peix_8k-ex1001.htm


    EXHIBIT
10.01

    AMENDMENT
NO. 2

    TO

    LETTER
RE: AMENDMENT AND FORBEARANCE AGREEMENT

    


    THIS
AMENDMENT NO. 2 TO LETTER RE: AMENDMENT AND FORBEARANCE AGREEMENT (this
“Amendment”), dated as of March 27, 2009, is by and among WACHOVIA CAPITAL
FINANCE CORPORATION (WESTERN), in its capacity as agent and sole lender
(“Wachovia”), KINERGY MARKETING LLC (“Borrower”) and PACIFIC ETHANOL, INC.
(“Parent”).

     

    W
I T N E S S E T H:

    


    WHEREAS,
Wachovia, Borrower and Parent have previously entered into and executed that
certain Letter re: Amendment and Forbearance Agreement, dated February 13, 2009,
as amended by that certain Amendment No. 1 to Letter re: Amendment and
Forbearance Agreement, dated as of February 26, 2009 (the “Forbearance
Agreement”);

     

    WHEREAS,
it has come to the attention of Wachovia that, in addition to the Specified
Defaults (as defined in the Forbearance Agreement), (a) Borrower has failed to
comply with Section 9.17 of the Loan Agreement as a result of the failure of
Borrower to maintain EBITDA in the amount required by such Section for the two
(2) consecutive month period ending February 28, 2009, which constitutes an
Event of Default under Section 10.1(a)(i) of the Loan Agreement, (b) Borrower
will not be in compliance with Section 9.17 of the Loan Agreement as a result of
the anticipated failure of Borrower to maintain EBITDA in the amount required by
such Section for the three (3) consecutive month period ending March 31, 2009,
which constitutes a
Default under the Loan Agreement (together with the Specified Defaults,
collectively, the “Currently Existing Defaults”).

     

    WHEREAS,
Borrower and Parent have requested that Wachovia extend the Forbearance Period,
which Wachovia is willing to do subject to the terms and provisions hereof;
and

     

    WHEREAS,
by this Amendment, Wachovia, Borrower and Parent wish to evidence the extension
of the Forbearance Period.

     

    NOW
THEREFORE, in consideration of the mutual benefits accruing to Wachovia,
Borrower and Parent hereunder and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto do
hereby agree as follows:

     

    1.           Existing
Definitions.  As used above and in this Amendment, all
capitalized terms used herein and not otherwise defined herein shall have their
respective meanings as set forth in the Forbearance Agreement.

     

    2.           Amendment to Definition of
Applicable Margin.  The
definition of “Applicable Margin” in Section 1.6 of the Loan Agreement is hereby
amended and restated in its entirety as follows:

     

    “Applicable
Margin” shall mean, as to the Interest Rate for Revolving

     

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    Loans
which are Prime Rate Loans, three and one-half (3.50%) percent.”

     

    3.           Prime Rate
Loans.  Notwithstanding
anything to the contrary contained in the Loan Agreement or the other Financing
Agreements, effective as of March 1, 2009, Borrower shall have no right to
request, and Wachovia shall have no obligation to make whatsoever, Eurodollar
Rate Loans to Borrower.

     

    4.           Extension of Forbearance
Period.  At Borrower’s and Parent’s request and in reliance
upon Borrower’s and Parent’s representations, warranties and covenants contained
herein and in the Forbearance Agreement (as amended), as a one-time
accommodation to Borrower and Parent, Wachovia hereby agrees to extend the
Forbearance Period set forth in Section 4(a)(i) of the Forbearance Agreement
from March 31, 2009 to April 30, 2009.  The agreement of Wachovia to
forbear from exercising any of its rights and remedies during the Forbearance
Period shall apply to all of the Currently Existing Defaults.

