one (1) year from the date of acquisition thereof and, at the time of
acquisition, having a rating of AA- or higher from S&P or Aa3 or higher from
Moody’s (or, if at any time neither S&P nor Moody’s shall be rating such
obligations, an equivalent rating from another nationally recognized rating
service);

           

          (c)           investments
in commercial paper maturing within 270 days from the date of acquisition
thereof and having, at such date of acquisition, a rating of at least A-1 or P-1
from either S&P or Moody’s (or, if at any time neither S&P nor Moody’s
shall be rating such obligations, an equivalent rating from another nationally
recognized rating service);

           

          (d)           investments
in certificates of deposit, banker’s acceptances and time deposits maturing
within 270 days from the date of acquisition thereof issued or guaranteed by or
placed with, and money market deposit accounts issued or offered by, the
Administrative Agent or any domestic office of any commercial bank organized
under the laws of the United States of America, any State thereof, any country
that is a member of the Organisation for Economic Co-Operation and Development
or any political subdivision thereof, that has a combined capital and surplus
and undivided profits of not less than $500,000,000;

           

          (e)           fully
collateralized repurchase agreements with a term of not more than 30 days for
securities described in clause (a) above and entered into with a financial
institution satisfying the criteria of clause (d) of this definition;
and

           

          (f)           investments
in “money market funds” within the meaning of Rule 2a-7 of the Investment
Company Act of 1940, as amended, substantially all of whose assets are invested
in investments of the type described in clauses (a) through (e) of this
definition.

           

          “Casualty Event” means
an event that causes any Plant, or any material portion thereof, to be damaged,
destroyed or rendered unfit for normal use for any reason
whatsoever.

           

          “CERCLA” means the
Comprehensive Environmental Response, Compensation and Liability Act (42 U.S.C.
§ 9604, et seq.), as amended, and rules, regulations, standards guidelines and
publications issued thereunder.

           

          “Change of Control”
means any transaction or series of related transactions (including any merger or
consolidation) consummated without the prior written consent of the
Administrative Agent the result of which is that:

           


          
            
               


            

            
              Exhibit A
- 6

              
                

              

            

            
               


            

          


          (A)           (i)
Pacific Holding fails to maintain, directly, legally or beneficially, one
hundred percent (100%) of the Equity Interests of any of Madera, Boardman,
Stockton, or Burley, (ii) PEC fails to maintain directly, legally or
beneficially, one hundred percent (100%) of the Equity Interests of Pacific
Holding (other than any Equity Interest held by an Independent Member), (iii)
Pacific Ethanol fails to maintain, directly or indirectly, legally or
beneficially, one hundred percent (100%) of the Equity Interests of PEC or
fifty-one percent (51%) of the Equity Interests of each of the Borrowers, or
(iv) twenty percent (20%) or more of the Equity Interests of any Borrower are
indirectly, legally or beneficially owned by, or under common control of, any
Person other than those identified in clauses (i) through (iii) above;
or

           

          (B)           any
Person becomes a member of the board of directors of Pacific Ethanol.

           

          “Chapter 11 Case” or
“Case” has the meaning set forth in the Recitals.

           

          “Chattel Paper” has
the meaning set forth in Section 9-102 of the UCC.

           

          “Closing Date” means
the date on which all the conditions set forth in Section 6.01
(Conditions
to Closing)  and Section 6.02 (Conditions
to All Fundings)
have been satisfied or waived.

           

          “CMSA” means each
Construction Management Services Agreement between any Borrower and the
Construction Manager.

           

          “Code” means the
Internal Revenue Code of 1986, as amended.

           

          “Cold Shutdown” means,
in respect of a Plant, the maintenance of such Plant in a state in which the
Plant facilities are not producing ethanol, ethanol work in process has been
completed, and wherein (i) Plant systems and equipment preservation are being
managed in accordance with manufacturer recommendations and (ii) Plant
facilities operate with a reduced headcount.  “Cold Shutdown”
contemplates minimized usage of a Plant’s utility systems but does not
contemplate any cessation of compliance monitoring with respect to Necessary
Project Approvals.

           

          “Collateral” means all
Accounts, Chattel Paper, Commercial Tort Claims, Documents, Equipment, Fixtures,
Goods, General Intangibles, Instruments, Inventory, Investment Property
(including Equity Interests in Subsidiaries), Pledged Deposits, Supporting
Obligations, collateral referenced in the Interim Order, all rights, claims and
other causes of action of each Debtor’s estate and any other avoidance actions
under Chapter 5 of the Bankruptcy Code and the property received thereby whether
by judgment, settlement or otherwise and Other Collateral, wherever located, in
which a Debtor now has or hereafter acquires any right or interest, and the
proceeds (including Stock Rights), insurance proceeds and products thereof,
together with all books and records, customer lists, credit files, computer
files, programs, printouts and other computer materials and records related
thereto.  Notwithstanding anything to the contrary contained in this
definition, Collateral shall not include (i) rights under governmental
licenses, authorizations or any other asset of a Debtor to the extent and for so
long as the grant of a security interest therein is prohibited by applicable Law
and (ii) any intent-to-use trademark or service mark application prior to
the filing of a statement or use or amendment to allege use, or any other
intellectual property, to the extent that applicable Law prohibits the creation
of a security interest or would otherwise result in the loss of rights from the
creation of such security interest or from the assignment of such rights upon
the occurrence and continuance of an Event of Default.

           


          
            
               


            

            
              Exhibit A
- 7

              
                

              

            

            
               


            

          


          “Commercial Tort
Claims” means any currently existing commercial tort claims of a
Debtor.

           

          “Collateral Agent”
means WestLB AG, New York Branch, in its capacity as collateral agent for the
Senior Secured Parties under the Financing Documents, and includes each other
Person that may, from time to time be appointed as successor Collateral Agent
pursuant to Section 10.06
(Resignation
or Removal of Agent).

           

          “Commitment Fee” has
the meaning provided in Section 3.11
(Fees).

           

          “Commitment
Percentage” means, as to any Lender at any time, such Lender’s Revolving
Loan Commitment Percentage or Roll Up Loan Commitment Percentage, as the context
may require.

           

          “Commitment” means,
with respect to each Lender, as applicable, such Lender’s Revolving Loan
Commitment or Roll Up Loan Commitment, as the context may require.

           

          “Committee” means the
statutory committee appointed in the Chapter 11 Cases.

           

          “Commodity Hedging
Arrangements” means any arrangement to hedge the price of corn purchases,
ethanol sales, Distillers Grains sales or natural gas purchases.

           

          “Condemnation
Proceeds” means any Net Cash Proceeds payable in respect of any Event of
Taking.

           

          “Consents” means each
Consent and Agreement entered into among a Project Party, the Borrowers, and the
Collateral Agent, each in form and substance reasonably satisfactory to the
Administrative Agent and the Collateral Agent.

           

          “Construction
Contracts” means collectively, (i) the construction contracts identified
on Schedule 5.10
and (ii) each CMSA.

           

          “Construction Manager”
means PEC or any successor pursuant to a CMSA (or any replacement
thereof).

           

           “Consultants” means
the Financial Advisor and any other consultants appointed by or on behalf of the
Lenders.

           

          “Contest” means, with
respect to any matter or claim involving any Person, that such Person is
contesting such matter or claim in good faith and by appropriate proceedings
timely instituted; provided, that the
following conditions are satisfied:  (a) such Person has posted a bond
or other security (which may include funds reserved in an appropriate Project
Account) reasonably acceptable to the Administrative Agent; (b) during the
period of such contest, the enforcement of any contested item is effectively
stayed; (c) none of such Person or any of its officers, directors or employees,
or any Senior Secured Party or its respective officers, directors or employees,
is or could reasonably be expected to become subject to any criminal liability
or sanction in connection with such contested items; and (d) such contest and
any resultant failure to pay or discharge the claimed or assessed amount does
not, and would not reasonably be expected to (i) result in a Material Adverse
Effect or (ii) involve a material risk of the sale, forfeiture or loss of, or
the creation, existence or imposition of any Lien (other than a Permitted Lien)
on, any of the Collateral.

           


          
            
               


            

            
              Exhibit A
- 8

              
                

              

            

            
               


            

          


          “Contingent
Liabilities” means any agreement, undertaking or arrangement by which any
Person guarantees, endorses or otherwise becomes or is contingently liable upon
(by direct or indirect agreement, contingent or otherwise, to provide funds for
payment, to supply funds to, or otherwise to invest in, a debtor, or otherwise
to assure a creditor against loss) the indebtedness, obligation or any other
liability of any other Person (other than by endorsements of instruments in the
course of collection), or guarantees the payment of dividends or other
distributions upon the shares of any other Person.  The amount of any
Person’s obligation under any contingent liabilities shall (subject to any
limitation set forth therein) be deemed for purposes of this Agreement to be the
outstanding principal amount of the debt, obligation or other liability
guaranteed thereby; provided, however, that if the
maximum amount of the debt, obligation or other liability guaranteed thereby has
not been established, the amount of such contingent liability shall be the
maximum reasonably anticipated amount of the debt, obligation or other
liability; provided, further, that any
agreement to limit the maximum amount of such Person’s obligation under such
contingent liability shall not, of and by itself, be deemed to establish the
maximum reasonably anticipated amount of such debt, obligation or other
liability.

           

          “Contractual
Obligation” means, as to any Person, any provision of any security issued
by such Person or of any agreement, instrument or other undertaking to which
such Person is a party or by which it or any of its property is
bound.

           

          “Corn Supplier” means
Pacific Ag Products or any other counterparty to a Grain Supply
Agreement.

           

          “DDG” means dried
distillers grains (if any) produced by the Borrowers at the
Project.

           

          “Debtors” has the
meaning set forth in the Recitals.

           

          “Default” means any
condition, occurrence or event that, after notice or passage of time or both,
would be an Event of Default.

           

          “Default Excess”
means, with respect to any Defaulting Lender, the excess, if any, of such
Defaulting Lender’s pro rata share of the aggregate outstanding principal amount
of all Loans of all Lenders (calculated as if all Defaulting Lenders (including
such Defaulting Lender) had funded all of their respective Defaulted Loans) over
the aggregate outstanding principal amount of all Loans of such Defaulting
Lender.

           

          “Default Period”
means, with respect to any Defaulting Lender, the period commencing on the date
of the applicable Funding Default and ending on the earliest of the following
dates:  (i) the date on which all Commitments are cancelled or
terminated and/or the Obligations are declared or become immediately due and
payable, (ii) the date on which (a) the Default Excess with respect to such
Defaulting Lender shall have been reduced to zero (whether by the funding by
such Defaulting Lender of any Defaulted Loans of such Defaulting Lender or by
the non pro rata application of any voluntary or mandatory prepayments of the
Loans pursuant to the terms hereof) and (b) such Defaulting Lender shall have
delivered to the Borrowers and the Administrative Agent a written reaffirmation
of its intention to honor its obligations hereunder with respect to its
Commitments, and (iii) the date on which the Borrowers, the Administrative Agent
and Required Lenders waive all Funding Defaults of such Defaulting Lender in
writing.

           


          
            
               


            

            
              Exhibit A
- 9

              
                

              

            

            
               


            

          


          “Default Rate” has the
meaning set forth in Section 3.04
(Default
Interest Rate).

           

          “Defaulted Loan” has
the meaning provided in Section 2.07 (Defaulting
Lenders).

           

          “Defaulting Lender”
has the meaning provided in Section 2.07 (Defaulting
Lenders).

           

          “Delta-T” Delta-T
Corporation, a Virginia corporation.

           

          “Deposit Accounts” has
the meaning set forth in Section 9-102 of the UCC.

           

          “DG Offtake
Agreements” means any agreement relating to the sale or Distillers Grains
by any Borrower with a scheduled term in excess of six months and with payments
thereunder expected to be in excess of one million Dollars ($1,000,000),
including the Madera DG Agreement and each agreement between any Borrower and
Pacific Ag Products relating to the sale or marketing of Distillers
Grains.

           

          “DIP Administrative
Claim” means an allowed superpriority administrative expense claim under
Section 364(c)(1) of the Bankruptcy Code, having priority over all
administrative expenses of the kind specified in, or ordered pursuant to,
Sections 105, 326, 328, 330, 331, 503(b), 506(c), 507(a), 507(b), 726,
1113, 1114 or any other provisions of the Bankruptcy Code.

           

          “DIP Budget” has the
meaning set forth in Section 7.01 (l)
(Affirmative
Covenants-DIP Budget).

           

          “DIP Facility” means
the credit facility provided to the Debtors pursuant to the Financing
Documents.

           

          “DIP Liens” has the
meaning set forth in Section 2.09(b)
(Super-Priority
Nature of Obligations) and shall include
Interim DIP Liens under and as defined in the Interim Order.

           

          “Discharge Date” means
the date on which (a) all outstanding Commitments have been terminated and (b)
all amounts payable in respect of the Obligations have been irrevocably paid in
full in cash (other than obligations under the Financing Documents that by their
terms survive and with respect to which no claim has been made by the Senior
Secured Parties).

           

          “Disposition” means,
with respect to any Property, any sale, lease (or sublease), sale and leaseback,
assignment, conveyance, transfer or other dispositions thereof (other than a
Recovery Event); and the terms “Dispose” and “Disposed of” shall have
correlative meanings, excluding any sales or dispositions of Products or Cash
Equivalents, in each case, in the ordinary course of business.

           

          “Distillers Grains”
means DDG, WDG, and any other form of distillers grain products (including
syrup) marketed by any Borrower from time to time.

           

          “Documents” has the
meaning set forth in Section 9-102 of the UCC.

           


          
            
               


            

            
              Exhibit A
- 10

              
                

              

            

            
               


            

          


          “Dollar” and the sign
“$” mean lawful
money of the United States.

           

          “Domestic Office”
means, relative to any Lender, the office of such Lender designated on Schedule 1.01 or
designated in the Lender Assignment Agreement pursuant to which such Lender
became a Lender hereunder or such other office of a Lender (or any successor or
assign of such Lender) within the United States as may be designated from time
to time by written notice from such Lender, as the case may be, to the Borrower
Agent and the Administrative Agent.

