peix_8k-ex1006.htm


    EXHIBIT
10.6

    


    PROMISSORY
NOTE

    


    
      	
              $1,000,000

            	
              Sacramento,
      California

            


    

    March 30,
2009

    


    
      FOR VALUE
RECEIVED, the undersigned, PACIFIC ETHANOL, INC., a Delaware corporation (“Borrower”), hereby
promises to pay to NEIL M. KOEHLER or his assigns (“Lender”), the
principal sum of One Million Dollars ($1,000,000) (or such lesser amount as
shall equal the aggregate unpaid principal amount loaned hereunder by Lender)
together with interest thereon as hereinafter provided until this Note is paid
in full.

       

    

    1.            Loans.
Borrower may from time to time request in writing, and thereafter Lender shall
make, by the next business day following such written request, loans hereunder
in an aggregate amount of up to One Dollars ($1,000,000). The aggregate
principal amount of the loans made at any time under this Note shall never
exceed the face amount of this Note.

    


    2.            Principal
and Interest Payments. Interest on the
unpaid principal amount hereof shall accrue at a rate per annum equal to eight
percent (8.0%). All principal and accrued and unpaid interest then owing under
this Note shall be due and payable on the first (1st)
anniversary of the date first set forth above (the
“Maturity
Date”) unless the obligations hereunder are earlier accelerated or
satisfied in accordance with the provisions of this Note. All payments by
Borrower hereunder shall first apply to accrued and unpaid interest and then to
the remaining principal balance under this Note.

    


    3.            Prepayment. Borrower shall have
the right to prepay all or any part of the remaining balance of this Note at any
time, without premium or penalty.

    


    4.            Payments
and Computations. All payments on
account of indebtedness evidenced by this Note shall be made not later than 5:00
p.m., California time, on the day when due in lawful money of the United States.
Payments are to be made at such place as Lender may, from time to time, in
writing appoint, and in the absence of such appointment, then at the principal
place of business of Lender as set forth in Paragraph 7
below.

    


    5.          
 Events of
Default.
The occurrence of any of the following shall constitute an “Event of Default”
under this Note:

    


    (a)           Failure to Pay. Borrower
shall fail to pay (i) when due any principal payment on the date due hereunder,
or (ii) any interest or other payment required under the terms of this Note on
the date due, and any such payment shall not have been made within five (5) days
of Borrower’s receipt of Lender’s written notice to Borrower of such failure to
pay; or

    


    (b)           Breach of Note. Borrower, or
any direct or indirect subsidiary of Borrower, shall fail to comply with any
material provision as to which it is obligated under this Note and any such
failure to comply shall not have been cured within ten (10) days of Borrower’s
receipt of Lender’s written notice to Borrower of such failure to
comply.


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    (c)           Voluntary Bankruptcy or Insolvency
Proceedings. Borrower shall (i) apply for or consent to the appointment
of a receiver, trustee, liquidator or custodian of itself or of all or a
substantial part of its property, (ii) make a general assignment for the benefit
of its creditors, (iii) be dissolved or liquidated, (iv) commence a voluntary
case or other proceeding seeking liquidation, reorganization or other relief
with respect to itself or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or consent to any such relief or to the
appointment of or taking possession of its property by any official in an
involuntary case or other proceeding commenced against it, or (v) take any
action for the purpose of effecting any of the foregoing; or

    


    (d)    Involuntary Bankruptcy or
Insolvency Proceedings. Proceedings for the appointment of a receiver,
trustee, liquidator or custodian of Borrower or of all or a substantial part of
the property thereof, or an involuntary case or other proceedings seeking
liquidation, reorganization or other relief with respect to Borrower or the
debts thereof under any bankruptcy, insolvency or other similar law now or
hereafter in effect shall be commenced and an order for relief entered or such
proceeding shall not be dismissed or discharged within sixty (60) days of
commencement.

    


    6.            Rights of
Lender upon Default. Upon the occurrence
or existence of any Event of Default (other than an Event of Default, referred
to in Paragraphs
5(c) and 5(d)) and at any time thereafter during the continuance of such
Event of Default, Lender may, by written notice to Borrower, immediately declare
all outstanding obligations payable by Borrower hereunder to be immediately due
and payable without presentment, demand, protest or any other notice of any
kind, all of which are hereby expressly waived, anything contained herein to the
contrary notwithstanding. Upon the occurrence or existence of any Event of
Default described in Paragraphs 5(c) and
5(d), immediately and without notice, all outstanding obligations payable by
Borrower hereunder shall automatically become immediately due and payable,
without presentment, demand, protest or any other notice of any kind, all of
which are hereby expressly waived, anything contained herein to the contrary
notwithstanding. Upon the occurrence of an Event of Default, the interest rate
on this Note shall increase by three percent (3.00%) per annum until such
default is cured. In addition to the foregoing remedies, upon the occurrence or
existence of any Event of Default, Lender may exercise any other right, power or
remedy permitted by law, either by suit in equity or by action at law, or
both.

