Document:

Separation and Consulting Agreement

    Exhibit
      10.1

     

    

    

       

      December
        14, 2006

       

      William
        G. Langley

      Pacific
        Ethanol, Inc.

      5711
        N.
        West Avenue

      Fresno,
        CA 93711

      

      Dear
        Bill:

       

      This
        letter sets forth the terms and conditions of the separation and consulting
        agreement (the “Agreement”)
        between Pacific Ethanol, Inc. (the “Company”)
        and
        you for your transition to retirement. 

       

      1. Separation
        Date. Your
        retirement date and last day of employment shall be December 15, 2006 (the
        “Separation
        Date”).
        

       

      2. Accrued
        Salary and Vacation Pay.
        On the
        Separation Date, the Company will pay you all accrued salary and all accrued
        and
        unused vacation (if any) earned by you through the Separation Date, less
        standard payroll deductions and withholdings. You are entitled to these payments
        by law. 

       

      3. Consulting
        Relationship.
        As part
        of this Agreement, the Company will engage you as a consultant, and you hereby
        agree to be engaged as a consultant, under the following terms.

       

      (a) Consulting
        Period.
        The
        consulting relationship shall commence on the first day following the Separation
        Date and continue until August 15, 2007 (the “Consulting
        Period”).

       

      (b) Consulting
        Services. You
        agree
        that during the Consulting Period, upon the Company’s reasonable request, you
        will provide consulting services in any area of your experience or expertise,
        including but not limited to:
        (i)
        assisting in the preparation and filing of the Company’s Annual Report on Form
        10-K with the SEC; (ii) assisting in the remediation of any material weaknesses
        noted in the Company’s financial statements and SEC filings; and (iii) providing
        information about, and assistance on, any and all Company matters or projects
        with which you were involved, for which you were responsible, or about which
        you
        have knowledge (the “Consulting
        Duties”).
        You
        agree to provide such Consulting Duties for up to eighty (80) hours per month
        for the first three months of the Consulting Period and up to forty (40)
        hours
        per month for the remainder of the Consulting Period. You shall exercise
        the
        highest degree of professionalism and utilize your expertise and creative
        talents in performing the Consulting Duties. During the Consulting Period,
        you
        shall be free to pursue employment or consulting with any third party who,
        to
        the best of your knowledge, is not competing with, or preparing to compete
        with,
        the Company. The Company shall not require you to perform the Consulting
        Duties
        in a manner that would unreasonably interfere with your performance of other
        professional, consulting or employment duties that you may be required to
        perform.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      (c) Consulting
        Compensation.

       

      (i) Consulting
        Fees. During
        the Consulting Period, the Company will pay you consulting fees (the
“Consulting
        Fees”)
        in
        equal monthly payments of fifteen thousand dollars ($15,000.00), beginning
        with
        the first payroll date after the Effective Date of this Agreement (as defined
        in
        Section 12 herein) and continuing on a monthly basis through the end of the
        Consulting Period.

       

      (ii) Health
        Insurance Reimbursement.
        To the
        extent provided by the federal COBRA law or, if applicable, state insurance
        laws, and by the Company’s current group health insurance policies, you will be
        eligible to continue your group health insurance benefits at your own expense
        following the Separation Date. Later, if you wish, you may be able to convert
        to
        an individual policy through the provider of the Company’s health insurance. You
        will be provided with a separate notice describing your rights and obligations
        under the applicable state and/or federal insurance laws. If you enter into
        this
        Agreement and allow it to become effective, and you timely elect such continued
        group health
        insurance coverage, the Company will reimburse your health insurance premiums
        sufficient to continue your group health insurance coverage at the same level
        in
        effect as of the Separation Date (including dependent coverage, if any) through
        the end of the Consulting Period, unless and until you become eligible for
        other
        health coverage with another employer which provides coverage for you and
        your
        family (the “Health
        Insurance Reimbursement”).
        You
        agree to notify the Company in writing immediately upon commencing other
        employment that provides health insurance benefits.

       

      (iii) Stock
        Options. You
        previously were granted an option to purchase up to 425,000
        shares
        of the Company’s common stock pursuant to the terms of the Company’s 2004 Stock
        Option Plan (the “Plan”)
        and
        your governing stock option agreement (the “Stock
        Option Agreement”).
        As of
        your Separation Date, 170,000 of these options have vested and you may exercise
        these vested options (to the extent not already exercised) as set forth in
        the
        Plan and the Stock Option Agreement. The remaining 255,000 unvested options
        shall cease vesting as of the Separation Date; provided, however, that:

       

      (1) If
        you
        enter into this Agreement and allow it to become effective, then the Company
        will accelerate vesting of 42,500 options such that these options shall be
        fully
        vested and exercisable as of the Effective Date of this Agreement;
        and

       

      (2) If
        you
        enter into this Agreement and allow it to become effective, and if you fully
        comply with all of your obligations under this Agreement during the Consulting
        Period (including without limitation your obligation to exercise the highest
        degree of professionalism and utilize your expertise and creative talents
        in
        performing the Consulting Duties as set forth in Section 3(b); your obligations
        to refrain from competing with the Company during the Consulting Period as
        set
        forth in Section 3(b); your proprietary information obligations as set forth
        in
        Section 7; and your nondisparagement obligations as set forth in Section
        8),
        then the Company will accelerate vesting of an additional 42,500 options
        such
        that these options shall be fully vested and exercisable as of the last date
        of
        the Consulting Period (collectively, the “Accelerated
        Vesting”).