           

          “Effect of Bankruptcy”
means, with respect to any contractual obligation, contract, lease or agreement
to which a Debtor is a party, any default or other legal consequences arising on
account of the commencement or the filing of the Chapter 11 Cases, as
applicable (including the implementation of any stay), or the rejection of any
such contractual obligation, contract or agreement with the approval of the
Bankruptcy Court if required under applicable Law.

           

          “Eligible Assignee”
means (a) any Lender, (b) an Affiliate of any Lender, (c) an Approved Fund, and
(d) any other Person (other than a natural person) approved by the
Administrative Agent.

           

          “Environmental
Affiliate” means any Person, only to the extent of, and only with respect
to matters or actions of such Person for which, any Borrower could reasonably be
expected to have liability as a result of such Borrower retaining, assuming,
accepting or otherwise being subject to liability for Environmental Claims
relating to such Person, whether the source of such Borrower’s obligation is by
contract or operation of Law.

           

          “Environmental
Approvals” means any Governmental Approvals required under applicable
Environmental Laws.

           

          “Environmental Claim”
means any written notice, claim, demand or similar written communication by any
Person alleging potential liability or requiring or demanding remedial or
responsive measures (including potential liability for investigatory costs,
cleanup, remediation and mitigation costs, governmental response costs, natural
resources damages, property damages, personal injuries, fines or penalties) in
each such case (x) either (i) with respect to environmental
contamination-related liabilities or obligations with respect to which any
Borrower could reasonably be expected to be responsible that are, or could
reasonably be expected to be, in excess of two hundred thousand Dollars
($200,000) in the aggregate, or (ii) that has or could reasonably be expected to
result in a Material Adverse Effect and (y) arising out of, based on or
resulting from (i) the presence, release or threatened release into the
environment, of any Materials of Environmental Concern at any location, whether
or not owned by such Person; (ii) circumstances forming the basis of any
violation, or alleged violation, of any Environmental Laws or Environmental
Approvals; or (iii) exposure to Materials of Environmental Concern.

           


          
            
               


            

            
              Exhibit A
- 11

              
                

              

            

            
               


            

          


          “Environmental Laws”
means all Laws applicable to the Project relating to pollution or protection of
human health, safety or the environment (including ambient air, surface water,
ground water, land surface or subsurface strata), including Laws relating to
emissions, discharges, releases or threatened releases of Materials of
Environmental Concern, or otherwise applicable to the Project relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Materials of Environmental Concern.

           

          “Equipment” has the
meaning set forth in Section 9-102 of the UCC.

           

          “Equity Interests”
means, with respect to any Person, all of the shares of capital stock of (or
other ownership or profit interests in) such Person, all of the warrants,
options or other rights for the purchase or acquisition from such Person of
shares of capital stock of (or other ownership or profit interests in) such
Person, all of the securities convertible into or exchangeable for shares of
capital stock of (or other ownership or profit interests in) such Person or
warrants, rights or options for the purchase or acquisition from such Person of
such shares (or such other interests), and all of the other ownership or profit
interests in such Person (including partnership, member or trust interests
therein), whether voting or nonvoting, and whether or not such shares, warrants,
options, rights or other interests are outstanding on any date of determination,
in each such case including all voting rights and economic rights related
thereto.

           

          “ERISA” means the
Employee Retirement Income Security Act of 1974, as amended, and any successor
statute of similar import, together with the regulations thereunder, in each
case as in effect from time to time.  References to sections of ERISA
also refer to any successor sections.

           

          “ERISA Affiliate”
means any Person, trade or business that, together with any Borrower, is or was
treated as a single employer under Section 414 of the Code or
Section 4001 of ERISA.

           

          “ERISA Plan” means any
Plan that is not a Multiemployer Plan.

           

          “Ethanol Offtake
Agreements” means any agreement relating to the sale of ethanol by any
Borrower with a scheduled term in excess of six months and with payments
thereunder expected to be in excess of one million Dollars ($1,000,000),
including each agreement between any Borrower and Kinergy relating to the sale
or marketing of ethanol.

           

          “Eurodollar Loan”
means any Revolving Loan bearing interest at a rate determined by reference to
the Eurodollar Rate and the provisions of Article II (Commitments
and Borrowing) and Article III (Repayments,
Prepayments, Interest and Fees).

           

          “Eurodollar Office”
means, relative to any Lender, the office of such Lender designated as such on
Schedule 1.01 or
designated in the Lender Assignment Agreement pursuant to which such Lender
became a Lender hereunder or such other office of a Lender as designated from
time to time by notice from such Lender to the Borrower Agent and the
Administrative Agent pursuant to Section 4.04
(Obligation
to Mitigate) that shall be
making or maintaining Eurodollar Loans of such Lender hereunder.

           


          
            
               


            

            
              Exhibit A
- 12

              
                

              

            

            
               


            

          


          “Eurodollar Rate”
means, for any Interest Period with respect to any Eurodollar Loan, an interest
rate per annum equal to the rate per annum obtained by dividing (x) LIBOR for
such Interest Period and such Eurodollar Loan, by (y) a percentage equal to (i)
100% minus (ii) the Eurodollar Reserve Percentage for such Interest
Period.

           

          “Eurodollar Reserve
Percentage” means, for any day during any Interest Period, the reserve
percentage (expressed as a decimal, carried out to five decimal places) in
effect on such day, whether or not applicable to any Lender, under regulations
issued from time to time by the F.R.S. Board for determining the maximum reserve
requirement (including any emergency, supplemental or other marginal reserve
requirement) with respect to eurocurrency funding (currently referred to as
“Eurocurrency Liabilities”).  The Eurodollar Rate for each outstanding
Eurodollar Loan shall be adjusted automatically as of the effective date of any
change in the Eurodollar Reserve Percentage.

           

          “Event of Abandonment”
means with respect to any Plant any of the following shall have occurred: (i)
the abandonment by the applicable Borrower of the development, operation or
maintenance of such Plant for a period of more than ten (10) consecutive days
(other than as a result of force majeure, an Event of Taking or a Casualty
Event), (ii) the suspension of all or substantially all of any Borrower’s
activities with respect to such Plant, other than as the result of a force
majeure, Event of Taking or Casualty Event, for a period of more than ten (10)
consecutive days, or (iii) any written acknowledgement by any Borrower of a
final decision to take any of the foregoing actions; provided that Cold
Shutdown shall not constitute an Event of Abandonment under any of clauses (i),
(ii) or (iii).

           

          “Event of Default”
means any one of the events specified in Section 9.01
(Events
of Default).

           

          “Event of Taking”
means any taking, exercise of rights of eminent domain, public improvement,
inverse condemnation, condemnation or similar action of or proceeding by any
Governmental Authority relating to any material part of any Plant, the Project,
any Equity Interests of any Borrower or any other assets thereof.

           

          “Event of Total Loss”
means the occurrence of a Casualty Event affecting all or substantially all of
any Plant, the Project or the assets of Pacific Holding or any
Borrower.

           

          “Excluded Taxes”
means, with respect to any Agent or any Lender or any other recipient of any
payment to be made by or on account of any Obligation hereunder, (a) income or
franchise Taxes imposed on (or measured by) its net income levied as a result of
a present or former connection between such Agent, such Lender or such other
recipient and the jurisdiction of the Governmental Authority imposing such Tax
or any political subdivision or taxing Authority thereof or their (other than
such Agent’s, such Lender’s or such other recipient’s having executed, delivered
or preformed its obligations or recovered a payment under, or enforced, this
Agreement), (b) any branch profits Tax imposed by the United States, or any
similar Tax imposed by any other jurisdiction described in clause (a) above, or
(c) any United States withholding Tax to the extent that is imposed on amounts
payable to such Agent or such Lender at the time such Agent or such Lender
becomes a party to this Agreement.

           


          
            
               


            

            
              Exhibit A
- 13

              
                

              

            

            
               


            

          


          “F.R.S. Board” means
the Board of Governors of the Federal Reserve System or any successor
thereto.

           

          “Federal Funds Effective
Rate” means, for any day, the rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) equal to the weighted average of the
rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers on such day, as published on
the next succeeding Business Day by the Federal Reserve Bank of New York, or, if
such rate is not so published for any day that is a Business Day, the average of
the quotations for such day for such transactions received by the Administrative
Agent from three federal funds brokers of recognized standing selected by the
Administrative Agent.

           

          “Fees” means,
collectively, each of the fees payable by the Borrowers for the account of any
Lender or Agent pursuant to Section 3.11
(Fees).

           

          “Final Order” means
the order of the Bankruptcy Court entered in the Chapter 11 Cases after a
final hearing under Bankruptcy Rule 4001(c)(2) or such other procedures as
approved by the Bankruptcy Court, which order shall be substantially in the form
of the Interim Order or otherwise satisfactory in form and substance to the
Lenders and the Administrative Agent, and from which no appeal or motion to
reconsider has been timely filed, or if timely filed, such appeal has been
stayed, dismissed or denied unless the Lenders and the Administrative Agent
waive such requirement, together with all extensions, modifications and
amendments thereto, in form and substance satisfactory to the Lenders and the
Administrative Agent.  The Final Order shall authorize and approve the
transactions contemplated by the Financing Documents and find that the Lenders
are extending credit to the Debtors in good faith within the meaning of
Bankruptcy Code section 364(e) and shall set forth provisions (i) approving in all respects the Financing Documents, and
authorizing and directing the Debtors to execute and become bound by the
Financing Documents; (ii) modifying the automatic stay to the extent
necessary to permit or effectuate the terms of the Final Order and the Financing Documents, including to permit the
creation and perfection of the Collateral Agent’s Liens on the Collateral; (iii)
providing for the automatic relief of such stay to permit the enforcement of the
Administrative Agent’s and the Lenders’ remedies under the DIP Facility, subject
to the right of the Debtors and/or the Committee to re-impose or continue the
automatic stay; and (iv) providing that the Debtors acknowledge (a) the validity
and enforceability of the Pre-Petition
Obligations, without defense, offset or counterclaim of any kind, (b) the
validity, perfection and priority of the Liens securing the Pre-Petition Obligations, and that the Debtors
waive any right to challenge or contest such claims and liens and (c) that the
Debtors have no valid claims or causes of action, whether based in contract,
tort or otherwise against the Pre-Petition
Administrative Agent or any Pre-Petition
Senior Secured Party with respect to the Pre-Petition Credit Agreement or the related
documents or transactions.

           

          “Financial Asset” has
the meaning set forth in Section 8-102(9) of the UCC.

           

          “Financial Officer”
means, with respect to any Person, the controller, treasurer or chief financial
officer of such Person.

           


          
            
               


            

            
              Exhibit A
- 14

              
                

              

            

            
               


            

          


          “Financial Advisor”
means Capstone or a replacement appointed by the Required Lenders.

           

          “Financing Documents”
means:

           

          
            	
                     
      

                  	
                    (i)

                  	
                    this
      Agreement;

                  


          

           

          
            	
                     
      

                  	
                    (ii)

                  	
                    the
      Notes;

                  


          

           

          
            	
                     
      

                  	
                    (iii)

                  	
                    the
      New Mortgages;

                  


          

           

          
            	
                     
      

                  	
                    (iv)

                  	
                    the
      PEC Pledge Agreement;

                  


          

           

          
            	
                     
      

                  	
                    (v)

                  	
                    the
      AMA Consent;

                  


          

           

          
            	
                     
      

                  	
                    (vi)

                  	
                    the
      Sponsor Support Agreement;

                  


          

           

          
            	
                     
      

                  	
                    (vii)

                  	
                    the
      other financing and security agreements, documents and instruments
      delivered by the Borrowers or PEC in connection with this Agreement;
      and

                  


          

           

          
            	
                     
      

                  	
                    (viii)

                  	
                    each
      other document entered into by a Borrower after the date hereof in
      accordance with the terms hereof and designated as a Financing Document by
      the Administrative Agent.

                  


          

           

          “First Liens” has the
meaning set forth in Section 2.09 (b)
(Super-Priority
Nature of Obligations).

           

          “Fiscal Quarter” means
any quarter of a Fiscal Year.

           

          “Fiscal Year” means
any period of twelve (12) consecutive calendar months ending on December
31.

           

          “Fixtures” has the
meaning set forth in Section 9-102 of the UCC.

           

          “Funding” means the
incurrence of each Revolving Loan made by the Lenders on a single
date.

           

          “Funding Date” means,
with respect to each Revolving Loan, the date on which funds are disbursed by
the Administrative Agent, on behalf of the Lenders, to the Borrowers in
accordance with Section 2.04
(Funding
of Loans).

           

          “Funding Default” has
the meaning specified in Section 2.07 (Defaulting
Lenders).

           

          “Funding Notice” means
each request for Funding in the form of Exhibit 2.03
delivered in accordance with Section 2.03
(Notice
of Fundings).

           


          
            
               


            

            
              Exhibit A
- 15

              
                

              

            

            
               


            

          


          “GAAP” means generally
accepted accounting principles in effect from time to time in the United States,
applied on a consistent basis.

           

          “General Intangibles”
has the meaning set forth in Section 9-102 of the UCC.

           

          “Goods” has the
meaning set forth in Section 9-102 of the UCC.

           

          “Governmental
Approval” means any authorization, consent, approval, license, lease,
ruling, permit, certification, exemption, filing for registration by or with any
Governmental Authority.

           

          “Governmental
Authority” means any nation, state, sovereign, or government, any
federal, regional, state, local or political subdivision and any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.

           

          “Grain Supply
Agreements” means any agreement relating to the purchase or supply of
grain to any Borrower with a scheduled term in excess of six months and with
payments thereunder expected to be in excess of five hundred thousand Dollars
($500,000), including the Corn Procurement and Handling Agreement between
Pacific Holding and Pacific Ag Products, dated on or about the date of the
Pre-Petition Credit Agreement.

           

          “Granting Lender” has
the meaning provided in Section 11.03(h)
(Assignments).