     

    5.           Conditions
Precedent. This
Amendment shall not become effective unless all of the following conditions
precedent have been satisfied in full, as determined by Wachovia:

     

    (a)           The
receipt by Wachovia of an original (or faxed or electronic copy) of this
Amendment, duly authorized, executed and delivered by Borrower and
Parent;

     

    (b)           The
receipt by Wachovia of an updated thirteen (13) week budget with respect to the
Projected Information, in form and substance satisfactory to
Wachovia;

     

    (c)           The
receipt by Wachovia of one or more unsecured promissory notes, in form and
substance satisfactory to Wachovia, pursuant to which Parent has received from
Persons proceeds of unsecured loans made to Parent in an aggregate amount of not
less than $2,000,000;

     

    (d)           The
receipt by Wachovia of an amendment, in form and substance satisfactory to
Wachovia, to the existing limited forbearance agreement among, West LB, as
agent, the other lenders party thereto, Parent and certain of its subsidiaries
party thereto, pursuant to which the limited forbearance period contained in
such agreement is extended to April 30, 2009;

     

    (e)           The
receipt by Wachovia of an amendment, in form and substance satisfactory to
Wachovia, to the existing forbearance agreement among Lyles United, LLC, Parent
and certain of its subsidiaries party thereto, pursuant to which the limited
forbearance period contained in such agreement is extended to April 30, 2009;
and

     

    (f)           As
of the date of this Amendment, other than the Currently Existing Defaults, no
Default or Event of Default shall have occurred and be continuing.

     

    6.           Amendment
Fee.  In
addition to all other fees, charges, interest and expenses payable by Borrower
to Wachovia under the Loan Agreement and the other Financing Agreements,
Borrower shall pay to Wachovia an amendment and extension fee in the amount of
$50,000, which fee shall be fully earned as of and payable in advance on the
date hereof.

     

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    7.           Effect of this
Amendment.  Except
as modified pursuant hereto, no other changes or modifications to the
Forbearance Agreement are intended or implied, and in all other respects the
Forbearance Agreement is expressly ratified, restated and confirmed by all
parties hereto as of the date hereof, except that, in the event of any conflict
between any term or provision of this Amendment and any term or provision of the
Forbearance Agreement, such term or provision of this Amendment shall
control.

     

    8.           Further
Assurances.  The
parties hereto shall execute and deliver such additional documents and take such
additional actions as Wachovia requests to effectuate the provisions and
purposes of this Amendment and to protect and/or maintain perfection of
Wachovia’s security interests in and liens upon the Collateral.

     

    9.           Counterparts.  This
Amendment may be executed in any number of counterparts, but all such
counterparts shall together constitute but one and the same
Amendment.

     

    [SIGNATURE
PAGE FOLLOWS]

     

     

    
      
        
        

      

      
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    IN
WITNESS WHEREOF, the parties have caused this Amendment to be duly executed as
of the day and year first above written.

     

    


    
      	 
      	
              BORROWER:

            	
               

            
	 
      	 	 
      
	 
      	
              KINERGY
      MARKETING LLC,

               
      as Borrower

               

            
	 	
              By:

            	
              /s/
      BRYON MCGREGOR

            
	 	
              Name:

            	
              Bryon
      McGregor

            
	 
      	
              Title:

            	
              VP
      Finance

            
	 
      	 	 
      
	 	 	 
	 
      	
              PARENT:

            	
               

            
	 
      	 	 
      
	 
      	
              PACIFIC
      ETHANOL, INC,

               
      as Parent

               

            
	 
      	
              By:

            	
              /s/
      BRYON MCGREGOR

            
	 	
              Name:

            	
              Bryon
      McGregor

            
	 	
              Title:

            	
              VP
      Finance

            
	 
      	 	 
      
	 	 	 
	 
      	
              WACHOVIA:

            	
               

            
	 	 	 
	 
      	
              WACHOVIA
      CAPITAL FINANCE 

              CORPORATION
      (WESTERN),

               
      as Agent and sole Lender

               

            
	 
      	
              By:

            	
              
              

              /s/ CARLOS VALLES                                                      

            
	 
      	
              Name:

            	
              Carlos
      Valles

            
	 	
              Title:

            	
              Director

            


    

    
 

     

    
      [Signature
Page to Amendment No. 2 to Forbearance Agreement]

       

       

       

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