       

      
        
          
          

        

        
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      The
        170,000 options that have vested as of your Separation Date, together with
        the
        options that may vest in accordance with clause (1) above, shall be exercisable
        from the date of vesting through the end of the three-month period initiated
        by
        the termination of your employment, as provide in Section 8.1 of the Stock
        Option Agreement (the “Exercise Termination Date”); provided, however, that if
        the Exercise Termination Date would otherwise fall on a date when you would
        be
        prohibited from trading in the Company’s stock pursuant to the Company’s Insider
        Trading And Other Prohibited Trading Activities Policy, then the Exercise
        Termination Date will be extended to the date which is three business days
        after
        you are again permitted to trade in the Company’s stock. The options that may
        vest in accordance with clause (2) above shall be exercisable from the date
        of
        vesting through December 31, 2007. Except as modified in this Section 3(c)(iii),
        your options shall continue to be governed by the terms of the Plan and the
        Stock Option Agreement. 

       

      (d) Independent
        Contractor.
        You
        acknowledge and agree that during the Consulting Period you will be and act
        as
        an independent contractor of the Company and not an employee. You further
        acknowledge and agree that, during the Consulting Period, other than as
        expressly provided herein, you will not be entitled to any of the benefits
        that
        the Company may make available to its employees, such as group insurance,
        workers’ compensation insurance coverage, profit sharing or retirement
        benefits.

       

      (e) Taxes
        and Withholding.
        You are
        solely responsible for, and will file, on a timely basis, all tax returns
        and
        payments required to be filed with, or made to, any federal, state or local
        tax
        authority with respect to the performance of services and receipt of fees
        under
        this Agreement. You are solely responsible for, and must maintain adequate
        records of, expenses incurred in the course of performing services under
        this
        Agreement. The Company will not withhold from the Consulting Fees any amount
        for
        taxes, social security or other payroll deductions. The Company will regularly
        report amounts paid to you by filing Form 1099-MISC with the Internal Revenue
        Service as required by law. You acknowledge that you will be entirely
        responsible for payment of any such taxes, and you hereby indemnify and save
        harmless the Company from any liability for any taxes, penalties or interest
        that may be assessed by any taxing authority with respect to all compensation
        you receive under this Agreement, with the exception of the employer’s share of
        social security, if any.

       

      (f) Protection
        of Information.
        You
        agree that, during the Consulting Period and thereafter, you will not, except
        for the purposes of performing your Consulting Duties, use or disclose any
        confidential or proprietary information or materials of the Company that
        you
        obtain or develop in the course of performing the Consulting
        Duties.

       

      (g) Authority
        During Consulting Period.
        After
        the Separation Date, you will have no authority to bind the Company to any
        contractual obligations, whether written, oral or implied. You agree that
        after
        the Separation Date, you will not represent or purport to represent the Company
        in any manner whatsoever to any third party unless authorized to do so in
        writing by the Company.

       

      
        
          
          

        

        
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      4. No
        Other Compensation or Benefits.
        You
        acknowledge that, except as expressly provided in this Agreement, you have
        not
        earned and will not receive from the Company any additional compensation,
        severance, or benefits relating to or arising from your employment with the
        Company (or the termination thereof), after the Separation Date. You acknowledge
        and agree that you are not and shall not be entitled to any severance
        compensation or benefits set forth in your Executive Employment Agreement
        dated
        August 10, 2005 (the “Employment
        Agreement”),
        including but not limited to any compensation or benefits set forth in Section
        6
        of the Employment Agreement. 

       

      5. Expense
        Reimbursement.
        You
        agree that, within thirty (30) days after the end of the Consulting Period,
        you
        will submit your final documented expense reimbursement statement reflecting
        all
        business expenses you incurred through the last day of the Consulting Period,
        if
        any, for which you seek reimbursement. The Company will reimburse you for
        such
        expenses pursuant to its regular business practice; provided that you shall
        not
        incur reimbursable expenses during the Consulting Period without the prior
        written consent of the Company. During the Consulting Period, reimbursable
        expenses shall include (without limitation) any travel costs (including airfare
        and lodging costs) associated with any onsite work in Fresno, Sacramento,
        or any
        other location reasonably requested by the Company, and costs associated
        with
        the moving of your household goods from Fresno back to Portland, Oregon (up
        to a
        maximum of $5,000, which amount may be subject to payroll withholding). However,
        you shall not be entitled to receive any temporary living expense reimbursements
        after the Separation Date. 