           

           “Guarantee” means, as
to any Person, (a) any obligation, contingent or otherwise, of such Person
guaranteeing or having the economic effect of guaranteeing any Indebtedness or
other obligation payable or performable by another Person (the “primary
obligor”) in any manner, whether directly or indirectly, and including any
obligation of such Person, direct or indirect, (i) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness or
other obligation, (ii) to purchase or lease property, securities or services for
the purpose of assuring the obligee in respect of such Indebtedness or other
obligation of the payment or performance of such Indebtedness or other
obligation, (iii) to maintain working capital, equity capital or any other
financial statement condition or liquidity or level of income or cash flow of
the primary obligor so as to enable the primary obligor to pay such Indebtedness
or other obligation, or (iv) entered into for the purpose of assuring in any
other manner the obligee in respect of such Indebtedness or other obligation of
the payment or performance thereof or to protect such obligee against loss in
respect thereof (in whole or in part), or (b) any Lien on any assets of such
Person securing any Indebtedness or other obligation of any other Person,
whether or not such Indebtedness or other obligation is assumed by such Person
(or any right, contingent or otherwise, of any holder of such Indebtedness to
obtain any such Lien).

           

          “Indebtedness” means,
as to any Person at a particular time, without duplication, all of the
following, whether or not included as indebtedness or liabilities in accordance
with GAAP:

           

          (a)           all
obligations of such Person for or in respect of moneys borrowed or raised,
whether or not for cash by whatever means (including acceptances, deposits,
discounting, letters of credit, factoring, and any other form of financing which
is recognized in accordance with GAAP in such Person’s financial statements as
being in the nature of a borrowing or is treated as “off-balance sheet”
financing);

           


          
            
               


            

            
              Exhibit A
- 16

              
                

              

            

            
               


            

          


          (b)           all
obligations of such Person evidenced by bonds, debentures, notes, loan
agreements or other similar instruments;

           

          (c)           all
obligations of such Person for the deferred purchase price of property or
services;

           

          (d)           all
obligations of such Person under conditional sale or other title retention
agreements relating to property or assets acquired by such Person (even though
the rights and remedies of the seller or lender under such agreement in the
event of default are limited to repossession or sale of such property or are
otherwise limited in recourse);

           

          (e)           the
maximum amount of all direct or contingent obligations of such Person arising
under letters of credit (including standby and commercial), bankers’
acceptances, bank guaranties, surety bonds and similar instruments;

           

          (f)           all
Capitalized Lease Liabilities;

           

          (g)           net
obligations of such Person under any Swap Contract;

           

          (h)           all
obligations of such Person to purchase, redeem, retire, defease or otherwise
make any payment in respect of any Equity Interests in such Person or any other
Person or any warrants, rights or options to acquire such Equity Interests,
valued, in the case of redeemable preferred interests, at the greater of its
voluntary or involuntary liquidation preference plus accrued and unpaid
dividends; and

           

          (i)           all
Guarantees of such Person in respect of any of the foregoing.

           

          For all
purposes hereof, the Indebtedness of any Person shall include the Indebtedness
of any partnership or joint venture (other than a joint venture that is itself a
corporation or limited liability company) in which such Person is a general
partner or a joint venturer, unless such Indebtedness is expressly made
non-recourse to such Person.  The amount of any net obligation under
any Swap Contract on any date shall be deemed to be the Swap Termination Value
thereof as of such date.

           

          “Indemnified Taxes”
means Taxes other than Excluded Taxes.

           

          “Indemnitee” has the
meaning provided in Section 11.09
(Indemnification
by the Borrowers).

           

          “Information” has the
meaning provided in Section 11.18
(Treatment
of Certain Information; Confidentiality).

           

          “Initial DIP Budget”
means the initial budget reflecting projected cash flow , operating
disbursements, payroll disbursements, non-operating disbursements and cash
balances, prepared by the Borrowers and attached hereto as Schedule
6.01(n).

           

          “Instruments” has the
meaning set forth in Section 9-102 of the UCC.

           


          
            
               


            

            
              Exhibit A
- 17

              
                

              

            

            
               


            

          


          “Insurance Consultant”
means Moore-McNeil, LLC, or any replacement insurance consultant appointed by
the Administrative Agent with the prior consent of the Required
Lenders.

           

           “Insurance Proceeds”
means all Net Cash Proceeds of any insurance policies required pursuant to this
Agreement or otherwise obtained with respect to any Borrower, any Plant or the
Project that are paid or payable to or for the account of any Borrower, or the
Collateral Agent as loss payee, or additional insured (other than Business
Interruption Insurance Proceeds and proceeds of insurance policies relating to
third party liability).

           

          “Interest Payment
Date” means, with respect to a Revolving Loan, the last day of each
Interest Period applicable to such Revolving Loan.

           

          “Interest Period”
means, with respect to any Eurodollar Loan, the period beginning on (and
including) the date on which such Eurodollar Loan is made pursuant to Section 2.04
(Funding
of Loans) or the date on
which each successive interest period for each such Eurodollar Loan is
determined pursuant to Section 3.03
(Interest
Rates)
and ending on (and including) the day that numerically corresponds to such date
one (1) month thereafter; provided, however, that (i) if
such Interest Period would otherwise end on a day that is not a Business Day,
such Interest Period shall end on the next following Business Day (unless such
next following Business Day is in a different a calendar month, in which case
such Interest Period shall end on the next preceding Business Day), (ii) any
Interest Period that begins on the last Business Day of a month (or on a day for
which there is no numerically corresponding day in the month at the end of such
Interest Period) shall end on the last Business Day of the month at the end of
such Interest Period, (iii) no Interest Period shall end after any Monthly
Payment Date unless the aggregate outstanding principal amount of Eurodollar
Loans having Interest Periods which end on or prior to such Monthly Payment Date
shall be at least equal to the aggregate principal amount of Eurodollar Loans
due and payable on or prior to such Monthly Payment Date, and (iv) no Interest
Period may end later than the Maturity Date.

           

          “Interest Period
Notice” means a notice in substantially the form attached hereto as Exhibit 3.03,
executed by an Authorized Officer of the Borrower Agent.

           

           “Interim Order” means
the order of the Bankruptcy Court entered in the Chapter 11 Cases after an
interim hearing, substantially in the form attached hereto as Schedule 2.01 or
such other form satisfactory to the Lenders and the Administrative Agent
together with all extensions, modifications, and amendments thereto that are
satisfactory to the Lenders and the Administrative Agent. The Interim Order
shall authorize and approve the transactions contemplated by the Financing
Documents and find that the Lenders are extending credit to the Debtors in good
faith within the meaning of Bankruptcy Code section 364(e) and shall set
forth provisions (i) approving in all respects the
Financing Documents, and authorizing and directing the Debtors to execute and
become bound by the Financing Documents; (ii) modifying the automatic
stay to the extent necessary to permit or effectuate the terms of the Interim
Order and the Financing Documents,
including to permit the creation and perfection of the Collateral Agent’s Liens
on the Collateral; (iii) providing for the automatic relief of such stay to
permit the enforcement of the Administrative Agent’s and the Lenders’ remedies
under the DIP Facility, subject to the right of the Debtors and/or the Committee
to re-impose or continue the automatic stay; and (iv) providing that the Debtors
acknowledge (a) the validity and enforceability of the Pre-Petition Obligations, without defense, offset
or counterclaim of any kind, (b) the validity, perfection and priority of the
Liens securing the Pre-Petition
Obligations, and that the Debtors waive any right to challenge or contest such
claims and liens and (c) that the Debtors have no valid claims or causes of
action, whether based in contract, tort or otherwise against the Pre-Petition Administrative Agent or any Pre-Petition Senior Secured Party with respect to
the Pre-Petition Credit Agreement or the
related documents or transactions.

           


          
            
               


            

            
              Exhibit A
- 18

              
                

              

            

            
               


            

          


          “Inventory” has the
meaning set forth in Section 9-102 of the UCC.

           

          “Investment Property”
has the meaning set forth in Section 9-102 of the UCC.

           

          “Kinergy” means
Kinergy Marketing, LLC, an Oregon limited liability company.

           

          “Law” means, with
respect to any Governmental Authority, any constitutional provision, law,
statute, rule, regulation, ordinance, treaty, order, decree, judgment, decision,
common law, holding, injunction, Governmental Approval or requirement of such
Governmental Authority.  Unless the context clearly requires
otherwise, the term “Law” shall include
each of the foregoing (and each provision thereof) as in effect at the time in
question, including any amendments, supplements, replacements, or other
modifications thereto or thereof, and whether or not in effect as of the date of
this Agreement.

           

          “Leased Premises”
means, with respect to the Boardman Plant, the Premises, as defined in the
Boardman Lease and, with respect to the Stockton Plant, the Premises, as defined
in the Stockton Lease.

           

          “Leases” means,
collectively, the Boardman Lease and the Stockton Lease.

           

          “Lender Assignment
Agreement” means a Lender Assignment Agreement, substantially in the form
of Exhibit 11.03.

           

          “Lenders” means the
persons identified as “Lenders” and listed on the signature pages of this
Agreement and each other Person that acquires the rights and obligations of a
Lender hereunder pursuant to Section 11.03
(Assignments).

           

          “LIBOR” means, for any
Interest Period for any Eurodollar Loan:

           

          (a)           the
rate per annum equal to the rate determined by the Administrative Agent to be
the offered rate that appears on the page of the Telerate Screen (or any
successor thereto) that displays an average British Bankers Association Interest
Settlement Rate for deposits in Dollars (for delivery on the first day of such
Interest Period) with a term equivalent to such Interest Period, determined as
of approximately 11:00 a.m. (London time) two (2) Business Days prior to the
first day of such Interest Period; or

           

          (b)           if
the rate referenced in the preceding clause (a) does not appear on such page or
service or such page or service is not available, the rate per annum equal to
the rate determined by the Administrative Agent to be the offered rate on such
other page or other service that displays an average British Bankers Association
Interest Settlement Rate for deposits in Dollars (for delivery on the first day
of such Interest Period) with a term equivalent to such Interest Period,
determined as of approximately 11:00 a.m. (London time) two (2) Business Days
prior to the first day of such Interest Period; or

           

          (c)           if
the rates referenced in the preceding clauses (a) and (b) are not available, the
rate per annum determined by the Administrative Agent as the rate of interest at
which deposits in Dollars for delivery on the first day of such Interest Period
in same day funds in the approximate amount of the Eurodollar Loan being made,
continued or converted and with a term equivalent to such Interest Period would
be offered by WestLB to major banks in the London interbank eurodollar market at
their request at approximately 4:00 p.m. (London time) two (2) Business Days
prior to the first day of such Interest Period.

           


          
            
               


            

            
              Exhibit A
- 19

              
                

              

            

            
               


            

          


          Notwithstanding
the foregoing, in no event shall LIBOR be less than a rate per annum equal to
four percent (4%).

           

          “Lien” means any
security interest, mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, bailment, conditional sales or title retention
agreement, lien (statutory or otherwise), charge against or interest in
property, in each case of any kind, to secure payment of a debt or performance
of an obligation.

           

          “Loans” means,
collectively, the Revolving Loans and the Roll Up Loans.

           

          “Local Account” means
any local bank account (other than the Project Accounts) in the name of any
Borrower.

           

          “Madera” has the
meaning set forth in the Preamble.

           

          “Madera Deed of Trust”
means the Deed of Trust, Security Agreement, Financing Statement, Fixture Filing
and Assignment of Leases, Rents and Security Deposits, dated on or about the
date of the Pre-Petition Credit Agreement, made by Madera to Stewart Title
Guaranty Company, as trustee, for the benefit of the Pre-Petition Collateral
Agent, as beneficiary.

           

          “Madera DG Agreement”
the WDG Marketing and Services Agreement, dated March 4, 2005, among Madera,
Phoenix Bio Industries and Western Milling, LLC.

           

          “Madera Plant” means
the ethanol production facility located at Madera, California, with an expected
capacity of approximately forty (40) million gallons-per-year of denatured
ethanol, including the Site on which such facility is located, and all
buildings, structures, improvements, easements and other property related
thereto.

           

          “Madera Pledge
Agreement” means the Pledge and Security Agreement, dated on or about the
date of the Pre-Petition Credit Agreement, among, Pacific Holding, Madera and
the Pre-Petition Collateral Agent, pursuant to which Pacific Holding pledges one
hundred percent (100%) of the Equity Interests in Madera to the Pre-Petition
Collateral Agent.

           

          “Madera Security
Agreement” means the Assignment and Security Agreement, dated on or about
the date of the Pre-Petition Credit Agreement, made by Madera in favor of the
Pre-Petition Collateral Agent.

           

          “Maintenance Capital
Expenses” means all expenditures by the Borrowers for regularly scheduled
(or reasonably anticipated) major maintenance of the Project, Prudent Ethanol
Operating Practice and vendor and supplier requirements constituting major
maintenance (including teardowns, overhauls, capital improvements, replacements
and/or refurbishments of major components of the Project).

           

          “Major Project Party”
means each of Delta-T, Pacific Ethanol, the Operator, the landlord under each
Lease, the guarantor guarantying the obligations of any other Major Project
Party and any other Project Party designated as a Major Project Party by the
Administrative Agent and the Borrower Agent.

           


          
            
               


            

            
              Exhibit A
- 20

              
                

              

            

            
               


            

          


          “Mandatory Prepayment”
means a prepayment in accordance with Section 3.08
(Mandatory
Prepayment).

           

          “Material Adverse
Effect” means any event, development or circumstance that has had or
could reasonably be expected to have a material adverse effect in respect of any
Plant or the Project on (i) the business, assets, property, condition (financial
or otherwise) or operations (as applicable) of any Debtor, (ii) the ability of
Pacific Holding or any other Borrower or any Project Party to perform its
material obligations under any Transaction Document to which it is a party,
(iii) creation, perfection or priority of the Liens granted, or purported to be
granted, in favor, or for the benefit, of the Collateral Agent or (iv) the
rights or remedies of any Senior Secured Party under any Financing Document;
provided that clauses (i) or (ii) of this definition shall not be a Material
Adverse Effect with respect to any Borrower if such event, development or
circumstance is an Effect of Bankruptcy or results from the Cold Shutdown of a
Plant.