    


    7.            Notices. All notices,
requests, demands, approvals, consents, waivers and othercommunications required
or permitted to be given hereunder shall be in writing and shall be deemed to
have been duly given when (i) if delivered by hand, upon receipt, (ii) if sent
by nationally recognized overnight delivery service (receipt requested), the
next business day or (iii) if mailed by first-class registered or certified
mail, return receipt requested, postage prepaid, four days after posting in the
U.S. mails, in each case if delivered to the following addresses:

    


    
      	 
      	
              If
      to Borrower:

            	
              Pacific
      Ethanol, Inc.

            
	 
      	 
      	
              400
      Capitol Mall, Suite 2060

            
	 
      	 
      	
              Sacramento,
      California 95814

            
	 
      	 
      	
              Attn:
      General Counsel

            
	 	 	 
	 
      	
              If
      to Lender:

            	
              Neil
      M. Koehler

            
	 
      	 
      	
              2429
      Bucklebury Lane Davis,

            
	 
      	 
      	
              California
      95616

            


    

    



    
      
         


      

      
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    or such
other address or facsimile number as either party may designate to the other
party hereto in accordance with the aforesaid procedure. Each party shall
provide notice to the other party of any change in address or facsimile
number.

    


    8.           
Applicable
Law.
This Note shall be construed in accordance with the laws of the State of
California, without regard to conflicts of laws principles. Borrower irrevocably
submits to the exclusive jurisdiction of any California State or United States
Federal court sitting in Fresno County, California over any action or proceeding
arising out of or relating to this Note, and irrevocably agrees that all claims
in respect of such action or proceeding may be heard and determined in such
California State or Federal court. Borrower agrees that a final judgment in any
such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Borrower waives any objection to venue in the State of California and any
objection to an action or proceeding in the State of California on the basis of
forum non conveniens.

    


    9.           
Severability.
The parties hereto intend and believe that each provision in this
Note comports with all applicable local, state and federal laws and judicial
decisions. However, if any provision or provisions, or if any portion of any
provision or provisions, of this Note is found by a court of law to be in
violation of any applicable local, state or federal ordinance, statute, law,
administrative or judicial decision, or public policy, and if the court should
declare that portion, provision or provisions to be illegal, invalid, unlawful,
void or unenforceable as written, then it is the intent of Borrower and Lender
that such portion, provision or provisions be given force to the fullest
possible extent that they are legal, valid and enforceable, that the remainder
of this Note shall be construed as if the illegal, invalid, unlawful, void or
unenforceable portion, provision or provisions were not contained herein, and
that the rights, obligations and interest of Borrower and Lender under the
remainder of this Note shall continue in full force and effect.

    


    10.         
Usury.
In the event any interest is paid on this Note which is deemed to
be in excess of the then legal maximum rate, then that portion of the interest
payment representing an amount in excess of the then legal maximum rate shall be
deemed a payment of principal and applied against the principal of this
Note.

    


    11.          Expenses;
Waiver.
If action is instituted to collect this Note, the Borrower shall pay all costs
and expenses, including, without limitation, reasonable attorneys’ fees and
costs, incurred in connection with such action. In addition, the successful or
prevailing party in any proceeding shall be entitled to recover reasonable
attorneys’ fees and other costs incurred in such proceeding. Borrower and all
parties now or hereafter liable for the payment hereof, whether as endorser,
guarantor, surety or otherwise, generally waive demand, presentment for payment,
notice of dishonor, protest and notice of protest, notice of intent to
accelerate and notice of acceleration, diligence in collecting or bringing suit
against any party hereto, and all other notices, and agree to all extensions,
renewals, indulgences, releases or changes which from time to time may be
granted by the Lender hereof and to all partial payments hereon, with or without
notice before or after maturity.

    


    12.          Successors
and Assigns. The rights and
obligations hereunder of Borrower and Lender shall be binding upon and benefit
the permitted successors, assigns, heirs, administrators and transferees of the
parties.

    



    
      
         


      

      
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    13.          Waiver
and amendment Any provision of this
Note may be amended, waived or modified only upon the prior consent of Borrower
and Lender.

    


    
      	 
      	
              PACIFIC
      ETHANOL, INC.

              a
      Delaware corporation

            
	 	 	 
	 
      	
              By.

            	
              /s/
      John T. Miller

            
	 
      	 
      	
              John
      T. Miller, Chief Operating Officer

            
	 
      	 
      	 
      
	 
      	 
      	
              /s/
      Neil M. Koehler

            
	 
      	 
      	
              NEIL
      M. KOEHLER

            


    

    


    14.          Headings. The headings of the
Paragraphs of this Note are inserted for convenience only and shall not be
deemed to constitute part of this Note or to affect the construction
hereof.

    


    15.          Time of
the Essence. Time is of the essence as to all dates and set forth
herein.

    


    Borrower
and Lender have executed and delivered this Note as of the day and year first
set forth above.

     

     

     

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