       

      6. Return
        of Company Property.
        Except
        for materials which the Company authorizes you in writing to retain for purposes
        of performing the Consulting Duties, within ten (10) days after the Separation
        Date, you agree to return to the Company all Company documents (and all copies
        thereof) and other Company property that, to the best of your knowledge,
        is in
        your possession or control. You agree that you will make a diligent search
        to
        locate any such documents, property and information. In addition, if you
        have
        used any personal computer, server, or e-mail system to receive, store, prepare
        or transmit any Company confidential or proprietary data, materials or
        information, you agree to immediately provide the Company with a
        computer-useable copy of all such information, and once you have done so
        you
        agree to permanently delete and expunge all Company confidential or proprietary
        information and data from those systems; and you agree to provide the Company
        access to your system as reasonably requested to verify that the necessary
        copying and/or deletion is completed. Your timely return of all such Company
        documents and other property is a precondition to your receipt of the Consulting
        Fees, Health Insurance Reimbursement, Accelerated Vesting and other rights
        and
        benefits provided under this Agreement. Notwithstanding the foregoing, the
        Company will allow you to keep your Company-issued laptop computer provided
        that
        on both the Separation Date and the final date of the Consulting Period,
        you
        return the computer to the Company and allow the Company to remove all
        confidential and proprietary Company information contained on it. The Company
        also agrees that you may take over the contract for your Blackberry with
        Nextel.

       

      7. Proprietary
        Information Obligations.
        You
        acknowledge that during your employment with the Company you had access to
        and
        obtained proprietary information and trade secrets of the Company. Concurrent
        with your signing of this Agreement, and as a condition of your receipt of
        the
        Consulting Fees and Health Insurance Reimbursement provided hereunder, you
        shall
        sign and return the Proprietary Information Agreement attached hereto as
        Exhibit
        A.

       

      
        
          
          

        

        
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      8. Nondisparagement;
        Public Announcement.
        You
        agree
        not to disparage the Company or its officers, directors, employees, shareholders
        and agents, in any manner likely to be harmful to them or their business,
        business reputations or personal reputations; and the Company (through its
        officers and directors) agrees not to disparage you in any manner likely
        to be
        harmful to you or your business, business reputation or personal reputation;
        provided that you and the Company may respond accurately and fully to any
        inquiry or request for information if required by legal process. In addition,
        within four days of the Effective Date of this Agreement, the Company will
        publicly announce that you are retiring from the Company but will remain
        as a
        consultant to the Company for an eight-month period after your separation
        to
        assist in transitioning your duties. Finally, as part of this Agreement,
        the
        Company (through its Board Chairman) will provide you with a letter of
        reference. 

       

      9. No
        Voluntary Adverse Action.
        You
        agree that you will not voluntarily (except in response to legal compulsion)
        assist any third party in bringing or pursuing any proposed or pending
        litigation, arbitration, administrative claim or other formal proceeding
        against
        the Company, its parent or subsidiary entities, affiliates, officers, directors,
        employees or agents. 

       

      10. Cooperation.
        You
        agree to cooperate fully with any reasonable requests by the Company in
        connection with its actual or contemplated defense, prosecution, or
        investigation of any claims or demands by or against third parties, or other
        matters arising from events, acts, or failures to act that occurred during
        the
        period of your employment by the Company. Such cooperation includes, without
        limitation, making yourself available to the Company upon reasonable notice,
        without subpoena, to provide complete, truthful and accurate information
        in
        witness interviews, depositions and trial testimony. The Company will reimburse
        you for reasonable out-of-pocket expenses you incur in connection with any
        such
        cooperation (excluding forgone wages, salary, or other compensation) and
        will
        make reasonable efforts to accommodate your scheduling needs. In addition,
        you
        agree to execute all documents that are reasonably requested (if any) and
        necessary to carry out the terms of this Agreement. 

       