           

          “Materials of Environmental
Concern” means chemicals, pollutants, contaminants, wastes, toxic
substances and hazardous substances, any toxic mold, radon gas or other
naturally occurring toxic or hazardous substance or organism and any material
that is regulated in any way, or for which liability is imposed, pursuant to an
Environmental Law.

           

          “Maturity Date” means
the earliest of (i) six (6) months after the Closing Date; (ii) the
acceleration of all or any portion of the Obligations; (iii) the first Business
Day on which the Interim Order expires by its terms or is terminated, unless the
Final Order shall have been entered and become effective prior thereto; (iv) the
conversion of any of the Chapter 11 Cases to a case under chapter 7 of the
Bankruptcy Code unless otherwise consented to in writing by the Administrative
Agent and the Lenders; (v) the dismissal of any of the Chapter 11 Cases unless
otherwise consented to in writing by the Administrative Agent and the Lenders;
and (vi) the effective date of any Debtor’s plan of reorganization confirmed in
the Chapter 11 Cases.

           

          “Maximum Rate” has the
meaning provided in Section 11.10
(Interest
Rate Limitation).

           

          “Monthly Budget
Period” means the period of four (4) consecutive weeks starting on the
first day of the period covered by the Initial DIP Budget in effect as of the
date hereof, and each successive period of four (4) consecutive weeks thereafter
starting on the 2nd week
of the initial (4) consecutive week period.

           

          “Monthly Date” means
the last Business Day of each calendar month.

           

          “Monthly Payment Date”
means the first Business Day of each calendar month.

           

          “Monthly Period” means
each one (1) month period beginning on (and including) the day immediately
following a Monthly Payment Date and ending on (and including) the next Monthly
Payment Date.

           

          “Moody’s” means
Moody’s Investors Service Inc., and any successor thereto that is a nationally
recognized rating agency.

           


          
            
               


            

            
              Exhibit A
- 21

              
                

              

            

            
               


            

          


          “Mortgaged Property”
means all real property right, title and interest of each Borrower that is
subject to the relevant New Mortgage in favor of the Collateral
Agent.

           

          “Mortgages” means,
together, the Madera Deed of Trust, the Boardman Deed of Trust, the Stockton
Deed of Trust and the Burley Deed of Trust.

           

          “Multiemployer Plan”
means a Plan that is a “multiemployer plan” as defined in
Section 4001(a)(3) of ERISA.

           

          “Necessary Project
Approvals”  means (i) all material Governmental Approvals that
are required under applicable Law to be obtained by any Borrower in connection
with the construction and operation of a Plant at its full nameplate capacity as
contemplated by the Transaction Documents and (ii) the Governmental Approvals
described in Section 5.03(a)
(Governmental
Approvals).

           

          “Necessary Project
Contracts”  means all material contracts, agreements,
instruments, letters, understandings, or other documentation that are required
under to be obtained by any Borrower in connection with the operation of the
applicable Plant as contemplated by the Transaction Documents.

           

          “Net Cash Proceeds”
means with respect to any receipt of Insurance Proceeds, Condemnation Proceeds,
or Project Document Termination Payments, or any Disposition of any Property or
assets, or the incurrence of any Indebtedness, including pursuant to section
364(b), 364(c) or 364(d) of the Bankruptcy Code in violation of the terms of the
Final Order or this Agreement, as the case may be, the aggregate amount of cash
received from time to time (whether as initial consideration or through payment
or disposition of deferred consideration) by or on behalf of such Person for its
own account in connection with any such transaction, after deducting therefrom
only:

           

          (a)           related
expenses, including reasonable and customary brokerage commissions, underwriting
fees and discounts, legal fees, finder’s fees and other fees, costs and
commissions that, in each case, are actually paid or required to be paid to a
Person that is not a Subsidiary or Affiliate of any of the Borrowers or any of
their respective Subsidiaries or Affiliates;

           

          (b)           the
amount of taxes payable in connection with or as a result of such transaction
that, in each case, are actually paid at the time of receipt of such cash to the
applicable taxation authority or other Governmental Authority or, so long as
such Person is not otherwise indemnified therefor, are reserved for in
accordance with GAAP, as in effect at the time of receipt of such cash, based
upon such Person’s reasonable estimate of such taxes payable. to the applicable
taxation authority or other Governmental Authority; and

           


          
            
               


            

            
              Exhibit A
- 22

              
                

              

            

            
               


            

          


          (c)           reasonable
amounts (without duplication) provided as a reserve, in accordance with GAAP,
against (i) any liabilities under any indemnification obligations associated
with such transaction or (ii) in the case of any Disposition of any Property or
asset, any other liabilities retained by any Borrower associated with the
Property or assets sold in such Disposition;

           

          provided that, any
and all amounts so deducted by any such Person pursuant to clauses
(a) through (c) of this definition shall be properly attributable to such
transaction or to the Property or asset that is the subject thereof; provided, further, that if, at
the time any of the amounts referred to in clauses (b) or (c) are actually paid
or otherwise satisfied, the reserve therefor exceeds the amount paid or
otherwise satisfied, then the amount of such excess reserve shall constitute
“Net Cash Proceeds” on and as of the date of such payment or other satisfaction
for all purposes of this Agreement and, to the extent required under Section 3.08 (Mandatory
Prepayment), the Borrowers
shall, within three (3) Business Days of such date, prepay the Loans in
accordance with the terms of Section 3.08 (Mandatory
Prepayment), in an amount equal
to the amount of such excess reserve.

           

          “New Boardman Deed of
Trust” means the Leasehold Trust Deed, Security Agreement, Financing
Agreement, Fixture Filing and Assignment of Leases, Rents and Security Deposits,
dated on or about the date hereof, made by Boardman to Stewart Title Guaranty
Company, as trustee, for the benefit of the Collateral Agent, as
beneficiary.

           

          “New Burley Deed of
Trust” means the Mortgage, Security Agreement, Financing Statement,
Fixture Filing and Assignment of Leases, Rents and Security Deposits, dated on
or about the date hereof, made by Burley to Stewart Title Guaranty Company, as
trustee, for the benefit of the Collateral Agent, as beneficiary.

           

          “New Madera Deed of
Trust” means the Deed of Trust, Security Agreement, Financing Statement,
Fixture Filing and Assignment of Leases, Rents and Security Deposits, dated on
or about the date hereof, made by Madera to Stewart Title Guaranty Company, as
trustee, for the benefit of the Collateral Agent, as beneficiary.

           

          “New Stockton Deed of
Trust” means the Deed of Trust, Security Agreement, Financing Statement,
Fixture Filing and Assignment of Leases, Rents and Security Deposits, dated on
or about the date hereof, made by Stockton to Stewart Title Guaranty Company, as
trustee, for the benefit of the Collateral Agent, as beneficiary.

           

          “Non-Appealable”
means, with respect to any specified time period allowing an appeal of any
ruling under any constitutional provision, Law, statute, rule, regulation,
ordinance, treaty, order, decree, judgment, decision, certificate, holding or
injunction that such specified time period has elapsed without an appeal having
been brought.

           

          “Non-Voting Lender”
means any Lender who (a) is a Defaulting Lender, (b) is also a Borrower, a
Project Party or any Affiliate or Subsidiary thereof or (c) has sold a
participation in the Loan held by it to any such Person.

           

          “Non-U.S. Lender” has
the meaning set forth in Section 4.07(e)
(Taxes -
Foreign Lenders).

           


          
            
               


            

            
              Exhibit A
- 23

              
                

              

            

            
               


            

          


          “Notes” means the
Revolving Notes and the Roll Up Notes, including any promissory notes issued by
any Borrower in connection with assignments of any Loan of a Lender, in each
case substantially in the form of Exhibit 2.05, as
they may be amended, restated, supplemented or otherwise modified from time to
time.

           

          “O&M Agreements”
means each Operation and Maintenance Agreement between any Borrower and the
Operator.

           

          “Obligations” means
and includes all loans, advances, debts, liabilities, Indebtedness and
obligations of the Borrowers and PEC, howsoever arising, owed to the Agents, the
Lenders or any other Senior Secured Party of every kind and description (whether
or not evidenced by any note or instrument and whether or not for the payment of
money), direct or indirect (including those acquired by assumption), absolute or
contingent, due or to become due, now existing or hereafter arising, including
the Revolving Loans and the Roll Up Loans and including interest and fees that
accrue after the commencement by or against any Borrower of any insolvency
proceeding naming such Borrower as the debtor in such proceeding, regardless of
whether such interest and fees are allowed claims in such proceeding, pursuant
to the terms of this Agreement or any of the other Financing Documents,
including all principal, interest, fees, charges, expenses, attorneys’ fees,
costs and expenses, accountants’ fees and Consultants’ fees payable by the
Borrowers hereunder or thereunder.

           

          “Offtaker” means each
counterparty to each DG Offtake Agreement and each Ethanol Offtake
Agreement.

           

          “Operating Statement”
means an operating statement with respect to each Plant  substantially
in the form of Exhibit 7.03(p)
to the Pre-Petition Credit Agreement.

           

          “Operator” means PEC
or any successor pursuant to an O&M Agreement (or any replacement
thereof).

           

          “Orders” means,
collectively, the Final Order and the Interim Order.

           

          “Organic Documents”
means, with respect to any Person that is a corporation, its certificate of
incorporation, its by-laws and all shareholder agreements, voting trusts and
similar arrangements applicable to any of its authorized shares of capital stock
and, with respect to any Person that is a limited liability company, its
certificate of formation or articles of organization and its limited liability
agreement.

           

          “Other Collateral”
means any property of a Debtor not (i) included within the defined terms
Accounts, Chattel Paper, Commercial Tort Claims, Documents, Equipment, Fixtures,
General Intangibles, Instruments, Inventory, Investment Property and Pledged
Deposits, including all cash on hand, letter-of-credit rights, letters of
credit, Stock Rights and Deposit Accounts or other deposits (general or special,
time or demand, provisional or final) with any bank or other financial
institution and (ii) excluded from the defined term Collateral.

           

          “Pacific Ag Products”
means Pacific Ag Products, LLC, a California limited liability
company.

           


          
            
               


            

            
              Exhibit A
- 24

              
                

              

            

            
               


            

          


          “Pacific Ethanol”
means Pacific Ethanol, Inc., a Delaware corporation.

           

          “Pacific Ethanol
Guarantees” means each guaranty to be made by Pacific Ethanol,
guaranteeing the performance and payment of the obligations of Kinergy or
Pacific Ag Products, as the case may be, under each of the Ethanol Offtake
Agreements, DG Offtake Agreements, and Grain Supply Agreements to which Kinergy
or Pacific Ag Products are party.

           

          “Pacific Holding” has
the meaning set forth in the Preamble.

           

          “Pacific Holding Pledge
Agreement” means the Pledge and Security Agreement, dated on or about the
date of the Pre-Petition Credit Agreement, among Pacific Holding, PEC and the
Pre-Petition Collateral Agent.

           

          “Pacific Holding Security
Agreement” means the Assignment and Security Agreement, dated on or about
the date of the Pre-Petition Credit Agreement, made by Pacific Holding in favor
of the Pre-Petition Collateral Agent.

           

          “Participant” has the
meaning provided in Section 11.03(d)
(Assignments).

           

          “Patriot Act” means
United States Public Law 107-56, Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT ACT)
of 2001, and the rules and regulations promulgated thereunder from time to time
in effect.

           

          “PBGC” means the
Pension Benefit Guaranty Corporation and any entity succeeding to any or all of
its functions under ERISA.

           

          “PE Leases” means, in
each case as in effect on the date hereof, (i) the Equipment Lease Agreement,
dated as of October 1, 2007, between Pacific Ethanol Imperial, LLC and Burley,
(ii) the Equipment Lease Agreement, dated as of July 22, 2008, between Pacific
Ethanol Imperial, LLC and Boardman, (iii) the Equipment Lease Agreement, dated
as of February 1, 2008, between Pacific Ethanol Imperial, LLC and Madera and
(iv) the Equipment Lease Agreement, dated as of April 15, 2008, between Pacific
Ethanol Imperial, LLC and Stockton.

           

          “PEC” means Pacific
Ethanol California, Inc., a California corporation.

           

          “PEC Pledge Agreement”
means the Pledge and Security Agreement, dated on or about the date hereof,
among PEC, Pacific Holding and the Collateral Agent.

           

           “Period Start Date”
has the meaning set forth in Section 7.01(l) (DIP
Budget).

           

          “Permitted
Indebtedness” means Indebtedness identified in Section 7.02(a)
(Negative
Covenants - Restrictions on Indebtedness).

           

          “Permitted Liens”
means Liens identified in Section 7.02(b)
(Negative
Covenants - Liens).

           


          
            
               


            

            
              Exhibit A
- 25

              
                

              

            

            
               


            

          


          “Permitted Variance”
means, for each Monthly Budget Period, the product of (x) the aggregate
amount of the DIP Budget for such Monthly Budget Period and
(y) 10%.

           

          “Person” means any
natural person, corporation, partnership, limited liability company, firm,
association, trust, government, governmental agency or any other entity, whether
acting in an individual, fiduciary or other capacity.

           

          “Petition Date” has
the meaning set forth in the Recitals.

           

          “Plan” means an
employee pension benefit plan (as defined in Section 3(3) of ERISA) subject
to Title IV of ERISA or Section 412 of the Code that is sponsored or
maintained by any Borrower or any ERISA Affiliate, or in respect of which any
Borrower or any ERISA Affiliate has any obligation to contribution or
Liability.

           

          “Plants” means,
collectively, the Madera Plant, the Boardman Plant, the Stockton Plant and the
Burley Plant.

           

          “Pledge Agreements”
means, collectively, the Madera Pledge Agreement, the Boardman Pledge Agreement,
the Stockton Pledge Agreement, the Burley Pledge Agreement  and the
Pacific Holding Pledge Agreement.