      11. Release
        of Claims.
        In
        exchange for the consideration under this Agreement to which you would not
        otherwise be entitled, including but not limited to the Consulting Fees,
        Health
        Insurance Reimbursement and Accelerated Vesting, you hereby generally and
        completely release the Company and its parent, subsidiary, and affiliated
        entities (along with their predecessors and successors) and their directors,
        officers, employees, shareholders, partners, agents, attorneys, insurers,
        affiliates and assigns, from any and all claims, liabilities and obligations,
        both known and unknown, that arise from or are in any way related to events,
        acts, conduct, or omissions occurring at any time prior to and including
        the
        date that you sign this Agreement. This general release includes, but is
        not
        limited to: (a) all claims arising out of or in any way related to your
        employment with the Company or the termination of that employment; (b) all
        claims related to your compensation or benefits from the Company, including
        salary, bonuses, commissions, vacation pay, expense reimbursements, severance
        payments, fringe benefits, stock, stock options, or any other ownership or
        equity interests in the Company, with the exception of the Accelerated Vesting
        to the extent that such vesting may be claimed to be covered by this release;
        (c) all claims for breach of contract, wrongful termination, and breach of
        the implied covenant of good faith and fair dealing; (d) all tort claims,
        including but not limited to claims for fraud, defamation, emotional distress,
        and discharge in violation of public policy; and (e) all federal, state,
        and
        local statutory claims, including but not limited to claims for discrimination,
        harassment, retaliation, attorneys’ fees, or other claims arising under the
        federal Civil Rights Act of 1964 (as amended), the federal Americans with
        Disabilities Act of 1990 (as amended), the federal Age Discrimination in
        Employment Act of 1967 (as amended) (the “ADEA”),
        the
        California Family Rights Act, the California Labor Code (as amended), and
        the
        California Fair Employment and Housing Act. Notwithstanding anything in this
        paragraph, you are not hereby releasing the Company from any obligation it
        may
        otherwise have to indemnify you for your acts within the course and scope
        of
        your employment with the Company (including without limitation the Company’s
        obligation to indemnify you pursuant to the terms of that certain
        Indemnification Agreement between you and the Company dated as of April 13,
        2005), nor from any obligations undertaken by the Company in this Agreement.
        You
        represent that you have no lawsuits, claims or actions pending in your name,
        or
        on behalf of any other person or entity, against the Company or any other
        person
        or entity subject to the release granted in this paragraph. 

       

      
        
          
          

        

        
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      12. ADEA
        Waiver.
        You
        hereby acknowledge that you are knowingly and voluntarily waiving and releasing
        any rights you may have under the ADEA and that the consideration given for
        the
        waiver and release in the preceding paragraph is in addition to anything
        of
        value to which you were already entitled. You further acknowledge that you
        have
        been advised, as required by the ADEA, that: (a) your waiver and release
        do not
        apply to any rights or claims that may arise after the date that you sign
        this
        Agreement; (b) you should consult with an attorney prior to signing this
        Agreement (although you may voluntarily decide not to do so); (c) you have
        twenty-one (21) days within which to consider this Agreement (although
        you may choose voluntarily to sign this Agreement earlier);
        (d) you have seven (7) days following the date that you sign this
        Agreement to
        revoke
        this Agreement (in a written revocation received by the Company’s Chief
        Executive Officer); and (e) this Agreement will not be effective until the
        eighth day after this Agreement has been signed both by you and by the Company
        (the “Effective
        Date”).

       

      13. Section
        1542 Waiver.
        In
        giving the releases set forth in this Agreement, which include claims which
        may
        be unknown to you at present, you acknowledge that you have read and understand
        Section 1542 of the California Civil Code which reads as follows: “A
        general release does not extend to claims which the creditor does not know
        or
        suspect to exist in his or her favor at the time of executing the release,
        which
        if known by him or her must have materially affected his or her settlement
        with
        the debtor.”
        You
        hereby expressly waive and relinquish all rights and benefits under that
        section
        and any law or legal principle of similar effect in any jurisdiction with
        respect to the releases granted herein, including but not limited to the
        release
        of unknown and unsuspected claims granted in this Agreement. 

       

      14. Representations.
        You
        hereby represent that, except for the payments required by this Agreement,
        you
        have been paid all compensation owed and for all hours worked, have received
        all
        the leave and leave benefits and protections for which you are eligible,
        pursuant to the Family and Medical Leave Act or otherwise, and have not suffered
        any on-the-job injury for which you have not already filed a claim.

       

      
        
          
          

        

        
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      15. Dispute
        Resolution.
        Your
        compliance with your obligations under this Agreement will be monitored by
        either the Audit Committee of the Company’s Board of Directors or by the full
        Board of Directors. To aid in the rapid and economical resolution of any
        disputes which may arise under this Agreement, you and the Company agree
        that
        any and all claims, disputes or controversies of any nature whatsoever arising
        from or regarding the interpretation, performance, negotiation, execution,
        enforcement or breach of this Agreement shall be resolved by confidential,
        final
        and binding arbitration conducted before a single arbitrator with Judicial
        Arbitration and Mediation Services, Inc. (“JAMS”) in San Francisco, California,
        under JAMS’ then-applicable arbitration rules. The
        parties acknowledge that by agreeing to this arbitration procedure, they
        waive
        the right to resolve any such dispute through a trial by jury, judge or
        administrative proceeding. You
        will
        have the right to be represented by legal counsel at any arbitration proceeding.
        The arbitrator shall: (a) have the authority to compel adequate discovery
        for
        the resolution of the dispute and to award such relief as would otherwise
        be
        available under applicable law in a court proceeding; and (b) issue a written
        statement signed by the arbitrator regarding the disposition of each claim
        and
        the relief, if any, awarded as to each claim, the reasons for the award,
        and the
        arbitrator’s essential findings and conclusions on which the award is based. The
        Company shall bear the JAMS arbitration fees and administrative costs. Nothing
        in this Agreement shall prevent either you or the Company from obtaining
        injunctive relief in court to prevent irreparable harm pending the conclusion
        of
        any such arbitration. 

       

      16. Miscellaneous.
        This
        Agreement, including
        Exhibit A, constitutes the complete, final and exclusive embodiment of the
        entire agreement between you and the Company with regard to this subject
        matter.
        It is entered into without reliance on any promise or representation, written
        or
        oral, other than those expressly contained herein, and it supersedes any
        other
        such promises, warranties or representations (including but not limited to
        any
        promises set forth in the Employment Agreement). This Agreement may not be
        modified or amended except in a writing signed by both you and a duly authorized
        officer of the Company. This Agreement will bind the heirs, personal
        representatives, successors and assigns of both you and the Company, and
        inure
        to the benefit of both you and the Company, their heirs, successors and assigns.
        If any provision of this Agreement is determined to be invalid or unenforceable,
        in whole or in part, this determination will not affect any other provision
        of
        this Agreement and the provision in question will be modified by the court
        so as
        to be rendered enforceable. This Agreement will be deemed to have been entered
        into and will be construed and enforced in accordance with the laws of the
        State
        of California without regard to conflicts of law principles. This Agreement
        may
        be executed in counterparts, each of which shall be deemed to part of one
        original, and facsimile signatures shall be equivalent to original signatures.
        

       

      Sincerely,

       

      Pacific
        Ethanol, Inc.  

       

      By:
        /S/
        BILL JONES 

       Bill
        Jones 

       Chairman
        of Board of Directors

      

      

      
        
          
          

        

        
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      Understood
        and Agreed:

       

      /S/
        WILLIAM G. LANGLEY

       
        William G. Langley

       

      Date:
        14
        December 2006 

      

      

      Exhibit
        A
        -Proprietary Information and Inventions Agreement

       

       

       

      
        
          
          

        

        
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      Exhibit
        A 

      

      PROPRIETARY
        INFORMATION AND INVENTIONS AGREEMENT

       

      

        CONFIDENTIAL
          INFORMATION AND INVENTIONS ASSIGNMENT AGREEMENT

         

        In
          consideration of my continued consultancy by Pacific Ethanol, Inc.
          (“Company”)
          as a
          consultant, and the compensation paid to me now and during my consultancy
          with
          the Company, I agree to the terms of this Agreement as follows:

        
          	1.	
                  Confidential
                    Information Protections.

                

        

         

        1.1 Nondisclosure;
          Recognition of Company’s Rights.
          At all
          times during and after my consultancy, I will hold in confidence and will
          not
          disclose, use, lecture upon, or publish any of Company’s Confidential
          Information (defined below), except as may be required in connection with
          my
          work for Company, or as expressly authorized by the General Counsel (the
          “GC”)
          of
          Company. I will obtain the GC’s written approval before publishing or submitting
          for publication any material (written, oral, or otherwise) that relates
          to my
          work at Company and/or incorporates any Confidential Information. I hereby
          assign to Company any rights I may have or acquire in any and all Confidential
          Information and recognize that all Confidential Information shall be the
          sole
          and exclusive property of Company and its assigns.

         

        1.2 Confidential
          Information.
          The term
“Confidential
          Information”
shall
          mean any and all confidential knowledge, data or information related to
          Company’s business or its actual or demonstrably anticipated research or
          development, including without limitation (a) trade secrets, inventions,
          ideas,
          processes, computer source and object code, data, formulae, programs, other
          works of authorship, know-how, improvements, discoveries, developments,
          designs,
          and techniques; (b) information regarding products, services, plans for
          research
          and development, marketing and business plans, budgets, financial statements,
          contracts, prices, suppliers, and customers; (c) information regarding
          the
          skills and compensation of Company’s employees, contractors, and any other
          service providers of Company; and (d) the existence of any business discussions,
          negotiations, or agreements between Company and any third party. 

         

        1.3 Third
          Party Information. I
          understand that Company has received and in the future will receive from
          third
          parties confidential or proprietary information (“Third
          Party Information”)
          subject
          to a duty on Company’s part to maintain the confidentiality of such information
          and to use it only for certain limited purposes. During and after the term
          of my
          consultancy, I will hold Third Party Information in strict confidence and
          will
          not disclose to anyone (other than Company personnel who need to know such
          information in connection with their work for Company) or use, Third Party
          Information, except in connection with my work for Company or unless expressly
          authorized by an officer of Company in writing.

         

        1.4 No
          Improper Use of Information of Prior Employers and Others.
          I
          represent that my consultancy by Company does not and will not breach any
          agreement with any former employer, including any noncompete agreement
          or any
          agreement to keep in confidence or refrain from using information acquired
          by me
          prior to my consultancy by Company. I further represent that I have not
          entered
          into, and will not enter into, any agreement, either written or oral, in
          conflict with my obligations under this Agreement. During my consultancy
          by
          Company, I will not improperly make use of, or disclose, any information
          or
          trade secrets of any former employer or other third party, nor will I bring
          onto
          the premises of Company or use any unpublished documents or any property
          belonging to any former employer or other third party, in violation of
          any
          lawful agreements with that former employer or third party. I will use
          in the
          performance of my duties only information that is generally known and used
          by
          persons with training and experience comparable to my own, is common knowledge
          in the industry or otherwise legally in the public domain, or is otherwise
          provided or developed by Company. 