           

          “Pledged Deposits”
means all time deposits of money (other than Deposit Accounts and Instruments),
whether or not evidenced by certificates, pledged by any Debtor as security for
any Obligations, and all rights to receive interest on such
deposits.

           

          “Post-Petition” means
the time period beginning immediately upon the filing of the Chapter 11
Cases.

           

          “Pre-Petition” means
the time period ending immediately prior to the filing of the Chapter 11
Cases.

           

          “Pre-Petition Administrative
Agent” has the meaning assigned to the term “Administrative Agent” in the
Pre-Petition Credit Agreement.

           

          “Pre-Petition Collateral
Agent” has the meaning assigned to the term “Collateral Agent” in the
Pre-Petition Credit Agreement.

           

          “Pre-Petition Credit
Agreement” has the meaning set forth in the Recitals.

           

          “Pre-Petition Financing
Documents” has the meaning assigned to the term “Financing Documents” in
the Pre-Petition Credit Agreement.

           

          “Pre-Petition
Obligations” has the meaning assigned to the term “Obligations” in the
Pre-Petition Credit Agreement.

           

          “Pre-Petition Senior Secured
Parties” has the meaning assigned to the term “Senior Secured Parties” in
the Pre-Petition Credit Agreement.

           


          
            
               


            

            
              Exhibit A
- 26

              
                

              

            

            
               


            

          


          “Pre-Petition Term
Loans” has the meaning assigned to the term “Term Loans” in the
Pre-Petition Credit Agreement.

           

          “Priming Liens” has
the meaning set forth in Section 2.09 (b)
(Super-Priority
Nature of Obligations).

           

          “Products” means
ethanol, Distillers Grains, carbon dioxide, and any other co product or
by-product produced in connection with the production of ethanol at the
Plants.

           

          “Project” means each
Plant and all auxiliary and other facilities constructed or to be constructed by
or on behalf of the applicable Borrowers pursuant to the Project Documents
relating to each such Plant or otherwise, together with all fixtures and
improvements thereto and each Site and all other real property, easements and
rights-of-way held by or on behalf of the applicable Borrowers and all rights to
use easements and rights-of-way of others.

           

          “Project Accounts” has
the meaning provided in the Pre-Petition Credit Agreement.

           

           “Project Document
Guarantees” means each guarantee (by an Affiliate or otherwise) of the
performance of any Project Party’s obligations under a Project Document,
including the Pacific Ethanol Guarantees and any other such guarantee required
as a condition to approval of any Project Document in accordance with this
Agreement.

           

          “Project Document Termination
Payments” means all Net Cash Proceeds of payments that are required to be
paid to or for the account of any Borrower as a result of the termination of any
Project Document or any Additional Project Document.

           

          “Project Documents”
means:

           

          
            	
                     
      

                  	
                    (i)

                  	
                    the
      Construction Contracts;

                  


          

           

          
            	
                     
      

                  	
                    (ii)

                  	
                    the
      Leases;

                  


          

           

          
            	
                     
      

                  	
                    (iii)

                  	
                    the
      Grain Supply Agreements;

                  


          

           

          
            	
                     
      

                  	
                    (iv)

                  	
                    the
      Asset Management Agreement;

                  


          

           

          
            	
                     
      

                  	
                    (v)

                  	
                    the
      Ethanol Offtake Agreements;

                  


          

           

          
            	
                     
      

                  	
                    (vi)

                  	
                    the
      DG Offtake Agreements;

                  


          

           

          
            	
                     
      

                  	
                    (vii)

                  	
                    the
      O&M Agreements;

                  


          

           

          
            	
                     
      

                  	
                    (viii)

                  	
                    the
      Borrower LLC Agreements;

                  


          

           

          
            	
                     
      

                  	
                    (ix)

                  	
                    the
      Project Document Guarantees;

                  


          

           

          
            	
                     
      

                  	
                    (x)

                  	
                    each
      Additional Project Document; and

                  


          

           

          
            	
                     
      

                  	
                    (xi)

                  	
                    any
      replacement agreement for any of such
  agreements.

                  


          

           


          
            
               


            

            
              Exhibit A
- 27

              
                

              

            

            
               


            

          


          


           

          “Project Party” means
each Person (other than the Borrowers) who is a party to a Project
Document.

           

          “Property” means any
right or interest in or to property of any kind whatsoever, whether real,
personal or mixed and whether tangible or intangible, including without
limitation, Equity Interests.

           

          “Prudent Ethanol Operating
Practice” means those reasonable practices, methods and acts that (i) are
commonly used in the regions where the Plants are located to manage, operate and
maintain ethanol production, distribution, equipment and associated facilities
of the size and type that comprise the Project safely, reliably, and efficiently
and in compliance with applicable Laws, manufacturers’ warranties and
manufacturers’ and licensor’s recommendations and guidelines, and (ii) in the
exercise of reasonable judgment, skill, diligence, foresight and care are
expected of an ethanol plant operator, in order to efficiently accomplish the
desired result consistent with safety standards, applicable Laws, manufacturers’
warranties, manufacturers’ recommendations and, in the case of the Project, the
Project Documents.  Prudent Ethanol Operating Practice does not
necessarily mean one particular practice, method, equipment specifications or
standard in all cases, but is instead intended to encompass a broad range of
acceptable practices, methods, equipment specifications and
standards.

           

          “RCRA” means the
Resource Conservation and Recovery Act (42 U.S.C. § 6901 et seq.), as amended,
and all rules, regulations, standards, guidelines, and publications issued
thereunder.

           

          “Recovery Event” means
(i) any settlement of or payments in respect of any insurance policies required
pursuant to the Transaction Documents or otherwise obtained with respect to any
Borrower, any Plant or the Project or (ii) any Event of Taking.

           

          “Register” has the
meaning set forth in Section 11.03(c)
(Assignments).

           

          “Related Parties”
means, with respect to any Person, such Person’s Affiliates and the partners,
directors, officers, employees, agents and advisors of such Person and of such
Person’s Affiliates.

           

          “Removal,” “Remedial” and “Response” actions
shall include the types of activities covered by CERCLA, RCRA, and other
comparable Environmental Laws, and whether the activities are those which might
be taken by a Governmental Authority or those which a Governmental Authority or
any other Person might seek to require of waste generators, handlers,
distributors, processors, users, storers, treaters, owners, operators,
transporters, recyclers, reusers, disposers, or other Persons under “removal,”
“remedial,” or other “response” actions.

           

          “Reportable Event”
means a “reportable event” within the meaning of Section 4043(c) of
ERISA.

           


          
            
               


            

            
              Exhibit A
- 28

              
                

              

            

            
               


            

          


          “Required Lenders”
means Lenders (excluding all Non-Voting Lenders) holding in excess of fifty
percent (50.00%) of an amount equal to (x) the then aggregate outstanding
principal amount of the Loans plus (y) the undisbursed amount of the Aggregate
Revolving Loan Commitment plus (z) the undisbursed amount of the Aggregate Roll
Up Loan Commitment (excluding the principal amounts of any Loans made by, and
any Revolving Loan Commitments and Roll Up Loan Commitments of, any Non-Voting
Lenders); provided that the undisbursed Revolving Loan Commitment and Roll Up Loan Commitment
of, and the portion of the outstanding principal amount of the Loans held by, any Defaulting Lender shall be excluded for
purposes of making a determination of Required Lenders.

           

          “Restricted Payments”
means any (a) dividend or other distribution (whether in cash, securities or
other property), or any payment (whether in cash, securities or other property),
including any sinking fund or similar deposit, on account of the purchase,
redemption, retirement, defeasance, acquisition, cancellation or termination of
any Equity Interests of any Borrower, or on account of any return of capital to
any holder of any such Equity Interest in, or any other Affiliate of, any
Borrower, or any option, warrant or other right to acquire any such dividend or
other distribution or payment and (b) any payment of any management,
consultancy, administrative, services, or other similar payments to any Person
who owns, directly or indirectly, any Equity Interest in any Borrower, or any
Affiliate of any such Person except to the extent provided in the then-current
DIP Budget.

           

          “Revenue Account”
means a special, segregated, Dollar-denominated account established at the
Accounts Bank entitled “Amarillo Control - Pacific Ethanol Holding Co. LLC
Revenue Account”, Account No. 128864.

           

          “Revolving Lenders”
means those Lenders of Revolving Loans, as identified on Schedule 1.01,
and each other Person that acquires the rights and obligations of any such
Lender pursuant to Section 11.03
(Assignments).

           

          “Revolving Loan
Commitment” means, with respect to each Lender, the commitment of such
Lender to make Revolving Loans, as set forth opposite the name of
such  Lender in Schedule 1.01,
as the same may be reduced in accordance with Section 2.06
(Termination
of Commitments).

           

          “Revolving Loan Commitment
Percentage” means, as to any Lender at any time, the percentage that such
Lender’s Revolving Loan Commitment then constitutes of the Aggregate Revolving
Loan Commitment.

           

          “Revolving Loans” has
the meaning provided in Section 2.01(a)
(Revolving
Loans).

           

          “Revolving Notes”
means the promissory notes of each Borrower evidencing Revolving
Loans.

           

          “Roll Up Lenders”
means those Lenders of Roll Up Loans, as identified on Schedule 1.01,
and each other Person that acquires the rights and obligations of any such
Lender pursuant to Section 11.03
(Assignments).

           


          
            
               


            

            
              Exhibit A
- 29

              
                

              

            

            
               


            

          


          “Roll Up Loan
Commitment” means, with respect to each Lender, the commitment of such
Lender to make Roll Up Loans, as set forth opposite the name of
such  Lender in Schedule 1.01,
as the same may be reduced in accordance with Section 2.06
(Termination
of Commitments).

           

          “Roll Up Loan Commitment
Percentage” means, as to any Lender at any time, the percentage that such
Lender’s Roll Up Loan Commitment then constitutes of the Aggregate Roll Up Loan
Commitment.

           

          “Roll Up Loans” has
the meaning provided in Section 2.02(a)
(Roll Up
Loans).

           

          “Roll Up Notes” means
the promissory notes of each Borrower evidencing Roll Up Loans.

           

          “S&P” means
Standard & Poor’s Ratings Services, a division of The McGraw Hill Companies,
Inc., and any successor thereto that is a nationally recognized rating
agency.

           

          “Section 506(a)
Determination”  means a determination under Section 506(a) of
the Bankruptcy Code.

           

          “Security Agreements”
means, collectively, the Madera Security Agreement, the Boardman Security
Agreement, the Stockton Security Agreement, the Burley Security Agreement and
the Pacific Holding Security Agreement.

           

          “Senior Secured
Parties” means the Lenders, the Agents and each of their respective
successors, transferees and assigns.

           

          “Site” means, with
respect to each Plant, those certain parcels described on Schedule 5.13(a)
to the Pre-Petition Credit Agreement with respect to such Plant.

           

          “Sponsor Support
Agreement” means the Sponsor Support Agreement, dated on or about the
date of the Pre-Petition Credit Agreement, pursuant to which Pacific Ethanol
agrees to provide support for the Project on the terms and conditions set forth
therein.

           

          “SPV” has the meaning
provided in Section 11.03(h)
(Assignments).

           

          “Stock Rights” means
any securities, dividends or other distributions and any other right or property
which a Debtor shall receive or shall become entitled to receive for any reason
whatsoever with respect to, in substitution for or in exchange for any
securities or other ownership interests in a corporation, partnership, joint
venture or limited liability company constituting Collateral and any securities,
any right to receive securities and any right to receive earnings, in which a
Debtor now has or hereafter acquires any right, issued by an issuer of such
securities.

           

          “Stockton” has the
meaning set forth in the Preamble.

           


          
            
               


            

            
              Exhibit A
- 30

              
                

              

            

            
               


            

          


          “Stockton Deed of
Trust” means the Deed of Trust, Security Agreement, Financing Statement,
Fixture Filing and Assignment of Leases, Rents and Security Deposits, in
substantially the form of Exhibit 6.04(g)-A
to the Pre-Petition Credit Agreement.

           

          “Stockton Lease” means
the lease between the Stockton Port District and Stockton.

           

          “Stockton Plant” means
the ethanol production facility located at Stockton, California, with a design
basis capacity of approximately fifty (50) million gallons-per-year of denatured
ethanol, including the Site on which such facility is located, and all
buildings, structures, improvements, easements and other property related
thereto.

           

          “Stockton Pledge
Agreement” means the Pledge and Security Agreement, in substantially the
form of Exhibit 6.04(g)-B
to the Pre-Petition Credit Agreement, entered into among Pacific Holding,
Stockton and the Pre-Petition Collateral Agent.

           

          “Stockton Security
Agreement” means the Assignment and Security Agreement, in substantially
the form of Exhibit 6.04(g)-C
to the Pre-Petition Credit Agreement entered into by Stockton in favor of the
Pre-Petition Collateral Agent.

           

          “Subsidiary” of any
Person means a corporation, partnership, joint venture, limited liability
company or other business entity of which a majority of the shares of securities
or other Equity Interests having ordinary voting power for the election of
directors or other governing body (other than securities or interests having
such power only by reason of the happening of a contingency) are at the time
beneficially owned, or the management of which is otherwise controlled,
directly, or indirectly through one or more intermediaries, or both, by such
Person.

           

          “Supporting
Obligation” has the meaning set forth in Section 9-102 of the
UCC.

           

          “Swap Contract” means
(a) any and all rate swap transactions, basis swaps, credit derivative
transactions, forward rate transactions, commodity swaps, commodity options,
forward commodity contracts, equity or equity index swaps or options, bond or
bond price or bond index swaps or options or forward bond or forward bond price
or forward bond index transactions, interest rate options, forward foreign
exchange transactions, cap transactions, floor transactions, collar
transactions, currency swap transactions, cross-currency rate swap transactions,
currency options, spot contracts, or any other similar transactions or any
combination of any of the foregoing (including any options to enter into any of
the foregoing), whether or not any such transaction is governed by or subject to
any master agreement, (b) any and all transactions of any kind, and the related
confirmations, which are subject to the terms and conditions of, or governed by,
any form of master agreement published by the International Swaps and
Derivatives Association, Inc., any International Foreign Exchange Master
Agreement, or any other master agreement, including any such obligations or
liabilities under any such master agreement and (c) for the avoidance of doubt,
excludes any contract for the physical sale or purchase of any
commodity.