         

        
          	2.	
                  Inventions.

                

        

         

        2.1 Inventions
          and Intellectual Property Rights. As
          used
          in this Agreement, the term “Invention”
          means
          any ideas, concepts, information, materials, processes, data, programs,
          know-how, improvements, discoveries, developments, designs, artwork, formulae,
          other copyrightable works, and techniques and all Intellectual Property
          Rights
          in any of the items listed above. The term “Intellectual
          Property Rights”
          means
          all trade secrets, copyrights, trademarks, mask work rights, patents and
          other
          intellectual property rights recognized by the laws of any jurisdiction
          or
          country.

         

        2.2 Prior
          Inventions.
          I have
          disclosed on Exhibit
          A a
          complete list of all Inventions that (a) I have, or I have caused to be,
          alone
          or jointly with others, conceived, developed, or reduced to practice prior
          to
          the commencement of my consultancy by Company; (b) in which I have an ownership
          interest or which I have a license to use; (c) and that I wish to have
          excluded
          from the scope of this Agreement (collectively referred to as “Prior
          Inventions”).
          If no
          Prior Inventions are listed in Exhibit
          A,
          I
          warrant that there are no Prior Inventions. I agree that I will not incorporate,
          or permit to be incorporated, Prior Inventions in any Company Inventions
          (defined below) without Company’s prior written consent. If, in the course of my
          consultancy with Company, I incorporate a Prior Invention into a Company
          process, machine or other work, I hereby grant Company a non-exclusive,
          perpetual, fully-paid and royalty-free, irrevocable and worldwide license,
          with
          rights to sublicense through multiple levels of sublicensees, to reproduce,
          make
          derivative works of, distribute, publicly perform, and publicly display
          in any
          form or medium, whether now known or later developed, make, have made,
          use,
          sell, import, offer for sale, and exercise any and all present or future
          rights
          in, such Prior Invention. 

         

        
          
            
            

          

          
            1

            
              

            

          

          
            
            

          

        

        2.3 Assignment
          of Company Inventions.
          Inventions assigned to the Company or to a third party as directed by the
          Company pursuant to the section titled “Government or Third Party” are referred
          to in this Agreement as “Company
          Inventions.”
          Subject to the section titled “Government or Third Party” and except for
          Inventions that I can prove qualify fully under the provisions of California
          Labor Code section 2870 and I have set forth in Exhibit
          A,
          I
          hereby assign and agree to assign in the future (when any such Inventions
          or
          Intellectual Property Rights are first reduced to practice or first fixed
          in a
          tangible medium, as applicable) to Company all my right, title, and interest
          in
          and to any and all Inventions (and all Intellectual Property Rights with
          respect
          thereto) made, conceived, reduced to practice, or learned by me, either
          alone or
          with others, during the period of my consultancy by Company. 

         

        2.4 Obligation
          to Keep Company Informed.
          During
          the period of my consultancy and for one (1) year after my consultancy
          ends, I
          will promptly and fully disclose to Company in writing (a) all Inventions
          authored, conceived, or reduced to practice by me, either alone or with
          others,
          including any that might be covered under California Labor Code section
          2870,
          and (b) all patent applications filed by me or in which I am named as an
          inventor or co-inventor. 

         

        2.5 Government
          or Third Party.
          I agree
          that, as directed by the Company, I will assign to a third party, including
          without limitation the United States, all my right, title, and interest
          in and
          to any particular Company Invention. 

         

        2.6 Enforcement
          of Intellectual Property Rights and Assistance.
          During
          and after the period of my consultancy, I will assist Company in every
          proper
          way to obtain and enforce United States and foreign Intellectual Property
          Rights
          relating to Company Inventions in all countries. If the Company is unable
          to
          secure my signature on any document needed in connection with such purposes,
          I
          hereby irrevocably designate and appoint Company and its duly authorized
          officers and agents as my agent and attorney in fact, which appointment
          is
          coupled with an interest, to act on my behalf to execute and file any such
          documents and to do all other lawfully permitted acts to further such purposes
          with the same legal force and effect as if executed by me. 

         

        2.7 Incorporation
          of Software Code.
          I agree
          that I will not incorporate into any Company software or otherwise deliver
          to
          Company any software code licensed under the GNU General Public License
          or
          Lesser General Public License or any other license that, by its terms,
          requires
          or conditions the use or distribution of such code on the disclosure, licensing,
          or distribution of any source code owned or licensed by Company.

         

        3. Records.
          I agree
          to keep and maintain adequate and current records (in the form of notes,
          sketches, drawings and in any other form that is required by the Company)
          of all
          Inventions made by me during the period of my consultancy by the Company,
          which
          records shall be available to, and remain the sole property of, the Company
          at
          all times.