           


          
            
               


            

            
              Exhibit A
- 31

              
                

              

            

            
               


            

          


          “Swap Termination
Value” means, in respect of any one or more Swap Contracts, after taking
into account the effect of any legally enforceable netting agreement relating to
such Swap Contracts, (a) for any date on or after the date such Swap Contracts
have been closed out and termination value(s) determined in accordance
therewith, such termination value(s), and (b) for any date prior to the date
referenced in clause (a), the amount(s) determined as the mark-to-market
value(s) for such Swap Contracts, in accordance with the terms of the applicable
Swap Contract, or, if no provision is made therein, as determined based upon one
or more mid-market or other readily available quotations provided by any
recognized dealer in such Swap Contracts (which may include a Lender or any
Affiliate of a Lender).

           

          “Tax” or “Taxes” means any
present or future taxes (including income, gross receipts, license, payroll,
employment, excise, severance, stamp, documentary, occupation, premium, windfall
profits, environmental, capital stock, franchise, profits, withholding, social
security (or similar), unemployment, disability, real property, personal
property, sales, use, transfer, registration, value-added, ad valorem,
alternative or add-on minimum, estimated, or other tax of any kind whatsoever),
levies, imposts, duties, fees or charges (including any interest, penalty, or
addition thereof) imposed by any government or any governmental agency or
instrumentality or any international or multinational agency or
commission.

           

          “Tax Return” means all
returns, declarations, reports, claims for refund and information returns and
statements of any Person required to be filed with respect to, or in respect of,
any Taxes, including any schedule or attachment thereto and any amendment
thereof.

           

          “Termination Event”
means (i) a Reportable Event with respect to any ERISA Plan, (ii) the initiation
of any action by any Borrower, any ERISA Affiliate or any ERISA Plan fiduciary
to terminate an ERISA Plan (other than a standard termination under
Section 4041(b) of ERISA) or the treatment of an amendment to an ERISA Plan
as a termination under Section 4041(e) of ERISA, (iii) the institution of
proceedings by the PBGC under Section 4042 of ERISA to terminate an ERISA
Plan or to appoint a trustee to administer any ERISA Plan, (iv) the withdrawal
of any Borrower or any ERISA Affiliate from a Multiemployer Plan during a plan
year in which such Borrower or such ERISA Affiliate was a “substantial employer”
as defined in Section 4001(a)(2) of ERISA or the cessation of operations
which results in the termination of employment of twenty percent (20%) of
Multiemployer Plan participants who are employees of any Borrower or any ERISA
Affiliate, (v) the partial or complete withdrawal of any Borrower or any ERISA
Affiliate from a Multiemployer Plan, or (vi) any Borrower or any ERISA Affiliate
is in default (as defined in Section 4219(c)(5) of ERISA) with respect to
payments to a Multiemployer Plan.

           

          “Transaction
Documents” means, collectively, the Financing Documents and the Project
Documents.

           

          “Unfunded Benefit
Liabilities” means, with respect to any ERISA Plan at any time, the
amount (if any) by which (i) the present value of all accrued benefits
calculated on an accumulated benefit obligation basis and based upon the
actuarial assumptions used for accounting purposes (i.e., those determined
in accordance with FASB statement No. 35 and used in preparing the ERISA Plan’s
financial statements) exceeds (ii) the fair market value of all ERISA Plan
assets allocable to such benefits, determined as of the then most recent
actuarial valuation report for such ERISA Plan.

           


          
            
               


            

            
              Exhibit A
- 32

              
                

              

            

            
               


            

          


          “Uniform Commercial
Code” or “UCC” means the
Uniform Commercial Code as in effect from time to time in the State of New York;
provided, however, in the event
that, by reason of mandatory provisions of law, any or all of the perfection or
priority of the security interest in any Collateral is governed by the Uniform
Commercial Code as in effect in a jurisdiction other than the State of New York,
the term “UCC”
shall mean the Uniform Commercial Code as in effect in such other jurisdiction
for purposes of provisions relating to such perfection or priority and for
purposes of definitions related to such provisions.

           

          “United States” or
“U.S.” means
the United States of America, its fifty States and the District of
Columbia.

           

          “United States Person”
means a “United States person” as defined in Section 7701(a)(30) of the
Code.

           

          “WDG” means wet
distillers grains produced by the Borrowers at the Plants.

           

          “WestLB” means WestLB
AG, New York Branch.

           


          
            
               


            

            
              Exhibit A
- 33

              
                

              

            

            
               


            

          



         

         

        
          EXHIBIT
2.03

          to
DIP Credit Agreement

           

          [FORM
OF]

          FUNDING
NOTICE

           

          This
funding notice (this “Funding Notice”),
dated as of [                                                                           ],
200[
], is delivered
to WESTLB AG, NEW YORK BRANCH, as administrative agent (the "Administrative Agent”), pursuant to
Section 2.03 of the Debtor-In-Possession Credit Agreement, dated as of May ,
2009 (as amended, restated, supplemented or otherwise modified
from time to time, the “DIP Credit Agreement”), by
and among PACIFIC ETHANOL HOLDING CO. LLC, a Delaware limited liability company,
PACIFIC ETHANOL MADERA LLC, a Delaware limited liability company, PACIFIC
ETHANOL COLUMBIA, LLC, a Delaware limited liability company, PACIFIC ETHANOL
STOCKTON, LLC, a Delaware limited liability company and PACIFIC ETHANOL MAGIC
VALLEY, LLC, a Delaware limited liability company, as Borrowers, PACIFIC ETHANOL
HOLDING CO. LLC, as Borrower Agent, each of the Lenders from time to time party
hereto, WESTLB AG, NEW YORK BRANCH, as Administrative Agent for the Lenders,
WESTLB AG, NEW YORK BRANCH, as Collateral Agent for the Senior Secured Parties,
and AMARILLO NATIONAL BANK, as Accounts Bank. This Funding Notice sets forth
certain undertakings of the Borrowers with respect to the transactions
contemplated by the DIP Credit Agreement. Capitalized terms used herein but not
otherwise defined herein shall have the respective meanings set forth in the DIP
Credit Agreement.

           

          WHEREAS,
the Borrowers wish to propose a Funding under the DIP Credit Agreement in
accordance with Section 2.03 of the DIP Credit Agreement and on the terms and
conditions set forth therein and herein.

           

          WHEREAS,
to induce the Lenders to extend credit under the DIP Credit Agreement, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Borrowers hereby agree as follows:

           

          Section
1. Funding
Request. The Borrowers hereby irrevocably propose a Funding (the “Proposed Funding”)
of [ ]
Dollars ($[])
requested to be funded as [Eurodollar
Loans]
[and [                                             ]
Dollars ($[  
        ])
requested to be funded as]
[Base Rate Loans].

           

          The
Funding Date proposed for such Proposed Funding is [               
],
200[_]
(the “Proposed Funding
Date”). The Borrowers hereby certify that this Funding Notice is being
delivered to the Administrative Agent not later than 12:00 Noon New York City
time five (5) Business Days prior to the Proposed Funding Date, and that the
Proposed Funding Date is a Business Day.

           

          [The
duration of the initial Interest Period for the Eurodollar Loans requested as
[part
of]
the Proposed Funding is [             
    ]
([         
])
months.]

          


           

          
            
               


            

            
              2.03 -
1

              
                

              

            

            
               


            

          


          The
Borrowers hereby request that on the Proposed Funding Date the Administrative
Agent deliver by wire transfer, in immediately available funds, the proceeds of
such Proposed Funding to the Revenue Account.

           

          Section
2. Certifications. The
Borrowers certify that as of the Proposed Funding

          Date:

           

          (i)           each
of the conditions to the Proposed Funding set forth in Article VI of the DIP
Credit Agreement have been satisfied;

           

          (ii)           the
Borrowers are in compliance with all applicable conditions set forth in Article
VI of the DIP Credit Agreement, on and as of the Proposed Funding Date, before
and after giving effect to such Proposed Funding and to the application of the
proceeds therefrom;

           

          (iii)           each
of the representations and warranties made by each of the Borrowers in the
Financing Documents is true and correct in all material respects (except with
respect to representations and warranties that expressly refer to an earlier
date), before and after giving effect to the Proposed Funding and to the
application of the proceeds of such Proposed Funding;

           

          (iv)           no
Default or Event of Default has occurred and is continuing or would occur as a
result of the Proposed Funding;

           

          (v)           after
giving effect to the Loans requested hereunder, the aggregate principal amount
of the Loans will not exceed the Aggregate Commitment as of the Proposed Funding
Date;

           

          (vi)           each
Borrower has all Necessary Project Approvals required under the DIP Credit
Agreement as of the date of this Funding Notice, and the same are (i) properly
in the name of the appropriate Person, (ii) in full force and effect and (iii)
final and Non-Appealable, except as a result of the Cold Shutdown of the Madera
Plant, the Magic Valley Plant, the Stockton Plant and, after the Boardman CS
Date, the Boardman Plant; and

           

          (vii)         all
and each of the statements contained in this Funding Notice are true
and

          correct.

           

          Section
3. Governing
Law. This Funding Notice, and the rights and obligations of the parties
under this Agreement shall be governed by, and construed and interpreted in
accordance with, the laws of the State of New York.

           

          Section
4. Execution in
Counterparts. This Funding Notice may be executed by the parties hereto
in counterparts (and by different parties hereto in different counterparts),
each of which shall constitute an original, but all of which when taken together
shall constitute a single document.

           

          The
undersigned are executing this Funding Notice not in their individual capacities
but in their respective capacities as Authorized Officers of the
Borrowers.

           

          [The remainder of this page is
intentionally blank. The next page is the signature page.]

           

           

           


          
            
               


            

            
              2.03 -
2

              
                

              

            

            
               


            

          


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

           

          
            
              	 	
                      PACIFIC
      ETHANOL HOLDING CO, LLC

                    	 
	 	 	 	 
	
                       

                    	
                      By:
      

                    	/s/ Byron
      McGregor 	 
	 	 	
                      Name:
      Byron McGregor 

                    	 
	 	 	
                      Title:
      Vice President

                    	 
	 	 	 	 


            

          

           

          
            
              	 	PACIFIC
      ETHANOL MADERA LLC	 
	 	 	 	 
	
                       

                    	
                      By:
      

                    	/s/ 	 
	 	 	Name 	 
	 	 	Title 	 
	 	 	 	 


            

          

           

          
            
              	 	
                      PACIFIC
      ETHANOL COLUMBIA, LLC

                    	 
	 	 	 	 
	
                       

                    	
                      By:
      

                    	/s/ 	 
	 	 	Name 	 
	 	 	Title 	 
	 	 	 	 


            

          

           

          
            
              	 	
                      PACIFIC
      ETHANOL STOCKTON, LLC

                    	 
	 	 	 	 
	
                       

                    	
                      By:
      

                    	/s/ 	 
	 	 	Name 	 
	 	 	Title 	 
	 	 	 	 


            

          

           

          
            
              	 	
                      PACIFIC
      ETHANOL MAGIC VALLEY, LLC

                    	 
	 	 	 	 
	
                       

                    	
                      By:
      

                    	/s/ 	 
	 	 	Name 	 
	 	 	Title 	 
	 	 	 	 


            

          

           

           

          
            
               


            

            
              2.03 -
3

              
                

              

            

            
               


            

          


          EXHIBIT
2.05

          to
DIP Credit Agreement

           

           

          [FORM
OF NOTE]

          
            	
                    $[__________]

                  	
                    [__________________]

                  


          

           

          [__________],
[____]

           

          FOR VALUE
RECEIVED, PACIFIC ETHANOL HOLDING CO. LLC, PACIFIC ETHANOL MADERA LLC, PACIFIC
ETHANOL COLUMBIA, LLC, PACIFIC ETHANOL STOCKTON, LLC, AND PACIFIC ETHANOL MAGIC
VALLEY, LLC (collectively, the “Borrowers”), HEREBY JOINTLY AND SEVERALLY
PROMISE TO PAY to the order of [],
a []
(the “Lender”), at its offices located at [                                                ],
the principal sum of [                                                    ]
Dollars ($[                                    ])
or, if
less, the aggregate unpaid principal amount of the [Revolving] [Roll Up] Loans
made by the Lender to the Borrowers under the Debtor-In-Possession Credit
Agreement, dated as of May ___, 2009
(as amended, restated, supplemented or otherwise modified from time to time, the
“DIP Credit Agreement”) among
the Borrowers, jointly and severally, Pacific Ethanol Holding Co. LLC, as
Borrower Agent, each of the Lenders from time to time party thereto, WESTLB AG,
NEW YORK BRANCH, as Administrative Agent for the Lenders, WESTLB AG, NEW YORK
BRANCH, as Collateral Agent for the Senior Secured Parties, and AMARILLO
NATIONAL BANK, as Accounts Bank. Capitalized terms used herein but not otherwise
defined herein shall have the respective meanings set forth in the DIP Credit
Agreement.

           

          The
Borrowers also jointly and severally promise to pay (i) interest on the unpaid
principal amount hereof from the date hereof until paid in full at the rates and
at the times provided in the DIP Credit Agreement and (ii) fees at such times
and at such rates and amounts as specified in the DIP Credit
Agreement.

           

          Principal,
interest and fees are payable in lawful money of the United States of America
and in immediately available funds, at the times and in the amounts provided in
the DIP Credit Agreement.

           

          This
[Revolving][Roll Up] Note is entitled to the benefits and is subject to the
terms and conditions of the DIP Credit Agreement, and is entitled to the
benefits of the security contemplated by the Financing Documents. As provided in
the DIP Credit Agreement, this [Revolving] [Roll Up] Note is subject to
mandatory prepayment and voluntary prepayment, in whole or in part. The
Borrowers jointly and severally agree to make prepayment of principal on the
dates and in the amounts specified in the DIP Credit Agreement.