         

        4. Additional
          Activities.
          I agree
          that (a) during the term of my consultancy by Company, I will not, without
          Company’s express written consent, engage in any consultancy or business
          activity that is competitive with, or would otherwise conflict with my
          consultancy by, Company, and (b) for the period of my consultancy by Company
          and
          for one (l) year thereafter, I will not, either directly or indirectly,
          solicit
          or attempt to solicit any employee, independent contractor, or consultant
          of
          Company to terminate his, her or its relationship with Company in order
          to
          become an employee, consultant, or independent contractor to or for any
          other
          person or entity.

         

        5. Return
          Of Company Property. Upon
          termination of my consultancy or upon Company’s request at any other time, I
          will deliver to Company all of Company’s property, equipment, and documents,
          together with all copies thereof, and any other material containing or
          disclosing any Inventions, Third Party Information or Confidential Information
          and certify in writing that I have fully complied with the foregoing obligation.
          I agree that I will not copy, delete, or alter any information contained
          upon my
          Company computer or Company equipment before I return it to Company.
In
          addition, if I have used any personal computer, server, or e-mail system
          to
          receive, store, review, prepare or transmit any Company
          information, including but not limited to, Confidential Information, I
          agree to
          provide the Company with a computer-useable copy of all such Confidential
          Information and then permanently delete and expunge such Confidential
          Information from those systems; and I agree to provide the Company access
          to my
          system as reasonably requested to verify that the necessary copying and/or
          deletion is completed. I
          further
          agree that any property situated on Company’s premises and owned by Company is
          subject to inspection by Company’s personnel at any time with or without notice.
          Prior to the termination of my consultancy or promptly after termination
          of my
          consultancy, I will cooperate with Company in attending an exit interview
          and
          certify in writing that I have complied with the requirements of this section.
          

         

        6. Notification
          Of New Employer.
          I
          consent to the notification of my new employer of my rights and obligations
          under this Agreement, by Company providing a copy of this Agreement or
          otherwise.

         

        
          	7.	
                  General
                    Provisions.

                

        

         

        7.1 Governing
          Law and Venue.
          This
          Agreement and any action related thereto will be governed and interpreted
          by and
          under the laws of the State of California, without giving effect to any
          conflicts of laws principles that require the application of the law of
          a
          different state. I
          expressly consent to personal jurisdiction and venue in the state and federal
          courts for the county in which Company’s principal place of business is located
          for any lawsuit filed there against me by Company arising from or related
          to
          this Agreement.

         

        
          
            
            

          

          
            2

            
              

            

          

          
            
            

          

        

        7.2 Severability.
          If any
          provision of this Agreement is, for any reason, held to be invalid or
          unenforceable, the other provisions of this Agreement will remain enforceable
          and the invalid or unenforceable provision will be deemed modified so that
          it is
          valid and enforceable to the maximum extent permitted by law.

         

        7.3 Survival.
          This
          Agreement shall survive the termination of my consultancy and the assignment
          of
          this Agreement by Company to any successor or other assignee and be binding
          upon
          my heirs and legal representatives.

         

        7.4 Consultancy.
          I agree
          and understand that nothing in this Agreement shall give me any right to
          continued consultancy by Company, and it will not interfere in any way
          with my
          right or Company’s right to terminate my consultancy at any time, with or
          without cause and with or without advance notice.

         

        7.5 Notices.
          Each
          party must deliver all notices or other communications required or permitted
          under this Agreement in writing to the other party at the address listed
          on the
          signature page, by courier, by certified or registered mail (postage prepaid
          and
          return receipt requested), or by a nationally-recognized express mail service.
          Notice will be effective upon receipt or refusal of delivery. If delivered
          by
          certified or registered mail, notice will be considered to have been given
          five
          (5) business days after it was mailed, as evidenced by the postmark. If
          delivered by courier or express mail service, notice will be considered
          to have
          been given on the delivery date reflected by the courier or express mail
          service
          receipt. Each party may change its address for receipt of notice by giving
          notice of the change to the other party.

         

        7.6 Injunctive
          Relief.
          I
          acknowledge that, because my services are personal and unique and because
          I will
          have access to the Confidential Information of Company, any breach of this
          Agreement by me would cause irreparable injury to Company for which monetary
          damages would not be an adequate remedy and, therefore, will entitle Company
          to
          injunctive relief (including specific performance). The rights and remedies
          provided to each party in this Agreement are cumulative and in addition
          to any
          other rights and remedies available to such party at law or in
          equity.

         

        7.7 Waiver.
          Any
          waiver or failure to enforce any provision of this Agreement on one occasion
          will not be deemed a waiver of that provision or any other provision on
          any
          other occasion.

         

        7.8 Export.
          I agree
          not to export, directly or indirectly, any U.S. technical data acquired
          from
          Company or any products utilizing such data, to countries outside the United
          States, because such export could be in violation of the United States
          export
          laws or regulations.