           

           

           


          
            
               


            

            
              2.05 -
1

              
                

              

            

            
               


            

          


          
             

            The DIP
Credit Agreement, among other things, contains provisions for acceleration of
the maturity hereof upon the happening of certain stated events.

             

          

          The
Lender is hereby authorized, at its option, either (i) to endorse on the
schedule attached hereto (or on a continuation of such schedule attached to this
[Revolving] [Roll Up] Note and made a part hereof) an appropriate notation
evidencing the date and amount of the [Revolving] [Roll Up] Loans evidenced
hereby and the date and amount of each principal payment in respect thereof, or
(ii) to record such [Revolving] [Roll Up] Loans and such payments in its books
and records. Such schedule or such books and records, as the case may be, shall
constitute prima facie evidence of the accuracy of the information contained
therein, but in no event shall any failure by the Lender to endorse or record
pursuant to clauses (i) and (ii) be deemed to relieve any Borrower from any of
its obligations.

           

          To the
extent provided under the DIP Credit Agreement and to the maximum extent
permitted by Law, each Borrower hereby waives presentment, demand, protest or
notice of any kind in connection with this [Revolving] [Roll Up] Note. All
amounts payable under this [Revolving] [Roll Up] Note are payable without relief
from valuation and appraisement Laws.

           

          The
Borrowers jointly and severally agree to pay all costs and expenses, including
without limitation attorneys' fees, incurred in connection with the
interpretation or enforcement of this [Revolving] [Roll Up] Note, in accordance
with and to the extent provided by the DIP Credit Agreement.

          


           

           

          
            
               


            

            
              2.05 -
2

              
                

              

            

            
               


            

          


          


          THIS
[REVOLVING][ROLL UP] NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK, UNITED STATES OF AMERICA, WITHOUT
REFERENCE TO CONFLICTS OF LAWS (OTHER THAN SECTION 5-1401 OF THE NEW YORK
GENERAL OBLIGATIONS LAW).

           

          
            
              	 	
                      PACIFIC ETHANOL HOLDING CO.
      LLC, a Delaware limited liability company

                    	 
	 	 	 	 
	
                       

                    	
                      By:
      

                    	/s/ 	 
	 	 	Name 	 
	 	 	Title 	 
	 	 	 	 


            

          

           

          
            
              	 	
                      PACIFIC ETHANOL MADERA
      LLC, a Delaware limited liability company

                    	 
	 	 	 	 
	
                       

                    	
                      By:
      

                    	/s/ 	 
	 	 	Name 	 
	 	 	Title 	 
	 	 	 	 


            

          

           

          
            
              	 	
                      PACIFIC ETHANOL COLUMBIA,
      LLC, a Delaware limited liability company

                    	 
	 	 	 	 
	
                       

                    	
                      By:
      

                    	/s/ 	 
	 	 	Name 	 
	 	 	Title 	 
	 	 	 	 


            

          

           

          
            
              	 	
                      PACIFIC ETHANOL STOCKTON,
      LLC, a Delaware limited liability company

                    	 
	 	 	 	 
	
                       

                    	
                      By:
      

                    	/s/ 	 
	 	 	Name 	 
	 	 	Title 	 
	 	 	 	 


            

          

           

          
            
              	 	
                      PACIFIC ETHANOL MAGIC VALLEY,
      LLC, a Delaware limited liability company

                    	 
	 	 	 	 
	
                       

                    	
                      By:
      

                    	/s/ 	 
	 	 	Name 	 
	 	 	Title 	 
	 	 	 	 


            

          

           


          
            
               


            

            
              2.05 -
3

              
                

              

            

            
               


            

          


          Schedule
to

          [
Revolving] [Roll Up] Note

          


          LOANS, MATURITIES AND
PAYMENTS OF PRINCIPAL

          


          
            	
                     

                     

                    Date

                  	
                     

                    Amount
      of

                    Loan

                  	
                     

                     

                    Maturity
      of Loan

                  	
                    Amount
      of

                    Principal
      Paid

                    or
      Prepaid

                  	
                     

                     

                    Unpaid
      Principal Balance

                  	
                    Notation
      Made By

                  
	 
      	 
      	 
      	 
      	 
      	 
      


          

          


           

           


          
            
               


            

            
              2.05 -
4

              
                

              

            

            
               


            

          


          EXHIBIT
3.03

          to
DIP Credit Agreement

           

          [FORM
OF]

          INTEREST
PERIOD NOTICE

           

          WestLB
AG, New York Branch,

          as
Administrative Agent for the Lenders 

          1211
Avenue of the Americas

          NY, New
York 10036

          Attention:
Yolette Salnave / Andrea Bailey 

          Facsimile:
212-302-7946

          Email:
ny_agencyservices@westlb.com

           

          
            	
                     
      

                  	
                    Re:

                  	
                    PACIFIC
      ETHANOL HOLDING CO. LLC, PACIFIC ETHANOL MADERA LLC, PACIFIC ETHANOL
      COLUMBIA, LLC, 

                    PACIFIC
      ETHANOL STOCKTON, LLC AND PACIFIC ETHANOL MAGIC VALLEY,
  LLC

                  


          

           

          Ladies
and Gentlemen:

           

          The
undersigned, PACIFIC ETHANOL HOLDING CO. LLC, PACIFIC ETHANOL MADERA LLC,
PACIFIC ETHANOL COLUMBIA, LLC, PACIFIC ETHANOL STOCKTON, LLC, and PACIFIC
ETHANOL MAGIC VALLEY, LLC (collectively, the “Borrowers”),
refer to the Debtor-In-Possession Credit Agreement, dated as of May __, 2009 (as
amended, restated, supplemented or otherwise modified from time to time, the
“DIP Credit Agreement”),
by and among the Borrowers, PACIFIC ETHANOL HOLDING CO. LLC, as Borrower Agent,
each of the Lenders from time to time party thereto, WESTLB AG, NEW YORK BRANCH,
as Administrative Agent for the Lenders, WESTLB AG, NEW YORK BRANCH, as
Collateral Agent for the Senior Secured Parties, and AMARILLO NATIONAL BANK, as
Accounts Bank. Capitalized terms used herein but not otherwise defined herein
shall have the respective meanings set forth in the DIP Credit
Agreement.

           

          The
Borrowers hereby deliver to the Administrative Agent this irrevocable notice
pursuant to Section 3.03 of the DIP Credit Agreement and irrevocably request the
duration set forth below for the immediately succeeding Interest Period for the
Loans identified herein.

           

          [The
Borrowers hereby elect to continue Eurodollar Loans as Eurodollar Loans for the
next Interest Period applicable to such continued Eurodollar Loans]
[[,]
to convert Base Rate Loans to Eurodollar Loans at the end of the current Monthly
Period [and]
[to convert Eurodollar Loans to Base Rate Loans at the end of the current
Interest Period for such Eurodollar Loans],
in each case as set forth on Schedule
1 hereto.

           

          The
Borrowers hereby certify that after giving effect to the immediately succeeding
Interest Periods set forth on Schedule
1, there will be no more than eight (8) separate Eurodollar Loans
outstanding.

           

          In
connection herewith, the Borrowers hereby further certify that no Event of
Default has occurred and is continuing. This Interest Period Notice is being
delivered on or before 12:00
noon, New York City time at least four (4) Business Days prior to the end of
each Interest Period set forth on Schedule 1
hereto.

          


           

          The
remainder of this page is intentionally blank. The next page is the signature
page.]

          


           

          


           

           

          


           

           


          
            
               


            

            
              3.03 -
1

              
                

              

            

            
               


            

          


          IN
WITNESS WHEREOF, the undersigned have caused this Interest Period Notice to be
duly executed by an Authorized Officer as of the date first above
written.

           

          
            
              	 	
                      PACIFIC
      ETHANOL HOLDING CO, LLC

                    	 
	 	 	 	 
	
                       

                    	
                      By:
      

                    	/s/ 	 
	 	 	Name 	 
	 	 	Title 	 
	 	 	 	 


            

          

           

          
            
              	 	
                      PACIFIC
      ETHANOL MADERA, LLC

                    	 
	 	 	 	 
	
                       

                    	
                      By:
      

                    	/s/ 	 
	 	 	Name 	 
	 	 	Title 	 
	 	 	 	 


            

          

          
             

            
              	 	
                      PACIFIC
      ETHANOL COLUMBIA, LLC

                    	 
	 	 	 	 
	
                       

                    	
                      By:
      

                    	/s/ 	 
	 	 	Name 	 
	 	 	Title 	 
	 	 	 	 


            

          

           

          
            
              	 	
                      PACIFIC
      ETHANOL MAGIC VALLEY, LLC

                    	 
	 	 	 	 
	
                       

                    	
                      By:
      

                    	/s/ 	 
	 	 	Name 	 
	 	 	Title 	 
	 	 	 	 


            

          

           

           

           

           

          
            
               


            

            
              3.03 -
2

              
                

              

            

            
               


            

          


          Schedule
1

          to Interest Period
Notice

           

          
            	
                    LOAN

                    (specify
      loan type, including whether loan is Base Rate Loan or Eurodollar Loan,
      and tranche)

                  	
                    PRINCIPAL

                    AMOUNT

                  	
                    CURRENT
      INTEREST

                    PERIOD

                    DURATION

                    (for
      Eurodollar

                    Loans
      only)

                  	
                    CURRENT

                    INTEREST

                    PERIOD
      OR

                    MONTHLY

                    PERIOD
      ENDS ON

                  	
                    DURATION
      OF

                    IMMEDIATELY

                    SUCCEEDING

                    INTEREST

                    PERIOD1

                    (for
      Eurodollar

                    Loans
      only)

                  
	 	
                    $

                  	 	 	 
	 	
                    $

                  	 	 	 


          

           

           

           

           

           

           

           

            
              

            

          

          1  The
duration of such Interest Period shall be one (1) month.

           

           


          
            
               


            

            
              3.03 -
3

              
                

              

            

            
               


            

          


          EXHIBIT
4.07

          to
DIP Credit Agreement

           

          FORM
OF NON-U.S. LENDER STATEMENT

           

          Reference
is made to the Debtor-In-Possession Credit Agreement (as amended, modified or
otherwise supplemented from time to time in accordance with its terms, the
“DIP Credit
Agreement”),
dated as of May [ 
], 2009, by and among PACIFIC ETHANOL HOLDING CO. LLC, a Delaware limited
liability company, PACIFIC ETHANOL MADERA LLC, a Delaware limited liability
company, PACIFIC ETHANOL COLUMBIA, LLC, a Delaware limited liability company,
PACIFIC ETHANOL STOCKTON, LLC, a Delaware limited liability company and PACIFIC
ETHANOL MAGIC VALLEY, LLC, a Delaware limited liability company, as Borrowers,
PACIFIC ETHANOL HOLDING CO. LLC, as Borrower Agent, each of the Lenders from
time to time party thereto, WESTLB AG, NEW YORK BRANCH, as Administrative Agent
for the Lenders, WESTLB AG, NEW YORK BRANCH, as Collateral Agent for the Senior
Secured Parties, and AMARILLO NATIONAL BANK, as Accounts Bank. Capitalized terms
used herein but not otherwise defined herein shall have the respective meanings
set forth in the DIP Credit Agreement.

           

          The
undersigned Non-U.S. Lender hereby certifies as follows:

           

          1.      The
Non-U.S. Lender is the beneficial owner of any and all interests in the
Obligations that it holds.

           

          2.      The
Non-U.S. Lender is not a “United States person” as defined in Code Section
7701(a)(30). Code Section 7701(a)(30) defines a United States person as a
citizen or resident of the United States; a domestic partnership; a domestic
corporation; an estate (other than a foreign estate); and a trust if a court
within the United States is able to exercise primary supervision over the
administration of the trust and one or more United States persons have the
authority to control all substantial decisions of the trust.

           

          3.      The
Non-U.S. Lender is not a “bank” described in Section 881(c)(3)(A) of the
Code.

           

          4.      The
Non-U.S. Lender undertakes to notify the Borrowers and Administrative Agent
promptly upon the obsolescence or invalidity of this Non-U.S. Lender Statement
if, following the execution date hereof, any statement herein ceases to be true
at any time while the Non-U.S. Lender is entitled to payments of interest,
principal or any other amounts payable by the Borrowers under the Financing
Documents.

           

          The
undersigned Non-U.S. Lender acknowledges that this Non-U.S. Lender Statement is
executed and delivered in order to substantiate its entitlement to an exemption
from U.S. withholding tax under the Code. Further, the undersigned individual
certifies that it has the requisite authority to execute and deliver this
document for the Non-U.S. Lender.

           

          
            
              	 	
                      [NAME
      OF NON-U.S. LENDER]

                    	 
	 	 	 	 
	
                    	
                      By:
      

                    	/s/ 	 
	 	 	
                      Print
      Name:

                    	 
	 	 	
                      Title:
      

                    	 
	 	 	Date:	 


            

          

          



          
            
               


            

            
              4.07 -
1

              
                

              

            

            
               


            

          


          EXHIBIT
11.03

          to
DIP Credit Agreement

          [FORM
OF]

          LENDER
ASSIGNMENT AGREEMENT

           

          This
LENDER ASSIGNMENT AGREEMENT (this “Agreement”),
dated as of [                  ],
is by and between [               
]
(the “Assignor”)
and [____________]
(the “Assignee”).

           

          RECITALS

           

          WHEREAS,
the Assignor is party to the Debtor-In-Possession Credit Agreement (as amended,
restated, supplemented or otherwise modified from time to time, the “DIP Credit  Agreement”),
dated as of May ___, 2009, by and among PACIFIC ETHANOL HOLDING CO. LLC, a
Delaware limited liability company, PACIFIC ETHANOL MADERA LLC, a Delaware
limited liability company, PACIFIC ETHANOL COLUMBIA, LLC, a Delaware limited
liability company, PACIFIC ETHANOL STOCKTON, LLC, a Delaware limited liability
company and PACIFIC ETHANOL MAGIC VALLEY, LLC, a Delaware limited liability
company, as Borrowers, PACIFIC ETHANOL HOLDING CO. LLC, as Borrower Agent, each
of the Lenders from time to time party hereto, WESTLB AG, NEW YORK BRANCH, as
Administrative Agent for the Lenders, WESTLB AG, NEW YORK BRANCH, as Collateral
Agent for the Senior Secured Parties, and AMARILLO NATIONAL BANK, as Accounts
Bank;

           

          WHEREAS,
Assignor desires to assign certain of its interests under the DIP Credit
Agreement to Assignee in accordance with Section 11.03 thereof;

           

          WHEREAS,
as provided under the DIP Credit Agreement, Assignor is a Lender of [Revolving
Loans]
[Roll Up Loans]
and, as such, as of the date hereof has the outstanding Commitments and has
disbursed the outstanding Loans as set forth in Annex A hereto;

           

          WHEREAS,
Assignor proposes to sell, assign and transfer to the Assignee, and the Assignee
proposes to accept and assume from the Assignor, a [   ] percent ([      ]%)
interest in all of the rights and obligations of the Assignor under the DIP
Credit Agreement and the other Financing Documents (which includes the
outstanding Loans disbursed by and owing to, and the undisbursed commitments of,
Assignor), all on the terms and subject to the conditions of this Agreement
(such interest in such rights and obligations being hereinafter referred to as
the “Assigned Interest”);
and

           

          WHEREAS,
after giving effect to the assignment and assumption under this agreement, the
respective Loans and Commitments of Assignor and Assignee shall be in the
amounts set forth on Annex A.

           

          NOW,
THEREFORE, in consideration of the foregoing and the mutual agreements contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

          


           

          
            
               


            

            
              11.03 -
1

              
                

              

            

            
               


            

          


          Section
1.  Definitions.
All capitalized terms not otherwise defined herein shall have the respective
meanings set forth in the DIP Credit Agreement.

           

          Section 2.  Assignment.

           

          (a)       As
of the effective date set forth on the signature page to this Agreement (the
“Effective Date”),
subject to and in accordance with the DIP Credit Agreement, the Assignor
irrevocably sells, transfers, conveys and assigns, without recourse,
representation or warranty (except as expressly set forth herein), to Assignee,
and the Assignee irrevocably purchases from the Assignor, the Assigned Interest,
which shall include (i) all of Assignor’s rights and obligations in its capacity
as a Lender with respect to the Assigned Interest under the DIP Credit
Agreement, each other Financing Document, and any other documents or instruments
delivered pursuant thereto or in connection therewith to the extent related to
the Assigned Interest and (ii) to the extent permitted to be assigned under
applicable Law, all claims, suits, causes of action and any other right of the
Assignor (in its capacity as a Lender), to the extent related to the Assigned
Interest, against any Person, whether known or unknown, arising under or in
connection with the DIP Credit Agreement, each other Financing Document, and any
other documents or instruments delivered pursuant thereto or the loan
transactions governed thereby or in any way based on or related to any of the
foregoing, including, but not limited to, contract claims, tort claims,
malpractice claims, statutory claims and all other claims at law or in equity
(the foregoing rights, obligations and interests, collectively, the “Assigned Rights”).

           

          (b)       Upon
acceptance and recording of the assignment and assumption made pursuant to this
Agreement by the Administrative Agent, from and after the Effective Date, the
Administrative Agent shall make all payments in respect of the Assigned Interest
and the Assigned Rights (including all payments of principal, interest, fees and
other amounts) to the Assignor for amounts that have accrued prior to the
Effective Date and to the Assignee for amounts that have accrued from and
including the Effective Date. The Assignor and the Assignee shall make all
appropriate adjustments in payments by the Administrative Agent for periods
prior to the Effective Date or with respect to the making of this assignment
directly between themselves. Each of the Assignor and the Assignee agrees that
if it receives any amount under the DIP Credit Agreement or any other Financing
Document that is for the account of the other, it shall hold the same for the
other to the extent of the other’s interest therein and shall pay promptly the
same to the other.

           

          Section
3. Payments.
[(a) ]
As consideration for the sale, assignment and transfer contemplated in Section 2
hereof, the Assignee shall pay to the Assignor, on the Effective Date, in the
lawful currency of the United States and in immediately available funds,
an amount
equal to [                               ]
Dollars ($[         
      ]),
without set-off, counterclaim or deduction of any
kind. [(b)
As a condition to the Effective Date, Assignee shall pay to the Administrative
Agent in the lawful currency of the United States and in immediately available
funds the processing and recordation fee of two thousand five hundred Dollars
($2,500), without set-off, counterclaim or deduction
of any kind.]

           


          
            
               


            

            
              11.03 -
2

              
                

              

            

            
               


            

          


          Section
4. Representations, Warranties
and Undertakings.

           

          (a)       The
Assignor (i) represents and warrants that (A) it is the legal and beneficial
owner of the Assigned Interest and such Assigned Interest is free and clear of
any Lien or adverse claim and (B) it has full power and authority, and has taken
all action necessary, to execute and deliver this Agreement and to consummate
the transactions contemplated hereby; and (ii) makes no representation or
warranty and assumes no responsibility with respect to (A) any statements,
warranties or representations made in or in connection with the DIP Credit
Agreement or the other Financing Documents or the execution, legality, validity,
enforceability or genuineness, or sufficiency of value of the DIP Credit
Agreement, the other Financing Documents, or any other instrument or document
furnished pursuant thereto or in connection therewith or (B) the financial
condition of any Borrower or the performance or observance by any Borrower or
any other Person of any of its obligations under the DIP Credit Agreement, any
other Financing Document, or any other instrument or document furnished pursuant
thereto or in connection therewith.

           

          (b)       The
Assignee (i) represents and warrants that it (A) has full power and authority,
and has taken all action necessary, to execute and deliver this Agreement and to
consummate the transactions contemplated hereby and to become a Lender under the
DIP Credit Agreement and the other Financing Documents, and (B) meets all
requirements of an Eligible Assignee, (ii) acknowledges and confirms that it has
received a copy of the DIP Credit Agreement, each other Financing Document and
such other documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into this Agreement and to purchase
the Assigned Interest and assume the Assigned Rights, on the basis of which it
has made such analysis and decision independently and without reliance on the
Administrative Agent or any other Senior Secured Party, (iii) agrees that it
will, independently and without reliance upon the Administrative Agent, any
Borrower, or any other Senior Secured Party and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the DIP Credit Agreement
or any other Financing Document, (iv) appoints and authorizes each Agent to take
such action as agent on its behalf and to exercise such powers under the DIP
Credit Agreement or the other Financing Documents as are delegated to such Agent
by the terms thereof, together with such powers as are reasonably incidental
thereto and (v) will perform in accordance with their terms all of the
obligations that by the terms of the Financing Documents are required to be
performed by it as a Lender. The Assignee further confirms and agrees that in
becoming a Lender and in making its Loans under the DIP Credit Agreement, such
actions have and will be made without recourse to, or representation or
warranty, by any Senior Secured Party.

           

          (c)       The
Assignee further agrees to furnish the tax form required by Section 4.07(e) (if
so required) of the DIP Credit Agreement no later than the Effective
Date.

           

          Section
5. Effectiveness.

           

          (a)       The
effectiveness of the sale, assignment and transfer hereunder is subject to (i)
the due execution and delivery of this Agreement by the Assignor and the
Assignee, (ii) the receipt by the Assignor of the payment provided for in
Section 3(a) hereof, (iii) consent by the Administrative Agent to this Agreement
and the assignment contemplated hereby, (iv) the receipt
by the Administrative Agent of the processing and recordation fee provided for
in Section 3(b) hereof, and (v) the registration of such assignment by the
Administrative Agent in the Register in accordance with Section 11.03 of the DIP
Credit Agreement.

           


          
            
               


            

            
              11.03 -
3

              
                

              

            

            
               


            

          


           

          (b)       Simultaneously
with the execution and delivery by the parties hereto of this Agreement to the
Administrative Agent for its recording in the Register, the Assignor shall
deliver its Note (if any) to the Administrative Agent and may request that new
Notes be executed and delivered to [the Assignor
and] the
Assignee and reflecting [the respective amounts of the reduced undisbursed
Commitment and outstanding principal of Assignor and] the assigned
and assumed outstanding principal and undisbursed Commitment of the Assignee
(plus, if the Assignee is already a Lender, the amount of its outstanding
principal and undisbursed Commitment immediately prior to the assignment
effected hereby). Any such new Note shall carry the rights to unpaid accrued
interest that were carried by any applicable superseded Note(s) such that no
loss of interest shall result therefrom. Any applicable new Note executed and
delivered in accordance with the foregoing shall have set forth thereon a legend
substantially in the following form:

           

          “This
Note is issued in replacement of [describe
replaced note] 
and,
notwithstanding the date of this Note, this Note carries all of the


          rights to
unpaid interest that were carried by such replaced Note, such that no loss of
interest shall result from any such replacement.”

           

          If the
Assignee is already a Lender, it shall (promptly following its receipt of such
new Note payable to it) return to the Borrower the prior Note, if any, held by
it.

           

          (c)       Except
as otherwise provided in the DIP Credit Agreement, effective as of the Effective
Date:

           

          (i)      the
Assignee shall be deemed automatically to have become a party to, and the
Assignee agrees that it will be bound by the terms and conditions set forth in,
the DIP Credit Agreement, and shall have all the rights and obligations of a
“Lender” under the DIP Credit Agreement and the other Financing Documents as if
it were an original signatory thereto or an original Lender thereunder with
respect to the Assigned Interest and the Assigned Rights; and

           

          (ii)       the
Assignor shall relinquish its rights (but shall continue to be entitled to the
benefits of Sections 11.07 (Costs
and Expenses) and 11.09 (Indemnification
by the Borrowers) of the DIP Credit Agreement) and be released from its
obligations under the DIP Credit Agreement and the other Financing Documents to
the extent specified herein.

           

          Section
6. Governing Law. This Agreement shall
be governed by, and construed in accordance with, the laws of the State of New
York, United States of America.

           

          Section
7. Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed to be an original and all
of which taken together shall constitute one and the same agreement. Delivery of
an executed counterpart of this Agreement by
telecopy or portable document format (“pdf”) shall be effective as delivery of a
manually executed counterpart of this Agreement.

           


          
            
               


            

            
              11.03 -
4

              
                

              

            

            
               


            

          


           

          Section
8. Further Assurances. The Assignor
and the Assignee hereby agree to execute and deliver such other instruments, and
take such other action, as either party or the Administrative Agent may
reasonably request in connection with the transactions contemplated by this
Agreement including, without limitation, the delivery of any notices to the
Borrowers or the Agents that may be required in connection with the assignment
contemplated hereby.

           

          Section
9. Binding
Effect;
Amendment. This Agreement shall be binding upon and inure to the
benefit of the parties and their respective successors and assigns, subject,
however, to the provisions of the DIP Credit Agreement. No provision of this
Agreement may be amended, waived or otherwise modified except by an instrument
in writing signed by each party hereto and by the Administrative
Agent.

           

          Section
10. Administrative Agent
Enforcement. The Administrative Agent shall be entitled to rely
upon and enforce this Agreement against the Assignor and the Assignee in all
respects.

           

          [The remainder of this page is
intentionally blank. The next page is the signature page.]

          


           

           

           


          
            
               


            

            
              11.03 -
5

              
                

              

            

            
               


            

          


          IN
WITNESS WHEREOF, the Assignor and the Assignee have caused this Lender
Assignment Agreement to be executed by their duly authorized
officers.

           

          The
effective date for this Agreement is [the
date this Agreement is acknowledged and accepted by the Administrative
Agent]
[ ,
20[
] (the “Trade Date”)].

           

          
            
              	 	
                      [ASSIGNOR]

                    	 
	 	 	 	 
	
                       

                    	
                      By:
      

                    	/s/ 	 
	 	 	Name 	 
	 	 	Title 	 
	 	 	 	 


            

          

           

          
            
              	 	
                      [ASSIGNEE]

                    	 
	 	 	 	 
	
                       

                    	
                      By:
      

                    	/s/ 	 
	 	 	Name 	 
	 	 	Title 	 
	 	 	 	 


            

          

           

          Accepted
and Acknowledged this ___ day of , 20___

           

          WESTLB
AG, NEW YORK BRANCH, 

            as
Administrative Agent

           

          
            
              	
                      By:
      

                    	/s/ 	 
	 	Name 	 
	 	Title 	 
	 	 	 


            

          

          
             

            
              
                	
                        By:
      

                      	/s/ 	 
	 	Name 	 
	 	Title 	 
	 	 	 


              

            

             


            
              
                 


              

              
                11.03 -
6

                
                  

                

              

              
                 


              

            



          Annex
A

          to Lender Assignment
Agreement

           

          [Note:
Include only those Loans that Assignor has an interest in.]

           

          
            	
                     

                     

                     

                    Loan

                  	
                    Assignor’s

                    Undisbursed

                    Commitment

                    Pre-Assignment

                  	
                    Assignor’s

                    Outstanding

                    Loans

                    Pre-Assignment

                  	
                    Percentage

                    (of
      Assignor’s

                    interests)

                    Assigned

                  	
                    Assignor’s

                    Undisbursed

                    Commitment

                    Post-Assignment

                  	
                    Assignor’s

                    Outstanding

                    Loans

                    Post-Assignment

                  	
                    Assignee’s

                    Undisbursed

                    Commitment

                    Post-Assignment*

                  	
                    Assignee’s

                    Outstanding

                    Loans

                    Post-Assignment*

                  
	
                    Revolving
      Loans

                  	
                    $

                  	
                    $

                  	
                    %

                  	
                    $

                  	
                    $

                  	
                    $

                  	
                    $

                  
	
                    Roll
      Up Loans

                  	
                    $

                  	
                    $

                  	
                    %

                  	
                    $

                  	
                    $

                  	
                    $

                  	
                    $

                  


          

          


           

           

            
              

            

          

          * If Assignee is already a
Lender, this number should be calculated taking into account only the
Commitments and Loans assumed by Assignee pursuant to this
Agreement.


          
            
               


            

            
              Annex
A