         

        7.9 Entire
          Agreement.
          If no
          other agreement governs nondisclosure and assignment of inventions during
          any
          period in which I was previously employed or am in the future employed
          by
          Company as an independent contractor, the obligations pursuant to sections
          of
          this Agreement titled “Confidential Information Protections” and “Inventions”
shall apply. This Agreement is the final, complete and exclusive agreement
          of
          the parties with respect to the subject matter hereof and supersedes and
          merges
          all prior communications between us with respect to such matters. No
          modification of or amendment to this Agreement, or any waiver of any rights
          under this Agreement, will be effective unless in writing and signed by
          me and
          the GC of Company. Any subsequent change or changes in my duties, salary
          or
          compensation will not affect the validity or scope of this Agreement.

         

         

        This
          Agreement shall be effective as of the first day of my consultancy with
          Company.

         

        
          	
                  CONSULTANT:
                    

                   

                  I
                    have read, understand, and Accept this agreement and have been
                    given the
                    opportunity to Review it with independent legal
                    counsel.

                   

                  /S/
                    WILLIAM G. LANGLEY 
                    

                  

                  (Signature)

                   

                  By:
                    William G. Langley 

                   

                  Title:
                    _____________________________________________ 

                   

                  Date:
                    14 December 2006 

                   

                  Address:
                    __________________________________________

                   

                	 	
                  PACIFIC
                    ETHANOL, INC:
                    

                   

                  Accepted
                    and agreed:

                   

                   

                  /S/
                    BILL JONES 
                    

                  

                  (Signature)

                   

                  By:
                    Bill Jones 

                   

                  Title:
                    Chairman 

                   

                  Date:
                    14 December 2006 

                   

                  Address:
                    5711 N. West Avenue, Fresno, CA 93711

                   

                

        

        

         

        
          
            
            

          

          
            3

            
              

            

          

          
            
            

          

        

        EXHIBIT
          A

         

        INVENTIONS

         

        1. Prior
          Inventions Disclosure.
          The
          following is a complete list of all Prior Inventions (as provided in Section
          2.2
          of the attached Confidential Information and Inventions Assignment Agreement,
          defined herein as the “Agreement”):

         

        
          	
                	x	
                  None

                

        

         

        
          	
                	o	
                  See
                    immediately below:

                

        

         

         

          
            

          

        

         

          
            

          

        

         

         

        2. Limited
          Exclusion Notification. 

         

        This
          is to notify you
          in
          accordance with Section 2872 of the California Labor Code that the foregoing
          Agreement between you and Company does not require you to assign or offer
          to
          assign to Company any Invention that you develop entirely on your own time
          without using Company’s equipment, supplies, facilities or trade secret
          information, except for those Inventions that either:

         

        a. Relate
          at
          the time of conception or reduction to practice to Company’s business, or actual
          or demonstrably anticipated research or development; or

         

        b. Result
          from any work performed by you for Company.

         

        To
          the
          extent a provision in the foregoing Agreement purports to require you to
          assign
          an Invention otherwise excluded from the preceding paragraph, the provision
          is
          against the public policy of this state and is unenforceable.

         

        This
          limited exclusion does not apply to any patent or Invention covered by
          a
          contract between Company and the United States or any of its agencies requiring
          full title to such patent or Invention to be in the United States.

         

        

        A-1<PAGE>
                                                                    EXHIBIT 4.09

                                                              November 21, 2006

AJW Partners, LLC
AJW Qualified Partners, LLC
AJW Offshore, Ltd.
New Millennium Capital Partners, II, LLC
c/o NIR Group, Inc.
1044 Northern Boulevard
Roslyn, New York 11576

Gentlemen:

     This letter is intended to amend the Securities Purchase Agreement (the
"Agreement") dated July 25, 2006 by and among Ingen Technologies, Inc. (the
"Company"), AJW Qualified Partners, LLC ("Qualified"), New Millennium Capital
Partners II, LLC ("NMC"), AJW Offshore, Ltd. ("Offshore") and AJW Partners, LLC
("AJW") (Qualified, NMC, Offshore and AJW are collectively referred to as the
"Investors"). The Agreement currently provides for a $2million financing. The
Company has been funded $1.3million in gross proceeds to date and is due another
$700,000 upon the declaration of an effective registration statement from the
Securities and Exchange Commission. It is agreed, that notwithstanding anything
to the contrary contained in the Agreement that the financing will now total
$1.5million in gross proceeds to the Company with the remaining $200,000 to be
funded after the Company receives its initial set of comments from the
registration statement scheduled to be filed between November 22 and November
29. All other terms of the Agreement will remain unchanged.

<PAGE>

Page 2
Amendment to Securities Purchase Agreement
November 21, 2006

     To indicate your acceptance, please sign in the indicated space.

                                               Sincerely,

                                               INGEN TECHNOLOGIES, INC.

                                               By: s/s
                                                   Scott Sand
                                                   Chief Executive Officer

Agreed and Accepted

AJW Offshore, Ltd.

By: s/s

AJW Partners, LLC

By: s/s

New Millennium Capital Partners II, LLC

By: s/s

AJW Qualified Partners, LLC

By: s/s

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